Chief Justice Ma: 1. I agree with the judgment of Mr Justice Stock NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Stock NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Mr Justice Stock NPJ. Mr Justice Stock NPJ: The issue 4. The question in this appeal is whether the prosecution has a right to a closing speech in a criminal trial in the magistracy where the defendant is unrepresented and, apart from giving evidence himself, has not called any witnesses. The Proceedings 5. An information was laid against the appellant alleging that in January 2014 being a data user, he provided the personal data of one Joseph Lei to a Ms Tam for use by her in direct marketing. Without taking certain prescribed measures before providing that data, such as obtaining Lei’s consent, such action constitutes an offence contrary to s.35J(5)(b) of the Personal Data (Privacy) Ordinance, Cap 486. 6. A similar information was laid against Ms Tam but in her case the allegation was that she had for the purpose of direct marketing used Lei’s personal data supplied by the appellant. 7. The facts fall within a narrow compass. Mr Lei’s evidence was that he and the appellant were acquaintances through alumni activities and that at a Christmas party in 2013 he handed his name card to the appellant. However, without his consent, the appellant then provided Ms Tam with information from that card, namely, Lei’s first name and his mobile telephone number. The appellant knew that Ms Tam worked for an insurance company; indeed, she had sold financial products to him. Shortly thereafter Ms Tam contacted Lei both by Whatsapp messages and two telephone calls and tried to interest him in financial planning services. Lei took umbrage at the use of his personal details in this way, gave these approaches short shrift, and took up the matter with the appellant. Unfortunately, this resulted in hostile exchanges and a report by Lei to the police which in turn triggered the prosecutions in question. The personal data which was the subject of the charges was Mr Lei’s name and telephone number. 8. The defence case was that the appellant and Lei were friends, not merely alumni acquaintances, that at the Christmas party Lei had asked the appellant to introduce friends to him so that he, Lei, could expand the customer base for his photography business. As it happened, Ms Tam had asked the appellant whether he could introduce friends to her, so he provided her with the names and contact details of about ten persons, including Mr Lei, making clear to her that she was not to call them until their consent had been secured and, further, that she was not to engage in “hard selling” with them. Some of these persons agreed to be contacted, some did not. It was in this context that he had provided Ms Tam with Lei’s name and telephone number, but certainly not in order that she should use it for the purpose of direct marketing. He told Lei that he had given her his contact details and Lei indicated his consent. The appellant testified to this effect. 9. The trial took place at the Eastern Magistrates’ Court in December 2015 and on 30 December 2015 the magistrate[1] found the appellant guilty of the offence charged and imposed a fine of HK$5000. Ms Tam was acquitted. 10. At trial, the appellant was throughout unrepresented. He testified on his own behalf but called no witnesses. Ms Tam was represented by counsel. 11. At the conclusion of all the evidence, counsel for the prosecution made closing submissions in the course of which the appellant raised the issue whether the prosecutor was entitled to do so. Having heard submissions on that issue the magistrate ruled that he was entitled to do so. Those closing submissions covered submissions as to law, factual submissions in relation to Ms Tam and factual submissions in relation to the appellant. 12. The appellant appealed against his conviction. He was represented on appeal, and on 2 June 2017 his appeal was dismissed.[2] 13. There were several grounds of appeal: first, a suggested infringement of the appellant’s right to a fair trial by reason of the fact that the prosecutor had made submissions as to the evidence, including that of the appellant, even though the appellant had been unrepresented; further, that the magistrate had misinterpreted the definitions of “direct marketing”, “data” and “personal data”; and, finally, that there was a lurking doubt about the safety of the conviction given that the prosecution case as advanced in submissions to the magistrate was materially inconsistent with the evidence adduced and that the evidence of Lei was materially unreliable. All these grounds were rejected. The Questions 14. On 5 February 2018 this Court[3] granted leave to appeal in respect of the following questions of law as being questions of great and general importance: “In the trial of a criminal case in the magistracy, where an unrepresented defendant, apart from giving evidence himself, has not called any witnesses (hereinafter referred to as “the specific circumstances”): (a) Does the prosecution have the right to make a closing speech under section 19(2) of the Magistrates Ordinance (Cap 227)? (b) Is R v Au-yeung Tat-shing and another ([1988] 1 HKLR 1) a correct interpretation of section 19(2) of the Magistracy Ordinance (Cap 227)? (c) If the answer to both (a) and (b) are “yes”, then is the unrepresented defendant’s constitutional right to have a just and fair trial infringed by the prosecution’s right under section 19(2) of the Magistrates Ordinance to make a closing speech in “the specific circumstances”? (d) If the answer to (c) “yes”, is such infringement justified?” The central contention 15. Subject only to such impact as the decision in R v Au-yeung Tat-shing and another[4] may have had upon proceedings in the magistracy, the rule denying the prosecutor a right of reply in trials where the defendant appears unrepresented and gives no evidence save on his own behalf has consistently been applied in Hong Kong. It is a rule which has its roots in practice in criminal proceedings in England and Wales, the relevance of which, for present purposes, is necessary to explain at the outset. 16. It is argued by the respondent that the rule is applicable to criminal proceedings in the Court of First Instance and the District Court, but not to proceedings in the Magistrates Court and that the reason it does not there apply is to be found in the terms of s.19(2) of the Magistrates Ordinance. For that proposition, they rely on the decision of the Court of Appeal in R v Au-yeung Tat-shing as did the magistrate in this case and the judge upon appeal. In that case it was held that s.19(2) conferred on each party the right to make a closing speech and, further, it was a right not limited to cases of represented defendants or to cases where, if unrepresented, the defendant not only gives evidence himself but calls witnesses as to facts[5]. 17. In so far as is relevant to this appeal, section 19 of the Magistrates Ordinance provides as follows: “ (1) Where the defendant is present at the hearing, the substance of the complaint or the information (or the summons which has been issued … pursuant to such complaint or information) shall be read over to him, and explained if necessary, and he shall be asked whether he admits or denies the truth of the complaint or information. If the defendant admits the truth of the complaint or information, his admission shall be recorded as nearly as possible in the words used by him, and the magistrate shall convict him or make an order against him accordingly; but if he does not admit the truth of the complaint or information as aforesaid, then the magistrate shall proceed to hear upon oath the complainant or informant and such witnesses as may be produced in support of the complaint or information, and also to hear the defendant and such evidence as may be adduced in defence;and also to hear and examine such other witnesses as the complainant or informant may examine in rebuttal, if the defendant or his counsel has examined any witnesses or given any evidence other than as to the defendant’s general character. (2) The magistrate, having heard what each party has to say and the witnesses and evidence so adduced, shall consider the whole matter and determine the same, and shall convict or make an order against the defendant or dismiss the complaint or information, as the case may be.” 18. It is the phrase in subsection (2) “having heard what each party has to say” which is at the heart of this appeal, for the suggestion is that it confers upon each party the right of reply and, further, that the right thus conferred is unqualified. The relevance of historical context 19. Neither the phrase nor the subsection in which it appears speak for themselves. The subsection is meaningless on its own and in the context of the section as a whole, it is not possible to say that the phrase permits of only one interpretation. The term “right of reply” is not used; there is no express direction to hear the parties “after all the evidence has been adduced”; and it is arguable that the phrase in question refers, not to a right of reply – let alone to such a right in all circumstances - but to the earlier stages in the course of proceedings, referred to insubsection (1), when the complainant is heard on oath and the defendant is heard, together with such evidence as he may adduce. Furthermore, there are decisions of the courts of this jurisdiction which run contrary to the interpretation offered by the Court of Appeal in Au-yeung.[6] 20. Any valid exercise in interpretation must be contextual which means that the passage in issue is to be read not only in the context of the enactment as a whole but also in the context of existing common law, where relevant, of legislative history and of other statutes in pari materia.[7] This is especially so when the interpretation postulated by the decision in Au-yeung would, if correct, spell an exception to the general rule of practice. 21. The Hong Kong legislative context cannot, in turn, properly be understood without tracing the development of the relevant rule in England. That is because of the importation of English rules of practice and procedure by virtue of s.9(3) of the Criminal Procedure Ordinance, Cap 221[8] and, more particularly, because the effect of certain provisions in that Ordinance which refer expressly to the right of reply[9] can better be understood by reference to preceding legislation in England. 22. Accordingly, I turn first to the development of the exclusionary rule in England. In doing so, and thereafter in reviewing developments in Hong Kong, the intention is to illustrate the particular care which has been taken over time to create and maintain some procedural equality of arms for unrepresented defendants and, in the context of the relevant legislation, to recognise the specificity employed in delineating the right of the prosecutor to reply. The object of the illustration is to test whether the broad words of the statutory provision which is at the heart of this appeal can have been intended to effect a fundamental change to the rule in question. The practice in England 23. Until recently, the long established practice in England and Wales was that where a defendant was unrepresented and had either called no evidence at all or was himself the only witness, the prosecutor lost the right to make closing submissions.[10] In R v Mondon[11] the practice was described by Edmund Davies LJ as a “rule of practice”, well established[12]. In R v Paul[13] the Court of Appeal of England and Wales said that the practice was more than a mere convention. As we shall see, this has also been the practice in Hong Kong. 24. Before 1898, defendants were not competent witnesses in their own defence. If a defendant called no witnesses, the privilege of making a closing speech for the prosecution was highly restricted: only the Attorney General enjoyed the right of reply.[14] Some progress was made in 1836 when those indicted for felony were enabled to make their defence through counsel,[15] whereas it seems that previously a defendant could address a jury and cross-examine witnesses but the assistance of counsel was only permitted to argue points of law and to suggest questions for his client to ask in cross-examination.[16] The 1836 change did not result in any broadening of the prosecutor’s right of reply. 25. The limitation on the prosecutor’s right of reply was preserved in 1865 with the enactment of the Criminal Procedure Act.[17] Section 2 provided that where any defendant was defended by counsel, “but not otherwise” (emphasis added), counsel for the prosecution was accorded a right to address the jury a second time at the end of the prosecution case, if no evidence was to be adduced by the defence. But even the newly introduced right to sum up in the specified circumstances was one which the courts said should be used sparingly.[18] 26. A significant milestone was reached with the enactment of the Criminal Evidence Act 1898. Section 1 provided that every person charged with an offence was a competent witness for the defence and preserved a defendant’s right to make an unsworn statement. Section 3 of the Act stipulated that: “In cases where the right of reply depends upon the question whether evidence has been called for the defence, the fact that the person charged has been called as a witness shall not of itself confer on the prosecution the right of reply.” In other words, where the defendant was not represented by counsel the mere fact that he testified did not, by reason of the 1898 Act, confer on the prosecution the right of reply.[19] Conversely, the provision is not to be read as denying the prosecution a right of reply merely because the defendant has testified.[20] 27. Thereafter the rule of practice was regularly affirmed by high authority. In R v Baggott, Hewart LCJ endorsed the comment of Salter J in R v Harrison that in cases where an accused person gave evidence but was undefended, the rule that counsel for the Crown was not to address the jury a second time was one that “ought to be carefully observed.”[21] 28. The Criminal Justice Act 1948 provided by section 42(1) that notwithstanding the provisions of Denman’s Act (the 1865 Act) and the Act of 1898, the mere fact that the defence put in documents as evidence did not of itself confer upon the prosecutor the right of reply in trials upon indictment. 29. The Criminal Procedure (Right of Reply) Act 1964 provided that upon trials on indictment, the prosecutor was no longer to be accorded a right of reply by reason only that the Attorney General or Solicitor General appeared for the Crown at trial and, further, gave the defence the right to the last speech. 30. The practice was re-affirmed in R v Mondon,[22] in which Edmund Davies LJ said that: “The practice is now well established that in circumstances such as these, where an accused is professionally unrepresented and calls no witnesses, other than giving evidence for herself or himself, the Crown is not entitled to make a second speech. That has long been a rule of practice .”[23] 31. The practice thus far reviewed assumed one or more unrepresented defendants. It is common ground that where a defendant is represented and gives or calls evidence, the prosecutor has a right of reply, meaning a right to make a final speech. However, where a defendant is represented by counsel and does not give evidence and does not call witnesses, the prosecutor still has a right to make a closing speech but it is a right which should be exercised sparingly and, when exercised, the speech should be brief: Reg. v Bryant & Oxley.[24] Where there are several defendants who are represented by counsel and indicted jointly for the same offence and evidence given by one defendant affects the cases of the others, the prosecution is entitled to refer to the cases of all the defendants in his closing speech.[25] But where there are two defendants and only one is represented, the prosecutor is not precluded from making a closing speech but that speech should focus on the evidence which relates to the case of the defendant who is represented.[26] That said, “the procedure is not vitiated by the fact that the nature of the case means that the evidence in the case of the represented defendant also impinges on the unrepresented defendant and therefore leads inevitably to comment on it”: R v Tahir.[27] Although the present appeal concerns such a case, that is to say, a case of two defendants where one was represented, the other not, it is common ground that the closing speech on behalf of the prosecutor addressed the evidence adduced by the appellant as a separate entity and not as a by-product of comment on the evidence relating to Ms Tam. Hong Kong practice A. Legislation 32. Section 9(3) of the Criminal Procedure Ordinance, Cap 221, is the successor to section 10 of the Criminal Procedure Ordinance 1899, with changes of no consequence for present purposes. Section 9(3) provides as follows: “Subject to the provisions of this Ordinance and to such rules and orders and any other enactment (including any enactment relating to juries) applicable thereto, the practice and procedure in all criminal causes and matters (including trials for treason or misprision of treason) shall be, as nearly as possible, the same as the practice and procedure from time to time and for the time being in force for similar cases in England.” 33. There is nothing on the face of that provision or in the context in which it appears which limits its effect to criminal proceedings in the Court of First Instance or the District Court. 34. Section 56 of the Criminal Procedure Ordinance is headed “Right of Reply.” It provides that: “(1) The fact that the person charged has been called as a witness shall not of itself confer on the prosecution the right of reply. (2) Upon the trial of any person charged with an offence – (a) the prosecution shall not be entitled to the right of reply on the ground only that the Secretary for Justice or the Solicitor General appears for the HKSAR at the trial; and (b) the time at which the prosecution is entitled to exercise the right shall, notwithstanding any rule of law, be after the close of the evidence for the defence and before the closing speech (if any) by or on behalf of the person charged.” 35. Section 56(1) is a repetition of section 3 of the 1898 Act with the omission of the first phrase of that earlier provision,[28] an omission of no present consequence. 36. Section 58 of the Criminal Procedure Ordinance provides that: “Sections 54 to 57A shall apply to all criminal proceedings, notwithstanding any other provision in force at the time of theirenactment, and in sections 54 to 57A court includes the District Court and a magistrate.” 37. It follows that section 56 applies also to proceedings in the magistracy. 38. Section 79(1) of the District Court Ordinance, Cap 336, provides, in so far as is presently relevant, that: “Subject to the provisions of this Ordinance and as may be prescribed, the procedure and practice for the time being in force in the Court of First Instance in relation to criminal proceedings therein shall, so far as the same may be applicable, be followed as nearly as may be in criminal proceedings in the [District] Court; … .” B. Authorities 39. It is common ground that, save for such effect as the decision in Au-yeung has had in relation to magistracy proceedings, the rule excluding a right ofreply in the specific circumstances has been followed in Hong Kong. 40. The rule was not directly in issue in Man Ching-ip & Others v The Queen[29] since that was a case in which the defendants had been represented but had not testified, so the question was whether in those circumstances there was a right in the prosecutor to make a closing speech. However, in the course of his judgment, Sir Alan Huggins VP referred to the right of the prosecutor to make a closing speech “unless the defendant is unrepresented and calls no witnesses to the facts except himself.”[30] An argument was advanced that the right to make a speech was not a matter of practice and procedure, but that argument was rejected. In rejecting it, the Court said that: “From time to time it happens that a rule of practice becomes so well-established that it is regarded as a rule of law and will not be changed otherwise than by statute. In our view it is impossible to hold that the right to make a speech in the course of judicial proceedings is not a matter of practice and procedure.”[31] 41. Sir Alan Huggins commented that s.9(3) of the Criminal Procedure Ordinance might raise a difficulty where “an English statute which alters a matter of practice and procedure may not be applicable in Hong Kong and yet the practice and procedure in Hong Kong may prima facie be changed by it.” It was not necessary, for the purpose of that case, to decide the point but he suggested that such a difficulty could be avoided by limiting the application of s.9(3) “to non statutory rules of practice and procedure.”[32] He further suggested that consideration be given to the repeal of the provision. 42. The rule of practice with which this appeal is concerned was more recently affirmed in HKSAR v Tso Kin Shing[33] where the question was whether the rule, as preserved by s.56 of the Criminal Procedure Ordinance, was affected by the production by the defendant of documentary evidence in addition to his own testimony. In refusing leave to appeal against the Court of Appeal’s decision that mere production of such evidence made no difference to the rule, the Appeal Committee categorised the rule as “well-settled.”[34] See also HKSAR v Chan Hoi Wing.[35] 43. It has been held that the same principle applies to trials in the District Court. In HKSAR v Zhuo Yaying,[36] the Court of Appeal rejected the submission that the practice or rule applied only to trials by jury and not to trials before a judge sitting alone. The Court said that : “… The ability of a professionally trained lawyer to convince a Trial Judge and a jury is the same; he may enjoy an unfair advantage over an unrepresented defendant”,[37] the Court emphasising, however, that prosecuting counsel was nonetheless entitled in such circumstances to address the judge as to law. Whether a trial judge sitting alone is as susceptible to the influence of professional advocacy as a jury is perhaps open to debate but that the practice applies in the District Court is in any event clear by virtue of s.79 of the District Court Ordinance[38] and by the implied effect of s.56 of the Criminal Procedure Ordinance.[39] 44. As for the magistracy, we have been referred to Tseng Ping-yee v The Queen.[40] That was a decision of the Full Court on appeal from a conviction by a magistrate where a represented defendant did not testify but asked to make an unsworn statement. The magistrate held that in Hong Kong an accused person had no such right, a decision made in the face of a provision of the Criminal Evidence Ordinance 1906 which was in the same terms as section 1 of the Criminal Evidence Act 1898,[41] save that it omitted the proviso that: “Nothing in this Act shall affect … any right of the person charged to make a statement without being sworn.” The majority of the Court held that the right was firmly established in England at the time the 1898 Act was passed, that the practice applied in Hong Kong by virtue of a predecessor of what is now s.9(3) of the Criminal Procedure Ordinance,[42] and that the omission of the proviso did not, by implication, affect the right, not least because it was “ ‘a well-established principle of construction that a statute is not to be taken as effecting a fundamental alteration in the general law unless it uses words pointing unmistakably to that conclusion’ ”.[43] No-one there suggested that the rule of practice, applicable to trials on indictment, was not equally applicable to trials in the magistracy. Section 19 of the Magistrates Ordinance 45. It is against that background that the effect of s.19(2) of the Magistrates Ordinance falls to be considered, in particular the decision in Au-yeung Tat-shing that the sub-section confers upon the prosecution a right of reply even where the defendant appears unrepresented and gives no evidence save on his ownbehalf. 46. We have seen[44] that by subsection (1) the magistrate is enjoined, where a defendant does not admit the truth of the complaint or information, “to hear upon oath the complainant or informant and such witnesses as may be produced in support of the complaint or information” and also to “hear the defendant and such evidence as may be adduced in defence” and also, in certain prescribed circumstances, to “hear and examine… other witnesses … in rebuttal.” There then follows subsection (2) which enjoins the magistrate to consider and determine the whole matter “having heard what each party has to say and thewitnesses and evidence so adduced.” 47. The origin of section 19[45] is section 14 of the Summary Jurisdiction Act 1848. That is a lengthy section and it suffices for present purposes to extract the following: “… but if [the defendant] do not admit the Truth of such Information or Complaint as aforesaid, then the said Justice or Justices shall proceed to hear the Prosecutor or Complainant, and such Witnesses as he may examine and such other Evidence as he may adduce, in support of his Information or Complaint respectively, and also to hear the Defendant and such Witnesses as he may examine and such other Evidence as he may adduce in his Defence, and also to hear such Witnesses as the Prosecutor or Complainant may examine in reply, if such Defendant shall have examined any Witnesses or given any Evidence other than as to his the Defendant’s general Character; but the Prosecutor or Complainant shall not be entitled to make any Observations in reply upon the Evidence given by the Defendant, nor shall the Defendant be entitled to make any Observations in reply upon the Evidence given by the Prosecutor or Complainant in reply as aforesaid; and the said Justice or Justices, having heard what each Party shall have to say as aforesaid, and the Witnesses and Evidence so adduced, shall consider the whole Matter, and determine the same, and shall convict or make an Order upon the Defendant, or dismiss the Information or Complaint, as the Case may be; … .” (Emphasis added). 48. It will be observed that s.19 of the Magistrates Ordinance omits the emphasised phrase or its equivalent, commencing with the words “but the Prosecutor … shall not be entitled to make any Observations in reply… .” The respondent finds support in this omission as indicative that s.19 in its present form must, by contrast, be read as intending a right of reply. If the argument is to have any force it must go further and contend that it intends a right of reply in all circumstances. 49. Interpretation of s.19 has presented itself for decision on appeals from magistrates on two occasions prior to the decision in Au-yeung although on each occasion the question was whether the section conferred on a defendant a statutory right of address at the conclusion of the case. In both cases it was held that no such right was conferred by s.19 to address the court at that stage,[46] although in the earlier of those decisions, Wong Sang v The Queen, Scholes J. said that it was a matter of practice to permit such an address.[47] Au-yeung Tat-shing 50. The issue was more fully addressed in Au-yeung Tat-shing. In that case the defendants were unrepresented before the magistrate on a conspiracy charge. They gave evidence themselves but called no witnesses. At the close of the defence case, the prosecutor was permitted to make a closing speech. 51. The ground of appeal was framed as follows: “Is the right of the prosecution to make a closing speech, including comment on evidence by a defendant in circumstances where that defendant is unrepresented and calls no witnesses to the facts except himself, to be exercised sparingly and with becoming brevity or is there no right of address by the prosecution in these circumstances, having regard to the following decisions : R v Bryant [1978] 2 All E R 689, R v Tong Yuk-tim [1980] HKLR 140, R v Man Ching-ip [1980] HKLR 890.”[48] 52. The judgment of Barker JA is brief. It refers to the argument for the Crown that for the purpose of the issue at stake, there was a difference between on the one hand, trials before juries and the District Court and, on the other, a prosecution before a magistrate and that that difference was occasioned by the terms of s.19. 53. Barker JA said:[49] “ It seems to us that s.19(1) and (2) make a clear distinction between “evidence on oath” and what each party has to say (the emphasis is ours). Section 19(2) in our view gives each party the right to make a closing speech, and in no way limits this right to cases where a defendant is represented or, if unrepresented, himself gives evidence and calls witnesses as to the fact. “ This view finds some support from rule 13 of the Magistrates Courts Rules 1981 in England sub-rule 4 of which which reads: ‘ At the conclusion of the evidence for the defence the accused may address the court if he has not already done so’. “ And sub-rule 5 provides: ‘Either party may, with leave of the court, address in (sic) the court a second time, but when the court grants leave to one party it shall not refuse leave to the other.’ “ The cases mentioned in the reference to us, and cited before us, were all cases on indictment and in our view are irrelevant to trial in a Magistrates Court. Whatever be the position as to closing speeches so far as trials by jury or before District Judge are concerned (and we express no view upon this matter) we are satisfied that the prosecution does have the right to make such a speech in the case of an unrepresented defendant who alone gives evidence in a Magistrates Court.” 54. Li VP agreed, though expressly “with some hesitation”, saying that: “ If it is the intention of the legislature that prosecuting counsel should have a right to give a closing address in all circumstances I suggest that there should be clear provisions. It is hoped that the proper authority will look into the matter to clarify the position. … Before a District Judge prosecuting counsel has no right to a closing address against a defendant who is not legally represented and has not given evidence or called witnesses. If it is intended that the practice in Magistrates Court be different it is better to make express provisions rather than relying on general terms or to pray in aid the Magistrates Court Rules in England which have no application to Hong Kong.” Analysis 55. With respect, the hesitation expressed by Li VP was well-founded. 56. It seems plain that the legislature cannot have intended by the broad phraseology of section 19 to undo a rule of practice for long embedded in the criminal procedure of this jurisdiction, particularly when that practice was designed to assist defendants in criminal cases in the fair presentation of their defence. 57. “It is a well-established principle of construction that a statute is not to be taken as effecting a fundamental alteration in the general law unless it uses words that point unmistakably to that conclusion”: National Assistance Board v Wilkinson.[50] That principle has been referred to as “a principle of legal policy that law should be altered deliberately rather than casually, and that Parliament should not change either common law or statute law by a sidewind, but only by measured and considered provisions.”[51] If it be said that at issue here is a change of practice, more readily susceptible to amendment, the answer is, first, that the rule with which we are concerned has, as Sir Alan Huggins said in Man Ching-ip in relation to a similar rule, become “so well-established that it is regarded as a rule of law…”;[52] second, that historically the rule has been circumscribed by precisely worded legislation; and third, that since it is a rule designed for the protection of defendants in criminal cases, particular care should be taken in construing provisions said to alter the parameters of that protection. Accordingly, where it is suggested that the rule has been abolished by legislation, one should be slow to interpret the type of imprecise phraseology upon which the decision in Au-yeung turned as constituting a fundamental change to that protection. 58. In examining the history of the rule, we noted a series of hard-edged and unambiguous statutory provisions which precisely circumscribed the prosecutor’s right of reply. That examination also illustrated the clarity with which the rules relating to that right have from time to time been expressed in judgments in this jurisdiction and in England and Wales. 59. The contrast between that history of specificity and the terminology in section 19 upon which the decision in Au-yeung rested, could hardly be more stark. So, for example, section 2 of Denman’s Act refers in terms to “the Right of Reply”, as does section 3 of the 1898 Act, as does s.42 of the 1948 Act, the very title of the 1964 Act includes that term and “Right of Reply” is the heading of s.56 of the Criminal Procedure Ordinance. Yet one searches s.19 of the Magistrates Ordinance in vain for that term and one observes that the only reference in the 1848 Act to a right of reply, does not appear in s.19. Against that backdrop, it does not seem to me possible rationally to conclude that s.19 intended to confer on anyone a statutory right of reply. 60. If the construction of s.19 by Barker JA be correct, the logical consequence would be far reaching. It would mean that in the magistrates court, the prosecutor enjoyed a right of reply not available in the higher courts, despite the probability that a greater proportion of defendants are unrepresented at the magistrates court level. It would, in summary proceedings at least, render otiose section 56(1) of the Criminal Procedure Ordinance, a provision which is not even mentioned in the judgment. I am satisfied that something altogether more specific and tightly worded would be required to achieve that effect. 61. It is also difficult to understand the support which Barker JA drew from the Magistrates Courts Rules 1981. We have been shown the whole of rule 13 and its only relevance, as I see it, is that it sits in marked contrast to the broad terminology of s.19 in that rule 13 stated the order of evidence and speeches, step by step; in any event, the right of reply conferred on the prosecution by that provision was only one which could be exercised with the leave of the court. In deciding whether to grant leave, the court would no doubt have had regard to well established rules of practice.[53] 62. In so far as the respondent seeks to draw comfort from the omission from section 19 of the prohibition on rights of reply found in section 14 of the 1848 Act, that comfort is, with respect, misplaced. The purpose of that prohibition is suggested by Mr Archbold in 1851 to the effect that “if [these rights of reply] were allowed to be exercised, a single case might often last a day; and in large towns, such as Manchester, Liverpool, Hull, &c. and in the police offices of the metropolis, it would be impossible to get through the business. All that is really required is, a statement of the case and defence; all other speeches by or for either party, may very well be dispensed with, without any hazard of injustice being done by reason of the omission.”[54] The 1848 exclusion of the right of reply could only have been an exclusion of such right as already existed but, more to the point, it is a bridge too far to conclude that by the omission of that prohibition, the Hong Kong legislature intended to move from prohibiting a right of reply to all parties in any circumstances to the opposite extreme of conferring such a right upon all parties regardless of the circumstances. 63. For these reasons, I am satisfied that section 19(2) of the Magistrates Ordinance does not address rights of reply and does not confer a right of reply upon the prosecution in the case of an unrepresented defendant who, apart from giving evidence himself, has not called any witnesses. In my judgment, Au-yeung Tat-shing was wrongly decided and should not be followed. The answer to Question (a) at paragraph 14 above is therefore “no” and the answer to Question (b) is also “no”. It follows that it is not necessary to answer questions (c) and (d)in respect of which leave has been granted. 64. Whilst it may, strictly speaking, be unnecessary to decide what is meant by the phrase “having heard what each party has to say” in s.19(2) since it suffices for present purposes to conclude that itdoes not mean what the Court in Au-yeung Tat-shing held it to mean, it seems safe to conclude that the phrase relates back to the procedure outlined in subsection (1). Subsection (1) assumes that the magistrate hears the complainant on oath and then witnesses in support and, next, hears the defendant and then evidence in support. Thus when subsection (2) refers to the magistrate “having heard what each party has to say”, that is most likely a reference to having heard the complainant on oath and having heard the defendant as presaged in subsection (1). The fact that it does not refer to having heard the defendant “on oath” might be explained by the fact that until 1972,[55] the defendant enjoyed the right to make an unsworn statement. Recent developments 65. Our attention has been drawn to recent decisions by the Court of Appeal in England and Wales which evidence an inroad upon the rule in that jurisdiction. They are Reg. v Stovell [56] and R v Cojan.[57] Both concerned trials in the Crown Court. In the former, counsel and solicitors were permitted to withdraw from representing the defendant at an advanced stage of the proceedings because of professional embarrassment and in the latter the defendant withdrew his instructions from counsel and solicitors a few days before the summing up to a jury. In Stovell, the defendant then testified and prosecuting counsel made what was described as “an extremely long speech”; in Cojan, the defendant testified and did not make a closing speech, but prosecuting counsel did. 66. Both decisions followed significant procedural and evidential changes in England and Wales, for example, rules as to inferences from silence, the need to lodge defence statements, and the admissibility of evidence of bad character, giving rise to a number of considerations with which decisions such as Mondon were not concerned. 67. In Stovell, the Court of Appeal said that: “ … in the light of the procedural and evidential changes which have taken place since the decision of this Court in Mondon, we are by no means satisfied that in all cases, particularly when a defendant has been represented substantially throughout the trial and there are issues arising during the defence upon which the jury would be assisted by comment from prosecuting counsel, it is necessarily inappropriate for prosecuting counsel to make a second speech. But it is unnecessary in the present case to reach a conclusion with regard to that matter, because, for the reasons which we have already given, even the old authorities would not, as it seems to us, lead to the quashing of this conviction.”[58] 68. The court in Cojan shared those doubts preferring “to approach the matter as an issue of balance and fairness.”[59] 69. In each case, the Court was influenced not only by changes to rules of evidence in criminal cases but also by a concern that a defendant should not take unfair advantage of the rule by dispensing with, or effecting the withdrawal of, representation. 70. The current position in England and Wales is now reflected in the Criminal Procedure Rules. The position in the Crown Court is that the prosecutor is entitled to make final representations where the defendant is represented, or where he has called at least one witness other than himself about the facts of the case or where “the court so permits.”[60] The position in the magistrates court appears to be different. There, the prosecutor is entitled to make final representations in support of the prosecution case where the defendant is represented or “whether represented or not, the defendant has introduced evidence other than his or her own”,[61] but there is absent the discretionary provision which is available in Crown Court proceedings. 71. It is not contended that s.9(3) of the Criminal Procedure Ordinance compels our courts to follow suit and in this regard the suggestion made by Sir Alan Huggins[62] that s.9(3) cannot have been intended to import changes of practice imposed by statute is one which I respectfully endorse. He suggested, however, that the time may well have come “when consideration should be given to the repeal of s.9(3) … , the courts in Hong Kong being left to adopt such practice and procedure as may seem appropriate in the few cases where express provision has not been made by ordinance or rules of court.” That suggestion seems to have fallen on deaf ears but is one which, in my opinion, merits consideration. 72. It is not difficult to imagine trials, whether in the Court of First Instance, District Court or Magistrates Court of sufficient complexity - by reason of the facts or the number of defendants - as to render the assistance of prosecuting counsel desirable. This is, of course, to raise a fundamental question whether to maintain the rule of practice in its full breadth in all circumstances. Such a question could only conscientiously be addressed by a mature consideration of the justification, if any, for and the likely effect of such a change in Hong Kong. This is not the case for that exercise. Disposal 73. The appellant’s position is that in consequence of the material irregularity in the Magistrates Court proceedings, he was denied a fair trial. The unfairness is one of substance and not theoretical in this particular case because, so the argument goes, there was a real danger that the error influenced the decision to convict given that prosecuting counsel was experienced counsel, that his closing speech was directed in substantial part at the credibility of the witnesses and that the most that could reasonably be said in favour of the conviction is that but for the irregularity the magistrate might have entered the same verdict, a conclusion which dictates that the conviction must be quashed. 74. There is no question but that a breach of the rule of practice with which this appeal is concerned constitutes a material irregularity. Such an irregularity might require the quashing of a conviction but not necessarily so.[63] In R v Pink,[64] the proviso was applied; in R v Mondon, it was not.[65] 75. In HKSAR v Zhuo Yaying,[66] the Court of Appeal was of the opinion that the irregularity was a serious one given that there were central issues of fact in dispute and, accordingly, quashed the conviction. That was also the result in HKSAR v Chan Hoi Wing,[67] with the court refusing to apply the proviso, not surprisingly given the particularly trenchant attack in front of the jury by prosecuting counsel in his closing speech. 76. Section 17(2) of the Court of Final Appeal Ordinance provides that for the purpose of disposing of an appeal, the Court may exercise any powers of the court from which the appeal lies. This appeal lies from the Court of First Instance in the exercise of its appellate jurisdiction under section 113 of the Magistrates Ordinance and in disposing of an appeal the judge is empowered to confirm, reverse or vary the decision or remit it, or make such other order as he thinks just.[68] 77. In the present case what is at issue is procedural fairness. An appeal to the Court of First Instance from a conviction in the magistracy is by way of rehearing[69] and upon an issue whether an appellant has been deprived of a fair hearing, the principle encapsulated in Lam Siu Po v Commissioner of Police is that: “It does not require every element of the protections conferred to be present at every stage of the determination of a person’s rights and obligations, but only that such protections should be effective when the determination is viewed as an entire process, including as part of that process such appeals or judicial reviews as may be available.”[70] 78. Whether or not the magistrate may, without the benefit of countervailing professional advocacy, have been influenced in his decision by the advocacy of prosecuting counsel, it is in the light of the Lam Siu Po principle, highly relevant that upon appeal to the Court of First Instance, the appellant was represented by counsel. That is especially relevant in cases where the appellate judge, on an appeal which is by way of rehearing, is invited to conclude that the evidence against the appellant was such as to render the conviction unsafe. That was a specific ground of appeal in this case and the judge expressly noted that it was incumbent upon him to consider, notwithstanding the submissions made by the prosecutor to the magistrate, whether the findings of fact by the magistrate were correct.[71] We do not have the benefit of the written submissions presented by counsel for the appellant to the Judge but it is clear that they included an attack on the reliability of the complainant’s evidence.[72] A study of the judgment reveals a survey of the evidence, or at least some of it, including answers which the appellant gave in records of interview which tended to support the prosecution case,[73] and a Facebook entry at the material time which revealed a telling reaction by the appellant to Lei’s initial anger at the appellant’s conduct.[74] We understand from Mr Duncan SC, for the appellant, that the judge did not have a transcript of the evidence in the court below but the provision of a transcript, if one was required to support the attack on the reliability of the evidence, must have been within the power of the appellant’s representatives to secure and in any event, there was clearly enough before the judge for this attack to be mounted and for the judge to answer it. 79. Mr Duncan urges upon us the course taken by this Court in Ching Kwok Yin v HKSAR.[75] In that case the magistrates court trial was infected by a serious irregularity in the failure of the prosecution to disclose the criminal record of the complainant. The judge on appeal held that the error did not render the conviction unsafe. This Court[76] disagreed. I do not think that that decision assists this appellant. In that case, the judge on appeal concentrated on the effect of the irregularity on the magistrate; and it was self-evident that the reliability of the complainant’s testimony was affected by the fact of previous convictions including one with an element of dishonesty. In the present case, the irregularity was procedural rather than one affecting the creditworthiness of a witness and, in any event, the judge, by reference to indicia of guilt which had nothing to do with impressions of creditworthiness, was able to form his own view on the facts. 80. In my judgment, therefore, whilst the appellant has succeeded in demonstrating an error by the magistrate and by the judge in holding that the prosecutor enjoyed a right of reply, he has not succeeded in persuading us that the procedural error in the magistrates court infected the fairness of the process as a whole. For that reason, I would dismiss the appeal. Lord Walker of Gestingthorpe NPJ: 81. I agree with the judgment of Mr Justice Stock NPJ. Chief Justice Ma: 82. For the above reasons, the appeal is dismissed. (Frank Stock)				Non-Permanent Judge (Lord Walker of Gestingthorpe)				Non-Permanent Judge Mr Peter Duncan SC and Mr Tien Kei-rui, instructed by John C H Suen & Co., assigned by the Director of Legal Aid, for the Appellant Ms Vinci Lam SADPP and Mr Ivan Cheung SPP (Ag.), of the Department of Justice, for the Respondent [1] Mr Lee Siu-ho, ESS 24178/2015 [2] Deputy High Court Judge Johnny Chan, HCMA 49/2016 [3] Ribeiro, Tang and Fok PJJ, FAMC 19/ 2017 [4] [1988] 1 HKLR 1 [5] Ibid at 3 [6] See para 50 below [7] Bennion on Statutory Interpretation 6th ed., p 540 [8] Para 32 below [9] in particular s.56 Criminal Procedure Ordinance, at para 34 below [10] That practice has now been altered in the Crown Court in England and Wales by reason of Criminal Procedure Rules 25.9(2)(j) (see Blackstone’s Criminal Practice (2018) D18.17) whereby discretion is conferred on a court to permit such a step. However, the old rule seems still to prevail for trials in the Magistrates Court: Criminal Procedure Rules 24.3(3)(h). See para 70 below. [11] (1968) 52 Cr App R 695 [12] Ibid at 698 [13] [2013] 2 Cr App R 26 [14] Rex v The Earl of Abingdon (1794) Peake 310; 170 ER 167 [15] Trials for Felony Act 1836 (6&7 Will 4 c 114). And in “all Cases of summary Conviction” defendants were to be “admitted to make their full Answer and Defence, and to have all Witnesses examined and cross - examined by Counsel or Attorney.” [16] Rex v Parkins (1824) 1 C & P 548; 171 ER 1311 [17] Known as Denman’s Act [18] Reg. v Holchester (1866) 10 Cox 226. See also R v Hoggard [1995] Crim LR 747 which refers to the right conferred by s.2 of the 1865 Act to make a closing speech and in particular to the fact that "The practice [has] … grown up of the defence seeking to rely upon self-serving statements made in interview or on suggestions or allegations in cross-examination of prosecution witnesses. When there is such reliance or matters are put to witnesses which are in effect a defence unsupported by other evidence, it will generally be in order for the Crown to make a closing speech in order to deal with them.” [19] R v Thomas (1924) 17 Cr App R 34 [20] Tong Yuk-tim v The Queen [1980] HKLR 140, 143. It is to be noted that the judgment in Tong Yuk-tim contains an error at p 144 where it cites Reg. v Bryant and Oxley [1979] 1 QB 108 for the proposition that "when an unrepresented defendant gives evidence but calls no evidence, save as to character, the right of the Crown to address the jury should be exercised sparingly and with becoming brevity", since the defendants in Bryant and Oxley were represented by counsel; an error noted in HKSAR v Tso Kin Shing [2014] 3 HKLRD 736 at [5.17]. [21]R v Baggott (1928) 20 Cr App R 92. R v Harrison (1924) 17 Cr App R 156 [22] (1968) 52 Cr App R 695 [23] Ibid at 698 [24] [1979] 1 QB 108 at 117 [25] Ibid at 118. See also Reg. v Trevelli (1882) 15 Cox C. C. 289, 290, cited in Bryant at 118 A-D [26] It is not possible to say how these rules might be affected by recent rules in respect of proceedings in the Crown Court: see para 70 below. [27] [1997] Crim L R 837 [28] i.e: “In cases where the right of reply depends upon the question whether evidence has been called for the defence.. .” See para 26 above. [29] [1980] HKLR 890 [30] Ibid at 894 [31] Ibid at 895 [32] Ibid at 895 [33] [2014] 3 HKLRD 736 [34] Ma CJ, Tang and Fok PJJ FAMC No. 20 of 2014, 6 August 2014 at [14] [35] [2015] 1 HKLRD 643 [36] [2016] 3 HKLRD 925 [37] Ibid at [44] [38] Para 38 above [39] Para 34 above [40] [1969] HKLR 304 [41] Para 26 above [42] Section 10 of the Criminal Procedure Ordinance 1899 [43] Tseng Ping-yee v The Queen at 328, citing Devlin J (as he then was) in National Assistance Board v Wilkinson (1952) 2 Q.B. 648; see para 57 below [44] Para 17 above [45] The predecessor to section 19 in its present form was section 13 of the Magistrates Ordinance 1932. The wording of subsection (1) was slightly different from that of section 19 but it is not suggested that anything turns on the difference. [46] Wong Sang v The Queen [1959] HKLR 417; and Lo Kee v The Queen [1966] HKLR 601. Each was a decision of a single judge of the High Court on appeal from a magistrate’s court. [47] At 420 [48] The factual context and effect of Reg. v Bryant & Oxley is referred to at para 31 above. [49] [1988] 1 HKLR 1 at 3 [50] [1952] 2 QB 648, per Devlin J (as he then was) at 661 [51] Bennion on Statutory Interpretation 6th ed., Section 269 at p 741 [52] Para 40 above [53] The current position in the magistrates courts in England and Wales is governed by Criminal Procedure Rule 24.3 (3)(h). See para 70 below. [54] “Jervis’s Acts … Relating to the Duties of Justices of the Peace.” 3d ed., 1851 at p 139 [55] See s.54(2) Criminal Procedure Ordinance [56] [2006] EWCA Crim 27 [57] [2015] 2 Cr App R 20 [58] At [36]. In Reg. v Rabani [2008] EWCA Crim 2030, the Court of Appeal categorised the passage cited from Stovell as obiter, but noted that counsel for the appellant in Rabani conceded that in certain circumstances the prosecution might be entitled to make a closing speech even where a defendant was unrepresented. But, for the purposes of that particular appeal, the Court dealt with the issue on the basis that the prosecution had no right to a final speech. [59] At 297 [60] Criminal Procedure Rules 25.9(2)(j). See Blackstone’s Criminal Practice (2018) D 18.17. [61] Criminal Procedure Rules 24.3(3)(h) [62] Man Ching-ip & Others v The Queen [1980] HKLR 890 at 895; para 40 above. [63] R v Harrison (1924) 17 Cr App R 156； Reg. v Pink [1971] 1 QB 508 [64] [1971] 1 QB 508 [65] (1968) 52 Cr App R 695 at 699 [66] [2016] 3 HKLRD 925 at [46] [67] [2015] 1 HKLRD 643 at [21] and [29] [68] Magistrates Ordinance, s.119(1)(d). [69] Chou Shih Bin v HKSAR (2005) 8 HKCFAR 70 [70] (2009) 12 HKCFAR 237 at [109] [71] Judgment paras 94-95 [72] Ibid para 159 [73] Ibid para 127 [74] Ibid para 134 [75] (2000) 3 HKCFAR 387 [76] Bokhary, Chan and Ribeiro PJJ, Sir Alan Huggins and Lord Millett NPJJ
Chief Justice Cheung: 1. I agree with the judgment of Mr Justice Lam PJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Lam PJ. Mr Justice Fok PJ: 3. I agree with the judgment of Mr Justice Lam PJ. Mr Justice Lam PJ: 4. In this appeal, this Court has to examine whether the restrictions set by a magistrate on cross-examination as to credit were properly imposed in light of the principles set out in HKSAR v Wong Sau Ming[1] and HKSAR v Kong Wai Lun[2]. The appellant says she had suffered a substantial and grave injustice because cross-examination was not allowed on the details of some allegations which did not form part of the prosecution case. The Appeal Committee exceptionally granted leave to appeal as the question raised by the appellant on the distinction between cross-examination on credit and on the general issue is of importance and the relevant argument was apparently less developed, and therefore not fully addressed, in the courts below. A. Background 5. The appellant was convicted by a magistrate, Mr Colin Wong, of two charges of aiding, abetting, counselling, or procuring the breach of conditions of stay by a foreign domestic helper employed by her. She was sentenced to 4 months’ imprisonment. In his Statement of Findings, the magistrate accepted the evidence of the foreign domestic helper, Ms Kamalawathi, who was the principal witness for the prosecution at the trial. 6. The helper was employed by the appellant under two consecutive contracts: the first ran from November 2012 to November 2014; the second ran from December 2014 to November 2016. Under the conditions of stay imposed by the Director of Immigration, the helper could only perform domestic duties for the appellant at a specified address in The Sea Ranch, Lantau Island. The address specified under the first contract was different from that specified under the second contract. The employment under the second contract was terminated on 8 November 2015. 7. The helper had also brought a civil claim against the appellant for compensation allegedly due in respect of work done at places other than those specified addresses. At the time of the criminal trial, the civil proceedings were still pending. 8. The prosecution case was that the appellant had instructed the helper to work at places other than the specified addresses in breach of her visa conditions. Two charges were brought against her in October 2017: one for instructions given under the first contract and another for instructions given under the second contract. Constrained by the limitation period for prosecution[3], in respect of the employment under the first contract, the appellant was only charged for the instructions given by her during the last two months (viz October and November 2014). 9. The appellant did not testify. Nor did she adduce any factual evidence at the trial. Her case, as put by her counsel, was that she did not give such instructions. Her only witness was a medical expert testifying on the onset and the impact of the mental illness of the helper who had previously suffered from schizophrenia and had recovered by the time she testified. The magistrate preferred the evidence of the medical expert called by the prosecution. 10. Under the first charge, the other places at which the helper was instructed by the appellant to work were identified in the Statement of Findings and the judgment below as House No. 11, House No. 13 and House No. 10 at The Sea Ranch on Lantau Island (“the Other Sea Ranch Houses”). The helper was instructed to clean these houses and to remove debris in House 11 which was then under renovation[4]. 11. In addition, as emerged from the evidence of the helper given under cross-examination, she was also instructed by the appellant to carry out work at a restaurant in Cheung Chau and an office in Fo Tan, Shatin (“the Non-Domestic Work”). In her examination-in-chief the helper did not refer to her working in these places. As the cross-examination progressed, it became clear that the Non-Domestic Work was not undertaken during the periods specified in the charges[5]. B. The restrictions imposed by the magistrate B1. Trial counsel’s stated purposes of the cross-examination 12. The appellant was represented by two counsel at the trial. The first trial counsel Mr Kong’s stated purpose of cross-examining on the Non-Domestic Work was to explore the credibility of the witness by reference to her civil claims (in terms of the hours of work she had undertaken each day) and the reliability of her memory in conjunction with her mental illness[6]. He also sought to cross-examine on assignments which he mistakenly believed to be correlated with work undertaken at the Other Sea Ranch Houses[7]. 13. The magistrate gave Mr Kong some leeway in such cross-examination but ruled that it was not necessary to go into the details. After further questioning of the witness, Mr Kong realized that the Non-Domestic Work was undertaken before the first charge period and there was no temporal correlation with the subject matter of the charge. Counsel then decided to move on to other topics in his cross-examination[8]. 14. Later, the second trial counsel, Mr Tse, sought to cross-examine on the Non-Domestic Work to show that the allegations were fabricated. But he did not explain to the magistrate that he had a different foundation for challenging the credit of the helper. His only ground for re-visiting the topic was that the helper’s complaint to the Immigration officer should be read as a whole. The magistrate reiterated his earlier ruling[9]. 15. The ruling was not an absolute bar and the magistrate subsequently allowed Mr Tse to ask questions concerning the work at the restaurant which purportedly overlapped with the work at the renovated house[10]. B2. The magistrate’s reasons for the restrictions 16. The magistrate disapproved the proposed testing of the witness’s memory by reference to collateral matters and he did not see any need to refer to the details of the Non-Domestic Work in order to serve counsel’s stated purposes. He therefore permitted cross-examination on the frequency and time of such work without going into details[11]. Based on counsel’s submissions, the magistrate regarded such cross-examination as solely relevant to credit and made such ruling on two grounds[12]: that such work was undertaken outside the charge periods; and that such allegations would have to be determined in the pending civil proceedings and were not properly within the ambit of the criminal case being tried. B3. The appeal to the Court of First Instance and the judge’s view on the restrictions 17. The appellant appealed against the convictions and the appeal was dismissed by D’Almada Remedios J. The arguments advanced before Her Ladyship were not as focused as those advanced before us. Leading counsel then appearing for the appellant (not Mr Corlett) submitted that the magistrate erred in not allowing questions based on the helper’s previous statements. The learned judge rejected that challenge and Mr Corlett did not rely thereon. 18. After carefully analysing the transcript in detail the learned judge concluded that the magistrate had given proper leeway to the defence to cross-examine on collateral matters. Regarding the Non-Domestic Work, she was of the view that he had only disallowed questions purely for testing the helper’s memory on general matters as opposed to specific inconsistencies[13]. 19. In respect of the pre-emption of Mr Tse’s cross-examination, the learned judge concluded that the magistrate had only required the questions to be relevant to the core issues of the charges and the credibility of the helper[14]. She also held that the magistrate had been entitled to restrict cross-examination so that it would not serve as a memory-testing exercise on matters irrelevant to the charges[15]. She concluded that there had not been any unfairness to the appellant[16]. B4. Issues in the appeal 20. The main issues in the appeal are as follows: (a) Whether the magistrate unduly restricted the defence in cross-examination on the Non-Domestic Work; (b) Whether the appellant suffered any injustice as a result of such restrictions. 21. Before addressing these issues, it is necessary to discuss the relevant legal principles in light of Mr Corlett’s submission on the lack of significance of the distinction between cross-examination on a primary issue and on credit in cases where the witness’s credibility is a core issue. C. The legal principles on cross-examination as to credit C1. The principles as discussed in Wong Sau Ming and Kong Wai Lun 22. A useful starting point is the judgment of Li CJ in HKSAR v Wong Sau Ming, supra at [23] to [26]: “23. In this context, the relevant general principles are as follows. First, where the veracity of the witness is challenged on cross-examination as to credit, subject to the judge’s discretion to disallow improper questions, cross-examination about discreditable acts is widely permitted. See Cross and Tapper on Evidence (9th ed., 1999) p.306. Its purpose is of course to show that the witness ought not to be believed on oath. 24. Secondly, the cardinal test of relevance in the law of evidence applies to such cross-examination. The subject matter of the cross-examination must be relevant to the witness’s veracity. Relevance is a matter of degree. 25. Thirdly, in applying the test of relevance, the court should in its discretion usually permit questions in cross-examination as to credit if the truth of the imputation conveyed would materially affect the court’s opinion as to the witness’s veracity on the subject matter of his testimony. Conversely, questions in cross-examination as to credit are usually not permissible if the truth of the imputation conveyed would not have any material impact on such opinion. The imputation may relate to matters which are so remote in time or are of such a kind that the truth of the imputation would not have any material impact on the court's assessment of the witness's veracity. cf Sankey LJ in Hobbs v CT Tinling & Co Ltd [1929] 2 KB 1 at p.51. The matters about which the witness is questioned in cross-examination as to credit must relate to his likely standing after cross-examination with the tribunal in question. See R v Sweet-Escott (1971) 55 Cr App R 316 at p.320. 26. Fourthly, as a general rule, answers to questions in cross-examination as to credit on any ground including veracity are final and evidence is not admissible to contradict them. See Harris v Tippett (1811) 2 Camp 637 at p.638; 170 ER 1277. This can conveniently be referred to as ‘the finality rule’. The rule is conducive to a fair trial. Its rationale is that, as a matter of commonsense, a criminal trial should be kept within proper limits. The court should focus on the issues in the case. Its attention should not be diverted to collateral issues such as credit, the exploration of which may unnecessarily blur or confuse the real issues in a cloud of detail. Although the rule has sometimes been criticized, it is well-established and necessary. However, the distinction between questions going to the issues in the case and those going to credit is sometimes difficult to draw and in some cases, can be a rather thin one.” 23. Wong Sau Ming was a drugs case and the issue of principle arose from the cross-examination of the police officer who found the drugs on the defendant. There was a dispute on admissibility of evidence about the acquittal of a different defendant in an earlier drugs case in which the same officer had been involved and which had occurred within a few weeks of the case at hand. In such a context, the Court held that two threshold requirements had to be met before cross-examination on credit by reference to such an acquittal would be permitted: (a) The acquittal involved a finding by the court that the police officer had lied or that the court had disbelieved him; and (b) The circumstances of the earlier case were of such a kind when compared to those in the case before the court that the previous finding was not so remote in time or nature, that the finding of lying in the earlier case would materially affect the assessment of the witness’s veracity in the case at hand[17]. 24. In Wong Sau Ming, though the magistrate in the earlier case had given the benefit of doubt to the defendant, there was no finding that the police officer had lied or that he had been disbelieved. Thus, the first threshold requirement was not satisfied and the Court held that cross-examination by reference to the acquittal should not be allowed[18]. The significance of the first threshold requirement was explained at [30]: “… In acquitting, the court may not have found that the witness had lied. Unless in acquitting, the court had found that the witness had lied (or, which amounts to the same thing, the court had disbelieved the witness), the acquittal could not properly be regarded as relevant to the veracity of the witness in the instant case. It would not have a sufficiently material impact on the court’s assessment of his veracity.” 25. The Court further observed that had the first requirement been fulfilled, the second threshold requirement could have been met in that particular case[19]. But cross-examination by reference to an acquittal would only be permitted when both threshold requirements were met. 26. Subsequently, in HKSAR v Kong Wai Lun, another drugs case, the defendant had given a statement to a police officer the admissibility of which was challenged on the ground of police violence against him. It was alleged on appeal that the trial judge had wrongly refused to permit the defence to adduce evidence in the voir dire from another person allegedly assaulted by the same team of police officers several months after the arrest of the defendant on an occasion unconnected with the offence with which the latter was charged. The police officer had been cross-examined and he denied the allegation of police impropriety on that occasion. Not surprisingly, the appeal was dismissed. 27. Lord Phillips of Worth Matravers NPJ identified two applicable common law principles at [27]: “Two basic common law principles as to the admission of evidence are in play on this appeal. The first is that no evidence is admissible unless it is relevant to an issue in the case. The second is that evidence should not be admitted if its probative weight is insufficient to justify the complexity that it will add to the trial. Whether in a criminal or a civil trial the judge should be astute to prevent the primary issues becoming obfuscated as the result of the admission of evidence of insufficient significance to justify the additional burden that it will impose on the hearing …” 28. In the application of these basic principles, a distinction is drawn between primary issues and collateral issues, see [28]: “In applying these principles it is helpful to distinguish between primary issues and collateral issues. Whether an event upon which the prosecution relies in fact occurred is a primary issue. Evidence that such an event did or did not occur is primary evidence. A collateral issue does not bear directly on whether a primary fact in issue occurred. It bears on the reliability of the primary evidence. The second principle normally applies only in relation to evidence that goes to a collateral issue.” 29. After referring to Wong Sau Ming, His Lordship further summarized at [34] the position governing cross-examination on credit: “… Cross-examination as to credit should be permitted in relation to any matter that, if proved, will diminish a witness’s credibility. This may be a failure to tell the truth on an earlier occasion, or some quite different type of misconduct, providing only that it bears logically on the weight that should be accorded to the witness’s word. Where a prosecution witness denies, under cross-examination as to credit, that he has been guilty of misconduct of a kind that would damage his credibility, evidence that unequivocally rebuts his denial, such as a finding by a court or tribunal to this effect, should normally be admitted for that purpose. Where, however, the truth of the allegation of misconduct made against the witness cannot be determined without what is, in effect, a separate trial relating to that issue, the finality rule will normally preclude the calling of evidence to challenge his denial.” 30. On the facts of Kong Wai Lun, Lord Phillips agreed with the Court of Appeal that the evidence of purported police violence on the other occasion had little bearing on the credibility of the police officers and the finality rule barred the admission of the evidence the defence proposed to call at the voir dire[20]. 31. At [43], Lord Phillips reiterated that the procedure laid down in Wong Sau Ming should be followed when counsel applies to adduce evidence of events unconnected with those giving rise to the prosecution, including evidence relevant to credit only. The relevant witness statement should be placed before the trial judge to enable him to assess the probative value of the proposed evidence. His Lordship stressed: “… All relevant material should be placed before the judge. Only in this way will the judge be in a position to make a properly informed decision as to whether the evidence should be admitted …” C2. The discretion to permit cross-examination on credit based on previous misconduct 32. As stated in these authorities, the rationale for permitting cross-examination on credit stems from the materiality of a line of questioning on the assessment of a witness’s veracity. Since the ultimate benchmark is relevance which is a matter of degree, it would be unwise and indeed impossible to lay down hard and fast rules. But it is useful to highlight the requirement of laying a proper foundation for casting an imputation of misconduct against a witness. 33. Recently, the Judicial Committee of the Privy Council examined the common law principles governing cross-examination of a witness as to credit in Clarke v The State[21]. Lord Lloyd-Jones succinctly summed up the position as follows at [40]: “At common law, therefore, the judge had a discretion to permit cross- examination as to credit. In exercising that discretion he was required to have regard to whether such questions would seriously affect the jury’s view of the credibility of the witness, to whether the misconduct relied upon had a solid foundation, to the fairness to the witness of permitting such cross-examination and to whether such cross-examination would be a distraction from the real issues in the case. An appellate court may not interfere with the exercise of such a discretion unless it is clearly wrong or wrong in principle.” 34. The need for having a solid foundation for an imputation of misconduct was explained in Persad and Jairam v The State[22] which was cited at [39] of Clarke: “Behind all this is the necessity of securing a fair trial for the accused person consistently with fairness to a witness. It is not fair for a witness to be assailed with unproven allegations of misconduct or with mere suspicions of past malpractice. Nor is it acceptable for the time of the court to be taken up with matters extrinsic to the case in hand nor for the jury to be distracted from the issue before them by inquiries into uncertain and unresolved issues about the earlier conduct of a witness. The investigation of a witness’s reliability in the course of cross-examination must be kept within bounds. It cannot be allowed to degenerate into a ranging and speculative inquiry into any or all of the occasions on which the witness has given evidence in the past.” 35. The threshold requirements set by Li CJ in Wong Sau Ming for cross-examination on credit based on previous acquittals can be regarded as a specific formulation of a solid foundation in such context. 36. The suggestion that a witness told lies on a previous occasion is an imputation of misconduct[23]. Whilst the immediate context in Wong Sau Ming was a police officer lying to the court, the observation of Lord Phillips in Kong Wai Lun was a general one. In the context of cross-examination on credit, no distinction can be drawn between an imputation levelled against a police officer and that levelled against a civilian witness. As far as the requirement of a solid foundation is concerned, there is no difference between casting an imputation of lies told in court and lies told to a public officer for law enforcement purposes. If a cross-examiner does not have a solid foundation for casting the imputation, the question would have no relevance to the assessment of the veracity of the witness and should not be allowed. C3. The distinction between primary issue and credit 37. Whilst judges at times find the distinction between cross-examination on primary issues and cross-examination as to credit difficult to draw, it is recognized that such distinction is important and necessary in order to confine the ambit of a trial within proper limits and to ensure that the trial is focused on the central issues instead of being side-tracked by collateral issues. The principles governing cross-examination on credit and the finality rule are premised on such distinction. Both Li CJ in Wong Sau Ming[24] and Lord Phillips in Kong Wai Lun [25] upheld this distinction as a matter of common law in Hong Kong. 38. In the present appeal, Mr Corlett invited us to draw a further distinction. Accepting that cross-examination as to the general credit of a witness would be governed by the principles discussed above, counsel submitted that questions relevant to the witness’s credibility on matters sufficiently closely related to the subject matter of the indictment would not. In the latter situation, counsel said the correct approach was that adopted in R v Funderburk[26]and HKSAR v Cheung Hok Man[27]. In Cheung Hok Man, Chu J (as Chu JA then was) held at [32]: “… The legal principles laid down by these authorities[28] were: as sexual acts in sexual cases usually take place in private, the evidence would basically be limited to that of the complainants’, and assessing their credibility thus lies as a core question in those cases. Consequently, there is in effect no line drawn between issues relevant to the credibility of a witness and questions relevant to an issue in a case; evidence which has bearing on the credibility of the witness would have bearing on the matters in dispute in the case as well. Hence, the court should allow calling evidence relevant to the credibility of the complainants, because the evidence may cause the jury to come to a different view of their testimonies.” 39. Mr Corlett also relied on the following part of the judgment in Funderburk[29]: “… It seems to us that on the way the prosecution presented the evidence the challenge to the loss of virginity was a challenge that not only did the jury deserve to know about on the basis that it might have affected their view on the central question of credit, but was sufficiently closely related to the subject matter of the indictment for justice to require investigation for the basis of such a challenge.” 40. Whilst the restriction on cross-examination as to credit should be applied with flexibility, I cannot accept that once it is demonstrated that the credibility of a witness is of crucial importance the court should give free rein to counsel in the cross-examination on credit and the calling of evidence in rebuttal. Nor do I accept Mr Corlett’s further distinction between cross-examination on general credit and cross-examination on credibility regarding matters closely related to the subject matter of the charge. 41. In Wong Sau Ming and Kong Wai Lun this Court firmly maintained the distinction between cross-examination on primary issues and cross-examination on credit notwithstanding that the evidence of the police officers in both cases was of crucial importance to the prosecution case. 42. On a proper analysis, the proposed cross-examination in Cheung Hok Man and Funderburk clearly related to the general issues in the cases rather than solely to credit. 43. In Cheung Hok Man, the issue was whether sexual intercourse had taken place. It was part of the complainant’s evidence that after the alleged rape she headed back home. On the way, she worried about getting pregnant and purchased “morning after pills”. She denied having met her god-brother in the course of that journey. The evidence of the god-brother (whom the trial judge refused to allow the defence to call) could cast doubt on the complainant’s evidence of purchasing contraceptives immediately after the alleged rape. Thus it was relevant to the issue of whether sexual intercourse had taken place. 44. Likewise, in Funderburk, the proposed cross-examination was directed at challenging the complainant’s evidence-in-chief that she was a virgin prior to the alleged rape, the defence case being that she had either transposed experiences which she had had with others or fantasised her experience with the appellant. Henry J (as he then was) held that the rules of evidence designed to promote justice should not be applied to preclude such cross-examination when the complainant’s account of loss of virginity would be the most vivid picture in the minds of the jury[30]. Thus, emphasis was placed on the way in which the prosecution had presented the evidence in the dicta cited by Mr Corlett. 45. On the other hand, in cases where the cross-examination is relevant only to a challenge on the credibility of a witness, the usual restriction and the finality rule should be applied even when the evidence of the witness is of crucial importance to the prosecution case. At the same time, whilst it is essential to prevent the primary issues becoming obfuscated as a result of unrestricted admission of evidence on collateral issues, a trial judge should pay regard to fairness and justice in the particular circumstances of the case. When it is demonstrated that the probative value of a line of cross-examination on credit clearly outweighs any potential for confusion or obfuscation by the introduction of collateral issues, the discretion should be exercised in favour of permitting cross-examination. 46. In making the abovementioned assessment, the proximity or remoteness of the topic for cross-examination in connection with the subject matter of the charge is relevant. But it is also relevant to consider whether there is a solid foundation for casting an imputation on the credibility of a witness by reference to that topic. This approach is reflected in the two threshold requirements laid down in Wong Sau Ming in the context of cross-examination by reference to a previous acquittal. C4. The duty to explain the relevance and to lay proper foundation 47. Since the extent to which cross-examination should be allowed on credit is discretionary, one must have regard to the arguments and the materials that had been put before the trial judge in assessing whether an appellate court should intervene. 48. In the fulfilment of the duty to provide the court with all material information discussed in Kong Wai Lun, a cross-examiner should clearly explain the relevance and basis of the proposed cross-examination on credit. Before casting an imputation of misconduct against the witness, it is also necessary to be able to demonstrate that there is a solid foundation for the same. D. The magistrate had exercised his discretion properly D1. Mr Corlett’s arguments in this Court 49. Mr Corlett submitted that the cross-examination would have been aimed at showing that the helper had lied to the Immigration officer in respect of the Non-Domestic Work. Had that been demonstrated, the court would have found it difficult to attach weight to her evidence in respect of matters which occurred within the charge periods as those allegations formed part of the same story. Counsel also said it was easier to rebut the Non-Domestic Work allegations as compared with the helper’s allegations of working in the Other Sea Ranch Houses which were vacant. 50. In the printed case of the appellant[31], Mr Corlett provided rather vague information on how the appellant intended to show that the Non-Domestic Work allegations were a fabrication. In essence, it would have involved cross-examination of the helper by open questions “to elicit as much (fabricated) detail as possible” followed by calling witnesses to rebut the same. No witness statement has ever been produced though counsel suggested that the witnesses would testify that they had never seen the helper working at the restaurant and the office. A witness would also say that her evidence that the restaurant also operated as a hotel could not be true as it did not have the requisite licence. D2. The arguments were not advanced before the magistrate 51. These were not the same arguments as those put before the magistrate. As we have seen, trial counsel had explained the purposes of cross-examination to the magistrate differently. 52. Though Mr Tse had submitted to the magistrate that the helper’s complaint to the Immigration officer had to be treated as a whole, he did not contend (as Mr Corlett now submitted before us) that cross-examination on the Non-Domestic Work would be cross-examination on the facts in issue as it was closely related to the subject matter of the charges as opposed to mere cross-examination on credit. 53. Further, Mr Tse did not inform the magistrate of the basis on which he suggested that the allegations were fabricated. He gave no indication that the defence intended to call witnesses to rebut such allegations and did not provide any outline of the evidence of these witnesses. Trial counsel had ample opportunities to put to the helper that her evidence on the Non-Domestic Work was a complete fabrication. Yet this was not done. 54. It is of no avail to the appellant that a couple of days after the ruling Mr Kong informed the magistrate that the defence decided not to call witnesses about events outside the charge period. Apart from the obvious fact that this information was not provided to the magistrate before the ruling, he was not told what such evidence was and what purpose the evidence was supposed to serve. The stark reality was that the defence did not attempt to justify the aborted cross-examination by reference to the potential evidence of these witnesses. 55. Since trial counsel had not properly explained the need for questioning on the Non-Domestic Work in detail and had failed to lay a solid foundation for suggesting the helper was telling lies, the magistrate was entitled to come to the view, as he did, that the cross-examination which he had already allowed on the frequency and time of the Non-Domestic Work was enough to serve the stated purposes of the defence. D3. No ground for interference with the exercise of the discretion 56. We were given no explanation for the magistrate not being informed of the plan of the defence as it is now canvassed before us. If this had been the plan all along, it is difficult to understand why Mr Kong explained the purposes of his cross-examination in the way he did. It is also strange that Mr Tse did not disclose such plan to the magistrate in his efforts to have the ruling re-visited. 57. Since the relevant information had not been provided to the magistrate and there is no good reason for not doing so, it cannot be said that the magistrate was in error in setting the restrictions on cross-examination in the way he did. He was correct in holding the view that the disputes over the Non-Domestic Work were not issues which he had to determine in the criminal trial and the proposed cross-examination was solely on credit. Whilst the fact that an issue would be relevant in the civil case cannot by itself be a good reason for denying a relevant line of cross-examination in the criminal trial, he was entitled to take the view that such disputes would have to be resolved by a trial of collateral issues in the criminal trial as counsel had not suggested to him that the defence could call unequivocal rebuttal evidence on it. 58. In the circumstances, there is no reason for an appellate court to interfere with the magistrate’s exercise of discretion. The appeal can be dismissed on this ground alone. E. Lack of a solid foundation for casting an imputation E1. The proposed cross-examination is only relevant to credit 59. In any event, the magistrate had allowed counsel to explore the connection between the instructions regarding the Non-Domestic Work and the work undertaken at the Other Sea Ranch Houses. The instructions were given at different times and the work was performed at different places. The nature of the work was different. In such circumstances, the mere inclusion of the Non-Domestic Work in the complaint does not mean that it had any bearing on the subject matter of the charges. 60. Even on Mr Corlett’s own argument, the only possible relevance of the cross-examination was on credit: if the court were to find that the helper had lied to the Immigration officer on the Non-Domestic Work, it would taint her credibility in respect of her evidence on the subject matter of the charges. The present case is clearly distinguishable from the situations in Cheung Hok Man and Funderburk. 61. In contrast, had the defence deployed the strategy outlined by Mr Corlett with regard to the subject matter of the charges, it would not be subject to the restriction on cross-examination as to credit. The contractor and his workers undertaking the renovation work at House 11 could have testified on the alleged removal of debris by the helper. During the second contract, the helper said she lived and worked in the home of the appellant’s brother at the specified address whilst the appellant lived elsewhere at House 11. On the other hand, the defence case as put by counsel was that she lived with the appellant, not the brother. The brother and other members of his household could have testified to contradict the helper’s allegation that she had lived with them. However, the defence did not take such course at the trial. 62. In light of the submissions of Mr Corlett (but not those advanced before the magistrate), the appellant could have made out a case for testing the credit of the helper by reference to the allegations on the Non-Domestic Work provided there was a solid foundation for casting the imputation that she had deliberately lied to the Immigration officer. In the absence of any proper basis for such an imputation, even if there were inaccuracies in those allegations, they could not have been material to the assessment of the helper’s veracity in the evidence on the subject matter of the charges. E2. No solid foundation for imputing that the helper had lied to the Immigration Officer 63. There had not been any previous finding by any court or tribunal impugning the helper’s credibility over her allegations on the Non-Domestic Work. It is not suggested by Mr Corlett that the defence could show that these allegations were fabricated simply by cross-examining the helper. 64. Lack of witness statements aside, the rebuttal evidence as outlined by Mr Corlett would not unequivocally establish that the helper was untruthful. The lack of licence for the “hotel” is neither here nor there as the helper testified that she had no knowledge as to its business operation[32]. If the proposed evidence that the helper had not been seen working at the office were adduced at the trial, the magistrate would have had to conduct a trial on these allegations in order to assess whether the helper had worked there in the absence of the rebuttal witnesses; whether she or they were to be believed; and if the evidence of such witnesses were preferred, whether the helper had deliberately lied to the Immigration officer. As Lord Phillips said in Kong Wai Lun[33]: “… Where, however, the truth of the allegation of misconduct made against the witness cannot be determined without what is, in effect, a separate trial relating to that issue, the finality rule will normally preclude the calling of evidence to challenge his denial.” 65. If the rebuttal evidence could not have been called, it is unlikely that the appellant would have gained much mileage from cross-examining on the details of the Non-Domestic Work. 66. The other purpose put forward by Mr Corlett for the further cross-examination, viz to elicit more details from the helper so that there would be more scope for rebuttal, cannot be a valid ground for allowing further cross-examination on collateral issues. This smacks of objectionable fishing which has no place in the proper cross-examination on credit. E3. Application of the finality rule does not result in unfairness 67. As it had not been demonstrated that the probative value of the proposed line of cross-examination on the details of the Non-Domestic Work clearly outweighed any potential for confusion or obfuscation by the introduction of such collateral issues, the restrictions imposed by the magistrate did not give rise to any unfairness. 68. The restrictions set by the magistrate did not give rise to any substantial and grave injustice. I would dismiss the appeal accordingly. Lord Hodge NPJ: 69. I agree with the judgment of Mr Justice Lam PJ. Chief Justice Cheung: 70. Accordingly, the Court unanimously dismisses the appeal. Mr Marc Corlett and Mr Marco S P Tse, instructed by S K Wong & Co, for the appellant Mr David Chan, SADPP and Ms Laura Liu, SPP, of the Department of Justice, for the respondent [1] (2003) 6 HKCFAR 135. [2] (2015) 18 HKCFAR 7. [3] Section 46(2) of the Immigration Ordinance Cap 115 sets a 3-year limitation period for prosecution of offences under the ordinance. [4] Transcript p.45K to Q; p.67K to N. The page references in these footnotes are the pagination at Part B of the Appeal Bundles. [5] Transcript p.30A to 31R. She had already said so on Day 1 of her evidence, see Transcript p.2P to 3J. For reason unknown to us, that seems to have escaped counsel’s attention when he suggested that some of those assignments were within the charged period at Transcript p.25B. [6] Transcript p.19N and 20A to D. [7] Transcript p.25A to D. [8] Transcript p.31Q. [9] Transcript p.48A to 50H; p.56G to K. [10] Transcript p.50R to 52D; p.55K to 56U. [11] Transcript p.22H to M; p.25E to O; p.27L to 28N. [12] Transcript p.48I to L; p.49U to 50F. [13] CFI Judgment of 17 May 2021 at [37] to [41]. [14] CFI Judgment of 17 May 2021 at [44] to [46]. [15] CFI Judgment of 17 May 2021 at [47]. [16] CFI Judgment of 17 May 2021 at [51]. [17] (2003) 6 HKCFAR 135 at [29] to [32]. [18] (2003) 6 HKCFAR 135 at [59] to [60]. [19] (2003) 6 HKCFAR 135 at [61]. [20] (2015) 18 HKCFAR 7 at [40] and [41]. Lord Phillips also considered the matter from the angle of similar fact evidence, which is not relevant for present purposes. [21] [2021] UKPC 16 at [37] to [40]. It was an appeal from Trinidad and Tobago. [22] [2001] UKPC 2 at [16]. It was also an appeal from Trinidad and Tobago. The judgment was delivered by Lord Clyde. [23] See Wong Sau Ming at [46] and Kong Wai Lun at [34]. [24] See [25] and [26] of Wong Sau Ming. [25] See [28] of Kong Wai Lun. [26] (1990) 90 Cr App R 466. [27] [2011] 3 HKLRD 810. [28] The authorities were R v Funderburk (1990) 90 Cr App R 466; R v Gibson [1993] Crim LR 453; R v Nagrecha [1997] 2 Cr App R 401 and Tiwari v The State [2002] UKPC 29. [29] (1990) 90 Cr App R 466 at p.476. [30] (1990) 90 Cr App R 466 at p.475 and 477. [31] Paras 52 to 54 of the appellant’s printed case. [32] Transcript at p.42S to 43N. [33] (2015) 18 HKCFAR 7 at [34].
Chief Justice Ma: 1. At the conclusion of counsel’s submissions, we dismissed the appeal with costs, the reasons to be handed down at a later date. I agree with the reasons for dismissing the appeal contained in the judgment of Mr Justice Tang PJ, and also with the observations of Mr Justice Ribeiro PJ and Lord Collins of Mapesbury NPJ. 2. The issue before this court was the true construction of the Environmental Impact Assessment Ordinance (“the EIAO”),[1] in particular s 5 of the Ordinance.[2] 3. As has been stated and reiterated on numerous occasions, a statute must be construed with regard to its context and purpose – the contextual and purposive approach. Once this approach is adopted in the present case, as the judgments which follow clearly demonstrate, the answer in the present appeal becomes clear:- (1) The purpose of the EIAO is to make provision for the assessment of the environmental impact of certain designated projects or proposals. A clear statement of this purpose is contained in the long title to the Ordinance. (2) The particular project or proposal with which the present appeal was concerned, namely an integrated waste management facility, was exactly such a designated project under the Ordinance requiring an environmental assessment. (3) Under s 5 of the EIAO, a “person who is planning a designated project” must make an application to the Director of Environmental Protection (“the Director”)[3] and go through the prescribed process under the Ordinance. This “person” would principally be the proponent of a prescribed project. (4) In the context of the EIAO and the Waste Disposal Ordinance (“the WDO”)[4], the Director can clearly be the proponent of a waste management facility such as the facility in the present case. The more accurate way of putting it is perhaps to say that the Director had a statutory responsibility in such matters. As the judgments of Mr Justice Ribeiro PJ and Mr Justice Tang PJ note, the Director was both the “collection authority” and the “waste disposal authority” under the WDO. (5) Accordingly, given this context as well as the purpose of the EIAO, it is clear that the word “person” in s 5 of the Ordinance should be accorded a wide meaning (and this is also its natural meaning) to include government departments such as the Environmental Protection Department (“EPD”). (6) Admittedly, it does mean that where the proponent of a designated project is the Director, she does in a sense make an application to herself under s 5. However, given the principles of natural justice and the in-built divisions within the EPD itself, this point does not by itself provide any support for the Appellant’s principal contention in this appeal that the Director must, as a matter of statutory interpretation, be excluded from the application of s 5 of the EIAO. Quite the contrary: if the Appellant were right to exclude the Director from the application of s 5 of the EIAO, it would result in the absurd position that projects proposed by the Director (these projects being otherwise designated ones under the EIAO) would escape the application of that Ordinance. Equally absurd would be the notion that the Director, instead of being the appropriate project proponent of a designated project under EIAO, must instead ask another government department or official to be the proponent of the project. Mr Justice Ribeiro PJ: 4. I respectfully agree with the Reasons for Judgment provided by Mr Justice Tang PJ as well as the observations of the Chief Justice and Lord Collins of Mapesbury NPJ, and also wish to add a few words of my own. 5. The appellant’s argument is that on its proper construction, the Environmental Impact Assessment Ordinance[5] (“the EIAO”) excludes the Director of Environmental Protection (“the Director”) from ever being the proponent of a designated project which is required to go through the prescribed Environmental Impact Assessment (“EIA”) process under the Ordinance. 6. Mr Hectar Pun SC acknowledged that he was unable to point to any language in the EIAO which supported that argument. He relied instead on what he submitted was a purposive interpretation, contending that permitting the Director to act as a proponent would lead to the absurd result that she would make all relevant applications under the EIAO to herself. 7. Such alleged absurdity is however purely notional and unsupportable both as a matter of statutory interpretation and on the facts. 8. A “person” planning a “designated project” listed in Schedule 2 of the EIAO is obliged[6] to go through the prescribed EIA process. As provided in the Interpretation and General Clauses Ordinance,[7] the word “person” is generally to be construed as including “any public body and any body of persons, corporate or unincorporate”. Since the EIAO binds the Government,[8] it follows (and Mr Pun accepted) that a department of the Government is a “person” for these purposes and therefore must, if it is planning a designated project, go through the EIA process. 9. Where the designated project involves waste management, the department one would naturally expect to formulate and implement relevant government policy, including policy involving the construction and operation of a municipal waste incinerator, is the Environmental Protection Department (“EPD”). It is hard to envisage any other department that would be as well placed to play the role of planner of the designated project and of the applicant submitting a project profile which complies with the technical memorandum as required by EIAO section 5. The Director is, after all, designated as the Waste Disposal Authority under the Waste Disposal Ordinance.[9] 10. The EIAO therefore suggests on its face that the EPD, just as much as any other government department, may appropriately act as the proponent of a designated project and be subject to the EIA process, seeking the Director’s eventual approval. It is only if, in playing such role, an inevitable conflict of interest, or the kind of absurdity referred to by the appellant, must arise or does in fact arise, that the Court should either construe the EIAO as excluding the EPD (and the Director as it head) generally or intervene in relation to a particular project where the objections do in fact arise. 11. Numerous features of the EIAO militate against a general exclusion. The statutory scheme is designed to make the EIA process transparent and to provide real opportunities for stakeholders to participate, subject to an appeal and judicial reviewability. The published technical memorandum sets out criteria regarding technical and other content against which the project profile, the study brief, the EIA report and the terms of the environmental permit can objectively be assessed.[10] The Advisory Council is given oversight throughout and the Appeal Board (which must not include public officers[11]) operates where the applicant or permit holder has grievances against the Director. As was demonstrated in the present case, the transparent standards and process make judicial review an effective check against possible abuse or failure of enforcement on the Director’s part. 12. The evidence establishes that the present EIA process was implemented by two functionally segregated sections of the EPD, scrutinised by the public and in judicial review proceedings. It is clear that the Director did not herself play any role in it. The fact that the complaints as to conflict of interest and apparent bias made by the appellant below are not pursued in this Court represents an implicit acceptance that the statutory process involving the Director as project proponent can occur, and did in this case occur, without giving rise to such objections. 13. There is accordingly no basis for departing from the natural construction of the EIAO enabling the EPD (nominally the Director) to act as project proponent in the EIA process. Mr Justice Tang PJ: 14. The organisationalchart of the Environmental Bureau and Environmental Protection Department (“EPD”), which is not disputed, shows that the Permanent Secretary for the Environment is also the Director of Environmental Protection (“the Director”), and that within the Environmental Protection Department, there are three divisions. We are concerned with only two, each of which is headed by a Deputy Director of Environmental Protection (“DDEP”). One division is called Environmental Assessment Division (“EAD”) which is headed by DDEP(1). The Infrastructure Planning Group (“IPG”) is part of another division and headed by DDEP(2). 15. Under the Environmental Impact Assessment Ordinance (“EIAO”) Cap 499, no designated projects[12] should be carried out without an environmental permit (“EP”)[13]. In order to obtain an EP, a person who is planning a designated project must first apply for an environmental impact assessment study brief to proceed with an environmental study for the project[14] under s 5 which provides: “(1) A person who is planning a designated project shall apply to the Director— (a) For an environmental impact assessment study brief … (2) The applicant shall— (a) submit the applicationin the form approved by the Director; (b) submit a project profile that complies with the technical memorandum; …” 16. The application may lead to the Director issuing to the applicant an environmental impact assessment study brief.[15] On the basis of which the applicant should prepare an Environmental Impact Assessment Report (“EIA report”) for the approval of the Director under s8. Such a report, if approved, would be placed “on the register.”[16] Then, if the applicant wishes to “have constructed, construct or operate a designated project or to decommission one”, he/she should refer to the EIA report on the register[17] and apply to the Director under s 10(1)(a) for an EP. 17. This appeal concerns a designated project namely, the project to construct and operate the Integrated Waste Management Facilities (“IWMF”) Phase I, commonly known as the municipal waste incinerator (“the facilities”), at an artificial island near Shek Kwu Chau (“SKC”). It is common ground that an EP under s 10 was required for the facilities. For that purpose, applications were made under s5 for a study brief, under s 8 for an EIA report and finally for an EP under s 10. The applications were made in the name of the Director because the IPG was the proponent of the facilities. The applications were dealt with in the usual way by the EAD,the Director having delegated to the officers in the EAD the requisite powers under the relevant provisions.[18] The applications resulted in decisions made in the name of the Director to approve the EIA report as well as the issue of the EP. These decisions are the subject of these judicial proceedings. A further decision challenged was the Town Planning Board’s decision to submit the draft SKC Outline Zoning Plan No S/I-SKC/1 to the Chief Executive in Council based on these other impugned decisions. 18. At first instance, the applicant relied on eight grounds.[19] Au J rejected all of them. The first five grounds were concerned with alleged deficiencies in the EIA report. These arguments were repeated and rejected unanimously by the Court of Appeal and we are not concerned with them. The 6th ground complained of the breach of natural justice. It was said that since the Director was the applicant for and the grantor of the approval— she was the judge in her own cause, and there was actual or apparent bias. On this ground, the learned judge found on the evidence that the IPG was responsible for the planning of the facilities and the applications, and that these applications were dealt with by the EAD. Au J found as a fact that there was “structural segregation between the EAD and the IPG”.[20] That: “The EP was issued in the name of the Director only because she is the head of the EPD, not because she had played any actual role in the approval of the EIA Report or the decision to issue the EP.”[21] 19. Au J also found, applying well established principles, that having regard to the actual segregation of personnel and duties, there was no actual or apparent bias.[22] There was no appeal, and rightly so, from the rejection of this ground. The 7th ground complained of illegality. It was argued that on the proper construction of s 5, “the applicant” under s 5[23] could not include the Director for these reasons, first, for the reasons advanced under the 6th ground. Secondly, becauseit was absurd. The examples of absurdity given were,[24]in the case of the Director rejecting the EIA report under s 8 since it would involve “the Director rejecting a report tendered by herself and to give reasons to herself in so doing.” It was said it would be absurd to think the Director could be aggrieved by her own decision and lodge an appeal.[25] The 8th ground concerned the decision of the Town Planning Board which depended on the challenge to the other decisions. 20. The appellant[26] appealed to the Court of Appeal on the 7th, the “illegality”, ground. Since AuJ had rejected the breach of natural justice and real or apparent bias ground[27] which was not challenged on appeal, the Court of Appeal was only concerned with the “absurdity” argument. 21. The appeal was dismissed by a majority.[28] Counsel’s detailed submission on “absurdity” can be found at para 80 of the majority’s argument. These submissions were repeated before us by Mr Pun SC.[29] These arguments were encapsulated by Mr Pun at the outset of his submissions when he invited us to look at the EP and to note the statement on its face that “… (the Director) grants this environmental permit to the Director of Environmental Protection”. With respect, once it is accepted, as Mr Pun has rightly accepted, that there was actual separation of function in the EPD, and that there was no breach of natural justice, I respectfully agree with the majority’s description of Mr Pun’s complaint as being “more or less of a formalistic nature”.[30] In substance, the applications were made by DDEP(2) to DDEP(1),[31] each acting under authority duly delegated by the Director. 22. Mr Pun accepted that the facility is a designated project and that its proponent should apply under s5, and that the Director could not “construct or operate a designated project or decommission a designated project” under s 9 without an EP. However, he submitted the Director could not be the named applicant because it would be absurd for the Director to apply to herself, regardless of the actual functional separation.[32] 23. Mr Pun submitted that we should construe “applicant” under s 5 as excluding the Director[33] and this is the correct construction because the legislature could not have intended an absurdity. McWalters JA agreed with Mr Pun although he said he was troubled most by the fact that: “… prior to the enactment of the EIAO the Director was already performing the dual roles of project proponent and regulator in respect of his duties under the Waste Disposal Ordinance.”[34] 24. McWalters JA was right to be concerned about the Director’s duties under the Waste Disposal Ordinance (“WDO”) Cap 354. Both before and after the enactment of EIAO, the Director was the waste disposal authority under the WDO.[35] The facilities which are waste disposal facilities were the responsibilities of the Director under WDO. 25. However, McWalters JA concluded that because the legislative purpose of the EIAO was that particular projects[36] should go through an environmental impact assessment process which is presided over and enforced by the Director[37]and that in a real sense the Director is the guardian of the environment : “138. It is my view that standing back and looking at the EIAO as a whole and having regard to the Ordinance’s legislative purpose, the important public interest that purpose is designed to protect and the importance of the Director performing his regulatory and enforcement duties in an independent way as a means of achieving that purpose, it would be contradictory and illogical for the Director to himself be a project proponent.” 26. With respect, I cannot agree. As Lam VP and Kwan JA pointed out in their joint judgment, the approval process is highly transparent and that during the approval process other stakeholders (including members of the public concerned about environmental issues) have full opportunity to comment and state their views. As these and other proceedings have shown there is also the possibility of recourse to the courts by way of judicial review.[38] Moreover, as the organisational chart shows so clearly, the functions of EAD and the IPG divisions are clearly separated. Indeed, they are housed in separate premises. 27. With respect, McWalters JA failed to have sufficient regard to the fact that Au J had found that having regard to the actual and effective separation of function in the EPD, there was no real or apparent bias in the application and decision process. The majority in the court of appeal was of the same view.[39] Indeed, McWalters JA said[40] the legislature could have expressly enacted “a scheme of which the Director was regulator and enforcer and also a participant as a project proponent”. No doubt the legislature could have done so. No doubt, any such scheme would have provided for actual separation of function. If one compares what was actually done in the separation of function with what the legislature might have chosen to do, it is clear the actual separation is not deficient in any way. Were it otherwise, relief might have been obtained by judicial review. With respect it begs the question to say that the legislature had implicitly rendered illegitimate a scheme which had actually provided functional separation. 28. McWalters JA said : “140. There is nothing within the EIAO that would suggest that it was ever contemplated by the legislature that the Director would participate as a project proponent in a scheme designed to protect a particular public interest over which he presides as regulator and enforcer.” 29. Waste removal facilities were mentioned expressly in Schedule 2 and made designated projects such that applications would have to be made in respect of such facilities under EIAO. The legislature must have been aware of the Director’s duties under the WDO. Moreover, as the organisational chart clearly shows the EPD included a division dealing specifically with waste management which was involved with waste management policy, infrastructure, facilities and reductions, for which the legislature had voted the necessary funds. They provide the context in which the EIAO should be construed. They inform the clear separation of function in the EPD. I have no doubt it was clearly envisaged by the legislature that the Director, as waste disposal authority under the WDO and proponent of waste disposal facilities, might apply for an EP under the EIAO. 30. For the above reasons and those given by the Chief Justice, Mr Justice Ribeiro PJ and Lord Collins of Mapesbury NPJ, we dismissed the appeal at the end of the hearing with costs. Mr Justice Fok PJ: 31. I agree with the judgment of Mr Justice Tang PJ and the additional observations of the Chief Justice, Mr Justice Ribeiro PJ and Lord Collins of Mapesbury NPJ respectively. Lord Collins of Mapesbury NPJ: 32. I agree with the judgment of Mr Justice Tang PJ and the observations of the Chief Justice and Mr Justice Ribeiro PJ. In my view the appellant is forced into an impossible position by having to argue, as he does, that the word “applicant” in section 5 does not include the Director and so does the word “person” in so far as it refers to the applicant (counsel for the appellant’s emphasis). The starting point must be the meaning of the words “a person.” Of course, exceptionally there may be a departure from the plain meaning of expressions such as “a person” or “any person”: see for recent decisions in England rejecting such a departure Yarl’s Wood Immigration Ltd v Bedfordshire Police Authority [2009] EWCA Civ 1110, [2010] QB 698; and Bilta (UK) Ltd v Nazir (No 2) [2015] UKSC 23, [2015] 2 WLR 1168. But in the present case there is not only no basis for a rewriting of the Ordinance to achieve the result for which the appellant contends, but it would make a nonsense of the Ordinance as a whole, particularly section 9, which provides that “a person” shall not construct or operate a designated project without an environmental permit. It is simply impossible to interpret the Ordinance as a whole by giving different meanings to the word in what is essentially a single context. (Joseph Fok)				Permanent Judge Mr Hectar Pun SC and Mr Newman Lam, instructed by Lee Chan Cheng, assigned by the Director of Legal Aid, for the applicant (appellant) Mr Johnny Mok SC and Ms Eva Sit, instructed by the Department of Justice, for the 1st respondent (respondent) [1] Cap 499. [2] The relevant parts of this provision are set out in para 15 below. The Court of Appeal gave leave to appeal to the Court of Final Appeal on the following point said to be of great general or public importance:- “Whether on a true and proper construction of the Environmental Impact Assessment Ordinance, Cap 499, the Director of the Environmental Protection can be an ‘applicant’ applying to herself for approval of an environmental impact assessment report or an ‘applicant’ applying to herself for an environmental permit in respect of the construction and operation of a designated project?” [3] The Respondent in the appeal. [4] Cap 354. [5] Cap 499. [6] EIAO section 5. [7] Cap 1, section 3. [8] EIAO section 3(1). [9] Cap 354, section 2. [10] EIAO section 16. [11] EIAO section 19(5). [12] s 4(1): “The projects listed in Schedules 2 and 3 are designated projects.” [13] s 9. [14] s 5(1)(b) provides also for a direct application for an EP, but we are not concerned with this possibility and will not deal with it. [15] s 5(7)(a). [16] s 8(5). [17] s 10(1)(b). [18] Instrument of Delegation (Departmental Standing Circular No 1-EIAO(1)-2007). [19] The applicant was represented by Mr Valentine Yim and Mr Hectar Pun. Throughout these proceedings, the respondent was represented by Mr Johnny Mok SC and Ms Eva Sit. [20] Au J para 176(3). [21] Au J para176(6). [22] Au J para 183. [23] If the Director could not be the applicant under s 5, it would follow that she could not be the applicant under s 8 nor the “person” under s 10. [24] Au J para 189(2)(a). [25] Under s 17. [26] The applicant was represented by Ms Gladys Li SC, Mr Valentine Yim and Mr Hectar Pun. [27] The 6th ground. [28] Lam VP and Kwan JA [29] With Mr Newman Lam. [30] CA para 117. [31] See para 14 above. [32] Nor could she be the applicant under s 8 or s10 for the same reason. [33] The same argument applies to s 8 and s 10. It is unnecessary to deal with them separately. [34] Para 147. [35] The Director is also the collection authority under the WDO in relation to chemical waste and clinical waste and in relation to any other waste,the Director and the Director of Food and Environmental Hygiene are the collection authority. [36] Designated projects. [37] Para 129. [38] Para 96. [39] Para 118. [40] Para 139.
Chief Justice Cheung: 1. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: A. Introduction 3. This appeal raises questions, in the context of a criminal trial before a judge and jury, regarding the significance of concerns about the language proficiency of jurors and how such concerns might be addressed. These questions are important in a jurisdiction like Hong Kong, where there is more than one official language in which court proceedings may be conducted. To put the discussion of these questions into context, it is necessary first to summarise briefly the particular concern that arose in the trial below, and how it was dealt with by the judge. A.1 The prosecution and trial 4. The appellant stood trial before Deputy High Court Judge Beeson and a jury on two charges of trafficking in dangerous drugs (Counts 1 and 3) and one charge of manufacturing a dangerous drug (Count 2). The counts arose out of events which occurred on 3 December 2014 at a flat rented by the appellant’s son, under a lease commencing the previous month. The appellant’s son was jointly charged with the appellant on the three charges and pleaded guilty to Counts 1 and 3 but not guilty to Count 2, which was not proceeded with by the prosecution but instead ordered to be left on the court file. 5. The prosecution case was simple. The appellant, a taxi driver, was seen parking his taxi and entering the flat twice on the evening in question and staying in the flat for just under two hours and one and a half hours on each visit. As he was leaving the flat after the second visit, the appellant was arrested by police and found in possession of a plastic bag and some keys. Inside the plastic bag was a substantial quantity of cocaine, forming the basis of Count 1. On arrest, he said he was carrying the drugs because he was in debt. The keys were to the flat and, when the police entered, they found the son there apparently in the process of packaging dangerous drugs. There was minimal furniture in the flat and a search of the flat led to the discovery of the drugs forming the basis of Count 3, as well as kitchen tools and sodium bicarbonate which could be used in the manufacture of crack cocaine. Traces of cocaine were detected throughout the flat. On arrest and caution for manufacturing dangerous drugs, the appellant replied that he did not know about manufacturing dangerous drugs and was only responsible for carrying drugs. In a subsequent video recorded interview, the appellant admitted he collaborated with his son in manufacturing and trafficking in dangerous drugs to pay off his debts owed to various financial institutions. 6. Based on this evidence, the prosecution alleged a joint enterprise between the appellant and his son, by which the son carried out the manufacture of the drugs in the flat which the appellant then delivered. The prosecution case relied on the appellant’s admissions and on the direct and circumstantial evidence arising from the appellant’s arrest. 7. The appellant testified in his defence. He denied being in debt and asserted that he went to the flat on the first occasion to deliver soup to his son at his wife’s request. His son was not there so he left the soup and swept the premises, staying only 45 minutes. He returned later in the evening at his son’s request to drive him to Kowloon. On arriving, his son handed him a plastic bag and asked him to wait in his taxi for him. He did not enter the flat on that occasion but was arrested by the police as he was returning to his taxi. He denied knowledge of the contents of the plastic bag or drug making equipment in the flat and also denied making the admissions relied on by the prosecution, claiming he was coerced to make these and to sign to acknowledge them, and coached in what to say in the video interview. 8. At the trial, the opening remarks and evidence occupied nine days (6-8, 10 and 13-17 June 2016) and counsels’ closing speeches and the trial judge’s summing up took place over two days (20 and 21 June 2016), concluding on the morning of the second day. A.2 The jury’s question to the judge before the summing up 9. The trial was conducted in English but, where evidence was given in Chinese, it was translated, by the Court interpreter, who was a very experienced Senior Court Interpreter, into English. The translation was carried out in the usual manner by the interpreter sitting next to the witness box and providing sequential, or consecutive, interpretation of the evidence, meaning that a question was put by counsel in English, interpreted by the interpreter into Chinese, answered by the witness in Chinese, then interpreted by the interpreter into English. The interpreter’s translation of the English questions (into Chinese) and Chinese responses (into English) was audible to everybody present in court and recorded by the court audio recording system. 10. During the morning of the trial on Friday, 17 June 2016, while the appellant was giving evidence in support of his defence, the jury foreman sent a handwritten note to the judge. The text of the note reads as follows: “Dear Judge Beeson, We fully understand our responsibility to be the jury providing verdict to the defendant. Since this is a very serious decision on the case concerning the freedom of the defendant, we hereby request to have a Cantonese translator for the closing statements of the Prosecutor, the defendant lawyer and the Judge to ensure there is no misunderstanding. Please review our concern and provide advise [sic] accordingly. Thank you for your attention to this matter. Foreman of Jury [Signature]” 11. After the appellant had concluded giving evidence, and in the absence of the jury, the judge raised the jury’s question to her with both counsel and said: “Court: They’re obviously very concerned about whether or not they’re going to understand the addresses and the summing-up. I understand that we have devices that the jury can wear. … Court: Yes, and apparently it has been used before for some other matters. What I am proposing to do is to have the devices available for the jury members. That means that they get to listen to what’s being said in the English, but if they need to, they can use the translation that’s going on at the same time for the defendant.” In response to her ladyship, both counsel agreed this was “the proper way to go ahead.” 12. The judge then recalled the jury and addressed them in these terms: “Members of the jury, I’ve had this request for your need to have an interpreter, effectively. The Cantonese translator was for the prosecution and the defendant and the judge to ensure there was no misunderstanding. I take it that up to now, you’ve understood what’s been going on in court, but that you’re a bit worried about not having an interpreter available for the addresses. I propose to deal with it like this. We have devices which are headphones, effectively, that you can wear during the deliberations, in which – allows you hear what the Cantonese interpreter is saying so you’ll be able to hear the English, and if you need to, you can resort to the headphone for the translation by the interpreter. So I think that will cover the problem that you perceive yourselves as having, and we will have those available next Monday, when we will start the addresses. So I’m going to release you now. I’d like you to start, if possible, on Monday at 9.30 so that we can get as much of the addresses done as possible. I may have to hold some over to Tuesday, depending on how long the addresses take so that you’ve got plenty of time to go out and consider your verdict, because there are three charges here, and although the evidence has been comparatively simple, there’s quite a lot of it for you to take into account. So that’s what I’m proposing to do. Does that put any of you into any difficulties? So that means you’ll be able to listen to the interpreter while she’s interpreting for the defendant. And at the same time, if you need to, if you wish to, you can listen to the English. Any questions or any problems that you perceive? Perhaps you’d like to discuss it in the jury room. Let me know when you’re ready.” 13. The jury retired to consider the judge’s proposed course of action and, on being recalled again, the judge asked if there was any problem with what had been spoken about so far. This led to the following exchange: “Foreman: It’s okay, my Lady. We decided to continue. No need to get the headset. Court: Well, you’ve made me nervous now, so I think we’ll get the headsets for Monday, and if you don’t want to use them, you don’t have to use them, but they’ll be available there if anybody does need to use them. So I’ll adjourn now until 9.30 on Monday morning. Feel free to leave the court until that time.” The jury then retired for the day and the session concluded with the judge asking counsel if there were any matters either wished to raise, to which they both replied in the negative. A.3 Closing submissions and the summing-up 14. Before closing submissions commenced on Monday, 20 June 2016, the jury were provided with headsets to listen to the Chinese interpretation of the closing speeches and summing up that was to be undertaken for the appellant by the court interpreter who was sitting next to the dock. The judge asked the jury to tell her if there were any problems. Counsel then made their closing speeches from 9.37am until 11.28am, just under two hours. 15. The interpretation that the court interpreter conducted at this stage of the trial was simultaneous translation. The interpreter translated the speeches of counsel to the jury and the judge’s summing-up into Chinese simultaneously with the delivery of those addresses in English by the respective speakers. Unlike the interpretation of the evidence, the translation of the speeches and summing-up was not sequential and, but for the direction to provide the jurors in this trial with headsets, it would only be heard by the appellant in the dock. On this occasion, however, anyone provided with a headset tuned to the same channel the interpreter was using would be able to hear the interpretation in Chinese, given in parallel with the original English spoken by counsel and the judge. 16. The judge then began her summing-up at 2.05pm that day continuing until 3.47pm, with a short ten-minute adjournment at 2.53pm. Her ladyship resumed her summing-up on Tuesday, 21 June 2016, at 10.11am and concluded at 10.31am. The jury then retired to deliberate and, at 2.39pm, just after lunch that day, returned their verdicts. They found the appellant guilty on Counts 1 and 3 unanimously and, by a majority of 6 to 1, guilty on Count 2. 17. There is no record of the identity of the jurors who used the headsets. Evidence from both counsel and the appellant’s trial solicitor indicates that “a few”, or “some”, of the jurors used the headsets provided during the closing speeches and summing-up. No transcript of the simultaneous translation is available as the court interpreter’s interpretation was not recorded. There is no independent evidence from any bilingual speaker as to the accuracy or otherwise of the interpretation. At one point during the first day of summing-up, the court interpreter asked the judge to switch off the amplifier she was using to project her voice as it was interfering with the interpreter’s reception on her headset. The judge inquired of the jury after that if they could hear her and received an affirmative reply. Early on the second day of the summing-up, the jury foreman asked to change the battery of his headset and proceedings continued after this was done. 18. On 23 June 2016, the appellant was sentenced by the trial judge to a total of 26 years’ imprisonment. A.4 The appeal to the Court of Appeal 19. On 15 January 2020, the appellant was granted leave to appeal to the Court of Appeal on the ground that he was deprived of a fair trial because the arrangement for simultaneous translation of counsel’s closing speeches and the judge’s summing-up amounted to a material irregularity in the conduct of the trial.[1] The appellant was refused leave to appeal on a ground alleging that the judge misdirected the jury on the drawing of inferences. 20. On 3 November 2020, the Court of Appeal dismissed the appeal.[2] The Court of Appeal held that the arrangement, although unusual, did not constitute an irregularity in the trial rendering it unfair and that the appellant had not discharged the burden of establishing that there was a real or substantial risk of material misinterpretation. A.5 Leave to appeal to this Court 21. Having been refused certification of points of law by the Court of Appeal,[3] the appellant renewed his application to the Appeal Committee and, on 12 July 2021, leave to appeal was granted to the appellant in respect of the following questions of law: “(1) Is there a continuing duty on the trial judge imposed by the provisions of section 4(2) of the Jury Ordinance (Cap.3) or otherwise to be satisfied that the members of the jury are able to understand the proceedings in the language in which they are being conducted? (2) In the event of possible doubt arising, what approach should a trial judge take in order to ensure sufficient comprehension on the part of the jury of the proceedings in the language in which they are being conducted consistent with a defendant’s right to a fair trial?”[4] B. Question 1 22. Consistent with the status of both Chinese and English as official languages of Hong Kong for, among other purposes, “court proceedings”,[5] trials in this jurisdiction, including trials by jury, may be conducted in both languages, although normally proceedings are either in English or Chinese rather than both. The law and practice relating to jurors is contained in the Jury Ordinance (Cap.3) (“JO”) and, as will be seen, there are provisions concerning the language qualifications of jurors and a discretion is given to the judge to discharge a juror in the interests of justice. These provisions are consistent with the constitutional right to a fair trial[6] and the judge’s overriding duty to ensure a fair trial.[7] B.1 The language qualification requirement under the Jury Ordinance 23. The language qualification requirement for jury service is expressed in s.4(1)(c) of the JO as being that: “the person has a sufficient knowledge of the language in which the proceedings are to be conducted to be able to understand the proceedings.” (Emphasis added) The current wording of s.4(1)(c) of the JO was introduced by amendment in 1997 following the amendment of the Official Languages Ordinance (Cap.5) (“OLO”) in 1995 declaring both English and Chinese as official languages of court proceedings having equal status and enjoying equality of use.[8] 24. In practice, the provisional list of jurors maintained by the Registrar of the High Court is based on information supplied to the Commissioner of Registration when an application is made for the issue of a Hong Kong identity card, and the annual provision of the lists of graduates from local universities and other tertiary education institutions.[9] The supply of such information is reflected in s.4A of the JO, which provides: “(1) The Registrar or the Commissioner may, by notice in writing, require any person specified in the notice who possesses that information, to supply him, in such manner and within such time as may be so specified, with – (a) the name and the number of the identity card of any person who has obtained a grade of pass in an English language examination or a Chinese language examination or part of such an examination as may be so specified; (b) such information as the Registrar or the Commissioner considers necessary to enable the Registrar or the Commissioner to determine whether any person has a sufficient knowledge of the language in which the proceedings are to be conducted to be able to understand the relevant proceedings. … (4) For the purposes of subsection (1)(a) – (a) an English language examination means an examination of English language or an examination conducted in the English language; and (b) a Chinese language examination means an examination of Chinese language or an examination conducted in the Chinese language.” B.2 Discharge of a juror for lack of language sufficiency 25. Lack of language sufficiency as so stipulated in s.4(1)(c) of the JO is a good ground for discharging a person summoned as a juror. S.4(2) of the JO provides: “In a trial before a jury, the court or a coroner may, on the court or the coroner’s own motion or on the application of the Registrar or of any interested party, discharge any person summoned to serve as a juror who is unable to satisfy the court or the coroner that the person’s knowledge of the language in which the proceedings are to be conducted is sufficient to enable the person to understand the proceedings.” 26. As will be apparent from the provisions quoted above (in particular, s.4(1)(c) and s.4A(4) of the JO), no formal standard of language proficiency in either English or Chinese is prescribed. It has been held, though, in HKSAR v Lhouvum Nemboi, that “the standard is not one of fluency and perfection in the language of the court proceedings”[10] and this must be correct as a general statement of principle since the statutory wording refers only to “sufficient knowledge” of the relevant language. By definition, sufficiency of knowledge of a language implies a standard of less than perfection and, in this context, is to be measured by reference to the juror’s duty to try the case according to the evidence and to render a true verdict. Likewise, an ability to understand oral testimony, counsels’ submissions and directions from a judge prior to rendering a verdict does not depend on an ability to speak a language fluently. 27. If a potential juror is summoned as a juror, unless any insufficiency of knowledge on their part of the language of the trial is raised as a ground of discharge before they are sworn, the verdict given by the jury shall not thereafter be susceptible to impeachment on that ground, since s.6 of the JO provides: “If any person is summoned as a juror who is not qualified or liable to serve as a juror, or is exempt from service, such want of qualification or exemption shall be a good cause of challenge and the person so summoned shall be discharged on such challenge or on his own application, if the court is satisfied of the fact and so directs; but no such want of qualification or exemption, if not submitted to the court before such person is sworn, shall afterwards be accepted as a ground for impeaching any verdict given by the jury on which such person has served.” (Emphasis added) 28. Notwithstanding the focus of s.4(1)(c) and s.6 of the JO on language proficiency at the time before a juror is sworn, s.25(1) of the JO provides: “A court may at any time during the trial of any action, suit, information or indictment prior to the verdict discharge a juror – (a) where, in the interests of justice, it appears to the court expedient to do so; or (b) in the interests of the juror.” (Emphasis added) The interests of justice being broad and flexible, this must necessarily embrace a power on the part of a judge to discharge a juror where it becomes apparent, after the juror is sworn and before verdict, that their knowledge of the trial language is insufficient for them to be able to understand the proceedings. Although the language of s.25(1) of the JO is permissive, the power of discharge thereunder is a matter of discretion on the part of the court and that discretion must be exercised lawfully. How that discretion might be exercised in the case of concern about a juror’s sufficiency of knowledge of the trial language will be discussed in addressing Question 2 in this appeal. B.3 Discretion under JO consistent with the common law 29. The discretion given to the court by both s.4(2) and s.25(1) of the JO, respectively to discharge a juror summoned to serve before they are sworn and thereafter at any stage prior to verdict, if they are shown to be unqualified or unable to discharge their duty to give a true verdict according to the evidence, reflects the common law. The principle was stated by Lord Campbell CJ in Mansell v The Queen[11] as follows: “… if a juryman were completely deaf, or blind, or afflicted with bodily disease which rendered it impossible to continue in the jury box without danger to his life, or were insane, or drunk, or with his mind so occupied by the impending death of a near relation that he could not duly attend to the evidence, in which, although from there being no counsel employed on either side, or for some reason, there is no objection made to the juryman being sworn, it would be the duty of the Judge to prevent the scandal and the perversion of justice which would arise from compelling or permitting such a juryman to be sworn, and to join in a verdict on the life or death of a fellow creature.” (Emphasis added) In Ras Behari Lal and Others v The King Emperor,[12] Lord Atkin, delivering the advice of the Privy Council, applied the above principle in Mansell v The Queen and described it as “a continuous duty throughout the trial”. 30. More recently, in R v Ford,[13] Lord Lane CJ reiterated that: “At common law a judge has a residual discretion to discharge a particular juror who ought not to be serving on the jury. This is part of the judge’s duty to ensure that there is a fair trial. It is based on the duty of a judge expressed by Lord Campbell C.J. in Reg. v. Mansell (1857) 8 E. & B. 54 as a duty ‘to prevent scandal and the perversion of justice.’ A judge must achieve that for example by preventing a juryman from serving who is completely deaf or blind or otherwise incompetent to give a verdict.” 31. The same principles apply in Victoria: see R v Burns,[14] R v Cullen[15] and R v Searle.[16] 32. In this jurisdiction, the principle in Mansell v The Queen has been applied in relation to sleeping jurors, in The Queen v Tam Chung-shing and Others,[17] on the basis that it is accepted that a sleeping juror disqualifies himself from giving a true verdict according to the evidence.[18] The position of a juror who is unable to understand the proceedings because of an insufficient knowledge of the language of the proceedings, albeit not identical, is analogous to that of a sleeping juror. 33. It should be noted, however, that the Long Title of the JO states that it is an ordinance “[t]o amend and consolidate the law relating to jurors” and so the primary emphasis is to give effect to its terms rather than to delve too extensively into pre-existing common law authority.[19] For this reason, the duty on a trial judge in relation to the sufficiency of a juror’s knowledge of the language of the proceedings is a matter governed by the qualification requirement in s.4(1)(c) of the JO and in relation to discharge of a juror prior to being sworn or prior to rendering a verdict for that same reason is governed by s.4(2) and s.25(1) of the JO respectively. B.4 Answering Question 1 34. A trial judge is obliged to exercise the discretion conferred under s.4(2) to discharge a juror summoned to serve on a jury, before they are sworn, if not satisfied that the juror in question has a sufficient knowledge of the language of the proceedings to understand the proceedings. An obligation to be satisfied of the language ability of a serving juror once sworn may also arise under s.25(1) of the JO, if a concern arises at any time before a verdict is returned as to the juror’s ability to understand the language of the proceedings. In this sense, the obligation on the trial judge is a continuing one and, at that stage, the judge will have to exercise a discretion to address the particular concern that arises. 35. In their printed cases, both parties to this appeal submitted that there was “a continuing duty” on the trial judge to this extent by reason of s.25(1) of the JO.[20] The difference between the parties to this appeal arises principally from the stances of each as to the propriety of the arrangement adopted by the judge in the present case. Determining if the judge’s exercise of discretion in this particular case was proper or miscarried will involve a consideration of the Court of Appeal’s reasoning for dismissing the appeal and the parties’ submissions in respect of Question 2. 36. However, before turning to address Question 2, it is important to emphasise that the obligations of the trial judge referred to above do not require the trial judge continuously to assess the language ability of each juror during the course of the trial and, in this sense, it is incorrect to regard the judge as being under a positive continuing duty to test the jury’s language proficiency. The trial judge is entitled to proceed on the basis that those persons summoned for jury service will be taken from a list of persons compiled by the Registrar of Persons who have attained an education level of Form 7,[21] i.e. to matriculation level for entry to a university undergraduate course, and so to be of a relatively advanced level of education. The trial judge will also normally include, as recommended by the Judicial Institute, a statement about the language to be used during the trial and a request for a potential juror with concerns about their language ability to notify the judge. In the present case, for instance, the trial judge did include the following statement, broadly similar to that recommended by the Judicial Institute, in her initial remarks to the pool of jurors from which the jury in this trial were selected: “While most of the evidence to be heard in this case will be heard in Cantonese, and translated into English, the speeches of counsel and I will be in English. If you are not comfortable with the English language, please tell me that if your name is called. You may be called to serve in the future for a case conducted upon [sic] in Cantonese.” 37. The trial judge will thereafter also hear each of the jurors selected from the pool take the oath or affirmation of a juror to give a true verdict according to the evidence.[22] This will be taken in the language of the trial and the judge will have been able to observe if any juror has had any apparent difficulty in reading or speaking the words of the oath or affirmation. 38. At either of these points in time, a concern or “red flag” might be raised and, if so, the discretion under s.4(2) of the JO would fall to be exercised. HKSAR v Kelsey Lord Michael Mudd[23] is an example of this where the discretion was exercised not to discharge the juror concerned. In that case, one of the jurors when selected for empanelment told the judge his English was “not that good”. The judge inquired about his occupation and standard of English and concluded that he would be able to understand the proceedings. Neither party challenged the juror and the judge declined to excuse him. The Court of Appeal did not consider there was any merit in the ground of appeal based on the juror’s lack of proficiency in English.[24] 39. If no red flag is raised then, the trial judge is entitled to proceed on the footing that the jurors are able to participate in the trial process in the language in which the proceedings are being conducted. Thereafter, in the event a concern is raised, whether by reason of interaction between the judge and the jury (as in the present case) or otherwise, the discretion under s.25(1) of the JO might be engaged and the judge might have to consider what approach to take. This will be discussed below in addressing Question 2. In any event, it is important to qualify the answer to Question 1 by emphasising that the trial judge’s role in relation to the language proficiency of members of the jury is in the nature of a reactive role to monitor the position in the case of any concern coming to light during the trial. The judge is not required proactively to assess the ability of the jury to understand the proceedings in the language in which they are being conducted as the trial proceeds. 40. The broad proposition the appellant sought to derive in reliance on Hemapala v R,[25] namely that a trial judge has to make “proper inquiry … with each and every member of the jury” as to their understanding of the language of the trial,[26] is inapplicable in the context of the JO and the practice and procedure for empaneling a jury in Hong Kong. In any event, that case is clearly distinguishable on the facts since it involved a trial that was listed to be heard in English before an English-speaking jury but which was in fact conducted largely in Sinhala on the assurance of the jury foreman that the jury members all understood that language. In those circumstances, a requirement to ascertain the position of each juror is understandable but it does not follow as a general rule that an individual inquiry of each member of the jury must always be undertaken when an issue concerning a juror’s language ability arises. C. Question 2 41. Question 2 asks, in general terms, about the approach a judge should take when a concern is raised about the sufficiency of a juror’s knowledge of the language of the proceedings. However, it arises in this appeal from the particular arrangement adopted by the judge in this case. In answering Question 2, it will be convenient to deal firstly with two discrete points of general relevance to the discussion and then to deal specifically with the arrangement in this particular case. The latter discussion will involve an analysis of the Court of Appeal’s reasoning in dismissing the appellant’s appeal and the parties’ respective submissions to this Court. C.1 The number of jurors required to return a verdict 42. A jury in a criminal or civil trial or inquiry in this jurisdiction consists of 7 persons, except where the court or the judge before whom any such trial or inquiry is or may be heard, orders that the jury shall consist of 9 persons.[27] In a criminal trial, the jury is always directed to seek to reach a unanimous verdict on a charge against a defendant. In the event unanimity cannot be achieved, the JO provides for majority verdicts. Thus, s.24(3) provides: “(3) In a criminal trial – (a) where a jury of 7 persons has been sworn – (i) the verdict of a majority consisting of not less than 5 of them shall, subject to subparagraphs (ii) and (iii), be taken to be the verdict of the jury; (ii) if the number of jurors has been reduced to 6 in accordance with section 25, the verdict of a majority consisting of not less than 5 of them shall be taken to be the verdict of the jury; (iii) if the number of jurors has been reduced to 5 in accordance with section 25, the jury must be unanimous in their verdict; and (b) where a jury of 9 persons has been sworn – (i) the verdict of a majority consisting of not less than 7 of them shall, subject to subparagraphs (ii), (iii) and (iv), be taken to be the verdict of the jury; (ii) if the number of jurors has been reduced to 8 in accordance with section 25, the verdict of a majority consisting of not less than 6 of them shall be taken to be the verdict of the jury; (iii) if the number of jurors has been reduced to 6 or 7 in accordance with section 25, the verdict of a majority consisting of not less than 5 of them shall be taken to be the verdict of the jury; and (iv) if the number of jurors has been reduced to 5 in accordance with section 25, the jury must be unanimous in their verdict.” 43. The relevance of this provision is that it is possible that a member of the jury (or even two members) could be discharged during a trial in the interests of justice pursuant to s.25(1) of the JO and still leave intact a jury capable of rendering a lawful verdict. This conclusion is supported by the Court of Appeal decision in The Queen v Tam Chung-shing and Others.[28] One of the grounds of appeal in that case was that sleeping jurors meant that the verdicts against the appellants were unsafe and unsatisfactory. The Court of Appeal considered one of the jurors (identified as juror no. 7) had, by his somnolence, rendered himself incompetent to give a true verdict according to the evidence. Kempster JA’s judgment contemplated that the discharge of juror no. 7 might have been a possible solution to the material irregularity of his participation in the collective deliberations of the jury.[29] 44. Whether discharging one or two jurors and continuing with a lesser number of jurors, but sufficient to return a lawful verdict, will be a suitable solution to the problem of a juror unable to understand the language of the proceedings will, however, necessarily depend on the particular circumstances of the case. If it is discovered that a member of the jury is liable to be discharged due to their lack of language proficiency, the ability to continue the trial after discharging a juror will be a relevant consideration for a judge in deciding how to approach the problem. The English case of R v Chapman,[30] to which the appellant referred the Court, where one of the jurors was disabled through deafness, provides an example of an appeal dismissed on the basis that the deaf juror could have been discharged and a valid majority verdict nevertheless returned. C.2 The Official Languages Ordinance (Cap.5) 45. As noted above, s.3 of the OLO declares both English and Chinese as official languages of court proceedings having equal status and enjoying equality of use. For this reason, it is relevant to consider in what language proceedings are being conducted. This is particularly relevant in a jurisdiction like Hong Kong where not all judges are proficient in both official languages. Some Hong Kong judges are monolingual[31] English speaking judges and not able to conduct proceedings in Chinese. 46. In respect of judicial proceedings, s.5 of the OLO provides: “(1) A judge, magistrate or other judicial officer may use either or both of the official languages in any proceedings or a part of any proceedings before him as he thinks fit. (2) The decision of a judge, magistrate or other judicial officer under subsection (1) is final. (3) Notwithstanding subsection (1), a party to or a witness in any proceedings or a part of any proceedings may – (a) use either or both of the official languages; and (b) address the court or testify in any language. (4) Notwithstanding subsection (1), a legal representative in any proceedings or a part of any proceedings may use either or both of the official languages. (5) The Chief Justice may make rules and issue practice directions to regulate the use of the official languages in the courts.” 47. That provision was considered by Hartmann J (as he then was) in Re Cheng Kai Nam,[32]a case concerning an application for leave to apply for judicial review of a listing judge’s decision to refuse to list a criminal trial in the District Court, due to be heard by a monolingual English speaking judge, before a Chinese speaking judge. In dismissing the application, Hartmann J held that s.5 meant that, even though a judge before whom proceedings were to take place determined to use one official language, his decision did not prohibit the parties to the proceedings or their legal representatives employing the other language.[33] It was not a denial of a defendant’s right to a fair trial to be denied a judge who speaks the official language that the defendant chooses to employ. His fair trial right is contained in Article 11 of the Hong Kong Bill of Rights and, in respect of language, that article only required that, in the determination of any criminal charge against him, a person shall be entitled to have the free assistance of an interpreter if he cannot understand or speak the language of the court.[34] 48. The relevance of the OLO in the context of this appeal is that the respondent submitted, relying on the analysis of the Court of Appeal (see below), that the judge here was using Chinese by the arrangement of providing the jury with headsets so they could listen to the simultaneous interpretation of counsel’s speeches and her summing-up.[35] 49. In support of that submission, the respondent relied on the decision in HKSAR v Kong Lai Wah.[36] The issue in that case, where a defendant was convicted after a trial in Chinese, was whether the defendant’s counsel was allowed to use English at the hearing of the appeal. It was held that the defendant’s counsel could use either or both of the official languages at the hearing of the appeal. In the course of his judgment for the Court of Appeal, Tang VP (as he then was) held: “The language of s.5 [of the OLO] is plain and clear. The court may use either or both languages in any proceedings or a part of any proceedings before him as it thinks fit, and its decision is final. However, a legal representative in any proceedings or a part of a proceeding may use either or both of the official languages.”[37] 50. The respondent went on to submit that, reading s.5 of the OLO and s.4(1)(c) of the JO together, so long as the relevant juror has sufficient knowledge of both official languages, there is no reason a judge could not use both official languages in another part of the proceedings, even though only one had been used previously. Thus, it was submitted by the respondent, that since the judge was using both English and Chinese, via the means of simultaneous interpretation of her summing-up, there was no question of the jury not having a sufficient knowledge of one or other of the official languages in which the proceedings were being conducted.[38] 51. This argument essentially adopted the reasoning in the judgment of the Court of Appeal to like effect.[39] In the CA Reasons for Judgment, Macrae VP (writing for the court) referred to s.5 of the OLO and, in reliance on HKSAR v Kong Lai Wah at [6] (see above), said (at [43]): “It seems to us that the judge in the present case, by allowing the jury to listen to her summing-up in English or, through the official court interpreter, in Chinese, or both, was permitting the use of either or both languages in a part of the proceedings as she thought fit. Indeed, if the judge had used English for one part of her summing-up and Chinese for another part, for example, when reciting direct quotations of evidence, as sometimes happens in trials where the judge and jury are all bi-lingual, there could have been no complaint. In answer to the systemic challenge, we cannot see any impediment in law for the judge to have permitted the official court interpreter to provide a Chinese translation of her English summing-up to jurors; particularly when the jury had requested it in the conscientious performance of their function so as ‘to ensure there is no misunderstanding’, and when both judge and counsel considered it a ‘proper way’ to proceed in the circumstances.” 52. With respect, there are a number of difficulties in this reasoning. 53. The Court of Appeal’s construction of s.5(1) of the OLO proceeds on the footing that it provides for vicarious use of one of the official languages by a judge through an interpreter, hence the reference to the judge “permitting the use of either or both languages”. That point of construction was not fully argued before us and it would be preferable therefore to leave it open. However, even if use of a language could be through the medium of an interpreter, it is self-evident that a person can only speak one language at a given time and cannot simultaneously speak two separate languages. The likening by the Court of Appeal of the simultaneous interpretation in this case to a situation where a judge “used English for one part of her summing-up and Chinese for another part, for example, when reciting direct quotations of evidence, as sometimes happens in trials where the judge and jury are all bi-lingual” is inapt. That possibility is alluded to in HKSAR v Kong Lai Wah (above) but, here, the judge was not bilingual and she did not recite any quotations of evidence in Chinese. 54. One might add, in this context, that it is most unlikely that a monolingual English speaking judge will ever properly be said to be using Chinese in the course of court proceedings. This would be true even if they were to use a widely understood Chinese word or phrase in the proceedings. Such de minimis use of a Chinese word or phrase here or there would not be a use of Chinese as such. Instead, it would be the use of another language because it has a meaning generally understood by English speakers. In the same way, one would not regard the judge’s utterance of a few random words in, say, French (for example, déjà vu or fait accompli) as constituting the judge’s use of French as the language of the proceedings. 55. More importantly, however, the essential flaw in the Court of Appeal’s approach in reliance on the OLO is that, even if the arrangement for simultaneous interpretation were compliant with the OLO, it does not follow that such compliance necessarily precludes a complaint of unfairness in the trial process or inconsistency with the principle of open justice. That the Court of Appeal appear to have taken this approach is apparent from their view that “[i]n answer to the systemic challenge, we cannot see any impediment in law for the judge to have permitted the official court interpreter to provide a Chinese translation of her English summing-up to jurors”. In summary, their reasoning was thus: the OLO permitted the judge to use Chinese via simultaneous interpretation; the English transcript of the summing-up discloses no misdirection to the jury; the interpreter was of such a high calibre that it can be assumed her interpretation of the summing-up was entirely accurate; therefore, there can be no complaint about the jurors being so directed in Chinese. 56. That analysis is problematic for the reasons set out in Section C.3 below addressing the question of whether the arrangement was consistent with the appellant’s right to a fair trial and the principle of open justice. The Court of Appeal thought that it was, in part in reliance on the OLO. However, as I have endeavoured to explain above, the mere fact that the arrangement may have been compliant with the OLO does not obviate the need to consider the wider issues of fair trial and open justice. Contrary to the Court of Appeal’s view, therefore, the OLO is not a complete answer to the systemic challenge to the arrangement raised by the appellant. 57. Finally, I would also note that the Court of Appeal’s reasoning assumes that the jury were entirely bilingual. As this Court observed in HKSAR v Chan Ka Chun, it may be speculative to assume that all jurors in a trial conducted in English are native Cantonese speakers.[40] Although the request for a Cantonese interpreter may support this assumption, there was never any inquiry to confirm that the assumption was in fact justified. A red flag having been raised as to the jury’s comprehension of the language of the proceedings, it would have been at least prudent to inquire not only as to the perceived difficulties in English but also to confirm that interpretation into Cantonese as an alternative would obviate any such difficulties. At that stage, the only other interaction between the members of the jury and the judge would appear to have been in English when they were being sworn. C.3 Problems with the arrangement 58. The question at the crux of the appeal is whether the arrangement was consistent with the appellant’s right to a fair trial. It is the appellant’s case that the arrangement did not result in a fair trial, whilst the respondent’s case is that there was no irregularity in the arrangement so as to deprive the appellant of a fair trial. The arrangement adopted by the judge was, as the Court of Appeal recognised, “unusual”[41] and, according to the evidence of the very experienced Senior Court Interpreter who was providing interpretation during the trial, “unprecedented”.[42] Neither of those descriptions, accurate as they are, means that the arrangement was necessarily incapable of providing a fair trial but they do call for a close examination of the particular procedure adopted to determine whether it was nevertheless consistent with the appellant’s right. 59. When so examined, however, there are various problems with the arrangement adopted by the trial judge for the interpretation of her summing-up. 60. First, the interpretation by the interpreter was simultaneous and not consecutive. As already indicated, there is a significant difference between these two types of interpretation. Consecutive interpretation allows all listeners to hear the statement of a speaker in the original language used and also the translation as spoken by the interpreter. Bilingual listeners will be able immediately to detect any errors in the translation and counsel might be able to alert the court to such errors. Simultaneous translation, being rendered at the same time as the original spoken material, does not allow a listener to hear both versions. Instead, a listener can primarily only focus on one or other version of the speech and, in the case of someone using a headset to listen to the interpretation, only the interpretation.[43] Errors of translation cannot be detected immediately without recourse to some record of the speech in the original language and in translation. Similar observations as to the preference for consecutive interpretation over simultaneous interpretation were made by the Supreme Court of New Zealand in Abdula v R,[44] a case which concerned the issue of the standard of interpretation required to comply with a defendant’s fair trial right under the New Zealand Bill of Rights Act 1990. 61. Secondly, in the context of a trial by jury, the provision of a simultaneous translation of the judge’s summing-up to some members of the jury, with others listening to the original English summing-up, necessarily means that the members of the jury will not all have been provided with the same summing-up. Regardless of the quality of the interpretation provided, the decision making process that involves the jury listening to the instructions provided in the judge’s summing-up will have involved some jurors processing and reacting to the English summing-up and some processing and reacting to the Chinese interpretation of that summing-up. The conclusions they reached by means of one linguistic route rather than the other, for example in relation to the inferences to be drawn, might well have been influenced by the subtleties of difference in language. As was observed in HKSAR v Chan Ka Chun, meaning, sometimes difficult in one language on its own, may become elusive in translation and, in mistranslation, unattainable.[45] 62. Thirdly, there is no way to assess what the jury members who listened to the translation of the judge’s summing-up actually heard because there is no recording of the interpreter’s translation and, consequently, no transcript of that translation. This is to be contrasted with the transcript of the English summing-up as pronounced by the judge. Consistent with the status of the Court of First Instance as a superior court of record[46] and as required by s.79(1) of the Criminal Procedure Ordinance (Cap.221),[47] there is an official record of the court proceedings which a defendant has a right to inspect and copy.[48] This record is kept in one or both of the official languages.[49] In the present case, there is only a transcript in English of the recording of the proceedings including the evidence, speeches and judge’s summing-up. Any question as to possible misdirection of the jury can, indeed must, be addressed by reference to that official transcript. Insofar as consecutive translation of evidence occurs during a trial, because of the nature of that style of interpretation, there will be a recording of the translation: cf. the video record of interview in HKSAR v Chan Ka Chun, which enabled a comparison between the English translation and the original Chinese to determine whether there were any material inaccuracies.[50] 63. These problems, particularly the second and third, give rise to a concern whether the arrangement was consistent with the principle of open justice. As this Court has previously stated, in a system governed by the rule of law, it is axiomatic that adjudicative processes must be fair and impartial and observably so: justice must not only be done, it must be seen to be done.[51] All the more so is this the case when the personal liberty of a defendant in a criminal trial is at stake. The absence of a record of what might have been said to the jury that led to their verdict convicting a defendant is inconsistent with that principle, which is one of the “bedrocks of the administration of criminal justice”,[52] since consistency with that principle requires that “[t]he whole direction must be by the judge in the full light of publicity”.[53] C.4 The Court of Appeal’s reasoning 64. As already indicated above, the Court of Appeal’s reasoning for concluding that the arrangement did not deprive the appellant of a fair trial, adopted by the respondent in this appeal, was essentially that: (1) through the simultaneous interpretation of her summing-up, the judge was using Chinese within the meaning of s.5(1) of the OLO (CA Reasons for Judgment at [42]-[43]); (2) the appellant was unable to point to any misdirection in law by the judge in the English transcript of her summing-up, including her directions as to the drawing of inferences (CA Reasons for Judgment at [44]-[45]); and (3) there was no material risk that the interpreter may have misinterpreted something in the summing-up which thereby undermined a fair trial of the appellant (CA Reasons for Judgment at [46]-[49]. 65. As to (1), the essential flaw in that analysis has been identified above in Section C.2. Even assuming the OLO permitted the judge to use Chinese via the medium of the interpreter, that cannot mean that the consequences of the arrangement, insofar as they might have impacted on the fairness of the trial or consistency with the principle of open justice, can be wholly ignored. 66. In my view, the Court of Appeal’s reasoning, at (2) and (3), that the appellant could not point to any misdirection in law in the English summing-up and that the interpreter could be assumed to have translated the summing-up accurately, does not provide an answer to the problems identified in Section C.3. Regardless of the interpreter’s skill and ability, it remains the fact that the jury members were not all receiving the same summing-up from the same source in the same language and, further, there is simply no independent means to verify the accuracy of the translation as there is no record of the Chinese version of the summing-up as interpreted by the interpreter. 67. The Court of Appeal may well have been justified in giving weight to the interpreter’s lengthy experience in the Judiciary and also with this judge in particular, the fact the interpreter was conscious of the need to translate for the jurors as well as the appellant, that the judge had provided her with written notes for portions of the summing-up and that the judge’s summing-up occupied a relatively short time. However, the “exceptional” quality of interpretation services in Hong Kong generally[54] and the competence, experience and conscientiousness of the particular interpreter engaged in this case do not answer the criticism that the arrangement resulted in some members of the jury receiving a different set of instructions by way of summing-up to that received by the jurors who listened to the judge address them in English. Nor does it answer the criticism that the arrangement did not ensure that the interpreter’s translation of the summing-up was recorded and that there was a proper record of it which could be reviewed. Open justice requires that justice be seen to be done, not assumed to have been done. Finally, although the interpreter’s competence is in no way doubted, simultaneous translation must, of necessity, be more onerous for an interpreter than consecutive translation, since the interpreter has the ability to control the speed of the dialogue when engaged in the latter but not the former.[55] It remains the fact that “even Homer nods”[56] and that possibility renders the problems of a lack of a record of what was spoken by the interpreter all the more acute. 68. The Court of Appeal’s reference to the time occupied by the judge’s summing-up being short so that there was therefore no risk of misinterpretation by the interpreter[57] ignores the time she was also engaged on the penultimate day of the trial (Monday, 20 June 2016) in translating the closing speeches of the prosecution and defence counsel. Whilst this may or may not have placed such an additional burden on the interpreter as to cause the accuracy of her translation of the summing-up to diminish, it impacts upon the Court of Appeal’s reasoning that the risk of misinterpretation was immaterial. 69. The Court of Appeal rejected the argument that a lack of a record of the interpreter’s translation of the judge’s summing-up was an answer to the competence, experience and conscientiousness of the interpreter.[58] However, the authorities cited by the Court of Appeal are not, with respect, a compelling answer in the context of this case. 70. HKSAR v Gutierrez[59] concerned a Spanish-speaking Venezuelan on trial for trafficking in a dangerous drug. At the trial, the defendant was assisted by a court-appointed Spanish interpreter and another Spanish interpreter assigned by the Director of Legal Aid. The defendant appealed alleging that the lack of a dockside audio recording of the interpretation of proceedings to her deprived her of a fair trial. The Court of Appeal dismissed her application for leave to appeal against conviction holding that there was no right for a defendant to be provided with a recording of the dockside translation of exchanges between an interpreter and the defendant and that “[w]hat is required is that the interpretation be of sufficient quality for the defendant to be able to understand the proceedings and conduct his defence effectively.”[60] The discussion in HKSAR v Gutierrez as to the standard of dockside interpretation to be provided to a defendant is distinguishable from the present case where the issue is different and concerns the absence of the record of the summing-up to a few (or some) members of the jury as the decision-making body. 71. Similarly, the decision of the British Columbia Court of Appeal in R v Titchener,[61] to which the Court of Appeal referred, is likewise distinguishable. That case involved evidence given by two deaf witnesses and translated into English by an interpreter who understood sign language. The argument that the absence of a video record of the evidence given by sign language entitled the appellant to a new trial was rejected. There is a clear difference between that situation and the present case. In Titchener, the evidence as received by the jury was in English, rendered by the interpreter, who translated the questions into sign language and the witnesses’ answers in sign language into English. A second interpreter was present who monitored the interpretation and testified that it was accurate. No issue of accuracy therefore arose and the court record consisted of the transcript of the words of the interpreter in English. But, more relevantly to this appeal, the issue in Titchener (as in Gutierrez) did not relate to the absence of the relevant record on which the jury might have based its verdict (as is the case here). 72. The Court of Appeal also cited the English cases of R v Le Caer[62] and R v Elliot[63] in support of the proposition that the absence of a transcript of a summing-up is not, of itself, a ground on which an appellant can succeed. That proposition may be accepted but there is a substantial difference between the absence of a transcript of a summing-up in those circumstances, in which the summing-up was pronounced in open court before the appellant and his legal representatives, who could therefore identify any parts of the summing-up that they wished to challenge as a misdirection, and the absence of a transcript of a translation of the summing-up that no-one other than the monolingual appellant and some members of the jury heard. Thus, the principle enunciated by Lord Widgery LCJ in Le Caer (at pp.730-731), in reliance on Elliot, was that the absence or insufficiency of a shorthand note of the trial is not a ground for saying the conviction is unsafe or unsatisfactory unless the appellant is able to show something to suggest that there was an irregularity at the trial or a misdirection in the summing-up. The authority of Elliot is a narrow one in that the appellant’s underlying complaint was directed to his statement from the witness box, which was “almost inaudible to the shorthand writer”,[64] not being properly recorded in the shorthand note. There is no indication the Deputy-Chairman, who read the appellant’s statement for him, was inaudible to the jury when he read the statement or gave his summing-up and the decision proceeded on the basis, applying the principle identified above, that there was nothing wrong in the conduct of the trial. 73. The respondent seeks to uphold the Court of Appeal’s conclusion by pointing to the jury’s note to the judge as indicating their conscientiousness in seeking to ensure no misunderstanding of the speeches or summing-up. It is argued that “any of the few jurors listening to the dockside Cantonese interpretation would have raised any suspected deficiency or misinterpretation therein had there been any.”[65] This, however, is a circular argument. If any of the jurors were struggling with English so as to need the interpretation into Cantonese, it is unlikely they would have identified any potential mistranslations on the part of the interpreter and certainly speculative to suggest they would have raised concerns about the accuracy of the translation of the English summing-up into Chinese. In any event, as already mentioned, a person listening to a simultaneous translation is unlikely to be able to hear both the English original and Chinese translation with the same degree of focus. Realistically, the listener will pay attention to one or other of the languages being spoken, but not both at the same time. 74. Ultimately, it is true the jury here were trying to act with diligence in alerting the judge to their language concerns and the judge’s approach was an attempt to address their concerns pragmatically.[66] There may be some merit in the suggestion that the defence ought to have raised an objection to the arrangement there and then but an absence of complaint at the time is not an absolute bar to raising this point on appeal.[67] It is not, with respect, an answer to the problems with the arrangement (identified in Section C.3 above) to say, as the Court of Appeal appear to have said, that the verdict must be correct because the case against the appellant was strong.[68] If instead the Court of Appeal were simply there suggesting that the strength of the prosecution case provided support for the contention that the interpreter must have interpreted the judge’s summing-up accurately, that suggestion does not provide a sufficient answer to the problems in question. C.5 Answering Question 2 75. The answer to Question 2 must inevitably be case specific. Where a concern or, as it has been described above, a red flag is raised as to the language ability of any member of the jury, the trial judge should make suitable inquiry to ascertain the extent of the problem, including the number of jurors who may be struggling to understand the proceedings. The aim of the inquiry must be to furnish the court with sufficient information to exercise its discretion, either under s.4(2) or s.25(1) of the JO, on the basis it has all material facts to hand. What particular factual matters will be relevant will necessarily vary from case to case depending on the particular circumstances. 76. Here, the judge was right to regard the note she received from the jury foreman as a red flag as to whether the discretion under s.25(1) of the JO should be exercised to discharge any juror or jurors. She rightly regarded the red flag as persisting (“… you’ve made me nervous now”) even after the jury foreman indicated they could proceed without the use of the headsets and in this she was proved right by the fact a few or some of the jurors did actually use the headsets. This concern should have led to a more thorough inquiry as to the precise nature and extent of the difficulty perceived. If the problem lay with only one juror, or even two, it might have been possible to continue with a jury of 6 or 5 members (cf. The Queen v Tam Chung-shing and Others and R v Chapman, referred to in Section C.1 above). As will be apparent, this appeal has proceeded on the basis of a rather unclear factual footing that “a few” or “some” of the jurors used the headsets. This does not enable the Court to come to any conclusion as to how many jurors had any difficulty understanding the proceedings in English, and to what extent. 77. In the context of the inquiries that might have been made, when the jury’s note was being debated between the judge and counsel, the appellant’s trial counsel engaged in this exchange with the judge: “Mr Boey: My Lady, just one matter. Obviously I take it from the question raised by the jury, that they were only concerned they may not fully understand or they may have misunderstood verily the part of the submissions. Just out of - - I just want to be prudent. Perhaps they can be asked whether they fully understand what has been going on so far? Court: They fully understand what? Mr Boey: They fully understand the evidence which has been presented so far. I just want to be prudent. Court: I don’t know whether it’s proper to ask them that. Mr Ryan: I would say no, my Lady. This doesn’t indicate that they haven’t understood the evidence so far. Court: No. They have understood it so far; they’re just a bit worried about being left without an interpreter for the speeches. Mr Ryan: That’s right. Court: So I think I’ll proceed on that basis. Mr Boey: Right. That was just my concern, that’s why I raised it with your Ladyship. Court: Well, I think that’s starting to get into the workings of a jury, which I don’t think my problem is. Mr Boey: Yes.” 78. Although the judge may have been correct in regarding the jury foreman’s note as not relating to the jury’s comprehension of the evidence given as at that stage of the trial, with respect to the judge, inquiring as to the state of the jury’s understanding of the language in which the evidence had been tendered would not have trespassed on the workings of the jury. That was an external question that it would have been proper to ask, if she had thought it relevant. Similarly, for the judge to ask how many of the jurors were concerned about their language ability in English would not have been inappropriate. Obviously, the inquiry would need to be conducted carefully, with suitable warnings, to avoid the jury inadvertently disclosing matters internal to their workings. 79. That inquiries of the jury would not violate the sanctity of the jury room is supported by the case of The Queen v Tam Chung-shing and Others.[69] The issue for the Court of Appeal in that decision was whether it would be proper to examine as witnesses, on the question of whether the jurors were asleep, the counsel and legal advisers who appeared for the appellants at trial. The Court of Appeal held that it would. More relevantly for the purposes of this appeal, Kempster JA stated: “The evidence of the jurors or some or one of them would not reveal what transpired in the jury-room, might be helpful and would be admissible: Ras Behari Lal v King Emperor; Tickner v Tickner (No.2) [1937] NZLR 802 at p.805.” [70] 80. With all relevant facts to hand, the judge would then exercise the discretion under s.4(2) or s.25(1) of the JO either to discharge a particular juror or not. Clearly, when the problem is identified at the outset before the juror is sworn, the prudent course may be to lean towards discharging the juror rather than seeking to mitigate the language problem. Where the language difficulty only comes to light in the course of the trial, other factors including the stage reached in the trial will be relevant. At that time, as already noted, it may be possible for the judge to discharge one or two of the jurors without any risk to a lawful verdict. 81. Where it is ascertained that more than two jurors have a language difficulty, the decision is less straight forward. The judge’s decision here to extend the dockside interpretation of the speeches and summing-up to the jury was one which necessarily precluded a juror who was using the headset to listen to the translation from hearing the original English summing-up. This should not have occurred. Instead, if the judge thought the fairness of the trial could be maintained by means of interpreting the summing-up into Chinese, it would have been preferable if consecutive interpretation were used. This would have allowed all jurors to hear the English summing-up and also the Cantonese translation of it. Everyone present in court would have also heard both versions of the summing-up, and there would be a recording of the translation, so that any errors in translation could be identified (ideally immediately but, if not, then certainly on review of the transcript). Whether consecutive interpretation would be suitable would depend on a number of factors, including the likely length of the summing-up, since this procedure would inevitably add considerably to the overall length of the trial. This judgment should not be understood as encouraging the adoption of this procedure, which is at best a mitigating measure for an unforeseen and unanticipated problem. 82. The discretion, whether under s.4(2) or s.25(1) of the JO, is to be exercised with the overriding purpose of securing a fair trial for the defendant. Clearly, in an ideal world, there will never be jurors with language difficulties. Where this unavoidably happens, it may still be possible to secure a fair trial by means of consecutive translation. Insofar as this might entail different jurors processing a different version of the summing-up (some relying on the original English, others the Chinese translation), given the particular case, this may not amount to a miscarriage of justice: cf. HKSAR v Chow Ho Yin, where McLachlin NPJ noted that not every departure from a norm constituting part of the fair trial right will require a new trial.[71] D. Conclusion and disposition of appeal 83. In the present case, given the problems with the arrangement adopted by the trial judge (set out in Section C.3 above), I would conclude that there is a material risk that the appellant did not receive, and was not seen to have received, a fair trial and that the judge’s exercise of discretion under s.25(1) of the JO did miscarry. 84. I should add that nothing in this judgment should be taken as criticism of the Senior Court Interpreter, who interpreted for the trial judge in this case, or indeed the trial judge herself, since this was an unusual situation and one which the judge sought to deal with pragmatically. At the end of the day, though, it would be to trivialise the problems with the arrangement to accede to the respondent’s invitation to uphold the Court of Appeal’s judgment dismissing the appellant’s appeal. 85. I would therefore allow the appeal and quash the appellant’s convictions on the three counts with which he was charged. Contrary to the submission of counsel for the respondent,[72] this is not a suitable case for the application of the proviso.[73] I would, however, also order a re-trial of the appellant on the charges, in view of the apparently cogent prosecution case against him and the fact, as confirmed by counsel for the respondent, that the evidence adduced at trial is still available, and notwithstanding the submissions of Mr Eric Cheung[74] on behalf of the appellant relying on the appellant’s age (69 years) and the length of time since the alleged offences took place (7 years). Mr Justice Lam PJ: 86. I agree with the judgment of Mr Justice Fok PJ. Lord Hodge NPJ: 87. I agree with the judgment of Mr Justice Fok PJ. Chief Justice Cheung: 88. The appeal is accordingly unanimously allowed and we answer the questions of law as set out above. In disposition of the appeal, we make the orders set out in paragraph [85] above. Mr Eric T.M. Cheung, Solicitor Advocate of ONC Lawyers, and Mr Jason Kung, instructed by ONC Lawyers, both assigned by the Director of Legal Aid, for the Appellant Mr Ned Lai SADPP and Mr Andy Lo SPP, of the Department of Justice, for the Respondent [1] [2020] HKCA 86, CACC 200/2016 (Macrae VP). [2] [2020] HKCA 938, CACC 200/2016 (Poon CJHC, Macrae VP and Zervos JA), Reasons for Judgment dated 16 November 2020 (“CA Reasons for Judgment”). [3] [2021] HKCA 195, CACC 200/2016 (Poon CJHC, Macrae VP and Zervos JA), Judgment dated 24 February 2021. [4] [2021] HKCFA 21, FAMC 16/2021 (Ribeiro PJ, Fok PJ and Stock NPJ). [5] Basic Law of the Hong Kong Special Administrative Region (“Basic Law”), Article 9; Official Languages Ordinance (Cap.5), s.3. [6] Basic Law, Article 87(2); Hong Kong Bill of Rights, Articles 10 and 11. [7] Secretary for Justice v Lam Tat Ming & Another (2000) 3 HKCFAR 168 at 178J. [8] OLO, s.3. [9] Law Reform Commission of Hong Kong, Report on Criteria for Service as Jurors (June 2010) at [1.17], [1.19]. [10] [2019] HKCA 953, CACC 327/2018, Judgment dated 20 August 2019 at [20]. [11] (1857) 8 El. & Bl. 54 at 80-81; 120 ER 20 at 30. [12] [1933] All ER Rep 723 at 726. [13] [1989] QB 868 at 871H. [14] (1883) 9 VLR(L) 191 at 193. [15] [1951] VLR 335 at 339. [16] (1993) 67 A Crim R 567 at 570-576. [17] [1989] 1 HKLR 42 at 50; and see also [1990] 1 HKLR 718 at 721-723. [18] R v Wong Wai Bor, unrep., Crim App No. 465/1986, Judgment dated 19 March 1987. [19] See this Court’s recent judgment in HKSAR v Lo Kin Man and Secretary for Justice v Tong Wai Hung [2021] HKCFA 37, FACC Nos. 6 & 7/2021 at [5]. [20] Printed Case for the Appellant at [42]; Respondent’s Printed Case at [31] and [39]. [21] Law Reform Commission of Hong Kong, Report on Criteria for Service as Jurors (June 2010) at [1.25]. [22] Law Reform Commission of Hong Kong, Report on Criteria for Service as Jurors (June 2010) at [1.33]; Practice Note [1964] HKLR 248; JO, s.36. [23] Unrep., CACC 411/2010, Judgment dated 28 December 2011. [24] Ibid. at [133]-[145]. [25] [1963] AC 859 at 867-868. [26] Printed Case for the Appellant at [47]-[50]. [27] JO, s.3. [28] [1990] 1 HKLR 718. [29] Ibid. at 723C-D. [30] (1976) 63 Cr App R 75. [31] In this context, the phrase “monolingual English speaking judge” is used to describe a judge unable to speak Chinese to a sufficient level to be able to conduct proceedings in that language. It does not, of course, necessarily indicate the judge is only able to speak one language, since they may well speak another language. [32] [2002] 2 HKLRD 39. [33] Ibid. at [26]. [34] Ibid. at [21]. [35] Respondent’s Printed Case at [40]-[47]. [36] [2009] 1 HKLRD 284. [37] Ibid. at [6]. [38] Respondent’s Printed Case at [45]-[47], [64]-[67]. [39] CA Reasons for Judgment at [42]-[43]. [40] [2018] HKCFA 31, (2018) 21 HKCFAR 284 at [33]. [41] CA Reasons for Judgment at [60]. [42] Ibid. at [30]. [43] See, in this context, HKSAR v Moala Alipate [2019] HKCA 537, [2019] 3 HKLRD 20 at [63]. [44] [2012] 1 NZLR 534 at [60]. [45] [2018] HKCFA 31, (2018) 21 HKCFAR 284 at [22]. [46] High Court Ordinance (Cap.4), s.12(1). [47] This provides: “A record (whether made by means of shorthand notes, by mechanical means or otherwise) kept in accordance with rules made under section 9, or such other record as the trial judge may direct, shall be taken of the proceedings at the trial of any person on indictment who, if convicted, is entitled or may be authorized to appeal to the Court of Appeal.” [48] Criminal Procedure Ordinance (Cap.221), s.79(2) and s.79(4). [49] High Court Civil Procedure (Use of Language) Rules (Cap.5C), rule 7. [50] [2018] HKCFA 31, (2018) 21 HKCFAR 284 at [14]. [51] See: HKSAR v Md Emran Hossain (2016) 19 HKCFAR 679 at [21], citing Hobbs v CT Tinling & Co Ltd [1929] 2 KB 1, R v Abdroikov [2007] 1 WLR 2679 and Davidson v Scottish Ministers (No.2) [2004] HRLR 34. [52] R v Karakaya [2005] EWCA Crim 346, [2005] 2 Cr App R 5 at [24]. [53] R v Willmont (1914) 10 Cr App R 173 at 175, approved and applied by the Supreme Court of Victoria in R v Thompson [2008] VSCA 144, (2008) 187 A Crim R 89 at [146]. [54] See HKSAR v Gutierrez [2020] HKCA 184, [2020] 2 HKLRD 720 at [63]. [55] See, in this context, Abdula v R [2012] 1 NZLR 534 at [60]. [56] Horace, Ars Poetica, line 359, “quandoque bonus dormitat Homerus”, conveying the meaning that even the cleverest person sometimes makes a mistake. [57] CA Reasons for Judgment at [49]. [58] Ibid. at [50]. [59] [2020] HKCA 184, [2020] 2 HKLRD 720. [60] Ibid. at [83]. In this context, one may contrast another Court of Appeal decision, HKSAR v Moala Alipate [2019] HKCA 537, [2019] 3 HKLRD 20, where the court concluded that the standard of dockside interpretation given to the defendant in the trial by an inexperienced Tongan interpreter was inadequate and resulted in a breach of the defendant’s fair trial rights. [61] (2013) BCCA 64. [62] (1972) 56 Cr App R 727. [63] (1909) 2 Cr App R 171. [64] R v Le Caer (1972) 56 Cr App R 727 at 730. [65] Respondent’s Printed Case at [84]. [66] CA Reasons for Judgment at [55]. [67] Ras Behari Lal and Others v The King Emperor [1933] All ER Rep 723 at 726. [68] CA Reasons for Judgment at [56]-[59]. [69] [1989] 1 HKLR 42. [70] Ibid. at 54. [71] [2019] HKCFA 52, (2020) 23 HKCFAR 1 at [20]. [72] Mr Ned Lai, SADPP, appearing with Mr Andy Lo, SPP. [73] Under s.83(1) of the Criminal Procedure Ordinance (Cap.221). [74] Solicitor Advocate, appearing with Mr Jason Kung.
Chief Justice Ma: 1. Among other important issues, this appeal addresses the effect of s.11[1] of the Hong Kong Bill of Rights Ordinance Cap 383 (“HKBORO”) when seen against non-derogable and absolute rights contained in Article 3 of the Bill of Rights[2] (we are concerned only with the aspect of cruel, inhuman or degrading treatment or punishment). I am in agreement with the judgment of Ribeiro PJ and with the conclusion (on the facts) that the present appeal should be dismissed. 2. I wish only to emphasize one point in his judgment. The width of s.11 of HKBORO (preserving the effect of any immigration legislation governing entry into, stay in and departure from Hong Kong when generally seen against the Bill of Rights) must be qualified, as a matter of statutory interpretation, by what is contained in the other parts of that Ordinance. Reference is made in the judgment of Ribeiro PJ to s.5. The conclusion (in para 115 below) that s.11 “must be understood to exclude the application of HKBORO and BOR in relation to the exercise of powers and the enforcement of duties under immigration legislation regarding persons not having the right to enter and remain in Hong Kong except insofar as the non-derogable and absolute rights protected by BOR Art 3 are engaged”, is therefore a principled one, dependent on a true and purposive construction of the relevant statutory provisions. It is also consistent with an approach that recognizes the importance placed in Hong Kong on non-derogable and absolute rights. The approach of the respondents that a person (not having the right to be in Hong Kong) was liable to be deported to a place even where it could manifestly be demonstrated that he would be subject to cruel, inhuman or degrading treatment or punishment in that place, was a deeply unattractive submission. Mr Justice Chan PJ: 3. I agree with the judgment of Mr Justice Ribeiro PJ and would like to add just a few words on the construction of s.11 of the BORO. 4. Section 2(2) of the BORO provides that the BOR is subject to Part III which includes s.11. Section 11 disapplies the BORO in the case of persons who have no right to enter and remain in Hong Kong, but this is restricted to the exercise of the Director’s powers and discretions under immigration legislation governing entry into, stay in and departure from Hong Kong. 5. One of the central issues in this case is the scope of this reservation. Notwithstanding the language of s.11, I do not accept that it can have the effect (as submitted by the Director) of denying persons having no right to enter and remain in Hong Kong all the rights under the BOR. Section 11 must be construed in its context, adopting a generous and purposive approach. (See Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4.) 6. The context relevant to the construction of s.11 includes the purpose and object of the BORO. This Ordinance was enacted for the purpose of implementing a treaty obligation by incorporating into the domestic law of Hong Kong the provisions of the ICCPR as applied to Hong Kong and is aimed at providing for the protection of these fundamental human rights, which are now entrenched by BL art 39. The relevant context also includes the other provisions in the BORO, in particular s.5, and the nature and substance of the rights which are to be affected. 7. Some of the rights protected by the BOR are, by reason of their nature and the consequence of their violation, absolute while other rights are, either expressly or by implication, susceptible to lawful restrictions which must satisfy the necessity and proportionality requirements. In the present case, we are only dealing with art 3 (the right to freedom from torture or cruel, inhuman or degrading treatment or punishment) which is absolute. In Soering v United Kingdom (1989) 11 EHRR 439, para.88, the European Court of Human Rights (having regard to art 15 of the European Convention on non-derogation) referred to art 3 of the European Convention (the equivalent of BOR art 3) as an “absolute” prohibition on torture, etc. Similarly, in R (Ullah) v Special Adjudicator [2004] 2 AC 323, para.40, Lord Steyn described this right as “absolute”. In the BORO, s.5 (which reflects ICCPR art 4 and the European Convention art 15) provides that art 3 (among other rights) is not derogable even in times of public emergency threatening the life of the nation. This highlights the importance of art 3 as an absolute and non-derogable right. In my view, this is a very material consideration in the construction of s.11. 8. Thus, when s.11 is construed in its context, I do not believe that it could have been the intention of the legislature that persons having no right to enter and remain in Hong Kong, while undoubtedly subject to immigration controls, would, by s.11, be deprived of the absolute right under art 3 which is also stated as non-derogable under s.5. Such a construction would be contrary to the purpose and object of incorporating ICCPR into our domestic law and incompatible with s.5. 9. I should add that it does not necessarily follow from the conclusion that s.11 does not preclude reliance on art 3 by persons having no right to enter and remain in Hong Kong that persons within this category can rely on the other rights which are also stated as non-derogable under s.5(2). There can be reasons for their inclusion in s.5(2) (e.g. art 7 may be considered as irrelevant to the legitimate control of the state of national emergency and art 15 as impossible for derogation, see General Comment No. 24). Whether these persons can rely on these other rights notwithstanding s.11 has to be decided according to the circumstances of each case. Mr Justice Ribeiro PJ : 10. This appeal raises important issues concerning the constitutional validity, scope and effect of the reservation concerning immigration legislation contained in section 11 of the Hong Kong Bill of Rights Ordinance[3] (“HKBORO”). In particular, it raises issues regarding the effect of that reservation in relation to those articles of the Bill of Rights (“BOR”) which provide protection against double jeopardy and against cruel, inhuman or degrading treatment or punishment. The appellant seeks to challenge the validity of a deportation order made against him, invoking those rights. A. The course of events 11. On 11 December 1991, the appellant, a Nigerian national, travelled to Hong Kong from Nepal and was arrested at the airport for drug trafficking. He was then aged 27. He was convicted and sentenced to 24 years’ imprisonment. 12. While serving his sentence, he unsuccessfully made several applications to the Hong Kong and British Governments to be allowed to serve his sentence in Nigeria. However, in 1998 he desisted when he learned of a new law in Nigeria, namely, section 22 of the National Drug Law Enforcement Agency Act (“the Nigerian law”),[4] which provides as follows: (1) Any person whose journey originates from Nigeria without being detected of carrying prohibited narcotic drugs or psychotropic substances, but is found to have imported such prohibited narcotic drugs or psychotropic substances into a foreign country, notwithstanding that such a person has been tried or convicted for any offence of unlawful importation or possession of such narcotic drugs or psychotropic substances in that foreign country, shall be guilty of an offence of exportation of narcotic drugs or psychotropic substances from Nigeria under this subsection. (2) Any Nigerian citizen found guilty in any foreign country of an offence involving narcotic drugs or psychotropic substances and who thereby brings the name of Nigeria into disrepute shall be guilty of an offence under this subsection. Persons convicted are made liable to imprisonment for a term of five years without option of a fine and their assets made liable to forfeiture. 13. On 5 July 1999, the Secretary for Security (“the Secretary”) issued a deportation order against the appellant under section 20(1)(a) of the Immigration Ordinance.[5] Although no destination is specified, it is clear that deportation under the order would be to Nigeria. 14. As the date of his release neared, the appellant applied on 7 September 2006 to the United Nations High Commissioner for Refugees in Hong Kong claiming refugee status, citing fear of being subjected to double jeopardy by prosecution under the Nigerian law. His application was rejected in December 2007. In March 2007, he also lodged a claim under the Convention Against Torture which is being separately pursued. 15. On 27 December 2007, the appellant was released from prison for good behaviour after having served two-thirds of his sentence. He was, however, immediately placed in administrative detention under section 32 of the Immigration Ordinance pending his removal from Hong Kong. 16. On 25 July 2008, the appellant brought judicial review proceedings to challenge the validity of both the deportation order and his administrative detention on constitutional grounds. 17. He was released on recognizance on 23 July 2008, a few days after the Court of Appeal had held in a different case[6] that detention under section 32 violated BOR Art 5(1)[7] because the grounds and procedure for detention were not sufficiently certain and accessible. B. The grounds of the challenge 18. The appellant challenges the deportation order on the basis that, if deported to Nigeria, he will face a serious risk of prosecution and punishment under the Nigerian law for the same conduct – drug trafficking – which had led to his conviction and incarceration for 16 years in Hong Kong. Execution of the deportation order, he submits, would violate his constitutionally protected rights against being subjected to double jeopardy and against being subjected to cruel, inhuman or degrading treatment or punishment (“CIDTP”). 19. The provisions in the BOR relied on by the appellant have the status of constitutionally guaranteed rights by virtue of Article 39 of the Basic Law which materially provides: “Article 39 The provisions of the International Covenant on Civil and Political Rights ... as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region. The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law. Such restrictions shall not contravene the provisions of the preceding paragraph of this Article.” 20. It will be necessary to consider more closely the provisions of Article 39, but for the present, it suffices to note that the appellant’s first ground of challenge (“ the double jeopardy ground”) is founded on Article 11(6) of the BOR which reflects Article 14(7)[8] of the International Covenant on Civil and Political Rights (“ICCPR”)[9] and provides: “BOR Art 11(6) No one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of Hong Kong.” 21. The second ground of challenge – based on the prohibition of cruel, inhuman or degrading treatment or punishment (“the CIDTP ground”) – is founded on Article 3 of the BOR which reflects Article 7[10] of the ICCPR and relevantly states: “BOR Art 3 No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment…” 22. A third ground which is sought to be raised involves the contention that a rule prohibiting refoulement (a compulsory return) to face CIDTP constitutes a norm of customary international law (“CIL”) which has been incorporated into the common law of Hong Kong and provides an independent basis for nullifying the deportation order. I shall call this “the CIL ground”. 23. The appellant’s challenge to the lawfulness of his detention need not be dealt with on this appeal. Reyes J[11] held that such detention was unlawful because he was bound by the Court of Appeal’s decision in A (Torture Claimant) v Director of Immigration.[12] Both in the Court of Appeal[13] and before this Court, the respondents have not sought to upset that conclusion. The Court was informed, however, that the correctness of the abovementioned decision is subject to challenge in a pending case.[14] Judgment was in fact handed down by the Court of Appeal on the first day of the hearing of this appeal. This Court was not addressed on it and I say nothing about that decision in this judgment. It is unnecessary to discuss criticisms made in the Court of Appeal of certain alternative grounds relied on by Reyes J. C. The decisions in the Courts below C.1 The double jeopardy ground 24. Both Reyes J[15] and the Court of Appeal[16] accepted that if deported to Nigeria, the appellant would face what was termed “practical double jeopardy”. 25. Fok J[17] (with whom the other members of the Court of Appeal agreed), citing Yeung Chun Pong v Secretary for Justice in the Court of Appeal,[18] distinguished between two aspects of the rule against double jeopardy. First, there is the common law autrefois convict (or autrefois acquit) plea in bar which is a defence against a subsequent prosecution and which only arises in the narrowly defined situation where the elements of the second offence are the same as or included in the original offence. Secondly, there is the wider common law rule against double jeopardy whereby the Court has power to stay proceedings as an abuse of process if the subsequent charge involves an attempt to re-prosecute a person previously convicted or acquitted on the same or substantially the same facts. That distinction has been accepted in this Court.[19] 26. While the Court of Appeal held that the appellant’s situation did not give rise to a plea of autrefois convict, it was accepted that his circumstances brought him within the wider double jeopardy concept since any potential liability under the Nigerian law would arise out of substantially the same facts relating to his drug-trafficking as had led to his conviction and punishment in Hong Kong. 27. Notwithstanding that conclusion, Reyes J[20] and the Court of Appeal[21] both decided that the appellant could not in law invoke the protection of BOR Art 11(6) against execution of the deportation order because such protection has been precluded by section 11 of HKBORO which provides: “As regards persons not having the right to enter and remain in Hong Kong, this Ordinance does not affect any immigration legislation governing entry into, stay in and departure from Hong Kong, or the application of any such legislation.” (“section 11”) 28. The appellant was a person “not having the right to enter and remain in Hong Kong” so that the deportation order, having been made under section 20(1)(a) of the Immigration Ordinance, was held to be unaffected by the provisions of HKBORO, including BOR Art 11(6). 29. Reyes J[22] and the Court of Appeal[23] were again ad idem in holding that a second reason for concluding that the appellant could not rely on BOR Art 11(6) was that its provisions only provide protection against double jeopardy within a single state or jurisdiction and do not operate transnationally. 30. Contrary to Reyes J’s view, the Court of Appeal held that a third reason exists for concluding that BOR Art 11(6) does not avail the appellant. It decided that BOR Art 11(6) prohibits: “...a subsequent prosecution for the same offence and not one for the same actions, thereby restricting the protection to a situation in which the strict plea of autrefois acquit or autrefois convict would be available but not to one in which the wider principle of double jeopardy would be available.”[24] 31. Reyes J, had rejected this narrower view on the basis that protections under the Covenant should receive a generous construction.[25] C.2 The CIDTP ground 32. As we have seen, BOR Art 3 lays it down that “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment…” 33. Reyes J and the Court of Appeal[26] were both of the view that there is no basis in the present case for suggesting that the appellant faces any risk of torture. As Reyes J stated (having considered the definition of “torture” contained in the Convention Against Torture[27]): “A person who is tried twice for the same offence is not in an analogous position to someone on whom a state official intentionally inflicts physical or mental pain.”[28] 34. Mr Richard Gordon QC, appearing[29] for the appellant, does not seek to suggest otherwise. The case has therefore been argued on the footing that, given the risk of prosecution under the Nigerian law, deporting the appellant to Nigeria would amount to CIDTP prohibited under BOR Art 3. 35. Reyes J recorded a concession made on behalf of the respondents that Section 11 does not displace reliance on BOR Art 3 as follows: “Mr Cooney also very properly accepts that the reservations to the application of the HKBORO and ICCPR in relation to immigration legislation do not apply where HKBORO Art 3 and ICCPR Art 7 are concerned. This is because the injunction against inflicting torture or other forms of inhuman or degrading treatment are peremptory norms of customary international law. It is not possible for a state to derogate from those norms.”[30] 36. His Lordship therefore went on to consider the facts and concluded that execution of the deportation order exposing the appellant to a risk of being re-prosecuted and punished under the Nigerian law would constitute CIDTP. I return later[31] to a consideration of those facts. 37. The Court of Appeal reversed Reyes J on two grounds, one legal and the other factual. It held first, that as a matter of law, the concession had been wrongly made and that Section 11 precludes reliance on BOR Art 3. While it was clear that prohibition of torture was itself jus cogens, the Court of Appeal held that it had not been established that the same is true of the prohibition against CIDTP, much less true in relation to refoulement to CIDTP.[32] The Court of Appeal went on to hold that even if the prohibitions stipulated by BOR Art 3 are jus cogens as a matter of CIL, section 11 still prevails, excluding reliance on that Article by persons who have no right to enter and remain in Hong Kong in circumstances covered by the section. It held that this was so because the Court, operating at the domestic level, is bound to apply Article 39 of the Basic Law and section 11 regardless of what the position might be on the international plane.[33] 38. Secondly, the Court of Appeal disagreed with Reyes J on the facts and held that the appellant’s circumstances did not disclose anything approaching the level of ill-treatment necessary to constitute CIDTP. It accordingly held that BOR Art 3 did not avail the appellant in his challenge to the deportation order. C.3 The CIL ground 39. The CIL ground involving the asserted existence of a CIL norm prohibiting refoulement to face CIDTP[34] was not raised below. It is sought to be argued for the first time in this Court. C.4 The remitter issue 40. Mr Gordon also raises for the first time in this Court a question relating to what he describes as “a remedy”. He proposes that if the Court should not be satisfied that the facts relied on here and in the courts below constitute CIDTP, that the case should be remitted to the Director for him to consider whether CIDTP is made out on the basis of a different set of facts relating to conditions in Nigerian prisons which are said to be appalling. I shall refer to this as “the remitter issue”. D. The approach in this judgment 41. I propose in this judgment to deal: (a) in Section F below with the constitutionality of section 11; (b) in in Section G with the scope and effect of section 11; (c) in Section H with the consequences of the true construction of section 11; (d) in Section I with the double jeopardy ground; (e) in Section J with the CIDTP ground; (f) in Section K with the CIL ground; and finally (g) in Section L with the remitter issue. E. A municipal law question 42. Before proceeding to deal with each of those issues, a preliminary matter, rightly emphasised by the respondents, ought to be addressed. While certain provisions of the ICCPR will have to be examined as part of the context, the questions with which we are concerned are to be resolved under the domestic law of Hong Kong and not by any purported direct application the provisions of that treaty or by any purported adjudication of an issue on the plane of international law. 43. It has long been established under Hong Kong law (which follows English law in this respect), that international treaties are not self-executing and that, unless and until made part of our domestic law by legislation, they do not confer or impose any rights or obligations on individual citizens.[35] It is a principle of construction that where a domestic statute is ambiguous and is capable of bearing different meanings which may in turn conform or conflict with the treaty, the court will presume that the legislature intended to legislate in accordance with applicable international treaty obligations.[36] But where the statute is clear, the court’s duty is to give effect to it whether or not that would involve breach of a treaty obligation.[37] It is furthermore clear that the courts do not have jurisdiction to adjudicate upon rights and obligations arising out of transactions between sovereign states.[38] 44. In a passage which addresses all of the foregoing points in the context of the European Convention on Human Rights (“ECHR”), Lord Hoffmann stated: “... the Convention is an international treaty and the ECHR is an international court with jurisdiction under international law to interpret and apply it. But the question of whether the appellants' convictions were unsafe is a matter of English law. And it is firmly established that international treaties do not form part of English law and that English courts have no jurisdiction to interpret or apply them: J H Rayner (Mincing Lane) Ltd v Department of Trade and Industry [1990] 2 AC 418 (the International Tin Council case). Parliament may pass a law which mirrors the terms of the treaty and in that sense incorporates the treaty into English law. But even then, the metaphor of incorporation may be misleading. It is not the treaty but the statute which forms part of English law. And English courts will not (unless the statute expressly so provides) be bound to give effect to interpretations of the treaty by an international court, even though the United Kingdom is bound by international law to do so. Of course there is a strong presumption in favour of interpreting English law (whether common law or statute) in a way which does not place the United Kingdom in breach of an international obligation. As Lord Goff of Chieveley said in Attorney General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109, 283: ‘I conceive it to be my duty, when I am free to do so, to interpret the law in accordance with the obligations of the Crown under [the Convention].’ But for present purposes the important words are ‘when I am free to do so’. The sovereign legislator in the United Kingdom is Parliament. If Parliament has plainly laid down the law, it is the duty of the courts to apply it, whether that would involve the Crown in breach of an international treaty or not.”[39] F. The appellant’s challenge to the constitutional validity of HKBORO section 11 F.1 The content of section 11 45. Section 11 provides: “As regards persons not having the right to enter and remain in Hong Kong, this Ordinance does not affect any immigration legislation governing entry into, stay in and departure from Hong Kong, or the application of any such legislation.” 46. Whether in any particular case section 11 has the effect of precluding someone’s reliance on a right protected by the BOR may raise questions of law and construction, as well as questions of fact. (a) Insofar as the Government asserts that section 11 has such effect, it bears the burden of satisfying the Court that factually and as a matter of law the person who seeks to rely on a relevant right is a person who does not have the right to enter and remain in Hong Kong. This is important because section 11 does not apply to Hong Kong permanent residents with a right of abode nor to Hong Kong residents and others who are lawfully entitled to be in Hong Kong. (b) The Government will also have to satisfy the Court that it is seeking, as against that person, lawfully to enforce duties or to exercise powers arising under immigration legislation which govern entry into, stay in and departure from Hong Kong and that such duties or powers are properly applicable on the facts. This is so since section 11 is inapplicable where other powers or duties are being exercised or enforced. (c) The person claiming protection will have to identify the BOR rights invoked and adduce evidence supporting his claim that such rights would be infringed if the Government were to proceed with its enforcement of the relevant duties or exercise of the relevant powers. If a section 11 power is exercised without engaging a protected right, obviously no issue as to constitutional protection arises. (d) If the Court is satisfied that in the case at hand, operation of the relevant provisions of the immigration legislation concerned does engage those rights, it next has to consider whether the rights potentially infringed, in the present case rights under BOR Art 3, are capable of being displaced by section 11. (e) This last question was raised by the Court in the light of section 5 of HKBORO examined below.[40] Prior to the present hearing, the argument had proceeded on the basis that section 11 must be construed as either having the narrow meaning contended for by the appellant or as overriding all the rights contained in the BOR, as the respondents contend. The question whether section 11 should instead be construed as overriding some, but not all, of the BOR rights assumed major importance at the hearing. In particular, the question arose as to whether section 11 is capable of displacing the constitutional protection provided by BOR Art 3. That is a topic to which I return in Section G. 47. In the present case, there is no dispute that the appellant is a person “not having the right to enter and remain in Hong Kong”, nor that the deportation order was made under section 20(1)(a) of the Immigration Ordinance which is a provision governing a person’s stay in or departure from Hong Kong. The Court of Appeal held that section 11 was triggered and that it precluded reliance by the appellant on either BOR Art 11(6) as protection against double jeopardy; or on BOR Art 3 as protection against being deported to face CIDTP. F.2 The elements of the appellant’s constitutional challenge 48. The appellant contends that section 11 is unconstitutional and must either be read down or severed from HKBORO altogether so that it does not preclude his reliance on the BOR rights invoked.[41] 49. His challenge proceeds on two alternative bases, each of which requires an examination of the interaction between (i) the reservation relating to immigration legislation (“the immigration reservation”) made by the United Kingdom Government when ratifying the ICCPR in 1976; (ii) Article 39 of the Basic Law; and (iii) section 11. 50. The immigration reservation was stipulated in the following terms: “The Government of the United Kingdom reserve the right to continue to apply such immigration legislation governing entry into, stay in and departure from the United Kingdom as they may deem necessary from time to time and, accordingly, their acceptance of Article 12(4) and of the other provisions of the Covenant is subject to the provisions of any such legislation as regards persons not at the time having the right under the law of the United Kingdom to enter and remain in the United Kingdom. The United Kingdom also reserves a similar right in regard to each of its dependent territories.” 51. The extension to Hong Kong of the ICCPR subject to the immigration reservation therefore meant that the Hong Kong Government reserved mutatis mutandis the right to continue to apply such immigration legislation governing entry into, stay in and departure from Hong Kong as it might deem necessary from time to time and, accordingly, that its acceptance of Article 12(4) and of the other provisions of the Covenant was subject to the provisions of any such legislation as regards persons not at the time having the right under the law of Hong Kong to enter and remain in Hong Kong. 52. Article 12(4) of the ICCPR provides: “No one shall be arbitrarily deprived of the right to enter his own country.” 53. The text of Article 39 of the Basic Law has been set out in Section B above. For the purpose of understanding the appellant’s constitutional challenge, it is sufficient to note that Article 39 provides that “The provisions of the [ICCPR] ... as applied to Hong Kong shall remain in force and shall be implemented through the laws of the [HKSAR]”. It is common ground (and plainly correct) that the words I have italicised refer to the original application of the Covenant to Hong Kong by the United Kingdom when it ratified the ICCPR in 1976 and declared that its acceptance extended to Hong Kong. Such application was obviously subject to the stipulated reservations, including the immigration reservation. 54. The third element relevant to the appellant’s constitutional challenge is section 11, the provision subject to such challenge. The respondents’ position is that enactment of the HKBORO, including section 11, was the manner by which the ICCPR was duly implemented through the laws of the HKSAR as mandated by Article 39. However, the appellant argues on two alternative bases that, far from implementing the Covenant, section 11 is unconstitutional because it goes much further than the immigration reservation and impermissibly purports to cut down on the rights guaranteed by Article 39 properly construed. F.3 The appellant’s first constitutional argument 55. The premise of the appellant’s first constitutional argument is that the scope of the United Kingdom’s 1976 immigration reservation, and thus the scope of such reservation “as applied to Hong Kong,” has long been misunderstood and given far too wide a meaning. The contention is that such reservation correctly understood: “...isaimedat preservingthestateofaffairsbywhichthosewhodonotconcurrently holdBritishcitizenshipdidnotenjoytherighttoenter andresideinthe UK(ie,theBritishIsles),notwithstanding thatart12oftheICCPR providesfor,interalia,theirrighttolibertyofmovement,theirfreedom tochoosetheirresidenceandtheirrightnottobearbitrarilydeprivedof therighttoentertheirowncountry.”[42] 56. The UK’s concern, so it is suggested, was that the ICCPR would be taken to cover all British territories as a single “country” so that a British subject who was not given the right to enter and reside in the UK (particularly a British Asian in East Africa[43]) might claim a right under Article 12(4) not to be arbitrarily deprived of the right to enter his own country.[44] 57. The appellant submits[45] that properly construed in the light of that purpose, the effect of the immigration reservation as extended in 1976 to Hong Kong (and to each of the other British territories then existing) was that: (a) the right to freedom of movement and of choice of residence within the territory of a state under ICCPR Art 12(1)[46] would be available “in respect only of his or her particular territory or colony – but not any other British territory”; (b) the right in Art 12(4) not to be arbitrarily deprived of the right to enter “his own country” would be available “only in respect of his or her particular territory or colony – but again not any other British territory”; and (c) “insofar as any other provision of the ICCPR implied a like right to that reserved against in respect of arts 12(1) and 12(4), the Immigration Reservation would apply likewise and to that extent (but to that extent only)”. 58. Thus, the argument runs, when Article 39 provides that the provisions of the ICCPR “as applied to Hong Kong” shall remain in force and be implemented through the HKSAR’s laws, it takes effect by applying the ICCPR to Hong Kong subject to the immigration reservation narrowly construed in the manner just described. Article 39 therefore does not authorise or permit any greater inroads into the ICCPR rights which it protects. 59. Section 11 is drawn (so it is argued) in much wider terms than permitted since it is not limited in the manner indicated above. It is therefore unconstitutional and, in approaching section 11 as if it faithfully reflects the immigration reservation, the Court of Appeal is said to have fallen into error. 60. The argument that section 11’s reach is too wide and therefore unconstitutional proceeds on the footing that the respondents’ construction is correct and that section 11 “trumps” all the provisions of the BOR, including BOR Art 3 which prohibits torture and CIDTP. As I have already indicated, the correctness of that construction was called into question by the Court and is discussed in Section G below. However, the appellant’s position is that any construction of section 11 which goes beyond the strictly narrow interpretation that he advocates exceeds what is authorised by Article 39, making section 11 unconstitutional in any event. 61. For the reasons which follow, I do not accept the appellant’s first constitutional argument. F.3.1 What is addressed by the reservation as applied to Hong Kong 62. In my view, the issues arising are not resolved by reference to what may have motivated the United Kingdom Government in 1976 when it laid down the immigration reservation while ratifying the Covenant, especially if adopting that approach involves ignoring the fundamental changes to Hong Kong’s legal order which have occurred during the intervening 36 years. 63. One may readily accept that the United Kingdom was anxious in 1976 to continue to enact and enforce laws aimed at preventing an influx into Britain of citizens of its colonies and dependent territories to whom it had chosen to deny a right of abode. An important objective of the immigration reservation from its own point of view would thus have been (as the appellant submits) to prevent such a person from claiming on the basis of ICCPR Art 12(4), that he had a right to enter United Kingdom as “his own country”. 64. However, to suggest that the immigration reservation must be construed as pursuing that limited objective, transplanted in some way to Hong Kong, makes little sense. Hong Kong was not faced in 1976 (or at any other time) with any threatened influx of British subjects from other British colonies or dependent territories who might, but for the immigration reservation, be able to claim a right to enter and reside in Hong Kong as their “own country”. There is no reason to regard the neutralisation of ICCPR Arts 12(1) and 12(4) as the exclusive or principal reason for applying the immigration reservation to Hong Kong. 65. On the other hand, it is a matter of notoriety that in the 1970’s, 1980’s and 1990’s, major efforts had to be made by the Hong Kong Government to fend off waves of illegal immigrants, numbering in the tens of thousands in some years, originating from the Chinese Mainland.[47] With a view to dealing effectively with such illegal immigrants and human traffickers (or “I.I.s” and “snakeheads”) as they were called, the Hong Kong Government adopted robust legal measures authorising removal and deportation with associated arrest and detention powers. The immigration reservation, operating in that context, was aimed at preventing illegal immigrants from seeking to resist such measures by relying on a range of potentially applicable ICCPR rights. 66. By way of example, in In re Hai Ho-tak and Cheng Chun-heung,[48] section 11 was relied on in response to an application to quash a removal order as a violation of BOR Art 1 (non-discrimination), Art 14(1) (privacy, etc), Art 15(4) (liberty of parents regarding children’s education), Art 20(1) (rights of children) and Art 22 (equal protection of the law). And in Vo Thi Do v Director of Immigration,[49] a test case involving 1,376 former residents of Vietnam, prolonged administrative detention was challenged as a violation of Art 3 (CIDTP) and Art 5 (liberty of the person). Numerous other cases have arisen where reliance was placed on Art 19 (family rights). 67. The language of the reservation as applied to Hong Kong has been treated as apt for dealing with such claims, making acceptance of Art 12(4) “and of the other provisions of the Covenant” subject to the provisions of existing legislation and any future legislation which the Government may deem necessary to enact to govern entry into, stay in and departure by persons who do not have the right to enter and remain in Hong Kong. There is no basis for accepting Mr Gordon’s submission that the immigration reservation was applied to Hong Kong with the narrow intention that it be centred on the right under ICCPR 12(4) to enter one’s “own country”. 68. The United Kingdom and Hong Kong Governments have acknowledged that the ICCPR reservations as extended to Hong Kong were targeted at local conditions and needs. Thus, a White Paper published in the UK on 26 September 1984 and reproduced by the Hong Kong Government in December 1984 in a document explaining aspects of the Joint Declaration stated: “The reservations entered by the United Kingdom in respect of the application of the Covenants to Hong Kong, which are also public, took account of the realities of the social and economic conditions in Hong Kong: for example, in relation to Hong Kong the United Kingdom made reservations relating to immigration and to the deportations of aliens.” 69. Moreover, when on 16 March 1990, the Hong Kong Government gazetted the draft HKBOR Bill 1990 and initiated a process of public consultation, it published a Commentary stating that the decision had been taken to introduce a draft Bill “giving effect in local law to the relevant provisions of the ICCPR, as applied to Hong Kong”. The Commentary explained that previously, the ICCPR had been implemented through a combination of common law, legislation and administrative measures, a system which: “... has not been static, but has evolved continuously through judicial interpretation of existing legislation and enactment of new laws; through developments in the common law; and through refinement of administrative practices.” 70. In other words, even before enactment of HKBORO, the application of the ICCPR in Hong Kong had not been statically linked to a 1976 policy, but had undergone a process of domestication, evolving in accordance with local circumstances. F.3.2 The reservation as applied in the HKSAR 71. The idea that the interpretation of the immigration reservation should be limited by a purposive construction founded on the United Kingdom’s immigration policy in 1976 appears even more incongruous when one takes into account developments accompanying the changes to Hong Kong’s legal order which took place on 1st July 1997. 72. The question of whether the provisions of the ICCPR should continue to apply in Hong Kong was specifically addressed by the Central People’s Government and the United Kingdom Government in the negotiations leading up to the Joint Declaration. Agreement that the ICCPR “as applied to Hong Kong shall remain in force” was eventually recorded in Annex I, section XIII of the Joint Declaration executed on 19 December 1984, coming into force on 30 June 1985. 73. HKBORO was enacted on 8 June 1991 and, along with other Ordinances as well as Orders in Council containing measures applied by the UK to Hong Kong, it was subjected to the vetting process prescribed by Article 160 of the Basic Law which materially states as follows: “Upon the establishment of the Hong Kong Special Administrative Region, the laws previously in force in Hong Kong shall be adopted as laws of the Region except for those which the Standing Committee of the National People's Congress declares to be in contravention of this Law. ...” 74. The Standing Committee gave specific consideration to whether the HKBORO should be adopted as part of the laws of the HKSAR or whether the whole or any part of it should be excluded as contravening the Basic Law. The role played by the Standing Committee under Article 160 and the vetting process as reported to the Legislative Council, were described in Democratic Republic of the Congo v FG Hemisphere Associates LLC.[50] 75. By its Decision adopted at the Twenty Fourth Session of the Standing Committee of the Eighth National People’s Congress on 23 February 1997, the Standing Committee set out (in Annex 1 to the Decision) a list of Ordinances and subordinate legislation found to be in contravention of the Basic Law and not adopted. It also set out in Annex II, a list of specified provisions of named Ordinances and subordinate legislation similarly excluded. Certain provisions of HKBORO[51] which are not presently material were listed in paragraph 7 of Annex II as excluded provisions, but section 11 and the remaining provisions of HKBORO were adopted as consistent with the Basic Law. 76. The stated objective of the Article 160 exercise (applicable generally to the laws previously in force in Hong Kong) was to bring such laws “into conformity with the status of Hong Kong after resumption by the People’s Republic of China of the exercise of sovereignty over Hong Kong as well as to be in conformity with the relevant provisions of the Basic Law.”[52] It is this process whereby HKBORO was adopted as part of the laws of the HKSAR, consistent with the Basic Law – and not the UK’s immigration policy in 1976 – that provides the operative legal context for the continued application of the ICCPR in the HKSAR. 77. The point is brought home by noting the content of BOR Art 8(4) which is the provision whereby ICCPR Art 12(4) was enacted in 1991 and adopted as part of the laws of the HKSAR in 1997. BOR 8(4) states: “No one who has the right of abode in Hong Kong shall be arbitrarily deprived of the right to enter Hong Kong.” 78. Thus, the BOR guarantee of the right to enter Hong Kong is limited to persons who have the right of abode in Hong Kong. There is no need to rely on section 11 to override any BOR right reflecting ICCPR Art 12(4)’s reference to “the right to enter his own country” which might otherwise be invoked by someone without a right of abode. F.4 The appellant’s second constitutional argument 79. The appellant advances an alternative challenge to the constitutionality of section 11 which runs as follows: (a) If the immigration reservation has a wider meaning which is coextensive with the terms of section 11 it “contravenes the object and purpose of the ICCPR and is null and void as a matter of public international law.” (b) The consequence is that “the reservation is severed from the instrument of ratification such that the author remains a party to the treaty without the benefit of the reservation.” (c) Article 39 therefore “did not incorporate the void reservation into domestic law (contrary to the finding of the Court of Appeal), and as such the HKSAR Government is not constitutionally permitted to breach the ICCPR as it applies to Hong Kong at international law.”[53] 80. The contention in sub-paragraph (a) above is based on Article 19(c) of the Vienna Convention on the Law of Treaties which provides: “A State may, when signing, ratifying, accepting, approving or acceding to a treaty, formulate a reservation unless ... the reservation is incompatible with the object and purpose of the treaty.” 81. The appellant argues that if the immigration reservation is read to mirror the terms of section 11 widely construed, the reservation would purport to disapply the entire ICCPR in relation to relevant provisions of immigration legislation applicable to persons not having the right to enter and remain in Hong Kong. It would purport to disapply even the prohibition against torture and CIDTP under BOR Art 3, thereby offending international law jus cogens norms and contravening the object and purpose of the Covenant.[54] 82. Since, so the argument runs, such a purported reservation is null and void, it is severed from the instrument of ratification.[55] In consequence, as a matter of domestic law: “...the ICCPR applies to Hong Kong without the Immigration Reservation. Thus the relevant articles of the ICCPR that may be engaged in ‘foreign cases’ are in fact available under the ICCPR applied to Hong Kong. It follows from this that HKBORO s 11 purports to restrict the rights available under the ICCPR ‘as applied to Hong Kong’, and is therefore unconstitutional by reference to arts 8, 11 and 39 (read together with art 41) of the Basic Law.”[56] 83. I do not accept this argument. F.4.1 Non-justiciable issues 84. For the reasons stated in Section E above, the alternative argument depends on propositions which are not justiciable in a municipal court. The appellant invites this Court to declare that, contrary to the belief of the United Kingdom Government (and everyone else, it would seem) when ratifying the Covenant in 1976, its immigration reservation was incompatible with the object and purpose of the treaty and therefore “null and void as a matter of public international law” requiring it to be “severed from the instrument of ratification.”[57] 85. As previously noted, the courts do not have jurisdiction to adjudicate upon rights and obligations arising out of transactions between sovereign states on the international plane. As Lord Oliver of Aylmerton stated in JH Rayner Ltd v Department of Trade and Industry:[58] “It is axiomatic that municipal courts have not and cannot have the competence to adjudicate upon or to enforce the rights arising out of transactions entered into by independent sovereign states between themselves on the plane of international law. That was firmly established by this House in Cook v Sprigg [1899] AC 572, 578, and was succinctly and convincingly expressed in the opinion of the Privy Council delivered by Lord Kingsdown in Secretary of State in Council of India v Kamachee Boye Sahaba (1859) 13 Moo PCC 22, 75: ‘The transactions of independent states between each other are governed by other laws than those which municipal courts administer: such courts have neither the means of deciding what is right, nor the power of enforcing any decision which they may make.’” 86. The Hong Kong courts therefore did not in 1976 and do not now have jurisdiction to pronounce upon the validity or invalidity of the UK’s ratification, with or without its immigration reservation, as a matter of public international law. 87. The appellant attempts to evade this difficulty by submitting: “Here, the Court is of course not purporting to pronounce upon the legal effect of the United Kingdom's instrument of ratification to the ICCPR (or even that of the People's Republic of China), but only upon the meaning of the words ‘the ICCPR as applied to Hong Kong’.”[59] 88. But it is impossible to see how the appellant’s argument can proceed unless the Court is persuaded precisely to pronounce upon the legal effect of the instrument of ratification – namely, that the reservation is void and must be severed from it as a matter of public international law – and then to project that legal consequence onto the interpretation of Article 39 thereby rendering section 11 unconstitutional. F.4.2 Section 11 regarded as valid as a matter of Hong Kong law 89. As a matter of Hong Kong law, the Hong Kong courts have invariably viewed section 11 (without qualifying it by any narrow construction) as consistent with the immigration reservation and with Article 39. This is a point equally relevant to the first limb of the appellant’s challenge. 90. Prior to 1st July 1997, the question arose in Wong King-lung v Director of Immigration,[60] as to whether the immigration reservation, taken to be reflected in the terms of section 11, was valid. Having noted that the ICCPR could be modified by a reservation provided it was not incompatible with the objects and purpose of the Covenant, Jones J held that section 11 was consistent with those aims. 91. In In re Hai Ho-tak and Cheng Chun-heung,[61] the Court of Appeal held that section 11 precluded reliance on BOR Art 14 (prohibiting unlawful interference with family life). Mortimer JA commented that: “Section 11 is an essential limitation on the general provisions of the international covenant brought about by the reality of Hong Kong's geographical position and economic success. It follows the United Kingdom's reservation to the international covenant's application to Hong Kong.” 92. As we have seen,[62] in preparation for the 1997 transition, acting pursuant to Article 160 of the Basic Law, the Standing Committee of the National People's Congress by its Decision[63] of 23 February 1997, disallowed certain presently immaterial provisions of HKBORO, but otherwise confirmed adoption of the rest of the Ordinance, including section 11, as part of the laws of the HKSAR at least prima facie[64] consistent with the Basic Law. 93. Since 1st July 1997, section 11 has been discussed on a number of occasions in this Court without anyone detecting any inconsistency between that provision and either the original immigration reservation or Article 39 of the Basic Law. (a) Thus, in Ng Ka Ling v Director of Immigration,[65] the Court took notice of a submission referring to “the fact that the ICCPR as applied to Hong Kong is subject to the reservations made by the United Kingdom upon signature and ratification of the ICCPR in May 1976”, including the immigration reservation, without demur. (b) In HKSAR v Ng Kung Siu,[66] having cited Article 39, Li CJ stated: “The Hong Kong Bill of Rights Ordinance (Cap 383), in fact provides for the incorporation of the provisions of the ICCPR into the laws of Hong Kong.” (c) And in Secretary for Justice v Chan Wah,[67] Li CJ stated: “Article 39 of the Basic Law provides among other things that the provisions of the International Covenant on Civil and Political Rights (ICCPR) as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region. The Bill of Rights Ordinance incorporates into the law of Hong Kong the provisions of the ICCPR as applied to Hong Kong.” 94. In Tam Nga Yin v Director of Immigration,[68] the Court was concerned with the question whether BOR Art 19(1)[69] was displaced by section 11. The majority[70] recognized that: “The effect of the reservation and s 11 is that the ICCPR and the Bill of Rights do not apply to and do not affect immigration legislation regarding persons not having the right to enter and remain in Hong Kong.”[71] But the Director’s argument for displacement was rejected on the basis that the case was not concerned with relevant immigration legislation, the majority concluding as follows: “Accordingly, the reservation and s 11, which have the effect of rendering the ICCPR and the Bill of Rights inapplicable to immigration legislation in relation to persons who do not have the right of abode in Hong Kong, cannot affect the matter.” 95. In Gurung Kesh Bahadur v Director of Immigration,[72] Li CJ (with whom the other members of the Court agreed) acknowledged that the immigration reservation was reflected in section 11: “The provisions of the International Covenant on Civil and Political Rights (the ICCPR) as applied to Hong Kong were implemented through the Hong Kong Bill of Rights Ordinance (Cap 383), which contains the Hong Kong Bill of Rights (the Bill). That Ordinance effects the incorporation of the ICCPR as applied to Hong Kong into our laws. See Shum Kwok Sher v HKSAR [2002] 2 HKLRD 793, (10 July 2002) para 53, HKSAR v Ng Kung Siu & Another (1999) 2 HKCFAR 442 at 455. The ICCPR as applied to Hong Kong was subject to the reservation, originally made by the United Kingdom, that immigration legislation as regards persons not having the right to enter and remain could continue to apply. It is unnecessary to set out the terms of the reservation in full since it is reflected in s 11 of the Hong Kong Bill of Rights Ordinance.” F.5 Conclusion as to the appellant’s constitutional challenge 96. For the foregoing reasons in my view, both limbs of the appellant’s challenge to the constitutionality of section 11 must fail. I therefore conclude that section 11 is consistent with Article 39 and constitutionally valid. I turn then to a consideration of the reach or scope of section 11 on its proper construction. G. The scope and effect of section 11 G.1 The central question 97. Section 11’s content and application have been examined in Section F.1 above. The central and controversial question concerning the reach of section 11 arises when one juxtaposes section 11 with section 5 of HKBORO. For convenience, I set out the terms of section 11 once more: “As regards persons not having the right to enter and remain in Hong Kong, this Ordinance does not affect any immigration legislation governing entry into, stay in and departure from Hong Kong, or the application of any such legislation.” 98. Section 5 relevantly states: Public emergencies (1) In time of public emergency which threatens the life of the nation and the existence of which is officially proclaimed, measures may be taken derogating from the Bill of Rights to the extent strictly required by the exigencies of the situation, but these measures shall be taken in accordance with law. (2) No measure shall be taken under subsection (1) that ... (c) derogates from articles 2, 3, 4(1) and (2), 7, 12, 13 and 15.” 99. Section 5(2)(c) therefore precludes derogation from BOR Art 3 relied on by the appellant. By the same token, BOR Art 11(6), also relied on by him, is not mentioned. 100. On its face, section 11 excludes all the provisions of HKBORO (and therefore all the rights contained in the BOR) without exception or qualification in relation to the persons and immigration legislation provisions within its ambit. However, sections 5 and 11 are provisions in the same Ordinance and it is obviously necessary when construing section 11 in order to ascertain its scope, to read it in the context of HKBORO as a whole. Thus, in addressing the question whether the legislative intention is that section 11 should override all BOR rights without exception, including BOR Art 3, it is of cardinal importance to note that section 5 provides that there can be no derogation from BOR Art 3 even in times of “public emergency which threatens the life of the nation”. 101. The central question for immediate purposes is therefore whether the legislature could have intended that section 11 should be allowed to preclude reliance on BOR Art 3 in respect of immigration legislation powers routinely exercised, while at the same time laying it down in section 5 that there can be no derogation from BOR Art 3 even in the time of a proclaimed public emergency which threatens the life of the nation. Does section 11’s exclusion of reliance on BOR Art 3 not constitute a derogation from BOR Art 3? Since section 5 prohibits derogation even in a time of public emergency, does it not suggest that a fortiori derogation from that Article is not allowed where no such emergency exists? If there is an apparent conflict between the two sections, which is to prevail? In seeking to answer these questions, the nature and interaction of the two sections and the nature of the rights protected by BOR Art 3 fall to be examined. G.2 The effect of section 11 102. It is perhaps worth emphasising that the present topic of discussion concerns merely the construction of section 11. There is no question of that section being unconstitutional. As I have previously concluded, in adopting the ICCPR as applied to Hong Kong, Article 39 applied the Covenant subject to the immigration reservation made at the time of the United Kingdom’s ratification. And as previously discussed, section 11 is consistent with that reservation. It follows that section 11 has the blessing of Article 39 and cannot be unconstitutional. Moreover, Article 154(2) of the Basic Law expressly authorises the HKSAR Government to “apply immigration controls on entry into, stay in and departure from the Region by persons from foreign states and regions”. The question under discussion is therefore whether section 11, properly construed, precludes reliance on BOR Art 3 when it disapplies HKBORO from affecting any immigration legislation governing entry into, stay in and departure from Hong Kong in relation to persons not having a right to enter or remain in Hong Kong. 103. Placing that question in a broader context, it may be noted that the European Court of Human Rights in Strasbourg (“ the Strasbourg Court”) has consistently taken as its starting-point, the proposition that under the ECHR: “Contracting States have the right, as a matter of well-established international law and subject to their treaty obligations including the Convention, to control the entry, residence and expulsion of aliens.”[73] 104. The House of Lords has taken the same view. Thus, in R (Saadi) v Secretary of State for the Home Department,Lord Slynn of Hadley stated:[74] “In international law the principle has long been established that sovereign states can regulate the entry of aliens into their territory. Even as late as 1955 the eighth edition of Oppenheim's International Law, pp 675-676, para 314 stated that: ‘The reception of aliens is a matter of discretion, and every state is by reason of its territorial supremacy competent to exclude aliens from the whole, or any part, of its territory.’ Earlier in Attorney General for Canada v Cain [1906] AC 542, 546, the Privy Council in the speech of Lord Atkinson decided: ‘One of the rights possessed by the supreme power in every state is the right to refuse to permit an alien to enter that state, to annex what conditions it pleases to the permission to enter it and to expel or deport from the state, at pleasure, even a friendly alien, especially if it considers his presence in the state opposed to its peace, order, and good government, or to its social or material interests: Vattel, Law of Nations, book I, s 231; book 2, s 125.’ This principle still applies subject to any treaty obligation of a state or rule of the state's domestic law which may apply to the exercise of that control.” 105. In Hong Kong, the extent to which the Government’s exercise of such powers is limited by its treaty obligations, or more accurately, by the constitutional protections conferred domestically by BOR Art 3, depends on resolving the question under discussion, namely, as to the scope and reach of the exclusionary provisions of section 11 in relation to rights having the character of the rights protected by BOR Art 3. G.3 The effect of section 5 in relation to BOR Art 3 106. Section 5(2)(c) entrenches the prohibition against torture and CIDTP laid down by BOR Art 3 against derogation even in the extreme situation of a public emergency which threatens the life of the nation. If it is non-derogable in such circumstances of acute danger, it is impossible to imagine any circumstance in which derogation is permitted. Furthermore, that BOR Art 3, made non-derogable by section 5, has additionally the status of an absolute right is demonstrated by the jurisprudence of the Strasbourg and United Kingdom courts. I hasten to add that these comments are directed solely at section 5(2)(c) insofar as it relates to BOR Art 3. I am not suggesting that all the rights listed in section 5(2)(c) as non-derogable are also to be classified as absolute, as I explain further below.[75] 107. Section 5 derives from Article 4 of the ICCPR.[76] It also largely mirrors Article 15 of the ECHR which is materially in the following terms (with my insertions in square brackets): “Derogation in time of emergency 1. In time of war or other public emergency threatening the life of the nation any High Contracting Party may take measures derogating from its obligations under this Convention to the extent strictly required by the exigencies of the situation, provided that such measures are not inconsistent with its other obligations under international law. 2. No derogation from Article 2 [right to life], except in respect of deaths resulting from lawful acts of war, or from Articles 3 [prohibition of torture and inhuman or degrading treatment or punishment], 4 (paragraph 1) [prohibition of slavery and servitude] and 7 [no punishment without law] shall be made under this provision. ...” 108. In 1978, the Strasbourg Court held that ECHR’s Art 3 prohibition against torture and CIDTP[77] was both non-derogable by virtue of Article 15 and absolute: “The Convention prohibits in absolute terms torture and inhuman or degrading treatment or punishment, irrespective of the victim’s conduct. Unlike most of the substantive clauses of the Convention and of Protocols Nos. 1 and 4 ..., Article 3 ... makes no provision for exceptions and, under Article 15 para. 2 ..., there can be no derogation therefrom even in the event of a public emergency threatening the life of the nation.”[78] 109. This was re-iterated in the important case of Soering v United Kingdom,[79] with the Court pointing out that the provision reflects an internationally accepted standard: “Article 3 makes no provision for exceptions and no derogation from it is permissible under Article 15 in time of war or other national emergency. This absolute prohibition on torture and on inhuman or degrading treatment or punishment under the terms of the Convention shows that Article 3 enshrines one of the fundamental values of the democratic societies making up the Council of Europe. It is also to be found in similar terms in other international instruments such as the 1966 International Covenant on Civil and Political Rights and the 1969 American Convention on Human Rights and is generally recognised as an internationally accepted standard.” 110. This has been accepted in the House of Lords. In R (Ullah) v Special Adjudicator,[80] Lord Steyn, undertook what he called a “brief tour d'horizon” of the various ECHR rights and concluded that Art 3’s prohibition of torture and CIDTP was an absolute right. Lord Steyn also highlighted the absolute nature of the prohibition of CIDTP in Privy Council cases in which he dissented on the immediate issue of delay in death penalty cases, but where his statement of principle is not in question. Thus, in Higgs v Minister of National Security,[81] an appeal from The Bahamas, in relation to Article 17 of the Bahamian Constitution which is in the same terms as ECHR Art 3, his Lordship stated: “The European Court of Human Rights has emphasised on numerous occasions that article 3 of the European Convention prohibits in absolute terms torture or inhuman or degrading treatment or punishment: Republic of Ireland v United Kingdom (1978) 2 EHRR 25, 79, para 163; Selçuk and Asker v Turkey (1998) 26 EHRR 477, 515-516, para 75. The guarantee under article 3 is a universal minimum standard, the breach of which is protected under the Convention. The only qualification under the Convention system is that in order for the conduct to be covered by the prohibition it must ‘attain a minimum level of severity.’ But there is no express or implied derogation in favour of the state: the prohibition is equally applicable during a war or public emergency. The guarantee is subject to no derogation in favour of the state in order to enable it to fight terrorism or violent crime: Tomasi v France (1992) 15 EHRR 1, 33, para 115. Breaches cannot be justified by a lack of resources: see Lester and Pannick, Human Rights Law and Practice (1999), para 4.3.1-4.3.8; Jacobs and White, The European Convention on Human Rights, 2nd ed (1996), p 49. Similarly, under article 17(1) of the Bahamian Constitution there is no express or implied derogation in favour of the state. A breach cannot be justified on any grounds. It is an absolute an unqualified constitutional guarantee. These propositions are elementary but important.” 111. In R (Limbuela) v Secretary of State for the Home Department,[82] Lord Hope of Craighead summarised the position regarding the absolute nature of the torture and CIDTP prohibition in ECHR Art 3 as follows: “The headnote to article 3 describes its contents in these terms: ‘prohibition of torture’. But the prohibition that it contains goes further than that. The prohibition extends also to inhuman or degrading treatment or punishment. As the article puts it, ‘no one shall be subjected to’ treatment of that kind. The European court has repeatedly said that article 3 prohibits torture and inhuman and degrading treatment in terms that are absolute: Chahal v United Kingdom (1996) 23 EHRR 413, 456-457, para 79; D v United Kingdom (1997) 24 EHRR 423, 447-448, paras 47, 49. In contrast to the other provisions in the Convention, it is cast in absolute terms without exception or proviso or the possibility of derogation under article 15: Pretty v United Kingdom 35 EHRR 1, 32, para 49.” 112. In this Court in Secretary for Security v Sakthevel Prabakar,[83] although spoken in the different context of a challenge mounted on the basis of the Covenant Against Torture which did not raise section 11 issues, Bokhary PJ stated: “Some rights are non-derogable under any circumstances. They form the irreducible core of human rights. The right not to be tortured is one of these non-derogable rights.” G.4 Conclusion as to the scope and effect of section 11 113. As the Court laid down in Ng Ka Ling v Director of Immigration,[84] constitutional instruments must generally be interpreted purposively. That applies of course to the Basic Law but also to HKBORO which is given constitutional force by Article 39. Li CJ put this as follows: “It is generally accepted that in the interpretation of a constitution such as the Basic Law a purposive approach is to be applied. The adoption of a purposive approach is necessary because a constitution states general principles and expresses purposes without condescending to particularity and definition of terms. Gaps and ambiguities are bound to arise and, in resolving them, the courts are bound to give effect to the principles and purposes declared in, and to be ascertained from, the constitution and relevant extrinsic materials. So, in ascertaining the true meaning of the instrument, the courts must consider the purpose of the instrument and its relevant provisions as well as the language of its text in the light of the context, context being of particular importance in the interpretation of a constitutional instrument.”[85] 114. In my judgment, the clear words of section 5 establish the non-derogable character of the right not to be subjected to torture or CIDTP protected by BOR Art 3. It is also clear from the highly persuasive jurisprudence of the Strasbourg Court and the House of Lords in relation to the closely analogous provisions of the ECHR that BOR Art 3 rights are not only non-derogable but also absolute. Such jurisprudence shows that the absolute character of the protection against torture and CIDTP is an internationally accepted standard or, as Lord Steyn puts it “a universal minimum standard”. 115. Accordingly, any apparent conflict between section 5 and section 11 or any ambiguity as to the statutory purposes of those provisions should be resolved by giving precedence to section 5, according decisive weight to the non-derogable and absolute character of the rights protected by BOR Art 3. Therefore, construed purposively, section 11 must be read as qualified by section 5. Section 11 must be understood to exclude the application of HKBORO and BOR in relation to the exercise of powers and the enforcement of duties under immigration legislation regarding persons not having the right to enter and remain in Hong Kong except insofar as the non-derogable and absolute rights protected by BOR Art 3 are engaged. 116. The aforesaid approach is consistent with the adoption of a generous construction of provisions conferring rights and a narrow construction of provisions restricting rights endorsed by this Court in Ng Ka Ling.[86] This was re-iterated by Li CJ in Gurung Kesh Bahadur v Director of Immigration as follows:[87] “A generous approach should be adopted to the interpretation of the rights and freedoms whilst restrictions to them should be narrowly interpreted Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4 at 28I – 29A and HKSAR v Ng Kung Siu (1999) 2 HKCFAR 442 at 457B. (In this context, right and freedom are used interchangeably). So, art 31 providing for the right to travel and the right to enter should be generously interpreted. On the other hand, art 39(2), which deals with the question of restrictions to rights and freedoms, should be narrowly interpreted.” G.5 The respondents’ arguments against that conclusion 117. Mr Benjamin Yu SC, appearing[88] for the respondents advanced four arguments against reaching the abovementioned conclusion. G.5a HKBORO section 2(2) 118. First, he relied on HKBORO section 2(2) which provides that “The Bill of Rights is subject to Part III”. Section 11 is in Part III and therefore, so it is argued, overrides the rights contained in the BOR. 119. That argument cannot be accepted. It merely restates but does not answer the central question. The issue remains: What on its true construction is the scope of section 11 to which the BOR is made subject? G.5b Derogation vs reservation 120. Secondly, Mr Yu SC sought to distinguish between sections 5 and 11 on the basis that they involve quite different concepts and “do different things”. Section 11 is a reservation which is made at the time of ratification of the Covenant, by which the Contracting State declines to take on specified obligations; while section 5 is concerned with derogations which involve withdrawing from Covenant obligations originally undertaken. 121. In my view, that distinction has no relevance to the discussion at hand. Sections 5 and 11 in HKBORO are not concerned with the processes of reservation or derogation. It is nothing to the point to state that such processes are different. The relevance of section 5(2)(c) lies in its declaration that the process of derogation in respect of BOR Art 3 is unavailable at any time – even in the time of a proclaimed public emergency which threatens the life of the nation. As the review of the Strasbourg and United Kingdom decisions in Section G.3 above shows, section 5(2)(c) thereby acknowledges or confers on BOR Art 3 the status of an absolute, non-derogable right entitled to dominance over section 11. G.5c A matter which should be left to the Director’s discretion 122. Mr Yu’s next submission was that the Court should recognize that the legislature has decided that the exercise of immigration powers within the ambit of section 11 is to be left in the discretion of the Director of Immigration and should accordingly steer clear of interfering. He sought to draw support from Lord Hoffmann’s observation in Matadeen v Pointu,[89] that non-justiciable questions may exist and that one should not believe that it must always be the judges who have the last word. Mr Yu added that the Court could take comfort from the fact that if the proposed approach is adopted, the Director would still be subject to the usual administrative law constraints against any unlawful exercise of his discretion. 123. Matadeen was a case concerned with equality of treatment of pupils in respect of school subjects, examinations and school places. Lord Hoffmann[90] was commenting on an attempt by one of the parties to rely on a principle of equality amorphously described as “permeating” the Mauritian constitution as the basis for deciding the case. It was in that context that he observed that while equality might represent a general principle of rational behaviour, it did not necessarily entail a justiciable principle. 124. Matadeen was, in other words, a world away from a case involving non-derogable fundamental rights. By section 7 of the HKBORO, the Ordinance binds the Government, all public authorities and any person acting on their behalf, obviously including the respondents. The question now arising is quintessentially a question for the Court: What, on its true construction, is the scope and effect of a legislative provision which purports to exclude a class of persons in Hong Kong from relying on the rights constitutionally protected by BOR Art 3 when such rights are engaged by the exercise of statutory powers vested in the respondents? To say that the Court should be content to let such powers reside in the Director’s discretion begs the crucial question. 125. When taxed by the Court, Mr Yu was constrained to accept that the logic of his argument is that it may be lawful for the Director to exercise his discretion in favour of deporting a person who falls within section 11 even though there is incontrovertible evidence that such deportation almost certainly means sending him to face torture or CIDTP (which would otherwise be prohibited by BOR Art 3); or even sending him to face being arbitrarily deprived of his life (otherwise prohibited by BOR Art 2). That submission is, to say the least, deeply unattractive. 126. If, as duly determined by the Court, the true reach of section 11 falls short of displacing BOR Art 3 classified as an absolute, non-derogable right, any inconsistent action by the respondents would constitute a constitutional violation for which redress is granted as of right and not subject to discretionary considerations. Such a violation would not merely be justiciable: the Court would be duty bound to intervene. In a well-known passage in Ng Ka Ling,[91]this was emphasised by Li CJ as follows: “In exercising their judicial power conferred by the Basic Law, the courts of the Region have a duty to enforce and interpret that law. They undoubtedly have the jurisdiction to examine whether legislation enacted by the legislature of the Region or acts of the executive authorities of the Region are consistent with the Basic Law and, if found to be inconsistent, to hold them to be invalid. The exercise of this jurisdiction is a matter of obligation, not of discretion so that if inconsistency is established, the courts are bound to hold that a law or executive act is invalid at least to the extent of the inconsistency. Although this has not been questioned, it is right that we should take this opportunity of stating it unequivocally. In exercising this jurisdiction, the courts perform their constitutional role under the Basic Law of acting as a constitutional check on the executive and legislative branches of government to ensure that they act in accordance with the Basic Law.” 127. Mr Yu’s third submission must therefore be rejected. G.5d Construction in line with what the legislature must have assumed was the law 128. Mr Yu’s final argument against construing section 11 to have a limited reach involved his reliance on Harding v Wealands,[92] for the proposition that the Court should construe the provision in line with what the legislature must be taken to have understood the law to be when enacting the statute, even if the legislature’s view of the law is later shown to have been wrong. 129. I do not accept that Harding v Wealands has any relevance in a case like the present. The issue in Harding v Wealands was whether damages for personal injury arising out of an accident in New South Wales should be calculated according to the law of NSW, selected as the applicable law under a certain English statute, or whether such damages involved a question of procedure falling to be determined in accordance with English law, being the law of the forum. The English statute had been enacted to cure a perceived defect in the pre-existing conflicts rule and it was therefore pertinent to ask what Parliament’s understanding of the law was at the time of that statute’s enactment, whether or not Parliament’s view is thought to have been correct.[93] 130. We are not concerned with any such exercise in the present case. It is true, as Mr Yu points out, that Hong Kong case-law on section 11 appears uniformly[94] to have treated section 11 as displacing the rights contained in the BOR. However, with the exception of Vo Thi Do and Others v Director of Immigration,[95] in none of those cases, was there any attempt to rely on BOR Art 3 or indeed, any of the other rights listed in HKBORO section 5. 131. In Vo Thi Do, a case brought by Vietnamese asylum seekers who complained of their very prolonged administrative detention, it was alleged, among other complaints, that such detention constituted CIDTP in violation of BOR Art 3. Section 11 was relied on and issue was joined as to whether detention of the applicants was pursuant to immigration legislation governing their stay in Hong Kong. The Court of Appeal held that section 11 was triggered but added: “This construction of s 11 does not affect, in the end, the result of the case because the judge went on to hold that, upon the facts, none of the rights guaranteed under arts 3, 5(1) and 6(1) were infringed.”[96] Vo Thi Do was thus a case where the Court did not enter into any analysis of whether those rights were ousted by section 11. 132. More importantly, in none of the decided cases brought to this Court’s attention, was the argument based on the juxtaposition of sections 5 and 11 made or considered. It is therefore impossible to suggest that in enacting those two sections as provisions co-existing within HKBORO, the legislature were making any assumptions one way or the other as to their inter-relationship in law. 133. For the foregoing reasons, I am not dissuaded by any of the arguments advanced on the respondents’ behalf from reaching the conclusion set out in Section G.4 above. G.6 Why the foregoing analysis does not necessarily apply to the other rights listed in section 5 134. As I have been at pains to stress, this judgment confines itself to the relationship between sections 5 and 11 on the one hand and BOR Art 3 and BOR Art 11(6) on the other. The other rights listed in section 5(2)(c) have not been argued and nothing in this judgment is intended to rule on section 11’s relationship with those rights. I will, however, say a few words as to why one should not too readily extrapolate from what is said in this judgment to those other rights. 135. In the first place, it does not follow from the conclusion that the right against being subjected to CIDTP protected by BOR Art 3 is both non-derogable and absolute, that the same applies to all the other rights listed in section 5(2)(c). The listed rights are those protected by the following Articles of the BOR, namely: Art 2 [right to life], Art 4(1) and (2) [slavery and servitude], Art 7 [no imprisonment for breach of contract], Art 12 [no retrospective criminal offences], Art 13 [right to recognition as person] and Art 15 [freedom of thought, etc]. Some of these rights may be non-derogable by virtue of section 5 but not absolute, with the consequence, for instance, that statutory qualification of such rights may be permissible if justifiable upon a proportionality analysis. 136. The Human Rights Committee in General Comment No 24[97] recognized the distinction between non-derogable and absolute or peremptory rights as follows: “... While there is no hierarchy of importance of rights under the Covenant, the operation of certain rights may not be suspended, even in times of national emergency. This underlines the great importance of non-derogable rights. But not all rights of profound importance, such as articles 9 and 27 of the Covenant, have in fact been made non-derogable. One reason for certain rights being made non-derogable is because their suspension is irrelevant to the legitimate control of the state of national emergency (for example, no imprisonment for debt, in article 11). Another reason is that derogation may indeed be impossible (as, for example, freedom of conscience). At the same time, some provisions are non-derogable exactly because without them there would be no rule of law. A reservation to the provisions of article 4 itself, which precisely stipulates the balance to be struck between the interests of the State and the rights of the individual in times of emergency, would fall in this category. And some non-derogable rights, which in any event cannot be reserved because of their status as peremptory norms, are also of this character - the prohibition of torture and arbitrary deprivation of life are examples.” 137. One may accordingly observe, without deciding, that there is an obvious difference between say, the prohibition of arbitrary deprivation of life on the one hand and imprisonment for breach of contract on the other, the reasons for each being included as non-derogable rights in section 5 (and ICCPR Art 4) being quite different, as explained in the extract from General Comment 24 just cited. 138. It is moreover self-evident that aspects of the right to freedom of thought, conscience and religion, protected by BOR Art 15 are not absolute since the article provides for possible qualification of rights relating to the manifestation of religious beliefs in its own paragraph 3.[98] 139. There are likely to be other differentiating considerations relevant to a case involving section 11 and the other section 5 rights. It suffices for the present to re-iterate that this judgment does not stray into that territory. 140. It is also important to note that some of the case-law[99] holding that certain rights additional to those listed in the relevant Articles[100] falling short of CIDTP “cannot be excluded” from being considered non-derogable and/or absolute must be treated in our jurisdiction with great caution especially in the context of deportation or removal because of the necessity to take account of section 11. H. The consequences of the construction of section 11 here adopted. 141. What then are the main consequences – in the particular context of deportations and removals – of holding, as I have done, that the subjugation of HKBORO by section 11 does not extend to precluding reliance on rights under BOR Art 3, being non-derogable and absolute rights? H.1 The deportee’s conduct and proportionality 142. The first two consequences are related. Provided that the risk and severity of the prospective ill-treatment are duly established in the manner discussed below,[101] the first consequence of the right not to be subjected to CIDTP being an absolute right is that the proposed deportee cannot be exposed by the Government to such risk, however objectionable may be his conduct or character supplying the ground for his proposed expulsion. 143. Thus, in Chahal v UK[102] the Strasbourg Court stated: “The prohibition provided by Article 3 ... against ill-treatment is equally absolute in expulsion cases. Thus, whenever substantial grounds have been shown for believing that an individual would face a real risk of being subjected to treatment contrary to Article 3 ... if removed to another State, the responsibility of the Contracting State to safeguard him or her against such treatment is engaged in the event of expulsion ... In these circumstances, the activities of the individual in question, however undesirable or dangerous, cannot be a material consideration.” 144. Similarly, in RB (Algeria) v Home Secretary,[103] another deportation case, Lord Phillips of Worth Matravers stated: “Article 3 is an absolute right. The European court made it plain that the question of whether article 3 prevented deportation was not influenced by the ground of deportation, even if this were that the individual under threat of deportation ... posed a threat to national security.” 145. The second and related consequence is that the Government cannot justify any infringement of the absolute BOR Art 3 right on the ground that the deportation satisfies a proportionality analysis. Thus, in R (Limbuela) v Secretary of State for the Home Department,[104] Lord Hope of Craighead pointed out: “...proportionality, which gives a margin of appreciation to states, has no part to play when conduct for which it is directly responsible results in inhuman or degrading treatment or punishment. The obligation to refrain from such conduct is absolute.” H.2 Applicability of the rights in expulsion cases 146. The third major consequence concerns the applicability of BOR Art 3 rights in expulsion cases. The authorities just cited proceed on the assumption that the prohibitions contained in BOR Art 3 apply not merely in respect of CIDTP within the territory of the deporting State, but also where a sufficient risk is shown of the deportee facing CIDTP in the country to which he is being deported. It is not obvious why this should be so and some further discussion is called for. H.2a Covenant rights generally subject to territorial limits 147. The purpose of enacting HKBORO and its adoption as part of the laws of the HKSAR, was to implement the Covenant as part of our domestic law. This is reflected in HKBORO’s long title which states that it is: “An Ordinance to provide for the incorporation into the law of Hong Kong of provisions of the [ICCPR] as applied to Hong Kong; and for ancillary and connected matters.” 148. What the Covenant, thus made part of our law, requires of the parties is stated in its Art 2(1): “Each State Party to the present Covenant undertakes to respect and to ensure to all individuals within its territory and subject to its jurisdiction the rights recognized in the present Covenant, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.” (Italics supplied) 149. The ICCPR and the HKBORO are therefore intended, prima facie at least, to safeguard rights only within the HKSAR’s territory in relation to persons subject to its jurisdiction. 150. Article 1 of the ECHR is to similar effect. It provides: “The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section I of this Convention” 151. The Strasbourg Court in Soering v United Kingdom[105] acknowledged that this had the effect of setting territorial limits on Convention obligations: “... the engagement undertaken by a Contracting State is confined to ‘securing’ (‘reconnaître’ in the French text) the listed rights and freedoms to persons within its own ‘jurisdiction.’ Further, the Convention does not govern the actions of States not Parties to it, nor does it purport to be a means of requiring the Contracting States to impose Convention standards on other States. Article 1 cannot be read as justifying a general principle to the effect that, notwithstanding its extradition obligations, a Contracting State may not surrender an individual unless satisfied that the conditions awaiting him in the country of destination are in full accord with each of the safeguards of the Convention.” 152. Lord Bingham of Cornhill also acknowledged this in R (Ullah) v Special Adjudicator,[106] drawing a parallel with ICCPR Art 2: “By article 1 of the European Convention the contracting states undertook to secure ‘to everyone within their jurisdiction’ the rights and freedoms defined in section 1 of the Convention. The corresponding obligation in article 2 of the International Covenant on Civil and Political Rights 1966 extends to all individuals within the territory of the state and subject to its jurisdiction, but the difference of wording is not significant for present purposes. Thus the primary focus of the European Convention is territorial: member states are bound to respect the Convention rights of those within their borders. In the ordinary way, a claim based on the Convention arises where a state is said to have acted within its own territory in a way which infringes the enjoyment of a Convention right by a person within that territory. Such claims may for convenience be called ‘domestic cases’.” H.2b Extension of the rights to “foreign cases” 153. In the same judgment,[107] Lord Bingham contrasted “domestic cases” with what he called “foreign cases” which are: “...cases in which it is not claimed that the state complained of has violated or will violate the applicant's Convention rights within its own territory but in which it is claimed that the conduct of the state in removing a person from its territory (whether by expulsion or extradition) to another territory will lead to a violation of the person's Convention rights in that other territory.” 154. The extension of the rights protected by BOR Art 3 to operate in relation to such foreign cases is traceable to the judgment of the Strasbourg Court in Soering v United Kingdom.[108] That was a case involving a request by the United States for the extradition of a German national from the United Kingdom on charges of murdering the parents of his girlfriend in Virginia. Extradition was resisted on the ground that, if convicted, he would face CIDTP as a result of “the death row phenomenon” which defendants sentenced to death for capital murder face in Virginia, especially given that the applicant suffered from psychiatric problems. If the UK acceded to the United States’ request, it would obviously not itself be committing any acts of CIDTP within its own territory. So the issue facing the Strasbourg Court, was described by it as follows: “What is at issue in the present case is whether Article 3 can be applicable when the adverse consequences of extradition are, or may be, suffered outside the jurisdiction of the extraditing State as a result of treatment or punishment administered in the receiving State.”[109] 155. The Court acknowledged that usually Covenant obligations were subject to territorial limits but held that such considerations “cannot ... absolve the Contracting Parties from responsibility under Article 3 for all and any foreseeable consequences of extradition suffered outside their jurisdiction.”[110] It decided that: “In interpreting the Convention regard must be had to its special character as a treaty for the collective enforcement of human rights and fundamental freedoms. Thus, the object and purpose of the Convention as an instrument for the protection of individual human beings require that its provisions be interpreted and applied so as to make its safeguards practical and effective.”[111] 156. Turning to ECHR Art 3, the Court (in a passage already cited above) noted that it imposed an “absolute prohibition on torture and on inhuman or degrading treatment or punishment” and that it represented an internationally accepted standard.[112] The Court’s observed that therefore: “It would hardly be compatible with the underlying values of the Convention, that ‘common heritage of political traditions, ideals, freedom and the rule of law’ to which the Preamble refers, were a Contracting State knowingly to surrendera fugitive to another State where there were substantial grounds for believing that he would be in danger of being subjected to torture, however heinous the crime allegedly committed. Extradition in such circumstances, while not explicitly referred to in the brief and general wording of Article 3, would plainly be contrary to the spirit and intendment of the Article, and in the Court’s view this inherent obligation not to extradite also extends to cases in which the fugitive would be faced in the receiving State by a real risk of exposure to inhuman or degrading treatment or punishment proscribed by that Article.”[113] 157. The Court justified such a departure from the normal territorial principle on the basis of the particularly serious and irreparable nature of CIDTP, absolutely prohibited by Art 3: “It is not normally for the Convention institutions to pronounce on the existence or otherwise of potential violations of the Convention. However, where an applicant claims that a decision to extradite him would, if implemented, be contrary to Article 3 by reason of its foreseeable consequences in the requesting country, a departure from this principle is necessary, in view of the serious and irreparable nature of the alleged suffering risked, in order to ensure the effectiveness of the safeguard provided by that Article.”[114] 158. The Court summarised its conclusion in the following terms: “In sum, the decision by a Contracting State to extradite a fugitive may give rise to an issue under Article 3, and hence engage the responsibility of that State under the Convention, where substantial grounds have been shown for believing that the person concerned, if extradited, faces a real risk of being subjected to torture or to inhuman or degrading treatment or punishment in the requesting country.”[115] 159. Soering has since been followed on many occasions.[116] In the recent decision in Al Husin v Bosnia and Herzegovina,[117] the Soering approach was summarised in these terms: “The Court reiterates that as a matter of well-established international law and subject to its treaty obligations, including those arising from the Convention, a Contracting State has the right to control the entry, residence and expulsion of aliens ... The right to asylum is not contained in either the Convention or its Protocols ... Expulsion by a Contracting State may, however, give rise to an issue under Article 3, and hence engage the responsibility of that State under the Convention, where substantial grounds have been shown for believing that the person concerned, if expelled, faces a real risk of being subjected to ill treatment. In such a case, Article 3 implies an obligation not to expel that person to the country in question ... Since the prohibition of torture or inhuman or degrading treatment or punishment is absolute, the conduct of applicants, however undesirable or dangerous, cannot be taken into account...” 160. The third consequence of reaching the conclusion stated at the start of Section H above is therefore that a sufficiently established threat of BOR Art 3 being violated by the receiving country if the deportee should be sent there constitutes a ground for restraining the Hong Kong Government from proceeding with the deportation. I. The double jeopardy ground 161. Having dealt with the principles, I turn to their application on the facts of this case. The double jeopardy ground can be dealt with quite shortly. 162. The appellant’s challenge to the deportation order founded on BOR Art 11(6) must fail. Section 11 precludes reliance on that provision. The right which it protects, namely, the right not to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of Hong Kong is neither non-derogable (not being mentioned in section 5) nor absolute. 163. That disposes of this first ground of challenge. However, as two further grounds for rejecting that challenge were relied upon by the Court of Appeal I will deal briefly with them. 164. I respectfully agree both with Reyes J and the Court of Appeal that an additional ground for concluding that BOR Art 11(6) does not avail the appellant is that it only applies within the territorial limits of the HKSAR. As noted in Section H.2a above, Covenant rights generally operate within such limits, an exception having been made in respect of BOR Art 3 because of the absolute character and non-derogable character of the prohibition of CIDTP and the severe and irreparable harm it entails. There are no grounds for making such an exception in relation to BOR Art 11(6). 165. This conclusion is consistent with the position taken by the parties to the Covenant as revealed in the travaux préparatoires[118] and in Communications of the Human Rights Committee.[119] It also coincides with the view expressed by Tang JA (as Tang PJ then was) in Yeung Chun Pong v Secretary for Justice;[120] and with the opinion expressed by Sir Anthony Mason NPJ in this Court in the same case.[121] 166. The Court of Appeal’s third reason for holding that the appellant cannot rely on BOR Art 11(6) is that such protection only applies to the narrow, autrefois convict or acquit heads of double jeopardy and not to the broader common law rule empowering the Court to stay proceedings as an abuse of process. 167. It is a ground that involves arguing that prosecution of the appellant under the Nigerian law would constitute the broader form of double jeopardy, leading to a debate as to whether such a prosecution falls within or outside BOR Art 11(6). However, given that I have held that BOR Art 11(6) does not apply in relation to double jeopardy arising through a prosecution in a foreign state, this question does not actually arise in the present case and does not require further discussion. This third ground does, however, flag an issue which may have to be faced in a purely domestic case. But that is not a matter to be dealt with in this judgment. 168. Accordingly, for the foregoing reasons, I conclude that BOR Art 11(6) does not avail the appellant as a basis for challenging the deportation order. J. The CIDTP ground J.1 Not precluded by section 11 169. Applying the analysis developed in Sections G and H of this judgment, section 11, properly construed, does not preclude the appellant from relying on BOR Art 3. 170. Accordingly, the concession[122] accepted by Reyes J was rightly made. In deciding that the concession had been wrongly made, the Court of Appeal did not of course have before it, the arguments based on the juxtaposition of sections 5 and 11 and the non-derogable and absolute nature of BOR Art 3 developed in this appeal. 171. The outcome of the case therefore depends on whether the appellant can bring himself within the terms of BOR Art 3 on the facts. J.2 What must be established factually 172. For him to do so successfully, he must meet two main requirements: he must establish (i) that the ill-treatment which he would face if expelled attains what has been called “a minimum level of severity” and (ii) that he faces a genuine and substantial risk of being subjected to such mistreatment. It is clear that a very high threshold must be surmounted to establish each of those requirements. 173. In R (Limbuela) v Secretary of State for the Home Department,[123] Lord Hope of Craighead, citing decisions of the Strasbourg Court, described what was required to meet the “minimum level of severity”, pointing out that it generally involves actual bodily injury or intense physical or mental suffering and that its assessment is ultimately a matter of judgment: “... the European court has all along recognised that ill-treatment must attain a minimum level of severity if it is to fall within the scope of the expression ‘inhuman or degrading treatment or punishment’: Ireland v United Kingdom (1978) 2 EHRR 25, 80, para 167; A v United Kingdom (1998) 27 EHRR 611, 629, para 20; V v United Kingdom (1999) 30 EHRR 121, 175, para 71. In Pretty v United Kingdom 35 EHRR 1, 33, para 52, the court said: ‘As regards the types of “treatment” which fall within the scope of article 3 of the Convention, the court's case law refers to “ill-treatment” that attains a minimum level of severity and involves actual bodily injury or intense physical or mental suffering. Where treatment humiliates or debases an individual showing a lack of respect for, or diminishing, his or her human dignity or arouses feelings of fear, anguish or inferiority capable of breaking an individual's moral and physical resistance, it may be characterised as degrading and also fall within the prohibition of article 3. The suffering which flows from naturally occurring illness, physical or mental, may be covered by article 3, where it is, or risks being, exacerbated by treatment, whether flowing from conditions of detention, expulsion or other measures, for which the authorities can be held responsible.’ It has also said that the assessment of this minimum is relative, as it depends on all the circumstances of the case such as the nature and context of the treatment or punishment that is in issue. The fact is that it is impossible by a simple definition to embrace all human conditions that will engage article 3. ... So the exercise of judgment is required in order to determine whether in any given case the treatment or punishment has attained the necessary degree of severity. It is here that it is open to the court to consider whether, taking all the facts into account, this test has been satisfied.” 174. As to the degree of risk that the deportee must establish, it has variously been put as a requirement that he must show “substantial grounds ... for believing”[124] or “strong grounds for believing”[125] that if deported (or extradited) he faces a “real risk” of being subjected to torture or CIDTP. 175. Recently, the Strasbourg Court in Al Husin v Bosnia and Herzegovina,[126] endorsed the following approach: “The assessment of the existence of a real risk must be rigorous (see Chahal v the United Kingdom, 15 November 1996, § 96, Reports of Judgments and Decisions 1996 V). As a rule, it is for applicants to adduce evidence capable of proving that there are substantial grounds for believing that, if the measure complained of were to be implemented, they would be exposed to a real risk of being subjected to treatment contrary to Article 3 (N v Finland, no 38885/02, § 167, 26 July 2005). Where such evidence is adduced, it is for the Government to dispel any doubts about it. The Court will take as its basis all the material placed before it or, if necessary, material obtained on its own initiative.” 176. In the Strasbourg context, the Court went on to state that the Court should assess the risk at the time of the proceedings, taking account of information that has come to light after the deportation decision was taken in order to ensure that the Court is able to make a “full and up-to-date assessment” of the current situation.[127] J.3 The facts in the present case 177. The appellant’s case on CIDTP is a based once again on the risk of double jeopardy. He contends that implementation of the deportation order would expose him to a risk of being re-prosecuted and punished afresh under the Nigerian law because of his drug-trafficking activities for which he has already been convicted and imprisoned for 16 years in Hong Kong. It is the impact on him of the prospect of such fresh proceedings and punishment which he says would constitute CIDTP. Reyes J accepted his submission and the appellant invites the Court to hold that the Court of Appeal was not entitled to reverse the Judge’s finding. 178. In reaching his conclusion that the appellant had successfully established a potential violation of BOR Art 3, Reyes J took into account the appellant’s age; the fact that he had spent 16 years in prison and had “expiated his crime”; and the fact that while he had incurred 11 disciplinary reports between 1994 and 2004, the appellant had “made an effort to turn his life around”, attending religious gatherings and becoming a model prisoner. His Lordship’s view was that the risk of being “detained, tried and sentenced to at least[128] 5 years’ imprisonment in relation to the same offence” would “self-evidently constitute a severe mental and psychological blow” to him, which “could well induce fear and anguish in him as a human being”.[129] He added: “...having regard to the number of years Mr Ubamaka has already spent in prison, it would obviously be severely frustrating to him as an individual and his efforts to improve himself to have to face yet another trial and imprisonment in relation to precisely the same conduct.”[130] 179. Reyes J concluded that the aforesaid facts established that deportation would indeed constitute CIDTP so that the deportation order should be quashed: “Mr Ubamaka has paid his ‘dues’ to society by reason of his long imprisonment here. He has turned a new leaf and is a different person from the younger self who foolishly committed a crime. In all the circumstances, to deport Mr Ubamaka at some point in the future to face the real risk of re-trial in Nigeria would, I think, be a cruel blow, amounting to inhuman treatment of a severity proscribed by the HKBORO, ICCPR and CAT.”[131] 180. The Court of Appeal reversed Reyes J because it did not: “... consider the risk of prosecution and punishment under section 22 of the Act in the present case gives rise to anything approaching the level of intense physical or mental suffering or humiliation necessary to constitute cruel, inhuman or degrading treatment.”[132] 181. I respectfully agree with the Court of Appeal’s conclusion. Whether the ill-treatment allegedly feared is of a nature which attains the minimum level of severity required; and whether the appellant has established substantial grounds for believing that, if deported, he would face a real risk of being subjected to such mistreatment, is a matter of judgment to be exercised with guidance from the relevant jurisprudence. In my opinion, the appellant falls far short of meeting both the substantial risk and minimum level of severity requirements. 182. I do not think that the “severe mental and psychological blow” and the severe “frustration” that he might experience at the prospect of facing “yet another trial and imprisonment in relation to precisely the same conduct” as found by the Judge comes anywhere near to meeting the threshold requirements discussed in Section J.2 above. Reyes J cited Soering but his Lordship does not appear to have focussed on the very high threshold of the requirements for establishing CIDTP, exemplified by instances where the mistreatment involves “actual bodily injury or intense physical or mental suffering” or mistreatment of an intensity “capable of breaking an individual’s moral and physical resistance” emphasised in the cases cited above. Moreover, it may be that Reyes J was influenced by his erroneous belief that the appellant faced a minimum of five years’ imprisonment if convicted. The Nigerian law does not prescribe any such minimum. 183. So far as the level of risk is concerned, there was a dearth of evidence that the appellant would be prosecuted, and if prosecuted and convicted, as to what sentence the Nigerian court was likely to impose. That is perhaps not surprising since in a letter from the Director of Immigration to the appellant dated 14 August 2008, which the appellant placed before the Court, it appears that there were very few convictions to date. The Director stated in the letter that there appeared to be conflicting evidence as to whether he would be prosecuted upon his return. He referred to country information that the National Drug Law Enforcement Agency had told a local newspaper that it would “make sure that anyone convicted of drug charges abroad” would be prosecuted under the Nigerian law. But on the other hand, he stated that someone from the Federal Ministry of Justice had indicated that “he was not aware of anyone being convicted a second time when a ‘full sentence’ had already been served overseas.” The letter continued: “It is noted that while a total of 418 Nigerians were deported from foreign countries for committing drug-related offences from January 2001 to March 2007, few of them have been prosecuted and convicted under [the Nigerian law]. There is also country information that the NDLEA has attempted to prosecute 10 Nigerian repatriated from foreign countries under the provisions of [the Nigerian law] between January 2001 and March 2003. These cases are still pending in the court system, with no convictions made to date.” 184. As the Strasbourg Court pointed out in Al Husin, it is generally for the applicants to adduce evidence capable of proving that there are substantial grounds for believing that, if the measure complained of were to be implemented, they would be exposed to a real risk of being subjected to treatment contrary to Article 3. The Court is also entitled to take account of the latest available evidence and so was entitled to consider the contents of the Director’s letter mentioned above. In the circumstances, the evidence fell far short of establishing substantial grounds for believing that the appellant faces a genuine risk of being subjected to CIDTP if the deportation order is carried out. The CIDTP must therefore fail. K. The CIL ground 185. This ground needs little discussion. The respondents’ objection to its introduction for the first time at this stage of the proceedings is well-founded. As stated in Flywin Co Ltd v Strong & Associates Ltd,[133] and many times since, the Court will not entertain a new point unless there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at trial. The respondents point out that they would have wished to put in evidence as to the practice of states and of juridical opinion regarding the existence and binding nature of the purported norm of CIL asserted by the appellant. 186. In any event, in the course of the hearing, Mr Gordon did not press this ground and accepted that on analysis, it was not a ground which could a achieve a different outcome from the outcomes arrived at respecting the grounds of challenge already discussed. L. The remitter issue 187. As earlier indicated, another point which Mr Gordon seeks to raise for the first time in this Court relates to what he describes as “a remedy”. He submits that if the Court is not satisfied that the facts presently relied on constitute CIDTP, it should order the case to be remitted to the Director for him to consider whether CIDTP is made out on the basis of a different set of facts relating to conditions in Nigerian prisons which are said to be appalling. 188. This suggestion has in fact nothing to do with any “remedy” and I see no conceivable basis for making such a remitter. In Reyes J’s judgment,[134] he makes the following observation: “In the hearing before me, Mr. Pun has studiously confined his submissions on the CAT to the anguish that would afflict Mr Ubamaka if he were tried a second time in Nigeria. I note, however, that Mr Ubamaka has also based his CAT claims on the possibility of ill-treatment by prison officers in Nigeria.” 189. It therefore appears that the decision was deliberately taken not to introduce any allegations concerning ill-treatment in Nigerian prisons or indeed, any grounds other than the “anguish” referred to. That was presumably thought to be a good tactic for whatever reason. Consequently, there has never been any suggestion that the Director has wrongly failed to take account of prison conditions and accordingly no basis for remitting the issue to him for consideration. M. Conclusion 190. For the foregoing reasons, I would dismiss the appeal. In the light of the fact that new issues arose at the Court’s instigation and in the light of the outcome, I would make an order nisi that there be no order as to costs. Any submissions which the parties may wish to make on costs should be lodged in writing within 14 days from the date of this judgment. I would direct that in default of such submissions, the order nisi should stand as an order absolute without further order. Mr Justice Tang PJ: 191. I agree with the judgment of Mr Justice Chan PJ and Mr Justice Ribeiro PJ. Lord Walker of Gestingthorpe NPJ: 192. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 193. The appeal is accordingly unanimously dismissed and the Court makes the order as to costs referred to in the final paragraph of Mr Justice Ribeiro PJ’s judgment. Mr Richard Gordon QC, Mr Hectar Pun and Mr Timothy Parker, instructed by Tso Au Yim & Yeung and assigned by the Legal Aid Department, for the Appellant Mr Benjamin Yu SC, Professor Malcolm Shaw QC, Mr Anderson Chow SC and Ms Grace Chow, instructed by the Department of Justice, for the Respondents [1] As regard persons not having the right to enter and remain in Hong Kong, this Ordinance does not affect any immigration legislation governing entry into, stay in and departure from Hong Kong, or the application of any such legislation. [2] No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment. In particular, no one shall be subjected without his free consent to medical or scientific experimentation. [3] Cap 383. [4] Initially promulgated as Decree No 33 of 1990. [5] Cap 115. Section 20(1)(a): (1) The Chief Executive may make a deportation order against an immigrant if the immigrant has been found guilty in Hong Kong of an offence punishable with imprisonment for not less than 2 years; ...’ The order was made under powers delegated by the Chief Executive to the Secretary. [6] A (Torture Claimant) v Director of Immigration [2008] 4 HKLRD 752. [7] Contained in HKBORO, section 8. Article 5(1): “Everyone has the right to liberty and security of person. No one shall be subjected to arbitrary arrest or detention. No one shall be deprived of his liberty except on such grounds and in accordance with such procedure as are established by law.” [8] ICCPR Art 14(7): “No one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of each country.” [9] Adopted by the UN General Assembly on 19 September 1966. [10] ICCPR Art 7: “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment. In particular, no one shall be subjected without his free consent to medical or scientific experimentation.” [11] HCAL 77/2008 (5 May 2009) §§120-128. [12] [2008] 4 HKLRD 752. [13] [2011] 1 HKLRD 359. [14] Ghulam Rbani v Secretary for Justice, CACV 267/2011. [15] At §§54 and 70. [16] At §§64-67. [17] As Fok JA then was. [18] [2008] 3 HKLRD 1 at §§16-24. [19] Yeung Chun Pong v Secretary for Justice (2009) 12 HKCFAR 867 at §§10-12, §§21-25. For a helpful discussion of the distinction see the Report on Double Jeopardy by the Law Reform Commission of Hong Kong (February 2012) Chapter 1. [20] Reyes J at §§71-76. [21] At §§124-148, where the Court of Appeal dealt with the double jeopardy and CIDTP grounds together, those grounds being separately addressed in this judgment. [22] Reyes J at §83-85. [23] Court of Appeal at §§100-117. [24] Court of Appeal at §123. [25] Reyes J at §§56-70. [26] Court of Appeal at §70. [27] United Nations Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, Art 1: “For the purposes of this Convention, the term ‘torture’ means any act by which severe pain or suffering, whether physical or mental, is intentionally inflicted on a person for such purposes as obtaining from him or a third person information or a confession, punishing him for an act he or a third person has committed or is suspected of having committed, or intimidating or coercing him or a third person, or for any reason based on discrimination of any kind, when such pain or suffering is inflicted by or at the instigation of or with the consent or acquiescence of a public official or other person acting in an official capacity. It does not include pain or suffering arising only from, inherent in or incidental to lawful sanctions.” [28] Reyes J at §91. [29] With Mr Hectar Pun and Mr Timothy Parker. [30] Reyes J at §94. [31] In Section J.3 below. [32] Court of Appeal at §137. [33] Court of Appeal at §136 and §146. [34] Originally, reliance had been placed on a purported CIL norm prohibiting refoulement to face a fundamental breach of the right to a fair trial, including double jeopardy; but that was abandoned by Mr Gordon at the hearing. [35] JH Rayner Ltd v Department of Trade and Industry [1990] 2 AC 418 at 476-477 per Lord Templeman and at 500 per Lord Oliver of Aylmerton; R v Lyons [2003] 1 AC 976 at §27; R v McKerr [2004] 1 WLR 807 at §48 per Lord Steyn; In re Hai Ho-tak and Cheng Chun-heung [1994] 2 HKLR 202 at 208. [36] R v Secretary for the Home Department ex parte Brind [1991] 1 AC 696 at 747-748 per Lord Bridge of Harwich and at 761 per Lord Ackner. [37] R v Secretary for the Home Department ex parte Brind [1991] 1 AC 696 at 747-748 per Lord Bridge of Harwich and 760 per Lord Ackner. [38] [1990] 2 AC 418 at 499. Applied in Re Chong Bing Keung (No 2) [2000] 2 HKLRD 571 at 582. [39] R v Lyons [2003] 1 AC 976 at §§27-28. [40] In Section G. [41] Appellant’s Case (“AC”) §§146, 169-170 and 221. [42] AC§63. [43] See Lord Lester of Herne Hill QC, “Thirty Years On: The East African Asians Case Revisited” [2002] PL 52. [44] AC§§64-84 and 101. [45] AC§145. [46] Art 12(1): “Everyone lawfully within the territory of a State shall, within that territory, have the right to liberty of movement and freedom to choose his residence.” [47] For example, in In re Hai Ho-tak and Cheng Chun-heung [1994] 2 HKLR 202 at 209, Nazareth JA stated: “Historically Hong Kong has been and continues to be subjected to unparalleled immigration pressures. If not rigorously controlled they pose a grave threat to the prosperity and stability of Hong Kong. And specifically in the context of close relatives or family members, the numbers of persons without rights to enter and remain, who have family members in Hong Kong with such rights are very substantial indeed; an estimate of 400,000 in the adjoining provinces of China was mentioned to us.” [48] [1994] 2 HKLR 202. [49] [1998] 1 HKLRD 729. [50] [2011] 4 HKC 151, see §311-312 as to the SCNPC’s role and §371 for the vetting process. [51] These were sections 2(3), 3 and 4 of the pre-existing HKBORO. [52] Decision of 23 February 1997, §4. [53] The words in quotation marks are all taken from AC§172. [54] AC§183-184. [55] AC§§199-201. [56] AC§220. [57] AC§172. [58] JH Rayner Ltd v Department of Trade and Industry [1990] 2 AC 418 at 499. Applied in Re Chong Bing Keung (No 2) [2000] 2 HKLRD 571 at 582. [59] AC§202. [60] [1994] 1 HKLR 312 at 327. [61] [1994] 2 HKLR 202 at 208 on appeal from Wong King-lung. [62] Section F.3.2 above. [63] Adopted at the Twenty Fourth Session of the Standing Committee of the Eighth National People’s Congress on 23 February 1997. [64] “Prima facie” since Article 160 of the Basic Law envisages possible subsequent determinations of incompatibility: “If any laws are later discovered to be in contravention of this Law, they shall be amended or cease to have force in accordance with the procedure prescribed by this Law.” [65] (1999) 2 HKCFAR 4 at 41. [66] (1999) 2 HKCFAR 442 at 455. [67] (2000) 3 HKCFAR 459 at 470. [68] (2001) 4 HKCFAR 251. [69] Article 19(1): “The family is the natural and fundamental group unit of society and is entitled to protection by society and the State.” [70] By the joint judgment of Li CJ, Chan and Ribeiro PJJ and Sir Anthony Mason NPJ. [71] At p 260. [72] (2002) 5 HKCFAR 480 at §§21-22. [73] Chahal v UK (1996) 23 EHRR 413 at §73. For recent re-iterations see F v United Kingdom [2004] ECHR 723 (Application No 17341/03), 22 June 2004; and Al Husin v Bosnia and Herzegovina [2012] ECHR 232 (Application no 3727/08), 7 February 2012. [74] [2002] 1 WLR 3131 at §31. See also R (Ullah) v Special Adjudicator [2004] 2 AC 323 per Lord Bingham of Cornhill at §6 and per Lord Steyn at §30. [75] In Section G.6. [76] ICCPR Art 4.1: “In time of public emergency which threatens the life of the nation and the existence of which is officially proclaimed, the States Parties to the present Covenant may take measures derogating from their obligations under the present Covenant to the extent strictly required by the exigencies of the situation, provided that such measures are not inconsistent with their other obligations under international law and do not involve discrimination solely on the ground of race, colour, sex, language, religion or social origin.” Art 4.2: “No derogation from articles 6 [right to life], 7 [prohibition of torture and CIDTP], 8 (paragraphs 1 and 2) [prohibition of slavery and servitude], 11 [imprisonment for breach of contract], 15 [no retrospective criminal liability], 16 [right to recognition as a person] and 18 [freedom of thought, etc] may be made under this provision.” (Insertions in square brackets supplied) [77] Although the word “cruel” is not used in ECHR Art 3, to avoid confusion, I have continued to use the abbreviation “CIDTP” in relation to the ECHR even though strictly, the letter “C” should be eliminated. [78] Ireland v the United Kingdom [1978] ECHR 1, Judgment of 18 January 1978, Series A no 25, p 65, §163. [79] (1989) 11 EHRR 439 at §88. See also Chahal v UK (1996) 23 EHRR 413 at §79. [80] [2004] 2 AC 323 at §40. [81] [2000] 2 AC 228 at 252. [82] [2006] 1 AC 396 at §46. [83] (2004) 7 HKCFAR 187 at §66. [84] (1999) 2 HKCFAR 4. [85] At 28. [86] (1999) 2 HKCFAR 4 at 28-29. [87] (2002) 5 HKCFAR 480 at §24. [88] With Professor Malcolm Shaw QC, Mr Anderson Chow SC and Ms Grace Chow. [89] [1999] 1 AC 98 (PC). [90] At p 109. [91] (1999) 2 HKCFAR 4 at 25. [92] [2007] 2 AC 1. [93] See per Lord Hoffmann at §§51-53; per Lord Rodger of Earlsferry at §§57-60, 66-67. [94] With the exception of A (Torture Claimant) v Director of Immigration [2008] 4 HKLRD 752, where section 11 was not raised by the Director. [95] [1998] 1 HKLRD 729. [96] At p 748, per Litton VP for the Court. [97] Of 4 November 1994, §10. [98] BOR Art 15(3): Freedom to manifest one's religion or beliefs may be subject only to such limitations as are prescribed by law and are necessary to protect public safety, order, health, or morals or the fundamental rights and freedoms of others. [99] For example: F v United Kingdom (Application No 17341/03) [2004] ECHR 723) 22 June 2004; R (Ullah) v Special Adjudicator [2004] 2 AC 323, especially in Lord Steyn’s speech; Z and T v UK [2006] ECHR 1177. [100] HKBORO section 5; ICCPR Art 4 and ECHR Art 15. [101] Section J.2 of this judgment. [102] (1996) 23 EHRR 413 at §79. [103] [2010] 2 AC 110 at §6. [104] [2006] 1 AC 396 at §55. [105] (1989) 11 EHRR 439 at §86. [106] [2004] 2 AC 323 at §7. [107] At §9. [108] (1989) 11 EHRR 439. [109] At §85. [110] At §86. [111] At §87. [112] At §88. [113] At §88. [114] At §90. [115] At §91. [116] Examples include Chahal v UK (1996) 23 EHRR 413 at §73; F v United Kingdom [2004] ECHR 723; R (Ullah) v Special Adjudicator [2004] 2 AC 323 at §12. [117] [2012] ECHR 232 (Application no 3727/08), 7 February 2012 [118] Bossuyt and Humphrey, Guide to the “Travaux Préparatoires´of the ICCPR, 1987, pp 316-317 (Summary, Third Committee, 14th Session 1959); UNGA, Third Committee, 14th Session, 20 November 1959, A/C.3/SR 963 §3; [119] Communication No 204/1986, AP v Italy, §7.3; Communication No 692/1996, ARJ v Australia,§§ 4.11 and 6.4 [120] [2005] 3 HKC 447 at §29. [121] Yeung Chun Pong v Secretary for Justice (2006) 9 HKCFAR 836 at 849. [122] Referred to in Section C.2 above. [123] [2006] 1 AC 396 at §§53-55. [124] Soering v United Kingdom (1989) 11 EHRR 439 at §91. [125] R (Ullah) v Special Adjudicator [2004] 2 AC 323 at §24. [126] [2012] ECHR 232 (Application no 3727/08), 7 February 2012 at §50. [127] At §51. [128] This was an error as the Nigerian law prescribed 5 years imprisonment as the maximum and not the minimum sentence. [129] Reyes J at §108. [130] Reyes J at §110. [131] Reyes J at §§111 and 118. [132] Court of Appeal at §85. [133] (2002) 5 HKCFAR 356. [134] At §131.
Chief Justice Ma: 1. The appeal was dismissed by the Court at the conclusion of the appellant's submissions. I agree with the Judgment of Mr Justice Fok PJ containing the reasons for doing so. In relation to costs, since the appeal to the Court was legally aided, no order was made in relation to the costs of the appeal to the Court of Final Appeal. The respondent, however, asks for his costs in relation to the trial and to the appeal in the Court of First Instance. Deputy Judge Yau held there be no order as to these costs on account of the respondent having by his conduct brought suspicion on himself. We see no reason to disturb that order. Mr Justice Ribeiro PJ: 2. I agree with the reasons given by Mr Justice Fok PJ for dismissing this appeal. Mr Justice Tang PJ: Introduction 3. We dismissed the prosecution’s appeal at the conclusion of the hearing and these are my reasons. 4. On 15 September 2014, on the footbridge outside Fou Wah Centre, Tsuen Wan, New Territories, there was a cardboard structure, on which there were attached four posters, three measuring 0.3 m x 0.42 m and one 0.21 m x 0.3 m. The footbridge was on Government land, and the defendant was seen by a senior foreman of the Food and Environmental Hygiene Department (“FEHD”) promoting i-CABLE’s service plans to a woman next to the cardboard structure. He was charged with the offence of displaying the posters without the written permission of the Authority, contrary to ss 104A(1)(b), 104A(2) and 150 of the Public Health and Municipal Services Ordinance, Cap 132. 5. Section 104A provides: “(1) No bill or poster shall be displayed or affixed – (a) on any private land, except with the written permission of the owner or occupier thereof; (b) on any Government land, except with the written permission of the Authority. (2) A person displaying or affixing a bill or poster in contravention of subsection (1) commits an offence.” 6. Section 150 deals with the penalty and provides that where the offence is a continuing offence a daily fine may be levied for each day that the offence has continued. 7. The defendant was convicted after trial by Ms Lau Suk-han, Special Magistrate and was fined $2,000.00. On appeal, the defendant’s conviction was quashed by Deputy Judge Yau. He was unrepresented on both occasions. In brief, the learned judge quashed the conviction because, he was of the view that since the posters “had already been ‘displayed’ at the place in question before (the defendant’s) arrival”, even if the defendant had: “conducted promotional sales activities for i-CABLE in the proximity of the posters displayed there on that day, (he) would not regard him as the person who ‘displayed’ the posters.”[1] 8. On 1 February 2016, the Appeal Committee gave leave to appeal on the following certified question: “In the context of a prosecution for an offence of displaying a poster on Government land without written permission of the Authority (contrary to sections 104A(1)(b), 104A(2) and 150 of the Public Health and Municipal Services Ordinance, Cap. 132), what act or conduct by a defendant must the prosecution prove in order to satisfy the element of ‘displaying’?” 9. It was the common assumption of the parties that the posters had been displayed contrary to s 104A and that the sole question we had to resolve was whether the defendant’s conduct amounted to displaying the posters. We do not have the dimensions of the cardboard structure but a photograph was available. The cardboard structure rested on its own weight and was not attached to the footbridge. We have not had the benefit of adequate submission on the true meaning and effect of s 104A and I express no view on whether, on the facts of this case, the posters could be said to have been displayed on any Government land[2] within the meaning of s 104A.[3] I confine myself to considering whether the defendant by conducting promotional activities in close proximity to the posters could be said to have “displayed” the posters. Background 10. The uncontroversial fact was that the posters contained words, i-CABLE logos and particulars of the monthly service plans. The defendant was standing with a woman[4] “less than half a foot away from the cardboard structure”,[5] and “(he) was then wearing a purple and white top with an ‘i-CABLE’ logo printed on the front and back. The ‘i-CABLE’ logo on his top was identical to the one displayed on the posters.”[6] 11. The prosecution case was that because the defendant was promoting sales for i-CABLE within a reasonable distance of the posters, the defendant should be regarded as a person who was displaying the posters.[7] 12. The defendant denied that he was there promoting the sale of i-CABLE service but this explanation was rejected by the learned Deputy Judge,[8] and I proceed on the basis of the learned Deputy judge’s finding. Legislative History 13. Section 104A and related provisions were introduced pursuant to the Public Health and Urban Services (Amendment) Bill 1980 (“the bill”) which was designed “to make better provision for the control of bill-posting and to make a consequential amendment to the Summary Offences Ordinance.”[9] The amendment was to s 8 of the Summary Offences Ordinance by removing from s 8 the offence of “(affixing) any poster or other paper against or upon any building, wall, fence or paling”.[10] 14. The reason and purpose of the amendments could be gathered from what the Secretary for the Environment said at the second reading of the bill: “The existing controls over environmental nuisance caused by the indiscriminate posting of bills and posters are both limited in scope and ineffective. Although permission from the owner or occupier of land is necessary before a bill or poster can be displayed on that land, there is no provision in the law which requires the bill or poster to be maintained in a clean and tidy condition. Besides, enforcement is difficult since the offenders must be caught in the act of putting up the bill or poster before they can be prosecuted. This also means that the liability for the offence falls only on the bill-poster and not on other persons who could be regarded as being equally responsible, such as the employer of the bill-poster or persons whose goods or services are being advertised. … In order to consolidate and strengthen the control over the posting of bills therefore, it is intended in this Bill, in another sense (laughter), to make it an offence for any person to display any bill or poster on Crown or private land without the written permission of the Authority or of the owner or occupier of the land. It also provides that any bill or poster being displayed must be maintained in a clean and tidy condition. Failure to do so constitutes an offence and the Authority is empowered to remove any such posters and to recover the cost of removal from the offenders. Furthermore, the liability for the offences and any removal costs will fall not only on the bill-poster but also, in the case of unauthorized poster display, on the employer of the bill-poster and the person who benefits from the display of the poster; and, in the case of failure to maintain the poster in a clean and tidy condition, on the owner or occupier of the land and the person whose goods or services are advertised. This is considered necessary to ensure that the liability for these offences will fall on those persons who should be held responsible for the display and maintenance of the bill or poster. On the other hand, to protect those who might be concerned from being unfairly penalized, a person will not be liable for the offence, or the removal costs, if he can prove that the poster has been displayed without his knowledge or consent.” 15. Briefly stated, the amendments sought to create an offence of displaying a bill or poster,[11] catch persons responsible for its display, impose a duty on the person displaying the bill or poster to maintain it in a satisfactory condition and enable the Authority to remove offending bills or posters and recover the costs of any offending display. 16. I have already set out s 104A in full. I turn to the other provisions which were introduced at the same time, namely, ss 104B, 104C, 104D and 104E. All but s 104D require no more than a brief summary. 17. Section 104B requires any bill or poster displayed on private or government land to be maintained in a satisfactory condition, failing which a person commits an offence unless the bill or poster is removed within the period specified in the notice served on him/her by the Authority. 18. Section 104C enables a bill or poster not properly maintained to be removed by the Authority and the costs or potential costs of such removal to be recovered as a civil debt. 19. Section 104D is set out in full below: “(1) Where a person commits an offence against section 104A(1) the following persons shall be guilty of that offence in the same manner and to the same extent as if they had personally committed it - (a) any other person who uses the first-mentioned person to display or affix the bill or poster; and (b) any person whose goods, trade, business or other concerns are given publicity by the bill or poster: Provided that a person referred to in paragraphs (a) and (b) shall not be guilty of an offence under section 104A(1) by reason only that he uses the person to display or affix the bill or poster or that his goods, trade, business or other concerns are given publicity by the bill or poster, if he proves that it was displayed or affixed without his knowledge or consent. (2) For the purposes of sections 104B and 104C a person shall be deemed to display a bill or poster if- (a) the bill or poster is displayed on land of which he is the owner or occupier; or (b) the bill or poster gives publicity to his goods, trade, business or other concerns: Provided that a person shall not be guilty of an offence under section 104B or be liable for the cost of removal under section 104C by reason only that the bill or poster is displayed on land of which he is the owner or occupier, or that his goods, trade, business or other concerns are given publicity by the bill or poster, if he proves that it was displayed without his knowledge or consent.” 20. Section 104E contains definitions as well as identification of the Authority responsible for different Government land.[12] Discussion 21. As indicated above, the issue before us is whether, assuming, but not deciding, that the four posters had been displayed contrary to s 104A, the defendant’s conduct amounted to a display of those posters. Mr Martin Hui SC who appeared for the prosecution relied on s 19 of the Interpretation and General Clauses Ordinance, Cap 1 and submitted that we must give the word “display” such “fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit.” In the same spirit, this court explained in HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at 574: “12. The modern approach is to adopt a purposive interpretation. The statutory language is construed, having regard to its context and purpose.” 22. In this regard, I find the words of the then Secretary for the Environment helpful. His words showed quite plainly that one of the purposes, indeed, one might say, the primary purpose of s 104A, was to address the then deficiency of s 8 of the Summary Offences Ordinance, which in effect required the bill-poster to be caught red-handed. At the same time, s 104D was enacted to facilitate the prosecution of persons responsible for the display under s 104A. 23. Compare that with the prosecution’s suggested interpretation set out in para 59 of its case. This reads: “59. With regard to the question of law certified, the Respondent respectfully submits that the answer can be: ‘In the context of a prosecution for an offence of displaying a poster on Government land without written permission of the Authority (contrary to sections 104A(l)(b), 104A(2) and 150 of the Public Health and Municipal Services Ordinance, Cap. 132), in order to satisfy the element of “displaying” the prosecution must prove that a defendant has either: (a) unfurled, unfolded to view, exposed to view, or made visible or manifest the poster or done any act(s) or conduct(s) concerned directly with the physical setup of the poster; or (b) showed or exhibited; or described in words or explained the contents of, the poster which has already been on display without permission; or any other act(s) or conduct(s) concerned with the continuous display of the poster without permission.’” 24. Mr Hui confirmed it was not the prosecution case that the defendant had used someone else to affix or display the posters and we are not concerned with s 104D(1)(a). In other words, he was not responsible for the actual affixing or consequential display. 25. The prosecution’s formulation can give rise to important considerations which do not arise in this case. I say nothing about para (a) in the prosecution’s suggested answer. The proper ambit of the offence created by s 104A not having been addressed in the submissions, it would be inappropriate for me to attempt to answer the certified question. Nor would I consider the remaining formulation at any length. Suffice it to say, in my view, for the purpose of this appeal, the word display could not be stretched to cover the facts of this case, namely, that the defendant by promoting the business of i-CABLE in close proximity to the posters was thereby displaying the posters. Mr Hui submitted that s 104A would be robbed of much of its force unless we were to read it to cover someone like the defendant. I think it is clear the primary target of “display” in s 104A is the person who caused the posters to be displayed such as the person whose business was given publicity by the posters. Mr Hui said prosecution of i-CABLE would be difficult. I express no view about that but that is no reason to give “display” a meaning it does not bear. Here, the defendant who had neither affixed nor caused the posters to be displayed could not be regarded as displaying the posters. Mr Hui submitted that any person who “described in words or explained the contents of, the poster which has been on display without permission” should be regarded as displaying the posters. It is not clear from the formulation whether the prosecution must prove that the defendant knew that the posters were displayed without permission. But it is unnecessary to explore the formulation further, like Fok PJ, whose judgment I have had the benefit of reading in draft, I do not accept that the word “display” construed having regard to its context and purpose could extend so far. 26. For these reasons, I dismissed the appeal. Mr Justice Fok PJ: A. Introduction 27. It is an offence to display or affix a bill or poster on private or Government land without relevant written permission by reason of s.104A of the Public Health and Municipal Services Ordinance.[13] This provides that: “(1) No bill or poster shall be displayed or affixed - (a) on any private land, except with the written permission of the owner or occupier thereof; (b) on any Government land, except with the written permission of the Authority. (2) A person displaying or affixing a bill or poster in contravention of subsection (1) commits an offence.” The offence is punishable by a fine at level 3 and a daily fine of $300 is applicable for each day during which it is proved to the satisfaction of the court that the offence has continued.[14] 28. The present appeal raises the question of what act or conduct the prosecution must establish in order to satisfy the element of displaying such a bill or poster. Specifically, is the word “display” to be given a wide meaning to include the conducting of promotional sales activities by reference to the bill or poster, as contended by the prosecution, or is it to be given a narrower meaning than that, as held by the Judge? And if a narrower meaning, what meaning should be given to it? B. The relevant background facts and proceedings below 29. At the time of the alleged offence, the respondent was an employee of i-CABLE Communications Limited (“i-CABLE”). He was observed, by a foreman of the Food and Environmental Hygiene Department, to respond to a woman’s inquiries concerning broadband service installation plans for village houses next to a cardboard structure on which there were four posters (three of A3 size and one of A4 size) advertising i-CABLE’s services. The place where he was doing so, and where the posters were situated, was on a Government footbridge in Tsuen Wan. The cardboard structure bearing the posters had been placed there without the permission of the relevant authority.[15] He was issued with a fixed penalty ticket for the offence. 30. The Magistrate convicted the respondent of the offence under s.104A(1)(b) and (2) and fined him $2,000.[16] The Magistrate did not explain what she understood the word “display” to mean but the Judge understood that, notwithstanding her conviction of the respondent, she gave it a narrower construction than that put forward by the prosecution.[17] 31. On appeal to the Court of First Instance,[18] the Judge found that the respondent did not set up the cardboard structure with the posters in question and that it had been placed on the footbridge before his arrival[19] but upheld the Magistrate’s finding that the respondent was promoting i-CABLE’s services to the woman next to the posters.[20] The Judge rejected the prosecution’s argument that carrying out such promotional sales activities next to the posters was sufficient to constitute the “displaying” of the posters under s.104A and therefore allowed the respondent’s appeal and quashed his conviction. The Judge gave the word “display” a more restrictive meaning and held that, by standing next to the posters and carrying out promotional sales activities by reference to them, the respondent had not displayed the posters in question.[21] 32. The Appeal Committee granted leave to appeal to the prosecution in respect of the following question of law of great and general importance certified by the Judge, namely: “In the context of a prosecution for an offence of displaying a poster on Government land without written permission of the Authority (contrary to sections 104A(1)(b), 104A(2) and 150 of the Public Health and Municipal Services Ordinance, Cap. 132), what act or conduct by a defendant must the prosecution prove in order to satisfy the element of ‘displaying’?”[22] C. The issue in this appeal 33. The issue that has been raised in this appeal is one of statutory construction of the word “displayed” in s.104A(1). As it did below, the prosecution contended for a wide meaning of the word in that provision. Mr Martin Hui SC[23] submitted, relying on s.19 of the Interpretation and General Clauses Ordinance,[24] that the word “display” should be construed to include not just “physical display” but also what was referred to as “perceptive display”. The prosecution’s submission as to these two forms of display was set out in the appellant’s written case. It was submitted that: (1) Physical display occurs when a defendant has “unfurled, unfolded to view, exposed to view, or made visible or manifest the poster or done any act(s) or conduct(s) concerned directly with the physical setup of the poster”; and (2) Perceptive display occurs when a defendant has “show[n] or exhibited; or described in words or explained the contents of, the poster which has already been on display without permission; or any other act(s) or conduct(s) concerned with the continuous display of the poster without permission”.[25] 34. As a preliminary observation, it is to be noted that the respondent was unrepresented at trial and on appeal to the Court of First Instance. The question of law on which leave to appeal to this court was granted proceeded on the footing that the placing of the cardboard structure bearing the posters in the present case constituted a display of a bill or poster on Government land and no point was taken that it did not do so. No argument challenging those assumptions arises for consideration in this appeal. D. The proper construction of “displayed” in s.104A(1) 35. To answer the issue of statutory construction before it, the court must construe the language used in the light of its context and purpose. This is the modern approach to statutory construction which has been repeatedly endorsed and applied by this court.[26] 36. As a matter of language, the word “display” can embrace a narrow meaning limited to the act of exposing the subject of the display to view (“unfurl, unfold to view; expose to view, make visible; show, exhibit”)[27] or a wider meaning including also the act of expounding or explaining the subject of the display (“describe in words, unfold in narrative; expound, explain”).[28] Hence, resort to the context and purpose of s.104A(1) is critical to its proper construction. D.1 The statutory purpose of s.104A 37. The Long Title of the Ordinance states that it is “[t]o make provision for public health and municipal services”. Part IX of the Ordinance is headed “Advertisements, Decorations and Signs”. It consists of seven sections, viz. ss.104, 104A, 104B, 104C, 104D, 104E and 105. The scheme of Part IX is: to provide power for the Secretary for Food and Health[29] to make regulations for the control of advertisements (s.104); to prohibit the display of bills or posters without permission (s.104A); to impose a duty to maintain a bill or poster displayed in a clean and tidy condition (s.104B); to empower the Secretary to remove a bill or poster displayed in contravention of ss.104A or 104B and to recover the cost of doing so from the person displaying the bill or poster (s.104C); to deem certain additional persons to display bills or posters (s.104D); to provide relevant definitions (s.104E); and to empower the Director of Buildings[30] to serve notices on owners of a hoarding, scaffolding or structure to remove or repair the same if dangerous or a fire hazard (s.105). 38. There are at least two different purposes disclosed within the provisions in Part IX. In s.105, the focus is on safety. In ss.104 to 104E, however, the focus is on the aesthetics and amenities of places and buildings in Hong Kong, covering both the cityscape and rural landscape, and the avoidance of what can be described as environmental nuisance. Thus, s.104(1) provides: “(1) Without prejudice to any other enactment relating to advertisements, decorations or signs, the Authority may make regulations restricting, regulating or prohibiting the exhibition of advertisements, decorations or signs of any kind whatsoever, and, in particular, may make regulations restricting, regulating or prohibiting the exhibition thereof in such places or in such manner or by such means as, in the opinion of the Authority, may affect injuriously or disfigure – (a) the amenities of any place or locality; (b) the natural beauty of a landscape; (c) the view from any highway, railway, tramway, ferry or from any public place or water; (d) the amenities of any village; (e) the amenities of any historic or public building or monument or of any place frequented by the public solely or chiefly on account of its beauty or historic interest.” 39. This purpose is also clear from the speech of the Secretary for the Environment, when moving the Public Health and Urban Services (Amendment) Bill 1980,[31] which introduced ss.104A to 104E into Part IX of the Ordinance. Amongst other things, he said: “ The existing controls over environmental nuisance caused by the indiscriminate posting of bills and posters are both limited in scope and ineffective. Although permission from the owner or occupier of land is necessary before a bill or poster can be displayed on that land, there is no provision in the law which requires the bill or poster to be maintained in a clean and tidy condition. Besides, enforcement is difficult since the offenders must be caught in the act of putting up the bill or poster before they can be prosecuted. This also means that the liability for the offence falls only on the bill-poster and not on other persons who could be regarded as being equally responsible, such as the employer of the bill-poster or persons whose goods or services are being advertised. … In order to consolidate and strengthen the control over the posting of bills therefore, it is intended in this Bill, in another sense (laughter), to make it an offence for any person to display any bill or poster on Crown or private land without the written permission of the Authority or of the owner or occupier of the land. It also provides that any bill or poster being displayed must be maintained in a clean and tidy condition. Failure to do so constitutes an offence and the Authority is empowered to remove any such posters and to recover the cost of removal from the offenders. …” 40. As the above extract also makes clear, the amendments were to address the difficulty of enforcement by extending the reach of the offence beyond those persons “caught in the act of putting up the bill or poster” by also catching “other persons who could be regarded as being equally responsible, such as the employer of the bill-poster or persons whose goods or services are being advertised”. Nevertheless, the focus remained on the control “over the posting of bills”, i.e. the physical act of putting them up. D.2 The context of s.104A 41. The Secretary for the Environment’s references to the limitations of the existing controls and the need to catch the offender in the act of putting up the bill or poster was a reference to s.8(b) of the Summary Offences Ordinance[32] which provided that: “Any person who – … (b) without the consent of the owner or occupier affixes any poster or other paper against or upon any building, wall, fence or paling; or writes upon, soils, defaces or marks any building, wall, fence or paling with chalk or paint or in any other way whatsoever; or wilfully breaks, destroys or damages any part of any building, wall, fence or paling, or any fixture or appendage thereof; … shall be liable to a fine of $500 or to imprisonment for 3 months.” (Underlining added) 42. The above-underlined portion of s.8(b) of the SOO was clearly limited in that it required proof that the person had himself affixed a poster to a building (etc.). Hence, unless he was caught in the act of putting the poster up, it would be virtually impossible (absent an admission) to convict a person under s.8(b). Another limitation was that unless the poster was “affixed”, i.e. actually attached or adhered to the building (etc.), the offence would not be committed. 43. It was clearly to address these concerns that the 1980 amendments to the Ordinance were introduced. First, s.104A substituted the above-underlined part of s.8(b) of the SOO (which was deleted[33]) with a provision that targeted the displaying or affixing of a bill or poster on land. Doing so extended the reach of the offence to those bills or posters that were put up (“displayed”) but were not actually attached or adhered (“affixed”) on private or Government land. Secondly, s.104D(1) extended the reach of the offence by deeming certain other persons to have displayed the bill or poster by providing: “(1) Where a person commits an offence against section 104A(1) the following persons shall be guilty of that offence in the same manner and to the same extent as if they had personally committed it – (a) any other person who uses the first-mentioned person to display or affix the bill or poster; and (b) any person whose goods, trade, business or other concerns are given publicity by the bill or poster: Provided that a person referred to in paragraphs (a) and (b) shall not be guilty of an offence under section 104A(1) by reason only that he uses the person to display or affix the bill or poster or that his goods, trade, business or other concerns are given publicity by the bill or poster, if he proves that it was displayed or affixed without his knowledge or consent.” 44. By reason of these amendments, greater control over environmental nuisance than that provided by s.8(b) of the SOO was achieved since the combined effect of ss.104A and 104D(1) of the Ordinance was to provide a comprehensive scheme to catch: (1) the person physically putting up the bill or poster (whether it be attached or adhered (“affixed”) or put up or posted (“displayed”)); (2) any other person employing or instructing that person in (1) to put up the bill or poster; and (3) the person whose goods, trade, business or other concerns are given publicity by the bill or poster. 45. It is to be noted that, whilst the deeming provision in s.104D(1) requires “a person” (referred to as “the first-mentioned person”) to have committed an offence against s.104A, it is not necessary, in order for liability under s.104D(1) to be established, for the first-mentioned person to be identified or charged with the offence under s.104A. It is sufficient if the facts disclose that the offence has been committed by someone, for example that a bill or poster has been affixed on Government land without relevant written permission. Thus, in the present case, although the person who actually physically set up the posters in question is unknown, this would not prevent s.104D(1) deeming either (i) any other person who used him for that purpose, or (ii) i-CABLE, whose business was thereby given publicity, from being charged with the offence. 46. The legislative strategy that was adopted to address the perceived mischief of environmental nuisance and enforcement difficulties arising under s.8(b) of the SOO was to deem others to have committed the offence under s.104A even where those others were not physically involved in the displaying or affixing of the bill or poster. Given this legislative strategy, there is no good reason to adopt a wider meaning of “displayed” in s.104A to embrace perceptive display as well as physical display: even where the person who physically set up the poster is unknown, the deeming provision in s.104D will enable enforcement action to be taken against one or more other persons. 47. Reference may also be made to the definition of “bill or poster” in s.104E(4) of the Ordinance which provides: “In this Part, ‘bill or poster’ (招貼或海報) includes any word, letter, model, sign, placard, board, notice, device or representation and also includes any advertisement painted on any wall, fence, railing, post, rock, road-cutting or tree but does not include any structure, apparatus or hoarding used for the display of a bill or poster.” The word “display” in s.104E(4) is clearly there used in the sense of physical display and does not suggest any support for its use as indicating perceptive display. D.3 Conclusion as to the proper construction of s.104A(1) 48. In view of the above context and purpose of s.104A of the Ordinance, the word “displayed” in s.104A(1) should not be given the wider construction urged by the prosecution. On the contrary, the Judge’s narrower construction is to be preferred, so that to come within s.104A(1), the act of displaying, albeit not requiring attachment or adherence of the bill or poster to the land, has to concern the physical set up or putting up of the bill or poster. E. Miscellaneous arguments raised by the prosecution 49. In the written Case for the Appellant and in the course of Mr Hui’s oral submissions, the prosecution advanced various arguments to support its wider construction. With respect, none of those arguments suggest that the conclusion reached above is incorrect or that “displayed” should be construed in s.104A(1) of the Ordinance to include perceptive display. 50. I do not accept the submission that the Secretary for the Environment’s speech (above) supports a wider meaning of “display”. [34] Whilst the concept of “displaying” was included to widen the ambit of the offence, to broaden the offence beyond “affixing”, it was not used in contradistinction to physical set up. The point made by the Secretary for the Environment as to the need to make liable others who could be regarded as equally responsible was addressed by the addition of s.104D(1). 51. The prosecution relied on the cases of Mcgahan v Windsor & Maidenhead Borough Council[35] and R v Newcastle-upon-Tyne Gaming Licensing Committee, ex parte White Hart Enterprises Ltd[36] to support its submission that perceptive display is included within s.104A.[37] However, those cases are to be read in their proper contexts. They were concerned with the meaning of “display” in the context of planning permission and licensing for gaming purposes respectively and do not provide a meaning of “display” in all contexts. They do not assist the construction of s.104A(1). 52. The prosecution relied on the fact that a daily fine is imposed for contravention of s.104A(1) to support the submission that the offence is a continuing one and therefore one which can be committed by perceptive display.[38] The s.104A offence may properly be seen as continuing, hence the daily fine. However, it does not follow from this that “displayed” should be construed as including perceptive display. The facts relating to the commission of the offence in a particular case (and which may last only a few hours) may not involve the continuity of all the elements of the offence so as to make it a continuing offence and this is reflected in the one-off penalty stipulated in the second column of the Ninth Schedule of the Ordinance (i.e. a fine at level 3). 53. It was submitted that the decision of Jeremy Poon J (as he then was) in Chee Fei Ming v Director of Food and Environmental Hygiene[39] showed that the purpose of s.104A was to criminalise and eradicate the unauthorised use of Government land for the continuous display of posters without permission.[40] However, the conclusion that s.104A is concerned with the physical display of a bill or poster and not perceptive display is not inconsistent with that statutory purpose. This judgment does not address any of the issues raised in either the first instance or Court of Appeal judgments inthat case and no issue of constitutionality of s.104A has been raised in this appeal. 54. The prosecution submitted that if “displaying” in s.104A was limited to physical display, this would overlap with the offence of “affixing” a bill or poster and would therefore be redundant.[41] However, that does not, with respect, follow. As explained above, “display” is different to “affix” because it does not require attachment or adherence. There is no redundancy in construing “display” in s.104A as limited to physical display rather than perceptive display. 55. It was submitted that a narrow construction of “displayed” would lead to anomalous results in that a salesperson like the respondent could escape liability for a bill or poster whilst the person who physically set it up and whose goods were being advertised would not.[42] In his oral submissions, Mr Hui submitted that this would be “a problem” in that it would dent the effectiveness of the offence. However, it is questionable whether this is an anomaly or problem as submitted. In the present case, for example, it is not clear why i-CABLE was not prosecuted under s.104D(1)(b). Had this occurred, responsibility for the posters in question would, subject to the proviso in s.104D(1), have been placed on the entity which would appear to have most benefitted from their unauthorised posting. It may be that it would be of greater prosecutorial convenience to be able to issue a fixed penalty ticket on the spot to the person conducting the perceptive display, but this does not compel the construction contended for by the prosecution. In any event, regardless of the offence provisions, the Government retains the ability to remove an unauthorised bill or poster under s.104C. 56. The prosecution also sought to rely on the provisions of ss.1(1) and 6 of the Advertisements Regulation (Cap.132B) to support its construction of “displayed” in s.104A.[43] However, s.1(1) of the Regulation which makes it an offence to “affix or otherwise exhibit any hoarding, notice board or poster” without relevant consent simply demonstrates that “affixing” without more is a limited concept and that there is therefore a need to regulate an advertisement which is “otherwise” exhibited, i.e. not just by being affixed in place. 57. Finally, it was submitted that since criminalising the unauthorised use of Government land was the clear objective of s.104A, the wider construction of “displayed” was to be preferred.[44] The statutory purpose of s.104A has been addressed above. Even if one of the objectives is the criminalisation of such use of Government land, this is not a strong reason for adopting the prosecution’s wide construction of “displayed”, which is otherwise inconsistent with the clear meaning of the word construed in accordance with its context and purpose. If it had been the wish to extend the offence to someone in the position of the respondent, suitable words would no doubt have been employed in s.104A or s.104D. F. Conclusion 58. These are the reasons which led me to dismiss this appeal. 59. On the question on which leave to appeal was granted, I would conclude that, in the context of a prosecution for the offence of displaying a poster on Government land without written permission of the Authority, some act or conduct concerned directly with the physical set up or putting up of the bill or poster is required in order to satisfy the element of “displaying”. There being no evidence that the respondent had done any such act or conduct, his conviction by the Magistrate was properly overturned by the Judge. Mr Justice Gleeson NPJ: 60. I agree with the reasons given by Mr Justice Fok PJ for dismissing this appeal. Mr Martin Hui SC, DDPP, and Mr Raymond Cheng, ADPP (Ag), of the Department of Justice, for the Appellant Mr Jackson Poon, instructed by ONC Lawyers, assigned by the Director of Legal Aid, for the Respondent [1] Para 36, CFI Judgment. [2] Land is defined in s 104E. [3] Such consideration would require detailed consideration and should await a proper case. [4] The woman was overheard by a prosecution witness to be enquiring about broadband service installation plans for village houses. Para 5, CFI Judgment. The conversation was not denied although according to the defendant he was waiting to meet his supervisor at the footbridge and the woman thought he was on duty there. [5] Para 3, CFI Judgment. [6] Para 4, CFI Judgment. [7] Para 13, CFI Judgment. [8] Para 16, CFI Judgment. [9] Secretary for the Environment when moving the bill. [10] Section 6 of Public Health and Urban Services (Amendment) Ordinance, Ordinance No. 7/80. [11] This may be a continuing offence. [12] There are extensive definitions of “land”, “bill or poster” which are not necessary to be considered in this appeal. [13] (Cap.132) (“the Ordinance”). [14] See, s.150 and the Ninth Schedule of the Ordinance; s.150 provides: “Any person who is guilty of an offence under any of the provisions of this Ordinance specified in the first column of the Ninth Schedule shall be liable on summary conviction to the penalty specified in relation thereto in the second column of that Schedule, and, where the offence is a continuing offence, shall be liable, in addition, to the fine specified in relation thereto in the third column of that Schedule for each day during which it is proved to the satisfaction of the court that the offence has continued.” [15] Namely, the Secretary for Food and Health, being the designated Authority within s.104A of the Ordinance: see s.2 “Authority”; s.3 “Designation of Authorities”; and Third Schedule “Designated Authorities”. [16] TWR 16/2014, before Ms Lau Suk-han, Special Magistrate. [17] CFI Judgment at [26]-[27]. [18] In HCMA 208/2015, before HH Judge Douglas Yau, Judgment dated 17 July 2015. [19] CFI Judgment at [35]. [20] Ibid. at [34]. [21] Ibid. at [36]. [22] HCMA 208/2015, Judgment dated 1 September 2015; FAMC 40/2015, Determination dated 1 February 2016 (Ribeiro, Tang and Fok PJJ). [23] Deputy DPP, appearing with Mr Raymond Cheng, Assistant DPP (Ag.), for the appellant. [24] (Cap.1), providing: “An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit.” [25] Case for the Appellant at [42] and [59]. [26] See, e.g., Medical Council of Hong Kong v Chow Siu Shek (2000) 3 HKCFAR 144 at 154B-C; HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at [11]-[14]; HKSAR v Fugro Geotechnical Services Ltd (2014) 17 HKCFAR 755 at [19]. [27] Shorter Oxford English Dictionary (6th Ed.) Vol.1 at p.711. [28] Ibid. [29] The Secretary for Food and Health (“the Secretary”) being the designated “Authority” (see ss.2, 3 and Schedule 3 of the Ordinance) for the purposes of s.104. [30] The Director of Buildings being the designated “Authority” (see ss.2, 3 and Schedule 3 of the Ordinance) for the purposes of s.105. [31] Hong Kong Legislative Council, Official Report of Proceedings, 30 January 1980 at pp.354-355. [32] (Cap.228) (“the SOO”). [33] Public Health and Urban Services (Amendment) Ordinance 1980 (Ord. No. 7/80), s.6. [34] Case for the Appellant at [40]. [35] [2002] All ER (D) 190; [2002] EWHC 1551 (Admin). [36] [1977] 1 WLR 1135. [37] Case for the Appellant at [41]. [38] Ibid. at [46]-[47], [50]; Supplemental Case for the Appellant at [15]. [39] [2014] 5 HKLRD 771; that decision has been the subject of an appeal to the Court of Appeal in CACV 219/2014 (heard together with CACV 220/2014), in which judgment was handed down on 6 June 2016. [40] Case for the Appellant at [48]. [41] Ibid. at [49]. [42] Ibid. at [54]. [43] Supplemental Case for the Appellant at [9]-[14]. [44] Case for the Appellant at [58].
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Fok PJ. Mr Justice RibeiroPJ: 2. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Tang PJ: 3. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ : 4. This appeal arose out of an action for libel brought against a distributor of a periodical magazine and raised an important question as to the ambit of the defence of innocent dissemination in the law of defamation. The appellant sought to rely on that defence to avoid liability to the respondent but the courts below held that it did not avail the appellant in this case. 5. After hearing counsel for the appellant,[1] the court dismissed the appeal with costs and indicated that it would hand down its reasons for doing so in due course. A. The facts 6. The action, being for libel, concerned words printed in a fortnightly magazine known as “Caijing” (“the Magazine”). The Magazine was founded in 1998 and originally published in Beijing by an entity established by a Mr Wang Boming known as the “Stock Exchange Executive Council” (“SEEC”). By the time of the publication giving rise to the action, the Magazine was published in Beijing by a company known as “Beijing Caijing Magazine Limited” (“the Publisher”) and SEEC continued to have a role in relation to the governing and management of the Magazine. 7. The respondent is a prominent businesswoman and well-known philanthropist in Hong Kong and the Mainland. She participates in charitable activities organised by the Li Ka Shing Foundation and also by a foundation bearing her own name. 8. The words giving rise to the respondent’s action for libel appeared in two articles contained in Issue No.265 of the Magazine dated 7 June 2010. The articles were respectively entitled (in translation) “Alliance of the newly appointed officials (or VIP)” and “Middle Chapter: Two-way Tollbooth” and the issue in question carried a cover which bears a banner title reading (in translation): “Alliance of the newly appointed officials (or VIP). How did a group of young technocrats who stretched across business, commercial-industrial and forex sectors set up the two-way tollbooth on foreign investment approval, involving the richest Chinese man Li Ka Shing, the richest man in China Huang Guang Yu and also famous enterprises such as Siemens, Philips and Capital Group.” The second article referred to the respondent by name and alleged that she had engaged in corruption by paying US$500,000 by way of a “consultancy fee”, part of which was intended by her to be distributed to a senior government official in Mainland China for assisting in the approval of projects related to Cheung Kong (Holdings) Limited by the Mainland authorities. That article also alleged that the respondent had admitted to the police that she had paid the US$500,000 “consultancy fee”. 9. The appellant is a company incorporated in the Cayman Islands whose shares are listed on the Hong Kong Stock Exchange. It is a holding company of a group of subsidiaries, including the company having the exclusive advertising rights for the Magazine. There is a close connection between the appellant and the Publisher. Its four directors, who include Mr Wang, are also directors of the Publisher. Mr Wang is the chairman and chief executive officer of the appellant, the chairman and legal representative of the Publisher and the editor-in-charge of the Magazine and chief executive officer of SEEC. The offices used by the appellant, the Publisher and SEEC in Beijing are all located on different floors of the same building. 10. In Hong Kong, the appellant handled the subscriptions of the Magazine here and overseas (excluding China) and its distribution to such subscribers, of which there were about 180. Distribution of the Magazine by the appellant occurred in the following manner: (1) At the material time, the appellant had a small office in Hong Kong with two employees. For each issue of the Magazine, one of the appellant’s employees, a Ms Chan, would prepare envelopes with address labels and postage for subscribers overseas and for those in non-commercial areas of Hong Kong. For the local subscribers in commercial areas, Ms Chan prepared address labels. (2) Ms Chan would then give all the envelopes and labels to a courier company, EDS Express Co., who in turn would collect a number of copies of the Magazine from a newspaper distributor, Chan Sun Kee Books And Newspaper Ltd. (“Chan Sun Kee”), to whom copies were delivered directly from the printer in Shenzhen. The courier company would then put the subscribers’ copies of the Magazine into the envelopes prepared by Ms Chan or stick the address labels she had prepared onto the plastic wrapping of the Magazine. The courier company would then deliver or post the subscribers’ copies of the Magazine. (3) The appellant’s two employees in Hong Kong would only receive copies of each issue of the Magazine after they had been distributed by the courier when Chan Sun Kee would return the left-over copies about two or three days after the bulk of the copies of the Magazine had been dispatched to newsagents for sale, or delivered or posted to subscribers by the courier. B. The proceedings below 11. At trial in the Court of First Instance,[2] the appellant did not contest the defamatory nature of the words complained of and the Recorder found that those words were defamatory of the respondent “in a serious way” in that they suggested that she was involved in paying bribes to corrupt officials on the Mainland in her capacity both as a good friend of Mr Li Ka Shing and as a director of the Li Ka Shing Foundation in return for favours shown or facilities granted to Mr Li’s companies.[3] 12. Instead, the main issue at trial was whether the appellant, as a distributor of the Magazine, was liable to the respondent for the libel or whether it could avail itself of the defence of innocent dissemination. The Recorder rejected the appellant’s argument that the defence was only defeated where a subordinate publisher distributed with knowledge that the material contained an actionable libel on the plaintiff to which there was no defence.[4] He held that the appellant was not entitled to rely on the defence of innocent dissemination because he found that its ignorance of the “libellous material” was due to its negligence in adopting a system whereby it did not vet the issues of the Magazine distributed by it in any manner.[5] He also held that the appellant failed to prove that it did not in fact know the relevant issue of the Magazine “contained the libel complained of” before it caused copies to be distributed to the subscribers in Hong Kong and overseas, so that the defence of innocent dissemination failed regardless of any negligence.[6] 13. The Recorder gave judgment for the respondent and awarded damages in her favour in the sum of HK$650,000. 14. On appeal to the Court of Appeal,[7] the only issue was whether the defence of innocent dissemination relieved the appellant of liability for the libel. The appellant contended, as it had at trial, that a subordinate distributor should not be held liable for a libel unless he knew or ought to have known that the material distributed contained an actionable libel on the plaintiff to which there was no defence. 15. Cheung JA, delivering the only reasoned judgment (with which Yeung VP and Chu JA agreed), rejected the appellant’s contention as to the ambit of the defence of innocent dissemination and concluded that the defence was not available because, upholding the Recorder, he held that the appellant’s lack of knowledge “of the defamatory content” was due to its negligence.[8] Having held the appellant to have been negligent, Cheung JA dismissed the appeal and declined to address the issue of whether the appellant had actual knowledge of the defamatory matter through attribution of Mr Wang’s knowledge of the libel.[9] C. The question of law for which leave to appeal was granted 16. The Court of Appeal dismissed the appellant’s application for leave to appeal to this Court[10] and the appellant renewed its application to the Appeal Committee which granted leave to the appellant to appeal to this Court on the following question of law of great general or public importance, namely: “What is the nature of the knowledge possessed by a secondary publisher or which, taking reasonable care, a secondary publisher would have acquired, which suffices to exclude such secondary publisher from relying on the defence of innocent dissemination? In particular, must it be knowledge simply that the publication contains a statement which carries a defamatory meaning; or must it be knowledge that the publication contains an actionable libel subject to no valid defences?”[11] 17. As can be seen, the question posits two alternative states of knowledge for the defence of innocent dissemination, namely: (i) knowledge that the publication contains a statement carrying a defamatory meaning; and (ii) knowledge that the publication contains an actionable libel subject to no valid defences. It was the appellant’s case that the correct answer to the question is (ii) and that, since the courts below did not exclude reliance on the defence on the basis of such knowledge, the judgments below must be set aside and a re-trial ordered. Alternatively, the appellant invited us to go further and hold that, on any view of the evidence, it could not be said that the appellant was negligent in not knowing that the Magazine contained an actionable libel to which there was no defence and that, whatever Mr Wang’s state of knowledge, this could not be attributed to the appellant. On that basis, the appellant invited us to set aside the judgments below and dismiss the action altogether. 18. To put the question into its proper context, it is useful to review some of the general principles applying to the law of defamation relating to libel and publication and the defence of innocent dissemination. D. Libel and publication 19. Subject to the balance that needs to be struck to protect freedom of expression, the law of defamation seeks to protect a person’s reputation, it being recognised that it is necessary to afford such protection against untrue statements which lower that person in the estimation of right-thinking members of society generally.[12] In Hong Kong, the law of defamation is governed by the common law as modified by the provisions of the Defamation Ordinance.[13] A defamatory statement may be made orally, in which case it constitutes the tort of slander, or in writing, in which case it constitutes the tort of libel. One of the necessary elements of either tort is publication of the defamatory matter complained of. 20. In Oriental Press Group Ltd v Fevaworks Solutions Ltd,[14] Ribeiro PJ (with whom the other members of the court agreed) comprehensively reviewed the law relating to what constitutes publication of a libel.[15] As there pointed out (at [19]), until mitigated by the common law defence of innocent dissemination, liability for publishing a libel was strict: “A person was held liable for publishing a libel if by an act of any description, he could be said to have intentionally assisted in the process of conveying the words bearing the defamatory meaning to a third party, regardless of whether he knew that the article in question contained those words.” (Emphasis added) 21. At common law, as a matter of general principle, the person who first spoke or composed the defamatory matter, who may be called the originator, is liable provided he intended to publish it or failed to take reasonable care to prevent publication. Liability extends to any person who participated in, secured (e.g. by encouraging or procuring) or authorised the publication, including the printer of a defamatory work.[16] These persons may all be referred to as the first or main publishers (to distinguish them from subordinate publishers, which are addressed below) and, in a newspaper or magazine setting, the journalist, editor, printers and (vicariously) the newspaper proprietor are all treated as the first or main publishers.[17] 22. Liability for the publication of defamatory material at common law is strict and so a first or main publisher is liable for the tort of libel unless, broadly, he establishes a defence such as justification or honest comment or demonstrates that the publication was on an occasion of privilege or establishes one of the specific defences available under the Defamation Ordinance. 23. It was in order to mitigate against the harshness of the publication rule as it applies to first or main publishers that the common law developed the defence of innocent dissemination.[18] This defence is available to a person who is not the author, printer or first or main publisher of a work which contains a libel but who only takes a subordinate part in disseminating it, for example by selling, distributing or handing to another a copy of the newspaper or book containing it.[19] Such distributors, or subordinate publishers, can avoid liability for the publication if they establish the elements of the defence (addressed below). 24. Apart from the first or main publishers and subsidiary publishers, the common law also recognises that persons may be involved as intermediaries in the publication of defamatory matter but simply as mere conduits that do no more than fulfil the role of a passive medium for communication. A telephone carrier is an example of this type of intermediary, which may be referred to as a mere facilitator.[20] Such an intermediary does not publish at all and therefore has no need for the mitigating defence of innocent dissemination. 25. In the present case, it was accepted by the appellant that it was a subordinate publisher of the Magazine and it was not contended (by the respondent) that the appellant was either a first or main publisher, who would be strictly liable for publishing the defamatory statements complained of, or (by the appellant) that it was a mere facilitator, who would not have published them at all. E. The defence of innocent dissemination E.1 The elements of the defence as identified in Fevaworks 26. As a subordinate publisher, the appellant could avoid liability if it were able to establish the elements of the defence of innocent dissemination. In Fevaworks, Ribeiro PJ identified those elements by reference to the judgment of Romer LJ in Vizetelly v Mudie’s Select Library Ltd,[21] namely the subordinate publisher must show: (1) that he was innocent of any knowledge of the libel contained in the work disseminated by him; (2) that there was nothing in the work or the circumstances under which it came to him or was disseminated by him which ought to have led him to suppose that it contained a libel; and (3) that, when the work was disseminated by him, it was not by any negligence on his part that he did not know that it contained the libel. The onus lies on the subordinate publisher to prove the elements of the defence. Where he does so, Ribeiro PJ held that, although he will have published the libel, he will not be responsible for it.[22] 27. Ribeiro PJ drew attention to two important features of the defence: first, that it is not available to the first or main publisher but only to persons who, in the ordinary course of business, play a subordinate part in disseminating it; and secondly, that, for this class of persons, it replaces the strict liability rule with one which imposes liability on the basis that the person playing the subordinate role knew or ought by the exercise of reasonable care, in the circumstances in which the work came to him or was disseminated, to have known that the article disseminated contained defamatory material.[23] 28. In this appeal, it was accepted by both parties that the defence of innocent dissemination is correctly stated in Fevaworks and it was not suggested that the Court should depart in any way from its decision in that case as to the nature and elements of the defence. Instead, the question of law which is raised by the appellant’s case in this appeal relates to an aspect of the defence not directly addressed in Fevaworks. E.2 The question of law posed and the parties’ respective positions 29. The question of law for which leave to appeal was granted is set out at paragraph 16 above and, as noted in paragraph 17 above, the appellant’s case in answer to the question posed is that the state of knowledge required to exclude the defence of innocent dissemination is knowledge that the publication contains an actionable libel subject to no valid defences. 30. The appellant’s case, as further clarified by Mr Shieh in his oral submissions, was that the true rule is that the subordinate publisher is only excluded from the defence of innocent dissemination if it knew or ought reasonably to have known: (a) that the material distributed contained the statement complained of; (b) that such statement bore a defamatory meaning; and (c) that there was no defence against an action for defamation. Reformulated to reflect the appellant’s acceptance that it bears the burden of proof, it was the appellant’s case that it is only excluded from the defence if it is unable to show on a balance of probabilities that it did not know, and could not reasonably have been expected to have known the matters in (a), (b) and (c). In the course of argument, knowledge extending to all three of these matters was referred to as “Type C knowledge” and I shall adopt that description in this judgment. 31. For the respondent, Mr Johnny Mok SC[24] invited us to reject the appellant’s contention as to the requisite state of knowledge. However, he rightly pointed out that the first alternative posed in the certified question, namely knowledge that the publication contains a statement carrying a defamatory meaning, itself posited two alternatives: (1) The respondent’s first alternative was that the defence is excluded unless the subordinate publisher can show that it did not know of and could not reasonably have discovered the existence and gist of the content complained of in the article distributed, it being irrelevant whether the defendant knew that such content had a defamatory meaning. It will be seen that this is the same as knowledge limited to (a) in the appellant’s formulation above and, for convenience, it was referred to as “Type A knowledge”. (2) The respondent’s second alternative was that the defence is excluded unless the subordinate publisher can show that it did not know of and could not reasonably have discovered the existence and gist of the content complained of in the article distributed, or that it knew of such content but did not know of and could not reasonably have discovered that such content had a defamatory meaning. This is the same as knowledge that extends to (b) in the appellant’s formulation above and was referred to as “Type B knowledge”. 32. Strictly, the question of whether the requisite knowledge to defeat the defence of innocent dissemination is Type C knowledge might be said not to arise on the facts of the case. It was not suggested in the appellant’s evidence at trial that, prior to publishing the words complained of, it had considered them but had formed a reasonable belief that an action for libel could be successfully defended. However, the courts below fully considered and rejected the appellant’s contention that, as a matter of law, proof of Type C knowledge was required to defeat the defence of innocent dissemination. Moreover, in deciding the case, the courts below clearly did not apply that test of knowledge to the facts in arriving at their conclusion that the appellant had not established the defence. It is therefore appropriate for this Court to resolve the question of whether the appellant’s contention that proof of Type C knowledge is required is correct. E.3 Lord Denning’s judgment in Goldsmith v Sperrings 33. The appellant’s assertion of the need for proof of Type C knowledge to defeat the defence is solely based, as Mr Shieh candidly accepted, on a view expressed by Lord Denning in his judgment in Goldsmith v Sperrings.[25] That case involved multiple actions against the publishers of the satirical magazine “Private Eye” which led to an application by a group of retail distributors of the magazine for an order that the actions against them should be stayed or struck out as an abuse since they were being pursued not to protect the plaintiff’s reputation but, instead, for the collateral purpose of destroying the magazine by cutting off its retail outlets. The parties had argued the appeal on the assumption that the distributors were prima facie liable and the majority of the Court of Appeal (Scarman and Bridge LJJ) dismissed the distributors’ appeal on the basis that, at an interlocutory stage, there was no sufficiently clear evidence to establish that the action was being pursued for an illegitimate collateral purpose. 34. The third member of the court, Lord Denning MR, took a very different view. He disagreed with his brethren on the issue of abuse but, additionally, he held, in effect, that the action did not disclose a reasonable cause of action because there was no liability on the part of the distributors. This was based on his view of the law that: “Common sense and fairness require that no subordinate distributor – from top to bottom – should be held liable for a libel contained in it unless he knew or ought to have known that the newspaper or periodical contained a libel on the plaintiff himself; that is to say, that it contained a libel on the plaintiff which could not be justified or excused: and I should have thought that it was for the plaintiff to prove this.”[26] 35. It will be seen that this dictum of Lord Denning, which was clearly obiter, posits proof of an absence of Type C knowledge for the defence of innocent dissemination; hence, the appellant’s reliance on his judgment. As already noted, however, the appellant did not go so far as to adopt Lord Denning’s suggestion that the burden should be on the plaintiff to prove that knowledge on the part of the distributor. 36. Lord Denning’s view of the law on this point does not appear to have been embraced by any other common law court. It was considered at first instance by Eady J in Metropolitan International Schools Ltd (trading as Skillstrain and/or Train2Game) v Designtechnica Corpn (trading as Digital Trends) and others[27] in the context of an action against an internet search engine (Google) in respect of allegedly defamatory comments appearing in a “snippet” of information generated on a search. He held that Google had no responsibility for the publication and set aside the grant of leave to serve the writ on it out of the jurisdiction. Of relevance to this appeal is that he rejected Lord Denning’s view on the ambit of the defence of innocent dissemination (for the reasons addressed below).[28] 37. Academic commentators have taken mixed positions on this issue. The editors of Gatley set out the elements of the defence at [6.30] where they adopt the formulation that the defendant must show[29] “that he did not know that the book or paper contained the libel complained of”. In footnote 254, reference is made to Bridge LJ’s judgment in Goldsmith v Sperrings at p.505 where he refers to knowledge that the publication contained “defamatory matter” (suggesting Type A or Type B knowledge but not Type C) and then contrasts Lord Denning’s dissenting judgment quoting the passage cited above. The editors of Duncan and Neill on Defamation (4th Ed.) also note the difference of opinion between Lord Denning and Bridge LJ[30] but do not offer a view as to which is correct. Support for Lord Denning’s view is, however, forthcoming in Carter-Ruck on Libel and Privacy where it is suggested his is the “better view” although it is noted that the position is “not without doubt”[31] and in Collins on Defamation, which appears to favour Lord Denning’s view and criticises Eady J’s rejection of it in Metropolitan International Schools.[32] E.4 Is Type C knowledge required? 38. This is the critical question on which the appeal turns and, for the reasons which follow, the appellant’s contention that proof of Type C knowledge is required in order to defeat the defence must be rejected. 39. First, as a matter of principle, the rationale of the defence of innocent dissemination is to mitigate against the harshness of the strict publication rule, which does not require the first or main publisher to be aware of the defamatory nature of the material he is publishing.[33] Instead, the criteria which affix him with liability as the first or main publisher are knowledge and control.[34] As to the nature of the knowledge required, Ribeiro PJ’s judgment in Fevaworks demonstrates clearly that it is knowledge of the contents of the publication.[35] Whilst this analysis is material to the antecedent, and different, question of whether someone is a first or main publisher, and as such subject to the strict publication rule, there is no logical basis for importing a different test of knowledge for the subsequent question of whether a person who is not a first or main publisher, because he does not exercise any control over the content published,[36] can bring himself within the requirements of the defence of innocent dissemination. 40. In this context, it is highly material that Ribeiro PJ equated the knowledge criterion that identifies a distinguishing characteristic of a first or main publisher with the first requirement of the defence of innocent dissemination.[37] It is also noteworthy that Ribeiro PJ considered that the same standard of reasonableness should apply to the situation of acquired knowledge. Where a subordinate publisher had unwittingly published defamatory matter, he would be protected by the defence of innocent dissemination. Ribeiro PJ held that he should be afforded the continued protection of the defence, “if he proves that upon becoming aware of such content, he promptly took all reasonable steps to remove the offending content from circulation as soon as reasonably practicable”.[38] 41. To make the defence dependent on proof of an absence of Type C knowledge would therefore be to put the defence on a very different footing to its underlying rationale of mitigating the harshness of the strict publication rule. 42. Secondly, in his judgment in Goldsmith v Sperrings, Lord Denning does not cite any authority for his formulation of the knowledge element of the defence. To the contrary, none of the leading cases in which the defence was developed support the requirement of proof of Type C knowledge to defeat the defence. (1) In Emmens v Pottle,[39] Lord Esher MR held that the defendant vendor of a newspaper was “primâ facie liable” for having sold a newspaper containing “a libel on the plaintiff” and therefore required to demonstrate facts which showed they did not publish the libel.[40] Similarly, in Vizetelly v Mudie’s Select Library Ltd (supra), Romer LJ referred to dissemination of the defamatory material as resulting in “primâ facie publication of it” and hence liability unless the elements of the defence of innocent dissemination were established.[41] Prima facie liability in defamation is necessarily subject to positive defences such as justification, honest comment or privilege. There is no reason to suppose that Lord Esher or Romer LJ were contemplating Type C knowledge for the defence of innocent dissemination since prima facie liability necessarily suggests a liability which stands until defeated by some positive defence and in neither case did they suggest that the respective defendants would have avoided liability if they merely proved they believed such a defence existed. (2) Nor is Type C knowledge suggested as relevant to the defence of innocent dissemination in Sun Life Assurance Co. of Canada v W.H. Smith & Son Ltd.[42] In that case, the defendant newspaper vendors were held to have been negligent in failing properly to supervise the display of posters at their bookstalls. In Scrutton LJ’s formulation of the elements of the defence of innocent dissemination, he referred to negligence in respect of the “publication of the libel” and, when referring to the finding of the jury, his Lordship appears to have referred to this as meaning that the statement was found to bear “a libellous meaning”.[43] Greer LJ found liability established on the basis of the jury’s finding that the relevant poster “contained statements which were defamatory of the plaintiffs” since the stall manager “must have known its contents”.[44] Neither Scrutton LJ nor Greer LJ’s judgments lend any support for the need to establish Type C knowledge to defeat the defence of innocent dissemination. 43. Thirdly, there are significant practical difficulties in determining how the defence will operate. These were identified by Eady J in the following terms: “… it seems to me that the defence of innocent dissemination as interpreted by Lord Denning MR throws up more problems than it is likely to solve. How could someone hoping to avail himself of the defence know that a defence of justification was bound to fail, save in the simplest of cases? How is he/she to approach the (often controversial and uncertain) question of meaning? How much legal knowledge is to be attributed to him/her in arriving at these conclusions? What of a possible Reynolds defence?”[45] (Emphasis in original) Notwithstanding the criticism to which this passage is subjected in Collins on Defamation (supra), these practical difficulties are very real and call into question the soundness of the appellant’s contention that proof of Type C knowledge is required to defeat the defence. It is true, as the appellant submits, that the question of meaning applies whether proof of Type B or Type C knowledge is required but, if so, that may simply be a reason for preferring to regard proof of Type A knowledge (where meaning does not arise) as the requisite mental state for the defence. 44. In this context, the appellant’s reliance on Regulation 19 of the Electronic Commerce (EC Directive) Regulations 2002 in the United Kingdom[46] is overstated. The appellants seek to rely on that Regulation by way of example of another context in which a defence depends on a party assessing the strength or weakness of potential defences. However, such an assessment is in respect of various forms of unlawfulness including crimes such as hate speech or incitement to violence where the unlawfulness may be self-evident. In the context of defamation, the imposition of such an assessment may be problematic or unworkable.[47] Moreover, the specific and limited context of that Regulation is the protection of Internet service providers from liability for storage of information on their servers and there is no reason to conclude that the policy decision underlying the Regulation reflects the common law defence of innocent dissemination. 45. Fourthly, contrary to the appellant’s submission that imposing a requirement of proof of Type C knowledge to defeat the defence strikes a proper balance between freedom of expression on the one hand and reputational protection on the other, an acceptance of the appellant’s case would skew that balance very heavily in favour of a subordinate publisher. Given the practical difficulties identified above, requiring proof of Type C knowledge to defeat the defence will make it virtually impossible successfully to sue a subordinate publisher. Such publishers will in practice have near immunity against suit for passing on defamatory statements and, unlike first or main publishers who are subject to the strict publication rule, will be relieved of the need to establish one of the traditional defences such as justification or privilege in order to avoid liability. Whilst it may be desirable to protect small newsvendors and distributors against litigation for material originated by others, it must not be forgotten that it is through the acts of these newsvendors and distributors that a plaintiff’s reputation will in fact be harmed and there is no assurance that an action against the first or main publisher will be possible or effective. If such protection is required, this would seem to be more appropriately achieved by means of legislation, rather than the adoption of an unprincipled or problematic test as part of the common law defence. 46. Fifthly, in none of the following common law jurisdictions in which the defence of innocent dissemination has been put on a statutory basis is it required to prove an absence of Type C knowledge. Instead: (1) In the UK, s.1(1) of the Defamation Act 1996 provides that it is a defence for a defendant to show, among other things, that: “(c) he did not know, and had no reason to believe, that what he did caused or contributed to the publication of a defamatory statement”; (2) The legislation in Australia[48] consistently provides that the defence is available where a defendant shows, among other things, that “(b) the defendant neither knew, nor ought reasonably to have known, that the matter was defamatory”; (3) In New Zealand, s.21 of the Defamation Act 1992 provides that the defence is available where a person shows, among other things, “(a) That that person did not know that the matter contained the material that is alleged to be defamatory”; and (4) In Ireland, s.27(1) of the Defamation Act 2009 (which expressly replaces the common law defence[49]) provides that the defence is available where the defendant proves, among other things, that “(c) he or she did not know, and had no reason to believe, that what he or she did caused or contributed to the publication of a statement that would give rise to a cause of action in defamation.” 47. Although the absence of any statutory support for Type C knowledge as an element of the defence of innocent dissemination is not conclusive, it lends some support to the view that its adoption was seen in those jurisdictions as problematic and not striking the right balance between free speech and the right to protection of reputation. It also lends support to the view that, in those jurisdictions, insofar as the statutory provision was to codify the common law defence, it was not thought that the common law defence required proof of an absence of Type C knowledge. 48. In this context, in respect of the UK Defamation Act 1996, submissions were made to us (as they had been to the Court of Appeal[50]) by reference to the Parliamentary debate concerning what became s.1 of that Act. It is unnecessary to explore that debate or to consider those submissions at length. The statutory defence in s.1 of the 1996 Act was clearly intended to afford protection to those subordinate publishers (at least[51]) to whom the common law defence of innocent dissemination would be available. Although the 1996 Act did not expressly abolish the common law defence, it has been held to have effectively superseded it.[52] But since it cannot be demonstrated conclusively whether the s.1 defence codified the common law or provided for a narrower defence (as some academic commentators suggest[53]), a consideration of the Parliamentary debate does not assist in answering the question posed in this appeal. 49. Similarly, comments made in the context of the consideration of the bill that became the UK Defamation Act 2013 do not assist. Mr Shieh referred us, for example, to the views of the Joint Committee on the Draft Defamation Bill and of the Booksellers Association on their understanding of the ambit of the common law defence, suggesting that proof of Type C knowledge was required to exclude the defence.[54] These comments are not authoritative and it remains for the court to determine the true ambit of the common law defence as a matter of principle. 50. S.10(1) of the UK 2013 Act[55] affords greater protection than the common law for subordinate publishers in that such a publisher cannot be sued unless it is not reasonably practicable to sue the author, editor or publisher, i.e. the first or main publisher. In the same way, as noted above, s.1 of the 1996 Act had extended the statutory defence to printers and live broadcasters, to whom the common law defence might not apply. These are examples of legislation seeking to strike a particular balance between free speech and the right to protection of reputation and there may be strong arguments for adopting such a balance in this jurisdiction. But if so, that is a balance that must be struck by the Legislature since it is different to the balance struck by the operation of the common law defence of innocent dissemination. E.5 The consequence of rejecting Type C knowledge 51. Mr Shieh accepted that, if the Court rejected his submission that proof of Type C knowledge was required to defeat the defence of innocent dissemination, it would follow that the appeal must be dismissed. As demonstrated in Section F below, on the Recorder’s finding of negligence, upheld by the Court of Appeal, the appellant could not bring itself within the defence of innocent dissemination and thereby avoid liability to the respondent for the defamatory statements contained in the Magazine. E.6 Is it necessary to resolve whether the defence is excluded by Type A knowledge or by Type B knowledge? 52. Mr Mok confirmed, in answer to an inquiry from the bench, that it did not matter to the respondent’s case in this appeal whether it was proof of Type A knowledge that was required in order to defeat the defence of innocent dissemination or proof of Type B knowledge. This must be correct. As shown in Section F below, the courts below held that the appellant’s negligence consisted in not inspecting the Magazine at all. They held that, had the appellant done so, it would have discovered the libellous material about the plaintiff. This must at least equate to an absence of proof of Type B knowledge and so whether the true basis of the defence is an absence of proof of Type A knowledge as opposed to Type B knowledge is immaterial to the outcome of this case. 53. Whether the correct mental state for the defence is absence of proof of Type A knowledge or Type B knowledge is not an easy question. It involves the difficult balance between freedom of speech and the right to protection of reputation. As such, it may engage a debate about the constitutionality of the defence of innocent dissemination, an issue which has not been raised in this appeal but which could be raised in a case where the distinction between Type A and Type B knowledge were material to the outcome of the case. In the circumstances, it is preferable not to answer that question in the context of this appeal but instead to leave the issue open to await determination in a suitable case. F. Applying the law to the facts 54. In view of Mr Shieh’s correct acceptance that the appeal must be dismissed if he lost on the point of law raised in the appeal, it is not strictly necessary to analyse the facts of the case and to apply the law to those facts. However, there is some value in doing so in order to demonstrate how the defence of innocent dissemination works. 55. Here, it will be recalled, in seeking to bring itself within the defence, the appellant accepted that it bore the burden of showing that there was no negligence on its part in not knowing that the relevant issue of the Magazine contained statements defamatory of the respondent. As shown in Section A above, in particular in paragraph 10, the appellant’s employees in Hong Kong did not actually see the Magazine until after it was distributed by them via Chan Sun Kee and the courier and there was no evidence of any employee of the appellant elsewhere having seen it. It may be thought that a denial of the defence of innocent dissemination in these circumstances is harsh. However, for the reasons given by the Recorder, and developed by the Court of Appeal, the banner heading on the cover of the relevant issue of the Magazine was clearly such as to put any reader of it on notice to the possibility that the related articles in the Magazine might contain defamatory statements. In these circumstances, even a cursory inspection of the issue in question would have put the appellant distributor on notice of the possibility or likelihood that the Magazine about to be disseminated contained defamatory material. The Respondent and Court of Appeal were entitled to find that to adopt a system which eliminated even a cursory inspection was negligent. That finding of negligence is not challenged by the appellant, quite realistically, since it is a concurrent finding by the courts below. 56. On the basis of that finding, the common law defence of innocent dissemination is not available to the appellant, since it cannot show that its lack of knowledge of the defamatory statements in the Magazine was not due to its negligence. Accordingly, no other defence being asserted, it is liable to the respondent for damages for the tort of libel. 57. That is not to say, however, that an omission to look at a publication before distribution in every case will be sufficient to establish the necessary degree of negligence to defeat the defence of innocent dissemination. This is a question that is fact and context sensitive and will depend on all the circumstances of the particular publication. What will be negligent in the case of a distributor of a print publication with features putting any reader on alert as to the possible defamatory content, will not necessarily be negligent in the very different context of an Internet web host which receives many thousands of posts from different sources to a web forum. As Ribeiro PJ pointed out in Fevaworks, there is a qualitative difference between the “one-to-many” publications of the more traditional print and broadcast publications and the “many-to-many” communications that are involved in Internet publications[56] and what is needed to satisfy the standard of reasonable care will vary according to the circumstances.[57] In the latter context, there are strong reasons of principle and policy to set the relevant negligence standard at a level that only exposes the distributor to liability when there has been a failure to respond appropriately after defamatory material is drawn to its attention.[58] Whether that also applies to a distributor of a newspaper or magazine will depend on the facts of the given case. The present appeal is not such a case. G. Conclusion 58. For these reasons, I would dismiss this appeal with costs. Lord Collins of Mapesbury NPJ: 59. I agree with the judgment of Mr Justice Fok PJ. (Joseph Fok)				Permanent Judge (Lord Collins of Mapesbury)				Non-Permanent Judge Mr Johnny Mok SC and Ms Janet Ho, instructed by Vivien Chan & Co., for the Plaintiff (Respondent) Mr Paul Shieh SC and Mr Bernard Man SC, instructed by Stevenson, Wong & Co., for the Defendant (Appellant) [1] Mr Paul Shieh SC, appearing with Mr Bernard Man SC. [2] HCA 1194/2010 (Mr Recorder Patrick Fung SC). [3] CFI Judgment at [14]. [4] Ibid. at [33], [49]. [5] Ibid. at [50]-[53]. [6] Ibid. at [54]-[58]. [7] CACV 275/2012 (Yeung VP, Cheung and Chu JJA). [8] CA Judgment at [6.14]-[6.16]. [9] Ibid. at [7]-[8]. [10] CACV 275/2012, Decision dated 7 October 2014. [11] FAMV 57/2014, Determination dated 30 March 2015. [12] Oriental Press Group Ltd v Fevaworks Solutions Ltd, FACV 15/2012, 4 July 2013, reported in (2013) 16 HKCFAR 366, at [16]. [13] (Cap.21). [14] FACV 15/2012, 4 July 2013, reported in (2013) 16 HKCFAR 366 (“Fevaworks”). [15] Ibid. at [16]-[23]. [16] Gatley on Libel and Slander (12th Ed.) (“Gatley”) at [6.10]. [17] Fevaworks at [23], [75]. [18] Ibid. at [24]. [19] Gatley at [6.30]; Fevaworks at [29]. [20] Gatley at [6.27] citing Bunt v Tilley [2007] 1 WLR 1243 at [37]. [21] [1900] 2 QB 170 at 180. [22] Fevaworks at [31]-[32], preferring this view (stated in Duncan & Neill on Defamation (2nd Ed., 1983)) to the view that successful invocation of the defence leads to the defendant being deemed not to have published the libel at all. [23] Fevaworks at [29]. [24] Appearing with Ms Janet Ho. [25] [1977] 1 WLR 478. [26] Ibid. at 487F-G. [27] [2011] 1 WLR 1743 (“Metropolitan International Schools”). [28] Ibid. at [67]-[70]. [29] The editors do not adopt the position that the plaintiff bears any burden to defeat the defence. [30] At [22.04] FN3. [31] Carter-Ruck on Libel and Privacy (6th Ed.) at [14.7]. [32] Collins on Defamation, Matthew Collins QC (OUP) at [16.31]-[16.41]. [33] Fevaworks at [19]-[20], [47]. [34] Ibid. at [76]. [35] Ibid. at [81]-[84]. [36] Ibid. at [85]. [37] Ibid. at [77]. [38] Ibid. at [97]. [39] (1885-86) LR 16 QBD 354. [40] Ibid. at 356-357. [41] [1900] 2 QB 170 at 180. [42] [1933] All ER Rep 432. [43] Ibid. at 434F and G-I. [44] Ibid. at 438G-H. [45] Metropolitan International Schools at [69]. [46] This gives effect to the EU’s Electronic Commerce Directive (Directive 2000/31/EC) and reads (in part): “Where an information society service is provided which consists of the storage of information provided by a recipient of the service, the service provider (if he otherwise would) shall not be liable for damages or for any other pecuniary remedy or for any criminal sanction as a result of that storage where – (a) the service provider – (i) does not have actual knowledge of unlawful activity or information and, where a claim for damages is made, is not aware of facts or circumstances from which it would have been apparent to the service provider that the activity or information was unlawful; …”. [47] See Ribeiro PJ’s extra-judicial discussion of the decision of the ECHR Grand Chamber in Delfi AS v Estonia (Application no.64569/09) in “Defamation on the Internet”, HKU Obligations VII Conference, 15 July 2014, at [38]-[42]. [48] Civil Law (Wrongs) Act 2002 (ACT), s.139C(1); Defamation Act 2005 (SA), s.30(1); Defamation Act 2005 (NSW, Qld, Tas, Vic, WA), s.32(1); Defamation Act 2006 (NT), s.29(1). [49] Defamation Act 2009, s.15(1). [50] CA Judgment at [5.5]-[5.10]. [51] The s.1 defence also extends (see s.1(3)(a) and (d)) to printers and live broadcasters, who might not have been entitled to rely on the common law defence. [52] Metropolitan International Schools at [70]. [53] Gatley at [6.38]; Carter-Ruck at [14.7]; Collins at [16.33]. [54] Joint Committee on the Draft Defamation Bill, House of Lords and House of Commons, Session 2010-2012 “Report, together with formal minutes”, October 2011, at [60], see esp. FN109. [55] This provides: “A court does not have jurisdiction to hear and determine an action for defamation brought against a person who was not the author, editor or publisher of the statement complained of unless the court is satisfied that it is not reasonably practicable for an action to be brought against the author, editor or publisher.” [56] Fevaworks at [59]. [57] Ibid. at [90]-[91]. [58] An appropriate response may or may not be to “take down” (i.e. withdraw) the material. As Ribeiro PJ has pointed out, a simple notice and take down rule may be less than ideal: “Defamation on the Internet”, HKU Obligations VII Conference, 15 July 2014, at [35]-[36].
THE COURT: A. The issues dealt with in this judgment 1. This judgment deals with two money laundering cases that were heard together. A.1 The case involving Mr Yeung 2. The first concerns Mr Yeung Ka Sing, Carson (“Yeung”) who was convicted in the District Court[1] on five charges of contravening section 25(1) of the Organized and Serious Crimes Ordinance (“OSCO”)[2] which provides as follows: “Subject to section 25A, a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person's proceeds of an indictable offence, he deals with that property.” The OSCO provisions relevant to this judgment are set out in Annex A. 3. The dismissal of Yeung’s appeal by the Court of Appeal[3] led to two appeals before this Court, leave being granted[4] in respect of four questions of law certified to be of great and general importance. In the first appeal,[5] Yeung was granted leave in respect of the following questions: Question 1 On a charge of dealing with proceeds of crime contrary to s 25 (1) of the Organized and Serious Crimes Ordinance (Cap 455) (“OSCO”), is it necessary for the prosecution to prove, as an element of the offence, that the proceeds being dealt with were in fact proceeds of an indictable offence? Was Oei Hengky Wiryo (2007) 10 HKCFAR 98 wrongly decided on this issue? (“The proceeds issue”) Question 2 In considering the mens rea element of a charge contrary to s 25(1) of OSCO, to what extent does a trial judge need to make positive findings as to a defendant's belief, thoughts, intentions at the material time even though the judge rejects the defendant's testimony? In particular, where the trial judge rejects the defendant's testimony, to what extent can the judge remain oblivious to the defendant's actual reason(s) for dealing with the specified proceeds in making the finding that the defendant had reasonable grounds to believe that the proceeds he dealt with were proceeds of crime? (“The mens rea issue”) 4. In dismissing Yeung’s appeal, the Court of Appeal held that the charges (set out in Annex Bto this judgment) were duplicitous but upheld his conviction on the basis that he had not been prejudiced by such duplicity. The prosecution consequently obtained leave to appeal[6] in relation to the following question: Question 3 In the context of the offence of money laundering under section 25 of [OSCO] how does the rule against duplicity operate? In particular, whether the offence of money laundering, capable of being committed in any of the modes of ‘dealing’ as included in its definition under section 2 of [OSCO], is or could be a continuing offence so that the rule against duplicity does not apply; and how do the exceptions to the rule against duplicity (namely, ‘one transaction’ as in DPP v Merriman [1973] AC 584, ‘general deficiency’ as in R v Tomlin [1954] 2 QB 274 and ‘continuous course of conduct’ as in Barton v DPP [2001] 165 JP 779) apply to a charge of money laundering which alleges multiple dealings some of which involve money from known and different sources? (“The duplicity issue”) 5. The prosecution was also granted leave[7] regarding another aspect of the mens rea element of the section 25(1) offence arising out of the Court’s decision in Pang Hung Fai, the question being formulated as follows: Question 4 When considering whether a defendant had reasonable grounds to believe in the context of s.25(1) of the Ordinance, how does a trial judge reconcile the formulation set out in Seng Yuet Fong v HKSAR (1999) 2 HKC 833 and the formulation ‘knew or ought to have known’ set out in HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778? Under what circumstances should the trial judge apply these two formulations? (“The Pang Hung Fai issue”) 6. In this judgment, we will first consider the issues raised by Questions 1, 2 and 4 bearing on the elements of the substantive offence, before turning to deal with the duplicity issue raised by Question 3. A.2 The case involving Mr Salim 7. The second case concerns Mr Salim, Majed (“Salim”) who was convicted in the District Court[8] on four charges of contravening OSCO s 25(1). His conviction was quashed in the Court of Appeal[9] on a ground which is not presently material.[10] However, the Court of Appeal declined to order a re-trial, holding that the charges (set out in Annex C below) were incurably duplicitous.[11] 8. The prosecution obtained leave to appeal on the issue of duplicity in terms identical to Question 3 above.[12] B. The principal findings and verdicts in the two cases B.1 The Yeung case 9. Each of the five charges (see Annex B) alleged that Yeung dealt in sums of money in five bank accounts during periods between different dates commencing in 2001 and ending in 2007. The accounts identified in charges 1, 2 and 3 were in Yeung’s name and he was the sole signatory on those accounts; the accounts identified in charges 4 and 5 were in Yeung’s father’s name and both Yeung and his father were joint signatories on them. The aggregate amount of monies alleged in the charges to have been dealt with by Yeung was the sum of HK$721,287,607 which had been deposited into the five accounts by way of 963 individual deposits during the periods covered by the charges. The deposits were from different sources and included cash and cheque deposits and bank transfers. 10. The prosecution did not seek to identify the predicate offences from which the monies were said to have derived and it was not alleged that Yeung’s mens rea for the section 25 offences was the “knowing” limb. Instead, the prosecution case was based on matters from which it was said that Yeung must have had reasonable grounds to believe that the monies in question were the proceeds of an indictable offence. That case was supported by evidence given by a forensic accountant (Mr Rod Sutton) as to the existence of various “hallmarks of money laundering”.[13] 11. Yeung gave evidence at trial that the monies in the accounts in his name were his but that they had legitimate sources, including his casino winnings and share dealings. He denied that he had dealt with the monies in the accounts in his father’s name. 12. The Judge, save to a very limited extent, disbelieved Yeung and rejected his evidence to explain the supposedly legitimate provenance of the monies deposited into the bank accounts. He also rejected his denial of dealing with the monies in the two accounts in his father’s name. Instead, he found that Yeung simply used his father’s name to open those accounts and that, in order to conceal the source of the funds or his involvement in dealing with them, he used the accounts as if they were his own and therefore dealt with the monies in those accounts.[14] 13. The Judge concluded, in respect of each of the five charges, that Yeung had reasonable grounds to believe that the monies in those five accounts were the proceeds of an indictable offence.[15] This conclusion was based on the following principal findings of fact made by the Judge: (a) That there were significant deposits and withdrawals of cash into and from the accounts, and bank transfers between the various accounts;[16] and that Yeung knew that payments in cash could be used to conceal the source of the funds.[17] (b) That the monies deposited into the accounts far exceeded the apparently modest means of Yeung and his father as disclosed by their respective declarations of taxable income from the operation of hair salons (in the case of Yeung) and from employment as a caretaker and the operation of a vegetable stall (in the case of Yeung’s father)[18] and in the context of the absence of any correlating cash generating business in which either Yeung or his father were involved.[19] (c) That the opening and closing balances of the five accounts were all relatively similar and that this indicated the accounts had been used as the repository of funds.[20] (The Court of Appeal held that, although the similar opening and closing balances showed that the accounts were used to receive money which was then remitted elsewhere, the Judge erred in relying, compendiously and retrospectively, on his finding that each of the accounts was used as a repository of funds in concluding that Yeung had reasonable grounds to believe the monies were the proceeds of an indictable offence.[21] However, the Court of Appeal held that the error was immaterial in the context of the Judge’s overall findings.[22]) (d) That Yeung lied in testifying that the only reason he used cash in dealing with security companies was to settle margin calls urgently and that, instead, one of the reasons Yeung had done so was because he knew that cash transactions were more difficult to trace.[23] (e) That deposits totalling HK$62,450,000 came from 10 cash cheques issued by a Macau casino, including four cheques issued on the same day and that Yeung was lying when he testified that these were his gambling winnings.[24] (f) That Yeung’s explanations that deposits by certain third parties were the return of capital and interest for his and his father’s investments in Neptune Club and Massive Resources International Corporation Limited (Stock Code 070) (“Massive Resources”) were untrue and that the payments were in fact connected to two individuals, Lin Cheuk Fung and Cheung Chi Tai, who were the “bosses” of a VIP room in a casino in Macau.[25] (g) That Yeung’s evidence about certain transactions (namely agreements relating to shares in Gold Wo and Massive Resources) was not truthful and that the manner in which those transactions were conducted on a verbal basis without documentation was for the purpose of concealing the true nature of the transactions and the individuals concerned in them.[26] (h) That Yeung was aware of all the transactions in relation to the bank accounts the subject of charges 1, 3 and 5;[27] that, in relation to the bank account the subject of charge 2, Yeung was aware of the amount of cash transactions and the unexplained deposits which made up 82.9% of the cheque deposits into the account; and that, in relation to the bank account the subject of charge 4, Yeung knew that, overall, an almost identical amount was deposited into the account as was withdrawn from it.[28] 14. Accordingly, the Judge convicted Yeung of the five charges and sentenced him to a total of six years’ imprisonment.[29] The Judge sentenced Yeung on the basis of a combined approach “given the manner that the accounts were used by [him] in his money laundering activities”.[30] The Judge found that, although it would not appear Yeung was the director of a money laundering scheme, the laundering could not have continued for as long as it did and on such a large scale without Yeung’s “considerable skills in share dealings and connections to the Macau casinos”.[31] The Judge reached his sentence on the basis that, even taking the reduced defence figure of HK$449,012,331, the amount of money involved in the offences was still “a staggering figure”.[32] 15. On Yeung’s appeal, the Court of Appeal granted Yeung leave to appeal against conviction on the grounds of appeal which have given rise to Questions 1 and 2 above, as well as the ground relating to the Judge’s reliance on his finding that each of the bank accounts was used as a repository of funds, but refused leave in respect of the other grounds of appeal advanced and dismissed the appeal. B.2 The Salim case 16. The charges in Salim’s case stemmed from fraudulent schemes whereby victims of the schemes were induced on false pretences to deposit monies into bank accounts in Hong Kong. Salim, a Dutch national originally from Iraq but living in the United Kingdom, was not a party to the predicate offences but was alleged to have been involved in dealing with the proceeds of those offences. 17. Salim’s involvement arose out of his presence in Hong Kong between 28 November and 3 December 2011. During that visit, assisted by a Pakistani man named Yaser (“Yaser”), Salim acquired a company incorporated here called Day Leader Limited (“Day Leader”) and became its sole director and shareholder. With Yaser’s assistance, Salim also opened and became the sole signatory of bank accounts opened in Day Leader’s name: two with the Bank of China (“BOC”), one with Hang Seng Bank (“Hang Seng”) and one with HSBC (“HSBC”). An address in Sheung Wan, which was Yaser’s address, was given as Day Leader’s registered address and this was the address to which correspondence from the banks was to be sent, but Salim’s address in London was given as its business address. Having opened the bank accounts, Salim passed all the account opening materials and controlling devices to Yaser although, as later became apparent, he retained the ability to operate the accounts himself. The proceeds of the frauds referred to above, in the aggregate amount of approximately HK$8,010,000, were paid into these four bank accounts of Day Leader. Salim returned to Hong Kong on 21 February 2012 and went to the three banks and withdrew sums amounting to HK$408,000 from three of Day Leader’s accounts.[33] He was arrested the next day. 18. The four charges against Salim (see Annex C) alleged that he dealt with property in each of the four bank accounts of Day Leader, and specified the total sum of money which had been paid into each account since the date of opening until 21/22 February 2012. 19. At trial, Salim accepted that his withdrawals of monies from Day Leader’s accounts constituted dealing with those sums[34] but denied that he dealt with the monies deposited into the accounts since he had no knowledge of those transactions and the accounts of Day Leader were controlled by others. Salim denied that, save in respect of the sums withdrawn by him, there were reasonable grounds for him to believe that the monies in the accounts represented the proceeds of an indictable offence. It was his case that he was deceived by Yaser into opening the bank accounts, thinking that materials relating to them would be sent to his address in the UK. 20. The Judge found Salim to be a dishonest and unreliable witness and rejected his explanation as to how he came to open the bank accounts of Day Leader. He found instead that Salim passed the account opening materials and controlling devices to Yaser to enable the accounts to be operated by others.[35] The Judge drew the irresistible inference that Salim was aware that the accounts would be used to deal with substantial sums of money and held that the conduct of Salim amounted to aiding and abetting another person to deal with the monies in the accounts.[36] He found that Salim dealt with the monies he withdrew from each of the accounts the subject of Charges 4, 6 and 7 and that he aided and abetted another person to deal with the monies particularised in each of the four charges and accordingly convicted him of those charges.[37] The Judge sentenced Salim to a total of five years’ imprisonment for his convictions on those charges.[38] 21. The Court of Appeal allowed Salim’s appeal against conviction on two grounds. The first was that Salim had not been charged with any withdrawal of monies from the accounts as a dealing with property and this was confirmed by the prosecution who indicated that evidence of the withdrawals had been adduced to support adverse inferences in respect of the purpose of the opening of the accounts, their use and Salim’s knowledge.[39] The second was that the Judge’s finding that the actus reus of the offence established on the basis of aiding and abetting others to deal with the monies in the accounts was not the basis on which the prosecution had put its case, which was on the basis that the mere lending of the accounts to others to use meant that Salim was dealing with the property every time there was a deposit to the account.[40] 22. Having concluded that Salim’s conviction must be quashed, the Court of Appeal went on to consider whether it should order a re-trial and concluded that it should not because it concluded that the charges were duplicitous and could not be brought within any of the common law exceptions to the rule against duplicity.[41] C. Question 1: The proceeds issue C.1 A question previously answered 23. As Question 1 indicates, the Court has previously ruled that it is not necessary for the prosecution to prove, as an element of the offence, that the property dealt with by the defendant in fact represents the proceeds of an indictable offence. 24. That issue was first encountered by the Appeal Committee in HKSAR Wong Ping Shui,[42] which rejected the applicant’s submission that, as in cases of handling stolen goods,[43] section 25(1) requires the prosecution to show that the defendant was dealing with property which actually represented the proceeds of an indictable offence. Ribeiro PJ held that section 25(1): “...does not define the actus reus as dealing with the proceeds of an indictable offence. It defines it as dealing with ‘property’ which the defendant knows or has reasonable grounds to believe represents the proceeds of an indictable offence. The quality of the goods being such proceeds is therefore an element in the mens rea but not the actus reus.”[44] 25. He added: “... it is wholly implausible that the Legislature could have intended proof of money laundering offences to require proof of the underlying criminal offences that generated the money being sanitised. There is the obvious likelihood that such activities would be cloaked in secrecy and that they may well have taken place in one or more foreign jurisdictions.”[45] 26. In Oei Hengky Wiryo v HKSAR (No 2),[46] after considering the effect of the House of Lords’ decision in R v Montila[47](discussed further below) and certain other arguments, McHugh NPJ, writing for the Court, upheld the Appeal Committee’s view. This was reiterated by the Court in HKSAR v Li Kwok Cheung George,[48] as follows: “The s.25(1) offence is committed by the act of dealing with certain property which has specified characteristics. It must be property which a person knows or has reasonable grounds to believe ‘in whole or in part directly or indirectly represents any person's proceeds of an indictable offence’. As the Court held in Oei Hengky Wiryo v HKSAR (No 2), s.25(1) does not define the actus reus as dealing with the proceeds of an indictable offence. It defines it as dealing with ‘property’ which the defendant knows or has reasonable grounds to believe represents the proceeds of an indictable offence. The quality of the property being such proceeds is therefore an element in the mens rea but not the actus reus. It is nevertheless a necessary ingredient of the offence that the characteristics of the property known to the defendant or giving reasonable grounds for belief must be such as to qualify the property in law as the ‘proceeds of an indictable offence’ as an element of the mens rea.” 27. Ms Clare Montgomery QC,[49] seeks to persuade the Court to overturn its decision in Oei Hengky Wiryo as a case that was wrongly decided. It is established that the Court has power to depart from its own previous decisions but that it will approach the exercise of that power with great circumspection to avoid undermining the certainty, predictability and consistency which adherence to precedent provides, especially if there is a risk that existing rights may be disturbed.[50] It is accordingly on that basis that we turn to examine the arguments bearing on whether Oei was wrongly decided and whether the Court should deviate from the approach previously adopted to the proceeds issue. C.2 The language of section 25(1) 28. It is not in dispute that on the true construction of section 25(1), a person cannot properly be convicted on the “knowing” limb unless the property dealt with actually represents the proceeds of an indictable offence. As Lord Hope of Craighead put it in R v Montila:[51] “A person may have reasonable grounds to suspect that property is one thing (A) when in fact it is something different (B). But that is not so when the question is what a person knows. A person cannot know that something is A when in fact it is B. The proposition that a person knows that something is A is based on the premise that it is true that it is A.” 29. In the present case, the prosecution did not seek to establish actual knowledge on Yeung’s part. Its case was that Yeung had reasonable grounds to believe that the property being dealt with was tainted. 30. Ms Montgomery QC submitted that the final two words in section 25(1), “that property”, ought to be regarded, purely as a matter of language, to be referring to the noun phrase closest to it, namely, the immediately preceding phrase “any person’s proceeds of an indictable offence”. So read, it was submitted that the actus reus of dealing with “that property” ought properly to be understood as requiring it to be shown that the property dealt with by the accused in fact represented some person’s proceeds of an indictable offence. 31. We do not accept that argument. Section 25(1) relevantly provides that “a person commits an offence if ... having reasonable grounds to believe that any property ... represents any person's proceeds of an indictable offence, he deals with that property”. The last two words “that property” are naturally to be read as referring back to the identical word “property” used earlier in the sentence – hence “that property”. They refer, in other words, to property which the defendant has reasonable grounds to believe represents someone’s proceeds of an indictable offence – part of the mens rea requirement. If it was intended that the act of dealing should relate only to property which was actually part of the proceeds of an indictable offence, one would have expected the closing words of section 25(1) to state: “he deals with those proceeds” rather than “he deals with that property”. C.3 The 1995 amendments to section 25 C.3a Yeung’s argument 32. The current version of OSCO s 25 is the result of amendments made in 1995.[52] In Yeung’s printed case[53] it is submitted that by those amendments: “The only change was to make it clear that a drug trafficker can be charged with money laundering if he launders his own proceeds.” 33. It goes on to argue that: “... the Legislature had clearly intended s 25(1) of both the DTROP and OSCO to have the effect of requiring the prosecution to prove the tainted origin of the proceeds being dealt with before a conviction can be secured. The 1995 amendments to both pieces of legislation were clearly not intended to take away this primary fault element.”[54] 34. It is therefore argued on Yeung’s behalf that the established position under the 1994 version of section 25, namely, that proof was required that the property involved in the arrangement was in fact the proceeds of an indictable offence, remained unchanged after the 1995 amendments. 35. We do not accept that submission. On the contrary, for the reasons which follow, the 1995 amendments radically changed and expanded the basis of liability, abandoning the original requirement of proving the defendant’s involvement in an arrangement concerning a person’s actual proceeds of criminal conduct. C.3b OSCO prior to 1995 36. The immediate predecessor of the current section 25 was enacted on 20 October 1994[55] to mirror section 25 of the then existing Drug Trafficking (Recovery of Proceeds) Ordinance Cap 405 (“DTROP”) which had been enacted on 13 July 1989. 37. In OSCO 1994, the then section 25 offence (“the old section 25”) was created in the following terms: Assisting a person to retain proceeds of an indictable offence (1) Subject to subsection (3), a person who enters into or is otherwise concerned in an arrangement whereby- (a) the retention or control by or on behalf of another (‘the relevant person’) of the relevant person’s proceeds of an indictable offence is facilitated (whether by concealment, removal from the jurisdiction, transfer to nominees or otherwise); or (b) the relevant person's proceeds of an indictable offence – (i) are used to secure funds that are placed at the relevant person's disposal; or (ii) are used for the relevant person's benefit to acquire property by way of investment, knowing or having reasonable grounds to believe that the relevant person is a person who has committed or has benefited from an indictable offence, commits an offence. (2) In this section, references to any person’s proceeds of an indictable offence include a reference to any property which in whole or in part directly or indirectly represented in his hands his proceeds of an indictable offence. 38. The offence created by the old section 25 was therefore centred on the defendant’s entering into or being involved in an arrangement benefiting a particular person referred to as “the relevant person” (“X”).[56] The subject-matter of the arrangement involved dealing with the “the relevant person’s proceeds of an indictable offence”. Such proceeds were defined as “any property which in whole or in part directly or indirectly represented in his hands his proceeds of an indictable offence”. So, while it was not necessary to show that X had himself actually committed the indictable offence, the property in X’s hands had to be shown to have derived from some predicate indictable offence. They were “his proceeds” of an indictable offence. 39. The existence, identity and property of the “relevant person” were therefore fundamental to the old section 25 offence: both as to its mens rea and its actus reus. Thus: (a) The mens rea required was for the accused to get involved in the arrangement knowing or having reasonable grounds to believe that a specific person – X – had committed or benefited from an indictable offence. (b) The actus reus required was for D to enter into or be concerned in “an arrangement” whereby either: (i) the retention or control by X or by someone on his behalf of X’s proceeds of an indictable offence was facilitated (by being concealed, removed from Hong Kong, transferred to nominees or otherwise); or (ii) X’s proceeds of an indictable offence were used as security for obtaining funds or used for buying property or investments for X’s benefit. C.3c The present section 25 offence 40. The present section 25 has done away entirely with “the relevant person” concept. It no longer ties the property dealt with to a particular person (X) as the proceeds of an indictable offence in X’s hands. Nor does it any longer tie the mens rea to what the accused knew or had reasonable grounds to believe about X’s criminal activity or about X having benefited from such activity. It also does away with any need to show the defendant entering into or being concerned with any “arrangement” involving X’s property for X’s benefit. 41. Section 25(1) now simply states that (subject to the section 25A disclosure provisions): “... a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person's proceeds of an indictable offence, he deals with that property.” 42. The defendant’s mens rea is now established if he is shown to know or to have reasonable grounds to believe that “any property” in whole or in part represents “any person’s proceeds of an indictable offence”. 43. The defendant now commits the actus reus if he “deals with that property”, such “dealing” being defined to include receiving or acquiring, concealing or disguising, disposing of or converting, bringing into or removing from Hong Kong that property; or using it as security to raise funds. 44. The current offence therefore focusses on the property – “any property” – and on the circumstances surrounding the defendant’s acts of dealing with that property. Obviously, if he can be proven to have known that the property represented someone’s proceeds of an indictable offence, the offence is established. But, if the defendant does not know for a fact that the property represented such proceeds (as is likely to be the case with professional money launderers who would make it their business not to know), it is sufficient for the prosecution to establish that, given the circumstances of which he was aware, surrounding his dealing with the relevant property, the defendant had reasonable grounds to believe that it represented the proceeds of someone’s indictable offence, whether committed in Hong Kong or abroad. 45. It is, in our view, highly significant for the true construction of section 25(1) that the 1995 amendments completely re-engineered the offence so as to abandon the elements of the old section 25 offence which had called for proof that the property represented the proceeds of an indictable offence in the hands of a specified relevant person. Against that background, the fact that the present offence is defined as dealing with “any property” rather than dealing with “the proceeds of an indictable offence”, strongly indicates that the statutory intention is to avoid imposing any requirement of proof that the property dealt with actually represents the proceeds of indictable crime. C.4 Actual proceeds and OSCO’s confiscation provisions 46. The abandonment in 1995 of the section 25 elements relating to the proceeds of an indictable offence in the hands of the “relevant person” acquires additional significance when viewed in the context of OSCO’s confiscation provisions. 47. As we have seen,[57] as OSCO stood in 1994, the actus reus of the section 25 offence involved the defendant assisting a “relevant person” to keep, hide or use his proceeds of an indictable offence with the mens rea of knowing or having reasonable grounds to believe that such person had committed or benefited from the offence. 48. The power to order confiscation was likewise premised on the property subject to confiscation being shown to be the actual proceeds of an indictable offence in the defendant’s hands. Such property had to represent a payment or other reward received by him in connection with the commission of the offence. 49. Accordingly, in OSCO 1994: (a) Section 2(6) relevantly provided: “For the purposes of this Ordinance – (a) any payments or other rewards received by a person at any time ... in connection with the commission of an offence are his proceeds of that offence; and (b) the value of his proceeds of that offence is the aggregate of the values of those payments or rewards.” (b) And section 2(8) provided: “For the purposes of this Ordinance, a person who has at any time .... received any payment or other reward in connection with the commission of an offence ... has benefited from that offence ...” 50. As we have seen,[58] the concepts of “his proceeds” and “benefit” fed into the old section 25, making it clear that the property had to consist of the actual proceeds of crime. 51. Those concepts also fed into the confiscation provisions. Where a defendant had been convicted and was to be sentenced in respect of a specified offence,[59] the court was required to determine whether he had benefited from the specified offence and if so, whether his proceeds totalled at least $100,000.[60] If so, the court went on to determine the amount to be recovered and made an confiscation order (with any needed adjustments in the light of other court orders) that he pay that amount.[61] 52. But once the “relevant person” and its associated concepts were taken out of the section 25 offence by the 1995 amendments, the liability regime diverged in this crucial respect from the confiscation regime. The concepts involving a person’s proceeds and benefit flowing from the receipt of payments or other rewards in connection with the commission of a specified offence continue to be employed for the purposes of the confiscation regime, as this Court recognized in HKSAR v Li Kwok Cheung George.[62] But those concepts no longer mesh with the actus reus elements of the present section 25. 53. The fact that the legislature chose to restructure the section 25 offence to disengage it from the concepts of the “relevant person”, “his proceeds”, “payments or other rewards received in connection with an offence” and “benefiting from” an offence – the concepts that previously had made it clear that the proceeds actually had to derive from an indictable offence – is a strong indication that the statutory intent has changed. It no longer requires proof that the property dealt under section 25(1) consists of the actual proceeds of an indictable offence. This is underlined by the contrasting retention of those concepts in relation to the confiscation provisions.[63] C.5 The principle of legality 54. In A v Commissioner of ICAC,[64] the Court acknowledged the applicability of the principle of legality in cases where it is sought to construe legislation as seeking to override or constrain fundamental rights. If, on its true construction, such is the effect of a statute then a constitutional challenge to its validity and issues as to proportionality may of course arise. However, the principle of legality raises a presumption against such an interpretation and holds that, for such a conclusion to be reached, abrogation of the fundamental rights has to be effected unmistakeably, expressly or by necessary implication.[65] The Court, in other words, has to be satisfied that the legislature had its attention properly drawn to the abrogating provision and consciously enacted legislation to such effect. 55. Yeung relies upon this principle,[66] suggesting that a construction of section 25(1) which does not require proof that the property dealt with in fact consists of the proceeds of an indictable offence violates the rights to private ownership of property guaranteed by Articles 6[67] and 105[68] of the Basic Law. 56. Yeung asserts in his printed case that: “In the context of the present case, the risk that the principle of legality was specifically designed to prevent manifested itself in full force. The legislative history of s.25(1) clearly shows that the legislature did not direct any attention to the possibility that the new s.25(1) of OSCO would (if the conclusion in Oei was correct) have the effect of abrogating or curtailing the freedom to deal with ‘clean’ property, effectively transforming the s.25(1) offence into a thought crime; nor could the legislature have determined upon the abrogation of that right when it was never told that the 1995 amendments to both the DTROP and OSCO were intended to have such an effect.”[69] 57. We are not persuaded that the constitutionally protected property rights are engaged. Nor do we accept that on the construction adopted in Oei Hengkyo Wiryo,[70] section 25(1) creates “a thought crime”: A person who is convicted of dealing with property in one or more of the ways listed in OSCO s 2 in circumstances where he had reasonable grounds to believe that it represented the proceeds of an indictable offence can hardly be said to have been convicted merely on the basis of his thoughts. This is especially so given the existence of the disclosure immunity or defence provided by section 25A.[71] 58. The gravamen of Yeung’s complaint appears to be that the expanded liability resulting from the section’s amendment in 1995 was not properly brought to the attention of members of the Legislative Council. It is suggested that they were told that the amendment sought merely to cover cases of money laundering by the predicate offender himself. 59. That complaint is not made out. It is true that legislators were told that an important object of the 1995 amendments was to extend the offence to cover self-laundering cases. However, they were also expressly informed of the creation of a new offence and apprised of its purpose and effect. 60. In a Legislative Council Brief dated 10 April 1995,[72] which pointed out that the DTROP and OSCO Bills made the same changes in relation to, inter alia, confiscation and money laundering,[73] legislators were told that the old section 25 was repealed and that there was being created a new offence of “dealing with property knowing or believing it to represent the proceeds of drug trafficking” subject to a disclosure defence in the new section 25A.[74] In the annexed OSCO Bill 1995 Explanatory Memorandum, the stated objects of the Bill were (a) to reflect similar amendments made to DTROP; and (b) “to meet operational needs by removing possible ambiguities and overcoming practical difficulties”. 61. At the Bills Committee stage, members were told by the Acting Commissioner for Narcotics that the purpose of the DTROP Bill was, among other things, “to improve the principal Ordinance in the light of the operational experience since its enactment in 1989”.[75] Regarding section 25, she explained: “... that there were practical difficulties in prosecution against a money laundering offence under the existing section 25. In particular, it was not possible to prosecute a drug trafficker for laundering his own proceeds.”[76] The Senior Assistant Crown Prosecutor added: “... that the existing section 25(1) was complex and cumbersome, which had caused difficulties in prosecuting money launderers in general.” 62. The expansion of liability brought about by the new section 25 did not go unremarked. A member noted that the Law Society had pointed to how the “new section 25 widens the previous prohibition on assisting another to retain the benefits of drug trafficking” and commented that: “It is arguably objectionable because of its breadth and uncertainty of application, and because it does not actually require a person to ‘know’ that the property in question is the proceeds of drug trafficking. Instead, liability arises simply because there were ‘reasonable grounds to believe’ (contrast to ‘suspects’ under the UK legislation).”[77] 63. The difficulties of prosecution and the re-casting of the offence to change its focus from the drug trafficker to the property being laundered were explained in a letter from the Commissioner for Narcotics to the Bills Committee dated 13 June 1995, as follows: “There are difficulties in prosecution against a money laundering offence under existing section 25 of the Ordinance; and to date there has been no successful prosecution under that section. In particular the practical difficulties are – (a) that it is not possible to prosecute a drug trafficker for laundering his own proceeds; and (b) with the current requirement as regards the mental element of the crime – the defendant must have knowledge relating to the drug trafficker, rather than knowledge relating to the property which he is trying to launder and which he knows or has reasonable grounds to believe is the proceed of drug trafficking. The new section 25 is expected to overcome the above difficulties.” 64. Anyone who took the trouble to compare the old section 25 with the proposed new section would have seen that the two offences have very different ingredients. The legislators, particularly the members of the Bills Committee, took note of those changes, expressed concern as to the broadening of liability and asked for information about difficulties of prosecution and about how the new section 25 proposed to overcome them. They were expressly told of the shift of focus from the drug trafficker to the laundered property. There is no question of the new section having been passed into law without due consideration by the legislature. C.6 R v Montila and Oei Hengkyo Wiryo 65. As noted in Section C.1 above, the Court has ruled in Oei Hengkyo Wiryo[78] and subsequent decisions that it is not necessary for the prosecution to prove, as an element of the section 25(1) offence, that the property dealt with by the defendant in fact represents the proceeds of an indictable offence. Yeung invites the Court to hold that Oei was wrongly decided. The Court is urged to adopt the contrary view arrived at by the House of Lords in R v Montila[79] in relation to the money laundering offences created by section 93C(2) of the Criminal Justice Act 1988 (“CJA 1988”) and section 49(2) of the Drug Trafficking Act 1994 (“DTA 1994”) in the United Kingdom. C.6a The legislative framework of R v Montila 66. The United Kingdom is a Party to the Vienna Convention 1988[80] which requires each party domestically to establish a range of criminal offences against the drug trade. These include the offence of laundering property derived from drug offences, knowing its provenance.[81] 67. The UK sought to implement the Vienna Convention by enacting the Criminal Justice (International Co-operation) Act 1990. The relevant provision concerning the laundering of the proceeds of drug trafficking was subsequently re-enacted as DTA 1994 s 49(2) as follows: “49(2) A person is guilty of an offence if, knowing or having reasonable grounds to suspect that any property is, or in whole or in part directly or indirectly represents, another person's proceeds of drug trafficking, he— (a) conceals or disguises that property; or (b) converts or transfers that property or removes it from the jurisdiction, for the purpose of assisting any person to avoid prosecution for a drug trafficking offence or the making or enforcement of a confiscation order.” 68. In 1993, the UK enacted the Criminal Justice Act 1993 which inserted provisions into CJA 1988 to embrace laundering more generally of the proceeds of criminal conduct. CJA 1988 s 93C(2) provided: “(2) A person is guilty of an offence if, knowing or having reasonable grounds to suspect that any property is, or in whole or in part directly or indirectly represents, another person's proceeds of criminal conduct, he — (a) conceals or disguises that property; or (b) converts or transfers that property or removes it from the jurisdiction, for the purpose of assisting any person to avoid prosecution for an offence to which this Part of the Act applies or the making or enforcement in his case of a confiscation order.” 69. The charges in Montila were laid under the abovementioned sections 49(2) and 93C(2). However, by the time the case reached the House of Lords, they had been replaced by section 327(1) of the Proceeds of Crime Act 2002 which provides that a person commits an offence if he conceals, disguises, converts or transfers criminal property or removes criminal property from England and Wales or from Scotland or from Northern Ireland. Section 340(3) of that Act defines “criminal property” as follows: “Property is criminal property if- (a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit.” C.6b Differences in the Hong Kong legislative scheme 70. There are significant differences between the Hong Kong and UK legislative schemes. 71. First, as we have seen,[82] when OSCO was originally enacted in 1994, it created an offence which did require proof of the tainted provenance of the laundered property. However, the legislature radically re-cast the offence in 1995, strongly indicating that its intention was to make it no longer necessary to prove that actual criminal provenance of the property dealt with.[83] The House of Lords in Montila was not construing sections 49(2) and 93C(2) against any such legislative background. 72. Secondly, there is a major structural difference in the offences created by DTA 1994 s 49(2) and CJA 1988 s 93C(2) as compared with OSCO s 25(1). In the UK provisions, the offence is committed where the defendant conceals or disguises the property; or converts or transfers or removes it from the jurisdiction “for the purpose of assisting any person to avoid prosecution for a [drug trafficking or CJA 1988] offence or the making or enforcement of a confiscation order”. 73. The italicised words lend themselves to a construction which requires the property concerned to be the actual proceeds of crime. They require proof of a purpose on the defendant’s part which comes very close to proof that he knows that the property is actually tainted. He must be shown to have acted with the purpose of assisting the relevant person to avoid prosecution for the offences specified, or for the purpose of avoiding the making or enforcement of a confiscation order. Moreover, the defendant must be shown to have performed one of a limited range of acts which are suggestive of knowing complicity, namely: concealing or disguising the property; converting or transferring or removing it from the jurisdiction.[84] 74. As Hooper LJ, referring to DTA 1994 s 49(2), pointed out in R v Liaquat Ali:[85] “The section requires the defendant to conceal or disguise etc ‘for the purpose of assisting any person to avoid prosecution for a drug trafficking offence’. It is difficult to see how a person who only ought to have known or suspected can have as the purpose of the concealment etc ‘assisting any person to avoid prosecution for a drug trafficking offence’.” 75. And as Lord Nicholls of Birkenhead stated in R v Saik:[86] “I readily accept that, evidentially and inferentially, it is a short step from proof that the defendant's purpose was to assist someone to avoid prosecution to a conclusion that the defendant was aware the property had an illicit provenance.” 76. Such considerations do not enter into the construction of OSCO s 25(1) which lacks any equivalent to the words italicised above. All reference to assisting in the retention, etc, of the proceeds of an indictable offence in a particular person’s hands and to knowledge or reasonable grounds to believe that such person has committed or benefited from an indictable offence have been jettisoned. C.6c The Vienna Convention 77. One argument that was made in Oei and repeated in the present appeal is that the Montila approach should be adopted since it gives effect to the Vienna Convention which applies to Hong Kong and which mandates the creation of money laundering offences knowingly committed. 78. We do not accept that argument. As McHugh NPJ pointed out in Oei Hengkyo Wiryo,[87] and as Lord Hope acknowledged in Montila,[88] the Convention was only laying down legislative baselines, leaving it open to individual Parties to decide on the form and stringency of their domestic offences. The Vienna Convention’s minimum standards therefore do not throw light on the true construction of OSCO s 25(1). C.6d Section 25A and the construction of section 25(1) 79. One of the key reasons given by Lord Hope in Montila[89] for adopting a construction requiring proof of actually tainted proceeds was “the absence of any defence if the property which the defendant is alleged to have known or had reasonable grounds to suspect was another person's proceeds turns out to be something different.” His Lordship elaborated as follows: “Subsequent events may show that the property that he was dealing with had nothing whatever to do with any criminal activity at all, but was the product of a windfall such as a win on the National Lottery. On the Crown's argument it is enough for it to be proved that he had the mens rea at the time when he was dealing with the property and that he was doing what he did for the purpose that the subsection identifies.”[90] 80. The problem may perhaps be less acute than might first appear since, as we have seen,[91] to prove that the defendant “was doing what he did for the purpose that the subsection identifies” requires the prosecution in the UK to prove that the defendant was acting for the purpose of assisting someone to avoid prosecution for a drug trafficking or CJA 1988 offence or to avoid the making or enforcement of a confiscation order. It seems unlikely that an innocent lottery winner would come under suspicion in respect of this element of the offence. 81. Nevertheless, it is noteworthy that DTA 1994 s 49(2) and CJA 1988 s 93C(2) under which Montila was charged were not subject to any disclosure immunity or defence.[92] In contrast, a person who may be at risk of possible prosecution under OSCO s 25(1) is able to immunise himself by resorting to the disclosure procedure under section 25A which provides as follows: “(1) Where a person knows or suspects that any property- (a) in whole or in part directly or indirectly represents any person's proceeds of; (b) was used in connection with; or (c) is intended to be used in connection with, an indictable offence, he shall as soon as it is reasonable for him to do so disclose that knowledge or suspicion, together with any matter on which that knowledge or suspicion is based, to an authorized officer. (2) If a person who has made a disclosure referred to in subsection (1) does any act in contravention of section 25(1) (whether before or after such disclosure), and the disclosure relates to that act, he does not commit an offence under that section if- (a) that disclosure is made before he does that act and he does that act with the consent of an authorized officer; or (b) that disclosure is made- (i) after he does that act; (ii) on his initiative; and (iii) as soon as it is reasonable for him to make it.” 82. Section 25A goes a long way towards meeting concerns of the type illustrated by Lord Hope’s example of the lottery winner. No issue of possible liability arises unless such a person has reasonable grounds to believe that the funds which turn out to have an innocent source are the proceeds of an indictable offence. Lacking such grounds, that person commits no offence. If, on the other hand, he knows that they are tainted, he cannot complain about being found guilty. If he does not know but does have reasonable grounds to believe that the funds are tainted, the law gives him the means to immunise himself from liability under section 25(1) by disclosing his suspicion to an authorized officer – a police officer or a member of the Customs and Excise Service.[93] Such officers have legal powers to investigate the provenance of the funds – and if, after inquiry, they turn out to be lottery winnings or have some other innocent provenance, no injustice to the person dealing with the funds arises. 83. Disclosure to the authorities has always been a central feature of our legislative scheme. Thus, in relation to the old DTROP, in AG of Hong Kong v Lee Kwong Kut,[94] Lord Woolf of Barnes stated: “The language of section 25 makes the purpose of the section clear. It is designed to make it more difficult for those engaged in the drug trade to dispose of the proceeds of their illicit traffic without the transactions coming to the knowledge of the authorities. Once a person has knowledge or has reasonable grounds to believe that a relevant person carries on or has carried on drug trafficking or has benefited from drug trafficking, then it will be an offence to become involved with 'the relevant person' in any of the wide-ranging activities referred to in the section, unless the activity is reported in accordance with subsection (3) or the person who engages in the activity is in a position to establish the defence[95] provided for in section 25(4).” (Emphasis added) 84. Similarly, in HKSAR v Pang Hung Fai,[96] Spigelman NPJ explained: “Two purposes stand out. First, by the identification of what has come to be called money laundering, the legislative scheme deprives perpetrators of crime of the proceeds of their conduct. Secondly, the scheme ensures that, under pain of penalty, those who know, or even suspect that, relevantly, monies constitute such proceeds, will report that knowledge or suspicion to the authorities, to facilitate further investigation.” 85. The section 25(1) offence is therefore aimed at making accountable persons who deal with property in circumstances which give them reasonable grounds to believe that such property represents the proceeds of an indictable offence. Its impact is felt primarily in the financial sector where section 25A is much relied on for its immunising effects. Thus, the Joint Financial Intelligence Unit[97] set up to administer section 25A reported that in 2015, they received 42,555 suspicious transaction reports, of which 34,959 (82.15%) were made by banks. Four other sectors which together accounted for a further 14.21% of such reports in 2015 were listed as the insurance, securities, money service operator and legal sectors. 86. When Lord Hope was construing sections 49(2) and 93C(2) – offences whose impact was not attenuated by any protective disclosure procedure – he was dealing with offences which were functionally different from and potentially harsher than the offence created by section 25(1) taken in combination with section 25A. It is perhaps unsurprising that in the absence of any defence or immunising procedure, Lord Hope favoured a construction requiring a higher threshold for establishing liability. C.6e The Proceeds of Crime Act 2002 87. Finally, attention may be drawn to a further point of difference affecting the statutory construction adopted in Montila. As noted above,[98] the operative offences in Montila were replaced by provisions in the Proceeds of Crime Act 2002 which, by their definition of “criminal property”, expressly require the property dealt with to be the actual proceeds of crime.[99] 88. Lord Hope appears to have given that subsequently enacted provision some weight in construing the earlier sections 49(2) and 93C(2). Having described[100] the approach taken to the actus reus of the offences in the 2002 Act as “instructive”, his Lordship commented: “The language that [Parliament] has chosen to use in the 2002 Act is different from that in the enactments which are in issue in this case. There is no room for any ambiguity. The property that is being dealt with in each case must be shown to have been criminal property. But it would be surprising if the intention was to reduce the scope of these offences.”[101] 89. There may be difficulties in referring to a subsequent, amending enactment as an aid to construction of an earlier statute,[102] but such reasoning is in any event inapplicable in Hong Kong since no equivalent to the 2002 Act exists in this jurisdiction. C.7 Conclusion as to Question 1 and the proceeds issue 90. For the foregoing reasons, our answers to Question 1 are (i) that on a charge under OSCO s 25(1) it is not necessary for the prosecution to prove, as an element of the offence, that the proceeds being dealt with were in fact the proceeds of an indictable offence; and (ii) that Oei Hengky Wiryo was correctly decided on this issue. 91. We would add that we consider there to be strong policy reasons favouring this conclusion. As was indicated in Wong Ping Shui, [103]the predicate offence is likely to have taken place in one or more foreign jurisdictions, not susceptible to proof in Hong Kong, and the proceeds of such crimes are likely to have passed through various layers and transformations aimed at concealing their provenance. D. Questions 2 and 4: the mens rea and Pang Hung Fai issues 92. Questions 2 and 4 can be dealt with together. They both concern the mens rea requirements of section 25(1) in which the relevant words are italicised as follows: “Subject to section 25A, a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person's proceeds of an indictable offence, he deals with that property.” 93. These Questions seek clarification of those mens rea elements in the light of the Court’s decision in HKSAR v Pang Hung Fai.[104] D.1 Pre-Pang Hung Fai 94. Prior to that decision, the lower courts had consistently adopted the approach laid down by Mayo JA giving the judgment of the Court of Appeal in HKSAR v Shing Siu Ming,[105] as follows: “Knowledge if proved would simply resolve the matter. Difficulty, however, arises from the use of the words ‘having reasonable grounds to believe’. This phrase, we are satisfied, contains subjective and objective elements. In our view it requires proof that there were grounds that a common sense, right-thinking member of the community would consider were sufficient to lead a person to believe that the person being assisted was a drug trafficker or had benefited therefrom. That is the objective element. It must also be proved that those grounds were known to the defendant. That is the subjective element.” His Lordship added: “The prosecution is not called upon to prove actual belief. It would be sufficient to prove reasonable grounds for such a belief and that the defendant knew of those grounds. ... He (the judge) has similarly placed too high a burden on the prosecution as regards the objective element, i.e. the belief of the reasonable man. The jury did not have to be satisfied that a reasonable person would have held such a belief but only that such a person would be satisfied that there were grounds sufficient to sustain such a belief. Clearly if the jury was satisfied that a reasonable person would have held such a belief, in accordance with the direction given by the judge, then they must have been satisfied that the grounds were sufficient to sustain such a belief.”[106] 95. The Shing Siu Ming approach to mens rea therefore had the following features: (a) It began with what was referred to as “the objective element”, asking whether there were reasonable grounds for “a common sense, right-thinking member of the community” to believe that the person being assisted was a drug trafficker or had benefited therefrom. (b) If the answer was “Yes”, it went on to ask whether the defendant knew of those grounds, referred to as “the subjective element”.[107] (c) The standard to be applied in assessing whether the so-called objective element was established, was whether a “common sense, right-thinking member of the community” would consider the grounds “sufficient to lead a person to believe that the person being assisted was a drug trafficker or had benefited therefrom”. D.2 The facts of Pang Hung Fai 96. Pang Hung Fai was an unusual money laundering case. The defendant was not in the business of handling funds and the prosecution was concerned with a one-off transaction. The defendant Pang’s case was that he had allowed two strangers’ cheques to be paid into his account and the proceeds remitted abroad at the request of one Kwok Wing, an old friend whom he had trusted implicitly, without having any reason to suspect that those cheques had anything to do with a criminal offence. 97. The circumstances surrounding the transaction included the following. Pang and Kwok had been close friends for over 30 years. Kwok was the chairman and a major shareholder of a Hong Kong listed company and was in the garments business on a very large scale, with a factory in Cambodia employing 20,000 workers as well as two factories on the Mainland having a combined area of 100,000 sq ft which he leased from Pang. They lived close by each other and their families frequently socialised together over the years. They had given each other unsecured, interest-free loans of some $2 million and $5 million to meet cash-flow difficulties, such loans having been repaid after a short time. 98. The transaction in question was initiated by Kwok asking Pang to enable some money to be remitted into Pang’s bank account, saying that two of Kwok’s friends on the Mainland were going to return some money to him. Pang agreed without asking any questions and remittances of HK$7,582,150 and HK$6,467,230, by persons unknown to Pang were received in the bank account he had made available. Some three weeks later, at Kwok’s request, Pang caused the entirety of those amounts totalling HK$14,049,380 to be remitted to Kwok’s company in Cambodia. The prosecution proved that those funds were in fact the proceeds of a fraud committed by Kwok on his listed company. D.3 Pang Hung Fai in the Court of Appeal 99. In the Court of Appeal in Pang Hung Fai,[108] McWalters J (as McWalters JA then was) recognized that approaching the so-called objective and subjective questions in the order mentioned by Mayo JA entailed a risk that the “first question, the objective question, might be answered by reference to what the prosecution has proven rather than by what the prosecution has proven was known by the defendant” and suggested that the order should be reversed.[109] He held, however, that the defendant had not been prejudiced by the Shing Siu Ming order in which the questions had in fact been addressed.[110] 100. McWalters J held that a two-step approach ought to be adopted: “The first step in determining whether a defendant had reasonable grounds to believe is to identify all the facts known to the defendant that relate to the dealing with property that is the subject of the charge. These facts may, depending on the circumstances of each case, extend beyond those relating to just the dealing with the property and include facts known to the defendant about other persons or circumstances linked in some way to the dealing.”[111] “The second step is to process these facts through the mind of the common sense, right-thinking member of the community and determine whether this person, possessed of these facts, objectively would consider them sufficient to lead a person to believe that the property in question constitutes the proceeds of an indictable offence. When this reasonable person considers these facts objectively it means he does so uninfluenced by the personal beliefs, perceptions or prejudices of the defendant.”[112] 101. His Lordship regarded the test as essentially “objective” and, as the last sentence of the second passage cited indicates, he was anxious that while the Court should take into account all the facts and circumstances known to the defendant, it should exclude certain “subjective elements” so that they would not “adulterate what has to be an objective assessment.”[113] His Lordship explained: “A desire not to think ill of a friend or a wish to view his conduct through rose-coloured glasses may operate as blinkers on the applicant's assessment of the conduct or facts known to him. But these blinkers are not worn by the reasonable man who, unconstrained by emotion, stands back from the facts and considers them dispassionately. This does not involve him in removing the facts from their context and analysing them in a meaningless isolation which inevitably and unfairly skews his assessment of them. It simply means that the personal beliefs, perceptions or prejudices of the applicant are removed from the assessment process.”[114] 102. As indicated in his “second step”, McWalters J considered that in determining whether the requisite “reasonable grounds to believe” existed one should ask whether “the common sense, right-thinking member of the community ... possessed of [the facts known to the defendant], objectively would consider them sufficient to lead a person to believe that the property in question constitutes the proceeds of an indictable offence.” By this he meant that the standard was what the reasonable man “could” believe: “... the mens rea is not concerned with what the reasonable man might or would believe but rather with what he could believe.”[115] D.4 This Court’s decision in Pang Hung Fai 103. The central principle on which this Court’s decision in Pang Hung Fai[116] is based rests on the wording of section 25(1). As Spigelman NPJ[117] pointed out, the directly relevant words that fall to be interpreted are: “having reasonable grounds to believe”.[118] Those words in section 25(1) refer to the grounds which the accused has: “... by the use of the word ‘having’, the decision-maker's attention is directed expressly, by the terms of the section, to the grounds available to the accused”.[119] This was the focus in HKSAR v Yan Suiling,[120]and it was on this basis that his Lordship commended[121] the simple test propounded in the Appeal Committee in Seng Yuet Fong v HKSAR[122] in the following terms: “To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.” As Spigelman NPJ emphasised: “... it is the accused who must be shown to ‘have had reasonable grounds to believe’.”[123] 104. Spigelman NPJ noted that the Court of Appeal in Shing Siu Ming and in Pang Hung Fai referred to above[124] had been diverted from the central principle by certain “distractions”, namely: (i) replacing the word “grounds” with the narrower word “facts”; (ii) introducing the concepts of “objective” and “subjective” which are not in the section; (iii) personifying the “objective” element in terms of a “reasonable person” or “right-thinking member of the community” instead of focussing on the grounds available to the accused; and (iv) postulating a two-step test which could (as it did in Pang Hung Fai) inappropriately restrict the range of matters taken into account in considering what grounds were available to the accused.[125] 105. The Court[126] disapproved of the Court of Appeal’s exclusion from the assessment of reasonable grounds “the personal beliefs, perceptions or prejudices of the defendant” while taking account of the facts and circumstances known to him.[127] 106. The Court of Appeal’s view that “the mens rea is not concerned with what the reasonable man would believe but rather with what he could believe”[128] was also held to be erroneous. The applicable standard was whether on the grounds available to him, the accused would have been led to have the requisite belief.[129] Spigelman NPJ pointed out that this reflects a significant mens rea element in the second limb of the offence under s 25(1) and imports a strong element of moral blame: “By the imposition of the same penalty, the mental element of the ‘reasonable grounds’ alternative is regarded as being at the same level of moral obloquy as actual knowledge. A test that propounds a relationship between the existence of ‘grounds’ and a state of ‘belief’ in terms of possibility does not do that. Only a test which states that those ‘grounds’ would lead to the ‘belief’ does so.”[130] D.5 As to Question 2 107. Question 2[131] asks to what extent a Judge needs to make positive findings as to a defendant's belief, thoughts and intentions at the material time even though the judge rejects the defendant’s testimony and whether, in a case where the defendant’s testimony is rejected the Judge can “remain oblivious to the defendant’s actual reason(s) for dealing with the specified proceeds in making the finding that the defendant had reasonable grounds to believe that the proceeds he dealt with were proceeds of crime”. 108. In addressing this Question, the starting-point is the abovementioned principle[132] that section 25(1) requires proof that the defendant had the requisite reasonable grounds to believe. In this context, it is important to appreciate that an examination of the defendant’s state of mind may be relevant for two purposes. 109. The first is inculpatory. Thus, the test propounded in Seng Yuet Fong is an inculpatory test for establishing mens rea: “To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.” (Emphasis added) 110. The defendant’s state of mind is assessed for the inculpatory purpose of asking whether, on the reasonable grounds proven to have been available to him, he wouldhave been led to have the requisite belief.[133] His knowledge or appreciation of the circumstances which supply such grounds provide the element of moral blameworthiness discussed above. 111. The second is an exculpatory purpose. Thus, it was held in Pang Hung Fai that McWalters J was wrong to exclude from consideration what he called “the personal beliefs, perceptions and prejudices” of the accused. As Spigelman NPJ noted, such matters fit readily within the concept of a “ground”, which a particular person can be said to have “had” and which may be such as to exclude a culpable state of mind. 112. For example, in Yan Suiling,[134]the defendant explained that cheques issued by various persons whom she did not know, paid into her bank account in Hong Kong were received as part of underground banking transactions reflecting back-to-back deposits made on her behalf on the Mainland, undertaken as a means of circumventing the Mainland’s exchange control limits on converting RMB into Hong Kong Dollars. If believed, such evidence would have been exculpatory. It would have constituted a basis for holding that, knowing what she did about the reason for the cheques paid into her account, she did not have reasonable grounds to believe that such funds represented the proceeds of an indictable offence. Chan PJ, giving the judgment of the Court, put this as follows: “In her evidence, the appellant sought to explain how she came to receive the cheque in question and more importantly, why she had made no enquiry when she received the cheque. If this explanation was true or might be true, this would support or tend to support her claim that there was no reason for her to make enquiry and she had no reasonable grounds to believe that the payment she received was the proceeds of crime. The Judge accepted that in that case, she should be acquitted.”[135] 113. Another example is the case of HKSAR v Li Kwok Cheung George,[136] where the property dealt with was known by the defendants concerned to be “clean” funds provided by a financial services company intended to be used as an instrument of fraud rather than funds representing the proceeds of an indictable offence. The Court declined to treat the transaction as falling within section 25(1) since to do so would have involved treating payments as constituting the offence without having to be payments which the defendant knows or has reasonable grounds to believe are tainted proceeds.[137] 114. In Pang Hung Fai itself, the trial judge was found to have erred in failing to take into account evidence of the accused’s beliefs and perceptions which were capable of being exculpatory. As Spigelman NPJ noted: “... Although earlier in his judgement, the trial judge sets out the close personal and business relationship between the two men, extending as it did over decades, none of these factors are contained in the list of facts available for consideration by the ‘commonsense, right-thinking member of the community’ at [101]-[107]. Accordingly, even the matters referred to in [102], [103] and [104] are out of context. More importantly, none of these other aspects of the relationship are listed as facts which the ‘reasonable person’ took into account. This error is probably a result of asking the HKSAR v Shing Siu Ming questions in the wrong order. In my opinion the appellant's contention that the list of grounds considered by the trial judge was too narrow should be upheld.”[138] 115. The conclusion which a court reaches on the issue of whether a defendant had the relevant reasonable grounds to believe depends on the state of the evidence. 116. If he provides no evidence at all of his beliefs and perceptions, etc, the Court is left to draw whatever inferences may be proper based on the prosecution’s evidence. Such evidence will no doubt be intended by the prosecution to be inculpatory as establishing the indicia of money laundering. But such evidence may also of course be exculpatory, casting doubt on whether the defendant had the necessary reasonable grounds to believe. 117. If the defendant does testify or call evidence as to his state of mind but is entirely disbelieved, the court finds itself essentially in the position described in the preceding paragraph. Rejecting the defendant’s evidence does not automatically mean that he must be convicted. It remains necessary for the court to be satisfied that the case against him has been proved beyond reasonable doubt. In HKSAR v Yan Suiling,[139] for instance, the appeal was allowed on the basis that after rejecting the defendant’s evidence regarding her underground banking involvement, there was an insufficient basis for the Court to be satisfied that she must have had reasonable grounds to believe that the money in question represented the proceeds of crime. 118. If, on the other hand, the evidence provided by the defendant as to what he perceived and believed is accepted as true or as evidence which may be true; and if true would be inconsistent with him having reasonable grounds to believe that the property in question represents the proceeds of crime, an acquittal is called for since an essential mens rea element cannot be established against the defendant. 119. No difficulty arises if the defendant’s evidence provides a plausible explanation for his dealing with the property. But what of the situation where the defendant’s asserted perceptions or beliefs, even though believed, would strike others as excessively naïve or gullible or foolish in the light of objective facts known to the defendant which would have led others readily to believe that reasonable grounds existed to believe that the property was tainted? The facts of Pang Hung Fai furnish a possible example.[140] Many people might well have considered it suspicious for Kwok to ask Pang to receive payments into Pang’s bank account and then to remit the funds to Cambodia shortly afterwards for no apparent reason. Kwok, as Pang must have known, undoubtedly had his own bank accounts and, given his substantial business interests in Cambodia, undoubtedly had ample means of transferring funds between Hong Kong and that country. However, given the evidence of his long and particularly close friendship with Kwok described above, if there had been a re-trial, Pang might have been able plausibly to claim that he had asked no questions because he trusted Kwok implicitly, believing him to be an honourable and substantial businessman and that he had no reason to suspect that the funds were the proceeds of crime. The principle which requires the focus to remain on whether the defendant had the requisite reasonable grounds to believe dictates that even in such cases, the offence is not made out.[141] 120. There may of course be instances where the defendant’s avowed beliefs are so far-fetched and bizarre that no one could be expected to regard the matters relied on as displacing the reasonable grounds which he obviously has for believing that the property stems from indictable offences. In such cases, the Court is likely to disbelieve the defendant rather than to find itself having to resolve a tension between his asserted beliefs and the proposition that, on the grounds available to him, he would reasonably have been led to believe that the property dealt with was tainted. 121. Question 2 postulates the rejection of evidence of the defendant’s state of mind which, one assumes, is intended to be exculpatory. It asks what consequences should flow from the judge’s rejection of the defendant’s testimony. As the foregoing discussion indicates, the answer is that the Court must act according to the state of the evidence which remains, asking whether all the elements of the offence have been established beyond reasonable doubt. There is no requirement (as Question 2 appears to suggest) that even after rejecting the defendant’s testimony, the Court must make findings as to his “belief, thoughts [and] intentions at the material time”, whatever the state of the evidence. 122. Yeung testified and called evidence with a view to providing innocent explanations for the funds flowing through his bank accounts and to negating the existence of reasonable grounds on his part to believe that such funds were the proceeds of crime. He was, however, almost entirely disbelieved. That left the Court with the task of deciding whether, on the evidence which it did accept, the section 25(1) offences were made out beyond reasonable doubt. It held that they were so established. No error of law was involved in reaching that conclusion. D.6 As to Question 4 123. Question 4[142] addresses a narrow issue raised by the prosecution. As we have seen,[143] when dealing with the second limb of the mens rea requirements imposed by the words “having reasonable grounds to believe” in section 25(1), the Court in Pang Hung Fai commended the test articulated in Seng Yuet Fong v HKSAR[144] in the following terms: “To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.” 124. The Question suggests that there is a need to reconcile that test with “the formulation ‘knew or ought to have known’ set out in Pang Hung Fai”. Difficulty is seen to arise out of the following paragraphs in that judgment:[145] “55. Although it is usually undesirable to substitute the words of a statute with an equivalent formulation, it is sometimes appropriate to do so, for purposes of clarification. For example, when an alternative formulation may assist a jury in its deliberations. On most such occasions, the Seng Yuet Fong formulation will be all that is required. 56. However, another formulation may sometimes assist. In s.25(1), the word ‘believe’ is used in the sense of ‘know’. The two mental elements in the subsection should be understood as if they read: ‘knew or ought to have known’.” 125. The suggestion in paragraph 56 that a test could be formulated using the words “knew or ought to have known” appears not to sit comfortably with the rest of the Pang Hung Fai judgment. In particular, as pointed out in the prosecution’s printed case,[146] the phrase “ought to have known” is generally taken to connote negligence. 126. Paragraph 56 must however be understood in the context of the Pang Hung Fai decision as a whole. As has been explained,[147] its central tenet is that one must look to the grounds as perceived by the defendant in deciding whether the mens rea requirements are proved. It is on that basis that (i) the Shing Siu Ming approach was disapproved and various aspects of the earlier decisions put aside as “distractions”; (ii) the Court held that it was erroneous to exclude the defendant’s personal beliefs, perceptions or prejudices from the assessment of his mens rea; (iii) it was erroneous to adopt as the applicable standard the question whether, on the available grounds, the defendant “could”, as opposed to “would” reasonably have been led to the belief that the property consisted of the proceeds of crime; and (iv) a significant mens rea element reflecting a strong element of moral blame is attributed to the second limb of the offence under s 25(1), justifying the setting of the same maximum penalty under both the “knowing” and the “having reasonable grounds to believe” limbs. 127. The Pang Hung Fai judgment therefore seamlessly focusses on the grounds which the defendant himself had. There is no basis for thinking that the Court intended, by a single sentence in paragraph 56, to introduce a wholly different basis for liability based on some purely external standard of negligence. 128. The sentence identified in Question 4 as causing the difficulty reads: “The two mental elements in the subsection should be understood as if they read: ‘knew or ought to have known’”. Those words are a reference to section 25(1) which lays down two alternative forms of mens rea.[148] The first is the “knowledge” limb and the second the “having reasonable grounds to believe” limb. In paragraph 56 of the judgment, “knew or ought to have known” is evidently intended to refer to those two limbs. “Knew” refers to the first limb and “ought to have known” is offered as a rendering of “having reasonable grounds to believe”. They are words which are capable of being misunderstood because of the unintended connotation of negligence, but paragraph 56 is merely attempting to encapsulate the detailed mens rea analysis undertaken at length in the judgment. The phrase “knew or ought to have known” should not be invested with any greater significance. The Seng Yuet Fong formulation presents a truer reflection of the mens rea analysis and, as paragraph 55 states, will usually be all that is required. Question 3 E. Duplicity E.1 General considerations 129. Pursuant to the power to make rules and orders as to practice and procedure conferred by the Criminal Procedure Ordinance, Cap 221, the Criminal Procedure Rules Committee, in 1976, made the Indictment Rules, which provide: “2. Basic form of indictment … (2) Where more than one offence is charged in an indictment, the statement and particulars of each offence shall be set out in a separate paragraph called a count, and rules 3 and 4 shall apply to each count in the indictment as they apply to an indictment where one offence is charged. … 3. Statement of offence in indictment (1) Subject to rule 4, every indictment shall contain, and shall be sufficient if it contains, a statement of the specific offence with which the accused is charged describing the offence shortly, together with such particulars as may be necessary for giving reasonable information as to the nature of the charge.” 130. The requirement that a count in an indictment shall set out one offence, and not more than one, is commonly referred to as the rule against duplicity. The precursor to the current rule, rule (1)(1) of the Indictment Rules 1919, was based on rule 4 of Schedule 1 to the Indictments Act 1915 (UK) which, in turn, reflected long-standing practice. Three years before the current Hong Kong rule was made, the House of Lords decided DPP v Merriman[149]. 131. In that case, Lord Morris of Borth-y-Gest said[150]: “[Q]uestions of joinder, whether of offences or of offenders, are very considerably matters of practice on which the court unless restrained by statute has inherent power both to formulate its own rules and to vary them in the light of current experience and the needs of justice. Here is essentially a field in which rules of fairness and of convenience should be evolved and where there should be no fetter to the fashioning of such rules. The current rules in regard to indictments are really a reflection of what has been thought to be fair: fair in the interests of the community in the preservation of law and order: fair in the interests of those who are charged and are tried.” 132. After reciting the rule requiring that each offence charged shall be set out in a separate count, Lord Morris said[151]: “The question arises - what is an offence? If A attacks B and, in doing so, stabs B five times with a knife, has A committed one offence or five? If A in the dwelling house of B steals ten different chattels, some perhaps from one room and some from others, has he committed one offence or several? In many different situations comparable questions could be asked. In my view, such questions when they arise are best answered by applying common sense and by deciding what is fair in the circumstances. No precise formula can usefully be laid down but … it will often be legitimate to bring a single charge in respect of what might be called one activity even though that activity may involve more than one act.” 133. The question of what constitutes, or may be treated as, an offence for the purpose of framing a count in an indictment, which in turn is related to the requirement of fairness in criminal procedure, often arises in cases where the characteristics of a crime, or of a course of criminal conduct, are such that it would be possible, in theory, to reduce each allegation to the narrowest unit of offending, but no useful purpose would be served by doing so. On the other hand, if an offence charged is a single continuing offence then no such question will arise. As Lord Roskill pointed out in Hodgetts v Chiltern District Council[152], it is not an essential characteristic of a criminal offence that it should take place once and for all on a single day. Some offences may take place over a period of time. An example is that considered by this Court in HKSAR v Li Li Mua[153] (overstaying contrary to a condition of a visa). In that case there were not a series of separate offences repeated daily; there was one continuing offence. A charge of such an offence occurring over the period of the overstay would not give rise to any problem of duplicity. The question of duplicity in a charge arises where the conduct alleged in a charge involves a number of acts each of which is capable of being treated as a separate breach of the law. 134. To return to the first of the two examples given by Lord Morris in Merriman, a physical attack by one person upon another will often consist of a number of acts each of which, considered in isolation, would involve an offence. In many cases it would be absurd to make each such act the subject of a separate charge. What, however, of a prolonged course of violent conduct, against a single victim, over hours, or days, or perhaps a longer period? As to the second example, a burglar is unlikely to be charged separately in respect of each item of property stolen from a house, but what of an employee who regularly misappropriates money from an employer over an extended period? No one suggests that criminal behaviour can never be treated as one offence for the purpose of the Indictment Rules if it is capable of being broken down into a number of offences. Conversely, no one suggests that the prosecution has an unconstrained discretion such that an offence is constituted by whatever conduct the prosecution decides to make the subject of one charge. 135. In Merriman, Lord Diplock, with whom Lord Reid and Lord Salmon agreed, said[154]: “The rule against duplicity, viz. that only one offence should be charged in any count of an indictment, which is now incorporated in rule 4 (1) of Schedule 1 to the Indictments Act 1915 , has always been applied in a practical, rather than in a strictly analytical, way for the purpose of determining what constituted one offence. Where a number of acts of a similar nature committed by one or more defendants were connected with one another, in the time and place of their commission or by their common purpose, in such a way that they could fairly be regarded as forming part of the same transaction or criminal enterprise, it was the practice, as early as the eighteenth century, to charge them in a single count of an indictment.” 136. The subject for consideration is the charging of substantive offences. His Lordship’s reference to a criminal enterprise was not made in the context of a case of conspiracy. Charging a conspiracy may, or may not, be an appropriate way to approach a course of criminal behaviour, but it raises issues of procedure and substance that are outside the scope of the present problem. 137. In making a judgment as to whether acts are so connected that they can fairly be regarded as forming part of the same transaction or criminal enterprise it is necessary to keep in mind the purpose for which the question is asked. The rule against duplicity originated in a time of high technicality[155], but at the present time it exists to serve the needs identified by Lord Morris in Merriman; fairness to the community, and fairness to the accused. Courts in the United States, like courts in Hong Kong, the United Kingdom, Canada, and Australia, have summarized the reasons underlying the rule against duplicity in indictments as: “avoiding the uncertainty of whether a general verdict of guilty conceals a finding of guilty as to one crime and a finding of not guilty as to another, avoiding the risk that the jurors may not have been unanimous as to any one of the crimes charged, assuring the defendant adequate notice, providing the basis for appropriate sentencing, and protecting against double jeopardy in a subsequent prosecution”[156]. 138. An example of the application in the United Kingdom of Merriman is Barton v Director of Public Prosecutions[157]. The defendant stole small amounts of cash from a till on 94 occasions over the course of a year. She was convicted of a single count of theft. Her criminal acts could fairly be regarded as forming part of the same transaction or criminal enterprise. A judgment as to what can fairly be regarded as the scope of a criminal enterprise for the purpose of framing an indictment is likely to be affected by the nature of the crime, the circumstances of its commission, potential grounds of defence or exculpation, and the considerations of practice and procedure that will follow from adoption of one course or another. Where there is a question of framing a single count, the nature of the possible alternative courses open may be influential. In the case of Barton the most obvious alternative was 94 counts. A few specimen counts could have been charged, but they would not have reflected the overall criminality of the defendant’s conduct. 139. Australian examples of the application of Merriman (putting aside for the moment cases of money laundering) include R v Moussad[158] (defrauding the Commonwealth over a period of more than two years involving 46 acts of dishonesty) and R v Hamzy[159] (a single count charging supply of a prohibited drug based on a number of individual acts of supply by the accused to different people at different times). As was pointed out in those cases[160], where the prosecution charges a number of acts in a single count it does not have to establish every such act in order to succeed. 140. The Indictment Rules that applied in England and Wales at the time of Merriman were revoked by the Criminal Procedure (Amendment) Rules 2007. Rule 14.2(2) provides: “More than one incident of the commission of the offence may be included in a count if those incidents taken together amount to a course of conduct having regard to the time, place or purpose of commission.” 141. The related Criminal Practice Direction states[161]: “Rule 14.2(2) of the Criminal Procedure Rules 2005 allows a single count to allege more than one incident of the commission of an offence in certain circumstances. Each incident must be of the same offence. The circumstances in which such a count may be appropriate include, but are not limited to, the following: (a) the victim on each occasion was the same, or there was no identifiable individual victim as, for example, in a case of the unlawful importation of controlled drugs or of money laundering; (b) the alleged incidents involved a marked degree of repetition in the method employed or in their location, or both; (c) the alleged incidents took place over a clearly defined period, typically (but not necessarily) no more than about a year; (d) in any event, the defence is such as to apply to every alleged incident without differentiation. Where what is in issue differs between different incidents, a single ‘multiple incidents’ count will not be appropriate, though it may be appropriate to use two or more such counts according to the circumstances and to the issues raised by the defence.” 142. In R v Middleton[162] the Court of Appeal in its Criminal Division, referring to the Explanatory Memorandum to the Practice Direction, said that the Rules Committee considered that they were doing no more than codifying the existing law. In this Court, counsel challenged the accuracy of that statement, and pointed out that no reference was made to R v R[163], which demonstrated the difficulty of treating money laundering offences in England as “activity” offences. As noted in an earlier part of these reasons, the money laundering legislation in England is different from the Hong Kong legislation. It has a purposive element that could be of significance for rolled-up charges. The relevant Hong Kong rule was made soon after Merriman, and Merriman itself reflected earlier practice. 143. An issue that is sometimes described as cognate with that of duplicity in an indictment, but that needs to be distinguished, concerns what has been called the latent ambiguity or uncertainty that arises where a count in an indictment alleges that a defendant has committed a single offence but the prosecution leads evidence of multiple, but separate, offending of the same nature without specifying which instance of offending is the subject of the charge. Examples of that problem can be seen in the decision of this Court in Chim Hon Man v HKSAR[164] and that of the High Court of Australia in S v The Queen[165]. Those cases concerned the use of specimen counts in prosecutions for sexual abuse. In each case the alleged abuse occurred over a long period and the complainant was unable to be precise as to the time, date and place of any of the particular abusive acts. In S there were three counts, each of which charged one act of carnal knowledge on a date unknown within a specified period of twelve months. The complainant’s evidence was of numerous acts over each of the three periods, but there was no evidence to link any particular act with any one of the charges. In Chim Hon Man there were two counts of rape. The complainant’s evidence was that she was raped many times over the period specified in the counts. In each case, there were convictions, but, by reason of the manner in which the trial was conducted there was held to be serious unfairness. It was impossible to know of which particular acts the defendant had been convicted. In Chim Hon Man[166], Sir Anthony Mason NPJ described that case, and S, and the earlier Australian case of Johnson v Miller[167], as turning on a “companion principle” which serves the same general purpose as the rule against duplicity, the principle being that where a prosecution charges a single offence in an indictment the basis for a conviction cannot be laid by evidence of the commission of multiple offences none of which is identified as the particular act which is the foundation of the charge. The present appeals are concerned with the rule against duplicity itself, not the companion principle, although in the practical application of both there may arise similar questions of fairness. 144. Another issue that may be related to, but is separate from, the issue of duplicity is whether the indictment charges an offence known to the law. For example, Hong Kong legislation does not create an offence of carrying on a business of money laundering. There may be people who carry on such a business, and they would obviously engage in illegal conduct, but the nature of the illegality would be determined by the meaning of the offence-creating legislation. It is one thing to group offences in one charge on the basis that they form part of a common enterprise; it would be another thing to charge the enterprise itself as a substantive offence, unless the legislation makes the enterprise an offence. 145. The need to attend to the nature of the offence as determined by the terms of the relevant legislation is exemplified by the Australian case of Johnson v Miller[168]. As Dixon J pointed out[169] the difficulty in that case arose in part from the particular characteristics of the substantive offence forming the subject of the proceedings, and the matters of exculpation that could be invoked by a defendant. That aspect of the case was later remarked upon by Barwick CJ in Montgomery v Stewart[170], and by Dawson and Toohey JJ in Walsh v Tattersall[171]. 146. Where an objection to an indictment on the ground of duplicity is taken at trial, and upheld, the consequence is not that the indictment, or the relevant count, is a nullity. The most obvious form of possible amendment is to frame a separate count for each separate offence. Alternatively, if for example, there is to be one kind of defence to one group of allegations and another defence to others, two counts grouping charges according to the likely issues may suffice. As the English Court of Appeal observed in R v Marchese[172], citing R v Thompson[173], a count which does not comply with the rules can be amended at trial. Where a defendant’s complaint of non-compliance with Indictment Rule 2 involves one of the forms of unfairness that the rule against duplicity aims to prevent, then a trial judge may need to consider whether that problem can be addressed by the available powers of trial management. In a particular case, that may be affected by whether the trial is by jury or by judge alone, and whether, in the way the prosecution case is to be presented, there may be a need for special or partial verdicts, or appropriate directions to deal with the postulated unfairness. There may be reasons why a defendant, facing a charge based on a large number of individual criminal acts, would not wish to invite a separate charge in relation to each act. Such a course could be oppressive to a defendant, and potentially prejudicial. 147. In the present appeals, no objection to the indictments, on the ground of duplicity, was taken at trial. In each case, the point was first raised on appeal[174]. As the authorities on the subject show, that is not uncommon. When the point is raised for the first time on appeal, the appellate court will consider whether the objection based on duplicity is well-founded and whether the form of the indictment resulted in the risk of injustice[175]. The appellate court will have the benefit of hindsight. It will know the nature of the defence case at trial, whereas a trial judge may have had to consider potential unfairness on the basis of the charges and particulars, and the prosecution opening. It will have the trial judge’s reasons for verdict. If no complaint about duplicity was made at trial that may have a bearing on a claim of unfairness. 148. Before turning to the application of the above general considerations to money laundering cases, it is convenient to mention a matter of terminology. In each of the present appeals the point of law said to be raised by Question 3 was framed by the applicant for leave to appeal. The language used reflects in part the reasons in Salim[176]. The reference to Merriman as establishing an “exception” to the rule against duplicity is, however, inapposite. It is more accurate to say that decision was an explanation of the way in which the rule now operates in practice. As noted above, there is no general requirement that if a separate criminal act can be identified it must be the subject of a separate count unless one can bring the case within some recognised exception. That would be a misreading of Merriman. Furthermore, the references to “general deficiency” and “continuous course of conduct” are taken from the context of two lines of authority dealing with fraud and misappropriation, as explained by Kennedy LJ in Barton v DPP[177]. The relevant principle is that recognised in Merriman, and those lines of authority are particular applications of that principle to a certain kind of crime. E.2 Duplicity and Money Laundering 149. Money laundering has been described as “the process of disguising the origins of property which has been acquired through criminal conduct.”[178] Concealment and disguise are of its essence. Reference has already been made to money laundering activities being “cloaked in secrecy”[179]. Lord Hope of Craighead, in R v Montila[180], set out the provisions of the Vienna Convention, the Strasbourg Convention signed by the United Kingdom on 8 November 1990, and the EEC Council Directive of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering. The Directive’s definition of money laundering gave prominence to a purpose of concealing or disguising the illicit origin of property. The Criminal Justice Act 1988 (UK), which was the statute applied in Montila, identified concealing or disguising property, followed alternatively by converting or transferring property, as the actus reus of the offence created by s 93C which implemented the Directive. 150. Legislation aimed at money laundering may extend to forms of dealing with property going beyond the terms of the Vienna Convention. An example is Division 400 of the Schedule to the Criminal Code Act 1995 of Australia. That legislation specifically addresses the matter of duplicity as follows: “400.12 Combining several contraventions in a single charge (1) A single charge of an offence against a provision of this Division may be about 2 or more instances of the defendant engaging in conduct (at the same time or different times) that constitutes an offence against a provision of this Division. (2) If: (a) a single charge is about 2 or more such instances; and (b) the value of the money and other property dealt with is an element of the offence in question; that value is taken to be the sum of the values of the money and other property dealt with in respect of each of those instances.” 151. In State jurisdictions in Australia, in cases where the Commonwealth Criminal Code had no application, State Supreme Courts, applying Merriman, have accepted the propriety and fairness of charging a number of acts of money laundering in a single count (see R v Trad and Younan[181], R v Ferguson[182]). As the facts of those two cases illustrate, money laundering often pursues the objectives of concealment and disguise by conduct that not only involves a multiplicity of dealings but also answers the description of a number of the specific acts covered by the relevant legislation. 152. The case of Yeung provides an example of the practical problem. The prosecution in that case alleged 963 bank deposits each of which was said to constitute a receipt, and therefore, a dealing within the meaning of s 25 of OSCO. However, on the facts alleged by the prosecution, the movements in and out of the bank accounts in question may well have satisfied other aspects of the definition of dealing. If there should have been separate charges in respect of each receipt that would have meant 963 charges. A case based on every form of dealing covered by s 25 could have involved several times that number of charges. The nature of money laundering, considered in the light of the technology available to those who wish to conceal or disguise the proceeds of crime, is such that it is by no means fanciful to envisage a course of conduct that involves hundreds, or even thousands, of dealings. A selection of specimen charges may not enable the prosecution fully to expose the criminality involved, and may give rise to problems of the kind that arose in Chim Hon Man. 153. In the United States, this problem has given rise to differences of judicial opinion. In 1993, in United States v Conley[183] (which was approved in 2000 in United States v Gray[184] and adopted in 1996, in United States v Kramer[185]), a money laundering count charging the conducting of financial transactions (in the plural) by depositing moneys in two accounts was held duplicitous. However, in 2002, in United States v Moloney[186], the United States Court of Appeals, Second Circuit held that the defendant’s Ponzi scheme was a unified scheme and could be covered in one money laundering count. The relevant statutory language, which applied to those who conduct a “financial transaction” either to promote unlawful activity or conceal the proceeds of unlawful activity, was held to be capable of extending to a case where many smaller transactions make up one larger transaction. The earlier cases mentioned above were noted, but it was said that the courts deciding them lacked the Second Circuit’s general presumption in favour of allowing a common scheme to be treated as part of a single scheme. The reasoning examined the rationale of the rule against duplicity. The Court said[187]: “Because no convincing reason exists to deviate from this court’s general rule, we hold that a single money laundering count can encompass multiple acts provided that each act is part of a unified scheme. This conclusion is particularly sound because money laundering frequently involves extended sequences of acts designed to obscure the provenance of dirty money.   In this case, allowing Moloney’s unified scheme to be covered by a single count eliminates the cumbersome and largely pointless need to charge him with a count of money laundering for every ‘interest’ payment he mailed to any of his clients.” What was described as the Second Circuit’s general rule was explained in United States v Margiotta[188], United States v Aracri[189] and United States v Tutino[190]. Having noted the policy considerations underlying the doctrine of duplicity, the reasoning continued[191]: “The identification of these considerations suggests that a single count of an indictment should not be found impermissibly duplicitous whenever it contains several allegations that could have been stated as separate offenses … but only when the failure to do so risks unfairness to the defendant.” To return to the case of Moloney, it may be remarked that proof of a Ponzi scheme would normally require an overview of a series of receipts and payments, just as, in both of the present appeals, the prosecution case relied upon a pattern of movements in particular bank accounts as displaying the hallmarks of money laundering. 154. While the law of Hong Kong does not recognise what would be described as a “general presumption”, it follows the approach in Merriman, and accepts the potential importance of a unified scheme. Furthermore, the emphasis placed by the United States Court of Appeals, Second Circuit, upon deciding whether a count is impermissibly duplicitous in the light of the rationale of the pleading rule accords with the approach that should be taken in Hong Kong. 155. The starting point for the application of the pleading rule in a particular case is the statutory provision creating the offence or offences charged. It has already been noted that s 25 of OSCO does not create an offence of carrying on a business of money laundering, which of its nature would be a continuing offence and would give rise to no question of duplicity. Most of the forms of “dealing” set out in the definition in s 2 of the Ordinance involve conduct that would normally consist of an individual act. That is so in the case of paras (a), (c) and (d) of the definition. Whether it is so in the case of para (e) is less clear. However, para (b) uses language that is capable of covering a continuing process. A person may conceal property over a period of time; perhaps a long period. The individual acts identified in paras (a), (c) and (d) could be undertaken as part of a process of concealing the relevant property. 156. It was argued that section 25A and subsection 25(2) are inconsistent with the possibility that an offence against subsection 25(1) might be an offence of a continuing nature and, therefore, concealing property should be understood as an act that is complete at the beginning of a period of concealment and is not capable of giving rise to a continuing offence. This argument should not be accepted. The definition of “dealing” is expressed to be inclusive, not exhaustive. Furthermore, at least in its reference to concealing it refers to conduct which of its nature may be continuing. It is true that the disclosure regime involves a temporal relationship between disclosure and conduct which is more easily related to individual acts, but the kind of circumstance that may in practice give rise to a suspicion that money laundering is going on could well include an observation of an apparently continuing process. 157. The conduct which in any particular case is alleged to fall within the definition of dealing, so as to satisfy the terms of subsection 25(1) (“deals with … property”), must be related to “property [that] … represents the proceeds of an indictable offence”. The property referred to is specific property which is known to have a certain attribute or about which the defendant has reasonable grounds to believe that it has that attribute. If a continuing offence of concealing property over a month, or a year, were committed then that would be a single crime in relation to the property the subject of the concealment. The subject property, however, would be property which remains the same over the period of the single offence. The prosecution did not argue the cases of Yeung or Salim, either at trial or in the Court of Appeal, on the basis that each charge covered only one continuing offence of concealing property. One difficulty with such an approach (which was urged in this Court) is that the subject property changed constantly over the period. The kind of property may have remained the same but the actual property did not. Both at trial and in the Court of Appeal the prosecution case was that each deposit was an act of receiving within para (a) of the statutory definition of dealing, and each act of receiving constituted a criminal act, although the acts were properly aggregated, by reference to particular bank accounts, and made the subject of a single charge in respect of each account. 158. That is not to say, however, that the aspect of concealment is irrelevant to the duplicity argument. It provided part of the connection which made the individual deposits acts of a similar nature which could fairly be regarded as forming part of the same transaction or criminal enterprise. 159. A bank account itself may be an aspect of connection between amounts deposited to the credited account. How such deposits may fairly be regarded for the purpose of the application of rule 2 of the Indictment Rules is to be decided in the light of the rationale of the rule. In cases of money laundering it will often be cumbersome and impractical to frame a separate count for each possible unit of criminal conduct arising from the facts alleged against the defendant. Where a number of acts of money laundering are connected in such a way that they can be regarded as forming part of the same transaction or criminal enterprise then it will be legitimate to charge them in a single count unless there is a risk of injustice to the defendant. Such injustice might lie in uncertainty or inadequate notice as to the case the defendant has to meet, confusion or prejudice resulting from different defences to different aspects of the prosecution case, problems of admissibility of evidence, or uncertainty as to the scope of an ultimate verdict. If these or other considerations that may be raised in a particular case are capable of being met, without unfairness, by appropriate measures of trial management then a court may well conclude that the rule does not prevent aggregation for the purpose of framing a charge or charges. In some cases, insistence upon compliance with section 65DA of the Criminal Procedure Ordinance Cap 221 (notice of expert evidence) will be useful in identifying possible sources of difficulty and potential solutions. E.3 The Case of Yeung 160. As noted earlier[192], there was at trial no objection to the indictment on the ground of duplicity, and duplicity was not mentioned in the original grounds of appeal to the Court of Appeal. Before the appeal in Yeung came on for hearing, the Court of Appeal decided the case of Salim v HKSAR[193]. As will appear, although the issue of duplicity in that case arose in a somewhat indirect manner, what was said and decided had potential application to the appeal of Yeung. The grounds of appeal in Yeung were amended and, in argument before the Court of Appeal, duplicity was argued. 161. The counts in the indictment had been separated, not by reference to individual contraventions of s 25 of OSCO (on the prosecution case, which focussed on the act of receiving, there were 963 such contraventions), but by reference to particular bank accounts used for the purpose of such contraventions. 162. The reasoning of the Court of Appeal involved two steps[194]. First, the Court concluded that, given the obviously different provenance of the multiple deposits of money in the bank accounts the subject of the five charges over a period of years, each charge was patently duplicitous. “We are not satisfied that those multiple acts, occurring over that considerable lengths of time, fall to be regarded as connected with one another by a common purpose, so that they are to be regarded as a common transaction or criminal enterprise.”[195] Noting a large number of transactions involving different depositors the Court of Appeal said: “The issues likely to arise were likely to be different”[196]. For example, it was said, a payment of about $37.5 million from an account in the name of Hooray Securities in September 2001 was on its face a transaction of an entirely different nature from deposits three years later of 10 cheques to a total value of about $62.5 million. 163. Having concluded that the charges were patently duplicitous, the Court of Appeal said it was then necessary to consider whether, in consequence, there was prejudice to the appellant such that his trial was unfair[197]. This question was answered in the negative, substantially on the grounds that the prosecution case as advanced at trial made sufficiently clear its case as to how the various deposits, some concerned with identifiable transactions and some not, revealed an overall pattern justifying an inference of money laundering and that the defence case was able to advance not only an overall explanation for the dealings but also different specific explanations for different transactions. (The fact that these explanations were found by the trial judge, for adequate reasons, to be false was another matter). The Court of Appeal concluded[198]: “It follows that we are satisfied that there is force in Mr Caplan’s submission that, although the charges included within each of them multiple incidents relied on by the prosecution in proof of the respective charge, the differentiation between the various incidents was not only readily apparent to the defence and the judge but also addressed separately by each of them in turn. So, even if the prosecution had been required to condescend to stipulate multiple individual counts, the defence case would have remained the same. Similarly, we are satisfied that the defence advanced to meet that case would have remained the same. Accordingly, we are satisfied that although the charges were duplicitous, no prejudice was caused thereby to the applicant.” 164. The corollary of this reasoning appears to be either that there should have been 963 charges or, alternatively, in those cases where a number of deposits appeared to be related to one transaction, they could be aggregated and all the other deposits (the majority) charged separately, but in either event it would have made no practical difference to the fairness of the trial. Whereas, in the course of finding that the counts were duplicitous, the Court of Appeal said the issues likely to arise were likely to be different as between the various deposits, its reasoning on the question of possible prejudice shows that it meant no more than that the defendant was likely to advance different explanations in respect of different deposits. However, the Court of Appeal went on to conclude that he was not materially inhibited in doing that by the way the charges were framed. 165. In this Court it was argued that the Court of Appeal was wrong to conclude that there was no unfairness to Yeung at trial arising from the aggregation of dealings in the form of the indictment. However, the reasoning of the Court of Appeal on the various challenges that were made to the assessment of the evidence by the trial judge supports that Court’s conclusion, in the light of the conduct of the trial, that even if 963 separate charges had been laid the defence case would have been the same and the outcome would have been the same. From the beginning the case for the prosecution was based upon inferences to be drawn from the overall pattern of dealing in each of the bank accounts. If the prosecution had laid separate charges in respect of each deposit, or if it had aggregated some of the charges differently, it would have invited the judge to take account of what the forensic accountant referred to as hallmarks of money laundering. For its part, the defence set out to give an innocent explanation of a number of the transactions underlying certain deposits. It is difficult to understand why its case in that respect would have been different if there had been separate counts for each deposit, or why the ultimate factual conclusions of the trial judge would have been different. 166. There is, however, error in the reasoning of the Court of Appeal on the anterior question as to whether the charges were duplicitous. The Court of Appeal did not address the specific question as to how many counts would be required, in order to avoid the duplicity of which it spoke, and whether that would have served any purpose related to fairness. In considering whether it was illegitimate to aggregate particular acts of dealing it did not test the case against the rationale of the rule against duplicity. Furthermore, in finding that the deposits were not connected with one another by a common purpose, so as to be regarded as a criminal enterprise, the Court of Appeal made no reference to the common purpose of concealment, which the prosecution alleged was the function of each bank account. The multiplicity of the acts of dealing alleged by the prosecution, and the common purpose of concealment, made this a proper case for aggregation of charges. Questions of fairness are part of the initial judgment as to whether aggregation was in conflict with rule 2 of the Indictment Rules. Unless the rule mandated 963 charges, some form of aggregation was necessary, and considerations of fairness would decide what was permissible. If the point had been taken at trial, it would be a matter for trial management, undertaken in the light of the risks of unfairness and uncertainty, to decide the appropriate pattern of charges. E.4 The case of Salim 167. The question of duplicity came up in Salim v HKSAR[199] in an indirect manner. It had not been raised at trial, but on appeal it was advanced as an argument against ordering a new trial. Salim had been charged with four counts of money laundering, each charge relating to a bank account in the name of Day Leader. The total number of deposits, each of which was alleged to constitute a dealing, in the form of a receipt, was 46. Yaser, said to be an accountant, had a shelf company, Day Leader. He brought Salim from London to Hong Kong, made Salim the sole director and shareholder of Day Leader, and arranged for Salim to set up bank accounts in the name of Day Leader. Salim handed over what was necessary for Yaser to operate those accounts, and then Salim returned to London. The victims of email fraud were directed to pay money into those accounts. By inference, Yaser and his associates withdrew most of those moneys and ultimately Salim withdrew what remained. As a technique of concealing the proceeds of email fraud this seems potentially effective. Salim’s ongoing connection with the scheme was evidenced by his capacity to return to Hong Kong and withdraw moneys from the account himself. The trial judge dealt with the case (without argument on the point) as one of aiding and abetting money laundering by Yaser. The Court of Appeal, having allowed Salim’s appeal on the ground that he had been convicted on a basis (accessorial liability) with which he had never been charged, said there would be no point in ordering a new trial on amended charges of aiding and abetting as they would necessarily have been defective for duplicity[200]. The assumption was that any such charges would have been based on the same aggregation of dealings as the original charges. 168. In this Court, the prosecution makes the point that an obvious way to overcome any potential problem of duplicity at a new trial would have been to have 46 separate counts. The Court of Appeal did not appear to advert to that possibility. As noted above, duplicity does not render an indictment void, and can be overcome by an appropriate amendment, such as bringing separate charges for each alleged act of dealing. However, at this stage no new trial is sought and this Court is asked only to deal with duplicity in principle. 169. The Court of Appeal recorded[201] the argument for Salim as being that “[w]here more than one dealing with property is covered by the charge with each dealing taking place on a separate occasion then… the charge must be bad for duplicity.” For the reasons given earlier, that is not so. The Court of Appeal then asked itself whether the Merriman “exception” applied in this case. Again, for the reasons given earlier, Merriman did not establish an exception; it explained the meaning and practical application of the concept of “one offence” in a rule such as rule 2(2) of the Indictment Rules. The Court of Appeal concluded[202]: “We do not see how this activity, spanning as it does a period of some two and a half months and involving different receipts on different occasions from different victims, can be said to be one offence.” 170. It is unfortunate that the concealment aspect of money laundering in general, and of the scheme set up by Yaser and facilitated by Salim in particular, was not more to the forefront of the prosecution case. Putting distance between the perpetrators of email fraud and the proceeds, by directing the proceeds to a bank account in Hong Kong ostensibly controlled by a non-resident who visited briefly and might never be seen again, is a readily recognisable scheme. It is the purpose and technique of concealment that links the individual payments into the bank account and makes it proper to identify one criminal enterprise. 171. The Court of Appeal did not ask itself what unfairness would result from the aggregation of charges, or how such aggregation would relate to the rationale of the rule against duplicity. At the trial, Salim’s defence, comprehensively rejected by the trial judge, was that each account was established for the purpose of a legitimate business which he was intending to conduct with Mainland China. His evidence about that was found to be completely implausible. There was no reason to think that his defence would have been any different, or more convincing, had he been charged with 46 offences, or with some different combination of offences, or that in any other respect the aggregation of charges caused any unfairness. The defence case at trial was unaffected by the number of individual acts of dealing which the prosecution alleged. 172. Rule 2(2) of the Indictment Rules did not require a separate count for each of the alleged acts of dealing contrary to s 25 of OSCO. F. Disposition of the appeals 173. In his Notice of Appeal, Yeung asks that the judgment of the Court of Appeal in CACC 101/2014 dated 13 May 2015 be reversed, varied or altered or that he might have such other relief as this Court should determine. No basis has been made out for such relief and his appeal is dismissed. 174. In Salim’s case, the HKSAR’s Notice of Appeal asks this Court to reverse vary or alter the judgment of the Court of Appeal in CACC 184/2013 dated 14 November 2014 in respect of paragraphs 115 to 150 thereof concerning the Court of Appeal’s decision refusing to make an order for retrial on the grounds that the counts in the Charge Sheet were incurably duplicitous. We were informed by Mr Gerard McCoy SC,[203] counsel for the HKSAR, that no retrial is now being sought since Salim had left Hong Kong after his appeal was allowed. However, the HKSAR seeks a declaration that the Court of Appeal erred in holding that the offences charged against the defendant were duplicitous or incurably bad for duplicity. For the reasons given in this judgment, we allow the HKSAR’s appeal against the Court of Appeal’s refusal to order a retrial and we make a declaration that the Court of Appeal erred in holding that the offences charged were duplicitous. Ms Clare Montgomery QC, Mr Gary Plowman SC and Mr Derek C.L. Chan, instructed by Bough & Co., for the Appellant in FACC 5/2015 and the Respondent in FACC 6/2015 Mr Jonathan Caplan QC, on fiat for, and Mr Anthony Chau SPP, of the Department of Justice, for the Appellant in FACC 6/2015 and the Respondent in FACC 5/2015 Mr Gerard McCoy SC, on fiat for, and Mr William Tam SC, DDPP, of the Department of Justice, for the Appellant in FACC 1/2015 Mr Phillip Ross and Mr Patrick Wan, instructed by John M. Pickavant & Co., assigned by the Director of Legal Aid, for the Respondent in FACC 1/2015 ANNEX A – The relevant OSCO provisions Section 2 - Interpretation (1) In this Ordinance, unless the context otherwise requires- "dealing", in relation to property referred to in section 15(1) or 25, includes- (a) receiving or acquiring the property; (b) concealing or disguising the property (whether by concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it or otherwise); (c) disposing of or converting the property; (d) bringing into or removing from Hong Kong the property; (e) using the property to borrow money, or as security (whether by way of charge, mortgage or pledge or otherwise); (Added 90 of 1995 s. 2) "property" includes both movable and immovable property within the meaning of section 3 of the Interpretation and General Clauses Ordinance (Cap 1); ... "authorized officer means- (a) any police officer; (b) any member of the Customs and Excise Service established by section 3 of the Customs and Excise Service Ordinance (Cap 342); and (c) any other person authorized in writing by the Secretary for Justice for the purposes of this Ordinance; ... (6) For the purposes of this Ordinance- (a) a person's proceeds of an offence are- (i) any payments or other rewards received by him at any time (whether before or after 2 December 1994) in connection with the commission of that offence; (ii) any property derived or realised, directly or indirectly, by him from any of the payments or other rewards; and (iii) any pecuniary advantage obtained in connection with the commission of that offence; (b) the value of the person's proceeds of that offence is the aggregate of the values of- (i) the payments or other rewards; (ii) that property; and (iii) that pecuniary advantage. Section 8 - Confiscation orders (1) Where- (a) ... (i) in proceedings before the Court of First Instance or the District Court a person is to be sentenced in respect of one or more specified offences and has not previously been sentenced in respect of his conviction for the offence or, as the case may be, any of the offences concerned; ... (3) The court shall- (a) where subsection (1)(a)(i) is applicable- (i) first determine, if the prosecution so requests, whether the specified offence or any of the specified offences of which the person stands convicted is an organized crime; (ii) then, or where no request has been made under subparagraph (i), first- (A) impose on the person such period of imprisonment or detention (if any) as is appropriate in respect of the offence or, as the case may be, the offences concerned; (B) make such order or orders (other than a confiscation order) in relation to sentence as is appropriate in respect of the offence or, as the case may be, the offences concerned, and such order or orders may be or include any order- (I) imposing any fine on the person; (II) involving any payment by the person; or (III) under section 38F or 56 of the Dangerous Drugs Ordinance (Cap 134), or under section 72, 84A, 102 or 103 of the Criminal Procedure Ordinance (Cap 221); ... (4) The court shall then determine- (a) where subsection (1)(a)(i) is applicable, whether the person has benefited from the specified offence or from that offence taken together with any specified offence of which he is convicted in the same proceedings, or which the court proposes to take or has taken into consideration in determining his sentence; ... and, if he has, whether his proceeds of that specified offence or offences are in total at least $100000. ... (6) If the court determines that his proceeds of the specified offence or offences are in total at least the amount specified in subsection (4), the court shall determine in accordance with section 11 the amount to be recovered in his case by virtue of this section. Section 25 - Dealing with property known or believed to represent proceeds of indictable offence (1) Subject to section 25A, a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person's proceeds of an indictable offence, he deals with that property. (2) In proceedings against a person for an offence under subsection (1), it is a defence to prove that- (a) he intended to disclose to an authorized officer such knowledge, suspicion or matter as is mentioned in section 25A(1) in relation to the act in contravention of subsection (1) concerned; and (b) there is reasonable excuse for his failure to make disclosure in accordance with section 25A(2). (3) A person who commits an offence under subsection (1) is liable- (a) on conviction upon indictment to a fine of $5000000 and to imprisonment for 14 years; or (b) on summary conviction to a fine of $500000 and to imprisonment for 3 years. (4) In this section and section 25A, references to an indictable offence include a reference to conduct which would constitute an indictable offence if it had occurred in Hong Kong. Section 25A - Disclosure of knowledge or suspicion that property represents proceeds, etc. of indictable offence (1) Where a person knows or suspects that any property- (a) in whole or in part directly or indirectly represents any person's proceeds of; (b) was used in connection with; or (c) is intended to be used in connection with, an indictable offence, he shall as soon as it is reasonable for him to do so disclose that knowledge or suspicion, together with any matter on which that knowledge or suspicion is based, to an authorized officer. (2) If a person who has made a disclosure referred to in subsection (1) does any act in contravention of section 25(1) (whether before or after such disclosure), and the disclosure relates to that act, he does not commit an offence under that section if- (a) that disclosure is made before he does that act and he does that act with the consent of an authorized officer; or (b) that disclosure is made- (i) after he does that act; (ii) on his initiative; and (iii) as soon as it is reasonable for him to make it. ANNEX B - Charges in the Yeung case 1st Charge Statement of Offence Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence YEUNG Ka-sing, Carson, between the 3rd day of January 2001 and the 29th day of December 2007, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property namely a total sum of $347,310,098.00 Hong Kong currency in the bank account with the Wing Lung Bank Limited, account number 020-606-202-2754-2, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. 2nd Charge Statement of Offence Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence YEUNG Ka-sing, Carson, between the 2nd day of January 2001 and the 31st day of December 2007, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property namely a total sum of $254,303,959.00 Hong Kong currency in the bank account with the Wing Lung Bank Limited, account number 020-606-000-7770-9, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. 3rd Charge Statement of Offence Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence YEUNG Ka-sing, Carson, between the 2nd day of February 2001 and the 6th day of July 2007, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property namely a total sum of $31,188,121.00 Hong Kong currency in the bank account with The Hongkong and Shanghai Banking Corporation Limited, account number 062-0-082719, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. 4th Charge Statement of Offence Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence YEUNG Ka-sing, Carson, between the 7th day of September 2001 and the 17th day of December 2007, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property namely a total sum of $6,659,000.00 Hong Kong currency in the bank account with the Wing Lung Bank Limited, account number 020-606-000-8325-0, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. 5th Charge Statement of Offence Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence YEUNG Ka-sing, Carson, between the 7th day of September 2001 and the 29th day of December 2007, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property namely a total sum of $81,826,428.00 Hong Kong currency in the bank account with the Wing Lung Bank Limited, account number 020-606-202-4941-0, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. ANNEX C – Charges in the Salim case 4th Charge Statement of Offence Dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence SALIM Majed, between the 2nd day of December 2011 and the 21st day of February 2012, both dates inclusive, knowing or having reasonable grounds to believe that property, namely $8,609.72 Hong Kong currency in the account number 012-676-017725-8, held with the Bank of China (Hong Kong) Limited in the name of Day Leader Limited, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. 5th Charge Statement of Offence Dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence SALIM Majed, between the 2nd day of December 2011 and the 21st day of February 2012, both dates inclusive, knowing or having reasonable grounds to believe that property, namely $1,988.52 United States currency in the account number 012-676-9-212860-1, held with the Bank of China (Hong Kong) Limited in the name of Day Leader Limited, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. 6th Charge Statement of Offence Dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence SALIM Majed, between the 1st day of December 2011 and the 22nd day of February 2012, both dates inclusive, knowing or having reasonable grounds to believe that property, namely $266,495.22 Hong Kong currency, €30,566.10 European Union currency, £25,750 Great Britain Sterling and $677,578.30 United States currency in the account number 228-423539-883, held with Hang Seng Bank Limited in the name of Day Leader Limited, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. 7th Charge Statement of Offence Dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455. Particulars of Offence SALIM Majed, between the 1st day of December 2011 and the 22nd day of February 2012, both dates inclusive, knowing or having reasonable grounds to believe that property, namely $141,153.98 Hong Kong currency and $219,278.36 United States currency in the account number 817-524218-838, held with The Hongkong and Shanghai Banking Corporation Limited in the name of Day Leader Limited, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property. [1] Before H H Judge Douglas Yau, DCCC 860/2011 (28 February 2014). [2] Cap 455. [3] Lunn VP, Macrae and McWalters JJA, CACC 101/2014 (13 May 2015), Lunn VP giving the judgment of the Court. [4] Ma CJ, Ribeiro and Tang PJJ, FAMC 28 and 29/2015 (14 August 2015). [5] FACC 5/2015. [6] FACC 6/2015. [7] Ibid. [8] Before H H Judge Johnny Chan, DCCC 646/2012 (8 May 2013). [9] Lunn VP, McWalters JA and Pang J [2014] 6 HKC 678, McWalters JA giving the judgment of the Court. [10] See Section E.4 below. [11] At §§147-149. [12] Ma CJ, Tang and Fok PJJ, FAMC 71/2014 (10 February 2015). As Salim had served most of his sentence, the prosecution wished to raise the issue of duplicity as a matter of principle, without seeking any re-trial in the event that it should succeed. [13] Reasons for Verdict (“Yeung RV”) at §3. [14] Yeung RV at §§648-651. [15] Yeung RV at §§636, 642, 647, 657 and 669. [16] Yeung RV at §§631-633, 637-639, 643-644, 652-655 and 658-659. [17] Yeung RV at §518. [18] Yeung RV at §§566-570; 656 and 660. [19] Yeung RV at §620. [20] Yeung RV at §630. [21] Yeung CA Judgment at §§72 and 83. [22] Ibid. at §84. [23] Yeung RV at §607. [24] Yeung RV at §§413 and 576-582. [25] Yeung RV at §§583-593, 600; Reasons for Sentence, 7 March 2014 (“Yeung RS”), at §15. [26] Yeung RV at §§571-575 and 594-595. [27] Yeung RV at §§635, 647 and 669. [28] Yeung RV at §§642 and 657. [29] Yeung RS at §25. [30] Yeung RS at §13. [31] Yeung RS at §16. [32] Yeung RS at §21. [33] Those being Day Leader’s accounts with BOC (in respect of Charge 4), Hang Seng and HSBC. [34] Salim’s offer to plead guilty to the charges in respect of the three cash withdrawals was declined by the prosecution: Reasons for Sentence (“Salim RS”) at §26. [35] Reasons for Verdict (“Salim RV”) at §187. [36] Salim RV at §195. [37] Ibid at §197. [38] Salim RS at §§48-56 and 64-65. [39] Salim CA Judgment at §§86-88. [40] Ibid at §§109-110, 113. [41] Ibid at §§115-149. [42] Bokhary, Chan and Ribeiro PJJ (2001) 4 HKCFAR 29. [43] Contrary to section 24(1) of the Theft Ordinance (Cap 210). [44] (2001) 4 HKCFAR 29 at 31. [45] Ibid at 32. [46] (2007) 10 HKCFAR 98. [47] [2004] 1 WLR 3141 at §§96-109. [48] (2014) 17 HKCFAR 319 at §17 (footnotes omitted). [49] Appearing for Yeung with Mr Gary Plowman SC and Mr Derek C L Chan. [50] A Solicitor (24/07) v Law Society of Hong Kong (2008) 11 HKCFAR 117 at §§18-20. [51] [2004] 1 WLR 3141 at §27. [52] Ord 90 of 1995, section 22. [53] At §5.12. [54] At §6.2. [55] Ord No 82 of 1994. [56] By way of example, an indictment laid under the DTROP equivalent of the old section 25 in R v Lo Chak Man CACC 744/1995, unreported 7 November 1996 read as follows: “[The defendant] between the 6th day of December, 1989 and the 19th day of December, 1989 in Hong Kong, was concerned in an arrangement whereby the retention or control of another namely LAW Kin-man’s proceeds of drug trafficking was facilitated, knowing or having reasonable grounds to believe that the said LAW Kin-man was a person who carried on or had carried on drug trafficking or had benefited from drug trafficking.” [57] Section C.3b abve. [58] Section C.3b above. [59] Section 8(1)(a). A “specified offence” was defined in section 2 as an offence within the long list of offences set out in Schedule 1 as well as the inchoate and accessorial forms of those offences. [60] Section 8(4). [61] Sections 8(6) and 8(7). [62] (2014) 17 HKCFAR 319, see §§17, 19, 40 and especially §69. [63] See Annex A, OSCO ss 2(6), 8(1), 8(3), 8(4) and 8(6). [64] (2012) 15 HKCFAR 362 at §§67-71. [65] Ibid at §§70-71. [66] Yeung’s printed case §6.4. [67] Basic Law Art 6: “The Hong Kong Special Administrative Region shall protect the right of private ownership of property in accordance with law.” [68] Basic Law Art 105: “The Hong Kong Special Administrative Region shall, in accordance with law, protect the right of individuals and legal persons to the acquisition, use, disposal and inheritance of property and their right to compensation for lawful deprivation of their property. ...” [69] Ibid at §6.5. [70] Discussed in Section C of this judgment. [71] Discussed further in Section C.6d below. [72] Legislative Council Brief on the DTROP Bill 1995 and the OSCO Bill 1995 (NCR 3/1/8 (G) VII) (“Legco Brief”) at §4(e). [73] Legco Brief §19. [74] Legco Brief §16. [75] Legco Paper No HB 1289/94-95 dated 23 August 1995, §3. [76] Ibid, at §14. [77] Ibid, at §19. [78] (2007) 10 HKCFAR 98. [79] [2004] 1 WLR 3141. [80] United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988. [81] Article 3.1(b) and (c). [82] Section C.3b above. [83] Sections C.3c and C.4 above. [84] The UK legislation distinguishes between offences involving the class of acts caught by sections 49(2) and 93C(2) and other, less obviously complicit, acts: CJA 1988 sections 93A (retaining benefits) and 93B (acquiring, possessing or using proceeds of criminal conduct) and similar offence in DTA 1994 sections 50 and 51. One consequence is that the disclosure defence or immunity does not apply to sections 49(2) and 93C(2) but applies to the lesser forms of the offence. See Section C.6d below. [85] [2006] QB 322 at §89. [86] [2007] 1 AC 18 at §35, although his Lordship held that that step could not be taken in that case. [87] (2007) 10 HKCFAR 98 at §105. [88] [2004] 1 WLR 3141 at §§ 39 and 41. [89] Ibid at §28. [90] Ibid. [91] In Section C.6b above. [92] CJA 1988 s 93C(2) involving offences of concealing or disguising the property; or converting or transferring or removing it from the jurisdiction; while, in contrast, a disclosure immunity is available in respect of offences under sections 93A (retaining benefits) and 93B (acquiring, possessing or using proceeds of criminal conduct). Similarly, there is no such defence in relation to DTA 1994 s 49(2) offences, but such a defence exists in respect of offences under sections 50 and 51. [93] OSCO section 2. [94] [1993] AC 951 at 964. [95] Imposing a reverse onus on the defendant to prove that he did not know or suspect that the arrangement related to any person's proceeds of drug trafficking, etc. [96] (2014) 17 HKCFAR 778 at §36. [97] Comprising officers from the Police and Customs and Exercise Service. See http://www.jfiu.gov.hk. [98] In Section C.6a. [99] Defining as “criminal property”, property which “constitutes a person's benefit from criminal conduct or ... represents such a benefit (in whole or part and whether directly or indirectly)”: section 340(3). [100] R v Montila & Ors [2004] 1 WLR 3141 at §21. [101] Ibid at §41. [102] See John Bell & George Engle, Cross, Statutory Interpretation (3rd Ed, Butterworths) pp 150-152; and D C Pearce & R S Geddes, Statutory Interpretation in Australia, (7th Ed, Lexis Nexis) §§3.33-3.34. [103] (2001) 4 HKCFAR 29. [104] (2014) 17 HKCFAR 778. [105] Power VP, Mayo and Stuart-Moore JJA [1999] 2 HKC 818 at 825, applying the old DTROP. [106] Ibid at 829. [107] As was pointed out in the Court of Appeal in Pang Hung Fai, CACC 34/2012 (31 May 2013) at §68; although Mayo JA did not in terms prescribe this as the order in which the questions were to be asked, this is how in practice his Lordship’s judgment was applied. [108] Stock VP, Lunn JA and McWalters J, CACC 34/2012 (31 May 2013). [109] Ibid at §107. [110] Ibid at §105. [111] Ibid at §110. [112] Ibid at §112. [113] Ibid at §104. [114] Ibid at §103. [115] Ibid at §130. [116] HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778. [117] With whom all the other members of the Court agreed. [118] At §30. [119] At §50. [120] (2012) 15 HKCFAR 146 at §29, where Chan PJ stated that the real question for the trial judge was “whether it was true or might be true that the appellant was prepared to and did take these risks in engaging such services.” (Emphasis supplied) [121] Pang Hung Fai at §§52-53 and 55. [122] Litton, Ching and Bokhary PJJ [1999] 2 HKC 833 at 836. [123] Pang Hung Fai at §82. [124] In Sections D.1 and D.3. [125] Pang Hung Fai at §§44-47 and §101. [126] Pang Hung Fai at §§83-85. [127] Pang Hung Fai, Court of Appeal at §§102-104. [128] Pang Hung Fai, Court of Appeal at §130. [129] Pang Hung Fai at §§59-77. [130] Pang Hung Fai at §77. [131] Set out in Section A.1 above. [132] See Section D.4. [133] Pang Hung Fai at §§59-77. [134] (2012) 15 HKCFAR 146. [135] Ibid at §24. [136] (2014) 17 HKCFAR 319. [137] Ibid at §83. [138] Pang Hung Fai at §§106-107. [139] (2012) 15 HKCFAR 146 at §§45 and 48. [140] See Section D.2 above. [141] The appellant was, however, deprived of his costs on the ground that he had brought suspicion on himself: HKSAR v Pang Hung Fai (No 2) (2015) 18 HKCFAR 1 at §§4 and 5. [142] Set out in Section A.1 above. [143] In Section D.4 above. [144] [1999] 2 HKC 833 at 836. [145] Pang Hung Fai §§55 and 56. [146] Citing Lord Scott of Foscote in White v White and Another [2001] 1 WLR 481 at 495C. [147] In Section D.4. [148] Pang Hung Fai at §§33, 46 and 77. [149] [1973] AC 584. [150] [1973] AC 584 at 592. [151] [1973] AC 584 at 593. [152] [1983] 2 AC 120 at 128. [153] (2001) 4 HKCFAR 123. [154] [1973] AC 584 at 607. [155] R v Sault Ste Marie [1978] 2 RCS 1299 at 1307. [156] United States v Margiotta, 646 F 2d 729, 733 (2d Cir 1981), cited in United States v Moloney 287 F 3d 236, 239 (2d Cir. 2002). See also Chim Hon Man v HKSAR (1999) 2 HKCFAR 145; Walsh v Tattersall (1996) 188 CLR 77; S v The Queen (1989) 168 CLR 266. [157] (2001) 165 JP 779. [158] (1999) 152 FLR 373. [159] (1994) 74 A Crim R 341. [160] See (1999) 152 FLR 373 at 380. [161] Practice Direction (Criminal Proceedings: Consolidation) as amended by Practice Direction (Criminal Proceedings: Further Directions) [2007] 1 WLR 1790 at 1799. [162] [2008] EWCA Crim 233. [163][2007] 1 Cr App R 10, 21 July 2006. [164] (1999) 2 HKCFAR 145. [165] (1989) 168 CLR 266. [166] (1999) 2 HKCFAR 145 at 161. [167] (1937) 59 CLR 467. [168] (1937) 59 CLR 467. [169] (1937) 59 CLR 467 at 482-483. [170] (1967) 116 CLR 220 at 224. [171] (1996) 188 CLR 77 at 86. [172][2009] 1 WLR 992 at 1001. [173][1914] 2 KB 99. [174]In Salim v HKSAR CACC 184/2013 at §§119-120 of the reasons explain how the point arose. In Yeung Ka Sing, Carson v HKSAR CACC 101/2014 the matter is referred to at §§30-33 of the reasons, and the point is made in §36 that the issue was raised by amendment in the Court of Appeal after the decision in Salim. [175] R v Marchese [2009] 1 WLR 992 at 1001. [176] CACC 184/2013 at §§147 and 149. [177] (2001) 165 JP 779 at 781. [178] J Ulph, Commercial Fraud: Civil Liability, Human Rights, and Money Laundering (2006) OUP at p 124. [179] See §25 above. [180] [2004] 1 WLR 3141 at 3144 to 3147. [181] Unreported, NWSCCA 60734, 60742 and 60743 of 1994 (19 February 1996), referred to and applied in R v Moussad [1999] NSWCCA 337. [182] (2005) 165 A Crim R 337. [183] 826 F Supp 1536 (W D Pa 1993). [184] 101 F Supp 2d 580 (E D Tenn 2000). [185] 73 F 3d 1067 (11th Cir 1996). [186] 287 F 3d 236 (2d Cir 2002). [187] 287 F 3d 236 (2d Cir 2002) at 241. [188] 646 F 2d 729 (2d Cir 1981). [189] 968 F 2d 1512 (2d Cir 1992). [190] 883 F 2d 1125 (2d Cir 1989). [191] 646 F 2d 729, 733 (2d Cir 1981). [192] §147 and fn 174. [193] CACC 184/2013. [194] CACC 101/2014 at §§58-65. [195] CACC 101/2014 at §58. [196] CACC 101/2014 at §58. [197] CACC 101/2014 at §60. [198] CACC 101/2014 at §65. [199] CACC 184/2013. [200] CACC 184/2013 at §116. [201] At §139. [202] At §147. [203] Appearing with Mr William Tam SC, DDPP.
Chief Justice Cheung: 1. I agree with the joint judgment of Mr Justice Ribeiro and Mr Justice Lam PJJ. Mr Justice Ribeiro and Mr Justice Lam PJJ: 2. In this appeal it falls to the Court to consider the scope of the doctrine of double jeopardy, both at common law and as reflected in Article 11(6) of the Bill of Rights (“BOR 11(6)”), in the context of penalties imposed on the appellant in disciplinary proceedings under the Prison Rules[1] and in a subsequent criminal prosecution arising out of the same incident. A. The facts 3. The appellant was being remanded in custody at the Lai Chi Kok Reception Centre[2] when he and another inmate (“Kwok”) assaulted a third prisoner (“Chung”) on 10 April 2017. The evidence was that Chung was taking a nap on a bench in an activity room of the Centre that morning when someone kicked the bench. Chung stood up and found Kwok and the appellant in front of him. Kwok suddenly punched Chung on the head, causing him to fall to the ground. This was followed by further assaults by Kwok and the appellant on Chung. The three of them engaged in a fight until a Correctional Services officer separated them. Chung was sent to hospital and his medical report recorded findings of injuries sustained by him on his face, cheek, forehead, forearm and knee. 4. The prison authorities decided to take disciplinary action against all three. At the same time, at Chung’s request, a report was made to the police. The police duly visited Chung at the prison on 19 April and a statement was taken from him on the next day. The police also received his medical report and obtained the CCTV footage regarding the incident. 5. In the meantime, disciplinary hearings took place before the Acting Superintendent of the prison. The three inmates were charged under Rule 61(x) of the Prison Rules which provides that every prisoner shall be guilty of an offence against prison discipline if he fights with any person. The three inmates pleaded guilty to the charge. In mitigation, Chung said he had fought back because the other two inmates had assaulted him. 6. In the exercise of his powers under Rules 62 and 63(1) of the Prison Rules, the Acting Superintendent ordered that the appellant be punished by the forfeiture of remission for 5 days, separate confinement for 21 days and forfeiture of privileges for 21 days. As regards Kwok, the Acting Superintendent ordered forfeiture of remission for 3 days, separate confinement for 14 days and forfeiture of privileges for 14 days. 7. Whilst the Acting Superintendent accepted that Chung had only fought back as he was being assaulted, prison discipline forbade the use of violence. He ordered against Chung forfeiture of remission for 1 day, separate confinement for 7 days and forfeiture of privileges for 7 days. 8. The police arrested Kwok for his involvement in the incident when he was in Stanley Prison on 14 August 2018. By then the appellant had been released. The police could not find him and he was put on police’s wanted list. They managed to locate the appellant on 22 March 2019 and he was then arrested. 9. The appellant and Kwok were charged with the offence of assault occasioning actual bodily harm and were brought before a magistrate. Kwok pleaded guilty to the charge. The appellant pleaded not guilty. 10. The trial took place on 14 August 2019 before the Magistrate, Ms Leung Siu-ling.[3] The appellant, represented by counsel,[4] applied to stay the proceedings on the ground of abuse of process, arguing that the criminal charge and the disciplinary proceedings for which the appellant had already been punished were based on the same or substantially the same facts so that the prosecution contravened the rule against double jeopardy. 11. The Magistrate refused to stay the prosecution essentially on the ground that the relevant double jeopardy doctrine only applied in respect of prior proceedings before a court of competent jurisdiction, which did not include the disciplinary proceedings conducted by the Acting Superintendent. In so holding she relied on the English Court of Appeal’s decision in R v Hogan,[5] rejecting counsel’s submission that that authority had been overruled by R v Robinson.[6] She also held that her conclusion was not affected by the Court of Appeal’s decision in Wong Tak Wai v Commissioner of Correctional Services.[7] Those are decisions to which we shall return. The stay having been refused, since the appellant did not dispute the facts, he was convicted as charged. 12. In passing sentence, the Magistrate took into account the forfeiture of remission that the appellant had been awarded in the disciplinary proceedings. She adopted 21 days’ imprisonment as the starting point and deducted 7 days on account of the forfeited remission and further deducted 4 days on account of the delay in prosecution and the impact on the appellant’s life arising from his having to be re-imprisoned. She accordingly sentenced the appellant to 10 days’ imprisonment. 13. On 11 March 2020, the appellant’s appeal against conviction based on the refusal of a stay was dismissed by Deputy High Court Judge Frankie Yiu[8] who largely upheld the Magistrate’s reasoning. However, the Judge allowed his appeal against sentence and suspended the 10-day imprisonment sentence for one year on the ground that there would be greater disruption to the appellant’s life because the criminal proceedings had not been dealt with when he was serving his earlier prison sentence. 14. The Judge refused to certify a point of law for appeal to this Court, but on 17 March 2021, the Appeal Committee[9] granted leave to appeal certifying the following question as being of the requisite importance: “Are disciplinary proceedings conducted under the Prison Rules (Cap. 234A), involving punishment by way of forfeiture of remission, ‘criminal proceedings’ by a body of competent jurisdiction such that the rule against double jeopardy applies?” B. Double jeopardy at common law B.1 Autrefois acquit and autrefois convict 15. It is well-established that the court has an inherent power to protect its process from being abused.[10] In its criminal jurisdiction, one such abuse which the court guards against is the repetition of charges against an individual after his or her acquittal or even after a conviction which was not followed by a punishment severe enough to satisfy the prosecutor. As Lord Pearce explained: “It was, no doubt, to meet those two abuses of criminal procedure that the court from its inherent power evolved the pleas of autrefois acquit and autrefois convict. For obvious convenience these were pleas in bar and, as such, fell to be decided before the evidence in the second case was known. They thus tended to look to form rather than to the substance that lay behind it. Where either of these pleas was made out, the defendant was entitled to an acquittal as of right, and no question of discretion or abuse or injustice could arise.”[11] 16. Thus, the focus of the autrefois pleas is on the elements which in law constitute the offences in question and not on the facts or conduct of the accused. Those pleas are only available “in the narrowly defined situation where the elements of the second offence are the same as or included in the original offence”.[12] The appellant rightly accepts that the autrefois doctrine does not avail him in the present case. B.2 Discretionary stay on grounds of double jeopardy 17. He does rely, however, on the second aspect of double jeopardy at common law which involves the discretionary power of the court, acting in its inherent jurisdiction, to stay proceedings which constitute an abuse of its process. As Bokhary PJ pointed out in Yeung Chun Pong v Secretary for Justice: “There is a discretionary power to stay a prosecution as an abuse of process where (i) a person faces a second trial arising from the same or substantially the same set of facts as gave rise to an earlier trial (whether in the same jurisdiction or in a competent court in another jurisdiction) and (ii) the prosecutor cannot advance any special or exceptional circumstances to justify the holding of a further trial.”[13] 18. Or as it was put in Ubamaka v Secretary for Security:[14] “... the Court has power to stay proceedings as an abuse of process if the subsequent charge involves an attempt to re-prosecute a person previously convicted or acquitted on the same or substantially the same facts.” 19. As the power to order a stay is discretionary, it is generally exercised where pursuit of the second set of proceedings would be vexatious, oppressive, unfair, for an improper or ulterior motive or otherwise similarly objectionable.[15] 20. The proposition advanced by the appellant in support of a common law discretionary stay in the present case is that the disciplinary proceedings against the appellant for “fighting” in breach of Prison Rule 61(x) for which he was convicted and punished, constituted the relevant earlier trial and that it was an abuse of process to prosecute him again for assault occasioning actual bodily harm at the second trial which arose from the same or substantially the same set of facts. B.3 Whether a discretionary stay is available 21. The question that immediately emerges is whether this aspect of the common law rule against double jeopardy – involving a discretionary stay for abuse of process – applies where the two sets of proceedings concerned involve a disciplinary hearing on the one hand and a prosecution in a criminal court on the other. 22. The courts have viewed disciplinary proceedings as different in significant respects from proceedings in the criminal courts, having different purposes and being concerned with a limited class of persons affected by the disciplinary rules, as opposed to the public at large who are subject to the general criminal law. 23. In the context of prison disciplinary proceedings, in R v Board of Visitors of Hull Prison, Ex parte St Germain,[16] Shaw LJ highlighted the nature and purpose of prison disciplinary offences as follows: “Such a [disciplinary] proceeding does not purport to deal with misconduct in its relation to the public law or the public interest albeit that the particular misconduct may have an impact on both. It is a proceeding designed and pursued with the limited objective of maintaining order within the confines of a prison, and it is in that narrow context that its character falls to be determined.” 24. The need for a special prison disciplinary regime and its differences from the law administered by the criminal courts were recognised in the European Court of Human Rights (“ECtHR”) in Campbell and Fell v United Kingdom,[17] where the Court stated: “The Court ... is well aware that in the prison context there are practical reasons and reasons of policy for establishing a special disciplinary regime, for example security considerations and the interests of public order, the need to deal with misconduct by inmates as expeditiously as possible, the availability of tailor-made sanctions which may not be at the disposal of the ordinary courts and the desire of the prison authorities to retain ultimate responsibility for discipline within their establishments.” 25. Since disciplinary offences usually apply only to limited classes of persons and are designed for specific, often institutional, objectives differing from the public purposes of generally applicable criminal offences, it is unsurprising that pursuing a combination of disciplinary and criminal proceedings will most usually not involve any abuse of process. The discretion to stay proceedings on double jeopardy grounds has generally only been exercised where the earlier proceedings, based on the same or substantially the same facts, were tried by a court of competent jurisdiction. The decisions of such courts have the attributes of res judicata. 26. Thus, in Connelly v DPP,[18] in summarising the governing principles and referring to situations not covered by the autrefois pleas in bar, Lord Morris of Borth-y-Gest stated: “In my view, both principle and authority establish: ... (8) that, apart from circumstances under which there may be a plea of autrefois acquit, a man may be able to show that a matter has been decided by a court competent to decide it, so that the principle of res judicata applies; (9) that, apart from cases where indictments are preferred and where pleas in bar may therefore be entered, the fundamental principle applies that a man is not to be prosecuted twice for the same crime.” 27. In the same case,[19] Lord Pearce cited Blackburn J who, in 1875,[20] stated in relation to the case before his Lordship: “The defence does not arise on a plea of autrefois convict, but on the well-established rule at common law, that where a person has been convicted and punished for an offence by a court of competent jurisdiction, transit in rem judicatam, that is, the conviction shall be a bar to all further proceedings for the same offence, and he shall not be punished again for the same matter; otherwise there might be two different punishments for the same offence.” 28. In R v Hogan,[21] the appellants had been subjected to disciplinary penalties for escaping from prison and were thereafter prosecuted on indictment for the offence of prison breach involving the same acts on their part. Their submission that the prison breach charge should not have been left to the jury was rejected on the basis that the double jeopardy principle “is meant to apply and can only apply to the decisions of courts of competent jurisdiction”. 29. In R v Statutory Committee of the Pharmaceutical Society of Great Britain, Ex parte Pharmaceutical Society of Great Britain,[22] Lord Lane CJ refused judicial review which had been sought to prevent disciplinary proceedings being brought by a professional society against pharmacists in respect of their conduct which had already led to their conviction for unlawful wounding. His Lordship stated: “... the maxim, in whatever form one chooses to relate it,[23] has no reference to tribunals such as this one at all. First of all, although the facts might be the same before the criminal court and before the tribunals, the offence and the findings are totally distinct. Secondly, it is plain on the authorities that a tribunal such as this is not a court of competent jurisdiction to which the maxim applies.” 30. Many similar statements can be found, inter alia, in English and Northern Irish authorities.[24] And in our jurisdiction, as we have seen, in Yeung Chun Pong v Secretary for Justice,[25]Bokhary PJ referred to the common law doctrine’s operation where “a person faces a second trial arising from the same or substantially the same set of facts as gave rise to an earlier trial (whether in the same jurisdiction or in a competent court in another jurisdiction)”. 31. It is accordingly clear that the appellant’s application to stay the criminal prosecution for the assault offence on the basis that he had previously been subjected to prison disciplinary proceedings was rightly rejected by the Courts below. It is true that the criminal proceedings were based on the same or substantially the same facts but the Acting Superintendent who conducted the disciplinary proceedings and awarded the penalties was plainly not a court of competent jurisdiction. B.4 R v Hogan and R v Robinson 32. Before leaving this aspect of the appeal, we should say something about R v Robinson.[26] The magistrate relied on R v Hogan,[27] in holding that discretionary double jeopardy stays are confined to cases involving a prior decision of a court of competent jurisdiction. As we have noted above, she was in good company in reaching that conclusion. However, Mr Derek Chan SC, appearing on the appellant’s behalf,[28] relies on what he accepts is an obiter dictum in Robinson for contending that in the light of a “substantial body of subsequent jurisprudence on the test for classifying a proceeding as criminal in nature”,[29] Hogan “no longer stands”.[30] 33. In our view, Robinson has little bearing on the issues in the present appeal and, with respect, we do not in any event think that the dictum relied on by the appellant is justified. 34. The appellant in Robinson was serving a 40 months’ sentence of imprisonment for burglary when he absconded from the prison. On being recaptured, he was dealt with for the escape as a disciplinary offence under the Prison Rules and received a sentence from the independent adjudicator (a District Judge who did not know that the matter had been reported to the police) of 14 days’ imprisonment consecutive to the sentence he was already serving. Some weeks later, the appellant appeared in the Crown Court on a charge of escape from lawful custody. On his guilty plea (no reference having been made to the disciplinary sentence), he was sentenced to three months’ imprisonment consecutive to his existing sentence. 35. When (as Haddon-Cave J, as his Lordship then was, puts it) “[the] unfairness visited upon the defendant by being sentenced twice for the same offence was fortunately picked up by an alert prison law consultant”[31], the appellant was granted leave to appeal out of time. In the Court of Appeal, it was “common ground that the adjudication and conviction [could not] both stand”.[32] 36. The parties’ respective counsel differed as to which of these – the disciplinary adjudication or the conviction – should be set aside. Counsel for the appellant submitted that the criminal prosecution should go because: “... the adjudication amounted to a criminal proceeding by a court of competent jurisdiction to which the rule against double jeopardy autrefois convict applies, and accordingly, the Crown Court was barred from further convicting and punishing the defendant for the same offence and the conviction should be quashed.”[33] Pausing here, if that approach were adopted, Robinson would give no support for the present appellant’s contention that Hogan can no longer stand in relation to the court of competent jurisdiction requirement. While one might debate the principle’s applicability to a District Judge sitting as an independent adjudicator under the Prison Rules, if it was properly classified as a decision by a court of competent jurisdiction, there would be no departure from the approach adopted in Hogan and the other cases cited above. 37. Counsel for the Crown submitted on the other hand that the adjudication rather than the criminal sentence should be quashed. He submitted that the independent adjudicator had proceeded in violation of the Prison Rules which provided that a prison adjudication should not be pursued if there were extant criminal proceedings for the same offence so that the adjudication was ultra vires and, he submitted, void ab initio. He argued that “[the] defendant was not therefore autrefois convict when he appeared in the Crown Court, and the proceedings there were not an abuse of process, and accordingly the conviction and sentence in the Crown Court should stand.”[34] 38. The Court adopted the latter approach and held the adjudication was void ab initio.[35] The Court reconstituted itself as the Administrative Court and gave relief by way of judicial review, quashing the adjudication and setting aside the penalty of 14 days’ imprisonment.[36] 39. The case was therefore resolved without resort to any double jeopardy doctrine and the view expressed obiter that Hogan somehow could not stand in the light of the Strasbourg and other decisions mentioned was quite unnecessary and, with great respect, as we shall endeavour to show,[37] unwarranted. C. BOR 11(6) C.1 Substantive versus procedural 40. The Hong Kong Bill of Rights Ordinance,[38] enacting the Hong Kong Bill of Rights, implements the International Covenant on Civil and Political Rights (“ICCPR”) as applied to Hong Kong in accordance with Article 39 of the Basic Law and is thereby given constitutional status. 41. Under the heading: “Rights of persons charged with or convicted of criminal offence” in Article 11 of the Bill of Rights, BOR 11(6) provides as follows: “(6) No one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of Hong Kong.” Its wording mirrors that of Article 14.7 of the ICCPR which it implements. 42. Also found under the Article 11 heading are the provisions of BOR 11(1) and 11(2)(a) to (g) which state as follows: “(1) Everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law. (2) In the determination of any criminal charge against him, everyone shall be entitled to the following minimum guarantees, in full equality— (a) to be informed promptly and in detail in a language which he understands of the nature and cause of the charge against him; (b) to have adequate time and facilities for the preparation of his defence and to communicate with counsel of his own choosing; (c) to be tried without undue delay; (d) to be tried in his presence, and to defend himself in person or through legal assistance of his own choosing; to be informed, if he does not have legal assistance, of this right; and to have legal assistance assigned to him, in any case where the interests of justice so require, and without payment by him in any such case if he does not have sufficient means to pay for it; (e) to examine, or have examined, the witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him; (f) to have the free assistance of an interpreter if he cannot understand or speak the language used in court; (g) not to be compelled to testify against himself or to confess guilt.” 43. BOR 11(1) and 11(2)(a) to (g) implement ICCPR 14.2 and 14.3(a) to (g) which are materially in the same terms. They lay down minimum guarantees of a procedural character to be adopted “[in] the determination of any criminal charge against” any person, consisting of the right to be presumed innocent; to be informed of the charge; to have the opportunity to prepare one’s defence; to be tried without undue delay; to be present and to have legal assistance at the trial; to question and have access to witnesses; to have an interpreter if needed; and not to be compelled to testify against oneself or to confess guilt. 44. Those rights or privileges flesh out some of the procedural aspects of the guarantee of a fair hearing laid down by BOR 10 (reflecting ICCPR 14.1) which relevantly states: “In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law.” 45. It is centrally important to note that the nature and purpose of, and protection afforded by, BOR 11(6) are qualitatively different from those of BOR 11(1) and 11(2). BOR 11(6) is substantive and not procedural. It is not concerned with prescribing fair procedures designed to achieve a fair hearing. It lays down a substantive rule that bars the trial or punishment of any person for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of Hong Kong. It thus prohibits any impugned hearing from taking place at all. 46. The essential difference between the aforesaid substantive and procedural provisions[39] is recognised in General Comment No 32 on ICCPR 14 (“GC 32”)[40] which materially states as follows: “Article 14 is of a particularly complex nature, combining various guarantees with different scopes of application. ... Paragraphs 2 - 5 of the article contain procedural guarantees available to persons charged with a criminal offence. ... Paragraph 7 prohibits double jeopardy and thus guarantees a substantive freedom, namely the right to remain free from being tried or punished again for an offence for which an individual has already been finally convicted or acquitted.”[41] C.2 When BOR 11 guarantees are engaged and the consequences 47. The aforesaid distinction must be kept in mind because the wording of BOR 11(6) as well as BOR 10 and BOR 11(1) and 11(2) superficially appear to make engagement of the respective rights or privileges in question uniformly dependent on the existence of “criminal charges” or “criminal offences”, ie, dependent on the case being classified as “criminal”. Thus, BOR 10 and BOR 11(2) apply “[in] the determination of any criminal charge against” the person concerned; BOR 11(1) applies to “[everyone] charged with a criminal offence” and BOR 11(6) applies where the relevant person is potentially to be “tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of Hong Kong”, clearly referring to consecutive trials or punishments for criminal offences. 48. One might therefore be led to conclude that the requirements for triggering the operation of both sets of rights and privileges are the same and that “criminal” in both contexts should be given the same meaning. However, such an approach fails to distinguish between the very different consequences flowing from a decision resulting in the activation of the procedural safeguards as opposed to one holding that a proposed trial or punishment is barred on double jeopardy principles. This is especially important when, based on the jurisprudence of the ECtHR on the European Convention of Human Rights (“ECHR”), an approach giving the concept of “criminal” a wide “autonomous” meaning has become well-established with a view to triggering the procedural safeguards. It is by no means necessarily appropriate for the meaning of “criminal” in the double jeopardy context to be similarly widened, given the substantively different consequences referred to above. We turn now to trace the development of those authorities. C.3 The Engel criteria developed by the ECtHR 49. The ECHR stipulates fair hearing safeguards in terms similar to, but less extensive than, those contained in the ICCPR and BOR provisions referred to in Section C.1 of this judgment. Its Article 6 (“ECHR Art 6”) provides as follows: 1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. (Cf BOR 10, ICCPR 14.1) 2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. (Cf BOR 11(1), ICCPR 14.2) 3. Everyone charged with a criminal offence has the following minimum rights: (Cf BOR 11(2), ICCPR 14.3) (a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him; (Cf BOR 11(2)(a), ICCPR 14.3(a)) (b) to have adequate time and facilities for the preparation of his defence; (Cf BOR 11(2)(b), ICCPR 14.3(b)) (c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require; (Cf BOR 11(2)(d), ICCPR 14.3(d)) (d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him; (Cf BOR 11(2)(e), ICCPR 14.3(e)) (e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court.” (Cf BOR 11(2)(f), ICCPR 14.3(f)) 50. It should be noted that the ECHR, as adopted in 1950, does not contain any equivalent to BOR 11(6) and does not provide for protection against double jeopardy.[42] It was not until almost forty years later, when the Seventh Protocol to the Convention entered into force in 1988, that such a measure was brought into existence for those States which ratified the Protocol. Article 4(1) of Protocol 7 (“Art 4(1) P7”) states as follows: “No one shall be liable to be tried or punished again in criminal proceedings under the jurisdiction of the same State for an offence for which he has already been finally acquitted or convicted in accordance with the law and penal procedure of that State.” 51. It is important to register that the judgment whereby the ECtHR established a widened “autonomous meaning” for the concept of “criminal” was published in 1976 and was concerned solely with the ECHR’s fair hearing guarantees, well before any protection against double jeopardy found its way into the Convention’s scheme. That decision is Engel v The Netherlands (No 1),[43] which involved military disciplinary proceedings in which penalties were imposed on conscript soldiers serving in the Netherlands armed forces. Under Netherlands law, such proceedings were designated as disciplinary and not criminal but the applicants argued that those proceedings and the potential penalties were such as to merit their being treated as criminal so as to engage the fair hearing guarantees in ECHR Art 6. 52. Their argument succeeded. The ECtHR propounded three criteria for determining “whether a given ‘charge’ vested by a State … with a disciplinary character nonetheless counts as ‘criminal’ within the meaning of Article 6”.[44] First, the Court would consider how the State domestically classified the offence charged. This was, however, just a starting-point which had to be “examined in the light of the common denominator of the respective legislation of the various Contracting States.”[45] Secondly, it would consider “[the] very nature of the offence” which “is a factor of greater import”. Thirdly, and frequently most crucially, the ECtHR would “take into consideration the degree of severity of the penalty that the person concerned risks incurring.”[46] The Court emphasised the importance of this third criterion stating: “In a society subscribing to the rule of law, there belong to the ‘criminal’ sphere deprivations of liberty liable to be imposed as a punishment, except those which by their nature, duration or manner of execution cannot be appreciably detrimental. The seriousness of what is at stake, the traditions of the Contracting States and the importance attached by the Convention to respect for the physical liberty of the person all require that this should be so ...”[47] 53. In Engel, that third criterion was decisive. The penalties which could be imposed in the disciplinary proceedings included committing the applicants to a disciplinary unit where, during a month or more, they were not entitled to leave the establishment and spent the night locked in a cell.[48] The Court held that the charges “did indeed come within the ‘criminal’ sphere since their aim was the imposition of serious punishments involving deprivation of liberty ...”[49] It noted that one of the applicants had not suffered such a penalty but held that this did not affect the autonomous classification as “criminal” since “the final outcome of the appeal cannot diminish the importance of what was initially at stake.”[50] The Court was therefore emphasising “what was at stake”, meaning the severity of the potential penalties which the disciplinary tribunal might impose, as the most important factor in deciding whether the fair hearing guarantees should be applied to its proceedings. 54. While the ECtHR’s focus in Engel was on disciplinary proceedings, the three criteria have been applied to charges and penalties in many other areas, progressively widening the concept of “criminal” for the purpose of engaging the fair hearing guarantees. As the Court noted in Jussila v Finland:[51] “... the autonomous interpretation adopted by the Convention institutions of the notion of a ‘criminal charge’ by applying the Engel criteria have underpinned a gradual broadening of the criminal head to cases not strictly belonging to the traditional categories of the criminal law, for example administrative penalties, (Öztürk v Germany, 21 February 1984, §54, Series A no. 73), prison disciplinary proceedings (Campbell and Fell v the United Kingdom, 28 June 1984, Series A no. 80), customs law (Salabiaku v France, 7 October 1988, Series A no. 141-A), competition law (Société Stenuit v France, 27 February 1992, Series A no. 232-A), and penalties imposed by a court with jurisdiction in financial matters (Guisset v France, no. 33933/96, ECHR 2000-IX).” 55. The two ECtHR judgments relied on by the appellant in support of his argument that the Engel criteria should apply to prison disciplinary proceedings in the present context, namely, Campbell and Fell v United Kingdom,[52] and Ezeh and Connors v United Kingdom,[53]are both cases where the issue was whether certain fair hearing guarantees under ECHR Art 6 were engaged. They were not concerned with double jeopardy. 56. Thus, in Campbell and Fell, the applicants were charged with disciplinary offences including mutiny, incitement to mutiny and doing gross personal violence to an officer. The Engel criteria were applied to decide whether those disciplinary charges constituted “criminal charges” for the purposes of ECHR Art 6. The Court gave an affirmative answer, the severity of the potential penalties and those actually imposed proving decisive. Referring to the applicant Campbell, the Court stated: “The maximum penalties which could have been imposed on him included forfeiture of all of the remission of sentence available to him at the time of the Board’s award (slightly less than three years), forfeiture of certain privileges for an unlimited time and, for each offence, exclusion from associated work, stoppage of earnings and cellular confinement for a maximum of 56 days; he was in fact awarded a total of 570 days’ loss of remission and subjected to the other penalties mentioned for a total of 91 days.”[54] 57. There was some debate as to whether forfeiture of remission constituted a fresh deprivation of liberty but, given the seriousness of the potential penalties at stake, the Court thought the argument somewhat technical and did not accord it much weight: “By causing detention to continue for substantially longer than would otherwise have been the case, the sanction came close to, even if it did not technically constitute, deprivation of liberty and the object and purpose of the Convention require that the imposition of a measure of such gravity should be accompanied by the guarantees of Article 6 .”[55] 58. Campbell and Fell was therefore purely about the ECHR Art 6 fair hearing guarantees. As it was decided in 1984, before Art 4(1) P7 came into force, it was obviously not about double jeopardy in the ECHR context. 59. In Ezeh and Connors v United Kingdom,[56] the applicant prisoners claimed that their ECHR Art 6(3)(c) rights had been violated by them being denied legal representation in disciplinary proceedings before the prison governor regarding offences involving use of threatening language and assault committed while in custody. Art 4(1) P7 was not in issue since the United Kingdom had not (and still has not) signed or ratified Protocol Seven.[57] 60. In applying the Engel criteria, especially on the question of penalty, the Grand Chamber noted that the former system involving a discretionary loss of remission had been replaced and examined the non-discretionary regime which then governed the release of prisoners on licence after completion of the relevant part of their sentence. Under the new regime, the prisoner was entitled to be released subject to any award in disciplinary proceedings of “additional days” prolonging the detention.[58] The Court found the violation established, emphasising the importance of the fair hearing guarantees under ECHR Art 6 in the context: “While the Court in its Campbell and Fell judgment therefore recognised the special nature of the prison environment which distinguished prisons from the military context examined in the Engel case, it went on to emphasise the fundamental nature of the fair hearing guarantees of Art 6 and that there was, in appropriate cases, no warrant for depriving prisoners of the safeguards of that Article.” It added that it would apply Engel: “... in a manner consistent with the object and purpose of Art 6 of the Convention, while making ‘due allowance’ for the prison context and for the ‘practical reasons and reasons of policy’ in favour of establishing a special prison disciplinary regime.”[59] Ezeh and Connors was thus also a case concerned solely with ECHR Art 6 procedural safeguards and not double jeopardy. C.4 Operation of the fair hearing guarantees in Hong Kong 61. In Hong Kong, the Engel criteria have been adopted in determining whether a charge is “criminal” for the purposes of deciding whether the fair hearing guarantees under the BOR are engaged. Those criteria are regarded as appropriate since they are designed to ensure that where a great deal is at stake for the person implicated in the proceedings (where he or she is at risk of severe penalties), fair hearing guarantees will be applied. However, to date, the Engel criteria have never been adopted as the basis for engaging BOR 11(6) in relation to double jeopardy. 62. The leading case in this context is the Court’s decision in Koon Wing Yee v Insider Dealing Tribunal,[60] which was concerned with an inquiry by the Insider Dealing Tribunal conducted under the Securities (Insider Dealing) Ordinance. At issue was whether the BOR fair trial guarantees applied to the Tribunal’s proceedings and if so, whether use by the Tribunal of incriminating answers compulsorily given to incriminating questions and its application of the civil standard of proof complied with BOR 10, BOR 11(1) and BOR 11(2)(g). 63. Sir Anthony Mason NPJ, with whom the other members of the Court agreed, applied the Engel criteria, holding that the domestic classification of the proceedings was civil;[61] that the nature of the insider dealing offence involved very serious misconduct so that very serious injury to reputation might flow from an adverse finding;[62] and that the potential penalty of up to treble the amount of the benefit generated by the insider dealing was punitive and deterrent and akin to a fine.[63] The penalty criterion was crucial, leading his Lordship to conclude that “the proceedings involved the determination of a criminal charge by reason of the power to impose a penalty under s 23(1)(c) of [the Ordinance].”[64] On the basis of that conclusion, the applicable standard of proof was held to be the criminal standard.[65] However, in order to fashion a remedy which best conformed with the legislative intention, the Court adopted a remedial interpretation of the Ordinance and excised section 23(1)(c) which had provided for the penalty resulting in the proceedings being classified as “criminal”. The Court thereby re-classified the proceedings, taking them outside the Engel criteria, and thus preserved the findings of the Tribunal and its orders for disqualification.[66] 64. Koon Wing Yee was therefore also concerned purely with the procedural and evidential aspects of a fair hearing. It did not touch on double jeopardy. Similarly, in Wong Tak Wai v Commissioner of Correctional Services,[67] the Court of Appeal applied the Engel criteria in addressing the proper standard of proof to be applied to prison disciplinary proceedings and was obviously also concerned with fair hearing guarantees. Double jeopardy was not in issue. 65. Double jeopardy and BOR 11(6) were issues raised in argument in Ubamaka v Secretary for Security.[68] That was a case involving a Nigerian national who had been convicted of drug trafficking and was being released on remission after serving two-thirds of his sentence of 24 years’ imprisonment in Hong Kong. He was due to be deported back to Nigeria but sought to resist the deportation order on the footing that if returned to that country, he would face further punishment for his drug trafficking offence under a Nigerian statute.[69] That, he contended, would be double jeopardy prohibited by BOR 11(6) and which would, moreover, constitute cruel, inhuman or degrading treatment or punishment (“CIDTP”) absolutely barred by BOR 3. 66. In the event, the Court did not deal with the scope of BOR 11(6), leaving that question open,[70] since it held that the appellant’s situation did not raise BOR 3 CIDTP issues so that reliance on BOR 11(6) was excluded by the immigration reservation contained in section 11 of the Hong Kong Bill of Rights Ordinance.[71] Furthermore, it was unnecessary to deal with BOR 11(6) since it was held to apply only within the territorial limits of the HKSAR.[72] Ubamaka therefore throws no light on the issues presently under discussion. It certainly gives no support to the application of the Engel criteria for determining whether BOR 11(6) is engaged. C.5 Application of the Engel criteria to Art 4(1) P7 67. A turning point in the ECtHR’s jurisprudence was its decision in Zolotukhin v Russia,[73] when the Engel criteria were applied to determine whether proceedings were “criminal proceedings” for the purposes of Art 4(1) P7. 68. In Zolotukhin, the Gribanovskiy District Court convicted the applicant of administrative offences involving swearing at police officers and not responding to rebukes, constituting “minor disorderly acts” contrary to Art 158 of the Code of Administrative Offences (“Administrative Code”). It sentenced him to three days’ administrative detention. Some two weeks later, he was prosecuted for having committed three different offences under the Criminal Code of the Russian Federation (“Criminal Code”) (Art 213 §2(b) for disorderly acts, including resisting a public official dealing with a breach of public order; Art 319 for intentionally and publicly insulting a public official in the course of his official duties; and Art 318 §1 for threatening to use violence against a public official in connection with the latter’s performance of his official duties). 69. The applicant complained under Art 4(1) P7 that after he had already served three days’ detention for disorderly acts committed in violation of Art 158, he had been tried again for the same offence. The question therefore arose as to whether such conviction and detention, which were domestically classified as “administrative” rather than “criminal”, should be classified as “criminal” so that the applicant can be said to have been “finally acquitted or convicted in accordance with the law and penal procedure of that State” within the meaning of Art 4(1) P7. 70. The Court adopted the Engel criteria to determine that question. While it noted that the domestic classification of “minor disorderly acts” was “administrative”, it went on to hold that the provisions of the Administrative Code were directed “towards all citizens rather than towards a group possessing a special status”; that the “minor” nature of the acts did not exclude classification as “criminal”; that “the primary aims in establishing the offence in question were punishment and deterrence, which are recognised as characteristic features of criminal penalties”; and that the maximum sentence of 15 days’ imprisonment involved the loss of liberty, giving rise to a presumption that the charges were “criminal”, a presumption “which can be rebutted entirely exceptionally, and only if the deprivation of liberty cannot be considered ‘appreciably detrimental’ given their nature, duration or manner of execution”.[74] 71. Taking those factors together, it concluded that “the nature of the offence of ‘minor disorderly acts’, together with the severity of the penalty, were such as to bring the applicant’s conviction on 4 January 2002 within the ambit of ‘penal procedure’ for the purposes of [Art 4(1) P7].”[75] Applied to the facts, the Court found that the proceedings instituted under Art 213 §2(b) of the Criminal Code concerned essentially the same offence as that of which he had already been convicted under Art 158 of the Administrative Code so that those proceedings were a violation of Art 4(1) P7 and could not be pursued. The other two further charges involved no duplication and no such violation. C.6 The reaction to Zolotukhin 72. It seems clear that the prospect of the Engel criteria being applied to trigger the substantive consequences of double jeopardy under Art 4(1) P7 – as later materialised in the Zolotukhin decision – had been a cause for concern amongst certain State Parties to the ECHR. Such concern is evident from their non-ratification of, and reservations expressed regarding, Art 4(1) P7. Thus, as the Court later pointed out: “It should not be overlooked in this context that the right not to be tried or punished twice was not included in the Convention adopted in 1950 but was added in a seventh protocol (adopted in 1984), which entered into force in 1988, almost 40 years later. Four States (Germany, the Netherlands, Turkey and the United Kingdom) have not ratified the Protocol; and one of these (Germany) plus four States which did ratify (Austria, France, Italy and Portugal) have expressed reservations or interpretative declarations to the effect that ‘criminal’ ought to be applied to these States in the way it was understood under their respective national laws.”[76] 73. The reservations or interpretative declarations are telling. The States in question were making it clear that they did not want the enlarged, Engel meaning to be given to “criminal” for the purposes of Art 4(1) P7 and so declared that their domestic classification of offences designated as “criminal” should be retained. Those were all States that had accepted adoption of the Engel criteria for the purposes of engaging the fair hearing procedural guarantees, but they were not prepared to permit such criteria to be applied to trigger substantive double jeopardy restrictions. 74. After the Zolotukhin decision, the prospect of having a minor disciplinary or administrative offence deemed “criminal” by applying the Engel criteria resulting, without more, in the barring, under Art 4(1) P7, of subsequent prosecutions for potentially serious offences was evidently disconcerting. 75. Resistance to the Zolotukhin approach manifested itself when the issue came before the Grand Chamber in A and B v Norway,[77] a case in which the applicants had failed to declare transactions resulting in unpaid taxes totalling about €3.6 million. They paid a tax penalty of 30% and then were indicted and each sentenced to prison for one year for aggravated tax fraud. They complained of a violation of Art 4(1) P7 contending that they had been prosecuted and punished twice in respect of the same offence. The Norwegian Government resisted the application of the Engel criteria to determine whether the tax penalty was “criminal”. 76. Comments were received from Intervening Third Parties, namely, the Governments of Bulgaria, the Czech Republic, Greece, France, the Republic of Moldova and Switzerland, aligning themselves with the Norwegian Government.[78] Cogent arguments were advanced against applying the broadened Engel meaning of “criminal” to Art 4(1) P7, emphasising the differences in that provision’s wording, purposes and substantive operation as compared with the procedural requirements of ECHR Art 6. 77. Thus, the Government of Norway; “... invited the Grand Chamber to confirm the approach taken in a series of cases predating the Zolotukhin judgment, namely that a wider range of factors than the Engel criteria (formulated with reference to Article 6) were relevant for the assessment of whether a sanction was ‘criminal’ for the purposes of [Art 4(1) P7]. They contended that regard ought to be had to such factors as the legal classification of the offence under national law; the nature of the offence; the national legal characterisation of the sanction; its purpose, nature and degree of severity; whether the sanction was imposed following conviction for a criminal offence; and the procedures involved in the adoption and implementation of the sanction ...”[79] 78. It submitted: “... that the different wording and object of the provisions clearly suggested that the notion of ‘criminal proceedings’ under [Art 4(1) P7] was narrower than the use of ‘criminal’ under Article 6. It transpired from the Explanatory Report in respect of Protocol No 7 that the wording of Article 4 had been intended for criminal proceedings stricto sensu. ... In paragraph 32 it was stressed that [Art 4(1) P7] did not prohibit proceedings ‘of a different character (for example, disciplinary action in the case of an official)’. Moreover, Article 6 and [Art 4(1) P7] safeguarded different, and at times opposite, aims. Article 6 was aimed at promoting procedural safeguards in criminal proceedings.”[80] 79. The Court recorded some of the arguments advanced by the Third Party Interveners against adopting the Engel criteria, including the following: (a) “The Bulgarian Government, referring to the wording of the provision and its purpose, maintained that only traditional criminal offences fell within the ambit of [Art 4(1) P7]. Whilst extending the scope of Article 6 was paramount for the protection of the right to a fair trial, the purpose of the provision in the Protocol was different.”[81] (b) “The French Government ... argued that the terms used in [Art 4(1) P7], which differed from those in Article 6(1) of the Convention, must result in the adoption of narrower criteria serving the principle of ne bis in idem protected by [Art 4(1) P7] ... This was borne out by the fact that no derogation from [Art 4(1) P7] was allowed under Article 15, whereas that Article did provide for derogation from Article 6. ... [The] Court should, in applying [Art 4(1) P7], ... assign to the words ‘in criminal proceedings’, ... the strict meaning that was called for.”[82] 80. The Grand Chamber acknowledged the cogency of these arguments: “A number of arguments going in the direction of such an interpretive approach do exist, in particular that [Art 4(1) P7] was apparently intended by its drafters for criminal proceedings in the strict sense and that – unlike Article 6, but like Article 7 – it is a non-derogable right under Article 15. Whilst Article 6 is limited to embodying fair-hearing guarantees for criminal proceedings, the prohibition of double jeopardy in [Art 4(1) P7] has certain implications – potentially wide ones – for the manner of applying domestic law on criminal and administrative penalties across a vast range of activities. The latter Article involves a more detailed assessment of the substantive criminal law, in that there is a need to establish whether the respective offences concerned the same conduct (idem). These differences, the lack of consensus among the domestic systems of the Contracting States and the variable willingness of States to be bound by the Protocol and the wide margin of appreciation to be enjoyed by the States in deciding on their penal systems and policies generally ... are well capable of justifying a broader range of applicability criteria, in particular with a stronger national‑law component, as used for Article 7 and previously used [before Zolotukhin], for [Art 4(1) P7], and hence a narrower scope of application, than is the case under Article 6.”[83] 81. Nevertheless, the Court found “it more appropriate, for the consistency of interpretation of the Convention taken as a whole, for the applicability of the principle to be governed by the same, more precise criteria as in Engel.”[84] It therefore did not depart from Zolotukhin’s application of the broadened criteria to for determining what was “criminal” in cases where Art 4(1) P7 was invoked. However, the Court did not let the position rest there. It hastened to add: “That said, ... once the ne bis in idem principle has been found to be applicable, there is an evident need for a calibrated approach in regard to the manner in which the principle is applied to proceedings combining administrative and criminal penalties.”[85] 82. In ECHR Art 6 cases, once a matter is classified, applying the Engel criteria, as a “criminal offence”, it automatically follows that the fair hearing guarantees apply. But under the “calibrated approach” to Art 4(1) P7 developed in A and B v Norway, the prohibition against double jeopardy in respect of dual proceedings does not automatically follow. The Court pointed out that “the Zolotukhin judgment offered little guidance for situations where the proceedings have not in reality been duplicated but have rather been combined in an integrated manner so as to form a coherent whole.”[86] 83. Referring to earlier case-law, the Court noted that: “... the imposition by different authorities of different sanctions concerning the same conduct was accepted by the Court as being to some extent permissible under [Art 4(1) P7], notwithstanding the existence of a final decision. This conclusion can be understood as having been based on the premise that the combination of sanctions in those cases ought to be considered as a whole, making it artificial to view the matter as one of duplication of proceedings leading the applicant to being ‘tried or punished again .... for an offence for which he has already been finally ... convicted’ in breach of [Art 4(1) P7].”[87] 84. This “combined integrated” approach was illustrated by reference to cases where the sanction of withdrawal of a driving licence was combined with criminal penalties such as a suspended sentence, a fine or community service;[88] and where tax penalties levied administratively were coupled with sentences for tax fraud.[89] The Court observed that: “... States should be able legitimately to choose complementary legal responses to socially offensive conduct (such as non-compliance with road-traffic regulations or non-payment/evasion of taxes) through different procedures forming a coherent whole so as to address different aspects of the social problem involved, provided that the accumulated legal responses do not represent an excessive burden for the individual concerned.”[90] It added: “It cannot be the effect of [Art 4(1) P7] that the Contracting States are prohibited from organising their legal systems so as to provide for the imposition of a standard administrative penalty on wrongfully unpaid tax (albeit a penalty qualifying as ‘criminal’ for the purposes of the Convention’s fair-trial guarantees) also in those more serious cases where it may be appropriate to prosecute the offender for an additional element present in the non-payment, such as fraudulent conduct, which is not addressed in the ‘administrative’ tax‑recovery procedure. The object of [Art 4(1) P7] is to prevent the injustice of a person’s being prosecuted or punished twice for the same criminalised conduct. It does not, however, outlaw legal systems which take an ‘integrated’ approach to the social wrongdoing in question, and in particular an approach involving parallel stages of legal response to the wrongdoing by different authorities and for different purposes.”[91] 85. The Grand Chamber summarised the principle as follows: “... [Art 4(1) P7] does not exclude the conduct of dual proceedings, even to their term, provided that certain conditions are fulfilled. In particular, for the Court to be satisfied that there is no duplication of trial or punishment (bis) as proscribed by [Art 4(1) P7], the respondent State must demonstrate convincingly that the dual proceedings in question have been ‘sufficiently closely connected in substance and in time’. In other words, it must be shown that they have been combined in an integrated manner so as to form a coherent whole. This implies not only that the purposes pursued and the means used to achieve them should in essence be complementary and linked in time, but also that the possible consequences of organising the legal treatment of the conduct concerned in such a manner should be proportionate and foreseeable for the persons affected.”[92] C.7 Whether the Engel criteria are applicable to BOR 11(6) 86. The Strasbourg Court felt constrained to seek consistency with the Grand Chamber’s earlier decision in Zolotukhin by applying the Engel criteria to trigger the double jeopardy provisions of Art 4(1) P7. But it qualified the effect of so doing by developing principles permitting there to be dual sanctions imposed by different authorities where they operate as a response to the impugned conduct of the accused as an integrated whole. 87. This Court is under no such constraint and we see no justification for applying the Engel criteria to BOR 11(6) nor for consequently adopting the corrective “integrated whole” doctrine developed in A and B v Norway. 88. As we have noted, under Hong Kong law, it has been held that it is appropriate for the Engel criteria to be applied for the purposes of determining whether the procedural fair hearing guarantees under BOR 11(1) and 11(2)(a) to (g) are engaged. The emphasis of those criteria on the seriousness of what is at stake for the implicated person justifies the triggering of the procedural guarantees in proceedings which come within the autonomous meaning but which may not strictly be “criminal”. However, the cogent arguments examined above lead us to conclude that those expanded criteria should not be applied to BOR 11(6). 89. As we have been at pains to point out, and as was forcefully argued by the Norwegian Government and the Third Party Interveners in A and B v Norway (and indeed acknowledged by the ECtHR),the nature and purpose of Art 4(1) P7 (the BOR 11(6) equivalent), are qualitatively different from those of ECHR Art 6 (its counterparts being BOR 11(1) and 11(2)). BOR 11(6) lays down a substantive rule while the latter provisions prescribe procedural safeguards, an important distinction recognised by the UNHRC in GC 32 as noted above.[93] And as we have seen, the legitimacy of differentiating between the conditions for triggering the procedural guarantees on the one hand and the prohibition against double jeopardy on the other has been variously endorsed and reflected in the relevant State Parties’ non-ratification of and reservations to Art 4(1) P7. 90. Directly relevant is GC 32 on ICCPR 14.7 which relevantly states: “This provision prohibits bringing a person, once convicted or acquitted of a certain offence, either before the same court again or before another tribunal again for the same offence ...”[94] It goes on to make the unequivocal statement that: “This guarantee applies to criminal offences only and not to disciplinary measures that do not amount to a sanction for a criminal offence within the meaning of article 14 of the Covenant.”[95] 91. GC 32 was issued in 2007 so that the UNHRC was then undoubtedly aware of the existence of a broadened “autonomous meaning” of “criminal” based on Engel applied in the Strasbourg context. It plainly did not envisage that the disciplinary proceedings referred to in GC 32 at §57 should be classified as “criminal” on the basis of some extended meaning capable of triggering ICCPR 14.7 (and thus BOR 11(6)). 92. The double jeopardy rule safeguards finality in criminal proceedings. It protects a person from being punished twice and from being vexed by the ordeal of undergoing a second trial, whether the first set of proceedings resulted in acquittal or conviction. Non-criminal proceedings serving other legitimate societal objectives or functions do not come within the rule and are not prohibited. As highlighted at §§23 and 24 above, prison disciplinary proceedings serve significantly different functions and purposes. 93. It is important to keep the rationale for the rule against double jeopardy in mind when deciding whether a second set of proceedings violates the rule. The Engel criteria, even in their calibrated form as discussed in Norway, do not sufficiently focus on the societal purposes served by different sets of proceedings. Whilst it is appropriate to continue to apply the Engel criteria to decide whether the procedural safeguards under BOR 11(1) and (2) are engaged, they should not be adopted for determining whether BOR 11(6) should be applied. C.8 The scope of BOR 11(6) 94. Having rejected the application of the Engel approach, what are the appropriate criteria for determining when BOR 11(6) is engaged? The answer depends on the true interpretation of its provisions. As we have seen, it provides as follows: “No one shall be liable to be tried or punished again for an offence for which he has already been finally convicted or acquitted in accordance with the law and penal procedure of Hong Kong.” 95. It clearly denotes consecutive criminal proceedings involving the same offence. Thus, it deals with the happening “again” of the occurrence of someone having been “tried or punished” for an “offence” for which he or she has already been “finally convicted or acquitted” in accordance with “the law and penal procedure of Hong Kong”, the words in quotation marks appropriately being understood to refer to criminal proceedings in the strict sense. While some of those terms may be used in relation to disciplinary proceedings, taken together in context they clearly refer, in our view, to criminal proceedings strictly so called. 96. Thus, “tried” bears the connotation of a formal trial process leading to conviction or acquittal within a framework of procedural and evidential rules which would not be similarly envisaged in disciplinary hearings. While every criminal violation is routinely referred to as an “offence” for which the offender is “punished”, not every disciplinary measure could appositely be so described. The notion of a “final” conviction or acquittal is consonant with concepts of judicial finality and res judicata whereas, disciplinary measures, even after exhaustion of a disciplinary appeal process, are generally not “final” but are subject to possible judicial review and further judicial proceedings. One would not aptly describe convictions or acquittals in disciplinary proceedings as being “in accordance with the law and penal procedure of Hong Kong” since that phrase connotes criminal law and penal procedure generally applicable to everyone in Hong Kong and not a set of disciplinary rules applicable only to the limited class of persons concerned. 97. It follows that on its true interpretation, BOR 11(6) only applies where a person has “already been finally convicted or acquitted in accordance with the law and penal procedure of Hong Kong” of a criminal offence in the strict sense by a court exercising criminal jurisdiction. BOR 11(6) prohibits that person from being tried or punished again for a like offence. 98. An issue that arises concerns the required degree of overlap between the two criminal offences in question. When BOR 11(6) prohibits trial and punishment “again for an offence for which he has already been finally convicted or acquitted”, to what extent must the offence which is the subject-matter of the second trial or punishment be the same as the offence previously dealt with? 99. In our view, BOR 11(6) plainly covers cases which would come within the autrefois acquit and autrefois convict rules, in other words, where the elements of the second offence are the same as or included in the original offence.[96] It is also our view that it applies in cases which would qualify for exercise of the common law discretion to stay proceedings which constitute an abuse of the court’s process where the subsequent charge involves re‑prosecuting a person previously convicted or acquitted on the same or substantially the same facts.[97] 100. BOR 11(6) therefore largely reflects the position at common law. However, whereas at common law, the stay in cases involving the same or substantially the same facts is discretionary, where the BOR 11(6) is engaged, the prohibition against repeating the trial or punishment is not a matter of discretion. D. Conclusions 101. We summarise our conclusions as follows: (a) There is no basis at common law for a discretionary stay of proceedings on double jeopardy grounds to be granted in the present case. Disciplinary proceedings are significantly different from criminal proceedings, applying only to a limited class of persons and pursuing specific, often institutional, objectives which are different from the public purposes informing the general criminal law. On the authorities, the discretion to order such a stay only arises where a person has been convicted and punished for an offence by a court of competent jurisdiction in respect of the same or substantially the same facts. The Acting Superintendent in the present case does not qualify as a court of competent jurisdiction. (b) Neither is there any basis for barring or quashing the appellant’s conviction under BOR 11(6). The nature and purpose of the protection against double jeopardy provided by BOR 11(6) are different from those of the fair hearing safeguards under BOR 11(1) and BOR 11(2)(a) to (g). The former provision is a matter of substantive law while the latter provisions are procedural. The Engel criteria which enlarge the meaning of “criminal” beyond what is traditionally understood by that word (so that disciplinary proceedings may sometimes be included), are applied in Hong Kong for the purpose of determining whether the fair hearing guarantees are engaged. However, the Engel criteria are not applicable for the purposes of triggering BOR 11(6). That Article is only engaged where a person has already been finally convicted or acquitted in accordance with the law and penal procedure of Hong Kong of a criminal offence in the strict sense by a court exercising criminal jurisdiction and the person in question faces trial or punishment again for the same or substantially the same offence. BOR 11(6) is inapplicable to the prison disciplinary proceedings in the present case. 102. We would accordingly dismiss this appeal. Mr Justice Fok PJ: 103. I agree with the joint judgment of Mr Justice Ribeiro and Mr Justice Lam PJJ. Lord Reed of Allermuir NPJ: 104. I agree with the joint judgment of Mr Justice Ribeiro and Mr Justice Lam PJJ. Chief Justice Cheung: 105. Accordingly, the appeal is unanimously dismissed. Mr Derek Chan, SC and Mr Tien Kei-rui, instructed by Gallant, assigned by the Director of Legal Aid, and Ms Ferrida Chan, instructed by Gallant, on a pro bono basis, for the Appellant Ms Hermina Ng, SPP and Mr Timothy Chen, PP of the Department of Justice, for the Respondent [1] Made pursuant to the Prisons Ordinance (Cap 234). [2] He was subsequently convicted and sentenced on 27 July 2018 to two years’ imprisonment. Taking account of the time he had already been in custody prior to the sentence, he was released in early August 2018. [3] WKCC 1644/2019. [4] Mr Tien Kei-rui. [5] [1960] 2 QB 513. [6] [2018] QB 941. [7] [2010] 4 HKLRD 409. [8] HCMA 458/2019, [2020] HKCFI 1197. [9] FAMC 29/2020, [2021] HKCFA 10. [10] Connelly v DPP [1964] AC 1254 at 1361. [11] Ibid at 1362. [12] Ubamaka v Secretary for Security (2012) 15 HKCFAR 743 at §25; Pearce v The Queen (1998) 194 CLR 610 at §§18, 28. [13] (2009) 12 HKCFAR 867 at §21. [14] (2012) 15 HKCFAR 743 at §25. See also Connelly v DPP [1964] AC 1254 at 1362, 1364. [15] Ibid at 1361; Rogers v The Queen (1994) 181 CLR 251 at 286; Pearce v The Queen (1998) 194 CLR 610 at §31. [16] [1979] QB 425 at 452. [17] (1985) 7 EHRR 165 at §69. The Court went on to affirm the need for ECHR Art 6(1) procedural safeguards which are discussed later. [18] [1964] AC 1254 at 1305-1306. [19] Ibid at 1362. [20] Wemyss v Hopkins (1875) LR 10 QB 378 at 381. [21] [1960] 2 QB 513 at 518. A case to which we shall return when considering R v Robinson [2018] QB 941. [22] [1981] 1 WLR 886 at 893. [23] His Lordship was referring to the maxim expressed as “nemo debet bis vexari, si constat curiae quod sit pro una et eadem causa” or “nemo debet bis puniri pro uno delicto” (set out at 890). [24] Eg, Saeed v Inner London Education Authority [1985] ICR 637 at 643, per Popplewell J: “... double jeopardy in the context of this case means the peril of being convicted twice in a court of competent jurisdiction”; R(Redgrave) v Commissioner of Police of the Metropolis [2003] 1 WLR 1136 at §37 per Simon Brown LJ: “These authorities, to my mind, establish that, even assuming there has been an acquittal by a criminal court, the double jeopardy rule has no application save to other courts of competent jurisdiction, and there is therefore no bar to the bringing of disciplinary proceedings in respect of the same charge”; In re McClean’s Application for Judicial Review [2014] NIQB 124 at §31 per Morgan LCJ: “In order to sustain a claim of double jeopardy as a matter of domestic law it is necessary to demonstrate that the party has been subject to prior criminal proceedings before a court of competent jurisdiction”; Ashraf v General Dental Council [2014] ICR 1244 at §§22, 25, per Sir Brian Leveson P, citing Redgrave supra. It may be noted that R v Hogan [1960] 2 QB 513 was cited with approval in many of these authorities. [25] (2009) 12 HKCFAR 867 at §21. [26] [2018] QB 941. [27] [1960] 2 QB 513. [28] Together with Mr Tien Kei-rui and Ms Ferrida Chan. [29] Appellant’s Case §6.5. [30] R v Robinson at §25. [31] Ibid at §6. [32] Ibid at §9. [33] Ibid. [34] Ibid at §10 and at 943 setting out counsel’s argument. [35] Ibid at §§19-20. [36] Ibid at §§23-24. [37] Sections C.3 to C.7 below. [38] Hong Kong Bill of Rights Ordinance (Cap 383), section 8. [39] We focus on the contrast between the content of BOR 11(1) and 11(2) and that of BOR 11(6). The issues arising in this appeal do not call for comment on BOR 11(3)/ICCPR 14.4 (Procedures for juveniles); BOR 11(4)/ICCPR 14.5 (right to review by higher tribunal) or BOR 11(5)/ICCPR 14.6 (compensation for miscarriages of justice). [40] Issued by the United Nations Human Rights Committee (“UNHRC”) in July 2007. [41] At §3. [42] It also lacks reference to the privilege against self-incrimination contained in BOR 11(2)(g) and ICCPR 14.3(g). As to which, see HKSAR v Lee Ming Tee (2001) 4 HKCFAR 133 at 173-174; Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170 at §81. [43] (1976) 1 EHRR 647. [44] Ibid at §82. [45] Ibid. [46] Ibid. [47] Ibid. [48] Ibid at §64. [49] Ibid at §85. [50] Ibid. [51] (2007) 45 EHRR 39 at §43. [52] (1985) 7 EHRR 165. [53] (2004) 39 EHRR 1. [54] (1985) 7 EHRR 165 at §72. [55] Ibid. [56] (2004) 39 EHRR 1. [57] See A and B v Norway Nos 24130/11 and 29758/11, (2017) 65 EHRR 4 at §72. For the current position see https://www.coe.int/en/web/conventions/full-list/-/conventions/treaty/189?module=signatures-by-treaty&treatynum=117. [58] (2004) 39 EHRR 1 at §§47-48, 51. [59] Ibid at §84-85. [60] (2008) 11 HKCFAR 170. [61] Ibid at §39. [62] Ibid at §46. [63] Ibid at §49. [64] Ibid at §66. [65] Ibid at §103. [66] Ibid at §§118-120. [67] [2010] 4 HKLRD 409 at §§86-88, 98-100. [68] (2012) 15 HKCFAR 743. [69] Ibid at §12. Nigeria’s National Drug Law Enforcement Agency Act, section 22 penalised a person who had left Nigeria and was then found guilty of importing drugs into a foreign country, specifically providing that notwithstanding his trial and conviction abroad, he would be liable in Nigeria to imprisonment for a term of five years without option of a fine and forfeiture of his assets. [70] Ibid at §§166-167. [71] Ibid at §162. [72] Ibid at §§164, 167-168. [73] (2012) 54 EHRR 16. [74] Ibid at §§55-56. [75] Ibid at §57. [76] A and B v Norway Nos 24130/11 and 29758/11,(2017) 65 EHRR 4 at §117. [77] Nos 24130/11 and 29758/11,(2017) 65 EHRR 4. [78] Ibid at §9. [79] Ibid at §66. The Government cited Malige v. France, 23 September 1998, §35, Reports of Judgments and Decisions 1998-VII; Nilsson v. Sweden (dec.), no. 73661/01, ECHR 2005-XIII; Haarvig v. Norway (dec.), no. 11187/05, 11 December 2007; Storbråten v. Norway (dec.), no. 12277/04, 1 February 2007; and Mjelde v. Norway (dec.), no. 11143/04, 1 February 2007). [80] Nos 24130/11 and 29758/11,(2017) 65 EHRR 4 at §67. [81] Ibid at §89. [82] Ibid at §§90-91. [83] Ibid at §106. ECHR Art 7 prohibits conviction for a crime on account of any act or omission which did not constitute a criminal offence when it was committed. [84] Ibid at §107. [85] Ibid. [86] Ibid at §111. [87] Ibid at §112. [88] Ibid at §113. [89] Ibid at §114. [90] Ibid at §121. [91] Ibid at §123. [92] Ibid at §130. Examples of later decisions applying the “integrated approach” are given in the Guide on Article 4 of Protocol No.7 to the ECHR, “Right not to be tried or punished twice” (30 April 2021) https://www.echr.coe.int/Documents/Guide_Art_4_Protocol_7_ENG.pdf. [93] See Section C.1 of this judgment. [94] At §54. [95] At §57. [96] See Section B.1 above. [97] See Section B.2 above.
Mr Justice Ribeiro Acting CJ: 1. I agree with the judgments of Mr Justice Tang PJ, Mr Justice Bokhary NPJ and Mr Justice Chan NPJ. Mr Justice Tang PJ: 2. Inland Lot No 3289 is an elevated finger shaped piece of land which sits substantially above Tai Hang Road which loops around the long east and west sides of the finger and the short tip at the north side. On the south side is a steep bank of undeveloped government land. Inland Lot No 3289 has long been subdivided and there are 17 residential buildings, known as No 1 to No 16 Wang Fung Terrace, erected on it. All of these buildings with the exception of No 6 are either 4 or 5 storeys in height. In 1998, The Building Authority approved plans which resulted in the erection of a 16 storey building at No 6 Wang Fung Terrace. Inland Lot No 3289 is now known as the Wang Fung Terrace. 3. Wang Fung Road[1] provides the only vehicular access to Wang Fung Terrace which is from the Tai Hang Road on its western side. To reach it when travelling south along Tai Hang Road, a very sharp turn into the Wang Fung Road has to be made. Wang Fung Road is steep and narrow and runs in a northerly direction, virtually doubling back (on a hair pin bend) along the same stretch of Tai Hang Road but at a higher elevation. 4. At 11 and 12 Wang Fung Terrace, there are two 5 storey buildings. The appellant, China Field Ltd, wished to replace them with two 39 storey buildings. The building plans for the purpose were rejected by the Building Authority in 2001 under, inter alia, s 16(1)(g)[2] and s 16(1)(h)[3] of the Buildings Ordinance. They provide: “(1) The Building Authority may refuse to give his approval of any plans of building works where— (g) the carrying out of the building works shown thereon would result in a building differing in height, design, type or intended use from buildings in the immediate neighbourhood or previously existing on the same site; (h) the building works consist of, or any part thereof involves, the construction, formation or laying out of any means of access or other opening, not being a street or access road, to or from any street, and the place at or manner in which such means of access or other opening opens on to the street is, in his opinion, such as to be dangerous or likely to be dangerous or prejudicial to the safety or convenience of traffic using the street, or which may be expected to use the same;” 5. At the relevant[4] time the Outline Zoning Plan (“OZP”)[5], in force in this area contained no relevant restrictions in respect of building height. The OZP has since been amended[6] such that if new plans were submitted they are liable to be rejected under s16(1)(d).[7] 6. China Field appealed against the rejection of their building plans to the Appeal Tribunal (Buildings) (“the Tribunal”).[8] By its decision dated 29 November 2006, the Tribunal by a majority allowed the appeal against the rejection under s 16(1)(g), and dismissed the appeal against the refusal on the basis of s 16(1)(h). 7. The Tribunal held that although read literally s 16(1)(g) would allow the Building Authority to refuse to approve plans simply because a new building would differ in height either from the building it replaced or the buildings in the immediate neighbourhood, the Building Authority’s consent to the construction of a 16 storey building in 1998, at No 6 Wang Fung Terrace, destroyed the congruity of Wang Fung Terrace, and it was not open to the Building Authority to rely on s 16(1)(g) to refuse the plans. Although, the Building Authority sought to rely on the danger and/or inconvenience which the proposed development would pose to traffic to support their decision on s16(1)(g), the Tribunal, consistently with their view that congruity was the only relevant consideration under s16(1)(g), did not see fit to consider this aspect of the Building Authority’s case. As for s 16(1)(h), although the proposed buildings would open directly onto Wang Fung Road and pose no danger there, the additional traffic as a result of the re-development would cause or be likely to cause danger sufficiently proximate to the buildings such that they may be taken into consideration under s 16(1)(h). 8. China Field challenged the Tribunal’s decision under s 16(1)(h) by judicial review. After failing at First Instance and in the Court of Appeal, the appeal to this court succeeded[9]. Lord Millett NPJ[10] said that whilst he agreed: “30. … with the Judge and the Court of Appeal in the present case that the test of ‘proximity’ which is to be applied is not spatial but causal. … the relevant test is ‘direct causal connection’.” and that the Tribunal and the lower courts: “31. … correctly attributed the danger at the junction of Wang Fung Road with Tai Hang Road to the increase in the volume of traffic using the junction which would result from the increased density of occupation of the sites if the developments were permitted.” however: “37. [They] erred in law by taking into account the impact of the increase volume of traffic at the junction between Wang Fung Road and Tai Hang Road when this is not attributable to the place at which or the manner in which the means of access to either site is gained from Wang Fung Road. …” which requires the Authority to consider where it opens and how it opens onto the street, and it was not sufficient that the danger is caused by the development generally or by the increased density of occupation of the site, it must be attributable to “the place at or manner in which”[11] the proposed means of access or other opening involved in the building works opens onto the street.[12] 9. After saying he would remit China Field’s case to the Tribunal for rehearing, Lord Millett added: “38. … It will be for the Authority to consider whether it wishes to invite the Tribunal to reconsider its decision under s 16(1)(g) and for the Tribunal to consider whether to do so. Should it become necessary, it will be open to the Authority at an appropriate stage to apply for leave to bring proceedings for judicial review. I would express no view on the approach the court should take to such an application, save to say that, in the light of the way in which the proceedings have been conducted hitherto, it would be strange if the application were dismissed merely on the ground that it was out of time.” 10. On 4 August 2010, the Tribunal decided as a preliminary issue that only the s 16(1)(h)issue had been remitted to them but that to avoid a further remission, they would state what their decision would have been if the s 16(1)(g) issue had been remitted to them. They also decided that they would not be assisted by any further evidence on either issue. 11. After the substantive hearing, by their decision dated 29 April 2011, the Tribunal allowed China Field’s appeal against the Building Authority’s decision on s 16(1)(h)[13]. They refused to change their 2006 decision on s 16(1)(g). They remained of the view that, congruity [14] had been destroyed because the Building Authority had permitted a 16 storey building at No 6 Wang Fung Terrace. They rejected the Building Authority’s argument about the traffic problem and regarded it, given the Court of Final Appeal’s decision on to s 16(1)(h), as using s16(1)(h) by the “back door”. 12. The Building Authority applied for judicial review in relation to the Tribunal’s decision on s 16(1)(g). They sought, inter alia, an order of Certiorari to bring up and quash the 2011 decision, and an order of Mandamus to direct the Tribunal to dismiss China Field’s appeal. 13. The Building Authority succeeded both at first instance and in the Court of Appeal.[15] Both Lam J and the Court of Appeal disagreed with the tribunal’s decision that as a result of the erection of a 16 storey building at No 6 there was no longer any congruity to preserve. The Court of Appeal regarded the Tribunal’s expressed views on s 16(1)(g) as its determination and quashed it. They remitted the matter to the Tribunal for reconsideration but only on s 16(1)(g) in the light of their determination.[16] On 14 July 2014, leave to appeal to this court was granted on the following question: “whether in the application of s 16(1)(g) of the Buildings Ordnance Cap 123, consideration can be given to health and safety issues, or town planning aspects; and the extent to which such considerations have any spatial or causal limitations.”[17] 14. The question turns on the proper interpretation of s 16(1)(g). Section 16(1)(g) contains 2 limbs. The first limb covers a proposed building “differing in height, design, type or intended use from buildings in the immediate neighbourhood”. In a typical case, the objection would be that the proposed building is incongruous with its neighbours. Hence, the shorthand, congruity. The second covers a proposed building which differs in height, design, type or intended use from the existing building. It does not require any consideration of buildings in the immediate neighbourhood and one is not concerned with congruity. Here, the plans were rejected under the first limb, both because the proposed building would be incongruous and because of traffic concerns. The principal argument of Mr Edward Chan SC, for the appellant, is that congruity is the only relevant consideration under s 16(1)(g). Whether that is correct turns on the construction of s 16(1)(g), which as I have said has 2 limbs. I believe the second limb can provide a valuable insight[18] into the proper interpretation of s 16(1)(g) and, I will turn to it first. 15. The conditions which trigger the exercise of the Building Authority’s discretion under the second limb are that the proposed building is different, in height, design, type or intended use from the existing building. But what are the factors which may be taken into account on the exercise of discretion? Decisions based on the Building Authority’s reliance on the second limb mostly concerned stepped streets[19] without vehicular access. It appears that the Building Authority followed a consistent policy, since the PWD Land Conference on 16 December 1971, to disapprove building in excess of 4 storeys in such areas under s16(1)(g).[20] 16. Nos 2-11 Hok Sz Terrace, unreported, 27 February 1973, is one of the earliest decisions of the Tribunal referred to us. It was concerned with the proposed plans to build two adjacent blocks of 21 and 25 storeys which were disapproved because they differed from the existing building(s) in height. The Tribunal said: “2. … This single circumstance brings the present case within the possible exercise of discretion under Section 16(1)(g)…” 17. The Building Authority’s main concern was that fire engines could not approach the site, a concern which the Tribunal shared. The tribunal was of the view that “In the final analysis however, the Building Authority is responsible for the due and proper administration of the Ordinance.” and upheld the Building Authority’s rejection of the plans because of fire safety concerns. 18. An important authority on the second limb is Rich Resources Enterprises Ltd v The Attorney General, unreported, HCMP 3896/1991, 10 April 1992, which concerned 15-17 Sands Street[21], a decision of Mayo J (as he then was) on an application for judicial review from the refusal of the Building Authority to approve plans to build a 26 storey domestic building in place of an existing 3 storey building under the second limb.[22] There were a number of multi-storey buildings in the immediate neighbourhood which had been developed to a height higher than the buildings previously existing on those sites[23] but the decision was not concerned with them. The Building Authority main objection was that the density of the development was excessive with attendant fire safety issues. The applicant argued that density came within the ambit of the Town Planning Board which had not seen fit to impose any particular restriction on plot ratio[24] and the Building Authority would be usurping the functions of the Town Planning Board if it was able to determine this matter itself. Mayo J was of the view that the Building Authority was concerned with the safety of people in and around the building, since the height of buildings primarily dictated the number of occupants who will be using them and the Authority was entitled to taking account such factors as the density of the development.[25] The learned judge held that s 16(1)(g) gave the Building Authority wide discretion which could be exercised: “… side by side with powers exercisable by such bodies as the Planning Board and the Fire Services Department. Each Body views the overall situation from a different perspective but it is the Building Authority’s responsibility to ensure that all requirements are adhered to. The height of a building is very much the concern of the Building Authority and there is a definite duty imposed on it to ensure that such matters as access to the Building are sufficient. This would certainly impinge on the safety of the Building. …” 19. Mr Chan relied on the decision of the Tribunal in Re 11-13 Sands Street, unreported, Appeal Case No. 113 of 1992, 15 October 1993, where a distinction was drawn between questions of public safety and health which are site specific and relevant under s 16(1)(g) and broad matters of infrastructure which are not. However, that decision is at one with Rich Resources that in considering an exercise of discretion under s 16(1)(g), the Building Authority has to consider aspects of public safety and health. Mr Chan relied on the expression “site specific”. To overcome decisions which upheld the right of the Building Authority to consider aspects of public safety and health, Mr Chan submitted that to be site specific required that they be confined within the four corners of the building sites. A related argument is that there is a spatial requirement in the sense that it must be something within the “immediate neighbourhood” of the proposed development. With respect, I cannot agree. The second limb is not concerned with the immediate neighbourhood. As for the first limb, the condition for its exercise required a comparison with buildings in the immediate neighbourhood but the factors relevant for the exercise of the discretion are not so limited. There is nothing in the language of the provision to support such limitation. With respect, I agree with the Chief Judge that the test is one of causal connection.[26] I believe, the requirement that the concern must be site specific is another way of saying what the Chief Judge said is required, namely, that there must be “a causal connection between the consideration in question and the difference in height (etc) concerned.”[27] As the Chief Judge pointed out there is no hard and fast rule. The more remote physically a consideration is from the proposed development, the more difficult it is to establish a causal connection. 20. The decisions under the second limb which went back many years are unanimous that health and safety concerns are relevant factors to be considered.[28] I can see no reason why they should be impermissible considerations under the first limb. Surely, health and safety concerns directly attributable to height should be relevant to a proposed building whether it differs from the existing building or other buildings in the neighbourhood. There is nothing in the language of s 16(1)(g) which requires a different conclusion. Mr Chan’s principal contention is that congruity is the only relevant concern.[29] He submitted, first, density is not covered by s 16(1)(g), it uses the word “height” instead, so any safety or health concerns, even if the direct consequence of the increased density, are not relevant. With respect, this is a futile semantic exercise. What does it matter whether one says there are health or safety concerns as a direct result of the additional floors and the people accommodated in them, or as a direct result of greater density. Then, Mr Chan submitted that density as a result of greater height is a town planning concern. More importantly, it is the sole concern of the Town Planning Board. But “height, design, type or intended use” are also town planning considerations and they are matters which trigger the Building Authority’s discretion under s 16(1)(g). Why must health or safety concerns which spring directly, say, from the increased height be ignored by the Building Authority? Mr Chan relied on s 13 of the Town Planning Ordinance Cap 131 which provides “Approved plans shall be used by all public officers and bodies as standards for guidance in the exercise of any powers vested in them.” But the building density guidelines[30]show that whilst the ultimate maximum domestic plot ratios permissible in Hong Kong are set by First Schedule of the Buildings (Planning) Regulations, restrictions below this level can only be enforced through, inter alia, statutory controls incorporated in Outline Zoning Plans or rural Outline Zoning Plans. Moreover, not only does plot ratio which governs the maximum density of developments come under the purview of the Buildings Ordinance, s16(1)(d) and (d)(a) of the Buildings Ordinance empower the Building Authority to approve plans notwithstanding that they contravene plans made under the Town Planning Ordinance[31]. Section 13 of the Town Planning Ordinance does not support the argument that density is the sole concern of the Town Planning Board, or that the Building Authority must approve building plans which do not exceed the density permitted under a relevant zoning plan whatever the health or safety concern. With respect, the argument that density was the concern solely of the Town Planning Board must be rejected. 21. Mr Chan also argued by analogy that fire safety was the concern solely of the Fire Services Department such that if s 16(1)(b) was satisfied, the Building Authority could not reject the plans under s 16(1)(b). This argument was rejected as long ago as 1973 in Nos 2-11 Hok Sz Terrace referred to in para 17 above. There, the Tribunal rejected the argument on behalf of the appellant that: “4. … if the Director of Fire Services was willing to provide a certificate under section 16 (1)(b)(ii)[32], as he did in the present case, then the Building Authority ought not to place emphasis upon the lack of vehicular access, and difficulty in protecting the premises in the event of fire.” 22. It is said that to permit the Authority to take traffic safety into account is tantamount to allowing reliance on s 16(1)(h) by the backdoor. Mr Chan made the further point that the power to disapprove on account of danger to traffic is restricted to situations covered by s16(1)(h). With respect, I cannot agree. In China Field (No 2) this court decided that on the true construction of s 16(1)(h), the Authority’s traffic concern did not fall within s 16(1)(h), not that it was irrelevant under s 16(1)(g). 23. So here, although s 16(1)(h) has no application, other traffic concerns may be taken into consideration by the Building Authority. In the present case, if it is established[33], for example[34], as this court in China Field (No 2) put it, there would be danger at the junction of Wang Fung Road and Tai Hang Road due “to the increase in the volume of traffic using the junction which would result from the increased density of occupation of the sites if the development were permitted.”[35], the Building Authority would be entitled to disapprove the plans under s 16(1)(g). 24. We have had the benefit of substantial submissions on the legislative history of s 16(1)(g). But I have not found it necessary to resort to them for the purpose of this judgment. 25. For these reasons, I would dismiss the appeal and make an order nisi that the appellant pays the costs of the appeal. Should either party wish to contend for a different order for costs, written submissions should be lodged with the Registrar and exchanged within 14 days of the handing down of this judgment, with liberty on the other party to lodge and exchange written submissions within 14 days thereafter. In the absence of an application to vary, this order as to costs will become absolute at the expiry of the time limited for the lodging of submissions. Mr Justice Bokhary NPJ: 26. Subject to narrow exceptions, none of which apply in the present case, no building works may be commenced or carried out without first obtaining the Building Authority’s approval of the plans for such works. The grounds on which the Building Authority may refuse to give his approval of plans for building works are many, varied and to some extent overlapping. They are set out in subsection (1) of section 16 of the Buildings Ordinance, Cap 123. This subsection is a lengthy one consisting of 18 paragraphs which are designated as paragraphs (a) to (d) and (da) to (q). The present appeal concerns the scope of the grounds of refusal contained in paragraph (g). By s.16(1)(g), the Building Authority may refuse to give his approval of any plans of building works where “the carrying out of the building works shown thereon would result in a building differing in height, design, type or intended use from buildings in the immediate neighbourhood or previously existing on the same site.” In granting China Field Ltd (“China Field”) leave to bring the present appeal, the Appeal Committee did so on the basis that it involved a question which, by reason of its great general or public importance, ought to be submitted to this Court for decision. Question on which leave to appeal was given 27. As formulated by the Appeal Committee, that question is whether in the application of s.16(1)(g) “consideration can be given to health and safety issues, or town planning aspects; and the extent to which such consideration have any spatial or causal limitations”. On this question, China Field contends that in the application of s.16(1)(g) no consideration can be given to health and safety issues or town planning aspects but that if consideration can be given to them, then such consideration is to be confined to their effect within the building site or at most its immediate neighbourhood. The Court of Appeal (Chief Judge Cheung and Justices of Appeal Kwan and Barma) took the opposite view. Its view, which China Field attacks and the Building Authority defends, can be summarised thus. (1) Consideration can be give to health and safety issues and town planning aspects provided that there is a causal connection between the difference on the basis of s.16(1)(g) is invoked and such issues or aspects. (2) There can exist, depending on the particular circumstances of any given case, such a causal connection even where the health and safety or town planning effect is felt beyond the building site and indeed its immediate neighbourhood. 28. Questions of law, however broad, are at least in general far more clearly understood and better answered in the context of the facts in which they arise. Shortly stated, the relevant facts are as follows. Relevant facts 29. China Field proposes to redevelop the site (which I will call “the subject site”) constituted by Nos 11 and 12 Wang Fung Terrace. With the exception of the 16-storey building at No. 6, the buildings in Wang Fung Terrace range from 4 to 5 storeys. Two 5-storey buildings housing between them a total of 39 flats stand on the subject site. China Field proposes to redevelop the subject site by demolishing those two 5-storey buildings and erecting in their stead two 39-storey buildings housing between them a total of 152 flats and 46 car-parking spaces. The evidence is that China Field’s proposed redevelopment would increase the potential traffic flow from Wang Fung Terrace by approximately 43%. Such an increase of traffic flow would render Wang Fung Road’s junction with Tai Hang Road even more dangerous than it already is. And such increase of danger is the health and safety issue or town planning aspect which the Building Authority took into account in deciding to refuse to give his approval of the building plans for China Field’s proposed redevelopment. 30. There have been two sets of judicial review proceedings pertaining to that refusal (which was communicated by a refusal letter dated 2 November 2001). The first set culminated in this Court’s decision handed down on 30 October 2009 and reported as China Field Ltd v Appeal Tribunal (Buildings) (No 2) (2009) 12 HKCFAR 342. (To avoid confusion, it should be mentioned that China Field Ltd v Appeal Tribunal (Buildings) (No 1) is the report of the Appeal Committee’s determination granting the leave pursuant to which that appeal was brought.) The present appeal is the culmination of the second set of judicial review proceedings pertaining to the refusal communicated as long ago as 2 November 2001. This litigation as a whole is, it can be seen, in the nature of a saga. And, as will be seen, the present appeal will not be the end of the saga since the matter has to be remitted to the Buildings Appeal Tribunal yet again. 31. For the details of the danger which already exists at the junction of Wang Fung Road and Tai Hang Road and which the Building Authority does not wish to increase, it is convenient to look at paragraphs 22 to 26 of the judgment which Lord Millett NPJ gave in China Field (No 2) which read:- “23. Wang Fung Terrace is situate on an elevated, elongated finger of land running from north to south, which is surrounded on the West and North sides by Tai Hang Road, on the South side by a steep bank of undeveloped Government land, and on the south side abutting but without access to other residential land. The only access to Wang Fung Terrace is from Tai Hang Road which runs along its western side. To reach it when travelling south along Tai Hang Road, it is necessary to make a very sharp left turn into Wang Fung Road. Wang Fung Road itself is steep and narrow and runs in a northerly direction, virtually doubling back along the same stretch of Tai Hang Road but at a higher elevation. The comparatively short section of the road from the junction with Tai Hang Road uphill to the midpoint of the 180º hairpin bend is on Government land but is subject to a right of way in favour of the owners of Wang Fung Terrace. From that point, the road doubles back and runs in a southerly direction along the western side of the promontory pas Nos 4 and 4A-D until it eventually reaches the northwestern corner of No 11 where it terminates. 24. The building plan for the development of Nos 11 and 12 shows that the property will have direct access to Wang Fung Road. The building plan for the development of Nos 4 and 4A-D shows that the property will not have direct access to Wang Fung Road, but to a pre-existing paved lane (the lane) which feeds into Wang Fung Road. The lane lies between the site and an adjacent property and at right angles to Wang Fung Road, which continues past the property for a considerable distance. It is 18 feet wide, half its width lying within the development site and half belonging to the adjacent property. 25. Wang Fung Road is an unsatisfactory road in many respects. It is very narrow. It has no footpath for pedestrians. It has a hairpin bend that is too narrow for cars travelling in opposite directions to navigate simultaneously. The fall in Wang Fung Terrace towards Tai Hang Road also means that there is poor visibility at the hairpin bend. The junction with Tai Hang Road also has numerous problems. It affords poor visibility for vehicles joining Tai Hang Road. This is because of the steep gradient from the upper area of Wang Fung Terrace to Tai Hang Road and the fact that a short distance to the north of the junction Tai Hang Road bends sharply. Most seriously, Wang Fung Road joins Tai Hang Road at an acute angle, which means that southbound traffic on Tai Hang Road would usually have to execute a three point turn in order to enter Wang Fung Road. 26. Despite these shortcomings, the evidence which the Tribunal accepted was that Wang Fung Road itself is not dangerous or likely to be made dangerous by the increased volume of traffic due to the developments except at the junction with Tai Hang Road, where it would aggravate an already dangerous situation.” 32. In this the second set of judicial review proceedings pertaining to the Building Authority’s refusal to give his approval of the building plans for China Field’s proposed redevelopment, the Buildings Appeal Tribunal, by the decision which it gave on 29 April 2011, allowed China Field’s appeal to it against such refusal. On 19 November 2012 Justice of Appeal Lam (sitting as an additional judge of the High Court) allowed the Building Authority’s application for judicial review of the Buildings Appeal Tribunal’s decision of 29 April 2011 so as to remit the matter to the Buildings Appeal Tribunal. China Field then appealed from the High Court to the Court of Appeal. On 3 January 2014 the Court of Appeal, whose view on the point of law involved I have already summarised, varied the High Court’s order but otherwise dismissed that appeal of China Field’s. The present appeal is China Field’s appeal against that dismissal. What is the scope of s.16(1)(g) and of the Building Authority’s role? 33. What is the scope of s.16(1)(g) and of the Building Authority’s role? 34. In putting forward its answer to this question, each side has in its own way placed reliance on the history of Hong Kong’s legislation in regard to building and town planning matters. Recourse to legislative history is sometimes illuminating. Suffice it to say that I do not find it so in the present case. The answer has to be found via some other route. 35. There can be, as the facts of the present case show, circumstances in which matters such as vehicular traffic have a site specific dimension with which the Building Authority is rightly concerned as well as being part of the wider picture which is the province of town planners. Building height is one of the differences to which s.16(1)(g) is directed, and experience shows that it is the difference on the basis of which s.16(1)(g) is most often invoked. As to the site specific dimension of vehicular traffic, it is worth noting that an increase in building height usually means an increase of occupants some of whom are likely to be motorists and all of whom are liable to be visited by persons travelling in private cars or taxis. That is a reality which Mr Edward Chan SC for China Field rightly felt unable to deny when it was put to him by Mr Justice Gleeson NPJ in the course of the argument. 36. There have been instances in which s.16(1)(g) has operated to preserve strict uniformity as a “rate and range” clause would have done. But that does not turn s.16(1)(g) into no more or no less than such a clause. Whatever room there may be for using s.16(1)(g) to achieve an aesthetic objective, the Buildings Appeal Tribunal and the courts alike have consistently refused to confine s.16(1)(g)’s operation to aesthetics. Ably as always but more boldly than usual, Mr Chan nevertheless invites us to hold that s.16(1)(g)’s operation is indeed so confined. I respectfully decline the invitation, seeing nothing in the language or the context of the legislation to warrant accepting it. 37. As Mr Justice Gleeson NPJ so pertinently observed in the course of the argument, building development or redevelopment by its very nature involves change. It is not any and every change that would warrant invoking s.16(1)(g). Standing against change simply for the sake of preventing change is not its purpose. It has a more practical purpose than that. 38. There have been numerous instances in which the Buildings Appeal Tribunal have treated health and safety as within the purview of s.16(1)(g). True it is that those appear to have been instances involving the “previously existing” buildings limb of s.16(1)(g) and the proposed building itself. But there is no basis for drawing a distinction for present purposes between that limb (which is sometimes called the “second limb”) and the “buildings in the immediate neighbourhood” limb (which is sometimes called the “first limb”). Nor is there any reason for taking so limited a view of health and safety as to treat them as incapable of ever being relevant other than in regard to the proposed building itself. 39. Mr Chan submits that since there are other officials with responsibility for health and safety issues and town planning matters, no such issue or matter can ever be taken into consideration by the Building Authority when deciding whether or not to give his approval of building plans. That submission goes too far. Of course the Building Authority is not to usurp the functions of such other officials. But he would not necessarily be doing anything of the kind when, in an instance within the objective limits of s.16(1)(g), he refuses to give his approval of plans of building works which if carried out would create or exacerbate something seriously detrimental to health and safety or town planning. Answer 40. In my judgment, the position in law, on a purposive, contextual and therefore true construction of the legislation in question, is as follows. (1) Matters of health and safety and matters of town planning can be taken into consideration by the Building Authority when he decides whether or not to give his approval of plans of building works provided that there is a causal connection between such matters and the difference on the basis of which s.16(1)(g) is invoked. (2) The distance between the proposed development or redevelopment and the place or places where its effect on health and safety or town planning is felt will at least in general be relevant to the question, which is one of fact and degree, of whether there is such a causal connection. But (3) such a causal connection can, depending on the particular circumstances of the case, exist whether such effect is felt within the building site, in its immediate neighbourhood or beyond its immediate neighbourhood. Traffic lights 41. I mention only promptly to dismiss Mr Chan’s contention that the danger at the junction of Wang Fung Road and Tai Hang Road can be removed by the installation of traffic lights. There is no evidence to that effect. Nor is there any evidence as to what knock-on effect such traffic lights may or may not have. It is open to China Field to raise this question of traffic lights before the Buildings Appeal Tribunal upon the remitter to it. My saying that is not to be taken to suggest that I see any promise in an argument that the exercise of the Building Authority’s discretion should somehow depend on what somebody else may or may not see fit to do in regard to the installation of traffic lights. Result 42. In the result, I would, for the foregoing reasons and with an expression of my thanks to counsel on both sides, dismiss this appeal with costs nisi to the Building Authority. Mr Justice Chan NPJ: 43. I agree with the judgments of Mr Justice Tang PJ and the judgment of Mr Justice Bokhary NPJ. I wish to add only a few observations on 3 of the points made by the parties. Legislative history 44. I do not think the legislative history of the Buildings Ordinance, Cap 123 and other statutes is particularly helpful in the present case. 45. The social conditions at the time when these statutes were enacted were very different: the demand for new buildings especially domestic buildings and the need for redevelopment of old buildings were not the same; the problems with regard to public health and safety arising from developments or redevelopments are more varied and complex; and the structure of government policy making departments and law enforcement departments and the role each of these departments is required to play are also quite different. 46. It is therefore not easy to discern any clear legislative intention regarding the Building Authority’s powers under the current s.16(1). It is significant to note that there is no reference in any of the statutes, either expressly or impliedly, suggesting that the Building Authority in exercising its powers under s.16(1)(g) is not to be concerned with issues of public health and safety. 47. On the contrary, the grounds upon which the Building Authority can refuse approval of proposed building plans under s.16(1) have increased to 18 grounds, many of which are indeed concerned with various aspects of public health and safety. Mr Chan SC has not submitted that these grounds are mutually exclusive. As a matter of statutory construction, I do not think this is open to him. Some of the considerations relevant to one ground are clearly also relevant to some other grounds. 48. Ultimately, what are the matters which the Building Authority can or cannot take into consideration in the exercise of his discretion under a particular provision, in this case s.16(1)(g), is a matter of construction of that provision, adopting a purposive approach bearing in mind the Building Authority’s role and duty under the Buildings Ordinance. The role of the Building Authority 49. The Town Planning Board and the Building Authority obviously have different roles to play under their respective empowering statutes. 50. The Board is entrusted with the power, among other things, to draft plans for the lay-out of the urban areas in Hong Kong according to certain town planning policies (s.3(1)(a) of the Town Planning Ordinance, Cap 131). In drafting such lay-out plans, the Board may make provisions for the delineation of zones and districts and the provision of facilities for communal purposes as mentioned in s.4(1)(a) to (i) of that Ordinance. Needless to say, it must take into account broad town planning considerations including the general concern over public health and safety of the residents within the zones and districts shown on the draft plans. 51. However, it cannot be seriously suggested that when drafting these lay-out plans, the Board has any particular building or site, or the future potential redevelopment of such building or site within its contemplation. Nor would it have in mind problems, particularly those concerning public health and safety, which may specifically arise from the redevelopment of any particular building or site. These problems (which are unlikely to have been anticipated by the Board when preparing the draft plans) would only be noticeable from any proposed building plans which are submitted to the relevant departments or authorities for approval. Hence, it cannot be argued that the departments and authorities entrusted with the power and duty to approve building plans are not to be concerned with aspects of public health and safety which may specifically arise from a particular proposed redevelopment on the ground that these are broad town planning considerations which have nothing to do with the relevant departments or authorities. 52. They of course have to be guided by the draft plans prepared by the Board (s. 13 of the Town Planning Ordinance, Cap 131). But they play a different role from that played by the Board. The Building Authority is entrusted with the duty to properly and fairly administer the provisions of the Buildings Ordinance. As pointed out by Godfrey JA approving what the Buildings Appeal Tribunal said in Wing On Co Ltd v Building Authority (1996) 6 HKPLR 432, 438: “ … whereas the Town Planning Board is concerned with planning considerations for a particular zone or area, the Building Authority and this Tribunal are of course concerned with a particular site or specific building development. ” 53. I would also respectfully agree with the comments made by Mayo J in Rich Resources Enterprises Ltd v Attorney General, HCMP 3896 of 1991 (10 April 1992) at p 9: “I can see no difficulty if these powers and discretions [under s.16(1)] are exercisable side by side with powers exercisable by such bodies as the Planning Board and the Fire Services Department. Each body views the overall situation from a different perspective but it is the Building Authority’s responsibility to ensure that all requirements are adhered to. The height of a building is very much the concern of the Building Authority and there is a definite duty imposed on it to ensure that such matters as access to the Building are sufficient. This would certainly impinge on the safety of the Building. …” 54. The differences in “height, design, type and intended use” of any proposed new building are in one sense also town planning considerations. But they are specific to the proposed development and are not to be regarded as “general town planning considerations” which pertain to the zone or district covered by the draft plans. Yet, the Building Authority is empowered to exercise its discretion to disapprove proposed building plans if there are such differences. What does “difference in height” entail? 55. It can hardly be disputed that the possible consequences of a difference in height must be a relevant consideration in the exercise of discretion under s.16(1)(g). The real issue in the present case is whether problems of public safety (i.e. the potential increased traffic danger at the junction at Tai Hang Road) which may result from the difference in height in the proposed buildings can be taken into consideration by the Building Authority in exercising its discretion under that subsection. 56. Mr Chan submits that to be a relevant consideration, it must be shown that the concern in question is directly caused by the difference in height between the proposed new buildings and their immediate neighbourhood. However, he argues that such a concern cannot be a relevant consideration because one cannot translate the difference (here, the substantial increase) in height into an increase in density or traffic danger; “density” or “traffic danger”, it is said, simply does not appear in the provision. 57. With respect, I do not think this submission can be sustained. It is putting too narrow a construction on s.16(1)(g). In considering this subsection, the Building Authority does not merely focus on any difference in height in terms of metres and feet, but has also to consider the natural consequences, if any, arising from such a difference, including its possible impact on the occupants and users of the new building. 58. We are concerned with a proposal to construct two high rise domestic buildings (not a radio tower as Mr Justice Gleeson NPJ put it during argument). In the Hong Kong context, a new domestic building taller than the buildings in the immediate neighbourhood (or the building it is proposed to replace) would in most cases almost inevitably result in an increase in the number of flats and the number of occupants living in the new building and this would no doubt in turn lead to an increased burden on the traffic in the vicinity. It defies commonsense to argue that the result of a difference in height should not and could not be translated in terms of density and traffic danger. This is what a difference in height would entail in practical terms. 59. In the present case, there are in the whole of Wang Fung Terrace 214 flats. The proposed development involves an additional 113 flats (an increase of almost 53%) and 46 new car parking spaces. It would be quite wrong to say that the possible effect of such an increase (which is the natural consequence of the difference in height) is, as a matter of construction of s.16(1)(g), an irrelevant consideration. In my view, the Building Authority would be failing in its duty if it were to ignore any effect on public safety of such a project. Mr Justice Gleeson NPJ: 60. I agree with the judgments of Mr Justice Tang PJ, Mr Justice Bokhary NPJ and Mr Justice Chan NPJ. Mr Justice Ribeiro Acting CJ: 61. The Court unanimously dismisses this appeal and makes the order as to costs set out in the last paragraph of Mr Justice Tang PJ’s judgment. Mr Edward Chan SC and Mr Anthony Ismail, instructed by Kao, Lee & Yip, for the appellant. Mr Mok Yeuk Chi and Mr Alexander Stock, instructed by the Department of Justice, for the respondent. [1] Sometimes referred to as Wang Fung Street. [2] In that, the proposed buildings differ in height from the buildings in the immediate neighbourhood. [3] In that, the proposed building works involving the construction, formation or laying out of a means of access to or from Tai Hang Road is likely to be dangerous or prejudicial to the safety or convenience of traffic using the street or which may be expected to use the same. [4] The time during which the plans were required to be considered. AG v Fire Building Authority v Head Step Ltd [1996] 6 HKPLR 87 at 98. [5] Causeway Bay Outline Zoning Plan No. S/H6/9. We have not been supplied with a copy of the plan. [6] The current plan appears to be OZP No. S/H6/15, under which Wang Fung Terrace is zoned R(C) such that “No new development, or … redevelopment of an existing building shall result in a total development and/or redevelopment in excess of a maximum of plot ratio and a maximum building height of six stories including carports, or the plot ratio and height of the existing building, whichever is the greater.” [7] However, in the case of an erroneous rejection of plans, the applicant should be put back to the position in which he would have been if the error had not been made. Wong Kwok Gee v The Building Authority 1995 M.P. No. 963 unreported, 3 November 1995 per Keith J at 13. So, it appears, the new zoning does not apply to the plans under consideration. [8] Co-incidentally, in 2001, the owner, Sun Honest Development Ltd, of No 4 and No 4 A-D also wished to redevelop the existing 4 storey and 5 storey buildings erected on them respectively with a 40 storey building. Sun Honest’s appeal to the Tribunal was heard together with China Field’s appeal, as well as in some of the subsequent judicial review proceedings. But we are not concerned with Sun Honest in the present proceedings. Sun Honest’s case involved an additional and important point of law concerning whether and if so how a prescriptive right of way might be acquired in Hong Kong as between leaseholders holding under a common landlord. [9] China Field Ltd v Appeal Tribunal (Buildings)(No 2)(2009) 12 HKCFAR 342. I will refer to it as China Field No 2. [10] With the concurrence of the other members of the court. [11] Para 34. [12] Thus, for example: “32. … the Authority would not be entitled to reject building plans which involved the addition of further floors above an existing building but no alteration to the existing access to the street, because the building works would not involve the construction, formation or laying out of any means of access but only the use of an existing one. The fact that the massive increase in the volume of traffic using the street would cause danger or inconvenience to traffic even in the immediate vicinity of the site will not be sufficient.” [13] We are not concerned with this part of the decision. [14] Which they regarded as a useful shorthand for the legislative intention. [15] Before Lam J (as he then was) and in the Court of Appeal (Cheung CJHC, Kwan JA and Barma JA). [16] Namely that the Tribunal erred in its understanding and application of the congruity test, and that their view that, inter alia, health and safety issues were not relevant considerations under s 16(1)(g) was wrong. [17] Leave to appeal to this court was granted on 14 July 2014, limited to this question only. It is agreed that at least the question of congruity has to be remitted to the Tribunal. [18] Typically decisions under the rejection under the first limb would be on the sole ground of incongruity, hence decisions on the first limb would not provide any assistance on what other factors might be relevant because no other ground was relied on. In para 70 of the judgment of Cheung CJHC, he said: “health and safety are matters of public importance. Any lingering doubts about their relevance under s 16(1)(g) is undesirable. I wish therefore to state firmly that health and safety are always relevant considerations under s 16(1)(g) -- subject to the question of causal connection. I note that the authorities cited to this court all speak with one voice on this point…”, the authorities referred to by the Chief Judge were decided under the second limb. [19] New Town Project Management Limited v Building Authority, Case Nos 179 and 180 of 2007, and Bestview International Development Limited v Building Authority, Case Nos 571 and 583 of 2007 (heard together), 20 January 2009 was not concerned with a stepped street. And it was not concerned with public health and safety issues. The decision was dealt with by Lam J at para 69. [20] Nos 2-11 Hok Sze Terrace, unreported, 27 February 1973. It also appeared that in 1974, the Building Authority issued a practice note which stated in effect that any new building within stepped streets or similar areas would be restricted to 4 storeys. That was later raised to 6 storeys and then 7 storeys. In Nos 15-17 Sands Street (1994) HKDCLR 21, 24. [21] A stepped street. [22] There was a subsequent appeal to the Buildings Appeal Tribunal concerning a plan for a 12 storey building which was successful . In Nos 15-17 Sands Street [1994] HKDCLR 21. [23] Presumably built on plans approved before the Land Conference held on 16 December 1971. [24] In the present case, it is not clear whether the relevant OZP imposed any height restrictions on Wang Fung terrace, if not, control would be found in the Building (Planning) Regulations made under the Buildings Ordinance. [25] In the Matter of Nos 6-8 U Lam Terrace, unreported, Appeal Case No. 60 of 1991, 10 November 1992, another stepped street application rejected under the second limb, the Tribunal said at p 17 “The height of buildings primarily dictated the number of occupants who would be using them and the authority was undoubtedly under a duty to take into account such factors as the density of the development.” In para 31 of Lord Millett’s judgment quoted in para 8 above, it appears that his Lordship did not find it necessarydistinguish between height and density. [26] Para 94. [27] At para 79. Lord Millett expressed similar views at para 30 in China Field No 2, quoted in para 8 above. [28] Mr Chan relied on 11-13 Sands Street (15 October 1993) as a contrary decision. Like the Chief Judge at para 80, I am of the view that the decision gives Mr Chan no support. [29] Mr Chan accepts as a fall back position that health may be a relevant concern. He gave the example of the building of a hospital for infectious disease which is a different intended use. He contended, however, that this is a site specific consideration. I have dealt with his argument on “site specific” in para 19 above. [30] The Hong Kong Planning Standards and Guidelines, at 3.1.1. [31] As well as contravention of the Buildings Ordinance so the Building Authority could allow maximum plot ratios to be exceeded. I cannot agree with Mr Chan that these provisions merely gave the Building authority limited power to enforce plans made under the Town Planning Ordinance. [32] Section 16(1)(b)(i) applied to buildings where no fire safety installations etc was required. [33] At the remitted hearing. [34] I do not exclude other serious traffic concern at the junction or elsewhere on Wang Fung Road. In a suitable case, as Cheung CJHC said other infra-structure issues may be relevant. Para 71. [35] See per Lord Millett at para 31 cited above at para 8.
Chief Justice Ma: 1. I agree with the judgments of Mr Justice Ribeiro PJ and Mr Justice French NPJ, and the orders they propose. Mr Justice Ribeiro PJ: 2. I have read in draft the judgment of Mr Justice French NPJ and respectfully agree with it. In tandem with the main appeal dealt with by his Lordship, the appellant brought an appeal against an award of costs made against him in favour of the prosecution. Since the main appeal is allowed, that costs award has in any event to be set aside. However, this judgment provides the opportunity to address certain questions of principle and practice regarding such awards of costs. 3. Having been convicted and fined HK$10,000 by the magistrate,[1] the appellant’s appeal to the Court of First Instance was dismissed by Deputy High Court Judge S Chan[2] who ordered the appellant to pay the respondent’s costs to be taxed if not agreed, stating[3] that he found “the appellant’s grounds of appeal weak and without good prospect of success”. 4. Regrettably, that order was made without any prior notice to the appellant. It had not been sought by the prosecution and the appellant was not given any opportunity to be heard as to whether it should be made nor as to his means to satisfy the award. This involved an elementary breach of natural justice and a failure to take account of statutory principles regulating the making of costs orders in favour of the prosecution. 5. The appellant sought leave to appeal against the costs award on the substantial and grave injustice ground. Quite properly, the prosecution stated that it was prepared to concede that the order was erroneously made, subject to the appellant filing evidence as to his means. An affirmation was duly provided, the appellant deposing to his having net assets of about HK$67,022, a monthly income of HK$13,000 and monthly expenditure of about HK$12,430. The costs have been taxed in the sum of HK$73,803.33. 6. The Appeal Committee[4] granted leave to appeal against the costs order, directing that the parties file a short Joint Case, to be disposed of on the papers at the hearing of the main appeal. The Joint Case has duly been filed and save for differences in respect of two matters discussed below, the parties are ad idem and the respondent maintains its concession that the appeal should be allowed and the costs award set aside. It is right to do so. 7. Costs should not be awarded in favour of the prosecution as a matter of course whenever an appeal against conviction in the Magistrates’ Court fails. A right of appeal is given by section 113 of the Magistrates Ordinance[5] and convicted persons with reasonably arguable appeals should not be punished or suffer the adverse consequences of a costs award for exercising that right. Nor should such persons be deterred from exercising that statutory right for fear of possibly unaffordable adverse costs orders. 8. Section 13 of the Costs in Criminal Cases Ordinance[6] empowers the Court[7]to award costs to the prosecutor where a defendant’s appeal against conviction by a magistrate is unsuccessful only if the judge is satisfied that the appeal was without merit. Additionally, section 15 lays down principles guiding the exercise of the power as follows: “In any criminal proceedings- (a) the costs that may be awarded by virtue of an order shall not be punitive but shall be such sums as appear to a court or a judge reasonably sufficient to compensate any party to the proceedings for any expenses properly incurred by him in the course of those proceedings, including any proceedings preliminary or incidental thereto; (b) a court or a judge may have regard to any assessment laid before it or him for their assistance by any party to the proceedings of the amount of costs properly so incurred by any such party; (c) an order as to costs shall be such as a court or a judge considers just and reasonable; (d) the amount to be paid in pursuance of an order as to costs shall, unless an order for taxation is made under section 20, be specified in that order; (e) the question of whether or not an order as to costs ought to be made in respect of any expenses properly incurred by any party to the proceedings in the course of the proceedings, including any proceedings preliminary or incidental thereto, may be adjourned until the end of those proceedings; (f) a court or a judge may take into account any other order as to costs which has been made in respect of those proceedings.” 9. In order that the right of appeal granted by section 113 be given full effect, the section 13 requirement that the appeal was “without merit” must be understood to mean that the appeal was not reasonably arguable. It must also be noted that such a finding, though necessary, is not sufficient. The judge must go on to apply the principles laid down by section 15. This obliges the court to ensure that any sum awarded is not punitive but only compensatory of properly incurred expenses.[8] It must also ensure that a contemplated award would be “just and reasonable”.[9] 10. For the court to address these issues, it is obviously necessary for it to have some idea of the magnitude of costs incurred by the prosecutor[10]and in practice, these issues are likely to arise only where the prosecution applies for costs. It would then be necessary for the appellant to be afforded a proper opportunity to be heard as to whether the order should be made. 11. As the Court of Appeal recognized in HKSAR v Kissel (No 2),[11] the court must have regard to the financial means of the defendant and satisfy itself that any costs order is one that the defendant is able to pay.[12] It would not be just and reasonable to order the appellant to pay costs beyond his or her means. And such an award might well operate punitively. 12. Turning to the two points on which the parties differ, the appellant first submits that if the court – “... is minded to make a costs order ‘to be taxed if not agreed’, as opposed to a lump sum costs order, ... the prosecution should be required to serve full details of its costs, or if that is not practicable in the circumstances, a reasonable estimate of its costs, and the appellant should be afforded an opportunity to comment on such costs before the costs order is finalized”. [13] 13. I do not consider such a direction called for. If the prosecution wishes to apply for costs, it can be expected to provide an estimate of the costs it has incurred to enable the court to carry out the section 15 exercise. Only if the court is satisfied that a contemplated award lies within the unsuccessful appellant’s means and would prima facie be just and reasonable so that it is minded to award the prosecution its costs, would any question of taxation arise. Taxation would be ordered if the appellant wishes to challenge the reasonableness of particular expenses incurred. A detailed bill would therefore only be needed when embarking upon the taxation process and not at the earlier stage of deciding whether an award should be made. 14. Secondly, the appellant submits that the Court should state that in principle: “The costs ordered to be paid should not be grossly disproportionate to the fine imposed on the defendant”. This is a proposition derived from the decision of the English Divisional Court in R v Northallerton Magistrates’ Court, ex p Dove,[14] where, having considered English statutory provisions (which bear certain material differences from our section 15),[15] Lord Bingham CJ stated: “While there is no requirement that any sum ordered by justices to be paid to a prosecutor by way of costs should stand in any arithmetical relationship to any fine imposed, the costs ordered to be paid should not in the ordinary way be grossly disproportionate to the fine.”[16] 15. I do not think it necessary or appropriate for this Court to lay down an independent rule in the terms suggested by the appellant. As Mr William Tam SC submits on the respondent’s behalf, cases may arise where an award would be justified in relation to an appeal involving a small fine (brought perhaps by a wealthy individual or corporation) which is wholly without merit and which might have caused the respondent to incur substantial costs. The applicable principles are set out in section 15. If an award of costs is grossly disproportionate to the fine it may, depending on the circumstances, be objectionable as punitive in nature and may not be just and reasonable. 16. For the foregoing reasons, the respondent’s concession was rightly made and, even if the main appeal had not been successful, I would allow the appeal on costs and set aside the Judge’s award in favour of the prosecution. 17. The respondent does not oppose the appellant’s application for the costs of the appeal on costs.[17] I would accordingly order that the appellant have his costs of and occasioned by the costs appeal. And the appellant’s own costs be taxed in accordance with the Legal Aid Regulations. Mr Justice Tang PJ: 18. I agree with the judgment of Mr Justice French NPJ on the main appeal and with the judgment of Mr Justice Ribeiro PJ on the appeal as to costs. Mr Justice Fok PJ: 19. I agree with the judgment of Mr Justice French NPJ on the main appeal and with the judgment of Mr Justice Ribeiro PJ on the appeal as to costs. Mr Justice French NPJ: Introduction 20. Section 5(1) of the Hotel and Guesthouse Accommodation Ordinance (Cap 349) (“HGAO”) makes it an offence to “manage” a hotel or a guesthouse in respect of which neither a certificate of exemption nor a licence has been issued under the Ordinance. This appeal raises the general question of the proper construction of the term “manage”. It raises the particular question of whether a supervised front desk employee in a guesthouse business with responsibility for checking guests in and checking them out and some associated duties, can be regarded as managing the guesthouse within the meaning of section 5. 21. The Appellant was convicted, after a trial in the Kowloon City Magistrates’ Court, of an offence against section 5(1). The particulars of the charge were that on 12 September 2014 at 9/F Buckingham Building, 317-321 Nathan Road, Yau Ma Tei, Kowloon he did manage a guesthouse which did not possess a certificate of exemption or a licence required under section 5(2) of the HGAO, contrary to section 5(1) of the HGAO. 22. At the time of the alleged offence the Appellant was engaged in his employment as a “Front Office – Management Trainee” at the guesthouse. He worked under the supervision of another person designated as the “Front Desk Supervisor”. His duties as found by the Magistrate involved: 1. Processing check-in formalities for guests, including verification of their identity, collecting rental deposits, providing electronic room keys and relevant information. 2. Dealing with complaints (an activity not otherwise explained). 3. Responding to guests’ requests. 4. Processing check-out formalities, including collection of keys, inquiring about use of additional facilities by guests, inquiring from the room service section about the condition of the room, charging guests for services such as baggage storage and bottled water consumption, refunding the deposit and collecting extra rent for late check-outs, as well as recording the fees charged to the guests. The front desk supervisor was Miss Law Mei Kuen. She had been working at the guesthouse for four months. When the Appellant encountered any problem at work he would raise it with her and ask her about it. The Appellant had no discretion over the price charged for the rooms. 23. The Appellant was charged after he checked in an officer of the Office of the Licencing Authority who had presented himself as a pre-booked guest. The Appellant told the officer that a deposit of $800 was required for the room and received that amount from him. He was directed by another employee, Miss Ho Ka Hei, to place the deposit together with slips filled out by the officer in a sealed bag and place it in a drawer. 24. The guesthouse consisted of the 9th Floor of an office building divided into a reception area, office, restaurant and 21 rooms. The Appellant had been appointed under an employment letter to the position of Front Office – Management Trainee. The letter headed “Hotel Pandora Employment Letter” stated that “The Company Rules and Regulations will fully describe your job duties and benefits”. The relevant Company Rules and Regulations were not in evidence. The name of “the Company” did not appear although the letter, signed by the Appellant, was counter-signed by another person against the words “Accepted by the Company”. 25. The Appellant appealed to the Court of First Instance but his appeal was dismissed by Deputy High Court Judge S Chan on 4 March 2016. On 8 November 2016, the Appeal Committee of this Court granted leave to appeal on the following question of law: “Whether, upon a proper construction of section 5(1) of the Hotel and Guesthouse Accommodation Ordinance, to come within the meaning of ‘any person who … operates, keeps, manages or otherwise has control of … a guesthouse’, a person must have control over the hotel or guesthouse operation as a whole, and not merely be a functionary who is designated to carry out particular tasks of its day to day running.” Leave was also granted to appeal in relation to costs awarded against the Appellant in the Court of First Instance. That matter is dealt with in the separate judgment of Ribeiro PJ with which I respectfully agree. The legislative scheme 26. As was explained by this Court in Tri-View Ltd v HKSAR[18], the HGAO was enacted in 1991 following a number of accidents in substandard hotels and guesthouses. Its object, as appears from its long title, is “… to provide for the regulation, control and safety of hotel and guesthouse accommodation”. In particular, as appears from the Second Reading Speech of the Secretary for Home Affairs in 1991, the then Administration proposed a “licensing system be introduced for the purposes of imposing necessary safety requirements and standards for their operation and keeping a comprehensive register of such establishments.” The system was to be introduced on a phased basis. Initially the licensing scheme would cover tourist establishments, while certificates of exemption would be issued to others to be brought into the licensing scheme later. 27. The subject matter of the HGAO is defined in section 2: “‘hotel’ and ‘guesthouse’ mean any premises whose occupier, proprietor or tenant holds out that, to the extent of his available accommodation, he will provide sleeping accommodation for any person presenting himself who appears able and willing to pay a reasonable sum for the services and facilities provided and is in a fit state to be received.” The term “presenting himself” is defined non-exhaustively and includes persons presenting “by facsimile, letter, telegram, telephone or any other means”[19]. The definitions are significant. They describe the nature of the services which are sufficient and necessary to characterise the premises on which they are provided as a hotel or as a guesthouse. The nature of those services informs the construction of the term “manage” in section 5(1). The term is not to be construed in the abstract but by reference to its real world application in the HGAO. 28. Section 5 of the HGAO, under which the Appellant was charged, provides: “Restriction on operating hotel or guesthouse unless exempted or licensed (1) Any person who on any occasion operates, keeps, manages or otherwise has control of a hotel or a guesthouse in respect of which neither of the conditions indicated in subsection (2) has been satisfied commits an offence and is liable on conviction to a fine of $200,000 and to imprisonment for 2 years and to a fine of $20,000 for each day during which the offence continues. (2) The conditions referred to in subsection (1) are— (a) that a certificate of exemption has been issued under section 6 in respect of the hotel or the guesthouse and is for the time being in force; or (b) that a licence has been issued under section 8 in respect of the hotel or the guesthouse and is for the time being in force. (3) It shall not be a defence that a person charged with an offence under subsection (1) did not know that neither of the conditions indicated in subsection (2) had been satisfied.” 29. The words “any person” and “any occasion” appearing in section 5(1) indicate that it is not necessary, in order to prove the offence, to show that the defendant is managing the hotel or guesthouse on a permanent or continual basis. Section 5(1) would cover a person who is a shift manager, a temporary manager or relief manager. The question in each case is whether at some time and for however long or short a period, the defendant managed the hotel or guesthouse. 30. As appears from what follows, section 5(3) applies to someone who manages the premises for another and specifically for the person who should have obtained the relevant certificate or licence. The down the line manager can be convicted even if he or she had no idea that there was no certificate or licence. 31. Part III of the HGAO, comprising sections 6 and 7, deals with certificates of exemption. Such certificates are to be applied for and are issued under section 6. By section 6(3)(d) such a certificate shall: “authorize the person in whose name it is issued to operate, keep, manage or otherwise have control of a hotel or a guesthouse for a period of 12 months, or such lesser period as may be indicated therein.” That subsection indicates that it is the person in whose name the certificate is issued who will operate, keep, manage or otherwise have control of the hotel or guesthouse for which it is issued or at least have ultimate responsibility for its management. 32. Part IV of the HGAO deals with licences. Consistently with the phased regulation explained in the Second Reading Speech, it appears to impose a more rigorous regime than the certificates of exemption. As with the case of the certificate, section 8(5)(d) provides that a licence issued under section 8 authorises the person in whose name it is issued “to operate, keep, manage or otherwise have control” of the hotel or guesthouse to which it relates for a period of up to 84 months. Under section 8(3)(c) the issue of a licence may be refused on the ground that it appears: “that the operation, keeping, management and other control of the hotel or the guesthouse would not be under the continuous and personal supervision of the person to whom the licence is issued.” There is no equivalent provision in relation to certificates of exemption. Paragraph (c) implies that a person may “manage” a hotel or a guesthouse under the supervision of the licensee. Relevantly for present purposes, it means that a manager for the purposes of section 5 of the Ordinance does not have to be a person with ultimate control of the premises. 33. Where a licence is issued for a period of more than 36 months, it is the licence holder who, under section 8(5A)(c)(ii), must certify annually that the hotel or guesthouse has been operated, kept, managed or otherwise controlled by “the person holding the licence” in compliance with the conditions imposed under section 8(2)(a) on the licence. A similar obligation is imposed with respect to licence renewals for more than 36 months[20]. Nevertheless, that obligation is consistent with management being undertaken by an employee of the licensee under the supervision of the licensee. 34. Powers of inspection conferred on officers of the Authority extend to require production of any books or documents by any person “taking part in the operation or management of a hotel or a guesthouse”[21]. The term “taking part in …” covers a wider range of people than those who operate, keep, manage or otherwise have control. It is used in the context of a definition of the scope of the Authority’s investigative powers. It does not inform the answer to the constructional question before the Court. 35. Section 19 provides for the Secretary to give notice in writing of remedial directions and requires that the notice be served by registered post: “… upon the person being the operator, keeper, manager or otherwise having control of the hotel or the guesthouse…” (emphasis added) A similar reference to what might be called the “ultimate manager” appears in section 20(1)(a). 36. Reference should also be made to sections 21(1) and (3) which make it an offence for a person who on any occasion operates, keeps, manages or otherwise has control of a hotel or a guesthouse in respect of which a certificate of exemption or licence has been issued, to do so in contravention of a condition of the certificate or licence or in any premises other than those designated in the certificate or licence or under any name other than the name of the hotel or guesthouse indicated in the certificate or licence. By sections 21(2) and (4), where a condition of a certificate or licence is contravened, the holder of the certificate or licence is guilty of an offence unless he proves that he did not know and had no reason to suspect the existence of the circumstances giving rise to the contravention and could not by the exercise of reasonable supervision and reasonable diligence, have prevented those circumstances from arising. 37. Those provisions are consistent with the proposition that management for the purposes of the HGAO includes management by an employee or delegate of the licence holder, albeit under his personal supervision. However, section 21(5) provides: “Where an offence under subsection (1) or (3) is alleged to have been committed, evidence that a defendant did any act in connection with the operation, keeping, management or other control of a hotel or a guesthouse is, in the absence of evidence adduced by the defendant to the contrary, proof that the defendant operated, kept, managed or otherwise had control of a hotel or a guesthouse.” This rebuttable presumption is consistent with the view of management as involving the exercise of a degree of authority with respect to the premises. Indeed, it supports that construction. If merely doing acts in connection with the management of the hotel or guesthouse were sufficient to constitute management, the provision would be unnecessary. Features of the legislative scheme 38. In summary, the legislative scheme for the certification and licensing of hotels and guesthouses has the following features relevant to the construction of the term “manage”: 1. Its purpose is the regulation of hotels and guesthouses, using a certification and licensing regime, to ensure compliance with, fire and safety standards. 2. In furtherance of that purpose, the HGAO effectively prohibits anyone from managing a hotel or guesthouse in respect of which no certificate of exemption or licence has been issued. 3. While the licence holder is the person responsible for managing the licensed premises, they may be managed by someone else under his personal supervision. 4. The prohibition effected by section 5(1) therefore extends to management by persons who could and should have applied for a certificate of exemption or licence and to management by persons employed by them to manage the premises. 5. Persons who do acts in connection with the management of a hotel or a guesthouse do not, on that basis alone, manage the hotel or guesthouse. The decisions below 39. The Deputy Special Magistrate who convicted the Appellant found the facts as outlined earlier in these reasons. He found that the Appellant was responsible, at the time of the alleged offence, for dealing with the provision of accommodation — the main service of the guesthouse. He held that what the Appellant did was “taking an active part in the running of the business as a business something suggesting control.” His duties were neither menial nor routine. He played a gatekeeping role. He had “managerial control”. He did not know that the guesthouse was unlicensed but, by virtue of section 5(3), that was not a defence. The Deputy Special Magistrate convicted the Appellant of “managing a guesthouse without a certificate of exemption or a licence”. 40. On appeal, Deputy High Court Judge S Chan, found that while the Appellant was doing work of a menial or repetitive nature that did not mean that his work was not of a managerial character. He agreed with the Magistrate that it was possible to have a person exercise operational control at the front counter. The Magistrate had not interpreted the term “manage’ in an overly loose or broad way. Approach to construction 41. The question of law upon which the Appeal Committee granted leave to appeal is one of statutory construction. Although directed to the entire collocation “operates, keeps, manages or otherwise has control of” the focus must be upon the term “manages” which was said to describe the offending conduct of the Appellant. 42. The long-established approach to statutory construction in Hong Kong involves an integrated consideration of text, context and purpose[22]. That integrated exercise requires a consideration of the ordinary meaning of the words of the provision to be construed[23]. Both parties agree it may also be of assistance in construing a statutory provision to have regard to the construction of the same or similar words in pari materia in other statutes[24]. In this case it may be said, the references to other statutes were of limited assistance – each concerning a different subject matter and serving a variety of purposes. 43. Many statutory texts offer constructional choices in the sense that there is more than one way of reading them. In some cases the choice is between a broad reading and a narrow reading of a term which covers a range of conduct. Section 5 of the HGAO is a penal provision. It presents more than one arguable construction relevant to the question of law before the Court. A penal consequence may indicate that the narrower of two constructions is to be preferred[25]. There is, however, no hard and fast rule in this respect. As the Court said in HKSAR v Tse Yee Ping[26]: “The fact that a statute renders a specified activity criminal is not, however, a reason for giving the definition of the specified activity an artificially narrow meaning. It is merely a reason (although not always a decisive one) for giving the definition the narrower meaning, when it is on a fair reading, otherwise equally capable of having a wider or narrower meaning.” The text of the HGAO does not support a narrow reading of the term “manage”. It does not, however, require a reading so broad that it picks up conduct of a purely functional character which is not a manifestation of managerial authority. To characterise such conduct as “management” for the purposes of section 5(1) is to criminalise conduct that seems at best marginally relevant to the statutory purpose. 44. Beginning with the text, the word “manage”, according to the Oxford English Dictionary, relevantly means “to conduct or carry on (a war, a business, an undertaking, an operation) …”. It may also mean “to control and direct the affairs of (a household, institution, state etc)”. It appears in a particular context, namely the collocation “operates, keeps, manages or otherwise has control of”. The words “otherwise has control of” suggests that the other terms in the collocation are used as species of the genus “has control of”. A wider context is provided by those provisions of the HGAO previously mentioned which contemplate management as conduct of a kind done by the person to whom a certificate of exemption or a licence is issued, or a person doing similar things under the continuous and personal supervision of a licence holder. 45. The concept of “manage” according to its ordinary meaning read in the context of the HGAO and having regard to its purpose does not extend to a person who carries out essentially non-discretionary functions under the direct supervision of another on the premises. Like each of the terms in the collocation, it incorporates the idea of authority over that which is managed. The precise nature and content of that authority will vary according to the circumstances of the case. As a general proposition, a person manages a hotel or a guesthouse when he or she, in the exercise of an authority assumed by or conferred upon them, carries out the business or undertaking of the hotel. In the case of a small guesthouse that criterion may be satisfied by a single person who operates the checking in and checking out of guests, the receipt and recording of their payments and the maintenance of the accommodation at the appropriate standard. It does not matter whether that person is full-time, part-time, temporary, or a relief manager for the purposes of section 5 so long as they are exercising a degree of managerial authority in relation to the conduct of the hotel or guesthouse. In a colloquial sense, a manager is a person who can answer “yes” to the question “are you in charge here?” 46. That construction allows for the effective operation of the HGAO across a wide range of factual circumstances and ensures that, consistently with its broad language, it applies to the range of persons relevant to its regulatory purposes. 47. The offence created by section 5(1) is a serious one as reflected in the pecuniary and custodial penalties for which it provides. It should not be taken to apply where the evidence does not show more than that the defendant was processing guests in and out of the premises and fulfilling other functions of an essentially non-discretionary character and working under the immediate supervision of another employee of the business — who was also on the premises. 48. The evidence against the Appellant was simply insufficient to establish that he was managing the premises in the relevant sense. He carried out functions essential to the conduct of the guesthouse but was not shown to have been clothed with the authority necessary to characterise him as one who was managing the undertaking. That authority appears to have resided in his front office supervisor. The essential element of the offence with which the Appellant was charged was not made out. Conclusion 49. For the preceding reasons, the appeal should be allowed and the conviction of the Appellant set aside. 50. As to costs, I would make an order nisi that the Respondent pay the Appellant’s costs of this appeal, the appeal in HCMA 641/2015 and before the Magistrate in KCS 6648/2015 to be taxed if not agreed. The order nisi will become absolute in the absence of an application to vary this order, which application should be made by way of written submissions served on the other party and filed within 14 days of the date of this judgment. The other party may then serve and file any written submissions in response within 14 days thereafter. Chief Justice Ma: 51. For the above reasons, both appeals are accordingly allowed. The conviction of the Appellant is set aside. As to the costs of the main appeal, there will be an order nisi as set out in para 50 above. As to the costs of the appeal on costs, there will be an order as set out in para 17 above. Mr Johannes Chan, SC and Ms Margaret Ng, instructed by Lee & Chow, assigned by the Director of Legal Aid, for the Appellant Mr William Tam SC DDPP and Ivan Cheung PP, of the Department of Justice, for the Respondent [1] Mr Gary Chu, Deputy Special Magistrate, KCS 6648/2015 (15 September 2015). [2] HCMA 641/2015 (4 March 2016). [3] In translation. [4] Ribeiro, Tang and Fok PJJ, FAMC No 28/2016 (8 November 2016). [5] Cap 227. Section 113(1): “Any person aggrieved by any conviction, order or determination of a magistrate in respect of or in connection with any offence, who did not plead guilty or admit the truth of the information or complaint, may appeal from the conviction, order or determination, in manner hereinafter provided to a judge.” [6] Cap 492. Section 13: “Where a defendant unsuccessfully (a) appeals to a judge from any conviction, order or determination of a magistrate ... and the judge ... is satisfied that the appeal ... is or was without merit, the judge ... may order that costs be awarded to the prosecutor.” [7] As the Court of Appeal noted in HKSAR v Hon Ming Kong (re: costs) [2014] 3 HKLRD 470 at §20, the power to award costs in criminal cases is statutory and not inherent. [8] Para (a). [9] Para (c). [10] Paras (b), (d), (e) and (f). [11] [2014] 2 HKLRD 816 at [7], per Chu JA, citing R v Nottingham JJ ex p Fohmann (1987) 84 Cr App R 316 and R v Northallerton Magistrates’ Court, ex p Dove (1999) 163 JP 657. [12] I note in passing that under section 120 of the Magistrates Ordinance (Cap 227), in the converse situation where costs are ordered to be paid to a party to an appeal, the amount should likewise be fixed having regard to the recipient’s means. [13] Joint Case §21(5). [14] [2000] 1 Cr App R (S) 136. [15] At 140. [16] At 142. [17] Including the application for leave. [18] (2006) 9 HKCFAR 695 at 701 [13]. [19] HGAO, s 2. [20] HGAO, s 9(3A)(c)(ii). [21] HGAO, s 18(b). [22] HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at [12]–[13]. See also Vallejos v Commissioner of Registration (2013) 16 HKCFAR 45 at [77]–[78]. [23] HKSAR v Fugro Geotechnical Service Ltd (2014) 17 HKCFAR 755 at [22] per Fok PJ. [24] Medical Council of Hong Kong v Chow Siu Shek (2000) 3 HKCFAR 144 at 146 per Bokhary PJ. [25] Securities and Futures Commission v Pacific Sun Advisors Ltd (2015) 18 HKCFAR 138 at [48]‑[50]. [26] (2016) 19 HKCFAR 427 at [51].
Press Summary (English) Press Summary (Chinese) DCCC 480/2017 [2019] HKDC 450 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 480 OF 2017 ------------------------------- ------------------------------- --------------------------------------- REASONS FOR VERDICT --------------------------------------- CONTENTS INTRODUCTION 1. Charge 1 concerns a campaign known as “Occupy Central with Love and Peace” or “Let Love and Peace Occupy Central” launched by D1 to D3 in or about March 2013 (the “OCLP”). D1 to D3, in a press conference on 27th March 2013, together announced the commencement of the OCLP. Through the OCLP, D1 to D3 strived for their advocated form of universal suffrage in the election of the Chief Executive of the Hong Kong Special Administrative Region. 2. The OCLP, as announced in the said press conference, was a four stages campaign: signing of the covenant; the deliberation day; citizen authorization process, and finally, the act of civil disobedience. 3. It is the prosecution case that D1 to D3 had agreed to obstruct unlawfully public places and roads in or in the neighbourhood of Central. The proposed occupation of the public thoroughfares would be an unreasonable one and would amount to a common injury to the public or a significant section of the public, hence what was agreed was a conspiracy to commit public nuisance. 4. After the press conference in March 2013, following events relevant to Charge 1 took place:- (i) On 30th April 2013, D1 to D3 together appeared on a radio programme in which they talked about the OCLP; (ii) On 1st July 2013, at a public gathering at Chater Garden, D1 to D3 gave speeches about the campaign of OCLP and the civil disobedience to occupy Central; (iii) In a street forum on a day between June and October 2013, D3 gave a speech about the OCLP. 5. On 31st August 2014, the Standing Committee of the National People’s Congress (“NPCSC”) promulgated its decision on issues relating to the election of the Chief Executive of the HKSAR by universal suffrage in 2017 (“the Decision on 31st August”). 6. Following the Decision on 31st August, certain protestors held a number of protests against it. 7. By a Notification of Intention to Hold a Public Meeting (“Notification”) dated 18th September 2014,[1] D3 notified the Police that a public meeting would be held in two parks and a section of Chater Road in Central on 1st to 3rd October 2014. An insurance policy[2] was taken out and a meeting was held with the police on 25th September 2014.[3] In respect of Exhibit D3-1, the police issued a Letter of Prohibition.[4] As the events developed, the proposed public meeting on 1st to 3rd October did not take place. 8. On 22nd September 2014, the Hong Kong Federation of Students (“HKFS”) and Scholarism launched class boycotts against the Decision on 31 August. 9. It was against the above background that two notified public meetings were held at Tim Mei Avenue, Admiralty on 26th September 2014. In respect of these two public meetings, two Notifications were given to the police on 23rd September 2014, one by Mr. Lai Man Lok of Scholarism[5] and the other one by Mr. Wong Jun Ian of Civic Party.[6] The police issued two Letters of No Objection (“LONO”) for the two meetings[7] on 24th and 25th respectively. 10. On 26th September 2014, Mr. Wong Jun Ian submitted a Notificatio[8] to hold a public meeting at Tim Mei Avenue on 27th September 2014, which was a continuation of the public meeting on 26th September, i.e. the subject matter of Exhibits P150 and P151. The police issued a LONO[9] on the same day. 11. At about 5:30 p.m. on 26th September 2014, PW2 Senior Superintendent Wong Kei Wai ordered that the west side carriageway of Tim Mei Avenue be cordoned off for safety reasons. There is evidence that the east side carriageway of Tim Mei Avenue was also cordoned off later in the evening on the same day, i.e. at the junction of Tim Mei Avenue and Harcourt Road. 12. At about 10 p.m. on 26th September 2014, certain students at the public meeting at Tim Mei Avenue charged into the East Wing Forecourt of Central Government Offices (“CGO”) to “reclaim” the said forecourt, also known as “Civic Square” and some student leaders were arrested. Some protestors who had entered Civic Square occupied the flagstaff platform therein and refused to leave. 13. After midnight on 27th September 2014, the assembly at Tim Mei Avenue continued. A large number of people gather at Tim Mei Avenue. There were speakers on the stage with a green backdrop asking people present to stay and call upon more people to come to Tim Mei Avenue to support those students who had been arrested and those inside Civic Square who were about to be arrested. 14. The unchallenged evidence of Senior Superintendent Lam Hing Chuen (PW3) shows that at around 00:15 a.m., the southbound and northbound lanes of the carriageway of Tim Mei Avenue were fully occupied by people standing, so was the western pavement of Tim Mei Avenue adjacent to the Civic Square. The unchallenged evidence of Superintendent Yau Nai Keung (PW6) shows that at about 8:30 a.m., mills barriers were seen on both directions of the carriageway of Tim Mei Avenue. For the crowd in Tim Mei Avenue, there were more than 100 people during the course of the day, the number of people swelled during the day. However, when the night fell, there were less people. Traffic on both sides of Tim Mei Avenue was suspended on 27th September 2014. 15. On 27th September 2014, Mr. Wong Jun Ian further submitted a Notification[10] to hold a public meeting at Tim Mei Avenue on 28th September 2014, the proposed public meeting was a continuation of the public meeting on 26th September 2014. Superintendent Wong Kei Wai (PW2) issued a Letter of Prohibition[11] on 28th September 2014. 16. In the early hours of 28th September 2014, D1 to D3 appeared on the stage at Tim Mei Avenue and announced the launch of “Occupy Central” and the human and material resources of the OCLP would “come in completely”. 17. It is the prosecution case that at the public meeting at Tim Mei Avenue on 27th and 28th September 2014, D1 to D7, by the words they used when they spoke on the main stage:- (i) D1 to D7 had unlawfully incited the persons present at Tim Mei Avenue to cause a public nuisance to the public by unlawfully obstructing public places and roads at and in the neighbourhood of Tim Mei Avenue (Charge 2); (ii) D1 to D7 had unlawfully incited the persons present at Tim Mei Avenue to incite other persons to cause a public nuisance to the public by unlawfully obstructing public places and roads at and in the neighbourhood of Tim Mei Avenue (Charge 3). 18. Speeches made by D1 to D7 at the public meeting at Tim Mei Avenue were recorded on videos and produced as evidence. 19. It is the Prosecution case that the alleged conspiracy to commit public nuisance began in or about March 2013, continued in the year of 2014 and subsisted until 2nd December 2014 when D1 to D3 publicly announced their common intention to surrender to the police. 20. D8 was at Fenwick Pier Street at the material times of Charge 4 and Charge 5. 21. It is the Prosecution case against D8 that by the words D8 said to the crowd present at Fenwick Pier Street on 28th September 2014, D8 incited those present at Fenwick Pier Street to cause a public nuisance by urging those who were already on the carriageway of Fenwick Pier Street to stay on the road and urging other people standing on the nearby pavements to go and sit on the carriageway of Fenwick Pier Street. 22. It is the Prosecution case against D8 that by the words D8 said to the he crowd present at Fenwick Pier Street on 28th September 2014, he also incited the people present at Fenwick Pier Street to call up more people to come and obstruct the relevant section of Fenwick Pier Street. 23. The Prosecution case against D8 is that he directed the people present to move westward closer to the section of Fenwick Pier Street near Lung Wui Road and sit closer to the police cordon. The people present did as D8 directed. 24. What D8 said to the people present at Fenwick Pier Street, which forms the subject matters of complaint of Charge 4 and Charge 5, was recorded on videos by the police and produced as evidence. 25. The Prosecution called Mr. Tong Wai Tung (PW5), Assistant Divisional Officer of Fire Services Department to show how the obstruction of Fenwick Pier Street on 28th September 2014 had blocked a vehicle of the Fire Services Department at Kong Wan Fire Station from using Fenwick Pier Street to attend to a reported case of “Multiple Casualties Incident” at Admiralty Centre. 26. D9 was at Harcourt Road in the afternoon on 28th September 2014. 27. Charge 6 against D9 concerns what happened in the afternoon at Harcourt Road on 28th September 2014. 28. It is the Prosecution case that at about 3:45 p.m. on 28 September 2014, D9 urged the crowd of people gathering at the junction of Lung Wo Road and Fenwick Pier Street to go to Harcourt Road and conduct civil disobedience there. At around 4:03 p.m. on the same day, D9 was at the junction of Tim Mei Avenue and Harcourt Road. By then, a large crowd of protesters had walked onto the carriageway of Harcourt Road and the traffic thereon was obstructed as a result. D9 urged the crowd of people gathering on the southern pavement of Harcourt Road (outside Admiralty Centre) and those on the northern pavement of Harcourt Road (near Tim Mei Avenue) to walk across the carriageway, join together on the road and occupy all 6 carriageways of Harcourt Road, and to hold an assembly to support the students. 29. What D9 said in the afternoon of 28th September 2014 was recorded on videos and produced as evidence. 30. The appropriateness and the constitutionality of the offences of “Conspiracy to commit public nuisance” in the context of peaceful demonstration, “Incitement to commit public nuisance” and “Incitement to incite public nuisance” are challenged by the defence. 31. It is the case of the respective defendants what they said and did at the material times were lawful as they were exercising their right of free speech, right of assembly and right of demonstration, protected by the law and hence the essential ingredient of “not warranted by the law” could not be made out. 32. It is the case of the respective defendants that given what transpired at the material times, the relevant defendants could not have had the intention to cause public nuisance/to incite others present at Tim Mei Avenue to cause a public nuisance/to incite others to incite others present at Tim Mei Avenue to cause a public nuisance, hence, the relevant defendants did not have the mens rea required. 33. It is the case of the defence that no obstruction was caused by the words of the relevant defendants, and in any event, the Prosecution fails to prove that there was common injury to the public or a significant section of the public. 34. It is the defence case that, given that Tim Mei Road had been cordoned off by the police since 26th September 2014, it was impossible for the relevant defendants to commit Charge 2 and Charge 3. 35. It is the defence case that the use of tear gas by the police against the crowd gathered at Harcourt Road on 28th September 2014 was an improper use of force and it was the improper use of tear gas which caused the extensive and prolonged occupation of the roads and public places in Admiralty and Central afterwards. 36. It is the defence case that the OCLP initiated by D1 to D3 and what happened in late September 2014 and thereafter until 2nd December 2014 was a movement of Civil Disobedience. THE CHARGES 37. The following charges are preferred against D1 to D9:- WITNESSES 38. The Prosecution called 7 witnesses, they are:- (i) PW1 Senior Superintendent Tse Ming Yeung; (ii) PW2 Senior Superintendent Wong Kei Wai; (iii) PW3 Senior Superintendent Lam Hung Chuen; (iv) PW4 PC 9298 Lam Sau Chung; (v) PW5 Mr. Tong Wai Tung; (vi) PW6 Superintendent Yau Nai Keung; and (vii) PW7 Sergeant 58012 Kwok Si Wai. 39. After the Prosecution closed its case, I found that each of the defendants had a case to answer on the charge(s) against him/her. 40. D1 elected not to give evidence or call any witness. 41. D2 elected to give evidence. 6 witnesses testified in his defence, they are:- (i) DW1 Mr. Wu Chun Him; (ii) DW2 Mr. Leong Sze Chung James; (iii) DW3 Ms. Tsang Wai Kwan; (iv) DW4 Mr. Lo Wai Ming; (v) DW5 Cardinal Joseph Zen Ze Kiun; and (vi) DW6 Professor Lee Lap Fung Francis. 42. D3 elected not to give evidence or call any witness. 43. D4 elected not to give evidence or call any witness. 44. D5 elected not to give evidence or call any witness. 45. D6 elected not to give evidence but called one witness, namely:- (i) DW7 Mr. Au Kwok Kuen. 46. D7 elected not to give evidence or call any witness. 47. D8 elected not to give evidence or call any witness. 48. D9 elected not to give evidence or call any witness. GOOD CHARACTER DIRECTIONS 49. D1 to D7 and D9 are all persons with clear criminal record, as persons of good character, their propensity to commit the offence(s) under complaint is low. 50. D2, with his good character, is more likely to tell the truth in his evidence. ADMITTED FACTS & SECTION 65B STATEMENTS 51. At trial, admitted facts and statements were prepared and tendered as evidence under section 65C and section 65B of the Criminal Procedure Ordinance, Cap 221 respectively. 52. Facts contained in the documents titled Admitted Facts I and Formal Admission, dated 19th November 2018 and 5th December 2018 respectively, were agreed between the Prosecution and D1 to D3. 53. Facts contained in the document titled Admitted Facts II, dated 19th November 2018, were agreed between the Prosecution and D1 to D7. 54. Facts contained in the document titled Admitted Facts III, dated 19th November 2018, were agreed between the Prosecution and D8. Facts contained in the document titled Admitted Facts IV, dated 19th November 2018, were agreed between the Prosecution and D9. 55. A statement of Mr. Leong Sze Chung James (DW2) was admitted pursuant to section 65B of Cap 221. 56. A statement of Chief Superintendent Rupert T.A. Dover[12] was produced pursuant to section 65B of Cap 221. 57. A statement of Madam Liang Shuk Ling Tracy[13]and a statement of Mr. Lui Lok[14] each with a video footage were produced by D2 and D5 respectively pursuant to section 65B of Cap 221. 58. Three computer certificates respectively prepared by New World First Bus Services Limited, City Bus Limited and Kowloon Bus Co (1933) Limited[15] were produced to show the extent of the effect of the occupation had on the bus services during the occupation period. LEGAL PRINCIPLES Conspiracy 59. Charge 1 faced by D1 to D3 is a statutory conspiracy, not a common law one. By virtue of section 159A (1)(a) of the Crimes Ordinance, Cap 200, a person is guilty of conspiracy to commit an offence in question if he/she agrees with any other person or persons that a course of conduct shall be pursued which if the agreement is carried out in accordance with their intentions, will necessarily amount to or involve the commission of the offence in question. 60. The actus reus of a statutory conspiracy requires proof of the agreement between two or more persons, which, if carried out, would necessarily amount to or involve the commission of an offence in question. 61. The mens rea required for a statutory conspiracy is that the defendant had an intention to be a party to the agreement to do the unlawful act under complaint. The offence was complete once agreement was formed. Public Nuisance 62. A public nuisance is a common law offence. In R v Rimmington [2006] 1 AC 459, the House of Lords held that the offence has the following actus reus:- (a) Doing an act not warranted by law, or omitting to discharge a legal duty, and (b) The effect of such act or omission was to endanger the life, health, property or comfort of the public, or to obstruct the public in the exercise of rights common to everyone. 63. The House of Lords in Rimmington held that the requisite mens rea is that the accused knew, or ought to have known (because the means of knowledge were available to him) the consequence of what he did or omitted to do. 64. In the present case, it is immediately apparent from the Prosecution case that this case concerns positive act, i.e. obstruction of public places and roads, not omission to discharge a public duty. The effect under complaint is that the public would be obstructed in the exercise of rights common to everyone, i.e. the use of public carriageways. 65. The offence requires proof that the suffering of common injury by members of the public by interference with rights enjoyed by them as a class of the public. 66. It is a finding of fact whether the number of persons affected is sufficient to constitute a class of public. 67. The common law offence of public nuisance covers a wide and diverse range of activities, it was held in Rimmington that obstructing public highways is also covered. The Reasonableness Test 68. As this case concerns a citizen’s exercising of his/her right of free speech, right of assembly and right of demonstration, the “reasonableness test” as expounded by the Court of Final Appeal in Yeung May Wan v HKSAR (2005) 8 HKCFAR 137 comes into play. I have to consider and find whether the Prosecution can prove beyond reasonable doubt that the demonstrators’ conduct impinged unreasonably on the rights of others. 69. In Yeung May Wan, the relevant offences were public obstruction offences contrary to sections 4(28) and 4A of the Summary Offences Ordinance, Cap 28, these offences require proof that the obstruction was “without lawful authority or excuse”. The common law offence of public nuisance, the predicate offence for all charges in the present case, requires proof that the act which forms the actus reus is not warranted by law. 70. The Court of Final Appeal held in Yeung May Wan, at Para. 42 of the judgment, that a person who creates an obstruction could not be said to be acting “without lawful excuse” if his conduct involves a reasonable use of the highway or public places. 71. As for the application of the reasonableness test in any case of obstruction, the Court of Final Appeal held that it is essentially a question of fact and degree depending on all the circumstances, including the extent and duration of the obstruction, the time and place where the obstruction occurs, as well as the purpose for which the obstruction is done. 72. The Court of Final Appeal held in Yeung May Wan that, where the obstruction in question results from a peaceful demonstration, in applying the reasonableness test, the court should recognize the protection given by the Basic Law to the right to peaceful demonstration and give it substantial weight in the balancing exercise. In assessing the reasonableness of the obstruction, while the interests of those exercising their right of free passage along the highway obviously remain important, and while exercise of the right to demonstrate must not cause an obstruction exceeding the bounds of what is reasonable in the circumstances, such bounds must not be so narrowly defined as to devalue, or unduly impair the ability to exercise, the constitutional right (Para. 44 of the judgment). 73. In the present case, the locations of the obstructed places concern public places and roads in or in the neighbourhood of Central (Charge 1), public places and roads in or in the neighbourhood of Tim Mei Avenue (Charge 2 and Charge 3), the carriageway of Fenwick Pier Street (Charge 4 and Charge 5) and the carriageway of Harcourt Road (Charge 6). It is important to note that, in Yeung May Wan [2004] 3 HKLRD 797, the Court of Appeal held at 848 that:- “As one so often sees in newscasts from around the world, pavements or plazas outside government buildings or embassies are regularly used for protests, and the reason for the choice site is clear, namely, that they are the natural or most obvious sites for demonstrations, precisely because demonstrating “down the road” is less likely to bring home the intended message either to government or embassy officials or to passers-by.” 74. Hence, the court must recognise the right to express views extends to the manner in which the protestors wish to express their views as well as the location(s) where they wish to do so. Incitement to commit public nuisance and Incitement to incite public nuisance 75. In HKSAR v Jariabka Juraj [2017] 2 HKLRD 266 (CA), the Court of Appeal cited the judgment of Tuckey LJ in DPP v Armstrong [2000] Crim LR 379 as to the elements of the offence of incitement:- “63. Of the offence of incitement, Tuckey LJ said: The actus reus of the offence is the [incitement] by the defendant of another to do something which is a criminal offence. He must do so with the intention that if the other person does as he asks he will commit a criminal offence. That is the mens rea. On this analysis the intention of the person incited is entirely irrelevant. 64. He noted that the editors of Archbold asserted “to solicit another to commit a crime is indictable at common law, even though the solicitation or incitement is of no effect”. 65. Tuckey LJ went on to say: The nature of the offence of incitement is accurately defined in the draft Criminal Code produced by the Law Commission in their paper No 177 at Clause 47 which says: A person is guilty of incitement to commit an offence if: (a) He incites another to do or cause to be done an act or acts which, if done, will involve the commission of the offence or offences by the other; and (b) He intends or believes that the other, if he acts as incited, shall or will do so with the fault required for the offence or offences.” 76. In Young v Cassells (1914) 33 NZLR 852 (CA), it was held that “incite” means “to rouse; to stimulate; to urge or spur on; to stir up; to animate” in the ordinary meaning of the word. It was held in Invicta Plastics Ltd v Clare [1976] RTR (DC) that an incitement may involve the “suggestion”, “proposal” or “inducement” to commit an offence. 77. An incitement can be directed to the public at large, for example, by advertisement and newspaper article, as in the cases of Invicta Plastics Ltd v Clare (supra) and R v Most (1881) 7 QBD 244 (CCCR) respectively. It is necessary to prove that incitement was communicated to and received by the incitee(s). 78. It is a question of fact in each case whether the acts or words under complaint amount to an incitement to commit an offence. 79. The Prosecution is correct to point out that though the offences of “Incitement to commit a public nuisance” and “Incitement to incite public nuisance” both concern causing a public nuisance by the unlawful obstruction of public places and roads, “Incitement to commit a public nuisance” and “Incitement to incite public nuisance” are separate and difference offences with different ingredients. 80. The actus reus required for the offence of “Incitement to commit a public nuisance” is that the defendant incited a person (i.e. the incitee) to do an act which would involve the commission of the offence of “public nuisance”. 81. The mens rea required for the offence of “Incitement to commit a public nuisance” is that the defendant intended or believed that the incitee would do the act with the mens rea required for the offence of “public nuisance”. 82. The actus reus required for the offence of “Incitement to incite public nuisance” is that the defendant incited the incitee to do an act which would involve the commission of the offence of incitement, i.e. inciting a public nuisance. 83. The mens rea required for the offence of “Incitement to incite public nuisance” is that the defendant intended or believed that the incitee would do the act with the mens rea required for the offence of incitement, i.e. an intention to incite. ASSESSMENT OF EVIDENCE Section 65B Statements 84. No issue is taken as to the reliability and credibility of the statements admitted under section 65B, Cap 221. I have considered the contents of the statements and attach full weight to the contents contained therein. Live Witnesses PW1 Senior Superintendent Tse Ming Yeung 85. I accept the evidence of PW1 that at the material times, he was responsible for the processing of Notifications of Intention to Hold a Public meetings in Wanchai Division, which included the Wanchai Section of Harcourt Road, which stretched from Arsenal Street to Fenwick Pier Street. All Notifications of Intention to Hold Public Meeting pursuant to the Public Order Ordinance, Cap 245 within the purview of Wanchai Division would be delivered to PW1 for consideration and handling. After a Notification for the Intention to Hold a Public Meeting had been processed, a Letter of No Objection (“LONO”), with or without condition would be issued by the Police if the Police did not object to the holding of the proposed public meeting. All notifications and LONOs issued were properly recorded. 86. I accept as true and reliable the evidence given by PW1 as to how a Notice of Prohibition for the Holding of a Public Meeting under Cap. 245 would be issued by the police. Such notice must be given in writing and it must state the ground(s) of prohibition. The notice should be served on the organizer at least 48 hours before the holding of the meeting, provided that the Notification of the Intention to Hold a Public Meeting was handed in 7 working days prior to the intended public meeting. 87. I accept as true and reliable PW1’s evidence that for the period between 26th September and 11th December 2014, no notification was received for public meetings at either Fenwick Pier Street or the Wanchai section of Harcourt Road was received by the Police. PW2 Senior Superintendent Wong Kei Wai 88. I accept the evidence of PW2 that, as the Assistant District Commander of Central District of the Police between February 2014 and March 2016, one of PW2’s duties was to process Notifications of Intention to Hold Public Meeting in Central District. 89. I accept PW2’s evidence that irrespective of which police station a Notification of the Intention to Hold a Public Meeting in the Central District was given, it would be delivered to PW2 for consideration and processing. On the subject of the issuing of LONOs or Letters of Prohibitions for public meetings in the Central District, apart from PW2, the Hong Kong Island Headquarters also had the power to handle notifications concerning the Central District. 90. I accept also PW2’s evidence that after processing, the Police could issue a LONO, with or without conditions, or a Letter of Prohibition. For the notifications processed and LONOs issued, including the ones not handled by PW2 personally, e.g. the ones handled by the Hong Kong Island Headquarters, they were all recorded properly by the Police and the Central District would have copies of the same. 91. Given that the notifications processed and LONOs issued were properly recorded with copies sent to Central District, I am satisfied PW2 was in a position to say, and I accept as true and reliable his evidence that, between 26th September and 11th December 2014, PW2 had not received any Notification of the Intention to Hold a Public Meeting on the carriageways of the Central District section of Harcourt Road, Tim Mei Avenue and Lung Wui Road. Though not explicitly asked if PW2 had checked the records kept, PW2 would not have said he had not received any such notification if he had not checked the records kept by the Central District. Furthermore, in re-examination, PW2 was asked about his 4th witness statement[16], I accept as true and reliable PW2’s evidence that the main purpose of making that statement was to mention all the Notifications of the Intention to Hold a Public Meeting in relation to Harcourt Road, Tim Mei Avenue and Lung Wui Road that he had handled during the relevant period. 92. I accept as true and reliable PW2’s evidence that the purpose of making that statement was to identify all Notifications of the Intention to Hold a Public Meeting that he had handled during the relevant period in relation to Harcourt Road, Tim Mei Avenue and Lung Wui Road. 93. Questions were asked of PW2 about the firing of tear gas on 28th September 2014 and it was put to PW2 that it was the use of excessive force by the police in the evening on 28th September 2014 which incited people to occupy the public roads in Central or Admiralty. It is clear from PW2’s evidence that he was not at the scene at the time and it was not his decision to use tear gas on 28th September 2014. In my judgment, any view or comment made by PW2 in his evidence on this issue is only an opinion of PW2. I exclude from my consideration any opinion expressed by PW2 on the issues of the appropriateness of the force used by the police and causation of the occupation of public roads. 94. Mr. Choy SC for D9 suggested to PW2 that he deliberately concealed his presence at the scene on 26th September 2014 in his witness statement in which PW2 only accounted for the lack of LONO for the meeting on 28th September 2014. PW2 firmly denied the suggestion. In my judgment, if the absence of a LONO was the only matter that PW2 wanted to address in his witness statement, the fact that he did not mention in the statement he was present at the scene did not constitute deliberate concealment. PW2 was a witness in the trial of Joshua Wong, he could not possibly control what questions prosecuting counsel or defence counsel would ask of him and thus he could not conceal his presence at the scene if it was a relevant issue in that trial. 95. I accept PW2’s evidence that in processing a notification, PW2 would strike a balance between the organizer’s freedom of expression and the right of other members of the public that might be affected by the holding of the public meeting. 96. I accept the evidence of PW2 that he had been asked to go through the records to check in respect of the notifications to hold public meeting in Tim Mei Avenue. I accept PW2’s evidence as to his processing of the 2 notifications to hold public meeting, i.e. Exhibits P148 and P150 and his issuing of the two respective LONOs, i.e. Exhibits P1 and P2. 97. I accept the evidence of PW2 as to how he handled the Notification for Intention to Hold a Public Meeting at Tim Mei Avenue on 28th September 2014 submitted by Mr. Wong Jun Ian on 27th September 2014. 98. The proposed public meeting was obviously a continuation of the public meeting held on 27th September 2014. PW2’s reasons for issuing a Letter of Prohibition[17] were valid, as the public meeting on 27th September 2014 was an unlawful assembly, it would be wholly inappropriate to allow it to proceed on 28th September 2014. I accept PW2’s evidence that he had considered the factors of public safety and public order and he came to the conclusion that it was inappropriate for a public meeting to be held at Tim Mei Avenue on 28th September 2014. 99. PW2 impresses me as an honest and fair witness, he made no attempt to hide from the court things that he did not have a clear memory, thus he gave evidence that according to his recollection, he signed the Exhibit P152 during daytime on 28th September 2014. PW2 believed that the same had been delivered to Mr. Wong Jun Ian by his colleagues. 100. PW2 also frankly admitted that he had no independent recollection of handling the Notification of Intention to Hold a Public Meeting on 1st to 3rd October 2014 given by D3 on 18th September 2014[18] and the meeting between the Police and D3 on 25th September 2014 as recorded in the Notes of Meeting.[19] 101. I accept as true and reliable the evidence of PW2 as to what he saw and did while he was at Tim Mei Avenue between around 5:00 p.m. on 26th September and around 9:00 a.m. to 10:00 a.m. on 27th September 2014. When PW2 was at the western pavement at Tim Mei Avenue outside CGO shortly before 5:00 p.m. on 26th September 2014, there was a stage set up outside the Legislative Council and a public meeting was in progress with many people participating. 102. At 5:30 p.m., as many people were walking onto the carriageway of Tim Mei Avenue, PW2 decided to cordon off the western carriageway of Tim Mei Avenue for safety reasons. 103. I accept as true and reliable the evidence of PW2 as to how the demonstrators forced their way into the Civic Square (the Forecourt of the CGO) at around 10:00 p.m. on 26th September 2014, the deployment of police officers to handle the incident and what happened in the Civil Square afterwards. Some demonstrators managed to rush into the Civic Square and shut the metal gate. Some demonstrators climbed over the fences into the Civic Square. Around 150 demonstrators gathered around the flag-post, surrounded by police officers. At around 11:30 p.m. on 26th September, a decision was made by the Police to allow demonstrators in the Civil Square to leave but not many took the opportunity to leave. 104. In cross-examination, questions were asked of PW2 about the use of tear gas by the police on 28th September 2014 and it was put to PW2 that it was the excessive force by the Police that incited people to occupy the public carriageways. It is clear from PW2’s evidence that he was not involved in the decisions in relation to the firing of tear gas and its cessation, any comment or opinion PW2 expressed on the issue is not something I should take into consideration. PW3 Senior Superintendent Lam Hung Chuen 105. PW3 was the Assistant District Commander of Central District of the Police between May 2013 and October 2015. His evidence concerns what happened on 27th September 2014. 106. PW3 arrived at Tim Mei Avenue near Harcourt Road at around 00:15 a.m. on 27th September 2014. At that time, both the southbound and northbound carriageways of Tim Mei Avenue and the western pavement of Tim Mei Avenue adjacent to the Civic Square were fully packed by people standing. PW3 went to the CGO via Tin Wa Avenue. Inside the Civic Square, PW3 saw over 100 protestors sitting near the flag-post. As the situation was being handled by PW2, PW3 went to Tim Mei Avenue with a team of PTU officers. 107. PW3 and his officers encountered some 50 to 60 protestors at the junction of Tim Mei Avenue and Harcourt Road. The protestors raised their arms and blocked PW3 and his officers. After a standstill of 5 to 10 minutes, PW3 and his officers walked to Tim Wa Avenue and Tamar Park but they were blocked by 20 to 30 protestors raising both their arms. Warnings were given to the protestors but ignored. 108. PW3 then noticed some 20 to 30 people walked towards the glass door of the Legislative Council Building. PW3 instructed his officers to rush down to form a cordon line in front of the glass door. Then some 40 to 50 protestors gathered and lingered in front of the cordon line, some of the protestors pointed at and accused the Police. The number of protestors increased to approximately 100, PW3 called for reinforcement to enhance the cordon line. PW3 stayed there for around 30 minutes. Eventually, PW3 left the scene when the protestors began to disperse and only 10 to 20 remained. 109. PW3 later returned to CITIC Tower near junction of Lung Wui Road and Tim Mei Road. At that time, the western pavement of Tim Mei Avenue was fully packed of people who PW3 believed to protestors. PW3 noticed that a lot of mills barriers had been placed on the southbound and northbound carriageways of Tim Mei Avenue and the road near the west side and on top of the roundabout. There were mills barriers blocking the junction of Tim Mei Avenue and Lung Wui Road. 110. PW3 then received instructions to assist colleagues from the Crime Department of the Headquarters to escort an arrested person away from a stage outside the carpark entrance of the Legislative Council Building. When PW3 and his officers reached the carriageway of Tim Mei Avenue, they were blocked by some 50 to 60 people believed to be protestors. The protestors bumped against the officers forcefully and prevented PW3 and his officers from reaching the stage. 111. Eventually the Police escorted the arrested person to a police vehicle on the carriageway outside CITIC Tower at Lung Wui Road. A cordon line was formed in front of the police vehicle but the cordon line was charged by some 8 to 10 protestors. PW3 instructed his officers to stay and guard the cordon line to protect the police vehicle and the arrested person. 112. PW3 stayed until 6:30 a.m., when he was relieved of his duties by other officers. By the time PW3 left, there were around 1,000 persons remaining at the pavement and carriageway of Tim Mei Avenue. The place was less packed than before as it was almost dawn. 113. There was no cross examination of PW3 by the Defence. 114. PW3 gave his evidence in a straightforward manner and there is nothing unreasonable or inherently improbable in his evidence. I find PW3 an honest and reliable witness. PW4 PC 9298 Law Sau Chung 115. Sometime after 3 p.m. on 28th September 2014, PW4 was at Fenwick Pier Street near the back of the Academy for Performing Arts to assist in traffic control. PW4 marked his position on Exhibit P144 (PW86). 116. PW4 gave evidence that initially, the traffic condition there was normal on both the inbound and outbound lanes. PW4 carried on his observation of the traffic there for some 20 minutes, then he noticed that more than 100 people spilled out onto the carriageway, including the flyover, of Fenwick Pier Street from all directions. They all sat on the carriageway. PW4 tried to ask them to leave the carriageway and go back to the pavement but they did not comply. The number of persons sitting on the carriageway increased in time, PW4 advised them to leave the carriageway but they ignored him. PW4 then reported the situation to the consul and he was instructed to leave. During PW4’s stay at Fenwick Pier Street, he did not have any physical contact with the people there. 117. There was no cross examination by the Defence. 118. There is nothing inherently improbable in PW4’s evidence. I accept gave a true and accurate account of what he saw at Fenwick Pier Street in the afternoon of 28th September 2014. PW5 Mr. Tong Wai Tung 119. On 28th September 2014, PW5 was an Assistant Divisional Officer of the Fire Service Department attached to Kong Wan Fire Station at No 14 Harbour Road. 120. At 4:17 p.m. on 28th September 2014, the Fire Services Control Centre received a report of “Multiple Casualties Incident” which took place at Admiralty Centre. The report was routed to the nearest Fire Station, i.e. Kong Wan Fire Station. 121. PW5 and his colleagues boarded a “elevating platform” vehicle and set off from Kong Wan Fire Station. PW5 originally took the normal and most direct route, i.e. to go straight from the station along Harbour Road then onto Fenwick Pier Street and Harcourt Road. However, upon when PW5’s vehicle reached the Academy for Performing Arts near Fenwick Pier Street, PW5’s vehicle was blocked by large number of people gathering at Lung Wo Road and Fenwick Pier Street. There were more than 1,000 people on the carriageway and the road was completely blocked. At the time, both the siren and the alarm lights of his vehicle were turned on and PW5 and his colleagues asked the people blocking the carriageway to give way but the people on the carriageway ignored the plea by PW5 and his colleagues and refused to give way. PW5 was not sure whether Fenwick Pier Street was blocked as a result of instructions given by anyone. PW5 did not hear any words or incitement or instructions to block his vehicle. PW5 said what happened to his vehicle was consistent with the video footage in Exhibit P84. 122. As the normal and most direct route could not be taken, PW5’s vehicle made a U-turn at Harbour Road and travelled along Fleming Road, Lockhart Road, Fenwick Pier Street, Hennessy Road and Queensway. The vehicle then turned into eastbound Queensway upon reaching Lippo Centre. It entered Rodney Street and then Drake Street. PW5 and his colleagues arrived at Admiralty Centre at 4:31 p.m. and attended to 17 injured persons, i.e. 13 police officers and 4 civilians. 123. PW5 agreed that when he set off, he had not been informed that there was traffic obstruction at Fenwick Pier Street. 124. For the arrival time at Admiralty Centre, PW5 agreed that he had made no written record of the incident in his notebook. However, PW5 compiled an Incident Report on 19th October 2014[20], which contained the arrival time at Admiralty Centre. The arrival time was based on the information supplied to PW5 by the Fire Services Department. The departure time and arrival times of the vehicle used on 28th September 2014 were electronically recorded by the Fire Services Department. When PW5 set off from the station and when he arrived at Admiralty Centre he pressed a button on his vehicle and the times would be recorded. PW5 said there was nothing abnormal in the recording system on 28th September 2014. 125. There were different performance pledges for a built-up area and a dispersed and isolated area. Admiralty Centre would fall into the category of a built-up area. For a built-up area, the performance pledge was 6 minutes from the time the report was received. For a dispersed and isolated area, the performance pledge was 9 to 23 minutes. However, the performance did not strictly apply to a report of “Multiple Casualties Incident”. 126. In PW5’s experience, a fire engine from Kong Wan Fire Station should be able to reach Admiralty Centre within 6 minutes. 127. I find PW5 an honest and reliable witness. What he said happened at Fenwick Pier Street is consistent with the video footage in Exhibit P84. 128. I accept the evidence of PW5 that, in his experience, a fire engine from Kong Wan Station should be able to reach Admiralty Centre within 6 minutes via the normal and most direct route, i.e. to go straight from the station along Harbour Road then onto Fenwick Pier Street and Harcourt Road. The time estimate of 6 minutes is reasonable. I am aware of PW5’s evidence as to how he obtained the departure time and arrival time from the Fire Services Department. I am sure that PW5, who was onboard the fire engine throughout the journey to Admiralty Centre, was in a good position to tell whether the detour he had to take had taken him a longer than the normal time to arrive at Admiralty Centre without having to resort to any information in relation to the departure and arrival time provided by the Fire Services Department. I accept PW5’s evidence that on that day the detour had taken him a longer time at arrive at Admiralty Centre. 129. I do not find the comparison of the performance pledge of 6 minutes and the actual time spent by PW5 and his colleagues helpful in assessing the effect of the traffic obstruction at Fenwick Pier Street had on the fire services, as PW5 very fairly pointed out, the said performance pledge did not apply to the report of “Multiple Casualties Incident” at Admiralty Centre. PW6 Superintendent Yau Nai Keung 130. PW6 was a member of the Crime, Mass Processing Mechanism and Legal Support Working Group in September to December 2014, responsible for handling the Occupy Central Movement. 131. The evidence of PW6 concerns what happened between 27th September 2014 up to the firing of tear gas at around 6:00 p.m. on 28th September 2014 and what happened after the firing of tear gas up to the operation for the opening of the roads carried out by the Police on 11th December 2014. 132. Mr. Leung SC, in Para. 6 his reply submissions, made it clear that:- “… The Prosecution does not seek to prove the intention of D5 when making the incitements by reference to the events that happened after 28th September 2014. The evidence of Superintendent Yau Ngai-keung (PW6) as to the obstruction to public places and roads in Admiralty after 28th September 2014 was adduced to show the consequences of the offences which are relevant to the culpability of the accused.” 133. The evidence of PW6 as to what happened after 28th September 2014 should thus be read in the light of the above stated position taken by the Prosecution. 134. I accept the evidence of PW6 as to what he witnessed between 27th and 28th September 2014. There is nothing inherently improbable in the evidence of PW6, which he gave in a straightforward manner. The evidence of PW6 as to what happened at Harcourt Road before the firing of tear gas on 28th September 2014 is also consistent with the video footage in Exhibit P84 played to him. 135. When PW6 arrived at Admiralty at 8:30 a.m. on 27th September 2014, he saw over 100 protesters on the pavement and carriageway between Harcourt Road and Tim Mei Avenue. Further down Tim Mei Avenue there were over 1,000 protestors. There were layers of mills barriers on the pavement and carriageway. PW6 observed that the number of protestors grew beyond 1,000 during the day but the number dropped when the night fell. Traffic was suspended on both sides of Tim Mei Road on 27th September 2014. 136. PW6 witnessed a sweeping action by the uniformed police officers at CITIC footbridge at around dusk time on the 27th September 2014. Police officers equipped with shields pushed forward and forced more than 200 to 300 protestors to leave the footbridge. The protestors retreated to Rodney Street near Queensway Plaza and United Centre. The CITIC footbridge was closed by the Police in the afternoon on 28th September 2014. The closure of the footbridge, however, did not deter protesters from joining the protestors at Tim Mei Avenue. Large number of protestors proceeded to Tim Mei Avenue from the direction of the Academy of Performing Arts via the northern pavement of Harcourt Road. 137. At around 7 p.m. on 27th September 2014, the protestors at Tim Mei Avenue near junction of Harcourt Road behaved in a peaceful manner. As for the protestors at the green stage, in general they were not violent, except for the few who tried to climb over the fences into the Civic Square. According to PW6, when he left on 27th September 2014, vehicles could still travel on Harcourt Road. There were crowds on Tim Mei Avenue all the way to the roundabout at the north of Tim Mei Avenue, i.e. the roundabout outside CITIC Tower. 138. At around 11 a.m. on 28th September 2014, the traffic on both lanes of Tim Mei Avenue was still suspended. There were many mills barriers placed irregularly on Lung Wui Road. These mills barriers were not guarded by the police and they extended to the pavement and carriageway of Lung Wui Road. The traffic of Lung Wui Road was suspended. 139. The number of protestors in Admiralty swelled between 11:00 a.m. and 6:00 p.m. on 28th September 2014. The protestors did not listen to Police instructions and rushed out onto the carriageway of Harcourt Road. The Police tried but failed to stop the protestors from doing so. Eventually the entire Harcourt Road, from the elevated walkway over Harcourt Road to the Red Cross Headquarters, was blocked and occupied by the protestors. Both the eastbound and westbound carriageway of Harcourt Road were blocked by protestors standing on the carriageways. The video footage in Exhibit P84, shows the situation at 5:12 p.m. and 5:32 p.m. on 28th September 2014. 140. At around 6:00 p.m. on 28th September 2014, Police used tear gas against the protestors, but the vehicular access to Harcourt Road was still blocked by protestors, who started to place objects on the carriageway. Objects like plastic fences, mills barriers, garbage bins, bamboo sticks and road signs from construction sites were stacked at Harcourt Road at the east side of CITIC footbridge and on the Fenwick Pier Street down Harcourt Road at the bottom of the flyover near Harcourt Road. Upon the firing of tear gas cannisters, protestors who were on Tim Mei Avenue and Harcourt Road left the locations to avoid the effect of tear gas but people gathered very quickly again in those locations after the effect of each round of cannisters of tea gas was over. PW6 could not tell if the people who gathered again were the same people who had dispersed earlier on. 141. PW6 could not tell whether there was a substantial difference in number about the protestors at Tim Mei Avenue and Harcourt Road before and after the use of tear gas. 142. PW6 agreed that there were no tents and barricades on Harcourt Road before the firing of tear gas on the night of 28th September 2014. Tents and barricades were only set up by protestors on the carriageways of Tim Mei Avenue and Harcourt Road afterwards. 143. I accept the evidence of PW6 as to what he observed on 3rd-4th & 13th -14th October 2014 and 11th December 2014. 144. I would not set out in detail the evidence of PW6 which concerns what happened after 28th September 2014 in the light of the Prosecution’s position as to the relevance of the evidence of PW6 concerning what happened after 28th September 2014. The evidence of PW6 as to what happened after 28th September up to 11th December 2014 has been summarized in Para. 67 to 76 of the Prosecution Closing Submissions. I find the summary of the evidence a fair and accurate one. PW7 Sergeant 58012 Kwok Si Wai 145. The evidence of PW7 concerns how he delivered a Letter of Prohibition[21] on 29th September 2014. 146. I accept PW7’s evidence that he tried to look for D3 or Mr. Lo Wai Ming (DW4) at 8th Floor, Good Hope Building, No. 618 Nathan Road, i.e. the address of Hong Kong Professional Teachers’ Union, that was also the address provided in the Notification of the Intention to Hold a Public Meeting.[22] PW7 was told neither D3 nor Mr. Lo was there and PW7 was asked to go to 7th Floor of Chung Kiu Commercial Building. PW7 went to Chung Kiu Commercial Building and found out that the address was also used by Hong Kong Professional Teachers’ Union, neither D3 nor Mr. Lo were there, and PW7 was received by a Mr. Chan Hung. After some enquiries made with Mr. Chan and after Mr. Chan indicated he could receive the document on D3 and Mr. Lo’s behalf, PW7 delivered Exhibit P153 to Mr. Chan and obtained a written acknowledgement from the latter. 147. Issue was taken by counsel for D1 to D3 as to whether the service of the Letter of Prohibition complied with the legal requirements. In my judgment, as the proposed public meeting on 1st to 3rd October 2014 did not take place, the propriety or otherwise of the service of the Letter of Prohibition has no bearing on the important issues in the present case. It is clear from the evidence of D2, he was aware of the Letter of Prohibition when he was at Tim Mei Avenue, though he could not recall when he became aware of it. 148. The relevance of the Notification of Intention to Hold a Public Meeting on 1st to 3rd October 2014 goes to the issue of the extent of obstruction that the proposed meeting would cause and the intention of the Trio, i.e. whether they intention to cause a public nuisance by the launching of the OCLP after the notified public meeting. The non-compliance of the requirements of the service of Exhibit P153, in my judgment, is not relevant to the disputed issues in this case. 149. In any event, having heard the evidence of PW7 and all matters taken into consideration, I find PW7 an honest and reliable witness. There was no mala fide on the part of PW7 for not trying to contact D3 or Mr. Lo by phone or to look for D3 in Admiralty on 29 September 2014. I accept also PW7’s evidence that he was unaware of the deadline time of the service of Exhibit P153, i.e. before 3:00 p.m. on 29th September 2014. It is not in dispute that it was his first time to serve a Letter of Prohibition, it is therefore not surprising that he was not aware of the relevant legal requirements. In my judgment, there was no reason for deliberate non-compliance by the Police, and for that matter PW7, when a decision had been made by the Police not to allow the public meeting on 1st to 3rd October 2014 to go ahead. D2 Professor Chan Kin Man 150. D2’s evidence started on day 8 and finished on day 11. I shall not recite in detail every aspect of D2’s evidence, suffice to say I have considered his evidence and the exhibits referred to in his evidence. 151. The evidence of D2 in relation to his personal and professional background is not an issue in dispute. I accept also the evidence of D2 as to his views on and beliefs in genuine universal suffrage. In so accepting D2’s evidence, I express no view on the correctness or otherwise on D2’s views and beliefs on the subject. I accept as a matter of fact, D2 had those views and held the beliefs he stated in his evidence on the issue. 152. I also accept D2’s evidence as to his relationship with D1 and D3. He had been a friend of D3 for many years. He was not familiar with D1 at the beginning of 2013. In early 2013, D2 read about a newspaper article written by D1 and he did not agree totally with it. Later D1 named D2 and D3 as candidates for leading a occupy movement in Hong Kong. D2 then had a dialogue with D1 and D2 came to understand that civil disobedience was only the last resort of D1 in the campaign to strive for genuine universal suffrage. 153. D2 referred to a newspaper article he wrote entitled “May Love and Peace Occupy Central” published on 4th March 2013.[23] In that article, D2 stated, among other things, that participants in the movement should surrender themselves to the Police and there is no need to defend in Court. D2 explained why D1 to D3 entered pleas of not guilty to the charges in this case despite that they had surrendered to the Police. They consider the charges unreasonable and may have a long-term effect on the freedom of speech. D2’s view of the reasonableness of the charges and for that matter, the appropriateness of the charges and the constitutionality challenge to the charges are matter that I have to consider and deal with, but the reasons of D2 to defend his case in court is not something I shall take into consideration in assessing the credibility and reliability of his evidence. 154. D2 stressed in his evidence that the essence of civil disobedience was to raise public awareness on the unjust situations and hence the Trio (D1 to D3) insisted on peaceful and non-violent protest. On the evidence before me, I find that the D1 to D3 all along called for a peaceful and non-violent approach. 155. The Prosecution submitted that D2 agreed under cross-examination that there was a possibility of members of public participating in Occupy Central without signing the Letter of Intent[24] and there was still chance that some participants might get violent despite all the means and measures taken to reduce the chance of violence. 156. In my judgment, the fact that there was chance of outbreak of violence would not alter the nature of the movement that D1 to D3 advocated for. The chance outbreak of violence by some participants in the OCLP movement planned and agreed by D1 to D3 should not turn the movement into a non-peaceful or even violent one. By the same token, a fortuitous incident of football hooliganism in an otherwise properly organized football match should not affect the peaceful nature of the sport event. The “not warranted by law” element for the offence of public nuisance cannot be proved by the possibility that some participants might turn violent during the OCLP movement. 157. D2 said in his evidence that the essence of civil disobedience was to raise public awareness on the unjust situations. Whilst it is not for this court to find whether the situations were unjust, I am prepared to find that D1 to D3 saw the situations were unjust. 158. On the evidence before me, it is an understatement to say that the essence of civil disobedience that D1 to D3 was advocating, i.e. the OCLP, was to raise public awareness on their perceived unjust situations. The evidence shows that they D1 to D3 wanted to successfully fight for a form of election system that suited their criterion for genuine universal suffrage through the OCLP movement. D2 agreed under cross-examination, in Exhibit D2-11, the “OCLP Basic Tenets”, it is stated that “Should tens of thousands (In the Chinese version, it is “Several hundreds of thousands”) turn out to Occupy Central, the primary concern of the authorities would have to be different. Then it would not be a matter of arresting or dispersing the protestors. It would be a matter of moving towards introducing genuine universal suffrage, ….”. Under cross-examination by the Prosecution, D2 agreed that by announcing the inclusion of stage 4 of occupation in the Manifesto,[25] the chance of success for the first three stages would be increased. 159. I accept D2’s evidence as to how he met with D1 and D3 following Exhibit D2-3. D1 to D3 agreed that the movement would consist of 4 stages, namely (1) deliberation, (2) authorization, (3) negotiation and (4) occupation. I accept also D2’s evidence that it was agreed between D1 to D3 that civil disobedience by way of occupation would only take place after all legal ways had been exhausted. The civil disobedient that D1 to D3 had in mind was dependent on the results of negotiations with the Central or HKSAR Government. D2 gave evidence that at that stage, though D1 to D3 had a plan to occupy a place or places, their intention did not extend beyond Central, in fact they had a very specific location in mind, i.e. Chater Road. 160. I accept the evidence of D2 that on 27th March 2013, the Trio announced a Manifesto,[26] jointly prepared by the three, at Union Church, Kowloon. D2’s evidence as to what happened on 27th March 2017 is consistent with the video footages in Exhibits P96 and P98 to P100. It should be noted that D2 said under cross-examination, at that time in March 2017, i.e. at the time Exhibit D2-4 was published, it had been decided that occupation could be carried out in Central but the specific location and duration were yet to be discussed. D2’s evidence on the location where occupation would be carried out is different from his evidence given in chief that the Trio had a very specific location in mind, i.e. Chater Road, when they agreed on the four stages plan. In my judgment, given the long lapse of time since March 2014 and the minor nature of the aforesaid discrepancy, the discrepancy does not affect the credibility of D2. I accept the evidence of D2 that though he could not recall the exact time when the Trio first agreed to carry out occupation in the pedestrian precincts at Chater Road, the location must have been agreed by 1st July 2014. 161. I accept the evidence of D2 as to what was done in respect of stage 1 of the four phases, namely deliberation, from June 2013 to May 2014. A series of meetings called “Deliberation Days” were held to discuss the movement and the proposal(s) for constitutional reform. D2’s evidence on what was done in relation to the first “Deliberation Day” is consistent with the video footages in Exhibits P116 and P117. 162. I accept D2’s evidence that the second Deliberation Day consisted of a series of deliberation conferences held in different communities. I accept D2’s evidence that the 3,000 people who attended the third Deliberation Day had participated in the previous Deliberation Days. Proposals which met the international standard for universal suffrage were put forward for the participants to choose from. 163. I accept D2’s evidence as to what was done in relation to stage 2, i.e. the authorization stage. Between 20th and 29th June 2014, D1 to D3 organised a civil referendum. In short, the proposal from the “Alliance for Genuine Universal Suffrage” had support from 792,000 voters who voted in the referendum. The said proposal, together with a veto proposal were agreed upon following the holding of the referendum. 164. I accept D2’s evidence as to the position D1 to D3 took in respect of the occupation by students of part of Central on 1st July 2014. The students called the said occupation, which was short in duration, a rehearsal of Occupy Central. D1 to D3 disagreed with the students’ views but respected them. The Trio (“D1 to D3”) took the view that as Stage 3, i.e. negotiation was then not yet complete, they did not want to start civil disobedience. 165. I accept D2’s evidence as to the contact between the Trio and the Government on the issue of constitutional reform, what happened during the short meeting with and the response from the then Secretary for Administration Carrie Lam and Secretary Lau Kong Wah on 29th July 2014. The meeting yielded no result and there was no further meeting arranged. 166. I accept D2’s evidence that the Decision on 31st August represented the critical date on which they decided that Stage 4 of occupation would be implemented. I accept also D2’s evidence as to what D1 to D3 did after the promulgation of the Decision on 31st August, they held meetings and jointly took the view that there was no room for discussion any more. The three agreed that the Occupy Central Movement would be commenced on 1st October 2014. As a result, on 18th September 2014 they gave the Police a Notification of Intention to Hold a Public Meeting.[27] The proposed public meeting was to be held (i) at the pedestrian area of Chater Garden from 3:00 p.m. to 11:59 p.m. on 1st October 2014 and from 7 a.m. to 11:59 p.m. on 2nd October 2014; and (iii) at Chater Garden and Statute Square from 3:00 p.m. on 1st October 2014 to 11:59 p.m. on 3rd October 2014. Though D2 had not seen Exhibit D3-1 before it was submitted to the Police as D2 and D1 had left the logistics of filling in the Notification to D3, the Trio had agreed on the location, commencement date and approximate duration of occupation. They agreed to occupy the pedestrian precincts of Chater Road from 1st October 2014 for probably a few days. If a LONO was issued by the Police, they would start the civil disobedience part of the movement by staying behind after the notified meeting was over. 167. I accept D2’s that the Trio hoped that a LONO would be issued as the OCLP could attract more participants if the initial stage was a legal one. 168. I accept the evidence of D2 as to what D1 to D3 planned to do if no Letter of Prohibition was received from the Police. They would stay behind after the lawful part of the meeting, ie the notified meeting, as it would not be civil disobedience if one only stays for the notified period, ie everything is done lawfully. D1 to D3 had slightly different estimates as to the time of staying after the notified period. Whilst all three agreed that the occupation would end in a few days, their estimates of the time might not be the same. D2 thought that it might end on or around 5th October 2014, i.e. he planned to stay on for 3 more days after the notified meeting. The intention was to occupy the area as set out in D3-1. D1 to D3 shared similar views as to estimated number of people attending, it would be from several thousand to 10,000 people. D1 to D3 were confident that if the number of participants were as they estimated, they could keep the crowd within the pedestrian area of Chater Road. In my judgment, by “the pedestrian area of Chater Road”, D2 obviously meant the carriageway of Chater Road designated as pedestrian area during public holidays and not the pedestrian pavements on both sides of Chater Road. 169. I accept D2’s evidence that that the Trio had a discussion on the scenario where the Police issued a Letter of Prohibition to the proposed meeting. If the Police prohibited the meeting, people would still go the planned location, sit and remain there after the public holidays and commence civil disobedience there. 170. For Exhibit D2-9, i.e. “OCLP – Manual of Disobedience”, shown to D2 by Mr. Pang SC in cross-examination, D2 confirmed that a large part of the manual was devoted to arrest and what one should do before, during and after arrest. D2 said the whole idea was to be arrested within a fairly short time. In Exhibit D2-9, two scenarios were mentioned, firstly how the police would effect arrest of a protestor who would get on a police vehicle voluntarily; and secondly, how the Police would effect arrest of a protestor who insisted on staying. In the second scenario, the protestor would be lifted by a group of four officers each lifting one of the limbs of the protestor. In order words, the Trio appreciated that the arrest of just one protestor who was not willing to get on a police vehicle would require the joint effort of 4 police officers. 171. In Exhibit D2-10, i.e. the “Press Release by OCLP”, D2 stated it was hard to predict how long the occupy action will last but “recommend participants to prepare enough food for two or three days.” 172. In Exhibit D2-11, i.e. the “OCLP Basic Tenets”, it was stated therein that “Given the strength of the Hong Kong Police establishment, the government has the capacity to arrest all the protestors in a matter of one or two days without resorting to force.” 173. It should be noted that in the press conference on 27th March 2013, D2 said:- “If, by then, we sit on the road surface in Central, if he/she comes to arrest us, we won’t put up resistance; we’ll let (him/her) carry us on board a police vehicle, and then go to the police station. So, actually, if he/she is not going to let Central be paralysed, it is actually very easy (to do so). He/She just arrests us and that’ll do.”[28] 174. In the said press conference, D2 was obviously talking about the second scenario, not the first one. Given the Trio’s estimate that there would be several thousand to 10,000 people parting part in the OCLP, I reject D2’s evidence that there he thought/believed the arrest action to OCLP could be completed with ease, be it the occupation of Chater Road in Central or the one which actually took place at Tim Mei Avenue and the public places and roads in the neighbourhood of Tim Mei Avenue. 175. On the part of D5, there is no evidence that he was aware of the contents of Exhibit D2-9 or that he addressed the crowds at the material times on the basis the contents of D2-9. I do not see how Exhibits D2-9, D2-10 and D2-11 can assist D5, or other defendants jointly charged with the Trio under Charge 2 and Charge 3. 176. I accept D2’s evidence he was aware of the launch of class boycott by HKFS and Scholarism on 22 September 2014. 177. I accept also D2’s evidence that the Trio had a meeting with organizers of OCLP on 26th September 2014 and detailed arrangements for 1st October were discussed during the meeting. It was after the meeting that the Trio became aware of the storming of the CGO to reclaim Civic Square by some students and the arrest of some student leaders. Upon knowing that, it was still the intention of the Trio to continue with the notified meeting on 1st October 2014. 178. I accept D2’s evidence that on 27th September 2014, he received a call from D1 in the morning. D1 said the situation was urgent and asked D2 to accompany him to Admiralty. The two met up in Admiralty and went to the CGO together. On their way, youngsters urged them to launch Occupy Central immediately. D2 gave evidence that D1 to D3 later met up and they had a discussion in the afternoon. They considered whether the Occupy Central Movement should start early. They also considered whether the occupation starting at Tim Mei Avenue could extend to Harcourt Road and after some time, the Trio agreed that traffic at Harcourt Road was heavy and people going onto the carriageway might get hurt. The Trio agreed to first ask people to go to Tim Mei Avenue. Pausing here, it should be noted that, firstly, when D1 addressed the crowd in the presence of D2 on 27th September 2014 at Tim Mei Square, he said amongst other things:- “…..Let’s over-cram Admiralty first. Where shall (we) over-cram next? Central! We must be able to see the arrival of genuine universal suffrage in Hong Kong!”[29] In the said address, D1 asked for the over-cramming of Admiralty and Central, a geographical ambit much wider than the location of Tim Mei Avenue. Secondly, from what was discussed between D1 to D3, they were not talking about abandoning the OCLP movement and participate in another movement, ie the one started and run by the students. Thirdly, a decision had been made by D1 to D3, after their discussion in the afternoon, as to how the occupy movement should develop, i.e. the over-cramming of Admiralty, followed by Central. 179. I accept the evidence of D2 that, before the announcement of the launching of the OCLP, there was no misunderstanding between HKFS and the Trio following the discussion between student leaders of HKFS and the Trio. The video clips show that the announcement was made together with the students. No students had expressed their disagreement before D1 announced the launching of OCLP and those who raised their objections after the announcement were not representatives of HKFS. From the video footage in Exhibit P44, one can see that when D1 made the announcement, D2, D3, D6, D7 and the two student leaders of HKFS present in the meeting with the Trio were all on the stage. Both D6 and the two student leaders clapped in support of the announcement. As for D7, he echoed D1 by holding up his fist and chanting. 180. On the evidence before me, despite what D2 said in his evidence, i.e. he considered that the possibility of the suggested misunderstanding between the Trio and HKFS was not high but he would not rule it out, I am satisfied that there was no misunderstanding between the Trio and HKFS that an announcement of the commencement of Occupy Central would be made by the Trio after the meeting between the Trio and student leaders of HKFS. The crowds present at Tim Mei Avenue reacted negatively to the announcement. D6 and D7 tried to stop the departure in their addresses. What happened was a misjudgment of people’s response to the announcement of the commencement of Occupy Central, but not a misunderstanding between the Trio and HKFS as suggested, i.e. the Trio wanted to announce the commencement of Occupy Central whereas HKFS only wanted the support from OCLP in the form of PA system, marshals and volunteers. 181. I accept the evidence of D2 that when tear gas cannisters were discharged at Harcourt Road and smoke was coming towards Tim Mei Avenue, D2 asked D5 to instruct the protestors to leave immediately. The evidence of D2 in this aspect is consistent with what D5 said in the video footage.[30] 182. In my judgment, at the time when tear gas cannisters were being fired, it was only natural that people who had a role to play in the occupy movement would want the protestors to leave the site at Tim Mei Avenue. The evidence of D2 and Exhibit LL-1 could not impinge on the Prosecution case. In determining whether a defendant had the intent to cause a public nuisance, to incite a public nuisance or to incite others to cause one, how that defendant reacted to the firing of tear gas cannisters had little bearing on the issue of intent, whether the charge under consideration is conspiracy to cause a public nuisance, incitement to cause a public nuisance or incitement to incite a public nuisance. 183. The response of D2 to the use of tear gas on 28 September 2018 was consistent with what he said at the time the announcement was made as recorded in Exhibit P44. At the time, D2 addressed the people at Tim Mei Avenue that “If the police disperse us with tear gas, we, the rally, will make an announcement about the location where everyone, citizens who got scattered, can gather afterwards. We will tell everyone about these measures very soon.” The evidence of D2 in this respect and the video footage captured in Exhibit LL-1 do not, in my judgment, undermine the Prosecution case. 184. D2 did not agree to the suggestion put to him by the Prosecution that the Tim Mei Avenue movement was merely a modified plan of the original plan of OCLP. D2 considered the movement at Tim Mei Avenue a very thorough modification. On this issue, one should note what D1 said at the time of the announcement of the launch of Occupy Central and what he said immediately after.[31] 185. When D1 announced the launch of Occupy Central, he said, amongst other things “I am going to make a very important announcement here, which is a – an announcement that everybody has long been waiting for. Does everybody know what this announcement is? It is announced here and now that the ‘Occupy Central’ formally begins. ‘Occupy Central’ formally begins”.[32] In my judgment, what D1 meant by “an announcement that everybody has long been waiting for” must be the OCLP that the Trio had been planning since March 2013 and the one that they had planned to start on 1st October 2014. Had the Trio intended to abandon the OCLP and start another movement, D1 would not have said what he said in the announcement at 1:36 a.m. Furthermore, in a press interview held immediately after the announcement, D1 was asked if the launch of Occupy Central at Tim Mei Avenue involved any change in the plan, D1 said, amongst other things, that “Actually, the impact is not really that big, actually it concerns just some technical arrangement, for example, the management of manpower, the management of the sites, this is because our original plan was based on a certain point in Central, all the planned sketches are ready. And now we are going to make the changes, but I think this concerns only technical issues”.[33] The only reasonable inference to be drawn from what D1 said in Exhibit P124 is that the Trio did not see the announcement at 1:36 am as the launching of a different movement but that the launching of the movement that they had been planning was put forward from 1st October 2014 to 28th September 2014. 186. D2 gave evidence as why he considered the movement the Trio planned to commence on 1st October 2014 at Chater Road was different materially from the one they announced to commence at 1:36 a.m. on 28th September 2014. He identified four major areas of difference, ie (1) theme, (2) management and leadership, (3) organizational method and (4) composition of participants. 187. I shall not go onto the evidence of D2 on this topic in great length. It is clear to me that the planned movement at Chater Road and what took place at Tim Mei Avenue both involved occupation of public places and public roads. D1 to D3 all along considered the planned movement at Chater Road and the one at Tim Mei Avenue a civil disobedience. 188. On the theme of occupation, the withdrawal of the Decision on 31st August and the reboot of political reform were common in both the planned movement at Chater Road and what took place at Tim Mei Avenue. Whilst it is true that the themes such as reopening of the Civic Square and the request for the release of the arrested students were not in the planned movement to occupy Central, it should be noted that the class boycotts, the attempt to recapture Civic Square and the arrest of student leaders were all related one way or the other to the common themes of the withdrawal of the Decision on 31st August and the reboot of political reform. 189. On the question of management and leadership, D2 said the OCLP was there to support the students and that marshals of the OCLP were expected to follow the instructions of HKFS. D2 also said they were soon marginalized. However, given the evidence of D2 that the Trio only faded out from the movement after the Government’s negotiation with the students and that D2 still regarded the Trio as one of the major components of the movement at Tim Mei Avenue, it is difficult to see how the difference in management and leadership perceived by D2 can assist the case of D1 to D3. Charge 2 and Charge 3 concern words said by the relevant defendants between 27th and 28th September 2014, during the said period of time, the Government’s negotiation with the students had yet to take place; the Trio had yet to fade out; there was no marginalization of the Trio and the Trio still considered themselves one of the major components of the movement at Tim Mei Avenue. 190. As for Charge 1, from the totality of the evidence, it is fair to describe D1 to D3 as the important figures of the OCLP. I have explained in the preceding Para. why I found the Trio did not see the announcement at 1:36 a.m. on 28th September 2014 as the launching of a different movement. What they did at 1:36 a.m. was to put forward the launching of the movement that they had been planning was put forward from 1st October 2014 to 28th September 2014. 191. I accept the evidence of D2 as to the difference between HKFS and OCLP in terms of organization method. HKFS did not agree with OCLP’s way of disobedience to await arrest. Instead, a more proactive approach was adopted by HKFS, it kept mobilizing people to block off the major points of access. However, it should be noted that when D2 addressed the crowd shortly after the announcement, he still asked the participants to lie down, interlinked their arms, lighten their bodies so that the Police had to lift them up in order to effect arrest.[34] Later on during daytime on 28th September 2014, D2 addressed the crowd at Tim Mei Avenue and said amongst other things:- “Every er, voluntary picket (and) supporter of ‘Occupy Central with peace’……. We suggest each voluntary picket, citizen should adopt the effective protest approach adopted by the Hong Kong Federation of Students in these few days. If anyone sees that the main stage or the local commanders need our help, we are required to block certain important accesses, strongholds, or similar to what had happened just now, we are required to block some vehicles …”.[35] In the said address, D2 was asking the voluntary pickets and supporters of OCLP to adopt the protest approach of HKFS, i.e. the blocking of important points of access. The said address shows a modification of the original plan, not the cessation of it. 192. As Mr. Leung SC pointed out, D2 agreed under cross-examination that with the additional party of students running the movement, such difference would inevitably exist. Even if the Occupy Central Movement were to start in Central, certain organizational methods had to be adapted to suit the situation. 193. On composition of participants, D2 said OCLP contemplated participants comprising mostly of people who had signed the Letter of Intent, and 3,000 people had done so. He accepted, however, for the Occupy Movement to start on 1st October at Chater Road, the Trio did not intend to exclude participants with no Letter of Intent as OCLP did not have the power to stop them from joining. I accept D2’s evidence that for the several thousand people at Tim Mei Avenue at the time of the announcement, one could not be sure how many of them had signed a Letter of Intent and would accept OCLP’s way of resistance. D2 accepted that by launching the Occupy Central Movement, they were launching it to the whole of Hong Kong population and not only to those 3,000 who had signed the Letter of Intent. 194. On the issue of the composition of participants, in my judgment, it was the intention of D1 to D3 to merge the voluntary pickets and supporters of OCLP and the participants at Tim Mei Avenue by announcing the commencement of Occupy Central. The addresses they made after the announcement show that they wanted the movement to be expanded hence they asked more people to join the movement. In other words, they wanted to ride with the tide, i.e. to make the best use of the events that took place after the commencement of class boycotts, e.g. the storming of the Civic Square and arrest of student leaders. I accept that D1 to D2 wanted to support the student protestors and the arrested student leaders but it was obviously also their intention to make the best use of the development of the events. It should be noted that the two demands made by D1 at the time of the announcement were the withdrawal of the Decision on 31 August and a reboot of constitutional reform.[36] 195. D2 said in his evidence that the Trio had assumed that people would come to Tim Mei Avenue where the supporters in the number of several thousand to 10,000 could be accommodated or managed. D2’s evidence that the Trio had assumed that people would come to Tim Mei Avenue is at odd with what D1 said on 27th September 2014 when he address the crowd in the presence of D2 and D4 at Tim Mei Square:- “…..Let’s over-cram Admiralty first. Where shall (we) over-cram next? Central! We must be able to see the arrival of genuine universal suffrage in Hong Kong!”[37] On the same occasion, immediately after D1’s address, D4 said amongst other things:- “Hey, let’s go to occupy Admiralty now. Thank you, Benny. ‘Chung’ (transliteration), now it is the ‘Chung’ (transliteration) of ‘Kam Chung’ (transliteration) (the name of Admiralty in Chinese). Later, it will be the ‘Chung” (transliteration) of ‘Chung Wan’ (the name of Central in Chinese)…..”.[38] In my judgment, the above address of D1 shows that firstly, it was never the intention of D1 to D4 that the supporters joining the movement at Tim Mei Avenue would just come to Tim Mei Avenue; secondly, the Trio hoped that the number of supporters would be large enough to over-cram Admiralty, which is closer to Tim Mei Avenue, and then Central, thus the order “…..Let’s over-cram Admiralty first. Where shall (we) over-cram next? Central!” The evidence of D2 that by launching the Occupy Central Movement, they were launching it to the whole of Hong Kong population and not only those 3,000 who had signed the Letter of Intent should be read in this light. 196. D2 said in his evidence that the documentary film “Umbrella Diaries: The First Umbrella[39] is an accurate representation of the incident. In my judgment, in order to have a balanced view of the incident, one must not just look at Exhibit D2, which shows things mostly from the view point of the protestors. One can have a more balanced and accurate picture of the incident when both the video clips recorded by the police and the ones produced by the defence[40] are considered. 197. I have considered the evidence of D2 as to what happened in relation to the Occupy Movement and what the Trio did after 29th September 2014 up to the announcement by the Trio on 2nd December 2014 of their intention to surrender themselves on the following day. D2 testified that he was worried on 29th September 2014 because he was trapped in Tim Mei Avenue yet the Police did not arrest him, he was worried what the Government intended to do and wondered if the Government wanted to create a status of anarchy. In my judgment, D2 might be worried on 29th September 2014, given what happened on the previous night. But it could not be reasonably argued that the Police did not arrest D2 because of some ulterior motives. If the Police were to arrest D2 the day after the firing of tear gas, when emotions of protesters still went high, as evidenced by the increase in the numbers of protestors on Harcourt Road, such arrest action might just stir up further reaction that the Police did not want to see. There is simply no evidential basis to suggest the Government or the Police wanted to create a status of anarchy. In any event, the evidence of D2 as to the worry he had on 29th September 2014 has no bearing on the important issues in this case. 198. I accept the evidence of D2 to as to the contact between the Trio and Government officials like Carrie Lam and Yau Tang Wah sometime between 30th September and 2nd October 2014. D2 testified that Carrie Lam gave a negative reply about Chief Executive Leung Chun Ying and Commissioner of Police Tsang Wai Hung stepping down but her attitude about an independent investigation committee to investigate the use of tear gas was positive. As D2 said he could not recall details of the conversation with Carrie Lam, the evidential value of the Trio’s contact with Carrie Lam and Yau Tang Wah is limited, apart from showing that D1 to D3 were trying to establish a dialogue with the Government. 199. I accept D2’s evidence as to what took place between 2nd October and 21st October 2014. On 2nd October 2014, the Government announced that it would have a dialogue with the students. The students called off the dialogue after some triad members assaulted the protestors in Mongkok on 3rd October 2014. There was a discussion with Yau Tang Wah focusing on how to restore the dialogue between the Government and the students. The Government called off the dialogue when pan-democrats suggested an all-citizen resistance. It was only after some twists and turns that a dialogue between the Government and the students finally took place on 21st October 2014. In the said dialogue, the Government designated HKFS as counterpart for negotiation. 200. I accept the evidence of D2 that between 2nd October and 21st October 2014, OCLP took steps to re-open footbridges to CGO by talking to occupiers known as “villagers”, as there were different occupied areas known as “villages”. The villagers would not just accept instructions from OCLP and OCLP had to talk to the “village heads” of the villages in question. The evidence of D2 on this issue shows that D1 to D3 had little control over the protestors (“villagers”) between 2nd October and 21st October 2014. What happened between 2nd October and 21st October 2014 concerns Charge 1 but not Chares 2 to 6. As for Charge 1, in my judgment, whether D1 to D3 were in control of the Occupy Movement between 2nd October and 21st October 2014 is one thing, whether there was still a conspiracy to cause public nuisance, if one ever existed, is another matter. What is in dispute is if such conspiracy ever existed, and if so, when did it come into existence and when did it cease to exist. 201. I accept the evidence of D2 as to stance taken by the Trio as regard the dialogue between the Government and the students. D1 to D3 wanted the students to continue with the negotiation so that the occupation could come to an end after some result was achieved. D1 to D3 also took the view that if the students were of the view that negotiation would not come to any result, the occupiers should leave the scene. The Trio suggested a de facto referendum could be triggered by the resignation of Legislative Councillor Albert Ho. The voters, through the election held as a result, could reflect their opposition to the Decision on 31st August. The Occupy Movement could then be transformed into a community movement. The students disagreed to withdraw by the way the Trio suggested. In my judgment, despite the suggestion made to the students, D1 to D3 did not openly split with the students until 2nd December 2014. 202. I accept D2’s evidence that D1 and D2 stayed at the occupied area between 27th September and 27th October 2014. As for D3, he returned home due to his health conditions. D2 said in his evidence that on 28th October 2014, D1 and D2 decided to resume teaching and fade out from the movement. I accept that D1 and D2 decided to resume teaching on 28th October 2014. D2’s evidence in that regard is consistent with what D1 said in a press interview on 28th October 2014.[41] D2 said that the Trio decided to withdraw because they could no longer influence the students, who took the stance that they would not negotiate with the Government or withdraw from the occupied area. D2 said the Trio did not openly split with the students until a press conference held in early December 2014. It is obvious that the press conference in early December 2014 that D2 mentioned was the one held on 2nd December 2014.[42] 203. The evidence of D2 that D1 to D3 decided to fade out from the movement should be read in the light of the undisputed evidence that:- (1) On 3rd October 2014, D1 urged the protestors who had been protesting in Mongkok to join the occupy movement in Central;[43] (2) On 8th October 2014, in a press interview, D2 stated that the OCLP had provided support on the basic operation of the occupied area in Admiralty, and the OCLP would give advice to the student protestors at appropriate times. D2 also stated that OCLP hoped that the protestors would stay as far as possible until the dialogue with the Government yielded a result.[44] (3) On 10th October 2014, in a speech given at Harcourt Road, D1 stated that he would continue to stay in the occupied area together with other protestors.[45] (4) In the press interview on 28th October 2014,[46] D1 also stated that the workers of OCLP would still stay in the occupied area. He stated also that with some adaptation, they could have the capability to stay for a longer period of time. 204. In my judgement, the totality of the evidence shows that D1 to D3 did not withdraw from the movement until they announced their intention to withdraw from the movement on 2nd December 2014. DW1 Mr. Wu Chun Him 205. Mr. Wu was a demonstrator present at Tim Mei Avenue on 26th September 2014. He left the site before some students climbed into the Civic Square in the evening. Upon learning that some student leaders had been arrested, Mr. Wu returned to Tim Mei Avenue and stayed until the morning on 27th September 2014. He returned to Tim Mei Avenue until the morning on 28th September 2014. 206. At about 1:30 am on 28th September 2014, Mr. Wu was at the roundabout near CITIC Tower at the junction of Tim Mei Avenue and Lung Wui Road, Mr. Wu was shocked upon learning from other that D1 had announced the launching of the OCLP. He considered this as a change of events because the OCLP was not supposed to be launched at Tim Mei Avenue there and then. He described the reaction of the people at Tim Mei Avenue after D1’s announcement, some 70% people left within 1 or 2 hours. Mr. Wu left the site later. 207. Mr. Wu was at Harcourt Road outside Admiralty Centre in the evening on 28 September 2014. There he saw the carriageway was completely blocked by protestors. Mr. Wu stayed there until after the firing of tear gas. He then went into the Academy for Performing Arts and stayed there until the small hours of 29th September 2014. 208. Mr. Wu gave evidence that during the period from 29th September to mid-December 2014, he would occasionally return to Harcourt Road and spent the night there. He saw himself one of the occupiers on Harcourt Road but he considered his decision to participate in the occupy movement had not been affected by D1 to D3. 209. I find Mr. Wu an honest and reliable witness. I accept his evidence as to what he did and witnessed. For the evidence as to why Mr. Wu attended the public meeting at Tim Mei Avenue and took part in the occupation of Harcourt Road, Mr. Wu can speak for himself only, the evidence of Mr. Wu on this issue does not shed light on why others attended the public meeting at Tim Mei Avenue and took part in the occupation of Harcourt Road. DW2 Mr. Leong Sze Chung James 210. Mr. Leong’s evidence concerns the documentary entitled “Umbrella Diaries: The First Umbrella” produced as Exhibit D2-2. 211. Mr. Leong was one of the 4 executive directors of D2-2, most of the footages were shot by Mr. Leong. 212. Of the 64 minutes of D2-2 played in court, only about 4 minutes were filmed by others, i.e. the contributors whose names appear in the “Credit” section of D2-2.[47] The 64 minutes of D2-2 played in court came from an original footage of around 40 hours in length, excluding footages filmed by others. Background music was added to the footages. 213. When Mr. Leong did the editing of the original footage, he extracted parts that he considered sufficient to tell the story and to show the incident that was Mr. Leong considered interesting. 214. The final product, i.e. D2-2, is “almost all chronological”, except for 1 to 2 minutes for the events on 28 September 2014. 215. I accept the evidence of Mr. Leong as true and reliable. I accept that D2-2 was shot and produced in the way Mr. Leong told us. In considering D2-2, I shall exclude from my consideration any effect created by the background music. DW3 Ms. Tsang Wai Kwan 216. Ms. Tsang gave evidence as to why she took part in the occupation movement in question. 217. Ms. Tsang was aware of the civic movement of D1 to D3 but she had not decided to join the movement and had not signed the Letter of Intent. 218. Between 22nd and 25th September 2014, Ms. Tsang took part in the class boycott organised by students as she wanted to fight for genuine universal suffrage and to show her care for the students. 219. On 26th September 2014, upon learning that students were climbing into the Civic Square, Ms. Tsang went to and stayed at Tim Mei Avenue between around midnight and 10 a.m. on 27th September 2014. She went to Tim Mei Avenue to show her support for the students inside Civic Square who had not yet been released. 220. Ms. Tsang returned to Tim Mei Avenue at around midnight on 28th September 2014 and witnessed D1 announcing the commencement of the Occupy Central Movement at 1:30 a.m. The people present reacted differently to the announcement. Some were thrilled but some were angry. One student pointed at and accused D1 for his lateness in starting the movement. 221. Ms. Tsang did not consider herself a participant of OCLP because all along her understanding of OCLP was that the participants would “attend a banquet” on 1st October 2014 in Central. She felt the public meeting at she attended at Tim Mei Avenue was an extension of the student’s class boycott. 222. Ms. Tsang occasionally returned to the occupied area from 28th and 29th September 2014 and spent most of the nights there. She did not, however, consider herself taking part in OCLP for the same reasons stated in the preceding Para. 223. Ms. Tsang impressed me as an honest and reliable. However, I do not see how Ms. Tsang’s view of the effect of D1’s announcement and her reasons for taking part in the public meeting at Tim Mei Avenue on 27th and 28th September 2014 and her participation in the subsequent occupied movement can shed light on the important issues whether a conspiracy to cause a public nuisance among D1 to D3 existed at the time and whether there were incitements from the relevant defendants. DW4 Mr. Lo Wai Ming 224. Mr. Lo was the Deputy Chief Executive of the Hong Kong Professional Teachers’ Union at the material time in 2014. He had been assisting D3 in his work relating to OCLP since March 2013. D3 was the Chairman of the HKDDN and the registered address of HKDDN was at 8th Floor, Good Hope Building, No 168 Nathan Road. 225. I accept Mr. Lo’s evidence that, with the instructions given by D3, he helped D3 to prepare the Notification for Intention to Hold a Public Meeting on 1 to 3 October 2014[48] and submitted the same to Mongkok Police Station on 18th September 2014. 226. I accept also Mr. Lo’s evidence he arranged for a public liability insurance on behalf of HKDDN which covered 2 places in Central for the period from 1st to 3rd October 2014.[49] 227. Mr. Lo gave evidence that he told the police at the meeting on 24th September 2014 that he intended to pack up and leave Chater Garden and Statute Square by 11:59 p.m. on 3rd October 2014. At one point I was puzzled by Mr. Lo’s evidence on this issue given that he had been assisting D3 in his work relating the OCLP since 2013, but then the aforesaid evidence of Mr. Lo made more sense to me when understood in the light of his evidence that he was responsible for the lawful aspect of the OCLP, i.e. he was not to be involved in the part of OCLP that would involve breaking the law for the purpose of civil disobedience. 228. I accept Mr. Lo’s evidence that Mr. Chan Hung was an executive committee member if the Hong Kong Professional Teachers’ Union. It is Mr. Lo’s evidence that Mr. Chan Hung had never informed him of the Letter of Prohibition.[50] In my judgment, whether Mr. Lo was aware of the existence of Exhibit P153 is not crucial to the determination of the disputed issues in this case. As the events unfolded, the proposed public meeting on 1st to 3rd October 2014 did not take place. In my judgment the proof of the element “not warranted by law” required for the offence of public nuisance does not depends on the existence of Exhibit P153. 229. Given the fact that Mr. Lo had been assisting D3 in his work relating to the OCLP since 2013 and was aware of the OCLP advocated by D1 to D3, notwithstanding the fact that Mr. Lo was only responsible for the lawful aspect of the OCLP, e.g. the taking out of the insurance policy and attending meeting with the Police, I reject the evidence of Mr. Lo that he did not know D1 to D3 had the intention to stay beyond the notified period. The duration of the public meeting as stated in Exhibit D3-1 could not have been the duration of the meeting in Mr. Lo’s mind, Exhibit D3-1 only states the duration of the notified public meeting, clearly Mr. Lo knew that it was the intention of D1 to D3 to stay beyond the notified period. DW5 Cardinal Joseph Zen Ze Kiun 230. The evidence of Cardinal Joseph Zen was not challenged by the Prosecution and D4 to D9. 231. I accept as true and reliable Cardinal Zen’s evidence as to his participation in the OCLP movement and how he took part in the organization of a civil referendum, the putting forward of a “veto proposal”, the walkathon and his support for the class boycott organised by students in September 2014. 232. I accept as true and reliable what he testified he did and witnessed at Tim Mei Avenue between 27th and 29th September 2014. After D1 to D3 (“the Trio”) announced the commencement of the Occupy Central Movement at 1:33 a.m., Cardinal Zen saw students disagreeing with the announcement and accusing the Trio had hijacked the student movement. 233. I accept as true and reliable Cardinal Zen’s evidence as to his subsequent visits to the site after 29th September 2014 and his view of the development of the movement. Cardinal Zen was worried that no one was leading and no one was in control. 234. There is nothing to cause me to doubt the evidence of Cardinal Zen that the Trio impressed him as very devoted persons. DW6 Professor Lee Lap Fung Francis 235. Professor Lee gave evidence as an expert witness on matters relating to public survey. His professional qualifications are set out in detail in Exhibit D2-14. 236. Professor Lee, with the help of some student helpers, conducted two surveys during the occupation movement in October and November 2014. 237. The survey in October 2014 was conducted on 4th and 5th October 2014 and the one in November 2014 was conducted on 2nd November 2014. The survey methodology is set out in Exhibit D2-15. Exhibit D2-17 is the survey result of the October survey and Exhibit D2-19 is the survey result of the November survey, both titled “Basic Information about the Studies”. 238. In the questionnaires used in the two surveys enclosed in the section 65DA statement,[51] various reasons for participation in the occupation movement were provided and an interviewee was asked to weigh the importance of each of the reasons. Six options were given for each reason: “Very Important”, “Important”, “Average”, “Not Important”, “Very Unimportant” and “Don’t Know”. 239. For the October survey, a total of 969 interviewees were interviewed; for the November survey, 273 interviewees. The results of the two surveys show that 6.2% and 7.7% of the interviewees gave “Call from OC Trio” (D1 to D3) as a reason for their participation in the occupation movement in October and November 2014 respectively. In the survey questionnaires, these 6.2% and 7.7% indicated that they turned up in Admiralty because they considered the “Call from OC Trio” Very Important. 240. At the request of the Prosecution, Professor Lee also complied Exhibit D2-19. The first two Pg. of D2-19 are the same as Exhibit D2-17. Professor Lee stated that he would not consider an answer of “Don’t Know” to a question asked a valid answer for the reason that there might have been many reasons why people chose an answer of “Don’t Know”. Professor Lee also stated that if an interviewee chose “Average” as an answer to a relevant question, he would not see it as a reason for participation as the interviewee did not recognise it as important. 241. Professor Lee agreed that it is possible to include in his results interviewees who chose “Important” and “Very Important” for an item. 242. Professor Lee also agreed that if one were to gauge the ineffectiveness of a particular reason, one could look at the percentage of people choosing “Very Unimportant” for it, it would be another way to look at the data. 243. I find Professor Lee’s evidence as to how the two surveys were conducted in October and November 2014 honest and reliable. The only issue is what weight that the survey results should carry. 244. Given Professor Lee’s evidence that it is possible to include in his results interviewees who chose “Important” and “Very Important” for an item, the use of the answers “Very Important” but the answers “Important”, in my judgment, would give a very incomplete picture. The absence of the data of the interviewees who chose “Not Important” and “Very Unimportant” adds to the incompleteness of the picture. 245. Some of the reasons listed out in the questionnaires were also expressly or implicitly advocated by D1 to D3 in their speeches or the literature in relation to the OCLP placed before the court, e.g. “Fight for election”, “Fight for civil nomination”, “Protect Hong Kong’s liberty”, “Support and protect students” and “Empower the Movement”. In all the speeches made by D1 to D3 and the literature in relation to the OCLP, D1 to D3 never asked the public to take part in the OCLP or any occupation movement because of the call from the Trio. In my judgment, it cannot be reasonably argued that because the percentage of those who considered “Call from OC Trio” as a very important reason for their participation in the occupation movement was low, therefore at the material times, D1 to D3 did not have the intention or could not have the intention to conspire to cause a public nuisance. 246. Of the 14 reasons given in the questionnaires, they can be divided into two group. 247. The first 8 reasons, ie “Fight for election without filter”, “Fight for civil nomination”, “Protect Hong Kong’s liberty”, “The use of tear gas”, “Police’s handling of the protest”, “Support and protect students”, “Empower the movement” and “Experience mass protests”, concern the reasons that motivated an interviewee to participate in the movement. 248. The remaining 6 reasons, i.e. “Mobilized by friends”, “Mobilized by family members”, “Call from HKFS”, “Call from OC Trio” and “Call from other organizations” concern by whom/organization an interviewee was motivated to participate in the movement. 249. In my judgment, these two group of reasons cannot be compared like-for-like. The amalgamation of these 2 groups of conceptually different reasons yields an unintended result which, at best, cannot not reflect the true picture, and at worst, is a contortion of the truth. 250. The same analysis applies to the incitement charges and other defendants in as much as reliance is placed on the survey results. It should be noted that two of the 14 reasons, i.e. “Mobilized by friends” and “Mobilized by family relatives” are consistent with the case of Prosecution that there were incitements to cause public nuisance and incitements to incite public nuisance by the defendants. 251. In any event, when D1 to D3 announced the launch of the Occupy Central movement at 1:36 a.m. on 28th September 2014, they did not have the benefit of seeing the survey results of Professor Lee. What they intended to achieve and what they thought they could achieve was not based on the survey results. 252. For the above reasons, I attach no weight to the survey results. DW7 Mr. Au Kwok Kuen 253. Mr. Au was a full-time committee member of the Land Justice League, a local non-governmental organization. He was responsible for assisting Scholarism and HKFS to arrange for audio systems and stages used for the public meeting at Tim Mei Avenue on 26th September 2014. He also assisted in arranging civil classes at Tim Mei Avenue on that day. He walked around the vicinity of Tim Mei Avenue to see to it that the classes were run smoothly. 254. I accept Mr. Au’s evidence that the video footage in Exhibit D6-1 and the photographs in Exhibits D6-2A and D6-2B show the events that took place in the afternoon or evening of 26th September 2014. 255. I accept Mr. Au’s evidence that the northbound lane and southbound lane of Tim Mei Avenue were closed by the Police in the afternoon and in the evening of 26th September 2014. Mr. Au’s evidence about the closing of the northbound carriageway is consistent with the evidence of PW2, who ordered the closure of the northbound lane at 5:30 p.m. on 26th September 2014. It is not clear whether the Police closed the carriageways because of Mr. Au’s requests to Station Sergeant Ma but from the evidence of PW2 and Mr. Au, it is clear that the closure of the northbound and southbound lane of Tim Mei Road was due to safety reasons as many protestors had walked onto the carriageway of Tim Mei Avenue. CONSIDERATION CIVIL DISOBEDIENCE 256. It is the case of D1 to D3 that the OCLP that they planned was a civil disobedience movement. It is the case of all 9 defendants that the occupy movement that happened on 27th and 28th September 2014 and thereafter at and in the neighbourhood of Tim Mei Avenue was a civil disobedience movement. 257. My attention is drawn to the judgment of the Court of Final Appeal in Secretary for Justice v Wong Chi Fung (2018) 21 HKCFAR 34. At Para. 70 of the judgment, the Court of Final Appeal endorsed the definition of civil disobedience put forward by John Rawls in A Theory of Justice (Revised Edition 1999) at Pg. 320:- Civil disobedience is “a public, nonviolent, conscientious yet political act contrary to law usually done with the aim of bringing about a change in the law or policies of the government.” 258. My attention is also drawn to a passage of Lord Hoffmann’s judgment in R v Jones (Margaret) [2007] 1 AC 136. At Para. 89 of the judgment, Lord Hoffmann said:- “civil disobedience on conscientious grounds has a long and honourable history in this country.” In Wong Chi Fung, the Court of Final Appeal with Lord Hoffmann as the non-permanent judge accepted the concept of civil disobedience is equally recognized in Hong Kong. 259. D2 stressed in his evidence that the Trio had borne in mind the concept of proportionality throughout their civil disobedience movement, be it at the time they planned to launch at Chater Road in October 2014 or when they announced to launch Occupy Central at Tim Mei Avenue on 28th September 2014. 260. On the issue of proportionality, it should be noted that in Wong Chi Fung, the Court of Final Appeal further cited a passage of Lord Hoffmann’s judgment in R v Jones (Margaret), “[T]here are conventions which are generally accepted by the law-breakers on one side and the law enforcers on the other. The protestors behave with a sense of proportion and do not cause excessive damage or inconvenience. And they vouch the sincerity of their beliefs by accepting the penalties imposed by law.” 261. It should be noted that, much as the defendants rely on the concept of civil disobedience, civil disobedience does not constitute any defence to a criminal charge brought against a defendant. Even if a defendant is prosecuted for an offence committed in the course of civil disobedience, civil disobedience is not a defence in law. It is no function of the court to adjudicate the merits of the political cause behind the civil disobedience in the trial. The court should focus on the ingredients of the offence and the issues in dispute. 262. Dr McCoy SC submitted that the Trio’s purpose of “civil disobedience” was to cause a “civic awakening” and not to “paralyse” the city, as D2 stated in 2 articles published in Ming Pao[52] published on 4th March 2013 and 23rd August 2013 respectively. In both articles, D2 emphasized that it was not the objective of the movement to paralyze Central or the financial hub of the city. 263. In the press conference of 27th March 2013, when answering questions from the press, D2 said amongst other things:- “…many people feel that we want to paralyze Central….So, actually, if he/she is not going to let Central be paralyzed, it is actually very easy (to do so)/He/She just arrests us and that’ll do.”[53] 264. As Lord Hoffmann pointed out in R v Jones (Margaret) proportionality in the context of civil disobedience requires the protestors to behave with a sense of proportion and not to cause excessive damage or inconvenience. There is a big difference between (i) calling for restraint on the part of protestors that they should behave with a sense of proportion and not to cause excessive damage or inconvenience and (ii) that the obstruction caused should not lead to paralysis of a district or financial hub. For the offence of public nuisance, the obstruction caused does not have to be severe enough to paralyze a district or a financial hub, the test is a much lower threshold of reasonableness. 265. What D2 wrote in Exhibits D2-3, D2-5 and what he said in Exhibit P100 show that at the times he wrote the articles and spoke on the subject, he was harbouring the thought that any obstruction that the OCLP would cause would be proportionate as long as Central would not be paralyzed as a result. 266. In another article published in Ming Pao, D2 wrote:- “The interference caused by civil disobedience may be greater than regular demonstrations, and participants must think about the balance between that and the damage of other people’s rights. In this regard, in addition to adhering to the principle of non-violence (not subjecting law enforcers and opponents to physical and verbal attacks) and being willing to bear legal consequences to avoid harming the rule of law, civil disobedience must prove that its appeal is in accordance with the principle of justice, and that its influence on others must be ‘proportionate’ so as to avoid excessive interference.”[54] 267. What D2 wrote in mid-November 2014 about proportionality in civil disobedience was in line with what Lord Hoffmann said in R v Jones (Margaret). It should be noted, however, that Exhibit D2-12 was published on 18th November 2014, when in a fortnight’s time, the Trio were to announce the cessation of Occupy Central movement. 268. Under cross-examination, D2 said:- “To arouse public attention. But causing disruption was not the core of civil disobedience. The most important part was self-sacrifice. Because if you are merely causing disruption, you did not have to do it using civil disobedience. So it already implied that the disruption we caused had to be proportionate. By achieving the goal of arousing public attention, that would be very enough.” 269. D2 did not, however, explained what he meant by ‘proportionate’. He shed some light on what he meant by proportionate disruption when he admitted that once occupation of public road started, there must be inconvenience. He also accepted that Chater Road, as a major thoroughfare, was more busy than Tim Mei Avenue. D2 said the plan of the Trio was to occupy the designated pedestrian zone and hence the redirection of traffic would not be too serious. D2 further said that they, i.e. the Trio anticipated disruption but not the entire area being paralyzed. In my judgment, the articles written by D2 in relation to the OCLP,[55] what D2 said in Exhibit P100 and his evidence under cross-examination show that at the time when the Trio were considering the impact of the occupation would have on the traffic, even if they had in mind the concept of proportionality, the test/yardstick they used was whether the area would be paralyzed by the occupation. The test/yardstick they used was totally wrong. They planned to launch the Occupy Central movement at Chater Road and they considered the impact of the occupation would be acceptable as long as Central/the financial hub would not be paralyzed. In my judgment, that was not what Lord Hoffmann meant by the protestors should act with restraint and they should behave with a sense of proportion and not to cause excessive damage or inconvenience. It was only until 18 November 2014 that D2 spoke of proportionality in a way that was in line with Lord Hoffmann’s statement in R v Jones (Margaret) i.e. the influence on others must be proportionate, so as to avoid excessive inconvenience to others. In my judgment, the awakening came much too late. 270. It should be noted that whilst Wong Chi Fung was decided in 2018, i.e. after the occurrence of all the relevant events in the present case, R v Jones (Margaret) was decided in 2007. 271. On 27th and 28th September 2014, when D1 to D3 called for the over-cramming of Admiralty and Central and announced to launch the Occupy Central movement at Tim Mei Avenue, though the Trio emphasized that the purpose of the movement was fight for universal suffrage for the election of the Chief Executive of the HKSAR and the movement was a non-violent one, there was no sense of proportion in the scale of occupation in the plea to occupy CGO, Admiralty and Central. I am sure the Trio knew that excessive inconvenience would necessarily be caused to the general public as a result of the large scale occupation. 272. After 28th September 2014, the occupation movement continued until 11th December 2014. The Trio did not severe their participation in the movement until 2nd December 2014. As the movement continued, D1 to D3 were able to see the excessive obstruction and inconvenience caused by the occupation of public places and roads in and in the neighbourhood of Central. 273. As said, civil disobedience is not a defence to a criminal charge. 274. D2 and D3 submitted that it was all along the emphasis of the OCLP to take legal responsibility and allow oneself to be arrested. It was also submitted that at no stage was there ever an intention to prolong conflict with arresting authorities by engaging in confrontation or resistance (Para. 63 of D2 and D3’s Closing Submissions). 275. In my judgment, the way a participant should allow oneself to be arrested as advocated by the OCLP means that it would require several officers to lift one protestor and move him/her to a police vehicle to effect an arrest. Given the estimated number of participants for the movement at Chater Road and the number of people at Tim Mei Avenue on 27th and 28th September 2014, it would be wholly unrealistic to suggest that the Police would be able to arrest all the protestors within one or two days. Whilst the Trio did not have an intention to prolong conflict with arresting authorities by engaging in confrontation or resistance, they certainly intended to prolong the time required for the arrest action. The evidence of PW6 shows that it had taken the police almost 5 hours to arrest 242 people on 11th December 2014. 276. It is also unrealistic to suggest that “should tens of thousands turn out to Occupy Central, the primary concern of the authorities would not be a matter of arresting or dispersing the protestors. It would be a matter of moving towards introducing genuine universal suffrage and therefore removing any further need to cause disruption in accordance with the proportionality principle”. It is naïve to suggest that a concession to introduce the form of universal suffrage advocated by the Trio could be made by the government overnight with a click of fingers, it is equally naïve to suggest a mass protest of tens of thousands of people could be dispersed overnight even if a positive response were to come from the authorities. There is no basis to suggest that should tens of thousands turn out to Occupy Central, “that mass expression of resolve was anticipated to have been sufficient to achieve the desired result and therefore removing any further need to cause further disruption in accordance with the proportionality principle”. 277. D2 drew reference from the Anti-National Education protests and said the only foreseeable outcome of a tens of thousands turnout was that the government would accede to the wishes of the people. In my judgment, the reference to Anti-National Education protests is not an apt one. The subject matters of protests were entirely different. D2 had no basis to assume that the government’s reactions to the large turnout in the Anti-National Education protests and an equally large or even larger turnout in the protest in relation to the election of the Chief Executive of the HKSAR would be the same. 278. In considering the offences that concern this case, i.e. “Conspiracy to cause public nuisance”, “Incitement to cause a public nuisance” and “Incitement to incite a public nuisance”, which all concern the common law offence of public nuisance, I have to consider the application of the reasonableness test expounded in Yeung May Wan and in the context of obstruction caused as a result of a peaceful demonstration, I have to bear in the forefront of my mind the protection given by the Basic Law to the right to peaceful demonstration and give it substantial weight in the balancing exercise. APPROPRIATENESS AND CONSTITUTIONALITY OF THE CHARGES The Use of the Common Law offence of Public Nuisance Instead of Appropriate Statutory Offences 279. It is contended that the Prosecution should not bring charges of public nuisance when there are appropriate statutory offences that can be used against the defendants. D1 cited the judgment of Lord Hoffmann in R v Jones (Margaret) and submitted that prosecutors have conventions to follow in a case of civil disobedience and should behave with restraint. D1 also cited a passage of “Public Nuisance – A Critical Examination,” Cambridge Law Journal 48(1), March 1989, pp 55-84, at p 77 by J R Spencer. The learned author observed in the article that:- “…almost all the prosecutions for public nuisance in recent years seem to have taken place in one or two situations: first, where the defendant’s behaviour amounted to a statutory offence, typically punishable with a small penalty, and the prosecutor wanted a bigger or extra stick to beat him with, and secondly, where the defendant’s behaviour was not obviously criminal at all and the prosecutor think of nothing else to charge him with.” 280. The above criticisms of J R Spencer were endorsed by Lord Bingham in Rimmington at Para. 37 of the judgment. 281. It is trite law that the preferring of charges is the sole prerogative of the Prosecution. 282. The common law offence of public nuisance covers a diverse range of activities, including obstructing public highways. Other examples of public nuisance include carrying on an offensive trade, keeping a disorderly house, selling food unfit for human consumption and throwing fireworks about in the street. It is true that in many cases such conduct will now be covered by a specific statutory offence and where this is so a criminal prosecution should normally be brought for that rather than at common law. Having said that, one can easily contemplate a scenario where a charge of statutory offence cannot adequately reflect the serious consequences of the conduct under complaint, take the example of throwing of fireworks about in the street, if the act had led to catastrophic result to the public, a charge of public nuisance cannot be said to be inappropriate. Dr. McCoy SC, with his usual fairness, drew my attention to the recent decision in R v Stockli [2018] 1WLR 5609 (CA) the England Court of Appeal examined the statement in Rimmington that a charge of public nuisance should not be brought when other lesser crimes were available, but held that in the case before it, it was appropriate to bring the charge of public nuisance. 283. In my judgment, whether the prosecutor can “beat a convicted defendant with a bigger or extra stick” in the event of conviction depends on the findings of the court on the culpability of a convicted defendant. It cannot be said just because a charge of public nuisance is used, a prosecutor can use a bigger or extra stick to beat the defendant in the event of a conviction. 284. In my judgment, if the Prosecution takes the view that the case it seeks to prove reveals a level of culpability so high that calls for a punishment that no appropriate statutory offence can meet, the Prosecution is entitled to use the common law offence of public nuisance. Whether there is sufficient evidence to prove the charge and whether the facts proved revel the level of culpability that the Prosecution contends are of course different matters. Conspiracy to Cause a Public Nuisance 285. It is contended that the common law offence of public nuisance, when used in amalgamation with the concept of criminal conspiracy in cases concerning freedom of expression, freedom of speech, freedom of procession and freedom of demonstration, could have the effect of curtailing a free exercise of these rights. 286. In Rimmington, the House of Lords decided that the common law offence of public nuisance meets the requirement of certainty prescribed by the European Convention on Human Rights. 287. The offence of public nuisance requires proof that the obstruction under complaint is “not warranted by law”. In the context of the offence of public nuisance, applying the reasonableness test of Yeung May Wan, an obstruction could not be said to be “unwarranted by law” if it is a reasonable use of the highway or public places. 288. In Yeung May Wan, the Court of Final Appeal held that the application of the reasonableness test in any case of obstruction is essentially a question of fact and degree depending on all the circumstances, including the extent and duration of the obstruction, the time and place where the obstruction occurs, as well as the purpose for which the obstruction is done. 289. Relevant to the constitutional challenge in the present case is that in Yeung May Wan, the Court of Final Appeal held that, where the obstruction in question results from a peaceful demonstration, in applying the reasonableness test, the court should recognize the protection given by the Basic Law to the right to peaceful demonstration and give it substantial weight in the balancing exercise. In Para. 44 of the judgment, the Court of Final Appeal reckoned that in assessing the reasonableness of the obstruction, while the interests of those exercising their right of free passage along the highway obviously remain important, and while exercise of the right to demonstrate must not cause an obstruction exceeding the bounds of what is reasonable in the circumstances, such bounds must not be so narrowly defined as to devalue, or unduly impair the ability to exercise, the constitutional right. 290. In order words, if the obstruction in question is the result of a peaceful demonstration, the “not warranted by law” element requires the court to consider and recognise the protection given by the Basic Law to the right to peaceful demonstration and give it substantial weight in the balancing exercise. On the other hand, if the demonstration is not a peaceful one, then it would not have the protection given by the Basic Law. 291. In applying the reasonableness test to the facts of this case, I have borne in mind the protections given by the Basic Law to civil liberties. Article 27 of the Basic Law provides that: “Hong Kong residents shall have freedom of speech, of the press and of publication; freedom of association, of assembly, of procession and of demonstration; and the right and freedom to form and join trade unions, and to strike”. 292. I do not see how the offence of conspiracy to cause a public nuisance could have the undesirable effect of curtailing or suppressing civil disobedience at its formation stage or suppressing human rights as the defendants allege. If the agreement under complaint is one to occupy public roads by way of peaceful demonstration which would result in obstruction, if the Prosecution fails to prove the element of “not warranted by law”, the offence of conspiracy to cause a public nuisance cannot be made out. If the Prosecution is able to prove that if the agreement under complaint is carried out in accordance with the intentions of the defendants, the demonstration in question would result in obstruction which is unreasonable according to the reasonableness test, and hence not warranted by law, those who are in the agreement cannot complain if a charge of conspiracy to cause public nuisance is brought against them. The court in determining whether the obstruction is unreasonable, is required to have the protection given to peaceful demonstration given by the Basic Law in the forefront of its consideration. It cannot be reasonably argued that a charge of conspiracy to cause public nuisance would generate a chilling effect in society, and many legitimate speeches will be silenced. Incitement to Commit a Public Nuisance and Incitement to Incite a Public Nuisance 293. Mr. Pang SC for D5 argued that the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance” are unconstitutional. Mr. Pang SC’s complaints are:- (1) The offences are not sufficiently certain as to be “prescribed law” (Para. 89 to 106 of D5’s Closing Submissions) in that the offence of incitement is complete at the time of the incitement regardless of its actual effect and consequence whereas the offence of public nuisance is a result-based offence, whether an act under complaint amounts to a public nuisance is a question of fact contingent on all the known circumstances surrounding the act under complaint. It is impossible for an inciter to know or foresee at the time of the incitement that public nuisance was the subject of his communication with the incitee, thus both offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance” would offend the requirement for legal certainty as the inciter could not have regulated his conduct in advance to prevent criminal liability. (2) The offences violate the “principle of non-retroactivity” of criminal law (Para. 107 to 111 of D5’s Closing Submissions). It is submitted that in any case of the prosecution charging an incitement to commit public nuisance, the judge is required to look beyond the words uttered by the defendant and take into consideration what had actually occurred after the alleged incitement. In the present case, the Prosecution is asking the court to take into consideration the actual circumstances of the protests/demonstrations up until 11th December 2014, which is after the relevant period of the alleged incitement of D5, i.e. the period between 27th and 28th of September 2014, to determine the content and the scope of the incitement under complaint. Mr. Pang SC submitted that the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance” together with the use of the application of the evidence of what happened after the alleged incitement necessarily lead to the extension of criminal liability to cover conduct which is not criminal, contrary to the principle of non-retroactivity under Art 12 of the BOR. (3) As a result of (1) and (2), there would be a Draconian “chilling effect” on the exercise of the fundamental rights to freedom of speech and freedom of free expression (Para. 112 of D5’s Closing Submissions). “Incitement to commit public nuisance” and “Incitement to incite public nuisance.” 294. Mr. Dykes SC adopted Mr. Pang SC’s submissions and further submitted that the present case is the first time in Hong Kong that the offence of incitement to commit public nuisance and incitement to incite public nuisance had been used against factual situations concerning the exercise of a constitutional right to peaceful assembly. Courts should therefore be very slow to find that such a hybrid of a common law offence and inchoate offences would be precise enough to cover the new factual situation. 295. Mr. Choy SC for D9 took issue with the legality of the offences of causing public nuisance and incitement to commit public nuisance in Para. in 52 to 57 of D9’s Closing Submissions. 296. Mr. Choy SC submitted that to charge a defendant with the offence of causing public nuisance for the disruption caused in a mass demonstration when, in particular, the defendant is not a position to know all the circumstances, curtails citizens’ right to demonstrate and assembly in a vague and uncertain manner and fall foul of the “prescribed by law” requirement for not being formulated with any precision or clarity as regarded to the individual defendant’s conduct or knowledge. 297. Mr. Choy SC further submitted that the problem is compounded when the offence of public nuisance is used together with the inchoate offence of incitement. Mr. Choy SC questioned when the line be crossed between “inciting demonstration”, which is perfectly legal, as opposed to “inciting public nuisance.” A vaguely defined charge of incitement to commit public nuisance risks imposing a burden on organisers and participants of demonstration. 298. As said, the House of Lords held in Rimmington that the common law offence of public nuisance meets the requirement of certainty prescribed by the European Convention on Human Rights. The House of Lords held that the definition of the offence was clear, precise, adequate and based on a rational discernible principle so that it had the certainty and predictability to meet the requirement of legal certainty. It should be noted that the ruling in Rimmington was applied by the Court of Final Appeal in Leung Tsang Hung v Incorporated Owners of Kwok Wing House (2007) 10 HKCFAR 480, albeit in civil context. 299. In my judgment, there is no basis for the submission that the offence of public nuisance in the context of disruption caused in a mass demonstration would fall foul of the “prescribed by law” requirement. As stated before, whether an obstruction under complaint goes beyond what is reasonable and amounts to a public nuisance that involves a common injury, the reasonableness test as laid down in Yeung May Wan requires that all the circumstances of the obstruction, including the extent, duration, time, place and purpose of the obstruction should be taken into consideration. Hence, for the common law offence of public nuisance, if the obstruction under complaint was the result of a peaceful demonstration, in determining whether the obstruction under complaint was unreasonable, the entire circumstances of the obstruction, including the extent, duration, time, place and purpose of the obstruction should be taken into consideration. 300. It was held in Rimmington that the actus reus of the offence of public nuisance requires proof that:- (a) Doing an act not warranted by law, or omitting to discharge a legal duty; and (b) The effect of such act or omission was to endanger the life, health, property or comfort of the public, or to obstruct the public in the exercise of rights common to everyone 301. The actus reus required is the same whether the act under complaint is one of carrying on an offensive trade, keeping a disorderly house, selling food unfit for human consumption and throwing fireworks about in the street or obstructing public highway as result of demonstration. 302. It was held in Rimmington that the mens rea required for the offence of public nuisance requires proof that the accused knew, or ought to have known (because the means of knowledge were available to him) the consequence of what he did or omitted to do. In my judgment, there is nothing imprecise or unclear about the mens rea required for the offence of public nuisance in the context of obstruction resulted from a mass demonstration. 303. For the requirement that “the suffering must be the suffering of common injury by members of the public by interference with rights enjoyed by them as such”, the principle is trite and well settled. As Lord Bingham pointed out in Para. 6 of the judgment in Rimmington, interference with the use by members of the public of a public highway is the most typical example of common injury. In my judgment, there is nothing in the complaint that the use of the common law offence of public nuisance in for disruption or obstruction resulted from mass demonstration falls foul of “prescribed by law” requirement. 304. Mr. Leung SC is right to point out that for the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance”, the respective mental requirements do not depend on the circumstances of any subsequent obstruction actually caused by the incitee. The Prosecution made it clear that the evidence of PW6 as to what happened after 28th September 2014 was adduced to show the consequences of the offences which are relevant to the culpability of the accused. For the respective mental requirements for the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance”, I agree with Mr. Leung SC that the focus should be on the intention on the part of the incitor at the time when the incitement is made. It was held in HKSAR v Jariabka Juraj [2017] 2 HKLRD 266, the actual intention on the part of the incitee is entirely irrelevant. In my judgment, there is nothing in the complaint that the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance” offend the principle against retroactivity. 305. The actus reus and mens rea required for the offence of “Incitement to commit public nuisance” are that of the person charge, i.e. the incitor; so is the offence of “Incitement to incite public nuisance”. There is nothing uncertain about the elements of the offences. The legal principles on inchoate offence of incitement and the common law offence of public nuisance are well settled. The consideration of the offences of the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance” involves an application of some well settled legal principles. 306. I agree with the analysis of the Prosecution that, once the elements for the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance” are properly understood, the issue for the offence of “Incitement to commit public nuisance” is whether, at the time the incitement is made, the defendant (the incitor) intends or believes that if the incitee (B) does the act incited under the circumstances that are known or believed by the defendant (the incitor), the incitee (B) would commit the offence of public nuisance with the requisite mens rea. For the offence of “Incitement to incite public nuisance”, the issue is whether, at the time of the incitement, the defendant (the incitor) intends or believes that if the incitee (B) does the act incited under the circumstances that are known or believed by the defendant (the incitor), the incitee (B) would commit the offence of incitement with the requisite mens rea, namely, that the incitee (B) intended to incite another person or persons (C and so on), knowing that those other person(s), if they acted upon the incitee’s (B) incitement, would commit the offence of public nuisance. 307. Both arguments (1) and (2) of Mr. Pang SC fail for the reasons given, it follows that argument (3) also fails, the offences do not give rise to any “chilling effect” on the exercise of the fundamental rights to freedom of speech and freedom of peaceful assembly. 308. The constitutional challenge to the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance” thus fail for the above reasons. PROPORTIONALITY 309. Mr. Choy SC submitted that “a blanket criminalization of demonstrators who have participated in a demonstration that caused unreasonable obstruction is a disproportionate means to attempt to deal with the disruptive impact of a demonstration” (Para. 65 of D9’s Closing Submissions). D9 contends that a very onerous burden would be placed on individual demonstrators if a demonstration can cause no more than “reasonable” obstruction. 310. The Court of Final Appeal held in HKSAR v Chow Nok Hang (2013) 16 HKAFAR 837 that “38. Article 17 allows a line to be drawn between peaceful demonstrations (where, as noted above, full rein is given to freedom of expression) and conduct which disrupts or threatens to disrupt public order, as well as conduct which infringes the rights and freedoms of others… 39. Once a demonstrator becomes involved in violence or the threat of violence – somewhat artificially referred to as a “breach of the peace” – that demonstrator crosses the line separating constitutionally protected peaceful demonstration from unlawful activity which is subject to legal sanctions and constraints. The same applies where the demonstrator crosses the line by unlawfully interfering with the rights and freedom of others. ….. 42. Lines also have to be drawn where a demonstrator’s conduct impinges unacceptably upon rights of others (which may or may not be constitutionally protected rights) Such a line had to be drawn, for instance, in Yeung May Wan v HKSAR, where the Court had to decide whether the offence of obstructing a public place was properly applied so as to curtail a static, peaceful demonstration by a small group of Falun Gong protestors which obstructed only part of the pavement, on the basis that they were interfering with the rights of other users of the public highway…” 311. It is clear from the judgment of the Court of Final Appeal in Yeung May Wan and Chow Nok Hang that when the obstruction under complaint is the result of a demonstration, the “reasonableness” test only applies if the demonstration is a peaceful one which does not involve violence or threat of violence (“breach of the peace”). In the presence case, the Prosecution does not contest the demonstration that took place was a peaceful one. In fact it is because the demonstration in the present case was a peaceful one that necessitates the consideration and application of the reasonableness test. 312. In my judgment, the reasonableness test in Yeung May Wan has subsumed into it the consideration of proportionality. As said, it was held in Yeung May Wan that a person who creates an obstruction could not be said to be acting “without lawful excuse” if his conduct involves a reasonable use of the highway or public places. 313. As stated above, the Court of Final Appeal held that the application of the reasonableness test in any case of obstruction is essentially a question of fact and degree depending on all the circumstances, including the extent and duration of the obstruction, the time and place where the obstruction occurs, as well as the purpose for which the obstruction is done. 314. In Yeung May Wan, the Court of Final Appeal had not overlooked the impact that the “reasonableness” test might have on mass demonstrations. It was held that, where the obstruction under complaint resulted from a peaceful demonstration, in applying the reasonableness test, the court should recognize the protection given by the Basic Law to the right to peaceful demonstration and give it substantial weight in the balancing exercise. The Court of Final Appeal further held that in assessing the reasonableness of the obstruction, while the interests of those exercising their right of free passage along the highway obviously remain important, and while exercise of the right to demonstrate must not cause an obstruction exceeding the bounds of what is reasonable in the circumstances, such bounds must not be so narrowly defined as to devalue, or unduly impair the ability to exercise, the constitutional right. 315. I agree with the Prosecution’s submission in reply that the application of the reasonableness test for the offence of public nuisance in respect of obstruction of public roads is a proportionate response to protect the exercise of the constitutional right to peaceful demonstration by the protestors on one hand, and on the other hand, the rights and freedoms of other members of the public. The protection of these competing interests should be approached with care taken to balance the competing rights of the protestors and the rights of other members of the public, and when the obstruction under complaint is resulted from a peaceful demonstration, in applying the “reasonableness” test, the court should not define the bounds of reasonableness so narrowly as to devalue or unduly impair the ability to exercise the constitutional right. 316. In my judgment, a proper application of the reasonableness test allows the right balance be struck between the competing rights of the protestors in a peaceful demonstration and the rights of other members of the public without infringing the exercise of the constitutionally protected rights of the protestors. The offences of “Conspiracy to commit public nuisance”, “Incitement to commit public nuisance” and “Incitement to incite public nuisance” require proof of not only that the obstruction under complaint has exceeded the bounds of reasonableness such that it falls outside the ambit of constitutionally protected right, the offences also require proof of “a common injury to the public”. The deployment of these offences in a case of mass demonstration does not constitute any “blanket criminalization”. 317. In my judgement, the offences of “Conspiracy to commit public nuisance”, “Incitement to commit public nuisance” and “Incitement to incite public nuisance” satisfy the proportionality requirement for the restriction of the fundamental rights to freedom of speech and freedom of peaceful assembly. THE EFFECT OF CORDONING OFF TIM MEI AVENUE BY THE POLICE ON 26 SEPTEMBER 2014 318. The evidence of PW 2 shows that the west side (northbound) carriageway of Tim Mei Avenue was cordoned off at 5:30 p.m. on 26th September 2014. PW2 decided to cordon off the northbound carriageway because at that time there were many people walking onto the carriageway. PW2 gave evidence that he made the decision after he had considered the number of people, the public safety and public order. He considered that there was a need to close Tim Mei Avenue so that the public meeting could be conducted safely. 319. The evidence of DW7 Mr. Au shows that at around 8:30 p.m. on 26th September 2014, the southbound carriageway of Tim Mei Avenue was also cordoned off by the Police. 320. Submissions were made by the defence that, because of the cordoning off of Tim Mei Avenue by the Police:- (i) The relevant defendant(s) could not have incited public nuisance by obstructing the vehicular passage of the carriageways of Tim Mei Avenue; (ii) The occupation of the carriageways by the participants in the public meetings at Tim Mei Avenue was lawful; (iii) The relevant defendant(s) who allegedly incited the crowds at Tim Mei Avenue to (i) commit public nuisance and (ii) incite others to commit public nuisance could not have the requisite mens rea to cause unreasonable obstruction “not warranted by law”; (iv) As the alleged incitements in respect of Charge 2 and Charge 3 were made between 27th and 28th September 2014, i.e. at a time when Tim Mei Avenue had already been cordoned off by the Police, it was impossible that the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance” could have been committed by the relevant defendant(s). 321. The Prosecution submitted that the closure of the carriageways of Tim Mei Avenue has no bearing on the important issues in this case. Mr. Leung SC submitted that the evidence shows that the defendants were asking the people to go to Tim Mei Avenue through the alternative route from the Academy for Performing Arts, Wanchai. The fact that the Police decided to block the passages from Admiralty to Tim Mei Avenue was no reason or excuse for any member of the public to go through the relevant carriageways of Harcourt Road to Tim Mei Avenue and stay thereon. 322. In my judgment, the fact that the Police cordoned off the carriageways of Tim Mei Avenue on 26th September 2014 should give no reason or excuse for any member of the public to stay on the carriageways indefinitely. The closure of the carriageways of Tim Mei Avenue should not be taken as a carte blanche for the protestors to occupy the carriageways indefinitely. PW2 cordoned off the carriageways to enable the public meeting to carry on safely, not indefinitely. It should be noted that, on the issue of the intended duration of the public meeting under complaint, Mr. Pang SC submitted that as the Prosecution had clarified, upon the request of D5, the words “prolonged or indefinite period of time” referred to in the Opening mean an “undetermined period of time in the future”, the Prosecution’s Closing Submissions are an unexplained departure from the further particulars provided as the Prosecution continually referred to a prolonged period (e.g. Para. 262, 277, 301). He submitted that the Prosecution should be held to the particulars supplied on the basis of which the evidence was heard. My record shows that at the hearing on 19th November 2018, Mr. Bruce SC accepted what Mr. Pang said on the issue, Mr. Bruce SC took the view that the difference between prolonged and indefinite carry with it the same meaning, an undetermined time in the future. 323. However, with the closure of the carriageways of Tim Mei Avenue, those who incited the people at Tim Mei Avenue to walk onto and stay on the roads after the closure might think that they were not inciting people to cause unreasonable obstruction to the road as long as it remained cordoned off by the Police. For the same reasons, those who incited the people present at Tim Mei Avenue to incite other people to come and occupy Tim Mei Avenue might think that they were not inciting the people at Tim Mei Avenue to incite others to cause unreasonable obstruction as long as Tim Mei Avenue remained cordoned off by the Police. 324. In short, the relevant defendant(s) who incited the people at Tim Mei Avenue on 27th and 28th September 2014 to (i) occupy the carriageways of Tim Mei Avenue and/or (ii) to incite other people to occupy the carriageways of Tim Mei Avenue might think that they were not inciting anyone present to cause any unreasonable obstruction to the road or inciting those present at Tim Mei Avenue to incite others to cause any unreasonable obstruction to the road. 325. In the circumstances, the closure of the carriageways of Tim Mei Avenue by the Police has a bearing on the issue whether the relevant defendant(s) knew or believed that the incitement(s) under complaint would result in a public nuisance, i.e. unreasonable obstruction of the carriageways of Tim Mei Avenue amounting to a suffering of common injury by members of the public. 326. It follows from the above analysis that D1 to D7 should have the benefit of doubt in so far as the pleas made by them to the people at Tim Mei Avenue to (i) occupy the carriageways of Tim Mei Avenue and (ii) incite other people to occupy the carriageways of Tim Mei Avenue are concerned. 327. Despite my findings of the effect that the closure of Tim Mei Avenue by the Police on 27th and 28th September 2014 had on Charge 2 and Charge 3, in my judgment, Charge 2 and Charge 3 do not fail. 328. It is useful to recapitulate the particulars of Charge 2 and Charge 3:- The particulars of Charge 2 “Incitement to commit public nuisance” allege that D1 to D7, “between the 27th and 28th of September, 2014, in Hong Kong, unlawfully incited persons present at Tim Mei Avenue, Admiralty to cause a public nuisance to the public by unlawfully obstructing public places and roads at and in the neighbourhood of Tim Mei Avenue.” (Emphasis added) The particulars of Charge 3 “Incitement to incite public nuisance” allege that D1 to D7, “between the 27th and 28th of September, 2014, at Tim Mei Avenue, Admiralty, in Hong Kong, unlawfully incited persons at Tim Mei Avenue, Admiralty, to incite other persons to cause a public nuisance to the public by unlawfully obstructing public places and roads at and in the neighbourhood of Tim Mei Avenue.” (Emphasis added) 329. It is immediately clear from the reading of the particulars of Charge 2 and Charge 3 that the complaints of the charges are that the relevant defendants incited persons present at Tim Mei Avenue to (i) cause a public puissance to the public (Charge 2); (ii) incite other persons to cause a public puissance to the public (Charge 3), by unlawfully obstructing public places and roads at and in the neighbourhood of Tim Mei Avenue (Charge 2 and Charge 3). 330. The evidence shows that amongst the pleas made by D1 to D7 between the 27th and 28th of September 2014, apart from pleas to occupy Tim Mei Avenue and pleas to ask/invite others to do the same, there were also pleas to occupy Admiralty, Central and Wanchai and pleas to ask/invite others to occupy Admiralty, Central and Wanchai. The following pleas to occupy Admiralty, Central and Wanchai clearly went beyond the scope of occupying Tim Mei Avenue which had been cordoned off since 26th September 2014:- (1) In the afternoon on 27th September 2014, when D6 addressed the people at Tim Mei Avenue, he said: “now we hope that everybody, yes, can really ask more people to come out and over-cram Tim Mei Avenue, also, it is hoped that the nearby carriageways will also be over-crammed, and (we) continued to extend the area of our civil disobedience.” (Emphasis added)[56] (2) On 27th September 2014, when D1 addressed the crowd in the presence of D2, D4 and D6 at Tim Mei Square, he said, amongst other things, “…..Let’s over-cram Admiralty first. Where shall (we) over-cram next? Central! We must be able to see the arrival of genuine universal suffrage in Hong Kong!” (Emphasis added)[57] (3) On the same occasion, immediately after D1’s address, D4 echoed D1 (“Benny”) and said in the presence of D1, D2 and D6: “Hey, let’s go to occupy Admiralty now. Thank you, Benny. ‘Chung’ (transliteration), now it is the ‘Chung’ (transliteration) of ‘Kam Chung’ (transliteration) (the name of Admiralty in Chinese). Later, it will be the ‘Chung” (transliteration) of ‘Chung Wan’ (the name of Central in Chinese)…..” and “We hope to over-cramming Tim Mei Avenue, right? Over-cram Tim Mei Avenue! Over-cram Tim Mei Avenue! Over-cram Tim Mei Avenue! Over-cram Admiralty! Over-cram Admiralty! Over-cram Admiralty! Good! ….” (Emphasis added)[58] (4) In the evening on 27th September 2014, in the presence of D4 and D7, D6 addressed the people at Tim Mei Avenue and said: “Right, well, let me tell you a piece of good news rather than always listening to those things that (make you feel) heavy (-hearted). Well, we, now on the bridge outside Admiralty, it is still full of people all over the footbridge (there). They are in the direction of our side, coming towards us here, right. Our (activity) today, should be the largest Civil Disobedience (activity) over the years, certainly, the number of people, we have not yet got the largest of people, but (we) hope that the members of the public would not remain at our current achievements (attained), let us keep asking more people to come, over-cramming Admiralty.” “Well! As what we have seen, actually, there are huge crowds of people everywhere. Well! We, starting from Harcourt Road to the entire Tim Mei Avenue, all were (packed with) people, the open space of the Legislative Council is also full of people, so everybody keeps asking people to come!” (Emphasis added)[59] (5) In the afternoon on 28th September 2014, when D7 spoke on the main stage at Tim Mei Avenue in the presence of D1, D2 and D5 (on stage) and D3 (below stage), he said, amongst other things, “….However, we know that roughly more than ten thousand citizens have blocked the road (from) the Admiralty Centre, the whole of KFC to Rodney Street. At the same time, at the Hong Kong Academy ‘Centre’ (sic) of Performing Arts, Wanchai, there are ten thousand people. Adding (them) up, (we’ve) got a total of about thirty thousand people here. Here, I am appealing to all the citizens in Hong Kong to come together – no matter whether (you) can enter the area or not, go to Admiralty, go to Wan Chai. Let us fill up the whole of Admiralty (and) Wan Chai. Together, (we) can besiege the whole of Central Government Offices from the side of Rodney Street, from the side of the Hong Kong Academy ‘Centre” (sic) of Performing Arts. We demand --……Let us fill up Admiralty and Wan Chai together….” (Emphasis added)[60] It should be noted that the locations mentioned by D7 in the said address, i.e. Admiralty Centre, the Central Government Offices, Rodney Street, the Academy for Performing Arts are all located in the neighbourhood of Tim Mei Avenue. (6) In the afternoon on 28th September 2014, when D5 and D7 addressed the people at Tim Mei Avenue in the presence of D1 and D3, D5 and D7 said amongst other things: “D5: ……Our –our friends who gather round here to watch have already over-crammed two more roads. D7: Hurray! D5: (The crowd) has already over-crammed two roads (outside) the Hong Kong Academy for Performing Arts. D7: And more citizens are coming successively. (Let’s) continue to occupy the roads together. D5: We are asking more friends to come here, (we are asking) more friends to come here. Let’s over-cram Admiralty. (Let’s) over-cram Wan Chai. (Let’s) over-cram Central. D7: Friends on that side, keep it up. We know that some friends there have already prepared to dash out to occupy the road(s). Let’s cheer them on, shall we? D5: Comrades, let’s over-cram Wan Chai together. (Let’s) over-cram Admiralty. (Let’s) over-cram Central.…..” (Emphasis added)[61] (7) Not long afterwards, D5 and D7 spoke on the main stage at Tim Mei Avenue in the presence of D1 and D2 (on stage) and D3 (below stage) and said: “D7: We have got news that…. On the side of Harcourt Road.. many friends have already gone out onto the road! (They) have already occupied the road! Hurray! D5: Occupy the road! D7: Occupy the road! D5: Occupy the road! D7: Occupy the road! D5: Occupy the road! D7: Occupy the road! D5: Hurray! D7: Hurray! D5: Hurray! D7: Hurray!” (Emphasis added)[62] (8) Shortly afterwards, D5 and D7 spoke on the main stage at Tim Mei Avenue in the presence of D3 (below stage) and said: “D5: Our picket has just made a report that the 6 carriageways of H-Harcourt Road bound for Central as well as Causeway Bay, the 6 carriageways have already been over-crammed (with people) sitting (there)! We have already over-crammed 6 carriageways (with people) sitting (there). Keep coming! Keep coming! Keep coming! D7: Keep coming” (Emphasis added)[63] (9) Later in the same afternoon, when D7 spoke on the main stage at Tim Mei Avenue in the presence of D5 (on stage) and D3 (below stage), he said: “We are here to call for more people to come out to over-cram Admiralty (and) to over-cram Wan Chai with us. (Let’s) carry on with the Occupy (movement).” (Emphasis added)[64] (10) Later in the same afternoon, when D7 spoke on the main stage at Tim Mei Avenue in the presence of D2 (on stage), he said: “We are here to appeal to our friends who have not yet come to join us, come quickly to over-cram Admiralty and Wan Chai, and to occupy this Hong Kong that belongs to us.” (Emphasis added)[65] 331. It is clear that D1, D4, D5, D6 and D7 each had called for occupation or over-cramming of places “at and in the neighbourhood of Tim Mei Avenue”. 332. In my judgment, the closure of Tim Mei Avenue by the Police on 26th September 2014 could not have made the relevant defendant(s) think that “over-cramming” of the public places and roads “in the neighbourhood of Tim Mei Avenue Admiralty, Central and Wanchai” was not “unwarranted by law”. The relevant defendant(s) could not have thought that any obstruction caused by over-cramming of Admiralty and Central was not unreasonable. The relevant defendant(s) could not have thought that as the Police had cordoned off Tim Mei Avenue, no additional obstruction would be caused by over-cramming those parts of Admiralty, Central and Wanchai not at, but within the neighbourhood of Tim Mei Avenue. THE APPLICATION OF THE CO-CONSPIRATORS RULE 333. The Prosecution invokes and relies on the co-conspirators rule under Charge 1 against D1 to D3. In order to understand the evidence that the Prosecution relies on to invoke the co-conspirators rule and the extent that Prosecution seeks to rely on the rule. It is necessary to set out the relevant parts of the Prosecution’s Opening in full:- “2. In a press conference held at what appeared to be a church on 27th March 2013 (the “March 27 Press Conference”, as captured on Exhibits P-96, P-98, P-99 and P100), D1, D2 and D3 together announced the commencement of the OCLP. The Prosecution case is that D1, on behalf of the three, read out what they described as their Manifesto (信念書 ) setting out the aim of the campaign, namely, to strive for the form of universal suffrage they advocated in the election of the Chief Executive of the HKSAR in 2017. D1 stated, amongst other things, that:- (1) “The campaign consists of four steps: signing the covenant; the deliberation day; citizen authorization process, and finally, the act of civil disobedience”; (2) “After the deliberation day and authorization by citizens, the campaign will put forward a concrete proposal on the election of the Chief Executive in 2017. If the authorities concerned show no regard for the democratic demands of the citizens, and bring up some election methods which do not meet the international standards of universal suffrage, we shall, at a suitable time, carry out civil disobedience in terms of Occupy Central”, [Emphasis by the undersigned] and (3) “There are three ways for citizens to participate in the Occupy action: to provide support to those who carry out the acts of civil disobedience without breaking any law themselves, to carry out the act of civil disobedience without giving up to the authorities, but we hope that there would still be substantial number of citizens may choose to carry out the act of civil disobedience, gives themselves up to the authorities, and file no defence in the trial. We expect there will be at least 10,000 people who follow the conscience and participate in different aspects of this campaign: let love and peace occupy Central.” 3. In the same press conference, D3 stated, amongst other things, that:- “So, by way if violating the law and civil disobedience, we’ve revealed that justice failed to be served. By defying the law ourselves, we’ve also highlighted the injustice of the system inside the underlying framework that is thought to be legal.” 4. D2, when answering a question from the press, stated:- “If, by then, we sit on the road surface in Central, if he/she comes to arrest us, we won’t put up resistance; we’ll let (him/her) carry us on board a police vehicle, and then go to the police station. So, actually, if he/she is not going to let Central be paralyzed, it is actually very easy (to do so).” 5. The March 27 Press Conference is the public manifestation of a meeting of minds amongst D1, D2 and D3 in forming a conspiracy to commit public nuisance through the unlawful obstruction of public places and roads in or in the neighbourhood of Central. 6. Thereafter, D1, D2 and D3 continued to publicly introduce the campaign of the OCLP on various occasions:-_ (1) On 30 April 2013, D1, D2 and D3together appeared on a radio programme named “On a Clear Day” (as captured on Exhibit P-104) in which they discussed about the campaign of the OCLP. During the programme:- (a) When asked by the programme host if the people participating in Occupy Central would be guilty of the offence of unlawful assembly, D1 said they would “only sit on the carriageway” and would not charge at anything to break the order; (b) D1 stated that they would be holding the “first deliberation day” (“D-Day1”) of the OCLP at the University of Hong Kong on 9 June 2013, to get the people engage in discussions on what methods to be used in carrying out civil disobedience through Occupy Central. D1 further stated that they would be holding further deliberation days in future, and they had been preparing for a deliberation day with an estimated number of participants of 10,000 people, and (c) D2 stated that the OCLP would have a street booth during the protest on 1 July 2013 when they would provide information to citizens who had questions about the campaign of OCLP and would also be holding a fund raising for the campaign. D3 also stated that there would be a bank account for the volunteers to make donations for the campaign. (2) On 9 June 2013, D1, D2 D3 held the first deliberation day of the OCLP (i.e. “D-Day 1, as captured on Exhibits P-116 and P-117) at the University of Hong Kong. During the said event, which appear to be a public event to the audience at that event:- (a) D1 reiterated the goal of the OCLP to strive for their advocated form of universal suffrage in the election of the Chief Executive by way of civil disobedience, and stated that the campaign had now proceeded from “gestation period” (醞釀期 ) to “organizational preparation period” (組織装備期). The aim of the deliberation day was to set the agenda and identify the major issues that might be encountered in the campaign (for example, when Occupy Central happened, how the participants would respond to the police’s deployment) in order to enable the OCLP to achieve the goal successfully. D1 summarized the campaign of OCLP in the following words: “democratic deliberation, civic authorization, proposal formulation, civil disobedience, occupy Central, fight for universal suffrage”( 民主商討、公民授權、確立方案、公民抗命、佔領中環、爭取普選 ); (b) D2 explained the concept of civil disobedience, which he said was an “active refusal by the citizens to abide by unreasonable laws, demands or commands without turning to violent means”. D2 stated that the existing electoral system of Hong Kong was unjust, and they would fight for a just political system by means of civil disobedience; and (c) D3 stated that the gathering on the day was for the participants to make determinations together to enable them to strive for their advocated form of universal suffrage in the election of the Chief Executive in 2017. D3 stated that he was willing to stay with the participants to achieve the goal even up to the stage of civil disobedience. (3) On 1 July 2013, D1, D2 and D3 together attended a public gathering at Chater Garden at which they gave speeches on a stage (as captured on Exhibits P-106 and P-122). During the event:- (a) D1 stated, amongst other things, that he wrote an article in the beginning of the year suggesting one to strive for universal suffrage by way of civil disobedience by occupying Central. D1 then decided that he would take part in the civil disobedience himself, and asked D2 and D3 to join him for the campaign; (b) D3 stated, to the persons gathered at the meeting, amongst other things, that when D1 asked him to take part in the civil disobedience to occupy Central, he phoned D2 and asked if D2 would join. D2 then told D3 that he would take part in the campaign; and (c) D2 also acknowledged to the persons gathered at the meeting that he had participated in the campaign of OCLP. (4) On a day between June and October 2013, D3 gave a speech at a street forum (as captured in Exhibit P-108). D3 stated, amongst other things, that:- (a) The crux of OCLP was a civic awakening movement, to encourage everyone “to step forward, to speak out your mind”; (b) The “three of us” [the Prosecution case is that he was referring to himself and D1 and D2] had attended events in various districts explaining the campaign of the OCLP and collecting citizens’ opinions on the campaign; and (c) The OCLP held the first deliberation day on 9 June 2013, and held the second deliberation day in November 2013. The OCLP hoped to hold a meeting in December 2013 gathering the participants in the first and the second deliberation days together. 7. The Prosecution relies on the co-conspirators rule whereby evidence of the acts and declarations of one or more conspirators in furtherance of a conspiracy may be adduced to prove the extent and degree of participation if others in the conspiracy and the nature and extent of the conspiracy. The reasonable evidence for invoking the co-conspirators rule in the 1st Charge against D1, D2 and D3 are the relevant speeches made by D1, D2 and D3 respectively as captured in the above videos. Pursuant to the co-conspirators rule, the speeches made by each of D1, D2 and D3 in the above videos will be adduced to prove the extent and degree of their participation in the conspiracy of the two other Defendants who did not make those speeches. 8. The case for the Prosecution is that the foregoing speeches made by D1, D2 and D3 constitute evidence of the meeting of minds amongst D1, D2 and D3 in the conspiracy to commit public nuisance through the unlawful obstruction of places and roads in or in the neighbourhood of Central. The Prosecution alleges that the proposed action of “Occupy Central” by D1, D2 and D3 was an unlawful one, conducted by way of the occupation of public thoroughfares in unreasonable way that would amount to a common injury to the public or a significant section thereof, in an attempt to strive for their advocated form of universal suffrage. The choice of the location of Central was calculated to make an impact by creating an unreasonable obstruction in the centre of the city, thereby forcing the authorities to respond to their demands. ……….. 37. In addition, as regards the 1st Charge of conspiracy against D1, D2 and D3, the Prosecution relies on the co-conspirators rule as stated in Para. 7 above. Pursuant to the co-conspirators rule, the speeches made by each of D1, D2 and D3 in the above videos during the gathering at Tim Mei Avenue on 27 and 28 September 2014 will be adduced to prove the extent and degree of participation in the conspiracy of the other two Defendants who did not make those speeches.” 334. Exhibits P96, P98, P99 and P100 concerned the statements made by the relevant defendants in the March 27 Press Conference held on 27th March 2013, Exhibits P104 concerned a radio programme on which D1 to D3 appeared on 30th April 2013, Exhibits P116 and P117 concerned the statements made by the relevant defendants on D-Day 1 on 9th June 2013, Exhibits P106 and P122 concerned the statements made by the relevant defendants on 1st July 2013 when the Trio attended a public gathering at Chater Garden on 1st July 2013, Exhibit P108 concerned a speech made by D3 at a street forum on a day between June and October 2013. The videos referred to and relied on by the Prosecution in Para. 37 of the Prosecution’s Opening pursuant to the co-conspirators rule are:- (i) Exhibit P20 (Para. 21); (ii) Exhibit P44 (Para. 27); (iii) Exhibit P124 (Para. 30 and 31(1)); (iv) Exhibit P64 (Para. 32); (v) Exhibits P66 to P68 (Para. 33); and (vi) Exhibits P74 and P75 (Para. 33). 335. In other words, the statements and the Prosecution relies upon under the co-conspirators rule were made between 27th March 2013 and 28th September 2014. 336. In my judgment, the evidence adduced does not support the Prosecution case that a conspiracy to commit public nuisance was formed in or about March 2013 and the March 27th Press Conference was a public manifestation of a meeting of minds amongst D1, D2 and D3 in forming a conspiracy to commit public nuisance through the unlawful obstruction of public places and roads in or in the neighbourhood of Central” (Para. 5 of the Prosecution’s Opening and Para. 256 of the Prosecution’s Closing Submissions). 337. It is true that what happened up to 27th March 2013 was an agreement amongst D1 to D3 that the campaign of “Occupy Central” would be a “civil disobedience”, i.e. law would be violated in the course of the campaign. But as discussed, on a charge of public nuisance which involves obstruction of public places and/or highways, the “not warranted by law” element of offence is not to be judged by examining whether there is any illegality in the act or obstruction under complaint, e.g. whether a LONO had been issued for the public meeting concerned. As held by the Court of Final Appeal in Yeung May Wan, a person who creates an obstruction could not be said to be acting “without lawful excuse” if his conduct involves a reasonable use of the highway. In my judgment, in considering whether a defendant’s obstruction of the highway is “not warranted by law”, the same consideration applies. A defendant’s obstruction of the highway could not be said to be “not warranted by law” if his conduct involves a reasonable use of the highway. 338. In Yeung May Wan, the Court of Final Appeal held that the application of the reasonableness test in any given case of obstruction is essentially a question of fact and degree depending on all the circumstances, including the extent and duration of the obstruction, the time and place where the obstruction occurs, as well as the purpose for which the obstruction is done. 339. As discussed in the earlier part of this judgment, if the obstruction under complaint is the result of a peaceful demonstration, the court, in applying the reasonableness test, should recognize the protection given by the Basic Law to the right to peaceful demonstration and give it substantial weight in the balancing exercise. There is no dispute that the OCLP agreed and planned by D1 to D3 did not involve use of violence or threat of violence. 340. The evidence relied upon by the Prosecution under the co-conspirators rule shows that D1 to D3 had agreed to start the campaign of OCLP, they saw it as a movement of civil disobedience. Being a movement of civil disobedience, the law would be violated, hence in the March 27 Press Conference, D3 said, amongst other things, “…by way of violating the law and civil disobedience, we’ve revealed that justice failed to be served” and D2 said, amongst other things, “we sit on the road surface in Central…” and D1 said they expected there would be at least 10,000 people who would participate in different aspects of the campaign of OCLP. 341. On the evidence, it is not clear whether by the time of the March 27th Press Conference D1 to D3 had agreed upon the location where in Central the occupy movement would take place. There is no evidence by that time the 3 defendants had agreed on when to commence the occupy movement. In applying the reasonableness test to the facts in this case, at a time when the exact location and the time of the commencement of the occupy movement had yet to be decided, it is difficult to find that by 27th March 2013, the agreement reached by D1 to D3 must amount to a conspiracy “to commit public nuisance through the unlawful obstruction of public places and roads in or in the neighbourhood of Central” In my judgment, the obstruction that would be caused by an occupation of a road or roads that takes place during a long public holidays would be different greatly in degree and extent from an occupation that takes place on some usual business days that people have to work. Added to that uncertainty is the exact road(s) where the occupy movement had not been decided by the time of the March 27th Press Conference. I cannot reach a conclusion that in March 2013, the obstruction that D1 to D3 contemplated would eventually be caused by the OCLP must be unreasonable and not warranted by law according to the principles in Yeung May Wan. 342. In my judgment, what had been agreed upon by D1 to D3 in March 2013 was an agreement to pursue a plan, which might develop into a conspiracy to commit public nuisance. In my judgment, by 27th March 2013, what had been agreed upon by D1 to D3 did not yet amount to a conspiracy to commit a public nuisance. 343. It is the Prosecution case that the speeches made by D1, D2 and D3 on 30th April 2013[66], 9th June 2013[67] and a day between June and October 2013[68] constitute evidence of meeting of minds amongst D1, D2 and D3 in the conspiracy to commit public nuisance through the unlawful obstruction of public places and roads in or in the neighbourhood of Central. For the same reasons given in the preceding Para., there is insufficient evidence to support a finding that during the period of time from 30th April 2013 to the end of October 2013 when the speeches in Exhibits P-104, P-116, P-117 and P-108 were made by the relevant defendants, the obstruction that D1 to D3 contemplated would eventually be caused by the OCLP must be unreasonable and not warranted by law according to the principles in Yeung May Wan. 344. Likewise, in my judgment, the agreement that D1 to D3 had agreed in March 2013 had developed during the period from 30th April 2013 to the end of October 2013, i.e. during the time the aforementioned speeches relied on by the Prosecution were made, what had been agreed upon by D1 to D3 during the said period was an agreement to continue pursue the OCLP, hence D-Day 1 was held, and the appearance of the Trio on the radio programme, which might develop into a conspiracy to commit public nuisance. In my judgment, by the end of October 2013, what had been agreed upon by D1 to D3 in March 2013 did not still yet amount to a conspiracy to commit a public nuisance. 345. In my judgment, the use of the co-conspirators rule is the present case is limited. 346. The evidence shows that the location of where the occupy movement would be carried out, i.e. Chater Road and the time to commence the OCLP, i.e. 1st October 2014 were decided by D1 to D3 in September 2014, i.e. after the Decision on 31st August. I shall consider whether what D1 to D3 had agreed upon in September 2014 amounted to a conspiracy to commit public nuisance through the unlawful obstruction of public places and roads in or in the neighbourhood of Central. INDIVIDUAL CHARGES Charge 1: Conspiracy to Commit Public Nuisance (against D1 to D3) 347. I accept the evidence of D2 that D1 to D3 agreed to implement Stage 4 of the OCLP, i.e. occupation, after the Decision on 31st August. The Trio held meetings and jointly took the view that there was no room for discussion any more. The Trio reached an agreement that the Occupy Central Movement would be commenced on 1st October 2014. As a result, on 18th September 2014, the Trio gave the Police a Notification to Hold a Public Meeting.[69] It was agreed by D1 to D3 that the notified public meeting would take place (i) at the pedestrian area of Chater Garden from 3 p.m. to 11:59 p.m. on 1st October 2014 and from 7 a.m. to 11:59 p.m. on 2nd October 2014, and (ii) at Chater Garden and Statute Square from 3:00 p.m. on 1st October 2014 to 11:59 p.m. on 3rd October 2014. 348. D1 to D3 had also agreed that after the notified meeting was over, they would start the civil disobedience part of the OCLP by the occupation of the pedestrian precincts of Chater Road. D1 to D3 all agreed that the occupation would end in a few days but they had slightly different estimates as to the time of staying after the notified period. D2 thought the occupation might end on or around 5th October 2014, i.e. he planned to stay on for 3 more days after the notified meeting was over. 349. The Trio had discussed and agreed that in the event a Letter of Prohibition was issued against the proposed meeting on 1st October 2014, the OCLP would go ahead at the planned location, the participants would sit and remain there after the public holidays and commence civil disobedience there. 350. I accept the evidence of D2 that D1 to D3 estimated that there would be around several thousand to 10,000 people attending, with that number of participants, D1 to D3 were confident that the participants could be kept within the pedestrian precincts of Chater Road. I agree with the Prosecution submissions that a turnout of several thousand to 10,000 would be more than enough to give rise to a substantial disruption to the public. 351. On the question of the effect of the occupation, i.e. whether obstruction would be caused as a result, and the extent and degree of the obstruction. It is an admitted fact that 1st October was a Wednesday and public holiday, 2nd October was a Thursday and a public holiday. During 1st and 2nd October, the section of Chater Road between Pedder Street and Jackson Road would have been a Pedestrian Area. The 3rd October 2014 was not a public holiday, it was a normal working day and there would have been no Pedestrian Area. 352. As discussed in the earlier part of the judgment, it is unrealistic for D2 to suggest that with the estimated number of participants to be in the region of several thousand to 10,000, if the Trio remained on Chater Road on 3rd October 2014, they would be arrested on 5th October, if not on 3rd October 2014. I do not agree with Dr McCoy SC’s submissions that “In the event that the Trio are not arrested on 3rd October 2014, it being a Friday and the single day between 2 public holidays and the weekend, the disruption would not have been a disproportionate one”. 353. For a mass demonstration and occupation movement with several thousand to 10,000 people participating, it is unrealistic to suggest that the Police would take arrest action as soon as the notified meeting is over and the movement enters into its civil disobedience stage, i.e. the occupation of the road(s). Contact would be made with the organisers to persuade the protestors to disperse, the protestors would be given time to retreat, warning(s) would be given by the Police; it is unrealistic to suggest the Trio would be arrested by the Police on 5th October, if not on 3rd. 354. D2 said the effect of the occupation was comparable to the effect caused by a typhoon. Whilst a typhoon is an occurrence of nature which citizens cannot avoid, measures can still be taken to minimize the damage and inconvenience caused by it. For the obstruction and inconvenience that would be caused by an occupy movement, a lot can be done by the organizers to keep the obstruction and inconvenience within bounds of reasonableness. 355. On the evidence before me, by the time Exhibit D3-1 was prepared in September 2014, D1 to D3 had agreed to pursue a course of conduct, i.e. the occupation of Chater Road, whether or not a LONO could be obtained. 356. I balance the rights of a citizen to exercise his/her right of free speech, right of assembly and right of demonstration and the rights of others. I recognize the protection given by the Basic Law to the right to peaceful demonstration and give it substantial weight in the balancing exercise. 357. I apply the application of the reasonableness test to the facts in the present case. It was the plan of D1 to D3 to occupy the entire section of the carriageway of Chater Road with or without a LONO after the public holidays on 1st and 2nd October 2014. In my judgment, if the Trio wanted to achieve the civil disobedience aspect of the OCLP by breaking the law, it was not necessary to occupy the entire section of the carriageway of Chater Road. They could have called for the occupation of part of, but not the entire carriageway of Chater Road. The obstruction that would result from the occupation of part of the carriageway would be much less severe, as traffic on the relevant section of Chater Road would not be blocked completely. The obstruction that would be caused to the traffic would be much more acceptable to the public if part of the relevant section of Chater Road would still be open to traffic. 358. For the duration of the occupation, it was the intention of the Trio that the occupation of the carriageway of Chater Road would last a few days, the Trio and the participants would stay on the roads until police officers lift them up and move them onto police vehicles. Given the Trio’s estimate that there would be 3,000 to 10,000 people participating in the occupy movement, it would be unrealistic to contemplate or suggest that the clearance action could be completed within a short period of time. The lifting up of the protestors and moving them onto police vehicles would be a drain on the manpower resources of the police. Given that it was the plan of the Trio that they would start the legitimate part of the public gathering on 1st October 2013, by the time of the commencement of the civil disobedience part of the movement, the public gathering at Chater Road would have been going on for 2 days. In the circumstances, it would be unreasonable for the Trio to plan and call for an occupation of the carriageway of Chater Road even for just a few days. The civil disobedience aspect of the movement could be effectively signified by an occupation of the carriageway for a much shorter time, that the occupation of the carriageway should cease, and demonstrators should disperse in the early morning of 3rd October 2014. 359. The location of the Occupy Movement, i.e. Chater Road, is in the core centre of Central, I accept the evidence of D2 why the Trio chose Chater Road as the location to launch the Occupy Central in October. 360. I accept and take into consideration the importance of the purpose of the OCLP, i.e. to fight for the form of universal suffrage in relation to the election of the Chief Executive advocated by D1 to D3. 361. I have given substantial weight to the protection given by the Basic Law to the right to peaceful demonstration in the balancing exercise. I have reminded myself that the bounds of what was reasonable in the circumstances in the present case must not be narrowly defined. 362. All matters taken into consideration, bearing in mind the estimated number of people participating in the occupation, the extent and the estimated time and duration of the occupation, I find the obstruction that D1 to D3 planned to carry out an unreasonable use of the carriageway of Chater Road. 363. Applying the reasonableness test in Yeung May Wan. In my judgment, the obstruction in the planned occupation of Chater Road by demonstrators after the public holidays on 1st and 2nd October 2014 that D1 to D3 agreed to pursue, if carried out, would impinge unreasonably upon the rights of others. The unreasonableness of the obstruction was such that the significant and protected right to demonstrate should be displaced. The act was one not warranted by law. 364. In my judgment, the number of persons that would be affected by the obstruction caused by the planned occupation of Chater Road after the public holidays on 1st and 2nd October would be sufficient enough to constitute a class of public. The obstruction that would be caused would amount to a suffering of common injury by members of the public by interference with rights enjoyed by them as a class of the public. 365. In my judgment, D1 to D3 each knew what the consequence of the occupation of Chater Road would have on the traffic if their plan was implemented. They could not have failed to appreciate what the effect of the occupation of the carriageway of Chater Road would have on the traffic on 3rd October 2014 and the days after. The state of affairs that D1 to D3 intended to bring about as a result of their agreement would necessarily amount to or involve the commission of the offence of public nuisance. 366. As said, the OCLP was started by D1 to D3 in March 2013, by September 2014, i.e. by the time Exhibit D3-1 was prepared, D1 to D3 had reached an agreement which, if carried out in accordance with their intentions, would necessarily amount to or involve the commission of the offence of public nuisance by one or more of the parties to the agreement. 367. By September 2014, D1, D2 and D3 intended to be parties to the agreement, if carried out, would give rise to a common injury to the public or a significant section of the public such as to constitute a public nuisance. 368. In my judgment, the OCLP which D1 to D3 started in March 2013, had developed into a conspiracy to commit public nuisance by September 2014. D1 to D3 were parties to the said conspiracy. 369. As the events developed, the planned public gathering at Chater Road in October 2014 did not take place. 370. In the early hours on 28th September 2014, the Trio made an announcement to launch the movement at Tim Mei Avenue. 371. In the earlier part of the judgment, I have examined the evidence of D2 as to what he considered to be the four major areas of difference between the movement the Trio planned to commence on 1st October 2014 at Chater Road and the one they announced to commence at 1:36 a.m. on 28th September 2014. In my judgment, the movement that D1 to D3 announced to commence at Tim Mei Avenue was a modified plan of the original plan of OCLP, i.e. the one that the Trio planned to commence on 1st October 2014 at Chater Road. 372. I now turn to consider whether the agreement amongst D1 to D3 to cause public nuisance continued when they announced the launch of Occupy Central in the early morning of 28th September 2014, i.e. whether with the modifications, the agreement was still an agreement “to cause public nuisance to the public through the unlawful obstruction of public places and roads in or in the neighbourhood of Central” (Particulars of Charge 1). 373. I agree with the analysis of Mr. Leung SC on this issue. D1 said when he announced the launch of Occupy Central: “Occupy Central, will begin with occupying the Central Government Offices”.[70] In a press interview held shortly after the announcement, D1 was asked if the launch of Occupy Central at Tim Mei Avenue involved any change in the plan, D1 said amongst other things: “Actually, the impact is not really that big, actually it concerns just some technical arrangement, for example, the management of manpower the management of the sites, this is because our original plan was based on a certain point in Central, all the planned sketches are ready. And now we are going to make the changes, but I think this concerns only technical issues”.[71] D1 further said their first step was to “fortify” the defence of the occupied site at Tim Mei Avenue”.[72] I agree with the Prosecution submissions that the above remark of D1 shows that the plan of D1 to D3 was to take steps to ensure the continued occupation of Tim Mei Avenue for an indefinite period. It should be noted that when the Trio announced the cessation of the movement and their parting with the student protestors on 2nd December 2014, D1 said, amongst other things, that the occupation took place at Harcourt Road had: “developed into something completely different from the Occupy Central Movement we planned after we actually, er, launched, er it in the small hours of the morning on er, September 28. Well, it was also quickly replaced by the Umbrella Movement as we now call it….”[73] The above statement of D1 shows that D1, from his own point of view, considered the movement they launched on 28th September 2014 was the same movement they planned, it only developed into something completely different afterwards. 374. Dr McCoy SC’s submitted that the words said by D1 “Occupy Central, formally begins” at 1:36 a.m. on 28th September 2014 must be interpreted in their context. According to the evidence of D2, the students and their main leaders were exhausted. The OCLP had the logistical and material resources to support the existing student movement. It was through the abandonment of the original plan that the volunteers and other forms of help could be mobilised to support the students. In my judgement, the announcement made by D1, properly understood, was an announcement to launch the Occupy Central at Tim Mei Avenue. If the Trio just wanted to support the students with their logistical and material support, they did not have to announce the launch of Occupy Central. For the reasons given in the preceding Para., the original plan was only modified, but not abandoned, by the Trio when they announced the launch of Occupy Central at 1:36 a.m. on 28th September 2014. 375. I have explained in the earlier part of the judgment the effect of the closure of Tim Mei Avenue by the Police on 26th September 2014 has on Charge 2 and Charge 3. As said, D1 to D7 should have the benefit of doubt for the incitements to occupy the carriageways of Tim Mei Avenue and/or to incite others to occupy the carriageways of Tim Mei Avenue. 376. As I pointed out in the earlier part of the judgment that on 27th September 2014, D1 had asked the crowd at Tim Mei Avenue “…Let’s over-cram Admiralty first. Where shall (we) over-cram next? Central!”.[74] 377. The references to Admiralty and Central made by D1 on 27th September 2014 must be understood in the context of what was happening at that time, D1 was then addressing the crowd at Tim Mei Avenue. Obviously D1 must be referring to the public places and roads in Admiralty and Central in the neighbourhood of Tim Mei Avenue. The references to Admiralty and Central in Exhibit P20 fit in with the particulars of offence for Charge 1, i.e. “public places and roads in or in the neighbourhood of Central” as well as the particulars of offence for Charge 2 and Charge 3, i.e. “public places and roads at and in the neighbourhood of Tim Mei Avenue”. Although there were changes made to the plan, i.e. the location was changed from Chater Road to Tim Mei Avenue, it was still the agreement of D1 to D3 to occupy public places and roads in or in the neighbourhood of Central. In my judgment, the fact that D1 announced at Tim Mei Avenue that Occupy Central would begin with ‘occupying the CGO’ suggests that D1 to D3 were prepared to change the location of the occupy movement to adapt to the development of events since the launch of class boycotts. I agree with the Prosecution submissions that, in any event, Tim Mei Avenue and Harcourt Road in Admiralty were still public places and roads “in the neighbourhood of Central”. 378. Dr McCoy SC submitted that if the police had allowed the participants to go to Tim Mei Avenue on 28th September 2014, public nuisance might or might not have resulted (Para. 18 of D2 and D3’s Closing Submissions). It should be noted that when D1 announced the launch of the movement at Tim Mei Avenue at around 1:36 a.m. on 28th September 2014, he said amongst other things “Occupy Central will begin with occupying the CGO”. The action of the Police was a natural response to the Trio’s plea to occupy the CGO. As stated by Chief Superintendent Dover in his statement,[75] he reported duty at 0600 hours on 28 September 2014 and was the commanding officer during the cordoning off of Tim Mei Avenue that day. The purpose of the exclusion plan was to ensure the integrity of the CGC by restricting access. In my judgment, given the appeal made by D1 to the people at Tim Mei Avenue that Occupy Central would begin with occupying CGO, the action taken by the police was a natural and reasonable response. It would be absurd for the Trio to suggest that with the plea and threat to occupy CGO, the Police action taken by Chief Superintendent Dover came as a surprise to them. The exclusion plan was the natural and direct consequence of D1’s plea to begin Occupy Central with occupying the CGO. 379. I am satisfied so that I am sure that D1 to D3 knew that occupation of public places and roads in or in the neighbourhood of Central pursuant to the modified plan would result in obstruction of public places and roads. 380. In my judgment, when D1 called for the over-cramming of Admiralty and Central on 27th September 2014 and when he said in the press interview after the announcement on 28th September 2014 that the first step was to fortify the defence of the occupied site at Tim Mei Avenue, on both occasions, D1 was talking about the same occupy movement. It was the intention of the Trio that the occupy movement at Tim Mei Avenue and other parts of Admiralty and Central in the neighbourhood of Central would be a continued occupation for an indefinite period. Furthermore, when D1 announced the launch of Occupy Central at Tim Mei Avenue on 28th September 2014, a demand was made that the then Chief Executive Leung Chun Ying should re-submit a report on constitutional reform failing which the Occupy Central movement would be escalated. According to D1, failure or refusal to meet the demand would result in escalation of the Occupy Central movement, not cessation of it. D1 to D3 must knew that it would take time for the Government to consider the demand and it would certainly take time for a report on constitutional reform be prepared and re-submitted, should the Government be prepared to meet the demand. In my judgment, the aforesaid demand made by D1 reinforces my conclusion that it was the intention of D1 to D3 to occupy public places and roads for an indefinite period. 381. The 3 Computer Certificates prepared respectively by representatives of New World First Bus Services Limited, City Bus Limited and Kowloon Motor Bus Co (1933) Limited[76] show the number of public bus routes that had to be diverted or suspended from service during the occupation period. These certificates also show the number of passengers who would be affected by the blockage of the roads obstructed. I do not agree with Dr McCoy SC’s submissions that as there is no evidence as the usual passengers who could not get to their destinations via different routes about as efficiently as before, there is no evidence that members of public were inconvenienced. The fact that the passengers who took the bus routes covered by Exhibits P145 to P147 in the past had to switch to other bus routes or means of public transport and were deprived of the use of the roads affected was in itself an obstruction of the public in the exercise if rights common to everyone. From Exhibits P145 to P147, one can see the number of passengers that took the relevant bus routes in the past, the fact that they could not take the same bus routes they used to take amounted to a suffering of common injury by members of the public by interference with rights enjoyed by them as such. 382. The submission of D2 and D3 that “On the contrary, for the period of occupation, never has Harcourt Road been so effectively used by the public for “social and community purposes” (Para. 55 of D2 and D3’s Closing) shows a considerable amount of apathy to the inconvenience and suffering caused to others by the blockage of the road. 383. It is clear, from the evidence of D2, that in the afternoon on 27th September 2014, D1 to D3 had considered whether the occupation starting at Tim Mei Avenue could extend to Harcourt Road after some time. The statement made by D1 to “over-cram Admiralty first, and then Central”[77] reflects the decision reached by D1 to D3. D1 to D3 had agreed to pursue a course of conduct, i.e. the occupation of public places and roads in or in the neighbourhood of Central which, if the agreement was carried out in accordance with their intentions, would necessarily amount to or involve the commission by them the offence of public nuisance. 384. I balance the rights of a citizen to exercise his/her right of free speech, right of assembly and right of demonstration and the rights of others. I recognize the protection given by the Basic Law to the right to peaceful demonstration and give it substantial weight in the balancing exercise. 385. I apply the application of the reasonableness test to the facts in the present case. 386. In my judgment, if the Trio wanted to achieve the civil disobedience aspect of the OCLP by breaking the law, it was not necessary to call for an extensive occupation of public places and roads in Admiralty and Central in the way D1 advocated in Exhibit P20. They could have called for the occupation of part of, but not the entire carriageway of a road in or in the neighbourhood of Central. The obstruction that would have resulted from the occupation of part of the carriageway would be much less severe, as traffic on the relevant section of the road would not be blocked completely. The obstruction that would be caused to the traffic would be much more acceptable to the public if part of the road occupied would still be open to traffic. 387. For the duration of the occupation, from the above discussion, it was the intention of the Trio that the occupation of the public places and roads in or in the neighbourhood of Central would last for an indefinite period. As I pointed out, the plea made on 27th September 2014 to “over-cram Admiralty first, and then Central” was made by D1 after the Trio had a discussion in the afternoon. The plea to “over-cram Admiralty first, and then Central” was clearly related to what D1 said immediately after the plea, i.e. “We must be able to see the arrival of genuine universal suffrage in Hong Kong!” In the announcement on 28th September 2014. D1 demanded that the then Chief Executive Leung Chun Ying should re-submit a report on constitutional reform failing which the Occupy Central movement would be escalated.[78] In my judgment, it is obvious that D1 made the announcement and demand on behalf of D2 and D3. From the evidence, I am sure that D1 to D3 intended that the occupy movement in or in the neighbourhood of Central would be for an indefinite period. 388. It should be noted the speech by D2 to the crowd at Tim Mei Avenue shortly after the announcement on 28th September 2014 as to how the protestors should face the Police arrest action was similar to what he had said back in March 2013.[79] What D2 said in relation to how the participants should respond to Police arrest is also relevant to the consideration of the intended duration of the occupation. The Trio, in announcing the launch of the Occupy Movement at Tim Mei Avenue, obviously wanted to merge the supporters for the OCLP with those participating in the public gathering at Tim Mei Avenue. With the putting in the resources by the OCLP into the movement at Tim Mei Avenue as declared by D1,[80] it was clearly the intention of the Trio that the population of the people participating in the movement at Tim Mei Avenue would swell after the announcement. It is true that, to the disappointment of D2, many participants left the site after the announcement. But it was never the intention of the Trio to drive people away from the movement at Tim Mei Avenue by the announcement. In fact, as D2 said in his evidence, he felt very touched when he saw many people on Harcourt Road at around 4:00 p.m. on 28th September 2014. 389. In my judgement, given the way that the OCLP had been asking the participants how they should respond to Police arrest, given that D1 to D3 intended to merge the supporters for OCLP with the participants in movement at Tim Mei Avenue, it must be clear to the Trio that a Police clearance action could not be completed within a short period of time, hence D1 called for the participants to fortify the defence of the occupied site at Tim Mei Avenue, so that the occupy movement would last for an undetermined period of time in future. 390. Given that the notified public meetings at Tim Mei Avenue started on 26th September 2014, even with the additional purposes to support and protect the students, the civil disobedience aspect of the movement could be effectively signified by an occupation of the public places and roads in or in the neighbourhood of Central for a much shorter time. After the announcement was made in the early hours on 28th September 2014, D1 to D3 witnessed how the events developed, the firing of tear gas cannisters and the extensive continued occupation of public places and roads, e.g. Harcourt Road, by protestors. D1 to D3 witnessed the effect of the blockage of the roads had on the traffic. Yet they did not withdraw from the Occupy Central movement that was causing obstruction to the public until the announcement to withdraw on 2nd December 2014. In my judgment, if D1 to D3 wanted to keep the obstruction caused by the occupy movement within the bounds of reasonableness and if D1 to D3 really had in mind the concept of proportionality in their advocated civil disobedience movement, they should have agreed on a movement of a much smaller scale and duration. 391. Dr McCoy SC submitted that the use of the tear gas by the Police on the protestors which prompted more people to occupy public roads could not have been in the contemplation of D1 to D3 at the time when the agreement was initially reached in 2013 and the use of tear gas on 28th September 2014 was an intervening event (Para. 22 and 23 of D2 and D3’s Closing Submissions). 392. In the early hours on 28th September 2014, when D2 addressed the people at Tim Mei Avenue, he said, amongst other things: “If the police disperse us with tear gas, we, the rally, will make an announcement about the location where everyone, citizens who got scattered, can gather afterwards. We will tell everyone about these measures very soon”.[81] In my judgment, the use of tear gas by the Police was something that the Trio clearly had in mind when they decided to make the announcement at Tim Mei Avenue on 28th September 2014. It is possible that when the agreement was initially reached in March 2013, the use of tear gas by the Police was not in the contemplation of the Trio, but as I said, the agreement that D1 to D3 had reached in 2013, as the OCLP had developed through the 4 stage-process, only became a conspiracy to commit public nuisance in September 2014 when the Trio decided to launch the Occupy Central movement at Chater Road in October 2014. 393. I disagree with Dr McCoy SC’s submissions that the use of tear gas prompted more people to occupy public roads and it was something which could not have been in the contemplation of D1 to D3. When D1 called for the over-cramming of Admiralty first, and then over-cramming of Central on 27th September 2017, he must had in mind a number of turnout which would be enough to over-cram Admiralty and Central. A turnout which could over-cram Admiralty and Central was something the Trio were looking for. In fact, as the events unfolded and as the occupy movement continued, with more people occupied public roads in or in the neighbourhood of Central after the use of tear gas, D1 to D3 did not call for the cessation of the movement. In my judgement, the Trio wanted to ride with the tide of events, i.e. with a large number coming out to occupy public roads, the Trio wanted to make the best use of the circumstances to the advantage of the movement. The speech made by D1 on 10th October 2014 provides a good example of how the Trio saw the development of the movement up to 10th October 2014.[82] In my judgement, the use of tear gas by the Police did not break the chain of causation. 394. The location of the Occupy Central, i.e. Chater Road, is in the core centre of Central, I accept the evidence of D2 why the Trio chose Chater Road as the location to launch the Occupy Central in October. 395. Dr McCoy SC submitted that the reason for the Trio being present at Tim Mei Avenue from 27th September 2014 onwards was consistent all along: To support the students (Para. 75 of D2 and D3’s Submissions). 396. In my judgment, whilst one of the reasons the Trio turned up at Tim Mei Avenue from 27th September 2014 was to show their support for the students, it is clear from their evidence that the Trio wanted to make the best use of the developing situation at Tim Mei Avenue to fight for their advocated form of universal suffrage for the election of the Chief Executive of the HKSAR, thus in the announcement made at around 1:36 a.m., D1 made the demand, apart from words of support for the students, that the then Chief Executive Leung Chun Ying “must re-submit a report on constitutional reform which can reflect Hong Kong citizens’ true wish. If he fails to do so, the “Occupy Central” action will be escalated.” It is clear from the evidence that it was one of the purposes of the Trio to fight for the constitutional reform through the movement at Tim Mei Avenue. In applying the reasonableness test, I accept and take into consideration the importance of the purposes of the Trio to launch the Occupy Central movement at Tim Mei Avenue on 28th September 2014, i.e. to fight for the form of universal suffrage in relation to the election of the Chief Executive advocated by D1 to D3 and to support and protect the students. 397. I have given substantial weight to the protection given by the Basic Law to the right to peaceful demonstration in the balancing exercise. I have reminded myself that the bounds of what was reasonable in the circumstances in the present case must not be narrowly defined. 398. All matters taken into consideration, in my judgment, given the estimated number of people participating in the occupation and the fact that there were a large number of participants at Tim Mei Avenue at the time of the announcement, given the extent and the intended time and duration of the obstruction, the obstruction that would be caused by the occupation that D1 to D3 announced to carry out on 28th September 2014 made the obstruction an unreasonable use of the carriageway in or in the neighbourhood of Central. 399. Applying the reasonableness test in Yeung May Wan. In my judgment, the occupy movement that D1 to D3 had agreed to pursue and that they announced to launch at Tim Mei Avenue on 28th September 2014, if carried out, would necessarily cause obstruction. D1 to D3 knew at the time that the obstruction caused by the occupy movement would impinge unreasonably upon the rights of others. The unreasonableness of the obstruction was such that the significant and protected right to demonstrate should be displaced. The obstruction of carriageways in or in the neighbourhood of Central was an act not warranted by law. 400. In my judgment, the number of persons that would be affected by the obstruction caused by the occupation of the public places and roads in or in the neighbourhood of Central between the period 28th September 2014 and 2nd December 2014 was sufficient enough to constitute a class of public. The obstruction caused amounted to a suffering of common injury by members of the public by interference with rights enjoyed by them as a class of the public. 401. In my judgment, D1 to D3 each knew the implementation of their agreement, i.e. the occupation of the public places and roads in or in the neighbourhood of Central between the period 28th September 2014 and 2nd December 2014 would lead to blockage of roads and extensive obstruction to traffic. I am sure D1 to D3 each knew what the effect of the occupation of the carriageways would have on the traffic in or in the neighbourhood of Central before the announcement on 28th September 2014. After the announcement on 28th September 2014 and until the cessation of the agreement on 2nd December 2014, the effect that the obstruction of the roads had on the traffic was there for them to see as each day passed. I am sure the state of affairs that D1 to D3 intended to bring about as a result of their modified agreement to launch the Occupy Central movement at Tim Mei Avenue on 28th September 2014 would necessarily amount to or involve the commission of the offence of public nuisance. 402. As said, the OCLP was started by D1 to D3 in March 2013, by September 2014, i.e. by the time Exhibit D3-1 was prepared, D1 to D3 had reached an agreement which, if carried out in accordance with their intentions, would necessarily amount to or involve the commission of the offence of public nuisance by one or more of the parties to the agreement. By 28th September 2014, D1 to D3 had modified the agreement, but the modified agreement was one which, if carried out in accordance with their intentions, would still necessarily amount to or involve the commission of the offence of public nuisance by one or more of the parties to the agreement. 403. In my judgment, by the time Exhibit D3-1 was prepared, i.e. on or around 18th September 2014 till the cessation of the Trio’s participation in the Occupy Movement on 2nd December 2014, the agreement that D1 to D3 had reached, be it the original agreement to occupy Chater Road or the modified agreement to launch the occupy movement at Tim Mei Avenue, if carried out in accordance with their intentions, would necessarily amount to or involve the commission of the offence of public nuisance by one or more of the parties to the agreement. D1, D2 and D3 intended to be parties to an agreement which, if carried out, would give rise to a common injury to the public or a significant section of the public such as to constitute a public nuisance. 404. In my judgment, the OCLP which D1 to D3 started in March 2013, had been developed into a conspiracy to commit public nuisance on or around 18th September 2014. The conspiracy remained one of conspiracy to cause public nuisance and it continued to be so despite the modifications made after the announcement made on 28th September 2014. D1 to D3 were parties to the said conspiracy throughout the period from September 2014 till the cessation of the conspiracy on 2nd December 2014. 405. The evidence of adduced by the Prosecution and that of D2 show that D1 to D3 had been acting as a group throughout, i.e. from the time the OCLP was formed in March 2013 till the cessation of the movement on 2nd December 2014. As said, the agreement that D1 to D3 had formed in March 2013 had developed into a conspiracy to commit public nuisance in that the state of affairs intended by D1 to D3 to be brought out as a result of the unlawful obstruction of public places and roads in the neighbourhood of Central would necessarily amount to or involve public nuisance. D1 to D3 each intended that public places and roads would be obstructed by large crowd of people resulting in unreasonable obstruction blockage of roads and traffic during the indefinite period of occupation. Conclusion on Charge 1 406. I find all the elements of Charge 1 proved against D1 to D3. Charge 2: “Incitement to commit public nuisance” and Charge 3: “Incitement to incite public nuisance” (against D1 to D7) 407. For the reasons given in the earlier part of the judgment, D1 to D7 should be given the benefit of doubt for the incitements made to the persons present at Tim Mei Avenue to obstruct the pedestrian pavements and carriageway of Tim Mei Avenue and the incitements made to the persons present at Tim Mei Avenue to incite others to obstruct the pedestrian pavements and carriageway of Tim Mei Avenue. 408. As said, the ambit of the particulars of offence of Charge 2 and 3 are wider than that, the particulars of offence for both Charge 2 and Charge 3 refer to the “public places and roads at and in the neighbourhood of Tim Mei Avenue”, not just confined to the pedestrian pavements and carriageway of Tim Mei Avenue. The condoning off of Tim Mei Avenue since 26th September 2014 by the Police could not avail a defendant if what the defendant did was to incite the persons present at Tim Mei Avenue to cause a nuisance to the public by unlawfully obstructing places and roads at and in the neighbourhood of Tim Mei Avenue and not just Tim Mei Avenue (“Incitement to commit public nuisance”) or what the defendant did was to incite the persons at Tim Mei Avenue to incite others to cause a nuisance to the public by unlawfully obstructing places and roads at and in the neighbourhood of Tim Mei Avenue and not just Tim Mei Avenue (“Incitement to commit public nuisance”). 409. Amongst the addresses/speeches made by D1 to D7 on the main stage at Tim Mei Avenue between 27th and 28th September 2014, the defendants, apart from appealing to the people present to occupy Tim Mei Avenue and to ask/invite others to do the same, there were also pleas to occupy Admiralty, Central and Wanchai, and pleas to ask/invite others to occupy Admiralty, Central and Wanchai. The following pleas by the relevant defendant(s) to occupy Admiralty, Central and Wanchai clearly went beyond the scope of occupying Tim Mei Avenue, which had been cordoned off by the Police since 26th September 2014, i.e. before Charge 2 and Charge 3 allegedly took place:- (1) In the afternoon on 27th September 2014, when D6 addressed the people at Tim Mei Avenue, he said: “now we hope that everybody, yes, can really ask more people to come out and over-cram Tim Mei Avenue, also, it is hoped that the nearby carriageways will also be over-crammed, and (we) continued to extend the area of our civil disobedience.” (Emphasis added)[83] In my judgment, the above statement of D6 amounted to an incitement to the persons present at Tim Mei Avenue to over-cram the nearby carriageway. (2) On 27th September 2014, when D1 addressed the people at Tim Mei Avenue in the presence of D2, D4 and D6, D1 said, amongst other things: “….Let’s over-cram Admiralty first. Where shall (we) over-cram next? Central! We must be able to see the arrival of genuine universal suffrage in Hong Kong!” (Emphasis added)[84] I agree with the Prosecution submissions that ““Incite”, in its ordinary meaning, means “to rouse, to stimulate, to urge or spur on; to stir up; to animate”. An incitement may involve the “suggestion”, “proposal” or “inducement” to commit an offence. It is a question of fact in each case to decide whether the impugned acts or words amounted to an incitement to commit an offence” (Para. 245 of the Prosecution’s Closing). The authorities cited in support are Young V Cassells (1914) 33 NZLR 852 (CA), 854 and Invicta Plastics Ltd v Clare [1976] RTR 251 (DC), 258. In my judgment, the above statement of D1 amounted to an incitement to the persons present at Tim Mei Avenue to over-cram Admiralty first, and then Central. (3) On the same occasion, immediately after D1’s address, D4 echoed D1 (“Benny”) and said in the presence of D1, D2 and D6: “Hey, let’s go to occupy Admiralty now. Thank you, Benny. ‘Chung’ (transliteration), now it is the ‘Chung’ (transliteration) of ‘Kam Chung’ (transliteration) (the name of Admiralty in Chinese). Later, it will be the ‘Chung” (transliteration) of ‘Chung Wan’ (the name of Central in Chinese)…..” and “We hope to over-cramming Tim Mei Avenue, right? Over-cram Tim Mei Avenue! Over-cram Tim Mei Avenue! Over-cram Tim Mei Avenue! Over-cram Admiralty! Over-cram Admiralty! Over-cram Admiralty! Good! ….” (Emphasis added)[85] In my judgment, the above statement of D4 amounted to an incitement to the persons present at Tim Mei Avenue not only to over-cram Tim Mei Avenue, but also to over-cram Admiralty and then Central. D4 was echoing the plea made by D1 to over-cram Admiralty, and then Central. (4) In the evening on 27th September 2014, in the presence of D4 and D7, D6 addressed the people at Tim Mei Avenue and said: “Right, well, let me tell you a piece of good news rather than always listening to those things that (make you feel) heavy (-hearted). Well, we, now on the bridge outside Admiralty, it is still full of people all over the footbridge (there). They are in the direction of our side, coming towards us here, right. Our (activity) today, should be the largest Civil Disobedience (activity) over the years, certainly, the number of people, we have not yet got the largest of people, but (we) hope that the members of the public would not remain at our current achievements (attained), let us keep asking more people to come, over-cramming Admiralty.” “Well! As what we have seen, actually, there are huge crowds of people everywhere. Well! We, starting from Harcourt Road to the entire Tim Mei Avenue, all were (packed with) people, the open space of the Legislative Council is also full of people, so everybody keeps asking people to come!” (Emphasis added)[86] In my judgment, the above statement of D6 amounted to an incitement to the persons present at Tim Mei Avenue to incite others to over-cram Admiralty. (5) In the afternoon on 28th September 2014, when D7 spoke on the main stage at Tim Mei Avenue, in the presence of D1, D2 and D5 (on stage) and D3 (below stage), he said, amongst other things: “….However, we know that roughly more than ten thousand citizens have blocked the road (from) the Admiralty Centre, the whole of KFC to Rodney Street. At the same time, at the Hong Kong Academy ‘Centre’ (sic) of Performing Arts, Wanchai, there are ten thousand people. Adding (them) up, (we’ve) got a total of about thirty thousand people here. Here, I am appealing to all the citizens in Hong Kong to come together – no matter whether (you) can enter the area or not, go to Admiralty, go to Wan Chai. Let us fill up the whole of Admiralty (and) Wan Chai. Together, (we) can besiege the whole of Central Government Offices from the side of Rodney Street, from the side of the Hong Kong Academy ‘Centre” (sic) of Performing Arts. We demand --……Let us fill up Admiralty and Wan Chai together….” (Emphasis added)[87] In my judgment, the above statement of D7 amounted to an incitement to fill up Admiralty and Wanchai. It should be noted that the locations mentioned by D7 in the said address, e.g. Admiralty Centre, the Central Government Offices, Rodney Street, the Academy for Performing Arts are all located in the neighbourhood of Tim Mei Avenue. (6) In the afternoon on 28th September 2014, when D5 and D7 addressed the people at Tim Mei Avenue in the presence of D1 and D3, D5 and D7 said amongst other things: “D5: ……Our –our friends who gather round here to watch have already over-crammed two more roads. D7: Hurray! D5: (The crowd) has already over-crammed two roads (outside) the Hong Kong Academy for Performing Arts. D7: And more citizens are coming successively. (Let’s) continue to occupy the roads together. D5: We are asking more friends to come here, (we are asking) more friends to come here. Let’s over-cram Admiralty. (Let’s) over-cram Wan Chai. (Let’s) over-cram Central. D7: Friends on that side, keep it up. We know that some friends there have already prepared to dash out to occupy the road(s). Let’s cheer them on, shall we? D5: Comrades, let’s over-cram Wan Chai together. (Let’s) over-cram Admiralty. (Let’s) over-cram Central.…..” (Emphasis added)[88] In my judgment, the above statements of D5 and D7 amounted to (i) an incitement to the persons present at Tim Mei Avenue to over-cram Admiralty, Wanchai and Central in the neighbourhood of Tim Mei Avenue; and (ii) incitement to the persons present at Tim Mei Avenue to incite others to overcram Admiralty, Wanchai and Central in the neighbourhood of Tim Mei Avenue. (7) Later on, D5 and D7 spoke on the main stage at Tim Mei Avenue in the presence of D1 and D2 (on stage) and D3 (below stage) and said: “D7: We have got news that…. On the side of Harcourt Road.. many friends have already gone out onto the road! (They) have already occupied the road! Hurray! D5: Occupy the road! D7: Occupy the road! D5: Occupy the road! D7: Occupy the road! D5: Occupy the road! D7: Occupy the road! D5: Hurray! D7: Hurray! D5: Hurray! D7: Hurray!” (Emphasis added)[89] In my judgment, the above statements of D5 and D7 amounted to an incitement to the persons present at Tim Mei Avenue to occupy the carriageways of Harcourt Road. It should be noted that Harcourt Road where the occupation took place in Exhibit P74 is in the neighbourhood of Tim Mei Avenue. (8) Later on, D5 and D7 spoke on the main stage at Tim Mei Avenue in the presence of D3 (below stage) and said: “D5: Our picket has just made a report that the 6 carriageways of H-Harcourt Road bound for Central as well as Causeway Bay, the 6 carriageways have already been over-crammed (with people) sitting (there)! We have already over-crammed 6 carriageways (with people) sitting (there). Keep coming! Keep coming! Keep coming! D7: Keep coming” (Emphasis added)[90] In my judgment, the above statements of D5 and D7 amounted to an incitement to the persons present at Tim Mei Avenue to occupy the carriageways of Harcourt Road in the neighbourhood of Tim Mei Avenue. (9) Later in the same afternoon, when D7 was on the main stage at Tim Mei Avenue, he spoke in the presence of D5 (on stage) and D3 (below stage) and said: “We are here to call for more people to come out to over-cram Admiralty (and) to over-cram Wan Chai with us. (Let’s) carry on with the Occupy (movement).” (Emphasis added)[91] In my judgment, the above statement of D7 amounted to an incitement to overcram the public places and roads in Admiralty and Wanchai in the neighbourhood of Tim Mei Avenue. (10) Later in the same afternoon, when D7 was on the main stage at Tim Mei Avenue, he spoke in the presence of D2 (on stage) and said: “We are here to appeal to our friends who have not yet come to join us, come quickly to over-cram Admiralty and Wan Chai, and to occupy this Hong Kong that belongs to us.” (Emphasis added)[92] In my judgment, the above statement of D7 amounted to an incitement to overcram the public places and roads in Admiralty and Wanchai in the neighbourhood of Tim Mei Avenue. 410. The above incitements must be understood in the context of the fact that they were made by the relevant defendants at Tim Mei Avenue on 27th and 28th September 2014 during a continuous gathering at Tim Mei Avenue. When the incitements were made, there were already many participants at the scene. The districts/locations that the relevant defendant(s) asked to be over-crammed or filled up must be understood in context. The defendants were then participating in a public gathering at Tim Mei Avenue. When a defendant referred to over-cramming or filling up of Admiralty/Central/Wanchai, he or she must be referring those parts of Admiralty/Central/Wanchai in the neighbourhood of Tim Mei Avenue. Take Wanchai for example, whilst it made sense for a defendant to ask supporters to over-cram the roads outside the Academy for Performing Arts, it did not make sense if a defendant were to ask people to overcram Wanchai Road or Morrison Hill Road in Wanchai. 411. The incitements were made at a time when the pedestrian pavements and carriageway of Tim Mei Avenue were occupied by protestors. When the defendants asked people to overcram or fill up Admiralty/Central/Wanchai, he/she must be referring to occupation of public places, e.g. pedestrian pavements and roads. 412. From the evidence of PW1 and PW2, I am satisfied that no notification had been made to the Police for the holding of public meeting on the carriageways of Harcourt Road (both Wanchai and Central section), Fenwick Pier Street and Lung Wui Road for the period between 26th September 2014 and 11th December 2014. 413. For the effect of the absence of notification of intention to hold a public meeting, I do not agree with the Prosecution that on a charge of public nuisance or public nuisance related offence, “in the absence of prior notification made to the Police, any demonstration or continued demonstration on those carriageways (all being major thoroughfares linking Wanchai and Central District), which were to be open for traffic and public use, would be unreasonable in disrupting the traffic and the passage of the public, and would give rise to a common injury to the public or a significant section thereof.” (Para. 295 of the Prosecution’s Closing) 414. In my judgment, the absence of notification is one of the factors, but not the only factor, to be considered in determining whether the obstruction caused by an unnotified public meeting is unreasonable. In considering the degree of reasonableness of an obstruction caused by an unnotified public meeting, the absence of proper notification is relevant to the extent that the Police and the relevant government department(s), e.g. the Transport Department, would not be able to devise any measures or make proper arrangements to militate against any obstruction or inconvenience that might be caused by the public meeting in the absence of proper notification. That said, in the context of the common law offence of public nuisance, to hold that ‘just because a public meeting is an unnotified one, therefore any obstruction caused as a result must be unreasonable’ would have the unwanted effect of inhibiting the exercise of the citizens’ right to demonstrate. The application of the reasonableness test in Yeung May Wan requires the court to take into consideration all the circumstances, including the extent and duration of the obstruction, the time and place where the obstruction occurs, as well as the purpose for which the obstruction is done. For obstruction caused by a public meeting without proper notification, the absence of notification is a relevant factor, but not the only factor, to be considered. 415. Likewise, in considering whether an obstruction caused by a peaceful but unnotified demonstration on public highways is “not warranted by law”, the issue is not to be determined by the illegality arising from the absence of notification, but whether the conduct under complaint involves a reasonable use of the highways or public places. 416. For an obstruction caused by a peaceful demonstration, the protection given by the Basic Law to the right to peaceful demonstration kicks in, as the Court of Final Appeal held in Yeung May Wan. 417. For the above reasons, the fact that the demonstration on the carriageways was without any prior notification made to the Police would not by itself make the disruption or obstruction to the traffic unreasonable. The entire circumstances should be considered before a finding on the issue made. 418. I have set out the statements made by the relevant defendants which amounted to incitement to over-cram/fill up Admiralty, Central and Wanchai and incitement to incite others to do the same. It should be noted that whilst D1 to D7 should be given the benefit of doubt for their appeal to the persons at Tim Mei Avenue to occupy the carriageway of Tim Mei Avenue and their appeal to the persons at Tim Mei Avenue to incite others to do the same, some of the speeches made by the relevant defendants during the period between 27th and 28th September 2014 are also relevant to the consideration of their pleas to over-cram/fill up Admiralty, Central and Wanchai. As the House of Lords held in Rimmington, it is a requisite mens rea for the offence of public nuisance that the accused knew, or ought to have known (because of the means of knowledge were available to him) the consequence of what he did or omitted to do. What a defendant had said before or around the time the incitement(s) under complaint might reveal what that defendant knew or ought to have known. What was said by another defendant in the presence of a defendant might constitute means of knowledge available to the latter. Thus, it is necessary to consider the relevant defendants had said other than the incitements under complaint, i.e. the ones relating to over-cramming of the public places and roads in the neighbourhood of Tim Mei Avenue. D1 Exhibit P32 419. At around 8:04 p.m. on 27th September 2014, when D1 was on the main stage with D2, D3 and D5, D1 addressed the people at Tim Mei Avenue and said they were going to have the largest scale of implementation of civil disobedience. He asked the participants to bear in mind safety, peace, trust, and hope.[93] 420. In my judgment, the above speech of D1 shows that D1 knew that the public meeting which involved occupation of public places and the carriageway of Tim Mei Avenue was the largest in terms of scale, what D1 said in Exhibit P32 sheds light on: (i) the intended scale of the occupation of Admiralty and Central that he vowed for in the afternoon on 27th September 2014;[94] and (ii) the occupy movement that he announced to launch at 1:36 a.m. on 28th September 2014.[95] Exhibit P59 421. Shortly before mid-day on 28th September 2014, when D1 was together with D2, D5 and D7 on the main stage (with D3 below stage) at Tim Mei Avenue, D1 addressed the people present and said amongst other things: (i) tens of thousands of citizens had participated in the Civil Disobedience Movement on 27th September 2014; (ii) the OCLP fully supported the occupy movement of the students; and (iii) the announcement of the launch of Occupy Central movement was not an act to highjack the movement of the students as the OCLP all along stood behind the students.[96] 422. In my judgment, what D1 said in Exhibit P59 shows that he was aware of the negative effect of the announcement he made had on the occupy movement in progress at Tim Mei Avenue, people were leaving after the announcement. D1 thus wanted to reassure the participants of the movement that the Trio were not hijacking the occupy movement in progress. D1’s speech in Exhibit P59 also shows that he was aware at the time when he called for over-cramming of Admiralty first and then Central on 27th September 2017, there were already tens of thousands of participants in the occupy movement in progress. In my judgment, D1 intended the scale of occupy movement to escalate and the number of supporters to swell when he called for over-cramming of Admiralty first and then Central in Exhibit P20. D2 Exhibit P64 423. At around noon time on 28th September 2014, when D2 was on the main stage with D1, D5 and D7 and D3 below stage, D2 addressed the people at Tim Mei Avenue and said: “Every, er, voluntary picket (and) supporter of ‘Occupy Central with Peace’, perhaps today is the first day that you people, the citizens, come to support this movement. (I) hereby have to make an appeal to you all. This is because in the past few days, the Police took some unreasonable measures, (used) excessive violence to deal with the protestors. We suggest that each voluntary picket, citizen should adopt the effective protest approach used by the Hong Kong Federation of Students in these few days. If anyone sees that the main stage or the local commanders needs your help, we are required to block certain important accesses, strongholds, or similar to what had happened just now, we are required to block some vehicles which we think that ‘you’ may affect our entire movement. I hope that you all follow the instruction given by - - the pickets and our commanders. If there is probably any conflict, we will raise both hands because we definitely have no intention to harm the bodies of the law enforcers. This is still a non-violent protest. However, it’s a more aggressive non-violent protest. Well, therefore, today, we state clearly to our voluntary pickets and the citizens who participate in it that we continue to adopt an effective approach that was used in these several days. However, this approach of protest is definitely to remain peaceful and non-violent. Thank you.” (Emphasis added)[97] 424. In my judgment, what D2 said in Exhibit P64 and the way he said it show that the Trio considered that they were key players in the Occupy Central movement they launched in the early hours on 28th September 2014. The pickets of the OCLP were in action and the Trio were able to influence them. The speech of D2 also shows the importance of the main stage from the perspective of the Trio. What D2 said in Exhibit P64 also shows that the Trio were prepared to adapt the original plan to the situation, hence they were willing to follow the “the effective approach” that had been used by the students. Exhibit P66 425. Shortly after 1 p.m. on 28th September 2014, when D2 followed on D7’s plea to exhaust the manpower of the police to the greatest extent, D2 addressed the people at Tim Mei Avenue on the main stage, he said amongst other things: “Civil disobedience means non-cooperation. Therefore, we’ll not get up and board a police vehicle ourselves to get arrested directly……Just keep your body in a very relaxed state and then your body would become very heavy indeed. …..We must stay until the last moment. Stay for one more minute, and we will triumph for one more minute, right?.....” The other defendants present were: D7, D3 and D5 (on stage); D1 and D3 (below stage) (Emphasis added)[98] 426. What D2 said in Exhibit P66 shows that it was the common intention of the Trio, D5 and D7 to drain the manpower of the Police so that the protestors could stay, and the Occupy Central movement could last, until the last moment. D3 Exhibit P32 427. At around 8:04 p.m. on 27th September 2014, when D3 was on the main stage with D1, D2 and D5, D3 addressed the people at Tim Mei Avenue after D1. D3 asked the participants not to be intimidated by the threatening means used by the police at the road junctions. D3 said: “We, just like our guidelines, are sitting arm in arm. We should not be afraid of this police authority…” (Emphasis added)[99] 428. What D3 said in Exhibit P30 shows that the Trio and D5 were asking the participants to follow the guidelines, i.e. the planned action of the OCLP. D3’s plea that the participants should sit arm in arm is also similar to what D2 said in Exhibit P66 as discussed above. I my judgment, the purpose of protestors sitting arm in arm at the time of arrest was to drain the manpower of the Police so that the Occupy Central movement could last for an indefinite period of time. D4 Exhibit P7 429. In the case of D4, in the morning on 27th September 2014, when D4 addressed the people at Tim Mei Avenue, as recorded in Exhibit P7 (Pg. 1015-1018), she called for more people to join the movement at Tim Mei Avenue and more material supplies for the support of the movement at Tim Mei Avenue. Exhibit P9 430. At around noon time on 27th September 2014, as recorded in Exhibit P9, D4 addressed the people at Tim Mei Avenue on the stage (in the presence of D1 and D2, who were on and below the stage at various points of time). In the said address: (i) D4 asked for more people to join the movement at Tim Mei Avenue; (ii) she asked for specific items in support of the movement (iii) she appealed to the people at Tim Mei Avenue to hold on to the defence lines; (iv) she stated that “All in all, as long as the police did not retreat we will insist on staying here”; (v) she said the people at the main stage had been trying to collect information from all parties all along; (vi) she instructed the people at Tim Mei Avenue how they should respond to Police arrest; (vii) amongst the demands made by D4 was a demand for genuine universal suffrage and rejection of bad proposal.[100] Exhibit P10 431. In the afternoon of 27th September 2014, as recorded in Exhibit P10, D4 addressed the people at Tim Mei Avenue on the stage (in the presence of D2 and D3, who were on and below the stage at various points of time). In the said address: (i) D4 told the crowd how they should guard the defence lines against the police officers; (ii) D4 asked the protestors to pay attention to the side of Admiralty Centre and CITIC Pacific; (iii) D4 asked the people at other defence lines to monitor the movement of the police and report to the main stage through the picket leaders (iv) D4 continued to ask for more people to join the movement at Tim Mei Avenue and bring with them appropriate supplies; (v) she instructed the people at Tim Mei Avenue how they should respond to Police arrest; (vi) D4 told the crowd that: “(we) heard that more and more citizens are coming for reinforcement, coming to support us”; (vii) D4 told the crowd that it was possible that the police officers were going to carry the student protestors out from the Civic Square; (viii) D4 warned the crowd that the police officers on the side of the entrance to Tim Mei Avenue might be ready to take action any time; (ix) D4 asked the people at the front of Tim Mei Avenue to open umbrellas or put up their hands and to cover their eyes with cling wrap; (x) D4 continued to ask for more supporters to come to Tim Mei Avenue with material supplies she specifically asked; (xi) When D4 asked the crowd to leave a passage for an ambulance so that it could attend to someone fallen sick, she said, among other things: “Disobedience – is not about one or two days, or one or two minutes…”[101] Exhibit P11 432. In the afternoon of 27th September 2014, as recorded in Exhibit P11, D4 addressed the people at Tim Mei Avenue on the stage in the presence of D2. In the said address: (i) D4 asked everyone to participate in civil disobedience; (ii) D4 asked everyone to ask more people to come to Tim Mei Avenue; (iii) D4 asked the people at Admiralty Centre and on the bridge to guard the post as the police might need the access at Admiralty Centre after the people in the Civic Square had been carried up there; (iv) D4 asked the protestors to continue to guard various defence lines against the police (v) D4 asked the people in the Civic Square to stay arm in arm and shout out their names upon arrest; (vi) D4 said: “…according to our understanding now, civic square has already been cleared. Friends in the civic square have been carried away. But, never mind, we will go on staying here. Also, there is a piece of news, …..As said just now, Wong Chi Fung has been rejected bail and is charged with three offences, three offences, therefore ……We – but we have to stay here. We have to uphold our strong will to show our determination. Shall we continue to stay here. Let’s us applause for ourselves, cheer ourselves up, okay?”[102] Exhibit P16 433. In the afternoon of 27th September 2014, as recorded in Exhibit P16, D4 and D5 addressed the people at Tim Mei Avenue on the stage (in the presence of D1 and D2, who were on stage and below stage at different points of time, and D3, who was below stage). In the said address: (i) D4 told the crowd that yellow flags had been held up but everyone should get prepared and guard his/her post at various defence lines, e.g. the ones at CITIC Tower, Lung Wui Road near the roundabout; (ii) D4 told the crowd how supporters could go to the venue via Tamar Park and the footbridge at CITIC Tower; (iii) D4 said they were not alone as many supporters were going to the venue to support them; (iv) D4 said, because of live TV broadcast, a lot of citizens were going to the venue with material supplies to support the movement; (v) D4 specifically asked the supporters going to the venue should equip themselves with umbrellas, bottled water, hats, sunglasses or goggles; (vi) D4 asked the crowd to sit in a way that a male protestor should sit next to a female protestors and they should link their arms for the purpose of increasing the cost of the police carrying them away; (v) D4 said she believed the era of disobedience battle had already begun.[103] Exhibit P20 434. In the afternoon of 27th September 2014, D4 addressed the people at Tim Mei Avenue, as recorded in Exhibit P20, in the said address, apart from calling for the over-cramming of Admiralty and then Central, also asked the people at Tim Mei Avenue to continue to ask more friends to go to the venue at Tim Mei Avenue, she said: “….Sometimes it is necessary (for us) to be divided into batches. The policemen will work in shifts, well, it also applies to us. Not everyone has to sleep here for two, three, four, five, six (or) seven days, right?... Well, if everyone (wants) to keep staying (here), well, (you) certainly can. Well, if you intend to go, er, prepare better supplies, (you) are also very welcome (to do so).”[104] 435. It should be noted that Exhibits P7, P9-P11 and P16 were recorded between 7:10 a.m. and 4:01 p.m. on 27th September 2014 whereas Exhibits P20, in which D4 called for the over-cramming of Admiralty, followed by Central, was recorded between 4:08 p.m. and 5:57 p.m. on the same day (Para. 4, 5, 8 and 9 of Admitted Facts II). 436. The speeches made by D4 in Exhibits P7, P9-P11 and P16, show amongst other things, that D4 intended the public assembly in progress at Tim Mei Avenue to become a demonstration with mass participation and continuous material supplies from the public. D4 knew that there were many supporters going to join the public assembly at Tim Mei Avenue. She emphasized the importance of the main stage and specific instructions were given to the people present to defend various defence lines. It was clear from D4’s speeches that constitutional reform remained an important issue of the movement. The instructions given by D4 in respect of how a protestor should conduct himself/herself in an arrest action shows that D4 intended to increase the cost of the police in any arrest action so that the occupy movement could carry on for an indefinite [eriod of time. Exhibit P32 437. At around 8:34 p.m. on 27th September 2014, when D4 was on the main stage with D2 and D5, she told the people at Tim Mei Avenue that at that moment, there were about thousands of people gathering on the footbridge of Admiralty Centre. She said supporters could enter the venue of Tim Mei Avenue via Tamar Park or the Academy for Performing Arts and the people at Tim Mei Avenue should tell their friends so if they were asking their friends to go to the venue. D4 also called for material support of items needed at the venue. D4 also called for release of the arrested persons and over-cramming of Civic Square.[105] Exhibit P33 438. At around 9:00 p.m. on 27th September 2014, when D4 was on the main stage with D2 and D5, she told the people at Tim Mei Avenue who did not have a post to go to defend the footbridge of Admiralty Centre. D4 also asked the people who wanted to join the assembly at Tim Mei Avenue to bring with them enough food and water.[106] 439. At around 9:20 p.m. on 27th September 2014, when D4 was on the main stage with D5, she told the people at Tim Mei Avenue to support the defence lines at the footbridges at Tim Mei Avenue and Admiralty Centre. D4 also asked the people at Tim Mei Avenue to swap the shifts with protestors who had been guarding at various defence lines for a long time.[107] Exhibit P35 440. Later at around 9:48 p.m. in the same evening, when D4 was on the main stage with D2, D5 to D7, D4 to D7 each addressed the people at Tim Mei Avenue, when D5 said that it was already filled with seated people over at the Legislative Council, D4 echoed what D5 said.[108] Exhibit P38 441. At around 10:56 p.m. in the same evening, when D4 was on the main stage with D6 and D7, she addressed the people at Tim Mei Avenue. D4 stressed the importance of the main stage and asked the crowd to protect the main stage from the police.[109] Exhibit P41 442. Shortly after midnight on 28th September 2014, when D4 was on the stage with D6, she told the people at Tim Mei Avenue that the police had refused to issue a LONO for the public meeting at Tim Mei Avenue on Sunday (28th September), hence the assembly in progress was an unauthorized assembly.[110] Exhibit P43 443. Shortly before 1 a.m. on 28th September 2014, when D1 was with D1 to D3 on the main stage, D4 asked the people at Tim Mei Avenue who did not have any post to go to reinforce the defence lines on the footbridge of United Centre, Lung Wo Road and where Tim Mei Avenue connected with Gloucester Road. D4 also called for more people to go to provide reinforcement as “a relatively meaningful number of citizens present here, the Police will not take any action precipitately.” (Emphasis added)[111] Exhibit P44 444. Shortly after 2 a.m. on 28th September 2014, when D4 was on the main stage with D2 and D7, she addressed the people at Tim Mei Avenue. In her address, D4 spoke of the importance of the main stage: “…, it is our long-term need that there are friends sitting right in front of the main stage”. (Emphasis added)[112] D5 Exhibit P16 445. In the case of D5, when he addressed the crowd at Tim Mei Avenue on the stage in the presence of D1, D2 and D4 (all on stage) in the afternoon on 27th September 2014, he said he was there to support the student protestors with a group of teachers at different tertiary institutions, they approved and applauded what the students had done.[113] Exhibit P27 446. In the evening of 27th September 2014, when D5 addressed the crowd at Tim Mei Avenue on the stage in the presence of D2 and D6 (both on stage), D5 said: “It comes to an era of protest, everyone is a p…protestor, everyone is an athlete, everyone is a picket, everyone is a knifeman who fights for the maximum space…..”[114] 447. On the same occasion, when D5 addressed the crowd at Tim Mei Avenue on the stage in the presence of D6 and D7 (both on stage), he said: “All along we have many friends, so nice – so nice – to tell us the present progress. We know how the situation is in general. Please co-operate with our main stage….” He said the HKFS demanded that: (i) all the people arrested should be released; (ii) the Chief Executive Leung Chun Ying should respond to the class boycotts and the demand for genuine universal suffrage; (iii) the police should apologize. D5 said it was a smart move lately on the part of the protestors to counter surround the police. He asked the people at Tim Mei Avenue to use their own way to try to ask their friends to go to the venue at 10 p.m. D5 said they would continue to stay behind at the venue and he called for the recapture of the Civic Square. Henceforth, they had entered an era of universal struggle and people from all walks of life were engaging in universal struggle. D5 also said there would be different programmes on the main stage after 8 p.m.[115] 448. On the same occasion, in the presence of D2 and D6 (both on stage), D5 told the people at Tim Mei Avenue that the main stage would process and sort out the information supplied to it and would make the distribution afterwards. He asked everybody to pay attention to the arrangement made by the main stage. D5 asked the people present to keep calm and continue to participate in the assembly rationally. He asked the people present at the assembly to continue to ask more people to come to the Civil Square. (Emphasis added)[116] 449. The above speeches of D5 show that he was not just a supporter for the student protesters. He was in fact performing the role of a Master of Ceremonies of the assembly in progress. D5’s speeches also show the importance of the main stage. The plea made by D5 to the people that they should stay behind in the struggle for universal suffrage and the demand that the then Chief Executive Leung Chun Ying should respond to the demand for genuine universal suffrage show that D5 intended the movement in progress would be for an indefinite period. The fact that D5 had such intention in the evening on 27th September 2014 is also relevant to the issue whether he intended the incitements under complaint for Charge 2 and Charge 3 would result in obstruction of public places and roads in the neighbourhood of Tim Mei Avenue for an indefinite period. The other defendants who were present were also aware of the situation. Exhibit P28 450. On the same occasion, D5 told the people present at Tim Mei Avenue (also in the presence of D2 and D6) that according to the news round-up of RTHK, the Police had declared at around 7:08 p.m. that the assembly at Tim Mei Avenue was an unlawful assembly which would affect public safety and the Police appealed to the participants and the people on the footbridge to leave in a peaceful and orderly manner as soon as possible.[117] 451. Later that evening, at around 8 p.m., when D5 addressed the people at Tim Mei Avenue on the stage in the presence of D1, D2 and D6, he told the crowd that 27th September marked the beginning of an era. D5 announced the evening meeting formally started at 8 p.m. D5, together with D6 asked the people present to hang in to the end. D5 also asked the participants to put on all equipment for preventing pepper spray.[118] 452. The above speeches of D5 show that despite the fact the Police had declared that the public meeting in progress was an unlawful assembly, in the evening on 27th September 2014, D2 still asked the participants to hang in to the end even if use of pepper spray by the Police was by then imminent. Exhibit P32 453. At around 8:30 p.m. on 27th September 2014, when D5 was on the main stage with D4, he asked the people present at Tim Mei Avenue to get more friends to join the assembly at Tim Mei Avenue as far as possible.[119] 454. At around 8:34 p.m. on 27th September 2014, when D5 was on the main stage with D2 and D4, D5 echoed D4 and called for release of all the arrested persons and demanded the Chief Executive Leung Chun Ying to give an explanation about his views in respect of the class boycotts and the arrests of protestors and genuine universal suffrage. D5 also said the police should apologize.[120] 455. The address of D5 shows that constitutional reform in relation to universal suffrage was an important issue in the mass demonstration in progress. Exhibit P33 456. At around 9:17 p.m. in the same evening, when D5 was on the main stage with D2, D4 and D6, D5 made an announcement for the organizers that a large amount of googles and raincoats were badly needed, and he asked the people present to ask their friends to bring these items to the venue.[121] Exhibit P35 457. Later at around 9:48 p.m. in the same evening, when D5 was on the main stage with D2, D4, D6 and D7, D4 to D7 each addressed the people at Tim Mei Avenue, D5 said that: “It’s already filled with seated people over at the Legislative Council…..It’s already filled with our seated people over at the Legislative Council. however, I still need to ask for more people to come, come again, come again after ten o’clock.”[122] 458. Later at around 10:04 p.m. in the same evening, D5 and D6 addressed the people at Tim Mei Avenue in the presence of D2 (on stage) and D3 (below stage), D5 and D6 said amongst other things: “Encirclement is strength”. D5 also said it was a conservative estimate that there were 50,000 people participating at Tim Mei Avenue. D5 said amongst other things: “We have fifty thousand people here, fifty thousand people, fifty thousand people. Let me see how you are to clear away fifty thousand people? Let me see how you are to lock up fifty thousand people?”[123] 459. The speeches of D5 in Exhibit 35 show that when D5 later asked for the over-cramming and occupation of the carriageways of Harcourt Road in Exhibit P74, not only did he know that the carriageways were already full of protestors, he also knew that on the night before, i.e. 27th September, there was a huge turnout of at least 50,000 people at Tim Mei Avenue. He also believed for a mass demonstration with a huge turnout, it would be difficult for the Police to clear the site and carry out arrest action. Exhibit P57 460. In the morning of 28th September 2014, when D5 was on the main stage. He addressed the people at Tim Mei Avenue, apart from asking the participants to contact their family members and them to join the assembly at Tim Mei Avenue, D5 also told said the Police refused to let some audio equipment be moved into the venue on the ground that the public meeting in progress was an unlawful assembly.[124] Exhibit P61 461. In the same morning, when D5 was on the main stage with D2, D5 addressed the people at Tim Mei Avenue and said the fight they were putting up in civil disobedience was a “fight in relays”. He asked each participant leaving the venue should invite two friends to join the movement at the venue.[125] 462. What D5 said in Exhibit P61 shows that he intended the mass demonstration in progress at Tim Mei Avenue to carry on for an indefinite period. Exhibit P59 463. Shortly before mid-day on 28th September 2014, when D5 was together with D1, D2 and D7 on the main stage and D3 below stage, D5 addressed the people at Tim Mei Avenue. He asked the participants to intercept a police vehicle at Lung Wui Road as there were some legislative councillors arrested and taken on board the police vehicle.[126] 464. In my judgment, whatever the effect of cordoning off Tim Mei Avenue might have on the defendants, D5 had no reason to believe that the cordoning off provided a justification for the intercepting a police vehicle at Lung Wui Road. Exhibit P64 465. Shortly after mid-day on 28th September 2014, when D5 addressed the people at Tim Mei Avenue, he asked the people present to ask their friends to come out to counter-besiege the police defence. D1 to D3 and D7 were below stage during the said address.[127] 466. At around 12:15 p.m., when D5 was on the main stage with D2, he gave directions to the people present to reinforce the defence at Tim Mei Avenue at the direction of Admiralty. He thanked everybody for co-operating with the main stage. D1 and D7 were below stage during the address.[128] Exhibit P66 467. At around 12:36 p.m., when D5 was on the main stage with D2 and D7, D5 asked the people at Tim Mei Avenue to fill up the spaces for each other. He said amongst other things: “…., if we can mobilize (our) people further, we will make the mobilization.”[129] 468. What D5 said in Exhibits P64 and P66 shows that the main stage was used as a command centre. D2 and D7 were present at the time. D6 Exhibit P17 469. In the case of D6, when he addressed the crowd at Tim Mei Avenue on the stage in the afternoon of 27th September 2014[130], he asked the people at Tim Mei Avenue to call for more supporters to go to Tim Mei Avenue even though Tim Mei Avenue was already all full. D6 also said the purposes of the assembly at Tim Mei Avenue were: (i) to ask the then Chief Executive of the HKSAR Leung Chun Ying to give an explanation on what was then happening and on the matter of supporting a predetermined political reform; and (ii) to wait for the release of the protestors arrested inside the Civic Square. D6 criticized the Decision on 31st August and asked for the breaking through of the gate of the Civil Square as the first step to break through the framework of the Decision on 31st August. D6 said the civil disobedience which was taking place required mass participation to make it a large-scale civil disobedience. He said what was going on was probably civil disobedience in progress as road was already being occupied. D6 said the number of people was still not enough and he asked the people present to ask more friends to join. D6 said: “now we hope that everybody, yes, can really ask more people to come out and over-cram Tim Mei Avenue, also, it is hoped that the nearby carriageways will also be over-crammed, and (we) continued to extend the area of our civil disobedience.” (Emphasis added)[131] 470. The speech of D6 in Exhibit 17 shows that constitution reform was an important topic for the mass demonstration in progress at Tim Mei Avenue. D6 also called for mass participation in the movement and the plan to over-cram the nearby carriageways. What D6 said in Exhibit P17 reflects the scale and duration of the mass demonstration he had in mind on 27th September 2014. The plea made by D6 in Exhibit P40 (Pg. 1244-1245) to the people at Tim Mei Avenue that they should keep asking people to come to over-cram Admiralty, properly understood, must mean the over-cramming of the public places and roads in the neighbourhood of Tim Mei Avenue. Exhibit P27 471. Later in the evening, when D6 addressed the people at Tim Mei Avenue on the stage in the presence of D2 and D5 (both on stage), he said, amongst other things: (i) that according to the LONO received from the police, the assembly in progress would last until 11 p.m., therefore the police would be breaking its promise if they were to take action against the assembly before that time. D6 said the assembly in progress was a lawful one with a LONO issued. The police had the duty to assist the members of the public in exercising their civic rights and it was necessary to open more areas for the assembly instead of dispersing the people. D6 asked the people present to ask more friends to go to the venue at Tim Mei Avenue to express their support.[132] Exhibit P28 472. Later at around 7:57 p.m. in the same evening, when D6 addressed the people at Tim Mei Avenue on the main stage in the presence of D1 and D2 (both on stage), D6 said that a red banner was raised at the “Chiu Mun” (transliteration) of United Centre. He asked the people present to continue to appeal to their friends to keep going to the venue at Tim Mei Avenue.[133] 473. Later at around 8 p.m. in the same evening, when D5 announced the evening meeting started at 8 p.m., D5 and D6 asked the people present to hang in till the end.[134] Exhibit P33 474. Later at around 9:16 p.m. in the same evening, when D6 addressed the people at Tim Mei Avenue in the presence of D2, D4 and D5 (all on stage), D6 asked the people present to keep providing reinforcement at the bridge of Admiralty Centre. D6 said: “Well, everyone, please keep asking your friends on Facebook, asking your relatives (and) friends to keep, er, providing reinforcement?”[135] 475. The above speeches of D6 in Exhibits P28 and P33 show that it was the intention of D6 that the mass demonstration in progress at Tim Mei Avenue should last for an indefinite period. In my judgment, it follows that the intended duration of the over-cramming of “nearby carriageways” and Admiralty in Exhibits P14 and P49 must also be indefinite. Exhibit P32 476. Later at around 9:48 p.m. in the same evening, when D6 was on the main stage with D2, D4, D5 and D7, D4 to D7 each addressed the people at Tim Mei Avenue, D6 said amongst other things, that it was the main stage which drew most people’s attention. He asked the people present to listen carefully to the information disseminated by the main stage. He advised how new supporters could enter the venue at Tim Mei Avenue.[136] 477. The above speech of D6, said in the presence of D2, D4, D5 and D7, shows the importance of the main stage. Exhibit P35 478. Later at around 10:04 p.m. in the same evening, D5 and D6 addressed the people at Tim Mei Avenue in the presence of D2 (on stage) and D3 (below stage), D5 and D6 said amongst other things “Encirclement is strength”. D6 also said the number of participants at Tim Mei Avenue, estimated to be 50,000 people, marked a new record high for civil disobedience. He asked if the people present were afraid of being arrested.[137] 479. The speech of D6 in Exhibit P35 was made before D6’s plea to over-cram Admiralty. In other words, when D6 asked the people at Tim Mei Avenue to keep asking more people to join the movement to over-cram Admiralty, he knew that there were already 50,000 people at Tim Mei Avenue. Exhibit P37 480. Later at around 10:24 p.m. in the same evening, when D5, D6 and D7 addressed the people at Tim Mei Avenue in the presence of D1, D2 and D4 (all on stage), D6 said amongst other things: “All right, and, er, the friends by the sides, please pay attention. This’s because we are going to command the friends by the sides, probably some duties of causing obstruction. Regarding the people at er, Lung Wui Road, near Lung Wui Road, and the people near CITIC Tower, well, try - - (you) can try to make use of the resources nearby to cause obstruction.” D6 said the protestors must defend the stage and would not leave until the arrested student leaders were released.[138] Exhibit P38 481. At around 10:56 p.m. in the same evening, when D6 was on the main stage with D4 and D7, D6 addressed the people at Tim Mei Avenue. D6 told the people present that more people were needed at Lung Wui Road near Legislative Council and he asked supporters who were available to help to move over there.[139] 482. At around 11:06 p.m. in the same evening, when D6 was on the main stage with D4 and D7, D6 told the people how they should conduct themselves to slacken the speed of clearing the site by the police.[140] 483. What D6 said in Exhibits P37 and P38 in the presence of D1, D2 and D7 were just a few of the many incidents the main stage was used as a command centre in the movement. Exhibit P44 484. After the announcement to launch the Occupy Central movement made by D1 at around 1:36 a.m. on 28th September 2014, D6 chanted slogans with D1 to D3 and D7 on the stage, amongst the slogans chanted by D6 was “Occupy Central formally begins”, chanted twice by D6. D6 also addressed the people at Tim Mei Avenue, in the presence of D2 and D4, and he said amongst other things: “….Well, everyone just heard the official announcement. We move on a new chapter of democratic movement. Everyone, let us, ask more people to come out.” (Emphasis added)[141] Exhibit P45 485. In the early hours on 28th September 2014, when D6 was on the main stage with D2, D4 and D7, D6 addressed the people at Tim Mei Avenue and said amongst other things “I think, here, the understanding everyone has today about this movement, why I - - we- - our class boycott this time successfully made Occupy Central start earlier.” (Emphasis added)[142] 486. The speeches made by D6 in Exhibits P44 and P45 show that it was the intention of the HKFS and the Trio to announce the launch of the Occupy Central at 1:36 a.m. on 28th September 2014. Exhibit P48 487. On the issue whether the main stage was used as a command centre, it should be noted that at around 3:42 a.m. on 28th September 2014, when D6 was on the main stage with D1 to D3 and D7, D6 addressed the people at Tim Mei Avenue. In the said address, D6 said the main stage would still be used as a command centre after the assembly was over. The command centre, i.e. the main stage, would give directions to the people present as to where they should keep guard.[143] D7 Exhibit P27 488. In the case of D7, when he addressed the crowd on the stage in the presence of D2, D5 and D6 (all on stage) at Tim Mei Avenue in the afternoon of 27th September 2014, he said: (i) he was a representative of the HKFS and he thanked all those who stayed at Tim Mei Avenue; (ii) he condemned the police for the attack on the protestors the night before; (iii) that the then Chief Executive of the HKSAR Leung Chun Ying had not responded to the demand made by HKFS earlier that morning, ie he should give an explanation for his decision to attack the citizens and that all arrested persons should be released; (iv) D7 asked the participants at Tim Mei Avenue to stay with the HKFS until the Government responded to these two requests; (vi) D7 called for the people at Tim Mei Avenue to continue to appeal to their friends and relatives to go to the venue at Tim Mei Avenue to support the movement; (vii) D7 called for material supplies be brought to the venue; (viii) D7 asked the people at Tim Mei Avenue to ask others to counter-besiege the police: “even though (they) cannot enter the venue, (I) hope (you) would ask your relatives and friends to come and counter-besiege ,…”[144] 489. The speech of D7 shows that the tactic of counter-besieging the Police he advocated in the presence of D2, D5 and D6 was to besiege the police officers who were besieging the venue from outside. Exhibit P35 490. At around 9:48 p.m. on 27 September 2014, when D7 was on the main stage with D2, D4, D5 and D6, D4 to D7 each addressed the people at Tim Mei Avenue, D7 said amongst other things; (i) although the police had stated that the assembly at Tim Mei Avenue was an illegal one, D7 believed the people at the venue were not frightened. The HKFS appealed to the people at Tim Mei Avenue to consider whether they would stay at the venue after considering and balancing the pros and cons; (ii) D7 appealed to the people present to ask their friends to go the venue via Tamar Park; (iii) D7 also said:- “Here, we want to appeal to everyone, to ask more friends to come, bringing over all the supplies and counter-circle the Government. Would you all be frightened of the ruling power?” (Emphasis added)[145] 491. In Exhibit P35, D7 advocated once again the move of counter-besieging, this time in the presence of D2, D4, D5 and D6. By that time, D7 knew that the Police had declared the assembly in progress was an unlawful assembly. D2, D4, D5 and D6 who were present, were also aware of the situation. Exhibit P38 492. At around 10:55 p.m. on 27th September 2014, when D7 was on the main stage with D4 and D6, D7 asked the people at Tim Mei Avenue to go to the end of Lung Wui Raod to counter-besiege the police. D7 said it was necessary to build an effective defence line at Legislative Council and Lung Wu Road.[146] 493. In Exhibit P38, D7 advocated once again the use of the tactic of counter-besieging the police, this time he did it in the presence of D4 and D6. Exhibit P40 494. At around 11:24 p.m. in the same evening, when D7 was with D4 and D6 on the main stage, he said to the people at Tim Mei Avenue:- “Well! As what we have seen, actually, there are huge crowds of people everywhere. Well! We, starting from Harcourt Road to the entire Tim Mei Avenue, all were (packed with) people, the open space of the Legislative Council is also full of people, so everybody keeps asking people to come!” D7 echoed and said “But, let’s not be satisfied with the current situations because we got quite a lot of news that the police were trying to make some attacks at different areas…….” (Emphasis added)[147] 495. What D7 said in Exhibit P40 shows that as D7 urged the supporters to counter-besiege the Police, he also continued to ask for more supporters to join the movement. Bearing in mind the essence of the tactic of counter-besieging was that the supporters should counter-besiege the Police from outside, an increase in the numbers of supporters at various places, e.g. Harcourt Road and the Academy for Performing Arts, meant that there would be more people gathering outside the venue at Tim Mei Avenue. In my judgment, D7 was aware of the situation, so were D4 and D6, who were present. Exhibit P43 496. At around 1:33 a.m. on 28th September 2014, when D7 was with D1 to D3 and D6 on the main stage, D7 addressed the people at Tim Mei Avenue, in his speech, D7 explained how the constitutional reform was related to the civil disobedience movement in progress, with 10,000 citizens participating. D7 also said:- “Here, we are making history. Today. We are going to - - we are going to make an announcement a moment later.”[148] Exhibit P44 497. At around 1:36 a.m. on 28th September 2014, immediately before the announcement by D1, D7, who was on the stage with D1 to D4 and D6, addressed the people at Tim Mei Avenue and said:- “The Occupy Central trio will put their resources into this movement and promote this movement for democracy together with us, with the students and with every citizens. Disobedience or deliberation on our city’s future is not (something) that can be undertaken by one exclusive group, by the Occupy Central trio, by HKFS, or by Scholarism……..We, students, hereby make an announcement today: today will be our disobedience – it’s the day of community-wide civil disobedience. From here, together we will get ready to occupy Central. Without the support of everyone of you here, this movement would not have been possible. Here, we appeal to the many of (you) that starting from tomorrow, call upon all your friends and relatives to join us, to come out to overthrow this autocratic constitutional system together, okay?” (Emphasis added)[149] 498. In my judgement, the above speeches of D7 in Exhibits P43 and P44 show: (i) constitution reform remained an important theme of the movement in progress at Tim Mei Avenue, together with other themes, e.g. to support the arrested protestors. As said, it would take time for the Government to respond to the demand for constitutional reform on issue as important as the universal suffrage for the election of the Chief Executive of the HKSAR; and (ii) the announcement referred to by D7 in Exhibit P43 must be the announcement D7 made in Exhibit P44, i.e. “…We, students, hereby make an announcement today: today will be our disobedience – it’s the day of community-wide civil disobedience. From here, together we will get ready to occupy Central.” 499. The above announcement of D7 shows that the HKFS was prepared to launch the Occupy Central movement, which they saw as a civil disobedience movement, with the OCLP, that was why D7 said they would get ready “to occupy Central”. If it was all along the understanding of D7 that the HKFS only expected the OCLP to put in the resources of the OCLP in support of the movement in progress in Tim Mei Avenue without announcing the launch of the Occupy Central movement, I do not think D7 would say what he said in Exhibits P43 and P44. 500. It should also be noted that immediately after the announcement by D1, D6 and D7 chanted with D1 to D3, amongst the slogans chanted was “Occupy Central formally begins”[150], D7 then addressed the people at Tim Mei Avenue and said:- “Here, I want to say (something) to everyone here(:) with the many of (us) having come forward, everyone, do (you) still think the Police is able to continue to attack us, the citizens? Let us go down this path of democracy together, okay? No civic nomination…then (go for) civil disobedience. No civic nomination…then (go for) civil disobedience.” D6 and D7 showed considerable comradeship with the Trio and the OCLP at the time and immediately after the announcement of the launch of the Occupy Central movement. Exhibit P45 501. In the early hours on 28th September 2014, D7 addressed the people at Tim Mei Avenue in the presence of D4, D5 and D6. D7 said amongst other things:- “… Are we able to safeguard every one of us again, (and) hold this defence line today? (I) hope that (you), friends, will continue to provide reinforcement to the key locations, I repeat once again, including Harcourt Road, that is the stronghold at Harcourt Road off Tim Mei Avenue, including the stronghold (from) the exit of the Legislative Council (Complex) car park to this, CITIC Tower; including friends at the roundabout on Lung Wui Road on that side, and also including the exit of the Legislative Council Demonstration Square…” and “It’s everyone in the crowds here who has enabled Occupy Central to start today. As long as we can persevere (with it), the next step will be the road to universal suffrage….” (Emphasis added)[151] 502. The above speech of D7, said in the presence of D4 to D7, apart from showing a strong determination to carry on the occupy movement after the announcement by the Trio at 1:36 a.m., it also shows that D7 of the HKFS saw they had launched the Occupy Central movement with the Trio and they were fighting for their advocated form of universal suffrage, not just for the protection of student leaders arrested. It should be noted that the part of Harcourt Road referred to by D7 was the part of Harcourt Road off Tim Mei Avenue, the location where there was a flower bed. Exhibit P48 503. On the issue whether the main stage was used as a command centre, it should be noted that at around 3:49 a.m. on 28th September 2014, when D7 was on the main stage with D1 to D4, D7 said amongst other things:- “S-starting from this part… … our stage will turn into a command centre from a spotlight one. We’ll keep releasing information about the defense deployment of the police to you.” D7 also said “Well, you should do what I have just said when you expect that you may be arrested……..However, if, unfortunately, (you) are carried away; when you are being carried away, remember to fold your arms and legs, only by doing so could (you) obstruct the police power…” (Emphasis added)[152] Exhibit P53 504. In the morning of 28th September 2014, when D7 was on the main stage with D1 to D3 and D5, D7 addressed the people at Tim Mei Avenue. He appealed to more people to participate in the movement. He suggested that many spontaneous activities could be organized at the venue. He said:- “By the time we’ve got sufficient people to come out, we can go on to fight for the constitutional future and the constitutional democracy that belong to Hong Kong.” He said with reinforcement by supporters, “..we can put down roots here…after we have occupied the place, how are we going to do when it comes to giving this place its meaning?” (Emphasis added)[153] 505. In the above speech of D7, he showed once again constitutional reform was an important purpose of the movement in progress. The suggestion by D7 that the participants could “put down roots” at the venue shows that D7 intended the occupation movement at Tim Mei Avenue to be an indefinite one. It follows that when D7 asked the people to fill up Admiralty and Wanchai and when he asked the people to give encouragement to the people dashing out to occupy the road(s),[154] the intended duration of the over-cramming of Admiralty and Wanchai must also be for an indefinite period. D1 to D3 and D7, who were present, were aware of the content of D7’s speech and the situation. Exhibit P66 506. At around 12:32 p.m. on 28th September 2014, when D7 was on the main stage with D2 and D5, D7 addressed the people at Tim Mei Avenue and asked them to keep on asking more friends to come to counter-besiege the cordon line of the police.[155] 507. At around 12:55 p.m. on 28th September 2014, when D7 was on the main stage with D2 and D5, D7 addressed the people present and asked them to call for more friends to go counter-besiege the police. D1 was below stage during the said address.[156] 508. The plea made by D7 in Exhibit P66 was not to ask the new supporters joining the movement to enter the venue at Tim Avenue, but to counter-besiege the cordon line of the police. D1, D2, D5 and D7 were aware of the plea made by D7 and the situation. 509. Shortly after 1 p.m. on 28th September 2014, when D7 addressed the people at Tim Mei Avenue on the main stage, he said amongst other things:- “However, if a comrade is being carried away from the site, we should sprawl out (and) relax your body, it’s because this is the way to exhaust the manpower of the police to the greatest extent.” (Emphasis added)[157] 510. In my judgment, it was the clear intention of D7 that the occupy movement should last for an indefinite period of time, hence he asked the people to conduct themselves in a way that would have the effect of exhausting the manpower of the police to the greatest extent. Exhibit P67 511. At around 1:34 p.m. on 28th September 2014, when D7 was on the main stage with D1 to D3 and D5, D7 spoke in the presence of D1 to D3 and D5, he said:- “Here, we are appealing to all (our) friends, for those of (you) who are watching the live broadcast, if you want to come and support (us), the bridge at Admiralty (Centre) has been closed already, we appeal to all of you (our) friends to go to, go to Lung Wui Road from another bridge to do a counter besiege. Go to the Academy for Performing Arts from another bridge and then counter-besiege the police on Lung Wui Road.” (Emphasis added)[158] 512. At around 1:45 p.m. on 28th September 2014, when D7 was on the main stage with D1, D2 and D5, D7 addressed the people at Tim Mei Avenue and said:- “Here, we are appealing to all of you (our) friends in Hong Kong, friends who are seeking democracy in Hong Kong, no matter if you are willing to bear the criminal responsibility or not, I will also appeal to you, come here as soon as possible, to this place to counter-besiege the police, it’s because counter-besieging the police does not amount to an act of disobedience, it is not necessary to bear such legal risk. Certainly, if the police can show (and) say that you have obstructed (them) in their duty, that will certainly be another story. However, we believe if sufficient people come out to counter-besiege the police, the police will have no way to clear the site.” (Emphasis added)[159] Exhibit P68 513. At around 2:34 p.m. on 28th September 2014, when D7 was on the main stage, he addressed the people at Tim Mei Avenue that the crowds supporting the movement at Lung Wui Road had already spread to the Hong Kong Academy for Performing Arts. Other defendants present were: D1, D2 and D5 (on stage); D3 (below stage).[160] 514. The above speech of D7 in Exhibit P68 shows that at around 2:34 pm, D7 knew that there were a lot of supporters at the Academy for Performing Arts; the Trio were also aware of the situation at the time as they were present. 515. When D7 addressed the people again at around 3:27 p.m., in the presence of D1, D2 and D5 (on stage) and D3 (below stage), D7 knew there were roughly more than 10,000 people blocking “the road from Admiralty Centre, the whole of KFC to Rodney Street” and there were another 10,000 people the Academy for Performing Arts, it was against this background that D7 spoke on the main stage at Tim Mei Avenue and called for the filling up of the whole of Admiralty and Wan Chai, and the besiege of the Central Government Offices from the side of Rodney Street and from the side of the Academy for Performing Arts.[161] 516. From the video evidence and transcripts before me, I am aware that there were many instances where people at Tim Mei Avenue were asked by the relevant defendants to fortify various defence lines at Tim Mei Avenue, e.g. the junction of Harcourt Road and Tim Mei Avenue and the roundabout at the junction of Tim Mei Avenue and Lung Wui Road. 517. Given my findings of the possible effect of the cordoning off the carriageway of Tim Mei Avenue had on D1 to D7. I find that the Prosecution fails to prove that D1 to D7 had the mens rea (i) to incite the people present at Tim Mei Avenue to cause public nuisance at Tim Mei Avenue; (ii) to incite the people present at Tim Mei Avenue to incite others to cause public nuisance at Tim Mei Avenue. 518. However, the pleas by the relevant defendants to the people at Tim Mei Avenue to occupy the public places and carriageway of Tim Mai Avenue is relevant to the consideration of the intended duration of the occupation of the roads in Admiralty, Central and Wanchai in the neighbourhood of Tim Mei Avenue. In my judgment, if the relevant defendants intended the occupation of Tim Mei Avenue should be for an indefinite period, when they incited the incitees or incited the incitees to incite others to occupy public places or roads in Admiralty, Central and Wanchai in the neighbourhood of Tim Mei Avenue, it must be the intention of the relevant defendants that the occupation of these public places and roads should also be for an indefinite period of time, bearing in mind the importance of the tactic of “counter-besieging the police” emphasized in the speeches of the relevant defendants. 519. I now turn to the incitements made by the relevant defendants to obstruct public places and roads in the neighbourhood of Tim Mei Avenue. The Words of Incitement by D1 in Exhibit P20 520. At around 4:10 p.m. on 27th September 2014, when D1 addressed the people at Tim Mei Avenue in the presence of D2, D4 and D6, D1 said, amongst other things:- “….Let’s over-cram Admiralty first. Where shall (we) over-cram next? Central! We must be able to see the arrival of genuine universal suffrage in Hong Kong!” (Emphasis added)[162] 521. In my judgment, the above statement of D1, which amounted to an incitement to the persons present at Tim Mei Avenue to over-cram Admiralty first and then Central, was made to the people at Tim Mei Avenue and heard by those within the audibility range of the public address system. 522. It was all along the plan of the Trio that their Occupy Central movement when implemented, would involve occupation of the public roads by protestors. By calling for the over-cramming of Admiralty and Central, D1 clearly meant the occupation of the public places and roads in Admiralty and Central. As discussed, the occupation D1 incited was not an occupation of any public place or road in Admiralty and Central, but the occupation of “public places and roads in the neighbourhood of Tim Mei Road”. It was through the occupation of the public places and roads in the neighbourhood of Tim Mei Road that the student movement at Tim Mei Avenue would be supported. 523. In my judgment, the reference to “the arrival of genuine universal suffrage” in Hong Kong in the incitement shows that the occupation was intended to be for an indefinite period. As discussed, it would take time for the Government to consider and respond to the demand for constitutional reform. 524. I have taken onto consideration all the circumstances leading to the making of the incitement by D1 in Exhibit P20. In my judgement, the scale of the occupation was extensive, both Admiralty and Central were important commercial districts and the roads in the district were important thoroughfares, as they always have been. The intended occupation was for an indefinite period. On the other hand, I am aware that the occupation advocated was a peaceful one and the purpose of the occupy movement was to strive for universal suffrage. In my judgment, what D1 incited the people at Tim Mei Avenue in Exhibit P20 to do was not a reasonable use of the roads in Admiralty and Central in the neighbourhood of Tim Mei Square. The obstruction to the traffic and inconvenience caused to the public would be so serious that would exceed the bounds of reasonableness and the protection given by the Basic Law to the right to peaceful demonstration. I find that the obstruction that would be caused was not warranted by law. 525. From the computer certificates,[163] I am satisfied that the over-cramming of the public places and roads in the neighbourhood of Tim Mei Road would result in the suffering of common injury by common member of the public. 526. From the evidence, I am sure that when D1 made the incitement in Exhibit P20, he intended that the incitees, i.e. the people at Tim Mei Avenue would do the act incited by him, i.e. obstructing public places and roads in the neighbourhood of Tim Mei Avenue, with the mens rea of public nuisance, i.e. the incitees knew, or ought to have known (because of the means of knowledge were available to him) the consequence of what they did. In this case the incitees were the people participating in the public assembly at Tim Mei Avenue, and hence, they must be aware of what was going on at the time of the incitement and what the effect of an indefinite obstruction of the roads in the neighbourhood of Tim Mei Avenue would be if they acted as incited. 527. In my judgment, on the basis of what D1 said in Exhibit P20, i.e.: “….Let’s over-cram Admiralty first. Where shall (we) over-cram next? Central! We must be able to see the arrival of genuine universal suffrage in Hong Kong!”, D1 had unlawfully incited persons at Tim Mei Avenue, Admiralty to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue without need to resort to the doctrine of joint enterprise as a basis for liability. The Words of Incitement by D4 in Exhibit P20 528. At around 4:10 p.m. on 27th September 2014, after the incitement by D1, D4 addressed the people at Tim Mei Avenue in the presence of D1, D2, and D6, D4 echoed D1 (“Benny”) and said, amongst other things:- “Hey, let’s go to occupy Admiralty now. Thank you, Benny. ‘Chung’ (transliteration), now it is the ‘Chung’ (transliteration) of ‘Kam Chung’ (transliteration) (the name of Admiralty in Chinese). Later, it will be the ‘Chung” (transliteration) of ‘Chung Wan’ (the name of Central in Chinese)…..” and “We hope to over-cramming Tim Mei Avenue, right? Over-cram Tim Mei Avenue! Over-cram Tim Mei Avenue! Over-cram Tim Mei Avenue! Over-cram Admiralty! Over-cram Admiralty! Over-cram Admiralty! Good! ….” (Emphasis added)[164] 529. In my judgment, the above statement of D4 which amounted to an incitement to the persons present at Tim Mei Avenue to over-cram Admiralty first and then Central, was made to the people present at Tim Mei Avenue and heard by those within the audibility range of the public address system. 530. The use of the word “over-cram” shows the number of participants intended by D4 would be enough to over-cram Admiralty and Central. The words used by D4, i.e. ‘Chung’ (transliteration), now it is the ‘Chung’ (transliteration) of ‘Kam Chung’ (transliteration) (the name of Admiralty in Chinese). Later, it will be the ‘Chung” (transliteration) of ‘Chung Wan’ (the name of Central in Chinese)…..” show that D4 intended the occupation would last for a period of time. D4 was clearing echoing what D1 had said about “the arrival of genuine universal suffrage” as a result of the occupy movement. What D4 said in Exhibit P20 was consistent with what she had said earlier, i.e. the speeches in Exhibits P7, P9 to 11 and P16. For the reasons given in my foregoing analysis, it is clear from the speeches made by D4 in these exhibits that she intended to prolong the occupy movement as long as possible. In my judgment, D4 was inciting the people at Tim Mei Avenue to occupy the public places and roads in the neighbourhood of Tim Mei Avenue for an indefinite period. 531. It should be noted that the incitement by D4 in Exhibit P20 was made at a time when the carriageway of Tim Mei Avenue was occupied by protestors and the traffic of Tim Mei Avenue was completely blocked. By calling for the over-cramming of Admiralty and Central, D4 clearly meant the occupation of the public places and roads in Admiralty and Central. Given the use of the words ‘occupy’ and ‘over-cramming’ and the fact that the protestors at Tim Mei Avenue were on both the pavements and the carriageway of Tim Mei Avenue, in my judgment, a clear message was sent to the audience at Tim Mei Avenue that they were asked to over-cram not just public places, but also roads of Admiralty and Central in the neighborhood of Tim Mei Avenue. 532. As discussed, the occupation that D4 incited was not an occupation of any public place or road in Admiralty and Central, but the occupation of “public places and roads in the neighbourhood of Tim Mei Road”. It was through the occupation of the public places and roads in the neighbourhood of Tim Mei Road that the student movement at Tim Mei Avenue would be supported. 533. Mr. Ching Y Wong SC submitted at Para. 4.1.2 of D4’s Closing Submissions “Thus to prove that ‘by remaining at and occupying TMA’ a nuisance would be caused, the Prosecution needs to prove that for 27th and 28th, D4 knew when she incited, that there were no proper notifications given for these days or if such notifications were given, that they were properly prohibited by the COP.” (Commissioner of Police). 534. It is clear from the video evidence that D4 was aware that the public meeting in progress at Tim Mei Avenue. In fact, shortly past midnight on 28th September 2014, she warned the people present that the public meeting at Tim Mei Avenue was an unauthorized one.[165] It should also be noted that in Exhibit P11, D4 asked everyone to participate in civil disobedience, which denoted the law would be violated. As said, the “warranted by law” element required for the offence of public nuisance cannot be proved by the absence of proper notification. 535. More importantly, the incitement made by D4 in Exhibit P20 concerns the plea to occupy Admiralty and Central, not just Tim Mei Avenue. Given the use of the word “over-cram’ and the plea to occupy Admiralty and Central, I am sure D4 knew there was no notifications given to the Police for a public gathering to occupy Admiralty and Central on 27th and 28th September 2014. 536. Mr. Ching Y Wong SC submitted that the Letter of Prohibition (Exhibit P152) was ultra vires and was thus of no effect. I have explained in the earlier part of the judgment why Exhibit P152 was valid. Given my findings on the effect of cordoning off Tim Mei Avenue by the Police on Charge 2 and Charge 3, the incitements that could form the subject matters of complaint of Charge 2 and Charge 3 are those related to obstruction of public places and roads in the neighbourhood of Tim Mei Avenue, not the ones at Tim Mei Avenue. 537. I have taken onto consideration all the circumstances leading to the making of the incitement by D4 in Exhibit P20. In my judgement, the scale of the occupation that D4 incited was extensive; both Admiralty and Central were important commercial districts and the roads in the district were important thoroughfares, as they always have been. The intended occupation was for an indefinite period. On the other hand, I am aware that the occupation advocated was a peaceful one and the purpose of the occupy movement was to strive for universal suffrage. In my judgment, what D4 incited the people at Tim Mei Avenue in Exhibit P20 to do was not a reasonable use of the roads in the neighbourhood of Tim Mei Square. The obstruction to the traffic and inconvenience caused to the public would be so serious that would exceed the bounds of reasonableness and the protection given by the Basic Law to the right to peaceful demonstration. I find that the obstruction that would be caused was not warranted by law. 538. From the computer certificates,[166] I am satisfied that the over-cramming of the public places and roads in the neighbourhood of Tim Mei Road would result in the suffering of common injury by common member of the public. 539. From the evidence, I am sure that when D4 made the incitement in Exhibit P20, she intended that the incitees, i.e. the people at Tim Mei Avenue would do the act incited by her, i.e. obstructing public places and roads in the neighbourhood of Tim Mei Avenue, with the mens rea of public nuisance, i.e. the incitees knew, or ought to have known (because of the means of knowledge were available to him) the consequence of what they did. In this case the incitees were the people participating in the public assembly at Tim Mei Avenue and hence, they must be aware of what was going on at the time of the incitement and what the effect of an indefinite obstruction of the roads in the neighbourhood of Tim Mei Avenue would be if they acted as incited. 540. In my judgment, on the basis of what D4 said in Exhibit P20, i.e.: “Hey, let’s go to occupy Admiralty now. Thank you, Benny. ‘Chung’ (transliteration), now it is the ‘Chung’ (transliteration) of ‘Kam Chung’ (transliteration) (the name of Admiralty in Chinese). Later, it will be the ‘Chung” (transliteration) of ‘Chung Wan’ (the name of Central in Chinese)…..” and “We hope to over-cramming Tim Mei Avenue, right? Over-cram Tim Mei Avenue! Over-cram Tim Mei Avenue! Over-cram Tim Mei Avenue! Over-cram Admiralty! Over-cram Admiralty! Over-cram Admiralty! Good! ….” (Emphasis added)[167] D4 had unlawfully incited persons at Tim Mei Avenue, Admiralty to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue without need to resort to the doctrine of joint enterprise as a basis for liability. The Incitements by D5 and D7 in Exhibit P74 (Pg. 1588-1589, 1591-1592 and 1593) 541. At around 3:35 p.m. on 28th September 2014, when D5 and D7 addressed the people at Tim Mei Avenue in the presence of D1 and D3, D5 and D7 said amongst other things:- “D5: ……Our –our friends who gather round here to watch have already over-crammed two more roads. D7: Hurray! D5: (The crowd) has already over-crammed two roads (outside) the Hong Kong Academy for Performing Arts. D7: And more citizens are coming successively. (Let’s) continue to occupy the roads together. D5: We are asking more friends to come here, (we are asking) more friends to come here. Let’s over-cram Admiralty. (Let’s) over-cram Wan Chai. (Let’s) over-cram Central. D7: Friends on that side, keep it up. We know that some friends there have already prepared to dash out to occupy the road(s). Let’s cheer them on, shall we? D5: Comrades, let’s over-cram Wan Chai together. (Let’s) over-cram Admiralty. (Let’s) over-cram Central.…..” (Emphasis added)[168] 542. In my judgment, the above statements of D5 and D7 in Exhibit P74 at Pg. 1588-1589 amounted to (i) an incitement to the persons present at Tim Mei Avenue to over-cram Admiralty, Wanchai and Central in the neighbourhood of Tim Mei Avenue; and (ii) incitement to the persons present at Tim Mei Avenue to incite others to overcram Admiralty, Wanchai and Central in the neighbourhood of Tim Mei Avenue. 543. I am sure the above incitements were made to the people at Tim Mei Avenue and heard by those within the audibility range of the public address system. 544. Later on, at around 4:06 p.m. on 28th September 2014, D5 and D7 addressed the crowd at Tim Mei Avenue in the presence of D1 and D2 (on stage) and D3 (below stage) and said:- “D7: We have got news that…. On the side of Harcourt Road.. many friends have already gone out onto the road! (They) have already occupied the road! Hurray! D5: Occupy the road! D7: Occupy the road! D5: Occupy the road! D7: Occupy the road! D5: Occupy the road! D7: Occupy the road! D5: Hurray! D7: Hurray! D5: Hurray! D7: Hurray!” (Emphasis added)[169] 545. I am sure the above statements of D5 and D7, which amounted to an incitement to occupy the carriageways of Harcourt Road, were heard by those who were within the audibility range of the public address system. It should be noted that Harcourt Road is in the neighbourhood of Tim Mei Avenue. 546. I am not sure, however, if the targeted audience of the incitement in Exhibit P74 at Pg. 1591-1592 were the people at Tim Mei Avenue. Looking at the contents of what D5 and D7 said at Pg. 1591-1592, D5 and D7 were telling the people at Tim Mei Avenue what was happening at Harcourt Road. It seems to me D5 and D7, by their repeated utterances of “Occupy the road” and “Hurray” at Pg. 1591-1592, were encouraging, hence inciting the persons at Harcourt Road who had already occupied the road, i.e. people who were not at Tim Mei Avenue, to continue with their occupation of the carriageways of Harcourt Road. 547. For these reasons, the incitement in Exhibit P74 at Pg. 1591-1592 cannot be said to be an incitement made to “the persons present at Tim Mei Avenue” as particularized in Charge 2. 548. Later on, at around 4:10 p.m. on 28th September 2014, D5 and D7 addressed the people at Tim Mei Avenue in the presence of D3 (below stage) and said:- “D5: Our picket has just made a report that the 6 carriageways of H-Harcourt Road bound for Central as well as Causeway Bay, the 6 carriageways have already been over-crammed (with people) sitting (there)! We have already over-crammed 6 carriageways (with people) sitting (there). Keep coming! Keep coming! Keep coming! D7: Keep coming” (Emphasis added) [170] 549. I am sure that the above statements of D5 and D7 in Exhibit 74 at Pg. 1593 amounted to an incitement to occupy the carriageways of Harcourt Road in the neighbourhood of Tim Mei Avenue. I am sure that the above statements were heard by those within the audibility range of the public address system. 550. Likewise, I am not sure, however, if the targeted audience of the incitement were the people at Tim Mei Avenue. Looking at the contents of what D5 and D7 said at Pg. 1593, they were telling the people at Tim Mei Avenue what was happening at Harcourt Road. In my judgment, the repeated utterances of the words “Keep coming” show that the defendants were not inciting the persons who were already present at Tim Mei Avenue. It seems to me D5 and D7 were encouraging, hence inciting, people who were not at Tim Mei Avenue to come and sit on the carriageways of Harcourt Road to over-cram it. For these reasons, the incitement at Pg. 1593 cannot be said to be an incitement made to “the persons present at Tim Mei Avenue” as particularized in Charge 2. 551. In my judgment, of the various incitements made by D5 and D7 in Exhibit P74 (Pg. 1588-1589, 1591-1592 and 1593), only the incitements at Pg. 1588-1589 were made to “the persons present at Tim Mei Avenue”, i.e. the incitees particularised in Charges 2 and 3. 552. The incitements at Pg. 1588-1589 were made by D5 and D7 at around 3:35 p.m. on 28th September 2014, when D5 and D7 addressed the people at Tim Mei Avenue in the presence of D1 and D3. D5 and D7 said:- “D5: ……Our –our friends who gather round here to watch have already over-crammed two more roads. D7: Hurray! D5: (The crowd) has already over-crammed two roads (outside) the Hong Kong Academy for Performing Arts. D7: And more citizens are coming successively. (Let’s) continue to occupy the roads together. D5: We are asking more friends to come here, (we are asking) more friends to come here. Let’s over-cram Admiralty. (Let’s) over-cram Wan Chai. (Let’s) over-cram Central. D7: Friends on that side, keep it up. We know that some friends there have already prepared to dash out to occupy the road(s). Let’s cheer them on, shall we? D5: Comrades, let’s over-cram Wan Chai together. (Let’s) over-cram Admiralty. (Let’s) over-cram Central.…..” (Emphasis added)[171] 553. In my judgment, what D5 and D7 said at Pg. 1588-1589 amounted to (i) incitement to commit public nuisance; and (ii) incitement to incite public nuisance. Incitement to Commit Public Nuisance (Charge 2) 554. In my judgment, at Pg. 1588-1589, D5 and D7 were not only encouraging the protestors who had prepared to dash out to occupy the road(s), they were also inciting the people present to over-cram Admiralty, Wanchai and Central. Given the intended duration of the occupy movement, protestors who were at a location (e.g. Tim Mei Avenue) at one point of time might move to another location (e.g. Harcourt Road) at another point of time. The words “Let’s” used by D5 and D7 show that the incitements were directed to the persons present at Tim Mei Avenue as well as those at Harcourt Road. 555. The use of the word “over-cram” by D5 at Pg. 1588-1589 shows the numbers of participants intended by D5 would be sufficient to over-cram the roads in Wanchai, Admiralty, Central and Harcourt Road. Although D7 did not use the word “over-cram”, he was obviously echoing D5’s plea to over-cram the roads in Wanchai, Admiralty, Central in general and Harcourt Road in particular. 556. I am sure the “road(s)” referred to in D7’s utterance of “: Friends on that side, keep it up. We know that some friends there have already prepared to dash out to occupy the road(s). Let’s cheer them on, shall we?” meant the road(s) in the neighbourhood of Tim Mei Avenue but not Tim Mei Avenue. It is clear from what D7 said the location he referred to was not far away from the main stage at Tim Mei Avenue. It is also clear from what D7 said the location he referred to was not Tim Mei Avenue. Tim Mei Avenue had been cordoned off by the police since 26th September 2014, it was unnecessary for protestors to “dash out” to occupy Tim Mei Avenue at around 3:35 p.m. on 28th September 2014, by that time, Tim Mei Avenue had already been an occupied area of the Occupy Central movement for almost 2 days. 557. In my judgment, the fact that the word “over-cram” was used in the incitement at Pg. 1588-1589 shows that the number of participants intended by D5 and D7 in their pleas to over-cram Wanchai, Admiralty and Central and Wanchai would be sufficient to over-cram the roads in the districts they mentioned. Reading the statements of D5 and D7 in context, the roads in Wanchai, Admiralty and Central they referred to must be the roads in the neighbourhood of Tim Mei Avenue, e.g. Harcourt Road. 558. What D5 said at Pg. 1588-1589 was consistent with what he had said in some of his speeches earlier, i.e. that they had entered an era of universal struggle and people from all walks of life were engaging in universal struggle;[172] that more supporters were needed at Tim Mei Avenue[173] and that the demonstration in progress at Tim Mei Avenue was one to last indefinitely, i.e. it was “a fight in relays”.[174] 559. Mr. Pang SC drew my attention to what D5 said in a pre-OCLP gathering on 1st July 2013 (Exhibit P122/Pg. 703). He said at the time: “We will be arrested. We will then make a second move. We will then submit to arrests peacefully. We will have surrendered ourselves, we will not defend. We (will) stretch out a pair of hands, (as if saying) make the arrests if you please. Let us chant together, (c) Occupy Central. Civil Disobedience. Occupy Central. Civil Disobedience. Arrest me if you please. I myself will bear the consequence. I myself will bear the consequence (.) Let’s keep this as a record. Thank you everybody, thank you to the Trio.” (Emphasis added) 560. Mr. Pang SC also drew my attention to what D5 said at around 7:23 p.m. – 7:25 p.m. on 27th September 2014, as recorded in Exhibit P28 at Pg.1133-1134. D5 was telling people to send their personal details to an arrest support team to prepare for their arrests. 561. Mr. Pang SC submitted that what D5 said in Exhibits P122 and P28 shows that the actual intention of the defendants was all along to get arrested by the police after a few days of arrest. 562. In my judgment, the fact that D5 asked for the over-cramming of places beyond Tim Mei Avenue, i.e. the over-cramming of the public places and roads in Wanchai, Admiralty and Central in the neighbourhood of Tim Mei Avenue, taken together with what D5 said in Exhibit P61, i.e. that the demonstration at Tim Mei Avenue was “a fight in relays”, and what he said in Exhibit P35, i.e. he challenge the Police to clear and lock up a turnout of 50,000 people. I am sure that D5 intended that the occupation he incited would be a continued occupation for an indefinite period. I do not see how Exhibit P122 can assist D5. The speech was made by D5 in July 2013, though he was talking about arrest for participation in the civil disobedience launched by D1 to D3. The details of the Occupy Central movement had yet to be decided. The fact that he anticipated he would be arrest for his participation in the civil disobedience movement launched by D1 to D3 in no way shows that he thought at the time of Charge 2 and Charge 3 he would be arrested after a few days of protest. If it was the intention of D5 at the time of Charge 2 and Charge 3 he would be arrested after a few days of protest, there was nothing to prevent D5 from surrendering himself to the Police after a few days of protest, as he said he would do in Exhibit P122. 563. In my judgment, the fact that there was an arrest support team to prepare for the arrest of protestors on 27th and 28th September 2014 is neither here nor there. A large scale occupy movement was in progress, there were defence lines to defend at the venue (Exhibit P59, Pg. 1456), participants were asked to ask their friends to come out to counter-besiege the police defence (Exhibit P64, Pg. 1485) and participants were asked to intercept a police vehicle (Exhibit P59, Pg. 1456). I am not at all surprised that there was an arrest support team to handle the arrests of protestors. The fact that there was an arrest support team does not, however, shows that D5 anticipated that he would be arrested after a few days of protest. 564. Mr. Pang SC submitted that the fact that there was no tent, or any permanent or semi-permanent set ups on the road in Tim Mei Avenue and its vicinity before the discharge of tear gas on 28th September 2014 can show that the protestors were not intending to stay for a substantial period of time before the firing of tear gas. For the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance”, the actual intention held by the incitee is irrelevant. What is relevant is the intention of the incitor, i.e. the defendant. 565. For the offence of “Incitement to commit public nuisance”, the requisite mens rea is that at the time of the incitement, the defendant (the incitor) intends or believes that if the incitee does the act incited under the circumstances that are known or believed by the defendant (the incitor), the incitee would commit the offence with the requisite mens rea of the offence of public nuisance. The mens rea required is that of the defendant (the incitor). 566. For the offence of “Incitement to incite public nuisance”, the requisite mens rea is that at the time of the incitement, the defendant (the incitor) intends or believes that if the incitee does the act incited under the circumstances that are known or believed by the defendant (the incitor), the incite would commit the offence of incitement with the requisite mens rea required for the offence of incitement. Again, the mens rea required is that of the defendant. 567. In other words, the firing of tear gas on 28th September 2014 was not a circumstance that was known to or believed by the relevant defendants when the incitements in respect of Charge 2 and Charge 3 were made. The relevant circumstances were those known to or believed by the defendants at the time the incitements were made, not something that took place afterwards. In assessing whether a defendant had the requisite mens rea for Charge 2 and Charge 3, I have not taken into account the events that took place after the alleged incitements were made. 568. In the case of D7, what he said at Pg. 1588-1589 was consistent with what he had said in some of his speeches earlier, i.e. the deployment of the tactic of counter-besieging the Police by supporters who could not enter the venue at Tim Mei Avenue[175] and that D7 intended the occupy movement in progress at Tim Mei Avenue to continue for an indefinite period, hence he asked the participants to “put down roots” at the venue.[176] 569. For the reasons given in my foregoing analysis, it is clear from the speeches made by D5 and D7 in these exhibits that each of D5 and D7 intended that the occupy movement should last as long as possible. In my judgment, D5 and D7 were inciting the people at Tim Mei Avenue to occupy the public places and roads in the neighbourhood of Tim Mei Avenue for an indefinite period. 570. The incitements by D5 and D7 at Pg. 1588 and 1589 were made at a time when the carriageway of Tim Mei Avenue was occupied by protestors and the traffic of Tim Mei Avenue was completely blocked; the 6 carriageways of Harcourt Road were also occupied by protestors and the traffic of Harcourt Road was blocked as a result. By calling for the over-cramming of the roads in Wanchai, Admiralty and Central, D5 and D7 clearly meant the occupation of the public places and roads in Wanchai, Admiralty and Central in the neighbourhood of Tim Mei Avenue. As discussed, the obstruction that D5 and D7 incited was not an occupation of any public place or road in Wanchai, Admiralty and Central, but the occupation of “public places and roads in the neighbourhood of Tim Mei Road”. It was through the occupation of the public places and roads in the neighbourhood of Tim Mei Road that the student movement at Tim Mei Avenue would be supported. 571. Given the fact that at the time the incitement at Pg. 1588-1598 was made, the number of protestors was swelling. The carriageway of Tim Mei Avenue was occupied by protestors and the traffic of Tim Mei Avenue was completely blocked; the 6 carriageways of Harcourt Road were also occupied by protestors and the traffic of Harcourt Road was blocked as a result. I am sure that the incitement by D5 and D7 at Pg. 1588-1589 was made with a sense of certainty that the persons at Tim Mei Avenue would carry out a public nuisance. 572. Mr. Dykes submitted that the existence of ‘checkline’ and ‘counter enclosing’ measures does not prove that a public nuisance existed at the time. He submitted that if the police had been intending to clear Tim Mei Avenue then and were being prevented from doing so, then the proper charge would have been obstruction by preventing performance of the relevant duties under section 10 (e)-(g) Police Force Ordinance, Cap. 232. Mr. Dykes SC further submitted that the fact that the Police did not clear the area until much later suggests that the assembly did not constitute a public nuisance.[177] 573. In my judgment, whilst the existence of checklines does not prove the existence of a public nuisance, a defendant’s exhortations to defend various ‘checklines’ of the venue at Tim Mei Avenue shows that the defendant in question intended that the demonstration at Tim Mei Avenue would last for an indefinite period. 574. For the exhortations to ‘counter-enclose’ or ‘counter-besiege’ the police, it should be noted that by definition, an act of counter-enclosing or counter-besieging must take place outside cordon lines of the Police, i.e. outside the venue at Tim Mei Avenue, otherwise the act/move not amount to one of counter-enclosing or counter-besieging. When additional public places and roads, e.g. Harcourt Road was obstructed for the sake of counter-besieging the Police, the issue that I have to decide is whether the obstruction of additional public place(s) or road(s) for the sake of counter-besieging the Police was a proper use of the road. 575. Mr. Dykes submitted that “Be that as it may, the court cannot discount the fact that the failure of the police to disperse crowds after using teargas resulted in the massive build-up of crowds in the Admiralty area that went on for 2 ½ months. The use of tear gas cannot be ruled out as an intervening act which was responsible for the mass occupation of the roads in Admiralty.”[178] 576. Given the undisputed fact that the use of tear gas took place at around 6 p.m. on 28th September 2014, i.e. after all the alleged incitements for Charge 2 and Charge 3 had been made on 27th and 28th September 2014, I do not see how the use of tear gas could constitute an intervening act as far as Charge 2 and Charge 3 are concerned. If all the elements of the offences of “Incitement to commit public nuisance” and “Incitement to incite public nuisance’ can be proved, the offence were complete upon the making of the incitement under complaint, whether a nuisance did occur as a result of the incitement is neither here nor there. 577. With respect to Mr. Dykes SC, I do not agree with his submissions that the fact the Police did not clear the area until much later suggests that the assembly did not constitute a public nuisance. the Police did not clear the area until much later suggests that the assembly did not constitute a public nuisance. Whether the assembly in question constituted a public nuisance is determined by the application of the principles laid down in Rimmington to the facts proved, not by the degree of tolerance shown by the Police. 578. I have taken into consideration all the circumstances leading to the making of the incitements by D5 and D7 at Pg. 1588-1589 of Exhibit P74. In my judgement, the scale of the occupation that D5 and D7 incited was extensive; Wanchai, Admiralty and Central were all important commercial districts and the roads in the district, e.g. Harcourt Road and Fenwick Pier Street, were important thoroughfares, as they always have been. The intended occupation was for an indefinite period. On the other hand, I am aware that the occupation advocated was a peaceful one and the purpose of the occupy movement was to strive for universal suffrage. In my judgment, what D5 and D7 incited the people at Tim Mei Avenue in at Pg. 1588-1589 to do was not a reasonable use of the roads in Admiralty and Central in the neighbourhood of Tim Mei Square. The 6 carriageways of Harcourt Road had already been occupied by protestors yet D5 and D7 still asked for more protestors to over-cram and occupy the roads in Wanchai, Admiralty and Central in the neighbourhood of Tim Mei Avenue. The obstruction to the traffic and inconvenience caused to the public would be so serious that would exceed the bounds of reasonableness and the protection given by the Basic Law to the right to peaceful demonstration. I find that the obstruction that would be caused was not warranted by law. 579. From the computer certificates,[179] I am satisfied that the over-cramming of the public places and roads in the neighbourhood of Tim Mei Road would result in the suffering of common injury by common member of the public. 580. From the evidence, I am sure that when D5 and D7 incited the people present at Tim Mei Avenue to over-cram Wanchai, Admiralty and Central (words of incitement said by D5) and to occupy the roads together (words of incitement said by D7) at Pg. 1588-1589 of Exhibit P74, each of D5 and D7 intended that the incitees, i.e. the people at Tim Mei Avenue would do the act incited by them, i.e. obstructing public places and roads in the neighbourhood of Tim Mei Avenue, with the mens rea of public nuisance, i.e. the incitees knew, or ought to have known (because of the means of knowledge were available to him) the consequence of what they did. 581. In this case the incitees were the people participating in the public assembly at Tim Mei Avenue and hence, they must be aware of what was going on at the time of the incitements and what the effect of an indefinite obstruction of the roads in the neighbourhood of Tim Mei Avenue would be if they acted as incited. I am sure that D5 and D7 intended or believed that the incitees, i.e. the people present at Tim Mei Avenue, would know or had the means to know that if they acted as incited, they would commit a public nuisance. 582. In the present case, D5 and D7 expressly asked the people at Tim Mei Avenue (i) to over-cram Wanchai, Admiralty and Central; and (ii) to ask more friends to come out to do so. I do not agree with Mr. Pang SC’s submissions at Para. 80 of D5’s Closing Submissions that “At best, therefore, it could only be said that D5 had by his spoken words incited a state of affairs which may or may not become a public nuisance depending on how the events will unfold”. 583. Mr. Dykes SC submitted that the use of pepper spray and tear gas in the present case constituted the use of arms under s. 22(1)(d) of Firearms and Ammunition Ordinance, Cap. 238 and no evidence has been led about the protocols about the use of both pepper spray and tear gas, therefore it cannot be said that the use was lawful, i.e. the use of one or both was “no greater than was necessary required” to cause dispersal under s. 46(1) Public Order Ordinance.[180] 584. The use of tear gas took place at around 6 p.m. on 28th September 2014, i.e. after the incitements under complaint were made by the relevant defendants. I do not see the relevance of the legality or otherwise of the use of tear gas by the police have on the issues that concern Charge 2 and Charge 3. 585. For the use of pepper spray, I see no reason why the Prosecution, in order to prove its case against D7 and the other defendants facing Charge 2 and Charge 3, should lead evidence to prove the use of pepper spray was lawful. In fact, what D5 and D7 said in Exhibit P74 at Pg. 1588-1589 had nothing to do with the use of pepper spray by the police. 586. In my judgment, on the basis of the above incitements by D5 and D7 in Exhibit P74 at Pg. 1588-1589, D5 and D7 each had unlawfully incited persons at Tim Mei Avenue, Admiralty to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue without need to resort to the doctrine of joint enterprise as a basis for liability. Incitement to Incite Public Nuisance (Charge 3) 587. In my judgment, what D5 said in Exhibit P74 at Pg. 1589:- “D5: We are asking more friends to come here, (we are asking) more friends to come here. Let’s over-cram Admiralty. (Let’s) over-cram Wan Chai. (Let’s) over-cram Central.” (Emphasis added), amounted to an incitement made to the people at Tim Mei Avenue to incite more friends to join the movement by over-cramming Admiralty, Wanchai and Central. The above statement was made to the people at Tim Mei Avenue and heard by those within the audibility range of the public address system. 588. My analysis and findings made in respect of the incitements to commit public nuisance made by D5 in Exhibit 74 are also applicable the analysis of the incitement made by D5 at Pg. 1589. 589. The use of the word “over-cram” by D5 in the above statement at Pg. 1589 shows the numbers of participants intended by D5 would be sufficient to over-cram the roads in Wanchai, Admiralty and Central. 590. Immediately before the incitement at Pg. 1589, D5 told the people at Tim Mei Avenue that “(The crowd) had already over-crammed two roads (outside) the Hong Kong Academy for Performing Arts” (Pg. 1588). Reading D5’s statement at Pg. 1589 in its proper context, D5 was asking for the over-cramming of the public places and roads in Wanchai, Admiralty and Central in the neighbourhood of Tim Mei Avenue. 591. What D5 said at Pg. 1589 should be read in the light of what he had said in some of his speeches earlier, i.e. that they had entered an era of universal struggle and people from all walks of life were engaging in universal struggle;[181] that more supporters were needed at Tim Mei Avenue[182] and that the demonstration in progress at Tim Mei Avenue was one to last for an indefinite period, i.e. it was “a fight in relays”.[183] 592. For the reasons given in my foregoing analysis, it is clear from the speeches made by D5 in these exhibits that D5 intended that the occupy movement should last as long as possible. In my judgment, D5 was inciting the people at Tim Mei Avenue to incite other persons to occupy the public places and roads in the neighbourhood of Tim Mei Avenue for an indefinite period. 593. The incitement by D5 at Pg. 1589 was made at a time when the carriageway of Tim Mei Avenue was occupied by protestors and the traffic of Tim Mei Avenue was completely blocked; the 6 carriageways of Harcourt Road were also occupied by protestors and the traffic of Harcourt Road was blocked as a result. By calling for the people at Tim Mei Avenue to incite other persons to over-cram the roads in Wanchai, Admiralty and Central, D5 clearly meant the occupation of the public places and roads in Wanchai, Admiralty and Central in the neighbourhood of Tim Mei Avenue. It was through the occupation of the public places and roads in the neighbourhood of Tim Mei Road that the student movement at Tim Mei Avenue would be supported. 594. I have taken onto consideration all the circumstances leading to the making of the incitement at Pg. 1589 by D5. In my judgement, the scale of the occupation that D5 incited was extensive; Wanchai, Admiralty and Central were all important commercial districts and the roads in the district, including Harcourt Road, were important thoroughfares, as they always have been. The intended occupation was for an indefinite period. On the other hand, I am aware that the occupation advocated was a peaceful one and the purpose of the occupy movement was to strive for universal suffrage. In my judgment, what D5 incited the people at Tim Mei Avenue to do, i.e. to incite other persons to cause an obstruction to the public places and roads in the neighbourhood of Tim Mei Avenue, was not a reasonable use of the roads in Admiralty and Central in the neighbourhood of Tim Mei Square. The 6 carriageways of Harcourt Road had already been occupied by protestors yet D5 still asked for more protestors to occupy the road. The obstruction to the traffic and inconvenience caused to the public would be so serious that would exceed the bounds of reasonableness and the protection given by the Basic Law to the right to peaceful demonstration. I find that the obstruction that would be caused was not warranted by law. 595. From the computer certificates,[184] I am satisfied that the over-cramming of the public places and roads in the neighbourhood of Tim Mei Road would result in the suffering of common injury by common member of the public. 596. In my judgment, by the above utterance, D5 had incited the incitees, i.e. the people present at the Tim Mei Avenue, to do an act which would involve the commission of the offence of incitement, i.e. inciting a public nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue, i.e. the actus reus for the offence of “Incitement to incite public nuisance”. 597. I am sure that when D5 made the above utterance, he intended or believed that the incitees (the persons at Tim Mei Avenue) would incite other persons (the friends of the incitees) to do the act incited, i.e. to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue and that the incitees (the people at Tim Mei Avenue) would do the act with the mens rea requirement for incitement, i.e. an intention to incite. 598. In my judgment, on the basis of the above incitements made by D5 in Exhibit P74 at Pg. 1589, D5 had unlawfully incited persons at Tim Mei Avenue, Admiralty to incite other persons to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue without need to resort to the doctrine of joint enterprise as a basis for liability. 599. The utterances which amounted to an incitement to the persons at Tim Mei Avenue to incite others to commit public nuisance at Pg. 1589 was made by D5 in the presence of D7. I shall consider the application of the doctrine of joint enterprise in the latter part of the judgment. The Words of Incitement by D6 in Exhibits P17 and P40: Incitement to Incite Public Nuisance (Charge 3) 600. At around 3:38 pm in the afternoon on 27 September 2014, when D6 addressed the people at Tim Mei Avenue, he said amongst other things:- “now we hope that everybody, yes, can really ask more people to come out and over-cram Tim Mei Avenue, also, it is hoped that the nearby carriageways will also be over-crammed, and (we) continued to extend the area of our civil disobedience.”[185] 601. In my judgment, the above utterance by D6 in Exhibit P17 amounted to an incitement to the people at Tim Mei Avenue to incite other persons to come out and over-cram Tim Mei Avenue and the nearby carriageways. I am sure that the incitement was made to the people at Tim Mei Avenue and heard by those within the audibility range of the public address system. 602. At about 11:24 p.m. in the evening on 27th September 2014, in the presence of D4 and D7, D6 addressed the people at Tim Mei Avenue and said:- “Right, well, let me tell you a piece of good news rather than always listening to those things that (make you feel) heavy (-hearted). Well, we, now on the bridge outside Admiralty, it is still full of people all over the footbridge (there). They are in the direction of our side, coming towards us here, right. Our (activity) today, should be the largest Civil Disobedience (activity) over the years, certainly, the number of people, we have not yet got the largest of people, but (we) hope that the members of the public would not remain at our current achievements (attained), let us keep asking more people to come, over-cramming Admiralty.” “Well! As what we have seen, actually, there are huge crowds of people everywhere. Well! We, starting from Harcourt Road to the entire Tim Mei Avenue, all were (packed with) people, the open space of the Legislative Council is also full of people, so everybody keeps asking people to come!” (Emphasis added)[186] 603. In my judgment, the above utterances by D6 in Exhibit P40, which amounted to incitement to the people at Tim Mei Avenue to incite other persons to over-cram Admiralty, was made to the people at Tim Mei Avenue and heard by those within the audibility range of the public address system. 604. The repeated use of the word “over-cram” by D6 in Exhibits P16 and P40 shows the number of participants intended by D6 would be sufficient to over-cram the roads in Admiralty. 605. It should be noted that immediately before the incitement at Pg. 1102, D6 told the people at Tim Mei Avenue that “…, even though Tim Mei Avenue is already all full, well, but everybody still has to keep asking friends to come out…”.[187] Reading D6’s statement at Pg. 1102 in its proper context, D6 was asking for the over-cramming of the public places and roads in Admiralty in the neighbourhood of Tim Mei Avenue at a time when Tim Mei Avenue was already full of protestors. 606. What D6 said in Exhibit P40 should be read in the light of what he had said in some of his other speeches made before Exhibit P40: (i) in Exhibit P28, D6, together with D5, asked the people at Tim Mei Avenue “to hang in till the end”(ii) in Exhibits P27 and P33, D6 asked the people at Tim Mei Avenue to ask for more friends to go the venue at Tim Mei Avenue to express their support (iii) in Exhibit P35, D6 spoke of the importance of “counter-besieging” the Police (“Encirclement is strength”) and the fact that there were already 50,000 protestors at Tim Mei Avenue. 607. For the reasons given in my foregoing analysis, what D6 had said in Exhibits P27, P28, P33 and P35 shows that at the time D6 intended that the occupy movement should last as long as possible. In my judgment, D6 was inciting the people at Tim Mei Avenue to incite other persons to occupy the public places and roads in the neighbourhood of Tim Mei Avenue for an indefinite period. 608. Mr. Pun SC submitted in Part F of D6’s Closing Submissions that the persons present at Tim Mei Avenue, if acted as incited, would only stay for a limited period of time to wait for the release of the student leaders arrested by the Police. It is immediately clear from the passage relied upon by Mr. Pun SC, i.e. Exhibit P17 at Pg. 1098-1099, that apart from calling for the people present at Tim Mei Avenue to wait for the release of the student leaders, D6 also made it clear that the purposes of the public assembly included a demand that the then Chief Executive of the HKSAR should give an explanation on the current situation and on the matter of supporting a predetermined political reform. D6 also criticized the Decision on 31st August and asked for the breaking through of the gate of the Civil Square as the first step to break through the framework of the Decision on 31st August. Properly understood, what D6 said in Exhibit P17 does not support Mr. Pun SC’s submissions that the incitees, if acted as D6 incited, would only stay for a limited period of time. 609. The incitements by D6 in Exhibit P17 were made at a time when Tim Mei Avenue was already all full. In other words, the road was occupied by protestors and the traffic of Tim Mei Avenue was completely blocked. By calling for the people at Tim Mei Avenue to incite other persons to over-cram the “nearby carriageways”, D6 made it clear that it was the plan of the occupy movement to extend the area for the civil disobedience D6 said was in progress. D6 had made it clear that it was the plan of the occupy moment to expand beyond the occupied area of Tim Mei Avenue. 610. Bearing in mind what D6 had said in Exhibit P17, i.e. the over-cramming of Tim Mei Avenue and the nearby carriageways, the location that D6 referred to in his incitement in Exhibit P40 was any public place or road in Admiralty, but the occupation of “public places and roads in the neighbourhood of Tim Mei Road”. It was through the occupation of the public places and roads in the neighbourhood of Tim Mei Road that the student movement at Tim Mei Avenue would be supported. 611. Mr. Pun SC submitted that in Section G of D6’s Closing Submissions that no public nuisance would be caused by the incitements made by D6 to the incitees to reclaim the Civic Square as Civic Square was a “private premises not open to the public” as confirmed by PW2 Senior Superintendent Wong Kei Wai. It should be noted that Charge 2 and Charge 3 concern obstruction of public places and roads at and in the neighbourhood of Tim Mei Avenue, not just the Civil Square at Tim Mei Avenue. Given my findings on the effect of the cordoning off by the Police of Tim Mei Avenue, the relevant locations where public nuisance would be caused were the public places and roads in the neighbourhood of Tim Mei Avenue, not the obstruction of the carriageway of Tim Mei Avenue. In any event, unlike the obstruction of a public highway, the occupation of Civic Square was not something which would result in “the suffering of common injury by members of the public”. In my judgment, the issue whether the Civic Square was a private premises or a public place is academic in the present case. 612. Mr. Pun SC’s submissions on the issue of whether the obstruction incited by D6 was warranted by law (Section E of D6’s Closing Submissions) focused only on the issues whether the incitements by D6 were made at a time when there was a Notification of Intention to Hold a Public Meeting and whether D6 was aware of the Notice of Prohibition issued by the Police during the daytime on 28th September 2014. 613. As I pointed out in the earlier part of this judgment, the “not warranted by law” element for the common law offence of public nuisance is not to be determined by a search for illegality in the demonstration which resulted in the obstruction, e.g. the absence of prior notification or the issuance of a Notice of Prohibition. The absence of prior notification or the presence of a Notice of Prohibition is one of the factors, but not the only factor to be considered. In determining whether a defendant’s obstruction of the highway is “not warranted by law” , the important issue to be resloved is whether the defendant’s conduct under complaint involves a reasonable use of the highway, as the Court of Final Appeal pointed out in Yeung May Wan, a person who creates an obstruction could not be said to be acting “without lawful excuse” if his conduct involves a reasonable use of the highway. 614. I take into consideration all the circumstances leading to the making of the incitements in Exhibits P17 and P40 by D6. In my judgement, the scale of the occupation that D6 incited was extensive; Admiralty was an important commercial district and the roads in the district, including Harcourt Road, were important thoroughfares, as they always have been. The intended occupation was for an indefinite period. On the other hand, I am aware that the occupation advocated was a peaceful one and the purpose of the occupy movement was to strive for universal suffrage. In my judgment, what D6 incited the people at Tim Mei Avenue to do, i.e. to incite other persons to cause an obstruction to the public places and roads in the neighbourhood of Tim Mei Avenue, was not a reasonable use of the roads in Admiralty in the neighbourhood of Tim Mei Square. The entire Tim Mei Avenue had already been occupied by protestors yet D6 still asked for more protestors to occupy the nearby carriageways and to extend the area for the occupy movement. The obstruction to the traffic and inconvenience caused to the public would be so serious that would exceed the bounds of reasonableness and the protection given by the Basic Law to the right to peaceful demonstration. I find that the obstruction that would be caused was not warranted by law. 615. From the computer certificates,[188] I am satisfied that the over-cramming of the public places and roads in the neighbourhood of Tim Mei Road would result in the suffering of common injury by common member of the public. 616. In my judgment, by the above utterances in Exhibits P17 and P40, D6 had incited the incitees, i.e. the people present at the Tim Mei Avenue, to do an act which would involve the commission of the offence of incitement, i.e. inciting a public nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue, i.e. the actus reus for the offence of “Incitement to incite public nuisance”. 617. D6, when he uttered the incitements in Exhibits P17 and P40, intended that the incitees (the persons at Tim Mei Avenue) would incite other persons (the friends of the incitees) to do the act incited, i.e. to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue and that the incitees (the people at Tim Mei Avenue) would do the act with the mens rea requirement for incitement, i.e. an intention to incite. 618. In my judgment, on the basis of the above incitements D6 in Exhibits P17 and P40, D6 had unlawfully incited persons at Tim Mei Avenue, Admiralty to incite other persons to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue without need to resort to the doctrine of joint enterprise as a basis for liability. Words of Incitements by D7 in Exhibits P69 (Pg. 1545-1546) and P74 (Pg. 1593 and 1598) 619. In the afternoon on 28 September 2014, when D7 spoke on the main stage at Tim Mei Avenue, in the presence of D1, D2 and D5 (on stage) and D3 (below stage), he said, amongst other things:- “….However, we know that roughly more than ten thousand citizens have blocked the road (from) the Admiralty Centre, the whole of KFC to Rodney Street. At the same time, at the Hong Kong Academy ‘Centre’ (sic) of Performing Arts, Wanchai, there are ten thousand people. Adding (them) up, (we’ve) got a total of about thirty thousand people here. Here, I am appealing to all the citizens in Hong Kong to come together – no matter whether (you) can enter the area or not, go to Admiralty, go to Wan Chai. Let us fill up the whole of Admiralty (and) Wan Chai. Together, (we) can besiege the whole of Central Government Offices from the side of Rodney Street, from the side of the Hong Kong Academy ‘Centre” (sic) of Performing Arts. We demand --……Let us fill up Admiralty and Wan Chai together….” (Emphasis added)[189] 620. At Pg. 1545-1546, D7 was asking the people who were not at Tim Mei Avenue to join the movement by filling up Wanchai and Admiralty. More will be said about the intended incitees of this incitement in the later part of the discussion. 621. In my judgment, the above statement of D7 amounted to an incitement to fill up Admiralty and Wanchai. 622. As I mentioned before, the locations mentioned by D7 in the said address, e.g. Admiralty Centre, the Central Government Offices, Rodney Street, the Academy for Performing Arts are all located in the neighbourhood of Tim Mei Avenue. 623. Later in the same afternoon, when D7 was on the main stage at Tim Mei Avenue, he spoke in the presence of D5 (on stage) and D3 (below stage) and said:- “We are here to call for more people to come out to over-cram Admiralty (and) to over-cram Wan Chai with us. (Let’s) carry on with the Occupy (movement).” (Emphasis added)[190] 624. At Pg. 1594, D7 was asking more people to come out to over-cram Admiralty and Wanchai with the protestors already at Tim Mei Avenue. More will be said about the intended incitees in the above incitement. 625. In my judgment, the above statement of D7 in Exhibit P74 at Pg. 1594 amounted to an incitement to overcram the public places and roads in Admiralty and Wanchai in the neighbourhood of Tim Mei Avenue. It was not an incitement to incite the people at Tim Mei Avenue to incite other persons join the venue. 626. Later in the same afternoon, when D7 was on the main stage at Tim Mei Avenue, he spoke in the presence of D2 (on stage) and said:- “We are here to appeal to our friends who have not yet come to join us, come quickly to over-cram Admiralty and Wan Chai, and to occupy this Hong Kong that belongs to us.” (Emphasis added)[191] 627. In Exhibit P74 at Pg. 1598, D7 was appealing to the people who had not yet join the venue at Tim Mei Avenue to come to over-cram Admiralty and Wanchai. More will be said about the intended incitees in the above incitement. 628. In my judgment, the above statement of D7 in Exhibit P74 at Pg. 1598 amounted to an incitement to overcram the public places and roads in Admiralty and Wanchai in the neighbourhood of Tim Mei Avenue. It was not an incitement to incite the people at Tim Mei Avenue to incite other persons join the venue. 629. As I have explained in the earlier part of the judgment, the above incitements, i.e. the incitements in Exhibits P69 and P74[192] must be understood in the context of the fact that they were made by D7 at Tim Mei Avenue on 27th and 28th September 2014 during a continuous gathering at Tim Mei Avenue. When the incitements were made, there were already many participants at the scene. The districts/locations that the relevant defendant(s) asked to be over-crammed or filled up must be understood in context. The defendants were then participating in a public gathering at Tim Mei Avenue. When a defendant referred to over-cramming or filling up of Admiralty/Central/Wanchai, he or she must be referring those parts of Admiralty/Central/Wanchai which fall within the neighbourhood of Tim Mei Avenue. 630. I have considered both the contents of what D7 said in Exhibits P69 and P74[193] and the relevant video clips. Whilst it is possible that the people at Tim Mei Avenue were amongst the targeted audience, i.e. the incitees, there is a real possibility that D7 was not addressing the people present at the venue but those who were watching the live broadcast. I am not sure that the people at Tim Mei Avenue were amongst the targeted audience of D7’s incitements in Exhibits P69 and P74.[194] It should be remembered that at around 1:34 p.m. on 28th September 2014, when D7 spoke on the main stage, his targeted audience were the people watching the live broadcast (“Here, we are appealing to all (our) friends, for those of (you) who are watching the live broadcast, if you want to come and support (us)…”)[195] 631. A finding on the targeted audience of the incitements in Exhibits P69 and P74[196] is important as the particulars of Charge 2 and 3 clearly allege that the incitements under complaint were made to “persons present at Tim Mei Avenue” and not any other persons, e.g. people who were watching the incitements on live broadcast. 632. In fairness to the Prosecution, of the many incitements made by D7 in all the speeches he made, many of them were clearly made to the people present at Tim Mei Avenue and heard by those within the audibility range of the public address system, but the incitements targeting those present at Tim Mei Avenue were either incitements to commit public nuisance at Tim Mei Avenue or incitements to incite others to commit public nuisance at Tim Mei Avenue. Given my findings on the effect of the cordoning off Tim Mei Avenue on Charge 2 and Charge 3, the relevant defendants should be given the benefit of doubt for their incitements to commit public nuisance at Tim Mei Avenue or incitements to incite others to commit public nuisance at Tim Mei Avenue. 633. The locations referred to by D7 in the incitements he made in Exhibits P69 and P74[197] fit in with the particulars “in the neighbourhood of Tim Mei Avenue”. However, given my findings that D7 might be addressing, and hence inciting, those who were watching the live broadcast of the public assembly in progress, it cannot be proved beyond doubt that D7, by the incitements in Exhibits P69 and P74,[198] incited the “persons present at Tim Mei Avenue” as particularised in Charge 2. 634. The problem arising from the targeted audience cannot be cured by amending the particulars of offence by adding after “persons present at Tim Mei Avenue” the words “and/or the persons watching the live broadcast of the public assembly in progress” or words to that effect as there was no evidence that there were people watching the live broadcast when D7 made the incitements in Exhibits P69 and P74,[199] hence it cannot be proved that the incitements had reached the targeted incitees. It does not help the Prosecution case that the people at Tim Mei Avenue heard the incitements in Exhibits P69 and P74[200] if it cannot be proved that they must be the people D7 intended to incite and to whom the incitements were made. 635. For the above reasons, the incitements in Exhibits P69 and P74[201] are not covered by the particulars of Charge 2. 636. However, for the reasons given in the earlier part of the judgment under the heading “The Incitements by D5 and D7 in Exhibit P74 (Pg. 1588-1589, 1591-1592 and 1593)”, on the basis of the incitements made by D7 and the ones he made with D5 jointly in Exhibit P74 at Pg. 1588-1589, D7 had unlawfully incited persons at Tim Mei Avenue, Admiralty, to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue (Charge 2); on the basis of the incitement made by D5 in Exhibit P74[202] and the incitement by D6 in Exhibit P40[203], by the application of the doctrine of joint enterprise, D7 had unlawfully incited persons present at Tim Mei Avenue to incite other persons to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue (Charge 3). Joint Enterprise 637. I am aware that D2 and D3 had not asked the people at Tim Mei Avenue to over-cram public places or roads of Admiralty, Central or Wanchai at or in the neighbourhood of Tim Mei Avenue, nor did they ask the people at Tim Mei Avenue to incite others to do so, the issue is whether by the application of the joint enterprise rule, the relevant speeches made by D1 and D4 to D7 can be used against D2 and D3. 638. The Prosecution relies on the joint enterprise rule. The reasonable evidence relied upon by the Prosecution for invoking the joint enterprise rule in Charge 2 and Charge 3 against D1 to D7 are the relevant speeches made by D1 to D7 respectively as captured on the videos during the gathering at Tim Mei Avenue on 27th and 28th September 2014. The Prosecution submits that, pursuant to the joint enterprise rule, the Prosecution seeks to use the speeches made by each of the seven defendants in the videos to prove the extent and degree of participation in the joint enterprise of the other defendant who did not make those speeches.[204] 639. At the request of counsel for D4 to D7, Mr Bruce SC for the Prosecution provided further written particulars for the direct liability and liability on the basis of joint enterprise for D4 to D7. Mr Bruce submits, in respect of joint liability on the basis of joint enterprise, submits that in various of the videos relied upon by the Prosecution, D4 to D7 were present with each other and all of the other defendants (although not all at the same time) when one or more of those defendants uttered words which the Prosecution contends were acts of incitement to persons to commit Charge 2 and Charge 3. The Prosecution contends that D4 to D7 assented to what was said in his/her presence and, in the circumstances, justifies the conclusion that D4 to D6 were either individually or collectively with other defendants. The Prosecution contends not the least basis for this is that the utterances attributed to the defendant under consideration reveal a clear resemblance to that said by other defendants in that locality and in those circumstances provide a basis for the conclusion that the defendant under consideration was in a joint enterprise with those defendants. 640. As no request for further particulars was made by D1 to D3, the written particulars concerned only D4 to D7. I see no reason why the Prosecution’s contention for liability on the basis of joint enterprise should be different for D1 to D3. 641. On 27th and 28th September 2014, D3 was not present when the other defendants made the incitements which amounted to an incitement to commit public nuisance within the terms of Charge 2.[205] 642. On 27th and 28th September 2014, D1 to D3 were not present when the other defendants made the incitements which amounted to an incitement to incite public nuisance within the terms of Charge 3.[206] 643. As the Prosecution only seeks to attribute liability to a defendant for words said in his/her presence by another defendant(s) which constitute words of incitement. There is no basis to attribute liability to D3 on the basis of joint enterprise for incitement to commit public nuisance (Charge 2) said by other defendants in his absence. 644. For the same reasons, there is no basis to attribute liability to D1, D2 and D3 on the basis of joint enterprise for incitement to incite public nuisance (Charge 3) said by other defendants in their absence. 645. I have explained why on the evidence before me, each of D1, D4, D5 and D7 was criminally liable for the incitement to commit public nuisance (Charge 2) they made without the need to resort to the doctrine of joint enterprise. 646. I have explained why on the evidence before me, each of D5, D6 and D7 was criminally liable for the incitement to incite public nuisance (Charge 3) they made without the need to resort to the doctrine of joint enterprise. 647. I apply the doctrine of joint enterprise to the facts proved in this case. Joint Liability of D1, D2, D4 and D6 for the incitements in Exhibit P20 at Pg. 1107 and 1111 (Charge 2) 648. When D1 and D4 made the respective incitements in Exhibit P20 at Pg. 1107 and 1111, D2 and D6 were also present on the main stage at Tim Mei Avenue incitements in Exhibit P20 at Pg. 1107 and 1111. 649. It should be noted that from the evidence of D2, the incitement made by D1 in Exhibit P20 was clearly made after the Trio’s discussion in the afternoon. D2 was present on the stage with D1 when the latter make the incitement in Exhibit P20, he did not take issue with what D1 had said in Exhibit P20 in any of his speeches afterwards. I am satisfied that the speech of D1 in Exhibit P20 reflected the common intention of the Trio and what the Trio had agreed in the discussion took place that afternoon, i.e. the Occupy Central should start with the over-cramming of Admiralty, and then the over-cramming of Central. 650. D2 was present on the main stage with D1 and D6 when D4 made the incitement in Exhibit P20. The incitements made by D4 in Exhibit P20 at Pg. 1107 and 1111 were similar and consistent with the incitement made by D1 in Exhibit P20 at Pg. 1107. 651. After the respective incitements made by D1 and D4 in Exhibit P20, D2 was present on the main stage when D1 announcement the launch of the Occupy Central movement at around 1:36 a.m. on 28th September 2014. 652. The incitement by D4 at Pg. 1107 was made immediately after the incitement made by D1 at Pg. 1107, the incitements made by D1 and D4 were similar in content. 653. The incitements made by D1 and D4 in Exhibit P20 were similar to the pleas made by D6 in Exhibit P17 at Pg. 1102 and P40 at Pg. 1244-1245. 654. I am sure that D1, D2, D4 and D6 had a common intention to incite the persons present to over-cram the public roads in the neighbourhood of Tim Mei Avenue. Each of them had the requisite mens rea required for the offence of incitement to commit public nuisance in terms of the particulars pleaded in Charge 2. By the application of the doctrine of joint enterprise, I find that D1, D2, D4 and D6 had acted in a joint enterprise with each other in making the incitements in Exhibit P20 at Pg. 1107 and 1111 (Charge 2). Joint Liability of D5 and D7 for the incitements in Exhibit P74 at Pg. 1588-1589 (Charge 2 and Charge 3) 655. The respective utterances which amounted to an incitement to incite persons present at Tim Mei Avenue to cause a public nuisance in the neighbourhood of Tim Mei Avenue (Charge 2) were made by D5 and D7 together when they were on the main stage at Tim Mei Avenue. It is clear from the utterances in Exhibit P74 at Pg. 1588-1589 that what was said by D5 or D7 reveals a clear resemblance to those said by the other defendant, i.e. D5 and D7 were in effect echoing each other. In my judgment, D5 and D7 had acted in a joint enterprise with each other in making the incitements alleged in Charge 2. 656. The utterances by D5 at Pg. 1589 which amounted to an incitement to the persons present at Tim Mei Avenue to incite others to commit public nuisance (Charge 3) was made in the presence of D7, both D5 and D7 were addressing the people at Tim Mei Avenue at the time. In my judgment, what they said in Exhibit P74 shows that they shared a common purpose, i.e. the over-cramming of the roads in the neighbourhood of Tim Mei Avenue. The respective utterances made by D5 and D7 in the foregoing analysis show that they were in effect echoing each other. As D5 called on the persons at Tim Mei Avenue to ask more friends to join the movement in progress and over-cram Admiralty, Wanchai and Central, D7 asked the people present at Tim Mei Avenue to cheer on the protestors who were prepared to dash out to occupy the roads. In my judgment, D5 and D7 had acted in a joint enterprise with each other in making the incitement alleged in Charge 3. 657. I am sure that D5 and D7 had a common intention to incite the persons present to incite other people to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue. Each of them had the requisite mens rea required for the offence of incitement to incite public nuisance in terms of the particulars pleaded in Charge 3. 658. By the doctrine of joint enterprise, I find that D5 and D7 had acted in a joint enterprise with each other in making the incitements in Exhibit P74 at Pg. 1588-1589 (Charge 2 and Charge 3). Joint Liability of D4, D6 and D7 for the incitements in Exhibit P40 at Pg. 1244-1245 659. The utterances made by D6 at about 11:24 pm in the evening on 27th September 2014 amounted to an incitement to incite the persons present at Tim Mei Avenue to incite others to commit public nuisance.[207] 660. D4 and D7 were present on the main stage when D6 made the incitement in Exhibit P40. What D6 said in Exhibit P40 bears a strong resemblance to what D4 and D7 said in their own speeches, i.e. D4’s plea to over-cram Admiralty and Central in Exhibit P20[208] and D7’s plea to occupy the roads in Exhibit P74[209]. What D4 and D7 respectively said in Exhibits P20 and P74 show that they shared a common intention to incite the persons present at Tim Mei Avenue to cause a public nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue. Each of D4 and D7 had the requisite mens rea required for the offence of incitement to commit public nuisance in terms of the particulars pleaded in Charge 2. The other speeches made by D4, D6 and D7 also bear strong resemblances with each other, e.g. they shared the common political objectives, they each called for more supporters to join the occupy movement in progress at Tim Mei Avenue and each of them intended the occupy movement in progress at Tim Mei Avenue to be for an indefinite period. When it comes to the words said by D6 which amounted to an incitement to incite public nuisance[210], I am sure that D4, D6 and D7 had acted in a joint enterprise with each other in making the incitement in Exhibit P40 at Pg. 1244-1245. 661. For the reasons given, by the application of the doctrine of joint enterprise, D4, D6 and D7 had unlawfully incited persons at Tim Mei Avenue, Admiralty to incite other persons to cause a nuisance to the public by unlawfully obstructing public places and roads in the neighbourhood of Tim Mei Avenue (Charge 3). Conclusions Reached on Charge 2 and Charge 3 662. In my judgment, there is ample evidence to prove all the elements of Charge 2 beyond reasonable doubt against D1, D4, D5 and D7 on the basis of the utterances made by each of them individually; there is ample evidence to prove Charge 2 beyond reasonable doubt against D1, D2, D4, D5, D6 and D7 by the application of the doctrine of joint enterprise. 663. For the reasons given, I find D1, D2, D4, D5, D6 and D7 guilty of Charge 2. 664. I find D3 not guilty of Charge 2. 665. In my judgment, there is ample evidence to prove all the elements of Charge 3 beyond reasonable doubt against D5, D6 and D7 on the basis of the utterances made by each of them individually; there is ample evidence to prove Charge 3 beyond reasonable doubt against D4, D5, D6 and D7 by the application of the doctrine of joint enterprise. 666. For the reasons given, I find D4, D5, D6 and D7 guilty of Charge 3. 667. I find D1, D2 and D3 not guilty of Charge 3. Charge 4: Incitement to Commit Public Nuisance and Charge 5: Incitement to Incite Public Nuisance (against D8) 668. Charge 4 and Charge 5 concern words said by D8 at Fenwick Pier Street, Admiralty on 28th September 2014. 669. The words that were said by D8 and relied upon the Prosecution to prove the charges were captured on videos and produced as evidence. 670. It should be noted that in Admitted Facts III reached by the Prosecution and D8, video clips which captured speeches made by other defendants at other locations on 27th and 28th September 2014 were also produced. Those speeches are not the subject matters of complaint of Charge 4 and Charge 5, they were produced to show the background against which the alleged incitements were made by D8 at Fenwick Pier Street on 28th September 2014. 671. At around 3:42 p.m. on 28th September 2014, D8 addressed the people gathering at Fenwick Pier Street. He said amongst other things:- “D8: Bail is still not granted. Actually, do you think it is fair?....Protect the students. Everyone goes to the carriageway, goes to the carriageway. Go to the carriageway. Go to the carriageway…... Counter-besiege. Go to the carriageway. Counter-besiege. Well, we – why are we at this place today(?) Why are we here at Lung King Street, Fenwick Pier (?) We have to sit here, this is because…..Well, as he wants to clear our – no, he has to clear the students, then (they) definitely have to pass by our place here first. Therefore, if we want to protect the people inside, first of all, he has to clear our place here. Therefore, in order to protect the people inside, we – we, at the previous position, standing here, standing under the footbridge is not able to protect the people inside, right? Well, as we, at this place. We defend here, well, we –alright, (we) all can move a little forward. More people move a bit forward…. No need to panic now, I am here, (you) all hurry up and ask more people to come over, please. Everybody, being here, being here, right…..Well, remember we are here, we now – now don’t act on our own initiative to have -- conflict with these frontline police officers, we don’t need to do so, sit down here—we have already defended (it), understand or not? We don’t need to come into conflict with him, (we) just have to defend here……Thus, now, everybody, please send messages to tell your friends (you) are here. Take photos to tell your friends that we are here, ask him/her (to go to) Exit F, go past this Harcourt Park, and then go past Police Headquarters, walk across the footbridge our place here, or come here by making a detour around (the Hong Kong Academy for) Performing Arts, we are at this place, okay? Tell your friends, okay? Ask more people to come, okay? Well, the people on the pavement….I hope (we) all could come out together, could come out together. Originally, as we said today, (those) who came out, well, some of (them) might simply want to have an assembly, but most of us here, once (we) all, one – as (we) have out here, we are ready for Civil disobedience, right. Right? Civil disobedience…. Without fear. Civil disobedience…………. Without fear. Well, on the night before last, …… Therefore, well, friends, (I) hope if you support this campaign, support Hong Kong, we need to have an equal political right, civil nomination. We have to abolish the functional constituencies. We have to carry out civil disobedience. If, like what we did in the past, everything’s over after the rally, do you want that? In fact we haven’t make any improvement, change. Today we hope everybody put one more step, hope everybody go onto the road. Of course, doing so, for sure, we would cause obstruction to a certain extent. For that, (I) hope the passengers on board Route 18 bus today would – understand us. Well, now the police are putting more reinforcement, but we need not feel nervous. At his place, what’s most important for us is to stay calm, be restraint. We need to be more courageous than her, but not be agitated. Can you do that? Well, as you said, you can. You promise. Therefore if she comes later, she comes to remove people – well, please move a bit forward, move a bit forward, to confront (them),…..Er, people are sitting all over on the whole Performing Arts Avenue. Well, I hope you may come out, come out to the road, to the road. Shall we give them some encouragement, shan’t we? (I) hope you come out. Well, if you don’t come out, never mind. If you don’t come out, never mind. Get some resources to us, okay? Go and get some resources, or ask others to come over, okay? Go over to help them. Ask more people under the footbridge to come over, ask more people to come over, okay? Okay? Or help us bring some resources, bring some water. We don’t have sufficient resources here, ……..With more friends coming out, more friends coming out, this place can be safeguarded. Well, if later she pushes us, she pushes us, we sit still, sit still, sit still, with our arms in arms. Lie down here. There’s no other way. We let her carry (us away)…..” (Emphasis added)[211] 672. At around 3:56 p.m. on 28th September 2014, D8 addressed the people gathering at Fenwick Pier Street. He said amongst other things:- “D8: Would (you) people stay away from him/her? I believe that it still takes some time for the ambulance to arrive. If, when the clearance (operation) is carried out, (you) all (should) sit properly arm in arm instead of holding each other’s hands in this way……We (should be) arm in arm by holding our – that’s, er, this part, okay, can be easily held (and) linked, okay, okay?.....Hence, well, we will not walk ourselves. Just let him/her move (us away). They, in a group of four, move away one of us…..Well, we do not need to make resistance….Well, hence, (I) hope that we all hold fast to our posts…The greater number of people sitting here, the more difficult for them to carry out clearance…” (Emphasis added)[212] 673. At around 4:03 p.m. on 28th September 2014, D8 addressed the people gathering at Fenwick Pier Street. He said amongst other things:- “D8: …….However, we guard this place. More people go to the carriageways, let’s applaud. Go to the carriageways. Go to the carriageways. Go to the carriageways. Go to the carriageways. Civil disobedience. No fear. Orr, bring those for giving to the cops. Does anyone want to send them the gifts? Well, someone does. Let me tell (you) what to do. Well, you people make the decision yourself. I am not interested. Well, everybody, I heard that Harcourt Road was blocked by us also. Therefore, you must guard here. Well, we don’t go everywhere. Let’s guard here. Let’s have more people sitting here (and) see how (they) clear out us. If he/she further clear out (us), (if) he/she further besiege (us), I besiege him/her again, counter-besiege, okay? Well, later on I may be arrested (and) taken away. Well, later on I may be arrested and taken away, ….it’s not surprising, because he/she said I would incite you people to do such-and-such. However I think that you were not incited by me. You people have your own will. Right?........Therefore, can everybody hold fast to the post? Well, you promise me. Hold fast to the post. Hold fast to the post. Remain restraint. However, we (remain) restraint while we stand firm, right? Very firm. Unswerving. Civil disobedience. Unswerving. Civil disobedience. No fear. Unswerving. Civil disobedience. No fear. I want civil rights. Abolish the functional constituencies. Overthrow the (‘)Committee of Privilege(‘). Overthrow the (‘)Committee of Privilege(‘). LEUNG Chun-ying steps down.” (Emphasis added)[213] 674. At around 4:07 p.m. on 28th September 2014, D8 addressed the people gathering at Fenwick Pier Street. He said amongst other things:- “D8: Well, this is our demand, that is, civil disobedience without fear, (we) are not afraid of you at all, right?..... We are – I now briefly talk about some basic procedures, alright? The basic procedures, well, I hope everyone listen carefully, if you are (participating) in civil disobedience, alright? Well, if he/she wants to clear out (site) later, we defend here. When (he/she) comes to clear our (site), we link arms, lie down with arms interlinked. The closer, the better. More people sitting close together will be better, okay? Brunch together, well, well, sit here, link arms and lie down. No need to bump against him/her because we are unable to bump against (them), okay? We just sit here to defend, right? Well, then while we are defending, he/she will come to lift us slowly. ……Well, we are here, our duty is to stall his/her clearance (operation). We will try our best to increase -- increase our cost. ……… You lift (us), let’s see how many you can lift. We, here – you can lift two hundred (people) here, (but) there are still a thousand (people) inside, right? Is that right? Alright, let’s see how you lift (the people). Y – You come quickly to lift us…..Well, everybody, remember we don’t listen to them. We relax our limbs…… We just lie down for them to lift (us)… If you are large in size, you alone will be lifted by six to eight persons….Listen, I heard that…we got a piece of information….Gloucester Road was also blocked…….er, people who are not sitting, I hope (you) all can do one thing for me…….Okay, the present incumbent Convener YEUNG Ching-yin. Well, he --, er, --, er, bring everyone to take the mill barriers. We will make some …., make some barricades, alright? We have to help him. Well, we sit here and don’t move, don’t move. We sit here, well, and wait for him to speak. YEUNG Ching-yin: …… D8: Alright, let’s thank YEUNG Ching-yin,,,,,,,,, People help him – people follow him to help in bringing the mill barriers here, ….Everyone takes a rest, well, everyone takes a rest, (everyone) really needs to take a rest, because if (you) don’t get some rest now, it’s really toilsome. As we are having a long-term battle, so everyone really needs to take a rest now…” (Emphasis added)[214] 675. I have considered the contents of the aforementioned speeches made by D8 and viewed the video clips. I am satisfied that the intended audience of D8 in all the speeches he made at Fenwick Pier Street were the persons present at Fenwick Pier Street. D8 used a loud speaker when he addressed the people at Fenwick Pier Street, I am sure that the speeches of D8 were heard by those within the audibility range of the loud speaker. 676. In Exhibit P86, amongst other things, D8 asked the persons present at Fenwick Pier Street to: (i) occupy the carriageways of Fenwick Pier Street; and (ii) to ask other people to go to Fenwick Pier Street to occupy the carriageway. I am sure that the impugned words in Exhibit P86 were said for the purpose of rousing, stimulating, urging and stirring up the persons present to do what they were asked to do. Suggestions and proposals were clearly made to the persons present: (i) to occupy the carriageway of Fenwick Pier Street; and (ii) to ask other persons to go to Fenwick Pier Street to do the same. In my judgment, the impugned words said by D8 in Exhibit P86 amounted to incitement. 677. In his speeches at Pg. 1661 to 1667, 1668 to 1672, 1673 to 1675 and 1676 to 1682, D8 asked the persons present at Fenwick Pier Street to go to the carriageway to counter-besiege the police. He made it clear that the purpose was to stop the police from clearing the students at Tim Mei Avenue. 678. In my judgment, what D8 said at Pg. 1661 to 1667 amounted to an incitement made to the persons present at Fenwick Pier Street to occupy the carriageway of Fenwick Pier Street. 679. In D8’s speech at Pg. 1661 to 1667, D8 also asked the persons present at Fenwick Pier Street to ask their friends to go to Fenwick Pier Street. D8 made it clear that he expected most of the people who came out would take part in civil disobedience. In my judgment, there were two types of participants anticipated by D8 in his speech, firstly those who would take part in a public assembly without civil disobedience, and secondly, those who would take part in civil disobedience. D8 made it clear that he expected most of the participants would take part in civil disobedience. Putting what D8 said in its proper context, I am sure what he meant by taking part in civil disobedience was that the participants go to the carriageway to counter-besiege the Police. In fact, D8 made it clear in his speech at Pg. 1673 to 1675 that the protestors should sit on the carriageway. 680. I am satisfied what D8 said in Exhibit P86 at Pg. 1661 to 1667 amounted to an incitement to the persons present at Fenwick Pier Street: (i) to occupy the carriageway of Fenwick Pier Street; and (ii) to incite other persons to go to Fenwick Pier Street to do the same. 681. D8 and his targeted incitees were both present at Fenwick Pier Street at the time, I am sure that they knew what effect of the obstruction would have on the traffic on Fenwick Pier Street if the carriageway was fully occupied and obstructed. In fact, in his speech at Pg. 1661 to 1667, D8 made it clear to the persons present that traffic would be obstructed and bus service on Fenwick Pier Street, i.e. route number 18 would be affected. I am sure D8 understood and knew what the effect of the obstruction of the carriageway of Fenwick Pier Street would have on the traffic, and the persons present at Fenwick Pier Street were also aware of the same. 682. It is clear that the purpose of the occupation of the pavement and carriageway of Fenwick Pier Street was to counter-besiege the Police so that the Occupy Central movement in progress at Tim Mei Avenue could last indefinitely. That being the case, it must also be the intention of D8 that the carriageway of Fenwick Pier Street would be occupied as long as the Occupy Central movement at Tim Mei Avenue was in progress. In order words, the occupation of the carriageway of Fenwick Pier Street would also be for an indefinite period. 683. Given the instructions given by D8 to the persons present as to how they should prolong the occupation in the event of a clearance action, i.e. the protestors should relax their bodies, brunch together and link their arms, it would be very difficult for the police to lift all the protestors away within a short period of time. As D8 said defiantly:- “…let’s see how many you can lift. We, here – you can lift two hundred (people) here, (but) there are still a thousand (people) inside, right? Is that right? Alright, let’s see how you lift (the people)..” D8 also manifested his intention that the occupation of the carriageway would be for an indefinite period when he asked the people present to make some barricades as defence work. By what D8 said to the people present, D8 had made known his intention that he wanted the carriageway of Fenwick Pier Street to be occupied for an indefinite period of time, and by what he said, he had made his intention known to his audience. 684. I accept the protest that took place at Fenwick Pier Street was a peaceful one. 685. The incitements made by D8 in Exhibit P86 were made at a time when he knew Harcourt Road was blocked by protestors and Fenwick Pier Street was filled up with protestors. Fenwick Pier Street is a major thoroughfare in Wanchai and Admiralty. 686. The public assembly at Fenwick Pier Street on 28th September 2014 took place without any notification made to the Police, hence no measures could be taken in advance to militate against the obstruction and inconvenience that would be caused by the obstruction of the carriageway. 687. I am aware that the purpose of the occupation was to protect the Occupy Central movement in progress at Tim Mei Avenue. D8 called for the occupation of the pavements and carriageway to counter-besiege the Police who were cordoning off the venue at Tim Mei Avenue. In my judgment, no matter how effective the tactic of counter-besieging the Police was in safeguarding the Occupy Central movement at Tim Mei Avenue, the tactic of counter-besieging the Police would inevitably lead to obstruction of more public places and roads. As protestors counter-besieged the Police who were besieging the venue at Tim Mei Avenue, Harcourt Road and Fenwick Pier Street would be occupied by protestors, hence more obstruction and inconvenience would be caused to the public. 688. D8 also made it clear in his speech his objectives were: “I want civil rights. Abolish the functional constituencies. Overthrow the (‘)Committee of Privilege(‘). Overthrow the (‘)Committee of Privilege(‘). LEUNG Chun-ying steps down.” 689. I have taken into consideration all the circumstances leading to the making of the incitements by D8 in Exhibit P86. In my judgment, the scale of the occupation D8 called for was extensive. Fenwick Pier Street was an important thoroughfare linking Wanchai and Admiralty. The intended occupation was for an indefinite period. 690. I have borne in mind the protection given by the Basic Law to the citizens to participate in peaceful demonstration and the demonstration at Fenwick Pier Street on 28th September 2014 was a peaceful one. I have borne in mind the purpose of the demonstration at Fenwick Pier Street and Tim Mei Avenue. 691. Mr. Lok SC submitted that PW5 Tong Wai Tung “gave evidence that the fire engine concerned could still reach the destination by detouring. The delay caused is a few minutes. Inference could be drawn that the traffic inconvenience caused by the people’s gathering at Fenwick Pier Street may not be very substantial”.[215] 692. It should be noted that PW5 also gave evidence that with the detour the fire engine had taken, when the fire engine reached Queensway westbound outside the High Court, it had to make a U-turn at Lippo Centre against the traffic in order to reach its destination at Admiralty Centre, in other words, the fire engine had to travel on a carriageway exactly opposite to the ordinary carriageway for one to travel on. The length of delay must be understood in the light of the fact that the fire engine had to make a U-turn against the traffic. In my judgment, the severity of the obstruction and inconvenience caused to the public cannot be reflected by the delay occasioned to PW5’s fire engine. 693. Mr. Lok submits that “it is not the prosecution case and there is no evidence that when people gathered at the carriageway of Fenwick Pier Street, the district in the vicinity would be blocked”.[216] In my judgement, given the severity and the intended duration of the obstruction caused by the occupation of the carriageway of Fenwick Pier Street and other factors identified in the judgment of Yeung May Wan, there is ample evidence to support a finding that the traffic inconvenience caused by the blockage of the carriageway was substantial. In my judgment, to cause substantial traffic inconvenience, the district in the vicinity did not have to be blocked. 694. Mr. Lok SC drew my attention to D8’s reaction to the appearance of PW5’s fire engine in Exhibit P86 at Pg. 1685 to 1686 and submitted that D8’s speech upon seeing the fire engine shows that he never told anyone to do anything to block fire engines from passing through Fenwick Pier Street. Instead D8 asked the pickets/marshals to understand the matter and he warned people not to force their way over to the fire engine. Mr. Lok SC submitted that what D8 did was consistent with what he had previously told the people, i.e. they should only disallow police cars to go through and they must let ambulances to go through.[217] 695. In my judgment, though D8 did not ask the crowd to block the passage of PW5’s fire engine, D8 still asked the marshals to understand and then tell him what the matter was at a time when the siren of the fire engine was on. He insisted to know the reason for the fire engine’s appearance. Eventually, PW5’s fire engine left to take a detour. What D8 asked the crowd and the marshals to do, i.e. that enquiry be made and D8 be told the reason for the fire engine’s appearance, would take time to complete, it would be wholly unreasonable for D8 to require the firemen on PW5’s fire engine on call to a ‘Multiple Casualties Incident” with its siren on to explain to the crowd/marshals why they had to travel pass Fenwick Pier Street and seek permission from them to do so. D8 and the crowd might not know PW5 and his colleagues were on call to a ‘Multiple Casualties Incident’, but they certainly knew that the fact that the siren was on signified the urgency of the matter. I am sure D8 was mature enough to know, so were the people present at Fenwick Pier Street, as the siren of the fire engine was on, every minute counted for the firemen on board the fire engine and the people awaiting the arrival of the fire engine at Admiralty Centre. 696. In my judgment, what D8 incited the people to do at Fenwick Pier Street was not a reasonable use of the carriageway of Fenwick Pier Street. The obstruction to the traffic and inconvenience caused to the public would be so serious that would exceed the bounds of reasonableness and the protection given by the Basic Law to the right to peaceful demonstration. I find the obstruction that would be caused was not warranted by law. 697. From the computer certificates produced, I am satisfied that the obstruction of the carriageway of Fenwick Pier Street would result in the suffering of common injury by common members of the public. 698. From the evidence, I am satisfied that when D8 repeated urged the people at Fenwick Pier Street to occupy the carriageway of Fenwick Pier Street in Exhibit P68, he intended that the incitees, i.e. the persons present at Fenwick Pier Street who heard the incitements, would do the act incited by him, that is to say, to cause obstruction to public places and the carriageway of Fenwick Pier Street, with the mens rea of public nuisance, i.e. the incitees knew, or ought to have known (because of the means of knowledge were available to them) the consequence of the obstruction of the carriageway of Fenwick Pier Street. 699. In this case, the incitees were present at Fenwick Pier Street when the incitements were made, they must be aware of what was going on at the time of the incitements and what the effect of an indefinite obstruction of the carriageway of Fenwick Pier Street would have on the traffic if they acted as D8 incited. 700. In my judgment, the utterances made by D8 in Exhibit P86 urging the people present to occupy and sit on the carriageway of Fenwick Pier Street amounted to an unlawful incitement to cause a public nuisance to the public by unlawfully obstructed the carriageway of Fenwick Pier Street. 701. From the evidence, I am satisfied that when D8 urged the people at Fenwick Pier Street to ask their friends to come to Fenwick Pier Street and occupy the carriageway of it, he intended that the incitees, i.e. the persons present at Fenwick Pier Street who heard the incitement, would do an act which would involve the commission of the offence of incitement, i.e. inciting a public nuisance to the public by unlawfully obstructing the carriageway of Fenwick Pier Street, i.e. the actus reus for the offence of “incitement to incite public nuisance”. 702. I am sure that when D8 made the above incitement, he intended or believed that the incitees (the persons present at Fenwick Pier Street) would incite other persons (the friends of the incitees) to do the act incited, i.e. to cause a nuisance to the public by unlawfully obstructing the carriageway of Fenwick Pier Street and that the incitees (the persons present at Fenwick Pier Street) would do the act with the mens rea required for incitement, i.e. in this case, an intention to incite their friends. 703. In my judgment, on the basis of the incitement made by D8 in Exhibit P86, D8 had unlawfully incited the persons at Fenwick Pier Street to incite other persons by unlawfully obstructing the carriageway of Fenwick Pier Street. Conclusions on Charge 4 and Charge 5 704. I find all the elements of Charge 4 and Charge 5 are proved against D8 beyond reasonable doubt. 705. I find D8 guilty of Charge 4 and Charge 5. Charge 6: Incitement to Commit Public Nuisance (against D9) 706. Charge 6 concerns words said by D9 at Harcourt Road near Tim Mei Avenue on 28th September 2014. 707. The words that were said by D9 and relied upon by the Prosecution to prove the charge were captured on videos and produced as evidence. 708. It should be noted that in Admitted Facts IV reached by the Prosecution and D9, video clips which captured speeches made by other defendants at other locations on 27th and 28th September 2014 were also produced.[218] Those speeches do not form the subject matters of complaint of Charge 4 and Charge 5, they were produced to show the background against which the alleged incitements were made by D9 at Harcourt Road on 28th September 2014. 709. It should be noted that though D9 appeared in Exhibit P71 and P72, he was then at Fenwick Pier Street, not Harcourt Road, hence D9 was not addressing the people at Harcourt Road when he spoke at around 3:09 p.m. at Fenwick Pier Street.[219] 710. The alleged incitements which form the subject matters of Charge 6 are contained in the speeches made by D9 at Harcourt Road in the afternoon on 28th September 2014. 711. At around 3:13 p.m. on 28th September 2014, D9 addressed the people gathering at Harcourt Road, he said:- “D9: Was (it) received at that position? The people, the members of the public on that side, the right-hand side, please move backwards for 50 steps as far as possible to occupy the space at the back. This is because (it) starts to be crammed, many people are coming. Good! All (people) here, everybody moves backwards slowly and orderly, occupy the entire carriageway and the lawn at the back. Reserve an open area here for the members of the public who are coming. Some (people) have started coming [indistinct] (You) all can take (your) time to come (here), don’t hurry. Move backwards slowly, move to the back, thank you very much.” (Emphasis added)[220] 712. A few minutes later, at around 3:15 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: Well! (We) continue to appeal to the people on the right-hand side here. (You) can move backward as far as possible because we still see many members of the public coming. We want to gather more people before we decide the next steps, okay(?) Everybody, (please) give a helping hand, move backward (from) here as far as possible. Everybody, thank you very much.”[221] 713. At around 3:32 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: Well! Here, an access is maintained here for our people to walk over there! As far as possible, avoid moving backward. Everybody, thank you very much!”[222] 714. At around 3:35 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: The headquarters of the organizer has notified us that the police have cordoned off all the entrance and exit passages including Admiralty Centre and the …er…exit of Liberation Army (Building). However, [indistinct] part of the crowds of people have sat on Harcourt Road to block the road leading to Central. Anyway, firstly [indistinct] now the (traffic) on (the section) of Harcourt Road from Sai Wan towards Central (and) towards Admiralty has probably slowed down or even at a standstill. Secondly, the crowds in Admiralty Centre haven’t moved. Some people amongst them attempted to jump from a bridge. (They) didn’t jump then. Well, fire engines have placed four to five air mattresses (there). The (traffic) going from east to west on Harcourt Road was also closed. Long live the power of people. Long live the power of people, long live the power of people, long live the power of people, Everyone keeps it up.” (Emphasis added)[223] 715. At around 3:39 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: Well, (we) have just received a phone call from LAI Chee-ying. Ai, he seldom calls us. LAI Chee-ying said there were more than ten thousand people in the LegCo, they [indistinct] sacrificed (themselves), and the morale amongst them was very high. (I) said I would not get inside, I would live and die together with these crowds, Okay? [Indistinct] (We have to) think of some strategies. In a word, (we) have to (persist in our) protest until the end, everybody hangs on.” (Emphasis added)[224] 716. At around 3:46 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: Listen, I remind (you), LEUNG Chun-ying just held a press conference on that side at three o’clock. However, these things were said again. Now, in the next stage, about three thousand and two (hundred) people are assigned to nominate the Chief Executive of Hong Kong Special Administrative Region. Do (you) agree? (We) don’t listen to (him) saying these things, that is, saying this rubbish again. [Indistinct] LEUNG Chun-ying, all besiege the entrance on Harcourt Road, wait for ‘Ho Ming’ (transliteration) to come back, then we will take action! Okay? Everybody waits for a moment!” (Emphasis added)[225] 717. At around 3:51 p.m., D9 addressed the people gathering at Harcourt Road and said:- “Listen, everybody, can (you) hear me? Listen, we have a suggested action for everybody’s consideration, everybody sees that there are crowds of people standing by the side of the flower bed on Harcourt Road at the back. Well, er, as what we have said, at Admiralty Station, Harcourt Road, there are crowds sitting on a road suspending the traffic. I have a very bold suggestion – listen, our people in the front now start walking to the flower bed outside, and then sit on the road to carry out civil disobedience, Okay? Everybody follows me, well, I have just said, I have just said, I have just said that those (people) who don’t prepare for civil disobedience, don’t need to follow my action. You can continue to sit in the front road, okay? Those (people) who don’t prepare for being arrested by the police, please come forward first, because you can withstand them here. Our people at the back go to the back, okay? Those crowds stand up (here) first. Those crowds, who don’t move, stand up first.” (Emphasis added)[226] 718. At around 3:57 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: All people come over here! Come over! Come over!..... [Indistinct]…..Come over! Come over! I haven’t {Indistinct}…… Come over! All come over! Al come over! Come over! Come over!”[227] 719. At around 3:59 p.m., D9 addressed the people gathering at Harcourt Road. He said:- “D9: All come over, come over…… All come over, all come over. All come over, all come over here. All come over, all come over. Come over, all come over, all come over…” D9 also asked everybody present to support the students.[228] 720. At around 3:59 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: People opposite to Admiralty Centre, can you hear (me)? People opposite to Admiralty Centre, (if) you can hear (me), leading by your leader, come over together, okay? Come over, come over, come over, come over, come over………Our crowd can walk over there to join them, okay? The crowd on our side, walk across the road slowly, join (the people) on the opposite side, okay? Come over, come over, come over, come over. Those opposite to Admiralty (Centre), come over here slowly. Let’s meet together and have an assembly, okay? We have an assembly on – on the road, assembly on the road. The crowd on the opposite side of Admiralty (Centre), walk over here, walk over here slowly. Our crowd here, walk over there slowly, to join them, okay?” (Emphasis added)[229] 721. At around 4:05 p.m., D9 chanted the slogan “Support the students” with the people at Harcourt Road and said:- “D9: People opposite to Admiralty Centre, can you hear?...... as led by your leader, (let’s) come over together, okay? Come over, come over,………come over.” (Emphasis added)[230] 722. At around 4:09 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: Everybody at CGO, the road is open! It’s us, the crowd! It’s us, members of public (who) opened the road! Long live the power of people! Long Live the power of people! Long live the students! Long live the students! Support the students! Support the students!...........Keep it up! Keep it up!......Friends, if you are on the six lanes of Harcourt Road, I suggest that you may sit down peacefully and have the assembly here. Sit down peacefully, sit down peacefully, have the assembly here. Support the students. Sit down here……, show LEUNG Chun-ying that we have over 100,000 people in support of the students, sitting down here. Sit down, and then allow the crowd to come in… inside, to the six lanes, and sit down. Support the students. Don’t go away. Support the students. Don’t go away. Thank you, friends at the front. Gradually ask the people behind to take their time to sit down. Sit all over the six lanes. Sit all over on the six lanes, to support the students. Sit all over on the six lanes, sit all over the six lanes. Support the students. Okay.” (Emphasis added)[231] 723. At around 4:12 p.m., D9 addressed the people gathering at Harcourt Road and said:- “D9: Open the road! Open the road! Open the road! Open the road!..........Look, I know that some people among us (come here to) support the students, (and) have brought materials here. Now, please pass them on slowly, er, to the lawn where the materials will be placed. Thank you everybody. Everybody, please sit down or stand on these six lanes, don’t stand on these six lanes, don’t move, support the students, thank you everybody.” (Emphasis added)[232] 724. At around 4:15 p.m., D9 addressed the people gathering at Harcourt Road and called for the release of Wong Chi Fung and Chow Yong Kang.[233] 725. At around 4:38 p.m. and 4:43 p.m., D9 addressed the people gathering at Harcourt Road and demanded the Police to open the road.[234] 726. At around 4:49 p.m., D9 addressed the people gathering at Harcourt Road and demanded the Police to remove the Mill barriers.[235] 727. At around 5.52 p.m., D9 addressed the people gathering at Harcourt Road and shouted “Rush! Rush! Rush! Rush!....” with the people present.[236] 728. I have considered the contents of the aforementioned speeches made by D9 and viewed the relevant video clips. I am satisfied that the intended audience of D8 in all the speeches he made at Harcourt Road were the persons present at Harcourt Road. D9 used a loudspeaker when he made his addresses. I am sure that the speeches of D9 were heard by those who were within the audibility range of the loud speaker. In fact, D9 was careful to make sure that the loud hailer was working.[237] 729. In Exhibits P71, P79 and P80, amongst other things, D9 asked the persons present on both sides of Harcourt Road to go out to the carriageways, sit down and occupy all six carriageways of Harcourt Road. I find that the impugned words in Exhibits P71, P79 and P80 were said for the purpose of rousing, stimulating, urging the people on both sides of Harcourt Road to do what D9 asked them to do. Suggestions and proposals were clearly made to the people present (i) to walk out to the road and sit on the road to carry out civil disobedience; (ii) to besiege the entrance on Harcourt Road. In fact, D9 called what he was about to tell the people on both sides of Harcourt to do a “suggested action”.[238] 730. I am satisfied that the incitements made by D9 in Exhibits P71, P79 and P80 amounted to incitements made to the persons present at Harcourt Road to occupy the 6 carriageways of Harcourt Road. 731. D9 and his targeted audience were both present at Harcourt Road at the time, I am sure that they knew what obstruction would be caused to the traffic on Harcourt Road if all 6 carriageways were occupied and obstructed. 732. Mr. Choy SC submitted that the Prosecution fails to prove that the assembly at Harcourt Road was held without a Notification of Intention to Hold a Public Meeting. For the reasons given in my analysis of PW1 and PW2’s evidence, I find that the assembly at Harcourt Road on 28 September 2014 was held without notification. In fact, what was said by D9 in Exhibit P71 reveals that he knew for a fact the assembly he was asking the people to hold on the road was without any notification. 733. At the time, D9 said:- “…listen, our people in the front now start walking to the flower bed outside, and then sit on the road to carry out civil disobedience, Okay? Everybody follows me, well, I have just said, I have just said, I have just said that those (people) who don’t prepare for civil disobedience, don’t need to follow my action. You can continue to sit in the front road, okay? Those (people) who don’t prepare for being arrested by the police, please come forward first, because you can withstand them here.” 734. In the above address, D9 was conscious to ask only the protestors who were prepared to take part in civil disobedience to sit on the road. If D9 believed a Notification of Intention to Hold a Public Meeting had been served, he would not have thought that the assembly on the carriageways of Harcourt Road would involve civil disobedience. 735. Mr. Choy SC submitted “People arriving from every direction tried to find all sorts of ways to get as close to Tim Mei Avenue as possible. The closest spot they could get to was the junction between Tim Mei Avenue and Harcourt Road. Being blocked from proceeding any further, the crowd gradually built up at the junction. As the crowd swelled, the blocking of Harcourt Road became inevitable. The fact that the blocking started at the junction and not anywhere else shows that the protesters’ intention was not to stay on Harcourt Road, but were merely trying to find a way into Tim Mei Avenue”.[239] 736. It should be noted that amongst others things said by D9, he asked the people present at Harcourt Road to besiege the entrance on Harcourt Road: “…, all besiege the entrance on Harcourt Road,…”.[240] He also asked the people gathering on Harcourt Road to have an assembly on the road: “Let’s meet together and have an assembly, okay? We have an assembly on – on the road, assembly on the road.”[241] D9 told the crowd that he learnt that there were more than ten thousand people at the Legislative Council but he would not go into the venue at Tim Mei Avenue and would “live and die together with these crowds…”, i.e. the people gathering on Harcourt Road.[242] 737. On the other hand, in Exhibit P80 at Pg. 1931, D9 together with the protestors demanded that the Police should open the road; in Exhibit P84 at Pg. 1544, D9 demanded the Police to remove the mills barriers. 738. It is clear to me that whilst at one point D9 was looking for the opportunity to merge the protestors and the occupied area at Harcourt Road with the protestors and the venue at Tim Mei Avenue, hence the demand for the opening of the road and the removal of the mills barriers; on the other hand, D9 was also prepared to continue to occupy the 6 carriageways of Harcourt Road as a measure to counter-besiege the Police hence he vowed that he would not enter the venue. D9 made it clear in many of his speeches he wanted to support the students. It is clear that the purpose of the occupation of the carriageways of Harcourt Road was to counter-besiege the Police whether or not D9 and the Protestors could enter and join force with the public assembly in progress at Tim Mei Avenue. It must also be the intention of D9 that the carriageways of Harcourt Road would be occupied as long as the Occupy Central movement at Tim Mei Avenue was in progress and required counter-besieging of the Police. I am sure that the occupation of the carriageways of Harcourt Road would also be for an indefinite period. 739. In Exhibit P71 at Pg. 1563, D9 asked the people at Harcourt Road to persist in their protest until the end; in Exhibit P79 at Pg. 1628, he made arrangement for the material supplies brought to Harcourt Road. These utterances by D9 at the time reinforce my finding that D9 intended the occupation of the carriageways of Harcourt Road would be for an indefinite period and he had made known his intention to the people present at Harcourt Road. 740. Mr. Choy SC submitted that the Police, instead of fulfilling their positive duty to facilitate the demonstration which was likely to go on for a longer period of time, decided to adopt a policy of prohibiting access to the CGC, i.e. the Exclusion Plan implemented by Senior Superintendent Dover. He submitted in Para. 71 of D9’s Closing Submissions that “The cordoning off of the CGC was unwarranted and is an unconstitutional interference of the protesters right to demonstrate. P has not produced any credible evidence to show why such measure was necessary and proportionate in the circumstances, nor why it was even legal. The Exclusion Plan thus fails both the requirement of legality and proportionality.” 741. The Exclusion Plan of the Police must be understood in the light of what D1 said when he announced the launch of Occupy Central at around 1:36 a.m. on 28th September 2014. D1 said, amongst other things: “Occupy Central will begin with occupying the Central Government Offices”.[243] The Exclusion Plan that Senior Superintendent Dover implemented on 28th September 2014 was a necessary and proportionate measure to the threat to occupy the Central Government Offices. There were a large number of protesters at Tim Mei Avenue, there were incitements made to call for more people to join the movement in progress at Tim Mei Avenue. It would be most irresponsible if the Police were to take the threat to occupy the CGC lightly. In my judgment, it was reasonable and lawful for the Police to prohibit protestors’ access to the CGC in order to protect the integrity of the CGC, which had been expressly made a target of occupation in the early hours on 28th September 2014. 742. In my judgment, the decision to cordon off Tim Mei Avenue made by PW2 on 26th September 2014 shows that the Police had fulfilled their positive duty to facilitate the holding of the demonstration in progress at Tim Mei Avenue at a time when the number of demonstrators swelled and demonstrators began to demonstrate on the carriageway of Tim Mei Avenue. After a threat was made to occupy the CGO and given the fact that there was a large number of demonstrators appearing at Harcourt Road near the CGO, it was unreasonable to expect and demand the Police to cordon off yet another road, i.e. Harcourt Road to facilitate the holding of a demonstration there. 743. I accept the public assembly and protest that took place at Harcourt Road was a peaceful one. 744. Harcourt Road is a major thoroughfare linking Wanchai, Admiralty and Central. The incitements of D9 in the afternoon of 28 September 2014 were made at a time when he knew part of the crowds were people sitting on the carriageway of Harcourt Road to block the westbound traffic of Harcourt Road, he also knew that the eastbound traffic had probably slowed down or even at a standstill as a result[244] and there were over 10,000 protestors at Tim Mei Avenue.[245] 745. As said, I find that the public assembly at Harcourt Road on 28th September 2014 took place without any prior notification made to the Police, hence no measures could be taken in advance to militate against the obstruction and inconvenience that would be caused by the blockage of the 6 carriageways of Harcourt Road. 746. I am aware that the purpose of the occupation was to support the students and protect the Occupy Central movement in progress at Tim Mei Avenue. D9 called for the occupation of the six carriageways of Harcourt Road to counter-besiege the Police who were cordoning off the venue at Tim Mei Avenue. 747. In my judgment, no matter how effective the tactic of counter-besieging the Police was in safeguarding the Occupy Central movement at Tim Mei Avenue, the tactic of counter-besieging the Police would inevitably lead to obstruction of more public places and roads. As protestors occupied the carriageways of Harcourt Road to counter-besiege the Police who were cordoning off the venue at Tim Mei Avenue, further obstruction and inconvenience caused would be caused to the public. 748. I have taken into consideration all the circumstances leading to the making of the incitements by D9 in Exhibits P71, P79 and P80. In my judgment, the scale of the occupation D9 called for was extensive. He called for the occupation of all six carriageways of Harcourt Road, a major thoroughfare linking Wanchai, Admiralty and Central. The intended occupation was for an indefinite period. 749. I have borne in mind the protection given by the Basic Law to the citizens to participate in peaceful demonstration and the demonstration at Harcourt Road on 28th September 2014 was a peaceful one. I have borne in mind the purpose of the demonstration at Harcourt Road and Tim Mei Avenue. 750. In my judgment, what D9 incited the persons to do at Harcourt Road was not a reasonable use of the carriageways of Harcourt Road. The obstruction to the traffic and inconvenience caused would be so serious that would exceed the bounds of reasonableness and the protection given by the Basic Law to the right to peaceful demonstration. I find the obstruction that would be caused was not warranted by the law. 751. From the computer certificates,[246] I am satisfied that the occupation of the six carriageways of Harcourt Road would result in the suffering of common injury by common members of the public. 752. From the evidence, I am satisfied that when D9 repeatedly urged the people on both sides of Harcourt Road to occupy the six carriageways of Harcourt Road, he intended that the incitees, i.e. the persons present at Harcourt Road who heard the incitements, would do the act incited by him, that is to say, to cause obstruction to the carriageways of Harcourt Road by going out to the carriageways from both sides, joining together and sitting on the road to hold a public assembly, i.e. the incitees knew, or ought to have known (because of the means of knowledge were available to them) the consequence of the obstruction of the carriageways of Harcourt Road. 753. In this case, the incitees were present at Harcourt Road, they must be aware of what was going on at Harcourt Road at the time of the incitements and what the effect of an indefinite obstruction of all the carriageways of Harcourt Road would be if they acted as D9 incited. 754. In my judgment, the utterances made by D9 to in Exhibits P71, P79 and P80 urging the people to occupy and sit on the six carriageways of Harcourt Road amounted to an unlawful incitement to cause a public nuisance to the public by unlawfully obstructed the carriageway of Fenwick Pier Street. Conclusion on Charge 6 755. I am satisfied that all the elements of Charge 6 are proved against D9 beyond reasonable doubt. 756. I find D9 guilty of Charge 6. THE VERDICT 757. On Charge 1 “Conspiracy to Commit a Public Nuisance” (against D1 to D3), I find D1 to D3 guilty. 758. On Charge 2 “Incitement to Commit Public Nuisance” (against D1 to D7), I find D1, D2, D4, D5, D6 and D7 guilty of Charge 2. 759. I find D3 not guilty of Charge 2. 760. On Charge 3 “Incitement to Incite Public Nuisance” (against D1 to D7), I find D4, D5, D6 and D7 guilty of Charge 3. 761. I find D1 to D3 not guilty of Charge 3. 762. On Charge 4 “Incitement to Commit Public Nuisance” (against D8 only), I find D8 guilty of Charge 4. 763. On Charge 5 “Incitement to Incite Public Nuisance” (against D8 only), I find D8 guilty of Charge 5. 764. On Charge 6 “Incitement to Commit Public Nuisance” (against D9 only), I find D9 guilty of Charge 6. [1] Exhibit D3-1 [2] Exhibit D2-13 [3] Exhibit D3-2 [4] Exhibit P153 [5] Exhibit P148 [6] Exhibit P150 [7] Exhibit P149 and P151 [8] Exhibit P1 [9] Exhibit P2 [10] Exhibit P3 [11] Exhibit P152 [12] Exhibit P156 [13] Exhibit D2-7 [14] Exhibit D5-1 [15] Exhibits P145 to P147 [16] Exhibit D6-3 [17] Exhibit P152 [18] Exhibit D3-1 [19] Exhibit D3-2 [20] Exhibit D8-1 [21] Exhibit P153 [22] Exhibit D3-1 [23] Exhibit D2-3 [24] Exhibit D2-6 [25] Exhibit D2-4 [26] Exhibit D2-4 [27] Exhibit D3-1 [28] Exhibit P100, page 603 [29] Exhibit P20, page 1107 [30] Exhibit LL-1 [31] Exhibit P124 [32] Exhibit P124, page 741 [33] Exhibit P124, page 757 [34] Exhibit P44, page 1329, Exhibit P124, page 750 [35] Exhibit P64, page 1482-1483 [36] Exhibit P124, page 742-743 [37] Exhibit P20, page 1107 [38] Exhibit P20, page 1107 [39] Exhibit D2-2 [40] including Exhibit D2-2 [41] Exhibit P130 and P131 [42] Exhibit P134 [43] Exhibit P120 [44] Exhibit P110, P112 and P126 [45] Exhibit P128 [46] Exhibit P130 and P131 [47] Exhibit P158 is the relevant screen capture [48] Exhibit D3-1 [49] Exhibit D2-13 [50] Exhibit P153 [51] Exhibit D2-16 [52] Exhibit D2-3 and D2-5 [53] Exhibit P100, page 603 [54] Exhibit D2-12 [55] Exhibits D2-2 and D2-3 [56] Exhibit P17, page 1102 [57] Exhibit P20, page 1107 and Appendix I of the Prosecution’s Closing Submission [58] Exhibit P20, page 1107 and Page 1111 and Appendix I of the Prosecution’s Closing Submissions [59] Exhibit P40, page 1244-1245, and Appendix I of the Prosecution’s Closing Submissions [60] Exhibit P69, pages 1545-1546 and Appendix I of the prosecution’s Closing Submissions [61] Exhibit P74, pages 1588-1589 and Appendix 1 of the Prosecution’s Closing Submissions [62] Exhibit P74, pages 1591-1592 and Appendix 1 of the Prosecution’s Closing Submissions [63] Exhibit P74, page 1593 and Appendix 1 of the Prosecution’s Closing Submissions [64] Exhibit P74, page 1594 and Appendix 1 of the Prosecution’s Closing Submissions [65] Exhibit P74, page 1598 and Appendix 1 of the Prosecution’s Closing Submissions [66] Exhibit P-104 [67] Exhibits P-116-117 [68] Exhibit P-108 [69] Exhibit D3-1 [70] Exhibit P124, page 742 [71] Exhibit P124, page 757 [72] Exhibit P124, page 754 [73] Exhibit P134, page 850-851 [74] Exhibit P20, page 1107 [75] Exhibit P156 [76] Exhibits P145 to P147 [77] Exhibit P20 [78] Exhibit P124 [79] Exhibit P44, page 1329 and Exhibit P100, page 603 [80] Exhibit P444, page 1318 [81] Exhibit P44, page 1329 [82] Exhibit P128, page 791-794 [83] Exhibit P17, page 1102 [84] Exhibit P20, page 1107 and Appendix I of the Prosecution’s Closing Submission [85] Exhibit P20, page 1107 and Page 1111 and Appendix I of the Prosecution’s Closing Submissions [86] Exhibit P40, page 1244-1245, and Appendix I of the Prosecution’s Closing Submissions [87] Exhibit P69, pages 1545-1546 and Appendix I of the Prosecution’s Closing Submissions [88] Exhibit P74, pages 1588-1589 and Appendix 1 of the Prosecution’s Closing Submissions [89] Exhibit P74, pages 1591-1592 and Appendix 1 of the Prosecution’s Closing Submissions [90] Exhibit P74, page 1593 and Appendix 1 of the Prosecution’s Closing Submissions [91] Exhibit P74, page 1594 and Appendix 1 of the Prosecution’s Closing Submissions [92] Exhibit P74, page 1598 and Appendix 1 of the Prosecution’s Closing Submissions [93] Exhibit P32, page 1160-1161 [94] Exhibit 20 [95] Exhibit P44 [96] Exhibit P59, page 1457-1458 [97] Exhibit P64, page 1482-1483 [98] Exhibit P66, page 1522-1523 [99] [100] Exhibit P9, page 1044-1050 [101] Exhibit P10, page 1051-1063 [102] Exhibit P11, page 1064-1068 [103] Exhibit P16, page 1083-1097 [104] Exhibit P20, page 1108 [105] Exhibit P32, page 1164-1168 [106] Exhibit P33, page 1169-1170 [107] Exhibit P33, page 1174-1175 [108] Exhibit P35, page 1189 [109] Exhibit P38, page 1224 [110] Exhibit P41, page 1259 [111] Exhibit P43, page 1306-1308 [112] Exhibit P44, page 1337 [113] Exhibit P16, page 1082 [114] Exhibit P27, page 1126 [115] Exhibit P27, page1129-1132 [116] Exhibit P27, page 1135-1137 [117] Exhibit P28, page 1140-1141 [118] Exhibit P28, page 1143-1144 [119] Exhibit P32, page 1163 [120] Exhibit P32, page 1165-1166 [121] Exhibit P33, page 1173 [122] Exhibit P35, page 1189 [123] Exhibit P35, Page 1192-1193 [124] Exhibit P57, page 1447 and 1450 [125] Exhibit P61, page 1465-1466 [126] Exhibit P59, page 1456 [127] Exhibit P64, page 1485 [128] Exhibit P64, page 1486 [129] Exhibit P66, page 1517 [130] Exhibit P17 [131] Exhibit 17, page 1198-1102 [132] Exhibit 27, page 1138-1139 [133] Exhibit 28, page 1142 [134] Exhibit 28, page 1143-1144 [135] Exhibit P33, page 1172 [136] Exhibit P32, page 1185-1186 [137] Exhibit P35. Page 1192-1193 [138] Exhibit P37, page 1212-1213 [139] Exhibit P38, page 1225-1126 [140] Exhibit P38, page 1230 [141] Exhibit P44, page 1332 [142] Exhibit P45, page 1370 [143] Exhibit P48, page 1399 [144] Exhibit P27, page 1127-1128 [145] Exhibit 35, page 1186-1187 [146] Exhibit P38, page 1222 and 1125 [147] Exhibit P40, page 1244-1245 [148] Exhibit P43, page 1316-1317 [149] Exhibit P44, page 1318-1319 [150] Exhibit P44, page 1321-1326 [151] Exhibit P45, page 1342 and 1347 [152] Exhibit P48, page 1400-1401 [153] Exhibit P53, page 1423-1425 and 1427-1428 [154] Exhibit P69 (pages 1545-1546) and Exhibit P74 (pages 1588-1598) [155] Exhibit P66, page 1515 [156] Exhibit P66, page 1520 [157] Exhibit P66, page 1522 [158] Exhibit P67, page 1529-1531 [159] Exhibit P67, page 1533 [160] Exhibit P68, page 1539 [161] Exhibit P69 and P74 [162] Exhibit P20, page 1107 [163] Exhibits P145-147 [164] Exhibit P20, page 1107 and Page 1111 [165] Exhibit P41, Pages 1259-1260 [166] Exhibits P145-147 [167] Exhibit P20, page 1107 and Page 1111 [168] Exhibit P74, pages 1588-1589 [169] Exhibit P74, pages 1591-1592 [170] Exhibit P74, page 1593 [171] Exhibit P74, pages 1588-1589 [172] Exhibit P27 [173] Exhibit P32 [174]Exhibit P61 [175] Exhibits P27, P35 and P38 [176] Exhibit P53 [177] Para. 96-98 of D7’s Closing Submissions [178] Para. 103 of D7’s Closing Submissions [179] Exhibits P145-147 [180] Para. 100-102 of D7’s Closing Submissions [181] Exhibits P27 [182] Exhibit P32 [183] Exhibit P61 [184] Exhibits P145-147 [185] Exhibit P17, page 1102 [186] Exhibit P40, page 1244-1245 [187] Pg. 1098 [188] Exhibits P145-147 [189] Exhibit P69, pages 1545-1546 [190] Exhibit P74, page 1594 [191] Exhibit P74, page 1598 [192] Pg. 1594 and 1598 [193] Pg. 1594 and 1598 [194] Pg. 1594 and 1598 [195] Exhibit P67, pages 1529-1531 [196] Pg. 1594 and 1598 [197] Pg. 1594 and 1598 [198] Pg. 1594 and 1598 [199] Pg. 1594 and 1598 [200] Pg. 1594 and 1598 [201] Pg. 1594 and 1598 [202] Pg. 1589 [203] Pg. 1244 [204] Para. 19 of the Prosecution’s Opening [205] Exhibits P20 and P74, Appendix I of the Prosecution’s Closing [206] Exhibits P17, P40 and P74 [207] Exhibit P40 at pages 1244-1245 [208] Pg. 1107 and 1111 [209] Pg. 1588-1589 [210] Exhibit P40 at Pg. 1244-1245 [211] Exhibit P86, pages 1661-1667 [212] Exhibit P86, pages 1668-1672 [213] Exhibit P86, pages 1673-1675 [214] Exhibit P86, pages 1676-1685 [215] Para. 24 of D8’s Closing Submission [216] Para. 24 of D8’s Closing Submissions [217] Para. 26 of D8’s Closing Submissions [218] Para. 4 to 27 of Admitted Facts IV [219] Exhibit P71, Pg. 1557 to1558 [220] Exhibit P71, page 1559 [221] Exhibit P71, page 1560 [222] Exhibit P71, page 1561 [223] Exhibit P71, page 1562 [224]Exhibit P71, page 1563 [225] Exhibit P71, page 1564 [226] Exhibit P71, page 1565-1566 [227] Exhibit P79, page 1621 [228] Exhibit P79, page 1622-1623 [229] Exhibit P79, page 1624-1625 [230] Exhibit P80, page 1640-1641 [231] Exhibit P79, page 1626-1627 [232] Exhibit P79, page 1628 [233] Exhibit P80, page 1629 [234] Exhibit P80, page 1630-1631 [235] Exhibit P79, page 1644 [236] Exhibit P84, page 1645 [237] Exhibit P79, page 1622 [238] Exhibit P71, page 1565 [239] Para. 72 of D9’s Closing Submissions [240] Exhibit P71, Pg. 1564 [241] Exhibit P79, Pg. 1624 to 1625 [242] Exhibit P71, Pg. 1563 [243] Exhibit P44 at Pg. 1321, Para. 18 of Admitted Facts IV [244] Exhibit P71, page 1562 [245] Exhibit P71, page 1563 [246] Exhibits P145-P147
Chief Justice Ma: 1. I agree with the Reasons for Judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 2. At the hearing, the Court unanimously dismissed this appeal with reasons to be provided later. My reasons are as follows. 3. The immediate question raised on this appeal is whether a police officer carrying out duties within the precincts of the Legislative Council (“Legco”) qualifies as an “officer of the Council” so that obstructing him in the execution of his duty constitutes an offence against section 19(b) of the Legislative Council (Powers and Privileges) Ordinance (“LC(PP)O”).[1] That section provides: “Any person who ... assaults, interferes with, molests, resists or obstructs any officer of the Council while in the execution of his duty ... commits an offence and is liable to a fine of $10,000 and to imprisonment for 12 months.” 4. A broader question also arises as to the circumstances in which police officers may lawfully enter and perform policing duties within Legco’s precincts. A. The events leading to the present appeal 5. On 13 June 2014, Legco’s Finance Committee was in session, discussing a funding application relating to advanced works at the North East New Territories New Development areas. Persons who objected to such development were demonstrating outside the Chamber, initially at a designated demonstration area. However, some of the protesters rushed to the entrances of the Legco building with a view to gaining entry through glass doors which had been locked and which were barred by metal Mills barriers set up in front of those doors. 6. As the protesters started removing the Mills barriers, ignoring the warnings of Legco security staff against doing so, the Chief Security Officer of Legco became concerned about the developing disorder and sought instructions from Mr Jasper Tsang Yok-sing (“Mr Tsang”), who was the President of Legco and concurrently Chairman of the Legislative Council Commission (“LCC”). Mr Tsang testified that he regarded issues of security and order as falling within the management of the LCC of which he was Chairman; that he believed that dealing with the developing security and crowd control problems was beyond the capacity of Legco’s security personnel and that he, with the agreement of other members of the Commission, decided to seek assistance from the police who entered the lobby to stand by at his request. 7. Using bamboo poles, metal bars and the Mills barriers, wielded with considerable violence, the protesters attempted to force their way into the Legco complex by prising open or battering in the glass doors. Their actions lasted nearly half an hour. A Legco security officer was injured, sustaining fractured toes caused by a falling Mills barrier. Damage costing some $200,000 was occasioned to property at the entrances assaulted. 8. The appellant and one Wong Ho Ming (amongst others) participated in this violent behaviour. And when the police attempted to form a cordon to disperse the protesters from the front entrance, the appellant “vigorously shoved the police officers forming the line”.[2] 9. Both the appellant and Wong Ho Ming were convicted of unlawful assembly contrary to section 18(3) of the Public Order Ordinance.[3] Additionally, because of his actions against the officers forming the police cordon, the appellant was convicted[4] of obstructing an officer of the Council while in the execution of his duty contrary to section 19(b) of the LC(PP)O, the officer in question being named as Inspector of Police Kwok Chun-kit (“Inspector Kwok”). 10. LC(PP)O section 2(1) provides that the phrase “officer of the Council”: “... means the Clerk or any other officer or person acting within the precincts of the Chamber under the orders of the President and includes any police officer on duty within the precincts of the Chamber.” 11. On any day the Council or a committee is sitting (as was the case on 13 June 2014), the “precincts of the Chamber” are relevantly defined to mean, “the entire building in which the Chamber is situated and any forecourt, yard, garden, enclosure or open space adjoining or appertaining to such building and used or provided for the purposes of the Council”.[5] 12. The applications by the appellant and Wong Ho Ming for leave to appeal to this Court against their convictions for unlawful assembly were dismissed.[6] However, the appellant was granted leave to appeal against his conviction under section 19(b), the following questions of law being certified, namely: Question 1: Do police officers entering the “precincts of the Chamber” as defined in s 2 of LC(PP)O to deal with issues arising under s 8(3) LC(PP)O, require an authority given under s 8(2) or (3) LC(PP)O? Question 2: When a police officer enters the precincts of the Chamber as defined in [s 2 LC(PP)O] but without an authority under s 8(2) or (3) LC(PP)O, is that police officer “on duty within the precincts of the Chamber” and so an “officer of the Council” within the meaning of s 2 LC(PP)O? B. The appellant’s case 13. The appellant seeks to challenge his conviction on two main grounds. He contends (i) that Inspector Kwok was not an officer of the Council within the meaning of section 19(b); and (ii) that even if Inspector Kwok was such an officer, he was not acting in the execution of his duty when obstructed by the appellant. C. The first ground: Not an officer of the Council 14. While Mr Philip Dykes SC[7] introduced certain modifications in his oral submissions,[8] the appellant’s reasoning in support of the first ground as set out in his Written Case proceeds as follows: (a) A police officer is only allowed to enter and remain within the precincts of the Chamber if invited to do so by or on the authority of the President.[9] (b) Without an invitation, a police officer is not lawfully within those precincts and is therefore not an “officer of the Council”.[10] (c) Although in the present case, Mr Tsang, the President of Legco, did request police assistance, he did so in a different capacity, namely, as Chairman of the LCC, so that his invitation was ineffective to justify entry of the police officers.[11] (d) Moreover, in order to qualify the police officers as “officers of the Council”, it was necessary for Mr Tsang to issue an administrative instruction pursuant to LC(PP)O section 8[12] directing the closure of Legco on the evening of 13 June 2014 before seeking the help of the police in enforcing that instruction.[13] (e) It might have been possible for the President to invite the officers onto the premises without issuing a specific administrative instruction because of apprehended disorder, thus qualifying them as “officers of the Council”, but that did not occur and, in any event, such an invitation would not have met the requirements of the second argument discussed below.[14] 15. The appellant argues that a prior invitation was an essential requirement for lawful entry by police officers because unrestricted entry would be incompatible with the principle of the separation of powers. It would mean that the Commissioner of Police who, subject to orders of the Chief Executive, has the right of “supreme direction” of the police force under section 4 of the Police Force Ordinance (“PFO”),[15] could direct officers to enter Legco premises “when the President had not invited them, or even did not want them to enter.”[16] 16. Support for this argument is sought from Article 78 of the Basic Law (which gives members of Legco immunity from arrest when attending or on their way to a meeting of the Council) on the footing that “[this] must include a power to refuse entry to persons, including police officers, who seek entry to Legco premises to arrest a Member and the power to eject if the police officers are already inside.”[17] 17. It is argued that powers given to police officers at common law and under the PFO, as a matter of construction and for like reasons of policy, provide no basis for police officers to enter and carry out policing duties in the precincts of Legco without a prior invitation.[18] D. The first ground is untenable 18. This ground of the appellant’s challenge to his conviction cannot be accepted. There is no legal foundation for the premise that a police officer can enter the precincts of Legco only by invitation or on the authority of the President. D.1 Article 78 of the Basic Law 19. Article 78 of the Basic Law, relied on by the appellant, provides no support. It states: “Members of the Legislative Council of the Hong Kong Special Administrative Region shall not be subjected to arrest when attending or on their way to a meeting of the Council.” 20. Article 78 therefore immunises members of Legco from arrest when going about the core business of the legislature – attending meetings of the Council. It has no relevance to persons who are not members, charged with offences such as those for which the appellant was convicted. 21. Provisions with a purpose similar to that of Article 78 can be found in the LC(PP)O, including those safeguarding freedom of speech and debate in the Council;[19] immunising Legco members against civil or criminal proceedings for things said in, or reported in writing to, the Council;[20] protecting members from arrest for any criminal offence whilst attending a sitting of the Council or a committee;[21] and so forth. The object of such provisions is to ensure freedom of speech and debate essential to the legislative process. They provide no basis for suggesting that the presence of police officers in Legco’s precincts, performing their ordinary duties of preserving public order and enforcing the general criminal law,[22] is somehow inconsistent with such constitutional and statutory safeguards. 22. Far from conferring any form of protection for persons in the appellant’s position, the immunities created by Article 78 and the abovementioned LC(PP)O provisions do not restrict the criminal liability even of members of the legislature in respect of ordinary criminal offences whose enforcement has no adverse impact on the core business of Legco. This is in line with the position at common law as explained by the UK Supreme Court in R v Chaytor,[23] in connection with parliamentary privilege.[24] The enforcement of the ordinary criminal law within the precincts of Legco does not involve any infringement of the separation of powers principle. 23. Constitutional issues and questions regarding contempt of the legislature might arise if the police were to insist on entering the Legco Chamber contrary to the wishes of the President and the Council, for instance to effect certain arrests. However, no such issues arise in the present case. D.2 The LC(PP)O provisions 24. The provisions of the LC(PP)O support the proposition that police officers carrying out their ordinary duties within the precincts of Legco qualify as “officers of the Council” without the need for any prior invitation to enter the complex. 25. Thus, LC(PP)O section 2(1) defines “officer of the Council” to include “any police officer on duty within the precincts of the Chamber”. It says nothing about such officer having first to be invited to enter the premises. It provides that as long as the officer is “on duty” within those precincts, he or she qualifies as an “officer of the Council”. 26. The LC(PP)O exempts all officers of the Council from rules restricting admittance without any qualification regarding police officers. Thus, LC(PP)O section 8, while generally providing that sittings of the Council shall be open to the public,[25] stipulates that “[the] right of persons other than members or officers of the Council to enter or remain within the precincts of the Chamber shall be subject to the Rules of Procedure or any resolution of the Council limiting or prohibiting the enjoyment of such right”.[26] Thus, the right of officers of the Council to enter or remain within the precincts of the Chamber is enjoyed without being subject to such Rules or resolutions. If it had been intended that police officers should require a prior invitation by or on behalf of the President, one would have expected the exemption to be suitably qualified. 27. Similarly, LC(PP)O section 8(3) provides: “The President may from time to time, for the purpose of maintaining the security of the precincts of the Chamber, ensuring the proper behaviour and decorum of persons therein and for other administrative purposes, issue such administrative instructions as he may deem necessary or expedient for regulating the admittance of persons (other than members or officers of the Council) to, and the conduct of such persons within, the Chamber and the precincts of the Chamber.” (Italics supplied) Thus, the admittance of officers of the Council to the precincts of the Chamber is not subject to regulation by restrictive administrative instructions. Once again, there is no qualification making the admittance of police officers conditional upon a prior invitation. 28. LC(PP)O section 20, which makes it an offence to enter or attempt to enter the precincts of the Chamber in contravention of rules referred to in section 8(2) or in contravention of instructions regulating admittance under section 8(3), makes it clear that the offence does not apply to officers of the Council in general. 29. Where the President’s permission is necessary – for instance, to enter particular parts of the Legco complex – this is expressly specified in the rules. Thus, for instance, section 4(1) of the Administrative Instructions for Regulating Admittance and Conduct of Persons[27] (“the Administrative Instructions”) provides: “No person other than a Member or an officer of the Council shall enter the antechamber marked as such on the plan or any committee room without the permission of the President.” Administrative Instructions, sections 4(2), 5, 6 and 7 are to similar effect. 30. The LC(PP)O and Administrative Instructions therefore lay down a statutory scheme for regulating admittance which affirms the right of officers of the Council to enter and remain within Legco’s precincts. There is no suggestion that a prior invitation is needed in the case of police officers on duty within those precincts. Of course in practice, if police assistance is required, it is likely that a request will be made by a responsible person in Legco. It is unnecessary for this to be done by the President acting as such. There is no reason, for instance, why a security officer should be precluded from calling the police for help if needed. And entry without such an invitation does not make the presence of a police officer on duty within the precincts of Legco unlawful and does not deprive such an officer of his status as an officer of the Council for the purposes of section 19(b). D.3 The police were in any event invited to enter 31. Even if, contrary to the foregoing analysis, the appellant is correct in his submission that in order to qualify as officers of the Council, police officers like Inspector Kwok needed an invitation to enter issued by the President of Legco, the police officers concerned did in fact receive such an invitation. It was issued by Mr Tsang, who served simultaneously as President of Legco and Chairman of the LCC. 32. It cannot matter that Mr Tsang considered himself to be acting as Chairman of the LCC when requesting police assistance, since objectively and as a matter of law, he was also President of Legco when he sought police intervention. Indeed, pursuant to section 4(1)(a) of the Legislative Council Commission Ordinance,[28] Mr Tsang was ex officio Chairman of the LCC because he was President of Legco. D.4 The appellant’s modified stance 33. At the hearing, Mr Dykes SC retreated from the position taken in the Written Case that police officers may not lawfully enter Legco’s precincts at all unless invited to do so by on or behalf of the President. He submitted that police officers could lawfully enter and perform their ordinary duties in those precincts but that, unless they had been invited to do so, they would only be acting as police officers, but not as officers of the Council. He accepted that a person obstructing them in the execution of their duty in such circumstances could properly be convicted of an offence of resisting a police officer acting in the execution of his duty under PFO section 63, but not of the offence under LC(PP)O section 19(b). 34. This modified approach seriously undermines the first ground of the appellant’s appeal. Once it is accepted that no invitation is needed to enable a police officer lawfully to enter Legco’s precincts to perform his ordinary duties, it is difficult to see how one can deny that such an officer comes within the definition of an “officer of the Council” in LC(PP)O section 2(1) since he would be a “police officer on duty within the precincts of the Chamber”. Obstructing him in the execution of his duty would thus trigger liability under section 19(b). E. The second ground: Inspector Kwok was not acting in the execution of his duty 35. This argument runs as follows: (a) The appellant was convicted on the basis that he obstructed Inspector Kwok who, along with other police officers, purported to be acting in the execution of their duty by preventing the appellant and other protesters from gaining access to Legco. (b) However, there is a public right of access to the Council which can only be suspended or abrogated by a written authority such as a Legco Rule of Procedure, a Council Resolution or an administrative instruction issued by the President.[29] Thus, for instance, the President might have issued an administrative instruction under LC(PP)O section 8(3) closing Legco on the evening of 13 June 2014.[30] But he did not do so. (c) Since there was no written authority to restrict access to the Council in place, Inspector Kwok and the other officers were not acting in the execution of their duty in purporting to deny the protesters entry through the entrances to Legco.[31] 36. That argument is without merit. A lawful restriction on access to Legco was plainly in place and the police officers were assisting security staff to enforce such restriction in the execution of their duty when obstructed by the appellant. 37. As we have seen, LC(PP)O section 8(3) authorises the President from time to time, for the purpose of maintaining the security of the precincts of the Chamber, to issue such administrative instructions as he may deem necessary or expedient for regulating the admittance of persons (other than members or officers of the Council) to those precincts. Two administrative instructions issued by the President were in force on 13 June 2014 and were relevant in the circumstances then obtaining. 38. Section 11 of the Administrative Instructions provides: “Persons entering or within the precincts of the Chamber shall behave in an orderly manner and comply with any direction given by any officer of the Council for the purpose of keeping order.” 39. Legco security staff, who were officers of the Council, had blocked off the entrances to the building and refused the protesters access. The protesters, who were behaving in a disorderly manner, refused to comply with their directions to desist from removing the Mills barriers or trying to force their way into the premises. The police officers were acting in the execution of their duty (both under the PFO and as officers of the Council under LC(PP)O section 19(b)) in helping to enforce those directions, given for the purpose of keeping order pursuant to section 11 of the Administrative Instructions. 40. Secondly, section 12(3) of the Administrative Instructions authorises an officer of the Council: “... [to] refuse admission to a press or public gallery to any person ... who, in the opinion of an officer of the Council, ... may ... behave in a disorderly manner.” 41. The protesters were evidently intent on entering the Legco building to disrupt the Committee meeting in progress, possibly involving disruption from a press or public gallery. Legco’s security officers were acting lawfully pursuant to section 12(3) in refusing them admission to the complex on the footing that they were behaving, and likely to behave, in a disorderly manner. Inspector Kwok and the other officers were acting lawfully in the execution of their duty (as police officers and officers of the Council) in helping to enforce such refusal of entry. F. Conclusion 42. For the foregoing reasons I concluded that this appeal had to be dismissed. 43. My answer to Question 1 is “No” subject to the observation that entry may be to carry out the police officers’ ordinary duties, not necessarily confined to dealing with issues arising under section 8(3). My answer is “Yes” to Question 2, assuming that the officer enters the precincts of the Chamber in order to carry out his ordinary policing duties. Mr Justice Tang PJ: 44. I agree with the Reasons for Judgment of Mr Justice Ribeiro PJ. Mr Justice Fok PJ: 45. I agree with the Reasons for Judgment of Mr Justice Ribeiro PJ. Lord Hoffmann NPJ: 46. I agree with the Reasons for Judgment of Mr Justice Ribeiro PJ. Mr Philip Dykes, SC and Mr Douglas Kwok, instructed by Bond Ng Solicitors, assigned by the Director of Legal Aid, for the Appellant Mr Jonathan Man, SADPP and Mr Derek Lau, SPP of the Department of Justice, for the Respondent [1] Cap 382. [2] Magistrate’s Statement of Findings, §10. [3] Cap 245. [4] Before the Magistrate Mr Jason Wan Siu-ming, ESCC 3658/2014 (30 December 2015), upheld by Wong J, HCMA 229/2016 (25 January 2017). [5] Section 2(1) of the LC(PP)O. [6] Ma CJ, Ribeiro and Tang PJJ, FAMC 18/2017 (15 August 2017). [7] Appearing with Mr Douglas Kwok for the appellant. [8] Discussed in Section D.4 of this judgment. [9] Appellant’s written case (“AWC”) §7. [10] Ibid. [11] AWC§§10, 72 and 73. [12] Set out in Section D.2 below. [13] AWC§§69-70. [14] AWC§71. [15] Cap 232. [16] AWC§13. [17] AWC§64. [18] AWC§§11, 39-58. [19] LC(PP)O section 3. [20] LC(PP)O section 4. [21] LC(PP)O section 5. [22] PFO section 10 relevantly includes among the general duties of the police force, duties “to take lawful measures for - (a) preserving the public peace; (b) preventing and detecting crimes and offences; (c) preventing injury to life and property; (d) apprehending all persons whom it is lawful to apprehend and for whose apprehension sufficient grounds exists; (e) regulating processions and assemblies in public places or places of public resort; ... (g) preserving order in public places and places of public resort, at public meetings and in assemblies for public amusements, for which purpose any police officer on duty shall have free admission to all such places and meetings and assemblies while open to any of the public; ... (o) protecting public property from loss or injury; ...(r) executing such other duties as may by law be imposed on a police officer.” Section 10(r) preserves the common law powers and duties of police officers, for example, the power of arrest without warrant where there is a breach of the peace or reasonable apprehension of an imminent breach of the peace: HKSAR v Chow Nok Hang (2013) 16 HKCFAR 837 at §80. [23] [2011] 1 AC 684. [24] Derived from Article 9 of the Bill of Rights 1689 and the customary recognition of matters within the exclusive cognisance of Parliament. [25] LC(PP)O section 8(1). [26] LC(PP)O section 8(2) (italics supplied). [27] Cap 382A. [28] Cap 443. Section 4(1)(a): “The Commission shall consist of the following members ... the President of the Council, who shall be Chairman of the Commission”. [29] AWC§6. [30] AWC§69. [31] AWC§71 and §76(1).
Chief Justice Ma: 1. At the conclusion of submissions of leading counsel for the appellants, we dismissed the appeals of the appellants, with our Reasons to be handed down. I agree with the judgment of Mr Justice Tang PJ. 2. On 30 May 2014 the Appeal Committee granted leave to appeal to this Court on the basis it was reasonably arguable that there had been a substantial and grave injustice by reason of flagrantly incompetent advice given by the appellants’ counsel at trial. In the written case of the appellants, a number of other grounds were identified. No leave had been sought advance these other grounds nor any explanation given us to why leave was not sought or why it was justified to run them. In the end, at the hearing, counsel did not pursue the other grounds. Mr Justice Ribeiro PJ: 3. I agree with the Judgment of Mr Justice Tang PJ. Mr Justice Tang PJ: 4. Mr Chen Chu-nan (“the deceased”), a 33 year old visitor from Taiwan, was arrested on 12 August 2009 and was remanded in custody at the Lai Chi Kok Reception Centre (“the Centre”). He was found unconscious in a Protected Room[1] at 0748 hours on 16 August and certified dead at 0848 hours at the Princess Margaret Hospital. The autopsy report showed that 117 bruises were found on various parts of his body. 5. The appellants were Correctional Services Department (“CSD”) officers. On 31 August 2012, they were convicted for inflicting grievous bodily harm on the deceased on 15 August 2009 and were each sentenced to imprisonment for 16 months. 6. The prosecution case was that the injuries were inflicted at about 1100 hours in the Consultation Room on the ground floor of the Centre, whilst the deceased was in the custody of the appellants who were the only other persons in the room. The prosecution was unable to show which one or more of the appellants inflicted the grievous bodily harm and it relied on joint enterprise. The appellants did not give evidence. In the Reasons for Verdict (“the Reasons”), Deputy District Judge E Lin said: “86. There is no evidence for me to find which of the defendants was responsible for which particular injury found on the deceased. Yet since the three defendants were acting in concert both before and after the attack, I found that all the defendants are jointly liable for the infliction of the aforesaid injuries.” 7. They appealed to the Court of Appeal.[2] Their grounds of appeals included complaints about the competence of defence counsel at trial.[3] One such complaint was that counsel was flagrantly incompetent because he had failed to give adequate or correct advice on whether or not they should testify, and that he had given wrong advice because of his misunderstanding of the law relating to joint enterprise. Although the Court of Appeal was unanimous in rejecting all other grounds of appeal, they disagreed on this particular complaint, and the appeal against conviction was dismissed by a majority.[4] 8. On 30 May 2014, an appeal committee granted leave to appeal on the basis that it was reasonably arguable that there had been a substantial and grave injustice in connection with the appellants’ trial by reason of flagrantly incompetent advice given to them. 9. In the Reasons, the trial judge gave a detailed account of the movements of the deceased commencing 0930 hours on 15 August, when he was examined by Dr Wong Chi-ho (“PW7”), a doctor who was attached to the Centre. It was admitted or not disputed that, as a result of this examination, the doctor made the following remarks in the Health Screen Form: “Good past health”, “Not known drug addict”, “No alleged assault”, “No claimed allergy” and “stable”. He found the deceased’s condition stable and general health satisfactory[5]. 10. Shortly afterwards, Mr Kwong Kwok-bun (“PW2”), a CSD officer, saw the deceased at the reception office. According to PW2, the deceased was behaving strangely, so he arranged for him to be seen by the doctor again. 11. At about 1030 hours, Mr Koon Kin-yip (“PW1”), whose duty was to maintain order in the hospital corridor heard commotions and saw the deceased standing on the staircase leading to the hospital floor, where inmates were not allowed. The deceased was told to wait outside the MO’s office, where he was observed to be murmuring to himself and grinning. The deceased was told to sit outside the Treatment Room. 12. At about 1100 hours, PW1 heard So Ka-wai, the 2nd appellant (“D2”), and Leung Shing-chi, the 1st appellant (“D1”), shout at someone in Putonghua and saw the deceased running into the Consultation Room. They tried to stop the deceased. They also went inside the Consultation Room. So did Mr Tang Yuk-po, the 3rd appellant (“D3”). PW1 followed them into the room some 20-30 seconds later. According to the trial Judge: “27. In the Consultation Room PW1 saw the deceased standing next to the doctor’s desk, his upper body bent on the same, with D2 and D3 holding down each of his shoulders. From the way PW1 described it, the deceased’s head must have propped on his chin on the desk and his face was facing the computer table (see P9(22) and P2A). The deceased kept wriggling his body, shouting, “I want to go home”. D3 repeatedly told the deceased to calm down and then instructed D1 and D2 to force the deceased down onto the floor, but even then the shouting and the struggling continued. Then D3 told the deceased not to move any more or OC foam will be used. 28. At that point PW1 suddenly remembered there were some 30 inmates waiting in the corridor and that there was only one other colleague on duty, so he left the room to attend to other duties. He stated that he did not witness the use of OC foam, nor did he see anyone using the extendable truncheons. He did not remember hearing any noise coming out of the Consultation Room. 29. At about 1059 hours D3 came out and instructed PW1, who was about 4 metres away from the Treatment Room, to escort all other inmates back to their own cells before going back into the room again.” 13. Shortly before 1109 hours the deceased came out of the Consultation Room and a CCTV recording showed that at 1109 hours the deceased was in the elevator on the way to the Protected Room on the first floor. The deceased entered the Protected Room at 1118 hours. There he remained until he was found collapsed at about 0740 hours on 16 August. Whilst in the Protected Room his movements were monitored and recorded by a CCTV camera. According to the trial judge, the CCTV footage is grainy and of very low resolution. However: “45. … the deceased’s body was in full view at all times, except for the few minutes during which he covered himself with a blanket, and there were a few seconds in which one could not make out where his hands were.” 14. He was examined by Dr Wong at 1118 hours, 15 August 2009 in the Protected Room: “52. … He found red marks on the deceased’s eyes, both cheeks, anterior chest wall, which were “consistent with OC foam” … He saw no foreign substance on the deceased’s face, nor did he detect any serious injuries and swelling.” 15. At 1120 hours, a CSD officer took Polaroid photographs of the deceased. He was not wearing any upper garment. However, the photographs were so poor that it is impossible to tell if he had injuries on his body. 16. At 0340 hours, 16 August 2009, CSD officer Chiu Pak-ming (“PW4”) checked on the deceased and found him sitting on the floor. PW4 noticed that a bruise the size of a fist on the deceased’s outer thigh but did not notice if he had any bruises on his face. 17. At 0740 hours, PW4 was told that the deceased had collapsed. PW4 could not detect any heart beat[6]. By the time, Mr Ip Chi-man (“PW3”), a paramedic with the Fire Services Department, arrived, the deceased had been moved to the corridor. He noticed that there were many bruises on the deceased’s trunk and limbs. The deceased was not breathing and had no pulse. The deceased was taken to the Princess Margaret Hospital. He was examined by a doctor there at 0816 hours and certified dead at 0848 hours. 18. Dr Ng Chung-ki (“PW8”), a senior forensic pathologist of Kwai Chung Mortuary, who had prepared the autopsy report, gave evidence for the prosecution. He said the injuries found on the deceased could not have been inflicted by himself when he was in the Protected Room. Nor were they caused post-mortem or by efforts to resuscitate him. 19. He said in his report of 10 August 2011: “The sort of injuries sustained during an assault or a struggle depends on the degree and form of violence of the event. Therefore, to determine whether the injuries present are resulted from an assault or a struggle often relies on the circumstantial evidence of the event. In the present case the number and severity of the deceased’s injuries are suggestive of a violent assault. Nonetheless, just basing on the autopsy findings alone, the possibility that the injuries were sustained during a vigorous struggle could not be entirely excluded.” 20. The trial Judge noted: “64. PW8 further stated that the bruise found on the deceased’s head were not visible externally and could be caused by blunt forces. If the deceased was suffering from bleeding disorder, PW8 would expect it to be a persistent condition. Therefore he would expect to find bruises showing signs of healing, but none of which was found.” 21. The defence called Dr Beh Swan Lit, a Clinical Associate Professor at the Faculty of Medicine, University of Hong Kong. In addition to saying that the injuries could be less serious than they looked and that they could have been caused by less violence, he said, on the assumption that the deceased was suffering from a bleeding disorder, the resulting bruises would be bigger than on a person without the disorder.[7] 22. An inquest was held to determine the cause of the death of the deceased from 5 October 2012 to 20 November 2012. At the Inquest, the appellants gave evidence. The jury returned an open verdict. 23. In the Court of Appeal, Mr Grossman SC appeared for the appellants. There were several grounds of appeal. As explained above, all but one were unanimously rejected. [8] 24. The sole point[9] on which leave was given to appeal concerned counsel’s advice to the appellants on whether they should give evidence. It became clear in the course of Mr Grossman’s submissions that the real complaint was that having regard to the prosecution evidence counsel should have advised the appellants in strong terms that they or some of them must testify.[10] He submitted that unless they or one of them should do so conviction was inevitable and that counsel was flagrantly incompetent in failing to do so. 25. As Sir Thomas Eichelbaum NPJ explained, the expression “flagrant incompetence” is used to underline “an appellant’s need to show much more than a mistake, an error of judgment, or a decision to follow one course when in hindsight another would have been preferable.” Also, critically, what is decisive is the effect of the error, and whether as a result the appellant had not had or might not have had a fair trial.[11] 26. It is well known that one of the most difficult tactical decisions encountered in the conduct of a defence is whether or not the defendant should testify. Hartmann J (as he then was) explained in HKSAR v Chow Kit Kwong CACC 370/2007; unreported, 23 July 2008: “32. … Counterbalancing factors will have to be taken into account. By way of illustration, these may include an assessment of the true strength of the prosecution case after it has been tested by way of cross-examination, an assessment of the degree to which the defendant will be able to give evidence of value and, in addition, the degree to which he will be able to withstand the rigours of cross-examination. It is notorious that, in some cases, the best hope of an acquittal lies in advising a defendant in the strongest terms not to testify. No defence can be professionally managed by rote.” 27. In the Court of Appeal, both Mr Davies and the 2nd appellant gave evidence and were cross-examined.[12] The 2nd appellant’s evidence was that throughout Mr Davies was of the view that there was no need for them to give evidence. Mr Davies denied this allegation and said the question of their giving evidence was a subject of continuing discussions. 28. Mr Davies’s evidence was supported by notes of conferences made within two weeks of the conclusion of the trial from notes made at the time of such conferences and before any complaint was made of his conduct. The conference notes showed that between 8 June 2012 and 10 August 2012, Mr Davies was in conference with the appellants on eight occasions, lasting a total of 19 hours and one conference with Dr Beh[13] which took one hour. These conferences were also attended by a solicitor and a legal clerk[14]. The contents of these conference notes, showed quite clearly that the subject of the appellants testifying was discussed more than once. I quote from some of these notes: 5 July 2012:[15] “Went through defendant’s evidence with each defendant. It was noted that the defendants were at times vague and inconsistent. Discussed if advisable for defendants to testify in court.” 20 July 2012: “Discussed with defendants advantages and disadvantages of testifying in court. All defendants indicated that they would prefer not to testify. Final decision to be made by defendants later.” 8 August 2012: “Discussed with each defendant concerning giving evidence in court. Advised defendants of their rights regarding giving evidence including advantages and disadvantages. Asked Defendants to prepare for mitigation. Took full background details from defendants and asked them to provide copies of all qualifications, commendations etc obtained by them. Also obtain letters from friends colleagues and relatives.” 10 August 2012: “Further discussed with defendants regarding testifying in court. All defendants indicated that they were reluctant to testify. All defendants, however, advised to prepare to testify. Final decision would be made after the conclusion of the prosecution case.” 29. Line J rejected the evidence of the second appellant and accepted the evidence of Mr Davies that the question of their testifying was a subject of ongoing discussion. Macrae JA noted the disagreement but he had not found it necessary to resolve it.[16] Stock VP did not deal with this specifically but on the other factual dispute between the parties[17] he preferred the evidence of Mr Davies noting that he was supported by the conference notes.[18] I believe he shared Line J’s view on this part of Mr Davies’s evidence too. 30. However, as one would expect, and the conference note dated 10 August 2012 confirmed this, the final decision on whether any of the appellants should testify would only be made after the conclusion of the case for the prosecution. At the conclusion of the prosecution case, the court was told that none of them would give evidence. Mr Davies’ evidence was that he advised the appellants that it would be better if they did not testify. 31. I turn to Mr Grossman’s submission that having regard to the evidence, Mr Davies should have advised the appellants in strong terms that one or more of them should give evidence, otherwise conviction was inevitable. This submission does not depend on whether Mr Davies had misunderstood the concept of joint enterprise. Like Stock VP[19], I would first consider why counsel advised the appellants against testifying and then decide whether it was reasonable for him to give such advice. 32. What happened after the conclusion of the prosecution case[20] was dealt with in some detail by Mr Davies in his first affirmation affirmed on 9 May 2013 where he said: “14. On 21st August [2012] (sic), immediately after the trial was adjourned for lunch I held a meeting with the applicants to discuss whether they wished to testify. All applicants indicated that they would prefer not to testify. 15. At that meeting, I did advise the applicants that I believed it would be better if they did not testify and I informed the applicants of my reasons for this namely the following: (i) The poor performances of the applicants when going through their evidence in chambers; and (ii) My belief, that in order to convict, the judge would have to determine that the injuries to the victim could only have been inflicted inside the consultation room at around 11:00 am on the day of the incident. In order to make such a finding, the court had to find that Dr Wong’s [PW7] initial examination of the victim at 9:30 a.m. was reliable but his second examination at 11:20 was unreliable. Dr Ng and Dr Beh had testified that the wounds should have been visible by 11:20 a.m. Neither of the medical examinations carried out by Dr Wong had been challenged and it was my belief that no reasonable court could reach such a conclusion. 16. At about 3 p.m. that afternoon, the prosecution closed their case and I applied to court to stand down the case to confirm the applicant’s election. … Each applicant then signed a form prepared by the solicitor confirming their election not to testify.” 33. The other factual dispute adverted to in para 29 above was whether the appellants had performed poorly in a mock-examination conducted in conference. On this factual issue, Stock VP accepted counsel’s evidence that the appellants’ answers in a testing of their evidence by a mock-examination in a conference in July 2012 led him to believe that giving evidence would only harm their case.[21] 34. Stock VP concluded that counsel was faced with the difficult situation that without their evidence, the case against the appellants was very strong[22] but their evidence might make the case against them even stronger. 35. Stock VP then dealt with the argument that counsel should have advised the appellant that their only hope of an acquittal was to testify and said: “151. … since the mock cross-examination led counsel to believe that the applicants’ account would in the result condemn them, or make their case worse, it would have been entirely illogical for him to advise them that their only hope of success was in giving evidence. And I fail to see, in those circumstances, how it can reasonably be suggested that counsel’s tactically-based advice was incompetent. 152. Defence counsel frankly accepted before us that the course which he advised the applicants to take had its real risk and he told us that he advised the applicants that there was a danger in it. Yet, the alternative course, that of giving evidence was in his view, for reasons which he has explained, even more dangerous. So what was he to do? In my judgment, he was to make that kind of decision which counsel are regularly called upon to make. He made a decision - or rather, he gave that advice - with the benefit of extensive contact with the applicants and with their case.”[23] 36. Line J also accepted Mr Davies’s evidence that his advice was based on his perception that they would not better their case, which was based on his assessment of their performance in the mock cross-examination conducted in his chambers.[24] 37. With respect, I agree with Stock VP that it could not reasonably be said that counsel was incompetent. It follows that no question of flagrant incompetence can arise. 38. Macrae JA was of the view that: “119. … on the facts and in the particular circumstances of the case, … Without their evidence as to what had transpired in the consultation room in their dealings with (the deceased), their conviction was inevitable. …” 39. I begin by considering what evidence the appellants would have given. We have their witness statements. They show that they would say that the deceased had struggled violently. They had to restrain and use OC foam (twice) to subdue him. These facts were not in dispute. The critical issue was whether they or some of them had used excessive force. On that, their evidence was that none of them had used excessive force during the approximately 9 minutes they were in the Consultation Room with the deceased. In other words, if any of the injuries on the deceased could only have been caused by excessive force they had no explanation for them. In para 19 above, I have set out the extracts from Dr Ng’s report dated 10 August 2011 which was quoted by the learned Deputy District Judge at para 62 of the Reasons. The learned trial judge in para 61 cited extracts from Dr Ng’s further written opinion on the cause of bruises of 18 August 2012. Dr Ng gave oral evidence and was cross-examined. Whilst Dr Ng could not entirely exclude the possibility that the injuries were sustained during a vigorous struggle, he said: “ … the number and severity of the deceased’s injuries are suggestive of a violent assault.”[25] 40. On the basis of Dr Ng’s evidence the learned Deputy District Judge concluded that: “83. While it would be impossible to account for each of the 117 external injuries found on the deceased, I accept PW8’s (Dr Ng) postulation that at least the injuries to the scalp and thigh were caused by blunt forces.” 41. After concluding that the injuries could only have been inflicted in the Consultation Room and by the appellants, the learned Deputy District Judge said: “84. … The extent and the number of injuries were such that I am left with no doubt at all that the defendant had used unnecessary and grossly excessive force in order to subdue him. …” 42. Given the fact they were convicted because some of the injuries could only have been caused by excessive force, their evidence that they had not used excessive force would not have helped. 43. Moreover, I cannot agree that absent their testimony conviction was inevitable. I have already referred to Dr Ng’s evidence that he could not rule out the possibility that the injuries were the result of a violent struggle. There was of course the evidence of Dr Beh, the defence expert. And there was the evidence of Dr Wong[26]. There was also the argument that the conclusion that the injuries were caused by unlawful force in the Consultation Room did not represent the only inference to be drawn from the evidence[27]. These and other arguments were repeated by Mr Grossman in the Court of Appeal. These arguments failed in the Court of Appeal but given their different functions, I believe they were tenable arguments at first instance. It follows that in my opinion, there was a chance of an acquittal. It might have been a slender one but a real chance, nonetheless. 44. That being the case, like Stock VP: “I am not prepared against this background to second-guess (counsel’s decision to advise against testifying), still less to conclude that it was an incompetent decision.”[28] 45. For the above reasons, it could not be said that they did not have or might not have had a fair trial. And their appeals must be dismissed. 46. It follows it is unnecessary to go on to consider whether counsel had misunderstood the law of joint enterprise. In the Court of Appeal, Stock VP and Line J were of the view that there was no misunderstanding. Macrae JA thought otherwise. Had it been necessary to decide this point, it would be necessary to probe deeper into the law of joint enterprise, the leading authority on which is Sze Kwan Lung and Others v HKSAR (2004) 7 HKCFAR 475. At trial, Ms Lau, prosecuting, in her oral submission, referred to and relied on Robinson v R (2011) UKPC 3, in support of her alternative case that some of the appellants could be guilty as accessory. Robinson, an appeal to the Privy Council from Bermuda is authority that although aiding imports a positive act of assistance, being present and communicating to the person committing the offence that one was ready and willing to help may be a sufficient positive act of assistance. Mr Davies responded to the submission on Robinson and some of the passages highlighted by Macrae JA[29] might have been directed to the prosecution’s case on Robinson. It is not necessary for the disposal of this appeal to go into this further and I will not do so. 47. For the above reasons, the appeals were dismissed. Mr Justice Fok PJ: 48. I agree with the Judgment of Mr Justice Tang PJ. Lord Hoffmann NPJ: 49. I agree with the Judgment of Mr Justice Tang PJ. Mr Clive Grossman SC, Mr Osmond Lam and Ms Emerald Shek, instructed by Leung & Lau, for the 1st, 2nd and 3rd appellants. Mr Nicholas Cooney, SC, on fiat of the Department of Justice and Mr William Tam, DDPP and Ms Virginia Lau, ADPP, of the Department, for the respondent. [1] With padded walls and used to confine refractory or violent inmates. [2] Stock VP, Macrae JA, and Line J. Judgment handed down on 15 January 2014 (“the Judgment”). [3] Mr Oliver Davies. [4] Macrae JA dissenting. The appeal against sentence was dismissed unanimously. [5] Para 51 Reasons. [6] Para 47 Reasons. [7] Para 72 Reasons. The bleeding disorder was a possible consequence of alcoholism. [8] Para 7 above. There was also an application for leave to adduce fresh evidence which included the appellants’ evidence at the inquest. The application was rejected and the appeal committee refused leave to appeal. [9] Other points were raised in the printed case, however, they were rightly not pursued because leave to appeal had not been given in respect of them. [10] R v Clinton [1993] 1 WLR 1181 was a case where it was held that counsel should have advised the appellant in the strongest possible terms to give evidence. [11] Chong Ching Yuen v HKSAR (2004) 7 HKCFAR 126, at 143-4. Chan Fat Chu v HRSAR (2009) 12 HKCFAR 775, 781F. [12] They had also each made two affidavits/affirmations. [13] The conference with Dr Beh took place on 21 July. At a subsequent conference with the appellants on 27 July to discuss Dr Beh’s report, it was recorded “Agreed report favourable to the defendants.” [14] The solicitors produced virtually identical notes, presumably based on counsel’s notes. The solicitors’ notes also showed the duration of each conference. [15] This was the fourth conference and lasted 3 hours. The first three had taken a total of 8 hours. [16] Judgment para 97. [17] Para 33 below. [18] Judgment para 136. [19] Judgment para 130. [20] The trial commenced on 13 August 2012 and the prosecution case ended at about 3 pm on 21 August 2012. [21] Judgment paras 133 and 136, where, with respect, Stock VP carefully and convincingly explained why he accepted counsel’s evidence. [22] Indeed, the fact that the appellants were faced with a strong case was clearly recognized. Long before it was decided that they should not give evidence, they were advised in the conference on 8 August 2012 to prepare for mitigation. [23] Line J was also of the view that as counsel considered that “more harm than good would come of calling any applicant and that he had points to make to create a doubt.” “23. … his conduct could never be characterised as flagrantly incompetent in this regard.” [24] Judgment paras 19-20. [25] Report date 10 August 2011. [26] See para 15(ii) of Mr Davies’s first affirmation quoted in para 32 above. [27] Judgment para 141. [28] Judgment para 153. [29] Judgment paras 102-107.
Chief Justice Cheung: 1. I agree with the judgment of Lord Sumption NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Lord Sumption NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Lord Sumption NPJ. Mr Justice Lam PJ: 4. I agree with the judgment of Lord Sumption NPJ. Lord Sumption NPJ: Introduction 5. This is a dispute about limitation. In reality however, it is about one of the oldest and most litigated questions in commercial law, namely the rights of a corporate customer against a banker who has paid money out of its account on the dishonest instructions of an authorised signatory. 6. The Appellant, whom I shall call Tugu, was at the relevant time the captive insurer of PN Pertamina, an Indonesian state-owned oil and gas company. In December 1990, three officers of Tugu opened a current account in Tugu’s name in Hong Kong with Citicorp Investment Services Ltd, a subsidiary of the Respondent, Citibank N.A., whom I shall call the Bank. They were Mr Sonni Dwi Harsono, the President Director of Tugu with general powers to bind the company under its articles of association, Mr Rizaludin Sunjaya, the company’s Finance Director, and Mr Mohamad Hasan, a member of its Board of Commissioners. It is common ground that they had authority to open the account and to agree the terms of the mandate. In April 1994, as a result of a corporate reorganisation of the Citibank group, the account was transferred to the Bank’s Hong Kong branch, where it remained throughout the relevant period. 7. The bank mandate provided that any two of the three officers who had opened the account were authorised to give instructions relating to it. The account-opening documentation directed that all documents and correspondence should be sent not to Tugu but to a “Hold All Mail” box number at the Bank’s branch in Jakarta. Between 23 June 1994 and 30 July 1998, substantial sums were received into the account from various operating subsidiaries of Tugu. They generally remained there for fairly brief periods before being paid out to one or more of Mr Hasan, Mr Harsono, Mr Sunjaya and a fourth officer called Anton Ponto. A total of 26 transfers worth US$51.64 million altogether were paid out this way, all of which were purportedly authorised by payment instructions signed by Mr Harsono and Mr Sunjaya. The Judge found that the sole purpose for which the account was used was to serve as a “temporary repository of funds” en route from the operating subsidiaries into the pockets of the four individuals. Apart from occasional transfers to short-term interest-bearing time deposits, there were no other significant transactions. The final payment instruction, dated 16 July 1998, directed the Bank to “transfer all funds in the account” to a Citibank account in Jakarta in the name of Mr Harsono and Mr Sunjaya and then to “close the account after the balance is nil”. The Bank duly executed the transfer and on 30 July 1998 purported to close the account. 8. On 6 October 2006, Tugu wrote to the Bank alleging that all 26 transfers had been dishonestly authorised and demanding payment of their aggregate value. On 2 February 2007 these proceedings were begun in furtherance of that demand. The basis of the claim was that the Bank ought to have known that the transfers were out of the ordinary course of business and were not for its benefit but for that of the transferees personally. As such, they could not have been within their authority, either actual or ostensible. It was alleged that the instruction of 16 July 1998 to close the account was also unauthorised. Tugu claimed that the debit entries resulting from the unauthorised transfer instructions and the unauthorised closure instruction of 16 July 1998 were of no effect, and that accordingly the account remained in existence and fell to be “reconstituted” by reversing the disputed debit entries. This was accordingly a claim in debt. Further or alternatively, Tugu claimed the same amount as damages for breach of a duty of care owed in contract and/or tort not to give effect to the payment instructions in circumstances where the Bank knew of facts which would lead a reasonable and honest banker to consider that “there was a serious or real possibility that [Tugu] might be being defrauded… by the giving of that payment instruction.” There was an alternative plea that the Bank was reckless and turned a blind eye to the improper character of the transactions by acting on the instructions without making inquiries or informing at least one of Tugu’s independent directors. 9. On the face of it, the payment of such large sums from a corporate account to its signatories and officers personally is unlikely to have been for the benefit of the company. The Judge, Anthony Chan J, found that all 26 transfers were fraudulent on the part of the signatories, and this is no longer disputed. He acquitted the Bank of dishonesty, recklessness or wilful breach of duty. But he held that a reasonable and prudent banker would have been put on inquiry by the time of the third transfer, when a pattern had emerged indicating the improper character of the way that the account was being operated. The Judge believed it to be common ground that the Bank made no inquiries. He held that this was a breach of the Bank’s duty. It followed that Tugu was entitled to have the account reconstituted by reversing all but the first two debits. However, he went on to hold that for limitation purposes, Tugu’s cause of action arose upon the purported closure of the account on 30 July 1998, because the closure instruction was authorised. The contractual relationship of banker and customer therefore terminated at that point notwithstanding the absence of a demand until 2006. It followed, on this view, that the claim was statute-barred by the time that these proceedings were commenced. 10. The Court of Appeal dismissed the appeal. The leading judgment was delivered by Kwan VP, with whom Barma JA and Au JA agreed. The conclusions of the Court of Appeal for the most part mirrored those of the Judge. They upheld his finding that the Bank had been put on inquiry from the time of the third payment instruction. They found that, contrary to the Judge’s belief, it had not been common ground that no inquiries had been made, but that in fact the necessary inquiries were not made. This was because the only record of any such inquiries suggested that the Bank had contacted the signatories only. They should, in the Court of Appeal’s view, have contacted directors independent of the operators and beneficiaries of the fraud. However, the Court of Appeal went on to uphold the Judge’s conclusion that the action was statute-barred, on slightly different grounds. They held that the closure of the account was unauthorised and repudiatory but that it was nevertheless effective to bring the relationship of banker and customer to an end and operated as a waiver of the need for a demand. It was irrelevant that the repudiation was not accepted by the customer. It followed that the cause of action for the wrongful payments accrued in 1998. 11. In both courts below, the Bank advanced a case of contributory negligence. It did not arise because both courts held that the claim failed in its entirety for limitation. Both courts, however, considered the issue and held that but for limitation, contributory negligence would have lain. The Judge assessed the contribution of Tugu’s fault at 50 per cent, and the Court of Appeal upheld him on that point. The issues on the appeal 12. Leave to appeal was granted by the Court of Appeal, limited to two issues, which they formulated as follows: “(1) In the context of a contract between banker and customer (debtor/creditor), if the banker invalidly terminates the contract, thereby evincing an intention no longer to be bound by the banker/customer relationship, whether the invalid termination (unless and until accepted by the customer as bringing the contract to an end) is of any relevance in identifying (for the purposes of the Limitation Ordinance) the date of accrual of the customer’s cause of action to recover back the amount which ought to be standing to his credit in his account, or any cause of action for damages for breach of the banker’s Quincecare duty. (2) Whether a customer’s claim to recover the balance which ought to be standing to his credit in his account with the banker, which account has been emptied by unauthorised payments, ought properly to sound in debt (to which contributory negligence is not a defence).” The first issue begs a number of questions relating to the signatories’ ostensible authority and the nature of the Bank’s duties. In practice the parties’ submissions ranged more widely to cover them. I think that they were right to do so, and that this court should decide these questions rather than resolve the appeal on what may be a false legal premise. I propose therefore to rephrase the first issue in more general terms, as follows: does a cause of action for sums debited without authority to the account arise upon the closure of the account, without the need for a demand? Authority 13. There are two juridical sources for a bank’s duties in making payments out of an account. The first goes without saying. A banker’s duty is to make such payments only with the authority of the customer. In principle, that means in accordance with the customer’s mandate. But the duty to pay in accordance with the mandate is not absolute. A mandatory acts as an agent of the company with authority to act in its interest. Mr Harsono and Mr Sunjaya could not have had any actual authority, as between themselves and Tugu, to direct the payment of the company’s funds to themselves and their colleagues personally. It is, however, well established that a bank (like any third party dealing with an agent) may be able to rely on the agent’s apparent (or ostensible) authority by virtue of his position as a signatory and/or officer of the company, which will bind the company as regards a third party who has no notice of the want of actual authority. The second juridical source is a bank’s duty as the customer’s agent. “The relation between a banker and customer is the ordinary relation of debtor and creditor, with a superadded obligation arising out of the custom of bankers to honour the customer’s drafts”: Foley v Hill (1848) 2 HLC 28. In transferring funds to another party (usually by cheque or draft, in the older cases), a banker acts as the customer’s agent. This is the “superadded obligation”. In performing it, he owes all the ordinary duties of an agent including the duty to exercise reasonable skill and care: Selangor United Rubber Estates Ltd v Cradock (No. 3) [1968] 1 WLR 1555, at p. 1608; Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363, at p. 375. That duty sounds in both contract and tort. 14. The existence of two juridically distinct sources for a bank’s duty has tempted practitioners to engage in ingenious arguments based on the differences between them. There are differences, which may affect, for example, remedies, limitation and contributory negligence. But the standard of duty is the same under either head, because the duty of care is a duty in the performance of the mandate. As Ungoed-Thomas J observed in Selangor, at p. 1609: “[a]s between the company and the bank, the mandate, in my view, operates within the normal contractual relationships of customer and banker and does not exclude them. These relationships include the normal obligation of using reasonable skill and care… So the duty of skill and care applies to interpreting, ascertaining and acting in accordance with the instructions of a customer.” The law cannot coherently treat compliance with an authorised instruction as a breach of duty; or treat a transfer made in breach of duty as authorised. 15. The Bank has not challenged before us the finding of both courts below that by the time of the third payment instruction the Bank knew enough to prevent it from relying on the ostensible authority of the signatories to direct the transfers. The Bank’s case on authority is directed to the closure instruction given on 16 July 1998. They say (i) that although the payments out of the account were unauthorised, its closure in 1998 was authorised and effectually put an end to the relationship of banker and customer; (ii) that the debt became immediately payable without demand upon that relationship coming to an end; (iii) that once the relationship of banker and customer was at an end, the right to claim the balance of the account as a debt was extinguished, and replaced by a right to claim damages for breach of contract accruing not later than 1998; and (iv) that either or both of points (ii) and (iii) meant that the cause of action accrued more than six years before this action was brought. 16. The critical question, whether one looks at a bank’s duty of care or at the law relating to ostensible authority, is what constitutes sufficient notice of a want of actual authority, so as to require a bank to make inquiries before paying out in accordance with its mandate. The basic rule is stated in Bowstead & Reynolds on Agency, 22nd ed. (2021), at article 73: “No act done by an agent in excess of actual authority is binding on the principal with respect to persons having notice that in doing the act the agent may be exceeding the agent’s authority.” The editors comment, at para. 8-048, as follows: “The problem is to know what constitutes notice, and when there is a duty to inquire. It is often said that neither constructive nor presumed notice apply in commercial transactions. This certainly excludes the full doctrine of constructive notice of equitable interests in land, whereby a person is expected to take the initiative and make inquiries, being deemed to have notice of property interests which would have come to that person’s knowledge if such inquiries and inspections had been made as ought reasonably to have been made. But there can be no doubt that in many situations where it is relevant to know whether one person has knowledge of facts, including those raising the doctrine of apparent authority, the court may infer from the circumstances that the person concerned must have known of the facts in question or at least ought to have been suspicious to the extent that further inquiries would have been appropriate in the context. It seems that the proper approach in commercial cases is to apply the objective interpretation which one person is entitled to put on another’s words and conduct in the light of the facts known to the former. … Many things might be sufficient to put an outsider on inquiry as to an agent’s authority. The third party’s knowledge that the agent has a substantial conflict of interest in respect of the transaction is one of the more common examples, but a plain lack of benefit for the principal or commercial purpose on the face of the transaction, and unusual aspects of the transaction are another.” This statement of principle reflects long-standing authority. Both the general proposition and the editors’ comments in similar terms in the previous edition were endorsed by the Privy Council, after reviewing the authorities, in East Asia Co Ltd v PT Satria Tirtatama Energindo [2020] 2 All ER 294, at [70]-[94]. 17. The phrase “on inquiry” is traditional, but it is apt to mislead unless one appreciates what it involves in a commercial context. It is not the same as constructive notice. There is no general obligation spontaneously to inquire into an agent’s authority and no rule that fixes the third party with notice of what might be discovered upon such an inquiry. The starting point is what is actually known to the third party without inquiry (or would actually be known to him if he appreciated the meaning of the information in his hands). The question is whether the information which he actually has calls for inquiry. If, even without inquiry, the transaction is not apparently improper, then there is no justification for requiring the third party to make inquiries. But if there are features of the transaction apparent to a bank that indicate wrongdoing unless there is some special explanation, then an explanation must be sought before it can be assumed that all is well. In other words, if a bank actually knows of facts which to their face indicate a want of actual authority, it is not entitled to proceed regardless without inquiry. 18. The leading authority for this proposition is the classic statement of a bank’s duty of skill and care in executing his customer’s instructions by Steyn J in Quincecare, at p. 376: “Given that the bank owes a legal duty to exercise reasonable care in and about executing a customer's order to transfer money, it is nevertheless a duty which must generally speaking be subordinate to the bank's other conflicting contractual duties. Ex hypothesi one is considering a case where the bank received a valid and proper order which it is prima facie bound to execute promptly on pain of incurring liability for consequential loss to the customer. How are these conflicting duties to be reconciled in a case where the customer suffers loss because it is subsequently established that the order to transfer money was an act of misappropriation of money by the director or officer? If the bank executes the order knowing it to be dishonestly given, shutting its eyes to the obvious fact of the dishonesty, or acting recklessly in failing to make such inquiries as an honest and reasonable man would make, no problem arises: the bank will plainly be liable. But in real life such a stark situation seldom arises. The critical question is: what lesser state of knowledge on the part of the bank will oblige the bank to make inquiries as to the legitimacy of the order? In judging where the line is to be drawn there are countervailing policy considerations. The law should not impose too burdensome an obligation on bankers, which hampers the effective transacting of banking business unnecessarily. On the other hand, the law should guard against the facilitation of fraud, and exact a reasonable standard of care in order to combat fraud and to protect bank customers and innocent third parties. To hold that a bank is only liable when it has displayed a lack of probity would be much too restrictive an approach. On the other hand, to impose liability whenever speculation might suggest dishonesty would impose wholly impractical standards on bankers. In my judgment the sensible compromise, which strikes a fair balance between competing considerations, is simply to say that a banker must refrain from executing an order if and for as long as the banker is 'put on inquiry' in the sense that he has reasonable grounds (although not necessarily proof) for believing that the order is an attempt to misappropriate the funds of the company… And, the external standard of the likely perception of an ordinary prudent banker is the governing one” (emphasis added). 19. In Lipkin Gorman v Karpnale Ltd [1989] 1 WLR 1340, the Court of Appeal applied the same test for determining the circumstances in which a bank is put on inquiry. May LJ, at p. 1356, accepted a submission of counsel that the duty to inquire “could only arise when the transaction on its face was dishonest, but could have an honest explanation if appropriate inquiry was made”. Endorsing the observations of Steyn J on this point, he went on to say: “Having in mind the vast numbers of cheques which are presented for payment every day in this country, whether over a bank counter or through the clearing bank, it is, in my opinion, only when the circumstances are such that any reasonable cashier would hesitate to pay a cheque at once and refer it to his or her superior, and when any reasonable superior would hesitate to authorise payment without inquiry, that a cheque should not be paid immediately on presentation and such inquiry made. Further, it would, I think, be only in rare circumstances, and only when any reasonable bank manager would do the same, that a manager should instruct his staff to refer all or some of his customers' cheques to him before they are paid.” In Singularis Holdings Ltd (in liquidation) v Daiwa Capital Markets Europe Ltd [2020] AC 1189, at [1], Baroness Hale, also endorsing Steyn J’s remarks, said that a bank: “should refrain from executing an order if and for so long as it was put on inquiry by having reasonable grounds for believing that the order was an attempt to misappropriate funds”. 20. A certain amount of confusion has arisen from the fact that in East Asia, at [83]-[92], the Privy Council, following the editors of Bowstead & Reynolds, considered that the “orthodox view” had been challenged by this court in Thanakharn Kasikorn Thai Chamkat (Mahachon) v Akai Holdings Ltd (No. 2) (2010) 13 HKCFAR 479, where the leading judgment was given by Lord Neuberger NPJ, with whom the rest of the court agreed. The Privy Council, at [75], stated the test as being whether the third party could “reasonably” rely on the apparent authority of the agent given what it knew. The challenge was said to consist in Lord Neuberger’s preference for the word “irrationality”. I respectfully suggest that the supposed conflict stems from a misunderstanding of the reasoning in Akai Holdings. Although the two judgments offer different analyses of some of the authorities, there is in my view no difference between the law stated by this court in Akai Holdings and by the Privy Council in East Asia. It is necessary to distinguish between (i) the general principle governing ostensible authority and a bank’s duty of care, and (ii) its application to a particular case. The orthodox view has always been that what a third party is entitled to rely on may differ according to the commercial context and the exigencies of business. The facts in Akai Holdings were that the bank had lent a large sum to company S, over which a Mr Ting had management control. Company S defaulted on the loan. Mr Ting purportedly authorised what was called the “Switch Transaction”, by which liability for the loan was transferred to an unrelated company, C, of which he was the executive chairman. It was conceded that the transaction was beyond Mr Ting’s actual authority. No one doubted that if the bank was dishonest, or if (which amounted to the same thing) it was reckless or turned a blind eye to the apparent impropriety of the transaction, it could not rely on Mr Ting’s ostensible authority. But both courts below had rejected the allegation against the bank’s integrity and this court declined to interfere with their concurrent findings on that point. The question was therefore what lesser degree of knowledge would suffice to defeat ostensible authority. The alternatives were “irrationality” and “unreasonableness”. Lord Neuberger preferred to call it a test of irrationality, although he regarded both as objective tests and doubted whether there would in practice be much difference between them: see [50]. It is, however, clear that his analysis was not intended to qualify the general principle, as expressed in the “orthodox view”. It was directed only to its application in a commercial context such as banking. In his view a test of irrationality better reflected the exigencies of business which would normally be decisive in a commercial transaction. The bank’s belief in Mr Ting’s ostensible authority was “irrational” because the Switch Transaction on its face involved the gratuitous assumption by company C of a large liability to its obvious disadvantage, but to the advantage of company S and the bank itself. Some variant of this situation is normally the factual background when a bank is held to have no authority to act on an authorised signatory’s direction. To say that it must be “irrational” and not just “unreasonable” to proceed without inquiry simply served to emphasise that inquiry was not called for by a general duty to inquire into the customer’s transactions. It was necessitated by remarkable facts actually known to the bank which, unless explained, pointed to impropriety on the part of the agent. The bank must be shown to have proceeded with the transfer notwithstanding that without further inquiry it had no reason to regard it as a proper use of the signatory’s authority under the mandate. 21. Turning to the facts of the present case, the closure instruction differed in two respects from the transfer instructions. First, it was not an instruction which the Bank purported to execute as Tugu’s agent. It was a principal to principal transaction whose validity was a pure question of authority. Secondly, if one ignores the 26 unauthorised transfers, the closure of the account was not in itself detrimental to the customer. However, in my judgment the closure instruction was no more within the apparent authority of Mr Harsono and Mr Sunjaya than the payment instructions, because the transfers cannot be separated from the closure in the neat fashion proposed by the Bank. The Judge found that the account had been improperly used throughout as a “temporary repository of funds” en route to the pockets of the officers. That much was apparent from the pattern which had emerged by the time of the third transfer. It was therefore open to the Court of Appeal to find that on the face of the information in the Bank’s hands by 1998 the whole operation of the account was unauthorised, including its closure when it had served its purpose. But there is also a more fundamental reason. As I shall explain below, the impropriety of the transfers meant that the account could not properly be closed without an accounting exercise to restore the balance to what it should have been. 22. There was some documentary evidence that the Bank discussed the commercial rationale for the closure with the signatories, but the Court of Appeal was in my view entitled to take the view that these exchanges were an inadequate response to the problem apparent from the way that the account had been used. The discussion with the signatories does not appear to have related to the propriety of using the account as a conduit for payments to the four beneficiaries personally, and it was made with those involved in the fraud. In the circumstances, they were not persons who could be expected to give an answer in the interest of Tugu rather than themselves. Limitation 23. It is well settled that a customer has no proprietary interest in funds deposited with a banker. The obligation of a banker is to pay to or to the order of the customer on the latter’s demand. It follows that a cause of action in debt arises when that demand is made, and not before: N. Joachimson (a firm) v Swiss Bank Corporation [1921] 3 KB 110, at p. 115. This means that the running of time for limitation purposes may be indefinitely deferred by the customer, and that an account may be dormant without activity for many years without affecting the customer’s right eventually to demand the balance. No doubt, as Atkin LJ observed in Joachimson, at p. 131, this may be inconvenient to banks, but it is a fundamental incident of their business. 24. In theory, a cause of action may arise for breach of a bank’s duty of care in the making of transfers independently of any demand. The customer could, for example, sue for a declaration without a demand for payment. But the coexistence of a right of action for breach of contract makes no practical difference to the financial position. If a bank has debited an account without authority, damages will be nominal because an unauthorised debit is a nullity. The customer is entitled to disregard it and require the account to be reconstituted as it should have been. In that case, what is reconstituted is simply the bank’s records. It is not the bank’s liability, which has always been for the balance undiminished by the unauthorised debits. The customer’s only effective financial remedy is accordingly in debt for the reconstituted balance of the account, and that debt is likewise payable on demand: Limpgrange Limited v Bank of Credit and Commerce International SA [1986] FLR 36, at p. 47-48; National Bank of Commerce v National Westminster Bank [1990] 2 Lloyd’s Rep. 514, at p. 517; Crantrave Ltd (in liquidation) v Lloyds Bank plc [2000] QB 917, at p. 925, per May LJ; Sagicor Bank Jamaica Ltd v YP Seaton [2022] UKPC 48, at [19]-[21]. 25. The Bank has sought on this appeal to present Tugu’s claim as a claim for damages for breach of duty. It has characterised the claim for the debt as a “fiction”. This is tactically understandable, since a claim for damages for breach of duty would be statute-barred, as Mr Sussex SC for Tugu concedes. But I do not accept the Bank’s characterisation of the available claims. There is nothing artificial or fictional about Tugu’s claim for a debt corresponding to the reconstituted balance of the account. It is Tugu’s primary claim and the only one which has ever been capable of yielding a financial remedy. 26. The Bank’s argument is that this case is different because the relationship of banker and customer came to an end when the account was closed in 1998. No demand pursuant to that relationship, it argues, could thereafter be made. So the reconstituted balance became payable upon closure or not at all. This submission is based on dicta of Atkin LJ in Joachimson, at p. 132, and Wynn-Parry J in Re Russian Commercial and Industrial Bank [1955] 1 Ch. 148, at pp. 156-157. Atkin LJ’s dictum was to the effect that the necessity of a demand would “no doubt” be waived if the relationship of banker and customer was terminated by the bank’s repudiation. Re Russian Commercial and Industrial Bank was a claim to prove in the winding up in England of a Russian Bank which had been dissolved in Russia before any demand had been made. Wynn-Parry J held that for the purpose of distribution of the assets in a winding up, the dissolution had to be ignored. But, building on the dictum of Atkin LJ, he observed that, apart from the winding up rules, the debt would contractually have become payable on dissolution. This was because the necessity for a demand was an incident of the banking relationship which subsisted “only so long as it lasts”. The relationship could not subsist once the legal personality of the bank had been extinguished. These statements are authority for the proposition that a balance on a bank account is payable by the bank on the termination of the banking relationship with or without a demand. That principle, however, has no application to the present case because the closure of the account did not discharge the debt represented by the reconstituted balance, and for as long as that debt remained outstanding the relationship of banker and customer subsisted. There are two reasons. 27. First, the closure was, as the Court of Appeal held, unauthorised. For that reason, it was no doubt a repudiation of the banking relationship. Tugu did not accept the repudiation as bringing the contract to an end, but the Bank argues that this is one of those exceptional cases where the repudiation brings the contract to an end unilaterally, because the innocent party “has no legitimate interest, financial or otherwise, in performing the contract rather than claiming damages”: see White and Carter (Councils) v McGregor [1962] AC 413, at p. 431. The exceptional cases are cases like White and Carter itself or MSC Mediterranean Shipping Co SA v Cottonex Anstalt [2016] 2 Lloyd’s Rep 494 in which the innocent party is artificially increasing the contract-breaker’s liabilities by insisting on the pointless continuance of the contract. In this case, on the other hand, the natural remedy is inherent in the nature of the contract. It is payment of the undischarged subsisting debt which was originally created when deposits were credited to the account. Because the unauthorised debits were nullities, the balance on the account was unaffected by them in law and was never discharged. Therefore damages could not be a reasonable alternative, because no loss has been suffered which could give rise to them. In those circumstances, the continuance of the contract was not pointless. It entitled Tugu to claim the undiminished balance on demand without limit of time. There is no obvious reason why it should be deprived of that right for the benefit of the Bank and limited to its provable loss, on account of the latter’s wrongful conduct. 28. The second reason applies whether the account was closed with the customer’s authority or not. A banking contract may be terminated by a bank at any time on notice. But there is no principle of law which entitles a bank unilaterally to abrogate its outstanding liabilities or to discharge a debt without paying it. To effectually terminate the relationship, it must pay (or at least tender) the outstanding reconstituted balance. The Bank has not done that. In response to the “drain and close” instruction of 16 July 1998, it simply made a final unauthorised transfer to the fraudulent officers. It should have done nothing without a properly authorised instruction, and then (subject to that instruction) paid the full credit balance undiminished by the prior unauthorised transfers out of the account. The reconstituted debt was created by the successive deposits to the credit of the account while the contract was on any view subsisting. On the footing that the debt has not been discharged, it must still exist on the terms on which those deposits were made. It follows that the debt, undiminished by the unauthorised withdrawals, still subsisted in 2006 when it was demanded, and time did not begin to run for limitation purposes until then. These proceedings having been begun in the following year are not statute-barred. Contributory negligence 29. On the footing that the claim is not statute-barred, the question arises whether it can be abated on account of Tugu’s contributory negligence. Section 21 of the Law Amendment and Reform (Consolidation) Ordinance (Cap. 23) provides: “(1) Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage. … (10) … ‘fault’ means negligence, breach of statutory duty or other act or omission which gives rise to a liability in tort or would, apart from this section, give rise to the defence of contributory negligence.” 30. In Forsikringsaktieselskapet Vesta v Butcher [1986] 2 All ER 488, at p. 508, Hobhouse J, construing the identical provisions of the English Law Reform (Contributory Negligence) Act 1945, distinguished three categories of claim for damages for breach of contract: “(1) Where the defendant’s liability arises from some contractual provision which does not depend on negligence on the part of the defendant. (2) Where the defendant’s liability arises from a contractual obligation which is expressed in terms of taking care (or its equivalent) but does not correspond to a common law duty to take care which would exist in the given case independently of contract. (3) Where the defendant’s liability in contract is the same as his liability in the tort of negligence independently of the existence of any contract.” He held that contributory negligence lay in category (3). 31. A case of contributory negligence could no doubt be advanced as a partial defence to a claim by Tugu for damages for breach of the Bank’s duty of care in the making of payments to third parties. That would be a category (3) case. But the claim on which Tugu is entitled to succeed is a claim in debt. A claim in debt is not a claim in respect of “damage” for the purpose of section 21(1) of the Ordinance. Moreover, even if it were, it would be a category (1) case, since a liability for a debt is absolute and not dependent on proof of negligence. The Bank’s case is that it is to be regarded as a claim based on negligence since the debt arises only because of the Bank’s failure to make the inquiries that a reasonable and prudent banker would have made. This appears to me to be unarguable. In the first place, it does not make a claim for a debt into a claim for “damage”. Secondly, in claiming the debt Tugu is not claiming any relief on account of the “fault” of the Bank in failing to make relevant inquiries. The debt arises from the deposits made into the account from Tugu’s operating subsidiaries. The Bank’s failure to make relevant inquiries is merely the reason why the debt was never effectually discharged. Disposal 32. It follows that the appeal must be allowed and that Tugu is entitled to judgment for the aggregate amount of the unauthorised debits apart from the first two. 33. Interest is claimed from the date of demand, i.e. 6 October 2006. Mr Jat SC, for the Bank, tentatively suggested at the end of his argument that in the exercise of the court’s discretion interest should not be awarded for the whole of that period because of Tugu’s delays in investigating the operation of the account and bringing this claim. But since the Bank has had the use of the money throughout and there was no relevant delay after 6 October 2006, that suggestion falls away. Interest should be awarded at prime plus 1 per cent from that date. 34. The parties are invited to agree the exact figure for which judgment should be given. Chief Justice Cheung: 35. Accordingly, the court unanimously allows the appeal and orders that judgment be entered for the Appellant for the aggregate amount of the unauthorised debits apart from the first two, the exact figure of which is to be agreed by the parties with liberty to apply, together with interest thereon at the prime rate plus 1% from 6 October 2006 until judgment and thereafter at the judgment rate. The court also orders, on a nisi basis, that the costs of the action, the appeal before the Court of Appeal and the appeal before this court be paid by the Respondent to the Appellant, to be taxed if not agreed, with a certificate for two counsel. The court further directs that the costs order nisi shall become absolute if no application is made for variation within 14 days from the date hereof; any such application shall be dealt with on paper in accordance with the directions that the Registrar will give in such event. Mr Charles Sussex SC and Mr Tom Ng, instructed by Holman Fenwick Willan, for the Appellant (Plaintiff) Mr Jat Sew-tong SC and Mr John Hui, instructed by Clifford Chance, for the Respondent (Defendant)
Chief Justice Ma: 1. For the reasons contained in the Judgment of Mr Justice Ribeiro PJ, this appeal must be allowed. The Government’s policy, which came into effect on 1 January 2004 requiring all recipients of Comprehensive Social Security Assistance (CSSA) to have been a Hong Kong resident for at least seven years, is not constitutional. Mr Justice Ribeiro PJ: 2. In this appeal, it falls to the Court to consider the scope and effect of the right to social welfare conferred upon Hong Kong residents by Article 36 of the Basic Law. It arises in the context of the applicant’s claim for benefits under the Comprehensive Social Security Assistance (“CSSA”) Scheme. A. The appellant’s circumstances 3. The appellant (“Madam Kong”) is a native of Guangdong. She had previously been married but divorced her first husband in 1983. There were two sons of that marriage and they reside on the Mainland. In 2001, she met Mr Chan Wing, a Hong Kong permanent resident, and married him in October 2003, having visited him in Hong Kong on a two-way permit on several occasions. Mr Chan was not a man of means. His health was not good and he had been a recipient of social welfare since 1985. 4. Madam Kong worked on the Mainland as a home helper for the elderly until 2005. She was unable thereafter to find work and, when granted a one-way permit (“OWP”) by the Chinese authorities on 30 November 2005, she decided to come to settle in Hong Kong with her husband. She arrived here on 21 December 2005, then aged 56, and was granted permission to remain for seven years. She thereupon became a non-permanent resident of Hong Kong within the meaning of Article 24 of the Basic Law.[1] 5. Sadly, her husband (who was aged 76) died on 22 December 2005, the day after she arrived in Hong Kong. In consequence, she found herself homeless, since the Housing Authority immediately repossessed her late husband’s public housing unit. She was without family or friends in Hong Kong and was admitted to a shelter for street sleepers. 6. On 20 March 2006, Madam Kong applied for CSSA but was unsuccessful. Her application was refused because the Government’s policy has, since 1 January 2004, been that persons who have resided in Hong Kong for less than seven years do not qualify for CSSA, save where, in exceptional circumstances, the Director of Social Welfare (“the Director”) waives that residence requirement as a matter of discretion. The policy was aimed at Mainland immigrants. Madam Kong’s case was not considered appropriate for the exercise of that discretion and her appeal to the Social Security Appeal Board against that decision was rejected. B. The decisions of the Courts below 7. She was granted legal aid and instituted judicial review proceedings to challenge the Director’s decision to reject her CSSA application on the ground that the imposition of the seven-year residence requirement is inconsistent with Articles 25, 36 and 145 of the Basic Law, as well as Article 22 of the Hong Kong Bill of Rights.[2] 8. On 23 June 2009, Mr Justice Andrew Cheung (as Mr Justice Cheung CJHC then was) dismissed her application for judicial review.[3] His Lordship’s decision was upheld by the Court of Appeal.[4] C. The CSSA scheme C.1 The nature and purpose of CSSA 9. The CSSA scheme is a non-contributory, means-tested social security scheme. It is administered by the Social Welfare Department (“SWD”) and is non-statutory. The Government describes it as “a means-tested safety-net benefit designed to ensure that people with limited or no other sources of income have sufficient money to meet their basic needs.”[5] It aims in particular to provide “a safety net for individuals or families who are unable to support themselves financially because of age, disability, illness, low earnings, unemployment or family circumstances.”[6] 10. As Mr Cheung Doi-ching,[7] giving evidence on the Government’s behalf, explains, the basic needs “include food, clothing, fuel and light, rent and schooling expenses for children ...” The Director sets a level of income which represents the amount required to meet these essential needs and: “The difference between the total assessable monthly income of a family and its total monthly needs as recognised under the Scheme in terms of various types of payment will be the amount of assistance payable.”[8] C.2 The evolution of the residence requirement 11. At the end of World War II, with China in the throes of a civil war, Hong Kong experienced a massive influx of refugees which brought the post-war population of about 600,000 in 1945 up to 1,600,000 at the end of 1946. The population increased to 2,500,000 in 1956 and reached over 3,000,000 by March 1960.[9] 12. It was against that background that the Social Welfare Office was established in 1948, providing rudimentary relief in kind, primarily in the form of cooked meals for the relief of refugees. As welfare assistance evolved, a residence requirement of 10 years was established as a condition of eligibility for public assistance.[10] In 1958, the SWD was formed and it provided shelter for the destitute and continued to provide relief in the form of daily cooked meals and dry rations.[11] A year later, in 1959, the residence requirement was reduced to five years. 13. The inadequacies of the system were recognized in a report on “Aspects of Social Security” prepared by an Interdepartmental Working Party in April 1967, and in March 1970, a Memorandum for the Executive Council[12] pointed out that the then existing scheme: “... does not enable the need to be met adequately in a substantial proportion of cases. To some extent this is because the levels of assistance are too low. Mainly, however, this is because the form in which assistance is normally given, namely dry rations, takes no account of either the basic household needs required to maintain a minimum standard of living, or the special needs arising from any particular disability suffered by a member of a family.” 14. The Memorandum recommended a change of policy, arguing that “the stage of development now reached by Hong Kong justifies a more liberal policy, and one which more closely meets the needs of the indigent” and that, as the Working Party had recommended, “public assistance, in the form of financial aid, should be accepted as a responsibility of the Government to be met by public funds” with the aim of relieving the destitute. It proposed substituting cash grants on a means-tested basis for assistance in kind. It is of particular present relevance that it also proposed that the residence requirement be reduced to one year: “The second proposal is that the present criterion of a minimum period of five years’ residence in the Colony should be reduced to one year, with the discretion of the Director of Social Welfare to pay assistance to people who have not fulfilled this condition, if, in their particular circumstances, he considers it necessary having regard for other available sources of aid. The residential criterion was established in 1948 at 10 years and reduced in 1959 to 5 years. The thinking behind the residential qualification was that public assistance should not be made so freely available as to attract a mass influx of new immigrants from China into the Colony. As a result, voluntary agencies, including some which are subvented by Government, have necessarily had to assume the responsibility for assisting persons who do not have this residential qualification. The situation regarding immigration has changed considerably in recent years and it is believed that this residential qualification could safely be reduced to one year, although for reasons associated with our external relations it would be possibly unwise at the present time to remove it entirely.”[13] 15. As pointed out by Ms Polly Choy Bo Chun[14] on the Government’s behalf, the Governor-in-Council endorsed those recommendations on 17 March 1970 and the Legislative Council’s Finance Committee approved the necessary funding on 17 June 1970. The system then put in place developed into the present CSSA scheme which was introduced in its present form with effect from 1 July 1993. 16. From 1970 onwards, one year’s residence was the residential condition of eligibility for the benefit. It was only on 1 January 2004 that the new requirement was adopted, resulting in Madam Kong having to wait seven years before qualifying for CSSA. I shall return later to examine the terms upon which the seven-year requirement was introduced and the Government’s justification for its introduction. D. The constitutional provisions relied on by Madam Kong 17. By Article 36, the Basic Law provides: “Hong Kong residents shall have the right to social welfare in accordance with law. The welfare benefits and retirement security of the labour force shall be protected by law.” 18. It must be read together with Article 145 of the Basic Law which states: “On the basis of the previous social welfare system, the Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies on the development and improvement of this system in the light of the economic conditions and social needs.” 19. The focus of this appeal is on the right to “social welfare in accordance with law” as laid down by those two Articles. 20. The case as argued below centred on the right to equality before the law and protection against discrimination. Thus, reliance was primarily placed on Article 25 of the Basic Law which provides that “All Hong Kong residents shall be equal before the law”; and on Article 22 of the Bill of Rights which states: “All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.”[15] 21. Professor Johannes Chan SC, who appeared[16] for Madam Kong did not abandon the case based on equality, but submits that the central complaint involves the Government’s adoption of the seven-year requirement, whether framed as a contravention of Article 25 or of Article 36. Pursuing the case under Article 36 has the advantage of dispensing with proof of the element of discrimination. If, as Madam Kong submits, it was an infringement of her right to social welfare under Article 36 for the Government to introduce the seven-year residence restriction, her challenge succeeds without her having to show that she was the victim of discrimination. 22. I shall accordingly focus in this judgment on the allegation that refusal of Madam Kong’s claim for CSSA benefit contravened her right as a Hong Kong resident to “social welfare in accordance with law”. E. The nature of the Article 36 right 23. As is true of many constitutional provisions, Article 36 is in very broad terms, conferring a constitutional right on Hong Kong residents “to social welfare in accordance with law”. Apart from the CSSA scheme, which[17] forms the mainstay of social security in Hong Kong, the SWD provides a wide range of services. They include family and children services; services for the elderly; rehabilitation and medical social services; services for offenders; services for community development; and services for young people.[18] There is obviously room for argument as to whether all or only some part of those services come, as a matter of law, within the concept of “social welfare” for the purposes of founding a constitutional right under Article 36. In my view, however, since the CSSA scheme aims to provide a welfare benefit addressing basic, “safety net” needs – a fundamental function of any social security system, such benefit is a clear case coming within the Article 36 concept of “social welfare”. It was not suggested otherwise. The question whether any other benefits and services provided by the SWD also fit within that concept must be left open. Other facets of the system operated by the SWD might well give rise to different considerations and it should not be assumed that what is said in this judgment can necessarily be extrapolated for general application across the spectrum of services provided. E.1 “In accordance with law” 24. Before examining the substantive content of the Article 36 right, one argument raised on Madam Kong’s behalf should be disposed of. Professor Chan endeavoured to argue that restricting the pre-existing right to CSSA by imposing a seven-year residence requirement was constitutionally invalid because it had been effected administratively rather than by legislation. The argument was that the new policy was therefore not “in accordance with law”. 25. I am unable to accept that argument. Article 145 recognizes and endorses the validity of “the previous social welfare system” which consisted of a non-statutory system of administrative rules and policies. Accordingly, reading Article 36 together with Article 145, the intention of the Basic Law must be taken to be that such administrative system – consisting of rules that are accessible, systematically applied and subject to a process of administrative appeal – is to be treated as a system providing “social welfare in accordance with law” within the meaning of Article 36. 26. Indeed, it is difficult to see how the argument helps Madam Kong. If, contrary to the view just expressed, it were correct to say that a purely administrative system does not provide “social welfare in accordance with law”, it would be difficult to see what rights are conferred by Article 36. 27. A system of social welfare catering for a wide range of clients in a wide range of different circumstances may well be better served by the operation of transparent and predictable administrative criteria rather than by having to have each benefit spelt out through a legislative process. 28. The evidence also shows that there was in fact very considerable interaction between members of the Administration on the one hand, and the Legislative Council; members of its Welfare Services Panel; and the Panel’s Subcommittee; on the other, in relation to the new residence requirement. There was therefore in fact a substantial measure of public consultation and accountability. The funding of the social welfare system as a whole is subject to approval by the Legislative Council’s Finance Committee. E.2 The Court of Appeal’s approach to the Article 36 right 29. The Court of Appeal rejected Madam Kong’s argument as it was then put regarding the content of the Article 36 right, namely, that it “confers upon all Hong Kong residents a right to social welfare subject only to such restriction as is limited by law; which is to say, statute law or common law formulated with such precision as the occasion demands and which is accessible”.[19] 30. Stock VP saw as incurable defects in that argument, among other matters, its attempt to confer a right to all forms of social welfare regardless of eligibility criteria or level of benefit;[20] its tendency to ignore the sheer width and variety of social welfare benefits in Hong Kong while “cherry-picking” the one CSSA facet;[21] and its isolation of the Government’s social welfare obligations from its other cost-bearing social obligations and functions.[22] I would respectfully agree with Stock VP in rejecting the argument so put. 31. His Lordship went on to ask rhetorically: “What then of Article 36?”[23] His answer was that it was “... strictly speaking, not necessary for the purpose of the instant exercise to decide what article 36 does mean. It suffices, for the present purpose, to conclude, as I do, that it does not bear the meaning for which the applicant contends.”[24] His Lordship, however, added: “...But one might nevertheless venture to suggest what article 36 read with article 145 envisage. With the previous social welfare system as a base, they envisage the continuous formulation and promulgation of policy in the realm of social welfare for the benefit of Hong Kong residents – as opposed to visitors – in the light of such economic conditions and social needs as prevail from time to time, with the objective of developing and improving the system, it being manifestly implicit that that objective can only be met if the system be nurtured and sustained for the meaningful benefit of future generations as well as the present. In order to meet these requirements and in any event inherent in any such system, the right to social welfare carries with it qualifying conditions. Hong Kong residents are to enjoy that right, so long as they meet the qualifying conditions, for the right itself includes the conditions. The conditions must be lawful, so that conditions that are discriminatory are not permissible.”[25] 32. With respect, I do not think that an adequate approach. Its lays the emphasis entirely on Article 145 and deprives Article 36 of any meaningful effect. It focuses on the Administration’s role in formulating social welfare policies, regarding it as free to define the eligibility and other conditions for any particular benefit, provided only that such conditions are not discriminatory. But that allows the equality rights entirely to eclipse the welfare right. The equality guarantees derive from Article 25 of the Basic Law and Article 22 of the Bill of Rights. To say that the Administration cannot impose discriminatory eligibility conditions gives effect to those guarantees. But it fails to attribute any meaning to the first sentence of Article 36 which states: “Hong Kong residents shall have the right to social welfare in accordance with law”. E.3 The content of the Article 36 right 33. Those words unequivocally declare the Basic Law’s intention to create an independent head of constitutional protection in the context of social welfare rights. True it is that Article 36 does not – and obviously cannot – descend into particulars as to specific welfare benefits or their eligibility and other conditions. But that is because, like many other constitutional provisions, Article 36 is intended to operate as a framework provision. Read together with Article 145, it provides the framework for identifying a constitutionally protected right to social welfare: Once it is clear that an administrative scheme such as the CSSA scheme has crystallized a set of accessible and predictable eligibility rules, those rules may properly be regarded as embodying a right existing “in accordance with law”, qualifying for Article 36 protection. 34. Article 145 supports this view. It adopts the previous social welfare system as the basis for the Administration’s formulation of policies after 1 July 1997 to develop and improve that previous system in the light of economic conditions and social needs. Article 145 therefore endorses the rules and policies established under the previous system and, as discussed above,[26] it implicitly regards them as rules established “in accordance with law” and thus capable of constituting particular rights protected by Article 36. 35. The relevant right given constitutional protection by Article 36 in the present case is the right defined by the eligibility rules for CSSA derived from the previous system of social welfare and in existence as at 1 July 1997. Crucially, this means that Article 36 confers constitutional protection on the rules which laid down a one-year, and not a seven-year, residence requirement as a condition of eligibility for CSSA. E.4 Modifying rights protected by Article 36 36. Social welfare rights which qualify as rights protected by Article 36 are subject to modification pursuant to policies generated by the Government in accordance with Article 145, as that Article plainly envisages. The importance of a right being recognized as a social welfare right protected by Article 36 is that any restriction subsequently placed on that right is subject to constitutional review by the Courts on the basis of a proportionality analysis (as Lord Pannick QC, appearing for the Director[27] accepted). The Government was therefore entitled to change its policy and to impose the seven-year requirement in place of the one-year requirement. But it is also clear that such modification is subject to constitutional review. 37. I pause at this stage to dispose of an argument made on Madam Kong’s behalf which cannot be accepted. It was submitted by Professor Chan that because Article 145 authorizes the Government to formulate policies “on the development and improvement of this system in the light of the economic conditions and social needs”, it can only make changes which improve welfare benefits (in the sense of making them more generous) and cannot introduce a “retrogressive” change by imposing a much longer qualifying period of residence. But Article 145 does not address, let alone freeze, the eligibility conditions or the level of any particular benefits. What it does is to make it clear that the Government may formulate policies “on the development and improvement of [the previous] system”. Lord Pannick rightly submitted that Article 145 does not preclude the elimination or reduction of particular welfare benefits if that proves necessary to develop, improve or maintain the sustainability of the welfare system as a whole. E.5 Constitutional review where rights are protected by Article 36 38. As this Court has recognized, some rights are non-derogable and absolute, in which case, no infringement is permitted and no question of proportionality arises.[28] But in other cases, it is well-established that the law may validly create restrictions on constitutionally protected rights provided that each such restriction can be justified on a proportionality analysis. 39. The starting-point is the identification of the constitutional right engaged[29] – Article 36 in the present case. The next step is to identify the legal or administrative measure said to infringe or restrict that right – the imposition of the seven-year residence requirement in the present case (to which I shall return in greater detail). The Court then asks whether that restriction pursues a legitimate societal aim and, having identified that aim, it asks whether the impugned restriction is rationally connected with the accomplishment of that end. If such rational connection is established, the next question is whether the means employed are proportionate or whether, on the contrary, they make excessive inroads into the protected right.[30] 40. In some cases involving fundamental rights such as freedom of expression or freedom of peaceful assembly,[31] or rights bearing on criminal liability such as the presumption of innocence,[32] the Court has regarded the restriction as disproportionate unless it goes no further than necessary to achieve the legitimate objective in question. This is sometimes called the “minimal impairment” test. Similarly, in discrimination cases, where the differentiating inroad is based on certain personal characteristics sometimes referred to as “inherently suspect grounds” such as race, colour, sex or sexual orientation, the Court will subject the impugned measure to “intense scrutiny”, requiring weighty evidence that it goes no further than necessary to achieve the legitimate objective in question.[33] 41. However, as the Chief Justice noted in Fok Chun Wah v Hospital Authority,[34] “... it would not usually be within the province of the courts to adjudicate on the merits or demerits of government socio-economic policies”. Where the disputed measure involves implementation of the Government’s socio-economic policy choices regarding the allocation of limited public funds without impinging upon fundamental rights or involving possible discrimination on inherently suspect grounds, the Court has held that it has a duty to intervene only where the impugned measure is “manifestly without reasonable justification”.[35] That is a test initially applied by the European Court of Human Rights while according a broad margin of appreciation to member States in setting and implementing their socio-economic policies.[36] As the Chief Justice points out, the margin of appreciation principle has previously been adapted to apply in the context of our domestic law.[37] It is appropriate similarly to apply the “manifestly without reasonable foundation” test in our domestic context. 42. Professor Chan sought to argue that the challenged restriction in the present case should be regarded as a measure that contravenes fundamental rights or engages inherently suspect grounds of discrimination. I do not agree. The Article 36 right to social welfare is not a fundamental right but a right which intrinsically involves the Government setting rules determining eligibility and benefit levels. It arises in an area where the Courts acknowledge a wide margin of discretion for the Government. As the Chief Justice pointed out in Fok Chun Wah,[38] the adoption of a residence requirement as a criterion of eligibility for social welfare benefits has often been upheld and is generally not regarded as engaging any of the inherently suspect grounds. 43. Accordingly, in my view, insofar as the disputed restriction in the present case is rationally connected to a legitimate societal aim espoused by the Government, the restriction will only be held to be disproportionate if it is manifestly without reasonable foundation. I turn then to apply these principles to the facts of the present case. F. The right, the new restriction and the Director’s discretion 44. As we have seen, the right protected by Article 36 is the administratively defined right of Hong Kong residents who pass the means test and are not otherwise disqualified, to obtain CSSA payments after having resided here for one year. That was the established position as at 1 July 1997 when Article 36 took effect. There is no dispute that but for the seven-year residence requirement, Madam Kong would have qualified for CSSA after residing here for one year. Her income has at all material times fallen below the level defined by the Director as necessary to meet basic needs. The seven-year requirement therefore removed the safety net that would otherwise have been deployed in her case. 45. It is important to note the precise terms of the new restriction. At a meeting of the Executive Council on 3 June 2003, the Council advised and the Chief Executive ordered that with effect from 1 January 2004: “To be eligible for CSSA, a person must have been a Hong Kong resident for at least seven years ...[39] Children aged below 18 are exempted from any prior residence requirement. Current Hong Kong residents (i.e. those who have become Hong Kong residents before the seven-year residence rule comes into effect, viz. 1 January 2004 as proposed) [are also exempt[40]]. In exceptional circumstances, assistance may be granted at the discretion of the Director of Social Welfare (DSW) to a person who does not meet the residence requirement.” 46. The new residence requirement therefore does not apply to all new arrivals (the term used by the Director describe immigrants who have not yet resided here for seven years or more). Children under 18 (who had previously been subject to the one-year residence requirement) and current Hong Kong residents[41] who pass the means test therefore qualify for CSSA payments. So do other new arrivals for whom the requirement is waived as a matter of discretion. The guidelines for the exercise of that discretion laid down by the Director are set out later in this judgment.[42] G. The Government’s purpose in adopting the seven-year rule 47. Turning to the next stage of the analysis, it is necessary to ask whether the seven-year restriction on the Article 36 right pursues a legitimate societal aim and, having identified that aim, to ask whether the restriction is rationally connected with the attainment of that end. 48. The restriction was recommended by the Task Force on Population Policy (“the Task Force”) chaired by the then Chief Secretary, Mr Donald Tsang, in its Report issued on 26 February 2003.[43] 49. It is worthwhile emphasising that a purpose relied on to justify a restriction on a constitutional right must be a legitimate societal aim. In other words, it has to be an aim which furthers the legitimate interests of society. The Government might simply state that it is cutting expenditure with the aim of “saving money”. But saving money would not in itself be a legitimate aim. The purpose and effect of the cut in expenditure would have to be taken into account. If the cut in expenditure meant that the Government was abdicating an important responsibility which the government ought to discharge in the public interest, the saving of money by that means would not be a legitimate aim. To take an extreme example, it would not be a legitimate aim to cut expenditure by say, halving the number of ambulances or fire engines, thereby endangering public safety. In the present case, the Government is not saying that its aim is simply to save money. It is saying that the restriction was introduced to save money because such savings are necessary to ensure the sustainability of the social security system. 50. Thus, explaining the new seven-year rule to the Legislative Council’s Panel on Welfare Services (“the Welfare Panel”) on 10 March 2004, the Director stated: “The new residence requirement for social security benefits was recommended by the Task Force on Population Policy. Its aim was to provide a more rational basis for the allocation of public resources in the light of rising social expenditure and limited financial resources and to ensure the long-term sustainability of the provision of social security benefits to the community.”[44] 51. That is how the case has been argued. Andrew Cheung J noted that the Director’s submission was: “... that the legitimate aim of the seven-year residence requirement is to adopt a proper basis for the allocation of finite public resources in the light of rising social expenditure so as to ensure the long term sustainability of the provision of social security benefits to the society as recommended by the 2003 Taskforce on population.”[45] 52. It was an argument that the Court of Appeal accepted. Stock VP stated: “...ample justification has been provided for the contention that in order to sustain the viability of the social welfare system, the eligibility criteria required amendment. That was the result of anticipated problems posed by an ageing population, a low birth rate, by the fiscal deficit at the time of the decision, the continuing flow of OWP holders with a concomitant absence of control of immigration intake from that direction, decreasing emigration and the fact that the scheme was a non-contributory one.”[46] 53. In Mr Cheung’s Affirmation,[47] three related factors are said to contribute to the need for measures to safeguard the system’s sustainability: (i) the policy of accepting immigrants from the Mainland under the OWP scheme; (ii) Hong Kong’s ageing population; (iii) the rise in expenditure on CSSA. The Government regards the seven-year restriction as a rational response to the sustainability problem so arising: “Against the background of a serious fiscal deficit and the implication of demographic trends and characteristics identified in the [Task Force] Report, the Administration took the view that there was a strong case for applying a uniform 7-year residence requirement for providing heavily subsidized social services. In respect of CSSA, the Administration considered a 7-year residence requirement for new arrivals aged 18 or above to be a rational basis for allocation of social resources ...”[48] 54. Mr Cheung also puts forward certain other arguments championing the reasonableness of the rule, which I shall consider later.[49] I wish first to focus on the question whether a rational connection exists between the avowed purpose of ensuring the financial sustainability of the social security system on the one hand and the seven-year residence requirement on the other. I propose to examine each of the three factors said to underlie the sustainability problem and consider whether they provide or contribute to a rational justification for the seven-year restriction. H. The OWP scheme H.1 The problem 55. The Task Force Report[50] explains the background and problem which had to be dealt with: “Under Article 24(2)(3) of the Basic Law as interpreted by the NPCSC Interpretation dated 26 June 1999, Mainland children born to Hong Kong permanent residents have the right of abode in Hong Kong provided that at least one of their parents have obtained permanent resident status by birth or residence at the time of birth of the children. In anticipation of the implementation of the Basic Law, the daily OWP quota was increased from 105 to 150 in 1995 to facilitate the entry of these children. The remaining places are allocated to Mainland spouses and other OWP applicants with no right of abode who generally have to wait for a longer time before they can settle in Hong Kong. Currently, spouses in Guangdong have to wait for about seven to eight years. The discrepancy in the times of arrival in Hong Kong between the CoE children[51] and their Mainland parents often gives rise to separated families. Concern has been expressed in the community about the various problems that are believed to have resulted from this situation, problems such as inadequate parental care, economic hardship if the Hong Kong parent has to give up a job to look after the children, adverse impact on family relationship, etc. As the number of new arrivals from the Mainland continues to grow, the problem of split-families also grows. Many Legislative Council Members, academics and opinion leaders whom we approached have made the point strongly that the situation has to be properly addressed and that a proper balance has to be struck between orderly admission of new arrivals from the Mainland, both children and spouses, and upholding family unity.” H.2 Family reunion as the main source of population growth 56. To address this problem, the Government, in cooperation with Mainland authorities, adopted the OWP scheme. Mainland authorities issue OWPs in accordance with Mainland law, permitting the exit of Mainlanders to Hong Kong for settlement. As the Task Force Report explains: “The OWP Scheme is a scheme devised primarily to facilitate families with immediate members (spouses and children) residing in the Mainland to be reunited in Hong Kong. OWP holders can be broadly divided into two groups: children of Hong Kong permanent residents with Certificate of Entitlement (CoE); and spouses and other dependants. The CoE children are permanent residents and have right of abode in Hong Kong. Spouses and other dependants who enter Hong Kong on OWPs are non-permanent residents but may become permanent residents after having ordinarily resided in Hong Kong for a continuous period of not less than seven years.”[52] 57. The OWP scheme has become “the single most important immigration policy that shapes Hong Kong’s demographic growth and composition”, accounting for some 93% of population growth from 1997 to 2001.[53] Applying the increased daily quota of 150,[54] about 55,000 Mainland immigrants are admitted each year. The Task Force Report suggested that some 168,000 persons were in the queue waiting for a OWP.[55] The Government has been content to maintain that rate of inflow. In a press release issued upon publication of the Task Force Report on 26 March 2003, the then Chief Secretary stated: “We respect the right of family reunion and the Right of Abode conferred by the Basic Law, and we have concluded that the present daily allocation of 60 within the 150 quota for children with right of abode in Hong Kong is appropriate. ... For the time being, the total daily quota of 150 will remain unchanged. The SAR Government will liaise closely with the Mainland authorities with regard to the numbers and the allocation among the categories. If there is evidence that the demand falls, we will discuss with the Mainland authorities to reduce the quota.” 58. Most new arrivals entering under the OWP scheme are children with the right of abode in Hong Kong and Mainland spouses coming to join spouses already resident here.[56] About half of the children tend to be under 18. So in 1996, 48% were aged 19 or below;[57] and in 2002/03, 51.6% were 18 or below.[58] The adult OWP holders are usually wives of Hong Kong residents. Thus, in 2001, 65% of all OWP holders entering Hong Kong were females, mostly housewives.[59] 59. It is the Government’s policy to facilitate the integration of new arrivals in the community and the Task Force Report points out that: “...there are few significant differences in university attendance between native-born children and the Mainlanders who came to Hong Kong before the age of nine. It is only among the ‘older’ Mainland children who arrived in Hong Kong after the age of nine that significant differences in university attendance exist. This suggests that the younger an OWP applicant is admitted, the easier it will be for him or her to adapt to Hong Kong’s education system.”[60] 60. The OWP scheme therefore favours younger children as immigrants and they are given the largest sub-quota (60) of the 150 daily quota. They are likely to be qualified to settle in Hong Kong before their parent (usually the mother) on the Mainland (spouses separated for over 10 years being given a sub-quota of 30). However, younger children obviously need parental care. Since 2002, Mainland authorities have facilitated visits by spouses to their families in Hong Kong by allowing them to apply for two-way permits as and when they wish once they have applied for a OWP.[61] This effectively allows family reunion to take place while the Mainland parent’s own OWP is pending. The Task Force Report recommended that such spouses should be encouraged to take advantage of this to familiarise themselves with Hong Kong conditions and to help themselves decide whether to settle here.[62] H.3 How the OWP scheme bears on the seven-year requirement 61. It is evident from the foregoing that no support for the CSSA seven-year requirement can rationally be derived from any aspect of the OWP scheme. The humane and laudable purpose of that scheme is the promotion of family reunion, respecting the right of abode of children of Hong Kong permanent residents under the Basic Law. It gives preference especially to younger children because they integrate more easily. And realistically, to provide them with adult carers, their Mainland parents, usually their mothers, are encouraged to come to Hong Kong on two-way permits pending issue of the OWP applied for, eventually settling here as Hong Kong residents in their own right. 62. Where such a reunited family is poor, having means-tested income which does not cover the basic needs of its members, one would expect the social security scheme to operate in harmony with the OWP scheme and so make CSSA benefits available. While it may be that the one-year residence requirement has to be accepted as the basic right to social welfare historically defined, it would be wholly irrational, when viewed from the perspective of the OWP scheme, to raise it to a seven-year requirement. Although the Task Force Report contains considerable discussion of the OWP scheme, it provides no rational basis for adopting the seven-year rule. On the contrary, its logic demands the disapplication of that rule in relation to OWP arrivals. 63. That logic has only partly been respected. In line with encouraging younger immigrant children to come, new arrivals under 18 years of age have been exempted from the seven-year restriction, but – illogically – there is no such exemption for Mainland parents who come to take care of them. It follows that unless the operative restriction is waived as a matter of discretion – a matter discussed further below[63] – such parents have to find some way to cope over a seven-year period even though a means test has shown that they are without sufficient income to meet their basic needs. 64. That counter-productive aspect of the seven-year requirement has not escaped members of the Welfare Panel. At its meeting held on 10 March 2003, Ms Li Fung-ying is recorded as having stated that: “... the seven-year residence requirement for the CSSA Scheme [was] a policy marred with contradiction, as its having the effect of deterring potential new arrivals to settle in Hong Kong was at variance with the policy of family reunion.”[64] 65. And after the seven-year requirement had been in place for some four years, the Sub-Committee appointed to review the arrangements for CSSA taking into consideration the views of the public, service users and non-governmental organisations providing welfare services, reported to the Welfare Panel[65] that deputations: “...informed the Subcommittee that many new-arrival single mothers faced great financial hardship for being unable to meet the residence requirement. They were unable to find a suitable employment because of their low educational attainment and the need to take care of their young children. Given that these new arrivals were not eligible for CSSA, they had to rely on their child(ren)’s CSSA for a living.” 66. It is clear, to say the least, that the OWP scheme provides no support whatsoever for the Government’s alleged legitimate aim of ensuring the welfare system’s sustainability and no support for the existence of any rational connection between that aim and the impugned seven-year requirement. The policies underlying the OWP scheme militate against that restriction. I. Hong Kong’s ageing population 67. The second factor said to underlie the Government’s avowed legitimate aim is the need to cater for an ageing population. The Task Force identified the problem in the following terms: “In 2001, Hong Kong’s total fertility rate reached an extremely low level of 927 children per 1,000 women, well below the replacement level of 2,100 children per 1,000 women. At the same time, life expectancy at birth is projected to reach 82 for men and 88 for women in 2031, one of the longest in the world. Hong Kong’s population is aging. A quarter of its population is expected to be aged 65 or above by 2031. More significantly, the size of the workforce will shrink as the prime working age population declines.”[66] 68. In every society, the working age population economically supports children below, and the elderly above, working age. The demographic pattern identified above undoubtedly presents a serious long-term problem since it projects a shrinking working age population having to support a growing number of long-lived elderly dependents. The Task Force Report projects the following dependency ratios from 2002 to 2031: 69. These figures indicate the projected numbers of children (those under 15) and the estimated numbers of elderly persons (those over 65) who will be dependent on every 1,000 persons between the ages of 15 and 65. Thus, in 2002, for every 1,000 persons aged between 15 and 65, there were estimated to be 223 child dependents and 158 elderly dependents with a total overall dependency ratio of 381. It was projected that over the years, the child dependency ratio would decline while the elderly dependency ratio would markedly increase from the year 2016 onwards. 70. This obviously has serious implications for the cost of caring for the elderly. The Task Force puts this as follows: “One serious economic problem caused by an accelerated increase in the number of elderly people in the population is social security payments. The Government is committed to providing financial assistance to elderly people in need. More than 600,000 persons aged 60 or above receive financial assistance through either the CSSA or the Old Age Allowance (OAA). ... Total Government expenditure in financial assistance for elders is estimated to be $11.8 billion in 2002-03, accounting for 5.4% of recurrent public expenditure and representing an increase of 50% when compared to the $7.8 billion paid out in 1997-98. The CSSA and OAA Schemes are funded entirely from General Revenue and are non-contributory. Should the rate of payment and eligibility for the OAA remain unchanged, it is estimated that by 2031, the total payment for OAA alone will rise to $10.4 billion. That for CSSA on elderly cases is estimated to leap-frog to $20.8 billion... Another serious economic problem caused by an aging population is steep increases in healthcare expenditure.”[67] 71. The Government is undoubtedly right to regard the problems of our ageing population as serious and right to lay down policies aimed at mitigating those problems with a view to ensuring the long-term sustainability of our social welfare system. But what, if any, rational connection is there between such mitigation and the impugned policy of excluding new arrivals from receiving CSSA until they have resided here for seven years? I do not think any such connection exists. 72. Given that one of the root causes of the ageing population problem is Hong Kong’s low fertility rate, and given that the OWP scheme has become “the single most important immigration policy that shapes Hong Kong’s demographic growth and composition”, with Mainland new arrivals accounting for 93% of our population growth between 1997 and 2001,[68] a rational response to the ageing problem ought to involve encouraging the entry of young immigrants to rejuvenate our population. This was recognized by the Task Force which acknowledged that: “...OWP holders, in particular young children, have contributed significantly towards mitigating the negative effects of low fertility and population aging by replenishing the dwindling number of our younger age cohorts.”[69] 73. As has already been pointed out, the Government has only partially acted on that logic, exempting those under 18 from the seven-year residence eligibility criterion for CSSA, but applying the restriction to parents who arrive to be reunited with and to care for such children. To that extent, far from the seven-year requirement being a rational measure to mitigate the ageing population problem (and thereby contributing to the sustainability of our social security system), it is a counter-productive and irrational measure. 74. The evidence regarding social security payments to the elderly also belies any rational connection between the new restriction and the Government’s avowed aim of ensuring sustainability. The seven-year restriction does not affect all elderly CSSA recipients, but only new arrivals who are elderly. Such persons constitute only a small proportion of all new arrivals. The elderly are given a relatively low priority and thus are allotted a small sub-quota under the OWP scheme. Thus, the Task Force Report[70] states that the 150 daily quota was allocated according to the following sub-quotas: 60 for children with Certificates of Entitlement; 30 for spouses separated for over 10 years; 60 for persons in all other categories, including spouses separated under 10 years; unsupported children coming to join relatives in Hong Kong; persons coming to Hong Kong to take care of their unsupported aged parents; unsupported elderly people coming to join relatives in Hong Kong and persons coming to Hong Kong to inherit legacies. 75. Of the relatively few elderly persons who do enter under the OWP scheme, only a small proportion[71] receive CSSA and Old Age Allowance. And even before the seven-year requirement was introduced on 1 January 2004, there was already in place a stringent requirement in respect of Old Age Allowance: to be eligible, a person had to have resided in Hong Kong for not less than five years since attaining the age of 60.[72] It follows that savings to CSSA expenditure that could be achieved by raising the requirement to seven years for new arrivals would be minimal and could hardly qualify as a response to the ageing population problem, aimed at ensuring the sustainability of the welfare system. J. The rise in CSSA expenditure 76. There is no doubt that in the decade leading up to 1 January 2004, spending on CSSA had risen sharply and that it was the Government’s duty to consider policies aimed at ensuring its sustainability. 77. The first point to note, leaving aside for the moment the seven-year restriction, is that the Government did indeed confront the problem of steeply rising expenditure and did take action aimed at safeguarding its sustainability. The question which arises is whether, in the light of those measures, there is any rational basis for regarding the seven-year restriction on the Article 36 right as such a measure. J.1 The December 1998 Report 78. The problem of sharply increasing expenditure was recognized and subjected to detailed consideration by an Inter-Departmental Steering Group chaired by the Director, which published a report dated December 1998. The Report stated: “The current review was prompted by growing public concern about the rapid growth in the CSSA caseload and its expenditure, the high levels of CSSA benefit for larger families as compared with market wages, and the sharp increases in the number of people of working age turning to CSSA. There is also an increasing perception that some people are abusing the system.”[73] 79. Key figures and concerns were given as follows: “(a) The CSSA caseload rose by 146% from 88,600 in September 1993 to 218,400 in September 1998. (b) The CSSA expenditure increased by nearly three times from $2.4 billion in 1993/94 to $9.4 billion in 1997/98. (c) The average monthly CSSA payments for households of four or more persons are now considerably higher than low-end wages. (d) The number of ‘unemployment’ CSSA cases increased over six times from 3,500 in September 1993 to 26,200 in September 1998, representing 12% of the total CSSA caseload. During the same period, the ‘single parent’ CSSA cases increased by 268% from 5,700 to 20,900, representing 10% of the total CSSA caseload. (e) There have been increasing calls for the Government to take more effective measures to prevent abuse of CSSA. A special hot-line for reporting suspected CSSA fraud cases was set up by the Social Welfare Department (SWD) in August 1998. Up to the end of September 1998, it had received some 1,300 calls.” The estimated CSSA expenditure for 1998/99 is expected to be above $13 billion. The Government will spend much more on CSSA in the years to come even if all the SG’s recommendations (see paragraph 8-29 below) are accepted and implemented.”[74] 80. The Steering Group was therefore examining increases in CSSA expenditure over the scheme as a whole, seeking to identify contributing factors and seeking ways to bring such expenditure under control. There is no suggestion that CSSA claims by new arrivals merited any special attention or that they were a cause for concern. 81. The Steering Group made a series of policy recommendations, applicable across-the-board, mainly aimed at encouraging CSSA recipients to get jobs. To take one example, the Report noted that CSSA payments made to larger households resulted in per capita income that was larger than the per capita income of non-CSSA households in the lowest expenditure group,[75] with the likely result that able-bodied persons would opt to remain on welfare rather than getting a job. In response, the Report recommended an across-the-board reduction in the standard rate of CSSA of 10% for households with three able-bodied adults and children; and of 20% for households with more than three such persons.[76] It contained a calculation of the percentage savings to be achieved by such measures, ranging from a saving of 5% in single member households to 17% in households with five members.[77] That recommendation was implemented in June 1999.[78] Such a policy, creating disincentives against the development of a culture of dependence, may readily be seen as rationally aimed at ensuring sustainability. J.2 Reduction in the standard rate 82. Another rational response to concerns about mounting expenditure and sustainability was the order of the Chief Executive in Council to reduce standard rates of CSSA across-the-board by 11.1% to take effect on various dates in 2003 and 2004.[79] 83. The Legislative Council Brief described the problem faced as involving unacceptable unabated growth in welfare expenditure. It noted that upward adjustments had been made to standard rates by 6.5% in 1997-98 and 4.8% in 1998-99.[80] However, as at December 2002, the total CSSA caseload was 266,571, representing a year-on-year growth of 10.3%, with the “unemployed” CSSA caseload having increased by 40.3% over the same period. This led to the projection that the approved provision of CSSA in 2002-03 of $16 billion (already up 11.1% on actual the expenditure of $14.4 billion in 2001-02) would be insufficient. It was also estimated that the requirement for 2003-04 would be well in excess of $18 billion.[81] 84. This was seen as a threat to the system’s sustainability: “Firstly, against the general economic situation and high unemployment, the number of families and individuals requiring support by Government is bound to increase. To sustain this safety net, we have to ensure our existing resources go further to meet the increasing demand. Secondly, prices for goods and services have come down considerably even as measured specifically by the SSAIP.[82] ... Thirdly, the HKSAR Government is facing some unprecedented budget deficits and of the Government is committed to restoring fiscal balance by 2006-07 as announced by the Financial Secretary...”[83] 85. The Government therefore decided to reduce the CSSA and SSA standard rates of payment: “For fiscal reasons and to ensure that we could continue to meet increase in demand, it is therefore proposed that the CSSA and SSA rates should be adjusted downward; that the over-adjustments in standard rates for able-bodied recipients under the CSSA Scheme, and those of the non-means tested [Disability Allowance] under the SSA Scheme should be recouped in one go through an 11.1% reduction from June 2003 .... and for non-able-bodied CSSA recipients, namely the elderly, the disabled and those medically certified to be in ill health, the 11.1% reduction the standard rates will be effected in two phases, first by 6% from October 2003, followed by the second phase adjustment from October 2004.”[84] 86. Again, in my view, the rational connection between the sustainability objective and those across-the-board reductions of the standard rates is plain to see. J.3 The seven-year residence requirement 87. The Government’s case in support of the seven-year requirement based on rising cost is unfocussed and sparse. Mr Cheung points to rising public expenditure on social welfare generally (reaching $32.8 billion in 2006-07), with social security taking up the largest share (73%).[85] He indicates how overall spending on CSSA has increased over the past decade: “In 1993-1994, expenditure for CSSA amounted to $2.4 billion. The upward trend in CSSA expenditure levelled off slightly between 1999 to 2001 at around $13.6 billion, and began to rise again in 2001-2002. In 2003-2004 Draft Estimates of Expenditure, the Administration was seeking a provision of $17 billion for CSSA to meet anticipated increase in demand. This is $780 million over the revised provision of $16.3 billion on 2002-2003.”[86] 88. He refers to new arrivals taking up CSSA benefits, stating: “Between March 1999 and June 2002, it was estimated that new arrivals on CSSA benefits rose from 14.3% to 16.6% of all new arrivals.” 89. He then points out how expenditure on new arrivals has increased: “The estimated CSSA expenditure on new arrivals increased from $1,467 million (or 10.8% of total CSSA expenditure) in 1999-2000 to $1,728 million (or 12% of total CSSA expenditure) in 2001-2002.”[87] 90. Those arguments are quite inadequate. It is clear that spending on social welfare in general, and on CSSA in particular, has risen markedly over the past decade. But that says nothing to justify the impugned restriction relating to new arrivals. In March 2003, the Director reported that only 18% of new arrivals were on CSSA.[88] And on the figures derived from the evidence,[89] new arrivals have generally made up 12% to 15% of the total number of CSSA recipients: 91. As we have seen, the December 1998 Report of the Inter-Departmental Steering Group addressed the problem of rapidly increasing costs without anywhere suggesting that CSSA claims by new arrivals caused any particular problem or required any measures to be taken. The overall increase in spending may obviously be due to a whole range of factors. Thus, the 11.1% across-the-board reduction of standard rates implemented in 2003 and 2004 was a response to an unacceptable increase in expenditure attributable to upward adjustments subsequently thought to have been excessive. 92. Nor is it helpful for the Government simply to point to the increase in CSSA expenditure in relation to all new arrivals. Without evidence as to the savings which the seven-year restriction has achieved by excluding the segment of new arrivals actually affected, it is very difficult to evaluate its rational connection (if any) with the avowed objective of ensuring sustainability of the social security system. 93. As emphasised above,[90] the precise terms of the seven-year residence requirement must be kept in mind. By implementing the new rule, no savings are achieved in relation to new arrivals under 18 years of age; new arrivals already Hong Kong residents on 1 January 2004; and new arrivals who successfully obtained a waiver of the residence requirement. 94. The importance of those limits can be illustrated by considering the position in 2001-2002. In that year, the cost of CSSA was $14.4 billion for all recipients. The cost of CSSA paid to all new arrivals was 12% of the overall amount, namely, $1.7 billion. If the seven-year requirement had then been in place, $964 million would have been paid in any event to those under the age of 18. 95. As to the remaining $764 million, those who were already Hong Kong residents in that year would also have received CSSA despite the new rule, and savings would have shrunk further when discretionary waivers were taken into consideration. One would therefore have been left with savings in respect of new arrivals affected by the seven-year rule which represent a very small fraction indeed of the $14.4 billion overall expenditure on CSSA for that year. It is true that in subsequent years, the number of recipients who have not resided here for seven years would progressively diminish. It nevertheless remains the case that the actual savings would be proportionately reduced by payments made to residents in that class for each year over the entire seven-year period. 96. As pointed out above, the legitimate aim espoused is not merely saving whatever money might be saved, but preserving the system’s sustainability. The relatively insignificant level of savings achievable by implementing the seven-year rule severely undermines the suggestion that the restriction was genuinely intended to be, or functioned as, a measure rationally designed to safeguard the sustainability of the social security system. 97. In fact, the Government has acknowledged the immateriality of the savings achievable by the seven-year requirement. In its information paper dated 2 January 2004, the day after the new rule took effect, the Government informed the Welfare Panel’s Subcommittee that “Of the amount paid to the new arrivals in 2002-03, $963 million were made to those aged 18 or above and $1,068 [million] to those aged below 18.” Revealingly, the Paper went on to state: “The new residence requirements for CSSA are, however, not driven by the need to reduce CSSA expenditure on new arrivals, but by the need to adopt ‘the principle of seven-year residence requirement’ for providing social benefits heavily subsidized by public funds, as recommended by the Task Force on Population Policy, to ensure a rational basis on which our public resources are allocated. The Government remains committed to providing an effective and sustainable safety net for the financially vulnerable.” (Italics supplied)[91] K. Other justifications put forward by the Government 98. The reference to the so-called “principle of seven-year residence requirement for providing social benefits heavily subsidized by public” quoted above recalls a point made in the Task Force Report[92] as an additional reason for the seven-year restriction, as follows: “Chapter III highlights the anomaly that exists in the eligibility criteria of various subsidized benefits in terms of length of residence in Hong Kong. Among the major benefits, a ‘seven-year’ residence rule is applied to public rental housing applicants (except children under the age of 18). In the case of CSSA, a ‘one-year’ residence rule is applied. No such rule is implemented for users of public health and hospital services; they are not even subject to means test.” 99. The Task Force Report went on to state: “After careful consideration, the Task Force considers that there is a strong case for removing the anomaly that exists in the eligibility criteria for major subsidized benefits, and for applying a uniform seven-year residence rule for providing all heavily subsidized social services including CSSA and public healthcare benefits. Eligibility based on a seven-year residence requirement reflects the contribution a resident has made towards our economy over a sustained period of time in Hong Kong. A seven-year residence is also normally required for the grant of permanent resident status in Hong Kong, for which additional rights are prescribed in the laws of Hong Kong.”[93] 100. These suggestions[94] of course have nothing to do with promoting the financial sustainability of the social security system and do not provide any support for the seven-year residence requirement as rationally connected with the legitimate purpose proclaimed by the Government. 101. It is unclear whether the Director advances such grounds as separate purposes supplying independent legitimate aims capable of justifying the restriction of the Article 36 right. If that is the intention, such grounds are, in my view, so lacking in coherence that they cannot properly serve as legitimate aims for the restriction. Alternatively, if they do serve as such purposes, they are such insubstantial and socially insignificant aims that the restriction of the Article 36 right is a wholly disproportionate measure to achieve them, making it a measure that is manifestly without reasonable foundation. K.1 Uniformity of qualifying periods 102. The first of the additional arguments mentioned above is the somewhat bizzare suggestion that there is some intrinsic value in having uniform qualifying periods for welfare benefits where such benefits are heavily subsidized by the state. Symmetry for the sake of symmetry is hardly a legitimate aim. Waiting times for public rental housing must obviously depend on the stock of public housing available and a shortage may lead to the setting of long qualifying periods. Why should those qualifying periods be relevant to setting the eligibility period for CSSA payments intended to meet the immediate basic needs of indigent individuals and families? 103. It is also hard to understand why the absence of any residential requirement for access to public health and hospital services should be regarded as “an anomaly”. It would indeed be a dysfunctional public health system if a person in need of urgent medical services were to be refused medical assistance on the ground that he or she has not met some residential qualification imposed simply to achieve “uniformity” with residential qualifications adopted for wholly different purposes. 104. It is also impossible to see how the seven-year qualifying period for permanent resident status laid down by Article 24(2) of the Basic Law is relevant. That seven-year period is essentially a qualifying period for taking part in the government of the HKSAR. One has to be a Hong Kong permanent resident to vote and stand for election;[95] to become Chief Executive;[96] to become a member of the Executive[97] or Legislative[98] Councils; and so forth. It makes no sense to impose a like residence requirement for CSSA applicants simply to achieve a seven-year symmetry. K.2 Contribution towards our economy 105. Another strand of these additional arguments involves the suggestion that: “Eligibility based on a seven-year residence requirement reflects the contribution a resident has made towards our economy over a sustained period of time in Hong Kong.”[99] 106. This loses sight of the persons whose eligibility is in issue and the circumstances in which they find themselves. The evidence is that in 2002, in the 22-59 age group, 95% of new arrival CSSA recipients were women.[100] This pattern has continued so that new arrival recipients of CSSA are overwhelmingly likely to be women; and likely to be Mainland spouses reunited with their families in Hong Kong. They are likely to be looking after children who have the right of abode, and are therefore likely to be unable, or to have very limited capacity, to take up outside employment. In playing their role, they make a valuable contribution to our society, helping rejuvenate our ageing population, helping to integrate children with right of abode into our community and helping to avoid the socially disruptive consequences of split families. They are persons who, on the Director’s own means test, are unable to meet their basic needs. In such circumstances, it appears arbitrary and manifestly unreasonable to exclude them from CSSA benefits for seven years because of some notion that they should only receive such benefits in exchange for seven years’ worth of contribution to our economy. 107. But even where a Hong Kong resident, having arrived as holder of a OWP, is unable to work and is simply indigent, the idea of requiring him or her to contribute to our economy for seven years before being allowed to draw CSSA makes little sense. The realistic view is that such person will need to draw upon, rather than make contributions to, our economic resources in the same way as an indigent permanent resident does. It is illusory to think that adoption of a seven-year eligibility criterion is somehow going to turn such a person into a net contributor to the economy. 108. The idea of requiring seven years’ contribution to the economy as a condition of receiving CSSA is in truth a rejection of the principle, accepted in Hong Kong since 1970, that social welfare is the responsibility of the Government to be met by public funds. Government officials in charge of social welfare have rightly rejected attempts to undermine that principle. 109. This is exemplified in two places in the December 1998 report of the Inter-Departmental Steering Group. It will be recalled that the Steering Group recommended the reduction of the standard rate for larger households.[101] It had also been suggested that payment of standard rates to such households should be capped. The Steering Group’s response was: “We do not support this idea because by capping the benefits payable to larger households, the basic needs of some family members would not be provided for at all. This is against the objective of the CSSA Scheme.”[102] 110. They also referred to a suggestion that CSSA for able-bodied unemployed recipients should be cut off or reduced after a time limit of say, six months, so as to encourage them to find employment. The Steering Group rejected that suggestion stating: “...we do not propose to terminate or reduce assistance for able-bodied unemployed recipients after a time limit. A balance has to be struck between ensuring incentives to work and the guarantee of basic livelihood. If termination or reduction of benefits was to be introduced and was seen as leading to undue hardship, it would run the risk of undermining the fundamental function of our social security system.”[103] 111. Perhaps it is because the seven-year residence requirement originated, not in a specialist social welfare review, but as something of a side-wind deriving from a long-term population policy study, that there has not been proper recognition of the threat posed by the seven-year restriction to those fundamental social welfare values – values which have received constitutional acknowledgement in Article 36. K.3 Fiscal deficit 112. Another point made by the Government on a number of occasions in seeking to justify the seven-year rule involves reference to the restriction being imposed a “against the background of a serious fiscal deficit”: “Against the background of a serious fiscal deficit and the implication of demographic trends and characteristics identified in the [Task Force] Report, the Administration took the view that there was a strong case for applying a uniform 7-year residence requirement for providing heavily subsidized social services.”[104] 113. It is significant that the deficit is put no higher than a “background” feature. It is also significant that when Stock VP referred to this, he spoke of “the fiscal deficit at the time of the decision”. Judicial notice may be taken of the following figures derived from the annual accounts published by the Government:[105] 114. The figures show that there was indeed a net deficit in the year ended 31 March 2003. However, the figures indicate that the seven-year rule was not introduced to cut spending so as to rein in that deficit. They also show that such deficit was not a persistent feature of Government finances. The figures suggest that the key determinants of whether there would be a net surplus or deficit were the level of operating revenue[106] and the results of investments made by the Exchange Fund.[107] Operating expenses[108] in general and spending on social security in particular were relatively stable and rose at a comparatively modest rate in the eight-year period after the deficit was incurred. Healthy surpluses accrued in the five years following the deficit year as operating revenues increased and the Exchange Fund performed positively. There then accrued a substantial deficit in 2008-2009, very largely due to poor Exchange Fund results, but that was reversed by a greater net surplus in the following year, followed by another hefty surplus in the subsequent year. The fiscal deficit in 2002-03 is therefore indeed no more than a background feature in the discussion. It makes no contribution to any justification of the seven-year rule. L. Prior warning, charities and the Director’s discretion 115. Finally, I should mention three arguments that the Director has advanced in aid of the submission that the seven-year residence requirement is a reasonable measure. As I understand them, they are put forward at the proportionality stage of the argument. In other words, the Director’s main proposition is that the seven-year requirement is justified as a rational measure aimed at ensuring the financial sustainability of Hong Kong’s social security system and that it is a reasonable policy because any hardship flowing from the restriction is catered for, or at least significantly mitigated, by the three matters to which I now turn. L.1 Prior warning against coming to Hong Kong 116. First, the Director points out that the seven-year requirement has been widely publicised on the Mainland,[109] the intention being that: “... a stricter residence requirement for CSSA would send a clear message to potential migrants that they should plan carefully and ensure that they have sufficient means to support themselves in Hong Kong.”[110] 117. Making this point to the Welfare Panel, the Director stated: “..., it is not unreasonable to expect the sponsoring persons in Hong Kong to support their sponsored new arrivals, or the new arrivals who are economically active to support themselves with their own means in Hong Kong. As the proposed measures are to take effect from a future date, potential new arrivals will have an opportunity to make an informed decision on whether they would move to Hong Kong for settlement taking account of all relevant considerations.”[111] 118. This is a highly unattractive approach. It amounts to telling potential immigrants who have been granted OWPs: “If you are poor, stay home. You will be ineligible for CSSA for seven years. So don’t come to Hong Kong unless you can pay your own way or have someone who will support you.” As was pointed out by a member of the Welfare Panel, it has “the effect of deterring potential new arrivals to settle in Hong Kong” and is “at variance with the policy of family reunion.” [112] It runs counter to the avowed policies of respecting the rights of Mainland children with the right of abode; of promoting family unity; of promoting immigration of Mainland children to rejuvenate our ageing population when they are young and integrate more easily into our society. 119. I do not think this approach qualifies as a reasonable way to mitigate the hardship suffered by those caught by the seven-year residence requirement. L.2 Reliance on charities 120. The Government also makes the argument that, if denied CSSA, new arrivals are able to seek help from charitable institutions. Mention is made of charitable trust funds which assist people in family crisis and temporary financial hardship, mainly in the form of one-off grants; charities which provide foodstuffs and hot meals; and charities which provide second-hand clothing, furniture and appliances, and so forth.[113] It is self-evident that such charitable help can only be of a temporary or emergency nature. It may supplement but cannot be a practical substitute for CSSA. 121. More importantly, the argument is in principle objectionable. It really amounts to the Government abdicating its constitutional responsibility for social welfare to private charities and trying to make a virtue of the existence of such charities in the proportionality analysis. The Hong Kong residents concerned find themselves destitute and eligible for short-term or emergency help from charities because they have been excluded from CSSA as a result of the Government’s adoption of the seven-year requirement. It is exceedingly unattractive for the Government then to shrug its shoulders and say: “Well, you can always approach local charities as a supplicant for their goodwill”. 122. The primary responsibility of the Government for social security and the subsidiary role of voluntary agencies have been recognized since at least 1970 when, in a Memorandum for the Executive Council,[114] the Government stated: “It is highly desirable, both at present and for future planning, that Government should be responsible for public assistance, and that there should be a clear distinction between the responsibilities of voluntary agencies in this and other social welfare fields.” 123. I am unable to regard possible reliance on charities as a reasonable proportionality argument to be weighed in support of the impugned restriction. L.3 The Director’s discretion 124. Thirdly, the Director places heavy reliance on the existence of a discretion to waive the seven-year requirement as softening the impact of any hardship that may be caused by the restriction. Thus, Mr Cheung states: “... members of the [Welfare Panel] were informed that DSW would continue to exercise his discretion to waive the residence requirement in cases of genuine hardship, if necessary, thus making CSSA always available to the financially vulnerable in the absence of other options.”[115] 125. The evidence shows, however, that it is clearly not the case that CSSA is “always available to the financially vulnerable”. It is important to note the qualifying words “in the absence of other options”. In fact, the Government’s stance has been to treat the discretion as available only in exceptional cases. It has been quick to deem an applicant to have “other options”. 126. The exceptional nature of the discretion was envisaged by the Task Force from the outset: “For exceptional cases, the Director of Social Welfare, of course, will have discretionary power to grant CSSA on compassionate grounds waiving the residence rule.”[116] 127. And when, on 3 June 2003, the Chief Executive in Council made the Order that the seven-year requirement be implemented with effect from the following January, the fourth paragraph of the Order stated: “In exceptional circumstances, assistance may be granted at the discretion of the Director of Social Welfare (DSW) to a person who does not meet the residence requirement.” 128. The Director has laid down guidelines[117] for the exercise of the discretion in the following terms: (a) In general, financial hardship alone does not merit exceptional treatment, especially in the case of able-bodied adults. (b) The [relevant officer] can exercise discretion to exempt a Hong Kong resident from the [seven-year] rule if the applicant can satisfy all [emphasis supplied] the following criteria: (i) having no or insufficient income to meet his/the family’s basic needs; (ii) having no relative or friend to turn to for assistance; (iii) no other forms of assistance being available to him/his family; (iv) having suffered a substantial and unexpected change in circumstances beyond his/her family’s control;[118] (v) having genuine difficulty in returning to his country of origin or the place where he came from; (vi) the total resources available to him/his family, including any savings and other assets held by him/his family and any CSSA payable to his family members, are not sufficient to meet his/his family’s recognised needs under the CSSA Scheme for two months.” 129. As paragraph (a) makes clear, the discretion is only intended to operate in exceptional cases and financial hardship alone generally does not qualify as “exceptional” even if the applicant is destitute. He or she must satisfy all six of the listed conditions. Two of those conditions stand out. 130. First, as we have seen, the Director has made the argument in these proceedings that, if denied CSSA, new arrivals are able to seek help from charitable institutions. If that is the view generally taken by social welfare officers, applicants for a waiver are likely to find condition (iii) – the possible availability of other forms of assistance – an important obstacle in many cases. 131. Secondly, condition (v) – refusal of a waiver if the applicant is able to return to where he or she came from – is important. Although the discretion is held out as a measure mitigating hardship caused by the seven-year residence requirement and relied on as demonstrating the proportionality of that restriction, paragraph (v) places severe limits on the discretion. It instructs social welfare officers to tell the applicant: “Go back to where you came from,” unless the applicant faces “genuine difficulty” going back. 132. I have described[119] as highly unattractive the Director’s practice of warning potential immigrants who hold OWPs (other than exempted new arrivals) to stay home and not to come to Hong Kong unless they are able to support themselves, since it contradicts avowed policies of promoting family unity for Mainland children with the right of abode; of rejuvenating our ageing population, and so forth. Condition (v) operates in the same vein. It involves abdicating responsibility for providing social welfare assistance to indigent new arrivals who have become Hong Kong residents and who are present in Hong Kong, unable to meet their basic needs, telling them that they should leave Hong Kong and go back to where they came from. A discretion that is subject to such a condition does little to establish the proportionality of the seven-year restriction of the Article 36 right. 133. The available statistics tend to confirm that the discretion plays only a small part in dealing with new arrivals who apply for CSSA but have not met the residence requirement. Only a small proportion (ranging from 2.4% to 9%) of such applicants go on to apply for a discretionary waiver. A very high proportion of those applicants (from 62% to 78%) then withdraw their applications (one assumes on being told that they do not meet the criteria), leaving a small number of live applications, most of which are then approved. The figures are as follows: 134. After the death of her husband (who left her only $982.37) and having been made homeless, Madam Kong survived by living in a shelter for street sleepers and receiving some financial help in the form of one-off payments from certain charities.[120] She was willing to work and had attended government training courses with a view to finding employment. She had found sporadic casual jobs as a cleaner (at $175 per day) and as a substitute security guard (at $200 per 12 hour shift). When she applied for a waiver, she explained that her staying at the shelter was unsatisfactory because it did not open until 5.30 pm, so that she had to sleep in a park if she had been on night shift as a security guard. She submitted that she needed CSSA to meet her housing needs “in order to have better rest before she could find stable gainful employment”. She admitted owning a property on the Mainland but explained that it was an illegal structure which was occupied by her two sons who were themselves without means, and was not a property that she could sell. 135. The Board applied the guidelines in rejecting her application. It noted that financial hardship alone does not merit exceptional treatment and found that the death of her husband did not count as a “substantial and unexpected change in circumstances beyond her control”, as she should have realised that she could not depend financially on her late husband who was an aged CSSA recipient suffering from chronic disease. It noted that she had expressed confidence in being able to find a job but concluded that after her husband’s death, as she had no relatives or friends in Hong Kong, “it would be a better alternative for Madam Kong to return to her native place”. 136. If the disposal of Madam Kong’s application is anything to go by, the guidelines result in applicants for a waiver facing a very high threshold indeed. M. Summary and conclusions 137. I have reached the conclusion that the seven-year residence requirement is an unjustifiable contravention of the right to social welfare in accordance with law, conferred by Article 36. 138. In seeking to address basic, “safety net” needs pursuant to an accessible and predictable set of administrative rules, the CSSA scheme clearly comes within the Article 36 concept of a “social welfare” scheme established “in accordance with law”. It receives Article 36 protection, and while the Government has a wide margin of discretion, both in defining the conditions and level of the benefit in the first place, and in making any changes pursuant to policies developed in accordance with Article 145, such changes are subject to constitutional review. 139. Restrictions on rights protected by Article 36 must pursue a legitimate societal aim and must be rationally connected with the achievement of that end, employing measures that do not make excessive inroads into the protected right. If the restriction is not rationally connected to the avowed legitimate purpose or if the inroads it makes into the protected right are manifestly without reasonable foundation, the Court may declare the measure unconstitutional. 140. In the present case, the Government has claimed that the seven-year residence requirement pursues the legitimate purpose of curbing expenditure so as to ensure the sustainability of the social security system. In my view that claim is not made out. The seven-year restriction conflicts with two important social policies which are simultaneously embraced by the Government, namely the OWP family reunion policy and the population policy aimed at rejuvenating our ageing population. There is no evidence as to the level of savings actually achieved and achievable as a result of adopting the seven-year rule. On the contrary, everything points to the actual savings being modest and of an order that cannot sensibly be described as designed to safeguard the system’s sustainability. The Government has indeed admitted that the new residence requirement is not driven by the need to reduce CSSA expenditure on new arrivals. 141. Other matters identified as objectives promoted by the seven-year rule include a search for uniformity in qualifying periods for heavily subsidized benefits and a policy of withholding benefits until the applicant has contributed to our economy for seven years. These are purposes that either lack legitimacy as societal aims or are wholly insubstantial in terms of societal interests. If the restriction has to rest on such purposes, it must be viewed as a restriction that is manifestly without reasonable foundation. 142. Many of the Government’s arguments seek to sidestep the issue and fail to confront the constitutional issue altogether. They abdicate responsibility for addressing the right conferred by Article 36 on Hong Kong residents to social welfare in accordance with law. They suggest that indigent newly arrived residents should look to charities rather than the social welfare system; that they should not have come here in the first place without ensuring that they could support themselves; or, if already here, that they should not receive any discretionary assistance to meet their basic needs but should go home instead. These arguments do not provide any justification for the restriction. 143. I do not doubt that the Government adopted policies genuinely with the legitimate aim of curbing expenditure on CSSA with a view to ensuring the financial sustainability of the social security system. I readily accept that it did take rational measures towards that end by reducing standard payments in 1999 in relation to larger households and reducing standard payments across-the-board in 2003 and 2004. But in my view, the Director has not made good the proposition that the seven-year residence requirement was rationally connected to the aforesaid legitimate aim. If there was any rational connection, the restriction was wholly disproportionate and manifestly without reasonable foundation, given its contradictory policy consequences and socially insubstantial benefits. 144. I accordingly conclude that the appeal must be allowed and that the seven-year residence requirement must be declared unconstitutional, restoring the pre-existing residence requirement of one year. There can, however, be no constitutional objection to the Government’s exempting new arrivals under the age of 18 from any residence requirement and the Order which I would make does not seek to re-impose a one-year residence requirement on new arrivals in that age group. It merely declares unconstitutional the policy expressed in the words “To be eligible for CSSA, a person must have been a Hong Kong resident for at least seven years” contained in the first sentence of the Order made by the Chief Executive in Council on 3 June 2003 to take effect on 1 January 2004.[121] 145. I would also make an order nisi that the Director pay Madam Kong’s costs here and below and direct that any submissions as to costs be made in writing and lodged with the Registrar within 21 days from the date of this judgment and that any submissions in reply be lodged within 21 days thereafter, in default of such submissions, the order nisi to stand as an order absolute without further order. I would order the appellant’s costs to be taxed in accordance with the Legal Aid Regulations. Mr Justice Tang PJ : 146. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Bokhary NPJ : Judicial role in regard to socio-economic rights 147. This case is about social welfare. Policy matters thereon are for the political branches of government. But there is in Hong Kong a constitutional right to social welfare. And the responsibility for enforcing constitutional rights, socio-economic ones no less than other ones, rests with the courts. In discharging this responsibility, it has to be recognized that courts are not ideally equipped to undertake resource allocation. At the same time, the courts cannot decline to intervene if the legislative (or administrative) scheme in question fails to accord people the basic necessities to which they are constitutionally entitled. The approach formed by those two propositions is one at which I arrive on principle. It is, however, worth noting that it happens to be the approach adopted by the Federal Supreme Court of Switzerland in V v. Einwohrnergemeine X und Regierunsgrat des Kantons Bern BGE/ATF 1211 1367, 27 October 1995. CSSA and the residence requirement 148. The form of social welfare concerned in the present case is Comprehensive Social Security Assistance (commonly known as “CSSA”). It is non-contributory and means-tested. Payments thereunder are made in cash. Its purpose is that of enabling recipients to meet basic needs. The scheme under which it is operated (which it is convenient to call “the CSSA scheme”) is an administrative scheme, not a statutory scheme. 149. There is a residence requirement for the receipt of assistance under the CSSA scheme. This requirement applies to adults. It is that they must have been a resident of Hong Kong for at least 7 years by the time of their application for CSSA. Question 150. Is that requirement constitutional or unconstitutional? That is the question now before this Court. The learned judges in the courts below (being Andrew Cheung J in the High Court and Stock VP and Lam and Barma JJ in the Court of Appeal) have concluded that the requirement is constitutional. Their conclusion is disputed by the appellant Madam Kong Yunming for whom Professor Johannes Chan SC and Mr Hectar Pun appear. It is supported by the respondent the Director of Social Welfare for whom Lord Pannick QC and Mr Abraham Chan appear. Such being the legal representation, the rival submissions prepared and presented have of course been of the highest quality. Facts 151. Shortly stated, the facts are these. Madam Kong was born in the Mainland in 1949. In 2003 she married a Hong Kong permanent resident. He had been a CSSA recipient since 1985. In November 2005 she was granted a one-way permit to come to Hong Kong in order to settle here. On 21 December 2005 she arrived in Hong Kong for that purpose. Tragically, her husband, who had been in ill-health, died on the following day. She tried to have herself registered as the new tenant of the public housing unit which had been allocated to him. But that was turned down. The Housing Authority repossessed the unit. She became homeless, and was admitted to a street sleeper shelter. All that she received from her late husband’s estate was a sum of $982.37. She lived on charity. 152. On 20 March 2006 she applied for CSSA. Her application was turned down on the sole ground that she did not meet the residence requirement, the Director of Social Welfare refusing to exercise his discretion to waive that requirement in her case. Her appeal to the Social Security Appeal Board against this refusal was launched in June 2006, heard in October that year and dismissed in the following month. 153. In 2008 she commenced the judicial review proceedings by which she challenged the constitutionality of the 7-year residence requirement. That is the challenge which, having failed in the courts below, has now reached this Court. The question of law on which the Appeal Committee granted Madam Kong leave to appeal to this Court is framed by reference to equality as well as the right to social welfare. 154. Cases like this one seem to be seen by some people as contests between long-term locals and Mainland arrivals. But they are not. Nor are they to be seen as contests between the “haves” and the “have-nots” in our society. Cases like this one are about – and only about – what an independent and impartial judiciary will, after receiving and weighing full and rational argument on both sides of the question, adjudge to be the true constitutional position. That, no more and no less, is what cases like this one are about. Guarantees of equality 155. Under our constitutional arrangements, equality is guaranteed by art. 25 of our constitution the Basic Law. This article provides that “[a]ll Hong Kong residents shall be equal before the law”. (As art. 24 of the Basic Law provides, Hong Kong residents consist of permanent residents and non-permanent residents: permanent residents having the right of abode and being qualified to obtain permanent identity cards which state their right of abode; and non-permanent residents being qualified to obtain identity cards but having no right of abode). 156. A constitutional guarantee of equality is also to be found in the Bill of Rights. Taken word-for-word from art. 26 of the International Covenant on Civil and Political Rights (“the ICCPR”) and entrenched by art. 39 of the Basic Law, art. 22 of the Bill of Rights provides as follows: “All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.” 157. It will be noticed at once that those guarantees of equality are not confined to permanent residents. Article 25 of the Basic Law speaks of all residents, and art. 22 of the Bill of Rights speaks of all persons. Right to social welfare 158. Turning to the right to social welfare, it, too, is not confined to permanent residents. Article 36 of the Basic Law confers this right on Hong Kong residents, not just Hong Kong permanent residents, saying this: “Hong Kong residents shall have the right to social welfare in accordance with law. The welfare benefits and retirement security of the labour force shall be protected by law.” Development and improvement 159. The development and improvement of social welfare is an obligation placed on the Government by art.145 of the Basic Law which reads: “On the basis of the previous social welfare system, the Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies on the development and improvement of this system in the light of the economic conditions and social needs.” Economic conditions and social needs 160. As can be seen, the expression “in the light of economic conditions and social needs” comes immediately after the reference to the development and improvement of the previous welfare system. I readily accept that economic and social conditions can justify slowing down or temporarily halting such development and improvement. What about new restrictions on the availability of social welfare? If the new restrictions go to undoing development and improvement introduced after the coming into effect of the Basic Law, then I think that a really serious economic downturn might justify such restrictions. Can an economic downturn justify moving the welfare systems backwards from where it had stood when the Basic Law came into effect? I would not rule that out but find it difficult to see how any economic downturn can justify such a course unless it is so dire as to bring about a situation not contemplated by the constitution. If art. 145 of the Basic Law is less protective than that, it would of little practical use. Residence requirement made seven times more restrictive 161. The CSSA scheme was introduced in 1973. From that time until 1 January 2004, the residence requirement for the receipt of CSSA was one year. The CSSA scheme with a one-year residence requirement is part of the “previous welfare system” to which art. 145 refers. That is easy to see. The Basic Law was promulgated and adopted on 4 April 1990 and came into effect upon the handover on 1 July 1997. So the CSSA system with a one-year residence requirement was in place when the Basic Law was promulgated and adopted and when it came into effect. The one-year residence requirement stood until it was turned into a seven times more restrictive requirement of 7 years’ residence with effect from 1 January 2004. That was done by an order made by the then Chief Executive in Council on 3 June 2003 following a recommendation put forward by the Task Force on Population Policy in its report of 26 February 2003. Residents and non-residents 162. Neither art. 36 nor art. 145 of the Basic law, each of which deals with the position of Hong Kong residents, was engaged in the case of Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409. That case was about the exclusion of non-resident women from receipt of subsidized obstetric services at public hospitals in Hong Kong and about increases in the charges payable by them for obstetric services at such hospitals. As can be seen from para. 90 of the judgment in that case, what was upheld was the drawing of a line between residents and non-residents. There was no question of treating non-permanent residents as outside the protection of art. 36 or 145 of the Basic Law. 163. A word should be said about art. 41 of the Basic Law, which reads: “Persons in the Hong Kong Special Administrative Region other than Hong Kong residents shall, in assistance with law, enjoy the rights and freedoms of Hong Kong residents prescribed in this Chapter”. That was not treated by the Court in Fok Chun Wa’s case to mean that every right and freedom prescribed in Chapter III of the Basic Law was enjoyed by non-residents. Article 41 of the Basic Law calls for purposeful construction in the context of the Basic Law as a whole. Upon such a construction, it will be seen at once that some Chapter III fundamentals, for example freedom from torture, must by their very nature and in conformity with international human rights norms, extend to all persons present in Hong Kong. But that is not so in regard to the right to social welfare. Unwarranted retrogression 164. Even without reference to the right to equality before the law, the requirement of 7 years’ residence for receipt of CSSA is unconstitutional. If necessary, I would be prepared so to hold on the following basis. The introduction of a 7-year requirement to replace the one-year requirement moved the previous social welfare system backwards. It therefore runs counter to art.145 of the Basic Law which, as far as that system is concerned, contemplates progression and leaves no room for retrogression except in a situation so dire as to lie beyond the contemplation of the constitution. And no such situation has arisen. So the increase from one year’s residence to 7 years’ residence amounts to unwarranted retrogression and is therefore unconstitutional. 165. But I am content to hold that increase unconstitutional on another basis, being the one to which I now turn. Unjustified distinction 166. We are in this case concerned with equality in regard to a socio-economic right. In Social Rights Jurisprudence: Emerging Trends in International and Comparative Law (ed. Malcom Langford) (2008) (Cambridge University Press) at the page immediately preceding the table of contents, what Justice Albie Sachs of the South African Constitutional Court said about socio-economic rights when speaking at the Southern Methodist University School of Law in 1999 is quoted. He said: “There is growing acceptance all over the world that certain core fundamental values of a universal character should penetrate and suffuse all governmental activity, including the furnishing of the basic conditions for a dignified life for all. I believe that 21st-century jurisprudence will focus increasingly on socio-economic rights.” I respectfully share that perception and that belief. 167. Professor Chan was in the company of Hong Kong’s leading constitutional lawyer, Professor Yash Ghai, when they said two decades ago (in The Hong Kong Bill of Rights: a Comparative Approach (eds Johannes Chan and Yash Ghai) (1993) (Butterworths Asia) at p.5) that “(i)n countries with an established tradition of constitutionalism, the rule of law is acceptable because economic and social rights are woven into the fabric of public law.” And their writings are in the company of, for example, Robert Alexander: The Voice of the People (1997) (Weidenfeld & Nicolson) where it is said at p.196 that “human rights…prevent the weakest going to the wall” and John P Humphrey: Human Rights and the United Nations (1984) (Transnational Publishers) where it is said at p.2 that “[h]uman rights without social and economic rights have little meaning for most people”. 168. Socio-economic rights are not alien to common law systems. Common lawyers may be generally more familiar with civil and political rights than with rights of a socio-economic nature. But as Professor Geraldine Van Bueren QC demonstrates in “Socio-Economic Rights and a Bill of Rights – An Overlooked British Tradition” [2013] Public Law 821, socio-economic rights, too, have historical origins that can be traced back to medieval times in the land where the common law came to life. 169. In recommending a requirement of 7 years’ residence, the Task Force on Population Policy said in para. 5.56 of its report of 26 February 2003 that: “Eligibility based on a seven-year residence requirement reflects the contribution a resident has made towards our economy over a sustained period of time in Hong Kong. A seven-year residence is also normally required for the grant of permanent resident status in Hong Kong, for which additional rights are prescribed in the laws of Hong Kong”. That is followed by a footnote which says that those additional rights include “the right to vote and to stand for election under Article 26 of the Basic Law and to become the principal officials of the HKSAR in accordance with Article 61”. Departures from equality have to be justified 170. Departures from equality have to be justified. The departure from equality brought about by the requirement of 7 years’ residence cannot be justified. Its effect – and its declared objective, too, it might be added – is essentially to draw a distinction between permanent residents and non-permanent residents in regard to the right to social welfare. This distinction is drawn in the face of a constitutional guarantee which extends to all residents without distinction. Even treating art. 145 of the Basic Law as far less protective of disadvantaged people than I consider it to be, by no standard of review, test or approach that preserves rather than undermines constitutional guarantees can such a distinction be justified. Basic Needs 171. Nothing more has to be said, but more could be said. We are, after all, concerned with basic needs. On what basis do I say that the present case concerns basic needs? I am prepared to say so on the basis that a right to social welfare, if it is to have any meaningful content, must encompass basic needs at the very least. But it is not necessary to proceed on that basis if one prefers not do so, for the Government accepts that CSSA is there to enable persons to meet their basic needs. The requirement of 7 years’ residence would leave needy members of one category of residents dependent on exercises of discretion or charity in order to meet basic needs. Whatever else the Government may be saying about Hong Kong’s resources, I do not understand the Government to be going to the extreme of saying that those resources are in a state that compels the imposition of a residence requirement of 7 years even though that has the effect of excluding non-permanent residents from the right to social welfare conferred by the constitution on all residents, permanent and non-permanent alike. 172. As to the Task Force on Population Policy’s reference to the right to become a principal official, that right depends also, as one can see from art. 61 of the Basic Law, on being a Chinese citizen with no right of abode in any foreign country. No one has suggested that it would be constitutional to make that status a condition of receipt of social welfare in Hong Kong. ICESCR 173. Even though I am of the view that Madam Kong should succeed without having to rely on the International Covenant on Economic, Social and Cultural Rights (“the ICESCR”), I propose to deal with this covenant, we having received full argument on it. 174. In 2003, which is the year before the residence requirement for the receipt of CSSA was raised from one year to 7 years, the Hong Kong Government submitted a report to the United Nations’ Committee on Economic Social and Cultural Rights (“the CESCR”) in which this was said: “It is true that there is no single law – corresponding to the Hong Kong Bill of Rights Ordinance in relation to the ICCPR that incorporates the ICESCR into Hong Kong’s domestic legal order. However, ICESCR provisions are incorporated into our domestic law through several Articles of the Basic Law (for example Articles 27, 36, 37 137, 144 and 149), and through provisions in over 50 Ordinances. Those laws were listed in Annex 3 to the initial report, and are updated at Annex 2A of the present report. We consider that specific measures of this kind more effectively protect Covenant rights than would the mere re-iteration in domestic law of the Covenant provisions themselves.” The Hong Kong Government said in Annex 2A of that report that art. 39 of the Basic Law is the constitutional guarantee for art. 2 of the ICESCR and that arts 36 and 145 of the Basic Law are the constitutional guarantees for art. 9 of the ICESCR. 175. Article 39 of the Basic Law reads: “The provisions of the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and international labour conventions as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region.” The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law. Such restrictions shall not contravene the provisions for the preceding paragraph of this Article.” It will be observed that this article, too, speaks of residents and not only of permanent residents. 176. Turning to the two articles of the ICESCR which the Hong Kong Government told the CESCR are constitutionally guaranteed in Hong Kong, art. 2 reads: “Each State Party to the present Covenant undertakes to take steps, individually and through international assistance and co-operation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means, including particularly the adoption of legislative measures.” And art. 9 reads: “The States Parties to the present Covenant recognize the right of everyone to social security, including social insurance.” What the CESCR said 177. Now let us look at what the CESCR said about CSSA in general and the 7-year residence requirement in particular. That was said on 13 May 2005 in the CESCR’s concluding observations on economic, social and cultural rights in the People’s Republic of China (including Hong Kong and Macao) for which the reference is UN Doc E/C. 12/1/Add.107, §84. And this is what was said: “The Committee is seriously concerned that under the existing social security system, and in particular under the Comprehensive Social Security Assistance (CSSA), the levels of benefit are not sufficient to guarantee a decent standard of living and the many low-income persons, in particular older persons, are not covered by the scheme. The Committee is further concerned that new migrants are unable to apply for CSSA due to the seven-year residence requirement.” 178. Coming from no less a source than the CESCR, none of that is anything that an international financial centre (as Hong Kong is recognized in art. 109 of the Basic Law to be) can feel comfortable to read about itself. However that may be, the sufficiency or otherwise of benefit levels is not before the Court in this appeal. But what the CESCR says about the 7-year residence requirement’s adverse effect on new migrants is directly relevant in the present appeal, because it highlights the fact that the requirement excludes for a long time a large class which the relevant constitutional guarantees do not exclude at all. Retrogressive in regard to basic needs and deliberately so 179. Such exclusion is retrogressive. What makes it all the more serious is that it is retrogressive in regard to basic needs and deliberately so. In this connection, it is to be remembered that the CESCR had, on 14 December 1990, said this in its General Comment No.3, the reference for which is UN Doc E/1991/23, §9: “The principal obligation of result reflected in article 2 (1) is to take steps “with a view to achieving progressively the full realization of the rights recognized” in the Covenant. The term “progressive realization” is often used to describe the intent of this phrase. The concept of progressive realization constitutes a recognition of the fact that full realization of all economic, social and cultural rights will generally not be able to be achieved in a short period of time. In this sense the obligation differs significantly from that contained in article 2 of the International Covenant on Civil and Political Rights which embodies an immediate obligation to respect and ensure all of the relevant rights. Nevertheless, the fact that realization over time, or in other words progressively, is foreseen under the Covenant should not be misinterpreted as depriving the obligation of all meaningful content. It is on the one hand a necessary flexibility device, reflecting the realities of the real world and the difficulties involved for any country in ensuring full realization of economic, social and cultural rights. On the other hand, the phrase must be read in the light of the overall objective, indeed the raison d’être, of the Covenant which is to establish clear obligations for States parties in respect of the full realization of the rights in question. It thus imposes an obligation to move as expeditiously and effectively as possible towards that goal. Moreover, any deliberately retrogressive measures in that regard would require the most careful consideration and would need to be fully justified by reference to the totality of the rights provided for in the Covenant and in the context of the full use of the maximum available resources.” 180. Much the same point is made in, for example, Sandra Liebenberg, “Needs, Rights and Transformation: Adjudicating Social Rights” (2006) 17 Stellenbosch Law Review 5 and Aoife Nolan, Bruce Proter and Malcolm Langford, “The Justifiability of Social and Economic Rights: an Updated Appraisal” CHRGJ Working Paper No. 15, 2007. In the “Right to Welfare” chapter of Law of the Hong Kong Constitution (eds Johannes Chan and C L Lim) (2011) (Sweet & Maxwell) – a book cited by Lord Pannick in the course of argument (although not on this point) – Professor Karen Kong put it like this (at p.798, para 25.040): “As suggested by Sandra Leibenberg in relation to South African court’s adjudication of social rights, ‘claims involving a deprivation of basic needs should attract a high level of judicial scrutiny’. Aoife Nolan et al. also commented, ‘[i]n general, Government will be held to a stricter test in relation to available resources when existing programs are cut than they might be with regard to a simple failure to take positive steps to create programs or enhance them.’ The stricter test will include imposing a heavier burden on the Government to justify potentially retrogressive measures, and the need to show that alternative measures had been carefully considered.” Discretion 181. In seeking to justify the raising of the residence requirement from one year to 7 years, the Government places some reliance on the Director of Social Welfare’s discretion to waive the residence requirement. A discretion to waive is also a discretion not to waive. It is not suggested that the discretion would invariably, or even generally, be exercised in favour of any person who, absent a waiver, would be driven to seeking charity in order to meet her or his basic needs. 182. There is in any event, an inherent and fundamental weakness in the Government’s “discretion” argument. As Lord Shaw of Dunfermline said in Scott v. Scott [1913] AC 417 at p 477, to remit the maintenance of a constitutional right to the region of discretion is to shift the foundations “from the rock to the sand”. Other benefits 183. Then the Government places some reliance such other welfare benefits as a needy person who is excluded from the CSSA scheme for want of 7 years’ residence, and who fails to obtain a discretionary waiver, might be able to obtain. But since CSSA is designed to meet basic needs, what can such other benefits really do, even if obtained, in the absence of CSSA? Charity 184. And then the Government places some reliance on such charity as such a person may be able to obtain. As to that sort of argument, there is the decision of the South African Constitutional Court in the case of Khosa v. Minister of Social Development 2004 (6) 505. At para. 80 Mokgoro J spoke of the likely impact on a group of persons excluded from the constitutional right to social security. He said that such exclusion “is likely to have a severe impact on the dignity of the persons concerned, who, unable to sustain themselves, have to turn to others to enable them to meet the necessities of life and are thus cast in the role of supplicants”. That reflects the classic view. In the concluding section of the chapter on “Rights, Freedoms and Social Policies” of his book Hong Kong’s New Constitutional Order, 2nd ed (1997) (Hong Kong University Press), Professor Yash Ghai quotes (at p.454) Alexis de Tocqueville’s statement that: “There is nothing which, generally speaking, elevates and sustains the human spirit more than the idea of rights. There is something great and virile in the idea of rights which removes from any request its suppliant character, and places the one who claims it on the same level as the one who grants it.” Not proportionate 185. A decrease in expenditure on the CSSA scheme is a lawful objective. But just because it is legitimate to do something, it does not mean that whatever is done will be legitimate. The raising of the residence requirement from one-year to 7 years, putting the burden of that increase on immigrants so as in effect to exclude non-permanent residents from the right to social welfare conferred by the constitution on all residents without distinction has not been shown to be a proportionate means by which to obtain that objective. Conclusion 186. The one-year residence requirement was part of the previous system on the basis of which art. 145 of the Basic Law required the Government to formulate its policies for the development and improvement of social welfare in the light of economic conditions and social needs. We have not been asked to hold that the residence requirement of one year had also been unconstitutional, and I see no reason to do so. The raising of the residential requirement from one year to 7 years, however, is, in my judgment, unconstitutional for the reasons which I have given. I would allow this appeal to declare that rise unconstitutional. 187. As to costs, I would order legal taxation of Madam Kong’s own costs. I would make an order nisi awarding her costs here and in the courts below, such order to become absolute 21 days after the handing down of judgment in this appeal unless an application has been made to vary that order. And I would direct that in the event of such an application, costs he dealt with on written submissions lodged according to a time-table for which the parties, if not agreed thereon, should seek procedural directions from the Registrar. 188. I end by thanking both legal teams for the excellent arguments prepared and presented. Lord Phillips of Worth Matravers NPJ : 189. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma : 190. By a unanimous decision, this appeal is allowed. The Court also makes the declaration referred to in paragraph 144 above and makes the orders as to costs set out in paragraph 145 above. Mr Johannes Chan SC and Mr Hectar Pun instructed by Tang, Wong & Chow and assigned by the Legal Aid Department, for the Appellant Lord Pannick QC and Mr Abraham Chan instructed by the Department of Justice, for the Respondent [1] She was duly issued with a Hong Kong Identity Card on 28 December 2005. [2] All set out in Section D of this judgment. [3] [2009] 4 HKLRD 382. [4] Stock VP, Lam and Barma JJ, cacv 185/2009 (17 February 2012). [5] Legco Brief, 3 June 2003, HWF CR/3/4821/99(03) Pt 7, §3. [6] Ibid, Annex C, §1. [7] Principal Assistant Secretary for Labour and Welfare (Welfare) 4 of the Labour and Welfare Bureau, Affirmation 8 January 2009 (“Mr Cheung’s Affirmation”), §16. [8] Legco Brief, 3 June 2003, Annex C, §5. [9] Mr Cheung’s Affirmation, §41. [10] Ibid, §23. [11] Ibid, §24. [12] XCC (70) 14, For discussion on 17 March 1970. [13] Exco Memo, 11 March 1970, §7. [14] Principal Assistant Secretary for Labour and Welfare (Welfare) 4 of the Labour and Welfare Bureau, Affirmation 19 January 2011 (“Ms Choy’s Affirmation”), §12. [15] Reflecting Article 26 of the International Covenant on Civil and Political Rights. [16] With Mr Hectar Pun. [17] With Social Security Allowance or “SSA” which provides largely non-means-tested allowances for the severely disabled and the elderly: Mr Cheung’s Affirmation §7(b). [18] Mr Cheung’s Affirmation, §7. [19] Court of Appeal §50 and §69. [20] Court of Appeal §53. [21] Court of Appeal §§55-60. [22] Court of Appeal §§61-65. [23] Court of Appeal §68. [24] Court of Appeal §72. [25] Ibid. [26] In Section E.1. [27] With Mr Abraham Chan. [28] Ubamaka Edward Wilson v Secretary for Security FACV 15/2011 (21 December 2012), involving for example, the prohibition of torture and of cruel, inhuman or degrading treatment. [29] See for instance Catholic Diocese of Hong Kong v Secretary for Justice (2011) 14 HKCFAR 754 at §65-§66. [30] See for example, HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at §§36-44 on how the proportionality test operates. [31] As in Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229. [32] As in HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574; and HKSAR v Ng Po On (2008) 11 HKCFAR 91. [33] As in Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335 at §§19-22; Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 at §§77-78. [34] (2012) 15 HKCFAR 409 at §66. [35] Ibid at §§71 and 76. [36] The Strasbourg and United Kingdom case-law is reviewed in Humphreys v Revenue and Customs Commissioners [2012] 1 WLR 1545 at §§16-22. [37] Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 at §63. [38] Ibid at §72. [39] I have eliminated the words “and have resided in Hong Kong continuously for at least one year immediately before the date of application (absence from Hong Kong up to a maximum of 56 days during the one-year period is treated as residents in Hong Kong)” from the Order since the constitutionality of that additional requirement was successfully challenged and not made the subject of an appeal by the Director: see Yao Man Fai George v The Director of Social Welfare CACV 153/2010 (17 February 2012) decided simultaneously with the present case by the Court of Appeal. [40] The words in square brackets replace wording which had also referred to the condition of residence one year immediately before application. [41] Provided that the adult residents had been here for at least one year. [42] In Section L.4 below. [43] Mr Cheung’s Affirmation, §45. It was endorsed by Finance Committee on 27 June 2003: Ms Choy’s Affirmation, §39. [44] LC Paper No CB(2)1616/03-04(02), §11. Repeated in LC Paper No CB(2)1616/03-04(03), §2. [45] Judgment §123. [46] Court of Appeal §108. [47] At §§52-54. [48] Mr Cheung’s Affirmation, §55. [49] In Sections K and L below. [50] At §§3.25 and 3.26. [51] Children issued with a Certificate of Entitlement showing that they are in principle entitled to right of abode and the status of a Hong Kong permanent resident. [52] At §2.17. [53] Ibid. [54] It had been 75 in 1982, 105 in 1993 and became 150 in 1995. [55] Task Force Report, Summary of Recommendations, §8. [56] Ibid, §9. [57] Task Force Report, §2.21 [58] LC Paper No CB(2)1401/03-03(03), §24. [59] Ibid. [60] At §2.27. [61] Minutes Welfare Panel Meeting on 10 March 2003, LC Paper No CB(2)1738/02-03, §13. [62] At p ix. [63] In Section L.3 below. [64] Minutes Welfare Panel Meeting on 10 March 2003, LC Paper No CB(2)1738/02-03, §14. [65] LC Paper No CB(2)871/07-08, 23 January 2008. [66] Task Force Report, Summary of Recommendations, §§4 and 5. [67] At §§3.6 and 3.7. [68] Task Force Report §2.17. [69] Task Force Report §5.3. [70] At §5.4. [71] Of 69,345 new arrival CSSA recipients as at the end of December 2002, 6.8% were aged 60 and above: Mr Cheung’s Affirmation, §53. [72] LC Paper No CB(2)1401/02-03(03), §28 for discussion 10 March 2003. It is paid to persons aged 65 – 69 subject to a means test, and to persons aged 70 and above without means testing. Legco Brief HWF CR/3/4821/99(03) Pt 7, §6. [73] Executive Summary, §3. [74] Executive Summary, §§4 and 5. [75] Report, §47. [76] Report §49. [77] Executive Summary, §22. [78] Mr Cheung’s Affirmation, §40; Legco Brief HWF CR 2/4821/58 (03) Pt 68, §11, 25 February 2003. [79] Legco Brief HWF CR 2/4821/58 (03) Pt 68, 25 February 2003, §1. [80] Ibid, §2. [81] Ibid, §5. [82] Social Security Assistance Index of Prices. [83] Legco Brief HWF CR 2/4821/58 (03) Pt 68, §4, 25 February 2003. [84] Ibid, §6. [85] Mr Cheung’s Affirmation, §8 and §9. [86] Mr Cheung’s Affirmation, §53. [87] Mr Cheung’s Affirmation, §58. [88] Minutes of Welfare Panel meeting on 10 March 2003, LC Paper No CB(2)1738/02-03, §7. [89] LC Paper No CB(2)1401/02-03(03), for discussion 10 March 2003, Tables 1 and 4. [90] In Section F of this judgment. [91] LC Paper No CB(2)834/03-04(02)(Revised), §§8-9. [92] At §5.55. [93] Task Force Report, §5.56. [94] Adopted by Mr Cheung in his Affirmation at §55. [95] Basic Law Article 26. [96] Basic Law Article 44. [97] Basic Law Article 55. [98] Basic Law Article 67. [99] Task Force Report §5.56, adopted in Mr Cheung’s Affirmation, §55. [100] LC Paper No CB(2)1401/02-03(03), §24 for discussion 10 March 2003. [101] Section J.1 above. [102] December 1998 Report at §48. [103] At §§55 and 56. [104] Mr Cheung’s Affirmation, §55. [105] Available online at http://www.try.gov.hk/internet/eharch_annual.html. [106] Comprising taxes, rates and duties; rental income; fees and charges; utilities; royalties and concessions; and other operating revenue. [107] The Exchange Fund’s results formed part of the category of non-operating revenue/expenses which also included capital expenses; land premia; net revenue from Home Ownership Scheme; interest and investment income; actuarial loss and curtailment loss on pensions; share of profits and losses of government business enterprises. [108] Comprising salaries, allowances and other employee benefits; recurrent subventions; social security payments; depreciation and other operating expenses. [109] Ms Choy’s Affirmation, §§40-45. [110] FCR (2003-04)33, for discussion on 27 June 2003, §17. [111] LC Paper No CB(2)1401/03-03(03) for discussion 10 March 2003, §27. [112] Minutes Welfare Panel Meeting on 10 March 2003, LC Paper No CB(2)1738/02-03, §14. [113] LC Paper No CB(2)1616/03-04(03), §17. [114] XCC (70) 14, For discussion on 17 March 1970, §5(f). [115] Mr Cheung’s Affirmation, §59. [116] Task Force Report, §5.57. [117] In the Social Security Manual of Procedures, paragraphs C52 and C53. [118] Failure to find or keep employment not usually being regarded as such. [119] In Section L.1 above. [120] She received $3,200 from the Rainbow Fund, $2,100 from the Apple Fund. [121] Set out in Section F above.
Chief Justice Ma: 1. I agree with the judgment of 	Lord Hoffmann NPJ. Mr Justice Chan PJ: 2. I agree with the judgment of Lord Hoffmann NPJ. Mr Justice Ribeiro PJ: 3. I agree with the judgment of Lord Hoffmann NPJ. Mr Justice Bokhary NPJ : 4. I agree with the judgment of Lord Hoffmann NPJ. Lord Hoffmann NPJ : 5. The appellants are a New York hedge fund called Tiger Asia Management LCC and three of its officers. Nothing turns upon their separate identities and I shall call them all “Tiger”. The respondent is the Securities and Futures Commission (“SFC”) which alleges that in December 2008 and January 2009 Tiger entered into three transactions which contravened the prohibition on insider dealing in s 291(5) of the Securities and Futures Ordinance (“the Ordinance”). On 5 August 2009 it applied to the Court of First Instance for various forms of relief against Tiger, pursuant to s 213 of the Ordinance. I quote the relevant parts of subs (1): “(1) Where - (a) a person has (i) contravened – (A) any of the relevant provisions [which include section 291(5)] the Court of First Instance, on the application of the [SFC] may, subject to subsection (4), make one or more of the orders specified in subsection (2).” 6. Subsection (2) contains a list of the classes of orders which can be made, including injunctions, orders requiring transactions to be undone, orders declaring contracts to be void and so on. Subsection (4) says that before making an order under s (1), the Court of First Instance must satisfy itself that “it is desirable that the order be made, and that the order will not unfairly prejudice any person”. 7. The SFC asserts that (a) Tiger has contravened s 291(5); (b) the orders it seeks fall within the classes listed in subs (2); and (c) it can satisfy the Court of the requirements of subs (4). 8. Whether any of these assertions is correct has not yet been investigated because on 20 September 2010 Tiger issued a summons to strike out the SFC’s proceedings on the ground that the Court of First Instance has no jurisdiction to decide the question which is a necessary condition for making any order under s 213(1)(a)(i)(A), namely, whether Tiger has contravened s 291(5). This is, at first sight, a somewhat startling proposition, because ordinarily, if a power conferred upon a court is expressed to be conditional upon something having happened, the court has jurisdiction to decide whether it happened or not. It was however accepted by Harris J. The Court of Appeal (Tang VP, Kwan and Fok JJA) took a different view and Tiger now appeals to this Court. 9. It should be emphasised that although s 213 also confers jurisdiction to make orders (subject to the overriding requirements of desirability and lack of prejudice in subs (4)), on the ground that it “appears” to the SFC that a contravention may have occurred, this is not an issue in the present appeal. The question for us is whether the SFC should be allowed to prove that Tiger actually engaged in insider dealing. 10. I entirely agree with the reasoning and conclusions of Tang VP, who gave the judgment of the Court of Appeal, and would have been content simply to adopt his opinion as my own. However, out of respect for the gallant submissions of Lord Grabiner QC, who undertook the appeal on behalf of Tiger, I shall add some further observations. 11. Tiger’s argument is founded upon the fact that the Ordinance creates what has been called a “dual procedure” for penalizing various forms of market misconduct, including insider dealing. One route is a criminal prosecution under Part XIV of the Ordinance, either brought on indictment by the Secretary for Justice or summarily by the SFC itself. On conviction on indictment, the offender may be sentenced to imprisonment for up to 10 years or a fine of up to $10 million. The other route is civil proceedings under Part XIII before the Market Misconduct Tribunal (“MMT”). The Tribunal’s functions include determining whether any market misconduct has taken place and the identity of any person who has engaged in it: s 252(3). A person identified as having engaged in market misconduct may be subjected to various civil penalties listed in s 257(1), such as disqualification from being a director of a listed company, disqualification from dealing in securities for up to 5 years, payment to the Government of the profit gained or loss avoided by the market misconduct, payment of the costs of the investigation and a recommendation that he or she be disciplined by the appropriate professional body. 12. Tiger points out that these two procedures, criminal and civil, are mutually exclusive. If criminal proceedings have been instituted, no proceedings may be brought before the MMT: s 283. Conversely, if proceedings have been started before the MMT, the defendant may not thereafter be prosecuted: s 307. 13. So far, so good. The difficulty for Tiger, and Lord Grabiner QC, comes at the next step, which is to argue that because, in this case, a prosecution of Tiger under Part XIV or proceedings before the MMT under Part XIII would each involve a determination of whether it had contravened the prohibition on insider dealing and because the two procedures are mutually exclusive, it must mean that they are jointly exhaustive of the procedures by which such a determination may be made. That simply does not follow. Whether there are other provisions in the Ordinance which also confer jurisdiction to make such a determination depends upon the construction of those provisions. 14. Thus Lord Grabiner QC accepts that s 305(1), which confers a right to sue for damages upon a person who has suffered loss as a result of a contravention of the market misconduct provisions of Part XIV, confers jurisdiction upon the Court to decide whether a contravention has taken place. If that is true for s 305(1), why not for s 213? In s 305(6) to (8) it is provided that a finding of market misconduct by the MMT is admissible and prima facie evidence in a private action for damages under subs (1). But there is nothing to say that, in the absence of such a finding, no action may be brought. Lord Grabiner QC points to s 305(4), which says that an action for damages may be brought under subs (1) “even though the person against whom the action is brought has not been charged with or convicted of an offence by reason of the contravention”. There is, he says, no such saving provision in s 213. I must admit that I find subs (4) rather puzzling. There was a similar provision in s 141(2) of the Securities Ordinance 1974, when there could have been no question of displacing an exhaustive “dual procedure”: see paras 19 to 21 below. There is no general rule that the exercise of a right of action for loss caused by a criminal act is dependent upon there having been a prosecution. Even without subs (4), I do not see how any such limitation could have been implied. Perhaps it was a rusty weapon in the draftsman’s armoury which used to be employed to counter the obsolete rule that a private law action for damages based upon a felonious act was not maintainable so long as the defendant had not been prosecuted or a reasonable excuse shown for his not having been prosecuted: see Smith v Selwyn [1914] 3 KB 98. Legislative draftsmen tend to be vigilant to guard against all contingencies. If that is the explanation for subs (4) (and I can think of no other), it would not feature in s 213 because that section is concerned with proceedings by a public authority and not a private law action for damages. Section 305 therefore in my opinion contradicts the theory that prosecution or MMT proceedings are the exhaustive means for determining whether there has been a contravention. 15. Approaching s 213(1) simply as a matter of construction, Lord Grabiner QC’s submission requires us to construe the words “where a person has contravened any of the relevant provisions” as meaning “where a person has been found by a criminal court or the MMT to have contravened any of the relevant provisions”. There seems to me no basis for the insertion of these words. As Tang VP said, if that was what was meant, the legislature would have said so. As against the plain meaning of the words, Lord Grabiner QC advances arguments from a priori incredulity. It is inconceivable, he says, that the legislature would have given the SFC power to avoid, sidestep, finesse, evade and set at naught all the protection accorded to defendants in the criminal courts or the MMT by simply going to the Court of First Instance under s 213. Only the Secretary for Justice, who will independently review the merits of a prosecution, can bring criminal proceedings on indictment and Tiger will have the full panoply of protection accorded to a criminal defendant. On the other hand, in proceedings under s 213, the SFC is subject to no review, can use evidence obtained from defendants under statutory compulsion and does not have to satisfy the criminal standard of proof. In proceedings before the MMT there are fewer protective rules but the sanctions which can be imposed are limited. Furthermore, such proceedings will exclude the possibility of a criminal prosecution, which proceedings under s 213 will not. 16. The answer to these arguments is that the remedies provided under s 213 serve a different purpose from the penalties which can be imposed by a criminal court or the MMT. The latter are imposed in the general public interest, avowedly to punish in the case of criminal sanctions and, in the case of the MMT, as near as one can get to punishments without running the risk of the proceedings being categorized as criminal for the purposes of arts 10 and 11 of the Bill of Rights: see Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170. Section 213, on the other hand, provides remedies for the benefit of parties involved in the impugned transactions. They include injunctions and the appointment of receivers to secure property with a view to recovery by the victims of market misconduct, orders that particular transactions be unwound, orders declaring particular transactions to be void or voidable. In these proceedings the SFC acts not as a prosecutor in the general public interest but as protector of the collective interests of the persons dealing in the market who have been injured by market misconduct. Proceedings under s 213 are the public law analogue of actions for damages by individuals under s 305 rather than a substitute for a criminal prosecution or proceedings before the MMT. They are plainly civil proceedings and therefore do not attract the protection accorded to criminal defendants. 17. Some of the orders sought by the SFC include declarations that Tiger has contravened the prohibition on insider dealing. That, said Lord Grabiner QC, is unacceptable on two grounds. First, (e) is the only paragraph of s 213(2) which gives a power to make a declaration. It says that the court can declare a contract to be void. It therefore follows that no other kind of declaration can be made. This is not a point which arises at the moment, since we are concerned with jurisdiction rather than the form of the orders that can be made. But I will say that arguments of this expressio unius variety are often unpersuasive (compare National Grid Co plc v Mayes [2001] 1 WLR 864, 878) and I find it hard to see why, if a court has found something to be the case, it should not make a declaration to that effect if it would be appropriate and useful to do so. The second objection was that a civil court should only in exceptional circumstances make a declaration that certain conduct is or is not (or will or will not be) a criminal offence. He referred us to the well-known observations of Viscount Dilhorne in Imperial Tobacco Ltd v Attorney-General [1981] AC 718, 742. But that is to misunderstand the principle stated in that case. Imperial Tobacco was asking for a declaration that promoting their Spot Cash scheme would not be a criminal offence, for the purpose of forestalling a prosecution or guiding a judge or magistrate at a criminal trial. But the SFC is not seeking a declaration that Tiger has committed a criminal offence. It is seeking a declaration that it has done acts which found jurisdiction under s 213 but which also happen to be criminal offences. The question of whether Tiger has committed a criminal offence remains entirely a matter for the criminal court. There is no question of the civil court’s declaration being admitted or in any way influencing a criminal trial. If there were a prospect of such a trial, the court would have jurisdiction to put in place protective measures to ensure that publication of materials arising in the civil proceedings did not prejudice the accused. The effect of a declaration by the Court of First Instance under s 213 that Tiger has contravened the prohibition on insider dealing is therefore no different from a finding by a civil court that Tiger is liable on the same grounds for damages under s 305. 18. Lord Grabiner QC says that in that case, there is a danger of inconsistent decisions. The Court of First Instance may find a contravention under s 213 but the criminal court, or even the MMC, might find no such contravention proved. That is true. These things happen. A jury acquitted O J Simpson of the murder of his girl friend but he was found liable in civil proceedings for wrongfully causing her death. Inconsistency is always a possibility when different tribunals have jurisdiction to decide the same issue. But that is no reason to say, in the face of plain contrary language, that the legislature must have intended to confer jurisdiction upon only one tribunal. 19. Finally, I should say something about the legislative history, which Mr Benjamin Yu SC, on behalf of the SFC, has set out in his printed case. Section 213 can trace its origins back to the Securities Ordinance 1974, which provided that certain forms of market misconduct were to be criminal offences. Section 141 was the equivalent of s 305 of the current Ordinance, giving a right to sue for damages for contraventions of the market misconduct provisions. And s 144 provided: “Where, on the application of the Commissioner [for Securities], it appears to the Court that a person has contravened this Ordinance … the Court may, without prejudice to any orders it would be entitled to make otherwise than pursuant to this section, make one or more of the following orders …” 20. There followed a list of orders, such as injunctions, the appointment of a receiver and a declaration that a contract relating to securities is void or voidable, all of which are now contained in s 213. At that time there was no MMT. The only remedies for market misconduct were a criminal prosecution, a civil claim for damages or proceedings under s 144. There would have been no room for the “dual procedure” argument and I should have thought it was impossible to argue that no proceedings could be taken under s 144 until there had been a criminal conviction. 21. Similar powers were later created by s 55(1) of the Securities and Futures Commission Ordinance of 1989 and s 13 of the Leveraged Foreign Exchange Trading Ordinance of 1994. All this piece meal legislation which governed different forms of financial market trading was brought together in the current Ordinance, with s 213 being an improved and enlarged version of a jurisdiction which had existed since 1974. At the same time, in recognition of the fact that criminal prosecutions for market misconduct are often dilatory, expensive and unpredictable, the Ordinance created the alternative of proceedings before the MMT. I find it hard to see why this should impliedly have restricted a jurisdiction that had existed under the previous versions of s 213. The two jurisdictions seem to me entirely unconnected. 22. In SFC v C [2009] 4 HKLRD 315 the question was whether an injunction under s 213(2)(c) was, like a Mareva injunction, ancillary to a substantive claim such as a claim before the MMT for disgorgement of profits, or whether it was “free-standing”. Le Pichon JA said: “… relief under section 213(2) is entirely free-standing and is not contingent or conditional on there being proceedings in the Market Misconduct Tribunal. Further, while an order under section 213(2)(c) is not an end in itself in that, sooner or later, the assets frozen will have to be dealt with, subsection (9) enables the court ‘to reverse, vary or discharge’ such an order. Thus, the relief sought in section 213 proceedings is entirely self-contained.” 23. Harris J said that Le Pichon JA was not directly addressing the point arising before him, but that if “free-standing” and “self-contained” implied that the SFC could take proceedings under s 213 without there having been any prosecution or MMT proceedings, he did not agree. It is true that Le Pichon JA (who was very familiar with this legislation and its predecessors, having been Deputy Chief Counsel to the SFC before her appointment as a judge) was not dealing with the submission made by Tiger in this appeal. But I think it necessarily follows from her reasoning that she would have rejected it. In fact she would probably have been astonished to hear the argument advanced. I think she was right. For these reasons I agreed that we should dismiss these appeals with costs. Chief Justice Ma: 24. At the conclusions of submissions made on behalf of the appellants (the 1st to 4th respondents in the underlying proceedings), the Court dismissed the appeals with costs. I agree with the reasons for doing so contained in the judgment of Lord Hoffmann NPJ. Lord Anthony Grabiner QC, Mr Charles Sussex SC and Mr William Wong, instructed by Allen & Overy, for the 4th defendant/appellant in FACV 10/2012 Lord Anthony Grabiner QC, Mr Charles Sussex SC and Mr William Wong, instructed by Reed Smith Richards Butler, for the 2nd defendant/appellant in FACV 11/2012 Lord Anthony Grabiner QC, Mr Charles Sussex SC and Mr William Wong, instructed by Robertsons, for the 3rd defendant/appellant in FACV 12/2012 Lord Anthony Grabiner QC, Mr Charles Sussex SC and Mr William Wong, instructed by Sidley Austin, for the 1st defendant/appellant in FACV 13/2012 Mr Benjamin Yu SC and Mr Roger Beresford, instructed by Securities & Futures Commission, for the respondent
Chief Justice Ma and Lord Millett NPJ: A. INTRODUCTION 1. This is an appeal by the petitioner, the widow and personal representative of the estate of the late Kam Kwan Sing (“the deceased”), from the judgment dated 6 March 2014 of the Court of Appeal (Lam VP, Kwan and Barma JJA) dismissing her appeal from the judgment of the trial judge (Harris J) dated 31 October 2012.[1] The trial judge had dismissed on jurisdictional grounds the petition which the deceased had brought in respect of Yung Kee Holdings Limited (“the Company”), the fifth respondent in these proceedings. In the petition, the deceased alleged that the affairs of the Company were being carried on in a manner which was unfairly prejudicial towards him and sought an order pursuant to s 168A of the Companies Ordinance (Cap 32)[2] for his younger brother Kam Kwan Lai, the first respondent (“Kwan Lai”), to buy his shares in the Company. In the alternative, and relying on substantially the same matters, he sought an order that the Company be wound up on the just and equitable ground under s 327(3)(c) of the Ordinance.[3] The complaints made by the deceased in the petition were directed at Kwan Lai. The principal adversaries in the petition have been the deceased on the one side, and Kwan Lai and his son Kam Lin Wang, Carrel (“Carrel”), the second respondent, on the other. There was a third brother, Kam Kwan Ki (“Kwan Ki”) who died in 2007. There is also a sister, Kelly Kam (“Kelly”). Like Kwan Ki, Kelly’s involvement in the present litigation is minimal. 2. At one stage, the two brothers had agreed in principle that one of them should buy the other’s shares, but they could not agree a price and their attempts to mediate proved unsuccessful. Instead of referring the valuation of the Company to an agreed valuer or to arbitration, which would have been the sensible course, the parties resorted to litigation. At the trial the primary remedy sought by the deceased was an order under s 168A that Kwan Lai should buy his shares in the Company or vice-versa; in the alternative he asked for the Company to be wound up as a precaution in case the court should find that it had no jurisdiction to make such an order, in which case a winding up order would be the only remedy available to him in Hong Kong.[4] Before the Court of Appeal and this Court, however, the petitioner has made a winding up order her first choice. 3. The Company is incorporated in the British Virgin Islands (“BVI”) with its registered office in Tortola. The trial judge held that (1) the court did not have jurisdiction to make an order under s 168A and (2) that the Company’s connection with Hong Kong was not sufficiently strong to justify it in exercising its jurisdiction to make a winding up order under s 327(3)(c). However, notwithstanding these conclusions, the judge nevertheless heard evidence and argument on the substantive merits of the petition and found that the affairs of the Company had been carried on in a manner that was unfairly prejudicial to the deceased. Accordingly, if he had been wrong as to jurisdiction, he thought it would have been appropriate to make an order under s 168A for the deceased’s shares to be bought by Kwan Lai. The Court of Appeal affirmed the judge’s rulings in relation to both s 168A and s 327(3)(c) but, while recognising that its comments were obiter, rejected the judge’s conclusion that the affairs of the Company had been conducted in a manner prejudicial to the deceased. Like the lower courts, this Court must first consider whether it was open to the court to hear the petition under s 168A or s 327(3)(c) before considering the merits of the petitioner’s complaints. 4. As noted earlier, the deceased died after the conclusion of the trial and shortly before the judge gave judgment. We shall deal further with the impact of this when considering the question of whether it would be just and equitable to wind up the Company. B. THE COMPANY B.1 Background 5. The Company was incorporated in 1994 in the BVI as the ultimate holding company of a group of companies.[5] Although described by the courts below as “a passive investment company” this is potentially misleading unless the emphasis is on “passive”. The Company does not carry on an investment or any other business; its sole function is that of a holding company. As the parties agreed, “it carries on no business in its own right” or, we should add, of any kind, whether in its own right or not. It has no employees and no bank account; its only asset consists of the shares in its wholly owned subsidiary; its only income consists of dividends distributed directly to its shareholders by its wholly owned subsidiary on its behalf; and it has never played any part in the business or operations of the group of which it is the ultimate holding company. 6. The history and structure of the group is set out in the judgments below and it is not necessary to repeat it at length. The group’s business as operated through the group companies comprises a core restaurant business represented by the Yung Kee Restaurant now on Wellington Street (“the Restaurant”), associated businesses and also includes the ownership of various properties. The founder of this business was the late Kam Shui Fai (“Kam Senior” as he has been called in the courts below). Originating from a cooked food stall in Kwong Yuen West Street (in Sheung Wan) in the 1930s, the Restaurant came into existence in 1942 located at Wing Lok Street, eventually moving to Wellington Street in 1964 at a location purchased by Kam Senior. By the 1970s a new building had been constructed and the Restaurant commenced business at its current location in 1977. In the 1970s, the business developed a corporate structure. In 1973, the restaurant business and assets were transferred to a company called Yung Kee Restaurant Ltd. (“YK Restaurant”). This company was succeeded in 1994 by Yung Kee Restaurant Group Ltd (“YKRG”), which now runs the restaurant business. Other group companies run other aspects of the group’s business. 7. Kam Senior passed away in December 2004. In 1990, some years before his death, on financial advice and with a view to avoiding estate duty, which was payable exclusively on assets situate in Hong Kong, he took steps, which included the incorporation of the Company in the BVI, to create a corporate structure which would place the family’s shareholdings outside Hong Kong. A company, Long Yau Limited (“Long Yau”) was incorporated in 1990 in the BVI. The majority shareholdings in each company, including YK Restaurant, were transferred into a unit-trust,[6] of which Long Yau was the trustee. In 2006, estate duty in Hong Kong was abolished, and the unit trust was wound up in April 2009. Following this, Long Yau became the majority shareholder of the various group companies (the shareholdings being formerly held by the unit trust). The Company thus became the ultimate holding company as it was the sole shareholder of Long Yau. 8. The Company’s share capital consists of 20 ordinary shares. On the termination of the Long Yau Unit Trust and the distribution of its assets in April 2009 to Long Yau, the shares were held as follows: 7 shares (35%) by the deceased; 9 shares (45%) by Kwan Lai either directly or through his company Legco Inc.[7], the third respondent; 2 shares (10%) by Madam Mak, the widow of Kam Senior and mother of the deceased and Kwan Lai; 2 shares (10%) by Everway Holdings Ltd., the fourth respondent, which is wholly owned by Kelly (“Everway”). 9. In the following month Madam Mak transferred her two shares to the deceased in order to equalise the brothers’ shares. The shareholdings in the Company have not changed since then, so that at the time of the deceased’s death the two brothers each held directly or indirectly 45% of the shares in the Company, the remaining 10% being held by a company owned by their sister. B.2 The Corporate Structure: Summary 10. As stated earlier, the Company has one direct and eight indirect subsidiaries. Its sole asset consists of the shares in its wholly owned subsidiary Long Yau, another BVI company whose sole function is also to act as a holding company. Long Yau has two operating subsidiaries which are both incorporated and carry on business exclusively in Hong Kong. One is YKRG, which is 80% owned by Long Yau, the remaining 20% being held equally by companies belonging to the two brothers. The other is Life is not Limited, which runs a club[8] on two floors of the Yung Kee Building where the Yung Kee Restaurant is located. It is a 40% indirect subsidiary of Long Yau. The other companies in the group, which are all incorporated in Hong Kong, are property owning companies which own properties in Hong Kong which include the Yung Kee Building. C. SECTION 168A : JURISDICTION 11. Section 168A applies to a “specified corporation”. “Specified corporation” is defined in s 2(1) to mean “a company” or a “non-Hong Kong company”. The same subsection defines a “non‑Hong Kong company” by reference to s 332. This applies Part XI of the Ordinance (which contains s 168A) to “companies incorporated outside Hong Kong which establish a place of business in Hong Kong”. The Company is incorporated outside Hong Kong and accordingly the court’s jurisdiction to make an order under s 168A depends on whether it has established “a place of business” in Hong Kong. Section 341 so far as material provides that “place of business includes a share transfer or share registration office….” 12. The petitioner[9] submitted that the inclusion of a share transfer or registration office shows that “a place of business” may include a place where the company carries on purely administrative business, and stressed the fact that “establishing a place of business” is not the same as “carrying on business”[10]. In our opinion the first of these submissions is misconceived. Section 341 does not define “place of business” but extends its ordinary meaning to include places which would otherwise not normally be regarded as places of business. The section tells against the petitioner’s submission rather than in its favour. 13. Nor in our view does the distinction between “establishing a place of business” and “carrying on business” support the petitioner’s contention that “business” includes the carrying on of purely internal activities, such as changes to the composition of its own board of directors, which do not affect outsiders or require the establishment of a particular place where they may be effected. In our view “place of business” connotes a place where or from which the company either carries on or possibly intends to carry on business. While “business” is not confined to commercial transactions or transactions which create legal obligations, there is no reason to suppose that it covers purely internal organisational changes in the governance of the company itself. The notion that it does, seems to follow from a belief that a company must have a place of business somewhere, but (leaving aside the share transfer and registration office) there is nothing in fact or law which requires a company which does not carry on business at all to have a place of business, and there is nothing strange in finding that such a company has not established one anywhere. 14. The fact that a company’s directors discuss its affairs and hold their board meetings in a particular place is not sufficient by itself to make that place the company’s “place of business”: see Re Oriel Ltd[11]. In that case there was no evidence where any of the company’s activities were undertaken during a relevant period. Oliver LJ acknowledged that in so far as the company’s directors formed any intentions about the company’s future they probably did so in whole or part at their home. He continued[12]: “I entirely accept that, as the judge pointed out, the mere fact that Bridge House constituted the [directors’] private residence does not prevent it from being an established place of business of the company, but it is quite a different thing to assert that the mere presence of the company’s directors at their residence followed by the entry of the company into a transaction elsewhere constitutes the residence an established place of business.......” The present case is a fortiori, for the decisions of the Company’s directors in the Yung Kee Building were not followed by its entry into a transaction anywhere. 15. We also accept the judge’s statement[13] that the word “establish” indicates that some degree of regularity and permanence of location is required. The petitioner asserted that the Company had established a place of business either on the 5th or 8th floor of Yung Kee Building, but the evidence of this was exiguous in the extreme. There was no evidence that the Company had or needed an office in the building or kept its books and records there; it kept no accounts and its register of members was kept in the BVI with a copy kept by the Company’s agent at its own office elsewhere in Hong Kong. The Company did not keep a share transfer or share registration office in Hong Kong. It held no board or general meetings prior to April 2009, and since then there were only 8 resolutions of the Company or its directors, which were all concerned with internal matters such as the payment of dividends or changes to the composition of the board. Indeed, but for Kwan Lai’s decision to take control of the board[14] the only matters which would have occupied the attention of the Company’s directors in 2009 would have been the declaration of dividends. 16. Many of the resolutions in question were paper resolutions. Thus the important resolution of the Company[15] amending its Articles (dealing with the quorum and length of notice for Board meetings) and appointing Carrel to be a director of the Company (as well as a director of its subsidiaries Long Yau and YKRG) was a written resolution of the shareholders of the Company and was signed by Kwan Lai alone. He signed the document three times, once in his own right and once on behalf of each of his companies Legco and Everway who together held 55% of the shares in the Company. It appears to have been signed on the 8th. Floor of the Yung Kee Building but could have been signed anywhere; and it is fanciful to suppose that by signing a document three times the sole signatory constituted the place where he signed it the Company’s place of business. C.1 Conclusion on jurisdiction under s 168A 17. Both courts below found that the Company had not established a place of business in Hong Kong, and we see no reason to disagree. Accordingly we affirm their decision that the courts of Hong Kong have no jurisdiction to make an order under s 168A in the case of the Company. D. SECTION 327(3)(c) 18. Sections 327(1) and (3) are in the following terms: “(1) Subject to the provisions of this Part, any unregistered company may be wound up under this Ordinance, …. (3) The circumstances in which an unregistered company may be wound up are as follows- (a) if the company is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs; (b) if the company is unable to pay its debts; (c) if the court is of opinion that it is just and equitable that the company should be wound up.” 19. As the courts below observed this is a discretionary jurisdiction, though this does not follow from the word “may”. This word merely means “is liable to” and is appropriate to describe the conferment of jurisdiction. Nevertheless the most appropriate jurisdiction in which to wind up a company is the jurisdiction where it is incorporated, and the jurisdiction to wind up a foreign company has often been described as “exorbitant” or as “usurping” the functions of the courts of the country of incorporation.[16] These expressions are, however, unhelpful and potentially misleading except as a reminder that there must be good reason to exercise an abnormal jurisdiction even though it is one which statute has expressly conferred on the court. It is well established that there must be some connection between the foreign company and the jurisdiction other than the petitioner’s decision, which would be present in every case, to present a winding up petition there rather than in the country of incorporation.[17] 20. In these circumstances the courts have adopted some necessary self-imposed constraints on the making of a winding up order against a foreign company. There is no need to show that the company has ever had a place of business within the jurisdiction or has ever carried on business there[18]. As the law has developed, however, the courts have laid down three so-called core requirements which must be satisfied before the court will exercise its statutory jurisdiction to wind up a foreign company. These were summarised by Kwan J (as she then was) in Re Beauty China Holdings Ltd.[19] as follows: “(1) there had to be a sufficient connection with Hong Kong, but this did not necessarily have to consist in the presence of assets within the jurisdiction; (2) there must be a reasonable possibility that the winding-up order would benefit those applying for it; and (3)the court must be able to exercise jurisdiction over one or more persons in the distribution of the company’s assets.” In the present appeal, the parties have focused on only the first of these core requirements. 21. Some courts have treated these core requirements as going to the jurisdiction of the court under s 327(3)(c). In our view, it is better to treat them as a part of the court’s discretion. The origin of these requirements, which have been adopted in other cases both in England and Hong Kong, is to be found in the judgment of Knox J in Re Real Estate Development Co.[20] In that case Knox J said that the proposition that there must be a sufficient connection between the company and the jurisdiction in which it is sought to wind it up prompted the question: sufficient for what? He answered the question by saying that the connection must be “sufficient to justify the court setting in motion its winding up procedures over a body which prima facie is beyond the limits of territoriality”. 22. That caseandBeauty China Holdings Ltd. werebothconcerned with creditors’ petitions to wind up the company on the grounds of insolvency. In such cases there is a substantial overlap between the different requirements, for the presence of significant assets within the jurisdiction normally means that a winding up order is likely to benefit the creditors applying for it. But their presence within the jurisdiction is not essential; it is sufficient that the petitioner will derive significant benefit from a winding up order in the local jurisdiction even though the company is incorporated elsewhere. 23. While the benefit to a petitioning creditor will normally consist of the appointment of a liquidator with access to the company’s assets for distribution to the creditors, it is not necessary that the benefit should be derived from its assets or be channelled through the hands of a liquidator. In Re Eloc Electro-Optieck and Communicatie BV[21] Nourse J made a winding up order against a company incorporated in The Netherlands which had traded in England but had ceased business some years before, had never had a place of business within the jurisdiction and no longer had assets there. The petitioners were two former employees who had been dismissed by the company. They had applied to the Department of Trade and Industry for payment out of the redundancy fund but under the statutory provisions no payment could be made until the company was wound up. Finding that there was a reasonable possibility that the petitioners would derive a benefit from the making of a winding up order, the judge said[22] “The benefit would consist of assets coming into the hands of the petitioners not from the company but from an outside source which can only be tapped if an order is made. In the light of that consideration and of the facts, first, that the company did carry on business in England and Wales, secondly, that it employed the petitioners in that business, and, thirdly, that the potential source of assets is directly related to that employment, there is, in my judgment, sufficient to found the jurisdiction of the court. To put it another way, it would, in my judgment, be a lamentable state of affairs if the court's jurisdiction was excluded by the mere technicality that the assets, in respect of which the reasonable possibility of benefit accruing to the petitioners derived, belonged not to the company but to an outside source. I think that support for this view is to be found in the fourth and fifth essentials in Megarry J’s summary [1973] Ch. 75, 92: “(4) It suffices if the assets of the company within the jurisdiction are of any nature; they need not be ‘commercial’ assets, or assets which indicate that the company formerly carried on business here. (5) The assets need not be assets which will be distributable to creditors by the liquidator in the winding up: it suffices if by the making of the winding up order they will be of benefit to a creditor or creditors in some other way.” That shows, first, that the assets can be of any nature and. Secondly, that the consequential benefit accruing to a creditor or creditors need not be channelled through the hands of the liquidator. To my mind that confirms that the ownership of the assets by the company is not a matter of crucial importance” (our emphasis). 24. In our view the question in the case of a creditor’s petition is whether there is a sufficient connection between the company and this jurisdiction to justify the court in ordering a company to be wound up despite the fact that it is incorporated elsewhere; and that in deciding that question the fact that there is a reasonable prospect that the petitioner will derive a sufficient benefit from the making of a winding up order, whether by the distribution of its assets or otherwise, will always be necessary and will often be sufficient. 25. In the present case both courts below considered that a “more stringent” connection was required in the case of a shareholders’ petition. We do not see why this should be so. We of course recognise that, as the Court of Appeal observed, creditors are not personally attached to the state of incorporation whereas the shareholders of a foreign company or their predecessors will usually have voluntarily adopted and approved the law of the state of incorporation as the law governing the company’s legal status. But that merely supports the starting point that the country of incorporation normally provides the most appropriate jurisdiction in which to seek a winding up order and is the reason for the adoption of the core requirements. Moreover the judge’s approach, and that of the Court of Appeal, has an element of “they made their bed; now they must lie on it”. But this merely begs the question since it assumes that the shareholders who caused the company to be incorporated knowingly chose not only to confer jurisdiction on the courts of the country of incorporation but also to abstain from invoking the concurrent jurisdiction which statute has conferred on the courts of Hong Kong. 26. Shareholders, no less than creditors, are entitled to bring winding up proceedings in Hong Kong in respect of a foreign company, and in either case they must establish a sufficient connection between the place of incorporation and Hong Kong; but the factors which are relevant to establish the connection are different in the two cases because the nature of the dispute and the purpose for which the winding up order is sought are different. Creditors seek a winding up order against their debtor in order to obtain payment in or towards satisfaction of their debts. The presence in Hong Kong of significant assets which may be made available to the liquidator for distribution among the creditors will usually suffice. The claim itself is usually simple to establish; the petitioner need prove only that he is owed a debt which is due and unpaid. If he considers it worthwhile he may chase the assets wherever they may be found and seek winding up orders in different jurisdictions until his debt is satisfied. 27. The case of a shareholders’ petition is different. In the first place, the parties are different, for while the company is a necessary defendant to every winding up petition, in the case of a creditor’s petition the dispute is between the petitioner and the company; whereas in the case of a shareholders’ petition, the dispute is between the petitioner and the other shareholders, and the company is the subject of the dispute rather than a party to it. Accordingly the presence of the other shareholders within the jurisdiction is an extremely weighty factor in establishing the sufficiency of the connection between the company and Hong Kong. In the second place, the petitioner’s purpose in seeking a winding up order is also different, for the object is not so much to obtain payment of a debt but rather to realise the petitioner’s investment in the company. This claim may involve a lengthy and detailed examination of the management of the company’s internal affairs which a petitioner is unlikely to be willing to undertake more than once. 28. From the dearth of authorities on such petitions, it would appear that shareholders’ petitions against foreign companies are a rarity, at least in England. Shareholders’ petitions are normally brought only in the case of small, private, family or quasi-partnership companies and there is usually no occasion for English shareholders of such companies to cause them to be incorporated overseas. Hong Kong is perhaps different and there are likely to be far more family companies in Hong Kong owned by a foreign holding company than in England. Even so, despite the industry of counsel they could find only eight cases in Hong Kong of a shareholder’s petition to wind up a foreign company, most of these were concerned with purely interlocutory applications, and in only one of them was any point taken on jurisdiction. The exception is Re Gottinghen Trading Ltd[23] where Harris J struck the petition out for want of the necessary connection with Hong Kong. That was an extreme case for neither the company’s business nor either of the shareholders had any connection with Hong Kong. 29. In the 7th edition of his book Shareholders’Rights Robin Hollington QC explains the sparing use of the just and equitable ground to wind up foreign companies at the suit of a shareholder differently[24]: “Nearly all the authorities are concerned with creditors’ petitions to wind up on the insolvency ground:……..These authorities show that, in the case of winding-up of insolvent companies sought by a creditor, it is for the petitioner to show either the presence of substantial assets within the jurisdiction or some other sufficient connection with the jurisdiction. In the case of solvent companies sought to be wound up by an aggrieved shareholder, it would have to be a very exceptional case for the court to exercise its jurisdiction to wind it up. For example, it might do so where the parties have concluded a shareholders’ agreement with an English choice‑of‑law and jurisdiction clause. But there would be a strong presumption in favour of the local court……”. 30. We see no reason why it should have to be a very exceptional case for the court to be willing to exercise its statutory jurisdiction to wind up a foreign company on the just and equitable ground. The question is the same whatever the ground of winding up, even if the relevant factors may be different: it is whether there is a sufficient connection between the company and the jurisdiction in which the petitioner seeks to have it wound up on the ground relied on. In the case of a shareholder’s petition on the just and equitable ground, the question is whether, having regard to all the circumstances, including the fact that the company is incorporated in another jurisdiction, it is just and equitable that the company should be wound up in Hong Kong. Given the nature of the dispute and the fact that it is a dispute between the shareholders, their presence in the jurisdiction is highly relevant and will usually be the most important single factor. 31. The example given in the extract from Shareholders’ Rights seems to us to support the opposite conclusion from that for which the author contends. The reason for considering it to be a proper case for the exercise of the jurisdiction of the English court appears to be that it is essentially concerned with a contractual dispute between shareholders whose contract is governed by English law, the company being merely the subject of the dispute. If so, then it is difficult to see why a dispute between shareholders based, not on contract but on equitable principles, should be different, at least where those principles are applicable in the place where the shareholders live. D.1 The connecting factors with Hong Kong in the present case 32. The factors relied on by the petitioner to establish the relevant connection between the Company and Hong Kong are the following and they are in our view compelling: (1) The Company itself is merely a holding company of a group of directly and indirectly held subsidiary companies and carries on no business of any kind whether in the BVI or Hong Kong. (2) All the underlying assets of the Company, that is to say the assets of its wholly owned subsidiary Long Yau, are situate in Hong Kong. (3) The business of the group is wholly carried on by the Company’s indirectly held subsidiaries, that is to say subsidiaries of Long Yau, all of which are incorporated in Hong Kong and carry on business exclusively in Hong Kong. (4) The whole of the Company’s income is derived from businesses carried on in Hong Kong. (5) All the Company’s shareholders and directors are and always have been resident in Hong Kong and none of them has ever set foot in the BVI where the Company is incorporated. (6) All the directors of its directly and indirectly held subsidiaries are and always have been resident in Hong Kong and none of them has ever set foot in the BVI. (7) All board meetings of the Company and its subsidiaries are held in Hong Kong and all administrative matters relating to the Company are discussed and decided in Hong Kong. (8) Crucially the dispute is a family dispute between parties all of whom are and always have been resident in Hong Kong and the events giving rise to it and the conduct of which complaint is made all took place in Hong Kong. (9) The only connection which the Company has with the BVI is that both it and its wholly owned direct subsidiary Long Yau are incorporated there. The fact that the Company’s only asset, being its shareholding in Long Yau, is situate in the BVI is a consequence of this. 33. The respondents rightly concede that if the Company held all its subsidiaries directly instead of indirectly through the medium of its wholly owned subsidiary Long Yau, there would be sufficient connection with Hong Kong to justify the Court in exercising its jurisdiction to wind up the Company. That is plainly right. Indeed Hong Kong would be the natural jurisdiction in which Hong Kong residents should resolve a dispute over the future of their Hong Kong business. But, they submit, the interposition of Long Yau makes all the difference. It means that the only asset of the Company consists of its shares in Long Yau, a BVI company, and these are situate in the BVI. The underlying businesses and assets of the group, which are situate in Hong Kong, belong to Long Yau’s subsidiaries and not to Long Yau, while the shares in the Hong Kong subsidiaries belong to Long Yau and not to the Company. Both courts below accepted this submission, which formed their ground for declining to exercise jurisdiction. 34. We recognise that a company and its shareholders are separate and distinct legal entities, but it does not follow that there is no connection between them or that a sufficient connection of a company with a particular jurisdiction to justify the court winding it up there cannot be established through its shareholders or subsidiaries. The petitioner’s case does not, as the respondents submit, identify the Company with Long Yau or the group or seek “to lift the corporate veil”. It does not ignore the fundamental principle that a company is separate and distinct from its shareholders. But there is an obvious and close connection between a company and its wholly owned subsidiary, and there is no reason, because there is no need, to disregard their different personalities when considering whether the said core requirements are satisfied. 35. It is now established that the presence of assets within the jurisdiction is not essential, but the likelihood that the petitioner will derive some benefit from a winding up order clearly is. In the present context where a shareholder seeks a winding up order in order to realise his investment in the company this does not depend on the presence within the jurisdiction of assets to which the company has title but the presence of assets which may be made available to a liquidator. The question whether the Company has any such assets in the present case is a question to which we will return. 36. It must be remembered that the so called core requirements are not statutory but self-imposed constraints adopted by the courts. In elucidating their meaning no question of statutory interpretation arises. The question is whether the connection of a company with Hong Kong is sufficient to justify the Hong Kong court in exercising its jurisdiction to wind that company up, and that is a question of degree. The nature of the connection will vary from case to case and is always a matter for the court. There is no doctrinal reason to exclude a connection through a wholly owned subsidiary. 37. Where the connection is through an indirect subsidiary the question is similar to the one which arose in Waddington Ltd. v Chan Chun Hoo[25]. The question in that case waswhether a shareholderhad sufficient locus standi to bring a minority shareholders’ action to recover moneys misappropriated, not from the company of which he was a member, but from a subsidiary. The primary argument for disallowing the action was that it contravened the fundamental principles of company law and in particular the principle that a company is a separate legal person from its members. A member of a parent company has no title or interest in and is a stranger to the shares of its subsidiaries which belong to the company and not to him. This court rejected the submission, on the ground that[26] “On a question of standing, the court must ask itself whether the plaintiff has a legitimate interest in the relief claimed sufficient to justify him in bringing proceedings to obtain it.” The court answered the question in the affirmative because any depletion of a subsidiary’s assets causes indirect but real loss to the parent company and its shareholders. The value of a company resides in the value of its assets, and the value of a parent company resides in the value of its subsidiaries’ assets. 38. The question in the present case is whether a foreign company, all of whose shareholders and directors live in Hong Kong, and which is the ultimate holding company of a group of indirectly held subsidiaries which carry on business in Hong Kong, has a sufficient connection with Hong Kong to justify the Hong Kong court in exercising its jurisdiction to wind it up at the suit of one of the shareholders. But the answer is the same as in Waddingtonand for much the same reason. The shareholder who brings a petition to wind up a company does so in order to realise his investment, and if the company is a holding company then his purpose is to realise the value of its underlying assets, whether they belong to its direct or indirect subsidiaries. Giving effect to the close connection between a holding company and the assets of its direct and indirectly held subsidiaries does not entail identifying the one with the other or treating the businesses and assets of the group as if they belonged to the holding company. It merely reflects the nature of the dispute and the purpose for which the proceedings are brought. 39. Although there is no doctrinal reason to exclude a connection of a foreign company with the jurisdiction through a wholly owned subsidiary, there may be a practical reason for doing so where the subsidiary is also a foreign company. It is necessary that the assets within the jurisdiction should be capable of being made available to a liquidator appointed by the court. Counsel for the petitioner was confident that this was the case even without the assistance of the court, since it would be sufficient for the liquidator to replace the directors of Long Yau by his own nominee. We do not share his confidence, for a change in the composition of the board of a company must be effected by its shareholders, and we are not convinced that the registrar of companies in the BVI will alter the register of members of a BVI company in order to replace the shareholders by a liquidator appointed by a Hong Kong court. Every court, however, has an implied jurisdiction to make whatever orders are necessary to give effect to its own judgments. In the present case all the individual respondents reside in Hong Kong and are subject to the in personam jurisdiction of the Hong Kong court. Accordingly were this Court to be of the view pursuant to the discussion which follows that a winding up order ought to be made, we would propose to give leave to the petitioner or the liquidator to apply to the Court of First Instance for such further orders whether by way of injunctions or otherwise as may be necessary to make the underlying assets of the Company available to the liquidator. D.2 Conclusion on connection with Hong Kong 40. For the above reasons, we are of the view that the requirement of a sufficient connection with Hong Kong for the purposes of s 327(3)(c) is satisfied, contrary to the conclusions of the courts below. The court should therefore proceed to hear the petition on its merits. It now becomes necessary to consider the question whether or not on the facts of the present case, it is just and equitable to wind up the Company. E IS IT JUST AND EQUITABLE TO WIND-UP THE COMPANY? 41. As stated earlier, even though both Harris J and the Court of Appeal declined jurisdiction to deal with the petition, they nevertheless proceeded to consider the facts on the assumption jurisdiction was established. Harris J found for the deceased in this regard, concluding that he had been unfairly prejudiced (for the purposes of s168A) by Kwan Lai’s conduct. He did so after considering the viva voce evidence given by the parties. The judge’s conclusion was, however, reversed by the Court of Appeal even though it did not substitute any firm findings, in an attempt so as not to pre-empt the decision of the BVI courts (which the Court of Appeal regarded as having the necessary jurisdiction to determine the complaints contained in the petition). 42. In the light of our view that the court should deal with the merits of the petition under s327(3)(c) of the Ordinance, it therefore becomes necessary to turn to consider the facts in order to determine whether or not it is just and equitable to wind up the Company.[27] In the lower courts, it was accepted by the parties that if Harris J was correct that there existed unfair prejudice, this would be sufficient for the court to consider it just and equitable to wind up the Company under s 327(3)(c). The respondents, however, submitted before us that even if we were to be of the view that the trial judge had been correct in finding unfair prejudice, nevertheless in the circumstances of the case as presented themselves before this Court, no order for the winding up of the Company ought to be made. Briefly, two reasons were given: first, since the most appropriate relief (which is unavailable under s327(3)(c)) would in these circumstances be an order for a buyout of shares,[28] the Court ought not to wind up a solvent and thriving company but instead leave it to the BVI courts to grant the appropriate relief; secondly, as mentioned earlier, the deceased has passed away and accordingly, so it is submitted on behalf of the respondents, it is now inappropriate to grant any relief under s327(3) since any unfair prejudice has ceased. We shall deal with these points later. 43. The applicable legal principles are not in dispute. The jurisdiction to wind up under s 327(3)(c) is whether the court regards it as just and equitable to do so. This is a wide jurisdiction but it is of course to be exercised in a principled manner. All companies, whether small or large, family style companies or international conglomerates, possess a corporate structure governed by a Memorandum of Association and Articles of Association. These documents provide for the way in which companies are to be run, governing the relation between shareholders, between shareholders and directors, and the directors as between themselves, in running the affairs of a company. In the determination of the rights of shareholders as in the present case, a court must bear the structure of the relevant company firmly in mind. As Lord Hoffmann said in his speech in O’Neill v Phillips:[29] “In the case of section 459 [s 327(3)(c)], the background has the following two features. First, a company is an association of persons for an economic purpose, usually entered into with legal advice and some degree of formality. The terms of the association are contained in the articles of association and sometimes in collateral agreements between the shareholders. Thus the manner in which the affairs of the company may be conducted is closely regulated by rules to which the shareholders have agreed.” 44. Immediately following this passage, Lord Hoffmann makes the point that company law has “seamlessly” developed from the law of partnership which was treated by equity by reference to notions of good faith, meaning that in certain circumstances equity would restrain the exercise of strict legal rights. In terms of company law, depending of course on the relevant context and background in any given case, there may be situations in which equity might find sufficient unfairness or breaches of good faith so as to attract relief granted by the court. It was put in this way[30]: “The first of these two features leads to the conclusion that a member of a company will not ordinarily be entitled to complain of unfairness unless there has been some breach of the terms on which he agreed that the affairs of the company should be conducted. But the second leads to the conclusion that there will be cases in which equitable considerations make it unfair for those conducting the affairs of the company to rely upon their strict legal powers. Thus unfairness may consist in a breach of the rules or in using the rules in a manner which equity would regard as contrary to good faith.” 45. As numerous cases make clear (and as Mr Joffe has reminded us), this does not mean that a judge can do whatever he or she happens to regard as fair. The law relating to corporations needs to be as clear and defined as possible so that companies (and their legal advisers) know as much as possible where they stand. In the present context, in what types of situation may a court take into account equitable considerations? The classic exposition is contained in the much-quoted speech of Lord Wilberforce in Ebrahimi v Westbourne Galleries Ltd[31] :- “My Lords, in my opinion these authorities represent a sound and rational development of the law which should be endorsed. The foundation of it all lies in the words “just and equitable” and, if there is any respect in which some of the cases may be open to criticism, it is that the courts may sometimes have been too timorous in giving them full force. The words are a recognition of the fact that a limited company is more than a mere legal entity, with a personality in law of its own: that there is room in company law for recognition of the fact that behind it, or amongst it, there are individuals, with rights, expectations and obligations inter se which are not necessarily submerged in the company structure. That structure is defined by the Companies Act and by the articles of association by which shareholders agree to be bound. In most companies and in most contexts, this definition is sufficient and exhaustive, equally so whether the company is large or small. The ‘just and equitable’ provision does not, as the respondents suggest, entitle one party to disregard the obligation he assumes by entering a company, nor the court to dispense him from it. It does, as equity always does, enable the court to subject the exercise of legal rights to equitable considerations; considerations, that is, of a personal character arising between one individual and another, which may make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way. It would be impossible, and wholly undesirable, to define the circumstances in which these considerations may arise. Certainly the fact that a company is a small one, or a private company, is not enough. There are very many of these where the association is a purely commercial one, of which it can safely be said that the basis of association is adequately and exhaustively laid down in the articles. The superimposition of equitable considerations requires something more, which typically may include one, or probably more, of the following elements: (i) an association formed or continued on the basis of a personal relationship, involving mutual confidence – this element will often be found where a pre-existing partnership has been converted into a limited company; (ii) an agreement, or understanding, that all, or some (for there may be ‘sleeping’ members), of the shareholders shall participate in the conduct of the business; (iii) restriction upon the transfer of the members’ interest in the company – so that if confidence is lost, or one member is removed from management, he cannot take out his stake and go elsewhere.” 46. This passage was referred to by Lord Hoffmann in O’Neill, and by the trial judge and the Court of Appeal in the present case in their judgments. In terms of what may constitute considerations of a personal character involving mutual confidence, this may come in the form of mutual understandings between members of a company[32] or what may have been “an accepted course of conduct between the parties whether or not cast into the mould of a contract.”[33] Much of course depends on the facts and background of each case and we accept that merely because a company is a small, private[34] or a family company does not necessarily attract equitable considerations in the sense used above, but it is equally uncontroversial that the peculiar characteristics of such companies are certainly relevant. 47. With these principles in mind, we now approach the facts in the present case. What divided the parties was whether equitable considerations should come into play: the petitioner claimed they did and Kwan Lai had breached the mutual understandings between him and the deceased; the respondents say not and that the court must pay sufficient regard to the corporate structure of the Company. In view of the reversal of the judge’s finding of unfair prejudice by the Court of Appeal, it becomes necessary to determine exactly just what the trial judge’s findings of fact were before testing the validity of the Court of Appeal’s analysis. 48. It is first convenient here to return to the Company’s structure. We have already earlier in this Judgment outlined the structure of the group of companies headed by the Company.[35] The respondents emphasize that Kwan Lai is in control of effectively 55% of the shareholding of the Company.[36] As such, his fundamental position in these proceedings is that as he controls the majority of the shareholding in the Company, to put it crudely, “majority rules”. This is how the trial judge saw Kwan Lai’s stance.[37] 49. Nevertheless, it has to be borne in mind that the Company was at all material times – and this was common ground – a family company. In his Judgment, Harris J first outlined, again uncontroversially, the history behind the Yung Kee Restaurant companies. As we have seen, the restaurant business was started by Kam Senior. When Kam Senior was alive, irrespective of what the corporate structure of the whole restaurant group may have been, he was firmly in control. For example, YK Restaurant Ltd at one stage controlled the restaurant business.[38] As the Judge remarked,[39] Kam Senior decided who could hold shares in this company. The Articles of Association of this company provided that Kam Senior could not be removed as a director. When the Company was formed in 1994, the sole shareholder at that time was Madam Mak who was Kam Senior’s nominee. 50. Although Kam Senior effectively ran operations during his lifetime,[40] it was clear that the intention was for his two sons, the deceased and Kwan Lai, to run the restaurant business together. The judge describes,[41] and this too is uncontroversial, how the two sons began working in the restaurant from the bottom, learning different aspects of the business. They were then given different responsibilities in the actual running of the restaurant: since 1973, the deceased was the general manager in charge of the day to day operations and was described as the “public face” of the Restaurant; for his part, Kwan Lai, since the mid-1970s, was responsible for the building, corporate and investment sides of the business. Although described as more a “backstage” person, his contribution to the restaurant business was certainly no less important than the deceased’s contribution. The judge used the phrase “integrated family operation”[42] to describe the way the business was run. 51. The petitioner’s position (and this was the way it was pleaded in the petition) was that the deceased and Kwan Lai were entrusted with co-running the day to day business and affairs of the restaurant and the business of the group of companies behind it. On the basis of the facts referred to in the previous paragraph, this can readily be accepted. This was also consistent with the composition of the board of directors of the various companies in the group. We need only refer to the position of the Company itself. As the judgment of Harris J states, [43] after incorporation on 1 December 1994, the Company’s sole director was Madam Mak (who was, as noted earlier, Kam Senior’s nominee). From 20 June 2000 to 7 April 2003, the directors of the Company were the deceased and his wife. From 8 April 2006 to 8 November 2006, the directors were the deceased and a company called Capital Adex Ltd (the shares in which were eventually transferred to Kwan Lai). From 9 November 2006 until a resolution of the Company dated 7 July 2009[44], the only directors of the company were the deceased and Kwan Lai. Further, again until the said 7 July 2009 resolution, the requisite quorum for a meeting of the board of directors of the Company comprised the whole of the board.[45] 52. The complaint made in the petition was that there existed a common understanding between the deceased and Kwan Lai that the restaurant and group business would be jointly run or managed, and that this understanding was breached by Kwan Lai. In Part B4 of the petition, the “Fundamental Basis of Cooperation” is pleaded. Para 34 of the Petition states:- “34. Because of their relationship as brothers, and the fact that the business of the Group is the family business, the Petitioner [the deceased] and Kwan Lai reposed complete trust on and had full confidence in the probity of each other and consulted each other in respect of all major decisions required to be made.” The facet of proper consultation was repeated in para 36.2 of the petition:- “36.2 Each of them would be entitled to participate in the general management of the Group and be consulted on all major decisions concerning the affairs and business of the Group.” 53. So, against the background set out above, what were the findings of the trial Judge in relation to the deceased’s complaints? They were as follows: (1) The judge found as a fact that the deceased and Kwan Lai (certainly at one stage) trusted each other and this was accepted by Kwan Lai in cross examination.[46] (2) The judge said[47] that as between the deceased and Kwan Lai, taking into account their conduct in relation to the business since 1969 (when Kwan Lai returned from his studies in Taiwan and became involved in the family business), equitable considerations in the exercise of their legal rights as shareholders came into play. Each was entitled to a say in the running of the business although there did not have to be unanimity. This did not mean that either of them, in particular the deceased, had any power of veto.[48] (3) What the judge clearly meant was that the mutual understanding between the brothers was that each should fully participate in the running of the business and be properly consulted. And of course, implicit in this understanding was mutual respect. This is clear when one considers the relevant factual background and context of the present dispute and, as shown by the references in the petition made earlier,[49] was precisely what the deceased was complaining about. In his judgment, Harris J referred to the deceased’s “reasonable expectation, in the light of previous practices, that his views and position within the group should be respected.”[50] This went beyond the corporate structure of the Company. (4) Having found that there was a mutual understanding as to how the business should be run and that accordingly equitable considerations came into play, the judge further found that this understanding had been breached by Kwan Lai:- (a) He found that Kwan Lai’s intention was to “dictate” matters to the deceased with which his elder brother disagreed.[51] (b) The judge gave a stark example of this by referring to various resolutions that were passed within the space of two months in 2009. We have earlier briefly referred to one such resolution.[52] By a written resolution of the shareholders of the Company dated 7 July 2009 (signed only by Kwan Lai on behalf of himself, Legco and Everway), it was first resolved that Article 69(a) of the Company’s Articles of Association be amended so as to provide that the quorum for any meeting of the Company’s board of directors should only be half of the total number of directors; this was a significant change.[53] It was further resolved that Kwan Lai’s son, Carrel, be appointed a director of the Company as well as of its subsidiaries, Long Yau and YKRG.[54] The importance of this resolution can readily be seen: by these changes, Kwan Lai ensured that he controlled the board of directors of all relevant companies running the restaurant and group business. The notice for this meeting was given by Kwan Lai to the deceased without any prior consultation. By a letter dated 3 July 2009, the deceased (through his solicitors to the solicitors for the party which had convened the meeting, being Everway) had requested that as the proposed resolutions represented a major change in the “structure, design and operation of the Company”, a meeting of the Company’s shareholders should be held first to discuss the proposals. This was ignored. (c) Following this resolution, a meeting of the Company’s board of directors took place on 3 August 2009 at which it was resolved[55] that Kwan Lai be appointed the authorized representative of the Company to act on its behalf as the registered shareholder of Long Yau. Such authority included attending and voting at meetings, signing shareholder resolutions and other documents of Long Yau. In short, full authority was given to Kwan Lai to act on behalf of Long Yau in all important matters concerning that company. On 12 August 2009, Kwan Lai acted in this new capacity by signing three written resolutions of Long Yau first resolving that Carrel would become a director of Long Yau with immediate effect, next, further resolving that Carrel also be appointed a director of YKRG. The third written resolution was that the board of directors of Long Yau[56] should choose one of its directors to represent the company (Long Yau) in the same way as Kwai Lai had been authorized to represent the Company. (d) A directors meeting of Long Yau took place on 31 August 2009 at which the deceased, Kwan Lai and the recently appointed director, Carrel, were present. The minutes of the meeting indicate that there was even disagreement as to who would chair the meeting as between the deceased and Kwan Lai. Eventually, by 2 votes to 1,[57] Kwan Lai was elected chairman. Discussions took place during which the deceased expressed his concerns both as to Carrel’s appointment as a director as well as the proposal that Carrel be appointed the authorized representative of Long Yau (as anticipated at the earlier shareholders meeting of 12 August 2009). The deceased wanted an adjournment to consider these matters further and to suggest possible amendments. The request for an adjournment was rejected – again by 2 to 1. It was then resolved – also by 2 to 1 – that Kwan Lai be appointed the authorized representative of Long Yau. (e) The last in this series of resolutions followed the EGM of YKRG held on 24 September 2009. The three shareholders of this company[58] were present. The deceased represented Holly Join Ltd, Kwan Lai represented Long Yau and Carrel represented Capital Adex Ltd. There was again disagreement over who should be Chairman and by 2 to 1, Kwan Lai was appointed chairman. Despite opposition from the deceased, it was resolved that Carrel be appointed an additional director of YKRG. (f) These resolutions were considered by Harris J. The judge described these actions as a “pre-emptive strike” on Kwan Lai’s part.[59] He said it must have been appreciated by Kwan Lai that the deceased was obviously concerned about the addition of Kwan Lai’s son, Carrel, to the boards of directors of the various companies (as well, we add, to a greater management role within these companies) but no attempt was made to allay the deceased’s concerns. In a significant passage, the judge said this[60]:- “In fact the opposite happened. If he had been behaving in a manner that was consistent with the way in which they had conducted matters in the past, and with due regard to the personal nature of the relationships involved, he would have ensured that the Petitioner [the deceased] was treated with respect, but instead he allowed the opposite to happen. It is clear from the emails sent by Carrel to his Uncle [the deceased] and the transcripts of meetings Carrel attended after the resolutions had been passed to appoint him a director of the Company that Carrel was frequently gratuitously rude to the Petitioner.” The judge’s conclusion was that “Kwan Lai had behaved in a manner which was inconsistent with the way in which he and the [deceased] had previously conducted the business and behaved towards one another. In particular it is clear that Kwan Lai quite consciously took steps to control the Company and then exercised that control without proper regard to previous understandings.”[61] (g) To make good these conclusions, the judge then referred to two further incidents.[62] First, reference was made to a board meeting of YKRG on 30 November 2009 at which it was resolved, again despite the deceased’s objections, that Carrel and his sister Yvonne be given substantial increases in salary well beyond what the Petitioner’s own children were getting, even though they worked full time for the group companies.[63] As the judge remarked, the point was not whether the previous salaries paid to the next generation were anachronistic, but quite simply, Kwan Lai preferred to pay his children substantially more than was the previous practice. The judge said, “This was inconsistent with the maintenance of the type of trust and confidence that had existed in the past and Kwan Lai should have appreciated that it would add to the impression that he was taking control of the Group and paying little regard to the [deceased’s] views.” (h) The second matter concerned some industrial property in Chai Wan owned by a company in the group. Up until April 2009, these premises were used to pack preserved sausages for the Restaurant and then left unused after Chinese New Year that year. However, as from April, it was used by Carrel and Yvonne for their own business rent-free. Despite objection from the deceased when he discovered this, Kwan Lai refused to do anything. The judge said this about the incident:- “In my view the relevance of the complaint is not so much that there was self-dealing, which there does appear to have been, but rather that it demonstrates a lack of regard for the Petitioner’s reasonable expectation, in the light of previous practices, that his views and position within the Group should be respected and also what appears to have been a developing sense on Kwan Lai’s part that he could dictate matters to his older Brother.” 54. In reversing the judge’s overall conclusion that unfair prejudice existed, the Court of Appeal took the view essentially that the judge had not made sufficient findings on any mutual understanding between the deceased and Kwan Lai, and in any event made no findings on exclusion from management.[64] It is necessary to look more closely at the Court of Appeal’s analysis in these respects. 55. As to mutual understanding, as we have seen, the judge found that each brother could fully participate and had to be properly consulted in the running of the restaurant and group business, and that in this way neither could be excluded from the management of the business.[65] The Court of Appeal seems to have equated this participation (in the form of fully participating and being properly consulted) in the affairs of the restaurant and group business with a right of veto on the deceased’s part.[66] An analysis was then made to why this could not have been the common understanding since, for example, the shareholding in the Company itself was completely at odds with such a suggestion.[67] We would agree with this analysis if this had been the judge’s finding, but it was not. On the contrary, the judge was at pains to stress that this was not his conclusion at all.[68] As to these passages in the judge’s judgment, the Court of Appeal thought that there was an inconsistency on his part between on the one hand, the concept that the two brothers would have an equal say in the running of the business and on the other, the power of the deceased to veto any proposal. However, in our view, this was with respect to misunderstand the judge’s finding, which was that there was a common understanding that each brother was entitled to participate in the business and had to be properly consulted. The references in the judge’s judgment to the lack of respect shown to the deceased reinforce this.[69] These references to the lack of respect were not referred to at all in the judgment of the Court of Appeal. The allegation made in para 36.2 of the Petition[70] that each of the brothers was entitled to participate in the general management of the group and be consulted on all major decisions was admittedly quoted by the Court of Appeal, but not thereafter referred to again in their judgment. 56. We now turn to what appears to be the view of the Court of Appeal that the judge had not made sufficient findings as to breaches of the mutual understanding by Kwan Lai. With respect, this was an untenable view given the judge’s findings outlined earlier and the evidence that was before the court. No reference was made in the Court of Appeal’s Judgment regarding the reference to Kwan Lai’s “pre-emptive strike”, the lack of respect shown by Kwan Lai and Carrel to the deceased and bare mention is made of the episodes regarding the increase in salary for Carrel and Yvonne, and the Chai Wan premises.[71] The view of the Court of Appeal was this:- “Thus, the judge’s decision on unfair prejudicial conducts rested primarily on his conclusions on Kwan Lai taking steps to control the Company and the lack of regard for the petitioner’s expectation. There were allegations in the petition which were canvassed in the evidence and the submissions before the judge but on which he did not find it necessary to discuss in details. Importantly, we note that the judge did not make findings on the allegations of exclusion from management and the mutual understanding in that regard. He stopped at a finding of interference in the management of the Restaurant. Further, he did not base his conclusion on unfair prejudice upon a finding that Kwan Lai should not have intermeddled in the Restaurant management at all.” We have already remarked on the view that the Court of Appeal took as to the judge not having made findings. The reference to there being no finding of “interference in the management” of the Restaurant is equally untenable. The allegation made by the deceased was not undue interference in the management of the Restaurant; rather, it was his exclusion from being properly consulted in the restaurant and group business. 57. In his submissions before us, Mr Joffe sought essentially to uphold the reasoning of the Court of Appeal. This was reflected in the written Case for the Respondents. 58. Contrary to the view of the Court of Appeal and to Mr Joffe’s submissions, we are of the view that there was no basis to interfere with the trial judge’s findings and conclusions on unfair prejudice. Given the parties’ acceptance, which is correct in our view, that this would be sufficient to enable the Court to make an order under s 327(3)(c), we are of the view that relief can be granted under that provision. 59. The respondents, however, made two further points to contend that a winding up order ought not be made, namely, that such an order ought not to be made in view of the fact that obviously a buyout would be a better remedy in the circumstances and that this remedy is available in the BVI courts and secondly, any unfair prejudice has now ceased with the death of the deceased.[72] 60. These points can be quickly disposed of. 61. It is correct that s 327(3)(c) provides only for the remedy of winding up if the court is of the opinion it is just and equitable to do so. We are however not aware of any case in which after trial a court has, despite being of the view that it is just and equitable to wind up, refused to do so merely on the basis that there is another jurisdiction which may be able to grant what may be regarded as more appropriate relief. If such a point is to be taken at all, it ought to be taken at the earliest possible opportunity, whether on a strike out application or some other form of preliminary application. In the present case, it is far too late to take such a point. It surfaced for the first time in the course of submissions before this Court. Further, given the spectre of yet another hard fought hearing in the BVI even before any relief can be considered, this possibility must be rejected. 62. In respect of the passing away of the deceased, the relevance of this was again only first canvassed by the Court during the hearing of the present appeal. Neither party had hitherto regarded the deceased’s death as being relevant to the outcome of the appeal. This unfortunate event was made known to Harris J before the first instance judgment was handed down. The parties were then asked to indicate whether this would have any bearing on the handing down of his judgment. The solicitors for the deceased wrote to the court indicating that their position was that it did not. The respondents did not even reply to the court’s inquiry. Mr Joffe, however, now submits that even if the trial judge had been correct in his view on unfair prejudice, any mutual understanding as to how the restaurant and group business should be run must now have ceased with the deceased’s death. He reminded us that there was no evidence to suggest just what was to happen in the event of the death of one of the brothers. In our view, given the earlier stance of the parties before the first instance judgment was handed down, it is now also too late to raise any submissions based on the deceased’s death, particularly as a full consideration of this aspect would perhaps involve new evidence. However, we would perhaps just make these observations. With the deceased’s death, the mutual understanding as to how the business should be run is certainly at an end, and the business of the Restaurant and the group, essentially a family run group of companies, has now entered a new phase and has changed irrevocably. There has never been any suggestion that the deceased’s children and successors would have any part in the running of the business; in fact the evidence before the court suggested quite the contrary. Further, given the background as set out above, it seems to us obvious that upon the death of either of the brothers, the survivor would have had to reach an agreement or understanding with in particular the successors of the deceased brother regarding the future running of the business. However, with the breaches by Kwan Lai of the mutual understanding between him and the deceased, which the trial judge found to be destructive of the trust and confidence between them, this is now unlikely in the extreme. Lastly, the Court of Appeal, in reversing Harris J, paid some regard to the fact that at least the deceased remained on the board of directors of various companies within the group, including the Company.[73] That factor no longer exists. 63. For the above reasons, we are of the view that the proper order to make in the present case is an order winding up the Company. F. CONCLUSION AND ORDERS 64. For the above reasons, we would allow the appeal. While we are of the view that a winding up order should be made, there is some reason to think that all parties may consider that the better course would be for the petitioner’s shareholding to be bought out rather than that the Company be immediately wound up. For this reason, we would order that there be a stay of the winding up order for 28 days to give the parties an opportunity to agree the terms on which the petitioner’s shares in the Company should be purchased at a price, if not agreed, to be determined in some agreed and appropriate manner, that is to say either by an appropriate expert or by arbitration. If no such agreement is concluded before the expiration of the period (or such extended period as this Court may allow) the winding up order will take effect automatically. The stay may, of course be made permanent by this Court at any time with the consent of all parties. There will accordingly be liberty to apply to a single Permanent Judge in relation to the order for a stay. In the event a winding up order is confirmed, the parties will have liberty to apply in relation to those matters referred to in para 39 above to a judge of the Court of First Instance. 65. As to costs, we direct that the parties be at liberty to serve on each other and lodge with the Registrar of the Court within 21 days of the handing down of this judgment any written submissions, with liberty to serve and lodge any written submissions in reply within 14 days thereafter. Mr Justice Ribeiro PJ: 66. I agree with the judgment of the Chief Justice and Lord Millett NPJ. Mr Justice Tang PJ: 67. I agree with the judgment of the Chief Justice and Lord Millett NPJ. Mr Justice Fok PJ: 68. I agree with the judgment of the Chief Justice and Lord Millett NPJ. Mr Jat Sew-Tong SC, Ms Linda Chan SC and Mr Justin Ho, instructed by Tony 	Kan & Co., for the Petitioner (Appellant) Mr John Bleach SC, Mr Victor Joffe and Mr James Man, instructed by Minter 	Ellison, for the 1st & 2nd Respondents (1st & 2nd Respondents) [1] The deceased was the original petitioner. He died on 5 October 2012 before judgment was handed down by Harris J. By an order dated 14 November 2012, Madam Kam Leung Sui Kwan was substituted as the petitioner in these proceedings. [2] Now superseded by ss 722 to 726 of the new Companies Ordinance Cap.622 which came into effect on 3 March 2014. [3] This provision is retained as s 327(3)(c) of the new Cap 32, now renamed the Companies (Winding Up and Miscellaneous Provisions) Ordinance, which also came into effect on 3 March 2014. [4] This is the only remedy available under s 327 of the Ordinance. [5] The trial judge found that the Company had nine direct or indirect subsidiaries: CFI Judgment at para 8. [6] The Long Yau Unit Trust. [7] Legco was originally beneficially owned by Kwan Ki. Kwan Ki bequeathed Legco to Kwan Lai. [8] The Kee Club. [9] The petitioner appellant was represented by Mr Jat Sew Tong SC, Ms Linda Chan SC and Mr Justin Ho. The first and second respondents were represented by Mr John Bleach SC, Mr Victor Joffe and Mr James Man. The other respondents took no part in the present appeal. [10] See Lord Advocate v Huron and Erie Loan and Savings Co. [1911] S.C.612 at p.616; Singamas Management Services Ltd. v Axis Intermodal (UK) Ltd. [2011] 5 HKLRD 145. [11] [1985] BCLC 343 at pp. 347, 352 per Oliver LJ. [12]At p. 350 [13] CFI Judgment paras 30 and 33. [14] This is dealt with below: see para 53(4). [15] Dated 7 July 2009: see para 53(4)(b) below. [16] See for example In re Drax Holdings Ltd. [2004] 1 WLR 1049 at p.1054 [para 24] per Lawrence Collins J (as he then was). [17] See Gdanska SDA v Latreefers Inc (No.2) [2001] 2 BCLC 116 [18] Re Cia Merabello San Nicholas SA[1973] Ch. 75 at p. 91 per Megarry J. [19] [2009] 6 HKC 351 at p. 355-6 [para 23] [20] [1991] BCLC 210 at p. 217. [21] [1982] Ch. 43. [22] At p.48 [23] [2012] 3 HKLRD 453. [24] At para. 12-05 [25] [2008] 11 HKCFAR 370 [26] At p.398 [para 74]. [27] It was for this reason that leave was given by the Appeal Committee on 4.2.2015 on the “or otherwise” ground. [28] This was the position of in particular the deceased at trial. Initially, as stated above (para 2) he was of the view that Kwan Lai should purchase his shares in the event that unfair prejudice was established; by the conclusion of the trial, however, he sought an order that he should be the purchaser: see CFI Judgment at paras 2,120. Harris J would have ordered, if the Hong Kong courts had jurisdiction under s.168A, that Kwan Lai purchase the deceased’s shares: CFI Judgment at para 128. [29] [1999] 1 WLR 1092 at p.1098 G-H. This authority was endorsed by the Court in Wong Man Yin v Ricacorp Properties Ltd (2006) 6 HKCFAR 265. [30] At p.1098H – 1099B. [31] [1973] AC 360 at p.379B-G. [32] See O’Neill at p.1101G [33] Megarry J in Re Fildes Bros Ltd [1970] 1WLR 592 at p.596H [34] In re Westbourne Galleries Ltd, in the passage quoted above, Lord Wilberforce states the fact that the company is a small one or a private company may by itself not enough to attract equitable considerations:- at p.379E-F. [35] See paras 8 and 9 above. [36] The Petitioner held 9 shares in the Company (45%). Kwan Lai held 7 shares (35%). Legco, the corporate vehicle through which Kwan Lai held another part of his share holdings and Everway (the vehicle through which Kelly held her shares and who supports Kwan Lai in these proceedings) each held 2 shares (each 10%). [37] See CFI Judgment at para 110. [38] Before it was transferred to YKRG: see para 6 above. [39]See CFI Judgment at para 12. [40] Kam Senior passed away in December 2004. [41] CFI Judgment at para 93 et seq. [42] CFI Judgment at para 92. [43] CFI Judgment at para 7. [44] When Kwan Lai’s son, Carrel was appointed a director. This resolution is dealt with later. [45] This was Article 69(a) of the Company’s Articles of Association. [46] CFI Judgment at para 95. This was obviously the position before their relationship soured. [47] CFI Judgment at para 108. [48] CFI Judgment at para 112. [49] See para 52 above. [50] CFI Judgment at para 115. [51] See CFI Judgment at paras 111, 115. [52] In para 51 above. [53] It will be recalled that the original Article 69(a) required the quorum to be all directors of the Company. [54] This company was the company actually running the restaurant. [55] By 2 to 1 (Kwan Lai and Carrel against the deceased). [56] Before Carrel’s appointment as a director of Long Yau, its directors comprised only the deceased and Kwan Lai. [57] Again Kwan Lai and Carrel against the deceased. [58] Long Yau held 80% of the shares of this company. The remaining shareholders were Holly Join Ltd (controlled by the deceased) and Capital Adex Ltd (controlled by Kwan Lai), each holding 10%. [59] CFI Judgment at para 113. [60] CFI Judgment at para 113. [61] CFI Judgment at para 114. [62] CFI Judgment at paras 114 and 115. [63] In contrast to Yvonne who worked only half days on Saturdays and at other times as requested. [64] See CA Judgment at paras 113, 116. [65] See para 53(3) above. [66] CA Judgment paras 116 to 123. [67] It will be recalled that Kwan Lai controlled 55% of the shareholding of the Company. [68] See CFI Judgment at paras 112-113, 124. [69] See paras 13(4)(f) and (h) above referring to the CFI Judgment in paras 113 and 115. [70] Para 52 above. [71] CA Judgment at paras 111 and 112. [72] See para 42 above. [73] CA Judgment at paras 114, 115 and 124.
Chief Justice Ma: 1. After hearing counsel, we allowed the appeal and made an order as to costs.[1] I agree with the reasons contained in the judgement of Mr Justice Tang PJ. Mr Justice Ribeiro PJ: 2. I agree with the Reasons given by Mr Justice Tang PJ. Mr Justice Tang PJ: 3. The Import and Export (General) (Amendment) Regulation 2013 which came into operation on 1 March 2013[2] was enacted to combat parallel trading in powdered milk formula between Hong Kong and the Mainland. For that purpose, amendments were made to the Import and Export (General) Regulations, Cap 60A (“the Regulations”) with the result that the export of powdered formula to all places outside Hong Kong except and in accordance with an export licence issued by the Director-General of Trade and Industry became prohibited under s 6D(1) of the Import and Export Ordinance, Cap 60. But Regulation 6(1D) was added to exempt, from s 6D(1), powdered formula: “ … that is exported in the accompanied personal baggage of a person aged 16 or above leaving Hong Kong – (a) if – (i) the person did not leave Hong Kong in the last 24 hours; and (ii) the formula does not exceed 1.8 kg[3] in total net weight;” 4. On 25 January 2015, in the departure hall of Lo Wu Control Point, the appellant was found with four cans containing a total of 3.6 kg of powdered formula. He was charged with and convicted[4] of the attempted exportation of powdered formula in excess of the permitted limit of 1.8 kg without an export licence under s 6D(1) of the Import and Export Ordinance and s 159G of the Crimes Ordinance, Cap 200 and fined $500. 5. His case as summarised by the learned magistrate was that he and his wife were travelling from Hong Kong to the Mainland via Lo Wu.[5] He was carrying four cans of powdered formula in his backpack, two for himself and two for his wife. He was walking side by side with his wife but: “When they reached the customs channel, as there was a large flow of people, they were no longer holding hands, and his wife was a few steps ahead of him. Suddenly, someone called him and asked to check his baggage. He slowed down. When he was called a second time, he had already lost sight of his wife. Customs officers found four cans of powdered formula in his backpack. He explained to the customs officers that he was going through clearance with his wife, but the customs officers paid no heed. As his identity card was kept by his wife, he phoned her. Later, she returned to the customs channel and passed his identity card to the customs officers.”[6] His wife’s evidence was to similar effect. 6. The learned magistrate said little about the prosecution case although he said: “as to how (the appellant) was stopped, how the identity card was shown, his explanations to the customs officers etc, the evidence of the customs officers was substantially disputed by the defence.”[7] 7. The learned magistrate did not think it necessary to resolve any difference between the prosecution and the defence case. He took the view that under Regulation 6(1D): “Each person leaving Hong Kong is only allowed to export no more than 1.8 kg of powdered formula. It is not specified [in the regulation] that a person can carry powdered formula for others travelling with him. I think it is obvious that the restriction on powdered formula only allows each person to carry 1.8 kg of powder formula with him. This also enables the customs officers to enforce the relevant law in a precise manner.” (Emphasis in original)[8] 8. The learned magistrate went on to say there was no defence to the charge because: “14. …. when the [appellant] was stopped, he was separated from his wife. His wife was walking ahead. He was alone when he was stopped by the customs officers.” 9. On appeal, his decision was affirmed by Fung J. His Lordship said “accompanied baggage” meant “the baggage accompanied by that person instead of the baggage entrusted to another person” and added, “In any case, the Appellant did not dispute that he was not with his wife when going through clearance.”[9] 10. On 9 February 2017, the Appeal Committee gave leave to the appellant to appeal on the following question of law, namely: “Whether, on the true and proper construction of the phrase ‘the accompanied personal baggage of a person’ in Regulation 6(1D) of Import and Export (General) Regulations, Cap.60A, such baggage is limited to personal baggage physically carried by, or immediately with, the person himself or extends also to baggage carried by, or immediately with, another who is accompanying the person to leave Hong Kong?” 11. Before us, Ms Vinci Lam on behalf of the respondent submitted that accompanied personal baggage is not limited to baggage physically carried by, or immediately with, a person and can extend to baggage carried by, or immediately with, another person “so long as the baggage is physically proximate to the person as to be staying with or going along with [the relevant person]”.[10] 12. Ms Lam submitted that in the present case, it was not in dispute even on the appellant’s version of events that he was not with his wife when going through clearance. Accordingly, even if the appellant was carrying the personal property of his and his wife, the two additional cans of powdered formula was not physically proximate to the wife. 13. I disagree with the respondent’s submissions. We are concerned with the proper construction of the expression “accompanied personal baggage”. This is an everyday expression. It is a question of fact in every case and should be approached with common sense. Suppose the wife was asked by mainland customs officer at the other side of the border, whether she had any accompanied baggage and said, “Yes, they are with my husband”. I do not believe the man in the street would say she was untruthful. Without attempting an exhaustive definition, I am of the view that on the basis of the defence case, two of the four cans of powdered formula should be regarded as part of the wife’s accompanied personal baggage, just as if she shared a suitcase with her husband and her clothes were in his suitcase. They were travelling on the same journey with her and belonged to her and should be regarded as her accompanying personal baggage. Nothing in the context of these words nor with regard to their purpose[11] compels the construction advanced by the respondent. 14. Ms Lam submitted that this construction is liable to be exploited by parallel traders. She gave the example of a group of ten parallel traders each carrying ten cans of powdered formula. She said if nine of them got through customs undetected but one was stopped, that person could call for the return of four of his confederates each of whom would then claim that he was carrying two cans for him. This is a fanciful example. Anyway, it would not justify giving the expression “accompanied personal baggage” a construction which would ensnare innocent travellers. Families travelling together often carry stuff for one another. The crossing between Hong Kong and the Mainland is very busy. Travellers are often hurried along and told not to linger. Just as in the present case, it is easy for persons travelling together to be separated for whatever reason, particularly in a busy immigration or customs hall. In any event administrative convenience or operational concerns ought to be addressed administratively or through other measures rather than by a strained legal construction. Furthermore, persons claiming to be travelling together or to be carrying powdered formula for one another, have in truth to be doing so, not merely because they have said this to be the case. 15. Finally, in allowing the appeal, it of course follows that the conviction of the appellant must be quashed. In this respect, it should be noted that the respondent did not suggest otherwise. Moreover, although it was unclear in the SOF as to whether the magistrate accepted the appellant’s version of events, the transcript of the proceedings when he was being sentenced reveals that the magistrate did accept his version.[12] 16. For the above reasons, I allowed the appeal. Mr Justice Fok PJ: 17. I agree with the Reasons given by Mr Justice Tang PJ. Lord Hoffmann NPJ: 18. I agree with the Reasons given by Mr Justice Tang PJ. Mr Andy Hung, instructed by Ho & Ip, assigned by the Director of Legal Aid, for the appellant Ms Vinci Lam, SADPP and Ms Florrie Chan, SPP of the Department of Justice, for the respondent [1] The appellant was legally aided. It was ordered that the respondent pay the costs of the appellant limited to any contribution that was payable by the appellant to the Director of Legal Aid. Other than that, the appellant’s costs are to be taxed in accordance with the Legal Aid Regulations, Cap 91. [2] L.N. 25 of 2013. [3] Powdered formula usually come in cans of 0.9 kg each, so effectively, the limit is two cans of powdered formula. [4] By Mr Raymond Wong, a magistrate. The statement of findings of the magistrate (“the SOF”) was dated 5 December 2015. [5] The evidence is not entirely clear but it appears that they went through Immigration 9 seconds apart. See judgment of Fung J, who dismissed the appellant's appeal, dated 10 March 2016 (“the judgement”) at para 4. [6] Para 7 of the SOF (as translated). [7] Para 10 of the SOF. [8] Para 12 of the SOF. [9] Paras 16 & 17 of the judgment. [10] Para 18 of the respondent’s case. [11] See para 3 above. [12] “But still, I accept what you have put forward, as from beginning to end, I never queried about what you have put forward. That is, when your wife and you were walking through the immigration together, just because of the large flow the people there, then you separated from each other, a few steps ahead. But the court finds that it was not in compliance with the restriction on powdered formula which states that each person can carry one can -- each person can carry two cans.” Page 11 of the translated transcript of the closing submission of the hearing on 24 November 2015.
------------------------------ Chief Justice Ma: 1. I agree with the judgment of Mr Justice Gummow NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Gummow NPJ. Mr Justice Tang PJ: 3. I agree with the judgment of Mr Justice Gummow NPJ. There is nothing I can usefully add. Mr Justice Bokhary NPJ: 4. I agree with the judgment of Mr Justice Gummow NPJ. Mr Justice Gummow NPJ: 5. This appeal, by leave, from the judgment of the Court of Appeal (Kwan, Fok, Lam JJA) dated 7 December 2012[1] raises four questions which have appeared at interlocutory stages in litigation instituted against the defendant by the liquidators of Moulin Global Eyecare Holdings (“Moulin”). The four questions were posed in the application for leave to this Court. 6. Between 8 December 2000 and 1 November 2004 the defendant was a director of Moulin and, it is alleged, its principal legal adviser. The reasons of the Court of Appeal detailed the interlocutory disputes which led to that Court and thence to this appeal, and it will not be necessary fully to recapitulate what is recounted in those reasons. 7. Moulin was incorporated in Bermuda in 1993 but the appeal has been argued without reference to the law in that jurisdiction as differing in any material respect from that in Hong Kong. Moulin was listed on the Hong Kong Stock Exchange and through its subsidiaries it conducted an apparently substantial and successful business of manufacture and distribution of eye-care products. However, on 23 June 2005 provisional liquidators were appointed to Moulin and on 5 June 2006 the Court of First Instance ordered the winding up of Moulin under Part X of the Companies Ordinance (Cap 32) (“the Companies Ordinance”). 8. The conduct of the chairman, treasurer, chief executive officer and others in the falsification of accounts of Moulin and its subsidiaries has since led in Hong Kong to their conviction and imprisonment for substantial terms. The course of the litigation 9. The action against the defendant was commenced on 29 January 2008 by writ issued out of the Court of First Instance. The indorsement on the writ, the terms of which are critical for the resolution of the present appeal, sought “…equitable compensation in respect of loss and damage suffered by the Plaintiff … as a result of breaches of fiduciary… duties and/or breaches of the duty of care and skill owed by the Defendant…arising out of her role as director or employee of the Plaintiff” in the course of the preparation, auditing and certification of the Moulin accounts, the discharge by the defendant of her duties as a member of Moulin’s Audit Committee, and the provision by the defendant of professional advice and services to Moulin. 10. The case as subsequently pleaded by Moulin, put broadly, is that (a) Moulin was insolvent at various stages from about 2001, (b) the defendant had the necessary knowledge or means of knowledge to be aware of fraudulent accounting practices concealing this state of affairs, (c) she should have “blown the whistle” by alerting the board of Moulin, the Stock Exchange and the shareholders and had she done so, then by one or more of these means the fraudulent accounting practices would have ended well before the appointment of the provisional liquidators in June 2005 and (d) the failure of the defendant was a direct and proximate cause of the categories of loss suffered by Moulin, identified below in these reasons as the “the Dividends Loss”, “the Convertible Notes Loss”, “the Share Repurchases Loss”, and “the IND Loss”. 11. The interlocutory nature of this appeal is significant in several respects. First, counsel for the defendant rightly emphasised that at this stage there are but untested allegations against the defendant. Secondly, counsel for Moulin submits that the issue against the defendant is whether on the pleadings there is a reasonably arguable case which should be allowed to go to trial, and that it would be inappropriate to go further and to decide against Moulin difficult questions of law on the basis of assumed rather than decided questions of fact[2]. 12. The Amended Statement of Claim was filed on 13 May 2010, almost 6 years after the defendant ceased to be a director. Moulin sought recovery of (a) dividends amounting to more than HK$242m paid by Moulin between 31 March 2001 and 31 December 2004 out of capital, despite Moulin being insolvent (“the Dividends Loss”), (b) amounts totalling US$15m and more than HK$98m paid by Moulin for the early redemption in 2002 (several years before the appointment of the provisional liquidators) by Moulin of convertible notes, identified as the Chishore Notes and the HSBC Notes, at times when Moulin was insolvent and the early redemptions avoided disclosure of breaches of covenant by Moulin (“the Convertible Notes Loss”), and (c) amounts totalling more than HK$37m paid for share repurchases out of capital during the period 2000 to 2004 (“the Share Repurchases Loss”). 13. On 27 June 2012, Barma J struck out the second and third of these claims[3]. However, on 3 July 2012 Barma J allowed an amendment to plead a claim quantifying Moulin’s loss as at least HK$1.23 billion by reference to the increase in its net deficiency from 31 March 2001 (the date of the first accounts after the defendant became a director), when Moulin contends provisional liquidators would have been appointed had the defendant discharged her duties, and the date of appointment of the provisional liquidators on 23 June 2005 (“the IND Loss”). 14. On 7 December 2012, the Court of Appeal upheld the rulings of Barma J that: (a) the Convertible Notes Loss claim be struck out because Moulin had suffered no loss from the discharge of its legal obligations to the noteholders; and (b) both the Share Repurchases Loss and Convertible Notes Loss claims were “new claims” within the meaning of s 35 of the Limitation Ordinance (Cap 347) (“the LO”) and should not be allowed because they did not, within the meaning of s 35(6) of the LO, arise “out of the same facts or substantially the same facts” as the Dividends Loss claim. 15. However, the Court of Appeal went further and held that the IND Loss claim also was a “new claim” within the meaning of s 35 and struck it out. This left standing only the Dividends Loss claim. This had been made in the original statement of claim, which had been filed shortly after issue of the writ. 16. The relevant effect of s 35 of the LO is that where a “new claim” is sought to be made in the course of an action and such claim would otherwise be statute barred, it will be allowable only if it arises out of “the same facts or substantially the same facts” as a cause of action “in respect of which relief has already been claimed” in the proceeding. However, if the new claim would not be statute barred this restriction imposed by s 35 will not apply, and the new claim would be dealt with by a pleading amendment upon the discretionary grant of leave under O20 r5 of the Rules of the High Court (“the Rules”). Discretion aside, the critical question becomes: what is a “new claim” for the purposes of s 35? Here, s 35(2)(a) defines a new claim as the “addition or substitution of a new cause of action”.[4] The issues 17. There has been no issue in the course of the litigation as to whether amendment to plead the Convertible Notes Loss claim, the Share Repurchases Loss claim and the IND Loss claim should have been refused on discretionary grounds. Rather, the focus of argument was upon the phrase “substantially the same facts” and the avoiding thereby of the engagement of s 35 to bar the amendment. Further, in deciding the issues presented by s 35 there appears to have been little or no attention in the submissions to the significance of the terms of the writ indorsement. That appears to have occurred only where the litigation reached this Court. 18. The first question before this Court is whether the expiry of an applicable limitation period is to be assessed (i) by looking to the terms of indorsement on a writ filed within time, or, (ii) exclusively by looking to the terms of the then current statement of claim, or (iii) by looking to both. Moulin contends for (i). The defendant contends for (ii), but would permit reference to the indorsement to assist interpretation of the statement of claim. 19. For the reasons which follow in paras 22-37 proposition (i) is correct, and the Convertible Notes Loss claim, the Share Repurchases Loss claim and the IND Loss claim are within the purview of the indorsement, and so were not statute barred when introduced into the pleadings. It appeared to be accepted by the parties for present purposes that the relevant limitation period was 6 years, and it is unnecessary here to pursue that subject further. 20. These conclusions mean that s 35 of the LO is not in play. The consequence is that questions 2 and 3 before the Court, which concern the construction and application of s 35, do not arise. 21. That leaves question 4. This poses an issue the identification of which varied significantly in the course of submissions on the appeal. It is sufficient at this stage to indicate that the question concerns the scope of the equitable duties of the defendant as director, and, in particular whether the Convertible Notes Loss claim was properly struck out because, as the defendant submits, even if she had been in breach of her equitable duties the early redemption of the Convertible Notes could not have given rise to any loss to Moulin and without that loss there could be no claim made out for equitable compensation for that breach. Question 1 22. This is: “For the purpose of determining whether an amendment constitutes a ‘new claim’ under s.35 of the Limitation Ordinance (Cap 347), is the identity of the causes of action on which a plaintiff relies to be ascertained (a) by reference to the nature and scope of the claims identified and constituted by the indorsement on the writ of summons itself without regard to the statement of claim; or (b) exclusively by reference to the statement of claim without regard to the indorsement on the writ?” 23. It is necessary to return to the terms of the indorsement as set out in para 9 above. O6 r2(a) of the Rules requires that before a writ is issued it must be indorsed with a statement of claim, or “with a concise statement of the nature of the claim made [and] the relief or remedy required in the action begun thereby”. The text of O6 r2 uses “or” rather than “and”, but it must be read as indicated. With respect to a corresponding text in the then Rules of the Supreme Court in England, Lord Denning MR so decided in Sterman v EW and WJ Moore[5]. Furthermore, O18 r15 throws light upon what is required by the indorsement, and its relationship to the statement of claim by stating: “A statement of claim must not contain any allegation or claim in respect of a cause of action unless that cause of action is mentioned in the writ or arises from facts which are the same as, or include or form part of, facts giving rise to a cause of action so mentioned; but subject to that, a plaintiff may in his statement of claim alter, modify or extend any claim made by him in the indorsement of the writ without amending the indorsement.” (emphasis supplied) 24. The expression “cause of action” is not a term in the law of universal and fixed meaning and content. The relationship between O6 r2 and O18 r15 indicates that a “cause of action” may be “mentioned” in the indorsement even if the indorsement does not specify which has been called “the sequence of essential facts” which must be pleaded and proved in order to establish that cause of action[6]. The phrases in s 35 of the LO “a new claim”, “a new cause of action”, and “a cause of action in respect of which relief has already been claimed in the action” relevantly are concerned with the operation of time limits specified as periods of limitation in Part II (ss 3-21) of the LO. The provisions of the LO then are to be read in harmony with any relevant Rules of Court which will indicate what is sufficient to stop time running for the purpose of the LO. 25. However, the defendant submits that the effect of the Rules is that whilst the nature of the claims made by Moulin are described in the terms of the indorsement, there is sufficient “crystallization” to stop time running only when a statement of claim is filed. If a cause of action is not pleaded in the statement of claim as it then stands, a further claim sought to be added will be “a new cause of action” for s 35 of the LO, and the question whether it is being made out of time will not be answered by reference to the terms of the indorsement on the writ. 26. This interpretation should not be accepted. It is at odds with the significance attached to the indorsement and to what may be seen as a principal purpose of the indorsement to stop the further running of limitation periods. 27. The defendant accepted that rejection of the submission that it was the terms of the pleading which were the sufficient and decisive consideration would lead to an answer to Question 1 which was adverse to her case. 28. For its part, Moulin relies for four propositions upon what was said, with reference to English authority, (including Cave v Crew[7], where the expression “within the purview of the writ” appears first to have been used) by Barwick CJ and McTiernan J in Renowden v McMullin[8]. The propositions are that: (a) the issue of the writ will satisfy the statute of limitations with respect to all claims which fairly fall within the range or purview of the indorsement, (b) the indorsement is not in the nature of a pleading, does not form part of the pleadings, and should not be read as such; rather, the indorsement marks out the perimeter or range of the area within which the plaintiff may express its claim in a formal fashion in the statement of claim whether as originally filed or as sought to be amended, (c) the circumstance that as first delivered a statement of claim does not exhaust the scope of the writ, does not mean that as a matter of law the plaintiff has abandoned all others claim within the scope of the writ,[9] and (d) the allowance of an amendment to the statement of claim to set up a claim within the indorsement will be a matter of discretion under the applicable Rules of Court. 29. The proposition that if a pleading first omits a claim within the purview of the indorsement on the writ this does not amount to abandonment of that claim, and does not have the consequence that a later amendment application must be refused, is consistent with Hong Kong authority. In her written case the defendant accepts that proposition and the concession was rightly made. In the reasons of the Court of Appeal in Komala Deccof & Co SA v Pertamina[10], Hunter JA said: “I think that if a pleader omits a claim from a statement of claim all he is saying is that he is not pursuing that claim for the moment. That omission has no more permanent or irrevocable or irretrievable effect than any other pleading.” His Lordship also rejected the argument that the question whether there was a “new claim” for a provision such as s 35 of the LO was answered by looking to the statement of claim as it then stood, with no regard to the scope of the writ. 30. The propositions of law stated in paras 28 and 29 should be accepted as correct. 31. For these reasons, Question 1 should be answered: “By reference to the nature and scope of the claims within the purview of the indorsement on the writ.” The indorsement in this case 32. That returns one to consideration of the purview of the indorsement on the writ. As Tang VP observed in Ting Siu Wing v Chan Kwok Bun, formerly T/A Perfect Clean Mobile Care[11] how much detail is required of the “concise statement” in the indorsement may vary from case to case. 33. An illustration is provided by Ericsson Ltd v KLM Royal Dutch Airlines[12]. The claim arose out of the alleged theft of goods carried by the defendant airline. The indorsement did not specify the Amended Warsaw Convention or the Guadalajara Convention, but Stone J held that the terms of the indorsement were in sufficiently broad terms to include Convention claims and thus that time had ceased to run before the subsequent amendment of the statement of claim. 34. The indorsement in the present case identifies equitable compensation for breaches of “fiduciary duty” and also for breaches of the duty of care and skill owed by the defendant. Some reference here should be made to passages in the judgment of Millett LJ in Bristol and West Building Society v Mothew[13], which were adopted in Libertarian Investments Ltd v Thomas Alexej Hall[14]. Millett LJ explained that (a) not every breach of duty by a fiduciary (such as a company director) is a breach of a fiduciary duty; (b) it is inappropriate to apply the terms breach of fiduciary duty, for example, to the failure of a trustee or other fiduciary, such as a director, to use proper skill and care in the discharge of his duties and (c) the circumstance that the source of this and other obligations of directors lies in equity does not make the obligations fiduciary duties. 35. However, in the indorsement the term “fiduciary” is used not in its strict sense, but more broadly to encompass the established or asserted equitable duties of a director to act bona fide in the interests of Moulin as a whole, to act fairly between different shareholders, and to consider the interests of creditors if Moulin be insolvent or of doubtful solvency. 36. The obligations enforced by the fiduciary duties identified by Millett LJ in Bristol are proscriptive, and concern avoidance of conflict between duty and personal interest and liability to account for improperly derived gains. The proscriptive duties are, as the decision of the House of Lords in Regal (Hastings) Ltd v Gulliver[15] memorably showed, strictly enforced, even in the absence of the conscious wrongdoing. Where what is at stake is liability for failure by a director to discharge a non-proscriptive duty, such as that to act to bona fide in the interests of the company, a court of equity may be reluctant to intervene in the absence of sharp practice by the director. Of course, some breaches of an equitable duty may also be breaches of a proscriptive duty. The cases considered below at paras 46 and 47 are examples. 37. However, none of the four claims against the defendant with which this appeal is concerned appear to involve breach by the defendant of a proscriptive fiduciary duty. What, as the argument proceeded in this Court, Moulin relies upon in particular are the alleged failures of the defendant in discharge of her equitable duty to act bona fide in the interests of Moulin as a whole. These failures are alleged to have occasioned loss and damage to Moulin for which the defendant must account by providing equitable compensation. 38. For these reasons, the claims made by Moulin are within the purview of the indorsement. Question 4 39. This is expressed in general terms, asking whether: “a company [has] any remedy against a director acting in breach of fiduciary duty (eg for the recovery of equitable compensation) for sums paid away to one creditor at the expense of the other creditors of the company at a time when the company is insolvent?” However, it is apparent that the question is designed to challenge the ruling of the Court of Appeal to affirm the decision of the primary judge to strike out the Convertible Notes Loss claim, on the ground that the payments for early redemption of the convertible notes discharged genuine liabilities of Moulin to the holders of the notes and could not have given rise to any loss to Moulin.[16] 40. The Court of Appeal recorded that it was not disputed that when Moulin became insolvent its directors had owed a duty to have regard for the interests of creditors, and that the duty had been owed not to the creditors but to the company.[17] To the authority cited for those propositions may be added Spies v The Queen[18]. The Court of Appeal also set out a passage from Professor Sir Roy Goode’s work “Principles of Corporate Insolvency Law”.[19] 41. Professor Goode pointed to one significant change in corporate governance upon the intrusion of insolvency. Purported approval or ratification by shareholders of a breach of duty by directors causing loss to the company will be ineffective because it is now the creditors who have the primary interest in the proper application of the assets of the company. The second significant change to which Professor Goode pointed is that when insolvency has arrived or is imminent the directors, in discharging their duty to act in the best interests of the company must allow for the circumstance that is now the creditors who have the primary interest just mentioned. This interest is mediated through the company, in particular through the pari passu rule in a subsequent winding up of the company. The result is that when the company becomes insolvent, or insolvency is imminent directors must consider the interests of creditors, ahead but not to the exclusion of members. 42. Before the Court of Appeal Moulin appears, in effect, to have submitted that it was a reasonably arguable proposition to go to trial that if assets available for pro-rata distribution to the general body of creditors in the winding up were diminished as a result of the repayment of some creditors in full, albeit before the commencement of the preference period, and albeit with no breach of fiduciary duties in their proscriptive sense, the company had suffered loss recoverable from the directors for breach of their equitable duty to have regard to the interests of creditors when they had made the payments. 43. Put shortly, the response of the Court of Appeal was that there could be no equitable compensation recoverable from the directors in such a case without ‘loss’ to the company and prejudice to the creditors proving in a liquidation was not a ‘loss’ to the company. 44. In reaching that conclusion the Court of Appeal considered various decisions including Kinsela v Russell Kinsela Pty Ltd[20], West Mercia Safetywear Ltd (in liq) v Dodd[21], GHLM Trading Ltd v Maroo[22] and Continental Assurance Co of London plc (No. 4)[23]. In this Court, Moulin also relied heavily upon the judgment of Randall QC, as a Deputy High Court Judge in the Companies Court in Hellard v Carvalho[24]. This was delivered on 25 September 2013, after the Court of Appeal decision. 45. Before proceeding further, it is convenient to consider the significance of these decisions for the case Moulin makes in this Court to challenge the adverse ruling of the Court of Appeal. The case law 46. Kinsela concerned a family business and a conflict of duty and interest, namely a lease to directors of the business premises owned by the company which was granted by the company shortly before it went into liquidation. On the application of the liquidator to the Equity Division of the Supreme Court of New South Wales the primary judge declared that the lease was voidable and held that (a) the lease had not been in the interest of the company and the directors had exercised their powers for an improper purpose and (b) there had been an ineffective ratification by the shareholders, in the absence of full disclosure. The Court of Appeal, conscious that it had been the liquidator seeking to avoid the lease, upheld the result but on the basis that, in any event, “in an insolvency context” the shareholders did not have power to absolve the directors, whose duty to the company as a whole extended to not prejudicing the interests of creditors.[25] 47. West Mercia was another case of breach by a director of a proscriptive fiduciary duty. He had guaranteed personally the bank overdraft of a related company. West Mercia owed the related company about £30,000. Shortly before both companies went into liquidation, the director of West Mercia instructed its bank to transfer £4,000 to the related company, thereby reducing its overdraft and his liability on the guarantee. On a misfeasance summons[26] the liquidator sought an order that the director repay the £4,000 with interest. The breach of duty by the director appears to have been put in two ways. First, he had procured the giving by West Mercia of a fraudulent preference to its creditor by reducing the debt of £30,000 by £4,000[27]. Secondly, the director had preferred his personal interest by obtaining a reduction in liability on his guarantee. In the Court of Appeal Dillon LJ described the case as one of “blatant misfeasance”[28], and ordered repayment by the director to West Mercia of the £4,000 plus interest. However, his Lordship added “administrative directions” to the liquidator respecting the consequent distributions, designed to provide a “rough and ready” way of achieving justice between the director, the related company and other unsecured creditors of West Mercia[29]. 48. In neither Kinsela nor West Mercia was the court dealing with issues of the availability and scope of equitable compensation for breach of a non-proscriptive duty which are presented with respect to the early redemption by Moulin of the convertible notes. 49. The decision of Park J in Continental Assurance primarily concerned a decision by the directors on 19 July 1991 that, despite its losses, the company was still solvent and should continue trading. The company went into liquidation on 27 March 1992. In 1997 the liquidators brought proceedings in the Chancery Division against eight directors claiming they were liable to contribute £3,569,000 for the increase in net deficiency alleged to have been caused by (i) wrongful trading, contrary to s 214 of the Insolvency Act 1986 (UK) and (ii) misfeasance by having operated, or allowing to be operated, defective financial and accounting systems which had caused the directors on 19 July 1991 to decide that the company should continue trading. The amount sought to be recovered represented the increase in the net deficiency (“the IND”) between a hypothetical liquidation on 19 July 1991 and the date of the actual liquidation on 27 March 1992. 50. The legislative purpose of s 214 of the United Kingdom statute in imposing personal liabilities on directors has been described as seeking to discourage directors, when the company is in the vicinity of insolvency, from taking excessive risks by trading on in the hope of riding out the crisis, whilst knowing that if their gamble is unsuccessful the additional losses are likely to fall on the creditors[30]. There is no such statutory basis available to the liquidators of Moulin. However, there is some resemblance between the IND in the misfeasance claim by the liquidators in Continental Assurance and the IND Loss claim by Moulin. 51. In Continental Assurance Park J considered that the IND basis was the proper starting point to calculate any damages for misfeasance. His Lordship regarded the misfeasance claim as one of breach of a “common law” duty of directors to exercise an appropriate level of care and skill in the performance of the functions[31]. 52. Park J concluded that the directors had behaved responsibly and conscientiously at all material times and dismissed the wrongful trading claim. He also dismissed the misfeasance claim on the evidence, but added that even if the directors had been in breach of duty the breach was not a cause of the loss formulated as the IND. The decision has no immediate bearing upon the Early Repayment Loss claimed by Moulin. 53. The Court of Appeal also referred to another decision in the Chancery Division, that of Newey J in GHLM Trading Ltd v Maroo[32], for the proposition, in answer to Moulin’s case on the early redemption of the notes, that the discharge by a company of a genuine liability to which it already is subject does not cause any loss to the company. Newey J first emphasized that “questions of breach and remedy need to be distinguished”[33], and then said, as a matter of breach of duty, that “if a director acts to advance the interests of a particular creditor, without believing the action to be in the interests of the creditors as a class…he will commit a breach of duty”. Where however, the company “has not entered an insolvency regime” there will be no “loss” to be remedied because “the company’s balance sheet position is likely to be unaffected”. 54. Thus, his Lordship was not considering the position where a liquidator was engaged in pari passu distribution between creditors. The defendant directors in GHLM, Mr and Mrs Maroo, had been removed at a general meeting of shareholders and the company no longer traded[34]. The company, which was not in insolvent administration, then sought to have declared void, or to avoid, a contract into which the defendants, in pursuit of their own interests, had caused the company to enter. The company succeeded in establishing that the contract was void.[35] The statements by Newey J referred to above thus do not bear directly on the case advanced by Moulin. 55. There remains Hellard v Carvalho[36]. This also was a misfeasance case brought in the Chancery Division by liquidators against a director. A late application to add a preference claim had been refused. The company had been insolvent to the knowledge of the defendant, when in 2005 it had made payments totaling £697,063.21 to its largest creditor (“Engenharia”). The defendant was the dominant director at all relevant times and was held to have been in breach of his duty to act bona fide in the interests of the company and its creditors as a whole. The defendant’s substantial purpose in making the Engenharia payments had been to assist that company and he “was in effect choosing which creditors to pay, and which to leave exposed to a real risk of being left unpaid”.[37] It is apparent from the reasons of the Deputy Judge that he regarded the relevant prejudice or “loss” to the company as assessed not by reference to the state of the balance sheet at the time of the payment, albeit this was the time when the breach of equitable duty occurred, but at the time of the insolvent administration by the liquidators. That conclusion as to the temporal dimension of “loss” is consistent with the case presented by Moulin but contrary to what in the oral submissions by counsel for the defendant in this Court appeared to be a primary submission. In Hellard an order for repayment to the company was made, subject to what was identified as the “West Mercia Proviso”. The reformulation 56. In oral submissions, Moulin relied strongly on the decision in Hellard. Senior Counsel for Moulin accepted that if at trial Moulin succeeded on the IND Loss claim then it would be “not that likely” that it would need to rely on the Convertible Notes Loss claim. But, quite properly, counsel submitted that, against that possibility, the liquidators wished to keep on foot all viable claims. Counsel also emphasised that in the overwhelming majority of cases (of which Continental Assurance may be an example) any claim of breach of duty against the directors will fail because the decision to keep trading and to pay particular creditors was bona fide believed to be in the best interests of the company and was not unreasonable or capricious. 57. Senior Counsel for Moulin, perhaps in response to the considerations regarding the strict enforcement of non-proscriptive equitable duties (which are noted above at para 36), then formulated eight propositions of law as encapsulated in question 4. They are as follows: “ 1. A director owes a duty to act bona fide in the best interests of the company. The duty is owed to the company. 2. In an insolvency context the duty requires the director to take into account the interests of creditors. 3. The duty may extend to not prejudicing the interests of creditors and preserving the assets of the company so that those assets may be dealt with in accordance with ordinary principles of insolvency law, including the fundamental principle of pari passu distribution of the company’s assets amongst all creditors. 4. A director who knowingly causes a company to pay away company assets to a creditor (and who thereby dissipates those assets so that they are not available for pari passu distribution to all creditors) when he does not subjectively believe that the payment is in the best interests of the company may act in breach of duty. 5. The company may pursue equitable remedies (such as equitable compensation) against the director to restore the company to the position that it was in prior to the breach of duty. 6. The assets restored to the company are then available for pari passu distribution amongst all creditors. 7. Equitable remedies are discretionary. The court has power to mould relief depending on the nature and facts and circumstances of the individual case. As a result, orders can be made to ensure that the company and the general body of creditors are not over-compensated. 8. Nothing in 1-7 is said to apply to a breach involving a director’s duties to act with due care and skill.” 58. Having regard, in particular, to Hellard v Carvalho, a case framed consistently with those propositions is reasonably arguable, should not be struck out and should be allowed to go to trial. 59. The question then arises whether the pleading of the Convertible Notes Loss claim which Moulin seeks to have this Court reinstate is so drawn as to be sufficiently consistent with the 8 propositions set out in para 57 above. Counsel for the defendant submitted that the answer should be “no” and that submission should be accepted. 60. The immediately relevant passages of the Further Amended Statement of Claim (a document of 118 pages) are in section G3 (paras 79-127), headed “Insolvency – Breach of Convertible Note Covenants”, and in section N (paras 384-396, 399A) headed “Causation, Loss and Damage”. 61. With respect to the Chishore Notes (para 98), and the HSBC Notes (para 124), it is alleged that the defendant “knew” of the breaches of covenant by Moulin and that the management of Holdings did not disclose this to the board of directors of Holdings, to the shareholders or to the Stock Exchange; it then is alleged (paras 125, 126, 127) that by not insisting on full and accurate disclosure to those parties the defendant breached of her duty to Holdings to act bona fide in its best interests and this breach was “an effective cause” of the losses which Holdings suffered throughout her term as director. 62. Paragraph 384 alleges that the defendant was “aware” or “ought to have been aware” that Moulin as “insolvent or near insolvent or of doubtful solvency”; it is further alleged that had she complied with her duties to Holdings, including, an obligation, if other steps failed, to “blow the whistle”, then at least by the time of the publication of the Annual Report for the year ended 31 March 2001, Moulin would have been placed in liquidation (para 392). As to remedy, Moulin accepts that it will account to the defendant as to ensure there is no double recovery by Moulin (para 395). 63. It may be accepted that references in the pleading to “knowledge” are to be read with an understanding that at trial actual (not merely constructive) knowledge of the existence of a fact or a state of affairs may be inferred if the party is found to have wilfully shut his eyes and consciously decided not to open them[38]. 64. Counsel for Moulin referred to para 156 of the Further Amended Statement of Claim, which appears in section I, headed “Overview of False Accounting and Defendant’s Breaches”. This perhaps comes closest to an allegation along the lines of Moulin’s proposition 4. But it does not plead in terms that the defendant, by not “blowing the whistle”, thereby “caused” Moulin to repay the notes, and “thereby” diminished the pool of assets available for pari passu distribution by the liquidators, when the defendant had not “subjectively believed” the early repayment to be in the interests of Moulin; nor does it plead that this failure by the defendant was a breach of duty to act in the interests of Moulin as a whole and generated an equity against the defendant requiring her to restore the note redemption payments. Conclusions 65. In the light of what has been said above in paras 57 and 58 it may be possible for Moulin to plead the claim in terms presenting a case to go to trial. However, there are several difficulties. The first is that as it now stands the pleading of the claim is, in the technical sense used in O18 r19 of the Rules, “embarrassing” to the fair trial of the action. The revelation of the terms in which the Convertible Notes Loss claim is pleaded should not be left for the persistent reader to assemble as if dealing with a jig-saw puzzle. The second difficulty is that in the text of the present pleading there appears entanglement between the various claims. This makes difficult, if not impossible, any surgical excision of the Convertible Notes Loss claim which does not do violence to the pleading of the remaining claims. 66. In these circumstance, the better course is to: (a) allow the appeal, (b) set aside so much of the order of the Court of Appeal as struck out the IND Loss claim, and affirmed the striking out of the Shares Repurchases Loss claim, and the Convertible Notes Loss claim, but (c) declare that as presently pleaded the Convertible Notes Loss claim does not plead a triable cause. 67. That leaves it for Moulin, if so advised and in the light of what is said in paras 57 and 58 of these reasons, to seek leave to replead, subject to the discretion of the Court. 68. Each side has had a measure of success in this Court. There should be an order nisi that no order be made as to the costs of the appeal. The order nisi will become absolute 21 days after the handing down of this judgment unless, within that period, either party serves on the other party, and lodges with the Court, written submissions seeking a different costs order. If so, the other party will have liberty to serve and lodge written submissions on costs within 21 days thereafter. Written submissions must not exceed 10 single-sided A4 pages of ordinarily legible print, and non-compliant submissions will not be accepted. Any further procedural directions that may be sought will be dealt with by the Registrar. Chief Justice Ma: 69. For the above reasons, the appeal is allowed and the Court makes the orders set out in para 66 above. The Court also makes an order nisi as to costs as set out in para 68 above. Mr Robin Dicker QC and Mr Charles Manzoni SC, instructed by Lipman Karas, and Mr Jason Karas (Solicitor Advocate) of that firm, for the Appellant Mr Alan Steinfeld QC, Mr Paul Shieh SC and Ms Janet Ho instructed by Carpio, Mak & To, for the Respondent [1] Moulin Global Eyecare Holdings v Olivia Lee Sin Mei [2013] 1 HKLRD 744 [2] See Altimo Holdings v Kyrgyz Mobil Tel Limited [2012] 1 WLR 1804 at 1825 at [83]-[84] [3] Moulin Global Eyecare Holdings Ltd v Olivia Lee Sin Mei [2012] 4 HKLRD 263 [4] Section 35(2)(b) also refers to the “addition or substitution of a new party”, but this is of no relevance to the present case. [5] [1970] 1 QB 596 at 603 [6] See Roberts v Gill [2011] 1 AC 240 at 273-274 at [108] [7] (1893) 62 LJ Ch (NS) 530 at 531 [8] (1970) 123 CLR 584 at 595-596 [9] This proposition appears to have been the principal cause of disagreement in Renowden between Barwick CJ and McTiernan J on the one hand, and Kitto, Menzies and Owen JJ on the other. [10] No 167/1986, 3 April 1987, unreported [11] [2012] 5 HKC 87 at 89 [12] [2006] 1 HKLRD 584 at 600-603 [13] [1998] Ch 1 at 16-17 [14] (2013) 16 HKCFAR 681 at [55] [15] [1942] 1 All ER 378 [16] [2013] 1 HKLRD 744 at [17] – [34] [17] [2013] 1 HKLRD 744 at [25] [18] (2000) 201 CLR 603 at [93] –[95]; [2000] HCA 43 [19] 3rd Ed (2005) at §14-20. See also at §14-19, and see further Matthew Berkahn “Directors Duties to ‘The Company’ and to Creditors : Spies v The Queen,” (2001) 6 Deakin Law Review 360 [20] (1986) 4 NSWLR 722 [21] [1988] BCLC 250 [22] [2012] 2 BCLC 369 [23] [2007] 2 BCLC 287 [24] [2013] EWHC 2876 (Ch) [25] (1986) 4 NSWLR 722 at 732 [26] In Hong Kong this procedure is provided by s 276 of the Companies Ordinance [27] In Hong Kong provision respecting fraudulent preferences is found in s 266 of the Companies Ordinance [28] [1988] BCLC 250 at 254 [29] [1988] BCLC 250 at 255 [30] Davies and Worthington (eds) “Gower and Davies’ Principles of Modern Company Law” 9th Ed (2012) at §9-6 [31] [2007] 2 BCLC 287 at 441 at[393] [32] [2012] 2 BCLC 369 [33] [2012] 2 BCLC 369 at 407-408 at [168] [34] [2012] 2 BCLC 369 at 394 at [98] [35] [2012] 2 BCLC 369 at 410 at [179] [36] [2013] EWHC 2876 (Ch) [37] [2013] EWHC 2876 (Ch) at [106] [38] The English and Scottish Mercantile Investment Co v Brunton (1892) 2 QB 700 at 707-708; OBG Ltd v Allan [2008] 1 AC 1 at 30 at [41].
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Tang PJ: 3. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: 4. The principal issue in this appeal is whether the appellant’s conviction by a magistrate for failing, without reasonable excuse, to comply with an order to remove a canopy from the top of his house was correctly upheld by the Court of First Instance. This requires the Court to consider the questions of whether the building of the canopy, and its additional height, are to be taken into account in determining whether the appellant’s house, which is situated in the New Territories, is exempt from the provisions of the Buildings Ordinance,[1] section 14 of which requires prior permission to be given for any building works.[2] 5. These questions turn primarily on the construction of certain provisions of the now repealed Buildings Ordinance (Application to the New Territories) Regulations (Cap.322, 1984 Ed.) (“the 1984 Regulations”) (set out in Section B.1 below), which applied, and continue to apply, to building works carried out prior to 16 October 1987. Certain building works, as defined in those regulations, were exempted from the general provisions of the Buildings Ordinance. A. The facts and proceedings below A.1 The house and canopy in issue 6. On 14 December 1981, the appellant became the owner of a piece of land in Shatin (Lot No.1780 in D.D. 281) by virtue of New Grant No.11691 (“the New Grant”). In 1985, he built a three-storey village-type house on the lot and a Certificate of Compliance was issued by the District Lands Officer, Shatin, certifying that all positive covenants of the New Grant had been complied with. The house measures 700 square feet (35 feet x 20 feet) and is 25 feet in height. 7. In 1986, the appellant constructed a canopy of about 400 square feet on the roof of the house. This canopy was identified as a “suspected illegal roof-top canopy” in a letter from the District Lands Officer, Shatin, dated 7 October 1987. By letter dated 29 October 1987, the District Lands Officer, Shatin, required the appellant to show that the canopy had been authorised. On 6 July 1988, a notice was posted on the premises and, by letter dated 19 July 1988, the District Lands Officer, Shatin, demanded that the canopy be demolished. This was followed by a letter requiring rectification of the breach of the New Grant and threatening re-entry. 8. In 2011, the appellant extended the canopy, which is 2.7m in height, to cover an area of approximately 467 square feet.[3] A.2 The summons 9. On 29 January 2011, the Buildings Authority received a complaint about the canopy and conducted an inspection. As a result, on 30 March 2011, the Buildings Authority issued an order under section 24(1) of the Buildings Ordinance demanding the removal of the canopy within 30 days as “unauthorised building works”.[4] A compliance inspection carried out by the Buildings Authority on 4 July 2011 revealed that the canopy was still in place. This led to further warning letters from the Buildings Authority to the appellant and further compliance inspections. 10. When the canopy was still not removed, a summons was issued against the appellant and he was tried before a magistrate for contravention of section 40(1BA) of the Buildings Ordinance for failing, without reasonable excuse, to comply with the order under section 24. A.3 The proceedings below 11. On the appellant’s trial on the summons,[5] the Magistrate found that the works to the canopy in 2011 rendered the canopy a new structure different from the original canopy.[6] She therefore held that the 1984 Regulations did not apply.[7] Accordingly, by virtue of the Buildings Ordinance (Application to the New Territories) Ordinance (Cap.121) the canopy was not exempt from, and was caught by, the provisions of the Buildings Ordinance and the section 24 order served on the appellant was valid.[8] She concluded that the canopy constituted unauthorised building works contrary to section 14 of the Buildings Ordinance and convicted the appellant and imposed a fine of $10,400 for the offence. 12. On intermediate appeal,[9] the Judge reversed the Magistrate’s finding that the extension of the canopy in 2011 amounted to the construction of a new canopy[10] and there was no challenge to this. He then went on to consider whether, since the canopy was not new, the building of the original canopy in 1985 was lawful. That issue turned on the question of whether, by reason of regulation 3 of the 1984 Regulations (set out below), the provisions of sections 14 and 24 of the Buildings Ordinance did not apply to the house. The Judge held that regulation 3 did not apply because the erection of the canopy was not “building works for the alteration of … a building” nor was it “building works … connected with a building”.[11] The Judge therefore concluded that the erection of the canopy was not exempt from the provisions of the Buildings Ordinance and, since permission to build it had not been obtained, it constituted unauthorised building works and the section 24 order had been properly issued.[12] The Judge was not persuaded by the appellant that he had reasonable excuse for failing to comply with the section 24 order and, accordingly, the conviction was affirmed and the appeal dismissed. [13] A.4 Leave to appeal to this Court 13. The appellant sought to challenge the Judge’s conclusion that the building of the canopy in the present case did not constitute “building works … connected with a building” within the meaning of regulation 3(1)(b) of the 1984 Regulations. On the appellant’s application for certification of a point of law, the Judge observed: “It was my ruling that although the canopy is physically connected to the building, it is not building works connected with the building. In my judgment, ‘building works connected with the building’ connotes connection for reason or for purpose. To be ‘building works connected with the building’, it has to be of such a nature and a degree of importance that it plays a role to make the building fit for the purpose it is built. Otherwise, the legislature could have simply adopted the wordings ‘building works connected to the building’.”[14] 14. Leave to appeal to this Court was granted by the Appeal Committee in respect of the following question of law, namely: “Whether a canopy or like structures built or erected prior to 16 October 1987 at or on a building to which the Buildings Ordinance (Application to the New Territories) Regulations (Cap. 322, ‘the Regulations’, now repealed) [i.e. the 1984 Regulations] applies, comes within the meaning of ‘building works connected with the building’ under Regulation 3(1)(b) of the Regulations.”[15] A.5 The issues in this appeal 15. In the Appellant’s Case it is contended that the Judge’s conclusion that the erection of the canopy was not “building works … connected with the building” within regulation 3(1)(b) of the 1984 Regulations is wrong.[16] For its part, the respondent does not seek to uphold this interpretation of the regulation by the Judge and accepts that the erection of the canopy does fall within the meaning of that phrase in the regulation.[17] Accordingly, it is common ground between the parties that the Judge’s reasoning leading to the conclusion that the erection of the canopy constituted building works which were not exempt from the Buildings Ordinance cannot be supported. 16. Because of this common ground, the certified question as to whether the building or erection of a canopy prior to 16 October 1987 constitutes “building works … connected with the building” in regulation 3(1)(b) is of diminished importance in this appeal. Of greater importance is the further question of whether the intermediate appeal was nevertheless rightly dismissed and the conviction properly confirmed by the Judge because the erection of the canopy did constitute building works to which the Buildings Ordinance applies. B. The statutory provisions in question B.1 The particular provisions to be construed in this appeal 17. Regulation 3 of the 1984 Regulations, now repealed, provided as follows: “3. (1) Sections 4, 9, 14, 15, 16, 17, 21, 23, 24, 28 and 30 of the [Buildings] Ordinance and the regulations made under that Ordinance shall not apply to – (a) building works for the erection of a building which will, when such works have been carried out, be a building to which this regulation applies; (b) building works for the alteration of or which are otherwise connected with a building which is, or will when such works have been carried out, be a building to which this regulation applies; or (c) building works for the demolition of a building to which this regulation applies. (2) This regulation applies to any building situated in the New Territories which – (a) … (b) has a roofed over area not exceeding 65.03m2 and does not exceed 7.62m in height; …”. 18. In section 2 of those regulations, it was provided that “height”: “when used in relation to a building, means the height measured to the highest part of the building or, in the case of a building which is roofed, to the level of the apex in the case of a pitched roof or to the level of the main roof in the case of a flat roof”. B.2 The legislative context of those provisions 19. The legislative context of the above provisions is the application of the Buildings Ordinance to the New Territories and the exemption, by different means, of certain village-type houses from the scheme of building regulation contained in that ordinance. 20. The first consolidated legislation relating to the construction of buildings was the Buildings Ordinance 1955 (No. 68 of 1955) which applied to “the island of Hong Kong, Aplichau, Kowloon and New Kowloon”[18] but not the New Territories save to the extent applied by order of the Governor-in-Council.[19] 21. Subsequently, the Buildings Ordinance 1955 (Application to the New Territories) Ordinance 1960 (No. 27 of 1960) (“BO(ANT)O”) was enacted to extend the application of the Buildings Ordinance 1955 to the New Territories. However, the Building Authority was given power under section 4 of the BO(ANT)O to exempt the application of, amongst other sections, section 9 of the Buildings Ordinance 1955[20] to “building works for the erection, alteration or demolition of, or otherwise in connection with, a village-type house or a permitted building situated or to be situated in the New Territories”. Whether what was to be built constituted, or would constitute, a village-type house was left to the determination of the District Commissioner.[21] 22. In 1960, the BO(ANT)O was amended by the Buildings Ordinance 1955 (Application to the New Territories)(Amendment) Ordinance 1960 (No. 56 of 1960) to replace section 4 of the BO(ANT)O by a new section 4 giving the Governor-in-Council power to make regulations for the exemption of: “… building works for the erection, alteration or demolition of, or which are otherwise connected with, such buildings, situated or to be situated in the New Territories, as may be specified.” 23. Pursuant to this power, the Buildings Ordinance 1955 (Application to the New Territories) Regulations 1960 (G.N.A. 142 of 1960) (“the 1960 Regulations”) were made which, by regulation 2, exempted from the provisions of the Buildings Ordinance certain dwelling houses in the New Territories which were or would, when built, be of a certain area and height. In general, these were houses of a simple type, normally occupied by villagers.[22] 24. In 1967, new regulations, the Buildings Ordinance (Application to the New Territories) Regulations 1967 (L.N. 91 of 1967) (“the 1967 Regulations”), were made in substitution for the previous regulations and extended the exemption for certain building works to all New Territories village houses of particular dimensions, namely (for present purposes) one which “has a roofed over area not exceeding 700 square feet and does not exceed 15 feet in height, or, where no structural reinforced concrete is used in its construction, 25 feet in height”.[23] These dimensions were subsequently amended to permit the use of reinforced concrete in two-storey buildings as well as single-storey buildings[24] and to convert the imperial measurements into their metric equivalents so that the relevant building was one which “has a roofed over area not exceeding 65.03m2 and does not exceed 7.62m in height” [25] (being the dimensions as they stood in the 1984 Regulations). The 1967 Regulations as thus amended were how the regulations stood in the 1984 edition of the Ordinances of Hong Kong. B.3 Legislation subsequent to the erection of the canopy 25. The provisions in the 1984 Regulations were repealed and replaced by the Buildings Ordinance (Application to the New Territories) Ordinance 1987 (Ord. No. 60 of 1987) (Cap.121) (“Cap.121”), which came into operation on 16 October 1987 (i.e. after the erection of the canopy in question in the present case). Cap.121 now applies the Buildings Ordinance to the New Territories, save that the Director of Buildings and Lands may, subject to certain statutory maximum dimensions, issue certificates of exemption in respect of building works in the New Territories.[26] 26. Section 2(1) of Cap.121 now provides that “‘height’ in relation to any building means the perpendicular height of the building measured from the level of its lowest point at ground level to, subject to subsection (4), the level of the highest point of its roof”. Certain excluded structures of specified maximum dimensions are listed in section 2(4) of Cap.121, namely a stairhood, parapet and water storage tank. C. Preliminary matters 27. As noted above, there is no dispute between the parties that the Judge’s interpretation of regulation 3(1)(b) is not supportable. It will be recalled that the Judge reached the conclusion that, although the erection of the canopy constituted building works, those works did not amount to the “alteration of … a building” or which were otherwise “connected with a building” within that regulation. Although the Judge accepted that the canopy was physically connected to the building, he introduced an additional requirement that the building works, to be “connected with” a relevant building, had to be “of such a nature and a degree of importance that it plays a role to make the building fit for the purpose it is built”. 28. There is no warrant for this additional requirement to be added to the wording of regulation 3(1)(b). Nothing in the 1984 Regulations, nor in their predecessors, suggests that qualification for exemption for building works from the relevant building regulations was dependent upon those building works being for some specific nature or purpose or on the extent or degree of those works. On the contrary, the qualifying criterion for exemption was concerned with the dimensions of the relevant building (i.e. its size and height). For this reason, the phrase “connected with the building” is clearly wide enough to cover such other building works physically joined with a building that do not amount to its “erection”, “alteration” or “demolition”. 29. Whilst accepting that the Judge’s reasoning for upholding the conviction could not be supported, the respondent contended that the conviction could nonetheless be sustained on the basis that the appellant’s house could not qualify under the 1984 Regulations for exemption from the Buildings Ordinance because its height, with the addition of the canopy, was greater than the maximum height permitted for exemption. For its part, the appellant objected to the respondent raising this alternative basis for upholding the conviction because it is a new issue and leave was neither sought nor obtained from the Appeal Committee to raise it. The appellant contended that the question as to how the height of the building is to be measured is one which should have been the subject of a separate application by the respondent for certification and leave to appeal. 30. It is, however, established that it is not necessary for a respondent to a civil appeal who seeks to defend a result on further or other grounds to obtain leave to advance such grounds; instead, he may simply include those grounds in his printed case.[27] So long as an appellant is not subject to unfair surprise and subject to the rule in Flywin v Strong & Associates Ltd,[28] there is no good reason why the same principle should not apply in the context of a criminal appeal. In the present case, the point sought to be argued is one which goes to the substantive question of whether the appellant’s conviction was proper or not and, having been raised in the Respondent’s Case, dealt with in the evidence and considered in both courts below, it would be appropriate to entertain the issue on this final appeal in order comprehensively to determine the correctness or otherwise of the appellant’s conviction under appeal. 31. Another preliminary argument that was raised by the appellant in response to the respondent’s contention that the appellant’s house exceeded 7.62m in height because of the addition of the canopy was that, on a true construction of the 1984 Regulations, as long as the height of the original building did not exceed 7.62m, the exemption from the Buildings Ordinance would apply, regardless of whether the height of any building works (in this case, the canopy) would cause an increase in height (as the canopy did in the present case). The appellant’s argument, which was not entirely clear, entails reading the words “a building which … will when such works have been carried out, be a building to which this regulation applies” in the regulation as only applying to works on a building which has not yet been completed and as not applying to additional works on a building after it has been completed.[29] 32. This narrow and limiting construction of regulation 3(1)(b) contended for by the appellant is clearly wrong. The words “a building which … will when such works have been carried out, be a building to which this regulation applies” clearly refer to building works on any building (whether completed at some earlier date or not) which, after those works have been carried out, will fall within the dimensions specified in regulation 3(2). They are intended to ensure that a building, which either (a) is already, or (b) will, after the execution of the alteration or connected works, be larger than the stipulated dimensions in regulation 3(2), is subject to the relevant provisions of the Buildings Ordinance. The appellant’s reading of the relevant provisions, on the other hand, gives rise to absurd consequences (as to which see paragraph [47] below). D. The substantive question in the appeal D.1 The parties’ contentions as to the building’s height 33. On behalf of the respondent, Mr Martin Hui SC[30] contended that the height of the building in the present case is to be measured to the top of the canopy. Since it is common ground that the house as originally built was 25 feet high (i.e. 7.62m), the additional height of the canopy, which measures 2.7m in height, will necessarily mean that the building is over the height limit in regulation 3(2)(b) so that it is not exempted from the specified provisions of the Buildings Ordinance. On the appellant’s behalf, whilst accepting that the top of the canopy is a roof and that the canopy and its roof were part of the building (concessions that were rightly made), Mr K.M. Chong[31] contended that that roof is not the main roof of the house and that its height is to be measured instead to its original flat roof, which is 25 feet high, and the height of the canopy is to be ignored, so that the building is within the height limit in regulation 3(2)(b) and therefore exempt from those provisions of the Buildings Ordinance. 34. It is clear that if the building is to be measured to the top of the canopy it necessarily exceeds the maximum height stipulated in regulation 3(2)(b) of the 1984 Regulations (i.e. 7.62m). This in turn will have the consequence that the exemption in regulation 3(1), on which the appellant seeks to rely by way of defence to the charge against him, does not apply to his house. The determination of which of the appellant or the respondent is correct on this issue is therefore the critical question in this appeal and this turns on the proper construction of the definition of “height” in regulation 2 of the 1984 Regulations. D.2 The statutory definition of “height” 35. The definition of “height” in regulation 2 of the 1984 Regulations (set out above) is divided into three distinct parts. The term “‘height’, when used in relation to a building, means the height measured”: (1) for a building with no roof, e.g. such as a bridge,[32] “to the highest part of the building”; or (2) for a building which is roofed with a pitched roof, “to the level of the apex”; or (3) for a building which is roofed with a flat roof, “to the level of the main roof”. 36. The appellant’s house is a building which is roofed and not one “with no roof”, so we are concerned here with a structure that is either within part (2) or part (3) of the definition. Although there is a hint in the photographs of the appellant’s house and canopy that the canopy may have a pitched roof, i.e. an angled or sloping roof, there is no finding of fact to this end and the evidence about the canopy suggests that its height is a uniform 2.7m which would suggest its roof is flat. So the critical question here is what is meant by the words “to the level of the main roof”? 37. As is now well-established, the modern approach to statutory interpretation is to construe the statutory language having regard to its context and purpose.[33] Contextual and purposive construction is the method by which courts arrive at an interpretation that gives effect to the legislative intention, always bearing in mind that the interpretation arrived by means of that approach must be such as the language of the statute, understood in the light of its context and purpose, can bear.[34] D.3 The natural and ordinary meaning of “the level of the main roof” 38. The Oxford English Dictionary (2nd Ed., 1989) (“OED”) defines the noun “roof” as meaning “[t]he outside upper covering of a house or other building; also, the ceiling of a room or other covered part of a house, building, etc.” A further definition is “[t]he highest point or summit of something; that which completes or covers in”. So understood, measuring a house to its roof would appear to be a straight forward concept: the house would be measured to its highest outside upper covering. In this case, this would tend to suggest the top of the canopy, since that has a roof providing an outside upper covering to the structure. 39. However, the phrase in the definition of “height” is “main roof”. The OED includes as definitions of the adjective “main” the meaning “[c]hief in size or extent; constituting the bulk or principal part; the chief part of” and “[g]reat or important above others of the kind; of pre-eminent importance; principal, chief, leading”. This does provide some support for the appellant’s case in this appeal that the “main roof” of the house is the roof which is the principal roof in the structural sense; i.e., in the case of the appellant’s house, the original flat roof of the house as built in 1985 rather than the roof of the canopy. 40. I do not, however, think that the language of the definition necessarily points to this conclusion. On the contrary, in my view, the words “main” and “roof” must be construed together and, when combined, are intended as a matter of natural and ordinary language to mean the top-most, or highest, outside upper covering of the structure. This is strongly supported by the fact that the word “roof” itself is a reference to the highest point of a house or building. It is also supported by the anomalous and confusing result that would arise if a flat-roofed house had an annex (itself with a flat roof) built on top of it covering exactly half of the floor area of the house. There would be two equal sized flat roof areas exposed to the elements. Which of them is the “main roof”? The natural or ordinary meaning of the words would, in my view, lead to the answer that it is the roof of the annex. To read qualitative characteristics, such as size, material, strength or proportion, into the definition would result in having to make value judgments of a potentially subjective, and therefore possibly arbitrary, nature as to the quality of the roof of the annex. 41. It is true that the Legislature could have simply used the word “highest” instead of “main”. However, since a flat roof is normally intended to be accessible and to provide a usable area, that might have led to uncertainty in respect of minor structures on the flat roof (to which I shall return below). Moreover, the conclusion I have reached as to the natural and ordinary meaning of the words “main roof” is emphatically reinforced by having regard to the context and purpose of the statutory language. D.4 The contextual meaning of “the level of the main roof” 42. The phrase “the level of the main roof” is one measuring point out of three included in the definition of the term “height” in regulation 2. The other two measuring points are clearly and expressly references to the highest point of the relevant types of building and this was accepted by Mr Chong. First, a building with no roof is measured to its “highest part”. Next, a building with a pitched roof is measured to “the level of the apex”. The apex of a thing is its top or highest part and, in the case of a pitched roof, its apex is the highest point created by the pitch. In the context of a pitched roof, it may be noted that, in Re Minos Estate Limited,[35] the Full Court considered the issue of how height was to be determined under the 1967 Regulations (which contained the same definition of “height” as the 1984 Regulations) in respect of a house with two pitched roofs. Each member of the court held that the height of the house was to be measured to the top of the higher of the two apexes.[36] This conclusion is consistent with the natural and ordinary meaning of “apex” (i.e. the top or highest part of something forming a point) and must be correct. 43. Contextually within regulation 2, therefore, it is clear that the measurement of height is clearly to be taken, in respect of these two measuring points, to the highest point. It would therefore be strange if the measuring point for a building with a flat roof were to be taken to a “main roof” which was not the highest point of the building. Apart from inconsistency, it would create the anomaly that a building with a flat roof, which was 25 feet (7.62m) high, could have a sizeable structure built on that flat roof which would not count towards its overall height. It would be most surprising if this were the case. A further anomaly would be the case of a house with a flat roof on which a canopy or structure with a pitched roof was then constructed. Would that building be one with a flat roof or a pitched roof? If the latter, its height would be measured to the apex of the canopy or additional structure. But if the former, would its height only be measured to the flat roof? That, again, would seem most surprising. 44. The contextual argument does not stop with regulation 2. If one has regard to the other provisions of the 1984 Regulations, and in particular regulation 3, it is clear that the whole context of the legislation is the determination of maximum dimensions for small village-type houses in the New Territories that will, exceptionally, be exempt from the normal rigours of building control and supervision (and, as shown above, this is a consistent theme through the legislative history). Furthermore, as already noted in paragraph [32] above, it is plain from the express wording of regulation 3(1) that the provision is concerned to address the dimensions of the building after the completion of works, whether those works are for the erection or alteration of the building or are in connection with the building. In regulation 3(1)(b) in relation to alteration works or works in connection with the building, this is clear from the inclusion of the reference to “a building which … will when such works have been carried out, be a building to which this regulation applies”. The 1984 Regulations therefore look to the completed building including any additional works. 45. In context, therefore, the words “the level of the main roof” in the definition of “height” indicate that the building is to be measured to its highest point and not to some point lower than that. D.5 The purposive meaning of “the level of the main roof” 46. The long title of the Buildings Ordinance states that its purpose is “[t]o provide for the planning, design and construction of buildings and associated works; to make provision for the rendering safe of dangerous buildings and land; and to make provision for matters connected therewith.” The purpose of the 1984 Regulations is to extend exemptions from various provisions of the Buildings Ordinance to building works in respect of houses in the New Territories of certain limited dimensions. The qualifying characteristics for exemption are therefore the limited dimensions of the house, which are now, and have for some time been, the metric equivalent of 700 square feet in area and 25 feet in height (i.e. 65.03m2 and 7.62m respectively). 47. Given that statutory purpose, construing the words “the level of the main roof” to mean that buildings exceeding the limit of the dimensions for exemption are nevertheless exempt from the relevant provisions of the Buildings Ordinance would not be giving them an interpretation consistent with their statutory purpose. On the contrary, it would lead to the anomaly (bordering on the absurd) that so long as a New Territories house was built with a flat roof to a height of 25 feet, it would be possible thereafter to build an annex covering a substantial part of the roof area which was, say, 10 or even 20 feet high but which did not count towards the overall height of the house for the purposes of determining if it was exempt from the provisions of the Buildings Ordinance. Since it is the dimensions of the house that justify its exemption from the provisions designed to ensure a safe construction, it would not make sense to exclude annexes built on a flat roof in this way. But that would be the consequence of accepting the appellant’s argument in this appeal. D.6 Height measured to level of the highest roof 48. For the foregoing reasons, I would conclude that the proper construction of the words “the level of the main roof” in regulation 2 of the 1984 Regulations requires the building in question to be measured to the highest flat roof of the building providing substantial shelter to its occupants (and ignoring minor structures, discussed below). In the present case, such substantial shelter is clearly provided since the flat roof of the canopy is a permanent structure, covers 460 square feet of the rooftop and provides substantial cover to anyone using the area beneath the canopy. The height of the canopy is 2.7m above the height of the original house, which itself was 7.62m. The total height of the appellant’s house is therefore 10.32m, which is in excess of the maximum height to qualify for exemption under regulation 3(1). D.7 Miscellaneous arguments raised by the appellant 49. The appellant sought to rely on the definition of “height” in Cap.121 (set out in Section B.3 above), introduced in 1987, to suggest that there was a consistent theme in the definition of “height” in the 1984 Regulations, namely that height was to be measured to the roof of the main structure of a building, excluding certain other parts on top of a flat roof that might be higher than the building’s “main roof”. As the Court recently held, though, there may be difficulties in referring to a subsequent, amending enactment as an aid to construction of an earlier statute.[37] In any event, Cap.121 clearly cannot be regarded as a relevant part of the context of the legislation being construed, in this case the 1984 Regulations. 50. In the Appellant’s Case,[38] it was contended that the Government’s Small House Policy supports the conclusion that the Legislature intended a deliberate concession to exempt all buildings works in respect of village-type houses from compliance with the regulatory regime in the Buildings Ordinance. However, this argument is not supported by a review of the legislative history of the legislation applying the Buildings Ordinance to the New Territories, which is summarised above. It is clear that the relevant legislation eventually resulting in the 1984 Regulations pre-dated the formulation of the Small House Policy and the policy does not assist in the interpretation of the relevant provisions. In any event, the Small House Policy was designed to exempt certain simple structures of limited dimensions from the scheme of the Buildings Ordinance and there is nothing in the policy to suggest that the dimensions were not to be measured in an orthodox manner. On the contrary, there is nothing in the policy to suggest that a house with a flat roof was to be measured in such a way that its height would not be the measurement to its highest point. 51. It was also submitted on behalf of the appellant that the statutory provisions are penal and so should not be construed so as to create criminal liability unless clear. The fact that a statute renders a specified activity criminal is not, however, a reason for giving the definition of the specified activity an artificially narrow meaning. It is merely a reason (although not always a decisive one) for giving the definition the narrower meaning, when it is, on a fair reading, otherwise equally capable of having a wider or narrower meaning. Since, in my view, on a proper construction of the definition of “height”, it is clear that the height of the canopy is to be included in the measurement of the height of the house, this principle provides no good reason to apply the appellant’s different and, in my view, incorrect construction of that definition. 52. A further submission advanced on behalf of the appellant was that it was sufficient to subject the appellant’s house to control by way of enforcement of the lease conditions in the New Grant. This was made in the context of a submission in the Appellant’s Case that, prior to the enactment of Cap.121 in 1987, there was no legislative control over the erection, alteration and demolition of village-type houses in the New Territories and that building works resulting in deviation from a contractual building licence in a lease could only be “purged” by way of lease enforcement action by the Government. [39] In the New Grant, “height” was defined as being measured “to the highest part of the building, excluding one stairhood not exceeding 7.44 square metres in area or 2.14 metres in height erected and used solely for the purpose of gaining access to the roof of the building and excluding also any parapet not exceeding 1.22 metres in height”. Mr Chong’s argument appeared to be that this definition in the New Grant supported the appellant’s construction of “height” in regulation 2 of the 1984 Regulations and reinforced the contention that “the level of the main roof” would not necessarily be the highest point of the building. 53. There is no basis for using the terms of the New Grant as a means to construe the relevant provisions in the 1984 Regulations. In any event, even applying the definition of “height” in the New Grant, the height of the appellant’s house would include the height of the canopy, since that does not fall within either of the excluded parts in that contractual definition. The appellant’s further submission that, prior to the enactment of Cap.121, there was no legislative control over the erection, alteration and demolition of village-type houses in the New Territories is simply not borne out by a review of the relevant legislation (see Section B.2 above). 54. What the terms of the New Grant do highlight is that, insofar as the Government was concerned, minor additional structures on the flat roof would not count towards its total height. On what I conclude (in Section D.6 above) to be the proper construction of the phrase “the level of the main roof” in regulation 2 of the 1984 Regulations, i.e. the highest flat roof of the building providing substantial shelter to its occupants, a similar conclusion is reached. Although each case will depend on its particular facts, this construction will generally exclude a minor additional flat roof constituted by a stairhood, a parapet or a small water storage tank or similar structure. E. Conclusion and disposition 55. For these reasons, I would accept the respondent’s contention that, notwithstanding the Judge’s erroneous construction of regulation 3(1)(b) of the 1984 Regulations, the appellant’s conviction under the summons was properly upheld. The provisions of the Buildings Ordinance did apply to the construction of the canopy in question and, since its construction constituted unauthorised building works, the section 24 order was properly served on the appellant. In the absence of any defence of reasonable excuse, the appellant was properly convicted for failure to comply with that section 24 order. 56. I would therefore dismiss this appeal and make an order nisi that there be no order as to costs. In the present appeal, although the conviction has been upheld on a different ground (not identified on the application for leave to appeal), the appellant succeeded on the point of law raised by the Judge’s construction of regulation 3(1)(b). Lord Neuberger of Abbotsbury NPJ: 57. I agree with the judgment of Mr Justice Fok PJ. Mr Martin Hui SC, DDPP and Ms Fung Mei Ki Mickey, SPP, of the Department of Justice, for the Respondent Mr K M Chong and Mr Darren Poon, instructed by K C Ho & Fong, for the Appellant [1] (Cap.123) (“the Buildings Ordinance”). [2] Section 14(1) of the Buildings Ordinance provides: “Save as otherwise provided, no person shall commence or carry out any building works or street works without having first obtained from the Building Authority – (a) his approval in writing of documents submitted to him in accordance with the regulations; and (b) his consent in writing for the commencement of the building works or street works shown in the approved plan.” [3] STS 10681/2013, Statement of Findings dated 19 November 2014 at [7]. [4] Section 24(1) of the Buildings Ordinance provides: “Where any building has been erected, or where any building works or street works have been or are being carried out in contravention of any of the provisions of this Ordinance the Building Authority may by order in writing require – (a) the demolition of the building, building works, or street works; or … (c) such alteration of the building, building works or street works as may be necessary to cause the same to comply with the provisions of this Ordinance, or otherwise to put an end to the contraventions thereof, and in every case specify the time within which the demolition, alteration or work required by such order shall be commenced and the time within which the same shall be completed.” [5] In STS 10681/2013, before Deputy Special Magistrate Frances Leung Nga-yan; Statement of Findings dated 19 November 2014 (“SOF”). [6] SOF at [9]. [7] SOF at [11]. [8] SOF at [12]. [9] In HCMA 694/2014, before A. Wong J; Judgment dated 15 June 2015 (“CFI Judgment”). [10] CFI Judgment at [32]. [11] CFI Judgment at [53]. [12] CFI Judgment at [74]. [13] CFI Judgment at [82] and [84]. [14] HCMA 694/2014, Decision dated 18 August 2015 at [20]. [15] FAMC 42/2015, Order dated 3 February 2016 at [1]. [16] Appellant’s Case at [44] to [58]. [17] Respondent’s Case at [68]. [18] Buildings Ordinance 1955, s.1(2)(a). [19] Ibid. s.1(2)(b). [20] The precursor to section 14 of the current Buildings Ordinance. [21] BO(ANT)O, s.4(2). [22] Explanatory Note to the Buildings Ordinance 1955 (Application to the New Territories) Regulations 1960. [23] Buildings Ordinance (Application to the New Territories) Regulations 1967, r. 3(2)(b). [24] Buildings Ordinance (Application to the New Territories) (Amendment) Regulations 1972 (L.N. 235 of 1972). [25] Metrication Amendments (Buildings Ordinance) Order 1976 (L.N. 294 of 1976); and Buildings Ordinance (Application to the New Territories) (Amendment) Regulations 1981 (L.N. 65 of 1981), r. 3(2)(b). [26] 1987 BO(ANT)O, ss.4 and 5: the maximum allowable height for exempted buildings is now 8.23m (First Schedule, Part I, para. 1(1)(a)). [27] See Thanakharn Kasikorn Thai Chamkat (Mahachon) v Akai Holdings Ltd (No.1) (2010) 13 HKCFAR 283 at [3]-[4]; cited in Democratic Republic of the Congo v FG Hemisphere Associates LLC (No.1) (2011) 14 HKCFAR 95 at [149]. [28] (2002) 5 HKCFAR 356 at [38]-[39]. [29] Appellant’s Supplemental Case at [20]-[23]. [30] DDPP, appearing with Ms Mickey Fung, SPP. [31] Appearing with Mr Darren Poon. [32] See the definition of “building” in s.2 of the Buildings Ordinance. [33] HKSAR v Cheung Kwun-yin (2009) 12 HKCFAR 568 at [11]-[14]; HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at [63]; and Fully Profit (Asia) Ltd v Secretary for Justice (2013) 16 HKCFAR 351 at [15]. [34] China Field Ltd v Appeal Tribunal (Buildings) (No.2) (2009) 12 HKCFAR 342 at [36]; HKSAR v Fugro Geotechnical Services Ltd (2014) 17 HKCFAR 755 at [22]. [35] HCMP 1417/1981, Judgment dated 22 June 1982. [36] See per Liu J at [14], Barnes J at [32] and Kempster J at [46]. [37] HKSAR v Yeung Ka Sing, Carson, FACC 5 & 6/2015, Judgment dated 11 July 2016 at [89]. [38] Appellant’s Case at [12] and [19]. [39] At [60].
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Gummow NPJ and with the orders proposed. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Gummow NPJ. Mr Justice Tang PJ: 3. The 1st and 2nd appellants are holders of carrier licenses[1] issued by the 2nd respondent, the Communications Authority (“the Authority”) under s 7(6) of the Telecommunications Ordinance (“TO”) (Cap 106). The 1st respondent is the Secretary ultimately responsible for the 2nd respondent. 4. This appeal concerns licence fees which may be levied by the Authority under TO s 7(6)(e). The appellants’ complaint is that in budgeting for and determining the licence fees payable, the Authority has included profits in that it had budgeted for dividend as well as profits tax. 5. As was apparent during the hearing of the appeal, I prefer to approach the certified questions by asking what I regard to be the more fundamental question, namely, whether licence fees levied under TO may include any profit.[2] 6. Ms Teresa Cheng SC for the respondents rightly accepts that TO is not a fiscal measure and that the level of licence fees overall must be related to the cost to the Authority of discharging its function.[3] As Barwick CJ explained in Marsh v Shire of Serpentine-Jarrahdale:[4] “ … in general a fee is a payment for or in respect of services rendered whereas a tax is not, but rather a means of obtaining revenue for governmental purposes. … What is authorized under the description of a fee may very well be a tax and yet within the actual authority given. The question remains one of interpretation of the statute, bearing in mind its relevant purposes and the part the issue of a licence plays in them or with respect to them.” 7. I see nothing in TO to authorize the inclusion of a tax in any licence fee levied under TO s 7(6)(e). This is not disputed and the respondents accept that TO was intended to operate taken from year to year on a cost recovery basis. Ms Cheng accepts that in determining the fees payable under TO s 7(6)(e), the Authority was not entitled to budget for a profit. She accepts such profits which she calls intentional profits are not permitted. They would be an unauthorized tax. But she contends since financial prudence justifies budgeting for contingencies or buffers as she calls them, any resulting surplus, which she calls unintentional or incidental profit, should belong to government beneficially.[5] 8. Ms Cheng relies on the Trading Fund Ordinance (“TFO”) “to manage and account for the operation of a government service for which the Government has the financial objective that the service shall fund itself from the income generated from the government service … ” 9. TFO s 5 provides the income received shall be paid to the trading fund and that: “(2) The expenses incurred in providing the government service and the financing of liabilities of the trading fund are to be paid out of the trading fund.” 10. TFO s 6(6) provides: “The general manager[6]shall manage a trading fund with the objectives (a) providing an efficient and effective operation that meets an appropriate standard of service; (b) within a reasonable time, meeting expenses incurred in the provision of the government service and financing liabilities of the trading fund out of the income of the trading fund, taking one year with another; and (c) achieving a reasonable return, as determined by the Financial Secretary, on the fixed assets[7] employed.” 11. By resolution of the Legislative Council on 10 May 1995 (“the Resolution”), the Office of the Telecommunications Authority Trading Fund, the OFTA Trading Fund(“the Fund”)[8]was established. Naturally, notwithstanding the establishment of the Fund the licence fees should continue to be determined on a cost recovery basis. TFO s 6(6)(c) is consistent with cost recovery since it was designed merely to remove any government subsidy by requiring payment for fixed assets provided by Government. 12. It may be helpful to note that in the Legislative Council Brief for the Trading Funds Bill 1992, it was stated that a number of government departments provide services on a quasi-commercial, cost recovery basis and a trading fund is a financial and accounting framework established by law to enable a department, or part of a department, to adopt certain accounting and management practices common in the private sector while remaining part of the government and that one of the major benefits for establishing trading funds is “greater efficiency and cost consciousness by exposing the service to competition or to quasi- commercial pressure”. TFO as enacted is consistent with the Brief. 13. Ms Cheng however submits that Government is beneficially entitled to any unintended or incidental profits because the Financial Secretary is authorized by TFO s 10(1) to direct: “any surpluses in the nature of distributable profits (which) are in excess of the reasonable requirements for the provision of (the operation of the government service undertaken by trading fund to) be transferred into the general revenue”. 14. Ms Cheng relies also on the fact that TFO s 7(4) requires a trading fund to submit annual accounts “prepared in accordance with generally accepted accounting principles”. She submits that under such accounting principles, in the case of a commercial entity, the surplus of income over expenditure would be regarded as profits and be shown as such in its financial statements. That being the case any surplus of income over expenditure in the operation of the Fund should also be regarded as profits. With respect, the analogy with a commercial entity is inapt because the Authority is not a commercial enterprise and was not intended to make profit. 15. Moreover, even if the surplus may properly be called a profit, the language of TFO s 10(1) does not help the respondents. The surplus has to be in the nature of “distributable profits”. In context, the profits must be profits distributable to government. Moreover, TFO s 10 (2) provides: “If fees authorized by an Ordinance are structured so as to recover more than the cost of the provision of a government service, including a reasonable return as set out in section 6(6)(c), the Financial Secretary may direct that the whole or part of the fees as determined by the Financial Secretary to be more than the cost of the provision of the service, including a reasonable return as set out in section 6(6)(c), shall, after collection, be paid from the trading fund into the general revenue.” (My emphasis). The italicized words do not apply because the TO does not authorize recovery in excess of cost.[9] If the profits are not authorized under TO such that they cannot come within TFO s 10(2), I see no basis for saying that they could be distributable profits under TFO s 10(1). 16. TFO s 5(3) provides that: “With the approval of the Financial Secretary, the general manager may establish reserves in the accounts of the trading fund and may make transfers into and out of those reserves.” 17. By 31 March 2008, the Fund has accumulated reserves of $690,165,000. The reserves were called development reserve in the financial statements supplied to us which covered the years 2002/2003 to 2013/2014. From these accounts one can see the steady build-up of the reserves by “transfer from profit and loss account”.[10] In the Joint Statement of the Secretary for Commerce and Economic Development and the Communications Authority (the 1st and 2nd respondents respectively) dated 27November 2012,[11] they said: “The reserve ... accumulated over the past years has the function of acting as a cushion against any need for licence fee increases.” 18. The reserves were called development reserve in the financial statements and in the notes to the accounts, one finds the statement “This is a reserve serving as a regulating mechanism to meet the target return.” It is unnecessary to deal with this possibly ambiguous statement since if I am right that unintended surpluses or profits do not come within TFO s 10, these reserves also would not. 19. I turn now to the certified questions: “ (1) Whether projections for notional tax and/or payment of dividends may be lawfully included in the budget of the OFCA Trading Fund for the purpose of determining licence fees under the Telecommunications Ordinance, or whether projecting the payment of notional tax and/or dividend to the Government would be ultra vires the Telecommunications Ordinance and/or was unlawful and irrational in a public law sense; (2) Whether in the management of the OFCA Trading Fund (renamed the OFTA Trading Fund), it was lawful to make provision for notional tax and/or dividends or amounts in excess or significantly in excess of the projected expenses and target return under s.6(6)(c) of the Trading Funds Ordinance.” 20. My answer to the first question is that on the proper construction of TO it does not authorize a tax, it is ultra vires TO to include any profit, whatever it is called, when determining licence fees payable thereunder. As for the second question, it follows from my answer to the first question, that, having regard to the substantial and long unused reserve built up, it would not be lawful to make further provision for contingencies when determining licence fees unless it is shown that there is a real risk of the reserve being inadequate. 21. Since writing the above, I have had the advantage of reading the judgement of Gummow NPJ, and with respect, I agree with his Lordship’s conclusions and reasons. Mr Justice Fok PJ: 22. I agree with the judgment of Mr Justice Gummow NPJ. Mr Justice Gummow NPJ: Introduction 23. The appellants (respectively “PCCW – HKT” and “HKT”) in this appeal from the Court of Appeal are incorporated in Hong Kong and are licensees under the Telecommunications Ordinance (Cap 106) (“the TO”). As joint holders of a unified carrier licence (“UCL”) they provide, under the brand name “HKT”, public internal fixed telecommunications services and public external telecommunications services in Hong Kong. The second appellant has also been the holder of a UCL. Various affiliated companies of the appellants hold service–based operator (“SBO”) licences. Also, nine telecommunications companies have been Interested Parties, but they did not appear on the appeal to this Court. 24. In the High Court the appellants sought judicial review of the decision (“the Decision”) of the respondents contained in a document (“the Joint Statement”) which is dated 27 November 2012 and headed “Joint Statement of the Secretary for Commerce and Economic Development [“the Secretary”, who is the first respondent] and the Communications Authority [“the Authority” which is the second respondent]”. 25. The Joint Statement announced the Decision of the respondents to adhere to a proposal to reduce the customer connection fee level for the UCL from $800 to $700 for each 100 customer’s connections and to reduce the mobile station fee for other licences, including the SBO licence, from $800 to $700 for each 100 mobile stations or less, in tandem with and subject to implementation of the UCL proposal, and to do so without any further downward adjustment as sought in representations by interested parties. 26. The Joint Statement noted that the proposal made therein had been worked out “with due consideration” both of financial results “for the past few years” and of the financial forecasts for the coming five years. These materials are in evidence. 27. Annexure 2 to the reasons of the Court of Appeal shows that in each of the eight years from 2006-2007 to 2013-2014 substantial sums, under the headings “Dividend Paid” and “Notional tax paid”, were transferred to the general revenue and that these sums had been included under “Profits before tax” and were distinct from the “Development reserve”. The term “general revenue” identifies moneys raised or received for the purposes of the Government, to be dealt with in accordance with the Public Finance Ordinance (Cap 2). 28. The most up-to-date financial projections prior to the making of the Joint Statement were for the five years from 2013-2014 to 2017-2018. The projections made provisions in total of $420.1 million under the headings “Surplus after taxation” and “Surplus after dividend”. 29. It is common ground that there was no liability under the Inland Revenue Ordinance (Cap 112) in respect of the “notional tax”. 30. The issue of the Joint Statement had been preceded by a Consultation Paper dated 29 June 2012. Its stated purpose was to explain the rationale behind the proposed licence fee reductions and to seek views from members of the public. 31. HKT and other interested licensees had responded to the Consultation Paper by seeking a further downward adjustment of the licence fees. In particular, HKT submitted that it was not consistent with the governing legislation to set licence fees that “generated consistently high and excessive profits”, and that it would be appropriate to refund past licence fees “and/or to create a fee/tax holiday”. 32. HKT contended that there was no legal justification to extract from users a level of licence fees that would significantly exceed the costs of the licensee, and to do so would be “a form of tax” and be beyond the scope of the applicable laws. These contentions, particularly with respect to dividends and notional tax, are at the heart of the subsequent litigation. 33. The Decision, however, was implemented with effect from 1 March 2013 by the Telecommunications (Carrier Licences) (Amendment) Regulation 2012 (“the 2012 Regulation”). This had been preceded by the “negative vetting” by the Legislative Council, as required by s 34 of the Interpretation and General Clauses Ordinance (Cap 1). The appellants’ initiating process for judicial review of the Decision is dated shortly before, namely 27 February 2013. The appellants, correctly, emphasise that the “negative vetting” could not overcome any lack of statutory authority in the fixing of the licence fees[12]. The litigation 34. The principal relief sought by the appellants was certiorari to quash the Decision or a declaration that the Decision was ultra vires. No relief was sought respecting the 2012 Regulation itself. Senior Counsel indicated in this Court that the reasoning of the appellants had been that they did not wish to lose such fee reduction as it provided. If the Decision is to be set aside it would be for the respondents (if so minded) to set in train processes for a fresh proposal for decision and implementation by regulation. 35. However, the application for judicial review was dismissed for reasons given by Ng J on 11 August 2015, and an appeal was dismissed by the Court of Appeal (Cheung, Kwan, Chu JJA) for reasons delivered on 17 May 2016 by Cheung JA. 36. In this Court, the appellants complain that the Court of Appeal erred in not accepting their submissions that the reductions proposed by the Joint Statement and effected by the 2012 Regulation did not go far enough. In particular, the appellants assert that the respondents committed errors of law when they had (a) determined upon fixing the level for licence fees receipts by budgeting for what they identified as “notional tax” and “dividends” as terms of apparent expense or liability, and (b) failed to take into account the amounts of “past excesses” which were liable to be refunded to licensees because they had been derived in this manner. 37. To appreciate what these submissions entail, it is necessary first to consider the provisions of the legislation for the establishment and operation of the regulatory structure in which the licence fees are an element. There are three relevant Ordinances, the first is the TO and the others are Communications Authority Ordinance (Cap 616) (“the CAO”) and the Trading Funds Ordinance (“the TFO”) (Cap 430). The TO was first enacted in 1963, but substantially amended in 2000, the CAO was enacted in 2011 and the TFO in 1993. The TO 38. The starting point is the licensing scheme established by the TO. Part 3 (ss 7-13) of the TO is headed “Control of Telecommunications”, and Part 5 (ss 20-32C) is headed “Offences, Enforcement and Penalties”. 39. Section 8 of the TO prohibits, among other activities, a person, without the appropriate licence granted or created by the Authority, from establishing or maintaining any means of telecommunications (s 8(1)(a)) or offering a telecommunications service in the course of business (s 8(1)(aa)). Section 20 creates an offence of contravention of s 8(1). Section 7 provides for the issue of licences. Thus, the TO creates a regulatory regime by the not unfamiliar means of imposing a bar upon engagement in specified activities, the bar being supported by the criminal law but relaxed by a licensing scheme. 40. Section 7 of the TO confers powers upon the first respondent, the Secretary. In particular, s 7(2) states: “(2) The Secretary may by regulations prescribe— (a) the general conditions, including the period of validity, for a carrier licence other than an exclusive licence; and (b) the fees payable including for the grant and renewal of a carrier licence other than an exclusive licence and by way of annual fees.” (emphasis supplied) Section 7(2) provided the source of the power to make the 2012 Regulation. 41. The exercise of power under s 7(2) is preconditioned by the taking by the Secretary of the steps specified in s 7(3). This subsection provides: “(3) Before making a regulation under subsection (2), the Secretary shall— (a) by notice in the Gazette invite members of the public who are interested to make representations by a date not less than 21 days after the notice is published and as specified in the notice; and (b) consider the representations received by the date.” The Consultation Paper dated 29 June 2012 and the Joint Statement dated 27 November 2012 evidenced, for this litigation, the respective operations of paras (a) and (b) of s 7(3). The CAO and the TFO 42. The Authority, the second respondent, is established as a body corporate by other legislation, namely by s 3 of the CAO. The Authority has, as one of its functions provided by s 4 of the CAO, the tendering of advice to the Secretary on any legislative proposals and regulatory policies (s 4(3)). 43. It is accepted that licence fees are payable to the Authority and that pursuant to s 20(1) of the CAO, they are credited to the account of what since 2011 has been styled the OFCA Trading Fund. What was originally titled the OFTA Trading Fund was established in 1995 by resolution of the Legislative Council under s 3 of the TFO. The TFO had commenced on 12 March 1993. The preamble to the TFO states: “An Ordinance to enable certain services of the Government of Hong Kong to be financed under trading funds established by resolution of the Legislative Council on the recommendation of the Financial Secretary and for related matters.” 44. Section 2(1) of the TFO defines “government service” as meaning any activity the Government of the Hong Kong SAR may undertake. The subsection also defines “trading fund” as “an accounting entity within the Government (but not having a separate legal existence) established under section 3(1)”. This definition makes it inaccurate to attribute to a trading fund those legal attributes of a trading corporation concerned with liability to profits tax and declaration of dividends payable to shareholders. 45. Section 3(1) of the TFO provides: “3 (1) The Legislative Council may, on the recommendation of the Financial Secretary, by resolution establish a trading fund to manage and account for the operation of a government service for which the Government has the financial objective that the service shall fund itself from the income generated from the government service whether it is a service provided to the Government, to public bodies or to persons other than the Government. (2) In considering whether to recommend the establishment of a trading fund for a government service the Financial Secretary is to have regard to the capability of the provider of the government service— (a) to provide an efficient and effective operation that meets an appropriate standard of service; and (b) to have the capacity, within a reasonable time, to meet expenses incurred in the provision of the government service and finance liabilities to be specified in the resolution out of the income of the proposed trading fund.” (emphasis supplied) 46. It is apparent from the definition of “trading fund” in s 2(1) of the TFO that the OFTA Trading Fund is an accounting entity which does not have a separate and distinct legal existence. Further, and consistently with the preamble, the emphasised portions of s 3 of the TFO indicate the objectives for establishment of a Trading Fund are directed to self-funding from income generated by the Trading Fund; there is no mention, as a purpose of the trading fund, of the generation of profits to be paid into the general revenue of the Government. 47. In the Court of Appeal, Cheung JA correctly emphasised (contrary to what appeared to have been the view of the primary Judge) that the TO, TFO and CAO are to be read together, such that when the Secretary exercises the power under s 7 of the TO with respect to the prescribing of fees regard must be had to the financial objectives and constraints for trading funds which appear from s 3 and other provisions of the TFO. 48. The general manager of the OFTA Trading Fund is the Director-General of Communications. Section 15 of the CAO requires the Director-General to do all acts and things necessary for implementing decisions of this Authority. Section 6(6) of the TFO states the objectives of managing a trading fund, as follows: “(6) The general manager shall manage a trading fund with the objectives of— (a) providing an efficient and effective operation that meets an appropriate standard of service; (b) within a reasonable time, meeting expenses incurred in the provision of the government service and financing liabilities of the trading fund out of the income of the trading fund, taking one year with another; and (c) achieving a reasonable return, as determined by the Financial Secretary, on the fixed assets employed.” (emphasis supplied) 49. Sections 5, 9 and 10(1) of the TFO are of central importance for this appeal, dealing respectively with the establishment and operation of “reserves” in the accounts of a trading fund, and with the transfer of “surplus funds” to the general revenue. 50. Section 5 states: “5 (1) Notwithstanding any provision of another Ordinance, the income received for the provision of a government service in respect of which a trading fund is established under section 3 is to be paid into the trading fund. (2) The expenses incurred in providing the government service and the financing of liabilities of the trading fund are to be paid out of the trading fund. (3) With the approval of the Financial Secretary, the general manager may establish reserves in the accounts of the trading fund and may make transfers into and out of those reserves. (4) In this section, “income” includes a grant from the general revenue [of the Hong Kong SAR].” (emphasis supplied) 51. In para 12 of the Joint Statement the respondents noted that the reserve of the OFTA Trading Fund which had accumulated over the past years “has the function of acting as a cushion against any need for licence fee increases”. 52. In addition to the power conferred by s 5(3) to create reserves, s 9(1) provides that money of a trading fund that is surplus to its immediate requirements may be invested by the general manager in a manner approved by the Financial Secretary. 53. Section 10 is headed “Surplus funds” and subsection (1) provides: “(1) If, after having regard to estimated future requirements of the operation of the government service undertaken by a trading fund, the Financial Secretary is satisfied that any surpluses in the nature of distributable profits disclosed in the certified statements are in excess of the reasonable requirements for the provision of the service including the repayment of loans, the Financial Secretary may direct that the surpluses or a part of the surpluses be transferred into the general revenue.” (emphasis supplied) Administration of trading funds 54. The TFO commenced on 12 March 1993. On 21 June 1994 the Secretary to the Treasury wrote to the Clerk of the Legislative Council Panel on Finance, Taxation and Monetary Affairs in terms which the appellants submit indicate the understanding on which provisions of the TFO have been administered. In response to a query by Members of the Panel “whether trading funds actually pay tax” the Secretary wrote: “[G]iven its commercial nature, a trading fund is required to make a payment to Government in lieu of profits tax calculated on a notional basis, i.e. by applying the prevailing profits tax rate to the net trading fund profits.” On 5 July 1994, in reply to another query by the Panel, the Secretary indicated that trading funds were required “as a matter of financial policy to allow in these accounts for a payment to Government in lieu of profits tax.” 55. In its response, dated 30 July 2012, to the Consultation Paper, HKT referred to past accounts of the OFCA Trading Fund in which provision had been made for “profits tax” and “dividends”. With reference to the terms of s 6(6) of the TFO, HKT stated that: “Thus, it is clear that the trading fund is only intended to cover OFCA’s expenses and liabilities, along with a reasonable rate of return which is set at 8.5%. It is not intended to make substantial profits or earn a high rate of return.” The Appeal to this Court 56. On 27 April 2017, leave to appeal was granted on two questions of great general or public importance, namely: “(1) Whether projections for notional tax and/or payment of dividends may be lawfully included in the budget of the [OFCA] Trading Fund for the purpose of determining licence fees under the [TO], or whether projecting the payment of notional tax and/or dividend to the Government would be ultra vires the [TO] and/or was unlawful and irrational in a public law sense; (2) Whether in the management of the [OFCA Trading Fund], it was lawful to make provision for notional tax and/or dividends or amounts in excess or significantly in excess of the projected expenses and target return under s.6(6)(c) of the [TFO].” 57. These questions focus upon the proper construction of the TFO. However, in the course of argument on the appeal it became apparent that the decisive issue between the parties was whether the Decision to proceed with the proposal respecting the fixing of licence fees which had been proposed in the Consultation Paper, had been made upon an error of law concerning the ambit of the power under s 7(2) of the TO, which in turn had proceeded from errors of law in the construction of provisions in the TFO. If the appellants made good this part of their case, there would not arise an issue respecting “irrationality” in the sense attributed to the reasons given by Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation[13]. 58. It also became apparent that the appropriate remedy if the appellants were successful would not be certiorari to quash the Decision, but declaratory relief tailored to indicate the errors of law which had been made in framing the Decision. Certiorari may be appropriate to set aside a decision representing a distinct step in a continuing administrative process[14]. However, the relevant process culminated with the making of the 2012 Regulation, and, as indicated above, its validity is not challenged by the appellants. Nevertheless, the issues between the parties respecting the proper construction of the relevant legislation remain and are matters of continuing public importance. In these circumstances, the appropriate remedy would be by declaration. Any declaratory relief, however, would not enter upon any other questions arising from the conduct of any other litigation which the appellants have on foot or may propose to undertake. Principles of Construction 59. In general, where used in public law a “fee” identifies a payment for or in respect of services rendered or for the administration of a legislatively based licensing scheme to control particular activities by licensees, whereas a tax is rather a means of obtaining revenue for governmental purposes. When the power to license is an element in a regulatory scheme, the power does not extend to authorise the imposition of a fee which in substance is a tax upon the activity to be conducted under cover of the licence[15]. If the licensee as a practical matter has no choice in the conduct of its affairs as to whether it acquires the licence and there is an insufficient relationship between the “fee” for the licence and the administration of the scheme, then, at least to the extent of the excess, the “fee” may properly be seen as a tax[16]. 60. No doubt, as Barwick CJ emphasised in Marsh v Shire of Serpentine-Jarrahdale[17]: “The question remains one of interpretation of the statute, bearing in mind its relevant purposes and the part the issue of a licence plays in them or with respect to them.” 61. However, a legislatively conferred power to impose a “fee” for a licence is not readily construed as authorising an impost which bears more than a reasonable relationship to the cost of administration of the licensing scheme and yields significant amounts of general revenue. Rather, it is established by a long line of authority that such a legislative design should appear in plain and unmistakable terms, rather than from ambiguous words[18]. This is so even where the licensee has no legal obligation to engage in the activity which is permitted only on payment of the licence fee, so that it may be said that the system operates on a “take it or leave it” basis[19]. Conclusions 62. It is convenient to begin by returning to the relevant provisions of the TFO and CAO which may bear upon the meaning to be given to the term “fee” in s 7(2) of the TO. 63. As noted at para 28, the provisions in s 3(1) of the TFO respecting the establishment of trading funds are directed to self-funding and do not mention the generation of profits to be paid into the general revenue of the Government. Further, s 6(6) of the TFO specifies as objectives of management of a trading fund the meeting of expenses and achieving a reasonable return, as determined by the Financial Secretary, on the fixed assets employed. Section 5(3) provides for the establishment of reserves in the trading fund and for the general manager to make transfers in and out of those reserves. 64. Counsel for the respondents referred to the requirement imposed by s 7(4) of the TFO that the general manager submit to the Director of Audit annual accounts of the trading fund “prepared in accordance with generally accepted accounting principles”. From this the respondents sought to draw a false analogy respecting the treatment under those principles of surplus income over expenditure as profits of a commercial entity. 65. It was at one stage contended by the respondents during submissions that the surplus could be regarded as some sort of financial “buffer” directly referable to the expenses of providing the service or the financing of liabilities. This was demonstrably not the case. The budgeting for notional tax and dividends was to create a surplus that was designed to be transferred to the general revenue. 66. The respondents placed considerable reliance upon a broad reading of s 10(1) of the TFO. If the Financial Secretary, after having regard to estimated future requirements of the operation of the relevant government service, is satisfied (a) that there are surpluses “in the nature of distributable profits” and (b) that these are in excess of the reasonable requirements for the provision of the service (including the repayment of loans), then the Financial Secretary may direct that all or part of the surpluses be transferred into the general revenue. It should also be noted from s 5 of the TFO that grants to a trading fund may be made from the general revenue. 67. The respondents submitted that the legislative scheme thus permitted the fixing of licence fees at a level designed to be high enough to produce excess funds which might be directed into the general revenue. Further, to cavil at the use in the accounts of a trading fund of terms such as “notional tax” or “dividend” to describe transfers under s 10(1) into the general revenue was to follow a “red herring”. 68. The appellants responded that the authority given to the Financial Secretary by s 10(1) to direct the transfer of surpluses into the general revenue (a) was designed to deal with any actual “windfall” from the budgeted administration of the trading fund, and (b) did not authorise, in the necessary plain and unmistakable terms required by the case law, the fixing of fees at a level designed to raise surplus funds for application as if raised by taxation. In other words, any surplus had to be “fortuitous” (counsel’s word), not designed. 69. By way of analogy, the appellants relied upon a line of English cases dealing with the statutory authority conferred upon local government bodies to impose various fees. The cases[20] were reviewed recently in R (on the application of Attfield) v Barnet London Borough Council[21]. With respect to a statutory power to charge for parking permits and visitor vouchers, Lang J held: “In conclusion, I accept the claimant's submission that the [Road Traffic Regulation Act 1984] is not a fiscal measure and does not authorise the local authority to use its powers to charge local residents for parking in order to raise surplus revenue for other transport purposes funded by the general fund. I have already concluded that the local authority's purpose in increasing the charges for resident parking permits and visitor vouchers on 14 February 2011 was to generate additional income to meet projected expenditure for road maintenance and improvement, concessionary fares and other road transport costs. The intention was to transfer the surplus on the special parking account to the general fund at year end, to defray other road transport expenditure and reduce the need to raise income from other sources, such as fines, charges and council tax. This purpose was not authorised under the 1984 Act and therefore the decision was unlawful.” 70. The submissions of the appellants should be accepted. They also are consistent with the context in which the licensing scheme was constructed. This is not one of those instances, discussed by Mason J in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd[22] , and by Lord Millett NPJ in Ho Choi Wan v Hong Kong Housing Authority[23] where a general term is constrained by its “context”, using that expression in the broad sense advocated by Viscount Simonds in Attorney-General v Prince Ernest Augustus of Hanover[24] . The contrary is the case. That is to say, the meaning of “fee” in s 7(2) of the TO, as discussed earlier in these reasons, is confirmed rather than expanded by recourse to the further legislative provisions. 71. The evidence included a paper published in 1989 by the Efficiency Unit of the Government entitled “Public Sector Reform February 1989”. This identified as one type of executive agency, trading fund departments “established on a quasi-commercial basis with revenue accruing to the fund”. The Legislative Council Brief when the Bill for the TFO was introduced in November 1992 stated that “[b]roadly speaking, the intention is that the creation of trading funds would have a neutral effect on the existing pattern of revenue and expenditure.” 72. In the Court of Appeal, Cheung JA (although ultimately finding against the appellants) expressed his conclusions respecting the operation of the TFO as follows: “10.2 The financial objectives of the OFCA Trading Fund are set out in section 6(6) of the TFO. In my view the provision of an efficient and effective operation under section 6(6)(a) does not point towards a full scale profit maximizing purpose. In any event, this provision must be read subject to the two other objectives. Section 6(6)(b) means that it is intended to be self-financing, meeting expenses out of the income and allowing the financial objectives to be met over a financial planning period of more than one year. Section 6(6)(c) allows a surplus over and above the trading fund by way of a specific target return prescribed by the Financial Secretary on the fund’s fixed assets. 10.3 These financial objectives point towards a cost recovery principle which underpins the financial management of the OFCA Trading Fund. As a matter of common sense and practicality, it must be accepted that budgeting is not an exact science and allowance must be given for human errors. Financial contingencies must also be built into the budget. That, of course, is within the province of the administrators and the Court will not interfere unless unconstitutionality, unlawfulness or Wednesbury unreasonableness are engaged. 10.4 But what is not permitted is for the administrators to set out to achieve an excessive surplus which goes far beyond meeting expenses by its income and achieving the target return rate together with a reasonable cushion, so much so that a legitimate complaint can be raised that the budgeting goes beyond the financial objectives and is intended to raise funds for the general revenue in the form of hidden taxation.” 73. That, with respect, correctly stated the position of the OFCA Trading Fund. The corollary is that the legislation associated with trading funds, on its proper construction, does not expand the meaning of the terms “the fees payable” in the basal provision, s 7(2) of the TO, respecting the power of the Secretary. 74. The evidence discloses that contrary to this construction of the legislation, in framing the financial projections to which regard was had in preparing the proposal by the respondents in the Joint Statement reliance was placed upon there being sufficient revenue raised by license fees to provide payments into the general revenue of substantial sums identified as “notional tax” and “dividends”. A striking indication of this approach appears in Note 17 to the Financial Statements in the OFTA Trading Fund Report for the year ended 31 March 2012. In Note 17, in conjunction with the identification of $115,224,000 as “Dividend Proposed”, the following appears: “The proposed dividend to the Government is based on the total comprehensive income for the year and the target dividend payout ratio of 100% (2011: 100%) stated in the annual business plan approved by the Secretary for Financial Services and the Treasury.” 75. However, the Court of Appeal dismissed the appeal. It appears to have done so in §10.31, §10.34 of the reasons on the erroneous footing that any “excessive surplus” could be identified as a matter of degree and without regard to the inclusion of “notional profits tax” and “proposed dividends”, whereas quite clearly these elements had been specifically budgeted for. Orders 76. As indicated earlier in these reasons, the appropriate relief for the appellants is by way of declaration to the effect that in formulating the Decision reached in the Joint Statement the respondents fell into specified errors of law respecting the relevant legislation for the prescription by the Secretary of licence fees under s 7(2) of the TO. 77. Accordingly, the appeal should be allowed and orders made as follows namely that:- (1) The appeal be allowed and the orders of the courts below be set aside. (2) There be a declaration that:- (a) the decision of the Respondents expressed in their Joint Statement dated 27 November 2012 to proceed with the proposed fixing of licence fees in exercise the power conferred by s 7(2) of the Telecommunications Ordinance (Cap 106) (“the TO”) was made upon the errors of law specified below. (b) it was an error of law to fail to construe s 7(2) of the TO as not permitting the prescribing of a licence fee which included an element of what in substance was a tax upon the licensee. (c) it was an error of law to construe the Trading Funds Ordinance (Cap 430) (“the TFO”) as permitting the inclusion in budgets of the OFTA Trading Fund of projections for notional tax or dividends to be treated as surplus funds under s 10(1) of the TFO. (3) There be an order nisi that the respondents do pay to the appellants the costs of this appeal and of the proceedings in the courts below, such costs to be taxed if not agreed. Should any party wish to vary this order for costs, such party, or parties should within 14 days of this judgment lodge with the Registrar and serve on the other parties written submissions, with liberty on the other parties to reply by way of written submissions within 14 days thereafter by lodging them with the Registrar and serving on the other parties. In the absence of written submissions seeking to vary the order nisi, this order will become absolute upon the expiry of the time permitted for such submissions. Chief Justice Ma: 78. For the above reasons, the appeal is unanimously allowed with the consequent orders set out in para 77 above. Mr Benjamin Yu SC and Mr Roger Beresford, instructed by Baker & McKenzie, for the 1st & 2nd Applicants (Appellants) Ms Teresa Cheng SC and Mr Adrian Lai, instructed by the Department of Justice, for the 1st & 2nd Respondents (Respondents) The 1st to 9th Interested Parties, unrepresented, absent [1] As are the interested parties. [2] Counsel have had an opportunity to deal with this question during their submissions. [3] See Nolan LJ in R v Manchester City Council ex p King (1991) 89 LGR 696 at 712. [4] (1996) 120 CLR 572 at 580. [5] If correct, this may give rise to serious conflict of interest when determining the necessary or desirable buffer. [6] The general manager is designated by the Financial secretary “to control and manage a trading fund and who is accountable to the Financial Secretary for the operations of the trading fund.” Section 6(2). [7] See for example fixed assets in the balance sheet of the trading fund report 2002/03, note 9 in the notes to the accounts. Schedule 2 to the Resolution set out the assets appropriated to the trading fund under para (c) of the Resolution. [8] Since renamed OFCA Trading Fund. [9] Such costs may include provisions for contingencies but they do not become authorized profits when unspent. Note also the objective under TFO s 6(6)(b) to cover expenses “taking one year with another”. [10] See for example, OFTA Trading Fund Report for 2007/2008 at p 67. [11] The immediate trigger to these proceedings see Gummow NPJ’s judgment at para 24. [12] F Hoffmann – La Roche Co AG v Secretary of State for Trade and Industry [1975] AC 295 at 354 (per Lord Wilberforce), 365 (per Lord Diplock). [13] [1948] 1 KB 223 at 234. See “Halsbury’s Laws of Hong Kong” 2nd Ed, 2017, Vol 1, 10.076. [14] R v Boycott Ex parte Keasley [1939] 2 KB 651 at 660; R v Criminal Injuries Compensation Board Ex parte Lain [1967] 2 QB 864 at 884-885, 887; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 580-581, 594-596; [1992] HCA 10; R v Employment Secretary, Ex parte Equal Opportunities Commission [1995] 1 AC 1 at 26-27, 35-36. [15] Marsh v Shire of Serpentine-Jarrahdale (1966) 120 CLR 572 at 580-581; [1966] HCA 77. [16] Air Caledonie International v Commonwealth (1988) 165 CLR 462 at 467; [1988] HCA 61. [17] (1966) 120 CLR 572 at 580. [18] The Oriental Bank Corporation v Wright (1880) 5 App Cas 842 at 856 per Lord Blackburn; Brunton v The Commissioner of Stamp Duties [1913] AC 747 at 760 per Lord Parker; A-G v Wilts United Dairies Ltd (1921) 37 TLR 884 at 885 per Scrutton LJ, 886 per Atkin LJ; Greenwood v FL Smidth & Company [1922] 1 AC 417 at 423 per Lord Buckmaster, 424 per Lord Wrenbury; The Commonwealth and the Central Wool Committee v Colonial Combing, Spinning and Weaving Co Ltd (1922) 31 CLR 421 at 443-444, 462-463 per Isaacs J, 473-474 per Higgins J; [1922] HCA 62; Congreve v Home Office [1976] QB 629 at 652 per Lord Denning MR, 654-655 per Roskill LJ, 662 per Geoffrey Lane LJ. [19] McCarthy & Stone (Developments) Ltd v Richmond upon Thames London Borough Council [1992] 2 AC 48 at 74-75. [20] They included R v Manchester City Council, Ex parte King (1991) 89 Knight’s Local Government Reports 696 at 709-711, 711-712; R v Camden London Borough Council, Ex parte Cran (1995) 94 Knight’s Local Government Reports 8 at 21-22, and Djanogly v Westminster City Council [2011] RTR 102 at [12]-[13]. [21] [2014] 1 All ER 304. [22] (1985) 157 CLR 309 at 315; [1985] HCA 48. [23] (2005) 8 HKCFAR 628 at [109]-[115]. [24] [1957] AC 436 at 461.
Mr Justice Ribeiro PJ: 1. I agree with the reasons provided by Mr Justice Fok PJ. Mr Justice Tang PJ: 2. I agree with the reasons for judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: Introduction 3. The question of law raised in this appeal is how, in cases of violence, the jury should be directed in inferring the necessary intent for the offence charged. Should the jury be directed to focus only on the blow or blows causative of the prohibited outcome or should they instead be directed to focus on all the circumstances, including all the blows struck or other matters capable of demonstrating the defendant’s intent? 4. In the context of this particular case in which the respondent was charged with murder (the facts of which are summarised below), the Court of Appeal[1] was of the former view, holding that the jury should be directed to focus only on the respondent’s intention when throwing the initial punch which ultimately caused the victim’s death. The Judge[2], on the other hand, had directed the jury at the trial on the basis of the latter view, inviting the jury to consider all the circumstances including the kicks administered by the respondent to the victim after the initial punch. The facts 5. On 11 August 2010, the respondent and two other men, Mr Ng Fuk Keung (the victim) and Mr Leung Kam Shing, were involved in a brawl during which the respondent punched the victim on the bridge of the nose, causing him to fall to the ground on his back. The respondent then threw a second punch at Mr Leung, which although he dodged caught him on his left hand and fractured his left ring finger. While the victim was lying on the ground unconscious and bleeding from his head, the respondent kicked him three or four times in the ribs with great force. 6. Mr Leung’s evidence, on which the prosecution case was based, was that he and the victim had seen the respondent hit a young man in a shopping centre who then abused the respondent. While Mr Leung and the victim were walking back from the shopping centre to the housing estate where they lived, they encountered the respondent who verbally abused them. The respondent punched the victim in the face, then threw a punch at him. After that, the respondent kicked the victim in the ribs, accusing him of pretending to be dead. 7. Another prosecution witness, Madam Zheng, had been walking behind the victim and Mr Leung and saw them tell the young man not to get in a fight with the respondent. She saw the respondent, who was ahead of them, turning round to look at them as they were discussing the respondent. She heard the respondent ask them if they wanted a fight. Although she did not see who struck the first blow, she saw the three men fighting and, after the victim had fallen and was lying on the ground, she saw the respondent kick him three or four times with great force. 8. The victim died the following day, 12 August 2010, and the post-mortem examination showed serious injuries to his skull with a fracture to the left orbital plate, which could have been due to a fall. There were haemorrhages in the same area with damage to the brainstem. The autopsy report gave the cause of death as traumatic head injury. The victim had also suffered fractures to the right fourth, fifth and sixth ribs caused by a significant amount of force. The pathologist opined that most of the deceased’s injuries were blunt force injuries caused by a fist, or a hard object, or a fall to the ground. 9. In short, the respondent’s punch to the face of the victim resulted in the victim’s head injuries which caused his death but the kicks to his body and resulting fractures to his ribs did not cause his death. The proceedings below 10. The respondent’s defence was that he acted in self-defence but the jury did not accept that he did so and returned a verdict of guilty on the charge of murder. The Judge properly left the alternative of unlawful act manslaughter to the jury but, as their verdict shows, they were sure that he had the necessary mens rea for murder. 11. There is now no doubt that the respondent was seriously mentally disturbed at the time of the offence (a point to which it will be necessary to return later in this judgment) but, although he had been prepared to plead guilty to unlawful act manslaughter (which plea the prosecution declined to accept), the defence did not proffer a plea to manslaughter by reason of diminished responsibility. 12. On appeal, the respondent’s conviction for murder was overturned and instead a conviction on the basis of unlawful act manslaughter was substituted. After an adjournment, medical reports from a psychologist and two psychiatrists were obtained for the assistance of the Court of Appeal. In view of his mental condition, he was made the subject of a hospital order under section 45 of the Mental Health Ordinance, Cap.136. The Judge’s directions to the jury 13. On the issue of intention to commit murder, the Judge directed the jury on the basis that they could deduce an intention to cause really serious bodily harm from the respondent’s action in pushing or punching the victim followed by the substantial kicks which fractured his ribs and that both these actions were administered with significant force. Specifically, she directed the jury that: “… You decide intention by considering the evidence about what the accused did or did not do and by what he said or did not say. You should look at the actions of the accused as those actions appear from the evidence, before, at the time of, and after the incident, which was the killing incident. All these things may shed light on his intention at the critical time.” The Court of Appeal’s judgment 14. The Court of Appeal rejected the prosecution submission that the punch to the face of the victim and the subsequent kicks to his body were part and parcel of the same transaction. Yeung VP, giving the judgment of the Court, said:- “41. … when the applicant kicked the deceased, the deceased was already lying on the ground with a fractured skull, which killed him. The kicks could be gratuitous, separate from and independent of the earlier punch to the deceased’s face. 42. This alternative scenario of the kicks being an opportunistic afterthought was clearly available on the evidence and impacts upon the issue of whether, in throwing the punch, the applicant had the intention to cause grievous bodily harm. When it comes to inferring an intention to cause grievous bodily harm there is a very real difference between a one punch assault and a broader assault consisting of additional acts of violence.” 15. After citing R v Griffiths (1999) 103 A Crim R 291 (discussed further below), the Court of Appeal continued: “44. It is true that the applicant continued to attack the deceased after he had fallen onto the ground. The fractures to the deceased[’s] ribs indicated that the force used by the applicant was considerable. Madam Zheng said that the applicant kicked the deceased on his waist three to four times with great force. Had the jury concluded that the subsequent kicking and the punch which preceded it were part and parcel of the one event in the sense that at the time the applicant punched the victim he intended to inflict further violence on him and the punch was just the beginning of the attack then such kicks could have supported an intent to cause serious bodily harm. 45. But, as emphasized by Mr McCoy, the kicks on the waist, separate and distinct acts of violence from the punch to the deceased’s face, did not kill the deceased. Indeed when those kicks were delivered, the traumatic head injuries caused by the punch, which killed the deceased, had already been inflicted. In these circumstances it was incumbent on the judge to direct the jury to consider whether the attack was essentially a one punch attack as opposed to a broader assault upon the deceased. The jury should have been further directed that should they conclude the former was the position then they should focus their minds on the applicant’s intention at the time he delivered his punch.” 16. The Court of Appeal considered that the Judge had erred in not dealing separately with the respondent’s intent in relation to the punch to the victim’s face, on the one hand, and that in relation to the kicks to his waist, on the other: “47. In our view, the judge should have reminded the jury that the kicks to the deceased’s waist did not kill him and directed the jury to consider if the single blow with fist, which killed the deceased, was inflicted with the intention to cause grievous bodily harm. Without such a direction, the jury could have been misled into thinking that the intent with which the subsequent kicks were inflicted necessarily determined the intent of the applicant when he delivered his punch. 48. We were of the view that it was doubtful if the applicant could have the intent to cause grievous bodily harm to the deceased when he delivered a single blow to his face with his fist. We had doubt about the safety of the murder conviction and in our view it was right and just to convict the applicant only of manslaughter.” The appeal 17. On behalf of the prosecution, Mr Paul Loughran, appearing with Ms Vinci Lam, contended that the approach of the Court of Appeal was fundamentally in error in regarding the respondent’s punch to the victim’s face and subsequent kicks to his body as being other than one single transaction and instead capable of being viewed by the jury as discrete actions with possibly differing intents. It was submitted that the Court of Appeal was wrong to regard the incident as a one punch attack. Instead, although the attack involved multiple blows, it was one continuous transaction so that intent to kill or cause grievous bodily harm could be inferred from all the blows whenever delivered and whatever their precise effect. 18. On the other hand, Mr Gerard McCoy SC, for the respondent, sought to uphold the approach of the Court of Appeal. He submitted that the focus must be on the particular act, where identifiable, which caused the death. Since, in the present case, the lethal act was the punch, it was necessary to consider the intent with which that was administered and not the respondent’s intention in delivering the subsequent kicks, which did not cause the death. In short, on the facts, the killing could be disaggregated into two identifiable events, one lethal and the other non-lethal. Since a single blow from a fist is wholly unlikely to raise an inference of intent to cause grievous bodily harm, as opposed to actual bodily harm, Mr McCoy submitted that it was unsafe to conclude that the act which caused the death, the punch, was administered with the necessary murderous intent. Disposition of the appeal 19. At the conclusion of the hearing of the appeal, for reasons to be handed down in due course (which are now set out in this judgment), the Court: (1) allowed the appeal against the Court of Appeal’s judgment substituting a conviction for unlawful act manslaughter in place of the murder conviction; and (2) in light of the undisputed evidence as to the respondent’s mental abnormality at the time of the offence, directed that (a) there be entered instead a conviction for manslaughter by reason of diminished responsibility, and (b) the order for the respondent to be detained for an unspecified period in Siu Lam Psychiatric Centre be confirmed. The relevant legal principles 20. It is a trite proposition of criminal law that there must be a temporal coincidence of the actus reus and mens rea of an offence. This is referred to as the doctrine of concurrence. As Lord Kenyon CJ stated, in Fowler v Padget (1798) 7 TR 509 (at p.514), 101 ER 1103 (at p.1106): “The intent and the Act must both concur to constitute the crime”. 21. In Meyers v R (1997) 147 ALR 440, the High Court of Australia also emphasised the need, in a prosecution for murder, to focus on whether the defendant does the particular act which causes the death of the victim with the necessary intent. At p.442, the High Court stated the proposition thus: “An accused person who unlawfully kills another is not guilty of murder unless he does the particular act which causes the death with one of the specific intents that is an essential element of the crime of murder. The particular act and the intent with which it is done must be proved by the prosecution beyond reasonable doubt. Act and intent must coincide. If the circumstances of a fatal altercation are such that the prosecution can prove that some acts were done with the necessary intent but cannot prove that other acts were done with that intent, no conviction for murder can be returned unless there is evidence on which the jury can reasonably find that the act which caused the death was one of those done with the necessary intent.” 22. It is an established general proposition that a jury should be directed to take into account all of the circumstances in order to determine what inferences may be drawn regarding a defendant’s intention in relation to a particular act. The following passage in R v Purcell (1986) 83 Cr App R 45 at p.48 sets out the appropriate direction: “The direction which the judge would have given on intent had he had the opportunity (which the judge in this case did not), would have been as follows: ‘You must feel sure that the defendant intended to cause serious bodily harm to the victim. You can only decide what his intention was by considering all the relevant circumstances and in particular what he did and what he said about it.’…”. 23. The proposition that all the circumstances are relevant to the question of drawing inferences as to intention is also supported by the provisions of s.65A(1)(b) of the Criminal Procedure Ordinance, Cap.221.[3] 24. An example of how a similar attack to that in the present case was approached is provided by R v Roberts [2001] EWCA Crim 1594. In that case, the three defendants, who included one Ian Day, had gone in search of a man who had abused their party in a club. Ian Day punched the man’s head, probably three times, and this caused him to fall backwards where he hit his head on the kerb. At this point, Ian Day then kicked him three times to the head, apparently on the right-hand side. The man died as a result of a kick or injury to the left-hand side of his head causing severance of the left vertebral artery leading to a subarachnoid haemorrhage. The eyewitness evidence was that the blow was either perpetrated by Ian Day or one of the other two defendants. 25. On Ian Day’s appeal against his conviction for murder, the Court of Appeal rejected the argument that murderous intent was not established because of the pathologist’s evidence that the fatal haemorrhaging might have been caused by no more than a punch. Laws LJ, giving the judgment of the Court, said (at §38): “As regards the principal argument on Dr Acland’s evidence we regard Mr Saunders’ submission with respect as artificial. First, it involves a toothcomb approach to the Recorder’s words. Secondly, the jury had to look at the evidence as a whole, not just the evidence about what blow might have caused the death and what degree of force would have had to lie behind it. On the evidence as a whole Ian Day punched this man three times or so, knocking him to the ground and then kicked him when he got there. It is difficult to see that a reasonable jury could have concluded that he did not intend to inflict really serious injury.” (Emphasis added) 26. Another example is Rachel Hegarty v The Queen [2012] VSCA 252. In that case, the defendant, who was intoxicated at the time and may also have injected heroin, assaulted the victim in the street by punching him and then kicking him when he was lying on the ground. The victim’s death was the result of a fracture of his spine at the point where the neck joins the chest and the medical evidence established that the victim’s pre-existing spinal condition was such that a blow delivered with even minor force could have caused his death. The most likely cause of the injury was a blow to the front of the head, but any force which caused the victim’s head to project backwards could have produced the injury. 27. In dismissing the appeal against the defendant’s conviction for murder, the Court of Appeal of the Supreme Court of Victoria, noted (at §21) that the circumstances attending the victim’s death were unusual in that the spinal fracture causing death could have occurred as a result of minimal force and accepted the Crown case (at §22) that the punches and kicks by the defendant comprised a single assault. Since the evidence established that the acts constituting the assault were so closely related, it was appropriate to draw the inference that the defendant’s intention remained the same from beginning to end, so that the impossibility of distinguishing the action that caused death was not material. Present case not an application of the single transaction rule 28. Where a subsequent act is part of the same transaction or series of events, the defendant’s intention to kill or cause grievous bodily harm when committing a prior act in that same transaction will be sufficient mens rea for the common law offence of murder. This principle is known as the single transaction rule and was established by the Privy Council in Thabo Meli v R [1954] 1 WLR 228. 29. The rule widens the scope of the concurrence rule in that it permits an earlier murderous intent accompanying a non-lethal act to be applied to a subsequent lethal act, thereby bringing about a concurrence of actus reus and mens rea. This is achieved by treating the non-lethal act, which was accompanied by murderous intent, as part and parcel of the same transaction including the lethal act, which was not accompanied by murderous intent. In the usual case, the lethal act is not accompanied by murderous intent because the defendant thinks the victim is already dead when he carries out the lethal act (e.g. dumping the body of a person in fact still alive into the sea in order to conceal the crime). An example of this is R v Hui Yiu Fai [1993] 1 HKC 223 referred to in the appellant’s printed case. 30. The present case is not an application of the single transaction rule because, here, there is no question of applying the mens rea accompanying a prior act to a subsequent act committed without the necessary mens rea. Instead, the present case is simply one of taking into account subsequent conduct in order to determine if the relevant mens rea for the offence charged can be inferred at the time of the earlier prohibited act from the totality of the evidence. There is no question of non-concurrence between the required mens rea and the relevant actus reus of the offence (here, the punch to the victim’s face). The approach in the present case 31. The present case involved an assault by the respondent on the victim and Mr Leung occupying a short period of time, occurring at the same physical location, without any interruption or hiatus and unaccompanied by any statement indicating a change of intention. The respondent punched the victim in the face, lashed out at Mr Leung with his fist (fortunately not connecting with anything other than Mr Leung’s hand), and then immediately thereafter viciously kicked the victim as he lay on the ground. This was all part and parcel of a single attack. 32. It was entirely proper for the Judge to direct the jury to consider the evidence of the attack as a whole in order to determine the respondent’s intention when he threw the fatal punch that ultimately caused the victim’s death. 33. I do not, with respect, agree with the view of the Court of Appeal that the kicks were gratuitous, or merely “an opportunistic afterthought”, and to be seen as separate from and independent of the earlier punch to the victim’s face. The evidence shows that the respondent was “spoiling for a fight” with the victim and Mr Leung and, once the fuse had been lit, the assault played out as one piece. 34. Mr McCoy’s submission that the first punch to the victim’s face was not accompanied by the necessary mens rea for murder – and thus his characterisation of the assault as a one punch attack – assumes that fact without having regard to all the other relevant evidence. The validity of that assumption is undermined when that evidence is taken into account. 35. I do not accept Mr McCoy’s submission that R v Roberts and R v Hegarty are materially distinguishable on the principle involved. Those cases provide examples of situations in which evidence of an assault comprising the administration of several discrete blows was held to have been properly examined in order to determine the relevant state of mind of the assailant at the time of inflicting the fatal blow. It does not follow, of course, that an assailant’s state of mind will necessarily be the same throughout but, whether it is or not, it is open to the jury to consider all the evidence in order to draw an inference as to that state of mind at the material time. If the fatal blow is the first struck, then the jury may need to consider the evidence all the more closely in order to draw any inference as to whether the necessary intent was present at the beginning of the assault. 36. In the circumstances, the Judge’s directions to the jury on the question of the respondent’s intention when inflicting the fatal punch on the victim were entirely appropriate and fair. Whether acquittal for murder justified because of material misdirection by the Judge 37. At §50 of its judgment, the Court of Appeal noted: “… that the judge had, in the course of the summing up to the jury, used the terms ‘really serious bodily harm’ and ‘serious bodily harm’ interchangeably. The essential elements of murder are the unlawful killing with intent to kill or cause grievous bodily harm. Whilst ‘really serious bodily harm’ was considered a sufficient equivalent to ‘grievous bodily harm’, ‘serious bodily harm’ in many factual situations would not be sufficient to indicate the required intention for murder and the use of ‘serious bodily harm’ would amount to a mis-direction.” 38. After citing Prior J in R v Griffiths at p.293, where he held that if the expression “grievous bodily harm” was to be explained the explanation should be confined to the expression “really serious bodily harm”, the Court of Appeal continued: “52. It would have been better for the judge not to use ‘really serious bodily harm’ and ‘serious bodily harm’ interchangeably in a murder case, but to adhere to ‘grievous bodily harm’ or ‘really serious bodily harm’.” 39. In the respondent’s printed case, Mr McCoy contended, citing well-known authorities to the effect that a direction that “grievous bodily harm” means “serious bodily harm” is wrong,[4] that this provided an additional or alternative basis for upholding the Court of Appeal’s decision to quash the respondent’s conviction for murder. 40. On a reading of the summing-up as a whole, the Judge clearly and properly directed the jury that the mental element for the offence of murder was either an intention to kill or to cause really serious bodily harm to the victim. The Judge used the expression “really serious bodily harm” on no fewer than 10 occasions in her summing-up. This phrase was also specifically used in the handout provided by the Judge to the jury as an aide-mémoire of the elements of the offence. Although it is true the Judge also used the expression “serious bodily harm” without the qualification “really” on several occasions, there is no reasonable basis to think that this would have confused the jury or led them to apply an inappropriate definition to the required mental element of the offence. Answering the certified point of law 41. I would answer the certified point of law as follows: in cases of violence involving a single assault consisting of multiple blows, the jury should be directed in inferring the necessary intent to focus on all the circumstances, including all the blows struck or other matters capable of demonstrating the defendant’s intent. Manslaughter by reason of diminished responsibility 42. On the state of the evidence at trial, the verdict of guilty to the murder charge was, accordingly, a proper one for the jury to return and the Court of Appeal was wrong to set aside that verdict on the basis that the Judge had misdirected the jury. 43. However, as already indicated, it is clear that the respondent is, and was at the time of the offence, suffering from a serious mental abnormality. This is supported by two medical reports of Dr Chow Kit Wan and Dr Liu Ching Yung, Amy, both Visiting Psychiatrists at Siu Lam Psychiatric Centre, dated 19 and 23 April 2013 respectively and obtained for the purposes of the appeal to this Court. Both psychiatrists opine that the respondent was suffering from paranoid schizophrenia at the time of the offence and from such abnormality of mind arising from schizophrenia that substantially impaired his mental responsibility for his acts. They also opine that further psychiatric in-patient treatment remains necessary. 44. Moreover, it would appear that the respondent has a history of mental illness and has received psychiatric treatment since 1993. After the respondent was arrested for this offence on 11 August 2010, he was admitted to Castle Peak Hospital where he was diagnosed as having a delusional disorder. 45. But none of this emerged at trial. The respondent gave instructions to his legal representatives refusing to permit the plea of diminished responsibility to be advanced at his trial for murder and instead his instructions were that he acted in self-defence. The prosecution itself would only have been permitted to adduce evidence of diminished responsibility if the respondent had put his own soundness of mind in issue: see Jimmy Johnson v R [1983] HKLR 344 at p.350D. 46. Although, notwithstanding the respondent’s instructions, the Judge would have had a discretion, exceptional and to be exercised with care, to raise the issue of diminished responsibility and call psychiatric evidence of her own motion if the interests of justice demanded such a course,[5] it is not necessary in view of the way the case has proceeded to consider whether the Judge should have done so in the present case. 47. Since the Court of Appeal’s verdict of unlawful act manslaughter was substituted in error for the jury’s verdict of murder and in light of the various medical reports received by the Court of Appeal demonstrating the respondent’s mental illness, it is appropriate for this Court to exercise its discretion[6] to admit the further medical evidence of Dr Chow and Dr Liu in their reports dated 19 and 23 April 2013 as fresh evidence, the conditions of s.83V(2) of the Criminal Procedure Ordinance, Cap.221, being clearly satisfied in respect of that evidence. 48. In the light of those reports, it is appropriate to substitute, for the jury’s verdict, a verdict of manslaughter by reason of diminished responsibility. The proper sentence remains that imposed by the Court of Appeal, namely a Hospital Order under section 45 of the Mental Health Ordinance for the respondent to be detained in Siu Lam Psychiatric Centre for an unspecified period. Mr Justice Chan NPJ: 49. I agree with the reasons for judgment of Mr Justice Fok PJ. Lord Clarke of Stone-cum-Ebony NPJ: 50. I agree with the reasons for judgment of Mr Justice Fok PJ. Mr Paul Loughran, instructed by the Department of Justice, and Ms Vinci Lam, Ag SADPP of that Department, for the Appellant Mr Gerard McCoy SC, instructed by W.K. To & Co., assigned by the Director of Legal Aid, for the Respondent [1] Yeung VP, Hartmann JA and McWalters J (CACC 404/2011, 24 July 2012) [2] Beeson J (HCCC 40/2011, 14 September 2011) [3] This provides that: “(1) A court or jury, in determining whether a person has committed an offence - … (b) shall decide whether he did intend or foresee that result by reference to all the evidence, drawing such inferences from the evidence as appear proper in the circumstances.” [4] DPP v Smith [1961] AC 290 at p.334 per Lord Kilmuir LC; Hyam v DPP [1975] AC 55 at p.69 per Lord Hailsham of St Marylebone LC; and Chan Wing Siu v The Queen [1985] AC 168 at p.174E per Sir Robin Cooke (as he then was). [5] See, R v Chan Ming Luk [1962] HKLR 651; Jimmy Johnson v R (supra) at pp.351A-355A; and HKSAR v Tang Kin Kwong [2005] 1 HKC 65 at §13. [6] By section 17(2) of the Hong Kong Court of Final Appeal Ordinance, Cap.484, the Court is empowered to exercise, for the purpose of disposing of an appeal, any of the powers of the court from which the appeal lies, including, in the present case, the power of the Court of Appeal under section 83V(1)(c) of the Criminal Procedure Ordinance, Cap.221, to receiveat the hearing of an appeal before it, if it thinks it necessary or expedient in the interests of justice, the evidence of any witness: see Mahabobur Rahman v HKSAR (2010) 13 HKCFAR 20 at §13.
Mr Justice Chan PJ: 1. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Bokhary NPJ: 3. The result of this appeal, which was dismissed at the conclusion of the hearing for reasons to follow, turned on how the Court resolved the dispute between the parties on two aspects of the Employees’ Compensation Ordinance, Cap.282. Of these, the first is the meaning of the expression “personal injury by accident” in s.5(1). And the second is the effect of the presumption laid down by s.5(4)(a). 4. Section 5(1) renders an employer liable to pay employees’ compensation “if in any employment, personal injury by accident arising out of and in the course of the employment is caused to an employee”. It was contended on behalf of the deceased employee’s widow that the accident and the injury can be one and the same event. On the employer’s behalf, however, it was contended that the accident must be distinct from the injury which it caused. Not assisted by any presumption 5. As for the presumption laid down by s.5(4)(a), it is that “an accident arising in the course of an employee’s employment shall be deemed, in the absence of evidence to the contrary, also to have arisen out of that employment”. It was argued on the widow’s behalf that this presumption operates so that where injury occurs at work there is placed on the employer an onus to adduce evidence to the effect that the injury was not caused by accident. But as was pointed out in the High Court of Australia by Fullagar J in The Commonwealth v. Hornsby (1960) 103 CLR 588 at p. 597, the question of whether the injury was by accident is distinct from, and logically anterior to, any question of whether what has happened arose out of or in the course of the employment. So this presumption does not go to the distinct and anterior question of whether the injury was by accident. 6. Not being assisted by any presumption, all that the widow had left was her argument that the accident and injury can be one and the same event. Why the widow was driven to resorting to that argument will emerge once the circumstances of the present case are noted. Shortly stated, they are as follows. Circumstances of the case 7. The deceased, who was aged 37 at the time of his death, was employed by the respondent company in Hong Kong as a merchandiser and had been sent by it to work at its factory in Dongguan City in the Mainland. On 13 July 2007 he was at work. He spent the morning meeting customers in his office at the factory. For lunch, he had a box sent in. After lunch, he resumed work in his office. At about 3:13pm he was talking to a customer on the telephone. Not long after that, he went to the toilet in the office block. After he had been away from his desk for some time, a number of his colleagues went to the toilet to look for him. At about 3:30pm they found him slumped on the floor in the toilet. 8. There was blood in his mouth and nose, and a laceration on the left side of the bridge of his nose. Some blood was seen on the floor. He was rushed to hospital, arriving at about 4:00pm. Upon arrival he was found to have stopped breathing and his heart was found to have stopped beating. The attempt to resuscitate him having failed, he was certified dead at 4:30pm. By a medical report issued that day, the hospital stated the cause of his death as “sudden cardiac death”. But by a supplemental medical report issued on 25 February 2010, the hospital said that the expression “sudden cardiac death” was meant to mean no more than that his heart had stopped beating for some unknown cause, and that the hospital was unable to certify the cause of his death. 9. No autopsy has ever been carried out on the deceased. None was carried out in Dongguan. Nor was any carried out after his body was brought back to Hong Kong on 18 July 2007. He was cremated in Hong Kong on 2 August 2007. 10. Each side instructed an expert in pathology to investigate into and report on the cause of the deceased’s death. These two experts, Professor Annie Cheung and Dr S L Beh, investigated into that on the basis of the deceased’s medical history as disclosed by his medical records. They have produced a joint report. 11. As disclosed by these records, the position was as follows. The deceased had a history of polyposis of the colon which was probably hereditary. He had suffered from pulmonary tuberculosis which resulted in permanent damage to his lungs. That was evidenced by fibrosis and scarring. He was a mild asthmatic. There was evidence of pulmonary emphysema. Two episodes of his having coughed blood had been investigated at St Teresa’s Hospital. And there had been an episode of tension pneumothorax requiring the insertion of a chest drain. 12. The two experts found no evidence of malignancy of the lungs or the colon. Nor did they find any evidence of heart disease or congenital heart condition. 13. Ultimately the two experts reached a conclusion which they summarized thus in their joint report: “There is really insufficient factual information to allow for the determination of a reasonable cause of death. There is no evidence to the suggest that the death was due to a pre-existing congenital or hereditary condition or related to his previous medical conditions. Neither is there evidence to suggest that the death was a result of his employment.” 14. The upshot is that nobody knows the cause of the deceased’s death. 15. On her own behalf and on behalf of the other members of his family, the deceased’s widow brought a claim against his employer for employees’ compensation. 16. That claim was dismissed by the District Court (Her Honour Judge H C Wong) on 25 October 2010. And the widow’s appeal to the Court of Appeal was dismissed by that court (Cheung CJHC, Tang VP and Yuen JA) on 4 July 2011. Injury by accident 17. We were asked to reverse the Court of Appeal’s dismissal of the widow’s appeal to them against the District Court’s dismissal of her claim. The human sympathy due to the deceased’s family is obvious. But as a matter of law, the claim was met by an insuperable difficulty due to the fact that the cause of the deceased’s death is unknown. The expression “injury by accident” plainly encompasses cause and effect, with accident as the cause and injury as the effect. Without a known cause of death, the injury can hardly be found to be an injury by accident. Contending for a concept of accident and injury as one and the same event is to say that cause and effect can be one and the same thing. Axiomatically they cannot. In the course of his skilful agreement that they can be one and the same thing, Mr Denis Chang SC for the widow has sought to place reliance on a number of judicial statements made in cases where the employee had a pre-existing medical condition. But Mr Chang could point to only one claim which succeeded otherwise than on the basis that the work was at least a contributory cause of the injury. 18. That one case is Pang Chew Kim v. Wartsila Singapore Pte Ltd [2012] 1 SLR 15 decided by Tay Yong Kwang J in the High Court of Singapore. In that case the employee died of cardiac arrest, and there was no evidence that any work caused or contributed to that. Nevertheless Tay Yong Kwang J held that employees’ compensation was payable. In so holding the learned judge was following what he understood to be the view of the law taken by Sundaresh Menon JC in an earlier case decided by the High Court of Singapore, namely NTUC Income Insurance Co-operative Ltd v. Next of kin of Narayasamy, deceased [2006] 4 SLR 507. 19. In Narayasamy’s case the learned judicial commissioner said (at para. 24) that the word “accident” included “an internal medical condition that caused an unexpected injury while the workman was carrying out his work”. But he said that immediately after quoting (in para. 23) a passage from the speech of Lord Loreburn LC in Clover, Clayton & Co. Ltd v Hughes [1910] AC 242 at pp 245-246 (erroneously naming instead Fenton v Thorley & Co, Ltd [1903] AC 443). And that passage ends with the examples of the straining of a muscle by lifting a weight or the breaking a blood vessel while tightening a nut with a spanner. Clearly that was directed to the work being at least a contributory cause of the injury. And in Narayasamy’s case, as can be seen from concluding paragraph of Sundaresh Menon JC’s judgment, there was evidence that the heart attack from which the employee died was “triggered by his exertions at work”. That was the basis of the learned judicial commissioner’s decision that employees’ compensation was payable, he having said this earlier (at para. 46) in his judgment: “It does not matter whether that which was done entailed a level of exertion that was beyond that to which the workman was accustomed. It also does not matter that the workman had a pre-existing medical condition such that the injury could have happened at any time, even in his sleep. What is material is that something in fact transpired in the course of his work which made the injury occur when it did.” 20. Pang’s case does not achieve for Mr Chang what he sought to get from it. 21. It is undoubtedly the law that the accident must be distinct from the injury, with the accident being at least a contributory cause and the injury being the effect. Conclusion 22. For the foregoing reasons, this appeal had to be dismissed and was dismissed. Without opposition, an order has been made awarding the costs of the appeal to the employer. And legal aid taxation of the widow’s own costs has of course been ordered. The understandably disappointed widow should know that Mr Chang, his learned junior and those instructing them have done everything they could possibly do in trying to obtain compensation for her in this sad case. Mr Justice Hartmann NPJ: 23. I agree with the judgment of Mr Justice Bokhary NPJ. Lord Hoffmann NPJ: 24. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Chan PJ: 25. Those are the reasons why the appeal was dismissed. Mr Denis Chang SC and Mr Hectar Pun, instructed by Paul C.K. Tang and Chiu and assigned by Legal Aid Department, for the appellant widow Mr Michael Thomas SC and Mr Samuel Chan, instructed by Clyde & Co., for the respondent employer
Mr Justice Stock NPJ : Introduction 1. The question in this appeal was whether the magistrate erred in ruling as inadmissible certain records of smartphone text messages and, if so, the impact of that error upon the appellant’s conviction for common assault. 2. In May 2014, the appellant was tried before a magistrate[1] upon a charge of assault occasioning actual bodily harm. He was acquitted of that charge but convicted of common assault. He was fined $5,000. 3. His appeal against conviction to the Court of First Instance was dismissed.[2] 4. On 6 June 2014, the Appeal Committee[3] granted leave to appeal on the ground that it was reasonably arguable that substantial and grave injustice had been done[4] because of errors regarding the admissibility, treatment and evaluation of the evidence. 5. On 7 January 2015, this Court allowed the appeal and quashed the conviction. These are the Court’s reasons for doing so. Background 6. The appellant was all material times a Senior Inspector of the Hong Kong Police Force. In 2011, he formed a relationship with a Ms Yau. Shortly after midnight on 5 January 2012, he visited her at her dwelling place in Tai Po. It is common ground that in the course of that visit he slapped her face and shook her body. 7. At issue in the trial were the circumstances in which he came to do so, most particularly whether he may honestly have believed that Ms Yau consented to the use of force. The prosecution evidence 8. Ms Yau did not testify. The prosecution relied on the testimony of a friend of the appellant, Ms Yuen. She had known the appellant for about 10 years. She had first contacted Ms Yau through the appellant’s introduction. Ms Yuen was aware that the appellant nurtured an interest in spiritualism and when she, Ms Yuen, said that she wanted to know about matters spiritualist, he provided Ms Yau’s telephone number, saying that Ms Yau knew more about it. So she made telephone contact with Ms Yau but met her for the first time on the evening of 4 January 2012, at Ms Yau’s apartment in Tai Po. 9. While Ms Yuen was at that apartment, the appellant arrived. Ms Yuen went to the kitchen. Ms Yau and the appellant were in the living room. Ms Yuen heard nothing unusual. Then she saw the appellant pulling Ms Yau towards the bedroom. He was holding her by her bathrobe. Ms Yuen followed them into the bedroom. The appellant slapped Ms Yau’s right cheek. Then he lifted her off the bed and pushed her back and lifted her up again and pushed her back yet again. This happened several times. Ms Yuen asked him to stop and he answered : “She is possessed. Got to hit her to wake her up.” Ms Yau appeared to have fainted. The appellant left the flat, taking with him Ms Yau’s mobile telephone. 10. The magistrate found that upon Ms Yau’s request, Ms Yuen called the police. Before the police arrived, the appellant returned to the apartment, bringing with him Ms Yau’s telephone. He again pushed Ms Yau onto the bed and when Ms Yuen tried to stop him, she slipped and fell. The telephone rang and it was the police calling. The appellant left the flat. 11. In the course of cross-examination, she told the court that before the appellant had struck Ms Yau, Ms Yau had struck the appellant; and, further, that Ms Yau had previously told her that she, Ms Yau, had been seeing ghosts. Ms Yuen also said that she had told the police of the appellant’s explanation to her whilst using violence upon Ms Yau, that Ms Yau was possessed and that he had to hit Ms Yau to wake her up. 12. The police evidence was that upon arrival, they saw swelling and redness on Ms Yau’s face and scratches on her chest. These marks were also observed by a doctor who examined her shortly after at the North District Hospital. 13. At about 4pm that day, the appellant reported to Tai Po Police Station. He was interviewed. He told the police that since he was now married, his relationship with Ms Yau had to end and that in consequence of that knowledge Ms Yau had, in general, become irascible and threatening. On the day of the visit in January 2012, he was worried because she did not respond to his telephone calls. So he went to see her at her apartment. There they discussed the breakup of the relationship and she hit him but he did not hit her. He declined to answer further questions but when asked if he wanted to add anything, he told the police that Ms Yau was often possessed by a ghost or ghosts and would, on such occasions, speak to him as if she were another person and that he had previously sought help to exorcise the ghost. When she was thus possessed, he had to treat her with a mixed soft and hard approach, by which means he could help her regain consciousness. The defence evidence 14. By his testimony, the appellant admitted that on the night in question, he had struck Ms Yau and had shaken her. He did so, he said, because she acted as if possessed. The clear thrust of his evidence was that, as a result of previous experiences when he had used limited violence to bring her round and in attempts to exorcise the ghost, he believed her to consent to the use of violence upon her for that purpose. Incidents of that kind had occurred three or four times previously and she had told him that he could use force as long as he did not injure her. 15. In support of his case, he sought to adduce in evidence records of smartphone messages in 2011 between himself and Ms Yau, transmitted through the messaging application known as WhatsApp. He had obtained the records of these messages from a computer belonging to Ms Yau and from a website. 16. The conversations evidenced by these records show Ms Yau referring to a female spirit or ghost possessing her and to the habits of that ghost and include the following, addressed to the appellant on 11 May 2011: “When you push her, pay attention to me. … neck’s very painful”; with the appellant responding by referring to his having pushed the spirit down on to a bed. He testified that this exchange referred to an incident the previous day when, with her consent, he had pushed Ms Yau and tied her up. 17. One witness was called by the appellant, a Mr Ho, whom the appellant had consulted in May 2011 to see if an exorcisim ritual could be arranged to assist Ms Yau. The relevance of consent 18. Assault is “an act by which the defendant, intentionally or recklessly, applies unlawful force to the complainant. There are circumstances in which force may be applied to another lawfully”; so, for example, “where the victim consents, as in lawful sports, the application of force to another will, generally speaking, not be unlawful” : R v Williams.[5] Therefore, in order to prove an offence of assault and battery, the prosecutor must prove absence of effective consent.[6] However, save in certain recognised exceptional circumstances (for example, in the case of certain sports) consent is not a defence where a person who has used violence causes actual bodily harm with intent to do so: R v Brown.[7] In the present case the magistrate held that the prosecution had failed to establish a connection between the violence used and the injuries found. Therefore, consent was a live issue. 19. The mental element to be proved is an intent to apply unlawful force. It follows, in cases where the absence of consent is in issue, that if a defendant honestly believes that the person whom he assaults is consenting, the mental element is not proved, even if the belief is a mistaken belief: R v Williams.[8] 20. It was the appellant’s case at trial that he had honestly believed that Ms Yau consented to the use of force by him upon her when she appeared to be possessed. The WhatsApp records were tendered in support of that case. Admissibility of the records 21. The magistrate took the view, and so ruled, that whereas the appellant was entitled to describe events referred to in the messages – for example, the events of 10 May 2011 and how he came to use violence that day – and refer to the messages to refresh his memory, he could not produce the records of the messages themselves as evidence since, he said, they constituted hearsay evidence and were not produced in conformity with section 22A of the Evidence Ordinance, Cap 8. “I won’t look at the relevant content,” he said. 22. Section 22A applies to documents produced by computers. In so far as is relevant to this case, it provides that: “(1) Subject to this section … a statement contained in a document produced by a computer shall be admitted in any criminal proceedings as prima facie evidence of any facts stated therein if – (a) direct oral evidence of the effect would be admissible in those proceedings; and (b) it is shown that the conditions in subsection (2) are satisfied in relation to the statement in question. … (11) Nothing in this section affects the admissibility of a document produced by a computer where the document is tendered otherwise than for the purpose of proving a fact stated in it.” The conditions referred to in subsection (2) include proof that appropriate measures were in force to prevent unauthorised interference with the computer and that the computer was operating properly. 23. Section 22A provides an exception to the common law rule against the admission of hearsay evidence. The common law rule renders evidence of an out-of-court assertion inadmissible where the evidence is tendered to prove the truth of the assertion; but where a statement contained in a document produced by a computer is tendered as evidence of the truth of facts stated in the document, it is admissible for that purpose provided that the conditions stipulated by section 22A(2) are met. Fulfilment of the conditions is not required in the case of a computer-produced document tendered otherwise than as evidence that a statement in it was true. That this is so is evident from the phrase “as prima facie evidence of any facts stated therein” in subsection (1) and from the terms of subsection (11). This analysis of the effect of section 22A and of the circumstances in which it is operative accords with the analysis of sections 22 and 22A of the Evidence Ordinance in Secretary for Justice v Lui Kin Hong.[9] 24. Since section 22A applies as an exception to the common law rule against the admission of hearsay evidence, the question which first arises is whether the common law rule was engaged in this case. We are satisfied that it was not. The applicant did not seek to rely upon the messages as evidence of the truth of any facts stated in them. Instead he relied on the messages to show that the statements in them were made and, thereby, the effect on his state of mind when he used violence on the occasion of the alleged offence. 25. If we take as an example the message which read: “When you push her, pay attention to me”, the appellant wished to adduce that in evidence to show that the statement had been made by Ms Yau and that, in reliance upon it and other matters, he, rightly or wrongly, but nonetheless honestly, believed that he had Ms Yau’s consent to use limited violence upon her whenever she appeared to him to be “possessed”. On his view of it, the statement amounted to a request as to the future and there was no assertion of fact in it upon the truth of which he sought to rely. 26. It follows that in finding that the records were inadmissible as infringing the common law rule against hearsay and that their admissibility depended upon compliance with the conditions stipulated by section 22A(2) of the Evidence Ordinance, the magistrate erred. 27. The error illustrates an occasional misapprehension as to the ambit of the rule against hearsay testimony. The misapprehension is that the rule always forbids evidence of what somebody has declared, orally or in writing, out of court. That is not the rule.[10] The rule is that, subject to certain common law and statutory exceptions: “… an oral or written assertion, express or implied, other than one made by a person in giving evidence in court proceedings is inadmissible as evidence of any fact or opinion so asserted.”[11] (emphasis added) 28. The reach of the rule may more readily be understood if the rationale for it were better appreciated. The rationale is a concern for the probative value of out-of-court statements. Sometimes the circumstances in which an out-of-court declaration is made are deemed to confer sufficient inherent reliability as to render the declaration admissible to prove the truth of what is declared[12] and it is upon that reasoning that the common law and statutory exceptions are based. In other circumstances, however, the probative value of evidence of a fact in issue is said to be materially undermined where it cannot not tested by cross-examination and it is the inability to cross-examine the declarant to test the accuracy of his out-of-court statement that lies at the heart of the general rule. 29. The reason for the rule was stated by Lord Normand in Teper v The Queen: “It is not the best evidence and it is not delivered on oath. The truthfulness and accuracy of the person whose words are spoken to by another witness cannot be tested by cross-examination and the light, which his demeanour would throw on his testimony, is lost.”[13] 30. From that rationale flows the principle against proving facts asserted by someone other than a person who testifies. But where a witness merely asserts that a statement has been made by another and thereby seeks to prove no more than that the statement was made, the witness is testifying as to a fact of which he can directly speak and about which he can be tested, in precisely the same way as he can speak and be tested as to something which he says that he himself has observed. 31. Therefore, as McHugh NPJ explained in Oei Hengky Wiryo v HKSAR:[14] “To determine whether the hearsay rule has been breached, it is necessary to determine the purpose for which evidence of an out-of-court statement is tendered. An out-of-court statement made in the absence of a party is not necessarily inadmissible. As long as its contents are not relied on to prove a fact recited or asserted, it will be admissible if it tends to prove a fact in issue or a fact relevant to a fact in issue.” 32. The same principles apply to the production of a document in so far as the document expressly or impliedly makes a statement or statements. “The hearsay rule never makes a document as such inadmissible. It is only inadmissible for a particular purpose, namely, as evidence that a statement which [it] contains is true. If it is relevant to an issue in some other way, it is admissible for that purpose”: per Lord Hoffman NPJ in Secretary for Justice v Lui Kin Hong.[15] 33. In this case, had the question been addressed, namely, for what purpose or to prove what fact were the records tendered, the error as to their admissibility would, we suggest, have been avoided. The effect of the error 34. Mr Leung, for the respondent, conceded that the magistrate had erred in refusing to admit the records as evidence but contended that the error did not affect the safety of the conviction because, first, despite the error as to admissibility, the magistrate in fact took the contents of the messages into account and, second, the remainder of the evidence was such that a conviction was inevitable. 35. We did not agree, although it is fair to say that Mr Leung recognised the difficulties in the path of these arguments. 36. It is correct that the magistrate appears to have taken the content of the messages into account but all he said about them were that they were “rather direct and simple”. That they were direct and simple is, with respect, not the point; the point is that they were allegedly relied upon by the appellant as causing him to believe that he had Ms Yau’s consent to use limited violence upon her in certain circumstances. 37. As to the appellant’s state of mind, the magistrate said “… in the absence of any direct evidence to show the Defendant’s state of mind at the time, the Court… has to consider whether objectively, or under special circumstances, (the evidence about) the Defendant’s acts may allow the Court to draw the irresistible inference that the Defendant had the intent to assault the victim. The victim did not give evidence. I do not see there is any factual basis for the Court to consider or doubt whether the victim had given her consent. Although the Defendant said that the victim told him not to hurt her too much and she was “possessed”, it is not certain when and where this remark referred to. Moreover, without the victim’s confirmation, this remark simply cannot amount to any doubt or factual basis.” 38. In the final analysis, the question was not whether Ms Yau had in fact given consent but whether the appellant’s contention that he nurtured an honest belief that she had provided consent was one that could fairly be rejected. The evidence of the receipt of the messages tended to support his contention and it seems plain enough to us that her remarks were consistent with the context described by the appellant. The remainder of the analysis 39. There was much else in the evidence which tended to undermine the magistrate’s rejection of the appellant’s testimony. 40. An example is the evidence of the defence witness Ho. This was rejected by the magistrate as of “no use at all to the credibility of the Defendant’s evidence.” In our view, however, that evidence provided an historical setting to the events of January 2012. Without that setting, the appellant’s story about belief in ghosts and about attempts to assist Ms Yau when apparently possessed by them would be considered by many to be inherently incredible. But in that setting, the account gains credence. 41. The magistrate thought it significant and undermining of the appellant’s credibility that when interviewed by the police, the appellant denied the assault and did not tell them that he had struck Ms Lau believing he had her consent. The appellant’s explanation at trial was that he had not volunteered the true story to the police because that story was not likely to be believed by them. The magistrate rejected this explanation saying that “assuming the Defendant eventually found that the victim was ‘possessed’… he would have, regardless of whether other people would believe it or not, offered this as an explanation … .” Fung J upon the appeal endorsed this analysis. However, the appellant’s explanation was not inherently improbable. The implication of the magistrate’s finding is that the account at trial was a recent invention; yet such a finding is contradicted by the testimony of Ms Yuen that at the very time of the violent episode, the appellant told her that he was striking Ms Yau because she was possessed. 42. Upon appeal Fung J took the approach that the questions of fact were for the trial court to decide and that “unless the findings of fact are irrational, the appellate court will not interfere.” With respect, the judge appears not to have appreciated that the appeal was by way of rehearing.[16] But even if it had been an appeal in the strict or narrow sense, an appellate judge is not relieved of an analytical function, to examine whether the reasoning of the court below is flawed and, if so, whether the flaws are material. Conclusion 43. In our judgment, the judge ought to have allowed the appeal on the basis that the refusal to admit the evidence of the messages and the failure of the magistrate to recognise the indicia in support of the appellant’s account, rendered the conviction unsafe, and the failure of the judge to determine the appeal in accordance with accepted norms resulted in a grave and substantial injustice. Accordingly, we allowed the appeal; awarded to the appellant such costs of the appeal and of costs below as were incurred by him; and made an order that there be Legal Aid taxation of the appellant’s costs. Mr Joseph WY Tse, SC and Mr Edward Wong, instructed by Jesse HY Kwok & Co, assigned by DLA, for the Appellant Mr David Leung, DDPP and Ms Lily Yip, PP of the Department of Justice, for the Respondent [1] Mr David Chum, Fanling Magistrates’ Court [2] Fung J, 22 January 2013 [3] Tang Acting CJ, Fok PJ, and Bokhary NPJ [4] Court of Final Appeal Ordinance, Cap 484, section 32(1) and (2) [5] (1983) 78 Cr App R 276 at 279 [6] For examples of ineffective consent, see Criminal Law, Smith and Hogan, 13th ed., 629 – 634 [7] [1994] 1 A.C. 212. Smith and Hogan at 635, fn 141, suggest that this probably applies also in cases where actual bodily harm is caused recklessly [8] (1983) 78 Cr App R 276 at 280 [9] (1999) 2 HKCFAR 510 [10] See Kamleh v The Queen (2005) 79 ALJR 541 at 544 [11] Oei Hengky Wiryo v HKSAR (2007) 10 HKCFAR 98 at para 35 [12] For example, dying declarations or statements against interest [13] [1952] AC 480 at 486 [14] (2007) 10 HKCFAR 98 at para 39 [15] (1999) 2 HKCFAR 510 at 526 [16] Chou Shih Bin v HKSAR (2005) 8 HKCFAR 70
Press Summary (English) Press Summary (Chinese) FACV 7, 8, 9 & 10/2013 FACV 7 of 2013 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 7 OF 2013 (CIVIL) (ON APPEAL FROM CACV NO. 45 OF 2011) BETWEEN FACV 8 of 2013 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 8 OF 2013 (CIVIL) (ON APPEAL FROM CACV NO. 46 OF 2011) BETWEEN FACV 9 of 2013 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 9 OF 2013 (CIVIL) (ON APPEAL FROM CACV NO. 47 OF 2011) BETWEEN FACV 10 of 2013 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 10 OF 2013 (CIVIL) (ON APPEAL FROM CACV NO. 48 OF 2011) BETWEEN Date of Hearing : 8-9 January 2014 Date of Judgment : 18 February 2014 Chief Justice Ma: A INTRODUCTION 1. The first three Appellants (GA, FI and JA) are mandated refugees and the fourth Appellant (PA) is a screened-in torture claimant. The issue in these appeals, broadly put, is whether a right to work exists in Hong Kong insofar as persons in these categories are concerned. 2. Historically, particularly in the past 70 years, many people from different parts of the world have, for various reasons, left their own country to come to Hong Kong. Some have come for economic gain, others to flee their own country for political, racial, religious, social or other reasons. In the 1970s, there was an influx of refugees from Vietnam – these were colloquially known as the boat people. In more recent years, others have arrived in Hong Kong from other parts of the world. The four Applicants originally came from Burundi, Sri Lanka and Pakistan. 3. Although Hong Kong is not a party to the Refugee Convention[1] and therefore does not grant asylum to persons who seek it, the Hong Kong Government does nevertheless have a policy regarding persons who claim to be refugees. In essence, although the Government[2] maintains it does not have any obligation to admit any person who seeks asylum under the Refugee Convention, nevertheless when a person does make such a claim, that person will normally not be removed or deported until his or her application for asylum is processed. The organ responsible for the processing of such claims for asylum is the United Nations High Commission for Refugees Hong Kong Sub-Office (“the UNHCR HK”), which is mandated by the United Nations General Assembly with responsibility to deal with refugees and their problems. In the present context, the responsibility of the UNHCR HK is to process claims for asylum and, where theyare established, to help provide solutions by way of voluntary repatriation or resettlement into third countries. 4. Where a claim for asylum is established, the DOI may exercise his discretion to allow the person concerned, usually on recognizance, to remain in Hong Kong pending voluntary repatriation or resettlement overseas as arranged by the UNHCR HK. Where the claim is not established, unless that person otherwise has permission to remain, he may be required by the DOI to leave Hong Kong.[3] As mentioned earlier, three of the four Applicants are mandated refugees;[4] in other words they have established their claims as refugees to the satisfaction of the UNHCR HK and await settlement overseas. The evidence before the Court was that as at 31 January 2010, there were 82 such mandated refugees in Hong Kong. 5. PA came to Hong Kong in December 2000 and was a torture claimant. Hong Kong is a party to the Convention known as CAT[5] under which[6] no State Party can expel, return (refoul) or extradite any person to another state where there are substantial grounds for believing that that person would be in danger of being subjected to torture. The responsibility for determining whether a person (a torture claimant) would be so subject rests on the relevant State Party. In Hong Kong, the responsibility for this is given to the Immigration Department (it is now handled by the Torture Claim Assessment Section of that department). The responsibility for determining whether or not a person can properly be screened in as a torture claimant is a different responsibility to the inquiry as to refugee status carried out by the UNHCR HK[7] even though, commonly, claims are made under both Conventions. In May 2005, PA was screened in as a torture claimant[8] but has since remained in Hong Kong on recognizance. The evidence before us indicated that the DOI is still investigating whether it would be safe for PA to return to Sri Lanka. 6. The individual circumstances of the four Applicants have been described in some detail in the judgments of the Court of First Instance and the Court of Appeal[9] and it is therefore unnecessary to repeat these facts in this judgment. However, it is relevant to point out certain characteristics shared by the four Applicants or at least some of them:- (1) As noted by the Court of Appeal,[10] the Applicants have been “effectively stranded here in Hong Kong for a prolonged period of time”. GA has now been in Hong Kong for nearly 10 years; it has been nearly the same time since he became a mandated refugee; for FI, the period is nearly nine years; for JA, the period has been nearly 12 years and for PA, he has been in Hong Kong for over 13 years and it is nearly six years since he was screened-in as a torture claimant. (2) The Applicants are not economic migrants. At the commencement of the present judicial review proceedings, they had not been given permission to work. (3) However, since the proceedings have commenced, GA, FI and PA have each been given permission to work by the DOI on various dates in 2013. The permission to work is not open ended as the permission expires on various dates this year. (4) JA is at present serving a term of imprisonment for a drugs related offence. 7. I shall presently expand on the precise issues which fall for determination in the present appeals but it would be useful at this stage to identify concisely the respective stances of the parties:- (1) The Applicants’ position[11] is that theyhave a constitutional right to work in Hong Kong and any discretion on the part of the DOI whether or not to grant permission to work must be exercised with such right in mind. Save perhaps in one important respect (see sub-para (3) below),the Applicants do not challengethe existence of a discretion on the part of the DOI, but they say that where the constitutional right to work exists, any exercise of discretion not to permit protected persons to work, which would interfere with the constitutional right, can only be justified by the application of the familiar proportionality test.[12] In this latter respect, the Applicants contend that the DOI cannot justify a policy denying permission to work to a protected person who has been in Hong Kong for more than four years. This contention was the same as that raised in the Court of Appeal. (2) The constitutional right to work was said to be contained in one or more of the following provisions: Article 14 of the Hong Kong Bill of Rights (“the BOR”)[13], Article 6 of the International Covenant on Economic, Social and Cultural Rights (“the ICESCR”)[14] and implicitly in one provision, Article 33 of the Basic Law.[15] The Applicants say a right to work alsoexists at common law. (3) The Applicants also place reliance on Article 3 of the BOR which states that no one shall be subject to “torture or to cruel, inhuman or degrading treatment or punishment”. It is common ground that we are in this case only concerned the aspect of “inhuman or degrading treatment” (which for convenience I will refer to simply as “IDT”). Where there is a substantial and imminent risk of IDT, the Applicants argue there is no discretion on the part of the DOI other than to give permission to work; in other words, in such circumstances, there can be no justification to decide otherwise and the proportionality test is of no application. (4) Accordingly, the Applicants seek appropriate relief quashing the relevant decisions of the DOI, thus enabling them (and others like them) to enjoy the right to work in Hong Kong. (5) On the Respondent’s part[16], it is submitted that the DOI has a broad discretion in relation to immigration control, including, importantly for present purposes, the granting or refusal of permission to work for persons in the Applicants’ position. The existence of a constitutional right to work contended for by the Applicants (said to be contained in Article 14 of the BOR, Article 6 of the ICESCR and Article 33 of the Basic Law) is not accepted but it is said that these provisions simply have no application in relation to the subject matter of the present case and therefore in any event cannot benefit the Applicants. Here, reliance is placed on s 11 of the HKBORO[17], the Reservation entered by the Government of the United Kingdom upon ratification of the International Covenant on Civil and Political Rights (“the ICCPR”) on 20 May 1976[18] and the Reservation entered into by the United Kingdom upon ratification of the ICESCR also on 20 May 1976 regarding the applicability of Article 6 of that Convention.[19] Regarding Article 33 of the Basic Law, the Respondent places reliance on Article 41 of the Basic Law.[20] Accordingly the Respondent submits, the proportionality test does not come into playat all. In any event, even if the test had to be applied, the DOI’s policy satisfies the test. The common law right to work is also disputed. (6) The Respondent does not of course go so far as to contend that the discretion in immigration matters is without limit. It is accepted that where exceptional circumstances exist, a discretion giving permission to work can be exercised in favour of persons like the Applicants. Further, it is not disputed that the discretion is subject to Article 3 of the BOR regarding IDT.[21] However, the Director submits that in none of the cases before the court can any Applicant demonstrate on the evidence that a genuine and substantial risk of IDT exists. The Applicants argue otherwise on the facts. B THE DECISIONS OF THE COURTS BELOW B.1 Court of First Instance 8. There were five Applicants before A Cheung J: apart from the four Applicants before this Court, there was an additional Applicant (called MA) who was a mandated refugee. At the outset of his judgment,[22] A Cheung J identified the broad issue before the court as follows: “1. These 5 applications for judicial review, which have been heard together, concern 4 mandated refugees and 1 screened-in torture claimant. They raise some common issues. Stated generally, the main issue raised concerns the circumstances, if any, under which a mandated refugee[s] or a screened-in torture claimant[s], who has been stranded in Hong Kong for a prolonged period of time and has little prospect of resettlement (or departure) in the immediately foreseeable future, may be permitted to take up available employment in Hong Kong, pending resettlement (or departure).” 9. The respective stances of the parties outlined earlier were also argued before A Cheung J (together with other arguments with which we are no longer concerned). He held that by reason of s 11 of the HKBORO, the Applicants were unable to rely on any of the rights under the BOR. For this reason, the Judge found it unnecessary to arrive at a decision regarding IDT, although in para 79 of the judgment, he made this obiter remark:- “79. I accept that in principle, in the case of a mandated refugee or screened-in torture claimant, a prolonged period of prohibition against taking up employment (even if available), when there is little prospect of the individual being resettled or being able to depart in the immediately foreseeable future, could, depending on the circumstances, amount to inhuman or degrading treatment.” At para 84 of the judgment, he added:- “84. So far as individual cases are concerned, all I wish to add at this stage, given the obiter nature of my observations, is that where it is medically established that the prolonged prohibition on employment in the circumstances described has resulted in or materially contributed to the development or maintaining of a serious mental condition, such as a major depression, on the part of the mandated refugee or screened-in torture claimant, the case for saying that the individual has suffered, or, if the prohibition is not relaxed, would suffer, inhuman or degrading treatment is strong. However, before one can arrive at any such conclusion, both the mental condition and the requisite causal link must be clearly established by medical or other relevant evidence. Furthermore, in such a case, the appropriate relief may not necessarily lie in the relaxation of the prohibition. It all depends on the form of treatment indicated and the prognosis concerning the individual.” 10. A Cheung J also held against the Applicants in relation to their submissions based on Article 6 of the ICESCR, Article 33 of the Basic Law and the alleged right under common law. However, the Judge reiterated the view that the discretion vested in the DOI, though wide in immigration matters, was not without limit. Conventional judicial review principles continued to apply.[23] In the case of MA and GA, the Judge was of the view that the DOI had not properly considered their personal circumstances and had not really dealt with them with an open mind. There was, as he put it[24] “next to no consideration of the individual circumstances” of these two Applicants. For this reason, the decisions of the DOI to refuse these two Applicants permission to work were quashed and the Director was required to consider their request for permission to work afresh. 11. The other applications for judicial review were dismissed. B.2 Court of Appeal 12. All the Applicants (including MA) appealed to the Court of Appeal.[25] Even though MA and GA had to an extent succeeded in having the relevant decisions relating to them quashed, they, like the other Applicants, wished to contend that they had a constitutional right to work. By a Judgment dated 27 November 2012[26], the Court of Appeal dismissed the appeals. Like A Cheung J, the Court held that Article 14 of the BOR, Article 6 of the ICESCR and Article 33 of the Basic Law did not benefit the Applicants. Reference was made to s 11 of the HKBORO and the two Reservations entered by the United Kingdom Government in relation to the ICCPR and the ICESCR.[27] In these circumstances, the Court of Appeal did not deal with the substance and ambit of any right to work contained in these provisions. The Court also did not accept there was a common law right to work. 13. Before leaving the Judgment of the Court of Appeal, I should just refer to the IDT point that was argued by the Applicants. Although, like A Cheung J, the Court of Appeal was of the view that Article 3 of the BOR had no application (owing to s 11 of the Ordinance), the issue of IDT was nevertheless also discussed obiter. In response to the Respondent’s submission that the facts of the present case did not in any event amount to IDT, Fok JA said this at para 76:- “76. Against this it must be recognized that Recitals 1 and 2 to the ICCPR emphasise the recognition of human dignity and that its protection is, therefore, one of the fundamental purposes of the ICCPR. Moreover, there is more to cruel, inhuman or degrading treatment and human dignity than either destitution or complete mental breakdown. It seems to me that it is certainly arguable that an inability to function economically may well give rise to cruel, inhuman or degrading treatment.” C THE ISSUES BEFORE THE COURT 14. As argued and as contained in the printed Cases of the parties, the following issues fall to be determined in the present appeals:- (1) Critical to the outcome of the present appeals is the question whether there exists a constitutional right to work as submitted by the Applicants. Such a right is said to exist by reason of one or more of the following:- (a) Article 14 of the BOR: Privacy. (b) Article 6 of the ICESCR. (c) Article 33 of the Basic Law. (2) However, even before going into the question of the content of the rights contained in these articles, and in particular where there exists the right to work, it is important to determine whether they are even applicable in the first place. Here, s 11 of the HKBORO and the two Reservations earlier referred to must be considered. (3) These provisions aside, even if they are inapplicable, is there nonetheless a right to work at common law? (4) Finally, how is the DOI’s discretion to be exercised when there exists IDT? 15. I will deal with the following issues in turn:- (1) Article 14 of the BOR. (2) Article 6 of the ICESCR. (3) Article 33 of the Basic Law. (4) The right to work at common law. (5) Proportionality. (6) The DOI’s discretion and IDT. 16. There are two matters that ought to be mentioned before dealing with these issues:- (1) MA, who was an Applicant before the Court of First Instance and the Court of Appeal, no longer wishes to pursue his appeal before this Court.[28] (2) As mentioned earlier, since the decision of the Court of Appeal, three of the Applicants have been granted permission to work by the DOI. The other, JA, is serving a term of imprisonment; we are told that the earliest date of discharge is July 2016. It can therefore be said that the present appeals are academic in that, even if the appeals succeed, three of the Applicants do not need any relief entitling them to be able to work and one Applicant would not in any event be in a position to work. However, none of the parties has suggested that the Court should not hear the appeals and, for my part, I am of the view that important issues are raised and should be dealt with in the public interest.[29] D ARTICLE 14 OF THE BOR 17. The following matters fall to be determined under this issue:- (1) Applicability of Article 14: s 11 of the HKBORO and the UK Reservation. (2) Article 14 and the right to work. (3) IDT. D.1 Applicability of Article 14: Section 11 of the HKBORO and the UK Reservation 18. Article 14 is in the following terms: “Protection of privacy, family, home, correspondence, honour and reputation (1) No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation. (2) Everyone has the right to the protection of the law against such interference or attacks.” 19. It is necessary to determine whether the Applicants can rely on this Article in the first place, whatever be its ambit and effect. If the Applicants are unable to enjoy the right contained in Article 14 of the BOR, it is unnecessary to go into the content of the right in that article, in particular whether the protection from arbitrary or unlawful interference with a person’s privacy includes the right to work. The Respondent says that the Article 14 right, whatever its ambit, is inapplicable in the present case and relies on s 11 of the HKBORO. 20. Section 11 states as follows:- “Immigration legislation As regards persons not having the right to enter and remain in Hong Kong, this Ordinance does not affect any immigration legislation governing entry into, stay in and departure from Hong Kong, or the application of any such legislation.” 21. If this section bites as contended by the Respondent, the effect is that Article 14 of the BOR cannot be relied on by the Applicants. As we shall see presently, the focus of the arguments before the Court was on the meaning of the words “stay in”. 22. In Ubamaka v Secretary for Security[30], this Court considered in some detail[31] s 11 of the HKBORO. In that case, a deportation order had been made against the applicant under s 20(1)(a) of the Immigration Ordinance Cap 115 (“the IO”).[32] It was argued on behalf of the applicant that he could rely on Articles 3 and 11(6) of the BOR to resist removal to Nigeria. The DOI referred to s 11 to contend that these Articles were of no application to the power to deport under s 20(1)(a) of the IO. The applicant argued that s 11 was unconstitutional on the basis either that it was contrary to Article 39(1) of the Basic Law[33] or that it was incompatible with international law (in particular when reference is made to Article 19(c) of the Vienna Convention on the Law of Treaties 1969).[34] The Court upheld the constitutional validity of s 11.[35] 23. The proper approach to cases involving the question whether s 11 will have the effect of precluding reliance on rights protected by the BOR was set out in Ubamaka and it bears repeating:- “46. Whether in any particular case s.11 has the effect of precluding someone's reliance on a right protected by the BOR may raise questions of law and construction, as well as questions of fact. (a) Insofar as the Government [the Respondent in the present case] asserts that s.11 has such effect, it bears the burden of satisfying the Court that factually and as a matter of law the person who seeks to rely on a relevant right is a person who does not have the right to enter and remain in Hong Kong. This is important because s.11 does not apply to Hong Kong permanent residents with a right of abode nor to Hong Kong residents and others who are lawfully entitled to be in Hong Kong. (b) The Government will also have to satisfy the Court that it is seeking, as against that person, lawfully to enforce duties or to exercise powers arising under immigration legislation whichgovern entry into, stay in and departure from Hong Kong and that such duties or powers are properly applicable on the facts. This is so since s.11 is inapplicable where other powers or duties are being exercised or enforced. (c) The person claiming protection [such as the Applicants in the present case] will have to identify the BOR rights invoked and adduce evidence supporting his claim that such rights would be infringed if the Government were toproceed with its enforcement of the relevant duties or exercise of the relevant powers. If a s.11 power is exercised without engaging a protected right, obviously no issue as to constitutional protection arises. (d) If the Court is satisfied that in the case at hand, operation of the relevant provisions of the immigration legislation concerned does engage those rights, it next has to considerwhether the rights potentially infringed, in the present case rights under BOR art.3, are capable of being displaced by s.11. (e) This last question was raised by the Court in the light of s.5 of HKBORO examined below.Prior to the present hearing, the argument had proceeded on the basis that s.11 must beconstrued as either having the narrow meaning contended for by the appellant or as overriding all the rights contained in the BOR, as the respondents contend. The question whether s.11 should instead be construed as overriding some, but not all, of the BOR rights assumed major importance at the hearing. In particular, the question arose as to whether s.11 is capable of displacing the constitutional protection provided by BOR art.3. That is a topic to which I return in Section G.” 24. I shall discuss in greater detail[36] when dealing with IDT the relevance of and the references to Article 3 of the BOR contained in paras 46(d) and (e) of this extract and I therefore leave this aspect aside for the time being. As for the other elements, there is no dispute that the Applicants do not have the right to enter or remain in Hong Kong. The Applicants of course place reliance on the privacy right contained in Article 14 of the BOR. 25. The Respondent contends that in exercising his discretion not to give permission to work, he is exercising powers under the IO which govern the “stay in … Hong Kong” of the Applicants. The Applicants submit otherwise. The relevant provisions in the IO enabling the DOI to exercise this discretion are said to include ss 11[37] and 37ZX[38]. 26. It is said by Mr Fordham QC (correctly) that for the purposes of s 11, it must be shown that the relevant immigration legislation relied on must govern “entry into, stay in and departure from Hong Kong”. However, in the present case, the discretion vested in the DOI under the IO to grant (or refuse) permission to work does not, he submits, come within these words. Lord Pannick QC argues that quite clearly the relevant immigration legislation governs the “stay in” Hong Kong. This was the conclusion reached by A Cheung J and the Court of Appeal. 27. The determination of the different stances adopted by the parties depends on the true construction of s 11 of the HKBORO, of the phrase “any immigration legislation governing entry into, stay in and departure from Hong Kong” and in particular the words “stay in”. 28. As with all exercises in statutory construction, the starting point is to have regard to the context and purpose of the relevant provision to be construed. In Vallejos and Domingo v Commissioner of Registration,[39] this Court emphasised this approach to statutory (and constitutional) interpretation.[40] 29. The following points, in my view, provide a reasonably clear picture of the context and purpose of s 11:- (1) It is clear from the provision itself that it is dealing with immigration control on entry into, stay in and departure from Hong Kong, as reflected inArticle 154(2) of the Basic Law:- “The Government of the Hong Kong Special Administrative Region may apply immigration controls on entry into, stay in and departure from the Region by persons from foreign states and regions.” Section 11 is in the same terms in adopting the words “entry into, stay in and departure from Hong Kong”. (2) The intention of s 11 is to except the applicability of the BOR to the aforesaid aspects of immigration control.[41] Here, it is also useful to make reference to the Reservation that was entered by the United Kingdom Government on the ratification of the ICCPR on 20 May 1976.[42] The Reservation was in the following terms:- “The Government of the United Kingdom reserve the right to continue to apply such immigration legislation governing entry into, stay in and departure from the United Kingdom as they may deem necessary from time to time and, accordingly, their acceptance of article 12 (4) and of the other provisions of the Covenant is subject to the provisions of any such legislation as regards persons not at the time having the right under the law of the United Kingdom to enter and remain in the United Kingdom. The United Kingdom also reserves a similar right in regard to each of its dependent territories.” As a matter of international law,[43] the Reservation evidenced the terms that the United Kingdom Government were prepared to enter into the ICCPR: the Covenant only applied subject to the Reservation. When in 1976, the United Kingdom Government acceded to the terms of the ICCPR, it also did so for its then dependent territories, including Hong Kong. Thus, as far as Hong Kong was concerned, the ICCPR could only ever apply subject to the Reservation. Further, whatever might have been the reason for the United Kingdom itself to enter the Reservation[44], as far as Hong Kong was concerned, the significance of the Reservation was to enable the Hong Kong Government to deal with immigration matters, specifically to have in place legislation “which the Government may deem necessary to enact to govern entry into, stay in and departure by persons who do not have the right to enter and remain in Hong Kong”.[45] It was against this background that the HKBORO was enacted.[46] After the resumption of the exercise of sovereignty on 1 July 1997, when the Basic Law came into effect, Article 39(1)[47] made it clear that the ICCPR was effective only “as applied” to Hong Kong. The ICCPR therefore only applies in Hong Kong subject to the Reservation. Section 11 reflects this proviso. Indeed, the wording of s 11 tracks the Reservation; the relevant phrase in both is “entry into, stay in and departure from Hong Kong”. For a full discussion of s 11 and the Reservation, one need really go no further than the decision in Ubamaka.[48] (3) The intention of Article 154(2) of the Basic Lawand the Reservation, both of which are couched in general terms, must have been, one would have thought, for the purpose for enabling effective immigration control to be exercised. This is hardly a novel or surprising view to take, and is one that is reflected in jurisdictions other than our own. In Ubamaka[49], reference was made to a passage in the Judgment of the European Court of Human Rights in Chahal v United Kingdom[50] in which it was said that Contracting States (to the European Convention on Human Rights) had the right “as a matter of well-established international law and subject to their treaty obligations including the Convention, to control the entry, residence and expulsion of aliens” (emphasis added). The highlighted words emphasize the broad nature of the immigration control: it governs each stage of a person’s stay in any particular place, from entry through his or her stay to departure. 30. Given this context and purpose, one then looks at the words used in s 11 to ascertain the ambit of the immigration legislation which is intended to be excepted from the BOR by this provision. It is clear in my view that, subject to s 5 of the same Ordinance[51], the provision is intended to except immigration legislation that deals with each stage of a person’s stay in Hong Kong, as stated earlier, from entry through his or her stay in Hong Kong, to departure. This includes of course whether permission should be given to be in Hong Kong in the first place, the purpose for which that permission is to be granted to enter Hong Kong and the duration of the stay. It must also, from an immigration control point of view, generally cover the activities which a person in Hong Kong may be permitted to carry out and in my view must cover the aspect of whether a person should be permitted to work. Whether a person who, not having the right to enter and remain in Hong Kong, is permitted to work during his or her stay is, one would clearly have thought, eminently a matter of immigration control. Particularly in a place like Hong Kong, which has considerable economic attractions to many people, the need to control immigration and to control the number or type of people who may wish to work here, can easily be seen. It has not really been suggested otherwise by the Applicants. 31. In my judgment, nothing that has been advanced by the Applicants detracts from the views articulated above. The main point raised by the Applicants amounted to saying that, as a matter of statutory construction, s 11 only related to immigration legislation dealing with entry into Hong Kong (“entry into”), the right to remain in Hong Kong (this was the construction put on the words “stay in”) and departure from Hong Kong (“departure from”). In other words, the word “governing” in s 11 is given a qualification and is said by the Applicants, to mean only “determining who has the right to” or “addressing the right to.” Thus, s 11 was not apt to cover legislation that related to the activities or rights of persons while they were in Hong Kong. In the context to the present case, s 11 did not therefore cover any legislation that gave the DOI a discretion to decide whether or not to grant permission to work to persons like the Applicants once they were already here in Hong Kong. Mr Fordham QC accepted that if, as a condition of entry into Hong Kong, there was a prohibition against employment, such prohibition would be caught by s 11 since it would relate to the right of “entry into” Hong Kong in the first place. However, he contrasted this situation with the present case where the DOI was not exercising his power to determine whether the Applicants or any of them should be allowed to enter Hong Kong and if so, on what terms. The Applicants were already here and the DOI was merely exercising his discretion whether or not to allow the Applicants to work. Accordingly, the prohibition did not relate to the Applicants’ entry into Hong Kong, nor to their right (if any) to remain in Hong Kong, nor (obviously) to any question of their departure from Hong Kong; the DOI’s decision simply did not relate to these facets. Mr Fordham QC referred in this context to s 37ZX of the IO[52]: although the DOI could permit a screened-in torture claimant to take up employment, nevertheless such permission did not amount to a limit of stay or other condition of stay (under s 11 of the IO) nor could it amount to any authority to remain in Hong Kong (under s 13). Put simply, the permission to work bore no relation to the question whether a person was or was not permitted to enter or remain in Hong Kong. 32. As further support for this construction of s 11, Mr Fordham QC deployed two additional arguments:- (1) He relied on s 14 of the IO[53] as being relevant to the construction of s 11. The argument ran along these lines: it could not have been intended that s 11 excepted immigration legislation from the applicability of the BOR, because this was precisely what s 14 did (and deliberately did so for only one year). Were it otherwise, so the argument proceeded, there would be a duplication if both s 11 and s 14 in excepting provisions of the IO from the application of the BOR; this could not have been the intention of these statutory provisions. (2) It could in any event not have been the intention to deprive all persons who did not have the right to enter and remain in Hong Kong(persons like the Applicants) of all rights set out in the BOR. Apart from IDT (Article 3 of the BOR)[54], examples were provided of where it would appear unconscionable and unjust were rights protected under the BOR to be unavailable to persons like the Applicants. In the Applicants’ written Case, it was said that if s 11 had the effect the Respondent said it had, then it would be possible for a criminalizing provision such as s 38AA of the IO[55] to be made retrospective in application (cf Article 12 of the BOR). Before us, Mr Fordham QC gave some further examples: what if, he asked rhetorically, a condition of entry was imposed upon a person entering Hong Kong to the effect that he could only live in one part of Hong Kong apart from the rest of his family; or a condition of entry was imposed on a person prohibiting marriage? Given these situations, it could simply not have been the intention of s 11 to deny what may be fundamental and basic human rights to persons, albeit not having the right to enter and remain in Hong Kong, while they were here in Hong Kong. This was another way of submitting that s 11 should be given a ‘human rights friendly’ construction, rather than one that denied human rights. 33. The construction of the relevant words in s 11 contended by the Applicants applied equally to the words “entry into, stay in and departure from” contained in the United Kingdom Reservation. He submitted that the Reservation was only ever intended, as far as the United Kingdom was concerned, to deal with the problem of persons wishing to enter and remain in the United Kingdom, rather than to affect the availability or application of human rights of persons when actually there. In support of this proposition, reference was made to two authorities. On 1 November 2006, the Human Rights Committee of the United Nations considered a report made by the United Kingdom Government relating to human rights under the ICCPR in the context of legislation in the United Kingdom dealing with the detention of suspected terrorists.[56] In 2008, the Human Rights Council of the General Assembly of the United Nations published opinions adopted by its Working Group on Arbitrary Detention.[57] Included was a consideration of what was said to be the arbitrary detention of an asylum seeker from Somalia by the United Kingdom authorities. It was said by Mr Fordham QC that in neither case did the United Kingdom Government pray in aid of the Reservation to justify any alleged infringement of human rights under the relevant legislation. According to Mr Fordham QC, the approach of the United Kingdom in not denying rights to persons in situations similar to the Applicants could also be seen by the Reservation entered into by the United Kingdom Government to the Refugee Convention: as stated earlier[58], Article 17 of the Refugee Convention provides that refugees should be permitted to work but that Article also provides that parties to the Convention can impose a temporal limitation of up to three years’ residence before a refugee can take up employment so as to protect national labour markets; the United Kingdom Government’s Reservation here was to extend the temporal limit to four years. This indicated, so the Applicants argue, the United Kingdom’s approach to reservations in general, that it specifically distinguished between the right to be in the United Kingdom and the rights of persons when actually in the United Kingdom. 34. The main fallacy in the Applicants’ approach to construing s 11 lies in the failure to accord sufficient weight to the context and purpose of the provision. I have already gone into what clearly appears to be the relevant context and purpose, and how this is supported by the background and origin of that provision. When the context involves matters of immigration control, it appears artificial in the extreme merely to restrict this to the right of entry, (as the Applicants put it) the right to stay in a place and departure. Immigration control must also extend, quite obviously, to the activities of persons who have entered Hong Kong and who, for whatever reason, remain here. I therefore cannot agree with the proposition that the word “governing” in s 11 means only, as the Applicants submit, “determining who has the right to” or “addressing the right to”. Quite simply, if this was the intention of s 11, the provision would have said so. I agree with the view of the Court of Appeal[59] that s 11 would have been drafted in clearer and simpler terms if the Applicants’ arguments were right. 35. I accept there may be possible arguments as to the precise limits of what is meant by “immigration legislation governing entry into, stay in and departure from Hong Kong” and the limits should really only be ascertained on a case by case basis. However, in the present case, it is obvious that a discretion vested in the DOI to determine whether or not persons in the position of the Applicants should be permitted to work, comes within the rubric of immigration control. To put it more precisely, the immigration legislation which gives the DOI this discretion does govern the stay in Hong Kong of persons like the Applicants. The somewhat fine distinction made by Mr Fordham QC between a prohibition on employment as a condition of entry into Hong Kong and the prohibition being imposed when a person was already here (in the form, for instance, of a decision not to permit employment) was a distinction without a difference in substance. Both come within the umbrella of immigration control over entry into, stay in and departure from Hong Kong. 36. Nor is the reference to s 37ZX to the point. While any permission to work given to a screened-in torture claimant does not, I accept, under that provision give any rights to remain in Hong Kong, this does not by itself advance the Applicants’ basic submission at all. If anything, it can be said that it supports the contrary position, namely, that the power given to the DOI by this provision is another example of immigration legislation governing a person’s stay in Hong Kong. 37. Nor is there much assistance to be derived from a comparison with s 14 of the HKBORO. Admittedly, there is some overlap between this provision and s 11, in that certain provisions of the IO will be excepted from the application of the rest of the Ordinance, but there are differences:- (1) While s 14 excepts the IO and all acts or omissions under that Ordinance from the application of the rest of the Ordinance, s 11 is much more limited in application. Section 11 only applies where there is “immigration legislation governing entry into, stay in and departure from Hong Kong”. (2) As the Court of Appeal pointed out[60], there are provisions in the IO which would not come within s 11 at all such as the criminal offences covered by ss 2AG and 37C, the provisions relating to the forfeiture of a ship (s 37E) or appeals against removal orders made by the DOI (s 53A). (3) The duration of s 14, which covers a number of Ordinances and not just the IO, is a finite one whereas there is no temporal limitation in s 11. 38. I should also add that even if the words “immigration legislation governing entry into, stay in and departure from Hong Kong” are given the narrow meaning for which the Applicants contend, the same point as regards duplication with s 14 will arise. 39. Next, I turn to the argument that it could not have been intended that persons like the Applicants who are allowed to be in Hong Kong, should be deprived of human rights. It will be recalled that a number of examples were provided by Mr Fordham QC.[61] The use of examples may sometimes assist in advancing an argument but, with respect, the use of somewhat extreme and hypothetical examples which are not related to the factual circumstances in the present case, is in my view of little assistance. The basic inquiry in the present case is really to pose the following question: does the relevant act or omission complained of originate from immigration legislation governing entry into, stay in and departure from Hong Kong? As I have said earlier, the precise ambit of this phrase should be determined on a case by case basis. In the present case, for the reasons given, the legislation giving the DOI the discretion whether or not to allow the Applicants to work in Hong Kong clearly comes within these words. 40. As regards the applicants’ submissions on the United Kingdom’s Reservation[62], the consideration and opinion of the Human Rights Committee and the Human Rights Council of the United Nations again provide little assistance for present purposes. There may be a number of reasons why the United Kingdom Government did not pray in aid the Reservation and these documents do not provide any indication that the particular argument, with which we are concerned, was discussed at all. As far as the Human Rights Committee consideration is concerned, the Court of Appeal explained the absence of reliance on the reservation by reference to the Human Rights Act in the United Kingdom.[63] Just as limited in terms of utility is the consideration of the United Kingdom’s Reservation under the Refugee Convention.[64] 41. Whatever the position of the United Kingdom, it is the context and purpose of s 11 that must be considered in order to construe that provision. Here, it is important to look at the position in Hong Kong,[65] for it is the context and circumstances here that are relevant, not the position elsewhere, whatever may have been the historical origins. Again, I would refer to the decision in Ubamaka. D.2 Article 14 and the right to work 42. For the reasons set out in Section D.1, by reason of s 11 of the HKBORO, the Applicants are unable to rely on Article 14 of the BOR. It is inapplicable, and it is therefore unnecessary and undesirable to go into the meaning and ambit of this provision. D.3 IDT 43. It does not follow from the conclusion I have reached on s 11 in the present case that the DOI has an unrestricted discretion and this was not the position of the Respondent. I have already briefly alluded to this.[66] Further, in the light of Ubamaka[67], s 11 is to be read subject to s 5(2)(c) of HKBORO[68], in that there can be no derogation from Article 3 of the BOR. Article 3 is in the following terms:- “Article 3 No torture or inhuman treatment andno experimentation without consent No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment. In particular, no one shall be subjected without his free consent to medical or scientific experimentation” 44. The nature of the Article 3 right not to be subject to torture or to cruel, inhuman or degrading treatment or punishment, is an absolute one. As Ribeiro PJ said in Ubamaka[69]:- “114. In my judgment, the clear words of s.5 establish the non-derogable character of the right not to be subjected to torture or CIDTP protected by BOR art.3. It is also clear from the highly persuasive jurisprudence of the Strasbourg Court and the House of Lords in relation to the closely analogous provisions of the ECHR that BOR art.3 rights are not only non-derogable but also absolute. Such jurisprudence shows that the absolute character of the protection against torture and CIDTP is an internationally accepted standard or, as Lord Steyn puts it “a universal minimum standard”.” 45. In the context of the present case, I agree with the Applicants’ submission that where, as a consequence of the prohibition against working, IDT (for we are not concerned with torture, cruelty or any form of punishment) can be shown to exist or where the individuals concerned can be shown to be facing a substantial and imminent risk of IDT, the discretion on the part of the DOI must be exercised in favour of the Applicants or persons like them. Put simply: where IDT or a substantial and imminent risk of IDT can be shown, the DOI must exercise his discretion to give permission to work. It is put in this imperative way because the Article 3 right is an absolute one. 46. But then the following questions need to be addressed: in any given case, what is IDT, who has the burden of demonstrating this and to what degree of likelihood must it be demonstrated? 47. As to what constitutes IDT, again the decision of this Court in Ubamaka provides much guidance.[70] The facts of that case involved the decision of the DOI to issue a deportation order against the Applicant. The assertion made by the Applicant was that if he were returned to Nigeria, he risked being prosecuted and punished for a similar offence to the offence of which he was convicted in Hong Kong. This, he said, amounted to cruel, inhuman or degrading treatment or punishment. We are of course concerned only with IDT but in my view the same approach can be adopted. 48. As was emphasised in Ubamaka, a “minimum level of severity” must be shown. Reference was made to the decision of the House of Lords in R (Limbuela) v Secretary of State for the Home Department.[71] The following passage in the Judgment of Ribeiro PJ[72], although dealing with CIDTP, provides a basic working definition of IDT, as well:- “173. In R (Limbuela) v Secretary of State for the Home Department, Lord Hope of Craighead, citing decisions of the Strasbourg Court, described what was required to meet the "minimum level of severity", pointing out that it generally involves actual bodily injury or intense physical or mental suffering and that its assessment is ultimately a matter of judgment: ... the European court has all along recognised that ill-treatment must attain a minimum level of severity if it is to fall within the scope of the expression ‘inhuman or degrading treatment or punishment’: Ireland v United Kingdom (1978) 2 EHRR 25, 80, para.167; A v United Kingdom (1998) 27 EHRR 611, 629, para.20; V v United Kingdom (1999) 30 EHRR 121, 175, para.71. In Pretty v United Kingdom 35 EHRR 1, 33, para.52, the court said: ‘As regards the types of “treatment” which fall within the scope of art.3 of the Convention, the court's case law refers to “ill-treatment” that attains a minimum level of severity and involves actual bodily injury or intense physical or mental suffering. Where treatment humiliates or debases an individual showing a lack of respect for, or diminishing, his or her human dignity or arouses feelings of fear, anguish or inferiority capable of breaking an individual's moral and physical resistance, it may be characterised as degrading and also fall within the prohibition of art.3. The suffering which flows from naturally occurring illness, physical or mental, may be covered by art.3, where it is, or risks being, exacerbated by treatment, whether flowing from conditions of detention, expulsion or other measures, for which the authorities can be held responsible.’ It has also [been] said that the assessment of this minimum is relative, as it depends on all the circumstances of the case such as the nature and context of the treatment or punishment that is in issue. The fact is that it is impossible by a simple definition to embrace all human conditions that will engage art.3. ... So the exercise of judgment is required in order to determine whether in any given case the treatment or punishment has attained the necessary degree of severity. It is here that it is open to the court to consider whether, taking all the facts into account, this test has been satisfied.” 49. It is, I think, important to note the following aspects of IDT when one is considering what it means in the present case:- (1) The references in the passage just quoted to bodily injury and physical pain are perhaps more apt in describing torture or punishment, rather than IDT. (2) However, a minimum level of severity must still be reached before treatment can be said to amount to IDT. In Limbuela[73], Lord Bingham of Cornhill said this, “Treatment is inhuman or degrading if, to a seriously detrimental effect, it denies the most basic needs of any human being”. (3) I agree with this statement but of course, like most statements of principle of a general nature, it will be the relevant individual facts and circumstances that one must inevitably examine in order to arrive at a conclusion in any given case. In the context of IDT, one will have to look at those facts and circumstances individual to the applicant in question. In Limbuela, reference was made to factors such as age, gender, mental and physical health and condition, any facilities or sources of support.[74] (4) Put in this way, an inquiry into the relevant facts and circumstances will mean that there is no precise formula as to whether, in any given case, the minimum level of severity has been reached. One can really only point to relevant factors that may have to be taken into account, although I accept in many cases there will be common factors. Context, however, is important. In Limbuela, the relevant context was the position of asylum seekers who claimed to be destitute and who had no means of real support, not even any guarantee of overnight accommodation on a daily basis. The context of the present case – persons who have been in Hong Kong for prolonged periods since becoming protected persons – is different. (5) Mr Fordham QC urged upon us to state that persons in the position of the Applicants in the present case, who showed the following characteristics – being mandated refugees or screened-in torture claimants, living on Government handouts, maintained at subsistence level, with nowhere to go and no expectation that they would be leaving Hong Kong in the foreseeable future – must be automatically deemed to have satisfied the test of IDT if they were not to be permitted to work. The trouble with this submission is that it does not recognise the difficulty, if not impossibility, of formulating a precise factual formula to establish IDT in every case. I reiterate that the correct approach is to examine the relevant facts and circumstances and context of any particular case and any particular person. (6) This approach accords with principle. In Limbuela, there are a number of passages precisely making the point that it is impossible to formulate a simple factual test applicable to all cases.[75] In most cases, an exercise in judgment will be required and each case will have to be judged on its own facts.[76] 50. The burden of demonstrating IDT lies on the party who alleges this. In the context of the present case, the burden would rest with the Applicants. I have already touched on what would constitute IDT and the need to show a minimum level of severity. 51. But what degree of likelihood of IDT must be shown? In Ubamaka, this was put at a “genuine and substantial risk”.[77] This means evidence must be adduced by an Applicant to show that there is a real risk of being subjected to IDT.[78] In Limbuela, all members of the House of Lords referred to an imminence test, that is, an applicant would face an imminent prospect of IDT.[79] 52. Translated to the present case, as indicated above[80]the burden on the Applicants can be stated in the following way: can it be shown that there is a substantial and imminentrisk of IDT if the DOI were not to grant them permission to work? 53. We have been invited by both parties to determine on the facts before us the issue whether or not IDT can be said to exist. For my part, I am not inclined to make such a determination for the following reasons:- (1) Although, as stated earlier[81], both A Cheung J and the Court of Appeal alluded to the possibility that on the facts, the Applicants may be able to demonstrate IDT, no firm findings either way were made. This was because both courts below were of the view that by reason of s 11 of HKBORO, Article 3 of the BOR was in any event of no application.[82] Without such findings, this Court should be extremely slow to embark on a fact finding exercise itself. (2) This is particularly so when there is a real possibility of a dispute on the facts. For example, the Applicants have filed evidence to describe their mental condition and why their inability to work has contributed significantly to this. This is not accepted by the Respondent. (3) If it had been necessary, I would have been inclined to remit the determination of this issue (the existence of IDT) to another tribunal. However, in view of the current position of the Applicants[83], this would be an academic exercise, as both sides accepted at the hearing. 54. That said and accepting that a high threshold has to be surmounted[84], I am inclined to agree with the views of both A Cheung J and the Court of Appeal that the position of the Applicants could conceivably constitute IDT if they were not given permission to work. All have been in Hong Kong for a long time since they became protected persons (ranging from six to 12 years), longer if one took into account the time before they attained this status. As stated earlier, evidence has been adduced by the Applicants dealing with their mental condition, referring to their loss of dignity, and feelings of hopelessness and desperation. However, it is not necessary to resolve these issues for the reasons I have already set out. E ARTICLE 6 OF THE ICESCR E.1 Relevant provisions of the Covenant 55. For present purposes, the following provisions of the Covenant are relevant:- “Article 2 1. Each State Party to the present Covenant undertakes to take steps, individually and through international assistance and co-operation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means, including particularly the adoption of legislative measures. 2. The States Parties to the present Covenant undertake to guarantee that the rights enunciated in the present Covenant will be exercised without discrimination of any kind as to race, colour, sex, language, religion, political or other opinion, na­tional or social origin, property, birth or other status. 3. Developing countries, with due regard to human rights and their national economy, may determine to what extent they would guarantee the economic rights recognized in the present Covenant to non-nationals. ……… Article 4 The States Parties to the present Covenant recognize that, in the en­joyment of those rights provided by the State in conformity with the present Cove­nant, the State may subject such rights only to such limitations as are determined by law only in so far as this may be compatible with the nature of these rights and solely for the purpose of promoting the general welfare in a democratic society. ……… Article 6 1. The States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right. ………” E.2 The sub-issues to be determined 56. Before any consideration of the content of the right to work in Article 6 can be made, as a preliminary issue, it is again important to determine whether or not this article can be relied on by the Applicants in the first place. For the reasons that follow, I am of the view that the Applicants are unable to do so and, just as in the case of Article 14 of the BOR, it is therefore unnecessary and undesirable in the circumstances of the present appeals to discuss the content of the right contained in it. I will deal with the following sub-issues:- (1) Is Article 6 of the ICESCR incorporated into Hong Kong municipal law? (2) The effect of the Reservation of the United Kingdom Government dated 20 May 1976 in relation to Article 6 of the ICESCR. E.3 Is Article 6 of the ICESCR incorporated into Hong Kong municipal law? 57. Article 39 of the Basic Law states as follows:- “Article 39 The provisions of the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and international labour conventions as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region. The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law. Such restrictions shall not contravene the provisions of the preceding paragraph of this Article.” 58. The provisions of the international covenants and conventions referred to in Article 39(1) of the Basic Law are not directly enforceable in Hong Kong by any individual unless implemented by domestic or municipal law. As Ribeiro PJ summarised in Ubamaka[85], “It has long been established under Hong Kong law (which follows English law in this respect), that international treaties are not self-executing and that, unless and until made part of our domestic law by legislation, they do not confer or impose any rights or obligations on individual citizens”. This is sometimes called the common law dualist principle and the wording of Article 39(1) of the Basic Law, both in English and in Chinese, is declaratory of this. One clear example is the incorporation into domestic law of the ICCPR. It is well recognised that the HKBORO is the domestic embodiment of the ICCPR as applied to Hong Kong.[86] One of the consequences of the principle is where an international obligation has not been made part of domestic law, then, whatever the international position may be, an individual cannot rely on the content of that international obligation. In addition, in the case of the ICESCR, at the 19th session in November-December 1998 dealing with the Substantive Issues Arising in the Implementation of the ICESCR relating to the Domestic Application of the Covenant, the Committee on Economic, Social and Cultural Rights of the Economic and Social Council of the United Nations confirmed this[87]:- “5. The Covenant does not stipulate the specific means by which it is to be implemented in the national legal order. And there is no provision obligating its comprehensive incorporation or requiring it to be accorded by any specific type of status in national law. Although the precise method by which Covenant rights are given effect in national law is a matter for each State party to decide, the means used should be appropriate in the sense of producing results which are consistent with the full discharge of its obligations by the State party. The means chosen are also subject to review as part of the Committee’s examination of the State party’s compliance with its obligations under the Covenant.” 59. The Applicants do not dispute the application of the dualist principle, but submit instead that Article 6 of the ICESCR (insofar as this incorporates a general, unrestricted right to work for persons like the Applicants) has been incorporated into domestic legislation:- (1) Reference is made to three provisions in the IO: ss 17G(2), 38AA and 37ZX:- (a) Section 17G(2) states:- “(2) Without prejudice to any provision of this Ordinance relating to conditions of stay which may be imposed on any person, a person is lawfully employable for the purposes of this Part only if- (a) he is the holder of an identity card and he has not breached any condition of stay (if any) imposed on him under this Ordinance; (b) he is the holder of an official passport; or (c) he is not required to be registered under the Registration of Persons Ordinance (Cap 177) and- (i) is the holder of a valid travel document and, having landed in Hong Kong lawfully, is not prohibited from taking employment, whether paid or unpaid, under any condition of stay, and in respect of whom no removal order or deportation order is in force; (ii) (Repealed 31 of 1984 s. 4) (iii) is the holder of a Vietnamese refugee card which does not prohibit him from taking employment; (iv) is the holder of a certificate of exemption; or (v) is the holder of any other document of a type approved by the Governor by order published in the Gazette. ” (b) Section 38AA is set out in para 32(2) footnote 55 above. (c) Section 37ZX states:- “37ZX Claimant of substantiated claim may apply for permission to take employment etc. (1) The Director may, on an application of a claimant who has a substantiated claim, permit the claimant to take employment or establish or join in a business. (2) A permission must not be given under subsection (1) unless the Director is satisfied that exceptional circumstances exist that justify such a permission being given to the claimant. (3) A permission given under this section – (a) may be given subject to a time limit and any other condition the Director thinks fit to impose; and (b) must be given in writing. (4) A permission given under this section expires immediately on- (a) the expiry of the time limit (if any); or (b) the breach of any other condition, subject to which the permission is given. (5) The Director may, before a permission expires under subsection (4), vary any time limit or any other condition imposed under subsection (3). (6) To avoid doubt, a permission given under this section is not and must not be taken as- (a) a limit of stay or other condition of stay imposed or varied under section 11; or (b) the Director’s authority under section 13 for the claimant to remain in Hong Kong.” (2) To reinforce the argument, Mr Fordham QC made reference also to a paper dealing with the Initial Reports submitted by States Parties under Articles 16 and 17 of the ICESCR.[88] The paper contained the report of the People’s Republic of China in implementing the provisions of the Covenant. Part 2 of the paper deals specifically with the position of Hong Kong. He draws our attention particularly to para 349, in which it was stated that provisions of the ICESCR were incorporated into Hong Kong’s domestic law through various provisions in the Basic Law and provisions in over 50 Ordinances. Annex 2A of the paper states that Article 6 of the ICESCR has been incorporated into Hong Kong legislation under six Ordinances, including the IO. Accordingly, it was submitted by Mr Fordham QC, Article 6 has been incorporated into domestic legislation and therefore can be relied on by the Applicants. 60. There is some superficial attraction in the argument raised by the Applicants but in my judgment it does not bear analysis:- (1) I accept that the fact there is no comprehensive incorporation of the ICESCR into a single piece of domestic legislation (as in the case of the ICCPR) is of course no bar. There can be incorporation of individual provisions of the Covenant by different statutes. This is particularly so where a Convention deals with different topics. The ICESCR, as its name suggests, deals with economic, social and cultural rights. (2) However, where it is said that a particular Convention or a provision of that Convention has been incorporated into domestic legislation, it is important to analyse that piece of domestic legislation to see whether it has actually done soand to what extent. This becomes then largely a matter of statutory construction. (3) None of the three provisions relied on by the Applicants in my view incorporates the general, unrestricted right to work of persons in the position of the Applicants (this being, it is said, the effect of Article 6 of the ICESCR):- (a) Section 17G(2) of the IO does not give a general right to work at all. The classes of persons who are “lawfully employable” are restricted. The provision is also subject to other parts of the IO relating to conditions of stay. (b) Section 38AA of the IO, if anything, is quite the opposite of allowing a general, unrestricted right to work. It actually prohibits the taking up of employment. (c) Section 37ZX of the IO is also restricted in allowing persons to work. This provision merely enables the DOI to give permission to work to a screened-in torture claimant. (4) Nor is there much assistance to be derived from the paper setting out the views of the PRC (including Hong Kong) regarding the implementation of the ICESCR:- (a) First, the extracts (relied on by the Applicants) need to be seen in context. The relevant context, as identified by the Court of Appeal in its Judgment[89], includes looking at paras 403 and 404 of the same paper:- “Reservations on article 6 403. In paragraph 29 of its concluding observations of 2001, the Committee recommended that “HKSAR withdraw its reservation on article 6 and the interpretative declaration replacing its former reservation on article 8”. 404. The declaration reserves the right to interpret article 6 as not precluding the imposition of restrictions, based on place of birth or residence qualifications, on taking of employment in HKSAR for the purpose of safeguarding the employment opportunities of workers in HKSAR. We have carefully considered the Committee’s recommendation. However, we have concluded that the declaration remains necessary because it affords flexibility in the formulation of measures to protect the interests and employment opportunities of local workers. We therefore respectfully advise that we propose to retain it.” In my view, these paras made it quite clear that there was no general, unrestricted right to work, particular for persons like the Applicants. I shall say more about the Reservation in the next section. (b) Secondly, and perhaps more important, whatever the status of this paper which after all provides only a somewhat generalised and unanalysed view of the question, it is to matters of substance that one must pay particular attention. As a matter of substance, it is important to examine the relevant statutory provisions to see whether, following the dualist approach, treaty obligations have indeed been incorporated into domestic legislation and, if so, to what extent. As seen above, Article 6 (in the sense advanced by the Applicants) has not been incorporated into any of the provisions in the IO identified by the Applicants. The most that can be said is that there is some allowance made for persons like the Applicants to be permitted to work, but this is far from the general, unrestricted right which is said to exist. 61. Accordingly, whatever the effect or ambit of Article 6 of the ICESCR, even if it provides for the general and unrestricted right to work which the Applicants advance as its effect, this Article does notenure to their benefit. It has not been incorporated into Hong Kong domestic legislation. 62. At the hearing, Mr Fordham QC made submissions based on a Convention or treaty-compliant interpretation of relevant provisions of the IO which give the DOI a discretion to determine whether permission to work may be given to the Applicants. The basic submission was that where a discretion was given to the DOI by statute, the relevant provisions should be given an interpretation that accorded with international obligations; and relevant in this context was Article 6 of the ICESCR. Reliance was placed on a number of principles: that where a provision was ambiguous and capable of bearing different meanings which may comply or conflict with treaty obligations, then the Court will adopt the construction that is treaty-compliant[90]; the principle of legality meaning that where a statutory provision is in general terms, then this will be insufficient to override fundamental rights unless it clearly or expressly does so[91]; that where necessary, the Court will effect a remedial construction of the relevant statutory provisions.[92] 63. It is unnecessary to go into the submissions based on these principles. It was accepted that before they can apply, there must exist a constitutional or fundamental right in the first place. The Applicants are unable to get over this hurdle. Under the dualist principle, Article 6 of the ICESCR (as the Applicants have construed it) has not been incorporated into domestic legislation. 64. This conclusion is supported all the more when one looks at the Reservation entered into by the United Kingdom Government on 20 May 1976 in relation to the ICESCR. E.4 The effect of the Reservation of the United Kingdom Government dated 20 May 1976 in relation to Article 6 of the ICESCR 65. The Reservation was in these terms: “The Government of the United Kingdom reserve the right to interpret article 6 as not precluding the imposition of restrictions, based on place of birth or residence qualifications, on the taking of employment in any particular region or territory for the purpose of safeguarding the employment opportunities of workers in that region or territory.” 66. From a simple reading of this Reservation, it seems clear that, whatever the effect of Article 6 and even assuming that it would otherwise give a general and unrestricted right to work to persons like the Applicants, the intention was to reserve the right to impose restrictions on the application of that Article. Just as in the case of the Reservation entered by the United Kingdom Government to the ICCPR, Article 39(1) of the Basic Law has the effect in any event of enabling the ICESCR to remain in force only “as applied to Hong Kong”, in other words, that Convention applies in Hong Kong subject to the Reservation.[93] 67. The Applicants made two points:- (1) First, on its true construction, while the Reservation might enable possible restrictions based on birth and residence to be imposed, whether or not as a matter of law such restrictions were valid, however, could only be determined – and determined ultimately only by the courts – by an application of an appropriate constitutional test.[94] (2) Secondly, the so-called Reservation was not a Reservation at all in international law; it was merely an interpretative declaration. According to the definition section of the Vienna Convention on the Law of Treaties, a reservation has the following meaning[95]:- “(d) “‘reservation’” means a unilateral statement, however phrased or named, made by a State, when signing, ratifying, accepting, approving or acceding to a treaty, whereby it purports to exclude or to modify the legal effect off certain provisions of the treaty in their application to that State;” Sometimes, States enter what is known as an interpretative declaration by which it seeks merely to advance a preliminary interpretation dealing with a subject but which does not purport to be binding; in other words, it does not seek to modify a State’s obligations in entering into an international obligation and such interpretation is subject to a different interpretation placed in it by the courts.[96] 68. In my view, these points, not really advanced with much enthusiasm, can be shortly dealt with:- (1) It would be surprising if the intention of the Reservation was as narrow as the Applicants submit. The language of it does not bear such a meaning. Nor can such a construction of it follow from the context and purpose of the Reservation, which can be taken to be the safeguarding of the employment opportunities of residents in the relevant region or territory. The construction advanced by the Applicants would also be somewhat pointless. As Fok JA reasoned in his Judgment in the Court of Appeal,[97] if all that the Reservation did was to identify restrictions which may be imposed on the Article 6 right but subject ultimately to a justification test, this was already inherent in Article 4 of the same Convention.[98] (2) The Reservation is clearly a reservation for the purposes of excluding or modifying the obligation obtained in Article 6 of the ICESCR. It actually uses the term “reserve”, and the intention of the Reservation is clear, as indicated above, from its context and purpose. It is important to look at its “substantive content”[99] in order to determine this question. It is also of note that textbooks writers regard the Reservation as a reservation: see, for example, The International Covenant on Economic, Social and Cultural Rights: A Perspective on its Development by Matthew Craven.[100] F. ARTICLE 33 OF THE BASIC LAW 69. I now come to the third of the provisions said by the Applicants to provide the basis for saying that a constitutional right to work exists. Article 33 of the Basic Law states:- “Hong Kong residents shall have freedom of choice of occupation.” 70. As I understand Mr Fordham QC’s submission, the relevance of Article 33 of the Basic Law lies in the assumption within it that there is a right to work in general. Thus regarded, this provision provided another means by which, following the dualist principle, Article 6 of the ICESCR was incorporated into Hong Kong domestic law. The paper setting out the views of the PRC regarding the implementation of the ICESCR[101] made reference to Article 33 of the Basic Law as being the constitutional guarantee of Article 6.[102] 71. Article 33 does not refer to the right to work in general. It is much narrower than that, dealing only with the freedom of choice of occupation. If it was intended that a wider right was to exist, the article would simply have said so or it would have been made much clearer, rather than to adopt a somewhat elliptical technique. 72. Fok JA in his Judgment in the Court of Appeal said this[103]:- “139. BL33 has its origins in article 3(5) (§17) of the Joint Declaration and Annex I Section XIII to the Joint Declaration (§151) both of which refer to various rights and freedoms including that “of choice of occupation”. No wider right to work is expressly referred to. At the time of the Joint Declaration, the significance of a freedom of choice of occupation was the practice in the PRC’s planned economy of assigning students joining universities to specific fields of studies and occupations after graduation: see Chan and Lim (General Editors): Law of the Hong Kong Constitution (Sweet & Maxwell, 2011) at §24.004. 140. In my opinion, a right to choose one’s occupation is narrower than a right to work in general. As the CESCR General Comment No. 18 states, at §6, the right to work is not to be understood as an absolute and unconditional right to obtain employment but includes the right to decide freely to accept or choose work. This demonstrates that the freedom of choice of occupation is therefore only part of the wider right to work in ICESCR6. If BL33 was intended to confer more than a freedom of choice, one would have expected its wording to be different. 141. Furthermore, the relevant context of BL33 would include the fact that by reason of BL39, the ICCPR and ICESCR as applied to Hong Kong include both the immigration reservation, reflected in HKBORO s. 11, and the UK’s reservation to ICESCR6. I have addressed the construction of those reservations above and, in the light of my conclusions as to their proper interpretation, it would not be right to conclude that BL33, properly construed in its context, is co-extensive with ICESCR6 since this would be to ignore the UK reservation to that article. 142. I would add that this conclusion as to the proper construction of BL33 is consistent with previous cases dealing with BL33 which have held that its effect is not to guarantee a right to be employed either generally or in any particular field, but instead, is to protect against conscription to particular fields of occupation: see Cheng Chun-ngai Daniel v Hospital Authority, unrep., HCAL 202/2002 (12 November 2004) at §55; Financial Services and Systems Limited v Secretary for Justice, unrep., HCAL 101/2006 (6 July 2007) at §§49-53; Ng King Tat Philip v Post-Release Supervision Board, unrep., HCAL 47/2010 (23 August 2010) at §§116-117. See also, Hong Kong’s New Constitutional Order (2nd Ed.) by Professor Yash Ghai at pp. 435-436. 143. In my view, therefore, the right conferred by BL33 is a passive or negative right of freedom to choose an occupation, but does not imply a right to take up available employment in the first place. Nor does it confer an unqualified right to obtain employment, which is necessarily subject to market forces and also subject to legal constraints, such as visa and qualification requirements.” 73. With respect, I agree with this passage. 74. Lord Pannick QC also relies, in this context, on Article 41 of the Basic Law[104] to contend that in any event Article 33 has no application to non-Hong Kong residents like the Applicants. However, it is not necessary to arrive at a view on Article 41 in this context. G THE COMMON LAW RIGHT TO WORK 75. As a back stop submission, the Applicants finally advance the argument that a common law right to work exists. It is not necessary to deal at length with this submission. None of the authorities cited by the Applicants bears this out and, as Lord Pannick QC points out, the context of those cases are quite far removed from the present.[105] More important, it is difficult to conceive of the existence of a right to work under the common law in the circumstances of the present case, particularly in the light of the discussion above relating to s 11 of the HKBORO, Article 39 of the Basic Law and the two Reservations made regarding the ICCPR and the ICESCR. H PROPORTIONALITY 76. From the above, it is clear that no constitutional right to work exists in favour of the Applicants in the present case. No questions of proportionality therefore arise for consideration. I THE DIRECTOR’S DISCRETION AND IDT 77. As mentioned above, it does not follow that the absence of a constitutional right to work means that the DOI, in the exercise of his discretion whether or not to permit persons like the Applicants to work, can do as he pleases without any limitation. It has never been the Respondent’s case that this would be the consequence. Nor can it be.[106] The precise limits of the DOI’s discretion in this context will of course have to be worked out in future cases. For the time being, one factor which affects the discretion – and it is an important one – is the IDT factor. This has already been discussed earlier.[107] J CONCLUSION 78. For the above reasons, I would dismiss the appeals. I would, however, make an order nisi that there be no order as to costs. The Applicants can be said to have been partially successful in their submissions regarding IDT.[108] The Applicants’ own costs shall be taxed in accordance with the Legal Aid Regulations (Cap 91A). If any party wishes to have a different order for costs, written submissions should be served on the other party or parties and lodged with the Court within 14 days of the handing down of this judgement, with liberty on the other party or parties to serve and lodge written submissions within 14 days thereafter. In the absence of such submissions, the order nisi will stand absolute at the expiry of the time limited for these submissions. Mr Justice Ribeiro PJ: 79. I agree with the judgment of the Chief Justice. Mr Justice Tang PJ: 80. I agree with the judgment of the Chief Justice and the observations of Mr Justice Chan NPJ. Mr Justice Chan NPJ: 81. I entirely agree with the judgment of the Chief Justice. I would only make one observation on art 39(1) of the Basic Law. 82. Insofar as it is argued that there is an obligation under art 39(1) to enact new laws to implement the ICCPR and ICESCR and that there is a right to apply to court to mandate governmental compliance with this obligation, that is not the effect of art 39(1). Upon the true construction of this provision, having regard to its purpose and context (including the history of Section XIII of the Joint Declaration which was the origin of art 39(1)), art 39(1) imposes no such obligation. This is not only clear from the language in the English version. This is also borne out by the language used in the Chinese version: it contains no mandatory words, but uses words which state clearly that only those relevant provisions which are applicable to Hong Kong (適用於香港的有關規定) continue in force (繼續有效); it also makes no mention of any need for future legislation, but states, equally clearly, that those applicable provisions are implemented through the laws of the HKSAR (通過香港特別行政區的法律予以實施). This construction is consistent with the mutual understanding of the parties to the Joint Declaration and what was explained in the White Paper issued by the British Government and reproduced in Hog Kong in 1984 (paras 43 to 47) before the signing of the Joint Declaration. 83. As the Chief Justice said in para 58 above, art 39(1) is declaratory of the position in Hong Kong as understood by the parties to the Joint Declaration at that time and reflects the dualist principle that international treaties do not confer or impose any rights or obligations unless they are made part of the domestic law by legislation. See paragraphs 43 and 44 in Ubamaka v Secretary for Security & another. Lord Clarke of Stone-cum-Ebony NPJ: 84. I also agree with the judgment of the Chief Justice. Chief Justice Ma: 85. For the above reasons, the appeals are unanimously dismissed. The Court also makes an order nisi as to costs as set out in para 78 above. Mr Michael Fordham QC, Mr Earl Deng and Mr Timothy Parker, instructed by Barnes & Daly, assigned by DLA, for the Appellants Lord David Pannick QC, Mr Paul Shieh SC and Ms Grace Chow, instructed by the Department of Justice, for the Respondent [1] This is the common abbreviation for the 1951 United Nations Convention Relating to the Status of Refugees and the 1967 Protocol to the Convention. Incidentally, that Convention contains an express provision (Article 17) allowing refugees the right to work. [2] The relevant person within the Government responsible for immigration matters is the Director of Immigration, the Respondent in the present appeals (“the DOI”). [3] The DOI may be required, if necessary, at this stage also to consider whether or not the person is a refugee: see C and Others v Director of Immigration [2013] 4 HKC 563. On 7 February 2014, the Government announced details of a unified screening mechanism to determine claims for non-refoulment protection. [4] GA was recognized as a mandated refugee in July 2004 (having arrived in Hong Kong in June 2004); FI in December 2006 (he arrived in Hong Kong in September 2005), JA in October 2002 (he arrived in Hong Kong that month as well). [5] The Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (usually referred to as the Convention Against Torture, and abbreviated to CAT). [6] Article 3(1). [7] This was the effect of the decision of this Court in Secretary for Security v Sakthevel Prabakar (2004) 7 HKCFAR 187. [8] At the time of the hearing before the Court of First Instance in the present case, he is recorded by the Judge (Andrew Cheung J as he then was) as being the first successful screened-in torture claimant in Hong Kong. [9] Judgment of Andrew Cheung J dated 6 January 2011 at paras 5 to 11; Judgment of Fok JA (as he then was) dated 27 November 2012 at paras 7 to 9. [10] In para 7 of the Judgment. [11] The Applicants were represented in these appeals by Mr Michael Fordham QC, Mr Earl Deng and Mr Timothy Parker. [12] The familiar three questions of - (1) Can the interference be justified by reference to a legitimate aim?; (2) Is the interference rationally connected to that legitimate aim; and (3) Is the interference no more than necessary to achieve the legitimate aim? [13] Contained in the Hong Kong Bill of Rights Ordinance Cap 383. Article 14 states that there should be no interference with a person’s privacy. The Article is set out in full in para 18 below. [14] Para 55 below. [15] See para 69 below. [16] The DOI was represented in these appeals by Lord Pannick QC, Mr Paul Shieh SC and Ms Grace Chow. [17] Set out in para 20 below. This section states that in relation to persons not having the right to enter and remain in Hong Kong, the BOR does not affect any immigration legislation governing (among other things) a person’s stay in Hong Kong. [18] This is relevant in relation to Article 14 of the BOR. The Reservation is set out in para 29(2) below. [19] I have referred to this as a Reservation at this stage but it is contended by the Applicants that it is not a reservation as such but only an interpretative declaration. This Reservation is set out in para 65 below. [20] Set out in para 74 footnote 104 below. [21] See Section D.3 below. [22] Dated 6 January 2011. [23] For example, procedural fairness, Wednesbury unreasonableness etc. See also Section I below. [24] In para 121 of the Judgment. [25] Stock VP, Kwan and Fok JJA. [26] The Judgment of Fok JA with which the other Judges concurred. [27] Referred to in para 7(5) above. [28] As stated in para 19 of the Judgment of the Court of Appeal, MA has, since the judicial review proceedings commenced, married a Hong Kong Permanent Resident and has obtained a dependency visa. He is therefore able to work in Hong Kong. [29] Cf Secretary for Security v Sakthevel Prabakar (2003) 6 HKCFAR 397, at para 4; (2004) 7 HKCFAR 187, at para 42. Chit Fai Motors Company Limited v Commissioner for Transport [2004] 1 HKC 465. [30] (2012) 15 HKCFAR 743. [31] The analysis is contained in the Judgment of Ribeiro PJ with which the other Judges concurred. [32] This is the power to deport an immigrant (a non-Hong Kong Permanent Resident) if that person is found guilty of an offence punishable with not less than two years imprisonment. [33] See paras 55 to 78 of the Judgment of Ribeiro PJ. [34] Paras 79 to 95 of the Judgment. [35] Paras 96 and 102 of the Judgment. [36] In Section D.3 below. [37] The power vested in the DOI and other immigration officers to impose conditions of stay. [38] The power vested in the DOI to grant permission to work to a screened-in torture claimant (such as PA). [39] [2013] 2 HKLRD 533, at paras 76 to 77. There, the Court was concerned with the proper construction of the words “ordinarily resided” in Article 24(2)(4) of the Basic Law. [40] Reference was made to the Judgment of Sir Anthony Mason NPJ in HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574. This approach has been reiterated on a number of occasions and recently by this Court in Fully Profit (Asia) Limited v Secretary for Justice [2013] 6 HKC 374 at para 15. [41] Section 11 is contained in Part III of the HKBORO, which is headed “Exceptions and Savings”. [42] The BOR incorporates into Hong Kong municipal law the provisions of the ICCPR. [43] Article 19 of the Vienna Convention on the Law of Treaties. [44] The main reason was said to the prevention of an influx of immigrants entering the United Kingdom. [45] See Ubamaka at para 67. [46] Ubamaka at para 69. [47] See para 57 below. [48] At paras 48 to 96. [49] At para 103. [50] (1996) 23 EHRR 143 at para 73. [51] I shall come to this in Section D.3 below. [52] Set out in para 59(1)( c) below. [53] Section 14 states:- “Temporary savings (1) For a period of 1 year beginning on the commencement date, this Ordinance is subject to the Ordinances listed in the Schedule. (2) This Ordinance does not affect- (a) any act done (including any act done in the exercise of a discretion); or (b) any omission authorized or required, or occurring in the exercise of a discretion, before the first anniversary of the commencement date, under or by any Ordinance listed in the Schedule.” The Schedule to the HKBORO lists the IO among others. [54] Discussed in Section D.3 below. [55] Section 38AA states:- “Prohibition of taking employment and establishing business, etc. (1) A person- (a) who, having landed in Hong Kong unlawfully, remains in Hong Kong without the authority of the Director under section 13; or (b) in respect of whom a removal order or a deportation order is in force, must not take any employment, whether paid or unpaid, or establish or join in any business. (2) A person who contravenes subsection (1) commits an offence and is liable on conviction to a fine at level 5 and to imprisonment for 3 years.” [56] This consideration by the Human Rights Committee is published in the Sixth Periodic Report of the Committee in its Consideration of Reports submitted by States Parties under Article 40 of the ICCPR (dated 18 May 2007, CCPR/C/GBR/6). This Report related to the United Kingdom. The relevant legislation relating to detention was the Anti-terrorism, Crime and Security Act 2001. [57] Dated 16 January 2008 (A/HRC/7/4/Add.1). [58] In para 3 footnote 1 above. [59] At para 41 of the Judgment of Fok JA. [60] In paras 34 and 47 of its Judgment. [61] See para 32(2) above. [62] See para 33 above. [63] See para 49 of the Judgment of Fok JA. [64] See para 33 above. [65] See paras 28 to 30 above. [66] Para 10 above. See also Section I below. [67] At paras 106 to 116, 133. [68] Section 5 states:- “5. Public emergencies (1) In time of public emergency which threatens the life of the nation and the existence of which is officially proclaimed, measures may be taken derogating from the Bill of Rights to the extent strictly required by the exigencies of the situation, but these measures shall be taken in accordance with law. (2) No measure shall be taken under subsection (1) that- (a) is inconsistent with any obligation under international law that applies to Hong Kong (other than an obligation under the International Covenant on Civil and Political Rights); (b) involves discrimination solely on the ground of race, colour, sex, language, religion or social origin; or (c) derogates from articles 2, 3, 4(1) and (2), 7, 12, 13 and 15.” [69] At para 114. [70] At Section J.2; paras 172 to 176. [71] [2006] 1AC 396. [72] Para 173. [73] At para 7. [74] At para 8. Limbuela was a case involving IDT. There, a challenge was made against a decision refusing to provide welfare support to asylum seekers. Under the relevant legislation in the United Kingdom, support was generally available to an asylum seeker only if he or she made a claim for asylum as soon as practicable after arrival in the United Kingdom, but this legislation was subject to compliance with rights under the European Convention of Human Rights. The applicants in the case claimed that the refusal amounted to IDT, a Convention right (under Article 3). [75] Limbuela at para 9 (Lord Bingham of Cornhill) and para 59 (Lord Hope of Craighead). [76] Limbuela at para 59 (Lord Hope of Craighead) and para 72 (Lord Scott of Foscote); Soering v United Kingdom (1989) 11 EHRR 439, at para 89. [77] At para 172. [78] At paras 174, 175. [79] See Limbuela at paras 8, 62, 72, 78 and 102. [80] Para 45. [81] Paras 9 and 13 above. [82] The Judgments of the lower courts preceded the decision of this Court in Ubamaka. [83] See paras 6(3) and 16(2) above. [84] See Ubamaka at para 172. [85] At para 43. [86] See Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381, at para 53. [87] At para 5 of the paper dated 23 December 1998 (E/C.12/1998/24). [88] Paper dated 4 March 2004 (E/1990/5/Add.59). [89] At paras 130, 131. [90] See Ubamaka at para 43 referring to R v Secretary for the Home Department ex parte Brind [1991] 1 AC 696, at 747-8. [91] See A v Commissioner of Independent Commission Against Corruption (2012) 15 HKCFAR 362, at paras 67 to 69 referring to R v Secretary of State for the Home Department ex parte Simms [2002] 2 AC 115 and Coco v The Queen (1993) 179 CLR 427. [92] See HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574, at paras 62 to 79. [93] See para 29(2) above; Ubamaka at para 53. [94] Such as the proportionality test. [95] See Article 1(d). [96] See Belilos v Switzerland (1988) 10 EHRR 466, at para 40. [97] At para 112 of the Judgment of the Court of Appeal. [98] Set out in para 55 above. [99] Belilos at para 49. [100] Clarendon Press, 1995. [101] Earlier referred to in para 59(2) above. [102] At Annex 2A. [103] At paras 139 to 143. [104] Article 41 of the Basic Law states:- “Persons in the Hong Kong Special Administrative Region other than Hong Kong residents shall, in accordance with law, enjoy the rights and freedoms of Hong Kong residents prescribed in this Chapter.” [105] They deal largely with issues of restraint of trade or analogous concepts. [106] For a useful discussion of the limits, see C and Others v Director of Immigration [2013] 4 HKC 563, at paras 18-22 (Tang PJ) and 71-86 (Sir Anthony Mason NPJ). [107] At Section D.3 above. [108] In the courts below, it had been held that IDT could not be of any relevance by reason of s 11 of the HKBORO. The decisions preceded the decision of this Court in Ubamaka.
Mr Justice Ribeiro PJ: 1. In this appeal, the appellant’s conviction for a conspiracy allegedly entered into in Hong Kong involving the commission of an offence abroad was called into question. At the hearing, we allowed the appeal and quashed the conviction with reasons to be given later. These are the Court’s reasons. A. The charge 2. On 23 May 2011, Wong Tak Wai and Lee Hoi Tong, John (referred to below and in these Reasons as D1 and D2 respectively), as well as the appellant Wong Tak Keung were convicted after trial before Barnes J and a jury[1] of various counts of conspiracy to traffic in a dangerous drug.[2] 3. This appeal concerns only the appellant. He was convicted of having conspired, between 1 December 2009 and 6 March 2010, with D1 and D2 and with Pang Chun Kit (“Pang”), Yeung King Wan, Ferrous (“Yeung”) and Au Yeung Hin Cheong (“Au Yeung”) to traffic unlawfully in 650 gm of methamphetamine, commonly called “ice”. He was sentenced to 19 years’ imprisonment. B. The prosecution’s case 4. The prosecution’s case was that the trafficking which was the object of the conspiracy involved the export of ice from Hong Kong to Australia. This comprised a process which began with D1 and D2 grooming Pang, then aged 15, to be a courier, having used him on three previous occasions to smuggle ice into Hong Kong from Shenzhen. At the end of 2009, they organized his flight, provided him with money and 650 gm of ice, and equipped him to smuggle the drug into Australia. D1 and D2 clearly conspired together and did those acts in Hong Kong. They were duly convicted. But there was no evidence that the appellant (who is D1’s brother) had played any part in that process. 5. Pang arrived in Sydney on 1 January 2010 and succeeded in getting through Australian customs with the ice concealed in his shoes. Between 2 and 17 January, Pang performed various acts pursuant to instructions received from D1 by telephone. This included selling part of the 650 gm of ice he had smuggled in to someone called “Ah Leung”; receiving A$90,000 from Ah Leung; receiving a further 650 gm of ice from Au Yeung (one of the alleged co-conspirators); and paying Au Yeung A$89,000. 6. On 22 January, someone stole the ice which was in Pang’s custody from the safe in his hotel room. He reported this to D1 and was eventually, at the end of February 2010, taken by Yeung (another alleged co-conspirator) to a house where the appellant first came into the picture. He had arrived in Australia on 26 February and, over several days, administered a series of brutal beatings and forms of torture on Pang, accusing Pang of having stolen the ice and demanding that he disclose its whereabouts. That accusation was consistently denied by Pang. Then, on 5 and 6 March, the appellant and Pang separately returned to Hong Kong. Pang was then subjected to further torture by the appellant among others, and told that he had to continue to smuggle drugs for D1 to make up for the drugs lost in Australia. The maltreatment he had suffered was of such severity that Pang was driven to attempting suicide. While recovering in hospital, he revealed what had happened, leading eventually to the arrest of D1, D2 and the appellant, and to Pang giving evidence against them under immunity. 7. It is of central importance to note (i) that there was no evidence of the appellant’s involvement until almost two months after the ice had been exported from Hong Kong; and (ii) that his conduct relied on by the prosecution for establishing liability occurred entirely in Australia. 8. These features of the case give rise to two major difficulties in the prosecution’s case: On what basis can it be established that the appellant was a party to the conspiracy charged? Even assuming that he was party to the conspiracy entered into in Hong Kong and that his criminal conduct in Australia was one of the objects of the conspiracy charged, does the Hong Kong Court have jurisdiction over a conspiracy to commit the relevant offence abroad? C. Was the appellant a party to the conspiracy charged? 9. The conspiracy charged is a conspiracy to traffic in dangerous drugs. The substantive offence of trafficking is created by section 4(1)(a) of the Dangerous Drugs Ordinance[3] which states: “... no person shall, on his own behalf or on behalf of any other person, whether or not such other person is in Hong Kong – traffic in a dangerous drug ...” 10. “Trafficking” is defined in section 2 of that Ordinance as follows: “‘trafficking’, in relation to a dangerous drug, includes importing into Hong Kong, exporting from Hong Kong, procuring, supplying or otherwise dealing in or with the dangerous drug, or possessing the dangerous drug for the purpose of trafficking, and ‘traffic in a dangerous drug’ shall be construed accordingly...” 11. As previously noted, the trafficking in the present case was alleged to involve exporting from Hong Kong the 650 gm of ice. The prosecution’s evidence, as we have seen, focusses on the steps taken by D1 and D2 in Hong Kong at the end of December 2009 to groom, equip and send Pang off as courier, culminating in the successful smuggling of the ice out of Hong Kong and into Australia. 12. But the evidence against the appellant, which concerned only his assaults on Pang two months later, does not on its face indicate that he was a party to the conspiracy charged. It was accordingly argued on the appellant’s behalf that the conspiracy to export the ice was complete upon Pang’s departure from Hong Kong on 1 January 2010 and that there was no evidence that the appellant was ever a party thereto. C.1 Inferring that the appellant was a conspirator from the start 13. The respondent’s first answer was to contend that the appellant’s subsequent brutal treatment of Pang with a view to recovering the missing drugs justifies the inference that he had been a party to the original conspiracy from the start. For that contention to be sustained, that inference must be the only reasonable inference which can be drawn on the evidence.[4] Although the trial judge recognized this probative requirement, her direction to the jury on this point went seriously astray. She stated: “If you accept [Pang’s] evidence, the [appellant] and ‘Uncle Yeung’ were sent by the 1st accused to put pressure on [Pang] to return the lost ‘ice’. In all the circumstances, can you draw the only reasonable inference that the [appellant] was a party to the conspiracy to traffic the 650 grammes? Is it a reasonable inference that the [appellant] and ‘Uncle Yeung’ just went to beat [Pang] up on instruction of the 1st accused, and they had absolutely nothing to do with the conspiracy, nothing to do with the importing of the 650 grammes? Or is it the only reasonable inference is that the [appellant] and Yeung King-wai were parties to this conspiracy to traffic the 650 grammes of ‘ice’ out of Hong Kong into Australia? It is a matter for you.” (Italics supplied) 14. This had been presaged by the trial judge when, in a discussion with the appellant’s counsel, her Ladyship said: “Well, the jury will be asked to draw the inference, if he had nothing to do with it, why would [he] go and beat up [Pang]?” 15. The direction was seriously defective since it suggests to the jury that unless they thought the appellant “had absolutely nothing to do with the conspiracy”, they could properly draw the inference that he had been party to the conspiracy as charged. That was plainly erroneous. The inference could only be drawn if it was the only reasonable inference to be drawn from the evidence that some two months after the ice was exported, the appellant went to Australia and there administered the assaults on Pang. It is obviously at least as reasonably to be inferred from such evidence that he only became involved after and separately from the original conspiracy, making it impermissible to infer that he was a party thereto. 16. A further error evident in the direction involves its reference to the conspiracy as one involving “the importing of the 650 grammes”. In the present case, such “importing” could only mean importing into Australia. That was not, and could not be, the object of the conspiracy charged. As is evident from the statutory definition set out above, “trafficking” may consist (inter alia) of exporting drugs from Hong Kong or importing them into Hong Kong. The only form of trafficking capable of constituting the actus reus of the substantive offence in the present case was exporting the ice from Hong Kong. Of course, the exported drugs were intended to be smuggled, and thus imported, into Australia. But such importation is not a constituent element of the substantive offence under Hong Kong law and it was not (and could not be) the legally relevant object of the conspiracy charged. Importing drugs into a foreign country raises issues of extra-territorial jurisdiction and is not a form of trafficking penalised by sections 2 and 4(1)(a) of the Dangerous Drugs Ordinance. C.2 Inferring that the appellant subsequently joined the conspiracy 17. An alternative means by which the respondent sought to uphold the appellant’s conviction as a party to the original conspiracy involves the contention that, if not a party from the start, he subsequently became a party. This was an argument favoured by Lunn JA in the Court of Appeal. His Lordship held that the jury were entitled to convict the appellant “if they were satisfied that the [appellant’s] role was to seek to recover the lost ice” since they would be “entitled to conclude that he had become a party to the conspiracy to traffic unlawfully in the 650 grammes of ice as particularised in Count 5”.[5] That proposition faces the same difficulties since there was no evidence and no basis for finding as an irresistible inference that the appellant had “become” a party to the pre-existing conspiracy to export. Not surprisingly, Mr Gerard McCoy SC[6] was unable to say when the appellant allegedly joined the original conspiracy. That causes the respondent difficulties since the object of a conspiracy to export would have been achieved when Pang departed from Hong Kong on 1 January 2010 with the ice, leaving no extant conspiracy for the appellant to join after that date. In such circumstances, an inability to say when, if at all, the appellant became a party completely undermines the respondent’s argument. We might add that it was a self-destructive argument to submit that the only reasonable inference was (i) that the appellant had been a party to the conspiracy from the start; and simultaneously, was (ii) that he had only joined it subsequently. C.3 The appellant’s acts as implementing an expanded conspiracy 18. Assuming (as we have held) that no proper basis exists for inferring that the appellant was from the start, or subsequently became, a party to the original conspiracy to export the drug, a more elaborate third alternative aimed at fixing the appellant with liability as a conspirator was advanced by the respondent. This involved a two-stage argument. 19. It was submitted first, that the conspiracy was not simply a conspiracy to traffic by exporting the drug, but a conspiracy which encompassed trafficking the drug in Australia and repatriating the proceeds to Hong Kong, the purpose of this argument being to provide a basis for contending that the appellant’s assaults on Pang came within the object of the expanded conspiracy. 20. The respondent’s printed case formulates the expanded conspiracy in the following terms: “152. The conspiracy alleged under Count 5 was an agreement among the three accused and the named co-conspirators to pursue a ‘course of conduct’, including: (1) arranging PW1 to bring the 650 g of ICE from Hong Kong to Australia; (2) instructing PW1 to sell the ICE in Australia; (3) when the ICE was said to be lost by PW1, the departure of the Appellant and Uncle Yeung from Hong Kong to Australia to exact violence and interrogate PW1 to recover the missing ICE; and (4) arranging for the proceeds from the sale of ICE to be brought back to Hong Kong.” 21. This argument has to contend with extra-territorial difficulties since the appellant’s acts, even if properly regarded as something agreed upon by the conspirators in Hong Kong, were to take place only in Australia. This necessitated the second stage of the argument designed to overcome those jurisdictional difficulties. The suggested answer to those difficulties involved reliance on the Canadian Supreme Court’s decision in Libman v R,[7] to contend that the appellant’s acts in Australia were sufficiently linked to the original conspiracy to justify the assumption of jurisdiction by the Hong Kong courts. We deal with that argument below.[8] 22. A similar approach had been adopted in the Court of Appeal with Lunn JA holding that “the object of the conspiracy was to smuggle the ice out of Hong Kong and into Australia, distribute it in Australia, storing it safely until that was done, and to deal with the proceeds of sale.”[9] His Lordship also relied on Libman and certain other cases to provide an answer to the extra-territorial difficulties. C.4 Expanded conspiracy impermissible 23. In our view, the argument advanced in support of the third alternative is bad at both stages. To characterise the object of the conspiracy in such expanded terms goes far beyond the charge preferred in the indictment and indeed, alleges an offence which goes beyond the statutory definition of the substantive offence. The indictment alleges a conspiracy to traffic in dangerous drugs which, as noted above, can only mean a conspiracy to export such drugs from Hong Kong in the present case. It was impermissible for the respondent and the Court of Appeal to amend and expand the charge in the manner proposed. To do so involved upholding the conviction on a basis which the appellant was never confronted with at the trial. More fundamentally, for the reasons given in the section which follows, this alternative approach postulates a conspiracy which was not justiciable in Hong Kong. D. Issues as to territorial jurisdiction 24. In widening the object of the conspiracy beyond export of the 650 gm of ice from Hong Kong so as to embrace as part of its object trafficking in Australia, involving also the appellant’s assaults on Pang, the respondent and the Court of Appeal were positing a conspiracy to commit offences abroad which falls outside the jurisdiction of the Hong Kong courts. D.1 Territorial jurisdiction at common law 25. As the Privy Council noted in Somchai Liangsiriprasert v Government of the United States of America,[10]the law of conspiracy in Hong Kong at common law is the same as the common law of conspiracy in England. 26. It is clearly established that at common law, a conspiracy to commit an offence abroad is not indictable in Hong Kong unless the contemplated offence is one for which an indictment would lie here.[11] Accordingly, to determine whether a defendant can be tried on a conspiracy charge in Hong Kong, it is necessary to ascertain whether the contemplated substantive offence would, if committed, be itself indictable in Hong Kong. 27. The general rule is that the courts’ criminal jurisdiction is territorial. As Lord Salmon pointed out, it is a – “... well-established principle that crime is generally regarded as territorial, ie, punishable only in the jurisdiction in which it is committed. For example whilst A and B are both in the USA, A robs B (an English subject); if A subsequently comes to the UK he cannot be prosecuted here for that crime.” [12] And as Lord Diplock explained, that principle rests upon the international rules of comity.[13] 28. This applies both to common law and statutory offences. Offence-creating statutes are construed applying a strong presumption against extra-territorial effect.[14] It follows that the jurisdiction of our courts to try conspiracies is generally limited to conspiracies to commit offences within Hong Kong. 29. This rule is subject to statutory modification. In certain cases, there is express statutory authority to try offences committed abroad. One example involves the offence of murder.[15] Other examples include the offence of offering an advantage to a public servant contrary to the Prevention of Bribery Ordinance[16] and the offences of dishonesty listed in the Criminal Jurisdiction Ordinance (“CJO”).[17] In such cases, since commission of the specified offences abroad is made indictable by statute, a conspiracy entered into in Hong Kong to commit such offences is also justiciable here. No statutory exception applies to drug trafficking. 30. Where there is no express statutory provision, whether a person can be guilty at common law of conspiracy to commit an offence involving certain foreign elements depends on whether the contemplated substantive offence, if committed, would be indictable here. 31. Usually, this does not cause any difficulty. Four categories of cases may be noted. (a) First and obviously, if the conduct constituting the substantive offence contemplated by the conspirators entirely occurs abroad, neither the substantive offence nor any conspiracy entered into in Hong Kong to commit it are indictable here.[18] (b) Secondly, if all the elements essential to establishing liability for the contemplated offence occur in Hong Kong, both the substantive offence and any conspiracy to commit it are indictable here. This is so even if the defendant’s conduct may in fact produce certain consequences abroad. Treacy v DPP,[19] is an illustration. The House of Lords held that the posting of a letter in the Isle of Wight demanding money with menaces from the addressee in Germany constituted the substantive offence of blackmail since the making of such a demand was the essential criminal act occurring in England. The fact that the letter was received and read in Germany was not essential to liability and did not deprive the English court of jurisdiction. (c) In a third category of cases, a conspiratorial agreement may be made abroad, with a view to committing an offence in Hong Kong. In such cases, if one or more of the conspirators should come to Hong Kong they would be subject to indictment for the conspiracy here, just as they would be indictable for the substantive offence if and when they committed it here. The Court asserts a protective jurisdiction to deter and punish offences intended to be carried out in Hong Kong.[20] 32. Pausing here, the position was conveniently summarised by Lord Bingham CJ in R v Jamshid Hashemi Naini,[21] in the following propositions: “It seems to us that, in the light of all this authority, certain principles emerge. First, in determining issues of jurisdiction, a distinction is to be drawn between charges of substantive offences and charges of conspiracy. That we regard as supported by the decisions in Liangsiriprasert v Government of the United States of America and Manning.[22] Secondly, it is clear that the courts of England and Wales have no jurisdiction to try a defendant on a count of conspiracy if the conspiracy, although made here, was to do something in a foreign country, or which could only be done in a foreign country. That proposition is supported by Board of Trade v Owen, Cox[23] and Attorney-General's Reference (No 1 of 1982).[24] Thirdly, in our view the authorities establish that the courts of England and Wales do have such jurisdiction if the conspiracy wherever made is to do something here or to do something which may be done here, whether wholly or in part, even if no overt act pursuant to the conspiracy is done in England and Wales. The residence of the party who suffers the loss does not determine where the crime of defrauding takes place. That conclusion is in our judgment supported by Kohn,[25] Board of Trade v Owen, Cox, Liangsiriprasert v Government of the United States of America, Sansom[26] and Manning.” 33. It is only in relation to a fourth category of cases that controversy has arisen and that the law has developed. This category involves cases where some of the constituent elements of the offence occur within the jurisdiction while other essential elements occur outside. Such cases concern what are sometimes called “result crimes” where a defendant does a prohibited act producing a prohibited result (such as obtaining property by an act of deception) and the act and the result occur in two different jurisdictions.[27] (a) The traditional view was that offences in this category were deemed to have been committed only in the place where the offence was completed – where the final essential element occurred – often called the “terminatory approach”. This is illustrated by R v Harden,[28] where the defendant, operating in England, was charged with obtaining cheques by false pretences. The cheques were held to have been obtained by him at the moment when they were posted to him in Jersey. It was consequently held that the offence was completed abroad and that there was no jurisdiction to try it in England. This “terminatory approach” is traceable to R v Ellis[29] and had support in (amongst other authorities) DPP v Stonehouse[30] and R v Manning.[31] (b) However, in recent English cases stemming from the judgment of Lord Woolf CJ in R v Smith (Wallace Duncan) (No 4)[32] a wider approach has been adopted whereby the substantive offence is held to be committed within the jurisdiction and thus justiciable by the English courts if “substantial activities constituting the crime” occurred within the jurisdiction, even if other essential elements of the offence also occurred abroad. This approach was approved by Lord Hope of Craighead in R (Purdy) v Director of Public Prosecutions[33]and subsequently applied by the English Court of Appeal in R v Sheppard.[34] (c) As we point out below,[35] it is this controversy which provides the context of the Canadian Supreme Court’s decision in R v Libman, La Forest J preferring this wider approach to the earlier “terminatory” theory. 34. Leaving aside for the moment the Libman approach, it is clear that at common law, the appellant could not validly be indicted as a party to the expanded conspiracy formulated by the Court of Appeal and by the respondent. Even assuming (contrary to what we have held) that the evidence established a conspiracy in Hong Kong that the appellant should fly to Sydney to assault Pang with a view to recovering the missing drugs, it would be a non-justiciable conspiracy having (so far as the appellant was concerned) the object of committing a substantive offence entirely in Australia. D.2 Crimes Ordinance, section 159A 35. Jurisdiction to try conspiracies involving a course of conduct in a foreign jurisdiction is now governed by section 159A of the Crimes Ordinance[36] which materially provides as follows: (1) Subject to the following provisions of this Part, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions ... (a) will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement ... he is guilty of conspiracy to commit the offence or offences in question. ... (3) In this section ‘offence’ means any offence triable in Hong Kong and includes murder notwithstanding that the murder in question would not be so triable if committed in accordance with the intentions of the parties to the agreement.” 36. Section 159A enacts the general common law rule limiting extra-territorial jurisdiction in conspiracy cases and provides that a conspiracy is justiciable in Hong Kong only if the agreed course of conduct involves committing a substantive offence which would be triable in Hong Kong. It therefore excludes conspiracies to commit offences abroad which are not triable here. Murder is expressly dealt with since, as we have seen, extra-territorial jurisdiction is granted by statute. 37. It follows that the respondent’s third alternative argument for establishing the appellant’s liability as a conspirator falls foul of section 159A just as it falls foul of the common law rule against extra-territorial jurisdiction. D.3 Purported reliance on R v Libman 38. Lunn JA (writing for the Court of Appeal) mentions, but does not examine the provisions of, section 159A. His Lordship apparently considered the jurisdictional problem solved by invoking the dictum of La Forest J in Libman v R,[37]where His Honour stated: “The English courts have decisively begun to move away from definitional obsessions and technical formulations aimed at finding a single situs of a crime by locating where the gist of the crime occurred and where it was completed. Rather, they now appear to seek by an examination of relevant policies to apply the English criminal law where a substantial measure of the activities constituting a crime take place in England, and restrict its application in such circumstances solely in cases where it can seriously be argued on a reasonable view that these activities should, on the basis of international comity, be dealt with by another country.” 39. Emphasising the words “a substantial measure of the activities constituting a crime take place in (Hong Kong)”, Lunn JA expressed the view that “[many] significant steps in furtherance of the conspiracy took place in Hong Kong” detailing them as follows: “... the ice was obtained packaged in sports shoes; then, an unsuccessful attempt was made by Pang Chun Kit to take the ice to Australia in December 2009; the failure was the result of the fastening on the shoes coming loose, exposing the concealed packets of ice and occurred before he reached the airport in Hong Kong; then, the ice was retrieved only to be returned to Pang Chun Kit concealed in a pair of sports shoes shortly before his re‑booked flight from Hong Kong on 1 January 2010; thereafter, the 1st applicant gave Pang Chun Kit regular instructions by telephone from Hong Kong in respect of the storage and disposal of the ice and the remittance of the proceeds.”[38] 40. His Lordship concludes: “Clearly, the activities described above as having occurred in Hong Kong in furtherance of the conspiracy fall within the phrase ‘a substantial measure of the activities’, so that there was jurisdiction to try the offence in Hong Kong.”[39] 41. This line of argument was adopted by Mr McCoy as the second stage of his argument in support of his third alternative basis for finding the appellant guilty as a conspirator. On the premise (which we have rejected) that the conspiracy encompasses as one of its objects, the appellant’s assaults on Pang in Australia with a view to recovering the missing drugs, the argument is that the foreign location of such conduct does not deprive the Hong Kong courts of jurisdiction because those acts form part of an agreed course of conduct, a “substantial measure” of which had taken place in Hong Kong, giving a sufficiently substantial link with Hong Kong to justify the assumption of criminal jurisdiction. 42. The argument is, with respect, untenable. The Hong Kong activities detailed by Lunn JA were those involving D1, D2 and Pang in exporting the drug from Hong Kong, completed long before the appellant came onto the scene. It is a misapplication of R v Libman to suggest that the test referring to “a substantial measure of the activities” of a conspiracy somehow assists the respondent’s case. As we seek to explain in the section which follows, the Libman test operates in a different analytical context. In any event, it can only operate in relation to activities in which the defendant was implicated. The defendant must be implicated in the activities, a “substantial measure” of which occurred within the local jurisdiction. The appellant was not so implicated in the export activities of D1 and D2 in Hong Kong. D.4 The effect of R v Libman 43. The Libman approach does not assist the respondent. There is no conflict between the dictum of La Forest J in Libman and either the general common law rule against extra-territorial jurisdiction or the statutory rule enacted by section 159A. The defendant in Libman operated a scheme for defrauding persons residing in the United States by making fraudulent sales pitches by telephone from a room in Toronto. Those who were victims of the fraud were persuaded to send money to Costa Rica and Panama to buy gold mining shares that were in fact worthless. The defendant would periodically travel to those countries to collect the profits and, on his return to Toronto, distributed to his telephone operatives their share of the same. He was charged with seven counts of fraud and one count of conspiracy to commit fraud. It was in that context that La Forest J noted that English authorities[40] considered it sufficient in cases of trans-national fraud for “a substantial measure of the activities constituting a crime [to] take place in England”. He concluded: “I might summarize my approach to the limits of territoriality in this way. As I see it, all that is necessary to make an offence subject to the jurisdiction of our courts is that a significant portion of the activities constituting that offence took place in Canada. As it is put by modern academics, it is sufficient that there be a ‘real and substantial link’ between an offence and this country, a test well known in public and private international law...”[41] 44. In the light of Mr McCoy’s submissions considered below,[42] it is worth emphasising that La Forest J favoured the assumption of jurisdiction where “a significant portion of the activities constituting [the relevant substantive] offence took place in Canada”. He was not concerned with matters which were not constituent elements of the offence. 45. His Honour was favouring Lord Woolf’s wider approach over the earlier “terminatory approach” in cases where the essential elements of a result crime occur partly within and partly outside the jurisdiction. The Libman decision has no application in a case like the present where the conspiracy involves the appellant’s criminal conduct occurring entirely outside Hong Kong. We comment in passing that while this Court noted, but expressed no view on, the terminatory approach controversy in B v The Commissioner of the Independent Commission against Corruption,[43] the wider approach derived from Smith (Wallace Duncan) (No 4),was, in our view correctly, preferred by Deputy High Court Judge Stuart-Moore in HKSAR v Chan Shing Kong,[44] and approved obiter by the Court of Appeal in HKSAR v Krieger.[45] 46. The Court of Appeal’s approach below also fails to derive any support from the Privy Council’s decision in Somchai Liangsiriptasert v Government of the United States of America.[46] In that case, undercover agents of the United States Drug Enforcement Agency entered into a purported conspiracy with the appellants in Thailand to export heroin supplied by the appellants from Bangkok to New York. Since drug offences were not extraditable as between Thailand and the United States, the appellants were lured to Hong Kong to obtain payment and were arrested here. In the extradition proceedings which followed, the Court was required to examine the justiciability under Hong Kong law of the offence of conspiracy to traffic in dangerous drugs, transposing Hong Kong for New York.[47] In other words, the appellants were notionally treated for the purposes of the extradition proceedings as having conspired in Thailand to cause the drugs to be exported to Hong Kong. 47. Somchai Liangsiriptasert therefore is about a conspiracy hatched abroad to import drugs into Hong Kong, the converse of the situation that we are concerned with. That is a crucial difference since the harm intended by the conspirators would occur in Hong Kong when the drugs were smuggled here, a situation calling for the courts to assume jurisdiction to protect Hong Kong society. 48. In the English jurisprudence, it had previously been held that a foreign conspiracy was indictable in England where it was wholly or partly performed in England, or where, viewed as a continuing offence, the conspiracy continued its existence in England.[48] The important question in Somchai Liangsiriptasert was whether a conspiracy hatched abroad and intended to be implemented in Hong Kong, was triable in Hong Kong before any overt act forming part of its implementation was done in Hong Kong. It was in that context that Libman and the Hong Kong Court of Appeal’s decision in AG v Yeung Sun-shun,[49] were cited with approval, the Privy Council holding that an un-executed conspiracy aimed at Hong Kong is indictable in Hong Kong.[50] Somchai Liangsiriptasert has no bearing on the issue under discussion. 49. Accordingly, with respect, the attempt by the Court of Appeal and the respondent to sustain jurisdiction in Hong Kong on the basis of R v Libman was erroneous. D.5 An extravagant submission by the respondent 50. At one stage, Mr McCoy advanced the startlingly extravagant argument that the Hong Kong courts have jurisdiction over a conspiracy which has as its object the commission of an offence, every essential element of which occurs abroad, so long as it is possible to point to some “real and substantial link” between that offence and Hong Kong. Counsel then proceeded to outline a series of “factors” which he suggested might provide such a link. Mr McCoy purported to cite R v Libman as authority but, as we have emphasised, R v Libman is concerned with favouring the wider approach over the terminatory approach to cases where essential elements of offences occur in different jurisdiction. It provides no support for Mr McCoy’s submission suggesting that jurisdiction can be established by reference to “factors” other than the constituent elements of the offence. It is a submission inconsistent with common law precedent of the highest authority[51] and inconsistent with section 159A(3). It is also at odds with the provisions of the CJO which demonstrate the need for express statutory provision to confer jurisdiction over a conspiracy to commit an extra-territorial offence on the basis of acts in Hong Kong which are not constituent elements of that offence.[52] When asked why, if his submission was correct, such provisions were needed, Mr McCoy was driven to submitting that the CJO was an otiose statutory confirmation of the position at common law. His submission was patently unsustainable. E. Conclusion 51. For the aforesaid reasons, the Court concluded that there was no valid basis upon which the appellant’s conviction as a party to the conspiracy charged could be sustained and that the appeal had to be allowed and his conviction quashed. The only justiciable conspiracy that could properly be envisaged by the indictment was one to export drugs. There was no evidential basis for concluding that the appellant was party to any contemplated or actual criminal activity until after the object of that conspiracy was fulfilled. Accordingly, there was, in our judgment, no case to answer, let alone a basis which could properly found a conviction upon the indictment. Ms Margaret Ng, Mr Kay Chan instructed by Alan Ho & Co., for the Appellant Mr Gerard McCoy SC, Mr. Martin Hui SADPP, Mr. Ivan Cheung PP of the Department of Justice for the Respondent. [1] HCCC 302/2010. [2] Contrary to section 4(1)(a) and (3) of the Dangerous Drugs Ordinance (Cap 134) and sections 159A and 159C of the Crimes Ordinance (Cap 200). [3] Cap 134. [4] Tang Kwok Wah, Dixon v HKSAR (2002) 5 HKCFAR 209 at §§18-25; Winnie Lo v HKSAR (2012) 15 HKCFAR 16 at §§114-117. [5] Court of Appeal §40. [6] Appearing for the respondent with Mr Martin Hui and Mr Ivan Cheung. [7] (1985) 21 DLR (4th) 174. [8] Section D.3 of these Reasons. [9] Court of Appeal §39. [10] [1991] 1 AC 225 at 244. [11] Board of Trade v Owen [1957] AC 602 at 634. [12] DPP v Stonehouse [1978] AC 55 at 77. See also Somchai Liangsiriprasert v Government of the United States of America [1991] 1 AC 225 at 244. [13] R v Treacy [1971] AC 537 at 561; DPP v Stonehouse [1978] AC 55 at 82-83. [14] Macleod v Attorney-General for New South Wales [1891] AC 455 at 458; DPP v Stonehouse [1978] AC 55 at 90. [15] Offences Against the Person Ordinance (Cap 212), sections 8B and 9; and see R (Purdy) v DPP [2010] 1 AC 345 at §9. Section 5 of the Ordinance makes express provision for liability where a conspiracy is hatched in Hong Kong to murder someone abroad: “All persons who within Hong Kong conspire, confederate, and agree to murder any person, whatever his nationality or citizenship and wherever he may be... shall be guilty of an offence and shall be liable to imprisonment for life.” [16] Cap 201. By section 4, any person “who, whether in Hong Kong or elsewhere” offers such an advantage without lawful authority or reasonable excuse commits the offence: see HKSAR v Krieger [2014] 3 HKLRD 404 at §§69-70. [17] Cap 461, concerning offences under the Theft Ordinance (Cap 210) and forgery-related offences under the Crimes Ordinance (Cap 200) together referred to as “Group A offences”, as well as conspiracy to defraud: sections 2(2) and 2(3). [18] Board of Trade v Owen [1957] AC 602 at 634; DPP v Stonehouse [1978] AC 55 at 77; R v Jamshid Hashemi Naini [1999] 2 Cr App R 398 at 416-417. [19] [1971] AC 537. [20] R v Treacy [1971] A.C. 537 at 562; DPP v Stonehouse [1978] AC 55 at 83, 90-91; Somchai Liangsiriprasert v Government of the United States of America [1991] 1 AC 225 at 245-247, approving (at 249) the decision of the Hong Kong Court of Appeal in Attorney General v Yeung Sun-shun [1987] HKLR 987. [21] [1999] 2 Cr App R 398 at 416-417. [22] [1998] 2 Cr App R 461. [23] (1968) 52 Cr App R 106. [24] [1983] QB 751. [25] (1864) 4 F & F 68. [26] [1991] 2 QB 120. [27] As Lord Wilberforce put it in R v Doot [1973] AC 807 at 817: “In the search for a principle, the requirement of territoriality does not, in itself, provide an answer. To many simple situations, where all relevant elements occur in this country, or, conversely, occur abroad, it may do so. But there are many ‘crimes’ (I use the word without prejudice at this stage) the elements of which cannot be so simply located. They may originate in one country, be continued in another, produce effects in a third. Some constituent fact, the posting or receipt of a letter, the firing of a shot, the falsification of a document, may take place in one country, the other necessary elements in another.” [28] [1963] 1 QB 8. [29] [1899] 1 QB 230. [30] [1978] AC 55 at 66-67, 74-75. [31] [1999] QB 980. [32] [2004] QB 1418. [33] [2010] 1 AC 345 at §23. [34] [2010] 1 WLR 2779. [35] In Section D.4 of these Reasons. [36] Cap 200, based on the English Criminal Law Act 1977, section 1. [37] (1985) 21 DLR (4th) 174 at 189; approved by the Privy Council in Liangsiriprasert v Government of the United States of America [1991] 1 AC 225 at 250. [38] Court of Appeal §14. [39] Court of Appeal §17. [40] Referring at 194-198 to (among other cases) Treacy v DPP [1971] AC 537 and R v Doot [1973] AC 807. [41] At p 200. [42] In Section D.5 of these Reasons. [43] (2010) 13 HKCFAR 1 at §18. [44] (Unreported) HCMA 258/2010 (26 July 2010) at §§24-28. [45] [2014] 3 HKLRD 404 at §§122 and 131-132. [46] [1991] 1 AC 225. [47] At p 241. [48] Reg v Doot [1973] AC 807. [49] [1987] HKLR 987. [50] At 250-251. [51] Referred to in Section D.1 of these Reasons. [52] CJO section 6(1) relevantly provides: “Subject to section 7(1), a person may be guilty of conspiracy to commit any Group A offence, or of conspiracy to defraud, if: (a) a party to the agreement constituting the conspiracy, or a party's agent, did anything in Hong Kong in relation to the agreement before its formation; ... (c) a party to it, or a party's agent, did or omitted anything in Hong Kong in pursuance of it, and the conspiracy would be triable in Hong Kong but for the offence or fraud which the parties to it had in view not being intended to take place in Hong Kong.” Section 4(2) states: “On a charge of conspiracy to commit a Group A offence, or conspiracy to defraud in Hong Kong, the defendant may be guilty of the offence whether or not - (a) he became a party to the conspiracy in Hong Kong; (b) any act or omission or other event in relation to the conspiracy occurred in Hong Kong.”
Mr Justice Fok PJ: Introduction 1. The appellant appeals against his conviction of the offence of taking employment while being a person remaining in Hong Kong without the authority of the Director of Immigration after having landed in Hong Kong unlawfully, contrary to sections 38AA(1)(a) and 38AA(2) of the Immigration Ordinance (Cap.115). 2. Leave to appeal was not opposed by the respondent and was granted by the Appeal Committee on the papers on the ground of substantial and grave injustice. As directed by the Appeal Committee when granting leave, the parties have filed a Joint Case pursuant to the procedure set out in Mok Kin Kau[1]and the Court has proceeded to deal with this appeal without an oral hearing. 3. In the Joint Case, both parties submit that the final appeal against conviction should be allowed. The concession of the appeal by the respondent is, however, not decisive and it remains a matter for the Court to determine whether or not the appeal should be allowed and, if so, on what basis.[2] The facts 4. The appellant was one of four men (D1 to D4 respectively) arrested on 14 August 2012 after they had been seen by police removing metal sheets from a tin shed in Tai Po. The four were prosecuted but, due to some indisposition on his part, the case of one of the other men (D4) was severed and he was tried after the other three. 5. In the first trial (of D1, D2 and D3) before the Magistrate,[3] the applicant was D3. On 12 October 2012, he and D1 were convicted of taking employment while being in Hong Kong without the authority of the Director of Immigration after having landed in Hong Kong unlawfully,[4] and D2 was convicted for taking employment while subject to a removal order.[5] 6. The prosecution evidence at trial was that PW1, a police witness, saw D1, D2, the appellant and a fourth man (i.e. D4) at the scene of an apparently derelict metal shed in She Shan Tsuen, Tai Po. PW1 saw the fourth man and the appellant removing metal sheets from the shed. D1 and D2 were seen taking the sheets to a stone hut. The four were observed to adopt this procedure three times. PW1 and another police witness saw the appellant hitting the metal sheets with a hammer and the fourth man used a crowbar to prise the metal sheets apart. The four men were kept under observation for about 8 minutes. When the police approached them the appellant, half naked, ran away from the scene and was intercepted about 100 metres away. 7. Each of the accused gave evidence. It was their defence that they were all there to look for a place to rent and were not working. The Magistrate rejected their defence and found that they were working and were employed. She accepted that there was no direct evidence of employment, since working at a place per se is not employment, but drew an inference[6] that they were employed.[7] 8. In the second trial (of D4), on 8 November 2012, a different Magistrate[8] acquitted D4 of the offence for which D1, D2 and the appellant were, on the same prosecution evidence, convicted. 9. D3 appealed his conviction to McWalters J,[9] who dismissed the appeal on 1 March 2013. McWalters J held that, given the observations of the police officers, the only reasonable inference that could be drawn from their evidence was that the appellant was engaged in employment.[10] 10. D1 and D2 appealed separately to Deputy High Court Judge Stuart-Moore,[11] who allowed their appeals and quashed their convictions on 4 July 2013. At the conclusion of his judgment, he suggested that the appellant should take the course of applying for leave to appeal to this Court on the ground of substantial and grave injustice. 11. Thereafter, D3 was granted legal aid on 2 August 2013. On 30 September 2013, on his application which was uncontested by the Department of Justice for the respondent, he was granted bail by Chan PJ. On 6 November 2013, by consent, it was ordered that the leave application be dealt with on the papers. 12. After the receipt of the parties’ written submissions, the Appeal Committee called for further submissions on the correctness of the respondent’s concession of the application for leave to appeal and its intended concession, if leave were granted, of the appeal itself. Having received further written submissions from the parties, the Appeal Committee was satisfied that the respondent’s intended concession of the leave application was appropriate and so, on 6 March 2014, made an order granting leave to appeal on the papers and directing the parties to file a joint printed case, indicating that the Court would thereafter proceed to determine the appeal without the need for an oral hearing and would hand down its judgment on the appeal in due course, as we now do by this judgment. The grounds of appeal 13. In the application for leave to appeal, the appellant contends that substantial and grave injustice has been done in that he remains convicted even though: (1) Three co-accused have either been acquitted or had their appeals against conviction allowed when the evidence against all accused was substantially the same; (2) The ultimate acquittal of the three co-accused and the conviction of the appellant amounted to inconsistent verdicts for which there was no rational explanation; (3) The appellant’s conviction was contrary to the constitutional and common law principle of equality that all persons in a similar position should be treated similarly; and (4) On the evidence, a tribunal of fact could not find beyond reasonable doubt that the appellant was employed, because the appellant might have been working for his own benefit at the material time. 14. Those contentions are repeated on the appellant’s behalf in the Joint Case[12] but, as will be seen, that is not the basis of the parties’ joint submission that the appeal should be allowed.[13] Inference appellant employed not properly drawn 15. The parties have indicated in the Joint Case that the respondent is prepared to concede the final appeal solely on the ground of insufficiency of evidence against the appellant to prove employment. They submit, relying on The Queen v Ip Po Fai,[14] that evidence of a person actually working at a place of employment would not necessarily support an irresistible inference of employment. They also submit, relying on Poon Chau Nam v Yim Siu Cheung[15] and HKSAR v Chow Kin Cheung,[16] that the mere fact a person is working for another does not necessarily mean there is a relationship of employment between the two. 16. The Magistrate who convicted D1, D2 and the appellant was satisfied an inference of employment could be drawn on the evidence before her. In dismissing the appellant’s Magistracy appeal, McWalters J was likewise satisfied this was the only reasonable inference that could be drawn. 17. On the other hand, the Magistrate who acquitted D4 did not think the sole and irresistible inference on the evidence was that he was employed. He considered the absence of evidence of the ownership of the metal shed could support an innocent explanation for D4’s presence and actions there, namely that the defendant was there on his own account to look for something. Furthermore, in his judgment on D1 and D2’s Magistracy appeals, Deputy High Court Judge Stuart-Moore observed that, whilst the prosecution case might possibly, and may even probably, have been well-founded, in neither situation would the standard of proof in a criminal trial have been achieved. He allowed the appeals since he was not sure what the facts established but, in any event, they fell short of proving employment: “… as the inference that D1 and D2 may have been doing something to benefit only themselves counterbalanced any inference that they were employed by someone to do the work of dismantling a disused and abandoned shed.”[17] 18. In the present case, the prosecution evidence merely established that the appellant and his co-accused were observed to be carrying out some form of manual work at the derelict metal shed. However, given the condition of the shed, this was not an obvious place of employment, like a restaurant, shop or construction site, and there was no evidence as to whom either the shed or the sheets of metal the appellant was assisting to dismantle belonged. Moreover, there was no evidence that the four men were doing that work for an employer rather than for themselves, nor of the degree of any control being exercised over them by any employer. There was no evidence of any payment for the work or the basis of any such remuneration. There was no evidence of who had provided the hammer and crowbar, if they were not brought by the appellant and his co-accused themselves. There was no evidence of any safety or other work-related equipment at the site. 19. In the circumstances, we accept the parties’ joint submission that the inference of employment was not the sole and irresistible inference to be drawn from the evidence. That being so, proof of the offence beyond reasonable doubt was not established and the appellant’s conviction constitutes a substantial and grave injustice. For that reason, the appellant’s appeal must be allowed and his conviction quashed. Unnecessary to consider other submissions in Joint Case 20. As noted above, the Joint Case contained submissions on behalf of the appellant based on the inconsistency of the verdicts and raising an argument based on the constitutional and common law principle of equality. In advancing those arguments, the appellant may have been encouraged by the remarks in the judgment of Deputy High Court Judge Stuart-Moore regarding the undesirability of separate proceedings for jointly charged defendants and the risk of inconsistent verdicts from split trials or appeals. 21. It is not necessary to deal with those other submissions in order to decide this appeal. However, nothing in this judgment should be taken to endorse the view that, if the evidence before a court is such that the tribunal of fact, properly directed as to the law, could conclude that the offence is proved to the requisite standard of proof, the mere fact that another tribunal of fact has acquitted a co-accused on the same evidence would necessarily lead to the conclusion that the convicted defendant’s conviction involved substantial and grave injustice. Disposition 22. The appellant’s appeal is accordingly allowed and his conviction quashed. 23. At the parties’ joint invitation, we make no order as to costs. Joint Written Submissions by: Mr William Tam DDPP, of the Department of Justice, for the Respondent Mr Phillip Ross, instructed by David Ravenscroft & Co., assigned by the Director of Legal Aid, for the Appellant [1] (2008) 11 HKCFAR 1 [2] See Shum Wan Foon v HKSAR, unrep., FACC 7/2013, judgment handed down on same date as this judgment, at §37(1) [3] STCC 3971/2012 before Ms Merinda Chow [4] Contrary to sections 38AA(1)(a) and 38AA(2) of the Immigration Ordinance (Cap.115) [5] Contrary to sections 38AA(1)(b) and 38AA(2) of the Immigration Ordinance (Cap.115) [6] See The Queen v Ip Po Fai, unrep., HCMA 1201/1995, 10 April 1996 at §6 [7] STCC 3971/2012, Statement of Findings at §§43-46 [8] STCC 4151/2012 before Mr David Cheung Chi-wai [9] In HCMA 745/2012 (1 March 2013) [10] HCMA 745/2012, 1 March 2013, at §10 [11] Also in HCMA 745/2012 (4 July 2013) [12] Joint Case §2 [13] Joint Case §§23 et seq. [14] unrep., HCMA 1201/1995, 10 April 1996 [15] (2007) 10 HKCFAR 156 [16] [2013] 1 HKC 246, applying (at §9) Poon Chau Nam v Yim Siu Cheung [17] HCMA 745/2012, 4 July 2013, §25
Chief Justice Ma: 1. I agree with the judgment of Lord Hoffmann NPJ. Mr Justice Chan PJ: 2. I agree with the judgment of Lord Hoffmann NPJ. Mr Justice Ribeiro PJ: 3. I agree with the judgment of Lord Hoffmann NPJ. Mr Justice Bokhary NPJ : 4. I agree with the judgment of Lord Hoffmann NPJ. Lord Hoffmann NPJ : 5. The plaintiff is the widow and administratrix of Lai Wing Kee (“Mr Lai”), who was killed in an industrial accident on 27 July 2004. He was engaged in helping a crane driver to lift a heavy forklift truck onto the back of a lorry. The truck was suspended from the crane hook by two chains when one of them snapped. Mr Lai was crushed under the weight of the falling truck. 6. There is no doubt that the method used to lift the truck onto the lorry was unsafe. First, the chains ought not to have been used to lift a heavy weight like the truck. They were intended only for lashing objects down to prevent them from moving. Secondly, the one which snapped had been improperly fastened. Thirdly, Mr Lai should not have had to guide and steady the dangling truck on his own. There should have been another person to help take the load. 7. Mr Lai was employed by the second defendant, Sam Woo Engineering Equipment Limited (“D2”). He was employed as a crane operator under a written contract of employment dated 15 September 2000, having been similarly employed under an oral agreement for the previous seven years. An employer owes a non-delegable common law duty to provide a safe system of work for his employees and a statutory duty to insure against liability for breach of that duty. There is no dispute that D2 was in breach of its duty to Mr Lai. That was sufficient to enable his widow’s claim to be paid in full. But D2, which was separately represented (no doubt at the instance of the insurers), has claimed that three other companies (not covered by the policy) are liable for the same damage and ought to contribute to the loss. 8. The three other companies are the first defendant Sam Woo Bore Pile Foundation Limited (“D1”), the third defendant Sam Woo Construction Limited (“D3”) and Sam Woo Ship Building Limited (“D4”). As their names suggest, they and D2 are associated companies. They have common directors and shareholders and appear to a large extent to have been operated as a single economic unit. D1 had no connection with the accident but paid the salaries of group employees, including Mr Lai. It filed Employer’s Returns to the Inland Revenue in which it described itself as Mr Lai’s employer. There were other documents such as wages reports in which he was similarly described. 9. The other two companies, D3 and D4, each had some involvement in the events which led to the accident. According to the evidence of Mr Lau Chun Kwok, who was a director of all four companies, D4 had been engaged to do maintenance dredging work on the Tuen Mun River and had subcontracted the work to D3. On the day of the accident, D3 urgently required a forklift truck for use on the site. D2 had one available but it needed a minor repair. Ordinarily D2 would have had it repaired and delivered it to D3, but its drivers were engaged elsewhere. It therefore requested D3 to collect the truck, take it to Tsing Yi workshop for repair and then to the site in Tuen Mun. D3 sent a crane lorry driven by its employee Mr Lam Siu Mo (“Mr Lam”) to the premises where the truck was kept and Mr Lai was working. Mr Wan Piu Yuen (“Mr Wan”), an employee of D4, was also at the premises and received a message from D3 that the truck would be collected. He passed this on to Mr Lai, asking him to assist Mr Lam in loading the truck. It was Mr Lai who attached the chains, which appear to have been part of the lorry’s equipment. 10. The Amended Statement of Claim alleged in various alternative formulations that Mr Lai was employed, either generally or “pro hac vice”, by each of the defendants and that each owed him a duty to provide a safe system of work. It also pleaded, among other things, “against [D2] and/or D4”, breaches of statutory duty under the Factories and Industrial Undertakings (Lifting Appliances and Lifting Gear) Regulations (“the Regulations”). These impose duties in relation to chains “used for raising or lowering or as a means of suspension”. 11. The judge (Yam J) found that although the crane lorry driven by Mr Lam belonged to D2, the chains probably belonged to D3. He also found that Mr Wan, an employee of D4, was the person who had ordered Mr Lai to help load the truck onto the lorry. Based on these findings and the evidence of the returns by D1 to the Inland Revenue, he found that Mr Lai had been at the relevant time an employee of D1 and D2 (as general employers) and of D4 (as employer pro hac vice). D3 was also liable because it had “provided the metal chains which are proven to be defective”. The judge did not specify whether D3 was liable for common law negligence or breach of statutory duty under the Regulations, although he did say in general terms that there had been breaches of statutory duty. 12. The Court of Appeal (Cheung CJHC, Tang VP and Cheung JA) affirmed the judge’s decision. Cheung JA, who gave a judgment with which the other members of the Court agreed, said that D1 was liable because the Inland Revenue returns were “extremely strong evidence” of an employment relationship. D3 was liable because the lorry was under the control of D3 and “in the absence of evidence to the contrary, the chains on the lorry must have been intended to be used for the lifting operations of the crane”. D3 “must have been negligent in allowing the deceased to make use of the defective chains”. D4 was liable because Mr Wan had “directed the deceased to assist in the loading operation”. Mr Wan was negligent because he “merely directed the deceased to assist Lam without telling them how the operation should be handled”. 13. In my opinion none of these conclusions was correct. First, the position of D1. I quite agree that, if there had been no other evidence, the Inland Revenue returns would have been extremely strong evidence of an employment relationship. But there was other evidence. There was a written contract of employment between Mr Lai and D2. On the basis of this evidence, it was accepted by all parties that Mr Lai was employed by D2. The natural conclusion is not that he was employed by D1 as well, but that the Inland Revenue returns were wrong. Given the way in which the group was run as a single economic entity, such a mistake is perhaps not so surprising. Neither the judge nor the Court of Appeal seems to have been willing to entertain this possibility. Even if it was not a mistake but done for some tax or accounting purpose, it could not have created an employment relationship between D1 and Mr Lai. Employment is a bilateral relationship and there is nothing to show that Mr Lai was party to these tax or accounting arrangements. But the judge and the Court of Appeal concluded that Mr Lai had been the servant of (at least) two masters. No doubt a person may be simultaneously employed by more than one employer in respect of different services, but I know of no case in which anyone has been held to have two independent employers in respect of the same services. 14. Next there is the liability of D3. That rests entirely upon the fact that the chains which were used were on the lorry and that the lorry had been used “for a while” by D3. One might have assumed that the chains came with the lorry, which was owned by D2. However the judge said that as D3 was controlling the lorry through its employee Mr Lam, it was “more likely than not” that the chains belonged to D3. It is extremely doubtful that there was any basis for such a finding. In any event, the evidence was that the chains were suitable for lashing objects to the lorry but not for lifting. I therefore find it difficult to see how Cheung JA could have concluded that they “must have been intended [by D3] to be used for the lifting operations”. Mr Lai was a skilled crane operator of many years experience. He should have been able to tell which kind of chain was suitable for a particular purpose. One cannot construe the mere fact that they were on the lorry as a representation by D3 that they were suitable for lifting a heavy forklift truck. And if they were not intended for use as lifting gear, there cannot have been a breach of the regulations either. 15. Finally, D4. The finding of the judge, upheld by the Court of Appeal, was that Mr Wan, by telling Mr Lai to help load the truck, constituted D4 his employer pro hac vice. This is a doctrine which operates in the following circumstances: where a person (A) is in the general employment of another person (B) but works under the control of a third person (C) who directs not merely what A is to do but how he should do it, then if A negligently causes injury to someone, C will be vicariously liable as A’s employer pro hac vice: Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Limited and Another [1947] AC 1, 10. This doctrine, however, applies only to vicarious liability for an employee’s negligence. As Kennedy LJ said in Nelhams v Sandells Maintenance Ltd and Another [1996] PIQR 52, 55: “…there is an important distinction to be drawn between cases where damage has been caused by an employee in the general employment of one employer who is working under the directions of a second employer and cases where it is the employee himself who sustains the damage”. Or as Diplock LJ said in Savory v Holland & Hannen & Cubitts (Southern) Ltd [1964] 1 WLR 1158, 1165, “the doctrine of master and servant pro hac vice today seems to me to be relevant only to a question of vicarious liability”. It has no application to the question of what duty is owed to the employee himself. For that purpose, the duty of anyone other than the actual employer is simply to take reasonable care in all the circumstances. 16. In the present case, D4 (through Mr Wan) is said to have been negligent in not supervising the work of loading the lorry. Mr Wan, on the other hand, said that working cranes was not within his field of expertise. He merely passed on the message that Mr Lai should help with the loading and went back to his office, leaving the experts to get on with it. That seems to me entirely reasonable. In my view there was nothing to impose upon D4 any duty in relation to the way the loading took place. 17. I would therefore allow the appeals of D1, D3 and D4, dismiss the claims against them and direct that the costs be dealt with on written submissions, as to which the parties should seek procedural directions from the Registrar. Chief Justice Ma: 18. For the above reasons, the appeals of the 1st, 3rd and 4th defendants are allowed, and the claims against them dismissed. Costs will be dealt with as stated in para 17 above. Mr Russell Coleman SC and Ms Queenie WS Ng, instructed by Gilbert Tang & Co, for the 1st, 3rd and 4th defendants (appellants) Mr Andy Hung, instructed by Pansy Leung Tang & Chua, for the plaintiff (1st respondent) Ms Alice Mok SC and Mr Lee Tung Ming, instructed by Deacons, for the 2nd defendant (2nd respondent)
Chief Justice Ma: 1. For the reasons which are contained in the judgments of Mr Justice Ribeiro PJ and Lord Clarke of Stone-cum-Ebony NPJ, I agree that the appeal of the 1st appellant be dismissed and that the appeal of the 2nd appellant be allowed. I would also like to express the Court’s gratitude to all counsel for their submissions. Mr Justice Chan PJ: 2. I agree with the judgments of Mr Justice Ribeiro PJ and Lord Clarke of Stone-cum-Ebony NPJ. Mr Justice Ribeiro PJ: 3. On 22 March 2008, the “YAO HAI” (“YH”), a Chinese flagged bulk carrier, collided with the “NEFTEGAZ 67” (“N67”), a Ukrainian flagged oil rig supply vessel, in a buoyed channel running between the north coast of Lantau Island and the coast near Castle Peak in the New Territories. N67 sank with the tragic loss of 18 of her 25 crew members. YH suffered damage but none of her crew were lost or injured. 4. The collision led to the prosecution of N67’s master, Mr Yuriy Kulemesin (“the 1st appellant”); YH’s master, Mr Liu Bo; the senior pilot who was navigating YH at the time, Mr Tang Dock Wah (“the 2nd appellant”); and the junior pilot assisting him, Mr Bruce Chun Wah Tak. They were named as the 1st to 4th defendants respectively and each was charged with endangering the safety of others in contravention of section 72 of the Shipping and Port Control Ordinance (“SPCO”). 5. The trial took place over some 91 hearing days in the District Court before HH Judge S D’Almada Remedios and resulted in the conviction of all four defendants. However, the Court of Appeal quashed the convictions of YH’s master and the junior pilot. They reduced the 1st appellant’s sentence of imprisonment for 3 years and 2 months to a sentence of imprisonment for 18 months. They also reduced the 2nd appellant’s 3 year sentence so as to permit his immediate release. The present appeal is brought by the 1st and 2nd appellants against their respective convictions. A. The scope of this judgment 6. This appeal concerns eight questions of law certified as being questions of great and general importance. The present judgment addresses the first of those questions, certified by the Court of Appeal in the following terms: “What is the mens rea of the offence created by section 72 of the Shipping and Port Control Ordinance, Cap 313; in particular, is it incumbent upon the prosecution to prove that the accused either intended to endanger or caused endangerment or was reckless as to whether endangerment was caused?” 7. The other seven questions raise issues which bear on the appellants’ challenges regarding the actus reus elements of the section 72 offence, namely as to whether it ought properly to have been found that by their conduct they caused the endangerment of the safety of others. Those questions are dealt with in the judgment of Lord Clarke of Stone-cum-Ebony NPJ, which I have had the benefit of reading in draft and with which I respectfully agree. I gratefully adopt the account and analysis of the facts it contains. 8. This judgment also deals with the 1st appellant’s application for leave to raise two matters on the “substantial and grave injustice” ground under section 32 of the Court’s statute.[1] B. SPCO section 72 9. Section 72, under which the appellants were convicted, provides as follows: “Any person who by any unlawful act, or in any manner whatsoever without reasonable excuse, endangers or causes to be endangered the safety of any person conveyed in or being in or upon any vessel or in the sea commits an offence and is liable- (a) on conviction on indictment to a fine of $200,000 and to imprisonment for 4 years; and (b) on summary conviction to a fine of $200,000 and to imprisonment for 2 years.” 10. The approach of the courts below has been to treat section 72 as creating an offence having two forms: (i) one under the “unlawful act limb” covering cases where the accused performs an unlawful act and thereby endangers the safety of others; and (ii) the other under the second limb where the endangerment is caused by the defendant “in any manner whatsoever without reasonable excuse”. That approach was challenged by Mr Gerard McCoy SC[2] who sought to argue that the Court should relocate the comma after the words “unlawful act” in its construction of the section. For reasons given later in this judgment,[3] I reject that argument. 11. After amending the original charges, the case brought against the 1st and 2nd appellants proceeded under both limbs in the alternative. The Judge eventually convicted the 1st appellant under both limbs, but found the 2nd appellant guilty only under the unlawful act limb.[4] 12. Under the unlawful act limb, the prosecution alleges that the 1st and 2nd appellants were guilty of unlawful acts which consisted of offences under section 10(3) of SPCO which provides as follows: “If any of the collision regulations is contravened by a vessel, the owner of the vessel, the master and any person for the time being responsible for the conduct of the vessel shall each be guilty of an offence and liable to a fine of $20,000.” 13. The unlawful act relied on for section 72 purposes was therefore breach of section 10(3) which in turn requires proof of contravention by a vessel of the collision regulations. Those regulations are the International Regulations for Preventing Collisions at Sea 1972 (often referred to as “COLREGS”), the current edition of such regulations issued pursuant to a series of international conferences convened by the International Maritime Organization. The collision regulations are well known to mariners all over the world and by their own terms, apply to all vessels upon the high seas and in all navigable waters connected therewith. They establish internationally recognized rules for the navigation of vessels aimed at preventing maritime collisions. 14. By section 10(1)(b) of SPCO, those rules are made applicable to all vessels within the waters of Hong Kong. And, as we have just seen, if any such vessel contravenes one of the collision regulations, her owner, the master and any person for the time being responsible for her conduct are individually made guilty of an offence under Hong Kong law under section 10(3). That, however, is subject to the defence provided under section 10(4) which states: “It shall be a defence to a charge under subsection (3) for the person charged to prove that he took all reasonable precautions to prevent the contravention to which the charge relates.” C. The collision regulations relied on by the prosecution 15. The contraventions of COLREGS relied on by the prosecution as constituting unlawful acts under section 72 are breaches of rules 5 and 8 in both cases and additionally of rule 9 in the 1st appellant’s case. Those rules relevantly provide as follows: Rule 5: Look-out Every vessel shall at all times maintain a proper look-out by sight and hearing as well as by all available means appropriate in the prevailing circumstances and conditions so as to make a full appraisal of the situation and of the risk of collision. Rule 8: Action to avoid collision (a) Any action to avoid collision shall, if the circumstances of the case admit, be positive, made in ample time and with due regard to the observance of good seamanship. (b) Any alteration of course and/or speed to avoid collision shall, if the circumstances of the case admit, be large enough to be readily apparent to another vessel observing visually or by radar; a succession of small alterations of course and/or speed should be avoided. (c) If there is sufficient sea-room, alteration of course alone may be the most effective action to avoid a close-quarters situation provided that it is made in good time, is substantial and does not result in another close-quarters situation. (d) Action taken to avoid collision with another vessel shall be such as to result in passing at a safe distance. The effectiveness of the action shall be carefully checked until the other vessel is finally past and clear. ... (f)(i) A vessel which, by any of these Rules, is required not to impede the passage or safe passage of another vessel shall, when required by the circumstances of the case, take early action to allow sufficient sea-room for the safe passage of the other vessel. (f)(iii) A vessel the passage of which is not to be impeded remains fully obliged to comply with the Rules of this part when the two vessels are approaching one another so as to involve risk of collision. Rule 9: Narrow channels (a) A vessel proceeding along the course of a narrow channel or fairway shall keep as near to the outer limit of the channel or fairway which lies on her starboard side as is safe and practicable.” D. The charges 16. Originally, the charges laid against the appellants proceeded solely under the second limb of section 72. It was in the context of the charges so framed that at an early stage of the trial, the defendants mounted an unsuccessful constitutional challenge to the validity of section 72.[5] The prosecution thereafter obtained leave to amend the charges. 17. In the amended charges[6] brought under the unlawful act limb, the 1st and 2nd appellants were each charged with endangering or causing to be endangered the safety of the crew of N67 in that being master of that vessel and pilot navigating YH respectively, they each were guilty of unlawful acts consisting of contraventions of COLREGS.[7] Those contraventions were particularised as involving breaches of rules 5 and 8 in respect of both of the appellants and additionally breach of rule 9 in the 1st appellant’s case. 18. The rule 5 particulars alleged that each of the appellants had failed to maintain a proper look-out by sight and hearing as well as by radar so as to make a full appraisal of the situation and of the risk of collision between the two vessels. 19. In relation to rule 8, the appellants were each alleged to have failed to take positive action in ample time and with due regard to the observance of good seamanship; failed to make an alteration of course and/or speed large enough to be readily apparent to the other vessel; failed to make a substantial alteration of course in good time to avoid a close-quarters situation; and failed to take action such as to result in passing the other vessel at a safe distance.[8] 20. The rule 8 particulars went on to allege that “if and insofar as” each vessel had a duty not to impede the other, the respective appellants had failed to take early action to allow sufficient sea-room for the safe passage of the other vessel.[9] And “if and insofar as” each vessel was not to be impeded by the other, each appellant had breached rules 5 and 8 for avoiding a risk of collision in approaching the other vessel.[10] 21. The particulars of breach of rule 9 stated that “when proceeding along the course of a narrow channel or fairway in the Western approaches as defined by buoys CP5, CP3 and CP1 on the northern side and by buoys CP4, CP2 and the intervening prohibited area on the southern side, alternatively the 15 metre depth line on each side”, the 1st appellant failed to keep as near to the outer limit of the channel or fairway on the starboard side of N67 as was safe and practicable. 22. The alternative charges under the second limb of section 72 alleged that each appellant had failed to maintain a proper look-out by sight and hearing as well as by radar so as to make a full appraisal of the situation and of the risk of collision with the other vessel; and failed to take adequate positive or preventive action so as to avoid a collision with the other vessel. E. Section 72 treated as an offence of strict or absolute liability E.1 The Judge’s approach 23. The Judge recorded that the charges were laid against each appellant under both limbs of section 72 in the alternative and noted that while the unlawful act limb rested on alleged breaches of COLREGS, the charge under the second limb was founded on the same impugned conduct, not described as unlawful acts, but raising similar issues.[11] 24. As to defences, her Honour stated: “...the defence on the unlawful act part of the charge is that as laid down in section 10(4) of SPCO Cap 313 ‘that the defendant took all reasonable precautions to prevent the contravention of the unlawful act.’ The defence of ‘without reasonable excuse’ is as laid down in s 72 SPCO for the limb of in any manner whatsoever.”[12] 25. Section 10(4) is of course a defence to a section 10(3) charge and not to a section 72 charge. However, what the Judge must have meant was that where, as in the present case, a defendant is charged on the basis of having committed an unlawful act consisting of an offence under section 10(3), successful reliance on section 10(4) deprives the prosecution of the unlawful act it needs to secure a conviction under section 72. 26. The centrally important feature of the Judge’s approach to section 72 is that she regarded it as unnecessary for any mental state on the defendant’s part to be established in relation to the consequences of his conduct involving endangerment to the safety of others. In other words, she regarded the offence as one of absolute liability so far as the consequence of endangerment was concerned. 27. The Judge made this clear in her ruling rejecting the defendants’ constitutional challenge to section 72 mentioned above. Her Honour stated that in her interpretation of the section, “no specific mens rea” was required.[13] 28. This is reflected in the Judge’s formulation of the legal issues in the Reasons for Verdict. Under the unlawful act limb, the questions framed begin by asking whether the defendants breached the relevant COLREGS; then whether such breaches caused the endangerment of the N67’s crew’s safety; going on immediately to ask whether the defence of having taken all reasonable precautions to prevent such contravention succeeds or whether it has been negative by the prosecution.[14] There is no mention of any requirement for the accused to have intended or been reckless or to have had a mental state of any description regarding the dangerous consequences of his conduct. 29. Similarly, under the second limb, the issues framed were whether the appellants had failed to keep a proper lookout or to take adequate collision avoidance action; whether such conduct had caused endangerment to the safety of N67’s crew and if so, whether the prosecution had negatived any possible reasonable excuse.[15] Liability was therefore seen as established by proving conduct (which did not have to be unlawful) which actually caused endangerment of safety, coupled with the absence of reasonable excuse without any mental state having to be proved in relation to the consequence of endangerment. 30. In finding the 1st appellant guilty, having earlier rejected his proffered excuses, the Judge simply found beyond all reasonable doubt that he “had breached Rules 5, 8 and 9 and that he endangered the safety of his own crew on N67.”[16] Similarly, she found that the 2nd appellant “had breached rule 5 and 8 and endangered the safety of the crew of N67” adding that he “did not take reasonable precautions to prevent the contravention and did not have a reasonable excuse for his failure in doing so.”[17] She did not consider it necessary to make any findings in either case as to the appellant’s state of mind regarding endangerment of safety. 31. The Judge considered the strictness of the offence as interpreted by her to be mitigated by the existence of the statutory defences, stating: “I do not accept, however, that the present offence punishes the morally blameless. The defence can raise a reasonable excuse, and the prosecution have to negative that excuse.”[18] E.2 The Court of Appeal’s approach 32. Having considered two amendments to section 72 made in 1979[19] by which the offence was made indictable and made to carry much increased penalties, the Court of Appeal posed the question: “Did the Legislative Council intend that the offence should provide for a conviction on indictment, subject to those increased penalties, without the ingredient of full mens rea, in the sense of requiring proof that the accused intended or was being reckless as to endangerment.”[20] 33. After discussion (to which I shall return), the Court of Appeal pronounced itself “satisfied that by the increased penalties available on conviction on indictment the Legislative Council did not intend to imbue section 72 with a general requirement of full mens rea” and that the Judge had correctly identified the ingredients of the offence.[21] 34. It held that: “The offence contrary to section 72 of the Shipping and Port Control Ordinance does not include as an ingredient proof of conduct that is ‘reckless’, ‘negligent’ or ‘grossly negligent’. What is required, is proof that the defendant’s conduct ‘endangers or causes to be endangered’ the safety of persons on a vessel or in the sea (although as prerequisite, that the conduct is an unlawful act, or is conduct for which there is no reasonable excuse).”[22] 35. Like the Judge, the Court of Appeal took comfort from the existence of the two defences mentioned above: “A defendant facing a charge under either limb of section 72 is afforded a considerable measure of protection. As noted earlier, proof of the alleged unlawful act requires proof of the underlying crime. Conduct alleged to be an ‘unlawful act’ because it is in breach of the Prevention of Collisions Regulations and thereby contrary to section 10(3) is subject to the availability of the defence provided by section 10(4), namely that the defendant took ‘all reasonable precautions to prevent the contravention charged’. Similarly, a charge that alleges an offence on the alternative basis, namely other than by an unlawful act, affords the defendant the ‘reasonable excuse’ defence provided in section 72.”[23] E.3 Absolute liability 36. The approach adopted in the courts below therefore meant that they regarded section 72 as an offence of absolute liability with regard to the element of endangerment. They held: (a) that in an unlawful act case, breach of any of the collision regulations constituting an offence under section 10(3) (where section 10(4) does not avail the accused) which in fact results in endangerment of someone’s safety at sea makes the defendant guilty of an offence under section 72, without any need to inquire into his state of mind regarding the risks involved; and (b) that in a case prosecuted under the second limb, it is unnecessary to prove any unlawful act nor to examine the defendant’s mental state accompanying his impugned conduct, leaving it to the defendant to prove that he acted with a reasonable excuse or at least to discharge an evidential burden raising the issue of reasonable excuse. F. Hin Lin Yee and the presumption of mens rea 37. It is striking that both judgments below fail to mention the presumption of mens rea when construing section 72. The omission is particularly puzzling in the case of the Court of Appeal since we were told that it was addressed on that presumption in the light of this Court’s decision in Hin Lin Yee v HKSAR, [24] which discusses in detail how the presumption operates and how the mental requirements of statutory offences should be ascertained. 38. As pointed out in that judgment, where the offence-creating provisions are silent or ambiguous as to the mental requirements, the starting-point is that the statute must be construed adopting the presumption that it is incumbent on the prosecution to prove mens rea in relation to each element of the offence.[25] In other words, the court presumes that the prosecution must prove that the accused possessed the state of mind appropriate to each external element of the offence. Thus, if a specified circumstance is required to accompany the defendant’s act or omission as a prescribed ingredient of the offence, the presumption is that the prosecution must prove that the defendant knew of or was reckless as to the existence of that circumstance. And if it is a necessary element of the offence that the impugned conduct causes certain prohibited consequences, it is presumed that the prosecution must prove that when acting or omitting to act, the defendant intended to cause or was reckless as to his causing those consequences.[26] 39. In Hin Lin Yee, the offence charged was selling a drug intended for use by man but unfit for that purpose, so the presumption of mens rea was there directed at the circumstance that the drug sold was unfit for human use. In the present appeal, section 72 requires the unlawful act or other impugned conduct of each appellant to cause danger to the safety of others, and it is to that consequence of endangerment that the presumption of mens rea is directed. 40. If the Hin Lin Yee approach had been adopted, the courts below would have proceeded to consider whether the presumption had been displaced as a matter of statutory construction. They would have engaged in an examination of the language and purpose of section 72 and matters including the nature and seriousness of the offence; its attendant penalties and social or professional stigma; the utility of imposing sanctions; and the prevailing societal conditions, in so far as relevant.[27] They would also have considered what alternative legal regime governing the mental requirements might take the place of mens rea if the presumption were to be supplanted.[28] 41. In Hin Lin Yee, a survey of the case-law of England and Wales, Australia, New Zealand and Canada indicated that in construing statutory offences which are silent or ambiguous as to the mental requirements regarding the circumstances accompanying the defendant’s acts or omissions, five alternative regimes are possible: (a) first, that the mens rea presumption persists and the prosecution must prove knowledge, intention or recklessness; (b) second, that the prosecution need not set out to prove mens rea, but if there is evidence capable of raising a reasonable doubt that the defendant may have acted or omitted to act in the honest and reasonable belief that the circumstances of his conduct were such that, if true, liability would not attach, he must be acquitted unless the prosecution proves beyond reasonable doubt the absence of such exculpatory belief or that there were no reasonable grounds for such belief; (c) third, that the presumption has been displaced so that the prosecution need not prove mens rea but that the accused has a good defence if he can prove on the balance of probabilities that he acted or omitted to act in the honest and reasonable belief that the circumstances of his conduct were such that, if true, he would not be guilty of the offence; (d) fourth, that the presumption has been displaced and that the accused is confined to relying on the statutory defences expressly provided for, the existence of such defences being inconsistent with the second and third alternatives mentioned above; and (e) fifth, that the presumption is displaced and the offence is one of absolute liability so that the prosecution succeeds if the prohibited act or omission is proved against the accused, regardless of his state of mind regarding the relevant elements of the offence in question. 42. As the alternatives so formulated refer to the circumstances surrounding the prohibited conduct, they will require a degree of modification to address additionally the mental requirements relating to the consequences of the prohibited conduct, as discussed below.[29] G. The basis of the decisions below 43. In concluding that section 72 imposes no mens rea requirement regarding the consequence of endangerment, the courts below did not begin with the presumption of mens rea and then identify the basis for its displacement. Nor did they give any consideration to whether an alternative to absolute liability – a “halfway house” requirement – should replace a supplanted mens rea requirement. Since the Judge’s decision pre-dates Hin Lin Yee, it is perfectly understandable that it does not discuss any “halfway house”. But although Hin Lin Yee was available to the Court of Appeal it nevertheless appears to have assumed that rejection of a full mens rea requirement automatically results in absolute liability. On what basis then did the courts below arrive at their conclusion in favour of absolute liability? G.1 The decision in Chow Tin Shing 44. The Judge appears mainly to have based her conclusion on the Court of Appeal’s decision in HKSAR v Chow Tin Shing,[30] which she thought[31] provided helpful general guidance to section 72. She cited in particular the following passages from the judgment of McMahon J: “13. But the breach of a Regulation does not automatically result in the safety of any person being endangered. There must be created, by the act particularised in the charge, a situation which is dangerous. What is required by section 72 is that the act of a defendant, either itself or by the circumstances it then creates, endangers or causes to be endangered the safety of others. That is purely a question of fact. 14. Whether or not a Regulation is breached by that same act may be neither here nor there. The safety of another may be endangered where no Regulation is breached and conversely a Regulation may be breached without causing any such danger though in very many cases the breach of a Regulation will create a source of danger to others.” 45. When making her constitutionality ruling,[32] her Honour also cited paragraphs 35 and 36 in Chow Tin Shing,stating that the Court of Appeal there: “...recognised that the section 72 covered acts of endangerment which were deliberately reckless and acts where there was no deliberate dangerous manoeuvres. It was accepted in Chow that there was no intention to endanger the safety of others, because the defendant was unaware that the fishing vessel was there. So there was no intention to cause danger.” This led her to conclude, as we have seen, that “no specific mens rea” was required. 46. With respect, those passages from Chow Tin Shing were taken out of context and that decision provides no guidance as to the mental requirements of section 72. 47. The defendant in Chow Tin Shing was the master of a motorised oil barge who faced two charges under section 72 relating to two different incidents arising out of his navigation in a fairway leading to Lei Yu Mun. Paragraphs 13 and 14 relied on by the Judge concerned the allegation that defendant had breached rules 9 and 14 of COLREGS in that, when on a nearly reciprocal course with an oncoming tug, he had failed to keep to the starboard side of the fairway and had effected a starboard to starboard passing with the vessels about 30 metres apart. 48. What McMahon J was saying in the paragraphs cited was that it was insufficient merely to allege breaches of the two COLREGS rules and that it was necessary to go on to prove that the defendant’s conduct had actually caused endangerment to the safety of the tug’s crew.[33] He pointed out that passing on the wrong side relatively close to the tug “does not necessarily of itself result in” the necessary endangerment[34]and quashed the conviction on that charge, holding that the evidence did not prove such endangerment to the requisite standard.[35] The paragraphs cited therefore do not address the question of mens rea at all. They point simply to the deficiency in the prosecution’s case on the question of causation. 49. Neither do paragraphs 35 and 36 of Chow Tin Shing throw any light on the question under discussion. The Court of Appeal was there dealing solely with the appropriate sentence in relation to the second incident which involved the defendant’s barge running down a small stationary fishing boat resulting in the death of a person on board. The Court of Appeal was therefore not seeking to explore the ingredients of section 72 since liability was at that stage assumed. It was, for sentencing purposes, comparing the culpability of the defendant to that of human traffickers involved in high speed chases in Hong Kong waters involving police launches and pointing out that in those cases, “the acts of endangerment were deliberately reckless and of great risk to the safety of the passengers in the sampans and to a lesser extent to the crew of the pursuing police launches”. In contrast: “The applicant performed no deliberately dangerous manoeuvres. He proceeded at the barge's maximum speed, but at a speed well within the limit for the fairway. It is true he had elected to proceed on the wrong side of the fairway and in the vicinity of possible inshore traffic in circumstances where he knew his forward vision was reduced and that the applicant's act brought about a person's death. But it was not a situation where the applicant in a calculated way risked the lives and safety of others such as was so in the above cited cases.”[36] 50. Thus, McMahon J assessed the defendant’s culpability with reference to what the defendant knew and the extent to which his conduct had been calculated or deliberate, his sentence being reduced[37]accordingly. G.2 An offence with two limbs 51. Before continuing with this examination of the basis for the decisions below, it is convenient at this point to return to Mr McCoy SC’s challenge to construing section 72 as having two limbs, an argument which I have rejected. That section relevantly provides: “Any person who by any unlawful act, or in any manner whatsoever without reasonable excuse, endangers or causes to be endangered the safety of any person conveyed in or being in or upon any vessel or in the sea commits an offence...” 52. It creates an offence with three actus reus elements: (i) prohibited conduct, (ii) causation and (iii) endangerment of safety of persons at sea. The conduct in question may either consist of an unlawful act or an act coming within the words “any manner whatsoever without reasonable excuse” in the second limb. It therefore has two alternative limbs so far as the prohibited conduct is concerned and, on its face, the defence of reasonable excuse only applies where the charge is laid under the second limb. 53. The object of Mr McCoy’s contention was to make that defence equally available where a defendant is charged under the unlawful act limb. To that end, he invited the Court to move the comma which separates the two limbs forward by four words so that section 72 would read: “Any person who(,) by any unlawful act or in any manner whatsoever without reasonable excuse” etc. In support, he points to the suggested punctuation having been adopted in section 72A.[38] 54. I can see no basis for re-arranging section 72’s punctuation. A remedial construction of a statute may be called for where, by some obvious clerical error, the provision is rendered incoherent or absurd, but no such complaint can be made in respect of section 72. On the contrary, it is perfectly plausible to conclude that the legislative intent was to condition liability on two alternative forms of conduct, one involving an unlawful act which, given the unlawfulness, did not admit of a reasonable excuse defence; and the other involving conduct which, while dangerous, was not itself unlawful and thus meriting a reasonable excuse defence. It is nothing to the point that the desired pattern of punctuation can be found in a different section which has different subject-matter and does not presently call for interpretation.[39] G.3 The earlier amendments to section 72 55. It is against this background, namely, that section 72 requires proof of the three actus reus elements of prohibited conduct, causation and endangerment; and that it has two limbs involving alternative forms of prohibited conduct with reasonable excuse as a defence only in respect of the second limb; that the next ground relied on below[40] in support of absolute liability should be approached. 56. That ground concerns the earlier amendments to section 72. The predecessor to the present section first entered our statute book in 1949,[41] stating: “Every person who, by any unlawful act, or by any wilful omission or neglect, endangers or causes to be endangered the safety of any person conveyed or being in or upon any vessel, or aids or assists therein, shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding one thousand dollars, or to both such imprisonment and such fine.” 57. The present version of section 72, enacted in January 1979, makes it triable as an indictable offence with a maximum fine of $200,000 and imprisonment for up to 4 years, a ten-fold and eight-fold increase in the respective penalties. 58. While the Court of Appeal acknowledged these changes and evidently thought that they did not stand in the way of its conclusion in favour of absolute liability, it is unclear what effect they attributed to those changes.[42] 59. Certainly, the amendment which made the offence much more serious by making it indictable and punishable by significantly increased penalties militates against treating the offence as one involving absolute liability. As was pointed out in Hin Lin Yee,[43] while exceptions exist, the more serious the offence in terms of penalty and social obloquy, the less likely it is that the presumption of mens rea will be held to have been supplanted. 60. The second aspect of the amendment concerned replacing the limb involving the defendant’s endangerment of safety “by any wilful omission or neglect” with the present second limb which founds liability on endangerment “in any manner whatsoever without reasonable excuse”. That change was given weight by the Judge apparently as a matter in support of absolute liability. In her ruling,[44] she held that deletion of the requirement of wilfulness signifies the absence of any requirement to show an intention to cause danger. In holding that the Judge had correctly identified the ingredients of the offence,[45]the Court of Appeal may be taken to have agreed. 61. With respect, I do not agree that the changes provide any support for absolute liability in relation to the element of endangerment. 62. It is true that by virtue of the amendment, in cases where the prosecution relies on some omission or neglect as the prohibited conduct, it no longer has to show that such omission or neglect was “wilful” – ie, that the defendant knew he was under a duty to act but deliberately failed to do so. As the Court of Appeal pointed out, “conduct, by commission or omission, not amounting to an unlawful act would fall within that phrase, for example, the circumstances of mere negligence”.[46] 63. However, that change does not touch on the requirement of endangerment. As noted above, section 72 has three actus reus requirements: prohibited conduct, causation and endangerment. The amendment affected only the first of these and the statute remains silent as to the state of mind required regarding the consequence of endangerment caused by the prohibited conduct. As noted above,[47] an unrebutted presumption of mens rea makes it incumbent on the prosecution to prove mens rea in relation to each element of the offence. It follows that while the 1979 amendment appears to have removed the need to show wilfulness in respect of the first (conduct) element of the offence in cases under the second limb, it left the presumption regarding the third (endangerment) element untouched. G.4 Analogies with other offences 64. The Court of Appeal sought guidance from English case-law on other offences, notably unlawful act manslaughter and endangering the safety of persons carried on the railway, contrary to section 34 of the Offences Against the Person Act 1861 (“section 34”).[48] 65. It held that, as in manslaughter cases, the requirement of an unlawful act does not of itself import mens rea into section 72.[49] I respectfully agree. 66. More problematical is the Court of Appeal’s extrapolation from the decisions in two English cases on section 34 to hold that under section 72: “Proof is required that the conduct impugned in (i) or (ii) endangers or causes to be endangered the safety of any person conveyed or being in or on any vessel. No proof is required that the defendant intended to endanger or cause to be endangered the safety of those persons.”[50] 67. It relied first on R v Bowray,[51]an 1846 case in which the accused was standing on a bridge over a railway line and dropped or cast a stone on a passing train. He was convicted on a finding that he had deliberately cast the stone, Alderson B directing the jury that it was unnecessary to prove that he had thereby intended to endanger anyone’s safety. That decision was approved in R v Pearce,[52] a decision in 1966, where the defendants disabled railway signals by stealing copper wire from the signal boxes. Widgery J apparently held that it was only necessary to prove that by their intentional unlawful act of larceny, the defendants had created a source of danger to persons travelling on trains, no mention being made of any mens rea requirement in respect of such endangerment. 68. I do not accept that such extrapolation can safely be made. (a) The potential for endangering people on trains which run on tracks easily accessible to the likes of Bowray and Pearce is likely to be far greater than the potential risks of endangerment to the safety of persons at sea. The policy of strictness adopted in relation to section 34 may well not be justified in respect of section 72. (b) Under section 34, the courts have held that the required unlawful act must be deliberate and the section specifies that any omission must be wilful. But, as we have seen, the threshold requirements of section 72 are significantly less demanding. Under the second limb (which the prosecution can elect to charge instead of alleging an unlawful act), there is no requirement of any unlawfulness at all. If the section 34 approach is adopted, it would mean that the prosecution would only need to prove conduct by act or omission which in fact endangered the safety of others at sea, leaving it to the defendant to raise a defence of reasonable excuse. (c) On the facts of Bowray and Pearce, the consequence of endangerment to persons travelling on trains was obvious and inherent in the conduct of each accused. It is therefore perhaps unsurprising that the English courts did not think it necessary to spell out any further requirement of intention regarding such dangerous consequences. This would especially be so if in Pearce the court had been influenced by the rule laid down in DPP v Smith,[53] that a man must be taken to intend the natural and probable consequences of his act, applicable prior to the Criminal Justice Act 1967.[54] 69. I therefore do not accept that analogies drawn with unlawful act manslaughter and section 34 are capable of providing a sufficient basis for displacing the presumption of mens rea. G.5 The availability of the statutory defences 70. As we have seen, both courts below considered the existence of the two statutory defences some justification for holding that no mens rea requirement attaches to the consequence of endangerment. To what extent are they capable of displacing the presumption of mens rea? G.5a The defence under section 10(4) 71. As we have seen in Section B above, the unlawful act relied on by the prosecution against both appellants is breach of section 10(3)[55] based upon alleged breaches of rules 5 and 8, and in the case of the 1st appellant, also of rule 9 of COLREGS, an offence subject to the section 10(4) defence that the accused took all reasonable precautions to prevent such contraventions.[56] In my view, the presumption of mens rea is plainly not dislodged by the existence of that defence. 72. In the first place, liability under the unlawful act limb may be constituted by unlawful acts other than breaches of COLREGS, so that the “reasonable precautions” defence is by no means always available as a qualification to liability under section 72. The existence of that defence in relation to charges under section 10(3) therefore does not justify any broader conclusion as to the mental requirements of the section 72 offence and especially does not warrant the conclusion that it dispenses with mens rea. 73. Secondly, for the same reason as that given in Section G.3 above, the existence of the section 10(4) defence cannot displace the presumption of mens rea in relation to the requirement of endangerment. It is a defence that operates to negative an essential actus reus element in section 72 concerning the conduct of the accused where the unlawful act charged is breach of section 10(3). It does not touch on the third actus reus element of endangerment and so cannot dislodge the presumption in respect thereof. G.5b The reasonable excuse defence 74. In my view, the reasonable excuse defence which may arise on a charge under the second limb of section 72 also does not address the mental requirements relating to the element of endangerment and therefore does not supplant the presumption of mens rea in respect thereof. 75. Under the second limb, the prosecution has to prove that the defendant’s conduct (which may involve him acting or omitting to act in any manner whatsoever) endangered the safety of persons at sea and that such conduct, resulting in that consequence of endangerment, was without reasonable excuse. It was, in my view correctly, conceded by the prosecution that the reasonable excuse defence imposed merely an evidential burden on the accused, the legal burden of negativing the defence if sufficiently raised, resting throughout on the prosecution. 76. Plainly, the defence of reasonable excuse is separate and distinct from any requirement that intention, recklessness or some other state of mind must accompany the act or omission in question in order to constitute the offence in the first place. 77. This may be illustrated by taking, for example, section 33(1) of the Public Order Ordinance[57] which makes it an offence for any person, without lawful authority or reasonable excuse, to have with him in any public place any offensive weapon. It is plainly necessary for the prosecution to prove that the defendant knew that he had the weapon with him.[58] But even where such intention is duly proved, the statutory defences of lawful authority and reasonable excuse remain available and have spawned much case-law. A person who knowingly has with him an offensive weapon in a public place may, for instance, have the defence of lawful authority since he may be carrying the weapon as part of his lawful duties, being a policeman or a soldier. And a person may have a reasonable excuse in certain cases where he arms himself in self-defence in anticipation of being subjected to imminent unlawful attack[59] or where he has some other “good reason” for carrying the weapon.[60] 78. The reasonable excuse defence in section 72 likewise concerns the existence of good reasons, extrinsic to the defendant’s mental state, which excuse his conduct which has endangered safety. One can imagine, for instance, a case where a vessel sails down the wrong side of a narrow channel endangering the safety of others, but where the master gives convincing evidence that the vessel’s steering gear had failed through no fault of his own and is found to have a reasonable excuse. Unexpected equipment failure might also provide a reasonable excuse for a vessel not showing the masthead and side lights required by rule 17 and not making the sound signals required by rule 35 of COLREGS. The possible availability of a reasonable excuse defence in such cases tells us nothing about whether mens rea must be proved in relation to the consequence of endangerment in the first place. G.6 Conclusion as to the basis of the decisions below 79. For the foregoing reasons, I conclude that the approach adopted in the decisions below was flawed. They failed to acknowledge the existence of a presumption of mens rea applicable to the element of endangerment in section 72; failed to identify a proper basis, if any, for displacing that presumption; and if displaced, failed to consider what mental requirements should replace the supplanted mens rea. H. The respondent’s position 80. Mr Simon Westbrook SC[61]seeks to support the findings below in favour of absolute liability in relation to the element of endangerment. He submits[62]that section 72 comes within Hin Lin Yee’s fourth alternative,[63] that is, that on its true construction, section 72 dispenses with mens rea and limits the defendants to reliance on the “all reasonable precautions” defence provided by section 10(3) and the “reasonable excuse” defence under section 72 itself. 81. I shall shortly consider the case for absolute liability as a matter of construction, but would say at once that the Hin Lin Yee fourth alternative must be rejected in the present case. It is an alternative which only arises where the presumption is held to have been supplanted and the express statutory defences are inconsistent with the second and third alternatives importing a “halfway house”.[64] Since, as I have endeavoured to show in Section G above, neither of the defences under section 10(3) and section 72 bears on the mental requirements relating to the element of endangerment, they are not inconsistent with either full mens rea or a halfway house mental state being required in respect of that element. I. The five alternatives re-formulated 82. Before proceeding to construe section 72, it is necessary to re-visit Hin Lin Yee and to re-formulate the available alternatives in a manner appropriate to a case such as the present. 83. First, as indicated above, the five Hin Lin Yee alternatives need reformulation to address the possible alternative mental requirements relating to the consequences, and not just the circumstances, of the defendant’s conduct. So modified, the five possible alternatives may be stated as follows (with references to the element of consequences here italicised): (a) first, that the mens rea presumption persists and the prosecution must prove knowledge, intention or recklessness as to every element of the offence (“the first alternative”); (b) second, that the prosecution need not set out to prove mens rea, but if there is evidence capable of raising a reasonable doubt that the defendant may have acted or omitted to act in the honest and reasonable belief that the circumstances or likely consequences of his conduct were such that, if true, liability would not attach, he must be acquitted unless the prosecution proves beyond reasonable doubt the absence of such exculpatory belief or that there were no reasonable grounds for such belief (“the second alternative”); (c) third, that the presumption has been displaced so that the prosecution need not prove mens rea but that the accused has a good defence if he can prove on the balance of probabilities that he acted or omitted to act in the honest and reasonable belief that the circumstances or likely consequences of his conduct were such that, if true, he would not be guilty of the offence (“the third alternative”); (d) fourth, that the presumption has been displaced and that the accused is confined to relying on the statutory defences expressly provided for, the existence of such defences being inconsistent with the second and third alternatives mentioned above (“the fourth alternative”); and (e) fifth, that the presumption is displaced and the offence is one of absolute liability so that the prosecution succeeds if the prohibited act or omission is proved against the accused, regardless of his state of mind regarding the relevant elements of the offence in question (“the fifth alternative”). 84. Secondly, the principle enunciated in Hin Lin Yee should be revisited to address the position regarding a serious criminal offence as opposed to an offence that is merely regulatory. 85. Hin Lin Yee was concerned with the mental element to be proved in relation to a regulatory offence, namely, breach of section 54(1) of the Public Health and Municipal Services Ordinance.[65] The offence involved selling drugs which were intended for use by man but unfit for that purpose (because they had been contaminated by a certain contaminant). It was an offence punishable on summary conviction by a maximum fine of $50,000 and imprisonment for 6 months.[66] The appellants’ case was that they were unaware of the contamination and it was held by this Court that the presumption of mens rea had been dislodged and that the appellants were confined to the statutory defences expressly provided for, which they were unable to make good on the facts.[67] The 1st and 2nd appellants were respectively fined $45,000 and $1,500.[68] As was made clear in Hin Lin Yee, no constitutional issues were raised in that appeal and the discussion proceeded solely on the basis of common law principles.[69] 86. The present case involves an offence which is not merely regulatory but involves serious criminal liability, being triable on indictment and punishable by a fine of up to $200,000 and by imprisonment for up to 4 years. In cases like the present, a conviction is also likely to have serious professional ramifications for the mariners involved. As we have seen, a constitutional challenge was made to the reverse onus apparently imposed by the statutory defences provided for. 87. I concluded in Hin Lin Yee that the halfway house to be adopted in Hong Kong was the third (reverse onus) and not the second (evidential burden) alternative, on the basis that once the Court was prepared to go so far as to accept as a halfway house, the imposition of a reverse onus on the defendant, there was little to be said in favour of the second alternative. I also remarked that the latter alternative was less straightforward, since it requires the prosecution to proceed subject to the contingency that the accused discharges an evidential burden as to his having had reasonable grounds for an exculpatory belief. The prosecution would then have to prove either the absence of an honest belief or the absence of reasonable grounds for such belief.[70] 88. Such reasoning is apt when the Court is dealing with a merely regulatory offence and no constitutional issue is raised. Given the relatively minor gravity of the offence, the Court may be prepared to adopt the reverse onus alternative which falls close to the absolute liability end of the spectrum as best reflecting the presumed legislative intent upon displacement of the presumption of mens rea. Such alternative remains available and may be compelling when construing regulatory offences. 89. However, where, as in the present case, the Court is not dealing with a merely regulatory offence, it may conclude that the presumption of mens rea has been displaced but may not accept that adoption of the third alternative would reflect the legislative intent. Where a serious offence carrying severe penalties is involved, a reverse onus may also be regarded as making excessive inroads into both the presumption of mens rea and the constitutionally protected presumption of innocence. In such cases, the Court may find it more appropriate to infer that the second alternative best reflects the presumed intention of the legislature, doing no violence to the presumption of innocence. 90. It follows that all five of the reformulated alternatives set out above should be considered as possible conclusions when construing statutory criminal offences – both serious and regulatory – which are silent or ambiguous as to the state of mind required in respect of the element of the offence under consideration. I proceed to discuss the proper construction of section 72 on this basis. J. Construction of section 72 J.1 Is there a case for absolute liability? 91. It is convenient to begin by considering whether the decisions below in favour of absolute liability for the element of endangerment can be justified. 92. A conclusion in favour of absolute liability is of course never lightly reached since it is in principle objectionable, especially where the offence is serious, that a person should be made criminally liable where he did not deliberately or recklessly engage in the prohibited conduct or where he was ignorant of circumstances making his conduct criminal or where he acted harbouring an honest and reasonable belief inconsistent with liability. 93. As pointed out in Hin Lin Yee,[71] absolute liability is usually only entertained as a possibility in relation to “quasi-criminal” or merely regulatory offences where the public interest prohibits and imposes a minor penalty on the conduct in question. But even in such cases, the fact that the offence is merely regulatory is not a sufficient basis for imposing absolute liability, particularly where a middle course exists.[72] Before deciding on absolute liability, the Court will ask whether some less Draconian approach is appropriate. It will have to be satisfied that some useful purpose is served by imposing absolute liability. Illustrations given in Hin Lin Yee include cases where the prohibited conduct is intrinsically unacceptable so that absolute liability encourages individuals to steer well clear of possible contravention. Also instanced are cases where certain tasks are delegated to an agent and where it makes sense to subject the principal to absolute liability to encourage him to take proactive measures to prevent contravention by his agent in carrying out those tasks. 94. Viewed against such considerations, there is plainly no justification for imposing absolute liability in relation to the endangerment of safety under section 72. It may have started off as a relatively minor offence but in 1979, it was made indictable and punishable by a fine of $200,000 and imprisonment for 4 years, a ten-fold and eight-fold increase in the respective penalties. 95. Endangerment of the safety of persons at sea is at the very core of this serious offence and it would in principle be objectionable to find someone guilty of such criminality in the absence of some culpable state of mind (not necessarily full mens rea)with regard to endangerment. 96. Given the breadth of the offence, in many cases covered by the section, little purpose would be served by the imposition of absolute liability. The safety of persons at sea could sensibly be promoted by deterring dangerous conduct which is deliberate, reckless or carried out without an exculpatory state of mind. But no deterrent value or social benefit would be gained by punishing persons who lack such culpable mental states since they could not be expected to behave any differently notwithstanding potential liability. 97. I therefore conclude that the courts below fell into error in holding that liability under section 72 could be established on the basis of absolute liability regarding the element endangerment. J.2 The proper construction of section 72 98. I turn then to consider what the proper construction of section 72 is, asking whether the presumption of mens rea is displaced and if so, by what alternative mental element. J.2a Is the presumption of mens rea displaced? 99. The question which falls to be examined is whether the legislative intention behind section 72 is to require the prosecution to prove beyond reasonable doubt that the conduct (either under the unlawful act limb or the second limb) of each appellant was intentional or reckless regarding the consequence of endangering the safety of N67’s crew. 100. It is clear on its face that the purpose of section 72 is in general terms to punish and deter conduct which endangers the safety of persons at sea. And as the Court of Appeal pointed out,[73] the 1979 amendments which made the offence much more serious were motivated specifically by a major influx of Vietnamese boat people and targeted owners and masters who conveyed them to Hong Kong in dangerously unseaworthy and overloaded vessels. 101. However, the net cast by section 72 is very much wider. Its language is striking for its inclusivity and breadth. Unlike section 10(3) which applies only to the owner, the master and the person responsible for the conduct of the vessel, section 72 applies to “any person”. The conduct that it prohibits may take virtually any form so long as it endangers safety. Under the first limb, the conduct has to be unlawful, but under the second limb, it is conduct which causes danger “in any manner whatsoever”. Even under the unlawful act limb, there is no restriction on the kind of unlawfulness that suffices: it may or may not consist of an offence which itself requires proof of mens rea. The central criminality targeted is therefore the causing of danger to the safety of others. The legislature appears almost indifferent as to how such endangerment is caused. 102. Since the 1979 amendment was aimed primarily at unscrupulous human traffickers acting in ways which self-evidently endangered the lives and safety of the persons carried in their vessels, it is perhaps unsurprising that the legislature did not expressly address the mental element pertinent to the consequence of endangerment. However, the breadth and lack of specificity of the ingredients of section 72 result in the section covering a wide spectrum of behaviour in very different contexts. Cases against human traffickers sending out overloaded “rust bucket” vessels obviously raise very different policy, evidential and enforcement issues from the issues arising in the context of a maritime collision between ocean-going vessels navigated by certified master mariners or pilots. The section has also been held to apply, for instance, where danger is caused by smugglers deliberately or recklessly running high-powered boats at great speed through congested areas to evade chasing police vessels; and in the different situation involving coastal vessels causing endangerment by failing to keep a proper lookout. 103. Given the range of situations covered by section 72, I do not think that the Court should categorically affirm the presumption and construe the section as invariably requiring proof of full mens rea. There will of course be many cases where the prosecution faces little difficulty proving deliberate or reckless endangerment. But there will equally be cases like the present where significant problems of proof may arise since the collision may be the result of a combination of factors arising out of the interaction between two vessels developing over time, making it difficult for the prosecution to establish the facts upon which firm inferences can be drawn regarding each defendant’s state of mind. 104. The situation just described exemplifies what was envisaged in Hin Lin Yee when it was emphasised that: “The question: ‘Has the presumption of mens rea been displaced in the present case?’ cannot be addressed alone or in the abstract. It must be considered in tandem with the question: ‘If so, by what? By what, if any, mental requirement is the supplanted requirement of mens rea to be replaced?’ The answer to the second question inevitably influences how the first is approached.”[74] 105. The question whether the presumption of mens rea should be held to be displaced should therefore be held in abeyance until the possible alternatives are considered. J.2b The alternative to mens rea 106. I have already rejected the fourth alternative on the ground that the available statutory “all reasonable precautions” and “reasonable excuse” defences do not bear on the element of endangerment and therefore are not inconsistent with adoption of a halfway house alternative.[75] I have also rejected the fifth alternative which favours absolute liability.[76] That leaves the second and third alternatives as candidates to replace mens rea should the presumption be dislodged. 107. In discussing the need to reformulate the five alternatives,[77] I noted that when dealing with a serious as opposed to regulatory offence, a court considering whether the presumption of mens rea should be displaced – and if so, replaced by what – is likely to find it more appropriate to infer that the second (rather than the third) alternative best reflects the presumed intention of the legislature since that alternative lies closer to the full mens rea end of the spectrum and does no violence to the presumption of innocence, as befits a serious offence. On the other hand, the third alternative is likely to be more compelling in relation to a regulatory offence. 108. In my view, that approach is apposite to the present case and the conclusion to be drawn is that the second alternative applies on the true construction of section 72. Support for imputing to the legislature an intention favouring the second alternative if mens rea is supplanted may be found in the existence of the reasonable excuse defence. Although, as pointed out above,[78] that defence does not bear on the mental requirements relating to the element of endangerment but arises as a subsequent issue, the existence of such defence shows (at least under the second limb) that the legislature’s policy is not to penalise endangerment resulting from conduct for which there is a reasonable excuse. This, in my view, justifies the conclusion that given displacement of the presumption of mens rea, it would likewise have been the legislative intention that mens rea should be replaced by a mental element which focuses on the reasonableness of the grounds of an exculpatory belief. While “reasonable excuse” only arises as a matter of defence under the second limb, the second alternative should be taken to apply as a constituent element of prima facie liability under both limbs. J.3 Conclusion as to the proper construction of section 72 109. The conclusion reached as to the proper construction of section 72 may therefore be summarised as follows. On its true construction, it is an offence to which the second alternative applies. In other words, it is an offence where: (a) The prosecution is required to prove beyond reasonable doubt that the defendant engaged in conduct under the unlawful act limb or the second limb of the section and that such conduct in fact caused endangerment to the safety of others at sea. (b) If the defendant is able to rely on evidence which, if unrebutted, raises a reasonable doubt as to whether he acted or omitted to act in the honest belief on reasonable grounds that his conduct was not such as to cause danger to the safety of others, the defendant is entitled to be acquitted unless at the end of the day, the prosecution establishes beyond reasonable doubt that the defendant either did not have such belief or that his belief, although honestly held, was not based on reasonable grounds. (c) Furthermore, where the charge is under the second limb, if the defendant is able to rely on evidence which, if unrebutted, raises a reasonable doubt as to whether a reasonable excuse exists for his conduct and the resultant endangerment of safety, he is entitled to be acquitted unless at the end of the day, the prosecution establishes beyond reasonable doubt that no such excuse exists or that the excuse relied on is not reasonable. 110. I might add in relation to the last proposition that the prosecution conceded that the reasonable excuse defence operates to impose merely an evidential burden on the accused, with the prosecution bearing the legal burden of negativing such defence if it should be sufficiently raised on the evidence. Mr Westbrook SC indicated that the prosecution saw no practical difficulty in approaching the defence on that basis. In my view, that concession was correctly made and construing the reasonable excuse provision as imposing merely an evidential burden obviates any need to debate the proportionality of a reverse onus in the present context. K. Substantial and grave injustice 111. When the 1st appellant applied to the Appeal Committee for leave to appeal, he sought to advance six grounds on the substantial and grave injustice basis in addition to the legal questions dealt with on this appeal. Leave was only granted on the points of law ground. Mr Peter Duncan SC[79] nevertheless sought leave at the hearing to argue two points on the substantial and grave injustice ground. 112. As was decided in HKSAR v Lee Ming Tee,[80]the Court undoubtedly has jurisdiction to determine all questions which are related to the points which have been certified and on which leave to appeal was granted. However, it will only exercise its discretion to entertain additional questions in exceptional cases, particularly where determination of such questions is necessary or desirable to ensure the effective disposal of the issues arising on the appeal. 113. The Court heard Mr Duncan de bene esse but refused the 1st appellant leave to proceed without calling on the prosecution to reply. No basis was shown for exercising the Court’s discretion in favour of granting leave, especially since the points advanced appeared to the Court to be unarguable. 114. Mr Duncan sought leave to raise two points both based on the complaint that the Director of Marine was not called as a witness by the prosecution. It was suggested that the “official view” of the Marine Department, contrary to that espoused by the prosecution, was that the stretch of water in which the collision occurred was not a narrow channel within rule 9 of COLREGS, a proposition which it was said that the Director could have been expected to confirm, explaining the reasons for his view. The two points sought to be made based on his not being called by the prosecution were: (a) That the HKSAR should never have brought the prosecution if it was not going to call the Director since his absence necessarily meant that the case against the 1st appellant could not be proved beyond reasonable doubt, making the bringing of the prosecution an abuse of process; alternatively, (b) That if the prosecution were to proceed on the basis that the stretch of water was a rule 9 narrow channel, it was incumbent on the prosecution to call the Director to explain his position. 115. Insofar as the first point involves inviting the Court to rule on whether the prosecution should or should not have been brought, it was not a competent ground of appeal since Article 63 of the Basic Law guarantees the Department of Justice control of criminal prosecutions, free from any interference. 116. Insofar as the proposition was that the absence of the Director’s evidence meant that the case could not be proved beyond reasonable doubt, that is a point which could be and was made in a submission of no case to answer, which was rejected. It was a point that was open as a submission at the end of the trial and indeed, on appeal to the Court of Appeal. It is self-evident that it stood no chance of success since, the 1st appellant was found guilty under section 72 beyond reasonable doubt. 117. If it was genuinely thought that the court’s process was being abused, an application could have been made to stay proceedings, but such application was never made. In any event, there is no viable basis for the purported ground focussing on whether the Secretary for Justice was entitled to bring the prosecution. 118. As to the second point, Mr Duncan accepted that the 1st appellant was himself perfectly entitled to call the Director and to question him about his and the Department’s views on the status of the stretch of water in question. Having chosen not to do so, there can be no basis for complaining about the Director’s absence as a witness, let alone submitting that his absence somehow represents a substantial and grave injustice done to the 1st appellant. L. The issues raised by the proviso 119. The Courts below having fallen into error in treating section 72 as an offence of absolute liability regarding the element of endangerment, the question for this Court is whether it follows that the appeals must be allowed and the convictions quashed or whether either or both convictions ought to be upheld on the basis of the proviso. 120. Section 17(2) of the Court’s statute[81]empowers the Court to exercise any of the powers of the court from which the appeal lies. That includes the Court of Appeal’s powers under section 83 of the Criminal Procedure Ordinance[82]which requires appeals to be allowed where the conviction is unsafe or unsatisfactory; or based on a wrong decision on a point of law; or involved a material irregularity in the course of the trial, but makes this subject to a proviso which states: “Provided that the Court of Appeal may, notwithstanding that it is of opinion that the point raised in the appeal might be decided in favour of the appellant, dismiss the appeal if it considers that no miscarriage of justice has actually occurred.” 121. The relevant test for applying the proviso is well established. As stated in Ewan Quayle Launder v HKSAR[83]and often applied,[84]the test is “whether a reasonable jury, properly instructed, would, on the evidence, without doubt convict or would inevitably come to the same conclusion”. Where, as in the present case, the trial was in the District Court without a jury, the inevitability or otherwise of a conviction can be judged with the benefit, not only of the evidence admitted at the trial, but also of the Judge’s explicit findings. I would add, with respect, that although the Judge was wrong-footed on the mens rea question, her judgment is highly impressive for its comprehensive analysis of the evidence and the meticulous and detailed findings made. 122. The question which this Court must ask arising out of the foregoing discussion of mens rea is whether, notwithstanding the error of law regarding the mental requirements pertinent to the element of endangerment in section 72, this Court can be satisfied that on the evidence and her Honour’s findings, the Judge would inevitably have come to the same conclusion, convicting the appellants, if she had applied the correct legal test. 123. On the particular charges in the present case, that translates into the following questions to be asked of each appellant: (a) Is the appellant able to point to evidence or findings made by the Judge sufficient to raise at least a reasonable doubt whether he acted or omitted to act in the honest belief on reasonable grounds that his conduct was not such as to cause danger to the safety of others? (b) If such evidence exists, on the evidence and the Judge’s findings, has the prosecution established beyond reasonable doubt that the defendant acted or omitted to act either without honestly holding such belief or, that his belief, although honestly held, was not based on reasonable grounds? L.1 The 1st appellant’s case on the proviso 124. So far as the actus reus is concerned, Lord Clarke NPJ demonstrates how the 1st appellant’s conduct caused endangerment to the safety of his vessel and his crew by failing to alter course to starboard at any stage pursuant to his duty to keep to the starboard side of the channel under rule 9.[85] 125. Lord Clarke NPJ also deals in detail with the exculpatory case on mens rea advanced by the1st appellant and the Judge’s findings thereon. I gratefully adopt that analysis and will seek in this judgment only to summarise the conclusions relevant to the proviso question. 126. The 1st appellant seeks to justify his actions leading up to the collision along the following lines: (a) He believed that the buoyed channel was not a channel to which rule 9 applied and that he was under no obligation to keep to the starboard side whether under rule 9 or under the rules of good seamanship.[86] (b) He believed that the crossing rules and in particular rule 15 applied with YH as the give-way vessel; and therefore that he was bound by rule 17(a)(i) to keep his course and speed.[87] (c) He believed at first that YH, as the give-way vessel, would alter course to starboard going north of CP1 buoy to pass N67 port to port, but later believed that YH would instead cross ahead of N67’s bow, passing starboard to starboard with a passing distance of at least 2 cables.[88] (d) When a close quarters situation had developed, he gave his order hard to port and then realised too late that YH had turned to starboard and the collision occurred.[89] 127. The 1st appellant’s case is that the Court should infer from such evidence that the 1st appellant believed himself to be faithfully following internationally recognized rules of navigation designed to prevent maritime collisions and that he therefore lacked any appreciation or foresight that his conduct might result in endangerment of the safety of his crew. 128. He argues that whether or not he was objectively right in his understanding of the collision regulations, his abovementioned beliefs were honestly and reasonably held and that it cannot be said that the prosecution has shown beyond reasonable doubt either that he did not in fact hold such beliefs or that they were not held on reasonable grounds. The 1st appellant therefore submits that this Court would not be justified in finding that, applying the proper legal test as to section 72’s mental requirements, the Judge would inevitably have reached the same conclusion and convicted him. L.2 The Judge’s findings regarding the 1st appellant relevant to the proviso 129. The Judge made findings specifically regarding the reasonableness of 1st appellant’s aforesaid beliefs. Those findings were made in the context of deciding whether the “all reasonable precautions” defence under section 10(3) or the “reasonable excuse” defence under section 72 availed the 1st appellant. They were therefore made under a different legal rubric but their substance is directly in point so far as the mental requirements are concerned. Those findings are therefore of direct relevance to the question of whether the proviso should be applied. 130. For the reasons given by her and analysed in detail by Lord Clarke NPJ, the Judge found and was entitled to find: (a) That it was unreasonable for the 1st appellant to believe that the buoyed channel was not a rule 9 channel and that vessels in it were not required to keep to the starboard side;[90] (b) That it was “wholly unreasonable and erroneous” for the 1st appellant to believe that the crossing rules applied; or that he was bound to stand on and hold course and speed, hogging the channel; and “more absurd that he believed that YH was going to cross ahead of N67 bow”;[91] (c) That it was unreasonable for the 1st appellant to believe that YH would have gone north of CP1 buoy and then entered the channel between CP1 and CP3 buoys and “wholly unreasonable and erroneous for the [1st appellant] to have expected a starboard to starboard passing, even on his flawed belief that this was a crossing situation”;[92] (d) That the 1st appellant’s failure to keep a proper lookout was critical and played a major role in the collision,[93] the 1st appellant not having seen YH’s Aldis lamp signals when the vessels were about 2 nm apart;[94]he having failed to keep any lookout by radar from the time when they were about 1 nm apart;[95] and he having failed to hear the YH’s whistle blasts which was found to be “shocking and unacceptable,” as representing “reckless and dangerous navigation”;[96] and “no excuse let alone a reasonable excuse”.[97] 131. As Lord Clarke NPJ points out, the critical case established against the 1st appellant was his unreasonable failure to appreciate that the buoyed channel was a rule 9 narrow channel; his insistence on maintaining his course until the last and his consequent failure to take starboard helm at any stage. The 1st appellant’s contention that he had honest and reasonable grounds for believing that his conduct did not give rise to any risk of endangerment since he was properly following the crossing rules designed to prevent collisions, was therefore negated. Even assuming that the 1st appellant honestly believed that his conduct was not such as to endanger the safety of others, such a belief was properly found by the Judge not to have been held on reasonable grounds. L.3 Conclusion as to the 1st appellant and the proviso 132. It follows, in the light of the Judge’s findings, that if she had applied the correct legal test by adopting the second alternative as the mental requirement for the element of endangerment in section 72, she would inevitably have come to the same conclusion and convicted the 1st appellant. The proviso should accordingly be applied in the case of the 1st appellant and his appeal dismissed. L.4 The 2nd appellant’s case on the proviso 133. On the 2nd appellant’s evidence, his appreciation of the situation was diametrically opposed to that of the 1st appellant: (a) He believed the buoyed channel was a rule 9 narrow channel[98] and that the safest course for YH was to enter it between buoys CP1 and CP2.[99] (b) He believed that he was shaping a course that would bring him between N67 and CP1 buoy[100] and expected N67 to know that he was entering the channel[101] and to move to the starboard side after YH had passed the restricted area near CP3 buoy and thereafter to keep to the starboard side of the channel, effecting a port to port passing with YH.[102] (c) He kept a proper lookout and monitored N67 throughout.[103] He became increasingly concerned when he saw that N67 was proceeding down the middle of the channel and took a series of steps to alert her to the need to move over, including an attempt to request MARDEP to inform N67 that he was expecting a port to port passing;[104]making Aldis lamp signals to N67;[105] making one short whistle blast to signify that he was turning to starboard;[106]and making two sets of five short whistle blasts to signify that he did not know N67’s intentions.[107] Quite inexplicably, the 1st appellant did not see the flashes and did not hear the whistle blasts. (d) The relevant helm orders given by the 2nd appellant were of starboard 10 at 21:12:25h, starboard 20 at 21:12:32h and hard starboard at 21:12:43h.[108] As the Judge found, he “believed that his action alone of putting the helm hard to starboard at 21:12:43 would achieve a 60-70m clear passing red to red.”[109] (e) The 2nd appellant did not think there was a risk of collision until he saw N67 turn to port and gave his hard starboard order at 12:12:43h, which was too late to avoid the collision.[110] L.5 The Judge’s findings regarding the 2nd appellant relevant to the proviso 134. The Judge’s assessment of the each appellant’s responsibility was strikingly different. In the case of the 1st appellant, as we have seen, she made a series of specific findings as to the unreasonableness of his beliefs which contradict any submission that he acted in the honest and reasonable belief that his conduct was not such as endanger the safety of others. On the other hand, the Judge’s findings critical of the 2nd appellant focus not on the unreasonableness of his subjective beliefs, but on his conduct falling short of objective standards of good seamanship. 135. The Judge found that the 2nd appellant correctly understood that the buoyed channel was a rule 9 channel;[111] that the crossing rules did not apply;[112]and that it was reasonable for YH to enter the channel between CP1 and CP2 buoys and to make her approach on the starboard side; whereas N67 was hogging the channel and ought to have moved over to her starboard side.[113] 136. Her Honour’s fundamental criticism of the 2nd appellant was that he had left collision avoidance action too late. The collision occurred at 21:13:44h. She found that the order of starboard 20 should have been given at the latest by 21:11:35h and therefore that he had given it about a minute too late.[114] As she puts it: the collision avoidance action by YH was simply “too little too late”.[115] 137. This led the Judge to infer that the 2nd appellant must have failed to keep a proper lookout since he should have determined that there was a collision risk sooner and acted more promptly to avert it.[116]As she puts it: “Although I accept that D3 was paying a lookout he was not maintaining a proper lookout because he did not appreciate what was actually happening. He did not appreciate the close CPA, he did not appreciate the close quarters he was getting himself into...”[117] L.6 Conclusion as to the 2nd appellant and the proviso 138. In my view, there is no basis for application of the proviso in the 2nd appellant’s case. I accept the submission of Mr Timothy Brenton QC that on the evidence and the Judge’s findings, the 2nd appellant’s navigation of YH was conditioned throughout by his honest and reasonable belief that N67 would move to starboard and that he has therefore raised at least a reasonable doubt as to whether he honestly and reasonably – albeit mistakenly – believed that his conduct was not such as to endanger the safety of others, in particular the crew of N67. The finding that he had ordered collision avoidance action to be taken a minute too late for it to avert the collision involved criticising an error of judgment on his part. It did not negate his exculpatory honest and reasonable belief. It cannot be said that the Judge would inevitably have convicted, applying the correct legal test. 139. I therefore conclude that the 2nd appellant’s appeal must be allowed and his conviction quashed. Mr Justice Tang NPJ: 140. I agree with the judgments of Mr Justice Ribeiro PJ and Lord Clarke of Stone-cum-Ebony NPJ. Lord Clarke NPJ: Introduction 141. I have read the draft judgment Mr Justice Ribeiro PJ. I respectfully agree with it and will not traverse the same ground in this judgment. I will focus on two issues. In doing so I will use the same abbreviations and terminology as Mr Justice Ribeiro PJ. The first issue involves an analysis of the navigation of the two vessels which led to the collision and to the tragic loss of life that followed. The most important question for consideration under this head is what provisions of the COLREGS applied to the navigation of each vessel. The second is the question what follows with regard to the actus reus and mens rea of the offencefrom the conclusions on the first issue and from the legal principles identified by Mr Justice Ribeiro PJ. In the case of each appellant, the question is whether his appeal against conviction should be allowed or dismissed. The navigation The certified questions 142. The Court of Appeal certified one question of law and this court certified a further seven. The first is concerned with mens rea and has been fully discussed by Mr Justice Ribeiro PJ. The remaining seven are relevant or potentially relevant to the navigation of the vessels. They are these: “2. What are the legal principles for determining whether a particular channel is a ‘narrow channel’ to which rule 9 of the COLREGS applies? 3. Does rule 9 of the COLREGS apply to a vessel approaching but navigating outside a narrow channel with the intention of entering it? 4. Is there a rule of good seamanship which requires a vessel navigating in an IALA buoyed channel which is not a narrow channel to keep to the starboard side? 5. Does a vessel navigating within a channel have a right of way over another vessel which is approaching from outside the channel with the intention of entering it? 6. Do the provisions of rule 8(f) apply to all vessels or only to those vessels which are specifically required by the COLREGS not to impede another vessel. (reference is then made to rules 9(b), (c) and (d), to rule 10(i) and (j) and to 18(d)(i). 7. Do the crossing rules apply when a vessel is approaching a channel on a crossing course involving risk of collision with another vessel navigating in the channel? 8. In what circumstances does the law require a stand-on vessel in a crossing situation to take avoiding action by virtue of rule 17(a)(ii) of the COLREGS notwithstanding the permissive wording of the rule?” For convenience I attach a copy of the COLREGS which are potentially relevant to the issues in this appeal as Annex 1 to this judgment. The vessels 143. The N67 was a twin engine and twin screw Ukrainian oil rig supply vessel, of 2,723 gross registered tonnes, 81.37 metres in length and 16.3 metres in beam with a maximum draught of 4.8 metres. She had some containers on board. The YH is a single engine and single screw vessel, of 36,544 gross registered tonnes, 225 metres in length and 32.2 metres in beam with a draught of 11.48 metres forward and 12.01 metres aft. She was laden with a cargo of 57,842 tonnes of maize. Both vessels were exhibiting white masthead lights, red and green side lights and a white stern light. The N67 was considerably more manoeuvrable than the YH. The conditions 144. On the day is question (22 March 2008) the weather conditions were good. The wind was west or north-west and was blowing at about 12 kph and visibility was about 1.7 miles or a little more. The tide was flooding in a generally westerly direction at about 1.5 knots and the height of tide was about 1.7 metres. The primary facts 145. The primary facts are not now in dispute. That is because, as the Judge observed at para 106 of the Reasons for Verdict (references hereafter to paragraph numbers are references to the Reasons for Verdict), the relevant events were recorded and captured on radar at the Vessel Traffic Centre (“VTC”) provided by the Vessel Traffic Services (“VTS”) system maintained by the Marine Department (“MARDEP”) and on the voice data recorder (“VDR”). If the N67 had a VDR it was not available because of course the N67 sank. The Court of Appeal attached to their judgment a plot showing the tracks of the vessels over the ground which had been prepared at trial by one of the expert witnesses, Captain Third. It is not in dispute that the tracks shown are substantially accurate and I annex the same plot, which is drawn on a copy of Admiralty Chart 4122, as Annex 2 to this judgment. The N67 was proceeding at about 10 to 10.5 knots and the YH at about 13.5 knots over the ground I note in passing that, like the courts below, we saw a video of the VTS radar images, which shows clearly how the collision occurred. The Judge based her findings of fact on this material and it is, in my opinion correctly, not suggested that she was wrong to do so. I will return below, so far as necessary, to the navigation of each vessel after considering the principal navigational issue between the parties in this appeal, which is whether the N67 was navigating in a narrow channel within the meaning of rule 9(a) of the COLREGS. 146. For this purpose I attach as Annex 3 a further plot which is also drawn on chart 4122, which is again accepted as broadly accurate. It shows both the geographical area with somewhat more clarity and the tracks of the vessels from 2107 until collision at 2113.44. With one or two false starts the prosecution asserted that the N67 was navigating in a narrow channel delineated by six CP (or Castle Peak) buoys. Castle Peak Bay is some way to the north. There were three CP buoys on the north side of the channel. Each was delineated on the chart by a capital G, meaning green, and, from the west, they were marked as CP5, CP3 and CP1. They were passed to port by the N67, as the incoming vessel. 147. There were only two buoys on the south side, each designated a red buoy. From the west they were marked CP4 and CP2. Buoy CP4 was broadly opposite buoy CP5 and buoy CP2 was broadly opposite buoy CP1. There was no buoy opposite or broadly opposite buoy CP3. The reason for that can be seen from the reference on the chart to Area 6, which is broadly opposite and to the south of CP3. The Note referred to on the chart says that, except with the permission of the Director of MARDEP, Area 6 is prohibited to all vessels with an air draught of more than 15 metres and Area 4 is prohibited to all vessels. 148. The N67 was a vessel with an air draught of more than 15 metres and accordingly could not enter Area 6 without permission. The case for the prosecution was that the channel delineated by the CP buoys was a narrow channel within rule 9(a) of the COLREGS, which provides: “A vessel proceeding along the course of a narrow channel or fairway shall keep as near to the outer limit of the channel or fairway which lies on her starboard side as is safe and practicable.” The prosecution submitted that, in the case of any vessel proceeding eastward along the channel which did not have an air draught of 15 metres, her obligation was to keep as near to the southern edge of the channel, which was a line drawn between buoy CP4 to the west and CP2 to the east, as was safe and practicable. That line would pass very close to the pecked line on the chart between the marks to the north-west and the north-east of Siu Mo To Island. Such a vessel could pass close to the northern edge of the prohibited area noted on the chart as Area 4. 149. A vessel like the N67 was in a different position. She could not properly proceed south of the northern edge of Area 6 shown on the chart because, in the light of the notation on the chart, it was not safe and practicable to do so. It was therefore submitted on behalf of the 1st appellant that, assuming that the CP buoyed channel was a narrow channel for the purposes of rule 9(a), in the positions shown on the chart the N67 was complying with the rule between 2107 and 2109. It was accepted on all sides that that was the case. The issue between the parties was what was the position as from about 2109. The case for the prosecution and the 2nd appellant was that the N67 was under an obligation to alter course to starboard in order, in compliance with rule 9, to proceed along the channel as close to the southern edge of the channel as was safe and practicable. It was said that it was safe and practicable to navigate close to the southern edge of the channel, which was on a line approximately between the Siu Mo To NE mark and the CP2 buoy. 150. It was said on behalf of the 1st appellant on the other hand that the CP channel, although a buoyed channel, was not a narrow channel, that the N67 was not under an obligation to alter course to starboard to proceed along the starboard side of the channel and that, as the vessels approached each other, there came a time when they were crossing so as to involve risk of collision, so that the YH was under a duty to keep out of the way of the N67 and to take early and substantial action to do so under rules 15 and 16 of the COLREGS and the N67 was under a duty to maintain her course and speed until a late stage under rule 17. It was thus submitted that the N67 was not to blame for failing to alter course to starboard to proceed close to her starboard side of the channel. The Judge rejected this submission and held that the principal cause of the collision (and therefore the loss of life) was the failure of the second defendant as master of the N67 to alter course to starboard at an early stage. She held that, in colloquial terms, he was hogging the centre of the channel. The Court of Appeal reached the same conclusion. It was submitted that both courts were wrong to reach these conclusions. I will return below, so far as necessary, to the detail of the COLREGS and to other aspects of the navigation of the two vessels but, so far as the navigation is concerned, it seems to me that the most important issue in the appeal is whether the Judge was correct to hold that the buoyed channel was a narrow channel within the meaning of rule 9. Narrow channel 151. I will return below to such assistance as can be derived from the authorities but the question whether a particular stretch of water is a narrow channel within the meaning of rule 9 seems to me to be essentially a question of fact. The question has to be asked by masters and pilots in a myriad of different circumstances all round the world day in and day out. They have their experience and expertise to rely upon. They also have the relevant chart or charts and the relevant Admiralty Pilot or other sailing directions, together with any notices to mariners which may be relevant. They must of course always be aware of the local law and any local regulations or byelaws. Whether a particular area is a narrow channel cannot depend upon the opinion of the harbour master, the director of the port authority or the port authority itself unless that opinion has been disseminated to mariners. It follows that I would not accept the submission made on behalf of the 1st appellant that the opinion of the Director of MARDEP was of any assistance, unless it was disseminated to those navigating Hong Kong waters. 152. What then did the 1st and 2nd appellants have available to them to enable them to decide whether the buoyed channel delineated by the CP buoys was a narrow channel for the purposes of rule 9? The 1st appellant did not have the assistance of a pilot because, as a vessel of less than 3,000 tons gross, the N67 was not obliged to take a pilot and did not do so. The 1st appellant did however have some experience of navigating in the area. He had used the buoyed channel 20 or 30 times before The 2nd appellant was of course the chief pilot on board the YH for which pilotage was compulsory. He was a pilot of very considerable experience. 153. In this judgment I shall use the expression “CP channel” as meaning the channel delineated by the CP buoys and the expression “narrow channel’ as meaning a narrow channel within the meaning of rule 9. The answer to the question posed above is that the principal aids available to the appellants were the Admiralty charts, notably chart 4122, and the Admiralty Pilot Book. 154. The relevant Pilot Book is entitled “Admiralty Sailing Directions China Sea Pilot Volume 1”. Paragraph 9.142 is headed Ma Wan to Urmston Road. Ma Wan is the north-east tip of Lantau Island, which outbound vessels like the YH have to pass to port. It is about 1.75 miles to the east-north-east of the position shown on chart 4122 for the YH at 2107. Urmston Road is a little off chart 4122 to the west and is north of the Hong Kong International Airport. Paragraph 9.142 describes the general passage from the east and identifies Cheung Sok to the south and Brothers Point to the north, both of which are marked on chart 4122. Paragraph 9.142 continues: “Thence: To the E entrance (3½ miles ENE) to the buoyed channel through Chi Shui-Men (9.131). Light Buoys CP1 (starboard hand) and CP2 (port hand) are moored at the entrance and further light buoys (lateral) mark the deep-water route.” 155. The Pilot Book thus plainly described the CP channel as a buoyed channel and buoys CP1 and CP2 as starboard and port hand buoys respectively. It is common ground that the buoys are IALA buoys, which means that they conform to and are part of the uniform system of buoyage laid down by the International Association of Lighthouses. They are generally used for well-defined channels and denote the lateral limits of the channel. Under the IALA system vessels should keep the green buoys to starboard when proceeding in the direction of flow. In the CP channel the direction of flow is westward, as indicated by the large arrow and two small rings marked on the chart just up-channel of buoys CP4 and CP5. Thus, if using the channel, the YH would pass the green northern buoys to starboard and the N67 would pass them to port and thus would pass the red southern buoys to starboard. 156. The Pilot Book describes the route through the channel as a deep-water route because the depths of water in the vicinity are such that some vessels are so constrained by their draught that they have to navigate within the buoyed channel. An example of such a vessel was the BERLIOZ, which was a large container vessel of some 300 metres in length which was following the YH. It was apparent from the radar that she was a large vessel and it was not suggested that other vessels could assume that she could safely navigate outside the CP channel. The draught of the YH was not such that she had to navigate in the channel but, given her draught of just over 12 metres, it was readily understandable that she would wish to do so. The Judge found that the buoyed channel was generally used by ocean going vessels and that local vessels use the area to the north of the channel, where traffic is usually heavy. It was common ground that within the area to the north of the channel, outside the limits of the deep water route (ie the channel) vessels did not adhere to the narrow channel rule. This is not surprising because that area is plainly not a narrow channel and the Judge did not find that it was. 157. The width of the CP channel can be seen on the chart. The CP buoys are positioned on the 15 metre contour except for buoys CP1 and CP2 which are located on the 20 metre contour. The width of the channel varies between 3.1 cables at its widest, which is between CP1 and CP2 and 2.2 cables at its narrowest, which is between CP3 and the restricted area north of Siu Mo To. 158. As I read her judgment, the Judge found that the CP channel is a narrow channel on the basis of the following factors: (i) the geography, topology and bathymetry of the area, (ii) the size and manoeuvring characteristics of the vessels that use the channel; (iii) the fact that a buoyed channel had been created within a wider expanse of water; (iv) the object and underlying rationale of rule 9; (v) the manner in which seamen in fact navigate within the channel; and (vi) the expert evidence. I will briefly consider each of these aspects of the case. (i) Physical characteristics of the area 159. These are often critical. As I see it, they include both geographical and depth constraints and buoys which are often positioned having regard to such constraints. As the Judge put it at her para 378, the boundaries can be marked by buoys, landmasses or sandbanks. In paras 379 and 380 she accepted the opinion evidence of Captain Third in these terms: “379. I accept the evidence of Captain Third that the buoyed channel had the make up of a narrow channel. It is a channel delineated by buoys which is physically narrow. The width between CP1 and CP2 is 3.1 cables (570 metres), the width between CP3 and the restricted area north of Siu Mo To is 2.2 cables (407 metres) and between CP4 and CP5 the width is 2.8 cables (518 metres). At the CP4 and CP5 buoys two large ocean going vessels cannot comfortably pass each other and vessels over 16 metres in draught are not allowed in the channel there at the same time. 380. The bathymetric contours also define it as a narrow channel. The deep water indicates the deep water route designated for ocean going vessels. CP1 and CP2 are placed on the 20 metres contour lines whilst CP3, CP4 and CP5 are placed on the 15 metres line they are bathymetrically narrow and mark the bathymetrics of the channel. 381. I accept Captain Third’s opinion that even though in this case a vessel can still navigate outside of those buoys as there is sufficient room to do so the channel can still be considered a narrow channel. He said there are numerous places in European port approaches which are of that type where there is the ability to navigate outside the buoys but it was still a narrow channel. He gave the example of The Magellan Straits where there are quite broad stretches of water and the vessels navigate in central zones, but they are quite definitely following the narrow channel rule and ensuring their encounters are red to red.” That seems to me to be entirely sensible advice which the Judge was entitled to accept. (ii) The size and manoeuvring characteristics of the vessels that use the channel 160. This is to my mind a relevant consideration on the facts here because it is to be expected that deep water vessels will use the channel and proceed along the channel on the basis that the starboard hand rule applies to vessels in the channel. (iii) The fact that a buoyed channel had been created out of a wider area 161. As I read the Judge’s judgment, her essential reasoning is that the whole point of creating a buoyed channel out of a much wider area where the depths are significantly less is to create a channel in which vessels will be expected to pass safely port to port in accordance with the narrow channel rule. This seems to me to make good sense. 162. It is I think common ground that if a channel is designated as a narrow channel on a chart it will be a narrow channel within rule 9. However it was submitted on behalf of the 1st appellant that otherwise, where there is a dredged channel or, as in this case, a buoyed channel, rule 9 must apply across the entire stretch of water or not at all. It was on this basis that it was submitted that the CP channel could not be a narrow channel. It was submitted that, if it was anything, it was a fairway, and that it could not be a fairway because a fairway cannot exist except within a narrow channel and the water outside the CP channel was not itself a narrow channel. It was submitted that it is or would be impracticable to require vessels navigating within the CP channel to adhere to rule 9 in circumstances in which vessels just outside it were not subject to rule 9. 163. It was further submitted that, where a vessel is in a buoyed channel because she is constrained by her draught, she is expected to display the appropriate signal under rule 28 such that other vessels are expected to avoid impeding her passage under rule 18(d)(i). Moreover in a crossing situation the give-way vessel can slow down or stop. Attention was also drawn to the one way traffic system for vessels of more than 16 metres draft at the western end of the channel and to the restriction at Area 6. 164. Finally it was submitted that the outer limits of the channel were not defined. It was asked rhetorically whether the outer limits of the channel were to be the sounding lines and, if so, which and, if (as the Judge found) the buoys were to be joined up, which buoys and whether they were to be joined up by an imaginary straight line. 165. I would not accept those submissions, essentially for the reason given in para 161 above. I entirely accept that, where the chart marks a fairway or indeed a narrow channel, such a marking would almost certainly be conclusive. So, for example, there are a number of fairways marked on charts which cover Hong Kong, where they are for the most part marked with pecked lines. However, the expert evidence was that it is far from common to have narrow channels designated as rule 9 channels. I would reject the submission that a channel can only be a narrow channel if it is designated as such. There are, for example, at least two narrow channels in the Hong Kong area, apart from the CP channel, which are not so designated. One is a channel in Urmston Road designated by two buoys where a vessel’s position in the channel is ascertained by a light, another is in the south-west corner of chart 4122 and there may be others. 166. It is true that it was at one time suggested in the course of the trial that the channel was bounded, not by the CP buoys but by the 15 metre sounding lines shown on chart 4122. It was also at one time suggested that the CP channel was a fairway within a wider narrow channel encompassed by the 15 metre lines. However, the Judge was in my opinion correct to reject those suggestions. The whole point of the buoys was, and was obviously, to designate a channel, as expressly stated in the Pilot Book. In these circumstances it would make no sense to conclude that a wider and less precise channel is a narrow channel. Moreover the points taken relating to vessels constrained by their draught, to the one way traffic system for vessels of more than 16 metres draft at the western end of the channel and to the restriction at Area 6 do not seem to me to be of any assistance in deciding whether the CP channel is a narrow channel. I see no difficulty in a conclusion which treats the CP channel as a narrow channel and requires vessels proceeding along it to keep as near to the starboard side of the channel as is safe and practicable in accordance with rule 9. (iv) The object and underlying rationale of the rule 167. This point is closely related to the last. The Judge expressed her conclusions broadly thus at her paras 124 and 125 under the heading “Passing of vessels within this stretch of water”. Vessels passing in the channel should pass port to port, with each vessel proceeding as close to her starboard side as is safe and practicable. Under rule 9 the vessel in the channel should plainly do so because vessels entering the channel will expect her to do so. Vessels navigating in the buoyed channel seeing vessels approaching the buoyed channel from Ma Wan Island in the opposite direction at an early stage are likely to see a number of alterations of course of these vessels as they may be constantly changing their aspect in order to shape a course into the channel. Safety requires a vessel approaching the channel so as to proceed along it to navigate so that if the vessels pass in the channel they will pass port to port. This will be achieved if the narrow channel rule applies. If it does not, there is considerable scope for confusion. (v) The manner in which seamen in fact navigate within the channel. 168. There was some discussion in the course of the argument as to whether this was a relevant consideration since it is a factor which might not be known to everyone who navigates in the particular area. However, it does seem to me to be a potentially relevant factor. If, for example, there is evidence that the vast majority of those navigating in the area treat a particular channel as a narrow channel, that seems to me to be a factor to take into account in deciding whether it is a narrow channel. 169. This seems to me to be such a case. The Judge discussed it at her paras 382 to 385. A letter was put in evidence signed by 96 of the 101 members of the Hong Kong Pilots Association (“HKPA”) in which they said that they considered that rule 9 applied to the CP channel. They added that all bulk carriers with a draft of over 11 metres would customarily navigate through the channel. In addition to the 2nd appellant and his co-pilot, who was the fourth defendant, the two pilots on board the BERLIOZ gave evidence to the same effect. 170. The Judge noted at para 383 that there was evidence that in the 24 hour period before the collision, when two vessels were going in opposite directions along the channel, there were no vessels passing starboard to starboard in the channel or at or near the entrance to the channel at CP1 and CP2. The Judge accepted at para 384 that there may be the odd occasion when vessels are going in opposite directions and one vessel may have gone north of the CP1 buoy in an easterly direction while the other vessel was heading west in the channel but she added, in my opinion correctly, that this did not show that seamen did not regard the CP channel as a narrow channel. She concluded at para 385 that seamen navigate the whole area of water from Ma Wan Island to the buoyed channel in accordance with Rule 9 but more particularly when they are approaching the buoyed channel and especially when they are within it. (vi) The expert evidence. 171. This was an important part of the evidence on many topics which the Judge considered in considerable detail from para 279. In para 365 she identified the witneses who expressed views on either side of the question whether the CP channel was a narrow channel. She identified the following as in favour of the narrow channel view. Captain Cheung and Professor Ng were experts called by the prosecution. The Judge did not place particular emphasis on this part of their evidence. The two BERLIOZ pilots and the pilots on the YH also gave evidence to this effect. Captain Chen, who was the chairman of the HKPA, exhibited the letter to which I have referred together with the views of the 96 pilots. 172. The experts upon whose opinion on the question of narrow channel the Judge placed particular reliance were Captain Third, who gave evidence on behalf of the master of the YH, who was the second defendant, and Captain Simpson, who gave evidence on behalf of the second pilot on the YH, who was the fourth defendant. I have referred to the most important part of Captain Third’s evidence at para 159 above, where I have set out the terms in which the Judge accepted his evidence. 173. It is important to consider the evidence relied upon on behalf of the 1st appellant in support of the conclusion that the CP channel was not a narrow channel which the Judge rejected. This is important because it was submitted on behalf of the 1st appellant that the Judge ought not to have rejected it or that it was in any event evidence on the basis of which the 1st appellant could reasonably think that the CP channel was a narrow channel. The argument is that if independent experts or authorities, as for example the Director of MARDEP, held that opinion, the contrary opinion cannot be unreasonable, even if it is held to be wrong. 174. In para 366 the Judge identified those that took a different view from Captain Third and the others referred to above as being the MARDEP VTC operators, Dr Stephen Li of MARDEP, the 1st appellant and his two experts, Captain Browne and Captain Loynd. It appears to me that it is important to identify the reasons why each of these witnesses expressed the opinions they did and to consider whether they stand up to scrutiny. I will consider each in turn. 175. Three MARDEP VTC operators gave evidence. Two of them said that vessels using the channel normally kept to the starboard side of it. The other did not express a view. It is true that they all expressed the view that the CP channel was not a narrow channel, but the basis of their view was that it was not a channel at all and that, at any rate in some of the evidence, that that was because it was not designated as such. In this Court it is accepted that the channel is a channel, the only issue being whether it is a narrow channel. It is presumably accepted that it is a channel because it is designated as such in the Pilot Book and because the buoyed channel is clearly shown on the chart. In these circumstances the evidence of the VTC operators is of no real assistance. 176. The operators were plainly wrong in so far as they suggested that a channel cannot be a narrow channel unless it is gazetted. For the reasons given above, it does not follow from the proposition that a channel which is gazetted as a narrow channel is a narrow channel that a channel which is not so gazetted is not a narrow channel. All depends upon the circumstances. The Judge was in my view correct to accept Captain Third’s opinion in this regard. 177. There is much the same problem with the evidence of Captain Li of MARDEP. He expressed the view that the CP buoys demarcate the deep water route in the area, which is correct, but he added that as most vessels can navigate outside the buoys, the area is not considered as a narrow channel. In my judgment that view is plainly wrong. As Captain Third said, there are many areas in the world where some vessels can navigate outside a channel and some cannot. This is simply one of them. For the reasons given above, just as there is no reason why an IALA buoyed channel should not be introduced in such an area, so there is no reason why such a channel should not be a narrow channel. It is very likely that it will be but whether it is or not will depend upon a judgment based on all the circumstances of the case, as the Judge in effect held in accepting the opinion of Captain Third. 178. The alternative view is not in my opinion arguable. I accept that that conclusion involves the rejection of the opinions of the 1st appellant’s experts Captain Browne and Captain Loynd. However, I regret to say that the Judge found that both witnesses were biased in favour of the 1st appellant. She said at para 296 that she found that they had no notion of impartiality and that they were not convincing in their attempts to explain his conduct and to suggest that he observed all material rules that night. In the case of Captain Browne she gave detailed reasons at para 297 for her conclusion at the end of that paragraph that he was not giving independent evidence. She reached a similar conclusion in the case of Captain Loynd at para 299. The Judge accordingly placed no reliance upon their evidence in this regard. In my judgment, the Judge was entitled to reach the conclusions which she did and, understandably, no attempt was made to persuade the Court to reach a different conclusion as to their approach. 179. In these circumstances I do not think that it would be appropriate for this Court to hold that the opinions expressed by those witnesses were reasonable or correct, especially in circumstances in which the Judge had contrasted their evidence with that of Captain Third and Captain Simpson. She said at para 295 that the most comprehensive, logical, independent and fair expert was Captain Third. She found him to be an impressive and reliable witness. She concluded that he was clear in his thinking process and his explanations and that his opinions were knowledgeable and fair. She found him to be impartial and unbiased. Also reliable and sensible, she said, was Captain Simpson. She was entitled to reach these conclusions. 180. The other witness who gave evidence that in his opinion the CP channel was not a narrow channel was the 1st appellant. The Judge held that his view to that effect was unreasonable. I agree. I will however return to his position when considering the application of the proviso in his case. 181. Reliance was also placed upon the fact that the prosecution did not initially allege that this was a narrow channel case. That is true. The prosecution’s first case did not refer to the narrow channel rule at all. On the contrary it asserted that it was a head on case, presumably under rule 14, under which vessels meeting on reciprocal or nearly reciprocal courses so as to involve risk of collision must alter course to starboard. No proper thought could have been given to the case before this charge was drafted. Rule 14(b) expressly provides that such a situation shall be deemed to exist when a vessel sees the other vessel ahead or nearly ahead and by night she can see the masthead lights in a line or almost in a line and/or both side lights. In the present case there was no time when the vessels could see both the other’s side lights. As the plot in Annex 2 shows clearly, save perhaps at the last, the position throughout (assuming of course that they were looking) was that the N67 could see the green starboard light of the YH and the YH could see the red port light of the N67. They were crossing vessels not end on vessels. No competent mariner could have thought otherwise. Discussion 182. In my opinion the Judge was correct to hold that the CP channel was a narrow channel, essentially for the reasons she gave. I should add that I would reject the submission that the Judge employed a two stage test by first considering the physical criteria and then considering how seamen navigate the channel as a separate consideration only if the decision cannot be made on the basis of the physical criteria. There is some force in this point based on para 361 of the judgment. However, the judge held that the CP channel was a narrow channel based on all these considerations, but primarily on the physical characteristics, including of course the buoys. Moreover the reason why seamen treat it as a narrow channel is also, as I see it, based on those same characteristics. In any event the Judge held at para 387 that the channel was a narrow channel on the grounds, both of it being physically narrow geographically and bathymetrically, and of the manner that seamen in fact navigate in the channel. For the same reasons the Court of Appeal were correct to uphold her decision. 183. Those conclusions are consistent with the authorities as I read them. As stated above, the issue for decision in this case is whether a buoyed channel, which is accepted to be a channel, is a narrow channel. The authorities seem to me to support the proposition that the question whether it is or not is a question of fact. The answer depends upon considering a number of different factors. In particular it involves a detailed examination of the locus in quo. It thus includes a consideration of the nature of the channel, including its buoys (if as here it is a buoyed channel), the geography, topology and bathymetry of the area, the width of the channel, the size and characteristics of the vessels that use it and the manner in which seamen in fact navigate within the channel. 184. In order to be taken into account in what has been called a multi-factorial exercise, as indicated in para 11 above, the relevant information must be available to the pilots and masters so that they are all able to judge the true position based on the same information. Thus the relevant charts, sailing directions and local regulations must be consulted. It must be possible to reach a conclusion as to whether a particular area is a narrow channel from those sources. 185. There is no universal definition of a narrow channel. As para 6-228 of the 13th edition of Marsden on Collisions at Sea says, there is considerable difficulty in defining a narrow channel and a definition was deliberately avoided by IMO in 1973. It does not, however, follow from this that in the vast majority of cases it is not possible to recognize a narrow channel. Paras 6-228 and 6-229 give a large number of examples of areas which have and have not been held to be narrow channels. It is of little, if any, assistance to look at the cases because they turn on their own facts and very few of them contain statements of principle. In any event it is self-evident that no mariner has time to consult Marsden, let alone the cases, in deciding whether a particular area is a narrow channel. 186. Many of the cases were decided in England by Willmer J, later Willmer LJ and even later Sir Gordon Willmer, in the 1940s, 1950s, 1960s and 1970s: see for example The Crackshot (1948-49) 82 Ll L Rep 594, The Jaroslaw Dabrowski [1952] 2 Lloyd’s Rep 20 at 26, The Anna Salen [1954] 1 Lloyd’s Rep 475 at 487, The Sedgepool [1956] 2 Lloyd’s Rep 668 at 678 and The Koningin Juliana [1974] 2 Lloyd’s Rep 353 at 362. He regularly said that it was a question of fact in every case. 187. In The Jaroslaw Dabrowski Willmer J said that he had derived a certain amount of assistance from the decision of Langton J in The Varmdo [1940] P 15, where the judge had dealt with the issue of narrow channel as partly being one of evidence as to how seamen in fact navigate in the locality and partly as one for the advice of the Elder Brethren, which he said really amounted to the same thing. He said almost exactly the same in The Anna Salen and in The Sedgepool, where he said that he based his conclusion that the narrow channel rule was applicable partly on the basis of the evidence he had heard in the case and partly on the advice of the Elder Brethren. He added: “As I understand the law, one of the determining factors in deciding whether a given area is or is not within the ‘narrow channel’ rule is the way in which seamen in fact regard it and behave in it. I am advised, and it is in accordance with the evidence, that those navigating in this area in fact treat the channel from the Gedney Buoy upwards as a narrow channel and I so find.” 188. Those statements of principle were criticized on the basis that it is unsatisfactory to rely upon the practice of seamen because relative newcomers to a port might not know what that practice was. There is some theoretical force in that criticism but it seems to me to be largely a lawyer’s point because the advice of the Elder Brethren, who advise the judge on nautical matters in collision actions in England, will be based on the kind of assessment to which I have referred, namely the physical and geographical conditions and the information on the chart and in other publications. So, for example, in The Anna Salen Willmer J said at page 487 that the Elder Brethren advised him that it would be impossible to define what was the channel for the purpose of the narrow channel rule. On the facts here there is no such difficulty because of the buoys and there is I think no doubt what advice the Elder Brethren would have given. 189. It was submitted that the approach in the cases and adopted by the Judge and indeed in this judgment is far from satisfactory and should be reformulated or restated. It was submitted that the essence of any test for mariners should be objective certainty and that a mariner who navigates a stretch of water for the first or fiftieth time should be able to determine the application of rule 9 from objective criteria, which must in not only any geographical or bathymetric features but also the official designation of the channel by the relevant regulatory authorities. I agree. 190. However, it was further submitted that those criteria must include the absence of such an official designation (my emphasis). It was correctly submitted that MARDEP had not in fact designated the channel as a narrow channel. In para 372 the Judge referred to an assessment in 2004 of a proposal to declare the area a fairway. Based on evidence from Captain Loynd to the effect that MARDEP’s response to the proposal was that because the number of deep draught vessels using the deep water route was diminishing they did not feel it justified the expense and they intended to continue the system as it was. At para 374 the Judge said: “It appears that the area of water has not been officially declared on the chart as a channel or fairway due to the cost factor to the Hong Kong Government having to dredge and maintain it if they took responsibility for it. The fact that this deep water channel is not gazetted is of no relevance.” 191. That paragraph was criticized on behalf of the 1st appellant. However, I see no ground for criticism, save that the CP channel was officially declared on the chart to be a channel. It was not declared as a narrow channel. I agree with the Judge that the fact the deep water channel was not gazetted as a narrow channel was of no relevance. As indicated above, there are many narrow channels around the world which are not declared or designated as narrow channels. In cases in which they are so declared or designated, the channel would undoubtedly be a narrow channel, as the Judge recognized, but the absence of gazetting is irrelevant, unless a particular area has been formally noted on the chart or otherwise publicly stated as not being a narrow channel, which was not the case here. Whether the channel is a narrow channel depends upon all the circumstances of the case as explained above. 192. It was submitted that, if in doubt a mariner such as the 1st appellant can contact MARDEP and that, if the 1st appellant had contacted the Director or other appropriate official at MARDEP he would have been told that MARDEP did not treat the CP channel as a narrow channel. It was submitted that in such circumstances the 1st appellant would have been bound, or at least entitled, to proceed on the basis that it was not a narrow channel. Although the judge did not admit it in evidence (on the ground that it was hearsay), we know from a letter dated 29 June 2009 that MARDEP would have replied that the CP buoys demarcate a deep water route and would have referred to the Pilot Book quoted above. They would have added that, as most vessels can navigate outside the above buoys, the area is not considered as a narrow channel. That opinion is irrelevant because it was not disseminated either to mariners generally or to the 1st appellant, but more importantly, as stated above, it is plainly wrong. A moment’s thought would lead to the conclusion, first that, as is common ground, the CP channel is a channel and, secondly, that it is a narrow channel within which vessels must pass port to port. That is so regardless of how vessels navigate outside the channel. 193. Reliance was placed on a number of articles, notably by Professor Craig H Allen, who has written widely and has advanced some criticism of the present COLREGS: see eg Taking Narrow Channel Collision Prevention Seriously to More Effectively Manage Marine Transportation System Risk, Journal of Maritime Law & Commerce, Vol 41, 1 January 2010. His article provides much food for thought and makes recommendations for the future. However, it does not seem to me to be inconsistent with any of the views I have expressed as to the correct approach to what is a narrow channel as things stand at present. It notes at page 7 that the principal factors that distinguish narrow channels and fairways from other waterways are their physical characteristics and usage. The problem is to deal with ships that pass frequently at close quarters. Professor Allen further notes at page 13 that pre-designation of narrow channels or fairways, where rule 9 applies, is the exception not the rule. He stresses the importance of certainty and makes an impressive case for the formal designation of water to which rule 9 applies in order to avoid confusion: see eg pages 34 ff. However, he recognizes that, given their international nature and the importance of obtaining wide international agreement to any changes, the COLREGS are unlikely to be altered in the near future. His plea is for the most part directed to the particular problems which arise in some of the great rivers in the United States. He would like to see the authorities on those rivers introduce both a programme of designation and more guidance. It is of interest to note that he concludes his article with the plea that any such guidance should caution mariners that if there is any doubt whether a waterway is a narrow channel or fairway under rule 9 they should assume that it is. 194. I see the force of the general points made by Professor Allen but I do not see how this Court can for the first time lay down principles of navigation different from those which have been accepted to date. It must approach them as mariners would do. For these reasons I would reject the submission that, in the absence of a published designation or declaration that a channel is a narrow channel, the channel should either be conclusively treated as not being a narrow channel or there should be a strong presumption to that effect. 195. Some reliance was placed upon The Koningin Juliana [1973] 2 Lloyd’s Rep 308 before Brandon J and in the Court of Appeal supra. This case was said to support the proposition that there cannot be a narrow channel within an area where other vessels navigate outside it. It was not, however, considering that question, but a different question, which was a question of fact. It was held that, on the facts, the narrow channel comprised the whole area of navigable water. Within that area was a dredged channel or fairway. The issue was what was meant by “the fair way or mid-channel” under the then COLREGS, rule 25(a) of which provided that a vessel navigating in a narrow channel must keep to the starboard side of “the fairway or mid-channel”. It was held that on the facts the duty was to keep to the starboard side of the dredged fairway and not of the wider narrow channel. See per Brandon J at page 313-4 and Willmer LJ at Page 362, where he said that in the comparatively rare case of a channel which does not include a defined fairway the vessels must keep to the starboard side of mid-channel. 196. As already indicated, the Judge was in my opinion entitled to accept the evidence of Captain Third that there are numerous ports in Europe where vessels navigate in water outside narrow channels. It would to my mind be astonishing if it were otherwise. There are cases in the materials before the Court where that was the position, namely The Gustafsberg [1905] P 10, The La Bretagne (1910) 179 F, 286, The Toluca [1981] 2 Lloyd’s Rep 548 and The Devotion and The Polydinamos [1993] 2 Lloyd’s Rep 464. In the Gustafsberg, for example, it was held that a buoyed channel was a narrow channel notwithstanding that one-third of the traffic to the north of the channel navigated outside it. However, these are no more than examples. I am unaware of a case in which it was argued that a narrow channel can only exist where it takes up the whole of the available water. In my opinion it is unarguable. 197. I note in passing that some reliance was placed upon the decision of Merriman P in The Kirsten Skou (1949-50) 83 Ll L Rep 279 where a gap between two wreck buoys was held not to be a narrow channel. As I read the judgment, the President held that it was not a channel at all, let alone a narrow channel, whereas here it is common ground that the CP channel is a channel and the only question is whether it is a narrow channel. The case contains no statement of principle which might support the 1st appellant’s case. 198. For these reasons I would hold that the Judge and the Court of Appeal were correct to hold that the CP channel is a narrow channel. Indeed, in my opinion there is no arguable case to the contrary. It was not reasonable for any seaman to hold the contrary view. 199. It was submitted on behalf of the 2nd appellant that the answer to the question certified as the second point of law, namely what are the legal principles for determining whether a particular channel is a narrow channel to which rule 9 applies is (a) that it is a question of fact whether a particular channel is a narrow channel and (b) a channel is not precluded from being a narrow channel simply because it lies within a greater expanse of navigable water to which rule 9 does not apply. I would accept that submission but would add two points. The first is that the question of fact involves a consideration of all the various factors identified above as touching upon the issue. The second is that, while an official designation of a narrow channel publicized to mariners would be conclusive, the absence of such a designation is irrelevant unless a particular area is formally noted on the chart or otherwise publicly stated as not being a narrow channel. The appeal of the 1st appellant Duties of the N67 and the 1st appellant 200. It is not in dispute that the vessels were aware of each other from about 2108 at the latest. It follows from the conclusion that the N67 was navigating in a narrow channel that it was her duty and that of her master who was navigating her to keep as close to the starboard side of the channel as was safe and practicable. It was thus his duty, if he wished to remain in the channel, to alter course to starboard at about 2109 in order to navigate close to the line between the Siu Mo To NE mark and buoy CP2. That was his duty regardless of the position of the outbound vessels, the YH and the BERLIOZ. 201. He was not bound by the crossing rule but by the narrow channel rule. At her para 401 the Judge quoted this passage from the judgment of Willmer J in The Empire Brent (1948) 81 Ll L Rep 306 at 312: “As I understand the principles which apply in narrow channels. It has been laid down for many, many, years that although the crossing rule does from time to time have to be applied in narrow channels (when for instance, a vessel which is crossing the channel has to act in relation to a vessel which is proceeding up or down the channel) nevertheless when vessels are approaching each other, navigating respectively up and down the channel, it is Art.25 of the Collision Regulations [the present rule 9(a)] which applies exclusively. There is no room in such a situation for applying the provisions of the crossing rule at the same time as the provisions of the narrow channel rule, because the requirements under the rules are different. I have no hesitation in saying that as between a vessel approaching each other in that way in a narrow channel like the Mersey, the narrow channel rule, and the narrow channel rule only is the rule that has to be applied” It was not I think suggested that the crossing rules applied to the N67 if she was navigating in a narrow channel. In any event the principles stated by Willmer J are plainly correct. 202. The Judge so held at paras 124 to 132. She was very critical of the 1st appellant’s navigation. She held at para 125 that vessels meeting each other in opposite directions at or near the entrance to the channel at buoys CP1 and CP2 should expect to pass port to port. As to the N67 she said this at paras 126 and 127: “126. A vessel in the buoyed channel seeing a vessel approaching the deep buoyed channel should expect that vessel will be entering the buoyed channel at buoys CP1 and CP2, particularly if the other vessel is large (YH) and is followed by another large vessel (Berlioz). 127. At the outset D1 should not have had any doubt that YH would be entering the buoyed channel between the gates of CP1 and CP2. It was unreasonable that D1 believed that YH would have gone north of CP1 buoy then entered the buoyed channel between CP1 and CP3 buoys. Once D1 knew that YH was entering the buoyed channel between CP1 and CP2 buoys, it was wholly unreasonable and erroneous for D1 to have expected a starboard to starboard passing, even on his flawed belief that this was a crossing situation.” I agree. 203. At para 130 the Judge held that the N67 was not navigating on the starboard side of the channel as a narrow channel. She further expressly held that the 1st appellant was unreasonable in not believing that this is a narrow channel. As the plots show, the N67 took no action until less than a minute before the collision. During the whole of the time until then the vessels were closing at about 23 knots, or 2,300 feet a minute. The principal cause of the collision was the failure of the N67 to alter course to starboard at about 2109 or soon thereafter in order to make it clear that she expected to pass port to port at a safe distance when she was close to the southern side of the channel. The Judge held at para 169 that she should have altered about 12º to starboard. 204. There can be no doubt that in failing to comply with the narrow channel rule the 1st appellant caused his vessel and the lives of the crew to be endangered. The purpose of the COLREGS is to ensure, so far as possible, that vessels will pass safely without risk of collision. If the N67 had altered to starboard to proceed on her starboard side of the channel there can be no doubt that the vessels would have passed safely port to port within the channel in the vicinity of buoys CP1 and CP2. 205. The judge made further findings of fault against the 1st appellant. She found that he failed to keep a good lookout by radar, visually and orally. He was under a duty to keep a good lookout under rule 5 of the COLREGS, which provides: “Every vessel shall at all times maintain a proper look-out by sight and hearing as well as by all available means appropriate in the prevailing circumstances and conditions so as to make a full appraisal of the situation and of the risk of collision.” The Judge held that the 1st appellant ought to have appreciated that the YH and the BERLIOZ were shaping to enter the channel. He could not reasonably have thought that the YH would alter course to starboard and leave the CP 1 buoy to port in the ordinary course of navigation. Equally he could not reasonably have thought that the YH would cross ahead and pass his vessel starboard to starboard. He was not keeping a radar lookout at all from about 21.11. The YH sounded one short blast on her whistle at 21.12.32 in order to indicate that she was altering her course to starboard. The 1st appellant did not hear it. She sounded two signals of five short blasts at 21.12.54 and 21.12.57. Such a signal is sounded to mean (under rule 34(b) of the COLREGS) that the YH failed to understand N67’s intentions or that she was in doubt whether sufficient action was being taken to avoid a collision. The 1st appellant did not hear either signal. It is not in dispute that they were sounded because they can be heard on the VDR recording. The Judge held at para 137 that it was shocking and unacceptable that the 1st appellant was, as she put it, unable to hear these audible whistle blasts when the vessels were at such close range. In short, on the findings of the Judge, the lookout kept by the 1st appellant was deplorable. The Judge summarized her conclusions in this respect in para 173 by holding that the 1st appellant incorrectly, erroneously and unreasonably believed that the YH was going to cross the N67’s bow and pass starboard to starboard. As a result he took no action until he went hard to port at the last. 206. Throughout this period the passing distance between the vessels was so small as to be unsafe. The Judge held at para 142 that from 2109 the CPA was always less than 100 metres, which was developing into a grave and real risk as the vessels approached. The Judge described the respective courses of the vessels in her paras 147 and 148. As can be seen on the plot at Annex 2, as they approached each other the N67 could see the green light of the YH and the YH could see the red light of the N67. As shown on Annexes 2 and 3, the N67 was on a steady course of between 090º and 092º to port of mid-channel from 2109 until about 21.12.50, when she went to port. The helm orders given on YH were 257º at 21.07.26, 260º at 21.08.32, 261º at 21.11.12 and 263º at 21.11.37, followed by starboard 10º at 21.12.25, starboard 20º at 21.12.32 and finally hard to starboard at 21.12.43. Until 21.12.25 the course alterations were not collision avoidance measures but were simply small alterations in order to take up a down-channel course by the time she reached the channel. However, they had the effect of reducing the CPA if the N67 took no action. The helm orders of 10º to starboard and 20º to starboard followed by hard to starboard were measures taken in an attempt to avoid collision. Neither vessel reduced speed. 207. I will return below to the faults found against the YH and hence the 2nd appellant. As to the 1st appellant, the Judge recognized that the hard to port order was given too late but blamed him for giving it. However, as I see it, whether or not the 1st appellant was to blame for going to port at the last, the critical case established against him was his unreasonable failure to appreciate that the CP channel was a narrow channel, his insistence on maintaining his course until the last and his consequent failure to take starboard helm action at any stage. I should add that the Judge held that the 1st appellant was also in breach of rules 7 and 8 of COLREGS, which are set out in Annex 1. He failed to use all available means to determine if risk of collision existed and failed to take positive action in ample time with the due regard to the observance of good seamanship. These faults were all bound up with his essential fault, which was that he failed to alter course to starboard at any stage pursuant to his duty to keep to the starboard side of the channel under rule 9. 208. In order to determine the appeal of the 1st appellant it is not necessary to determine any of the other certified issues of law because, apart from issue 3, which affects the navigation of the YH and to which I will return, the other issues, with the possible exception of issues 5 and 6, are relevant only if the CP channel is not a narrow channel. In these circumstances I will mention only issues 4, 5 and 6. 209. Issue 4 asks whether there is a rule of good seamanship which requires a vessel navigating in an IALA buoyed channel which is not a narrow channel to keep to the starboard side of the channel. The Judge answered this question in the affirmative on the basis of the evidence of Captain Third and Captain Simpson. Given my conclusion that the Judge and the Court of Appeal were correct to hold that the CP channel is a narrow channel, it is not strictly necessary to express a view on this point but I will only say that their evidence and the Judge’s conclusion seem to me to make very good sense. 210. Issues 5 and 6 are not relevant. There is no arguable possibility that the N67 had a right of way over vessels entering the channel. It is correctly recognized by the 1st appellant in his case that issue 5 is irrelevant. Equally nobody suggested that the result of these appeals could be affected by the answer to the question posed by issue 6. The appeal of the 1st appellant – the proviso 211. Mr Justice Ribeiro PJ has carried out a detailed analysis of the application of mens rea to the offence or offences created by section 72 of the Shipping and Port Control Ordinance (Cap 313), with which I entirely agree. On the basis of that analysis he has concluded that in the case of each appellant the appeal must succeed unless the proviso applies. The case of each appellant must be considered separately. I agree with Mr Justice Ribeiro PJ that, under the proviso, the question is whether, if the Judge had applied the correct test as now formulated by this Court, she would inevitably have convicted the appellant. Mr Justice Ribeiro PJ summarises his position at para 122 as follows : (a) Is the appellant able to point to evidence or findings made by the Judge sufficient to raise at least a reasonable doubt whether he acted or omitted to act in the honest belief on reasonable grounds that his conduct was not such as to cause danger to the safety of others? (b) If such evidence exists, on the evidence and the Judge’s findings, has the prosecution established beyond reasonable doubt that the defendant acted or omitted to act either without honestly holding such belief or, that his belief, although honestly held, was not based on reasonable grounds? I am content to assume that the 1st appellant can satisfy sub para (a). The question is therefore whether the prosecution has established beyond reasonable doubt that the 1st appellant acted or omitted to act, either without holding the belief that his conduct was not such as to cause danger to the safety of others, or that his belief, although honestly held, was not based on reasonable grounds. 212. I have already expressed the view that there can be no doubt that the 1st appellant’s breach of duty in failing to navigate on the starboard side of the CP channel in breach of rule 9 endangered the N67 and the lives of those on board. It thus appears to me that the question to be asked boils down to this. Have the prosecution established beyond reasonable doubt that the belief of the 1st appellant that the CP channel was not a narrow channel was a belief which was not held on reasonable grounds? The Judge held that he believed that the CP channel was not a narrow channel and that it was for that reason that he did not alter course to starboard as he should have done. 213. It was submitted on behalf of the prosecution that, in the course her judgment, the Judge considered this very question. It was correctly accepted that the Judge was not considering the reasonableness of the 1st appellant’s belief for the purposes of applying the principles of mens rea which Mr Justice Ribeiro PJ has explained apply to a prosecution under section 72. It was submitted on behalf of the 1st appellant that, that being the case, it would be wrong in principle, and in any event wrong on the facts, for this Court to apply the proviso. 214. It appears to me that the Court must consider with care the findings of the Judge in this regard. I do not think that the mere fact that the Judge was considering the subjective belief of the 1st appellant and whether he had reasonable grounds for that belief for one purpose should lead, as a matter of law, to the conclusion that her conclusions are irrelevant for a different purpose. If the question is the same for both purposes and there is no flaw in the Judge’s reasoning, the Court should accept it in both cases. 215. What then were the questions considered by the Judge? Between paras 369 and 386 the Judge considered the question whether the CP channel is a narrow channel. She concluded at para 386 that the overwhelming evidence was that vessels heading in opposite directions would keep to the starboard side of the buoyed channel or just outside the channel north of CP1 going west and that vessels going east would keep to the starboard side of the channel. I have considered that question in some detail between paras 151 and 197 above and have already expressed my agreement with her conclusion at para 387 that the buoyed channel was a narrow channel on the grounds both of it being physically narrow geographically and bathymetrically and of the manner that seamen in fact navigate in the channel. In doing so I have referred to most of the findings made by the Judge: see in particular paras 158 to 182. I have reached the same conclusion as the Judge for essentially the same reasons. Indeed, as stated at para 198, I have expressed my own view that no reasonable mariner could consider that the CP channel is not a narrow channel. I will not of course repeat my reasoning in this part of the judgment. 216. At paras 388 to 398 the Judge considered the 1st appellant’s evidence that the narrow channel does not extend beyond the buoyed channel so that, if the CP channel is a narrow channel, it does not extend to the east of buoys CP1 and CP2. His evidence was that it followed that, on the facts, the N67 was the only vessel in the channel and that it was permissible for her to proceed down the middle of the N67, the vessels were crossing vessels and, again, that his duty was to maintain his course and speed. His evidence was that the vessel outside the channel should act cautiously and that the YH unreasonably entered the channel and hampered the navigation of the N67 which was in the channel. She should have stayed outside the channel until the N67 passed buoys CP1 and CP2. The Judge rejected that evidence. 217. Having referred to The Empire Brent supra, which on its face applies to vessels in the channel, the Judge said at para 403, basing herself on the evidence of Captain Simpson, that vessels approaching the channel and vessels within it must acknowledge that there must be some continuity so that rule 9 applied at the entrance to the channel in order to avoid chaos and ambiguity. She referred to the decision of Hewson J in The Canberra Star [1962] 1 Lloyd’s Rep 24, where he said that, if a vessel is entering a channel to proceed along it in circumstances where there is another vessel already in the channel the crossing rule does not apply. He said this at page 28: “ …. where a vessel “A”, proceeding down river outside the channel, intending to enter it, sees an upcoming vessel “B” approaching her in the next reach, bearing on her starboard side, on a main channel course which, if followed into the reach in which A is navigating, will or should enable the two vessels to pass safely port to port by reason of the fact that “B” should keep to her starboard side of the channel, the crossing rule does not in my view apply…it does not appear to me that the vessel already in the channel has a complete right of way and she must not hog the channel regardless of the reasonable aspirations of the other ship.” 218. That seems good sense to me. At paras 406 and 407 the Judge held that the N67 should not have assumed that the YH (and the BERLIOZ) would leave the channel but should have expected them to enter the channel on their starboard side of the channel close to buoy CP1. She should therefore have altered to starboard on to her starboard side of the channel in order to facilitate that manoeuvre. At paras 408 to 414 the Judge gave her reasons for criticizing the N67 for hogging the centre of the channel. All those conclusions were, in my judgment, justified. 219. The Judge then turned to the case of each individual defendant. At paras 416 and 417 she set out the 1st appellant’s experience, which was considerable. She continued in paras 419 to 423 as follows: “419. D1 did not consider or believe the buoyed channel was a narrow channel. D1 never considered the buoyed channel a narrow channel, where Rule 9 applies. He did not think it is a narrow channel because all vessels other than deep draught vessels can safely proceed outside the channel. He knew that deep draught vessels drawing over 16 metres would invariably use the route between the buoys when transiting in either direction. D1 noticed with personal experience how vessels navigate through the buoyed channel. 420. There was nothing in any publication saying that it was a narrow channel. He had never received or heard any corrective instructions from MARDEP to any vessel in this channel to keep to the starboard side of the channel or alter course to starboard. He had on occasions been told by Mardep to alter course to port to leave the channel by going north of the buoys when vessels restricted by their draught were using the channel. 421. Otherwise apart from the deep draught vessels always using the buoyed channel, he had seen vessels both going east and west going outside of the buoys. 422. It was his observation that west bound vessels would go to the north of CP1 buoy, rarely entering the buoyed channel between CP1 and CP2. Depending on their draught those vessels would then go north of CP3 or north of CP1 and then south of CP3 into the buoyed channel. Vessels heading east after they passed the restricted area remained in the middle of the channel or close to the north rather than altering to the south. 423. He had seen ships passing each other port to port and starboard to starboard, occasionally at distances of less than 100 metres in the channel. He considered the minimum safe distance for passing another vessel in these waters as being one cable or 185 metres, but it could be 100 metres east of Ma Wan.” 220. The Judge then gave a detailed account of his evidence, including (at para 444) his belief that the YH would go to the north of buoy CP1. In the next section of the judgment the Judge first considered whether it was reasonable for the 1st appellant to think that the CP channel was not a narrow channel. As I see it, that is to ask the same question as to ask whether there were reasonable grounds for believing that it was not a narrow channel, which is of course the critical question for the purposes of the proviso. The Judge expressed her view concisely at para 451: “451. It was unreasonable for D1 to believe that this was not a narrow channel It was unreasonable of D1 to believe that the buoyed channel is not a narrow channel where Rule 9 applied. He had knowledge of the deep draught buoyed channel of CP1- CP5, its depth and geography. He had navigated through this channel 20-30 times. He would have been aware of the manner seaman navigated the area. The fact that some seaman may have navigated outside the buoyed channel, or that there was no publication that it was a narrow channel does mean that it is not one.” The judge said the same in para 467. 221. Between paras 452 and 467 the Judge considered whether it was unreasonable for the 1st appellant to believe that the crossing rule applied and held that it was not. As I see it, if it was unreasonable for him to believe that the narrow channel rule did not apply, it was unreasonable of him to think that the crossing rule applied to the N67. As already stated, the narrow channel rule applies to all ships and, where the rule applies, there can be no reasonable basis for concluding that the stand on rule applies. 222. For the reasons I have already given, I have reached the clear view that it was unreasonable for the 1st appellant to believe that the narrow channel rule did not apply. The indicia are all one way. It is true that some evidence was given to the contrary. However I have considered that in detail. It was either given by experts who were biased or was given by those with no rational basis upon which to reach that conclusion. In particular the view expressed by Dr Li and others that there cannot be a narrow channel where vessels can navigate outside the channel is not based on any authority and, to my mind, is irrational. The whole point of a channel marked by buoys in which there are port and starboard hand buoys is that vessels inside the channel proceeding along it will pass port to port. Where, for example, there is a narrow dredged channel to enable deep-draughted vessels to proceed through it, again the whole point of such a channel is to ensure that vessels pass port to port. The fact, as may often be the case, that smaller vessels can navigate outside the channel is surely wholly irrelevant to the question whether the channel is a channel in the first example or a narrow channel in the second example. 223. It is true that the judge does not explain why she asked the question whether the 1st appellant reasonably believed that the CP channel was not a narrow channel. The most likely explanation seems to me to be that she thought it was relevant to the defence of reasonable excuse under section 72 or possibly to the defence of reasonable precautions under section 10(3), which she thought were in essence the same defence. However, whatever the reason, the fact is that the judge considered with great care the reasonableness of the 1st appellant’s belief. Moreover she arrived at what in my opinion were correct conclusions, which were of course arrived at by applying the criminal standard of proof, namely beyond reasonable doubt. 224. Counsel were not able to suggest any distinction between the issue which the Judge considered and the question which is relevant to the application of the proviso. It was not convincingly suggested that the trial might have taken a different course if the correct mens rea had been identified from the outset. I am satisfied, for the reasons given by the Judge, that the prosecution has established beyond reasonable doubt that the 1st appellant had no reasonable grounds for his belief that the CP channel was not a narrow channel and that the crossing rule applied. It follows that he had no reasonable grounds for believing that he was navigating his vessel safely and without danger to her crew. In these circumstances, if the Judge had directed herself correctly as to mens rea she would inevitably have convicted the 1st appellant. For these reasons I would dismiss the 1st appellant’s appeal against conviction. The appeal of the 2nd appellant Duties of the YH and of the 2nd appellant 225. I have already concluded that the CP channel is a narrow channel. I have also expressed the view in para 217 that vessels approaching a narrow channel and intending to proceed along it are not bound by the crossing rule but must enter the channel and, as they do so, keep as near to the starboard side as is safe and practicable in accordance with rule 9. It seems to me to follow that a vessel shaping to enter the channel should, as a matter of good seamanship, navigate in such a manner that, when she reaches the channel, she is on the starboard side of the channel in accordance with rule 9. The Judge in effect so held in paras 400 to 407 and was correct to do so. This approach is consistent with that espoused by the Court of Appeal in England in The Kaiser Wilhelm Der Grosse [1907] P 259 at 264, where Lord Alverstone CJ said: The duty of the Orinoco was undoubtedly to get well over, as far as she could safely get, to the western side of the entrance, so as to enter fairly close to the side of the channel on which is Fort Chavagnac.” As I read the report, the reference to the entrance was a reference to the entrance to a narrow channel. I would so answer the question raised by issue 3 if it were necessary to do so. 226. As is plain from the plots in Annexes 1 and 2, the YH in fact navigated in such a way as to shape to enter the channel in a correct position on her starboard side of the channel near buoy CP1. She was under a duty to keep a good lookout and thus to watch the approach of the N67 carefully. Other things being equal, as a vessel drawing 12 metres, she was entitled to navigate in the channel and would be expected to do so. The Judge correctly so held. The 2nd appellant was aware of the N67 from about 2108. I have set out the courses steered by the YH at para 66 above. The Judge analysed the thought processes of the 2nd appellant in some detail between paras 603 and 608. In addition to the other steps taken on board the YH referred to above, she gave two long flashes on her Aldis light at about 2109 in order to alert the N67, although they were not seen by her. The 2nd appellant recognized that, unless one of the vessels altered course, there was going to be a collision or a near miss. 227. The 2nd appellant assumed, he said confidently, that after passing the restricted area, the N67 would move to starboard, although he also thought that it was a possibility that she would alter course to port out of the channel The Judge thought that to be unreasonable: see para 615. However, the Judge did not hold that the YH was at fault for not leaving the channel. The 2nd appellant and those on the bridge of the YH still thought that the N67 would alter to starboard. At 21.11.04 the 2nd appellant is recorded as saying on the bridge: “he knows that I would turn for sure? He knows that I would turn for sure”. The 2nd appellant explained that he was thinking that he would enter the buoyed channel and then turn to starboard to take up an up-channel course. That would be, as he put it, a large turn to starboard and would show the N67 a red light. The Judge held at para 624 that at 21.11.05 the vessels were 1.07 miles apart. 228. Shortly after giving a helm order of 261º at 21.11.12, at 21.11.20 the 2nd appellant is recorded as saying that the N67 “doesn’t need to move right along the fairway. I personally don’t see the need”. He called VTC to tell them to tell the N67 to pass port to port. He gave the helm order of 263º at 21.11.37. There was one communication with MARDEP which was of no effect. He realized that he had a serious situation in front of him and ordered starboard 10º at 21.12.25 and starboard 20º at 21.12.32 giving one short blast on the whistle. At 21.12.43 he ordered hard to starboard and at about the same time the co-pilot sounded five short blasts on the whistle. Just over a minute later he sounded another five short blasts. Finally, at about 21.13.06 he saw both of N67’s side lights and then the red light disappeared. He concluded that N67 intended to cross his bow and ordered port 10º and then amidships at 21.13.26 in an attempt to minimize the damage. The collision occurred almost immediately afterwards and he ordered stop engines. 229. As the Judge held at para 631, the 2nd appellant accepted that he could have turned a little earlier at about 21.11.00 in order to pass between the N67 and the CP1 buoy. He also admitted that he should have ordered at least starboard 20º by 21.11.40 in order to show the N67 a red light. At paras 632 to 636 the Judge set out part of the evidence of Captain Third and Captain Simpson to the effect that by C-2 it was too late to go north of buoy CP1 and why going south of the buoy at C-2 was the preferred option. 230. The Judge analysed the 2nd appellant’s evidence and the action he should have taken in very great detail at paras 637 to 698. The Judge put the 2nd appellant’s failure to taken earlier action down to his failure to keep a proper lookout. As the Judge had put it at para 638, he did not appreciate the close CPA, he did not appreciate the close quarters he was getting himself into and, even though he was using his binoculars, he wholly misjudged what he was seeing. It was as a result that no avoiding action was taken until 21.12.25. If he had been keeping a proper lookout he would have taken action earlier to avoid a collision. 231. The Judge held at para 673 that the YH (and indeed the N67) should have sounded a signal of five short blasts at about C-3, which was 21.10.44. That failure was not however causative of the collision because the N67 did not hear any of her whistle signals. More importantly, the Judge held that the YH should have altered course to starboard earlier than she did. She held at para 685, under the heading “Finding” that, if the N67 was in the 2nd appellant’s view not behaving properly, the only sensible course was to keep well clear. He should have navigated on what he actually saw and not what he expected. The Judge concluded at para 687 that the YH should have turned to starboard after the first short blast, which was sounded at 21.12.32. She held that, once it was clear that the N67 was not responding to that signal, the YH should have made a larger alteration to starboard. The failure of the N67 to alter to starboard at that stage, as the Judge put it, clearly rebutted the assumption made on the YH that the N67 would obey the rules. The Judge held at para 688 that the actions taken to avoid collision by the 2nd appellant were made in a sort of panic. They were not made in ample time and were not alterations large enough to be readily apparent. 232. The Judge summarized her findings in paras 692 and 693: “692. D3 had time to think. His errors of navigation in leaving it so late were serious. His errors of believing that he was passing red to red and much further away from N67 were grave. These were not reasonable errors. D3’s errors of judgment was unreasonable. D3 did not have a reasonable excuse nor did D3 take all reasonable precautions to prevent the contravention of the rules. 693. He did not take all reasonable precautions to prevent the contravention and there was no reasonable excuse for his failure.” 233. The Judge summarized the position in her paras 697 and 698: “697. Determination on D3 D3 failed to keep a proper lookout and monitor N67 closely especially after 21:08:30 when it passed the restricted area. The VDR transcript shows his belated appreciation of the developing situation. D3 made a late use of the VHF to enquire about the particulars and identity of N67. At 21:12 if D3 was attempting to arrange a red to red passing it was far too late. D3 or D4 should have given N67 five blasts of the whistle to indicate doubt as to the intention of N67 by approximately 21:10:30 or 21:10:45 not at 21:12:45 when they did. D3 should have ordered his starboard helm of at least starboard 20 by 21:11:40 at least two minutes before the collision to show N67 a red light. D3 was a minute late in doing so. D3 should have navigated much closer to CP1 buoy of about 100 metres then he did. As D3’s collision avoidance action was taken so late it virtually made no difference to the course that YH was taking. What D3 did only turned YH about 50 metres away from where YH was going. Both D2 and D4 should have seen what was happening and should have been aware of D3’s inaction and have alerted D3 much earlier to the risk of collision about which D3 was doing nothing. 698. I found that D3 had breached rule 5 and 8 and endangered the safety of the crew of N67. He did not take reasonable precautions to prevent the contravention and did not have a reasonable excuse for his failure in doing so.” The appeal of the 2nd appellant – the proviso 234. As is apparent from those paras, the Judge was making those particular findings in the context of the defences to section 72 and section 10(3). The question for determination under the proviso is whether the prosecution can establish beyond reasonable doubt, either that the 2nd appellant acted or omitted to act either without holding the belief that his conduct was not such as to cause danger to the safety of others or that his belief, although honestly held, was not based on reasonable grounds. 235. As explained above the only causative omission to act proved against the 2nd appellant was a failure to keep a good lookout and to take substantial action to avoid collision about a minute earlier than he did. Have the prosecution established beyond reasonable doubt that the belief of the 2nd appellant that it was safe to wait so long was not held on reasonable grounds? I have reached the conclusion that they have not. Although the Judge is critical of the 2nd appellant’s lookout and failure to take action, sometimes in quite strong terms, his position was quite different from that of the 1st appellant. The 1st appellant was responsible for creating the risk of collision. The problem facing the YH and her pilot, the 2nd appellant, was how to react. He naturally expected the N67 to alter course to starboard at any time. The mistake he made was to fail to assess the position with sufficient accuracy and to wait too long before taking sufficient avoidance action. It can fairly be said that, in doing so he contributed to the endangerment of those on board both vessels, including the N67. It does not follow from the fact that the Judge held him to be at fault for breaches of the COLREGS that he did not believe on reasonable grounds that he was not endangering the lives or physical safety of those on board the vessels. 236. I agree with the conclusion expressed by Mr Justice Ribeiro PJ at paras L5 134 and 136, and L6 138 as follows. By contrast with her findings against the 1st appellant, the Judge’s findings critical of the 2nd appellant focus, not on the unreasonableness of his subjective beliefs, but on his conduct falling short of objective standards of good seamanship. The collision avoidance action he took was too little too late. His navigation was conditioned throughout by his honest and reasonable, albeit mistaken, belief that the N67 would alter her course to starboard. In these circumstances, I am far from persuaded that the Judge would inevitably have convicted the 2nd appellant if she had directed herself correctly on the issue of mens rea. It follows that, in agreement with Mr Justice Ribeiro PJ and essentially for the same reasons, I would not apply the proviso in his case. I would allow his appeal and quash his conviction. Conclusion 237. For these reasons I would dismiss the appeal of the 1st appellant and allow the appeal of the 2nd appellant. 238. By way of postscript I would like to associate myself with Mr Justice Ribeiro PJ’s comments on the judgment of the Judge. Although we have not agreed with all her conclusions and I say nothing one way or the other about the parts of the case upon which I have expressed no view, I agree with him that her judgment is highly impressive for its comprehensive analysis of the evidence and the meticulous and detailed findings made. I can also see that it must have been quite an ordeal to try the case. Chief Justice Ma: 239. By the unanimous decision of this Court :- (1) The 1st appellant’s appeal is dismissed. He will have to serve the remainder of the sentence of 18 months’ imprisonment ordered by the Court of Appeal. (2) The 2nd appellant’s appeal is allowed. We also make an order nisi that the 2nd appellant should have the costs here and below (including the trial), such costs to be paid by the respondent and to be taxed if not agreed. If any party wishes to have a different order for costs, written submissions should be served on the other party and lodged with the Court within 21 days of the handing down of this judgment, with liberty to the other party to lodge written submissions within 21 days thereafter. In the absence of such written submissions, the order nisi will stand as absolute at the expiry of the time limited for those submissions. Mr Nigel Jacobs QC, Mr Peter Duncan SC and Mr James McGowan, instructed by Ince & Co for the 1st Appellant (FACC No. 6 of 2012) Mr Gerard McCoy SC and Mr Timothy Brenton QC, instructed by Holman Fenwick Willan for the 2nd Appellant (FACC No. 7 of 2012) Mr Simon Westbrook SC instructed by the Department of Justice and Mr Robert KY Lee SADPP and Ms Jasmine Ching SPP of that Department for the Respondent ANNEX 1 INTERNATIONAL REGULATIONS FOR PREVENTING COLLISIONS AT SEA (“THE COLREGS”) PART A. GENERAL RULE 1 Application (a) These Rules shall apply to all vessels upon the high seas and in all waters connected therewith navigable by seagoing vessels. RULE 2 Responsibility (a) Nothing in these Rules shall exonerate any vessel or the owner, master or crew thereof, from the consequences of any neglect to comply with these Rules or of the neglect of any precaution which may be required by the ordinary practice of seamen, or by the special circumstances of the case. (b) In construing and complying with these Rules due regard shall be had to all dangers of navigation and collision and to any special circumstances, including the limitations of the vessels involved, which may make a departure from these Rules necessary to avoid immediate danger. PART B. STEERING AND SAILING RULES Section I. Conduct of vessels in any condition of visibility RULE 4 Rules in this Section apply in any conditions of visibility. RULE 5 Look-out Every vessel shall at all times maintain a proper look-out by sight and hearing as well as by all available means appropriate in the prevailing circumstances and conditions so as to make a full appraisal of the situation and of the risk of collision. RULE 7 Risk of Collision (a) Every vessel shall use all available means appropriate to the prevailing circumstances and conditions to determine if risk of collision exists. If there is any doubt such risk shall be deemed to exist. (b) Proper use shall be made of radar equipment if fitted and operational, including long-range scanning to obtain early warning of risk of collision and radar plotting or equivalent systematic observation of detected objects. (c) Assumptions shall not be made on the basis of scanty information, especially scanty radar information. (d) In determining if risk of collision exists the following considerations shall be among those taken into account: (i) such risk shall be deemed to exist if the compass bearing of an approaching vessel does not appreciably change; (ii) such risk may sometimes exist even when an appreciable bearing change is evident, particularly when approaching a very large vessel or a tow or when approaching a vessel at close range. RULE 8 Action to avoid collision (a) Any action to avoid collision shall, if the circumstances of the case admit, be positive, made in ample time and with due regard to the observance of good seamanship. (b) Any alteration of course and/or speed to avoid collision shall, if the circumstances of the case admit, be large enough to be readily apparent to another vessel observing visually or by radar; a succession of small alterations of course and/or speed should be avoided. (c) If there is sufficient sea-room, alteration of course alone may be the most effective action to avoid a close-quarters situation provided that it is made in good time, is substantial and does not result in another close-quarters situation. (d) Action taken to avoid collision with another vessel shall be such as to result in passing at a safe distance. The effectiveness of the action shall be carefully checked until the other vessel is finally past and clear. (f) (i) A vessel which, by any of these Rules, is required not to impede the passage or safe passage of another vessel shall, when required by the circumstances of the case, take early action to allow sufficient sea-room for the safe passage of the other vessel. (ii) A vessel required not to impede the passage or of another vessel is not relieved of this obligation if approaching the other vessel so as to involve risk of collision and shall, when taking action, have full regard to the action which may be required by the Rules of this Part. (iii) A vessel the passage of which is not to be impeded remains fully obliged to comply with the Rules of this part when the two vessels are approaching one another so as to involve risk of collision. RULE 9 Narrow Channels (a) A vessel proceeding along the course of a narrow channel or fairway shall keep as near to the outer limit of the channel or fairway which lies on her starboard side as is safe and practicable. Section II. Conduct of vessels in sight of one another RULE 11 Application Rules in this section apply to vessels in sight of one another RULE 14 Head on Situation (a) When 2 power-driven vessels are meeting on reciprocal or nearly reciprocal courses so as to involve risk of collision each shall alter her course to starboard so that each shall pass on the port side of the other. (b) Such a situation shall be deemed to exist when a vessel sees the other ahead or nearly ahead and by night she could see the masthead lights of the other in a line or nearly in a line and/or both sidelights and by day she observes the corresponding aspect of the other vessel. (c) When a vessel is in any doubt as to whether such a situation exists she shall assume that it does exist and act accordingly RULE 15 Crossing Situation When 2 power-driven vessels are crossing so as to involve risk of collision, the vessel which has the other on her own starboard side shall keep out of the way and shall, if the circumstances of the case admit, avoid crossing ahead of the other vessel. RULE 16 Action by give-way vessel Every vessel which is directed to keep out of the way of another vessel shall, so far as possible, take early and substantial action to keep well clear. RULE 17 Action by stand-on vessel (a) (i) Where one of 2 vessels is to keep out of the way the other shall keep her course and speed. (ii) The latter vessel may however take action to avoid collision by her manoeuvre alone, as soon as it becomes apparent to her that the vessel required to keep out of the way is not taking appropriate action in compliance with these Rules. (b) When, from any cause, the vessel required to keep her course and speed finds herself so close that collision cannot be avoided by the action of the give-way vessel alone, she shall take such action as will best aid to avoid collision. (c) A power-driven vessel which takes action in a crossing situation in accordance with paragraph (a)(ii) of this Rule to avoid collision with another power-driven vessel shall, if the circumstances of the case admit, not alter course to port for a vessel on her own port side (d) This Rule does not relieve the give-way vessel of her obligation to keep out of the way. RULE 34 Manoeuvring and warning signals (a) When vessels are in sight of one another, a power driven vessel underway, when manoeuvring as authorized by these Rules, shall indicate that manoeuvre by the following signals of the whistle : - one short blast to mean “I am altering my course to starboard” -2 short blasts to mean I am altering my course to port; … (d) When vessels in sight of one another are approaching each other and from any cause either vessel fails to understand the intentions or actions of the other, or is in doubt whether sufficient action is being taken by the other to avoid collision, the vessel in doubt shall immediately indicate such doubt by giving five short and rapid blasts on the whistle. Such signal may be supplemented by a light signal of at least 5 short and rapid flashes.” [1] Hong Kong Court of Final Appeal Ordinance (Cap 484). [2] Appearing with Mr Timothy Brenton QC on the 2nd appellant’s behalf. [3] In Section G.2 below. [4] Reasons for Verdict (“RV”)§§786 and 787. The Court of Appeal appears to have approached both convictions on the footing that they arose solely under the unlawful act limb: CA§§5-7, 494. [5] On the grounds that section 72 was too uncertain and that it offended the presumption of innocence by placing the burden of showing reasonable excuse on the accused, see CA§§82-83. [6] Set out in full at RV§84. [7] As made applicable to vessels by the Merchant Shipping (Safety) (Signals of Distress and Prevention of Collisions) Regulations Cap (369N). [8] Contrary to paragraphs (a), (b), (c) and (d) respectively. [9] Contrary to rule 8(f)(i). [10] Contrary to rule 8(f)(iii). [11] RV§§18-21. [12] RV§21. [13] Ruling §70, cited in CA§88. [14] RV§§24-27. The prosecution had conceded that section 10(4) imposes merely an evidential burden on the defendant and that it had the legal burden of negating the defence if that evidential burden was discharged. [15] RV§§28-30. [16] RV§550. [17] RV§698. [18] See CA§88. [19] Shipping and Port Control (Amendment) Ordinance 1979, Ord No 2 of 1979. [20] CA§109. [21] CA§§113 and 115. [22] CA§392. [23] Court of Appeal at §110. [24] (2010) 13 HKCFAR 142. [25] Hin Lin Yee at §§40-41. [26] Hin Lin Yee at §42. [27] Hin Lin Yee §44. [28] Hin Lin Yee §§44-47. [29] In Section I. [30] [2007] 4 HKLRD 991 (Stock JA, McMahon and Lunn JJ, with McMahon J giving the judgment of the Court). [31] RV§80. [32] See CA§88. [33] At §15. [34] At §16. [35] At §27. [36] At §36. [37] From 2 years’ to 17 months’ imprisonment. [38] Section 72A: “Any person who, by any unlawful act or in any manner whatsoever without reasonable excuse, disables, abandons, scuttles or beaches any vessel within the waters of Hong Kong commits an offence...” [39] The Court of Appeal took a similar view: CA§§100-101, 108. [40] See CA§§84-87, 92-115. [41] As section 26(4) of the Merchant Shipping Ordinance 1899. [42] See CA§§98-99, 104-105, 111 and 113. [43] At §141. [44] Cited by the Court of Appeal at CA§88. [45] CA§115. [46] CA§98. [47] In Section F. [48] Cited by the Court of Appeal at CA§88. [49] Court of Appeal §93. [50] CA§97. [51] (1846) 10 Jur 211. [52] [1966] 3 All ER 618. [53] [1961] AC 290. [54] Which reversed that view by its section 8. [55] Section 10(3): “If any of the collision regulations is contravened by a vessel, the owner of the vessel, the master and any person for the time being responsible for the conduct of the vessel shall each be guilty of an offence and liable to a fine of $20,000.”. [56] Section 10(4): “It shall be a defence to a charge under subsection (3) for the person charged to prove that he took all reasonable precautions to prevent the contravention to which the charge relates.” [57] Cap 245. Section 33(1): “Any person who, without lawful authority or reasonable excuse, has with him in any public place any offensive weapon shall be guilty of an offence and shall be sentenced, on summary conviction or conviction on indictment, in the manner specified in subsection (2).” [58] R v Ng Wai Hung [1990] 1 HKC 43. [59] Evans v Hughes 56 Cr App R 813 at 817. [60] See Hong Kong Archbold 2013, §§25-124 to 25-126. [61] Appearing with Mr Robert KY Lee and Ms Jasmine Ching for the respondent. [62] Respondent’s printed case §44. [63] See Section F above. [64] Hin Lin Yee at §§89-91, 96(d), 164, 178 and 198(d). [65] Cap 132. [66] PHMSO, section 150, Schd 9 and Criminal Procedure Ordinance (Cap 221), Sch 8. [67] By sections 70 and 71 of the PHMSO. [68] Hin Lin Yee §19. [69] At §28. [70] Hin Lin Yee §§111-113. [71] At §146-147. [72] Hin Lin Yee at §148. [73] CA§103-105. [74] At §45. [75] Section H above. [76] Section J.1 above. [77] Section I above. [78] Section G.5b. [79] Appearing for the 1st appellant with Mr Nigel Jacobs QC and Mr James McGowan. [80] (2001) 4 HKCFAR 133 at 187-188. [81] Cap 484. [82] Cap 221. [83] (2001) 4 HKCFAR 457 at §61. [84] Yuen Kwai Choi v HKSAR (2003) 6 HKCFAR 113 at §54; Leung Fei Wah v HKSAR (2006) 9 HKCFAR 118 at §§17 and 23; Kissel v HKSAR (2010) 12 HKCFAR 27 at §170. [85] Lord Clarke NPJ §§203, 206 [86] RV§§15, 66, 71, 358. [87] RV§§13, 67 [88] RV§§205. [89] RV§206. [90] RV§§130, 451 and 467. [91] RV§§411, 412, 466, 492 and 501. [92] RV§127 [93] RV§517. [94] RV§516. [95] RV§§135 and 197. [96] RV§137. [97] RV§509. [98] RV§11. [99] RV§§158, 194, 358, 596. [100] RV§§597, 653, 771. [101] RV§624. [102] RV§11, 12, 198, 612. [103] RV§596. [104] RV§§178-179. [105] RV§§192, 604. [106] RV§171. [107] RV§§136, 172, 182, 203. [108] RV§161. [109] RV§651. [110] RV§648. [111] RV§386. [112] RV§400. [113] RV§§158, 409-411. [114] RV§668. [115] RV§§163-164, 652. [116] RV§§644, 648 [117] RV§638.
Press Summary (English) Press Summary (Chinese) FACV No 22 of 2012 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO 22 OF 2012 (CIVIL) (ON APPEAL FROM CACV NO 83 OF 2011) Between : Mr Justice Chan PJ, Acting CJ: 1. For the reasons given by Mr Justice Tang PJ in his judgment, I would allow the defendant’s appeal and restore the judgment of Mr Justice Au dismissing the plaintiff’s claim on the main contract and its claim for an indemnity. For the reasons given by Mr Justice Ribeiro PJ in his judgment, I would dismiss the defendant’s counterclaim and set aside Mr Justice Au’s decision in respect thereof. Mr Justice Ribeiro PJ: 2. I am in respectful agreement with Mr Justice Tang PJ’s judgment in favour of allowing the appeal and setting aside the Court of Appeal’s judgment on the main contractual claim and the claim for an indemnity. I would restore the judgment of Mr Justice Au to that extent. 3. In this judgment, I address Au J’s judgment in favour of the defendant on the counterclaim. For the reasons which follow, I have respectfully reached the conclusion that that judgment must be set aside. 4. I also wish to make certain observations about the lack of pleadings in this case. The counterclaim 5. Where a person is appointed agent and incurs expenses on behalf of his principal in the execution of his authority, one would expect him, in a commercial transaction, to be reimbursed for those expenses. One would not normally expect an agent to be out of pocket in respect of expenses incurred for his principal’s benefit. Where the agency is contractual, a right to reimbursement is generally implied.[1] The parties may of course provide expressly for how expenses and reimbursement are to be dealt with, stipulating, for instance, that they are to be absorbed by the agent as part of his contractual remuneration[2] or that they should be reimbursed from specified sources or according to a specified payment schedule. In construing such contractual provisions, the commercial context of an agent having incurred expenses on his principal’s behalf should be borne in mind. 6. In the present case, having rejected the plaintiff’s claim, Au J gave judgment for the defendant on its counterclaim in the sum of HK$3,151,824.00. That sum represented what the Judge found to be the amount by which the plaintiff had been overpaid under the Agreement dated 21 July 2000 (“the 21/7 Agreement”). 7. In pleading the counterclaim, the defendant alleged that it had paid to the plaintiff a total of HK$10,000,000.00 under the 21/7 Agreement; that since only 338,128 m3 of contaminated mud had been dumped pursuant to the first Dumping Permit, the plaintiff was entitled to payment of only HK$5,748,176.00; and that the plaintiff was therefore obliged to refund HK$4,251,824.00 to the defendant.[3] Au J therefore awarded a lesser sum than the amount claimed in the counterclaim. 8. Before examining the way in which Au J arrived at his award on the counterclaim, the relevant provisions of the 21/7 Agreement should be noted. The provisions relevant to the counterclaim 9. Under clause 1.1, the plaintiff was appointed: “To act on behalf of the [defendant], as Agent, in respect to all matters relating to the obtaining of Dumping Permits to dispose of contaminated mud and necessary permits for the [defendant’s] vessels to enter/operate, in China waters.” 10. The parties knew that securing the dumping permits would require fees to be paid to the State Oceanic Administration (in particular to its South China Sea Branch “SCSB”) and they made express provision for how such fees would be dealt with. Clauses 2.1, 2.3 and 2.9 made it clear that the plaintiff would make the actual fee payments to SCSB and provided for those payments to be included in the Dumping Fee of HK$17.00 per m3 of mud dumped. Clause 2.1 Dumping Fee : HK$17.00/m3 (Seventeen dollars) based on in-situ volume and inclusive of all expenses whatsoever incurred relating to the dumpling permit in mainland China. Clause 2.3 The Dumping Fee is inclusive of all costs and expenses whatsoever incurred in respect to obtaining the necessary approvals / permits and permissions in mainland China. Clause 2.9 The Agent shall be responsible for arranging the taking of samples of analysis by the State Oceanic Administration, the payment of all fees and expenses whatsoever incurred in respect to the obtaining of all necessary permits for the Contractor’s dumping operations and for liasing with all concerned parties including local people groups for the smooth progress of the Contractor’s operations. 11. Clause 2.6, which was significantly amended by the Addendum,[4] is important. As amended, it materially states as follows: Clause 2.6 Payment Schedule The first Dumping permit shall be for a quantity of 1,000,000 m3 of contaminated mud, equivalent to a Dumping Fee of HK$17,000,000.00 which shall be paid as follows : - a. First Payment, Within five (5) working days of the Contractor receiving the official Dumping Permit. The Contractor will deposit HK$8,000,000.00 (eight million dollars) directly to the Agents bank account, from this payment, HK$7,000,000.00 (seven million dollars) will be paid immediately to State Oceanic Administration Bureau, the remaining HK$1,000,000.00 (one million dollars) for the payment of Port charges at Zhuhai. b. Second Payment, Within one (1) working day of the Contractor receiving the official vessel license. The Contractor will deposit HK$2,000,000.00 (two million dollars) directly to the Agents bank account, this payment shall be for the procurement of the Performance Guarantee Bond, which shall be effective for the whole period of dumping operation, in the same amount. c. Third Payment, balance of HK$7,000,000.00 (Seven million dollars) will be paid upon the quantity of dumping having reached 60% (600,000m3) of the Permit total. Upon receipt of this payment the Agent shall immediately effect and secure a Performance Guarantee Bond in favour of the Contractor in the amount of HK$1,000,000.00 (one million dollars).[5] 12. Clause 2.4 stipulates that “the first Dumping Permit under clause 2.6 hereof ... shall be obtained within the week commencing 24 July 2000”. The Addendum did not change that provision. Au J’s findings 13. His Lordship found that it was common ground that the defendant had “only dumped 338,128 m3 at the SEZ site and that the defendant had “effectively paid the Plaintiff approximately HK$10,000,000.00 under the contract for various purposes”, stating in a footnote that out of that amount, HK$8,900,000.00 had been paid to the [plaintiff[6]] for obtaining the permits “as its entitlement under the contract”.[7] 14. The findings relevant to the operation of clause 2.6 are that: (a) On 31 July the defendant “paid the Plaintiff HK$8,000,000.00, out of which HK$7,000,000.00 was to be in turn paid to SCSB by the Plaintiff for the 1st Dumping Permit, and the remaining HK$1,000,000.00 to the Zhuhai port authority to obtain the necessary port clearance certificate to enable named vessels to carry the contaminated mud through the port into the Mainland waters to the ESZ Site.”[8] (b) “On 21 August 2000, pursuant to the 21/7 Agreement, the Defendant remitted to the Plaintiff's bank account HK$2,000,000.00 for the purpose of enabling the Plaintiff to secure a performance bond.”[9] (c) “.... on 27 September 2000, the Defendant paid the Plaintiff a total sum of HK$900,000.00, out of which HK$500,000.00 was intended for payment for application for renewal of the port permits, and HK$400,000.00 was to be further paid over to Wing Yiu by the Plaintiff ...”[10] 15. Plainly, the amounts in (a) and (b) were paid pursuant to clause 2.6a and clause 2.6b as amended by the Addendum respectively. For present purposes, we can ignore the HK$2,000,000.00 payment since it was applied to provide a performance bond and stands on a different footing. 16. It is not entirely clear how the Judge arrived at his figure of HK$8,900,000.00, but it would appear likely that it consists of the HK$8,000,000.00 sum paid under clause 2.6a plus the HK$900,000.00 referred to above in paragraph (c). However that HK$900,000.00 amount appears to have been dealt with by Au J as a separate sum paid out over and above the HK$8,900,000.00 sum which he declined to award to the defendant.[11] It is unnecessary for present purposes to resolve the apparent inconsistency and I will proceed on the basis that the payment which is relevant to the counterclaim was made by the defendant to the plaintiff in the sum of HK$8,900,000.00. 17. The Judge arrived at his award without any discussion of the abovementioned contractual provisions and apparently simply accepted that an overpayment had been made.[12] It is unclear what, if any, submissions were made on the plaintiff’s behalf. How the counterclaim award was arrived at 18. What emerges from the above is that the Judge awarded the defendant the sum of HK$3,151,824.00 as an amount overpaid by the defendant on the following footing: (a) Since only 338,128 m3 of mud was dumped pursuant to the first Dumping Permit, the plaintiff was entitled to be paid HK$5,748,176.00 (338,128 m3 at the rate of HK$17.00 per m3). (b) Since, the plaintiff had already been paid Dumping Fees of HK$8,900,000.00, it had been paid more than the HK$5,748,176.00 it was entitled to. (c) So the plaintiff was liable under the counterclaim to refund the over-payment of HK$3,151,824.00. Construction of clause 2.6 19. Whether the counterclaim award is well-founded depends on the true construction of clause 2.6 and in particular, whether it was intended that sums paid in accordance with its terms should be refundable as found by the Judge. In other words, was the sum of HK$8,000,000.00 (or, on the Judge’s finding, HK$8,900,000.00) paid by the defendant to the plaintiff on 31 July 2000 and on-paid by the plaintiff to SCSB and the Zhuhai port authority refundable on the ground that a lesser entitlement to Dumping Fees had arisen when calculated according to the agreed unit price?[13] 20. It is only if on the true construction of clause 2.6, those monies are refundable that the defendant would be entitled to assert that it has overpaid the plaintiff. If, properly construed, those sums are not refundable once paid, no question of overpayment arises. 21. In my judgment for the reasons which follow, the sums are not refundable and the counterclaim should have been dismissed. 22. As we have seen, by clauses 2.1, 2.3 and 2.9, the agreement was that the fees that had to be incurred in obtaining the necessary permits would be included within the Dumping Fees payable to the plaintiff. Clause 2.6 is plainly intended to provide the mechanism for this to be implemented. The following features of clause 2.6 are important : (a) It provides for the payment of Dumping Fees to the plaintiff, it having been agreed that the payments made by the plaintiff to obtain the permits would be covered by such Dumping Fees. (b) The clause 2.6 mechanism does not require the plaintiff to pay the permit fees “up front” out of its own pocket and then seek reimbursement out of Dumping Fees. This is consistent with clause 2.9 which makes it clear that the plaintiff was responsible only for “arranging ... the payment of all fees and expenses whatsoever incurred in respect of the obtaining of all necessary permits for the Contractor’s dumping operations”. It recognizes that the permits are for the defendant’s operations and does not say that the plaintiff is to fund those payments. (c) Accordingly, under clause 2.6, the parties agreed that the defendant would provide the plaintiff with the funds necessary to pay those fees, and the plaintiff accepted the obligation “immediately” to make the onward payments to the Chinese authorities once it was put in funds. Both parties therefore agreed that the money was not being paid to the plaintiff for its own economic benefit but paid to it for immediate onward transmission in order to obtain the necessary permits on the defendant’s behalf. (d) One can see why this may have been commercially attractive to both sides. It meant that the plaintiff did not have to find “up front” finance for the payments nor to take the risk of non-reimbursement. The defendant was assured that there would not be any delays while the plaintiff sought to raise finance and was credited with the amounts provided as sums to count as Dumping Fees which it had contracted to pay. (e) Nothing in clause 2.6 or anywhere else in the 21/7 Agreement suggests that those payments are refundable. Clause 2.6 says, without qualification, that the scheduled payments “shall be paid as follows”, and then sets out a schedule with time-limits within which the payments had to be made. (f) It would be commercially very odd that the parties should have intended the payments to be refundable by the plaintiff where they had stipulated that the plaintiff was required immediately to pay away the whole of the sums received in order to secure the necessary permits for the defendant’s benefit. One would expect refunds only to be demanded from a person who received and had the right to keep the money. If the parties had intended that the payments should nevertheless be refundable in particular circumstances, one would surely have expected those circumstances to be spelt out in the contract. 23. The commercial incongruity of the suggestion of refundability is magnified when one recognizes that the plaintiff not only duly applied the funds as required, but that, on 26 July, five days after the 21/7 Agreement was signed, it successfully obtained the first Dumping Permit which was stated to be for the exclusive use of Hyundai.[14] Six days later, on 1 August 2000, it obtained the Zhuhai port authority clearance certificate.[15] The plaintiff therefore fully performed the first (and only relevant) phase of its contractual obligations within less than a fortnight after the 21/7 Agreement was signed. 24. The defendant took the benefit of the permits so obtained and started its SEZ dumping operations on 2 August, the day after the clearance certificate was provided.[16] It continued to operate pursuant to those permits until its activities were stopped by environmental protests and EPD’s refusal of a loading permit for October 2000 – matters which obviously had nothing to do with the plaintiff. The environmental appeal process then took the defendant to the end of May 2001 when the Dumping at Sea Appeal Board ruled against it, and it was not until early September 2001 – over a year after the plaintiff had completed performance of its obligations – that the defendant gave up on the idea of dumping at the SEZ site. That was no doubt a decision taken by the defendant on commercial grounds and, as the Judge found, not the result of the dumping contract having been frustrated. 25. Given that course of events, it appears bizarre to suggest that the clock should be wound back and that the monies paid at the inception of the dumping project should be refunded even though the purpose of the payments had been achieved and exhausted, and their benefits obtained by the defendant. The Court should certainly demand some very clear provisions in the contract to entitle the defendant to a refund in such circumstances. No such provisions exist and the argument on construction, in my view, strongly supports a conclusion in favour of non-refundability. 26. For the foregoing reasons, I conclude that on the true construction of the contract, the sums paid to the plaintiff and applied by it in making onward payments were not refundable. I would therefore set aside Au J’s decision on the counterclaim and order the counterclaim to be dismissed. The lack of pleadings 27. We have been faced with the extraordinary situation of a plaintiff being allowed at trial to run two alternative unpleaded cases without being required even to formulate a proposed amendment setting out what exactly those alternatives are.[17] We face the even more extraordinary situation of the plaintiff proceeding on appeal on the basis of the alternatives still not pleaded by way of amendment – and succeeding on one of those alternatives. The position remained the same with nothing formulated in writing even when the case came on for hearing in this, the Court of Final Appeal. This has given rise to confusion and a real likelihood of procedural unfairness. 28. No doubt Au J decided to allow the alternatives to be run with such informality because he thought there was nothing in them and gave them short shrift. However, he might have been alerted to the unacceptable shortcomings of that approach when he identified some of the problems faced by the plaintiff in seeking to run those cases. 29. For example, he noted that while seeking to run the first alternative case which involved the proposition that there was a contractual obligation to pay by reference to “the entire amount of contaminated mud that was dredged from the CT9 project” (subject to a “bad weather” exception): “... as there is no evidence at trial as to what was the entire quantity of mud dredged from the CT9 project (understandably so, since this issue does not arise from the pleadings and at trial), Ms Cheng says if the Plaintiff could succeed on this, there should be a further direction for assessment of damages.”[18] 30. The fact that the plaintiff was unprepared to argue an essential aspect of its unpleaded alternative indicates just how unacceptable it was to allow this purported alternative to be run. A party must raise all the issues he wishes to raise to be dealt with at the trial. Parties are not entitled to have issues recently thought up dealt with separately and piecemeal. The other party is entitled to know from a clear pleading what is the entire case he has to meet so that he can decide whether particulars should be sought; how he should plead in response; what discovery he is entitled to; what evidence he should adduce to meet it; and what points of law should be taken. Notions like “the entire quantity of the mud dredged from the CT9 project” might be studded with arguable questions as to how such quantity should be ascertained dependent on the evidence. If there was room for exceptions regarding bad weather or anything else, the scope and effect of such exceptions could no doubt throw up factual and legal questions. 31. Where a late attempt is made to introduce a new case, it is doubly important that the other side should have a clearly pleaded draft amendment so that proper consideration can be given as to whether objections should properly be made to such amendment and whether an adjournment should be sought. 32. Au J stated that counsel for the defendant had not “clearly identified any specific prejudice that would have [been] caused to the defendant if [the alternative cases] are so allowed to be run” or shown “what evidence the defendant would have adduced had these alternative cases ... been specifically pleaded...” With respect, without having seen even a draft amendment such inability is not surprising. Indeed, the inability to be specific as to those matters itself constitutes prejudice. 33. When the case came on appeal before this Court, argument was frequently bedevilled by confusion as to the nature of the alternative cases contended for. There were times when the plaintiff’s argument drifted uncertainly, oscillating between what the Court had endeavoured to understand the two alternatives to be. There were gaps in the evidence that would no doubt have been considered if the case had been properly constituted. The response of counsel for the plaintiff that such gaps could be approached on the basis that “the point was not disputed” could not be accepted: How could one expect the other side to dispute, or to come ready with evidence to refute, a point that has not been pleaded or even formulated in draft? 34. Pleadings are not mere formalities. They impose a necessary discipline and are fundamental to enabling every procedural facet of the adversarial system to operate fairly. Mr Justice Tang PJ: Introduction 35. The appellant[19] was the principal contractor for the civil engineering works associated with construction of container terminal 9 (“CT9”). The work required dredging at the Rambler Channel which involved the removal of a large quantity of contaminated mud. According to the appellant’s tender documents, the estimated quantity of contaminated mud to be dredged was 6,823,030 m3, of which all but 0.5 million m3was intended to be dumped in Mainland waters. Dumping at sea in Hong Kong waters required the payment of a levy of HK$55.4 per m3. Dumping in Mainland waters was considerably less expensive. As the Chief Judge said[20] in his judgment in the Court of Appeal: “4. … It was the intention and expectation both of the employer[21] and of the principal contractor[22] that the bulk of the contaminated mud to be dredged would be dumped in an approved site to be found in Chinese waters. Prices for the contract were based on such an assumption.” 36. Dumping in Mainland waters required dumping permits from the Mainland’s State Oceanic Administration (“SOA”). There were meetings with officials from the South China Sea branch of SOA (“SCSB”) to explore the possibility of applying for dumping permits. On SCSB’s suggestion the appellant decided to engage an agent with experience in applying for dumping permits. In July 2000, the appellant appointed the respondent[23] in writing as its agent to apply for dumping permits from SCSB to enable contaminated mud dredged in connection with CT9 to be dumped at a dumping ground known as South Erzhou (“SEZ”). The contract between the respondent and the appellant is contained in several documents which will be discussed in detail below. 37. In late July 2000, the respondent obtained a dumping permit (the first dumping permit) for the dumping of 1,000,000 m3 of contaminated mud at SEZ. The first dumping permit covered 1,000,000 m3, because of large dumping levy which was payable up front to SCSB, it was decided that dumping permits should be applied for in stages. 38. Apart from dumping permits from the SCSB, a marine dumping permit (in this case an export permit) from the Director of Environmental Protection (“EPD”) under the Dumping at Sea Ordinance Cap 466 was also required for dumping in Mainland waters. In determining whether to issue a permit EPD was required to have regard to, inter alia, the need to protect the marine environment (s10). Export permits were issued on a monthly basis and were obtained by the appellant for the months of August and September 2000[24] for dumping at SEZ, as a result of which approximately 338,128 m³ of contaminated mud was dumped there under the first dumping permit. At the time it was the practice of EPD to issue export permits on the strength of SCSB dumping permits. It appeared that the respondent and the appellant proceeded on the basis that provided dumping permits were granted by SCSB, an export permit would be issued by the EPD as a matter of course. However, as a result of protests by Greenpeace (which included activists repeatedly boarding the appellant’s dredging barges to stop them from dredging and loading the contaminated mud), EPD no longer regarded SCSB dumping permits as sufficient evidence to prove that dumping would not cause unacceptable impact on marine environment, but would require evidence that the requirements of s10 of the Dumping at Sea Ordinance have been satisfied. After September 2000, no export permit was granted to the appellant for dumping in SEZ, and thereafter no dredged mud from CT9 was dumped at SEZ. 39. As a result this action was brought by the respondent. These proceedings concern the proper interpretation of the contractual documents. The respondent claimed that its contract with the appellant was a fixed sum contract and claimed damages for breach of contract on the basis that the respondent was entitled to be paid HK$17 per m3 on a quantity of 6,410,770 m3. The quantity of 6,410,770 m3was called the “total dump volume” in the re-amended statement of claim and represented the alleged in-situ volume at CT9. The learned trial judge (Au J) described this as the “Alleged Agreed Quantity Term” and said the case was put on the basis that it was an express or implied term of the contract “that the appellant agreed to dump the Alleged Agreed Quantity of the contaminated mud at SEZ site”. The respondent also claimed an indemnity in respect of contractual obligations to third parties which it had entered into.[25] 40. The appellant’s case was that it was a measurement contract and that the respondent was entitled to be paid HK$17 per m3 on the 338,128 m3 actually dumped at SEZ, namely, HK$5,748,176. Since it was agreed that the appellant had paid the respondent HK$10 million[26], the appellant counterclaimed the return of HK$4,251,824, the difference between HK$10 million and HK$5,748,176, para 9 re-amended defence and counterclaim. The appellant also claimed repayment of a sum of HK$900,000 paid for the extension of the first dumping permit which it alleged was never secured. This claim failed and we are not concerned with it. 41. In other words, although the parties agreed that the appellant was entitled to be paid at a rate of $17 per m3, they disagreed on whether the contract on its proper construction was a measurement contract or a fixed sum contract. The respondent’s primary pleaded case was that the appellant agreed to pay HK$17 per m3 based upon the in-situ volume of the contaminated mud which was said to be 6,410,770 m3.[27] However the respondent was also allowed to run 2 unpleaded cases in the alternative, which were recorded in Au J’s judgment. The first was that under the agreement[28] the appellant had agreed to engage the respondent to secure the right to dump the entire quantity of mud dredged from CT9 project. Although no quantity of contaminated mud had been fixed, the quantity relating to the right to dump was ascertainable and referable to the entire amount of contaminated mud that was dredged from the CT9 project subject to the bad weather exception. But because there was no evidence at trial as to what was the entire quantity of mud dredged, counsel for the respondent asked for a direction for assessment of damages. 42. The second alternative was that the respondent’s contractual duty under the dumping contract was to secure the right to dump (i.e. the dumping permits) for the appellant and it was entitled to receive HK$17 per m3 on the volume of the right to dump that it had secured for the appellant (as opposed to the actual dumped volume) under the said permits. Given that the respondent has successfully obtained the first dumping permit, the respondent was entitled to receive HK$17 million. Since the appellant had only paid HK$8.9 million, the respondent should be entitled to claim for the difference of HK$8.1 million. Court of Appeal 43. Au J dismissed all the claims. On appeal, the Court of Appeal agreed that the primary pleaded case as well as the second alternative case should be dismissed, but held in favour of the respondent on its indemnity claim as well as its first alternative case.[29] 44. On the first alternative case, the Chief Judge said: “59. All this leads me to the ultimate question in terms of liability in this case : when the dumping fee payable by the Defendant to the Plaintiff is expressed in the unit rate of HK$17 per m3, does it refer to the quantity to be dumped in Chinese waters, or does it refer to the quantity to be dredged in Hong Kong (to be verified by the employer with the Defendant) less the quantity dumped elsewhere under the type of limited circumstances described above? 60. In my view, on a true construction of the contractual documents, bearing firmly in mind the commercial purpose and context of this case, the answer must be that it is a reference to both, in the sense that the two are, in fact, in the peculiar circumstances of the present case, interchangeable and have been used by the parties interchangeably. In other words, the Defendant is contractually obliged to dump the dredged mud at the South Erzhou site, subject to the limited exceptions described. That accords fully with the intention and expectation of the parties when they entered into this dumping contract.” 45. The commercial purpose or context was identified at para 29 to 34 of the judgment, namely, that, at all material times, the parties had proceeded in the hope and expectation that the entire quantity of contaminated mud would be dumped in Mainland waters and that it was not commercially viable for the appellant to do otherwise. That the parties were able to agree on the unit price of HK$17 per m3 “because they had proceeded on an estimate that the entire volume of the contaminated mud ... would be in the region of 6.8 m3”. That was regarded as “a very important background fact”. 46. I believe undue weight was put on the fact that the unit rate of HK$17 m3 was fixed with the estimated quantity of mud to be dredged in mind. Unit rates are common in measurement contracts. One would respect that normally they would be fixed with an estimated amount of work in mind. That is why, for the mutual protection of the parties, some contracts provide for variation of the unit rate in the event that the actual volume falls significantly short of or greatly exceeds the estimate. 47. As for the commercial viability of dumping in Hong Kong, given that the tender was based on dumping in Mainland waters and the substantial difference in cost,[30] I have no doubt the parties had contracted in the hope and expectation that dumping could take place in Mainland waters because export permit would be issued on the strength of a SOA permit. 48. I believe, the failure of the parties to foresee the risk of EPD refusing to issue an export permit lies at the heart of this case. The fact that neither party foresaw the risk does not mean that there was no risk. Nor, is the answer, to the question how they would deal with the risk, obvious. Upon the materialization of the risk, one must ask, whether the parties had allocated the risk and if so, how. 49. The answer may be provided by a proper construction of the contract. But, if the contract was silent, one has to consider whether a term could be implied. Ms Cheng SC, for the respondent, did not rely on an implied term. But, it may be a useful exercise to consider why the known background or the context of the contract in this case would not support an implied term. Frankly, one cannot say what answer might have been given to an officious bystander who posed the prescient question. The appellant might say since the substantial cost of dumping in Hong Kong would fall on us we would not agree to pay for dumping not carried out in Mainland waters. Or the parties might decide to share the cost of what they perceived to be a small risk. Or they might agree to limit their exposure at any time to, say, only 1,000,000 m3. The evidence showed that SEZ could accommodate 8,000,000 m³, and that once it was used for CT9 it could not be used for contaminated mud from anywhere else. So the respondent might say to the appellant, you must commit to dump all the mud from CT9 or there would be no contract. The appellant might agree or they might suggest a compromise. Indeed, the appellant might retort and say it is true that SEZ has a capacity of 8,000,000 m³, but apart from the contaminated mud from CT9 where would you find contaminated mud to fill your site by someone who would need your service? Moreover, there were other people in the same field of business as the respondent. So the appellant might go elsewhere. What is almost certain is that the parties would have addressed the perceived risk in their contract. I believe had the risk been foreseen the parties would have addressed the risk in a businesslike manner. 50. I went through this exercise to show that we are really concerned with an unexpected risk which has materialised. The fact that the parties had hoped and expected that all of the contaminated mud from CT9 would be dumped in Mainland waters would not necessarily provide an answer to whether the parties had allocated such risks in their contract and if so how. 51. I turn to consider how much the known background or context will help in the construction of the contractual documents. The documents forming the contract 52. Two Chinese documents dated 14 July 2000. The translation of the first reads: “ Agreement on the Dumping of Dredged mud Hyundai-CCECC Joint Venture is the General Contractor of Container Terminal 9 Development of Hong Kong, and Sinoearn International Ltd. is the Subcontractor of Hyundai-CCECC Joint Venture. After friendly discussions, both parties have reached an agreement on cooperating in dumping the dredged mud from Container Terminal 9 Development to seawater at South Erzhou, Dangan, Wanshan, Zhuhai, China. Both parties have agreed on the following: I. The price is HK$17.00/m3, [on] the total quantity [which] is subject to the final quantity confirmed by the Owner of Container Terminal 9 Development to Hyundai-CCECC Joint Venture. II. Terms of payment and other provisions will be decided through further discussions.” 53. The second document was in all material respect the same save that it provided : “… Furthermore, both parties have decided to jointly apply to the South China Sea Branch, State Oceanic Administration for the permit for dumping dredged mud. Relevant details of constructionwill be decided through furtherdiscussions.” 54. It should be noted the respondent was not appointed the appellant’s agent by either of the 14/7 agreement. The first agreement spoke of co-operation and the second provided for a joint application. The respondent was also called sub-contractor. 55. The respondent was appointed agent by an agreement in English dated 21 July[31], which is set out in full below: “ HYUNDAI ENGINEERING & CONSTRUCTIONCO LTD AN AGREEMENT made the 21stday of July 2000BETWEENHyundai Engineering & Construction Co., Ltd whose registered office is at Room 3206,32/F, TheCenter, 99 Queens Road Central, Hong Kong (hereinafter called ‘the Contractor’) of the one part and Sinoearn International Ltd whose registered office is at 19/F., Xiu HuaCommercial Building, 211-213 Jaffe Road, Wanchai, Hong Kong. (hereinafter called ‘the Agent’) of the other part. After consultation, the two parties set forth the following Articles of Agreement, to which both party's shall adhere. NOW IT IS HEREBY AGREED as follows: 1.0 GENERAL The duties and performances of the Agent shall include but not necessarily be limited to the following. 1.1 To act on behalf of the Contractor, as Agent, in respect to all matters relating to the obtaining ofDumping Permits to dispose of contaminated mud and necessary permits for the Contractor’s vessels to enter/operate, in China waters. 1.2 To liaise and coordinate with all concerned Parties in China for smooth progress of the Contractor's operations. 2.0 PARTICULAR 2.1 Dumping Fee: HK$ 17.00/m3 (Seventeen dollars) based on in-situvolumeand inclusive of all expenses whatsoever incurred relating to the dumping permit in mainland China. 2.2 Dumping Area: The contaminated mud materials shall be deposited in and around the dumping area South of Er Zhou, as stipulated in the Dumping Permit. 2.3 The Dumping Fee is inclusive of all costs and expenses whatsoever incurred in respect to obtaining the necessary approvals / permits and permissions in mainland China. 2.4 The first Dumping Permit under clause 2.6 hereof from the relevant Authority in China (State Oceanic Administration), for the dumping of contaminated mud shall be obtained within the week commencing 24 July, 2000. 2.5 Quantity – The total dumping quantities is estimated to be in the region of 3,000,000m3, under this agreement actual quantities will be those finally disposed of at the China dumping area through this Contract. 2.6 Payment Schedule The first Dumping Permit shall be for a quantity of 1,000,000m3 of contaminated mud, equivalent to a Dumping Fee of HK$17,000,000.00 which shall be paid as follows: - a. First Payment, Within four (4) working days of the Contractor receiving the first official Dumping Permit, the Contractor will deposit HK$5,000,000.00 (five million dollars) directly to the Agents bank account for the procurement of the Performance Guarantee Bond. b. Second Payment, of HK$ 5,000,000.00 (five million dollars) will be paid to the Agent, in the presence of representatives from State Oceanic Administration, within three (3) working days of the Contractor receiving the Performance Guarantee Bond. c. Third Payment, balance of HK$ 7,000,000.00 (Seven million dollars) will be paid upon the quantity of dumping having reached 60% (600,000m3) of the Permit total. Subsequent Permits d. Three (3) Instalments shall be paid in advance for each Dumping Quantities of 1,000,000 m3 under the subsequent Dumping Permit as follows; 2.7 The measurement for interim volume shall beon the basis of the current factor applied by the relevant China Authority but in no case shall this exceed 70% ofvolume of mud-water mixture calculated by actual loaded “Barge Volume”. 2.8 The measurement of final volume shall be, based on the Bathymetric Survey data submitted by the Contractor to the Employer of the Project, calculated using the principle of Initial Survey less Final Survey less any other Survey quantities of contaminated mud dumped in other disposal areas. 2.9 The Agent shall be responsible for arranging the taking of samples for analysis by the State Oceanic Administration, thepayment of all fees and expenses whatsoever incurred in respect to the obtaining of all necessary permits for the Contractor’s dumping operations and for liasing with all concerned parties including local people groups for the smooth progress of the Contractor’s operations. 2.10 The Contractor shall allow two representatives of the Agent to be stationed in a container office, with electricity supply and telephone line, at the CT9 project site free of charge for the duration of the dumping operation for performance of the contract. 2.11 The Contractor undertakes to provide the Agent with details of vessels, information of dumping quantities and time schedules insofar as the same is required for the carrying out of the Contractor’s operations and shall assist the Agent and do such things or act as may be required by the China authority for the performance of this Agreement. 3.0 Performance Guarantee Bond - Pursuant to the period stated in Article 2.6a) above, the Agent shall provide to the Contractor, in wording to be agreed by the Contractor an irrevocable and unconditional Letter of Guarantee issued through a reputable bank in Hong Kong, for the sum of HK$ 5,000,000.00 (five million dollars). 4.0 Confidentiality - The matters in and surrounding this agreement shall be treated and remain as strictly private and confidential between the party’s. 5.0 The Agent shall not be regarded as committing a breach of this Agreement by reason of any change of law or policy of the Chinese Government.” 56. At trial, Au J held that the agreements of 14/7 were binding and enforceable and that they had not been superseded by the agreement of 21/7. The Court of Appeal said that the agreements of 14/7 had not been varied by the agreement of 21/7: “39. … There is no suggestion that the parties have by the 21/7 Agreement agreed to vary the terms already agreed in the 14/7 agreement. That is an important context to bear in mind when looking at the terms of the 21/7 Agreement, which must be construed together with that in 14/7 Agreement as a whole.” 57. I will adopt the same approach. 58. On what had been agreed in the 14/7 Agreement, the Chief Judge said: “35. … As for the first 14/7 Document, it sets out in clause 1 the all important unit rate of HK$17 per m3. But it does not stop there. Nor is it silent on the question of quantity. Clause 1 goes on to say that ‘the total quantity is subject to the final quantity confirmed by the Owner ...” 36. Pausing here, this clause makes sense and accords well with the important background facts that I have described. The parties have reached an agreement on the unit rate, expressed in terms of HK dollar per m3. The quantity is to be determined not by reference to the volume of mud to be dumped at the South Erzhou site as such, nor to the quantity of dredged mud to be transported by vessels and barges from Hong Kong to Chinese waters for dumping purposes. Rather, quantity is by reference to the amount of mud to be dredged, as to be verified by the owner of the CT9 project with the Defendant as principal contractor. Unless that amount, that is, the amount of mud to be dredged to be verified by the owner with the Defendant should bear a relationship to the amount of mud to be dumped at the site, for which purpose the dumping permission is to be obtained, and for which purpose the service of the Plaintiff is to be engaged and to be paid for, the reference does not make sense. 37. Taking one step further, unless it is the parties’ contractual intention that the mud to be dredged from the project (the quantity of which is to be verified by the owner) is to be dumped entirely at the site, the clause does not make commercial sense.” 59. I cannot read so much into clause 1[32]. I believe the reference to the final quantity being subject to confirmation by the owner, was concerned with measurement and not quantity. Since payment was at a rate of HK$17 per m3, it was natural to provide how it should be measured. We are concerned with the measurement of mud dredged from the seabed, and there are several possible stages during the dredging and dumping process that measurement could be made, for example: (a) in-situ before dredging (b) whilst in the barge (c) in-situ after dumping [33] 60. The 21/7 Agreement which supplied some of the details envisaged by clause 2 of the first 14/7 Agreement provides illumination. Clause 2.7 dealt with measurement for the purpose of interim payment. Clause 2.8 is important. It provided for the measurement of final volume[34], which: “ … shall be, based on the Bathymetric Survey data submitted by the [Appellant] to the Employer of the Project, calculated using the principle of Initial Survey less Final Survey less any other Survey quantities of contaminated mud dumped in other disposal areas.” There is no dispute that the “Initial Survey” and the “Final Survey” are carried out at the site of CT9 for submission to the “Employer of the Project”. 61. When clause 2.8 is read with clause 2.1, it is clear that the measurement for final payment under the 21/7 Agreement isbased on in-situ volume before dredging. I believe the provision in clause 1 that the total quantity is subject to the final quantity confirmed by the owner simply provided that the total quantity, whatever it might be, should be measured in the same way. So read, it makes good commercial sense. With respect, I am unable to agree with the interpretation put upon clause 1 by the Court of Appeal. 62. In essence, the effect of the judgment of the Court of Appeal is that the appellant was contractually bound to dump all contaminated mud subject to certain exceptions: Was there anything in any of the agreements which leads one to conclude that the appellant was contractually bound to dump all the contaminated mud from CT9 subject to the limited exceptions[35], such that the appellant would be liable to pay HK$17 per m3 on such volume whether or not they were actually dumped at SEZ. 63. I turn now to 21/7 Agreement with a view to ascertaining whether as a matter of construction when read alone or together with 14/7 Agreement the appellant had bound itself contractually to dump all the contaminated mud from CT9 at SEZ. 64. Clause 1.1 and 1.2 spelled out the duties of the agent. There was no corresponding statement of the obligations of the appellant to dump any amount of mud. As for clause 2.1, I am of the view that the reference to in-situ volume was also concerned with how volume should be measured and did not indicate that there was a contractual obligation to dump any particular amount of contaminated mud. 65. Clause 2.5 covered quantity “The total dumping quantities is estimated to be in the region of 3,000,000 m3, under this agreement actual quantities will be those finally disposed of at the China dumping area through this Contract.” There was no explanation acceptable to the judge from the respondent’s witnesses why the estimated quantity was stated to be in the region of 3,000,000 m3, instead of the known estimate for the total quantity of contaminated mud to be excavated. The learned trial judge regarded the fact that the estimate was given as 3,000,000 m3 to be inconsistent with the construction that the appellant had undertaken to dump all the contaminated mud from CT9 at SEZ. Likewise, that the actual quantity under the agreement should be “those finally disposed of at the China dumping area through this contract”. 66. Clause 2.6 contained the payment schedule. 2.6(a), (b) and (c) covered the first dumping permit. Subsequent permits were covered under 2.6(d) and provided that they should be paid for in advance in accordance with the payment schedule under 2.6(d). 67. Clause 2.8 which provided for final measurement which should be as measured “less any other Survey quantities of contaminated mud dumped in other disposal areas”. 68. Au J was of the view that clause 2.8 was also inconsistent with a construction which required all the mud from CT9 to be dumped at SEZ. Nor did he agree with the submission that “dumping at other disposal areas” only referred to dumping elsewhere in the event of bad weather. The learned judge also noted that neither 14/7 Agreements nor 21/7 Agreement referred to a bad weather exception.[36] 69. The Court of Appeal was of a different view and said: “58. … the reference to other disposal areas in clause 2.8 can easily be construed as a reference to the pre-contract dump as well as these odd bad weather occasions. This interpretation does not do an unacceptable violence to the language of clause 2.8 and, more importantly, it does not flout the commercial sense of the transaction. Equally importantly, this reading of clause 2.8 brings it into complete harmony with clause 1 in the first 14/7 Document, and clauses 2.1, 2.5 and 2.6(c) and (d) of 21/7 Agreement.” 70. The Court of Appeal regarded the words “dumped in other disposal areas” opened to two interpretations. One interpretation, the literal one, supported the appellant case namely that it was not bound to dump all the contaminated mud in SEZ. The other interpretation which the Court of Appeal preferred was that these words referred only to the limited circumstances under which contaminated mud might be dumped elsewhere. The exceptions were pre-contract dumping and bad weather. Since there were two possible constructions they rejected that which they regarded as contrary to business common sense. 71. With respect, I question whether the parties would have seen fit to provide expressly for pre-contract dumping. I rather think it would not have occurred to ordinary business people that such dumping would be covered by a later contract. As for the bad weather exception, the Court of Appeal said: “57. … there was evidence to the effect that after the making of the 14/7 Agreement, the parties did discuss the odd occasion when bad weather in Hong Kong or in South China Sea would prevent dumping operation at the South Erzhou site in which event the dredged mud would have to be dumped in Hong Kong waters.” We have not seen the evidence. It is not suggested that this discussion was the genesis of the provision in clause 2.8. This is slender basis to support the Court of Appeal’s conclusion. 72. Indeed, I do not believe the Court of Appeal based their conclusion on their construction of clause 2.8. Rather, it was their decision that since a literal construction would have flouted the commercial common sense of the transaction, they were entitled not to give a literal construction to clause 2.8. So, ultimately, their conclusion depended on their view of commercial common sense. Issue of Law 73. I turn to the issue of law involved in this appeal ,for which leave to appeal was given, namely, what is the role to be played by considerations of business common sense in determining what the parties meant. In fact, there was no disagreement on the law or the correct approach. 74. On the question of interpretation of commercial contracts. The Chief Judge said and I respectfully agree: “24. … Contracts are not made in a vacuum. In construing a contract, it is important to bear in mind, amongst other things, the context or setting in which a contract was made, and the purpose for which it was made. The test is invariably objective. 25. In relation to a commercial contract, as has been pointed out by Lord Wilberforce in the well known case of Reardon Smith Line Ltd v Hansen Tangen [1976] 1 WLR 989, 995H to 996A, it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.” 75. The purpose of the contract was clear. It was so that contaminated mud from CT9 could be dumped in SEZ. That, however, must not be conflated with a common intention that, even if dumping in Mainland waters did not take place, the appellant would be fully liable for the consequence. They could contract on that basis, whether they have done so, is to be gathered from their contractual documents. 76. With respect, the Chief Judge also correctly pointed out that in determining the meaning of the language of a commercial contract, the law generally favours a commercially sensible construction[37], Lord Clarke said: “… If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.”[38] 77. But it is essential not to lose sight of the fact that: “… the Court’s task is to determine ‘what a reasonable person would have understood the parties to have meant by using the language which they did.’”[39] And that “… If the ordinary meaning of the words makes sense in relation to the rest of the document and the factual background, then the court will give effect to that language, even though the consequences may appear hard for one side or the other...”[40] 78. As well as Neuberger LJ’s important reminder that[41]: “21. … the surrounding circumstances and commercial common sense do not represent a licence to the court to re-write a contract merely because its terms seem somewhat unexpected, a little unreasonable, or not commercially very wise. The contract will contain the words the parties have chosen to use in order to identify their contractual rights and obligations. At least between them, they have control over the words they use and what they agree, and in that respect the words of the written contract are different from the surrounding circumstances or commercial common sense which the parties cannot control, at least to the same extent.” 79. It is true that, in many respects, the contract which the respondent had entered into was disadvantageous to them as events turned out. In my view, that is the consequence of the failure to foresee the risk of no export permit from Hong Kong. I believe, had they perceived the risk, the respondent most assuredly would have contracted differently. But, as I have tried to explain, how differently, would be a matter of negotiation between the appellant and the respondent. Commercial common sense, like commercial purpose must not be seen through the eyes of only one party.[42] Seen from the eyes of the appellant, the conclusion that not only would they have to bear the higher costs of dumping in Hong Kong water, they also have to pay in full for dumping not carried out in Mainland waters, made little commercial common sense. In this case, I do not think commercial common sense provided an answer. With respect, there is no support in the language of the contractual documents for the Court of Appeal’s conclusion, language over which, as Lord Neuburger reminded us, they had control. There is no relevant commercial common sense which would enable the court to override the language used. It was a measurement contract. Counterclaim 80. I have had the advantage of reading Mr Justice Ribeiro PJ’s judgment in draft. I agree with in views on the counterclaim as well as his comments on the lack of pleadings. Indemnity 81. The Court of Appeal reversed the learned trial judge on the respondent’s claim for indemnity. The back-to-back contracts, in respect of which an indemnity was claimed, were predicated on the respondent’s contract being a fixed sum contract. Since it is my view that the contract was a measurement contract, such back-to-back contracts were not entered into in the execution of the respondent’s duty as the appellant’s agent. Ms Cheng did not contend otherwise. Disposition 82. For the above reasons, I would allow the appeal and restore the judgment of Au J, save that the counterclaim is dismissed. Mr Justice Mortimer NPJ: 83. For the reasons given by Mr Justice Tang PJ I would allow the defendant’s appeal and restore Au J’s judgment dismissing the plaintiff’s claim on the main contract and its claims for indemnity. However, for the reasons given by Mr Justice Ribeiro PJ I would dismiss the defendant’s counterclaim. 84. I also agree with Mr Justice Ribeiro PJ’s observations concerning the lack of pleadings on the alternative cases which the judge allowed to be argued. Claims must be made and answered in pleadings or injustice may be the result. Sir Thomas Gault NPJ: 85. For the reasons given by Mr Justice Tang PJ, I agree that the appeal should be allowed and the judgment of Au J restored on the main contractual claim and on the claim for an indemnity. On the counterclaim, I respectfully agree with the judgment of Mr Justice Ribeiro PJ I have read in draft. Mr Justice Chan, Acting CJ: 86. The Court unanimously allows the appeal to the extent that (i) the judgment of Au J dismissing the plaintiff’s claim on the main contract and on its claim for an indemnity be restored, but (ii) his decision giving judgment to the defendant on its counterclaim be set aside. Mr Charles Manzoni SC and Ms Elizabeth Cheung, instructed by Jones Day, for the appellant Ms Teresa Cheng SC and Mr Adrian Lai, instructed by C Y Tsang & Co,for the respondent [1] Bowstead & Reynolds on Agency, 19th ed, 7-056 to 7-058. [2] Ibid, 7-060. [3] Re-Amended Defence §9 and Counterclaim §16. [4] Which Au J unfortunately thought was not relevant: Judgment §42. [5] This payment was obviously never reached. This sub-clause requires no further mention. [6] Erroneously referred to as “the defendant” in the footnote. [7] Judgment §4. [8] Judgment §48(2). [9] Judgment §51. [10] Judgment §60. [11] Judgment §153. [12] Judgment §154. [13] Or, if the HK$8,900,000.00 comprises HK$8,000,000.00 paid under clause 26.a and the HK$900,000.00 paid to the plaintiff on 27 September 2000 and on-paid by the plaintiff to port authorities, and to Wing Yiu, whether those payments are refundable. [14] Au J §46. [15] Au J §49. [16] Au J §50. [17] Au J §§110-126. [18] Judgment §112. [19] A Joint Venture between Hyundai Engineering & Construction Co Ltd (Hyundai) and China Civil Engineering Construction Corporation (CCECC). [20] With the concurrence of Cheung and Yuen JJA [21] The consortium which owned CT9. [22] The appellant. [23] Sinoearn International Ltd, chosen from a short list. [24] Dumping commenced on 2 August 2000. Each permit was for 500,000 m3. [25] They were called back-to-back contracts and described in Au J para 45. [26] Of which HK$8 million was paid on 31.7.2000, HK$7 million of which was paid to SCSB for the first dumping permit, and HK$1 million paid to Zhuhai port authority for port clearance certificate to enable barges to bring the mud to SEZ. The respondent also gave the appellant credit for the $10 million received. [27] Paras 6 &16 of the re-amended statement of claim. [28] The same agreement on which the primary pleaded case was based. The essential contractual documents are discussed below. It seems the only difference between the primary pleaded case and the first alternative case, is that, the former alleged an exact quantity of 6,410,770 m3, whereas in the latter the quantity was “ascertainable and referable to the entire amount … dredged”. The re-amended statement of claim did not mention the bad weather exception so it may be that the bad weather exception was also a difference. [29] The Court of Appeal held that the respondent was entitled to the dumping fee in respect of the first dumping permit, namely, $17 million and regarded the fact that the appellant had not utilized it in full irrelevant. They awarded the respondent HK$8.1 million being the unpaid balance. No award was made in respect of subsequent dumping permits never applied for because of absence of evidence to enable an assessment of damages to be made. The court refused to permit separate assessment of damages. [30] The cost savings was HK$246m and according to Mr Manzoni that was approximately 6% of the main contract sum. [31] There were two addenda with which we are not concerned. [32] Para 52 above. [33] Mr Manzoni SC for the appellant explained: “There would be a significant variation in the measurement of the volume of mud at each of the three stages. This is because of the fact that when the mud is in-situ (i.e., lying on the seabed), it is under immense pressure, both from the hydrostatic pressure of the water and the surcharge from the overlying mud. As the mud is dredged and brought to the surface, it swells significantly due to a drop in the surrounding pressure. The volume of the contaminated mud in the barge will therefore be significantly greater than its in-situ volume before dredging. After it is dumped, the mud is once again brought under pressure and will undergo contraction, the extent of which will depend on the depth at which it is dumped.” [34] Mr Manzoni explained and I agree that it makes commercial sense to adopt a different method of measurement for the purpose of interim payment to avoid the costs and inconvenience of a precise measurement which is required for measurement of final volume. [35] Namely, pre-contract dumping and dumping due to bad weather. Para 60, Court of Appeal. [36] The learned judge did not refer to pre-contract dumping. It appears from the judgment of Au J that the argument about the bad weather exception was raised at paras 95-99 of Ms Cheng’s final submissions. [37] In Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, per Lord Steyn at page 771. [38] In Rainy Sky SA v Kookmin Bank [2011] 1 WLR 2900 at para 21. [39] Ribeiro PJ in Champion Concorde Ltd v Lau Koon Foo (2011) 14 HKCFAR 534. [40] Lord Hoffmann in Jumbo King Ltd v Faithful Properties Ltd and others (1999) 2HKCFAR 279. [41] 		Skanska Rashleigh Weatherfoid Ltd v Somerfield Stores Ltd [2006] EWCA Civ 1732. [42] Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd [1990] 1QB 818 at 870G where May LJ said: “It is nonetheless important, in attributing a purpose to a commercial transaction, to be sure that it is the purpose of both parties and not just one. If the purpose of the transaction is seen through the eyes of one party only an unbalanced view of the transaction may result. Many contracts represent a compromise between what one party wishes to obtain and the other is willing to give.”
The Court: 1. In this appeal, it falls to the Court to consider the provisions governing the grant of bail to a person charged with an offence under the National Security Law[1] (“NSL”). A. The proceedings below 2. On 12 December 2020, the respondent, Mr Lai Chee Ying (“Mr Lai”), was charged with one count of “collusion with a foreign country or with external elements to endanger national security” under Article 29(4) of the NSL (“NSL 29(4)”).[2] The particulars of the charge allege that between 1 July 2020 and 1 December 2020, Mr Lai requested a foreign country or an institution, organisation or individual outside the Mainland, Hong Kong, and Macao of the People’s Republic of China (“PRC”), to impose sanctions or blockade, or engage in other hostile activities against the Hong Kong Special Administrative Region (“HKSAR”) or the PRC. Earlier, on 2 December 2020, Mr Lai had been charged with one count of fraud, but that charge is not presently relevant. 3. The Chief Magistrate, Mr Victor So, refused bail and remanded the respondent in custody.[3] The Record of Bail Proceedings indicates that the Chief Magistrate considered that there were substantial grounds for believing that the accused would fail to surrender to custody or commit an offence while on bail. His reasons for forming that opinion included the nature and seriousness of the alleged offence. He also indicated that he had considered NSL 42, which is central to this appeal and set out below.[4] 4. On 23 December 2020, on the respondent’s application, Alex Lee J granted him bail pursuant to section 9J of the Criminal Procedure Ordinance (“CPO”)[5] subject to the respondent providing the undertaking offered by him in the following terms: 1. The respondent is to undertake not to engage directly or indirectly in conduct which may reasonably be regarded as requesting a foreign country or an institution, organization or individual outside the mainland, Hong Kong, and Macao of the People’s Republic of China (“PRC”), to impose sanction or blockade, or to engage in other hostile activities against the PRC and the HKSAR. 2. In particular, the respondent shall not:- (1) Meet with any officials of a foreign government; (2) Attend or host any interviews, television, radio or online programmes; (3) Publish any articles in paper or in digital form; (4) Make any posts/comments/messages on social media platforms including but not limited to Twitter. 5. Bail was also granted subject to the following conditions, namely:- (a) Reside at address given; (b) The respondent shall be confined to the said address except for reporting to police station and attending court; (c) Not to leave Hong Kong; (d) Surrender all travel documents prior to release; (e) Report to Kowloon City Police Station every Monday, Wednesday and Friday between 3 and 6 pm; (f) HKD 5 million cash for the Fraud case and HKD 5 million cash for the NSL case; (g) Three cash sureties in the sum of HKD 50,000 each for the Fraud case and the NSL case respectively. Reasons for the Judge’s grant of bail were handed down on 29 December 2020.[6] 6. The prosecution sought leave to appeal to this Court putting forward two questions as being of the requisite importance. The first was as to whether the Court has jurisdiction to entertain an appeal against the grant or refusal of bail below. Leave was refused on that ground, the Appeal Committee[7] holding that since a bail decision is not final, it was not reasonably arguable that such jurisdiction exists.[8] 7. Leave to appeal was, however, granted on the second question which seeks the Court’s ruling on the correct interpretation of Article 42(2) of the NSL (“NSL 42(2)”) which provides: “No bail shall be granted to a criminal suspect or defendant unless the judge has sufficient grounds for believing that the criminal suspect or defendant will not continue to commit acts endangering national security.” 8. Determination of the meaning and effect of NSL 42(2) requires that provision to be examined in the light of the context and purpose of the NSL as a whole, taking into account the constitutional basis upon which the NSL is applied in the HKSAR. B. The formulation and application of the NSL to the HKSAR 9. Since the PRC’s resumption of the exercise of sovereignty over Hong Kong on 1 July 1997, the HKSAR has been constitutionally obliged to enact a National Security Law. Article 23 of the Basic Law (“BL 23”) provides: “The Hong Kong Special Administrative Region shall enact laws on its own to prohibit any act of treason, secession, sedition, subversion against the Central People’s Government, or theft of state secrets, to prohibit foreign political organizations or bodies from conducting political activities in the Region, and to prohibit political organizations or bodies of the Region from establishing ties with foreign political organizations or bodies.” 10. Although a draft law was prepared after widespread consultation by the HKSAR Government in 2003, it was withdrawn in the face of political opposition and no such law has been locally enacted despite the passage of some 23 years. In the wake of serious and prolonged disturbances to public order and challenges to the authority of the HKSAR and PRC governments in recent months,[9] the Central Authorities considered the absence of national security legislation unacceptable and decided to take such legislation into their own hands. As NSL 1 states, the NSL: “... is enacted, in accordance with the Constitution of the People’s Republic of China, the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, and the Decision of the National People’s Congress on Establishing and Improving the Legal System and Enforcement Mechanisms for Safeguarding National Security in the Hong Kong Special Administrative Region ...” 11. The reference to the abovementioned Decision of the National People’s Congress (“NPC”) is to its Decision dated 28 May 2020 (which has been referred to as “the 5.28 Decision”) forming part of the process of formulating and applying the NSL to the HKSAR. Given the special status of the NSL as a national law applied under Article 18 of the Basic Law (as will be discussed) and given the express reference in NSL 1 to that process, regard may properly be had to the Explanations and Decisions made in proceedings of the NPC and the NPC Standing Committee (“NPCSC”) regarding promulgation of the NSL as a law of the HKSAR as extrinsic materials relevant to consideration of the context and purpose of the NSL.[10] 12. The process started with the Explanation of a Draft Decision (which was subsequently to become the “5.28 Decision”) presented to the NPC on 22 May 2020.[11] The Explanation began by identifying the concerns of the Central Authorities in the light of recent events in Hong Kong: “At present, the increasingly notable national security risks in the HKSAR have become a prominent problem. In particular, since the onset of Hong Kong’s ‘legislative amendment turmoil’ in 2019, anti-China forces seeking to disrupt Hong Kong have blatantly advocated such notions as ‘Hong Kong independence’, ‘self-determination’ and ‘referendum’, and engaged in activities to undermine national unity and split the country. They have brazenly desecrated and defiled the national flag and emblem, incited Hong Kong people to oppose China and the Communist Party of China (‘CPC’), besiege Central People's Government (‘CPG’) offices in Hong Kong, and discriminate and ostracize Mainland personnel in Hong Kong. These forces have also wilfully disrupted social order in Hong Kong, violently resisted police enforcement of the law, damaged public facilities and property, and paralyzed governance by the government and operation of the legislature. Moreover in recent years, certain foreign or external forces have flagrantly interfered in Hong Kong's affairs. They have made intervention and created disturbances in various ways, such as by legislative and administrative means and through non-governmental organizations. In collusion with those anti-China Hong Kong disrupters, these forces of the same ilk backed and cheered on the disrupters and provided a protective umbrella, and utilized Hong Kong to carry out activities endangering national security. These acts and activities have seriously challenged the bottom line of the ‘One Country, Two Systems’ principle, seriously undermined the rule of law, and seriously jeopardized national sovereignty, security and development interests.” 13. The Explanation went on to note that the HKSAR’s failure to enact BL 23 legislation gave rise to the proposal that steps be taken at the national level to “establish and improve the legal system and enforcement mechanisms for the HKSAR to safeguard national security, and to change its long-term ‘defenceless’ condition in the field of national security”. It identified five basic principles underlying the proposals which may be summarised as follows: (a) First, “resolutely safeguarding national security”; (b) Secondly, “upholding and enhancing the ‘One Country, Two Systems regime’”; (c) Thirdly, adhering to “administering Hong Kong in accordance with the law” and resolutely upholding “the constitutional order in the HKSAR as established by the Constitution and the Hong Kong Basic Law”; (d) Fourthly, resolutely opposing external interference; and (e) Fifthly, “fully safeguarding the legitimate rights and interests of Hong Kong residents”. 14. Elaborating upon the fifth basic principle, the Explanation states: “Safeguarding national security is fundamentally consistent with respecting and protecting human rights. The tiny number of criminal offences which jeopardize national security should be effectively prevented, suppressed and punished in accordance with the law. This aims to better protect the lives, property, fundamental rights and freedoms of the vast majority of Hong Kong residents. Any work and law enforcement to safeguard national security must be conducted in strict compliance with the legal requirements, statutory powers and functions, and statutory procedures. It shall not infringe upon the legitimate rights and interests of any Hong Kong resident, legal person or other organization.” 15. The aforesaid Explanation was adopted by the NPC in making its 5.28 Decision.[12] Having noted the national security risks, unlawful activities and foreign interference referred to, the NPC made its Decision entrusting the NPCSC: “... to formulate relevant laws on establishing and improving the legal system and enforcement mechanisms for the HKSAR to safeguard national security, in order to effectively prevent, stop and punish acts and activities to split the country, subvert state power, organise and carry out terrorist activities and other behaviours that seriously endanger national security, as well as activities of foreign or external forces interfering in the affairs of the HKSAR. …”[13] 16. It was left to the NPCSC to decide to include the relevant laws in Annex III of the Basic Law of the HKSAR of the PRC “to be promulgated and implemented by the HKSAR locally”.[14] 17. The Basic Law provisions in question are BL 18(2) and (3) which provide: “(2) National laws shall not be applied in the Hong Kong Special Administrative Region except for those listed in Annex III to this Law. The laws listed therein shall be applied locally by way of promulgation or legislation by the Region. (3) The Standing Committee of the National People’s Congress may add to or delete from the list of laws in Annex III after consulting its Committee for the Basic Law of the Hong Kong Special Administrative Region and the government of the Region. Laws listed in Annex III to this Law shall be confined to those relating to defence and foreign affairs as well as other matters outside the limits of the autonomy of the Region as specified by this Law.” 18. The next step in the process was preparation of the Draft NSL and an Explanation of that Draft which was presented to the NPCSC on 18 June 2020.[15] The five basic principles mentioned above were reiterated and the main contents of the Draft Law were elucidated. Certain “working principles” adopted in the Draft were identified. These focus on improving the HKSAR’s system, addressing institutional deficiencies and “shortcomings”, assigning responsibilities and coordinating institutional arrangements in relation to safeguarding national security. Notably, the fifth working principle was stated to be: “... accommodating the differences between Mainland China and the HKSAR, and striving to address the convergence, compatibility and complementarity between this Law, and the relevant national laws and local laws of the HKSAR.” 19. The NPCSC having decided to adopt the Draft NSL, there followed an Explanation of a Draft Decision of the NPCSC to add it to the list of laws in Annex III of the Basic Law.[16] Having referred to BL 18 regarding the categories of national laws that may be locally applied by that constitutional route, the Explanation noted that: “… Safeguarding national security is a matter within the purview of the Central Authorities. The Central People's Government has an overarching responsibility for national security affairs relating to the HKSAR. …” It accordingly declared that: “… The National Security Law formulated by the NPC Standing Committee in accordance with the Decision falls within the scope of laws which should be listed in Annex III to the Hong Kong Basic Law. …” 20. On 30 June 2020, the NPCSC duly decided to add the NSL to the list of laws in Annex III of the Basic Law to be applied locally by way of promulgation by the HKSAR.[17] It was accordingly promulgated by the Chief Executive of the HKSAR who gave notice that the NSL as scheduled to the Promulgation applies as from 11 p.m. on 30 June 2020.[18] 21. On 6 July 2020, the NPCSC was addressed regarding completion of the NSL’s adoption.[19] The Address stated: “… In upholding the policy of ‘One Country, Two Systems’, the Law has full regard to the differences between the Two Systems as well as the actual circumstances in Hong Kong. It converges with the national law on safeguarding national security and is compatible with Hong Kong’s existing legal system. …” 22. It expressed confidence that upon its implementation, the NSL would “play a significant role” in achieving the five basic principles mentioned above and notably added: “… The Law expressly stipulates that human rights shall be respected and protected in safeguarding national security in the HKSAR. The rights and freedoms, including the freedoms of speech, of the press, of publication, of association, of assembly, of procession and of demonstration, which the residents of the HKSAR enjoy shall be protected in accordance with the law. The Law also fully reflects the internationally-practised rule-of-law principles such as conviction and punishment of crimes as prescribed by law, presumption of innocence, protection against double jeopardy, protection of parties’ rights in litigation and to fair trial.” C. The NSL 23. The following provisions of the NSL are of immediate relevance. 24. NSL 1 expressly sets out the purpose the Law, reflecting the basic principles referred to in the abovementioned Explanations and Decisions: “This Law is enacted, in accordance with the Constitution of the People’s Republic of China, the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, and the Decision of the National People’s Congress on Establishing and Improving the Legal System and Enforcement Mechanisms for Safeguarding National Security in the Hong Kong Special Administrative Region, for the purpose of: • ensuring the resolute, full and faithful implementation of the policy of One Country, Two Systems under which the people of Hong Kong administer Hong Kong with a high degree of autonomy; • safeguarding national security; • preventing, suppressing and imposing punishment for the offences of secession, subversion, organisation and perpetration of terrorist activities, and collusion with a foreign country or with external elements to endanger national security in relation to the Hong Kong Special Administrative Region; • maintaining prosperity and stability of the Hong Kong Special Administrative Region; and • protecting the lawful rights and interests of the residents of the Hong Kong Special Administrative Region.” 25. NSL 3 declares that the CPG has an overarching responsibility for the HKSAR’s national security affairs and that the HKSAR, its executive, legislative and judicial authorities are duty-bound to safeguard national security.[20] 26. NSL 4 makes it plain that human rights and fundamental freedoms under the laws of the HKSAR are to be respected and protected while safeguarding national security in the Region: “Human rights shall be respected and protected in safeguarding national security in the Hong Kong Special Administrative Region. The rights and freedoms, including the freedoms of speech, of the press, of publication, of association, of assembly, of procession and of demonstration, which the residents of the Region enjoy under the Basic Law of the Hong Kong Special Administrative Region and the provisions of the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights as applied to Hong Kong, shall be protected in accordance with the law.” 27. NSL 5 affirms adherence to the principle of the rule of law while enforcing the law against offences endangering national security: “The principle of the rule of law shall be adhered to in preventing, suppressing, and imposing punishment for offences endangering national security. A person who commits an act which constitutes an offence under the law shall be convicted and punished in accordance with the law. No one shall be convicted and punished for an act which does not constitute an offence under the law. A person is presumed innocent until convicted by a judicial body. The right to defend himself or herself and other rights in judicial proceedings that a criminal suspect, defendant, and other parties in judicial proceedings are entitled to under the law shall be protected. No one shall be liable to be tried or punished again for an offence for which he or she has already been finally convicted or acquitted in judicial proceedings.” 28. Specific provision is made in NSL 41 and NSL 42 regarding procedural matters, especially in NSL 42(2) with regard to bail, which is central to this appeal. Those provisions are set out below[21] and will require detailed examination. 29. While it is evident that the legislative intention is for the NSL to operate in tandem with the laws of the HKSAR, seeking “convergence, compatibility and complementarity” with local laws,[22] NSL 62 provides for possible inconsistencies, giving priority to NSL provisions in such cases: “This Law shall prevail where provisions of the local laws of the Hong Kong Special Administrative Region are inconsistent with this Law.” D. Jurisdiction 30. The first issue that divides the parties concerns the extent of the Court’s powers of constitutional review in connection with provisions of the NSL in general and NSL 42(2) in particular. 31. Mr Anthony Chau[23] submits that there is no jurisdiction to exercise such constitutional review powers. He relies in support on the decision of this Court in Ng Ka Ling v Director of Immigration (No 2)[24] holding that: “... the Court accepts that it cannot question[,] the authority of the National People's Congress or the Standing Committee to do any act which is in accordance with the provisions of the Basic Law and the procedure therein.” 32. As we have seen, promulgation of the NSL as a law of the HKSAR was the product of the NPC’s 5.28 Decision and the NPCSC’s formulation and listing of the NSL in Annex III of the Basic Law. This was done in accordance with BL 18(2) and (3) on the footing that safeguarding national security is a matter outside the limits of the HKSAR’s autonomy and within the purview of the Central Authorities, the CPG having an overarching responsibility for national security affairs relating to the HKSAR. Mr Stewart Wong SC[25] does not suggest the contrary. It follows, Mr Chau submits, that there is no room for holding that the NSL or any of its provisions are unconstitutional or incompatible with the Basic Law or with the ICCPR as applied to Hong Kong[26] as that would amount to a challenge to legislative acts of the NPC and NPCSC done in accordance with the provisions of the Basic Law and the procedure therein. 33. Mr Wong SC submits that he is not seeking to suggest that the NSL as a whole or that any provision thereof is unconstitutional so that the jurisdiction argument is irrelevant. He invokes the principle of legality[27] for the proposition that a remedial interpretation involving a reading down of NSL 42(2) is required. His argument is that: “What needs to be justified ... is not NSL itself or steps taken by the Central or Hong Kong Governments on matters of national security ..., but any measures intruding on the presumption of innocence and right to liberty.”[28] 34. However, with respect, in arguing for the necessity of such justification, he is in fact endeavouring to mount a constitutional challenge. Thus, he submits: “NSL is subject to and cannot override BL or ICCPR: it is untenable that the Hong Kong Courts, entrusted with the upholding of BL, cannot deal with its compatibility with those documents, and therefore its constitutionality.”[29] 35. The proposition, as developed in the respondent’s Written Case, is that NSL 42(2) derogates from constitutionally protected rights, including the right to bail and the right to personal liberty, and must be justified as being intrusions which are no more than reasonably necessary[30] and must be held invalid unless justified or remedially interpreted: “... it has consistently been held that where the relevant legislation places the burden on an accused in a bail application to show why bail should be granted, the legislation is in derogation of the constitutional rights of the accused and is invalid unless justified or remedially interpreted. …”[31] 36. The respondent’s argument is that NSL 42(2) places a burden on the accused to establish that bail should be granted, thereby constituting a derogation from the presumption of innocence and the right to bail and requiring that provision to be read down so as to place a burden on the prosecution instead.[32] The question of whether NSL 42(2) involves any burden of proof is discussed below. However, for the purposes of the present discussion, we are unable to accept Mr Wong SC’s argument. 37. In our view, in the light of Ng Ka Ling v Director of Immigration (No 2),[33] the legislative acts of the NPC and NPCSC leading to the promulgation of the NSL as a law of the HKSAR, done in accordance with the provisions of the Basic Law and the procedure therein, are not subject to review on the basis of any alleged incompatibility as between the NSL and the Basic Law or the ICCPR as applied to Hong Kong. E. Construction of NSL 42(2) E.1 The approach to construing NSL 42(2) 38. NSL 41 materially provides: “(1) This Law and the laws of the Hong Kong Special Administrative Region shall apply to procedural matters, including those related to criminal investigation, prosecution, trial, and execution of penalty, in respect of cases concerning offence endangering national security over which the Region exercises jurisdiction. (2) 	No prosecution shall be instituted in respect of an offence endangering national security without the written consent of the Secretary for Justice. This provision shall not prejudice the arrest and detention of a person who is suspected of having committed the offence or the application for bail by the person in accordance with the law. ...” [34] 39. And NSL 42 states: (1)	When applying the laws in force in the Hong Kong Special Administrative Region concerning matters such as the detention and time limit for trial, the law enforcement and judicial authorities of the Region shall ensure that cases concerning offence endangering national security are handled in a fair and timely manner so as to effectively prevent, suppress and impose punishment for such offence. (2)	No bail shall be granted to a criminal suspect or defendant unless the judge has sufficient grounds for believing that the criminal suspect or defendant will not continue to commit acts endangering national security. 40. Two features of these Articles are prominent and highly relevant: (a) Both Articles expressly envisage the granting of bail in cases involving offences of endangering national security. Thus, NSL 41(2) provides that while the consent of the Secretary for Justice is required to institute a prosecution, the fact that such consent has not been obtained does not prejudice proceeding with a person’s arrest, detention and application for bail in accordance with law. And NSL 42(2), as further discussed below,[35] spells out a threshold requirement for the grant of bail in cases involving offences of endangering national security. (b) Both Articles also make it clear that in respect of offences of endangering national security, the laws of the HKSAR “shall apply to procedural matters”, including matters related to criminal investigation, prosecution, trial, and execution of penalty, as well as matters such as detention and time limit for trial. The rules governing bail in general therefore operate in national security cases subject to any specific changes effected by NSL 42(2) which are made to prevail by NSL 62. 41. NSL 4 and NSL 5, reflecting presentations to the NPC and NPCSC set out above,[36] which emphasise protection and respect for human rights and adherence to rule of law values while safeguarding national security, are also centrally important to the interpretation of the NSL generally and NSL 42(2) in particular. 42. We have decided that there is no power to hold any provision of the NSL to be unconstitutional or invalid as incompatible with the Basic Law and Bill of Rights. However, that is not at all to say that human rights and freedoms and rule of law values are inapplicable. On the contrary, NSL 4 and NSL 5 expressly stipulate that those rights, freedoms and values are to be protected and adhered to in applying the NSL. They provide the context in which NSL 42(2) must be construed and applied. As far as possible, NSL 42(2) is to be given a meaning and effect compatible with those rights, freedoms and values. Save insofar as NSL 42(2) constitutes a specific exception thereto, that corpus of law, comprising not only the human rights and rule of law principles but also the generally applicable HKSAR rules governing the grant or refusal of bail is intended to have continued effect in NSL cases. As it was put by this Court in a comparable situation,[37] the specific exception is intended to operate in tandem with constitutional rights and freedoms and other applicable statutory norms as part of a coherent whole. 43. On this aspect of NSL 42(2)’s construction, there appears to be a measure of common ground between the parties. Thus, subject to the asserted absence of jurisdiction to hold any Article of the NSL unconstitutional, the appellant submits that: “... the Hong Kong courts should construe NSL and BL as a coherent whole, with the caveat that NSL is a national law that deals specifically with national security and that it is a well-established principle of construction that the general does not derogate from the special.”[38] 44. On behalf of the respondent, it is stated that he: “... agrees that NSL and BL (as well as ICCPR as applied to Hong Kong) should be construed as a coherent whole, and NSL42(2) can and should (as NSL4 mandates) be construed in a manner which is compatible with, and continues to respect and protect, the fundamental rights accorded by BL and ICCPR, ...”[39] E.2 The context of NSL 42(2) 45. The aforesaid approach makes it appropriate to examine the matrix in which NSL 42(2) exists, consisting of the applicable human rights and rule of law principles, the rules regarding bail under HKSAR law and the provisions of the NSL read as a coherent whole, with a view to ascertaining how NSL 42(2) is intended to operate in that context. 46. As NSL 4 expressly mandates respect for and protection of the rights and freedoms which HKSAR residents enjoy under the Basic Law and the ICCPR as applied to Hong Kong, Article 5(3) of the Bill of Rights (“BOR 5(3)”) is plainly relevant. It states: “Anyone arrested or detained on a criminal charge shall be brought promptly before a judge or other officer authorized by law to exercise judicial power and shall be entitled to trial within a reasonable time or to release. It shall not be the general rule that persons awaiting trial shall be detained in custody, but release may be subject to guarantees to appear for trial, at any other stage of the judicial proceedings, and, should occasion arise, for execution of the judgment.” 47. And since, as we have seen, both NSL 41 and NSL 42 provide for HKSAR laws to apply to procedural matters, including “matters such as detention and time limit for trial” which obviously cover pre-trial detention and bail, it was evidently within the contemplation of the NSL that section 9D(1) of the CPO (“CPO 9D(1)”), implementing BOR 5(3), generally creates a presumption in favour of bail: “Subject to this section and section 9G, a court shall order an accused person to be admitted to bail, whether he has been committed for trial or not, when— (a) he appears or is brought before a court in the course of or in connection with proceedings for the offence of which he is accused; or (b) he applies to the court before which he is accused to be admitted to bail; or (c) he applies to a judge under section 9J to be admitted to bail.” 48. The general scheme applicable in the HKSAR does not give an unqualified right to bail. Thus, the presumption in favour of bail in 9D(1) is “[subject] to this section and section 9G”. CPO 9D(2) states that the grant of bail may be subject to conditions: “An order under subsection (1) [admitting a person to bail] may be subject to such conditions as appear to the court to be necessary to secure that the person admitted to bail will not— (a) fail to surrender to custody as the court may appoint; or (b) commit an offence while on bail; or (c) interfere with a witness or pervert or obstruct the course of justice. 49. Under CPO 9G(1), those three considerations may also provide the basis for refusing bail: “(1) The court need not admit an accused person to bail if it appears to the court that there are substantial grounds for believing, whether or not an admission were to be subject to conditions under section 9D(2), that the accused person would— (a) fail to surrender to custody as the court may appoint; or (b) commit an offence while on bail; or (c) interfere with a witness or pervert or obstruct the course of justice.” 50. CPO 9G(2) lists factors (including the residual factor “any other thing that appears to the court to be relevant”) that may lead the court to conclude that bail should not be granted on one or more of the aforesaid three grounds: “(2) The court in forming an opinion under subsection (1) may have regard to— (a) the nature and seriousness of the alleged offence and, in the event of conviction, the manner in which the accused person is likely to be dealt with; (b) the behaviour, demeanour and conduct of the accused person; (c) the background, associations, employment, occupation, home environment, community ties and financial position of the accused person; (d) the health, physical and mental condition and age of the accused person; (e) the history of any previous admissions to bail of the accused person; (f) the character, antecedents and previous convictions, if any, of the accused person; (g) the nature and weight of the evidence of the commission of the alleged offence by the accused person; (h) any other thing that appears to the court to be relevant.” 51. By virtue of NSL 4, 5, 41 and 42, the aforesaid rules (and other procedural rules relating to applications for bail) are applicable to questions regarding bail in cases involving offences endangering national security, but subject to the specific exception created by NSL 42(2). E.3 The specific exception created by NSL 42(2) 52. It will be recalled that NSL 42(2) provides as follows: “No bail shall be granted to a criminal suspect or defendant unless the judge has sufficient grounds for believing that the criminal suspect or defendant will not continue to commit acts endangering national security.” 53. The following features are noteworthy: (a) The subject-matter of NSL 42(2) overlaps with the subject-matter of CPO 9G(1)(b) which makes the risk of committing an offence while on bail a basis for refusing bail. NSL 42(2) focusses on the risk of the accused committing “acts endangering national security” if bail is granted. (b) However, the starting-point of the inquiry is significantly different. Under CPO 9G(1), bail may be refused if it appears to the court that there are substantial grounds for believing that the accused person would fail to surrender to custody, commit an offence while on bail or interfere with witnesses or pervert or obstruct the course of justice. If such grounds are not positively made out, bail is granted. The rule embodies the presumption in favour of bail. Under NSL 42(2), that presumption is excluded in the first instance. The starting-point is that no bail shall be granted unless the judge has sufficient grounds for believing that the accused “will not continue to commit acts endangering national security”. Plainly, NSL 42(2) introduces a considerably more stringent threshold requirement. Under the CPO, the rule is “grant bail unless there are substantial grounds to believe violation will occur”, while under NSL 42(2) it is “no bail unless there are sufficient grounds to believe violation will not occur”. This is a distinction to which we will return in examining the decision of the learned Judge. (c) The final point of distinction is that NSL 42(2) does not refer to the risk of committing an offence but to a risk that the accused will “continue” to “commit acts endangering national security” if granted bail. Two aspects call for comment. (i) First, the word “continue” must obviously not be read as implying that the accused is somehow to be treated as guilty of having committed such acts before trial. To give it such a meaning would fly in the face of NSL 5’s adherence to the presumption of innocence. “Continuing” may best be understood to involve recognising that the defendant is alleged to have committed an offence or offences involving acts endangering national security and NSL 42(2) requires assurance that he will not commit acts of such a nature if bail is granted. (ii) Secondly, the appellant contends that the word “acts” includes acts which do not constitute of any offence. It is difficult to envisage the accused committing acts endangering national security which would not amount to offences either under the NSL or under HKSAR law.[40] Indeed, it is hard to see why NSL 42(2) would, by its “sufficient grounds” requirement, necessitate refusal of bail because the judge is not satisfied that the accused will not, if given bail, perform acts which would not constitute offences. The logic of the appellant’s construction is that the acts in question may be freely performed by anyone without breaking the law whereas such acts would necessitate refusal of bail. We would therefore construe “acts endangering national security” in the context of the NSL 42(2) requirement as referring to acts of that nature capable of constituting an offence under the NSL or the laws of the HKSAR safeguarding national security. 54. The aforesaid characteristics of NSL 42(2) define its limits as the specific exception carved out from the bail regime which is made otherwise applicable in relation to national security offences by NSL 4, 5, 41 and 42. NSL 42(2) operates in the context or matrix of the existing bail regime and draws on its rules and principles insofar as they may be relevant, while introducing a new and more stringent threshold requirement for the grant of bail. E.4 Two-stage approach and the relevance of bail conditions 55. An issue which arises between the parties involves the appellant’s contention that NSL 42(2) requires adoption of a two-stage approach in which the court should “only consider NSL 42(2)” at the first stage; and in particular, that “bail conditions should not be taken into account when considering whether there are sufficient grounds for believing that the accused will not continue to commit acts endangering national security.”[41] 56. By way of elaboration, the appellant submits that the judge should “consider evidence and all the relevant materials and circumstances which have occurred at the time when considering bail” and decide on that basis alone whether he or she has sufficient grounds to proceed with considering the grant of bail. If not, the judge proceeds no further. Bail conditions are only relevant if the NSL 42(2) requirement is met and the court embarks on the second stage inquiry.[42] The reasons given for taking this approach are that the language of NSL 42(2) imports a higher threshold, qualifying the presumption in favour of bail,[43] and that such an approach is necessary given the primary purpose of the NSL to suppress, etc., acts or activities endangering national security.[44] 57. We do not accept that argument. In the first place, it fails adequately to take account of the nature of bail itself. A person who is admitted to bail, as CPO 9C states, is released by the court from detention “on his undertaking that he shall surrender to custody on the day that the court may appoint”. All bail decisions therefore involve a risk assessment looking to the future: Can the accused’s undertaking to surrender to custody be accepted? Will he offend while on bail? Will he interfere with witnesses or the course of justice? It makes no sense to confine the court to looking only at the evidence available at the time of the bail hearing and to exclude consideration of matters which may have a bearing on the accused’s likely conduct pending the trial. Such matters include the potentially preventive effect of appropriate bail conditions which might be put in place. Of course in any given case, the judge, in answering the NSL 42(2) question, may decide that in all the circumstances, and having duly considered possible bail conditions, he or she does not have sufficient grounds for believing that the defendant will not continue to commit acts endangering national security and thus refuse bail. But it makes no sense presumptively to exclude bail conditions from consideration. 58. Secondly, the applicability of the general bail regime mandated by NSL 4, 5, 41 and 42, subject to the specific exception introduced by NSL 42(2), supports taking account of bail conditions. Thus, CPO 9D(2) provides for the imposition of bail conditions “to secure” that the person admitted to bail will duly surrender to custody and will not commit violations during the period of bail. There is in principle, no reason why the judge, in asking whether he or she has “sufficient grounds”, should not have regard to CPO 9D(2) and factor in any possible bail conditions aimed at securing that the accused will not commit acts endangering national security if granted bail. The defendant will be aware that bail will immediately be revoked if any bail condition is breached. The imposition of appropriate conditions therefore possesses a deterrent value that may plainly be relevant to the risk assessment. 59. As we have seen, CPO 9G(2) lists factors which bear on the risk assessment including the nature and seriousness of the alleged offence and potential punishment on conviction; the defendant’s behaviour, demeanour and conduct; his background, associations, employment, occupation, home environment, community ties and financial position; his health, physical and mental condition and age; his history of any previous admissions to bail; his character, antecedents and previous convictions, if any; the nature and weight of the evidence of the commission of the alleged offence by the accused person; and the residual reference to “any other thing that appears to the court to be relevant”. 60. Those factors are undoubtedly primarily aimed at assessing the accused as a possible flight risk. But they are also relevant to other potential violations and quite capable in particular cases of being relevant to the “sufficient grounds” question under NSL 42(2). Thus, for example, the nature and seriousness of the national security offence charged is likely to be an important factor. So are the past conduct of the accused, his associations and financial position, and the weight of the evidence against him. CPO 9G(2)(h) enjoins the court to take into account “any other thing that appears to the court to be relevant”. That plainly includes any bail conditions fashioned with a view to securing that the accused will not commit acts endangering national security. 61. The reasons advanced by the appellant for excluding bail conditions when answering the “sufficient grounds” question are unconvincing. We are unable to see how the fact that the language of NSL 42(2) imports a different and more stringent threshold for bail somehow leads to the conclusion that bail conditions should be excluded in a sealed-off first stage inquiry. Such a conclusion is at odds with the language of the relevant NSL provisions discussed above. 62. The cardinal importance of the primary purpose of the NSL, namely to safeguard national security and to prevent and suppress acts endangering national security, is clear. That is why changes, including the NSL 42(2) exception applying more stringent conditions to the grant of bail in relation to offences endangering national security have been introduced. But it does not follow, especially in the light of NSL 4, 5, 41 and 42, that consideration of possible bail conditions should be excluded when deciding the “sufficient grounds” question. 63. Whether any possible bail conditions would give the magistrate or judge dealing with the bail application sufficient grounds for believing that the criminal suspect or defendant will not continue to commit acts endangering national security in any given case is of course a separate matter for assessment by the magistrate or judge. E.5 Burden of proof 64. The respondent contends that as a general rule, the prosecution bears the burden of proof in establishing that bail should not be granted and that nothing in NSL 42(2) changes that.[45] The proposition is therefore that the burden is on the prosecution to prove that bail should be refused under NSL 42(2).[46] On the other hand, the appellant argues that the burden of proof is not engaged when the “sufficient grounds” assessment is being conducted by the court.[47] It argues that the burden of proof is only relevant to trial where the presumption of innocence is adhered to in that, whether or not bail is granted, the burden remains on the prosecution to prove offences endangering national security beyond reasonable doubt.[48] 65. Thus the question which arises is whether, on the respondent’s reasoning, a burden of proof relating to refusal of bail rests on the prosecution. 66. Where a presumption in favour of bail operates (as under BOR 5(3) and CPO 9D(1)) one may broadly, if perhaps loosely, speak of the prosecution having the overall onus of displacing that presumption and showing that grounds exist for detaining the accused pending trial (even if a burden of proof does not strictly arise). The respondent cites various authorities (generally in cases which do not involve national security offences) in which such sentiments have been expressed. Moreover, the respondent points to cases, particularly in the Strasbourg jurisprudence, disapproving of legislation of Member States which expressly placed a burden on a suspect to prove that he should be granted bail. 67. We do not, however, accept the respondent’s line of argument. In the first place, the grant or refusal of bail under our laws does not involve the application of a burden of proof, so that there is no burden resting on either party, and no burden to be imposed on the prosecution. Secondly, the cases which proceed from a presumption in favour of bail are inapplicable in the present appeal since, for the reasons developed in this judgment, NSL 42(2) constitutes a specific exception which, by virtue of NSL 62, displaces CPO 9D(1) and the presumption in favour of bail at the initial stage of the assessment. 68. As previously pointed out, the rules as to the grant or refusal of bail by their nature involve a risk assessment as to the conduct of the accused in the future, an assessment that does not lend itself to strict proof at the bail hearing. Instead, as the provisions of the CPO indicate, the decision whether or not to grant bail or other decisions involving a predictive and evaluative exercise, are a “juridical exercise carried out by the court [as] an exercise in judgment or evaluation, not the application of a burden of proof”.[49] This is apparent from the provisions of the CPO. Thus: (a) The language of the relevant CPO provisions consistently refers to what may “appear to the court” to be required, not what has to be established by one or other of the parties.[50] (b) Similarly, in deciding whether to grant bail, the court is to take into account various factors including “any other thing that appears to the court to be relevant.”[51] These include, for instance, “the character, antecedents and previous convictions, if any, of the accused person” which would be excluded as inadmissibly prejudicial at a trial where the prosecution has a strict burden of proof.[52] (c) In dealing with applications by the Secretary for Justice to review decisions granting bail, CPO 9H(4) provides that the Secretary “shall be entitled to put before the judge such relevant argument and such relevant matter as he thinks proper” and also that “the person admitted to bail shall also be entitled to be heard”, which is not language suggesting that either has a burden of proof to discharge in relation to bail. (d) CPO 9N is explicit as to the court’s inquisitorial powers in a bail setting: “... the court may, subject to paragraph (b),[53] make such inquiries of and concerning the person being the subject of those proceedings as the court considers desirable”. It enables the prosecution to submit evidence “by affidavit or otherwise” which would be inadmissibly prejudicial at a trial where the prosecution has a strict burden of proof, including evidence that the accused had previously been charged with or convicted of another criminal offence. (e) The statutory regime recognises these potentially prejudicial aspects of what the court may refer to in imposing restrictions on the reporting of bail proceedings.[54] 69. Although we have concluded that there is no formal burden of proof on the prosecution in relation to the “sufficient grounds” requirement in NSL 42(2), it is noteworthy that there are other common law jurisdictions where, in respect of certain classes of offences, not only is there no burden of proof on the prosecution to establish grounds for refusing bail, but a burden is placed on the accused to establish why continued detention, rather than release on bail, is not justified. Thus, the majority of the Supreme Court of Canada has held that the requirement in section 515(6)(d) of the Criminal Code, to the extent that it requires the accused to show cause why pre-trial detention is not justified, does not contravene the Canadian Charter of Rights: R v Pearson.[55] In South Africa, the Constitutional Court has held that the provision in section 60(11) of the Criminal Procedure Act 1977, placing a burden on the accused to show exceptional circumstances exist which in the interests of justice permit his release, if charged with certain scheduled offences, is not unconstitutional: State v Dlamini.[56] In Australia, it has been held that section 15AA of the Crimes Act 1914 (Commonwealth) prevents the court from granting bail in certain cases unless it is satisfied that exceptional circumstances exist to justify bail and this provision requires the applicant to satisfy the court that such circumstances exist: R v NK.[57] F. Conclusions summarised 70. The conclusions we have so far reached may be summarised as follows. (a) The legislative acts of the NPC and NPCSC leading to the promulgation of the NSL as a law of the HKSAR in accordance with the provisions of the Basic Law and the procedure therein, are not subject to constitutional review by the Court on the basis of any alleged incompatibility as between the NSL and the Basic Law or the ICCPR as applied to Hong Kong.[58] (b) NSL 42(2) creates a specific exception to the HKSAR rules and principles governing the grant and refusal of bail, and imports a stringent threshold requirement for bail applications.[59] (c) NSL 42(2) is to be construed and applied with the guarantees of human rights and the rule of law values affirmed by NSL 4 and NSL 5, as well as with the general procedural rules made applicable by NSL 41 and NSL 42, read as a coherent whole. (d) In applying NSL 42(2) when dealing with bail applications in cases involving offences endangering national security, the judge must first decide whether he or she “has sufficient grounds for believing that the criminal suspect or defendant will not continue to commit acts endangering national security”. In doing so: (i) The judge should consider everything that appears to the court to be relevant to making that decision, including the possible imposition of appropriate bail conditions and materials which would not be admissible as evidence at the trial. It may in particular cases be helpful to have regard to factors such as those set out in CPO 9G(2) in connection with the “sufficient grounds” question. (ii) The judge should take the reference to “acts endangering national security” to mean acts of that nature capable of constituting an offence under the NSL or the laws of the HKSAR safeguarding national security. (iii) The judge should regard the NSL 42(2) “sufficient grounds” question as a matter for the court’s evaluation and judgment and not as involving the application of a burden of proof. (e) If, having taken into account all relevant material, the judge concludes that he or she does not have sufficient grounds for believing that the accused will not continue to commit acts endangering national security, bail must be refused. (f) If, on the other hand, the judge concludes that taking all relevant material into account, he or she does have such sufficient grounds, the court should proceed to consider all other matters relevant to the grant or refusal of bail, applying the presumption in favour of bail. This includes consideration of whether there are substantial grounds for believing that the accused would fail to surrender to custody, or commit an offence (not limited to national security offences) while on bail, or interfere with a witness or pervert or obstruct the course of justice. Consideration should also be given to whether conditions aimed at securing that such violations will not occur ought to be imposed.[60] G. The Judge’s decision 71. In granting the respondent bail,[61] the learned Judge Alex Lee J applied legal principles derived from earlier decisions, in particular Tong Ying Kit v HKSAR[62](“Tong (No 1)”) and HKSAR v Tong Ying Kit[63] (“Tong (No 2)”), in which he had taken part. 72. While much of what is said in Tong (No 1) is consistent with the foregoing analysis, that judgment unfortunately falls into error and is flawed in a crucial respect in that it misapprehends the nature and effect of the threshold requirement laid down by NSL 42(2). The Court held that: “The restriction against bail being granted under art.42 is a narrow one. Although the provision is couched in a double negative form, the substantive question which a judge has to ask, when considering the question of bail of a person charged with an offence endangering national security, is whether there are grounds, or reasons, to believe that the accused person will continue to commit ‘acts endangering national security’, ie offences under the National Security Law and not just any act which may in some way be said to endanger national security.”[64] 73. This wrongly translates NSL 42(2)’s “double negative” (“no bail unless the judge has sufficient grounds to believe accused will not commit acts endangering national security before considering the grant of bail”) into a positive requirement that the court has to be satisfied that there do exist grounds to believe that the accused will continue to commit acts endangering national security as a basis for refusing bail. 74. This is not a case where one may arithmetically regard two negatives as producing a positive result. The Court’s approach erroneously re-writes NSL 42(2) and eliminates the more stringent threshold requirement it intentionally imposes as a specific exception to the general principles regarding bail. Consequently, the Court in Tong (No 1) (applied in Tong (No 2) and by the Judge below) erroneously treated NSL 42(2) as having hardly any impact on the generally applicable bail regime under CPO 9D and 9G: “... we consider that, in the vast majority of cases, an accused person who would otherwise be granted bail under s.9D of the CPO will continue to be granted bail notwithstanding art.42, and vice versa. This is because, under s.9G(1)(b) of the CPO, one of the grounds for withholding bail is that there are substantial grounds for believing that the accused person ‘would commit an offence while on bail’. If the judge is minded to grant bail to an accused person, with or without conditions attached, it ordinarily means that he does not consider that there are substantial grounds for believing that the accused person would commit a serious offence while on bail. This consideration must now include an offence endangering national security which, by definition, is a serious one. In a situation where the judge does not consider that there are substantial grounds for believing that the accused person would commit an offence endangering national security if granted bail, there would be no reason for bail to be denied under art.42.”[65] Their Lordships added: “In short, while there may [be] a difference of emphasis between s.9G(1) of the CPO and art.42 of the National Security Law, the impact of art.42 is more apparent than real. The practical application of art.42 is unlikely to result in any different outcome of a bail application in the vast majority of cases.”[66] 75. The words we have italicised above embody the error of treating the NSL 42(2) threshold question as little different from the discretionary ground for refusing bail set out in CPO 9G(1)(b) and thus failing to recognise the differing starting-points or, as Mr Wong SC put it, their different “default positions”, namely, “no bail unless ...” versus “grant bail unless ...”. 76. The abovementioned approach was spelt out in Tong (No 2),[67] where the learned Judge stated: “Therefore, in my judgment, as held in the Habeas Corpus Judgment [ie, Tong (No 1)], while there may a difference of emphasis between s.9G(1) of the CPO and art.42 of the NSL, the latter does not introduce any drastic or significant changes to the existing law and practice regarding bail applications.”[68] 77. It is clear from his Lordship’s Reasons for Ruling below, that he persisted in his erroneous line of reasoning. Thus, he applied the approach adopted in Tong (No 1) and Tong (No 2): “As regards bail applications for accused charged for offences under the NSL, the relevant legal principles have been considered in Tong Ying Kit v HKSAR and HKSAR v Tong Ying Kit. All of which, I am not going to repeat now.”[69] 78. In dealing with the “Merits of the application” regarding the prosecution’s objections to bail, the Judge proceeded to elide the NSL 42(2) question with the CPO 9G discretionary factors, going directly to consideration of the “nature and seriousness of the offence and the weight of the evidence”,[70] reflecting CPO 9G(2)(a) and (g). This was followed by consideration of “risk of absconding,”[71] reflecting CPO 9G(1)(a). 79. His Lordship then considered “Risk of committing offence whilst on bail”[72] which is the language of CPO 9G(1)(b) rather than that of NSL 42(2), even though he went on to quote NSL 42(2) and to hold that he was duly satisfied that he had “sufficient grounds to believe that the accused will not commit acts endangering national security for the future if bail is granted”.[73] 80. The aforesaid approach is clearly inconsistent with the analysis which has been developed in this judgment and cannot be supported. The learned Judge misconstrued NSL 42(2) and misapprehended the nature and effect of the threshold requirement created. Although he purported to apply the correct legal test, his Lordship in fact adopted an erroneous approach by eliding the NSL 42(2) question with the discretionary considerations set out in CPO 9G and never made a proper assessment under NSL 42(2).[74] The appellant’s appeal must accordingly be allowed and the Judge’s decision to grant the respondent bail must be set aside. 81. As was pointed out in the Determination granting leave to appeal,[75] the question before the Court is of a limited nature. If so advised, the respondent may make a fresh application for a review of the Chief Magistrate’s refusal of bail, but it falls outside the jurisdiction of the Court to conduct such a review. In the meantime, the respondent is remanded in custody. Mr Anthony Chau, DDPP (Ag), Mr Ivan Cheung, SPP and Ms Crystal Chan, PP, of the Department of Justice, for the Appellant Mr Stewart Wong, SC, Ms Maggie Wong, SC and Mr Lee Siu Him, instructed by Robertsons, for the Respondent [1] The Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region, applied to the HKSAR on 30 June 2020. [2] NSL 29 materially provides: “A person ... who requests a foreign country or an institution, organisation or individual outside the mainland, Hong Kong, and Macao of the People’s Republic of China, ... to commit any of the following acts shall be guilty of an offence: ... (4) imposing sanctions or blockade, or engaging in other hostile activities against the Hong Kong Special Administrative Region or the People’s Republic of China. …” It is punishable by a sentence of imprisonment of a fixed term of not less than three years but not more than ten years; and in respect of “an offence of a grave nature” by imprisonment for life or for a fixed-term of not less than ten years. [3] WKCC 4341/2020 (12 December 2020). [4] At §39. [5] Cap 221. [6] [2020] HKCFI 3161. [7] Ma CJ, Ribeiro and Cheung PJJ [2020] HKCFA 45 (31 December 2020). [8] By virtue of section 31 of the Hong Kong Court of Final Appeal Ordinance (Cap 484). [9] Events in recent months are described in this Court’s judgment in Kwok Wing Hang v Chief Executive in Council [2020] HKCFA 42, at Section C.1. [10] Cf, Director of Immigration v Chong Fung Yuen (2001) 4 HKCFAR 211 at 224-225. [11] Presented by Mr Wang Chen, Vice Chairman of the NPCSC: Explanation on “The Draft Decision of the National People’s Congress on Establishing and Improving the Legal System and Enforcement Mechanisms for the Hong Kong Special Administrative Region to Safeguard National Security” Addressing the Third Session of the Thirteenth National People’s Congress on 22 May 2020. [12] Decision of the National People’s Congress on Establishing and Improving the Legal System and Enforcement Mechanisms for the Hong Kong Special Administrative Region to Safeguard National Security (Adopted at the Third Session of the Thirteenth National People’s Congress on 28 May 2020) (L.N. 135 of 2020). [13] 5.28 Decision, §6. [14] Ibid. [15] Explanation on the “Draft Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region” addressed to the 19th Session of the 13th Standing Committee of the National People’s Congress by the Responsible Official of the Legislative Affairs Commission under the Standing Committee of the National People’s Congress (18 June 2020). [16] Explanation on “The Draft Decision of the Standing Committee of the National People’s Congress on Adding a Law to the List of the National Laws in Annex III to the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China” Addressing the Twentieth Session of the Standing Committee of the Thirteenth National People’s Congress on 30 June 2020 by Mr Shen Chunyao, Director of the Legislative Affairs Commission under the NPCSC. [17] Decision of the Standing Committee of the National People’s Congress on Adding a Law to the List of the National Laws in Annex III to the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China (Adopted at the Twentieth Session of the Standing Committee of the Thirteenth National People’s Congress on June 30, 2020), Instrument A117. [18] Promulgation of National Law 2020, Instrument A406. [19] Address at the Twentieth Session of the Standing Committee of the Thirteenth National People’s Congress (30 June 2020) by Mr Li Zhanshu (6 July 2020). [20] NSL 3: “The Central People’s Government has an overarching responsibility for national security affairs relating to the Hong Kong Special Administrative Region. It is the duty of the Hong Kong Special Administrative Region under the Constitution to safeguard national security and the Region shall perform the duty accordingly. The executive authorities, legislature and judiciary of the Region shall effectively prevent, suppress and impose punishment for any act or activity endangering national security in accordance with this Law and other relevant laws.” [21] Section E.1. [22] As pointed out in the Explanation of Draft NSL presented to the NPCSC on 18 June 2020, referred to above, and reiterated in the abovementioned Address to the NPCSC on 6 July 2020 regarding adoption of the NSL. [23] DDPP (Ag), appearing for the appellant with Mr Ivan Cheung and Ms Crystal Chan. [24] (1999) 2 HKCFAR 141 at 142. [25] Appearing for the respondent with Ms Maggie Wong SC and Mr Lee Siu Him. [26] Implemented by the Hong Kong Bill of Rights Ordinance (Cap 383) (“HKBORO”). [27] Respondent’s Written Case §11 (“RC §11”). [28] RC §35. [29] RC §6(1). [30] RC §§24-32. [31] RC §34. [32] RC §38. [33] (1999) 2 HKCFAR 141 at 142. [34] The paragraph numbers have been added for convenience. [35] Section E.3 of this judgment. [36] 22 May 2020 Explanation to the NPC of the Draft 5.28 Decision (§14 above); 6 July 2020 Address to the NPCSC on completion of the NSL’s adoption (§22 above). [37] Comilang Milagros Tecson v Director of Immigration (2019) 22 HKCFAR 59 at §30. There, the exception involved the immigration reservation implemented by section 11 of HKBORO excluding operation of the Bill of Rights regarding certain immigration cases. While the situation is not identical, it is comparable to the situation where NSL 42(2) may be intended to carve out a specific exception from a scheme of rights protection in the bail context. [38] Appellant’s Written Case §4(a) (“AC §4(a)”). The proposition in the latter part of the citation is evidently that the special exception constituted by NSL 42(2) should be held to supersede general provisions governing bail. The point is repeated at AC §33(b) where Comilang (supra) is cited. [39] RC §6(1) pp 6-7. See also his Supplemental Case, RSC §15(2). [40] Such as the offences of treason, incitement to disaffection or sedition under Parts I and II of the Crimes Ordinance (Cap 200). [41] AC §4(d) and (e). [42] AC §§41-43. [43] AC §§45-48. [44] AC §52. [45] RC §§13, 54. [46] RC §5(1). As we have seen at §36 above, the respondent also submits that if NSL 42(2) places the burden on the accused, it should be “read down” to impose the burden on the prosecution. Quite apart from the question of burden, we have held in Section D above that the Court lacks jurisdiction to adopt a remedial interpretation. [47] AC §40. [48] AC §86(e). [49] Per Lord Carswell in R (O) v Crown Court at Harrow [2007] 1 AC 249 at §11, citing Lord Bingham of Cornhill in R v Lichniak [2003] 1 AC 903, at §16; and Lord Steyn in R (McCann) v Crown Court at Manchester [2003] 1 AC 787, at §37 in an analogous case. See also Re McClean [2005] NI 490 (per Lord Bingham at §§25-26 and 31). [50] CPO 9D(2): “An order under [CPO 9D(1)] may be subject to such conditions as appear to the court to be necessary ...”; CPO 9G(1): “The court need not admit an accused person to bail if it appears to the court that there are substantial grounds ...” [51] CPO 9G(2)(h). [52] CPO 9G(2)(f). [53] Which restricts examining or cross-examining the accused regarding the offence with which he is charged. [54] CPO 9P. [55] [1992] 3 RCS 665. [56] [2000] 2 LRC 239 at §§58-80. [57] [2016] NSWSC 498 at §26. [58] §37 above. [59] §§52-54 above. [60] In accordance with CPO 9D(2) and CPO 9G. [61] [2020] HKCFI 3161. [62] Anderson Chow and Alex Lee JJ [2020] 4 HKLRD 382. [63] Alex Lee J [2020] 4 HKLRD 416. [64] [2020] 4 HKLRD 382 at §37. [65] Tong (No 1) at §43. [66] Ibid at §45. [67] At §12. [68] At §18. [69] Reasons for Ruling [2020] HKCFI 3161, at §8. [70] Ibid at §§9, 16-20. [71] Ibid at §§21-28. [72] Ibid at §§29-34. [73] Ibid at§33. [74] Additionally, it may be noted that Tong (No 1) at §37erroneously limits “acts endangering national security” to offences under the NSL. See §53(c)(ii) above. [75] [2020] HKCFA 45, at §23.
Press Summary (English) Press Summary (Chinese) DCCC 798/2022 [2023] HKDC 168 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 798 OF 2022 --------------------------- --------------------------- ----------------------------------------- REASONS FOR SENTENCE ----------------------------------------- 1. In these proceedings there are 2 defendants and a total of 5 counts in the indictment. 2. Mr WONG Denis Tak Keung (D1) was charged with, pleaded guilty to the following counts: 1st Charge (‘NSL23 offence’) Incitement to subversion, contrary to Articles 22 and 23 of the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region in Schedule to the Promulgation of National Law 2020 (LN 136 of 2020) Particulars of Offence WONG Denis Tak Keung, between 1 July 2020 and 20 March 2022, both dates inclusive, in Hong Kong, incited other persons to organise, plan, commit or participate in the following act or acts by force or threat of force or other unlawful means with a view to subverting the State power, namely:- (1) overthrowing or undermining the basic system of the People’s Republic of China established by the Constitution of the People’s Republic of China; and/or (2) overthrowing the body of central power of the People’s Republic of China or the body of power of the Hong Kong Special Administrative Region. 3rd Charge Possession of arms without a licence, contrary to section 13(1) and (2) of the Firearms and Ammunition Ordinance, Cap 238. Particulars of Offence WONG Denis Tak Keung, on 20 March 2022, Flat 6, 4th Floor, Golden Comfort Court (Block D), Golden Lion Garden Phase II, Nos 1-3 Kak Tin Street, Sha Tin, New Territories, in Hong Kong, had in his possession arms, namely two crossbows, without a licence. 3. Ms CHEUNG Man Chee Iry (D2) was charged with and pleaded guilty to the following count: 5th Charge: Possession of arms without a licence, contrary to section 13(1) and (2) of the Firearms and Ammunition Ordinance, Cap 238. Particulars of Offence CHEUNG Man Chee Iry, on 20 March 2022, at Flat 2, 13th Floor, Block N, Sunshine City, No 8 On Shing Street, Ma On Shan, New Territories, in Hong Kong, had in her possession arms, namely five crossbows, without a licence. 4. Both defendants confirmed their admission to the facts stated in the Amended Summary of Facts and were convicted of the respective charges against them. Upon the prosecution’s application the rest of the charges[1] they pleaded not guilty to were ordered to remain on the court file and not to proceed without leave. 5. Most of the facts admitted by both defendants were directly related to the charges of which D1 was convicted. Counsel for D2 sought to persuade this court to ignore them and concentrate on the part of the admitted facts related exclusively to Charge 5. However, this court takes the view that the facts, as read out and admitted by both defendants in open court were the background and part of the whole circumstances of the charge in question; they are essential for assessing D2’s criminal liability in respect of the charge. Nothing can exist in a vacuum, to gauge an individual’s criminal liability it is necessary to consider the whole of the circumstances leading her conviction. The Facts of the case The Background 6. This case involved the use of ‘Facebook’, a social networking app in which one can open an account to write/publish statements, share photos, posters and videos, post links to news or other internet links, the contents of such accounts can be accessible to any registered individuals or groups of individuals (known as ‘friends’) or, open to the general public. 7. As on 20 March 2020, D1 had been the registered holder of following Facebook accounts. (1) Denis WONG (with 4,042 friends); (2) Tommy WONG (with 1,901 friends). The Posts 8. During the period between 27 March 2020 and 10 February 2022 (ie a period of slightly more than 21 months), there were a total of 25 posts in these 2 Facebook accounts displaying to the general public[2]; inviting other persons to: (1) join his martial arts class in the name of 「集英楊武堂 殺鬼隊訓練班」; (2) have martial arts training in his class – with videos to demonstrate martial arts skill; (3) learn how to use weapons in his class – with photo of a person holding crossbow and arrow; (4) join his troop; and inciting other people to (5) overthrow the Communist Party of China by violent revolution after sufficient training: (6) overthrow or undermine the Government of the Hong Kong Special Administrative Region by violent revolution; (7) establish a shadow government and an independent Hong Kong State – with a picture of a black flag marked with “Independent”; (8) support and encourage general public to resist the authority (with photo of the culprit who attacked and used a knife to stab / wound a police officer on 1 July 2021 and photo of machetes attached); (9) to take revenge action, including violence and war, against the Hong Kong Police Force and the Communist Party of China on special dates such as 21st July. 9. D1 also left his mobile phone numbers in the posts for anyone interested to contact him by phone, WhatsApp or mail. 10. All but one of the above messages[3] continued to be published and displayed on the Facebook pages on or after 1 July 2020, when the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (‘SNL’) was enacted and came into force. Police Operation and Arrests 11. Acting on the information in the above posts, on 20 March 2022, a police officer was deployed to go to the 「集英楊武堂」at 1/F Chong Tak Building, 33-39 Austin Road, Tsim Sha Tsui (“TST Premises”) to enrol in the martial arts class. D1 was the person in charge and the instructor of the class. D2 was one of the 5 other participants in the class. 12. Subsequently the police team raided the TST Premises and arrested D1 and D2 for the offence of sedition. It was discovered that D1 had 2 mobile phones, each of which was logged in one of the above described Facebook accounts. 13. Under caution D1 admitted he was the instructor of martial arts class and the account user of the 2 Facebook Accounts in question. Exhibits seized in the TST Premises 14. The police seized the following items which were on display on the window shield of the TST premises: (1) 8 photos / posters, which were usually used for supporting the anti-government protesters:- • Photo of CHOW Tsz Lok (周梓樂); • Photo of CHAN Yin Lam (陳彥霖); • Photo of LEUNG Kin Fai (梁健輝) (who committed suicide after using knife to stab and wound a police officer), etc. • Photo of a protester at Tsuen Wan riot; • Photo of a protester injured at Sai Wan Ho riot; (2) 5 electric candles 15. The police also seized 4 piles of handwritten notes from D1’s bag either addressed to other persons (in the names of Tony and Johnny) or no one in particular. There were also attendance records. The contents of notes can be summarized thus: (1) Proposal to establish a party to promote Hong Kong Independence with force (「香港武獨黨」). (2) D1’s aim was to overthrow the Hong Kong Special Administrative Region Government, promote Hong Kong Independence and establishment of a Hong Kong Independent State. (3) D1’s operating a martial arts class on the surface was to provide martial arts training to interested participants, but his real aim was to recruit students, provide them with military training in order to overthrow the government. (4) The training included martial arts and the use of weapons. (5) His proposal to set up a Hong Kong Independent troop and a shadow government. (6) D1 proposed to look into the following matters and emphasized: (i) Training; (ii) Self-reliance / received overseas support; (iii) Set up temporary Hong Kong Government; (iv) Constitution of Hong Kong State; (v) Protection of Hong Kong sovereignty and citizen; (vi) Collusion with elements in Taiwan, Tibet, Uyghurs, etc; (vii) Establishment of military school; (viii) Declare war with the Communist Party in Hong Kong and the Mainland; (ix) Seek assistance from foreign countries; (x) Provide support to other overseas anti-government activities. (7) For the troops in Hong Kong, D1 proposed to: (i) Provide training to soldiers; (ii) Increasing the military power; (iii) Protect the Hong Kong sovereignty and citizen; (iv) Destroy the People’s Liberal Army in Hong Kong (v) Maintain loyalty; (vi) Protect the worldwide value. (8) A list of traditional martial arts techniques, weapons / equipment, including swords, knives, helmets, protective vests and shields. (9) A detailed examination and comparison of function, power and price of different brands of cross-bows (draw-weight ranging from 15 kgs to 80 kgs); (10) The attendance records showed that there were 20 students enrolled in one class. There were two classes on Sundays (between 4 pm and 6 pm & between 6 pm and 8 pm), and one class on Mondays (between 7 pm and 10 pm). 16. The Police seized the following items in D1’s Shatin Residence: (1) 2 crossbows (subject matter of the 3rd Charge, the draw weights which were respectively 26 kg and 28 kg); (2) 3 machetes; (3) 1 axe; (4) 3 swords; (5) 21 arrows; (6) 40 short arrows. 17. The Police seized the following items in D2’s at Ma On Shan Residence: (1) 5 crossbows (subject matter of the 5th Charge, the draw weights of which ranged from 17 to 32 kgs); (2) 3 machetes; (3) 41 arrows; (4) 80 short arrows; (5) A number of arrow-heads. 18. Pursuant to section 2 of the Firearms and Ammunition (Declaration of Arms) Regulations Cap 238D and Part I of the Schedule, “a crossbow with a draw weight of more than 6 kilograms” is defined to be arms which required licence for their possession. The defendants had no licence to possess the arms found in their premises. Discussions: Incitement to Subvert (‘SNL 23 Offence’) 19. Part 1 to 4 in Chapter II of the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region in Schedule to the Promulgation of National Law 2020 (LN 136 of 2020) respectively laid down four types of offences against National security: namely secession, subversion, terrorist activities and collusion with a foreign country or with external elements to endanger national securities. Each part sets out the corresponding inchoate offences and the penalty to be imposed. 20. Article 22 of Part 2 (NSL 22) laid down the substantive offence of subversion of the State power (SNL 22 Offence). Article 23 (NSL 23) deals with the inchoate offence of assisting the commission of the subversion offence: “A person who incites, assists in, abets or provides pecuniary or other financial assistance or property for the commission by other persons of the offence under Article 22 of this Law shall be guilty of an offence.” And proceeds to establish a two-tier penalty regime in the following terms: “If the circumstances of the offence committed by a person are of a serious nature, the person shall be sentenced to fixed-term imprisonment of not less than five years but not more than ten years; if the circumstances of the offence committed by a person are of a minor nature, the person shall be sentenced to fixed-term imprisonment of not more than five years, short-term detention or restriction.” 21. Although the appellate courts has yet the opportunity to consider the interpretation of the offence and penalty laid down in NSL 23, the learned appeal judges in the case of HKSAR v Ma Chun Man[4] (the facts of which were related to the offence of inciting others to commit a NSL 21 offence), stated the followings: “Regardless of whether it is the offence of “secession” or “subversion”, both provisions are of utmost importance in upholding national unity and territorial integrity, as well as the foundation of the constitutional system and the legal status of the Hong Kong Special Administrative Region as an inalienable part of of the People’s Republic of China under the “One Country, Two Systems” initiative.” [5]. 22. Further, by reason of the fact the offences of secession and subversion are both in the same Chapter of the NSL legislation, and both NSL 21 and NSL 23 adopt exactly the same wording in establishing the 2-tier sentencing regiment, it would be safe to assume that the principle as expounded by the learned Judges of the Appeal Court in relation to NSL 21 would be applicable to NSL 23. 23. On his plea and admission of facts summarised above D1 was convicted of the offence under NSL 23 (namely, inciting subversion of State power), the only issue to be determined is whether the circumstances of the offence committed were of a serious nature or a minor nature. In the latter case (‘the Lower Tier”), the court would have to order some form of detention or restriction up to 5 years. In the former case (the Upper Tier) this court has to order a fixed-term imprisonment of at least 5 years, but no more than 10 years. The wording of the article imposes a mandatory minimum of 5 years imprisonment for an Upper Tier Offence even after taking into consideration of all mitigating factors and whatever discount to which the defendant would have entitled[6]. 24. Therefore, the undersigned has to determine • Whether the present case falls into the ‘serious’ or ‘minor’ category; • On which part of the spectrum in that category the present case lies; • The appropriate sentence order that corresponds with the gravity of the case. 25. The learned counsel for D1 submitted that NSL 22 sets out the substantive offence of Subversion, NSL 23 sets out the inchoate offence of incitement and the accessory liability for a completed NSL 22 offence and contended that D1 was charged with the Inchoate offence of incitement, the fact that the substantive offence had not been committed would be a ‘powerful mitigating factor’ to consider whether the NSL 23 had been committed in ‘circumstances of a serious nature. 26. I do not agree that this is a proper reading of the NSL legislation. Each part of Chapter II sets out 2 related but distinct offences and the range of sentence the court has the power to impose; in both cases a 2-tier regime for sentencing by referring to seriousness or otherwise of the circumstances of its commission. 27. For the purpose of the present case the wording of NSL23 refers to the circumstances of inciting others to commit and NSL 22 offence. That the substantive offence had not been completed may well be a mitigating factor but it is not a pivotal element in deciding whether the NSL23 offence had been committed in circumstances that are serious or minor manner. Considerations of Determination 28. The Court of Appeal in the Ma Chun Man case[7] sets out the process of determination: the prime focus on the offender’s act, the actual consequences, potential risks and possible influence entailed. The court is required to carefully consider the circumstances as whole, identify, assess, accord appropriate weight to individual factors present and make the determination on the basis of the whole case. After making the determination, the court would then determine the offenders’ culpability in the case and decide on appropriate sentence by applying the general sentencing principles. The Court of Appeal further provides a non-exhaustive list of 10 factors which the court should take into consideration in making the determination. 29. From the facts and evidence before me, the followings are in my view most relevant to my determination: (1) The context in which the offence was committed The subverting posts were made and published during the time when the 2019 social events and violent protests seemed to be on the decline. The posts were first made on 27 March 2020, continued to be displayed and published after coming into effect of the NSL on 1 July 2020 and until his arrest on 20 March 2022. Read as a whole, the posts were designed to promote and rekindle the feeling of discontent and disgust against the Hong Kong Police Force, the SAR and the Chinese Government. They advocated the learning and using of military combat skills and weapons to upset the status quo and overthrow the SAR and the Chinese Government with violence. (2) The Modus Operandi The use of social media (namely, the Facebook) for committing incitement is an aggravating factor[8], as D1’s incitements and subverting messages could be accessed by anyone or ‘friends’, all can share the same posts with others and repost them by making screen shots of the same. By opening 2 different accounts in the Facebook, D1 had shown that it was not an impulsive, uncalculated idle act of venting his personal grievance against the status quo. It was a deliberate move on his part to double his audience, to solicit, enlist and persuade others to join in his act of defiance against the Police Force, the SAR and the Chinese Government. It also created impression that those of the like mind were greater in number than they actually were. Furthermore, D1’s call for a violent revolution is not confined to posting subverting slogans in his Facebook Accounts: there were also solid plans of overthrowing the government, setting up an independent state, collusion with other dissidents, and seeking assistance from foreign countries. Although the feasibility of their implementation is doubtful, the fact that he had made them, and have gone about renting a place, setting up a studio for martial arts lessons and gathering information about, stockpiling weapons and arms to implement his plan for a violent revolution to overthrow the SAR and Chinese Government indicated his actual intention of implementation. The studio where the classes were held were decorated as a shrine glorifying the supposed martyrs and riotous behaviour during 2019. It was a deliberate act on his part to incite those who attend his classes resentment towards the government and the place. (3) Number of times and Duration The posts were made and on display during the period between 27 March 2020 and until his arrest on 20 March 2022, for a total period of 21 months. During this period D1 regularly wrote and posted messages in his two Facebook accounts. There was a total of 39 posts of subverting nature, advocating the idea of a violent revolution to overthrow the SAR and Chinese Government, soliciting, discussing and encouraging those of a like mind, criticizing those who took a different view from his. (4) Scale As on 20 March 2022, there were a total of 5,943 ‘friends’ to his Facebook Accounts. While this court will make allowance for the fact that the ‘friends’ of the 2 accounts might overlap, on the other hand, any of the friends can either share the posts with other Facebook accounts or repost the messages by using the screen shot function. Once the messages are posted in the social media, like a virus there is no way to contain their proliferation. There is no way to ascertain the exact scale D1’s incitement and to gang the extent of damage they would cause. According to D1’s own records of attendance, there were 3 classes each week and at least 20 individuals enrolled in his classes under their Facebook names. At the time of the raid, there were 5 students in his class including D2. (5) Premeditation Despite the naiveté of his idea, proposal and execution, there is no doubt D1 had gone to a lot of soul searching to come up with the proposal, plan and manner of execution. He repeatedly used contemporary rumours based on alleged police brutality and government conspiracy and, in one case, making a martyr of a person who committed suicide after trying to kill a police officer, and presented them as manifestations of the evils of the SAR and Chinese Government. His purpose was to nurture the sense of discontent, distrust and disgust of the SAR and the Chinese government. This is a consistent pattern in such behaviour and could not be an impulsive act. (6) Violence The basic premise of D1’s proposal was to use violent means to alter the status quo. To that end he advocated the acquisition of knowledge on the use of martial arts, combat technique and weapons such as machetes and crossbows. (7) Accomplice There is no evidence that D1 acted in concert with other people. However, his inflammatory and subverting posts did attract approving responses from other netizens. As those who enrolled in his classes all registered under their Facebook names, they obviously had come into contact with D1 though same social media. (8) The target and size of incitement, and the potential influence on the same By posting on the Facebook Accounts (and making them global), D1 aimed at inciting anyone who had an interest in the matter. (9) The actual result of the incitement Apart from the fact that D1 actually started to implement his plan by giving classes as a preliminary step to start a violent revolution, there is no evidence of any other person motivated by D1 to make any move to topple the SAR and overthrow the Chinese Government with Violence. (10) The Actual and Potential influence of the Incitement There is no evidence that D1’s incitement had any actual impact on the society. However, at that point of time, the Society of Hong Kong was still shell-shocked by the social events that took place in the latter half of 2019, it would not be wrong to say that a section of the population was still quite irrational and gullible. The pandemic added fuel to the long days of discontent[9] The danger of his blind rage, the suggestion of an apparently realizable plan, and the simple logic could be appealing to certain segments of the society. It could create disturbances which affect the route to normalcy and sully the reputation of the China as a country and Hong Kong as a rational, free and peaceful society. 30. D1’s subverting posts and the actual steps taken to implement them would have effect on certain segment of the society. It would potentially harm the society as a whole. 31. I found that the circumstances of the commission of the offence falls with the lighter side the spectrum of the Upper Tier. I would therefore adopt 5 years and 6 months as a starting point. Discussions: Possession of Firearms or ammunition without licence (3rd and 5th Charge) 32. The maximum sentence is a level 6 fine and imprisonment for 14 years[10] . 33. As was pointed out by the learned Counsel for D2, there is no sentencing tariff for possession of firearms when the subject matter is crossbow. 34. However, the Court of Appeal in a case of possession of an arsenal of firearms (including a rifle, revolvers, and over 2000 rounds of ammunitions) in a public estate unit did identify several factors for consideration. Although the facts of that involved a much more dangerous equipment in terms of its range and potential harm to lives and property, in my view crossbows, for their ease of use and availability are still very dangerous especially in the context of a densely populated city like Hong Kong. Charge 3 35. In D1’s Shatin Residence, the police found 3 machetes, 1 axe, 3 swords (all sharpened)[11], 21 arrows and 40 short arrows together with the subject matter of the charge: 2 cross-bows. 36. The crossbows were inside a camouflage bag on the floor of the store room next to the bed room[12] together with 61 arrows. 37. From the way the crossbows were found together with the admitted circumstances, I have the following observations:- • D1 pleaded ignorance in his mitigation letter on the legality of possession the arms. To begin with, ignorance of the law is not a defence, • From the whole of the evidence, it is apparent that the arms and weapons were acquired not for their aesthetic value, but for the purpose of implementing what he advocated, namely, overthrowing the SAR and the Chinese Government with violence. • He had been extolling the importance of training in martial arts, military combat for the violent revolution, to that end he advocated and had offered martial arts training to convert the general public and those who already were of the like mind. • He had also suggested the importance of weapons in his vision of a revolution. D1 had also been making notes to study and compare the use and functions of various brands of crossbows and other weapons. • The arrows, essential for the use of crossbows as weapons, were placed conveniently together with the crossbows in a camouflage bag. They could be easily transported, assembled and put to use. • The bag was found on the floor of the storage room next to the bed room in D1’s residence. They could be easily accessed by D1 himself or any visitor. Unlike rifles which could be pre-loaded and required some sort of training for their use, the mechanism of crossbows are more simple and could only be loaded before they are put to use, so the fact that the cross-bows were not loaded is not a relevant consideration. 38. The above observations led me to the inevitable conclusion that D1 had possession of the crossbows for his own use and/or the use of others for the purpose of a military uprising against the HKSAR and the Chinese Government. 39. By reasons of the above, I would adopt a 30 months’ imprisonment for charge 3. Charge 5 40. D2 was arrested in the TST premises. She was one of the 6 participants of the Martial Arts class led by D1. 41. The window sill of the classroom was decorated like a shrine: with pictures 3 persons who were considered to be martyrs of the social events and electric candles. D1’s record of attendance used the Facebook names to identify his students. 42. In D2’s Ma On Shan residence, the police found 3 machetes, 1 axe, 41 arrows, 80 short arrow, a number of arrow-heads, miscellaneous items and the subject matter of the charge: 5 cross-bows. The drawing weights of the crossbows ranged from 17 to 32 kgs, ie 3 to 5 times above the legal limit. 43. The items were found on or in a white cupboard in the living room: (i) Stacked on top of the cupboard in the living room were three camouflage bags: Bag 1 1 black crossbow chamber; 1 green camouflage crossbow; 1 green camouflage crossbow handle; 1 black coloured scope; 4 arrows; 1 black coloured torch; 8 pieces of accessories. Bag 2 One green camouflage crossbow handle; One green camouflage crossbow; One black coloured scope; 10 long arrows; 40 yellow coloured arrow heads inside a transparent bag; 40 red coloured arrow heads inside a transparent bag; 4 silver colouared arrowhead; 1 tube of white glue; 1 instructions booklet; 16 pieces of accessoryes. Bag 3 1 green camouflage crossbow; 1 green camouflage crossbow handle; 1 black coloured scope. (ii) Hung on the handle of the cupboard: one black coloured crossbow; (iii) Inside the compartment to the right were 2 large paper boxes: Paper box 1 (Brown in colour) 1 black coloured composite bow; 1 white glue tube; 10 pieces of accessories; 2 instructions booklets[13]; 1 pieces of target papers. Paper Box 2 (white in colour) 15 pieces of long arrows; 4 arrow heads; 1 black coloured arrow head; 18 black coloured plastic arrow head; 2 pink coloured glue tubes; 17 pieces of accessories. (iv) Inside a drawer of a brown wooden cupboard in the living room 3 knives with shields; 1 machete[14]. (v) Near the sofa in the living room was another green camouflage bag containing: 1 black coloured crossbow; 1 black crossbow handle; 2 black coloured scope; 12 long arrows; 12 black coloured arrow heads; 13 pieces of crossbow accessories. Discussions of D2’s culpability Charge 5 44. In assessing her culpability, the undersigned is mindful of the fact that D2 has no past record of transgression. In these proceedings she is not charged with any NSL offences. There is no direct evidence that she is party to, or had knowledge of D1’s subverting intentions. 45. The learned counsel submitted that D2 joined D1’s classes for having some exercise. She helped to store the offending articles as a favour for D1. 46. I found her plea of ignorance was inherently impossible The class she joined were advertised as for martial arts training with the explicit purpose to overthrow the SAR and the Chinese Government in D1’s Facebook Accounts. The students in D1’s attendance records were identified by their Facebook names. 47. Furthermore, I note that most of the crossbows (except for one that was hung on the outside the cupboard) were kept in purpose built camouflage bags. Each of the 3 bags had all that were required to assemble and put to use the crossbows. They can be easily accessed could easily be taken anywhere, assembled and put to use quickly. 48. Furthermore, in a residential tenement, I cannot really see any use for machetes and axes, nor do I see the items enlisted had anything to do with the discipline of Tai Chi or for exercise purpose. 49. It had also been suggested by Counsel that the other weapons (namely the tomahawk machete and axes) were in fact used by D2 for camping. Unless she plans to explore in the Amazon jungle, I cannot see they are of any use in normal outdoor activities in Hong Kong. 50. In addition, the classroom where the class was held was decorated like a shrine to honour the riotous movement in 2019 and the supposed “martyrs”. 51. All these factors led me to the inevitable conclusion that D2 was well aware of D1’s intention and had been complicit in keeping the crossbows for her own use or for the use of others. 52. I accept that as compared to firearms, crossbows are less lethal in terms of their range, speed and power to cause damage. They are nonetheless very dangerous weapons and unlike firearms, they require little training for using them to cause injury to life and damage to property. 53. Taking into account of the number of crossbows, their draw weight, and the circumstances in which they dare found to be in D2’s possession, I found that it is necessary to impose a deterrent sentence. I would therefore adopt 24 months’ imprisonment as a starting point. Sentence Order for D1 54. For the reasons stated above, I have adopted 5 years and 6 months as a starting point for Charge1. For Charge 3, the 30 months’ imprisonment is reduced to 20 months to take into account of his guilty plea. 55. As the facts of the 2 charges were inextricably intertwined, and considerations for matters giving rise to Charge 3 had also been taken into account in deciding on the sentencing order for Charge 1, to avoid punishing D1 twice for the same set of facts and to take into account of the Totality Principle, I order that the sentence of the 3rd charge to run concurrent with that of Charge 1. Mitigating Factors for D1 56. D1 is aged 60 and married. His wife is living in Canada. He had a son from another relationship, now living in China. He had a clear record. The Background Report and his lawyer gave a detailed account of his life. 57. Despite his humble background, with the support of his parents and religious organizations he was affiliated to, he managed to complete his tertiary education in Canada and then the United States. After that he had different stints of working and living in Canada, the United States and China. In 1997 he returned to Hong Kong with a view ‘to contribute to the future of Hong Kong and China’ [15]. 58. Since 2019 he set up a martial arts school to teach Tai-Chi and also took up part-time jobs to supplement his income. He claimed the onslaught of the pandemic had mired him in financial difficulties as the school could not operate and the part time jobs dried up. He blamed it on the Government’s pandemic control policy. That and his sympathy for the ‘victims’ of the 2019 social events drove him to vent his discontent in the Facebook. His family, the social worker, friends and pupils all spoke well of him in their written pleas for clemency. 59. By order of this court, he had been examined by a psychiatrist and a psychologist. Neither detected mental or psychological issues. 60. Strictly speaking, these letters do not contain any valid reasons for clemency. He is a grown man and must have known what he was promoting and attempting to implement posted danger to the stability of the society. 61. By reasons of the wording of the NSL legislation, he cannot avail himself to the customary 30 per cent discount by his guilty plea. Having taken into account his plea and absence of previous transgressions I therefore reduce his sentence from 5 years and 6 months to 5 years. Mitigations for D2 62. D2 is aged 62, single. She had been the caregiver and financial supporter of her mother before the latter succumbed to cancer in 2020, since then she had been living alone. She led an uneventful life, working as a marketing manager, making her way up through her performance at work despite the lack of higher education. She resigned after she was arrested for the present case. The undersigned accepted the veracity of the pleas for clemency from her employers, colleague and her other siblings and that she is held in high regard by them. 63. In the Probation Officer’s report, D2 claimed that she was asked by her Tai Chi master D1 to store a bag and a crossbow in her residence. Apart from the latter (presumably she referred to one hung in plain sight in the living room), she had no clear idea what the contents were. In short she had been used by D1. 64. According to the Prosecution, four of the crossbows seized in D2’s residence had been tested by police officers[16] , it was confirmed that the arrow discharged from a distance of 7 metres could pierce through corrugated cardboards and the rubber boards behind. They were indeed very dangerous weapons. 65. From the evidence viewed as a whole, I consider 24 months a proper starting point. This will reduce to 16 months’ imprisonment to reflect her guilty plea. [1] Namely 2nd and 4th Charge, against D1 and D2 respectively, both of ‘Possession of offensive weapons with intent, contrary to section 17 of the Summary Offence Ordinance, Cap 228. [2] His Facebook Accounts are ‘global’, meaning can be viewed by all [3] Namely the post dated 27 March 2020 at 1752 hours in the account of Denis Wong, of which a picture of a sword had been displayed, in which the defendant also claimed that a concealed weapon when ‘move speedily can beat a gun’ and invited anyone interested in learning martial arts and self defence to contact him by private mail (PM). [4] [2022] 3 HKLRD 246 [5] Supra, see para 70 at p 272: [6] Subject to the effect off the extenuating circumstances, if any, enlisted in NSL 33(1). See HKSAR and LUI SAI YU CACC61/2022, [2022] HKCA 1780, at para 63 of the Judgment of the Hon Poon CJHC. The facts of the case concerned the offence of incitement to secession, contrary to NSL 20 and NSL 21. [7] Supra, at paras 74-76 [8] See HKSAR and LUI SAI YU, CACC 61/2022 [2022] HKCA 1780, at para 34 of the judgment. [9] As was explained by D1 for posting the subverting messages to summon for a military actions in his mitigation letter: “I was very dissatisfied with the Government policy on the pandemic. I also sympathized with the victis of the anit-amendment movements in 2019” [10] Section 13(2) of Firearms and Ammunition Ordinance, Cap 238 Fire arms and Ammunition Ordinance, Laws of Hong Kong [11] See para 15 of the admitted facts, and the photos at Annex E referred to. [12] As shown in the picture, D1’s residence was a small unit with 2 rooms situated side by side [13] On the paper instructions shown on Annex F [P.21], there warning against shooting arrows at humans and or objects [14] It is noted that in the Background Report, D1 admitted to the Probation Officer that the crossbows were his. [15] As was stated by his defence counsel in his written submission. [16] At the request of the undersigned on the day pleas were entered.
Mr Justice Ribeiro PJ: 1. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Tang PJ: 2. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Bokhary NPJ: Inferential reasoning 4. This appeal concerns how jurors are to be directed on inferential reasoning. Such directions might be couched in terms of the proper approach to circumstantial evidence, in terms of the proper approach to the drawing of inferences or even in terms of both. Inferential reasoning forms a very important part of the criminal justice system. It is by no means uncommon for the resolution of the crucial issue in a criminal case to depend on inferential reasoning upon facts proved or admitted. As good an example as any of such a case is one in which the crucial issue is whether a person who arrived in Hong Kong with dangerous drugs concealed in her or his luggage was aware of the presence of those dangerous drugs, and there is no admission by her or him of such knowledge. The present case is such a case. To borrow a phrase which Mr Baron Alderson is reported in Hodge’s Case (1838) 2 Lewin 227 at p 228 to have used when directing the jury, the prosecution’s case against the appellant is “made up of circumstances entirely”. Complaint 5. At her retrial before Mrs Justice Barnes and a jury, the appellant was convicted of unlawful trafficking in dangerous drugs consisting of 3.142 kilos of methamphetamine hydrochloride worth HK$2.3 million found concealed in the false-bottom of her suitcase, and was sentenced to 24 years’ imprisonment. That conviction was affirmed by the Court of Appeal (Mr Justice Lunn VP, Mr Justice McWalters JA and Mr Justice Pang). By leave of the Appeal Committee (Chief Justice Ma, Mr Justice Tang PJ and Mr Justice Fok PJ), the appellant now appeals to this Court upon a complaint that there has been to her disadvantage a departure from accepted norms which departure is so serious as to constitute a substantial and grave injustice. That complaint arises as follows. 6. There was evidence as to how the appellant did and did not react when confronted at the airport by customs officers with her suitcase in which the dangerous drugs were concealed. The crucial issue at the trial was whether the only reasonable inference was that the appellant knew that dangerous drugs were concealed in the suitcase. 7. Prosecuting counsel urged the jury to take the view that the appellant’s reaction and non-reaction pointed to her being aware of the presence of dangerous drugs in the suitcase. In her out-of-court statements, the appellant said that she was unaware of the presence of dangerous drugs in the suitcase, she having been duped into believing that what were concealed in the suitcase which she was given to carry were United States dollars which were being smuggled. Defence counsel, on the other hand, urged the jury to take the view that the appellant’s reaction and non-reaction were consistent with that belief. 8. In her summing-up, the judge dealt at considerable length with the evidence of the appellant’s reaction and non-reaction, but she made no specific reference to that evidence or the arguments thereon in the context of any of her directions on circumstantial evidence or the drawing of inferences. 9. That omission is what the appellant complains of as a departure from accepted norms giving rise to a substantial and grave injustice to her. Reaction and non-reaction of the appellant 10. Shortly stated, the details of the case were these. Early in the morning on 6 September 2010, the appellant, a middle-aged Vietnamese woman of good character and limited education, arrived in Hong Kong on a flight from Nairobi in Kenya. She having missed her connecting flight to Phnom Penh in Cambodia, an arrangement was made for her to travel there on another flight, being one departing later that morning. That arrangement involved retrieving her suitcase which had in Nairobi been checked-in to Phnom Penh. Having been retrieved, the suitcase was subjected to an x-ray examination. 11. That examination suggested that the suitcase had a false-bottom in which something was concealed. And the suitcase tested positive in an ionization test. The suitcase was emptied of its apparent contents consisting of clothing. Even then, as it seemed to a customs officer, the suitcase did not feel like an empty one. So the customs officers concerned decided to examine the suitcase in the appellant’s presence in the arrival hall. 12. The evidence of the appellant’s reaction and non-reaction when confronted with her suitcase containing the dangerous drugs concerned in this case consists of what the prosecution witnesses said then happened at the arrival hall. Their evidence was to this effect. With her suitcase in full view, the appellant was asked by Customs Officer Ma Hon-chuen in English “Is it your baggage?” All the persons present called as prosecution witnesses said that the appellant began to cry and squatted down next to the suitcase. One of them, an airline staff member, added that the appellant screamed “Wah!” Senior Customs Officer Ng Kwok-hong said that the appellant looked nervous and was shaking and trembling. Both Senior Customs Officer Ng and Customs Officer Ma said that the appellant unzipped the suitcase. Customs Officer Ma said that the appellant rummaged around in the suitcase before she was stopped from continuing to do so. At first, Senior Customs Officer Ng said, the appellant stood and watched as the contents of the suitcase were searched. But, he said, she sat down when the bottom of the suitcase was lifted out and the package containing the dangerous drugs was removed. At that stage, he said, she was expressionless. 13. Customs Officer Ma then performed a test with crystals to confirm the customs officers’ suspicion that the contents of the package were dangerous drugs. The appellant was then arrested and cautioned in both English and Chinese by Senior Customs Officer Ng. He said that she did not appear to understand and made no response. 14. Early in the afternoon on the same day, Senior Customs Officer Ng made a post-record of the arrest and cautioning of the appellant. With the aid of a Vietnamese interpreter, he asked her if she had anything to add. She said “The name tag on the black suitcase is mine. But the articles inside are not mine”. Exculpatory out-of-court statements which she relied upon 15. The appellant participated in an interview which began in the evening of 6 September and continued into the early morning of 7 September 2010. As to what the appellant said during that interview, there are three passages in the transcript of the interview which should be quoted. Of these, the first is the passage which reads: “The suitcase is mine. The South African asked me to take it to Cambodia. I did not know the South African.” 16. The second is the passage which reads: “In the hotel, I put a pair of black jeans and one set of red top and trousers into the suitcase. I saw that there were tops, trousers, shoes and slippers inside the suitcase. I knew nothing else. I closed the suitcase and a zipper without taking a look at its contents.” 17. And the third is the passage which reads: “I do not know what the dangerous drug methamphetamine is. At 18 ‘Square’, Vietnam, my younger sister opened a coffee shop. I saw a person called Mai-Ka in the coffee shop. He/she asked me to take US dollar from South Africa to Cambodia. He/she will give me US$ 1,500 upon arrival. As I have liver disease, I need the money for treatment.” 18. The appellant went on to say at the interview that she understood that United States dollars were inside the suitcase but that she had not checked to see if that was so. 19. At 1:35 am on 7 September 2010, the appellant, having been formally charged with unlawfully trafficking in the dangerous drugs found in her suitcase, made this answer to the charge: “I did not know there were dangerous drugs in the suitcase. I was deceived by others. I know I was wrong. I hope the judge will pass a lenient sentence so that I can go home soon as possible.” 20. It having been mentioned that the trial at which Mrs Justice Barnes presided was a retrial, a word should, for the sake of completeness, be said about the first trial. That trial was before Mr Justice Line and a jury. It resulted in the appellant being convicted and sentenced to a term of 26 years’ imprisonment (being two years longer than the term which Mrs Justice Barnes later imposed at the retrial). The appellant’s conviction at that trial was quashed by the Court of Appeal (Mr Justice Stock VP and Mr Justice Cheung JA, Mr Justice Wright dissenting) on a ground which does not arise in the present appeal. A retrial was ordered by that division of the Court of Appeal. And the appellant was then retried before Mrs Justice Barnes and a jury. 21. At the retrial, the appellant did not testify. She relied on her exculpatory out-of-court statements. These were dealt with extensively by her counsel in his final speech to the jury. The defence called one witness, a Vietnamese woman who had at one time been an inmate in the same prison as the appellant was in. This witness spoke of the appellant as a kind person, and produced a letter written to her by the appellant. The grammatical mistakes in that letter, Mr Justice Lunn VP said, spoke to the appellant’s limited level of literacy. Special direction on the drawing of inferences 22. Before continuing with the facts of the present case, a word should be said on the relevant law as stated by this Court in Tang Kwok Wah v HKSAR (2002) 5 HKCFAR 209, which is this. It is normally unnecessary to give the jury any special direction on how they are to approach circumstantial evidence. Whether the prosecution’s case depends wholly or in part on circumstantial evidence, it is normally sufficient that the jury be directed that they may not convict unless they are sure of guilt. There may, however, be exceptional circumstances in which it may be desirable or even necessary to give the jury a special direction on the drawing of inferences by telling them that no inference is to be drawn against the accused unless it is the only reasonable inference. Was given, but was it given adequately? 23. Mrs Justice Barnes rightly took the view that the circumstances of the present case called for a special direction. And she gave the jury such a direction. Was it an adequate one in the circumstances? Summing-up should relate the law that the jurors have to apply to the context in which they have to apply it 24. In the course of a summing-up, jurors receive many directions on the law. They must be assisted to see those directions in the context of the evidence and the arguments thereon. Where inferential reasoning is involved, the summing-up is likely to contain repeated directions on the approach to inferential reasoning. It is to be expected that at least once in the course of the summing-up, the directions on inferential reasoning would be specifically set in the context of the evidence and the arguments thereon. A summing-up should relate the law that the jurors have to apply to the context in which they have to apply it. How that is to be done in regard to inferential reasoning is addressed in the specimen direction on the drawing of inferences to be found at p 21.3 of the Specimen Directions in Jury Trials issued by the Judicial Institute in September 2013. 25. That specimen direction, after indicating that no inference is to be drawn against the accused unless it is the only reasonable one, immediately continues as follows: “[In this particular case, the prosecution says that there is direct evidence that (specify one or a number of primary facts which the prosecution say are clearly shown) and the prosecution says that the only reasonable inference to draw from those facts is that …. On the other hand the defence says that although that might be one inference which could be drawn, it is not the only reasonable inference to draw; and that another inference one might reasonably draw is that ….]” (Italics in the original.) 26. Relevant to that, what counsel said in their final speeches about the appellant’s reaction and non-reaction and the conclusion to be drawn from the same is as follows. Prosecuting counsel’s arguments in final speech: the appellant was a knowing drug courier 27. Prosecuting counsel said this to the jury: “And one other reason why I suggest to you that you are sure she committed this offence, and this, I suggest, is overwhelming. When she’s brought through the red channel, she goes, ‘Ahhh’ and she starts to sob or cry, doesn’t she? That’s the evidence, when the suitcase is pointed to her. And then she immediately opens it up, so she clearly knows it’s not locked, and she rummages around. Now, if those aren’t hers, why is she rummaging around? If they are hers, there’s no purse in there, there’s no documents in there, there’s no underwear in there, right? Why is she rummaging around immediately? She’s rummaging around because she wants to see if the drugs have come out of the bottom of the suitcase. She wants to see if they’re already discovered. And that’s not my overwhelming point. I’ve got a better one. She stopped. She’s been crying. She’s not crying and sobbing throughout. She’s obviously very nervous, and so would you be in her shoes, we’ve got to accept that. We’d all be terrified; innocent or guilty, we’d all be terrified in her shoes. But when it comes to the stage at which the suitcase is taken apart, if you are innocent, what’s the stage that you would go again, ‘Ahhh’? She’s done it once. It’s a natural reaction. You might think everybody would notice if all of a sudden, the bottom of your suitcase is peeled open and there was a bulky package. Not a flat, linear package that you might pack money in, but a bulky package that you saw. And even if she was a cool cucumber, even if she was very cool and calm and didn’t react to that, at the stage that somebody sticks a knife into the package and pulls out a crystal and sticks it into some fluid that turns blue, where was her reaction to that? And it is that, ladies and gentlemen, that convicts this woman. You can be sure that her lack of response to that is indicative of the fact she knew what was inside her suitcase was drugs, it wasn’t money, it was drugs.” Defence counsel’s arguments in final speech: the appellant had been duped into believing that she was smuggling money 28. At an early stage of his final speech, defence counsel stated the defence’s case that, as far as the appellant knew, she was acting as a smuggler of money and not as a drug courier. He observed that “[i]f it was Hong Kong, she could bring money in and out as she wished but, presumably, the position is different in other countries”. Turning to the appellant’s reaction and non-reaction, he said: “You may recall that when she was first taxed with just the simple question, ‘Is this your bag?’, she let out a call and squatted down, unzipped it with the intention of going into the bag. Is that the act of a drug trafficker that’s trafficking in $2 million worth of drugs? It looked like she was apparently trying to proffer up something to them, like the money, for example. It’s not the kind of act you’d expect from a cool and calm drug trafficker. Later on – you heard that she was sobbing, crying – and then later on, before she’s actually cautioned and arrested, one of the officers uses the ‘narco test’, do you remember, he put some chemicals on the powder and they turned blue. No reaction. She cries, squats down and looks in the bag when they simply ask her is it her bag. Later on, when, to the officer’s point of view, something really serious had happened, they’d found a positive test for drugs, she has no reaction. She simply doesn’t know what’s going on. If she’d cried like she did before when she was simply asked the question ‘Is this your bag?’, wouldn’t we have expected her to have gone berserk when the drugs turned the wrong colour and gave off a reaction to show that these really were dangerous drugs? But no, she just simply stands there. She has no idea what that substance is. I’d suggest, ladies and gentlemen.” 29. So, on the crucial issue of knowledge, the rival stances as to the inference to be drawn from the appellant’s reaction and non-reaction were in effect these. Prosecuting counsel argued that the only reasonable inference to be drawn from the appellant’s reaction and non-reaction, particularly her non-reaction, was that she knew that dangerous drugs were concealed in the suitcase. Defence counsel argued that the appellant’s reaction and non-reaction were more consistent with, or at least reasonably consistent with, a belief on her part that United States dollars were concealed in her suitcase. McGill’s case is different from the present case 30. Both in the Court of Appeal and here, the respondent cited the decision of the High Court of Justiciary in McGill v Her Majesty’s Advocate 2000 SCCR 253. McGill had recently bought a car. While he was driving that car with a passenger in it, the police stopped it. The police found drugs hidden behind the glove compartment at the passenger side of the car. McGill was charged with being concerned in the supply of those drugs. The prosecution adduced evidence that his reaction was one of shock when the police stopped the car and started to search it but that he showed no surprise when the drugs were found. 31. A submission of no case to answer was made on McGill’s behalf. It was rejected. So the case went to the jury. They convicted McGill. He appealed against his conviction on the ground that there was insufficient evidence to show that he had knowledge of the presence of the drugs found in his car and that the judge had erred in rejecting the submission of no case to answer. McGill’s appeal failed. Delivering the opinion of the court, Lord Prosser said that taken along with the other evidence, McGill’s reaction to the stopping of the car and the start of the search of it and his non-reaction to the finding of the drugs justified the judge’s rejection of the submission of no case to answer. 32. McGill’s case concerns whether there was a case to go to the jury. It does not concern the sufficiency or otherwise of the directions which the jury received, which is what the present case concerns. 33. Therein lies the distinction in law between McGill’s case and the present case. There is also a distinction between them on the facts, which is this. There was no suggestion of McGill being in fear of something other than drugs being found in his car. On the other hand, the appellant’s out-of-court statements were to the effect that there was something other than drugs that she feared had been, or would be, discovered in her suitcase, namely smuggled United States dollars. That does not render her reaction and non-reaction irrelevant. It does, however, add to the importance of the directions to the jury on the proper approach to inferential reasoning being specifically set in the context of the evidence and the arguments thereon. So is White’s case 34. The respondent also cited the decision of the Supreme Court of Canada in R v White 2011 SCC 13. That was a murder case in which the evidence relied upon against White included evidence that he had fled the scene after shooting the victim. The respondent cited it for the proposition that evidence of post-offence conduct does not give rise to any special rule of admissibility or to any need for a special warning. But the present case raises no question as to the admissibility of post-offence conduct. Nor does it raise any question of a special warning to be given in respect of post-offence conduct as such. 35. There are various types of post-offence conduct that the prosecution may seek to rely upon in any given case. Reaction and non-reaction (as in McGill’s case and the present case) is one type. Other types include, for example, flight (as in White’s case) and lies. There are particular directions which jurors are to be given on flight, and there are particular directions which jurors are to be given on lies. 36. The present case involves the directions that jurors are to be given on inferential reasoning. It so happens that the facts from which the jury were asked to infer guilty knowledge in the present case consist of post-offence conduct. But the essential requirements of directions on inferential reasoning are the same whether the facts from which jurors are asked to draw an inference against the accused consist of post-offence conduct or consist of something other than such conduct. Zen’s case does not undermine the specimen direction 37. Another decision to which the respondent has drawn attention is that of the Court of Appeal in HKSAR v Zen Xiulan [2016]4 HKLRD 237. That was a drug-trafficking case in which the prosecution alleged, while Ms Zen denied, that she was aware of the dangerous drugs concealed in the lining of the handbag which she was carrying upon arrival in Hong Kong on a flight from Kuala Lumpur in Malaysia. What the Court of Appeal really held in that case is no more than this. The judge in that case had dealt with all the evidence on the basis of which an inference of knowledge could be drawn against the accused. And there was no need in the circumstances of that case for the judge to tell the jury what evidence they could and could not rely on for the purpose of drawing that inference. That could in the circumstances of that case be left to their common sense. 38. Quite simply, the decision in Zen’s case does not undermine, nor does it even seek to undermine, the specimen direction on the drawing of inferences issued by the Judicial Institute. Crown Court Bench Book 39. Lest it be thought that that specimen direction issued by the Judicial Institute stands alone, mention should be made of what the Crown Court Bench Book issued in March 2010 by the Judicial Studies Board in England and Wales says about the directions to give a jury on circumstantial evidence and the drawing of inferences. The Court is indebted to one of its Judicial Assistants, Mr Benjamin Lam, for drawing its attention to that publication. It is there said (at p 36) that directions on circumstantial evidence and the drawing of inferences should include “a summary of the defence case as to the disputed evidence, the identification of evidence which may rebut the inference of guilt, and the disputed inferences”. The specimen which is then provided (at p 37) is of a direction on inferential reasoning in the course of which and as a part of which the judge specifically draws the jury’s attention to: the evidence on which the prosecution places particular reliance; why the prosecution places particular reliance on that evidence; and what the defence case is. That specimen direction on inferential reasoning bears out the appellant’s point at least as clearly as, and perhaps even more clearly than, the Judicial Institute’s specimen direction on such reasoning. Why did the Court of Appeal decide against the appellant? 40. Coming back to the present case, this is what the Court of Appeal said (in para 38 of their judgment) after dealing with what each counsel said in final speech and with what the judge said and did not say when summing up: “Given that the judge had dealt with [the evidence of the appellant’s reaction and non-reaction] at considerable length and that it has been the subject of competing submissions and the respective closing speeches of counsel, the absence of a specific reference to that evidence in the context of directions as to the drawing of inferences is surprising. With respect to the judge, specific reference ought to have been made by her to the evidence of [the appellant’s] reactions and non-reaction from the time that she was confronted with the suitcase. That ought to have been done as part of the general direction given in respect of the circumstantial evidence and the drawing of inferences.” 41. On what basis did the Court of Appeal decide against the appellant despite that omission? Jurors look to the judge for the law 42. As to that, one of the things to which the Court of Appeal attached weight is that, as they put it, “the judge directed the jury that they should take into account the speeches of counsel”. 43. No reference to prosecuting counsel’s speech could begin to cure, or contribute to the curing of, the disadvantage to the appellant resulting from the omission. 44. As for reference to defence counsel’s speech, that speech was not calculated to provide that which the judge eventually omitted to provide. And even if it was so calculated, it would not have been enough. Delivering the advice of the Privy Council in Lawrence v R [1933] AC 699, an appeal against conviction which succeeded on the “substantial and grave injustice” ground, Lord Atkin famously observed (at p 707) that “[j]urors are apt to be suspicious of law as propounded by the defence; they look to the judge for authoritative statement of it”. That was said in the context of a judge’s failure to direct the jury on the onus of proof. But the same thing can be said in the present context. The point goes to the respective roles of the judge and of the jury. What jurors infer is a matter of fact for them, but the proper approach to inferential reasoning is something which they are to take from the judge as a matter of law. 45. There can be situations in which a judge’s reference to counsel’s speeches will cure, or contribute to curing, a summing-up that would otherwise have been unacceptable. But the present situation is not such a situation. 46. Ultimately, the basis on which the Court of Appeal decided against the appellant was, as they stated it (in para 42 of their judgment), this: “We are satisfied that the judge’s omission was not material. The jury was appropriately directed, in particular repeatedly so in respect of the burden and standard of proof and in respect of the drawing of inferences adverse to [the appellant]. There was no need to give a further special direction.” Special direction on drawing inferences should be specifically set in context 47. It is true that, as the Court of Appeal observed, the judge had appropriately directed the jury on the burden and standard of proof. There would have been another ground of appeal if the jury had not been appropriately directed on those matters. That there is no cause for complaint on those matters does not cure, or contribute to curing, the omission of which complaint is made. 48. The judge decided, and rightly, that a special direction on the drawing of inferences was called for in the circumstances of the present case. And the special direction which she gave was correct to the extent that it did give the jury to understand that no inference was to be drawn against the appellant unless it was the only reasonable one. But, surprisingly as the Court of Appeal unsurprisingly felt, the judge never gave the jury any inferential reasoning direction specifically set in the context of the evidence and the arguments thereon. 49. The omission cannot be regarded as immaterial. It was not an omission to give a “further” special direction but an omission to give a correct direction on inferential reasoning. So should a general direction on circumstantial evidence 50. Where the prosecution seeks to prove a fact by evidence of other facts, it may, depending on the circumstances, be appropriate to direct the jury on inferential reasoning by giving them a special direction on the drawing of inferences. Or it may, depending on the circumstances, be appropriate to direct the jury on inferential reasoning simply by giving them a general direction on the proper approach to circumstantial evidence. 51. It is not to be thought that those two ways of directing a jury on inferential reasoning are mutually exclusive or incompatible with the other. Nor is it to be thought that general directions on circumstantial evidence need not be set in the context of the evidence and the arguments thereon. 52. On those points, the case of R v Onufrejczyk [1955] 1 QB 388 is highly instructive. It was a case of a conviction for murder even though the victim’s body was never found. Lord Chief Justice Goddard, delivering the judgment of the Court of Criminal Appeal dismissing Onufrejczyk’s appeal, said (at p 394) that “the fact of death, like any other fact, can be proved by circumstantial evidence, that is to say, evidence of facts which lead to one conclusion, provided that the jury are satisfied and are warned that it must lead to one conclusion only”. 53. At Onufrejczyk’s trial, Mr Justice Oliver had (as one sees at p 395) weaved his references to the evidence and the arguments thereon into his directions to the jury on the approach to circumstantial evidence, using the expressions “no rational hypothesis except” and “no rational explanation…except”. Those expressions and the Lord Chief Justice’s expression “one conclusion only” convey the same message as the expression “only reasonable inference” and the expression “irresistible inference” which is sometimes used in its stead. 54. While speaking for the most part in terms of circumstantial evidence, the Lord Chief Justice also spoke (at pp 400-401) of what the jury could “infer”. 55. A summing-up might to some extent be influenced by the fact that counsel, when addressing the jury, happen to use an expression other than, albeit meaning the same thing as, the expression which the judge prefers. Suppose counsel used expressions such as “being satisfied beyond reasonable doubt”, but the judge prefers expressions such as “being sure”. Then the judge may see fit, while generally using expressions such as “being sure”, to tell the jury that being “satisfied beyond reasonable doubt” means the same thing as “being sure”. Another such example is the situation in which counsel talked about “circumstantial evidence” when addressing the jury, but the judge chooses to give the jury a special direction on the drawing of inferences. In such a situation, the judge may consider it appropriate to include some reference to the proper approach to circumstantial evidence, making it clear to the jury that there is no inconsistency between that approach and the rule that no inference is to be drawn against the accused unless it is the only reasonable inference. Jury directions must be tailored to the circumstances of the case 56. To be helpful to a jury, the directions to them must be tailored to the circumstances of the case. For the purposes of the task which jurors have to perform, the circumstances of a case consist of the evidence and the arguments thereon. In Plomp v R (1963) 110 CLR 234, a case decided by the High Court of Australia, Mr Justice Menzies spoke (at p 252) of the “customary direction where circumstantial evidence is relied upon to prove guilt, that to enable a jury to bring in a verdict of guilty it is necessary not only that it should be a rational inference but the only rational inference that the circumstances would enable them to draw”. It is always a matter of the circumstances. 57. Where inferential reasoning is concerned, by far the most helpful reference to the circumstances of the case would be one made in the course of, and as part of, the directions on such reasoning. Whatever the form or forms in which a judge sees fit to direct the jury on inferential reasoning, and however many times such directions are repeated in the course of the summing-up, it always remains important that there be at least one instance in which the directions on such reasoning are specifically set in the context of the evidence and the arguments thereon. Departure from accepted norms 58. The directions on inferential reasoning given in the present case do not include any direction specifically set in the context of the evidence of the appellant’s reaction and non-reaction and the rival arguments thereon. That omission constitutes a departure from the accepted norm that where directions on inferential reasoning are necessary, then whatever form or forms such directions take, and however many times they are repeated, there will be at least one instance in which the jurors are given directions on such reasoning that are specifically set in the context of the evidence and the arguments thereon. So serious as to constitute a substantial and grave injustice 59. In so far as the omission pertained to defence counsel’s arguments on the conclusion to be drawn from the appellant’s reaction and non-reaction, the departure from accepted norms was indisputably to the appellant’s disadvantage. The omission was, after all, in respect of the crucial issue in the case, being the issue on which guilt or innocence turned. Was the evidence of the appellant’s reaction and non-reaction consistent only with her being aware that dangerous drugs were concealed in her suitcase? Or was that evidence at least also consistent with a belief on her part that what were concealed in her suitcase were United States dollars? In other words, was an inference of guilty knowledge the only reasonable one to be drawn? 60. Prosecuting counsel had advanced her arguments against the appellant on that crucial issue in most emphatic terms. Having placed considerable reliance on the appellant’s reaction, prosecuting counsel went on to argue that the prosecution had an even better point based on the appellant’s non-reaction, saying to the jury: “And it is that, ladies and gentlemen, that convicts this woman.” The saying (attributed to the renowned prosecutor Sir Richard Muir) that “[t]he duty of a prosecutor is to prosecute” is often cited to make the point that, within the bounds of fairness of course, prosecuting counsel is entitled to put the prosecution’s case as forcefully as is warranted by the evidence. That is one side of the coin. The other side of the same coin is the duty of a defender to defend. 61. As was his duty, defence counsel advanced arguments in the appellant’s favour to meet the arguments advanced against her by prosecuting counsel. They were arguments in the appellant’s favour worthy of a correctly directed jury’s attention. 62. Naturally and properly, the judge had taken pains to accord the appellant a fair trial. Just as naturally and properly, the Court of Appeal reviewed the appellant’s conviction with their customary conscientiousness. A trial judge’s assessment on how jurors ought to be directed in any given case is not lightly to be disturbed. Nor is an intermediate appellate court’s view that the way in which jurors were directed in any given case is acceptable or at least not fatal. But in the particular circumstances of the present case, it was vital that there be a direction on inferential reasoning specifically set in the context of the evidence and the arguments thereon. The absence of any such direction in the present case is, therefore, fatal to the conviction. 63. For the foregoing reasons, there is no escaping the conclusion that this departure from accepted norms was not only to the appellant’s disadvantage but was, in the particular circumstances of the present case, so seriously to her disadvantage as to constitute a substantial and grave injustice to her. Conviction quashed 64. Accordingly, I would allow this appeal to quash the appellant’s conviction. Retrial ordered 65. The stance adopted by counsel for the respondent at the hearing of the appeal is that if the conviction were quashed, then a retrial should be ordered. On the question of whether we should order a retrial, counsel for the appellant invited us to bear in mind that the appellant, who has already been tried twice, has been in custody since 6 September 2010. Each case of course depends ultimately on its own circumstances. Nevertheless, it is worth mentioning that there have been occasions on which this Court has ordered retrials of persons who had been in custody for periods comparable to the one for which the appellant has now been in custody. Even after that period has been deducted, the appellant would still face a long term of imprisonment to serve if convicted at a retrial. There is simply no getting away from the fact that the offence alleged against the appellant has to be regarded as a very serious one indeed. Lest saying more might prejudice the appellant’s retrial, suffice it to conclude by saying that, all things considered, the appropriate course is to order that the appellant be retried. I would so order. Lord Walker of Gestingthorpe NPJ: 66. I agree with the judgment of Mr Justice Bokhary NPJ. Mr Justice Ribeiro PJ: 67. The Court unanimously allows the appeal to quash the conviction and order a retrial. Mr Cheng Huan SC and Mr Edward H M Tang, instructed by Tanner De Witt, assigned by the Director of Legal Aid, for the Appellant Mr David Leung SC, DDPP and Mr Ira Lui, SPP of the Department of Justice, for the Respondent
Chief Justice Ma: 1. I agree with the judgment of Lord Phillips of Worth Matravers NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Lord Phillips of Worth Matravers NPJ. Mr Justice Tang PJ: 3. I agree with the judgment of Lord Phillips of Worth Matravers NPJ. Mr Justice Fok PJ: 4. I agree with the judgment of Lord Phillips of Worth Matravers NPJ. Lord Phillips of Worth Matravers NPJ: Introduction 5. The Appellant (“CSAV”) is a Chilean shipping corporation. The Respondent (“Hin-Pro”) is a company incorporated in Hong Kong that carries on business as a freight forwarder. Hin-Pro has brought proceedings against CSAV in various courts in the People’s Republic of China (“PRC”) under bills of lading issued by CSAV that contain exclusive English jurisdiction clauses. Hin-Pro has done so in disregard of anti-suit injunctions issued by the Commercial Court in England restraining Hin-Pro from suing CSAV in any jurisdiction other than the High Court of England and Wales. 6. In the English actions CSAV has sought damages for Hin-Pro’s breaches of contract in disregarding the exclusive jurisdiction clauses. In support of this claim for damages CSAV has sought, in the present proceedings, a Mareva injunction over Hin-Pro’s assets in Hong Kong and the appointment of a receiver, pursuant to the Court’s powers under section 21M of the High Court Ordinance (“section 21M”). The Court of Appeal, upholding a decision of the judge below, has ruled that this relief should not be granted as to grant it would be to intervene in a conflict between the English Court and the Courts of the PRC. CSAV appeals against this ruling. This appeal requires consideration of the correct approach to an application for relief under section 21M, which provides: Interim relief in the absence of substantive proceedings (1) Without prejudice to section 21L(1)[1], the Court of First Instance may by order appoint a receiver or grant other interim relief in relation to proceedings which- (a) have been or are to be commenced in a place outside Hong Kong; and (b) are capable of giving rise to a judgment which may be enforced in Hong Kong under any Ordinance or at common law. (2) An order under subsection (1) may be made either unconditionally or on such terms and conditions as the Court of First Instance thinks just. (3) Subsection (1) applies notwithstanding that- (a) the subject matter of these proceedings would not, apart from this section, give rise to a cause of action over which the Court of First Instance would have jurisdiction; or (b) the appointment of the receiver or the interim relief sought is not ancillary or incidental to any proceedings in Hong Kong; (4) The Court of First Instance may refuse an application for appointment of a receiver or interim relief under subsection (1) if, in the opinion of the Court, the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings concerned makes it unjust or inconvenient for the court to grant the application. (5) The power to make rules of court under section 54 includes power to make rules of court for- (a) the making of an application for appointment of a receiver or interim relief under subsection (1); and (b) the service out of the jurisdiction of an application or order for the appointment of a receiver or for interim relief. ... (7) In this section “interim relief” includes an interlocutory injunction referred to in section 21L(3) The procedural history 7. In the first half of 2012 Hin-Pro shipped at various ports in the PRC under bills of lading issued by CSAV goods for carriage to Venezuela. All the bills of lading had the following clause: “23 Law and jurisdiction This Bill of Lading and any claim arising hereunder shall be subject to English law and the jurisdiction of the English High Court of Justice in London. If, notwithstanding the foregoing, any proceedings are commenced in another jurisdiction, such proceedings shall be referred to ordinary courts of law. In the case of Chile, arbitrators shall not be competent to deal with any such disputes and proceedings shall be referred to the Chilean Ordinary Courts”. 8. In June 2012 Hin-Pro commenced proceedings against CSAV in the Wuhan Maritime Court claiming that cargoes shipped under 5 bills of lading for carriage from Nanjing to Puerto Caballo in Venezuela had been wrongly delivered without production of the bills of lading. 9. In response to these proceedings, in November 2012, CSAV commenced an action in the Commercial Court in London[2] (“the First English Action”) claiming that Clause 23 was an exclusive jurisdiction clause. CSAV sought and obtained ex parte from Burton J an injunction restraining Hin-Pro from further pursuing the Wuhan proceedings. Hin-Pro ignored this injunction and continued to pursue the Wuhan proceedings. This led to Andrew Smith J making an order on 21 March 2013 holding Hin-Pro, and its director and sole shareholder, Su Wei, in contempt. Ms Su, in her absence, was sentenced to 3 months’ imprisonment and an order was made for the sequestration of Hin-Pro’s property. 10. Meanwhile, Hin-Pro was busy commencing further similar proceedings in respect of other shipments in the Ningbo, Qingdao, Tianjin, Guangzhou and Shanghai Maritime Courts. CSAV took part in all the PRC proceedings and invoked the exclusive jurisdiction clauses in the bills of lading. The PRC courts held that these clauses were void. We have been provided with a translation of the judgment in the first action that was brought in Ningbo, which dealt with the issue of jurisdiction as follows: “the place where the Defendant has its domicile, the place where the contract is performed or signed, the place where the subject matter is located, all do not fall within the UK, therefore, the place where the competent court is located agreed in the said jurisdiction clause has no actual connection with the subject dispute and the jurisdiction thus agreed shall be determined as null and void. Since the loading port of the cargo concerned was Ningbo Port, China, Ningbo was the place where the carriage commenced; and as it fell within the jurisdiction of this Court and, therefore, this Court shall have jurisdiction over the subject case”. Thus the Court did not address the question of whether or not the jurisdiction clause was exclusive. 11. CSAV did not merely challenge the jurisdiction of the PRC courts, it joined issue on the merits of the claims brought by Hin-Pro. It is CSAV’s case that the claims made by Hin-Pro are fraudulent and that documents relied upon by Hin-Pro in support of its claims are forgeries. 12. In November 2013 CSAV commenced a second action against Hin-Pro in the English Commercial Court[3] (“the Second English Action”) in relation to the further breaches of the exclusive jurisdiction clause that had occurred. A further anti-suit injunction was obtained in relation to these proceedings. Once again Hin-Pro ignored this and continued to prosecute the actions commenced in the PRC. 13. On 26 May 2014, after a contested trial, the Ningbo Maritime Court gave judgment against CSAV in the sum of US$360,000 together with costs in the sum of RMB¥100,000. 14. On 13 June 2014 CSAV obtained ex parte in the English Commercial Court a worldwide freezing order against Hin-Pro in support of the two English Actions in the sum of US$27,835,000. This represented the total of the sums claimed by Hin-Pro in the various PRC proceedings. That order also required Hin-Pro to disclose its assets. 15. Three days later, on 16 June 2014, an application was made ex parte in the present proceedings, pursuant to section 21M, for a Mareva injunction freezing Hin-Pro’s assets in Hong Kong. This was in aid of the two English Actions and to give effect to the worldwide freezing order made by the English Court. DHCJ Saunders granted the injunction and made an ancillary disclosure order, requiring the defendant to disclose its assets in Hong Kong in so far as these exceeded HK$78,000. 16. On 17 July 2014, on the application of CSAV, DHCJ Saunders made a Receivership Order in respect of Hin-Pro’s assets. While the object of this was the preservation of those assets, the terms of the Order went wider inasmuch as it authorized the receivers to: “intervene and take any necessary steps on behalf of the Defendants in the PRC legal actions ... and if thought fit, withdraw and discontinue the said legal actions”. 17. It does not seem to me that this part of the Order was one that could properly be made under section 21M. Mr Scott SC, who has appeared on behalf of CSAV, has not sought to justify it. Indeed he has made it plain that he does not seek an order reinstating the Receivership Order. This Court has not been told what steps the Receivers took, or sought to take, in respect of the PRC proceedings, but those proceedings appear to have run their course. 18. On 18 July 2014 DHCJ Saunders, on the application of CSAV, amended the Mareva injunction so that it extended to the assets of Soar International Logistics Limited (“Soar”), a company registered in Hong Kong, on the ground that Soar is an asset of Hin-Pro. Soar has never taken any part in these proceedings and in these circumstances the order against Soar stands or falls with the order against Hin-Pro. 19. On 23 July 2014 CSAV paid about HK$2.9 million into Hin-Pro’s Hong Kong account in satisfaction of the Ningbo judgment. This account was, of course, frozen under the Mareva. 20. On 30 July 2014, on the application of CSAV, DHCJ Saunders made a Receivership Order for the appointment of Interim Receivers over all Soar’s assets. 21. On 14 October 2014 Cooke J delivered judgment in the Second English Action[4]. Hin-Pro did not attend the trial. It had been given permission to attend and make submissions if it satisfied various pre-conditions, but it had failed to satisfy most of these. Cooke J held that the jurisdiction clause in the bills of lading was, on its true construction, an exclusive jurisdiction clause and made a permanent anti-suit injunction. He held in para 18 that “there are good reasons for considering that the claims brought in China by Hin-Pro are dishonest claims, based on false documents ...” 22. He ruled that Hin-Pro was in breach of contract in bringing proceedings in the PRC and that the damages caused by this breach consisted of all the sums awarded to Hin-Pro in China. He ordered Hin-Pro to pay by way of damages: (1) the US$360,000 and costs of RMB¥100,000 awarded by the Ningbo Maritime Court on 27 May 2014; (2) a further sum of US$652,936 and costs of RMB¥100,000 awarded by the same court on 10 September 2014 (this sum has not been paid by CSAV); (3) costs incurred by CSAV in proceedings in the PRC of US$489,692.71. He ordered Hin-Pro to pay as damages any further sums that might be awarded by the PRC courts. 23. Meanwhile, in September 2014 Hin-Pro had applied for the discharge of the Mareva injunction and the Receivership Order made against Hin-Pro in this jurisdiction. On 15 October 2014, the day after Cooke J gave judgment in London, DHCJ Wilson Chan gave judgment in Hong Kong, discharging these Orders. In that judgment he recorded the submission of Mr Barlow SC for Hin-Pro that CSAV had been guilty of non-disclosure in failing to inform DHCJ Saunders that it had taken part in the PRC proceedings by defending those proceedings and by making an objection to the jurisdiction which had been rejected. He recorded that Mr Barlow SC submitted that these non-disclosures were “incurable, because they compel the Court to dismiss the plaintiff’s application pursuant to section 21M(4)”. 24. Although DHCJ Wilson Chan said “I agree with Mr Barlow SC’s submissions” he went on to found his decision not on non-disclosure but on the merits of the case as advanced by Mr Barlow SC. His submission, as summarised by the judge at para 35 of his judgment, was that “it would be ‘unjust’ and ‘inconvenient’ for this court to exercise its section 21M jurisdiction by [arrogating] to itself the role of referee or adjudicator over cases in which two courts are in Judicial Conflict with each other – since such conduct would be contrary to this court’s policy of judicial comity ...” The words in italics are taken from section 21M(4). 25. The judge held at paras 39-40: “By these proceedings, the plaintiff is seeking to have this court assist the English court in thwarting the defendant’s claims in the PRC courts. As the two courts are in clear conflict over the question of jurisdiction, I agree that the policy of section 21M(4) and this court’s policy of judicial comity require this court to refuse to make any order. This court has been and is being asked to choose between the two courts and to take a course which has always been contrary to the policy of our courts, namely: ‘to arrogate to itself the decision how a foreign court should determine the matter’ [see: Deutsche Bank AG v Highland Crusader Offshore Partners LP [2010] 1 WLR 1023 at 1036F-G]. Here, as in England, our court’s policy of judicial comity and respect for foreign courts requires that no choice between the two courts should be made. It follows that the Hin-Pro Mareva (upon which the Hin-Pro Receivership Order, the Soar Mareva and the Soar Receivership Order were based) should be discharged due to the requirement of section 21M(4).” 26. The discharge of these orders was made subject to an undertaking given by Hin-Pro to pay the HK$2.9 million odd received in respect of the first Ningbo judgment into court and not to take any step to enforce any PRC judgment against CSAV without first obtaining CSAV’s consent or leave of both the Hong Kong and the English courts. This undertaking remains in force to this day. 27. I am about to turn to the judgment of the Court of Appeal, but before doing so I should refer to some more recent developments. Despite being in contempt, Hin-Pro was permitted to appeal to the English Court of Appeal against the judgment of Cooke J. On 23 April 2015 the Court of Appeal delivered its judgment, dismissing the appeal[5]. 28. CSAV has achieved significant success in the litigation in the PRC. Mr Scott SC for CSAV informed the Court that the current position is as follows. Hin-Pro commenced five actions in respect of five bills of lading in Wuhan, which were consolidated into a single action, and seventy actions in respect of seventy bills of lading in Ningbo, Shanghai, Tianjin, Guangzhou and Qingdao. These were consolidated into twenty-three actions. 29. Nineteen consolidated actions were tried in Ningbo with first instance decisions in Hin-Pro’s favour. In October/November 2015 CSAV succeeded in overturning eighteen of these decisions on appeal and one decision on retrial. Applications for retrial of the appellate decisions were dismissed by the Supreme People’s Court and there is no further right of appeal in the nineteen actions. If these include the action in respect of which US$360,000 and costs have been paid by CSAV into court it would seem that these sums should now be paid out to CSAV. If so, CSAV will no doubt seek the appropriate order. 30. Judgments were given in CSAV’s favour in consolidated actions in Shanghai and Tianjin and these are under appeal by Hin-Pro. Judgment has recently been given in CSAV’s favour in the consolidated action in Qingdao. First instance judgments are pending in Guangzhou and Wuhan. The judgment of the Court of Appeal 31. In a lengthy and careful judgment, to which all members contributed, the Court of Appeal, consisting of Hon Lam VP, Barma JA and Poon J, dismissed CSAV’s appeal. In doing so it proceeded on the basis that section 21M was the Hong Kong equivalent of section 25 of the English Civil Jurisdiction and Judgments Act 1982.[6] That section is headed, as is section 21M, “Interim relief...in the absence of substantive proceedings”. As extended by the Civil Jurisdiction and Judgments Act 1982 (Interim Relief) Order 1997, it grants, by subsection (1) to the High Court of England and Wales or Northern Ireland the power to grant interim relief where proceedings have been commenced in a foreign court. Subsection (2) provides: “On an application for any interim relief under subsection (1) the court may refuse to grant that relief if, in the opinion of the court, the fact that the court has no jurisdiction apart from this section in relation to the subject-matter of the proceedings in question makes it inexpedient for the court to grant it.” 32. The Court referred to two decisions where the English Court of Appeal had laid down the test to be applied at the first stage before considering the question of inexpediency in accordance with subsection (2): Motorola Credit Corporation v Uzan No (2)[7] and Refco Inc v Eastern Trading Co (“Refco”)[8]. In the latter case at p.170-1 Morritt LJ summarised the position as follows: “... the approach of the Court in this country to an application for interim relief under s.25 is to consider first if the facts would warrant the relief sought if the substantive proceedings were brought in England. If the answer to that question is in the affirmative then the second question arises, whether, in the terms of s.25(2), the fact that the Court has no jurisdiction apart from the [section] makes it inexpedient to grant the interim relief sought.” 33. The Court of Appeal held that, applying this approach, “... even before one comes to the second stage in terms of consideration under section 21M(4), the court must ask itself whether the facts of the case warrant[] the grant of interim relief if substantive proceedings were brought in Hong Kong. This entails the judge hearing the application to examine the strength and arguability of an applicant’s claim in the context of Hong Kong law rather than simply accepting a decision of the foreign court.”[9] 34. Turning to the substantive proceedings in this case, the Court of Appeal applied the approach in Refco on the basis that this required the Court to consider what the position would have been had CSAV brought its actions in Hong Kong, rather than in England. The primary relief sought in England was an anti-suit injunction.[10] This presented “a special problem” because “if the substantive anti-suit proceedings were brought in Hong Kong, we have to be cautious in light of the requirement of judicial comity and the lack of primary jurisdiction over the subject matter in our courts”.[11] 35. Having cited extensively from the speech of Lord Goff in Airbus Industrie GIE v Patel[12] the Court of Appeal concluded[13]: “Having regard to the principle of judicial comity, had the plaintiff commenced a claim for [an] anti-suit injunction in Hong Kong, it is doubtful whether our court would grant such [an] injunction to prohibit proceedings in another jurisdiction when it does not have a sufficient interest in, or connection with, the matter in question to justify the indirect interference with the foreign court. In the present context, the court in Hong Kong is not a natural forum for the disputes in relation to the bills of lading. Nor is it designated as a forum for the disputes in the bills of lading. Neither have the parties come to Hong Kong to litigate on such disputes.” 36. The Court of Appeal observed that CSAV was seeking a Mareva injunction to protect its claim for damages rather than an anti-suit injunction, but concluded that this did not make any difference, in view of the requirement to consider at the first stage whether this relief would be granted if the substantive claim were brought in Hong Kong.[14] The anti-suit nature of the relief sought was manifested in the fact that damages were sought to reverse the effect of whatever judgments might be issued by the courts in the PRC.[15] After considering The Angelic Grace[16] and Deutsche Bank AG v Highland Crusader Partners LP[17]the Court concluded that no breach of comity was involved in an English court enforcing an English exclusive jurisdiction clause, or in a Hong Kong court enforcing a Hong Kong exclusive jurisdiction clause. Here, however, CSAV was asking the Hong Kong court to enforce an exclusive jurisdiction clause in favour of the English court.[18] 37. The Court of Appeal concluded: “Viewed in this light, these orders had been obtained by the plaintiff for the purpose of implementing the anti-suit injunctions granted in England though they had not (and could not have) applied for such injunctions in Hong Kong. We do not think one can side-step the requirement to have regard to judicial comity in this way”.[19] 38. This was the primary basis of the decision of the Court of Appeal. The Court went on to observe, however, that as a matter of discretion, the terms of the Mareva and the Hin-Pro Receivership Order could not be justified. The undertaking given by Hin-Pro not to enforce judgments given by the PRC courts provided CSAV with adequate protection.[20]Accordingly the Court of Appeal dismissed CSAV’s appeal. The First Question 39. The first question raised by this appeal is what are the legal principles applicable on this section 21M application and, in particular, whether the Court of Appeal was right to apply the first stage test in Refco and, if so, whether it applied that test correctly. The starting point is to consider the origin and object of section 21M. 40. In Mareva Compania Naviera S.A. v International Bulk Carriers SA[21] Lord Denning MR identified a novel form of injunctive relief, which became known as a Mareva. It prohibited a defendant from disposing of his assets. Its object was to ensure that if judgment was given against him the judgment could be enforced. In Mercedes Benz A.G. v Leiduck[22] Lord Mustill carried out a somewhat critical analysis of the pedigree of this remedy, with particular reference to the first case in which its legitimacy was challenged inter partes – Rasu Maritima S.A. v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara[23]. Lord Mustill was well placed to carry out the analysis because it had been he, as counsel, who had sought unsuccessfully to persuade Lord Denning that he had no jurisdiction to grant an injunction in that case. Regardless of its pedigree, the Mareva injunction was welcomed by the commercial world and was recognized by the English Parliament in section 37(3) of the Supreme Court Act 1981 and also adopted in Hong Kong. 41. Meanwhile, Lord Denning attempted to take his new found remedy a step further. In the early cases Marevas were sought and granted as ancillary relief in cases where the plaintiff was able to found English jurisdiction in respect of the substantive claim. In The Siskina[24], with the support of Lawton LJ, Lord Denning held that the court had jurisdiction to grant a Mareva injunction over property of a defendant in England, notwithstanding that it had no jurisdiction to entertain the substantive claim that was being pursued against the defendant in another jurisdiction. This decision was unanimously reversed by the House of Lords. Giving the leading speech Lord Diplock held: “A right to obtain an interlocutory injunction is not a cause of action. It cannot stand on its own. It is dependent upon there being a pre-existing cause of action against the defendant arising out of an invasion, actual or threatened by him, of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court.”[25] 42. In Mercedes Benz v Leiduck the Privy Council considered an application by a plaintiff to the High Court of Hong Kong for a worldwide Mareva in support of anticipated proceedings pursuant to Ord. 11 r. 1(1)(m) to serve a writ out of the jurisdiction on the defendant to enforce a judgment that was anticipated that the court of Monaco would give against the defendant. By a majority the Privy Council held that the Court had no jurisdiction to grant this relief. Rule 1(1)(m) could not be relied on before judgment had actually been obtained in Monaco. 43. Lord Nicholls delivered a powerful dissent, distinguishing the Siskina. Part of this has relevance to the issues arising on the present appeal: “Although normally granted in the proceedings in which the judgment is being sought, Mareva relief is not granted in aid of the cause of action asserted in the proceedings, at any rate in the ordinary sense. It is not so much relief appurtenant to a money claim as relief appurtenant to a prospective money judgment. It is relief granted to facilitate the process of execution or enforcement which will arise when, but only when, the judgment for payment of an amount of money has been obtained...Since Mareva relief is part of the court’s armoury relating to the enforcement process what matters so far as the existence of the jurisdiction is concerned, is the anticipated money judgment and whether it will be enforceable by the Hong Kong court. In general, and with some well known exceptions, the cause of action is irrelevant when a judgment creditor is seeking to enforce a foreign judgment. It must surely be likewise with a Mareva injunction. When a court is asked to grant a Mareva injunction, and a question arises about its jurisdiction to make the order, the answer is not to be found by looking for the cause of action on which the plaintiff is relying to obtain judgment. So far as jurisdiction is concerned, that would be to look in the wrong direction. Since Mareva relief is designed to prevent a defendant from frustrating enforcement of a judgment when obtained, the plaintiff’s underlying cause of action entitling him to his judgment is not an apposite consideration, any more than it is when a judgment creditor applies to the court to enforce the judgment after it has been obtained. Of course the matter stands very differently when the court is considering the exercise of the jurisdiction and whether in its discretion to grant or refuse relief. Among the matters the court is then concerned to consider are the plaintiff’s prospects of obtaining judgment and the likely amount of the judgment. For that purpose the court will be concerned to identify the plaintiff’s underlying cause of action.” 44. In England the effect of the Siskina has been reversed by section 25(1) of the Civil Jurisdiction and Judgments Act, as amended. In Hong Kong section 21M was introduced to bring about similar reform, pursuant to the recommendations of the Final Report of the Chief Justice’s Working Party on Civil Justice Reform.[26] That Report endorsed a proposal that: “Interim relief by way of Mareva injunctions and/or Anton Piller orders should be available in relation to proceedings which are taking place, or will take place, outside the jurisdiction (and where no such substantive proceedings are contemplated in Hong Kong).”[27] 45. In endorsing this proposal, the Working Party referred with approval to the comments of Lord Nicholls in Mercedes Benz v Leiduck and to the changes made in England by section 25 of the Civil Jurisdiction and Judgments Act 1982. It observed that interim relief would only make sense where the foreign proceedings in question would lead to a judgment, which, in the ordinary course of events, could be enforced in Hong Kong. Thus relief would not be available where a foreign court had made an exorbitant assumption of jurisdiction or made an order which would be contrary to public policy to enforce. Such foreign judgments would be impeachable and would therefore not found either enforcement or the interim jurisdiction[28]. 46. The Working Party considered that it was not necessary for the legislature and the rules to go much further in providing guidance in relation to the exercise of the court’s discretion in as much as the courts here would no doubt have regard to the relevant English case law on section 25 of the 1982 Act and decide on the extent to which it should be applied in Hong Kong. That is the exercise that falls to this Court to undertake on this appeal. The correct approach to the first stage 47. The starting point is to consider whether, if the proceedings that have been or are to be commenced in the foreign court result in a judgment, that judgment is one that the Hong Kong court may enforce. This is a precondition to the exercise of the jurisdiction[29] and is underlined by section 21N of the High Court Ordinance, which provides: “(1) In exercising the power under section 21M(1), the Court of First Instance shall have regard to the fact that the power is- (a) ancillary to proceedings that have been or are to be commenced in a place outside Hong Kong; and (b) for the purpose of facilitating the process of a court outside Hong Kong that has primary jurisdiction over such proceedings.” 48. If the nature of the foreign proceedings is such that the Hong Kong court will not enforce any judgment to which they give rise – eg because the exercise of the foreign jurisdiction is exorbitant or for some other reason of public policy, then there can be no question of granting relief under section 21M. 49. Next the court should ask itself the same questions as it would if a Mareva were sought in support of an action proceeding in the Hong Kong court, namely (i) has the plaintiff a good arguable case and (ii) is there a real risk that the defendant will dissipate his assets if the Mareva is not granted? It is this, no more and no less, that Morritt LJ had in mind in the passage of his judgment in Refco that I have cited at para 32 above. This is apparent from the passage in his judgment that immediately followed: “Accordingly, the first issue is whether if the substantive proceedings were pending in this Court the conditions for the grant of the Mareva relief sought have been satisfied. There is no dispute that there is a properly arguable case...The crucial question is, therefore, whether there is sufficient evidence of a risk of dissipation of assets so that any judgment obtained by Refco will go unsatisfied.” 50. The Court of Appeal in para 32 of its judgment, cited at para 33 above, misinterpreted Morritt LJ’s judgment in Refco in postulating that it was necessary to consider the strength of the substantive claim under the law of Hong Kong. As Lord Nicholls observed in Mercedes Benz v Leiduck the underlying cause of action has little significance. Foreign judgments will be enforced in Hong Kong even though the claim is one that would not have succeeded under the law of Hong Kong. There is no reason in principle why the prospect of such a judgment should not receive the protection of a Mareva injunction. 51. Before considering Refco, the Court of Appeal had observed that in exercising the power under section 21M the court was required to abide by the general principles governing interim relief, including, where a Mareva was sought, the need for the plaintiff to show a good arguable case[30]. In that context the Court of Appeal cited with approval the following passage from the judgment of the English Court of Appeal in Motorola Credit Corporation v Uzant (No 2)[31]: “Mr Leggatt argues that, in the context of proceedings under section 25 of the 1982 Act, where (as here) the foreign court in interlocutory proceedings has itself determined that a good arguable case exists against the defendants, that is, or falls to be treated as, a final decision upon that issue for the purposes of the section 25 jurisdiction of this court. We do not think that is correct. The requirement that the claimant must establish that Mareva-type relief would be granted if the substantive proceedings were brought in England requires a decision of the judge based on English procedures and the approach of the English court to the nature and sufficiency of the evidence in a situation where the claimant has come to England to obtain a remedy unavailable to him in the substantive foreign proceedings. It is frequently, indeed usually, the position that section 25 proceedings are brought following issue and service of the foreign proceedings but before there has been any decision of the foreign court which examines the strength or arguability of the claimant’s substantive case. However, whether or not that is the position, in our view the English court is required, once issue is joined in the section 25 proceedings, to make a separate exercise of judgment rather than a simple acceptance of the decision of the foreign court in interlocutory proceedings decided on the principles applicable, the evidence then available, and the levels of proof required in that jurisdiction.” 52. This passage must, in my view, be treated with caution if applied to proceedings under section 21M. A Mareva injunction can have serious consequences for a defendant. It is a remedy that is open to abuse. A court must always exercise caution before granting this relief. But as section 21N(1)(b) states, the object of the exercise is to facilitate the process of the foreign court that has primary jurisdiction. The question that the Hong Court has to consider is whether the plaintiff has a good arguable case in the foreign court. Section 21M relief can be sought in a wide variety of circumstances – sometimes before proceedings have even been commenced in the primary jurisdiction, often when they have been commenced but where that court has not considered the strength of the plaintiff’s case. Where the court of primary jurisdiction has carried out that exercise, however, its conclusions will normally carry weight with the Hong Kong court. Indeed, this was recognized by the Court of Appeal in Motorola Credit v Uzan, for it stated: “Where there is available to the judge on an application under section 25 a reasoned judgment of a foreign court at an interlocutory stage upon the merits or arguability of the defendant’s [sic] claim, that judgment will inevitably form the judge’s starting point in relation to the question of “good arguable case” and, depending upon the apparent cogency of the reasoning and the force of any arguments raised by the defendant, is likely to prove conclusive.”[32] 53. In summary, in section 21M proceedings the court has first to consider whether, if the plaintiff succeeds in the primary jurisdiction the resultant judgment is one that the Hong Kong court will enforce. If the answer to that is yes, the court has to form a view, on all the available material, including any findings of the foreign court itself, whether the plaintiff has a good arguable case before the foreign court and whether there is a real risk that the defendant will dissipate his assets if the Mareva is not granted. The second stage 54. The second stage of consideration of a section 21M application requires the court to consider whether “the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings concerned” makes it “unjust” or “inconvenient” for the court to grant the application.” Mareva relief is discretionary in any event, but this provision in section 21M(4) underlines the fact that the court has a wide discretion to refuse to make the order sought if the fact that the substantive claim is being litigated in a foreign court has consequences that make the grant of a Mareva “unjust” or “inconvenient”. It does not seem to me to be very helpful to try to formulate a list of circumstances where it will be unjust or inconvenient to grant the Mareva sought. In Credit Suisse Fides Trust S.A.[33]Lord Bingham of Cornhill CJ, when considering the similar question of whether it was “inexpedient” to make an Order under section 25 of the 1982 Act, stated: “...it would obviously weigh heavily, probably conclusively, against the grant of interim relief if such grant would obstruct or hamper the management of the case by the court seized of the substantive proceedings (‘the primary court’) or give rise to a risk of conflicting, inconsistent or overlapping orders in other courts.” He observed, however, that: “It would be unwise to attempt to list all the considerations which might be held to make the grant of relief under section 25 inexpedient or expedient, whether on a municipal or a worldwide basis.” The English Court of Appeal formulated a list in Motorola Credit v Uzan, as quoted by the Court of Appeal in the present case[34]. However, the circumstances that led the Court of Appeal to conclude that it was inappropriate to make the Order in this case are in a category of their own, and fall to be considered in the context of the other two questions raised by this appeal. The second and third questions 55. The ‘second’ and ‘third’ questions relate to the relevance of the English cases dealing with anti-suit injunctions considered by the Court of Appeal in relation to judicial comity. This is a matter that properly fell to be taken into account in the second stage of the Court of Appeal’s consideration of whether a Mareva should have been granted. 56. There was a time when it was considered to infringe judicial comity for the court of one country to enforce an exclusive jurisdiction clause in a contract by issuing an injunction restraining a defendant from proceeding in the court of another country. This belief was largely founded on observations by Lord Goff of Chievely in Airbus Industrie G.I.E. v Patel and Others[35]. In that case, however, the issue was whether an anti-suit injunction should be granted on the grounds that it was vexatious and oppressive for the plaintiffs to pursue their suit in the foreign jurisdiction. Lord Goff made it plain that his observations did not apply to cases where there was a contractual choice of forum[36]. 57. More recently it has been recognized that an anti-suit injunction in support of an exclusive jurisdiction clause, while constituting an indirect interference with the process of a foreign court, does not thereby infringe judicial comity. This is because the relief is directed not against the foreign court but against the individual defendant who is disregarding his contractual obligations. The following observations of Millett LJ in The Angelic Grace[37] in relation to anti-suit injunctions are now generally recognized as stating the true position: “In my judgment, the time has come to lay aside the ritual incantation that this is a jurisdiction which should only be exercised sparingly and with great caution. There have been many statements of great authority warning of the danger of giving an appearance of undue interference with the proceedings of a foreign Court. Such sensitivity to the feelings of a foreign Court has much to commend it where the injunction is sought on the ground of forum non conveniens or on the general ground that the foreign proceedings are vexatious or oppressive but where no breach of contract is involved. In the former case, great care may be needed to avoid casting doubt on the fairness or adequacy of the procedures of the foreign Court. In the latter case, the question whether the proceedings are vexatious or oppressive is primarily a matter for the Court before which they are pending. But in my judgment there is no good reason for diffidence in granting an injunction to restrain foreign proceedings on the clear and simple ground that the defendant as promised not to bring them ...” I cannot accept the proposition that any Court would be offended by the grant of an injunction to restrain a party from invoking a jurisdiction which he had promised not to invoke and which it was [his] own duty to decline.” 58. In the present case it was this approach that led the Court of Appeal to hold that no breach of comity was involved in the English Court issuing an anti-suit injunction to restrain a defendant from breaching an English exclusive jurisdiction clause[38]. It followed from this that the Court accepted that there had been no breach of comity in the English Court issuing an anti-suit injunction in this case. At this point, however, the reasoning of the Court went awry. First it treated the application for a Mareva to provide protection in relation to an award of damages by the English Court as being equivalent to asking “the court in Hong Kong to enforce an exclusive jurisdiction clause in favour of an English Court.”[39] Secondly it treated proceedings aimed at assisting the enforcement of the English court’s judgment as being an intervention in a conflict as to jurisdiction between the English and the PRC Courts that involved a breach of comity. 59. The Hong Kong Court has not been asked to assist the English Court to enforce an exclusive jurisdiction clause. It has been asked to assist in enforcing an award of damages by the English Court for breach of such a clause. If the action of the English Court in awarding such damages involved a breach of comity towards the PRC courts, then I accept that to assist in enforcing those damages might also involve a breach of comity. In that case enforcement of any judgment would seem open to objection on grounds of public policy and the Mareva should have been refused for that reason. But for reasons already explored, the action of the English Court involves no such breach of comity. There is no bar on the ground of public policy to enforcing an award of damages made by the English Court nor to the grant of a Mareva injunction in support of the judgment of the English Court. 60. For these reasons the primary ground on which the Court of Appeal upheld the decision of DHCJ Wilson Chan to refuse the injunction was unsound. CSAV had established that it had a good arguable case in the English proceedings. Indeed it had obtained judgment, albeit that this was subject to appeal. The nature of those proceedings did not make it “unjust” or “inconvenient” to grant the relief sought. Discretion and the risk of dissipation of assets 61. The Court of Appeal held that Hin Pro’s undertaking not to enforce any judgment obtained from the PRC Courts without the consent of CSAV or the Courts of Hong Kong and England provided CSAV with adequate security so that there was no justification for the grant of a Mareva injunction. I consider that this was an undertaking that the Court of Appeal should have viewed with reservation. It was CSAV’s case that not merely had Hin-Pro brought the initial PRC proceedings in breach of contract, not merely had Hin-Pro brought the subsequent PRC proceedings in contempt of the order of the English Court, but that the PRC proceedings were fraudulent and based on forged documents. In the Second English Action Cooke J had found that there were good grounds for believing the claims to be fraudulent. At no stage has Hin-Pro condescended to offer an explanation for the anomalies that led Cooke J to express this view. 62. Furthermore, CSAV has incurred no doubt substantial costs in defending proceedings brought in a number of different courts in the PRC. The Court of Appeal declined to grant Mareva protection in respect of these “in view of our earlier conclusion on judicial conflicts”[40]. While the Court of Appeal might well have been justified in reviewing the amount secured by the Mareva injunction, I consider that it erred in principle in ruling out any relief at all as a matter of discretion. 63. I should add that before us, for the first time, Mr Barlow SC submitted that section 21M should not be construed so as to apply to Mareva relief as to do so would conflict with Article 105 of the Basic Law. We had some difficulty with this argument as section 21M is said to be without prejudice to section 21L, which expressly recognises the power to grant Mareva relief. When this was put to him, Mr Barlow SC did not press the point and I can see no merit in it. Disposal 64. For the reasons that I have given I would allow this appeal. Much water has, however, flown under the bridge since the Court of Appeal gave judgment. Final judgment has been given in the English Commercial Court and confirmed on appeal. Most of the decisions of the PRC Courts have been reversed on appeal and it seems unlikely that, at the end of the day, there will be any judgment adverse to CSAV outstanding in the PRC. As I understand it damages remain to be assessed in the English Court but may well relate largely to costs incurred by CSAV. Hin-Pro’s overall behaviour has, however, been so unsatisfactory that I would reinstate Mareva relief in the much more modest amount that is in play. I would remit the case to the High Court to assess that amount. 65. As to costs, any written submissions should be exchanged and lodged with the Registrar within 14 days of the handing down of this judgment, with liberty to serve and lodge written submissions in reply within 14 days thereafter. Mr John Scott SC and Ms Frances Lok, instructed by Stephenson Harwood, for the Appellant Mr Barrie Barlow SC and Mr George Chu, instructed by Damien Shea & Co., for the Respondent [1] Section 21L provides: (1) The Court of First Instance may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the Court of First Instance to be just or convenient to do so. (2) Any such order may be made either unconditionally or on such terms and conditions as the Court thinks just. (3) The power of the Court of First Instance under subsection (1) or section 21M to grant an interlocutory injunction restraining a party to any proceedings from removing from the jurisdiction of the Court of First Instance, or otherwise dealing with, assets located within that jurisdiction shall be exercisable in cases where that party is, as well as in cases where he is not, domiciled or resident or present within that jurisdiction. ... [2] 2012 Folio No. 1519 [3] 2013 Folio No. 1248 [4] [2014] EWHC 3632 (Comm) [5] [2015] EWCA Civ 401 [6] Court of Appeal para 30 [7] [2004] 1 WLR 113 [8] [1999] 1 Lloyd’s Rep 159 [9] Court of Appeal, para 32 [10] Court of Appeal para 34 [11] Court of Appeal para 35 [12] [1999] 1 AC 119 [13] Court of Appeal para 45 [14] Court of Appeal para 49 [15] Court of Appeal para 51 [16] [1995] 1 Lloyds Rep 87 [17] [2010] 1 WLR 1023 [18] Court of Appeal para 57 [19] Court of Appeal para 53 [20] Court of Appeal para 71 [21] [1975] 2 Lloyd’s Rep 509 [22] [1996] AC 284 at 299-300 [23] [1978] QB 644 [24] [1979] AC 210 [25] at p. 256 [26] Published 3 March 2004 [27] Section 12.2, Proposal 17 [28] Para 341 [29] Section 21M(1)(b) [30] Court of Appeal para 29 [31] [2004] 1 WLR 113, para 102 [32] At para 105 [33] [1998] QB 818 at p. 831 [34] Court of Appeal para 62 [35] [1999] 1 AC 119 [36] p. 138 [37] at p. 96 [38] Court of Appeal para 57 [39] ibid [40] Court of Appeal para 57
Mr Justice Ribeiro PJ : 1. I agree with the joint judgment of Mr Justice Fok PJ and Mr Justice Stock NPJ. Mr Justice Tang PJ: 2. I agree with the joint judgment of Mr Justice Fok PJ and Mr Justice Stock NPJ. Mr Justice Fok PJ and Mr Justice Stock NPJ: Introduction 3. The Bankruptcy Ordinance[1] provides that after a person is adjudged bankrupt he is entitled to be discharged from bankruptcy upon the expiration of periods prescribed by the Ordinance. However, by reason of section 30A(10)(a), the relevant period shall, in the case of a person who has left Hong Kong before the commencement of the bankruptcy, not start to run until he returns to Hong Kong and notifies the trustee in bankruptcy of his return. The question in this case is whether that subsection contravenes the constitutional freedom to travel and to enter and leave Hong Kong. The facts 4. The respondent is a national of South Korea. He came to Hong Kong in 1993 to work and in March 2000 acquired the status of permanent resident. In July 2003, while he was still residing in Hong Kong, proceedings against him were commenced claiming damages for fraud and misrepresentation in connection with securities transactions; and default judgment was entered on 8 November 2004. 5. In August 2003, he left Hong Kong to live in the USA. In January 2005 a statutory demand was issued; on 3 July 2006 a petition in bankruptcy was presented; in November that year an order was secured for substituted service of the petition; and the bankruptcy order was made on 20 December 2006. 6. On 3 April 2007, trustees of the respondent’s property were appointed (“the Trustees”). Two creditors lodged proofs of debt in a total sum of HK$255,190,535.95. 7. In July 2011, leave was granted to the Trustees pursuant to section 29 of the Ordinance to examine the respondent but the respondent failed to attend that examination and on 3 May 2012 there was issued a prohibition order and a warrant for his arrest. 8. Upon his arrival in Hong Kong on 10 May 2012, the respondent was arrested and brought the following day before the Master. The examination of the respondent was adjourned upon his intimation that he wished to challenge the constitutionality of section 30A(10)(a) since, but for that provision, the automatic discharge from bankruptcy conferred by section 30A(1) and (2) took effect on 21 December 2010, so that, on that basis, he could no longer lawfully be examined under section 29. By summons dated 26 July 2012, he sought declarations to that effect. This appeal has its origin in that summons. 9. In April 2006, prior to the date of the bankruptcy order, the respondent left the United States and from early December 2006 to 11 April 2008 he lived in South Korea. He visited Hong Kong on a number of occasions in 2006, and on numerous occasions in 2008, 2009, 2010 and 2011. It is common ground that he was not in Hong Kong on the date of the bankruptcy order and that upon his subsequent visits to Hong Kong he did not notify the trustees of his return. The proceedings leading to this appeal 10. The respondent’s summons was for declarations as against the Trustees and the Official Receiver to the effect that: (1) by virtue of section 30A(1) and (2) of the Ordinance[2], he had been discharged from bankruptcy on and after 21 December 2010; (2) in so far as it was contended that section 30A(10)(a) of the Ordinance had suspended the operation of the relevant period for which subsections (1) and (2) provided, section 30A(10)(a) was unconstitutional and therefore of no effect; and (3) if it were adjudged that the respondent had been discharged from bankruptcy on and after 21 December 2010, section 29 of the Ordinance (which empowers the court to issue a summons for his examination) could not lawfully be invoked as against him. 11. By a judgment dated 2 May 2013, the application for these declarations was dismissed at first instance[3]. 12. The Court of Appeal[4]reversed the judge’s decision as to the constitutionality of the impugned provision[5] and, accordingly, granted a declaration that the provision was unconstitutional and that the bankruptcy had been discharged on 21 December 2010.[6] 13. On 16 April 2015, the Court of Appeal granted leave to the Official Receiver to appeal on the ground that the appeal involved a question of great general and public importance, namely, whether section 30A(10)(a) of the Ordinance is constitutional. The Trustees have taken no part in this appeal. The scheme under the Ordinance 14. Section 30A(10)(a) forms part of a scheme regulating discharge from bankruptcy introduced into the Ordinance by amendments in 1996.[7] Whereas, under the previous statutory scheme, discharge from bankruptcy was “virtually impossible”[8], the present scheme contained in sections 30, 30A and 30B of the Ordinance now provides for an automatic discharge from bankruptcy after the passage of a particular period of time: four years for a person not previously adjudged bankrupt and five years for a person previously so adjudged (“the relevant period of bankruptcy”).[9] Thus, under section 30 of the Ordinance, the relevant period of bankruptcy of a person commences with the day on which the order is made and continues until he is discharged either automatically (under section 30A) or, in limited circumstances, by early discharge on the application of the bankrupt (under section 30B).[10] 15. Under section 30A(3), there is power for the court to extend the relevant period of bankruptcy by ordering that the period shall cease to run for a further period of four years for a first-time bankrupt or three years for a previous bankrupt, so that the maximum period of bankruptcy in either case is eight years. There are eight grounds on which an order under this sub-section may be made, namely: “(a) in the case of a discharge [of a person who has not been previously adjudged bankrupt], that the bankrupt is likely within 5 years of the commencement of the bankruptcy to be able to make a significant contribution to his estate; (b) that the discharge of the bankrupt would prejudice the administration of his estate; (c) that the bankrupt has failed to co-operate in the administration of his estate; (d) that the conduct of the bankrupt, either in respect of the period before or the period after the commencement of the bankruptcy, has been unsatisfactory; (e) without limiting paragraph (c) or (d), that the bankrupt has departed from Hong Kong and has failed forthwith to return to Hong Kong following a request to do so from the Official Receiver or the trustee; (f) that the bankrupt has continued to trade after knowing himself to be insolvent; (g) that the bankrupt has committed an offence under section 129 or any of sections 131 to 136; (h) that the bankrupt has failed to prepare an annual report of his earnings and acquisitions for the trustee.”[11] 16. The purpose of the scheme of automatic discharge is to provide bankrupts with greater incentive to co-operate with the trustee in bankruptcy and to ensure the bankrupt’s eventual rehabilitation from bankruptcy.[12] Discharge is now a matter of right (rather than privilege),[13] but the right is dependent on the bankrupt’s co-operation with the trustee in bankruptcy in the administration of the estate by, amongst other things: (1) submitting a statement of his affairs containing particulars of his creditors, his debts and other liabilities and of his assets pursuant to section 18 of the Ordinance[14]; and (2) complying with a range of duties regarding the discovery and realisation of his property set out in section 26 of the Ordinance.[15] 17. Failure to provide such co-operation may be a ground for objection to the automatic discharge of the bankruptcy[16] and so, to that extent, the discharge is conditional upon the bankrupt’s compliance with those duties.[17] Section 30A(10) 18. Section 30A(10) seeks to regulate the commencement and continuation of the relevant bankruptcy period and provides: “Notwithstanding subsections (1)-(3), where a bankrupt- (a) has, before the commencement of the bankruptcy, left Hong Kong and has not returned to Hong Kong, the relevant period under subsection (1) shall not commence to run until such time as he returns to Hong Kong and notifies the trustee of his return; (b) after the commencement of his bankruptcy: (i) leaves Hong Kong without notifying the trustee of his itinerary and where he can be contacted; or (ii) fails to return to Hong Kong on a date or within a period specified by the trustee, the relevant period under subsection (1) shall not continue to run during the period he is absent from Hong Kong and until he notifies the trustee of his return.” 19. In Official Receiver & Trustee in Bankruptcy of Chan Wing Hing v Chan Wing Hing & Secretary for Justice (2006) 9 HKCFAR 545 (“Chan Wing Hing”), addressed in greater detail below, the Court was concerned with the constitutionality of section 30A(10)(b)(i) of the Ordinance, which operated to stop the relevant period of bankruptcy running during a period when, after the commencement of the bankruptcy, the bankrupt left Hong Kong without having notified the trustee of his itinerary and where he could be contacted. The Court held, by a majority[18], that this provision was unconstitutional because it did not satisfy the proportionality test. 20. Section 30A(10)(a) operates to prevent the relevant period of bankruptcy from beginning to run at all where the bankrupt has left Hong Kong before the making of the bankruptcy order and provides that it shall not do so until he has returned to Hong Kong and notified the trustee of his return. Thus, section 30A(10)(a) makes the commencement of the running of the automatic period of discharge dependent on: (1) physical return to Hong Kong; and (2) notification of such return to the trustee. 21. As already indicated, the issue in the present appeal is whether section 30A(10)(a) is constitutional. In Chan Wing Hing, the Court expressly declined to express any views on the constitutionality of either section 30A(10)(a) or (b)(ii).[19] The Court’s approach to an issue of constitutionality 22. There is a well-established sequence of questions that must be addressed when an issue of constitutionality is raised before a court.[20] The first question is concerned with the identification of a constitutional right and asks whether such a right is engaged. If not, the constitutional challenge fails in limine. The next question is whether the legislative provision or conduct complained of amounts to an interference with, or restriction of, that right. Again, if the answer is no, the challenge fails without further inquiry. If, on the other hand, the answer to that question is yes, then it is necessary to consider whether those rights are absolute, in which case no infringement or restriction is permitted and no question of proportionality arises, or, if not absolute, whether the relevant infringement or restriction can be justified on the proportionality analysis. 23. The proportionality analysis in a case like the present involves asking, first, whether the infringement or restriction pursues a legitimate societal aim; secondly, whether the infringement or restriction is rationally connected with that legitimate aim; and thirdly, whether the infringement or restriction is no more than is necessary to accomplish that legitimate aim.[21] The constitutional right engaged 24. In the present appeal, both the Official Receiver and the Bankrupt contend that the relevant constitutional rights engaged are those contained in Article 31 of the Basic Law (“BL31”) and Article 8(2) of the Hong Kong Bill of Rights (“BOR8(2)”). A generous interpretation should, of course, be given to a constitutional right, whilst any restriction on the right should be narrowly construed[22]. 25. BL31 provides as follows: “Hong Kong residents shall have freedom of movement within the Hong Kong Special Administrative Region and freedom of emigration to other countries and regions. They shall have the freedom to travel and to enter and leave the Region. Unless restrained by law, holders of valid travel documents shall be free to leave the Region without special authorization.” 26. Article 8 of the BOR (“BOR8”) incorporates into domestic Hong Kong law the provisions of Article 12 of the International Covenant on Civil and Political Rights (the provisions of which are given constitutional effect by Article 39(1) of the Basic Law) and provides: “8.(1) Everyone lawfully within Hong Kong shall, within Hong Kong, have the right to liberty of movement and freedom to choose his residence. (2) Everyone shall be free to leave Hong Kong. (3) The above-mentioned rights shall not be subject to any restrictions except those which are provided by law, are necessary to protect national security, public order (ordre public), public health or morals or the rights and freedoms of others, and are consistent with the other rights recognized in this Bill of Rights. (4) No one who has the right of abode in Hong Kong shall be arbitrarily deprived of the right to enter Hong Kong.” 27. BOR8 does not expressly refer to a right or freedom to travel but instead BOR8(2) refers to freedom to leave Hong Kong and BOR8(4) refers to a right to enter Hong Kong. As the Court has previously observed[23], the second sentence of BL31 guarantees “the freedom to travel and to enter and leave the Region” and “the freedom of travel” on its own in relation to a jurisdiction involves the freedom to depart from and return to that jurisdiction. In this appeal, the parties have been content to proceed on the basis that there is no material difference between the rights conferred by BL31 and those conferred by BOR8(2) and that it is appropriate to refer to the relevant right engaged in the present case as “the right to travel”. This is consistent with the view expressed in Chan Wing Hing[24]. Is the constitutional right infringed? 28. Whilst there is no doubt that the right to travel, as identified in Chan Wing Hing, is a constitutional right, it remains necessary to identify the precise scope of the right in question in order to determine if the operation of section 30A(10)(a) infringes that right. 29. In Chan Wing Hing, the Court was concerned with the operation of section 30A(10)(b)(i), set out in paragraph 18 above, which had the effect of causing the period of automatic discharge from bankruptcy to cease to run unless the bankrupt notified his trustee in bankruptcy of his itinerary and contact details before leaving Hong Kong. This imposed on the bankrupt a sanction for non-notification which meant that, when he exercised his right to travel and leave Hong Kong without giving the relevant notification, he would suffer the adverse consequence of an extension of his period pending automatic discharge from bankruptcy. As the Court held: “It is the need to notify, taken together with the sanction for failure to notify, which should properly be regarded as constituting the restriction on the right. The exercise of the right to travel triggers the need to notify and the sanction in the event of failure to notify.”[25] (Underlining added) 30. The nexus between the exercise of the relevant right and the restriction imposed is consistent with the Court’s earlier judgment in Gurung Kesh Bahadur v Director of Immigration[26] and is also reflected in Ribeiro PJ’s dissenting judgment in Chan Wing Hing: “Article 31 of the Basic Law guarantees Hong Kong residents ‘freedom to travel and to enter or leave the Region’ and, since s.30A(10)(b)(i) attaches a condition to the exercise of that freedom in the context of the administration of a bankruptcy, it is only valid if it constitutes a legitimate and proportionate limitation on the freedom.” [27] (Underlining added) 31. In the present case, it was common ground between the parties that the “right to travel” contained in BL31 and BOR8(2) includes the freedom to leave Hong Kong and it was also contended by both parties that this must include the freedom to stay away from Hong Kong. 32. On that view of the scope of the right to travel, it was contended, the operation of section 30A(10)(a) does impose a sanction on a person declared bankrupt in his absence from Hong Kong whilst exercising his right to travel by imposing a sanction or adverse consequence on him, namely the non-commencement of the automatic period of discharge from bankruptcy. His right to stay away, it was contended, was infringed because a sanction or adverse consequence was attached to his exercise of that right. 33. In light of the common stance of the parties that section 30A(10)(a) infringes the right to travel, and in the absence therefore of full argument on an adversarial basis on this question, we are prepared to proceed to determine this appeal on the assumption that the scope of the right to travel in BL31 and BOR8(2) includes a right to stay away and that the operation of section 30A(10)(a) amounts to an infringement of that right. However, this assumption may well be debatable. A bankrupt who is absent from Hong Kong at the date when a bankruptcy order is made against him is not exercising a right to leave Hong Kong because he has already departed. There is no restriction imposed on him at the time he exercised that right to leave, since he already did so without any consequence being attached to his departure. Nor is there any restriction on his right to enter. Should he exercise his right to enter Hong Kong and present himself at an immigration control point, he would not be subject to any restriction or adverse consequence upon entry. It is only if one treats the right to travel as encompassing a continuous act of staying away from Hong Kong that there can be a nexus between any adverse consequence attached to being absent from Hong Kong and the exercise of the right. This judgment should not be taken to settle that issue. The proportionality analysis 34. It is not suggested by the parties that the right to travel is an absolute right and this Court has previously accepted that it is a right which may be subject to restrictions. In Bahadur, it was assumed that this was so[28], but the Court held in Chan Wing Hing that the right to travel was one guaranteed by both the Basic Law and the BOR so that the proportionality test should apply to determine the constitutionality of any restriction on the right[29]. 35. The questions to be addressed in applying the proportionality analysis have already been identified in paragraph 23 above. It is common ground between the parties, and consistent with the Court’s decision in Chan Wing Hing[30], that the restriction on the right to travel constituted by section 30A(10)(a) pursues a legitimate aim, namely to keep the bankrupt on the trustee’s radar in order to facilitate the effective administration of his estate, and that the restriction in question is rationally connected primarily to the protection of the rights of creditors and also to the public interest in the proper administration of bankrupts’ estates. The sole question 36. Accordingly, the sole question for determination in the present case is whether section 30A(10)(a) is proportionate as being no more than is necessary to protect primarily the rights of creditors. Similarly, this was the single issue in respect of section 30A(10)(b)(i) in Chan Wing Hing[31]. It will thus be convenient to begin with a summary of the Court’s decision in Chan Wing Hing. Chan Wing Hing 37. As previously noted, in Chan Wing Hing, the Court decided by a majority that section 30A(10)(b)(i) of the Ordinance was unconstitutional as it constituted a disproportionate impairment of the right to travel. The Official Receiver did not invite us to revisit the decision in Chan Wing Hing and it was common ground between the parties that the judgment of the majority in that case is a correct statement of the law in respect of section 30A(10)(b)(i). As will be seen, however, it was the Official Receiver’s contention that there are material differences between section 30A(10)(a) and section 30A(10)(b)(i), such that the conclusion on proportionality in respect of the latter arrived at in Chan Wing Hing should not be reached in the present case in respect of the former. 38. The reasoning of the majority leading to the conclusion that section 30A(10)(b)(i) was not proportionate was, in summary, as follows: (1) In considering whether the restriction was no more than necessary, it was important to bear in mind that, apart from section 30A(10)(b)(i) itself, there were other weapons available to the trustee and creditors when faced with a bankrupt’s failure to co-operate in the context of the scheme regulating discharge. They could object to the discharge of the bankrupt at the expiry of the relevant period on the grounds specified in section 30A(4), including the very fact of the bankrupt leaving Hong Kong without notifying the trustee of his itinerary and where he could be contacted.[32] (2) The sanction under section 30A(10)(b)(i) was a harsh one because once triggered it operated indiscriminately at all times and irrespective of the circumstances.[33] Thus:- (a) The sanction operated irrespective of the reason for the bankrupt’s failure to notify which triggered it, including wholly innocent reasons.[34] (b) The sanction applied indiscriminately to all situations, irrespective of the stage reached in the relevant period and even when nearly at the end of that period, and irrespective of whether it had occasioned any prejudice to the administration of the estate or whether the bankrupt’s co-operation was not required or the administration of the estate was satisfactorily completed.[35] (c) There was no discretion vested in the court to disapply the sanction or to mitigate its consequences, however meritorious or deserving the circumstances.[36] The Court of Appeal’s analysis in the present case 39. As in this Court, the only issue before the Court of Appeal was the proportionality of the restriction in section 30A(10)(a). Cheung JA held[37] that this Court’s reasoning applicable to section 30A(10)(b)(i) set out in paragraph 38(2) above applied equally to section 30A(10)(a). He said[38]: “(1) The sanction operates irrespective of the reason for the bankrupt’s absence from Hong Kong. The two extreme situations of absence for an innocent reason and absence due to wilful default are all treated alike and will attract the sanction. (2) The sanction operates indiscriminately once the bankrupt is absent from Hong Kong irrespective of whether he has communicated with the trustee or had assisted him with information by other means. (3) There is no discretion vested in the Court to disapply the sanction or to mitigate its consequence. Likewise the views of the trustee or creditors who may wish to assist the bankrupt will be irrelevant.” 40. Cheung JA rejected the Official Receiver’s submission that, without section 30A(10)(a), there would be difficulties in administering a bankrupt’s estate. He considered that this argument begged the question of whether the sanction satisfied the proportionality test, i.e. whether the restriction on the right to travel was no more than necessary to protect the interests of creditors.[39] 41. Finally, Cheung JA considered the argument that there was a distinction between section 30A(10)(b)(i) and section 30A(10)(a) but rejected the contention that the provision was less onerous than section 30A(10)(b)(i). To the contrary, he suggested, section 30A(10)(a) was more onerous in that, unlike section 30A(10)(b)(i), its effect could not be avoided by mere notice to the trustee of absence from Hong Kong and location.[40] Accordingly, he concluded that section 30A(10)(a) was also unconstitutional.[41] The Official Receiver’s submissions in support of the appeal 42. Ms Linda Chan SC[42], appearing on behalf of the Official Receiver, submitted that in the context of the Ordinance a significant margin of appreciation should be given to the Legislature and the appropriate test to determine the proportionality of section 30A(10)(a) was to ask whether it was “manifestly without reasonable foundation”[43]. 43. On this basis, Ms Chan submitted that the restriction in section 30A(10)(a) was not manifestly without reasonable foundation since it served to tackle the problem of bankrupts who are absent from Hong Kong when the bankruptcy order is made. Section 30A(10)(a) was necessary, it was submitted, to ensure the bankrupt’s co-operation in the administration of his estate and to address the difficulties faced by trustees dealing with absconding bankrupts. 44. It was further submitted that the reasoning leading to the conclusion that section 30A(10)(b)(i) was not proportionate did not apply in the case of section 30A(10)(a), and that the latter was distinguishable from the former in that: the sanction in section 30A(10)(a) was not indiscriminate (like that in section 30A(10)(b)(i)) but was of limited application since it applied only to a bankrupt who left Hong Kong before the bankruptcy order was made or who, having returned, never got in touch with the trustee; it could only be invoked once and for all whereas the sanction under section 30A(10)(b)(i) was triggered every time the bankrupt leaves Hong Kong. 45. Ms Chan referred to empirical data provided by the Official Receiver to show a large number of absconding bankrupts who left Hong Kong before bankruptcy orders were made against them and who would, if the period of automatic discharge began to run notwithstanding their absence, obtain the benefit of a discharge without having done anything to assist the trustee in the administration of their estates. This demonstrated, it was contended, the necessity for the restriction in section 30A(10)(a). 46. It was also contended that the harshness of the sanction in section 30A(10)(b)(i) which led the majority in Chan Wing Hing to declare that restriction disproportionate did not arise in respect of section 30A(10)(a). On this footing, Ms Chan submitted that the Court of Appeal was wrong in the present case to apply this Court’s analysis in Chan Wing Hing to section 30A(10)(a). 47. Additionally, in her oral submissions, Ms Chan argued that the contention that section 30A(10)(a) was disproportionate because it gave the court no discretion to disapply the sanction or to mitigate its consequences was met by the application of section 30B under which a bankrupt could apply for early discharge. 48. Finally, by reference to the facts of the present case, it was submitted that a significant injustice would result if section 30A(10)(a) were held to be unconstitutional. Discussion (1) The threshold 49. It is necessary first to lay to rest a contention advanced by the Official Receiver that the threshold test in the context of the legislation now under scrutiny is whether the restriction is manifestly without reasonable foundation. 50. The argument is that in the case of legislation concerning socio-economic policies, it not for the courts to interfere with the legislature’s choice of restriction imposed to achieve an objective, unless the restriction in question is “manifestly without reasonable foundation.” The suggestion is that this is such a case. 51. Fok Chun Wah and Kong Yunming, from which the expression “manifestly without reasonable foundation” emerged, each addressed restrictions on the availability of social services and the distribution of public resources. The present case, as with Chan Wing Hing, is not of that category. The test to be applied arises from the fact that the impugned provision impinges upon fundamental rights. Included in the rights protected by BL31 and BOR8(2) are the right freely to move about within Hong Kong, the right to decide where in Hong Kong to live, the right to leave temporarily or permanently and the right of residents to return. These rights are an aspect of the liberty of the individual and it seems to us difficult, and contrary to established principle, validly to contend that restrictions on these rights are permissible unless they are manifestly without foundation. That self-evidently was not the test applied in Chan Wing Hing. 52. The correct approach to the two categories of rights is explained in Kong Yunming as follows: “39. … If [a] rational connection is established [between the impugned restriction and the legitimate societal aim], the next question is whether the means employed are proportionate or whether, on the contrary, they make excessive inroads into the protected right. 40. In some cases involving fundamental rights such as freedom of expression or freedom of peaceful assembly, or rights bearing on criminal liability such as the presumption of innocence, the Court has regarded the restriction as disproportionate unless it goes no further than necessary to achieve the legitimate objective in question. This is sometimes called the ‘minimal impairment’ test. Similarly, in discrimination cases, where the differentiating inroad is based on certain personal characteristics sometimes referred to as ‘inherently suspect grounds’ such as race, colour, sex or sexual orientation, the Court will subject the impugned measure to ‘intense scrutiny’, requiring weighty evidence that it goes no further than necessary to achieve the legitimate objective in question. 41. However, as the Chief Justice noted in Fok Chun Wah v Hospital Authority , ‘… it would not usually be within the province of the courts to adjudicate on the merits or demerits of government socio-economic policies’. Where the disputed measure involves implementation of the Government’s socio-economic policy choices regarding the allocation of limited public funds without impinging upon fundamental rights or involving possible discrimination on inherently suspect grounds, the Court has held that it has a duty to intervene only where the impugned measure is ‘manifestly without reasonable justification’.” 53. This case has proceeded on the footing that section 30A(10)(a) restricts the freedom to travel. Since that is a fundamental right, the restriction can only survive constitutional scrutiny if it meets the minimal impairment test, the burden of showing which is on the party seeking to justify the restriction. That is not to say that the restriction must be the very least intrusive method of securing the objective which might be imagined or devised. What “minimal impairment” means in this context is that: “… the law must be carefully tailored so that rights are impaired no more than necessary. The tailoring process seldom admits of perfection and the courts must accord some leeway to the legislator. If the law falls within a range of reasonable alternatives, the courts will not find it overbroad merely because they can conceive of an alternative which might better tailor objective to infringement … On the other hand, if the government fails to explain why a significantly less intrusive and equally effective measure was not chosen, the law may fail.”[44] (2) Is section 30A(10)(a) no more than necessary? 54. In considering the proportionality of the restriction imposed by section 30A(10)(a), it is important to note the context in which the provision operates, namely as part of a statutory scheme under which a bankrupt is entitled as a matter of right to discharge from bankruptcy after a specified period of time. Section 30A(10) regulates the running of that period of time, with subsection (a) governing the position of absence before the commencement of the bankruptcy and subsection (b) governing absence after its commencement. As such, section 30A(10) is clearly intended to operate as a coherent scheme regarding the running of time for the purposes of the period of automatic discharge from bankruptcy. 55. In the context of this coherent scheme, section 30A(10)(a) operates automatically and without exception in respect of any bankrupt who is already outside Hong Kong on the date when the bankruptcy order is made. Even where the bankrupt is willing to co-operate with the trustee, he may be prevented for reasons wholly outside his control from returning to Hong Kong so that the period of automatic discharge from bankruptcy can begin to run. Examples of such reasons precluding travel back to Hong Kong, which may be characterised as wholly innocent so far as the administration of the bankruptcy is concerned, might include illness, impecuniosity or incarceration. Moreover, the sanction imposed by section 30A(10)(a) applies regardless of whether the bankrupt is ready and willing to afford all co-operation to the trustee in the administration of his estate. Even if he were to communicate and co-operate directly with the trustee, fully and frankly providing all relevant documents and information that the trustee could reasonably require for the benefit of his creditors, the period of automatic discharge would still not run at all and, unless he returned to Hong Kong, he could never obtain a discharge from bankruptcy. Finally, section 30A(10)(a) does not vest in the court any discretion to disapply the sanction that arises by reason of a bankrupt’s absence from Hong Kong. 56. In light of the principle that the burden of justifying the reach of a restriction on a protected right rests upon the party who seeks to support it, the argument of the Official Receiver and the evidence presented in support of it fails to show why a materially less rigid regime would not equally protect the rights of creditors and the public interest in the administration of the estates of bankrupts; why, for example, the same objective would not reasonably be met if there were provision to cater for innocent cases and cases of co-operation notwithstanding the absence from Hong Kong and which afforded the courts a discretion to mitigate the sanction. 57. The reasons set out in paragraph 55 which demonstrate the harshness of the operation of section 30A(10)(a) are, it will be observed, the same in substance as those which apply mutatis mutandis to section 30A(10)(b)(i).[45] However, the position in respect of section 30A(10)(a) is even harsher. In order for the sanction not to apply, the bankrupt must physically return to Hong Kong and notify the trustee of his return. This is plainly a more onerous obligation than the mere notification requirement of section 30A(10)(b)(i), which required a bankrupt to notify the trustee of his itinerary and where he could be contacted before he left Hong Kong or else the period of automatic discharge would be suspended during his absence. 58. Since this Court has concluded, in Chan Wing Hing, that section 30A(10)(b)(i) is not proportionate and therefore unconstitutional, and it is not suggested that we should depart from that decision, it is material to consider whether the reasoning leading to the Court’s conclusion in Chan Wing Hing regarding section 30A(10)(b)(i) applies to section 30A(10)(a) or whether there is any material distinction between the operation of the two subsections so that the reasoning and conclusion in Chan Wing Hing should not apply to section 30A(10)(a). 59. Despite Ms Chan’s able submissions, we are unable to accept her argument that the two subsections are relevantly distinguishable. It is true that section 30A(10)(a) only applies once and for all prior to the commencement of the period of automatic discharge from bankruptcy, whereas section 30A(10)(b)(i) may operate at any time during that period. However, the consequences of the sanction imposed by section 30A(10)(a) are, as already observed, all the harsher since it requires the bankrupt to return to Hong Kong and notify the trustee whereas section 30A(10)(b)(i) is a mere notification requirement. There is simply no difference as regards the potentially indiscriminate operation of the two subsections: section 30A(10)(b)(i) might have applied to a bankrupt who left Hong Kong immediately after the making of the bankruptcy order and who then chose never to have any contact with the trustee, just as section 30A(10)(a) might apply to a bankrupt who chose to stay away to defeat the trustee’s efforts to administer his estate for the benefit of his creditors. 60. Indeed, the consequence of accepting the Official Receiver’s submissions in this appeal would be surprising and anomalous. A bankrupt who waited until a bankruptcy order was made but who then left the next day, without attending upon the trustee to receive the form necessary for the preparation of his statement of affairs[46], would be able to stay away from Hong Kong for a period of eight years and, since section 30A(10)(b)(i) has been declared unconstitutional, take advantage of the automatic discharge from bankruptcy. In contrast, on the footing that section 30A(10)(a) were constitutional, a bankrupt who was outside Hong Kong on the date of the bankruptcy order would not, until his return, be able to take advantage of the scheme of automatic discharge from bankruptcy and, if he did not return, would remain bankrupt indefinitely. Yet, as already noted, he might be unable to return for reasons beyond his control and notwithstanding his readiness and willingness to co-operate fully with the trustee. 61. As to the empirical data relied upon by Ms Chan, this showed that of the undischarged bankrupts who were absent from Hong Kong when the bankruptcy orders against them were made, almost 90% of them had either never returned to Hong Kong at all or returned but never notified the trustee of their return. It is reasonably clear that section 30A(10) was intended to catch absconding bankrupts[47]. But whilst the injustice of absconding bankrupts taking advantage of the period of automatic discharge from bankruptcy might be a reason justifying legislative intervention to prevent abuse, it cannot justify a provision which catches all bankrupts outside Hong Kong regardless of the circumstances that lead to their being absent from Hong Kong and unable to return. 62. We reject Ms Chan’s argument that, by reason of section 30B, it was incorrect for the Court of Appeal to say that there was no discretion on the part of the court to disapply section 30A(10)(a). Section 30B(1) provides: “Notwithstanding that the relevant period under section 30A has not yet expired, a bankrupt who – (a) has not previously been adjudged bankrupt may, at any time; or (b) has been previously adjudged bankrupt may, not less than 3 years after the date of the bankruptcy order, apply to the court for an order discharging him from bankruptcy.” Section 30B(2) then sets out certain grounds under which the court may not make an order under the section. Ms Chan submitted that the grounds in sub-paragraphs (c) to (i) were all instances of a bankrupt failing to co-operate with his trustee and reflected the circumstances under which, pursuant to section 30A(4), the trustee might object to the automatic discharge from bankruptcy. 63. However, section 30A(1) provides that: “Subject to this section, a bankrupt is discharged from bankruptcy by the expiration of the relevant period under this section.” Two points should be noted. First, section 30A(1) is subject to the other provisions in section 30A, including section 30A(10). Secondly, automatic discharge depends on the expiration of a relevant period and therefore a period which must begin to run and come to an end by reason of expiration. Section 30B(1) only applies to “the relevant period under section 30A” and therefore only applies to a relevant period that has commenced to run. 64. Moreover, under section 30B(2) there are circumstances under which the court is obliged not to make an order for the early discharge of a bankrupt. Ms Chan suggested these reflected the grounds of objection in section 30A(4) and therefore involved an element of fault on the part of the bankrupt. Whilst that is correct in respect of sub-paragraphs (c) to (i), it is not the case in respect of (b)[48], so that a bankrupt who was unable to return to Hong Kong for wholly innocent reasons but to whom those circumstances applied would not be able to apply for early discharge. 65. Finally, it may be an inescapable conclusion that, if the Court were to conclude that section 30A(10)(a) is unconstitutional, this would result in an unmeritorious outcome on the facts of the present case. Ms Chan would seem to be correct in saying that the appellant has chosen to stay outside Hong Kong during the entire 4 year period following the making of the bankruptcy order against him and has neither performed any of the obligations imposed on him by the Ordinance nor rendered any assistance or co-operation to the Trustees. This has frustrated the Trustees’ attempts to make progress in the administration of his estate. The previous objection to discharge filed by the Trustees under section 30A(4) is now moot, since more than 8 years has elapsed since the making of the bankruptcy order. In short, the appellant has been able to walk away from his debts of over HK$255 million by the expedience of staying outside Hong Kong for a sufficiently long period of time. However, the constitutionality of section 30A(10)(a) is not to be measured on the basis of a just end justifying disproportionate means. 66. For all these reasons, we would conclude that, in the light of the Court’s earlier decision in Chan Wing Hing in respect of section 30A(10)(b)(i) and the absence of any material distinction in the operation of section 30A(10)(a), section 30A(10)(a) cannot be regarded as no more than necessary to protect the rights of creditors and does not satisfy the proportionality test. Accordingly, it is unconstitutional and a declaration to that effect must follow. Bankruptcy (Amendment) Bill 2015 67. We have quite properly been informed by the appellant that there is presently before the legislature the Bankruptcy (Amendment) Bill 2015. The Bill has passed the Bill’s Committee stage but has not yet been reported to the House Committee. The proposed commencement date is 1 November 2016. 68. The Bill, as currently framed, envisages repeal of section 30A(10) and its replacement by a regime pursuant to which the trustee may apply to the court for a non-commencement order where the bankrupt fails to attend the initial interview or to provide the trustee with information requested. 69. The fact of this development, a consequence no doubt of the decision in Chan Wing Hing, bears no impact upon our reasoning and counsel has not suggested that it should. It can have no effect on any bankruptcy order made before the commencement date. Conclusion 70. For these reasons, we would dismiss this appeal. 71. We would make an order nisi that the appellant pay the respondent’s costs of the appeal, with a certificate for two counsel, and direct that the respondent’s own costs be taxed in accordance with the Legal Aid Regulations. Lord Millett NPJ: 72. I agree with the joint judgment of Mr Justice Fok PJ and Mr Justice Stock NPJ. Mr Justice Ribeiro PJ: 73. The Court unanimously dismisses the appeal and makes the order nisi as to costs set out in paragraph 71 above. Ms Linda Chan SC and Mr Wilson Leung, instructed by the Department of Justice,for 	the Appellant Mr Ronny Tong SC and Ms Margaret Ng, instructed by Zhong Lun Law Firm,assigned 	by the Director of Legal Aid, for the 1st Respondent Attendance of the 2nd Respondent was excused [1] (Cap.6) (“the Ordinance”). [2] The effect of which is set out in paragraph 14 below. [3] Chung J, HCB 5227/2006, unreported. [4] Cheung, Yuen, Barma JJA, CACV 110/2013, 11 December 2014, unreported. [5] The section 29 issue was not pursued on appeal. [6] For a summary of the reasoning of the Court of Appeal, see paragraphs 39 to 41 below. [7] Those amendments introduced certain recommendations made by the Law Reform Commission of Hong Kong in its Report on Bankruptcy published in May 1995 (“Report on Bankruptcy”). [8] Report on Bankruptcy at [17.1]. [9] Section 30A(1) and (2) of the Ordinance. [10] Official Receiver & Trustee in Bankruptcy of Chan Wing Hing v Chan Wing Hing & Secretary for Justice (2006) 9 HKCFAR 545 (“Chan Wing Hing”) at [10]-[12]. [11] Chan Wing Hing at [13], setting out section 30A(4) of the Ordinance. [12] Chan Wing Hing at [71]-[72]. [13] Report on Bankruptcy at [17.24]. [14] Rule 150 of the Bankruptcy Rules (Cap.6A) also imposes relevant duties on the bankrupt in respect of his statement of affairs. It provides: “(1) As soon as a bankruptcy order is made, the trustee shall provide the bankrupt with a form for the preparation of his statement of affairs. (2) The trustee may hold interviews with the bankrupt for the purpose of investigating the bankrupt’s affairs. (3) It shall be the duty of the bankrupt to attend at such times and places as the trustee may appoint.” [15] Chan Wing Hing at [73]-[74]. [16] Section 30A(4), set out in paragraph 15 above. [17] Chan Wing Hing at [75]-[76]. [18] Li CJ, Bokhary PJ, Chan PJ and Sir Anthony Mason NPJ (Ribeiro PJ dissenting). [19] Chan Wing Hing at [16] and [52]. [20] Catholic Diocese of Hong Kong v Secretary for Justice (2011) 14 HKCFAR 754 at [65]; Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950 at [39]. [21] Mok Charles v Tam Wai Ho (2010) 13 HKCFAR 762 at [28]; Kong Yunming v Director of Social Welfare (supra.) at [39]-[40]. [22] Ng Ka Ling & Others v Director of Immigration (1999) 2 HKCFAR 4 at pp.28I-29A; Chan Wing Hing at [36]. [23] In Gurung Kesh Bahadur v Director of Immigration (2002) 5 HKCFAR 480 at [19]. [24] Chan Wing Hing, per the majority, at [33]; and see also per Ribeiro PJ at [80]. [25] Ibid. at [39]. [26] (“Bahadur”) (2002) 5 HKCFAR 480 per Li CJ, with whom the other members of the Court agreed, at [37]. [27] Chan Wing Hing at [80]. [28] Bahadur at [34] and [38]. [29] Chan Wing Hing at [34]-[35], [80]. [30] Ibid. at [42]-[43], [82]. [31] Ibid. at [44], [83]. [32] Ibid. at [45]. [33] Ibid. at [46]. [34] Ibid. at [47]. [35] Ibid. at [48]. [36] Ibid. at [49]. [37] Yuen JA and Barma JA agreeing. [38] CA Judgment at [21.2]. [39] CA Judgment at [22.2]. [40] CA Judgment at [23.2]. [41] CA Judgment at [23.16]. [42] Appearing with Mr Wilson Leung. [43] This phrase being taken from the Court’s judgments in Fok Chun Wa v Hospital Authority (“Fok Chun Wa”) (2012) 15 HKCFAR 409 at [76] and Kong Yunming v Director of Social Welfare (“Kong Yunming”) (2013) 16 HKCFAR 950 at [43]. [44] RJR-Macdonald Inc v Canada [1995] 3 SCR 199 at [160]. [45] See Chan Wing Hing at [47]-[49]. [46] Under Rule 150 of the Bankruptcy Rules (see FN 14 supra). [47] Report on Bankruptcy at [17.49]. [48] Section 30B(2)(b) provides that: “The court shall not make an order under this section if the bankrupt – … (b) has unsecured liabilities that exceed 150% of the income that the trustee determines was derived by the bankrupt during the year immediately before the date of the bankruptcy order”.
Chief Justice Ma: 1. For the reasons contained in the judgment of Mr Justice Fok PJ, I agree that this appeal should be allowed and the appellant’s conviction quashed. I only emphasise one point. The common law offence of outraging public decency, which has a history going back at least 350 years, is not one that comfortably fits into the modern internet age. Criminal liability in the context of the present case is one that should be determined by legislation. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Tang PJ: 3. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: A. Introduction 4. The principal and novel question raised in this appeal is whether the common law offence of outraging public decency can be committed by posting a message on an internet discussion forum. A subsidiary issue is whether a message of the type posted in this case is capable of constituting the offence. The appeal arises from the following facts. B. The facts 5. On 16 June 2010, a reporter from the Oriental Daily newspaper made an inquiry of the police about some allegedly inflammatory messages posted to an internet discussion forum called HKGolden at the URL address http://forum4.hkgolden.com.[1] The messages related to proposals for political reform in Hong Kong, on which the Legislative Council was to vote on 23 June 2010. The police investigated the matter and discovered one such message, posted in Chinese on 11 June 2010 by a person calling himself “Ghost Valley”, which read as follows: “我哋要學猶太人炸咗中聯辦 # fire #”. 6. The English translation of this message is: “We have to learn from the Jewish people and bomb the Liaison Office of the Central People’s Government # fire #”. 7. On 19 June 2010, the appellant was arrested at his home in North Point. Under caution, he admitted that he had participated in the discussion and posted the message in the name of Ghost Valley to the discussion forum and said that he had done it for fun only and had no intention to commit any offence. C. The procedural history 8. The particulars of the offence with which the appellant was charged were as follows: “CHAN Yau Hei, you are charged that on the 11th day of June 2010, at … North Point, Hong Kong, committed an act outraging public decency, by using your home computer to post on a discussion forum of the HKGolden website the following message in Chinese: ‘我哋要學猶太人炸咗中聯辦 # fire #’ (‘We have to learn from the Jewish people and bomb the Liaison Office of the Central People’s Government # fire #’).” 9. The appellant appeared in the Eastern Magistracy on 1 November 2010,[2] represented by counsel acting for him under the Duty Lawyer Scheme. At that hearing, he pleaded guilty to the charge and admitted the facts summarised above. The appellant was thereupon convicted and the matter was adjourned for various reports to be obtained and for sentencing. 10. On 18 November 2010, at the adjourned hearing for sentence, the appellant was represented by different counsel, Mr Wong Hay Yiu, who continues to represent him in this appeal. Mr Wong informed the Magistrate that the appellant wished to apply to change his plea to not guilty on the ground that the facts admitted did not support the charge. It was contended on behalf of the appellant that the posting of the message on the internet discussion forum was not an act done in a place to which the public had access or where what was done was capable of public view and in a way which was capable of being seen by two or more persons who were actually present. It was also argued that the content of the message posted was not of such a character as to outrage public decency. After hearing argument, the Magistrate refused the application, confirmed the conviction and sentenced the appellant to 12 months’ probation. 11. The appellant appealed to the Court of First Instance against the Magistrate’s refusal of the application for a reversal of plea.[3] It was contended that the Magistrate had erred in finding that the discussion forum was a place or premises at or in which, at common law, the offence could be committed. It was also argued that there was no evidential basis to find that the message constituted an act outraging public decency. By his judgment dated 11 November 2011, the Judge dismissed the appeal and confirmed the conviction. 12. The Judge refused the appellant’s application to certify a question for the determination of this Court pursuant to section 32 of the Hong Kong Court of Final Appeal Ordinance (Cap.484)[4] and the appellant renewed that application to the Appeal Committee. D. The certified question and issues arising 13. The Appeal Committee granted leave to appeal on the following question of law of great and general importance, namely: “Whether the posting of such a message on a discussion forum on the internet is capable of amounting to the offence of outraging public decency.” 14. That certified question gives rise to the following issues for determination in this appeal, namely: (1) Whether the posting of the message on the internet discussion forum satisfies the public element of the offence (the public element issue); and (2) Whether the message, by its nature and content, is of a type capable of constituting the offence (the nature of the act issue). 15. To put those issues in context, it is helpful next to address the elements of the offence as established by the authorities. E. The offence of outraging public decency 16. It is an offence at common law to do in public an act of a lewd, obscene or disgusting nature which outrages public decency. See, Knuller (Publishing, Printing and Promotions) Ltd v Director of Public Prosecutions [1973] AC 435 at pp.492C-493H per Lord Simon of Glaisdale; R v Gibson and Sylveire [1990] 2 QB 619 at pp.622G-623C; and R v Hamilton [2008] QB 224 at §§18-25. 17. There are two elements of the offence. The first concerns the nature of the act that has to be proved and the second concerns the public element of the offence. See, R v Hamilton at §21. 18. As to the nature of the act, whilst many of the reported decisions relate to convictions for the offence arising from acts such as exposure of the person[5] or other acts of lewdness involving sexual activity[6], the offence has also been held to be constituted by other, non-sexual, acts such as disinterring a corpse for dissection[7], physically abusing and urinating on a dying woman in the street[8] and urinating on a war memorial while drunk.[9] As Lord Reid stated in Knuller (at p.458): “Indecent exhibitions in public have been widely interpreted. Indecency is not confined to sexual indecency: indeed it is difficult to find any limit short of saying that it includes anything which an ordinary decent man or woman would find to be shocking, disgusting and revolting.” 19. Thus, the offence has also been held to have been constituted by other activity, for example, by the exhibiting of deformed children[10] or of a sculpture consisting of a human head to each earlobe of which was hung an earring made from a freeze-dried human foetus of three to four months’ gestation.[11] 20. In addition, of particular relevance to the present appeal, the utterance of obscene language has been held to be an indictable offence[12] and the offence has been held to be capable of being committed by the printing of advertisements.[13] It is not suggested in this case that the offence cannot be constituted by the publication of written words and it is clear that it can. As Lord Reid stated in Shaw v Director of Public Prosecutions [1962] AC 220 (at p.281):[14] “I think that [the authorities] establish that it is an indictable offence to say or do or exhibit anything in public which outrages public decency, whether or not it also tends to corrupt and deprave those who see or hear it.” [Emphasis added] 21. It must also be proved that the act or exhibition or publication is of such a lewd, obscene or disgusting character that it outrages public decency. An obscene act is one which offends against recognised standards of propriety and is at a higher level of impropriety than indecency. A disgusting act is one which fills the onlooker with loathing or extreme distaste or causes the onlooker extreme annoyance. Further, it is not enough that the act might shock people; it must be of such a character that it outrages minimum standards of public decency as judged by the jury in contemporary society. See, R v Hamilton at §30. 22. As to the public element of the offence – the second element – the offence must be committed in public in the sense of being done in a place to which the public has access or in a place where what is done is capable of public view: see R v Hamilton at §31. This does not, however, mean that the relevant act must be done on public property. It is sufficient if members of the public can see the object or act in question whether by going there or by looking in.[15] Thus, there are cases in which it was decided that the offence could be committed in a private home, if others could see through the window,[16] or on a roof of a private house where the act could only be seen from the back windows of other private houses,[17] or while trespassing in fields that were private property but where other trespassers would sometimes come.[18] 23. In addition, the public nature of the offence can only be satisfied if the act is capable of being seen by two or more persons who are actually present, even if they do not actually see it: see R v Hamilton at §31. This is known as the “two person” rule.[19] However, the rule does not require anyone actually to witness the defendant’s act, so long as at least two people are present and capable of seeing the act should they happen to look. Since the purpose of the requirement that the act be of such a kind that it outrages public decency goes to setting a standard which the jury must judge by reference to contemporary standards, it does not require someone in fact to have seen the act and to have been outraged: see R v Hamilton at §39. 24. The mental element of the offence is satisfied if the defendant intentionally does an act which outrages public decency. In many cases, the act will have been done in a clandestine manner deliberately so that it cannot be seen by others. But it is not necessary for the prosecution to prove that the defendant intended to outrage public decency, or even that he was reckless in the sense that he appreciated there was a risk of outrage but determined nevertheless to run it. See, R v Gibson and Sylveire at pp.627E & 629D-F. In the present case, no issue as to mens rea is raised and the appellant’s admission that he participated in the discussion forum and posted the message shows clearly that the posting was an intentional and deliberate act. 25. With the elements of the offence in mind, I now turn to address the specific issues arising in this appeal. F. The public element issue 26. As noted above, the public element of the offence has two parts. First, it requires that the act be done in a place to which the public has access or in a place where what is done is capable of public view. Secondly, the element is not satisfied unless the act is capable of being seen by two or more persons who are actually present, even if they do not actually see it (the two person rule). 27. It was the second part of the public element of the offence, namely the two person rule, with which R v Hamilton was concerned. In that case, the defendant had used a hidden video camera to film up the inside of women’s skirts (a practice known as “up-skirting” which, unfortunately, is also encountered in Hong Kong) in a supermarket. There was no evidence that anyone had actually seen the defendant filming up the women’s skirts in the supermarket, but there was evidence that others were present when he was filming. The Court of Appeal held that the two person rule went solely to the necessity that there be a public element in the sense of more than one person being present and capable of being affected by the act and did not require actual sight or sound of the nature of it. It was therefore held that the question of whether the way the defendant filmed was capable of being seen by those in the supermarket was properly left to the jury to decide. 28. The issue in the present appeal is primarily concerned with the first part of the public element that requires the act to be done in a place to which the public has access or in a place where what is done is capable of public view. The question for the Court is whether, as contended by the appellant, this part of the public element of the offence requires that the act must be done in an actual or physical, tangible place. Otherwise, the appellant contends, there would be no need for the requirement of the two person rule, namely that two or more persons must be present there. It is accepted by the respondent that the internet is not a physical, tangible place and is instead a “virtual” place but contended that it is sufficient to satisfy the public element of the offence. F.1 Novel issue not precluded if principled development of offence 29. The appellant’s written case refers to the English Law Commission’s Report on Conspiracy and Criminal Law Reform in March 1976 which highlighted the fact that the House of Lords emphasised in Knuller that the courts had no residual power to widen existing offences to make punishable conduct of a type hitherto not subject to punishment.[20] There is also reference to the Hong Kong Law Reform Commission’s Report on Codification: The Preliminary Offences of Incitement, Conspiracy and Attempt in March 1994 which recommended the abolition of the offence of outraging public decency, due to its “imprecise nature”.[21] 30. Putting to one side the decision in HKSAR v Chan Johnny Sek Ming [2006] 4 HKC 264, to which it will be necessary to return in a moment, there is no previous decision holding that the internet is a public place for the purposes of the offence of outraging public decency. This is therefore a novel issue and, if it is decided that the public element of the offence is satisfied by way of a posting to an internet discussion forum, it will amount to the recognition of a new category of situation giving rise to the potential for prosecution. 31. The critical question is whether the inclusion of this new factual situation within the offence is simply an example of the operation of the common law and its flexibility in being able to adapt to changing circumstances. 32. As Lord Simon observed in Knuller (at p.492E-H): “… thecommon law proceeds generally by distilling from a particular case the legal principle on which it is decided, and that legal principle is then generally applied to the circumstances of other cases to which the principle is relevant as they arise before the courts. As Parke B. said, giving the advice of the judges to your Lordships’ House on Mirehouse v. Rennell (1833) 1 Cl. & F. 527, 546 (cited with approval in Shaw v. Director of Public Prosecutions [1962] A.C. 220 by Lord Tucker (p. 289), Viscount Simonds (p. 261) and Lord Morris of Borth-y-Gest (p. 291) concurring, and by Lord Hodson (pp. 292-293)): ‘Our common law system consists in the applying to new combinations of circumstances those rules of law which we derive from legal principles and judicial precedents; and for the sake of attaining uniformity, consistency and certainty, we must apply those rules, where they are not plainly unreasonable or inconvenient, to all cases which arise; and we are not at liberty to reject them, and to abandon all analogy to them, in those to which they have not yet been judicially applied, because we think that the rules are not as convenient and reasonableas we ourselves could have devised.’” 33. And, at p.494B-C, Lord Simon added: “The passage I have cited from Mirehouse v. Rennell, 1 Cl. & F. 527, 546 indicates that the fact that the authorities show no example of the application of the rule of law in circumstances such as the instant does not mean that it is not applicable, provided that there are circumstances, however novel, which fall fairly within the rule.” 34. Further, it is well-established that, in a common law system, the development of the laws by the courts over time, by clarification and modification to meet new circumstances and conditions, is not constitutionally objectionable provided that it does not result in judicially extending the boundaries of criminal liability: see Winnie Lo v HKSAR (2012) 15 HKCFAR 16 per Ribeiro PJ at §77 citing Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381 per Sir Anthony Mason NPJ at §98. F.2 Does the public element of the offence require the act to be committed in a physical, tangible place? 35. Whilst not going so far as to contend that the offence was unconstitutional for lack of legal certainty, Mr Wong submitted that, given the imprecise nature of the offence, it was appropriate for the offence to be confined to cases involving acts of a lewd, obscene and disgusting character that are done in a place (meaning a physical, tangible place) to which the public has access or in such a place where what is done is capable of public view. It was wrong, Mr Wong submitted, to conflate a virtual public forum on the internet with a public place. Further, he submitted that the two person rule could not be satisfied in such a virtual public forum. 36. For his part, Mr Martin Hui, Senior Assistant Director of Public Prosecutions, for the respondent, contended that the common law offence should, as a matter of logical development, be held to cover the message posted on the internet discussion forum in question. He submitted that the public element of the offence is not confined to a public place in its restrictive sense of being a physical place, but rather connotes a broader concept of a location to which the public has access or where what is being done is capable of public view. 37. For the following reasons, I have come to the conclusion that Mr Wong is correct in his submission that the public element of the offence requires the act to be committed in a physical, tangible place. 38. A first and important consideration is that, with the exception of HKSAR v Chan Johnny Sek Ming, all previous cases involving convictions for the offence of outraging public decency involve things said, done or exhibited in a physical, tangible place. The place has not always been public property or a place of public resort but it has nevertheless been an actual or physical place. Thus, for example, in Knuller the offence was charged as having been committed in the various newsagents where magazines containing the offending advertisements were sold, not in the magazines themselves, and in R v Hamilton the offence was committed in the supermarket where the up-skirting videos were filmed, not in the video recordings themselves. 39. The relevance of the place in which the offence of outraging public decency is committed was explained by Lord Simon in Knuller where he contrasted the offence of conspiracy to corrupt public morals. At pp.494F-495A, he held: “It was argued for the Crown that it was immaterial whether or not the alleged outrage todecency took place in public, provided that the sense of decency of the public or a substantial section of the public was outraged. But this seems to me to be contrary to many of the authorities which the Crown itself relied on to establish the generic offence. The authorities establish that the word ‘public’ has a different connotation in the respective offences of conspiracy to corrupt public morals and conduct calculated to, or conspiracy to, outrage public decency. In the first it refers to certain fundamental rules regarded as essential social control which yet lack the force of law: when applicable to individuals, in other words, ‘public’ refers to persons in society. In the latter offences, however, ‘public’ refers to the place in which the offence is committed. This is borne out by the way the rule was framed by my noble and learned friend, Lord Reid, in Shaw v. Director of Public Prosecutions [1962] A.C. 220 in the passage which I have just cited. It is also borne out by what is presumably the purpose of the legal rule – namely, that reasonable people may venture out in public without the risk of outrage to certain minimum accepted standards of decency.” [Emphasis added] 40. It is important to note the context in which Lord Simon made those remarks, namely the submission by the prosecution that “it was immaterial whether or not the alleged outrage to decency took place in public, provided that the sense of decency of the public or a substantial section of the public was outraged.” Lord Simon clearly rejected such a broad formulation of the public element of the offence. That formulation is, in substance, the same as the respondent’s submission summarised above. 41. The significance of the first part of the public element of the offence was also emphasised in R v Walker (Steven) [1996] 1 Cr. App. R. 111. There, the defendant had exposed himself and committed obscene acts in the living room of his house in the presence of two young girls. His conviction was quashed on the basis that the private premises where the acts were committed were not a place where there existed a real possibility that members of the general public might witness what happened. Laws J (as he then was), giving the judgment for the Court of Appeal, said (at p.114C-E): “In our judgment Mayling establishes, for present purposes, no more than this: that it is a necessary condition for guilt of the offence that at least two people must have been able to witness what happened. It does not establish that that is a sufficient condition. In our judgment there is a further requirement. It is dictated by the very purpose for which the offence exists, namely, as Lord Simon said, that reasonable people might venture out in public without the risk of outrage to certain minimum standards of decency. The requirement is that the offence be committed in a place where there exists a real possibility that members of the general public might witness what happens. It does not mean that the very spot where the act is done must itself be a place of public resort, though that, no doubt, is the paradigm case. But it must be a place where the public are able to see what takes place there.” 42. As noted in Rook & Ward on Sexual Offences Law and Practice (4th Ed., 2010) at §14.49, in R v Walker (Steven) the requirement of publicity (i.e. the first part of the public element of the offence) is given a content of its own quite distinct from the two person rule. 43. There is nothing in R v Hamilton which suggests that R v Walker (Steven) did not have this effect although, as I have said, that case did not concern the first part of the public element of the offence since the place where the offence was committed, a supermarket, was plainly a place to which the public had access and a place where what was done was capable of being seen. But if the first part of the public element is given a content of its own distinct from the two person rule, it must require more than that the sense of decency of at least two persons is capable of being outraged. The additional requirement relates to the public nature of the place where the offence is committed. 44. It would appear that the law in New South Wales and in South Africa may have developed in a different direction to that in R v Walker (Steven)[22] in that the offence may be committed in those jurisdictions by acts in private premises seen by others in those same private premises[23] or from other private premises.[24] This divergence of view as to whether the place where the offence is committed must be public or private does not, however, strictly arise in the present appeal where the question is whether the internet is a place at all. 45. It is a fiction to describe the internet as a place in any physical or actual sense. The fiction arises because material uploaded to the internet, which might include a message posted to an internet discussion forum, is simply computer code and not humanly intelligible until accessed or downloaded in comprehensible form to a computer or mobile platform connected to the internet. For this reason, material placed on the internet is commonly described as being in “cyberspace” or in a “virtual” place or forum. As Ribeiro PJ explained in Oriental Press Group Limited and Ors v Fevaworks Solutions Limited & Anor, unrep., FACV 15/2012 (4 July 2013) at §68: “… A person wishing to view on his computer the webpage containing the relevant material, sends a request to the URL address of the website on which that material is stored and, in response, the webpage is transmitted to the requesting computer. When it is received and accessed or downloaded in a form comprehensible to the person making the request, the material is ‘published’ for the purposes of libel law.” 46. In the same way, for the purposes of this offence, a message posted to an internet discussion forum can only be seen by other people when accessed or downloaded in a comprehensible form and it is only then that their sense of decency may be outraged. The readers of that message may be in various different places when they access or download the relevant webpage and, because they may be using mobile internet devices, those places may be private or public. But it is in those actual places that their sense of decency may be outraged, not in some virtual place. In short, for the purposes of the offence, the internet is properly to be regarded as a medium and not a place. 47. The fiction of regarding the internet as a place may be illustrated by assuming different facts in R v Walker (Steven), so that the defendant had, in his living room, posted an obscene or disgusting message on an internet discussion forum which the two girls had then seen in that room by accessing the relevant website and downloading the offending content on their mobile phones. It would be highly artificial, and in my view a materially different basis of criminal liability, if, absent evidence that anyone else could have seen the relevant message on the internet, it were to be suggested that his conviction should instead have been upheld because the internet is a public place. The persons outraged by his behaviour would still have been the two young girls and the place where their sense of decency was outraged would have remained the living room of the defendant’s house, not some virtual place. 48. It is similarly a fiction to regard persons who access an internet discussion forum as being in the same position as reasonable people who venture out physically in public and who are entitled to protection against having their sense of decency outraged. Notwithstanding that they may be physically outdoors at the time, those who surf the internet are not in fact venturing out anywhere and are instead only virtually visiting a place when accessing a particular website or discussion forum. 49. Finally, as Mr Wong rightly pointed out, the offence is in effect one of strict liability, and this is a further reason to reject the respondent’s invitation to develop the common law by holding that the offence can be committed in a virtual place. 50. Therefore, in my opinion, the first part of the public element of the offence does require that the actus reus (whether it be something said, done or exhibited) be committed in a physical, tangible place and not virtually in cyberspace by way of the internet. To hold that the internet is a public place for the purposes of the offence would involve either dispensing with the first part of the public element of the offence or substantially extending its meaning and would therefore amount, impermissibly, to judicially extending the boundaries of criminal liability. 51. I turn to address the arguments advanced by the respondent and to the only other case concerning this particular issue. 52. In the respondent’s written case, Webster v Dominick [2005] JC 65 is relied on to support the submission by analogy that the offence of outraging public decency could be committed by acts done on the internet. 53. Webster v Dominick is a Scottish case concerning a charge of the offence of shameless indecency. The High Court of Justiciary held that shameless indecency was not a relevant charge in the law of Scotland and that indecent conduct could be criminal where, as against an individual victim, it constituted “lewd, indecent and libidinous practices” and where, as a crime against public morals, it “causes … public offence” (§48). In respect of the former, the Lord Justice-Clerk observed that it might be committed “by means of a lewd conversation with the victim, whether face to face or by a telephone call or through an internet chat-room” (§49, emphasis added). 54. I do not think this case supports the respondent’s submission. It is significant that the first form of indecent conduct is criminal “whether committed in public or in private” and there is no place element in the offence. The reference to the possibility of the offence being committed “by means of a lewd conversation … through an internet chat-room” is not therefore to be seen as indicating any location of the conversation but is merely a reference to the chat-room being a medium through which the offence is committed. 55. There is also reliance, in the respondent’s written case, on a passage in Rook & Ward at §14.45, commenting on Rose v Director of Public Prosecutions [2006] 1 WLR 2626. In that case, a conviction for outraging public decency was quashed where the act (being sexual activity carried out in the foyer of a bank in the early hours of the morning) was only proved to have been seen by one other person other than the participants, namely a bank employee who later observed the act on a CCTV recording. Stanley Burnton J (as he then was) applied the proposition that, if in fact only one person saw the act or could have seen the act complained of there was no offence (§25), and held that there was not a sufficient public element for the offence to be established (§28). That was sufficient to dispose of the appeal. Although therefore not having to decide the issue, Stanley Burnton J considered there was “considerable force in [counsel’s] submission that the viewing privately of a private recording of an act which had not previously been seen by any person is insufficient to constitute the offence” (§29). 56. Rook & Ward suggest the court in Rose was right to doubt that the offence could be committed by the replaying of a CCTV recording. However, they go on to state that “viewing of the product of a camera ought to be sufficient where the viewing takes place in real-time, e.g. where the product is broadcast over the internet or on live-feed CCTV.” 57. I do not regard that reference to the viewing of product broadcast over the internet as supporting the proposition that the internet is a place for the purposes of the offence. Instead, I understand the statement in Rook & Ward to be describing different means by which an outrageous act may be perceived by members of the public. 58. To support his conclusion that the internet was a public place, the Judge below gave an example of a person projecting an image of his doing a disgusting act in private onto a television set placed on his balcony.[25] I do not think this example supports the conclusion in question. Projecting a live image of an outrageous act onto a screen visible to the public is the means or medium by which a person may outrage public decency in the place where the image is seen. It does not turn the medium itself into a place. 59. There is only one previous decision in this jurisdiction addressing this issue and none in any other jurisdiction was identified by the parties.[26] The previous decision is that of HH Judge Lok in HKSAR v Chan Johnny Sek Ming [2006] 4 HKC 264. That case involved two messages posted by the defendant on a message board called “Gossip” on the website www.she.com. 60. Having cited (at §25(ii)) R v Walker (Steven) [1996] 1 Cr App R 111 for the proposition that it must be proved that the act complained of was committed in public, which means that it must be committed in a place, public or private, where there exists a real possibility that members of the general public might witness it, Lok DJ held: “26. Although the defendant posted the Messages in his private home using his computer, other members of the public could view their contents through the internet. Hence, according to the proposition established in R v Walker (S), ibid (see para 25(ii) above), the defendant’s act of posting the Messages should be regarded as an act committed in public. Further, the defendant had the intention to publish the Messages, and so there is no dispute that the defendant had the necessary mens rea for the offence. The remaining main issue is, therefore, whether the defendant’s act was of such a lewd, obscene or disgusting character as constitutes an outrage on public decency.” 61. It does not appear that the specific argument that the internet was not a public place for the purposes of the offence was raised and there is no detailed analysis or reasoning in support of the conclusion that it was. I do not therefore regard the decision as providing any support for the respondent’s case on this issue. F.3 Public decency may nevertheless be outraged via the internet 62. This judgment should not be understood as deciding that the offence of outraging public decency can never be constituted by a message posted on an internet discussion board. 63. If, as I think it should, the internet is properly to be regarded as a medium and not a place for the purposes of the offence, it remains a possibility that a message posted to an internet discussion forum will be seen in a physical place to which the public has access or where what is done is capable of public view. To take an example, a computer hacker might interfere with a large public computer display (for example, the flight information display at the airport) in order to project an outrageous message, image or video in that public place. Equally, it might be possible by the means of a mobile internet device such as a tablet computer or smart phone to access outrageous material in a physical place (such as a public park, MTR carriage or bus) to which the public has access or where what is done is capable of public view. 64. It is neither necessary nor appropriate in the context of this appeal to express a concluded view as to whether the offence may be committed when outrageous material is posted to the internet and then accessed from the internet at a place where the public has access or where what is done is capable of public view. For the reasons given in the next section of this judgment, there is simply no sufficient evidence to support the conclusion that this occurred in the present case. By the same token, however, the effect of holding that the internet is not a place for the purposes of the offence does not mean that the offence can never be committed by a message posted to an internet discussion forum. F.4 Absence of sufficient evidence in the present case 65. In the present case, the Magistrate refused to permit the appellant to change his plea to not guilty. In doing so, she applied HKSAR v Wong Chi Yuk [2000] 3 HKLRD 125 which listed, at p.135E-I, the circumstances in which an unequivocal guilty plea can be rendered a nullity. The first type of case listed, namely that the facts admitted by the defendant do not amount to the offence with which he is charged, is relevant here. Applying the conclusion reached in Section F.2 above, the Magistrate should have permitted the change of plea. Absent further evidence from the prosecution, she should then have held that the appellant had no case to answer on the charge of outraging public decency. 66. Had there been a change of plea, the trial might have proceeded with further evidence being adduced by the prosecution. However, because the appellant pleaded guilty and admitted the particular facts put to him for admission, there is simply no evidence of where and by whom the message posted by the appellant was read. 67. The charge is framed on the basis that the appellant committed the offence by posting the message at his home. That place was not, of course, the place where the message was published. The admitted facts do not, however, disclose where and by whom the message was seen. It is reasonable to infer that it was read by a reporter from the Oriental Daily but no inferences can be drawn as to where the reporter might have done this. It is also reasonable to infer that the police investigating the complaint read the message but, again, no inferences can be drawn as to where that was done. That being the case, one cannot reach any conclusions as to whether the places where the reporter and the police accessed the message were places to which the public had access or where what was done was capable of public view. The inside of a newsroom or police station would not naturally be considered to be such places. Nor can one conclude that the two person rule would be satisfied in respect of the place or places where the offending message was accessed. 68. It is, of course, entirely possible that there might have been evidence to show that the reporter or police accessed the message in a place satisfying the first part of the public element of the offence. There might have been evidence that it was accessed on a computer which was in plain sight of many members of the public had they chosen to look. But, in the absence of direct evidence, this would be a matter of pure speculation. 69. The conclusion in Section F.2 above means that Lok DJ was wrong to have regarded the posting of the offending messages in HKSAR v Chan Johnny Sek Ming as an act committed in public sufficient to satisfy the public element of the offence. However, unlike the present case where the facts are limited to the charge and the admitted facts, there was considerably more evidence in that case as regards the discussion thread and the reactions provoked by the offending messages: see §§8 to 11, 15 and 34. 70. It is neither necessary nor appropriate to decide whether the conviction in HKSAR v Chan Johnny Sek Ming was wrongly entered or might nevertheless have been supported by the evidence adduced. However, that case usefully illustrates the fact that there might have been considerably more evidence in the present case as regards where and by whom the offending message was accessed. G. The nature of the act issue G.1 Is the message, by its nature and content, of a type capable of constituting the offence? 71. The offence can be constituted by the publication of written words and so the nature of the publication is clearly one capable of constituting the offence. 72. The content of the message is not sexual and it is therefore not a lewd publication. The issue in the present case is therefore whether a message of the type posted by the appellant is capable of being judged to be obscene or disgusting. 73. As noted above, an obscene act is one which offends against recognised standards of propriety and is at a higher level of impropriety than indecency. A disgusting act is one which fills the onlooker with loathing or extreme distaste or which causes the onlooker extreme annoyance. Further, it must outrage minimum standards of public decency as judged by the jury in contemporary society. The test is an objective one and eminently suitable for a jury, or magistrate or judge as the tribunal of fact, representing the current standards of ordinary, right-thinking people. 74. The argument for the appellant on this issue is that, to constitute the offence, the act complained of must be of a lewd, obscene and disgusting nature and that, as Lord Simon put it in Knuller at p.495C-D: “It should be emphasised that ‘outrage,’ like ‘corrupt,’ is a very strong word. ‘Outraging public decency’ goes considerably beyond offending the susceptibilities of, or even shocking, reasonable people. Moreover the offence is, in my view, concerned with recognised minimum standards of decency, which are likely to vary from time to time. Finally, notwithstanding that ‘public’ in the offence is used in a locative sense, public decency must be viewed as a whole; and I think the jury should be invited, where appropriate, to remember that they live in a plural society, with a tradition of tolerance towards minorities, and that this atmosphere of toleration is itself part of public decency.” [Emphasis added] 75. Mr Wong’s short submission is that the message itself is not of the kind of “lewd, obscene and disgusting nature” covered by the offence. 76. I do not accept that submission. 77. The Magistrate cited the passage from Knuller relied on by the appellant and correctly reminded herself that the test was an objective one.[27] The standard she applied to the meaning of “obscene” and “disgusting” was consistent with the authorities[28] and her conclusion was reached by reference to the reaction of an ordinary and right thinking member of the public in modern society.[29] 78. For his part, the Judge rejected the appellant’s argument that the message required to be seen in context in order to determine if it was capable of constituting an act outraging public decency.[30] He was satisfied that the message constituted a departure from the norms acceptable to the public but also something very disgusting which went beyond normal repulsiveness.[31] He agreed with the analysis of the Magistrate in §22 of her Statement of Findings.[32] 79. It cannot, in my judgment, be said that it was not open to the Magistrate to find that the message was obscene and disgusting or such that it would outrage public decency. Accordingly, there is no basis for interfering with the conclusions reached by the Magistrate and Judge below as regards the content of the message. 80. I would, in any event, have reached the same conclusion. 81. As to context, some written messages will require to be placed in their proper context in order to determine their proper meaning and whether that meaning is of a lewd, obscene or disgusting character such as to constitute the offence. 82. The content of the message in this case is clear and requires no context to inform the natural and ordinary meaning of the words used. It is a straightforward and unambiguous incitement to carry out an act of terrorism, namely to bomb the Liaison Office of the Central People’s Government. An incitement to bomb any premises would be potentially obscene and disgusting because of the brazen disregard for the potential loss of life, personal injuries and damage to property as well as the public trauma caused by an act of terrorism. 83. That the incitement is to bomb an office of the State is, in my view, an aggravating feature. This is not because the intended target is a State institution and deserving of any greater protection than any other person or institution in Hong Kong but because, in the context of a debate on political reform, an attack on an office of the State or Hong Kong Government as opposed to a commercial office or some other premises could have a potentially greater impact on the maintenance of law and order in, and the governance of, Hong Kong. All this would be likely to contribute to the impact and reception of the message by an ordinary, right-thinking member of the public. 84. In addition, there is another highly troubling aspect of the message potentially capable of causing or exacerbating a sense of outrage, namely the juxtaposition of an extremely offensive racist slur, suggesting that all Jews are terrorists and in the habit of perpetrating acts of terrorism in order to promote political objectives. The further suggestion in the message, on the misguided assumption that racist slur is correct, that Hong Kong people have something to learn from such behaviour is another feature that would add to the sense of loathing, extreme distaste or extreme annoyance caused by the message. G.2 Consistency with freedom of expression 85. Finally, although it is not suggested in the present case that the offence is inconsistent with the constitutional right to freedom of expression, this question may, in other cases, be raised.[33] There is a balance to be struck between the protection of the public and its sense of decency from being outraged by things said, done or exhibited on the one hand and the right to freedom of expression on the other. In this regard, the discussion in Section N (§§104-112) of Ribeiro PJ’s judgment in Oriental Press Group Limited and Ors v Fevaworks Solutions Limited & Anor, unrep., FACV 15/2012 (4 July 2013) is relevant with the difference that, here, instead of damage to reputation by the publication of defamatory material being at stake, the competing interest is the protection of the rights of others whose sense of decency may be outraged by the offending words or images or, possibly, the protection of public morals. 86. The message in the present case was posted as part of a discussion forum concerning proposals for political reform in Hong Kong to be debated by the Legislative Council. That is a subject on which there will obviously be a plurality of views. Those views are likely to be felt and expressed strongly. The offence of outraging public decency is clearly not intended to be used to prosecute those who simply express trenchant views in strong terms. As Lord Judge CJ observed in Chambers v Director of Public Prosecutions [2013] 1 Cr. App. R. 1 at §28, by reference to the effect of the Communications Act 2003 (but in terms which apply equally to the common law offence): “Satirical, or iconoclastic, or rude comment, the expression of unpopular or unfashionable opinion about serious or trivial matters, banter or humour, even if distasteful to some or painful to those subjected to it should and no doubt will continue at their customary level, quite undiminished by this legislation.” 87. The threshold of outraging public decency is a high one. Not every rude, abusive or low grade statement in the course of spirited debate on a topical matter of public interest will cross that threshold. The message posted by the appellant in the present case, however, does. H. A matter for statutory criminalisation? 88. For a number of reasons, there would seem to be a strong case for introducing statutory provisions to criminalise the posting on the internet of certain material like that in the present case. 89. An important feature of the internet is its effectiveness in providing a platform for both one-to-many communications (akin to traditional forms of publications such as newspapers, radio and television) and also, more significantly, “widespread, democratized, access to media” [34] characterised by open, interactive, “many-to-many” communications (for example, by way of online social networking and microblogging sites or online photo and video messaging applications). These online platforms or conduits allow individuals the ability to communicate messages and other content, which may be of great social utility, to a vast audience.[35] Correspondingly, an individual’s power to defame others or outrage public decency is potentially increased exponentially by the power of the internet. 90. The consequence of this judgment is that a message posted to the internet might constitute the means by which public decency is outraged but that the posting of a message to an internet discussion forum in itself does not satisfy the public element of the offence. Whilst the offence may be committed where the internet content is accessed if that place satisfies the public element of the offence, it is unsatisfactory that there is room for arbitrariness between some internet content that will be open to prosecution for the offence and other content that will not simply because of where it is seen. 91. Although there are statutory offences under Hong Kong law which address the sending and exhibition of, amongst other things, lewd, obscene and disgusting material, those offences do not apply to material posted on the internet and the statutory provisions have not been updated or extended to reflect the fact that the mischief addressed by those offences can arise by means of activity conducted via the internet. By way of example, the following two offences may be considered: (1) Section 12A of the Summary Offences Ordinance (Cap.228) makes it an offence to take part in, provide or manage any public live performance of an indecent, obscene, revolting or offensive nature, but, by virtue of the definition of “public live performance” (see section 12A(9)), a video of such a performance exhibited via the internet would not constitute the offence. (2) Section 20 of the Summary Offences Ordinance makes it an offence to send any message “by telegraph, telephone, wireless telegraphy or wireless telephony which is grossly offensive or of an indecent, obscene or menacing character”, but the medium of the internet is not addressed by that provision.[36] 92. Addressing the mischief of lewd, obscene and disgusting material posted on or communicated via the internet by way of statute would also have the benefit of enabling the Legislature to consider the appropriate mental element to be attached to any relevant criminal offence[37] and the different types of criminal conduct that may be involved in the posting or sending of offending material.[38] In addition, additional clarity could be achieved by the issuance by the Director of Public Prosecutions of guidelines regarding the circumstances in which cases involving communications sent via the internet would be prosecuted.[39] I. Conclusion 93. For the above reasons, although the message posted by the appellant is deserving of condemnation, the public element of the offence is not satisfied. I would therefore allow the appeal and quash the appellant’s conviction. I would also direct that any submissions as to costs be lodged with the Registrar in writing within 14 days from the date of this judgment. Lord Walker of Gestingthorpe NPJ: 94. I agree with the judgment of Mr Justice Fok PJ. Chief Justice Ma: 95. For the reasons contained in the judgment of Mr Justice Fok PJ, this appeal is unanimously allowed and the appellant’s conviction is quashed. Costs should be dealt with as stated in para. 93 above. MrMartin Hui SADPP, of the Department of Justice, for the Respondent Mr Wong Hay Yiu, instructed by Tang & Lee, assigned by the Director of Legal Aid, for the Appellant [1] This is the same forum as that with which Oriental Press Group Limited and Ors v Fevaworks Solutions Limited & Anor, unrep., FACV 15/2012 (4 July 2013), was concerned: see §§12-15. [2] In ESCC 3628/2010, before Mrs Adriana Tse [3] In HCMA 42/2011, before Tong J [4] HCMA 42/2011, Reasons for Judgment, 8 December 2011 [5] e.g. Sedley’s Case (1663) 1 Sid 168; R v Crunden (1809) 2 Camp 89 [6] e.g. R v Bunyan (1844) 1 Cox CC 74; R v Mayling [1963] 2 QB 717 [7] R v Lynn (1788) 2 Durn & E 733 [8] R v Anthony Anderson [2008] 2 Cr. App. R. (S) 57 [9] R v Laing (2009), The Times, 5.11.09 (cited in Rook & Ward on Sexual Offences Law and Practice (4th Ed., 2010) at §14.25 FN34 and see also, http://www.theguardian.com/uk/2009/nov/26/student-urinated-war-memorial-sentenced) [10] Herring v Walround (1681) 2 Chan. Cas.110 [11] R v Gibson and Sylveire (supra) [12] R v Saunders (1875) 1 QBD 15 at pp.17-19 (in respect of Count 4) [13] Knuller; the advertisements in question inviting readers to meet the advertisers for the purpose of homosexual practices, although the conviction in that case was quashed on the basis that there had been a misdirection of the jury in relation to the meaning of “decency” and “outrage” and the element of publicity required to constitute the offence. [14] Shaw involved a prosecution for, amongst others, the offence of conspiracy to corrupt public morals arising from the publication of a booklet, the Ladies’ Directory, containing a list of names and addresses of prostitutes. This passage was cited with approval by Lord Simon in Knuller at p.493F. [15] R v Bunyan (supra); R v Wellard (1884) 14 QBD 63 [16] R v Rouverard (unrep.) 1830, Parke B (referred to in R v Webb (1848) 1 Den 338, 344) [17] R v Thallman (1863) 9 Cox CC 388 [18] R v Wellard (supra) [19] See, Rook & Ward at §14.43. The authors also suggest (at §14.47) that the two person rule may be satisfied by the act being experienced in some other way, e.g. by hearing, a point also supported by R v Hamilton at §34. [20] At §§3.14 & 3.17 [21] At §3.33; a recommendation which, self-evidently, was not adopted by the Legislature. [22] See the concluding sentence in Rook & Ward at §14.49 and the cases cited at FN 111. [23] R v Madercine (1899) 20 N.S.W. Law Rep. 36; R v Black (1921) 21 S.R. (N.S.W.) 748 [24] R v Reinsch [1978] 1 N.S.W.L.R. 483; R v B [1955 (3)] S.A. 494 [25] Judgment §29 [26] The absence of decisions in other jurisdictions may be explained by the existence of specific statutory offences under which statements which could outrage public decency may be prosecuted. In England, for example, the sending of grossly offensive, indecent, obscene, menacing or false communications via social media may be prosecuted under section 1 of the Malicious Communications Act 1988 or section 127 of the Communications Act 2003. [27] Statement of Findings §§17 & 18 [28] Statement of Findings §§19-21 [29] Statement of Findings §22 [30] Judgment §§34 & 37 [31] Judgment §§35-36 [32] Judgment §38 [33] The offence has been held to be of sufficient certainty to comply with Article 10 of the European Convention on Human Rights: see S and G v UK, App.No.17634/1991, an application arising from the convictions in R v Gibson and Sylveire. [34] Professor Jack M Balkin in Media Access: A Question of Design, 76 George Washington L Rev 933 (2008), quoted in Oriental Press Group Limited and Ors v Fevaworks Solutions Limited & Anor per Ribeiro PJ at §59. [35] Twitter is a paradigm example of the power of the internet in this respect. See, the judgment of Lord Judge CJ in Chambers v Director of Public Prosecutions [2013] 1 Cr. App. R. 1 at §§7-10 as to the nature of Twitter and at §§21-25 as to why Twitter content constitutes a message sent by an electronic communications service for the purposes of section 127(1) of the Communications Act 2003. [36] The Unsolicited Electronic Messages Ordinance (Cap. 593), which came into force in 2007, was enacted “to provide for the regulation of the sending of unsolicited electronic messages and for connected purposes”; it does not address the sending of offensive, indecent or obscene content in such electronic messages. [37] See the discussion in Consultation Paper No.193 published by the Law Commission of England and Wales in 2010, entitled Simplification of Criminal Law: Public Nuisance and Outraging Public Decency, relating to the mental element in the common law offence of outraging public decency at §§5.45 to 5.52 and the desirability of restating the offence in statute at §§6.12 to 6.15. [38] See, e.g., the distinctions drawn in §12 of the Guidelines on Prosecuting Cases involving Communication sent via Social Media issued by the Crown Prosecution Service in England and Wales. [39] See, e.g., in the Guidelines on Prosecuting Cases involving Communication sent via Social Media (supra) the commentary at: §§29-32 concerning communications which are grossly offensive, indecent, obscene or false; §§40-41 concerning context and approach; and §§42-48 concerning the public interest and addressing the human rights considerations of necessity and proportionality.
Mr Justice Chan PJ: 1. I agree with the judgment of Mr Justice Ribeiro PJ and the judgment of Lord Millett NPJ. Mr Justice Ribeiro PJ: 2. This appeal involves a claim against the defendant, Mr Thomas Hall, for breach of fiduciary duty. Mr Justice Stone held[1] and the Court of Appeal confirmed[2] that the defendant was guilty of such breaches and each Court ordered him to make an interim payment and to render an account of the property with which he had been entrusted. Leave to appeal was granted by the Court of Appeal[3] and the defendant now seeks to overturn the conclusion that he was the plaintiff’s fiduciary. By a cross-appeal, the plaintiff seeks to vary the remedies granted below. A. The facts 3. The main protagonists were (the now deceased) Mr Alan Woods and the defendant. Mr Woods was an astute and wealthy international investor and a highly successful professional gambler. The defendant was a Hong Kong based businessman. Mr Woods initially regarded the defendant as a friend and trusted business associate and it was the defendant who introduced to Mr Woods the idea of acquiring a substantial interest in an English company called The Sporting Exchange Limited (“TSE”) which operated an online betting website called “Betfair”. TSE was not publicly listed at the time of the relevant transactions but later obtained a listing on the London Stock Exchange. A.1 Acquisition of the second tranche of TSE shares 4. Towards the end of 2002, the parties embarked on a project with the aim of acquiring 10% of TSE’s shares using money put up by Mr Woods. In December 2002, they acquired 125,000 TSE shares (which became 1,250,000 shares in 2003 after a 10:1 split) which were then held by a company called Growthline Limited[4] (“the first tranche”). The present proceedings focus upon the parties’ attempts to make additional acquisitions during 2003. 5. Three of Mr Woods’s companies were involved in those attempts. They were the plaintiff, Libertarian Investments Limited, Assanzon Development Corporation (“Assanzon”) and Momentum Limited (“Momentum”). The plaintiff and Assanzon were wholly-owned by Mr Woods. Initially, the plaintiff held 90.63% of the shares in Momentum, with 8.03% held by Mental Refreshment Limited, a company owned by Mr Paul Longmuir, and 1.34% held by InChina Limited, a company owned by the defendant and Mr Christopher Parker. However, by July 2004, the plaintiff had become the sole owner of Momentum. 6. The defendant had contacts within TSE and was placed in charge of the further acquisition. It was agreed that a general tender would be made to shareholders in TSE to purchase the requisite number of their shares. The defendant used his company, Axdale Overseas Corporation (“Axdale”), as the vehicle for making the tender. Funds originating from Mr Woods via Assanzon would be used to pay for such shares and the shares successfully acquired would be held by Momentum for its beneficial owners (principally the plaintiff). The tender exercise was due to take place in May 2003 and, on 13 May 2003, at the defendant’s request, Mr Woods caused Assanzon to transfer €50 million (then equivalent to £35,790,980.67) to a trust account set up by the defendant with a firm of solicitors called Berwin Leighton Paisner (“BLP”). 7. Mr Woods had asked the defendant to arrange for the remittance to be referenced “for Momentum Limited/Assanzon” and believed that the funds would be held in a BLP client account in the name of either of those companies, but the defendant in fact designated the account as one created for his own company, Axdale, as the client (“the BLP trust account”). The defendant concealed this fact from Mr Woods, sending him what purported to be a BLP statement dated 21 May 2003, indicating that the funds were being held for Momentum as BLP’s client. 8. The May tender failed. No TSE shares were acquired and part of the funds provided by Mr Woods were returned. During the period with which we are concerned, the defendant periodically transferred various sums in and out of the BLP trust account without Mr Woods’ knowledge or authority. Many of the outward transfers were made to a Swiss account held in Axdale’s name (“the Axdale Swiss account”). 9. A further TSE tender exercise was to be held in November and December 2003 and, in order to fund a fresh attempt to increase Momentum’s holdings with the 10% target in view, the defendant called for additional funds. Mr Woods consequently remitted a total of £5,949,994.00 to the BLP trust account on 11 September 2003. 10. On 9 October 2003, the defendant entered a bid in Axdale’s name for TSE shares at the price of £2.71. This resulted in the acquisition of 5,598,918 TSE shares (“the second tranche”). However, Mr Woods did not know that the second tranche shares had been bought for £2.71. The defendant told him that they were purchased for £3.10 per share, at a total cost of £17,356,645.00, and Momentum was charged that amount for the shares. The defendant therefore made a secret profit exceeding £2 million in acquiring the second tranche. When this was discovered by Mr Woods after his relationship with the defendant had soured, he sued the defendant in the Hong Kong courts, it being furthermore alleged that a secret profit had also been made by the defendant in acquiring the first tranche.[5] 11. That action was eventually settled with the parties mutually acknowledging in a Deed of Settlement dated 28 November 2007 that of the second tranche, 5,074,112 shares had been acquired beneficially for the plaintiff; 449,806 shares beneficially for Mental Refreshment and 75,000 shares beneficially for InChina Limited. Of the £2,154,328.00 paid by the defendant to settle the action, the plaintiff calculates that £1,978,903.68 was attributable to itself. 12. The second tranche represented 5.71% of TSE’s issued capital. When acquiring the same, Momentum gave to TSE an undertaking dated 14 January 2004 stating, inter alia, that save with the prior written consent of TSE’s board, Momentum would not acquire more than 6.5% of TSE’s share capital. The acquiring parties evidently thought that the first tranche purchased by Growthline (which, if added to the second tranche would amount to 6.998% of TSE’s share capital) did not contravene the undertaking which permitted Momentum itself to hold up to 6.5%. The parties also evidently did not consider the undertaking a constraint on their pursuit of further TSE shares. A.2 Purported acquisition of the third tranche of 1,777,700 shares 13. In January 2004, the defendant announced that he had successfully acquired an additional 1,777,700 TSE shares (“the third tranche”). He sent a note to Mr Woods stating: “Davies - Samos and Caledonian Information. 1,777,700 shares in Samos and Caledonian Holding Co’s are held by Momentum Limited by way of Davies Family Settlement. Copy of relevant info to be forwarded to Alan to complete file”. 14. TSE’s share register then showed that Samos Investments Limited and Caledonian Heritable Investments Limited (together referred to as “Samos and Caledonian”) were the registered owners of 1,777,700 TSE shares. 15. The defendant then sent to Mr Woods a document headed “BLP and Tarlo Lyons Consolidated General Ledger” which included an entry dated 19 January 2004 purporting to show that £5,546,424.00 had been paid for 1,777,700 TSE shares at £3.11 per share. 16. There followed a document headed “Summary Overview as at 5/6/04” which purported to show that a total of 8,626,618 TSE shares had been acquired, with 5,598,918 shares (the second tranche) held by Momentum, 1,250,000 shares (the first tranche) held by Growthline and 1,777,700 shares (the purported third tranche) allegedly purchased at £3.11 per share plus stamp duty, held by “Samos/Caledonian (via Davies Settlement/Growthline)”. It also recorded that 7,867,166 of those shares were due to the plaintiff. The defendant informed Mr Woods that TSE had issued 98,306,017 shares with some 9,804,273 options outstanding, reporting that therefore “you hold 8.78% of [TSE] and if all share options are exercised, you will hold 7.98%”. Given the Momentum undertaking, the defendant calculated that it was still open to Momentum to acquire a further 1,428,250 shares before the 6.5% limit would be reached. This information was repeated in an e-mail from the defendant to Mr Woods dated 7 June 2004. 17. A spreadsheet sent by the defendant to Mr Woods as an attachment to an e-mail dated 10 June 2004 similarly reported that the plaintiff held 5,074,122 TSE shares acquired at £3.10 per share and 1,777,700 shares acquired at £3.11 per share. 18. The relationship between Mr Woods and the defendant broke down progressively from about 2005. Thereafter, Mr Woods had great difficulty getting any further information or documents regarding the third tranche of shares. He asked Mr Tim Levene, previously an officer of TSE, to intercede with the defendant on his behalf. At meetings held in November 2005 and February 2006, the defendant told Mr Levene that the 1,777,700 shares were held for the plaintiff in a Channel Islands trust known as the “Hall of Fame Trust” which the defendant had established, an asset of such trust being a company called Hoflim Limited which was beneficially entitled to the shares which (because of the Momentum undertaking) continued to be held by Samos and Caledonian as the registered owners. However, he produced no documents relating to that alleged arrangement. 19. It had become urgent for Mr Woods to obtain control of the 1,777,700 shares because he wished to take advantage of a general open cash offer made by a Japanese company called Softbank Corporation (“Softbank”) to purchase TSE shares at the price of £13.2005 per share, that offer remaining open for acceptance until 31 March 2006. However, he failed to obtain the relevant documents from the defendant. The Softbank offer was oversubscribed, resulting in Softbank purchasing 42% of the shares offered. The plaintiff contends that the defendant has caused the trust estate loss by depriving it of the benefit of Softbank’s offer. If it had been possible to offer the entire parcel of 1,777,700 shares to Softbank, the plaintiff argues that 746,634 shares (42%) would have been taken up, yielding proceeds of £9,855,942.10. 20. The defendant’s unauthorized dealings with the funds remitted to the BLP trust account only came to light when a copy of BLP’s Axdale ledger was obtained on 30 July 2006. It showed, among other things, that he had transferred a total of £13,646,718.18 to the Axdale Swiss account on various dates in May 2003, October 2003 and April 2004. Additionally, two outward transfers of £158,000 and £600,000 were made in August 2003, to unknown destinations. Various repayments had been made from time to time. 21. One entry showed that on 14 October 2003, the defendant had transferred £5,463,508.46 from the BLP trust account to the Axdale Swiss account, the defendant later claiming that the money was used to purchase the third tranche of shares via “a nominee appointed by the beneficial owners of the shares” identified as one “Michael Schultz”. B. The findings regarding the third tranche 22. Stone J expressed some uncertainty as to whether the third tranche had in fact been acquired by the defendant. There was evidence (derived from without prejudice negotiations to which I shall return) from his solicitors suggesting that the defendant had indeed acquired 1,777,700 shares and sold 414,700 of them to Softbank, realising £5,474,247.35 and leaving a balance of 1,355,300 TSE shares. However, the Judge stated: “I presently have no idea of the veracity/accuracy of this latter number”.[6] But when it came to the Orders made against the defendant, Stone J fastened on the £5,474,247.35 amount as having admittedly been received by the defendant (but not accounted for to the plaintiff) and ordered that sum to be paid to the plaintiff as an interim payment. Fok JA (writing for the Court of Appeal) concluded that there was “no specific finding in the Judgment that the 1,777,700 TSE shares were acquired for the benefit of the plaintiff” and that the question was unresolved.[7] 23. It appears that Stone J may have thought that the question whether the 1,777,700 shares had actually been bought and then sold in part to Softbank was a matter that could be held over for later investigation as part of the account which he had ordered to be taken. If so, I do not think that was the right approach. The question was an important issue in the case which had been dealt with in the evidence and in the parties’ submissions. It was incumbent on the Judge to make a finding on the available evidence. 24. However, other aspects of Stone J’s judgment tend to suggest that he had actually made a finding that the 1,777,700 shares had not been acquired. His Lordship referred to the defendant’s messages referred to above as “falsified and misleading reports as to what was happening”.[8] He noted that the defendant had claimed that such shares had been acquired from Samos and Caledonian,[9] accepting Mr Levene’s evidence that the defendant had told him that because of the Momentum undertaking, Samos and Caledonian remained the registered shareholders holding the shares subject to a trust which the defendant had set up, ultimately for the benefit of the plaintiff.[10] 25. Stone J appears to have rejected the defendant’s story. He adopted the findings made by Fung J in interlocutory proceedings that Samos and Caledonian had not dealt with the defendant or with “Michael Schultz”; that they did not make any agreement with the defendant in relation to their 1,777,700 shares and that they did not execute any declaration of trust regarding those shares.[11] It follows that the Judge must have rejected the defendant’s evidence about having purchased the third tranche shares from those companies. 26. Indeed, Stone J noted that the defendant had blatantly changed his story and proceeded to testify that the 1,777,700 shares had in fact not been acquired, blaming Samos and Caledonian for not completing the intended transaction even though they had received payment in full: “Initially he had reported to the plaintiff that he had set up the trust company/structure to hold the beneficial entitlements to the TSE Trust Shares, but this position subsequently moved to the allegation that, after receipt of payment in full, Samos and Caledonian were not prepared to complete the transaction and that, as a consequence, no beneficial ownership of the tranche of 1,777,700 shares was acquired for the plaintiff.”[12] 27. It was in this context that the Judge concluded that the defendant had woven such an elaborate tissue of lies that he “could not keep track of his own lies”, as Mr Barry Barlow SC, counsel for the plaintiff, had submitted.[13] The Judge accepted the plaintiff’s evidence “virtually in its entirety”,[14] but he described the defendant’s evidence as “wholly far-fetched and unbelievable”;[15] concluding that he “did not tell the truth to this court ... [but] evaded and dissembled”.[16] 28. It therefore seems likely that Stone J adopted the £5,474,247.35 amount for the interim payment ordered, not because he had found that it was a sum actually realised from a sale to Softbank, but because the defendant could hardly object to its use as an interim figure since he had himself put that amount forward as a sum realised but not accounted for. 29. There is now no uncertainty over that issue. At the hearing before this Court, both Mr Barlow SC and Mr Colin Wright (appearing for the defendant) accepted that the purported third tranche of 1,777,700 shares had never been acquired by the defendant and therefore that no part of any such shares had been sold to Softbank. 30. On that basis, the crucial findings of the Courts below may be taken to be as follows: (a) Mr Woods and his companies entrusted to the defendant the funds comprising the €50 million (equivalent to £35,790,980.67) and the £5,949,994.00 paid into the BLP trust account for the express and sole purpose of purchasing TSE shares on behalf of Mr Woods and the plaintiff, the aim being to acquire 10% of TSE’s share capital. (b) The shares purchased would be transferred to Momentum to be held by Momentum beneficially principally for the plaintiff. (c) Unknown to Mr Woods or the plaintiff, the defendant designated the BLP trust account as Axdale’s client account while falsely informing them that it was a client account in Momentum’s name. The defendant also transferred substantial sums in and out of the BLP trust account without their knowledge or authority. (d) One outward transfer, made on 14 October 2003 to the Axdale Swiss account, was in the sum of £5,463,508.46 which the defendant claimed had been effected for the purpose of acquiring the third tranche of 1,777,700 shares. (e) The defendant claimed that he had successfully bought those shares from their registered shareholders, Samos and Caledonian. In a series of communications to Mr Woods, he confirmed that the 1,777,700 shares were held through a trust structure for the plaintiff’s benefit. (f) Those claims were false. The defendant had not bought the 1,777,700 shares. Therefore his statement that the sum of £5,463,508.46 withdrawn from the BLP trust account on 14 October 2003 had been used to buy those shares was false and no explanation has been given as to how that money was used. C. The “without prejudice” debate 31. Before resuming the main line of argument, I ought to deal with the “without prejudice” issue. The admissibility of a statement made by the defendant’s solicitors in the course of without prejudice negotiations to settle the secret profits action was hotly contested. It involved the admission (mentioned above) that the defendant had acquired 1,777,700 shares and sold 414,700 of them to Softbank, yielding proceeds of £5,474,247.35, and that 1,355,300 of the unsold third tranche shares remained with him. The Court of Appeal had differed from Stone J as to its admissibility. 32. Since it is now accepted that no such acquisition or sale had ever occurred, there is no question of the statement being relied on as a factual admission. The without prejudice debate is therefore no longer relevant. 33. However, I note in passing that the plaintiff had argued that the statement was exceptionally admissible even if made “without prejudice” because it constituted the perpetration of a fraud on the plaintiff or at least an attempt to conceal the defendant’s fraudulent conduct. That argument was rejected by Fok JA on the footing that the authorities relied on by Mr Barlow established a fraud exception to claims for legal professional privilege, but that those authorities were inapplicable to correspondence undertaken pursuant to a bona fide attempt to settle a dispute.[17] It is presently unnecessary to enter into the debate, but it may be helpful to point out that there are well-established exceptions to treating documents marked “without prejudice” as inadmissible. Robert Walker LJ in Unilever PLC v Proctor and Gamble Co,[18] pointed out that they include an exception identified in the following terms: “Apart from any concluded contract or estoppel, one party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other ‘unambiguous impropriety’ (the expression used by Hoffmann LJ in Foster v Friedland, 10 November 1992, CAT 1052).” 34. The Unilever decision was approved by the House of Lords in Ofulue v Bossert.[19] Had the issue remained alive, the plaintiff’s position on admissibility would have been quite properly arguable. D. The findings on fiduciary liability 35. Both Courts below found that the defendant was in breach of fiduciary obligations owed to the plaintiff. D.1 Stone J’s findings 36. Stone J found that Mr Woods had caused Assanzon to transfer the funds in question to the BLP trust account for and on behalf of the plaintiff; that those funds belonged to the plaintiff; and that they were under the control of the defendant through his control of Axdale.[20] His Lordship found that the defendant betrayed the obvious trust reposed in him by using those funds for his own purposes.[21] Stone J stated: “...when one party trusts and remits to a business associate funds for the specific purpose of buying certain shares (in this case the ‘third tranche’ of 1,777,700 TSE shares), which funds, unknown to the remitting party, are promptly deposited in a solicitor’s trust account not in the name of the donor but in the name of the associate’s own company, and thereafter, together with other funds, wrongfully and dishonestly are abstracted into the associate’s Swiss bank account held in the name of that associate’s own company, once again entirely without notice to, and absent the consent of the remitting party, in my view it does not represent a huge juridical leap ... to find, as I do, that the actions of such associate amount to breach of trust and/or fiduciary duty.”[22] 37. The breaches of fiduciary duty involved the failure to apply the funds for their designated purpose of acquiring TSE shares and, instead, misappropriation of such funds for the defendant’s own purposes: “...Mr Hall has admitted in evidence that the funds concerned were not used for any purposes of the plaintiff/Mr Woods, let alone the agreed designated purpose, which was the acquisition of TSE shares; to the contrary, I find that Mr Hall wrongfully abstracted and used these funds for his own entirely unauthorized purposes, absent the knowledge and consent of the plaintiff/Mr Woods.”[23] D.2 The Court of Appeal’s findings 38. Fok JA expressed the same view: “...on the Judge’s findings, it is clear that the defendant undertook to act for the plaintiff to acquire shares of TSE in circumstances giving rise to a relationship of trust and confidence. Here, the defendant plainly owed fiduciary duties to the plaintiff to use the BLP funds, over which he had control since BLP looked to him for instructions for the disposition of those funds, for the purpose of acquiring shares in TSE and for that purpose only. As such, he owed fiduciary duties to, and was therefore in the position of a fiduciary as regards, the plaintiff.”[24] 39. Fok JA agreed with the Judge’s finding of breach: “...instead of using the funds in the BLP account for the purposes of the plaintiff and, specifically, for the agreed purpose of acquiring TSE shares, the defendant wrongfully abstracted and used those funds for his own entirely unauthorised purposes, absent the knowledge and consent of the plaintiff.”[25] He noted additionally that the trial Judge had found breaches involving misappropriation of funds through five unauthorized payments.[26] E. The Orders made below and those now sought by the parties E.1 Stone J’s Orders 40. In its pleadings, the plaintiff sought an Order that the defendant account for the trust property and in the alternative, an Order of “equitable damages or restitution of at least £21,424,503.00 to restore the plaintiff to the position it would have been in had the defendant honoured his trust obligations”. In his closing submissions at the trial, Mr Barlow made it clear that he did not wish “to continue with the account taking process” and that his client was seeking “an adjudication on the basis of the materials presently before the court” leading to a monetary award on the wilful default basis, that is, an award to compensate the trust estate for loss caused to it by the defendant wilfully failing to carry out the duties for which he had been entrusted with the relevant funds. 41. Stone J acknowledged that his findings would justify an award on the wilful default basis and summarized the plaintiff’s case for equitable compensation as follows: “... the plea at prayer (5) of equitable damages or restitution of at least £21,424,503 – ... as I understand it, is based on the premise that Mr Hall is liable to compensate the plaintiff by providing restitution for Mr Hall’s inability to restore the trust by paying the value of that which the plaintiff would have received but for the defendant’s default; this sum apparently is comprised of the £9,855,942.11 which should have been generated from the sale of TSE shares to Softbank, plus the sum of £11,568,560 that should have accrued from the sale of the apparently remaining 1,031,066 TSE shares, even with a 15% discount to the Softbank price ‑ which latter percentage derives from Mr McClellan’s evidence wherein Mr Hall, through his solicitors, had stated that he was negotiating with the registered shareholders of the remaining TSE Trust Shares for them to purchase those shares at a discount of 10 to 15% of the price paid by Softbank Corporation, namely £11.88 or £11.22 per TSE share.”[27] 42. However, Stone J felt that evidential deficiencies prevented the granting of such relief. He found that the defendant had undoubtedly “misappropriated trust property in breach of his obligations qua trustee/fiduciary” but observed that “even now the court ... does not know the full story of how much money went where, when, and indeed, precisely how many TSE shares now actually remain to be reclaimed by the plaintiff”.[28] This reflects the Judge’s ambivalent attitude towards the question whether the third tranche shares had in fact been acquired and on-sold to Softbank as discussed above.[29] 43. Stone J added that: “... [he did not] have any idea, for example, of whether and at what price Softbank indeed would have bought the remaining TSE Trust shares at the discount now claimed, and/or if the entire amount of the 1,777,700 shares had been offered to Softbank (which it appears in fact they were not), how many shares eventually could have been sold in light of the evidence, which is undisputed, that the Softbank purchase offer was over-subscribed.”[30] 44. The Judge acceded to Mr Wright’s submission that there had to be a full investigation which could be pursued by requiring the defendant to provide “a formal account” and that it would be unfair to “skip this step”: “... the [defendant][31] must now render a true and accurate account, which upon the taking of such account may include an order that the trust be restored to the position it would have been in absent the defendant’s dishonest and wilful breaches of trust.”[32] 45. Since, as previously noted, the Judge thought it beyond doubt that the defendant had misappropriated funds in breach of trust, he ordered an interim payment in the sum of £5,474,247.35[33] while ordering an account to be taken in the following terms: “(ii) That pursuant to the provisions of Order 43, RHC, the defendant do render to the plaintiff a true and proper account upon a wilful default basis for the trust property, and in particular for the plaintiff’s funds as transferred on the instructions of the defendant from the BLP trust account and/or the beneficial entitlements to the 1,777,700 TSE Trust Shares (or such TSE shares as may remain) as purchased with the plaintiff’s funds and/or all property now representing the trust property, including any dividends which have accrued on the TSE Trust Shares and/or other profits which have accrued upon the trust property; (iii) That if and in so far as monies be found to be due to the plaintiff from the defendant consequent upon the taking of such account, that credit be given for the repayment (if such payment has been effected) of the aforesaid sum of £5,474,247.35, together with interest accruing thereon; ...” E.2 The Court of Appeal’s Orders 46. The Court of Appeal was also persuaded that the evidential position was insufficiently developed to permit an immediate award of equitable compensation on the basis sought. Its view was influenced by two conclusions Fok JA had reached in relation to Stone J’s judgment. The first, as noted above,[34] was that Stone J had not made a specific finding as to whether the 1,777,700 shares had been acquired. The second, also previously noted,[35] was that Stone J had erred in treating as admissible a statement made in the course of without prejudice communications. Fok JA put it thus: “... the Judge simply did not make the necessary findings of fact that would enable the plaintiff to recover equitable compensation in the amount of £21,424,503 as sought. It has yet to be determined if in fact the defendant did actually acquire the 1,777,700 TSE shares for the plaintiff. And if so, how many of those shares were sold either to Softbank or to any other party and for how much. In any event, as is clear from the plaintiff’s skeleton submissions in support of the cross-appeal, the only material on which the plaintiff can rely in order to advance its claim for this sum is derived from the without prejudice communications which should not have been admitted in evidence.”[36] 47. The Court of Appeal varied the Judge’s Order for an interim payment since the £5,474,247.35 figure had been derived from a without prejudice communication considered inadmissible. It substituted the sum of £4,823,768.51. That was the sum put forward by Mr Wright as the amount admittedly due from the defendant to the plaintiff as an “overpayment” received. E.3 The Orders now sought by the parties 48. In its printed case, the defendant seeks (i) to set aside of the Orders of the Courts below; (ii) the return of the interim payment; (iii) payment of interest by the plaintiff “at 2% over the Bank of England Base Rate compounded with quarterly rests” from the date of receipt of the interim payment; and (iv) costs. 49. However, before this Court, the defendant has been far less ambitious. Mr Wright’s principal argument is that the defendant is only liable for a debt representing overpayment by the plaintiff to the defendant in the sum of £4,823,768.51. That is the amount of the interim payment ordered by the Court of Appeal, and since it has already been paid, the defendant’s case is that there is no valid claim for any further relief. 50. The plaintiff, on the other hand, seeks an immediate monetary award by way of equitable compensation on a wilful default basis (giving credit for the £4,823,768.51 amount received). Mr Barlow points to the defendant’s intransigently obstructive attitude in relation to its discovery and other obligations at the interlocutory stages, requiring recourse to “unless orders” and even to an application for leave to commit for contempt. He submits that the Orders requiring a fresh round of litigation before a Master or single judge for an account or further inquiries would involve a disastrous waste of the Court’s and the parties’ time and effort and run up wholly unproductive costs. 51. The case advanced below had been for equitable compensation in the sum of £21,424,503.00, but at the hearing this was reduced to £14,183,851.72 (giving credit for the £4,823,768.51 received) on a basis to which I shall return. The plaintiff submits that evidence to support the granting of such relief is already before the Court. F. The applicable principles 52. I turn to the equitable principles relevant to the present appeal in the context of the defendant’s argument that the relationship was purely commercial and not fiduciary and of the plaintiff’s argument that there should have been an immediate award of equitable compensation. In the citations which follow, I have, where possible, omitted references to authority contained in the passages cited. F.1 Fiduciary relationships 53. Certain relationships have traditionally been accepted as fiduciary in nature, namely, the relationships between trustee and beneficiary, agent and principal, solicitor and client, employee and employer, director and company, and between partners.[37] 54. However, even within such a relationship, the specific obligation breached may not be fiduciary in nature. As Brennan CJ put it in Breen v Williams:[38] “It is erroneous to regard the duty owed by a fiduciary to his beneficiary as attaching to every aspect of the fiduciary’s conduct, however irrelevant that conduct may be to the agency or relationship that is the source of fiduciary duty.” 55. And in Bristol and West Building Society v Mothew,[39] Millett LJ (as Lord Millett then was) endorsed the following comment of Ipp J: “It is essential to bear in mind that the existence of a fiduciary relationship does not mean that every duty owed by a fiduciary to the beneficiary is a fiduciary duty. In particular, a trustee's duty to exercise reasonable care, though equitable, is not specifically a fiduciary duty...”[40] 56. The converse is also true. Although the parties’ relationship may be generally non-fiduciary, particular obligations may import fiduciary duties and equitable remedies. 57. Thus, in the Hospital Products case, Mason J noted that in cases where a comprehensive fiduciary relationship does not exist: “...it does not exclude the existence of a more limited fiduciary relationship for it is well settled that a person may be a fiduciary in some activities but not in others.”[41] 58. Similarly, Blanchard J, in the New Zealand Supreme Court stated: “It is well settled that, even in a commercial relationship of a generally non-fiduciary kind, there may be aspects which engage fiduciary obligations of loyalty. That is because in the nature of that particular aspect of the relationship one party is entitled to rely upon the other, not just for adherence to contractual arrangements between them, but also for loyal performance of some function which the latter has either agreed to perform for the other or for both or has, perhaps less formally, even by conduct, assumed.”[42] 59. Hence, as Tipping J pointed out in BNZ v NZ Guardian Trust Co Ltd,[43] the important focus is on the nature of the obligation in question: “Historically the law has tended to place emphasis on the classification of the relationship giving rise to the obligation. But more recently, for certain purposes at least, there has been a shift of emphasis from the classification to the nature of the obligation, or duty, as it is usually called. Thus the nature of the duty which has been breached can often be more important, when considering issues of causation and remoteness, than the particular classification or historical source of that duty.” F.2 Obligations importing fiduciary duties 60. The authorities show that a person attracts fiduciary duties where he undertakes an obligation to act in the interests of another. As Mason J expressed it in Hospital Products: “[An] entitlement to act in one’s own interests is not an answer to the existence of a fiduciary relationship, if there be an obligation to act in the interests of another. It is that obligation which is the foundation of the fiduciary relationship, even if it be subject to qualifications including the qualification that in some respects the fiduciary is entitled to act by reference to his own interests.”[44] 61. Similarly, in Breen v Williams,[45] Gummow J stated: “Fiduciary obligations arise (albeit perhaps not exclusively) in various situations where it may be seen that one person is under an obligation to act in the interests of another.” 62. And in the Canadian Supreme Court, McLachlin J put it thus: “The essence of a fiduciary relationship ... is that one party exercises power on behalf of another and pledges himself or herself to act in the best interests of the other.”[46] 63. There are obviously many ways and many different contexts in which one may assume an obligation to act in another person’s interests, as Mason J pointed out: “The categories of fiduciary relationships are infinitely varied and the duties of the fiduciary vary with the circumstances which generate the relationship. Fiduciary relationships range from the trustee to the errand boy, the celebrated example given by Fletcher Moulton LJ in his judgment in Re Coomber [1911] 1 Ch 723, in which, after referring to the danger of trusting to verbal formulae, he pointed out ... that the nature of the curial intervention which is justifiable will vary from case to case.”[47] 64. Brennan CJ helpfully suggested that fiduciary duties arise in two broad, overlapping situations: “Fiduciary duties arise from either of two sources, which may be distinguished one from the other but which frequently overlap. One source is agency; the other is a relationship of ascendancy or influence by one party over another, or dependence or trust on the part of that other.”[48] 65. An obvious example of the “agency” type of situation giving rise to fiduciary duties involves the case where a person receives money or other property for and on behalf of or as trustee of another person.[49] 66. That fiduciary duties may also arise out of a relationship of ascendancy was acknowledged by the Canadian Supreme Court in Galambos v Perez,where Cromwell J described such relationships as “power-dependency relationships” involving a need for “the protection of one party against abuse of power by another”.[50] 67. It is in the context of such “ascendancy” cases that the courts have identified as an essential feature of the fiduciary relationship, an obligation on the fiduciary to exercise discretionary powers in the interests of another, highlighting the vulnerability of that other person to any potential abuse of such powers. 68. In Hospital Products,one of the questions was whether the relationship between distributor and supplier was such a “power-dependency” relationship and it was in that context that Mason J stated: “The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position. The expressions ‘for’, ‘on behalf of’ and ‘in the interests of’ signify that the fiduciary acts in a ‘representative’ character in the exercise of his responsibility, to adopt an expression used by the Court of Appeal. It is partly because the fiduciary's exercise of the power or discretion can adversely affect the interests of the person to whom the duty is owed and because the latter is at the mercy of the former that the fiduciary comes under a duty to exercise his power or discretion in the interests of the person to whom it is owed...”[51] 69. In Breen v Williams,[52] the Australian High Court considered a doctor/patient relationship one of ascendancy giving rise to fiduciary duties relating to some, but not all, aspects of the relationship. F.3 Purely commercial relationships distinguished 70. Mr Wright sought to place great weight on the distinction between commercial and fiduciary relationships. However, it is plain that fiduciary duties may well arise as aspects of a commercial relationship. Moreover, it is clear that legal and equitable rights and remedies are capable of co-existence, even in a single transaction.[53] There are nonetheless many cases where, after scrutiny by the court, no fiduciary element is found to arise and no basis exists for equity to intervene in what is a purely commercial relationship. 71. In such commercial relationships, the parties deal with each other as principals and at arm’s length, each looking after his own interests. Disputes between such parties usually only give rise to common law causes of action and remedies. Any part played by equity tends to be in its auxiliary jurisdiction in support of the common law. 72. The distinction between commercial and fiduciary relationships, and its reflection in the different remedies available (to which I shall return), were explained by McLachlin J in her dissenting but influential judgment in Canson Enterprises Ltd v Boughton & Co:[54] “The basis of the fiduciary obligation and the rationale for equitable compensation are distinct from the tort of negligence and contract. In negligence and contract the parties are taken to be independent and equal actors, concerned primarily with their own self-interest. Consequently the law seeks a balance between enforcing obligations by awarding compensation and preserving optimum freedom for those involved in the relationship in question, communal or otherwise. The essence of a fiduciary relationship, by contrast, is that one party pledges herself to act in the best interest of the other. The fiduciary relationship has trust, not self-interest, at its core, and when breach occurs, the balance favours the person wronged. The freedom of the fiduciary is diminished by the nature of the obligation he or she has undertaken — an obligation which ‘betokens loyalty, good faith and avoidance of a conflict of duty and self-interest’: Canadian Aero Service Ltd v O’Malley, [1974] S.C.R. 592 at 606, 40 DLR (3d) 371, 11 CPR (2d) 206. In short, equity is concerned, not only to compensate the plaintiff, but to enforce the trust which is at its heart.” F.4 The fiduciary duty breached and causation 73. Where a party is found to have undertaken an obligation to act in another person’s interest, it is necessary to determine what precisely the fiduciary duty owed consists of. As pointed out by Mason J: “... it is now acknowledged generally that the scope of the fiduciary duty must be moulded according to the nature of the relationship and the facts of the case ... The often-repeated statement that the rule in Keech v Sandford ... applies to fiduciaries generally tends to obscure the variable nature of the duties which they owe. The rigorous standards appropriate to a trustee will not apply to a fiduciary who is permitted by contract to pursue his own interests in some respects.”[55] 74. The basic obligation of the fiduciary to act in the interests of another may find expression in various ways, depending on the circumstances: He may be said to be under a duty to act in good faith; not to make a profit out of his trust; not to place himself in a position where his duty and his interest may conflict; or not to act for his own benefit or the benefit of a third person without the informed consent of his principal.[56] 75. Where a fiduciary has committed a breach of some such fiduciary duty, it may be important to ascertain what impact that breach has had on any relevant trust property. As Tipping J pointed out, it is possible to distinguish three categories of breach with particular reference to their impact on the trust estate: “Breaches of duty by trustees and other fiduciaries may broadly be of three different kinds. First, there are breaches leading directly to damage to or loss of the trust property; second, there are breaches involving an element of infidelity or disloyalty which engage the conscience of the fiduciary; third, there are breaches involving a lack of appropriate skill or care. It is implicit in this analysis that breaches of the second kind do not involve loss or damage to the trust property, and breaches of the third kind involve neither loss to the trust property, nor infidelity or disloyalty.”[57] 76. It is of course true that in every case, there must be shown to be “some causal connection between the breach of trust and the loss to the trust estate for which compensation is recoverable, viz the fact that the loss would not have occurred but for the breach...”[58] However, the authorities show that the rules on causation are of varying strictness depending on the type of duty and breach in question. 77. Tipping J’s third category of breaches involving a lack of appropriate skill or care is not relevant on the facts of the present case. However, it may be noted that the fiduciary relationship in such cases merely provides a setting for a duty which is indistinguishable from a common law duty of care. Albeit arising in a fiduciary context, the common law rules as to causation, foreseeability and remoteness generally apply to such claims. 78. On the other hand, in cases within Tipping J’s first category, involving loss caused by the fiduciary to trust property, strict rules on causation apply. These are rules borrowed from those developed in relation to traditional trusts, requiring the trustee to restore to the trust fund what he has caused it to lose as a result of his breach of trust. In Target Holdings Ltd v Redferns,[59] Lord Browne-Wilkinson explained the traditional rule as follows: “In such a case the basic rule is that a trustee in breach of trust must restore or pay to the trust estate either the assets which have been lost to the estate by reason of the breach or compensation for such loss. ... If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the trust estate to put it back to what it would have been had the breach not been committed. ... Even if the immediate cause of the loss is the dishonesty or failure of a third party, the trustee is liable to make good that loss to the trust estate if, but for the breach, such loss would not have occurred ...Thus the common law rules of remoteness of damage and causation do not apply.” 79. Tipping J held that a breach of fiduciary duty in his first category is to be equated with such a breach of trust and treated with equal strictness. Causation is established on a “but for” basis without the constraints of the common law causation rules on remoteness and foreseeability: “In the first kind of case the allegation is that a breach of duty by a trustee has directly caused loss of or damage to the trust property. The relief sought by the beneficiary is usually in such circumstances of a restitutionary kind. The trustee is asked to restore the trust estate, either in specie or by value. The policy of the law in these circumstances is generally to hold the trustee responsible if, but for the breach, the loss or damage would not have occurred. This approach is designed to encourage trustees to observe to the full their duties in relation to the trust property by imposing upon them a stringent concept of causation. Questions of foreseeability and remoteness do not come into such an assessment.”[60] 80. As McLachlin J in Canson Enterprises explained,[61] this approach is tied to the responsibility assumed by the fiduciary to act in the interests of another: “The requirement that the loss must result from the breach of the relevant equitable duty does not negate the fact that ‘causality’ in the legal sense as limited by foreseeability at the time of breach does not apply in equity. ... Thus while the loss must flow from the breach of fiduciary duty, it need not be reasonably foreseeable at the time of the breach .... The considerations applicable in this respect to breach of fiduciary duty are more analogous to deceit than negligence in breach of contract. Just as ‘it does not lie in the mouth of the fraudulent person to say that [the losses] could not reasonably have been foreseen’ (Doyle v Olby (Ironmongers) Ltd, [1969] 2 QB 158, [1969] 2 All ER 119 at 222 (CA)), so it does not lie in the mouth of a fiduciary who has assumed the special responsibility of trust to say the loss could not reasonably have been foreseen. This is sound policy. ... In the case of a breach of fiduciary duty, as in deceit, we do not have to look to the consequences to judge the reasonableness of the actions. A breach of fiduciary duty is a wrong in itself, regardless of whether a loss can be foreseen. Moreover, the high duty assumed and the difficulty of detecting such breaches make it fair and practical to adopt a measure of compensation calculated to ensure that fiduciaries are kept ‘up to their duty.’” 81. McLachlin J also concluded that in principle, there is only a limited duty to mitigate in cases falling within the first category: “In negligence and contract the law limits the actions of the parties who are expected to pursue their own best interest. Each is expected to continue to look after their own interests after a breach or tort, and so a duty of mitigation is imposed. In contrast, the hallmark of fiduciary relationship is that the fiduciary, at least within a certain scope, is expected to pursue the best interest of the client. It may not be fair to allow the fiduciary to complain when the client fails forthwith to shoulder the fiduciary’s burden. This approach to mitigation accords with the basic rule of equitable compensation that the injured party will be reimbursed for all losses flowing directly from the breach. When the plaintiff, after due notice and opportunity, fails to take the most obvious steps to alleviate his or her losses, then we may rightly say that the plaintiff has been ‘the author of his own misfortune.’ At this point the plaintiff's failure to mitigate may become so egregious that it is no longer sensible to say that the losses which followed were caused by the fiduciary's breach. But until that point mitigation will not be required.”[62] 82. The common law rules on foreseeability and remoteness are also inapplicable in relation to Tipping J’s second category: “... the trustee or other fiduciary has committed a breach of duty which involves an element of infidelity or disloyalty engaging the fiduciary's conscience - what might be called a true breach of fiduciary duty. ... in such a case once the plaintiff has shown a loss arising out of a transaction to which the breach was material, the plaintiff is entitled to recover unless the defendant fiduciary, upon whom is the onus, shows that the loss or damage would have occurred in any event, ie without any breach on the fiduciary’s part. Questions of foreseeability and remoteness do not arise in this kind of case either. Policy dictates that fiduciaries be allowed only a narrow escape route from liability based on proof that the loss or damage would have occurred even if there had been no breach.”[63] 83. The foregoing discussion involves loss caused to the trust estate. The breach may of course result in no loss to the trust estate but in the fiduciary making a profit. The present case has not been conducted on that basis and it suffices to note that equity will not allow such a fiduciary to retain such profit but will require him to account for it, imposing a constructive trust.[64] Since the jurisdiction is not punitive, the fiduciary will not be made to account for more than he actually received as a result of his breach.[65] F.5 The remedy of equitable compensation 84. In the present appeal, the plaintiff’s case is that the defendant caused loss to the trust fund as a result of his breach and the controversy between the parties relates solely to the remedy of equitable compensation sought by the plaintiff. 85. In Nocton v Lord Ashburton, Viscount Haldane LC noted that it was established that in cases of actual fraud, the Courts of Chancery, in both their concurrent and exclusive jurisdiction, could order the defendant “to make restitution, or to compensate the plaintiff by putting him in as good a position pecuniarily as that in which he was before the injury”.[66] He held that this applied equally in cases of equitable fraud, including breaches of fiduciary duty. Thus, taking the example of a solicitor who had misused his fiduciary position, his Lordship stated: “It did not matter that the client would have had a remedy in damages for breach of contract. Courts of Equity had jurisdiction to direct accounts to be taken, and in proper cases to order the solicitor to replace property improperly acquired from the client, or to make compensation if he had lost it by acting in breach of a duty which arose out of his confidential relationship to the man who had trusted him.”[67] 86. As Gummow J pointed out, Viscount Haldane LC’s judgment shows that: “Where the breach of duty produces not a gain to the fiduciary but a loss to the party to whom the fiduciary duty was owed... there is an obligation to account for the loss by provision of equitable compensation.”[68] 87. Equitable compensation rests on the premise that the basic duty of a trustee or fiduciary who has misappropriated assets or otherwise caused loss or damage to the trust estate in breach of his duty is to restore the lost property to the trust (together with an account of profits if applicable). Where restoration in specie is not possible, the Court may order equitable compensation in place of restoration.[69] As Lord Browne-Wilkinson stated: “If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the trust estate to put it back to what it would have been had the breach not been committed...”[70] 88. Thus, where a company was entitled to have certain shares restored to it by a director who had received the shares in breach of fiduciary duty, the Court did not consider restoration of the shares in specie an adequate or just remedy where their value, previously £80 per share, had dropped to £1 per share. The director was ordered instead to pay the company £80 per share with interest from the time he received them.[71] 89. Where the breach consists of a wilful failure by the fiduciary to carry out his fiduciary duty, his omission causing loss to the trust estate, he is liable to account on a wilful default basis. This is explained by the editors of Snell’s Equity as follows: “The trustee is required to restore the financial position of the trust fund to what it would have been if the trustee had not been guilty of wilful default. The effect is that the trustee must pay fresh money into the account. The trustee’s liability is essentially to compensate the trust for the consequential losses that follow from the trustee’s breach.”[72] 90. As we have seen,[73] in pursuing the restorative objective of equitable compensation, the common law rules requiring the loss to be foreseeable and not too remote do not apply. The Court is therefore entitled to assess compensation “with the full benefit of hindsight”.[74] 91. Consequently, the loss is assessed at the time of judgment and the Court is entitled to take into account any post-breach changes affecting the value of the lost trust property. McLachlin J, following Wilson J,[75] cited with approval the following passage from the judgment of Street J in Re Dawson; Union Fidelity Trustee Co v Perpetual Trustee Co:[76] “... in a claim against a defaulting trustee ... his obligation has always been regarded as tantamount to an obligation to effect restitution in specie; such an obligation must necessarily be measured in the light of market fluctuations since the breach of trust; and in my view it must also necessarily be affected, where relevant, by currency fluctuations since the breach.” 92. It must however be kept in mind, as McLachlin J pointed out: “While foreseeability of loss does not enter into the calculation of compensation for breach of fiduciary duty, liability is not unlimited. Just as restitution in specie is limited to the property under the trustee's control, so equitable compensation must be limited to loss flowing from the trustee's acts in relation to the interest he undertook to protect. Thus Davidson[77] states ‘it is imperative to ascertain the loss resulting from breach of the relevant equitable duty’....” 93. Where the plaintiff provides evidence of loss flowing from the relevant breach of duty, the onus lies on a defaulting fiduciary to disprove the apparent causal connection between the breach of duty and the loss (or particular aspects of the loss) apparently flowing therefrom. 94. Tipping J so held in BNZ v NZ Guardian Trust Co Ltd.[78]Similarly, when in Maruha Corporation and Muruha (NZ) Ltd v Amaltal Corporation Ltd,[79] a defaulting fiduciary sought an offset against the compensation payable for its default, the Court required it to show that the proposed offset “was an incontrovertible benefit to the person to whom the fiduciary duty was owed” emphasising “that it is for the defaulting fiduciary to establish that such a benefit has been gained.”[80] 95. Another instance is found in the judgment of Mason J in Hospital Products,[81] when dealing with a defaulting fiduciary who has “so mixed an indeterminate profit with his own property as to render the identification of the gain impossible”. In such a situation, “... the whole will be treated as trust property, except so far as he may be able to distinguish what is his own”.[82] His Honour also suggested that in a case where a fraudulent fiduciary acquired a profit through a combination of trust property and his own property or efforts, “It may well be that equity in such circumstances will not seek to apportion the gain”.[83] 96. McLachlin J helpfully provided the following summary of the rules relating to equitable compensation: “In summary, compensation is an equitable monetary remedy which is available when the equitable remedies of restitution and account are not appropriate. By analogy with restitution, it attempts to restore to the plaintiff what has been lost as a result of the breach, ie, the plaintiff's lost opportunity. The plaintiff's actual loss as a consequence of the breach is to be assessed with the full benefit of hindsight. Foreseeability is not a concern in assessing compensation, but it is essential that the losses made good are only those which, on a common sense view of causation, were caused by the breach. The plaintiff will not be required to mitigate, as the term is used in law, but losses resulting from clearly unreasonable behaviour on the part of the plaintiff will be adjudged to flow from that behaviour, and not from the breach. Where the trustee's breach permits the wrongful or negligent acts of third parties, thus establishing a direct link between the breach and the loss, the resulting loss will be recoverable. Where there is no such link, the loss must be recovered from the third parties.”[84] F.6 Account and election 97. Before leaving this discussion of the applicable principles, an incidental issue ought to be disposed of. As part of its cross-appeal, one of the plaintiff’s grounds of appeal involves the complaint that the Courts below had erred in law by overriding the plaintiff’s election in favour of an immediate assessment of equitable compensation, compelling it instead to pursue separate proceedings involving the taking of an account. 98. It falls to be considered later in this judgment whether a direction that an account be taken is necessary or justified. However, for the reasons given by Lord Millett NPJ in his judgment which I have had the benefit of reading in draft, the aforesaid ground of appeal proceeds on the mistaken premise that an order for the taking of an account and an award of equitable compensation are inconsistent remedies requiring and entitling the plaintiff to make an election between the two. 99. As Lord Millett NPJ points out, they are not mutually inconsistent. In a case like the present, where the account is aimed at ascertaining the true position between the fiduciary and the beneficiary, “... it can be regarded as no more than a procedure ancillary to the ascertainment of other rights”.[85] In some cases, they may cumulatively be invoked, seeking first an account and then substantive relief. In other cases, an account may be considered unnecessary and the Court may directly award equitable compensation. It follows that no question of election arises and that ground of appeal requires no further discussion. G. The defendant’s appeal G.1 The defendant’s arguments 100. Mr Wright seeks to argue that the intended acquisition of the third tranche shares involved merely a loan by Mr Woods and his companies to the defendant and Axdale, creating a debt but no fiduciary duty. He submits that Mr Woods’ transfer of the €50 million (equivalent to £35,790,980.67) and the additional £5,949,994.00 to the BLP trust account were by way of loan, enabling Axdale to purchase TSE shares for its own account and then to re-sell the same to Momentum who would hold them for the benefit of the plaintiff. He argues that once the money was credited to the BLP trust account, it became part of Axdale’s general property, with Mr Woods and the plaintiff retaining no beneficial interest. He argues that in law, Axdale was entitled thereafter to apply the money as it saw fit. 101. Mr Wright submits that it was therefore a purely commercial relationship and if the plaintiff considers the arrangement in any way unsatisfactory, it only has itself to blame for failing adequately to protect itself contractually. The defendant accepts that, as he puts it, Mr Woods and his companies “overpaid” Axdale who consequently owed them £4,823,768.51, a sum recoverable at common law as a debt and which, being the amount of the interim payment ordered by the Court of Appeal to be paid to the plaintiff, is a debt which the defendant has already discharged upon compliance with that order. G.2 Not a loan 102. In my view, the suggestion that the transfer of the funds was by way of loan is hopelessly at odds with the evidence and contrary to the concurrent findings of the Courts below. 103. The facts set out in Section A of this judgment make the “loan” suggestion wholly untenable. Far from Mr Woods permitting the transferred funds to form part of the defendant’s general assets, he stipulated that they should be held in a separate client account maintained by BLP “for Momentum Limited/Assanzon”. In contravention of those instructions, the defendant designated the account as an Axdale account and fraudulently reported to Mr Woods that a Momentum account had been created, producing statements purportedly from BLP apparently showing the account to be held in the name of Momentum as their client. Axdale was never permitted to use the money to buy TSE shares for its own account and then to re-sell them to Momentum. This was implicitly acknowledged by the defendant when he paid up £2,154,328.00 in settlement of the claims against him for secret profits made by Axdale in charging Momentum more than he had actually paid for the first and second tranches of shares. The defendant, himself an agent, used Axdale as his vehicle for obtaining the shares. Axdale did not deal with Momentum as principal at arm’s length. 104. The defendant was clearly acting as agent for Mr Woods and his companies in relation to the purported acquisition of the third tranche shares. In the communications set out above, the defendant falsely reported to Mr Woods that the 1,777,700 shares had been acquired on his behalf. The defendant said “you hold 8.78% of [TSE] and if all share options are exercised, you will hold 7.98%”. He gave a similar account to Mr Levene. 105. The Courts below concurrently found[86] that Mr Woods and his companies had entrusted to the defendant funds comprising the sums of €50 million (equivalent to £35,790,980.67) and £5,949,994.00 paid into the BLP trust account for the express and sole purpose of purchasing TSE shares on behalf of Mr Woods and the plaintiff, the aim being to acquire 10% of TSE’s share capital. As the Appeal Committee noted in Chinachem Charitable Foundation Ltd v Chan Chun Chuen,[87]the Court will not embark on a review of such concurrent findings unless a basis is shown for thinking that there has been a miscarriage of justice or a material violation of some principle of law or procedure, in other words, unless there is good reason to believe that the review will lead to reversal of the findings in question. The defendant has not even begun to show such a basis. G.3 Fiduciary obligations 106. On the basis of the crucial findings summarised in Section B, the conclusions reached by Stone J and the Court of Appeal[88] that the defendant was in breach of his fiduciary duties owed to the plaintiff are unassailable. 107. In taking charge of the funds entrusted to him and agreeing to undertake the intended acquisitions, the defendant became trustee of the funds to apply them for the aforesaid purpose and undertook fiduciary obligations to act in the interests of the beneficial owners of Momentum (principally the plaintiff) in the acquisition. As the plaintiff initially held 90.63% and from 2004, held 100%, of the shares in Momentum, I shall for brevity refer simply to the plaintiff and omit reference to the minority interests. 108. Mr Wright submits that there could not be a fiduciary or trust relationship because his client and Mr Woods had never mutually intended to enter into a trust relationship. But the absence of a subjective intention to create a trust is irrelevant in a case like the present. As Lord Millett pointed out in Twinsectra Ltd v Yardley: “A settlor must, of course, possess the necessary intention to create a trust, but his subjective intentions are irrelevant. If he enters into arrangements which have the effect of creating a trust, it is not necessary that he should appreciate that they do so; it is sufficient that he intends to enter into them.”[89] The parties clearly agreed that the money was to be used exclusively for the aforesaid purpose and no other. 109. Mr Wright also seeks to argue that there could not have been a fiduciary relationship because the defendant did not exercise any discretionary powers. He relies on Hospital Products where Mason J stated: “The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense.”[90] 110. That argument is unsound. As pointed out above,[91] Mason J’s statement must be taken in its context, which was a discussion of the relationship between a distributor and its supplier, where the powers and discretions conferred on the distributor arguably created vulnerabilities in the supplier, possibly placing the distributor in what Brennan CJ referred to as an “ascendancy” situation. As we have seen, discretionary powers do not feature in many fiduciary relationships. In the present case, the crucial fact is that the defendant was entrusted with funds for the specific purpose of acquiring TSE shares as agent for Momentum and the plaintiff (and Momentum’s other beneficial owners). He was trustee of the money and a fiduciary in managing the acquisition. 111. The defendant therefore came under a duty when pursuing the share acquisition to act in good faith; not make a profit out of his trust; not to place himself in a position where his duty and his interest might conflict; and not to act for his own benefit without the informed consent of his principal. G.4 Breach of his fiduciary obligations 112. He plainly breached some or all of those fiduciary duties. On 14 October 2003, the defendant caused £5,463,508.46 to be transferred out of the BLP trust account to the Axdale Swiss account claiming that the money was used to purchase the third tranche shares.[92] He now admits that those shares were never purchased, having repeatedly lied to Mr Woods in reporting that he had duly bought 1,777,700 shares from Samos and Caledonian at the price of £3.11 per share. As we have seen, in without prejudice negotiations, he went further and, through his solicitors, claimed to have sold 414,700 of those shares to Softbank, realising £5,474,247.35 and leaving a balance of 1,355,300 TSE shares.[93] All of this was false and the defendant has given no explanation of what actually became of £5,463,508.46 extracted from the trust fund on 14 October 2003. Concurrent findings were made that he had used those funds for his own entirely unauthorized purposes.[94] 113. The defendant therefore wilfully defaulted in the performance of his fiduciary obligation to acquire the third tranche shares on behalf of the plaintiff, having fraudulently extracted £5,463,508.46 from the trust fund. 114. The defendant seeks to argue that there was no breach or that the consequential loss allegedly suffered by the trust fund would have occurred even without a breach because, as Mr Wright sought to submit, it was impossible to acquire 1,777,700 TSE shares so that there was no way for the defendant to perform his aforesaid obligation. 115. That argument is put two ways. First, it is suggested that by reason of the Momentum undertaking, the board of TSE would have vetoed the acquisition of such a block of shares. There are concurrent findings rejecting that proposition as a matter of fact.[95] Mr Wright provides no basis for reviewing those findings. 116. Secondly, Mr Wright seeks to argue that, “there is no evidence that it would have been possible to acquire any additional shares”. As we have seen, where there is (as in the present case) evidence of a breach of fiduciary duty causing loss, equity places the onus on a defaulting fiduciary to prove that such loss would have occurred in any event even if no breach had occurred. It is therefore not good enough for the defendant to say there was no evidence that the shares could be bought: it is up to him to show that no purchase was possible. He had consistently and convincingly represented to Mr Woods that he had successfully acquired the relevant parcel of shares. Indeed, the evidence indicates that the availability of sellers was a function of the price offered, so that the suggestion that no shares could have been obtained is implausible. 117. In any event, this version of the impossibility argument was neither pleaded, nor supported by evidence nor put in cross-examination to the plaintiff’s witnesses, including Mr Levene who might have been well-placed to answer questions about the availability of such shares. In such circumstances, the Court should decline to entertain this impossibility argument. 118. It follows that the defendant’s appeal must be dismissed. I turn next to the question of relief which is the subject-matter of the plaintiff’s cross-appeal. H. The plaintiff’s cross-appeal as to the remedy 119. The relief granted by the Courts below and the Orders now sought by the plaintiff have been discussed.[96] The issue for the Court is whether, as the plaintiff contends, it should now make an immediate award of equitable compensation against the defendant on a wilful default basis (giving credit for the £4,823,768.51 amount received); or whether the Courts below were right to order the taking of an account by a Master or Judge, with the plaintiff having for now to content itself with the interim payment. This raises three questions: (i) Is the remedy of equitable compensation available in the present case? (ii) If so, what is the proper measure of such compensation? (iii) Can the Court (and should it) make an immediate monetary award on the basis of the materials presently available? H.1 Is equitable compensation available? 120. The applicable principles have been set out.[97] In the present case, the defendant’s breach of duty has clearly caused loss to the trust estate both because he extracted £5,463,508.46 for his own unauthorised purposes; and because of his wilful default in the purchase of the 1,777,700 third tranche shares. 121. As we have seen, the Court approaches the causal connection between the breach and loss with “the full benefit of hindsight” at the time of judgment and is therefore able to take into account the fact that if there had been no wilful default, the 1,777,700 shares would have been acquired; that the plaintiff would have been able to offer the entire parcel to Softbank; and that some 746,634 (42%) shares would have been taken up at the offer price of £13.2005 per share, yielding proceeds of £9,855,942.10. The Court is also able to take account of any available evidence as to the value at which the balance of the hypothetical parcel of 1,777,700 shares could have been realised. 122. It follows that ordering the defendant merely to restore to the trust fund the £5,463,508.46 extracted on 14 October 2003 would not adequately reflect the loss suffered by the trust estate. The appropriate Order is for the defendant to pay equitable compensation on a wilful default basis with a view to placing the trust estate in the position which it would have occupied if he had duly performed his duty of acquiring the third tranche shares on the plaintiff’s behalf. H.2 What is the proper measure of equitable compensation? 123. The exercise of quantifying loss on a wilful default basis necessarily hypothetical. In undertaking that exercise, the Court is assisted by techniques developed by the courts of equity, reflecting the stern view taken of defaulting fiduciaries. Thus, as Lord Millett writing extra-judicially[98] points out, a fiduciary is precluded from setting up a case inconsistent with the obligations of his fiduciary position.[99] His Lordship was dealing with fiduciaries who had taken bribes and gave the example of Fawcett v Whitehouse[100] in which a defendant, negotiating a lease for an intended partnership, received £12,000 as a bribe from the intending lessors. Sir John Leach V-C stated of that defendant: “... he was bound to obtain the best terms possible for the intended partnership ... and all he did obtain will be considered as if he had done his duty and had actually received the £12,000 for the new partnership, as upon every equitable principle he was bound to.” 124. That approach should be adopted in the present case. The defendant was bound as a fiduciary, to use the funds entrusted to him to acquire the third tranche shares as agent for the plaintiff. Having withdrawn £5,463,508.46 on 14 October 2003 allegedly for that purpose and having claimed on 19 January 2004 that it was used to acquire 1,777,700 TSE shares at £3.11 per share for the total cost of £5,546,424.00, he is now precluded from setting up a case inconsistent with his having carried out his obligation. In computing equitable compensation, the Court is entitled to treat him as if he had indeed purchased 1,777,700 shares at a total cost of £5,546,424.00, as he had claimed. 125. This means that the Court notionally treats the transfer of £5,463,508.46 out of the BLP trust account on 14 October 2003 as if it had been authorised and the trust fund as notionally having acquired 1,777,700 TSE shares at £3.11 per share in January 2004. 126. Next, taking account of the subsequent Softbank offer, the Court assumes (as the evidence plainly justifies) that the plaintiff would have put up the whole parcel of 1,777,700 shares for sale to Softbank at the offer price and that 746,634 (42%)[101] of those shares would have been taken up by Softbank, yielding £9,855,942.10 for the trust. The fund’s deprivation of those proceeds constitutes the first element of equitable compensation properly claimable. 127. What realisable value should the Court attribute to the hypothetical balance of 1,031,066 TSE for the purposes of equitable compensation? As we have seen,[102] at the trial, the plaintiff invited Stone J to value those shares at the sum of £11,568,560.00 and to order payment thereof as the amount : “... that should have accrued from the sale of the apparently remaining 1,031,066 TSE shares, even with a 15% discount to the Softbank price ‑ which latter percentage derives from Mr McClellan’s evidence wherein Mr Hall, through his solicitors, had stated that he was negotiating with the registered shareholders of the remaining TSE Trust Shares for them to purchase those shares at a discount of 10 to 15% of the price paid by Softbank Corporation, namely £11.88 or £11.22 per TSE share.”[103] 128. His Lordship declined to make such an order, no doubt influenced, as we seen,[104] by his uncertainty as to “precisely how many TSE shares now actually remain to be reclaimed by the plaintiff”.[105] The Court of Appeal noted that uncertainty, observing that Stone J had made “no specific finding in the Judgment that the 1,777,700 TSE shares were acquired for the benefit of the plaintiff”. Moreover, the Court of Appeal had also ruled that evidence deriving from without prejudice negotiations – which would presumably include the evidence of Mr McClelland (the plaintiff’s solicitor) referred to by Stone J – was inadmissible. 129. Such uncertainty no longer exists as it is now accepted by both parties that no third tranche shares were ever purchased. However, even if Mr McClelland’s evidence were to be relied on, it only relates to negotiations rather than a price achieved on a sale. At the hearing, Mr Barlow was asked what sort of evidence of a realisable price for TSE shares one might expect to have been produced if Stone J had directed an inquiry into that question at the trial. In response, the plaintiff tendered an affidavit made by Mr Barlow’s instructing solicitor, Mr David John Hoare, stating that TSE had been publicly listed under the name “Betfair” on 22 October 2010 and that on the date on which Stone J’s judgment was delivered (25 February 2011), the closing price of the share was £8.84 (with a closing price on 7 October 2013 of £9.71). This information is a matter of public record, available from the London Stock Exchange. On that basis, Mr Barlow invited the Court to assess equitable compensation in relation to the balance of 1,031,066 TSE shares in the sum of £9,114,623.44 (£8.84 x 1,031,066). H.3 Should an immediate award be made? 130. In the light of the abovementioned developments in this Court, I do not consider it necessary or desirable for an overall accounting exercise on the lines ordered by Stone J and confirmed by the Court of Appeal to be undertaken. 131. The exercise is unnecessary because the parties have each put forward their own account of the funds paid into, withdrawn from and repaid to the BLP trust account. The differences between them can now readily be identified and dealt with on principle. 132. Thus, proceeding on the basis that his client was not a fiduciary, but that he had been “overpaid” by Mr Woods and the plaintiff, Mr Wright provided the Court with the following table: Summary of Funds Received and Returned By Axdale Overseas Corporation 133. Mr Wright's schedule therefore shows a deficiency of £4,823,768.51 which, as previously discussed,[106] he submits is a debt which the plaintiff has already repaid. 134. There is no dispute as to the figures shown in the Table for the funds received, funds returned and stamp duty. The plaintiff, however, submits that the following adjustments are required, namely: (a) that the sums for “BLP fees” should be taken out since such fees are undocumented and likely to be attributable at least in part to other services provided by BLP to the defendant; (b) that the sum of £547,715.51 representing interest credited to the BLP trust account as shown in the BLP Ledger, should be treated as part of the trust fund to be accounted for; (c) that instead of taking the sum of £2,154,328.00 as the amount repaid to the fund as a result of the Momentum settlement, the sum of £1,978,903.68 should be used since that reflects the plaintiff’s share of the settlement, leaving out the share of the minority interests; and, (d) that, for the purposes of calculating equitable compensation, the defendant should be credited with having properly applied £5,546,424.00 towards purchase of 1,777,700 shares (and debiting the fund in the like amount). 135. In my view, those adjustments are all justified with the consequence that only a small deficiency in the sum of £37,054.69 remains unaccounted for. Questions about unauthorised extractions and repayments have therefore effectively fallen away, with the focus now being upon the correct award for equitable compensation on the wilful default basis. 136. In the preceding discussion,[107] I have concluded that the Court should hold that the first element of such award should be in the sum of £9,855,942.10. The outstanding question is whether the Court should accept the evidence tendered and award equitable compensation based on the traded price of £8.84 per share, producing a loss in respect of the hypothetical balance of 1,031,066 TSE shares in the sum of £9,114,623.44. 137. Plainly, gaps exist in the evidence concerning use of the £8.84 figure as the realisable price of the hypothetical balance. However, it would plainly now be very difficult to find a better basis for valuing such shares. It is almost 10 years since the defendant reported that he had acquired the third tranche shares and some seven and a half years since the Softbank offer closed. Three years ago the company became a publicly listed company with a new and changing set of shareholders. Attempts to ascertain what some potential buyer would have been prepared to pay for the hypothetical shares at this remove in time, especially given the changed status of the company would almost certainly involve no more than guesswork. Having sent false reports to his principals, the defendant concealed his wrongdoing and lulled them into a false sense of security in respect of the third tranche shares over several years. If his principals had realised that they were being lied to, they would not have left the acquisition and subsequent sale to Softbank, or any future sales of TSE shares in the defendant’s hands. After his wrongdoing came to light, the defendant has consistently been obstructive in making discovery and providing relevant information. He was wholly disbelieved by the trial judge. With such a history, I can well understand why the plaintiff views with dismay the prospect of further proceedings for accounts and inquiries. 138. The evidential difficulties now faced by the Court form part of the consequences flowing from the defendant’s original wrongdoing as a defaulting fiduciary. In such circumstances, the Court adopts a robust approach. This was explained by Handley JA in the New South Wales Court of Appeal in Houghton v Immer,[108] where equitable compensation was awarded in a case involving equitable fraud (but not a breach of fiduciary duty), as follows: “The defendants are entitled to a set-off for the actual cost of the improvements, but there was no evidence of this cost. The accounting issue would normally be referred to a Master but the trial was not conducted on this basis. The defendants would have great difficulty in such an enquiry, since no attempt appears to have been made to keep separate records of the cost of constructing the improvements on the common property. ... At this stage the Court should only remit the matter to a Master as a last resort, if no other course is fairly open. The defendants, having improved common property without lawful authority, and attempted to effect a fraud on the minority, are wrongdoers, and their failure to keep and produce proper accounts of their actual expenditure on the common property has made it difficult to assess the compensation due to the plaintiff. Compare Armory v Delamirie (1722) 1 Stra 505. ... In my judgment the Court should assess the compensation in a robust manner, relying on the presumption against wrongdoers, the onus of proof, and resolving doubtful questions against the party ‘whose actions have made an accurate determination so problematic’. See WP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 499 at 508.” 139. Adopting that approach, in my view, the Court ought to make an immediate award, calculating the loss to the trust fund in connection with the hypothetical balance of 1,031,066 shares using the traded price of £8.84 per share and robustly assuming that the listed shares traded are essentially the same as the TSE shares which the defendant should have purchased on behalf of those beneficially entitled. £8.84 is a figure significantly lower than the over-subscribed price of £13.2005 offered by Softbank and also significantly lower than the price of £11.22 proposed but not accepted below. Conclusion 140. I would accordingly allow the plaintiff’s appeal and make an immediate award of equitable compensation in the total sum of £18,970,565.54 (£9,855,942.10 + £9,114,623.44). I would add to that sum, the amount of the deficiency of £37,054.69 in the BLP trust account, taking the total amount of the award to £19,007,620.23. Giving credit for the £4,823,768.51 already paid, I would Order the defendant within 21 days from the date of this judgment to pay to the plaintiff the sum of £14,183,851.72 together with interest at the rate of 2% over the Bank of England base rate from the date of the Writ until the date of this judgment and thereafter at the Hong Kong judgment rate. 141. The interest payable as aforesaid is simple interest. On the footing that equitable compensation is to be awarded on the basis explained above, there is no longer any ground for ordering compound interest. In Westdeutsche Bank v Islington LBC,[109] Lord Browne-Wilkinson explained that compound interest is normally only ordered where the award is in lieu of an account of profits improperly made by the trustee. His Lordship cited Lord Hatherley LC in Burdick v Garrick,[110] who stated: “... the court does not proceed against an accounting party by way of punishing him for making use of the plaintiff's money by directing rests, or payment of compound interest, but proceeds upon this principle, either that he has made, or has put himself into such a position as that he is to be presumed to have made, 5 per cent, or compound interest, as the case may be.” 142. Thus, compound interest may be appropriate where the trustee or fiduciary has misappropriated funds which the Court assumes would have been used by him to earn profits and, instead of ordering an account of those profits, orders him to pay compound interest on the sum extracted. Where the fiduciary is ordered to pay equitable compensation on the basis of gains which the Court finds would have accrued to the trust estate if he had duly performed his fiduciary duty, it would be double-counting and punitive to order the amount of equitable compensation to carry compound interest. 143. In summary, I would make the following Orders, namely:- (a) That the defendant’s appeal be dismissed; (b) That the plaintiff’s appeal be allowed and the Orders of the Judge and the Court of Appeal be set aside and, that in place thereof, that within 21 days from the date of this judgment, the defendant do pay to the plaintiff the sum of £14,183,851.72 together with simple interest thereon at the rate of 2% over the Bank of England base rate from the date of the Writ until the date of this judgment and thereafter at the Hong Kong judgment rate; (c) That by way of Order nisi, the defendant do pay the plaintiff’s costs here and below, certified fit for two counsel throughout; and, (d) That any submissions as to costs should be made in writing and lodged within 14 days of the date of this judgment, in default of such submissions, the Order nisi do stand as absolute without further order. Mr Justice Litton NPJ: The Primary Focus of the Case 144. As the trial judge Stone J observed (§99) the “primary focus” of this case is the third tranche of 1,777,700 TSE shares: shares which the defendant claimed to have bought for Mr Woods for £5,546,424 towards the end of 2003, using money remitted by Mr Woods for that purpose. The Facts 145. From the very beginning, the defendant held the money on Mr Wood’s behalf and was accountable to him for its use. The only purpose for which the money was authorized to be used was the purchase of the “third tranche” of TSE shares. 146. The defendant wove such a web of obscurity round the use of the money that the trial judge had great difficulty to separate fact from fiction. 147. The defendant at first said that the shares which he had bought for Mr Woods were registered in the names of Samos Investments Ltd and Caledonian Heritable Investments Ltd, but held in trust for him through a “Hall of Fame Trust” registered in the Channel Islands which the defendant had allegedly established for the purpose, with a company called Hoflim Limited interposed as nominee for Samos and Caledonian. He persisted in this elaborate lie for some time, and resisted all attempts by Mr Woods for clarification. At trial, many years later (September 2010), he changed his story and asserted in the witness box that Samos and Caledonian were not prepared after all to “complete the transaction and that, as a consequence, no beneficial ownership of the tranche of 1,777,700 shares was acquired for the plaintiff” (§110 of Stone J’s judgment). This led the judge to adopt Mr Barlow SC’s trenchant remark that the defendant had woven such a tissue of lies that he “could not keep track of his own lies”. 148. The evidence adduced at trial established this inescapable fact: the defendant had misappropriated large sums belonging to Mr Woods, held in the account of the London solicitors: Berwin Leighton Paisner (BLP). At §99 the judge said that, given the “overwhelming merit of the plaintiff’s case”, he was surprised that the parties had not settled the issues arising out of the third tranche in “like manner” as the settlement of the dispute stemming from the “second tranche”. 149. By late 2005 Mr Woods decided that he had to “get to grips” with Mr Hall concerning the third tranche (§46 Stone J’s judgment). Things came to a head in early 2006 when a Japanese corporation called Softbank made a general offer to the TSE shareholders to purchase their shares. The defendant claimed that, in consequence of this, 414,700 shares were sold, yielding £5,474,247.35, for which Stone J ordered interim payment (reduced by the Court of Appeal to £4,823,768.51 for reasons not relevant to this judgment). 150. It seems also to have been an established fact that Softbank’s offer had in fact been scaled back to 42% of TSE’s total shareholdings, at £13.2005 per share. Hence, if the defendant had acted properly, a total of 746,634 would have been sold, yielding £9,855,942.10, leaving a balance of 1,031,066 shares. The Substantial Issue 151. It is patently obvious, on the judge’s findings, affirmed by the Court of Appeal, that the defendant had committed gross breaches of trust. He had misappropriated funds to his own use: funds entrusted to him for a specific purpose. The only substantial issue on appeal is the appropriate remedy. Equitable Relief 152. In its pleaded case, the plaintiff claimed a sum of £21,424,503 in equitable compensation comprising the following: (a) the £9,855,942 referred to in para 150 above, and (b) a further sum of £11,568,560 which should have accrued from the sale of the remaining 1,031,066 shares. This sum was arrived at in this way. Mr McClellan, a solicitor acting for the plaintiff, was told by the defendant that he had been negotiating with the registered shareholders of TSE for them to purchase those remaining shares at a discount of 10 to 15% of the price paid by Softbank, namely £11.88 or £11.22 per share. The figure of £11,568,560 was computed from the lesser sum. Restitution 153. This approach to equitable relief treats the defendant as if he had carried out his fiduciary duties and had purchased the 1,777,700 shares at £3.11 per share as he claimed all along he had, and to compute the plaintiff’s loss on that basis. 154. The juridical foundation for this approach to equitable compensation is what Lord Haldane LC in Nocton v Ashburton [1914] AC 932 at 946 called “the old bill in Chancery to enforce compensation for breach of fiduciary obligation.” The essence of the remedy is restitution: To put the trust estate back as far as possible as if the breach had not occurred. This is explained by James and Baggallay LJJ in Ex parte Adamson [1878] 8 Ch D 807 at 819 in this way: “The Court of Chancery never entertained a suit for damages occasioned by fraudulent conduct or for breach of trust. The suit was always for an equitable debt or liability in the nature of debt. It was a suit for the restitution of the actual money or thing, or value of the thing, of which the cheated party had been cheated” (emphasis added) 155. Stone J in effect went some way down this route when he gave interim judgment for £5,474,247.35 (see para 149 above) being the value of the 414,700 shares supposedly sold to Softbank. This was to take the defendant’s assertion at face value: that he had sold those 414,700 shares out of the “third tranche” which he had previously bought, yielding that sum which the defendant had never paid over to the plaintiff. 156. The next step in the computation is more problematic, though still based upon facts as found by the judge. The judge accepted the evidence that there was a general offer by Softbank to the TSE shareholders in March 2006, and that the offer had been scaled back to 42% of the total shareholdings, at £13.2005 per share. As to this the judge said: “… if the sale of the entire parcel of 1,777,700 shares had been attempted (which it appears it was not), a total of 746,634 of such shares would have been realized at the offer price, thereby yielding proceeds of £9,855,942.10.” (§50) Nothing in the evidence suggests that the plaintiff would not have authorized the placing of the entire third tranche to Softbank at the offer price. The sum representing the value of the shares would then not have been the figure in para 155 above, but the higher figure of £9,855,942.10, by way of equitable compensation. 157. What remains is the balance of 1,031,066 which would have remained in the defendant’s hands. 158. How is the value of this balance of 1,031,066 shares to be computed: shares of which the cheated party had been cheated, adopting the language in Ex parte Adamson (supra)? 159. As to this, there is no easy answer. The figure of £11,568,560 appearing in the plaintiff’s statement of claim is based upon nothing more than surmise: what the defendant had indicated that the other shareholders might have been willing to pay (as opposed to what Softbank had actually paid for TSE shares in March 2006). But justice demands that the plaintiff be compensated nevertheless, for he had plainly suffered considerable loss. I would accordingly adopt this approach: The court aims to do practical justice, not perfect justice. In computing equitable compensation, the broad circumstances of the case, and its history, must be taken into account. The plaintiff embarked on its journey to seek justice in our courts back in 2006. From day one the defendant was an accounting party. Yet he baulked the plaintiff at every turn. In the words of the judge he “bobbed and weaved”, “evaded and dissembled” (§113); he was obstructive in making discovery and deceptive in giving information; contempt proceedings to bring him to account had ended in failure. The events giving rise to this action go back ten years. No inquiry by a Master, sometime in the future, can hope to arrive at a fair figure, better than what this Court can achieve today. Such an inquiry will doubtless face more obfuscation and delay. To do justice, these proceedings must finally be brought to an end. Now. Evidence of Value 160. Before us, evidence was tendered that at the date of Stone J’s judgment, TSE’s shares, then publicly listed under the name of Betfair, was traded at about £8.84 per share. This is a matter of public record. If this might properly be regarded as the value to be placed on the remaining 1,031,066 shares, that would yield a figure of £9,114,623.44 by way of equitable compensation. 161. Relevance not being an issue, what weight might properly be given to this piece of evidence? Plainly its probative value is not ideal: It is based upon the assumption that Betfair, publicly listed shortly after the trial ended but before Stone J gave judgment (in February 2011), was in substance the same company, as regards assets and liabilities, as TSE before the public listing. But, realistically, can better evidence as to value of the remaining 1,031,066 shares be obtained? Assume that the matter were remitted to a Master for further inquiry, how might it progress? Betfair is not a party to these proceedings. Would Betfair, now a publicly listed company in England, be willing to disclose its historical records to the plaintiff’s solicitors, when it plainly has no obligation to do so? I agree with Ribeiro PJ (whose draft judgment I had the privilege of reading) that the Court should adopt a robust approach. Conclusion 162. The evidence tendered to this Court is the best evidence of value that can be obtained, and at the relevant time. I would accordingly hold that equitable compensation in relation to the remaining 1,031,066 shares be computed in the sum of £9,114,623.44. This makes it a global sum of £18,970,565.54. 163. Further fine-tuning to the award is needed, as explained in paras 140-142 of Ribeiro PJ’s judgment. The sum of £37,054.69 must be added to the award, taking the total to £19,007,620.23. 164. I concur in the orders proposed by Ribeiro PJ. Mr Justice Bokhary NPJ: 165. This is clearly a case in which justice is to be achieved by making an immediate award of compensation rather than by ordering any account or inquiry. Moreover, the account ordered at first instance and upheld on intermediate appeal is unworkable. On the facts and figures found by the trial judge, an appropriate award can be made in the sum at which Mr Justice Ribeiro PJ has arrived. For the reasons which he and Lord Millett NPJ give, I would allow the appeal in the terms which he proposes. Lord Millett NPJ: 166. There are traces in the arguments both here and below of the proposition that account and equitable compensation are alternative and inconsistent remedies and that a plaintiff must elect between them. It is only right to say at once that this is not the ground on which either court below ordered an account when the plaintiff asked for equitable compensation; but since the proposition is advanced from time to time it is appropriate to explain why it is mistaken. 167. It is often said that the primary remedy for breach of trust or fiduciary duty is an order for an account, but this is an abbreviated and potentially misleading statement of the true position. In the first place an account is not a remedy for wrong. Trustees and most fiduciaries are accounting parties, and their beneficiaries or principals do not have to prove that there has been a breach of trust or fiduciary duty in order to obtain an order for account. Once the trust or fiduciary relationship is established or conceded the beneficiary or principal is entitled to an account as of right. Although like all equitable remedies an order for an account is discretionary, in making the order the court is not granting a remedy for wrong but enforcing performance of an obligation. 168. In the second place an order for an account does not in itself provide the plaintiff with a remedy; it is merely the first step in a process which enables him to identify and quantify any deficit in the trust fund and seek the appropriate means by which it may be made good. Once the plaintiff has been provided with an account he can falsify and surcharge it. If the account discloses an unauthorised disbursement the plaintiff may falsify it, that is to say ask for the disbursement to be disallowed. This will produce a deficit which the defendant must make good, either in specie or in money. Where the defendant is ordered to make good the deficit by the payment of money, the award is sometimes described as the payment of equitable compensation; but it is not compensation for loss but restitutionary or restorative. The amount of the award is measured by the objective value of the property lost determined at the date when the account is taken and with the full benefit of hindsight. 169. But the plaintiff is not bound to ask for the disbursement to be disallowed. He is entitled to ask for an inquiry to discover what the defendant did with the trust money which he misappropriated and whether he dissipated it or invested it, and if he invested it whether he did so at a profit or a loss. If he dissipated it or invested it at a loss, the plaintiff will naturally have the disbursement disallowed and disclaim any interest in the property in which it was invested by treating it as bought with the defendant’s own money. If, however, the defendant invested the money at a profit, the plaintiff is not bound to ask for the disbursement to be disallowed. He can treat it as an authorised disbursement, treat the property in which it has been invested as acquired with trust money, and follow or trace the property and demand that it or its traceable proceeds be restored to the trust in specie. 170. If on the other hand the account is shown to be defective because it does not include property which the defendant in breach of his duty failed to obtain for the benefit of the trust, the plaintiff can surcharge the account by asking for it to be taken on the basis of “wilful default”, that is to say on the basis that the property should be treated as if the defendant had performed his duty and obtained it for the benefit of the trust. Since ex hypothesi the property has not been acquired, the defendant will be ordered to make good the deficiency by the payment of money, and in this case the payment of “equitable compensation” is akin to the payment of damages as compensation for loss. 171. In an appropriate case the defendant will be charged, not merely with the value of the property at the date when it ought to have been acquired or at the date when the account is taken, but at its highest intermediate value. This is on the footing either that the defendant was a trustee with power to sell the property or that he was a fiduciary who ought to have kept his principal informed and sought his instructions. 172. At every stage the plaintiff can elect whether or not to seek a further account or inquiry. The amount of any unauthorised disbursement is often established by evidence at the trial, so that the plaintiff does not need an account but can ask for an award of the appropriate amount of compensation. Or he may be content with a monetary award rather than attempt to follow or trace the money, in which case he will not ask for an inquiry as to what has become of the trust property. In short, he may elect not to call for an account or further inquiry if it is unnecessary or unlikely to be fruitful, though the court will always have the last word. 173. In the present case the trial judge ordered accounts and enquiries because he considered that the evidence was insufficient to enable him to quantify the amount of compensation to which the plaintiff was entitled to be determined with any degree of accuracy, and his decision was affirmed by the Court of Appeal. This was an exercise of the court’s discretion and as such is one which should not lightly be overturned. But the question is a procedural one and this court is in as a good a position as the trial judge to reach a decision. 174. I agree with Ribeiro PJ and for the reasons given by him that there was more evidence before the court than the courts below have given credit for, and that further accounts and enquiries are unlikely to be fruitful. After this time the number and cost of shares which the defendant ought have acquired and falsely said that he had acquired is little more than informed guesswork and the quality of the answer is unlikely to be improved by further inquiry. Where the absence of evidence is the consequence of the fiduciary’s own breach of duty the court is not without resource, for it can have resort to three principles. First, it may be able to take the fiduciary at his own word and use his falsehoods to establish the facts as if they were true even though they are known to be untrue. Secondly the court is entitled to make every assumption against the party whose conduct has deprived it of necessary evidence. And thirdly the court is entitled to be robust and do rough and ready justice without having to justify the amount of its award with any degree of precision. 175. In my judgment the failure of the courts below to consider whether further accounts and enquiries would be productive is in itself sufficient to enable this court to intervene and substitute its own order. I also agree that the court has sufficient material to justify the orders proposed. Mr Justice Chan PJ: 176. The Court unanimously dismisses the defendant’s appeal, allows the plaintiff’s cross appeal and makes the orders set out in paragraph 143 of Mr Justice Ribeiro’s judgment. (Kemal Bokhary)				Non-Permanent Judge (Lord Millett)				Non-Permanent Judge Mr Barrie Barlow SC and Mr Chan Pat Lun, instructed by Haldanes for the Plaintiff Mr Colin Wright, instructed by Kennedys for the Defendant [1] HCA 2533/2006 (25 February 2011). [2] CACV 54/2011, Tang VP, Kwan and Fok JJA (6 February 2012). [3] CACV 54/2011 (23 and 28 May 2012). [4] Whose shareholders were the same as those initially holding shares in Momentum Limited as indicated below. [5] The Court of Appeal (§20) records that the plaintiff alleged that the defendant had bought 120,000 first tranche shares (prior to the 10:1 split) for £17 per share but had charged Growthline £29.20 per share, making a secret profit of some £1,464,000.00. [6] Judgment §170. [7] Court of Appeal §§72, 88. [8] Judgment §115. [9] Judgment §§36-42. [10] Judgment §§49, 55, 71, 78-79, 103. [11] Stone J §§64 and 65. [12] Judgment §110. [13] Judgment §111. [14] Judgment §101. [15] Judgment §107. [16] Judgment §113. [17] Court of Appeal §81. [18] [2000] WLR 2436 at 2444. [19] [2009] 1 AC 990. [20] Judgment §§123-124 and 127. [21] Judgment §106. [22] Judgment §150. [23] Judgment §151. [24] Court of Appeal §57. [25] Court of Appeal §65. [26] Ibid. [27] Judgment §159. [28] Judgment §156. [29] In Section B. [30] Judgment §167. [31] Erroneously referred to as “the plaintiff”. [32] Judgment §166(d). [33] Discussed in Section B above. [34] In Section B. [35] In Section C above. [36] Court of Appeal §95. [37] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 per Mason J at 96; Breen v Williams (1996) 186 CLR 71 per Dawson and Toohey JJ at 92, per Gaudron and McHugh JJ at 107. [38] (1996) 186 CLR 71 at 82. [39] [1998] 1 Ch 1 at 17. [40] In Permanent Building Society v Wheeler (1994) 14 ACSR 109 at 157. [41] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 98. [42] Maruha Corporation and Muruha (NZ) Ltd v Amaltal Corporation Ltd [2007] NZSC 40 at §21. [43] [1999] 1 NZLR 664 at 686. [44] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 99. [45] (1996) 186 CLR 71 at 137. Sometimes it is put in terms of fiduciary duties arising where a person “acts in a representative character in the exercise of his responsibility”, per Dawson and Toohey JJ at 93. [46] Norberg v Wynrib [1992] 2 SCR 226 at 272. [47] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 102. [48] Breen v Williams (1996) 186 CLR 71 at 82. [49] As recognized in Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371 at 377 per Gibbs CJ. [50] [2009] 23 SCR 247 at §67. [51] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96-97. [52] (1996) 186 CLR 71. [53] Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567 at 581; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 97. [54] [1991] 3 SCR 534 at 543, §61. [55] Ibid. [56] Per Millett LJ in Bristol and West Building Society v Mothew [1998] 1 Ch 1 at 18. [57] BNZ v NZ Guardian Trust Co Ltd [1999] 1 NZLR 664 at 687. [58] Target Holdings Ltd v Redferns [1996] 1 AC 421 at 434 per Lord Browne-Wilkinson. [59] Ibid. [60] BNZ v NZ Guardian Trust Co Ltd [1999] 1 NZLR 664 at 687. [61] Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534 at 552-553. [62] At 554. [63] BNZ v NZ Guardian Trust Co Ltd [1999] 1 NZLR 664 at 687. [64] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 108. [65] Ibid at 109. [66] [1914] AC 932 at 952. [67] At 956-957. [68] Breen v Williams (1996) 186 CLR 71 at 135-136. [69] Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534 at 547 per McLachlin J. [70] Target Holdings v Redferns [1996] 1 AC 421 at 434. [71] Nant-y-glo and Blaina Ironworks Co Ltd v Grave [1878] 12 Ch D 738. [72] Snell’s Equity (32nd Ed, Sweet & Maxwell, 2010) §30-012. [73] In Section F.4 above. [74] Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534 at 556. [75] Who had endorsed the cited passage in Guerin v R [1984] 2 SCR 335. [76] (1966), 84 WN (Pt 1) (NSW) 399. [77] Ian E Davidson, "The Equitable Remedy of Compensation" (1982), 3 Melbourne Univ Law Rev 349. [78] [1999] 1 NZLR 664 at 687. [79] [2007] NZSC 40. [80] At §29 per Blanchard J. [81] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 109. [82] Ibid, Mason J citing a quotation from Page Wood V-C in Frith v Cartland (1865) 2 H & M 417 at 418 ; 71 ER 525 at 526. [83] Ibid. [84] Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534 at 556. [85] Bowstead and Reynolds on Agency (19th Ed, Sweet & Maxwell, 2010) §6-096. [86] Section B. [87] (2011) 14 HKCFAR 798 at §37 and §58, applying Sky Heart Ltd v Lee Hysan Estate Co Ltd (1997-1998) 1 HKCFAR 318. [88] Set out in Sections D.1 and D.2. [89] [2002] AC 164 at §71. [90] Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 96-97. [91] In Section F.2. [92] See Section A.2 above. [93] As indicated above, the question whether the defendant’s solicitors’ statement made in the course of without prejudice negotiations can be treated as an admission on the defendant’s behalf is now no longer a live issue since it is accepted that the facts purportedly admitted are not true. [94] Sections D.1 and D.2 above. [95] Stone J §134-138 and Court of Appeal §73. [96] In Section E above. [97] In Section F.5. [98] “Bribes and secret commissions again” [2012] CLJ 583 at 591. [99] Citing Lord Greene MR in Re Diplock [1948] Ch 465 at 525. [100] (1829) 1 R & M 132 at 149. [101] It is not known whether the offer of 1,777,700 shares would have led to a smaller pari passu take up rate by Softbank. As the case has throughout been argued on the footing that the 42% figure would have applied, it is adopted in this analysis. [102] Section E.1 above. [103] Judgment §159. [104] Sections B and E.1. [105] Judgment §156. [106] Section G.1 above. [107] Section H.2 above. [108] [1997] 44 NSWLR 46. The title of the case cited should apparently be LPJ Investments Pty Ltd v Howard Chia Investments Pty Ltd [No 2] (1990) 74 LGRA 290. [109] [1996] AC 669 at 701. [110] (1869-70) LR 5 Ch App 233 at 241.
Press Summary (English) Press Summary (Chinese) FACV No. 15 of 2012 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 15 OF 2012 (CIVIL) (ON APPEAL FROM CACV NO. 53 OF 2011) (ON APPEAL FROM HCA NO. 2140 OF 2008) Between : Chief Justice Ma: 1. I agree with the judgment of Mr Justice Ribeiro PJ. The appeal should be dismissed. Mr Justice Chan PJ: 2. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 3. The respondents in this appeal are the providers, administrators and managers of a website which hosts one of the most popular internet discussion forums in Hong Kong. The appellants have sued them for libel in respect of defamatory statements posted by certain users of that forum. The defamatory character of those statements is not in dispute. Nor is any libel defence such as privilege or fair comment relevant. What it falls to the Court to consider is the extent to which the providers of an internet discussion platform may be held liable for the posting of defamatory statements by its users. In particular, issues arise as to whether and to what extent such platform providers are in law to be regarded as publishers of the defamatory postings and as to whether the common law defence of innocent dissemination is applicable. A. The actions and the defamatory statements 4. The statements complained of were posted on the forum in three batches and resulted in two actions being brought against the respondents.[1] The first action was brought by Oriental Press Group Limited and Oriental Daily Publisher Limited, the latter company being the registered proprietor, publisher and printer of a popular Chinese daily newspaper known as the “Oriental Daily News”. The former is a publicly listed company which owns the latter. That action is brought against Fevaworks Solutions Limited. 5. Those three companies are also parties to the second action which involves as additional plaintiffs The Sun News Publisher Limited and Mr Ma Ching Kwan. The Sun News Publisher Limited is the registered proprietor, publisher and printer of “The Sun”, another popular Chinese daily within the Oriental group. Mr Ma is the honorary chairman of the listed company. The second action is brought both against Fevaworks Solutions Limited and Alive! Media & Communications Limited, sued jointly as the providers, administrators and managers of the relevant website. I shall refer to the plaintiffs and defendants in the two actions collectively as the appellants and the respondents respectively. 6. The first action,[2] which was commenced on 28 October 2008, relates to two batches of defamatory statements, the first having been posted on 27 and 28 March 2007 (“the 2007 statements”) and the second on 24 October 2008 (“the 2008 statements”). Initially, the action only concerned the 2008 statements which first came to the appellants’ attention on the day they were posted. As Chung J found at the trial, those statements contained the defamatory imputations that the appellants were involved in drug trafficking and money laundering; that they were involved in illegal and immoral activities and were corrupt, illegal, immoral and unethical. The appellants’ solicitors wrote to the respondents on the day that the statements appeared on the website, threatening legal proceedings. The respondents were consequently alerted to the existence of the offending words on 27 October 2008 and removed them from the website some three and a half hours after being so informed. 7. Although posted much earlier, the appellants did not know about the 2007 statements until 14 November 2008 and, on the Judge’s finding, those statements were not brought to the respondents’ attention until 10 December 2008. The 2007 statements related to the murder of a newspaper vendor in 1999[3] and involved the imputation that the appellants had deliberately avoided reporting the trial and conviction of the men arrested and were thus somehow connected with or accomplices in the crime. Those statements were not removed from the website until August 2009, more than eight months after the respondents had been informed of their existence. The cause of action arising out of the 2007 statements was added by amendment to the first action. In the light of the delay in taking down the offending words, the Judge found that there was no defence to the action based on the 2007 statements and awarded the appellants damages of HK$100,000.00 in respect thereof. 8. The second action[4] concerns defamatory postings made on the website on 21 January 2009 (“the 2009 statements”). They contained the imputations that the appellants were founded on drug money, were involved in drug trafficking, money laundering and immoral activities and were corrupt, illegal, immoral and unethical. They also alleged that Mr Ma was a member of a family involved in drug trafficking and a member of or associated with the 14K triad society. Those words were discovered by the respondents on 22 January 2009, about 12 hours after they had been posted and thereupon immediately removed. 9. It is not disputed that the respondents were unaware of the existence of the offending postings until informed of them by the appellants in the case of the 2007 and 2008 statements, and until the respondents themselves discovered the 2009 statements. 10. The two actions against the respondents were tried together by Chung J without a jury. His Lordship’s award[5] regarding the 2007 statements was not challenged by the respondents either in the Court of Appeal or in this Court. However, he dismissed the appellants’ claims in both actions in respect of the 2008 and 2009 statements and his decision was upheld by the Court of Appeal both as to liability and damages.[6] 11. Leave to appeal was granted by the Court of Appeal on the basis that the following question of great general or public importance arises: “In respect of statements defamatory of a third party posted on a commercial website which may be and were accessed by another party, whether the defence of innocent dissemination or any other defence is available to a commercial website host, and if so, under what circumstances may such defence be established or defeated?” B. The forum’s operation 12. The forum was known as the Hong Kong Golden Forum with the URL[7] addresses http://forum7.hkgolden.com and http://forum4.hkgolden.com. The forum had different discussion “channels” catering for various interests of users, including channels concerning computer products and software, games, photography, academic matters, music, finance, sports, entertainment, mobile phones and leisure. The leisure channel[8] was the most popular. Use of the forum was free, the respondents relying on advertising to generate income. 13. Anyone could browse the website but only persons who had registered as members were able to post messages on the forum. Someone wishing to register had to provide his or her name and certain other details, including a traceable e-mail address with a recognised internet service provider (“ISP”), rather than a more anonymous e-mail address from a web-based provider such as Gmail, Hotmail or Yahoo. Membership was also conditional on accepting the rules of the forum which included a prohibition against postings with objectionable content, including defamation, pornography, harassment and infringing intellectual property rights. A person who successfully registered as a member adopted a forum nickname and would automatically be assigned a password. A member who violated the rules might have his membership suspended or terminated. 14. Although the evidence indicated that the details purportedly provided by persons registering as members were very often obviously fictitious, the condition that they provide an e-mail address with a recognised ISP was of some significance. In the present case, the appellants obtained Norwich Pharmacal orders which led to disclosure by the respondents of certain details of the originators of the offending statements including their registered e-mail addresses. It was through those e-mail addresses that the respondents (with the aid of Court orders) were able to trace and identify the persons concerned. The Court was told by Mr Michael Thomas SC[9] that the appellants have reached financial settlements with the originators whom it chose to pursue. 15. There was very considerable traffic on the website. Members of the forum would develop what are known as discussion “threads” involving postings expressing a user’s views on a particular topic, leading to a sequence of postings by other users with their views and comments on that topic. The evidence was that there could be 30,000 users online at any given time and that during peak hours, over 5,000 postings could be made each hour. There was thus no attempt to edit or filter postings before they appeared on the forum. However, two administrators were employed to monitor forum discussion for six to eight hours per day, their job being to remove objectionable content by deleting objectionable postings or discussion threads and to field complaints. Forum postings could not be downloaded and a deleted posting no longer exists in “cyberspace” and can no longer be accessed by anyone. Where infraction of the rules by a user was frequent, the administrators could suspend or terminate that user’s account and so his ability to post messages on the forum. C. Libel and publication 16. The tort of libel has as its aim the protection of a person’s reputation. A person’s reputation consists of what others think of him or her. That reputation is damaged when a defendant publishes or communicates to a third person a defamatory statement (that is, a statement tending to lower someone in the estimation of right-thinking members of society generally[10]) about the person defamed. It follows that the act of publication is a fundamental constituent of the tort. 17. In seeking to decide whether and to what extent the respondents should in law be treated as publishers of the defamatory statements posted on the forum, it is necessary to examine the established common law rules on what constitutes “publication” of a libel. 18. As Isaacs J explained, “To publish a libel is to convey by some means to the mind of another the defamatory sense embodied in the vehicle ...”[11] It is a bilateral act, as was pointed out in Dow Jones & Co Inc v Gutnick: “Harm to reputation is done when a defamatory publication is comprehended by the reader, the listener, or the observer. Until then, no harm is done by it. This being so it would be wrong to treat publication as if it were a unilateral act on the part of the publisher alone. It is not. It is a bilateral act – in which the publisher makes it available and a third party has it available for his or her comprehension.”[12] 19. Until mitigated by the common law defence of innocent dissemination which evolved in the late nineteenth century, liability for publishing a libel was strict and could lead to harsh results. A person was held liable for publishing a libel if by an act of any description, he could be said to have intentionally assisted in the process of conveying the words bearing the defamatory meaning to a third party, regardless of whether he knew that the article in question contained those words. [13] Thus, a textbook published in 1891[14] stated: “The term published is the proper and technical term to be used in the case of libel, without reference to the precise degree in which the defendant has been instrumental to such publication; since, if he has intentionally lent his assistance to its existence for the purpose of being published, his instrumentality is evidence to show a publication by him.” 20. As Abella J pointed out in Crookes v Newton:[15] “... the breadth of activity captured by the traditional publication rule is vast. In R v Clerk (1728), 1 Barn KB 304, 94 ER 207, for example, a printer’s servant, whose only role in an act of publication was to ‘clap down’ the printing press, was found responsible for the libels contained in that publication, despite the fact that he was not aware of the contents (p 207).” 21. While (as in the 1891 text) the traditional rule is sometimes expressed as requiring the publication to a third person to be “intentional”,[16] that reference is generally directed at situations where the defendant who authored the defamation does not intend its publication to a third person but where publication takes place without negligence on his part. Thus, where a defendant’s private diary containing defamatory imputations is lost without negligence on his part and made public by another person or, to take an example given by Lord Esher MR, where “the writer of a letter locks it up in his own desk, and a thief comes and breaks open the desk and takes away the letter and makes it contents known...,”[17] no intentional publication by the author occurs. The requirement of intention in this sense did not narrow the width nor dilute the strictness of the traditional rule. 22. Moreover, publication could (and still can) be established against a person who is vicariously liable for his servants’ acts of publication or for acts of publication which he has authorised. All who participated directly or vicariously in the publication were held jointly and severally liable for the entire damage suffered by the plaintiff, regardless of the degree of responsibility each had for the publication. As Gatley points out: “The person who first spoke or composed the defamatory matter (the originator) is of course liable, provided he intended to publish it or failed to take reasonable care to prevent its publication. However, at common law liability extends to any person who participated in, secured or authorised the publication (even the printer of a defamatory work) though this is qualified by [the common law defence of innocent dissemination]...”[18] “In accordance with general principle, all persons who procure or participate in the publication of a libel, and who are liable therefor, are jointly and severally liable for the whole damage suffered by the claimant.”[19] 23. Thus, under the strict rule, publication of a libel, for instance by a newspaper, meant that the journalist who was the originator of the article; the editor who accepted and prepared it for publication; the printer who set the type and printed it; the wholesale distributor who disseminated it; the newsagents who sold it to the readers; and the newspaper’s proprietor who published it through its employees or agents were all jointly and severally liable for the damage to the plaintiff’s reputation. D. The common law defence of innocent dissemination 24. The strictness of the publication rule plainly called for some relaxation. The common law defence of innocent dissemination was developed to that end. It was a defence which became established in English law as a result of the decisions in Emmens v Pottle[20] in 1886 and Vizetelly v Mudie’s Select Library Limited in 1900.[21] 25. It had previously been well-established that the sale of a newspaper which contained a libel constituted a publication of that libel.[22] The defendants in Emmens v Pottle were newsvendors who were sued for libel on the basis of such a sale. However, the jury gave judgment for the defendant, finding that they did not know and had no reason to suppose that the newspaper sold contained or was likely to contain a libel. On the basis of such findings, Lord Esher MR concluded: “... the case is reduced to this, that the defendants were innocent disseminators of a thing which they were not bound to know was likely to contain a libel. That being so, I think the defendants are not liable for the libel.”[23] 26. That was a robust repudiation of the strictness of the traditional rule, his Lordship adding: “If they were liable, the result would be that every common carrier who carries a newspaper which contains a libel would be liable for it, even if the paper were one of which every man in England would say that it was not likely to contain a libel. To my mind the mere statement of such a result shews that the proposition from which it flows is unreasonable and unjust. The question does not depend on any statute, but on the common law, and, in my opinion, any proposition the result of which would be to shew that the Common Law of England is wholly unreasonable and unjust, cannot be part of the Common Law of England. I think, therefore, that, upon the findings of the jury, the judgment for the defendants is right.”[24] 27. The elements of the defence are usually taken to be as stated in the judgment of Romer LJ in Vizetelly v Mudie’s Select Library Limited,[25] where his Lordship formulated the principles as follows: “The result of the cases is I think that, as regards a person who is not the printer or the first or main publisher of a work which contains a libel, but has only taken, what I may call, a subordinate part in disseminating it, in considering whether there has been publication of it by him, the particular circumstances under which he disseminated the work must be considered. If he did it in the ordinary way of his business, the nature of the business and the way in which it was conducted must be looked at; and, if he succeeds in shewing (1) that he was innocent of any knowledge of the libel contained in the work disseminated by him, (2) that there was nothing in the work or the circumstances under which it came to him or was disseminated by him which ought to have led him to suppose that it contained a libel, and (3) that, when the work was disseminated by him, it was not by any negligence on his part that he did not know that it contained the libel, then, although the dissemination of the work by him was prima facie publication of it, he may nevertheless, on proof of the before-mentioned facts, be held not to have published it. But the onus of proving such facts lies on him, and the question of publication or non-publication is in such a case one for the jury.” 28. In Vizetelly, the defendants operated a circulating library and were sued for lending out and selling copies of a book which, unknown to them, contained a libel on the plaintiff. The defendants pleaded but failed to establish the defence of innocent dissemination since they ought to have known of the libel but had negligently failed to take note of advertisements placed in the trade press by the commercial publishers of the book (who had been successfully sued by the plaintiff) recalling all copies of the book so that the offending page could be replaced. 29. The defence thus has two important features. First, not every person involved in the process of publication can rely on it. It is not available to “the printer or the first or main publisher of a work which contains a libel” but is confined to persons who, in the ordinary course of business, play “a subordinate part in disseminating it”. Secondly, for this second class of persons, it replaces the strict liability rule with a rule which imposes liability on the basis that the person playing the subordinate role knew or ought by the exercise of reasonable care, in the circumstances in which the work came to him or was disseminated, to have known that the article disseminated contained defamatory material. It places the onus on such subordinate disseminators to prove that they did not know that the article contained a libel and that their lack of knowledge was not due to their own lack of care. 30. As Gaudron J pointed out in Thompson v Australian Capital TV Ltd,[26] the defence has been adopted not only in subsequent English cases, but also in Canada, Australia and New Zealand. In some jurisdictions, statutory defences along the same lines have been enacted. Thus in England, Lord McKay of Clashfern LC introducing the bill which became section 1 of the Defamation Act 1996, described it as “a modern equivalent of the common law defence of innocent dissemination”.[27] Hong Kong has not introduced such legislation and the defence which concerns us is that which exists at common law. 31. Although in both Emmens and Vizetelly,[28] it was suggested that successful invocation of the innocent dissemination defence leads to the defendant being deemed not to have published the libel at all, I respectfully consider the better view to be that stated by Duncan and Neill in an earlier edition of their work,[29] noted by Brennan CJ, Dawson and Toohey JJ in their joint judgment in Thompson v Australian Capital TV Ltd,[30] namely, that: “... it would be more accurate to say that any disseminator of a libel publishes the libel but, if he can establish the defence of innocent dissemination, he will not be responsible for that publication.” 32. The rule that persons relying on the defence are liable unless they discharge the onus of proving lack of knowledge and the absence of negligence indicates that they must in principle be publishers, albeit in a subordinate role, for otherwise they could not be held liable at all since a fundamental constituent of the tort would be missing. On this basis, it may perhaps be preferable to refer to those playing a subordinate role in the publication process as “subordinate publishers” rather than “subordinate distributors” as they are often called. 33. In the present appeal, one of the main issues dividing the parties is whether the respondents are eligible to rely on the innocent dissemination defence or whether they are first or main publishers to whom it does not apply. E. Notice boards and graffiti 34. A further set of legal principles which featured prominently at the hearing of this appeal arises out of the line of cases invoked by the respondents involving actions brought against the owners or occupiers of premises in which unauthorised third parties had affixed defamatory statements on a notice board or scrawled such statements as graffiti on its walls. 35. That line of authorities begins with the decision of the English Court of Appeal in Byrne v Deane.[31] There, a libel action was brought against the proprietors of a golf club in respect of a typewritten sheet of paper containing an allegedly defamatory statement set in verse which someone pinned onto a notice board visible to members using the club. The relevant question was whether the club’s proprietors could be held to have acted as publishers of that statement. It was a rule of the club that the posting of notices in the club premises without the consent of the club secretary was not allowed. One of the defendants was the club secretary. She admitted that she had read the statement but allowed it to remain on the notice board “for some days”[32] because she could see no harm in it. 36. All three Judges held that there had been publication by her. Greer LJ[33] so concluded on the basis that she and her husband (the other defendant), being proprietors of the establishment: “...by allowing the defamatory statement, if it be defamatory, to rest upon their wall and not to remove it, with the knowledge that they must have had that by not removing it it would be read by people to whom it would convey such meaning as it had, were taking part in the publication of it.” 37. Slesser LJ thought that only the secretary (and not her husband) had published the defamation by adopting the statement posted on the notice board: “There are cases which go to show that persons who themselves take no overt part in the publication of defamatory matter may nevertheless so adopt and promote the reading of the defamatory matter as to constitute themselves liable for the publication. ... I think having read it, and having dominion over the walls of the club as far as the posting of notices was concerned, it could properly be said that there was some evidence that she did promote and associate herself with the continuance of the publication in the circumstances after the date when she knew that the publication had been made.”[34] 38. Greene LJ pointed out that attaching the notice to the club’s walls was a trespass and that both defendants as proprietors had ample powers to remove it.[35] He stressed that whether what had occurred amounted to publication was a question of fact which depended on whether the circumstances justified the inference that the defendants had assumed responsibility for the continued presence of the statement on their notice board: “It may very well be that in some circumstances a person, by refraining from removing or obliterating the defamatory matter, is not committing any publication at all. In other circumstances he may be doing so. The test it appears to me is this: having regard to all the facts of the case is the proper inference that by not removing the defamatory matter the defendant really made himself responsible for its continued presence in the place where it had been put?”[36] 39. His Lordship gave as an example of a situation where no such inference could be drawn the case where: “...somebody with a mallet and a chisel carved on the stonework of somebody's house something defamatory, and carved it very deeply so that the removal of it could only be effected by taking down the stonework and replacing it with new stonework. In a case of that kind it appears to me that it would be very difficult, if not indeed impossible, to draw the inference that the volition of the owner of the house had anything to do with the continued presence of that inscription on his stonework. The circumstance that to remove it would require very great trouble and expense would be sufficient to answer any such aspersion.” 40. Applying that approach to the case at hand, Greene LJ considered it proper to infer that the defendants had consented to the continued presence of the statement on the notice board and so were potentially liable as publishers: “The defendants, having the power of removing it and the right to remove it, and being able to do it without any difficulty at all, and knowing that members of the club when they came into the room would see it, I think must be taken to have elected deliberately to leave it there. The proper inference, therefore, in those circumstances it seems to me is that they were consenting parties to its continued presence on the spot where it had been put up. That being so it seems to me that they must be taken to have consented to its publication to each member who saw it.”[37] 41. The second case cited in this line of authority is the decision of the Court of Appeal of California in Isabelle Hellar v Joe Bianco.[38] This involved a defamatory graffito on the wall of the men’s lavatory in the defendant’s tavern which imputed that the plaintiff was “an unchaste woman who indulged in illicit amatory ventures”, supplying her telephone number. When alerted to its existence, her husband telephoned the bartender and demanded that he remove it within 30 minutes. The bartender said he was too busy to do so but would get round to it in due course. The plaintiff sued the owners of the tavern for libel but she was non-suited at first instance. The Court of Appeal reversed the Judge, holding that it was a case which ought to be left to the jury. It cited Byrne v Deane for the theory that “by knowingly permitting such matter to remain after reasonable opportunity to remove the same the owner of the wall or his lessee is guilty of republication of the libel”, provided that the plaintiff was able to introduce “evidence tending to show that respondents adopted the defamatory matter or republished it”.[39] The Court of Appeal held that it was “a question for the jury whether, after knowledge of its existence, respondents negligently allowed the defamatory matter to remain for so long a time as to be chargeable with its republication, occurring when the husband and the group with him visited the rest room and saw the writing.”[40] 42. The third case, Urbanchich v Drummoyne Municipal Council,[41] contains a helpful analysis by Hunt J of the Supreme Court of New South Wales. It was the trial of a preliminary issue as to “the capacity of the plaintiff’s case [as pleaded] to establish his allegation that the second defendant had published the matter complained of”. The plaintiff was the leader of an extreme right wing group who sued, among others, the Urban Transit Authority (the second defendant) for libel on the basis that posters bearing photographs purporting to show him in the company of Adolf Hitler and of others in Nazi uniforms had been glued onto certain bus shelters controlled by the Authority. His solicitors asked the Authority to remove them but the posters remained in place for at least a month. Relying on Byrne v Deane and Hellar v Bianco, the plaintiff argued that he merely needed to prove notice to the Authority and its failure to comply with his removal request within a reasonable time to establish publication. Hunt J rejected that argument, stating: “In a case where the plaintiff seeks to make the defendant responsible for the publication of someone else's defamatory statement which is physically attached to the defendant's property, he must establish more than mere knowledge on the part of the defendant of the existence of that statement and the opportunity to remove it. According to the authorities, the plaintiff must establish that the defendant consented to, or approved of, or adopted, or promoted, or in some way ratified, the continued presence of that statement on his property so that persons other than the plaintiff may continue to read it - in other words, the plaintiff must establish in one way or another an acceptance by the defendant of a responsibility for the continued publication of that statement.”[42] 43. Hunt J therefore explained the Byrne v Deane rule as one which resulted in the occupier of the premises being treated as a publisher of the libel only if the facts, including a failure to remove the offending statements within a reasonable time of becoming aware of their existence, justified the inference that the occupier had consented to or adopted the defamatory statement. His Honour therefore held that the pleaded case, if duly proved, was: “... capable of amounting to the publication by the second defendant of those posters provided that the jury also draws the inference from such conduct that the second defendant had in fact accepted a responsibility for the continued publication of those posters.”[43] 44. The Byrne v Deane line of cases may therefore be viewed as authority for the following propositions: (a) Where a third person writes or affixes a statement defamatory of the plaintiff on the occupier’s property without the occupier’s knowledge, the occupier is not treated as a publisher of that statement prior to his becoming aware of it. (b) Once the occupier discovers its existence, he may be treated as a publisher but only if, having the power to do so, he does not remove or obliterate the offending statement in circumstances which justify inferring as a matter of fact that by his inaction he has consented to or ratified its continued publication. (c) Where the occupier becomes aware of the libel but the circumstances show that removal or obliteration is very difficult or very expensive, the fact that the defamatory statement is not expunged may well not justify the inference that it remains in place with his approval. 45. The respondents seek to argue that their situation is analogous to that of the golf club proprietors and that application of the notice board approach exonerates them from liability. F. The differences between the two sets of principles 46. It is important to appreciate the differences between the principles which derive from the notice board line of cases and those which constitute the innocent dissemination defence. 47. As analysed above, the innocent dissemination defence is a common law doctrine developed to mitigate the harshness of the strict publication rule. While it does not avail the first or main publishers it brings relief to subordinate publishers who have knowingly participated in the process of disseminating the article concerned. The defence is therefore applicable to persons who are admittedly publishers, although playing a subordinate role, allowing them to be exonerated from liability if they discharge the burden of showing that they did not know that the article which they had helped to disseminate contained the offending content and that such lack of knowledge was not due to any lack of reasonable care on their part. 48. In contrast, the occupiers in the notice board and graffiti cases have not in any sense assisted or participated in the originator’s publication of the libel. These are not cases involving anyone who has played a role in a scheme for distributing the offending publication seeking relief from the strict rule. As Greene LJ pointed out in Byrne v Deane, the posting of the defamatory verse on the club’s notice board was an act of trespass. A person who defaces an occupier’s walls with graffiti prima facie does not do so with the approval or encouragement of the occupier. What this line of cases addresses are the conditions which must be satisfied before the occupier can be regarded as having turned himself into a publisher of the libel. That occurs only if the plaintiff shows that the occupier became aware of the libellous statement on his premises and allowed it to remain in place in circumstances which justify the inference that he has adopted or ratified its publication. If the occupier was not aware or if the inference cannot properly be drawn, he does not make himself a publisher of the trespassing inscription and is not liable at all. These rules are therefore not about relieving a person’s prima facie liability as a publisher but about whether or not an occupier is constituted a publisher. Since it is about establishing the occupier’s liability as a publisher (and not about a publisher establishing a defence), the onus rests on the plaintiff. 49. It follows from the distinctions drawn above that I do not share the approach in some of the reported cases involving libel in an internet context where the Byrne v Deane principles appear to have been treated merely as a facet of the innocent dissemination defence or the defence under section 1 of the Defamation Act 1996, in the United Kingdom.[44] G. The Byrne v Deane principles inapplicable 50. Once the nature of the Byrne v Deane principles is grasped, it becomes clear that they do not apply to internet platform providers like the respondents. The provider of a discussion forum is in a wholly different position from that of the occupier of premises who is not in the business of publishing or facilitating publication at all, but who has had imposed on him the defamatory act of a trespasser. 51. The respondents plainly played an active role in encouraging and facilitating the multitude of internet postings by members of their forum. As described in Section B of this judgment, they designed the forum with its various channels catering for their users’ different interests; they laid down conditions for becoming a member and being permitted to make postings; they provided users browsing their website access to the discussion threads developed on their forum; they employed administrators whose job was to monitor discussions and to delete postings which broke the rules; and they derived income from advertisements placed on their website, a business model which obviously benefits from attracting as many users as possible to the forum. 52. The respondents were therefore, in my view, plainly participants in the publication of postings by the forum’s users and in that sense they were publishers from the outset, it being in issue whether they were first or main publishers or merely subordinate publishers. I accept Mr Thomas SC’s submission that they were in a substantively different position from the occupiers in the notice board and graffiti cases. The relevant question in the present case is whether, as publishers, the respondents are entitled to rely on, and have established, the defence of innocent dissemination, relieving themselves of the strict publication rule which would otherwise be applicable. The question is not whether, originally being non-publishers, they have, when fixed with knowledge of the defamatory postings, demonstrated their consent to and adoption of those postings, turning themselves into publishers. 53. In this context, I respectfully part company with the reasoning (adopted on an interlocutory basis) of the English Court of Appeal in Tamiz v Google Inc.[45] It is reasoning which proceeds on the basis that successful invocation of the defence of innocent dissemination results in the defendant being deemed not to have published at all. For the reasons previously given,[46] I do not accept that premise. Nor am I able to accept the distinction drawn between the notice board and graffiti analogies, nor the suggestion that “the provision of a platform for blogs is equivalent to the provision of a notice board”.[47] As indicated above, my view is that the provider of an internet discussion platform similar to that provided by the respondents falls from the outset within the broad traditional concept of “a publisher”, a characteristic not shared by a golf club or other occupier who puts up a notice board on which a trespassing message is posted. 54. I pause to note in passing that there is rightly no suggestion in the present case that the providers of a discussion platform like the respondents should be regarded as “mere conduits” or “passive facilitators” comparable to the Post Office or a telephone company, as has sometimes been argued in certain internet cases.[48] H. Publication and the internet 55. The crucial questions in this appeal are therefore whether the respondents are subordinate publishers entitled to rely on the common law defence of innocent dissemination and, if so, whether they have, on the facts, made out that defence. For these questions to be properly addressed it is necessary to consider the nature of publication on the internet in cases like the present. 56. The distinction between the first or main publishers of a work which contains a libel[49] and subordinate publishers of that work, central to the innocent dissemination defence, was developed in the era of mass communications in the print medium. As we have seen, the defence was designed to relieve from the strict publication rule, persons such as wholesalers, distributors, booksellers, librarians, newsagents and the like. While such persons came within the very broad traditional concept of “publication” since they intentionally participated in distribution of the work, they were relieved of liability if they could show that they did not know and could not with reasonable care have known the defamatory content of the article they were disseminating. 57. In the creation and distribution of such print publications, the first or main publishers have or can readily acquire full knowledge of the publication’s content before its release and are able to control and, if necessary, prevent dissemination of such content. It involves what is sometimes called a “one-to-many” model of mass communication. The “one” – the entity which originates and publishes the work – exercises editorial and general control over the publication process. Such an entity is denied the defence of innocent dissemination. 58. The same “one-to-many” model applies to radio and television broadcasts, as illustrated by Thompson v Australian Capital TV Ltd.[50] That was a case which involved a programme produced by one television channel (Channel 9) being broadcast live to air by another (Channel 7). The programme contained defamatory allegations, leading to an action against Channel 7 which sought to raise the innocent dissemination defence on the basis that it was a subordinate publisher of Channel 9’s programme. That defence was rejected on the basis that Channel 7 had full control of how and when the programme was re-transmitted and that its decision to broadcast it live was a decision taken as a main publisher of that programme in its own right or as a main publisher by virtue of its having authorised publication of the content originating from Channel 9. In their joint judgment, Brennan CJ, Dawson and Toohey JJ stated: “It is true that Channel 7 did not participate in the production of the original material constituting the program. But Channel 7 had the ability to control and supervise the material it televised. Channel 7's answer is that time did not permit monitoring the content of the program between its receipt at Black Mountain and its telecast from the studios in the Australian Capital Territory. That may well be so but it by no means follows that Channel 7 was merely a conduit for the program and hence a subordinate disseminator. It was Channel 7's decision that the telecast should be near instantaneous, a decision which was understandable given the nature and title of the program[51] but which was still its decision. ... In those circumstances it would be curious if Channel 7 could claim to be a subordinate disseminator because it adopted the immediacy of the program. It did that for its own purposes, that is, to telecast to viewers in the Australian Capital Territory and adjoining areas.”[52] 59. In many instances, publications on the internet involve a qualitatively different process, characterised by open, interactive, “many-to-many” communications made and accessed on platforms provided by internet intermediaries. This is explained by Professor Jack M Balkin[53] in the following terms: “Mid-twentieth century mass media – newspapers, television, cable and satellite – were broadcasters, with one entity speaking to many people, and little opportunity to speak back. Twenty first century mass media, the so-called ‘new intermediaries’, are conduits, platforms, and services. They do not necessarily broadcast but facilitate the speech of others, and instead of being a one-to-many, there are many-to-many forms of communication. They include not only broadband companies, but also a whole range of online service providers, like YouTube, Blogger, and their parent company Google; social networking sites like MySpace and Facebook; Flickr, a photo-sharing service owned by Yahoo; and virtual worlds like Second Life. These online service providers offer platforms through which people can find content, create new content, transform existing content and broadcast the content to others ... These new intermediaries are conduits for other people’s speech and communications. Indeed, unlike twentieth century media, a key element of their business models is providing widespread, democratized, access to media and encouraging participation. That is because their business models depend on user-generated content ...” 60. In contrast, as Professor Balkin points out: “The ‘traditional’ or ‘legacy’ media of newspapers, television, radio and cable television merge content delivery with content production. They tightly control the messages that they publish or broadcast.” 61. The present respondents, as providers of the discussion forum, belong to the class of the “new intermediaries” described above. They were not the originators of the defamatory statements complained of. Those statements were the result of their having facilitated the speech of others in a forum hosting a large volume of many-to-many communications. Should the law of libel treat the respondents as main or subordinate publishers? I. Authorization 62. Mr Thomas’s first argument in support of depriving the respondents of the innocent dissemination defence is that they authorized the making of the offending statements and should, on that basis, be treated as the first or main publishers. 63. Plainly, if a defendant knew the content of a defamatory article and authorized or participated in its publication, that defendant would be liable as a main publisher. As Eady J pointed out in Bunt v Tilley, “It is clear that the state of a defendant’s knowledge can be an important factor”[54] – a point to which I shall return. But in the present case, it is not in dispute that the respondents were unaware of the offending words until some time after they had been published on the forum. This is not a case where liability as publisher can be founded upon vicariously liability for the publishing acts of employees or upon rules for attributing liability to a corporation for the acts of its organs or agents. How then could it be said that the respondents “authorized” their publication? Mr Thomas’s answer is that since, for their own commercial purposes, every posting on the forum was made with the respondents’ encouragement, they must be taken to have authorized each such posting, whatever its content. 64. It is of course possible in law that a principal might attract liability where he authorizes his agent to publish whatever statement the latter may choose to publish, including a defamatory statement. However, that would have to be established as a matter of fact with evidence of some pre-existing arrangement between principal and agent or later ratification. An example where such evidence did exist can be found in Thompson v Australian Capital TV Ltd,[55] where Channel 7’s decision to re-broadcast the programme made by Channel 9 instantaneously was held to be evidence of Channel 7 authorising publication of whatever content Channel 9 chose to put into that programme. Gaudron J reached that conclusion, stating: “There can be no doubt that Channel 7 authorised the retransmission to its viewers by its servants or agents of the material which was defamatory of the appellant. Without its authority, the material would not have been retransmitted. And it is sufficient that it authorised the retransmission to its viewers of whatever was transmitted by Channel 9 without regard to its contents. Having authorised its retransmission, Channel 7 published the material in question. It cannot rely on the defence of innocent dissemination.”[56] 65. That was of course a situation involving two television channels, each in the business of making “one-to-many” broadcasts, with one adopting the programme produced by the other. The re-transmission was pursuant to a specific mutual arrangement which was plainly evident. 66. Nothing approaching such evidence exists in the present case. It is inherently improbable that the provider of an internet platform facilitating many-to-many exchanges among users who may post as many as 5,000 messages per hour should intend to confer a sweeping, undifferentiated authorization on each of them to post whatever unlawful and objectionable postings they may choose to post. The evidence is to the contrary. As noted above,[57] the respondents laid down forum rules prohibiting postings with objectionable content, including defamation, pornography, harassment and infringing intellectual property rights and employed two administrators tasked with making deletions and responding to complaints, having power to suspend or terminate the accounts of repeated offenders. Those rules may not have been efficiently or evenly enforced. But the stipulation of such rules with their enforcement from time to time suffices to show that the platform providers were not authorizing the publication of whatever forum users might choose to post. It is one thing to encourage heavy traffic to make the site attractive to advertisers, but another to conclude that such encouragement involved authorising defamatory postings such as those complained of. I am accordingly unable to accept the appellants’ “authorization” submission. J. A process of elimination 67. Mr Thomas’s second argument for excluding the innocent dissemination defence involves the contention that, by a process of elimination, the respondents must have acted as the first or main publishers of the offending statements since no other possible candidates exist. The respondents, as providers of the forum, he submits, stored the defamatory postings on their server and conveyed them to any person seeking to access the relevant discussion threads, there being no other person involved in the act of publication. It was argued that the originators of the offending postings are not relevant to the process of publication which should be seen as involving only the forum provider and the person who accesses the offending material. To illustrate this, Mr Thomas invited the Court to consider the situation where the originator posts the defamatory statement and, before anyone accesses it, the respondents’ server crashes, making the posting inaccessible by anyone. Such a situation, he argued, shows that the crucial publisher is not the originator, but the forum provider. 68. It is clear law that internet material is published when and where it is accessed or downloaded in comprehensible form. A person wishing to view on his computer the webpage containing the relevant material, sends a request to the URL address of the website on which that material is stored and, in response, the webpage is transmitted to the requesting computer. When it is received and accessed or downloaded in a form comprehensible to the person making the request, the material is “published” for the purposes of libel law.[58] 69. However, I do not accept that the originator and any other persons “upstream” from the forum provider should somehow be ignored. As Gatley points out: “The person who first spoke or composed the defamatory matter (the originator) is of course liable, provided he intended to publish it or failed to take reasonable care to prevent its publication.”[59] 70. In Emmens v Pottle,[60] when contrasting the position of a subordinate disseminator with that of a first or main publisher, Lord Esher MR stated: “The proprietor of a newspaper, who publishes the paper by his servants, is the publisher of it, and he is liable for the acts of his servants. The printer of the paper prints it by his servants, and therefore he is liable for a libel contained in it. But the defendants did not compose the libel on the plaintiff, they did not write it or print it; they only disseminated that which contained the libel. The question is whether, as such disseminators, they published the libel?” 71. His Lordship was plainly indicating (by the words which I have italicised) that if the defendants had composed or written the libel, they would obviously have been liable as first or main publishers, but that since they had not done so and had only disseminated the libel, it was necessary to consider their position as subordinate publishers. 72. Thus, a journalist is undoubtedly to be treated as the (or at least, a) first or main publisher of a newspaper article, having authored it in the first place. The originator of a forum posting occupies a like position. As stated previously, the process of publication is bilateral. At one end are those who create the article and participate in its dissemination. At the other, is the reader, listener or viewer who receives it. There is no conceivable reason for ignoring the originator of the posting as the first and one of the main publishers. Indeed, as we have seen, the appellants pursued some of the originators as publishers of the defamatory statements and obtained financial settlements from them. 73. It does not assist the appellants’ argument to postulate the crashing of the forum’s server, resulting in failure of the publication process. To suggest that this shows that the only publisher is the forum provider involves a misdirected “but for” argument. True it is that “but for” the proper functioning of the forum’s server, the hypothetical defamatory statement would not have been published to persons seeking to access the website. But that does not provide a basis for excluding the originator as a first or main publisher. It remains also true that “but for” the originator making the defamatory posting in the first place, there would be no libel to convey to the ultimate recipient. Where the server does not crash and the chain of publication is completed, the originator is seen to be an obviously essential first or main publisher in the bilateral publication process. I therefore reject the argument that in the absence of any other candidate, the respondents must be held to be the only first or main publisher. K. Who is in law a “first or main publisher”? 74. I turn then to the first of the central issues in this appeal: Are the respondents in law to be treated as the first or main publishers or merely as subordinate publishers of the defamatory statements posted by the forum users in question? What are the criteria for determining whether a person who plays some role in the process of publishing a particular article is a first or main publisher of that article? 75. As the authorities on the innocent dissemination defence show, in a newspaper setting, the journalist, editor, printers[61] and (vicariously) the newspaper proprietor are all treated as first or main publishers. In my view, this is because they are persons whose role in the publication process is such that they know or can be expected easily to find out the content of the articles being published and who are able to control that content, if necessary preventing the article’s publication. It is because they occupy such a position that the law has held them strictly liable for any defamatory statements published. 76. In my view, the abovementioned characteristics supply the criteria for identifying a person as a first or main publisher. They are (i) that he knows or can easily acquire knowledge of the content of the article being published (although not necessarily of its defamatory nature as a matter of law); and (ii) that he has a realistic ability to control publication of such content, in other words, editorial control involving the ability and opportunity to prevent publication of such content. I shall, for brevity refer to them as “the knowledge criterion” and “the control criterion” respectively. K.1 The knowledge criterion 77. That the knowledge criterion identifies a distinguishing characteristic of a first or main publisher is clear from the doctrine of innocent dissemination itself: the absence of knowledge is the first requirement of that defence, being a defence only open to subordinate publishers. Thus, in Emmens v Pottle,[62] Lord Esher MR stated : “The question is whether, as such disseminators, they published the libel? If they had known what was in the paper, whether they were paid for circulating it or not, they would have published the libel, and would have been liable for so doing. That, I think, cannot be doubted.” 78. And as laid down by Romer LJ in Vizetelly, to avail himself of the defence, the defendant must establish “... that he was innocent of any knowledge of the libel contained in the work disseminated by him.”[63] 79. The knowledge criterion is also reflected in the traditional inclusion of printers as within the class of first or main publishers – and in the more recent tendency to question whether such treatment of printers ought to be maintained. 80. Thus, in Thompson v Australian Capital TV Ltd, [64] the Australian High Court expressed itself in favour extending the innocent dissemination defence to printers on the basis that their knowledge of content can no longer be assumed or expected. In their joint judgment,[65] Brennan CJ, Dawson and Toohey JJ stated: “...in both Emmens v Pottle and Vizetelly printers were regarded as outside the ambit of the defence of innocent dissemination. The printing technology of the time made it inevitable that the printer would know the contents of what was being printed. With changes in technology, the logic of treating printers in the same way as distributors was accepted by the Faulks Committee in the United Kingdom and by the Australian Law Reform Commission. The logic is irresistible so long as the printer qualifies as a subordinate publisher ...” K.2 Knowledge of what? 81. What must the publisher be shown to have known or to be expected to have known in order to be treated as a first or main publisher and so deprived of the defence? Mr Thomas submitted that it was sufficient that these respondents knew that they were hosting and making accessible a multitude of postings on the forum. They must therefore, he argued, be taken to know the content of the postings or discussion threads complained of since they formed part of that multitudinous body of material. I cannot accept such a broad and indiscriminate basis for deeming an internet intermediary strictly liable as a first or main publisher. It should be stressed that adopting a more focussed requirement as to knowledge does not mean absolving a platform provider from liability. It means treating it as a subordinate publisher and throwing on it the burden of bringing itself within the innocent dissemination defence. 82. Eady J in Bunt v Tilley,[66] helpfully explains the nature of the knowledge requirement in the following terms: “I have little doubt ... that to impose legal responsibility upon anyone under the common law for the publication of words it is essential to demonstrate a degree of awareness or at least an assumption of general responsibility, such as has long been recognised in the context of editorial responsibility. As Lord Morris commented in McLeod v St Aubyn [1899] AC 549 , 562: ‘A printer and publisher intends to publish, and so intending cannot plead as a justification that he did not know the contents. The appellant in this case never intended to publish.’ In that case the relevant publication consisted in handing over an unread copy of a newspaper for return the following day. It was held that there was no sufficient degree of awareness or intention to impose legal responsibility for that ‘publication’. ... for a person to be held responsible there must be knowing involvement in the process of publication of the relevant words.” (Italics in the original) 83. In Emmens v Pottle,in summarising the situation which gave rise to the innocent dissemination defence, Lord Esher MR stated: “...the defendants were innocent disseminators of a thing which they were not bound to know was likely to contain a libel.”[67] And in Vizetelly, Romer LJ spoke of the defendant being “innocent of any knowledge of the libel contained in the work disseminated by him.”[68] 84. There may well be scope for argument in any particular case as to what the internet equivalent of the article or “thing” or “work” whose contents are known to the publisher should be taken to be. However, that debate is in my view of little consequence. The important question is whether the publisher knew or can properly be expected to have known the content of the article being published. Eady J stated that knowledge of “the relevant words” contained in the article complained of must be shown. That should be taken to mean that the publisher must know or be taken to know the content – not necessarily every single word posted – but the gist or substantive content of what is being published, to qualify as a first or main publisher. Such knowledge may exist in relation to the content of a particular posting or a particular discussion thread or group of discussion threads, it being irrelevant whether the provider realised that such content was in law defamatory.[69] I reject in any event the appellants’ suggestion that a discussion forum provider should be treated as having knowledge of the content of every message posted on the forum and deemed to be a first or main publisher thereof. K.3 The control criterion 85. The requirement that a first or main publisher must also be shown to have control over the published content (meaning the ability and opportunity to prevent its publication) reflects the law’s policy of mitigating the strict publication rule in relation to a person who plays a less important role in the publication process and thus does not know the content being published or can do nothing to prevent its publication. Conversely, if the person concerned was aware of the article’s content and had the opportunity to prevent its dissemination, there is no reason in principle for excluding the strict publication rule. 86. The ability to exercise such control was central to the decision in Thompson v Australian Capital TV Ltd.[70] As noted above, Channel 7 was held liable as a first or main publisher for re‑broadcasting live to air the defamatory programme produced by Channel 9 since it was clear that Channel 7 had had the ability and opportunity to prevent publication of the defamatory content but had decided not to exercise such control. In the main judgment, their Honours stated: “It is true that Channel 7 did not participate in the production of the original material constituting the program. But Channel 7 had the ability to control and supervise the material it televised. Channel 7's answer is that time did not permit monitoring the content of the program between its receipt at Black Mountain and its telecast from the studios in the Australian Capital Territory. That may well be so but it by no means follows that Channel 7 was merely a conduit for the program and hence a subordinate disseminator. It was Channel 7's decision that the telecast should be near instantaneous, a decision which was understandable given the nature and title of the program but which was still its decision.”[71] 87. In Bunt v Tilley, Eady J pointed to knowledge and control (meaning “an opportunity to prevent the publication”) as the basis for allocating responsibility:[72] “In determining responsibility for publication in the context of the law of defamation, it seems to me to be important to focus on what the person did, or failed to do, in the chain of communication. It is clear that the state of a defendant's knowledge can be an important factor. If a person knowingly permits another to communicate information which is defamatory, when there would be an opportunity to prevent the publication, there would seem to be no reason in principle why liability should not accrue.” 88. Editorial control was given central importance by the Supreme Court of Canada in Crookes v Newton.[73] The Court had to decide whether by creating a hyperlink that connects a reader to allegedly defamatory material, the creator of the hyperlink can be said to “publish” the offending material. A hyperlink is a device which can be imbedded in an internet article which, when clicked on, takes the reader to a secondary article to which the author wishes to refer. The Court held that providing a hyperlink did not amount to publication of the linked article. The majority emphasised that the author who created the hyperlink did not control the secondary article’s content or publication.[74] Abella J, writing for the majority stated: “A reference to other content is fundamentally different from other acts involved in publication. Referencing on its own does not involve exerting control over the content. Communicating something is very different from merely communicating that something exists or where it exists. The former involves dissemination of the content, and suggests control over both the content and whether the content will reach an audience at all, while the latter does not. Even where the goal of the person referring to a defamatory publication is to expand that publication’s audience, his or her participation is merely ancillary to that of the initial publisher: with or without the reference, the allegedly defamatory information has already been made available to the public by the initial publisher or publishers’ acts. These features of references distinguish them from acts in the publication process like creating or posting the defamatory publication, and from repetition.”[75] K.4 Applied to the respondents 89. When the abovementioned criteria are applied to the respondents, it is in my view clear that they are subordinate publishers and not first or main publishers of the defamatory postings. They were certainly publishers of those postings (and do not seek to argue otherwise) since they provided the platform for their dissemination, but the respondents were not aware of their content and realistically, in a many-to-many context, did not have the ability or opportunity to prevent their dissemination, having learned of them only after they had already been published by their originators. The respondents are therefore in principle able to invoke the innocent dissemination defence as subordinate publishers. I deal in the next Section with the consequences of their acquiring knowledge of the defamatory content as such subordinate publishers. L. Reasonable care and subsequently acquired knowledge 90. Formulated as a defence which requires the defendant to prove that he did not know and would not, with the exercise of reasonable care in the relevant circumstances, have known that the article contained defamatory content, the focus of the innocent dissemination defence has been on past, completed publications. Thus, a newsagent who has already sold its consignment of newspapers which contained an offending article will rely on the defence seeking to prove that, when making the sales, it was not aware of the defamatory content and could not, with reasonable care, have discovered it. 91. What is needed to satisfy the standard of reasonable care will vary according to the circumstances. Thus, in an internet context, the standard may well demand particular monitoring of postings by certain forum members or of postings on particular discussion topics if previous experience indicates a propensity or special risk of defamatory postings. 92. The potential need for particular care in certain cases is illustrated by two decisions involving defendants who mounted campaigns against targeted persons. Thus, in Kaplan v Go Daddy Group,[76] a customer dissatisfied with his Hunter Holden car started a blog website provocatively called “www.hunterholdensucks.com” inviting others to share their comments about the car. Unsurprisingly, some of the comments posted on the blog site were extremely negative. Similarly, in Wishart v Murray,[77] the defendants set up a Facebook page campaigning for a newly published book to be boycotted and casting serious aspersions against one of the authors. Unlike the hosts of a discussion forum involving many thousands of discussion threads, the creators of such a blog or Facebook page have a relatively narrow horizon to monitor and, given that their express purpose is to mount a campaign critical of others, they might reasonably be expected to exercise particular care in respect of potentially defamatory comments posted at their invitation. 93. The requirement of reasonable care is also relevant in cases involving subsequently acquired knowledge. The forum provider may initially satisfy the requirements of the innocent dissemination defence in terms of lack of knowledge, etc, but may subsequently become aware of the relevant defamatory content in circumstances where the defamatory article is still available for distribution and where, before it can be removed, some further acts of publication in fact occur. Thus, a magazine with an offending article may be still available for purchase on the shelves of various shops operated by a firm of newsvendors and some copies may be sold after the moment when the firm acquires such knowledge. And in an internet context, an offending discussion thread may still be accessible by forum users when the provider first learns of its defamatory content, and “hits” accessing that content may occur before it can be removed from the site. How does such acquired knowledge affect the innocent dissemination defence? Are the newsvendors and the platform provider in the examples just given excluded from the defence from the moment that they become aware of the defamatory content? 94. The existing authorities have tended to deal with this situation under the rubric of the “notice board cases” as discussed above.[78] But as previously stated, I do not consider that analysis satisfactory. The issue appears to me to be better viewed as arising in the context of the innocent dissemination defence. 95. One possible view might be that since the first requirement of the defence is that the defendant, in Romer LJ’s terms, must show that he was “innocent of any knowledge of the libel contained in the work disseminated by him”, he is deprived of the defence from the moment that he learns of the offending content and he is strictly liable for all subsequent publications. However, I think that such a rule runs against the grain of the common law defence. 96. In the situation posited, the premise is that the defendant is a subordinate publisher who made the article available when there was nothing in the work or the circumstances under which it came to him or was disseminated by him which should have led him to suppose that it contained a libel; and his lack of awareness was not due to any negligence on his part. The defence implicitly recognizes that such a defendant may in fact unwittingly publish matter that is defamatory of the plaintiff, but exempts him from liability provided he meets the standard of reasonableness. 97. In my view, it is consistent with the policy underpinning the defence that the same standard of reasonableness should be applied in a situation of acquired knowledge. A subordinate publisher should be afforded the continued protection of the defence if he proves that upon becoming aware of such content, he promptly took all reasonable steps to remove the offending content from circulation as soon as reasonably practicable. Such an approach is also in keeping with the rule which imposes liability on a person as first or main publisher if, having relevant knowledge or easy access to knowledge and editorial control so as to be able to prevent publication of defamatory content, he fails to exercise such control. The subordinate publisher who, in contrast, forthwith takes all reasonable steps to prevent further publication, should not be placed in the same category. Whether in any particular case the subordinate publisher succeeds in proving that he has met those requirements is again a question of fact. Evidence as to how readily the offending content could be withdrawn or deleted would be important. 98. I note in this context that in Metropolitan International Schools Ltd v Designtechnica Corpn,[79] Eady J considers the position after defamatory content is brought to the attention of a search engine operator and points out that: “There is a degree of international recognition that the operators of search engines should put in place such a system (which could obviously either be on a voluntary basis or put upon a statutory footing) to take account of legitimate complaints about legally objectionable material.”[80] 99. His Lordship suggests that : “...it does not follow as a matter of law that between notification and ‘take down’ the third defendant becomes or remains liable as a publisher of the offending material. While efforts are being made to achieve a ‘take down’ in relation a particular URL, it is hardly possible to fix the third defendant with liability on the basis of authorisation, approval or acquiescence.”[81] M. The defence of innocent dissemination applied to the respondents 100. We are only concerned with the 2008 and 2009 statements. It is not in dispute that the respondents were unaware of the postings containing those statements until the 2008 statements were subsequently brought to their attention by the appellants and until they themselves discovered the 2009 statements.[82] It may be recalled that the 2008 statements were posted on 24 October 2008 and found by the Judge to have been brought to the respondents’ notice on 27 October 2008.[83] The 2009 statements were posted at 11.25 pm on 21 January 2009 and discovered by the respondents the next morning.[84] In accordance with the approach discussed above, I shall first address the position concerning publication of the defamatory statements before the respondents, as subordinate publishers, became aware of them; and then turn to consider the position after they acquired such awareness. 101. Should the respondents, exercising the reasonable care demanded by the circumstances, have known of the offending 2008 and 2009 statements before they actually became aware of them? The Courts below properly stressed the very high volume of traffic rapidly generated on the forum, with as many as 5,000 postings per hour and 30,000 users on line at any time. The Judge noted that in the circumstances, only minimal editorial control was exercised[85] and Fok JA pointed to the impracticability of automated or manual screening of postings before they appeared on the forum.[86] Fok JA accordingly supported the finding that “in the light of the sheer volume of postings on the defendants’ forum, the defendants could not be said to be negligent in not knowing of the existence of the defamatory statements complained of or the likelihood of their being on the website forum prior to being informed of the same”.[87] That was the basis for concluding that the respondents had made good the innocent dissemination defence in relation to the period prior to their learning of the offending postings. 102. Although it would have been helpful if the Judge had made fuller and more explicit findings in relation to innocent dissemination, Fok JA’s conclusions were fully justified on the undisputed and incontrovertible evidence. The respondents were originally unaware of the defamatory content posted by the originators. Given the very large volume of traffic on the forum and the speed with which it was generated, they had no realistic means of acquiring such knowledge or of exercising editorial control over the content before it was posted. There was nothing to alert them of any likelihood that the originators of the relevant postings would be posting or had posted the offending 2008 statements, until they were informed of those statements by the appellants. Although it is unclear what precisely had led the respondents to discover for themselves the 2009 statements, the fact that they did in fact independently make that discovery less than 12 hours after those statements were posted, is consistent with the respondents having taken a more proactive approach regarding potentially defamatory postings affecting the appellants, given their experience of the 2008 statements. It is therefore my view that the Judge and the Court of Appeal were entitled to conclude that the respondents had made good the defence in respect of the period before the offending material came to their notice. 103. Turning to what occurred after the respondents came to know of the postings, it is not in dispute that the 2008 statements were taken down some three and a half hours after notification was received. And the 2009 statements which had been posted at 11.25 pm on 21 January 2009, were removed by the respondents at 11.40 am on 22 January 2009 as soon as they were discovered.[88] While the Courts below[89] assessed the adequacy of the respondents’ reactions on the basis of the notice board line of cases which I consider inapplicable, their conclusion that the respondents took down the offending postings within a reasonable time after they became aware of them was plainly open to them and is a conclusion equally pertinent to the standard of reasonableness discussed in Section L above. The promptness with which the respondents took down the offending postings justifies the finding that they acted properly in accordance with that standard. I therefore conclude that the respondents made good the innocent dissemination defence in respect of the defamatory postings both before and after they came to know of their existence. The appellants’ appeal must therefore be dismissed. However, before leaving this judgment, I wish to deal with aspects of the argument advanced at the hearing concerning the constitutional right to freedom of expression in the present context. N. The constitutional right to freedom of expression 104. It is somewhat to state the obvious to point out that the law has always required a balance to be struck between the right to freedom of expression on the one hand, and the right to have one’s reputation protected against defamation on the other. The rights on both sides of that balance are constitutionally recognized in Hong Kong.[90] 105. Mr Thomas, however, argued that such balance does not come into the picture in the present case. He submitted that there is no question of restricting freedom of expression on the part of the originators and the respondents since they have fully exercised that freedom in publishing the defamatory statements. He cited Lord Hobhouse of Woodborough in Reynolds v Times Newspapers Ltd,[91] for the proposition that: “There is no human right to disseminate information that is not true. No public interest is served by publishing or communicating misinformation. The working of a democratic society depends on the members of that society, being informed not misinformed. Misleading people and the purveying as facts statements which are not true is destructive of the democratic society and should form no part of such a society. There is no duty to publish what is not true: there is no interest in being misinformed. These are general propositions going far beyond the mere protection of reputations.” 106. There can be no quarrel with that proposition. Indeed, Article 16 of the Bill of Rights expressly makes exercise of the right to freedom of expression subject to restrictions necessary for respect of the rights or reputations of others. So plainly, a purveyor of libellous statements cannot claim constitutional protection for his conduct. 107. But the balance, properly understood, remains of great importance. It does not involve, as Mr Thomas suggests, a misguided attempt to weigh the claims to freedom of expression by a defaming defendant against the law-abiding victim’s right to reputation. The balance involves two important competing interests affecting society at large, described in the main judgment in Dow Jones & Co Inc v Gutnick in the following terms:[92] “It is necessary to begin by making the obvious point that the law of defamation seeks to strike a balance between, on the one hand, society's interest in freedom of speech and the free exchange of information and ideas (whether or not that information and those ideas find favour with any particular part of society) and, on the other hand, an individual's interest in maintaining his or her reputation in society free from unwarranted slur or damage. The way in which those interests are balanced differs from society to society.” 108. The power of the internet is such that it greatly magnifies what is at stake in considering how that balance should be struck. It must certainly be recognized that a defamation circulated on the internet may do enormous damage to a person’s reputation. In Crookes v Newton,[93] Abella J cited the following excerpt from an article by Professor Lyrissa Barnett Lidsky: “Although Internet communications may have the ephemeral qualities of gossip with regard to accuracy, they are communicated through a medium more pervasive than print, and for this reason they have tremendous power to harm reputation. Once a message enters cyberspace, millions of people worldwide can gain access to it. Even if the message is posted in a discussion forum frequented by only a handful of people, any one of them can republish the message by printing it or, as is more likely, by forwarding it instantly to a different discussion forum. And if the message is sufficiently provocative, it may be republished again and again. The extraordinary capacity of the Internet to replicate almost endlessly any defamatory message lends credence to the notion that ‘the truth rarely catches up with a lie’. The problem for libel law, then, is how to protect reputation without squelching the potential of the Internet as a medium of public discourse.”[94] 109. On the other side of the scale, advocates who warn against interfering with free and open exchanges on the internet have powerful arguments to deploy. An example can be found in counsel’s arguments in the Dow Jones case, summarised by Kirby J[95] as follows: “The crucial attributes [of the World Wide Web], so it was said, include the explosion in the availability of readily accessible information to hundreds of millions of people everywhere, with the consequent enhancement of human knowledge, and the beneficial contribution to human freedom and access to information about the world's peoples and their diverse lives and viewpoints that the Internet makes available, thereby contributing to human understanding. It was argued that the law should generally facilitate and encourage such advances, not attempt to restrict or impede them by inconsistent and ineffective, or only partly effective, interventions, for fear of interrupting the benefit that the Internet has already brought and the greater benefits that its continued expansion promises.” 110. His Honour acknowledged that the internet “is a medium that overwhelmingly benefits humanity, advancing as it does the human right of access to information and to free expression”, adding: “But the human right to protection by law for the reputation and honour of individuals must also be defended to the extent that the law provides”.[96] 111. It is important to bear those competing social interests in mind when approaching questions such as those presently being addressed. The value of free and open many-to-many communications on discussion platforms must be recognized. The ability of internet intermediaries to host them in good faith must not be unduly impaired by the imposition of unrealistic or overly strict standards which would make commercial operation impossible or introduce a chilling effect discouraging free and open exchanges. At the same time, a platform provider must genuinely recognize and take all reasonable steps to protect the rights and reputations of persons from being unlawfully damaged by postings published on the forum. Thus, for instance, while an internet intermediary may not be expected to police or filter the many-to-many discussions hosted, it is appropriate to require prompt action to take down offending postings upon receiving a complaint or otherwise becoming aware of them. 112. As it happens, the evidence indicates that the discourse often encountered on the respondents’ forum is of very doubtful social value. It frequently involves merely vulgar abuse. But freedom of expression must not be devalued because it permits such low grade exchanges. Examples of forums of undeniable value to society in the political, scientific, social, cultural and other spheres are plentiful. O. Conclusion 113. For the foregoing reasons, I conclude that the respondents: (a) did not authorize publication of the defamatory statements;[97] (b) are not to be regarded as the only possible first or main publishers;[98] (c) did not know the content of the relevant statements and did not realistically have the ability or opportunity to prevent their publication and therefore were not the first or main publishers of those statements;[99] and (d) as subordinate publishers, satisfied the requirements of the innocent dissemination defence both before and after they became aware of the defamatory content of the offending postings.[100] 114. I would accordingly dismiss the appellants’ appeal and make an order nisi that they pay the respondents’ costs, directing that the parties have liberty to file written submissions on the question of costs within 14 days from the date of this judgment. Mr Justice LittonNPJ: 115. Mr Justice Ribeiro PJ’s judgment gives a helpful view of how the law of libel evolved as technology for the transmission of messages advanced. Over the past fifteen years or so there has been a quantum leap in the development of the mass media, and the appearance of the “social media”, with the increasing use of the internet. Even in the traditional realm of radio and television the focus has shifted: Instead of the operators uniquely controlling content, the media has become much more interactive, with listeners and viewers contributing to the content in open discussion. 116. The public has accordingly greater scope now for freedom of expression than in olden times: A freedom which the common law protects in the public interest: see for instance Derbyshire County Council v Times Newspapers Ltd [1993] AC 534 where the House of Lords held that institutions of government have no right at common law to sue for defamation in respect of their public functions: Notwithstanding the fact that Article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms[101] had not been enacted into domestic law in the United Kingdom. At p.551-F Lord Keith of Kinkel agreed with Lord Goff of Chieveley in A-G v Guardian Newspapers (No.2) [1990] 1 AC 109 at 283-4 that, in the field of freedom of speech, there was no difference in principle between English law on the subject and Article 10 of the European Convention. 117. It is accordingly to the common law that I turn for the resolution of this appeal. It is here that the balance between freedom of expression on the one hand and the protection of individual reputations on the other has to be struck[102]. 118. The medium for the dissemination of opinions thoughts and expressions, and their means of distribution, fall within a wide spectrum: From the words carved on stonework in somebody’s house (the example given by Greene LJ in Byrne v Deane [1937] 1 KB 818 at 838) at one end of the spectrum to articles on the first page of a leading newspaper at the other; from the stone mason who wielded the mallet to the street-side news-vendor. For liability for libel, the question is always this: At what point does the law seek to pin responsibility for such dissemination? For the author of the article on the first page of the newspaper and for its editor the answer is obvious. But what about the owner of the house in Greene LJ’s example, or the proprietors of the golf-club in Byrne v Deane who would not normally have expected defamatory statements to be pinned on their notice-board? 119. In this regard, labels such as “main publisher” “subordinate distributor” “mere disseminator”, as appearing in the books, are simply labels. They seek to do nothing more than to define, in an imprecise way, the position of the defendant within the wide spectrum. 120. In this case the respondents maintain for commercial reasons a forum with different discussion channels, the most popular of which is the so-called “leisure”[103] channel. Registered members of the forum would initiate discussion “threads” by posting comments thoughts and expressions which any user of the internet can read. Other subscribers respond. Thus a thread of dialogue develops. The heavier the traffic the greater the gain for the respondents, for they depend upon the number of “clicks” for their advertising income. It is not in the respondents’ commercial interest that those “threads” be dull and insipid in content. 121. Mr Michael Thomas SC’s first argument is that the respondents were the first or main publishers of the libel and as such they attract strict liability[104]. Libel is actionable per se, the law making the presumption that damage flows from it. And, being the first or main publishers, as Mr Thomas argues, the defence of innocent dissemination, as developed by the common law, is not available to the respondents. Mr Thomas relies on a passage in the judgment of Romer LJ in Vizetelly v Mudie’s Select Library, Limited [1900] 2 QB 170 at 180 where he said: “…The result of the cases is I think that, as regards a person who is not the printer or the first or main publisher of a work which contains a libel, but has only taken, what I may call, a subordinate part in disseminating it, in considering whether there has been publication of it by him, the particular circumstances under which he disseminated the work must be considered. If he did it in the ordinary way of his business, the nature of the business and the way in which it was conducted must be looked at; and, if he succeeds in shewing (1) that he was innocent of any knowledge of the libel contained in the work disseminated by him, (2) that there was nothing in the work or the circumstances under which it came to him or was disseminated by him which ought to have led him to suppose that it contained a libel, and (3) that, when the work was disseminated by him, it was not by any negligence on his part that he did not know that it contained the libel, then, although the dissemination of the work by him was prima facie publication of it, he may nevertheless, on proof of the before-mentioned facts, be held not to have published it. But the onus of proving such facts lies on him,…” Mr Thomas focusses upon the opening lines and submits that the respondents were “the first or main publishers”. 122. In the circumstances of this case, if Mr Thomas were right, the respondents had no defence and the appeal must succeed. So the first question is this: Were the respondents entitled to rely on the defence of innocent dissemination? 123. In answering this question I agree with Mr Justice Ribeiro PJ that the respondents, as forum hosts, must be treated as publishers of the defamatory statements: Though, obviously, not as first publishers; the first publishers being the authors of the statements who posted those statements in the forum intending that those statements be published. It is here, in my judgment, that the common law demonstrates its flexibility to accord with the changing times[105]. 124. In theory a forum host such as the respondents in this case has some control over the contents of the statements published through the medium of the website maintained by them. And the respondents have demonstrated that they had control in this case because, in relation to “the 2009 statements” (those posted on 21 January 2009), these were discovered by the respondents themselves the next day – not in response to a specific complaint by the appellants’ solicitors – and taken down immediately. But, in practice, as the courts below found, such control cannot be exercised across the board because of the huge volume of traffic generated by the forum. The respondents, unlike the editors of newspapers, cannot possibly know the content of the statements they publish; nor can they be equated with the operators of a television station such as the defendants in Thompson v Australian Capital Television PTY Limited [1996] 186 CLR 574 where the station owners chose to re-broadcast a live interview and had the means of control over the contents before they were broadcast: As Fok JA remarked at §104, it would have been relatively straight forward in Thompson to delay the transmission by a few minutes to determine whether any part of the material should be expurgated. On the facts of a case like the present, manual screening of the content was impossible and no technology has yet been invented to filter out defamatory statements by mechanical means. As Fok JA observed at §105, filtering by keywords was not possible since defamatory meaning could be communicated by a combination of words, which may individually be innocuous. 125. No reported case in the common law world has been found to fit the circumstances of this case. Godfrey v Demon Internet Ltd [2001] QB 201 comes fairly close. There the service provided by the defendant, called a “bulletin board”, was described by Morland J (at p.204G) as a “one-to-many publication from author to readers round the world”, available to those with access to a service called Usenet. A defamatory message was posted on the bulletin board; the plaintiff alerted the defendant to the existence of the offending posting; the posting was not removed; subscribers were able to read the offending message until it was automatically erased 10 days after the posting. The plaintiff claimed damages for libel in respect of the period when the message remained on the bulletin board after the defendant became aware of it. The question before Morland J was whether the defendant had an arguable defence under s.1(1)(b) and (c) of the Defamation Act 1996[106]. 126. Morland J held that the defendant was not “author, editor or publisher” of the statement complained of, in terms of s.1(1)(a) of the Act, so the issue boiled down to the question of reasonable care under sub-section (b) and knowledge and reasonable belief under sub-section (c). The judge held on the facts that the defence could not be made out and struck out that part of the pleadings. 127. There is no statutory equivalent of subsections 1 and 2 of the Defamation Act 1996 in Hong Kong, so the law has to be developed on common law principles, within the polarity of the two rights: Freedom of expression on the one hand, and protection of reputation on the other. In this context I would unhesitatingly reject Mr Thomas’ primary submission that the respondents must be regarded as first or main publisher, attracting strict liability. Such an approach would have an unacceptable “chilling effect” on freedom of expression. I would adopt Mr Justice Ribeiro PJ’s categorization of the respondents’ role as subordinate publishers, this being a better description. The common-law defence of innocent dissemination, as developed by Romer LJ in Vizetelly (see para. 121 above), is available to the respondents, as the two courts below have found. 128. As formulated in Vizetelly what a defendant must show, on a balance of probabilities, are: (i) he had no knowledge of the libel contained in the message disseminated by him; (ii) there was nothing in the circumstances which ought to have led him to suppose that the message contained a libel, and (iii) there was no negligence on his part in disseminating the libel. 129. Here, it was not the appellants’ case that the respondents knew of the 2008 and 2009 statements when they first appeared in the “leisure” channel. Their focus of attack was on the elements (ii) and (iii) above. As to these, there were concurrent findings of fact in the courts below, in favour of the respondents, though the trial judge’s findings were somewhat sparse. 130. As mentioned earlier, the respondents’ commercial success depends largely upon polemics and controversy: dull and insipid threads posted in their “leisure” channel are unlikely to attract lively participation. Commonsense suggests that, given such a set-up, defamatory statements would be posted from time to time. But the respondents had rules which prohibited objectionable postings, and a subscriber who violated the rules could have his membership suspended or cancelled. 131. This appeal, on the facts, comes within a narrow compass. It is confined to the 2008 and 2009 statements. Mr Thomas, for the appellants, puts emphasis on this point: When the October 2008 words were published, the respondents had already been sued by the appellants in relation to the March 2007 statement, so the respondents should have been alerted to the possibility of recurrence. These points were fully explored in the courts below. The findings of those courts were that the elements in para (ii) and (iii) above were satisfied. These are not findings which this Court can disturb. In so concluding I say nothing about the situation where, to the knowledge of the respondents, a person (such as Mr Ma Ching Kwan the 6th appellant) or the Oriental Press Group have been deliberately targeted by defamatory statements from groups of anonymous subscribers. In these circumstances, to merely employ two administrators to monitor forum discussion for six to eight hours a day, five days a week, may not be enough. Whilst keywords to identify defamatory statements may not be possible, is there any reason why the identities of key persons cannot be high-lighted and brought to the attention of the administrators? This was not an aspect of the case which was explored either in the courts below or before us. I therefore say nothing more about it. 132. I agree with Mr Justice Ribeiro PJ’s judgment. Mr Justice GleesonNPJ: 133. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 134. For the reasons contained in the judgment of Mr Justice Ribeiro PJ, this appeal is unanimously dismissed. As to costs, an order nisi is made in terms of paragraph 114 above. Mr Michael Thomas SC and Mr Lawrence Ng instructed by Iu, Lai & Li for the Appellants Mr John Reading SC and Ms Elizabeth Herbert instructed by Oldham, Li & Nie for the Respondents [1] A third action has been stayed pending the outcome of these proceedings. [2] HCA 2140/2008. [3] Dealt with by the Court of Appeal in HKSAR v Lo Hon-hing CACC No 107 of 2007 (12 September 2008). [4] HCA 597/2009. [5] Chung J, HCA 2140/2008 and HCA 597/2009, 25 February 2011. [6] [2012] 1 HKLRD 848, Fok JA delivering the judgment on liability and Hartmann JA dealing with damages; Tang VP agreeing. [7] Universal Resource Location, that is, the sequence of letters that identifies and locates resources on the World Wide Web and on the computer hosting the particular website. [8] It was suggested at the hearing that the Chinese title of the channel is better translated as “Gossip” rather than “Leisure”. [9] Appearing with Mr Lawrence K F Ng for the appellants. [10] Gatley on Libel and Slander (Sweet & Maxwell, 11th Ed), §§1.7-1.8, citing Lord Atkin in Sim v Stretch (1936) 52 TLR 669 (HL) at 671. For other formulations of the meaning of “defamatory” see Duncan and Neill on Defamation (Lexis Nexis, 3rd Ed), §§4.01-4.02. [11] Webb v Bloch (1928) 41 CLR 331 at 363. See also Gatley, §6.1 and §6.14. [12] (2002) 210 CLR 575 at §26, per Gleeson CJ, McHugh, Gummow and Hayne JJ. [13] Vizetelly v Mudie’s Select Library [1900] 2 QB 170 at 179; Godfrey v Demon Internet Ltd [2001] QB 201 at 207 per Morland J; Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at §25. [14] Folkard on Slander and Libel, 5th ed (1891), at p 439, cited by Isaacs J in Webb v Bloch (1928) 41 CLR 331 at 363-364. [15] [2011] 3 SCR 269 at §18. [16] Gatley, at §§6.4, 6.10-6.11. [17] Pullman v Walter Hill & Co [1891] 1 QB 524 at 527. [18] At §6.4. [19] At §6.5, footnotes omitted. [20] (1886) 16 QBD 354. [21] [1900] 2 QB 170. [22] The Duke of Brunswick and Luneberg v Harmer (1849) 14 QB 184. [23] Emmens v Pottle (1886) 16 QBD 354 at 357. [24] At 357-358. [25] [1900] 2 QB 170 at 180. [26] (1996) 186 CLR 574 at 592. [27] See Godfrey v Demon Internet Ltd [2001] QB 201 at 204. Section 1(1) of the 1996 Act provides: “(1) In defamation proceedings a person has a defence if he shows that--(a) he was not the author, editor or publisher of the statement complained of, (b) he took reasonable care in relation to its publication, and (c) he did not know, and had no reason to believe, that what he did caused or contributed to the publication of a defamatory statement.” [28] Adopted in McPhersons Ltd v Hickie (unreported) No. 40290 of 1994 Supreme Court of New South Wales Court of Appeal, p 6 per Powell JA; and in the recent English Court of Appeal decision in Tamiz v Google Inc [2013] EMLR 14 at §§26-36, per Richards LJ. [29] Duncan and Neill on Defamation, 2nd Ed, 1983, p 110, fn 3. The discussion in the current edition focusses on the statutory defence provided by section 1 of the Defamation Act 1996. [30] (1996) 186 CLR 574 at 586. [31] [1937] 1 KB 818. [32] [1937] 1 KB 818 at 822. [33] Who dissented on the question of defamatory meaning, the majority holding that the words were not capable of being defamatory. [34] [1937] 1 KB 818 at 834-835. [35] At 837. [36] At 837-838. [37] At 838. [38] (1952) 244 P 2d 757. [39] At 759. [40] At 759-760. [41] (1991) Aust Torts Reports §81-127. [42] At 69,193. [43] At 69,195. [44] Godfrey v Demon Internet Ltd [2001] QB 201 at 208; Davison v Habeeb and others [2011] EWHC 3031 at §34; Tamiz v Google Inc [2013] EMLR 14 at §26-36. [45] [2013] EMLR 14, which was adopted by Courtney J in the High Court of New Zealand in Wishart v Murray [2013] NZHC 540 at §§111-116. [46] In Section D. [47] [2013] EMLR 14 at §33. I also do not, with respect, subscribe to the analysis of this line of cases adopted by Dr Matthew Collins in “The Law of Defamation and the Internet” (OUP 3rd Ed) at §6.29-§6.34. [48] Godfrey v Demon Internet Ltd [2001] QB 201 at 209-210; Tsichlas v Touch Line Media Pty Ltd 2004 (2) SA 112 at 123; Bunt v Tilley [2007] 1 WLR 1243 at §37; Tamiz v Google Inc [2013] EMLR 14 (CA) at §23; Wishart v Murray [2013] NZHC 540 at §110, §117. [49] Leaving printers aside for the moment. [50] (1996) 186 CLR 574. [51] “The Today Show”. [52] (1996) 186 CLR 574 at 589-590. [53] Knight Professor of Constitutional Law and the First Amendment, Yale Law School. Paper prepared for the Global Constitutionalism Seminar, 2010, Yale Law School, adapted from Jack M Balkin, Media Access: A Question of Design, 76 George Washington L Rev 933 (2008). [54] [2007] 1 WLR 1243 at §21. [55] (1996) 186 CLR 574 at 592. [56] At 596. [57] In Section B. [58] Godfrey v Demon Internet Ltd[2001] QB 201 at 208-209; Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575 at §§14-16, 44; Loutchansky v Times Newspapers Ltd (Nos. 2-5) [2002] QB 783 at §58. [59] Gatley at §6.4. [60] (1886) 16 QBD 354 at 357. [61] Although they may nowadays better be viewed as subordinate publishers. [62] (1886) 16 QBD 354 at 357. [63] Vizetelly v Mudie’s Select Library [1900] 2 QB 170 at 180. [64] Thompson v Australian Capital TV Ltd (1996) 186 CLR 574. [65] At 586-587. [66] [2007] 1 WLR 1243 at §§22-23. [67] (1886) 16 QBD 354 at 357 (Italics supplied). [68] Vizetelly v Mudie’s Select Library Limited [1900] 2 QB 170 at 180 (Italics supplied). [69] See Eady J in Bunt v Tilley [2007] 1 WLR 1243 at §23, as to the irrelevance of knowledge regarding the legal significance of the statement published. [70] (1996) 186 CLR 574. [71] Per Brennan CJ, Dawson and Toohey JJ, at 589-590. [72] [2007] 1 WLR 1243 at §21. [73] [2011] 3 SCR 269. [74] Abella J with Binnie, leBel, Charron, Rothstein and Cromwell JJ; with whom McLachlin CJ and Fish J substantially agreed. [75] [2011] 3 SCR 269 at §26 (Italics in the original). [76] [2005] NSWSC 636. [77] [2013] NZHC 540. [78] In Section E. [79] [2011] 1 WLR 1743 at §54. [80] At §56. [81] At §58. [82] Judge at §56, Court of Appeal at §129. [83] Judge at §77. [84] Court of Appeal §50. [85] Judge at §§55 and 67. [86] Judge at §67, Court of Appeal at §105. [87] Court of Appeal at §138. [88] Affirmation of Lam Cho Shun, 23 September 2009, §7(b). [89] Judge at §§77 and 80; Court of Appeal at §140. [90] Basic Law, Article 27 and Bill of Rights, Article 16. [91] [2001] 2 AC 127 at 238. [92] (2002) 210 CLR 575 at §23, per Gleeson CJ, McHugh, Gummow and Hayne JJ. [93] [2011] 3 SCR 269 at §37. [94] Lyrissa Barnett Lidsky, “Silencing John Doe: Defamation & Discourse in Cyberspace” (2000), 49 Duke LJ 855, at 863-64. [95] (2002) 210 CLR 575 at §88. [96] At §164. [97] Section I above. [98] Section J above. [99] Section K above. [100] Section L above. [101] “Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers….” See p.550-F [102] See Panday v Gordon [2006] 1 AC 427 at 436-E per Lord Nicholls of Birkenhead: “The purpose of the law of defamation is to hold a balance between freedom of speech and the right to reputation. The basic position at which the common law holds this balance is to impose strict liability for defamatory statements in the absence of justification.” [103] In Chinese “吹水台”, a vulgar expression meaning “gossip channel”. [104] “Defamation is committed when the defendant publishes to a third person word or matters containing an untrue imputation against the reputation of the claimant”: Gatley on Libel and Slander : 11th ed. para. 1.6 [105] As Lord Roskill said in a different context: “New situations regularly arise in the practice of the law which require previously held and sometimes generally accepted views to be reviewed and if necessary to be revised in the light of that new situation. Indeed, the evolution of the common law of this country to meet the changing needs of contemporary society and its adaptability to change owes much to judicial acceptance of this philosophy.” Home Office v Harman [1983] 1 AC 280 at 320G [106] “Responsibility for publication (1) In defamation proceedings a person has a defence if he shows that – (a) he was not the author, editor or publisher of the statement complained of, (b) he took reasonable care in relation to its publication, and (c) he did not know, and had no reason to believe, that what he did caused or contributed to the publication of a defamatory statement.” It should be noted that for the defence to succeed (a) and (b) and (c) have to be established by the defendant. Section 1 continues: “(2) For this purpose…. ‘publisher’ [has] the following meanings, which are further explained in subsection (3)…. ‘publisher’ means a commercial publisher, that is, a person whose business is issuing material to the public, or a section of the public, who issues material containing the statement in the course of that business.”
The Court: 1. This appeal arises in connection with an unsuccessful application made on behalf of the appellant by his mother, when he was a child aged 10, for verification of his eligibility for a Permanent Identity Card with a view to establishing that he enjoyed the status of Hong Kong permanent resident and a right of abode. 2. After the application was refused by the Immigration Department, the appellant applied to be issued with a juvenile Hong Kong Permanent Identity Card. That application was refused by the Commissioner of Registration (the 1st respondent). The appellant appealed to the Registration of Persons Tribunal[1] and his appeal was dismissed. That led to an application for leave to apply for judicial review. Leave was granted, but the substantive application was dismissed by Lam J.[2] His appeal to the Court of Appeal was dismissed.[3] Leave to appeal was granted by the Appeal Committee[4] after the Court of Appeal’s refusal.[5] 3. Leave was granted on the basis that the following questions of great general or public importance are involved in this appeal: (1) For the purpose of qualifying as a HKSAR permanent resident under Article 24(2)(4) of Basic Law, what must a child or young adult applicant who is a non-Chinese national born in Hong Kong and whose application is made before he or she reaches the age of 21 establish, either on his own or by a parent or legal guardian on his or her behalf, to satisfy the requirement under Article 24(2)(4) of “having taken Hong Kong as [his or her] place of permanent residence”? (“The first question”) (2) For the purposes of Article 24 and Article 31 of the Basic Law, whether and under what circumstances a person exempted from the requirement of registration under the laws of the HKSAR and given permission to remain in Hong Kong as a visitor may become or be recognized as a non-permanent resident of the HKSAR to enjoy the freedom to travel and to enter and leave the HKSAR. (“The second question”) 4. These two questions reflect the grounds of appeal. The appellant contends that the Tribunal and the Courts below erred, first, in their approach to deciding whether he had satisfied the requirement of “having taken Hong Kong as [his] place of permanent residence”; and secondly, in their approach to ascertaining whether he had satisfied the requirement of seven-years’ continuous ordinary residence for the purposes of Article 24(2)(4). Ms Gladys Li SC[6] accepts that she must succeed on both grounds if the appeal is to be allowed. The relief which she seeks in that event is for the case to be remitted to the Tribunal with appropriate directions as to the correct approach to adopt in determining the two issues mentioned. 5. The appellant’s mother, Ms Josephine Balando Gutierrez, a Philippine national who had been employed as a foreign domestic helper in Hong Kong since July 1991, had lodged her own verification application along with that of the appellant. The proceedings regarding her application followed a parallel course, leading to Lam J’s dismissal of the judicial review applications made on behalf of herself and her son. However, after this Court’s decision in Vallejos v Commissioner of Registration,[7] Ms Gutierrez abandoned her appeal and only her son’s case proceeded to the Court of Appeal and is presently being pursued. It is nonetheless necessary, in dealing with the first question, to consider Ms Gutierrez’s situation while examining the circumstances of the appellant’s residence in Hong Kong. The first question A.1 The circumstances of the appellant and his mother 6. Ms Gutierrez was born in the Philippines on 23 September 1963. She married Mr Marcial B Gutierrez in 1977 and four children were born of that union between 1980 and 1987, before the couple separated. On 6 June 1991, Ms Gutierrez was issued with a visa and commenced employment as a foreign domestic helper in Hong Kong in July 1991. 7. Between then and the making of the verification applications, Ms Gutierrez lived in Hong Kong, engaged as a foreign domestic helper by seven different employers over periods of employment varying between 8 months and six years.[8] 8. The appellant was born on 1 December 1996, between the end of Ms Gutierrez’s fourth employment (23 April 1996) and the start of her fifth (19 June 1997), while she was in Hong Kong on a visitor’s visa[9] which evidently covered the period of her pregnancy. The appellant’s father is said to be a United States citizen to whom Ms Gutierrez was not married and with whom she has lost contact. 9. After his birth, the appellant was granted a visitor’s visa until he went to the Philippines on 30 August 1997, having been issued with a Philippine passport on 26 March 1997. Some four months later, he returned to Hong Kong and, with numerous visitor visa extensions, he has lived continuously (except for certain periods of absence discussed later) with his mother at the premises of her various employers up to and after the making of his verification application on 20 December 2006. 10. The Court of Appeal[10] summarised the circumstances of the appellant relied on by his mother in an affirmation filed on his behalf in the proceedings before the Tribunal in the following terms: “(1) Joseph had no home in the Philippines and spoke little Tagalog; (2) he had completely integrated into Hong Kong society where he has all his friends; (3) he speaks fluent English and some Mandarin and Cantonese, which he learns at school here; (4) he and she enjoyed a close relationship with her employer’s family and Joseph and her employer’s son treat each other like brothers; (5) he has two half-brothers working in Hong Kong at the time the affirmation was made; (6) Joseph is an active participant in sports at the local residents’ club, and is a keen football player; and (7) he had told his mother that he wishes to be a pilot when he grows up and she had enrolled him in a ‘Basics of Flying’ course organised by Cathay Pacific.” 11. It is on the basis of that evidence that the appellant submits that he qualifies as a Hong Kong permanent resident and that the Commissioner was wrong to refuse to issue him with a permanent identity card. A.2 Hong Kong residents under the Basic Law 12. Article 24 of the Basic Law lays down the qualifying conditions for the status of Hong Kong resident, both permanent and non-permanent, as follows: Article 24 (1) Residents of the Hong Kong Special Administrative Region (“Hong Kong residents”) shall include permanent and non-permanent residents. (2) The permanent residents of the Hong Kong Special Administrative Region shall be: (1) Chinese citizens born in Hong Kong before or after the establishment of the Hong Kong Special Administrative Region; (2) Chinese citizens who have ordinarily resided in Hong Kong for a continuous period of not less than seven years before or after the establishment of the Hong Kong Special Administrative Region; (3) Persons of Chinese nationality born outside Hong Kong of those residents listed in categories (1) and (2); (4) Persons not of Chinese nationality who have entered Hong Kong with valid travel documents, have ordinarily resided in Hong Kong for a continuous period of not less than seven years and have taken Hong Kong as their place of permanent residence before or after the establishment of the Hong Kong Special Administrative Region. (5) Persons under 21 years of age born in Hong Kong of those residents listed in category (4) before or after the establishment of the Hong Kong Special Administrative Region; (6) Persons other than those residents listed in categories (1) to (5), who, before the establishment of the Hong Kong Special Administrative Region, had the right of abode in Hong Kong only. (3) The above-mentioned residents shall have the right of abode in the Hong Kong Special Administrative Region and shall be qualified to obtain, in accordance with the laws of the Region, permanent identity cards which state their right of abode. (4) The non-permanent residents of the Hong Kong Special Administrative Region shall be persons who are qualified to obtain Hong Kong identity cards in accordance with the laws of the Region but have no right of abode. 13. The appellant’s claim to be entitled to the status of Hong Kong permanent resident rests on Article 24(2)(4). He plainly does not come within any of the other categories. A.3 Requirements for establishing permanent residence status 14. As is well-established, a fair and reasonable statutory scheme for the proper verification of a person’s claim to right of abode which does not exceed the verification function is constitutionally valid and, until such claim is verified, the applicant does not enjoy the rights of a permanent resident.[11] 15. Schedule 1 of the Immigration Ordinance[12] establishes the machinery for such verification. It begins by reciting the six categories of persons who are permanent residents set out in Article 24(2), its paragraph 2(d) reproducing the category of persons not of Chinese nationality referred to in Article 24(2)(4). 16. Schedule 1, paragraph 3 then sets out the requirements for establishing that someone qualifies as a person who comes within that category, stating: (1) For the purposes of paragraph 2(d), the person is required- (a) to furnish information that the Director [of Immigration] reasonably requires to satisfy him that the person has taken Hong Kong as his place of permanent residence. The information may include the following – (i) whether he has habitual residence in Hong Kong; (ii) whether the principal members of his family (spouse and minor children) are in Hong Kong; (iii) whether he has a reasonable means of income to support himself and his family; (iv) whether he has paid his taxes in accordance with the law; (b) to make a declaration in the form the Director stipulates that he has taken Hong Kong as his place of permanent residence; the declaration for a person under the age of 21 years must be made by one of his parents or by a legal guardian; and (c) to be settled in Hong Kong at the time of the declaration. (2) A person claiming to have the status of a permanent resident of the Hong Kong Special Administrative Region under paragraph 2(d) does not have the status of a permanent resident in the Hong Kong Special Administrative Region until he has applied to the Director and the application has been approved by the Director. (3) For the purposes of paragraph 2(d), a person is taken to have entered Hong Kong on a valid travel document- (a) ... (b) if he was born in Hong Kong and was permitted to remain in Hong Kong by an immigration officer or an immigration assistant. 17. The requirement in Schedule 1, paragraph 3(1)(c) for the applicant “to be settled in Hong Kong at the time of the declaration” was defined in Schedule 1, paragraph 1(5)[13] as involving two elements, namely, that the person is ordinarily resident in Hong Kong and that “he is not subject to any limit of stay in Hong Kong”. This Court held in Prem Singh v Director of Immigration,[14] that the second element imported a condition incompatible with the requirements of Article 24(2)(4) and was unconstitutional. It follows that Schedule 1, paragraphs 1(5) and 3 must now be read so that the requirement of “being settled” in Hong Kong is met by being ordinarily resident here, without having to show that one is not subject to a “limit of stay”. A.4 Prem Singh 18. As the Court noted in Prem Singh,to qualify under Article 24(2)(4), it must be shown that the person concerned: (a) entered Hong Kong with a valid travel document (“the entry requirement”); (b) has ordinarily resided here for a continuous period of not less than seven years (“the seven-year requirement”); and (c) has taken Hong Kong as his place of permanent residence (“the permanence requirement”). 19. The entry requirement is not in dispute. The appellant is taken to have entered Hong Kong on a valid travel document since he was born in Hong Kong and was lawfully permitted to remain.[15] As previously noted, the issues are whether he satisfies the permanence and seven-year requirements, the permanence requirement being the subject of the Appeal Committee’s first question and the first ground of appeal presently being discussed. The seven-year requirement is dealt with in Section B of this judgment. 20. In Prem Singh, it was held that the wording, and especially the tense used by Article 24(2)(4) in requiring persons concerned to “have taken Hong Kong as their place of permanent residence”, meant that an applicant, when putting forward his claim for verification by the Director, had to be able to point to facts which had already occurred permitting him to say that he had, starting at some prior point in time, already taken Hong Kong as his place of permanent residence.[16] This was so while recognizing that the permanence requirement imports “the quality of a past, present and future commitment to establishing and maintaining a permanent residence in Hong Kong.”[17] It was held that the permanence requirement “makes it necessary for the applicant to satisfy the Director both that he intends to establish his permanent home in Hong Kong and that he has taken concrete steps to do so”.[18] He must, in other words, show that his residence here is “intended to be more than ordinary residence and that he intends and has taken action to make Hong Kong, and Hong Kong alone, his place of permanent residence,”[19] meaning that he intends to reside in Hong Kong “permanently or indefinitely, rather than for a limited period”.[20] A.5 The decisions of the Courts below 21. Lam J held that the Tribunal had not erred. He decided that, applying Prem Singh, the Tribunal had correctly found that the matters relied on failed to establish that requisite steps had been taken by the appellant or by his mother on his behalf to show that he had taken Hong Kong as his place of permanent residence.[21] 22. The Court of Appeal decided that the Tribunal had erred to the extent of rigidly equating the appellant’s position with that of his mother, so that her inability to meet the permanence requirement was regarded as necessarily entailing the like inability on his part. It held that while, as a matter of common sense, in the vast majority of cases a child’s position would follow that of the parent, the status of one does not necessarily follow the other, unusual though divergence might be.[22] Their Lordships decided, however, that it was unnecessary to remit the matter to the Tribunal because they were satisfied “that the mother came nowhere near establishing that the appellant, through her, had taken Hong Kong as his permanent place of residence”.[23] 23. The Court of Appeal suggested that the crucial question was: “What were the mother’s proposals for her son in the event that her contract of employment was terminated so that she had to return to the Philippines?” It took the view that the only plausible answers were either that she would take him with her or that she did not yet know although she hoped that someone would agree to provide him with accommodation and support until he was able to support himself. It held that accordingly there was no basis for concluding that the appellant had taken Hong Kong as his place of permanent residence and that the application was rightly dismissed. A.6 The appellant’s argument as to the proper test 24. Ms Li SC invites the Court to re-visit its decision in Prem Singh, submitting that the discussionin that case of what has to be established to qualify as a permanent resident under Article 24(2)(4) was not necessary to the decision and thus obiter. 25. The appellant’s printed case points out that Prem Singh[24] involved an adult non‑Chinese migrant coming to Hong Kong to work, and forming and raising a family in Hong Kong.[25] It makes the argument that the principles derived from that decision cannot appropriately be applied to children or young adults, pointing out that (other than showing habitual residence) the typical information that the Director may require an applicant to furnish[26] involves the presence of a spouse and children in Hong Kong; having a reasonable means of income to support himself and his family; and having paid his taxes: matters self-evidently applicable only to adults.[27] It is accordingly argued that applicants for permanent resident status under Article 24(2)(4) who were born in Hong Kong and have lived in Hong Kong since birth stand in a class of their own and should not to be dealt with applying the principles referred to in Prem Singh.[28] The United Nations Convention on the Rights of the Child is invoked in support. 26. However, in her oral submissions, Ms Li modified her position. She submitted that she was not contending that the Prem Singh decision should be confined to adults or for a different test to be applied to children. It was argued that Prem Singh’s interpretation of Article 24(2)(4) was either wrong or had been misunderstood in its application by the Courts below.[29] Three main criticisms of Prem Singh or of those decisions below were advanced, namely: (a) That Prem Singh’s reference to the need to demonstrate “concrete steps” which indicated that an applicant has taken Hong Kong as his place of permanent residence,[30] had led the Courts below wrongly to insist on the appellant demonstrating that positive steps had been taken directed at making Hong Kong his permanent home, a requirement said to be unwarranted by the wording of Article 24(2)(4) and impossible for a boy of 10 to satisfy; (b) That there has developed an erroneous belief that for an applicant to come within Article 24(2)(4), he has to show that all links with other countries have been severed; and, (c) That Prem Singh’s requirement that an applicant must show that he intends “more than ordinary residence” has led to the Courts enforcing a strict and mutually exclusive dichotomy between facts capable of supporting ordinary residence and facts supporting the permanence requirement, instead of looking at all the circumstances. 27. Ms Li proposes that on a proper interpretation of Article 24(2)(4), apart from an applicant’s parent or guardian making the declaration that the applicant has taken Hong Kong as his place of permanent residence[31] and apart from showing habitual residence in Hong Kong, it is or ought to be only necessary to show (a) the maintenance of an ordinary or regular pattern of life in Hong Kong; and (b) the reasonable prospect of the maintenance of such an ordinary or regular pattern of life in Hong Kong. In relation to (b), Counsel argues that instead of asking for evidence of concrete steps taken, it should be enough for an applicant to demonstrate that his declared intention of taking Hong Kong as the place of permanent residence is genuinely held, realistic and realisable. It is submitted that the appellant is capable of passing these tests. A.7 The applicable test A.7a Necessary to the decision 28. We do not accept that an examination of the requirements for bringing oneself within Article 24(2)(4) was not necessary to the decision in Prem Singh. That examination was carried out in the context of deciding whether the limit of stay requirement was constitutionally valid.[32] The Court held that in necessitating applicants to “have taken” Hong Kong as their place of permanent residence, the Basic Law necessarily envisaged that all the facts necessary to satisfy the permanence requirement were capable of coming into existence before the date of the application. It was important for the Court to identify the nature of such facts to enable it to ascertain that such facts would come into existence during the period when the applicant could be expected to be subject to a limit of stay imposed by the Director. It was on that basis that the Court held that the limit of stay condition was unconstitutional since it unjustifiably grafted onto the qualifications for permanent resident status under Article 24(2)(4), a discretion which enabled the Director to determine administratively whether an applicant should acquire such status simply by deciding or refusing to annul the limit of stay condition. Ascertainment of the requirements of Article 24(2)(4) was therefore a necessary part of the Court’s reasoning. A.7b Children and young adults 29. It is true that Prem Singh was a case which concerned an adult non‑Chinese migrant who had come to Hong Kong to work, whereas the appellant is a non-Chinese child who was born in Hong Kong. It is unfortunate for him that the Basic Law does not distinguish between adults and children for Article 24(2)(4) purposes. In Article 24(2)(5), the Basic Law specifically addresses the position of non-Chinese children born in Hong Kong, granting them permanent resident status if they are under the age of 21 and if they were born of non-Chinese residents who qualify for permanent residence under Article 24(2)(4). But a child like the appellant, not of Chinese nationality, born in Hong Kong but not of residents within Article 24(2)(4), cannot rely on Article 24(2)(5). He can only qualify for permanent resident status if he comes within Article 24(2)(4), meeting the requirements explained in Prem Singh. The submission in the appellant’s printed case that children and young adults stand in a different class, requiring a different test to be devised therefore cannot be accepted. A.7c Ms Li’s proposed test 30. The test proposed by Ms Li is not consistent with Article 24(2)(4). It seeks to translate the permanence requirement into a requirement for showing[33] merely (i) the maintenance by the applicant of an ordinary or regular pattern of life in Hong Kong; and (ii) the reasonable prospect of the maintenance of such an ordinary or regular pattern of life in Hong Kong,[34] the latter condition requiring the applicant merely to demonstrate that his declared intention of taking Hong Kong as the place of permanent residence is genuinely held, realistic and realisable.[35] 31. Such a test is inconsistent with Article 24(2)(4) first, because as pointed out in Prem Singh,[36] Article 24(2)(4) makes it clear that more than ordinary residence is required. It specifies the permanence requirement as an element additional to the seven-year requirement. It is therefore not enough merely to show ordinary residence and an intention to continue to be ordinarily resident. Secondly, the words “have taken Hong Kong as their place of permanent residence” are properly construed as importing both subjective and objective requirements. The element of permanence connotes a subjective commitment to maintaining a residence in Hong Kong, while the need to “have taken Hong Kong (etc)” denotes the existence of objective facts constituting such “taking”. Ms Li’s proposal eliminates all need for objective evidence, replacing it with an assessment of the applicant’s declared intention to continue being ordinarily resident in the future. Given the content of Article 24(2)(4), it is not plausible to suggest that the drafters of the Basic Law intended that ordinary residence accompanied by a mere declaration of intent without the support of concrete, objective evidence, would suffice to meet the permanence requirement. 32. That more than ordinary residence is required under Article 24(2)(4) is reinforced by comparing that Article with Article 24(2)(2) which, in relation to Chinese citizens, only requires ordinary residence in Hong Kong for a continuous period of not less than seven years, making no mention of having taken Hong Kong as the applicant’s place of permanent residence. A.7d “Concrete steps” 33. The reference in Prem Singh to “concrete steps” must be read in its proper context. It appears in the course of discussing what evidence an applicant is required to produce with a view to meeting the permanence requirement in Article 24(2)(4). The discussion begins at §60 with a reference to the wording and tense employed by the Article (requiring applicants to “have taken Hong Kong as their place of permanent residence”) which were held to indicate: “...that an applicant, at the moment of putting forward his claim for verification by the Director, is required to point to facts which have already occurred permitting him to say that he has, starting at some point in time prior to the making of his application, already taken Hong Kong as his place of permanent residence.” (Additional emphasis added) 34. In the same vein, the next paragraph (§61) states: “...BL art.24(2)(4) recognizes that all the facts necessary to satisfy the permanence requirement are capable of coming into existence weeks, months or even years before the date of the application so that in putting the application forward, the claimant is able to say: ‘I have taken Hong Kong as my place of permanent residence’ since a date in the past.” (Emphasis added) 35. The proposition in these paragraphs is therefore that the Director may require evidence of any factswhich are already in existence which tend to show that the applicant “has taken Hong Kong, etc” so as to meet the permanence requirement. There is no suggestion in these paragraphs that such evidence is confined to any particular class of fact. 36. The reference to “concrete steps” occurs at §64 in the statement that: “The permanence requirement makes it necessary for the applicant to satisfy the Director both that he intends to establish his permanent home in Hong Kong and that he has taken concrete steps to do so. This means that the applicant must show that his residence here is intended to be more than ordinary residence and that he intends and has taken action to make Hong Kong, and Hong Kong alone, his place of permanent residence.” 37. As the context shows, those words were used to emphasize that there are both subjective and an objective elements in the permanence requirement: the applicant must show that he subjectively intends to establish his permanent home in Hong Kong and that he objectively has taken action to achieve that. They are words which emphasise that intention alone is not enough and that it is necessary for there to be some objective evidence of having taken Hong Kong as the applicant’s permanent home. 38. The same applies to §66 which states: “The intention must be to reside, and the steps taken by the applicant must be with a view to residing, in Hong Kong permanently or indefinitely, rather than for a limited period. Such intention and conduct must also be addressed to Hong Kong alone as the applicant's only place of permanent residence.” 39. The emphasis is again on the dual requirement of “intention and conduct”, without suggesting that the evidence is restricted to any particular class of fact or “conduct”. 40. If Ms Li is right in suggesting that some have taken the reference to “concrete steps” to mean that the only evidence which may be relied on to meet the permanence requirement is evidence of particular positive steps directed specifically to the taking of Hong Kong as one’s place of permanent residence, that is an unfortunate and unintended reading of those paragraphs in Prem Singh. Plainly, the Court was pointing to the need to refer concretely to objective facts and not just a statement of intent. But while clearly holding that evidence of such objective facts is needed, the judgment cannot properly be read as confining such evidence or such facts to any particular category. Thus, the facts and circumstances which surround any conduct relied on for the purpose of satisfying the permanence requirement may be just as relevant as the conduct itself. Indeed, conduct which may be described as involving an omission rather than positive steps, if tending to show that the permanence requirement is met, would plainly be relevant. Reading the passages mentioned above as a whole, it would plainly be inappropriate to ignore such facts and circumstances. 41. It is clear that the Court of Appeal at least did not fall into the suggested error. Fok JA stated: “Ribeiro PJ did not suggest what ‘concrete steps’ might be sufficient to satisfy the Director that an applicant has taken Hong Kong as his place of permanent residence. There is no doubt that this was deliberate. It would not be sensible for any court to seek to lay down a list of such steps for otherwise such a list might be interpreted as a definitive guide to the objective facts necessary to demonstrate the fact of having taken Hong Kong as a place of permanent residence. There is nothing in the Basic Law or Immigration Ordinance suggesting that the relevant facts required to be demonstrated can be definitively stated. Instead, what will be sufficient in any given case must depend on the individual facts of that case.”[37] 42. Stock VP similarly stated: “What steps must have been taken to translate intention into reality is not a matter for prescription. It is, rather, a matter to be assessed objectively and with common sense having regard to the particular applicant and all the relevant circumstances, which will, of course, vary from case to case.”[38] 43. At first instance, while Lam J apparently placed greater weight on the need for “concrete steps” when dealing with the mother’s claim, he took a broader view when considering the appellant’s situation with regard to the permanence requirement. His Lordship accepted Ms Li’s submission that it would be wrong to confine the evidence relevant to the mother’s position as if it were a rule of law, agreeing that “it is necessary to have regard to the individual facts of the case”.[39] Where the Court of Appeal disagreed with Lam J was in respect of his view that the Tribunal had not adopted that criticised rigid approach mentioned above.[40] A.7e Severance of links 44. We are not aware of any judgment where the alleged error complained of has been made. Prem Singh certainly does not suggest that the permanence requirement obliges an applicant to sever links with other countries. No doubt because of the way the case was argued before him, Lam J does mention the severance of links as possibly a relevant factor but his Lordship is certainly not suggesting that it is a necessary condition. He correctly focuses instead on what has been done to turn the aspiration of making Hong Kong one’s permanent home into a realistic proposition.[41] 45. Plainly, an applicant who provides evidence of intent and conduct to show that he has taken Hong Kong alone as the place where he plans to live permanently or indefinitely is not excluded from acquiring permanent residence because he owns property abroad, has close relatives residing in another country or maintains other kinds of foreign links. A.7f Exclusive dichotomy 46. We are also unaware of any tendency in the case-law for the courts to treat evidence supporting ordinary residence as something to be hermetically segregated from and inapplicable to the establishment of the permanence requirement. Certainly, the Courts below did not espouse such an erroneous approach. 47. Lam J observed that evidence which was merely referable to ordinary residence was “not per se sufficient”, pointing out that Prem Singh made it clear that the permanence requirement demands more than ordinary residence. He continued: “Having said so, it does not mean that actions or conducts referable to ordinary residence would not be relevant at all. I can readily envisage that there are cases where the concrete step relied upon by an applicant has to be considered in light of other actions or conducts for the purpose of assessing the intention of the applicant behind such step ...”[42] 48. As we have already seen,[43] in the Court of Appeal, Stock VP and Fok JA both stressed the need to consider all the circumstances of the case in deciding whether the permanence requirement has been satisfied. Their Lordships would certainly have rejected any argument proposing the strict dichotomy complained of. A.8 The test applied in the present case 49. As noted above,[44] the Court of Appeal rejected the Tribunal’s conclusion that the appellant’s situation was necessarily the same as his mother’s, so that her inability to meet the permanence requirement meant that he was in the same position. And, as just pointed out, the Court of Appeal stressed that ascertaining whether the permanence requirement was satisfied involved a fact-specific inquiry where all relevant circumstances had to be considered. Their Lordships were clearly right to hold[45] that the appellant’s case has to be considered individually in the light of all relevant circumstances. But that, of course, does not mean that the situation of his mother is irrelevant or should not be taken into account. 50. Looked at individually, the centrally important feature of the appellant’s case is obviously that he was 10 years old when he made his claim for permanent residence. We agree with Lord Pannick’s submission that one would not in general expect a child aged 10 independently to form the intention or to possess the means to establish his own place of permanent residence. As the Court of Appeal acknowledged, there may be rare occasions where that may occur, but in the great majority of cases, the child will be living with and dependent upon the support of his parents or guardian so that the child’s position will for practical purposes follow that of his parents or guardian.[46] Applying the Prem Singh principles individually to a child like the appellant, one would take into account all relevant circumstances, asking whether there is evidence of conduct or arrangements made on his behalf or for his benefit, by his parents, guardian or otherwise (including by himself in the rare case whether that is possible), showing that he has taken Hong Kong as his place of permanent residence. 51. The matters relied on in support of the appellant’s application are set out above.[47] They include the fact that he has no home in the Philippines and speaks no Tagalog, speaking English and some Chinese instead; and that he has formed some close friendships and takes part in sporting and other social activities in Hong Kong. These are matters which indicate that he has been ordinarily resident in Hong Kong, but provide no basis for thinking that, at the age of 10, he had the independent capacity to take and had already taken Hong Kong as his place of permanent residence. 52. The appellant’s mother was not qualified for ordinary residence while employed as a foreign domestic helper, by reason of Section 2(4)(a)(vi) of the Immigration Ordinance.[48] The Tribunal also found that she had not herself taken Hong Kong as her place of permanent residence,[49] a finding that Lam J upheld.[50] That conclusion was plainly justified. 53. On the available evidence, there was no basis for suggesting that the appellant had taken Hong Kong as his place of permanent residence through any conduct of, or arrangements made on his behalf or for his benefit by, his mother or by any other person. The question which the Court of Appeal posed as to what would become of the appellant if his mother were to lose her employment was, in the circumstances of this case, a perfectly proper question, given the appellant’s lack of ability independently to establish Hong Kong as his place of permanent residence. A.9 Conclusion as to the first question 54. Our answer to the first question is that the permanence requirement laid down by Article 24(2)(4) of Basic Law requires a child or young adult applicant who is a non-Chinese national born in Hong Kong and whose application is made before he reaches the age of 21 to meet the criteria established by this Court in Prem Singh,taking into account his individual circumstances, including any action taken or arrangements made by himself or by a parent or legal guardian on his behalf or for his benefit which tend to show that such child or young adult has taken Hong Kong as his place of permanent residence. 55. For the reasons given in this Section, we conclude that the appellant fails on the permanent residence ground of appeal. It follows that the appeal must be dismissed. However, we will proceed to address the second question since it was fully argued and raises questions of practical importance. The second question 56. The appellant made his application for permanent resident status on 20 December 2006. To satisfy the seven-year requirement under Article 24(2)(4), it was necessary for him to establish that he had continuously spent seven years ordinarily resident in Hong Kong immediately before making that application, as established by this Court in Fateh Muhammad v Commissioner of Registration.[51] 57. During that seven-year period, the appellant was in fact absent from Hong Kong on three occasions for periods of 17, 9 and 16 days respectively.[52] The issue is whether those periods of absence resulted in the continuity of the appellant’s ordinary residence in Hong Kong being interrupted so that the seven-year requirement could not be met. B.1 The Commissioner’s case 58. The Commissioner’s case (accepted by the Tribunal and the Courts below) is that continuity was broken so that the seven-year requirement was not satisfied. 59. Lord Pannick points out that throughout the material period, the appellant was in Hong Kong on a visitor’s visa, subject to a limit of stay which did not on each occasion exceed 180 days;[53] and subject to conditions of stay, including a restriction against becoming a student at a school or other educational institution, as prescribed by regulation 2(1) of the Immigration Regulations.[54] 60. The Commissioner relies on section 11(10) of the Immigration Ordinance which provides: Any permission given to a person to land or remain in Hong Kong shall, if in force on the day that person departs from Hong Kong, expire immediately after his departure. 61. Accordingly, so the argument runs, by virtue of section 11(10), on each of the three occasions when the appellant left Hong Kong during the relevant seven-year period, his permission to remain expired (whatever the balance of the period of such permission might otherwise have been) so that during his absence, he had no right to enter Hong Kong and could not lawfully enter without being granted permission afresh on presenting himself to an Immigration Officer on his return. It follows, so Lord Pannick argues, that the appellant could not possibly have been ordinarily resident in Hong Kong during those periods of absence since he could not even lawfully enter Hong Kong, far less claim to be ordinarily resident here. Continuity was therefore interrupted and the seven-year requirement not satisfied. B.2 The appellant’s case 62. It is contended for the appellant that section 11(10) does not apply and that there was no interruption to the continuity of his ordinary residence. The reasoning runs as follows:- (a) Article 24(4) of the Basic Law provides: The non-permanent residents of the Hong Kong Special Administrative Region shall be persons who are qualified to obtain Hong Kong identity cards in accordance with the laws of the Region but have no right of abode. (b) By virtue of regulation 25 of the Registration of Persons Regulations,[55] the appellant is a non-permanent resident because he is a person “qualified to obtain Hong Kong identity cards in accordance with the laws of the Region” but who (at the time of his application) had no right of abode. (c) Regulation 25 must be read together with section 3(1) of the Registration of Persons Ordinance which states: “Every person in Hong Kong is required to be registered under this Ordinance, unless exempted or excluded from its provisions by regulations made under section 7.” (d) Regulation 25 is a regulation made under section 7 and relevantly provides: None of the persons mentioned hereunder so long as he retains the status and qualifications hereinafter mentioned shall be required to register or apply for the issue of an identity card under the [Registration of Persons] Ordinance and these regulations – ... (d) any person who ‑ (i) is a bona fide traveller in transit through Hong Kong; (ii) satisfies a registration officer, or in respect of whom a registration officer is satisfied, that he does not intend to remain in Hong Kong for more than 180 days or such longer period as a registration officer may approve; or (iii) has been granted permission to remain in Hong Kong by the Director of Immigration for a period of not more than 180 days, and is in possession of a valid travel document bearing the appropriate visa issued by a competent authority or of an official document of identity indicating that he normally lives outside Hong Kong; ... (g) children under 11 years of age: Provided that any of the above‑mentioned persons may, if they so desire and if the Commissioner allows, ... register, apply for the issue of identity cards or for the renewal of identity cards and be issued with identity cards under the Ordinance and these regulations. (e) It is argued that the appellant is an exempted person under regulation 25 since he was at the material time a child under 11 years of age within paragraph (g) or a person coming within paragraph (d)(ii) or (iii). Accordingly, by virtue of the proviso to regulation 25, if he so desired and if the Commissioner allowed, he was able to register, apply for and be issued with an identity card. (f) That, Ms Li submits, means that he was “qualified to obtain Hong Kong identity cards in accordance with the laws of the Region” within the meaning of Article 24(4), making him a non-permanent resident. (g) This Court held in Gurung Kesh Bahadur v Director of Immigration[56] that non-permanent residents enjoy freedom to “travel and to enter or leave the Region” guaranteed by Article 31 of the Basic Law.[57] It held, accordingly, that section 11(10) of the Immigration Ordinance does not operate in relation to non-permanent residents to cut short an extant permission to stay and that a non-permanent resident is entitled to re-enter Hong Kong on the basis of the permission previously granted with a limit of stay which had not expired. (h) When the appellant returned to Hong Kong at the end of each of the three periods of absence, he did so within the unexpired period of the permission to stay he had previously been given. Accordingly, he was entitled to the benefit of Article 31 so that section 11(10) did not affect him and did not interrupt the continuity of his ordinary residence in Hong Kong. B.3 Conclusion as to the second question 63. The difference between the Commissioner and the appellant on the second question hinges on whether the proviso to regulation 25, by enabling exempted persons to apply for an identity card, means that they ought in law to be treated as “persons who are qualified to obtain Hong Kong identity cards in accordance with the laws of the Region” within Article 24(4) and are therefore non-permanent residents. 64. We agree with Lord Pannick’s submission that the answer is “No” because the proviso to regulation 25 merely qualifies exempted persons to apply and not to obtain an identity card. This is so because the proviso makes it clear that an identity card will only be issued “if the Commissioner allows” that to happen. Plainly, if an application is refused, the applicant cannot claim to be a person qualified to obtain an identity card. 65. Lord Pannick furthermore makes the cogent point that if merely being qualified to apply were sufficient, it would mean that even a transit passenger would have to be treated as a non-permanent resident of the HKSAR since the proviso enables persons in all the regulation 25 categories to apply, including “a bona fide traveller in transit through Hong Kong”.[58] That cannot possibly have been intended. 66. Our answer to the second question is therefore that a person exempted from the requirement of registration and given permission to remain in Hong Kong as a visitor does not, without more, qualify to enjoy the freedom to travel and to enter and leave the HKSAR as a non-permanent resident. We accordingly also dismiss the appeal on the basis that the argument based on regulation 25 fails. Section 2(6) of the Immigration Ordinance 67. We wish, however, expressly to leave open the question whether in a case like the present, section 2(6) of the Immigration Ordinance might provide a basis for preventing interruption of continuity of ordinary residence. Section 2(6) provides: For the purposes of this Ordinance, a person does not cease to be ordinarily resident in Hong Kong if he is temporarily absent from Hong Kong. The circumstances of the person and the absence are relevant in determining whether a person has ceased to be ordinarily resident in Hong Kong. The circumstances may include – (a) the reason, duration and frequency of any absence from Hong Kong; (b) whether he has habitual residence in Hong Kong; (c) employment by a Hong Kong based company; and (d) the whereabouts of the principal members of his family (spouse and minor children). 68. In the Court of Appeal, the appellant did seek to argue that (i) he was ordinarily resident in Hong Kong by the time the seven-year period immediately prior to the date of his application commenced; (ii) that accordingly, his three absences abroad were all temporary absences which, by virtue of section 2(6), did not break continuity; and (iii) that section 11(10) did not affect that position. Stock VP rejected that argument essentially on the basis that the appellant was here as a visitor and was not a resident, implicitly holding that his visitor status prevented him from being ordinarily resident here – the position which Lord Pannick adopts and reserved for argument. On that basis, the Court of Appeal held that section 11(10), rather than section 2(6) governed the position in respect of continuity.[59] 69. The question of whether the appellant’s permission to remain in Hong Kong as a visitor necessarily meant that he could not build up ordinary residence here, notwithstanding numerous visa extensions spanning many years, is a question which we leave open. It was not a question for which leave was granted. It would in the present case require the matter to be remitted for the relevant facts to be explored. However, since the appeal is in any event to be dismissed on the permanence requirement ground, no purpose would be served by such a remitter and it is appropriate for present purposes merely to reserve the question to be addressed if necessary in the future. 70. For the aforesaid reasons, we dismiss the appeal and make an order nisi for costs against the appellant. We direct that the parties be at liberty, if so advised, to lodge written submissions as to costs within 14 days of the date of this judgment and in default thereof, that the order nisi should stand as an order absolute. Ms Gladys Li SC & Mr PY Lo, instructed by Daly & Associates and assigned by the Director of Legal Aid, for the Appellant Lord Pannick QC & Ms Eva Sit, instructed by the Department of Justice, for the 1st Respondent [1] Formally named as the 2nd respondent, but playing no part in the Court proceedings. [2] HCAL 136/2010 (10 November 2010). [3] [2013] HKLRD 319, Stock VP, Fok and Barma JJA. [4] FAMV 46/2013 (24 January 2014). [5] CACV 22/2012 (9 October 2013). [6] Appearing for the appellant with Mr P Y Lo. [7] (2013) 16 HKCFAR 45. [8] The Agreed Facts set out in Annex I to Lam J’s judgment indicate the following periods of employment: (i) 23.7.91 – 6.9.92 (15 months); (ii) 16.2.93 – 12.10 93 (8 months); (iii) 11.12.93 – 31.1.95 (12 ½ months); (iv) 19.4.95 – 23.4.96 (12 ½ months); (v) 19.6.97 – 19.6.03 (6 years); (vi) 4.7.03 – 4.7.05 (2 years); (vii) 28.7.05 – 26.4.08 (2 years 9 months), the verification application having been made on 21.12.06. Ms Gutierrez began her 8th employment on 26.6.08. [9] Between 6.5.96 and 28.6.97 (13 months). [10] Court of Appeal §30. Submissions elaborating on these matters are referred to by Lam J at §51. [11] Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4 at 36; Lau Kong Yung v Director of Immigration (1999) 2 HKCFAR 300 at 312; Prem Singh v Director of Immigration (2003) 6 HKCFAR 26 at §§56-57. [12] Cap 115. [13] Schd 1, para 1(5): “A person is settled in Hong Kong if: (a) he is ordinarily resident in Hong Kong; and (b) he is not subject to any limit of stay in Hong Kong.” [14] (2003) 6 HKCFAR 26 at §§51-66. [15] Immigration Ordinance, Schd 1, para 3(3)(b). [16] (2003) 6 HKCFAR 26 at §60. [17] At §61. [18] At §64. [19] Ibid. [20] At §66. [21] Lam J at §§51-53. [22] Court of Appeal at §§42-43. [23] Court of Appeal at §54. [24] As well as Fateh Muhammad v Commissioner of Registration (2001) 4 HKCFAR 278, where the Court also considered Article 24(2)(4). [25] Appellant’s printed case §4.8. [26] As indicated by Schd 1 para 3(1). [27] Appellant’s printed case §4.9. [28] Appellant’s printed case §4.10. [29] And in the practice of the Director of Immigration. [30] Lam J at §§29-31. [31] As required by Schd 1, para 3(1)(b). [32] As discussed in Section A4 above. [33] Apart from “habitual residence in Hong Kong” which is regarded by Ms Li as a self-evidently present fact: Appellant’s printed case §4.12. [34] Ibid. [35] Appellant’s printed case §§4.19 and 4.27. [36] (2003) 6 HKCFAR 26 at §64. [37] Court of Appeal §93. [38] Court of Appeal §49. [39] Lam J §§49 and 50. [40] Section A.5. [41] Lam J at §§29(d), 30 and 31. [42] Lam J §29(a) and (b). [43] Section A7.d above. [44] Section A.5 above. [45] As did Lam J at §50. [46] Court of Appeal, per Stock VP at §43 and per Fok JA at §92. [47] Section A.1. [48] “For the purposes of this Ordinance, a person shall not be treated as ordinarily resident in Hong Kong (a) during any period in which he remains in Hong Kong ... while employed as a domestic helper who is from outside Hong Kong.” Upheld as constitutionally valid in Vallejos v Commissioner of Registration (2013) 16 HKCFAR 45. [49] Tribunal, §§51-53 and 63. [50] Lam J §§33, 38 and 39. [51] (2001) 4 HKCFAR 278 at 285. [52] 25.3.00 to 12.4.00 (17 days); 22.2.01 to 4.3.01 (9 days) and 31.3.04 to 17.4.04 (16 days). [53] Save once when, by error, he was granted permission to stay limited to 182 days. [54] Regulation 2(1): “Permission given to a person to land in Hong Kong as a visitor shall be subject to the following conditions of stay: (a) he shall not take any employment, whether paid or unpaid; (b) he shall not establish or join any business; and (c) he shall not become a student at a school, university or other educational institution.” [55] Cap 177. [56] (2002) 5 HKCFAR 480. [57] Article 31: “Hong Kong residents shall have freedom of movement within the Hong Kong Special Administrative Region and freedom of emigration to other countries and regions. They shall have freedom to travel and to enter or leave the Region. Unless restrained by law, holders of valid travel documents shall be free to leave the Region without special authorization.” [58] Regulation 25(d)(i). [59] Court of Appeal at §§62-66.
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: A. Introduction 3. The appellant was tried[1] on one count of conspiracy to traffic in a dangerous drug, contrary to sections 4(1)(a), 4(3) and 39 of the Dangerous Drugs Ordinance[2] and sections 159A and 159C of the Crimes Ordinance.[3] The indictment stated that the particulars of the offence were that: “[The appellant], between the 19th day of September, 2014 and the 8th day of October, 2014, both dates inclusive, in Hong Kong, conspired together with a male known as ‘Ko Lo’, TANG Kwong-ho, and other persons unknown, to unlawfully traffic in a dangerous drug, namely cocaine.” 4. On 24 March 2017, the jury being unanimous, the appellant was convicted on that count and, on 27 March 2017, the judge sentenced him to 29 years’ imprisonment. His application for leave to appeal against his conviction was dismissed by the Court of Appeal on 26 June 2018.[4] By its judgment dated 4 October 2018,[5] the Court of Appeal refused to certify a point of law for this Court. 5. On 18 January 2019, the Appeal Committee granted the appellant leave to appeal to this Court in respect of the following question of law: “Where an indictment or charge of conspiracy to traffic in a dangerous drug (contrary to sections 4(1)(a), 4(3) and 39 of the Dangerous Drugs Ordinance, Cap 134, and sections 159A and 159C of the Crimes Ordinance, Cap 200), particularises a specific drug alleged to be the subject of the conspiracy, must the prosecution prove that the defendant charged with that conspiracy knew that that specific drug was the subject of the conspiracy or is it sufficient to prove that he knew that what was agreed to be trafficked was a dangerous drug?”[6] A.1 The undisputed facts 6. In September 2014, German customs officers intercepted three postal parcels from Bolivia which each contained quantities of a powder containing a total of 4.23 kilogrammes of cocaine. The parcels, shipped under three separate air waybills, were addressed to three different recipients in Hong Kong. In October 2014, a German customs officer escorted the three parcels to Hong Kong where one of the parcels was made the subject of a controlled delivery by Hong Kong customs officers. A Hong Kong customs officer telephoned the mobile phone number shown on that parcel. The Hong Kong customs officer brought the parcel to the address in Sham Shui Po shown on the parcel and again called the same mobile number shown on the parcel. A man, later identified as Tang Kwong Ho (“Tang”), opened the main door of the delivery address and the customs officer handed it over to him and asked him to sign to acknowledge receipt. When Tang returned to the building with the parcel he was arrested. 7. Shortly thereafter, on the same day, another customs officer intercepted the appellant nearby and arrested him. The appellant was searched and five mobile phones were found on him. One of those phones had screenshots tracking the three parcels. One had records of 10 calls with Tang’s mobile phone. Two others were the contact numbers shown on two of the parcels and had call records showing incoming calls from the customs officer who had called to set up the delivery of the parcel in Sham Shui Po. In addition, amongst the items seized from the appellant were three pieces of paper with the air waybill numbers and the names of the recipients of the three parcels of drugs. 8. The cocaine found in the three parcels had an aggregate market value of approximately HK$4.8 million. A.2 The prosecution case 9. It was the prosecution case that the appellant had agreed with a man called “Ko Lo” and Tang to receive the three parcels of cocaine from Bolivia. Apart from the undisputed facts set out above, the prosecution relied on the evidence of Tang, who pleaded guilty to trafficking in relation to his receipt of the first parcel, and testified against the appellant as an accomplice. The gist of Tang’s evidence was that, in September 2014, the appellant asked him to receive postal parcels for him containing “可樂” (“coke”) and that they would split a reward of HK$100,000 for doing so. Tang said he knew “coke” was a dangerous drug but did not know what kind of dangerous drug it was. Having agreed with the appellant to receive the parcels, in October 2014, Tang said he was directed by the appellant to go to the location in Sham Shui Po to collect the first parcel, where, after receiving it, he was arrested. A.3 The defence case 10. The appellant’s case was that he was acquainted with a man called “Ko Lo”, who did not know how to use computers but who had various parcels to be collected for which he had the tracking numbers. In September 2014, Ko Lo asked him to check their status online and send a screenshot of the online tracking status of the parcels. In early October 2014, Ko Lo told the appellant that he was busy and asked the appellant to receive the parcels for him. The appellant asked Ko Lo what the parcels contained and was told they were “not guns, not stoves, not dangerous drugs”.[7] Ko Lo gave the appellant a piece of paper with the names and addresses of the recipients of the parcels, two mobile phones and HK$500 as travelling expenses. On 8 October 2014, having just returned to Hong Kong from the Mainland, the appellant received a call from a courier company informing him of the imminent delivery of the first parcel. Thinking he would not get to Sham Shui Po in time, he called Tang and asked him to receive the parcel for him. The appellant denied Tang’s evidence and any knowledge that the parcels contained dangerous drugs. He was, he maintained, set up by Ko Lo. A.4 The trial judge’s summing up 11. The trial judge summed up to the jury on the basis that the two major issues in the case were, first, whether or not the appellant knew the postal parcel contained a dangerous drug, and secondly, whether or not the appellant conspired with Tang and Ko Lo to receive the postal parcels containing dangerous drugs. 12. In relation to the conspiracy the judge directed the jury that the prosecution had to prove (i) that the appellant, Ko Lo and Tang had an agreement to traffic in dangerous drugs, (ii) that the appellant knowingly participated in this agreement, and (iii) that the appellant and the others had the intention to carry out this agreement. 13. In relation to the meaning of drug trafficking, the judge directed the jury consistently with the substantive offence of drug trafficking. Specifically, in respect of the mental element of the offence, the judge directed the jury as follows: “Alright, in the present case the Prosecution needs only to prove that the Defendant knew the postal parcel contained a dangerous drug; the Prosecution doesn’t need to prove that the Defendant knew which kind of dangerous drug it was. In short, that he knew the postal parcel was a dangerous drug would suffice; he didn’t need to know which kind, because there are many kinds of dangerous drug. It can be cocaine, heroin, ‘ice’, so on and so forth. Do you understand? In law, it does not require the Prosecution to prove that the Defendant knew which kind of dangerous drug it was. It will be sufficient for the Prosecution to prove that the Defendant knew what the postal parcel contained was a dangerous drug.” B. The appellant’s contentions on this appeal 14. It was accepted by the appellant that, to establish the mens rea of the substantive offence of trafficking in a dangerous drug, the prosecution needs to prove that the defendant intended the act of trafficking and knew that a dangerous drug was being trafficked in. There is no requirement to prove that the defendant knew the specific type of dangerous drug being trafficked in. 15. However, it was the appellant’s case that, on a charge of conspiracy to traffic in a dangerous drug particularised on an indictment, it is necessary for the prosecution to prove beyond reasonable doubt that the defendant knew and intended that that specific particularised drug (and not merely a dangerous drug or any dangerous drug) would be trafficked in. The appellant’s case is based on two arguments, one being a matter of statutory construction and the other a common law argument relying on decisions from various jurisdictions. Both of these arguments will be addressed in more detail below (in Sections D and E respectively). 16. The appellant’s contention is thus that the question of law for the Court’s determination (at [5] above) is to be answered in the manner set out in the preceding paragraph. If that is so, then clearly the appeal must be allowed, given the trial judge’s directions to the jury (in particular that set out at [13] above). C. The Dangerous Drugs Ordinance C.1 The offence of trafficking in a dangerous drug 17. The offence of trafficking in a dangerous drug is a statutory offence. Section 4 of the Dangerous Drugs Ordinance provides: “4. Trafficking in dangerous drug (1) Save under and in accordance with this Ordinance or a licence granted by the Director hereunder, no person shall, on his own behalf or on behalf of any other person, whether or not such other person is in Hong Kong – (a) traffic in a dangerous drug; (b) offer to traffic in a dangerous drug or in a substance he believes to be a dangerous drug; or (c) do or offer to do an act preparatory to or for the purpose of trafficking in a dangerous drug or in a substance he believes to be a dangerous drug. (2) Subsection (1) shall apply whether or not the dangerous drug is in Hong Kong or is to be imported into Hong Kong or is ascertained, appropriated or in existence. (3) Any person who contravenes any of the provisions of subsection (1) shall be guilty of an offence and shall be liable – (a) on conviction on indictment, to a fine of $5,000,000 and to imprisonment for life; and (b) on summary conviction, to a fine of $500,000 and to imprisonment for 3 years. (4) This section does not apply to – (a) a preparation specified in Part II of the First Schedule; or (b) a dangerous drug which is in transit and – (i) is in course of transit from a country from which it may lawfully be exported to another country into which it may lawfully be imported; and (ii) was exported from a country which is a party to the Conventions and is accompanied by a valid export authorization or diversion certificate, as the case may be.” 18. The term “dangerous drug” is defined in section 2 of the Dangerous Drugs Ordinance as meaning “any of the drugs or substances specified in Part I of the First Schedule” (italics added). Part I of the First Schedule contains 11 paragraphs setting out various substances and compounds which are statutorily defined as dangerous drugs. “Cocaine” is listed in paragraph 1(a) of Part 1 of that schedule. No distinction is made in the Dangerous Drugs Ordinance between different classes of dangerous drugs and sentencing tariffs for trafficking in different types of dangerous drugs are a matter of judicial precedent and not specified statutorily.[8] 19. The actus reus of the offence of trafficking in a dangerous drug is established by the prosecution proving that a person has done one of the acts listed in paragraphs (a), (b) or (c) of section 4(1)[9] and in the absence of proof that the person concerned is entitled to do the act lawfully under and in accordance with the Dangerous Drugs Ordinance or a licence granted by the Director of Health thereunder. As a matter of statutory language, the offence in section 4(1)(a) is expressed to be to “traffic in a dangerous drug” and not, for example, to traffic in any specific type or class of dangerous drug. 20. It will also be noted that the acts in paragraphs (b) and (c) of section 4(1) include offering to traffic or do acts preparatory to trafficking “in a dangerous drug or in a substance he believes to be a dangerous drug” (italics added). In such cases under paragraphs (b) and (c), there can be no question of proving that the substance concerned is any specific dangerous drug since the offence can be committed even where the offer or preparatory act relates to a substance which is not in fact a dangerous drug. Nor does the defendant need to be proved to believe that it is one type of dangerous drug rather than another. 21. Similarly, it is relevant to refer to section 4A of the Dangerous Drugs Ordinance which concerns trafficking in a purported dangerous drug. Section 4A(1) provides: “(1) No person shall, on his own behalf or on behalf of any other person, whether or not such other person is in Hong Kong – (a) traffic in any substance represented or held out by him to be a dangerous drug but which is not in fact a dangerous drug; (b) offer to traffic in any substance represented or held out by him to be a dangerous drug but which is not in fact a dangerous drug; or (c) do or offer to do an act preparatory to or for the purpose of trafficking in any substance represented or held out by him to be a dangerous drug but which is not in fact a dangerous drug.” Clearly, under section 4A, there is no requirement to prove that the substance concerned is any specific dangerous drug since, like the offences under section 4(1)(b) and (c), the offences under section 4A can also be committed even where the substance is not in fact a dangerous drug. 22. Since section 4(1)(a) is to be construed in the context of the Dangerous Drugs Ordinance as a whole, including these other offence creating sections, their content provides further support for the conclusion that the essential ingredient of the actus reus of the offence in section 4(1)(a) is confined to trafficking in a dangerous drug and not any specific type or class of dangerous drug. C.2 The mens rea of the offence 23. The mens rea of the offence in section 4(1)(a) is established by proof that the defendant knew that he was trafficking in a dangerous drug and it is not necessary to prove that he knew or believed which particular type of dangerous drug he was trafficking in. As Macdougall VP held, in R v Tam Chun Fai:[10] “We have emphasized the indefinite article ‘a’ in the expression ‘a dangerous drug’ because the offence on which the accused stands indicted is that of trafficking in a dangerous drug. The allegation in the particulars of offence that the drug is, for example, salts of esters of morphine, is nothing more than a particular. It is not an ingredient of the offence. The offence is not one of trafficking in salts of esters of morphine, but, as we have said, one of trafficking in a dangerous drug. … We of course accept that there are cases in which the prosecution may be tied to the particulars of offence, for example, where time is an ingredient of the offence or where the defence is prejudiced by a misstatement of a particular and that particular is not amended. No prejudice could possibly arise from the reference in the particulars of offence to a particular dangerous drug where the offence alleged is one of trafficking in a dangerous drug. The fact that an accused thought that he was trafficking in a dangerous drug different from that stated in the particulars of offence is irrelevant to the issue of guilt. It can only be relevant to sentence. In such a case, the accused must plead guilty and seek to persuade the judge in a Newton hearing that he thought he was trafficking in that other drug. This, of course, could only avail the accused if the dangerous drug that he thought he was trafficking in was one that the courts recognize as attracting a lesser sentence than the one stated in the particulars of offence.” [11] (Emphasis in original) 24. Although there was some inconsistency in the appellant’s case in this regard (discussed below in Section C.3), the correctness of the proposition in the preceding paragraph was common ground in this appeal. In his oral submissions, Mr Osmond Lam, counsel for the appellant,[12] confirmed the following submission in the appellant’s printed case: “For the substantive offence of trafficking in a dangerous drug, so far as mens rea is concerned, the prosecution need only prove that the defendant knew that a dangerous drug was being trafficked in. There is no requirement to prove that the defendant knew that the specific particularised dangerous drug was being trafficked in (or indeed any specific drug). He can incur liability for the substantive offence without knowledge of (or being reckless as to) the specific drug involved.”[13] (Emphasis in original) 25. It is material to note that the mens rea for the offence under section 4(1)(a) of the Dangerous Drugs Ordinance is a full mens rea in the sense that the prosecution is required to prove a defendant’s knowledge that the substance being trafficked in is a dangerous drug: HKSAR v Mohammed Saleem.[14] It is, therefore, plainly not an offence of absolute liability. Nor is any lesser mental state as to the nature of the item being trafficked being a dangerous drug, such as recklessness or negligence, sufficient to prove the mental element of the offence. C.3 The appellant’s inconsistent stance on the elements of the offence 26. Despite the clarity of the proposition set out in the appellant’s case (quoted at [24] above) that, to establish liability for the substantive trafficking offence, it is not necessary for the prosecution to prove that the defendant knew the specific type of dangerous drug being trafficked in, there were other parts of his case which were or appeared to be inconsistent with that proposition and which suggested that the nature and identity of the specific drug is an essential ingredient of the offence.[15] 27. This confused stance appears to have arisen from reliance in the appellant’s printed case on a number of English decisions said to support the contention that proof of the fact that the substance involved is in fact the drug specified is an essential physical element or ingredient of the actus reus of the offence of drug trafficking in Hong Kong. These were R v Parsons,[16] R v Hill[17] and R v Hunt.[18] 28. It is not necessary to discuss those cases at length in this judgment because, properly understood, they are not authority for the proposition sought to be advanced on behalf of the appellant. They are simply decisions arising in the particular statutory context of the offences of possessing or supplying a controlled drug under the Misuse of Drugs Act 1971 and on their own particular facts. Two (R v Parsons and R v Hill) were cases in which proof of dealing in drugs could not be established without proving that the particular thing dealt in was in fact the drug charged. One (R v Hunt) was a case involving a charge of unlawful possession of morphine, the possession of which is only criminalised under the English legislation if of a quantity above a certain threshold amount, so that the precise composition and quantity of morphine have to be proved to sustain the charge. 29. Nor does the appellant’s reliance on HKSAR v Zou Bicai[19] support the contention that the prosecution must prove possession or knowledge of the specific type of drug specified in the indictment as an essential element of the trafficking offence. On the contrary, the Court of Appeal in that case approved[20] the trial judge’s direction based on section 61 of the Hong Kong Judicial Institute’s Specimen Directions on Jury Trials in respect of the offence of trafficking in a dangerous drug, which requires the jury to be sure, in order to convict, that (i) the defendant possessed dangerous drugs, (ii) he knew they were dangerous drugs, and (iii) he possessed them for the purpose of supply, export or sale. The Specimen Direction lays down no requirement, in an ordinary case, to direct the jury that the defendant must possess or know the particular type of dangerous drug involved. 30. Finally, in this regard, it was argued by the appellant that the need to prove knowledge of the type of drug being trafficked in was also consistent with the presumption in section 47(2) of the Dangerous Drugs Ordinance, namely that “Any person who is proved or presumed to have had a dangerous drug in his possession shall, until the contrary is proved, be presumed to have known the nature of such drug” (emphasis added).[21] However, as explained by this Court in HKSAR v Hung Chan Wa,[22] the effect of this statutory presumption is that, upon it being established that the accused was “in physical possession of an item that transpired to be a dangerous drug”,[23] it is then presumed that “the accused was aware that the item was a dangerous drug” (emphasis added), that is to say, a drug having the nature of a dangerous drug. The operative presumptions are therefore entirely consistent with the requirement that the prosecution need only prove knowledge on the part of the accused that the substance he possessed was a dangerous drug rather than any specific type of drug. 31. In sum, none of the appellant’s arguments, somewhat inconsistently advanced, support the proposition that, for the substantive offence of trafficking, it is necessary for the prosecution to prove that the defendant knew that the substance being trafficked in was a specific type of drug. On the contrary, the proposition set out in the appellant’s printed case (quoted above at [24]) is a correct statement of the law. Nor is proof of the particular nature or identity of the dangerous drug an essential ingredient of the actus reus of the offence in section 4(1) of the Dangerous Drugs Ordinance (see Section C.1 above). D. The appellant’s statutory construction argument D.1 The offence of conspiracy 32. At common law, the offence of conspiracy consisted of the making of an agreement between two or more persons to do an unlawful act or to do a lawful act by unlawful means. Statute has now provided a more precise definition of the offence of conspiracy. Part XIIA of the Crimes Ordinance, addressing preliminary offences, abolished common law conspiracy, with the exception of the common law offence of conspiracy to defraud, [24] and introduced a statutory offence of conspiracy. 33. The offence is contained in section 159A(1), which provides: “159A. The offence of conspiracy (1) Subject to the following provisions of this Part, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, either – (a) will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement; or (b) would do so but for the existence of facts which render the commission of the offence or any of the offences impossible, he is guilty of conspiracy to commit the offence or offences in question.” [25] 34. Conspiracy is an inchoate offence, meaning that it is constituted by an agreement to pursue a future course of conduct with the necessary intent and does not require the actual carrying out of the agreed upon acts. It is a different offence from the commission of the underlying substantive offence and criminal liability for conspiracy depends on the alleged conspirators’ intentions. As Lord Nicholls of Birkenhead observed, in R v Saik: “… conspiracy imposes criminal liability on the basis of a person’s intention. This is a different harm from the commission of the substantive offence. So it is right that the intention which is being criminalised in the offence of conspiracy should itself be blameworthy. This should be so, irrespective of the provisions of the substantive offence in that regard.”[26] 35. Under section 159A(1), if two or more persons make an agreement to carry out a course of conduct in the future and if their intentions, when making that agreement, are such that if the course of conduct is carried out in accordance with their intentions it will necessarily amount to or involve the commission of an offence by one or more of them (i.e. the underlying offence), they will be guilty of conspiracy to commit the underlying offence. This is so even if the facts are such that commission of the relevant underlying offence is impossible. The intention to carry out the underlying offence is a critical element of the offence of conspiracy. 36. In satisfying the requirement that a course of conduct, if carried out in accordance with the parties’ intentions, will necessarily amount to or involve the commission of an offence, it is important that both the actus reus and the mens rea elements of the underlying offence are satisfied. Thus, in Saik, Lord Nicholls emphasized that under the English equivalent of section 159A(1): “… the mental element of the offence, apart from the mental element involved in making an agreement, comprises the intention to pursue a course of conduct which will necessarily involve commission of the crime in question by one or more of the conspirators. The conspirators must intend to do the act prohibited by the substantive offence. The conspirators’ state of mind must also satisfy the mental ingredients of the substantive offence. If one of the ingredients of the substantive offence is that the act is done with a specific intent, the conspirators must intend to do the prohibited act and must intend to do the prohibited act with the prescribed intent.” [27] 37. The requirement that a conspirator’s state of mind must itself be blameworthy irrespective of the provisions of the substantive offence in respect of mens rea derives from section 159A(2) of the Crimes Ordinance, which provides: “(2) Where liability for any offence may be incurred without knowledge on the part of the person committing it of any particular fact or circumstance necessary for the commission of the offence, a person shall nevertheless not be guilty of conspiracy to commit that offence by virtue of subsection (1) unless he and at least one other party to the agreement intend or know that that fact or circumstance shall or will exist at the time when the conduct constituting the offence is to take place.” [28] 38. This sub-section was introduced to codify the common law principle enunciated by the House of Lords in R v Churchill (No.2).[29] That case concerned a defendant charged with the common law offence of conspiracy to commit a strict liability statutory offence. The House of Lords held that the conspirator was not guilty of the offence of conspiracy if on the facts known to him the act he agreed to do was lawful. The Law Commission of England and Wales explained the argument for the codification of the principle in Churchill as follows: “What the prosecution ought to have to prove is that the defendant agreed with another person that a course of conduct should be pursued which would result, if completed, in the commission of a criminal offence, and further that they both knew any facts which they would need to know to make them aware that the agreed course of conduct would result in the commission of the offence.” [30] 39. As Lord Nicholls further explained, in Saik, in respect of the English equivalents of sections 159A(1) and 159A(2): “6. Section 1(2) qualifies the scope of the offence created by section 1(1). … Its essential purpose is to ensure that strict liability and recklessness have no place in the offence of conspiracy. … … 8. It follows from this requirement of intention or knowledge that proof of the mental element needed for the commission of a substantive offence will not always suffice on a charge of conspiracy to commit that offence. In respect of a material fact or circumstance conspiracy has its own mental element. In conspiracy this mental element is set as high as ‘intend or know’. This subsumes any lesser mental element, such as suspicion, required by the substantive offence in respect of a material fact or circumstances. In this respect the mental element of conspiracy is distinct from and supersedes the mental element in the substantive offence. When this is so, the lesser mental element in the substantive offence becomes otiose on a charge of conspiracy. …”[31] To similar effect, see Lord Hope’s speech in Saik at [56] to [58]. In Hong Kong, the Court of Appeal has applied this construction of section 159A(2) in HKSAR v Yung Lai Lai, holding that its essential purpose is, as Lord Nicholls stated in Saik, “to ensure that strict liability and recklessness have no place in the offence of conspiracy.” [32] 40. Thus, on a charge of conspiracy to commit a substantive offence, where the mental element of that substantive offence is less than knowledge or intention, it will be necessary, by reason of section 159A(2), to establish liability for the conspiracy, to prove intention or knowledge that a fact or circumstance necessary for the commission of the substantive offence will exist. 41. As to the meaning of the words “fact or circumstance necessary for the commission of the offence” in section 159A(2), Lord Nicholls held in Saik: “The phrase … is opaque. Difficulties have sometimes arisen in its application. The key seems to lie in the distinction apparent in the subsection between ‘intend or know’ on the one hand and any particular ‘fact or circumstance necessary for the commission of the offence’ on the other hand. The latter is directed at an element of the actus reus of the offence. A mental element of the offence is not itself a ‘fact or circumstance’ for the purposes of the subsection.”[33] And Lord Hope similarly held: “The knowledge which section 1(2) requires is knowledge of the facts and circumstances that must be proved as part of the actus reus of the substantive offence.”[34] In Hong Kong, this construction of section 159A(2) has been applied by the Court of Appeal in HKSAR v Lung Ming Chu.[35] 42. With these preliminary observations concerning the operation of sections 159A(1) and 159A(2) in mind, I now turn to consider the appellant’s contentions on this appeal. D.2 The appellant’s construction of section 159A(2) 43. The appellant’s construction argument is summarised in his printed case in these terms: “(1) Section 159A(2) of the Crimes Ordinance (Cap.200) governs the mental/fault element of the statutory offence of conspiracy. (2) In R v Saik [2007] 1 AC 18, the House of Lords held that the equivalent English statutory provision, s.1(2) of the Criminal Law Act 1977, requires proof by the prosecution that a person charged with conspiracy had knowledge of the facts and circumstances that must be proved as part of the actus reus of the corresponding substantive offence. In HKSAR v Lung Ming Chu [2009] 3 HKC 137 at §35, Hartmann JA endorsed the Saik approach and applied it to s.159A(2). (3) Where a person is charged with the substantive offence of trafficking in a dangerous drug (namely cocaine), it is essential that the prosecution proves, as a ‘fact necessary for the commission of the offence’ (or as a physical element/essential actus reus of the offence), that the substance involved was in fact cocaine. (4) It follows, through the application of s.159A(2), that for a charge of conspiracy to traffic in a dangerous drug (namely cocaine), the prosecution must prove that the accused person knew and intended specifically that cocaine was involved. (5) That the prosecution only has to prove, for the substantive offence of trafficking in a dangerous drug (being cocaine), that the accused person had knowledge of any dangerous drug is thus completely irrelevant, given that there is no requirement in relation to substantive offences that the requisite elements of mens rea equate to the ingredients of the actus reus.”[36] 44. The appellant’s construction argument therefore appears to run as follows: (1) On a charge of trafficking in a dangerous drug, in order to prove the actus reus, the prosecution will have to prove that the substance being trafficked in is one of the drugs or substances specified in Part I of the First Schedule and, if particularised in the charge, that specific drug. This will require, for example, a chemist’s certificate to establish the precise nature of the substance in question (say, cocaine). (2) To establish the mens rea of the substantive offence of trafficking in a dangerous drug, the prosecution need only prove that the defendant knew that the substance being trafficked in was a dangerous drug and not any specific type of drug. (3) It therefore follows that the qualification in the opening clause of section 159A(2) applies, namely that liability for the substantive offence of trafficking in a dangerous drug may be incurred without knowledge on the part of the defendant of the fact that the substance being trafficked in is the particular drug (say, cocaine) involved, this being (it is said) a “particular fact or circumstance necessary for the commission of the offence”. (4) That being the case, the latter part of section 159A(2) stipulates that the defendant shall not be guilty of conspiracy to traffic in a dangerous drug “unless he and at least one other party to the agreement intend or know that that fact or circumstance [i.e. that the drug being trafficked in is cocaine] shall or will exist at the time when the conduct constituting the offence is to take place”. (5) There being (it is said) no evidence that the appellant or any of his co-conspirators knew that the drugs in the three postal parcels were cocaine, he cannot have been guilty of the offence of conspiracy charged. 45. The crux of the appellant’s argument is that “proof of the substance being the specified drug is a fact necessary for the commission of the substantive offence of drug trafficking” and that section 159A(2) therefore “requires that the conspirators knew or intended that fact to exist in order to be guilty of statutory conspiracy.”[37] D.3 The flaw in the appellant’s construction of section 159A(2) 46. For the following reasons, the appellant’s argument as to the construction of section 159A(2) is fundamentally flawed and cannot be accepted. 47. As explained in Section D.1 above, the genesis of section 159A(2) was the House of Lords’ decision in Churchill and its essential purpose was to ensure that lesser forms of mens rea, such as recklessness or negligence, or offences of strict liability, would not be sufficient for the offence of conspiracy. Where any such lesser mens rea applies for the substantive offence, it will not be sufficient for the offence of conspiracy to commit that offence to establish liability unless the mens rea of conspiracy, namely a full mens rea of intent or knowledge, is proved. For the offence of conspiracy, the mental element must be satisfied on a full subjective basis and not on any objective basis or on the basis of strict liability. As pointed out above, in Saik at [8], Lord Nicholls referred to section 159A(2) subsuming these lesser mental elements and the higher mental element of conspiracy superseding those other lesser mental elements. 48. As explained in Section C.2 above, the offence of trafficking in a dangerous drug is clearly not an offence with a lesser mental element than knowledge. It is necessary for the prosecution to prove the defendant knew that the substance being trafficked in is a dangerous drug. There is therefore no purpose served by the application of section 159A(2) to the offence of conspiracy to traffic in a dangerous drug. 49. What is required, however, to be proved in a conspiracy to traffic in a dangerous drug is an intention to pursue a course of conduct which involves the commission of the actus reus of the underlying offence of trafficking with the mens rea of that offence. Here, as stated earlier, the actus reus consists of trafficking in a dangerous drug, rather than a specific dangerous drug or type or class of drug. The mens rea consists of the defendant knowing that he was trafficking in a dangerous drug, rather than a specific dangerous drug or type or class of drug. 50. Whilst it is correct that the fact that the nature of the dangerous drug which is the subject of a charge of trafficking must be proved at trial, it does not follow that this is therefore an ingredient of the offence. As Ribeiro and Cheung PJJ recently pointed out in their joint judgment in HKSAR v Chen Keen (alias Jack Chen) & Others, a case concerned with the common law offence of conspiracy to defraud:[38] “It is accordingly essential not to confuse the facts and matters provided by way of particulars with the essential constituent elements of the conspiracy alleged. Particulars set out in the indictment or separately given by the prosecution function to inform the accused of the case they have to meet.” For the reasons set out in Section C above, the particular nature of the dangerous drug which is the subject of a trafficking charge is not an element or ingredient of the actus reus of the offence. The particulars of the offence in the indictment, specifying the drug as cocaine, were given to inform the appellant of the case against him. 51. The flaw in the appellant’s reasoning, therefore, is to treat proof of the precise nature of the substance being trafficked in as an ingredient of the substantive offence of trafficking in a dangerous drug. That, as explained in Section C above, is incorrect. The only necessary fact or circumstance which is necessary for a person to know for the commission of the offence of drug trafficking is knowledge that what is being trafficked in is a dangerous drug, not any particular type of dangerous drug. It is the existence of that particular fact or circumstance which is an ingredient of the offence and it is to that ingredient that section 159A(2) applies. However, since liability for the offence of trafficking cannot be established without full subjective knowledge of that ingredient (i.e. that what is being trafficked in is a dangerous drug), section 159A(2) does not impose any greater burden on the prosecution in respect of a charge of conspiracy to traffic in a dangerous drug. D.4 No absurdity in rejecting the appellant’s construction argument 52. It was argued in the appellant’s printed case that rejecting his construction of section 159A(2) would lead to absurdity. One such scenario identified was where, on a charge of conspiracy to traffic in cocaine, a defendant might nevertheless still be convicted even if the substance agreed to be trafficked in was proved to be cannabis. This could, it was submitted, lead to uncertainty at trial. 53. This is a highly artificial argument. In practice, the nature of the drug forming the basis of the charge would have been ascertained long before the indictment was laid. But even if, for some reason, the wrong drug was identified in the charge, the appropriate course would be for the prosecution to apply to amend the charge. 54. Other examples of supposed absurdity were put forward by the appellant of cases involving two types of drugs or two separate conspiracies. Whilst there may be fair trial issues depending on the facts of the particular case (see further below), these examples do not provide a compelling reason for elevating the nature of the drug to an essential ingredient of the offence of trafficking in a dangerous drug or for accepting the appellant’s erroneous construction of section 159A(2). E. The appellant’s common law argument E.1 Preliminary observations 55. The appellant’s alternative argument in support of the appeal is based on the contention that there is a general common law principle that, on a charge of conspiracy to traffic in a dangerous drug, the prosecution “must prove knowledge of an agreement to traffic in the specific drug as particularised in the indictment”.[39] This broad principle was said to be articulated in various decisions of the courts of England and Wales, Canada and Australia upon which the appellant relied. 56. At first sight, it might be thought difficult to see what assistance is available to the appellant from the common law in relation to the offence of conspiracy. As already noted, section 159E(1) of the Crimes Ordinance abolished the common law offence of conspiracy and section 159A of that ordinance introduced the new statutory offence of conspiracy. It is therefore to that latter section, properly construed, that one must look in the first instance for the law in respect of the offence of conspiracy rather than the common law. Nevertheless, even treating the appellant’s argument based on the common law principle prayed in aid simply as support for its argument of construction of section 159A(2), the cases do not establish the broad principle relied upon. E.2 The English cases 57. The appellant primarily relied on dicta in R v Siracusa[40] to support the existence of the general common law principle said to be relevant. In that case, O’Connor LJ stated: “The mens rea sufficient to support the commission of a substantive offence will not necessarily be sufficient to support a charge of conspiracy to commit that offence. An intent to cause grievous bodily harm is sufficient to support the charge of murder, but is not sufficient to support a charge of conspiracy to murder or of attempt to murder. We have come to the conclusion that if the prosecution charge a conspiracy to contravene section 170(2) of the Customs and Excise Management Act by the importation of heroin, then the prosecution must prove that the agreed course of conduct was the importation of heroin. This is because the essence of the crime of conspiracy is the agreement and in simple terms, you do not prove an agreement to import heroin by proving an agreement to import cannabis.”[41] 58. It is important, when considering English cases dealing with drug related offences to take account of the different statutory context prevailing in the United Kingdom. The various pieces of legislation in the United Kingdom governing dangerous drugs[42] distinguish between different classes of drugs (which may be of Class A or B or C, each of which may attract different maximum penalties depending on the legislation in question) and the specific drug particularised in the indictment may be a material averment because, properly construed, the legislation may create different offences depending on the different maximum penalties which may be imposed. See, in this context, the speech of Lord Bridge in R v Shivpuri, in which he said: “… section 170 of the Act of 1979 creates three distinct offences in relation to the importation of prohibited goods according to the category of goods in relation to which the offence was committed. The effect of section 170(3) and (4) and Schedule 1 is that the commission of any offence under section 170(1) or (2) in relation to the importation of drugs of Class A or Class B under the Misuse of Drugs Act 1971 attracts a maximum sentence of 14 years’ imprisonment; the commission of any such offence in relation to the importation of drugs of Class C attracts a maximum sentence of five years’ imprisonment; and the commission of any such offence in relation to any other category of prohibited goods attracts a maximum sentence of two years’ imprisonment. It follows from this, applying the reasoning in R v Courtie [1984] AC 463, that each of the three distinct offences has different ingredients and, leaving aside considerations of impossibility arising under the Criminal Attempts Act 1981, part of the actus reus of the offence which must be proved in each case is the importation, actual or attempted, of goods which were in fact of the appropriate category to sustain the offence charged.”[43] 59. The above passage was cited with approval by Woolf LJ (as he then was) in R v Patel & Others.[44] Patel concerned two charges, one a charge of conspiracy to produce a Class B drug (amphetamine sulphate), and the other a charge of conspiracy to supply a Class B drug (amphetamine sulphate). After citing the passage quoted above, Woolf LJ referred to Siracusa and explained: “We consider that the effect of the Siracusa decision is that if a count in an indictment identifies the specific drug which it is alleged is the subject of the conspiracy, then if a defendant joined a conspiracy believing it involved one Class of drug, he is not guilty of that conspiracy if he believes the drug involved is a drug which belongs to a lesser Class to that named. This is because the conspiracy in which the defendant intended to become involved would then relate to a different and less serious offence. The Courtie case makes this clear. Furthermore, this is the position notwithstanding the fact that a count of conspiracy could be preferred which only alleged that the conspiracy concerned a controlled drug without specifying which controlled drug was involved. However, this does not mean that all the conspirators must know which drug which is involved because the drug is named in the particulars to the count in the indictment. What the Siracusa case establishes is that if you believe you are joining one conspiracy with one objective, that does not make you guilty of a conspiracy which has a different and less serious objective. The Siracusa 90 Cr App Rep 340, [1989] Crim LR 712 decision was not dealing with a situation where the drugs which were the subject of the conspiracy were of the same Class, so in accordance with R v Courtie they would be the subject of the same substantive offence. Nor was the Siracusa decisions dealing with a different situation where a defendant intended to join a conspiracy to produce controlled drugs but did not know what was the drug which was to be manufactured or supplied.”[45] 60. Woolf LJ went on to explain: “… by referring to a single drug in the Particulars of Offence the prosecution are identifying which Class of drugs is involved. If heroin is specified, a Class A or hard drug; if cannabis is specified, a Class B or soft drug. The naming of the drug is a material allegation because it makes clear the gravity of the offence which is the objective of the conspiracy. This will be relevant to sentence. It can also be of assistance to a defendant in a situation such as that which existed in Siracusa because it makes clear which of two possible conspiracies he is alleged to have joined. However, where all that is being considered in connection with an offence of conspiracy (where there is not the complicating factor on the evidence of more than one possible conspiracy) is prohibited drugs of the same Class, the name of the drug in the Particulars of Offence is not a material averment. Thus if the conspiracy concerns a Class A drug it does not matter that a conspirator, who agreed to join the conspiracy, though[t] that the conspiracy concerned a different drug, so long as that drug was not in a less serious Class. He would have entered into an agreement to commit an offence in respect of Class A drugs. The position would be otherwise if he intended to enter into a conspiracy which he believed involved a Class B drug. Then he would believe that a different offence was the objective of the conspiracy. A defendant could have entered into a conspiracy, knowing that prohibited drugs were involved, but without knowing that the precise drug named in the indictment was invol[v]ed. The position would then be that he intended to join the conspiracy involving whatever prohibited drug was in fact the subject of that conspiracy and this being the case his ignorance of the precise drug, be it Class A, B or C, would not affect his guilt. The reason for this is that he would have intended to be a party to the conspiracy irrespective of the category of the drug involved.”[46] (Emphasis added) 61. More recently, Patel was considered by the English Court of Appeal in R v Ayala,[47] concerning the state of mind that the prosecution has to prove in order to convict a person of conspiracy to supply drugs where the count alleges a conspiracy to supply a controlled drug of Class A, namely cocaine. After referring to section 1(1) of the Criminal Law Act 1977,[48] Buxton LJ said: “13. What that means in the context of a conspiracy to supply controlled drugs in cases where there is, or may be, some doubt about whether the conspirators are agreed on the nature of the drug concerned has been considered in a number of recent cases, including Siracusa 90 Cr App R 340, R v Patel, an unreported decision of this Court presided over by Woolf LJ, as he then was, of August 7th, 1991, and more recently in the case of Taylor and Others mentioned in [2002] Crim LR at 205, and more extensively to be found in the full transcript which we have caused to be obtained. 14. Relying on those three cases, the learned editors of Archbold at paragraphs 33–16 say this: ‘The effect of these decisions is that where a conspiracy count identifies in the particulars of offence a particular controlled drug [we interpose, this is this case], it must be proved against any defendant not merely that he knew that the agreement related to the importation, production, supply et cetera, of a controlled drug; he must be proved either (i) to have known that it related to the particular drug mentioned in the indictment, or (ii) to have known it related to a drug of the same ‘Class’ {as specified in the Misuse of Drugs Act 1971} as the drug mentioned, without having any knowledge or belief as to it involving any particular drug, or (iii) to have believed that it related to another particular drug of the same class, or of a class attracting a greater penalty, or (iv) to have believed that it related to a drug of a class attracting a greater maximum penalty, without having any belief as to any particular drug, or (v) to have not cared at all what particular drug was involved. A defendant would escape liability only where he mistaken believed that the conspiracy related to a controlled drug of a class attracting a lesser maximum penalty.’ 15. We turn to subparagraph (v) of that summary: a summary which, we should have said, we respectfully think to be an accurate statement of the law. 16. It may at first sight seem surprising, or at least to need comment, that, where the offence as defined in the statute requires an agreement, that is to say a subjective agreement, to a course of conduct that will necessarily amount to the commission of an offence, a party can agree to the commission of the particular offence of supplying a controlled drug, namely cocaine, where he does not have a positive view as to the nature of the drug involved, but merely agrees to the supply of what he knows is a drug, and not giving his mind, or at least not caring, what particular drug was involved. However, we have no doubt that subparagraph (5) of Archbold’s summary does indeed represent the law.” 62. As these passages from Patel and Ayala show, the name of the specific drug is not a material averment in a charge of trafficking in a dangerous drug unless there are different classes of drugs involved (in which case each class of drugs represents a separate offence)[49] or there are separate conspiracies alleged concerning different drugs (in which case each conspiracy is a separate offence). In either of those situations (and Siracusa was such a case), the identity of the specific drug will be a material averment, but not otherwise. In the present case, on the other hand, neither of those conditions exists: the Dangerous Drugs Ordinance does not create separate offences for different classes of drugs and the present case is one of a single conspiracy involving one type of drug. 63. In the present case, the Court of Appeal referred to Siracusa and stated that “the penalty for conspiracy to import cannabis is lighter than that for conspiracy to import heroin”.[50] This was strictly incorrect because the charge in Siracusa was not brought under the Misuse of Drugs Act 1971 (which specifies different maximum penalties for different classes of drug) but under the Customs and Excise Management Act 1979 (which at the relevant time specified the same maximum penalty for importation of both Class A and B drugs).[51] However, this was immaterial since, notwithstanding the error, the Court of Appeal would have been correct to treat Siracusa as being distinguishable from the present case on the basis that it involved two different conspiracies. 64. For the above reasons, the English cases do not support the existence of the common law principle relied upon by the appellant. E.3 The Canadian and Australian cases 65. As with the English cases, neither the Canadian nor the Australian cases cited by the appellant support the existence of the general common law principle relied upon. 66. Contrary to the submissions advanced on behalf of the appellant, a proper reading of those cases shows no more than that the general common law principle that a defendant is entitled to a fair trial may require the prosecution to prove his knowledge of the particular drug specified in a charge of conspiracy to traffic in dangerous drugs. 67. In respect of Canadian authority, the appellant relied primarily on R v Saunders,[52] a decision of the Supreme Court of Canada in which McLachlin J (as she then was) noted: “… It is a fundamental principle of criminal law that the offence, as particularized in the charge, must be proved. In Morozuk v. The Queen, [1986] 1 S.C.R. 31, at p. 37, this Court decided that once the Crown has particularized the narcotic in a charge, the accused cannot be convicted if a narcotic other than the one specified is proved. The Crown chose to particularize the offence in this case as a conspiracy to import heroin. Having done so, it was obliged to prove the offence thus particularized. To permit the Crown to prove some other offence characterized by different particulars would be to undermine the purpose of providing particulars, which is to permit ‘the accused to be reasonably informed of the transaction alleged against him, thus giving him the possibility of a full defence and a fair trial’: R. v. Côté, [1978] 1 S.C.R. 8, at p. 13.”[53] 68. However, the result in the case is explained by the fact that the Crown had opened the case on the basis that it intended to prove that the accused conspired to import heroin, whereas, during the trial, it became clear that the imported drug by which the Crown intended to prove the conspiracy was in fact cocaine and the accused testified that, whilst he had been involved in conspiracies to import other drugs, he had not been involved in a conspiracy to import heroin. In a subsequent passage in McLachlin J’s judgment, she held: “Crown counsel suggests that the import of the decision of the Court of Appeal is that the Crown will necessarily fail in every case if it cannot prove that the conspiracy related to a particular narcotic, as opposed to any prohibited narcotic. I cannot accept that suggestion. I agree with Crown counsel that the gravamen of the offence is conspiracy to import a narcotic, rather than a particular kind of narcotic. The purpose of specifying the narcotic in a case such as this is to identify the transaction which is the basis of the alleged conspiracy. The fundamental requirement that the charge must provide sufficient particulars to reasonably permit the accused to identify the specific transaction may be met in a variety of ways. Where the Crown has evidence of the particular drug involved, this may properly be required to be provided as a particular identifying the transaction. But where the Crown is uncertain as to the particular drug which was the subject of the conspiracy, it may properly decline to give particulars of the drug. The charge may nevertheless stand, provided that it sufficiently clearly identifies the alleged conspiracy in some other way. There must be a new trial in this case, not because a conviction for conspiracy to import a narcotic cannot be supported without proof of the type of narcotic involved, but rather because the Crown chose in this case to particularize the drug involved and failed to prove the conspiracy thus particularized.”[54] 69. As can be seen, the rationale for the decision in Saunders is not the general common law principle relied upon by the appellant here but rather the need properly to inform an accused of the transaction that constitutes the charge in order to ensure a fair trial and avoid prejudice to the accused. That this is the true rationale of Saunders is confirmed by R v Rai,[55] R v Taylor,[56] and R v Morrissey & Gould.[57] 70. Similarly, the Australian authorities of R v LK[58] and Quaid v The Queen[59] do not support the appellant’s proposition that there is a common law rule that in a charge of conspiracy to traffic in (say) cocaine, it must be proved that the defendant knew that the substance of the conspiracy was in fact cocaine. 71. R v LK involved a charge of conspiracy to deal with money that was the proceeds of crime (i.e. a conspiracy to money launder). The High Court of Australia examined the proper construction of section 11.5(1) of the Criminal Code (Cth) in that context and addressed the specific question of whether recklessness was a sufficient mental element for the offence of conspiracy to money launder. 72. In Quaid, which involved a charge of conspiracy to traffic in a controlled drug, the issue was whether a trial judge should have directed the jury about the fault elements of the substantive trafficking offence, for which recklessness was a sufficient mental element. The Court of Appeal of Western Australia held that the judge erred in directing the jury on the lesser fault element of the substantive offence since it was potentially confusing and an irregularity in the trial. However, since there was no miscarriage of justice, the appeal was dismissed. 73. These Australian decisions are examples, in the context of the relevant Australian statutory framework, of a lesser mental element for a substantive charge being subsumed or superseded by the fault element applicable to the offence of conspiracy. These decisions were, as Pullin JA observed in Quaid,[60] an application of the reasoning of Lord Nicholls in Saik. F. Answering the question of law 74. The essential ingredients of the offence of trafficking in a dangerous drug are addressed in Section C above. The specific type of dangerous drug, as particularised in the indictment, was not an essential ingredient of that offence. The mental element of the substantive offence was satisfied upon proof that the appellant knew that the contents of the parcels were a dangerous drug, as defined in the Dangerous Drugs Ordinance. Despite the fact that the charge in the present case was one of conspiracy to traffic in a dangerous drug, nothing in section 159A(2) of the Crimes Ordinance required the prosecution to prove any additional mental element in this case, for the reasons set out in Section D above. 75. In answer to the question of law (set out at [5] above), where an indictment or charge of conspiracy to traffic in a dangerous drug particularises a specific drug alleged to be the subject of the conspiracy, it is sufficient to prove that the defendant knew that what was agreed to be trafficked was a dangerous drug rather than the specific drug particularised. Depending on the circumstances, however, this answer may be subject to qualifications in order to ensure the defendant is afforded a fair trial. For example, where the defence case is that the defendant believed the subject of the conspiracy was to traffic in a particular type of drug different to that specified in the prosecution case and to which a lesser sentence tariff applies, the requirements of a fair trial may require the prosecution to prove his knowledge of the particular drug specified. Similarly, where there are multiple charges on an indictment alleging different conspiracies involving different types of dangerous drug, the requirements of a fair trial may require the prosecution to prove knowledge of the specific dangerous drug that is the subject of each separate conspiracy in order that the defendant will know the nature of each charge against him. 76. In the present case, the indictment charged a single conspiracy involving a single type of drug. The appellant’s case was that he did not know the parcels contained any type of dangerous drug. In convicting him, the jury clearly disbelieved his defence. There were no circumstances that might give rise to the risk of an unfair trial by reason of the appellant admitting to drug trafficking but of a type of drug carrying a lesser sentence or by reason of there being multiple conspiracies to which he might admit to one or more but not to others. 77. In the circumstances, it was not necessary for the prosecution to prove that the appellant knew the subject of the conspiracy was specifically cocaine rather than any dangerous drug and there was no misdirection on the part of the trial judge in respect of the mental element of the offence of conspiracy to traffic in a dangerous drug (as set out in the passage from his summing up quoted at [13] above). G. Disposition 78. For the reasons set out above, I would dismiss the appeal. Mr Justice Cheung PJ: 79. I agree with the judgment of Mr Justice Fok PJ. Lord Reed NPJ: 80. I agree with the judgment of Mr Justice Fok PJ. Chief Justice Ma: 81. For the above reasons, the appeal is unanimously dismissed. Mr Osmond Lam, Mr Benson Tsoi, Mr Ernest Yuen and Mr Dexter Leung, instructed by Or & Lau, for the Appellant Ms Vinci Lam, DDPP (Ag) and Ms Karen Ng, SPP (Ag), of the Department of Justice, for the Respondent [1] Before Li J, sitting with a jury, in HCCC 222/2015. [2] (Cap.134). Sections 4(1) and 4(3) are set out below. Section 39 concerns the penalty upon conviction of a conspiracy to commit an offence under that ordinance and matters of proof and provides: “Any person convicted of conspiracy to commit an offence under this Ordinance shall be liable to the penalty prescribed for that offence and any special rules of evidence which apply with respect to the proof of that offence under this Ordinance shall apply in like manner to the proof of conspiracy to commit such offence.” [3] (Cap.200). [4] CACC 95/2017 (Yeung VP, Poon JA and Albert Wong J), [2018] HKCA 322. [5] [2018] HKCA 586. [6] FAMC 47/2018, [2019] HKCFA 4 (Ribeiro PJ, Cheung PJ and Stock NPJ). [7] The reference to the contents not being “stoves” was understood to mean that they were not paraphernalia for the consumption of drugs. [8] The cases are summarised in Archbold Hong Kong, 2019 Edition at [5-533]; and, for cocaine, see HKSAR v Suwanti [2014] 1 HKLRD 619 at [5]. [9] The conspiracy charged in this case was one to traffic in a dangerous drug contrary to paragraph (a). Section 2 of the Dangerous Drugs Ordinance defines “trafficking” in relation to a dangerous drug and how “traffic in a dangerous drug” is to be construed. [10] [1994] 2 HKC 397 at 401G-402C. [11] See also, HKSAR v Chui Chi Wai [1999] 3 HKLRD 841 per Stuart-Moore JA (as he then was) at 846F. [12] Appearing with Mr Benson Tsoi, Mr Ernest Yuen and Mr Dexter Leung. [13] The Case for the Appellant at [2] (footnote omitted). The omitted footnote, appearing at the end of the first sentence of this paragraph refers to R v Tam Chun Fai [1994] 2 HKC 397 at 401F-402C and to HKSAR v Chui Chi Wai [1999] 3 HKLRD 841 at 846F. [14] [2009] 1 HKLRD 369 at [36]-[38]; and see, also, Archbold Hong Kong, 2019 Edition at [29-27A]. [15] The Case for the Appellant at [4(i)], [26(3)], [30] and [40]. [16] [2011] EWCA Crim 2591. [17] (1993) 96 Cr. App. R. 456. [18] [1987] AC 352. [19] [2018] HKCA 64. [20] Ibid. at [13]-[14]. [21] The Case for the Appellant at [47]. [22] (2006) 9 HKCFAR 614 per Sir Anthony Mason NPJ at [57]. [23] By reason, if necessary, of the presumption in section 47(1) of the Dangerous Drugs Ordinance that he intended to possess such a drug. [24] Crimes Ordinance (Cap.200), sections 159E(1) and 159E(2). [25] The wording of section 159A(1) is the same as the equivalent English legislation on which it is modelled, namely section 1(1) of the Criminal Law Act 1977 (as amended by the Criminal Attempts Act 1981). [26] [2007] 1 AC 18 at [13]. [27] Ibid. at [4]. [28] Equivalent to section 1(2) of the Criminal Law Act 1977. [29] [1967] 2 AC 224. [30] Report on Conspiracy and Criminal Law Reform (1976) (Law Com No 76), at [1.39]. [31] [2007] 1 AC 18 at [6], [8]. [32] [2012] 5 HKLRD 670 at [70]. [33] Ibid. at [9]. [34] Ibid. at [69]. [35] [2009] 3 HKC 137 at [28]-[35]. [36] The Case for the Appellant at [26] (emphasis in original). [37] Ibid. at [29]-[30] (italics in original). [38] FACC Nos. 26, 27 & 28/2018, [2019] HKCFA 32, at [49], cross-referring to the Indictment Rules (Cap.221C) rule 3(1). [39] The Case for the Appellant at [4(ii)]. [40] (1990) 90 Cr. App. R. 340. [41] Ibid. at p.350. [42] Principally the Misuse of Drugs Act 1971 and the Customs and Excise Management Act 1979, which both create various drug offences and provide for different maximum penalties for each. [43] R v Shivpuri [1987] AC 1 per Lord Bridge at p.15D-G. [44] Unreported, 7 August 1991, Lexis Official Transcripts (1990-1997), [1991] Lexis Citation 1588. [45] Ibid. at pp.6-7. [46] Ibid. at p.7. [47] [2003] EWCA Crim 2047. [48] The English equivalent of section 159A(1) of the Crimes Ordinance. [49] This is not a situation that could arise in Hong Kong for the reason set out at [18] above. [50] CA Judgment at [51]; see also at [45]. [51] R v Siracusa (1990) 90 Cr. App. R. 340 at p.343. [52] [1990] 1 SCR 1020. [53] Ibid. at p.1023c-g. [54] Ibid. at pp.1023h-1024c. [55] [2011] BCCA 341 at [16] (British Columbia Court of Appeal). [56] [2011] ONSC 5734 at [12] (Ontario Superior Court of Justice). [57] [2014] CanLII 37670 at [73], [75]-[76] (Newfoundland and Labrador Provincial Court), similarly explaining two other cases cited by the appellant in support of his interpretation of McLachlin J’s judgment in Saunders, namely R v Clyke [2002] OJ No. 5319 at [10] and R v Henareh [2014] ONSC 2588 at [211]. [58] (2010) 241 CLR 177. [59] (2011) 210 A Crim R 374. [60] Ibid. at [97], referring to LK at [112]; see also per Hall J at [260].
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Robert French NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Robert French NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Mr Justice Robert French NPJ. Mr Justice Cheung PJ: 4. I agree with the judgment of Mr Justice Robert French NPJ. Mr Justice French NPJ: Introduction 5. It is an offence against s 161(1)(c) of the Crimes Ordinance (Cap 200) for a person to obtain access to a computer with a view to dishonest gain for that person or for another. Primary school teachers and a friend who used phones and a computer to transmit to third parties questions to be used in competitive admission interviews were charged under the provision. They were acquitted of the charges. The question on which this appeal turns is whether or not a person can commit the offence when the only computer being used belongs to that person. For the reasons that follow, the answer is no and the appeal by the Secretary for Justice must be dismissed. Factual Background 6. The respondents to this appeal were three teachers at the Church of Christ in China Heep Woh Primary School (the first three named respondents) and a teacher in another school (the fourth respondent) who had been a classmate of the second respondent. 7. Children could seek admission to the school, which was government subsidised, through an open admission process involving a competitive interview-based assessment. The first three respondents were among teachers at the school who were to conduct the open admission interviews on 14 June 2014. They were briefed on the day before the interview by the teacher in charge of the process for the 2014/2015 academic year. 8. Each of the teachers being briefed, including the three respondents, was provided with a plastic folder containing a copy of the Interview Questions and the Marking Scheme. The first and second respondents used their mobile phones to take photographs of the contents of the folders at the briefing and sent the photographs to third parties using WhatsApp. The first respondent sent the photographs to a friend in her church. The second respondent sent her photographs to the third respondent in the course of the briefing. The third respondent used a school computer to type up the interview questions into a Word document which was then sent by email on the school computer to the second respondent and, using her mobile phone, to a friend. The second respondent sent the Word document by email to the fourth respondent and a friend. The fourth respondent used her mobile phone to take photographs of the questions and transmitted them to two friends by WhatsApp. 9. Each of the respondents was charged with an offence against s 161(1)(c) of the Crimes Ordinance (Cap. 200). The charges against each were in common form, namely: “Obtaining access to a computer with a view to dishonest gain for himself or another, contrary to s 161(1)(c) of the Crimes Ordinance, Cap 200.” The brief particulars of the offences differed slightly between the respondents and were as follows: “• [The first respondent] on 13 June 2014, in Hong Kong, obtained access to a computer, namely, a Xiaomi smartphone with a view to dishonest gain for another. • [The second respondent] on 13 June 2014, in Hong Kong, obtained access to a computer, namely, a Samsung smartphone, with a view to dishonest gain for another. • [The third respondent] on 13 June 2014, in Hong Kong, obtained access to a computer, namely, a desktop computer of the Church of Christ in China Heep Woh Primary School, with a view to dishonest gain for another. • [The fourth respondent] on 13 June 2014, in Hong Kong, obtained access to a computer, namely, an iPhone, with a view to dishonest gain for another.” 10. The events of 13 June 2014 and the conduct of the respondents as set out above were not in dispute at trial, which proceeded before Permanent Magistrate, Ms Veronica Heung. On 25 February 2016, the Magistrate acquitted all four respondents. She did so on the bases that: (i) She had a reasonable doubt that the teacher in charge had ever mentioned at the briefing seminar the need for confidentiality in relation to the Interview Questions. (ii) In each case she was not satisfied beyond reasonable doubt that the necessary element of dishonesty had been made out. 11. The appellant applied to the Magistrate asking her to review her decision to acquit pursuant to s 104 of the Magistrates Ordinance (Cap 227). On 26 September 2016, the Magistrate confirmed her decision. The appellant then applied to the Magistrate to state a case on a point of law pursuant to s 105 of the Magistrates Ordinance (Cap 227). Under that section where it is desired to question by way of appeal any order or determination on the ground that it is erroneous in point of law, a party to the charge or the Secretary for Justice may apply to the magistrate to state and sign a case setting forth the facts and the grounds upon which the order or determination was granted for the opinion of a judge. 12. The Magistrate stated a case setting out the questions arising from it for the opinion of the Court of First Instance. Despite the requirement for a point of law, the questions largely went to the Magistrate’s factual conclusions. They were as follows: Question 1: Did I err in finding that D1-4 might not be aware that the questions distributed at the briefing were the actual questions to be asked at the Interview? Question 2: Did I err in finding that D1-4 might not be aware that the questions distributed at the briefing were confidential in nature? Question 3: Did I err in finding that D1-4 might not have the requisite mens rea to dishonest gain for another? Question 4: Did I err in acquitting each of D1-4 on the facts and the evidence of this case in that such verdicts were against the evidence properly considered and assessed, and were perverse in the sense as recognized in Li Man Wai v Secretary for Justice?[1] Question 5: Did I err in failing to give proper consideration to the evidence of this case and in taking irrelevant matters into account in maintaining my decision to acquit D1-4 in the review hearing? 13. The appeal came on for hearing before Deputy High Court Judge C P Pang, who delivered judgment on 6 August 2018.[2] As appears from the Stated Case none of the questions raised any issue of the proper construction of s 161(1)(c). However, after the oral hearing the Judge raised with counsel the legal question whether the charges against the four respondents were appropriate and, in particular whether their acts amounted to the actus reus of “[obtaining] access to a computer” within the meaning of s 161(1)(c). The parties made further written submissions on that point. The appellant’s submission on the law as to the scope of the actus reus of the offence was quoted by the Judge: “A person can commit the actus reus of obtaining access to computer in infinite ways, such as using a smartphone [which is now settled law a computer] to take upskirt photos of females or using it to send confidential information to others. Unauthorized extraction of information from a computer is but one way of obtaining access to it.”[3] The Judge rejected that proposition as one which could lead to absurd consequences. 14. In delivering his decision, which is the subject of the appeal to this Court, Deputy Judge Pang referred to Li Man Wai v Secretary for Justice and the statement in that judgment that: “…the law as it now stands does not punish all kinds of unauthorized access to computers, it only prohibits the unauthorized and dishonest extraction and use of information …”[4] He held that to prove the commission of the offence, the prosecution must prove the unauthorized extraction and use of information from a computer.[5] The use by the first, second and fourth respondents of their own smartphones to take photographs and to receive/send them by WhatsApp were not unauthorized extractions and use of information from the computer.[6] The use by the third respondent of the desktop computer to create the Word file was not unauthorized and she did not obtain or extract the Word file from the school’s computer system. 15. The Judge’s conclusions on the question of law he had raised made consideration of the five questions in the Stated Case moot. However, he went on to consider them briefly. He held that the magistrate had correctly applied the test for dishonesty in R v Ghosh.[7] While the Judge might have come to a different view, the magistrate, deciding on the facts as she found them, could not be criticised for her ruling that the prosecution had failed to prove the element of dishonesty beyond reasonable doubt. The Judge answered all five questions in the negative. The appeal from the magistrate’s decision was dismissed. [8] 16. The appellant subsequently applied to Deputy Judge Pang for a certificate under s 32 of the Hong Kong Court of Final Appeal Ordinance (Cap 484) that a point of law of great and general importance was involved in his judgment to enable the appellant to appeal to this Court. The Judge, by an Order dated 6 September 2018, certified that the following point of law of great and general importance was involved in the case: “Is the actus reus of the offence under section 161(1)(c) of the Crimes Ordinance, Cap 200 restricted to the unauthorized extraction and use of information from a computer?” 17. On 2 November 2018, the Appeal Committee of this Court granted leave to appeal from the Judge’s decision on the basis that a point of law of great and general importance was involved in the case, namely: “What is the scope of the actus reus of the offence under section 161(1)(c) of the Crimes Ordinance (Cap 200)? In particular, is it restricted to the unauthorized extraction and use of information from a computer?” The Court also granted leave on the substantial and grave injustice ground, under s 32, for the appellant to contend, subject to the conclusion reached as to the foregoing point of law, that it is reasonably arguable that the finding as to lack of dishonesty was perverse. The Statutory Framework 18. The process of statutory construction begins with the text to be construed, identification of the relevant constructional choices it presents, a predisposition to choose an ordinary meaning, and a choice always informed by context and purpose. The statutory text in this case is s 161(1)(c) of the Crimes Ordinance (Cap 200), the provision under which the respondents were charged. Its immediate context is the section read as a whole and its location in the Ordinance. 19. The section appears as the last substantive offence-creating provision in the last part of the Ordinance, Part XIII entitled “Miscellaneous Offences”. There are only two offence-creating sections, namely s 160 which covers “loitering” and s 161 entitled “Access to computer with criminal or dishonest intent”. Section 161 provides: “Access to computer with criminal or dishonest intent (1) Any person who obtains access to a computer— (a) with intent to commit an offence; (b) with a dishonest intent to deceive; (c) with a view to dishonest gain for himself or another; or (d) with a dishonest intent to cause loss to another, whether on the same occasion as he obtains such access or on any future occasion, commits an offence and is liable on conviction upon indictment to imprisonment for 5 years. (2) For the purposes of subsection (1) gain (獲益)andloss (損失)are to be construed as extending not only to gain or loss in money or other property, but as extending to any such gain or loss whether temporary or permanent; and— (a) gain (獲益)includes a gain by keeping what one has, as well as a gain by getting what one has not; and (b) loss (損失)includes a loss by not getting what one might get, as well as a loss by parting with what one has.” 20. The part of the text which is directly applicable to this appeal and defines the offence with which each of the respondents was charged therefore reads as follows: “Any person who obtains access to a computer … with a view to dishonest gain for himself or another … whether on the same occasion as he obtains such access or on any other future occasion, commits an offence …” The Legislative History 21. The legislative history, including the Memorandum for Legislative Council and the Second Reading Debate, are referred to in order to ascertain the context and purpose of the provision under which the respondents were charged. 22. Section 161 was introduced into the Crimes Ordinance (Cap 200) by the Computer Crimes Ordinance No 23 of 1993. That Ordinance was described in its long title as: “An Ordinance to clarify and amend the criminal law relating to the misuse of computers, and for related matters.” It created new offences and broadened the range of existing offences. 23. In addition to s 161, the 1993 Ordinance enacted a new s 27A in the Telecommunications Ordinance (Cap 106), which relevantly provided: “Unauthorized access to computer by telecommunications (1) Any person who, by telecommunication, knowingly causes a computer to perform any function to obtain unauthorized access to any program or data held in a computer commits an offence and is liable on conviction to a fine… (2) For the purposes of subsection (1)— … (b) access of any kind by a person to any program or data held in a computer is unauthorized if he is not entitled to control access of the kind in question to the program or data held in the computer and— (i) he has not been authorized to obtain access of the kind in question to the program or data held in the computer by any person who is so entitled; (ii) he does not believe that he has been so authorized; and (iii) he does not believe that he would have been so authorized if he had applied for the appropriate authority.”[9] 24. The Computer Crimes Ordinance No 23 of 1993 amended s 59 of the Crimes Ordinance (Cap 200), which is an interpretive provision for Part VIII relating to “Criminal Damage to Property”. The relevant parts of the new s 59(1) and (1A) were: “(1) In this Part, property means: … (b) any program, or data, held in a computer or in a computer storage medium, whether or not the program or data is property of a tangible nature. (1A) In this Part, to destroy or damage any property in relation to a computer includes the misuse of a computer. In this subsection misuse of a computer means— (a) to cause a computer to function other than as it has been established to function by or on behalf of its owner, notwithstanding that the misuse may not impair the operation of the computer or a program held in the computer or the reliability of data held in the computer; (b) to alter or erase any program or data held in a computer or in a computer storage medium; (c) to add any program or data to the contents of a computer or of a computer storage medium, and any act which contributes towards causing the misuse of a kind referred to in paragraph (a), (b) or (c) shall be regarded as causing it. 25. The Ordinance also amended s 85 of the Crimes Ordinance (Cap 200) in relation to making false entries in a bank book etc by extending the definition of “books” to include “any disc, card, tape, microchip, soundtrack or other device on or in which information is recorded or stored by mechanical, electronic, optical or other means.” Section 19 of the Theft Ordinance (Cap 210) relating to false accounting was amended by including, in s 19(3), a definition of “record” as including “a record kept by means of a computer”. 26. Section 11 of the Theft Ordinance (Cap 210), relating to burglary was amended by adding a new interpretive provision (s 11(3A)) in the following terms: “The reference in subsection (2)(c) to doing unlawful damage to anything in a building includes— (a) unlawfully causing a computer in the building to function other than as it has been established by or on behalf of its owner to function, notwithstanding that the unlawful action may not impair the operation of the computer or a program held in the computer or the reliability of data held in the computer; (b) unlawfully altering or erasing any program, or data, held in a computer in the building or in a computer storage medium in the building; and (c) unlawfully adding any program or data to the contents of a computer in the building or a computer storage medium in the building.” 27. In a memorandum to the Legislative Council submitted with the Computer Crimes Bill reference was made to a Working Group on Computer Related Crime which was established in 1984 to report to the Attorney-General and did so in March 1988. Its recommendations were considered by the Legal Affairs Policy Group which, as quoted in the memorandum to the Legislative Council, agreed: “(a) Although there is little evidence that computer-related crime has become a major problem, appropriate legal sanctions should be put in place given the widespread use of computers in Hong Kong. (b) The present law is inadequate in areas where computers have been accessed dishonestly. Most of the preparatory work for a computer-related crime can be performed without committing any existing offence. Such preparatory work, which could include gaining access to a computer with an intent to deceive or to cause loss to another or gain for the wrongdoer should be specifically punishable without the need to prove the ultimate criminal act has been committed. A new offence of [‘dishonest accessing’] should therefore be created to make it unlawful to gain access to computers with intent to deceive, cause loss to another or gain for the offender.” The recommendation in that paragraph gave rise to s 161. Other recommendations explain the other amendments made in the Bill. 28. In the Second Reading Speech for the Bill in the Legislative Council, the Secretary for Security said: “Although there is no evidence at present that computer-related crime is widespread, the Government believes it is necessary to put in place appropriate legal sanctions against computer misuse, which can result in dishonest gain for the wrongdoer or loss to others.” He went on to say: “…the Bill will create a new offence of gaining access to a computer with dishonest intent or with intent to commit an offence. This would apply irrespective of whether the access was unauthorized or not, and irrespective of the means of access.” 29. A Subcommittee of the Legislative Council was established to study the Bill. It came up with a number of conclusions. Its work and recommendations were set out in the speech of Mr Steven Poon in the Second Reading Debate. The Committee had actively pursued the question of what constituted “unauthorized access”. Mr Poon said: “The subcommittee holds the view that unauthorized access to computers should not include accidental access such as dialing [sic] a wrong number or mistyping a key scenario. To address the subcommittee’s concern the Administration has agreed to amend the relevant section by building in an element of intent to the effect that only a person who intentionally obtains access to a programme or data held in a computer without authority will be penalized. The necessary amendment will be moved by the Administration at the Committee stage.”[10] 30. The Secretary for Security also referred, in the Second Reading Debate, to the Subcommittee’s conclusions and added: “There was also discussion in the subcommittee of the intention behind the new offence of access to a computer with criminal or dishonest intent proposed in clause 6 of the Bill. This offence is aimed at penalizing access to a computer for acts preparatory but falling short of the commission of a fraud. Examples would include someone obtaining access to computerized bank records to obtain details of credit balances for later fraudulent use or an employee writing instructions to a computer that will result in due course in the computer making automatic payments to his account. Currently such activity would not amount to an offence. Once the fraud is put into effect this section would no longer be relevant as other provisions of the Theft Ordinance will apply.” He went on to say that an amendment to be made to clause 6 of the Bill (ie s 161), concerning access to a computer with criminal or dishonest intent, would modify the provision as it appeared in the Bill so that it covered access to obtain data in transit in any part of a computer system with dishonest or criminal intent.[11] 31. In the Bill submitted to the Legislative Council the proposed interpretive provision in s 161(2) had contained a paragraph (a) which read: “a person obtains access to a computer if (and only if) he causes a computer to perform any function”. That paragraph was deleted by amendment moved by the government. The Constructional Question 32. There are a number of constructional questions which could arise in this case. One is whether a smartphone or an iPhone is a computer for the purposes of s 161(1)(c)? Another is whether, assuming such a device is a computer, its use to take photographs and transmit them to another involves “access to a computer”? The answers to those questions are not straightforward and do not fall to be determined in this appeal. The ground of importance on which this Court granted leave to appeal was narrowed, in argument, to a constructional question, sufficient, if decided adversely to the appellant, to dispose of the appeal. That question is whether the offence created by s 161(1)(c) of the Crimes Ordinance covers a use by a person of their own computer with the requisite intent? 33. As the particulars of the offences indicate, each of the respondents except for the third respondent, was charged on the basis of their use of a mobile phone. It was not suggested that the phones belonged to anyone other than those respondents. The third respondent was charged in relation to a desktop computer provided by the school. Given the absence of any evidence of a limit on her authority to use it, including use for private purposes, the appellant conceded that for the purposes of this appeal her position was the same as that of the other respondents. That is to say, the school computer could be treated, for the purposes of the law, as though it were her own. We are not concerned with the correctness of that concession and our acceptance of it does not create a precedent for future cases involving the use by a person of a computer allocated to them by their employer. In such cases, questions of private use rights might be raised distinct from authorized use in the course of employment. The Approach to Construction 34. This Court has stated in numerous judgments the principles which it applies to the task of statutory construction. It looks to the text of the provision to be construed, its context, including the statute of which it is part and its legislative history, and its purpose. As Ma CJ said in Town Planning Board v Town Planning Appeal Board:[12] “The purpose may be clear from the provision itself or it may be necessary to look at the Explanatory Memorandum to the bill introducing the provision or a ministerial or official statement may be utilised for this purpose.” 35. In this case the context includes the amendments to a number of statutes which were made by the Computer Crimes Ordinance 1993. There is little history of s 161 itself, as it was a new creation although the amendment made, in the course of debate in the Legislative Council, to the clause which became s 161 can be seen as part of the legislative history. 36. The Memorandum for Legislative Council, the Second Reading speech of the Secretary, the recommendations of the Legislative Council Subcommittee, and the government’s adoption of those recommendations all go to indicate the purpose of the provision which is discussed below. The Constructional Choice 37. The term “ambiguity” is often used to indicate that a word or statutory term or provision has more than one possible meaning, but that word itself has more than one meaning. It can refer to “doubt or uncertainty”. It is also attributed to words with more than one meaning. It sometimes suggests a deficiency in drafting. However, it is not an unusual occurrence that even well drafted statutes offer choices of construction relevant to their application to a particular class of facts. That is the present case in relation to the words with which s 161(1) opens, namely “any person who obtains access to a computer …”. On one construction, relevant to the present case, a person “obtains access to a computer”, within the meaning of s 161(1) if he or she uses any computer, whether their own or somebody else’s. The alternative construction applies the section only to the use by a person of a computer belonging to somebody else. 38. The ordinary meaning of the words which open s 161 are indicative of “unauthorized” use of a computer as suggested in Li Man Wai v Secretary for Justice.[13] The word “obtain” is relevantly defined in the Sixth Edition of the Shorter Oxford English Dictionary as “come into the possession or enjoyment of; secure or gain as the result of request or effort, acquire, get.”[14] “Obtain” so defined, is not a word which sits easily with the use by a person of their own device. Nor is the word “access” which, used as a noun, ordinarily means “admittance (to the presence or use of) … [the] action or process of obtaining stored documents, data etc.”[15] As a verb, it includes in its usage “gain access to (spec. data etc held in a computer-based system, or such a system)”.[16] As a matter of language one always “obtains” access to something to which one did not have access before. 39. There is a degree of redundancy in the statutory language to the extent that the verb “obtain” is a synonym for “access” when used as a verb. That overlap, however, merely emphasizes the oddness of applying s 161 to the use by a person of their own computer. The section could have been framed with the opening words “[a]ny person who uses a computer …” on which wording a constructional choice limiting the provision to the use of somebody else’s computer would be unlikely. 40. As noted above, the Bill as presented to the Legislative Council was amended to delete an interpretive provision in the proposed s 161(2)(a) which would have provided: “A person obtains access to a computer if (and only if) he causes a computer to perform any function.” This was evidently made on the suggestion of the Legislative Council Subcommittee that it would have a limiting effect as it would not cover communications between computers to obtain or tap data in transit. It may be observed that had that provision remained, there might have been a stronger textual case for a construction extending s 161 to the use of the offender’s own computer. That would have flowed from the generality of the phrase “causes a computer to perform any function”. It would have accorded textually with the reference in the Secretary’s Speech to the section applying “irrespective of whether the access was authorized or not” which was relied upon by the appellant. But that generality is not reflected in the text of the provision as enacted. As a matter of background the Working Group referred to earlier had produced an interim report which recommended the creation of the offence of “dishonest accessing” under the Theft Ordinance (Cap 210) which began with the words: “Any person who dishonestly accesses a computer, with or without due authority with intent to deceive or with a view to gain for himself or another…” It does not appear from the available record what became of that draft or the reason that the words “with or without due authority” did not appear in the Bill. Their inclusion might have strengthened the appellant’s argument. Their omission is neutral as the primary point of reference is the text as it was enacted. 41. The statutory context in which s 161 was enacted is suggestive but not determinative of its appropriate construction. For the most part the other provisions enacted by the Computer Crimes Ordinance 1993 appear to define offences by reference to access to or misuse of a computer other than the offender’s own computer. The “hacking” offence created by s 27A of the Telecommunications Ordinance (Cap 106) was directed to a person who “by telecommunications, knowingly causes a computer to perform any function to obtain unauthorized access to any program or data held in a computer”[17]. Not only is the section clearly directed at a computer other than the offender’s own, but it uses the term “access”. The word “unauthorized” is comprehensively defined in s 27A(2). It does not appear in s 161(1). The appellant pointed to that difference in support of a submission that s 161(1) covered the use of one’s own computer, which could not be described as ‘unauthorized’. The difference does not overcome the inference to be drawn from the use of the words “obtain” and “access” in s 161 and the removal of the definition of “access” during the Second Reading Debate. 42. The purpose of s 161 emerges with reasonable clarity from the Legislative Council Brief. As the law stood prior to the amendment, a computer might be accessed by way of preparation for the commission of a substantive offence where the access of itself would not constitute an offence. The stated purpose of the new section set out as quoted in Legislative Council Memorandum was to create: “[a] new offence of ‘dishonest accessing’ … to make it unlawful to gain access to computers with intent to deceive, cause loss to another or gain for the offender.”[18] 43. The language of the Memorandum itself, using as it did the term “gaining access”, indicates a purpose directed at conduct by an offender involving access to somebody else’s computer. That limitation is explicable as a matter of policy. The definition of inchoate offences presents challenges particularly in relation to their mens rea elements which are necessarily directed to the commission of a future offence. The practical difficulty of establishing a preparatory mens rea may be lessened where it is connected to an actus reus involving the wrongful use of somebody else’s computer. 44. All in all, text, context and purpose in this case point in the direction of a construction of s 161 that does not extend to the use of the offender’s own computer, unless that use involves getting access to another computer in which case the conduct is also likely to be covered by one of the other offences created or extended by the Computer Crimes Ordinance 1993. It was not suggested that the present case involved any of the respondents using their own devices to access another’s device. 45. The appellant argued for the wider construction of s 161 and did so largely on the ground that such a construction secured a beneficial public policy. The appellant pointed out that technology had moved on considerably since the enactment of the Computer Crimes Ordinance 1993. He gave as examples the use of computers in an age of electronic banking and online sales and purchase to commit fraud. Reference was made to the use of social networking sites to stalk and harass. The internet, it was said, “facilitates new modes of offending at a scale that can hardly be achieved in the offline physical environment.”[19] Examples were given of the application of s 161(1) in the prosecution of cases, involving: (i) use of a private email account to forward a company email to another by using the copy and paste method;[20] (ii) use of a mobile phone to take clandestine images in private places;[21] (iii) uploading sex videos on to the internet;[22] (iv) sending an email which contains false information;[23] (v) use of a computer to make an application on the internet for a credit card for some fraudulent scheme.[24] Those forms of offending, it was submitted, could not have been foreseen at the time of the enactment of the Computer Crimes Ordinance 1993. However they all involved misuse of a computer and, according to the appellant, “fall squarely within the language of s 161, which is essentially an offence of dishonesty and was specifically created and added to the [Crimes Ordinance (Cap 200)] under Part XIII of Miscellaneous Offences to proscribe computer misuse.”[25] The appellant argued that the application of s 161 in these cases is simply a matter of giving the words their natural meaning and giving effect to the legislative intent. 46. It was further argued that a restrictive interpretation of s 161 would significantly undermine its purpose and efficacy in combating computer-related crime. The appellant offered what was called a real case list of wrongdoing which would fall under a legal lacuna and could be committed with impunity on the narrow construction of s 161(1). The list included hacking, phishing – ie sending false emails to obtain credit card details, distributed denial of service attacks launched from Hong Kong against overseas targets, identity theft and clandestine photographs. 47. There are two short comments to be made about the appellant’s submissions. The first submission seeks a construction of s 161 which creates substantive offences beyond the scope of its purpose which was to create preparatory offences. The second submission appears to offer a desirable public policy and urges the Court to adopt a construction that advances that policy. But that is not the function of the Court in statutory construction. The Court seeks to ascertain the purpose of the statute to inform its construction. It does not identify a purpose which it thinks would be beneficial and then construe the statute to fit it.[26] Conclusion 48. For the reasons set out above, s 161(1)(c) on its proper construction does not apply to the use by a person of his or her own computer, not involving access to another’s computer. For that reason, and in light of the concession made by the appellant in relation to the third respondent, the appeal must be dismissed against all of the respondents. Mr David Leung, SC, DPP, Mr Robert Lee, SADPP and Ms Kasmine Hui, SPP, of the Department of Justice, for the Appellant Mr David Boyton, instructed by T K Tsui & Co., for the 1st and 4th Respondents Mr Duncan Percy, instructed by Kenneth W Leung & Co., for the 2nd Respondent Mr James Tze, instructed by Raymond Luk & Co., for the 3rd Respondent [1] (2003) 6 HKCFAR 466. [2] Secretary for Justice v Cheng Ka Yee & Others [2018] HKCFI 1809. [3] Secretary for Justice v Cheng Ka Yee & Others [2018] HKCFI 1809 [50]. [4] (2003) 6 HKCFAR 466 [26]. [5] Secretary for Justice v Cheng Ka Yee & Others [2018] HKCFI 1809 [68]. [6] Secretary for Justice v Cheng Ka Yee & Others [2018] HKCFI 1809 [69]. [7] [1982] EWCA Crim 2; [1982] QB 1053. [8] Secretary for Justice v Cheng Ka Yee & Others [2018] HKCFI 1809 [82]-[83]. [9] Subsections (3) and (4) of the new s 27A are not material for present purposes. [10] Hong Kong Legislative Council Debates, 21 April 1993, 2931 (emphasis added). [11] Hong Kong Legislative Council Debates, 21 April 1995, 2934 [12] (2017) 20 HKCFAR 196 at [29]. [13] (2003) 6 HKCFAR 466. [14] Shorter Oxford English Dictionary (6th ed, 2007). [15] Ibid. [16] Ibid. [17] HKSAR v Chu Tsun Wai [2019] HKCFA 3 at [8]. [18] Security Branch, Legislative Council Brief (25 March 1992) para 3(b), enclosed in Memorandum for Legislative Council (26 March 1992). [19] Case for the appellant para 44. [20] HKSAR v Siu Pui Yiu FAMC 47/2012. [21] HKSAR v Ho Siu-Hei, Jason [2018] HKCFI 974, unreported. [22] HKSAR v Wong Ngai Sang DCCC 200/2017, unreported. [23] HKSAR v Yip Kim Po and Five Ors CACC 353/2010, unreported. [24] HKSAR v Lai Mei Yuk, Candy CACC 427/2003, unreported. [25] Case for the appellant para 46. [26] China Field Ltd v Appeal Tribunal (Buildings) (No 2) (2009) 12 HKCFAR 342 at [36].
Mr Justice Ribeiro PJ: 1. I agree with the judgment of Lord Walker of Gestingthorpe NPJ and with the concurring judgment of Mr Justice Fok PJ. Mr Justice Tang PJ: Background 2. The plaintiff’s claim for defamation and malicious falsehood against the defendant arose out of a probate action over the will of Nina Wang (the “probate action”). In the probate action,[1] Tony Chan sought to propound as the last will of Nina Wang a will under which he was the sole beneficiary of her estate which included the Chinachem Group (“Chinachem”). Against him was the Chinachem Charitable Foundation Limited (“CCFL”) the beneficiary of Nina Wang’s estate under an earlier will (if Tony Chan’s will was valid). The Secretary for Justice was also a party as guardian of charities. It was Tony Chan’s case that he was on intimate terms with Nina Wang, a widow and much older woman. The probate action attracted great public attention and Tony Chan, a married man with children, great opprobrium. 3. Mr Gilbert Leung Kam Ho (“Gilbert Leung”) was a witness for CCFL. He began his evidence on the 8th day of the trial and was cross-examined by Mr Ian Mill QC, leading counsel for Tony Chan,[2] on an article in the Apple Daily of 7 May 2009 which stated that in July 2007, shortly after Nina Wang’s death, Chinachem sold a piece of land in Tai Po (the “land”) to his company for $1.01 million although it had a conservative estimated value of $10 million. Gilbert Leung said the land was not sold to him at an undervalue and that he had not attempted to estimate the value of the land at all. In order to undermine Gilbert Leung’s credibility, on the 9th day of the trial (21 May 2009), Mr Mill before he continued with his cross-examination produced to the trial judge (Lam J as he then was) and the parties a bundle of documents which included a lot index plan, a land search and a document in Chinese (the “Document”) which purported to be an investment proposal for the development of the land into a cinerarium. Mr Mill explained that the Document would be used to attack Gilbert Leung’s independence as a witness because he had received a very large financial benefit from Chinachem shortly after he provided a witness statement for use in the Probate Action. 4. Lam J wanted to know the provenance of the documents and these exchanges took place in open court: “His Lordship: It depends on how the questions are put. Perhaps, Mr Mill, can you tell us the provenance of these Chinese documents before I decide whether --- Mr Mill: Yes, I can, my Lord. The individual who provided it to us is a Mr Edmund Tsang.[3] He says that he was given that by Mr Gilbert Leung. His Lordship: Yes, who is this Edmund Tsang and on what occasion was he given this document? Mr Mill: My Lord, as I understand it, Mr Leung was trying to interest Mr Tsang in the investment, but that’s the extent of my understanding, my Lord.” 5. It is not disputed that the Document was prepared by Mr Gilbert Leung and it showed under the heading “Property Valuation” that if the land was developed as a cinerarium which was permitted under relevant town planning zoning, there would be gross revenue after development of some $360 million at a construction cost of approximately $10 million. As Yuen JA pointed out in the Court of Appeal,[4] on its face the Document appeared to contradict the evidence which Gilbert Leung had given. 6. Gilbert Leung accepted in cross-examination by Mr Mill that the document was made by him[5] and he also said that he had discussed the business proposal made in the Document with the plaintiff.[6] & [7] However, in this litigation, it has always been accepted that the Document had not been provided to Tony Chan’s team by Mr Tsang and the statement that it had been provided by him was untrue. 7. The statement was widely reported by the media and Mr Tsang sought to correct the untruth by, inter alia, issuing press releases in five major newspapers on two separate days and incurred expenses of about HK$5 million.[8] It is not disputed that the exchanges in court and the press reports were protected by absolute privilege. This appeal is concerned with the out of court communication of the untrue statement to Mr Mill and Mr Midgley. 8. In order to obtain the identity of the person who provided this false information to Tony Chan, the plaintiff applied for and obtained a Norwich Pharmacal order against Tony Chan compelling him to disclose “(the informant’s) identity and the contents of his/her communication with (Tony Chan) or his legal representatives to the effect that it was (the plaintiff) who provided the document.”[9] Following the disclosure of the defendant’s name, the present action was brought for malicious falsehood as well as for defamation based on the natural and ordinary meaning of the publication as well as by way of innuendo. It was the plaintiff’s pleaded case that the words “Edmund Tsang” in the exchange quoted in para 4 above, were false and defamatory and were based: “… on instructions [Mr Mill] heard from the Defendant when she was providing instructions to Mr Midgley, a partner in the firm Haldanes over the speaker phone in a mobile telephone conversation between the Defendant and Mr Midgley on the 21 May 2009…”[10] The Trial 9. The action was heard before Mr Recorder Pow SC. At trial, the overarching defence was that the defendant’s communication with Mr Mill/Mr Midgley was protected by absolute privilege relying on the judgment of Devlin LJ (as he then was) in Lincoln v Daniels[11]under which absolute privilege might be afforded to the provision of the impugned information (the foreshadowing) if it is sufficiently closely connected with the actuality, i.e. the use of the information in court. The learned Recorder said: “What Mr Mill did and said in open court was the ‘actuality’ that was undoubtedly absolutely privileged. The issue in this case is whether this absolute privilege applied also to the argued ‘foreshadowing of it’: the communication between Mr Midgley/Mr Mill and the defendant on the issue of provenance of the Document at a time when Mr Mill was imminently contemplating and intending to make use of the Document in the cross-examination of Gilbert Leung in open court proceedings.”[12] 10. The learned Recorder also said there was: “… close proximity between the subject occasion/publication and Mr Mill’s actual utterance in open court in the course of making use of the Document.”[13] “… it is a matter of necessity that absolute privilege should be extended to the communication (pertaining to the contents, purport and provenance of that document) between the provider of such document and the advocate/lawyer who was contemplating the use of that document in the cross-examination of a witness.”[14] 11. His Lordship concluded that “the communication between [Mr] Midgley/Mr Mill and the defendant over the mobile telephone on 21 May 2009 was protected by absolute privilege.”[15] This conclusion was determinative of the action. This overarching defence lies at the heart of this appeal and will be considered fully in due course.[16] 12. Naturally, the learned Recorder went on to deal with the action in case his conclusion on absolute privilege is wrong. 13. Mr Midgley was the plaintiff’s witness and testified under subpoena. His evidence which was accepted by the Recorder is also relevant to absolute privilege, and I will deal with it in some detail. Apart from what Mr Midgley said in his written response to a Law Society’s enquiry which will appear below, the judge summarised his evidence in these words: “43. … (1) The defendant became known to Mr Midgley when she claimed to be in a position to provide papers of a previous trial in which she was engaged with Gilbert Leung. To access the papers, she had to go to England. She said that the judge in that trial made remarks critical of Gilbert’s credibility. Arrangement was thus set up by the defendant rather enthusiastically to retrieve the relevant papers from her former solicitors in England. That was supervised by Mr McDonnell. (2) The defendant also became involved in some other issues and amongst those issues in which she was involved, she [informed] the team that a third party can point to a document which would be useful in impeaching Gilbert Leung’s credibility. That third party however expected to be paid for the information. On the one hand, in order to advise client as to whether the information was worthy, the team had to see the document. On the other hand, the third party did not have confidence in letting Tony Chan’s team know either the name of the provider or the contents of the document. There was some distrust on the part of the third party as to whether he would get paid. Eventually, it was arranged through the defendant that the English part of team, Mr Mill and Mr McDonnell would be given the Document to consider. When the Document was reviewed by Mr Mill, he advised client against paying the sum asked for, being HK$10 million. The matter was then shelved. This agreement was adhered to and Mr Midgely was not told about anything concerning the Document. That was why Mr Midgely was confident to say that up to 17 May 2009, he did not know who was the provider of the Document. (3) … (4) As to the telephone conversation between the defendant and Mr Midgley on 21 May 2009, he said that his concern at the time was to ensure that his client would not have to pay any fee for the permission to use the Document.[17] Then Mr Mill requested him to call the defendant to ask questions on the provenance of the Document. That call was made quickly by mobile telephone inside his hotel room just before rushing to court. There was thus no attendance note. 14. In his written response Mr Midgley had said:[18] “7. By the morning of the day on which Mr Leung was to be cross-examined by Mr Mill QC, 21 May 2009, we still had not obtained from [the defendant] that third party consent, but she had supplied the material which was involved. Moreover, we had met and spoken with [the defendant] and she had appeared entirely straightforward at all times. 8. That morning, I received a telephone call from [the defendant] informing me that the (unidentified) third party who had produced the written material had now for the first time authorised her to allow us to use that written material for that purpose. I immediately went to see Mr Mill QC in his hotel prior to Court to inform him of this amongst other things. 9. Mr Mill, who had possession of that material, told me that he required to speak with [the defendant] in my presence (using my mobile telephone’s loudspeaker operation for the purpose) to be sure that the necessary authority had been given, and to seek further information, before he was prepared to use that material in his cross-examination of Mr Leung. Accordingly, I telephoned [the defendant] on my mobile telephone with the loud speaker phone function on, and Mr Mill relayed his questions through me as instructing solicitor. 10. Once [the defendant] had confirmed that authority had indeed been given to the use of the material, Mr Mill asked through me where it had come from. Mr Mill has informed me that he wanted the answer to this question because he anticipated (correctly as it turned out) that the trial judge might ask the same question before permitting cross-examination to proceed. [The defendant’s] answer to that question was ‘Edmund Tsang’. The answer that she gave was heard by Mr Mill. Mr Mill then asked [the defendant] through me whether, if it became necessary, he could reveal the name Edmund Tsang to the Court. [The defendant] said ‘yes’. Again, Mr Mill heard the question that I put and the answer that she gave.” 15. At trial, the defendant said in the telephone conversation on 21 May 2009 she mentioned the name “Edmund Tsang” in response to what she thought was Mr Midgley’s question, namely, “to whom had Gilbert Leung submitted the investment proposal in the Document.”[19] and not as Mr Midgley said “where [the Document] had come from”.[20] She said in March she had told Mr John McDonnell QC that the “source” of the Document was a Dr Siu. Apparently, in the probate action, Tony Chan had two teams of lawyers working for him, one headed by Mr McDonnell who worked behind the scene as it were and one headed by Mr Mill instructed by Haldanes, who conducted the probate action in court. 16. In the Court of Appeal, Kwan JA described the defendant in these words: “57. The defendant was the former assistant and girlfriend of Gilbert Leung. She had signed an agreement with Tony Chan in March 2009 in which Tony Chan agreed to pay her for the information she disclosed to him concerning Gilbert Leung and his activities. She provided Tony Chan’s lawyers with the papers of a previous trial in England in which she successfully sued Gilbert Leung regarding a property they bought there. She was also involved in some other issues in the probate trial and had provided various types of assistance to Mr McDonnell and Mr Mill. She issued bills to Haldanes for her services and was paid. The judge found that prior to the subject communication, she had ‘actively participated in the preparation of the Probate Trial as part of the legal team of Tony Chan.’” 17. The learned Recorder accepted Mr McDonnell’s evidence for the defence that “he had mentioned to Mr Mill in March 2009 that Dr Siu was ‘the source’ of the Document.”[21] According to Mr McDonnell’s witness statement which was adopted as his evidence-in-chief, he said:[22] “31. I gave Ian Mill QC copies of the Chinese document and the two Land Registry Searches which Gilbert Leung had made on 3 May 2007. I also gave him the programme for Dr Siu’s charity function and told him that Dr Siu was the ‘source’. I also explained to him the information which [the defendant] had given me about the background to the Statement and Statutory Declaration dated 15 May 2007 and what Dr Siu had told her about how they had come to be made and what [the defendant] had told me about Dr Siu. … 34. I sent those Search results to Ian Mill QC by e-mail on 23 April 2009 together with a copy of another questionable transaction between Gilbert Leung and Chinachem and the first installment of [the defendant]’s Notes on the Prison Letters and a Working Note of my own which set out the chronology of the land transactions and also noted the full name of Dr Siu. My email said I would talk him through the other Attachments when he was ready and I am sure that occurred. 35. Perhaps the most important detail about that email for present purposes is that it was copied to [the defendant] which will have confirmed to her that Ian Mill QC knew Dr Siu’s identity, as was intended.” 18. On the evidence, the learned Recorder found that during the telephone conversation on 21 May 2009, the question put by Mr Mill through Mr Midgley to the defendant was: “where had you got the Document from?” To this question, the defendant answered: “Edmund Tsang.”[23] The Recorder was of the view that by May, Mr Mill might have forgotten that Mr McDonnell had told him that the source was Dr Siu. In any event the Recorder said Mr Mill might have thought that Dr Siu was merely an intermediary source.[24] The Recorder held that the statement that Edmund Tsang had provided the Document was false and known to be false by the defendant. There is no appeal from this finding. The learned Recorder also said: “I also accept the evidence of Mr Midgley that Mr Mill also asked through him whether the name Edmund Tsang could be revealed to the court. I find that the defendant gave an affirmative answer to this question.”[25] 19. However, although the Recorder was of the view that the statement was false, and known to be false by the defendant, he concluded that it was not defamatory in its natural and ordinary meaning or in any of the pleaded innuendo meanings and he would dismiss the claim on this basis as well. The Court of Appeal[26] by a majority overturned the Recorder regarding one of the innuendo meanings[27] and this is an issue in this appeal.[28] 20. As for the alternative claim of malicious falsehood the learned Recorder found that the Q&A in its ordinary and natural meaning, namely, “the defendant obtained the Document from the plaintiff” was false and that the defendant knew that it was false. It is clear that the plaintiff’s claim on malicious falsehood as pleaded was bound up with his defamation claim. Paragraph 9 of the RASC pleaded “the words spoken by the Defendant, as set out in paragraph 8 above, were both false and published with expressed malice.” Paragraph 8 pleaded “the Defendant’s answer, ‘Edmund Tsang’, as set out in paragraph 7 above was false and defamatory of the Plaintiff.” (My emphasis). By re-amendment to para 8, defamation in the words’ natural and ordinary meaning was more fully pleaded. At para 10 “The words complained of were calculated to disparage the reputation of the Plaintiff in his business and were also calculated to cause pecuniary damage to the Plaintiff in respect of his business. The words suggested that he was not someone to be trusted in his business dealings and thereby made it less likely that people would be willing to enter into any kind of business dealings with him.” Absent the pleaded defamatory meanings, I don’t believe it was ever the plaintiff’s case that the false statement on its own could have such effect. 21. I think it was because the Recorder had rejected all the defamatory meanings that he found s 24[29] of the Defamation Ordinance (Cap 21) did not apply and said: “80 … that the simple Q&A in the aforesaid ordinary and natural meaning, though false, was not likely to cause pecuniary damage to the plaintiff in respect of his office, profession, calling, trade or business.” 22. Nevertheless, the learned Recorder went on to hold that in any event the plaintiff could not show special damage arising out of the publication of these false words because the loss flowing from the republications which were absolutely privileged were irrecoverable, agreeing with the Supreme Court of Virginia in Watt v McKelvie[30] where Compton J said: “The ultimate consideration here is one of policy. So the question becomes whether any new cause of action which may have arisen upon a third-party republication during a judicial hearing may be asserted against the non-participating original publisher or whether the immunity which attaches to the participants in the proceeding applies to such original publisher who may thus assert the privilege as an absolute defense when sued by the person allegedly defamed. We adopt the latter alternative …” 23. On appeal a majority of the Court of Appeal agreed with the learned Recorder and held that damages are not recoverable for loss flowing from such republications.[31] This is an issue in this appeal. The Court of Appeal 24. The Court of Appeal was unanimous that the communication by the defendant to Mr Mill/Mr Midgley was not protected by absolute privilege. 25. As for defamation, the Court of Appeal was unanimous that neither innuendo meaning (a) nor (b) was established. However, they disagreed on meaning (c). Kwan JA and Macrae J were of the view that meaning (c) was established. 26. Para 8A of the RASC reads: “… by way of innuendo to Mr Mill and Mr Midgley (and others to whom the statement complained of would spread), who have knowledge of the facts and matters particularized hereunder, the Defendant’s words bore and/or would be understood to bear the following meanings: PARTICULARS OF INNUENDO MEANINGS (a) the Plaintiff had betrayed a friend and a business associate, Gilbert Leung, by covertly giving Tony Chan or his legal team one of Gilbert Leung’s confidential business documents so that it could be used to discredit Gilbert Leung in a court of law; (b) the Plaintiff had secretly and covertly sought to assist Tony Chan and his unmeritorious challenge to Nina Kung’s will in order to try to get his hands on her fortune; and (c) that the Plaintiff had acted as set out above in order to obtain a personal advantage, possibly money from Tony Chan.” 27. The particulars of facts and matters in support of innuendo were pleaded in para 8A(1) - (5), and as Macrae JA said[32] the only extrinsic fact or matter relied on for innuendo (c) is para 8A(5) which reads : “(5) In the light of Tony Chan’s notoriety, the allegation that the Plaintiff was the person who had supplied Tony Chan or his team with the Document would have been readily understood as meaning that the Plaintiff was in association with Tony Chan and had sought secretly and covertly to assist Tony Chan and his unmeritorious challenge to Nina Kung’s will. Given the huge amounts of money that were at stake in the Probate Action, the ready inference to be drawn from the allegation was that the Plaintiff had acted in this way for some kind of personal advantage, very likely for money.” 28. Macrae JA said thus pleaded the meaning was not established because: “221. … I could think of other possible motives for the plaintiff or other person ‘assisting’ in Tony Chan’s claim for doing so. Personal advantage is but one of them, and not necessarily a likely one.” 29. However, Macrae JA said he would, although with reluctance, allow the plaintiff to rely on matters pleaded in para 7 of the RASC[33] in support of innuendo meaning (c). Kwan JA agreed.[34] This is the subject of the second certified question[35] and will be discussed below. 30. Yuen JA took a different view. She said Innuendo (c) was predicated upon Innuendo (a) and/or (b) having been established. It added an innuendo meaning but only if Innuendo Meaning (a) and/or (b) had been established.[36] Nor would she allow facts not pleaded, namely, that Mr Mill and Mr Midgley were aware that there were financial terms for the use of the Document, in support of an innuendo meaning to be used to establish the innuendo meaning because: “It is essential in a complex area of the law such as defamation where all parties and the tribunal have to be acutely aware of the exact case(s) being advanced and for which adjudication is sought.”[37] 31. As for malicious falsehood, Kwan JA said: “160. … the judge held that the subject communication was not likely to cause pecuniary damage to the plaintiff in his business owing to the limited defamatory meaning he found on the ordinary and natural meaning of the communication (that the defendant obtained the Document from the plaintiff and this was false). In the light of the defamatory meaning in §8A(c) I have found to be established, I am inclined to think that the communication would likely – in the sense of something less than more likely than not – have the tendency to put people off from doing business with the plaintiff and likely to lead to pecuniary damage to him. I would hold that section 24(1)(b) is satisfied and it is not necessary for the plaintiff to allege and prove special damage.” 32. She awarded general damages of $30,000 for defamation and malicious falsehood. Yuen JA did not deal with this separately. Macrae JA said at para 228 that in an action for malicious falsehood, there is no requirement for the statement to bear any defamatory meaning. With respect, that is correct. His Lordship then dealt with the question of special damage.[38] At para 242 he agreed with Kwan JA that general damages of $30,000 be awarded for slander and malicious falsehood. Of course as the judgment of Kwan JA at para 160 quoted above shows, the award of general damage depended on the defamatory innuendo meaning (c), which in turn depended on the knowledge of Mr Mill and Mr Midgley that there were financial terms for the Document’s use. 33. However, Kwan JA and Macrae JA held that damages flowing from the republications were not recoverable agreeing with the learned Recorder. Leave to appeal 34. On 22 December 2017, the Court of Appeal granted leave to appeal on the following questions because they raise points of law of great general or public importance: – “(1) Whether the common law defence of absolute privilege in the law of defamation and malicious falsehood in Hong Kong covers or extends to, or should cover or extend to, occasions where the communications are between a solicitor or a barrister for court proceedings on the one hand, and a person who may not be a witness or potential witness but provides relevant information for possible use in those proceedings on the other hand. (2) Whether, in a defamation or malicious falsehood matter, the plaintiff and the courts are entitled to use or rely on particulars of extrinsic facts never specifically pleaded in support of a specific innuendo meaning to support that innuendo meaning, on the sole ground that evidence on such extrinsic facts had in any case been received by the trial judge for a different reason or purpose.” 35. The Court of Appeal also granted leave to the plaintiff to appeal on the following question: “(3) Whether damages resulting from an absolutely privileged republication can be recoverable as damages for defamation and/or malicious falsehood flowing from an original non-privileged publication by a defendant where such republication should have been within the reasonable contemplation of the defendant?” 36. Accordingly, the Appeal Committee granted leave to appeal in respect of the first two questions on 4 January 2018 and this is the subject of FACV 2/2018. Leave was granted in respect of the third question on 5 January 2018 and this is the subject of FACV 3/2018. The Certified Questions Question 1 - Absolute Privilege: Whether the common law defence of absolute privilege in the law of defamation and malicious falsehood in Hong Kong covers or extends to, or should cover or extend to, occasions where the communications are between a solicitor or a barrister for court proceedings on the one hand, and a person who may not be a witness or potential witness but provides relevant information for possible use in those proceedings on the other hand. 37. I begin with the general statement in Gatley[39] that : “No action will lie for defamatory statements, whether oral or written, made in the course of judicial proceedings before a court of justice or a tribunal exercising functions equivalent to those of an established court of justice.”[40] 38. Mr James Price QC, for the plaintiff, rightly accepted that what Mr Mill said in court was said in the course of judicial proceedings and covered by judicial privilege. In Mann v O’Neill, Brennan CJ, Dawson, Toohey and Gaudron JJ put it forcefully when they said: “And absolute privilege attaches to statements made in the course of judicial proceedings because it is an indispensable attribute of the judicial process … Were civil liability to attach or be capable of attaching, it would impede inquiry as to the truth and justice of the matter and jeopardise the ‘safe administration of justice’.”[41] 39. The question here is whether the privilege also covered what the defendant told Mr Mill which was repeated, as intended, in court. 40. Mr Price submitted that the defendant was not entitled to judicial privilege because she was a mere informant and not a witness, actual or potential. He accepted that had the defendant been a witness and had said in court that the document was supplied by the plaintiff she would have been entitled to judicial privilege. He also accepted that the defendant would have been protected by judicial privilege had she been a potential witness because as Lord Hoffmann said: “the person in question must know at the time he speaks whether or not the immunity will attach. If it depends upon the contingencies of whether he will be called as a witness, the value of the immunity is destroyed.” [42] 41. The plaintiff’s case is that as there has not been a case where the privilege has been applied to a mere informant, there is no privilege. I do not believe the privilege should depend on the label given to the defendant. I accept of course “the general rule is that the extension of absolute privilege is ‘viewed with the most jealous suspicion, and resisted, unless its necessity is demonstrated’”[43] and “… the test is a strict one; necessity must be shown, but the decision on whether immunity is necessary for the administration of justice must have regard to the cases in which immunity has been held necessary in the past, so as to form part of a coherent principle.”[44] With respect, I agree with Lord Hoffmann that the rationale for judicial privilege (or immunity from suit as Lord Hoffmann also called it)[45] is the proper administration of justice, and it is “designed to encourage freedom of speech and communication in judicial proceedings by relieving persons who take part in the judicial process from the fear of being sued for something they say.”[46] (My emphasis) Taylor was concerned with absolute privilege arising from criminal investigations but these are general observations. 42. The privilege has a long lineage. Sankey J said in a Copartnership Farms v Harvey-Smith [1918] 2 KB 405: “The law was originally laid down as far back as the year 1772 by Lord Mansfield in the case of Rex v Skinner (1772) Lofft, 55...” [47] 43. The development of the privilege is illuminating. In Munster v Lamb,[48] L, a solicitor acting as advocate, was sued by M for defamatory words spoken in the course of proceedings before a court of petty sessions. The court proceeded on the assumption that the words were spoken without any justification or excuse and from personal ill will or anger and were irrelevant to the proceedings before the court. Brett MR said: “I cannot find that there has been a decision of a court of law with reference to such facts as are now before us, that is, with regard to a person acting in the capacity of counsel: but there have been decisions upon analogous facts [namely, judges, parties, and witnesses]; and if we can find out what principle was applied in these decisions upon the analogous facts, we must consider how far it governs the case before us.”[49] 44. The Master of the Rolls went on to say: “If upon the grounds of public policy and free administration of the law the privilege be extended to judges and witnesses, although they speak maliciously and without reasonable or probable cause, is it not for the benefit of the administration of the law that counsel also should have an entirely free mind? Of the three classes—judge, witness, and counsel—it seems to me that a counsel has a special need to have his mind clear from all anxiety.”[50] 45. That is because: “… a judge, in dealing with the matter before him, a party in preferring or resisting a legal proceeding, and a witness in giving evidence, oral or written, in a court of justice, shall do so with his mind uninfluenced by the fear of an action for defamation or a prosecution for libel.”[51] 46. In Lincoln v Daniels,[52] Devlin LJ said at p. 256 : “The rule of absolute privilege, as has so often been pointed out, has not been devised so as to protect malicious persons but to ensure that judges and others engaged in the administration of justice should be free from the fear of proceedings and ‘the vexation of defending actions,’ as Fry L.J. put it in Munster v Lamb.” (My emphasis) 47. Lincoln v Daniels was concerned with communications sent by the defendant to the Secretary of the Bar Council alleging professional misconduct by the plaintiff. The defendant contended that they constituted a step in an inquiry before the Benchers of the plaintiff’s Inn of Court and were, accordingly, entitled to the protection of absolute privilege which should attach to such proceedings. The Court of Appeal held that the communications sent to the Bar Council were not a step in an inquiry before an Inn of Court – the Bar Council were in no sense the agent of the Benchers nor derived their authority from them or from the same source as they did – and the documents were not, therefore, within the scope of absolute privilege accorded to such an inquiry. The plea of absolute privilege therefore failed. 48. At pp. 257-258, Delvin LJ considered the scope of judicial privilege and said: “… The absolute privilege which covers proceedings in or before a court of justice can be divided into three categories. The first category covers all matters that are done coram judice. This extends to everything that is said in the course of proceedings by judges, parties, counsel and witnesses, and includes the contents of documents put in as evidence. The second covers everything that is done from the inception of the proceedings onwards and extends to all pleadings and other documents brought into existence for the purpose of the proceedings and starting with the writ or other document which institutes the proceedings. The third category is the most difficult of the three to define. It is based on the authority of Watson v M’Ewan,[53] in which the House of Lords held that the privilege attaching to evidence which a witness gave coram judice extended to the precognition or proof of that evidence taken by a solicitor. It is immaterial whether the proof is or is not taken in the course of proceedings. In Beresford v White,[54] the privilege was held to attach to what was said in the course of an interview by a solicitor with a person who might or might not be in a position to be a witness on behalf of his client in contemplated proceedings.” 49. In Watson v M’Ewan, the plaintiff sued the defendant not in respect of his evidence in court but for statements made to the client and solicitor in preparing the proof for trial and the question was whether such statements were similarly protected by judicial privilege. 50. Devlin LJ commented on Watson v M’Ewan in these words at p. 260: “I turn now to the third category. It is obvious that unless there were a category of this sort the absolute privilege granted for matters said and done coram judice might be rendered illusory. This is the consideration that animates the reasoning of Lord Halsbury L.C. in Watson v. M’Ewan. Could a plaintiff, he asked, say: ‘“I do not bring the action against you for what you said in the witness box, but I bring the action against you for what you told the solicitor you were about to say in the witness box”? If that could be done’ the Lord Chancellor goes on, ‘the object for which the privilege exists is gone, because then no witness could be called; no one would know whether what he was going to say was relevant to the question in debate between the parties. A witness would only have to say: “I shall not tell you anything; I may have an action brought against me tomorrow if I do; therefore I shall not give you any information at all.” It is very obvious that the public policy which renders the protection of witnesses necessary for the administration of justice must as a necessary consequence involve that which is a step towards and is part of the administration of justice - namely, the preliminary examination of witnesses to find out what they can prove.’” (My emphasis) 51. Importantly for present purposes, Devlin LJ went on to say: “I do not treat this principle as necessarily limited to the proofs of witnesses. I think it might well cover, for example, instructions given by a party to his solicitor, going beyond matters to which the party could himself depose, for the preparation of a statement of claim or like document. … A plaintiff in a libel action could not be allowed to say, ‘I do not bring the action against you for what was said in the statement of claim but for what you instructed your solicitor and counsel to put into the statement of claim.’” “It is a question of how far the principle in Watson v M’Ewan is to be taken. The other authorities in which the case has been considered show that the connection between the two things – the evidence and the precognition, the document and the draft, the actuality that is undeniably privileged and the foreshadowing of it – must be reasonably close.”[55] 52. That is because although: “[i]t is not at all easy to determine the scope and extent of the principle in Watson v. M’Ewan. I have come to the conclusion that the privilege that covers proceedings in a court of justice ought not to be extended to matters outside those proceedings except where it is strictly necessary to do so in order to protect those who are to participate in the proceedings from a flank attack. It is true that it is not absolutely necessary for a witness to give a proof, but it is practically necessary for him to do so, as it is practically necessary for a litigant to engage a solicitor. The sense of Lord Halsbury’s speech is that the extension of the privilege to proofs and precognition is practically necessary for the administration of justice; without it, in his view, no witness could be called.”[56] (My emphasis). 53. It is now well established that potential witnesses are also covered by judicial privilege[57] and hence immune from attack, though it might not be right to describe such attack as a flank attack. In other words, their immunity would not depend on their having given evidence in court and Lincoln v Daniels should be understood accordingly. Indeed, in the joint judgment of Brennan CJ, Dawson, Toohey and Gaudron JJ in Mann v O’Neill,[58] they said: “It is well settled that absolute privilege attaches to all statements made in the course of judicial proceedings, whether made by parties, witnesses, legal representatives, members of the jury or by the judge. It extends to oral statements and to statements in originating process, in pleadings or in other documents produced in evidence or filed in the proceedings. It is said that it extends to any document published on an ‘occasion properly incidental [to judicial proceedings], and necessary for [them]’.” 54. Where should the line be drawn? Should witnesses and potential witnesses be covered and mere informants, whatever that may mean, be excluded? I believe the privilege should cover persons who in Lord Hoffmann’s words “take part in the judicial process”, which as Devlin LJ said “must as a necessary consequence involve that which is a step towards and is part of the administration of justice,”[59]that is because persons “engaged in the administration of justice should be free from fear of proceedings and ‘the vexation of defending actions.’”[60] 55. Here, the defendant provided the Document for use in the cross-examination of Gilbert Leung. As the Recorder noted the Document had already been supplied to the legal team of Tony Chan and “The supply of the Document was not the occasion/publication in issue … The subject occasion/publication related solely to Mr Mill’s request for instructions/information on the provenance of the Document shortly prior to his intended use of the Document in open court in the cross-examination of Gilbert Leung. The special factual context under which absolute privilege is argued in this issue should be firmly borne in mind”. The Recorder went on to say: “29. … I do not find it necessary or relevant to distinguish between the positions of a witness, a potential witness and a ‘mere informer’. I do not find such distinction elucidative or determinative. My analysis of public policy does not proceed by way of extending the absolute privilege on witnesses’ evidence to the situation of a mere informer or provider of information. My analysis is grounded upon on the close proximity between the subject occasion/publication and Mr Mill’s actual utterance in open court in the course of making use of the Document.” 56. With respect, that is also my approach. It has not been suggested that the Document should not have been used in the cross-examination of Gilbert Leung. Nor that Lam J should not have enquired into its provenance. Nor that Mr Mill should have refused to inform Lam J. To my mind, it is clear beyond argument, that “the simple Q&A” as the learned Recorder called it was properly part of the judicial process, and what the defendant said to Mr Mill/Mr Midgley was so closely a part of the judicial process that the defendant should enjoy the same absolute privilege. In other words, the conversation between the defendant and Mr Mill/Mr Midgley was an “occasion properly incidental [to judicial proceedings] and necessary for [them].”[61] 57. Mr Price submitted that because the Document went to credit only, the defendant could not have been called as a witness. I question that. However, as the learned Recorder explained the subject occasion/publication related solely to the provenance of the Document. The learned Recorder was of the view that the Document was admissible in evidence.[62] He said “Mr Mill was in my view perfectly entitled to adduce the Document irrespective of Gilbert Leung’s answers.” Also, it appears that it had been referred to in the judgment in the probate action.[63] If the Document was admissible in evidence, a witness (in the case, the defendant) could have been called to produce it and give evidence on its provenance. Mr Mill of course could not give evidence. But I do not think privilege should turn on such a contingency just as in Lord Hoffmann’s view it should not turn on whether the witness was actually called. It cannot depend on whether the evidence was admissible or admitted. Mr Price also suggested that the defendant was not prepared to be a witness but clearly there was no evidence (nor finding) to such effect and it is not necessary for me to decide whether that might make any difference. 58. Nor do I think the defendant was a “mere informant”. The Recorder made no finding. The evidence according to the Recorder[64] was that about a week before Gilbert Leung gave evidence “… I was interviewed by Tony Chan’s Junior Counsel, Miss Frances Lok Man-yin … , presumably for purpose of preparing the statement I was supposed to provide”. On this basis, she would have been a potential witness. There is no reason to think that had she been asked about the provenance of the document, she would not have provided the information. 59. Be that as it may, I believe whether a person could be said to have taken part in judicial process or participated in the proceedings or whether that person’s impugned conduct “involve[s] that which is a step towards and is part of the administration of justice”[65] may be tested by considering the connection between the actuality (the disclosure in court) which is privileged and the foreshadowing of it (the information). Here, it is difficult to imagine a closer connection. The information was supplied for disclosure in court upon the production of the Document. The production of the Document and the disclosure of its provenance were part and parcel of the proceedings and absolute privilege in these circumstances came squarely within the “underlying rationale for the defence”.[66] It requires no more extension of the law than say the extension to cover advocates in Lincoln v Daniels. Anyway, if extension is required the necessity is obvious. 60. At para 97, Kwan JA said “[w]here there is no previous authority which directly deals with a situation like the present,” she would turn to what Lord Woolf MR said in S v Newham London Borough Council [1998] EMLR 583 at 591. With respect, the better approach is to have regard to the “underlying rationale for the defence”.[67] 61. On such considerations, in my view, the case for immunity is clear. Below, I will deal with the question whether damages could be recovered from the defendant in respect of the republications. I am of the view that they are not. But the same reasons which led me to that conclusion also support my view that the publication to Mr Mill/Mr Midgley should enjoy absolute privilege.[68] 62. Mr Price pointed to the fact that in many of the authorities, the point was made that the immunity would not for example protect a lying witness from prosecution for perjury, nor a misbehaving advocate or judge from all consequences. He said that a potential witness who signed witness statements did so on the basis that they may be liable for contempt of court if the statement contains false evidence.[69] I do not believe the availability of judicial privilege depends on the availability of these deterrents. In any event, a person who supplied false information to the court may not be better placed than a potential witness who had signed a statement containing false evidence. 63. Since in my view absolute privilege in the circumstances of this case comes within the underlying rationale of the rule and is necessary, the fact that incidentally, it deprives the plaintiff of his otherwise valid claim makes no difference. As the learned Recorder correctly pointed out at para 31 of his judgment, absolute privilege was extended so far “to encourage honest and well-meaning persons to assist justice even if dishonest and malicious persons may on occasion benefit from the immunity”.[70] 64. Here, the defendant has been found a liar and one could not sympathise with her. But, suppose, her defence to the claim had been justification, namely, that the Document had indeed been supplied by the plaintiff and after trial she was believed and the plaintiff not! I daresay it would then be much easier to appreciate that a person in her position should not be exposed to potentially ruinous litigation.[71] As Yuen JA said: “22.3 … the subject statement was made for the purpose of introducing a document which on its face revealed to the court the possibility that an important witness had knowingly given false evidence.” 65. The Court of Appeal denied the defendant judicial privilege not because she had told a lie or because of the possibly mercenary motive[72] which motivated the provision of the evidence. So I believe one should approach this matter by asking whether judicial privilege should be available to a person who was prompted by a sense of public duty to expose a lying witness. I think the answer is clear. With respect to Lord Woolf MR,[73] I do not believe either qualified privilege or the possibility of summary dismissal of the action (which is highly unlikely in Hong Kong) would free such person “from the fear of proceedings” and “the vexation of defending actions”. 66. I mentioned earlier the defendant’s identity was obtained as a result of a Norwich Pharmacal application against Tony Chan. If judicial privilege should be limited as Mr Price submitted, in a case where a witness’s evidence (or in this case, counsel’s statement) could be said to contain information derived otherwise from the witness’s personal knowledge, a person complaining that he or she had been defamed by such information might also be able to obtain a Norwich Pharmacal order in order to uncover the identity of the ‘source’. The mere possibility can be a powerful deterrence on that person to volunteer information for judicial proceedings. 67. Returning to the first question, my answer is yes, if the person could be said to be taking part in the judicial process which includes “that which is a step towards and is part of the administration of justice”. Whether that is so is a question of fact which will depend on the facts of the individual case. Question 2: Whether, in a defamation or malicious falsehood matter, the plaintiff and the courts are entitled to use or rely on particulars of extrinsic facts never specifically pleaded in support of a specific innuendo meaning to support that innuendo meaning, on the sole ground that evidence on such extrinsic facts had in any case been received by the trial judge for a different reason or purpose. 68. With respect, I agree with the Recorder and Yuen JA. As a matter of pleading, innuendo (c) does not stand alone but depends on innuendo (a) and /or (b). Since innuendoes (a) and (b) fail, innuendo (c) must also fail. 69. Mr Kenneth Lam appearing for the defendant submitted that the trial was conducted on the basis of the pleaded particulars and witnesses were called (or not called) and dealt with on that basis. This is certainly not a case for allowing an unpleaded case to be made. Question 3: Whether damages resulting from an absolutely privileged republication can be recoverable as damages for defamation and/or malicious falsehood flowing from an original non-privileged publication by a defendant where such republication should have been within the reasonable contemplation of the defendant? 70. Some observations are necessary to put this question in its proper context. 71. First, the question is academic if I am right on judicial privilege but there I am in the minority. So I must proceed on the basis that the initial publication was not absolutely privileged. 72. The plaintiff’s case on malicious falsehood is bound up with his claim on defamation. I will not repeat what I have said in para 31 above. Kwan JA took the view that the plaintiff had satisfied s 24 of the Defamation Ordinance and therefore is entitled to general damages because of innuendo meaning (c).[74] This is no longer supportable having regard to my view on innuendo (c). 73. However, the question of special damage remains, but only on the basis that the statement that the plaintiff had supplied the Document was false although it did not carry any defamatory meaning. It is clear and Mr Price accepted that the plaintiff had never contended that the special damages claimed could flow from such simple falsehood. He faintly suggested that we should remit this matter to the Recorder. I would not do so. That being the case, the claim for such special damages for the malicious falsehood must also fail and Question 3 can have no practical consequence to the plaintiff’s appeal. 74. In these circumstances, I will deal with question 3 very briefly. 75. On the third question, respectfully, I agree with the Recorder[75] and the majority in the Court of Appeal.[76] In the Court of Appeal Macrae JA referred to the judgments of Muir J in Belbin v McLean (2004) QCA 181 in the Queensland Court of Appeal, and of Compton J in the Supreme Court of Virginia in Watt v McKelvie. Macrae JA said the question raises a matter of policy and Compton J said “The ultimate consideration here is one of policy”. I respectfully agree. But it seems to me there are two aspects to this policy. The first is that, for example, a witness should not be inhibited in his/her evidence because he/she thought his/her evidence might precipitate an action against a non-witness. The other aspect is that people should not be inhibited from volunteering information. 76. Compton J was concerned with the first aspect when he said the court was not persuaded: “that policy considerations should limit the privilege only to the actual participants in the proceeding. The participant often may be motivated by a desire to shield a non-participant. Manifestly, a person testifying in a judicial proceeding who believes that his statements would precipitate an action for defamation against a non-participant such as a family member, business associate, relative or friend, would tend to be less candid and forthright in his disclosures during interrogation and thus inhibit full and free investigation of the facts.” 77. Watt v McKelvie was concerned with deposition of witnesses which repeated defamatory statements made by the defendant and the question was whether the absolute privilege enjoyed by the witnesses in respect of their depositions should extend to the defendant. At first instance as well as on appeal an affirmative answer was given. 78. On the other hand I think Muir J had the other aspect in mind. Belbin was concerned with the defamatory statements made by two employees (defendants) in a formal complaint about a fellow employee to a director of the Bureau of Emergency Services, which the director was under statutory duty to pass on to the criminal justice commission. The director’s republication to the criminal justice commission was protected by s 101(2) of the Criminal Justice Act 1989 which provided that: “In proceedings for defamation there is a defence of absolute privilege in respect of a publication to or by the commission or an officer of the commission made for the purpose of the discharge of the functions and responsibilities of the commission or of any of the functions of an organisational unit of the commission.” 79. The republication was not relied on as giving rise to a separate course of action and the question was whether it could be relied on as a matter going only to the damages suffered as a result of the original publication. The actual decision turned on the interpretation of s 101 (2). The Court of Appeal of Queensland held that the privilege extended to the original publisher of the defamation. However what Muir J said regarding the rationale behind the statutory defence shows he had the second aspect in mind when his Honour said: “26. There is also good reason to suppose that the Legislature would have intended the defence provided by section 101(2) to apply to a person providing evidence relevant to the functions of the CJC where that person's evidentiary statement was placed before the CJC for its purposes through an intermediary. Were that not the case, informants would be placed at risk, deterred from volunteering information and the CJC's ability to perform its functions affected adversely.” (My emphasis) 80. In neither of these cases was there any discussion whether the initial publication should be protected by absolute privilege. Naturally I say nothing about that. These authorities were rightly relied on below to support the conclusion that the damages flowing from the republication were not recoverable. In the present case, given the close connection between the communication to Mr Mill/Mr Midgley and the disclosure in court, I believe both aspects of the policy reasons which were found in Watt and Belbin should not merely make damages irrecoverable, they support my view that the initial publication is also absolutely privileged and accordingly no question of damages could arise. 81. My answer to this question is no. Disposition 82. I would allow the defendant’s appeal[77] and dismiss the plaintiff’s appeal.[78] I would also make a costs order nisi in favour of the defendant here and in the Court of Appeal, and to restore the costs order made by the Recorder. The order nisi will become absolute unless there is an application to vary the order within 14 days of today. Mr Justice Fok PJ: 83. The three questions of law for which leave to appeal was granted by the Court of Appeal (set out in the judgment of Mr Justice Tang PJ in paragraphs [34] and [35] above) reflect three distinct issues in this case on which the Recorder and Court of Appeal gave diverse answers and, on two of those issues, the Court of Appeal was itself divided. But for the fact that there is disagreement in this Court on one of the issues, I would have simply expressed my agreement with the judgment of Lord Walker of Gestingthorpe NPJ. However, since Mr Justice Tang has reached a different conclusion on that issue, I add this judgment to explain briefly my reasons for agreeing with Lord Walker’s judgment. 84. The first certified question of law for decision concerns the common law defence of absolute privilege in the law of defamation and malicious falsehood. It raises the question of whether the boundaries of that defence should be extended. Specifically, whilst it was common ground before us that the immunity from suit that the defence provides attaches to statements made in the course of judicial proceedings by the judge, jury, legal representatives, parties or witnesses, it raises the question of whether, as the defendant contends, the immunity from suit should also cover someone who provides information to a barrister or solicitor for use or possible use in those proceedings and is not a witness or potential witness. 85. The Recorder thought that those boundaries should be extended, as can be seen in his judgment at [32] where he said: “In my view, it is a matter of necessity that absolute privilege should be extended to the communication (pertaining to the contents, purport and provenance of that document) between the provider of such document and the advocate/lawyer who was contemplating the use of that document in the cross-examination of a witness.” 86. Lord Walker has concluded, by reference to the finding of fact in the courts below that the defendant was merely a middleman for an informer, that extending the defence of absolute privilege to the defendant’s conversation with Mr Midgley and Mr Mill QC in this case would constitute a large extension to the defence and would leave the boundaries of the extension unclear (see his paragraph [121]). 87. On the other hand, Mr Justice Tang differs from Lord Walker on this issue in two different respects. First, he concludes that the defendant would have been a potential witness (see his paragraph [58]). On that basis, it is possible to regard Mr Justice Tang’s disagreement as being on the facts rather than the ambit of the defence as a matter of law since, as a potential witness, the defendant would fall within the third category of cases identified by Devlin LJ in Lincoln v Daniels [1962] 1 QB 237.[79] So read, his decision does not require an extension of the law so presently stated (see his paragraph [59], up to the last sentence). 88. Secondly, however, Mr Justice Tang proceeds to express the view that, in any event, there should be an extension of the law stated in Lincoln v Daniels (see the last sentence of his paragraph [59] and his paragraphs [60] et seq.). He therefore takes a different view on the first certified question as a matter of law and would answer it in the affirmative “if the person could be said to be taking part in the judicial process which includes ‘that which is a step towards and is part of the administration of justice’” (see his paragraph [67]). 89. With respect, I am unable to agree with Mr Justice Tang on either of the bases on which he concludes that the defendant’s original publication complained of should be protected by absolute privilege. 90. First, as regards the facts and whether the defendant was a potential witness, it is important to note that this was not her pleaded case, which was that she was a middleman for an informant (see the judgment of Kwan JA in the Court of Appeal at [109]). Nor was this the finding of the Recorder (see his judgment at [29]), where the Recorder made it clear he was not distinguishing between a witness, potential witness or mere informer. In the Court of Appeal, as Lord Walker points out, the finding was clearly that the defendant was not a potential witness but merely “a middleman between the legal team and an informant” (see per Kwan JA at [112]). Finally, it was not, as I understood it, part of the defendant’s case in this Court that she was a potential witness rather than a mere informant (see, in particular, the printed Case of the Defendant (Appellant) at [27(5)]). I do not, therefore, think that it would be right for this Court to conclude that the defendant was entitled to absolute privilege on the basis of her being a potential witness and therefore without extending the boundaries of the defence of absolute privilege. 91. That brings me, secondly, to the main question in this appeal, as to whether the defence of absolute privilege should be extended to cover the defendant in this case. As I have indicated, I agree with Lord Walker that it should not. I do not, with respect, agree with Mr Justice Tang that the principle laid down by Devlin LJ in Lincoln v Daniels is that a person is entitled to the immunity of absolute privilege where the person is “taking part in the judicial process” and that such taking part can be constituted merely by doing “that which is a step towards and is part of the administration of justice”. 92. The passage in Lincoln v Daniels in which Devlin LJ described the parameters of the decision in Watson v M’Ewan, from which decision Devlin LJ’s third category of cases of absolute privilege derived, is important. In his judgment, at p.263 of the report, Devlin LJ said this: “It is not at all easy to determine the scope and extent of the principle in Watson v. M’Ewan. I have come to the conclusion that the privilege that covers proceedings in a court of justice ought not to be extended to matters outside those proceedings except where it is strictly necessary to do so in order to protect those who are to participate in the proceedings from a flank attack. It is true that it is not absolutely necessary for a witness to give a proof, but it is practically necessary for him to do so, as it is practically necessary for a litigant to engage a solicitor. The sense of Lord Halsbury's speech is that the extension of the privilege to proofs and precognition is practically necessary for the administration of justice; without it, in his view, no witness could be called. I do not think that the same degree of necessity can be said to attach to the functions of the Bar Council in relation to the Inns of Court. It is a convenience to the public to have a central body to deal with, but that is as high as it can be put. In my judgment the defence of absolute privilege fails.” 93. Two points should be noted from that passage. First, it explains his Lordship’s reasoning for why the Bar Council’s functions in relation to the Inns of Court were not such as to bring it within the ambit of the immunity conferred by the privilege. Secondly, and consistent with that, the entire thrust of the Watson v M’Ewan principle was that its extension to matters outside “proceedings in a court of justice” should be limited only to cases where it was “necessary to do so in order to protect those who are to participate in the proceedings from a flank attack” and that such persons who were to participate in those proceedings were limited to witnesses or potential witnesses. 94. It is in this context that the passage from p.260 of Devlin LJ’s judgment in Lincoln v Daniels, where he quotes from Lord Halsbury LC in Watson v M’Ewan, is to be read. There, he quotes this from Lord Halsbury’s speech: “It is very obvious that the public policy which renders the protection of witnesses necessary for the administration of justice must as a necessary consequence involve that which is a step towards and is part of the administration of justice – namely, the preliminary examination of witnesses to find out what they can prove.” 95. This passage is relied on by Mr Justice Tang (see his paragraphs [50] and [59]) as the basis for the principle on which he justifies the extension of the defence of absolute privilege. However, as will be apparent, where Lord Halsbury refers to “that which is a step towards and is part of the administration of justice”, he qualifies this by the specific reference “namely, the preliminary examination of witnesses to find out what they can prove”. This is on its face, therefore, a limited principle and, moreover, is restricted to witnesses or those who may be witnesses. I do not, with respect, consider that this can be relied upon as indicating that the boundaries of the defence were intended to be extended beyond potential witnesses and no case has been cited to us in which the defence has been so extended in relation to actions for defamation or malicious falsehood in respect of statements in or in connection with judicial proceedings. 96. Like Lord Walker, with whose judgment I respectfully agree, I consider that a conclusion in favour of the defendant on this issue would be an extension of the law that would amount to a large extension of the boundaries of the defence and would leave those boundaries unclear. This, in my view, would be undesirable. In my view, the exercise conducted by Kwan JA in the Court of Appeal (in paragraphs [120] to [124] of her judgment), by reference to the questions posed by Lord Woolf MR in S v Newham London Borough Council [1998] EMLR 583 at p.591, supports that conclusion. Instead, the availability of the defence of qualified privilege, which the plaintiff accepted would apply (if there was no absolute privilege) to a person in the position of the defendant in this case, would, in my judgment, provide an adequate measure of protection and strike a proper balance of the competing interests of the proper administration of justice, on the one hand, and the protection against unlawful attacks on reputation and the right of access to the courts, on the other. 97. Further, as the learned editors of the current (12th) edition of Gatley on Libel and Slander point out (at [13.5]), this immunity may be compared with other immunities in the administration of justice,[80] based on the same public policy justifications as those on which the absolute privilege for statements made in judicial proceedings rests, and so the rationale for their abolition[81] may mean that “the public policy arguments that once justified absolute privilege may no longer do so”. It is unnecessary to decide if that statement should be followed but it certainly provides a compelling reason, in my judgment, for not further extending the defence of absolute privilege. 98. Finally, I would add this further observation. The facts of this particular case were highly unusual. In view of the conclusions on the issues arising in respect of the second and third questions, the result of this appeal is that the plaintiff’s claim against the defendant fails in any event. These circumstances provide further reasons why, in my view, a bold extension of the boundaries of the defence of absolute privilege is neither necessary nor desirable. 99. On the second and third certified questions of law, it suffices for me to say that I agree with the judgment of Lord Walker. Mr Justice Stock NPJ: 100. I agree with the judgment of Lord Walker of Gestingthorpe NPJ and with the concurring judgment of Mr Justice Fok PJ. Lord Walker of Gestingthorpe NPJ: The facts 101. This is satellite litigation - but satellite litigation on a fairly grand scale - arising out of the probate action concerning the will of the late Nina Wang. The probate action attracted great publicity in Hong Kong and elsewhere, and a short summary of the background facts is sufficient. Nina Wang and her husband built up a large fortune in their Chinachem group of companies. After his kidnapping and presumed death his widow inherited his share of the fortune (although only after a hotly-contested probate action against her father-in-law). She died in 2007 and the hearing of the probate action relating to her estate began in May 2009. In the action Tony Chan Chun Cheun (“Tony Chan”) sought to prove a later will in his favour. He claimed Nina Wang had made this new will in 2006, displacing the primarily charitable trusts in a will made in 2002. In the probate action Tony Chan's claim was dismissed, and he was subsequently tried, convicted and imprisoned for forgery. 102. In the probate action Tony Chan was represented by Haldanes, the responsible partner being Mr Jonathan Midgley. English leading counsel, Mr Ian Mill QC, was instructed, with Ms Frances Lok as his junior. Another English silk, Mr John McDonnell QC, was also instructed on behalf of Tony Chan. Esther Chan Pui Kwan, the Defendant in the satellite litigation, was also associated with Tony Chan's legal team. Her precise position and function were in some doubt, and the trial judge, Mr Recorder Pow SC, addressed the issue in paragraph 18 of his careful judgment. The Recorder concluded (paragraph 18(2)) that “I am satisfied on the evidence that prior to the subject communication on 21 May 2009, the defendant had actively participated in the preparation of the Probate Trial as part of the legal team of Tony Chan.” 103. There has been no attack on the Recorder’s findings of fact, but his conclusion about the Defendant having been “a part of the legal team of Tony Chan” involves giving a very wide meaning to the vague expression “legal team”. The Defendant does not appear to have any legal training or experience, apart from having been a party to civil proceedings in England. She once was a friend of Mr Gilbert Leung Kam Ho (“Gilbert Leung”) with whom she cohabited for three years (Re-re-amended Defence, para 3 a to d) and she has acted “as middleman” between Doctor Sidney Siu Yim Kwan (“Dr Siu”), another friend of hers, and Tony Chan’s legal team (Re-re-amended Defence, para 3 h and i). Had she been part of his legal team in any real sense, the conflict of interest would have been obvious and serious. 104. The “subject communication” referred to by the Recorder is at the heart of the satellite litigation, in which the Plaintiff Tsang (or Chang) Wa Shan claims damages against the Defendant for slander and malicious falsehood. The communication was oral, addressed to Mr Midgley and Mr Mill by telephone on the morning of 21 May 2009, shortly before the start of the ninth day of the probate trial. Paragraph 8A of the Re-amended Statement of Claim makes clear that this is the publication sued on, though its spread by republication is relied on in support of the claim for damages. 105. At that stage of the trial Gilbert Leung was in the middle of giving evidence for the proponents of Nina Wang's earlier will. Mr Mill planned to attack his credit by suggesting that he was not an impartial witness. In particular, it was suggested that he had received a large financial benefit from the Chinachem Charitable Foundation Limited in the form of a sale of some land at Tai Po which had unrealised development potential. This charitable trust had been established by Nina Wang and her husband during their lives, financed by regular gifts from the Chinachem group of trading companies, but under her 2002 will it was to be a major beneficiary in her estate. 106. In his evidence Gilbert Leung denied that the land was worth about $10m, and said that he had not tried to estimate its value. It was therefore significant whether Gilbert Leung had formulated plans for the development of this land. The Defendant, with all her past knowledge of Gilbert Leung, seems to have undertaken the task of finding out whether there were plans for the development of the Tai Po land. Dr Siu came to play an increasingly important role in these inquiries. Much of the detail is uncertain, partly because, after a careful examination of the evidence given to him, the Judge rejected much of the Defendant’s evidence, preferring that of Mr Midgley where it differed. 107. Although the crucial telephone conversation with Mr Midgley and Mr Mill did not occur until the ninth day of the trial (21 May 2009) the search for material about the development of the Tai Po land seems to have started, so far as Mr Midgley was concerned, not later than early in March 2009, when the Defendant came to see him and told him of her past knowledge of Gilbert Leung. She also told him, according to her main witness statement in this action, that Dr Siu (for whom she was, as the Judge found, acting as an intermediary) did not want his details, or details about the Tai Po land, to be disclosed until Tony Chan had agreed how much he was willing to pay for the information. The Defendant reported this to Tony Chan, who said that he was prepared to pay in principle, but wanted the value of Dr Siu's evidence to be assessed by his own legal team. There was a meeting on 9 March 2009 at Mr Midgley’s office attended by Mr Midgley, Tony Chan and the Defendant. It was decided that she would go to London to recover files relating to the English litigation, and that the English silks would evaluate the evidence. Dr Siu was willing for his identity, and the supporting documents, to be disclosed to the English silks, but to no others. The Defendant was in London between 24 and 28 March 2009 sorting papers and preparing notes for Mr Midgley and Mr McDonnell, whom she saw in London. She also gave them copies of the documents produced by Dr Siu. During April there seems to have been little or no progress in negotiations with Dr Siu, who was, the Defendant stated, becoming aggrieved and frustrated. 108. Finally, towards the end of the week before Gilbert Leung was to give evidence, the Defendant was asked to invite Dr Siu to meet Tony Chan at Mr Midgley’s office. The meeting took place on the afternoon and early evening of Sunday, 17 May 2009. Apart from these four persons, Ms Lok was also present and took notes. Dr Siu gave his name-card to Tony Chan and Mr Midgley at the outset. There was a lengthy and inconclusive discussion, mainly in Cantonese, a language which (according to the Defendant) Mr Midgley does not speak or understand. It appears that no accommodation between Dr Siu and Tony Chan was reached at this meeting, but such an accommodation does seem to have been concluded later, when Gilbert Leung had begun his evidence. 109. I have gone through these matters of fact in some detail because the sequence of events is surprising, to say the least. It gets even more surprising because the Defendant's evidence, which was not accepted, was that in the course of her crucial telephone conversation, just before the cross-examination of Gilbert Leung was resumed, she gave the right answer to what she believed to be the wrong question. Her evidence (which the Recorder rejected) was that she understood that Mr Midgley already knew (at latest from the meeting on the previous Sunday) that Dr Siu was the source of the copies of the documents relating to the Tai Po land, and that she was being asked for whom the original documents were prepared. In the event the following exchanges took place in court when the proceedings started an hour late (to enable Ms Lok to prepare a translation of the documents): His Lordship: It depends on how the questions are put. Perhaps, Mr Mill, you can tell us the provenance of these Chinese documents before I decide whether… Mr Mill: Yes, I can, my Lord. The individual who provided it to us is a Mr Edmund Tsang. He says that he was given that by Mr Gilbert Leung. His Lordship: Yes, who is this Edmund Tsang and on what occasion was he given the document? Mr Mill: My Lord, as I understand it, Mr Leung was trying to interest Mr Tsang in the investment, but that's the extent of my understanding, my Lord. 110. So Lam J and anyone else in court (including the press) may have thought that the Plaintiff was both the person by whom the documents were produced,and the person for whom they were originally intended. This distinction is crucial to the Plaintiff’s claim: it is one thing to be the recipient of an unsolicited business offer, but quite another thing to be willing to disclose it, for a high fee, in an attempt to denigrate an established businessman in a highly speculative cause. 111. The Defendant was not herself present in court during these exchanges. She was in mainland China, from where she conducted the crucial phone call to Mr Midgley (who took the call) and Mr Mill (who heard it clearly on loudspeaker). In the event, in his monumental 935–paragraph judgment given on 2 February 2010, Lam J held (paragraph 90) that Tony Chan did not have solid grounds for suggesting that an advantage was given to Gilbert Leung. The certified questions 112. These unusual facts give rise to some difficult issues of law, which are to some extent intertwined. Three questions have been certified by the Court of Appeal as being of great general or public importance, the first two on the application of the Defendant and the third on the application of the Plaintiff. The questions are these: “(1) Whether the common law defence of absolute privilege in the law of defamation and malicious falsehood in Hong Kong covers or extends to, or should cover or extend to, occasions where the communications are between a solicitor or a barrister for court proceedings on the one hand, and a person who may not be a witness or potential witness but provides relevant information for possible use in those proceedings on the other hand. (2) Whether, in a defamation or malicious falsehood matter, the plaintiff and the courts are entitled to use or rely on particulars of extrinsic facts never specifically pleaded in support of a specific innuendo meaning to support that innuendo meaning, on the sole ground that evidence on such extrinsic facts had in any case been received by the trial judge for a different reason or purpose. (3) Whether damages resulting from an absolutely privileged republication can be recoverable as damages for defamation and/or malicious falsehood flowing from an original non-privileged publication by a defendant where such republication should have been within the reasonable contemplation of the defendant.” 113. The two courts below gave diverse answers to these questions as they arose in the context of this case. In brief, the first question (extent of absolute privilege for an informant) was answered in the affirmative by the Recorder (paragraph 34) but in the negative (unanimously) by the Court of Appeal (paragraphs 2, 108, 203). The second question (pleading of innuendo) was answered in the negative by the Recorder (paragraphs 76 and 77) and by Yuen JA (paragraph 26) but (in effect) affirmatively by Kwan JA and Macrae JA (paragraphs 151 and 225). The third question did not arise for the Recorder but he would have answered it in the negative (paragraph 89). Kwan JA and Macrae JA did answer it in the negative (paragraphs 180 and 241) but nevertheless awarded $30,000 general damages because of the view that they took on the innuendo point. Yuen JA considered that the slander claim failed on the innuendo point, but had it succeeded she would have held that damages should include losses suffered through republications (paragraph 51). Absolute privilege 114. The first and second issues in the appeal, and for the Recorder ultimately the only live issues, were what the Defendant told Mr Midgley and Mr Mill on the telephone on the morning of 21 May 2009, and whether she was entitled to absolute privilege in respect of what she said in that telephone conversation. As to the first of these issues, it was, as the Recorder observed (paragraph 38) “only through a combination of the question and the answer that the Defendant could possibly be said to have made a ‘statement’”. The Recorder devoted just over half of his judgment to these topics, with a close examination of the detail of the Defendant’s witness statements and oral evidence in the course of his discussion. He did not accept her evidence on this point (paragraphs 38 to 53). As to the second issue, which he dealt with first, the Recorder decided (paragraphs 9 to 36) that the Defendant was entitled to absolute privilege. 115. The Court of Appeal disagreed. The principal judgment on this issue is that of Kwan JA, who covered the issue in paragraphs 86 to 126 of her judgment. Yuen JA added nothing on this point (paragraph 2). Macrae JA added a little, emphasising (paragraphs 203-206) that the extension of the law in Taylor v Director of the Serious Fraud Office [1992] 2 AC 177 arose from prosecution disclosure obligations in criminal cases, and had no application to civil cases. 116. Kwan JA dealt first with the purpose and rationale of this type of absolute privilege, citing a very well-known passage from the judgment of Devlin LJ in Lincoln v Daniels [1962] 1 QB 237, 257. That passage notes that the immunity can extend to the witness statement or similar written statement made by a person who later gives oral evidence, or even a statement, prepared for that purpose, made by someone who does not eventually give oral evidence. She also referred to the observations of Lord Hoffmann in Taylor v Serious Fraud Office[1999] 2 AC 177, 214. After citing the plurality judgment in the Australian case of Mann v O’Neill (1997) 71 AJLR 903, 907, Lord Hoffmann commented, “Thus the test is a strict one; necessity must be shown, but the decision on whether immunity is necessary for the administration of justice must have regard to the cases in which immunity has been held necessary in the past, so as to form part of a coherent principle.” 117. Taylor v Serious Fraud Office (above) and Darker v Chief Constable of the West Midlands Police [2001] 1 AC 435 show the widening of the rule so as to meet a particular problem, that is the need for extensive investigations into suspicions of serious organized crime, coupled with the need for disclosure by the prosecution to the defence of unused material held by the prosecution. Lord Hutton’s speech in Darker contains (at pp 463-8) a useful summary of the development of the principle, which is of considerable antiquity. But it also contains a warning (at pp 468-9) against the danger of extending this form of absolute privilege merely by analogy, citing McHugh J in Mann v O’Neill (1997) 71 ALJR 903, 912: “the temptation to recognise the availability of the defence for new factual circumstances simply because they are closely analogous to an existing category (or cases within an existing category) without examining the case for recognition in light of the underlying rationale for the defence.” Darker qualified Taylor only so far as it did not exempt the police from potential liability for serious misconduct (agreed particulars of ten separate allegations of police misconduct are set out at pp 462-3 of the report). 118. In the well-known passage of his judgment in Lincoln v Daniels [1962] 1 QB 237, 257, Devlin LJ said of his “third category” of case: “The third category is the most difficult of the three to define. It is based on the authority of Watson v M' Ewan [1905] AC 480 in which the House of Lords held that the privilege attaching to evidence which a witness gave coram judice [in the presence of the judge]extended to the precognition or proof of that evidence taken by a solicitor. It is immaterial whether the proof is or is not taken in the course of proceedings. In Beresford v White (1914) 30 TLR 591, the privilege was held to attach to what was said in the course of an interview by a solicitor with a person who might or might not be in a position to be a witness on behalf of his client in contemplated proceedings.” The facts of Watson v M’Ewan were unusual in that Dr Watson, the defendant to an action for slander, was an eminent medical practitioner who had examined Mrs M’Ewan, but did so on behalf of her husband, and at a time when there were grave differences, and matrimonial litigation, between husband and wife. He had kept private notes about the wife’s condition. In Beresford v White there was, as Buckley LJ put it, “an interview between the solicitor of the plaintiff and a person who was or who was thought to be in a position to give some evidence in these contemplated proceedings. It was a professional interview with a person who might be a witness in litigation then in contemplation.” 119. Devlin LJ made some further observations about Watson v M'Ewan (at p 261): “It is a question of how far the principle in Watson v M'Ewan is to be taken. The other authorities in which the case has been considered show that the connection between the two things - the evidence and the precognition, the document and the draft, the actuality that is undeniably privileged and the foreshadowing of it - must be reasonably close.” In this case, as the Recorder observed (paragraph 19), what Mr Mill said in open court was the “actuality” and was undoubtedly covered by absolute privilege. The “foreshadowing” took place at a time when Mr Mill was imminently contemplating and intending to make use of the documents about the Tai Po land in his cross-examination of Gilbert Leung in an hour or two. Here the Recorder seems to have assumed that “the connection” referred to by Devlin LJ was solely or mainly a matter of chronology (see especially paragraph 29 of his judgment). It is much more likely, I think, that Devlin LJ was thinking of a connection of subject-matter. It would often be down to the vagaries of court listing how much time might elapse between the preparation of a witness statement or proof of evidence and the eventual appearance of the witness in court. 120. I think that the Recorder may also have been influenced by doubt as to whether the Defendant was in any meaningful sense part of Tony Chan’s legal team. The Recorder began (paragraph 2) by referring to this as a disputed question. I have already referred to his findings in paragraph 18(2) but should add that a footnote to paragraph 18 of the judgment is in these terms, “In the Defence Written Opening, the defendant was described as ‘a member of Tony Chan’s legal team for the Probate Action’ either as a paralegal of Haldanes or as an assistant, student or mini-pupil of John McDonnell QC. In the course of oral opening, counsel for the defendant clarified that he would just be relying on the second limb: assistant, student or mini-pupil of John McDonnell QC. Whereas, the plaintiff would describe her as a representative of Siu.” The Defendant herself, in paragraph 3(i) of her Re-re-amended Defence, stated that after an unspecified date (that must have been in the early months of 2009) she “acted as middleman between Tony Chan’s legal team and Dr Siu in respect of his proposal” regarding the document and land searches mentioned in her pleading. 121. I agree with the Court of Appeal that the Recorder was in error in treating the Defendant’s conversation with Mr Midgley and Mr Mill as covered by absolute privilege. To do so would not be a small adjustment of boundaries, but a large extension whose boundaries would be by no means clear. It was not pure coincidence that the Defendant did not give evidence. The document which she obtained from Dr Siu was only to be used to test Gilbert Leung’s credit. Even if she had been a potential witness there is every reason to think that she would have declined to give evidence, in order to avoid being asked to identify Dr Siu. She was not even an informer, merely a middleman for an informer. That is precisely how Kwan JA saw the matter (paragraph 112). Innuendo 122. “Innuendo” is a term of art referring to the need to plead and prove particular facts which have the effect of making defamatory written or spoken words which are not defamatory in their natural and ordinary meaning. The need to do so is spelled out in O.82, r.3 of the High Court Rules, and also in general terms in O.18, r.8. The general importance of compliance with these requirements as to pleadings was made clear by Ma CJHC (as he then was) in Wing Hang Bank Ltd v Crystal Jet International Ltd [2005] 2 HKLRD 795,799, approving the note at paragraph 18/12/1 of the White Book. This general warning is particularly important in connection with the pleading of a true innuendo, since it is a separate cause of action. 123. The function of pleading an innuendo is not simply to give a general indication of why the plaintiff regards the written or spoken words as defamatory. It is much more specific. It is to plead facts, and moreover facts which were known, at the time of publication, to the audience to whom the publication was addressed. This is made clear in the learned judgment of Holroyd Pearce LJ in Grubb v Bristol United Press Ltd. [1963] 1 QB 309, 326-7. After a full review of the origin and development of the doctrine, the Lord Justice said: “In my judgment, the strong body of authority which has been cited leads to the conclusion that any innuendo (that is, any allegation that the words were used in a defamatory sense other than their ordinary meaning) cannot rely on a mere interpretation of the words of the libel itself but must be supported by extrinsic facts or matters. Thus, there is one cause of action for the libel itself, based on whatever imputations or implications can reasonably be derived from the words themselves, and there is another different cause of action, namely, the innuendo, based not merely on the libel itself but on an extended meaning created by a conjunction of the words with something outside them. The latter cause of action cannot come into existence unless there is some extrinsic fact to create the extended meaning. This view is simple and accords with common sense.” The rule is just the same for slander. 124. The Recorder, having decided that the Defendant was entitled to absolute immunity, did not strictly have to decide the questions that arose in the absence of such immunity. But he did at the request of Mr Yu (see paragraph 37 of his judgment) deal with all the other main issues in the case, including the issue of the pleading of the innuendos which formed an essential part of the plaintiff’s case. This issue is dealt with in detail at paragraphs 54 to 77 of his judgment. 125. In paragraph 56 the Recorder correctly pointed out that the amended pleading failed to identify facts known to the persons to whom the alleged slander was uttered. Instead it referred to a general public perception. Moreover (paragraph 57) some of the relevant incidents occurred after the publication to Mr Midgley and Mr Mill. When this was pointed out there was a further unopposed application for amendment, but as the Recorder observed, it only served to obfuscate rather than to elucidate the position. He rightly rejected, as wholly misconceived, the argument that the words uttered were defamatory in their ordinary and natural meaning (paragraphs 66 to 68). 126. The Recorder then considered the innuendo meanings in the new paragraph 8A. He rightly characterized the first subparagraph, (a), as essentially concerned with the concept of betrayal, and the second, (b), as essentially concerned with the lack of merit in Tony Chan’s claim in the probate action (he rightly commented that the words “secretly and covertly” added nothing). Neither of these assertions stood up in relation to the state of knowledge of Mr Midgley or Mr Mill as at 21 May 2009. They did not know of any friendship between the Plaintiff and Gilbert Leung, or of any loyalty owed to Gilbert Leung by the Plaintiff. As respectable and highly qualified lawyers acting for Tony Chan in the ongoing probate action, there was no reason to suppose that they knew or believed that his case was unmeritorious. The third subparagraph, (c), was dependant on the two earlier subparagraphs, and fell with them. 127. In the Court of Appeal Yuen JA took the same view as the Recorder, dealing with the issue more fully (paragraphs 9 to 26). She pointed out that in the Court of Appeal Mr Price QC had tried to broaden the scope of paragraph 8A(c) of the pleading by reference to knowledge pleaded in paragraph 7, which was not incorporated into paragraph 8A(c). This was not, she said, pure pedantry (paragraph 25.2): “It is essential in a complex area of the law such as defamation where all parties and the tribunal have to be acutely aware of the exact case(s) being advanced and for which adjudication is sought”. 128. However Kwan JA and Macrae JA took a different view. Kwan JA said that an appeal court will not lightly interfere with a judge’s finding of fact as to the meaning of words, and that the judge was not plainly wrong about paragraph 8A (a) of the pleading. But in relation to paragraph 8A (b) she said that she agreed with Mr Price that the Recorder had made several errors of law (paragraphs 140-145). I confess that I find it difficult to follow her summary of those alleged errors. In particular, in paragraphs 149-150 she seems to have ignored the importance of “an extended meaning created by a conjunction of the words with something outside them” (Grubb v Bristol United Press, above) known to Mr Midgley and Mr Mill. She also seems to have overlooked or disregarded the fact that some of the content of the “Particulars of facts and matters in support of innuendo” relates to events or perceptions occurring or formed after that date. She does not explain why, in the context of hotly-contested litigation, the word “unmeritorious” should be taken to mean “unworthy” rather than “legally unsustainable”. However this point is ultimately irrelevant because both Kwan JA (paragraph 146) and Macrae JA (paragraph 219) thought that innuendo meaning 8A (b) was not defamatory. 129. The slander claim ultimately depends, therefore, on paragraph 8A(c), which the Recorder had regarded as ancillary to the other two claims, and as falling with them if they failed. Kwan JA (paragraph 152) and Macrae JA (paragraph 225) seem to have reached the conclusion that that paragraph on its own was defamatory. But their stated reasons seem to be resurrecting paragraph 8A(b), which they held not to be defamatory. I prefer the more straightforward approach of the Recorder and Yuen JA. In my view the slander claim fails in its entirety. Malicious falsehood and republication 130. If the slander claims are out of the way, the Plaintiff’s last resort is the claim based on malicious falsehood. Section 24(1) of the Defamation Ordinance (Cap.21) provides, “In an action for slander of title, slander of goods or other malicious falsehood, it shall not be necessary to allege or prove special damage – (a) if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form; or (b) if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication.” 131. This claim raises a number of different points, some rather technical, especially in connection with republication on an absolutely privileged occasion. It may be helpful to reiterate (in a little more detail) the views of the Courts below. The Recorder dealt with malicious falsehood at paragraphs 79 to 89 of his judgment, but only on the assumption that his main conclusion (treating the Defendant as herself entitled to absolute privilege) was wrong. On that assumption he held that the natural meaning of the Defendant’s words was that she had obtained the document from the Plaintiff, and that that statement was, as she well knew, false. It was therefore malicious in the relevant sense. He then referred to section 24 of the Defamation Ordinance and held that neither limb applied to the original publication to Mr Midgley and Mr Mill. 132. The Recorder then addressed the republication of the Defendant’s words in open court, which is expressly pleaded and relied on in paragraph 11 of the Re-amended Statement of Claim. He assumed that the same test of liability for republication (apart from the issue of absolute privilege) applies for the purposes of malicious falsehood as for those of defamation. (The principles applicable in defamation cases are stated in Slipper v BBC [1991] 1 QB 283, McManus v Beckham [2002] 1 WLR 2982 and Baturina v Times Newspapers Ltd [2011] 1 WLR 1526). I agree with that assumption, since the test of reasonable foreseeability (including cases of actual authority for, or intention of, republication) is a straightforward test, and the facts of this case are clear. Rapid republication was intended and was virtually inevitable. 133. The Recorder then referred to one Australian case, Belbin v McLean [2004] QCA 181, and one American case, Watt v McKelvie (1978) 248 SE 2d 826, which raise the issue posed by the third certified question – which might be termed the issue of transferred (or contagious) absolute privilege, that is whether the absolute privilege protecting republication by counsel in open court protects not only counsel making the republication, but also the originator of the republished material, when the original publication was not covered by absolute privilege. The Recorder decided to follow these cases, stating (paragraph 88) that “the Defendant had participated in the republication in open court”. It is not clear in what sense she had participated in it. She had certainly authorised it, but she was not in court (or even in Hong Kong) at the time of its republication. 134. In the Court of Appeal Kwan JA agreed (paragraph 180) that the Defendant should not be liable for the loss arising from the republication. She referred to the Recorder’s decision but it is not clear whether she took exactly the same view. Macrae JA also agreed with this conclusion (paragraphs 237 to 241). He referred to, and agreed with, Belbin v McLean and Watt v McKelvie. 135. Yuen JA took a different view of the innuendo meanings, holding (correctly, in my opinion) that none of them had been established on the Plaintiff’s much-amended pleadings (paragraphs 18 to 26). She then discussed malicious falsehood, including the issue that I have termed transferred (or contagious) absolute privilege (paragraphs 27 to 56). Her reasoning is developed at length, but the crucial point is at paragraph 39: “As discussed above, the juridical basis is that the plaintiff is not making the defendant (or the republisher) liable for the republication, but only the defendant liable for the original publication – where he has, by his intentional acts, engendered consequential but reasonably foreseeable losses. Therefore there is no reason why the defendant should be entitled to shelter behind the defence available to the republisher, because the plaintiff is not asserting a cause of action against the republisher at all, but only against the original publisher.” Yuen JA did not quantify the “consequential but reasonably foreseeable losses” engendered by the Defendant’s telephone call to Mr Midgley and Mr Mill, presumably because she was by then aware that the majority of the Court took a different view on the innuendo issue. 136. This survey of the judgments below indicates the variety of views that have been expressed. If (as I would hold) the innuendo points pleaded by the Plaintiff all fall away, malicious falsehood is the Plaintiff’s last resort, and attention must focus on section 24 of the Defamation Ordinance, quoted in paragraph 30 above. It was added to the Ordinance in 1961, and is in the same terms as section 3 of the Defamation Act 1952 of the United Kingdom. It makes an important change in the law in favour of plaintiffs, but only in the two cases specified in subsection (1): in other cases special damage must be pleaded and proved, since at common law special damage is essential to the cause of action: see Ratcliffe v Evans [1892] 2 QB 524, 532, and the other cases cited in Halsbury’s Laws of Hong Kong (2nd ed.) vol 47, para 380.658, fn 1. In section 24 (1) (b) the phrase “calculated to cause pecuniary damage” has been interpreted as meaning likely or probable in an objective sense, rather than a mere possibility (IBM v Web-Sphere Ltd [2004] FSR 39). 137. The Plaintiff is described in his Statement of Claim as ‘a successful businessman and property developer who is well known in the securities industry’. The Defendant’s oral statement by telephone was made to two litigation lawyers, Mr Midgley and Mr Mill, who appear never to have heard of the Plaintiff before. At any rate there is no suggestion that either of them had, or was likely to have, any sort of business dealings with him. That disclosure could not therefore give rise to any special damage. The Defendant can be liable for special damage to the Plaintiff only if (i) she is concurrently responsible for Mr Mill’s subsequent disclosure of the Plaintiff’s name in open court; and (ii) that disclosure fell within section 24(1) (b) of the Defamation Ordinance or special damage has been pleaded and proved; and (iii) she does not as to the measure of damages for that subsequent disclosure, enjoy the same absolute privilege as Mr Mill. 138. The Plaintiff has no difficulty, in my view, in surmounting the first of these hurdles. But the second causes obvious difficulty. The naming of the Plaintiff by Mr Mill in open court, and any fair reporting of his words by the press, would have conveyed nothing “calculated to cause pecuniary damage to the plaintiff” in his business. Innuendo as such does not form part of the law of malicious falsehood, but the reasoning which leads to the rejection of the innuendo meanings, on the issue of slander, leads to the same conclusion in relation to malicious falsehood. All the Defendant did, as the Recorder found, was to name the Plaintiff, falsely, as the individual who had produced a particular document that was put to a witness in cross-examination. The special damages claimed in paragraph 11 of the Re-amended Statement of Claim are all premised on the innuendo meanings which we have rejected. 139. In these circumstances it is not necessary for us to deal with the third point at paragraph 137 above, and although it is the subject of the third certified question I think it is better not to express any view on it. The point is one of considerable importance, and the facts of the present case are very unusual, and probably not typical of other cases in which the issue might arise. The case of Watt v McKelvie is not clear in its reasoning, and involved a departure from the law of Virginia as stated in the relevant Restatement. Belbin v McLean is clearer, but arguably depends on the correct construction of a statutory (as opposed to common law) privilege. 140. I would allow the Defendant’s appeal in full and make an order nisi that the Defendant should have 50% of her costs of the action down to the end of the proceedings before the Recorder (so restoring his Order of 28 January 2016) and all her costs of the appeals to the Court of Appeal and to this Court. The order nisi will become absolute unless an application to vary the order is made within 14 days. Mr Justice Ribeiro PJ: 141. The Court unanimously allows the appeal of Esther Chan Pui Kwan, the appellant in FACV 2 of 2018, and dismisses the appeal of Chang Wa Shan, the appellant in FACV 3 of 2018. We unanimously make an order nisi that Esther Chan Pui Kwan should have 50% of her costs of the action down to the end of the proceedings before the Recorder (so restoring his Order of 28 January 2016) and all her costs of the appeals to the Court of Appeal and to this Court. The parties are at liberty to lodge written submissions on costs within 14 days of the handing down of this judgment and to lodge submissions in reply within 14 days thereafter. In default of the lodging of such submissions, the order nisi shall stand as an order absolute without further direction. Mr James Price, QC and Mr Jonathan Chang, instructed by Baker & McKenzie, for the Plaintiff (Appellant in FACV 3/2018 and Respondent in FACV 2/2018) Mr Kenneth K Y Lam and Ms Angela Mui, instructed by Lui & Law, for the Defendant (Appellant in FACV 2/2018 and Respondent in FACV 3/2018) [1] Chinacham Charitable Foundation Limited v Chan Chun Chuen and another (unrep., HCAP 8/2007, 2 February 2010). [2] Instructed by Mr Midgley, a partner in Haldanes, solicitor. [3] He is also known as Chang Wa Shan, the plaintiff in this action. [4] Court of Appeal, para 7.5. [5] The Recorder said at para 18(4) “There is no suggestion that the Document was other than an authentic document.” [6] Re‑Amended Statement of Claim (“RASC”), para 4A. [7] In the plaintiff/respondent’s printed case it is stated that the plaintiff “would, if asked, have said that he was given an investment proposal concerning the plot of land in question by Gilbert Leung, but it was not that contained in the document produced in court in the probate trial.” [8] RASC, para 11(d). [9] Poon J, as he then was, HCMP 1101/2009 at para 6, Decision on 9 October 2009. [10] RASC, para 7. [11] [1962] 1 QB 237, 261. [12] Judgment, para 19. [13] Judgment, para 29. [14] Judgment, para 32. [15] Judgment, para 36. [16] The first certified question, see para 34 below. [17] However, according to the Recorder: “It was only on 21 May 2009 that there was a change of heart on the part of the third party who agreed to allow Tony Chan’s lawyers to make use of the Document in the cross-examination of Gilbert Leung without making the payment as a precondition. The third party was contended (sic) to be paid in the event of Tony Chan winning in the Probate Action.” Judgment, para 18(4), where the learned Recorder set out “important facts relating to the nature of the ‘publication’”. [18] Judgment, para 42. [19] Judgment, para 38. There was no finding that this answer would have been untrue. [20] Judgment, para 42. She said she was in a factory in the Mainland and it was noisy. [21] Judgment, para 52. [22] Judgment, para 50. [23] The Recorder referred to this exchange as the Q&A. [24] Judgment, para 52. [25] Judgment, para 49. [26] Kwan JA, Macrae JA (as he then was) and Yuen JA dissenting. [27] There was no appeal regarding the alleged natural and ordinary meaning. Court of Appeal, para 127. [28] The second certified question. See para 34(2) below. [29] Slander of title, etc. (1) In an action for slander of title, slander of goods or other malicious falsehood, it shall not be necessary to allege or prove special damage — (a) if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form; or (b) if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication. [30] (1978) 248 SE 2d 826. [31] Kwan JA, Macrae JA (as he then was) and Yuen JA dissenting. This is the third certified question, see para 35 below. [32] Court of Appeal, para 221. [33] Which depended on the knowledge of Mr Mill and Mr Midgley, see para 26 above. [34] Court of Appeal, para 150. [35] Para 34(2) below. [36] Court of Appeal, para 25.1. The Recorder said: “76. This meaning is expressed to be built upon the imputations of ‘betrayal’ and ‘helping Tony Chan in pursuing an unmeritorious case.’” [37] Court of Appeal, paras 15.3 and 25.2. [38] Court of Appeal, para 227. [39] Gatley on Libel and Slander 12th ed, at para 13.5. [40] For brevity’s sake, I will call this “judicial privilege”, see per Lord Atkin in O’Connor v Waldron (1935) AC 76, 81. [41] (1997) 191 CLR 204 at 213. [42] Taylor v Serious Fraud Office [1999] 2 AC 177 at 214F, with the concurrence of Lord Goff of Chieveley, Lord Hope of Craighead and Lord Hutton. [43] The judgment of Brennan CJ, Dawson, Toohey and Gaudron JJ in Mann v O’Neill at 213 cited by Lord Hoffmann in Taylor at 214C-D. [44] Taylor, by Lord Hoffmann at 214D-E. [45] Ibid, 208E. [46] Ibid, 208D-E. [47] At 408. [48] (1883) 11 QBD 588. [49] At 600. [50] At 603. [51] At 604-605, citing from Pigott, CB in Kennedy v Hilliard (1859) 10 Ir. C.L.R. 195. [52] [1962] 1 QB 237. [53] [1905] AC 480. [54] (1914) 30 TLR 591. [55] Lincoln v Daniels, at 261. [56] Ibid, at 263. [57] Para 40 above. [58] At 211-212. [59] Lincoln v Daniels, at 260, quoting from Lord Halsbury LC in Watson v M’Ewan at 487 who was speaking in the context of the preliminary examination of witnesses to find out what they can prove, but I do not believe it is limited solely to that situation; see for example the quotation at para 51 above. [60] Ibid, at 256. [61] See Mann v O’Neill quoted at para 53 above. [62] Judgment, para 23. [63] Para 90 of Chinachem v Chan Chun Chuen. [64] Judgment, para 39. [65] See para 50 above. [66] Per McHugh J in Mann v O’Neill cited by Lord Hoffmann in Taylor at 213F. [67] Ibid. [68] See paras 79-80 below. [69] Plaintiff/respondent’s case, para 34. [70] Quoting Lord Hope in Darker v Chief Constable of West Midlands [2001] 1 AC 435, 447, citing from Auld LJ’s judgment in the Court of Appeal in Taylor. [71] The plaintiff was represented by leading counsel throughout and in the Court of Appeal, by two leading counsel. In a trial which depends on credibility, the result is not always predictable. Nor would a defendant who eventually succeeds be fully indemnified in cost. [72] I say possibly because if she and the true provider of the document were still hoping for a reward, it is puzzling that she should have given a false name, to whom presumably any reward would be given in due course. [73] S v Newham. [74] Paras 32-33 above. [75] Para 22 above. [76] See in particular, Macrae JA at paras 237-241. [77] FACV 2/2018. [78] FACV 3/2018. [79] Based on the authority of Watson v M’Ewan [1905] AC 480. [80] E.g., the advocate’s immunity from suit for negligence for the conduct of the case in court and the immunity from suit for breach of duty by expert witnesses in respect of their participation in legal proceedings. [81] In Arthur J S Hall & Co v Simons [2002] 1 AC 615 and Jones v Kaney [2011] UKSC 13, [2011] 2 AC 398 respectively.
Chief Justice Ma and Mr Justice Ribeiro PJ: 1. The appellant is a registered medical practitioner and was indicted for gross negligence manslaughter (“GNM”). The prosecution alleged that she had administered to her patient a highly contaminated blood product produced and marketed by two co-defendants, causing the patient’s death. Her co-defendants were convicted after trial but the jury was unable to reach a verdict in the appellant’s case, resulting in an order for her retrial. The retrial has yet to take place, awaiting the outcome of the present appeal. A. The issue in this appeal 2. This appeal arises out of a ruling by Barnes J[1]regarding the essential elements of the offence of GNM in determining a preliminary issue for the purposes of the retrial. Her Ladyship reserved the question of law concerned for the Court of Appeal’s consideration[2]and the appellant appeals from their Lordships’ judgment[3]on that preliminary issue. The Court of Appeal certified, and the Appeal Committee[4]granted leave to appeal to this Court on, the question formulated as follows: “In the offence of manslaughter by gross negligence, should the gross negligence referred to in the last element of the offence as enunciated in R v Adomako [1995] 1 AC 171, namely ‘the breach of the duty by the defendant being capable of being characterised as gross negligence and therefore a crime’ be proved based on the objective reasonable man test only or that in addition to the objective reasonable man test, the prosecution is also required to prove that the defendant’s subjective state of mind was culpable in that the defendant was subjectively aware of the obvious and serious risk of death to the deceased?” B. The rulings in the Courts below 3. Barnes J referred to the essential ingredients of GNM as laid down by the House of Lords in R v Adomako[5] and held that the position in Hong Kong differs in relation to the element consisting of the requirement that the defendant’s breach of duty must amount to gross negligence. Adhering to her earlier ruling in HKSAR v Lai Shui Yin,[6]she held: “... that the test as to what amount [sic] to gross negligence is not just an objective reasonable man test (as in the case of Adomako, which was adopted in the subsequent case of R v Misra [2005] 1 Cr App R 328 in the UK), but that the prosecution must prove that the defendant’s subjective state of mind was culpable before the defendant can be found guilty of the offence.”[7] 4. Her Ladyship arrived at that conclusion mainly on the basis of her reading of this Court’s decision in Sin Kam Wah v HKSAR[8] to which we shall return. 5. In a carefully reasoned judgment, Macrae VP, writing for the Court of Appeal, reversed Barnes J’s decision. Having considered the law on GNM in Hong Kong, England and Wales, Australia and Canada, as well as issues of legal policy, his Lordship concluded that there was no basis for the law in Hong Kong to follow a different course. C. The law relating to GNM C.1 The law in England and Wales 6. Since the certified question relates specifically to Adomako; it is convenient to begin by looking at the law in England and Wales. There, it is settled that the offence of GNM has four principal elements so that the prosecution is required to prove (i) the existence of a duty of care on the part of the accused vis-à-vis the deceased; (ii) that such duty was breached; (iii) that the breach caused the death of the deceased; and (iv) that the accused’s conduct involved gross negligence. As indicated in the certified question, the present debate centres on the fourth ingredient: What must the prosecution prove to establish “gross negligence”? 7. The law has evolved over the last century principally involving three leading authorities. The first is the judgment of the English Court of Criminal Appeal in R v Bateman,[9]a case in which a doctor was charged after his patient died as a result of his delivery of her child. Hewart LCJ explained that criminal liability for manslaughter by gross negligence shared the same elements of duty, breach and causation required to prove negligence in civil cases but entailed the added requirement that the jury be satisfied that the accused’s negligence “amounted to a crime”.[10] His Lordship stated: “To support an indictment for manslaughter the prosecution must prove the matters necessary to establish civil liability (except pecuniary loss), and, in addition, must satisfy the jury that the negligence or incompetence of the accused went beyond a mere matter of compensation and showed such disregard for the life and safety of others as to amount to a crime against the State and conduct deserving punishment.”[11] 8. It is understandable that one might think that a direction along those lines does not give sufficient guidance to the jury regarding the additional element that is needed to attach criminal liability: How are they to decide whether the negligence “went beyond a mere matter of compensation” and amounted to “a crime against the State and conduct deserving punishment”? 9. Perhaps more helpful was Hewart LCJ’s statement that “[in] a criminal Court ... the amount and degree of negligence are the determining question.”[12] It was, in other words, for the jury to assess just how bad the negligence was and to convict only if it was of a particularly high degree. 10. However, his Lordship added: “There must be mens rea.”[13] This, together with his statement that the prosecution must prove that the accused “showed such disregard for the life and safety of others ...”, gave rise to debate as to whether the fourth element of the offence requires proof not merely of a substantial departure from an objective minimum standard of care, but also a subjective awareness on the accused’s part of the risks to “the life and safety of others” created by his conduct. That is of course the issue that this Court is asked to determine in the present case. 11. Some of the abovementioned difficulties were recognised by the House of Lords in the second leading authority, Andrews v Director of Public Prosecutions,[14]a motor manslaughter case. In his speech, with which the other Law Lords concurred, Lord Atkin began his analysis of the law by observing that the crime of manslaughter involved difficulties of definition, particularly in the case of involuntary manslaughter which had to identify the element of “unlawfulness”, this being “the elusive factor”.[15]Regarding Bateman,Lord Atkin commented: “I do not myself find the connotations of mens rea helpful in distinguishing between degrees of negligence, nor do the ideas of crime and punishment in themselves carry a jury much further in deciding whether in a particular case the degree of negligence shown is a crime and deserves punishment. But the substance of the judgment is most valuable, and in my opinion is correct.”[16] 12. His Lordship focussed on the elevated degree of negligence required, stating: “Simple lack of care such as will constitute civil liability is not enough: for purposes of the criminal law there are degrees of negligence: and a very high degree of negligence is required to be proved before the felony is established. Probably of all the epithets that can be applied ‘reckless’ most nearly covers the case.”[17] 13. This provided welcome clarification although, as we shall see, his use of the word “reckless” has required further explanation. It is worth noting that Lord Atkin was concerned to address possible overlaps and differences in the constituents of GNM when placed alongside the then newly-minted statutory offences in the Road Traffic Act 1930 which posited different degrees of negligence for offences such as driving without due care and attention, driving recklessly or at a speed or in a manner dangerous to the public.[18] His Lordship stated: “...in directing the jury in a case of manslaughter the judge should in the first instance charge them substantially in accordance with the general law, that is, requiring the high degree of negligence indicated in Bateman's case and then explain that such degree of negligence is not necessarily the same as that which is required for the offence of dangerous driving, and then indicate to them the conditions under which they might acquit of manslaughter and convict of dangerous driving.”[19] 14. After Andrews, a body of case-law grew up, examining the meaning of “recklessness” as an ingredient of certain statutory offences including, in the House of Lords, Commissioner of Police of The Metropolis v Caldwell[20] (concerning arson with intention or being reckless as to whether property would be damaged or destroyed);[21]and R v Lawrence (Stephen)[22] (regarding causing death by reckless driving).[23] These are not of direct relevance to the present discussion.[24] 15. There was also an attempt by the Court of Appeal in a consolidated appeal in R v Prentice, R v Adomako and two other cases,[25]to devise a somewhat elaborate scheme setting out different states of mind in the defendant which would justify a finding of gross negligence.[26] That scheme, however, did not find favour and was overtaken by the decision in Adomako[27] in the House of Lords which sought to simplify the law. 16. In Adomako, an anaesthetist was charged with GNM, the prosecution alleging that during an operation, despite warning signs, he had failed to notice that a tube had become disconnected, depriving the patient of oxygen and resulting in the patient’s death. Lord Mackay of Clashfern LC (with whom the other Law Lords agreed) endorsed the approach in Bateman and Andrews, and formulated the ingredients of GNM as follows: “... in my opinion the ordinary principles of the law of negligence apply to ascertain whether or not the defendant has been in breach of a duty of care towards the victim who has died. If such breach of duty is established the next question is whether that breach of duty caused the death of the victim. If so, the jury must go on to consider whether that breach of duty should be characterised as gross negligence and therefore as a crime. This will depend on the seriousness of the breach of duty committed by the defendant in all the circumstances in which the defendant was placed when it occurred. The jury will have to consider whether the extent to which the defendant's conduct departed from the proper standard of care incumbent upon him, involving as it must have done a risk of death to the patient, was such that it should be judged criminal. It is true that to a certain extent this involves an element of circularity, but in this branch of the law I do not believe that is fatal to its being correct as a test of how far conduct must depart from accepted standards to be characterised as criminal. This is necessarily a question of degree and an attempt to specify that degree more closely is I think likely to achieve only a spurious precision. The essence of the matter which is supremely a jury question is whether having regard to the risk of death involved, the conduct of the defendant was so bad in all the circumstances as to amount in their judgment to a criminal act or omission.”[28] 17. Referring to Lord Atkin’s use of the word “reckless”, Lord Mackay commented: “I consider it perfectly appropriate that the word ‘reckless’ should be used in cases of involuntary manslaughter, but as Lord Atkin put it ‘in the ordinary connotation of that word.’”[29] 18. The law so enunciated has since been regarded as authoritative in England and Wales. As appears from the passages cited above,[30]after reiterating the essential elements of GNM comprising duty, breach and causation of death, Lord Mackay explains that the requirement that the negligence be “gross” constitutes the “test of how far conduct must depart from accepted standards to be characterised as criminal”, that being “necessarily a question of degree”. He observed that “whether that breach of duty should be characterised as gross negligence and therefore as a crime ... will depend on the seriousness of the breach of duty committed by the defendant in all the circumstances in which the defendant was placed when it occurred.” 19. His Lordship makes it clear that this is a question for the jury who, looking at all the circumstances, “have to consider whether the extent to which the defendant's conduct departed from the proper standard of care incumbent upon him, involving as it must have done a risk of death to the patient, was such that it should be judged criminal”. He disowned any attempt to specify the required degree more closely as an attempt could only achieve a spurious precision, it being “supremely a jury question” as to “whether having regard to the risk of death involved, the conduct of the defendant was so bad in all the circumstances as to amount in their judgment to a criminal act or omission”. 20. Adomako therefore applies an objective test for gross negligence by reference to a standard of care, the jury being charged with assessing the extent by which the conduct of the accused fell short. It was against this background that use by Lord Atkin of the term “reckless” in Andrews – “in the ordinary connotation of that word” – should be understood. 21. Use of “recklessness” in this context was explained by Rose LJ in AG’s Reference (No 2 of 1999),[31]as follows: “Although there may be cases where the defendant's state of mind is relevant to the jury's consideration when assessing the grossness and criminality of his conduct, evidence of his state of mind is not a prerequisite to a conviction for manslaughter by gross negligence. The Adomako test is objective, but a defendant who is reckless as defined in Reg v Stone [1977] QB 354 may well be the more readily found to be grossly negligent to a criminal degree.” 22. This was endorsed in the Divisional Court by Buxton LJ in R v DPP Ex p Jones,[32]in the following terms: “The law is, therefore, quite clear. If the accused is subjectively reckless, then that may be taken into account by the jury as a strong factor demonstrating that his negligence was criminal, but negligence will still be criminal in the absence of any recklessness if on an objective basis the defendant demonstrated what, for instance, Lord Mackay quoted the Court of Appeal in Adomako as describing (page 183C) as: ‘… failure to advert to a serious risk going beyond mere inadvertence in respect of an obvious and important matter which the defendant's duty demanded he should address …’” 23. In R v Misra and Srivastava,[33]Judge LJ, writing for the Court of Appeal, applied Adomako as explained above and confirmed that the relevant risk was the risk of causing death: “... where the issue of risk is engaged, Adomako demonstrates, and it is now clearly established, that it relates to the risk of death, and is not sufficiently satisfied by the risk of bodily injury or injury to health. In short, the offence requires gross negligence in circumstances where what is at risk is the life of an individual to whom the defendant owes a duty of care. As such it serves to protect his or her right to life.”[34] C.2 The law in Hong Kong 24. The definition of the offence of GNM as developed in England and Wales has generally been taken to represent the common law applicable in Hong Kong. Thus, in The Queen v Kong Cheuk Kwan,[35]a case involving a hydrofoil collision heard just before Adomako was decided, Lord Roskill stated: “Their Lordships are of the view that the present state of the relevant law in England and Wales and thus in Hong Kong is clear.” 25. Since Adomako was handed down, it has been applied in the Court of Appeal in Hong Kong. Thus it was relied on by Stock VP in Secretary for Justice v Law Siu Kuen,[36]a sentence review in a motor manslaughter case, for the purpose of establishing that a very high degree of negligence is involved in the offence. And in HKSAR v Ngai Hon Kwong,[37]an appeal against a murder conviction succeeded on the footing that the trial judge had erroneously failed to leave to the jury GNM as a possible alternative verdict. McWalters JA (writing for the Court) followed Adomako in identifying the essential ingredients of GNM. 26. Accordingly, subject to determination of the issue raised on this appeal, the law as it stands in England and Wales described above represents the law on GNM applicable in Hong Kong as part of the common law. 27. It may also be noted that, so far as the fourth “gross negligence” element of the offence is concerned, the objective test is embraced by the Supreme Court of Canada[38]and the High Court of Australia[39]where attempts to persuade those tribunals to jettison that test have failed. D. Should the law in Hong Kong depart from the objective test? 28. Mr Peter Duncan SC, appearing[40]for the appellant, submits that the law in this jurisdiction should eschew the objective approach to establishing gross negligence. As reflected in the certified question, he submits that the Court should hold that “in addition to the objective reasonable man test, the prosecution is also required to prove that the defendant’s subjective state of mind was culpable in that the defendant was subjectively aware of the obvious and serious risk of death to the deceased”. This is in substance a submission that the offence of manslaughter by negligence should be transformed into an offence of manslaughter by recklessness in the sense of requiring a subjective recklessness as to the risk involved:[41]that no one should be convicted of GNM unless he or she proceeded with the conduct causing death while aware of an obvious and serious risk of causing death. 29. Two main propositions are advanced in support of that submission. The first is that the definition of the offence is objectionably “circular”. The second, comprising related arguments regarding culpability, is that it is unacceptable in principle and contrary to authority that liability for an offence as serious as manslaughter should rest on an objective test rather than on proof of the accused’s awareness of the risk of causing death. D.1 The circularity argument 30. A similar argument was advanced in Adomako: “... [Counsel] criticised the concept of gross negligence which was the basis of the judgment of the Court of Appeal submitting that its formulation involved circularity, the jury being told in effect to convict of a crime if they thought a crime had been committed and that accordingly using gross negligence as the conceptual basis for the crime of involuntary manslaughter was unsatisfactory ...”[42] 31. The complaint is that the definition entails the court abandoning its proper role of directing the jury. Instead of instructing them as to what constitutes the offence in law, the jury are left (so it is argued) to define for themselves whether an offence has been committed. This is put as follows in the appellant’s Written Case: “The Adomako line of authority fails to provide a jury with sufficient guidance as to what constitutes ‘gross’ negligence - the jury is left to determine whether the negligence in a particular case warrants determination as a crime rather than simply being a basis for civil liability: this is contrary to the norm that a jury is directed as to what the law defines a crime to be so that its task is to determine the facts and then apply the law, as directed, to those facts.”[43] 32. There is support for this criticism in writings of distinguished academic authors. Thus, the authors of Smith, Hogan, and Ormerod’s Criminal Law disapprove of the current test in the following terms: “The jury appear to be left with the task of deciding the scope of the offence. The test is quite unlike that in, say, applying the definition of intention, which has been supplied by the judge. In such a case, the jury looks at the facts and applies the legal definition of intention as provided by the judge. In gross negligence, the jury has to determine whether on their view the conduct should be called grossly negligent, and if so that amounts to the crime. This seems objectionable in principle.”[44] 33. And Professor Graham Virgo comments: “Such circular reasoning is unsatisfactory and effectively constitutes an open invitation to the jury to find the defendant guilty where their gut reaction is that the defendant is guilty. This confuses to an unacceptable extent questions of law and fact. For such a serious offence as manslaughter principles need to be developed, judicial guidance must be given, otherwise the result will simply be inconsistency and unpredictability…”[45] 34. With respect, we do not accept the circularity argument. As we have seen, Lord Mackay in Adomako was prepared to nod in the direction of that criticism by accepting that there was “an element of circularity” in the definition. However, he was not deflected from upholding the objective approach. He held to be correct the “test of how far conduct must depart from accepted standards to be characterised as criminal”, which involves “necessarily a question of degree”. As indicated in Section C.1 above, that approach has been adopted throughout the authorities which have consistently placed a very high degree of negligence at the heart of the definition of GNM. 35. As Lord Mackay pointed out, such a question of degree is “supremely a jury question”. Having regard to the risk of death that was necessarily involved, they are asked to find the facts and to assess the degree to which the defendant’s conduct was negligent in all the circumstances – to assess how far, if at all, it fell short of the minimum standard of care reasonably to be expected. The Judge directs them that the offence is only constituted upon proof that the defendant was guilty of a very high degree of negligence in all the circumstances.[46]In our view, the test is not circular and there is no abdication of the judge’s role of defining the offence for the jury. As Judge LJ explained in R v Misra and Srivastava: “On proper analysis, therefore, the jury is not deciding whether the particular defendant ought to be convicted on some unprincipled basis. The question for the jury is not whether the defendant's negligence was gross, and whether, additionally, it was a crime, but whether his behaviour was grossly negligent and consequently criminal. This is not a question of law, but one of fact, for decision in the individual case.”[47] 36. It is true that the jury are here not dealing with simple questions of fact, such as whether a certain act was performed or whether the accused was correctly identified as the offender. And often the jury will be assisted by expert evidence. They are asked in this context to make findings on a question of degree and to exercise an evaluative function on the basis of the findings made. It is not unusual for the law to assign such an evaluative function to the jury, looking to them as the appropriate tribunal for the ascertainment of community standards. This was pointed out by Judge LJ in Misra: “... this represents one example, among many, of problems which juries are expected to address on a daily basis. They include equally difficult questions, such as whether a defendant has acted dishonestly, by reference to contemporary standards, or whether he has acted in reasonable self-defence, or, when charged with causing death by dangerous driving, whether the standards of his driving fell far below what should be expected of a competent and careful driver. These examples represent the commonplace for juries.”[48] D.2 Gross negligence as the basis of culpability 37. The next argument in favour of replacing manslaughter by gross negligence with manslaughter by recklessness involves the proposition that manslaughter is a very serious offence and that in principle, liability should depend on proof of culpability involving the defendant’s awareness of the risk of causing death rather than application of an objective standard. As we have seen, the authorities establish that while evidence of a reckless state of mind is relevant to proving gross negligence, recklessness is not a required ingredient of GNM. 38. The premise of the appellant’s argument appears to be that in adopting an objective standard, the GNM offence as defined in the Adomako line of cases does not require proof of conduct which is or is sufficiently morally culpable to justify conviction for manslaughter. We do not accept that premise. The offence requires proof that the defendant, who owed a duty of care to the deceased, breached that duty causing the deceased’s death when in all the circumstances, the defendant’s conduct fell so far short of what could reasonably be expected of him or her so that such conduct is properly characterised as grossly negligent. In our view, such conduct is justifiably treated as highly culpable and deserving of being castigated as manslaughter. 39. Thus, in Bateman,[49]regarding the culpability associated with the offence, Hewart LCJ observed: “In explaining to juries the test which they should apply to determine whether the negligence, in the particular case, amounted or did not amount to a crime, judges have used many epithets, such as ‘culpable,’ ‘criminal,’ ‘gross,’ ‘wicked,’ ‘clear,’ ‘complete.’ But, whatever epithet be used and whether an epithet be used or not, in order to establish criminal liability the facts must be such that, in the opinion of the jury, the negligence of the accused went beyond a mere matter of compensation between subjects and showed such disregard for the life and safety of others as to amount to a crime against the State and conduct deserving punishment.” 40. In The Queen v Lavender,[50]concurring with the plurality judgment in the High Court of Australia,[51]Kirby J referred to Hewart LCJ’s epithets and pointed out that “[even] in today's society, where death has resulted from aggravated negligence ... holding the individual criminally liable has been justified.” He observed that: “Subjective intention does not enjoy a monopoly on moral culpability. ... The claim of a person who causes harm that he or she did not mean to do it or did not stop to think as excusing them of wrongdoing is commonly treated as unpersuasive, especially where death or serious injury ensue. A person who intends to bring about an undesirable outcome or who is reckless as to the possibility of that outcome but proceeds anyway is more culpable than a person who negligently causes the same outcome. This is because the former is aligned with that outcome while the same cannot be said of the latter. But this is not to say that the latter is always undeserving of moral condemnation and punishment. In some circumstances, the opposite is the case.”[52] 41. Kirby J noted the statement in Wilson v The Queen[53]that there must “be a close correlation between moral culpability and legal responsibility [for manslaughter]” and concluded that: “Notwithstanding that manslaughter is defined by reference to an objective test, this correlation is assured by the degree of negligence required.”[54] D.3 The argument based on R v G and Another 42. Mr Duncan SC relied heavily on the following passage in the speech of Lord Bingham of Cornhill in R v G and Another as authority for requiring recklessness to replace gross negligence as the basis of what is presently GNM: [55] “... it is a salutary principle that conviction of serious crime should depend on proof not simply that the defendant caused (by act or omission) an injurious result to another but that his state of mind when so acting was culpable. This, after all, is the meaning of the familiar rule actus non facit reum nisi mens sit rea. The most obviously culpable state of mind is no doubt an intention to cause the injurious result, but knowing disregard of an appreciated and unacceptable risk of causing an injurious result or a deliberate closing of the mind to such risk would be readily accepted as culpable also. It is clearly blameworthy to take an obvious and significant risk of causing injury to another. But it is not clearly blameworthy to do something involving a risk of injury to another if (for reasons other than self-induced intoxication: R v Majewski [1977] AC 443) one genuinely does not perceive the risk. Such a person may fairly be accused of stupidity or lack of imagination, but neither of those failings should expose him to conviction of serious crime or the risk of punishment.” 43. Counsel also cited the decisions of this Court in Hin Lin Yee v HKSAR;[56]Kulemesin v HKSAR;[57]and HKSAR v Choi Wai Lun[58] as lending support to his argument. 44. Additionally, he relied on the judgment of Sir Anthony Mason NPJ in Sin Kam Wah v HKSAR,[59]where R v G and Another was adopted, overruling two Court of Appeal decisions including a case involving GNM, as providing further support. 45. We do not accept that those authorities, properly understood, are capable of grounding the appellant’s argument. Leaving aside Sin Kam Wah for the moment, the other authorities are all concerned with statutory construction and in R v G and Another,the “salutary principle” was referred to by Lord Bingham in that context. He was careful to point this out: “The task confronting the House in this appeal is, first of all, one of statutory construction: what did Parliament mean when it used the word ‘reckless’ in section 1(1) and (2) of the 1971 Act? In so expressing the question I mean to make it as plain as I can that I am not addressing the meaning of ‘reckless’ in any other statutory or common law context.”[60] 46. His Lordship was construing section 1 of the Criminal Damage Act 1971 in a case involving boys aged 11 and 12 who had set fire to newspapers, thrown them under a large plastic dustbin, and left without putting out the burning papers, resulting in the fire spreading and causing £1 million worth of damage. They were charged with arson contrary to section 1 “in that they caused damage to property, being reckless as to whether such property would be destroyed or damaged” even though it was accepted that neither of the defendants appreciated that there was any risk of the fire spreading. Lord Bingham was therefore concerned with determining the meaning of “reckless” in the section and the “salutary principle” he invoked is a common law principle of statutory construction which favours interpreting provisions which create serious criminal offences as presumptively requiring proof of mens rea. 47. Similarly, in Hin Lin Yee, this Court was concerned with section 54(1) of the Public Health and Municipal Services Ordinance[61]which creates the offence of selling a drug intended for use by man but unfit for that purpose. The question for the Court, obviously one of statutory construction, was whether a defendant is liable even where the medicine was sold in the honest and reasonable, albeit mistaken, belief that it was fit for human use. It was pointed out that: “The possible difficulty, in cases like the present, arises because the provision which creates the offence is silent or ambiguous as to the state of mind required.”[62] 48. Hin Lin Yee sets out the principles to be adopted in construing such provisions, beginning with a presumption of mens rea, echoing Lord Bingham’s approach. 49. This was re-iterated in Kulemesin v HKSAR[63] where the Court had to construe section 72 of the Shipping and Port Control Ordinance,[64]and, referring back to Hin Lin Yee, Ribeiro PJ stated: “... where the offence-creating provisions are silent or ambiguous as to the mental requirements, the starting-point is that the statute must be construed adopting the presumption that it is incumbent on the prosecution to prove mens rea in relation to each element of the offence.”[65] 50. Similarly, in HKSAR v Choi Wai Lun,[66]the Court was engaged in construing section 122 of the Crimes Ordinance[67]which makes it an offence to commit an indecent assault on another person and goes on to provide that a person under 16 is legally incapable of consenting to the behaviour in question, which consent would otherwise prevent the act being an assault for the purposes of the section. The question was whether a person commits the offence if he engages in sexual conduct which is in fact consensual with a girl who is actually aged 13 when he honestly and reasonably believes her to be aged 16 or above. It was once again made clear that the issue was one of statutory construction: “The presumption of mens rea flows from recognition that it is a cardinal principle of our criminal law that mens rea, involving the intentional or knowing performance of prohibited conduct, is ordinarily an essential ingredient of guilt of a criminal offence. The law therefore assumes that in creating a statutory offence, the legislature does not intend to dispense with that basic principle unless the enactment does so expressly or by necessary implication. This has been said to reflect the principle of legality or to be a principle of statutory interpretation whereby any ambiguity in a penal statute is resolved in favour of the accused.”[68] 51. It is self-evident that these cases have no application in the present appeal. GNM is a common law offence. It is not created by any statutory provision which, because of its silence or ambiguity, needs to be construed to ascertain the mental element required. There is no basis for contending that the ingredients of GNM which have long been established at common law should somehow be modified to replace the element of gross negligence with a recklessness requirement through the application of a separate common law doctrine involving principles of statutory construction. The principles of common law regarding the essential elements of GNM on the one hand, and those laying down principles of statutory interpretation regarding mens rea requirements on the other, obviously operate in entirely separate spheres. 52. Sin Kam Wah[69] is distinguishable on a different basis. It was a case in which a police officer was convicted of misconduct in public office by accepting as a “general sweetener” sexual favours from prostitutes arranged and paid for by a person who exercised control over them contrary to section 130(1)(b) of the Crimes Ordinance[70]. It was not in dispute that it would be sufficient to prove recklessness on the part of the officer as to whether the person making the arrangements exercised such control. The question was: What must be proved to establish such recklessness? Lord Bingham addressed the same question in R v G and Another,[71]albeit in a statutory context whereas this Court in Sin Kam Wah was concerned with the common law offence of misconduct in public office. 53. Sir Anthony Mason NPJ endorsed Lord Bingham’s approach[72]and was concerned to correct the approach to “recklessness” that had previously been adopted in this jurisdiction[73]which involved accepting that recklessness could be proved by applying an objective test. The approach held to have been erroneous had been summarised as follows: “Recklessness on the part of the doer of an act presupposes that there is something in the circumstances that would have drawn the attention of an ordinary prudent individual to the possibility that his act was capable of causing the kind of serious harmful consequences that the section that created the offence was intended to prevent and that the risk of those harmful consequences occurring was not so slight that an ordinary prudent individual would feel justified in treating them as negligible. It is only when this is so that the doer of the act is acting ‘recklessly’ if, before doing the act, he either fails to give any thought to the possibility of there being such risk or, having recognized that there was such a risk, he nevertheless goes on to do it.”[74] 54. The Court in Sin Kam Wah was therefore concerned with elucidating the nature of “recklessness” where recklessness is an acknowledged element of the offence. It was not concerned with modifying the ingredients of GNM by replacing gross negligence with a requirement of recklessness as presently advocated on the appellant’s behalf. The Court found that the basis upon which R v G and Another decided to depart from the approach to “recklessness” enunciated in Caldwell and Lawrence was compelling and, on that footing, it overruled the Court of Appeal decisions in R v Chau Ming Cheong,[75]and R v Dung Shue Wah,[76]since they had followed Caldwell and Lawrence. Sin Kam Wah was not a manslaughter case and the Court had no occasion then to consider the elements of that offence. The Court was certainly not suggesting any change to the accepted basis of liability in cases of manslaughter by gross negligence. 55. We end by emphasising this. The common law offence of GNM operates in a sphere in which the courts have consistently referred to the value placed by the law on human life.[77] E. Conclusion 56. For the foregoing reasons, we would dismiss the appeal and answer the certified question as follows: In the offence of manslaughter by gross negligence, the element of gross negligence referred to in the last element of the offence as enunciated in R v Adomako [1995] 1 AC 171, is proved by application of the objective standard of reasonableness, there being no additional requirement that the prosecution must also prove that the defendant was subjectively aware of an obvious and serious risk of death to the deceased. Such awareness, if proved, is relevant to liability but not a necessary ingredient of the offence. Mr Justice Fok PJ: 57. I agree with the judgment of the Chief Justice and Mr Justice Ribeiro PJ. Mr Justice Cheung PJ: 58. I agree with the judgment of the Chief Justice and Mr Justice Ribeiro PJ. Lord Reed NPJ: 59. I agree with the judgment of the Chief Justice and Mr Justice Ribeiro PJ. Chief Justice Ma: 60. For the above reasons, the appeal is unanimously dismissed and the certified question answered as set out in para. 56 above. Mr Peter Duncan SC and Ms Deanna Law, instructed by Howse Williams, for the 3rd Defendant in HCCC 437/2015 (Appellant) Mr Andrew Bruce SC, on fiat, Mr Anthony Chau, ADPP (Ag.) and Ms Margaret Lau, SPP, of the Department of Justice, for the Respondent [1] HCCC 437/2015 (Reasons 14 June 2017). Barnes J gave a like ruling in HKSAR v Lai Chun Ho HCCC 213/2016, the two cases having then been consolidated for consideration by the Court of Appeal. The present appeal concerns only the appellant’s case HCCC 437/2015. [2] Pursuant to section 81(1) of the Criminal Procedure Ordinance (Cap 221). [3] Macrae VP, McWalters and Poon JJA [2018] HKCA 858 (16 November 2018). [4] Ma CJ, Fok and Cheung PJJ [2019] HKCFA 11 (22 March 2019). [5] [1995] 1 AC 171. [6] [2012] 2 HKLRD 639. [7] HCCC 437/2015, §8. Emphasis in the original. [8] (2005) 8 HKCFAR 192. [9] (1927) 19 Cr App R 8. [10] At pp 10-11. [11] At p 13. [12] At p 11. [13] Ibid. [14] [1937] AC 576. [15] At p 581. [16] At p 583. [17] Ibid. [18] At p 584. [19] At pp 584-585. [20] [1982] AC 341. [21] Contrary to section 1 of the Criminal Damage Act 1971. [22] [1982] AC 510. [23] Contrary to section 1 of the Road Traffic Act 1972 (as amended by the Criminal Law Act 1977, section 50(1)). [24] Although we shall mention them again in the context of Sin Kam Wah v HKSAR (2005) 8 HKCFAR 192, discussed below. [25] R v Prentice, R v Sullman, R v Adomako, R v Holloway [1994] QB 302. [26] At pp 322H-323B: “...without purporting to give an exhaustive definition, we consider proof of any of the following states of mind in the defendant may properly lead a jury to make a finding of gross negligence: (a) indifference to an obvious risk of injury to health; (b) actual foresight of the risk coupled with the determination nevertheless to run it; (c) an appreciation of the risk coupled with an intention to avoid it but also coupled with such a high degree of negligence in the attempted avoidance as the jury consider justifies conviction; (d) inattention or failure to advert to a serious risk which goes beyond ‘mere inadvertence’ in respect of an obvious and important matter which the defendant's duty demanded he should address.” [27] [1995] 1 AC 171. [28] At p 187B-E. [29] At p 187H. [30] All at p 187. [31] [2000] QB 796 at p 809. [32] [2000] IRLR 373 at §24. [33] [2005] 1 Cr App R 21. [34] At §52. [35] [1986] HKLR 648 (PC) at p 655. Emphasis supplied. [36] [2011] 1 HKLRD 1022 at §58. [37] [2016] 2 HKLRD 149. [38] R v Creighton [1993] 3 SCR 3. [39] The Queen v Lavender (2005) 222 CLR 67 and Patel v The Queen (2012) 247 CLR 531. [40] With Ms Deanna Law. [41] Rather than recklessness “in the ordinary connotation of that word” as used by Lord Atkin in Andrews: see §§12, 13, 17 and 20 above. [42] Adomako at p 183. [43] At §14.5. [44] Smith, Hogan, and Ormerod’s Criminal Law (15th edition) at p 594 (§14.2.6.3). [45] “Reconstructing Manslaughter on Defective Foundations” [1995] CLJ 14, at p 16. [46] The very high degree of negligence needs to be emphasised to the jury: see Smith, Hogan and Ormerod’s Criminal Law (15th edition) at pp 594-5 (§14.2.6.4). [47] [2005] 1 Cr App R 21 at §62. [48] Ibid at §63. [49] R v Bateman (1927) 19 Cr App R 8 at pp 11-12. [50] (2005) 222 CLR 67 at §127. [51] Of Gleeson CJ, McHugh, Gummow and Hayne JJ. [52] (2005) 222 CLR 67 at §127. [53] (1992) 174 CLR 313 at p 334 per Mason CJ, Toohey, Gaudron and McHugh JJ. [54] (2005) 222 CLR 67 at §128. [55] [2004] 1 AC 1034 at §32. [56] (2010) 13 HKCFAR 142. [57] (2013) 16 HKCFAR 195. [58] [2018] HKCFA 18. [59] (2005) 8 HKCFAR 192. [60] [2004] 1 AC 1034 at §28. [61] Cap 132. [62] (2010) 13 HKCFAR 142 at §40. [63] (2013) 16 HKCFAR 195. [64] Cap 313. It provides that "Any person who by any unlawful act, or in any manner whatsoever without reasonable excuse, endangers or causes to be endangered the safety of any person conveyed in or being in or upon any vessel or in the sea commits an offence.” [65] Kulemesin v HKSAR (2013) 16 HKCFAR 195 at §38. [66] [2018] HKCFA 18. [67] Cap 200. [68] [2018] HKCFA 18 at §14. [69] Sin Kam Wah v HKSAR (2005) 8 HKCFAR 192. [70] Cap 200. [71] [2004] 1 AC 1034. [72] Sin Kam Wah v HKSAR (2005) 8 HKCFAR 192 at §§41-44. [73] In R v Chau Ming Cheong [1983] 1 HKC 68 and R v Dung Shue Wah [1983] 2 HKC 30; following Commissioner of Police of The Metropolis v Caldwell [1982] AC 341 and R v Lawrence (Stephen) [1982] AC 510. [74] Sin Kam Wah v HKSAR (2005) 8 HKCFAR 192 at §41. [75] [1983] 1 HKC 68. [76] [1983] 2 HKC 30. [77] See, for example, The Queen v Lavender (2005) 222 CLR 67 at §60; Patel v The Queen (2012) 247 CLR 531 at §87; R v Creighton [1993] 3 SCR 3 at p 57.
Chief Justice Ma: 1. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 2. The doctrine of joint enterprise in criminal law as applied in Hong Kong has been based for many years on the Privy Council’s decision in Chan Wing Siu v R,[1] endorsed by this Court in Sze Kwan Lung v HKSAR.[2] The question in the present appeal is whether that doctrine should continue to be applied in the light of the decision of the United Kingdom Supreme Court in R v Jogee and R v Ruddock[3] disapproving Chan Wing Siu and, one might add, in the light of the contrary decision of the Australian High Court in Miller v The Queen.[4] A. The appellant’s conviction 3. After trial before M Poon J and a jury, the appellant was convicted of the murder of Kwok Hin Ching.[5] The appellant, who was a member of the Sun Yee On triad society in Tuen Mun, received an order from his triad boss, along with fellow gang members, to “chop” members of a rival faction. The appellant and other members of the gang therefore armed themselves with knives, water-pipes and torches and went in two cars in search of their rivals. When those in the appellant’s car heard that the others had found the intended victims and had set about attacking them, they immediately drove to the scene to help. 4. The deceased, a member of the rival faction, was attacked by four or five persons with knives. Whilst, having been injured, he was being helped to walk away by two others, a seven-seater vehicle ran him down and, when he was lying on the ground, deliberately ran over him again. The autopsy revealed that he died from multiple blunt force injuries and cut and stab wounds.[6] 5. When the appellant arrived at the scene, the deceased was lying on the ground after the attack. He and his party helped their fellow gang members who were facing a furious counter-attack by the rival faction to leave the scene. 6. There was no evidence that the appellant had been present during the attack on the deceased or that he had himself done any act causing injury or death to the deceased. His murder conviction, upheld by the Court of Appeal, was based on his active participation in a joint criminal enterprise, “namely an agreement with others to chop the followers of [the rival faction] with knives with the intent to cause such persons grievous bodily harm”.[7] The Court also held that the appellant’s conduct in giving effect to the joint enterprise constituted encouragement to the others in the gang.[8] 7. By their decision in Jogee, the UK Supreme Court held that the Privy Council in Chan Wing Siu had “taken a wrong turn”. It decided that the doctrine of joint criminal enterprise, especially that aspect of it referred to as “parasitic accessory liability”, should be abolished and replaced by traditional accessorial liability principles, assigning culpability on the basis of the secondary party’s intention to aid, abet, counsel or procure a principal offence. It is therefore necessary to examine the Jogee decision against the background of existing accessorial liability principles and the doctrine of joint criminal enterprise. B. Accessorial liability principles 8. At common law, a person is held to be an accessory to a crime if he or she aids, abets, counsels or procures the commission of an offence by another. This is reflected in section 89 of the Criminal Procedure Ordinance[9] which states: “Any person who aids, abets, counsels or procures the commission by another person of any offence shall be guilty of the like offence.” 9. The principal offender is the person who carries out the prohibited conduct or actus reus with the requisite mental state or mens rea constituting the main offence. Thus, in a murder case, the principal offender is the person who causes death to the victim with intent to cause death or to do grievous bodily harm. He or she was also known as the principal in the first degree. There may be more than one person acting together as joint principals. 10. A person who aids or abets the principal offence, sometimes referred to as an accessory at the fact (and in felony cases as the principal in the second degree), is one who is present and, by way of actus reus, renders assistance or encouragement to the principal in the commission of the offence.[10] The aider and abettor must provide active assistance or encouragement by words or action. Mere presence at the scene may in some cases be evidence of encouragement, but in itself is not enough to constitute aiding and abetting.[11] 11. The mens rea of aiding and abetting involves the accessory acting with knowledge of the essential matters constituting the offence and with the intention of assisting or encouraging the principal offender to do the things which constitute the offence.[12] 12. A person who counsels or procures an offence (referred to also as an accessory before the fact) is not present but provides assistance or encouragement prior to the commission of the offence.[13] Such a person performs the actus reus of “procuring” an offence “by setting out to see that it happens and taking the appropriate steps to produce that happening”.[14] A person “counsels” an offence by soliciting or encouraging its commission. 13. The actus reus of counselling or procuring therefore comprises assisting or encouraging commission of the principal offence by words or action prior to its occurrence and the mens rea is an intention to render the assistance or encouragement with a view to facilitating or bringing about commission of the offence. 14. Under traditional accessorial rules, the secondary party’s liability is derivative. Only if it is proved that the principal offence has been committed (even if the identity of the principal is not known) can a person’s liability as an accessory to that offence be established.[15] Otherwise the defendant may be guilty of an inchoate offence of conspiracy, incitement or attempt but not as an accessory. B.1 Stretching the boundaries of accessorial liability 15. The abovementioned rules are well adapted to clear-cut, static situations and place considerable evidential demands on the prosecution. To establish the accessory’s guilt, the prosecution must be able to prove the commission of the principal offence and the accessory’s performance of intentional acts capable of assisting or encouraging that offence, with knowledge of the essential facts constituting the offence and an intention to assist or encourage its commission. 16. There will of course be many cases where such requirements can readily be met. However, it will often be the case that the co-adventurers do not spell out their plans to each other. Such cases have given rise to difficulties regarding proof of the accessory’s intention to assist or encourage the principal. How is such intention to be proved if the accessory did not know what the principal was actually going to do? 17. R v Bainbridge,[16] provides an example of a blurring of the mens rea requirement in a counselling and procuring case. A bank was broken into using oxyacetylene cutting equipment which was traced back to the defendant who had bought it some six weeks earlier. The defendant testified that he had bought it on someone else’s behalf and admitted that he was suspicious that the equipment was “wanted ... for something illegal”, thinking “it was for breaking up stolen goods which [that person] had received”. He denied knowing that it was intended for breaking and entering premises. The English Court of Appeal held that the jury had correctly been directed that he should be convicted of counselling or procuring the bank robbery if they were satisfied that he had “knowledge that a crime of the type in question was intended”, meaning a crime involving “breaking and entering premises and the stealing of property from those premises”. The submission that “there was no evidence which was more consistent with the equipment being needed for a felony of this type than for any other kind of illegal venture” was robustly brushed aside. 18. Maxwell v DPP for Northern Ireland,[17] furnishes another example. Maxwell, who was a member of the Ulster Volunteer Force, drove a car acting as guide for fellow members of the UVF in a car following, to show them the way to a public house in a Catholic area where they launched a bombing attack. It was accepted that Maxwell knew that a terrorist operation was being conducted but argued on his behalf that, as he did not know what form the attack would take, he could not be found guilty of aiding and abetting the commission of a crime which he did not know was to be committed. Unsurprisingly, that argument was rejected, but it required the traditional mens rea rule on aiding and abetting to be enlarged by an exercise of judicial creativity. 19. In the House of Lords, Lord Scarman acknowledged that it was “not possible in the present case to declare that it is proved, beyond reasonable doubt, that the appellant knew a bomb attack upon the inn was intended by those whom he was assisting. It is not established, therefore, that he knew the particular type of crime intended.”[18] His Lordship commended Lowry CJ’s approach to establishing accessory liability in this kind of case, noting that it went beyond the decision in Bainbridge: “The court, however, refused to limit criminal responsibility by reference to knowledge by the accused of the type or class of crime intended by those whom he assisted. Instead, the court has formulated a principle which avoids the uncertainties and ambiguities of classification. The guilt of an accessory springs, according to the court's formulation: ‘... from the fact that he contemplates the commission of one (or more) of a number of crimes by the principal and he intentionally lends his assistance in order that such a crime will be committed’... ‘The relevant crime,’ the Lord Chief Justice continues, ... ‘must be within the contemplation of the accomplice, and only exceptionally would evidence be found to support the allegation that the accomplice had given the principal a completely blank cheque.’ The principle thus formulated has great merit. It directs attention to the state of mind of the accused — not what he ought to have in contemplation, but what he did have: it avoids definition and classification, while ensuring that a man will not be convicted of aiding and abetting any offence his principal may commit, but only one which is within his contemplation. He may have in contemplation only one offence, or several: and the several which he contemplates he may see as alternatives. An accessory who leaves it to his principal to choose is liable, provided always the choice is made from the range of offences from which the accessory contemplates the choice will be made. Although the court's formulation of the principle goes further than the earlier cases, it is a sound development of the law and in no way inconsistent with them. I accept it as good judge-made law in a field where there is no statute to offer guidance.” 20. Other frequently-encountered uncertainties have been less easily accommodated by enlarging traditional accessorial concepts. These arise especially in circumstances involving what one might call evidential and situational uncertainties. B.2 Evidential uncertainties 21. Evidential uncertainty as to who struck the fatal blow often arises in homicide cases involving more than one defendant. Thus, for instance, in R v Powell (Anthony),[19] three men went to purchase drugs from a drug dealer but one of them shot the dealer dead when he came to the door, the Crown being unable to prove which of them fired the gun. Similarly, in Hui Chi-ming v The Queen,[20] the deceased was attacked by a group of youths and one of them – the prosecution could not say which – struck the fatal blow using a metal pipe. Numerous other examples can be found.[21] 22. Such cases pose difficulties. If several persons were present and possibly involved but the principal offender cannot be identified, prima facie all should be acquitted. Thus, in R v Abbott,[22] Lord Goddard CJ stated: “If two people are jointly indicted for the commission of a crime and the evidence does not point to one rather than the other, and there is no evidence that they were acting in concert, the jury ought to return a verdict of not guilty against both because the prosecution have not proved the case.” 23. As his Lordship there indicated, the qualification is that a basis for liability may be found if those present “were acting in concert”. As we shall see, resort has been had to the doctrine of joint criminal enterprise to deal with such cases. But it has also been more problematically suggested that the accessorial liability rules can be relied on for the same purpose. Thus, the learned editors of Smith and Hogan, take as an example an attack on V by a group of individuals where V’s death results from a single stab wound, commenting as follows: “Unless the evidence can establish that a particular member of the group must have been responsible for inflicting the fatal wound, the prosecution may have no alternative but to allege that each member was either the principal offender or an accessory. Considerable difficulty would arise in such cases if the prosecution had to choose. If there is only one fatal stab wound, the Crown cannot simply allege that each defendant was the principal. As a matter of fact that is most unlikely to be true; only one person will have plunged the knife in. Equally, the Crown would face difficulty if they alleged that each defendant was an accessory; unless the jury could be sure when considering the case against a particular defendant that he was not the principal, he would have to be acquitted. In view of these forensic difficulties, the pragmatic solution of being able to charge D with being either an accessory or a principal is understandable.” [23] 24. In Jogee,[24] a similar approach is suggested in the joint judgment of Lord Hughes and Lord Toulson JJSC: “In some cases the prosecution may not be able to prove whether a defendant was principal or accessory, but it is sufficient to be able to prove that he participated in the crime in one way or another.” 25. It should, however, be emphasised that that “pragmatic solution” is not available in every case where the prosecution cannot prove who acted as principal. It can only apply, on accessorial liability principles, where there is sufficient evidence as against the relevant defendant to prove that he or she must at least have acted as an accessory, ie, had aided, abetted, counselled or procured the offence with the requisite intent. 26. For example, in R v Swindall & Osborne,[25] a man was run down and killed as a result of two horse and cart drivers racing each other. Each was convicted of manslaughter, Pollock CB holding that it did not matter which cart had run the victim over since the evidence showed that each defendant had encouraged the other to drive dangerously and so that they were each at least guilty as an accessory. 27. The courts have sometimes relied on inaction when under a duty to act as evidence of such aiding and abetting. Thus, in Du Cros v Lambourne,[26] the defendant was charged with driving a car at a speed dangerous to the public but claimed that he was not the driver but in the passenger seat next to the person doing the driving. The Court of Appeal held that that was sufficient evidence of his aiding and abetting since it was his car and “he could, and ought to, have prevented her from driving at this excessive and dangerous speed, but ... he allowed her to do so and did not interfere in any way.” Similarly, in R v Forman and Ford,[27] where it was unclear which of two police officers had assaulted the victim by striking him on the back of the head, the submission of no case to answer was rejected on the footing that it was open to the jury to find that each was at least guilty of aiding and abetting since the officer who had failed in his duty to intervene to prevent the other’s commission of the crime could be found thereby to have given encouragement to the principal offender. 28. But where the identity of the principal cannot be proved and there is insufficient evidence of the defendants’ conduct to found conviction on the basis that they must at least have acted as accessories, the limits of the accessorial liability rules and the role to be played by the joint criminal enterprise doctrine become apparent. Brown v The State, to which I shall return,[28] illustrates this. B.3 Situational uncertainties 29. Where the parties agree upon a planned course of criminal conduct, experience shows that uncertainties inevitably exist as to what may happen in the situation actually faced by the co-adventurers when implementing the plan. 30. As Stephen J pointed out in Johns v The Queen,[29] one or more of the co-adventurers may commit an unplanned offence “as a reaction to whatever response is made by the victim, or by others who attempt to frustrate the venture, upon suddenly being confronted by the criminals.” In cases involving multiple offenders, such as gang fights, as Lord Steyn noted in R v Powell (Anthony):[30] “Experience has shown that joint criminal enterprises only too readily escalate into the commission of greater offences.” Ventures planned as robberies or burglaries or as an affray between gangs of youths may turn into murder cases. 31. It is difficult to deal with unplanned contingencies within the framework of traditional accessorial liability concepts. Their application may be straightforward in relation to the original object of the joint enterprise such as robbery or burglary. But it is hard for the prosecution to prove that an accomplice has performed intentional acts to assist or encourage the principal in the commission of the further offence of say, murder, when it is an unplanned offence committed as a spontaneous reaction to the exigencies of the situation. A workable principle is therefore needed for determining accomplice liability in such cases. C. A distinct doctrine of joint criminal enterprise 32. The common law’s approach has been to evolve the doctrine of joint criminal enterprise, also referred to as the doctrine of “common intention”, of “common purpose”, of “acting in concert” and of “common design”. 33. The doctrine of joint criminal enterprise is distinct from the traditional rules on accessorial liability, although there are situations where those rules may overlap. It is important to note – since consequences flow from this – that under the doctrine of joint criminal enterprise, liability is not derivative: it is not dependent on proving that one person (the principal) committed the main offence and that another (the accomplice) assisted or encouraged its commission. Liability is independently based on each defendant’s participation in a joint criminal enterprise with the requisite mental state to constitute the offence relevant to the defendant in question. 34. Sir Robin Cooke noted the distinction between the doctrines in Chan Wing-siu v The Queen,[31] contrasting accessorial liability by “aiding, abetting, counselling, inciting or procuring” the primary offence with complicity based on participating in a “common unlawful enterprise” in which a crime is “foreseen as a possible incident of the common unlawful enterprise”. 35. In McAuliffe v The Queen,[32] the High Court of Australia explained that the doctrine of joint criminal enterprise provides an additional means of establishing complicity alongside the rules of accessorial liability: “... the complicity of a secondary party may also be established by reason of a common purpose shared with the principal offender or with that offender and others. Such a common purpose arises where a person reaches an understanding or arrangement amounting to an agreement between that person and another or others that they will commit a crime. The understanding or arrangement need not be express and may be inferred from all the circumstances. If one or other of the parties to the understanding or arrangement does, or they do between them, in accordance with the continuing understanding or arrangement, all those things which are necessary to constitute the crime, they are all equally guilty of the crime regardless of the part played by each in its commission. Not only that, but each of the parties to the arrangement or understanding is guilty of any other crime falling within the scope of the common purpose which is committed in carrying out that purpose.” 36. And in Clayton v The Queen, citing Professor A P Simester,[33] the High Court[34] highlighted the different factual bases upon which the respective doctrines rest: “... liability as an aider and abettor is grounded in the secondary party's contribution to another's crime. By contrast, in joint enterprise cases, the wrong lies in the mutual embarkation on a crime, and the participants are liable for what they foresee as the possible results of that venture. In some cases, the accused may be guilty both as an aider and abettor, and as participant in a joint criminal enterprise. That factual intersection of the two different sets of principles does not deny their separate utility.” 37. In R v Stewart and Schofield,[35] Hobhouse LJ pointed out that one consequence of the distinction, flowing from the independent rather than derivative liability of participants in a joint criminal enterprise, is that under the joint criminal enterprise doctrine, one defendant may be guilty of manslaughter while a co-defendant is convicted of murder in the same case: “The allegation that a defendant took part in the execution of a crime as a joint enterprise is not the same as an allegation that he aided, abetted, counselled or procured the commission of that crime. A person who is a mere aider or abettor, etc, is truly a secondary party to the commission of whatever crime it is that the principal has committed although he may be charged as a principal. If the principal has committed the crime of murder, the liability of the secondary party can only be a liability for aiding and abetting murder. In contrast, where the allegation is joint enterprise, the allegation is that one defendant participated in the criminal act of another. This is a different principle. It renders each of the parties to a joint enterprise criminally liable for the acts done in the course of carrying out that joint enterprise. Where the criminal liability of any given defendant depends upon the further proof that he had a certain state of mind, that state of mind must be proved against that defendant. Even though several defendants may, as a result of having engaged in a joint enterprise, be each criminally responsible for the criminal act of one of those defendants done in the course of carrying out the joint enterprise, their individual criminal responsibility will, in such a case, depend upon what individual state of mind or intention has been proved against them. Thus, each may be a party to the unlawful act which caused the victim's death. But one may have had the intent either to kill him or to cause him serious harm and be guilty of murder, whereas another may not have had that intent and may be guilty only of manslaughter.” 38. The difference between the doctrines was also recognized by this Court in Sze Kwan Lung v HKSAR,[36] where the consequence of the independent liability of each participant in a joint criminal enterprise was that a verdict of murder was available against a participant even where the actual killer was acquitted or was convicted of manslaughter. Bokhary PJ stated: “The Court of Appeal appears to have misapprehended the basis of the prosecution's case and the defence submission in this context. The case was throughout fought on the basis of the doctrine of joint enterprise. However, the Court of Appeal's reasoning was appropriate only to a conviction based upon the common law principles of accessorial liability whereby the person charged with aiding, abetting, counselling or procuring an offence can only be convicted if the principal offender, charged at the same trial, is found guilty of the relevant principal offence. As further discussed below, a participant in a joint enterprise can be convicted of murder even though the actual killer is acquitted outright or convicted of the lesser offence of manslaughter only.[37] ... While this is not the occasion for giving a definitive decision on the entirety of the doctrine of joint enterprise, it is my view, as indicated above, that the doctrine is distinct from the common law principles of aiding, abetting, counselling or procuring. Each participant is criminally liable for all the acts done in pursuance of the joint enterprise. And whether or not he intended it, he will be criminally liable for any such act if it was of a type which he foresaw as a possible incident of the execution of the joint enterprise and he participated in the joint enterprise with such foresight.”[38] 39. There are accordingly compelling reasons for differentiating between the doctrines. However, eminent contrary views exist.[39] For instance, in Smith & Hogan,[40] the learned editors argue against the separate existence of a joint criminal enterprise doctrine in these terms: “If D and P set out together to rape (or to murder), how does D ‘participate’ in P’s act of penile penetration of V (or P’s shooting of V) except by assisting him or encouraging him – that is, aiding, abetting, counselling or procuring him – to do the act? It is submitted that there is no other way. The only peculiarity of joint enterprise cases is that, once D has been shown to be aiding, abetting, counselling or procuring P in the commission of crime A, there is no need to look further for evidence of acts of assisting and encouraging in relation to crime B.” 40. With respect, that is an unconvincing objection. In the first place, accomplice liability, whether under the joint enterprise or accessorial liability doctrines, is not dependent on the defendants sharing physical performance of the actus reus. The essence of the joint criminal enterprise principle involves the accomplice’s culpability for the criminal act of another person, of a co-adventurer – not his own act – falling within the agreed scope of the joint enterprise or foreseen as a possible incident thereof. Secondly, the absence of any need to look for acts of assistance or encouragement to establish crime B acknowledged in the second part of the quote, makes the very point that the doctrine is not, so far as crime B goes, based on traditional accessorial liability principles. C.1 Basic joint criminal enterprise 41. The common law has developed two forms of joint criminal enterprise which may be referred to as the basic and extended forms. The basic version involves the co-adventurers simply agreeing to carry out and then executing a planned crime. As it was put in the joint judgment of French CJ, Kiefel, Bell, Nettle and Gordon JJ, in Miller v The Queen:[41] “If the crime that is the object of the enterprise is committed while the agreement remains on foot, all the parties to the agreement are equally guilty, regardless of the part that each has played in the conduct that constitutes the actus reus.” 42. Since participation in the joint criminal enterprise makes all participants guilty whoever the actual perpetrator may have been, this doctrine is of particular value in murder cases where there is evidential uncertainty as to who struck the fatal blow. 43. Brown v The State[42]provides an example. The two victims were seen being marched off by the two defendants and four gunshots were later heard. No one saw what happened but the victims were later found dead, shot in the head. The evidence strongly pointed to the defendants as the perpetrators but there was no way to tell who had actually fired the shots. Traditional accessorial liability principles therefore could not be applied with any confidence. Unlike cases like R v Swindall & Osborne,[43] there was no evidential basis for suggesting that the two defendants must at least have aided and abetted the murder. The defendants’ guilt was established applying what Lord Hoffmann called “the simplest form of joint enterprise” (or “the plain vanilla version of joint enterprise”).[44] His Lordship explained that (in murder cases) this basic version applies “when two or more people plan to murder someone and do so. If both participated in carrying out the plan, both are liable. It does not matter who actually inflicted the fatal injury”. It was a simple case and the execution-style shootings strongly suggested intentional killings. The trial judge did not have to concern himself with possible liability for manslaughter and it was held sufficient for him to instruct the jury that they had to be satisfied that there was indeed a common intention to murder.[45] 44. In some cases, the facts will be such that guilt can be established either under traditional accessorial principles or the basic joint criminal enterprise doctrine. Thus, in Ramnath Mohan v The Queen,[46] the victim was attacked by the two appellants wielding “cutlasses” and died from a particularly serious leg wound. The question arose “whether each of the appellants [could] be held responsible for the leg wound, when it may have been inflicted by the other of them.” Lord Pearson, in the Privy Council, upheld the murder conviction on the basis of joint criminal enterprise stating: “... both the appellants were armed with cutlasses, both were attacking [the victim], and both struck him. It is impossible on the facts of this case to contend that the fatal blow was outside the scope of the common intention. The two appellants were attacking the same man at the same time with similar weapons and with the common intention that he should suffer grievous bodily harm.” His Lordship also held that each of the appellants “was present, and aiding and abetting the other of them in the wounding of [the victim]”. As the High Court of Australia pointed out in Clayton,[47] “[the] factual intersection of the two different sets of principles does not deny their separate utility”. C.2 Extended joint criminal enterprise 45. The doctrine of extended joint criminal enterprise was developed to determine complicity when criminal co-adventurers react to situational uncertainties. In its modern history,[48] the decision of the Australian High Court in Johns v The Queen, has been influential. Stephen J explained the doctrine in the following terms: “The criminal responsibility here under discussion is not that relating to the crime which is the prime object of a criminal venture. ... [If], in carrying out that contemplated crime, another crime is committed there arises the question of the complicity of those not directly engaged in its commission. The concept of common purpose provides the measure of complicity, the scope of that common purpose determining whether the accessory before the fact to the original crime is also to share in complicity in the other crime. If the scope of the purpose common both to the principal offender and to the accessory is found to include the other crime, the accessory will be fixed with criminal responsibility for it.” [49] 46. While his Honour was speaking of the liability of an accessory before the fact, the principle plainly applies equally to aiders and abettors present at the scene. Stephen J went on to hold that the scope of the common purpose included what the participants “regarded as possibly involved in the venture”, arguing powerfully against limiting its scope to what was regarded as probable. The criterion of “probability” was “singularly inappropriate” since the wide range of possible spontaneous actions taken by victims and third parties when confronted by criminals would make it difficult to characterise any reaction to actions of such unpredictability as probable. Moreover, a standard of probability is not an appropriate standard for judging the co-adventurer’s blameworthiness: “... it would mean that an accessory before the fact to, say, armed robbery, who well knows that the robber is armed with a deadly weapon and is ready to use it on his victim if the need arises, will bear no criminal responsibility for the killing which in fact ensues so long as his state of mind was that, on balance, he thought it rather less likely than not that the occasion for the killing would arise. Yet his complicity seems clear enough; the killing was within the contemplation of the parties, who contemplated ‘a substantial risk’ that the killing would occur...”[50] 47. In their joint judgment in Johns v The Queen, Mason, Murphy and Wilson JJ explained that “the doctrine [of common purpose or common design] looks to the scope of the common purpose or design as the gravamen of complicity and criminal liability.”[51] After a survey of the authorities, their Honours endorsed Street CJ’s formulation of the extended joint criminal enterprise doctrine as follows: “‘... an accessory before the fact bears, as does a principal in the second degree, a criminal liability for an act which was within the contemplation of both himself and the principal in the first degree as an act which might be done in the course of carrying out the primary criminal intention - an act contemplated as a possible incident of the originally planned particular venture’. Such an act is one which falls within the parties' own purpose and design precisely because it is within their contemplation and is foreseen as a possible incident of the execution of their planned enterprise.”[52] 48. The requirement is therefore for the defendant to have “contemplated” commission of the relevant crime as possible – as an act which “might” be done – by one of the other participants in the course of carrying out the primary criminal enterprise. Like Stephen J, their Honours rejected probability as a criterion since it unacceptably “stakes everything on the probability or improbability of an act, admittedly contemplated, occurring”. [53] 49. In Chan Wing Siu,[54] three men armed with knives forced their way into the deceased’s flat. The defendants did not testify but statements given by them indicated that the third defendant (Tse) had asked the other two to help him collect a debt from the deceased and had armed them with knives for that purpose. The evidence sufficiently established that two of them had “joined in an attack on the deceased with at least the intention of inflicting grievous bodily harm” but the evidence in relation to Tse was more equivocal, it being suggested that he had run away when the deceased put up a strong resistance and inflicted injuries on his two attackers. This led the trial judge to direct the jury along the lines approved in Johns v The Queen to the effect that the accused would be guilty of murder “if proved to have had in contemplation that a knife might be used on the occasion by one of his co-adventurers with the intention of inflicting serious bodily injury.”[55] This was criticised on appeal on the footing that “such an accused does at least have to be proved to have foreseen that, if such a contingency eventuated, it was more probable than not that one of his companions would use a weapon with intent to kill or cause grievous bodily harm.”[56] 50. Having referred to the principles of accessorial liability in cases where typically “the same or the same type of offence is actually intended by all the parties acting in concert”, Sir Robin Cooke noted that the case before the Privy Council had to “depend rather on the wider principle whereby a secondary party is criminally liable for acts by the primary offender of a type which the former foresees but does not necessarily intend.”[57] It was, in other words, an extended joint criminal enterprise case. His Lordship elaborated as follows: “That there is such a principle is not in doubt. It turns on contemplation or, putting the same idea in other words, authorisation, which may be express but is more usually implied. It meets the case of a crime foreseen as a possible incident of the common unlawful enterprise. The criminal culpability lies in participating in the venture with that foresight.”[58] 51. After reviewing the authorities,[59] Sir Robin Cooke held in favour of the foresight of possibility and rejected a criterion of probability, holding: “In agreement with the courts in Hong Kong, Australia and New Zealand, their Lordships regard as wholly unacceptable any argument that would propose, as any part of the criteria of the guilt of an accomplice, whether on considering in advance the possibility of a crime of the kind in the event actually committed by his co-adventurers he thought that it was more than an even risk. ... What public policy requires was rightly identified in the submissions for the Crown. Where a man lends himself to a criminal enterprise knowing that potentially murderous weapons are to be carried, and in the event they are in fact used by his partner with an intent sufficient for murder, he should not escape the consequences by reliance upon a nuance of prior assessment, only too likely to have been optimistic. On the other hand, if it was not even contemplated by the particular accused that serious bodily harm would be intentionally inflicted, he is not a party to murder.”[60] 52. His Lordship approved the Judge’s direction that if Tse had “thought that the knives would be used to do no more than frighten the occupants, then he would be guilty not of murder but of manslaughter”[61] and also held that if a jury thought there was a reasonable possibility that “a risk may have occurred to an accused’s mind - fleetingly or even causing him some deliberation - but may genuinely have been dismissed by him as altogether negligible”, he should not be held complicit to the murder or wounding.[62] 53. Until the Jogee decision, extended joint criminal enterprise principles consistent with the doctrine as expounded in Chan Wing Siu have been applied in numerous cases and in the highest courts of Hong Kong,[63] England and Wales[64] and Australia.[65] 54. In the House of Lords in R v Powell (Anthony),[66] Lord Hutton summarised the principle as follows: “... it is sufficient to found a conviction for murder for a secondary party to have realised that in the course of the joint enterprise the primary party might kill with intent to do so or with intent to cause grievous bodily harm.” 55. Having endorsed the rule that a defendant who did not foresee the principal’s act as a possibility falls outside the scope of the joint enterprise, his Lordship added: “However ... if the weapon used by the primary party is different to, but as dangerous as, the weapon which the secondary party contemplated he might use, the secondary party should not escape liability for murder because of the difference in the weapon ...”[67] 56. And, agreeing with Chan Wing Siu, Lord Hutton held that: “... the secondary party is subject to criminal liability if he contemplated the act causing the death as a possible incident of the joint venture, unless the risk was so remote that the jury take the view that the secondary party genuinely dismissed it as altogether negligible.”[68] D. What Jogee decided 57. The UK Supreme Court in Jogee decided that Chan Wing Siu was wrongly decided.[69] It held that the Privy Council had (on the basis of an incomplete or faulty appreciation of the authorities) “taken a wrong turn” by adopting the doctrine of extended joint criminal enterprise, which it referred to as involving “parasitic accessory liability”, instead of basing secondary liability solely on traditional accessorial liability principles. The extended doctrine, by founding liability on mere foresight that a co-adventurer might commit the further offence, “over-extends” secondary liability in a manner savouring of constructive crime. It also gives rise to an anomaly by adopting the lower mens rea threshold of foresight for the secondary party’s liability as opposed to that of intention for the principal offender. Jogee therefore decided that joint criminal enterprise, both basic and extended, should be abolished and secondary liability established solely on the basis of an intention to aid, abet, counsel or procure the principal offence. Foresight is only to be relevant as evidence of such intention and not as a basis for establishing complicity. The rules permitting manslaughter and murder convictions to be reached for different offenders involved in the same violent attack should be retained. As to cases of evidential uncertainty, where the prosecution may not be able to prove that a defendant was principal or accessory, it suffices to prove that he participated in the crime “in one way or another”.[70] And in cases of what I have called “situational uncertainty” Jogee proposes adoption of liability on the basis of “conditional intent”. 58. I respectfully do not agree with the decision in Jogee for three main reasons. First, I do not share the view of the secondary party’s culpability there expressed. Secondly, confining the secondary party’s liability to liability under the traditional accessorial liability rules and abolishing the joint criminal enterprise doctrine in my view creates a serious gap in the law of complicity in crime. And thirdly, I consider that Jogee’s introduction of the concept of “conditional intent” in its restatement of the law gives rise to significant conceptual and practical problems. I am respectfully largely in agreement with the views, differing from Jogee, expressed by the majority of the High Court of Australia in Miller v The Queen.[71] E. The culpability of the secondary party 59. At the heart of Jogee is this passage[72] from the joint judgment of Lord Toulson and Lord Hughes JJSC, with whom the other members of the Court agreed: “...in the common law foresight of what might happen is ordinarily no more than evidence from which a jury can infer the presence of a requisite intention. It may be strong evidence, but its adoption as a test for the mental element for murder in the case of a secondary party is a serious and anomalous departure from the basic rule, which results in over-extension of the law of murder and reduction of the law of manslaughter. Murder already has a relatively low mens rea threshold, because it includes an intention to cause serious injury, without intent to kill or to cause risk to life. The Chan Wing-Siu principle extends liability for murder to a secondary party on the basis of a still lesser degree of culpability, namely foresight only of the possibility that the principal may commit murder but without there being any need for intention to assist him to do so. It savours, as Professor Smith suggested, of constructive crime.” 60. The central proposition is therefore that it is unjust to base the culpability of a secondary party on anything other than an intention to assist or encourage the principal offender in the commission of the offence. Foresight is deemed unacceptable as a basis for liability and is to be regarded at most as evidence of the requisite intention.[73] With respect, I do not agree. 61. An assessment of the secondary party’s culpability is skewed by characterising it as merely the culpability of a person derivatively liable as an accessory and thus somehow less blameworthy than the principal offender. It is on this premise that Chan Wing Siu is said to produce an “anomalous” rule setting a lower threshold for the accessory’s, as opposed to the principal’s, liability. But even viewed solely in terms of the traditional accessorial liability principles, it is by no means clear that the accessory should necessarily be regarded as having a lesser culpability. The person who procures commission of a murder by a contract killer is at least as culpable as the killer himself. Citing Glanville Williams, Stephen J in Johns v The Queen[74] pointed out that Lady Macbeth was surely more blameworthy than was her husband. 62. As the authorities cited above show,[75] the liability of a party to a joint criminal enterprise is not derivative but arises independently by virtue of his or her participation in the joint criminal enterprise. So viewed, there is no a priori reason for regarding different mens rea requirements considered appropriate to different individuals’ participation in the joint enterprise as anomalous. 63. In basic (or “plain vanilla”) cases where the co-adventurers agree to carry out and then implement a planned crime, there can hardly be any doubt as to the culpability of all the participants, whichever one of them actually carried out the actus reus. Their culpability is little different from that of joint principals. Jogee’s holding that where the prosecution cannot prove whether a defendant was principal or accessory, it is “sufficient to be able to prove that he participated in the crime in one way or another” indicates acceptance of culpability in such cases. 64. In an extended joint criminal enterprise case, the wrongdoing of the participants “lies in the mutual embarkation on a crime with the awareness that the incidental crime may be committed in executing their agreement.”[76] Such a person agrees to carry out a criminal venture with others, foreseeing that one or more of them might, in certain contingencies, commit some further, more serious offence – where that further offence is murder, that one of them might kill someone with intent to kill or to cause grievous bodily harm – and proceeds with the venture nonetheless. The foresight required under this rule is not open-ended. It is foresight of the commission of the actual further offence as a possible incident of the execution of their planned enterprise. And it is foresight of a real possibility of the offence being committed and excludes a risk fleetingly foreseen and dismissed as negligible.[77] As the joint judgment in Miller emphasises: “It is to be appreciated that in the paradigm case of murder, the secondary party's foresight is not that in executing the agreed criminal enterprise a person may die or suffer grievous bodily harm – it is that in executing the agreed criminal enterprise a party to it may commit murder. And with that knowledge, the secondary party must continue to participate in the agreed criminal enterprise.”[78] 65. A party who is proved to have satisfied the aforesaid conditions deserves to be regarded as gravely culpable. I find it impossible to regard liability so imposed as verging on the constructive. 66. In Gillard v The Queen,[79]Gleeson CJ and Callinan J took the view that an offender who foresaw as a possibility that a co-adventurer would fire a loaded gun at the victim and continued to participate with that foresight, should be regarded as “intentionally assisting in the commission of culpable homicide”. 67. Another way in which the secondary party’s culpability has persuasively been put has been to regard that person as tacitly agreeing to or “authorising” the crime by the actual perpetrator which he foresaw as a possible incident of a joint criminal enterprise. Thus, in R v Anderson and Morris,[80] in an often-cited passage, Lord Parker CJ approved Mr Geoffrey Lane QC’s formulation of a legal principle setting the boundaries of the joint enterprise by reference to tacit agreement or authorisation: “... where two persons embark on a joint enterprise, each is liable for the acts done in pursuance of that joint enterprise, [and] that includes liability for unusual consequences if they arise from the execution of the agreed joint enterprise but (and this is the crux of the matter) ..., if one of the adventurers goes beyond what has been tacitly agreed as part of the common enterprise, his co-adventurer is not liable for the consequences of that unauthorised act. ... it is for the jury in every case to decide whether what was done was part of the joint enterprise, or went beyond it and was in fact an act unauthorised by that joint enterprise.” 68. It was in that sense that Sir Robin Cooke in Chan Wing Siu,[81] speaking of the “wider principle whereby a secondary party is criminally liable for acts by the primary offender of a type which the former foresees but does not necessarily intend”, stated that such principle : “... turns on contemplation or, putting the same idea in other words, authorisation, which may be express but is more usually implied. It meets the case of a crime foreseen as a possible incident of the common unlawful enterprise. The criminal culpability lies in participating in the venture with that foresight.” 69. In Miller v The Queen,Keane J pointed out that: “... each participant in a joint criminal enterprise is not merely an accessory to a crime committed by someone else. Where parties commit to a joint criminal enterprise, each participant becomes, by reason of that commitment, both the principal and the agent of the other participants: for the purposes of that enterprise they are partners in crime. Each participant also necessarily authorises those acts which he or she foresees as possible incidents of carrying out the enterprise in which he or she has agreed, and continues, to participate.”[82] 70. Culpability of the secondary party may therefore be seen to be based on implied authorisation of the actual perpetrator to act “as the instrument of the other participants to deal with the foreseen exigencies of carrying their enterprise into effect.”[83] F. Abolition of the joint criminal enterprise doctrine 71. In my view, Jogee’s abolition of the joint criminal enterprise doctrine, confining secondary liability to cases where the prosecution can prove intentional assistance or encouragement to a principal offender, deprives the law of a valuable principle for dealing with dynamic situations involving evidential and situational uncertainties which traditional accessorial liability rules are ill-adapted to addressing. 72. The need for an extended joint criminal enterprise doctrine was recognized by Lord Steyn in R v Powell (Anthony):[84] “If the law required proof of the specific intention on the part of a secondary party, the utility of the accessory principle would be gravely undermined. It is just that a secondary party who foresees that the primary offender might kill with the intent sufficient for murder, and assists and encourages the primary offender in the criminal enterprise on this basis, should be guilty of murder. He ought to be criminally liable for harm which he foresaw and which in fact resulted from the crime he assisted and encouraged. But it would in practice almost invariably be impossible for a jury to say that the secondary party wanted death to be caused or that he regarded it as virtually certain. In the real world proof of an intention sufficient for murder would be well nigh impossible in the vast majority of joint enterprise cases.”[85] 73. As previously noted and as explained by Hobhouse LJ, in R v Stewart and Schofield,[86] the availability of differing verdicts of manslaughter and murder in respect of two co-adventurers who had engaged in the same violent attack is explicable on the basis of the joint criminal enterprise doctrine. It is unclear how, after confining liability to traditional accessorial liability principles, Jogee accommodates such availability. If each co-adventurer’s liability is only derivative and the principal offender is convicted of murder, it is hard to see the basis for secondary parties to be independently convicted of manslaughter. 74. Similarly, if Jogee is applied,flexibility based on the joint criminal enterprise doctrine is lost in cases like Sze Kwan Lung v HKSAR,[87] where the liability of each participant in the criminal venture is independently assessed so that a verdict of murder against a participant is available notwithstanding the actual killer’s acquittal or conviction of the lesser offence of manslaughter. G. Jogee’s concept of “conditional intent” 75. In its “Restatement of the principles”,[88] the Jogee judgment introduces the concept of “conditional intent” in the following three paragraphs which ought to be set out in full: “92. In cases of secondary liability arising out of a prior joint criminal venture, it will also often be necessary to draw the jury's attention to the fact that the intention to assist, and indeed the intention that the crime should be committed, may be conditional. The bank robbers who attack the bank when one or more of them is armed no doubt hope that it will not be necessary to use the guns, but it may be a perfectly proper inference that all were intending that if they met resistance the weapons should be used with the intent to do grievous bodily harm at least. The group of young men which faces down a rival group may hope that the rivals will slink quietly away, but it may well be a perfectly proper inference that all were intending that if resistance were to be met, grievous bodily harm at least should be done. 93. Juries frequently have to decide questions of intent (including conditional intent) by a process of inference from the facts and circumstances proved. The same applies when the question is whether D2, who joined with others in a venture to commit crime A, shared a common purpose or common intent (the two are the same) which included, if things came to it, the commission of crime B, the offence or type of offence with which he is charged, and which was physically committed by D1. A time honoured way of inviting a jury to consider such a question is to ask the jury whether they are sure that D1's act was within the scope of the joint venture, that is, whether D2 expressly or tacitly agreed to a plan which included D1 going as far as he did, and committing crime B, if the occasion arose. 94. If the jury is satisfied that there was an agreed common purpose to commit crime A, and if it is satisfied also that D2 must have foreseen that, in the course of committing crime A, D1 might well commit crime B, it may in appropriate cases be justified in drawing the conclusion that D2 had the necessary conditional intent that crime B should be committed, if the occasion arose; or in other words that it was within the scope of the plan to which D2 gave his assent and intentional support. But that will be a question of fact for the jury in all the circumstances.” 76. These paragraphs have no doubt introduced the concept of conditional intent in order to deal with situational uncertainties. However, they have done so in a highly problematical way. In the first place, given that it is central to Jogee that the doctrine of joint criminal enterprise is abolished in favour of traditional accessorial liability, it is strikingly odd that the three paragraphs explain the conditional intent concept in the context of joint criminal enterprise (referring to acts pursuant to “prior joint criminal ventures”, “common purpose” and “common intent”) and give no indication of how the concept is meant to fit in with the actus reus and mens rea of traditional accessorial offences. 77. Secondly, the treatment of conditional intent in the three paragraphs leaves one wondering whether there is any practical difference between that concept and the principle of assigning liability on the basis of foresight of the possible commission of an offence in an extended joint criminal enterprise situation. Thus, paragraph 92 refers to a “prior joint criminal venture” in the pursuit of which it might prove necessary “if resistance were to be met” to do grievous bodily harm. Paragraph 93 discusses “a common purpose or common intent” and how the “scope of the joint venture” (that is, “whether D2 expressly or tacitly agreed to a plan which included D1 going as far as he did, and committing crime B, if the occasion arose”) determines whether a co-adventurer is to be treated as complicit. Paragraph 94, explicitly conditions liability on the jury being satisfied “that there was an agreed common purpose to commit crime A” and “that D2 must have foreseen that, in the course of committing crime A, D1 might well commit crime B”[89] as justifying an inference that “D2 had the necessary conditional intent that crime B should be committed, if the occasion arose”, adding “in other words that it was within the scope of the plan to which D2 gave his assent and intentional support”. Secondary liability is therefore not here dependent on proof of intentional acts of aiding, abetting, counselling or procuring but rather on participation in a joint criminal enterprise envisaging commission of a further offence, crime B, in certain contingencies. 78. The only suggested difference between conditional intent so explained and the foresight principle in the extended joint criminal enterprise doctrine appears to involve Jogee’s proposition that foresight is only evidence upon which intention, including conditional intent, may be inferred. That gives rise to a third difficulty. Foresight and conditional intent are both mental states and can only be found to exist by drawing inferences from the conduct of the participant in question. The jury have the task of deciding whether the relevant inference can be drawn beyond reasonable doubt, or, as it is usually put, whether the inference is irresistible.[90] If the jury were to decide that the irresistible inference is that the defendant foresaw that one of their number might, if necessary, commit the further offence B, that would be the inferential conclusion reached. It would not be “evidence” upon which a further inference as to the existence of conditional intent might be drawn. The proposition that a finding of foresight is only evidence of conditional intent is therefore difficult to follow. 79. It is possible that the proposition intended by Jogee is not that one should try to lay one inference on top of another, but that liability can only be established under Jogee if the irresistible inference to be drawn is that the participant harboured a conditional intent and not just foresight of the possible commission of crime B. On this reading, proof of full blown intention is required, albeit conditional on the happening of a certain contingency. In this sense, intention may be taken to involve a person acting with foresight of a particular consequence, desiring to cause it[91] or foreseeing that consequence as a virtually certain result of his act even though it is not the purpose of his act.[92] This gives rise to a fourth difficulty. On this understanding of “conditional intent”, the prosecution would be required to prove beyond reasonable doubt that the participant not only foresaw the possible commission of the further offence in the course of the joint enterprise but intended, that is, desired or believed as a virtual certainty, that it should contingently occur. This would impose an unjustifiably high burden on the prosecution and inappropriately exculpate participants who commit themselves to a joint criminal enterprise fully foreseeing – but not desiring or viewing as virtually certain – the commission of the further offence as an incident of the joint criminal venture. Such situations are not at all uncommon and prompted Sir Robin Cooke to adopt his “wider principle” assigning liability to a secondary party “for acts by the primary offender of a type which the former foresees but does not necessarily intend.” And, as we have seen, Lord Steyn in R v Powell (Anthony)[93] thought it well nigh impossible for the prosecution to discharge such a burden. 80. Two post-Jogee decisions in the English Court of Appeal indicate that some of the abovementioned difficulties regarding the conditional intent concept have been encountered in practice. 81. In R v Anwar,[94] the prosecution’s case was that all six defendants were party to a conspiracy to rob the victim (Mr Samma) “and that the agreement, in which all participated, was accompanied by a decision that a loaded firearm would be carried to the scene of the planned robbery, the shared intention being that the gun would be used specifically to kill Mr Samma ‘if the need arose, eg if the victim put up any resistance’”. 82. The trial judge, who was guided by paragraph 94 of Jogee, evidently reading itas laying down a highly demandingrequirement as to intention, accepted the defence submission that: “... in order to achieve a conviction, the prosecution would have to produce sufficient evidence to make the jury sure that, at the time the conspiracy to commit robbery was hatched, a defendant knew that – as part of the plan – a firearm loaded with live rounds, was to be carried to the scene of the intended robbery and, further, that the defendant (again, at the time he joined in the agreement to rob) intended that the firearm should be used to kill [Mr Samma] if he resisted the robbers.”[95] 83. His Honour accepted that Jogee required “that a distinction had to be drawn between conditional intent and foresight of the consequences” and consequently held that: “... the Crown’s case required not only proof of awareness that an accomplice carried a loaded firearm and that this might be used to kill during the robbery but also that the gunman shot Mr Samma with the requisite intention for attempted murder and the particular accomplice then being considered intentionally assisted or encouraged the gunman, intending him to use the gun to kill the victim if the need arose.”[96] 84. On that basis, the trial judge ruled that there was no case to answer because crucially, there was no evidence to establish a prima facie case of “any particular defendant being aware, by the time of travelling to the scene that the shotgun was loaded, or that he was intending that it should be used if necessary specifically to kill.”[97] The trial was stayed while the prosecution appealed the ruling of no case to answer. 85. Sir Brian Leveson, giving the judgment of the Court of Appeal, appears to have understood Jogee to have laid down the law in a manner differing little in this context from pre-existing law: “... we find it difficult to foresee circumstances in which there might have been a case to answer under the law before Jogee but, because of the way in which the law is now articulated, there no longer is.”[98] 86. Citing paragraph 94 of Jogee and resorting expressly to the doctrine of joint criminal enterprise[99] his Lordship reversed the trial judge’s ruling of no case to answer. His reasoning is illustrated by what he said in respect of one group of the defendants who were in an Astra motor car: “If the jury were to draw the inference that the planning for the robbery included agreement as to the means to threaten the victim and the willingness to use the weapon if occasion for its use occurred, then the acts of the man in possession of the firearm were acts in pursuance of the joint enterprise that there is prima facie evidence each defendant was party to. In that context, as Judge Pontius observed (and has not been disputed before us), there was undeniably a case to answer in respect of the men in the Astra, one of whom had the gun.”[100] 87. In R v Johnson and Others,[101] it fell to the English Court of Appeal to review a series of convictions mainly for murder in respect of which leave to appeal out of time was sought in the light of Jogee. Again, so far as the mental element was concerned, little practical difference appears to have been made between conditional intent in Jogee and the foresight requirement under Chan Wing Siu. In their joint judgment, Lord Thomas of Cwmgiedd, CJ, Sir Brian Leveson PQBD and Hallett LJ, V-P stated: “... by focussing on intention (or conditional intention, that is to say, in circumstances in which D2 expressly or tacitly agreed to a plan to commit crime A which included a common purpose or common intent, if it came to it, to commit crime B), the knowledge of a weapon (being a critical ingredient of parasitic accessory liability under Chan Wing-Siu v The Queen and R v Powell, R v English) remains highly material in relation to the inference of intention.”[102] 88. None of the cases under review was re-opened by virtue of the decision in Jogee and in two of those cases, the applications were refused applying joint criminal enterprise principles difficult to distinguish from those applicable under Chan Wing Siu. 89. Thus, in R v Burton and Terrelonge,[103] the Court of Appeal noted that “...the jury convicted both Terrelonge and Burton of being party to a common criminal purpose to attack the deceased, knowing one of their number had a knife, and knowing that the knife might be used with the relevant intention.”[104] It dismissed the application holding: “The judge's directions may not have been in accordance with Jogee but, on the jury's findings, this court can safely draw the conclusion that the applicants had the necessary conditional intent (at the very least) that the knife would be used with intent to kill or cause grievous bodily harm should the occasion arise. In other words, the use of the knife with intent to kill or cause grievous bodily harm was within the scope of the plan to which they gave their assent and intentional support (see paragraph 94 of Jogee). Indeed, the prosecution case could be said to be stronger post-Jogee: knowledge of the precise weapon is no longer required but, if proved, may lead to an inference of intention. Here, the verdicts make it clear that there was a joint enterprise to cause grievous bodily harm.”[105] 90. The joint judgment concluded: “... in our judgment, a post Jogee direction would not have made a difference to the jury's verdicts; the convictions were and are safe.”[106] 91. R v Hall,[107] involved an escalating alcohol-fuelled brawl that ended in the killing of the victim who was attacked by assailants kicking him and using a knuckle duster and other weapons. It was accepted that the conviction could not be challenged on the basis of the law as it stood at the time of the conviction.[108] It was not the prosecution case that Hall was armed or that he was one of those who kicked the deceased on the ground. However, after citing paragraph 94 of Jogee, the English Court of Appeal dismissed the application on the basis of Hall’s foresight of the murder being committed, holding that this satisfied the requirement of conditional intent: “The jury must by their verdict have concluded that he foresaw that Holmes would attack the third member of the group, the deceased, with intent to cause really serious bodily injury. In the circumstances it would have been open to them to infer that he had the necessary conditional intent now required.”[109] 92. It follows that the present indications are that the concept of conditional intent introduced by Jogee is being interpreted by the English Court of Appeal within a joint criminal enterprise framework as operating in much the same way as the foresight requirement in Chan Wing Siu, prompting questions as to the true extent of the changes effected by the UK Supreme Court’s decision. 93. If one ignores the apparent drift back to joint criminal enterprise suggested by the three paragraphs and the Court of Appeal decisions cited above and assumes that Jogee’s conditional intent concept is intended to operate solely in relation to traditional accessorial liability, problems remain. Prof A P Simester[110] convincingly argues that in the context of traditional accessorial liability, Jogee “mishandles” conditional intent since it erroneously attributes conditionality to the accessory’s mental state when the only intent which might be conditional is not that of the accessory but of the principal offender. One might add that since the accessory’s liability is derivative and since there must be proof that he intended to assist or encourage the commission of the principal offence, this requirement cannot be met so long as the principal offender’s intent is merely conditional and contingent. 94. As is to be expected, the reactions of eminent academics to Jogee’s departure from Chan Wing Siu and the cases following that decision are mixed. A number of articles cited to the Court favour Jogee’s approach which is seen to be more consonant with the common law’s historical treatment of accessorial liability, criticising Chan Wing Siu for over-criminalising participants in joint criminal enterprises.[111] Other articles approve of the approach based on Chan Wing Siu also on historical, doctrinal and policy grounds.[112] It will be apparent that my views are allied to those in the latter group. 95. It may be noted that David Ormerod QC and Karl Laird express the view that: “What is doubtful ... is the extent to which the Supreme Court has conclusively resolved the problems that bedevilled this area of the law”.[113] They proceed to identify “a number of key questions [which] require urgent attention”, referring particularly to uncertainties regarding the concepts of intention and foresight and difficulties associated with those concepts likely to be faced by judges directing juries. 96. Professor Simester highlights the gap in the law resulting from abolition of joint enterprise liability: “In principle, having two distinct channels of complicity liability affords the law greater flexibility and moral sensitivity when determining whether S [the secondary party] is a participant in P’s [the perpetrator’s] crime. Direct aiding/abetting doctrines are simply too blunt by themselves to capture, without substantial over- or under-inclusion, all forms of association with P’s crime that warrant a finding of guilt alongside P.”[114] Having noted Lord Steyn’s recognition of the need for a joint criminal enterprise doctrine to deal with dynamic contingencies,[115] the learned author argues that: “The Court in Jogee overestimates the capacity of aiding/abetting law to accommodate such difficulties. Joint criminal enterprises are a distinct moral phenomenon. Indeed, only by recognising that can we adequately protect the law of aiding and abetting. Absent legislative reform, the inadequacy of traditional aiding/abetting doctrine to deal with the complexity of multi-party wrongdoing will inevitably generate pressure, either to restore joint criminal enterprise liability or – disastrously – to water down the mens rea requirements of aiding and abetting itself.”[116] H. Disposition of the present appeal 97. The Appeal Committee granted leave to appeal certifying the following question of law: “What is the law of Hong Kong regarding the doctrine of joint enterprise, namely should Chan Wing Siu v R [1985] 1 AC 168 and Sze Kwan Lung v HKSAR (2004) 7 HKCFAR 475 continue to be applied in the light of R v Jogee and R v Ruddock [2016] 2 WLR 681?” 98. I would answer it as follows: Jogee should not be adopted in this jurisdiction. The joint criminal enterprise doctrine based on Chan Wing Siu and the cases following it, endorsed by this Court in Sze Kwan Lung,continues to apply in Hong Kong, operating alongside the traditional accessorial liability principles. 99. Leave to appeal was granted because it was appropriate that the aforesaid question should be addressed for the guidance of our criminal courts. 100. However, the appellant’s appeal must, on any view, be dismissed. The principles of accessorial and joint criminal enterprise liability provide overlapping bases for establishing his guilt. Obeying orders from his triad boss, he and his fellows armed themselves with lethal weapons with the intention of “chopping” – that is, at least inflicting grievous bodily harm on – their rivals. It was a basic joint criminal enterprise case and it mattered not that other members of the gang were the actual perpetrators of the fatal attack. By arming himself and participating in the predatory hunt for victims, he also acted as an accessory, encouraging the other members of the gang, including the eventual perpetrators, to commit the intended offence, giving them “the comfort and spur of knowing that [they were] not on [their] own, but had the support of the [appellant] and the reasonable expectation that [he and other members of the gang] would come to his aid if he needed it.”[117] 101. I would accordingly dismiss the appeal. Mr Justice Tang PJ: 102. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Fok PJ: 103. I agree with the judgment of Mr Justice Ribeiro PJ. Lord Hoffmann NPJ: 104. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 105. The Court unanimously dismisses the appeal. Ms Felicity Gerry QC, Ms Margaret Ng and Mr Leonard Chow, instructed by Cheung, Chan & Chung, assigned by Director of Legal Aid, for the Appellant Mr Gerard McCoy SC and Mr Simon N.M. Young, on fiat, and Mr Raymond Cheng ADPP (Ag.), of the Department of Justice, for the Respondent [1] [1985] 1 AC 168. [2] (2004) 7 HKCFAR 475. [3] [2016] 2 WLR 681. [4] Miller v The Queen; Presley v The Director of Public Prosecutions [2016] HCA 30. [5] HCCC 365/2013 (17 June 2014). He was also convicted of acting as a member of a triad society. [6] Court of Appeal, Lunn VP, Macrae JA and Barnes J, CACC 231/2014 (30 June 2015) at §19. [7] Per Lunn VP, giving the judgment of the Court of Appeal at §83. This reflected the prosecution case: Court of Appeal at §§31 and 63-64. [8] Court of Appeal at §84. [9] Cap 221. It was originally enacted to duplicate section 8 of the Accessories and Abettors Act 1861 which provides: "Whosoever shall aid, abet, counsel or procure the commission of any misdemeanor, whether the same be a misdemeanor at common law or by virtue of any Act passed or to be passed, shall be liable to be tried, indicted and punished as a principal offender." That section is generally held to be purely procedural and while section 89 appears to address substantive liability, it has not been regarded as adding anything to the established common law principles. [10] Ferguson v Weaving [1951] 1 KB 814 at 818-819; R v Stringer [2012] QB 160 at §43. [11] R v Coney (1881-82) LR 8 QBD 534; R v Stringer [2012] QB 160 at §43. [12] R v Coney (1881-82) LR 8 QBD 534 at 546; Maxwell v DPP for NI [1978] 1 WLR 1350 at 1359. But it is of course unnecessary for the aider and abbettor to know that such conduct contravenes the law, ignorance of the law being no defence: Johnson v Youden [1950] 1 KB 544 at 546. [13] Ferguson v Weaving [1951] 1 KB 814. [14] A-G’s Reference (No 1 of 1975) [1975] QB 773 at 779. [15] Osland v The Queen (1998) 197 CLR 316 at §71 and §207. [16] [1960] 1 QB 129. [17] [1978] 1 WLR 1350. [18] At 1362. [19] [1999] 1 AC 1 at 16. [20] [1992] 1 AC 34 at 44. [21] Eg, in R v Hyde [1991] 1 QB 134 at 136; R v Rahman [2009] 1 AC 129 at §4; Clayton v The Queen (2006) 81 ALJR 439 at §11; and Miller v The Queen [2016] HCA 30 at §35. [22] [1955] 2 QB 497 at 503. [23] D Ormerod QC and K Laird, Smith and Hogan’s Criminal Law (OUP, 14th Ed) (“Smith & Hogan”), p 206. [24] R v Jogee; Ruddock v The Queen [2016] 2 WLR 681 at §88. [25] (1846) 2 Car & K 230. [26] [1907] 1 KB 40 at 45-46. [27] [1988] Crim L R 677. [28] [2003] UKPC 10. See Section C.1 below. [29] (1980) 143 CLR 108 at 118. [30] [1999] 1 AC 1 at 14. [31] [1985] 1 AC 168 at 175. [32] (1995) 183 CLR 108 at 114, per Brennan CJ, Deane, Dawson, Toohey and Gummow JJ. [33] Simester, “The Mental Element in Complicity” (2006) 122 LQR 578 at 596-599. [34] (2006) 81 ALJR 439 at §20, per Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ (with Kirby J dissenting). [35] [1995] 1 Cr App R 441 at 447. [36] (2004) 7 HKCFAR 475. [37] At §19. [38] At §34, citing among other cases, Chan Wing Siu [1985] 1 AC 168at 175 and 177. [39] Eg, Hughes LJ asserted in A, B, C & D v The Queen [2010] EWCA Crim 1622 at §37 that joint criminal enterprise involves a derivative liability. [40] Smith & Hogan at p 260. [41] [2016] HCA 30 at §4. [42] [2003] UKPC 10. [43] (1846) 2 Car & K 230. [44] At §§8 and 13. [45] At §14. [46] [1967] 2 AC 187 at 194. [47] (2006) 81 ALJR 439 at §20. [48] As noted in the Miller joint judgment ([2016] HCA 30 at §5), Professor J C Smith has pointed out that the doctrine is no recent innovation and that “[the] rule imposing liability for offences committed in the course of committing the offence assisted or encouraged seems to be almost as old as the law of aiding and abetting itself.” (J C Smith, “Criminal liability of accessories: law and law reform” [1997] LQR 453 at 456) There were however differences in detail from the modern doctrine, for instance, in requiring the further felony to be “a probable consequence” of what the accessory had counselled or procured. A detailed historical analysis is contained in Findlay Stark, “The Demise of ‘Parasitic Accessorial Liability’: Substantive Judicial Law Reform, Not Common Law Housekeeping” [2016] 75(3) CLJ 550; cf Dr Matthew Dyson, “Bases and Baselessness in Secondary Liability” University of Cambridge Faculty of Law Research paper 31/2015. [49] (1980) 143 CLR 108 at 118. [50] Johns at 119. [51] Johns at 125. [52] Johns at 130-131. [53] Johns at 131. Johns proved influential in New Zealand even where the position is regulated by statute, section 66(2) of the Crimes Act 1961 making a participant liable “if the commission of that offence was known to be a probable consequence of the prosecution of the common purpose”. Acknowledging Johns,the Court of Appeal in R v Gush [1980] 2 NZLR 92 at 94-96 held that the word ‘probable’ was not used with the meaning ‘more probable than not’ but to mean “an event that could well happen”. [54] [1985] 1 AC 168. [55] Chan Wing Siu at 174-175. [56] Chan Wing Siu at 175. [57] Ibid. [58] Ibid. [59] R v Anderson and Morris [1966] 2 QB 110; Johns v The Queen (1980) 143 CLR 108; Miller v The Queen (1980) 32 ALR 321; R v Gush [1980] 2 NZLR 92; Davies v DPP [1954] AC 378. [60] Chan Wing Siu at 177. [61] Chan Wing Siu at 178. [62] Chan Wing Siu at 179. [63] Hui Chin-ming v The Queen [1992] 1 AC 34, Sze Kwan Lung v HKSAR (2004) 7 HKCFAR 475; HKSAR v Chu Yiu Keung Hartmann JA, Lunn and Barnes JJ, CACC 27/2009 (20 January 2011). [64] Eg, R v Ward (1987) 85 Cr App R 71; R v Slack [1989] QB 775; R v Hyde [1991] 1 QB 134; R v Powell (Anthony) [1999] 1 AC 1 (HL); R v Rook [1993] 1 WLR 1005; R v Rahman [2009] 1 AC 129. [65] McAuliffe v The Queen (1995) 183 CLR 108; Osland v The Queen (1998) 197 CLR 316; Gillard v The Queen (2003) 219 CLR 1; Clayton v The Queen (2006) 81 ALJR 439. [66] [1999] 1 AC 1 at 27. [67] Powell at 30. [68] Powell at 30-31. [69] Jogee at §79. [70] Jogee at §88. [71] Miller v The Queen; Presley v The Director of Public Prosecutions [2016] HCA 30. [72] Jogee at §83. [73] See also Jogee at §66. [74] (1980) 143 CLR 108 at 117. [75] Section C.1 above. [76] Miller at §34, citing Clayton v The Queen at §20. [77] Although not a point arising in the present case, the doctrine is also tempered by rules recognizing that a participant may avoid liability by withdrawing from the joint enterprise: HKSAR v Chu Yiu Keung, Hartmann JA, Lunn and Barnes JJ, CACC 27/2009 (20 January 2011) at §§115-119 citing R v Becerra and Cooper (1976) 62 Cr App R 212 at 218; R v Whitehouse (1941) 1 WWR 112; and R v O’Flaherty [2004] 2 Cr App R 315 at 327. [78] Miller at §45. [79] (2003) 219 CLR 1 at §25. [80] [1966] 2 QB 110 at 118-119. [81] Chan Wing Siu at 175, citing R v Anderson and Morris at 175-176. [82] Miller at §139. [83] Miller at §138. [84] [1999] 1 AC 1. [85] Powell at 14. [86] [1995] 1 Cr App R 441 at 447, see Section C above. [87] (2004) 7 HKCFAR 475. [88] Jogee at§§88 et seq. [89] Italics supplied. [90] Winnie Lo v HKSAR (2012) 15 HKCFAR 16 at §§115-117. [91] Glanville Williams, Criminal Law, The General Part (Stevens, 2nd Ed, 1961), pp 34-36; Smith & Hogan p 117. [92] Glanville Williams, op cit 1961, pp 38-42; Smith & Hogan p 117. [93] [1999] 1 AC 1 at 14. [94] [2016] EWCA Crim 551 at §9. [95] At §11. [96] At §12. [97] At §16. [98] At §20. [99] At §21. [100] At §25. [101] [2016] EWCA Crim 1613. [102] At §5. [103] At §59 et seq. [104] At §81. [105] At §82. [106] At §83. [107] At §161 et seq. [108] At §182. [109] At §189. [110] “Accessory Liability and Common Unlawful Purposes” (2017) 133 LQR 73 at 84-86 (Pre-publication proofs having helpfully been provided to the Court). [111] These include: Cheung Eric TM, The Dichotomy Between Foresight and Intention in Joint Enterprise Murder: Should our Top Court Depart from Chan Wing Siu and Sze Kwan Lung? Centre for Comparative and Public Law Occasional Paper No. 28, Faculty of Law, The University of Hong Kong, October 2016; Dyson M, Bases and Baselessness in Secondary Liability, University of Cambridge Faculty of Law Research Paper 31/2015 (submitted to the Supreme Court in Jogee); Dyson M, Might Alone Does Not Make right: Justifying Secondary Liability [2015] Crim LR 967; and McNamara L, A Judicial Contribution to Over-criminalisation? Extended Joint Criminal Enterprise Liability for Murder (2014) 38 Crim LJ 104. [112] These include the Law Commission, Participating in Crime (LAW COM No 305), London UK, May 2007, pp.87-89; D Ormerod QC & K Laird , Jogee: not the end of a legal saga but the start of one? [2016] Crim LR 539; Stark F, The demise of ‘parasitic accessorial liability’: substantive judicial law reform, not common law housekeeping (2016) 75(3) Cambridge LJ 550; and A P Simester, “Accessory Liability and Common Unlawful Purposes” (2017) 133 LQR 73 at 84-86. [113] [2016] Crim LR 539. [114] (2017) 133 LQR 73 at 89. [115] R v Powell (Anthony) [1999] 1 AC 1 at 14. [116] (2017) 133 LQR 73 at 89-90. Professor Simester ends by hoping that “London opts for the former, and ultimately realigns itself with Canberra”. [117] R v Stringer [2012] QB 160 at §55.
Chief Justice Cheung: 1. I agree with the judgment of Mr Justice Gleeson NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Mr Justice Gleeson NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Mr Justice Gleeson NPJ. Mr Justice Stock NPJ: 4. I agree with the judgment of Mr Justice Gleeson NPJ. Mr Justice Gleeson NPJ: A. Introduction 5. This is an appeal by the Commissioner of Inland Revenue (“the CIR”) against a decision of the Court of Appeal.[1] The Court of Appeal dismissed the CIR’s appeal against a decision of G Lam J sitting in the Court of First Instance of the High Court.[2] 6. The matter came before G Lam J as an appeal by Mr Koo and Mr Murakami (“the Applicants”) against decisions of the Board of Review (“the Board”) upholding tax assessments against them.[3] 7. The issue before this Court is narrower than the issues before the Board and G Lam J. It is one which both G Lam J and the Court of Appeal decided against the CIR, and concerns the meaning and effect of s 82A(1)(a) of the Inland Revenue Ordinance (Cap 112) (“the IRO”), which exposes to an administrative penalty, described as additional tax, a person who makes an incorrect tax return. 8. The tax returns of Nam Tai Electronic & Electrical Products Limited (“NT”) for the years 1996/97, 1997/98 and 1999/2000 were found by the Board to have been incorrect. The Applicants were directors of NT at the time. In the manner described below, Mr Koo signed the first and third of those returns, and Mr Murakami signed the second. Section 82A, which was enacted in 1969, does not make specific reference to the potential liability of an officer of a corporation who signs the corporation’s tax return, but it covers the case of a person who makes an incorrect return by omitting or understating anything in respect of which he is required to make a return on behalf of another person. On that basis, the Board held the Applicants were liable to be assessed to additional tax under s 82A(1)(a). The Applicants contended that they do not fall within that statutory description. G Lam J and the Court of Appeal agreed with them. B. Section 82A of the IRO 9. At the relevant times, s 82A of the IRO provided as follows: “(1) Any person who without reasonable excuse – (a) makes an incorrect return by omitting or understating anything in respect of which he is required by this Ordinance to make a return, either on his behalf or on behalf of another person or a partnership; or (b) makes an incorrect statement in connection with a claim for any deduction or allowance under this Ordinance; or (c) gives any incorrect information in relation to any matter or thing affecting his own liability to tax or the liability of any other person or of a partnership; or (d) fails to comply with the requirements of a notice given to him under section 51(1) or (2A); or (e) fails to comply with section 51(2), shall, if no prosecution under section 80(2) or 82(1) has been instituted in respect of the same facts, be liable to be assessed under this section to additional tax of an amount not exceeding treble the amount of tax which – (i) has been undercharged in consequence of such incorrect return, statement or information, or would have been so undercharged if the return, statement or information had been accepted as correct; or (ii) has been undercharged in consequence of the failure to comply with a notice under section 51(1) or (2A) or a failure to comply with section 51(2), or which would have been undercharged if such failure had not been detected. (2) Additional tax shall be payable in addition to any amount of tax payable under an assessment, or an additional assessment under section 60. (3) An assessment of additional tax may be made only by the Commissioner personally or a deputy commissioner personally. (4) Before making an assessment of additional tax the Commissioner or a deputy commissioner, as the case may be, shall – (a) cause notice to be given to the person he proposes so to assess . . . (b) consider and take into account any representations which he may receive under paragraph (a) from or on behalf of a person proposed to be assessed for additional tax. . . . (7) A person who has been assessed to additional tax under subsection (1) shall not be liable to be charged on the same facts with an offence under section 80(2) or 82(1).” 10. Section 2(1) of the IRO defines “person” to include: “a corporation, partnership, trustee, whether incorporated or unincorporated, or body of persons”. 11. By amendment made in 2010 the words “or a partnership” were deleted from s 82A(1)(a). Nothing turns on this. It will be noted that “person” includes “partnership”. C. The material facts 12. NT did not have any board resolution or protocol or provision in its Memorandum and Articles of Association as to how documents such as tax returns were to be signed or authenticated. 13. Each return was made following receipt of a notice from the CIR said to be issued pursuant to s 51(1) of the IRO, which was at the commencement of a blank form of tax return evidently intended to be completed by the taxpayer. In each case the notice was addressed to NT, and stated: “By virtue of Section 51(1) of [the IRO] you are required to make on this form a true and correct return of the Assessable Profits [for a period].” Neither the notice nor the blank form of return sent to NT referred to any individual, but the form concluded with a declaration to be completed and signed. In the case of the returns for 1996/1997 and 1997/98, the declaration was as follows: “I (name), being Secretary/Manager/ Director/ Liquidator of [NT] declare that to the best of my knowledge and belief all the statements contained in this return are true, correct and complete and I have disclosed the whole of the Assessable Profits (or Adjusted Loss) of the Corporation arising during [the relevant period] as stated in the formal notice in Page 1.” 14. In the case of the 1999/2000 return the declaration was as follows: “I (name), being Secretary/Manager/Director/Liquidator of [NT] declare that: • to the best of my knowledge and belief all the statements contained in this return are true, correct and complete; • the whole of the Assessable Profits (or Adjusted Loss) of the Corporation arising during the basis period for [the relevant period] as stated in the formal notice on Page 1 have been disclosed; and • the Supporting Documents referred to in the formal notice on Page 1 have been prepared and this return is completed in accordance with the Supporting Documents.” 15. In the case of the 1996/1997 and 1999/2000 returns as furnished in response to the notice, the name of Mr Koo appeared as the maker of the declaration and the declaration was signed by him. In the case of the 1997/1998 return the name of Mr Murakami appeared as the maker of the declaration and the declaration was signed by him. In each return, information as to profits, and other relevant information called for by the form of return sent to NT by the CIR, was completed. 16. In the return for 1998/99 the declaration was signed by another person. It is presently immaterial. 17. Mr Murakami ceased to be a director of NT in 2002. Mr Koo ceased to be a director in 2006. 18. Following a tax audit in 2002, the Inland Revenue Department (“the IRD”) disallowed claims for deductions made in the returns. Following such disallowance, NT was assessed under s 60 of the IRO. NT objected and pursued, unsuccessfully, challenges to the assessments. It did not pay the amounts assessed, and on 4 June 2012 was wound up by the court on the petition of the CIR. 19. In 2013, the Applicants were assessed to additional tax under s 82A(1)(a) of the IRO. The assessments were made on the basis that the returns were incorrect. The Applicants do not accept that the returns were incorrect, but the issues to which that gives rise are not before this Court. The nature of that dispute can, therefore, be stated in a summary form. 20. NT was part of a group of companies engaged in the manufacture and sale of electronic and electrical products. The holding company of the group, Nam Tai Electronics Inc (“NTEI”) was incorporated in the British Virgin Islands. Its shares were listed on NASDAQ. Other subsidiaries of NTEI were incorporated in Canada and the People’s Republic of China. The group’s manufacturing operations were principally based in Shenzhen. In NT’s substantive tax appeal, the Board found that decisions as to allocation or attribution of profits as between group members were not made solely by reference to the trading results of members treated as separate entities dealing at arms-length. The accounts of NT, which were audited, showed very substantial payments to related companies for management and other services. For example, in NT’s accounts for 1996/97, total operating income was approximately $78 million, and management fees paid to NTEI were more than $32 million. Similarly high proportions applied in the later years. The Board found that these fees were artificial and did not reflect the value of services provided to NT. The fees, the Board held,[4] “could never have been regarded as expenses incurred in the production of [NT’s] profits”. The Board found that the fees were not allowable deductions under sections 16 and 17 of the IRO, not being amounts expended for the purpose of producing profits. An alternative argument for the CIR, based on the anti-avoidance provision of the IRO, 61A, raised a question that the Board said was moot, but the Board indicated an inclination to accept it. The Board found that the Applicants had no reasonable excuse for the incorrect returns. 21. The amounts of additional tax assessed against Mr Koo in relation to the years 1996/97 and 1999/2000 respectively were $6,400,000 and $6,200,000. The amount assessed against Mr Murakami in relation to the year 1997/98 was $5,400,000. D. The appeal to this Court, and a procedural twist 22. The Applicants, in their appeal to the Court of First Instance, argued that s 82A(1)(a) of the IRO did not apply to them as they did not fall within the description of a person who makes an incorrect return by omitting or understating anything in respect of which he is required by the IRO to make a return. They also raised other arguments against their assessments, including a challenge to the Board’s finding that the returns were incorrect. G Lam J accepted the primary argument, and that decision was upheld by the Court of Appeal. Pursuant to leave granted by the Court of Appeal on 10 December 2021, the CIR appealed to this Court. 23. On 14 March 2022, the CIR filed its Printed Case in support of its appeal. On 11 April 2022, the Applicants filed their Printed Case in opposition to the appeal. The Printed Cases dealt only with the primary argument, which raised the issue in respect of which leave to appeal had been granted. The CIR submitted that, if the appeal to this Court were allowed, the matter should be remitted to the Court of Appeal to determine the outstanding issues. This appeared to be common ground. If the appeal to this Court were dismissed, those other issues would not arise.[5] 24. The appeal to this Court was listed for hearing in June 2022. 25. On 20 May 2022, the Applicant, Mr Koo, writing on his own behalf and on behalf of Mr Murakami, informed the Acting Registrar of this Court that the Applicants did not intend to oppose the CIR’s appeal and that they wished to withdraw their Printed Case. On 25 May 2022, Mr Koo wrote to the Court confirming the above information, and stating that he and Mr Murakami did not intend to instruct lawyers to attend the hearing or to attend in person. 26. The questions for this Court in the appeal were certified by the Court of Appeal to be of great general or public importance. It was therefore for this Court to decide how the appeal was to be disposed of.[6] 27. On 26 May 2022, Mr Eugene Fung SC and Mr John Leung were appointed as amici curiae by this Court. 28. On 14 June 2022, the amici curiae filed a Printed Case addressing the questions before this Court in the appeal. The submissions in that Printed Case supported the decisions of G Lam J and the Court of Appeal. E. Legislative context 29. Part 9 of the IRO is the statutory source of the legal obligation to furnish a tax return. It commences with s 51, which, at the relevant time, provided: “51 Returns and information to be furnished (1) An assessor may give notice in writing to any person requiring him within a reasonable time stated in such notice to furnish any return which may be specified by the Board of Inland Revenue for– (a) property tax, salaries tax or profits tax; or (b) property tax, salaries tax and profits tax, under Parts II, III, IV, XA, XB and XC… (2) Every person chargeable to tax for any year of assessment shall inform the Commissioner in writing that he is so chargeable not later than 4 months after the end of the basis period for that year of assessment unless he has already been required to furnish a return under the provisions of subsection (1).” 30. G Lam J noted[7] that, at the material time, in the case of a company chargeable to profits tax, s 51(1) was put into effect by the IRD sending the company a blank profits tax return form with a requirement, printed thereon, to make a return on that form. He also observed[8] that, in this case, in each of the relevant notices, the requirement was addressed to the corporation, NT. 31. Subsections (3), (4), (4A) and (4B) of s 51 empower an assessor to give notices requiring persons (not limited to a taxpayer) to furnish information regarding tax liabilities. (That ties in with s 82A(1)(c)). 32. Section 51(5) provides: “(5) A return, statement, or form purporting to be furnished under this Ordinance by or on behalf of any person shall for all purposes be deemed to have been furnished by that person or by his authority, as the case may be, unless the contrary is proved, and any person signing any such return, statement, or form shall be deemed to be cognizant of all matters therein”. 33. As to the references in s 51 to a return being furnished or made on behalf of a person, it may be noted that s 20A(3) of the IRO provides that a person who sells any goods in Hong Kong on behalf of a non-resident shall furnish a return showing the gross proceeds of sale. Section 22(2) provides for returns on behalf of a partnership. The precedent partner is to make a return on behalf of the partnership, or, where no other partner is resident in Hong Kong, the return is to be made by the manager or agent of the partnership in Hong Kong. Section 53, dealing with incapacitated or non-resident persons, provides that an act or thing required by the IRO to be done by a person shall, if that person is incapacitated or non-resident, be required to be done by the trustee of the incapacitated person or the agent of the non-resident person. 34. At the relevant time, section 57 of the IRO provided: “(1) The secretary, manager, any director or the liquidator of a corporation and the principal officer of a body of persons shall be answerable for doing all such acts, matters or things as are required to be done under the provisions of this Ordinance by such corporation or body of persons”. 35. In the case of a solvent company, the signature of one director (or the secretary or the manager) was sufficient for the purposes of the form provided by the CIR. Section 57, which is in the part of the IRO dealing with returns, refers to an act required to be done by a corporation. One such act is furnishing a tax return in compliance with a notice under s 51(1). Section 57 identifies a class of persons “answerable for” doing that act. In the case of directors, it says that “any director” shall be answerable. That appears to mean that all directors are answerable; if it were otherwise there is no way of knowing which director is answerable. It will be necessary to return to the concept of answerability, but it may be observed that what the relevant officer or officers is or are answerable for is “doing [an act] required to be done . . . by [the] corporation”. The argument for the CIR is that the result is that when one particular director, such as Mr Koo, signs the return which the corporation NT is required to make, then for the purposes of s 82A(1)(a) that director is making a return that he or she is required to make. In that respect, however, it may be noted that there is nothing in s 82A which makes any director liable if no return is furnished to the IRD. Section 82A(1)(d) only applies to the person to whom a s 51(1) notice is given. Furthermore, provided an individual falls within one of the categories mentioned in s 57(1), the revenue authorities have no other concern with which particular officer of the corporation signs. 36. Part 14 of the IRO deals with penalties and offences. Section 80 creates offences and penalties for failing to make returns and incorrect returns. In subsection (2) it provides that any person who without reasonable excuse makes an incorrect return by omitting or understating anything in respect of which he is required to make a return either on his behalf or on behalf of another person or partnership is guilty of an offence, the penalty for which is a fine at a certain level and a further fine of treble the amount of tax undercharged as a result. Section 82 imposes penalties in respect of conduct by which a person with intent to evade tax or to assist another to evade tax provides false information of various kinds in or concerning tax returns or tax obligations. F. Legislative history 37. When the original IRO was enacted in 1947,[9] section 57 provided: “The secretary, manager, or other principal officer of every company or body of persons corporate or unincorporate shall be answerable for doing all such acts, matters or things as are required to be done under the provisions of this Ordinance by such company or body of persons: Provided that any person to whom a notice has been given under the provisions of this Ordinance on behalf of a company or body of persons shall be deemed to be the principal officer thereof unless he proves that he has no connexion with the company or body of persons, or that some other person resident in the Colony is the principal officer thereof”. 38. Subsequent reports of the Inland Revenue Ordinance Review Committee indicated concerns about obtaining returns and information from corporations whose control and management were outside Hong Kong. One proposal to deal with this was to replace the reference to principal officer with a reference to directors. In the course of a debate in Committee in 1971, the Financial Secretary said[10]: “I take this opportunity to say that the answerability of the representative does not extend to personal liability for tax due by the corporation. This is not the intention; and there has been a judicial decision in Australia (where there is a similar provision) determining that is in law not the effect of the provision”. 39. The reference to an Australian decision appears to have been a reference to Lean v Brady[11]. The legislation there in question required every company with an income to appoint a public officer and provided that the public officer should be liable for doing all things required to be done by or on behalf of the company and that in case of default both the company and the public officer would be liable for all penalties imposed for any breach. The liability of the public officer for penalties was made clear in express terms. However, Dixon J pointed out that the public officer was not personally liable for a company’s income tax or for failure to pay it. Rather, the public officer was made liable for penalties for failure to comply with obligations connected with tax administration such as an obligation to file tax returns. 40. Section 82A was introduced following a report of the Inland Revenue Ordinance Review Committee in 1967. The CIR had expressed a need for an alternative to court action which would authorize him to impose penalties for most offences except those of wilful intent to evade tax. The report said: “398. The Commissioner submitted that where any person has been undercharged to tax as a consequence of any incorrect return, statement or information made or given to the Department, or where he would have been undercharged if the return, etc. had been accepted, it would be reasonable to empower the Department to impose a penalty, up to the amount of the tax undercharged, according to the acceptability of the excuse offered by the offender: similar powers are to be found in the tax laws of other territories, including South Africa, Australia, Malaysia and Singapore . . .”. 41. G Lam J, in his reasons[12], observed that there does not appear to have been any discussion of the liabilities of corporate officers to the s 82A penalty for signing an incorrect corporate return. In the Explanatory Memorandum to the Inland Revenue (Amendment) Bill 1969 potential liability to the “additional tax” was said to exist where “the taxpayer” has made an incorrect return. That is consistent with par 398 of the report. The CIR is right to say that such a consideration is not conclusive of the present issue, but it is fair to observe that, if a purpose of s 82A(1)(a) had been to expose to additional tax the individuals who sign corporate tax returns, it might have been expected to do so expressly. G. The Issue of Construction 42. The potential liability of Mr Koo in respect of the two returns signed by him, and of Mr Murakami in respect of the return signed by him, depends upon whether they satisfy the description, in s 82A(1)(a), of a “person who . . . makes an incorrect return by omitting or understating anything in respect of which he is required by this Ordinance to make a return, either on his behalf or on behalf of another person”. 43. In its application to the Court of Appeal for leave to appeal from the decision of that Court, the CIR formulated the question raised by the case as follows[13]: “Does section 82A of the [IRO] permit the [CIR] to assess additional tax on a secretary, manager, director or liquidator (‘the Signer’) who has physically signed an incorrect return (‘the Return’) of a corporate taxpayer (‘the Taxpayer’)? In particular: (1) Whether, having regard to all the circumstances, including the actual words used in the Return, and the legislative context and purposes, the Signer is ‘making’ the Return in his personal capacity on behalf of the Taxpayer?; and (2) Whether the Signer, being a secretary, manager, director or liquidator of the Taxpayer, is ‘required’ by the IRO to make the Return on behalf of the Taxpayer? 44. The Court of Appeal accepted that formulation of the questions of importance raised by the case[14]. 45. In the Printed Cases of CIR and the amici curiae arguments were directed to the questions of “making” and “requirement”. 46. This is a convenient method of summarising the contention of the Applicants that they did not satisfy the statutory description, and of the reasoning upon which the Court of First Instance and the Court of Appeal upheld that contention. However, “making” and “requirement” are not strictly separate questions so much as two aspects of the one problem. No doubt it may happen that a person makes a tax return without being required to make it, but in the ordinary case the maker of a return is the person who is required to make it, and the expression “anything in respect of which he is required . . . to make a return” appears to be a compendious reference to the various impositions made by the Ordinance. It is not suggested that there is any material difference between the verb “to furnish” used in s 51(1) and the verb “to make” used in s 82A(1)(a). The scheme of the Ordinance is that a requirement to make a return in respect of, for example, profits, results from a written notice given under s 51(1). The notice is given to a person requiring that person to furnish a return. In the ordinary case the notice is addressed to the taxpayer, and the taxpayer makes the return. There are cases, of a kind referred to above, where a notice will not be addressed to the taxpayer, but in the case of a corporation which is required to make a return for the purpose of assessment to profits tax, the notice is addressed to the corporation, as in the present case. The notices in this case made no reference to Mr Koo, or Mr Murakami. As will appear, in order to justify a conclusion that those individuals made incorrect returns by omitting or understating anything in respect of which they were required to make a return, the CIR developed a theory of primary and secondary, and individual and collective, requirements which were said to exist in the commonplace situation of a corporate taxpayer. The argument of the Applicants, accepted by the primary judge and the Court of Appeal, was that, in the case of each of the returns in question, it was the taxpayer, NT, that was required to make the return, and that made the return. H. Other potential liabilities of officers of corporations 47. This case is concerned only with one particular form of potential liability, that is, liability for additional tax under s 82A(1)(a). An officer of a corporation could be liable, depending on the facts and circumstances, for various penalties arising out of the administration of the IRO. Sections 80 and 82 provide a number of examples. G Lam J referred also[15] to s 101E of the Criminal Procedure Ordinance[16] which provides that where an offence has been committed by a company with the consent or connivance of a director the director shall be guilty of the like offence. In the Court of Appeal, Barma JA referred[17] to s 51(4) of the IRO which entitles the revenue authorities to require persons to provide information relevant to tax liabilities and pointed out that officers of corporations would be obvious candidates for such investigation in the case of corporate taxpayers. I. Judgment of Court of First Instance 48. G Lam J said[18] that it was common ground that, in each of the years in question, NT was required to make a return and made a return. He said[19]: “Being a company, NT Trading could of course only furnish a return through acts of natural persons. Physical acts were necessary to achieve it: someone had to use a typewriter or a pen to fill in the form, someone had to sign in the box and someone had to post or deliver the completed form to the IRD. But it does not follow that these individuals, or one or a combination of them, or the board of directors who authorised or instructed them, made the return. Making or furnishing a return is a legal act capable of being said to have been done directly by a company albeit through physical steps undertaken by human beings”. (Emphasis in original). 49. It may be added that it does not follow from the fact that one director signed a declaration that the information in the return was true that such director made the return. 50. The learned judge dealt with the CIR’s reliance on s 57(1) as a potential source of a requirement on Mr Koo and Mr Murakami individually to make a return on behalf of NT, and much of his reasoning is reflected in what is said on that topic below. In that connection[20], he pointed out that although, on the case for the CIR, every secretary, manager, or director of a solvent company is required to make a return on behalf of the company (although apparently one return made by one of them will suffice), none of them would be liable under s 82A(1)(d) if no return were furnished. 51. The CIR relied also on s 51(5). That, the learned judge pointed out[21], is a provision in aid of proof of a particular fact (state of mind) in a case where that fact is relevant. It does not advance the argument as to the meaning of s 82A(1)(a). 52. The learned judge stated that, for the reasons he gave, his conclusion was as follows[22]: “I consider that where a company has been required by notice issued to it under s 51(1) to make a return, it is the company, rather than the individual who signs the document, that furnishes, or makes, the return in compliance with the requirements of the notice. Accordingly, s 82A(1)(a) does not permit a penalty assessment to be made on [the Applicants]”. J. Judgment of Court of Appeal 53. In the Court of Appeal, Barma JA, with whom the other members of the Court agreed, pointed out[23] that it was not in dispute that the notices under s 51(1) were issued and directed to NT and said that the terms of the declarations signed by the Applicants did not furnish a reason to regard the returns as made other than by NT. The forms of return, including the declaration, were forms created by the CIR. Furthermore, the Applicants simply declared their belief in the correctness of the information in the returns; they did not assume the capacity of the makers of the returns. 54. As to s 57(1), Barma JA said[24] that, although it makes directors and others “answerable”, it remains the company which is required to do the acts, matters and things in question. The directors are not required to do the acts referred to. He said[25]: “[T]o be answerable for doing acts required to be done by a company can best be understood as being under a duty to ensure that the act in question is done by the company. This is different to being under an obligation or requirement to do the act on behalf of the company”. K. The argument for the CIR 55. The CIR contends that, in the case of each of the relevant returns, both NT and the individual who signed the return were liable to additional tax under s 82A(1)(a). Although NT was not assessed to additional tax under s 82A(1)(a), it could have been. The 1996/1997 return, for example, it is said, was made by Mr Koo, and his act in making the return was done on behalf of NT and is attributed to NT, which is “vicariously liable”, but not to the exclusion of Mr Koo’s liability. 56. The question to be decided was posed by the CIR in the following paragraph of his Printed Case[26]: “19 There is no doubt that there is no intention under section 82A(1)(a) to exclude attribution of the physical making of an incorrect return by a Signer to the corporate taxpayer so as to render it not liable therefor . . . Thus the question is whether it is intended that the making (by physical signing) of the return is considered to be the act of the corporate taxpayer itself, with the consequence that the individual concerned is not considered to have made it personally at all, or by the principles of agency and vicarious liability, with the consequence that the individual is and remains the maker, but on behalf of the company, which is liable vicariously. That, in turn, raises the question of whether section 82A(1)(a), properly interpreted, is intended to impose liability for additional tax on the individual who in fact makes (by physically signing) the (incorrect) return of the corporate taxpayer, in addition to the corporation itself, under the ‘on behalf of another person’ limb.” 57. The contention that NT, as well as the individual Applicants, made the returns is necessary to avoid what would be a remarkable consequence. Where a solvent corporation’s tax return is incorrect, it may be expected that the primary target for potential liability for additional tax would be the corporation itself. Reference has been made earlier to the legislative history, which shows that it was contemplated that, at least in the ordinary case, liability for additional tax would fall upon the taxpayer. 58. The CIR’s emphasis on physicality was said to be supported by reference to the language of the relevant declarations, by which the individuals vouched for the information provided in the returns. 59. The corollary of the proposition that, in the case of each return, there were two persons (NT and the Signer) liable to be assessed to additional tax is that there were two persons required to make the return. At this point the submissions invoke the concept of a primary requirement, on the corporation, and a secondary and collective requirement, on its officers. The source of these refinements is said to be s 57(1). 60. In the CIR’s Printed Case, it is said[27] “29 To achieve the purpose of ensuring correctness of the return, it must have been the intention of those provisions to cast the net of liability for any incorrectness in the return wide rather than narrow, so that one should construe if possible a person who physically furnishes or makes (by signing) a return when he or she is not the person primarily required to make the return to be acting on behalf of, rather than, as the latter, so that the former can be made to act with all due care under the pain of possibility of an imposition of additional tax.” 61. Hence, the argument is that it was NT that was “primarily required” to make the relevant return. On that basis, any requirement under which the Applicants were acting was a secondary requirement. However, even assuming that, contrary to what was held in the Court of First Instance and the Court of Appeal, the people referred to in s 51(7) are required (secondarily) to do the act of the company for which they are answerable (to make the return), such requirement would not fall on any one of them individually. No one suggests they should each make a return on behalf of the company. The response to this is to say that the requirement is collective, but is discharged when any one of them makes the return. 62. In support of this, as noted above, the CIR says the legislative purpose is “to cast the net of liability for any incorrectness in the return wide rather than narrow”. L. The reach of s 82A(1)(a) 63. In considering the above arguments, it is convenient to commence with that concerning legislative purpose. At one level of abstraction, it can be said that the purpose of the IRO is to raise revenue. No one would seriously suggest that it follows that the solution to any question about the meaning of a doubtful provision in the IRO is to construe it in the manner which will raise the most revenue. Taxing acts do not set out to raise revenue at all costs; typically they involve a complex interplay of considerations of fiscal policy, administrative efficiency and fairness to, and as between, taxpayers. Identifying the purpose of one element of a scheme of taxation is likely to require attention to detail. 64. It is obvious that s 82A(1)(a) does not cast the net of liability for any incorrectness in a company’s tax return as widely as possible. For example, it does not impose liability on those directors who did not sign the return, even if they voted in favour of a resolution to adopt the accounts reflected in the return. Why a legislature casting a wide net in such a context would fasten upon the element of physicality stressed by the CIR’s submissions is difficult to explain. As between the people referred to in s 57(1), the identity of the individual who signs a company’s return may be a matter of happenstance. 65. For there to be an assessment to additional tax under s 82A, there must be an incorrect return and an amount of tax that has been undercharged in consequence of such incorrect return. The amount of tax undercharged is the basis of the potential assessment to additional tax. Tax evasion, involving wilful intention, is dealt with elsewhere[28]. Potential liability under s 82A(1)(a) flows from error if there is no reasonable excuse. It is the contention of the CIR that, in the case of a corporate taxpayer, not only is the taxpayer itself liable to additional tax, but so also is the officer of the corporation who signs its return. 66. It is accepted on both sides of the argument that a corporate taxpayer may be liable to additional tax under s 82A(1) if the corporation’s tax return is incorrect. As noted earlier, a contrary conclusion would be remarkable. The most direct path to the conclusion is to say, as the Court of First Instance and the Court of Appeal held, and the amici curiae submit, that it is the corporate taxpayer that is required to make, and makes, the incorrect return, and is therefore the “person” liable to be assessed to additional tax. The signing of the declaration at the conclusion of the return by an officer of the corporation is part of the process by which the corporation acts to fulfil the requirement that it make a return. On the other hand, the argument for the CIR is that, although the corporate taxpayer is the person “primarily required” to make the return[29], the legislative intention is that an officer of the corporation is to make the return on the taxpayer’s behalf by signing it[30], the taxpayer being “liable vicariously”[31]. The act of signing, and therefore making the return, it is said, is that of the individual officer but the officer acts as agent, on behalf of the company. 67. This gives rise to the obvious question: what is the source of the requirement that the individual officer make the return? In the case of the 1996/97 return, for example, the s 51(1) notice of requirement to furnish the return was addressed to NT. It did not mention Mr Koo. How then, can it be said that Mr Koo was required to make the return, as the language of s 82A(1)(a) dictates? 68. According to the CIR, the answer lies in s 57(1). In the relevant year, it is said, that provision made Mr Koo (and a number of other people) “answerable” for doing all such acts as were required to be done under the IRO by NT[32]. 69. The first difficulty with this response is that there is nothing in s 57(1) to single out Mr Koo as subject to a requirement to make NT’s tax return. Whatever be the precise obligation that follows s 57(1), it is one that falls on all the members of the class to which it refers. The CIR says that, although it is a collective obligation, if it is discharged by one of the members of the class the others are relieved of further obligation. 70. A second difficulty is that, since the CIR contends that it was NT that was “primarily required to make the return”[33], the collective requirement on the class of persons referred to in s 57(1) must be secondary. This results in something of a conceptual tangle. In the CIR’s Printed Case, which argues that NT is vicariously liable for the act of signing and making done by its officer (relevantly, Mr Koo), the following appears: “17. Vicarious liability is therefore a form of secondary liability, the primary liability is on and remains with the person who has physically committed the act. The act is and remains that of the ‘agent’, but for which the company is also liable secondarily if the requirements for vicarious liability are satisfied”. (Emphasis in original). In the result, apparently, a primary requirement on the company gives rise to secondary liability in the company. 71. A third difficulty is that s 57(1) does not, in terms, impose a legal obligation on the officers whom it identifies, either collectively or individually, primarily or secondarily, to do anything. It makes them “answerable” for doing certain acts which are required to be done by a corporation. As submitted by the amici curiae[34], it facilitates the exercise by the revenue authorities of their functions in relation to a corporation and confers authority on certain individuals to bind the corporation for the purposes of the IRO. However, it is not a charging provision. In other jurisdictions, similar language has been held not to make officers of corporations liable to pay the corporation’s tax[35]. 72. There is no provision in the IRO which directly visits any legal sanction upon the officers of a corporation in the event that the corporation makes no tax return. Section 82A(1)(d) applies only to the addressee of the section 51(1) notice. Furthermore, it is not suggested by the CIR that s 82A exposes to liability for additional tax any of the officers referred to in s 57(1) other than the one who signs the corporation’s return. If the concept of answerability has the amplitude for which the CIR contends, it is difficult to understand why potential liability for additional tax should not affect all of them. 73. As the Court of Appeal pointed out[36], there are provisions in the IRO which expressly impose a requirement on certain persons to do acts (including the making of returns) on behalf of others. Section 22(2) requires the precedent partner of a partnership to make and deliver a statement of the profits or losses of the partnership. Section 53 requires the trustee of an incapacitated person to do any act or thing required by the IRO to be done by the incapacitated person. It also requires the local agent of a non-resident person to do any act or thing required by the IRO to be done by the non-resident person. This, it was said correctly, underlines the distinction between the responsibility of ensuring that a company makes a return and an obligation to make a return on behalf of the company[37]. 74. The argument for the CIR does not go so far as to suggest that it is impossible for a corporation to make a return directly rather than through the agency of an individual. In the CIR’s Printed Case it is said[38]: “9. In the context of a corporate taxpayer, when a director or a secretary or a manager or a liquidator (“Officer”) physically signs a document (“Signer”), the Signer may be acting as the corporation, or as a separate person acting as an agent on behalf of the corporation”. (Emphasis in original). Rather, the contention is that, on the true construction of the IRO, and on the facts and in the circumstances of the present case, the returns were required to be made, and were made, by Messrs Koo and Murakami respectively as agents on behalf of NT and not by NT itself. There is no warrant for a conclusion that s 57(1) has this consequence. 75. Section 51(5) does not assist the CIR. That section has the effect that, if a return is made by one person on behalf of another, then the former is deemed to have authority to make the return. It also facilitates proof that someone who signs a return knows what is in it. It does not address the present issue. M. Conclusion and disposition 76. The Court of First Instance and the Court of Appeal were correct to decide that, in the light of the relevant provisions of the IRO, and in the events that occurred, the returns in question were required to be made, and were made, by NT. They were not required to be made, and were not made, by the Applicants on behalf of NT. The statutory language relied upon in support of a different conclusion does not bear the weight which the CIR seeks to put upon it. 77. The appeal should be dismissed. Chief Justice Cheung: 78. Accordingly, the appeal is dismissed. Mr Stewart Wong SC and Ms Elizabeth Cheung, instructed by the Department of Justice, for the Respondent (Appellant) 1st and 2nd Applicants (1st and 2nd Respondents), both acting in person, absent Mr Eugene Fung SC and Mr John Leung, as Amici Curiae [1] Lam VP, Chu JA and Barma JA [2021] 3 HKLRD 642 (“the CA Judgment”) [2] [2018] HKCFI 2593, 23 November 2018 (“the CFI Judgment”) [3] Board of Review, Cases D32/16, D33/16 [4] Board of Review, Case D41/08, par 55. [5] Before G Lam J, the CIR attempted to rely, in the alternative, upon s 82A(1)(c) but the learned judge held that, because of the procedure that had been followed, this argument was not open: [2018] HKCFI 2593 at pars 64-65. [6] Zhang Hong Li v DBS Bank (Hong Kong) Ltd (2019) 22 HKCFAR 392 [7] CFI Judgment at par 27 [8] CFI Judgment at par 42 [9] Ord. No 20/47 [10] Hong Kong Legislative Council Official Record of Proceedings, 20 January 1971, p 361 [11] (1937) 58 CLR 328 [12] CFI Judgment at pars 24, 25 [13] Amended Notice of Motion, 16 September 2021 [14] [2021] HKCA 1833, 10 December 2021 [15] CFI Judgment at par 61 [16] Cap 221 [17] CA Judgment at par 55 [18] CFI Judgment at par 45 [19] CFI Judgment at par 46 [20] CFI Judgment at par 59 [21] CFI Judgment at par 62 [22] CFI Judgment at par 63 [23] CA Judgment at pars 25-29 [24] CA Judgment at pars 38-44 [25] CA Judgment at par 39 [26] CIR’s Printed Case par 19 [27] CIR’s Printed Case par 29 [28] IRO s 82(1) [29] CIR’s Printed Case par 29 [30] CIR’s Printed Case par 30 [31] CIR’s Printed Case par 19 [32] CIR’s Printed Case pars 47 to 63 [33] CIR’s Printed Case par 29 [34] Printed Case of amici curiae, par 51 [35] Income Tax Commissioner v Chatani (1980) 31 WIR 337; In re Wayte (Holdings) Limited (In Receivership) [1986] IR 448; De Silva v The Commissioner of Income Tax (1951) 53 NLR 280. [36] CA Judgment at par 40 [37] CA Judgment at pars 39-40 [38] CIR’s Printed Case par 9
Chief Justice Ma: 1. I agree with the judgments of Mr Justice Tang PJ and Lord Hoffmann NPJ. Mr Justice Tang PJ: Introduction 2. By a generally endorsed writ issued on 1 September 2011, Greater Beijing Region Expressways Limited (“GBRE”), claimed damages against the 1st and 2nd defendants for professional negligence as solicitors and barrister respectively between 2005or 2006. By a Deed of Assignment dated 18 January 2012 GBRE’s causes of action against the defendants were assigned to Beijing Tong Gang Da Sheng Trade Co Ltd. A notice of the Assignment was given to the defendants on 16 August 2012. The writ which had not been served was then amended on 17 August 2012 and Beijing Tong Gang became the plaintiff (“the Plaintiff”) in place of GBRE which ceased to be a party. The statement of claim was served on 14 November 2012.[1] 3. In March 2013, both the 1st and 2nd defendants, by separate summonses, applied to strike out the Plaintiff’s claim, essentially on the ground that the Assignment was champertous and void. Shortly before the commencement of the hearing of these summonses, the Plaintiff applied for leave to add GBRE as a plaintiff (“the joinder application”)[2]. The joinder application was made on the basis of RHCOrder 15 rules 6 and 7, Order 20 rule 5 and under the inherent jurisdiction of the court.[3] Although it was not possible to state precisely when the limitation periods in respect of the causes of action covered by the writ had expired, the application was made on the basis that they had expired by the date of the joinder application such that if GBRE were to issue a new writ on that date it would have been met with a successful limitation defence. 4. The strike out summonses were heard before Deputy High Court Judge Le Pichon on 28 January 2014. At the conclusion of the hearing, the learned Deputy Judge struck out the writ and the statement of claim on the ground that the Assignment was champertous and void but that the order was drawn up until after the hearing of the joinder application. 5. The joinder application was heard on 25 April 2014 and on 12 May 2014, the learned Deputy Judge dismissed the application. Her Ladyship said: “As the limitation period expired in 2011/2012, it is now too late.”[4] 6. The Plaintiff appealed against the decision to strike out as well as the dismissal of the joinder application. On 22 May 2015, the Court of Appeal[5] affirmed the decision to strike out the writ and the statement of claim[6] but allowed the appeal against the dismissal of the joinder application. The Court of Appeal followed Asia-Pac Infrastructure Development Ltd v Shearman & Sterling (a firm) [2012] 3 HKLRD 321, and held that since the joinder application did not involve a new cause of action, no issue of limitation arose and: “Order 20 rules 5(2) to (5) do not apply and it is not necessary to deal with the alternative submission of Mr Carolan[7] under Order 20 rule 5(3).” [8] 7. Against that decision, on 3 February 2016 the Appeal Committee[9] granted leave to the 1st and 2nd defendants to appeal so that this Court could consider whether the issue of limitation was fatal to the joinder application[10] and if so whether, as the Plaintiff contended, we should affirm the decision because leave should be granted under Order 20 rule 5(3) to permit joinder. 8. At the conclusion of the hearing, we allowed the defendants’ appeals. These are my reasons. Limitation 9. Under s 4 of the Limitation Ordinance Cap 347 (“the Ordinance”), no actions founded on simple contract or tort may be brought after the expiration of six years from the date on which the cause of action accrued. It is not disputed that by the time of the joinder application it was too late for a new action to be brought against the defendants. However in respect of actions which had been commenced within time, s 35 of the Ordinance (“s 35”)[11] permits new claims to be made in a pending action if certain conditions are satisfied. Section 35(1)(b) provides for relation back such that any new claim made in the course of any action is deemed to have been commenced on the same date as the original action. The issues in these appeals are (a) whether the joinder application involved a new claim which would be caught by limitation;(b) how section 35 applies, and (c) whether the requirements of Order 20 rule 5(3) are satisfied. 10. A new claim is defined by s 35(2): “In this section a new claim means any claim ... involving either – (a) the addition or substitution of a new cause of action; or (b) the addition or substitution of a new party, ...” 11. Section 35(3) states the general position regarding new claims and limitation: “Except as provided by ... rules of court, the court shall not allow a new claim ... , to be made in the course of any action after the expiry of any time limit under this Ordinance which would affect a new action to enforce that claim.” 12. Mr Victor Dawes SC with Mr James Man who appeared for the defendants submitted that the addition of GBRE or the substitution of the plaintiff by GBRE falls plainly within the definition of new claim and the joinder fell outside Order 20 rule 5(3). 13. Mr SussexSC leading Mr Paul Carolan submitted that s 35 did not apply because the joinder did not involve a new cause of action, that GBRE wasin any event not a new party and if those arguments fail, the joinder which was in effect an application to correct the name of a party could be permitted under Order 20 rule 5(3) : “... if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued.” Section 35ofthe Ordinance 14. Mr Sussex relied on the remarks of Millett LJ, as he then was, in Yorkshire Regional Health Authority v Fairclough Building Ltd [1996] 1 WLR 210 at 218 E-F that the equivalent of s 35(2) of the Ordinance “cannot be construed literally” and that: “The first limb must therefore be confined to claims which involve a new cause of action but which do not involve the addition or substitution of a new party. Claims which involve the addition or substitution of a new party as well as a new cause of action fall within the second limb. The question is whether the second limb also includes claims which involve the addition or substitution of a new party but which do not involve a new cause of action. In my opinion it does not.” 15. Relying on such remarks, the plaintiff submitted that the joinder would not give rise to a new claim within the meaning of s 35 because it did not involve a new cause of action; accordingly the limitation provisions of s 35 did not apply and the Court of Appeal was right to grant leave under Order 20 rule 5(1) to permit the joinder. I shall proceed on the assumption that the joinder did not involve a new cause of action and take the causes of action as they appeared on the writ. 16. Yorkshire Regional Health Authority was concerned with an application to substitute a plaintiff under Order 15 rule 7.[12] The substitution was necessary because the cause of action[13] had become vested in a National Health Service trust which was established to assume responsibility for the authority. It was argued on behalf of the defendants in that case that the substitution of National Health Service trust came within the definition of a new claim under s 35(2) and should only be allowed if the conditions imposed by s 35 were satisfied,[14]thus, the amendment could not be made after the expiration of the limitation period unless it was permitted by s 35, or by rules of court.[15] It was further argued that since Order 15 rule 6 and Order 20 rule 5 formed anexhaustive code governing amendments after the expiration of the limitation period (and since Order 15 rule 7 was not a part of this code) limitation was fatal to the application in that case. 17. It is necessary to look at some other provisions of s 35: “(5) Rules of court may provide for allowing a new claim to which (6) The conditions referred to in subsection (5) are – (a) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment; and (b) in the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action. (7) The addition or substitution of a new party shall not be regarded for the purposes of subsection (6)(b) as necessary for the determination of the original action unless either – (a) the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party's name; or (b) any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action. (8) Subject to subsection (5), rules of court may provide for allowing a party to any action to claim relief in a new capacity in respect of a new cause of action notwithstanding that he had no title to make that claim at the date of commencement of the action. (9) Subsection (8) shall not be taken as prejudicing the power of rules of court to provide for allowing a party to claim relief in a new capacity without adding or substituting a new cause of action.” 18. A similar submission to that made by the defendants in Yorkshire Regional Health Authoritywas rejected by Mance J, as he then was, in The Choko Star [1996] 1 WLR 774. Mance J said Order 15 rule 7: “... deals with the most basic and obvious situation where a person should be allowed to continue to conduct litigation properly commenced by or against another.”[16] 19. Order 15 rule 7 provides: “(1) Where a party to an action dies or becomes bankrupt but the cause of action survives, the action shall not abate by reason of the death or bankruptcy. (2) Where at any stage of the proceedings in any cause or matter the interest or liability of any party is assigned or transmitted to or devolves upon some other person, the Court may, if it thinks it necessary in order to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, order that other person to be made a party to the cause or matter and the proceedings to be carried on as if he had been substituted for the first mentioned party.” 20. Mance J said: “Returning to the scheme of the rulesofcourt, I conclude that the type of situation covered by Ord. 15, r. 7, is one for which the rules would naturally be expected to cater, and that in this context it should be irrelevant whether or not the limitation period had expired prior to the assignment, transmission or devolution in question. All that should matter is that the original litigation was commenced in time. In my view the wording of Ord. 15, r. 7 is in these respects expressed in precisely the way that one would expect. It is apt to cover any change necessary as a result of any such assignment, transmission or devolution at any stage in proceedings. Not only is there no restriction in this language, read literally. Any restriction by reference to the limitation makes absolutely no sense and would lead to major absurdities, as in the present and many other cases which can be envisaged.”[17] “The absence of any reference to limitation in Ord. 15, r. 7, compared with both Ord. 20, r. 5 and Ord. 15, r. 6, is explained, as I have indicated, by the different subject matter on which each focuses. Ord. 15, r. 7 deals with a situation where the proceedings as originally constituted were in perfect order and subsequent changes require to be catered for: it is self-evident that limitation must be irrelevant. The other rules focus on situations where the proceedings as originally constituted were in some way defective or inadequate, and therefore it might be said that their correction or amendment worked an injustice in exposing a defendant to some new claim which could and should have been put forward properly within the limitation period.”[18] 21. Mance J then concluded that Order 15 rule 7 reflected precisely the criteria under the equivalent ofs 35(6)(b) of the Ordinance that “the addition or substitution of the new party is necessary for the determination of the original action” because: “ ... (b) any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action.”[19] 22. It is noteworthy that apart from the analysis of the effect of s35(2) set out in para 10 above, MillettLJ also approved of this part of Mance J’s judgment: “The substitution of a new party who has succeeded to the interest or liability of a former party to existing proceedings plainly satisfies the condition specified in section35(6)(b) and therefore the condition specified in section35(5)(b); and this is enough.”[20] 23. With respect, I agree. In my view, an application to add or substitute a party would result in a new claim as defined in s 35(2) and that if the application is made after the expiration of the limitation period current at the time of the commencement of the action, in order for the addition or substitution not to fall foul of limitation, it must come within rules of court as envisaged under s 35(3) &(5). Order 15 rule 7 is such a rule, being referable to s35(6)(b), and (7)(b). Other rules include Order 15 rules 6(5)and(6), and Order 20 rule 5. 24. As for Order 15 rule 6(4) - (6), Mance J said they were clearly designed to cover under s 35(6) of the Act of 1980, the five situations for which the Law Reform Committee in its 21stReport [Final Report on Limitation of Actions (1977) Cmnd. 6923] had recommended that provision should be made.[21] 25. Order 15 rule 6 : “(1) No cause or matter shall be defeated by reason of the misjoinder or nonjoinder of any party; and the Court may in any cause or matter determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to the cause or matter. ... (5) No person shall be added or substituted as a party after the expiry of any relevant period of limitation unless either – (a) the relevant period was current at the date when proceedings were commenced and it is necessary for the determination of the action that the new party should be added, or substituted, or ... (6) The addition or substitution of a new party shall be treated as necessary for the purposes of paragraph (5)(a) if, and only if, the Court is satisfied that – (a) the new party is a necessary party to the action in that property is vested in him at law or in equity and the plaintiff’s claim in respect of an equitable interest in that property is liable to be defeated unless the new party is joined, or (b) the relevant cause of action is vested in the new party and the plaintiff jointly but not severally, or (c) the new party is the Secretary for Justice and the proceedings should have been brought by relator proceedings in his name, or (d) the new party is a company in which the plaintiff is a shareholder and on whose behalf the plaintiff is suing to enforce a right vested in the company, or (e) the new party is sued jointly with the defendant and is not also liable severally with him and failure to join the new party might render the claim unenforceable.” 26. As for Order 20 rule 5, Mance J noted that Hobhouse J, as he then was had said : “... Ord. 20, r. 5[22] must now be read with the [1980] Act and as implicitly (but inelegantly) giving effect to the first alternative, (a), in section 35(6). The result is that the rule relevant to the present case, Ord. 20, r. 5, must be construed as being made both under the general power to regulate procedure and under the more specific power given for the purposes of that Act by section 35 of the Act of 1980.”[23] 27. Thus, it can be seen how these rules of court – Order15 rules 6 and 7, and Order20 rule 5 – fitinto the scheme of s35. The Plaintiff’s submissions, however, seek to rely on that passage in the judgment of Millett LJ in Yorkshire Regional Health Authority earlier set out[24] for the proposition that only where the addition or substitution of a new party also involves the addition of a new cause of action will this constitute a new claim for the purposes ofs35(2)(b) of the Ordinance and thereby be subject to the bar in s35(3). 28. Evans LJ agreed with the judgment of Millett LJ adding some further observations of his own. The third member of the Court of Appeal, NeillLJ, agreed with both judgments. 29. The Choko Star and Yorkshire Regional Health Authority were referred to by Lord Walker of Gestingthorpe JSC in the Supreme Court in Roberts v Gill & Co [2011] AC 240. Lord Walker, after stating that he had no doubt the Court of Appeal in Yorkshire Regional Health Authority was right in rejecting the argument that Order 15 rule 6 and Order 20 rule 5 formed a comprehensive code governing amendments after the expiration of the limitation period, however,added: “I am not sure that I agree with (or indeed understand) the refinements of Millett LJ’s reasoning at p 218.”[25] 30. It may be that this passage is a reference to the reasoning in that part of MillettLJ’s judgment relied on by the Plaintiff in the present case and casts doubt on it. If so, I share this doubt. 31. However, this reasoning appears to have been adopted in Hong Kong. In Asia-Pac, four plaintiffs sued the defendants for professional negligence. In the course of the proceedings, three of the plaintiffs assigned their causes of action against the defendants to the 1st plaintiff. The 1st plaintiff applied for leave to amend under Order 15 rule 7 which was refused for reasons which do not concern us. The Court of Appeal allowed his appeal. In his judgment,[26] Cheung CJHC examined the judgments of Mance J in The Choko Star, Millett LJ and Evans LJ in Yorkshire Regional Health Authority and Lord Walker in Roberts.[27] His Lordship concluded that on these authorities, the appeal must be allowed. Cheung CJHC said that in The Choko Star Mance J: “concluded that the merger and automatic succession by the new company gave rise to no new cause of action and thus the limitation point was wholly irrelevant.”[28] 32. Cheung CJHC then cited the passage from Mance J’s judgment which I have quoted above.[29] Mance J proceeded on the basis the substitution of a new party under Order 15 rule 7 was permitted under Order 15 rule 7 because Order 15 rule 7 was a rule covered by s 35(5) because it reflected s35(6)(b) of the 1980 Act. What Mance J thought distinguished Order 15 rule 7 from Order 15 rule 6 and Order 20 rule 5 was that Order 15 rule 7 was concerned with proceedings which as originally constituted was in perfect order and subsequent vicissitudes of life, such as death, bankruptcy or nationalization, or such like, had to be catered for. 33. Cheung CJHC then cited the following passages from the judgments of Millett LJ and Evans LJ. Millett LJ: “Ord 15, r. 7 does not contain, and none of its predecessors ever has contained, any reference to limitation. This is as it should be, since the circumstances in which the rule may be invoked do not give rise to any question of limitation. Even though the rule permits a new party to be substituted for an original party, this does not involve a new cause of action; the new party is substituted because he has succeeded to a claim or liability already represented in the action and sues or is sued in respect of the existing cause of action. The substitution of the successor does not deprive the defendant of an accrued limitation defence. There is no good reason why the substitution should not be made at any stage of the proceedings and whether a relevant period of limitation has expired or not; the expiry of the limitation period is completely irrelevant.”[30] Evans LJ at 221 B/C-E: “ ... When a litigant dies, or becomes bankrupt, the litigation does not cease, unless the cause of action is personal to him. It may be carried on by his personal representatives, or his trustee in bankruptcy, in their own names. There is, not surprisingly, provision in the Rules of the Supreme Court for the change in the identity of the party to be duly made: R.S.C., Ord. 15, r. 7. A corporate plaintiff does not die, but it may cease to exist. A particular example is when the corporation, which is a creature of statute, is terminated by statute and its rights and liabilities are transferred to some other person. When that occurs, the new person may become a party to pending proceedings in place of the old. Although the identity of the party changes, the nature of the claim does not. It is, in legal terms, the same cause of action as it was before. There is no question of a new claim or cause of action being asserted, even though in the particular circumstances the claim is being made by a different person. Because it is the same cause of action, there is no scope for a limitation defence. The defendant cannot say that the time for bringing proceedings has expired when the new claimant replaces the old, because the essential point is that no new claim is being put forward.” 34. These remarks by Millett LJ and Evans LJ supported the apparent conclusion that s35(2) and(3)would, as far as new parties were concerned, only bite if there was also a new cause of action. This was a conclusion that underlies the decision of the Court of Appeal and Asia-Pac: see the section of the judgment headed “Assignments did not create new causes of action”. 35. With respect, I do not agree with this view. One starts with the basics. Section 35(1) covers “any new claim” as defined in s 35(2). Section 35(2)(a) is straight-forward, a new claim is any claim involving the addition or substitution of a new cause of action. Section 35(2)(b) is also straight-forward: a new claim is one which involves “the addition or substitution of a new party”. But where limitation becomes relevant, s35(3) states the general position. The particular situations in which limitation will not be a bar are then set out in s35(4) to (12). Section 35(2) should be construed in the context of s 35 as a whole. Section 35 clearly distinguishes and keeps separate the addition or substitution of a new cause of action from the addition or substitution of a new party. For example, s 35(6)(a) in respect of the addition or substitution of a new cause of action, and s 35(6)(b) and (7)(a) or (b) in the case of the addition or substitution of a new party.[31] A new claim under s 35(2)(b) must satisfy the conditions of s 35(6)(b) and (7). New claims under s 35(2)(a) have to come within s 35(6)(a). Moreover, s 35(7)(b) sits uncomfortably with Millett LJ’s construction since s 35(7)(b) clearly envisages the maintenance of the “claim already made in the original action”. Furthermore, if the result of Millett LJ’s construction was intended,s 35(2) could simply define a new claim as one which involves the addition or substitution of a new cause of action. Section 35 could then go on to provide that a new action has to satisfy s 35(6)(a) unless where the addition or the substitution of a new party was also involved in which case the provisions of s 35(6)(b) and s 35(7)(a) or (b) have to be satisfied too. 36. In Asia-Pac, Cheung CJHC also cited the following passage from Lord Walker at para 104: “In the ordinary case of a simple assignment or transmission of a cause of action after proceedings have been commenced, no question of limitation arises. ...” 37. With respect, this statement does not throw light on the correct interpretation of s35(2). It is correct that in the factual situations covered under Order15 rule7, there is already a pre-existing claim in the action that is sought to be assigned, transmitted or to devolve to the new party and that as Mance J explained Order 15 rule 7 is concerned with situations “where the proceedings as originally constituted were in perfect order”.[32] Order 15 rule 7 long preceded the 1980 Act and Mance J concluded there was no reason why “why it should not continue to fulfil the same role for the purposes of the Act of 1980”.[33] It is in this sense only that no question of limitation arises. [34] However, the fact that Order 15 rule 7 does not involve a new cause of action does not mean that the limitation bar in s 35 only applies to an amendment to add or substitute a new party if the amendment also involves a new cause of action. One does not follow from the other. 38. It follows that, with respect, I cannot agree with the Court of Appeal in the present case which purported to followAsia-Pac, that because no new cause of action was involved in the joinder application, s 35 did not apply. Mr Sussex accepted that he could not succeed on this submission unless we agree with the construction of s 35(2) by the English Court of Appeal in Yorkshire Regional Health Authority which was adopted in Asia-Pac. 39. As I have said Mr Sussex accepted that Order 15 rule 7 did not apply to the joinder application so I now turn to his submission that GBRE was not a new party or that Order 20 rule 5(3) applies because there was a genuine mistake. New Party 40. Mr Sussex also submitted that s 35 did not apply because GBRE was not a new party because the writ was originally issued in its name. For this reason it was said GBRE could not be regarded as a new party. I do not believe the fact that GBRE was once a party made any difference. As a result of the amendment on 17 August 2012, GBRE had ceased to be a party. By the joinder application it was sought to join GBRE as a party. GBRE was as much a new party as if the original writ was issued in the Plaintiff’s name after the impugned assignment. Order 20 rule 5 41. Lastly, Mr Sussex submitted that leave to amend should be granted under Order 20 rule 5(3). It is necessary to consider the provisions Order 20 rule 5 in some detail: “(1) Subject to Order 15, rules 6, 7 and 8 and the following provisions of this rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleadings, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct. (2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so. (3) An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued. (4) An amendment to alter the capacity in which a party sues may be allowed under paragraph (2) if the new capacity is one which that party had at the date of the commencement of the proceedings or has since acquired. (5) An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.” 42. I note first that Order 20 rule 5(1) is subject to the other provisions of Order 20 rule 5. Order 20 rule 5(2) enables a party to be joined or substituted by an application made “after any relevant period of limitation current at the date of issue of the writ has expired” if it comes within Order 20 rule 5(3) which in the present case requires that there was a genuine mistake in the name. Neither rule 5(2) or (3) was concerned with the addition or substitution of a new cause of action. If a new cause of action was involved that would fall under rule 5(5). Mr Sussex relies on Order 20 rule 5(1) and the Court of Appeal granted leave under Order 20 rule 5(1) because it was of the view that no question of limitation was involved because the cause of action remained the same. But, whether Order 20 rule 5(3) is triggered depended on whether the application was made “after any relevant period of limitation current at the date of issue of the writ had expired” and not whether a new cause of action was involved. It is not disputed that, here, the application was made after the relevant period of action current at the date of the writ had expired. 43. That being so, in my view, the Plaintiff has to show that “the mistake sought to be corrected was a genuine mistake”. It is not suggested that the defendants had been misled in any way so we are not concerned with the other requirements of Order 20 rule 5(3). The authorities are clear, the mistake has to be a mistake as to the name rather than the identity of the party or as to legal rights. Indeed, s 35(7)(a) says so expressly: “the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party’s name; ...”[35] 44. In Adelson v Associated Newspapers Ltd [2008] 1 WLR 585, in the English Court of Appeal,[36] Lord Phillips of Worth Matravers CJ delivering the judgment of the court said, that under Order 20 rule 5: “31. ... The mistake envisaged in relation to the name of the claimant is one under which the name used for the claimant is not the name of the person wishing to sue. ... ... 33. ... the mistake that the rule envisages is one of nomenclature, not of identification. ...” 45. He explained that: “29. ... An error of identification will occur where a claimant identifies an individual as the person who has caused him an injury, intends to sue that person, describes him in the pleadings by the correct name, but then discovers that he has identified the wrong person as the person who has injured him. An error of nomenclature occurs where the claimant identifies the correct person as having caused him the injury, but describes him in the pleadings by the wrong name.” 46. Here, there was no mistake in the relevant sense, the Plaintiff wished to sue as the assignee, sued as such and was correctly named. The mistake was the belief that the assignment was valid and effective. 47. The Aiolos [1983] 2 Lloyd’s Rep 25 is directly in point. There, the plaintiff insurers sued in its own name relying on rights of subrogation under policies of insurance in respect of certain cargoes. After the expiration of the limitation periods, the plaintiff sought leave to amend, inter alia, relying on Order 20 rule 5(3) to add the names of the cargo buyers. The application was refused. Oliver LJ, as he then was, said it was: “... a case of an erroneous belief that the plaintiff, because he was in fact what he was thought to be, that is, the insurer, had as a result of that certain legal rights which he did not in fact have. There was therefore no error either as to the name or as to the identity of the party which fell to be corrected, but simply an error of law as to the rights possessed by the correctly identified party. Order 20, r. 5(3) simply does not extend to this sort of error and the application under this rule must, therefore, fail.”[37] 48. Here, the Plaintiff had made a mistake but it was not a mistake in the name and Order 20 rule 5(3) did not apply. Mr Justice Chan NPJ: 49. I agree with the judgment of Mr Justice Tang PJ and the judgment of Lord Hoffmann NPJ. Mr Justice Stock NPJ: 50. I agree with the judgments of Mr Justice Tang PJ and Lord Hoffmann NPJ. Lord Hoffmann NPJ: 51. I agreed after the hearing that this appeal should be allowed and the order of Deputy Judge Le Pichon refusing the application to amend restored. As we are differing from a unanimous Court of Appeal, I shall state my own reasons and in particular explain why in my opinion the authorities relied upon by the Court of Appeal do not support its conclusion. For this purpose I gratefully adopt the statement of the facts in the judgment of Tang PJ. 52. Section 35(3) of the Limitation Ordinance Cap 347 (“the Ordinance”) reproduces section 35(3) of the English Limitation Act 1980. It provides that “[e]xcept as provided by section 30 or by rules of court” the court shall not allow a “new claim” to be made “after the expiry of any time limit under this Ordinance which would affect a new action to enforce that claim.” The equivalent English provision was a codification, with some changes recommended by the Law Reform Committee, of a long standing rule of practice that the court would not allow an amendment which would deprive a party of a limitation defence: see Weldon v. Neal(1887) 19 Q.B.D. 394. 53. Until the Limitation Act 1980, no one thought there was any inconsistency between this rule of practice and the power of the court, whether before or after the limitation period, to substitute as plaintiff a person who had succeeded to the interest of a party to the litigation. In 1980 this power was embodied in a rule of court (RSC Ord 15, r. 7, the equivalent of RHC Ord 15 r. 7 in Hong Kong) which went back at least to the Common Law Procedure Act 1852. Examples of its use were to substitute a personal representative who had succeeded to a deceased party or a company which had acquired the interest of another company by universal succession. 54. The reason why there was no inconsistency was because the substitution of the new party did not deprive the defendant of a limitation defence. He was in exactly the same position as he was before the substitution, namely, that he was defendant to proceedings on the same cause of action which had been started before the expiry of the limitation period. The cause of action might be good or bad, but it would not have been improved by the substitution. 55. The language of the 1980 Act, however, caused a problem. Section 35(3) says that the court should not allow a “new claim” to be made after the expiry of the limitation period. It defined a “new claim” to include a claim which involves the “substitution” of a new party. If one read this literally to include a new party who had succeeded to the interest of an existing party, it would mean, for example, that an executor could not be substituted for an existing party who died after the limitation period had expired, even though he had commenced the proceedings in good time. That would obviously have been an extraordinary result. 56. It was however the conclusion reached by His Honour Judge Diamond in Toprak Enerji Sanayi A.S. v. Sale Tilney Technology Plc [1994] 1 WLR 840. But soon afterwards, in The Choko Star [1996] 1 WLR 774, Mance J disagreed and held that section 35 could not have been intended to cut down the long-standing power of amendment under RSC Ord 15, r. 7. It is not easy to summarise his lengthy judgement but he appears to have started by accepting that the substitution involved a “new claim” as defined, by virtue of it involving the substitution of a party: see p. 778C. He held nevertheless that RSC Ord 15, r. 7 survived intact as an exception to the prohibition in section 35(3). 57. The present case is very different. Mr Sussex SC accepted that he did not come within RHC Ord 15, r. 7. The rule applies where “the interest...of any party is assigned or transmitted to or devolves upon some other person”. But the plaintiff had no interest which it could transmit to GBRE. It had no interest at all. The invalidity of the assignment from GBRE to the plaintiff meant that the plaintiff might as well have been a complete stranger. 58. Furthermore an amendment to substitute GBRE would have fallen foul of the old rule of practice. The effect would have been to deprive the defendants of a limitation defence. Before the amendment, they were being sued by a party who had no cause of action. Its action was liable to be struck out. The amendment would have substituted a party who could at any rate assert a cause of action, whatever its merits might turn out to be. And that party would be allowed to take up the proceedings after the limitation period had expired. 59. The peculiarity of this case is that GBRE was at an earlier stage a party to the proceedings. It commenced the proceedings within the limitation period. But then it dropped out – as it happens, even before service of the writ – removed itself from the action and substituted the plaintiff. So Mr Sussex submits, and the Court of Appeal accepted, that it should be allowed to come back in the action to pursue the same cause of action as that with which it began. 60. In my opinion, however, it does not matter that it was once a party to the proceedings. One has to look at the position as it was when the application to amend was made. At that time, GBRE was a stranger to the proceedings. It had substituted the name of the plaintiff on the basis of the purported assignment but the champertous nature of the transaction meant that the plaintiff did not acquire GBRE’s cause of action. The only effective act was that it dropped out of the action. 61. Mr Sussex was inclined to accept that if GBRE had simply discontinued, it could not have started another action after the limitation period had expired. But, like the judge, I cannot see the difference between this and having oneself removed from the proceedings without leaving anyone entitled to carry it on. In the Court of Appeal, Kwan JA said (at para 63) that GBRE had not “abandoned the action” because “one way or other, either the assignor or the assignee would want to proceed with the action”. The defendants were not “lulled into a false sense of security”. But the Limitation Ordinance is not concerned with the parties’ states of mind or whether a defendant is lulled into a false sense of security. A party who starts or seeks to join proceedings after the expiry of the limitation period is barred simply because he is too late. If GBRE wanted to preserve the option of prosecuting the action, it should have remained a party. Of course it would then have been liable for costs if the action failed. This might have defeated the object of the obscure forensic manoeuvres by which the plaintiff had been put forward to prosecute the claim. 62. The Court of Appeal relied upon the judgment of Millett LJ in Yorkshire Regional Health Authority v Fairclough Building Ltd [1996] 1 WLR 210, which involved the same point as had come before Mance J in The Choko Star, namely a universal succession to a corporate body which had been carrying on the action. However, Millett LJ did not approach the question in the same way as Mance J. He did not accept that the substitution involved a “new claim” within the meaning of section 35. The reasoning is not easy to follow (in Roberts v Gill & Co. [2011] 1 AC 240, 272H Lord Walker of Gestingthorpe confessed to not understanding it) but it produced the conclusion that “a claim involving the...substitution of a new party” meant the substitution of a new party which also involves a new cause of action. So Mr Sussex says that the amendment did not involve a new cause of action. It was the same cause of action as that which GBRE had asserted when it commenced the proceedings. 63. In my view, it all depends on what you mean by “the same cause of action”. If it means the same cause of action as that of the party for whom the new party is being substituted, then I agree. That is precisely the position covered by RSC Ord 15, r. 7. On the other hand, if it means a cause of action which was at some past stage being asserted by a party to the action and from which he then dropped out without effectually passing on the cause of action to someone else, then I do not agree. Furthermore, I do not think Millett LJ had the present highly unusual situation in mind. The way he put it was (at p 218G): “The question is whether the second limb [of section 35(2)] also includes claims which involve the addition or substitution of a new party but which do not involve a new cause of action. In my opinion it does not. As I have already pointed out, there are two entirely different kinds of substitution provided for by the rules, one where the party substituted has succeeded to a claim or liability already represented in the action, and one where he has not. It would be outside the scope of the Act of 1980 to alter the law relating to the former kind of substitution, which involves no question of limitation.” 64. It is clear from this passage that what Millett LJ had in mind was a substitution for a party who had a cause of action “already represented in the action.” That is to say, the situation covered by RSC Ord 15, r. 7. 65. Evans LJ, who gave the other judgment in the Yorkshire Regional Health Authority v Fairclough Building Ltd case, also thought that a substitution within RSC Ord 15, r. 7 was not a “new claim” within the meaning of section 35, although for the slightly different reason that it was not a “substitution” for the purposes of the Act. He went on to say (at p. 222H): “The Limitation Act 1980 simply does not apply when one party is substituted for another in order to proceed with the same claim or cause of action as before.” 66. It seems to me clear that by “as before”, Evans LJ meant “as before the substitution” and not “at some time in the past”. 67. I agree that a case within RSC Ord. 15, r. 7 falls outside section 35. Whether this is because, as a matter of construction of section 35, it falls outside the definition of a new claim (as Millett and Evans LJJ thought) or whether it is a sanctioned exception (as Mance J thought), does not seem to me to matter. Either way, I have no doubt that the power of the court under RSC Ord 15, r. 7 can be exercised whether the limitation period has expired or not. But I do not think that this extends to the substitution of a new party outside RSC Ord 15. r. 7 and I do not think that Millett LJ or Evans LJ had such a claim in mind. 68. These cases were followed by the Hong Kong Court of Appeal in Asia-Pac Infrastructure Development Ltd v Shearman and Sterling (a firm) [2012] 3 HKLRD 321, in which three of the plaintiffs assigned their causes of action to the fourth plaintiff. This was a straightforward Ord 15, r. 7 case in which the substitution of the assignees to pursue the same causes of action did not deprive the defendant of a limitation defence. Mr Justice Cheung CJHC rightly said that the assignments did not create new causes of action. They were the same causes of action as the four parties had been suing upon before. The difference from the present case is that the cause of action upon which GBRE proposes to sue is not the cause of action which the plaintiff had been suing on before. Before the amendment application, no one had been suing on that cause of action. It is the cause of action upon which GBRE had been suing eighteen months earlier, but that is not the same thing. 69. The proposed amendment was therefore prohibited by section 35(3) unless it could be brought within one of the exceptions. The only exception relied upon by Mr Sussex, and that not very enthusiastically, was RHC Ord. 20, r. 5(3), which allows an amendment to “correct the name of a party” where there has been a “genuine mistake”. In this case, however, there had been no mistake about the name of a party. The mistake was about the validity of the assignment from GBRE to the plaintiff. 70. For these reasons, I think the judge was right to reject the application to amend. She had no power to grant it and it is therefore unnecessary to consider the discretionary grounds on which she would in any case have refused it. Mr Victor Dawes SC and Mr James Man, instructed by Deacons, for the appellant in FACV 4 & 5 Mr Victor Dawes SC and Mr James Man, instructed by Kennedys, for the appellant in FACV 2 & 3 Mr Charles Sussex SC and Mr Paul Carolan, instructed by Cheng, Yeung & Co, for the respondent [1] The Deed of Assignment and the notice of assignment were pleaded in para 2. [2] Although the application was for GBRE to be added as a party, after the striking out of the Plaintiff, it became effectively, an application to substitute GBRE. [3] However, at Court of First Instance, in the Court of Appeal and before us, the Plaintiff relied on Order 20 rule 5(1) and (3) only. [4] CFI judgment dated 12 May 2014, para 24. [5] Cheung CJHC, Lam VP and Kwan JA. [6] There is no appeal from that concurrent decision. [7] Counsel for the plaintiff below, who with Mr Charles Sussex SC appeared for the plaintiff before us. [8] With the concurrence of Cheung CJHC and Lam VP. [9] Tang PJ, Chan NPJ and Stock NPJ. [10] Leave was also granted on the or otherwise basis, but in view of our decision it is unnecessary to deal with it. [11] Section 35 of the Ordinance is based on s 35 of the English Limitation Act 1980 (“the Act”). They are for practical purposes identical. The numbering of the sub-sections differs from sub-section (5) onwards. [12] The English rules are identical to the Hong Kong rules. [13] For breach of contract against contractors and architects. [14] 217D. [15] Section 35(3) see para 11 above. [16] 783D. [17] 785G. [18] 786B. [19] 787A. [20] 220A [21] 780E. [22] Although as Mance J pointed out Order 20 rule 5 predated the 1980 Act at 781E. [23] Hobhouse J, Payabi v Armstel Shipping Corporation[1992] 1 QB 907 at p 924. [24] Para14 above. [25] At p 272, para 104. [26] With the agreement of Yuen JA and Bharwaney J. [27] Paras 8-12. [28] 324. [29] First passage at para 20. [30] 215C-E. [31] See also the language of Order 20 rule 5(3) and (5) where the same dichotomy is maintained. [32] 786B. [33] 785H. [34] See paras 21-23 above. [35] As the quotation from Hobhouse J, para 26 above, shows, Order 20 rule 5 must be read with the 1980 Act. [36] Lord Phillips of Worth Matravers CJ, Jacob and Moses LJJ. [37] P. 30.
Chief Justice Ma: 1. I agree with the Judgment of Mr Justice Cheung PJ. Mr Justice Ribeiro PJ: 2. I agree with the Judgment of Mr Justice Cheung PJ. Mr Justice Fok PJ: 3. I agree with the Judgment of Mr Justice Cheung PJ. Mr Justice Cheung PJ: 4. The single issue of statutory construction raised in this appeal is whether the definition of “explosive” in section 2 of the Dangerous Goods Ordinance[1] applies to the offence of possession of an explosive substance under section 55(1) of the Crimes Ordinance,[2] such that possession of “smoke cakes” that emit a large volume of smoke when ignited but do not produce an explosion may amount to an offence under section 55. The facts 5. The facts are straightforward. On 16 December 2015, the appellant was stopped and searched by the police at Admiralty Centre, Queensway. He was found to be carrying in his backpack 16 smoke cakes, weighing a total of about 1 kilogramme. The smoke cakes were made of potassium chlorate and ammonium chloride in about equal proportions in weight. According to undisputed expert evidence,[3] upon igniting a 2-gramme sample in a single cake, the sample burnt vigorously and released a volume of white coloured smoke which filled an area of approximately 2 metres by 2 metres. It was not disputed that the smoke cakes were a pyrotechnic substance, that is, a substance which “functions by non-detonative, self‑sustaining, energy producing, chemical reaction and creates the effects of heat, light, sound, gas or smoke or any combination of these.”[4] In the present case, the smoke cakes produced smoke as the main effect. Importantly, there was no evidence that the smoke cakes, when ignited, would cause an explosion. However, they could cause potential physical harm.[5] 6. The appellant was charged with and convicted by a deputy magistrate[6] after trial of the offence of possession of an explosive substance under section 55 of the Crimes Ordinance.[7] Although “explosive substance” is not defined under that Ordinance, the deputy magistrate was satisfied that the definition of “explosive” in section 2 of the Dangerous Goods Ordinance was applicable. Section 2 of the latter Ordinance defines “explosive” to include “any substance used or manufactured with a view to producing a practical effect by explosion or a pyrotechnic effect”. The appellant’s appeal to the Court of First Instance was unsuccessful.[8] Like the deputy magistrate, Albert Wong J also concluded that the definition of “explosive” in the Dangerous Goods Ordinance was applicable to the offence under section 55 of the Crimes Ordinance.[9] Nonetheless, the learned judge was prepared to certify a question of law of great and general importance on the construction of section 55, that is, whether an explosive substance includes a substance used or manufactured with a view to producing a pyrotechnic effect.[10] 7. With leave granted by the Appeal Committee,[11] the appellant now appealed to this court, contending that the definition of “explosive” in section 2 of the Dangerous Goods Ordinance has no application to section 55 of the Crimes Ordinance. When the word “explosive” is given its ordinary and natural meaning, it can only refer to a substance which can produce an explosion, but not otherwise. On that basis, the smoke cakes in question were not an explosive substance. Approach to statutory interpretation 8. The modern approach to statutory interpretation is well established. The proper starting point is to look at the relevant words or provisions having regard to their context and purpose. The context of a statutory provision should be taken in its widest sense and includes the other provisions of the statute and the existing state of the law. The purpose of a statutory provision may be gleaned from the provision itself or from a relevant report of the Law Reform Commission or the explanatory memorandum to the bill or from a statement of a responsible official to the Legislative Council in respect of the bill: T v Commissioner of Police.[12] 9. Furthermore, it is a principle of statutory interpretation that a person should not be penalised except under clear law, and the court, when faced with opposing constructions of a statutory provision, should strive to avoid adopting a construction which penalises a person when the legislator’s intention to do so is doubtful.[13] Part VII of the Crimes Ordinance 10. Section 55 of the Crimes Ordinance is found in Part VII of that Ordinance entitled “Explosive Substances”. There is no definition of what “explosive” means in this term but the Part starts off with a deeming definition in section 52: “Explosive substance shall be deemed to include any materials for making any explosive substance; also any apparatus, machine, implement or materials used, or intended to be used, or adapted for causing, or aiding in causing, any explosion in or with any explosive substance; also any part of any such apparatus, machine or implement.” 11. Section 53 then makes it an offence for anyone unlawfully and maliciously to cause by any explosive substance an explosion of a nature likely to endanger life or to cause serious injury to property. The maximum sentence on conviction upon indictment is imprisonment for life. 12. Section 54 creates two further offences. Section 54(a) makes it an offence for any person unlawfully and maliciously to do an act with intent to cause by an explosive substance, or to conspire to cause by an explosive substance, an explosion of a nature likely to endanger life or to cause serious injury to property. Section 54(b) makes it an offence for a person unlawfully and maliciously to make or to have in his possession or under his control any explosive substance with intent by means thereof to endanger life or cause serious injury to property, or to enable any other person by means thereof to endanger life or cause serious injury to property. 13. The two offences under section 54 carry a maximum punishment of 20 years imprisonment. They can be committed regardless of “whether any explosion does or does not take place and whether any injury to person or property has been actually caused.” 14. Section 55, with which we are concerned, reads: “(1) Any person who makes an explosive substance or, whether or not he knows it to be an explosive substance, knowingly has in his possession or custody or under his control anything which is an explosive substance shall, unless he can show that he made it or has it in his possession or custody or under his control for a lawful object, be guilty of an offence and shall be liable on conviction upon indictment to imprisonment for 14 years, and the explosive substance shall be forfeited. (2) Where in any prosecution for an offence under subsection (1) it is proved that the accused knowingly had in his possession or custody or under his control anything whatsoever, other than premises, containing any explosive substance, then, unless the accused can show that he had reasonable grounds for believing that the thing did not contain anything or contained only something other than an explosive substance, he shall be presumed knowingly to have had in his possession or custody or under his control the explosive substance contained in that thing. (3) No prosecution for an offence under subsection (1) shall be instituted without the consent of the Secretary for Justice.” 15. Section 56 deals with the position of accessories. Section 57 provides for the exclusion of the public during the hearing of proceedings for an offence under Part VII. 16. Section 58, the last provision in Part VII, provides that Part VII shall not exempt any person from any indictment or proceeding for any offence which is punishable at common law or by Ordinance other than Part VII, but no person shall be punished twice for the same criminal act. 17. Pausing here, several observations may be made. First, the legislature obviously intended to give “explosive substance” an expansive meaning. Section 52 deems any material for making any explosive substance – whatever it may cover – an explosive substance. Moreover, it deems any apparatus, machine, implement or materials used, or intended to be used, or adapted for causing, or aiding in causing, any explosion in or with any explosive substance an explosive substance. And any part of any such apparatus, machine or implement is also deemed to be an explosive substance. In other words, what is intended to be caught under the offence-creating provisions that follow is much wider than what a layman would otherwise understand as constituting an explosive substance. 18. Secondly, in sections 52, 53 and 54(a), causing an explosion is mentioned in conjunction with “explosive substance”. Thus, in section 52, any apparatus, machine, implement or materials used, or intended to be used, or adapted for causing, or aiding in causing, any explosion in or with any explosive substance is deemed an explosive substance. 19. Likewise, the offence under section 53 can only be committed by causing an explosion of the defined nature. By definition, it cannot be committed if the substance in question cannot explode. 20. The same can also be said of the offence under section 54(a) which requires an intention to cause an explosion of the prescribed nature. 21. All this suggests that an explosive substance only includes something that can explode (subject to the expansive definition in section 52). 22. Thirdly, however, the above analysis is thrown into doubt when one comes to the second offence created under section 54. The offence under section 54(b) does not refer to an intention to cause an explosion. It is committed by making or having in one’s possession or control an explosive substance with intent by means thereof to endanger life or cause serious injury to property. There is no reference, unlike in section 54(a), to endangering life or causing serious injury to property by an explosion. In fact, if there had been a reference to an explosion as being the intended means to endanger life or injury to property, there would be little difference between the two offences under section 54(a) and (b) and they could simply be combined as one offence, with perhaps only the addition of the elements of making, having in his possession or control referred to in section 54(b). 23. This distinction strongly suggests that at least for section 54(b), the explosive substance can be something that does not lead to an explosion. Indeed, section 54 specifically says that the offences in that section can be committed regardless of “whether any explosion does or does not take place”. 24. Fourthly, the offences created under sections 53 and 54 are concerned with the protection of life and property. They are obviously serious offences, as evidenced by the heavy maximum penalties that may be imposed. Section 55, on the other hand, makes no reference to endangering life or causing serious injury to property. The manufacture or possession offence under section 55 may be committed in relation to an explosive substance which may endanger life or cause serious injury to property, as well as to one that does not. The maximum penalty is 14 years imprisonment on conviction upon indictment. Depending on the seriousness of the facts, the offence may be tried summarily in the magistrates’ courts.[14] No prosecution may be instituted without the consent of the Secretary for Justice. 25. Fifthly and finally, section 58 of Part VII makes it clear that the offences in Part VII and any other possible offences under the common law or any other legislation are not mutually exclusive, so long as there is no double punishment. In other words, it is envisaged that it is possible for an act to be caught both under Part VII and under some other law. Such other law may well deal with a different aspect of the same act or subject matter. This immediately raises the question: what other law might be relevant in this context? The Dangerous Goods Ordinance 26. Whilst Part VII of the Crimes Ordinances does not define the word “explosive”, a definition of the word is found in the Dangerous Goods Ordinance. Section 2 of the Ordinance defines “explosive” to include “any substance used or manufactured with a view to producing a practical effect by explosion or a pyrotechnic effect”. 27. This definition is given in the context of section 3 of the Dangerous Goods Ordinance which applies the Ordinance to all explosives, compressed gases, petroleum and other substances giving off inflammable vapours, substances giving off poisonous gas or vapour, corrosive substances, substances which become dangerous by interaction with water or air, substances liable to spontaneous combustion or of a readily combustible nature, radioactive material and to such substances to which it is applied by the Chief Executive in Council. All these goods or substances mentioned in section 3 are referred to as “dangerous goods” under the Ordinance: section 2. 28. Part II of the Ordinance goes on to impose licensing requirements for the manufacture, storage, conveyance or use of any dangerous goods. Contraventions of these provisions are sanctioned by criminal offences created under Part IV of the Ordinance, carrying a maximum fine of $25,000 and imprisonment for 6 months. 29. Section 20 of the Dangerous Goods Ordinance provides that the provisions of the Ordinance shall be in addition to and not in derogation of the provisions of any other enactment relating to dangerous goods. 30. Detailed regulations are made under the Ordinance in relation to the storage, conveyance etc of dangerous goods: the Dangerous Goods (General) Regulations.[15] 31. Three observations can be made. First, the Dangerous Goods Ordinance and its regulations are obviously enacted to provide a regulatory regime to control and govern the manufacture, storage, conveyance and use of dangerous goods. Essentially, a licensing system is imposed. 32. Secondly, “explosive” is one kind of dangerous goods under the Ordinance, and it includes a substance which does not produce a practical effect by explosion, but only a pyrotechnic effect. In other words, instead of directly including pyrotechnic substances as dangerous goods under section 3, they are included within the meaning of “explosive”, by means of which they are controlled and regulated under the Ordinance as dangerous goods in section 3. 33. Thirdly, section 20 of the Ordinance makes it clear that the provisions in the Ordinance shall be in addition to and not in derogation of the provisions of any other enactment relating to dangerous goods. In other words, a substance regulated under the Ordinance may also be subject to provisions governing or controlling its manufacture, use and so forth under some other legislation. It is therefore similar to section 58 of the Crimes Ordinance, in that it recognises the potential applicability of other statutes dealing with different aspects of the same act or subject matter. The English provisions 34. Both Part VII of the Crimes Ordinance and the relevant provisions in the Dangerous Goods Ordinance can be traced to English provisions enacted in the 19th century. Specifically, the definition of “explosive” in section 2 of the Dangerous Goods Ordinance is derived from section 3 of the Explosives Act 1875 which was enacted to amend the law with respect to manufacturing, keeping, selling, carrying and importing gunpowder, nitro-glycerine, and other explosive substances. The primary function of the Act was to regulate and control lawful operations undertaken by those who were concerned in manufacturing, keeping, selling, carrying and importing explosive substances. It also created a number of criminal offences in relation to the handling of explosive substances.[16] 35. Eight years later in the United Kingdom, the Explosive Substances Act 1883 was enacted. It was the statute on which the provisions in Part VII of the Crimes Ordinance were based. The long title of the 1883 Act said it was enacted to amend the law relating to explosive substances. Section 9(1) of the 1883 Act contained the expansive definition of “explosive substance”, from which the definition of the same term contained in section 52 of the Crimes Ordinance was copied. Indeed, sections 53, 54 and 55 of the Crimes Ordinance are essentially based on sections 2, 3 and 4 of the 1883 Act. 36. Like Part VII of the Crimes Ordinance, the 1883 Act did not define, what “explosive” meant in the term “explosive substance” but only contained the same expansive deeming provision for the term. The same issue which the present appeal has to deal with arose before the English Court of Appeal in R v Wheatley, namely, whether the definition of “explosive” in the 1875 Act was applicable to the interpretation of “explosive substance” in the 1883 Act. In answering the question in the affirmative, Bridge LJ explained: “Looking at the two statutes, at the nature of the provisions which they both contain, and in particular at the short and long titles of both statutes, it appears to this court that clearly they are in pari materia, and that conclusion alone would seem to us to be sufficient to justify the conclusion which the judge reached that the definition of the word ‘explosive’ found in the 1875 Act is available to be adopted and applied under the provisions of the 1883 Act.”[17] 37. A further reason given in support of the court’s decision was the direct reference in section 8 of the 1883 Act to the provisions in the 1875 Act,[18] which is not the case with the Crimes Ordinance and the Dangerous Goods Ordinance in Hong Kong. But what is of note is the existence of provisions in both Ordinances envisaging the applicability of other statutes or laws relating to the same acts or subject matter covered in these Ordinances.[19] Legislative history in Hong Kong 38. So much for the English position. So far as the legislative history of Part VII of the Crimes Ordinance and the Dangerous Goods Ordinance is concerned, the picture is slightly more complicated. 39. The Dangerous Goods Ordinance can be traced to the Explosive Substances Ordinance 1872, which was “[a]n Ordinance to regulate the Manufacture, Importation, Storage and Carriage of Explosive Substances”.[20] It contained no definition of “explosive substance”, nor was the term used in the body of the Ordinance. Rather, section 1 listed various substances as “specially dangerous”[21] and they were made subject to the regulation under the Ordinance. 40. One year later, the Ordinance was repealed and replaced by the Dangerous Goods Ordinance 1873. It was “[a]n Ordinance for the amendment of the law with respect to the carriage and deposit of dangerous goods”.[22] Again, “explosive substance” or “explosive” was not mentioned, and “dangerous goods” meant those goods or substances specified in sections 3 and 4[23] or which might be declared to be dangerous by the Governor in Council. 41. In 1901, the Gunpowder and Fireworks Ordinance was enacted to consolidate and amend the laws relating to the manufacture of gunpowder and fireworks, and to regulate the sale and conveyance of gunpowder. 42. Both the Dangerous Goods Ordinance 1873 and the Gunpowder and Fireworks Ordinance 1901 were repealed by, and their provisions consolidated under, the Dangerous Goods Ordinance enacted in 1956, which is the Dangerous Goods Ordinance we have today. This new Ordinance contained in section 2 a definition for “explosive” which included any substance producing a pyrotechnic effect, and as mentioned, “explosive” was made one type of dangerous goods controlled and regulated under the new Ordinance. 43. Part VII of the Crimes Ordinance, on the other hand, can be traced to the Explosive Substances Ordinance 1913, which was “[a]n Ordinance to amend the law relating to explosive substances”.[24] The Ordinance was heavily modelled on the 1883 Act. As mentioned, like the 1883 Act, the 1913 Ordinance did not define the word “explosive” in the term “explosive substance”. However, apart from the expansive deeming provision for the term, unlike the situation in the United Kingdom where a definition of the word “explosive” was already in existence (in the 1875 Act) when the 1883 Act was enacted, the word was not defined or even used in the Dangerous Goods Ordinance 1873 or the Gunpowder and Fireworks Ordinance 1901 when the 1913 Ordinance was enacted. The definition of “explosive” only came into being in Hong Kong in the subsequent Dangerous Goods Ordinance enacted in 1956. 44. To complete the picture, the Explosive Substances Ordinance 1913 underwent some amendments in 1966 in response to the needs of society at that time, and was eventually consolidated, without amendment, in 1972 and became Part VII of the Crimes Ordinance. The appellant’s arguments 45. Ms Draycott SC (Ms Van Ma with her), for the appellant, essentially argued that given the different legislative histories in the United Kingdom and Hong Kong, Wheatley can be distinguished. In particular, counsel pointed out that in Wheatley, after referring to the long titles of the 1875 Act and 1883 Act, the English Court of Appeal said that, on the face of it, the law relating to explosive substances which the 1883 Act was intended to amend must include the 1875 Act.[25] The latter Act, counsel submitted, was an Act which “amended and built on” the earlier Act. The same could not be said about the 1913 Ordinance and the Dangerous Goods Ordinance 1956. Counsel also argued that the legislature could have added the pyrotechnic definition to the 1913 Ordinance when it was first enacted or in 1956 but had chosen not to do so. Ms Draycott contended that the Dangerous Goods Ordinance is regulatory in nature whereas Part VII of the Crimes Ordinance is penal in nature, and one cannot use the definition of “explosive” in the former to interpret what an “explosive substance” is in the latter. Counsel submitted that any doubt regarding the applicability of the definition of “explosive” in section 2 of the Dangerous Goods Ordinance to the offence under section 55 of the Crimes Ordinance should be resolved in favour of the appellant particularly given the very heavy penalty involved.[26] Discussion 46. It is true that the legislative histories of the provisions in the United Kingdom and in Hong Kong are different. When the Hong Kong legislature enacted the Explosive Substances Ordinance in 1913 by borrowing heavily from the provisions in the 1883 Act, it did not also copy the definition of “explosive” in the 1875 Act into the 1913 Ordinance or otherwise amend the then Dangerous Goods Ordinance 1873 along the lines of the 1875 Act. However, this appeal is not about the true meaning of “explosive substance” in the 1913 Ordinance when it was first enacted, or the reason why the legislature did not at that time include in the Ordinance the same definition for “explosive” in the 1875 Act. For the position in Hong Kong changed in 1956 when the current Dangerous Goods Ordinance was enacted to replace the 1873 Ordinance, and the new Ordinance contained in section 2 the same definition for “explosive” as in the 1875 Act. As from 1956, the relevant position in Hong Kong is no different from that in the United Kingdom. 47. As mentioned, Wheatley decided that both the 1875 Act and the 1883 Act were “in pari materia”. As Bennion on Statutory Interpretation[27] explained: “Two or more Acts may be described as in pari materia if … they otherwise deal with the same subject matter on similar lines. … Acts that are in pari materia are sometimes described as forming a single code on a particular matter in the sense that they deal with the same or a similar subject matter and are to be construed as one. They ‘are to be taken together as forming one system, and as interpreting and enforcing each other’. The principle underlying the treatment of Acts which are in pari materia is based on the idea that there is continuity of legislative approach and uniformity in the use of language. [28] “Where a term is used without definition in one Act, but is defined in another Act which is in pari materia with the first Act, the definition may be treated as applicable to the use of the term in the first Act. … An Act often defines a term for the purposes of that Act only. Where the same term is used in another Act that is in pari materia and no definition is included, reliance may be placed on the definition in the first Act. Whether it is appropriate to do so will ultimate[ly] depend on the context having regard to other interpretative criteria.”[29] 48. In a passage also cited by Bennion,[30] Lord Mansfield said: “Where there are different statutes in pari materia, though made at different times, or even expired and not referring to each other, they shall be taken and construed together, as one system, and as explanatory of each other.” [31] 49. In deciding whether the legislation concerned is in pari materia, what matters is not so much the sequence of the enactment of the legislation as the content or substance of the legislation. Whilst in Wheatley, the fact that it appeared that the law relating to explosive substances which the 1883 Act was intended to amend must include the 1875 Act was no doubt a matter that the court took into account, the crucial issue in that case, as in the present case, was whether the statutes were in pari materia, that is, whether they dealt with the same subject matter on similar lines. 50. The subject matters of Part VII of the Crimes Ordinance and the Dangerous Goods Ordinance obviously overlap in that both cover, regulate and control the manufacture, possession, custody or use of explosive substances. It is reasonable to assume that there is continuity of legislative approach and uniformity in the use of language so that the same word “explosive” bears the same meaning under the two Ordinances. 51. Ms Draycott pointed out that the Dangerous Goods Ordinance provides a regulatory regime, backed by relatively light sanctions, in relation to the lawful manufacture, storage etc of explosives, whereas Part VII of the Crimes Ordinance provides a penal regime carrying heavy penalties regarding unlawful manufacture, possession or use of explosive substances. This is quite true. However, it does not follow that the two Ordinances are not in pari materia. Rather, it only means that they form different parts of a complete code covering, regulating and controlling the manufacture, possession, custody or use of explosive substances in Hong Kong. Indeed the same may be said of the 1875 and 1883 Acts in that the former was regulatory and the latter penal in nature. Yet this did not prevent the English Court of Appeal from holding that the 1875 Act and 1883 Act were in pari materia. 52. It is also noteworthy that during the Second Reading of the Explosive Substances Bill 1913,[32] the Attorney General specifically said that there were “three parts of the law already in existence in the Colony which relate[d] more or less to explosive substances” and “the second part of the existing law [was] that part of the law which relate[d] to Dangerous Goods”. There was, however, “a hiatus really in the law, and [the] Bill [was] intended to fill the gap.” In other words, the 1913 Ordinance was meant to form an additional part of a statutory code dealing with explosive substances, of which the dangerous goods legislation already formed a part. 53. Furthermore, as already pointed out, both the Crimes Ordinance and the Dangerous Goods Ordinance contain specific provisions to the effect that the same act covered under one Ordinance may also be covered under another Ordinance, and the provisions in the respective Ordinances are meant to be in addition to, and not in derogation from, the provisions in other legislation. 54. Returning to the provisions in Part VII of the Crimes Ordinance, I have already highlighted the expansive definition in section 52, which means that when approaching the provisions in Part VII, one simply cannot use a narrow, layman’s concept of what an “explosive substance” is to understand what is covered by the provisions. 55. I have also mentioned that whilst the word “explosion” is used in some of the provisions, the offence under section 54(b), particularly when read in contrast with that under section 54(a), strongly suggests that an explosive substance need not be a substance which can produce a practical effect by explosion. And crucially, in section 55, which creates the offence with which we are concerned, the word “explosion” is not used at all. 56. The appellant relies on an apparent anomaly to argue that the definition of “explosive” in section 2 of the Dangerous Goods Ordinance cannot be applicable to the offence under section 55 of the Crimes Ordinance. Very briefly stated, the argument is that under the Dangerous Goods (General) Regulations, section 153(6)(a), one may lawfully “store” up to 5 kilogrammes of potassium chlorate[33] without a licence.[34] Section 2 of the Dangerous Goods Ordinance defines “store”, when used as a verb, to include having “possession or custody of or control over that to which the verb relates”. Yet, if the section 2 definition of “explosive” in the Dangerous Goods Ordinance is applicable to the possession offence under section 55 of the Crimes Ordinance, such a person would be guilty of the offence for possessing the potassium chlorate and liable to heavy punishment notwithstanding that no offence would be committed under the Dangerous Goods (General) Regulations.[35] This would create, so the argument runs, a statutory anomaly. It must follow, accordingly, that section 55 of the Crimes Ordinance and the Dangerous Goods Ordinance must be looked at entirely independently of each other. 57. However, it should be noted that, first, there is a specific definition of the word “store” in the regulations. Under the regulations, the word “store”, “when used as a verb, means to keep for any purpose whatsoever, and ‘storage’ shall be construed accordingly; but, when used as a noun, [the word] means a place which is licensed for the storage of dangerous goods … and, if used as a noun in relation to premises, means such part of the premises as is so licensed.”[36] 58. As has been submitted on behalf of the respondent,[37] when one looks at sections 150 to 153 in Part VIII of the regulations, it can be seen that a part of the context and purpose of this part of the regulations is to regulate the place or premises for the manufacture or storage of category 7 dangerous goods.[38] And the licensing exemption in section 153(6)(a) is only applicable when the category 7 dangerous goods are stored in a place or premises, and the quantity does not exceed 5 kilogrammes. It has nothing to do with the situation where, as in the present case, the category 7 dangerous goods are being carried around on a person in a public place. 59. Secondly, it is true that storage of up to 5 kilogrammes of potassium chlorate in a place or premises falling within the licensing exemption in section 153(6)(a) may still be caught by section 55 of the Crimes Ordinance if pyrotechnics are explosive substances, unless the storage is for “a lawful object”.[39] I do not see this result as being inconsistent with the view that the Dangerous Goods Ordinance and Part VII of the Crimes Ordinance are in pari materia. It simply provides an example of what section 58 of the Crimes Ordinance anticipates, namely that different laws may deal with different aspects of the same act or subject matter. 60. Finally, the appellant’s printed case[40] also refers to the Entertainment Special Effects Ordinance[41] which regulates the supply, use, conveyance and storage of special effects materials, including pyrotechnic special effects materials, for and incidental to the production of special effects in entertainment programmes.[42] The Ordinance creates offences for the discharge, supply, conveyance and storage of such materials without a permit or licence.[43] The appellant points out that mere possession of such materials is not an offence under the Ordinance, yet if pyrotechnics are explosive substances under Part VII of the Crimes Ordinance, it may constitute an offence under the latter. 61. With respect, this does not advance the appellant’s case. The Entertainment Special Effects Ordinance, enacted in 2001, just forms another part of the statutory code in Hong Kong which deals with explosive substances. Indeed the Entertainment Special Effects (General) Regulation[44] made under the Ordinance regulates the conveyance of pyrotechnic special effects materials for use in the entertainment industry by reference to the “net explosive quantity”[45] of the materials.[46] Possession of the materials for their legitimate use in the entertainment industry would obviously constitute “a lawful object” under section 55(1) of the Crimes Ordinance and therefore would not amount to a crime under that section. There is simply no inconsistency between the two Ordinances. Conclusion 62. For these reasons, I would answer the certified question in the affirmative and dismiss the appeal. Mr Justice Gleeson NPJ: 63. I agree with the Judgment of Mr Justice Cheung PJ. Chief Justice Ma: 64. Accordingly, the court unanimously dismisses the appeal. Ms Charlotte Draycott, SC, instructed by C O Chan & Co, assigned by the Director of Legal Aid and Ms Van Ma, instructed by C O Chan & Co, for the appellant Mr Paul Ho, DDPP and Mr Andrew Li, ADPP (Ag), of the Department of Justice, for the respondent [1] Cap 295. [2] Cap 200. [3] Expert witness report of Mr Adam Roberts, a bomb disposal officer with the Explosive Ordnance Disposal Bureau of the Hong Kong Police Force, dated 25 March 2016, para 4.2. [4] Expert report, para 5.2.2. [5] According to the expert report of Dr Lam Wai-kwok, a senior forensic pathologist with the Forensic Pathology Service of the Department of Health, dated 30 August 2016: “Contact [potassium chlorate] with skin can cause irritation, blistering and skin burns. Contact with eyes can result in corneal damage or blindness. Inhalation of [potassium chlorate] will produce irritation to the respiratory tract, causing burning sensation, sore throat, sneezing and coughing, etc. At high levels it can interfere with the ability of the blood to carry oxygen, weakness, dizziness and a blue colour of the skin (methaemoglobinaemia). Severe over-exposure can produce lung damage, difficulty in breathing, unconsciousness and even death.” [6] Mr Jacky Ip. [7] ESCC 4136/2015, ESS 22161/2016, ESS 22163/2016, ESS 22165/2016. [8] HCMA 244/2017. [9] [2019] HKCFI 1093. [10] [2019] HKCFI 2067. [11] Cheung Ag CJ, Ribeiro PJ and Fok PJ, [2019] HKCFA 40, 14 November 2019. [12] (2014) 17 HKCFAR 593, para 194. [13] Ibid, para 196. [14] Sections 91 and 92 of the Magistrates Ordinance (Cap 227). [15] Cap 295B. [16] R v Wheatley [1979] 1 All ER 954, 956 h. [17] p 957 b-c. [18] p 957 d-g. [19] The Crimes Ordinance, section 58; the Dangerous Goods Ordinance, section 20. [20] The long title. [21] Nitro-glycerine or glonoine oil, petroleum, gun cotton, cartridges, and fulminating mercury. [22] The long title. [23] Petroleum, nitroglycerine or glonoine oil, gun cotton, fulminate of mercury or of other metals, dynamite, blasting powders, gunpowder, fuses (other than safety fuses), rockets, detonators, cartridges, ammunition of all descriptions (other than percussion caps or priming caps or empty sporting cases), phosphorus, aqua fortis, vitriol, naphtha and benzine. [24] The long title. [25] p 956 i. [26] Sweet v Parsley [1969] 1 All ER 347, 350 E/F, 364 B/C. [27] 7th edition. [28] p 520. [29] p 483. [30] p 520. [31] R v Loxdale (1758) 1 Burr 445, 447. [32] 31 July 1913. [33] As mentioned earlier, the smoke cakes in the present case contained potassium chlorate. [34] In fact, this was the reason why, on the same set of facts, the appellant was acquitted of a separate offence of storing dangerous goods without a licence, contrary to sections 6(1) and 14(1) of the Dangerous Goods Ordinance. [35] In the present case, the appellant was in possession of about 500g of potassium chlorate. [36] Section 2(1). [37] Printed case, paras 53 to 59. [38] It also deals with the conveyance and packing of category 7 dangerous goods. [39] Section 55(1), Crimes Ordinance. No prosecution for an offence under section 55(1) may be instituted without the consent of the Secretary for Justice: section 55(3). [40] Paras 4.1 and 4.2. [41] Cap 560. [42] The long title. [43] Sections 10, 18, 21 and 23. [44] Cap 		560A. [45] The term is defined in section 2 of the principal Ordinance, in relation to pyrotechnic special effects materials, to mean “the net weight of the chemical material in a pyrotechnic special effects material designed to produce heat, gas, sound, light, or a combination of these effects resulting from a self-sustaining and self-contained exothermic chemical reaction by combustion, deflagration or detonation”. [46] Sections 23, 24, 25 and 26.
Mr Justice Ribeiro PJ: 1. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: Introduction 2. As will be explained in more detail below, this appeal arises from the exercise of discretion by a judge to permit the appellant to acknowledge service in a probate action out of time and to apply to set aside the judgment he had earlier entered in that action.[1] The Court of Appeal held that the judge had erred in the exercise of his discretion and that it was therefore necessary for that court to exercise the discretion afresh.[2] In the re-exercise of that discretion, the Court of Appeal refused to permit the late acknowledgment of service by the appellant and therefore set aside the judge’s order. 3. This appeal raises a short point, namely whether there were grounds for the Court of Appeal to interfere with the exercise of discretion by the Deputy High Court Judge and to exercise that discretion afresh as it did. 4. At the hearing of the appeal, having heard counsel for the appellant, we dismissed the appeal without calling on counsel for the respondent. We indicated that we would provide our reasons for dismissing the appeal at a later date. These are my reasons for doing so. The limited ambit of the appeal 5. It is rightly accepted by the parties that there are limited grounds on which an appellate court can interfere with a lower court’s exercise of discretion. Those principles are set out in the decision of the House of Lords in Hadmor Productions Ltd and Others v Hamilton and Another,[3] which have been consistently applied in Hong Kong courts: see, e.g. the decision of this Court in SPH v SA.[4] 6. The appellant, the intended intervener in the probate action, also accepts that, if the Court of Appeal were entitled to exercise the discretion afresh, there is no ground on which this Court could interfere with the Court of Appeal’s exercise of that discretion to decline to permit the acknowledgment of service out of time.[5] 7. Therefore, the sole issue on the appeal is whether the Court of Appeal was right to conclude that the judge’s exercise of discretion miscarried. The interlocutory procedural history of the probate action 8. By writ dated 12 December 2012, the plaintiff, Li Cheong, commenced a probate action (“the 2012 Action”)[6] in respect of Sang Lee, also known as Li Tin Sang (“the deceased”), who had died in England on 22 February 1985. The plaintiff asserted that the deceased died leaving no wife, no issue and no surviving parents and that he was the lawful and natural nephew of the deceased and entitled to share in his estate on intestacy. 9. The defendant to that action (who was respondent to this appeal) was Lee Kwai Tai, also known as Li Kwai Tai (“LKT”), who claimed to be the only issue of the deceased and his only beneficiary.[7] In her Defence and Counterclaim dated 14 January 2013, LKT asserted that she was the sole surviving issue of the deceased and sought the grant of letters of administration in respect of the deceased’s estate. The plaintiff joined issue with the Defence and Counterclaim in his Reply and Defence to Counterclaim dated 18 March 2013. 10. On 22 September 2015, the 2012 Action came on for trial but was adjourned by Deputy High Court Judge Yee (“the Deputy Judge”) so that the parties could obtain DNA samples and prepare a report. 11. Two days after that, on 24 September 2015, Messrs Kelvin Cheung & Co. (“KCC”), acting on behalf of the appellant (“DL”), entered a Caveat in respect of the deceased’s estate. The Caveat was issued[8] in accordance with Rule 44 of the Non-Contentious Probate Rules (Cap.10A) which enables a party “who wishes to ensure that no grant is sealed without notice to himself”. The letter enclosing the Caveat, dated 25 September 2015, included the action number of the probate action in the heading, indicating that KCC were aware of the 2012 Action. 12. On 7 December 2015, LKT issued a Warning to Caveator and, on 18 December 2015, DL issued an Appearance to Warning. With that Appearance to Warning, DL’s solicitor filed an affirmation stating that DL was resident in Singapore and exhibiting photocopies of a Singapore birth certificate showing her birth in 1946 and her father’s name as “Li Sang” and a registration document of “Lee Sang” issued by the Consulate General of the Republic of China in Singapore in 1948, stating that he was the father of the appellant and also a son, Lee Tung Ngoh. DL’s solicitor asserted in his affirmation that DL claimed to be the sole beneficiary of the estate of the deceased. 13. Having been alerted to DL’s interest in the estate, LKT’s solicitors served a notice of the 2012 Action on KCC on 12 January 2016. Leave to do so had not been obtained, so on 14 January 2016 LKT’s solicitors wrote to KCC to indicate that LKT would first seek leave to serve this notice as required under the Rules of the High Court (“RHC”). 14. The relevant rule is O.15 r.13A, which, so far as material, provides as follows: “(1) At any stage in an action to which this rule applies, the Court may, on the application of any party or of its own motion, direct that notice of the action be served on any person who is not a party thereto but who will or may be affected by any judgment given therein. (2) An application under this rule may be made ex parte and shall be supported by an affidavit stating the grounds of the application. (3) … (4) A person may, within 14 days of service on him of a notice under this rule, acknowledge service of the writ or originating summons and shall thereupon become a party to the action, but in default of such acknowledgment … he shall be bound by any judgment given in the action as if he was a party thereto. (5) … (6) This rule applies to any action relating to – (a) the estate of a deceased person; …”. 15. On 1 February 2016, LKT’s solicitors wrote to the court informing it of DL’s Caveat and, on 22 February 2016, leave was granted to her to file and serve notice of the 2012 Action on DL pursuant to O.15 r.13A. A Notice of Action in respect of the 2012 Action was duly filed on 18 March 2016 and, on 21 March 2016, LKT’s solicitors served the notice, together with copies of all the pleadings in the action, on KCC. A receipt chop was affixed by KCC on a copy of the Notice of Action retained by LKT’s solicitors. 16. Notwithstanding service of the Notice of Action, no acknowledgment of service was filed by DL. As will be seen, this was to have significant consequences for DL when judgment was entered for LKT in the 2012 Action. The separate proceedings commenced by the appellant 17. For reasons unexplained, on 26 May 2016, DL commenced another action in respect of the deceased’s estate. That action was HCAP 10 of 2016 (“the 2016 Action”) in which DL was plaintiff and the defendants were Li Cheong (plaintiff in the 2012 Action) and LKT. The Statement of Claim in the 2016 Action referred to the 2012 Action as a pending action, denied that LKT was the natural or lawful daughter of the deceased and claimed that DL is the only surviving issue of the deceased. 18. The Statement of Claim was not verified by a statement of truth from DL and, as Yuen JA noted below, [9] was therefore liable to be struck out under O.41A r.6 of the RHC.[10] Moreover, the action was wholly redundant, since DL could, and should, have asserted her claim to the deceased’s estate by joining in the 2012 Action, as she had been invited to do. Trial of the 2012 Action 19. Be that as it may, the trial of the 2012 Action resumed before the Deputy Judge on 8 June 2016. The plaintiff, Li Cheong, did not attend. On 1 June 2016, LKT’s solicitors wrote to the court to inform it of the 2016 Action, enclosing correspondence relevant to that action indicating that, although they had informed DL’s solicitors that they were authorised to accept service, the writ in the 2016 Action had not been served on them. 20. The Deputy Judge proceeded with the trial of the 2012 Action on 8 June 2016. In the absence of the plaintiff, the Deputy Judge dismissed his claim and, after hearing the evidence in support of LKT’s counterclaim,[11] declared that the deceased had died intestate and that LKT was “the only surviving issue of the deceased”, and made a grant of letters of administration in favour of LKT (“the Judgment in the 2012 Action”). 21. In the course of the trial, LKT’s then counsel, Mr Kevin Poon, informed the Deputy Judge of the 2016 Action and of the contents of DL’s claim. However, when the Deputy Judge suggested that a declaration in the 2012 Action would only be binding on the parties, Mr Poon agreed. This was, as Yuen JA pointed out in the Court of Appeal,[12] incorrect as a matter of law by reason of O.15 r.13A(4) and DL’s failure to acknowledge service. Belated application to set aside the Judgment in the 2012 Action 22. After judgment was entered in the 2012 Action, on 20 October 2016, solicitors for LKT and DL respectively appeared before a master on an interlocutory application in the 2016 Action. At that time, LKT’s solicitors informed the master about the Judgment in the 2012 Action but this did not prompt DL to take any action in respect of it. 23. On 1 November 2016, LKT applied to strike out the 2016 Action based on the binding effect of the Judgment in the 2012 Action. Only then did DL’s solicitors write to the solicitors for LKT asking for a supporting affirmation and for the Judgment in the 2012 Action. On 17 November 2016, LKT’s solicitor filed an affirmation, stating that Notice of Action in respect of the 2012 Action had been served on KCC. 24. As Yuen JA observed below, “By now DL’s solicitors KCC were clearly made aware of the Judgment and the Notice of Action in respect of the 2012 Action but again significantly, this evoked no action from DL.”[13] 25. In the meantime, on 16 November 2016, the plaintiff in the 2012 Action applied to appeal the Judgment in the 2012 Action out of time on the basis that he was not aware of the resumed hearing of the trial on 8 June 2016. On 11 April 2017, the Court of Appeal (Lam VP and Chow J) dismissed that application, rejecting the plaintiff’s contention.[14] 26. On 10 April 2017, one day before the hearing of the plaintiff’s application to the Court of Appeal, DL issued a notice of application seeking orders that: (1) DL be granted an extension of time to acknowledge service in the 2012 Action; (2) DL be granted an extension of time to apply to set aside the Judgment in the 2012 Action under O.35 r.2(1) of the RHC;[15] and (3) directions be given in relation to the further conduct of the 2012 Action. 27. The application was heard before the Deputy Judge on 7 February 2018. By his Decision dated 5 March 2018, the Deputy Judge acceded to DL’s application for an extension of time to file her acknowledgment of service in the 2012 Action. He also ordered that, upon the filing of the Acknowledgment of Service, the Judgment in the 2012 Action should cease to be binding on her and that the application to set aside that judgment should “be heard together with or after the conclusion of the trial of [the 2016 Action] by the same judge, preferably [before the Deputy Judge]”.[16] The Deputy Judge’s reasons 28. The Deputy Judge acknowledged that he had “a difficult decision” to make.[17] This was an accurate comment since he had to decide between the finality of the Judgment in the 2012 Action and the procedural fairness of permitting DL to put forward her claim to be entitled to claim in respect of the deceased’s estate.[18] 29. Importantly, the Deputy Judge found that LKT’s solicitors did validly and properly serve Notice of Action in respect of the 2012 Action on DL through KCC. Thus, he correctly held: “Regardless of what has happened to the Notice inside the office of KCC, my conclusion that the Notice has been validly served on [DL], coupled with the fact that no acknowledgment of service of the Writ filed herein for whatever reasons, pursuant to Order 15 r.13A(4), means that [DL] shall be bound by the Judgement given in the action as if she was a party thereto. This court has no discretion to remove the binding effect at all. Thus, it can be seen that the CFI Judgement became binding on [DL] as a matter of law irrespective of whether or not this court was aware of such a binding effect at trial.”[19] 30. The Deputy Judge rejected any suggestion that LKT had deliberately misled the court into making the declaration on her counterclaim in the 2012 Action to the effect that she is the sole surviving issue of the deceased or had misled the court by failing to disclose the existence of the 2016 Action.[20] 31. The Deputy Judge was not persuaded that there was an acceptable explanation for the delay even if DL was ignorant of the Notice of Action in respect of the 2012 Action since, even then, she waited until April 2017 to take any step to remedy the situation.[21] He accepted the evidence that LKT would, due to her advanced age and medical condition, be prejudiced if DL were allowed to re-open the issues in the 2012 Action.[22] 32. Despite these matters, which might have suggested he was going to decline to exercise his discretion in favour of DL, the Deputy Judge stated his reasons for coming to a contrary conclusion as follows: “However, the overriding concern of this court is that this court expressly indicated that the relevant declaration in the CFI Judgment was not intended to be binding on [DL] and that the documentary evidence presently placed before this court shows that [DL’s] allegation in the New Action that she is the natural daughter of the Deceased is indeed bona fide. Mr Poon cannot argue otherwise. This court is unwilling to disallow a bona fide claim to be pursued and instead insist that [DL] should be bound by the relevant declaration by reason of her default in filing her acknowledgement of service in the absence of her knowledge of the Notice in the first place.”[23] 33. He therefore held: “In view of all the circumstances, I believe that the fairest order is that [DL] should be given 7 days from the date of this Decision to file her acknowledgement of service thereby becoming a party to this action. The CFI Judgment should then cease to be binding on her. Her application to set aside the CFI Judgment as against her albeit out of time should be heard together with or after the conclusion of the trial of the New Action by the same judge, preferably this court, to avoid duplication or repetition. Little further delay is caused as far as the present action is concerned. The defendant has to deal with the New Action anyway.”[24] The Court of Appeal’s judgment 34. Yuen JA, with whom Lam VP agreed, held that the Deputy Judge’s exercise of discretion in DL’s favour was in error in the following two respects: “First, the judge’s intention when he made the declaration in the 2012 Action was an irrelevant consideration. The issue of who is bound by a judgment is a matter of law, not of an individual judge’s intention, and as the judge noted, as a matter of law, the Judgment in the 2012 Action was indeed binding on DL. In any event, even if LKT’s counsel had specifically informed the judge at the hearing that Notice of the 2012 Action had been served on DL through her solicitors and no acknowledgment of service had been filed, that should have made no difference to the way in which the judge dealt with the trial. DL was legally represented and it was not the function of the judge to be her legal adviser. Second, the judge was in error when he said DL’s default lay in failing to file the acknowledgement of service. With respect, that was not her only failure. The judge did not take into account the incorrect approach she had adopted throughout in asserting her claim, as discussed below.”[25] 35. Her Ladyship held that, since the Deputy Judge had taken into account an irrelevant consideration and had failed to take relevant considerations into account, the exercise of his discretion must be set aside and she proceeded to exercise the discretion afresh, concluding that DL’s application to extend time to file her acknowledgment of service so as to join the 2012 Action and to apply to set aside the Judgment in the 2012 Action must be rejected.[26] Leave to appeal to this Court 36. The Court of Appeal dismissed DL’s application for leave to appeal to this Court.[27] On DL’s renewed application, the Appeal Committee granted her leave to appeal on the “or otherwise” limb of section 22(1)(b) of the Court’s ordinance,[28] on the basis that it was reasonably arguable there were no grounds for the Court of Appeal to set aside the Deputy Judge’s exercise of discretion.[29] The decision for this Court 37. As noted above, the sole issue before us is whether the Court of Appeal was justified in concluding that the Deputy Judge’s exercise of discretion was vitiated by error so that it was entitled to exercise the discretion afresh. There was no dispute between the parties as to the applicable principles, nor did DL dispute that, if the Court of Appeal was entitled to exercise the discretion afresh, its exercise of discretion was not susceptible to criticism. 38. The first error of the Deputy Judge identified by the Court of Appeal concerned the Deputy Judge’s intention when he made the declaration in the 2012 Action. The actual effect of the Judgment in the 2012 Action and who was bound by that judgment was a matter of law. Therefore, and with respect to him, the Deputy Judge’s intention is and was irrelevant and he should not have taken that into account. In particular, by describing this factor as his “overriding concern”, the Deputy Judge appears to have elevated this to a factor of paramount importance and, in so doing, appears to have erroneously restricted his discretion. Even if the Deputy Judge was to be understood as saying that, had he been aware of that legal effect of the Judgment in the 2012 Action and not mistaken in law as to its binding effect on LKT, he would not have been minded to enter judgment in the 2012 Action in the first place, or would have entered judgment in some other form that did not preclude LKT from asserting her claim in respect of the deceased’s estate, the fact remains that he did enter that judgment and his subjective intention could not alter its legal effect.[30] 39. I am also satisfied that the Court of Appeal was entirely correct to hold that the second error identified by Yuen JA as vitiating the Deputy Judge’s exercise of discretion entitled it to exercise the discretion afresh. I agree with Yuen JA that the Deputy Judge was wrong to hold that DL’s only failure was her default in filing her acknowledgment of service in the absence of her knowledge of the Notice of Action. DL was not in the position of a party who simply omitted to acknowledge service “in the absence of her knowledge of the Notice of Action in the first place”. 40. With respect to him, that description by the Deputy Judge fundamentally mischaracterises DL and the true extent of her default and its prejudicial effect on LKT, since: (1) DL was represented by solicitors, and, through them, she was well aware of the existence of the 2012 Action since at least 25 September 2015, when her Caveat in respect of the deceased was served on the solicitors for LKT. Notwithstanding such knowledge of the 2012 Action, DL did not seek to join as a party to the action. (2) That inactivity is to be seen in the light of the fact that DL was interested in the estate of the deceased and, as shown by her Appearance to Warning, wished to assert that she was the only surviving child of the deceased and sole beneficiary to his estate, a stance wholly contrary to that of LKT in the 2012 Action. (3) In January 2016, DL’s solicitors were served with notice of the 2012 Action. Whilst this was not served in accordance with O.15 r.13A, because leave to do so had not yet been obtained, it further provided DL with constructive knowledge, through KCC, of the existence of the proceedings. (4) Formal service of the Notice of Action was effected on KCC on 21 March 2016 and, as from that date, time started to run for DL to acknowledge service. No explanation has been proffered by or on behalf of DL as to why she did not then acknowledge service of the 2012 Action. All that has been said on her behalf is an explanation accurately described by Yuen JA as “an ill-conceived attempt to avoid the consequences of service of the Notice of Action”.[31] (5) Far from taking the correct and obvious course of acknowledging service in the 2012 Action, DL commenced a redundant separate action, the 2016 Action, and filed a Statement of Claim which itself referred to the fact that the 2012 Action was on foot. (6) Even after DL’s solicitors were informed by LKT’s solicitors of the Judgment in the 2012 Action, during an appearance in October 2016 before a master in an interlocutory matter in the 2016 Action, DL did not take any action. (7) Moreover, even after November 2016, when DL’s solicitors were provided with an affirmation supporting LKT’s strike out application in the 2016 Action and which stated that Notice of the 2012 Action had been served on them, DL took no action for another 5 months. (8) All this is to be seen in the light of the Deputy Judge’s recognition that the delay was “inordinate and inexcusable” and that LKT was in poor physical condition. As the Deputy Judge specifically noted, “She was in a noticeably poor medical condition at trial and this court clearly remembers her difficulties in giving evidence.”[32] 41. Taking this fuller and more accurate factual background into account, it is obvious that DL’s failure was more than simply a default in filing her acknowledgment of service. Although the Deputy Judge had set out the background in his Decision, he has, with respect, overlooked it in his characterisation of DL’s default. The two errors identified by Yuen JA justified the conclusion that the Deputy Judge’s exercise of discretion was vitiated by an error of law so that the Court of Appeal was entitled to interfere and to exercise the discretion afresh. 42. I am in full agreement with Yuen JA’s analysis of the true nature of DL’s default, namely: “It is well-established that a judgment in a probate action is by nature in rem. It is thus incumbent on all those who have rival claims (say, as issue of a deceased person) to advance their claims simultaneously, so that the probate court could adjudicate on them in a judgment which would bind all rival claimants once and for all, with the legal consequence that probate of a will or letters of administration of the deceased person’s estate could be granted by the court properly. The rationale of the procedure of giving notice of action under O.15 r.13A RHC is precisely to inform those who may not otherwise know that a probate action is in progress. Thus, even if no notice of action had been served on him, a rival claimant who stands by with knowledge that a probate action is being adjudicated may well find that if he institutes a separate action in respect of the same estate later, that may be struck out as an abuse of the process. When DL became aware of LC’s and LKT’s pleadings in the 2012 Action, she would have realized that neither side was fighting her case for her. Whichever way the judgment went, she would lose out. That being so, it was incumbent on her to apply immediately to join the 2012 Action as a party even if no Notice of the 2012 Action had been served on her. She failed to do that, and failed to acknowledge service when the Notice of the 2012 Action was served on her, and failed to apply to intervene in the 5 months after becoming aware of the Judgment. It was argued on DL’s behalf that despite the above, the court should nevertheless exercise its discretion in her favour as she had ‘incontrovertible’ official documents proving that she is a natural daughter of the Deceased. However, it would appear that the exhibited documents are not originals. More importantly, if DL is the Deceased’s daughter, there is no evidence explaining why, in the 30 years after the Deceased’s death, she has not applied for letters of administration to his estate. And more importantly, there is no verification of DL’s claim. DL did not make an affirmation when she filed a caveat in September 2015, she did not sign a statement of truth to verify the Statement of Claim in the 2016 Action, and she has not made any affirmation in the 2017 application to join the 2012 Action as intervener. Her counsel said she resides in Singapore, but with ease of air travel and the availability of courier services, residence overseas cannot provide an excuse for her failure to verify her claim personally in the nearly 3 years since she first asserted it. In any event, however bona fide a person’s claim may be, it does her no good unless she asserts it promptly and in accordance with correct legal procedure. These failures, together with the prejudice found by the judge to be suffered by LKT, led to the conclusion that the summons of 10 April 2017 should be dismissed with costs.”[33] 43. I would add, in addition, that there was at least one further error in the Deputy Judge’s exercise of discretion that would have justified interference by an appellate court. That is the Deputy Judge’s view that “[l]ittle further delay” would be caused to LKT as far as the 2012 Action was concerned if he acceded to DL’s application for an extension of time to acknowledge service. This view seems to have been based on his belief that there would have to be a trial in the 2016 Action and that LKT would have to deal with this in any event. This was, with respect, erroneous since the 2016 Action was one which stood to be disposed of summarily as an abuse of process and could be dealt with expeditiously and without any delay. Hence, contrary to the Deputy Judge’s view, there would be further delay to LKT by reason of an exercise of discretion in favour of DL to permit her to acknowledge service in the 2012 Action out of time and then to apply to set aside the Judgment in the 2012 Action. Moreover, given LKT’s advanced age and poor physical condition, this additional delay was a matter entitled to some weight. 44. Be that as it may, the appeal stands to be dismissed in any event. Conclusion and disposition 45. These are the reasons that led to my conclusion that the appeal should be dismissed. I would further make an order nisi that the appellant pay the respondent the costs of the appeal, to be taxed if not agreed. Mr Justice Cheung PJ: 46. I agree with the judgment of Mr Justice Fok PJ. I can understand the hesitation that one may have with the reasons given by the Court of Appeal for interfering with the Deputy Judge's exercise of discretion. To a large extent, it depends on how one reads paragraph 45 of his judgment. However, with respect, the error that the Deputy Judge made in paragraph 46 of his judgment, as is pointed out in both Mr Justice Fok's judgment and that of Mr Justice Tang NPJ, was such that the Court of Appeal was fully entitled to disturb his exercise of discretion. Mr Justice Tang NPJ: Background 47. This appeal concerns the estate of Sang Lee also known as Li Tin Sang, who died intestate on 22 February 1985.[34] The Respondent was Lee Kwai Tai (“LKT”)[35], a natural daughter of the deceased. The Appellant also claims to be a natural daughter of the deceased. Presumably, whether they were sisters could be easily and inexpensively resolved by examining their DNA.[36] Unfortunately, as a result of various procedural missteps, the matter has come before us.[37] In gist, what we have to decide is whether the Court of Appeal[38] was entitled to set aside the Trial Judge’s exercise of discretion which permitted the Appellant to challenge the determination[39] which was made in the Appellant’s absence that the Respondent was the only surviving daughter of the deceased. 48. I will deal with the events which led to this appeal as briefly as I can, adopting with gratitude Yuen JA’s narration of these events. The 2012 Action 49. In a Probate Action, HCAP 32 of 2012 (the 2012 Action),[40] the Plaintiff, Li Cheong (“LC”), a nephew of the deceased, sought declarations that he was entitled to a grant of Letters of Administration of the estate of the deceased, that the deceased had died intestate and left no issue. LKT was the Defendant in the 2012 Action. 50. In the 2012 Action, LKT counterclaimed for: (a) a declaration that she is the only surviving issue of the deceased; and (b) a grant to her of Letters of Administration of the deceased’s estate. 51. The 2012 Action came on trial before DHCJ Yee on 22 September 2015. LKT’s case was that the deceased was a seaman, that she was brought up in Hong Kong by the deceased’s mother and that the deceased had kept up with her throughout his life. DHCJ Yee adjourned the hearing for DNA samples to be obtained and a report made. 52. Two days after the hearing, on 24 September 2015, Messrs. Kelvin Cheung & Co. (KCC) entered a Caveat in respect of the deceased’s estate on behalf of Li Soo Tan also known as Lee Soo Tan Doreen (“DL”). She is the Appellant in this appeal. 53. On 7 December 2015, LKT’s solicitors filed a Warning to Caveator directed at DL and DL filed a Caveator’s Appearance to warning the next day. Her solicitors also affirmed that, DL is a Singaporean resident, not then residing in Hong Kong and “will file an affirmation of her own as and when appropriate”, and exhibited photocopies of a Singapore Birth Certificate showing her birth in 1946 and her father’s name as Lee Sang and a registration document of “Lee Sang” issued by the Consulate General of the Republic of China in Singapore in 1948, which stated he was the father of DL and a son Lee Tung Ngoh[41] and as well as stating that DL claims to be the sole beneficiary of the estate of the deceased. 54. On 18 March 2016, Notice of the 2012 Action together with all the pleadings were served by hand on KCC after the Judge had given leave to LKT pursuant to O.15 r.13A to file and serve a notice of the 2012 Action. 55. The consequence of such service is that “(4) A person may, within 14 days of service on him of a notice under this rule, acknowledge service of the writ…and shall thereupon become a party to the action, but in default of such acknowledgement…he shall be bound by any judgment given in the action as if he was a party thereto.” The 2016 Action 56. For unexplained reasons, on 26 May 2016, instead of applying to be joined as a party to the 2012 Action, DL commenced HCAP 10 of 2016 (the 2016 Action). The Defendants were LC and LKT. The Statement of Claim referred to the contents of the pleadings in the 2012 Action, denied that LKT was a natural or lawful daughter of the deceased and claimed that DL is the only surviving issue of the deceased. 57. As Yuen JA noted the Statement of Claim was not verified by a statement of truth from DL, and was thus liable to be struck out under O.41A r.6, RHC. 58. Be that as it may, the trial of the 2012 Action resumed before DHCJ Yee on 8 June 2016, after notice of the hearing had been served on KCC. On 1 June 2016, LKT’s solicitors informed the court that on 27 May 2016, 10 days after the notice of trial was issued, they had received a letter from KCC informing them that they had commenced the 2016 Action and that although they had informed KCC they had instructions to accept service, the writ of summons in the 2016 Action had not been served on them. 59. At the hearing, Counsel for LKT, Mr. Kevin Poon, informed the Judge of the 2016 Action and the contents of DL’s claim therein, but as Yuen JA pointed out “when the judge suggested that a declaration in the 2012 Action would only be binding between the parties ( i.e. LC and LKT), Mr Poon agreed. That was incorrect as a matter of law …. under O.15r.13A(4) the judgment would be binding on DL as if she was a party.” 60. DHCJ Yee dismissed LC’s claim in his absence and after hearing the evidence in support of LKT’s case[42], declared that the deceased had died intestate, LKT “is the only surviving issue of the Deceased”[43] and made a grant of letters of administration in LKT’s favour (the 2016 Judgment). 61. This appeal is concerned with DL’s application to set aside the 2016 Judgment. Application to set aside the 2016 Judgment 62. The 2016 Judgment could be set aside under O.35 r.2, if an application had been made within 7 days after trial, although because she had never acknowledged service within 14 days of service of the Notice of the 2012 Action, she would also need an extension of time to do so.[44] In both cases, an extension of time could be granted under O.3 r.5. 63. An application was made in the 2012 Action on DL’s behalf by Notice of Application dated 10 April 2017 for orders that (1) DL be allowed to acknowledge service of the Writ of Summons, notwithstanding the expiry of the time permitted under O.15 r.13A(4); (2) That DL be allowed to make this application under O.35 r.2(1) (namely, to set aside the Judgment of the 2012 Action), notwithstanding the expiry of the time permitted under O.35 r.2(2); (3) The Judgment given in favour of the defendant upon her counterclaim in the 2012 Action be set aside, and that execution thereon be stayed; and (4) Directions be given in relation to the further conduct of the action. 64. The application was heard before DHCJ Yee on 7 February 2018. In his Decision dated 5 March 2018, the Learned Deputy Judge said “46. In view of all the circumstances, I believe that the fairest order is that (DL) should be given 7 days from the date of this Decision to file her acknowledgement of service thereby becoming a party to this action. The CFI Judgment should then cease to be binding on her. Her application to set aside the CFI Judgment as against her albeit out of time should be heard together with or after the conclusion of the trial of (the 2016 Action) by the same Judge, preferably this Court, to avoid duplication or repetition. Little further delay is caused as far as the present action is concerned. (LKT) has to deal with the (2016 Action) anyway.”[45] Court of Appeal 65. On appeal by LKT, the Court of Appeal reversed the 2018 Order because in accordance with the principle in Hadmor[46] Yuen JA considered [47] “44… the judge had taken into account an irrelevant consideration and had failed to take relevant considerations into account…”. 66. The irrelevant consideration was that the Learned Judge had never intended the 2016 Judgment to be binding on DL and the relevant consideration which the Judge had failed to take into account was “the incorrect approach she had adopted throughout in asserting her claim …” and was in error “when he said DL’s default lay in failing to file the acknowledgement of service.” 67. With respect, I think when DHCJ Yee said he never intended the 2016 Judgment to be binding on DL, he was making the point that had he realized otherwise, he would not have made the Order[48] at all because, there was at least prima facie evidence that LKT was not the only surviving daughter. If so, that was not irrelevant. 68. As for failure to take into account relevant considerations, Yuen JA mentioned the inordinate and inexcusable delay on the part of DL and prejudice to LKT. But earlier, at para.43 of his Judgment, DCHJ Yee described her delay as “inordinate and inexcusable in all the circumstances” and at para.44 his Lordship acknowledged the prejudice to LKT “in light of her advanced age and medical condition …”. 69. With respect, I do not believe the Learned Judge had overlooked these matters, rather I believe the Judge exercised his discretion in favour of DL because he thought they had been counter-balanced by “45. … the documentary evidence presently placed before this court shows that (DL’s) allegation in the (2016 Action) that she is the natural daughter of the Deceased is indeed bona fide. Mr. Poon (Counsel for LKT) cannot argue otherwise. This Court is unwilling to disallow a bona fide claim to be pursued and instead insist that (DL) should be bound by the relevant declaration by reason of her default in filing her acknowledgement of service in the absence of her knowledge of the Notice in the first place”. I can well understand the Judge’s reluctance to allow a bona fide claim to be barred. 70. However, even if the reasons highlighted by Yuen JA could be faulted, there was at least one important error on which the Court of Appeal could rely. 71. The Judge said that the 2018 Order would cause little further delay because “46. … (LKT) has to deal with the (2016 Action) anyway.” [49] With respect, the 2016 Action would cause little delay because it could be struck out because of the 2016 Judgment. The extension of time granted by the Judge would unavoidably cause and had indeed caused substantial further delay, an obviously relevant consideration. Disposition 72. It follows that in my view, the Judge’s exercise of discretion was flawed and the Court of Appeal was entitled to set aside the Judge’s exercise of discretion, and exercise the discretion afresh. That being the case, I agree the appeal should be dismissed and will make a costs order nisi in favour of the Respondent. Mr Justice Spigelman NPJ: 73. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Ribeiro PJ: 74. The Court unanimously dismisses the appeal. [1] HCAP 32/2012, [2018] HKCFI 478, Decision dated 5 March 2018 (“CFI Decision”), DHCJ Yee (“the Deputy Judge”). [2] CAMP 65/2018, CACV 346/2018, [2018] HKCA 491, Reasons for Judgment dated 8 August 2018 (“CA Reasons for Judgment”). [3] [1983] 1 AC 191 at p.220. [4] (2014) 17 HKCFAR 364 at [65]. [5] Supplemental Case for the Appellant at [18]. [6] HCAP 32/2012. [7] Unfortunately, Madam Lee died on 15 August 2019 and her adopted daughter and executrix of her will, Madam Chan Tsui Shan, was granted leave to substitute for her as respondent by order of Mr Justice Cheung PJ dated 21 October 2019. [8] As Caveat No. HCCA 4405 of 2015. [9] CA Reasons for Judgment at [27]. [10] O.41A r.6 provides: “(1) The Court may by order strike out a pleading that is not verified by a statement of truth. (2) Any party may apply for an order under paragraph (1).” [11] Including the DNA report which concluded that LKT was “very likely” a biological cousin of the plaintiff in the 2012 Action. [12] CA Reasons for Judgment at [30.2]. [13] Ibid. at [33] (italics in original, footnote omitted). [14] HCMP 3190/2016, Reasons for Judgment dated 13 April 2017. [15] This provides: “(1) Any judgment … obtained where one party does not appear at the trial may be set aside by the Court, on the application of that party, on such terms as it thinks just.” O.35 r.2(2) provides that: “An application under this rule must be made within 7 days after the trial.” [16] CFI Decision at [46]. [17] Ibid. at [25]. [18] There was no evidence before us as to the nature or value of that estate. [19] CFI Decision at [30]-[31]. [20] Ibid. at [34]-[35]. [21] Ibid. at [43]. [22] Ibid. at [43]-[44]. [23] Ibid. at [45]. [24] Ibid. at [46]. [25] CA Reasons for Judgment at [42]-[43] (footnote omitted). [26] Ibid. at [44]-[46]. [27] CAMP 65/2018, CACV 346/2018, [2018] HKCA 719 (Lam VP, Yuen JA and Kwan JA), Judgment dated 18 October 2018. [28] Hong Kong Court of Final Appeal Ordinance (Cap.484). [29] FAMV 89/2018, [2019] HKCFA 31 (Fok PJ, Cheung PJ and Tang NPJ), Determination dated 14 August 2019. [30] As the Deputy Judge himself effectively acknowledged in the CFI Decision at [31]. [31] CA Reasons for Judgment at [25.2], [35.2] and [37]. [32] CFI Decision at [43]. [33] CA Reasons for Judgment at [47]-[50] (italics in original, footnote omitted). [34] Presumably, the deceased was domiciled in England and the Family Reform Act 1969 applied to the succession of his estate. [35] Unfortunately she died on 15 August 2019. Her adopted daughter, Madam Chan Tsui Shan, the Executrix of her Will was granted leave to substitute for her as the Respondent. [36] The Court may direct the taking of scientific tests to determine the parentage of any party, s.13, Parent and Child Ordinance (Cap 429), and failing compliance may draw such inferences, if any, from that fact as appear proper in the circumstances (s.15). [37] We granted leave to appeal on the ‘or otherwise’ basis. [38] Lam VP and Yuen JA. [39] Binding on her because of O.15 r.13A(4). [40] We do not know why the contest over the estate was only commenced more than 27 years after the death of the deceased. [41] According to DL, Lee Tung Ngoh died in 1992. [42] The DNA report showed a high likelihood that LC and LKT were cousins. [43] The grant of Letters of Administration did not depend on LKT being the only surviving issue of the deceased. Non-Contentious Probate Rules Cap10A, r.21(1)(ii). Indeed, it is rarely possible to prove a negative and at the trial there was no attempt to do so. Had the Judge merely declared that LKT was a surviving issue, it would not have precluded DL from asserting a claim to a share of the estate. The claim could also be resolved easily, with the help of a scientific examination. [44] O.15 r.13A [45] It is unfortunate that at that hearing, it was not proposed that the Judge should direct the taking of a DNA test to show that LKT and DL were sisters. It is inconceivable that the matter could not be resolved without further argument. Nor is it likely that the Judge’s exercise of discretion would be overturned. [46] Hadmor Productions Limited v Hamilton [1983] 1 AC 191, SPH v SA (2014) 17 HKCFAR 364 at para 65. [47] With the agreement of Lam VP. [48] Especially a declaration that LKT was the sole surviving issue. [49] See para. 64 above.
Chief Justice Ma : 1. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ : 2. Theodore Cheng Chee-tock (“Cheng”), was convicted after trial[1] before HH Judge Stanley Chan on a charge of having conspired with Kenny Nam Kok Teng (“Nam”) to defraud the board of directors and shareholders of CY Foundation Group Limited (“CYF”). Cheng was sentenced to 5 months’ imprisonment and a disqualification order[2] was imposed for 3 years. After his release from prison having served his sentence, his appeal to the Court of Appeal[3] was dismissed. 3. On 4 August 2014, the Appeal Committee[4] granted Cheng leave to appeal to this Court. However, on 22 December 2014, the appellant unfortunately passed away. After a full hearing before the Court, it was ordered on the application of Cheng’s widow, Leonora Yung, that she be made a party to the appeal in her capacity as the personal representative of Cheng’s estate in substitution for Cheng and that the pending appeal be continued in her name.[5] A. The events leading to the charge of conspiracy to defraud 4. CYF is a company listed on the Hong Kong Stock Exchange and Cheng was its Chairman from February 2007 to 8 April 2011, spanning the relevant period. 5. Cheng was also Chairman, Chief Executive Officer and controlling shareholder (holding some 57.65% of the shares) of Sino Strategic International Limited (“SSI”) an Australian company publicly listed in Australia. He was also a director of China Entertainment Holdings Limited (“CEH”), a British Virgin Islands company which was a wholly-owned subsidiary of SSI. 6. Until 29 June 2007, CEH owned 100% of the shares of Sino Joy Holdings Limited (“Sino Joy”), a Hong Kong company, which owned a property on the 17th floor of No 200 Gloucester Road, in Wan Chai (“the 17/F Property”). The dealings with which the present appeal is concerned involved disposals of the companies which held the 17/F Property. Annexed to this judgment is a chart provided by the prosecution at the trial showing a series of transfers (“the Annex”). The structure of the companies which initially held the 17/F Property, as described above, is shown in the first column of the Annex. A.1 The first transfer 7. It is the prosecution’s case that a decision was made to sell the 17/F Property to alleviate cash flow difficulties experienced by SSI which had to be resolved by 30 June 2007, the end of SSI’s financial year.[6] To that end, on 30 April 2007, it is alleged that CEH entered into a provisional agreement to sell all the shares of Sino Joy (which held that property) to Mansion Gains Holdings Ltd (“Mansion Gains”), a BVI company wholly owned by Nam. The sale price agreed was AUD7.025 million (or HK$46.5 million[7]) and completion duly occurred on 29 June 2007. Three instalments of HK$4.65 million each had been paid by or on behalf of CEH[8] to Mansion Gains, with the balance financed by facilities provided by the Bank of China. As noted above, Nam was named as a co-conspirator with Cheng. However, Nam died in 2008 and took no part in the trial. 8. As a result of the first transfer, the 17/F Property continued to be held by Sino Joy which became wholly owned by Mansion Gains which was in turn wholly owned by Nam, as shown in the second column of the Annex. A.2 The second transfer 9. In September 2007, Nam’s health took a turn for the worse. This led to Nam transferring all his shares in Mansion Gains to Beauford Ltd (“Beauford”), a BVI company owned by Chong Ching-lai (“Chong”). At trial, Chong was charged with money laundering offences but was acquitted of all charges. 10. Although the disposal was stipulated to have taken place for a consideration of $53.5 million, no payment was in fact made.[9] 11. Consequently, after the second transfer, as shown in the third column of the Annex, Chong owned all the shares in Beauford, which in turn owned all the shares of Mansion Gains, which owned all of Sino Joy’s shares, with the 17/F Property continuing to be held by Sino Joy. A.3 The third transfer 12. The third and final disposal of relevance involved the sale (contracted on 9 October 2007 and completed on 30 November 2007) of all the shares in Mansion Gains by Beauford to Highsharp Investments Ltd (“Highsharp”), a BVI company wholly owned by CYF, for HK$53.5 million. Cheng was one of three directors who resolved to approve the purchase. No Special General Meeting was held to obtain the shareholders’ consent to the acquisition. Consequently, the 17/F Property was held by Sino Joy, a company wholly owned by Mansion Gains, in turn wholly owned by Highsharp, itself a wholly-owned subsidiary of CYF, as shown in the fourth column of the Annex. B. The charge 13. The particulars of the charge allege that Cheng and Yu [the 3rd defendant at the trial], between 2 April 2007 and 28 January 2008: ... conspired together and with Nam Kok-teng ... to defraud the Board of Directors and shareholders of CYF by dishonestly: (i) falsely concealing from CYF that said Cheng Chee-tock, Theodore had a beneficiary [sic] or financial interest in a property at 17th floor, No. 200 Gloucester Road, Wan Chai; and (ii) falsely representing to CYF that the acquisition of the said property by CYF did not constitute a connected transaction for the purpose of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (‘the Listing Rules’), thereby inducing CYF to complete the purchase of said property without convening the required company meeting(s) or complying with the Listing Rules.” 14. The prosecution was therefore alleging and was required to prove beyond reasonable doubt that: (a) Cheng and his co-conspirators conspired to effect a connected transaction constituted by CYF’s acquisition[10] of the 17/F Property; (b) They knew that it was a connected transaction but conspired falsely to represent to CYF that it was not; (c) Cheng had a beneficial or financial interest in the 17/F Property but conspired with his co-conspirators falsely to conceal that fact; and (d) that by such concealment and false representation, Cheng and his co-conspirators induced CYF to complete the acquisition without the necessary company resolutions and without complying with the relevant Listing Rules. 15. The first and crucial question is whether CYF’s acquisition was indeed a connected transaction. If so, then by virtue of rule 14A.02 of the Listing Rules,[11] public announcements and the prior approval of the transaction by the shareholders in general meeting would have been required, with the person having a material interest in the transaction not being allowed to vote. 16. It being a charge of conspiracy to defraud, as the Court held in Mo Yuk Ping v HKSAR:[12] “...the offence is constituted by becoming a party to an agreement with another or others to use dishonest means (a) with the purpose of causing economic loss to, or putting at risk the economic interests of, another; or (b) with the realization that the use of those means may cause such loss or put such interests at risk. The offence extends also to cases in which the dishonest means cause a person to act contrary to his public duty... [it being an open question whether the offence extends to cases where the victim is induced to act contrary to his or her private duty].” 17. Although it does not appear to have been made explicit in the judgments below, the prosecution’s case may be taken to be that the alleged conspiracy to conceal and misrepresent the facts regarding a connected transaction with a view to circumventing safeguards for shareholders was a conspiracy putting their economic interests at risk. 18. Of course, if the 17/F Property purchase was not a connected transaction, none of the associated obligations would have arisen, there would have been no question of any dishonest concealment or misrepresentation and accordingly no basis for finding a conspiracy to defraud. C. How was the connected transaction constituted? 19. For the 17/F Property acquisition to qualify as a connected transaction, it had to be a transaction[13] between a listed issuer (or its subsidiary) and a connected person.[14] A connected person has for present purposes relevantly to be a “director, chief executive or substantial shareholder of the listed issuer”.[15] It follows that in a case like the present, before a transaction counts as a connected transaction, the party involved in the transaction with the listed issuer must be “connected” in two ways: (i) he or she must be one of the listed issuer’s directors, its chief executive or a substantial shareholder; and (ii) he or she must be a party to the transaction entered into with the listed issuer. 20. The rule is aimed at preventing someone who is likely to have influence over a listed company’s affairs causing that company or its subsidiaries to enter into deals benefiting himself or his associates to the possible detriment of the shareholders, hence the requirements for disclosure, authorizing resolutions and a restriction on voting by the connected person.[16] 21. Here, the charge makes it clear that the relevant transaction was the purchase of the 17/F Property by Highsharp (a wholly owned subsidiary of CYF). It obliquely suggests that Cheng is the “connected person” who is the other party to the transaction since it alleges that his “beneficiary or financial interest in the property” was falsely concealed. Cheng would qualify as a “connected person” since he was “a director, chief executive or substantial shareholder of the listed issuer”.[17] However, on the face of each of the transfers resulting in CYF’s acquisition, Cheng was not a party. 22. A “connected person” is defined to include an “associate” of a director, chief executive or substantial shareholder of the listed issuer. And an “associate” for these purposes is relevantly defined by Rule 1.01 as follows: “ ‘associate’ ... in relation to an individual means: ... any company in the equity capital of which he ... [is] directly or indirectly interested so as to exercise or control the exercise of 30% ... or more of the voting power at general meetings, or to control the composition of a majority of the board of directors and any other company which is its subsidiary or holding company or a fellow subsidiary of any such holding company;…” 23. If the 17/F Property transaction was between CYF (or Highsharp) and SSI, it is likely that it would constitute a connected transaction since SSI would qualify under Rule 1.01 as an “associate” of Cheng (a connected person), being a “company in the equity capital of which he ... [was] directly or indirectly interested so as to exercise or control the exercise of 30% ... or more of the voting power at general meetings …” However, Mr Nicholas Cooney SC,[18] expressly disclaims reliance on Rule 1.01.[19] 24. One might add that the Listing Rules cast a very wide net defining persons involved in relevant dealings as “associates” of a connected person. For instance, Rule 14A.11(4)(a) defines an “associate” of a “connected person” to include : “... (a) any person or entity with whom [the connected person] has entered, or proposes to enter, into any agreement, arrangement, understanding or undertaking, whether formal or informal and whether express or implied, with respect to the transaction which is such that, in the opinion of the Exchange, that person or entity should be considered a connected person...”[20] 25. The prosecution does not rely on such provisions and it is no part of its case that any of the parties to the string of transfers mentioned above was an “associate” of Chengs so as to constitute the connected transaction with CYF.[21] We are therefore left needing to identify the connected person from whom Highsharp can be said to have acquired the companies holding the 17/F Property. 26. How then, is Cheng’s conviction justified notwithstanding the evident difficulty of locating the connected person who must be party to the transaction with Highsharp in order to make the acquisition a connected transaction? D. The Judge’s basis for finding a connected transaction 27. It is not clear how the Judge resolved that problem. He states, unhelpfully: “... I find that the whole management of CYF, including the subsidiaries of CEH, Sino Joy, was involved one way or another in the property transaction.”[22] 28. He then adds: “The conspiracy originated from the liquidity problem of SSI, and capital injection was required so that the position of SSI in the Australian Stock Exchange would not be adversely affected. With the decision to sell the property, I find that D1 [Cheng] was eager to keep the property in his reach by having it transferred to CYF which had more funds.”[23] 29. He appears to find that Cheng would somehow “keep the property in his reach” with the help of Nam (and subsequently Beauford), although the juridical nature of the relationship between Cheng and Nam (and then Beauford) is not made clear: “Nam was a close associate of D1, and even without anything on paper, Nam was entrusted to set up Mansion Gains which would hold Sino Joy which in turn held the 17/F property. In September 2007, Nam’s health deteriorated drastically and even fainted on one occasion after dinner. The plan was changed to have D2 [Chong] taking up the role of Nam and, hence, a BVI company Beauford was set up. Beauford was to hold another BVI company, Mansion Gains, and that indirectly held the property. And then the final stage would be for D2’s Beauford to pass the property to CYF through Highsharp.”[24] 30. The thrust of the Judge’s reasoning appears to be that Cheng beneficially owned the 17/F Property. Thus, Cheng’s aim was to “keep the property in his reach” and to this end, he decided to “entrust” it to Nam who set up a corporate structure to hold it. This is reflected in the Judge’s finding that Cheng “did have the beneficiary or financial interests in the 17/F property through his co-conspirator Nam.”[25] His Honour therefore appears to have concluded that Nam was in some sense a trustee of the 17/F Property for Cheng. 31. Attempting to summarise that line of reasoning, it might be formulated as follows: The 17/F Property sale was a connected transaction because it was between the subsidiary (Highsharp) of a listed issuer (CYF) and a connected person (Cheng) because Cheng was and, through the trusteeship of Nam (who was replaced by Chong and Beauford after Nam fell ill) remained throughout, the beneficial owner of the 17/F Property. Thus, when it came to be sold by Beauford to Highsharp, the transaction was in reality between CYF’s subsidiary and Cheng (the beneficial owner), making it a connected transaction. E. The Court of Appeal’s basis for finding a connected transaction 32. The Court of Appeal upheld the Judge’s findings and conclusion regarding the existence of a connected transaction, but with two modifications. 33. First, it started off with the proposition that Cheng had a “financial” rather than a beneficial interest in the 17/F Property by virtue of being a shareholder of SSI: “As a shareholder, enjoying the panoply of the rights of shareholders, including that in respect of the receipt of dividends paid by Sino Strategic, the 1st defendant had a financial interest in the 17/Floor property.”[26] 34. The Court of Appeal went on to state: “However, if the judge was correct to determine that Kenny Nam held his interest in the 17/Floor property on behalf of the 1st defendant, we are satisfied that the judge was correct to determine the latter continued to enjoy a financial interest in the 17/Floor property, albeit by a different route.”[27] 35. This attributes to the Judge a finding that Cheng “continued to enjoy a financial interest in the 17/Floor property” although, as noted above, His Honour held that Cheng enjoyed not merely a financial, but a beneficial, interest in the property, having “entrusted” Nam to set up a corporate structure to hold the same. It is unclear what the “different route” contemplated by the Court of Appeal was. 36. Secondly, the Court of Appeal went on to attribute to the Judge a finding that Nam was Cheng’s agent rather than his trustee: “The judge found that, having determined to keep the 17/Floor property, the 1st applicant ‘entrusted’ Kenny Nam ‘to set up Mansion Gains which would hold Sino Joy which in turn held the 17/ F property.’ Clearly, the judge’s finding was to the effect that Kenny Nam was to act as the 1st applicant’s agent and on his instructions. We are satisfied that the judge was entitled to make that finding.”[28] 37. It concluded: “... we are satisfied that the judge was entitled to determine that Kenny Nam acted, in effect, as the agent of the 1st defendant.”[29] 38. The Courts below therefore endeavoured to overcome the problem of tying Cheng to the 17/F Property transaction with Highsharp (so as to make it a connected transaction) in two ways. (a) The Judge sought to achieve this by holding that Cheng had throughout a beneficial interest in the property (initially by virtue of his shareholding in SSI and thereafter by Nam acting as his trustee, having had the property entrusted to him; with Nam then being replaced by Chong and Beauford), so that the sale by Beauford to Highsharp was in reality a transaction between Cheng, the beneficial owner, and a subsidiary of a listed issuer, CYF. (b) The Court of Appeal’s approach was to find that, by virtue of his shareholding in SSI, Cheng had a financial interest in the 17/F Property and that he maintained that financial interest with Nam “in effect” dealing with it as his agent. It treats the Judge as having found that such agency existed and was content to hold that the Judge was entitled to make that finding. It was implicitly held that Beauford was also acting as Cheng’s agent in the sale to Highsharp. F. Problems with the approach of the Courts below F.1 Cheng’s alleged beneficial or financial interest in SSI’s property 39. Linguistically, there can be little objection to someone saying in a general commercial sense that a shareholder has a “financial interest” in the assets held by the company. How a company’s assets are dealt with may have a material impact on the balance sheet and on dividends. If someone were to misappropriate those assets, the shareholder may be financially prejudiced. He or she therefore has a financial interest in how the company treats its assets and so, loosely speaking, a financial interest in those assets. 40. However, it is trite law that a shareholder does not have any proprietary or beneficial interest in a company’s property. This was summarised by Lord Millett NPJ in Waddington v Chan Chun Hoo,[30] in these terms: “A company is a legal entity separate and distinct from its members. It has its own assets and liabilities and its own creditors. The company’s property belongs to the company and not to its shareholders. If the company has a cause of action, this represents a legal chose in action which represents part of its assets. Accordingly, where a company suffers loss as a result of an actionable wrong done to it, the cause of action is vested in the company and the company alone can sue. This is the first rule in Foss v Harbottle(1843) 2 Hare 461. No action lies at the suit of a shareholder suing as such, though exceptionally he may be permitted to bring a derivative action in right of the company and recover damages on its behalf...” 41. Cheng’s legal rights were as a shareholder of SSI. As such, his rights did not include any beneficial interest in the 17/F Property which was one of SSI’s assets held through CEH and Sino Joy. It follows that the attempt to tie Cheng to Highsharp’s acquisition as a connected person on the basis that he had a beneficial interest in the 17/F Property must fail. 42. The Court of Appeal’s approach of regarding Cheng’s “financial interest” as one of the “panoply of rights” he enjoyed as a shareholder does not fare any better. Upon SSI, through CEH, selling Sino Joy to Mansion Gains, Cheng could not any longer be said to have had a financial interest in the 17/F Property, even in the general commercial sense mentioned above. 43. It was the prosecution’s case, accepted in the Courts below, that the object of selling the 17/F Property was to alleviate “a cash flow difficulty experienced by Sino Strategic, which had to be resolved by its financial year-end of 30 June 2007”.[31] The Court of Appeal summarised the payments and funding of the purchase price received on sale of the property.[32] In its 2007 Annual Report, SSI reported a “Loss of Controlled Entity” arising out of its disposal on 29 June 2007 of its 100% interest in Sino Joy for a consideration of AUD7,025,108, stating the net proceeds from such disposal to be AUD7,021,195. 44. It follows that upon its sale by CEH to Mansion Gains, Cheng (as a shareholder in SSI) could no longer be said – even in a layman’s loose sense – to have any financial interest in the 17/F Property or in the shares of Sino Joy. His interest as a shareholder of SSI was transformed into a financial interest in the net sale proceeds received by SSI’s subsidiary. It follows that Cheng cannot be regarded in any sense as a party to Highsharp’s acquisition of the 17/F Property by reason of Cheng having either a beneficial or a financial interest in the property. 45. Moreover, the suggestion that Cheng wished to “keep the property in his reach by having it transferred to CYF” is hard to understand. CYF was a listed company and Cheng was one of its directors and its chairman. There is no evidence or finding that he held any shares in CYF. It is therefore difficult to see how, upon the 17/F Property’s acquisition by CYF, Cheng could be said to have “kept the property in his reach”. He did not thereby acquire via CYF some financial or beneficial interest in the property. Any possible influence he might have been able to exert as chairman later to cause CYF to sell the property to himself would require independent shareholder approval as a connected transaction. In any event, none of this helps to qualify Highsharp’s acquisition as a connected transaction with Cheng. F.2 No basis for agency 46. The Court of Appeal did not explain how Nam (succeeded by Chong and Beauford) could be said to have acted as Cheng’s agent. It took it that the Judge had found such agency and held, without elaboration, that he was entitled so to find.[33] 47. It is possible that the Court of Appeal had in mind an e-mail from Cheng to Josiah Choi dated 2 April 2007 discussing the possible sale of the 17/F Property as the basis for finding an agency. No other evidential basis is apparent. The e-mail is referred to in the Court of Appeal’s judgment[34] as follows: “In an initial e-mail to solicitors, copied to the 1st defendant, Mr Josiah Choi noted that it was proposed that FGL [CYF][35] acquire Sino Joy, which company owned the 17/Floor property and was a subsidiary of Sino Strategic. Further, it was asserted that the 1st defendant was a shareholder and director of both FGL and Sino Strategic. It concluded by stating that the lawyers would handle the ‘SE and SGM’, the latter being a reference to a Special General Meeting of the shareholders of FGL. In response, the 1st defendant enquired: ‘May we use Kenny Lam [sic] to buy first and transfer to 1182[36] at a later stage?’ Mr Josiah Choi replied on 3 April 2007: ‘…it is simple and viable to acquire Sino Joy by 1182 as we need to hold a SGM…. It seems no good for Kenny to pay [sic] a significant role in 1182. Pls instruct your final decision.’ No instructions or reply was forthcoming from the 1st defendant.” 48. This e-mail is referred to in several places in its judgment,[37] notably at §79 where Lunn JA describes this exchange as one where Cheng “had mooted using Kenny Nam to buy the 17/Floor property first and transferring it at a later stage to CYF”. 49. The agency theory for deeming Cheng a party to the 17/F Property acquisition is untenable. It would require multiple agencies to be established involving: (i) SSI’s subsidiary CEH acting as Cheng’s agent in selling Sino Joy and the 17/F Property (necessarily implying that Cheng owned or had some beneficial interest in those assets to be sold on his behalf); (ii) Nam, via Mansion Gains holding the acquired shares in Sino Joy and thus the 17/F Property as agent for Cheng and then acting as his agent in transferring Mansion Gains to Beauford; and (iii) Beauford then selling Mansion Gains and, via its subsidiary Sino Joy, the 17/F Property, to Highsharp as agent for Cheng. Only then could Cheng be regarded as a connected person (acting through this string of agents) selling the companies holding the 17/F Property to Highsharp. 50. The evidence falls far short of making good this theory. In the first place, the e-mail merely contains an idea mooted by Cheng, not supported by Choi and evidently not further pursued. In any event, Cheng was not saying that Nam should act as his or anyone else’s agent. The floated suggestion was for Nam to buythe property first and then transfer it to “1182”, ie, to CYF. The suggestion was in other words, that Nam should purchase for his own account and then on-sell to CYF. 51. Secondly, an agent is a person authorized to act on behalf of a principal so as to affect the principal’s relations with third parties. For the reasons already discussed,[38] Cheng did not, as a shareholder in SSI, have any proprietary or beneficial interest in the 17/F Property (or in the shares of Sino Joy). Thus, when CEH sold the Sino Joy shares to Mansion Gains, it was not disposing of any property in which Cheng had an interest. Cheng was not CEH’s principal and CEH was not acting as agent on Cheng’s behalf in transacting that sale. 52. Thirdly, as indicated above,[39] the evidence showed that the shares in Sino Joy were paid for on behalf of Mansion Gains by Luck Continent, Sino Gain and facilities granted by the Bank of China, personally guaranteed by Nam. The Judge, however, thought the source of these funds “dubious” and queried whether the money “actually belonged to Nam, even though Nam owned Sino Gain”, pointing out that a Sino Gain account had been used to defray certain expenses on behalf of Cheng and his wife. This is a finding challenged by the appellant on the substantial and grave injustice ground as running counter to the evidence, counter to the prosecution’s case and as a procedurally unfair finding. There was, in any event, no finding that Cheng had contributed to those funds so that it is hard to see how the Court of Appeal could conclude that it had been proved to the requisite standard that after transfer of the shares, “Kenny Nam held his interest in the 17/Floor property on behalf of” Cheng. 53. Fourthly, the evidence is that on the final sale, CYF paid Beauford the purchase price and acquired the 17/F Property to house its corporate offices. There is no evidence that Cheng received any part of those funds. Nor is there evidence of him having acquired any interest in the property in the hands of CYF. There is thus no evidential basis for regarding Beauford as having sold on Cheng’s behalf. F.3 Conclusion as to the decisions below 54. It follows, in my view, that the convictions cannot be sustained on the reasoning of the decisions below. There was no basis for finding a connected transaction established. Consequently, the other elements involving dishonest concealment, misrepresentation and non-compliance with the Listing Rules were not made out. G. The prosecution’s submissions on this appeal 55. The argument advanced by the prosecution as to how the connected transaction is constituted has shifted in the course of the proceedings. As presented on this appeal, it involves a modified version of the beneficial ownership theory coupled with a novel approach to the construction of the Listing Rules. 56. The conspiracy was hatched, it says, because “SSI faced a cash-flow problem and was in urgent need of money before 30 June 2007 in order to avoid suspension from trading on the Australian Stock Exchange”. Accordingly: “With the aim of saving SSI, a plan was devised to sellSSI’s asset, the 17/F Property, to obtain cash but with the Appellant retaining his beneficiary or financial interest in the 17/F Property, which he had by virtue of his shareholding in SSI. The co-conspirators determined that CYF should be the candidate as buyer, of which the Applicant was the chairman and director.” (Emphasis supplied)[40] 57. However, so the prosecution alleges, to avoid delay and the risk that CYF’s shareholders might not approve the acquisition: “...the co-conspirators devised a conspiracy which involved the insertion of Kenny Nam as a dummy purchaser in between the underlying connected transaction between SSI and CYF in order to conceal that underlying connected transaction for the purpose of defrauding the Board of Directors and shareholders of CYF, thereby inducing CYF to complete the purchase of the 17/F Property without convening the required company meeting(s) or complying with the Listing Rules.” (Emphasis supplied)[41] 58. It will be noted that the prosecution’s assertion is now that the connected transaction is between SSI and CYF. Since it has disavowed any allegation that SSI was a connected person by virtue of being an “associate” of Cheng within Rule 1.01, the prosecution must confront the difficulty that SSI is not a “connected person”. This is where the prosecution resorts to its novel construction. The relevant rule is Rule 14A.13(1)(a) which defines a “connected transaction” as follows: “A connected transaction is any transaction between a listed issuer and a connected person ...” 59. The focus of the prosecution’s argument is on the word “between”. It emphasises that: “It was never the prosecution case that the Appellant personally acquired the 17/F Property or that the connected transaction was one between CYF and the Appellant personally.” (Emphasis supplied)[42] 60. Although Cheng was not personally a party to the acquisition, the prosecution maintains that he is the “connected person” for the purposes of characterising the 17/F Property transaction as a connected transaction: “Regarding the identity of the ‘connected person’ in this case, the Respondent submits it is the Appellant for the reason that he is a director of the listed issuer (CYF).”[43] 61. The prosecution asserts that its case “has always been” that: “The connected transaction ... was between CYF and SSI, with the Appellant having a beneficiary or financial interest in the 17/F Property.”[44] 62. The contention is that the word “between” in the aforesaid definition of “connected transaction” should be construed to have an expanded meaning so that even though the transaction identified as the “connected transaction” is actually between SSI (not a connected person) and CYF,[45] it should nevertheless be regarded as a transaction “between” CYF and Cheng (a connected person) because of Cheng’s alleged beneficial or financial interest in the 17/F Property. This, Mr Cooney argues, is achievable on a “purposive construction” of the word “between”. 63. That argument is elaborated in the respondent’s printed case as follows: “The Respondent submits that the Appellant’s submissions are wrongly based on a strict literal interpretation of the word “between” in the definition of connected transaction (i.e. a transaction between the listed issuer and the connected person). Instead, the Respondent submits that it is necessary to apply a purposive approach in interpreting the word ‘between’ in order not to defeat the purpose of the Listing Rules.”[46] “A purpose of the Listing Rules is to avoid connected persons taking advantage of their positions through transactions with the listed issuer or its subsidiaries at the cost of its minority shareholders. ... This purpose would be defeated if a connected person, who had a beneficiary or financial interest in an asset of which he wished to take advantage, could avoid the Listing Rules requirements only because his interest was indirect, as a shareholder, and not direct. For this reason, the circumstances of the present case fall within Rule 14A.13.”[47] “In view of the fact that a purpose of the Listing Rules is to avoid a connected person taking advantage of his position, the question is what role the connected person played, how the transaction was arranged and executed and what influence the connected person had. The percentage of shareholding of a connected person is not the only determinative factor of a connected transaction, but merely one of the indicia of the connected person’s interest in and influence over the connected transaction. Once such an interest is established, then the transaction may be a connected transaction under the Listing Rules.”[48] 64. Such an approach is impermissible. A purposive interpretation does not permit plain words to be ignored or overridden because some purported purpose which is asserted to be desirable would not be achieved if effect is given to those words. In China Field Ltd v Appeal Tribunal (Buildings) (No 2),[49] Lord Millett NPJ issued a warning precisely against such an erroneous approach, stating: “...There can be no quarrel with the principle that statutory provisions should be given a purposive interpretation, but there has been a distressing development by the courts which allows them to distort or even ignore the plain meaning of the text and construe the statute in whatever manner achieves a result which they consider desirable. It cannot be said too often that this is not permissible. Purposive construction means only that statutory provisions are to be interpreted to give effect to the intention of the legislature, and that intention must be ascertained by a proper application of the interpretative process. This does not permit the Court to attribute to a statutory provision a meaning which the language of the statute, understood in the light of it context and the statutory purpose, is incapable of bearing: see HKSAR v. Lam Kwong Wai.[50]” 65. As we have seen, Rule 14A.13(1)(a) defines a connected transaction as “any transaction between a listed issuer and a connected person”. There can be no doubt as to what “between” means in that context: the listed issuer and the connected person must be mutual parties to the transaction. There is no room for suggesting that the rule can be construed so that a “connected transaction” is constituted by a transaction between a listed issuer and someone who is not a “connected person”. 66. It is wrong to suggest that the Listing Rules’ objectives regarding transactions in which connected persons are indirectly interested would be circumvented unless such an amorphous meaning is attributed to the word “between”. The Rules cater expressly for a wide range of situations where a connected person is indirectly interested in a transaction with a listed issuer. [51] As noted above, two instances involve Rule 1.01 and Rule 14A.11(a) which deem a connected person’s deals done through an “associate” to be connected transactions. The prosecution has disavowed reliance on such provisions and seeks instead to extend the definition of “connected transaction” to embrace a meaning that the words used cannot possibly bear. The prosecution’s approach deprives the word “between” of all relevant content and would render otiose the Rules designed to catch indirect connected person transactions. 67. Additionally, since the prosecution’s argument rests on the premise that, by virtue of being a shareholder in SSI, Cheng had a beneficial or financial interest the 17/F Property when it was acquired by Highsharp, it also fails for the reasons explained in Section F.1 above. Conclusion 68. It should be emphasised that this judgment examines the Listing Rules as applied to the decisions of the Courts below and to the way the case was analysed and presented by the prosecution on this appeal with a view to assessing whether criminal liability for conspiracy to defraud was properly established. The case might of course have been quite differently presented. The intervening share disposals might have been differently characterised and reliance might have been placed on other Listing Rules, including those involving “associates” of the connected person. Differently approached in a future case, the context might call for particular concepts used in the Rules to be given a wider or narrower meaning. Whether in some future case, a string of transfers or some other complex commercial arrangement might properly be characterised as a single connected transaction may depend on issues of fact and construction arising in the specific setting. 69. For all the foregoing reasons, I would allow the appeal and quash the conviction. I would direct that the parties be at liberty to lodge written submissions as to costs within 14 days from the handing down of this judgment. Mr Justice Tang PJ: 70. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Fok PJ: 71. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Spigelman NPJ: 72. In this matter I have had the privilege of reading the judgment of Mr Justice Ribeiro PJ in draft. Subject to the following additional observations, I agree with his Lordship’s reasons and conclusion. 73. In this Court the Respondent asserted that its case ‘was and is that the connected transaction is the underlying transaction of the sale of the 17/F Property by SSI to CYF’. This was not the only way the case was put below. However, it is not necessary to analyse that matter. It is sufficient to proceed on the basis that, although the charge was not specific in this respect, that is the case with which this Court is concerned. 74. Mr Justice Ribeiro PJ rejects the submissions of the prosecution that somehow, a “transaction” expressed in that way can be extended to encompass the First Appellant. I agree. 75. This is not to give a narrow meaning to the word “between” in Part 14A. It is to recognize that the word “transaction” is itself a word of wide import capable of encompassing a series of inter-related steps. However, a “transaction” of which one party is SSI, is not a “connected transaction” because SSI was not a “Connected person” within Rule 14A.11 (1), which is the provision on which the Respondent relied. 76. For the reasons his Lordship gives on this aspect of the Respondent’s case, the appeal should be allowed. 77. My additional observations are directed to the Court of Appeal’s analysis of the intermediate transfers between SSI and Highsharp. In my view that part of the Court of Appeal’s reasoning was correct. 78. The Court’s analysis begins by setting aside the reference in the charge to “beneficiary”, in the disjunctive to “financial”. That terminology was grammatically wrong, duplicitous and plainly inapplicable. If Cheng retained any indirect “interest” in the property, it could only have been “financial”. 79. The Court stated that the trial judge’s finding that Cheng “entrusted” Nam with the 17th Floor property was “to the effect” that Nam was to act as his “agent and on his instructions” (Para 100) and that he “acted, in effect, as (his) agent” (Para 104). I do not understand the words “entrusted” or “agent” to have been deployed in any technical sense. Rather they reflect a conclusion that Nam was used to warehouse the property, until it could be acquired by CYF, as Cheng intended. 80. There was a considerable body of evidence to support that conclusion. The email of 2 April 2007 was in my opinion, an indication that Cheng had in mind a warehouse arrangement. As the majority shareholder of SSI he was able to ensure that Sino Joy was sold, eventually to Nam’s company Mansion Gains. The inference that the property was always intended to be passed on to the CYF group is reinforced by the fact, that when Nam became ill and the complication of the estate becoming involved arose, the property was passed on to a straw corporation, Beauford. The messy financial transactions involving Sino Gain, Mansion Gains, Nam, Cheng and Mrs Yung, set out in detail by the trial judge, are consistent with a warehousing arrangement on the occasion in question. 81. The rejection by the Court of Appeal of the Appellant’s case that Nam or Mansion Gains acted as a principal was justified. The fact the Nam may have used his own money is quite irrelevant to whether he was involved in an arrangement to warehouse and pass on the property in due course, and in accordance with Cheng’s intention. 82. I agree with the orders proposed by Mr Justice Ribeiro. Chief Justice Ma: 83. The appeal is unanimously allowed and the conviction quashed. It is directed that the parties be at liberty to lodge written submissions as to costs within 14 days from the handing down of this judgment. Ms Wing Kay Po, Ms Doris Li and Mr Newton Mak,instructed by Peter K.S.Chan & Co., for the Appellant Mr Nicholas Cooney SC, on fiat for and Ms Jessie Sham, PP of the Department of Justice, for the Respondent ANNEX: Prosecution Transaction Chart [1] DCCC 476/2011 (4 October 2012). [2] Pursuant to s.168E of the Companies Ordinance (Cap.32). [3] Stock VP, Lunn JA and Barnes J, CACC 460/2012 (14 March 2014). [4] Ma CJ, Ribeiro and Tang PJJ (FAMC 23/2014). [5] HKSAR v Cheng Chee Tock Theodore (2015) 18 HKCFAR 292. [6] Court of Appeal §13. [7] Reflecting the property’s valuation dated 14 May 2007 obtained by CEH from BMI Appraisals as at 27 April 2007: Court of Appeal §16. [8] HK$4.65 million was paid to CEH by cheque dated 30 April 2007 drawn on Luck Continent Ltd (“Luck Continent”), a BVI company owned and controlled by Dato Poh Po Lian who was its sole shareholder and Chairman, as well as the majority shareholder on CYF. The other two deposit amounts were paid to CEH by cheques drawn on Sino Gain Holdings Ltd (Sino Gain”), a BVI company wholly owned by Nam, who was also its sole director (Court of Appeal §§20-21). [9] Court of Appeal §23. [10] The charge does not distinguish between CYF and Highsharp. [11] All references to rules in this judgment are to the Listing Rules current at the time of the relevant transactions. [12] (2007) 10 HKCFAR 386 at §40. [13] Which includes the acquisition or disposal of assets: r 14.04 and r 14A.10(13). [14] Rule 14A.13(1)(a). [15] Rule 14A.11(1). [16] “The connected transactions rules are intended to ensure that the interests of shareholders as a whole are taken into account by a listed issuer when the listed issuer enters into connected transactions. The rules set out in [Chapter 14A] also provide certain safeguards against listed issuers’ directors, chief executives or substantial shareholders (or their associates) taking advantage of their positions”: r 14A.01. “This is achieved through the general requirement for connected transactions to be disclosed and subject to independent shareholders’ approval. Accordingly, where any connected transaction is proposed, the transaction must be announced publicly ... Prior approval of the shareholders in general meeting will be required before the transaction can proceed. A connected person with a material interest in the transaction will not be permitted to vote at the meeting on the resolution approving the transaction”: r 14A.02. [17] Rule 14A.11(1). [18] Appearing for the prosecution with Ms Jessie Sham, Senior Public Prosecutor (Ag). [19] Respondent’s Case (“RC”) §44. [20] This particular rule, however, is likely to be inapplicable in a criminal context given the requirement for “the opinion of the Exchange”. [21] While r 14A.11(4)(a) which defines another category of “associate” was mentioned by the Court of Appeal (at §5), this was not taken further in its judgment. [22] Reasons for Verdict (“RFV”) §123. [23] Ibid. See also Court of Appeal §13. [24] RFV§123. [25] RFV§131. [26] Court of Appeal §60. [27] Ibid. [28] Court of Appeal §100. [29] Court of Appeal §104. [30] (2008) 11 HKCFAR 370 at §47, citing Wallersteiner v Moir(No 2) [1975] 1 QB 373 CA at p 390; Prudential Assurance Co Ltd v Newman Industries Ltd(No 2) [1982] Ch 204 CA (“Prudential”) at p 210; Johnson v Gore Wood & Co[2002] 2 AC 1 at p 61 et seq. [31] Court of Appeal §13. The Judge (at §123) found that “The conspiracy originated from the liquidity problem of SSI, and capital injection was required so that the position of SSI in the Australian Stock Exchange would not be adversely affected.” [32] Court of Appeal §20. One cheque of $4.65 million was issued by Luck Continent; two cheques in the same amount by Sino Gain and the balance by facilities granted on mortgage by the Bank of China, guaranteed by Nam. [33] Court of Appeal §§60, 100 and 104. See Section D above. [34] Court of Appeal §14. [35] Prior to 25 May 2007, CYF’s name was Foundation Group Limited, hence FGL: Court of Appeal §7. [36] 1182 was CYF’s stock code at the Stock Exchange: Court of Appeal §7. [37] Court of Appeal §§38, 44, 63 and 79. [38] In Section F.1 above. [39] In Section A.1. [40] RC§10. [41] RC§11. It adds that: “...the subsequent insertion of Chong Ching-lai’s Beauford (after Kenny Nam became ill) was also a dummy purchase inserted as part of the concealment of the underlying connected transaction.” (RC§12) [42] RC§18. [43] RC§35. [44] RC§13. Ms Wing Kay Po, appearing with Ms Doris Li and Mr Newton Mak for the appellant, disputes this, pointing to several variants of the prosecution case on what constituted the alleged connected transaction. [45] Always assuming that the prosecution can successfully ignore the intermediate transactions. [46] RC§38. [47] RC§39. [48] RC§43. [49] (2009) 12 HKCFAR 342 at §36. [50] (2006) 9 HKCFAR 574. [51] See Section C above. Rule 1.01 deals with a variety of situations involving relatives of a connected person; his or his family’s interests as beneficiaries under a discretionary trust and via any trust-controlled company; companies in which the connected person controls 30% or more of the voting power and the holding company, subsidiaries and companies related to such companies, etc. As noted above, Rule 14A.11(4) further expands the concept of “associate” to cover, amongst others, persons with whom the connected person has entered into or proposes to enter into, any agreement, arrangement, understanding or undertaking which the Exchange considers makes that person or entity a connected person; persons cohabiting as a spouse, etc; and interests in non wholly-owned subsidiaries and related companies.
Chief Justice Ma: 1. I agree with the judgment of Lord Hoffmann NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Lord Hoffmann NPJ. Mr Justice Tang PJ: 3. I agree with the judgment of Lord Hoffmann NPJ. Mr Justice StockNPJ: 4. I agree with the judgment of Lord Hoffmann NPJ. Lord HoffmannNPJ: 5. On 22 December 1995 the Airport Authority (“the Authority”), which had been set up to oversee the planning, design and construction of the new airport at Chek Lap Kok, granted to Aviation Fuel Supply Company (“the taxpayer”) a franchise to design and construct a Facility for the supply of aviation fuel. On the same date and pursuant to the terms of the Franchise Agreement, the Authority granted the taxpayer a lease of the Facility for a term of 20 years and the right to nominate an Operator who would have the exclusive right to operate and maintain the aviation fuel Facility at the airport. Out of the income derived from supplying fuel to the airlines, the Operator was to pay the taxpayer periodic Facility Payments calculated to enable it to recover the cost of constructing the Facility and a reasonable return on its investment. 6. The airport opened on 6 July 1998. By clause 11.1 of the Franchise Agreement the Authority was given the right, at any time after the 5th anniversary of the opening date, to terminate the franchise and lease by electing to pay the taxpayer an Accelerated Facility Cost Payment, calculated according to a formula intended to reflect the net present value of the right to future Facility Payments. Thereafter the Operator would continue to operate the Facility on behalf of the Authority, which would receive the Facility Payments. 7. On 23 October 2002 the Authority gave notice of its election to terminate the taxpayer’s franchise by making an Accelerated Facility Cost Payment on 7 July 2003. On that date it paid the taxpayer US$449,043,000 (“the payment”). 8. In its profits tax returns for the year 2003-4, the taxpayer treated the payment as a capital receipt in return for the transfer of its entire assets and undertaking at the airport to the Authority. The Assessor, on the other hand, took the view that the payment was income chargeable to profits tax. The Deputy Commissioner upheld her assessment. 9. The taxpayer appealed and pursuant to section 67 of the Inland Revenue Ordinance Cap 112 (“the Ordinance”) the appeal was transferred to the Court of First Instance and came before Barma J. In a judgment delivered on 8 July 2011 he accepted that the payment was of a capital nature and discharged the assessment. The Commissioner appealed to the Court of Appeal, which dismissed the appeal on 4 December 2012. There is no appeal against that decision. 10. A few weeks before the hearing in the Court of Appeal, the Commissioner decided that she needed a second string to her bow. On 22 October 2012 she amended her notice of appeal to allege that if the decision of Barma J was affirmed, the assessment should be varied to take into account that the taxpayer’s Facility at the airport had consisted of industrial buildings, plant and machinery for which capital allowances had been claimed and the disposal of which gave rise to balancing charges. 11. In principle, capital expenditure is not deductible for the purposes of computing taxable profits. But the Ordinance recognises that capital assets may be wasting or depreciating and that it would not be fair to compute the taxpayer’s profits without taking into account the fact that, year by year, such assets are declining in value and may eventually have to be replaced. The Ordinance therefore provides under various heads for initial or annual allowances to take depreciation into account. 12. In theory, these allowances should match the actual decline in value of the capital asset. In practice, of course, there seldom is an exact correlation and the taxpayer may sell the asset for more or less than its original cost less the allowances he has received. As Lord Reid explained in Inland Revenue Commissioners v. Wood Brothers (Birkenhead) Ltd [1959] AC 487, 505 in relation to the corresponding U.K. legislation: “If one assumes values in money remaining stable, the amount of the allowances on any item ought to be such that, when the trader comes to sell it, the price which he receives is equal to the price which he paid for it less the aggregate amount of the allowances which he has received in respect of it. If on selling the item he receives more than that amount, then, neglecting the effect of inflation, it could be said that the allowances made to him had been too large, and, as these allowances had been deducted year by year before assessment of his trading profits, he had therefore paid too little in income tax…[I]n the Finance Act 1945…”[b]alancing charges” were introduced to meet the case where the trader had received too large allowances…” 13. The Commissioner says that the taxpayer received the following allowances and is therefore liable for the corresponding balancing charges: (a) Capital expenditure on the provision of a prescribed fixed asset. Section 16G provides for a 100% allowance on certain “prescribed fixed assets” such as computer hardware and software which depreciate rapidly. If they are subsequently sold, subsection 3(a) creates a balancing charge by requiring the proceeds of sale to be treated as income subject to profits tax. (b) Commercial buildings and structures Section 33A provides for an “annual allowance” (4% a year) for wear and tear on the capital expenditure incurred in the construction of a commercial building or structure. By section 35(1), if the building or structure is sold, a balancing charge is made on the excess of the sale moneys over the capital expenditure reduced by the allowances. (c) Plant and machinery For the years of assessment up to and including 1979-80, section 37 provides for an initial allowance on capital expenditure incurred in the provision of machinery or plant and an annual allowance calculated on the reducing value of the asset, that is, the cost less the initial allowance and previous allowances. By section 38, if the plant or machinery is sold for more than the expenditure less the allowances, a balancing charge is made in the amount of the excess. For the tax years 1980-81 and thereafter, there are similar provisions in sections 39B (granting the allowances) and 39D (creating the balancing charge). The difference between the two sets of provisions is that under the older ones, allowances were granted separately on each item of plant or machinery and under the new “pooling” system, they are granted in respect of classes of plant or machinery. The difference is not relevant to anything in this appeal and I shall treat the two regimes as interchangeable. 14. There is no dispute that the taxpayer received these allowances and therefore, in principle, if the termination of the franchise and lease can be regarded as a sale of the buildings and structures, prescribed fixed assets and plant and machinery to the Authority and the consideration for each of those assets exceeded the residual value after allowances, a balancing charge should be added to the taxpayer’s profits for that year of assessment: see section 18F(1). 15. The taxpayer submitted to the Court of Appeal that the Commissioner should not at that stage be allowed to put forward a claim that the taxpayer was liable to be assessed on balancing charges. It was an entirely new basis for assessment. The Court of Appeal, in a judgment delivered by Kwan JA, with which Fok and Lam JJA concurred, rejected this objection. She said that the Court could deal with the case “on the existing materials…without the need for further evidence.” Her view was that the Commissioner’s case failed because, for reasons to which I shall in due course return, the Ordinance excluded a balancing charge in the circumstances in which the franchise and lease had come to an end. 16. The Commissioner appeals against this decision on the merits and I shall have something to say about it later. But the chief question, in my opinion, is whether the Commissioner should have been allowed to raise the question of a balancing charge at the last minute before the hearing in the Court of Appeal. 17. In the case of an appeal transferred from the Board of Review to the Court of First Instance, section 67(7) of the Ordinance provides: “In determining an appeal under this section, the Court of First Instance may – (a) confirm, reduce, increase or annul the assessment determined by the Commissioner; (b) make any assessment which the Commissioner was empowered to make at the time he determined the assessment, or direct the Commissioner to make such an assessment, in which case an assessment shall be made by the Commissioner so as to conform to that direction…” 18. By section 13(4) of the High Court Ordinance Cap 4, the Court of Appeal has all the authority and jurisdiction of the court from which the appeal was brought. Accordingly, the Court of Appeal had the power to make any assessment which the Deputy Commissioner was empowered to make when he determined the assessment on 11 February 2009. 19. For the purposes of deciding whether the Court of Appeal had jurisdiction to grant the order sought by the Commissioner, the question is therefore whether the Commissioner could have done so. 20. The jurisdiction of the Commissioner is conferred by section 64(2) of the Ordinance. By section 64(1), a person aggrieved by an assessment may serve on the Commissioner a notice of objection. Section 64(2) then provides: “On receipt of a valid notice of objection under subsection (1) the Commissioner shall consider the same and within a reasonable time may confirm, reduce, increase or annul the assessment objected to…” 21. The nature of the powers and duties of the Commissioner under section 64(2) of the Ordinance has been settled since the decision in Mok Tsze Fung v Commissioner of Inland Revenue [1962] HKLR 258, in which Mills-Owen J said: “His duty is to review and revise the assessment and this, in my view, requires him to perform an original and administrative, not an appellate and judicial, function, of considering what the proper assessment should be. He acts de novo, putting himself in the place of the assessor, and forms, as it were, a second opinion in substitution for the opinion of the assessor.” 22. These principles were recently reaffirmed by the Court of Final Appeal in Shui On Credit Co Ltd v Commissioner of Inland Revenue (2009) 12 HKCFAR 392. The taxpayer had entered into a complicated scheme of pre-arranged transactions with a view to avoiding tax. It was assessed to profits tax under the anti-avoidance provisions of section 61A of the Ordinance, which requires that the transaction “has, or would have had, but for this section” the effect of conferring a tax benefit on a person. The Commissioner took the view that there was no need to resort to section 61A because, despite the scheme, the sums in question were chargeable to profits tax under the ordinary provisions of sections 16 and 17 of the Ordinance. He therefore made an assessment under those sections. The taxpayer objected that he was not entitled in dealing with an objection to make an assessment upon an entirely different basis. But Lord Walker of Gestingthorpe, citing the Mok Tsze Fung case, said that the Commissioner’s duty was to consider de novo whether, and if so in what amount, the taxpayer should be assessed to profits tax. He was not confined to deciding whether the assessment had been made on the right basis. 23. Likewise in this case, I consider that the question of whether the amount chargeable to profits tax was liable to be increased by a balancing charge was all part of the assessment to profits tax. It did not matter that it was on a wholly different basis from the original assessment of the payment as income. A taxpayer who gives a notice of objection takes his chance on whether the outcome will be to annul, reduce or increase the assessment or the basis upon which the Commissioner will assess him. I therefore agree with the Court of Appeal that there was jurisdiction to make the assessment. 24. However, section 67(7)(b) says that the Court may make any assessment which the Commissioner had power to make and thereby confers a discretion. As Lord Walker of Gestingthorpe emphasised in the Shui On Credit Co case, the Commissioner (and in its turn the Court) is under a duty to act fairly. So the question is whether it was fair for the Court of Appeal to entertain the Commissioner’s submission that the taxpayer should be assessed on the basis of a balancing charge. 25. There are in my view two important questions relevant to the question of fairness. The first is that, by the time the Court of Appeal was invited to make the assessment, the period of limitation for making an additional assessment under section 60(1) had expired. Under that section, an additional assessment must be made within six years of the expiration of the year of assessment. That was 2003-4. An assessment under section 67(7)(b) is not of course an additional assessment within the meaning of section 60(1). The power of the Court is backdated to the date on which the Commissioner made the assessment under appeal. But the effect is to deprive the taxpayer of the protection of the limitation period against what may be in substance an entirely new claim. 26. In Commissioner of Inland Revenue v V H Farnsworth Ltd [1984] NZLR 428 a majority of the New Zealand Court of Appeal decided that a provision in the New Zealand Income Tax Act 1976, which gave the court hearing an appeal a power to make or direct an assessment in terms virtually identical to section 67(7)(b) of the Ordinance, impliedly excluded a power to make an assessment on a different basis from that under objection. That decision was based upon provisions in the New Zealand Act which are not present in the Ordinance and which would have put the taxpayer at a procedural disadvantage. As the courts of Hong Kong have, since the Mok Tsze Fung case, taken the contrary view, the majority decision is less helpful than the dissenting opinion of Cooke J, which proceeded on the assumption that, as in Hong Kong, there was jurisdiction to make an assessment on a different basis. He was however emphatic in saying that it would not be fair to exercise the jurisdiction after the limitation period had expired: “In my opinion, when the taxpayer has made returns and been assessed, and putting aside cases of fraud etcetera, it would not be right to allow the Commissioner to support an increased assessment by taking an entirely new point for the first time after the four years.” 27. I am not sure that I would put the matter quite so dogmatically. I think that there may be cases in which, even after expiry of the limitation period, it would not be unfair to exercise the power to make an assessment on a different basis. But this will largely depend upon the second factor which I suggest should be taken into account, namely whether the new basis will require any further investigation of the facts. The main purpose of the limitation period is, after all, to protect the taxpayer from having to investigate transactions that have receded more than six years into the past. In my view, it is for the Commissioner to satisfy the Court that the taxpayer will not be deprived of this protection. There is possibly an analogy in RHC Ord 20, r.5(5), which permits an amendment to raise a new cause of action after expiry of the limitation period if it is based upon “the same or substantially the same facts” as the original claim. 28. The taxpayer puts forward a number of reasons, both substantive and procedural as to why the assessment should not be made. First, it says most of the relevant assets were not the subjects of a sale. The buildings, structures, plant and machinery were affixed to the land and formed part of the realty in which the taxpayer had only a leasehold interest. On the expiry of that interest, they passed to the Authority by operation of law and not by virtue of a sale. 29. The finding of Barma J, upheld by the Court of Appeal, was that the taxpayer disposed of the assets and undertaking of its business of supplying (through the Operator) aviation fuel at the airport, including its leasehold interest in the Facility, to the Authority for a consideration determined according to the formula in the Franchise Agreement. Because the Authority happened to hold the reversionary interest on the lease, the effect was to bring it to an end and merge it in the reversionary interest. It would also be the case that any chattels that had become part of the realty would pass with the lease. But I do not think that these special facts detract from the fact that there was a disposal of the business including the lease and chattels. I do not think that it is necessary to decide the point, but it would seem to me reasonable to describe this transaction as a sale for the purposes of the Ordinance: compare the definition from Benjamin on Sale cited by Viscount Simonds in Littlewoods Mail Order Stores Ltd v. Inland Revenue Commissioners [1963] AC 135, 152. 30. The taxpayer also says that perhaps it was not entitled to some of the allowances. Only the owner of plant and machinery qualifies for annual allowances under section 39B(2), so that the taxpayer would not have qualified in respect of plant and machinery fixed to the realty. In that case, even if the Commissioner mistakenly gave the allowances, the taxpayer should not be liable for a balancing charge. 31. The Franchise Agreement recited that the Franchisee’s bid had been based upon a Business Plan Specification Brief issued by the (then) Provisional Airport Authority. This had invited the submission of a Financial Plan (Appendix H) which assumed that the bidder would be claiming the allowances. In fact the taxpayer duly claimed and received them. So the argument that they were not entitled to do so is not particularly attractive. However, it is again in my view not necessary to decide the point. 32. The real difficulty for the Commissioner is the question of what part of the purchase price should be attributed to the various assets that have attracted allowances. The Commissioner says that the whole payment should count as consideration for the buildings, plant, machinery and so on. The Accelerated Facility Cost Payment was calculated by reference to the Facility Payments to which the taxpayer would have been entitled during the remainder of the term and those payments had been calculated to allow the taxpayer to recover the cost of its investment in constructing the Facility together with a reasonable rate of return. Therefore the payment was in return for what the taxpayer had spent in the construction of the Facility and that consisted of buildings, plant, machinery etc. 33. I do not accept this submission. It is true that the payment was calculated by reference to what the taxpayer had spent. But that does not mean that he was selling only those assets which had been constructed or acquired for the purposes of the Facility. He was also selling the business: the right to occupy the land on which the Facility was built and the monopoly right to supply aviation fuel and receive Facility Payments for the remainder of the term. If one had to apportion part of the payment to the Facility hardware, one would have to take into account that on any view it had depreciated in value from the time it was installed. That was why the allowances had been granted. The payment, on the other hand, was calculated by reference to what the taxpayer had originally spent. So there is plainly a mismatch between this sum and the part of the Accelerated Payment that can be attributed to the buildings, machinery and plant. 34. I do not think that an apportionment of the payment would be an easy matter. It would require evidence about the value of these items in 2003. The Commissioner accepts that the Court of Appeal had no material upon which it could form a view about their value and asks that he be directed pursuant to section 67(7)(b) to consider the question and make an appropriate assessment. Section 38A of the Ordinance confers upon the Commissioner a power, when assets which qualify for allowances are “sold together or with other assets in pursuance of one bargain”, to “allocate a purchase price to each individual asset”. But in my opinion, it would not be fair to the taxpayer to require it to investigate these matters after the limitation period for a fresh assessment has expired. These are entirely new facts upon which the Commissioner needs to rely in order to sustain the assessment. It would have been possible for the assessor or the Commissioner to have originally made alternative assessments, one treating the whole payment as income and the other claiming a balancing charge: see Commissioner of Inland Revenue v Nina T.H. Wang [1993] 1 HKLR 7; [1994] 1 WLR 1286. But I think it is too late to invoke section 67(7)(b) to achieve the same result at the very last minute. The Court of Appeal should not have entertained the application. 35. For these reasons I would dismiss the appeal. It is therefore unnecessary to decide whether the Court of Appeal was right to say that no balancing charge was payable. The Commissioner, however, has invited the Court to express a view because he considers that the decision of the Court of Appeal was wrong and will disturb the practice of his office. I shall therefore express a view. 36. For this purpose it is necessary to assume that the items on which allowances had been granted did in fact answer to the descriptions in the Ordinance and in particular that the machinery and plant were at all times rightly described as machinery and plant and were not part of the premises of the Facility. This, as I have said, is a contested matter. 37. As I explained earlier, section 37 provides for initial and annual allowances on machinery and plant in the tax years up to and including the tax year 1979-80 and section 39B provides for them in the years 1980-81 and thereafter. As there is no relevant difference between them, I shall discuss the matter by reference to the later system. 38. Section 39B(7) provides: “If a person succeeds to any trade, profession or business which immediately before the succession – (a) was carried on by another person; and (b) the machinery or plant that was used at any time by that other person for the purpose of producing profits chargeable to tax under Part 4 is not sold to the successor, the reducing value of such machinery or plant shall, for the purpose of computing annual allowances under subsection (3), be taken to be the reducing value thereof still unallowed to that other person as at the time of succession.” 39. Ordinarily, if a person buys a business together with its plant and machinery, the price he pays for the plant and machinery will be capital expenditure which he has incurred for the purpose of producing profits and he will receive allowances based upon that price: section 39B(1). The depreciation clock is started running anew. If the whole assets and undertaking have been sold for a single sum, the Commissioner may determine the sum attributable to the plant and machinery under section 38A. 40. Subsection 39B (7) deals with the case in which the plant and machinery has passed to him otherwise than by sale (“the machinery or plant is not sold to the successor”). An example is Commissioner of Inland Revenue v The Hong Kong Bottlers Ltd [1970] HKLR 581, in which the successor was the owner of the whole issued share capital in the company which had been carrying on the business, and received the assets by a distribution in specie. 41. In the case of a succession otherwise than by way of sale, the clock is not started again. The successor’s entitlement to allowances simply takes on where his predecessor left off. He obtains no initial allowance (subsection (8)) and the reducing value for calculating his annual allowances is taken to be “the reducing value thereof still unallowed to that other person as at the time of the succession”. And because, for the purposes of calculating allowances on the assets in question, the change of ownership on succession is treated as having made no difference, there is no balancing charge: section 39D(3). 42. The question for the Court of Appeal was therefore whether this was a succession in which there had been no sale of the plant and machinery to the Authority. But the Court of Appeal appears to have treated the matter as depending simply upon whether the Authority succeeded to the taxpayer’s business: see paragraphs 71 and 72 of the judgment. They cited Bell v National Provincial Bank of England Ltd [1904] 1 KB 149, which decides that a bank which buys the assets and undertaking of another bank and carries on its business as part of its own has succeeded to that business for the purposes of an altogether different provision of the U.K. income tax legislation. I have no difficulty with the proposition that the Authority succeeded to the taxpayer’s business. But the question with which the Court of Appeal should have been concerned was whether this happened without the plant and machinery being sold to the authority. 43. It seems to me that it clearly was. The consideration obtained by the Authority in return for the Accelerated Facility Cost Payment was the whole of the taxpayer’s assets and undertaking at the airport, including the plant and machinery. The price may have had to be apportioned to determine precisely what they were sold for, but in my opinion the Authority did not get them for nothing. The taxpayer submits that as some or all of them were fixtures, they could not be sold to the Authority because, as reversioner on the taxpayer’s lease, it owned them already. Alternatively it says that they did not pass on sale but by operation of law when the lease was terminated. However, as between the Authority, the taxpayer and the Commissioner, they had been treated as owned by the taxpayer and I think that the Commissioner would have been entitled to make an assessment on that basis. Indeed, I doubt whether, if they had been part of the site, they would have qualified as plant and machinery at all. As for the submission that there was a transfer by operation of law, the termination of the lease was just as much a sale of the taxpayer’s residual interest as a surrender would have been. The fact that the price for the surrender had been agreed in advance and that it followed the exercise of an option by the Authority can make no difference to its commercial character. 44. There is the additional point that the Court of Appeal appears to have regarded its opinion on sections 39B(7) and 39D(3) as determinative of all the Commissioner’s claims to balancing charges. But this was a mistake. There is no equivalent in the provisions for prescribed assets or industrial buildings and structures. 45. However, for the reasons given earlier. I would dismiss the appeal. As to costs, I would make an order nisi that the Commissioner pays the costs of the taxpayer, such costs to be taxed if not agreed. Should either party wish to contend for a different order for costs, written submissions should be lodged with the Registrar and exchanged within 14 days of the handing down of this judgment, with liberty on the other party to lodge and exchange written submissions within 14 days thereafter. In the absence of an application to vary, this order as to costs will become absolute at the expiry of the time limited for the lodging of submissions. Chief Justice Ma 46. The appeal is accordingly dismissed. The Court also makes an order nisi as to costs as set out in para 45 above. Mr Michael Furness QC and Mr Stewart K.M. Wong SC, instructed by the Department of Justice, for the Appellant Mr David Goldberg QC and Ms Yvonne Cheng SC, instructed by Baker & McKenzie, for the Respondent
Mr Justice ChanAg CJ: 1. I agree with the judgment of Mr Justice Litton NPJ and the orders proposed by him. I would only add one observation. 2. Many people in Hong Kong sell or purchase real estate by first entering into a provisional agreement. Such an agreement is to all intent and purposes binding on the vendor and purchaser, subject to escape clauses allowing the parties to withdraw from the transaction by forfeiting whatever deposit (or deposits) which has (or have) been paid or by paying double the amount which is equivalent to the deposit (or deposits) paid. The parties may also move on (if so agreed) to the next step by signing a formal agreement and finally to completing the transaction. By way of contrast to the situation in England, this would give the parties both protection and flexibility, subject of course to the other terms of the provisional agreement. It is thus of crucial importance that the provisional agreement is as clear as it should be. However, it is most unfortunate that the one in the present case, which, I understand, is one of the standard form agreements commonly in use, should contain blatant discrepancies between the Chinese and English versions. This is highly unsatisfactory as it will only give rise to confusion and unnecessary litigation. Mr Justice Ribeiro PJ: 3. I agree with the Judgments of Mr Justice Litton NPJ and Lord Millett NPJ. Mr Justice Litton NPJ : Introduction 4. This case concerns, once again, a provisional agreement for the sale and purchase of real estate and in particular with an escape clause in that agreement. Ultimately, it turns upon the peculiar facts of this case. 5. The facts, in brief, are these. By a provisional agreement signed by three parties — the vendor, the purchaser and the real estate agent — dated 31 December 2009, the vendor agreed to sell and the purchaser agreed to buy the ground floor of Block C, Nos. 301, 301A-C Prince Edward Road West, Kowloon, for $18 million upon the terms of that agreement. Completion was due to take place on 26 February 2010. The real estate company was brought in as a party to ensure that commission is paid: There are elaborate provisions for payment of commission to the agent in any event: Irrelevant for the purposes of this case. 6. Clause 2(a) provided for the payment of an initial deposit of $500,000. By clause 2(c) a further deposit of $3.1 million was to be paid “upon signing of the Formal Agreement for Sales and Purchase on or before 13 January 2010.” Clause 2(d) required payment of the balance of $14,400,000 at the vendor’s solicitors’ office upon completion on or before 26 February 2010. 7. Clause 2 goes on to say that the deposits “shall be paid to the vendor’s solicitors as stakeholders who may release the same to the vendor provided that the balance of the purchase price is sufficient to discharge the existing legal charge/mortgage”. 8. The provisional agreement provides “escape clauses” for both parties. 9. Clause 6 says that if the purchaser fails to complete the purchase “in the manner herein contained” all the deposit paid pursuant to clause 2 would be forfeited to the vendor and the vendor would be free to resell the premises, and the vendor shall not then “sue the purchaser for any liabilities and/or damages or to enforce specific performance”. 10. Clause 7, as translated from the Chinese version[1], provides as follows: Should the vendor after receiving the deposit (deposits) paid fail to complete the sale in the manner contained in the agreement, the vendor “apart from refunding the total amount of the deposit paid, (shall) compensate the purchaser by a payment of an equivalent amount”. 11. Shortly after the provisional agreement was signed and the deposit of $500,000 paid, the parties’ solicitors entered into correspondence regarding the formal agreement. 12. On 12 January 2010 the vendor’s solicitors sent to the purchaser’s solicitors a re-engrossed formal agreement in duplicate and asked that it be duly signed by the purchaser and attested, and returned together with the purchaser’s solicitors’ cheque for $3.1 million “drawn in favour of our client being the further deposit payable by your client to ours on or before 5:00pm on 13 January 2010”. 13. As mentioned in para 7 above, the provisional agreement required the deposits to be paid to the vendor’s solicitors as stakeholders. Thus it was that the next day (13 January) the purchaser’s solicitors forwarded the formal agreement duly signed and attested, together with a cheque for $3.1 million drawn in favour of the vendor’s solicitors “as stakeholder being further deposit and part payment of purchase money….”. The letter went on to say: “Please note that the said Agreement for Sale and Purchase and the said cheque are sent to you against your firm’s undertaking to return us one part of the said Agreement duly signed by your client(s) and attested by you for our further handling within three (3) working days from the date of this letter.” 14. Pausing here, it was plainly in the purchaser’s expectation that the vendor would sign the formal agreement which had been engrossed by its own solicitors after correspondence as to its terms with the purchaser’s solicitors. The re-engrossed formal agreement had been forwarded with an express request that it be signed by the purchaser, and returned before 5:00pm on 13 January 2010. The formal agreement provided for a whole range of matters absent from the provisional agreement: For instance, who bore the risk regarding the premises before completion; procedures and time limits for requisitions and objections in respect of title; the receipt of government notices or requirements that might affect the use and enjoyment of the property, etc. These are important matters which go to ensure that, come the day for completion (26 February 2010), the vendor would give good title to the purchaser, and the purchaser would have quiet enjoyment of the property. These are matters of interest to both parties. 15. Hence the addendum in the purchaser’s solicitors’ letter of 13 January quoted in paragraph 13 above. The cheque for $3.1 million was tendered on condition that the vendor would sign the formal agreement and its solicitors would return it to the purchaser’s solicitors within three working days. If this had happened then, of course, the parties’ relationship thereafter would have been governed by the terms of the formal agreement and the provisional agreement would cease to have force. 16. The next day (14 January) the vendor’s solicitors forwarded a draft power of attorney, as provided for by clause 15 of the provisional agreement, to enable the purchaser to enter into a new tenancy on the vendor’s behalf, prior to completion. (The sale under the provisional agreement was subject to an existing tenancy). The draft power of attorney, slightly amended, was returned to the vendor’s solicitors the following day. In the meanwhile, the cheque for $3.1 million in the vendor’s solicitors’ hands was cashed. Plainly, at that stage, the vendor evinced every intention of carrying the transaction to its completion in accordance with the provisional agreement. 17. The vendor did not comply with the condition under which the cheque for $3.1 million was tendered. No formal agreement bearing the attested signature of the vendor was returned. There was further correspondence resulting in a letter from the vendor’s solicitors dated 28 January 2010 to the effect that they had been instructed (1) to return the formal agreement unsigned by the vendor and (2) to forward their cheque for $3.1 million being the refund of the further deposit. This led to more correspondence, after the purchaser’s solicitors had rejected the tender of the refund cheque for $3.1 million, insisting upon performance by the vendor and asking for the title deeds for perusal. 18. Eventually, on 10 February 2010, the vendor’s solicitors wrote to say that the vendor was relying on clause 7 of the provisional agreement (see para 10 above), enclosing (1) a cheque for $3.1 million and (2) a cheque for 1 million “being the refund of initial deposit and liquidated damages payable by our client to your client as per clause 7 of the Provisional Agreement”. The Proceedings 19. The purchaser brought proceedings in the High Court seeking an order for specific performance. These proceedings were heard by Mr Recorder A Chow, SC who, by his judgment of 23 December 2010, granted the purchaser’s claim. In essence his conclusion was as follows: (1) As a matter of fact (§§24 and 28 of the Recorder’s judgment) the further deposit of $3.1 million was paid to and accepted by the vendor. (2) For the vendor to rely on the escape clause (clause 7) it had to compensate the purchaser by an amount equivalent to the “total amount of the deposit paid”. This meant an amount equivalent to the initial deposit ($500,000) and a further $3.1 million. The tender of the cheques referred to in para 18 above was deficient. Simply to return the further deposit was not enough to satisfy the requirement in clause 7. 20. The recorder noted (§30) that counsel for the purchaser had conceded that the escape clause was exercisable at any time up to the date of completion (26 February 2010); he did not therefore need to consider whether the option to terminate had by implication expired on 13 January 2010 when, if the formal agreement had been signed by both parties, clause 7 and all the other clauses in the provisional agreement would have been extinguished and subsumed. 21. The vendor appealed to the Court of Appeal. By a majority (Tang VP, Kwan JA, Yuen JA dissenting), the vendor’s appeal succeeded and the order for specific performance as made by the Recorder was discharged. In essence, the reasoning of the majority was this: The escape clause (clause 7) was exercisable by the vendor at all times until the parties signed the formal agreement; if the purchaser had paid the further deposit, the formal agreement not having been signed, the vendor would have been obliged to compensate the purchaser by a like amount in order to resile from the agreement; but, in the circumstances of this case, the further deposit had not been paid; hence the tender of the cheque by the vendor’s solicitors referred to in para 18 above satisfied the requirements of clause 7; the vendor was discharged from further performance of the contract. Was the further deposit paid in terms of clause 7? 22. Ms Audrey Eu SC, counsel for the vendor, says this: The two events as provided for by the provisional agreement, the payment of the further deposit and the signing of the formal agreement by both parties, were “linked”; the payment of the further deposit was conditional upon the vendor signing the formal agreement (the purchaser having already signed); this condition was never fulfilled, therefore the further deposit could not be regarded as having been paid. 23. Is this right? The crucial question in this case is not whether, as a matter of legal analysis, the two events provided for in the provisional agreement were “linked”, but whether the trial judge was correct in finding, as a matter of fact, that the further deposit was paid to and accepted by the vendor (see para. 19(1) above). If it was, then the vendor could only escape from performance if it paid the amount of the further deposit (and the initial deposit) in compensation in terms of clause 7. This turns upon what the solicitors did on their respective clients’ behalf on 13 January and the days thereafter. 24. Here, from inception, the parties envisaged the involvement of solicitors. Clause 5 of the provisional agreement so provided. In conveyancing in Hong Kong, solicitors are needed to ensure that good title is shown before completion and good title passes on conveyance. The parties were not engaged in hostile proceedings. The solicitors were there to help them carry out their bargain. The system operates upon trust. The words used by the purchaser’s solicitors when delivering the signed agreement and the cheque over to the vendor’s solicitors, as quoted in para 13 above, are more or less in standard form[2]. What they were saying to the other side, in effect, was this: “Three working days provide ample time for you to get your client’s signature on the agreement and have it returned to us; you will, of course, not cash the cheque unless you can do this.” 25. When the vendor’s solicitors cashed the cheque the next day, they were representing in effect that they were in a position to fulfill the condition; that is to say, to return the signed agreement to the purchaser’s solicitors within the three working days referred to in the letter of 13 January. Good faith between solicitors mandated the vendor’s solicitors to return the cheque, or at any rate retain it unpresented for payment, if they were unable to comply with the condition. They were throughout the vendor’s agents. They received the cheque not only as stakeholder but also as the vendor’s agents. At the point when the cheque was cleared and credited to the solicitors’ account, the further deposit was received and paid within the meaning of clauses 2(c) and 7 of the provisional agreement. 26. It must equally be assumed that the vendor’s solicitors were acting on instructions when, on the next day, they forwarded the draft power of attorney to the purchaser’s solicitors. The fact that at some point of time thereafter the vendor decided not to sign the formal agreement is neither here nor there. There could not have been the least doubt as to what the purchaser’s solicitors did: Their letter of 13 January said clearly that the cheque for $3.1 million drawn in the vendor’s solicitors’ favour (as required by the provisional agreement) was “further deposit and part payment of purchase money”, treating those solicitors as stakeholder and as agent for the vendor, which they plainly were. This disposes of a point made by Ms Eu SC to this effect: The provisional agreement says nothing about the solicitors acting as the vendor’s agent; clause 2 specifically says that the further deposit was to be paid to them “as stakeholders”; the solicitors received the cheque and put the money in their “stakeholder’s account”; they held the money in that capacity; hence, it was never received by the vendors. Mr Edward Chan SC, counsel for the purchaser, counters the argument thus: The only way whereby the further deposit could have been paid was to pay it to the solicitors as stakeholders; that is what clause 2 says; the payment went towards the purchase price; it follows that the payment was received by the vendor through its agents the solicitors. This is plainly correct. 27. No court could have compelled the vendor to put pen to paper. What happened was that, having received the further deposit, they put their own solicitors in the embarrassing position of having to tell the purchaser’s solicitors that the condition in the letter of 13 January could not, after all, be fulfilled: The solicitors did this, without apology, on 28 January: see para 17 above. But this could not alter what had already occurred. The further deposit had been, in the words of the Recorder, “paid to and accepted by the defendant” (§28). The Undertaking 28. It is here that I must respectfully differ from the majority of the Court of Appeal. Tang VP said (§52) that the question was whether “the payment was conditional”. Ms Eu, SC, counsel for the vendor, formulated the question in the same way. That, with respect, does not fully encompass the facts of this case. The letter of 13 January referred to an undertaking to be given, or deemed to be given by the vendor’s solicitors. What undertaking could those solicitors sensibly have given? What undertaking could the purchaser’s solicitors have rationally been seeking? It could not have been to get the vendor to put pen to paper. If a court cannot so compel, how could a solicitor have done the same? As the cheque was made payable to the vendors’ solicitors, the only undertaking those solicitors could have given was this: To cash the cheque only if they could, within three working days, return the signed agreement to the purchaser’s solicitors. It is only in this sense that the “payment was conditional”. The cheque was tendered conditionally to the vendor’s solicitors upon the understanding that they would not cash it unless they were able to return the signed agreement to the purchaser’s solicitors within three working days. This was the only undertaking they could have given. Conclusion 29. It follows from what is said above that the appeal must be allowed and the judgment of the Recorder restored. The further deposit was paid. The vendor never compensated the purchaser by tendering sums equivalent to all the deposits paid as required by clause 7 of the provisional agreement. 30. Before concluding this judgment I would make this observation: The formal agreement is an important document for the reasons outlined in para 14 above, particularly for the purchaser who would wish to ensure that there is no blemish on the vendor’s title. It is also important for the vendor as it is the “trigger point” for him to receive a substantial further deposit. 31. This case turns on its own facts. It would be a rare case that a further deposit, to be paid upon the signing of the formal agreement, is found to have been paid without that document having been signed. Once the formal agreement is signed by both parties then of course the provisional agreement is, in the words of Godfrey J in Man Sun Finance v Lee Ming Ching Stephen [1993] 1 HKC 113 at 125D, superseded. It entirely falls away. The escape clauses would no longer be operable. 32. Yuen JA in her dissenting judgment seems to have adopted this approach: The payment of the further deposit was upon terms that the vendor would sign the formal agreement; the vendor accepted the payment; he was bound to sign the formal agreement; the provisional agreement with the escape clause would then have been superseded; the vendor cannot profit from his own default by treating the escape clause in the provisional agreement as if still valid; equity would intervene and compel the vendor to sell the property (§61.2, 65.3, 66, 72.3). 33. This smacks of the maxim in equity: Equity treats as done which ought to be done. The specific performance which the learned Justice of Appeal would have ordered would then have been performance under the formal agreement, not the provisional agreement as ordered by the Recorder. The point, superficially attractive, was not pursued by Mr Chan SC. I say no more about it. Order 34. The date for completion (26 February 2010) has long gone. I would order: (1) that the provisional agreement should be specifically performed and carried into execution to the extent that the purchase price is $18 million; (2) that within 14 days of the handing down of this judgment the appellant lodges with the Registrar an agreed form of the order for specific performance; (3) that in default of agreement each party be at liberty to lodge with the Registrar its form of order, within 28 days of the handing down of this judgment, for this Court to determine without further hearing the appropriate form of order. 35. As to costs, I would make an order nisi (1) that the Recorder’s order for costs be restored; (2) that the appellant be awarded costs in the Court of Appeal and in this Court. (3) If any party seeks a different order, written submissions be served on the other party and lodged in Court within 14 days of the handing down of this judgment, with liberty to lodge and serve further written submissions within 14 days thereafter. Mr Justice Bokhary NPJ: 36. Doing so within the terms agreed and not by recasting them, the courts strive to uphold the substance and reality of the bargain between contracting parties. The bargain between the parties to this contract for the sale of land was one whereby the parties had, not unusually, matching opportunities to back out before a formal agreement for sale and purchase was entered into. For the vendor, the price of backing out was the return of what had been paid by way of deposit plus a sum equal thereto. And for the purchaser, that price was the forfeiture of what has been paid by way of deposit. In this connection, the Chinese version of the provisional agreement for sale and purchase is apt to cover everything paid by way of deposit. And it is provided that in the event of any conflict between the English and Chinese versions, the Chinese version shall prevail. 37. It is obvious that the parties’ opportunities to back out were meant to match. They would not match if the vendor, having called upon the purchaser to sign the formal agreement for sale and purchase and provide a further deposit, could, after the purchaser has done so, back out merely by returning the initial deposit, paying a sum equivalent thereto and returning the further deposit but not paying a sum equivalent thereto. That is because once the purchaser had signed the formal agreement for sale and purchase and paid the further deposit, it was exposed to forfeiture of the further deposit as well as the initial deposit if it were to back out. 38. Despite the ability with which Ms Audrey Eu SC for the vendor argued to the contrary, I am of the view that the vendor’s solicitors must sensibly be taken to have received the further deposit for their client and not merely as stakeholder for both parties. 39. The vendor could have backed out by returning the initial deposit, paying a sum equivalent thereto, returning the further deposit and paying a sum equivalent thereto. It was not entitled to back out merely by returning the initial deposit, paying a sum equivalent thereto and returning the further deposit but not paying a sum equivalent thereto. That is what it purported to do. Its refusal to complete exposed it to an order for specific performance under the provisional agreement for sale and purchase. The order for specific performance made at first instance should not have been set aside on intermediate appeal. 40. I agree with Mr Justice Chan PJ and Mr Justice Litton NPJ, and would allow this appeal so as to order specific performance by way of a formal order in terms either agreed by the parties or, failing such agreement, fixed by the Court after considering written submissions. There should, I agree, be an order nisi awarding the purchaser costs here and in the courts below. Lord Millett NPJ: 41. The vendor's solicitor normally has no authority to commit his client to a binding contract for the sale of land, and there is no evidence that he had such authority in the present case. But he had authority to accept a deposit from the purchaser. When he received the letter of 13th January 2010 (which he received in his capacity as solicitor for the vendor for at that stage he had no other) he had a choice. He could accept the payment or refuse it. He could refuse it by returning the cheque or keeping it and not cashing it; or he could refuse it by cashing it and informing the purchaser's solicitor that he was holding the money to his order pending his own client's decision whether or not to sign the formal contract. 42. Alternatively he could accept the money on behalf of his client by simply cashing the cheque. This would not commit his client to sign a formal contract, for he had no power to do this; but the money was paid as a deposit and if he accepted it at all he was bound to accept as such, thereby increasing the penalty payable by his client should he choose to resile from the provisional contract. What he could not do was accept money which had been paid as a deposit and treat it as something else. 43. I too would allow the appeal. Mr Justice Chan Ag CJ: 44. The appeal is allowed unanimously and the Court makes the orders set out in paras 34 and 35 above. Mr Edward Chan, SC & Mr Allen Lam, instructed by Edward Ko & Company, for the Appellant Ms Audrey Eu, SC & Mr Jenkin Suen, instructed by Tai, Tang & Chong, for the Respondent [1] The parties had agreed – by clause 14 – that in case of ambiguity the Chinese version should prevail. [2] See for instance Man Sun Finance (International) Corp v Lee Ming Ching Stephen [1993] 1 HKC 113 at 116G
Chief Justice Ma: 1. I agree with the judgment of Lord Reed NPJ and with the orders contained therein. Mr Justice Tang PJ: 2. I agree with the judgment of Lord Reed NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Lord Reed NPJ. Mr Justice Chan NPJ: 4. I agree with the judgment of Lord Reed NPJ. Lord Reed NPJ: 5. This appeal is concerned with the concept of malice, as it is understood in the law of defamation in the context of qualified privilege. 6. It is unnecessary to consider the facts of the case in detail, but some account of the background is necessary in order to explain the context in which the issues arise. The first and second plaintiffs were at the material time in their final year as pupils at a school in Hong Kong. The third plaintiff, who is their father, was a member of the school’s board of governors. The defendants were the parents of another pupil in her final year at the school. In late November 2011, rumours were circulating among pupils at the school and their parents to the effect that the first and second plaintiffs were suspected of having cheated in a school test earlier that month, and in the case of the first plaintiff in another school test the previous month, but had got away with it because their father was a member of the board of governors. The rumours gave rise to emails and conversations during early December 2011 between a number of parents of children at the school, including the defendants, and between the parents and the school management. Meetings also took place between a number of parents and the school management, including a meeting attended by the defendants and an interview of some pupils in the presence of their parents. In the end, the school management decided that there was no basis for taking any disciplinary action against the first and second plaintiffs. Some parents, including the defendants, were dissatisfied with the school’s decision and with how it handled the matter. 7. The plaintiffs then commenced the present proceedings, suing the defendants for defamation arising from their publication of five emails and a summary prepared for one of the meetings, on the basis that these communications were to be understood as meaning that the first and second plaintiffs had repeatedly cheated in school examinations, and that their father had dishonestly and improperly intervened to cover up the cheating by abusing his position as a member of the board of governors. The defendants admitted that they were the publishers of the emails and the summary, but denied that they were defamatory. Alternatively, they relied on the defence of qualified privilege. In reply, the plaintiffs pleaded malice. 8. Following an 18-day trial before To J and a jury, verdicts were returned finding that all six communications were defamatory and that four of the six had been published maliciously: that is to say, (1) an email sent by the second defendant to the head of secondary at the school, and copied to the chair of the school’s parent-teacher association, on 4 December 2011, (2) an email sent by the second defendant to another parent on 6 December 2011, (3) the summary prepared by the second defendant for a meeting between parents and members of the school management on 8 December 2011, and (4) an email sent by the second defendant to the school principal, and copied to a number of other parents, on 16 December 2011. The jury awarded damages totalling $230,000. 9. In relation to the two communications which they found not to have been published maliciously, the jury also returned special verdicts on questions of fact set out in a questionnaire. Some of the special verdicts were concerned specifically with the two communications in question, or with the second defendant’s state of mind at the time when she sent them, but they also included findings (1) that a named pupil had observed what she described as suspicious behaviour on the part of the first plaintiff during the test in October 2011, (2) that four named pupils had observed certain suspicious behaviour of the first and second plaintiffs at the test in November 2011 as described by three of them in the taped transcript of a meeting, (3) that as of 29 November 2011 there were a lot of rumours circulating amongst the students of the school that the first plaintiff was suspected of having cheated in a test but he got away with it because his father was a member of the board of governors of the school, and (4) that such rumours also reached many parents, including the second defendant and four other named parents. 10. The Judge then decided, on the basis of written submissions, whether the two communications found not to have been published maliciously were published on privileged occasions. He concluded that they were. The issue of qualified privilege was thus decided after the jury had already returned verdicts on the issue of malice. It will be necessary to return to that aspect of the procedure. The judge also made an order in relation to the costs of the trial, ordering that the defendants should pay 60% of the plaintiffs’ costs, other than the costs of the submissions on qualified privilege, and that the plaintiffs should pay the defendants’ costs in relation to that issue. 11. Both parties appealed. The plaintiffs sought to set aside the Judge’s decision on qualified privilege, and his order as to costs. That appeal, CACV 251/2015, dealt only with the two communications which were found not to have been published maliciously. The defendants appealed against the jury’s verdicts that the four communications mentioned in para 8 above had been published maliciously. That was appeal CACV 252/2015. Dismissing the plaintiffs’ appeal, the Court of Appeal (Lam VP, Kwan and Poon JJA) upheld the Judge’s decision on qualified privilege. Allowing the defendants’ appeal, it held that the Judge had misdirected the jury on the issue of malice, and that the verdicts on that issue must be set aside. It further held that the four communications in question had been published on occasions of qualified privilege, and that there was no evidence on which a properly directed jury could make a finding of malice. In these circumstances, rather than remitting the case for retrial, it ordered that the plaintiffs’ claims should be dismissed. The plaintiffs sought leave to appeal to this court only in respect of the outcome of appeal CACV 252/2015. There was no appeal against the outcome of appeal CACV 251/2015. 12. The plaintiffs were granted leave to appeal to this Court on two questions: (1) What is the proper legal approach to the issue of malice to defeat a defence of qualified privilege, with particular emphasis on the treatment of the mental state or belief on the part of the party who has allegedly made the defamatory statement? (2) In the event that the Court of Appeal was right to hold that the summing up in the Court of First Instance was in error, should a retrial have been ordered? Qualified privilege 13. The logical starting point in considering malice is the concept of qualified privilege. Privilege is a defence to an action in defamation. In its application to defamatory statements of fact (it is unnecessary in this appeal to consider its application to fair comment on matters of public interest), it attaches to occasions when the law recognises a need for frank and uninhibited communication which outweighs the need to protect reputation. Sometimes the need for uninhibited expression is of such a high order that the occasion attracts absolute privilege: that is to say, the defence to an action in defamation admits of no exceptions or qualifications. More usually, the privilege is qualified, in that it can be defeated if the plaintiff proves that the defendant was actuated by malice. 14. Many common situations are privileged. There is no closed list of categories. The underlying principle was explained by Lord Atkinson in Adam v Ward [1917] AC 309, 334: “… a privileged occasion is, in reference to qualified privilege, an occasion where the person who makes the communication has an interest or a duty, legal, social, or moral, to make it to the person to whom it is made, and the person to whom it is made has a corresponding interest or duty to receive it.” Occasions of this kind have traditionally been described in terms of persons having a duty to perform or an interest to protect in making the communication in question. In determining whether, applying that principle, an occasion is privileged, the court has regard to all the circumstances. As Lord Nicholls of Birkenhead observed in Reynolds v Times Newspapers Ltd [2001] 2 AC 127, 195, the circumstances must be viewed with today’s eyes: “the circumstances in which the public interest requires a communication to be protected in the absence of malice depend upon current social conditions”. Malice 15. As has often been remarked, “malice”, otherwise known as “express malice” or “malice in fact” (to distinguish it from “malice in law”, regarded as implicit in the intentional publication of a defamatory statement without lawful excuse), is an unfortunate expression. It is an ordinary word, but is used in the law of defamation as a term of art, with a technical meaning which is different from that which it bears in ordinary usage. Indeed, it has different technical meanings depending on which facet of the law of defamation one is dealing with. It is, for those reasons, an expression which it is preferable to avoid using before juries, as it is liable to lead to confusion. 16. Its meaning in the context of qualified privilege is straightforward. It was succinctly explained by Lord Nicholls of Birkenhead NPJ (with whose judgment the other members of the Court agreed) in Cheng & Another v Tse Wai Chun (2000) 3 HKCFAR 339, 355: “Express malice is to be equated with use of a privileged occasion for some purpose other than that for which the privilege is accorded by the law.” That is consistent with Lord Diplock’s analysis in Horrocks v Lowe [1975] AC 135, 149, described in Reynolds at p 194 as “the classic exposition of malice in this context”: “For in all cases of qualified privilege there is some special reason of public policy why the law accords immunity from suit – the existence of some public or private duty, whether legal or moral, on the part of the maker of the defamatory statement which justifies his communicating it or of some interest of his own which he is entitled to protect by doing so. If he uses the occasion for some other reason he loses the protection of the privilege.” That has been the approach of the law for well over a century. In Clark v Molyneux (1877) 3 QBD 237, Brett LJ stated at p 246: “If the occasion is privileged it is so for some reason, and the defendant is only entitled to the protection of the privilege if he uses the occasion for that reason.” Similarly, in Royal Aquarium and Summer and Winter Garden Society Ltd v Parkinson [1892] 1 QB 431, 454, Lopes LJ stated: “The defendant is only entitled to the protection of the privilege if he uses the occasion in accordance with the purpose for which the occasion arose.” 17. In order to decide whether a communication was published maliciously, for the purpose of rebutting a defence of qualified privilege, it is therefore necessary to decide two questions, which arise sequentially. First, was the occasion privileged, and if so, for what purpose? Secondly, was that the defendant’s purpose when he published the communication in question? The first of these is a question of law for the judge. The second is a question of fact, to be determined by the jury, where the action is tried with a jury. It is important to keep these basic principles clearly in view. Much confusion can be generated if they are lost sight of. 18. The motive with which the defendant made the communication in question is therefore of crucial importance: see Horrocks v Lowe at p 149. A person may have more than one reason, motive, or purpose (the terms can in this context be used interchangeably) for making a communication. The critical question is whether the dominant purpose for which he made the communication was one other than the purpose for which the occasion was privileged. As Lord Diplock stated in Horrocks v Lowe at p 149, “he is entitled to be protected by the privilege unless some other dominant and improper motive on his part is proved”. In practice, as Lord Diplock also said at p 149, the plaintiff generally sets out to prove that a desire to injure him was the defendant’s dominant motive. But Lord Diplock went on to explain that “qualified privilege would be illusory, and the public interest that it is meant to serve defeated, if the protection which it affords were lost merely because a person, although acting in compliance with a duty or in protection of a legitimate interest, disliked the person whom he defamed or was indignant at what he believed to be that person’s conduct and welcomed the opportunity of exposing it” (p 151). Accordingly, in a case where a person has published what he believes to be true, “it is only where his desire to comply with the relevant duty or to protect the relevant interest plays no significant part in his motives … that ‘express malice’ can properly be found” (ibid). 19. How, then, is the jury to go about deciding what was the defendant’s dominant purpose in publishing the communication complained of? As Lord Diplock stated in Horrocks v Lowe at p 149, “the motive with which a person published defamatory matter can only be inferred from what he did or said or knew”. The jury therefore have to consider all the evidence from which such an inference might be drawn, and decide what inference as to the defendant’s dominant purpose should properly be drawn from it. Such evidence will include, crucially, the circumstances surrounding the making of the relevant communication. As Jordan CJ said in Mowlds v Fergusson (1939) 40 SR (NSW) 311, 319: “In order to make a proper approach to the question whether there was any evidence that the defendant was animated by ‘express malice’ in making his first report, it is necessary to have a correct understanding of the circumstances in which the report came to be made, and the purposes for which it was asked and presented.” 20. Issues concerning the defendant’s state of mind in relation to the truth or falsity of what is communicated have sometimes caused particular difficulty in practice. In relation to such issues, it is important in the first place to understand that evidence bearing on the defendant’s knowledge or belief as to the truth or falsity of what is communicated is only relevant in so far as it affects the jury’s answer to the critical question which it has to decide, namely whether the defendant used the occasion for a purpose other than that for which the privilege was accorded. 21. It is also necessary to understand that a particular conclusion on malice does not automatically follow in every case from the jury’s view of the defendant’s knowledge or belief as to the truth or falsity of what is communicated. Even a defendant who knows or believes that the matter communicated is false will nevertheless be protected by privilege in circumstances where the purpose for which the privilege exists is consistent with the communication of a matter which is known or believed to be false, and the matter is communicated for that purpose. As Lord Diplock noted in Horrocks v Lowe at p 150, even telling deliberate and injurious falsehoods can be justified in cases where a person may be under a duty to pass on, without endorsing, defamatory reports made by some other person. Equally, a defendant who believes that the matter is true will not be protected by privilege if he communicates it for a purpose other than that for which the privilege was accorded. The critical question for the jury is always whether the dominant purpose for which the communication was made was the same as the purpose for which the privilege was accorded. The defendant’s knowledge or belief as to the truth or falsity of the matter communicated is significant only in so far as it is evidence from which an inference can be drawn as to the answer to that question. As stated earlier, it is important to consider all the evidence surrounding the making of the statement in question. 22. Where the purpose for which the privilege is accorded is consistent only with the communication of a matter which is believed to be true, as is usually but not invariably the case, the defendant’s knowledge that the matter was false at the time when he communicated it, or his recklessness as to whether it was true or false, will generally be conclusive evidence that he did not make the communication for a proper purpose: normally, that is the only inference which can reasonably be drawn. “Recklessness”, in this context, is to be understood in the sense described by Lord Diplock in Horrocks v Lowe: that is to say, “without considering or caring whether it be true or not” (p 150; see also pp 151, 152 and 153). It will be necessary to return to the meaning of recklessness when considering the Judge’s directions and the way in which the Court of Appeal resolved the defendants’ appeal. 23. Whether the defendant was reckless, in that sense, is again a matter of inference from the circumstances. The relevant circumstances can include not only what the defendant said or did, but also what he did not do. This point was made by Gleeson CJ in the Australian case of Roberts v Bass [2002] HCA 57; (2002) 212 CLR 1, para 15: “It may be, for example, that if a person publishes an allegation of serious impropriety or unfitness about another, in circumstances where community standards would recognise a moral obligation to make an attempt to ascertain the truth beforehand, and the person has no idea whether the allegation is true or false, it is open to conclude that the person is recklessly indifferent to the truth or falsity of the allegation, within the meaning of what was said in Horrocks v Lowe. That is a question of fact.” 24. In cases where the purpose for which the privilege is accorded is consistent only with the communication of a matter which is believed to be true, the parties may therefore focus on the question whether the defendant knew of the matter’s falsity, or did not care whether it was true or false. The judge may find it helpful to do likewise when explaining to the jury how the general test of malice set out above falls to be applied in the circumstances of the case before them. It should however be borne in mind that knowledge of falsity, or indifference as to truth or falsity, is not itself the test of malice: it is merely evidence from which an improper motive can often, but not always, be inferred. 25. There should not normally be any need to direct the jury about subtler distinctions between different states of mind. As Lord Nicholls NPJ commented in Cheng at p 354, “the law of defamation is, in all conscience, sufficiently complex, even tortuous, without introducing further subtle distinctions which will be hard to explain to a jury”. Neither the judge nor the jury should lose sight of the critical question: was the dominant purpose which actuated the defendant to make the communication in question one for which the privilege was accorded? 26. It is important to bear in mind that, since the critical issue in relation to malice is the defendant’s motive in making the communication in question, and “the motive with which a person made a defamatory communication can only be ascertained from an examination of the state of his mind” (Fraser v Mirza 1993 SC (HL) 27, 33), the communication has to be understood in this context as the defendant meant it to be understood. In particular, if he intended the communication to bear a particular meaning which was not defamatory of the plaintiff, then his purpose in making it cannot be assessed on the basis that he intended it to bear a different, defamatory meaning, even if the latter is the meaning which the jury consider that, objectively, the communication bore. In short, malice is “a subjective test, entirely dependent on the defendant’s state of mind and intention” (Loveless v Earl [1999] EMLR 530, 538). 27. A number of other matters were emphasised by Lord Diplock in Horrocks v Lowe which may be relevant in particular cases, depending on the circumstances. First, where the plaintiff’s case is put on recklessness, “indifference to the truth of what he [the defendant] publishes is not to be equated with carelessness, impulsiveness or irrationality in arriving at a positive belief that it is true” (p 150). Even those who act carelessly, impulsively or irrationally are afforded immunity from suit “if they have acted in good faith in compliance with a legal or moral duty or in protection of a legitimate interest” (ibid). As Lord Diplock stated, apart from cases where the purpose of the privilege is consistent with the reporting of allegations which are not believed to be true, what is required on the part of the defamer is “positive belief in the truth of what he published or, as it is generally though tautologously termed, ‘honest belief’” (ibid). 28. Lord Diplock went on to explain: “In ordinary life it is rare indeed for people to form their beliefs by a process of logical deduction from facts ascertained by a rigorous search for all available evidence and a judicious assessment of its probative value. In greater or in less degree according to their temperaments, their training, their intelligence, they are swayed by prejudice, rely on intuition instead of reasoning, leap to conclusions on inadequate evidence and fail to recognise the cogency of material which might cast doubt on the validity of the conclusions they reach. But despite the imperfection of the mental process by which the belief is arrived at it may still be ‘honest’, that is, a positive belief that the conclusions they have reached are true. The law demands no more.” (ibid) This important point was emphasised repeatedly in Lord Diplock’s speech. At page 152, for example, he explained that prejudice, however gross and unreasoning it may be, does not destroy the privilege unless it has had the result of rendering the defendant indifferent to the truth or falsity of what was stated: “If what it does is to cause the defendant honestly to believe what a more rational or impartial person would reject or doubt he does not thereby lose the protection of the privilege.” 29. Secondly, “judges and juries should … be very slow to draw the inference that a defendant was so far actuated by improper motives as to deprive him of the protection of the privilege unless they are satisfied that he did not believe that what he said or wrote was true or that he was indifferent to its truth or falsity” (p 150). Furthermore, “juries should be instructed and judges should remind themselves that this burden of affirmative proof is not one that is lightly satisfied” (p 151). 30. Thirdly, Lord Diplock explained that where the communication includes defamatory material going beyond what was necessary for the purpose for which the privilege was accorded, that material should not be treated as ipso facto falling outside the scope of the protection. Rather, the question remains whether the defendant misused the privileged occasion for an improper purpose. The answer to that question depends on the defendant’s state of mind, not on the objective relevance of the material: “As Lord Dunedin pointed out in Adam v Ward [1917] AC 309, 326-327 the proper rule as respects irrelevant defamatory matter incorporated in a statement made on a privileged occasion is to treat it as one of the factors to be taken into consideration in deciding whether, in all the circumstances, an inference that the defendant was actuated by express malice can properly be drawn. As regards irrelevant matter the test is not whether it is logically relevant but whether, in all the circumstances, it can be inferred that the defendant either did not believe it to be true or, though believing it to be true, realised that it had nothing to do with the particular duty or interest on which the privilege was based, but nevertheless seized the opportunity to drag in irrelevant defamatory matter to vent his personal spite, or for some other improper motive. Here, too, judges and juries should be slow to draw this inference.” (p 151) The procedure which should be followed 31. As has been explained, in order to determine whether a communication was published maliciously, for the purpose of rebutting a defence of qualified privilege, it is necessary to decide, first, whether the occasion on which the communication took place was privileged, and if so, for what purpose, and secondly, whether that was the defendant’s purpose when he published the communication in question. The first of these is a question of law, to be decided by the judge, and the second is a question of fact, to be decided by the jury, in a case which is tried with a jury. 32. It follows that the question whether the occasion was privileged, and if so, the identification of the purpose for which the privilege was accorded, must be decided by the judge before a jury can be asked to decide the issue of malice. As Lord Dunedin said in Minter v Priest [1930] AC 558, 572: “Now, whether an occasion is privileged or not is for the judge to decide, and not for the jury, and the question of express malice, as it has been called, which destroys the privilege, if it is qualified privilege, ought only to be put to the jury after the judge has ruled whether the occasion is privileged or not.” 33. Where the facts on which the existence of qualified privilege depends are not in dispute, it can be tried as a preliminary issue. It was said in Loutchansky v Times Newspapers Ltd (No 2) [2001] EWCA Civ 1805; [2002] QB 783, para 41, in the context of fair comment, that qualified privilege “ordinarily falls to be judged as a preliminary issue”. That should however be understood in the light of the observations subsequently made in a similar case, Macintyre v Chief Constable of Kent [2002] EWCA Civ 1087; [2003] EMLR 9, paras 35-36: “… a judge may generally decide it wise to direct a preliminary issue on qualified privilege in such a case, on the basis that an appeal is not particularly likely and a decision in favour of the defendants would avert a long trial on justification. But the judge must also bear in mind that the claimant has brought the case to vindicate his reputation, and it may well be unfair to delay the ultimate trial while a preliminary issue is fought over, perhaps all the way to the House of Lords.” 34. The judge’s decision whether the occasion was privileged may, however, depend on controversial questions of fact. Where that is the position, the relevant facts must be found by the jury: Reynolds at p 205. As Lord Bingham of Cornhill CJ, delivering the judgment of the Court of Appeal, stated in Reynolds at p 178: “It is well settled that the question whether the occasion of publication is protected by qualified privilege is a question of law to be decided by the judge, but before he can reach that decision it may be necessary for the jury to make findings on any issues of fact in dispute upon which the answer to the question depends.” That approach, which reflected the law as stated by Lord Esher MR in Hebditch v MacIlwaine [1894] 2 QB 54, 58, Lord Finlay LC in Adam v Ward [1917] AC 309, 318, and Lord Dunedin in Minter v Priest at p 572, was endorsed in the House of Lords: see, in particular, the speech of Lord Nicholls, with whom Lord Cooke of Thorndon and Lord Hobhouse of Woodborough agreed, at p 205, Lord Steyn at pp 215-216, and Lord Hope of Craighead at p 236. As Lord Nicholls stated, “any disputes of primary fact will be a matter for the jury” (ibid). Primary facts, in this context, comprise the events which occurred, and what was said and done, as distinct from the inferences or conclusions to be drawn from those primary facts. 35. It follows that, where the judge’s ruling on the question whether the occasion was privileged is dependent on the resolution of disputed questions of fact, those questions should be put to the jury so that it can return special verdicts. Such questions should however be kept by the judge to the minimum necessary, and should be as clearly expressed as possible. What has been described as “an examination paper” (Loutchansky v Times Newspapers Ltd (No 4) [2001] EMLR 38, para 35) may complicate matters unnecessarily for the jury, and may result in confused and inconsistent answers. 36. This was a danger in the present case, where the jury were presented with an 11-page questionnaire, agreed between the parties, covering not only the facts relevant to the question whether the occasions were privileged, but also, where the jury found that the communication was not published maliciously, facts relevant to the purposes for which the defendants used those occasions. The result was that findings might be made which rendered the jury’s verdict on the issue of malice inconsistent with the Judge’s subsequent ruling on the purposes for which the occasions were privileged. The directions which should be given to the jury 37. In the light of this discussion, some guidance can be given as to the directions which should be given to a jury in a case where malice is alleged in answer to a defence of qualified privilege, at the stage when they have to return a verdict on the issue of malice. The essential guidance was given by Lord Nicholls NPJ in the case of Cheng at p 361: “Regarding qualified privilege, juries can be directed that the defence is defeated by proof that the defendant used the occasion for some purpose other than that for which the occasion was privileged. This direction can be elaborated in a manner appropriate to the facts and issues in the case.” 38. The starting point is therefore to explain to the jury that the occasion of the communication was protected by qualified privilege, to explain what that means, and to explain the purpose or purposes for which the privilege was accorded on the occasion of the publication in question. It is then necessary to explain that the privilege does not protect the defendant if the occasion was used to communicate the defamatory material for some other purpose. It should be explained that, if the defendant had more than one purpose in communicating the defamatory material, the protection is not lost unless the dominant purpose was an improper one. 39. The way in which those fundamental directions require to be elaborated will depend on the circumstances of the particular case and the issues arising. If the plaintiff’s contention is that the occasion was used for a particular improper purpose, the jury should be reminded of that contention. Where the purpose for which the privilege is accorded is consistent only with the communication of information which is believed to be true, the jury will need to be directed as to the significance of the defendant’s knowledge or recklessness as to the falsity of the information, depending on how the plaintiff’s case is put, and reminded of the evidence bearing on those issues. The jury should also be directed that the burden of proof rests on the plaintiff. Given the strength of the public interest in the protection of free speech on privileged occasions, it also needs to be made clear to the jury that the burden is not easily or lightly satisfied. 40. It is important to avoid unnecessary complication, and when directing on the law to keep to the basic principles, explained as simply as possible in the circumstances, in order to assist the jury in deciding the real issue in dispute in the case before them. As Lord Justice-Clerk Thomson observed in McPhelim v H M Advocate 1960 JC 17, 21: “If a charge is to be a good charge, it ought to be one addressed to the fifteen people in the jury-box, and not to the Court of Appeal. A charge, which meticulously covers every theoretical aspect, may be so complicated that the jury's capacity to appreciate what it is being told may be blunted long before the real matters with which it has to deal are reached.” The Judge’s directions 41. In the present case, the jury were asked to return special verdicts on the disputed questions of fact bearing on the existence of qualified privilege at the same time as they returned their verdicts on the issue of malice. As a result, the Judge decided the issue of qualified privilege after the jury had delivered their verdicts on malice. That course of action rendered it impossible for the Judge to explain to the jury, before they returned their verdicts on the issue of malice, whether the relevant occasions were privileged, and if so, the purposes for which the privilege was accorded. In principle, it was therefore equally impossible for the jury to decide whether the purpose for which the occasions were used was some other, improper, purpose. The central issue in relation to malice could not be focused. 42. In these circumstances, the Judge directed the jury that they had to assume that the offending words were published on occasions of qualified privilege, and informed them that “the occasion of privilege is … whether it is an occasion to bring to the attention of the school the rumour and urge the school or call on the school to do something, to stop the rumour”. But that did not fully or clearly explain to the jury what the purpose was for which the occasions were privileged. It can be compared with the Judge’s subsequent explanation in his judgment of the reasons why the occasions were privileged, summarised by the Court of Appeal as being the protection of the defendants’ interests in: (1) the preservation of the image and reputation of the school; (2) ensuring that the school inculcated and instilled in its students the importance of academic integrity; and (3) ensuring that the school took a responsible attitude and appropriate actions as regards cheating in examinations or rumours of such behaviour. 43. The Judge went on to explain the meaning of malice to the jury in these terms: “In this context, malice means, one, using the privileged occasion to make a statement for some improper motive. So the occasion is intended for you to do a certain thing and you do something else for a purpose which is not proper for that occasion. Or, two, the absence of honest belief that what one publishes was true. So you must understand malice in this sense. So using the privileged occasion to make a statement for some improper motive, or lack of honest belief that what was published was true. So if you don’t believe in what you are saying in the document that you publish, then obviously you are malicious.” 44. The Judge thus presented the jury with two alternative definitions of malice: the use of the occasion for an improper purpose, or an absence of honest belief in the truth of what was published. As has been explained, these are not alternatives. Only the first is a definition of malice; and, as has been explained, the jury were not in a position to apply it, since they were not (and, in the circumstances, could not be) fully directed as to what the proper purposes were. The second so-called alternative is evidence from which the absence of a proper purpose can be inferred, provided that the purpose for which the privilege is accorded is consistent only with the communication of information which is believed to be true. That was not necessarily the case if the relevant purpose was understood to be the protection of the interests which the Judge subsequently identified, as set out in para 42 above. The purpose of protecting those interests might be consistent with a parent drawing the attention of the school to a rumour even if it was not believed to be true, provided it was nevertheless believed in good faith to threaten the image and reputation of the school, or to require action by the school in accordance with the second or third of those interests. None of these refinements was explained to the jury. 45. The Judge went on to address the jury on the plaintiffs’ case, which was that the defendants’ dominant motive was to injure them, or alternatively that the defendants did not honestly believe in the truth of the defamatory statements. He endorsed the view that a dominant motive to injure the plaintiffs would be improper (see para 18 above). If that direction had stood alone, it might have saved the situation, notwithstanding the earlier deficiencies, since it would have focused the jury’s minds on an issue which, if they found against the defendants, would indeed have implied that they had acted maliciously. 46. But that direction did not stand alone. There remained the alternative case – the “second rung of malice”, as the Judge described it - of a lack of honest belief. In that regard, the Judge directed the jury that “if a defendant uses the privileged occasion to publish something defamatory of the plaintiff which he knows is untrue or which he does not honestly believe to be true, then he clearly steps outside the occasion of privilege”. As explained earlier, that proposition is usually true, but not always; and it might not have been considered true of some, at least, of the occasions with which the jury were concerned. 47. In addition to the foregoing, the jury received no direction as to the weight of the burden of proof which the plaintiffs had to discharge. 48. These defects in the directions are substantial. All but the last of them go to the heart of the jury’s task. In the circumstances, the Court of Appeal was right to decide that the verdicts must be set aside. 49. However, in reaching that conclusion, the Court of Appeal was influenced by the approach to malice adopted in the High Court of Australia by Gaudron, McHugh and Gummow JJ in their joint judgment in Roberts v Bass. It interpreted that judgment as supporting a number of propositions which it treated as accurate statements of the law applicable in Hong Kong. Those included, in particular, the proposition that recklessness as to the truth of a defamatory imputation was sufficient to support a finding of malice only if it amounted to wilful blindness: less serious recklessness, such as indifference to the truth or falsity of the imputation, could support a finding of malice only if presented with some other state of mind, such as gross, unreasoning prejudice, or anger. 50. It is unnecessary to consider Roberts v Bass in detail. The facts of the case were remote from those of the present case. They concerned the distribution of political material in the course of an Australian election campaign, and the judgments ought perhaps to be seen in that light. The Court was divided on the approach to malice which should be adopted in those circumstances. Kirby J expressed his agreement with the reasons given in the joint judgment of Gaudron, McHugh and Gummow JJ, so as to form a majority of the Court, only so far as they applied to malice at common law in circumstances attracting the protection of the constitutional freedom of political communication. He expressly reserved his opinion as to the position outside such situations: para 185. It is unclear whether the authors of the joint judgment intended to introduce into the general law of defamation a distinction between different kinds of recklessness, or to interpret Lord Diplock’s speech in Horrocks v Lowe as having adopted such a distinction. If they did, I would respectfully decline to adopt that approach so far as the law of Hong Kong is concerned. Lord Diplock’s analysis is clear, and remains authoritative, as Lord Nicholls NPJ described it in Cheng at p 355, in the law of Hong Kong. Should there be a retrial? 51. In deciding that there should not be a retrial, the Court of Appeal correctly asked itself whether there was any evidence on which a jury, properly directed, could make a finding of malice on the part of the defendants. It decided that there was not, and on that basis entered judgment for the defendants. 52. In reaching that conclusion, the Court of Appeal proceeded on the footing that an honest belief in the rumours was conclusive evidence of the absence of malice (para 232), and that reckless indifference to their truth or falsity could not establish malice unless it amounted to wilful blindness or was accompanied by another state of mind such as gross, unreasoning prejudice. In that regard, the Court stated (para 235): “As we have discussed above, recklessness short of wilful blindness coupled with gross unreasoning prejudice could be evidence of malice if such unreasoning prejudice was so overwhelming that the desire to act to protect the relevant interest plays no significant part in the publication of the offending statements. Whilst we accept that there may be an arguable case on such recklessness and the jury may infer prejudice, we do not find evidence of such overwhelming unreasoning prejudice in view of the genuine concerns over the school process …” (emphasis supplied) 53. In each of these respects, as it respectfully appears to me, the Court of Appeal was in error. First, it was explained in para 21 above that a defendant who believes that the matter is true will not be protected by privilege if he communicates it for a purpose other than that for which the privilege was accorded. It follows that the Court of Appeal erred when it proceeded on the basis that an honest belief in the rumours was conclusive evidence of the absence of malice. Secondly, as explained at paras 49-50 above, recklessness in this context means indifference to the truth or falsity of the allegation: it does not have to amount to wilful blindness, or to be accompanied by some other state of mind, in order to support a finding of malice. Having accepted that there might be an arguable case on recklessness, the Court should have ordered a retrial. 54. The Court of Appeal examined the evidence in considerable detail before reaching the conclusion that there could not be a finding of malice. As it implicitly acknowledged, however, there was evidence which could be regarded as going the other way. Considering the evidence so far as it is before this Court, in the light of the law in relation to malice as set out above, it cannot be said that the Judge would have been entitled to withdraw the case from the jury. Another way of approaching the matter is to ask, as Bingham LJ asked in Kingshott v Associated Kent Newspapers [1991] 1 QB 88, 99, “whether, if the issue were left to the jury and the jury found for the plaintiffs, that verdict would be set aside as perverse”. My answer is that I do not think it would. Having reached that conclusion, it would be inappropriate to discuss the evidence in greater detail. It is sufficient to say that there were matters on which both parties could rely in support of their respective positions. No assumption can therefore be made as to the correctness of the Court of Appeal’s conclusion on the facts. 55. A retrial should therefore be ordered on the issue of malice. So far as the issues of defamatory meaning and qualified privilege are concerned, the parties remain bound by the conclusions reached in the present proceedings, since they are not affected by the misdirection. They also remain bound by the findings of fact made by the jury in the special verdicts specified in para 9 above, relating to what was observed during the tests, the rumours circulating among the pupils, and the parents’ knowledge of the rumours. The quantum of damages will have to be re-assessed in the event that some, but not all, of the four communications in question are found to have been made maliciously. Any other issues arising in relation to the retrial will be for the Court of First Instance to determine. Costs 56. Both parties bear responsibility for the problems which arose in this case in relation to the issue of malice. Those problems necessitated the defendants’ appeal to the Court of Appeal, and that Court’s treatment of the issue necessitated the plaintiffs’ appeal to this Court. In relation to the other issues in the case, both parties were partially successful before the Judge: the plaintiffs succeeded on the issue of defamatory meaning, and the defendants on the issue of qualified privilege. The only unnecessary element of the proceedings for which only one party bears responsibility is the plaintiffs’ appeal to the Court of Appeal on the issue of qualified privilege. As mentioned earlier, that appeal, CACV 251/2015, is not before this Court. 57. In these circumstances, I would make the following order nisi on costs, namely that there should be no order as to costs before the Judge, the Court of Appeal or this Court, other than the costs in relation to the issue of qualified privilege before the Court of Appeal in respect of the four communications found by the jury to have been published maliciously. Those costs should be awarded to the defendants. Any party challenging this order nisi should lodge written submissions with the Registrar (copied to the other parties) within 21 days from the date of the handing down of this judgment, with liberty to the other party to lodge written submissions in reply within 14 days thereafter. The Court will decide the question on the basis of the written submissions received within the relevant period. If no written submissions are received seeking a different order as to costs before the expiry of the relevant period, the order nisi will become absolute. Chief Justice Ma: 58. For the reasons contained in the Judgment of Lord Reed, it is ordered that: (1) The appeal (from CACV 252/2015) be allowed and the orders made by the Court of Appeal be set aside; and (2) There should be a retrial on the issue of malice in the Court of First Instance. As for costs, there should be an order nisi as to costs as set out in para 57 above. Mr Andrew Caldecott QC, Mr Gerard McCoy SC and Mr Lawrence K F Ng, instructed by Norton Rose Fulbright Hong Kong, for the 1st – 3rd Plaintiffs (Appellants) Mr Benjamin Yu SC and Ms Queenie Lau, instructed by Deacons, for the 1st – 2nd Defendants (Respondents)
Chief Justice Ma: 1. The issues for determination in this appeal concern s 4 of the Places of Public Entertainment Ordinance Cap 172 (“the PPEO”),[1] which requires a licence to be obtained by any person who keeps or uses “any place of public entertainment”. There are two issues, in broad terms: the meaning of a “place of public entertainment” and the constitutionality of the licensing regime under the PPEO. The determination of these issues give rise to important consequences as far as the holding of public entertainment on public streets or other publicly accessible places in Hong Kong is concerned. 2. For the reasons which appear in the comprehensive judgment of Mr Justice Ribeiro PJ, with which I fully agree, this appeal should be allowed. However, in view of the divergence of views among the members of the Court, I ought briefly to emphasize a few points regarding the first issue, which involves an exercise in statutory construction. According to the Court of Appeal and the majority in this Court, the meaning of a “place of public entertainment” should be restricted to a place where there is controlled admission. By controlled admission, I take this to mean some form of control over the admission of persons into a place, with the ability to exclude such persons from entry into that place. Accordingly, public streets or a section thereof and other public places to which the Ordinance might otherwise apply, unless there is this element of controlled admission, would be outside the ambit of s 4 of the Ordinance. The view of the Court of Appeal was that as far as streets to which the public had access were concerned, they would come within s 4 only if the relevant area where the entertainment took place, was cordoned off or enclosed. The declaration sought by the Applicant in the judicial review proceedings (the Respondent in the present appeal) was that s 4 did not include “an open space area (not being enclosed)”. Before us, counsel for the Applicant[2] argued that the element of controlled admission had to be present. 3. It is unnecessary for me to set out the facts; they are amply described in the judgments of Mr Justice Ribeiro PJ and Mr Justice Fok PJ. The relevant provisions in the PPEO to construe are s 4 which uses the term “place of public entertainment” and the interpretation provision, s 2, which defines this term and in doing so refers to the words “public entertainment”:- “s 2 Interpretation ….. “place of public entertainment” (公眾娛樂場所) means – (a) so much of any place, building, erection or structure, whether temporary or permanent, capable of accommodating the public; and (b) any vessel, in or on which a public entertainment is presented or carried on whether on one occasion or more. “public entertainment” (公眾娛樂) means any entertainment within the meaning of this Ordinance to which the general public is admitted with or without payment. …. s 4 Licences for places of public entertainment (1) No person shall keep or use any place of public entertainment without a licence granted under this Ordinance. (2) Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable to conviction to a fine at level 4 and imprisonment for 6 months, and to a further fine of $2,000 for every day during which the offence has continued.” For completeness, I would also refer to the definition in Chinese of “public entertainment”: “公眾娛樂”(public entertainment) 指本條例所指的讓公眾入場的任何娛樂，而不論是否收取入場費;” 4. The proper construction of the provisions just set out is critical in the present case. The starting point in any exercise of statutory interpretation is to look at the context and purpose of the relevant provisions. As has been stated and reiterated in numerous recent decisions of this Court,[3] it is to context and purpose that one looks first in examining the words under scrutiny. One does not begin by looking at what might be termed “the natural and ordinary meaning”, much less I would add a literal meaning, and then put the onus on anyone seeking to advance different meaning to establish some ground which compels acceptance of that different meaning.[4] It is context and purpose that will, in the vast majority of cases, be determinative of the meaning of the words sought to be construed, rather than attempting as a starting point to look at words in a vacuum. 5. In the case of the PPEO, the context and purpose of the Ordinance is clear: it is public safety. The title of the statute emphasizes the public nature of it, and the contents of both the Ordinance and the Regulations thereunder deal predominantly with issues of safety. There is also an associated purpose which is clear from the contents of the Ordinance, namely that pre-planning (which involves risk assessment) is very much seen to be an integral part of public safety. By pre-planning I mean the requirement in obtaining a licence under the PPEO to give notification 42 days prior to the event to a number of different government departments, as may be appropriate, such as the Commissioner of Police, the Director of Fire Services, the Director of Housing, the Building Authority, the Director of Marine and the Director of Electrical and Mechanical Services. While provisions in other Ordinances to which we have been referred do involve aspects of public safety,[5] they enable the police to take action only as and when incidents or situations suddenly occur. In other words, they do not cater for any form of precautionary measures regarding public safety to be taken. The closest Ordinance in this respect is perhaps the requirement to give notice of a “public meeting” under s 7 of the Public Order Ordinance, but, as can be seen from the interpretation section of that Ordinance,[6] the ambit is limited. 6. With this approach in mind, I turn to the exercise of construing the relevant provisions of the PPEO identified earlier. 7. The critical words to be examined are the “place of public entertainment” to which the PPEO applies. Here, the definition of those words[7] refer to “any place, building, erection or structure”. The places intended to be covered are wide and, in view of the context and purpose of the Ordinance, intended to be so, although I accept there are limits as articulated by Mr Justice Ribeiro PJ.[8] What is clear, however, is that it makes no sense artificially to cut down the wide meaning of the word “place”. In view of what the Ordinance seeks to achieve, in adopting a purposive approach to statutory construction, this must be right. 8. Mr Pun argues that the Ordinance, in particular s 4, can only apply in a limited way: as stated above only to places where there is the element of controlled admission. Is this right? Like Mr Justice Ribeiro PJ, I am not persuaded. 9. First, nothing in the Ordinance, apart from the use of the word “admitted” in the definition of “public entertainment”, remotely suggests that controlled admission to a place is a pre-requisite to the applicability of the licensing regime under the Ordinance. There are of course references in the Ordinance relating to the admission of persons to a place,[9] but there are also many provisions that do not. 10. Secondly, I can see neither policy reasons nor commonsense to restrict the application of the Ordinance in the way advanced by the Applicant. 11. The use of the word “admitted” in the definition of “public entertainment” in s 2 of the PPEO, which is crucial to the Applicant’s case, does not on analysis compel this restrictive view of the Ordinance either:- (1) The first observation to make is that the word “admitted” qualifies the word “entertainment”.[10] In context, as a matter of language alone, the meaning of the word “admitted” is not used in the physical sense of being allowed entry into a place. It is used to emphasize the public nature of the entertainment to which the Ordinance applies, that is, entertainments to which the public has access as opposed to those entertainments to which the public does not have access. (2) However, Mr Pun submits that the words “public entertainment” appear in the definition of “place of public entertainment” and therefore as a matter of construction, the word “admitted” becomes applicable to the place of public entertainment. One obvious flaw to this argument is that it involves changing the applicability of the word “admitted” from “public entertainment” to the “place of public entertainment”. Nothing in the language of the Ordinance warrants this approach. (3) More important, even if it were somehow permissible to transpose or alter the meaning the word “admitted” in this way, it is difficult to see how this can then result in the legal requirement that the Ordinance only applies to places where there is controlled admission. As a matter of statutory drafting, this seems a very odd way, to say the least, to prescribe such an important legal requirement; almost, as it were, by a side wind. As indicated earlier, nothing in the rest of the Ordinance suggests this. (4) It is even more difficult to arrive at this conclusion when one returns to the context and purpose of the Ordinance. To say that the Ordinance applies only to places, and public places at that, where there is controlled admission, artificially limits the application of the Ordinance in a way that does not make sense. (5) Reference to the Chinese text[11] provides little assistance as well. Read literally and in a vacuum, the words in Chinese admittedly envisage a physical entry into a place, but those words refer again only to “public entertainment’ and not “place of public entertainment”. Moreover, insofar as any doubt exists as between the Chinese and English texts, s 10B of the Interpretation and General Clauses Ordinance, Cap 1,[12] requires that regard must be had to the object and purposes of the relevant Ordinance. 12. I am of course aware that whatever be the policy and purpose of any Ordinance, the Court cannot give a meaning to words in a statute which those words are incapable of bearing.[13] The way Mr Justice Ribeiro PJ and I have looked at the matter does not involve giving words a meaning they are incapable of bearing. 13. I find it difficult to accept that the Applicant’s construction of the statute, which has the consequence of creating the artificial requirement of controlled admission, could ever have been the intent of the Ordinance. It would make the PPEO inapplicable to events such as the present one where, at least potentially, if not actually, large numbers of people gathered in a public street. In such a situation, the PPEO would apply to public streets or places, or a part thereof, where there existed this element of controlled admission (such as where a part was cordoned off), but the Ordinance would be inapplicable where this element was missing, albeit the same street was involved where there may be even more people present. Neither the language of the Ordinance, nor certainly its purpose, compels this result. Mr Justice Ribeiro PJ: 14. This appeal concerns the scope of the duty to obtain a licence imposed by the Places of Public Entertainment Ordinance (“PPEO”).[14] In the Courts below, Lam J (as Lam VP then was) held that events like the event in question required such a licence.[15] The Court of Appeal disagreed.[16] A. The facts 15. The facts are not in dispute. Since 2005, supporters of “LGBTI”[17] rights in Hong Kong, as in other countries, have commemorated the removal in 1990 by the World Health Organization of homosexuality from its list of mental disorders. They have done so by organizing an event to celebrate International Day Against Homophobia (known as “IDAHO”). Their purpose has been to raise the public’s awareness of anti-discrimination, equal opportunities and anti-homophobia issues, and to provide a platform for the LGBTI community to express their views and to share experiences of those issues. 16. The 7th IDAHO event was scheduled to be held on Sunday, 15 May 2011, between 3.00 pm and 5.00 pm in a portion of Lockhart Road between East Point Road and Cannon Street which would then serve as a designated pedestrian precinct closed to traffic (“the pedestrian precinct”).[18] It was co-hosted by certain LGBTI and human rights organizations including Tongzhi Community Joint Meeting and Amnesty International Hong Kong. 17. The organizers notified the Commissioner of Police of the intended event and provided information, “including a map indicating the exact location of the IDAHO and the place where a stage would be erected” and a “draft programme rundown”.[19] They received a Notice of No Objection in accordance with the Public Order Ordinance (“POO”)[20] but were told by the Police that they might require a temporary licence under the PPEO. They were advised to raise this with the Director of the Food and Environmental Hygiene Department (“FEHD”), the designated licensing authority.[21] This the organizers duly did, submitting an application for such a licence which identified the place of the proposed entertainment and stated that a temporary stage (with dimensions not exceeding 13 x 8 x 13 ft) was proposed; that the venue would be open on all sides; and that 30 volunteers would assist. 18. The FEHD circulated the application to six government departments[22] including the Commissioner of Police. After reviewing the application, the Commissioner wrote to the FEHD on 9 May 2011 stating that he had no objection subject to the applicant preparing an evacuation plan and ensuring that the conditions imposed by the Fire Services Department, the Buildings Department, the Environmental Protection Department and the FEHD were fully complied with. The Commissioner also recommended that additional conditions be included “for public safety and order”, including the provision of at least 30 marshals; ensuring a smooth flow of pedestrians at the venue and not occupying more than one vehicular lane at any time. 19. On 12 May 2011, the organizers withdrew their application stating that “there will not be any ‘Entertainment’ activities during the IDAHO on 15 May 2011”. This was acknowledged by the FEHD which informed the other departments on 13 May 2011 of the application’s withdrawal. 20. The IDAHO event began with speeches given on the stage on the themes mentioned above. At about 3.30 pm, what is now accepted to have been a dance performance (and therefore an “entertainment”[23] for PPEO purposes) began and drew about 150 to 200 participants. It was due to last for about 20 minutes but stopped after 10 minutes when a police inspector told the organizers that what they were doing required a temporary licence under the PPEO and involved committing an offence since they had none. The IDAHO event continued with readings about torture, arbitrary arrest and imprisonment suffered by homosexuals around the world. It ended at 4.30 pm, about 30 minutes earlier than scheduled. No one has been prosecuted over this incident. B. Application for judicial review 21. Some seven months later, the applicant, who was one of the participants in the IDAHO event, sought leave to bring judicial review proceedings to challenge the position taken by the Police in requiring the dance performance to be halted for want of a PPEO licence. Although the applicant was well out of time, Lam J granted him leave to apply for judicial review seeking: “... a declaration that a place of public entertainment, for the purposes of the PPEO, does not include an open space area (not being enclosed) where a political demonstration occurs”; or alternatively, “... a declaration that sections 2 and 4 of the PPEO to the extent that a place of public entertainment, for the purposes of the PPEO, does include an open space area (not being enclosed) where a political demonstration occurs” are inconsistent with Articles 27 and 39 of the Basic Law of the HKSAR ... and/or Articles 16(2) and 17 of the Hong Kong Bill of Rights ... of section 8 of the Hong Kong Bill of Rights Ordinance, Cap. 383 and/or Articles 19 and 21 of the International Covenant on Civil and Political Rights 1966 ..., and are unconstitutional”. C. The main PPEO provisions engaged 22. It will be necessary later to examine the overall structure of the PPEO and the Places of Public Entertainment Regulations (“PPER”). For the present, to facilitate discussion of the decisions below, the main PPEO provisions relevant are set out as follows. 23. Section 4(1) lays down the duty to obtain a licence in the following terms: No person shall keep or use any place of public entertainment without a licence granted under this Ordinance.[24] 24. Three definitions are relevant to that duty: “entertainment” includes any event, activity or other thing specified in Schedule1; “public entertainment” means any entertainment within the meaning of this Ordinance to which the general public is admitted with or without payment. “place of public entertainment” means - (a) so much of any place, building, erection or structure, whether temporary or permanent, capable of accommodating the public; and (b) any vessel, in or on which a public entertainment is presented or carried on whether on one occasion or more;... 25. Schedule 1, referred to in the definition section, lists the activities that constitute “entertainment” as follows: “1. The events, activities and other things referred to in the definition of “entertainment” in section 2 of this Ordinance are the following or any part of any of them- (a) a concert, opera, ballet, stage performance or other musical, dramatic or theatrical entertainment; (b) a cinematograph or laser projection display; (c) a circus; (d) lecture or story-telling; (e) an exhibition of any 1 or more of the following, namely, pictures, photographs, books, manuscripts or other documents or other things; (f) a sporting exhibition or contest; (g) a bazaar; (h) ... (i) an amusement ride within the meaning of the Amusement Rides (Safety) Ordinance (Cap 449) or any mechanical device (other than such an amusement ride) which is designed for amusement; (j) a dance party. 2. In this Schedule “stage performance” includes a tragedy, melodrama, comedy, farce, pantomime, revue, burlesque, burletta, shadow play, an exhibition of dancing, conjuring or juggling, an acrobatic performance and any other stage event including an interlude. 3. In this Schedule, “dance party” means an event with all of the following attributes- (a) music or rhythmic sound of any kind or source is provided at the event; (b) the primary activity at the event is dancing by the persons attending the event; (c) either- (i) the number of persons attending the event exceeds 200 on at least one occasion during the event; or (ii) any part of the event occurs between 2 a.m. and 6 a.m.” D. Lam J’s decision 26. As reflected in the first declaration sought, the construction argument advanced on behalf of the applicant before Lam J, had two elements. It was submitted, first, that the dance performance was not “entertainment” because its sole or dominant purpose was not to provide entertainment but rather, to stage a political demonstration.[25] Lam J rejected that argument, holding that the applicability of a statutory scheme to protect public safety could not depend on a highly subjective criterion regarding the dominant purpose of a dance performance, especially since an artistic performance conveying a political message could also aim to be entertaining.[26] The Court of Appeal agreed[27] and that argument is no longer pursued. 27. The second contention was that the expression “place of public entertainment” does not encompass an open space that is not enclosed. That is an argument to which I shall return. It rested on the concept of the general public being “admitted with or without payment” in the definition of “public entertainment”. The argument was that while a “place of public entertainment” could be an outdoor place, it had to be “a place where there is some form of physical demarcation and the organizer can exercise control by way of admission or non-admission of audience”.[28] 28. It was rejected by Lam J who held that for the PPEO to apply, it was unnecessary for the organizer of a public entertainment to have exclusive control over attendance; that the place where the IDAHO event was held was sufficiently demarcated; and that the conditions imposed ensured that the organizers had sufficient control “to satisfy the criterion of admission”. His Lordship concluded that in the PPEO context, “the word ‘place’ should ... be given its ordinary meaning which includes an open space or a portion of a street which is not enclosed”.[29] 29. Turning to the constitutional objection, Lam J accepted that the licensing regime does involve a restriction on the right to peaceful assembly under Article 17 of the Bill of Rights.[30] However, he rejected the unconstitutionality complaint, holding that the PPEO did not lack legal certainty;[31] that the Ordinance pursued a legitimate purpose; that the licensing requirements were rationally connected to achieving that purpose; and that those requirements were a proportionate measure.[32] Lam J therefore dismissed the application for judicial review. E. The Court of Appeal’s decision 30. The Court of Appeal disagreed with Lam J’s construction in one crucial respect. Their Lordships essentially accepted the argument rejected by Lam J, that a place could only qualify as a place of public entertainment if it was physically cordoned off or enclosed, enabling the organizer to exercise control by way of admission or non-admission of the audience. 31. Focusing on the definition of “public entertainment”, Cheung CJHC (with whom the other members of the Court of Appeal agreed) stated: “...the crux of the arguments turns on the reference in the definition to the general public being ‘admitted, with or without payment’ to the entertainment in question. In my view, this implies, or at least suggests, that the organiser or performer of the entertainment has, or is entitled to exercise, a certain degree of control as a matter of law; or exerts, or purports to exert, a certain degree of control as a matter of fact, over the place in which the entertainment is presented or carried on, so as to enable him to admit, or as the case may be, exclude members of the public from the entertainment.”[33] 32. His Lordship noted that the definition “refers to admitting the general public to the entertainment, rather than to the place of entertainment”, but held that “it does not make any difference”: “Admission to an entertainment connotes the idea of admission to the locality where the entertainment takes place”.[34] 33. Cheung CJHC considered the essential element of control necessarily lacking “with an entertainment carried on in a public street where access of the public to the portion of the street in question is not restricted by the relevant authorities, and the portion of the street is not otherwise enclosed or cordoned off by the organiser or performer.”[35] He elaborated as follows: “...the very idea of admitting involves the possibility of rejecting admission or excluding people from the entertainment. In the case of a public street, no member of the general public can be said to be ‘admitted’ or denied admission to an entertainment carried on there, or, to the place of entertainment in question, absent any authorisation by the Government to the organiser or performer to so control admission, or absent any unilateral attempt by the latter to do so by enclosing or condoning off the part of the street in question.”[36] 34. His Lordship reiterated: “... the very idea of the general public being admitted to an entertainment, or the place of entertainment, involves the ability on the part of the organiser or performer of the entertainment to control admission by admitting or excluding people, whether on terms (such as the sale of tickets) or unconditionally. That ability may be a legal one, such as a licence granted by the Government to so use the place together with the express or implied authority to admit or exclude people from that place.”[37] 35. His Lordship envisaged an unauthorized exertion of de facto control over admission resulting in a public street being cordoned off or enclosed: “That ability may, conceivably, also be derived from a de facto exertion of control over admission. For instance, an organiser or performer may, without having obtained any necessary authority from the Government to do so, enclose or cordon off an area in a public street, within which the entertainment is presented or carried on, and exert or purport to exert the right to control admission to the enclosed or cordoned off area.”[38] 36. Cheung CJHC concluded: “Either way, it is crucial, in order to satisfy the definition of the general public being admitted to the entertainment in question, for the organiser or performer to have that ability to control admission.”[39] 37. Adding: “In reality, where a public street is involved, unless the place of entertainment is suitably enclosed or cordoned off, it is difficult to control admission.”[40] 38. On the present facts, his Lordship noted: “There was never any application to the Government for authority or permission to use the pedestrian precinct in question in such a way as to give the organisers the ability to control admission to the pedestrian precinct. As a matter of fact, there was no attempt whatsoever on their part to exercise any such control on the day in question. Members of the public were as free as always to use the pedestrian precinct whether during the demonstration or the dance performance. We have seen videos taken of the events in question, as did the judge. What one sees is pedestrians, about their normal business, passing the area of the demonstration or performance, some glancing at it as they walk by, some pausing for a moment and then moving on, and some staying to watch. There was no question of the organisers admitting or not admitting the general public to the dance performance.”[41] 39. The Court of Appeal concluded that the dance performance “though an entertainment, was not a public entertainment” and that “[neither] the pedestrian precinct nor the place of the performance was a place of public entertainment”.[42] The applicant was granted leave to amend his application for relief and was granted a declaration that the dance performance did not require a licence under the PPEO.[43] Having arrived at this result, the Court of Appeal did not deal with the constitutional issue. 40. Mr Hectar Pun who appeared[44] on the respondent’s behalf, also put his case firmly on the necessity for the organizer to exercise control over admission to the place where the entertainment was to be presented before it could qualify as a “place of public entertainment” caught by the PPEO, although he did not support the Court of Appeal’s requirement that the site be physically cordoned off or enclosed. It suffices for now to note that both those approaches adopt as the central criterion for the PPEO’s application, the ability of the entertainment’s organizer to control admission of would-be entrants to (and their exclusion from) the place of its presentation. F. The consequences of the Court of Appeal’s decision 41. In the foregoing paragraphs I have set out the main lines of the Court of Appeal’s reasoning in its construction of the essential provisions. There were various supporting arguments which I shall discuss in due course. But I should say at once, with great respect, that I view the consequences of their Lordships’ decision with serious misgivings. 42. I accept, of course, that where an organizer presents an entertainment in private premises and charges for admission, he will naturally exert control over admission both to the entertainment and to the place in or at which the entertainment takes place. However, the PPEO covers entertainments “to which the general public is admitted with or without payment” and applies to “so much of any place ... whether temporary or permanent, capable of accommodating the public ... in or on which a public entertainment is presented or carried on…” This is apt to cover free entertainment open to the general public, where access to the place of entertainment is unrestricted and the venue not cordoned off or enclosed – a not uncommon situation, as common experience shows. 43. As Cheung CJHC acknowledges: “There can be little doubt that the purpose of the Ordinance and the licensing regulations made under it is to provide a means of effectively ensuring public safety and order, and to protect the participants to entertainment from the hazard and dangers associated with the gathering of crowds at places of public entertainment.”[45] 44. Given that premise, it is difficult to accept that it can have been the legislative intent to confine application of the statutory scheme only to entertainments which are presented in cordoned off or enclosed premises or areas where the organizer is able to regulate admission. Adoption of that criterion means that the PPEO’s precautionary safety regime is excluded in all other cases, however many members of the public may take part. And as the Court of Appeal points out, that criterion effectively excludes all entertainments taking place in public streets or spaces. 45. Entertainments staged in public open spaces for members of the public without participants having to gain admission to any cordoned off area are not at all uncommon. Nor are entertainments taking place on public roads or in public plazas at all rare. Pop concerts in a public park or square, attended by hundreds or even thousands of fans come readily to mind. Crowds of revellers throng the pavements, roads and public squares at New Year’s Eve countdown celebrations and at street carnivals staged in entertainment areas like Lan Kwai Fong or Times Square. Crowds are attracted to “fun” charity races which are regularly held on public streets involving waiters carrying trays of drinks, cooks tossing pancakes, or costumed teams bearing sedan chairs, to name but a few. The general public flocks to events such as the traditional Cheung Chau Bun Festival and the Lunar New Year parade of floats in Tsim Sha Tsui. Spectators position themselves on stretches of the waterfront or around typhoon shelters where traditional Dragon Boat races are staged. Sporting events[46] such as marathons or bicycle races are run on public roads. 46. To attend such events, members of the general public are not required to seek admission to any demarcated or cordoned off area. Why should the acknowledged statutory purpose of providing a means of effectively ensuring public safety and good order not apply on such occasions? If anything, one would have thought that open entertainments with fluid, unregulated attendance, have a particular need for precautionary planning under the statutory licensing regime. 47. Against the background of these misgivings, I have arrived at a construction of the relevant provisions which respectfully differs from that of the Court of Appeal. In my judgment, viewed as a matter of language, viewed purposively, historically and in the light of the decided cases cited, those provisions supply no justification for confining the PPEO’s application in the manner proposed by the Court of Appeal or by Mr Pun in this Court. G. The Issue of Construction 48. As was recently re-iterated in HKSAR v Li Kwok Cheung George,[47] the Court in HKSAR v Lam Kwong Wai[48] and HKSAR v Cheung Kwun Yin,[49]affirmed the need generally to interpret statutory language in the light of its context and purpose, and not only when an ambiguity may be thought to arise. It was also re-affirmed that the context of a statutory provision is taken in its widest sense and certainly includes the other provisions of the statute and the existing state of the law.[50] Adopting that approach, I shall begin by examining the language of the main provisions relevant before considering more broadly the structure, purpose and history of the PPEO and the PPER. G.1 The language of the main provisions 49. The main provisions are set out in Section C above. The starting-point is section 4 which lays down the duty to obtain a licence by making it an offence “to use or keep any place of public entertainment without a licence” granted under the PPEO. To ascertain the scope of that duty one therefore has to ask what constitutes a “place of public entertainment”. The PPEO gives that phrase a cumulative definition. 50. It begins with the definition of “entertainment”. The PPEO stipulates that it includes “any event, activity or other thing specified in Schedule 1”. As we have seen, Schedule 1 is cast in broad terms and lists various items such as musical performances, exhibitions, sporting contests and (as in the present case) exhibitions of dancing. 51. It moves next to the definition of “public entertainment”. The PPEO defines this as “entertainment” within the meaning of the Ordinance “to which the general public is admitted with or without payment”. It is of the first importance to note that by this definition, an entertainment becomes a public entertainment because the general public are “admitted” to the entertainment. It makes no mention of the place at which the entertainment is staged. It certainly does not impose any requirement that the general public have to be “admitted” to such a place before the duty to obtain a licence is triggered. As I have noted, the Court of Appeal thought that there was no difference between being admitted to an entertainment and being admitted to the place where it is to be staged, holding that “Admission to an entertainment connotes the idea of admission to the locality where the entertainment takes place”. I respectfully disagree on this crucial point, but before I seek to develop the argument, the final aspect of the cumulative definition should be examined. 52. Building upon the first two definitions, the PPEO goes on to define “place of public entertainment” as: • so much of any place, building, erection or structure, • whether temporary or permanent, • capable of accommodating the public • and any vessel • in or on which a public entertainment is presented or carried on whether on one occasion or more. 53. It is at this third stage that the Ordinance turns its attention to the place at which the public entertainment is presented. Having defined what amounts to a “public entertainment”, the PPEO sets out the characteristics of venues hosting public entertainments which fall within the section 4 duty. Once more, the definition says nothing about admission to or exclusion from the site. There is nothing to suggest that someone must exercise the power to admit or exclude would-be entrants before the venue qualifies as a “place of public entertainment”. Nor is there anything to suggest that the site must be cordoned off or enclosed. A place of public entertainment may, of course, be subject to regulated admission and may involve a cordoned off or enclosed area, but the definition does not mention, let alone confine the duty to, sites exhibiting such features. 54. It is an inclusive definition designed to cater for various different kinds of venue at which a public entertainment might take place. It may, but does not have to, consist of or to be located in a building or structure. It is sufficient if it consists of “so much of any place, ... whether temporary or permanent, capable of accommodating the public ... in or on which a public entertainment is presented or carried on whether on one occasion or more”.[51] 55. Accordingly, when applied to a “place” (as opposed to a building, erection or structure), it is a definition with the following elements: (i) The venue must plainly be identifiable as “a place” – an area whose boundaries are ascertainable by description or depiction on a plan, a map, a chart or otherwise; (ii) the place in question must be the site where the public entertainment is to be presented or carried on; and (iii) it must also be a place which is capable of accommodating members of the public. The venue will therefore generally have two parts. It will embrace both the part of the site where the entertainment is to be presented or held, such as a stage used by the performers or presenters; and that part of the site which accommodates the members of the public in attendance. The lay-out may of course vary and entertainers may venture into the audience area while members of the audience may be invited onto the stage, so that the two parts, while together constituting the “place of public entertainment”, are not mutually exclusive. The point to note is that the definition applies just as comfortably to places to which the general public has unrestricted access as to enclosed venues where admission is regulated. Its language furnishes no reason for distinguishing between them. 56. The Court of Appeal’s reasoning rests crucially on the definition of “public entertainment” which distinguishes a “public entertainment” from an “entertainment” by specifying that the former is an entertainment “to which the general public is admitted with or without payment”. What the Court of Appeal has done is to transpose admission to the entertainment to admission to the place where the entertainment is to be presented, even though the concept of “admission” plays no part in the definition of “place of public entertainment”. The Court of Appeal proceeded from there to postulate that the requirement of admission applied to the place connotes control over entry to that place and implies an ability to admit some members of the public while excluding others. It held that this further implies that the locality must be cordoned off or enclosed to enable such control to be effectively exercised, leading to the conclusion that without such physical means of segregation, a venue cannot qualify as a “place of public entertainment” and no duty to obtain a licence arises. With respect, I do not think the Court of Appeal’s gloss on the statute is justified. 57. The definition of a “public entertainment” is concerned with the nature of the entertainment in question. It is not about the characteristics of the site where it is presented. Having begun by defining an “entertainment” broadly, the PPEO proceeds to limit its application to an “entertainment ... to which the general public is admitted”. That phrase is properly understood as an entertainment to which the general public have access – an entertainment open to and staged for the enjoyment of the general public. This is in contradistinction to an “entertainment ... to which the general public is not admitted”. 58. The definition of “public entertainment” therefore aims to draw a distinction between entertainments accessible to the general public on the one hand, and private entertainments not so accessible on the other, making the PPEO applicable only to the former. A band which plays music at a private wedding party provides entertainment, but not entertainment to which the general public is admitted. The same applies to the presentation of a film or musical recital in a private club. To take a further example, a school play or performance by a school orchestra attended only by the pupils and their parents are not entertainments to which the general public is admitted. In such cases, the need to protect the safety and good order of the general public does not arise, and the statutory purpose of the PPEO is not engaged. Such private premises may well be subject to separate safety regimes, including, for instance, under the Clubs (Safety of Premises) Ordinance.[52] 59. The definition so understood is straightforward. If the entertainment is one open to the general public (with or without payment and, one might add, whether anyone actually shows up to attend the performance), it qualifies as “public entertainment” and comes within the licensing regime. This applies whether or not the venue is cordoned off; whether or not admission to the site is controlled; and whether or not it comprises a portion of a public street or open space. This accords with the PPEO’s policy of promoting public safety at entertainments to which the general public is admitted. G.2 Only entertainments on private property with regulated access 60. In my view, transposing the word “admitted” from the definition of “public entertainment” to the definition of “place of public entertainment” (where that word is not found) has a further unwarranted effect: It confines the operation of the PPEO’s safety scheme to entertainments which take place on private property. 61. This is because, in the Court of Appeal’s view, such transposition requires one to postulate that someone must have power to admit or exclude members of the public to or from the place where the entertainment is to be staged. That works perfectly well if the place in question is private property, but where the entertainment is presented in a public street or public open space, the notion of anyone controlling admission to the place where the entertainment is to be carried on is something of a contradiction in terms. How can the organizer or performer lawfully exclude members of the general public from what is, by definition, a public street or public open space? It follows that the “controlled admission criterion” has the effect of restricting the PPEO’s application to entertainments on private property, where admission can be controlled. 62. The Court of Appeal came close to recognizing that this highly restrictive view of the Ordinance is dictated by its construction, Cheung CJHC observing that “... the very idea of admitting involves the possibility of rejecting admission or excluding people from the entertainment. In the case of a public street, no member of the general public can be said to be ‘admitted’ or denied admission to an entertainment carried on there, or, to the place of entertainment in question ...”[53] However, the Court of Appeal thought that there was still scope for the PPEO to apply to public entertainments presented in public streets or spaces because the government might authorize “the organiser or performer to so control admission”[54] or because an organizer might exert de facto control over admission without any prior authority from the government.[55] Mr Pun was more prepared to accept that confining the Ordinance’s scope to entertainments on private property logically followed from his criterion of “controlled admission”, but he too sought to argue that the presenter of an entertainment in a public street or place might become subject to the PPEO if he obtained authority from the government to control admission. He also submitted that the Ordinance might apply where someone voluntarily subjected himself to it by applying for a licence with a view to avoiding possible prosecution for obstruction of a public place. 63. With respect, I do not think there is any shrinking from the conclusion that a construction adopting a criterion of controlling admission to the place of the entertainment[56] (which I have called “the controlled admission criterion”) excludes the Ordinance from applying to public spaces or to private spaces to which the public is given unrestricted access. In my opinion, the instances put forward for suggesting that the PPEO might still have a role to play regarding entertainments in public places serve merely to highlight the unsatisfactory nature of that criterion. 64. It is hard to see any logic or realism behind the suggestion that the criterion of controlled admission might be triggered by applying for government authority to control admission to the intended public place venue. Applications for road closures or for cordoning off portions of public places may of course be made under a variety of Ordinances authorising road works, digging MTR tunnels, repairing or laying public utilities, and so forth. But what is being suggested is that an application might be made to authorize control of admission to a public place for the sole purpose of presenting a public entertainment at that site. No one has been able to point to any statutory or other legal basis for granting such authority (except perhaps the PPEO itself). 65. I would be prepared to accept that a notice of no objection under the POO or a PPEO licence issued pursuant to an application which specifies the setting up of a stage in a public place may provide lawful authority sufficient to resist prosecution for obstruction by setting up the stage. But authorization to close off a portion of a public street or place and for the organizers to admit or exclude members of the public is an entirely different matter. 66. The logic is in any event hard to follow. The suggestion seems to be that there might first be an application to give the applicant control over admission into some portion of a public place and, if successful, that the applicant would thereupon become subject to a duty under the PPEO (since the criterion of controlled admission would be applicable by virtue of the prior permission granted) to make an application all over again to present the proposed public entertainment. It is hard to see how the hypothetical initial application could have proceeded unless the purpose of segregating part of the public place had been explained and accepted, which makes that application hard to distinguish from an application made under the PPEO. 67. If what is being suggested is that the application for authority to segregate a portion of the public place does indeed proceed on the basis of a licence granted under the PPEO itself, then the authority to control admission is the outcome of a successful application and not the criterion for deciding whether the application has to be made in the first place. 68. Similar difficulties exist in relation to the Court of Appeal’s “de facto” instance,[57] involving someone who, without any authority from the government to do so, encloses or cordons off an area in a public street, and presents the entertainment within the enclosure, controlling admission to the scene. Since this would satisfy the criterion of controlled admission, it is apparently suggested that the emergence of this situation could trigger a duty to obtain a licence. 69. With respect, it is a revealingly unrealistic argument. Since it is postulated that the organizer is already presenting the entertainment in the controlled enclosure without having made any licensing scheme application, why should anyone think that he would consider himself bound at that stage to make a PPEO application? What would he be applying to be licenced to do? The scheme aims to vet and then license entertainments proposed for the future. The de facto instance turns the statutory scheme on its head. It proposes a licence application to be made after the organizer has already gone ahead without being licensed. 70. In reality, if the organizer took it upon himself to close off a part of a public street or square and then to regulate entry by members of the public, he would rapidly find himself arrested for obstruction of a public place and find his enclosure dismantled. 71. Another point which emerges from this discussion is that the licensing requirement benefits the organizers of a public entertainment in a public street because a licence provides lawful authority for what might otherwise amount to an unlawful obstruction if a stage or other structures are to be set up. This has led to Mr Pun’s curious suggestion that while not bound to obtain a PPEO licence, organizers of an entertainment in a public place may voluntarily opt in to the licensing scheme in order to benefit from the authorizations the licence confers. He submits that the licence somehow “transforms the nature of the place” during its subsistence. It is hard to see how if, as a matter of construction, the licensing scheme is inapplicable to such entertainments, the licensing authority has power to issue licences to those who volunteer to apply. G.3 An unnatural construction? 72. The argument against the construction which I have put forward reflects the Court of Appeal’s approach, namely, that “Admission to an entertainment connotes the idea of admission to the locality where the entertainment takes place”. On that basis, it was suggested at the hearing that confining the use of “admitted” to the definition of “public entertainment” is somewhat unnatural, “admission” being more appropriately used in connection with admission to a locality, with the concomitant of a power of exclusion. It was argued that this was supported by the Chinese text,[58] especially the words “入場”. 73. Leaving aside the Chinese text for the moment, the argument raised against the construction I have proposed involves two principal propositions with which I take issue. 74. First, it involves the proposition that in defining “public entertainment” as “... any entertainment ... to which the general public is admitted with or without payment”, the definition necessarily imports as a concomitant, the power to regulate and refuse admission. 75. I am unable to agree. I do not accept that where one refers to a place to which persons are admitted, one thereby necessarily implies the existence of a means of regulatingadmission and granting entry to some, while turning others away. Thus, to state: “This is a park to which the general public is admitted,” does not imply that those who wish to enjoy a walk or a picnic in the park have to go through any process of admission involving possible refusal of entry. The statement merely indicates that the park is accessible to or open to the general public. There may be many points from which they may gain access without anyone regulating admission. Of course, having entered the park there may be rules of conduct to be observed, whether municipal by-laws, or if the property is private, rules stipulated by the owner. But that is not inconsistent with unrestricted admission. 76. Secondly, the argument involves the proposition that the phrase “to which the general public is admitted” is naturally to be understood as referring to a place – that “admission” is naturally tied to a locality – so that one should transpose the concept of “admission” found in the definition of “public entertainment” to the definition of “place of public entertainment”. 77. I cannot accept that suggestion. As a matter of language, to say that “X is something or some place to which the general public is admitted” means that it is something or some place open to or accessible to the general public. While that expression might most commonly be used in relation to a locality, it is by no means confined to such usage. 78. Thus, one may say of a club that it has “membership to which women are admitted”. That obviously means that membership of the club is open to women. Of course, if a woman is admitted to membership, she would naturally be entitled to use the club’s premises, but it is important not to elide admission to membership with admission to such premises. They are quite distinct matters. Thus, if one says of a club that it has “membership to which women are not admitted”, it by no means follows that women are not admitted to the club’s premises (as guests or otherwise). 79. Again, one might say: “The Hong Kong Bar is a bar to which foreign lawyers with suitable professional qualifications are admitted”. Again, it has the meaning of the local bar being accessible to or open to qualified foreign lawyers. It does not connote admission to any locality. 80. To take another example, one might say: “The status of Hong Kong permanent resident is a status to which persons satisfying the requirements of Article 24 of the Basic Law are admitted”. That is a statement about eligibility for a status, not admission to any locality. 81. There is accordingly, in my view, no justification for regarding the concept “admitted” in the definition of “public entertainment” as having to be read as tied to the place where the entertainment is staged rather than simply as identifying the types of entertainment (those to which the general public is admitted) brought within the PPEO. 82. I accept, as did Mr Johnny Mok SC,[59] that the Chinese text of the definition of “public entertainment”, especially use of the expression “入場”, carries a connotation of “locality” which, for the reasons I have given, does not exist in the English text. It follows that, on my construction, a difference exists between the two authentic texts which requires resolution in accordance with section 10B of the Interpretation and General Clauses Ordinance[60] which provides: “(1) The English language text and the Chinese language text of an Ordinance shall be equally authentic, and the Ordinance shall be construed accordingly. (2) The provisions of an Ordinance are presumed to have the same meaning in each authentic text. (3) Where a comparison of the authentic texts of an Ordinance discloses a difference of meaning which the rules of statutory interpretation ordinarily applicable do not resolve, the meaning which best reconciles the texts, having regard to the object and purposes of the Ordinance, shall be adopted.” 83. With this in mind, I turn now to consider the object and purposes of the PPEO. G.4 The purpose of the PPEO and PPER 84. It is undoubtedly true, as Cheung CJHC pointed out, that the purpose of the Ordinance and Regulations “is to provide a means of effectively ensuring public safety and order, and to protect the participants to entertainment from the hazard and dangers associated with the gathering of crowds at places of public entertainment”.[61] 85. Thus, the PPEO empowers the Secretary for Home Affairs to make regulations to provide for measures against overcrowding, for the control and prevention of fires, the maintenance of sanitary conditions and the maintenance of peace and good order in a place of public entertainment.[62] It also authorizes regulations to be made regarding : “...the location of a place of public entertainment generally or on or in any place, building, erection or structure and the circumstances, conditions and restrictions in or subject to which such location may be permitted.”[63] Moreover, regulations may provide for the construction materials used, the venue’s layout and matters such as the electrical wiring and lighting arrangements for any stage erected.[64] Detailed regulations have correspondingly been made in the PPER. 86. To be more precise, the purpose of the legislation is to promote public safety by means of a detailed precautionary licensing scheme aimed at anticipating potential dangers and putting preventative measures in place before the event occurs. 87. Thus, the statutory scheme requires an application for any proposed use of a place of public entertainment to be made not less than 42 days[65] before the start of the entertainment.[66] This is to allow potentially interested government departments to be consulted. Unless the application is refused outright, the PPER require the licensing authority to forward a copy to the Commissioner of Police, the Director of Fire Services, the Director of Housing or the Building Authority, the Director Marine and the Director of Electrical and Mechanical Services as appropriate.[67] There is also power given to officers of appropriate departments to enter and inspect the proposed venue.[68] 88. If there is no objection from the departments circulated, the applicant is required, not less than 28 days before commencement of the entertainment,[69] to supply a detailed plan of the place to which the application relates,[70] showing: “ (i) each part of the place intended to be used for holding entertainment; (ii) each part of the place intended to be used for seating or otherwise accommodating an audience (if any); (iii) each existing and any proposed exit route from the place; (iv) the position or location in the place of any existing or proposed permanent structure; (v) each part of the place in which it is intended that temporary barriers may be erected or otherwise provided; (vi) the proposed or actual location in the place of all sanitary fitments; (vii) the proposed or actual location in the place of fire service installations and equipment; (viii) all or, as may be appropriate, any 1 or 2 of the following means by which ventilation of the place, or any part thereof, is provided, namely, windows, ducts or any mechanical means; (ix) the proposed or actual location in the place of all laser equipment (if any); and ... (c) in the case of a temporary structure, diagrams sufficient to illustrate the proposed method of construction and the spacing and scantling of structural members.” 89. Having obtained the details, the licensing authority has a general power to issue a licence in suitable terms, specifying conditions designed for the location and for the type of entertainment in question.[71] Non-compliance with any such conditions is made an offence.[72] 90. A purposive construction of the PPEO definitions to decide whether a duty to obtain a licence arises must have regard to the licensing scheme as a whole. It must recognize that the licensing requirement is imposed to enable a risk assessment to be made in advance of the proposed event by government departments possessed of expertise and experience relevant to the venue and type of entertainment proposed. It is designed to ensure that there is enough time for site inspections by relevant departments if necessary, for proper consideration of detailed layout and structural plans, as well as the proposed programme of entertainment. It is a scheme designed to enable the licensing authority to lay down conditions concerning matters including crowd control, fire safety and sanitary facilities to suit the particular place and type of entertainment in question. It also allows for adequate manpower arrangements to be made for there to be a suitable Police, Fire Services and first aid personnel[73] presence. If the entertainment is likely to attract a large audience, the scheme also allows precautionary traffic and other arrangements to be made, facilitating the orderly arrival and dispersal of the crowds in the vicinity of the place of public entertainment. 91. The construction urged by the respondent and adopted by the Court of Appeal has, in my view, too narrow a focus. It concentrates on the point of access to the site – on whether members of the public need to gain admission to the place where the entertainment is to take place. In doing so, it gives no weight to what is central to the legislative scheme, namely, the enabling of proper safety assessments to be made and precautionary measures to be put in place in advance. Those are matters which must be addressed well before one gets to the point of considering how access is gained to the entertainment venue. The narrow focus does not in truth take the legislation’s purpose into account. 92. Secondly, it appears, with respect, that the Court of Appeal has misapprehended the way the legislative scheme is designed to function. Cheung CJHC sought to support the “controlled enclosure” criterion for excluding the licensing scheme in the following terms: “This interpretation makes good sense in the light of the context and purpose of the legislation. As mentioned, the undisputed purpose of the legislation and the licensing regime that it sets up is to deal with crowd control and general safety. It therefore makes sense to require an organiser or performer, who has sufficient control over the place of entertainment as to enable him or her to control admission, to satisfy various licensing requirements designed to ensure adequate crowd control and general safety. Contrast that with an organiser or performer who does not have that degree of control over the place of entertainment, so much so that he or she is not even in a position to control admission. In that sort of situation, it would serve little purpose to require such a person to obtain a licence and fulfil licensing requirements which are geared towards crowd control and general safety when, by definition, that person simply does not have control over the place of entertainment, or put another way, the power to control the place of entertainment lies with someone else – in the case of a public street, the Government.”[74] His Lordship added: “One must also consider matters from the point of view of a licensee. After all, the Ordinance and regulations impose licensing requirements. Granted that these requirements are designed for crowd control and general safety, they are only as good as the licensee’s ability to comply with them. They are premised on the licensee’s ability to control the place of entertainment and access to it. These requirements lose their meaning if the organiser or performer does not even have the ability to control admission.”[75] 93. In my view, there are three flaws in this reasoning. The first is to adopt “the point of view of a licensee”. To argue from that perspective is to pre-suppose that a licence has been already been granted. But the purpose of the scheme is to require the would-be presenter of a public entertainment to apply for a licence, setting in train the assessment process described above. If the location is unsuitable or if, upon his application being circulated, a responsible department objects for a legitimate reason, the purpose of the Ordinance is served by refusal of a licence. Even if a licence is not refused, the legislative purpose is served by enabling a proper risk assessment to be conducted and permitting suitable conditions to be imposed in advance of the performance. 94. The second flaw involves the unwarranted assumption that a licensee who has power to control admission will have the ability to comply with any licensing conditions imposed and that the converse is true of a licensee who does not have such power. The fact that an organizer is able to man the entrance to the venue, charging admission or collecting tickets tells one nothing about that person’s ability or resources to ensure compliance with safety requirements within. Conversely, the organizer of a free event to which members of the general public are given unrestricted access may be perfectly well-equipped and well-prepared to comply with whatever licensing conditions might have been imposed, such as conditions regarding the number of marshals to provide, the availability of fire safety equipment, the layout and structural soundness of a stage, and so forth, matters which do not depend on whether admission to the site is regulated. 95. The third flaw is to assume that the efficacy of the PPEO depends entirely on the ability of the licensee personally to comply with conditions imposed. But the legislative scheme also enables precautionary safety measures to be put in place by the Police, Fire Services, first aid personnel and other agencies concerned with public safety when they receive prior warning and are able to plan for the event. 96. Mr Pun sought to argue that confining the PPEO’s operation to public entertainments on private property was justifiable because the Police need powers to enter such premises whereas there is no such need in relation to public entertainments in public places where sufficient powers can be exercised under other applicable Ordinances such as the POO. I do not accept that argument. For the reasons set out in Section H of this judgment, the POO and the other Ordinances there considered provide no substitute for the PPEO’s precautionary safety regime. I do not accept that there is no need for such safety precautions in public places. 97. Since the unambiguous object and purpose of the PPEO is to promote public safety by means of a detailed precautionary licensing scheme, in so far as a difference has emerged between the English and Chinese texts in the definitions of “public entertainment” and “place of public entertainment” which the rules of statutory interpretation ordinarily applicable do not resolve, the meaning which in my opinion best reconciles the texts, having regard to the aforesaid object and purpose is the construction based on the English text. It is the construction demanded by section 10B of the Interpretation and General Clauses Ordinance since it avoids placing restrictions (based on unjustifiable criteria of controlled admission, physical enclosure and private property) on the scope of the duty to obtain a licence and so avoids disabling government authorities from effectively carrying out their duty of anticipating and preventing potential danger to the public in connection with the staging of public entertainments. G.5 The history of the legislation 98. There is, in my view, little need to go into the history of the legislation, but as it has been referred to in both Courts below and in the parties’ submissions, I should touch on it briefly. (a) The PPEO has its origins in the Places of Public Entertainment Regulations Ordinance 1919, in which, as with the current Ordinance, “Entertainment” was defined by reference to a list of activities while “Public entertainment” was given the definition which has remained unchanged to this day.[76] There was no definition of “place of public entertainment”. (b) In 1951, the Ordinance was amended and a definition of “place of public entertainment” was introduced which included any place on which a structure or building stood “or other place” as falling within that concept.[77] It therefore operated on the basis that any place might serve as a place of public entertainment. According to the objects and reasons published in the Gazette, this had “the effect of widening considerably the places and forms of entertainment subject to the control imposed by the Ordinance”.[78] (c) In 1970, the definition was narrowed, the Attorney General indicating in Legislative Council that it was considered unnecessary that the definition of “place of public entertainment” should “include a place on which there is no structure capable of accommodating the public, for example, a field which is set aside for a gymkhana”.[79] This resulted in a “place of public entertainment” being defined as: “(a) any place on which there is any building, erection or structure, whether temporary or permanent, capable of accommodating the public; and (b) any vessel, in or on which a public entertainment is presented or carried on whether on one occasion or more.” (d) There was then a reversion to the previous policy when the definition was further amended in 1980. No longer did a “place of public entertainment” have to involve a building, erection or structure in which the public were accommodated. The definition which continues to apply today relevantly reads: “‘place of public entertainment’ means – (a) so much of any place, building, erection or structure, whether temporary or permanent, capable of accommodating the public ...”[80] 99. Cheung CJHC correctly records that the speeches in Legislative Council debating the 1980 amendment show that it was desired to cater for the emergence of small cinemas occupying part of larger premises such as a shopping mall.[81] His Lordship did not, however, address the fact that the definition had reverted to the wider definition applying to “any place” previously applicable. 100. It suffices to say that there is nothing in the legislative history to support the argument that a place of public entertainment has to meet the criterion of controlled admission, much less to consist of a controlled enclosure. Even the narrowing of the definition in 1970 (reversed in 1980) does not help the respondent’s case. It has never been his argument that a place of public entertainment must be a “place on which there is any building, erection or structure, whether temporary or permanent, capable of accommodating the public”. The respondent accepts (the Court of Appeal held correctly[82]) that a place of public entertainment can consist of an “open space area”, subject to his proviso that it meets the criterion of controlled admission. G.6 Certain particular arguments 101. I turn next to some particular arguments advanced in favour of the “controlled enclosure” or “controlled admission” construction. Such arguments, must be viewed recognizing that the PPEO and PPER cater for many different types of entertainment, including those which are free and those where admission is charged, taking place in all sorts of venues. 102. Included amongst the situations covered by the PPEO are (as I have accepted) entertainments to which the general public is admitted held in private buildings or enclosed spaces where the organizer controls entry, both to the entertainment and to the venue. But, as I have been at pains to emphasise, the PPEO does not confine itself to such situations. It follows that where arguments are advanced relying on judicial decisions or statutory provisions which are only concerned with controlled admission to venues, it should be recognized that such arguments do not address or invalidate the construction regarding areas of unrestricted access. G.6a Scott v Cawsey 103. This applies to the Court of Appeal’s reliance on the High Court of Australia’s decision in Scott v Cawsey.[83] The first thing to note about that case is that it was concerned with liability under section 1 of the Sunday Observance Act, 1780[84] which arose if “any house, room, or other place” was “opened or used for public entertainment or amusement, or for publicly debating on any subject whatsoever” on a Sunday, “and to which persons [were] admitted by the payment of money, or by tickets sold for money”, such a place being deemed “a disorderly house or place”.[85] As Griffith CJ explained: “...what is made unlawful is opening or using for the specified purposes a house, room, or place to which persons are admitted on payment.”[86] 104. It follows that Sunday Observance cases, involving persons who charge for admission to entertainments, generally involve controlled admission to places which are cordoned off or enclosed. They do not address or concern free public entertainments at sites with unrestricted access. 105. Scott v Cawsey was such a case. The twist which gave rise to an appeal all the way to the High Court was that payment was required for admission to only part of the venue. The point in issue was whether the Sunday Observance Act applied where part of a large hall was cordoned off with admission being charged for entry into the cordoned off area (referred to as “the reserve”) where comfortable seating was provided, while entry to the hall itself was free. [87] 106. The owner of the hall successfully argued that since admission to the hall was free, the Act had not been infringed. It was the hall which constituted the “house, room, or other place” to which persons were admitted gratis and not“for the payment of money or by tickets sold for money”. The cordoned off “reserve” was not regarded as the relevant “house, room or other place”. Griffith CJ regarded the fee charged as “a charge for special comfort afforded to persons present at an entertainment to which admission is free”.[88] 107. It was in that context, referring to the large hall, that Griffith CJ said: “The term ‘admission,’ however, involves the idea of locality, and of the ability of the person who permits the admission to exclude others from the place of entertainment or amusement except with his consent.”[89] 108. Since it was a case where the entertainment was presented in a building into which the owner admitted members of the public, it is not surprising that his power of admission was held to carry with it a power to exclude others. It provides no basis for the Court of Appeal’s gloss on the PPEO. 109. The long title of the 1780 Act states that it is “An Act for preventing certain Abuses and Profanations on the Lord’s Day called Sunday”. Its aim was to encourage adherence to the Christian Sabbath as a day of rest and religious observance. As appears from reading section 1 as a whole,[90] its focus was not on any precautionary measures, but on the fact that the place was “opened or used” on a Sunday, penalising, after the event,[91] the deemed keeper of the disorderly house and persons who managed or conducted the entertainment or acted as master of ceremonies, or as moderator, etc, of any public debate. That its focus was on admission for payment is clear from the section’s penalising “every doorkeeper, servant or other person who shall collect or receive money or tickets from persons assembling at such house, room, or place on the Lord’s Day”. The purposes of the 1780 Act are self-evidently far removed from those of the PPEO. G.6b Provisions said to be consistent only with controlled enclosures 110. It was argued that certain provisions in the PPEO and PPER make sense only in relation to controlled enclosures. Thus, having observed that licensing requirements designed for crowd control and general safety “are only as good as the licensee’s ability to comply with them”, Cheung CJHC continued: “They are premised on the licensee’s ability to control the place of entertainment and access to it. These requirements lose their meaning if the organiser or performer does not even have the ability to control admission. Thus, for instance, a licensing requirement stipulating the maximum number of the audience at an entertainment, which is no doubt an important requirement in terms of crowd control and general safety, simply cannot work if the organiser or performer has no ability to control admission.”[92] 111. I am unable to accept that argument. In the first place, there is no universal “licensing requirement stipulating the maximum number of the audience”. The provision referred to is section 10(2)(f) which, with the other paragraphs of section 10(2) lists the sorts of conditions which the licensing authority may specify.[93] If it serves no purpose in a given case to impose a condition setting a maximum number for those to be admitted, one would expect such a condition not to feature in the licence. 112. However, it may, in given circumstances, be sensible for such a condition to be imposed in relation to a venue with unrestricted access. Section 10(1) gives the licensing authority a discretion as to the precise terms and conditions imposed. It may make sense, for instance, to grant the licence on condition that the performance cannot begin or must cease if the attendance by those admitted to the entertainment exceeds the stated maximum save with the consent of the responsible police officer present. Such a condition does not depend on controlled admission. 113. Another example mentioned by the Court of Appeal is regulation 170B which states: “Where a licence is granted or renewed under these regulations, then for so long as the licence remains in force, the licensee shall exhibit and keep exhibited at all times the licence in a conspicuous position at the entrance or, if there is more than one entrance, the main entrance of the premises to which the licence relates.” 114. I quite agree with Cheung CJHC’s comment that: “This regulation is simply not capable of compliance where the place of entertainment in a public street is not, in one way or another, enclosed or cordoned off, and there is therefore no ‘entrance’ to talk of.”[94] 115. What follows from this? The regulations are enforced by making non-compliance an offence by the licensee.[95] But where the regulation is obviously inapplicable on the facts, no one could sensibly suggest that the licensee has failed to comply and has thereby committed an offence. It does not justify the criterion of controlled admission. G.6c Buskers 116. A variant of the foregoing arguments involves the proposition that the licensing regime cannot have been intended to operate in relation to entertainments on public streets with unrestricted access since it would otherwise catch people like buskers, who (it is argued) are obviously not intended to be targeted by the licensing scheme. 117. R v Bow Street Magistrates’ Court ex p McDonald,[96] was cited by the Court of Appeal[97] in support. That was a case involving a busker who was accustomed to play his guitar using amplifying equipment on roughly the same spot in Leicester Square, without any licence. Purporting to act under a warrant issued by a magistrate pursuant to the London Government Act 1963 (“the 1963 Act”), the police seized his equipment. Mr McDonald brought judicial review proceedings, challenging the magistrate’s decision to issue the warrant, contending that he did not need a licence to busk. The Court of Appeal reversed Dyson J[98] and agreed that no licence was needed. To understand the basis of the Court of Appeal’s decision, it is necessary to examine the relevant provisions of the 1963 Act. 118. Schedule 12 paragraph 1 of the 1963 Act laid down the licensing requirement, stating: “... no premises in a London Borough ... shall be used for any of the following purposes, that is to say, public dancing or music and any other public entertainment of the like kind, except under and in accordance with the terms of a licence granted under this paragraph by [the council of the borough ... ].” Under paragraph 1(7), “premises” was defined to include “any place”. 119. Where premises were caught by Schedule 12 paragraph 1, it was an offence under paragraph 10(1) if: “(a) any person concerned in the organisation or management of that entertainment; and (b) any other person who, knowing or having reasonable cause to suspect that such an entertainment would be so provided at those premises (i) allowed the premises to be used for the provision of that entertainment; or (ii) let the premises, or otherwise made the premises available, to any person by whom an offence in connection with the entertainment has been committed ...” It may be noted that such “premises” are envisaged to be under the control of a person in a position to allow them, or to let them, for use in breach of the licensing requirement. 120. The power to forfeit Mr McDonald’s musical equipment was conferred by paragraph 12B(1) and conditioned on a person being convicted of an offence under paragraph 10(1) or (2), the forfeiture power also being linked to the powers of search and seizure which were subject to challenge by judicial review. The paragraphs conferring those search and seizure powers are important. Paragraph 12(2) provided: “A police constable ... may, if authorised in that behalf by a warrant granted by a justice of the peace, enter any premises in respect of which he has reason to suspect that an offence under this Schedule is being committed.” And paragraph 12C stated: “A constable ... who enters any premises under the authority of a warrant granted under sub-paragraph (2) of paragraph 12 of this Schedule may seize and remove any apparatus or equipment ... found on the premises which he has reasonable cause to believe may be liable to be forfeited under paragraph 12B of this Schedule.” 121. I have emphasised the contents of paragraph 10(1) and italicised the words involving “entry into premises” in paragraphs 12(2) and 12C because they show that the premises intended to be regulated under the 1963 Act were premises controlled by others which could only be entered by a constable pursuant to a statutory power authorising the issue of a warrant. It is not surprising that Leicester Square was held not to constitute such “premises” even though “premises” was defined to include “any place”. Schiemann LJ[99] explained this as follows: “Schedule 12 is concerned with the control of premises to which the public is invited for the purposes of public dancing or music and any other public entertainment of the like kind. It does not forbid all music-making in public places. ... They envisage a situation in which someone other than the council has the power to regulate the activities of the public in that place and where it is in the public interest that the council assume some power of entry and supervision which otherwise it would not have. The Schedule is not designed to deal with situations where what is going on is going on in a street to which every music-maker or other member of the public has access. ... The wholly artificial way in which the council tried to use the powers in paragraph 12(2) to secure a warrant to obtain a right of entry to Leicester Square (a place in their ownership, and to enter which they had no need of any warrant) makes the point.”[100] 122. As I have endeavoured to show, there is no similar wording in the PPEO or the PPER capable of supporting the view that the licensing requirements with which we are concerned are intended only apply to premises under private control and not to public squares or streets. The position of buskers in Hong Kong therefore cannot be approached along the lines of ex p McDonald. What then of the criticism that it would be absurd to apply the PPEO and PPER to buskers in Hong Kong? 123. This case is not about buskers and it is not necessary to decide whether the PPEO applies to them. However, I will say that I am inclined to accept that it would be unnecessary and incongruous to apply the full panoply of powers and duties that apply to entertainments calling for crowd control, and so forth, to buskers playing on a pedestrian flyover or under-pass. Typically, a busker does not gather a stationary audience of any size but merely hopes that well-wishing passers-by will pause long enough to drop some money into his or her hat or instrument case before going on their way. This is not the kind of entertainment that calls for a multi-departmental pre-event risk assessment, the submission of venue plans or the tailoring of licence conditions such as those envisaged by PPEO section 10 to the busker’s activity. Given this view, is there any scope for a purposive construction of the PPEO definitions which would exclude buskers from the ambit of the Ordinance? 124. There is a reasonable argument that this cannot be done because of the clear language of the definitions. A busker is clearly engaged in providing “entertainment” consisting of “musical entertainment”.[101] It may be said to be “public entertainment” on the basis that it is entertainment “to which the general public is admitted with or without payment”, being accessible to all passers-by. He may furthermore be said to be playing in a “place of public entertainment” consisting of the pavement or passage way which is “capable of accommodating the public” who hear the music while walking by. 125. But an important additional factor has to be taken into account in this analysis. Buskers and other street musicians are already subject to a much simpler licensing requirement under the Summary Offences Ordinance (“SOO”).[102] Section 4(15) provides: “Any person who without lawful authority or excuse ... plays any musical instrument in any public street or road save under and in accordance with the conditions of any such general or special permit as the Commissioner of Police in his absolute discretion may issue ... shall be liable to a fine of $500 or to imprisonment for 3 months.” 126. I would accept that some regulation of buskers and street musicians is necessary to prevent public nuisance or undue obstruction in the frequently over-crowded streets of Hong Kong. However, the permit envisaged by the SOO seems far more appropriate than a fully-fledged PPEO licence. The permit issued by the Commissioner does not involve multi-departmental precautionary assessments but can still be tailored to the place and circumstances in which the busker is to perform. Given the existence of a duty far more suited for dealing with buskers, if the position of buskers had to be definitively decided, the question would arise as to whether, having subjected buskers to that duty, the legislature ought properly be taken to have intended that buskers should additionally be subject to a licensing requirement under the PPEO. A strong argument plainly exists to support a negative answer. It may very well be appropriate in such a case to imply words into the PPEO provisions to exempt from their operation, persons who already hold a permit issued under section 4(15) of the SOO. 127. As Sir Anthony Mason NPJ pointed out in HKSAR v Lam Kwong Wai,[103] the modern approach is to adopt a purposive construction of statutes while accepting : “... that the principles of common law interpretation do not allow a court to attribute to a statutory provision a meaning which the language, understood in the light of its context and the statutory purpose, is incapable of bearing (R v A (No 2) [2002] 1 AC 45 at pp 67G-68H, per Lord Steyn).” However, as his Lordship went on to state: “A court may, of course, imply words into the statute, so long as the court in doing so, is giving effect to the legislative intention as ascertained on a proper application of the interpretative process. What a court cannot do is to read words into a statute in order to bring about a result which does not accord with the legislative intention properly ascertained.” 128. I think it compellingly arguable that the legislative intention properly ascertained unambiguously favours a construction whereby the licensing obligations of buskers are confined to their obtaining a permit under the SOO. Accordingly, it may well be proper to imply words to that effect into the PPEO so that section 4 should be read with the italicised words implied: “No person shall keep or use any place of public entertainment without a licence granted under this Ordinance or under section 4(15) of the Summary Offences Ordinance.” 129. The same question of principle can arise whenever there is an overlap between the licensing requirements of the PPEO and some other Ordinance in relation to activity which constitutes “public entertainment”: Is it the legislative intent that both licences have to be obtained and if not, which is intended to be the appropriate licence? Without in any way indicating a view as to a possible outcome, it may be noted that section 4C of the SOO imposes an obligation to obtain a permit from the Commissioner of Police on persons who organize or participate in “a lion dance, dragon dance or unicorn dance, or any attendant martial arts display, in a public place” unless exempted. G.6d Small scale public entertainments 130. There may of course be instances of small-scale entertainments staged in public places with unrestricted access which do not involve pre-existing duties such as those mentioned above and which may attract the licensing requirements of the PPEO. One can have some sympathy for those who complain about “kill-joy” red tape interfering with enjoyable public entertainments, but complaints of that nature cannot nullify the essential statutory purpose of safeguarding public safety and good order in connection with public entertainments. 131. In any event, the PPEO is not bereft of means to exclude or minimise the burdens of the licensing regime in appropriate cases. Thus, section 3A confers on the Secretary for Home Affairs power by Order published in the Gazette to exempt from the operation of PPEO section 4, places of public entertainment which are of a specified class or description from all or some of the provisions of the Ordinance or PPER. The Secretary has gazetted an Order exempting a number of places, including places “under the management of the Leisure and Cultural Services Department or the Home Affairs Department” from the licensing requirement.[104] Such an exemption might be applied, for instance, to places regularly resorted to by the public where informal, small scale entertainments may be carried on, since such places are managed, one assumes, with proper safety measures put in place by the said Departments. 132. The PPEO also provides the licensing authority with discretions to adjust the level of regulation properly called for. For instance, it may in suitable cases, accept much shorter periods of notice than the 42 days and 28 days normally called for under regulations 162(1) and 162(3) respectively. A simple entertainment posing little risk to public safety can be rapidly approved with the licensing authority declaring itself satisfied by the materials submitted. The licence can cover regular events to be held over a stated period. The licensing authority has power to waive or reduce fees[105] and, where conditions imposed are found to be inappropriate, power to vary or cancel them.[106] 133. But at the end of the day, a degree of inconvenience may have to be accepted to further the public safety purposes of the PPEO. As Lord Bingham of Cornhill pointed out: “The drawing of a line inevitably means that hard cases will arise falling on the wrong side of it, but that should not be held to invalidate the rule if, judged in the round, it is beneficial.”[107] 134. Given the almost infinite forms and venues for public entertainments imaginable, it is not surprising that the PPEO’s drafting might in some circumstances be thought wanting. Adopting one construction, it may appear to have an over-broad application, imposing the inconvenience of having to apply for a licence where many might agree that it is unnecessary to operate the precautionary scheme. But adopting another construction, the PPEO may be given too narrow a scope, leaving public safety at risk in situations which clearly call for precautionary planning. The burdens of a licensing scheme are felt more in the nature of bureaucratic inconvenience than in the imposition of criminal liability. For my part, I consider it better to adopt a construction which errs on the side of ensuring public safety. 135. For the foregoing reasons, I respectfully disagree with the Court of Appeal’s construction. In my view, places to which the general public have unrestricted access, including public streets and spaces, are capable of qualifying as places of public entertainment within the meaning of the PPEO and PPER. There is, in my judgment, no basis for construing the relevant definitions in section 2 as confining such places to those which are subject to control over admission. H. The constitutional issue 136. On the basis that the PPEO applies to the IDAHO event, the respondent argues that sections 2 and 4 are unconstitutional because they are inconsistent with Articles 27[108] and 39[109] of the Basic Law and/or Articles 16(2)[110] and 17[111] of the Hong Kong Bill of Rights. The contention is that the licensing regime of the PPEO infringes the constitutionally guaranteed freedoms of expression and assembly, as demonstrated by the interference with the IDAHO dance performance. 137. Those freedoms are of course of great importance, but they are not absolute and laws which impinge on them are valid if they pass the proportionality test which has often been applied in this jurisdiction.[112] In the present case, the licensing requirement clearly has a legitimate aim being a precautionary scheme for the effective protection of public safety and good order in places of public entertainment.[113] Plainly, the licensing regime which has been described is rationally connected with achieving that end. Neither of these points is in dispute. 138. The constitutional objection advanced on the respondent’s behalf is that the safety of the public attending entertainment events in a public street is sufficiently catered for by powers conferred on the Police by such Ordinances as the POO, the Police Force Ordinance[114] (“PFO”) and the SOO so that it is disproportionate to impose additional fetters on the relevant freedoms in the form of the PPEO’s licensing requirements. 139. I have accepted the argument as a matter of construction that buskers may well be sufficiently regulated by being placed under a SOO duty to obtain a permit, but cannot accept the respondent’s argument in reliance on the POO or PFO. While the regulatory schemes of the POO and PPEO overlap to a limited degree, the POO has a different purpose, deals with different subject-matter and operates in a different fashion. It provides no substitute for the well-developed precautionary licensing regime established by the PPEO. 140. The POO is, as its title suggests, concerned with public order. It only involves the Commissioner of Police and does not cater for any multi-departmental pre-event risk assessment in relation to public entertainments. Its main purpose is to regulate public meetings and public processions and not public entertainments. Such “meetings” are defined to exclude gatherings organized exclusively for recreational or cultural purposes[115] so that many entertainments are likely to fall outside the ambit of public meetings and so will not be regulated by the POO. Similarly, since most public entertainments will not involve a “public procession”[116] the POO provisions on processions will rarely be applicable. While organizers have to notify the Commissioner of Police of intended public meetings[117] and public processions,[118] they have to give no more than a week’s prior notice. The information which must be provided is limited to the organizer’s personal details, the purpose and subject-matter of the meeting, its date, location, time of commencement, duration and an estimate of the number of people expected to attend.[119] Similar information, plus the intended route, must be given in relation to an intended public procession.[120] Such requirements do not compare with the detailed information as to the entertainment and venue that must be provided by the applicant for a licence under regulations 162-164 of the PPER.[121] 141. Mr Pun was keen to point to the POO’s regulation of “public gatherings” which are not confined to public meetings and public processions, but include other meetings, gatherings or assemblies of 10 or more persons in any public place.[122] However, the treatment that such public gatherings receive under the POO is very limited. Under section 17, police officers are given powers to prevent, stop, disperse, etc, such public gatherings but only if they reasonably believe that they are likely to lead to a breach of the peace. Section 6 gives the Commissioner power to control and direct the conduct of public gatherings if he reasonably considers it to be necessary in the interests of national security or public safety, public order or the protection of the rights and freedoms of others, but this is a reactive power, there being no obligation on the organizers or participants in public gatherings to give prior notice of their occurrence. 142. Mr Pun also relied on section 10 of the PFO, but that section merely lays down a long list of the general duties of the police force. Such duties include taking lawful measures with a view to preserving the public peace, preventing and detecting crimes and offences; preventing injury to life and property, and so on. They are certainly no substitute for the PPEO’s precautionary scheme. 143. Such constraints on the freedoms of expression and assembly as flow from operation of the PPEO generally do not involve prohibiting the event. The Ordinance therefore usually involves minimal interference with the freedoms in question. In the rare case where the location is so unsuitable or the entertainment so dangerous that the risk cannot be acceptably mitigated by imposing suitable conditions, refusal of a licence is a proportionate constraint. It is unthinkable that we should fail to learn the tragic lessons of the Lan Kwai Fong disaster of 1 January 1993.[123] But even in cases involving such dangers, the organizers may be able to find a safe alternative venue or suitably to modify the entertainment so as to obtain a licence subject to tailor-made conditions. In my view, the requirements imposed by the PPEO are no more than necessary to secure public safety and good order in places of public entertainment. It is a legitimate, rational and proportionate measure which is compatible with the constitutional guarantees. 144. In the present case, the organizers of the IDAHO event were advised by the Police to apply for a PPEO licence. The Police were right to do so. The proposal involved putting up a stage and various smaller structures publicising the IDAHO event and a dance performance on a Sunday afternoon in a crowded pedestrian precinct. The organizers initially did submit a PPEO application but then chose to withdraw it while it was being considered by the licensing authority and interested departments. It may be that the organizers were wrongly advised since they did so on the footing that there would be no “entertainment” involved, a position which is now no longer maintained. The Police had already served a Notice of No Objection under the POO and had indicated, in response to the PPEO application that they had no objection provided specified conditions were met. There is every reason to think that if the organizers had persisted in their application, a licence would have been granted in good time before the IDAHO event and there would have been no interference with the dance performance. Only the organizers knew what they had planned by way of public entertainment and it was not too burdensome to require them to provide relevant advance information to the licensing authority in furtherance of public safety. 145. For the foregoing reasons, I would allow the appeal, set aside the Court of Appeal’s orders and restore the order of Lam J dismissing the application for judicial review. Mr Justice Tang PJ: 146. I have had the advantage of reading the judgments of Fok PJ and Lord Neuberger of Abbotsbury in draft, I respectfully agree, for the reasons given by them, that the appeal should be dismissed. Since, I disagree with the Chief Justice and Ribeiro PJ, I will add a few words of my own. 147. These proceedings concern the construction of s 4 of the Places of Public Entertainment Ordinance (“PPEO”), under which no person shall keep or use any place of public entertainment without a licence under PPEO. 148. The Court is divided over the true construction of the definitions of “public entertainment” and “place of public entertainment” in PPEO. 149. The definition of entertainment is wide and includes “any event, activity or other thing specified in Schedule 1”. Dancing is specified in Schedule 1, and I shall proceed on the basis, but do not decide, that the dancing in this case, said to be an Artistic and Dancing Expression to promote a message against discrimination, was entertainment within the meaning of PPEO. 150. Public entertainment as defined “means any entertainment within the meaning of this Ordinance to which the general public is admitted with or without payment”. 151. Place of public entertainment means “so much of any place, building, erection or structure, whether temporary or permanent, capable of accommodating the public; and any vessel, in or on which a public entertainment is presented or carried on whether on one occasion or more.” 152. What is “public entertainment” is important because it is the presenting or the carrying on of public entertainment in or at a place which makes it a place of public entertainment. A place in or at which non-public (private) entertainment is presented or carried on does not require a licence under PPEO. 153. What distinguishes private entertainment from public entertainment is the admission of the general public. When entertainment to which the general public is admitted is presented or carried on in or at a place, a licence for the place (not for the entertainment), under PPEO is required, and it is an offence to keep or use that place without a licence. What, then, is the place, the keeping or using of which without a licence is an offence? The definition of “place of public entertainment” provides the answer, namely, a place which is “capable of accommodating the public”, and the public being those who have been admitted to the entertainment, being presented or carried on there. 154. The essence of Mr Mok’s submission is that the general public is admitted to an entertainment if they are exposed to it, for example, they could hear or see the entertainment. He accepts that if he is right, a busker would require a PPEO licence. According to Mr Mok, a busker, an exhibitor of sculptures or pictures by performing or exhibiting in public, admits the general public to the entertainment. [124] 155. With respect, I agree with Fok PJ , for the reason given by him, that: “262 … the word ‘admitted’ is to be construed in an active sense and as requiring that, for a place to be a place of public entertainment, the person presenting or carrying on the (public) entertainment must be able to control admission to the place where the entertainment is being presented or carried on.” 156. In my opinion, in context, that is the ordinary and natural meaning of “admitted”. 157. It follows that I also respectfully agree with the Chief Judge, who said, with the concurrence of Stock VP and Barma JA : “35 … the very idea of the general public being admitted to an entertainment, or the place of entertainment, involves the ability on the part of the organiser or performer of the entertainment to control admission by admitting or excluding people, whether on terms (such as the sale of tickets) or unconditionally.” 158. If “admitted” is given its ordinary and natural meaning, the PPEO would cover all obvious places for control under the PPEO, for example, entertainment in private premises such as cinemas and dance halls, and other premises, such as football stadiums, where admission of the general public is controlled. Mr Mok’s complaint is that, giving “admitted” its ordinary and natural meaning would not cover the present case, or, for example, annual count-downs where large crowds may gather, although the same safety concerns are involved. That is why we should construe “admitted” purposively to cover these other situations. Mr Mok submits that the fact that buskers will also be covered should not concern us. Buskers are already covered by s 4(15) of the Summary Offences Ordinance (“SOO”). I suspect, s 4(15) is more honoured in the breach than in the observance and that, sensibly, the police does not prosecute every busker. More to the point, I seriously doubt whether the legislature would ever have knowingly brought buskers within the ambit of the PPEO. Ribeiro PJ regards the inclusion of buskers under the PPEO “incongruous”.[125] His lordship said it may be appropriate to imply words into the PPEO provisions to exempt buskers, who already hold a permit issued under s 4(15) from the SOO.[126] Like Lord Neuberger[127], I do not believe that is an acceptable solution. Buskers would be included if Mr Mok is right. I regard the inclusion of buskers under Mr Mok’s construction, another reason why it must be rejected. 159. The PPEO does not apply to private entertainment, although the same safety concern may be present. The legislature have chosen to cover only public entertainment. They drew the line at the admission of the general public with or without payment and not at the possible safety concern of an entertainment. The definition uses simple words, and has been in place since 1919. I do not believe the word “admitted” has ever been understood otherwise than in its ordinary and natural sense. As Fok PJ’s historical survey of the PPEO shows, for many years, (1908 to 1951 and 1970 to 1980) places of public entertainment were confined to a structure of some sort[128] and the ordinary and natural meaning of “admitted” was entirely adequate for the purpose of the PPEO. The legislature had no reason to wish for any wider meaning. However, between 1951 and 1970, and since 1980, a place of public entertainment was not confined to a structure. But, the definition of public entertainment was not amended. I cannot accept that the legislature would have left the definition unamended if they had intended any change to the ordinary and natural meaning of “admitted”. 160. Mr Mok also asks us to distinguish between admission to the entertainment and admission to the place of entertainment. If “admitted” has the meaning ascribed to it by Mr Mok, I doubt if the distinction adds anything. If “admitted” has the meaning I prefer, the distinction would not help him. 161. Does the distinction mean that if the general public is admitted to the entertainment it does not matter that it was not admitted to the place of public entertainment? Suppose, an operator of a commercial drive-in cinema (who has a PPEO licence for his cinema), shows a silent film, and the movie was watched by the general public from outside the drive-in cinema. On the appellant’s case, the general public had been admitted to the entertainment. Would the fact that the operator has a licence for the drive-in cinema suffice? If so, is that because, the place at which the non-paying public saw the movie was not a place of public entertainment and no licence was required for that area? If that is right, why should it matter the general public had watched the movie from outside? If not, is it because, the place where the public saw the movie was itself a place of public entertainment and a PPEO licence was required for that area. If that is right, since the access to the entertainment by the public rendered the place at which they accessed the entertainment, a place of public entertainment, what is the relevance of the distinction? 162. I also believe Mr Mok has exaggerated the public safety concern in this case. Here, although there was no PPEO licence, the requirements for a public meeting or procession under the Public Order Ordinance (“POO”) were met. The Commissioner of Police did not object to the meeting or procession on public safety grounds. The facts of the present case provide a useful illustration of the dangerous implication of Mr Mok’s submission. 163. The evidence of Robit Bhagat, Assistant Divisional Commander (Administration) Wanchai Police Division, showed that, after WSIP Chan noticed a number of performers dancing on the stage and in the area before the stage, she warned the person in charge that since there was no PPEO licence they were liable to prosecution. As a result, the dancing stopped, and the event continued with speeches. There is no reason to think that the level of danger to public safety was greater because of the dancing. Moreover, WSIP Chan went on to say she did not realize that there were story-telling in the speeches. My impression is that, had she realized that, she would have given another warning because entertainment as defined includes story-telling, and a licence would be required. 164. I agree with Fok PJ that since constitutionally protected freedom of expression may be involved, clear words are required to effect any such restriction. I would not give the word “admitted” a “purposive” construction which may impact these important rights. 165. Mr Mok provided other examples where public safety may be a serious concern. He mentioned the Lan Kwai Fong disaster. But, there was a PPEO licence on the occasion. Mr Mok also mentioned annual count-downs. Two well known places for such events are the Times Square and under the Clock Tower in Tsimshatsui. Count-downs per se do not come under the definition of entertainment. Nor are they likely to be organized. So who could be required to apply for a licence? Nor is it likely that the authorities would take no measure for public safety because no PPEO licence was or could be applied for. It is common sense that the police and other relevant government departments would do all they can to ensure public safety, on such and similar events. 166. I turn to the Chinese version of PPEO. The English and Chinese texts are equally authentic, and presumed to have the same meaning.[129] Mr Pun for the respondent, relies on the words “讓公眾入場” in the Chinese definition of public entertainment, in particular, the word “讓”. Mr Mok, in his oral submission, accepted that “讓” meant “to permit”. I am of the opinion that in the Chinese text, public entertainment is defined as entertainment to which the general public is permitted to be admitted, with or without payment. Moreover use of the expression “入場”, especially the word “場”, supports the view that it was concerned with the admission to the place of entertainment and not merely to the entertainment. 167. I see no difference in meaning between the Chinese and English texts. 168. For the above reasons, which, I believe, are consistent with the judgments of Fok PJ and Lord Neuberger, I would dismiss the appeal. That being the case, it is unnecessary for me to express any view on the constitutional question. Mr Justice Fok PJ : A. Introduction 169. Under the Places of Public Entertainment Ordinance (Cap.172) (the PPEO), a person who keeps or uses a place of public entertainment must obtain a licence to do so. The question of principle raised in this appeal is whether and in what circumstances, on the true construction of the PPEO, an entertainment which is presented or carried on in a public street or other publicly accessible open space is one for which the organiser is required to obtain a licence. The Court of Appeal, differing from the Judge at first instance, held that the licencing regime did not apply to the use of a pedestrian precinct in Lockhart Road for a dance performance. The Commissioner of Police (the Commissioner) appeals, contending that it did. 170. If the Commissioner is correct, then a subsidiary question arises as to whether the provisions of the PPEO requiring the obtaining of a licence are inconsistent with the constitutionally protected freedom of public demonstration and assembly and freedom of expression.[130] B. The facts 171. Save for one matter referred to below, there was no dispute as to the facts. 172. Various lesbian, gay, bisexual, transgender and intersex (LGBTI) and human rights organisations (the Organisers) proposed to host a 7th annual International Day Against Homophobia (IDAHO). The purpose of the 7th IDAHO was to raise public awareness of anti-discrimination, equal opportunities and anti-homophobia issues and to provide a platform for the LGBTI community to express their views and to discuss and share their experience of these matters. The 7th IDAHO was scheduled to be held on Sunday, 15 May 2011, between 3pm and 5pm on Lockhart Road between East Point Road and Cannon Street in Causeway Bay. That part of Lockhart Road is designated as a pedestrian street from 4pm to midnight on Mondays to Fridays and from noon to midnight on Saturdays, Sundays and public holidays and so was therefore a pedestrian precinct at the relevant time. 173. Prior to the scheduled day for the 7th IDAHO, on 15 March 2011 and again on 15 April 2011, the Organisers submitted a Notification of Intention to Hold a Public Meeting to the Commissioner of Police. The notification was given pursuant to section 8 of the Public Order Ordinance (Cap.245) (the POO) and the application identified the pedestrian precinct as the place of the meeting, estimated that about 250 persons were expected to attend and stated that there would be a stage performance. The Organisers also provided a map to the police on which the position of a “stage” and an “assembly space” were respectively marked at one end of and along the pedestrian precinct. In due course, on 11 May 2011, the Commissioner issued a Notice of No Objection pursuant to section 9(4) of the POO indicating he had no objection to the 7th IDAHO being held in the pedestrian precinct, subject to certain conditions. 174. In parallel with this, the Organisers submitted, on 15 March 2011, an application to the Food and Environmental Hygiene Department for a Temporary Places of Public Entertainment Licence under the PPEO to use the pedestrian precinct for the 7th IDAHO. The application stated that a temporary stage would be erected and gave its dimensions as not over 13 feet x 8 feet x 13 feet. However, this application was subsequently withdrawn by the Organisers on 12 May 2011 who took the view the licence was not necessary. Whether that view is correct is, of course, the principal issue in this appeal. 175. The 7th IDAHO took place on 15 May 2011 as planned. A rehearsal of a dance performance to be given at the event took place from about 2pm. A police sergeant asked one of the Organisers to produce the temporary licence under the PPEO for inspection and, when told that the application for this had been withdrawn, informed her that the activity was in contravention of the law. 176. An individual, identified by the initial T, who is the respondent to this appeal, attended the event in the pedestrian precinct at about 3pm. At that time, there were about 100 participants attending the event, which began with speeches given by representatives of the Organisers and others. The dance performance began shortly thereafter at about 3.35pm. For reasons that will become apparent, it is not necessary to describe the content of this performance in any detail. It took place on and in the area immediately in front of the stage. At the time, the 7th IDAHO event had drawn about 150 to 200 participants, including T, and during the dance performance a small crowd of passers-by also watched, some stopping to do so and others merely slowing down as they walked along the pedestrian precinct. 177. Shortly after the performance began, a police inspector informed the Organisers that they required a licence under the PPEO and warned them that, as they did not have a licence, they were committing a criminal offence and might be liable to a fine and imprisonment. As a result, at about 3.46pm, the Organisers stopped the performance. It was originally to have run for about 20 minutes but was cut short by 10 minutes. After the performance was brought to an end, the 7th IDAHO event continued with readings and speeches until about 4.30pm. C. The litigation below 178. The respondent began judicial review proceedings[131] challenging the Commissioner’s decision to halt the dance performance. There was, however, a dispute between the parties as to whether the dance performance was halted by the police or by the Organisers themselves in light of the police’s view that a licence under the PPEO was required. As a result, the original relief sought was amended to seek a declaration (the first declaration) that: “a place of public entertainment, for the purposes of the PPEO, does not include an open space area (not being enclosed) where a political demonstration occurs”. 179. In the alternative, the respondent sought a declaration that the provisions of the PPEO, if they applied to the dance performance, were unconstitutional, being inconsistent with the provisions of articles 27 and 39 of the Basic Law, articles 16(2) and 17 of the Hong Kong Bill of Rights and articles 19 and 21 of the International Covenant on Civil and Political Rights. 180. At first instance, before Lam J (as he then was), the respondent was unsuccessful.[132] The Judge held that the licencing regime in the PPEO did apply. He held that the dance performance was an “entertainment”, that it was also a “public entertainment” and that the pedestrian precinct was a “place of public entertainment”, as each of those terms is defined in the PPEO. The Judge also held that the provisions of the PPEO were not unconstitutional in that, although they restricted the various freedoms relied upon, they satisfied the proportionality test. 181. On appeal, the Court of Appeal[133] allowed the appeal, differing from the Judge as to the applicability of the licencing regime. The Court of Appeal held[134] that, although not entitled to the first declaration, the respondent was entitled to a declaration in the following terms, namely that: “the use of the pedestrian precinct on Lockhart Road on 15 May 2011 for the purposes of presenting or carrying on the Artistic and Dancing Expression at the 7th International Day Against Homophobia Demonstration did not require the grant of a licence for places of public entertainment under the Places of Public Entertainment Ordinance (Cap.172)”. 182. Having so held, the respondent’s entitlement to the alternative declaration based on the constitutional challenge did not arise for decision and the Court of Appeal did not deal with, and expressed no views on, this issue. D. The relevant provisions of the PPEO 183. Before identifying the issues for decision in this appeal, it is helpful first to set out the relevant provisions of the PPEO. 184. Section 4(1) of the PPEO provides that: “No person shall keep or use any place of public entertainment without a licence granted under this Ordinance.” Contravention of this provision is a criminal offence under section 4(2).[135] 185. Section 2 of the PPEO includes definitions of the terms “entertainment”, “public entertainment” and “place of public entertainment”, each of which is relevant in the context of this appeal. 186. The definition of “entertainment” in section 2 is wide and includes “any event, activity or other thing specified in Schedule 1”. Schedule 1 provides: “1. The events,activities and other things referred to in the definition of ‘entertainment’ in section 2 of this Ordinance are the following or any part of any of them– (a) a concert, opera, ballet, stage performance or other musical, dramatic or theatrical entertainment; (b) a cinematograph or laser projection display; (c) a circus; (d) a lecture or story-telling; (e) an exhibition of any 1 or more of the following, namely, pictures, photographs, books, manuscripts or other documents or other things; (f) a sporting exhibition or contest; (g) a bazaar; (h) (Repealed L.N. 120 of 2002) (i) an amusement ride within the meaning of the Amusement Rides (Safety) Ordinance (Cap. 449) or any mechanical device (other than such an amusement ride) which is designed for amusement; (j) a dance party. 2. In this Schedule ‘stage performance’ (舞台表演) includes a tragedy, melodrama, comedy, farce, pantomime, revue, burlesque, burletta, shadow play, an exhibition of dancing, conjuring or juggling, an acrobatic performance and any other stage event including an interlude. 3. In this Schedule, ‘dance party’ (跳舞派對) means an event with all of the following attributes– (a) music or rhythmic sound of any kind or source is provided at the event; (b) the primary activity at the event is dancing by the persons attending the event; (c) either– (i) the number of persons attending the event exceeds 200 on at least one occasion during the event; or (ii) any part of the event occurs between 2 a.m. and 6 a.m.” 187. A “public entertainment” is defined as meaning: “any entertainment within the meaning of this Ordinance to which the general public is admitted with or without payment.” 188. Finally, a “place of public entertainment” is defined as meaning: “(a) so much of any place, building, erection or structure, whether temporary or permanent, capable of accommodating the public; and (b) any vessel, in or on which a public entertainment is presented or carried on whether on one occasion or more”. E. The issues in this appeal 189. It is not now in issue that the dance performance staged by the Organisers was an “entertainment” within the meaning of the PPEO. At first instance, the Judge rejected the argument advanced on behalf of T that the performance was not an “entertainment” as defined because it was not for the sole or dominant purpose of entertainment but rather was for the purposes of a political demonstration.[136] That argument was “not seriously pursued” in the appeal and the Court of Appeal had no doubt the performance was an “entertainment”.[137] In this Court, the respondent expressly does not dispute that the performance was an entertainment under the PPEO being “an exhibition of dancing”.[138] 190. The Organisers of the 7th IDAHO were plainly using the pedestrian precinct in Lockhart Road, where the temporary stage was erected and immediately in front of the stage, for the purposes of presenting or carrying on the dance performance. The question in issue is therefore whether the Organisers were keeping or using a place of public entertainment within the meaning of the PPEO, that being the activity for which a licence is required under section 4. That question in turn depends on whether the dance performance was a “public entertainment” and whether the place where it was “presented or carried on” was a “place of public entertainment”. The proper construction of the terms “public entertainment” and “place of public entertainment” in the PPEO (the construction issue) is therefore the primary focus of this appeal. 191. If the construction issue is decided against the respondent, the constitutional issue will need to be addressed. F. The Construction Issue 192. The ultimate question raised in this appeal is whether the PPEO licensing regime applied to the use of the pedestrian precinct in Lockhart Road between East Point Road and Cannon Street for the dance performance put on during the 7th IDAHO. But this involves the broader question of construction of whether and in what circumstances the PPEO applies to an entertainment presented or carried on in a public street or other publicly accessible open space. 193. While accepting that the purpose of the PPEO was to provide a means of effectively ensuring public safety and order and to protect the participants from the hazards associated with the gathering of crowds at places of public entertainment, the Court of Appeal held that the reference to “admitted with or without payment” in the definition of “public entertainment” implied or suggested that the organiser or performer has, or is entitled to exercise, a certain degree of control as a matter of law, or exerts or purports to exert a certain degree of control as a matter of fact, over the place in which the public entertainment is presented or carried on, so as to enable him to admit, or exclude, members of the public from the entertainment.[139] The Court of Appeal concluded that: “In reality, where a public street is involved, unless the place of entertainment is suitably enclosed or cordoned off, it is difficult to control admission.”[140] The correctness of that conclusion is central to this appeal. F.1 The approach to construction 194. The modern approach to statutory construction is not in issue. The proper starting point is to look at the relevant words or provisions having regard to their context and purpose: see HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at §63 and Leung Chun Ying v Ho Chun Yan Albert (2013) 16 HKCFAR 735 at §12. The context of a statutory provision should be taken in its widest sense and includes the other provisions of the statute and the existing state of the law: HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568 at §13. The purpose of a statutory provision may be gleaned from the provision itself or from a relevant report of the Law Reform Commission or the Explanatory Memorandum to the bill or from a statement of a responsible official to the Legislative Council in respect of the bill: ibid. at §14. 195. Nevertheless, the object of the exercise is to ascertain the legislative intent of the language of the statute and, in this regard, a court cannot attribute to a statutory provision a meaning which the language, understood in the light of its context and statutory purpose, cannot bear: see HKSAR v Lam Kwong Wai at §63 and China Field Ltd v Appeal Tribunal (Buildings) (No.2) (2009) 12 HKCFAR 342 at §36. 196. There are other canons of statutory interpretation that may also be relevant. It is a principle of statutory interpretation that a person should not be penalised except under clear law. Therefore, when considering opposing constructions of a statutory provision, the court presumes the legislature intended to observe this principle and should strive to avoid adopting a construction which penalises a person when the legislator’s intention to do so is doubtful.[141] Similarly, as part of the principle against doubtful penalisation, there is a presumption against the imposition of a statutory interference with freedom of association or of speech without clear words.[142] 197. Before addressing the construction of the relevant provisions, it is helpful to put them in context by reference to the licensing scheme under the PPEO and the material legislative history of that ordinance. F.2 The licensing scheme under the PPEO 198. The PPEO provides a statutory licensing scheme for places of public entertainment. The requirements of the application process under the PPEO and the relevant regulations thereunder establish what can be described as a multi-disciplinary, pre-event risk assessment process in relation to the keeping and use of a place of public entertainment. It is an assessment that enables risks to be identified and precautions to be put in place before a public entertainment takes place. 199. As noted above, it is a criminal offence to keep or use a place of public entertainment without a licence granted under the PPEO. Section 10(1) provides that a licence for the purposes of the PPEO shall be in such terms as the licensing authority[143] determines. Section 10(2) specifies that the licence may be subject to terms and conditions which: specify the period of the licence; specify when the place to which it relates may be used for public entertainment; require specified measures to be taken by the licensee; require the licensee to provide first aid personnel; specify the maximum number of persons which may be admitted to the place to which the licence relates. 200. By section 7(1), the Secretary for Home Affairs may by regulation provide for various matters including: (a) the kinds of entertainment for which places of public entertainment may be licensed and the mode of application, and fees, for licences; (b) the cancellation of any licence; (c) the location of a place of public entertainment generally or on or in any place, building, erection or structure and the circumstances, conditions and restrictions in or subject to which such location may be permitted; (d) the materials of which any place of public entertainment shall be constructed and regulating the construction of such place; (e) the exercise of measures against overcrowding and for the control and prevention of fires and for the maintenance of sanitary conditions in any place of public entertainment; (f) the maintenance of peace and good order in a place of public entertainment; and (g) the entry and inspection for the purposes of securing compliance with the ordinance and regulations of a place of public entertainment. 201. The Places of Public Entertainment Regulations (Cap.172A) (the PPER) have been duly made pursuant to section 7 of the PPEO. The PPER include detailed provisions as to the form of a licence and the manner in which it is to be applied for. Permanent and semi-permanent structures specially designed as theatres and cinemas are dealt with in Part I and other places of public entertainment in Part III. The application form distinguishes between “a place of public entertainment (cinema/theatre)”, to which regulation 3 (in Part I) applies, and “a place of public entertainment (other than cinema/theatre)” and a “temporary place of public entertainment”, to which regulation 162 (in Part III) applies. 202. Regulation 162 provides that a person who desires to keep or use any place of public entertainment shall apply in such form as the licensing authority may specify not less than 42 days before the commencement of the proposed entertainment. If the licensing authority does not reject the application, it is required to forward a copy of the application to various persons, namely (a) the Commissioner of Police; (b) the Director of Fire Services; (c) one of the Building Authority or Director of Housing or Director of Marine (depending on the place to which the application relates); and (d) the Director of Electrical and Mechanical Services (if laser equipment is, or is to be, installed). 203. Regulation 162(3) requires the applicant to supply (unless the application relates to a vessel) not less than 28 days before the commencement of the proposed entertainment: “(a) a plan showing to the satisfaction of the licensing authority the layout of the place towhich the application relates including, in particular, each of the following- (i) each part of the place intended to be used for holding entertainment; (ii) each part of the place intended to be used for seating or otherwise accommodating an audience (if any); (iii) each existing and any proposed exit route from the place; (iv) the position or location in the place of any existing or proposed permanent structure; (v) each part of the place in which it is intended that temporary barriers may be erected or otherwise provided; (vi) the proposed or actual location in the place of all sanitary fitments; (vii) the proposed or actual location in the place of fire service installations and equipment; (viii) all or, as may be appropriate, any 1 or 2 of the following means by which ventilation of the place, or any part thereof, is provided, namely, windows, ducts or any mechanical means; (ix) the proposed or actual location in the place of all laser equipment (if any); … (c) in the case of a temporary structure, diagrams sufficient to illustrate the proposed method of construction and the spacing and scantling of structural members”. 204. Under regulation 162(8) (and subject to the provision of certain specific certificates and plans required under regulation 162(9)), the licensing authority, once notified by each of the persons to whom the application has been forwarded that he has no objection to it, may grant the licence sought. 205. In addition to the pre-event risk assessment process, the PPEO and PPER provide a means by which the keeping or use of a place of public entertainment may be monitored to ensure compliance with the PPEO and PPER. Thus: (1) Regulation 169 gives the licensing authority and various of the other persons to whom the application may be forwarded the right of entry to the place to which the application relates in order to inspect it for the purposes of the PPEO. (2) Regulation 170B provides that: “Where a licence is granted or renewed under these regulations, then for so long as the licence remains in force, the licensee shall exhibit and keep exhibited at all times the licence in a conspicuous position at the entrance or, if there is more than one entrance, the main entrance of the premises to which the licence relates.” (3) Regulation 174(1) provides that: “When it appears to any police officer not under the rank of Chief Inspector or to any other police officer specially authorized in that behalf in writing by the Commissioner of Police that it is necessary so to do for the protection of any person present in a place of public entertainment in an event of emergency, or for the prevention of disorder in the place of public entertainment, it shall be lawful for that officer personally to order that the place of public entertainment be temporarily closed or vacated, and upon any such order being given every member of any audience, and every other person (if any) present at the place of public entertainment shall forthwith comply with it in an orderly manner.” (4) Section 11 of the PPEO enables the licensing authority to apply to a magistrate for a prohibition order (to prohibit the operation of an unlawful place of public entertainment) and a closure order (to close a place of public entertainment where the prohibition order is not complied with). F.3 The legislative history of the PPEO 206. As will be seen, the PPEO has a long legislative history. It has been the subject of numerous amendments, in the nature of incremental reactions to particular policies and events rather than comprehensive reviews of the legislative scheme, which have in turn, extended, restricted or modified the licensing regime. (a) Theatres Regulation Ordinance 1908 207. The PPEO can be traced back to the Theatres Regulation Ordinance 1908 (Ord. No.18 of 1908) which prohibited the having or keeping of “any building, matshed or other place of public resort” for the public performance of stage plays without a licence. (b) Places of Public Entertainment Ordinance 1919 208. The Theatres Regulation Ordinance 1908 was replaced by the Places of Public Entertainment Ordinance 1919 (Ord. No.22 of 1919) – i.e. the PPEO – which was enacted to consolidate and amend the law relating to places of public entertainment. This prohibited the keeping or use of “any permanent or temporary building or matshed” (underlining added) for any public entertainment without a licence. The 1919 Ordinance defined “Entertainment” as including: “any concert, stage play, stage performance, cinematograph display, exhibition of dancing, conjuring or juggling, acrobatic performance, boxing contest, or circus, or any other entertainment of a similar character”; and “Public Entertainment” as meaning: “any entertainment, as above defined, to which the general public are admitted with or without payment for admission.” (c) Places of Public Entertainment Regulation (Amendment) Ordinance 1951 209. The PPEO as enacted in 1919 was amended by the Places of Public Entertainment Regulation (Amendment) Ordinance 1951. This substituted a new definition of “entertainment” as including: “any concert, stage play, stage performance or other musical, dramatic or theatrical entertainment or any part thereof, any cinematograph display, lecture, story-telling, circus, exhibition of pictures, photographs or books, exhibition of dancing, conjuring or juggling, acrobatic performance, exhibition of abnormal persons or animals, any sporting exhibition or contest, any bazaar, any merry-go-round, flying wheel, or other mechanical device designed for amusement”. 210. More importantly, the 1951 Ordinance added a new definition of “place of public entertainment” as meaning: “any place on which there is any erection or structure, any premises or building whether temporary or permanent or any water-borne craft or other place in or at which a public entertainment takes place whether on one occasion or more”; (underlining added) and amended the principal legislative prohibition to one of keeping or using such a place without a licence. 211. As stated in the “Objects and Reasons” (i.e. the explanatory memorandum) of the relevant bill, the Colonial Secretary informed the Legislative Council when moving the bill that the proposed replacement definition of “entertainment” and the interpretation for “place of public entertainment”[144] had the effect of “widening considerably the places and forms of entertainment subject to the control imposed by the Ordinance”. (d) Places of Public Entertainment (Amendment) Ordinance 1970 212. The PPEO as amended by the 1951 Ordinance was further amended by the Places of Public Entertainment (Amendment) Ordinance 1970. This was enacted as a result of various recommendations made in the Report of a Commission of Inquiry to investigate the collapse of the stand at a tattoo held in Sek Kong. The 1970 Ordinance substituted the definition of “place of public entertainment” with a new definition of that term as meaning: “(a) any place on which there is any building, erection or structure, whether temporary or permanent, capable of accommodating the public; and (b) any vessel, in or on which a public entertainment is presented or carried on whether on one occasion or more”. (underlining added) 213. The Explanatory Memorandum to the relevant bill stated that the new definition of place of public entertainment “includes an[y] place on which there is a structure, whether temporary or permanent, capable of accommodating the public, such as a tent or a grandstand, and any vessel.” In moving the bill, the Attorney-General explained to the Legislative Council that the definition of “place of public entertainment” then current (in the 1951 Ordinance) was “wide enough to include a place on which there is no structure capable of accommodating the public, for example, a field which is set aside for a gymkhana” but that this was “unnecessary, since the object of the Ordinance, and of the regulations which are made under it, is to apply appropriate safety standards to buildings and structures used by members of the public attending public entertainments”. The new narrower definition would “in future only include places where a building of some kind, capable of accommodating the public, is erected and also vessels”. (e) Places of Public Entertainment (Amendment) Ordinance 1980 214. The PPEO as amended by the 1970 Ordinance was further amended by the Places of Public Entertainment (Amendment) Ordinance 1980. This amended the definition of “place of public entertainment” to the following meaning, namely: “(a) so much of any place, building, erection or structure, whether temporary or permanent, capable of accommodating the public; and (b) any vessel, in or on which a public entertainment is presented or carried on whether on one occasion or more”. (underlining added) 215. The Explanatory Memorandum to the relevant bill stated that these amendments were “designed to make it clear that a place of public entertainment may be located within a building used also for other purposes and to ensure that the circumstances in which this is done can be regulated and appropriate restrictions and conditions imposed.” Consistently with this, the Secretary for the Environment informed the Legislative Council, when moving the bill, that the existing regulations did not cater for small 500 to 2,000-seat cinemas above ground level in multi-storey buildings and that the aim of the proposed amendment was “to dispel any doubts as to the powers of the Governor in Council to make regulations to provide for the location of places of public entertainment within buildings which are used also for other purposes and to lay down appropriate conditions.” He stated that, if the amendment was enacted, new regulations would be made to “regulate the location of small places of public entertainment, particularly cinemas, in non-domestic multi-storey buildings or the non-domestic parts of such buildings”. (f) Public Entertainment and Amusement (Miscellaneous Provisions) Ordinance 1995 216. The PPEO as amended by the 1980 Ordinance was further amended by the Public Entertainment and Amusement (Miscellaneous Provisions) Ordinance 1995. Relevantly in the context of this appeal, the 1995 Ordinance amended the definitions of “entertainment” to include “any event, activity or other thing specified in the Schedule” and “public entertainment” to mean “any entertainment within the meaning of this Ordinance to which the general public is admitted with or without payment.” It also added the present section 10 providing for the licence for a public entertainment to be subject to conditions. 217. As regards the amended definitions, the Secretary for Recreation and Culture explained to the Legislative Council in moving the relevant bill that the amendment of the definition of “entertainment” was to revise and update the definition by removing outdated forms of entertainment and including laser projection display as a new form of entertainment. As regards the introduction of section 10, the Secretary explained that this was to give effect to relevant recommendations made in the Final Report of the Hon. Mr Justice Bokhary into the Lan Kwai Fong Disaster including crowd control measures and provision of first aid services. (g) Places of Public Entertainment (Amendment) Ordinance 1997 218. The 1995 Ordinance was amended by the Places of Public Entertainment (Amendment) Ordinance 1997. This materially added section 11 to the PPEO relating to prohibition and closure orders (see above). 219. Also in 1997, the PPER were amended by the Places of Public Entertainment (Amendment) Regulation 1997 which added the current regulation 170B concerning the exhibition of the licence (see above). F.4 The context and purpose of the PPEO 220. The context of the relevant provisions of the PPEO includes other provisions of the PPEO itself, including provisions of the PPER addressed above, and the existing state of the law, including other ordinances such as the Summary Offences Ordinance (Cap.228) (the SOO), the Police Force Ordinance (Cap.232) (the PFO) and the Public Order Ordinance (Cap.245) (the POO) relevant to the use of and policing of public places. 221. As to statutory purpose, it is plain from the scheme of the PPEO as well as its legislative history that its essential purpose is the regulation of safety at places where public entertainments are presented or carried on so that the safety of those members of the public attending the various forms of entertainment at those places will be adequately protected. The matters with which the licensing authority is concerned and which may be the subject of conditions in any licence granted, such as structural integrity, mechanical installations, fire precautions, first aid and sanitary fitments, are all clearly directed towards this purpose. That this is the essential purpose of the PPEO is not in dispute and was recognised both by Lam J at first instance[145] and Cheung CJHC in the Court of Appeal[146]. 222. However, it is important to recognise that there are limits to the extent this statutory purpose can be used to construe the PPEO. These limits derive in part from the self-evidently limited nature of the licensing regime imposed by the PPEO. For example, notwithstanding legitimate safety concerns that might exist in relation to forms of entertainment other than those listed in Schedule 1, those other forms of entertainment are not subject to the scheme. Similarly, notwithstanding that large numbers of people may be invited to attend a private entertainment, the PPEO only applies to those places defined as places of public entertainment. As Lord Millett NPJ observed in China Field Ltd v Appeal Tribunal (Buildings) (No.2): “There can be no quarrel with the principle that statutory provisions should be given a purposive interpretation, but there has been a distressing development by the courts which allows them to distort or even ignore the plain meaning of the text and construe the statute in whatever manner achieves a result which they consider desirable. It cannot be said too often that this is not permissible. Purposive construction means only that statutory provisions are to be interpreted to give effect to the intention of the legislature, and that intention must be ascertained by a proper application of the interpretative process. This does not permit the Court to attribute to a statutory provision a meaning which the language of the statute, understood in the light of its context and the statutory purpose, is incapable of bearing”.[147] F.5 Is admission to the place of public entertainment required? 223. We are concerned in this appeal with the meaning of the term “place of public entertainment” because it is the keeping or use of such a place that triggers the requirement for a PPEO licence. The definition is wide and includes any “place”. A place can prima facie be an open space if suitably defined and delineated so that it can be identified.[148] The various locations within the definition, including a suitably defined open space capable of accommodating the public, are places of public entertainment if they are places “in or on which a public entertainment is presented or carried on whether on one occasion or more”. One must therefore have regard to the definition of “public entertainment” in order to identify whether a place is a “place of public entertainment”. A “public entertainment” is defined as any entertainment within the meaning of the PPEO “to which the general public is admitted with or without payment”. 224. On behalf of the Commissioner, Mr Johnny Mok SC[149] contends that the concept of admission only applies to the entertainment rather than the place of entertainment and is therefore only used to distinguish between a public entertainment, to which the PPEO may apply, and a non-public or private entertainment, to which the ordinance does not apply. Admission to the place of entertainment is not, it is contended, required. 225. I accept that the definition of “public entertainment” including the requirement of admission of the public distinguishes a public entertainment from a private entertainment. That is the reason why an entertainment within Schedule 1 of the PPEO which is presented in a private home, even if many people are in attendance, is not a public entertainment. It is also why, if a person were to hire a cinema for the exclusive viewing of a film as part of a private party, the absence of admission of the public would mean the screening of the film was not a public entertainment, however many invitees there were. 226. However, I do not, with respect, accept the Commissioner’s latter contention that admission to the place of entertainment is not required. 227. The PPEO is an ordinance to consolidate and amend the law relating to places of public entertainment and the principal operative provision is a licence requirement for the keeping or using of a place of public entertainment. That licence requirement is directed at those persons who present or carry on public entertainments, albeit not necessarily for financial gain, in respect of their keeping or using places of public entertainment. 228. The definition of “place of public entertainment” is not to be read in isolation and necessarily incorporates the definition of “public entertainment” since that is part of the term itself. A “public entertainment” as defined requires that it be one “to which the general public is admitted”. The requirement that the public be admitted to the place is therefore an integral part of the definition of a “place of public entertainment”. This can be seen most clearly in relation to an entertainment presented or carried on in or on a vessel. The vessel cannot be the place where the public entertainment is so presented or carried on unless the public are admitted onto it. If it were otherwise, there would be no safety concerns for the public relating to the vessel as the place of public entertainment and the legislative scheme for the notification of, among other Government agencies, the Director of Marine would make no sense. That the public must be admitted to the place in question is, in any event, also inherent in the necessity for the “place”, if other than a vessel, to be “capable of accommodating the public”. The accommodation of the public in this context clearly suggests a physical accommodation by reference to the characteristics of the location. 229. As can be seen from the summary of the legislative history above, when the definition of “public entertainment” was introduced in 1919, the only entertainments to which the public could be admitted were entertainments which took place within a structure of some sort (“any permanent or temporary building or matshed”). Admission to the entertainment therefore involved both a locality and admission to that place where the entertainment as defined was to take place. Although the places of public entertainment were widened in 1951, then narrowed in 1970 and again widened in 1980, it was never suggested in any of the relevant explanatory memoranda or speeches in Hansard moving those legislative amendments that the admission of the public to the public entertainment did not involve an admission to a locality. 230. If admission to the place of public entertainment were not necessary, the surprising (and therefore, in my view, unintended[150]) consequence could occur of places which were entirely remote and unconnected to where the actual entertainment was presented or carried on being constituted a place of public entertainment. For example, an entertainment which could be seen or heard from a distance removed from the principal place where the public entertainment was being presented or carried on would give rise to subsidiary places of public entertainment requiring licensing. Spectators of a football match or musical concert who found vantage points outside the stadium or auditorium where the game or concert was being played or performed would, on the Commissioner’s case,[151] be said to be admitted to the public entertainment and the various vantage points, if capable of accommodating the public, could each then be said to be places of public entertainment for which licences would be required. Yet these could be places of which the organiser of the public entertainment in the stadium or auditorium was completely unaware and over which he would have no influence as regards matters of public safety or order. 231. One of the conditions to which a licence under the PPEO may be subject is a condition specifying the maximum number of persons which may be admitted as regards entertainments taking place in the place to which the licence relates.[152] In addition, the concept of admission to the place of public entertainment under the PPEO is reinforced by the statutory restrictions on the unauthorised sale of tickets.[153] Although post-dating the relevant definitions with which we are concerned, these provisions form part of the context of the PPEO in which the provisions under consideration are to be construed. The form of these legislative provisions is incongruous and inconsistent if the definitions in the PPEO are read as not requiring admission to the place of the entertainment and one can legitimately ask why the draftsman framed those provisions in this way if admission to the place of entertainment was not required. 232. I have had the benefit of reading in draft the judgment of Mr Justice Tang PJ which addresses the significance of the words “讓…入場” in the Chinese version of the definition of “public entertainment”. His view on the use of those words in the Chinese definition of “public entertainment” supports the conclusion that admission of the public to the place of public entertainment, and not merely the entertainment, is required. I also note the use of the same word “場” in the Chinese definition of “place of public entertainment”. 233. I therefore conclude that admission to the place of public entertainment is required. That then raises the question of what the requirement of admission entails. F.6 What does the requirement of admission entail? 234. This is the critical question in this appeal. 235. As noted above, the Court of Appeal concluded that insofar as an open space may be a place of public entertainment the requirement that the place be one to which the public is admitted means that the place must be enclosed or cordoned off and the person who is keeping or using the place must have the right and ability to admit or exclude others from it. 236. The Commissioner strongly challenges this conclusion and contends that the Court of Appeal’s construction is too narrow as a matter of language and contrary to the fundamental statutory purpose underlying the PPEO. The PPEO defines “entertainment” very widely to include the list of matters specified in Schedule 1 some of which typically take place both indoors and outdoors and, it is submitted, admission should be construed consistently with the application of the PPEO to these various forms of entertainment. The public interest in ensuring appropriate safety measures are in place is equally strong, if not stronger, the more open and porous to entry a particular place is. Given the PPEO’s purpose of protecting public safety and order, a purposive construction supports the conclusion that control is not necessary. All that is necessary is an area that is defined or delineated. 237. Mr Mok argues that, since admission may be without payment and the PPEO refers only to entertainment to which the public is “admitted” but does not specify who enables admission, the legislative concern was with the fact of public access to or participation in an entertainment and thus public exposure to risks. The Commissioner refers to the dictionary definition of “admit” which includes the meanings, in an involuntary sense, of: “Be open to or compatible with; leave room for”; and “Afford entrance to; have room for”.[154] It is therefore contended that the word “admitted” is capable of being understood in this passive sense and that the words “to which the general public is admitted with or without payment” should be construed purposively as requiring only that the public entertainment is one to which members of the public are afforded or allowed access or in which the public can participate. This construction, it is argued, is entirely consistent with the natural and ordinary meaning of the word “admitted” and will best achieve the PPEO’s fundamental purpose of protecting public safety and order. 238. Since the underlying purpose of the PPEO is accepted to be the protection of public safety and order, must the word “admitted” be construed in the sense the Commissioner contends it should or is it to be construed, as the Court of Appeal concluded, as requiring the person presenting or carrying on the entertainment to exercise control over those who are admitted? 239. There is some justification in a number of Mr Mok’s criticisms of parts of the reasoning of the Court of Appeal for its conclusion on the issue of control. 240. I would accept that little, if any, assistance is to be derived from reliance on either Scott v Cawsey[155] or R v Bow Street Magistrates’ Court, ex p McDonald[156]. 241. In rejecting the Commissioner’s case below, the Court of Appeal relied[157] on a passage in the judgment of Griffith CJ in Scott v Cawsey, a decision of the High Court of Australia, where he said (at p.138): “The term ‘admission,’ however, involves the idea of locality, and of the ability of the person who permits the admission to exclude others from the place of entertainment or amusement except with his consent.” 242. The case concerned a statute prohibiting the use for “public entertainment or amusement” on a Sunday of “a house, room, or other place” to which persons were “admitted by the payment of money”. Payment was required for admission to the railed-off part of a larger room, to which entrance was free, in which a public entertainment was given. The statutory context and purpose was therefore very different to that of the PPEO, being aimed at persons seeking to profit from holding entertainments in premises under their control rather than public safety and order. Therefore, although suggesting that the natural and ordinary meaning of “admitted” implies control, the case provides no direct assistance on a purposive construction of the word “admitted” in the PPEO. 243. Before Lam J, the first instance decision of Dyson J[158] (as he then was) in R v Bow Street Magistrates’ Court, ex p McDonald was relied on by the Commissioner to support the submission that the use of a place need not carry with it the right of control.[159] That case concerned the issue of whether the licensing requirements under the London Government Act 1963 applied to a busker’s use of Leicester Square to play the guitar. The Act prohibited the use of any premises, which were defined to include any place, for public entertainment without a licence. Dyson J rejected the argument that the busker could only be using Leicester Square for public entertainment if he had control of the place. The busker therefore required a licence. 244. However, Dyson J’s judgment had been reversed on appeal and, unfortunately, the English Court of Appeal’s judgment was not cited to Lam J.[160] The English Court of Appeal reversed Dyson J on the basis that the Act was not designed to be applied to a person playing his guitar in a public place to which the public had access but over which the local council had innumerable powers. 245. In the Court of Appeal, Cheung CJHC referred to ex p McDonald to illustrate the proposition that, absent a special arrangement with the Government, a public street is inherently inapt to be a place of public entertainment.[161] 246. I do not think either judgment in ex p McDonald sheds light on the meaning of the word “admitted” in the PPEO. The relevant provision in the London Government Act 1963 did not require the public to be admitted either to the public entertainment or the place where the public entertainment was presented or carried on, as is required in relation to the PPEO. In any event, it was concerned with the particular factual position of a busker, which normally speaking would not give rise to the same concerns of public safety or order as a more substantial public entertainment involving, for example, the construction and use of a stage. 247. Nor do I think the Court of Appeal’s reliance on the licensing requirements that might be imposed, in particular the conditions to which a licence might be subject under section 10 of the PPEO, demonstrates that the regime “simply cannot work if the organiser or performer has no ability to control admission”.[162] Those conditions are not mandatory and their imposition will, in any given case, depend on the circumstances of the particular place of public entertainment.[163] That some of those conditions might not be appropriate for an open space in a public street does not mean the scheme of pre-event risk assessment cannot be applied to such a place, nor that the need for such a risk assessment might not exist. Similarly, I do not share the Court of Appeal’s view that unless a public street is suitably enclosed or cordoned off, compliance with regulation 170B of the PPER is impossible.[164] 248. Notwithstanding those criticisms of the Court of Appeal’s reasoning, I have nevertheless, for the following reasons, reached the conclusion that the requirement of admission does require some form of control over the admission of persons to the public entertainment and the place where it is being presented or carried on and, as a corollary, a right of exclusion from that place. 249. It is true, as the Commissioner contends, that the purpose of the PPEO is to promote public safety and order and there is undoubtedly a need to regulate crowds in public places. The Lan Kwai Fong disaster on New Year’s Day in 1993 was referred to in the Commissioner’s submissions to demonstrate this need and the point was made that a PPEO licence had been issued in respect of an entertainment event which formed part of the activities resulting in the tragedy. The circumstances in which that licence was granted are not known and it cannot be assumed that the organiser of that particular entertainment for which the licence was granted did not have sufficient control over entry, so reliance on the fact of the licence having been granted cannot assist in resolving the construction issue in this appeal. In any event, more importantly, as I have already said, there is a limit to purposive construction in that a court cannot attribute to a statutory provision a meaning which the language, understood in the light of its context and statutory purpose, cannot bear. In the case of the PPEO, the statutory purpose of promoting public safety and order would be an argument in favour of a licence requirement in respect of all forms of entertainment that might draw a crowd in any place. Plainly, however, this would not be justified on the statutory language. 250. In its natural and ordinary meaning, in my opinion, the word “admitted” suggests an active sense of giving permission to enter or have access or letting a person in. This is so even if one considers an entertainment rather than a place as the object of the admission, but it is all the more so if admission is to a place (as I have concluded above). It is certainly an unusual use of the word “admitted” to convey a sense of merely having access to or being exposed to or having an ability to participate in an entertainment. The wording of the definition would otherwise be adequate and more naturally expressed if it referred to a public entertainment being one to which the general public “has access to”, “is exposed to” or “can participate in”. The concept of admission would normally, in my view, connote something more than that. 251. It was suggested that the additional words “with or without payment” following the phrase “to which the general public is admitted” support the argument that control of admission is unnecessary. If payment for admission to the entertainment were required, a contrary answer would be clear since there would need to be some control mechanism for this and non-payment would plainly lead to exclusion. However, the obverse is not the case. Even though admission may be without payment, this does not point inevitably to the conclusion that no form of control of admission is required. It remains necessary to ascertain the legislative intent of the words “to which the general public is admitted”. 252. Here again, it is relevant to refer to the legislative history. The phrase “to which the general public are admitted with or without payment for admission” (emphasis added) was part of the original definition of “public entertainment” in the PPEO as enacted in 1919. As I have already observed, the places which then required licensing were all structures into which one would have to be physically admitted. There is no reason to think that the word “admitted” would then have been understood as bearing only a passive sense of having access. The active sense of the word was clear, in particular given the qualification that it mattered not whether payment was required “for admission”.[165] When the definition of “places of public entertainment” was widened in 1951, then narrowed in 1970 and then widened again in 1980, the same definition of “public entertainment” including the word “admitted” remained. There is no reason to think that the word “admitted” varied in its meaning depending on whether a place of public entertainment was limited to a structure, in which case it bore an active sense of admission, or was not so limited, in which case it bore a passive sense of admission. This change would have been significant and there is nothing in any of the admissible extrinsic materials to suggest it did change its meaning in this way. 253. In this regard, I again respectfully refer to the views of Mr Justice Tang PJ as to the significance of the words “讓…入場” in the Chinese version of the definition of “public entertainment”. His view on the import of those words strengthens the above conclusion that, based on the English word “admitted”, the PPEO contemplates that someone must be admitting members of the public to the entertainment in the active sense of permitting them to enter and, as a corollary, exercising the ability to exclude others. 254. I have referred above to the surprising consequence of places unconnected with the presentation or carrying on of an entertainment being places of public entertainment if admission to the place of the entertainment were not required. If admission of the public to an entertainment did not imply some control over admission or exclusion, other surprising and, in my view, unintended results would follow. 255. It would mean that any busker performing in a place to which the public had access would require a PPEO licence. It is correct that a busker may be covered by a licence issued by the Commissioner and therefore not liable to prosecution for a nuisance committed in a public place under section 4(15) of the SOO[166], but there is nothing in the SOO or PPEO that suggests that a licence under section 4(15) of the former relieves the busker from an obligation to obtain a licence under the latter. The two ordinances are directed at different concerns and are not mutually exclusive regimes of control. On the Commissioner’s construction of “admitted”, a busker playing in a delineated portion of a public space and attracting a crowd of passers-by would be performing in a place of public entertainment and so require a licence. I do not think it is an answer to say that buskers are not within the scheme of the PPEO because they do not generally attract large crowds and so do not engage public safety concerns. The applicability of the PPEO licensing regime is not predicated on a particular number of people being admitted. 256. The nightly laser projection display from a number of buildings in Central and Kowloon, watched by members of the public from various vantage points, would give rise to numerous places of public entertainment in open public areas subject to no control of the organisers of the display.[167] Mr Mok informed the Court that the laser display is organised by the Leisure and Cultural Services Department (LCSD). Whilst a place that is under the management of the LCSD is exempt from the operation of section 4 of the PPEO,[168] this exemption would not prevent the consequence that each of the various public spaces not managed by the LCSD where crowds might gather, and are encouraged to gather, to watch the display would be places of public entertainment and thus require a licence. Again, I do not think it is an answer to say that there is no public safety concern in relation to any of those places since that is purely a matter of assumption and, in any event, the basis for the imposition of the licence requirement is the keeping or use of a place of public entertainment and not the keeping or use of a place about which there are safety concerns. The pre-event risk assessment is designed to determine if there is a risk and, if so, what measures might be required to mitigate that risk. 257. A vessel on which an orchestra was playing (but on which no audience was present) would not itself be a place of public entertainment but any public spaces on shore or another vessel in no way controlled by the organisers of the orchestra performance where the music could be heard by members of the public would be. 258. It is not uncommon to see gatherings of domestic helpers and others in various public spaces on Sundays when impromptu and informal dancing and singing performances take place which could attract passers-by to watch. On the Commissioner’s case, those places would then become places of public entertainment and the dancers or singers would need a licence under the PPEO to use them. 259. These examples of surprising consequences of construing “admitted” as merely meaning having access to or being exposed to or being able to participate in an entertainment demonstrate, in my view, that there is, at the very least, a measure of doubt as to whether these situations are truly intended to be subject to the PPEO licence regime. Who would be responsible for applying for a PPEO licence in these cases? It would not be a principled approach to the construction of the PPEO for the answer to this question to depend on subjective factors such as the intention of the organiser of the entertainment. How, given the degree of detail required to be provided to the licensing authority, could the application in these cases be meaningfully made by the organiser? Why, in the case of buskers or other informal entertainments, should the application of the licensing regime depend on speculation as to the number of persons who might attend? It is not satisfactory to say that these surprising consequences could be avoided by the grant of exemption orders under section 3A(1) of the PPEO[169]: those orders would be dependent on the exercise of administrative discretion; in any event, they would apply to particular places, not forms of entertainment. 260. In this regard, it is of significance, in my opinion, that the imposition of a licence requirement on the keeping or use of a place of public entertainment entails an interference with the constitutionally protected freedoms of assembly and expression.[170] Since clear words are required to effect any such restriction, I would prefer to resolve these real doubts as to meaning in favour of the construction that does not amount to a restriction of the relevant right. 261. Similarly, since a failure to obtain a licence for the keeping or use of a place of public entertainment constitutes a criminal offence, the principle against doubtful penalisation would tend to favour adopting the construction of two competing constructions which does not give rise to a risk of prosecution. 262. For these reasons, I have come to the conclusion that the word “admitted” is to be construed in an active sense and as requiring that, for a place to be a place of public entertainment, the person presenting or carrying on the public entertainment must be able to control admission to the place where the entertainment is being presented or carried on. Although this construction is narrower than that urged on us by the Commissioner, for the reasons I have given and notwithstanding the statutory purpose of the PPEO, I do not think the wider construction is justified. F.7 Unless admission can be controlled, the PPEO cannot apply to a public street or other publicly accessible open space 263. In the course of his oral submissions on behalf of the Respondent, Mr Hectar Pun[171] appeared to suggest that the PPEO could only apply to private premises and not to any public place and therefore could not apply to a public street. However, this was inconsistent with the position taken in the Respondent’s printed case that a PPEO licence could be granted in respect of an entertainment in a public street.[172] 264. There is certainly some basis for questioning whether the PPEO was intended to apply to a public street or any other public place to which the general public has an unrestricted right of access under the general law. As a matter of ordinary language, it is odd to speak of the public being admitted to either and the legislative history of the PPEO does not suggest this particular issue has been considered by the Legislature. 265. On the other hand, there is nothing in the PPEO to suggest that it could not apply to an appropriately defined and delineated place in a publicly accessible open space in respect of which a person presenting or carrying on a specified entertainment could control admission. For some open public spaces, such ability to control admission might be conferred by the terms of a particular licence arrangement, e.g. in the case of the use of part of a public park. In practice, this might require the place of the public entertainment to be enclosed or cordoned-off but, depending on the particular place, control of admission might be possible without any such enclosure or cordoning-off.[173] 266. So far as a public street is concerned, the respondent’s concession that control over admission could be exercised was premised on the grant of a licence under the PPEO. This reasoning is obviously circular since, on my construction of the relevant provisions, the ability to control admission is a necessary pre-condition to the making of an application for a licence. Since the public has a right of way over a public street, it is difficult to see how control over admission of members of the public could lawfully be exercised. Absent some other basis for exercising control over admission by members of the public to a public street, the PPEO licence regime cannot apply to an entertainment presented or carried on in a public street. 267. Using a public street to present or carry on an entertainment would, depending on the scale of the entertainment, very likely constitute an obstruction or otherwise be unlawful under the SOO or POO. In that case, the organiser or performer would almost certainly run the risk of being required to stop the entertainment and of being prosecuted for public nuisance or obstruction. Although this may be a reactive means of addressing a situation in which public safety concerns may arise, I do not regard this as being intrinsically inadequate and it does not persuade me that the provisions of the PPEO require the word “admitted” to be construed unnaturally in order that the PPEO scheme can then be applied to a public street. If it is thought that this conclusion leaves a lacuna in the law, that is a matter for the Legislature to address by legislation. F.8 The public was not admitted to the place of public entertainment in this case 268. In the Commissioner’s printed case, it is argued that, in any event, the public was admitted to the entertainment here in a sufficiently active sense because the Organisers chose the venue, actively invited the public to attend, arranged the event in such a way as to limit their exclusionary control and continued to exercise control by the provision of marshalls. 269. That argument of the Commissioner is premised on the rejected contention that what is required is only admission to the public entertainment and not the place of public entertainment. In the present case, Lam J found that the Organisers did not have the power to exclude other persons from the pedestrian precinct in Lockhart Road.[174] 270. It follows that the public was not admitted to the pedestrian precinct in Lockhart Road where the dance performance presented as part of the 7th IDAHO event was presented or carried on. The pedestrian precinct was therefore not a place of public entertainment under the PPEO and the Organisers did not require a licence for its use. F.9 PPEO not ousted by the availability of general police control 271. In answer to the Commissioner’s argument for a wider application of the PPEO to a place over which the organiser of a public entertainment has no control, the respondent sought to argue that there was no useful purpose in applying the licensing regime in the PPEO to a public street given the existing powers of the police to regulate activities there. The powers relied upon were those under the SOO[175], the PFO[176] and the POO[177]. 272. I do not accept this argument, which may have been advanced in order to support the contention, relevant were the constitutional issue to have arisen for decision, that the restrictions constituted by the PPEO were not necessary. The powers to be exercised by the police under those ordinances all plainly serve very different purposes to those addressed by the PPEO. None of the other ordinances address the matters with which the PPEO is concerned, nor in the same manner or degree of detail. Public safety and order may be affected by matters governed by the specific concerns of the PPEO licensing regime and which are different to those matters which give rise to the powers under the SOO, the PFO and the POO. 273. Nor do I accept the Respondent’s argument that, if a PPEO licence has been obtained in respect of a public place, the police’s other general powers over that place are ousted and instead then limited to the powers under PPER regulations 169 or 174 (see above). In my view, that argument is untenable. Those other general powers continue to exist even where a PPEO licence is granted over a defined area of a public place. G. Disposition 274. The construction issue being decided in favour of the respondent, it is not necessary to address the constitutional issue and, for the above reasons, I would dismiss the appeal. Lord Neuberger of Abbotsbury NPJ: A. Introductory 275. The issue of principle raised by this appeal is whether a licence under the Places of Public Entertainment Ordinance (Cap 172), the PPEO, is required for an entertainment which is presented or carried on in an area which is wholly comprised in a public street. 276. The relevant facts, the legislative history of the PPEO, the relevant provisions of the PPEO, the Regulations made thereunder, the PPER, and the history of these proceedings are fully set out by Ribeiro PJ in paras 14-40 and 98-99 of his judgment and by Fok PJ in paras 171-193 and 198-219 in his judgment, and I gratefully adopt what they say. 277. The issue which is raised by this appeal is difficult to resolve, as is apparent from the difference of opinion between the Chief Justice and Ribeiro PJ on the one hand, and Tang and Fok PJJ on the other. The difficulty is in my view attributable to a number of factors. First, there is the imperfect drafting of the present version of the PPEO, which I think is partly caused by the draftsman making of successive substantial piecemeal amendments to legislation, without then fully considering the resulting legislation as a whole. Secondly, and in fairness to those responsible for drafting the PPEO, the exercise of deciding how to define precisely what sort of arrangements should fall within the ambit of the PPEO is an inherently difficult exercise. Thirdly, I suspect that it simply did not occur to those responsible for drafting the PPEO that entertainment of the sort which they had in mind would be provided, or at least exclusively provided, on land over which a public right of way existed. Fourthly, the wider interpretation, as favoured by the appellant Commissioner of Police, appears to result in the PPEO extending to activities which many people would have expected to be outside its ambit, whereas the respondent’s narrower interpretation seems to mean that activities which one might have expected to be within its ambit are excluded from it. B. Statutory interpretation 278. Having said that, it is of course necessary to interpret the PPEO in order to resolve the issue raised on the appeal. The issue is one of statutory interpretation, and I agree with Ribeiro PJ and Fok PJ that the statutory language must be interpreted in the light of its context and purpose, as laid down in the cases to which he refers in paras 48 and 194 of their respective judgments. However, as Fok PJ says in para 195, that should not be seen as a judicial licence to ignore or refuse to give effect to the words which the legislature has chosen to use: when construing an Ordinance, the court is an interpreter not a legislator. When considering what is sometimes referred to as a purposive approach, it is salutary to bear in mind what was said by Lord Millett NPJ in China Field Ltd v Appeal Tribunal (Buildings) (No 2) (2009) 12 HFCFAR 342, para 36, quoted by Fok PJ at para 222 of his judgment. 279. So far as the facts of the instant case are concerned, it is clear that what was involved constituted “entertainment”, that it was “presented” in a “place”, and that the presenters did not (for the reasons given by Fok PJ in paras 268-270 of his judgment) have control over who attended or saw the entertainment. Accordingly, the issue may, I suppose, be said to turn on the meaning and effect of a single word, namely “admitted”, in section 2 of the PPEO. As I have mentioned, the meaning of that word ultimately turns on its context. As Lord Hoffmann famously said, “No one has ever made an acontextual statement” - Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46, [2005] RPC 9, para 64. 280. In this case, the immediate documentary context of the word “admitted” is that it is in the definition in section 2 of the PPEO of “public entertainment”, namely “any entertainment … to which the general public is admitted with or without payment”; and that expression is in turn incorporated in the definition in the same section of “place of public entertainment”, which is what must be kept or used in order for a licence to be required under section 4 of the PPEO, the section which the Commissioner contends is engaged in this case. Sections 2 and 4 must themselves be interpreted by reference to any other relevant provision of the PPEO. 281. However, that is only the documentary context. One must also take wider matters into account as part of the context, namely the purpose of the PPEO, practicalities, common sense, the existing state of the law (including other Ordinances), any Explanatory Memorandum, and any authoritative statement to the Legislative Council. A number of cases suggest there are also certain canons of statutory construction, such as the principle that legislation which creates a criminal offence or interferes with fundamental rights should be narrowly construed, but such factors are often of limited value, as they frequently do no more than discourage a court from giving such legislation a wider meaning than that which it naturally bears. 282. Bearing in mind the potentially many factors which fall to be taken into account when interpreting legislation, it is perhaps inevitable that the interpretation process involves what has been called an iterative process, checking the rival interpretations against the words themselves, and the documentary and wider contexts of the sort briefly summarised above. C. The meaning of the word “admitted” in its documentary context 283. Starting with the centrally relevant words, I consider that, if the general public has the right to view entertainment because it is being presented in a street to which any member of the public has a right to be present, then it is not a natural use of words to describe the entertainment as being entertainment “to which the general public is admitted”; and that view is reinforced a little by the immediately following words “with or without payment”. I accept that the entertainment in a case such as this is presented to members of the public, because they can view it as of right given that they are entitled to be where the entertainment is presented. However, the statutory words carry with them the notion of members of the public being permitted by someone, with a legal right to refuse entry, to enjoy the presentation of the entertainment. To refer to a person being “admitted” to somewhere or something at which he or she already has an established legal right to be present would involve an unusual use of the word “admitted”. In particular, to refer to members of the public being admitted onto a public highway is not a natural use of the word “admitted”. 284. I understand from paras 166-167 of the judgment of Tang PJ that this view is consistent with, and indeed receives even greater support from, the Chinese language version of the PPEO. However, although the appeal was argued purely by reference to the English language version, it is right to bear in mind that the Chinese version has equal status - see section 10B of the General Clauses Ordinance (Cap 1), quoted by Ribeiro PJ at para 82 of his judgment. The fact that the Chinese version post-dates, and was presumably based on, the English version does not, in my view, prevent section 10B from applying: otherwise, one would be implying an exception into a statutory provision, a course which is only to be taken when it can be shown to be necessary in order for the provision to be workable or to make sense. 285. The application of what I regard as the natural interpretation in the present case appears to me to be reinforced by the fact that the entertainment with which we are concerned took place in a public street, where, not only does the public have a right to be present, but it must be questionable whether the presenters had a right to erect a substantial stage or to present an entertainment which may well have impeded the use of the street for a public pedestrian right of way - see the discussion in Yeung May Wan v HKSAR (2005) 8 HKCFAR 137, paras 41-44, as to what activities can lawfully be carried on in a public highway. 286. Nonetheless, I accept that it is not a positive abuse of language to describe the general public as being “admitted” onto a public highway by the general law. However, I do not consider such a passive meaning to be a normal use of the word “admitted”, particularly in the context of the definition of “public entertainment” in section 2. Indeed, the natural, active, reading of “admitted” in the context of sections 2 and 4 is that it is the presenter of the entertainment who is envisaged as being responsible for, or controlling, admission - a view which gets some support from section 10(f), which entitles any licence to “specify the maximum number of persons which may be admitted [to the relevant] place”. 287. I also agree with the point made by Fok PJ at his para 252, namely that the contention that “admitted” should be given what I regard as its natural meaning is supported by the fact that the words “for admission” were included after the words “with or without payment” in the definition of “public entertainment” from 1919 until they were removed in 1995. The inclusion of the words “for admission”, as I see it, emphasised that the concept of admission was being used in its active sense rather than its passive sense. I do not consider that it would be realistic to attribute to the draftsman in 1995 an intention to change the whole notion of what was meant by admission. It is a very unlikely notion, bearing in mind the other amendments made in 1995 and the absence of any reference to such intention in any contemporaneous document, coupled with the fact that the words “for admission” were retained even after the widening of the definition of “place of public entertainment” in 1980. D. Admission to public entertainment or to the place of public entertainment 288. As Ribeiro PJ points out in paras 54-57 of his judgment, the concept of admission in section 2 of the PPEO is tied to the definition of “public entertainment”, as opposed to “place of public entertainment”. However, I do not consider that this undermines the force of the linguistic argument which I have so far been considering, for the reasons given in the next four paragraphs. Indeed, if the point is significant, it seems to me that, if anything, it tends to reinforce the view I have expressed, for the reason given in para 289 below. 289. The first reason why it makes no difference that the admission referred to in section 2 is to public entertainment, at least in a conventional case such as the present, where there is a live musical, dramatic, or similar staged performance, is that there is no real practical distinction between admission to the place of entertainment and admission to the entertainment. In that sense, admission to entertainment differs from admission to membership of a club or to the Bar or to residency status, which are the examples given by Ribeiro PJ in his paras 78-80 (all of which I believe involve the use of the word “admitted” in its natural sense). One can be admitted to all three of these institutions without having to be in a physical place, but that is not true where one is concerned with admission to entertainment. Accordingly, in agreement with Fok PJ, as a matter of ordinary language, at least to my mind, admission to the entertainment still naturally conveys the notion of being permitted entry to a place where the person who is admitted can enjoy the entertainment. 290. Secondly, the definition of “place of public entertainment” incorporates the definition of “public entertainment”. Accordingly, in agreement with Fok PJ at para 228 of his judgment, it appears to me that the requirement that the general public be admitted is integral to the place where the entertainment is “presented”, particularly as the PPEO is concerned with licensing places of public entertainment, not public entertainment. I note in this connection that the only place in the PPEO where “public entertainment” is referred to without being immediately preceded by the words “place[s] of”, apart from the definition of “public entertainment” in section 2 itself, is in section 10(2)(b), which refers to a “place … used for public entertainment” (and anyway section 10 was only added in 1995). Accordingly, examination of the terms of the PPEO shows that, as is apparent from its title, its whole thrust is directed to places of public entertainment rather than to public entertainment. 291. Thirdly, if the appropriate test was whether the public was admitted to the entertainment rather than the place of entertainment, the problems which Fok PJ identifies in para 230 of his judgment would arise. 292. Fourthly, quite apart from the point made in para 283 above, it appears to me that it is in any event unsafe to rely on the fact that the reference to admission is in the definition of “public entertainment”, rather than “place of public entertainment”, in the light of the legislative history of the PPEO as explained by Fok PJ at paras 208-220 of his judgment. The definition of “public entertainment” has remained effectively unchanged since 1919, and it was only in 1951 that “place of public entertainment” was defined: until then the requirement for a licence was limited to entertainments in a “building or matshed”. Accordingly, it seems tolerably clear that the PPEO initially equated admission to the place with admission to the entertainment. Of course, amendments to one statutory provision can have a consequential effect on another statutory provision, but one must be cautious of imputing to the legislature an intention to change the meaning of an existing provision, when it has not amended its wording. 293. If, however, the distinction between entry to the place and entry to the entertainment is significant, then, if anything, I think it tends rather to reinforce the view that, if the entertainment is presented on a public highway, it is not a natural use of the word to say that the public are thereby “admitted” to it. If one is talking about admission to the place, the public have a right to be there as a matter of public law: to that extent, albeit employing a non-natural use of the word, they can be said to be “admitted” to the place as a matter of public law. But public law does not give the public the right to see the entertainment: it is merely because they have the right to be on the street that the public happen to be able to see the entertainment. That seems to render the notion of “admission” even less appropriate as a matter of language on the Commissioner’s construction. It is true that it is the presenter of the entertainment who chooses to present it to the public in this way, but that point in no way assists the Commissioner’s argument, because it still does not involve giving a natural meaning to the word “admitted”. E. Conclusion on the natural meaning in the documentary context 294. I do not consider that much further assistance can be obtained from the wording of the PPEO. There is some, but pretty limited, force in the respondent’s reliance on section 6(1), which forbids the sale of tickets to a place of public entertainment “in any public thoroughfare”. It suggests, albeit faintly and by negative implication, that the PPEO was not concerned with entertainment on such land. There is also a little force in the respondent’s reliance on section 7(1)(g), which enables regulations to “provide for … entry and inspection for the purposes of securing compliance with this Ordinance … of a place of public entertainment”, and section 10(f), which is quoted above. Those provisions tend to support the notion that the PPEO was concerned with places over which the licensee could control entry, but they are not expressed so as to apply of necessity to every place which is licensed, and section 10 was, as mentioned above, added relatively recently. 295. It appears to me, therefore, that the natural meaning of the PPEO, at least if one confines oneself to the provisions of that Ordinance, is that it does not extend to entertainment such as that presented in the instant case, because the entertainment was entirely presented on land on which the general public had every right to be present. Nonetheless, the notion that one could describe the general public as being “admitted with or without payment” to entertainment which is “presented” in a location to which the general public has free access as of right in any event, does not appear to me to be fanciful, as Ribeiro PJ demonstrates in para 75 of his judgment. However, particularly where the entertainment is being presented in a public street, I remain of the view that such a description does not, in my opinion, involve a natural use of language, particularly in the context of the PPEO. F. The objection to the natural meaning 296. Casting one’s eyes more widely, the obvious objection to what I consider to be the natural interpretation in the light of the terms and history of the PPEO is that it means that the public safety concerns which gave rise to, and justify, the Ordinance, would not apply to entertainments which are presented on the public highway, or (probably) on any land to which the public has access as of right. The importance of those concerns is apparent from the terms of the PPEO, and it is, I think, such concerns which ultimately, and understandably, persuade the Chief Justice and Ribeiro PJ to reach the conclusion that the PPEO should be construed more widely, as the Commissioner contends, so as to apply to entertainments held in such locations. 297. There is obvious attraction in that view, but in the end I do not regard it as sufficiently strong to displace the natural meaning of the definitions in section 2 of the PPEO. I do not regard the consequences of the narrower construction advanced by the respondent as especially surprising, particularly in the light of the following factors, all of which therefore tend to reinforce the conclusion that what I regard as the natural meaning is the correct meaning. G. Further reasons for adopting the natural meaning 298. First, just as it may be said that the narrower interpretation results in the exclusion of certain performances which one might expect to be included, so would the wider interpretation lead to certain performances which one would expect to be excluded. Buskers are an obvious example: I agree with Ribeiro PJ at his para 123 that it would be “incongruous” if they were within the reach of the PPEO. To counter this problem, it is suggested that, as buskers need a permit under subsection (15) of section 4 of the Summary Offences Ordinance (Cap 228), the SOO, they would be impliedly excluded from the PPEO. I cannot agree. First, section 4 of the SOO and the PPEO are concerned with different things, the one “nuisance in public places” and the other with public safety. Secondly, as section 4(15) of the SOO refers to “play[ing] a musical instrument in any public street or road”, it must extend to a pop group or even an orchestra, and it cannot reasonably be imagined that, if the Commissioner is right, it was intended to exclude them from the ambit of the PPEO. 299. Secondly, if the PPEO had the wider effect for which the Commissioner contends, its reach would be rather uncertain, which is plainly undesirable, particularly for an Ordinance which has potential criminal sanctions. Thus, if a group of people gather in a public place for relaxation on a Sunday and decide to dance for fun or to have some informal and impromptu beauty pageant, for the amusement of anyone who passed, it is hard to see why the PPEO would not apply, as the public would, whether the organizers wanted it or not, be “admitted” on this wider interpretation. One way round that suggested by the Commissioner was that, if the performers did not intend the public to be “admitted”, the PPEO would not apply, but that seems to me to be wrong in principle and a recipe for uncertainty. Similarly, if a laser display on a building could be seen in many different public places, either side of the harbour, it would be very hard to identify the “place” of entertainment, if the wider interpretation was right. In answer, it was suggested that if the “place” was very large or uncertain, the PPEO would not apply, but, once again, that seems to me to be both arbitrary and unpredictable. 300. It was also suggested that, if activities such as those mentioned in the preceding two paragraphs were within the PPEO, then the solution is that they could (and maybe impliedly should) be exempted under section 3A of the PPEO. I do not consider that that is a particularly satisfactory answer in principle or in practice. In principle, although it has some force, I am not attracted to the notion that a concern that a particular meaning leads to an Ordinance applying to functions which one would expect to be excluded from its ambit, can be disposed of by invoking an unfettered administrative power in the Ordinance to exempt certain functions from its ambit. In any event, in practical terms, section 3A grants a power to exempt specified locations, not specified functions, from the PPEO, and therefore I do not consider that it would really help the Commissioner’s case anyway. 301. Thirdly, the PPEO does not apply to an entertainment, however many people may be present and whatever safety implications there may be, if the entertainment is not open to the public. Accordingly, the draftsman of the PPEO appreciated, indeed must have intended, that its reach would not extend to an entertainment to which the public was not admitted, even though the number of invitees might be very considerable. Thus, it cannot be said that the purpose of the PPEO was to ensure that all entertainments were to be subject to its provisions; it must have been realized that many very large gatherings, which could give rise to safety concerns, would be excluded from its ambit. In my view, that tends to undermine the notion that a court should strive to give the PPEO a wide, rather than a narrow, reach. 302. Fourthly, where entertainment is presented at a location to which the public has access as of right, there are Ordinances which enable the authorities to exercise a significant degree of control, which would not, at least normally, be available to them if the entertainment was presented in a private location, ie one to which the presenter or someone else could control admission. I have in mind in particular sections 6(1) and 17(2) of the Public Order Ordinance (Cap 245), the POO, which bestow on the police a degree of control over “public gatherings” (which are defined in section 2(1)), and section 6(2) which also gives them a degree of control over many entertainments in public places. The nature and degree of control under the POO would, I accept, normally be significantly less effective than that accorded by the PPEO for a number of reasons, but the appropriate degree and nature of the control over public activities in different circumstances seems to me to be a matter for the legislature rather than the judiciary. 303. Fifthly, if one looks at the history of the PPEO more broadly than I have done so far, it seems to me rather to confirm the narrower reading which I favour. As already mentioned, until 1951, the Ordinance only applied to buildings and matsheds, and accordingly it seems clear that the entertainments to which the general public was envisaged by the draftsman as being into a building or matshed over which the occupier of the structure or the presenter of the entertainment could control admission. When the reach of the Ordinance was extended in 1951, restricted in 1970 by going more or less back to where it had been before 1951, and then extended again in 1980, the definition of “entertainment” remained unchanged. As I have already indicated, it seems unlikely that, in the absence of any amendment to the definition and in the absence of any relevant suggestion in any Explanatory Memorandum or in any statement to the Legislative Council, the draftsman intended that the concept of “admitted” in the definition of “public entertainment” should change its meaning. 304. Sixthly, as pointed out by Fok PJ in argument, a relatively narrow meaning is supported by the reference to “vessel” in para (b) of the definition of “place of entertainment”. If the entertainment consisted of music being played on a ship in the harbour, and the public, while not permitted to be on the ship, could enjoy the music from the shore, it seems to me that the ship alone would be the relevant “place”. In addition, as Fok PJ explains at para 228 of his judgment, the reference to vessel also supports the notion that the draftsman had in mind admission to the place of entertainment. 305. Seventhly, it would not in any event be surprising if the draftsman of the PPEO had taken the view that there was no need to cater for entertainments which were presented in an area where the public had a right of way. Particularly before 1999, there must have been considerable doubt whether a live show, whether drama, music, dance, reading or anything else, could be presented in a public thoroughfare. The decision of the House of Lords in Director of Public Prosecutions v Jones [1999] 2 AC 240 is of some significance in this connection. The English Divisional Court decided in 1997 that a public demonstration on a public highway was a public nuisance because it was an impermissible use of the highway. In the House of Lords, two of the five Law Lords agreed, although the majority held that such a use was permissible provided that it was both reasonable and not inconsistent with the ability of the public to pass and repass - see at [1999] 2 AC 257E, 281A-H, and 286H-287A). It is also worth noting that all three Law Lords in the majority appear to have thought that they were developing the law - see per Lord Irvine of Lairg LC at 254H, referring to “the law today”, Lord Clyde at 279G, referring to the fact that “the law may develop and change”, and Lord Hutton at 286H, who considered that the existing law was thereby being “extended”. 306. It therefore seems quite likely that those responsible for drafting the PPEO believed that no relevant public entertainment could be lawfully carried on and presented on land over which the general public had a right of way, as it would not have been a permissible use of such land, as indeed the Divisional Court and two Law Lords apparently would have thought. That real possibility appears to me to reinforce the point that a court should not strain the natural meaning of the definition in question to extend it to such entertainment, particularly bearing in mind that the court’s role is to interpret and not to legislate. 307. Eighthly, there is the fact that the PPEO (i) interferes with the fundamental right of freedom of expression, and (ii) creates (albeit contingently, namely if a place of public entertainment is kept or used without a licence) a criminal offence. In the present context, I do not find these factors of much weight, except, as I have mentioned, to provide support for the view that we should not give the words at issue a wide meaning if that is not their natural meaning, particularly if it leads to uncertainty. I. Four ancillary points 308. Finally, I should mention that there was some discussion about whether, if (as I have concluded) the respondent’s case is correct, (i) the PPEO could never apply to a public highway or other public location, (ii) if it could so apply, the “place” concerned would have to be cordoned off in order for the PPEO to apply, (iii) the PPEO would apply if the presenter cordons off or otherwise encloses the land even if he had no right to do so, and (iv) a presenter of entertainment which was not within the ambit of the PPEO could, as the respondent suggested, voluntarily apply for a licence thereby bringing the entertainment within the reach of the PPEO. I do not consider that it is necessary to address any of those points in order to dispose of this appeal, but, as some time was devoted to them, I will briefly express a view. 309. As to point (i), this case is concerned with a performance on land over which there is an unrestricted right of way. Unless someone has authority under an Ordinance to permit presenters of entertainment both to use land subject to a public right of way for entertainment and to control entry thereto, I would have thought that the PPEO could never apply to any land subject to a normal public right of way. Different considerations may apply to land which can be publicly enjoyed, and different considerations probably would apply but in respect of such land in a case where a lawful permission has been given to presenters of entertainment to cordon off or enclose the land for the purpose of entertainment so that it can properly be said that the public is admitted to the land in question, and therefore to the entertainment. 310. So far as point (ii) is concerned, in practice it may well be that, where the entertainment is presented in a publicly accessible space, the PPEO could not apply unless that space was cordoned off or enclosed in some other way, because otherwise there would be no means of controlling admission. However, the public location may be a peninsula connected to the land by a narrow causeway, or a cul-de-sac with a narrow entrance, in which case no cordoning off or the like would be required. In the end, it is a question of fact whether the presenter of the entertainment, or indeed some other person, has sufficient control over who comes to view the entertainment for it to be said that the general public are admitted thereto. 311. Turning to point (iii), I agree with Ribeiro PJ when he says at paras 69-70 of his judgment that, where the land is public highway, an entertainment would not become a public entertainment if it was cordoned off or otherwise enclosed by a presenter of entertainment. Although the presenter might in practice control admission to the land, he would be committing an offence, and, anyway, the fact that the land was cordoned off would not alter the fact that the public had the right to be there. Greater difficulties might arise where the land was subject to more limited public rights, but it is unnecessary and inappropriate to consider that on this appeal. 312. As to point (iv), the respondent’s contention is unarguable: either an entertainment is within the ambit of the PPEO or it is not. I agree with Ribeiro PJ’s comments in para 71 of his judgment. J. Conclusion 313. For these reasons, and for the reasons given by Fok PJ, I would dismiss the appeal of the Commissioner of Police. Indeed, were it not for the fact that I am disagreeing with the Chief Justice and Ribeiro PJ, from whose opinions I differ with considerable diffidence, I would have limited myself simply to agreeing with the judgment of Fok PJ. However, as it is, like Tang PJ, I consider it appropriate to express my reasons in my own words, which may represent a slight difference of emphasis or approach from that of Fok PJ, but that should not detract from the fact that I agree with his judgment. 314. If I had been minded to allow the appeal, it would have been necessary to consider the constitutional issue identified by Ribeiro PJ in para 136 of his judgment. In that connection, it is right to record that I entirely agree with his analysis in paras 137-144 of his judgment. Chief Justice Ma: 315. By a majority, Mr Justice Ribeiro PJ and I dissenting, the appeal is dismissed. As to costs, we direct that the parties be at liberty to serve on other party and lodge with the Registrar of the Court within 14 days of the handing down of this judgment any written submissions, with liberty to serve and lodge any written submissions in reply within 14 days thereafter. Mr Johnny Mok SC and Mr Abraham Chan, instructed by the Department of Justice, for the Appellant Mr Hectar Pun, Mr Newman Lam and Mr Albert N.B. Wong, instructed by Vidler & Co., assigned by the Director of Legal Aid, for the Respondent [1] For the relevant text, see para 3 below. [2] Mr Hectar Pun, with him Mr Newman Lam and Mr Albert Wong. The Appellant was represented by Mr Johnny Mok SC and Mr Abraham Chan. [3] Such as Vallejos v Commissioner of Registration (2013) 16 HKCFAR 45, at paras 75-77; Fully Profit (Asia) Ltd v Secretary for Justice (2013) 16 HKCFAR 351, at para 15. [4] See Vallejos at para 76. [5] Such as s 10 of the Police Force Ordinance, Cap 232; s 17 of the Public Order Ordinance Cap 245 (in relation to public gatherings). [6] Section 2. [7] See para 3 above. [8] See para 55 below. [9] Such as s 10(2)(f) of the PPEO whereby the licensing authority can specify the maximum number of persons who may be admitted as regards an entertainment. [10] As stated in s 2, “entertainment” means the events, activities and other things set out in Schedule 1 of the Ordinance. [11] See para 3 above. [12] Set out in para 82 below. [13] See HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at para 63 (per Sir Anthony Mason NPJ); China Field Ltd v Appeal Tribunal (Buildings) (No. 2) (2009) 12 HKCFAR 342 at para 36 (per Lord Millett NPJ). [14] Cap 172. [15] HCAL 102/2011 (16 July 2012). [16] Cheung CJHC, Stock VP and Barma JA, CACV 244/2012 (18 September 2013). [17] Lesbian, gay, bisexual, transgender and intersex. [18] The area was regularly designated a pedestrian precinct between 4.00 pm and midnight on weekdays and between noon and midnight on weekends and public holidays. [19] Agreed Facts §§17 and 18. [20] Cap 245. Conditions stipulated included a requirement to notify the Police if the organizers became aware of any drastic increase or decrease in the number of participants over or under the 250 people stated in the notice and arranging for 4 or 5 marshals and one first aid attendant to assist at the meeting. [21] Designated by the Secretary for Home Affairs under PPEO section 3B. [22] Director of Fire Services, Director of Buildings, Commissioner of Transport, Director of Highways, Director of Environmental Protection and Commissioner of Police. [23] Which includes “an exhibition of dancing” (Schedule 1, para 2). [24] Section 4(2) makes contravention an offence punishable by a fine and imprisonment for 6 months, and by a further fine of $2000 for every day during which the offence continues. [25] Judgment §§46, 70-72. [26] Judgment §§73-77. [27] Court of Appeal §15. [28] Judgment §§50, 52. [29] Judgment §§59-69. [30] Article 17: “The right of peaceful assembly shall be recognized. No restrictions may be placed on the exercise of this right other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others.” [31] Judgment §§81-85. [32] Judgment §§86-95. [33] Court of Appeal §28. [34] Court of Appeal §§29-30. [35] Court of Appeal §34. [36] Ibid. [37] Court of Appeal §35. [38] Ibid. [39] Court of Appeal §36. [40] Court of Appeal §40. [41] Court of Appeal §53. [42] Ibid. [43] Court of Appeal §55. [44] With Mr Newman Lam and Mr Albert N B Wong. [45] Court of Appeal §22. [46] “A sporting exhibition or contest” being a category of “entertainment”: Schedule 1, para 1(f). [47] FACC Nos 4, 5 and 6 of 2013 (5 June 2014) at §37. [48] (2006) 9 HKCFAR 574 at 606. [49] (2009) 12 HKCFAR 568 at §12. [50] Other matters which may legitimately be taken as indicating the statutory purpose were also noted in Cheung Kwun Yin at §14, including the Explanatory Memorandum of a bill and a statement made by a responsible official of the government in relation to the Bill in the Legislative Council. [51] See also section 7(c) which confers power to make regulations to provide for “the location of a place of public entertainment generally or on or in any place, building, erection or structure and the circumstances, conditions and restrictions in or subject to which such location may be permitted.” [52] Cap 376. [53] Court of Appeal §34. At §40, Cheung CJHC added: “In reality, where a public street is involved, unless the place of entertainment is suitably enclosed or cordoned off, it is difficult to control admission.” [54] Ibid. [55] Court of Appeal §35. [56] Whether or not with the help of cordoning off or enclosing the site. [57] Court of Appeal §35. [58] The Chinese definition of “public entertainment” (公眾娛樂) being“指本條例所指的讓公眾入場的任何娛樂，而不論是否收取入場費”. [59] Appearing with Mr Abraham Chan for the Commissioner. [60] Cap 1. [61] Court of Appeal §22, quoting from the Affidavit of Tse Wing Yee, Winnie, Principal Assistant Secretary for Home Affairs dated 6 March 2012, §31. [62] PPEO section 7(e) and (f). [63] PPEO section 7(c). [64] PPEO section 7(d). [65] Or such lesser period as the licensing authority may allow. [66] PPER regulation 162(1). [67] PPER regulation 162(2). [68] PPER regulation 169; made pursuant to PPEO section 7(g). [69] Or such lesser period as the licensing authority may allow. [70] PPER regulation 162(3). [71] PPEO section 10(1). [72] PPER regulation 171. [73] As envisaged by PPEO section 10(2)(e). [74] Court of Appeal §37. [75] Court of Appeal §39. [76] “‘Public Entertainment’ means any entertainment, as above defined, to which the general public are admitted with or without payment for admission.” [77] “‘Place of public entertainment’ means any place on which there is any erection or structure, any premises or building whether temporary or permanent or any water-borne craft or other place in or at which a public entertainment takes place whether on one occasion or more...” (Italics supplied) [78] Judgment §9. [79] Judgment §11. [80] Judgment §14. [81] Court of Appeal §25. [82] Court of Appeal §26. [83] (1907) 5 CLR 132. [84] An Imperial statute applicable to the State of Victoria: per Higgins J at 166. [85] At 137. [86] At 138. [87] At 138-139. [88] At 142. [89] At 138. [90] “From and after the passing of this present Act any house, room or other place which shall be opened or used for publick entertainment or amusement, or for publickly debating on any subject whatsoever, upon any part of the Lord’s Day, called Sunday, and to which persons shall be admitted by payment of money or by tickets sold for money, shall be deemed a disorderly house or place; and the keeper of such house, room or place shall forfeit the sum of two hundred pounds for every day that such house, room or place shall be opened or used as aforesaid on the Lord’s Day, to such person as will sue for the same, and be otherwise punishable as the law directs in cases of disorderly houses; and the person managing or conducting such entertainment or amusement on the Lord’s Day, or acting as master of the ceremonies there, or as moderator, president or chairman of any such meeting for publick debate on the Lord’s Day, shall likewise for every such offence forfeit the sum of one hundred pounds to such person as will sue for the same; and every doorkeeper, servant or other person who shall collect or receive money or tickets from persons assembling at such house, room, or place on the Lord’s Day, or who shall deliver out tickets for admitting persons to such house, room or place on the Lord’s Day, shall also forfeit the sum of fifty pounds to such person as will sue for the same.” [91] By a common informer’s action. [92] Court of Appeal §39. [93] Section 10 relevantly provides: (1) A licence for the purposes of this Ordinance shall be in such terms as the licensing authority by which it is granted determines and ... such licence shall be subject to such conditions (if any) as are specified in the licence.” (2) Without affecting the generality of subsection (1), terms or conditions referred to in that subsection may – (f) specify the maximum number of persons which may be admitted as regards entertainments taking place in the place to which the licence relates ...” [94] Court of Appeal §40. [95] PPER regulation 171. [96] (1996) 95 LGR 359. [97] Court of Appeal §§41-42. [98] Ex p McDonald (unreported, Lexis Transcript CO/2683/93, 14 December 1994). [99] With whom Sir Ralph Gibson and Nourse LJ agreed. [100] At 365. An additional reason given by his Lordship was that many persons might busk at an attractive spot in Leicester Square every day and the Act did not envisage several persons being licensed during one day to operate in one place. [101] Schedule 1 paragraph 1(a). [102] Cap 228. [103] (2006) 9 HKCFAR 574 at §63. [104] Places of Public Entertainment (Exemption) Order, Cap 172, para 2. [105] PPER regulation 178. [106] PPEO section 10(3). [107] R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] 1 AC 1312 at §33; cited in Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 at §71. [108] Article 27: “Hong Kong residents shall have freedom of speech, of the press and of publication; freedom of association, of assembly, of procession and of demonstration; and the right and freedom to form and join trade unions, and to strike.” [109] Giving constitutional effect to the International Covenant on Civil and Political Rights as implemented by the Hong Kong Bill of Rights Ordinance (Cap 383). [110] Article 16(2): “Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice.” [111] Article 17: “The right of peaceful assembly shall be recognized. No restrictions may be placed on the exercise of this right other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others.” [112] Discussed in the context of the freedom of assembly in Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §§33-38. [113] Falling within the permitted restrictions under BOR Article 17. [114] Cap 232. [115] POO section 2. [116] Defined as “any procession in, to or from a public place”: section 2. [117] POO sections 7 and 8. [118] POO sections 13 and 13A. [119] POO section 8(4). [120] POO section 13A(4). [121] Set out in Section G.4 above. [122] POO section 2. [123] Where 21 persons died and many were injured from the crush of severe overcrowding in New Year’s Eve celebrations in a network of narrow, sloping streets in an entertainment area. See the Final Report of the Inquiry by Mr Justice Bokhary dated 23 February 1993. As pointed out in the affidavit of Ms Tse Wing Yee Winnie dated 6 March 2012 (§§28 and 33), some of the PPEO’s 1995 amendments, including the addition of the present section 10 conferring power to impose conditions, were made to give effect to recommendations made by that Inquiry. [124]In HKSAR v Li Yiu-kee (ESS 43427/2010, unreported), in the run-up to 4 June 2010, 2 sculptures, the Goddess of Democracy and a statue commemorating 4 June 1989 were placed at the Times Square. They were seized by the police and the person responsible prosecuted under PPEO, because the exhibition of sculptures came within the definition of entertainment and there was no licence under PPEO. The person was convicted and fined $2000. The hearing of his appeal has been held over to await our decision. We are not here concerned with that appeal and I express no view on the correctness or otherwise of that decision, but it illustrates the implication of Mr Mok’s submission. [125] Para 123. [126] Para 126. [127] Para 298. [128] Para 229. [129] s 10B(1) and (2) Interpretation and General Clauses Ordinance Cap 1. [130] Under articles 27 and 39 of the Basic Law, articles 16(2) and 17 of the Hong Kong Bill of Rights and articles 19 and 21 of the International Covenant on Civil and Political Rights [131] In HCAL 102/2011 [132] CFI Judgment dated 16 July 2012 [133] Cheung CJHC, Stock VP and Barma JA [134] CACV 244/2012, Reasons for Judgment, 18 September 2003; reported in [2013] 4 HKLRD 384 [135] This provides: “Any person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine at level 4 [i.e. $25,000] and imprisonment for 6 months, and to a further fine of $2,000 for every day during which the offence has continued.” [136] CFI Judgment §§46, 70-77 [137] CA Judgment §15 [138] Case for the Respondent §10 [139] CA Judgment §§28, 34-36 [140] CA Judgment §40 [141] Bennion on Statutory Interpretation (6th Ed.), section 271 (pp.749-750) [142] Bennion on Statutory Interpretation (6th Ed.), sections 276 (pp.761-762) and 277 (pp.762-763) [143] Under section 3B, the Secretary for Home Affairs has authorised the Director of Food and Environmental Hygiene as the relevant licensing authority to issue or cancel licences and exercise other functions relating to licensing matters. [144] i.e. “any … other place in or at which a public entertainment takes place …” [145] CFI Judgment §§39, 42 and 44 [146] CA Judgment §22 [147] (2009) 12 HKCFAR 342 at §36 [148] Powell v The Kempton Park Racecourse Company Limited [1899] AC 143 at 194 per Lord James of Hereford [149] Appearing with Mr Abraham Chan [150] It is an interpretative presumption that the court seeks to avoid a construction that produces an absurd result, since this is unlikely to have been intended by Parliament; the more unreasonable the result, the less likely it is that Parliament intended it: Bennion on Statutory Interpretation (6th Ed.), section 312 (pp. 869-870). [151] In particular, on the Commissioner’s case as to what constitutes being “admitted” to an entertainment (as to which see below). [152] PPEO, section 10(2)(f), which provides that the licence may: “specify the maximum number of persons which may be admitted as regards entertainments taking place in the place to which the licence relates and any such term or condition may specify such a maximum as regards entertainments in general or specify 2 or more such maxima as regards specified entertainments of different classes or descriptions.” (Underlining added) [153] PPEO, section 6(1): “No person shall sell, or offer or exhibit or have in his possession for sale, or solicit the purchase of, any ticket or voucher authorizing or purporting to authorize admission to any place of public entertainment licensed under this Ordinance or any place with respect to which duty on payments for admission is payable under the Entertainments Tax Ordinance – …”. (Underlining added) [154] Shorter Oxford English Dictionary (5th Ed.) p.29 [155] (1907) 5 CLR 132 [156] (1996) 95 LGR 359 [157] CA Judgment §§32-33 [158] R v Bow Street Magistrates’ Court, ex p MacDonald, Lexis transcript, CO/2683/93, 14 December 1994 [159] CFI Judgment §§56-58 [160] The spelling of the busker’s name in the title of the first instance decision (MacDonald) was different to that used in the Court of Appeal decision (McDonald) and neither party was aware of the Court of Appeal decision. [161] CA Judgment §41 [162] CA Judgment §39 [163] Under PPEO section 10(3), the licensing authority may cancel, waive or vary any conditions subject to which a licence has been granted. [164] CA Judgment §40 [165] This qualification remained until the definition of “public entertainment” was amended in 1995 when the types of entertainment covered by the PPEO was expanded to those listed in the Schedule (now Schedule 1). There is nothing to suggest that its removal was intended to change the meaning of “admitted” from an active into a passive sense. [166] Section 4(15) provides that: “Any person who without lawful authority or excuse – … plays any musical instrument in any public street or road save under and in accordance with the conditions of any such general or special permit as the Commissioner of Police in his absolute discretion may issue; … shall be liable to a fine of $500 or to imprisonment for 3 months.” [167] The display is said to be the “World’s Largest Permanent Light and Sound Show” in which “coloured lights, laser beams and searchlights perform in an unforgettable all-round spectacle synchronised to music and narration that celebrates the energy, spirit and diversity of Hong Kong”: see http://www.discoverhongkong.com/eng/see-do/highlight-attractions/harbour-view/a-symphony-of-lights.jsp [168] Places of Public Entertainment (Exemption) Order (Cap.172D), section 2 [169] This provides that: “The Secretary for Home Affairs may … exempt places of public entertainment which are of a specified class or description from – (a) this Ordinance or particular provisions of this Ordinance specified in the order; (b) regulations under this Ordinance which are so specified or particular provisions of such regulations being provisions which are so specified.” [170] The focus of the PPEO is on the places where public entertainments are presented or carried on and not the public entertainments themselves and there is no question of the legislative scheme being intended to have any influence or control over the content of any entertainment. Nevertheless, the licence requirement itself is a restriction on the rights in question. [171] Appearing with Mr Newman Lam and Mr Albert N.B. Wong [172] Case for the Respondent, §5(2) [173] E.g. by reason of the physical characteristics of the public street or by the use of “bouncers” to exclude persons from entry [174] CFI Judgment §31 [175] Sections 4 and 4A [176] Section 10 [177] Sections 9, 11(2) and 17(2)
THE COURT: A. Introduction 1. This appeal raises important issues concerning equality under the law and, specifically, whether there has been unlawful discrimination on the part of the Director of Immigration (“the Director”) in the administration of his policy regarding the issue of dependant visas. A.1 The parties 2. The respondent QT[1] is a British national. She is homosexual and met her partner, SS, who has dual South African and British nationality, in 2004. In May 2011, QT and SS entered into a same-sex civil partnership in England under the UK’s Civil Partnership Act 2004. 3. SS was offered employment in Hong Kong and granted an employment visa to come and work here. On 23 September 2011, the couple entered Hong Kong, SS on the strength of her employment visa and QT as a visitor. Since their arrival in Hong Kong, SS’s employment visa has been extended from time to time as has QT’s visitor status. As a visitor, QT is not permitted to work or study in Hong Kong and, unlike those who enter under a dependant visa, her period of stay may not qualify her for eventual permanent resident status. The couple live in Hong Kong together and SS supports QT. There is no dispute that their civil partnership is a genuine relationship and that they live together as a family. 4. Under the Immigration Ordinance,[2] the Director is responsible for immigration controls on entry into, stay in and departure from Hong Kong. The policy presently in question is that under which a person may apply to take up residence or remain in Hong Kong as a dependant of another person who has been admitted into Hong Kong to take up employment (“the Policy”). A.2 The Policy 5. Under the Policy, certain persons are eligible to apply as dependants of sponsors who are not Hong Kong permanent residents. They are (i) the sponsor’s spouse; and (ii) his or her unmarried dependant children under the age of 18.[3] The Immigration Department states that an application for admission of a dependant may be favourably considered if: “a. there is reasonable proof of a genuine relationship between the applicant and the sponsor; b. there is no known record to the detriment of the applicant; and c. the sponsor is able to support the dependant's living at a standard well above the subsistence level and provide him/her with suitable accommodation in the HKSAR.”[4] It is not disputed that QT and SS meet these three requirements. 6. In his affirmation, Mr Wong Mo Cheong Wilson (“Mr Wong”), a Principal Immigration Officer in charge of the Visa Control (Policies) Division of the Immigration Department, states that the rationale of the Policy is “to ensure that Hong Kong will continue to attract people with the right talent and skills to come to Hong Kong by giving them the choice of bringing in their dependants to live with them in Hong Kong”.[5] However, because of Hong Kong’s small size and high population density, Mr Wong asserts that the Director has to maintain a strict policy of immigration control and that the eligibility criteria under the Policy are necessarily stringent.[6] As will be seen, the issues in the present case arise from the Director’s definition under the Policy of “the sponsor’s spouse” as someone of the opposite sex in a monogamous marriage, adopting marital status as defined under Hong Kong’s matrimonial law, thus excluding same-sex parties such as QT and SS. A.3 QT’s application for a dependant visa and its refusal 7. After making unsuccessful applications for a dependant visa and also for an employment visa in her own right, on 29 January 2014 QT submitted the application for a dependant visa which has led to these proceedings. 8. On 18 June 2014, the Director refused her application on the ground that it was “outside the existing policy”, providing the following explanation: “Under existing immigration policy, application for entry as a dependant for a sponsor who has been admitted into the HKSAR to take up employment will normally be considered for: (a) husband/wife to join resident spouse; or (b) unmarried children under the age of 18 to join resident parents[.] The existing immigration policy on admission of spouse as a dependant is based on monogamy and the concept of a married couple consisting of one male and one female. In other words, when applying for a dependant visa, the applicant and his/her sponsor should, among other things, show that their marriage was celebrated or contracted in accordance with the law in force at the time and in the place where the marriage was performed and recognized by such law as involving the voluntary union for life of one man and one woman to the exclusion of all others.” A.4 The application for judicial review 9. In October 2014, QT commenced the present judicial review proceedings seeking to quash the Director’s decision refusing her dependant visa application. She advanced three grounds of challenge: (a) First, that the decision was unreasonable in the public law sense[7] as it was discriminatory against her on sexual orientation grounds that were not justified; (b) Secondly, that the Director erred in law in construing “spouse” in the Policy to mean husband or wife but not including a party to a same-sex marriage-like relationship; and (c) Thirdly, that, if the Director was correct in his construction of “spouse”, then this infringed QT’s constitutional rights under Articles 1, 14 and 22 of the Hong Kong Bill of Rights[8] and Articles 25, 39 and 41 of the Basic Law of the Hong Kong Special Administrative Region.[9] 10. In the Court of First Instance, Au J concluded in favour of the Director on grounds 1 and 2 and dismissed QT’s application for judicial review. He held it unnecessary to deal with the constitutional challenge under ground 3.[10] A.5 The Court of Appeal’s decision 11. QT appealed, relying on grounds of appeal that corresponded to her three grounds of challenge at first instance. The Court of Appeal unanimously allowed QT’s appeal and quashed the Director’s decision refusing her a dependant visa.[11] 12. It was recognised that the first ground of appeal was determinative of the outcome of the appeal.[12] Giving the main judgment, Poon JA[13] found that the Director’s policy of accepting only opposite-sex spouses as eligible for a dependant visa under the Policy constituted indirect discrimination unless justified by the Director.[14] 13. Although arguing that excluding same-sex married partners or civil partners as spouses under the Policy did not constitute discrimination on any prohibited or suspect ground, the Director contended in the alternative that such differential treatment could be justified. His case in this respect was set out in counsel’s written summary given to the Court of First Instance, relied upon also in the Court of Appeal, in the following terms: “The difference in treatment pursues the legitimate aim of striking a balance between (1) maintaining Hong Kong’s continued ability to attract people with the right talent and skills to come to Hong Kong to work (by giving them the choice of bringing in their closest dependants to live with them in Hong Kong and to care for and support them in Hong Kong); and (2) the need for a system of effective, strict and stringent immigration control in the light of Hong Kong’s small geographical size, huge population, substantial intake of immigrants, relatively high per capita income and living standard, and local living and job market conditions, which bring constant and high pressure on Hong Kong’s society as a whole in particular the labour market, social benefits system, housing, education and infrastructure. To achieve the said legitimate aim, the Director adopts a bright-line rule, based on marital status as defined by Hong Kong’s matrimonial law and which the Director is obliged to follow and give effect to, and which provides for legal certainty and administrative workability and convenience, which is rationally connected with the said aim and is no more than necessary to accomplish the said aim.”[15] 14. Whilst it was common ground that the aim of striking the balance described was legitimate,[16] Poon JA held that the Director’s eligibility requirement, restricted to heterosexual married persons and excluding same-sex married partners or civil partners, was not rationally connected to that aim.[17] Accordingly, he concluded that the Director failed to justify the discriminatory treatment[18] and that it was unnecessary to consider the remaining steps of the justification analysis (referred to below[19]). He noted, however, that the Director had not sought to explain why the discriminatory aspect of the eligibility requirement was no more than necessary to achieve the asserted aim of striking the balance described.[20] QT’s application for judicial review accordingly succeeded. A.6 Leave to appeal to this Court 15. On the Director’s application, the Court of Appeal granted leave to appeal on the ground that the appeal involved questions of great general or public importance which ought to be submitted to this Court for decision.[21] Those questions are as follows: “(1) Given that same-sex marriage or civil partnership is not legally recognised in Hong Kong on all levels (constitutional, statutory and common law), and accordingly the denial of the right to marry to same-sex couples does not constitute discrimination on account of sexual orientation, whether this is an absolute bar to a claim of discrimination on account of sexual orientation when the differential treatment is based on marital status (as recognised under Hong Kong law) in all contexts. (2) Given that the status of marriage (as recognised under Hong Kong law) carries with it certain special and privileged rights and obligations unique to and inherent in marriage (‘core rights and obligations’), which are not open to all other persons including unmarried same-sex couples who cannot get married under Hong Kong law, and any differential treatment based on marital status in the context of such core rights and obligations requires no justification, whether immigration (in particular, the eligibility of a person in a same-sex marriage or civil partnership recognised under a system of foreign law for a dependant visa based necessarily on a spousal relationship with the sponsor) falls within these core rights and obligations. (3) If justification for a differential treatment in the context of immigration (in particular, the eligibility of a person in a same-sex marriage or civil partnership recognised under a system of foreign law for a dependant visa based necessarily on a spousal relationship with the sponsor) based on marital status is required: (a) what is the appropriate standard of scrutiny to be applied in the present context given that under the Basic Law and the Hong Kong Bill of Rights, and as recognised by the Courts, the Director of Immigration is entitled to exercise stringent control over immigration matters and enjoys a wide margin of appreciation or discretion as to how to formulate and administer his immigration policies; and (b) whether the Director of Immigration has justified the difference in treatment for eligibility for dependant visa based on marital status.” A.7 Application to intervene 16. In March 2018, shortly before the hearing of this appeal, a group of 15 financial institutions (“the Banks”), a group of 16 law firms (“the Law Firms”) and Amnesty International Limited applied for leave to intervene in the appeal in order to file written submissions in support of the Court of Appeal’s judgment. In the case of the Banks and the Law Firms, the application was made on the basis that their perspective would provide the Court with a more rounded picture of the practical effects of the Policy. In particular, they wished to draw to the Court’s attention the fact that the Policy had the effect of limiting the pool of foreign employees from which employers might wish to select and that this would adversely affect their interests as well as the wider interests of Hong Kong. 17. The Appeal Committee[22] was prepared to accept that the Policy had a practical limiting effect which was not purely speculative or theoretical. It considered that the perspective of the Banks and Law Firms was evident without requiring their intervention. The effect of the Policy on the Director’s aim of encouraging talented people to live and work in Hong Kong is addressed by QT so that the Appeal Committee was not satisfied that the proposed intervention by the Banks and Law Firms, or that of Amnesty International, materially added to the arguments contained in QT's written case. Accordingly, the applications to intervene were refused. B. The applicable principles B.1 The nature of QT’s Claim 18. Article 154 of the Basic Law vests the HKSAR Government with the power of immigration control over the Region.[23] This is given statutory effect by the Immigration Ordinance under which a person who does not enjoy the right of abode or have the right to land may not enter without the Director’s permission.[24] Where permission to land or remain is granted, sections 11(2)[25] and 11(5A)[26] furnish the Director with powers to impose time limits and other conditions on a person’s stay in Hong Kong. It is pursuant to those powers that the Director operates the Policy. 19. Although his powers are expressed in very wide terms, the Director accepts that in implementing the Policy, he is constrained to exercise them in accordance with what has been referred to as “the principle of equality”. He is right to do so. 20. It is a cardinal principle of administrative law that broad statutory powers are to be construed with the implied limitation that they are to be exercised only for the purposes for which they are given.[27] And as Sir Anthony Mason NPJ observed: “A statutory discretionary power, no matter how widely expressed, is necessarily subject to some limits. It must, for example, be exercised by the repository of the power. Other limits may arise from context of the power and from the purpose or purposes which it is designed to serve. Or the limits may arise from extraneous considerations giving rise to an abuse of power, such as bias and bad faith, which are naturally presumed to lie outside the scope of the statutory grant of power. Judicial review is available to correct an exercise of power that exceeds the limits set by the statutory grant of power or otherwise constitutes an abuse of power.”[28] 21. In order to be within the scope of the statutory grant, it is presumed that such powers must be exercised fairly and rationally, reflecting the rule of law.[29] As Lord Hoffmann pointed out in R (Alconbury Developments Ltd) v Environment Secretary: “The principles of judicial review give effect to the rule of law. They ensure that administrative decisions will be taken rationally, in accordance with a fair procedure and within the powers conferred by Parliament.”[30] And as Lord Steyn put it in R v Secretary of State for the Home Department, ex parte Pierson:[31] “Unless there is the clearest provision to the contrary, Parliament must be presumed not to legislate contrary to the rule of law. And the rule of law enforces minimum standards of fairness, both substantive and procedural.” 22. The principle of equality is an important aspect of such rationality. Writing for the Privy Council in Matadeen v Pointu,[32] Lord Hoffmann stated: “... treating like cases alike and unlike cases differently is a general axiom of rational behaviour. It is, for example, frequently invoked by the courts in proceedings for judicial review as a ground for holding some administrative act to have been irrational.” 23. Thus, as Baroness Hale of Richmond noted, discrimination is the antithesis of rational equal treatment: “Treating some as automatically having less value than others” is “the reverse of the rational behaviour we now expect of government and the state”.[33] Violation of the principle of equality may therefore sustain an application for judicial review on the ground of Wednesbury unreasonableness.[34] 24. While QT also alleges infringement of her constitutional equality rights (which remain indirectly relevant, as explained below[35]), her claim is primarily and sufficiently framed as one for judicial review on the basis that refusing her a dependant visa by application of the Policy amounts to unlawful discrimination which is irrational and unreasonable in a Wednesbury sense. As the challenge is made to an administrative policy and not to primary legislation, there is no need to rely on the Court’s powers of constitutional review. 25. We also note what this appeal is not about. It does not involve any claim that same-sex couples have a right to marry under Hong Kong law. As this Court recognised in W v Registrar of Marriages,[36] by virtue of section 40 of the Marriage Ordinance,[37] a valid marriage is a “voluntary union for life of one man and one woman to the exclusion of all others”. Marriage in this jurisdiction is therefore heterosexual and monogamous. By definition, it is not a status open to couples of the same sex.[38] 26. Article 37 of the Basic Law provides that the freedom of marriage of Hong Kong residents and their right to raise a family freely shall be protected by law. However, it has not been argued that this makes marriage available to same-sex couples. As the Director points out, the European Court of Human Rights (“ECtHR”) has held in relation to the comparable right to marry under Article 12 of the European Convention on Human Rights[39] (“ECHR”), that that provision “does not impose an obligation on contracting states to grant same-sex couples access to marriage”.[40] As the point has not been argued, it is unnecessary to say anything more. B.2 The nature of discrimination 27. It hardly needs to be pointed out that unlawful discrimination is fundamentally unacceptable. In R (Carson) v Secretary of State for Work and Pensions,[41] Lord Walker of Gestingthorpe put it thus: “In the field of human rights, discrimination is regarded as particularly objectionable because it disregards fundamental notions of human dignity and equality before the law. Discrimination on the ground of sex or race demeans the victim by using a sexual or racial stereotype as a sufficient ground for unfavourable treatment, rather than treating her as an individual to be judged on her own merits.” 28. Similarly, in Ghaidan v Godin-Mendoza,[42] Lord Nicholls of Birkenhead stated: “Discrimination is an insidious practice. Discriminatory law undermines the rule of law because it is the antithesis of fairness. It brings the law into disrepute. It breeds resentment. It fosters an inequality of outlook which is demeaning alike to those unfairly benefited and those unfairly prejudiced.” 29. However, as Lord Nicholls pointed out,[43] the law has of course to draw distinctions: “One type of conduct, or one factual situation, attracts one legal consequence, another type of conduct or situation attracts a different legal consequence.” The task of the courts has been to establish principles for determining when distinctions drawn by legal or administrative measures are rational and fair and when such distinctions constitute unlawful discrimination. 30. There has been a notable convergence in the approaches of various courts, including our own, to what constitutes discrimination, influenced by international human rights instruments. The jurisprudence of the ECtHR and its interaction with the jurisprudence of the House of Lords, the Privy Council and the United Kingdom Supreme Court relating to the Human Rights Act 1998 and domestic anti-discrimination legislation are of particular relevance in the present case. 31. An inquiry into whether an individual or group has suffered unlawful discrimination generally begins with a claim that the complainant has been subjected to some unfairly adverse treatment. It is usually recognised that such treatment may broadly occur in three forms. The first two are succinctly conveyed by the statement: “Like cases should be treated alike, unlike cases should not be treated alike.”[44] The third involves indirect discrimination where the measure complained of appears neutral on its face but is significantly prejudicial to the complainant in its effect. 32. The ECtHR’s case-law recognising these three forms of discrimination was summarised by the Grand Chamber in DH v Czech Republic:[45] “The Court has established in its case law that discrimination means treating differently, without an objective and reasonable justification, persons in relevantly similar situations. However, Art 14[46] does not prohibit a Member State from treating groups differently in order to correct ‘factual inequalities’ between them; indeed in certain circumstances a failure to attempt to correct inequality through different treatment may in itself give rise to a breach of the Article. The Court has also accepted that a general policy or measure that has disproportionately prejudicial effects on a particular group may be considered discriminatory notwithstanding that it is not specifically aimed at that group, and that discrimination potentially contrary to the Convention may result from a de facto situation.” This approach was also adopted by the Privy Council in Rodriguez v Minister of Housing of the Government.[47] 33. The three categories of discrimination may be illustrated as follows. (a) The first category involves the complaint that like is not being treated as like in that the complainant is receiving treatment which is unfavourable when compared with treatment given to persons in “relevantly similar situations”. For example, in James v Eastleigh Borough Council,[48] a man and his wife were both aged 61 and wished to use a public swimming pool. He complained that he was charged admission while his wife got in for free. The Council’s policy was to allow free admission to women aged 60 and to men aged 65, in line with their pensionable ages. That policy was held to constitute direct discrimination on the grounds of sex. (b) The second category involves the complainant disadvantageously receiving the same treatment as persons in significantly different situations. This is sometimes called “Thlimmenos discrimination”, referring to Thlimmenos v Greece,[49] where an individual who had been convicted of insubordination for refusing, because of his pacifist religious beliefs, to wear military uniform when mobilised, complained that he was wrongly equated with convicted felons in subsequently being refused appointment as a chartered accountant. He successfully argued that the felons were in a materially different situation and that he should not be equated with them to his disadvantage. (c) The third, indirect, form of discrimination involves application of an ostensibly neutral criterion which operates to the significant prejudice of a particular group. Thus, in the Rodriguez case,[50] the Gibraltarian government’s policy was to confine the right to succeed to a government tenancy to couples who were married or had children together. It was not direct discrimination since the policy applied also to unmarried opposite-sex couples. But it was held to be indirect discrimination against a same-sex couple based on sexual orientation since the policy laid down criteria which, unlike unmarried opposite-sex couples, same-sex couples would never be able to meet. The same conclusion was reached in Preddy v Bull,[51] where the indirectly discriminatory policy involved the letting of double-bedded rooms only to married couples, putting a gay couple who had entered into a civil partnership and could not acquire married status at an insurmountable disadvantage.[52] (d) Although the objections are sometimes about wrongly receiving different treatment and sometimes about wrongly being treated the same, we will for convenience refer to the complained of disadvantage as the relevant “difference in treatment” or “differential treatment”. B.3 The issues 34. Two main contested issues arise in the present case. The first is whether there has been discriminatory treatment at all, that, is whether the Policy falls within one or more of the aforesaid categories. If it does, the second issue is whether such discriminatory treatment can be justified.[53] 35. The Director’s primary stance is that the Policy needs no justification. He contends that the status of marriage is plainly special and different from the status conferred by a civil partnership so that the respective dependants obviously occupy unlike positions which he is entitled to treat differently without having to go through any justification exercise. 36. Alternatively, the Director submits that if, contrary to his primary submission, the difference in treatment requires to be justified, he is able to satisfy the tests for such justification. He submits that since the challenge raises an issue concerning the Government’s social or economic policy, the courts should not interfere unless satisfied that the Policy is manifestly without reasonable foundation. 37. QT, on the other hand, contends that the Director’s denial of the need for justification is untenable and that this is a case where the difference in treatment falls within at least one, and possibly all three, of the abovementioned categories of discrimination. She also contends that his policy cannot be justified as rational and fair since the Director is unable to show that the incursions made by the Policy into the principle of equality are rationally connected to achievement of a legitimate aim and are no more than reasonably necessary to accomplish that aim. C. Director’s first argument: Whether justification is required 38. A person complaining about discrimination generally has in mind one or more comparators. The question asked is: Why is the complainant being treated less favourably than individuals in a relevant comparator group? Here, QT asks: “Why am I denied a dependant visa which would be granted to a married spouse of a sponsor?” The Director’s answer is essentially simply to state: “Because she is married and you are not”. As we have seen, the Director recognises someone as married only if he or she is a party to a marriage which, if celebrated here, would be valid under Hong Kong law, in other words, a party to a monogamous and heterosexual marriage, wherever it might have been contracted. 39. The Director exercises immigration control over persons seeking to enter Hong Kong from all over the world. Many may have contracted valid marriages under the laws of their countries of origin which differ from Hong Kong law as to the capacity to marry, whether in terms of age, consent, consanguinity, polygamy or otherwise. Of course, it may in some cases be contrary to public policy in Hong Kong to recognise certain marriages, such as those involving very young children. However, the Policy does not draw the line at unions which are objectionable on grounds of public policy. Instead – one might think somewhat oddly – it purports to exclude spousal relationships simply because they do not correspond with the definition of marriage under Hong Kong law (although, as we shall see, it does not do so consistently[54]). One might also note, applying the Padfield principle discussed in Section B.1 of this judgment, that enforcement of Hong Kong’s matrimonial laws is not a purpose within the statutory grant of powers to the Director. 40. Lord Pannick QC[55] contends nevertheless that the Director is entitled to draw such a line. He submits that the Director may rationally adopt a policy conferring the benefit of a dependant visa (which is a benefit under Hong Kong law) only on spouses in a union which, if celebrated here, would have been recognised as a valid marriage under Hong Kong law. He is entitled, Counsel submits, to treat same-sex couples who cannot attain marital status under Hong Kong law as being obviously not in a relevantly similar situation with married couples and thus properly subjected to differential treatment without the Director having to embark upon any justification exercise. The difference in status between QT and a married spouse is, in short, itself a justification. In support, Lord Pannick QC relies on a series of ECtHR decisions[56] which, he argues, demonstrate how marriage is treated as a special status providing a proper basis for treating married couples differently. He also points out that unmarried same-sex couples are given the same dependant visa treatment as unmarried opposite-sex couples, so that the Policy, he submits, is not discriminatory. 41. We are unable to accept that submission both as a matter of principle and on the existing authorities. C.1 Circularity 42. The first unsatisfactory aspect of the Director’s first argument is its circularity. It puts forward the challenged differentiating criterion as its own justification. It is hardly satisfactory to answer the question: “Why am I treated less favourably than a married person?” by saying: “Because that person is married and you are not”. 43. In Rodriguez,[57] Baroness Hale pointed this out in connection with the majority decision of the Grand Chamber in Burden v United Kingdom,[58] as follows: “... in the recent case of Burden v United Kingdom (2008) 24 BHRC 709, the majority of the Grand Chamber held that two sisters living together were not in an analogous situation to civil partners because marriage and civil partnership were different forms of relationship from siblingship. The problem with that analysis is that the ground for the difference in treatment, the lack of marital or civil partnership status, is also the reason why the person treated differently is said not to be in an analogous situation. This can be dangerous. If the ground for the difference in treatment were a difference in sex, it would not be permissible to say that a man and a woman are not in an analogous situation because men and women are different.”[59] C.2 Considering similarity or difference in vacuo 44. The second major objection to the Director’s first argument is that the identification of comparators does not of itself permit a proper conclusion to be reached as to whether a given difference in treatment is or is not discriminatory. As Lord Walker pointed out in the Carson case,[60] the real issue in the case at hand was: “... why the complainant had been treated as she had been treated. Until that question was answered, it was impossible to focus properly on the question of comparators”. 45. The notion of whether the comparators are analogous or relevantly similar is elastic both linguistically and conceptually. As his Lordship pointed out in the same judgment: “Some analogies are close, others are more distant”.[61] It is therefore generally unprofitable to debate in the abstract whether a given comparator is or is not sufficiently analogous to require like treatment. The context of the question is crucial.[62] 46. Indeed, when one considers in general terms the inter-personal relationships between two civil partners on the one hand and between a married couple on the other, each being a status recognised under UK law, it is hard to see any basis for the Director concluding that they are obviously different comparators. In Ghaidan v Godin-Mendoza,[63]a case concerning discrimination in rules which excluded the survivor of a long-term cohabiting homosexual couple from succession to a statutory tenancy, Lord Nicholls stated: “A homosexual couple, as much as a heterosexual couple, share each other's life and make their home together. They have an equivalent relationship. There is no rational or fair ground for distinguishing the one couple from the other in this context...” 47. In the same case,[64] Baroness Hale pointed out that “[homosexual couples] can have exactly the same sort of inter-dependent couple relationship as heterosexuals can” – an observation of obvious relevance in a discussion about dependency. 48. At the hearing, Lord Pannick QC fairly accepted that same-sex couples in an enduring relationship are well capable of having a relationship that is as loving as, or more loving than, that of many heterosexual couples. 49. The Civil Partnership Act 2004 which governs the relationship between QT and SS under English law, creates a structure for the establishment and formal recognition of civil partnerships which is defined by section 1(1) as “a relationship between two people of the same sex ... which is formed when they register as civil partners of each other ...” Sir Mark Potter, sitting in the English High Court, described its provisions as follows: “The subsequent sections, over two hundred in number, provide the bureaucratic mechanisms necessary for the purposes of the civil registration process and remedy, and remove the financial and other legal and economic disadvantages caused by the prohibition on same sex partners marrying, by conferring on those who have entered a civil partnership similar rights, benefits and material advantages to those enjoyed by married couples. They also provide for the breakdown of the civil partnership in much the same way as marriage.”[65] 50. In Preddy v Bull,[66] a case of discrimination against a same-sex couple in a civil partnership regarding the provision of double-bedded lodging at a hotel, Baroness Hale of Richmond DPSC explained: “Civil partnership is not called marriage but in almost every other respect it is indistinguishable from the status of marriage in United Kingdom law. It was introduced so that same sex couples could voluntarily assume towards one another the same legal responsibilities, and enjoy the same legal rights, as married couples assume and enjoy. It is more than a contract. Like marriage, it is a status, in which some of the terms are prescribed by law, and which has consequences for people other than the couple themselves and for the state. Its equivalence to marriage is emphasised by the provision in regulation 3(4) that being married and being a civil partner is not to be treated as a material difference for the purpose of a finding of either direct or indirect discrimination.” 51. The close equivalence between civil partnerships and traditional marriages was relied on by the Grand Chamber of the ECtHR as a reason for not requiring the right to marry under ECHR Art 12 to be interpreted as obliging Member States to grant same-sex couples access to marriage: “The court found in 2006 in the case of Parry v UK (App no 42971/05) (admissibility decision, 28 November 2006) that even if same-sex marriage was not allowed at the time in English law, the applicants could continue their relationship in all its essentials and could also give it a legal status akin, if not identical, to marriage, through a civil partnership which carried with it almost all the same legal rights and obligations. The court thus regarded civil partnership as an adequate option.”[67] 52. It follows that the Director’s assertion that an obvious difference exists between marriage and a civil partnership rests on shaky foundations. It is untenable as a basis for precluding scrutiny of the Policy’s justification. C.3 The authorities relied on by the Director 53. The Director cites a number of cases for the proposition that marriage creates a special status which fittingly provides an exclusive criterion for bestowing on the married couple particular benefits denied to others. 54. It is no doubt true that in some cases, it may be appropriate to confine certain benefits to married persons but this would generally be on the basis that the difference in treatment can be justified on fact-specific grounds, such as in connection with parental rights where the best interests of a child are involved or where certain biological issues arise.[68] But the authorities cited do not support an approach which eschews the need for justification simply on the basis of an asserted difference in status. 55. Gas v France,[69] relied on by the Director, was a second-parent adoption case. A woman cohabiting with her lesbian partner (the applicant), gave birth to a daughter conceived via anonymous donor insemination. They subsequently entered into a civil partnership under French law, the couple and the daughter living together in a shared home. The applicant’s claim to adopt the child was refused by the tribunal de grande instance because, by virtue of Art 365 of the French Civil Code, such an adoption would transfer parental responsibility to the adoptive parent, thus depriving the birth mother of her own rights in relation to the child, “unless the adoptive parent is married to the adoptee’s mother or father”. The claimant obviously could not bring herself within that exception and complained of discrimination on the basis of sexual orientation. Her challenge failed, the Court holding that such a transfer of parental responsibility would not be in the child’s best interests, since the birth mother intended to continue raising the child.[70] As Ms Dinah Rose QC[71] pointed out, the claimant did not challenge Art 365 itself but took the legal framework as given. The ECtHR therefore held that the legal consequences of that provision meant that the claimant was not in a relevantly similar position to married persons, justifying the court’s denial of her claim. 56. X v Austria,[72]was another second-parent adoption case relied on. A woman in a stable same-sex relationship sought an order for her to adopt the son conceived by her partner with a man outside of marriage, with a view to the child’s relationship with the father ceasing while leaving his relationship with his birth mother intact. She was unsuccessful in the domestic courts. Austrian law laid down differing requirements for adoption by married couples, individuals and unmarried couples, both heterosexual and homosexual. The applicants’ focus in the ECtHR was on a second-parent adoption. They “stressed that they did not wish to assert a right that was reserved to married couples”,[73] emphasising “that the key issue in the present case was the unequal treatment between unmarried different-sex couples and unmarried same-sex couples” in relation to second-parent adoption which was “possible for unmarried heterosexual couples, but not for unmarried same-sex couples”.[74] The Grand Chamber concluded that (given the unchallenged legal framework) unmarried same-sex couples were not in a relevantly similar situation to married heterosexual couples regarding second-parent adoption.[75] However, it found that “there was a difference of treatment between the applicants and an unmarried different-sex couple in which one partner sought to adopt the other partner’s child” which “was inseparably linked to the fact that the first and third applicants formed a same-sex couple, and was thus based on their sexual orientation”.[76] It applied the justification test established in ECtHR jurisprudence and held that the differential treatment was unjustified.[77] 57. In Shackell v United Kingdom,[78] a woman who had cohabited with a man with whom she had had three children complained to the ECtHR that after his death in a work accident, she was discriminated against by being denied widow’s benefit which she would have received if they had been married. The Chamber held that there was no discrimination as she was not in a relevantly similar situation as a widow. As Ms Rose QC submitted, the applicant would have qualified for widow’s benefit if she and the deceased had chosen to get married. Since, for whatever reason, they had chosen not to do so, it was difficult to see the basis for finding that she had been the victim of discrimination. 58. Finally in this context, the Director relied on Burden v United Kingdom,[79] which involved a challenge regarding potential liability for inheritance tax brought by two unmarried sisters who had lived together all their lives. Each had made a will leaving all their property to the other and under UK law, when one of the sisters died, the survivor would be liable to pay inheritance tax on any assets received under the will. However, property passing between spouses or from one civil partner to another was exempt from inheritance tax, a difference in treatment they alleged to be discriminatory. This case has been mentioned above[80] in connection with the dangers of circularity in the Director’s first argument. Leaving that aside, the Grand Chamber’s rejection of the sisters’ challenge was based on two main justifications. First, the Court sought to distinguish their situation from that of both married couples and same-sex civil partners as follows: “Rather than the length or the supportive nature of the relationship, what is determinative is the existence of a public undertaking, carrying with it a body of rights and obligations of a contractual nature. Just as there can be no analogy between married and Civil Partnership Act couples, on one hand, and heterosexual or homosexual couples who choose to live together but not to become husband and wife or civil partners, on the other hand, the absence of such a legally binding agreement between the applicants renders their relationship of cohabitation, despite its long duration, fundamentally different to that of a married or civil partnership couple.”[81] 59. That may, with respect, be thought to be less than convincing since, as pointed out by judge David Thór Björgvinsson:[82] “... consanguinity between the applicants prevents them from entering into a legally binding agreement similar to marriage or civil partnership, which would make the legal framework applicable to them, including the relevant provisions of the law on inheritance tax.”[83] 60. The second basis for the Court’s decision was that the United Kingdom should be given leeway within the margin of appreciation afforded to Member States in relation to tax legislation. The Grand Chamber held: “Member States have adopted a variety of different rules of succession as between survivors of a marriage, civil partnership and those in a close family relationship and have similarly adopted different policies as regards the grant of inheritance tax exemptions to the various categories of survivor; states, in principle, remaining free to devise different rules in the field of taxation policy.”[84] 61. In any event, it is significant for present purposes that the Grand Chamber treated married couples and same-sex civil partners as having equivalent status, placing them in the same category to be compared against unmarried cohabiting couples. It provides no support for the Director’s submission that married couples merit different treatment simply by virtue of their marital condition, viewed as special. C.4 The Court of Appeal and the need for justification 62. We note that in the Court of Appeal, citing “nature... tradition or long usage”, Mr Justice Cheung CJHC favoured the view that certain “core rights and obligations unique to a relationship of marriage” exist “so much so that the entailing privileged treatments to married couples as compared with unmarried couples (including same‑sex couples) should simply be considered as treatments that require no justification because the difference in position between the married and the unmarried is self‑obvious”.[85] 63. This was also Mr Justice Lam VP’s view: “As explained by the Chief Judge, it is important that the law should recognize that there are core characteristics (be it called rights, privileges or even obligations) pertaining to a marriage. For matters related to such core features, difference in treatment for unmarried persons (including those who could not marry under the laws in Hong Kong due to one’s sexual orientation) cannot be regarded as discriminatory. It is simply the application of the tenet that different cases should be treated differently.”[86] 64. Similarly, Mr Justice Poon JA referred to “recognition that there are certain core rights pertaining to marriage and that differential treatment based on those core rights cannot be regarded as discriminatory.”[87] 65. While Cheung CJHC acknowledged the existence of certain problems inherent in this line of argument[88] and their Lordships held that the immigration treatment in the present case does not fall within such “core rights” and therefore does require justification,[89] Cheung CJHC adhered to the aforesaid approach stating: “Divorce, adoption and inheritance are obvious examples of these areas of life regarding which the status of marriage carries rights and obligations unique to married couples. Without these core rights and obligations, the legal status of marriage simply has little if any substance in law. And the court must be most slow, if ever, to empty marriage of its legal content and meaning. When the context involved is one of those areas of life, the status of marriage provides the obvious, relevant difference between a married couple and one that is not (heterosexual or same‑sex).”[90] 66. With respect, that approach should not be followed. It proposes that the question: “Why am I being treated differently from a married person to my disadvantage?” may be answered: “Because you are not married and the benefit you are claiming is a ‘core right’ reserved uniquely for those who are married”, without need for justification. It mirrors the Director’s first argument and gives rise to similar difficulties regarding circularity and subjective, fruitless debate as to what does or does not fall within the “core”. The real question is: Why should that benefit be reserved uniquely for married couples? Is there a fair and rational reason for drawing that distinction? Differences in treatment to the prejudice of a particular group require justification and cannot rest on a categorical assertion. 67. What may seem obvious to some may be not at all clear to others. One can readily see that divorce, being one of the prescribed legal means of dissolving a marriage, may be said to be a remedy appropriately limited to persons who are parties to a marriage. Why, after all, should anyone who is not married wish to petition for divorce? But it is by no means clear that persons other than married couples may fairly or rationally be excluded from other benefits, such as the rights of adoption or succession mentioned by Cheung CJHC. 68. Indeed, the suggestion that adoption is a “core right” which is properly restricted to married couples, far from being obvious, runs counter to numerous authorities, the following being a few illustrations. 69. Thus, in The National Coalition for Gay and Lesbian Equality v The Minister of Home Affairs,[91] writing for the South African Constitutional Court, Ackermann J noted: “Gays and lesbians are certainly individually permitted to adopt children under the provisions of section 17(b) of the Child Care Act 74 of 1983 and nothing prevents a gay couple or a lesbian couple, one of whom has so adopted a child, from treating such child in all ways, other than strictly legally, as their child. They can certainly love, care and provide for the child as though it was their joint child.” 70. EB v France,[92] concerned an application for authorisation to adopt by a homosexual single person (who was in a stable and permanent relationship with her partner). The Grand Chamber of the ECtHR pointed out “that French law allows single persons to adopt a child, thereby opening up the possibility of adoption by a single homosexual...”[93] and held that since her avowed homosexuality “was a decisive factor leading to the decision to refuse her authorisation to adopt”,[94] that decision was “based on considerations regarding her sexual orientation, a distinction which is not acceptable under the Convention”.[95] 71. In Re G (Adoption: Unmarried Couple),[96] a man and a woman who had been living together since before the birth of the woman’s ten-year-old child but were not married, wished to apply jointly to adopt the child in order for the man, who was not the child's biological father, to be formally recognised as the father while maintaining the woman’s status as the legal mother. However, Article 14 of the Adoption (Northern Ireland) Order 1987 provided that an adoption order could only be made on the application of more than one person if the applicants were a married couple. The House of Lords held that this blanket ban effectively created an irrebuttable presumption that no unmarried couple could make suitable adoptive parents and could not be justified. As Lord Hoffmann put it: “It is one thing to say that, in general terms, married couples are more likely to be suitable adoptive parents than unmarried ones. It is altogether another to say that one may rationally assume that no unmarried couple can be suitable adoptive parents. Such an irrebuttable presumption defies everyday experience. The Crown suggested that, as they could easily marry if they chose, the very fact that they declined to do so showed that they could not be suitable adoptive parents. I would agree that the fact that a couple do not wish to undertake the obligations of marriage is a factor to be considered by the court in assessing the likely stability of their relationship and its impact upon the long term welfare of the child. Once again, however, I do not see how this can be rationally elevated to an irrebuttable presumption of unsuitability.”[97] 72. The interests of the child had to be paramount and therefore, as Lord Hope of Craighead held: “The aim sought to be realised in regulating eligibility for adoption is how best to safeguard the interests of the child. Eligibility simply opens the door to the careful and exacting process that must follow before a recommendation is made. The interests of the child require that this door be opened as widely as reasonably possible. Otherwise there will be a risk of excluding from assessment couples whose personal qualities and aptitude for child rearing are beyond question. To exclude couples who are in an enduring family relationship from this process at the outset simply on the ground that they are not married to each other would be to allow considerations favouring marriage to prevail over the best interests of the child. I do not think that this can be said to be either objectively justified or proportionate. From this it must follow that the applicants' exclusion from eligibility would be incompatible with their Convention rights as it would be discriminatory.”[98] 73. As we have already seen, in X v Austria,[99] the ECtHR held that the difference of treatment between a lesbian couple and an unmarried straight couple in relation to second-parent adoption was unjustified discrimination based on the applicants’ sexual orientation. 74. Finally in Boeckel v Germany,[100] the applicants were two women in a civil partnership, one of whom had given birth to a son. The other had been granted an adoption order by the Hamburg-Altona District Court so that the son obtained the legal position of a child of both applicants. This was, in other words, a case where a second-parent adoption by a person in a same-sex civil partnership was approved. The issue before the ECtHR concerned rectification of the child’s identity card. 75. A similar survey of the authorities could be conducted for examples of cases where unmarried or same-sex couples have been held entitled to equal treatment in respect of certain succession rights enjoyed by married couples, for instance in relation to protected statutory tenancies,[101] calling into question Cheung CJHC’s suggestion that this constitutes an area obviously involving rights properly regarded as unique to married couples. 76. This is not to suggest that a person’s marital status is irrelevant as a condition for the allocation of rights and privileges. Such status may in some circumstances be highly important or even decisive. The point we make is that the relevance and weight to be attributed to that status is taken into account in considering whether a particular difference in treatment is justified as fair and rational, and that a person’s marital condition cannot determine presumptively that discrimination does not exist. C.5 The discrimination alleged by QT 77. Lord Pannick QC accepts that if the Director’s first argument fails, the Policy may be said to involve the third, indirect, category of discrimination on the basis of QT’s sexual orientation. This is because the criterion of a dependant having to be a party to a marriage which satisfies the requirements of a valid marriage under Hong Kong law, cannot be met by homosexual persons and therefore makes them ineligible for dependant visas by reason of their sexual orientation. 78. That concession suffices for QT’s purposes. However, it is also submitted on her behalf that she faces both direct and Thlimmenos discrimination. 79. She argues that she suffers direct discrimination as a result of the Director not treating like cases alike when polygamous marriages are taken as the comparator. Thus, Mr Wong’s evidence is that under the Policy, “where a Hong Kong resident has more than one spouse residing outside Hong Kong, only one of them should be allowed to take up residence in Hong Kong as the sponsor’s dependant”.[102] The Policy therefore treats a party to a polygamous union which would plainly be invalid as a marriage under Hong Kong law as eligible for a dependant visa, but excludes QT on the ground of such invalidity. Like cases are therefore wrongly being treated unlike to QT’s disadvantage.[103] 80. QT’s case on Thlimmenos discrimination is a reaction to the Director’s argument that there is no discrimination since the Policy treats unmarried opposite-sex couples in the same way. Her submission is that such equal treatment is discriminatory since such opposite-sex couples are in a materially different situation. Whereas civil partners have made a public commitment to be life partners, unmarried straight couples have not and may be in a transient relationship. More importantly, unmarried opposite-sex couples can get married and bring themselves within the Policy, while homosexual civil partners cannot. Unlike cases are wrongly being treated alike to QT’s prejudice. D. The Director’s second argument: Justification D.1 The need for scrutiny 81. Where an issue of equality before the law arises, the question of whether a measure is discriminatory is necessarily bound up with whether the differential treatment which the measure entails can be justified. Thus, in Secretary for Justice v Yau Yuk Lung,[104] Li CJ pointed out that a difference in treatment does not constitute discrimination where it satisfies the justification test. One does not decide independently whether there has been discrimination and then seek to determine whether it can be justified. His Lordship stated: “Where the difference in treatment satisfies the justification test, the correct approach is to regard the difference in treatment as not constituting discrimination and not infringing the constitutional right to equality. Unlike some other constitutional rights, such as the right of peaceful assembly, it is not a question of infringement of the right which may be constitutionally justified.” 82. And in Fok Chun Wa v Hospital Authority,[105]Ma CJ stated: “In the majority of cases where equality issues are involved, it will be necessary for the Court to look at the materials which go to the three facets of the justification test before this crucial question is answered. It will be a rare case, I daresay, where the court will comfortably be able to answer this question without any recourse to the issue of justification at all...” 83. Indeed, in our view, the correct approach is to examine every alleged case of discrimination to see if the difference in treatment can be justified. As Lord Nicholls observed, “the essential question for the court is whether the alleged discrimination, that is, the difference in treatment of which complaint is made, can withstand scrutiny”.[106] In particular, as Lord Bingham of Cornhill noted: “What has to be justified is not the measure in issue but the difference in treatment between one person or group and another.”[107] And as Lord Nicholls also pointed out, sometimes the answer may appear obvious: “There may be such an obvious, relevant difference between the claimant and those with whom he seeks to compare himself that their situations cannot be regarded as analogous.”[108] Those are cases where the justification is readily apparent, but nonetheless required. D.2 Justification and proportionality principles 84. The proportionality concepts developed for scrutinising incursions made into constitutionally protected rights constitute the justification test. As Li CJ explained: “In order for differential treatment to be justified, it must be shown that: (1) The difference in treatment must pursue a legitimate aim. For any aim to be legitimate, a genuine need for such difference must be established. (2) The difference in treatment must be rationally connected to the legitimate aim. (3) The difference in treatment must be no more than is necessary to accomplish the legitimate aim.”[109] 85. That approach was endorsed in Fok Chun Wah[110] and is the approach generally adopted by the ECtHR: “The court has established in its case law that in order for an issue to arise under art 14[111] there must be a difference in treatment of persons in relevantly similar situations. Such a difference of treatment is discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised.”[112] It has also been applied by the English courts both for the purposes of the Human Rights Act 1998 and of domestic anti-discrimination legislation.[113] 86. In the light of this Court’s decision in Hysan Development Co Ltd v Town Planning Board,[114] added to the three elements of the proportionality test mentioned above is the fourth step involving consideration of whether a reasonable balance had been struck between the societal benefits of the encroachment on the one hand, and the inroads made into the constitutionally protected rights of the individual on the other, asking in particular whether pursuit of the societal interest results in an unacceptably harsh burden on the individual. 87. Although, as we have noted, this case has proceeded as a claim for judicial review, Lord Pannick QC (in our view rightly) accepted that the proportionality concepts developed in constitutional law, including the Hysan fourth step, are equally applicable to deciding whether the differential treatment entailed by the Policy is justified or whether it may be impugned as Wednesbury unreasonable. Thus the provisions of Art 25 of the Basic Law[115] and Art 22 of the Bill of Rights[116] are indirectly relevant here. D.3 The aims espoused by the Director 88. As we have seen,[117] the twin aims of the Policy have been stated by the Director as (i) the encouragement of persons with needed skills and talent to join our workforce, accompanied by their dependants; while at the same time (ii) maintaining strict immigration control. A subsidiary aim is stated to be that of being able to draw a “bright line” between those who do and those who do not qualify for dependant visas thereby promoting legal certainty and administrative workability and convenience. QT accepts that these are legitimate aims. 89. At the hearing, Lord Pannick QC sought to introduce a newly minted rationale as a further legitimate aim, namely, that the Policy promotes the special status of marriage which would be undermined if spousal benefits were conferred on same-sex relationships. He acknowledged that this had not been argued below[118] and that the submission was stimulated by the judgment of the Court of Appeal (consisting of the same panel of judges) in Leung Chun Kwong v Secretary for the Civil Service,[119] handed down three days before the start of this appeal. Ms Rose QC objected on the ground that QT had not had any opportunity to consider or respond to the new argument either evidentially or in written submissions. She pointed out that Cheung CJHC was careful to explain[120] that the Court of Appeal was taking an entirely different tack in Leung Chun Kwong and that their Lordships had deliberately refrained in the present case from dealing with the rationale now sought to be advanced by Lord Pannick QC.[121] It is therefore a rationale that forms no part of the Court of Appeal’s reasoning in the present case. We agree with the objection taken by Ms Rose QC and will confine the Director to his case based on the “talent”, immigration control and “bright line” aims referred to above. D.4 Is the Policy rationally connected to the legitimate aims? 90. It is at this point that the Director encounters major difficulties justifying the Policy. In cases like the present, the sponsor has been granted an employment visa presumably because he or she has the talent or skills deemed needed or desirable. Such a person could be straight or gay. The Policy is, as the Director has stated, aimed at encouraging such persons to join our workforce “by giving them the choice of bringing in their dependants to live with them in Hong Kong”. As is evident from the attempted intervention of the Banks and Law Firms, the ability to bring in dependants is an important issue for persons deciding whether to move to Hong Kong. But, as Ms Rose QC submitted, it runs wholly counter to the Director’s stated aim to say: “You can bring in your partner provided that he or she is straight and would be viewed as married validly under Hong Kong law”. Such a policy is counter-productive and plainly not rationally connected to advancing the “talent” aim. 91. It is similarly hard to see how the Policy’s exclusion of persons who are bona fide same-sex dependants of sponsors granted employment visas promotes the legitimate aim of strict immigration control. As Cheung CJHC put it in the Court of Appeal: “Maintaining a strict, stringent immigration policy means, in the present context, controlling both the quantity and quality of the entrants to Hong Kong. In terms of quantity, under the policy, each foreign worker is only entitled to apply to bring one spouse to join him or her in Hong Kong. Whether that spouse is of the same sex or different sex is neither here nor there. In terms of quality, whether the spouse is heterosexual or gay cannot possibly be relevant. Thus analysed, the restriction to heterosexual spouses does not advance the aim of maintaining a strict or stringent immigration policy ...”[122] 92. Similarly, as Poon JA pointed out: “... the Director’s avowed aim of balancing (a) the encouragement of talented people to live and work in Hong Kong with (b) the maintenance of stringent immigration control applies just as much to talented homosexual people as it does to talented heterosexual people. Simply put, the Director’s avowed aim of striking the balance is applicable to all potential talented people that Hong Kong wishes to attract irrespective of their sexual orientation. Yet the Eligibility Requirement only permits heterosexual married people to bring their spouses with them. Thus analyzed, the Eligibility Requirement is inconsistent with the Director’s avowed aim.”[123] 93. Clearly, the Policy is not rationally connected with the legitimate objective of strict immigration control. 94. We turn next to the Director’s aim of facilitating the administration of immigration controls by laying down clear or bright lines to determine “which categories of person can be allowed into Hong Kong and on what conditions or restrictions”.[124] 95. That it is helpful to have bright demarcating lines is acceptable as a general proposition but with the qualification that certain areas of administrative discretion do not lend themselves to being governed by hard-edged rules. Thus, for instance, as Lord Hoffmann held in Re G (Adoption: Unmarried Couple),[125] the paramountcy of the interests of the child in an adoption case made it irrational to adopt any bright line test: “A bright line rule cannot be justified on the basis of the needs of administrative convenience or legal certainty, because the law requires the interests of each child to be examined on a case-by-case basis.” 96. That applies to some extent to the Policy. In putting forward the “bright line” aim, the Director has in mind the convenience of drawing a demarcating line based on production of a marriage certificate. But the line is not quite so bright or simple since the conditions of eligibility include “reasonable proof of a genuine relationship between the applicant and the sponsor”, bogus marriages being a practical concern,[126] and require evidence that “the sponsor is able to support the dependant's living at a standard well above the subsistence level and provide him/her with suitable accommodation in the HKSAR.”[127] 97. But even purely at the level of convenience, QT and SS are just as conveniently able to produce their civil partnership certificate. Excluding them on the basis of administrative convenience is irrational. 98. More substantively, the rationality in question is not about the convenience of drawing of bright lines but about the rationality of the demarcation. We are back to the question of why the line is drawn, not how clearly it can be drawn. Thus, in James v Eastleigh Borough Council,[128] the Council sought to justify its policy of free admission to a public swimming pool for women aged 60 and over while levying admission charges on men until they reached the age of 65, on the basis that it had acted with the best intentions and that it was administratively convenient to use pensionable ages as the criterion. That did not convince Lord Bridge of Harwich who stated: “The criterion of pensionable age was a convenient one to apply because it was readily verified by possession of a pension book or a bus pass. But the purity of the discriminator's subjective motive, intention or reason for discriminating cannot save the criterion applied from the objective taint of discrimination on the ground of sex.”[129] 99. Given that the Policy cannot be justified as a measure rationally connected to the avowed “talent” and “immigration control” objectives, it is not saved by the “bright line” aim. D.5 The standard of review 100. As we have concluded, in agreement with the Court of Appeal,[130] that the Policy is not rationally connected with the Director’s declared legitimate aims, it is unnecessary to go on to consider the applicable standard of review. However, as the issue has been fully argued some discussion may be helpful. 101. The usual standard of review in proportionality analyses (applicable to the justification exercise in equality cases) is that of reasonable necessity: the challenged policy or measure (assuming it to be rationally linked to the promotion of a legitimate aim) may be permitted to encroach upon the protected right only to an extent that is no more than reasonably necessary. It is the usual standard since, as pointed out in Hysan:[131] “... it reflects the essential purpose of the exercise: the Court’s endeavour to accommodate acceptable limitations of constitutional rights in the pursuit of a legitimate societal interest while preserving to the maximum extent the guarantees laid down in the constitution.” 102. Applying that standard, if a less intrusive measure could have been employed without unacceptably compromising the legitimate objective, the measure is held to be disproportionate. 103. In the present case, the issue is whether the reasonable necessity standard remains applicable (as QT submits) or whether (as the Director contends) the appropriate standard is the higher-threshold “manifest standard” whereby the Court will only intervene if satisfied that the Policy is “manifestly without reasonable foundation”. The difference in the intensity of review applicable under each of these standards and the factors influencing the court’s choice between them are discussed in Hysan.[132] 104. The Director submits that the “manifest standard” applies in the present case because determining who should be admitted into Hong Kong as a dependant involves the formulation of social or economic policy, in respect of which the executive branch of government is undoubtedly acknowledged to have a wide margin of discretion.[133] 105. However, as Ma CJ noted in Fok Chun Wa:[134] “The proposition that the courts will allow more leeway when socio-economic policies are involved, does not lead to the consequence that they will not be vigilant when it is appropriate to do so or that the authorities have some sort of carte blanche . After all, the courts have the ultimate responsibility of determining whether acts are constitutional or lawful. It would be appropriate for the courts to intervene (indeed they would be duty-bound to do so) where, even in the area of socio-economic or other government policies, there has been any disregard for core-values.” (Italics supplied) 106. The “core values” mentioned by Ma CJ are often referred to as the “suspect or prohibited grounds” identified in Art 22 of the Bill of Rights as including “any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status”.[135] It is clear that discrimination on the ground of sexual orientation is included within this assemblage of suspect grounds, sexual orientation falling within the words “other status”.[136] 107. Discrimination on any of those grounds is regarded as especially pernicious because, as Lord Walker pointed out in Carson:[137] “They are personal characteristics (including sex, race and sexual orientation) which an individual cannot change (apart from the wholly exceptional case of transsexual gender reassignment) and which, if used as a ground for discrimination, are recognised as particularly demeaning for the victim.” 108. Accordingly, where a person is subjected to differential treatment on any of the suspect grounds, including sexual orientation, the government’s margin of discretion is much narrowed and the court will subject the impugned measure to “particularly severe scrutiny”.[138] That does not mean that the measure can never pass muster, but it will require the government to provide “very weighty reasons” or “particularly convincing and weighty reasons”[139] to justify the challenged difference in treatment, applying the standard of reasonable necessity. 109. Since the Director has conceded that if held to be discriminatory, the Policy subjects QT to indirect discrimination on the suspect ground of her sexual orientation, the Court would have applied that the reasonable necessity standard applies as part of the justification exercise. However, since we have held that a rational connection does not exist, it would make little sense to seek to examine in any detail whether the Policy goes beyond what is reasonably necessary to attain the avowed legitimate aims. The absence of a rational connection also makes it unnecessary to consider the fourth step in the proportionality analysis. E. Conclusion 110. Our answers to the Questions set out above,[140] are as follows: (a) Question 1: No, this is not an absolute bar. (b) Question 2: We do not accept that differential treatment requires no justification if based on marital status and if said to involve core rights and obligations unique to marriage. (c) Question 3: The appropriate standard of review is case-specific and in the present case would be the standard of reasonable necessity. The Director has not justified the differential treatment in the present case. 111. For the foregoing reasons we dismiss the appeal. We make an order nisi that the costs of the appeal be borne by the Director and that the respondent’s own costs be taxed in accordance with the Legal Aid Regulations. We direct that if a different order for costs is sought, either party be at liberty to lodge written submissions on the question of costs within 14 days of the date of this judgment and that the other party be at liberty to lodge written submissions in reply within 14 days thereafter. In default of such submissions, the order nisi is to stand as an order absolute without further direction. It remains for us to thank Counsel for their most helpful submissions. Lord Pannick QC, Mr Stewart Wong SC and Ms Grace Chow, instructed by the Department of Justice, for the Respondent (Appellant) Ms Dinah Rose QC and Mr Timothy Parker, instructed by Vidler & Co., assigned by the Director of Legal Aid, for the Applicant (Respondent) [1] Originally the applicant for judicial review. [2] Cap 115. [3] Guidebook for Entry for Residence as Dependants in Hong Kong, Form ID(E) 998 (4/2015) published by the Immigration Department, at §4. [4] Ibid at §5. [5] Affirmation of Wong Mo Cheong Wilson, dated 5 February 2015, at §16. [6] Ibid at §17. [7] As explained in the decision in Associated Provincial Picture Houses Ltd. v Wednesbury Corporation [1948] 1 KB 223. [8] Contained in the Hong Kong Bill of Rights Ordinance (Cap 383). [9] Art 25 of the Basic Law and Art 22 of the Bill of Rights are set out in Section D.2 of this judgment. [10] HCAL 124/2014, (11 March 2016) at §§18-97 (ground 1); §§98-99 (ground 2) and §§100-102 (ground 3). [11] Cheung CJHC, Lam VP and Poon JA, CACV 117/2016 (25 September 2017). [12] Court of Appeal §60. [13] With whom Cheung CJHC and Lam VP, delivering concurring judgments, agreed. [14] Court of Appeal §§126 and 132. [15] CFI §34; Court of Appeal §§45 and 134. [16] Court of Appeal §136. However, the suggestion that the Director is obliged to give effect to marital status as defined by Hong Kong law (adopted by Au J at §39 of his judgment) is wrong in law, as everyone now accepts. [17] Court of Appeal §§139-148; and at §§30-32 in the concurring judgment of Cheung CJHC. [18] Court of Appeal §148. [19] Section D.2 of this judgment. [20] Court of Appeal §149. [21] CACV 117/2016 (4 December 2017). [22] Ma CJ, Ribeiro and Fok PJJ, QT v Director of Immigration, ABN Amro Bank NV & Ors (Intended Interveners) FACV 1 of 2018 [2018] HKCFA 17 (30 April 2018). [23] Article 154 materially provides: “The Government of the Hong Kong Special Administrative Region may apply immigration controls on entry into, stay in and departure from the Region by persons from foreign states and regions.” [24] Immigration Ordinance, section 7. [25] Section 11(2): “Where permission is given to a person to land or remain in Hong Kong, an immigration officer or immigration assistant may impose (a) a limit of stay; and (b) such other conditions of stay as an immigration officer or immigration assistant thinks fit, being conditions of stay authorized by the Director, either generally or in a particular case.” [26] Section 11(5A): “An immigration officer or a chief immigration assistant may at any time by notice in writing to any person other than a person who enjoys the right of abode in Hong Kong, or has the right to land in Hong Kong by virtue of section 2AAA (a) cancel any condition of stay in force in respect of such person; (b) vary any condition of stay (other than a limit of stay) in force in respect of such person if the condition as varied could properly be imposed by an immigration officer or a chief immigration assistant (other than the Director) under subsection (2)(b); (c) vary any limit of stay in force in respect of such person by enlarging the period during which such person may remain in Hong Kong.” [27] Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997 at 1030. [28] C v Director of Immigration (UNHCR Intervening)(2013) 16 HKCFAR 280 at §72. [29] Ibid at §§18-21. [30] [2003] 2 AC 295 at §73. [31] [1998] AC 539 at 591. As Lord Mustill explained in R v Secretary of State for the Home Department, Ex parte Doody [1994] 1 AC 531 at 560D-F, the standards of fairness depend on the circumstances and context of the decisions sought to be impugned. [32] [1999] 1 AC 98 at 109. [33] Ghaidan v Godin-Mendoza [2004] 2 AC 557 at §132. [34] Referring to the line of authority stemming from Associated Provincial Picture Houses, Limited v Wednesbury Corporation [1948] 1 KB 223. [35] Section D.2 of this judgment. [36] (2013) 16 HKCFAR 112 at §§48-49, 80 and 117. [37] Cap 181. Section 40: “(1) Every marriage under this Ordinance shall be a Christian marriage or the civil equivalent of a Christian marriage. (2) The expression ‘Christian marriage or the civil equivalent of a Christian marriage’ implies a formal ceremony recognized by the law as involving the voluntary union for life of one man and one woman to the exclusion of all others.” [38] Thus section 20(1)(d) of the Matrimonial Causes Ordinance (Cap 179) provides that one of the grounds for a decree of nullity is “that the parties are not respectively male and female”. [39] ECHR Art 12: “Men and women of marriageable age have the right to marry and to found a family, according to the national laws governing the exercise of this right.” [40] Schalk and Kopf v Austria (2011) 53 EHRR 20 at §101; Hamalainen v Finland (2014) 37 BHRC 55 at §71; Chapin and Charpentier v France (Application no 40183/07, 9 June 2016) at §36. [41] [2006] 1 AC 173 at §49. [42] [2004] 2 AC 557 at §9. [43] Ibid. [44] Per Lord Nicholls in Ghaidan v Godin-Mendoza [2004] 2 AC 557 at §9. This was referred to by Li CJ in Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335 at §19. [45] (2008) 47 EHRR 3 at §175. The mention of “correcting inequalities” may be thought also to be a reference to positive discrimination, which does not come within the present discussion. [46] ECHR Art 14: “The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.” [47] [2009] UKPC 52 at §§13-15. [48] [1990] 2 AC 751, a case brought under the UK’s Sex Discrimination Act 1975. [49] (2001) 31 EHRR 15. [50] Rodriguez v Minister of Housing of the Government [2009] UKPC 52 at §§13-15. [51] [2013] 1 WLR 3741 at §33, a case under the Equality Act (Sexual Orientation) Regulations 2007. [52] For a Hong Kong example, see Leung William T C Roy v Secretary for Justice [2006] 4 HKLRD 211 at §48. [53] See Rodriguez v Minister of Housing of the Government [2009] UKPC 52 at §16. [54] As noted in Section C.5 below, the Director also issues dependant visas to spouses of polygamous marriages, invalid under Hong Kong law. [55] Appearing for the Director with Mr Stewart Wong SC and Ms Grace Chow. [56] Shackell v United Kingdom (Application no 45851/99, 27 April 2000); Burden v United Kingdom (2008) 47 EHRR 38; X v Austria (2013) 57 EHRR 14; Gas v France (2014) 59 EHRR 22. [57] Rodriguez v Minister of Housing of the Government [2009] UKPC 52. [58] (2008) 47 EHRR 38. [59] [2009] UKPC 52 at §17. [60] R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173 at §63, citing Lord Nicholls of Birkenhead in Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] ICR 337 at §11. [61] Ibid, at §68. [62] Ibid, at §§15 and 16. [63] [2004] 2 AC 557 at §17. [64] At §142. [65] Wilkinson v Kitzinger [2006] EWHC 2022 (Fam) at §20. [66] [2013] 1 WLR 3741 at §26. [67] Hamalainen v Finland (2014) 37 BHRC 55 at §71. [68] For example, in Nylund v Finland (Application no 27110/95, 29 June 1999), 1999-VI ECHR, under Finnish law there is a presumption of paternity in favour of the husband of the mother of a child born to her during wedlock. A man who claimed to be the biological father was held not to have a right of action to demand a DNA test to disprove such paternity. His claim that his right of access to a court was infringed was rejected by the ECtHR on the ground that maintaining the presumption based on the couple’s marital status was in the best interests of the child. [69] (2014) 59 EHRR 22. [70] Ibid at §62. [71] Appearing for QT with Mr Timothy Parker. [72] (2013) 57 EHRR 14. [73] Ibid at §108. [74] Ibid §§63-64. [75] Ibid §§108-109. [76] Ibid §130. [77] Ibid §151. [78] Application no 45851/99, 27 April 2000. [79] (2008) 47 EHRR 38. [80] Section C.1. [81] (2008) 47 EHRR 38 at §65. [82] The Judge appointed by Iceland in his concurring judgment which differed on this point. [83] (2008) 47 EHRR 38 at §O-II4. [84] Ibid §65. [85] Court of Appeal §14. [86] Court of Appeal §36. [87] Court of Appeal §131. [88] Court of Appeal §16. [89] Court of Appeal §§15-28. [90] Court of Appeal §14. [91] [1999] ZACC 17 at §50. [92] (2008) 47 EHRR 21. [93] Ibid at §94. [94] Ibid at §89. [95] Ibid at §96. [96] [2009] 1 AC 173. [97] Ibid at §18. [98] Ibid at §54. [99] (2013) 57 EHRR 14. [100] (2013) 57 EHRR SE3 51. [101] See, for example, Karner v Austria (2004) 38 EHRR 24; Ghaidan v Godin-Mendoza [2004] 2 AC 557; and Rodriguez v Minister of Housing of the Government [2009] UKPC 52. [102] Affirmation of Wong Mo Cheong Wilson, dated 5 February 2015, at §19. [103] The same may be said of the Director’s policy of granting visas to “same-sex spouses or civil partners of accredited members of the consular posts” in the HKSAR, as disclosed in a letter dated 13 February 2017 from the Department of Justice to Messrs Vidler & Co. [104] (2007) 10 HKCFAR 335 at §22. [105] (2012) 15 HKCFAR 409 at §58(2). [106] R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173 at §3. [107] A v Secretary of State for the Home Department [2005] 2 AC 68 at §68. [108] R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173 at §3. [109] (2007) 10 HKCFAR 335 at §20. [110] (2012) 15 HKCFAR 409 at §56. [111] Set out in Section B.2 above. [112] Hamalainen v Finland (2014) 37 BHRC 55 at §108. See also X v Austria (2013) 57 EHRR 14 at §98; DH v Czech Republic (2008) 47 EHRR 3 at §196. [113] Eg, Ghaidan v Godin-Mendoza [2004] 2 AC 557 at §18; Rodriguez v Minister of Housing of the Government [2009] UKPC 52 at §§13 and 25; R (E) v Governing Body of JFS and another (United Synagogue and others intervening) [2010] 2 AC 728 at §57. [114] (2016) 19 HKCFAR 372. [115] BL25: “All Hong Kong residents shall be equal before the law.” [116] BOR22: “All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.” [117] Section A.2 of this judgment. Affirmation of Wong Mo Cheong Wilson, dated 5 February 2015, at §16. [118] The Director’s case was as set out in counsel’s summary referred to in Section A.5 above. Au J had also noted that the new rationale had not been advanced at first instance: Judgment at §55(4). [119] Cheung CJHC, Lam VP and Poon JA, CACV 126/2017 [2018] HKCA 318 (1 June 2018). [120] Ibid at §4. [121] This was made clear by Cheung CJHC in the Court of Appeal below (at §34): “... I say nothing about a policy with a legitimate aim to, for instance, uphold and maintain the traditional concept of (heterosexual) marriage, or the traditional family constituted by traditional (heterosexual) marriage, and the associated values. No such justification or legitimate aim was relied on. None was asserted in the evidence. Learned counsel did not put forward any such justification whether at the hearing below or on appeal before us.” [122] Court of Appeal §31. [123] Court of Appeal §139. [124] Director’s written case at §50. [125] [2009] 1 AC 173 at §16. [126] One such case being Durga Maya Gurung v Director of Immigration, CACV 1077/2001 (19 April 2002). [127] Guidebook for Entry for Residence as Dependants in Hong Kong, Form ID(E) 998 (4/2015), at §5. [128] [1990] 2 AC 751. [129] Ibid at 765-766. [130] Court of Appeal §§30-32 (Cheung CJHC) and §148 (Poon JA). [131] Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372 at §83. [132] Ibid, at §§81-123. [133] Ibid, at §§101-104 and §139, citing Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 and Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950. This reflects the wide margin of appreciation afforded States in matters of socio-economic strategy in the jurisprudence of the ECtHR. See eg, Carson v United Kingdom (2010) 51 EHRR 13 at §61; Stec v United Kingdom (2006) 43 EHRR 47 at §52. [134] Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 at §77. [135] Ibid. [136] Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 at §77; EB v France (2008) 47 EHRR 21 at §91; Karner v Austria (2003) 38 EHRR 24 at §37. [137] R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173 at §55. As Iacobucci J put it in the Canadian Supreme Court in Law v Canada (Minister of Employment and Immigration) (1999) 170 DLR (4th) 1 at §53: “Human dignity is harmed by unfair treatment premised upon personal traits or circumstances which do not relate to individual needs, capacities, or merits.” [138] Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 at §78. [139] Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372 at §111; R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173 at §58; Stec v United Kingdom (2006) 43 EHRR 47 at §52; EB v France (2008) 47 EHRR 21 at §91; AL (Serbia) v Secretary of State for the Home Department [2008] 1WLR 1434 at §29; Humphreys v Revenue and Customs Commissioners [2012] 1 WLR 1545 at §16; and Taddeucci and McCall v Italy (Application no 51362/09, 30 June 2016) at §89. [140] In Section A.6 of this judgment.
Chief Justice Ma: A INTRODUCTION 1. The present appeal involves a consideration of the court’s approach in applications for ancillary relief under s 4 of the Matrimonial Proceedings and Property Ordinance Cap 192 (“the MPPO”)[1] where, in the assessment of the financial resources of the parties to a marriage, it is relevant to take into account the financial assistance provided by third parties to the husband or wife. In particular, it will be necessary to consider the extent to which (if at all) the court, when making such orders, is able to encourage third parties to provide such financial assistance so as to enable the husband or wife to meet his or her ancillary relief obligations. This latter point involves a consideration of what has become known as “judicious encouragement” in matrimonial law. 2. Financial assistance from third parties can of course take various forms, anything from the payment of money or transfer of property to the meeting of liabilities. What is involved here is the court’s approach in taking into account property or financial resources to which the husband or wife has or is likely to haveaccess, but to which (until the property or financial resources are transferred) that party has no legal entitlement. Thus, for example, trust property to which a husband or wife has a legal entitlement, do not present any difficulties: such property will certainly be taken into account in ascertaining that party’s assets. It is where discretionary trusts are involved or where, as in the present case, the financial assistance has come from a party’s relatives (in the present case, the parents), that difficulties may sometimes be encountered. 3. The relevant provisions in the MPPO are s 4 (applications for periodical payments and lump sum orders following a divorce, a decree of nullity or a decree of judicial separation) and s 7(1) (matters which a court must take into account when deciding applications under ss 4, 6 or 6A of the Ordinance).[2] 4. In the present case, after a trial in the Family Court[3] (HH Judge CK Chan), it was ordered that the Husband (the petitioner) make periodical payments of $14,000 a month to the Wife (the respondent) from 1 November to the end of 2010, thereafter such periodical payments to be increased to $21,000 a month until the death of either party or the remarriage of the Wife, whichever is earlier, or until further order. No lump sum was ordered. On appeal, the Wife’s appeal was allowed and the Court of Appeal[4] ordered that periodical payments of $42,500 a month be made to the Wife starting from 1 November 2010 until the death of either party or the remarriage of the Wife, whichever is earlier, or until further order. A lump sum of $1.5 million was also ordered to be paid by the husband within one year. 5. Before dealing with the applicable law and then applying it in the present case, I must first set the scene by identifying the relevant facts and the context of this appeal. B FACTS 6. The general facts are amply set out in the judgments of the Family Court (dated 19 October 2010) and the Court of Appeal (dated 2 December 2011). The Chief Judge described the case as “a particularly sad case”. The parties met in the early 1990s when still in their teens, eventually marrying in 2000 in London. Unfortunately, in 2002, the Wife was diagnosed with a rare intestinal condition known as “superior mesenteric artery syndrome”. Her life was described by the Chief Judge as a “nightmare” for her and her family. When the matter came to trial in June 2010, the Wife had undergone some 10 operations since 2002, during which a large part of her digestive system had been removed. She weighed 70 lbs at trial. She was on heavy medication and was confined to her home. She was under the care of two experts in gastro-intestinal diseases and another for her genital prolapse. The experts are of the view that it is unlikely the Wife will be able to lead a normal life: it is not surprising she also suffered from depression and other psychiatric problems. Her mother acts as her guardian ad litem in the present litigation. 7. With the Wife’s condition as it was, until 2006, the Husband remained at her side and they were very much attached to each other. He kept her company during her treatment in Hong Kong and abroad. In late 2006, however, the Husband told the Wife and her family that he needed a break to re-establish his working career. They separated and the Husband moved back inwith his parents. 8. On the financial side, the trial Judge recorded the Husband’s employment history as follows[5] : - “(1) The Husband’s Harvard degree was obtained in 1998. After graduation, he worked with a company called A for a short period of time at the salary of $24,000 per month. He left the company in 1999 to care for the Wife who told him that she had cancer, which was untrue. (2) He worked for another company called NH in February 2001 but left upon the request of the Wife as she did not like being alone. (3) After rejoining NH in 2002, the Husband changed to part time in January 2003 after the Wife’s first operation in November 2002. (4) From December 2003 to March 2004, the Husband accompanied the Wife to a Clinic in the USA for treatment. (5) In April and May 2004, the Husband and Wife were in Vancouver for faith healing. (6) From September to December 2004, the Husband and Wife attended a faith healing church in Texas. (7) The parties separated in 2006 after which the Husband returned to work for NH in May 2006 but left in February 2007 as the business did not prosper. (8) In 2007, the Husband studied for the Securities and Future Commission Paper 1 Exam and obtained a license for Dealing in Securities, Advising in Securities and Asset management in March 2008. (9) In January 2009, the Husband attended an Executive MBA program at the HKUST with sponsorship from his father and graduated in May 2010. (10) On 24 February 2009, he commenced his present employment at a salary of $15,000 per month, to be increased to about $30,000 to $40,000 by the end of this year.” 9. I shall deal with the Husband’s earning capacity later in this judgment (for the Court of Appeal took a different view in analyzing this aspect to that of the trial Judge) but highlight at this stage one factual point. Apart from being a Harvard graduate, the Husband possesses impressive financial qualifications. In particular, he graduated in 2010 with an Executive MBA degree, having attended the Kellogg/HKUST Business School. The EMBA course at this School is one of the most prestigious courses of its kind and, in terms of salary, on average, graduates with this degree commanded the highest starting salaries in the financial sector. Mr Russell Coleman SC (who represents the Husband) drew our attention to a chart compiled by the Financial Times dealing with EMBA rankings for 2012. This chart indicated that the three-year average annual salary for graduates with a Kellogg/HKUST EMBA was US$465,774, the highest by far of the top 100 business schools world-wide. At trial, the figure contained in the FT chart then available was US$345,111. 10. Earning capacity aside, both parties to the marriage enjoyed significant financial support from their own parents. 11. The Husband’s parents, both in their seventies, come from a well-known family in Hong Kong. The trial Judge made a finding that they could not be regarded as being in the “extremely rich” category. However, it is clear that they have been supportive of the couple before the separation in 2006, and since then – indeed all along – they have continued generously to support the Husband:- (1) They paid for the wedding reception at the Shangri-la Hotel in August 2001. (2) The Husband’s parents also met the bills for the credit cards of the couple (the Wife had four supplementary cards) when they were still together. The parents did not give evidence at trial but the Wife’s parents did. Their testimony was to the effect that the Husband’s parents had given financial support in the past so as to allow the couple to lead a reasonably high standard of living. The Husband was able to buy expensive items for the wife; at trial a list was compiled showing that designer goods were purchased having a value of over $1.13 million. (3) After the couple separated, the Husband’s parents continued to support him and did so generously as they had done previously. The trial Judge did not provide many details of this (other than to make an important finding to which I shall refer below), but the judgments of the Court of Appeal are more revealing:- (a) Cheung CJHC referred to the fact that documents showed that between 2005 and 2010, the Husband had a total of over $7 million deposited into his account, even though his total salary over that period came to just over $400,000. This gave him an annual income of nearly $1.5 million. Over the same period, the withdrawals from his bank account amounted to $8.28 million; this equated to an annual average of $1.74 million. The Husband’s credit card bills were paid by his father: in the few years prior to the Court of Appeal hearing, this amounted to just less than $1 million. Between 2006 and 2008, the Husband received gifts from his mother amounting to nearly $1.6 million. (b) In the judgment of Peter Cheung JA, reference was also made to the fact that the Husband’s parents had paid the entrance fees to enable him to join the Hong Kong Jockey Club ($250,000) and the Hong Kong Country Club ($75,000). His medical expenditure was taken care of by the parents and they also repaid loans made to the Husband by his friends. Although the Husband lived with his parents (at one stage this included staying at a penthouse flat in Repulse Bay), his monthly expenditure at the time of the Court of Appeal hearing was $45,900. Since the evidence from the Husband indicated that his monthly income was only $14,000, there was a shortfall of some $31,900. Peter Cheung JA inferred that this must have been funded by his parents or from some other undisclosed source.[6] (4) Reference has already been made to the Husband having attended an EMBA course at the Kellogg/HKUST Business School[7]. The fees for this course, amounting to $755,000, were paid for by the Husband’s parents. 12. Judge C K Chan found, as a fact that the financial support given by the Husband’s parents to him would continue. In para 86 of his judgment, it is stated, “There is no reason to believe that such support will not be continued”. The same point was made by Cheung CJHC in his judgment[8]. 13. The trial Judge also dealt with the financial support that had been given to the parties by the Wife’s parents both during the subsistence of the marriage and after they had separated in 2006. This was expected to continue. After the couple separated in 2006, the Wife became completely dependent on her parents. Her Father, a medical doctor, paid for all of her living and medical expenses following the separation. By the end of 2009, these expenses totalled slightly below $1.7 million. By the time of trial (June 2010), these expenses amounted to over $2.4 million. These payments made by the Wife’s parents are relevant to the issue whether the Court of Appeal was correct to order a lump sum payment of $1.5 million from the Husband to the Wife. C THE PROCEEDINGS BELOW C.1 The Family Court 14. On 3 November 2008, the Husband petitioned for divorce based on 2 years’ separation. A decree nisiwas granted on 24 March 2009. The Wife made an application seeking a number of forms of ancillary relief. We are now concerned with only two: the periodical payments order and the lump sum order. Both orders were made under s 4(1) of the MPPO.[9] 15. Following a three day trial in the Family Court, Judge CK Chan made an order only for periodical payments, dismissing the application for other forms of ancillary relief including a lump sum payment. The Judge was of the view that although the Wife’s needs amounted to $42,500 a month (taking into account her physical condition: see ss 7(1)(b) and (e) of the MPPO[10]), the Husband’s ability to pay was such as to justify no more than an order of $14,000 a month. It is to be observed here that the Judge was looking at the question of periodical payments only from the point of view of the Husband’s ability to pay for the Wife’s needs. This was stated by the Judge to be the issue before the Family Court. There was therefore no question of any account to be taken of the Wife’s financial resources in this regard. 16. The sum of $14,000 a month represented the Husband’s offer to pay what was then his monthly salary. The reason in the increase in the periodical payments to $21,000 a month as from 1 January 2011 was the anticipated increase in the Husband’s salary to the $30-40,000 range from the beginning of 2011. 17. The Judge’s assessment was based on his view of the Husband’s earning capacity. He rejected the Wife’s submissions to the effect that his earning capacity was more. The Judge also took no account of the financial assistance the Husband had been receiving from his parents. As stated earlier, the Judge made a finding that the Husband’s parents were not in the “extremely rich” category. In para 73 of his judgment, the Judge said this:- “However, as can be seen from the earlier part of this judgment, the court has already ruled that the Husband’s parents are not extremely rich people as believed by the Wife, therefore, the notion of judicious encouragement has no place in this judgment.” C.2 The Court of Appeal 18. The Wife’s appeal was allowed by the Court of Appeal; the periodical payments to be made by the Husband were increased to $42,500 a month and a lump sum payment of of $1.5 million was also ordered.[11] 19. Essentially, the Court of Appeal was of the view that the Judge had first erred in his analysis of the Husband’s earning capacity: on the available facts, his income of only $14,000 a month at the time of the trial was seen to be unacceptably low. 20. Secondly, the Court of Appeal was of the view that the Judge was wrong to ignore the very significant financial support given by the Husband’s parents to the Husband. As both the Chief Judge and Peter Cheung JA found, the Husband’s “affluent lifestyle” continued to be funded by his parents. 21. As for the lump sum payment of $1.5 million that was ordered to be paid by the Husband, the reasoning of the Court of Appeal can be seen from para 51 of the judgment of the Chief Judge:- “As regards the amount, having looked at the entire circumstances, including in particular the Wife’s needs, the amount that her parents have expended on her whether before or after the 2006 separation, the length of the marriage and the fact that no children are involved, I take the view that a lump sum of $1.5 million would be a fair and reasonable amount.” 22. This element of a repayment to take into account the financial support of the Wife’s parents is also clear in the judgment of Peter Cheung JA (at para 66 of his judgment). He was of the view that at least a part of the support that had been provided by the Wife’s parents, ought to have come from the Husband in the first place (see para 64 of the judgment). D THE ISSUES ON APPEAL D.1 The questions 23. On 1 June 2012,the Appeal Committee granted leave on the basis thatthe following questions were of great, general or public importance:- “(1) Whether, or in what circumstances, third party resources which have been available to a party in the past (at the discretion of the third party) can properly be taken into account for the purpose of assessing the financial resources and obligations of that party for the purposes of sections 7(1)(a) and (b) of the Matrimonial Proceedings and Property Ordinance (“MPPO”) in the application of section 4(1)(b) of the MPPO and lump sums? (2) Whether, or in what circumstances, third party resources which have been available to a party in the past (at the discretion of the third party) can properly be taken into account for the purpose of assessing the financial resources and obligations of that party for the purposes of sections 7(1)(a) and (b) of the MPPO in the application of section 4(1)(a) of the MPPO and periodical payments?” D.2 The issues to be determined in this appeal 24. The two questions raise the issue of the court’s approach when assessing the financial resources of the parties to a marriage for the purpose of determining the appropriate ancillary relief to be granted, where third party assistance to the parties to the marriage is involved. Subsumed in this issue is a consideration of the so-called concept of “judicious encouragement”. This is the main point of principle in the appeal. The application of the law to the facts is the other issue which flows from the main issue. 25. It is these two issues I must now address. E. ISSUE 1: TREATMENT OF THIRD PARTY ASSISTANCE IN APPLICATIONS FOR ANCILLARY RELIEF UNDER S 4 OF THE MPPO E.1 The statutory context 26. I have already (in paras 1 and 2 above) identified the particular factual situation with which this issue is concerned. It involves a consideration of the extent to which the court, in an application for ancillary relief under s 4 of the MPPO, can take into account financial assistance given by third parties to the parties to a marriage. 27. It is, however, important at the outset to identify the proper statutory context. 28. In terms of ancillary relief, the relevant statutory provisions are contained in Part II of the MPPO. The granting of orders for periodical payments and lump sum payments is referred to in s 4(1):- “(1) On the granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may, subject to the provisions of section 25(1), make any one or more of the following orders, that is to say – (a) an order that either party to the marriage shall make to the other such periodical payments and for such term as may be specified in the order; (b) an order that either party to the marriage shall secure to the other to the satisfaction of the court, such periodical payments and for such term as may be so specified; (c) an order that either party to the marriage shall pay to the other such lump sum or sums as may be so specified.” 29. In dealing with applications for ancillary relief under ss 4, 6 or 6A of the MPPO, the approach of the court is spelt out in the all-important s 7(1):-[12] “(1) It shall be the duty of the court in deciding whether to exercise its power under section 4, 6 or 6A in relation to a party to the marriage and, if so, in what manner, to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say— (a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future; (b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future; (c) the standard of living enjoyed by the family before the breakdown of the marriage; (d) the age of each party to the marriage and the duration of the marriage; (e) any physical or mental disability of either of the parties to the marriage; (f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family; (g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.” 30. This provision provides a statement of the court’s duty in deciding whether or not to exercise its powers under ss 4, 6 or 6A of the Ordinance. It also spells out how such powers are to be exercised, having regard to the conduct and all relevant circumstances including the matters enumerated in sub-paras (1)(a) to (g). Sub-paras 1(a), (b) and (e) are of particular relevance in this case. 31. In LKW v DD (2010) 13 HKCFAR 537, this Court gave authoritative guidance both in terms of principle and approach in the treatment of applications for ancillary relief. We are concerned in the present appeal mainly with Step 1[13], namely, the identification of the assets of the parties to the marriage. Step 2[14] is not contentious in this appeal, and Steps 3[15] and 4[16] are not relevant. Step 5[17] (deciding the outcome) is obviously also involved. 32. Step 1 involves the application of s 7(1)(a) of the MPPO. E.2 The identification of the parties’ financial resources 33. Section 7(1)(a) is stated in wide terms. Two points are of note:- (1) The court is not restricted to taking into account only those assets which in law represent the property of either spouse. Section 7(1)(a) is widely drafted to include “other financial resources” of the parties. These resources will therefore include those assets or resources to which the relevant spouse has or is likely to have access but to which he or she may not have a legal entitlement. (2) Nor is the court constrained to look only at the present position. The court looks into the financial resources which a party actually has (or should have[18]) at present or which that party is likely to have in the foreseeable future. E.3 Treatment of financial assistance from third parties under s 7(1)(a) 34. The width of the wording of s 7(1)(a) of the MPPO will include financial assistance made by third parties to the parties to a marriage. Accordingly, such assistance made by a third party to the husband or wife may be taken into account in the computation of that party’s overall financial resources. 35. As stated in para 2 above, such third party assistance may take various forms. The authorities, to which I shall presently turn, show commonly trust situations or where relatives have provided financial assistance. There are of course other factual situations. 36. In every case where third party assistance is involved, there are two critical evidential questions for the court to consider:- (1) What is the extent of the financial assistance provided by the third party to the husband or wife? (2) What is the likelihood of such financial assistance continuing in the foreseeable future? 37. It goes without saying that in the fact finding exercise, the court must look at the reality of the situation and have regard to matters of substance and not just form. In looking at reality, the court can take into account not only what a party actually has, but also what might reasonably be made available to him or her if a request for assistance were to be made. In O’D v O’D [1976] Fam 83, which involved the court taking into account the financial support given to the husband by his father, Ormrod LJ said at 90 D-E “In making this assessment the Court is concerned with the reality of the husband’s resources, using that word in a broad sense to include not only what he is shown to have, but also what could reasonably be made available to him if he so wished”. 38. In addition, in looking at what may occur in the foreseeable future, past conduct is often a useful guide: see SR v CR (Ancillary Relief: Family Trusts) [2009] 2 FLR 1083, at 1091 (para 27). 39. Having ascertained the extent of the financial assistance provided by the third party and then finding on the evidence on a balance of probabilities that there is a likelihood of the continuation of such financial assistance in the foreseeable future, the court is then in a position in law first to take this into account in the identification of the financial resources of the parties and secondly, in determining the appropriate ancillary relief to be granted. This is an approach that is entirely consistent with the court’s duty under s 7(1) of the MPPO. Needless to say, the outcome in any given case is inevitably fact-sensitive. E.4 Judicious encouragement 40. So far, the approach set out in section E.3 is, I would suggest, non-controversial. To what extent is it then permissible for the court to frame its orders in such a way so as to encourage third parties to provide or continue to provide financial assistance to the husband or wife (as the case maybe) for the purpose of enabling his or her ancillary relief obligations to be met? Here, the position becomes more problematic and controversial, and this has in my view led to some confusion among judges and practitioners. I am here referring to the concept of “judicious encouragement”. 41. To start with, the term itself is ambiguous. If one starts from the premise that save in exceptional circumstances[19], court orders can only apply to parties to a litigation and not non-parties, it is difficult to see where the concept of “judicious encouragement” fits as a matter of principle. Courts make orders that are intended to bind and if necessary, to be enforced. It is difficult to conceive of a situation where an order of the court merely “encourages” compliance, and all the more so in relation to a non-party. 42. The origin of the term “judicious encouragement” is the judgment of Waite LJ in the decision of the English Court of Appeal in Thomas v Thomas [1995] 2 FLR 668, where, at 670F-671A, it is said:- “But certain principles emerge from the authorities. One is that the court is not obliged to limit its orders exclusively to resources of capital or income which are shown actually to exist. The availability of unidentified resources may, for example, be inferred from a spouse’s expenditure or style of living, or from his inability or unwillingness to allow the complexity of his affairs to be penetrated with the precision necessary to ascertain his actual wealth or the degree of liquidity of his assets. Another is that where a spouse enjoys access to wealth but no absolute entitlement to it (as in the case, for example, of a beneficiary under a discretionary trust or someone who is dependent on the generosity of a relative), the court will not act in direct invasion of the rights of, or usurp the discretion exercisable by, a third party. Nor will it put upon a third party undue pressure to act in a way which will enhance the means of the maintaining spouse. This does not, however, mean that the court acts in total disregard of the potential availability of wealth from sources owned or administered by others. There will be occasions when it becomes permissible for a judge deliberately to frame his orders in a form which affords judicious encouragement to third parties to provide the maintaining spouse with the means to comply with the court’s view of the justice of the case. There are bound to be instances where the boundary between improper pressure and judicious encouragement proves to be a fine one, and it will require attention to the particular circumstances of each case to see whether it has been crossed.” (emphasis added) 43. The italicized words appear to introduce a principle to the effect that a court may somehow frame its orders in a way that will encourage third parties to provide financial assistance sufficient to enable a spouse to meet his or her ancillary relief obligations in accordance with the court’s view of the justice of the matter. 44. It is this concept that in my view has caused unnecessary confusion among judges and practitioners. If this was intended to be a statement of principle, it appears at first sight simply to ignore:- (1) The statutory requirement contained in s 7(1)(a) of MPPO that only assets or financial resources which a party “has or is likely to have in the foreseeable future” should be taken into account. It is difficult to see how a third party who is “encouraged” (albeit in a judicious way) comfortably fits into this rubric. (2) The point made in para 41 above in relation to court orders affecting non-parties. 45. The italicized words in Thomas were made without any discussion of principle. Certain authorities were cited to the Court of Appeal in that case and it is illuminating to see the summary of the effect of those cases contained in the judgment of Glidewell LJ in Thomas (it is to be noted there is no reference to “judicious encouragement” in this passage). At 677H-678D, it was said:- “The judge also had, as we have, the guidance to be derived from the various authorities to which Waite LJ has referred. Those which are the most helpful in this case are, in my view, the decisions of this court in O’D v O’D [1976] Fam 83, B v B (1982) 3 FLR 298 and Browne v Browne [1989] 1 FLR 291. From these authorities I derive the following principles: (a) Where a husband can only raise further capital, or additional income, as the result of a decision made at the discretion of trustees, the court should not put improper pressure on the trustees to exercise that discretion for the benefit of the wife. (b) The court should not, however, be ‘misled by appearances’; it should ‘look at the reality of the situation’. (c) If on the balance of probability the evidence shows that, if trustees exercised their discretion to release more capital or income to a husband, the interests of the trust or of other beneficiaries would not be appreciably damaged, the court can assume that a genuine request for the exercise of such discretion would probably be met by a favourable response. In that situation if the court decides that it would be reasonable for a husband to seek to persuade trustees to release more capital or income to him to enable him to make proper financial provision for his children and his former wife, the court would not in so deciding be putting improper pressure on the trustees.” 46. In my view, the judgment of Waite LJ did not introduce any new principle along the lines stated in para 43 above, whereby third parties can be “encouraged” to provide financial assistance depending on the justice of the case. None of the authorities[20] identified in his judgment support such a view. Properly understood, in my judgment, the judgments of the Court of Appeal in that case applied the approach set out in section E.3 above: where third party financial assistance is involved, the court will first ascertain the answers to the two questions set out in para 36 above before determining the appropriate order for ancillary relief. 47. In Thomas, in the passage set out above, Waite LJ himself warned against any undue pressure being imposed on third parties. It was also said that the court would not act “in direct invasion of the rights of or usurp the discretion exercised by, a third party.” Glidewell LJ also emphasized the point that the court ought not apply undue pressure. He also referred, crucially, to the need to have regard to the likelihood of third party assistance in the foreseeable future. 48. It is extremely unlikely that the Court of Appeal in Thomas was advocating a novel approach based on “judicious encouragement”. One of the cases relied on (in both the judgments of Waite LJ and Glidewell LJ) was Howard v Howard [1945] P 1. In a passage which bears repetition, Lord Greene MR said this at 4-5:- “… In my opinion there is no jurisdiction in the Divorce Court to make an order which will leave the husband in a state of starvation (to use rather picturesque language) with a view to putting pressure on trustees to exercise their discretion in a way in which they would not have exercised it but for that pressure. Under discretionary trusts (as, indeed, under this trust) other persons are potential beneficiaries. In many such trusts the range of potential beneficiaries is a very wide one. Here it extends to any future wife that the husband may marry and the children of any future marriage. The settlement has not been varied in that respect. On what ground should pressure be put upon the trustees to exercise their discretion in such a way as to pay to the husband, in order that he may pay maintenance to his wife, sums which in their discretion they would not otherwise have paid to him? It seems to me that such an order is as bad as an order on a man to pay a sum far in excess of what he could be ordered to pay out of his own means merely to put pressure on a rich relation to support him. That is not within the scope of s. 190 of the Act. What has to be looked at is the means of the husband, and by “means” is meant what he is in fact getting or can fairly be assumed to be likely to get. I must not be misunderstood. It is, of course, legitimate (as was done in this case) to treat a voluntary allowance as something which the court can, in proper circumstances, infer will be likely to continue, and make an order on that basis. If and when the allowance is cut off, the husband can come back and apply to have the order modified. Similarly, in the case of a discretionary trust, if the court finds that the husband is in fact receiving regular payments under such a trust it is perfectly entitled to make an order on the footing that those payments will in all probability continue, leaving it to the husband to come back to the court if at some future date they are stopped. But in this case the trustees have exercised their discretion so that the husband will, as frequently happens under these discretionary trusts, get nothing. Trustees, for very good reasons, often do not give money to the husband and the only object of this order, so we are told, was to induce the trustees to change their decision as to the proper disposition and administration of this trust income. The trustees, if they were well advised, would say: “We have exercised our discretion and we refuse “to change it. It is only when circumstances alter that we “shall take them into account and exercise our discretion in “a way suitable to the altered circumstances as we can see them.” If they were to do that the husband would be left with a voluntary allowance of 150l. out of which he has to pay 100l. to the wife, who has remarried. In my opinion the practice, if it be a practice, indirectly to put pressure on trustees in this sort of way to commit a breach of their duty and to exercise their discretion in a way contrary to what they desire, is wrong. …” (emphasis added). Howard was followed in numerous subsequent cases, among them the Court of Appeal cases of B v B (Financial Provision) (1982) 3 FLR 298 and Browne v Browne [1989] 1 FLR 291. Both these cases were referred to in Thomas. 49. This is also the way in which it would appear the English courts since Thomas have consistently approached the question of third party financial assistance. While there have been references to “judicious encouragement” and to that part of the judgment of Waite LJ referred to above, the courts have concentrated on the necessity to find, on the evidence before them, not only that third parties have provided financial assistance to the husband or wife, but that it was likely this would continue in the foreseeable future:- (1) In Charman v Charman [2006] 2 FLR 422, where a discretionary trust in favour of the husband was involved, the Court of Appeal regarded it as important to ascertain the likelihood of the trustee of the discretionary trust providing financial assistance to the husband: at 427 [para [12]]. This approach was endorsed by Black LJ in her judgment in Whaley v Whaley [2011] EWCA Civ 617 at para 40. (2) In TL v ML and Others (Ancillary Relief: Claim Against Assets of Extended Family) [2006] 1 FLR 1263, Mr Nicholas Mostyn QC (now Mostyn J, then sitting as a Deputy Judge of the High Court) analyzed at some length the concept of “judicious encouragement”: see in particular paras [76]-[86]. At para [101], the learned Deputy Judge said this:- “The correct view must be this. If the court is satisfied on the balance of probabilities that an outsider will provide money to meet an award that a party cannot meet from his absolute property, then the court can, if it is fair to do so, make an award on that footing. But if it is clear that the outsider, being a person who has only historically supplied bounty, will not, reasonably or unreasonably, come to the aid of the payer, then there is precious little the court can do about it.” 50. If the true ambit of “judicious encouragement” is really no more than a restatement of the approach set out in section E.3 and in the previous paragraphs, I have no quarrel with that. However, if the term means a form of pressure on third parties to add to the relevant spouse’s resources which, on the evidence, they would not do or are unlikely to do, I would for my part reject such a concept. It is an approach which is consistent neither with principle nor with the authorities. The approach of the courts should be that as set out in section E.3 above. 51. I have said earlier that the use of the term “judicious encouragement” has caused confusion among judges and practitioners alike. The Cases lodged in the present appeal indicate some confusion as to what exactly this concept means. This is not surprising when the courts in Hong Kong have themselves been unclear as to the meaning of that term. With respect to the judgments of the Court of Appeal, it appears the judges were not very sure as to the meaning either. In FMFT v HKFE [2001] 1 HKC 134, Woo JA (with whose judgment the other members of the Court of Appeal agreed) made reference at 142F-G to “judicious encouragement” being utilized by the court “to induce family companies and discretionary trustees to help a maintaining spouse to satisfy financial arrangements made by the court”. Reliance was placed on Thomas. 52. In my view, it is time to reiterate the approach that in the assessment of the financial resources of the parties to a marriage for the purposes of considering an application for ancillary relief under s 4 of the MPPO, the court is guided only by s 7(1), in particular sub-para (a) thereof. The term “judicious encouragement” does not call for a different approach when third party assistance is involved. 53. For my part, it would be better if the term “judicious encouragement” were no longer to be used. F ISSUE 2: APPLICATION OF THE LAW TO THE FACTS 54. In section B above, I have dealt in some detail with the facts, and the findings made by the trial Judge and the Court of Appeal. 55. The Court of Appeal made two important findings of fact, one in relation to the Husband’s earning capacity, the other relating to the financial support received by the Husband from his parents:- (1) On earning capacity, the Court of Appeal was of the view that the Husband had “obviously” failed to utilize his potential. The Husband’s education and professional qualifications have already been set out (see paras 8 and 9 above). The Court of Appeal was of the view that for a person like the Husband to be earning only $14,000 a month (as at the date of trial), this represented an obvious under ulitization of his earning capacity. I am in agreement with the views of the Court of Appeal here in reversing the trial Judge’s findings in this regard. It is important also to emphasize one further matter. Where, as in the present case, periodical payments are contemplated, it is right that the court should be able to look into what the future earning capacity of the paying spouse is likely to be. In the present case, the evidence demonstrated that the Husband was getting significant salary increases (see para 16 and footnote 6 above). Furthermore, with in particular his EMBA qualification, this would place the Husband in an even stronger position as far as earning capacity is concerned. (2) On the generous financial support which the Husband’s parents have provided to him (see para 11 above), the important finding of both the trial Judge and the Court of Appeal was that this support would continue (see para 12 above). 56. In these circumstances, given the financial resources of the Husband both in terms of his earning capacity as well as financial support from his parents, the orders made by the Court of Appeal were entirely justified:- (1) In relation to the periodical payments of $42,500 a month, in view of the Husband earning capacity alone, this sum would be justified. When account is taken also to the financial support from his parents, there is no question that the Court of Appeal’s order was a correct one. (2) On the lump sum payment of $1.5 million, this was again more than justified on the basis of the Husband’s financial resources. There was admittedly an element of repayment to the Wife’s parents here but this represented what the Husband ought to have provided in the first place as part of his responsibilities to his Wife. 57. During submissions, Mr Coleman complained that no account had been taken by the Court of Appeal of the Wife’s financial resources, including especially the financial support that she had been receiving from her own parents. Quite apart from it being questionable whether it was open to the Husband to advance this argument in this appeal, the question of the Wife’s financial ability in relation to the periodical payments was never an issue in the courts below: the only issue was the Husband’s ability to pay (see para 74 of the judgment of the Family Court and para 15 above). As for the lump sum payment of $1.5 million, it is clear in view of the expenses paid by the Wife’s parents (see paras 21 and 22 above) that this sum represented what should have been the Husband’s share. G CONCLUSION 58. For the above reasons, I would dismiss the Husband’s appeal. I would also make an order nisi that the Wife (the respondent in the present appeal) should have the costs of and occasioned by the appeal. If any party wishes to have a different order for costs, written submissions should be served on the other party and lodged with the Court within 14 days of the handing down of this judgment, with liberty on the other party to lodge written submissions within 14 days thereafter. In the absence of such written submissions, the order nisi will stand absolute at the expiry of the time limited for these submissions. Mr Justice Chan PJ: 59. I agree with the judgment of the Chief Justice. Mr Justice Ribeiro PJ: 60. I agree with the judgment of the Chief Justice. Mr Justice Hartmann NPJ: 61. I agree with the judgment of the Chief Justice. Lord Clarke of Stone-cum-Ebony NPJ: 62. I agree with the judgment of the Chief Justice. Chief Justice Ma: 63. The appeal is accordingly unanimously dismissed. The Court also makes an order nisi as to costs in terms of para 58 above. Mr Russell Coleman SC and Mr Robin Egerton, instructed by Kwok, Ng & Chan, for the appellant Mr David Pilbrow SC, Mr Jeremy S. K. Chan and Mr Julian S. F. Chan, instructed by Chaine, Chow & Barbara Hung, for the respondent 1 This is set out in para 28 below. [2] Section 7(1) is set out in para 29 below. [3] This is the name given to the District Court when exercising its family and matrimonial jurisdiction under the Matrimonial Causes Ordinance Cap 179 and the MPPO. [4] Cheung CJHC, Peter Cheung and Kwan JJA. [5] In para 82 of the judgment. [6] In the judgment dated 14 March 2012 of the Court of Appeal (dealing with the Husband’s application for leave to appeal to this Court and for stay of execution), Cheung CJHC said it was “regrettable” that at the date of the hearing of the substantive appeal before the Court of Appeal, the Husband did not disclose the fact that he was then earning $54,000 a month, with an annual conditional bonus of $150,000. [7] See para 9 above. [8] At paras 41, 43 and 50. [9] See para 28 below. [10] These provisions are set out in para 29 below. [11] See para 4 above. [12] Section 7(2) deals with the position where children are involved; this has no relevance in the present appeal. [13] Section E.2 in the judgment of Ribeiro PJ in LKW. [14] Section E.3 of the judgment in LKW. [15] Section E.4 in the judgment in LKW. [16] Section E.5 in the judgment in LKW. [17] Section E.6 of the judgment in LKW. [18] Meaning resources that party should have if he or she properly and reasonably utlised all available resources, for example, earning capacity. [19] Such as where there are proceedings in rem or where certain orders (for example Mareva injunctions) are intended to bind third parties; these situations do not apply in the present context. [20] Howard v Howard [1945] P 1, Donaldson v Donaldson [1958] 1 WLR 827, J-PC v J-AF [1955] P 215 per Sachs LJ at p 227, O’D v O’D [1976] Fam 83, B v B (Financial Provision) [1982] 3 FLR 298, Nicholas v Nicholas [1984] FLR 285, Browne v Browne [1989] 1 FLR 291, Crittenden v Crittenden[1990] 2 FLR 361, Green v Green [1993] 1 FLR 326, and H v H (Financial Provision: Capital Assets) [1993] 2 FLR 335.
Chief Justice Ma: 1. I agree with the judgment of Lord Clarke of Stone-cum-Ebony NPJ. Mr Justice Ribeiro PJ: 2. I agree with the judgment of Lord Clarke of Stone-cum-Ebony NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Lord Clarke of Stone-cum-Ebony NPJ. Mr Justice Chan NPJ: 4. I agree with the judgment of Lord Clarke of Stone-cum-Ebony NPJ. Lord Clarke of Stone-cum-Ebony NPJ: Introduction 5. This appeal arises out of an inquiry into loss sustained by the defendants in an action for breach of copyright in which the plaintiff (“MGA”) had obtained an interlocutory injunction and, some years later, very shortly before the trial, discontinued the action, with the consequence that it became potentially liable to pay compensation under what has traditionally been called a cross-undertaking in damages. It was at one time thought that the appeal raised a question of law of general public importance, although in the event the issues between the parties have raised almost exclusively questions of fact. 6. Somewhat curiously, the order or orders granting the injunction did not include an express undertaking but it was common ground between the parties that the plaintiff must be treated as giving such an undertaking. No precise wording of the undertaking was agreed but at the outset of the appeal in this court the Chief Justice drew attention to the fact that the 2014 edition of Hong Kong Civil Procedure described the usual undertaking as being in these terms: “If the court later finds that the order has caused loss to the defendant or any other party and decides that the defendant or that other party should be compensated for that loss, the plaintiff will comply with any order the court may make.” 7. It was accepted by the parties that the undertaking should be treated as being in those terms and that it followed that the question for decision at the inquiry was what loss the defendants had suffered as a result of the injunction. That question was tried by Deputy High Court Judge Seagroatt (“the judge”) for five days from 5 May 2011. On 19 May 2011 he handed down a judgment in which he assessed the defendants’ loss at US$7,250,000. MGA appealed to the Court of Appeal but, save as to interest and costs, by a majority (Tang VP and Lunn JA), the appeal was dismissed on 8 August 2012. Cheung JA dissented. He would have allowed the appeal and ordered a new trial. MGA appeals to this court with the leave of this court. Background to the Inquiry 8. This is a case about dolls. On 5 June 2002 MGA issued a writ against the defendants for alleged breach of copyright on the ground that the first and second defendants had unlawfully reproduced a substantial part of a number of design drawings of various fashion drawings made between 1998 and 2000. In short it was alleged that, in procuring the manufacture and marketing of fashion dolls known as Funky Tweenz, the defendants unlawfully infringed MGA’s copyright in the dolls. MGA was (and is) a substantial enterprise carrying on business in the design, manufacture, marketing and selling of toys, including in particular fashion dolls known as Bratz dolls. It claimed damages and injunctive relief, both against the first and second defendants, who manufactured and marketed the dolls, and against the third defendant, who was alleged to be liable on the basis that he directed and controlled and was personally involved in those activities. 9. On 18 June 2002 MGA applied for an interim injunction against all three defendants. On 5 July 2002 Deputy High Court Judge Woolley granted an injunction until the hearing of a summons or further order in wide terms restraining the defendants from authorising the reproduction and/or reproducing, exporting, and/or distributing “reproductions of or reproductions of a substantial part of the types of dolls known as Funky Tweenz”, samples of which were exhibited to the order, and/or from counselling, procuring or aiding and abetting others to do so. The injunction was endorsed with a penal notice. That order was confirmed in a consent order dated 11 November 2002, which contained a wide ranging further order that the first and second defendants deliver up a series of articles including moulds for the Funky Tweenz dolls. In addition it contained an order for an affidavit or affirmation identifying sales and attempted sales of the dolls and the names of customers or potential customers. It is not in dispute that the effect of those orders was to prevent the defendants from taking any further steps to manufacture or sell the Funky Tweenz dolls. 10. MGA did not press ahead with the action with any speed. For whatever reason, it was not until March 2007 that MGA applied for a trial date. In May 2007 the trial was fixed for 3 March 2008. In late February 2008 MGA applied for the trial date to be vacated but the application was refused by Deputy High Court Judge Gill, who was to be the trial judge for a trial which was to begin on 3 March. Shortly thereafter and before the trial began, MGA applied to discontinue the action and for the injunction to be discharged. The judge set out a short extract from the transcript. It shows that counsel for MGA asked for the injunction to be discharged and for an order for the return of the moulds and other materials which had been handed over pursuant to the injunction. Counsel also expressly recognized on behalf of MGA that it would have to pay the defendants’ costs of the action and that the defendants would be at liberty to embark on, as he put it, “an inquiry as to damages”. In the event, for reasons which were never very clearly explained, MGA failed to return the moulds. The Parties 11. I take these facts from the findings of the judge. The judge correctly recognized that, although the defendants were small fish compared with MGA and although it had at one time been in financial difficulties, by the time of the events relevant to this dispute, MGA had achieved such success as to mount a significant challenge to Mattel Inc (“Mattel”), which since 1959 have been the producers of what the judge described as the well-known and iconic Barbie range of dolls. There were other competitors but MGA was some way ahead of them. MGA sought to cater for a later stage of childhood than the Barbie doll and in June 2001 its Bratz dolls and accessories entered the scene. An indication of MGA’s success is that in the years 2000 and 2001 its revenue exceeded US$93 million and US$98 million respectively and that for the year 2001, the sale of the Bratz dolls, accessories and income from licence fees relating to the Bratz dolls accounted for 22 per cent of that figure. The success of the Bratz dolls was in part due to the expenditure of substantial sums in their continued development. 12. By comparison with MGA the defendants were a very much smaller enterprise. The first and second defendants were incorporated in 1994 and 1993 respectively. The third defendant, Mr Kesselring and Mr Wilson Lam were their only directors and shareholders. Their driving force was Mr Kesselring, who, as the judge put it in his paragraph 3, had a quarter of a century’s experience in the toy trade at varying but increasing levels. Before the advent of the Funky Tweenz dolls, the defendants were not profitable. For the financial year ended 2001, the second defendant made a net loss of HK$239,250 and each defendant spent only HK$3,425 on advertising and promotion. It is not in dispute that the defendants were other than in a small way of business and that they were not comparable with MGA in terms of having the resources, expertise and network to launch and market a successful doll. 13. However, as appears below, the defendants had some success with the Funky Tweenz dolls. This was largely thanks to Mr Kesselring who, with artistic help, conceived the idea of what became the Funky Tweenz dolls, which the defendants began to market at the Nurnberg and Tokyo toy fairs in early 2002. Although they had copies of the Bratz dolls in their possession, the defendants’ case was that they had developed their dolls independently and that any similarities to MGA’s dolls were coincidental. The effect of the discontinuance of the action was that the question whether the defendants were in breach of copyright was not tried but, as I see it, was also that, for the purposes of the assessment of compensation, the defendants must be treated as not having infringed MGA’s copyright. The legal issues 14. It was submitted to the judge on behalf of MGA that the court should not enforce the cross-undertaking. Unsurprisingly, this argument was summarily rejected by the judge and was not renewed in the Court of Appeal or before this court. 15. The sole issue before the judge which is relevant in this appeal is what loss the defendants sustained as a result of the injunction. There was some consideration of a number of decided cases in the courts below and in the parties’ written cases as to the principles applicable to the resolution of this question but, in the event, there was, as I see it, no issue of principle which requires decision by this court. So, for example, there has been some discussion in the authorities as to whether a claim to recover loss pursuant to a cross-undertaking is a claim for damages, which is the traditional view, as explained by Lord Diplock (I think obiter) in the House of Lords in Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295 at 361, or whether it is a claim for equitable compensation, which is perhaps a more modern view, as explained by Arnold J in Lilly Icos LLC v 8PM Chemists Ltd [2009] EWHC 1905 (Ch), [2010] FSR 95 at paragraphs 12 to 43, where he also discussed the role of causation by reference to the well known decision of the High Court of Australia in Air Express Ltd v Ansett Transport Industries (1979-1981) 146 CLR 249. 16. As Arnold J explained, there are potential differences between damages and equitable compensation, notably the role, if any, of remoteness, foreseeability, the date of assessment and mitigation. However, there is no need to discuss those differences here because, save perhaps as to date of assessment, no such issues arise and the issue is essentially one of causation. As to date of assessment, no-one suggested that the date of assessment was not the date of the inquiry. That said, it is I think of some assistance to consider the context in which the issue of causation arises. 17. At paragraph 21 of Lilly Icos Arnold J identified what he described as two separate points made by Norris J in Les Laboratoires Servier v Apotex Inc [2008] EWHC 2347 (Ch), [2009] FSR 3 at paragraph 9, which seem to me to be of assistance here. Norris J said this: “Third, whilst it is for Apotex to establish its loss by adducing the relevant evidence, I do not think I should be over eager in my scrutiny of that evidence or too ready to subject Apotex’ methodology to minute criticism. That is so for two reasons, quite apart from an acceptance of the proposition that the very nature of the exercise renders precision impossible. (a) Whilst, in order to obtain interlocutory relief, Servier will not have had to persuade Mann J. that it was easy to calculate Apotex’ loss in the event of the injunction being wrongly granted, it will have had to persuade him that that task was easier than the calculation of its own loss in the event that the injunction was withheld. The passages I have cited from its skeleton argument and evidence show that it did so. Having obtained the injunction on that footing it does not now lie in Servier’s mouth to say that the task is one of extreme complexity and that the court should adopt a cautious approach. Having emphasised at the interlocutory stage the relative ease of the process, it should not at the final stage emphasise the difficulty. (b) In the analogous context of the assessment of damages for patent infringement, in General Tire and Rubber Co v Firestone Tyre and Rubber Co Ltd (No.2) [1976] R.P.C. 197 at 212 Lord Wilberforce said: ‘There are two essential principles in valuing the claim: first, that the plaintiffs have the burden of proving their loss; second, that the defendants being wrongdoers, damages should be liberally assessed but that the object is to compensate the plaintiffs and not to punish the defendants.’ The principle of ‘liberal assessment’ seems to me equally applicable in the present context. Although a party who is granted interim relief but fails to establish it at trial is not strictly a ‘wrongdoer’, but rather one who has obtained an advantage upon consideration of a necessarily incomplete picture, he is to be treated as if he had made a promise not to prevent that which the injunction in fact prevents. There should as a matter of principle be a degree of symmetry between the process by which he obtained his relief (an approximate answer involving a limited consideration of the detailed merits) and that by which he compensates the subject of the injunction for having done so without legal right (especially where, as here, the paying party has declined to provide the fullest details of the sales and profits which it made during the period for which the injunction was in force).” 18. The liberal approach referred to by Lord Wilberforce does not of course mean that, in relation to causation, the court is free to decide what it likes without reference to the evidence or to the burden of proof. As I see it, the court should approach the issue in a broad commonsense way, as suggested by Saville J in Financiera Avenida SA v Shiblaq, The Times November 21 1988. In this regard I agree with the approach of Arnold J in Lilly Icos at paragraphs 34 to 37, where he concluded at paragraph 37 that the claimant does not need to show that the injunction was the exclusive cause of the loss. It must be an effective cause of the loss. 19. In Lilly IcosArnold J discussed causation at paragraphs 22 to 37 with particular reference to the Air Express case, especially per Gibbs J at pages 312-313 and Stephen J at pages 319-320. In both cases it was held, in my opinion correctly, that the claimant must prove that the loss was caused by the injunction and not by the existence of the litigation. Thus the loss must be such that it would not have been sustained but for the injunction but the injunction need not be the sole cause of the loss. In the Air Express case the majority of the High Court upheld the decision of the judge that, on the facts, the loss was caused by the underlying litigation and not the injunction. This is important on the facts of the instant case because MGA says that much of the alleged loss was caused, not by the injunction, but by what are known as “cease and desist” letters sent to potential customers for the Funky Tweenz dolls, to which I return below. 20. The remaining principle which is potentially relevant is that relevant to claims for loss of a chance. It was accepted on behalf of both parties that the defendants’ claim was a claim for the loss of a chance, namely the loss of the chance of earning profits from the Funky Tweenz dolls which it was deprived of by the injunction. As Cheung JA put it in the Court of Appeal at paragraph 87, the chance is predicated on two conditions: first the acts of third parties, that is of the customers to place orders and, secondly, the ability of the defendants to fulfil the orders. 21. In a well-known passage in Allied Maples Group v Simmons & Simmons [1995] 1 WLR 1602 Stuart-Smith LJ put the principle thus at 1614: “ … the plaintiff must prove as a matter of causation that he has a real or substantial chance as opposed to a speculative one. If he succeeds in doing so, the evaluation of the chance is part of the assessment of the quantum of damage, the range lying somewhere between something that just qualifies as real or substantial on the one hand and near certainty on the other. I do not think that it is helpful to lay down in percentage terms what the lower and upper ends of the bracket should be.” As Cheung JA pointed out at paragraph 89, in that case (at pages 1631 and 1621) the Court of Appeal applied this principle stated by Lord Reid in Davies v Taylor [1974] AC 207 at 213: “You can prove that a past event happened, but you cannot prove that a future event will happen and I do not think that the law is so foolish as to suppose that you can. All that you can do is evaluate the chance. Sometimes it is virtually 100 per cent: sometimes virtually nil. But often it is somewhere in between.” The replacement doll 22. As already stated, the immediate effect of the injunction was that the defendants could no longer develop their Funky Tweenz dolls. They attempted to develop a replacement doll which would not infringe the injunction. At paragraph 17 the judge noted that this showed that, in venturing forth with an alternative, Mr Kesselring must have had considerable confidence in the potential market for this alternative doll given the interest in the original doll. The fact that the sales of the new doll were effected by a new company incorporated in July 2002 after the withdrawal of the dolls complained of, with the wives of the two directors as the directors and shareholders does not seem to me to be relevant to the issues in this appeal. 23. The new venture initially had some limited success but sales tailed off. The judge found at paragraph 18 that the new style dolls sold over 73,758 dolls in less than half a year in 2002, nearly 163,000 in 2003 and almost 45,000 in 2004. Thereafter sales tailed off markedly until by the end of 2007 less than 3,500 found a market. As the judge put it, by no stretch of the imagination was the new style Funky Tweenz doll a competitor of MGA’s Bratz doll in the market. As the judge observed at paragraph 54, Mr Kesselring conceded that the new Funky Tweenz doll was not as attractive as the original and that, after a reasonable start, it was not viable. The judge held that it was not surprising that, given the injunction, the subsequent delay and the failure to return the moulds, the defendants did not recover the position they would otherwise have been in. 24. Although the judge stressed the delay in the case, I am not persuaded that the delay is of direct relevance to the amount of the defendants’ loss of profit caused by the injunction. Equally, MGA placed reliance upon events in the United States said to have been orchestrated by the defendants. Again, I am not persuaded that those events are relevant. The question is simply whether the judge’s reliance upon the evidence of loss can be supported. The conclusions of the judge 25. The judgment of the judge that the defendants were entitled to recover US$7,250,000 was based on his conclusion that, in the absence of the injunction, they would have made a net profit of that amount. In arriving at that conclusion he relied essentially upon the evidence of Mr Kesselring and of Mr Poole, who is an experienced forensic accountant but who is not himself an expert in the toy doll market. The critical question in this appeal is to my mind whether the judge’s conclusion that the injunction caused loss over a period of ten years can be sustained. 26. The judge’s principal conclusions can be summarized in this way. Mr Kesselring’s experience over many years led him to think that he could be “on to a winner”. In general a doll’s life could be expected to be two years but the market life for the basic product could be extended to keep pace with the expectations of the consumer by what witnesses other than Mr Kesselring described as ‘refreshing’ the products. Thus, as the Barbie and Bratz ranges showed, a doll’s life could be extended by careful application and updating. As I read the judgment at paragraph 50, the judge accepted Mr Kesselring’s evidence that “If we got it right it [ie the Funky Tweenz doll] could grow with other products on the markets”. If demand increased, which Mr Kesselring thought likely, they could duplicate moulds and get a second factory to increase production. He was encouraged by the initial demand. 27. After the injunction, they were unable to carry on with the original product. The website was not developed because of the interim injunction. The judge held that the criticism of the viability of the Funky Tweenz brand on the basis that the defendants did not have a sophisticated market policy was misplaced. He accepted that television marketing was beyond the defendants economically but noted that they were prepared to be associated with others. There then followed the problem that the moulds were not returned when the injunction was lifted. 28. The judge noted at paragraph 56 that counsel for MGA agreed with him that over the years the same Bratz dolls were produced “but with varying themes and co-ordinates and make up and hair styles to reflect fashions and tastes, demonstrating that to hold the appeal in the market something new and updated was required.” The judge made that observation in connection with a submission on behalf of MGA that the commercial life of the original Funky Tweenz doll would have been short and that sales and profits would not have been sustained over the period 2002 to 2008, let alone 2011. That was, as I see it, a reference back to the broad agreement that in general the market life of the basic doll without ‘refreshment’ would be of the order of two years. The judge noted that counsel for MGA agreed that the description of the position in the above quotation was “a pretty fair summary”. He concluded that, although the Funky Tweenz doll may never have rivalled Bratz in terms of popularity and turnover, the initial reactions of the market to the brand were strong indicators of its potential as a player. He concluded that there was no reason to think that the defendants could not apply the same formula as MGA and Mattel in refreshing their brand. 29. The judge then considered at paragraphs 57 to 62 the evidence of MGA’s research director Mrs Heather Polk which for the most part he found of no real relevance or assistance. It is important to remember that this is an appeal and that it is not for an appellate court to retry the action. The judge was in my opinion entitled largely to disregard the evidence of Mrs Polk. 30. The same is true of the judge’s approach (at paragraph 63) to the evidence of Mr Lee Chun Ming Edward, who was the managing director of MGA in Hong Kong. In particular, the judge was critical of Mr Lee’s point that the defendants had no marketing or promotion plan to advance Funky Tweenz in the market. The judge said that such a plan would have been a premature step for the defendants. He noted that they had used at least two fairs to promote their brand, as well as catalogues, before MGA’s action “nipped it in the bud”. It would not have made commercial sense to spend such large sums of money on forms of advertising as Mattel and MGA did so early in the career of the Funky Tweenz dolls, when distributors in different countries were prepared at the right time to use such marketing methods or techniques as were available to them. 31. The judge then turned to the expert evidence which was a critical part of the evidence before him. He made some reference to potential evidence from a Mr Byrne at paragraphs 64 to 66, none of which is relevant to this appeal because the parties had been restricted to one expert witness on each side. They were Mr Tang, who is a chartered accountant, for MGA and Mr Poole for the defendants. The judge found Mr Tang’s evidence, as he put it at paragraph 68, seriously flawed and lacking in objectivity. The judge gave his reasons for that conclusion at paragraphs 69 to 72. He criticized Mr Tang’s evidence in a number of respects. In particular he was critical of the fact that Mr Tang used the replacement Funky Tweenz dolls as a yardstick. Mr Tang suggested that any growth potential in the original Funky Tweenz brand would have been reflected in the replacements. The judge held at paragraph 70 that that approach was flawed because the new style dolls were different, having been introduced to remove them from any possible challenge by MGA on the ground that they infringed the injunction. In short the judge concluded that, as he put it at paragraph 71, Mr Tang’s approach smacked of pleading MGA’s cause. The judge was in my opinion entitled to reach those conclusions and to focus on the evidence of Mr Poole. 32. The judge’s conclusions depended in part upon the evidence of Mr Kesselring but, more importantly I think, on the evidence of Mr Poole, which he said (at paragraph 73) was both rational and objective in its approach. He accepted Mr Poole’s own view that his approach was conservative, which the judge said was the most that could be expected of an expert applying objectivity within known parameters. He recognized that there was a paucity of documentary evidence because the Funky Tweenz dolls were traded for so short a period. It followed that there was an element of guesswork in surmising what the future picture would have been. The judge concluded at the end of paragraph 73 that, where no direct comparisons can be made, it is reasonable to look at other businesses within (as he put it) the same sort of trade to see how they fared, even if they were, in terms of size, reputation and history, in a league altogether superior to the business under review. 33. There was some argument in the course of the appeal as to whether the defendants in their pleaded case, namely the statement of damages, and Mr Poole in his evidence relied exclusively on expressions of interest before the injunction was imposed. To my mind it is clear that the defendants and Mr Poole were relying both on expressions of interest and on the actual sales in that period. It would make no sense to rely upon one to the exclusion of the other. It is in my opinion plain from the judgment at paragraphs 74 and 75 that that was how the judge understood the position. 34. Thus in paragraph 74 the judge recognized that expressions of interest might not necessarily be translated into actual orders and therefore profits. However, he refused to dismiss them as mere unreliable and exaggerated encouragement to the manufacturer or the supplier and as having no commercial reality. He noted that in some cases they were backed up by an effort to negotiate a lower price and obtain an exclusivity agreement. He then referred to actual orders to which I return below. He concluded that it lay ill in the mouth of MGA to be dismissive of the expressions of interest when it was their own action which prevented a more accurate determination of the values of expressions of interest by keeping the original Funky Tweenz dolls out of the market for some six years. 35. The judge summarized his conclusions in this regard in paragraphs 74 and 75 broadly as follows. At least 27 distributors worldwide ordered the original dolls and those who cancelled or returned the dolls did so as a result of threats from MGA and its agents. Nobody complained about the quality, style or finish of the dolls. In just over three months over 90,000 were ordered before the build up to the peak season of Christmas. 36. In paragraph 75 the judge said that Mr Poole underlined the fact that he had only actual orders and expressions of interest to use as the basis of his approach and as an accountant he was being asked to project a situation from that, which was a difficult exercise. He therefore had to look outside at how businesses in the same trade prospered or otherwise. It was reasonable and natural enough to look at the market leaders one of whom was the very company which put a stop to the original ‘Funky Tweenz’ brand: MGA. The judge recognized that the defendants would probably not have reached the same scale of achievement as MGA and that Mr Poole did not seek to say or show that it could. The judge added that, although Mr Kesselring thought that he could have been onto a winner, that would remain unknown. He also added that Mr Poole’s conservative approach precluded him from finding that the defendants could have reached or rubbed shoulders with the likes of Mattel and MGA. 37. The judge then concluded in paragraph 76 that it may well be that Mr Poole took a very low base in expressing an annual figure for 2002 of 450,000 dolls bearing in mind that orders for the three months were over 170,000 (reduced to over 90,000 only by cancellations and returns). Expressions of interest, some subject to exclusivity agreements, were at least 500,000 units, even excluding Toys R Us. Given the uncertainties, he held that Mr Poole was right to be conservative and he accepted his first figure of 450,000 for the three quarters of 2002. I will return to these figures below. They are important because they form the basis for much of Mr Poole’s approach. 38. The judge then turned to consider for how long the defendants would continue to make losses as a result of the injunction. It is really only paragraph 77 which forms the basis for his conclusion that the losses should be recoverable in respect of the ten years from 2002 to 2011 inclusive. It is in these terms: “Thereafter, given the policy of refreshing the brand, and adding to it, the yearly estimates are reasonable. Mr Poole was able to extrapolate from some market research figures for Mattel and MGA which help to put the picture assessed for the defendants into some context. The sales of units for Mattel in December 2001 (peak quarter) were 14,422 million, and in May 2002 they dropped to 1,243 million. The comparable figures for MGA were 12,561 million and 1,041 million. Set against Mr Poole’s assessment of 450,000 for the defendants’ first period (three quarters of a year), MGA’s turnover of units for May 2002 was over 2,300 times that of the defendants’. Whilst in some respects that comparison or ratio is meaningless, the picture remains inevitably difficult since the plaintiff has not sought to set against it any figures from any comparable business for any period. Nor have they produced any figures for their own business to challenge Mr Poole’s assumption as to growth or decline over the latter years. His calculations of the life-cycle are similarly unchallenged by hard evidence and Mr Tang himself did not consider either aspect, as assessed by Mr Poole, to be unreasonable. The same applied to the percentage adopted in relation to the accessories linked to the various doll themes. Mr Tang in the text of his report at paragraph 4.5 opined that since the injunction related to the dolls specified in the order, ‘any claims for losses on the sales of accessories or other related products ... would appear to be irrelevant.’ This statement is quite illogical. If the dolls are out of the market the accessories and related products have nothing to be accessories to or to be related to.” 39. It was in these circumstances that the judge held at paragraph 78 that he did not regard it as necessary to enter into a detailed analysis of Mr Poole’s calculations. In short it was because he accepted Mr Poole’s basic premise that he adopted a conservative approach. 40. In the result the judge arrived at his total figure for net loss of profits, which was the sum awarded of US$7,250,000 as explained in his paragraph 80. He took Mr Poole’s starting point of US$8,150,000. He deducted US$943,000 which represented the actual sales of both the original and the replacement dolls to give a net figure of US$7,207,000. He then added the costs involved in launching the replacement dolls, namely US$15,000, and the costs of replacing the moulds and other items which were not returned when the injunction was discharged, namely US$28,000. Finally he added the total of those figures, namely US$43,000 to US$7,207,000 and arrived at US$7,250,000. Discussion 41. As already stated, the decision of the judge depends upon the reliability of the evidence of Mr Poole because it formed the basis for his conclusions, although he expressly stated in paragraph 78 that he did not regard it as necessary to enter into a detailed consideration of Mr Poole’s calculations since he accepted Mr Poole’s basic premise that he had adopted a conservative approach. As a result the judge does not explain how the figure of US$8,150,000 is arrived at, although it formed the basis for the figure ultimately awarded and is central to the conclusion that the defendants were entitled to ten years loss of profit in respect of the ten years from 2002 to 2011 inclusive. 42. The defendants’ case can be seen from the figures pleaded in their statement of damages, which is based on the report of Mr Poole and gives particulars of a claim for US$7,245,044, which is essentially the amount awarded by the judge. The table is set out in paragraph 2 of the pleading as follows: 43. The pleading then described the purpose and method of calculation of the loss as follows. The underlying premise in the calculation is to estimate with as much accuracy as possible the likely sales of the dolls the subject of the interlocutory injunction had the injunction not been imposed. The defendants’ claim is that, on the balance of probabilities, the projected sales figures set out in the box are as accurate as may reasonably be obtained by reference to other dolls that are sold as ‘fashion items’, that is to say, items where sales will continue to grow at the beginning but not continually, will not remain stable for too long and will subsequently decline over a period of time. The calculation is based on the defendants’ estimate of doll sales based on expressions of interest received from potential customers, some of whom subsequently purchased or placed orders for the dolls prior to the interlocutory injunction being imposed. The defendants’ calculation gives credit for all realised profits from sales over the period of the claim. 44. In addition, the defendants asserted that their estimates of growth (both positive and negative) were determined by reference to comparable products available on the market and on publicly available statistics. They specifically relied upon (a) a research report published by United Marketing called ‘The Doll Report 2002: The Market, The Competitors, The Trend’; (b) published growth figures for MGA’s Bratz dolls; and (c) continuing sales of Mattel’s Barbie dolls. Finally they asserted that they could not immediately re-enter the market after the injunction was lifted because of the time that would be taken to re-establish commercial links severed as a result of the imposition of the injunction. 45. MGA’s pleaded answer as amended was in short that the claim for US$7,245,044 was speculative and unjustified and, if awarded, would provide the defendants with an unjust windfall, the calculations based on expressions of interest were misconceived and without any credible basis in the evidence and the defendants were small time traders whose Funky Tweenz dolls could not be compared in terms of potential growth with the growth of the Bratz or Barbie dolls because the defendants did not have the financial ability, marketing strength and distribution networks of MGA or Mattel and the Doll Report focused on the US market, whereas the defendants’ main market was Europe and made no sales of the original doll in the United States. Further, and to my mind importantly, MGA relied upon the defendants’ case as expressed in Mr Poole’s report, that the average life cycle for each individual product line was 16 to 24 months. The defendants’ pleaded response essentially amounted to a joinder of issue. 46. In my judgment, there are two particular aspects of the case in respect of which the judge’s approach cannot be supported, one of which is more important than the other. The first is the way the judge dealt with the cease and desist letters and the second, and much more important, is his justification for taking a period of ten years over which to assess the defendants’ loss. I will discuss them briefly in turn. The cease and desist letters 47. The judge correctly held at paragraph 46 that in the last week of May 2002 MGA and/or its agents (who included lawyers) wrote to distributors or potential distributors whom they had identified in various ways what are known as cease and desist letters. He further correctly held that the purpose of such letters was to persuade, by threats of legal action, those distributors from marketing the Funky Tweenz dolls. He added, as was the case, that they covered a wide area, notably Canada, Spain, the United Kingdom, Finland, Holland and Florida. He noted that some of the distributors considered resisting the threats if they could obtain an indemnity from the defendants but, as he realistically said, such an indemnity was not likely to be forthcoming. The judge further held in paragraph 47 that, although the letters were couched in general terms intimating likely claims for damage, cost and an account, the real purpose was to restrain the recipients from selling the goods. He noted that two of the solicitors threatened claims for injunctive relief and in Finland they covered the full ambit of the injunction claimed by MGA in Hong Kong. However, he correctly recognised that most of the letters did not refer to injunctive relief and that the purpose of all the letters was to restrain any trade in Funky Tweenz dolls. 48. The judge then said this in paragraph 48: “Then one must look at the defendants’ reaction to the actions of MGA. It was not the litigation per se which caused them to cease marketing and production and hand over all the equipment to MGA (or its agents); it was the injunction. The market outlets had been stopped up and MGA wanted the source equally inhibited. It succeeded. The defendants lost what they had achieved and what appeared to them to be promising. It may be artificial in the circumstances of this case to draw a distinction between the effect of the litigation and threatened litigation, and that of the interlocutory injunction. I have no doubt that the overwhelming factor was the injunction and that loss directly flowed from it.” 49. It was submitted on behalf of MGA that in that paragraph the judge was considering the wrong question. He was considering the defendants’ reaction to the actions of MGA, whereas he should have been considering the reaction of potential customers. I agree. As the cases referred to above, notably Air Express and Lilly Icos show, the question is what loss was caused by the injunction, not what loss was caused by the litigation. As Cheung JA pointed out in his dissenting judgment in the Court of Appeal at paragraph 92, there might be other causes of action available in cases of this kind but here the sole question is that posed by the cross-undertaking, namely whether the order of the court has caused loss to the defendants. That is the only question for decision. 50. In these circumstances the judge was, in my judgment, wrong to say that it may be artificial to draw a distinction between the effect of the litigation and threatened litigation on the one hand and the effect of the interlocutory injunction on the other. Moreover he was wrong to say that the overwhelming factor was the injunction, if he meant by that that the reaction of potential customers to the letters must in some way be treated as flowing directly from the injunction. The evidence shows that in a number of the cases it could not have been the injunction that put customers off. 51. For example, the expressions of interest for the 675,000 units of the Funky Tweenz dolls which formed the original starting point of the calculation of the figure of US$7,250,000 were said to have come from six customers or potential customers as follows: Toys R US Canada Ltd (“Toys R US Canada”) 30,000 units, Kiddy Fun AG (“Kiddy Fun”) 350,000 units, Bizak SA (“Bizak”) 50,000 units, Trade Crown Holdings Ltd, the buying agent for Levy UK (“Levy”) 80,000 units, David Halsall International Ltd (“Halsall”) 150,000 units and Concentra-Productos Para Criancas SA (“Concentra”) 15,000 units. It was the defendants’ evidence that Toys R US Canada, Bizak, Levy and Halsall were among the recipients of the cease and desist letters who cancelled their orders or did not place orders because they did not wish to be sued in their respective jurisdictions. In the case of Kiddy Fun, who had expressed an interest in some 350,000 units, by a letter dated 2 May 2002 it sought exclusivity in respect of the supply of dolls to Switzerland, Germany and Austria. However, the defendants’ evidence was that they did not reply to Kiddy Fun. They were already supplying to Quelle AG and Karstadt of Germany. 52. It is I think important in this regard to note that Mr Kesselring recognized the effect of the letters independently of any injunction. For example in paragraph 30 of his first affidavit he said this: “The legal action started by MGA has had a negative impact on our customers in Europe and Canada right from the beginning (without even having been served yet with the injunction). The reason behind this negative impact lies in the fact that lawyers acting for MGA or their agents such as Bandai had sent out letters to customers of ours even before anybody knew that an injunction would be issued.” He said much the same in the course of his oral evidence. He said in cross-examination (at p 81 E to F): “I also was of the strong belief that thanks to your client’s threatening letters to all of my customers, they did a runner; ‘Funky Tweenz, I don’t want to know. Just get me in trouble.’” 53. The majority of the Court of Appeal held at paragraphs 51 and 52 that the cease and desist letters carried “the important statement that MGA was “presently in process of taking [litigation] against (the first and second defendants) in Hong Kong and China” and that, but for that statement, they would have been perceived as empty threats. The difficulty with that conclusion, which was not based on a submission made by the defendants, is that only one of the letters included the statement referred to and, as appears above, the defendants’ evidence was that the letters were taken seriously. 54. However, it does not follow from these conclusions that loss did not flow from the injunction. Some loss plainly did. Indeed, it seems to me to be a striking feature of the facts that MGA was not willing to rely solely upon the cease and desist letters. It went to considerable trouble and expense to obtain an interim injunction. The only possible purpose for taking that action was concern that, if it did not, notwithstanding the cease and desist letters the defendants would continue to market their Funky Tweenz doll and that it might obtain a foothold in the market to the detriment of MGA. It seems to me that this is a significant factor in considering the defendants’ chances of success in the market in the absence of an injunction. Moreover, it may well be that, if MGA had not sought an injunction or an application for an injunction had been refused, potential customers would have taken a different view. Why else did MGA seek the injunction? 55. In my opinion, the significance of MGA’s complaint about this part of the judge’s approach should not be overstated. It relates to the question what inferences can be drawn from the expressions of interest, which (as appears in para (1) of the box set out above) were pleaded as relating to up to 675,000 dolls. It is not easy to draw inferences from that figure which help to identify sales lost as a result of the injunction. The safest course is simply to say that the expressions of interest were significant and support the conclusion that the Funky Tweenz dolls had a real place in the market without trying to quantify that loss on the basis of expressions of interest. In fact, as paragraph (2) of the box shows (and as was submitted on behalf of the defendants) Mr Poole did not use the figure of 675,000 in his figure for units projected to be sold in 2002, which was 450,000. In these circumstances, although the judge was in my opinion in error with the regard to the cease and desist letters, it was an error which played a comparatively small part in the overall picture. Is ten years of loss justified? 56. The critical question is whether Mr Poole’s conclusion that the loss caused by the injunction would have lasted ten years is justified. In agreement with Cheung JA in the Court of Appeal, I have reached the clear conclusion that it is not. 57. The calculations produced by Mr Poole and set out in paragraphs (2) to (4) of the box are instructive. They show a kind of bell curve. The question is upon what primary evidence those figures are based because Mr Poole himself does not have the relevant expertise. The inclusion of the figures in Mr Poole’s report must have depended upon what he was told by Mr Kesselring and his co-director Mr Wilson Lam, who comprised what Mr Poole described as the Cityworld management. Mr Poole made it clear in his report that he relied upon the defendants for the underlying facts. So, for example, he said at paragraph 81 that the damages claimed were based on Cityworld management’s estimated annual sales for the Funky Tweenz brand since its launch on 31 January 2002, which in turn were based on the initial success of the doll supported by the expressions of interest discussed above. He added that the initial interest began rapidly to translate into sales orders and completed sales, with the first shipment in March 2002. He then referred in paragraph 82 to expressions of interest for up to 675,000 dolls and noted that within the first four months customers placed orders for 170,964 units, 94,548 of which were shipped by 10 July 2002, 3,828 were returned and 48,708 which were cancelled due (Cityworld said) to the threats of litigation by MGA against its customers and 27,708 ordered units were replaced by new style dolls, although (as stated above) they were less appealing than the originals. 58. The figures in paragraphs (2) to (6) of the box were derived by Mr Poole from what he describes in his paragraph 83 as management estimates. As the box shows, they increase (excluding accessories) from 450,000 a year in 2002 to 800,000 between 2004 and 2006, thereafter declining until they level out at 200,000 in 2010 and 2011. Management also estimated that 10 per cent of total sales would be accounted for by accessories and another 10 per cent by other Funky Tweenz branded products. Mr Poole then set out in some detail the assumptions that he made, again based on information from management. They included sales information relating to Bratz and Barbie dolls and noted that the world market for dolls, which is cyclical, was buoyant. In paragraph 94, based on the information he had been given as to the first four months of 2002, Mr Poole regarded a growth target of 30 to 40 per cent in the first three years as reasonable. 59. Mr Poole then considered what he described as the product life cycle and said at paragraph 95 that the product life cycle of the Funky Tweenz brand of dolls and accessories was expected to last a minimum of ten years. This information appears to have come from Mr Kesselring. He added at paragraph 96 that Cityworld management considered that the product life cycle could be extended beyond ten years “with successful innovation and re-creation of the brand”. He gave examples of both Barbie dolls and Bratz dolls changing with the times. He added that his calculation assumed that a minimum of four new lines of Funky Tweenz dolls would be introduced every twelve months on a weighted basis. He then said at paragraph 99 that it had been suggested, presumably by management, that the average product cycle within any one brand in the fashion doll segment was considered to be 16 to 24 months and that the claim assumed a product life cycle of 15 months for each product line of doll. 60. Mr Poole then set out his calculation in paragraphs 104 to 106 and his annexure 13. His starting point was the figure of US$8,151,000, which he described as loss of profit on estimated sales of old style dolls plus sale of accessories over the period 2002 to 2011 net of additional incremental costs that would have been required to achieve the targeted sales volumes. Full details of Mr Poole’s calculations are contained in annexure 13 to his report, which is reproduced as Annexure A to this judgment. However, in paragraphs 104 and 106 he described the basic position. He described the loss as comprising (a) loss of profit based on estimated sales of the old style doll, (b) loss of profit based on estimated sales of associated and related products with the old style doll and (c) additional incremental costs that would have been required to achieve the targeted sale volumes. 61. The loss under (a) was based on annual projected sales for what he described as the old style doll (which is of course the doll with which this appeal is concerned) at an average selling price of US$4.10 per doll and an average gross profit of 33 per cent. The figure of US$4.10 was based on correspondence with customers during the expression of interest phase and both parties have accepted it for the purposes of calculation. In any event, it seems to me to be reasonable to do so. Gross profit was calculated upon the basis of sales less the cost of sales, which was the invoiced price paid by the defendants to the manufacturer. All sales were on an FOB basis so that no other cost items were included. In his report Mr Poole explained the basis for (b) and (c) but it is not necessary to repeat it here. Mr Poole arrived at a total loss for the period 2002 to 2007 of US$7,251,000 by deducting the actual profits on the old and new dolls over that period which amounted to US$943,000 and adding back the costs incurred in connection with the launch of the new style dolls, namely US$15,000, and the replacement cost of the lost moulds, namely US$28,000. Mr Poole noted that he did not include sales for the period 2008 to 2011 because the numbers were minimal. Sales of all Funky Tweenz dolls in 2007 totalled 3,480 units. 62. In my opinion there are two principal problems with Mr Poole’s approach, or more accurately with the material upon which it was based. The first is that it depends upon the conclusion that the dolls would have a ten year life span and the second is that it depends upon treating the Bratz and Barbie dolls as realistic comparators when trying to arrive at a fair figure for the defendants’ loss caused by the injunction. 63. There was evidence from both parties that a particular doll would have a life span of no more than about two years. That was the clear evidence of the MGA witnesses who gave evidence. They said that in order to survive beyond a period of that order the particular brand of doll would require refreshing, which would involve more than just changing the facial decoration. It would involve considerable expenditure, including expenditure on marketing and development. Moreover, as stated above, Mr Poole was told by the defendants that the average product cycle within any one brand in the fashion doll segment was considered to be 16 to 24 months and that the claim assumed a product life cycle of 15 months for each product line of doll. 64. Mr Kesselring’s evidence did not fully bear out what he or his co-director had told Mr Poole. When it was put to him in examination in chief that it was a common understanding in the industry that a toy normally had a life span of approximately two years and he was asked what he would say to that, he said: “I totally don’t agree with it.” He said that there were brands which had been around for more than 50 years. He gave examples which included Lego and also included Barbie from Mattel. He also referred to Bratz in the same context. In cross-examination he was asked how long, in his experience, would the life span of a doll be with one facial decoration. His answer was that “we know of Barbies that were around without too many changes for about ten years. We know of Steffi doll of Simba in Germany, who has the same facial expression and the same face for almost twenty years without changing, and they are both 11½ inch fashion dolls”. He was asked whether he had any evidence as to that and he said that he could find it. Counsel said that it would be helpful if he could but he never did, or at least no such evidence was put before the court. 65. In paragraph 27 of his first affidavit dated December 2008, having compared his Funky Tweenz dolls and MGA’s Bratz dolls, Mr Kesselring referred to Mr Poole’s analysis of the figures to which I have referred which suggested that sales could climb from 450,000 pieces in 2002 up to 600,000 in the second year (2003) and 800,000 pieces if not more in the third year (2004) and thereafter. He said that, if the sales performance of Bratz is anything to judge by, the market life of the original style Funky Tweenz should still be in its prime up to the present and could be expected to last for ten years or so since its launching in 2002. 66. As I read Mr Kesselring’s evidence he was not saying that the Funky Tweenz dolls would survive for, say, ten years or more if they were refreshed in the sense used by other witnesses but that, if market conditions were good, as they were, there was no reason why the original Funky Tweenz doll could not last for ten years or more, no doubt with appropriate marketing and the like but without significant changes. 67. This is I think clear from paragraph 16 of his first affidavit, where he said this: “16. The importance of getting the right face for a line of dressing dolls cannot be exaggerated, as the success stories of the Barbie dolls and the Bratz dolls has indicated, once a toy company has got the right face for its doll it is most reluctant to change it. Bratz dolls have been using basically the same face since it was launched. Barbie dolls have been using their current face for over a decade now. Such conservative attitude in maintaining the facial features came from a good understanding of the market demand, a slight change to the face can make the doll much less appealing, and thus, less competitive, in the market. Moreover, once the end customers associate their good impression for an appealing face of a dressing dolls with one's particular brand, it will be quite safe to experiment with the accessories of the brand whilst refreshing its market appeal with variants in the same line of products. That has been the case in the Barbie or the Bratz. There is no reason why we could not have done it with the original face of the Funky Tweenz. The face of a doll is therefore of fundamental importance when considering the market value of the doll.” It is plain from the reference to the Bratz dolls using the same face since they were launched and to the Barbie dolls using the same face for a decade that Mr Kesselring was not contemplating refreshing the dolls during the first ten years. 68. In paragraph 59 above, I set out Mr Poole’s understanding of the prospects of the Funky Tweenz dolls lasting up to ten years or more. He does not explain very clearly precisely what he had in mind, either within the ten years or thereafter. He was not however an expert on this part of the case. The validity of his evidence depends entirely upon input from management, and in particular Mr Kesselring. For the reason I have given, I do not think that Mr Kesselring was contemplating the kind of refreshment referred to by the MGA witnesses. Unfortunately the judge simply accepted Mr Poole’s evidence at face value without an analysis of the underlying evidence of Mr Kesselring and others. 69. I agree with Cheung JA in the Court of Appeal that in failing to do so the judge fell into error. In particular I agree with him that it was wrong in principle for the judge simply to accept Mr Poole’s opinions without such an analysis. Moreover, absent such an analysis I do not think that it was appropriate for the majority of the Court of Appeal to say that there was no reason to interfere with the judge’s decision. On the contrary, I have reached the conclusion that the judge was wrong to accept Mr Poole’s opinion that the injunction caused the defendants ten years’ loss. 70. I have set out paragraph 77 of the judgment in paragraph 38 above. I am not persuaded by the reasoning contained in it. In the first sentence the judge says that, given the policy of refreshing the brand, and adding to it, the yearly estimates are reasonable. However, for the reasons I have given I conclude that the defendants did not have a policy of refreshing the brand in the sense used by MGA. Although they would have done their best and may well have had a policy of adding to the brand at some time in the future, there is in my opinion no basis for concluding that the yearly estimates are reasonable based on a policy of refreshing the brand, On the contrary, as Mr Kesselring’s evidence quoted at paragraph 67 above shows, he intended to use the same face on the Funky Tweenz dolls for a decade, which he could not have done because of the evidence that a doll lasts no more than about two years in the market without refreshment. 71. The judge was also wrong in my opinion to have regard to the Bratz and Barbie dolls as comparators in the way that he did. It is true that, as stated for example in paragraph 32 above, he several times observed that the defendants were in a different league from MGA and Mattel and, as stated in paragraph 36, he noted that Mr Poole’s conservative approach precluded him from finding that the defendants could have reached or rubbed shoulders with the likes of them. However, in paragraph 77 of his judgment he seems to me to have placed considerable reliance upon MGA and Mattel as comparators. Although he does recognize in that paragraph the considerable disparity between the defendants and MGA (and Mattel) and expressly says that in some respects the comparison and ratio between them is meaningless, he nevertheless uses the comparison as some justification for the defendants’ case. Such a comparison is in my opinion of very doubtful value. 72. In particular, there is no convincing evidence that the defendants could have spent anything remotely approaching the amounts spent by MGA in developing, marketing and refreshing their dolls. For example, there is undisputed evidence that, in connection with the launch of the Bratz dolls in 2001 and 2002, MGA spent US$7,500,000 in the United States. This is in sharp contrast with the limited promotional efforts of the defendants and the promotional and advertising costs of some US$14,000 per annum postulated by Mr Poole (and shown in annexure A). Moreover, there is evidence that in a period of eight years MGA made between 150 and 170 spray masks for new facial decorations of the Bratz dolls. Further, although the defendants would no doubt have done their best, the evidence does not establish a realistic prospect of the defendants matching that or anything like it. The most that can be said on behalf of the defendants is that the Bratz evidence shows that the underlying market for dolls was buoyant at the time and that there was no reason why, absent an injunction, the defendants would not have made such efforts as they reasonably could to exploit the market. 73. Finally in connection with paragraph 77, the judge several time refers to the fact that MGA did not provide any figures for their own business which might have been used to test Mr Poole’s evidence. That is true in part and perhaps has some forensic force but it is difficult to see how it helps to arrive at a fair figure for the loss sustained by the defendants. 74. For these reasons I have reached the conclusion that the judge’s figure for loss, based as it is on loss of profit over ten years is wrong in principle. I would therefore set aside his order in that respect. I do so for largely the same reasons as Cheung JA gave in the Court of Appeal. In particular, I agree with him (at paragraph 91) that the problem with Mr Poole’s report, which was based on figures provided by the defendants, appeared more like a business plan with a rosy projection of future growth than an analytical examination of the loss sustained by the defendants. I further agree with him that to accept the report uncritically is to provide the defendants with a windfall which is not supported by the evidence. 75. The question then arises what should happen next. Cheung JA said that he would have ordered a retrial. However in this court, unsurprisingly, neither party was enthusiastic about a retrial and both parties made submissions on the basis that the court would assess the loss for itself. The court agrees that it should do its best to assess the appropriate compensation in order to avoid the expense and delay which would inevitably be involved in a retrial. I therefore turn to that question. What sum should be awarded to the defendants? 76. As the discussion (and differences of opinion) so far have shown, this is not an easy exercise, partly because the effect of the injunction was that the defendants had to stop trading in the Funky Tweenz dolls, with the result that the only sales took place before July 2002, when the injunction was granted. However, it is appropriate to apply the broad test identified by Lord Wilberforce, namely that, although the burden of proof is on the claimants (here the defendants) and the object is to compensate the defendants and not to punish the plaintiff, compensation should be liberally assessed. Moreover, the assessment should be carried out in a broad commonsense way. There are a number of factors which suggest that there was a good chance that, absent the injunction, the defendants would have made significant profits. 77. They include the following considerations. (1) As soon as the defendants put their new Funky Tweenz dolls on the market, there was considerable interest in them. (2) Although some customers were deterred by the cease and desist letters, a significant number of sales were made. (3) The market in dolls was buoyant for a considerable time from 2002 onwards and, although the defendants were not able to operate on anything like the scale of MGA or Mattel, there is no reason why they should not be able to benefit from favourable market conditions. (4) MGA plainly regarded the defendants as a threat in the market because they did not simply rely upon the effect of the cease and desist letters but took much trouble and must have incurred no little expense in obtaining an interim injunction against the defendants. In seeking the injunction MGA asserted that damages were not an adequate remedy. So far as I can see, it could only have advanced such a case on the basis that the defendants would be a significant threat to them in the market and there would only be a serious threat if there was a real chance that the defendants would make an impact in the market by selling its Funky Tweenz dolls together with various accessories. 78. A total of 171,000 dolls were sold in the first few months of 2002 of which 48,000 (or 28 per cent) were cancelled, probably because of the cease and desist letters. MGA relied upon the evidence that in the doll market the first few months of the year were the most important. That is true but we must surely bear in mind that the defendants had only just started up and it would inevitably have taken them some time to build up a customer base. For this reason I would expect growth in 2003. One approach would be to take 171,000 dolls for the second half of 2002 and a total of rather more in 2003, by which time, but for the injunction, the defendants would have been trading for a year and have had time to increase their customer base. 79. In the course of Mr Yan’s oral reply submissions on behalf MGA, he submitted that the dolls would have had a life of two years and that total sales in each of the two years would equal 342,000 (ie twice 171,000), so that the total lost sales would have been 171,000 for the second half of 2002 and 342,000 for 2003, making a total of 513,000 units. At a price of US$4.10 per unit and a gross profit margin of 33 percent, the gross profit on the dolls would be US$694,089. To that he added the following on the basis of figures which appeared in Mr Poole’s report (especially Annexure 13) and were generally accepted for present purposes: (1) 10 per cent x 513,000 x US$2.35 x 43 per cent loss of profit on sales of accessories, which amounted US$51,839; (2) 10 per cent x 513,000 x US$6.59 x 43 per cent, which amounted to US$145,369; (3) costs of US$14,909 in connection with the new dolls post injunction; (4) replacement costs of the lost moulds of US$28,010. He then deducted actual profits for 2002 and 2003, namely US$248,615 and US$422,368 respectively and two further figures for costs in those years of US$18,500 and US29,654. That calculation yielded a net profit of US$215,079. Since the end of the oral argument MGA has produced a further calculation which is the same as that set out above save that the figure of US$248,615 has been reduced by US$132,152 in order to reflect the actual sales in 2002. According to the latest schedule that gives a net projected loss of US$332,322. 80. After that schedule was produced the defendants were given an opportunity of commenting upon it. One of the points made on their behalf was that, although the dolls were shown at fairs in January and February, as Mr Poole showed in his annexure 3, Funky Tweenz dolls were first shipped only in March 2002 and then in small quantities. On that basis it was correctly submitted that there was a maximum of four months’ pre-injunction sales on which to base the future trajectory of Funky Tweenz dolls. It follows that the figures produced by MGA (which were produced during its reply and thereafter) significantly understated the position. 81. It follows that to limit the recoverable loss to the figure of US$332,322 would not in my opinion be just. The defendants make a further submission which seems to me to have considerable force. It is that it is artificial to conclude that at the end of the life cycle of, say, two years, sales would be switched off like a tap. While, as I observed at paragraph 64, Mr Kesselring did not provide any evidence in support of his general assertion, it appears to me to be common sense that in a good market which was buoyant for the sale of dolls, some allowance must be made for sales after the end of the two years. Moreover, it is plain that Mr Kesselring was full of ideas for the future, as shown by his development of the Funky Tweenz dolls. 82. It was submitted that the court should accept the estimate given by Mr Poole that the growth rate should be estimated generally at 30 per cent per annum. I would not accept that figure because it depended upon the assertion of Mr Kesselring and was not supported by independent evidence. It seems to have depended upon growth of comparators. However, the difficulty with it is that stated earlier, namely that the principal comparators were MGA and Barbie, which for the reasons given above were not appropriate comparators because of their very different sizes and resource. 83. The underlying question is what, if any, chance the defendant had of making more profits than the figures in the schedules produced on behalf of MGA suggest. In my opinion they did have such a chance, for two reasons. The figures are too low because they assume six months of sales before the injunction was granted, whereas there were four and the first few months were likely to produce significantly less sales than would have been produced once they were in full swing. The market was good. The defendants would not have sat back and done nothing when the two years expired but would have done their best in the market and, as MGA no doubt feared when they sought the injunction (notwithstanding the cease and desist letters), would have had good prospects of being a real player in the market, albeit on a very much smaller scale than MGA itself. 84. It is not easy to arrive at a figure because the loss of a chance is not easy to assess. Standing back from the latest figure produced by the MGA and, taking all the circumstances into account as well as I can I would award a sum of US$450,000 as fair compensation for the defendants’ loss together with interest at the rate ordered by the Court of Appeal the rate of 1 per cent above the prime lending rate for a period to be agreed or determined. It appears to me that, if one stands back and considers how much net profit the defendants will have made since the injunction (and because of it), which of course involves taking account not only this award but also the net profit derived from the new dolls which the schedules correctly take into account, the overall sum is reasonable. CONCLUSION 85. For the reasons given above, I would allow the appeal, set aside the order of the judge and the Court of Appeal, assess the defendants’ net unrecovered loss at US$450,000 and substitute that figure for the figure ordered by the judge. I would award interest on that sum at 1 per cent above the prime lending rate for a period to be agreed or determined. As to the costs and the period for which interest should run, I would direct that any submissions be made in writing, and exchanged and lodged with the Court within 14 days of the handing down of this judgment, with liberty to the parties to exchange and lodge written submissions in reply within 14 days thereafter. Chief Justice Ma: 86. The appeal is unanimously allowed. The Court also makes the orders set out in paragraph 85 above. Mr John M Y Yan SC and Mr Colin A Shipp, instructed by William W L Fan & Co, for the Appellant Mr Paul Stephenson, instructed by Danny K H Yu & Co, for the Respondents Annexure A
Press Summary (English) Press Summary (Chinese) FACV No. 4 of 2012 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 4 OF 2012 (CIVIL) (ON APPEAL FROM CACV NO. 266 OF 2010) Between : Chief Justice Ma and Mr Justice Ribeiro PJ: 1. The appellant, W, is a post-operative male-to-female transsexual person. In common parlance, she is a transsexual person who has undergone “sex change” operations and now lives as and appears in all respects to be a woman. She and her male partner wish to get married. However, the Registrar of Marriages has decided that she does not qualify as “a woman” under the Marriage Ordinance and the Matrimonial Causes Ordinance, so that there is no power to celebrate a marriage between her and her male partner. 2. The appellant brought judicial review proceedings to challenge that decision, contending that she ought in law to count as a woman for the purposes of marriage. The challenge failed at first instance[1] and in the Court of Appeal.[2] Lord Pannick QC, appearing for the appellant,[3] makes it clear that it is no part of the appellant’s case that same sex marriage should be permitted. The contention advanced is that she is for legal purposes a woman and entitled to marry a person of the opposite sex. We should make it clear that nothing in this judgment is intended to address the question of same sex marriage. 3. Leave to appeal was granted by the Court of Appeal on the basis that the following questions of great general or public importance arise on the appeal: Whether on a true and proper construction of the Marriage Ordinance, Cap 181 (‘MO’), the words ‘woman’ and ‘female’ in sections 21 and 40 of the MO include a post operative male to female transsexual? If the answer to Question 1 is ‘No’, whether sections 21 and 40 of the MO are unconstitutional having regard to the Appellant's right to marry under Article 37 of the Basic Law and/or Article 19(2) of the Hong Kong Bill of Rights ['HKBOR']) and/or her right to privacy under Article 14 of the HKBOR? 4. The questions for the Court are therefore whether the Registrar has misconstrued the Ordinance in coming to his conclusion precluding the appellant from marrying her male partner. And if not, whether the Ordinance so construed is compatible with the right to marry guaranteed by the Basic Law and the Bill of Rights or with the right to privacy guaranteed by the Bill of Rights. We will consider in turn the question of statutory construction and the constitutional question. But first, we should examine the condition of transsexualism and the appellant’s circumstances. A. The condition of transsexualism 5. It is now well-established that transsexualism is a condition requiring medical treatment. The World Health Organization classifies transsexualism as a species of gender identity disorder involving: “A desire to live and be accepted as a member of the opposite sex, usually accompanied by a sense of discomfort with, or inappropriateness of, one’s anatomical sex, and a wish to have surgery and hormonal treatment to make one’s body as congruent as possible with one’s preferred sex.”[4] 6. As Dr Ho Pui Tat[5] explained, it is possible to regard the sexual identity of an adult individual as determinable by reference to psychological and biological factors. The psychological aspects include gender identity (self perception of being male or female); social sex role (living as male or female); sex orientation (homosexual, heterosexual, asexual or bisexual); and sex of rearing (whether brought up as male or female). The biological aspects include the genetic (the presence or absence of the Y chromosome); the gonadal (the presence of ovaries or testes); the hormonal (circulating hormones and end organ sensitivity); internal genital morphology (the presence or absence of male or female internal structures such as the prostate gland and the uterus); external genital morphology (the structure of male or female external genitalia); and secondary sexual characteristics (body hair, breasts and fat distribution). 7. In the vast majority of people, these indicia are all congruent, that is, they all point in the same direction, identifying the individual as either male or female.[6] However, people who have the misfortune of suffering from the gender identity disorder or gender dysphoria of transsexualism possess the chromosomal and other biological features of one sex but profoundly and unshakeably perceive themselves to be members of the opposite sex. They may persistently experience acute emotional distress, feeling themselves trapped in a body which does not correspond with what they firmly believe to be their “real” sex. 8. The aetiology of the condition is uncertain. It has traditionally been regarded as psychological in origin but there is a body of scientific and medical opinion favouring the hypothesis that it may have a genetic or organic explanation. But whatever the aetiology, there is no doubt that in severe cases, it can give rise to much suffering and possibly self-destructive behaviour. As Professor Sam Winter[7] stated in his affidavit, transsexual persons: “... consider themselves females imprisoned in the male bodies, or vice versa, and intensely resent their own sexual organs which constantly remind them of their biological sex. They go to great lengths to relieve themselves of their psychological distress. For example, transsexual men put on make-up, remove facial and pubic hair, and use oestrogen to promote the development of female breasts. They implore doctors to perform operations to remove their male genital organs and construct for them a vagina from their penis. Some of them mutilate themselves in order to be rid of the gonads and genitalia they detest. ... the inner turmoil transsexuals experience prompts some of them to undergo prolonged and painful surgery or even take their own lives.” 9. Professor Winter noted that their “mental and emotional well-being is also affected by other’s perception of and judgment on them.” The gender recognition which the law accords to them is obviously relevant in this context.[8] 10. Professor Robyn Emerton[9] has pointed out[10] that intrusive social pressures can cause great hardship and even lead to tragic consequences: “The plight of Hong Kong’s transgender persons recently came to the fore after the suicide of Louise Chan, a young transgender woman, on 21 September 2004. Louise first came to the public’s attention when she was stalked and ‘outed’ by the local media in 2003 resulting, amongst other things, in the loss of her job. Two days after Louise’s death, another transgender woman, Sasha Moon, also committed suicide.” 11. It is generally recognized that transsexualism does not respond to psychological or psychiatric treatment. The only accepted therapy involves effecting hormonal and surgical changes to make the patient’s body conform sexually as closely as possible with his or her self-perception and thus to address his or her psychological needs. As Dr Ho Pui-tat explained, the management of persons with the relevant symptoms begins with a full psychiatric assessment. If the diagnosis of gender identity disorder is confirmed, the patient is usually required to go through a “real life experience”, living in the preferred gender for about two years while having hormones of the opposite sex administered to produce reversible physical changes in the body and to ease the patient’s psychological discomfort. If it appears from this process that the patient can successfully live as a person of the opposite sex, he or she is considered medically eligible for sex reassignment surgery (“SRS”). 12. However, as Dr Ho noted, not all transsexual patients choose to undertake SRS. The level of psychological discomfort in people with gender identity disorder differs, ranging from mild gender dysphoria to severe transsexualism. Those less severely afflicted may decline surgery. There may also be social constraints, for instance, a desire not to put good careers at risk by undergoing a sex reassignment. Or the patient may not be willing to face the painful process of surgery with what may be an uncertain outcome, especially in the case of female to male transsexuals where the surgery is more complex and difficult. 13. Dr Albert Yuen Wai Cheung[11] explained that where the decision is made to proceed with SRS, the surgery comprises at least two elements: breast and genital surgery,[12] the procedures differing for male-to-female and female-to-male patients. Dr Yuen described what can and cannot be achieved by surgical intervention as follows: “For male-to-female transsexual surgery, breast augmentation is done for patients whom the breast enlargement after hormone treatment is not sufficient for comfort in the social gender role. Genital surgery includes at least orchidectomy (removal of both testes), penectomy (removal of penis), creation of a new vagina. The new vagina enables penetration of penis during sexual intercourse. There is preservation of erotic sexual sensation. However, surgery cannot remove the prostate organ or provide a functional uterus or ovaries, or otherwise establish fertility or child bearing ability. Neither can it change the sex chromosomes of the person, which remains that of a male (‘XY’). For female-to-male transsexual surgery, the female breasts would be removed. The uterus, ovaries and vagina are removed. Construction of some form of penis is performed. There are different ways of constructing the penis, depending on the desire of person who would balance the risk of physical injuries inflicted on one’s body due to the surgery with the benefits. The form of penis construction ranges from an elongation of patient’s clitoris (metoidioplasty), raising an abdominal skin tube flap to mimic a penis, to the micro-vascular transfer of tissue from other parts of body to perineum to have a full construction of a penis inside which there is a passage for urine. The best outcome at present is that after surgery, the person can void urine while standing and can have a rigid penis which means it is rigid all the time, as opposed to an erected penis which is flaccid normally but becomes rigid when sexually aroused. However, the new penis, even fully constructed, cannot ejaculate or erect on stimulation, although it will not affect the person’s ability to have sexual intercourse and the person can still penetrate a vagina and have sensation in the penis and achieve orgasm because the clitoris and its nerve endings are preserved. The person cannot be provided with prostate (a male sex organ which secretes prostatic fluid which when combined with sperms produced by the testes forms the semen; a female does not have such an organ) or any functioning testes and will have no ability to produce semen, to reproduce or otherwise to impregnate a female. The sex chromosomes also remain those of a female (‘XX’).” 14. It can thus be seen that SRS involves very extensive and irreversible changes to a person’s physical state. B. The treatment of transsexuals in Hong Kong generally 15. In Hong Kong, medical facilities for treating transsexuals were first established in 1980. The first documented instance of SRS performed locally occurred in 1981. From 1 October 2007 to 30 September 2009, there were 86 patients diagnosed with gender identity disorder. From January 2006 to September 2009, 18 patients underwent SRS in hospitals managed by the Hospital Authority. The practice is to confine SRS to persons who are at least 21 years old. The whole treatment, including SRS, is publicly funded. It has been suggested that “many more have undergone surgery privately, both in Hong Kong and, more commonly, overseas.”[13] In the present case, W had the first of her operations (an orchidectomy) in Thailand. 16. After completion of the course of treatment, a letter certifying that the patient’s gender has been changed is issued by the Hospital Authority and signed by the consultant surgeon in charge. The practice, as Dr Albert Yuen Wai Cheung explained, is for such a letter to be issued only where a person has had the original genital organs removed and has had some form of the genital organs of the opposite sex constructed. 17. It is the practice of the Director of Immigration, who functions as the Commissioner of Registration under the Registration of Persons Ordinance,[14] to accept such a letter as a basis for issuing the patient with a replacement identity card[15] and passport[16] reflecting his or her changed gender. The Commissioner also accepts certificates where the SRS has been conducted privately, whether locally or overseas.[17] However, the practice is to refuse to alter the sex recorded in birth certificates on the basis that the document states historical fact which cannot be altered on the basis of a surgical sex reassignment. And, as occurred in the present case, a post-operative transsexual person is regarded as ineligible to marry someone of the gender opposite to his or her acquired gender. 18. Hong Kong’s position on marriage presently differs from the position adopted in many other countries where, by law or as a matter of administrative practice, post-operative transsexuals are able to marry in their acquired gender. From the evidence and submissions received, including from the International Commission of Jurists,[18] it appears that in the Asia-Pacific region, such marriages are permitted on the Mainland and in Canada, India, Singapore, Japan, South Korea, Indonesia, Australia and New Zealand. In Europe, most states have for some years recognized such a right to marry and, after the decision of the European Court of Human Rights (“ECtHR”) in Goodwin v United Kingdom,[19] discussed below, all 47 states which are members of the Council of Europe are required to give such marriages full recognition. Ms Monica Carss-Frisk QC, appearing for the Registrar,[20] has helpfully provided a list of 41 countries which are approved for the purposes of the United Kingdom’s Gender Recognition Act 2004 (“GRA 2004”) and whose certification of a change of gender is therefore accepted in the United Kingdom.[21] Those countries include the United States, covering the District of Columbia and all of the States except for Idaho, Ohio, Tennessee and Texas. C. The case of the appellant 19. The appellant is a Hong Kong permanent resident in her thirties. She was registered as male at birth, a biologically correct classification. Until 2008, her identity card also stated that she was male. However, from an early age, she perceived herself as female. She was diagnosed as suffering from gender identity disorder and underwent a psychiatric assessment and hormonal treatment between 2005 and 2008. In January 2007, she had an orchidectomy performed in Thailand. She changed her name to a more feminine one by deed poll in that year. Her “real life experience” under professional supervision was deemed successful and in 2008, she successfully underwent SRS at hospitals managed by the Hospital Authority involving removal of her penis and the construction of an artificial vagina enabling her to engage in sexual intercourse with a man. She was thereafter issued with a Hospital Authority letter certifying that her “gender should now be changed to female”. She subsequently successfully applied for her acquired gender to be shown in her educational records and, in August 2008, was issued with a new identity card stating her new name and giving her sex as female. She has also been issued with a passport containing similar particulars. 20. On 17 November 2008, her solicitors wrote to the Registrar seeking confirmation that she was able to marry her male partner. The Registrar’s negative response, containing the decision under challenge, was in the following terms: “Marriages in Hong Kong are governed by the Marriage Ordinance, Cap. 181, Laws of Hong Kong. Section 40 of the said Ordinance provides that every marriage under the Ordinance is a formal ceremony recognized by law as involving the voluntary union for life of one man and one woman to the exclusion of all others. According to our legal advice, the biological sexual constitution of an individual is fixed at birth and cannot be changed, either by the natural development of organs of the opposite sex, or by medical or surgical means. The Registrar of Marriages is not empowered to celebrate the marriage between persons of the same biological sex. For the purpose of marriage, only an individual's sex at birth counts and any operative intervention is ignored.” D. The relevant statutory provisions 21. Section 40 of the Marriage Ordinance (“MO”),[22] referred to by the Registrar provides as follows: (1) Every marriage under this Ordinance shall be a Christian marriage or the civil equivalent of a Christian marriage. (2) The expression ‘Christian marriage or the civil equivalent of a Christian marriage’ implies a formal ceremony recognized by the law as involving the voluntary union for life of one man and one woman to the exclusion of all others. 22. Also important is section 20(1)(d) of the Matrimonial Causes Ordinance (“MCO”)[23] which states: A marriage which takes place after 30 June 1972 shall be void on any of the following grounds only ... (d) that the parties are not respectively male and female. 23. It is also relevant to note that in Hong Kong, a marriage which has not been consummated owing to the incapacity of either party to consummate it is voidable.[24] 24. It will be necessary later to examine the abovementioned provisions in the light of the constitutional right to marry conferred by Article 37 of the Basic Law (“Article 37”) and Article 19(2) of the Bill of Rights (“Article 19(2)”), set out in Section F.1 of this judgment. E. The question of statutory construction 25. It is common ground that under the law of Hong Kong, a marriage is the voluntary union for life of one man and one woman to the exclusion of all others, as MO section 40 provides. Everyone also agrees that “marriage” in Article 37 and “marry” in Article 19(2) bear the same meaning. The question is: Who qualifies as a “woman” for the purposes of marriage? In particular, does a post-operative male-to-female transsexual person such as W count as a “woman” for those purposes? 26. That question has only arisen as a legal issue in relation to transsexuals after gender reassignment treatment became possible.[25] In the United Kingdom, it first received a judicial answer in 1970 in the important case of Corbett v Corbett (otherwise Ashley)[26] which involved a post-operative male-to-female transsexual known as April Ashley. Ormrod J held, for reasons considered below, that the answer was “No”. He therefore granted a decree of nullity declaring that the marriage which the parties had celebrated was void ab initio. 27. When Ormrod J issued his judgment, there was no explicit statutory provision in England and Wales making it a requirement that a marriage be between a man and a woman. But in the following year, the United Kingdom Parliament enacted section 1(c) of the Nullity of Marriage Act 1971 which provided that a marriage taking place after the Act’s commencement is void if “the parties are not respectively male and female”. The Hong Kong legislature followed suit and enacted section 20(1)(d) of the MCO set out above, coming into effect on 1 July 1972. Our section is in terms materially identical to the English provision and it was obviously intended to adopt the measure locally, making it relevant to examine the origins of the 1971 provision and in particular, its relationship with Ormrod J’s decision in the Corbett case. Section 1(c) of the 1971 Act was subsequently re‑enacted in the United Kingdom as section 11(c) of the Matrimonial Causes Act 1973 in materially identical terms. E.1 What Corbett decided 28. Ormrod J had to decide whether the transsexual woman in question was in law a woman for the purposes of marriage. To do this, his Lordship had to ascertain the legal criteria for providing an answer. To identify those criteria, his approach was first to decide what, in his view, were the essential features of the institution of marriage. He then deduced from such essentials, what he considered to be the appropriate criteria and applied them to arrive at his conclusion, after an extensive examination of the evidence. 29. The starting-point as to the essential nature of marriage at common law is the judgment of Lord Penzance in Hyde v Hyde,[27] where his Lordship stated as follows: “Marriage has been well said to be something more than a contract, either religious or civil - to be an institution. It creates mutual rights and obligations, as all contracts do; but, beyond that, it confers a status. The position or status of “husband” and “wife” is a recognised one throughout Christendom: the laws of all Christian nations throw about that status a variety of legal incidents during the lives of the parties, and induce definite rights upon their offspring. What, then, is the nature of this institution as understood in Christendom? Its incidents vary in different countries; but what are its essential elements and invariable features? If it be of common acceptance and existence, it must needs (however varied in different countries in its minor incidents) have some prevailing identity and universal basis. I conceive that marriage, as understood in Christendom, may for this purpose be defined as the voluntary union for life of one man and one woman, to the exclusion of all others.” 30. Building on this, Ormrod J focussed on the fact that “marriage is essentially a relationship between man and woman”,[28] deducing from this basic characteristic the proposition that the ability to engage in heterosexual intercourse is a determining constituent of that relationship: “...sex is clearly an essential determinant of the relationship called marriage because it is and always has been recognised as the union of man and woman. It is the institution on which the family is built, and in which the capacity for natural hetero-sexual intercourse is an essential element. It has, of course, many other characteristics, of which companionship and mutual support is an important one, but the characteristics which distinguish it from all other relationships can only be met by two persons of opposite sex.”[29] 31. In emphasising that marriage so viewed is “the institution on which the family is built”, Ormrod J plainly regarded such sexual intercourse as essential because it was the basis for the procreation of children. As Lord Nicholls of Birkenhead was later to point out, this was very much in line with the notion of a Christian marriage. As Lord Nicholls explained: “There was a time when the reproductive functions of male and female were regarded as the primary raison d’être of marriage. The Church of England Book of Common Prayer of 1662 declared that the first cause for which matrimony was ordained was the ‘procreation of children’. For centuries this was proclaimed at innumerable marriage services.”[30] 32. Reviewing the medical evidence on how “the sexual condition of an individual” was assessed, Ormrod J recognised four possible criteria, namely: “(i) Chromosomal factors; (ii) Gonadal factors (ie, the presence or absence of testes or ovaries); (iii) Genital factors (including internal sex organs); (iv) Psychological factors; ...” [31] 33. His Lordship added that there was some support for a fifth possible criterion, namely: “(v) Hormonal factors or secondary sexual characteristics (such as distribution of hair, breast development, physique etc, which are thought to reflect the balance between the male and female sex hormones in the body).”[32] 34. However, since he regarded procreative intercourse as the essential constituent of a marriage at common law, his Lordship considered it appropriate to adopt only the first three of those five possible factors as the relevant criteria. Ormrod J put this as follows: “Having regard to the essentially hetero-sexual character of the relationship which is called marriage, the criteria must, in my judgment, be biological, for even the most extreme degree of transsexualism in a male or the most severe hormonal imbalance which can exist in a person with male chromosomes, male gonads and male genitalia cannot reproduce a person who is naturally capable of performing the essential role of a woman in marriage. In other words, the law should adopt in the first place, the first three of the doctors' criteria, i.e., the chromosomal, gonadal and genital tests, and if all three are congruent, determine the sex for the purpose of marriage accordingly, and ignore any operative intervention.”[33] 35. His Lordship therefore identified the biological factors as the only appropriate criteria for assessing the sex of an individual for the purposes of marriage. Moreover, he made it clear that he regarded such biological criteria as fixed at the time of birth. Psychological criteria would be disregarded since none would be manifest in a newborn baby. So would the fact of the individual’s subsequent psychological development, treatment and surgery: “It is common ground between all the medical witnesses that the biological sexual constitution of an individual is fixed at birth (at the latest), and cannot be changed, either by the natural development of organs of the opposite sex, or by medical or surgical means. The respondent’s operation, therefore, cannot affect her true sex. The only cases where the term ‘change of sex’ is appropriate are those in which a mistake as to sex is made at birth and subsequently revealed by further medical investigation.” 36. He concluded on this basis that the transsexual person in question: “... is not a woman for the purposes of marriage but is a biological male and has been so since birth. It follows that the so-called marriage of September 10, 1963, is void.”[34] 37. Corbett received the approval of the House of Lords in Bellinger v Bellinger,[35] where Lord Nicholls stated that Ormrod J’s decision represented the “present state of English law regarding the sex of transsexual people”, noting that: “... in this context, the law should adopt the chromosomal, gonadal and genital tests. If all three are congruent, that should determine a person's sex for the purpose of marriage. Any operative intervention should be ignored. The biological sexual constitution of an individual is fixed at birth, at the latest, and cannot be changed either by the natural development of organs of the opposite sex or by medical or surgical means.” 38. Given the importance that the Corbett line of cases attaches to procreation as an essential of marriage it is perhaps of some interest to note that a contrary view had been taken by Viscount Jowitt LC in Baxter v Baxter,[36] a case on non-consummation, which was not referred to in either Corbett or Bellinger. His Lordship stated: “... the insistence of procreation of children as one of the principal ends, if not the principal end, of marriage requires examination. It is indisputable that the institution of marriage generally is not necessary for the procreation of children; nor does it appear to be a principal end of marriage as understood in Christendom, which, as Lord Penzance said in Hyde v Hyde, ‘may for this purpose be defined as “the voluntary union for life of one man and one woman, to the exclusion of all others.” As regards the phraseology of the marriage service in the Prayer Book, this House in the recent case of Weatherley v Weatherley,[37] pointed out the dangers of too strict a reliance upon these words. In any view of Christian marriage the essence of the matter, as it seems to me, is that the children, if there be any, should be born into a family, as that word is understood in Christendom generally, and in the case of a marriage between spouses of a particular faith that they should be brought up and nurtured in that faith. But this is not the same thing as saying that a marriage is not consummated unless children are procreated or that procreation of children is the principal end of marriage. Counsel were unable to cite any authority where the procreation of children was held to be the test in a nullity suit. On the contrary, it was admitted that the sterility of the husband or the barrenness of the wife was irrelevant.” 39. However, especially in the light of the House of Lords decision in Bellinger and of the legislative history considered in the following section of this judgment, the Corbett decision must be acknowledged to be authoritative in English law regarding the common law incapacity of a post-operative male-to-female transsexual to marry in her acquired gender. E.2 The Corbett decision and the Nullity of Marriage Act 1971 40. In our view, the 1971 Act was needed because, as we have pointed out, Ormrod J had had to proceed without any explicit statutory basis. After his Lordship concluded that the marriage was invalid, he dealt with the parties’ contentions regarding relief. The petitioner invited him to make a bare declaration that there had not been a marriage at all to show disapproval at what was submitted to be a “meretricious” marriage. If that course had been taken, there would have been no power to grant ancillary relief. The respondent, on the other hand, submitted that the Court should grant a decree of nullity which would permit ancillary relief orders to be made.[38] 41. In order to rule on that issue Ormrod J decided that it was necessary to ask “whether or not the ecclesiastical courts would have entertained such a case as the present and granted a ‘declaratory sentence’ on proof that the ‘wife’ was a man”.[39] He decided that in the absence of contrary authority, those courts would have entertained such a case, noting that even if the marriage was considered “meretricious”, they would have granted declaratory sentences. His Lordship held that he had no discretion other than to grant a nullity decree.[40] 42. It would obviously be quite unsatisfactory to require courts faced with like questions to undertake such an exercise. Ascertaining what the ecclesiastical courts would have done requires considerable legal archaeology (jurisdiction having been transferred from the ecclesiastical courts to the High Court by section 2 of the Matrimonial Causes Act 1857) and the degree of guidance which the case-law of the ecclesiastical courts could give is doubtful since those courts would never have had to consider matters such as the implications of sex reassignment surgery. 43. What the Nullity of Marriage Act 1971 did was to put cases like Corbett on a statutory footing by providing in its section 1(c), that a marriage was void on the ground that “the parties are not respectively male and female”. This gave the Court statutory powers to make ancillary relief orders under sections 15 and 19 of the Matrimonial Causes Act 1965. The 1971 Act also gave the Court jurisdiction to act where the husband was not domiciled in England.[41] It was therefore no longer necessary to investigate what the position would have been in the ecclesiastical courts. 44. Examination of the origin and purpose of the 1971 Act, passed some 16 months after the Corbett decision, gives substance to the suggestion that the United Kingdom Parliament thereby intended to confer legislative recognition on that decision. It must have been aware of the issues and the lack of a statutory framework for dealing with them. In providing such a framework, and by specifically legislating that a marriage is void if the parties are not respectively male and female, reflecting Ormrod J’s holding that the marriage was void ab initio, the legislative intent must have been to endorse that decision. That such was the intent was the view expressed by the English Court of Appeal in Bellinger v Bellinger[42] and J v C;[43] and by the Full Court of the Australian Family Court in AG (CTH) v “Kevin and Jennifer”.[44] E.3 The adoption of Corbett’s rationale by the Hong Kong legislature 45. Ms Carss-Frisk QC submits that the Judge[45] and the Court of Appeal were right to hold that in enacting MCO section 20(1)(d) which reproduces in materially identical terms section 1(c) of the 1971 Act, the legislative intent in Hong Kong was likewise to endorse Ormrod J’s decision in Corbett. 46. Fok JA points[46] out that the Explanatory Memorandum to the Matrimonial Causes (Amendment) (No 2) Bill states: “Clause 12 replaces section 20 of the principal Ordinance with a new section 20 which sets out the grounds on which a marriage may be declared null and void. These correspond to those set out under the Nullity of Marriage Act 1971.” 47. His Lordship concluded that the Hong Kong legislature : “... consciously and expressly adopted the relevant provision of the Nullity of Marriage Act 1971 and thereby must have intended the law in Hong Kong to be the same as that in England, where Corbett was expressly adopted legislatively, and must have intended the same legislative intention behind the Nullity of Marriage Act 1971 when enacting section 20(1)(d) of the MCO.”[47] 48. Save that we consider Corbett to have been implicitly rather than expressly adopted by the English legislature, we respectfully agree. In our view, as a matter purely of statutory construction (constitutional considerations being considered later), the legislative intent underlying MCO section 20(1)(d) – and, because of its similar content, MO section 40 – is plainly that the Corbett approach as described above applies. Marriage is the voluntary union for life of one man and one woman to the exclusion of all others and where the court has to decide whether a particular individual counts as a “woman” for those purposes, in Hong Kong no less than in England and Wales, the statutory intent is that Ormrod J’s criteria and approach should be adopted. 49. It follows that if this Court was concerned solely with the question of statutory construction, it would have no alternative but to hold that W cannot be treated as a “woman” for the purposes of marriage. The question then is whether a different result is reached under the Basic Law and the Bill of Rights. However, before leaving the statutory construction issue, we wish to deal briefly with certain other arguments which were raised in the present context. E.4 Ordinary meaning 50. It has been stated in a number of cases that whether someone is a “woman” in the context under discussion depends on the “ordinary meaning” of the word.[48] What is generally meant by that is that there is no technical or special meaning to be adopted, a proposition with which we readily agree. However, the reference to “ordinary meaning” must not obscure the crucial importance of context and purpose when construing the relevant provisions. One is not concerned with asking whether a post-operative transsexual woman is “a woman” in some abstract or general sense, but whether she is “a woman” for the purposes of the law of marriage and so has capacity to marry a man. This was recognized by Ormrod J who stressed that he was “not concerned to determine the ‘legal sex’ of the respondent at large” but only in the context of a marriage.[49] 51. It is perfectly possible that as a matter of law, someone in W’s position may qualify as a woman for some, but not all purposes. Thus, in Hong Kong, W is recognized as a woman for the purpose of being issued with a new identity card and a new passport. W is required to use the women’s facilities in public toilets and swimming pool changing rooms. If she had the misfortune of being sent to prison, she would be sent to a women’s prison. Lord Pannick QC may well have been correct is submitting that a host of other gender-specific statutory provisions could be applied without difficulty to W on the basis that she is presently a woman, whereas before sex reassignment, they would have applied to W as a man. That is not to suggest that possibly difficult legal issues do not arise in consequence of an individual’s sex reassignment. Some of those issues are touched on later. The point is that context and purpose are crucial when one comes to construe the legislation because the right to marry may give rise to special impeding considerations which do not exist in other contexts. 52. It is for these reasons that we do not propose to address in any detail a second strand of the statutory construction argument which was advanced on behalf of the Registrar. That involved the textual argument that a post-operative male-to-female transsexual person cannot marry a man because she is not a “woman” within the ordinary meaning of that term. The argument relied on the absence of evidence that the current ordinary usage of “man”, “woman”, “male” and “female” encompasses transsexuals; on the dictionary meanings of such words; and on the existence of negative attitudes towards transsexuals in Hong Kong. While Ms Carss-Frisk accepted that the Hong Kong statutory provisions were “always speaking”, meaning that they ought to be continuously updated to allow for changes since enactment, she submitted that there was no evidence to support any need for such updating. 53. Our approach to construction has not proceeded on the basis of some textual “ordinary meaning” but on the legislative intent made evident by their enactment history in the light of the Corbett decision. That approach, in our view, leaves no room for a debate on “ordinary meaning” nor on whether the “always speaking” provisions deserve an updated meaning. E.5 Non-consummation 54. It is sometimes suggested that the Corbett approach of regarding procreation as the essential ingredient of marriage finds support in provisions which render a marriage voidable for non-consummation. The absence of such a ground is also sometimes relied on as a basis for distinguishing Corbett.[50] Non-consummation is such a ground in Hong Kong, and this argument was relied on by the Registrar. As Miss Carss-Frisk puts it, the argument is that there is an inextricable relationship between consummation and a valid marriage which shows that procreation “remains an important feature and purpose of a marriage”.[51] This was the view taken, for instance, in B v B, a New York decision.[52] 55. Since we have accepted, without reference to non-consummation, that it was central to Ormrod J’s decision that he saw procreative sexual intercourse as essential to marriage, it would be superfluous to devote much time to this argument. We will content ourselves with saying that we are not convinced that the existence of non-consummation as a ground for voidability has any necessary connection with procreation as an essential purpose of marriage. The test for consummation has traditionally been regarded as full coital penetration but without any requirement of emission,[53] far less of conception.[54] Moreover, there is in any event authority to support the view that consummation can be achieved where the woman has had a surgically constructed vagina, suggesting that there is no legal impediment to consummating a marriage with a post-operative transsexual woman who is able to engage in sexual intercourse.[55] We are therefore not persuaded that the existence or otherwise of non-consummation as a ground for avoiding a marriage is of any present relevance. E.6 Leaving it to the legislature 56. An important submission made by the Registrar, and one that was regarded as decisive for the refusal by their Lordships in Bellinger to adopt a construction differing from that of Ormrod J, is the submission that departing from the law as established by Corbett would involve such a major change with such far-reaching ramifications that it is a matter which should be left to the legislature. It was however the case that Bellinger was decided in the knowledge that comprehensive legislation was about to be introduced by the government. Lord Nicholls put this as follows: “This would represent a major change in the law, having far reaching ramifications. It raises issues whose solution calls for extensive enquiry and the widest public consultation and discussion. Questions of social policy and administrative feasibility arise at several points, and their interaction has to be evaluated and balanced. The issues are altogether ill-suited for determination by courts and court procedures. They are pre-eminently a matter for Parliament, the more especially when the government, in unequivocal terms, has already announced its intention to introduce comprehensive primary legislation on this difficult and sensitive subject.”[56] 57. In view of the decision we have reached on the construction question, it is unnecessary presently to deal with this argument. However, it features prominently in the constitutional debate, and will be addressed in that context. F. The constitutional question F.1 The provisions relied on 58. The constitutional provisions relied on by the appellant are primarily Article 37 of the Basic Law and Article 19(2) of the Hong Kong Bill of Rights: Article 37 The freedom of marriage of Hong Kong residents and their right to raise a family freely shall be protected by law. Article 19(2) The right of men and women of marriageable age to marry and to found a family shall be recognized. 59. Since the case-law of the European Court of Human Rights (“ECtHR”) has been much referred to, the Hong Kong provisions may be compared with Article 12 of the European Convention on Human Rights (“ECHR”) which is in much the same terms: Men and women of marriageable age have the right to marry and to found a family, according to the national laws governing the exercise of this right. 60. Lord Pannick QC also prays in aid the right to privacy guaranteed by Article 14(1) of the Bill of Rights as a provision in support of his main argument based on the right to marry: Bill of Rights Article 14(1) No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation. F.2 The Court’s approach to the constitutional question 61. The right to marry is accordingly addressed both in our statute-law and in our constitutional instruments. While we accept that the definition of marriage is the same under both regimes, the question for the Court is whether the scope of the constitutionally recognized right to marry differs from the scope of such right under statute, construed in the manner discussed above. If the statutory right excludes from the institution of marriage persons whose right to marry would be recognized under the Basic Law or Bill of Rights, it would fall to the Court to declare the statutory provision to such extent unconstitutional and to decide upon the appropriate constitutional remedy. It would in particular have to decide whether the validity of the infringing provisions can be preserved by giving them a remedial interpretation. 62. The power to provide a remedial interpretation or to grant other forms of constitutional remedy was explained in the judgment of Sir Anthony Mason NPJ in HKSAR v Lam Kwong Wai,[57] and summarised in HKSAR v Ng Po On,[58] in the following terms: “Lam Kwong Wai reiterates that the Basic Law impliedly confers upon the courts of the Region power to apply a remedial interpretation to provisions which may otherwise be struck down as constitutionally invalid with a view, if possible, to preserving their validity. A remedial interpretation is capable of going beyond ordinary common law interpretation and may involve the use of judicial techniques such as reading down and reading in. The remedial techniques open to the Court also include the severance or striking out of parts or the whole of the offending provision (as held in Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at 265). The Court recognizes that such remedial techniques necessarily have their limits. The Court cannot take up a curative measure which is so fundamentally at odds with the intent of the legislation in question that adoption of such a measure properly calls for legislative deliberation.” F.3 The nature of the constitutional right to marry 63. Article 37 speaks of the “freedom of marriage of Hong Kong residents” and Article 19(2) lays down “the right of men and women of marriageable age to marry”. We do not consider that there is any difference of substance between the two formulations. It makes no difference that the terms “freedom” and “right” are used respectively. They both enjoin rejection of any unduly restrictive or exclusionary approach to the right to marry. Nor does it make any difference that Article 19(2) refers to the right as one enjoyed by “men and women” whereas Article 37 speaks of its enjoyment by “Hong Kong residents”. It is common ground that a marriage for constitutional as for common law purposes is the voluntary union for life of one man and one woman to the exclusion of all others. 64. Both Article 37 and Article 19(2) also guarantee the right to raise or found a family. The ECtHR has held in relation to ECHR Article 12, that: “...Article 12 secures the fundamental right of a man and woman to marry and to found a family. The second aspect is not however a condition of the first and the inability of any couple to conceive or parent a child cannot be regarded as per se removing their right to enjoy the first limb of this provision.”[59] In our view, the same plainly applies in Hong Kong. 65. It is in the nature of the institution of marriage that it must be subject to legal regulation, for instance, as to marriage having to be monogamous and between a man and a woman; as to what the marriageable age is and what are the permitted degrees of consanguinity. However, such legal rules must be consistent with the constitutional right to marry and must not operate so as to impair the very essence of that right. The Strasbourg Court has consistently so held. Thus, in Goodwin, it stated: “The exercise of the right to marry gives rise to social, personal and legal consequences. It is subject to the national laws of the Contracting States but the limitations thereby introduced must not restrict or reduce the right in such a way or to such an extent that the very essence of the right is impaired.”[60] 66. This has also been recognized by the House of Lords. In R (Baiai) v Secretary of State for Home Department,[61] Lord Bingham of Cornhill stated: “The Strasbourg jurisprudence requires the right to marry to be treated as a strong right which may be regulated by national law both as to procedure and substance but may not be subjected to conditions which impair the essence of the right.” 67. His Lordship explained what he meant when he called the right to marry “a strong right” as follows: “If by ‘absolute’ is meant that anyone within the jurisdiction is free to marry any other person irrespective of age, gender, consanguinity, affinity or any existing marriage, then plainly the right protected by article 12 is not absolute. But equally plainly, in my opinion, it is a strong right. It follows and gives teeth to article 16 of the Universal Declaration of Human Rights 1948 and anticipates article 23(2) of the International Covenant on Civil and Political Rights 1966. In contrast with articles 8, 9, 10 and 11 of the Convention, it contains no second paragraph permitting interferences with or limitations of the right in question which are prescribed by law and necessary in a democratic society for one or other of a number of specified purposes. The right is subject only to national laws governing its exercise.”[62] 68. This is equally applicable in Hong Kong in respect of the right to marry protected by Article 37 and Article 19(2). The legal rules governing the exercise of that right must be compatible with those Articles and must not impair the essence of the right. F.4 Goodwin and Bellinger 69. It is instructive to consider the evolution of the United Kingdom’s position under the ECHR in the case-law of the ECtHR as recognized by the House of Lords. In Rees v United Kingdom,[63] a 1986 decision involving a post-operative transsexual man who had been refused alteration of his birth certificate to show that he was male, the ECtHR approach to the right to marry under ECHR Article 12 was not far-removed from that of Ormrod J in Corbett. While it emphasised that restrictions on the right could not be such as to impair its very essence, the ECtHR stated: “In the court's opinion, the right to marry guaranteed by Article 12 refers to the traditional marriage between persons of opposite biological sex. This appears also from the wording of the Article which makes it clear that Article 12 is mainly concerned to protect marriage as the basis of the family.”[64] 70. It refused relief[65] holding that: “... there is at present little common ground between the Contracting States in this area and ..., generally speaking, the law appears to be in a transitional stage. Accordingly, this is an area in which the Contracting Parties enjoy a wide margin of appreciation.”[66] 71. Four years later, in its decision in Cossey v United Kingdom,[67] the Strasbourg Court had to deal with the complaint of a post-operative male-to-female transsexual regarding her inability under English law to enter into a valid marriage with a man. Miss Cossey: “...challenged ... the adoption in English law of exclusively biological criteria for determining a person’s sex for the purposes of marriage ... and the Court’s endorsement of that situation in the Rees judgment, despite the absence from Article 12 of any indication of the criteria to be applied for this purpose.”[68] 72. The ECtHR did not accept that complaint. Continuing to treat her as biologically male, the Court stated: “As to the applicant’s inability to marry a woman, this does not stem from any legal impediment and in this respect it cannot be said that the right to marry has been impaired as a consequence of the provisions of domestic law.”[69] 73. Like the Court in Rees, the ECtHR held that her inability to marry a man under English law was “in conformity with the concept of marriage to which the right guaranteed by Article 12 refers”.[70] It resisted the argument that it should change its approach stating: “Although some Contracting States would now regard as valid a marriage between a person in Miss Cossey’s situation and a man, the developments which have occurred to date ... cannot be said to evidence any general abandonment of the traditional concept of marriage. In these circumstances, the Court does not consider that it is open to it to take a new approach to the interpretation of Article 12 ... on the point at issue. It finds, furthermore, that attachment to the traditional concept of marriage provides sufficient reason for the continued adoption of biological criteria for determining a person’s sex for the purposes of marriage, this being a matter encompassed within the power of the Contracting States to regulate by national law the exercise of the right to marry.” §46 74. Eight years later, in Sheffield and Horsham v UK,[71] the Strasbourg Court had to deal with a challenge by a male-to-female transsexual person (who had previously been married as a male and who had a child by that marriage) against her post-operative inability to marry a man under English law. The Court re-iterated the approach to Article 12 adopted in Rees and Cossey and held that it was still not satisfied that there was a common European approach, especially with regard to: “… the problems created by the recognition in law of post-operative gender status. In particular, the survey does not indicate that there is as yet any common approach as to how to address the repercussions which the legal recognition of a change of sex may entail for other areas of law such as marriage, filiation, privacy or data protection, or the circumstances in which a transsexual may be compelled by law to reveal his or her pre-operative gender.”[72] 75. It was therefore the case that over a period spanning some twelve years, three challenges to the United Kingdom’s adherence to the Corbett approach failed. The ECtHR held that confining the sexual criteria for the right to marry to the individual’s biological characteristics fixed at the time of birth involved no violation of Article 12. It was a matter which fell within the United Kingdom’s margin of appreciation since there was no common European approach as to what such criteria should be and also no common approach as to how the repercussions of recognizing a post-operative change of gender should be handled. However, in each of those cases, the Court noted that questions regarding the rights of transsexual persons arose in an area of legal, social and scientific change, acknowledging the need to keep the position under review. Thus, in Sheffield and Horsham v UK,[73] referring to its decision in Rees,it stated: “The Court however expressed itself conscious of the problems faced by transsexuals, recalled the principle that the Convention had to be interpreted and applied in light of current circumstances and stated that the need for appropriate legal measures should be kept under review having regard particularly to scientific and societal developments.” 76. That the time for change had finally arrived was eventually acknowledged four years later by the ECtHR sitting as a Grand Chamber in Goodwin v UK.[74] The applicant was a post-operative male-to-female transsexual who complained that although she currently enjoyed a full physical relationship with a man, she and her partner could not marry because the law treated her as a man. The United Kingdom Government argued that: “... if any change in this important or sensitive area were to be made, it should come from the United Kingdom’s own courts acting within the margin of appreciation which this Court has always afforded. It also referred to the fact that any change brought the possibility of unwanted consequences, submitting that legal recognition would potentially invalidate existing marriages and leave transsexuals and their partners in same-sex marriages. Itemphasised the importance of proper and careful review of any changes in this area and the need for transitional provisions.”[75] 77. The Court dealt in turn with each of the main points upon which its previous decisions against permitting transsexuals to marry in their acquired gender rested. (a) Regarding its earlier view that excluding transsexuals was consonant with the wording of Article 12 as protecting marriage as the basis of the family, it now held (as noted in Section F.3 above) that the right to found a family was not a condition of the right to marry and therefore not an impediment.[76] (b) In the light of medical advances and social developments, it revised its view as to the adequacy of purely biological criteria for determining sexual identity. In discussing the applicant’s Article 8 complaint, it said: “While it also remains the case that a transsexual cannot acquire all the biological characteristics of the assigned sex, the Court notes that with increasingly sophisticated surgery and types of hormonal treatments, the principal unchanging biological aspect of gender identity is the chromosomal element. ... It is not apparent to the Court that the chromosomal element, amongst all the others, must inevitably take on decisive significance for the purposes of legal attribution of gender identity for transsexuals.”[77] (c) And in the context of the right to marry under Article 12, the Court stated: “The Court is not persuaded that at the date of this case it can still be assumed that these terms must refer to a determination of gender by purely biological criteria. There have been major social changes in the institution of marriage since the adoption of the Convention as well as dramatic changes brought about by developments in medicine and science in the field of transsexuality. The Court has found above, under Article 8 of the Convention, that a test of congruent biological factors can no longer be decisive in denying legal recognition to the change of gender of a post-operative transsexual. There are other important factors—the acceptance of the condition of gender identity disorder by the medical professions and health authorities within Contracting States, the provision of treatment including surgery to assimilate the individual as closely as possible to the gender in which they perceive that they properly belong and the assumption by the transsexual of the social role of the assigned gender.”[78] (d) The Court had in its earlier decisions emphasised the absence of a common European approach as the basis for according a wide margin of appreciation to Contracting States which refused post-operative legal recognition to transsexuals. It now pointed out that the lack of common approach, as noted in Sheffield and Horsham, related more to the handling of the repercussions of legal recognition of a newly acquired gender, which it described as “hardly surprising” given that the states had widely diverse legal systems and traditions. It therefore decided to attach: “...less importance to the lack of evidence of a common European approach to the resolution of the legal and practical problems posed, than to the clear and uncontested evidence of a continuing international trend in favour not only of increased social acceptance of transsexuals but of legal recognition of the new sexual identity of post-operative transsexuals.”[79] (e) It also reversed its previously expressed view that the restriction did not impair the essence of the right since there was no legal impediment against a post-operative male-to-female transsexual marrying a woman, stating as follows: “The Court has therefore considered whether the allocation of sex in national law to that registered at birth is a limitation impairing the very essence of the right to marry in this case. In that regard, it finds that it is artificial to assert that post-operative transsexuals have not been deprived of the right to marry as, according to law, they remain able to marry a person of their former opposite sex. The applicant in this case lives as a woman, is in a relationship with a man and would only wish to marry a man. She has no possibility of doing so. In the Court's view, she may therefore claim that the very essence of her right to marry has been infringed.”[80] (f) Moreover, since the exclusion of post-operative transsexual persons impaired the very essence of the right, the need for change could no longer be left within the margin of appreciation of Contracting States. To so hold: “...would be tantamount to finding that the range of options open to a Contracting State included an effective bar on any exercise of the right to marry. The margin of appreciation cannot extend so far. While it is for the Contracting State to determine inter alia the conditions under which a person claiming legal recognition as a transsexual establishes that gender re-assignment has been properly effected or under which past marriages cease to be valid and the formalities applicable to future marriages (including, for example, the information to be furnished to intended spouses), the Court finds no justification for barring the transsexual from enjoying the right to marry under any circumstances.”[81] (g) The Court had earlier pointed out that it did not underestimate “... the difficulties posed or the important repercussions which any major change in the system will inevitably have, not only in the field of birth registration, but also in the areas of access to records, family law, affiliation, inheritance, criminal justice, employment, social security and insurance.”[82] Its view, however, was that such difficulties were far from insuperable and that: “...society may reasonably be expected to tolerate a certain inconvenience to enable individuals to live in dignity and worth in accordance with the sexual identity chosen by them at great personal cost.”[83] 78. The ECtHR’s decision in Goodwin was accepted by the United Kingdom Government and prompted it to announce that it would bring forward primary legislation allowing “transsexual people who can demonstrate that they have taken decisive steps towards living fully and permanently in the acquired gender to marry in that gender” and also dealing with other issues arising from legal recognition of acquired gender.[84] 79. While the House of Lords in Bellinger held to the view that as a matter of statutory construction in domestic law, the Corbett biological criteria, fixed at the time of birth, remained determinative of who qualified as a “man” and a “woman” for the purposes of marriage, their Lordships accepted that the law so construed was incompatible with ECHR Articles 8 and 12. Lord Nicholls (with whom the other members of the House of Lords agreed) acknowledged this and held that a declaration of incompatibility with Articles 8 and 12 should be made: “The question is whether non-recognition of gender reassignment for the purposes of marriage is compatible with articles 8 and 12. The answer to this question is clear: it is not compatible. The European Court of Human Rights so found in July 2002 in Goodwin, and the Government has so accepted. ... If a provision of primary legislation is shown to be incompatible with a Convention right the court, in the exercise of its discretion, may make a declaration of incompatibility under section 4 of the Human Rights Act 1998. In exercising this discretion the court will have regard to all the circumstances. In the present case the government has not sought to question the decision of the European Court of Human Rights in Goodwin 35 EHRR 447. Indeed, it is committed to giving effect to that decision. Nevertheless, when proceedings are already before the House, it is desirable that in a case of such sensitivity this House, as the court of final appeal in this country, should formally record that the present state of statute law is incompatible with the Convention. I would therefore make a declaration of incompatibility as sought.”[85] 80. We have in this judgment similarly held that as a matter of construction, the statutory intent underlying MCO section 20(1)(d), and by extension MO section 40, was to adopt the Corbett approach when section 1(c) of the Nullity of Marriage Act 1971 was reproduced in our statute book. We turn next to consider the constitutionality of those sections so construed. F.5 The Registrar’s main arguments 81. The Registrar argues in the first place that at the times when the relevant constitutional instruments were promulgated (the ECHR in 1950, the International Covenant on Civil and Political Rights (“ICCPR”) – upon which Article 19(2) is founded – in 1966, the Joint Declaration in 1984, and the Basic Law in 1990), the framers should be assumed to have adopted a traditional approach to the nature of marriage and to the question of who qualifies as a “woman” for the purposes of the right to marry, along lines similar to those adopted by Ormrod J in Corbett. 82. The argument is that there is at present no reason to give “woman” a different meaning, especially in the absence of evidence that there has developed either a social consensus in Hong Kong or an international consensus among State Parties to the ICCPR in favour of permitting a transsexual woman like W to marry a man. On this basis, the Registrar submits that the Court should hold that there is no inconsistency between the capacity to marry under our domestic statutes construed along Corbett lines and the right to marry as laid down in Article 37 or Article 19(2). 83. Secondly, the Registrar reiterates that for the purposes of interpreting the constitution no less than of construing the Ordinances, the repercussions of legally recognizing the acquired gender of someone like W for the purposes of marriage are so far-reaching and complex that the Court should in any event refrain from intervening in a piecemeal fashion, whether by way of a remedial interpretation or otherwise, and should instead leave any changes to be made systematically by the legislature. F.6 Changes to the institution of marriage 84. We are not persuaded that as at the dates when the various constitutional documents were promulgated, the framers would necessarily have accepted the approach adopted in Corbett. In any event, even if the hypothesis that they would have done so is reasonable, it is clear (as this Court has held) that the Basic Law (and the ICCPR as given constitutional effect by the Bill of Rights and Article 39 of the Basic Law) are living instruments intended to meet changing needs and circumstances.[86] This is also true of the ECHR, as recognized by the ECtHR in Tyrer v UK[87] and A, B and C v Ireland.[88] Thus, in Cossey v United Kingdom,[89] the Strasbourg Court acknowledged that departure from a position previously adopted may be warranted “in order to ensure that the interpretation of the Convention reflects societal changes and remains in line with present-day conditions.” When the position in Hong Kong in 2013 is examined, it is in our view clear that there have been significant changes which call into question the concept of marriage adopted as a premise by Ormrod J and also the criteria which he deduced therefrom. 85. As noted above,[90] the concept of marriage adopted in Corbett was derived from the classic description of a Christian marriage in Hyde v Hyde with an emphasis on procreative sexual intercourse being an essential purpose of the matrimonial union. While the legal definition of marriage referred to above remains the same, there have in many developed nations and in Hong Kong clearly been far-reaching changes to the nature of marriage as a social institution. This was cogently expressed by Thorpe LJ in his dissenting judgment in Bellinger in the Court of Appeal: “...the world that engendered those classic definitions has long since gone. We live in a multi-racial, multi-faith society. The intervening 130 years have seen huge social and scientific changes. Adults live longer, infant mortality has been largely conquered, effective contraception is available to men and women as is sterilisation for men and women within marriage. Illegitimacy with its stigma has been legislated away: gone is any social condemnation of cohabitation in advance of or in place of marriage. Then marriage was terminated by death: for the vast majority of the population divorce was not an option. For those within whose reach it lay, it carried a considerable social stigma that did not evaporate until relatively recent times. Now more marriages are terminated by divorce than death. Divorce could be said without undue cynicism to be available on demand. These last changes are all reflected in the statistics establishing the relative decline in marriage and consequentially in the number of children born within marriage. Marriage has become a state into which and from which people choose to enter and exit. Thus I would now redefine marriage as a contract for which the parties elect but which is regulated by the state, both in its formation and in its termination by divorce, because it affects status upon which depend a variety of entitlements, benefits and obligations.”[91] 86. It has of course never been a legal requirement that two individuals should be able to or wish to procreate children together as a condition of their getting married. People who are past child-bearing or child-begetting age, people who use contraceptives or have had themselves sterilised, and people who simply do not wish to have children, can get married, like anyone else. Developments such as those referred to by Thorpe LJ go further. They indicate how, taking such changes as a whole, the institution of marriage has evolved so that in contemporary society, the importance attributed by Ormrod J to procreation as the essential constituent of a Christian marriage has much diminished. Men and women who decide to share their lives together now exercise far greater choice in deciding whether to marry at all, whether to have children, how their property should be dealt with and indeed, whether they should remain together as a couple. While many in society will still no doubt regard procreation as of great importance to a marriage, many others will take a different view. Many people now marry without having children, while many others have children without getting married, neither group attracting social opprobrium. 87. In AG (CTH) v “Kevin and Jennifer”,[92] the Full Court of the Australian Family Court dealt with an argument which similarly sought to deduce biological criteria for sexual identity on the basis that procreation is an essential purpose of marriage: “The real point of the Attorney-General's submission was to support an argument that pro-creation is one of the essential purposes of marriage. It was argued that it follows from this that the biological characteristics of a person are central to determining a person's status as a man or a woman. It was put that the historical importance of the sexual relationship in marriage remains and that it is because of this significance that the law continues to look to the physical attributes, and not the psychological or social attributes, of a person. It is therefore said that because of Kevin's biological inability to procreate, the marriage to Jennifer could not be a valid marriage.”[93] 88. That argument was rejected, their Honours stating: “Like the trial judge, we reject the argument that one of the principal purposes of marriage is procreation. Many people procreate outside marriage and many people who are married neither procreate, nor contemplate doing so. A significant number of married persons cannot procreate either at the time of the marriage or subsequently -- an obvious example being a post-menopausal woman.”[94] 89. The developments mentioned above compel re-examination of the premise – that procreative sexual intercourse is an essential constituent of marriage – from which the Corbett biological criteria were deduced. In present-day multi-cultural Hong Kong where people profess many different religious faiths or none at all and where the social conditions described by Thorpe LJ by and large prevail, procreation is no longer (if it ever was) regarded as essential to marriage. There is certainly no justification for regarding the ability to engage in procreative sexual intercourse as a sine qua non of marriage and thus as the premise for deducing purely biological criteria for ascertaining a person’s sex for marriage purposes. F.7 The Corbett criteria re-considered 90. If one leaves aside that premise, it is not easy to see any justification for confining the criteria for deciding who counts as “a woman” for marriage purposes to biological criteria fixed at birth, and ignoring the psychological, post-operative and social dimensions of the transsexual person’s sexual identity viewed at the time of the proposed marriage. Such a selective choice of criteria is particularly hard to justify in the light of significant medical advances in the treatment of transsexualism and important changes in the understanding of and social attitudes towards transsexual persons which have occurred over the last 40 odd years. F.7a Medical advances and changed societal attitudes 91. When the applicant in Corbett had her SRS in 1960, such surgery was not readily available in the United Kingdom. She had to have it performed in Casablanca by a Dr Georges Burou who pioneered that surgical procedure. In B v B,[95] the New York Court noted that in the 15 years before 1974, Dr Burou had performed some 700 male-to-female operations. When Ormrod J decided the Corbett case in 1970, it appears that SRS was not yet regarded by the medical community as the accepted therapy for severe cases of transsexualism. His Lordship noted that transsexuals “do not appear to respond favourably to any known form of psychological treatment” and commented that “consequently, some serious minded and responsible doctors are inclining to the view that such operations may provide the only way of relieving the psychological distress.”[96] 92. Today, transsexualism is everywhere recognized as a condition requiring medical treatment, with diagnostic criteria approved by the World Health Organization. The therapeutic regimen spanning several years, involving psychiatric assessment, hormonal treatment, monitored “real life experience” and ultimately SRS, is not only readily available and well-developed, but is often provided by health authorities at public expense.[97] 93. This is true of Hong Kong where, as noted above, the first documented SRS procedure was performed in 1981. In 1986, the Government set up the Gender Identity Team in the Psychiatric Unit of Queen Mary Hospital and, in 2005, treatment was made available to gender identity disorder patients throughout Hong Kong in line with the Hospital Authority’s district hospital clustering concept. And as Andrew Cheung J recorded in the present case: “In 2005, the Government set up a ‘Gender Identity and Sexual Orientation Unit’ to handle gender identity and sexual orientation issues and to liaise with relevant non-government organisations in relation to the same. Amongst other things, the Unit is responsible for maintaining an enquiry and complaint hotline, keeping statistics and details of the enquiries and complaints for future reference, conducting research on gender identity and sexual orientation issues, and organising further promotional activities to promote equal opportunities on the ground of sexual orientation. It also serves as the secretariat of the Sexual Minorities Forum, a forum set up by the Government for policy review and formulation purposes. It provides a channel for non-government organisations and the Government to exchange views on human rights and other issues concerning sexual minorities (including transsexual persons) in Hong Kong.”[98] 94. As we have noted, on completion of SRS, the Hospital Authority issues the patient with a letter certifying that the patient’s gender has been changed, enabling the patient to be issued with a new identity card and passport which reflect that change and which permit his or her acquired gender to be recognized for many other purposes. Present day practice shows how, in the 40 odd years since Corbett, official policies and societal attitudes have evolved, with post-operative transsexuals now being recognized as persons of their acquired gender for a whole range of purposes. This is of course not to suggest that transsexual men and women no longer face prejudice and hostile treatment in the tabloid press and elsewhere in society. Considerable advances have nonetheless been made. 95. The position of W in the midst of such changes may be considered. From an early age she has psychologically held the unchangeable perception of herself as a woman and then made a long and painful transition which involving surgical removal of the original male genital and gonadal organs; hormonal or surgical creation of female breasts; surgical construction of an artificial vagina which permits sexual intercourse with a man; learning to live in society as a woman; and obtaining official recognition as a female for the purposes mentioned above, although retaining male XY chromosomes. Having had access to surgical, hormonal and psychiatric treatment of undoubtedly greater sophistication than available in Corbett’s time, she may now properly be described as an individual who is psychologically, medically and socially a woman living and having a physical relationship with a man, although a woman who is unable to bear children. Of the three biological criteria applied in Corbett with exclusionary effect, the male genital and gonadal factors have been permanently eliminated and only the male chromosomal criterion remains. 96. We think it would be quite wrong to exclude such a transsexual person from the right to marry in her acquired gender by characterising her as a “pseudo-type of woman”, a term used by Nestadt J in W v W, a South African case decided in 1976.[99] 97. We share the view expressed by the ECtHR in Goodwin[100]that it is not at all apparent that this chromosomal element, amongst all the others, should take on decisive significance in the legal attribution of gender identity for transsexuals for the purposes of marriage. We respectfully agree with Thorpe LJ’s view in his dissenting judgment in Bellinger,[101] that confining the test to physiological factors is manifestly incomplete, especially so where those factors are, after sex reassignment treatment, further confined to the chromosomal element. As Lockhart J put it: “Sex is not merely a matter of chromosomes, although chromosomes are a very relevant consideration. Sex is also partly a psychological question (a question of self perception) and partly a social question (how society perceives the individual).” [102] F.7b The importance of psychological and social factors as criteria 98. The importance of the psychological and social dimensions of a transsexual person’s sexual identity is now far better understood than in Corbett’s time. It is evident from Ormrod J’s judgment that the psychological forces driving the transsexual to seek sex reassignment were then given little weight. The following passage is revealing: “Socially, by which I mean the manner in which the respondent is living in the community, she is living as, and passing as a woman, more or less successfully. Her outward appearance at first sight was convincingly feminine but on closer and longer examination in the witness box it was much less so. The voice, manner, gestures and attitudes became increasingly reminiscent of the accomplished female impersonator. The evidence of the medical inspectors and of the other doctors who had an opportunity during the trial of examining the respondent clinically is that the body in its post-operative condition looks more like a female than a male as a result of very skilful surgery. Professor Dewhurst, after this examination, put his opinion in these words: ‘the pastiche of femininity was convincing.’ That, in my judgment, is an accurate description of the respondent.”[103] 99. To liken a post-operative transsexual woman to a “female impersonator” and to describe her as representing a “pastiche of femininity” (just as much as describing her as a “pseudo-type of woman”) suggests an element of artifice and betrays a failure to recognize the fundamental importance and potency of the individual’s psychological compulsion as a determinant of her sexual identity, a compulsion which is widely acknowledged today. 100. As Lord Nicholls recognized in Bellinger:[104] “...Much suffering is involved for those afflicted with gender identity disorder. Mrs Bellinger and others similarly placed do not undergo prolonged and painful surgery unless their turmoil is such that they cannot otherwise live with themselves. Non-recognition of their reassigned gender can cause them acute distress.” 101. And as the ECtHR noted in Goodwin: “...given the numerous and painful interventions involved in such surgery and the level of commitment and conviction required to achieve a change in social gender role, ... it [cannot] be suggested that there is anything arbitrary or capricious in the decision taken by a person to undergo gender re-assignment.”[105] 102. That transsexual persons are willing to endure such a long and painful ordeal to acquire a body which conforms as far as possible with their self-perception and to struggle for social recognition in their acquired gender is clear evidence of the fundamental importance of the psychological factor as a determinant of their sexual identity. For the law to exclude that factor as a criterion is quite unjustifiable. F.7c The inadequacy of the Corbett criteria 103. It follows from the foregoing discussion that, in our view, the Corbett criteria which underlie the construction of MCO section 20(1)(d) and MO section 40 must be regarded as too restrictive and should no longer be accepted. In addressing the question whether an individual like W qualifies as “a woman” so as to be entitled to marry a man, the Court ought in principle to consider all the circumstances – biological, psychological and social – relevant to assessing that individual’s sexual identity at the time of the proposed marriage. We can see no good reason for the Court to adopt criteria which are fixed at the time of the relevant person’s birth and regarded as immutable. That is to adopt a blinkered view, looking only at circumstances existing at a time when the psychological element – which is so important to the sexual identity of transsexuals – was not manifest, and when the surgical and social transformation of the individual had not yet taken place. It is contrary to principle that the Court, in making the important determination of whether a transsexual person has in law the right to marry, should be prevented from taking account of all the available evidence. 104. In AG (CTH) v “Kevin and Jennifer”,[106] the Full Court expressed a similar view: “We have difficulty in understanding how the Corbett test can continue to be applied in face of the evidence, not only as to brain sex,[107] but also as to the importance of psyche in determining sex and gender. The fact that these issues cannot be physically determined at birth seems to us to present a strong argument: first, that a child's sex cannot be finally determined at birth; and second, that any determination at that stage is not and should not be immutable.” 105. The inadequacy of the Corbett criteria was central to the ECtHR’s decision in Goodwin to hold that the English statute was incompatible with Article 12[108] of the ECHR, an incompatibility which the House of Lords accepted in Bellinger. As we noted above,[109] the ECtHR stated: “The Court is not persuaded that at the date of this case it can still be assumed that these terms must refer to a determination of gender by purely biological criteria. There have been major social changes in the institution of marriage since the adoption of the Convention as well as dramatic changes brought about by developments in medicine and science in the field of transsexuality. The Court has found above, under Article 8 of the Convention, that a test of congruent biological factors can no longer be decisive in denying legal recognition to the change of gender of a post-operative transsexual. There are other important factors—the acceptance of the condition of gender identity disorder by the medical professions and health authorities within Contracting States, the provision of treatment including surgery to assimilate the individual as closely as possible to the gender in which they perceive that they properly belong and the assumption by the transsexual of the social role of the assigned gender.”[110] 106. To apply statutory criteria which are incomplete and which do not permit a full assessment of the sexual identity of an individual for the purposes of determining whether such person has the right to marry is inconsistent with, and constitutes a failure to give proper effect to, the constitutional right guaranteed by Article 37 and Article 19(2). 107. We have in Section A of this judgment, set out the factors which, Dr Ho Pui Tat identified as relevant to assessing the sexual identity of an adult individual. In our view, all of those factors ought properly to be taken into account as they exist at the time of the marriage or proposed marriage when ascertaining whether the individual concerned has the right to marry in his or her acquired gender. In Section H below, we address the question of what, after taking account of all such criteria, the determining test of who counts as “a woman” for marriage purposes should be. But before turning to that question, there is a further reason why the relevant statutory provisions, construed as endorsing the Corbett criteria, are unconstitutional. F.8 Impairing the very essence of the right 108. As indicated above,[111] while the right to marry is necessarily subject to legal rules regulating its exercise, such rules must be consistent with, and must not operate to impair the very essence of, the constitutional right. [112] 109. The existing statutory provisions, construed as aforesaid, preclude W from marrying a man. In the light of the irreversible surgery which she has undergone to eliminate the original male genital and gonadal organs; and in the light of her implacable rejection of her male sexual identity, there is no question of her enjoying in any meaningful sense the right to marry by being able to marry a woman. The applicant in Goodwin v UK was in the same position and, as we have noted, the Grand Chamber decided that she had been denied the essence of the right to marry. It held: “...that it is artificial to assert that post-operative transsexuals have not been deprived of the right to marry as, according to law, they remain able to marry a person of their former opposite sex. The applicant in this case lives as a woman, is in a relationship with a man and would only wish to marry a man. She has no possibility of doing so. In the Court’s view, she may therefore claim that the very essence of her right to marry has been infringed.”[113] 110. As the New Zealand Court in AG v Otahuhu Family Court,[114] pointed out, “Once a transsexual has undergone surgery, he or she is no longer able to operate in his or her original sex.” And as the Australian Court recognized, after surgery rendering “the patient’s psychic association with the female sex ... strongly supported by anatomical changes”, it is “impossible to go back”.[115] 111. All this applies to W and we conclude that MCO section 20(1)(d) and MO section 40, construed as endorsing the Corbett criteria, operate to prevent W from marrying at all. They are therefore provisions which unconstitutionally impair the very essence of the right to marry guaranteed by Article 37 and Article 19(2). 112. In the light of the aforesaid conclusions, it is unnecessary to embark upon a discussion of the extent, if any, to which W’s right to privacy under Article 14 under the Bill of Rights may support her constitutional right to marry. F.9 Consensus 113. An argument which we should mention is one which was pressed by the Registrar. The submission is that, by analogy with the reluctance of the ECtHR, prior to its decision in Goodwin, to declare the United Kingdom’s position on transsexual marriage a violation of the right to marry protected by ECHR Article 12 because of the lack of a European consensus on the issue, this Court should be equally reticent to declare the relevant statutory provisions unconstitutional unless persuaded that there is a general consensus among the people of Hong Kong in favour of permitting such individuals to marry in their acquired gender. It is submitted that there is no evidence either of such social consensus or of an international consensus among countries which are signatories to the ICCPR. 114. We do not accept that argument, even assuming that such consensus can somehow be guaged. In the first place, we do not consider that the practice of the ECtHR in seeking a European consensus when considering the margin of appreciation has any bearing on the Court’s role in interpreting the HKSAR’s constitution in a case like the present. In R (Al Skeini) v Defence Secretary,[116]Lord Rodger of Earlsferry’s explanation of the ECtHR’s practice by reference to the very nature and make-up of that Court highlights the very different situation of this Court (and of States Parties to the ICCPR). His Lordship put it thus: “The essentially regional nature of the Convention is relevant to the way that the court operates. It has judges elected from all the contracting states, not from anywhere else. The judges purport to interpret and apply the various rights in the Convention in accordance with what they conceive to be developments in prevailing attitudes in the contracting states. This is obvious from the court's jurisprudence on such matters as the death penalty, sex discrimination, homosexuality and transsexuals. The result is a body of law which may reflect the values of the contracting states, but which most certainly does not reflect those in many other parts of the world.” 115. There is, moreover, a more fundamental objection to the consensus argument. As we stated in Section F.6 above, we of course accept that the Basic Law and the Bill of Rights are living instruments intended to meet changing needs and circumstances. However, it is one thing to have regard to such changes as a basis for accepting a more generous interpretation of a fundamental right and quite another to point to the absence of a majority consensus as a reason for denying recognition of minority rights. Thus, as we pointed out, in its case-law leading up to its Goodwin decision, the ECtHR acknowledged that a departure from a position previously adopted – involving the upholding of the United Kingdom’s then denial of the right to marry – may be warranted “in order to ensure that the interpretation of the Convention reflects societal changes and remains in line with present-day conditions.” Such a departure involved expanding the reach of the right on the basis of societal changes. 116. Reliance on the absence of a majority consensus as a reason for rejecting a minority’s claim is inimical in principle to fundamental rights. The Chief Justice of Ireland, Murray CJ, made the point extra-judicially in the following terms: “...The use of consensus as an interpretive tool is inherently problematic, not only because of any perceived inconsistency in the application of the doctrine by the [ECtHR], but fundamentally because the very application of a doctrine of consensus by a court required to adjudicate on fundamental rights begs important questions of legitimacy. How can resort to the will of the majority dictate the decisions of a court whose role is to interpret universal and indivisible human rights, especially minority rights?...”[117] G. Conclusion as to construction and constitutionality 117. For the reasons discussed, we conclude that the Registrar did not misconstrue MO section 40 or MCO section 20(1)(d). The statutory intention behind enactment of MCO section 20(1)(d) was to reproduce in our statute book section 1(c) of the Nullity of Marriage Act 1971, later re-enacted as section 11(c) of the Matrimonial Causes Act 1973, and thereby to import into Hong Kong the endorsement which the United Kingdom Parliament gave to the Corbett criteria for determining who was “a woman” for the purposes of marriage. Since MO section 40 (which does not have an English equivalent) covers materially the same ground as MCO section 20(1)(d), the Registrar’s approach was in accordance with the true construction of both of those provisions. 118. However, the Corbett criteria are incomplete in that they are limited to a person’s biological features existing at the time of birth and treated as immutable. They ignore the psychological and social elements of a person’s sexual identity and ignore any sex reassignment treatment that has occurred. As such, they do not permit a full and appropriate assessment of the sexual identity of a person to be made for the purposes of determining whether he or she has the right to marry. In adopting such restrictive criteria, the provisions are inconsistent with and fail to give proper effect to the constitutional right to marry. They are therefore unconstitutional. 119. Additionally, they are unconstitutional since they impair the very essence of the right to marry. Viewing the realities of W’s position, by denying a post-operative transsexual woman like her the right to marry a man, the statutory provisions in question deny her the right to marry at all. They are therefore unconstitutional for this additional reason. H. Relief H.1 Further submissions 120. Because of the possible ramifications of the judgment in other areas of the law, both parties have requested the Court to afford them the opportunity to make further submissions as to the exact terms of the declaration to be granted and whether it should have immediate effect in the event that the Court finds in favour of the appellant. We agree that such course is advisable. We should nonetheless indicate (i) what relief we consider the appellant to be entitled to in any event; (ii) which areas we think may helpfully be considered for consequential legislation and how some of the main issues might be approached; and (iii) what would follow in the event that no legislation is enacted. H.2 The relief to which W would be entitled in any event 121. It is well-established that where the Court concludes that a piece of legislation is unconstitutional, it has a duty either to declare it invalid or, as noted above,[118] to provide a remedial interpretation rendering the provision consistent with the constitution.[119] This was stated in Ng Ka Ling v Director of Immigration,[120] as follows: “In exercising their judicial power conferred by the Basic Law, the courts of the Region have a duty to enforce and interpret that Law. They undoubtedly have the jurisdiction to examine whether legislation enacted by the legislature of the Region or acts of the executive authorities of the Region are consistent with the Basic Law and, if found to be inconsistent, to hold them to be invalid. The exercise of this jurisdiction is a matter of obligation, not of discretion so that if inconsistency is established, the courts are bound to hold that a law or executive act is invalid at least to the extent of the inconsistency.” 122. In this context, while we accept (as we explain below) that the legislature may potentially play a highly valuable and constructive role in making provision for certain legal consequences that flow from our ruling of unconstitutionality, we cannot accept the argument that the Court should “leave it to the legislature” and should not itself decide upon the constitutional validity of the provisions as (correctly) construed by the Registrar. 123. It follows that while we are prepared to await further submissions from the parties before finalising the Orders to be made and would be amenable to suspending the operation of such Orders for an appropriate period to give time for the enactment of legislation,[121] we hold that it is necessary in principle that a remedial interpretation should be given to MCO section 20(1)(d) and MO section 40. It is a remedial interpretation which requires the references to “woman” and “female” to be read as capable of accommodating post-operative male-to-female transsexual persons for marriage purposes and as allowing account to be taken of the full range of criteria for assessing sexual identity, viewed at the date of the marriage or proposed marriage. 124. On that basis, we hold that a transsexual in W’s situation, that is, one who has gone through full SRS, should in principle be granted a declaration that, consistently with Article 37 of the Basic Law and Article 19(2) of the Bill of Rights, she is in law entitled to be included as “a woman” within the meaning of MO section 40 and MCO section 20(1)(d) and therefore eligible to marry a man. We would not seek to lay down a rule that only those who have had full gender reassignment surgery involving both excising and reconstructive genital surgery, qualify. We leave open the question whether transsexual persons who have undergone less extensive treatment might also qualify. 125. In adopting that approach, we are of course conscious of the need, acknowledged in Section F.7c above, to address the question of what, upon applying the full range of criteria for assessing a person’s sexual identity, the test or means for determining who counts as “a woman” for marriage purposes should be. That question is shortly to be addressed. However, in our view, a transsexual person who, as Dr Albert Yuen Wai Cheung explained, has been issued with a certificate that his or her gender has been changed on the basis that the original genital organs have been removed and some form of the genital organs of the opposite sex have been constructed, ought in any event to qualify as a person entitled to marry in his or her acquired gender. 126. We consider this a result which should be reached as a matter of constitutional principle. As the ECtHR stated in Goodwin: “...the very essence of the Convention is respect for human dignity and human freedom.” [122] We agree with the observation of Lord Nicholls in Bellinger[123] that recognising such an individual’s change of gender is necessary to avoid: “... condemning post-operative transsexual people to live in what was aptly described by the European Court of Human Rights in the Goodwin case 35 EHRR 447 as an intermediate zone, not quite one gender or the other.” H.3 Areas which would benefit from legislative intervention 127. As previously mentioned, it is likely that in most cases, no difficulty will be encountered in applying gender-specific statutory and other legal provisions to a person whose gender change has been legally recognized. To take a relatively trivial example, a transsexual woman who previously used the men’s toilet and changing facilities will now use such facilities reserved for women without breaking any laws[124] regulating their use. 128. But we of course recognize that possibly difficult issues could arise in certain areas and it is with a view to allowing an opportunity for the Government and the legislature to consider enacting legislation to deal with such areas that we are prepared to suspend operation of the Orders to be made by the Court. We also recognize that in addressing such potential problems, it is necessary to strike a balance between the rights of transsexual persons and the rights of others who may be affected by recognition of the gender change. The necessary balance was considered extra-judicially by Lord Reed as follows: “... for the law to ignore transsexualism, either on the basis that it is an aberration which should be disregarded, or on the basis that sex roles should be regarded as legally irrelevant, is not an option. The law needs to respond to society as it is. Transsexuals exist in our society, and that society is divided on the basis of sex. If a society accepts that transsexualism is a serious and distressing medical problem, and allows those who suffer from it to undergo drastic treatment in order to adopt a new gender and thereby improve their quality of life, then reason and common humanity alike suggest that it should allow such persons to function as fully as possible in their new gender. The key words are ‘as fully as possible’: what is possible has to be decided having regard to the interests of others (so far as they are affected) and of society as a whole (so far as that is engaged), and considering whether there are compelling reasons, in the particular context in question, for setting limits to the legal recognition of the new gender.”[125] H.4 The test for who qualifies as “a woman” for marriage purposes 129. The first area in which legislative intervention would, in our view, be highly beneficial involves establishing the means for deciding who qualifies as “a woman” or “a man” for marriage and other purposes. 130. Two main approaches to deciding that question in the context of marriage have emerged. The first involves the formulation by judges of some test – usually involving the drawing of a line at some point in the sex reassignment process – for marking the stage at which a gender change is recognized. The second approach involves establishing a gender recognition procedure whereby each case is examined with a view to certification by an expert panel without necessarily adopting any bright line test. The latter approach can obviously only be achieved by legislation. 131. The first approach often involves the court drawing the line at the point where surgery is performed. This is understandable since the preceding hormonal and psychiatric treatments are generally reversible, while sex reassignment surgery is not. However, there are stages of such surgery to be considered: Is it enough that the individual’s original genital organs have been removed? Must the surgery extend to the construction of some form of the genital organs of the acquired gender? Must those organs be such as to permit sexual intercourse in the acquired gender? 132. A few examples of how judges have responded to such questions may be mentioned. In the Australian case of Secretary, Dept of Social Security v “SRA”[126] the line was drawn between pre- and post-operative transsexuals, with Black CJ regarding “post-operative” cases as comprising only those where both removal and reconstruction of external genitalia have taken place: “Where through medical intervention a person born with the external genital features of a male has lost those features and has assumed, speaking generally, the external genital features of a woman and has the psychological sex of a woman, so that the genital features and the psychological sex are in harmony, that person may be said, according to ordinary English usage today, to have undergone a sex change.” 133. The majority in the Court of Appeal in Bellinger,[127]recorded that a similar test had been adopted in German legislation which, after laying down certain preconditions, required the person to have “undergone an operation by which clear resemblance to the other sex has been achieved.” 134. In MT v JT,[128] a more demanding test was adopted by a New Jersey Court. The post-operative individual was required to have “sexual capacity” in his or her acquired gender, meaning “the physical ability and the psychological and emotional orientation to engage in sexual intercourse as either a male or a female.” Drawing the line at that point excluded a female-to-male transsexual who had had a hysterectomy and mastectomy but who had not received any male organs and was incapable of performing sexually as a male.[129] 135. Such an outcome may be thought to be somewhat harsh, especially as it affects female-to-male transsexuals. This was recognized in the New Zealand case of AG v Otahuhu Family Court,[130] where the suggestion was made that less exacting tests might perhaps be adopted in some contexts while retaining the more demanding tests for the purposes of marriage: “... there may need to be different criteria in respect of different circumstances, involving the sex reassignment of any one individual. ... A pre-operative transsexual who nevertheless dresses and behaves in the assigned sex may be accepted in that sex for employment and social purposes, and for documents such as driving licences. It may not be appropriate for such a person whose genitals do not correspond with the sex of assignment to be able to marry in that sex.” 136. Some form of line-drawing is probably the only feasible approach if it is left to judges to determine what the test should be. While we have no reason to think that those jurisdictions which have followed that route have experienced any particular difficulties, it is an approach which has evident disadvantages. It would be highly undesirable to formulate different tests for different purposes (as suggested in the Otahuhu case) so that a person would only sometimes be recognized as an individual of his or her acquired gender. That is, indeed, to some extent the unsatisfactory position we have in Hong Kong at present. On the other hand, a bright line test applied universally is inevitably likely to produce hard cases in certain circumstances unless special provision is made. Moreover, as Lord Nicholls points out,[131] drawing the line at the point where full SRS has been undertaken may have an undesirable coercive effect on persons who would not otherwise be inclined to undergo the surgery. 137. It is with such disadvantages in mind that we have refrained, at least at this stage, from attempting any judicial line-drawing of our own, contenting ourselves with declaring that a person in W’s post-operative situation does qualify and leaving it open whether and to what extent others who have undergone less extensive surgical or medical intervention may also qualify. 138. The second approach, involving legislative intervention, would in our view, be distinctly preferable. The legislature could set up machinery for an expert panel to vet gender recognition claims on a case-by-case basis and also to deal with some of the other legal issues mentioned below. A compelling model may readily be found in the United Kingdom’s Gender Recognition Act 2004 (“GRA 2004”) which, it will be recalled, was being prepared when Bellinger was decided in the House of Lords. The approach of the Act was then described by Lord Nicholls as “primary legislation which will allow transsexual people who can demonstrate they have taken decisive steps towards living fully and permanently in the acquired gender to marry in that gender”.[132] 139. True to that description, the GRA 2004 does not lay down a bright line test for when a transsexual person does or does not qualify for recognition in his or her acquired gender. Instead, the Act sets up a panel with legal and medical members which hears applications for gender recognition and requires the panel to grant a gender recognition certificate : “... if satisfied that the applicant— (a) has or has had gender dysphoria, (b) has lived in the acquired gender throughout the period of two years ending with the date on which the application is made, (c) intends to continue to live in the acquired gender until death, and (d) complies with the requirements imposed by and under section 3 [which lays down the requirements regarding medical evidence and certain other supporting documents].” 140. If a full gender recognition certificate[133] is issued, the person’s gender becomes for all purposes the acquired gender, save that this does not “affect things done, or events occurring, before the certificate is issued; but it does operate for the interpretation of enactments passed, and instruments and other documents made, before the certificate is issued (as well as those passed or made afterwards)”.[134] H.5 Other areas of the law where legislative intervention would be beneficial 141. As the GRA 2004 indicates, several other areas exist where legislative regulation would be particularly valuable. One prominent issue involves the impact of a legally recognized gender change on an existing marriage. For example, a male-to-female transsexual may be married to a woman before undergoing sex reassignment treatment qualifying her for legal recognition in her acquired gender as a woman. What impact would that have on the marriage and on the existing wife’s rights (and, if there are children, on the children’s rights)? Does the transsexual woman retain the rights and duties of a husband and father? If the couple wish to end the marriage, does the gender change provide a ground for doing so? No doubt the courts could work out the answers to such questions as they arise by applying existing legal provisions, but it would obviously be far preferable to have a legislative solution worked out in advance. 142. By way of illustration, the GRA 2004, provides in various ways for such a situation. If the applicant is married, the gender recognition panel can only grant an interim certificate and a full certificate can only subsequently be issued where the marriage is annulled or dissolved. The Act makes the issue of an interim gender recognition certificate a ground for treating the existing marriage as voidable, enabling the parties to annul the marriage and giving the Family Court full powers to deal with ancillary relief. It makes it clear that the change in gender does not affect the status of the person as father or mother of a child. 143. Perusal of the GRA 2004 indicates that legislative intervention would also be beneficial in areas which include (apart from marriage and parenting) entitlement to benefits and pensions, discrimination, succession, the position of trustees administering trusts, sport, the application of gender-specific offences and recognition of foreign gender change and marriage. In respect of all these areas, the Act provides a practical model for possible approaches to dealing with legal issues which could arise. 144. Furthermore, as that Act illustrates, questions of disclosure could beneficially be dealt with by legislation. Again, simply by way of illustration, it protects information concerning a person’s gender before it became the acquired gender subject to rules and procedures as to when such information may be disclosed. 145. Plainly, in any legislative scheme, cases may arise where certain legal ramifications of recognizing a person’s acquired gender have not been foreseen. To cater for such eventuality, the GRA 2004 empowers a responsible minister to make orders modifying the operation of any enactment or subordinate legislation in relation to persons whose gender has changed.[135] The court’s are of course accustomed to dealing with such issues. 146. The object of this discussion is simply to draw attention to the sorts of questions which may arise in consequence of this Court’s decision as to unconstitutionality and to indicate how legislation would be beneficial in addressing such issues. It is fortunate that existing models which are readily adaptable to Hong Kong exist so that the task of providing a legislative framework is less daunting that it might otherwise be. But it is of course entirely a matter for the legislature to decide whether such legislation should be enacted. H.6 If there is no legislation 147. If such legislation does not eventuate, it would fall to the Courts, applying constitutional principles, statutory provisions and the rules of common law, to decide questions regarding the implications of recognizing an individual’s acquired gender for marriage purposes as and when any disputed questions arise. That would not, in our view, pose insuperable difficulties. 148. In respect of the present appeal, we have indicated in Section H.2 above, the nature of the relief which we consider W entitled to in principle. Assuming that having taken account of further submissions from the parties, the Court grants W a declaration along the lines indicated below and suspends its operation for an appropriate period, such declaration would in principle come into effect in any event at the expiry of that period. At that stage, supporting consequential legislation may or may not be in place but W’s entitlement to appropriate relief should not be affected. H.7 Conclusion 149. We would accordingly direct that the parties be at liberty to lodge within 21 days from the date of this judgment, submissions in writing in respect of the appropriate Orders to be made in the light of the Court’s judgment and also submissions on costs, with liberty to file written submissions in reply, if any, within 14 days thereafter. 150. Subject to any modifications which the Court may consider warranted in the light of such submissions and subject to the question of costs, we would make the following Orders, namely: (a) That the appeal be allowed; (b) That a Declaration be granted that, consistently with Article 37 of the Basic Law and Article 19(2) of the Hong Kong Bill of Rights, section 20(1)(d) of the Matrimonial Causes Ordinance and section 40 of the Marriage Ordinance must be read and given effect so as to include within the meaning of the words “woman” and “female” a post-operative male-to-female transsexual person whose gender has been certified by an appropriate medical authority to have changed as a result of sex reassignment surgery; (c) That a Declaration be granted that the appellant is in law entitled to be included as “a woman” within the meaning of section 20(1)(d) of the Matrimonial Causes Ordinance and section 40 of the Marriage Ordinance and is accordingly eligible to marry a man; (d) That the Declarations in paragraphs (b) and (c) shall not come into effect until the expiry of 12 months from the date of this Order. Mr Justice Chan PJ： 151. I would, with respect, reject the appellant’s arguments on both the statutory construction issue and the constitutional issue and dismiss her appeal. 152. For the reasons which I shall seek to explain below, I am not persuaded that there is justification for extending the meaning of “marriage” in art 37 of the Basic Law to include a transsexual marriage. However, I can see a strong case for a comprehensive review of the relevant legislation with a view to propose changes in the law concerning the problems facing transsexuals as soon as practicable. The statutory construction issue 153. On the statutory construction issue, I agree, for the reasons given by the courts below and the reasons discussed in the joint judgment of Chief Justice Ma and Mr Justice Ribeiro PJ, that the appellant’s argument cannot be accepted. In my view, it is clearly the intention of the legislation to adopt the approach in Corbett v Corbett [1971] P 83 for the purpose of marriage and that “man” and “woman” in s.40 of the Marriage Ordinance, Cap 181 and also s.20(1)(d) of the Matrimonial Causes Ordinance, Cap 179, mean a biological man and a biological woman. As a matter of statutory construction, these words are not capable of being given an extended meaning to cover a transsexual man or woman. The constitutional issue 154. On the constitutional issue, it is the appellant’s case that she has a right to marry under art 37 of the Basic Law (art 37) and art 19(2) of the Bill of Rights (art 19(2)). She accepts that “marriage” under these constitutional provisions refers to a union between a man and a woman. However, it is argued that she is a woman and should be recognized as such for the purpose of marriage as provided in these constitutional provisions and that if s.40 is interpreted as not permitting her to marry on the ground that she is not a biological woman and cannot marry a biological man, this provision (together with s.20(1)(d)) is incompatible with art 37 and art 19(2). She asks the Court either to strike down or apply an appropriate remedial interpretation to these legislative provisions. The relevant articles 155. Art 37 provides: “The freedom of marriage of Hong Kong residents and their right to raise a family freely shall be protected by law.” Art 19(2) of the Bill of Rights provides: “The right of men and women of marriageable age to marry and to found a family shall be recognized.” 156. For the purpose of the arguments in this case, it is accepted that art 19(2) by expressly referring to men and women does not add anything to the appellant’s argument on art 37. In the discussion which follows, for the sake of clarity, I shall mainly deal with art 37. 157. The appellant also relies on art 14 of the BOR which protects her right to privacy. However, as indicated by counsel, art 14 is not argued as a separate ground but is relied on in support of the right to marry argument. The right to marry under art 37 158. The appellant’s contention that she has a right to marry under art 37 raises the prior question of what is the nature of the right to marry under this provision. As A Cheung J (now Cheung CJHC) and the Court of Appeal pointed out, this is not a case of restriction on the right to marry; it is a case of what that right entails. Since it is not disputed that “marriage” in art 37 refers to a union between a man and a woman, the dispute turns on the meaning of “man” and “woman” for the purpose of this article. In effect, the question raised is whether on the true construction of art 37, “man” and “woman”, the parties to a marriage, can be given a meaning to include a transsexual man or transsexual woman. 159. The meaning contended for by the appellant of “man” and “woman” is different from the ordinary meaning of these words. It amounts to a radical change to the traditional concept of marriage. It also represents a departure from the domestic law as it was and still is which must have been intended to be the basis of art 37 when it was first enacted. The ordinary meanings of man and woman 160. The ordinary meanings of “man” and “woman” for the purpose of marriage refer respectively to a biological man and a biological woman capable of producing children. This accords with the common understanding of these words and is also reflected in their meanings in the dictionary. These words do not include a post-operative transsexual man and woman, as submitted by the appellant. 161. There is no evidence that in Hong Kong, these words have acquired any new contemporary meanings which are different from what is commonly understood by these words. Neither were the House of Lords in Bellinger v Bellinger [2003] 2 AC 467 able to discern evidence of such a change in contemporary usage in the UK (#62). But contrast the situation in Australia as discussed by the Full Court of the Family Court in Kevin and Jennifer [2001] Fam CA 1074 in which it was held that there was evidence that the contemporary meaning of these words in Australia has changed. Obviously, the situation varies in each country, depending on its social and cultural conditions. The concept of marriage 162. The meaning contended for by the appellant will also have an extremely important effect on the concept of marriage. Marriage has been generally recognized as the basis of the family and the family is an essential unit of society. Although there are men and women who do not go through marriage, it is still regarded as an important social institution. It has a long history and in many countries, also a religious and cultural background. As Lord Nicholls remarked in Bellinger#46, marriage “is deeply embedded as a relationship between two persons of the opposite sex.” People such as Catholics and Christians, and if I may add, traditional Chinese, marry for the purpose of procreation, although there are people who marry for other purposes, such as mutual help and companionship. 163. Because there are people who get married and set up their families, society finds it necessary to have a marriage institution which is regulated by the law. The marriage institution confers legal status from which follows practical and legal consequences affecting many areas of life (Lord Nicholls in Bellinger #28). See also Lord Hope in #58. Marriage confers legal status not only on the married couple, but also on their children and their relatives. It is difficult and unrealistic to consider marriage to be entirely unconnected with procreation. 164. There is no evidence that social attitudes in Hong Kong on the institution of marriage have changed to the extent that this concept of marriage has been abandoned or generally and substantially weakened. As I shall seek to demonstrate later, the traditional concept of marriage was one of the main bases on which the European Court of Human Rights (ECHR) in the cases prior to Goodwin v UK (2002) 35 EHRR 18, held that there was no violation of the right to marry by limiting the institution of marriage to exclude transsexual men and women; and it was the change in this concept in Europe and the UK as perceived by that court which persuaded it to come to a different conclusion in Goodwin. The state of domestic legislation 165. When the Basic Law was drafted in the 1980s and promulgated in 1990, the meaning of marriage in art 37 must have been informed by the state of the domestic legislation at the time. (See the relevance of the state of domestic law as part of the context for interpretation of a constitutional provision in Chong Fung Yuen v Director of Immigration (2001) 4 HKCFAR 211.) The right to marry under that article was clearly intended to refer to the right to marry of a man and woman as it was then understood. The case law and statute law have adopted the Corbett approach, i.e. applying only the biological criteria, in deciding whether a party to a marriage is a man or woman. That was the basis of the right to marry intended to be protected under art 37 when it was drafted/adopted and promulgated. 166. It is submitted, however, that a constitutional instrument is a living instrument and the meaning of its provisions should be adapted to meet changing needs and circumstances. (Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4, p.28D). Lord Pannick QC for the appellant argues that an updated interpretation should be given to art 37 because of changed circumstances: first, the Corbett approach can no longer be relied on as the only criteria and secondly, international jurisprudence shows that there have been developments regarding the recognition of transsexual marriages in many countries. 167. The Corbett approach has been heavily criticized for decades in numerous cases as being outdated and inadequate in the light of the advancement made in medical science which suggests that the psychological factor may become an important or even overriding consideration later in life, say, at the time of marriage. However, this latter factor is also regarded as not entirely satisfactory because there is no certainty as to the stage at which psychological changes have become a dominant or decisive factor in determining whether the party has become a person of the sex of his or her choice for the purpose of marriage. This will have to depend on the condition of the individual concerned. 168. One would readily acknowledge the force of the criticisms on the Corbett approach and its shortcomings. They have been discussed at length in the joint judgment of Ma CJ and Ribeiro PJ and I do not propose to repeat them. (See, for instance, the comments made by Thorpe LJ in his dissenting judgment in the Court of Appeal in Bellinger (#155)). Even if the Corbett approach can no longer be regarded as satisfactory, whether the law should be changed and how it could be improved should, as Lord Nicholls and Lord Hope emphasized in Bellinger, be left to the legislature. 169. In the present case, we are of course dealing with a different question: the interpretation of art 37 – whether legislation adopting the Corbett approach is incompatible with this article. And this brings us to Lord Pannick’s the second main point: whether art 37 should be given an updated interpretation in the light of changed circumstances. 170. Until the present case, the position has always been that the right to marry protected under art 37 is understood to refer to the right to marry under the current legislation which was based on the Corbett approach. While a constitutional provision can be given an updated meaning if the circumstances so require, there must be strong and compelling reasons for the Court now to depart from what has been generally understood to be the law on a matter as fundamental as the marriage institution which has its basis in the social attitudes of the community. A firm line has to be drawn between giving an updated interpretation to a constitutional provision to meet the needs of changing circumstances on the one hand and making a new policy on a social issue on the other. The latter is not the business of the court. For the former function, the court must be satisfied that there is sufficient evidence to show that the present circumstances in Hong Kong are such as to require the court to construe art 37 differently from the law which formed the basis on which this article was drafted/adopted. In my view, in the absence of such evidence, the Court should not invoke its power of constitutional interpretation to make such a radical change. The international jurisprudence 171. Lord Pannick submits that circumstances have changed in Europe and internationally which strongly indicate that a different approach should now be taken in Hong Kong to include a transsexual man and woman for the purpose of marriage. Counsel has referred us to a number of decisions in other jurisdictions in support of his submission. He has also drawn the Court’s attention to legislative changes in many countries in this area of the law, such as Australia, New Zealand, Singapore, Canada and most of the states in the United States. With respect, I would approach these authorities and legislative changes with caution since the social conditions in different countries are obviously not the same. The background to these changes and the extent of such changes in each country are not entirely clear. It is important to note that the discussions in these cases also show that there was divergence of opinions over the proper treatment of transsexuals in different countries. 172. Counsel relies in particular on Goodwin in which the ECHR, departing from its previous decisions, held that the UK was in breach of art 12 of the European Convention (which is similar to art 37) by refusing to allow the post-operative transsexual complainant to get married under the UK marriage legislation. (It is accepted that the jurisprudence on similar provisions in the ICCPR is of less significance to the present case.) It is submitted that Goodwin is of great persuasive authority for the present case and should be followed. Pre-Goodwin decisions 173. Goodwin did not follow Rees v UK (1987) 9 EHRR 56; Cossey v UK (1990) 13 EHRR 622; andSheffield and Horsham v UK,(1998) 27 EHRR 163. In these 3 cases, the ECHR was asked to adjudicate on the complaints by post-operative transsexuals against the UK Government for violating their right to respect for private life and/or the right to marry (art 8 and 12 of the European Convention). It was alleged by the complainant in each case that the UK Government had refused to alter the register of birth or issue a new birth certificate to reflect their sex change or prohibited him or her to marry. In all these cases, the ECHR held that there was no violation of both articles. 174. An examination of the reasons given by the ECHR in these cases clearly shows that in considering the right to marry under art 12 of the European Convention, the court held that the traditional concept of marriage was of crucial importance. In Rees, the ECHR emphasized that “the right to marry guaranteed by Article 12 refers to the traditional marriage between persons of opposite biological sex” (#49) (my emphasis). It took the view that restricting the right to marry to persons of opposite biological sex cannot be said to have the effect of reducing the right to such an extent as to impair the very essence of the right (#50). This reasoning was adopted without question in Cossey (#43 to 47) and again in Sheffield (#66 to 68). 175. In Cossey, the ECHR made two further points. First, in relation to the inability of a transsexual person to marry a man or a woman, the court’s answer (which was based on the same reasoning) was this (#45): “As to the applicant’s (a male to female post-operative transsexual) inability to marry a woman, this does not stem from any legal impediment and in this respect it cannot be said that the right to marry has been impaired as a consequence of the provisions of domestic law. As to her inability to marry a man, the criteria adopted by English law are in this respect in conformity with the concept of marriage to which the right guaranteed by Article 12 refers.” 176. Secondly, the court recognized the developments in some Contracting States in allowing the marriage of a transsexual person. However, it found that such developments “cannot be said to evidence any general abandonment of the traditional concept of marriage” (my emphasis) and added that “in these circumstances, the Court does not consider that it is open to it to take a new approach to the interpretation of Article 12” (#46) (my emphasis). Clearly, the traditional concept of marriage was considered as a significant if not decisive factor. Developments before Goodwin 177. As noted above, in Cossey, the ECHR recognized that there were developments in some member states regarding transsexual marriages and in Sheffield, the court noticed “a clear trend” among European countries moving towards acknowledgement of gender reassignment. It also acknowledged that “transsexualism raises complex scientific, legal, moral and social issues, in respect of which there is no generally shared approach among the Contracting States” (#58). However, the court found no “common approach as to how to address the repercussions which the legal recognition of a change of sex may entail for other areas of law such as marriage.”(#57) In both Cossey and Sheffield, the ECHR did not find the evidence sufficient to justify a departure from its previous decisions. However, it is clear that the developments in Europe had gathered momentum after these cases. 178. In the UK, prompted by Sheffield, the Government took steps to review the problems facing transsexuals in the UK. In April 1999, it set up an Interdepartmental Working Group on Transsexual People (Working Group) to conduct a comprehensive study and review of the medical condition, current practice in other countries and the state of the English law. In April 2000, the Working Group produced a report which was presented to Parliament and copies were sent to the public. It proposed different options including the granting of full legal recognition of the reassigned gender subject to certain criteria and procedures. It suggested that the Government should seek public consultation before making any decision to move forward with its proposals. Yet no further progress was made on these proposals and this had drawn further criticisms from the Court of Appeal in Bellinger (#96). 179. The ECHR was understandably concerned with the developments in its member states. These developments would reflect any change in the social attitudes of European countries towards the institution of marriage which must be an important factor in construing the nature of the right to marry. As the court said in Goodwin, it “must have regard to the changing conditions within the respondent State and within Contracting States generally and respond, for example, to any evolving convergence as to the standards to be achieved” and it was necessary “to maintain a dynamic and evolutive approach” (#74). The decision in Goodwin 180. In Goodwin, the ECHR, having examined further evidence of the developments in Europe (including the results of Liberty’s 1998 study) and the advancement of medical science, was persuaded that it should change its previous view on both art 8 and art 12. 181. In that case, the applicant (a male to female transsexual) complained that despite the warnings by the ECHR, the UK Government had, in breach of her right to respect for private life under art 8, failed to take constructive steps to address the problems she was facing. She alleged that she had suffered discrimination, humiliating experiences and abuses. It was held that the UK Government could no longer rely on the margin of appreciation (#93). 182. It is necessary to examine the court’s reasons for holding that there was a violation of the right to marry under art 12. It is important to note the following reasons (#100). First, it could no longer be assumed that the determination of gender for the purpose of marriage must be made by purely biological criteria. Second, there had been major social changes in the institution of marriage. Third, there were dramatic changes brought about by developments in medicine and science in the field of transsexuality. Fourth, there was greater social acceptance by the medical profession and the health authorities of transsexuals who could now assume a proper social role. The court drew support in coming to this conclusion from the removal of the reference to “man and woman” in art 9 of the newly adopted Charter of Fundamental Rights which arguably might suggest that this was a further step moving away from the traditional concept of marriage. 183. With regard to the first reason, I do not think this is anything new: the Corbett approach has been criticized as inadequate for many years. As to the third reason, I do not think medical science in the field of transsexualism has made any significant development since the decision in Sheffield in 1998 and in any event, the more recent medical views are either inconclusive or uncertain. 184. In my view, it was the evidence (which was accepted by the court) of the “major social change” in the institution of marriage and the “greater social acceptance of transsexuals” in its member states which had persuaded the ECHR to change its mind. Because of this major social change in the institution of marriage, the court was no longer able to place emphasis (as it did in previous cases) on the traditional concept of marriage as a basis for holding there was no violation of the right to marry. The greater social acceptance of transsexuals also reflected a significant change in the social attitudes among European countries towards transsexuals. This was seen as a material factor. It is also important to note that the court attached considerable weight to the Report of the UK Working Group and its recommendations for change. The UK was then obviously ready to move forward. 185. In the light of these major changes, the ECHR was then able to conclude (contrary to what it said in Cossey quoted in paragraph 175 above) that the national legislative limitation based on Corbett resulting in the inability of a transsexual to marry did have the effect of impairing the very essence of the right to marry: “In that regard, it finds that it is artificial to assert that post-operative transsexuals have not been deprived of the right to marry as, according to law, they remain able to marry a person of their former opposite sex. The applicant in this case lives as a woman, is in a relationship with a man and would only wish to marry a man. She has no possibility of doing so. In the Court’s view, she may therefore claim that the very essence of her right to marry has been infringed.” (#101) 186. The above analysis clearly demonstrates that the catalyst for the reversal of opinion by the ECHR was the clear evidence of a shifting away from the traditional concept of marriage and a greater social acceptance of transsexualism within Europe and in the UK. In the light of these changes, it makes ample sense to construe art 12 as to confer upon transsexuals the same right to marry as enjoyed by biological men and women which the court had prior to that case consistently declined to extend to them. Giving extended meaning to art 37? 187. While the situations overseas are clearly relevant and must be taken into account in the interpretation of art 37, one must bear in mind that the culture and social conditions in each place are not the same. For the purpose of the interpretation and application of the Basic Law, I think the principal consideration must be the circumstances in Hong Kong, just as the ECHR was more concerned with the situations among its member states. 188. In my view, the present position in Hong Kong is quite different from that in Europe and the UK when Goodwin was decided. While there was evidence of the changing attitudes in both Europe and the UK, I do not think there is sufficient evidence to show that the circumstances in Hong Kong are such as to justify the Court giving an interpretation to art 37 to include transsexual men and women for the purpose of marriage. As pointed out earlier, there is no evidence showing that for the purpose of marriage, the ordinary meanings of man and woman in Hong Kong have changed to accommodate a transsexual man and woman. More importantly, there is no evidence that the social attitudes in Hong Kong towards the traditional concept of marriage and the marriage institution have fundamentally altered. Nor is there evidence on the degree of social acceptance of transsexualism. 189. It must be recalled that in Cossey, the ECHR appeared to take the view that in the absence of evidence of a general abandonment of the traditional concept of marriage, it was not open to it to take a new approach to the interpretation of art 12 and in Sheffield, the emergence of a “clear trend towards acknowledgement of gender reassignment” was not considered by the ECHR to be sufficient to require a new interpretation of that article. I am far from satisfied that the present situation in Hong Kong has even reached that stage. 190. I would therefore agree with the conclusion of the judge and the Court of Appeal in rejecting the argument on the constitutional issue although I would hesitate in relying on the lack of “consensus”. Evidence of changing circumstances, especially changes in the social attitudes on controversial issues, is a very material factor in support of an updated interpretation. It is not the same as evidence of a consensus. Consensus is seldom relevant to interpretation and may never be achievable on these issues. 191. The Court’s power to give an updated interpretation to meet changing needs and circumstances must be exercised with great caution, especially where such interpretation has far reaching ramifications. I am not persuaded that a case has been made out in the present case to give such an interpretation to art 37. 192. More fundamentally, giving recognition to the reassigned gender for the purpose of marriage involves a change of social policy. In my view, the court’s power to give an updated interpretation is to react to changing circumstances and reflect changing social attitudes. The role of the court is to give effect to a change in an existing social policy, not to introduce any new social policy. The former is a judicial process but the latter is a matter for the democratic process. Social policy issues should not be decided by the court. As Lord Slynn said in Fitzpatrick v Sterling Housing Association Ltd [2001]1 AC 27, 33: “When considering social issues in particular, judges must not substitute their own views to fill gaps. They must consider whether the new facts ‘fall within the parliamentary intention’”. 193. Furthermore, recognition of transsexuals for the purpose of marriage involves a major change in the law on the institution of marriage which calls for a comprehensive study and wide public consultation; it is only one aspect of the whole picture which needs to be investigated (Lord Nicholls in Bellinger #37). Need for comprehensive review 194. I am mindful of the problems facing transsexuals. If their reassigned gender is not recognized, this may cause them great distress. The Government is already prepared to fund the treatment and surgery of transsexuals and to issue new identity cards for those who have acquired a new gender. There is no logical reason why full recognition should not be extended to enable them to marry in their reassigned gender. I can see the force of the reasoning of Ellis J in AG v Otahuhu Family Court [1995] 1 NZLR 603, 607: “If society allows such persons to undergo therapy and surgery in order to fulfill that desire, then it ought also to allow such persons to function as fully as possible in their reassigned sex, and this must include the capacity to marry.” 195. Equally forceful is the argument of Judge Martens in his dissenting judgment in Cossey (#2.7) “The principle which is basic in human rights and which underlies the various specific rights spelled out in the Convention is respect for human dignity and human freedom. Human dignity and human freedom imply that a man should be free to shape himself and his fate in the way that he deems best fits his personality. A transsexual does use those very fundamental rights. He is prepared to shape himself and his fate. In doing so he goes through long, dangerous and painful medical treatment to have his sexual organs, as far as is humanly feasible, adapted to the sex he is convinced he belongs to… He demands to be recognized and to be treated by the law as a member of the sex he has won; he demands to be treated, without discrimination, on the same footing as all other females, or, as the case may be, males. This is a request which the law should refuse to grant only if it truly has compelling reasons.” 196. However, as I have discussed above, the consequence of legal recognition of transsexuals for the purpose of marriage is more than making changes for individual transsexual persons; it involves making changes to an important social institution. 197. In my view, there is a strong case for a comprehensive review of the relevant legislation with a view to propose changes in the law concerning the problems facing transsexuals as soon as practicable. Mr Justice Bokhary NPJ： 198. Can a person who has undergone sex reassignment surgery marry as a person of the reassigned sex? In other words, can a post-operative transsexual marry in the reassigned capacity? I pause to mention that “sex reassignment” and “gender reassignment” are interchangeable expressions. The reassignment is of anatomic sex, not of what are sometimes referred to as biological factors. 199. The appellant W has undergone male-to-female sex reassignment surgery. She is in a relationship with a man. They wish to marry each other. So far, the courts (being the High Court at first instance and the Court of Appeal on intermediate appeal) have held that they cannot do so. The question has now reached us on final appeal. Transsexualism and sex reassignment surgery as a treatment for it 200. Transsexualism is defined by the World Health Organization as “a desire to live and be accepted as a member of the opposite sex, usually accompanied by a sense of discomfort with, or inappropriateness of, one’s anatomic sex, and a wish to have surgery and hormonal treatment to make one’s body as congruent as possible with one’s preferred sex”. The evidence in this case shows that transsexualism is regarded as a medical condition for which sex reassignment surgery is an effective and appropriate treatment. And it was the medical condition which W, born male, was in prior to undergoing male-to-female sex reassignment surgery. 201. Following long periods of psychiatric and social assessment at the Castle Peak Hospital and “real life experience” living as a woman with professional supervision and therapy from that hospital, W underwent sex reassignment surgery in July 2008. The surgery was performed at the Ruttonjee & Tang Shiu Kin Hospitals which have issued a certificate stating that W’s gender is now female. Having funded her male-to-female sex reassignment surgery, the Hong Kong Government has issued to her a replacement identity card in which her sex is stated to be female. 202. One of the things said by the respondent the Registrar of Marriages is that it may not be easy to draw the line on what amounts to sex reassignment. I accept that there may be instances where the line may not be easy to draw. But I do not accept that the matter is attended by any such uncertainty as forces one to treat the expression “sex reassignment” as meaningless or prevents one from pronouncing on the effect in law of sex reassignment. Without attempting an exhaustive statement of what amounts to sex reassignment by surgery, I hold that anyone who has been certified by an appropriate medical authority as someone whose sex has been reassigned by surgery is to be seen in the eyes of Hong Kong law as a person of the reassigned sex. W has been so certified as female. Increasing international trend towards recognition 203. The humanitarian considerations underlying claims of persons in W’s position were acknowledged by Lord Nicholls of Birkenhead in Bellinger v Bellinger [2003] 2 AC 467 at para. 34. There he spoke, insightfully as always, of the suffering that drives them to endure prolonged and painful surgery for relief from the turmoil in which they find themselves and of the acute distress that non-recognition of their reassigned gender can cause them. There is, he went on to note at para. 35, an increasing international trend towards recognizing gender reassignment and not condemning post-operative transsexual people to live in an intermediate zone, not quite one gender or the other. In all of these matters, I respectfully echo what Lord Nicholls has said. As to the plight of transsexual people in Hong Kong and the tragedy which has overtaken some of them, the valuable writings of Professor Robyn Emerton are there to be read. This country China, of which Hong Kong is a part, will be fully within the international trend to which Lord Nicholls referred if we in Hong Kong uphold the right of a post-operative transsexual to marry in the reassigned capacity. I say that because such a right is recognized in the Mainland. The statutes 204. There are two statutes to be interpreted. They are the Marriage Ordinance, Cap. 181, and the Matrimonial Causes Ordinance, Cap. 179. 205. In so far as the Marriage Ordinance defines “marriage”, it does so by s 40. That section begins by saying, in subsection (1), that “[e]very marriage under the Ordinance shall be a Christian marriage or the civil equivalent of a Christian marriage”. And the section then goes on to say, in subsection (2), that “[t]he expression ‘Christian marriage or the civil equivalent of a Christian marriage’ implies a formal ceremony recognized by the law as involving the voluntary union for life of one man and one woman to the exclusion of all others”. A religion having been mentioned, it should be stressed that the question before the Court is one of secular law, and does not involve how things are regarded according to any religion. 206. The form of a marriage ceremony before the Registrar of Marriages, a deputy of that office-holder or a civil celebrant is provided for by s 21 of the Marriage Ordinance. This section refers to the “male party” and the “female party”. 207. Turning to the other statute calling for interpretation, namely the Matrimonial Causes Ordinance, the provision to be interpreted is s 20(1)(d) by which it is laid down that a marriage that takes place after 30 June 1972 shall be void if “the parties are not respectively male and female”. 208. Neither the Marriage Ordinance nor the Matrimonial Causes Ordinance defines the words “man”, “woman”, “male” or “female”. Right to marry 209. Our constitution guarantees to persons here the right to marry and freedom from arbitrary or unlawful interference with privacy. That is done by the rights and freedoms that the Basic Law enumerates and therefore entrenches and those contained in the Bill of Rights which art. 39 of the Basic Law entrenches by incorporation. The right to marry is to be found in art. 37 of the Basic Law and art. 19(2) of the Bill of Rights. Freedom from arbitrary or unlawful interference with privacy is to be found in art. 14 of the Bill of Rights. Is a post-operative transsexual a person of the reassigned sex in the eyes of the family legislation of Hong Kong? 210. Is a person who has undergone male-to-female sex reassignment surgery a “woman” and a “female” in the eyes of the family legislation of Hong Kong? W contends for an answer in the affirmative. If that answer is the right one, she can marry as she wishes. The respondent the Registrar of Marriages contends for an answer in the negative, which is the answer given by the courts below whose view W attacks and the Registrar of Marriages defends. Since the sex reassignment surgery which W underwent was male-to-female, the foregoing way is the one in which the question has been put in argument. But the answer would of course be the same whether the sex reassignment surgery is of the male-to-female kind or the female-to-male kind. So the question of statutory interpretation involved comes, as fully stated, to this: is a post-operative transsexual a person of the reassigned sex in the eyes of the family legislation of Hong Kong? If not 211. If the answer has to be “No”, then the question of whether the legislation concerned is constitutional or unconstitutional would arise for decision. 212. It is argued on W’s behalf, with the contrary being argued on behalf of the Registrar of Marriages, that it would be unconstitutional for Hong Kong legislation to prohibit a post-operative transsexual from marrying in the reassigned capacity. 213. If W were to fail on the question of statutory interpretation but succeed on the question as to constitutionality, the legislation would have to be struck down. In the event of a striking-down, the Court’s obvious course would be to resort to the power of suspension identified, explained and exercised in Koo Sze Yiu v. Chief Executive (2006) 9 HKCFAR 441. Doing that the Court would suspend the striking-down order for an appropriate period so as to afford an opportunity for the passing of corrective legislation. Such legislation would enable a person who has undergone sex reassignment surgery to marry in the reassigned capacity. 214. None of that is to say that the constitution only enters the picture if and when the question of statutory interpretation is answered against W. The constitution is a constant presence in the law. It can crucially affect how legislation is interpreted. The courts will strive to give legislation such a reading as would bring it in line with the constitution. It is only if it is impossible to do so that the legislation concerned would be struck down, for striking-down is a course of last resort. Remedial interpretation 215. If I had to confine the legislation concerned to an ordinary rather than a remedial interpretation, I would find it difficult to read the words of gender therein as including gender acquired by sex reassignment surgery. And if a non-inclusive reading would produce unconstitutionality, then the only possible alternative to striking-down would be an inclusive reading. That alternative would be available if it can be regarded as interpretation, albeit of a remedial kind, rather than something which goes beyond interpretation of any kind. 216. In Goodwin v United Kingdom (2002) 35 EHRR 447 the European Court of Human Rights, upholding the right of a post-operative transsexual to marry in the reassigned capacity, said (at para. 100) that “a test of congruent biological factors can no longer be decisive in denying legal recognition to the change of gender of a post-operative transsexual. There are other important factors – the acceptance of the condition of gender identity disorder by the medical professions and health authorities within Contracting States, the provision of treatment including surgery to assimilate the individual as closely as possible to the gender in which they perceive that they properly belong and the assumption by the transsexual of the social role of the assigned gender.” That was said of course with reference to the European Convention on Human Rights and the Contracting States thereto. But I see the position in the same way in regard to Hong Kong and our constitution. 217. The Registrar of Marriages says that procreation is an important aspect of marriage. So it is. It may well be by far the most important aspect of marriage. But the ability to procreate is not a condition of the right to marry. Nor is the wish to procreate. 218. As to the question of consummation raised by the Registrar of Marriages, I do not accept that what a post-operative transsexual and a person of a sex opposite to the reassigned one are capable of doing cannot amount to consummation as a matter of law. Consummation is nonetheless consummation even though only made possible by surgery and incapable of leading to procreation. Although I do not require any authority to convince me of that, I should mention that I happen to find myself in agreement with the whole of what the English Court of Appeal said in SY v SY (orse W) [1963] P 37 including the part which was treated by Ormrod J in Corbett v Corbett (orse Ashley) [1971] P 83 as unpersuasive dicta. Whether or not what the learned judge considered dicta was in truth, as Lord Pannick QC for W submitted, an alternative ratio does not matter to my decision. Protection of minorities 219. The Registrar of Marriages also raises the question of societal consensus in Hong Kong, saying that there is no evidence before the Court of any such consensus in favour of a post-operative transsexual marrying in the reassigned capacity. That is so, but nor is there any evidence of any such consensus against such a course. On a matter like this, it is doubtful that gathering and presenting reliable evidence of any societal consensus one way or the other would be at all easy. 220. Moreover, it is to be borne in mind that the present exercise is not to be confused with developing the law to meet new expectations. What is involved is a constitutionally guaranteed human right. One of the functions – perhaps by far the most important one – of constitutionally guaranteed human rights is to protect minorities. Why is there any need to guarantee a right to marry? After all, no society is likely to put impediments in the way of the majority entering into marriages as they like. The greatest and most urgent need for constitutional protection is apt to be found among those who form a minority, especially a misunderstood minority. Striking down and declarations of incompatibility contrasted 221. In Bellinger v Bellinger it was by way of a declaration of incompatibility rather than by way of statutory interpretation that the House of Lords came to the aid of post-operative transsexuals. Rather than reading the legislation there concerned to permit a post-operative transsexual to marry in the reassigned capacity, their Lordships declared that the legislation, by reason of its not permitting that, was incompatible with the right to marry and the right to respect for private life. For at least two reasons, it is perfectly understandable why their Lordships intervened by way of a declaration of incompatibility rather than by way of statutory interpretation (even though s 3(1) of the Human Rights Act 1998 provides that “[s]o far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with Convention rights”). 222. First of all, the British Government had already announced its intention to bring forward primary legislation which would allow transsexual people who can demonstrate that they have taken decisive steps towards living fully and permanently in the acquired gender to marry in that gender. This announcement was said by Lord Nicholls (at para. 26) to have “an important bearing on the outcome” of the appeal. 223. Secondly, a declaration of incompatibility under the Human Rights Act is by no means exactly the same thing as a striking-down order under an entrenched constitution. And as it seems to me, a remedial interpretation can, at least sometimes, amount to a considerably more radical course than a declaration of incompatibility. I say so for these reasons. A declaration of incompatibility may well result in corrective legislation. Indeed, it may result in such legislation very quickly. But, unlike a striking-down order, it does not nullify the legislation against which it was made. Nor does it impose any legal duty to introduce or pass corrective legislation at all let alone quickly. By a declaration of incompatibility the judiciary alerts the political branches of government to legislation which cannot be given a reading compatible with Convention rights, but ultimately still leaves the matter in the hands of those branches of government. A striking-down order, on the other hand, is truly a course of last resort in the fullest sense. It is a more radical course than a remedial interpretation – even where a period of Koo suspension is granted to afford an opportunity for corrective legislation. Right to marry in the reassigned capacity 224. Neither the appellant W, the respondent the Registrar of Marriages nor the intervener the International Commission of Jurists has addressed us on the question of same-sex marriage. I proceed in this case on the footing that the right to marry guaranteed by our constitution is a right to marry a person of the opposite sex. Such a right is undoubtedly a human right. To say that it has no application to post-operative transsexuals is to deny their humanity. So it does apply to them. In what way? To say that what it guarantees is a right to marry in the pre-reassignment capacity would run counter to the purpose of sex reassignment surgery as a treatment for transsexualism. It is inconceivable that a human right would operate in such an inhumane way. What is left? Quite simply and obviously, the right to marry in the reassigned capacity. Yes, by way of remedial interpretation 225. I hold that the right to marry guaranteed by our constitution extends to the right of a post-operative transsexual to marry in the reassigned capacity. This means, without any need to rely on freedom from arbitrary or unlawful interference with privacy, that the legislation concerned would be unconstitutional unless the words of gender therein are read to include gender acquired by sex reassignment surgery. If those words can be so read, they should be so read. In my view, they can be so read. And, by way of remedial interpretation, I so read them. Conclusion 226. In the result, holding that the words of gender in the legislation concerned include gender acquired by sex reassignment surgery and that such legislation therefore permits a post-operative transsexual to marry in the reassigned capacity, I would allow the appeal in the terms proposed by Chief Justice Ma and Mr Justice Ribeiro PJ. My view of the law, while strongly held, does not involve any disrespect for the opposite view ably advanced by Ms Monica Carss-Frisk QC for the Registrar of Marriages and accepted by so good a judge as Mr Justice Chan PJ. And I certainly think that much room for legislative reform still remains. 227. I wish to acknowledge the very considerable assistance which I have derived from the arguments prepared and presented by counsel and solicitors for W and the Registrar of Marriages respectively, and from the written submissions provided by the International Commission of Jurists. 228. Finally, I wish to make it clear that I have used the expression “post-operative transsexual” because it is the one used by courts here and abroad when dealing with cases like this one. But that is not to say that a person who has undergone sex reassignment surgery as a treatment for transsexualism is still to be regarded as a transsexual. In truth, such a person is a person of the sex brought about by such treatment. Lord Hoffmann NPJ: 229. I agree with the joint judgment of the Chief Justice and Mr Justice Ribeiro PJ. Chief Justice: 230. By a majority, Mr Justice Chan PJ dissenting, the appeal is allowed. In accordance with what is stated in Section H of the Joint Judgment of myself and Mr Justice Ribeiro PJ, the precise orders to be made by the Court will be finalised after receiving the parties’ further submissions as provided for in paragraph 149 of that Judgment. Lord Pannick QC, Mr Hectar Pun and Mr Earl Deng instructed by Vidler & Co and assigned by the Legal Aid Department for the appellant Ms Monica Carss-Frisk QC, Ms Lisa KY Wong SC and Mr Stewart K.M. Wong SC instructed by the Department of Justice for the respondent International Commission of Jurists, the Intervener, submissions on paper [1] Andrew Cheung J (now Chief Judge of the High Court), HCAL 120/2009 (5 October 2010). [2] Tang VP, Hartmann and Fok JJA, CACV 266/2010 (25 November 2011). [3] With Mr Hectar Pun and Mr Earl Deng. [4] International Statistical Classification of Disease and Related Health Problems (version 10), F64. [5] Associate Consultant in Psychiatry who has had extensive experience treating transsexuals in Kwai Chung Hospital, a hospital operated by the Hospital Authority, affirmation made on 28 January 2010. [6] We are not concerned in this judgment with addressing the rare condition of persons born inter-sexed, that is, with both male and female biological features. See W v W (Physical Inter-sex) [2001] Fam 111. [7] Associate Dean, Faculty of Education, University of Hong Kong, who has researched and taught in the field of transsexualism since the year 2000 and also provided clinical services to transsexuals in Hong Kong, affidavit sworn on 19 July 2010. [8] In an influential dissenting judgment in Cossey v United Kingdom (1990) 13 EHRR 622, Judge Martens pointed out that: “... (medical) experts in this field have time and again stated that for a transsexual the ‘rebirth’ he seeks to achieve with the assistance of medical science is only successfully completed when his newly acquired sexual identity is fully and in all respects recognised by law. This urge for full legal recognition is part of the transsexual’s plight. That explains why so many transsexuals, after having suffered the medical ordeals they have to endure, still muster the courage to start and keep up the often long and humiliating fight for a new legal identity.” (At §2.4) [9] Research Assistant Professor, Faculty of Law, University of Hong Kong. [10] Robyn Emerton, “Time For Change – A Call for the Legal Recognition of Transsexual and Other Transgender Persons in Hong Kong” (2004) 34 HKLJ 515 at 516-517. See also Prof Emerton’s other articles on transsexuals in Hong Kong: “Neither Here nor There: The Current Status of Transsexual and Other Transgender Persons Under Hong Kong Law” (2004) 34 HKLJ 245; and “Finding a voice, fighting for rights: the emergence of the transgender movement in Hong Kong”, (2006) Inter Asia Cultural Studies, Vol 7, No 2. [11] Consultant surgeon and Chief of Surgical Service of Ruttonjee Hospital of the Hospital Authority, who has been performing sex reassignment surgery since 1987, affirmation made on 28 January 2010. [12] Other surgical procedures may be involved, for instance, the shortening of vocal chords in the case of a male-to-female transsexual, see, eg, Goodwin v UK (2002) 35 EHRR 18 at §13. [13] Prof Emerton, op cit, (2004) 34 HKLJ 515 at 516; Prof Winter, “Country Report: Hong Kong social and cultural issues”, http://web.hku.hk/~sjwinter/TransgenderASIA/. [14] Cap 177. [15] Pursuant to regulation 14(1) of the Registration of Persons Regulations (Cap 177). [16] Under the Hong Kong Special Administrative Region Passports Ordinance (Cap 539), section 5. [17] Affirmation of Yu Kin Keung, Assistant Secretary for Security (28 January 2010) §16. [18] Who were permitted to lodge written submissions for the purposes of this appeal. They had lodged submissions before Andrew Cheung J dated 5 August 2010. [19] (2002) 35 EHRR 18. [20] With Ms Lisa K Y Wong SC and Mr Steward K M Wong SC. [21] The GRA 2004 introduces a certification scheme for the legal recognition of changed genders. It permits applications for a gender recognition certificate on the basis of having changed gender under the law of a country or territory outside the United Kingdom approved by the Secretary of State. The list identifies the countries which have received approval pursuant to the Gender Recognition (Approved Countries and Territories) Order 2005, SI 2005 No 874. [22] Cap 181. [23] Cap 179. [24] MCO, section 20(2)(a): “A marriage which takes place after 30 Jun 1972 shall, subject to subsection (3) [which is not presently material], be voidable on any of the following grounds only – that the marriage has not been consummated owing to the incapacity of either party to consummate it”. [25] It appears that the first published case of SRS involved a man in Denmark in 1951. See Gender Identity Team, Queen Mary Hospital, Transsexualism: Service and Problems in Hong Kong, The Hong Kong Practitioner, 1989. [26] [1971] P 83. [27] (1866) LR 1 P & D 130 at 133, cited to Ormrod J but not expressly referred to by him. [28] At 106. [29] At 105-106. [30] Bellinger v Bellinger [2003] 2 AC 467 at §46. [31] At 100. [32] Ibid. [33] At 106. [34] Ibid. [35] [2003] 2 AC 467 at §11, although it was recognized that Corbett had been criticised by scientists and courts alike: §§13-17 and 18. [36] [1948] AC 274 at 286. [37] [1947] AC 628 at 633. [38] At 109. [39] Ibid. [40] At 109-110. [41] By the combined effect of section 7(2) of the 1971 act and section 40(1)(a) of the Matrimonial Causes Act 1965. [42] [2002] Fam 150 at §16 per the majority . [43] [2007] Fam 1 at §29. [44] (2003) 172 FLR 300 at §292. [45] Judge at §§117-118. [46] Court of Appeal §54. [47] Court of Appeal §55. [48] Eg, Secretary, Dept of Social Security v “SRA” (1993) 43 FCR 299; and Bellinger v Bellinger (Lord Chancellor intervening) [2003] 2 AC 467 at §62. [49] At 106. [50] Eg, AG v Otahuhu Family Court [1995] 1 NZLR 603 at 612; AG (CTH) v “Kevin and Jennifer” (2003) 172 FLR 300 at §§153, 170 and 293. [51] Respondent’s Case §42(2)(d). [52] 355 NYS 2d 712 (1974) at 717 per Louis B Heller J: “That the law provides that physical incapacity for sexual relationship is ground for annulling a marriage sufficiently indicates the public policy that the marriage relationship exists with the result and for the purpose of begetting offspring (Mirizio v Mirizio, 242 N Y 74, 81).” [53] R v R (Orse F) [1952] 1 All ER 1194. [54] Baxter v Baxter [1948] AC 274. [55] S Y v S Y (otherwise W) [1963] P 37. [56] Bellinger v Bellinger [2003] 2 AC 467 at §37. [57] (2006) 9 HKCFAR 574 at §§61-79. [58] (2008) 11 HKCFAR 91 at §§46-47. [59] Goodwin v UK (2002) 35 EHRR 18 at §98; Schalk and Kopf v Austria (2011) 53 EHRR 20 at §56. [60] Goodwin v UK (2002) 35 EHRR 18 at §99. See also Rees v United Kingdom (1986) 9 EHRR 56 at §50; Sheffield and Horsham v UK (1998) 27 EHRR 163 at §66 and Schalk and Kopf v Austria (2011) 53 EHRR 20 at §49. [61] [2009] AC 287 at §16 [62] At §13. [63] (1986) 9 EHRR 56. [64] At §49. [65] Under Article 8 (the right to respect for private life) and Article 12 (the right to marry). [66] At §37. [67] (1990) 13 EHRR 622. [68] At §44. [69] At §45. [70] Ibid. [71] (1998) 27 EHRR 163. [72] At §57. [73] (1998) 27 EHRR 163 at §43. [74] (2002) 35 EHRR 18. [75] At §96. [76] At §98. [77] At §82. [78] At §100. The Court also pointed to the absence of a reference to men and women in wording of the relevant provisions of the then recently adopted European Union Charter of Fundamental Rights. [79] At §85. [80] At §101. [81] At §103. [82] At §91. [83] Ibid. [84] Bellinger v Bellinger [2003] 2 AC 467 at §27. [85] At §§53 and 55. [86] Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4 at 28. [87] (1979-80) 2 EHRR 1 at §31. [88] (2011) 53 EHRR 13 at §234. [89] (1990) 13 EHRR 622 at §35. [90] Section E.1 above. [91] Bellinger v Bellinger [2002] Fam 150 at §128. [92] (2003) 172 FLR 300. [93] At §152. [94] At §153. [95] 355 NYS 2d 712 (1974) at 717. [96] At 98. [97] In the United Kingdom, by 1974, SRS was available on the National Health Service: Rees v United Kingdom (1986) 9 EHRR 56 at §14. [98] Judge at §34. [99] SA 308 at 314, in a passage highlighted in the Registrar’s written case. [100] Goodwin v UK (2002) 35 EHRR 18 at §82. [101] [2002] Fam 150 at §132. [102] Sitting in the Australian Federal Court, General Division, NSW District Registry, in Secretary, Dept of Social Security v “SRA” (1993) 43 FCR 299 at 325. [103] [1971] P83 at 104. [104] Bellinger v Bellinger [2003] 2 AC 467 at §34. [105] Goodwin v UK (2002) 35 EHRR 18 at §81. [106] (2003) 172 FLR 300 at §295. [107] Such evidence was not provided or accepted either in the present case or in most of the other authorities cited. However, the point made is still apposite. [108] And Article 8. [109] Section F.4. [110] At §100. The Court also pointed to the absence of a reference to men and women in wording of the relevant provisions of the then recently adopted European Union Charter of Fundamental Rights. [111] Section F.3. [112] Goodwin v UK (2002) 35 EHRR 18 at §99; Rees v United Kingdom (1986) 9 EHRR 56 at §50; Sheffield and Horsham v UK (1998) 27 EHRR 163 at §66; Schalk and Kopf v Austria (2011) 53 EHRR 20 at §49; and Bellinger v Bellinger [2009] AC 287 at §16. [113] At §101. [114] [1995] 1 NZLR 603 at 607. [115] Secretary, Dept of Social Security v “SRA” (1993) 43 FCR 299 at 317. [116] [2008] AC 153 at §78. [117] John L Murray, Chief Justice of Ireland, “Consensus: concordance, or hegemony of the majority?” in Dialogue Between Judges 2008, Strasbourg, European Court of Human Rights. [118] See Section F.2. [119] As to remedies, see also section 6 of the Hong Kong Bill of Rights Ordinance (Cap 383). [120] (1999) 2 HKCFAR 4 at 25. [121] The power to suspend was acknowledged in Koo Sze Yiu v Chief Executive of the HKSAR (2006) 9 HKCFAR 441. [122] At §90. [123] At §35. [124] Eg, Public Conveniences (Conduct and Behaviour) Regulations (Cap 132) reg 7; Public Swimming Pools Regulation (Cap 132), reg 7. [125] “Splitting the Difference: Transsexuals and European Human Rights Law” (lecture given to Anglo-German Family Law Judicial Conference in Edinburgh, September 2000), §50, cited in Bellinger v Bellinger [2002] Fam 150 at §159. [126] (1993) 43 FCR 299 at 305, per Black CJ: “...I consider that whilst a pre-operative male-to-female transsexual cannot come within the category of eligibility for a wife's pension under the Act, the respondent in this case would have come within that category had she successfully undergone the surgery that has been recommended for her.” [127] Bellinger v Bellinger [2002] Fam 150 at §103. [128] 355 A 2d 204 (1976) Superior Court of New Jersey, Appellate Division, Handler JAD. [129] Citing the example of B v B 78 Misc.2d 112, 355 N.Y.S.2d 712 (Sup.Ct.1974). [130] [1995] 1 NZLR 603 at 616-617; in submissions of counsel generally adopted by the Court (at 604). [131] Bellinger v Bellinger [2003] 2 AC 467 at §41. [132] Ibid at §26. [133] As opposed to an interim certificate referred to in Section H.5 below. [134] GRA 2004, section 9. [135] Section 23.
Chief Justice Ma: A. INTRODUCTION 1. A discrete, but important, point of statutory construction arises for determination. The relevant provision is s 17(1) of the Town Planning Ordinance Cap 131 (the TPO).[1] The judgments of the lower courts[2] dealt with that provision as it stood prior to the amendments made to the Ordinance in 2004.[3] I shall presently explain the reason for looking at the former provisions of the Ordinance although it will also be necessary in this appeal to look at the effect of current provisions of the Ordinance. The importance of the question in this appeal lies in determining the limits of the jurisdiction of the Town Planning Board (the TPB) (the respondent in the appeal) under s 17 of the Ordinance to review decisions it has made under s 16. 2. The background facts should first be set out. They derive mainly from the judgments of the courts below. In 1992, the appellants[4] (Nam Sang Wai Development Company Limited and Kleener Investment Limited, both part of the Henderson Land Group), who were land developers, proposed to develop certain areas in Nam Sang Wai and Lut Chau in the northwest New Territories. These areas were at the time covered by a draft plan for the layout of the relevant areas.[5] Under this draft plan, there were certain areas in which residential or recreational uses were not permitted as of right but where permission could be sought from the TPB for such uses. The appellants accordingly sought permission in August 1992 from the TPB under s 16 of the TPO for a development which included an 18‑hole golf course, residential units and a nature reserve (the relevant areas are close to the Mai Po Nature Reserve). The TPB refused permission and on a review (under s 17 of the TPO), the initial refusal was upheld. This was in June 1993. The appellants then appealed to the TPAB.[6] The Appeal Board allowed the appeal and granted planning permission subject to certain conditions set out in the Appendix to its Decision dated 26 August 1994. 3. These planning conditions imposed by the Appeal Board (which in fact were proposed by the appellants) included the submission and implementation by the appellants of a master layout plan :- “(c) Submission and implementation of a detailed master layout plan including phasing/programming of development, schedule of housing type and parking spaces to the satisfaction of the Director of Planning or of the Board”. I shall refer to this condition as “condition (c)”. 4. Another of the conditions was that the permission given to the appellants to commence the development would cease to have effect five years from the date of the giving of the permission, unless extended. 5. Following the allowing of the appeal, the TPB whose initial refusal of permission had been reversed, applied for the TPAB’s determination to be judicially reviewed. These proceedings were eventually dismissed by the Judicial Committee of the Privy Council in December 1996 by a majority decision of three to two.[7] 6. After that, for reasons which are not necessary to go into, the matter dragged on. The appellants submitted plans and other documents to various Government departments to satisfy the planning conditions but these were not accepted. Extensions for permission to develop were sought and obtained. There have been four extensions altogether. In September 2010, in a bid to satisfy condition (c), the appellants submitted a master layout plan to the Planning Department. In December 2010, the Planning Department refused to consider it (and therefore was not satisfied) on the basis that the proposals deviated substantially from the approved scheme of development. 7. Thereupon, the appellants applied to the TPB seeking its indication that it was satisfied with the master layout plan. It will be recalled that under condition (c), any master layout plan had to satisfy either the Director of Planning or the TPB. 8. At a meeting held on 17 December 2010, the TPB decided that the master layout plan submitted by the appellants involved such major changes that a fresh planning application (under s 16 of the Ordinance) would be required. The appellants were duly notified of this decision that condition (c) had not been complied with. Obviously, the TPB had not been satisfied within the meaning of condition (c). 9. On 27 January 2011, the appellants through their solicitors applied under s 17 of the Ordinance for a review of this decision. On 8 April 2011, the TPB refused to entertain the application on the basis that, on the wording of s 17(1), they had no jurisdiction to do so. The appellants appealed to the TPAB. In a decision made on 30 October 2012 (followed by a written decision dated 11 December 2012), the Appeal Board reversed the TPB’s ruling on jurisdiction, holding instead that the Board did have jurisdiction under s 17 to review its decision that condition (c) had not been complied with. It ordered that the TPB should therefore proceed to review its earlier decision. 10. The TPB applied for this decision on jurisdiction by the TPAB to be judicially reviewed and these are the present proceedings. In these proceedings, the TPB is the applicant, the TPAB the respondent and the appellants were joined as interested parties. 11. Before setting out the relevant statutory provisions and identifying the issue arising in this appeal, I should just add for the sake of completeness that the five year time limit for development[8] was extended a number of times, culminating in a final extension given by the TPB until 18 December 2010. The appellants applied on 10 December 2010 for a review of that decision and this review has apparently been deferred pending the outcome of the present proceedings.[9] B. THE RELEVANT STATUTORY PROVISIONS 12. It will be necessary to touch on the history of the TPO later in this judgment in order to set out the context when construing the relevant statutory provisions. For the time being, the provisions should first be set out. I mentioned at the outset that the relevant provision to be construed is s 17(1) of the version of the TPO prior to the amendments made in 2004. That provision in turn refers to s 16 of the Ordinance. 13. Prior to the 2004 amendments, ss 16 and 17 were in the following terms :- “Applications for permission in respect of plans 16. (1) Where a draft plan or approved plan, whether prepared or approved before or after the commencement of the Town Planning (Amendment and Validation) Ordinance 1974 (59 of 1974), provides for the grant of permission for any purpose, an application for the grant of such permission shall be made to the Board. (2) Any such application shall be addressed in writing to the secretary to the Board and shall be in such form and include such particulars as the Board thinks fit. (3) The Board shall within 2 months of the receipt of the application, consider the same in the absence of the applicant and, subject to subsection (4), may grant or refuse to grant the permission applied for. (4) The Board may grant permission under subsection (3) only to the extent shown or provided for or specified in the plan. (5) Any permission granted under subsection (3) may be subject to such conditions as the Board thinks fit. (6) The secretary to the Board shall notify the applicant in writing of the Board’s decision on an application under this section, and where the Board refused to grant permission shall also notify the applicant of his right to a review under section 17. (7) For the purposes of section 16(1)(d) and (da) of the Buildings Ordinance (Cap 123), anything permitted by the Board under this section shall not be a contravention of any approved plan or draft plan prepared under this Ordinance. Right of review 17. (1) Where an applicant is aggrieved by a decision of the Board under section 16, the applicant may, within 21 days of being notified of the decision of the Board, apply in writing to the secretary to the Board for a review of the Board’s decision. (2) On receipt of an application under subsection (1), the secretary to the Board shall fix a time and place for the review, which shall be a day not more than 3 months of the receipt of the application, and shall give 14 days’ notice thereof to the applicant. (3) On a review under this section the applicant or his authorized representative may attend before the Board and shall be given an opportunity to make representations. (4) If the applicant or an authorized representative does not attend at the time and place fixed for the review, the Board may proceed with the review or adjourn it. (5) On a review under this section the Board shall consider any written representations submitted by the applicant. (6) On a review under this section, the Board may, subject to section 16(4), grant or refuse to grant the permission applied for and may exercise the powers conferred by section 16(5).” 14. When the 2004 amendments came into effect, there were transitional provisions governing whether certain pre‑2004 amendmentprovisions would continue to apply. Section 28(3) and (4) expressly provided that the amendments made to ss 16 and 17 of the TPO under the 2004 amendments did not apply to any case in which an application for the grant of permission had been made to the TPO under s 16(1) of the pre‑amended Ordinance. In the present case, the relevant application for the grant of permission had been made in August 1992[10] under the previous version of the Ordinance; therefore the provisions of the pre‑amended ss 16 and 17 continue to apply. Godfrey Lam J dealt with this point[11] and there was no appeal on this to the Court of Appeal. The Court of Appeal also dealt with the matter on the basis of the Ordinance as it stood prior to the 2004 amendments.[12] 15. However, despite this and although in their written Case, the appellants proceeded on the basis of the pre‑2004 version of the Ordinance, in his oral arguments Mr Neoh SC relied on one provision in the current (post 2004 amendments) version of the Ordinance. This was s 17(6) of the Ordinance. The pre‑2004 version is set out above. The current version of s 17(6) is in the following terms :- “On a review under this section, the Board may confirm or reverse the decision in question, or substitute for the decision in question any decision it could have made under section 16 or 16A, as the case may be.” 16. Even though it was never really explained just why this version of s 17(6) could be applicable in the present case, I shall nevertheless in due course deal with it. The respondent[13] did not object to this reliance on the present s 17(6) by Mr Neoh. C. THE ISSUE IN THE APPEAL C.1 The issue 17. The issue is to determine the ambit of the jurisdiction of the TPB to review its own decisions under s 17(1) of the TPO. Specifically, what is meant by the words in that provision “a decision of the Board under section 16 ....”? C.2 The parties’ respective positions 18. The appellants’ position is straightforward. On a literal reading of these words, they are said to cover any decision made by the TPB in connection with s 16. The relevant words contain no limiting words; “a decision” simply means any decision. Mr Neoh submits it would be incongruous for any distinction to be drawn between different types of decision which may be made under s 16. As can be seen from the pre‑2004 version of s 16[14], the following are the types of decision that are expressly referred to :- (1) A decision as to the form in which an application for permission can be made : s 16(2). (2) A decision to grant the permission sought : s 16(3). (3) A decision to grant the permission sought but with conditions attached : s 16(5). (4) A decision to refuse permission : s 16(3). 19. These types of decision can be said to be expressly referred to in s 16. However, Mr Neoh goes further. Although it is accepted that the relevant decision in the present case[15] is not of the type expressly mentioned in s 16, it is submitted that it was, however, one that was obviously connected with that provision. In this context, the appellants rely on s 40(1) of the Interpretation and General Clauses Ordinance Cap 1[16] as well as the common law principle that all express statutory powers must carry with them incidental or consequential powers.[17] 20. The appellants submit that s 16 should properly be regarded as a continuing process which covers the initial application for permission under s 16 and includes any decision as to whether conditions attaching to any permission have been satisfied. Thus analysed, the review mechanism in s 16 ought to cover every decision in this continuing process, particularly one which may have important consequences. Ultimately, the appellants submit that it is only fair that a merits‑based review under s 16 should be permitted and such review in turn would lead to a merits‑based appeal before the TPAB.[18] 21. For its part, the respondent in the appeal contends that the words “a decision of the Board under section 16” cannot be construed in the way advanced by the appellants. Once context and purpose are considered, the meaning of the provision becomes clear. The inevitable conclusion, it was contended, was that a s 17 review is confined only to the following decisions made under s 16 : a decision refusing permission and a decision granting permission but with conditions. Obviously, no applicant would seek a review of a decision granting permission under s 16. 22. Before us, Mr Litton did not dispute that the relevant decision in the present case had some connection with s 16. Godfrey Lam J had appeared to express some doubt as to whether this decision could be regarded as one coming under s 16.[19] The reason for this doubt was that the source of the power allowing the Board to determine whether or not condition (c) had been satisfied, stemmed not from anything expressed in s 16 but instead from the TPB’s own internal guidelines.[20] 23. In view of the respondent’s stance, however, it is not necessary to determine this point about the source of the Board’s power in this appeal. It can be assumed then that the relevant decision is connected with s 16. According to the appellants, this is sufficient to enable them to succeed. The respondent argues, on the contrary, that it is not just any decision under s 16 that comes within the definition of “a decision of the Board under section 16”; only that restricted class of decisions earlier identified does. C.3 The decisions below 24. Both courts below held in favour of the respondent. Godfrey Lam J and the Court of Appeal (which essentially upheld the reasoning of the judgment at First Instance) were of the view that having regard to context and purpose, the s 17 review mechanism was confined to decisions under s 16 either refusing permission altogether or granting permission subject to conditions. Accordingly, the relevant decision made on 17 December 2010 was not a decision which could be reviewed. 25. The following orders were made by Godfrey Lam J :- (1) Declarations to the effect that :- (a) The decision of the TPB made on 17 December 2010 was not a decision taken under s 16 of the TPO within the meaning of s 17 of the Ordinance; and (b) The TPB therefore had no power to review the 17 December 2010 decision under s 17 of the Ordinance and that the TPB was right so to hold on 8 April 2011; and (2) The decision of the TPAB dated 30 October 2012 (with the written decision dated 11 December 2012) were quashed.[21] 26. This order was upheld by the Court of Appeal in dismissing the developers’ appeal. C.4 The certified question 27. On 27 May 2016, the Appeal Committee of this court[22] granted leave to appeal on the following question of law :- “Whether any decisions by the Town Planning Board other than a decision either refusing or granting permission under section 16(3) of the Town Planning Ordinance, Cap 131 or one granting planning permission with conditions under section 16(5) are capable of constituting ‘a decision of the Board under section 16’ reviewable under section 17(1).” D. DETERMINATION OF APPEAL D.1 Determination 28. As I mentioned earlier, the point for consideration in this appeal is one of statutory construction. Applying well known principles of statutory construction, for the reasons which appear below, I am of the view that the appeal should be dismissed and the said Orders of Godfrey Lam J be upheld. I agree with the conclusion reached by the lower courts that s 17(1) of the TPO should be read as confining the review mechanism only to decisions of the TPB made under s 16 whereby an application for permission is refused (s 16(3)) or in which conditions have been imposed (s 16(5)). D.2 Principles of statutory construction 29. No issue arises between the parties as to the applicable principles regarding the construction of statutes. They are well known and I need not refer to them in any detail save to emphasise the following for the purposes of the present case :- (1) In construing statutory provisions, the court does not merely look at the relevant words. It construes the relevant words having regard to their context and purpose.[23] (2) The context of the relevant statutory provision should be taken in its widest sense and will of course include the other provisions of the statute.[24] It may also be relevant in any given case to look at the history of the relevant provisions. (3) Ascertaining the purpose of the statutory provision is obviously relevant, not only to help provide the relevant context, but to give meaning to the words used. In this latter respect, it is to be observed that often the meaning of words by themselves will not be clear unless regard is paid to context and purpose. Words have to be construed but they must not be construed in a vacuum.[25] (4) In ascertaining the purpose of a statutory provision, the court adopts a flexible and open‑minded approach. The purpose may be clear from the provision itself or it may be necessary to look at the Explanatory Memorandum to the bill introducing the provision or a ministerial or official statement may be utilised for this purpose.[26] D.3 Purpose 30. As Godfrey Lam J observed, the TPO was originally enacted in 1939. Then, the Long Title of the Ordinance was in the following terms :- “To promote the health, safety, convenience and general welfare of the community by making provision for the systematic preparation and approval of plans for the future lay‑out of existing and potential urban areas as well as for the types of building suitable for erection therein.” 31. This stated purpose of the preparation and approval of plans was reflected in the Ordinance by the provisions dealing with the functions of the TPB in the preparation of draft plans[27] and approval by the Government.[28] 32. Until the decision of the High Court in Singway Ltd v Attorney General,[29] there had been no challenge made to the validity of the practice of annexing notes to draft plans prepared by the TPB. The significance of such notes for present purposes lay in the fact that they often made provision for the necessity of seeking permission to do certain things under the draft plan (such as condition (c) in the present case). The relevant part of the judgment of Leonard J in Singway is where reference was made, in upholding the objection to the validity of the said practice, to the uncertainty in the operation of the system of seeking permission. Doubts were expressed as to how such permission or approval was to be granted and by whom.[30] 33. Directly as a result of these doubts, amendments were made to the Ordinance in 1974 introducing for the first time statutory provisions regarding applications for permission in respect of plans and the right of review of a decision refusing to grant permission.[31] The new provisions were ss 16 and 17 and these sections were the origins of the provisions to be construed in the present appeal. Godfrey Lam J described ss 16 and 17 as forming a “scheme”.[32] I agree it is appropriate to describe them as such. 34. The scheme was to deal with applications for permission in respect of plans. The importance of applications for permission is clearly stated in the Long Title of the present version of the Town Planning Ordinance[33] :- “To promote the health, safety, convenience and general welfare of the community by making provision for the systematic preparation and approval of plans for the lay-out of areas of Hong Kong as well as for the types of building suitable for erection therein and for the preparation and approval of plans for areas within which permission is required for development.” (Emphasis added) 35. The scheme of s 16 was clearly to deal with applications for permission. Indeed, the margin notes to that provision in the 1974 amendments (and this is now the heading of s 16 as it currently stands as well as before the 2004 amendments[34]) state “Applications for permission in respect of plans”. 36. Section 17, introduced at the same time as s 16, was clearly intended to be parasitic on s 16 in that it deals with the right of review of a decision made under s 16. It is therefore important to appreciate just what s 16 was dealing with. And what that provision dealt with were applications for permission : what these applications were, how such applications would be processed and the decisions of the TPB in relation thereto. Seen in this light, it is extremely difficult to see how a decision made “under s 16” can be said to include decisions of whatever nature which merely have a connection with that section. 37. It is useful in this context to look at the wording of s 17(1) prior to the wording of the provision which has to be construed in the present case. While the wording of the provision we have to construe begins “Where an applicant is aggrieved by a decision of the Board under section 16 ....”, the previous version was “Where the Board refused to grant permission under section 16”. This wording made it quite clear the s 17 review was a narrow one. 38. However, by amendments introduced in 1991, the wording of s 17(1) changed. Latching on to the change in wording, the appellants submit that this had the effect of considerably widening the ambit of a s 17(1) review to include now every decision connected with s 16 (thus covering the relevant decision in the present case). 39. In my view, the 1991 change did not have the effect as contended by the appellants at all :- (1) It did not change the scheme of ss 16 and 17 as described earlier. Section 17 remained a review of a s 16 decision and s 16 remained a provision dealing with applications for permission in respect of plans. The side notes to s 16 remained the same. (2) The reason for the change was to cover one type of decision under s 16 that could be made by the TPB on an application for permission, namely, a grant of permission with conditions (s 16(5)). On the wording of the previous s 17(1), this type of decision was not covered. That this was the purpose of the amendment to s 17(1) (that is, to deal with a perceived lacuna), can be seen by the statement made by the Secretary for Planning, Environment and Lands to the Legislative Council in moving the 1991 amendments.[35] Godfrey Lam J quoted the relevant part of the statement[36] :- “The Administration, however, agreed that a new independent appeals body for appeals against the Board’s decision on planning applications under section 17(7) could be introduced ahead of the overall review. The Bill introduced today sets out the establishment, powers, membership and procedures of that appeals body. In addition, it provides for a further right of review in respect of conditions imposed on planning permission, which is currently not provided for in the existing Ordinance, as an applicant can only ask the Board to review its decision of refusal of planning permission. The amendments contained in the Bill will make the following changes to the Ordinance. They will : (a) provide a right of review in respect of conditions imposed on the planning permission; (b) provide for an independent Appeal Board to be substituted for the Governor in Council under section 17(7); (c) ...; (d) ...; (e) ... The basic approach is to substitute the Appeal Board for the Governor in Council as the independent channel of appeal against the Board’s decision on a review under section 17, extended to include the right to review of an applicant aggrieved by the conditions the Board imposed on a planning permission. See Hansard for 8 May 1991 at pp 1913 & 1914 (emphasis added).” 40. Finally, to complete the discussion on the scheme of ss 16 and 17, I ought just to refer to the position of the TPAB. It hears appeals from an applicant aggrieved by a decision of the TPB on a review under s 17[37]. The TPAB was set up under provisions introduced by amendments to the TPO in 1991. Prior to these amendments, an applicant who was aggrieved by a decision of the Board on review could appeal to the Governor‑in‑Council. 41. In the respondent’s Case, emphasis is laid on the consequences of the appellants’ argument succeeding. This would mean that all decisions made by the TPB having some connection with s 16 (even if such decisions were purely administrative) would be both reviewable (under s 16) and appealable (under s 17). Reliance was placed on the observations of Godfrey Lam J[38] :- “On the developers’ argument, all such “decisions” are subject to review by the Board under s. 17, with the decision on review subject to appeal to the Appeal Board under s. 17B. Multiple reviews and appeals could be generated in the course of a single application for permission, with the prospect of judicial review of each decision of the Appeal Board. I doubt very much that the Legislature had intended to create such a potentially lengthy and cumbersome procedure.” 42. I agree. I cannot imagine it could have been the purpose or intention of the Ordinance to expect the TPAB (and before its establishment, the Governor‑in‑Council) to be involved in every decision of whatever nature as long as it was somehow connected with s 16. Such a result would, in my view, only be possible if the wording of the relevant provisions compelled it. It is now time therefore to examine more closely relevant provisions of the TPO. D.4 Relevant provisions in the TPO 43. The relevant words to be construed (“a decision of the Board under section 16”) of course begs the important question : just what is a decision of the TPB under section 16 of the Ordinance? Does it mean any decision that is in relation to or in connection with s 16 (the appellants’ position) or does it have a narrower meaning (the respondent’s position)? 44. It is first to be observed that the actual words are “a decision .... under section 16”. The focus is therefore on what s 16 deals with. If it had been intended to convey a wider meaning (such as “in relation to” or “in connection with”), one would expect such phraseology to be used.[39] 45. In my view, in the context alone of the provisions of ss 16 and 17 of the pre‑2004 amendments version of the TPO,[40] it is clear that the type of decisions which can be reviewed under s 17 can only be the two decisions earlier referred to (either refusing permission or granting permission subject to conditions being imposed) :- (1) As observed earlier, s 16 is headed “Applications for permission in respect of plans” and that section deals with how such applications are processed and determined by the TPB. For the purposes of s 17(1), therefore, as a matter of plain language, the relevant decision “under section 16” must be the decision of the TPB on applications for permission. Here, there are only three decisions that can be made :- (a) A decision refusing the permission sought (s 16(3)); (b) A decision granting permission (s 16(3)); or (c) A decision granting permission subject to conditions (s 16(5)). (2) Section 16(6) is also relevant. It directly refers to the right of review under s 17 only in relation to a refusal to grant permission, and no other decision. In the Court of First Instance, Godfrey Lam J queried why this provision was not amended in 1991 at least to include the decision where approval was granted but subject to conditions.[41] Whatever the reason for this omission, this provision (which still stands today) is a strong indication of the restrictive ambit of a s 17 review. (3) Section 17(6) is important. This provision sets out the powers of the TPB on a review. Reference is made specifically here to the power to refuse or grant permission, or grant permission subject to conditions, thus reinforcing again the point that the relevant decision under s 16 relates to applications for permission. Section 17(6) was regarded by Godfrey Lam J as being of considerable significance.[42] I agree. However, as indicated earlier,[43] this provision was amended by the 2004 amendments and the appellants rely on the wording of the amended provision. I deal with this point now. D.5 The TPO as amended by the 2004 amendments 46. Although the courts below regarded the relevant provisions to be construed as the version of ss 16 and 17 prior to the 2004 amendments, as I have indicated, Mr Neoh SC in the course of his oral submissions placed reliance on one provision of the present version of the Ordinance, namely, s 17(6).[44] It is easy to see why the appellants have done so, that is, in order to deal with the effect of the previous s 17(6) of the Ordinance, which substantially supports the construction contended for by the respondent in this appeal.[45] 47. It is argued by Mr Neoh that the change of wording in s 17(6) is important in that in widening the words used, the provision now supports the contention that every decision that can be made under s 16 will be covered in a review : in a review, the TPB can now “confirm or reverse the [original] decision in question, or substitute for the decision in question any decision it could have made under section 16 ....”. The previous version, it will be recalled, confined what the Board could do after a review to granting or refusing to grant the permission sought, or imposing conditions if permission were granted. 48. I am unable to agree with the appellants’ submissions :- (1) It would mean a quite radical change to what had all along been the position : from a restrictive view of the effect of ss 16 and 17[46] to one in which all decisions in connection with s 16 would be susceptible to a review. For my part, I see nothing in the materials to justify concluding that such a dramatic change was intended. As a matter of statutory construction, there is a reluctance in the courts to attribute to the legislature an intention to make radical changes by way of a side‑wind.[47] Certainly, there is no hint of any change that was intended when one looks at the Explanatory Memorandum to the amendments introduced in 2004 and the relevant extracts from Hansard.[48] (2) Notwithstanding the changes made by the 2004 amendments, the purpose and scheme of the Ordinance remain as analysed above and the points regarding context made in relation to the wording of the relevant provisions also remain valid.[49] (3) Further, if the appellants’ submissions were correct, a number of incongruous consequences would follow. These were articulated by Godfrey Lam J in the following passages,[50] with which I fully agree :- “67. The developers’ contention, with all its simplicity, would in my opinion lead to incongruous and anomalous results under the post-2004 version of the legislation. First, where materials such as plans and reports are submitted for the Board’s approval pursuant to the conditions subject to which planning permission has been granted, no public consultation would be required under s. 16. The procedures for public inspection and comment laid down by s. 16(2C)-(2L) apply only to an application under s. 16(1), that is to say, the initial application for planning permission. In contrast, on the basis of the developers’ contention, if the Board is not satisfied with the submission and that decision is subject to review under s. 17, the review would have to go through the elaborate procedures for public consultation under s. 17(2A)-(2J). It is difficult to see why there should be such disparity between the original process and the review. 68. Secondly, the Board may make various “decisions” (in the broad sense) in the course of processing an application made under s. 16(1). Thus, for example, it may under s. 16(2A) require the applicant to verify any matter or particulars in the application; it may under s. 16(2B) refuse to consider an application where it is not in the prescribed form or does not include requisite particulars, or where the applicant has not taken sufficient steps to obtain the consent of the current land owners; it has under s. 16(2L) a discretion to exempt further information supplied by the applicant from the process of public consultation. On the developers’ argument, all such “decisions” are subject to review by the Board under s. 17, with the decision on review subject to appeal to the Appeal Board under s. 17B. Multiple reviews and appeals could be generated in the course of a single application for permission, with the prospect of judicial review of each decision of the Appeal Board. I doubt very much that the Legislature had intended to create such a potentially lengthy and cumbersome procedure. 69. Thirdly, on the developers’ argument, the applicant could seek a review where the Board had under s. 16(2L) refused to exempt further information from the requirement of public consultation. Yet such public involvement would be mandatorily required in the review process: see s. 17(2A)-(2J). Further, the Board is required to consider the application for planning permission within 2 months of receipt of the further information (see s. 16(2K)(c)(ii) and 16(3)). It follows that the review (which under s. 17(2) requires 14 days’ notice and may take place within 3 months of the request for review) and the process of public consultation if the refusal of exemption is maintained on review, would all have to take place within the 2 months prescribed by s. 16(3). 70. These anomalies in my view militate against the construction advanced by the developers.” (4) Mr Neoh did not address these points on incongruous consequences. I would add this in relation to the first of the three observations made by Godfrey Lam J. As can readily be seen in every version of the TPO since it was introduced in 1939, the public consultation aspect in the preparation and any amendment of draft plans is a critical part of the operation of the Ordinance. Over the years, provisions for increased public consultation in town planning matters have been added by amendment. In relation to the 2004 amendments themselves, I have earlier referred to one of their main purposes as being the enhancement of public involvement in the town planning process.[51] These amendments included the addition of ss 16(2C)‑(2L) and 17(2A)‑(2J), and these provisions were expressly referred to by Godfrey Lam J.[52] It would have been astonishing if the legislature had intended the incongruity identified by the judge. The correct view is simply that “the decision of the Board under section 16” can only be a reference to a decision relating to an application for permission in respect of plans, and not to any other decision. And, in the context of ss 16(1) and 17(1) as earlier discussed, the relevant decision that can be reviewed is either a decision refusing permission or a decision only granting permission with conditions. This would then be entirely consistent with the public consultation scheme of the Ordinance : just as there should be public consultation for applications for permission (s 16), so there should similarly be public consultation in relation to reviews of adverse decisions in relation to such applications (s 17). 49. Accordingly, it can be seen that the position regarding the limited nature of reviews has always been consistent, whether before the 1991 amendments, before the 2004 amendments and the position now. D.6 Other arguments 50. I have earlier referred to the appellants’ arguments based on s 16 being a continuing process, and the desirability of the availability of a merits‑based review and appeal.[53] These matters cannot be seen in isolation and must be seen in proper light. The exercise before the court is one of statutory construction. The actual words used in the relevant statutory provisions must be construed taking into account their context and purpose. 51. I should finally just make the point that in case it is thought that no remedy exists to challenge the type of decision made in the present case, this is not right. Decisions of the TPB are subject to the court’s judicial review jurisdiction. The issue in the present appeal is whether a right of review is possible under s 17 of the TPO and this issue, as I have said, is a matter of statutory construction. The fact that the review mechanism is unavailable does not mean that the court’s judicial review powers are unavailable in the type of decision with which this appeal is concerned, or indeed in any other type of decision (of whatever degree of importance) contained in the TPO for which there is no right of review. E. Conclusion 52. For the above reasons, this appeal should be dismissed. I would also make an order nisi that the appellants should pay to the respondent the costs of this appeal, such costs to be taxed if not agreed. If any party wishes to have a different order as to costs, written submissions should be served on the other party and lodged with the Registrar of the Court of Final Appeal within 14 days of the handing down of this judgment, with liberty on the other party to serve and lodge written submissions in reply within 14 days thereafter. In the absence of such written submissions, the order nisi will stand absolute at the expiry of the time limited for such submissions. Mr Justice Ribeiro PJ, Mr Justice Fok PJ and Lord Millett NPJ : 53. We have had the advantage of reading in draft the judgment of the Chief Justice. We respectfully agree with his reasoning and conclusion as to the construction of the words “a decision of the Board under section 16 ...” in section 17(1) of the Town Planning Ordinance (Cap 131) and would therefore likewise dismiss the appeal. We are unable, with respect, to agree with the judgment of Mr Justice Tang PJ, which we have also read in draft, reaching a contrary conclusion. In our view, construing the relevant words in the light of both their context and purpose, which are fully addressed by the Chief Justice, the proper construction of those words is that set out in para 28 above, namely that the review mechanism under the Ordinance is confined only to decisions of the Town Planning Board made under section 16 whereby an application for permission is refused (section 16(3)) or in which conditions have been imposed (section 16(5)). Mr Justice Tang PJ : Introduction 54. When the Town Planning Ordinance was enacted in 1939, it was solely concerned with the systematic preparation and approval of plans. In 1974, power to grant planning permissions was given to the Town Planning Board[54] (“the Board”) on an application made under s 16 of the Ordinance (“s 16 applications”), together with, under s 17(1) a right to a review by the Board[55] in the event permission was refused. In 1991, the Ordinance was further amended[56] to broaden the right to a review under s 17(1) and to provide by s 17B, for an appeal to the Town Planning Appeal Board (“the Appeal Board”) against a decision of the Board on a review. The Appeal Board was established by the 1991 Ordinance to provide an independent arbiter[57] between the Board and those whose interests were affected by the Board’s decisions. This appeal is concerned with the width of the right to a review under s 17(1). Background 55. In August 1992, the interested parties, Nam Sang Wai Development Company Limited and Kleener Investment Limited (“the developers”), by their agent, Henderson Real Estate Agency Ltd. (“the appellant”) applied for permission under the Draft Nam Sang Wai Development Permission Area Plan No DPA/YL-NSW-1 (“the DLP Plan”) to undertake a massive development in areas covered by the DLP Plan, comprising an 18-hole golf course, 2,550 residential units and a nature reserve.[58] 56. The application was made to the Board under s 16(1) of the Ordinance[59] which provided that: “Where a draft plan ... provides for the grant of permission for any purpose, an application for the grant of such permission shall be made to the Board.” 57. The Board was entitled to grant or refuse the application under s 16(3) or grant such permissions “subject to such conditions as the Board thinks fit.” [Section 16(5)]. The application was unsuccessful and the appellant applied for a review to the Board under s 17(1) of the Ordinance, which provided: “Where an applicant is aggrieved by a decision of the Board under section 16 ..., the applicant may ... apply ... for a review of the Board’s decision.” 58. The Review was also unsuccessful and the appellant appealed to the Town Planning Appeal Board under s 17B which provided: “An applicant who is aggrieved by a decision of the Board on a review under section 17 may appeal ... [to the Town Planning Appeal Board].”[60] 59. The appellant’s appeal to the Appeal Board was successful and planning permission was granted subject to conditions in 1994.[61] Those conditions[62] included the submission of “a detailed master layout plan (“MLP”) ... to the satisfaction of the Director of Planning or of the Board.” The present proceedings arose out of the decision of the Board over the satisfaction of these conditions. Briefly stated, by letter dated 20 September 2010, the appellant’s consultants submitted various plans, including a MLP, for the stated “purpose of discharging planning conditions imposed on the planning permission ... .”[63] The Planning Department was not satisfied and in their letter of 1 December 2010 said: “... [the modified MLP] deviates substantially from the approved development scheme and therefore cannot be considered in the context of fulfilment of condition (c) of the planning permission ...”[64] 60. Accordingly, other submissions which were based on the modified MLP could also not be considered. The appellant asked the Board for an extension of the permission so that they could try to resolve the matter with the Planning Department. Extension was refused and the matter was referred to the Board for consideration pursuant to, for example, planning condition (c).[65] By letter dated 10 January 2011, the Board notified the appellant the “conditions (c), (d), and (f) to (w) could not be regarded as satisfactorily complied with” (“the Decision”). 61. Against the Decision,[66] the appellant applied for a review under s 17(1). The Board took the view that s 17(1) was not applicable. The appellant appealed to the Appeal Board which took a different view which led to an application by the Board for judicial review of the Appeal Board’s decision. Godfrey Lam J overturned the decision of the Appeal Board and held that there was no right to a review under s 17(1). The appellant’s appeal was dismissed by the Court of Appeal. On 26 May 2016, the Appeal Committee granted leave to appeal on this question of law: “Whether any decisions by the Town Planning Board other than a decision either refusing or granting permission under section 16(3) of the Town Planning Ordinance, Cap 131 or one granting planning permission with conditions under section 16(5) are capable of constituting ‘a decision of the Board under section 16’ reviewable under section 17(1).” The Legislation 62. Sections 16 and 17 were first introduced in 1974 and given their importance, the events leading up to the enactment of the 1974 Ordinance should be noted. The 1974 Ordinance was enacted as a matter of urgencyas a result of Singway Co Ltd v The Attorney General [1974] HKLR 275 a decision of Leonard J, as he then was, which effectively declared all approved plans to be invalid, void and of no effect. As Leonard J explained between 1939 when the Town Planning Ordinance was first enacted and 1959 when s 9B(1)I of the Buildings (Amendment) Ordinance 1959 was enacted, approved town plans were just “standards for guidance for public officers”[67]. Thereafter, building plans could be and were disapproved for contravention of approved town plans. Singway’s building plans were disapproved for contravention of the Wanchai Outline Zoning Plan which led to proceedings to challenge the legality of the Wanchai Outline Zoning Plans. At that time approved plans contained notes which were approved by the Governor-in-Council as part of the approved town plans. Those notes permitted certain developments which were not strictly conforming to a town plan, however, they did not say “from whom or by what means the permission is to be obtained.”[68] Leonard J said the system adopted by the Town Planning Board was “not a permission system but if I may coin a phrase ‘control by consultation’”.[69] His lordship held that the notes were ultra vires the Town Planning Ordinance and were uncertain and that the Wanchai Outline Zoning Plan, which was the plan relevant to the proceedings was declared to be “invalid, void and of no effect” at 312. Naturally, Singway affected other approved plans which had similar notes. Hence the 1974 Bill was introduced as a matter of urgency[70] to validate retrospectively all existing approved plans and decisions of the Building Authority made under them. 63. It was under such circumstances that s 16 was introduced to replace the previous practice of reliance on the notes as the Attorney General said at 1080: “Sir, one ground on which the court held some of the notes to be uncertain is that they say that certain developments, not strictly conforming to a town plan, may be permitted, without saying from whom or by what means the permission is to be obtained. This bill introduces a procedure for obtaining permission in such cases. The permission required will be that of the Town Planning Board. It is intended that applications for permission for development proposals involving a departure from a town plan will be considered by the Board initially in the absence of the applicant. This is thought to be in everyone’s interest in that many applications can be granted without difficulty and there is no need for the applicant to attend to argue his case. Where, however, an application is refused, the applicant will be entitled to require the Board to re-consider its decision, when he must be given an opportunity to appear. This procedure follows the procedure which has long been in force for dealing with objections to draft town plans.” 64. So the intention was that applications should be considered on papers by the Board and then on review before the Board where an applicant would have an opportunity to be heard. We were not told whether at that time the initial decision would have been made by a Committee of the Board. However, it appears that since at least the 1991 Ordinance, s 16 applications would be considered by one of two Committees of the Board and s 17 reviews by what was sometimes referred to as “the full Board”.[71] The Town Planning (Amendment) Ordinance 2004 (“the 2004 Ordinance”), formalized the position and conferred express power on the Board to delegate decisions under s 16(1) to a Committee of the Board, which should “consist of not less than 5 members at least 3 of whom are not public officers”. [Sections 2(5) and 2A(2)]. However s 17 reviews must be considered by the full Board which would be comprised overwhelmingly of non public officers.[72] 65. When ss 16 and 17 were first enacted, s 16 enabled an application for planning permission to be made to the Board [s 16(1)], which it “ ... may grant or refuse to grant ...” [s 16(3)]. And “Any permission granted ... may be subject to such conditions as the Board thinks fit.” [s 16(5)]. Also, “The secretary to the Board shall notify the applicant in writing of the Board’s decision on an application under this section, and where the Board refused to grant permission shall also notify the applicant of his right to a review under section 17.” [s 16(6)]. Unlike a review under s 17, there was no right to a hearing. 66. Section 17(1) permitted a review “[w]here the Board refused to grant permission under section 16”. Section 17(3) gave the applicant or his representatives an opportunity to make representations before the Board. “On a review under this section, the Board may ... grant or refuse to grant the permission applied for and may exercise the powers conferred by section 16(5).” [s 17(6)]. Then, there was an “appeal by way of petition to the Governor in Council whose decision on such appeal [was] final” [s 17(7)]. 67. There was no express right to a review of conditional permissions. I doubt if it was intended that there should be no review of conditional permissions. Given the cordial working relationship between the Government and landed interests in Hong Kong at the time, a deliberate exclusion of such an important right seemed unlikely. Moreover, what the Attorney General said when moving the 1974 Bill quoted above,[73] namely, that it was considered in everyone’s interest, that applications should be considered by the board initially in the absence of the applicant because there was “no need for the applicant to attend to argue his case” would not apply where the board decides to impose conditions. The “omission” was not rectified until 1991 but it does not appear that there was any pressure for it. Now, I turn to the history of the 1991 Ordinance which is illuminating. The 1991 Ordinance was precipitated by the uproar caused by the Town Planning (Amendment) Bill 1990 (“the 1990 Bill”). By the 1990 Bill, Government proposed the extension of the Town Planning Ordinance to the New Territories as well as creating the offence of unauthorized development.[74] The 1990 Bill was prompted by wide-spread use of agricultural land for the purpose of, for example, storage. Not surprisingly, the 1990 Bill attracted substantial objections from landowners and developers, especially from those who had interests in the New Territories.[75] At the second reading of the 1991 Bill which took place on 8 May 1991 less than 4 months after the second reading of the 1990 Bill, the Secretary for Planning, Environment and Lands (“SPEL”) said: “During public consultation on the Town Planning (Amendment) Bill 1990 in the latter part of last year, a number of professional bodies, as well as Members of this Council, commented that the Town Planning Ordinance needed improvement because it provided for the Board to hear objections to its own plans, and to conduct its own reviews of its refusals of planning applications. While recognizing the importance of an appeals body which could serve as an arbiter between the Board and those whose interests were affected by those decisions, the Administration explained that changes to the existing procedures for objections to town plans under section 6 of the Ordinance would require a radical re-appraisal of the entire plan-making and approval system and considered that it should best be addressed in the overall review of the Ordinance to be conducted in mid-1991.” 68. This should be considered together with what SPEL said during the second reading of the 1990 Bill:[76] “Another major area of concern is the present appeals system under the Town Planning Ordinance. The current Ordinance has been critized because it provides for the Board to hear objections to its own plans and to conduct its own reviews of its refusals of planning applications. The administration accepts as a matter of principle the need for a hearing which is not just fair but seen to be fair for persons aggrieved by the Town Planning Board’s decisions. We recognize the importance of an appeals body which can serve as an arbiter between the Board and those whose interests are affected by those decisions. Changes to the existing section 6 objection procedure for the preparation of plans would however require a radical reappraisal of the entire plan-making and approval system and it has been agreed with the ad hoc group that this should best be addressed in the overall review of the Ordinance. On the other hand, the early establishment of an independent body to replace the Governor in Council’s role under section 17(7) as the final appeals body to deal with refusals of planning permission is practicable. Accordingly the Government has agreed in principle to introduce in this legislative Session, ahead of the overall review, a separate amendment Bill to provide for a new independent appeals body for section 17(7) appeals. The powers, composition, membership and procedures of the appeals body will be examined further in the drafting of the separate Bill.” (My emphasis) 69. The 1991 amendments are important because the present appeal is concerned with the 1991 Ordinance. As a result of the 1991 amendments, the 1974 version “the Board refused to grant permission” became “an applicant is aggrieved by a decision of the Board”[77] so that the relevant words in s 17(1) read: “Where an applicant is aggrieved by a decision of the Board under section 16 ...” 70. The appellant’s contention was that the Decision was a decision made under s 16 and therefore there was a right to review under s 17(1) and thereafter a right of appeal to the independent Appeal Board. The respondent’s case is that read in its context and having regard to the mischief against which the amendment to s 17(1) was enacted, the words “a decision of the Board under s 16” should be confined to review against the refusal of planning permission under s 16(3) or the imposition of conditions under s 16(5). In other words, a decision that any condition imposed was not satisfied even if made under s 16 would not be subject to review under s 17(1). 71. In 2004, substantial amendments were made by the Town Planning (Amendment) Ordinance 2004 (“the 2004 Ordinance”). Here, although the Decision was made as late as 10 January 2011 and the request for a review was only made on 27 January 2011, I agree, with respect, with Godfrey Lam J[78] and the Court of Appeal[79] that as a result of transitional provisions in the 2004 Ordinance, the right to a review has to be determined in accordance with the 1991 Ordinance. Godfrey Lam J pointed out that it was common ground that the meaning of s 17(1) is relevantly the same before and after the 2004 amendments.[80] Maybe for that reason the learned judge’s construction of the 1991 version appeared to have been influenced by his view that: “67. The developer’s contention, with all its simplicity, would in my opinion lead to incongruous and anomalous results under the post-2004 version of the legislation.” 72. Jeremy Poon J, as he then was, said[81] the learned judge: “identified three anomalies arising from the Developers’ contention under the post-2004 version of the legislation which militates against their construction.”[82] 73. However, the Court of Appeal focused on the 1991 version and based their decision on it. With respect, I agree with the approach of the Court of Appeal. 74. I will say at once that in my view, on the proper construction of the 1991 version of s 17(1) the appellant was entitled to a review of the Decision. I will first consider the 1991 version without the benefit of hind-sight. Then, I will consider whether following the 2004 amendments a different interpretation should be given to the expression “a decision of the Board under section 16” in s 17(1) and if so whether such interpretation should inform the interpretation of the 1991 Ordinance. Construction 75. As Jeremy Poon J said in the Court of Appeal the correct approach to interpretation was summarized by Li CJ in HKSAR v Cheung Kwun Yin[83] and for the present purpose, I bear in mind that: “12. The modern approach is to adopt a purposive interpretation. The statutory language is construed, having regard to its context and purpose. Words are given their natural and ordinary meaning unless the context or purpose points to a different meaning. Context and purpose are considered when interpreting the words used and not only when an ambiguity may be thought to arise. In HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at 606E, Sir Anthony Mason NPJ stated: ‘The modern approach to statutory interpretation insists that context and purpose be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity may be thought to arise.’” 76. The words “a decision of the Board under section 16” are straightforward. Before considering whether the context or purpose of the amendment require a different meaning to be given to these words, the words “a decision of the Board under section 16” literally would include decisions whether conditions imposed under s 16(5) have been satisfied which is ancillary or incidental to its power to impose conditions. Indeed, the Court of Appeal regarded such decisions as incidental decisions: “[made] in the discharge of (the Board’s) function under section 16(5) to determine if a planning condition imposed is satisfied.”[84] 77. Mr John Litton appearing for the Town Planning Board, the respondent, was willing to accept that such decisions were incidental or ancillary to the Board’s power to impose conditions under s 16(5) although he submitted “a decision of the Board under section 16” in s 17(1) “is not a reference to any decision taken under section 16 but to the primary decisions that the Board may take on an application made under section 16(1) in respect of which an applicant may be aggrieved by.”[85] I think it is plain that the Board who has power to impose conditions must have ancillary or incidental power to decide whether the conditions have been satisfied. Such power is spelt out in s 40 of the Interpretation and General Clauses Ordinance Cap 1.[86] It makes no difference that in this case the conditions were imposed by the Appeal Board,under s 16(5) which they were entitled to do. That it was expected that the Board should determine whether any condition imposed under s 16 had been satisfied was envisaged by “Town Planning Board Guidelines for Class A and Class B Amendments to Approved Development proposals” (“the Guidelines”) quoted by Jeremy Poon J at para 17, the relevant passage in the guidelines reads: “8. Under section 16(5) of the Ordinance, the Board may grant planning permission subject to such conditions as the Board thinks fit. In general, the applicant is required to fulfil an approval condition to the satisfaction of the Government department concerned or of the Board. No separate planning application under section 16A(2) will be required for amendments made to the approved development proposal as a result of fulfilling the approval conditions of the planning permission specified by the Board. Should there be disagreement over the fulfilment of the approval conditions between the applicant and the Government departments concerned ... , the matter will be submitted to the Board for consideration. ... Besides, in complying with the approval conditions, there should not be major changes to the original approved development proposal. A fresh planning application under section 16 will be required if major changes to the approved development proposal are involved.”[87] 78. The matter could be tested in this way, suppose the applicant were to challenge the Decision on the basis that it was ultra vires the Board, I don’t believe it could succeed. Nor is it an answer to say that the Board’s power to require to be satisfied is derived from the conditions imposed. The conditions were imposed pursuant to s 16(5). It is also not an answer to say that the conditions imposed might not require the Board to be satisfied. One can envisage cases in which, for example, a condition was that the Fire Services Department must be satisfied, or that the building plans must be approved by the Buildings Department to require the Board’s approval would be superfluous because these departments have their own statutory duties to perform. Other conditions, such as that any building must not exceed 6 storeys would not require any further decision. Even if, which I do not decide, theoretically, in relation to some planning conditions the Board could delegate the ultimate decision to a third party, say the Director of Planning, it is doubtful if the Board would ever do so. The Guidelines cited above suggests not. If such powers should be exercised in order to deprive an applicant of a review, its legality is questionable. 79. Godfrey Lam J said: “64. Moreover, it is not just any decision of the Board, but a decision of the Board under s. 16, that is subject to review. The word ‘under’ is another chameleonic word whose meaning is affected by its context. The conclusion of the Board in this case that it was not satisfied by the further plans and reports submitted is, in my view, more properly characterised as a decision pursuant to the terms of the conditions imposed by the Appeal Board under s. 16(5) ...” 80. With respect, I cannot agree. Suppose a straightforward case where permission was granted subject to conditions imposed by the Board itself, in that case it is artificial and inappropriate to say that the power to determine whether the conditions were satisfied were “pursuant to the terms of the conditions imposed by the Appeal Committee under s 16(5).” 81. There may be a simpler explanation for the expression “under section 16”, namely, so that it should not be supposed that there was a right of review or appeal in respect of a decision of the Board under any other section, for example, the important power to make plans under s 6, with its impact on the use and thus value of land. 82. Like the learned judge I would construe s 17(1) having regard to its context and purpose. Godfrey Lam J highlighted ss 16(6) and 17(6) in particular. As the learned judge pointed out s 16(6): “58. ... was not also amended in 1991 together with s. 17(1) when the latter was amended to expand the range of circumstances in which a review was available ... I can see no rational reason for this omission, which must have been unintended.” 83. I might add s 17(6) was not amended either. I question the usefulness of s 16(6) as an aid to the construction of the new wording in s 17(1). I find it difficult to accept that although s 16(6) was not amended at the same time to fall in line with the new language of s 17(1), the legislature intended that the words used in the new s 17(1) should be read subject to the no longer appropriate language of s 16(6). As for s 17(6), the learned judge said: “59. S. 17(6) then specifies that upon a review under s. 17, the Board ‘may ... grant or refuse to grant the permission applied for ... and may exercise the powers conferred by section 16(5)’ (emphasis added). This wording, especially the juxtaposition of the words ‘or’ and ‘and’, seems to me to presuppose that on a review, the Board will of necessity either grant or refuse to grant planning permission. Where the Board grants planning permission, it may in addition exercise the powers conferred by s. 16(5) to impose conditions. This in turn suggests that the review is supposed to be concerned with the application for planning permission itself, and not some standalone ancillary question. The developers argue that the power to decide whether further materials have been submitted pursuant to planning conditions imposed is an implied ancillary power that flows from the power to impose conditions under s. 16(5) and that therefore it is also an act that the Board may do on review under s. 17(6). This argument in my view misses the point and fails to give weight to the structure of s. 17(6).” 84. With respect, since it is clear that owing to an oversight, s 17(6) was also not amended in 1991, I question the relevance of a careful syntactic analysis of its language. No doubt, ss 16(6) and 17(6) were drafted in 1974 with the then language of s 17(1) in mind. Section 17(1) was amended in 1991. Sections 16(6) and 17(6) were not amended. I believe ss 16(6) and 17(6) should be read subject to the new language of s 17(1) and not so as to restrict the meaning of s 17(1). Indeed, that was what the learned judge did since he regarded the expression “a decision under section 16” to include a decision regarding conditions imposed under s 16(5), notwithstanding the language of ss 16(6) and 17(6). 85. The learned judge was of the view that there was much force in Mr John Litton’s submission[88] that “the decision ... under section 16” referred to in s 17(1) is the “decision on an application under this section” referred to in s 16(6). “59. ... This in turn suggests that the review is supposed to be concerned with the application for planning permission itself, and not some standalone ancillary question.” 86. I will set out s 16(6) in full: “The secretary to the Board shall notify the applicant in writing of the Board’s decision on an application under this section, and where the Board refused to grant permission shall also notify the applicant of his right to a review under section 17”. 87. Presumably, the judge would read it after 1991 as if it had been amended to say “The secretary to the Board shall notify the applicant in writing of the Board’s decision on an application under this section and shall also notify the applicant of his right to a review under section 17”. (My emphasis) But the words emphasized do not help unless one assumes that which has to be established, namely, that an ancillary decision under s 16(5) is not a decision under s 16. 88. Moreover, the establishment of the Appeal Board and its function are part of the context. As a result of the establishment of the Appeal Board, the Board no longer had the final say on planning matters in respect of s 16 applications. I ignore for this purpose, the possibility of interference by the court on judicial review as well as the former right to petition the Governor‑in‑Council. The function of the court on judicial review would normally not include a review of the merits of the decision. On appeal to the Appeal Board, the Appeal Board is entitled to and regularly makes planning decisions under s 16 de novo, assisted by expert evidence which would be subject to cross-examination, if necessary.[89] Therefore in an appeal against refusal of permission or the conditions imposed, the Appeal Board would exercise its own independent judgment on the appropriateness of the refusal or the conditions. Since on a s 16 application, the Board does not have the final say on the merits of the application or the conditions imposed, if any, I see no good reason why in respect of the satisfaction of conditions, when a planning judgment may be involved why it was thought to be intended that the Board should have the final say on the merits. Here, at the heart of the dispute between the parties is the question whether the modified MLP had deviated substantially from the approved development,[90] which is essentially a planning decision. On the Board’s case they (presumably a committee of the Board) have the final say and are not liable to review or appeal under the Ordinance. I don’t understand why that should be so and would not impute to the legislature such intention unless such intention is clearly revealed in the legislation. 89. The Court of Appeal considered s 17(1) in context and said that: “51. Within the statutory scheme, in determining an application for planning permission, the Board may make three primary decisions under section 16: (1) grant the application for planning permission without conditions; (2) refuse the application for planning permission; or (3) grant the application for planning permission with conditions. Once the Board arrives at any of the three primary decisions in disposing of the application, the secretary for the Board is mandated by section 16(6) to inform the applicant of the same. Where the primary decision is either a refusal or granting the permission with conditions, and if the applicant is aggrieved, he may apply for a review of that primary decision under section 17(1). For the purpose of section 17(1) ‘a decision made by the Board under section 16’ embraces such a primary decision only. It does not include any incidental decision that the Board may make in the discharge of its functions under section 16, irrespective of whether the underlying power to do so is derived from any statutory provision, be it section 16(5) or section 40 of [the Interpretation and General Clauses Ordinance], or from the common law. On the facts of this case, it does not include any incidental decision made in the discharge of its function under section 16(5) to determine if a planning condition imposed is satisfied.” 90. This approach relied heavily on the language of s 16(6) and I will not repeat what I have said above. The Court of Appeal divided decisions under s 16 into primary and incidental decisions presumably based on their view of their importance and confined the right to review (and an appeal to an independent body) to the more important primary decisions. But looking at the matter from the perspective of an applicant the important decisions by the Board in the case of a conditional permission must be the Board’s decision on what conditions to impose and their decision on the satisfaction of those conditions. Satisfaction of the conditions is the last hurdle in a s 16 application. Unless it is overcome, the permission is meaningless. So I cannot regard this decision as unimportant or less important. No doubt in the majority of cases, satisfaction of conditions would be a matter of routine. In such cases, there would be no review, nor need of one. But where it matters, as apparently it is thought it does in this appeal, I don’t understand why there shouldn’t be a right to review under s 17(1) and appeal under s 17B. Nor can I see any reason why such rights should have been deliberately excluded. There is nothing in the language, context or purpose of s 17(1) to require the exclusion of so-called ancillary or incidental decisions under s 16(5). 91. Even if there were no clear provisions in the 1991 Ordinance giving a right of review in respect of such decisions, the language used had not clearly excluded a right of review. The purpose of the 1991 amendment was to provide an arbiter so that resolution of disputes between the Board and an applicant should not only be fair but seen to be fair. It would give effect to such purpose to read s 17(1) to include decisions over satisfaction of conditions as decisions in respect of which there was a right of review and then appeal. 92. At the second reading of the 1991 Bill, SPEL said: “ ... The Administration, however, agreed that a new independent appeals body for appeals against the Board’s decision or planning applications under section 17(7) could be introduced ahead of the overall review. The Bill introduced today sets out the establishment, powers, membership and procedures of that appeals body. In addition, it provides for a further right of review in respect of conditions imposed on planning permission, which is currently not provided for in the existing Ordinance, as an applicant can only ask the Board to review its decision of refusal of planning permission. The amendments contained in the Bill will make the following changes to the Ordinance. They will: (a) provide a right of review in respect of conditions imposed on the planning permission; (b) provide for an independent Appeal Board to be substituted for the Governor in Council under section 17(7); (c) set out the establishment, membership, powers and procedure of the Appeal Board; (d) provide for regulations prescribing the procedures to be followed in making an appeal, and in the hearing and determination of an appeal; and (e) provide for the registration of notices served under section 23(1), (2) and (3). The basic approach is to substitute the Appeal Board for the Governor in Council as the independent channel of appeal against the Board’s decision on a review under section 17, extended to include the right of review of an applicant aggrieved by the conditions the Board imposed on a planning permission.” 93. Godfrey Lam J found this statement helpful to his construction of s 17(1). With respect, the words underlined by him[91], repeated above show that the amendment was intended to provide a review “in respect of conditions imposed on planning permission”. However, if it was intended to confine the right to review to dissatisfaction with the imposition of conditions, s 17(1) could have been amended to read “Where the Board refused to grant permission or where permission was granted subject to conditions under section 16, the applicant may ... apply ... for a review ...” As the learned judge rightly pointed out: “53. ... Whether the Legislature intended to do so cannot in my view be answered by reference solely to the ministerial statement but must be ascertained from the language of the statute as a whole.” 94. I also bear in mind what Lord Millett NPJ said in Director of Lands v Yin Shuen Enterprises Ltd (2003) 6 HKCFAR 1, 15 F-G: “22. Such evidence is admissible for a limited purpose only, to enable the Court to understand the factual context in which the statute was enacted and the mischief at which it was aimed. This is not the same as treating the statements of the executive about the meaning and effect of the statutory language as reflecting the will of the legislature.” 95. I have already explained the history behind the 1991 Bill. The 1991 Bill was mainly concerned with the establishment of an independent Appeal Board which as I have said made the Appeal Board the ultimate decision maker on s 16 applications. Section 17(1) should be read in such context. Given “control by consultation” it seems to me highly unlikely that before 1974 an applicant could not ask the full Board to re-consider conditions imposed under s 16(5) or to be given an opportunity to address them. Nor do I think likely he would have been told that after the 1974 Ordinance, he could no longer do so. In any event, the language chosen for s 17(1) was not expressly confined to an appeal against the imposition of conditions which could easily be stated if that was all that was intended. The language used gave a right to review “if an applicant is aggrieved by a decision of the Board”. I don’t think the broadness of the language was unintended or would have escaped notice. I acknowledge that SPEL spoke of “a further right of review in respect of conditions imposed on planning permission” and that his words carry some weight in the construction. But, the expression “in respect of conditions imposed” is wide enough to cover the Board’s decisions regarding the compliance of these conditions. As the learned judge said, though in the context of s 28 of the 2004 Ordinance, the phrase “in respect of” has a very wide meaning.[92] 96. I go on to consider whether there were any policy reasons why there should be no right of review regarding the satisfaction of conditions imposed. I accept that in a typical case, the satisfaction of such conditions are concerned with technical matters and often are governed by, for example, the Buildings Ordinance. Obvious examples are the calculation of plot ratios and site coverage. I also accept that s 17 review or s 17B appeals regarding the satisfaction of conditions would be rare. But in some cases, it may be important. The present may be such a case. I must emphasize we are not concerned with the merits, if any, of the appellant’s review and express no view. I see no policy reason why a review and the all important appeal should be denied. Nor is the possibility of a new application a sufficient reason because an applicant would lose the benefit of the earlier permission which might no longer be given because of changes in planning law or practice. 97. Now, I will deal briefly with the learned judge’s view on why he thought the 2004 amendments militate against the appellant’s contention. I regard the 2004 amendments irrelevant to the construction of the 1991 Ordinance and with respect I do not agree with the learned judge that the 2004 amendments militate against the appellant’s construction. 98. In the 2004, s 17(6) was also amended to provide: “ ... the Board may confirm or reverse the decision in question, or substitute for the decision in question any decision it could have made under section 16 or 16A, as the case may be.” (My emphasis) 99. If with respect, the legislature had intended to limit the right to review to decisions refusing permission or decisions imposing conditions under s 16(5), the language chosen was inapt. As it is, the language of the 2004 version of s 17(6) is wide and would include any decision made by the Board under ss 16 and 16A.[93] Nor would the 2004 version of s 17(6) require a narrow meaning to be given to s 17(1), even if, which I do not accept, the language of the 1991 version of s 17(6) supported a narrow reading. So, the 2004 version of s 17(6) does not militate against the appellant’s contention. 100. Under the 2004 Ordinance, the learned judge pointed out, the Board could make: “68. ... various ‘decisions’ (in the broad sense) in the course of processing an application made under s. 16(1). Thus, for example, it may under s. 16(2A) require the applicant to verify any matter or particulars in the application; it may under s. 16(2B) refuse to consider an application where it is not in the prescribed form or does not include requisite particulars, or where the applicant has not taken sufficient steps to obtain the consent of the current land owners; it has under s. 16(2L) a discretion to exempt further information supplied by the applicant from the process of public consultation. On the developers’ argument, all such ‘decisions’ are subject to review by the Board under s. 17, with the decision on review subject to appeal to the Appeal Board under s. 17B. Multiple reviews and appeals could be generated in the course of a single application for permission, with the prospect of judicial review of each decision of the Appeal Board. I doubt very much that the Legislature had intended to create such a potentially lengthy and cumbersome procedure.” 101. I recognize the force of the learned judge’s point that under the 2004 Ordinance, many decisions could be made under s 16 so potentially there could be many reviews or appeals. But I regard the fear of many and presumably frivolous appeals unreal. First, I think one may proceed on the basis that developers are rational beings and they would not review or appeal unless there are good commercial reasons to do so. It is common sense that timing is important in land development and s 16 applications are often made to catch the public mood which can be fickle. So, it is highly unlikely that an applicant will court delay. Nor is the fact that a right of review or appeal capable of abuse, a good reason to deny a right to do so when there is no abuse. Moreover, in the event of actual and persistent abuse, the solution would be to tighten up the legislation to eliminate abuse and not to throw out the good with the bad. Nor is it right to regard appeals against decision made under as s 16(2A) or (2B) as necessarily trivial. 102. Section 16(2A) provides: “where an application is made under subsection (1), the Board may require the applicant to verify any matter or particulars set out or included in the application, whether by statutory declaration or otherwise.” 103. Section 16(2B) provides: “... The Board may refuse to consider an application made under subsection (1) where – (a) the application does not comply with any of the requirements specified in or made under subsection (2); or (b) the Board is not satisfied that the applicant has within a reasonable period before the application is made – (i) obtained the consent in writing of each person (other than the applicant) who is a current land owner in respect of the application, or notified such person in writing of the application; or (ii) taken such reasonable steps as the Board requires in order to obtain the consent of such person in respect of the application, or to give notification to such person in respect of the application.” 104. In some cases, whether or when a valid application has been made could mean the difference between being able to make an application or not at all. In such event, a decision under ss 16(2A) and 16(2B) can be important. Our recent decision in Real Estate Developers Association of Hong Kong v Building Authority (2016) 19 HKCFAR 243 showed that the question whether the Building Authority could disapprove plans on the basis that the applicant could not demonstrate when building plans were submitted for approval that it owned or had a realistic prospect of controlling the site of the proposed development was considered so important that it had spawned many proceedings and was only settled by our decision. So, I would not regard a rejection of a s 16 application under ss 16(2A) or (2B) as necessarily unimportant or any application for review or appeal as a result necessarily frivolous. More importantly, one should not be overly influenced by the possibility of frivolous appeals. I would not construe s 17(1) so as to exclude serious reviews or appeals because they could be abused. 105. An incongruity identified by Godfrey Lam J and mentioned by the Chief Justice at para.48(3) above is that under the 2004 Ordinance, no public consultation was required regarding plans and materials submitted pursuant to conditions imposed under section 16(5). This is a serious omission but I would respectfully draw a different conclusion. In a straightforward case, public consultation should arouse no interest, but in a controversial case, such as the present case[94], the need for public consultation is obvious. Suppose, in a similarly controversial case, the Board approved a modified MLP without any public consultation that would be plainly unsatisfactory. So the “solution” is not to give a restrictive interpretation to section 17(1) but to remedy this omission by amendment. 106. For the above reasons, I would answer the certified question by saying a decision of the Board that conditions imposed under s 16(5) have not been satisfied is a decision made under s 16 such that the appellant was entitled to a review under s 17(1). Chief Justice Ma : 107. By a majority (Mr Justice Tang PJ dissenting), the appeal is dismissed. There will also be a costs order nisi in the terms as set out in para 52 above. Mr Anthony Neoh SC, Mr Anthony Ismail and Mr Justin Ismail, instructed by Lo & Lo, for the Interested parties (Appellants) Mr John Litton, instructed by the Department of Justice, for the Applicant (Respondent) The Respondent, Town Planning Appeal Board, attendance excused [1] This provision is set out in para 13 below. [2] Judgments of Godfrey Lam J dated 16 January 2014 (reported in [2014] 1 HKLRD 1056) (the CFI Judgment) and of the Court of Appeal (Lam VP, Kwan JA and Jeremy Poon J) dated 18 June 2015 (reported in [2015] 3 HKLRD 490) (the CA Judgment). [3] The amendments were effected by the Town Planning (Amendment) Ordinance 2004. Although these amendments took effect from 10 June 2005, it is convenient to refer to them as “the 2004 amendments”. These amendments resulted in the form the TPO now largely takes. [4] The appellantswere joined as interested parties in the present proceedings and were represented throughout. Before us, they were represented by Mr Anthony Neoh SC, Mr Anthony Ismail and Mr Justin Ismail. They and the respondent, the TPB, are the relevant parties to the present proceedings. The Town Planning Appeal Board (the TPAB), although the named respondent in the judicial review proceedings, has not taken an active part. [5] This was the Draft Nam Sang Wai Development Permission Area Plan No. DPA/YL-NSW-1. Such draft plans are prepared by the TPB as one of its main functions under the TPO. The importance of such draft plans lies in the fact that they make provision (as the Long Title to the Ordinance states) for the future layout of areas in Hong Kong and also for the types of building suitable for erection thereon. Although always called draft plans (in that they are subject to ultimate approval by the Government), these plans have an important status. For example, it is on the basis of such draft plans that applications for permission are sought under s 16 of the TPO. [6] This is the Appeal Board panel set up under s 17A of the TPO. [7] Henderson Real Estate Agency Limited v Lo Chai Wan [1997] HKLRD 258. [8] Para 4 above. [9] See para 10 of the CFI Judgment. [10] See para 2 above. [11] At paras 40 to 45 of the CFI Judgment. [12] Para 41 of the CA Judgment (judgment of Jeremy Poon J (now Poon JA), who gave the judgment of the court). [13] The respondent was represented in this appeal by Mr John Litton. [14] Set out in para 13 above. [15] Whether the Board was satisfied that condition (c) had been complied with : see para 8 above. [16] Section 40(1) states :- “Where any Ordinance confers upon any person power to do or enforce the doing of any act or thing, all such powers shall be deemed to be also conferred as are reasonably necessary to enable the person to do or enforce the doing of the act or thing.” [17] This principle is contained in cases like Attorney General v Great Eastern Railway (1880) 5 App. Cas. 473. [18] Appeals to the TPAB are under s 17B(1) of the TPO. This provision was introduced in 1991 by the Town Planning (Amendment) (No. 2) Ordinance 1991. Prior to this, an appeal lay only by petition to the Governor‑in‑Council. [19] See para 64 of the CFI Judgment. [20] Town Planning Board Guidelines on Compliance of Approval Conditions (TPB PG-No. 20) dated May 1999. [21] This automatically followed, as the jurisdiction of the TPAB under s 17B of the TPO is only to hear appeals from decisions of the TPB under s 16. [22] Mr Justice Ribeiro PJ, Mr Justice Tang PJ and Mr Justice Fok PJ. [23] See, for example. T v Commissioner of Police (2014) 17 HKCFAR 593, at para 194 (per Fok PJ). [24] T v Commissioner of Police at para 194. [25] See T v Commissioner of Police at para 4. [26] See T v Commissioner of Police at para 194; HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568, at para 14. [27] Although the exact wording of this provision has changed over the years, this function is essentially contained in s 3 of the Ordinance. [28] The present Ordinance refers to the approving authority being the Chief Executive‑in‑Council (s 9); prior to 1 July 1997, this was the Governor‑in‑Council. [29] [1974] HKLR 275. [30] At 296, 300. [31] This reason appears in the Explanatory Memorandum to the Bill introducing the amendments, as well as in the statement made by the Attorney General to the Legislative Council : see Hong Kong Hansard dated 31 July 1974 at 1080-81. [32] At para 54 of the CFI Judgment. [33] Amendments were made to the Long Title in 1991. [34] Para 13 above. [35] See Hong Kong Hansard dated 8 May 1991 at 1913, 1914. [36] At para 50 of the CFI Judgment. This was also quoted in the CA Judgment at para 26. [37] See s 17B(1) of the TPO. [38] At para 68 of the CFI Judgment. [39] Such as in s 12A(1) of the current TPO, which reads :- “Subject to subsection (2), any person may apply to the Board for consideration of any proposal in relation to an original approved plan for the purposes of this section.” [40] Para 13 above. [41] Godfrey Lam J regarded this omission to have been unintended : see para 58 of the CFI Judgment. [42] See para 59 of the CFI Judgment. [43] Para 15 above. [44] See paras 14 and 15 above. [45] See para 45(3) above. [46] See paras 30 to 45 above. [47] See Medical Council of Hong Kong v Chow Siu Shek (2000) 3 HKCFAR 144, at 158D (Bokhary PJ). [48] The Explanatory Memorandum (and Hansard) state the main purpose of the amendments was to “streamline the town planning procedures while enhancing public involvement in the town planning process ....”. [49] See sections D.3 and D.4 above. [50] In the section of the CFI Judgment headed “Consequences of the developers’ interpretation”. [51] See sub-para (1) above. [52] In para 67 of the CFI Judgment, set out in sub‑para (3) above. [53] Para 20 above. [54] By the Town Planning (Amendment and Validation) Ordinance 1974 (59 of 1974)(“1974 Ordinance”). [55] Section 17. [56] By the Town Planning (Amendment)(No 2) Ordinance (101 of 1991)(“1991 Ordinance”). Section 17B. [57] Extract of the Hansard of the Town Planning (Amendment)(No 2) Bill 1991. [58] CFI Judgment at para 5. [59] As amended by the 1991 Ordinance, which as explained at para 71 below is the version of the Ordinance applicable to this appeal. [60] Prior to the 1991 Ordinance, s 76(7) provided for an appeal by way of petition to the Governor-in-Council whose decision was final. [61] Initially for a period of five years but it had been extended from time to time ultimately to 18 December 2010. CFI judgment at para 9. Godfrey Lam J said: “16. ... on 10 December 2010, [the Board] refused to renew the validity of the permission, ...”. [62] Conditions (c), (d) and (f) to (w), of these, (c) which concerns the MLP is the most important because other plans and provisions were based on the MLP. [63] CFI Judgment at para 11. [64] CFI Judgment at para 12. [65] CFI Judgment at para 15. [66] The main dispute between the appellant and the Board is over the question whether the plans submitted involved major changes such that a fresh application was required. That is essentially a planning question. A review followed by a possible appeal to the Appeal Board would provide an applicant with the opportunity of an examination of the decision omits merit. A new application would be governed by the practice or legislation current at the time of the application. [67] At p 286-287. [68] Hansard 31 July 1974 the Attorney General on moving the second reading of the Town Planning (Amendment and Validation) Bill, 1974 (“the 1974 Bill”). [69] At p 290 although as the Attorney General explained at the second reading of the 1974 Bill “the position has always been well understood by developers and their advisers.” [70] Date of judgment on 20 June 1974. First reading on 31 July 1974, enacted on 15 August 1974. [71] See Planning Applications in the Development Control System of Hong Kong (Thesis) by Cheng Tak-yiu, Eureka, Workshop Report August 1993. See also Change in Use of Land by Lawrence Wai-chung Lai, Daniel Chi-wing Ho and Hing-fung Leung. Hong Kong University Press at 63. [72] For example, as of 1 April 2016, there were 7 official members and 30 non official members. [73] Para 63. [74] Now s 21. [75] The speech of the Hon Mr McGregor at the second reading of the 1990 Bill gives a hint: “During my long working life in Hong Kong, I have always found that almost nothing gets done without compromise. This Bill is no exception and many, many hours of discussion were spent in seeking to establish acceptable compromises. We have listen to agonized protests and appeals from those who thought that their legitimate and vital interests were being denied or removed. We listened to many appellants who demanded that they be allowed to continue to use their agricultural land for such storage purposes as they wished or, alternatively, that they be compensated for any additional legal restriction that might be applied, through this legislation, on the uses to which their land areas might be put. Others were deeply concerned that the Government seemed to be moving into comprehensive land planning for the entire New Territories under the pretext of dealing with environmental damage. Anxiety has been expressed over the legal and administrative procedures under which appeals can be made by those affected by land planning and land use decisions made under this legislation. And so on and so on ad infinitum.” Reading the Hansard one could see the high passion aroused by the 1990 Bill. An Ad hoc group was appointed and there were many amendments to the 1990 Bill. Out of this came the Town Planning (Amendment)(No 2) Bill of 1991, which became the 1991 Ordinance. [76] 23 January 1991. [77] Section 3 of the Town Planning (Amendment)(No 2) Ordinance 1991 (101 of 1991). [78] CFI Judgment at para 44. [79] Lam VP, Kwan JA and Jeremy Poon J, [2015] 3 HKLRD 490 at para 41. [80] CFI Judgment at para 45. [81] Giving the judgment of the Court of Appeal. [82] Court of Appeal Judgment at para 31. [83] (2009) 12 HKCFAR 568. [84] Para 51. As will be dealt with below, the Court of Appeal thought that the right to review under s 17(1) was restricted to three “primary decisions” available to the Board under s 16, namely, grant the application without conditions, refuse the application or grant the application with conditions. [85] Para 51, respondent’s written case. [86] “Where any Ordinance confers upon any person power to do or enforce the doing of any act or thing, all such powers shall be deemed to be also conferred as are reasonably necessary to enable the person to do or enforce the doing of the act or thing.” [87] The Guidelines postdated the 1991 Ordinance. But we were not referred to any earlier guidelines. Presumably, the Guidelines reflected the practice of the Board throughout. [88] CFI Judgment at para 60. [89] Section 17B(6). [90] See para 59 above. [91] CFI Judgment at para 50. [92] CFI Judgment at para 44. [93] We are not directly concerned with s 16A and in the interest of time, I will not deal with it. [94] The present case is not affected by the 2004 amendments but this discussion is directed to the ‘incongruity’ of construing ‘a decision under section 16’ in section 17(1) after the 2004 amendments to include decision regarding the satisfaction of conditions imposed under section 16(5).
Mr Justice Ribeiro PJ: 1. These appeals, which arise out of the same transaction and which have been heard together, raise questions concerning the elements of the offence created by section 9 of the Prevention of Bribery Ordinance[1] (“POBO”). A. The relevant events 2. The appellant Stephen Chan Chi Wan (“Chan”) was at the material time employed as General Manager (Broadcasting) by Television Broadcasts Ltd (“TVB”) under a contract designed for administrative personnel. He was not required to appear in front of the cameras but had voluntarily hosted a talk show screened on a TVB pay channel where he interviewed various celebrities, receiving no additional remuneration for so doing. 3. The show has been referred to as the “Be My Guest” show but its Chinese name “志雲飯局” translates literally as “Chi Wan’s Dinner Party”, “Chi Wan” being Chan’s given name. It gained considerable popularity, more than 150 episodes having been aired, so that Chan himself acquired a certain celebrity status. This led to his being engaged by third parties to appear at various external events, the evidence being that between June 2008 and January 2010, this occurred 20 odd times, Chan receiving remuneration on 18 of those occasions. 4. The appellant Tseng Pei Kun (“Tseng”) was the sole director and shareholder of Idea Empire Advertising & Production Company Limited (“IEAP”). He and IEAP acted as Chan’s agent in respect of his outside commercial engagements. 5. Olympian City is a shopping mall operated by Olympian City 2 Management Co Ltd (“OC”). For several years, OC had collaborated with TVB, sponsoring a New Year’s Eve Countdown show produced by TVB and broadcast from Olympian City as a means of promoting the shopping complex. In November 2009, OC and TVB reached agreement for the Countdown show to be presented on 31 December 2009. OC agreed to pay $1.3 million as the sponsorship fee without having discussed any of the programme’s contents. 6. Coincidentally, the parties came up with the idea of adding, as a segment ancillary to the main Countdown presentation, a live, staged edition of the “Be My Guest” show. It was accepted that the $1.3 million fee would not cover the cost of this additional segment and there was no suggestion that TVB would be responsible for arranging for Chan’s participation. The evidence was that OC knew from previous experience that TVB would not provide what were referred to as their “top-tier artistes” for the Countdown event, so OC would independently invite any personalities they wished to have appearing on the show. 7. OC accordingly contacted Tseng, knowing that IEAP acted as Chan’s agent, and entered into an agreement with IEAP for Chan to appear on a live “Be My Guest” segment in the Countdown show, interviewing as his guest Lai Yiu Cheung (“Lai”). It was agreed that they would wear stickers promoting Olympian City, a requirement that did not apply to the artistes supplied by TVB. 8. OC agreed to pay IEAP $160,000 and in turn, IEAP agreed to pay $112,000 to Chan and $20,000 to Lai, keeping $28,000 for itself. Chan did not seek or obtain permission from TVB to appear on or to be paid for hosting the show although he had a contractual obligation to seek approval for outside work. However, since TVB produced the show, it was generally known by persons at TVB that Chan had been engaged to take part in the Countdown event. It was, as its Chinese name indicates, Chan’s show obviously to be aired with his participation. The special edition of “Be My Guest” was duly broadcast and IEAP, Chan and Lai duly received the agreed remuneration. B. The charges and the course of the proceedings 9. The appellants were charged with conspiring for an agent to accept an advantage contrary to section 9(1)(a) (Charge 1) and, alternatively, with the substantive offences of an agent accepting an advantage (Charge 2, in Chan’s case) and offering an advantage to an agent (Charge 3, in Tseng’s case). 10. The charge against Chan as particularised was that he, being an employee and thus an agent of TVB, without lawful authority or reasonable excuse, accepted from Tseng acting on behalf of IEAP, an advantage consisting of the $112,000 fee as an inducement or reward for or otherwise on account of Chan’s doing or having done an act in relation to his principal’s affairs or business “namely participating and performing in a side-show entitled ‘Be My Guest’ in the ‘New Year Eve Countdown Programme at Olympian City for 2010’ which was produced and broadcast by TVB” on 31 December 2009. 11. Tseng was charged with offering that amount to Chan as an inducement, etc, for Chan so to act in relation to the affairs or business of his principal TVB. The alternative charge that they both faced was that they had conspired for Chan to accept that advantage as such an inducement, etc, in relation to his principal’s affairs or business. 12. On 2 September 2011, His Honour Judge S T Poon, AgCDJ (as he then was) acquitted the appellants.[2] The prosecution appealed by way of case stated[3] and the Court of Appeal[4] allowed the appeal, set aside the not guilty verdicts and remitted the case to the trial judge to consider whether the appellants could rely on the defence of reasonable excuse for Chan’s conduct. 13. On 7 March 2013,[5] S T Poon CDJ ruled that the reasonable excuse defence availed both appellants and dismissed the charges afresh. However, the prosecution once again appealed by way of case stated[6] and, once again, the Court of Appeal[7] allowed the appeal and directed the Judge to convict Chan and Tseng on the conspiracy charge and to sentence them accordingly. Chan was fined $84,000 and Tseng fined $28,000. 14. The Court of Appeal[8] refused a certificate sought by the appellants for the purposes of appeal, but the Appeal Committee granted each appellant leave to appeal,[9] certifying the following questions as being of sufficiently great and general importance, namely: (1) In the context of a section 9 offence under the Prevention of Bribery Ordinance (Cap 201) (“POBO”): (i) what is the mens rea required of an agent to constitute him guilty of an offence under that section; and (ii) how should the element “in relation to the principal’s affairs or business” be interpreted having regard to the determination of the Privy Council in Commissioner of the ICAC v Ch’ng Poh [1997] HKLRD 652? (“Questions 1(i) and 1(ii)”) (2) In the context of a section 9 offence under POBO, what is the proper approach the Court should adopt in considering the defence of reasonable excuse? (“Question 2”) 15. Leave was also granted on the ground that it was reasonably arguable that a substantial and grave injustice had been done to the appellants in the present case. C. Question 1(i): Elements of section 9 and mens rea 16. POBO section 9 is concerned with transactions between third persons and agents in relation to the affairs or business of their principals. Its offence-creating provisions materially state as follows: Corrupt transactions with agents (1) Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his – (a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or (b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal’s affairs or business, shall be guilty of an offence. (2) Any person who, without lawful authority or reasonable excuse, offers any advantage to any agent as an inducement to or reward for or otherwise on account of the agent's – (a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal's affairs or business; or (b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal’s affairs or business, shall be guilty of an offence. 17. Section 9(4) excludes from liability an agent who obtains the informed permission of his principal before or as soon as reasonably possible after the conduct which would otherwise constitute a section 9 offence. As permission was neither sought nor given in the present case, section 9(4) is of no application. 18. Addressing Question 1(i), there is no doubt that section 9 is an offence which requires proof of mens rea in respect of all its essential actus reus ingredients. It should be borne in mind that there are several variants of the offence. Thus, section 9(1) covers agents who solicit or accept an advantage while section 9(2) deals with persons who offer an advantage to the agent. The advantage may be an inducement to do or forbear from doing some act in the future. Or it may be a reward for having already done or forborne to do something. The act or forbearance must in each case be in relation to the affairs or business of the agent’s principal, a phrase which is examined in detail below.[10] The mens rea requirement of any particular variant is necessarily adapted to the elements of that variant and may differ from the mens rea requirement of some other variant of the offence. 19. The importance of the mens rea or mental dimension of the offence looms larger in cases involving the offering, soliciting or accepting of an advantage as an inducement for a future act or forbearance. This is because the offence is committed upon the making of the offer, solicitation or acceptance, it being no defence that the contemplated act or forbearance was not or could not be performed by the agent.[11] In such cases, it is the state of mind of the person making the offer to the agent or of the agent soliciting the advantage, or where the agent accepts the advantage, the mental state of the agent in accepting the advantage, that is the major component of the offence. Where the induced or offered act or forbearance has taken place or where the case involves a reward for past conduct, that conduct is available to be examined as part of the actus reus with the accused’s accompanying mental state. 20. It has been stressed that the liability of each person involved in the transaction must be independently assessed according to his own mens rea. Thus it has been held that an agent accepting an advantage with the requisite corrupt intent may be convicted even though the person furnishing the advantage acted innocently. Stuart-Moore VP put it thus in HKSAR v Wong Yuk Sim:[12] “...where a provider of a reward thinks he is providing something innocently but the receiver believes that the provider is providing it as a corrupt reward and he accepts it as a corrupt reward, believing it to have been provided as a corrupt reward, then the receiver behaves corruptly even if the provider behaves innocently.” 21. It follows that in cases involving the offering or solicitation of an advantage, the prosecution must prove that the accused intended that, if provided, the advantage should be accepted as an inducement or reward for or otherwise on account of the agent’s act or forbearance in relation to his principal's affairs or business (in the sense discussed below[13]). 22. And in cases involving the accused agent’s acceptance of an advantage, the prosecution must prove that he knew or believed it to have been provided as an inducement or reward for or otherwise on account of his act or forbearance in relation to his principal's affairs or business (in the aforesaid sense). D. The Judge’s reasoning 23. The Judge referred to Commissioner of ICAC v Ch’ng Poh,[14] (to which I shall return[15]) and recognized that the prosecution did not have to establish that Chan was acting in his capacity as TVB’s agent either when accepting the money or when appearing on the show. His Honour noted, relying on Ch’ng Poh, that: “What the prosecution needs to prove is only that the relevant act is an act done in relation to his principal’s affairs or business. However, this phrase should not be given a limitlessly wide meaning. Its meaning should be kept within a specific parameter, which is: when the defendant did the act in question, he must have intended the act to ‘influence or affect’ his principal’s affairs or business. In other words, his act was ‘aimed at’ his principal.”[16] 24. He concluded that Chan’s appearance in the “Be My Guest” segment “was purely an act of moonlighting in his capacity as a ‘celebrity’ or an ‘artiste’, and such an act was not intended to influence or affect the affairs or business of TVB, nor was it aimed at TVB”[17] so that it fell outside the ambit of section 9. 25. In his 2nd Case Stated,[18] the Judge elaborated on his views, pointing out that Chan had not used any powers of his office to benefit himself and had acted openly, his participation having been discussed at TVB production meetings, so that there was no question of him making a secret profit. He held that Chan’s participation in the show “would do no harm but good to TVB” and that “[his] performance and acceptance of the reward did not conflict with any interest of TVB.” He commented that Chan’s mistake merely involved his failure to “follow the procedures prescribed in the employment contract” regarding approvals of outside work and remuneration. 26. The Judge therefore concluded that Chan’s act of accepting $112,000 as an inducement or reward for appearing on the show was not an act done “in relation to his principal's affairs or business” within the meaning of section 9 or (in his 2nd Case Stated) was amenable to the defence of reasonable excuse. He therefore acquitted the appellants. E. The Court of Appeal’s reasoning 27. The Court of Appeal reversed the Judge’s verdict of acquittal holding that he had been wrong to find that Chan’s act fell outside section 9. In the joint judgment of Yeung VP and Yuen JA, it was held that Chan’s appearance in the show “related to TVB’s affairs or business”; would “influence or affect TVB”; was “aimed at TVB” and would “involve TVB”.[19] The reasoning behind those conclusions is contained in the following paragraphs of that judgment (translated from the original Chinese): “107. Although Chan’s chief position at TVB was General Manager (Broadcasting) and he was not contractually obliged to perform in front of the camera, the undisputed evidence shows that he had performed in more than 150 episodes of ‘Be My Guest’, which was a well-known and very favourably received talk show on TVB’s pay channel. 108. It must have been because of the popularity of ‘Be My Guest’ that Olympian City would like to have the additional ‘Be My Guest’ show added within the main show. 109. This request made by Olympian City met with approval from TVB. TVB allowed Chan and another artiste Lai Yiu-cheung to perform together in the additional ‘Be My Guest’ show, which was to be produced and broadcast live by TVB. 110. Had Chan refused to perform in the additional ‘Be My Guest’ show, it might have been necessary for TVB to arrange another programme as a substitute. This might affect the contractual relationship between TVB and Olympian City and would significantly influence the audience ratings of the live broadcast of the main show. 111. Judging from the undisputed and/or indisputable background facts of the present case, the propositions that Chan performed in the additional ‘Be My Guest’ show merely in the capacity of a celebrity, that his performing in that show was not related to TVB’s affairs or business, and that it would not influence or affect TVB, would not involve TVB and was not aimed at TVB, are all artificial and contrived. These propositions not only deviate from the crux of the issues in the present case and defy common sense, but also represent an approach which is neither realistic nor reasonable.” 28. These are, with respect, decidedly odd reasons for labelling Chan’s conduct as criminal. What is asserted in those paragraphs is that TVB wanted Chan’s show to be part of its Countdown event because its popularity would boost audience ratings. Chan in fact obliged without being asked to do so by TVB and at no cost to the television station, having been engaged and paid to appear on the show by OC via IEAP. Thus, on the Court of Appeal’s reasoning, Chan’s conduct was wholly in line with and beneficial to TVB’s interests. 29. However, the joint judgment holds that Chan’s conduct constituted the section 9 offence by saying that it “related to”, would “influence or affect”, was “aimed at” or would “involve” TVB’s business or affairs in that TVB’s business would have been prejudicially affected if Chan had refused to perform (as he was entitled to under his contract) because audience ratings would have been adversely affected, alternative programming arrangements might have been necessary and TVB’s contractual relationship with OC might have been affected. This is to assert that Chan committed the offence because TVB would have been prejudiced if Chan did not act in the beneficial way in which he was induced to act by remuneration from OC. Such reasoning appears to turn the policy of section 9 on its head. 30. The joint judgment did not regard this as a difficulty, taking the view that lack of prejudice to the principal’s affairs or business was irrelevant: “What section 9(1)(a) requires is that the act of the agent is done in relation to his principal’s affairs or business. There is no requirement that the agent’s act has to cause prejudice to his principal’s affairs or business. Ch’ng Poh further explained that the phrase ‘in relation to his principal’s affairs or business’ meant that the agent’s act would influence or affect his principal’s affairs, would involve his principal, and was aimed at his principal. Ch’ng Poh did not say that the ‘influence’ or ‘effect’ must be adverse, and the parties agreed that the term ‘aimed at’ does not carry a negative meaning.[20] In support of this view, reliance was placed on the Court of Appeal’s earlier decision in HKSAR v Fung Hok Cheung,[21] to which I shall return.[22] 31. Cheung JA, in a concurring judgment, gave different reasons for holding that Chan’s performance was an act in relation to his principal's affairs within the meaning of section 9. His Lordship stated: “... Judge Poon overlooked the fact that besides being a celebrity or an artiste, the 1st respondent was also General Manager (Broadcasting) of TVB, and therefore his acts were certainly related to TVB’s business. This is because, on the facts, when TVB and Olympian City Management Ltd were planning the countdown event, they happened to put forward the same idea, to which they then agreed, of adding in a shopping mall version of ‘Be My Guest’ as part of the event. It follows that, if the 1st respondent participated in that show and accepted money therefor, he would be doing an act in relation to TVB’s business.”[23] 32. With respect, the proposition that Chan was General Manager (Broadcasting) and “therefore” his acts “were certainly related to TVB’s business” is hard to follow. Chan’s appearance on the talk show had nothing to do with his being General Manager (Broadcasting). Whether his hosting of the show did or did not qualify as an act “in relation to his principal's affairs or business” required examination of the relationship between that act and the principal’s affairs or business. It was not determined simply by pointing to his managerial position in TVB. 33. Cheung JA added (in the context of his discussion of mens rea): “Judge Poon considered that when the 1st respondent agreed to perform in the ‘Be My Guest’ show, he had no intention to influence or affect TVB’s business and his act was not intended to be aimed at TVB, because the idea of adding in the show was not conceived by either of the two respondents, who merely played a passive role. However, as stated above, the most important consideration is that the 1st respondent’s act was related to the TVB programmes, and this precisely indicates a causal relationship between his act and his principal’s business, on which basis the court is entitled to find that the 1st respondent had the mens rea for the section 9(1)(a) offence.”[24] (Italics supplied) 34. To regard the required relationship between the agent’s act and the principal’s affairs or business as established simply because Chan’s show “related to TVB programmes”, gives the section an extremely broad interpretation. It was an approach supported by Mr Jonathan Caplan QC[25] who submitted that it was enough that Chan’s show was part of a programme broadcast by TVB. 35. For the reasons developed below, I am respectfully of the view that the Court of Appeal’s judgments are erroneous and based on a misconstruction of section 9. F. Ch’ng Poh 36. The leading authority in this context is Commissioner of the ICAC v Ch’ng Poh[26] in which the Privy Council considered the nature and limits of the offence created by section 9. Mr A, a partner in a solicitors’ firm referred to as X & Co, was acting for Ch’ng Poh who had been convicted of fraud. To bolster his prospects of appeal, Ch’ng Poh caused A to offer a bribe to a corrupt former prosecutor, Warwick Reid, who was asked to swear an affidavit discrediting an accomplice and key prosecution witness, one C H Low, and to try to persuade Low not to cooperate with the prosecuting authorities. A warrant authorizing a search of X & Co’s premises which was purportedly issued by the magistrate under POBO section 9(1)(a) was quashed for want of jurisdiction. The Privy Council held that on the facts, A’s acts had nothing to do with the affairs or business of his principal X & Co, so that section 9 was not engaged. 37. In reaching that conclusion, Lord Lloyd of Berwick held that the words “in relation to his principal's affairs or business” had a restricting purpose and that it was not enough that the recipient of a bribe should merely be shown to be someone’s agent: “Section 9 is the only section in the Ordinance dealing with persons other than public servants. It is confined to agents. It does not say, like section 4, that the agent must have been acting in his capacity as an agent. Instead the act done (or not done) by the agent must be an act done or not done ‘in relation to his principal's affairs’. But as Keith J pointed out in R v Ng Man Ho [1993] 1 HKC 632 at p.638 the alternative words serve much the same purpose. They are clearly intended to be restrictive. It is not enough that the recipient of the bribe should be an agent in fact. Otherwise any partner in a firm of solicitors, accepting an advantage without authority or reasonable excuse, would be caught by the section. This would be much too wide.”[27] 38. Turning to the meaning of the restricting phrase, his Lordship stated: “So what do the limiting words mean? They mean that, for the section to apply, the person offering the bribe, must have intended the act or forbearance of the agent to influence or affect the principal's affairs. Accordingly s.9 would apply if Ch’ng Poh had bribed Mr A to secure him a benefit at X & Co's expense, for example, to arrange a reduction in X & Co's ordinary professional fees; or if X & Co were induced to act in a way in which they would not otherwise have acted. Thus it is an essential ingredient of the offence under s.9 that the action or forbearance of the agent should be aimed at the principal. If it is sufficient for the purposes of the person offering the bribe that the agent should act on his own without involving his principal, then, whatever other offence may have been committed, it is not a corrupt transaction with an agent for the purposes of s.9.”[28] 39. In giving this meaning to the restrictive words, Lord Lloyd was elaborating upon both the actus reus and mens rea elements of the offence. In variants of the offence where the agent has already done the act or forborne to act, his Lordship’s dictum explains the quality of the relationship between the performed act or forbearance on the one hand and the principal’s affairs or business on the other which must be proved: the act or forbearance must have been aimed at and intended to influence or affect the latter’s affairs or business. In cases where the act or forbearance have yet to occur, Lord Lloyd identifies the mental element required: the advantage offered or solicited must be intended as an inducement or reward for an act or forbearance aimed at the principal’s business, with a view to influencing or affecting the same. 40. Reliance on section 9(1)(a) by the Commissioner in the Ch’ng Poh case was plainly misconceived. There was no advantage offered to or solicited or accepted by the only relevant agent, Mr A. And although he was a partner in X & Co and was in general an agent of the firm, his act of conveying a bribe to Reid was not related to X & Co’s affairs or business. The importance of Lord Lloyd’s judgment is in its explication of the required nexus between act and business which was plainly missing in Ch’ng Poh. He construed the requirement that the agent’s act or forbearance should be “in relation to his principal's affairs or business” as a requirement that the act or forbearance be “aimed at” and intended to “influence or affect” the principal's affairs. G. Question 1(ii): The Court of Appeal and Ch’ng Poh 41. Although the Court of Appeal referred extensively to Ch’ng Poh, I do not, with respect, think that that authority was correctly analysed and applied. To take Cheung JA’s judgment first, his Lordship, as we have seen, adopted an extremely wide interpretation of the relevant phrase, holding that it was enough simply to prove that Chan’s show “related to TVB programmes” in some undefined way. This is inconsistent with Ch’ng Poh in that it fails to assign to that phrase the restrictive function referred to above. 42. It appears that Cheung JA may have adopted his wide interpretation because he was not persuaded that Lord Lloyd had meant the words to operate restrictively. Cheung JA stated: “The words ‘influence’, ‘affect’ and ‘aimed at’ do not appear in section 9. The Privy Council used these words merely because this would facilitate explanation of the causal relationship between the act of the offending agent and his principal’s business. The Court used these words for the purpose of emphasizing the need for the prosecution to prove such a causal relationship in a given case, but this does not mean that, apart from being related to the principal’s business, the agent’s act must also have been deliberately intended to influence, affect or be aimed at the principal’s business. Put another way, these words do not connote a positive or negative impact of the agent’s act on the principal’s business or any good or bad consequences of such act upon the principal’s business. I think that this is the principle which the courts should apply when considering the agent’s intention.”[29] 43. Two main points are made in that paragraph, the important proposition being that the words “influence”, “affect” and “aimed at” do not appear in section 9. That is certainly true and it is correct that in the relevant phrase, words with a general, non-specific meaning – “in relation to his principal's affairs or business” – are used. However, I am unable to agree with Cheung JA’s statement that “this does not mean that, apart from being related to the principal’s business, the agent’s act must also have been deliberately intended to influence, affect or be aimed at the principal’s business” in so far as his Lordship may have intended to question the correctness of Lord Lloyd’s construction. 44. Lord Lloyd elaborated upon the meaning of those words by reference to the mischief of the legislation (which is further discussed below[30]) as indicated by the examples he gave. In so doing, he was reflecting the Court’s duty to give effect to the legislative intention when construing general words, as explained by Lord Millett NPJ in Ho Choi Wan v Hong Kong Housing Authority:[31] “In construing the language of a statute, it is the task of the court to ascertain and give effect to the intention of the legislature. But that does not mean that the Court must give a literal construction to every word or phrase in the statute. As Lord Bingham of Cornhill said in R (Quintavalle) v. Secretary of State for Health[2003] 2 AC 687 at p.695: ‘The court’s task, within the permissible bounds of interpretation, is to give effect to Parliament’s purpose.’ Whenever the legislature enacts or amends an Ordinance, its purpose is to remedy a perceived mischief or defect in the pre-existing legislation. It is to be presumed that it did not intend the statute to go wider in its operation than is necessary to remedy the mischief or defect in question. If it has inadvertently employed general words which, if given their fullest effect, are wider than necessary, the court not only may but must restrict them by construing them in a narrower sense which, while still falling within the ordinary meaning of the words, gives effect to the legislative intent but does not go beyond it, still less frustrate it.” 45. I am less clear about the meaning of Cheung JA’s second point regarding a “causal relationship.” The suggestion that Lord Lloyd was “emphasizing the need for the prosecution to prove [some] causal relationship” is puzzling especially since it is juxtaposed with the statement that the words in question “do not connote a positive or negative impact of the agent’s act on the principal’s business”. If this is a reference to the rule laid down by POBO section 11 that inability or failure to carry out the corrupt purpose is not a defence, then it is uncontroversial. Otherwise, its relevance is not evident. 46. Turning to the joint judgment, it held, as we have seen, that the appellants’ conduct was caught by the relevant phrase because TVB’s enthusiasm for having Chan’s segment as part of the Countdown show to achieve higher audience ratings meant that his participation was an act “in relation to his principal's affairs or business”. That is not an approach consistent with Ch’ng Poh. It appears that in arriving at its decision, the joint judgment sought to distinguish the Privy Council’s decision. First, it treats Ch’ng Poh as authority merely for the proposition that where an “agent’s act has nothing to do with his principal’s affairs or goes beyond the agent’s official powers and duties and is not authorized by his principal” no section 9 offence is committed.[32] This was certainly the position on the facts of Ch’ng Poh[33] and may be said to be its ratio decidendi. However,as noted above,[34] the importance of Lord Lloyd’s judgment lies in its elaboration of the phrase currently under discussion. 47. The joint judgment seeks next to distinguish Lord Lloyd’s explication by asserting that: “The intention with which Ch’ng Poh was concerned is the intention in relation to the offering of the bribe, not the intention of the agent who accepts the advantage. This point is not difficult to understand. The person offering the bribe will not give an advantage to the agent for no reason. He certainly wants the agent who has accepted the advantage to do certain acts which will influence or affect his principal and which will benefit him. It is possible that an agent accepts an advantage solely out of greed, with no intention to actually influence or affect his principal’s affairs by doing his act, but it does not follow that he has not committed the offence under section 9(1)(a) of the Prevention of Bribery Ordinance.”[35] 48. In Ch’ng Poh, Lord Lloyd was analysing the position from the point of view of the offeror, giving hypothetical examples involving Ch’ng Poh offering a bribe to Mr A. But his Lordship was not suggesting that the need to establish the relationship in question only arises in the variant of the offence involving the offering of a bribe. Lord Lloyd stated generally that “the act done (or not done) by the agent must be an act done or not done ‘in relation to his principal's affairs’” and that it was “an essential ingredient of the offence under s.9 that the action or forbearance of the agent should be aimed at the principal”.[36] The section itself employs the same restrictive phrase in both subsections, dealing first with the variant involving an agent who solicits or accepts the advantage and secondly with the variant involving a person who offers the advantage. 49. But even on the narrow view of Ch’ng Poh taken by the joint judgment, the question which had to be – but was not – posed was whether Tseng, acting on behalf of IEAP and OC, in offering remuneration of $112,000 to Chan as an appearance fee, intended his performance in the “Be My Guest” segment to be an act aimed at and intended to influence or affect TVB’s business. I find it impossible to see how the answer could be in the affirmative. Tseng’s position was in principle no different from that of OC which had provided the fee to secure Chan’s performance as OC’s guest in a show promoting its shopping mall. It cannot plausibly be suggested that OC committed a section 9 offence involving TVB’s affairs or business. 50. Properly applying Ch’ng Poh,the joint judgment should also have asked whether, in accepting the fee and doing the show, Chan knew or believed that his fee had been provided by Tseng as an inducement or reward for appearing on the show as an act aimed at TVB’s affairs or business and intended to influence or affect the same. As discussed above[37], this represents the agent’s mens rea requirement in a section 9 offence involving solicitation or acceptance. Again, I can see no basis for an affirmative answer. 51. It follows, in my view, that the Court of Appeal misconstrued section 9 and applied the wrong test for determining whether the necessary relationship between the agent’s act or forbearance and the principal’s affairs or business was proved. On this basis alone, the Court of Appeal’s decision to reverse the trial Judge’s acquittals cannot stand. However, one other aspect of the Court of Appeal’s decision, also bearing on that relationship, is of general importance and ought to be addressed. This involves the question whether, on the true construction of the section, the contemplated act or forbearance by the agent has to be adverse to the principal’s interests. H. The need for conduct adverse to the principal’s interests 52. As noted above,[38] the joint judgment was not troubled by the fact that Chan’s appearance on the show would only have beneficial consequences for TVB and involved no conflict of interest or other detriment to the principal’s interests. It took the view that “[There] is no requirement that the agent’s act has to cause prejudice to his principal’s affairs or business” and that “Ch’ng Poh did not say that the ‘influence’ or ‘effect’ must be adverse”, the term ‘aimed at’ not carrying a negative meaning.[39] 53. I respectfully disagree. In my view, on a proper construction of section 9 in the light of its mischief, the induced or rewarded conduct “aimed at the principal’s business” has to be conduct which subverts the integrity of the agency relationship to the detriment of the principal’s interests. It is not the legislative intent to stigmatize as criminal, conduct of an agent which is beneficial to and congruent with the interests of the principal (as in the present case). 54. I hasten to add that the prejudice to the principal’s interests to which I refer does not need to involve immediate or tangible economic loss to the principal or benefit to the agent at the principal’s expense. Of course, it will frequently (or indeed, usually) do so, but that is not essential on the true construction of the section. The agent may, for instance, be induced to act prejudicially to the reputation of the principal’s business or to divulge confidential information without any immediately palpable loss to the principal. Where the offering, solicitation or acceptance of an advantage is of such a nature as to undermine the integrity of the agency relationship, that is, of such a nature as to injure the relationship of trust and loyalty that a principal is entitled to expect from his agent, this in itself is capable of constituting the necessary detriment. This reflects increasing recognition in the field of employment law, of the importance of the reciprocal duties of trust and confidence in the relationship of employer and employee – perhaps the most common agency relationship – with the evolution of remedies for damage to that relationship.[40] 55. Corrupt transactions with agents which undermine that relationship of trust and loyalty may well give rise to serious reputational damage to the principal even if no direct economic detriment is suffered. This may be illustrated by some hypothetical examples: (a) An employee, A, is a manager with authority to select subordinate employees in his department for promotion. He accepts gifts from a subordinate’s parents who make it plain that they expect their daughter to get promotion, as she does. The employer suffers no detriment (if she is up to the job) but the corrupt transaction, if revealed, will damage its reputation with its other employees. (b) An employee, B, is in charge of a confidential tendering process. Shortly before the closing date B accepts a bribe from X to reveal the lowest tender price so far submitted (say $900,000), thus enabling X to submit a successful tender of $850,000. B has apparently saved his employer $50,000 (if X does the job properly) but the breach of confidence has impaired the relationship of trust and loyalty and the corrupt transaction, if revealed, will damage the employer’s reputation with its regular suppliers. (c) An employee, C, runs the department selling electronic toys in a large store. At Christmas there is intense demand, exceeding supply for a particular toy. C takes a bribe of $500 from a customer to jump the queue on the waiting list. The store suffers no financial loss but the corrupt transaction, if revealed, would damage the store’s reputation with its regular customers. H.1 The mischief of the Ordinance and of section 9 56. At the risk of stating the obvious, the object of the POBO is the suppression of bribery and corruption. The long title makes this clear[41] and the purpose of the legislation has been acknowledged in many reported cases.[42] In Ch’ng Poh, Lord Lloyd noted that “section 9(1)(a) criminalises corrupt transactions with agents ...”[43] In the example he gave of a case which would fall within the section, he spoke of Ch’ng Poh hypothetically bribing Mr A “to secure him a benefit at X & Co’s expense”.[44] 57. The respondent sought to make something of the fact that the word “corruptly”, used in the equivalent provision previously in force,[45] has been removed from the current Ordinance. However, its removal obviously does not change the mischief at which the Ordinance is aimed. In a debate on the Bribery Bill 1970, Mr Oswald Cheung, a Legislative Councillor, expressed doubts as to removal of the word and suggested an amendment to restore it.[46] The Attorney-General responded that it was removed lest inclusion of a reference to corruption “would oblige the Crown, before an accused had a case to answer, to establish that the soliciting or acceptance of a bribe was attributable to a corrupt motive”, experience showing that this had caused difficulties.[47] He went on to explain that, as drafted, “the Crown will need to prove only a payment to the public servant, or agent, or other person. It will then be for the accused to show that he received it for reasons which are unconnected with bribery...” 58. With respect, it was an over-simplification for the Attorney-General to suggest that the Crown would need “to prove only a payment”. As is evident from the structure and elements of the section 9 offence discussed in Section H.2 below, while the need to prove a corrupt motive was avoided by removing a reference to corruption in the wording, the approach adopted involves creating offences requiring proof of actual or proposed transactions involving particular classes of defendants (including agents in the private sector) which are of such a nature as to savour implicitly of corruption. Thus proof of a payment (or an offer or solicitation) meeting the conditions defined by section 9 implicitly establishes a corrupt transaction, subject to the defences of lawful authority and reasonable excuse. H.2 The structure of section 9 59. As Li CJ stated in HKSAR v Cheung Kwun Yin,[48]the purpose of a statutory provision may be evident from the provision itself. The structure and elements of the section 9 offence give a strong indication of the legislative intent. Thus, the section concerns transactions between third persons and agents who have been entrusted with power to act on their principals’ behalf. It focuses on an advantage solicited or accepted by, or offered to, the agent as an inducement for him to act or forbear to act in some way in relation to his principal’s affairs or business. If the agent were duly acting in the ordinary course of his principal’s business, one would expect no such inducement to enter the picture. The situation targeted by section 9 is thus evidently one where the agent is being offered or solicits without permission, lawful authority or reasonable excuse, an inducement to do (or forbear from doing) something “in relation to his principal's affairs or business”. It is a situation which is implicitly likely to involve some deviation from his normal duties and is likely to undermine the integrity of the agency relationship. This is reflected in paragraph (b) of each of sections 9(1) and 9(2)[49] which, by focussing on an agent’s “showing or forbearing to show ... favour or disfavour to any person in relation to his principal’s affairs or business” as the basis of guilt, indicate that section 9 targets transactions tending to undermine the integrity of the agency relationship. 60. As Blair-Kerr J, in R v R E Low,[50] put it in relation to an earlier version of section 9:[51] “It is the inducing influence of the gift in relation to the recipient's performance or non-performance of his duty which is the essence of the offence.” H.3 Fung Hok Cheung 61. In rejecting the argument that the “influence” or “effect” must be adverse, the Court of Appeal relied on HKSAR v Fung Hok Cheung.[52] The facts were described as follows: “... the applicant had access to a corrupt jockey, one Munce, who was prepared to provide tips as to the prospects of success of horses in respect of which he had peculiar information as a result of having ridden them at the request of various trainers; the applicant would pass this information on to PW1 [an ICAC undercover agent] who would place bets in his own name but on Munce's behalf; if a bet was successful a proportion of the winnings would be paid over to Munce, via the applicant who would retain a share, whereas if it was unsuccessful the loss would be borne by, ostensibly, PW1.”[53] 62. The jockey was held to be the agent of the trainers for whom he was riding and Wright J, giving judgment for the Court of Appeal, described the case as one in which the agent “surreptitiously provides confidential information concerning his employer's business to a third party in return for payment”.[54] The applicant was convicted of conspiracy to offer an advantage to an agent, contrary to POBO section 9(2)(a), read together with sections 159A and 159C of the Crimes Ordinance (“CO”).[55] In the passage relied on below, Wright J stated: “The section does not require, nor should the phrase ‘aimed at’ in Commissioner of the Independent Commission Against Corruption v Ch’ng Poh be read as importing, any direct adverse proprietary consequence to the principal's affairs or business. What it requires is that the person offering the inducement intended that the act to be carried out by the agent itself in some way would influence or affect the affairs or business of the principal.”[56] 63. His Lordship added: “The Deputy Judge was fully justified in finding on the evidence before her that the use by the applicant, for financial gain, of the confidential information obtained by Munce as jockey for and agent of the trainer, potentially would affect the trainer's reputation. It requires nothing more than commonsense to appreciate that such a situation would affect the trainer's affairs or business, from which it is self-evident that Munce's conduct was an act in relation to his principal's affairs or business and that the applicant intended that consequence.”[57] 64. It is clear from these two paragraphs that Fung Hok Cheung is not authority for the proposition that a person can be guilty of a section 9 offence even where the contemplated act or forbearance has no potentially adverse impact on the principal’s interests. Wright J was stating that there was no need to show any “any direct adverse proprietary consequence to the principal's affairs or business”. In the next paragraph he endorsed the trial judge’s finding that Munce’s acts potentially damaged the trainer’s reputation and thus would affect his affairs or business. Such reputational damage is not a direct “proprietary” or “economic” consequence, but it is plainly a consequence inimical to the integrity of the agency relationship between Munce and the trainer. It might moreover lead to indirect economic harm to the trainer’s business. 65. I pause to note that in the leading textbook in this jurisdiction on the subject,[58] the learned author asserts the need for prejudice to the principal’s interests: “Section 9 is the only offence in the POBO dedicated solely to corruption in the private sector but it is limited in its scope by the requirement that there exists a principal/agent relationship and that the principal’s interests are prejudiced or at risk of being prejudiced by the secret actions either of his corrupt agent or by a person with whom he is having dealings who seeks to corrupt his agent. This is the traditional narrow view of corruption which is typically found in anti-corruption legislation and is even reflected in Article 21 of the United Nations Convention Against Corruption (UNCAC) which proscribes the offering solicitation or acceptance of undue advantages to or by the employees of private sector entitles “in order that he or she, in breach of his or her duties, act or refrain from acting”. Thus the focus of the UNCAC and other similar offences is on conduct which undermines the integrity of the agent in his relationship with his principal ...” I. Conclusions on section 9 summarised 66. There are variants of section 9 offences differing according to whether they are committed by the agent soliciting or accepting the advantage or by the person offering the same; and whether the act or forbearance is contemplated or already performed. 67. The mens rea requirements of knowledge, belief and intention adhere in their appropriately adapted forms to the essential actus reus ingredients of each of these variants, applied independently to each person allegedly involved in the transaction. 68. The reference in section 9 to the agent’s act or forbearance being “in relation to his principal's affairs or business” is properly construed to mean that the agent’s act or forbearance must be aimed at and intended to influence or affect the principal’s affairs or business in a manner that undermines the integrity of the agency relationship by injuring the bond of trust and loyalty between principal and agent. 69. In offering cases, the prosecution must prove that the offeror intended that the advantage would be accepted as an inducement or reward for or otherwise on account of the agent’s act or forbearance which is aimed at and intended to influence or affect the principal’s affairs or business. 70. In soliciting or accepting cases, the prosecution must prove that the accused agent knew or believed that the advantage was provided as an inducement or reward or otherwise on account of his actual or contemplated act or forbearance as conduct aimed at or intended to influence or affect the principal’s affairs or business. J. Question 2: reasonable excuse 71. Section 9 creates an offence based on conduct performed without lawful authority or reasonable excuse and section 24 lays it down that these are matters of defence which the accused bears the onus of proving: “In any proceedings against a person for an offence under this Ordinance, the burden of proving a defence of lawful authority or reasonable excuse shall lie upon the accused.” 72. In HKSAR v Ho Loy,[59] Fok PJ pointed out that a defence of reasonable excuse involves (i) identifying the matters relied on as constituting the excuse; (ii) determining the genuineness of the excuse; and (iii) assessing “... whether that excuse is reasonable, which the court will do on an objective standard depending on the particular facts of the case”. 73. An issue as to reasonable excuse only arises if there is proof of conduct which prima facie constitutes the section 9 offence so that an assessment of the facts relied on as an excuse is required. Since I have concluded that the appellants do not fall within section 9, there is no realistic basis for assessing the defence in the present case. The prosecution has not proved that they respectively offered and accepted an advantage to induce or reward conduct by Chan aimed at TVB which prima facie undermined the integrity of the agency relationship to TVB’s detriment. It is thus not a meaningful exercise to search for and assess the reasonableness of matters relied on to excuse a state of affairs that never came into existence. This applies, for instance, to Chan’s reliance on his belief that he effectively had TVB’s permission to perform versus the prosecution’s assertion that permission would have been refused. What divided the parties on that issue was whether Chan’s act could be regarded as aimed at and intended to influence or affect TVB’s business – questions bearing on prima facie guilt rather than on reasonable excuse. I shall accordingly confine myself to a discussion of one question of principle relating to reasonable excuse that was canvassed at the hearing. K. Conspiracy, section 24 and the burden of proof 74. As noted above, section 24 provides that the “burden of proving a defence of lawful authority or reasonable excuse shall lie upon the accused”. If that section is engaged and a constitutional challenge mounted on the basis that it infringes the presumption of innocence, a proportionality analysis may be required. I do not, however, intend to enter into that discussion. 75. The point of principle which I wish to address arises out of the Court of Appeal’s direction requiring the Judge to find the appellants guilty solely on the charge of conspiracy for an agent to accept an advantage.[60] The question is whether, in cases of conspiracy, section 24 is engaged so that a reverse onus to prove lawful authority or reasonable excuse is placed on the accused. 76. In HKSAR v Ng Po On,[61] the effect of section 24 was considered in relation to POBO section 14 which made it an offence to fail “without reasonable excuse” to comply with a notice requiring the person served to furnish information relevant to an ICAC investigation. The prosecution argued that section 24 made it clear that reasonable excuse was a matter of defence to be proved by the respondent on the balance of probabilities. This Court held that on a proportionality analysis, the validity of the section 14 offence could be upheld as consistent with the presumption of innocence provided that section 24 was read down to impose merely an evidential burden on the person failing to comply with the notice to raise the issue of reasonable excuse while the prosecution bore throughout the persuasive burden of proving non-compliance and of negating reasonable excuse. 77. In connection with inchoate offences including the offence of conspiracy, I stated:[62] “The precise offence charged has to be borne in mind. Thus, if a defendant is charged with an inchoate offence of conspiracy, attempt or incitement relating to a statutory offence, it does not matter that the substantive statutory offence may, on construction, be found to contain a reverse onus provision. The inchoate offence exists at common law and, in accordance with the general common law rule, does not involve any reverse onus. This is unaffected by s.94A.[63] Thus, in HKSAR v Lam Yuk Fai (2006) 9 HKCFAR 281, §33, a count alleging a conspiracy to commit the statutory offence of transferring a passport to another person without reasonable excuse was held not to involve the imposition of any persuasive burden on the accused and the presumption of innocence was not engaged. Lord Woolf NPJ stated: As Count 3 alleges a conspiracy, the task of the prosecution was to prove in the normal way the nature of the conspiracy; namely that (a) there was an agreement alleged between the appellant and Philip Chu and; (b) the purpose of the agreement, which on the case for the prosecution, was that the passport should be used for an unlawful purpose and so without reasonable excuse (see for example Yip Chiu Cheung v R [1995] 1 AC 111). This conspiracy could not either under S.94A or at common law give rise to any reverse burden. In view of the ingredients of the offence of conspiracy it is unlikely that any charge of conspiracy should give rise to any burden being placed on a defendant.” 78. It may also be noted that CO section 159A(2),[64] which places the offence of conspiracy on a statutory footing, retains the common law approach by providing that even where the substantive offence is one of strict liability in relation to any factual ingredient, a conspiracy to commit that offence nevertheless requires proof of intention or knowledge in relation to that fact or circumstance. 79. It was however made clear in Ng Po On,[65] that the Court was concerned with section 24 exclusively as read in conjunction with, and affecting the meaning of, section 14(4). It was observed that section 24 is also relevant to other provisions of the POBO which involve “reasonable excuse”, including section 9, and noted that “[its] interaction with such other provisions raises separate considerations which fall outside the scope of this judgment”. 80. Mr Caplan QC submitted that, by virtue of POBO section 12A(1), the present case is indeed one where section 24 operates differently. Section 12A(1) provides: “Any person convicted of conspiracy to commit an offence under this Part shall be dealt with and punished in like manner as if convicted of such offence and any rules of evidence which apply with respect to the proof of any such offence shall apply in like manner to the proof of conspiracy to commit such offence.” 81. The argument is that section 24 is a rule of evidence which applies with respect to the proof of a section 9 offence so that section 12A(1) causes it to operate in conspiracy cases just as it does to proof of substantive section 9 offences. 82. In response, Mr David Perry QC[66] relies on CO section 159A(1) which materially provides: “Subject to the following provisions of this Part, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, ... (a) will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement ... he is guilty of conspiracy to commit the offence or offences in question.” 83. Mr Perry QC’s argument runs as follows: (a) The words “without ... reasonable excuse” appear in the body of the offence-creating provisions of section 9 and form an element of the offence which the prosecution has the burden of proving in the usual way, negating reasonable excuse. (b) To prove a conspiracy to commit a section 9 offence, section 159A(1)(a) makes it necessary as a matter of substantive criminal law for the prosecution to prove that pursuit of the course of conduct agreed to by the alleged conspirators would necessarily amount to or involve the commission of a section 9 offence by at least one of them. (c) If, contrary to Tseng’s submission, POBO section 24, read with POBO section 12A(1), has the effect of reversing the onus for the purposes of conspiracy, it would mean, inconsistently with CO section 159A(1)(a), that the prosecution would not have to prove that pursuit of the alleged conspiratorial agreement would necessarily result in commission of the section 9 offence since it would be relieved from having to prove that pursuit of the agreement would not involve conduct exonerated by a reasonable excuse. (d) Mr Perry QC argued that this could not be the intended effect of section 24 since that section is concerned with rules of evidence and is not intended to modify the substantive law defining the elements of criminal conspiracy as laid down by CO section 159A(1)(a). Accordingly, he submitted that section 24 does not apply to the conspiracy charge and the prosecution’s failure to negate reasonable excuse presents another reason for allowing the appeal. 84. I have difficulty accepting Mr Perry QC’s argument. Its premise is that the words “without reasonable excuse” constitute an element of the offence to be proved by the prosecution. But if section 24 is engaged, it clearly stipulates that “reasonable excuse” is a matter of defence and expressly reverses the onus. Thus an argument founded on the premise that reasonable excuse is not a matter of defence but an ingredient of the offence as the basis for contending that section 24 is not engaged appears to beg the question. 85. However, I arrive at the same conclusion, but by a different route. Section 24 on its face only relates to “any proceedings against a person for an offence under this Ordinance”. A conspiracy to commit a section 9 offence is not an offence under the POBO. It is either a common law offence or, having been put on a statutory footing, an offence contrary to CO section 159A, so that on its face, section 24 does not apply to such conspiracies. 86. To make section 24 apply, the prosecution has to rely on section 12A(1), arguing that it makes section 24’s reverse onus, treated as a “rule of evidence” applicable to the proof of conspiracies to commit section 9 offences in like manner as it applies to proving the substantive offence. 87. But in my view, on its true construction, section 12A(1) is inapplicable to section 24. Section 12A(1) extends “rules of evidence which apply with respect to the proof of any ... offence” [67] under Part II of POBO (including section 9) to conspiracies to commit such offences. It does not cover rules of evidence (assuming a reverse onus provision to be such a rule) regarding available defences. Section 24 stipulates how the defences of lawful authority and reasonable excuse are to be established. It is not concerned with the proof of any offence. 88. The position is therefore as stated in Ng Po On set out above. To prove conspiracy, the prosecution cannot rely on section 12A or section 24 but must, in accordance with the usual common law rule and section 159A(2), discharge the burden of proving that pursuit by the alleged conspirators of their agreement would necessarily result in the commission of a section 9 offence without any (lawful authority or) reasonable excuse availing the accused. 89. Mr Caplan QC acknowledged that if the reverse onus provision did not avail the prosecution, the conspiracy conviction directed to be entered by the Court of Appeal could not stand since reasonable excuse had not been negated by the prosecution. However, he invited the Court in such event to exercise its discretion[68] to order that there be substituted in respect of each appellant, a conviction on the respective alternative charges of offering and accepting an advantage which, he submitted, are clearly within the ambit of section 24. 90. Since I have in any event held that liability cannot be established on the substantive charges because the appellants’ conduct was not caught by section 9, there is no question of any such substitution. L. Disposal of the appeals 91. For the foregoing reasons, I would allow both appeals and quash the appellants’ convictions. I would direct that any submissions as to costs should be lodged within 21 days of the date of the handing down of this judgment with any submissions in reply to be lodged within 14 days thereafter. Mr Justice Tang PJ: Introduction 92. I have had the advantage of reading Ribeiro PJ’s judgment in draft and agree that the appeals should be allowed. The background and facts have been stated by Ribeiro PJ and I gratefully adopt them. However, I am of the view that Chan’s participation in the 2010 countdown edition of “Be My Guest” was an act “in relation to his principal’s affairs or business” but that he had a reasonable excuse to accept OC’s payment within the meaning of s 9(1)(a) of the Prevention of Bribery Ordinance Cap 201 (“Cap 201”). 93. I will state the essential facts which, in my view, support my view that he had a reasonable excuse. 94. It is not disputed that OC and TVB agreed that, a live, staged edition of “Be My Guest” should form part of the countdown programme. Mr Caplan QC accepted that TVB knew that Chan would appear as a guest of OC. The learned trial judge said it would be naive to think that Chan would have done so gratuitously. With respect, I agree. Not only is this plain common sense, the evidence was that OC had to procure Chan’s attendance through Tseng because as the learned trial judge said “everybody knew that to invite (Chan) to take up a job had to proceed through (Tseng)”. Tseng, and his company, IEAP “acted as Chan’s agent in respect of his outside commercial engagements”.[69] The Court of Appeal said: “14. … For this reason they approached Tseng, and later Olympian City concluded a contract with him (on behalf of IEAP), under which he was to procure Chan and Lai Yiu-cheung [Lai][70] to perform in the additional ‘Be My Guest’ show, and Olympian City was to pay IEAP $160,000 as consideration.”[71] “It was agreed that they would wear stickers promoting Olympian City, a requirement that did not apply to the artistes supplied by TVB.”[72] 95. On these facts, I am satisfied that whether Chan had the evidential burden or persuasive burden to prove reasonable excuse,[73] the burden has been discharged.[74] 96. What is a reasonable excuse “depends not only on the circumstances of the individual case but also on the purpose of the provision to which the defence of ‘reasonable excuse’ is an exception.”[75] In order to determine the ambit of the defence of reasonable excuse one needs to take a view on the offence created by s 9.[76] Section 9(1) provides: “Any agent who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his - (a) doing or forbearing to do, or having done or forborne to do, any act in relation to his principal’s affairs or business; or (b) showing or forbearing to show, or having shown or forborne to show, favour or disfavour to any person in relation to his principal’s affairs or business. Shall be guilty of an offence.”[77] 97. I would just note[78] that s 9(4) and (5) provide that if the advantage was solicited or accepted with the permission of the principal which complied with s 9(5), neither the agent nor the person who offered the advantage would be guilty of an offence under s 9(1) or (2). 98. To constitute an offence under s 9, there must be a payment (without lawful authority or reasonable excuse) as an inducement to or reward for or otherwise on account of the agent doing or forbearing to do any act in relation to his principal’s affairs or business (the forbidden purpose). In the present case it was not disputed that the payment to Chan was made as an inducement to or reward for him to take part in the countdown edition of “Be My Guest” (Chan’s performance). What was disputed was whether the performance was in relation to TVB’s affairs or business and if so, whether he had a reasonable excuse. 99. Agent is defined to include “a public servant and any person employed by or acting for another”. It was not disputed that Chan was TVB’s agent since he was employed by TVB. TVB was a public body and Chan as its General Manager (Broadcasting) was a public servant.[79] As the learned trial judge pointed out, Chan could have been prosecuted under s 4. However, the prosecution relied on s 9 which covered dealings with agents as well as public servants. Section 4(2) makes it an offence by a public servant to solicit or accept any advantage as an inducement to or reward for or otherwise on account of his “performing … or abstained from performing, any act in his capacity as a public servant”.[80] However, s 9(1)(a) does not require that the agent acted or forborne from acting in his capacity as agent. It is engaged if the act or forbearance was “in relation to his principal’s affairs or business”.[81] The prosecution case was that Chan’s performance was an act in relation to TVB’s affairs or business. Ch’ng Poh 100. Lord Lloyd of Berwick said in Commissioner of ICAC v Ch’ng Poh [1997] HKLRD 652 at 657, a decision of the Privy Council on appeal from Hong Kong: “… the alternative words serve much the same purpose. They are clearly intended to be restrictive. It is not enough that the recipient of the bribe should be an agent in fact.” 101. Ch’ng Poh arose out of an application to quash a search warrant under s 10B of the ICAC Ordinance Cap 204 which was issued based on the commission of an offence under s 9. Briefly, a witness, Reid, had been bribed by Mr A, a solicitor, to made a false affidavit favouring Ch’ng Poh who was appealing his conviction. Mr A was a partner in the firm which acted in Ch’ng Poh’s appeal. Ch’ng Poh provided the money for the bribe. 102. Lord Lloyd who delivered the advice of the Privy Council was of the view that since the case being made by ICAC was that Reid had been bribed by Mr A: “… s.9(1)(a) of the Bribery Ordinance was simply not engaged. As Litton V-P put it: Section 9(1)(a) criminalises corrupt transactions with agents: not dishonest acts by agents.”[82] 103. However, it was argued on behalf of the ICAC in the Privy Council that the argument had been misunderstood and that its case was that Mr A must have received a bribe to do an act in relation to X & Co’s business. Their lordships did not accept that was the case relied on in the courts below but in light of it Lord Lloyd said of the words “in relation to his principal’s affairs” at 657: “ … mean that, for the section to apply, the person offering the bribe, must have intended the act or forbearance of the agent to influence or affect the principal’s affairs. Accordingly s.9 would apply if Ch’ng Poh had bribed Mr A to secure him a benefit at X & Co’s expense, for example, to arrange a reduction in X & Co’s ordinary professional fees; or if X & Co were induced to act in a way in which they would not otherwise have acted. Thus it is an essential ingredient of the offence under s.9 that the action or forbearance of the agent should be aimed at the principal. If it is sufficient for the purposes of the person offering the bribe that the agent should act on his own without involving his principal, then, whatever other offence may have been committed, it is not a corrupt transaction with an agent for the purposes of s.9. If the facts put before the magistrate had been that Ch’ng Poh offered Mr A a bribe in order to secure the filing by X & Co of an affidavit which they both knew to be false, then a case might just have been made out. But as already mentioned, that is not a fair reading, or indeed a possible reading, of the information sworn by Mr Osborn.” Section 9(1)(a) 104. I will consider s 9(1)(a) first and return to Ch’ng Poh later. Section 9(1) and (2) was first enacted as s 4 of the Prevention of Corruption Ordinance Cap 215 (“Cap 215”) in 1948.[83] Section 4 of Cap 201 was s 3 in Cap 215. When enacted, those sections required that the advantage be offered or accepted corruptly. As Bribery and Corruption Law in Hong Kong 3rd edition by Ian McWalters SC (as McWalters JA then was), explained the word “corruptly” was understood to require “purposely doing an act which the law forbids as tending to corrupt”.[84] 105. When Cap 201 was enacted in 1970 and ss 3 and 4 of Cap 215 were replaced by s 9 and s 4 of Cap 201 the word “corruptly” was removed and substituted by “without lawful authority and reasonable excuse”. 106. The reason for the change was explained by the Attorney General[85] in response to the remarks by Hon Mr Oswald Cheung that he was “staggered” that “the word corruption” was not used in the proposed Cap 201. The Attorney said the word was not used: “… since it would oblige the Crown, before an accused had a case to answer, to establish that the soliciting or acceptance of a bribe was attributable to a corrupt motive. Unfortunately, past experience has been that this is difficult, and many accused persons have not been charged, and some have been charged but acquitted, because the prosecution was not able to establish that a payment of money in suspicious circumstances was corrupt but had to leave it to the court to draw an inference of corruption, which it was sometimes reluctant to do.”[86] 107. The mischief against which the amendments were made is clear, namely, that corrupt motive was not to be an essential element of the offences under s 4 or s 9 of Cap 201. The Attorney General went on to say: “As the bill is now drafted, the Crown will need to prove only a payment to the public servant, or agent, or other person.” 108. Section 9 is straightforward. It makes it an offence for an agent to solicit or accept any advantage as an inducement to or reward for or otherwise on account of his doing or forbearing to do “any act in relation to his principal’s affairs or business” in the absence of lawful authority or reasonable excuse.[87] In other words, if an advantage was solicited or accepted in respect of an act or forbearance which related to the principal’s affairs or business, absent lawful authority or reasonable excuse or permission under s 9(4) and (5), an offence is committed. The deliberate removal of the word “corruptly” is significant and I do not believe s 9 requires that any payment for a forbidden purpose must be made with a corrupt motive. With respect, the Attorney General was exactly right when he said: “As the bill is now drafted, the Crown will need to prove only a payment to the public servant, or agent, or other person.” Influence or Affect 109. Ch’ng Poh is authority that for an act or forbearance to relate to the principal’s affairs or business it must have been intended to “influence or affect the principal’s affairs.” And it would not so relate if the agent “should act on his own without involving his principal”. With respect, I agree. Thus, a moonlighting employee would not fall foul of s 9 even if moonlighting was strictly forbidden by his contract of employment.[88] But Lord Lloyd went on to say: “Thus it is an essential ingredient of the offence under s.9 that the action or forbearance of the agent should be aimed at the principal.”[89] Aimed At 110. It is not clear what if anything “aimed at the principal” additionally requires. The expression has been considered by the English Court of Appeal in R v Majeed and Another [2013] 1 WLR 1041 when they considered s 1 of the 1906 Act on which s 9 of Cap 201 was based. The only material difference between s 1 of the 1906 Act and s 9 is that section 1 had not replaced “corruptly” with “without lawful authority or reasonable excuse.” 111. Majeed was concerned with cricketers who were bribed to play in a certain way to facilitate betting on cricket matches where one could bet not only on the outcome but also, for example, “on individual events during the course of an over or passage of play”.[90] One of the arguments relied on was that the actions of the cricketers on the field were not aimed at their principals, the Pakistan Cricket Board or the Essex Cricket Club (“the boards”). Relying on the passage in Ch’ng Poh quoted above,[91] counsel submitted: “The boards did nothing, and nothing was expected of them. The bribes were not intended to and did not influence them in any way. … He suggested that, like the dishonest solicitor, ‘A’, in the Ch’ng Poh case, the way in which [the cricketers performed in their matches], was personal to them. Like the firm in which ‘A’ was a partner, the boards did not and were not expected to do anything at all by way of response or as a reaction to the giving and the acceptance of the bribes.” 112. Lord Judge CJ who delivered the judgment of the Court[92] said: “21. … The problem for [counsel] is that [the passage] was addressing the stark reality that ‘A’s’ firm was remote from the bribes paid by Ch’ng Poh, and wholly unaffected by them. They were not paid to ‘A’ for any purposes associated, directly or indirectly, with the business or affairs of his firm. In fact they were not paid to ‘A’ at all. He simply organised their onward transmission to the intended recipients. It is however clear from the judgment that the transaction would have fallen within the ambit of the legislation if the bribes had been accepted by ‘A’ with the intention or for the purpose of influencing or affecting the affairs of the firm. This is why Lord Lloyd went on to acknowledge that if the bribe had been offered to ‘A’ by Ch’ng Poh in a way which would have led the firm to file an affidavit which both ‘A’ and Ch’ng Poh knew to be false, the warrant, as issued, might have been appropriate. This would have been because, although Lord Lloyd did not need to spell it out, the bribe would then have involved the firm, albeit wholly innocently on the part of the firm, in the corrupt activity. 22. We cannot find anything in the judgment in the Ch’ng Poh case … which lends support to [counsel]’s argument, and if it did, the submission would be wholly inconsistent with the clear statutory language. 23. … looking at the realities of the situation, there could on the evidence have been nothing closer to the heart of the affairs or business of a cricket board than the performance of the players selected by them to represent their and his country, or their and his county.” 113. With respect, like the English Court of Appeal, I believe the language of s 9 does not require that the act or forbearance should, apart from influencing or affecting the principal’s affairs or business thus involving them be also intentionally directly or indirectly aimed at the principal though one would expect that in many cases they would do so. Nor do I understand Lord Lloyd to have said otherwise. 114. So the question here is whether Chan’s performance related to TVB’s affairs or business. With respect, I agree with Ribeiro PJ’s statement of the elements and mens rea at paras 20 and 21 of his judgment. However, it was TVB’s countdown which was televised by TVB and the “Be My Guest” portion was part of the programme. So TVB was very much involved. Suppose TVB had requested Chan to take part in this edition of “Be My Guest” and Chan had agreed. Undoubtedly his participation would have related to TVB’s affairs or business. I am not sure the fact that he had appeared as OC’s guest and paid by them to do so would necessarily result in his not being involved in the business or affairs of TVB. Morgan 115. DPP v Morgan [1970] 3 All ER 1053 was also concerned with the interpretation of s 1 of the 1906 Act, Lord Parker CJ in the Divisional Court[93] was quite satisfied that these words “fall to be widely construed”.[94] Morgan was an employee of Rover’s as well as the convenor of shop stewards. He solicited a bribe from H who worked as a subcontractor for Rover’s who had been blacked by the union, telling H that he could possibly make it easier for H at the management/union meeting by suggesting that there was no objection to H doing the work. Morgan is often cited for the proposition that an agent can have more than one principal. 116. But it decided more than that. It was submitted on behalf of Morgan that: “… if the £25 was obtained as an inducement for doing an act, ie for procuring that there would be no objection by the union to Mr Hurford doing the work, the act was not in relation to Rover’s affairs but in relation to those of the union; that, if the £25 was so obtained, it was not obtained by the appellant as agent of Rover’s but as agent of the union.”[95] 117. Of course, the fact that Morgan was the agent of Rover’s was not to the point unless the act “related to the affairs” of Rover’s as well. Hence, Lord Parker CJ said at page 1057: “The real point is whether, there being an obtaining of money as an inducement for the doing of some other act, that act was to be in relation to his principal’s affairs, namely Rover’s affairs.” (my emphasis) 118. Lord Parker went on to say at pages 1057 to 1058: “ … It is counsel for the appellant’s argument that the words “any act in relation to his principal’s affairs” in s 1(1) must mean in direct relation to his principal’s affairs or, put another way, in relation to matters concerning his principal where he owes a duty as an agent. Read in that way, it can be said that, while the appellant was an agent of Rover’s, nevertheless the act in question was in relation to union affairs albeit against the background of the business that Rover’s carried on. For my part, I am quite satisfied that those words “in relation to his principal’s affairs” fall to be widely construed, as indeed they were in the only case to which the court has been referred, R v Dickinson, R v De Rable,[96] where Pritchard J, in giving the judgment of the Court of Criminal Appeal, said: “In the judgment of the court the words of s 1 of the Act of 1906 are designedly very wide, and it would be undesirable in the extreme to narrow their meaning in the way which would be necessary if the argument on this first point were held to be valid.” It seems to me that the conditions precedent to an offence being proved are present here; the appellant was an agent, and what was done here, albeit it was in relation to the union affairs, was also in relation to his principal’s affairs, namely Rover’s affairs.” 119. So here, the fact that Chan performed as the guest of and was paid exclusively by OC is not a sufficient answer to a charge under s 9 unless Chan’s performance did not also relate to TVB’s affairs or business. I am also of the view that it would be undesirable in the extreme to narrow down the meaning of those words. It is of course a question of fact whether the agent’s act or forbearance relates to the affairs or business of his principal. On the facts of this case, I am of the view that Chan’s performance related to the affairs or business of TVB. Prejudice to the Principal 120. Ribeiro PJ is of the view that the agent’s act or forbearance must be adverse to the principal’s interest,[97] in the sense, I think, that it must “prima facie undermined the integrity of the agency relationship to [the principal’s] detriment.”[98] I regard any advantage solicited or accepted without the knowledge of the principal to have such effect. Naturally, in most cases under s 9, the act or forbearance would be adverse to the principal’s interest which was the reason for the advantage. But as Lawton LJ said in connection with s 1 of the 1906 Act: “The mischief aimed at by the modern statutes dealing with corruption is to prevent agents and public servants being put in positions of temptation.”[99] 121. I do not accept that s 9 requires any other detriment. The acceptance of a payment to favour one of two equal competitors is no less an offence under s 9. Nor would it have made any difference in Morgan, if Morgan’s promised effort would have stopped a crippling strike. 122. Ribeiro PJ said[100] that on the Court of Appeal’s reasoning, namely that Chan’s performance would boost audience rating at no cost to TVB, “Chan’s conduct was wholly in line with and beneficial to TVB’s interest”. In my view such benefits have no bearing on the offence. Fiduciary obligation of agents 123. Cap 201 was enacted to make “further and better provision for the prevention of bribery” and in construing s 9 one naturally has such purpose in mind. Lord Thomas of Cwmgiedd CJ, in R v J(P) and others [2014] 1 WLR 1857[101] said of the 1906 Act that: “14. … It is clear from the materials before us that the mischief at which the provision was principally aimed was criminalising the bribery of agents in commercial transactions, particularly commissions paid to the agent without the knowledge and informed consent of his principal. These were and are commonly referred to as secret commissions.”[102] 124. And that the aim and purpose of the 1906 Act: “17. … was entirely in accordance with the underlying law relating to the fiduciary obligations of agents established in the cases to which we have referred.” 125. One of those cases was Parker v McKenna (1874-75) LR 10 Ch App 96 where James LJ at 124-125 said: “ … I do not think it is necessary, but it appears to me very important, that we should concur in laying down again and again the general principle that in this Court no agent in the course of his agency, in the matter of his agency, can be allowed to make any profit without the knowledge and consent of his principal; that that rule is an inflexible rule, and must be applied inexorably by this Court, which is not entitled, in my judgment, to receive evidence, or suggestion, or argument as to whether the principal did or did not suffer any injury in fact by reason of the dealing of the agent; for the safety of mankind requires that no agent shall be able to put his principal to the danger of such an inquiry as that.” 126. In my opinion, once it is established that an advantage was offered or accepted by an agent for a forbidden purpose then absent a reasonable excuse[103] an offence under s 9 would have been committed. Furthermore, I would not regard absence of prejudice to the principal, or that the act was beneficial to the principal to be a reasonable excuse. I see no reason why criminal law should differ from civil law in this respect. Just as in civil law the principal should not be put to the danger of such an inquiry, to permit such inquiries in criminal prosecution would set back the fight against corruption. It is well to remember what the Attorney General said in moving the second reading of the Bill: “Sir, it is impossible to assess with any accuracy the extent to which society in Hong Kong is affected by corruption … But … corruption does exist here to an extent which not only justifies, but demands, that the utmost efforts be made to eradicate it from our public and business affairs.”[104] Since 1970, corruption has become less of a problem in Hong Kong but it has not been defeated. 127. Section 4 which covers public servants may provide a useful comparison. There, I do not believe it is suggested that prejudice to public service is required or that its absence might provide a defence. Under s 4(2) “any public servant who, whether in Hong Kong or elsewhere, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his – (a) performing or abstaining from performing, or having performed or abstained from performing, any act in his capacity as a public servant; … shall be guilty of an offence.” 128. As I understand s 4(2)(a), a public servant, say a postman, who accepted any advantage from a householder would be guilty of an offence under s 4 even if the householder had offered it in appreciation of the fact that he had gone out of his way to deliver a letter or parcel. It is important, given the scourge of corruption under which Hong Kong had suffered for so long,[105] that it should be clearly understood that under no circumstances should any public servant accept any advantage for acting or forbearing to act in his capacity as a public servant. The corrupting tendency of any offer or acceptance of advantage is too obvious to require elaboration. Nor would I leave it to be determined on a case by case basis whether the tip was deserved and whether there was any prejudice. 129. If prejudice to public service is not required under s 4, I see no reason for requiring it for an offence under s 9. Reasonable excuse 130. I turn now to consider reasonable excuse. 131. R v J (P) was also concerned with s 1 of the 1906 Act and involved the allegation that the defendants had conspired corruptly to give agents of the tax authorities of a state in the Commonwealth a substantial sum of money as an inducement to show favours to a company in relation to the calculation of tax owed by that company to the tax authorities. The issue before the court was whether the word “corruptly” implied that the payment for the prohibited purpose had to have been paid or received secretly and without the knowledge and informed consent of the principal. 132. The defendant’s contention was: “8(ii) … that the term ‘corruptly’ connoted secrecy. As the 1906 Act had been formulated in terms of principal and agent, it must follow that a payment could not be secret if it was made with the knowledge and consent of the principal. Thus it must be for the prosecution to prove, as part of its case, the specific ingredient of lack of knowledge or informed consent by the principal; in essence the element of corruption was the doing of the act prohibited without having first made full disclosure to the principal and obtaining his informed consent.” 133. Given that the 1906 Act required that the giving be made corruptly, Lord Thomas said: “28. There might well be cases where the defendant who is a commercial agent avers that his principal knew of the payment as he had made full disclosure and gave his informed consent; or the defendant might aver that he honestly believed that the agent’s principal knew and gave his informed consent to the receipt of the payment by his agent. It would in such a case be necessary when deciding whether the payment was or was not made or received corruptly for the jury to consider that evidence. However, there is no requirement that the prosecution specifically prove the lack of knowledge and informed consent of the principal separately.” 134. Had the word corruptly been retained in Hong Kong, I would have concluded that on the facts of this case the payment did not fall within s 9. However, the word “corruptly” having been replaced, the payment being for a forbidden purpose, it fell within s 9, and it is necessary to consider whether there was any reasonable excuse. The Court of Appeal was of the view that there was no reasonable excuse. 135. In the second judgment of the Court of Appeal[106] it said at para 88: “We agree that permission[107] and reasonable excuse are two separate defences provided for by the Ordinance. We also agree that reasonable excuse is wider in scope than permission.” With respect, I agree. 136. The Court of Appeal went on to say: “88. … Under some circumstances, it is possible that an agent who does not have his principal’s permission but accepts an advantage which is related to his principal’s business can use reasonable excuse as his defence. Take for example, an agent who has from time to time applied to his principal for permission to accept an advantage on account of his doing an act in relation to his principal’s business, and to whom the principal has always granted permission, will reasonably believe that under the same circumstances he can obtain his principal’s permission. However, on one occasion, when the agent applied for permission from his principal pursuant to section 9(5)(b) of the Ordinance after he accepted an advantage, his principal, without informing him of any change, suddenly, for no reason, refuses to give him permission. The agent cannot legitimize his acceptance of the advantage by the permission provided in the Ordinance, but it is highly likely that he can successfully convince the court that he has a reasonable excuse and thereby legitimizing his acceptance of the advantage.” 137. With respect, on these facts I feel sure that the defence of reasonable excuse has been established because they showed that the agent honestly believed that his principal would not object to his accepting the advantage. In other words, he had the consent of his principal to accept the payment, the paradigm of a reasonable excuse. In my view, that is precisely Chan’s position. TVB accepted it knew that Chan would appear in the programme as a guest of OC. On the evidence the inescapable conclusion was that Chan would be paid by OC through IEAP.[108] It is true that there was no evidence that TVB knew how much Chan would be paid by OC. It was suggested that absent such knowledge there was no informed consent. What constitutes a fully informed consent is a question of fact and “there is no precise formula which will determine all cases”.[109] In this case I do not believe it mattered. On the facts TVB must be taken to have consented to Chan performing in the programme as OC’s guest and be paid for it. The exact amount was of no consequence to TVB. 138. For the above reasons, I am of the view that no offence was committed under s 9 because Chan had a reasonable excuse in appearing as OC’s guest and be paid for it. It follows that both he and Tseng should be acquitted of all the charges relating to this incident. I would allow their appeals. Mr Justice Fok PJ: 139. I have had the benefit of reading in draft the judgments of Ribeiro PJ and Tang PJ. I agree with them in their respective conclusions that these appeals should be allowed. As will be apparent, however, Ribeiro PJ arrives at his conclusion by a very different route to that of Tang PJ and, for that reason, I add this short judgment to indicate my agreement with the reasoning of Ribeiro PJ and to explain my preference for his reasoning in arriving at the conclusion that the two appellants were not guilty of an offence under section 9 of the POBO. 140. Ribeiro PJ’s analysis of the need, if guilt under section 9 is to be established, for there to be conduct adverse to the principal’s interests (Section H of his judgment) is, in my opinion, sound and consistent with the language of section 9 properly construed in accordance with its context and purpose. 141. I do not, with respect, share the view of Tang PJ that the omission of the word “corruptly” in section 9 (which had previously been found in section 4 of the Prevention of Bribery Ordinance (Cap.201)) means that, for an offence under section 9 to be made out, the prosecution need prove only a payment to an agent of which his principal does not know and to which he does not consent. 142. The section does not, in my view, criminalise any and all payments of money by a third party to an agent made without the principal’s knowledge and consent. If it had been intended to cast the offence in such wide terms (and they would be very wide indeed), section 9 would have been very differently and much more simply worded. 143. Instead, the Legislature required that the advantage solicited, accepted or offered must have been as “an inducement to or reward for” the agent’s doing (or forbearing to do) an act “in relation to his principal’s affairs or business” (in sub-sections 9(1)(a) and 9(2)(a)) or showing or forbearing to show “favour or disfavour” to someone “in relation to his principal’s affairs or business” (in sub-sections 9(1)(b) and 9(2)(b)). The words “inducement” and “reward” require the advantage solicited, accepted or offered be invested with some quality of purpose. This is reinforced by the use of the words “favour” and “disfavour” in sub-sections 9(1)(b) and 9(2)(b). 144. Likewise, the Legislature required that the advantage be “in relation to his principal’s affairs or business”. Section 9 is not the private sector mirror image of the section 4 offence. The offence in the latter section is established on proof of an advantage solicited or accepted by a public servant for an act “in his capacity as a public servant”. It is the nature of the act performed (or not) as a public servant in return for the advantage that invests the advantage with its criminality. In contrast, for section 9, it is not enough that the advantage is solicited or accepted by the agent in his capacity as such. It must additionally be “in relation to his principal’s affairs or business”. 145. Those words in section 9 are critical. They were construed by Lord Lloyd of Berwick in Commissioner of the ICAC v Ch’ng Poh [1997] HKLRD 652 at pp.656-657 as meaning that the action or forbearance of the agent must have been intended to “influence or affect the principal’s affairs” and be “aimed at the principal”. It would be surprising, to say the least, for Lord Lloyd to have expressed himself as he did if he thought that those words simply meant that the payment must be “related to” the principal’s affairs or business in the broad sense urged by the prosecution in these appeals. 146. I do not therefore agree that the Attorney General’s statement that “the Crown will need to prove only a payment to the … agent” is a correct or complete statement of the elements of the offence under section 9. It is unlikely that this was his intention given the language of section 9 as a whole. Rather that statement, seen in context, was commenting on the wording of the then proposed section 9 “[a]s … now drafted” and addressing the concern he expressed as to what the Crown would have to establish “before an accused had a case to answer”. Removing the word “corruptly” from section 9 did not mean that there was no need for a qualitative assessment of the payment and, on its wording, the section clearly requires an examination of the nature, purpose and context of the payment. This is referred to, in Tang PJ’s judgment, as “a forbidden purpose”. I respectfully agree with the need for there to be such a “forbidden purpose” and the real debate in these appeals has been directed to the search for a proper definition of that prohibited purpose. 147. In my view, that definition is to be found in Sections H and I of the judgment of Ribeiro PJ. I also agree in all other respects with that judgment. Mr Justice Stock NPJ: 148. I agree with the judgments of Mr Justice Ribeiro PJ and Mr Justice Fok PJ. Lord Walker NPJ: 149. I agree with the judgments of Mr Justice Ribeiro PJ and Mr Justice Fok PJ. Mr Justice Ribeiro PJ: 150. The appeals are unanimously allowed and the appellants’ convictions are quashed. Any submissions as to costs should be lodged within 21 days of the date of the handing down of this judgment with any submissions in reply to be lodged within 14 days thereafter. Mr Joseph Tse SC, Mr Charles J. Chan and Mr Byron C.Y. Tsang, instructed by Ivan Tang & Co., for the Appellant in FACC 11/2016 Mr David Perry QC, Ms Maggie Wong, Mr Derek C.L. Chan and Mr Samuel Sung, instructed by Angela Lau Law Office, for the Appellant in FACC 18/2016 Mr Jonathan Caplan QC and Mr Eric Kwok SC, on fiat, and Mr Felix Tam SPP, of the Department of Justice, for the Respondent in FACC 11/2016 and FACC 18/2016 [1] Cap 201. [2] DCCC 1214/2010. [3] The Case Stated by the Judge is dated 5 March 2012, CACC 103/2012 (“1st Case Stated”). [4] Yeung VP, Cheung and Yuen JJA, CACC 355/2011 and CACC 103/2012 (21 November 2012) (“1st CA Judgment”). [5] DCCC 1214/2010. [6] The second Case Stated by the Judge is dated 17 September 2014, CACC 183/2014 (“2nd Case Stated”). [7] Yeung VP, Yuen and Pang JJA, CACC 92/2013 and CACC 183/2014 (26 October 2015) (“2nd CA Judgment”). [8] Yeung VP, Yuen and Pang JJA, CACC 103/2012 and CACC 183/2014 (26 January 2016). [9] Tang and Fok PJJ and Stock NPJ, FAMC 4/2016 (29 June 2016) in Chan’s case; and Ribeiro, Tang and Fok PJJ, FAMC 40 of 2016 (4 October 2016) in Tseng’s case. [10] In Sections F, G and H of this judgment. [11] POBO section 11. See HKSAR v So Kam Tim [1997] HKLRD 1123 at 1126. [12] (CACC 497/2002, 24 August 2004, unreported) at §44. Citing R v Li Fook Siu Ronald [1991] 2 HKLR 288, see per Fuad VP at 298. [13] That is, an act “aimed at” and “intended to influence or affect” the principal’s affairs or business. See Section F of this judgment. [14] [1997] HKLRD 652. [15] In Section F of this judgment. [16] 1st Case Stated §11. [17] Ibid §12(6). [18] At §§32-35. [19] 1st CA Judgment §§105-106. [20] 1st CA Judgment, §128. [21] [2008] 5 HKLRD 846. [22] In Section H.3 of this judgment. [23] 1st CA Judgment, §153. [24] 1st CA Judgment §154. [25] Acting for the respondent with Mr Eric Kwok SC and Mr Felix Tam SPP. [26] [1997] HKLRD 652. [27] At 656-657. [28] At 657. [29] 1st CA Judgment, §150. [30] In Section H.1 of this judgment. [31] (2005) 8 HKCFAR 628 at §109. This duty was reiterated by Lord Woolf NPJ in HKSAR v Lam Yuk Fai (2006) 9 HKCFAR 281. [32] 1st CA Judgment, §101-104. [33] As noted in R v Majeed, R v Westfield [2013] 1 WLR 1041 at §§19 and 21. [34] Section F of this judgment. [35] 1st CA Judgment, §122. [36] Ch’ng Poh at 657. [37] Section C of this judgment. [38] Section D of this judgment. [39] 1st CA Judgment, §128. [40] See for example Mahmud v Bank of Credit and Commerce International SA [1998] AC 20, per Lord Nicholls of Birkenhead at 35 and Lord Steyn at 45-46. [41] “To make further and better provision for the prevention of bribery and for purposes necessary thereto or connected therewith”. [42] Including in this Court in HKSAR v Ng Po On (2008) 11 HKCFAR 91 at §§51 and 69. [43] Commissioner of ICAC v Ch’ng Poh [1997] HKLRD 652 at 656. [44] Ibid at 657. Italics supplied. [45] Prevention of Corruption Ordinance, Cap 215, section 4(a) (enacted in 1948), referring to any agent who “corruptly accepts or obtains [etc] ... any gift or consideration as an inducement or reward [etc]”. [46] 18th November 1970, Resumption of debate on second reading (21.10.70), Hansard p 196-197. [47] Mr Denys Roberts, ibid, p 201. [48] (2009) 12 HKCFAR 568 at §14. [49] Set out in Section C above. [50] [1961] HKLR 13 at 94 (Full Court). [51] Section 4(a) of the Prevention of Corruption Ordinance (Cap 215) which provided that if any agent corruptly accepts any gift as an inducement or reward for doing or forbearing to do or for having done or forborne to do any act in relation to his principal's affairs, he shall be guilty of an offence. [52] [2008] 5 HKLRD 846. [53] Ibid at §3. [54] Ibid at §37. [55] Cap 200. [56] [2008] 5 HKLRD 846 at §39. [57] Ibid at §40. [58] Ian McWalters SC, Bribery and Corruption Law in Hong Kong (Lexis Nexis 3rd Ed), §9.5. [59] (2016) 19 HKCFAR 110 at §36. [60] 2nd CA Judgment, §93. [61] (2008) 11 HKCFAR 91. [62] At §37. [63] Section 94A of the Criminal Procedure Ordinance (Cap 221) which relieves the prosecution of negativing exceptions or exemptions or qualifications to the operation of a law creating an offence. [64] Cap 200. Section 159A(2): “Where liability for any offence may be incurred without knowledge on the part of the person committing it of any particular fact or circumstance necessary for the commission of the offence, a person shall nevertheless not be guilty of conspiracy to commit that offence by virtue of subsection (1) unless he and at least one other party to the agreement intend or know that that fact or circumstance shall or will exist at the time when the conduct constituting the offence is to take place.” [65] (2008) 11 HKCFAR 91 at §11. [66] Appearing with Ms Maggie Wong, Mr Derek C L Chan and Mr Samuel Sung for Tseng. [67] Such as the rules of evidence contained in POBO sections 10, 20, 21 and 21A. [68] Pursuant to section 83A of the Criminal Procedure Ordinance (Cap 221) in conjunction with section 17(2) of the Hong Kong Court of Final Appeal Ordinance (Cap 484). [69] Para 4 above. [70] A popular artiste in the employ of TVB. [71] Yeung VP, Cheung and Yuen JJA, CACC 355/2011 and CACC 103/2012 (21 November 2012). [72] Para 7 above. [73] The issue is complicated by the fact that we are concerned with the charge of conspiracy. See section K of Ribeiro PJ’s judgment. [74] Like Ribeiro PJ, I will not consider whether s 24 infringes the presumption of innocence. [75] Taikato v R (1996) 186 CLR 454 at 464. [76] All references are to Cap 201 unless otherwise stated. [77] Section 9(2) provides a corresponding offence for the offeror. It is not necessary to deal separately with him. [78] No reliance on such permission. [79] DCCC 1214/2010, para 29. [80] Section 4(2)(a). Section 4(1) contains the corresponding offence for the offeror, with which we are not concerned. [81] It was not the prosecution case that Chan was acting in his capacity as a public servant. [82] At p 656. [83] Section 9(4) and (5) were introduced by amendment in 1980. Section 4 of Cap 215 was based on s 1 of the Prevention of Corruption Act 1906 (“the 1906 Act”). [84] Para 1.31, following Cooper v Slade (1858) 6 HLC 746, Willes J and R v Smith [1960] 2 QB 423. [85] During the second reading. [86] Hansard 18 November 1970 at 201. [87] However, if the soliciting or acceptance was made with permission by the principal in compliance with s 9(4) and (5), then neither the agent nor the offeror would be guilty of an offence under s 9(1)(a) or (b). [88] There was a discussion at the hearing over whether if a junior clerk employed by TVB were to return to work after office hours for a contracted cleaner to clean TVB’s premises whether he could come within s 9. I feel sure the defence of reasonable excuse would be available. It would no more affect his employer if he was engaged after work to make sandwiches for the caterer who supplied them to his employer. But, the matter is fact sensitive. The situation of a manager who owns an outside catering service and sells sandwiches to his employer without any disclosure may be more problematical. Here Chan’s contract of employment with TVB did not permit outside work without the written consent of TVB. Mr Caplan QC rightly accepted that this has no bearing on whether Chan’s performance in “Be My Guest” related to TVB’s affairs or business. But, whether his appearance in the “Be My Guest” related to the affairs or business of TVB is not easily resolved. [89] P 657. [90] 1043G. [91] Para 103 above. [92] Lord Judge CJ, Openshaw, Irwin JJ. [93] Together with Ashworth and Browne JJ. [94] With the agreement of Ashworth and Browne JJ. [95] P 1056e. [96] (1948) 33 Cr App Rep 5 at 9. [97] Paras 61-65 above. [98] Para 73 above. [99] R v Wellburn and Others (1979) 69 Cr App Rep 254 at 265, CA, Lawton LJ, Cantley and Willis JJ. [100] Para 28 above. [101] Rafferty LJ, Henriques J. [102] Lord Thomas also pointed out that s 1 also covered public servant which has a bearing on its construction. [103] I ignore lawful authority or permission under subsections (4) and (5) which are irrelevant for the present purpose. [104] Second reading, Attorney General, Hansard 21 Oct 1970, p 131. [105] For a long time, tipping was expected for many public service, including service in public hospitals. [106] Yeung VP, Yuen and Pang JJA. [107] Complying with ss (4) and (5). [108] Para 94 above. [109] Bowstead and Reynolds on Agency 20th edition 6 – 039.
Press Summary (English) Press Summary (Chinese) FACC Nos 4 and 5 of 2012 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NOS4 AND 5 OF 2012 (CRIMINAL) (ON APPEAL FROM HCMA NO 922 OF 2009 AND NO 102 OF 2010) FACC No 4 of 2012 Between : FACC No 5 of 2012 Between : Mr Justice Chan PJ : 1. I agree with the judgment of Mr Justice Tang PJ. For the reasons given by him, the “proprietor” charges against the appellants in these two appeals should be set aside but the “contractor” charges should be upheld. I would however say a few words on the proprietor charge. 2. The object of the safety requirements provided in the Factories and Industrial Undertakings Ordinance, Cap 59 (“the Ordinance”) is to ensure that places of work are safe and those working in these places are, as far as reasonably practicable, free from risks and dangers. The net is necessarily cast very widely in order to ensure that proprietors and contractors of industrial undertakings (which are defined to include places of work and the activities carried on in these places) are held responsible for any failure to comply with these safety requirements and cannot escape responsibility simply by sub-contracting the work to other proprietors or contractors. This object would be frustrated if the charges against those who should be held responsible are not properly laid or the allegations against them are wrongly made, even though there are clear contraventions of these safety requirements. 3. Under s 13(1), the prosecution must prove that first, the accused is a proprietor in an industrial undertaking (which includes the person having the management and control of the business carried on in an industrial undertaking) and secondly, an offence under the Ordinance has been committed in or in respect of such industrial undertaking. On the first issue, it is important to identify correctly the industrial undertaking (ie the place of work and/or the activities carried on in that place) of which the accused is alleged to be the proprietor. On the second issue, it is necessary to specify the offence which it is alleged has been committed in or in respect of this industrial undertaking including the ingredients of the offence and the alleged offender. Where s 6A is the alleged predicated offence, the proprietor who was the employer of the persons working in the industrial undertaking and the alleged breach of duty by this proprietor should be clearly stated. It is only when the s 6A offence has been proved to have been committed (even if the proprietor who was the employer of the workers involved was acquitted) that the proprietor charged under s 13 can be guilty of a like offence. 4. The correct formulation of the charge is important in a criminal prosecution because it is essential that an accused, in order to have a fair trial, should be made aware of what the case is that is alleged against him. 5. At the trial of Paul Y, it appears that although the proprietor charge was framed as a “combination” of s 6A(2)(a), 6A(3) and s 13(1), Paul Y was alleged to have been in breach of the duty under s 6A. In other words, Paul Y was alleged and sought to be proved to be the offender under s 6A when it was quite clearly not the employer of the persons involved in the industrial accident. What in fact should have been the case against Paul Y was that a s 6A offence had been committed in or in respect of an industrial undertaking by Ka Shing (the sub-sub-contractor) and that Paul Y, as a proprietor of that industrial undertaking, should be guilty of a like offence under s 13. That, unfortunately, was not the case presented against Paul Y; nor was it the basis upon which it was convicted. The same criticism can be made in respect of the trial of Lucky Engineering. The convictions on the proprietor charge again both appellants must be quashed. Mr Justice Ribeiro PJ : 6. I agree with the judgment of Mr Justice Tang PJ and the observations of Mr Justice Chan PJ. Mr Justice Tang PJ : 7. These appeals concern accidents at different locations involving different parties. 8. In FACC 4/2012, the appellant, Paul Y General Contractors Limited (“Paul Y”), entered into a contract with CK Construction Management Limited (“CKCM”), the owner’s or employer’s representative[1], to undertake carcass work at a building site in Homantin. The carcass work included aluminium cladding work, which was contracted to HH Robertson Limited (“HH Robertson”) by Paul Y. HH Robertson in turn subcontracted the work to Ka Shing Engineering Company (“Ka Shing”). On 20 September 2008, two employees of Ka Shing fell when an aluminium slab, which was 6 metres or more above the ground, on which they were standing, buckled. Tragically, one of the workmen died. 9. In FACC 5/2012, on 30 October 2008, a workman was electrocuted whilst installing floodlights at the wooden catwalk over the top of the indoor swimming pool at the Happy Valley Clubhouse of the Jockey Club. The appellant, Lucky Engineering Company Limited (“Lucky Engineering”), was the Jockey Club’s contractor for the upgrading of its electrical power system at the swimming pool as well as the supply and installation of 32 250W floodlights (called the black lights in these proceeding). However, they were responsible also for the supply of electrical powers for 18 400W floodlights (“grey lights”). The deceased was engaged in the installation of the grey lights when he was electrocuted. The deceased was not an employee of Lucky Engineering. 10. As a result of the accident, Paul Y was convicted after trial of three charges, namely, that Paul Y: (1) being a proprietor of the industrial undertaking, namely the installation of aluminium cladding panels to the roof feature on Tower 2 at the proposed residential development in Homantin (“the Homantin site”), failed to provide and maintain a system of work in relation to such installation, that were, so far as was reasonably practicable, safe and without risks to health of the person(s), employed at the industrial undertaking, contrary to Sections 6A(1), 6A(2)(a), 6A(3) and 13(1) of the Factories and Industrial Undertakings Ordinance, Cap 59 (“the Ordinance”). (Summons No KCS10149/2009) (2) being the contractor responsible for a construction site at the Homantin site failed to ensure that, so far as was reasonably practicable, suitable and adequate safe access to and egress from a place of work at the roof feature on Tower 2 of the Homantin site was provided and properly maintained, contrary to Regulations 38A(2), 68(1)(a) and 68(2)(g) of the Construction Sites (Safety) Regulations, Cap 59I, made under the Ordinance (“the Regulations”). (Summons No KCS10145/2009) (3) being the contractor responsible for a construction site at the Homantin site failed to take adequate steps to prevent a person on the site from falling from a height of 2 metres or more, namely the installation of aluminium cladding panels to the roof feature on Tower 2, contrary to Regulations 38B(1), 68(1)(a) and 68(2)(g) of the Regulations. (Summons No KCS10147/2009) 11. Lucky Engineering, the appellant in FACC 5/2012, was convicted after trial of two charges, namely, that Lucky Engineering: (1) being a proprietor of the industrial undertaking at the Happy Valley Clubhouse, failed to provide a system of work for the installation of 18 400W-floodlights at the wooden catwalk over the top of the indoor swimming pool of the premises, that were, so far as was reasonably practicable, safe and without risks to health of the person(s) employed at the industrial undertaking, contrary to Sections 6A(1), 6A(2)(a), 6A(3) and 13(1) of the Ordinance. (Summons No ESS15117/2009) (2) being the contractor responsible for a construction site at Happy Valley Clubhouse, such site being one where workmen were employed and such workmen were liable to come into contact with a live electric cable, before the commencement of the work at the site and during its progress, failed to take such measures as would prevent those workmen from being endangered by the live electric cable, contrary to Regulations 47(1), 68(1)(a) and 68(2)(a) of the Regulations. (Summons No ESS15118/2009) 12. The charges against Paul Y and Lucky Engineering respectively were tried before different Magistrates. Their appeals were consolidated and heard before Deputy High Court Judge E Toh (as she then was). On 19 August 2011, the Judge dismissed both appeals. 13. On 30 March 2012, leave was granted by the Appeal Committee for the appellants to appeal on the following points of law of great and general importance and under the substantial and grave injustice limb: (a) Does s 13(1) of the Factories and Industrial Undertakings Ordinance, when read together with s 6A(1) of the same Ordinance, permit a proprietor to be convicted of “a like offence” (as stated in the former Section), in relation to a person who was not a person “employed by him”, ie not employed by that proprietor? (b) If the answer to sub-paragraph (a) above were in the affirmative, whether under the Ordinance, any defence would be available to that proprietor, under those circumstances? (c) Under Regulation 2(2)(a) of the Construction Site (Safety) Regulations, whether a contractor from whom other contractors did not derive their contracts, could nevertheless be deemed, the principal contractor? (d) Under Regulation 2(2)(a) of the Construction Site (Safety) Regulations, whether a contracted “owner’s representative” necessarily precluded the said owner’s representative from being the principal contractor? 14. As the charges show, these appellants were charged in two different capacities, as proprietors, under s 6A and s 13 of the Ordinance, and as contractors, under Regulations 38A(2) & 38B(1) of the Regulations in the case of Paul Y and , in the case of Lucky Engineering, Regulation 47. A. Proprietor 15. These charges are based on s 6A and s 13. Section 6A(1) reads: “It shall be the duty of every proprietor of an industrial undertaking to ensure, so far as is reasonably practicable, the health and safety at work of all persons employed by him at the industrial undertaking.”[2] Section 13 reads: “(1) ... the proprietor of every industrial undertaking in or in respect of which any offence against this Ordinance has been committed shall be guilty of a like offence, and shall be liable to the penalty prescribed[3] for such offence. (2) It shall be no defence to a prosecution of the proprietor of an industrial undertaking for an offence against this Ordinance that the offence was committed without his knowledge or consent or that the actual offender has not been convicted of the offence. (3) Nothing in this section shall apply to an offence under section 6B or section 6BA(15).”[4] 16. Section 2 provides: “‘proprietor’ (東主) in relation to any industrial undertaking or notifiable workplace includes the person for the time being having the management or control of the business carried on in such industrial undertaking or notifiable workplace and includes a body corporate and a firm and also the occupier of any industrial undertaking or notifiable workplace and the agent of such occupier.” 17. Section 6A imposes a general duty on a proprietor to ensure the safety of his employees. The general duties are imposed because regulations could not cover every aspect of industrial safety no matter how frequently they were amended. Section 6A was modeled on English legislation.[5] Section 6B imposes a duty to take care on an employee for himself and of other persons who may be affected by his acts or omissions at work.[6] However, the English legislation also imposed a duty on an employer to take care in respect of persons other than the proprietor’s employees.[7] The Ordinance does not contain a similar provision. 18. It was the prosecution’s case that s 6A and s 13 in combination imposed a duty on a proprietor to ensure safety extending beyond his employees.[8] The prosecution case against Paul Y and Lucky Engineering was that the predicated offence, namely, the failure to take care under s 6A, was committed by each of the appellants, as proprietor. Hence, the charges alleged that Paul Y or Lucky Engineering “being a proprietor” “failed to provide a safe system of work” and that the charges alleged that the failure contravened was “contrary to sections 6A(1) … 13(1) …”. The prosecution contended that although the duty under s 6A was directed at persons employed by the proprietor, s 6A read with s 13 extended the duty beyond the proprietor’s employees. 19. Deputy Judge Toh agreed, and at para 15 of her judgment, she said: “… the legislature deliberately did not follow s.3 of the (1974 Act) because they must have felt that it did not properly cover the Hong Kong situation, and that it was necessary to enact a section with a more far reaching coverage of the Hong Kong situation, and that is why s.13 was duly passed and enacted.” 20. In fact s 13 has its equivalent in s 36 of the 1974 Act. Moreover, s 13(1) and (2) could be traced to s 28 (2) and (3) of the Factories and Workshops Ordinance Chapter 59, 1938,[9] which was replaced by the Ordinance in 1955. Thus, it has long been the case that a proprietor could be charged under s 13 if, for example, a contractor commits an offence under subsidiary legislation made under the Ordinance[10], for example, Regulation 38A(2), Regulation 38B(1) or Regulation 47(1). 21. On the other hand, s 6A and s 6B were introduced by the Factories and Industrial Undertakings (Amendment) Bill 1989 (the Amendment Bill). The Amendment Bill introduced the notion of a general duty on a proprietor to ensure the safety of his employees. That became s 6A. A similar duty was imposed on an employee to ensure his own safety and the safety of other persons who may be affected by his acts or omissions at work (s 6B). Importantly, the Amendment Bill introduced a custodial sentence[11] for the first time, not only for the contravention of s 6A or s 6B which the Amendment Bill introduced, but also for breaches of subsidiary legislations, such as the Regulations. Eventually, government’s proposal regarding a custodial sentence was watered down, such that, for example, it would only be available if a proprietor or an employee contravenes s 6A and s 6B respectively “wilfully and without reasonable excuse”.[12] Also, the definition of “proprietor” was narrowed down by deleting the words “or receiving the profits” after “management or control”, so that passive partners or shareholders would not fall within its ambit. 22. It was contended below that s 6A and s 13 in combination imposed a duty on a proprietor to ensure safety extending beyond his employees was supported by what McMahon J said in HKSAR v China Overseas Building Construction Ltd [2007] 2 HKLRD 216. 23. McMahon J has been misunderstood. In China Overseas Building, the appellant was the principal contractor on a construction site. He was prosecuted as occupier under s 7 of the Occupational Safety and Health Ordinance, Cap 509 (“OSHO”), in respect of the death of a pump operator employed by a sub-contractor. The pump operator was killed while operating a concrete pumping machine. There, the sub-contractor, as employer, was guilty of a failure to ensure the safety of his employee under s 6 of OSHO.[13] As McMahon J explained, because the deceased was not the appellant’s employee, the appellant was charged as occupier under s 7 of OSHO. However, there were significant differences in the duties of an employer under s 6 and an occupier under s 7, and as the appellant was not in breach of any duty as occupier, its appeal was allowed. 24. It was in that context that McMahon J mentioned s 13 of the Ordinance[14] and said the appellant might have been charged under s 13. In that case, he said: “26. That would mean that the proprietor (which includes occupier) of an industrial undertaking (which is defined broadly and which would include the workplace relevant to the present appeal) would be liable where an offence perhaps by an employer has been committed against the provisions of the Factories and Industrial Undertakings Ordinance. That seems to have been a course available to the prosecution in the present case.” 25. It is obvious that McMahon J had in mind that the sub-contractor employer in China Overseas Building might be prosecuted under s 6A of the Ordinance, and the appellant, as principal contractor, under s 13. With respect, I agree. 26. I reject the submission that s 6A and s 13 in combination imposed a duty on a proprietor to ensure safety extending beyond his employees. The language of s 13 is too plain to admit any serious argument. Section 13 is predicated on an “offence … (having been committed)”. Indeed, it made clear that “It shall be no defence … that the actual offender has not been convicted of the offence.” (my emphasis). 27. Before us, Government advanced a different argument. It argued that Paul Y is guilty under s 13 because Ka Shing had committed a s 6A offence. In other word, Paul Y as proprietor is liable for the s 6A offence committed by Ka Shing, another proprietor.[15] 28. As noted, the definition of proprietor in the Ordinance is wide and “in relation to any industrial undertaking or notifiable workplace includes the person for the time being having the management or control of the business carried on in such industrial undertaking …” and “Industrial undertaking” covers a wide variety of activities and includes “(e) any construction work”. There is no doubt a person who has the management or control of a business carried on at a construction work can be a proprietor for the purposes of s 6A and s 13. 29. Mr Gerard McCoy SC, for Paul Y, submitted that, for the purposes of s 6A and s 13, there could only be one proprietor, and he is the person at the apex of an industrial undertaking. He contended that CKMC, the owner’s representative, should be regarded as the only proprietor. And that if such a proprietor could not be charged under s 6A because the lack of care did not involve his employee, he could not be charged under s 13 which is predicated on someone else having committed an offence under the Ordinance. In other words, a predicated offence in s 13 could not be an offence under s 6A. 30. I do not agree. It is obvious that more than one business could be carried on at a construction site at the same time. In Paul Y’s case, the aluminium cladding work could be regarded as one such business. Indeed, Mr McCoy agreed with Mr Justice Gleeson NPJ, that an independent contractor employed to remove rubble from a construction site would be carrying on a discrete business at a construction site. 31. In the end, Mr McCoy rightly accepted that proprietor as defined in the Ordinance might cover as many proprietors as there are contractors on a construction site. 32. Mr Robert Pang SC for the Government gave the example of a Russian doll, with ever smaller dolls inside larger dolls. He submitted a larger doll could be guilty under s 13 in respect of a s 6A offence committed by a smaller doll. I agree there could be more than one proprietor at an industrial undertaking, such that when there is a chain of contracts each contractor in the chain is a proprietor of its own business and could be charged individually in respect of its own employees under s 6A. In FACC 4/2012, Ka Shing, the aluminum cladding sub-contractor, was the proprietor of its aluminum cladding work at the Homantin site and as such could be prosecuted under s 6A in respect of its failure to ensure the safety of its employees. Paul Y as the proprietor of the Carcass construction work which included the aluminium cladding work, could be charged under s 13 in respect of Ka Shing’s contravention of s 6A. That is because Paul Y’s business encompassed the business of CKMC. The definition of proprietor is wide enough to cover such situation, and it was the obvious intent of s 13. 33. However, that was not the basis of the proprietor charge against Paul Y. It follows that Paul Y’s appeal in respect of the proprietor charge must be allowed. 34. The proprietor charge against Lucky Engineering suffers from the same defect. That being the case, Lucky Engineering’s appeal must also be allowed. It is unnecessary to deal with Mr Alexander King SC’s other submissions on this charge. 35. In Government’s printed case, it was submitted that if one proprietor has committed a s 6A offence at a construction site then all other proprietors on site could be charged under s 13. Sensibly, Mr Pang did not press that argument. I would not read “every proprietor” literally. There is no reason why, for example, a sub-contractor for the removal of rubble from a site should be responsible for the acts or omission of a sub-contractor for installation of claddings. Strict Liability 36. The question whether s 13 was an offence of strict liability was raised. 37. On a charge under s 13, the prosecution must prove that an offence against the Ordinance, in this case, an offence under s 6A has been committed, unless that is proved, the s 13 proprietor would not be guilty of a like offence. Mr McCoy submitted that since s 6A requires a proprietor to do what is reasonably practicable, the proprietor charged under s 13 should have a similar defence. He accepted that under s 18, the onus of proving what is reasonably practicable is on a defendant, and that a proprietor charged under s 13 would have the same onus. Although it is not necessary to decide the point, I am inclined to the view if the s 13 proprietor contests liability on the basis that the s 6A proprietor had done what was reasonably practicable, the onus is on the s 13 proprietor. If that is established on a balance of probabilities, no offence under s 6A would have been committed and the s 13 offence would fail for want of a predicated offence. I am inclined to this view because s 13 provides that the s 13 proprietor would be guilty of a like offence, in other words an offence which should in all respects, including the onus of proof, be the same as the s 6A offence. 38. Otherwise, I have no doubt that s 13 imposes strict liability for precisely the reason given by Mr Justice Ribeiro PJ in Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142 at 195 namely: “… It promotes proactive management and diligent supervision on his part to see that the duty is in fact being properly discharged. If the employer knows that he will be held to account, even without actual fault on his part, if his contractor or employee is slack or careless or incompetent on the job, he has every incentive to make sure that the job is properly done and to replace contractors or employees who are not up to the task.” 39. I note that s 13 also provides that the s 13 proprietor shall be liable to the same penalty and that depending on the circumstances, the penalty includes custodial sentences.[16] We have heard no submission on the question of penalty under s 13, in particular, whether, and if so, under what circumstances, a s 13 proprietor might be liable to a custodial sentence and I express no view on it. B. As contractors 40. In FACC 4/2012 we are concerned with Regulations 38A(2) as well as 38B(1) and in FACC 5/2012, Regulation 47(1). There is no issue that there have been contravention of these Regulations. The issue is whether Paul Y or Lucky Engineering was the contractor responsible for the relevant construction site. 41. Regulation 38A(2) provides: “The contractor responsible for any construction site shall ensure that, so far as is reasonably practicable, suitable and adequate safe access to and egress from every place of work on the site is provided and properly maintained.” 38B(1) provides: “Subject to paragraphs (2), (3) and (4), the contractor responsible for any construction site shall take adequate steps to prevent any person on the site from falling from a height of 2 metres or more.” 42. Regulation 47(1) provides: “Where workmen employed at the construction site are liable to come into contact with any live electric cable of or apparatus, the contractor responsible for the site shall, ... take such measures ... as will prevent them from being endangered by the cable or apparatus.” 43. Regulation 2(2) provides for the purposes of these regulations: “(a) a contractor is responsible for a construction site if he is undertaking construction work there or, where there is more than one contractor undertaking construction work at the site, if he is the principal contractor undertaking work there; (b) a contractor is responsible for any plant referred to in these regulations if it is located at a construction site for which he is responsible. ” 44. In the Regulation, “construction site” means “a place where construction work is undertaken and also any area in the immediate vicinity of any such place which is used for the storage of materials or plant used or intended to be used for the purpose of the construction work”. Construction work is defined in the Ordinance to mean: “(a) the construction, erection, installation, reconstruction, repair, maintenance (including redecoration and external cleaning), renewal, removal, alteration, improvement, dismantling, or demolition of any structure or works specified in the Third Schedule; (b) any work involved in preparing for any operation referred to in paragraph (a), including the laying of foundations and the excavation of earth and rock prior to the laying of foundations; (c) the use of machinery, plant, tools, gear, and materials in connexion with any operation referred to in paragraph (a) or (b).” 45. It is clear these regulations cast a wide net. Thus, Hooper J explained in A-G v John Lok & Partners & Others [1986] HKLR 325 that a contractor undertakes construction work if he is managing, organizing or supervising etc the work: at 335G. John Lok rightly decided that one could be a responsible contractor although one was not carrying out any actual physical work. 46. Mr McCoy relied on the following passage from the judgment of Hooper J in John Lok that such Regulations:- “… are clearly concerned with safety in construction sites and to fix liability for failure to comply with the regulations on the contractor with the greatest responsibility at the construction site. That responsibility is intended to cover the whole site, and is not limited to any particular part of it. …” (Mr McCoy’s emphasis). 47. Mr McCoy submitted it followed that the principal contractor as the contractor responsible must be responsible for the whole physical site and that since Paul Y was only concerned with the carcass work that was not sufficient. I do not agree. 48. Hooper J’s statement was made in response to the magistrate’s finding that the principal contractor did not come within the term “contractor responsible” because that applied only to a contractor carrying out the actual physical work. In that context, Hooper J said the term “contractor responsible” referred to a contractor whose responsibility covered the whole site and not just the contractor who did the physical work. 49. Take the case of a large site on which two towers are being built and where there is a principal contractor for the building of each tower. In such a case, there is no reason why each principal contractor could not be the principal contractor in respect of its tower and as such be regarded as the contractor responsible for such tower. Indeed, the definition of “construction site” as “a place where construction work is undertaken” supports the view that there could be more than one construction site at any place where more than one type of construction work is being undertaken. Or, as Mr Justice Ribeiro PJ pointed out, in the case of a large undertaking, such as the building of the Chek Lap Kok Airport, there could be many construction sites. Paul Y’s Appeal 50. Paul Y entered into a Carcass Work Contract with CKCM on 6 October 2006 for the carcass work at the Homantin site. CKCM was the Employer’s Representative and signed the contract as such. The terms of the contract included carrying out aluminium cladding installation works at the location. Under the contract, Paul Y was obliged, inter alia, to: “5. … provide all necessary attendances, co-ordination, liaison and such other works as necessary for obtaining Phased Occupation Permit(s) from Buildings Department.” 51. Paul Y sub-contracted the aluminium cladding installation works to HH Robertson. HH Robertson then sub-contracted part of the aluminium cladding installation works to Ka Shing. According to PW1, the Contract Manager of HH Robertson, Paul Y was the “main contractor” of HH Robertson and HH Robertson was a sub-contractor. 52. I have no doubt Paul Y was the contractor responsible for the carcass work of which the aluminum cladding work formed part. The fact that the owner had appointed an owner’s or employer’s representative is irrelevant to the question whether Paul Y was the principal contractor. CKCM signed the contract with Paul Y as agent of the owner of the site at Homantin. Regulation 2(2) does not require a direct contractual relationship between the principal contractor and all the other contractors. I would dismiss Paul Y’s appeals regarding these charges.[17] Lucky Engineering 53. This case arose out of an industrial accident which resulted in the death of Shek Yuk Ming (“the deceased”). 54. The background facts are complicated and this summary is based on the evidence found by the magistrate as well as the technical report prepared by Mr Siu Kam-wah (PW8), senior electrical engineer of the Labour Department, whose evidence was accepted by the magistrate. 55. In 2008, the Jockey Club decided to upgrade the lighting system at a wooden catwalk area at its Clubhouse at Shan Kwong Road, Happy Valley, and awarded the contract to do so to Lucky Engineering in August 2008. In the course of the contract, the Jockey Club decided to improve the lighting system at the indoor swimming pool area and employed Duo Lighting Design and Associates (“Duo Lighting”) to design the lighting. The original design provided for the installation of 32 black lights. Lucky Engineering were instructed to install them under their contract with Jockey Club. After completion, they were found to be too dim and Duo Lighting recommended the installation of 18 grey lights at the Catwalk.[18] Because Lucky Engineering did not have enough manpower or time to install the grey lights, and declined to do so, the Jockey Club’s project manager (PW1) asked Lumen Arts Hong Kong Ltd (“Luman Arts”) (the supplier of the 18 additional lights) to find another party to install the grey lights and to work with Lucky Engineering who were to provide the power supply for the grey lights.[19] 56. Lumen Arts’ director Szeto Tin Chung (PW2) asked the deceased to install the grey lights. The deceased went to the Clubhouse with PW2 to check out the condition of the site and started work on 30 October 2008. The deceased was told by PW2 to approach Lucky Engineering for cooperation and co-ordination for the work to be done in time for the formal opening. The deceased’s work included the connection of the grey lights power cords to the adaptable boxes for electricity supply. Unfortunately, in the connection to grey lights No 6 and No 7, the phase and earth conductors were mistakenly interchanged at the point of connection to the relevant adaptable box. 57. In the evening of 30 October 2008, the deceased was electrocuted when he touched the live metal bolt on the floodlight casing on grey light No 6 when he tried to adjust the angle of the floodlight. This is what Mr Siu (PW8) said in his report: “4.22 Based on the above D/Ts by Mr HO Pong-kit, Mr LOK Chun-yu and Mr Szeto Tin-chung, the autopsy report as well as the circumstantial evidence collected during the site investigation, it was believed that someone energized some of the floodlights including Floodlight No 6 (which was connected to the ‘B7-3Y’ MCB) in the 4/F switch room without checking the electric wiring of the floodlights. The responsible contractors and registered electrical workers also did not carry out the necessary electrical tests for the associated electric circuits before energizing the ‘B7-3Y’ MCB. As such, the casing of Floodlight No 6 became live at the time of accident due to the mistake made in the wiring connection at the respective adaptable box as mentioned in para 4.15 above. The D/P was suspected to have received an electric shock by touching the live metal bolt on the floodlight casing when he tried to adjust the angle of the floodlight. … 5.2 … it was not clear who carried out the connection at the adaptable box. Nevertheless, the mistake could be easily discovered by visual inspection at the adaptable box. … … 5.4 Prior to the energisation of the power supply to the floodlights, the contractors and the responsible (registered electrical worker) concerned should ensure that all safety precautions had been taken to avoid danger. In particular, it was necessary to completely test all electric circuits for the 250W floodlights and 400W floodlights in accordance with Code 21 of the COP[20] before energisation. … … 6.1 Prior to energisation of the power supply to electrical installation, the contractor … should ensure that all safety precautions had been taken to avoid danger. …” 58. Lucky Engineering had a site agent So Hon Fai (PW3). He was responsible for overseeing the progress of the works. His evidence was that he inspected half of the adaptable boxes: “24 … by doing the insulation test and checking whether the connections were properly done. …” 59. Had proper testing taken place, it seems clear that the accident would not have occurred. That may explain why Lucky Engineering sought to show at trial (but was unsuccessful) that the deceased was electrocuted by a separate and independent power source, in other words, not by the electricity supply for which it was responsible. 60. It is clear from the statement of findings that PW3’s evidence was that: “28 … he was told by a worker of Wah Yip to turn (on the electricity supply) to carry out some tests. He saw the floodlights were on in consequence of that.”[21] 61. Mr Siu (PW8), stated in his report that: “5. … The root cause of the accident was due to the default of the concerned contractors and the registered electrical worker who was responsible for the electrical wiring work at 4/F switch room and the Catwalk because they should not allowed (sic) the electric circuits for the 250W and 400W floodlights to be energized without proper testing. In addition, they had not taken all safety precautions to isolate all outgoing electric circuits from 4/F switch room to the floodlights to prevent the circuits from becoming live when the electrical wiring and installation work for the floodlights were in progress.” 62. It is against this background that one considers whether Lucky Engineering were the contractor responsible for the construction site where workmen employed thereat were liable to come into contact with any live cable. 63. Mr King’s primary submission was that since Lucky Engineering was not responsible for the installation of the grey lights, these grey lights were outside any construction site for which Lucky Engineering was responsible. 64. With respect, that overlooks the critical fact that Lucky Engineering was responsible to provide the power supply for the grey lights and that it was the power supply which electrocuted the deceased. It is clear from the statements in Mr Siu’s report quoted above, that the root cause of the accident was that Lucky Engineering which was responsible for the power supply allowed the electrical circuit of the black and grey lights to be energized without proper testing. 65. What was the construction site for the purpose of this charge is a question of fact. On the evidence, the learned magistrate was perfectly entitled to find that Lucky Engineering was responsible for the construction site which included the grey lights. 66. For the above reasons, I would dismiss Lucky Engineer’s appeal against the contractor charges.[22] Drafting of charges 67. Prosecutions for offences under the Ordinance (which includes the Regulations) may be brought in the name of the Commissioner for Labour and conducted by any officer of the Labour Department.[23] Charges should be properly formulated, but they should not be overly technical. If the defence regards any charge to be unclear, it should seek clarification. Any necessary amendment could then be made. In these appeals, the charges were couched in general terms. No point was taken, rightly so, because the parties were not in doubt of the substance of the charges which they had to meet. However, in the case of the s 13 charges, it is obvious that they were based on a misunderstanding of s 6A and s 13. It is hoped that as a result of these proceedings, charges under s 13 where an offence under s 6A was the predicated offence would be properly framed. I also respectfully agree with Mr Justice Chan PJ’s observations. The Questions of Law 68. I turn to the questions of law identified in para 7 above and answer them thus: (a) Yes, but only insofar as the proprietor could be properly regarded as coming within s 13.[24] (b) It would be a defence that the predicated offence has not been committed.[25] (c) A contractor could be regarded as the contractor responsible even for contractors who had no direct contractual relationship with him that were sub-contractors of its own contractors and so on.[26] (d) No.[27] The question does not arise in this case. Disposition 69. The appeals in respect of the charges stated in para 10(1) and 11(1) above are allowed. The appeals in respect of the charges stated in para 10(2) and (3) and para 11(2) are dismissed. Mr Justice Litton NPJ : 70. I agree with the orders proposed by Mr Justice Tang PJ and confine my remarks to the summonses where the Appellant was charged as proprietor of an industrial undertaking under the Factories and Industrial Undertakings Ordinance, Cap 59. The Charge Against Paul Y 71. In respect of Paul Y General Contractors Limited the charge says that Paul Y: “being a proprietor of the industrial undertaking, namely THE INSTALLATION OF ALUMINIUM CLADDING PANELS TO THE ROOF FEATURE ON TOWER 2 at THE PROPOSED RESIDENTIAL DEVELOPMENT AT KIL 11124 … did fail … etc” 72. To the ordinary person, when it is said that someone is the proprietor of an industrial undertaking – in Chinese 工業經營– he would take it to mean some sort of enterprise or business of which that person is the owner. And as regards the installation of aluminium cladding panels referred to in the summons, he would understand that to mean the activity undertaken by that person’s business of installing panels. He would then be reinforced in this understanding when he goes on to read the rest of the summons where it says: “… did fail to provide and maintain A SYSTEM OF WORK IN RELATION TO THE INSTALLATION OF ALUMINIUM CLADDING PANELS … that were, so far as was reasonably practicable, safe and without risk … etc” This must mean the activity of installing panels where the proprietor’s safety system was defective. 73. The prosecution says that in the Factories and Industrial Undertakings Ordinance the expression “industrial undertaking” has an extended meaning. It can also mean: “(i) any premises or site in or upon which … any of the foregoing industrial undertakings is carried on”. And when one looks at the “foregoing industrial undertakings” one sees in the definition: “(e) any construction work.” 74. So now, to read the summons correctly, where it says “being the proprietor of the industrial undertaking”, it means that Paul Y is charged with being the “proprietor” of the site in which construction work was carried on. 75. Pausing here, if that is what the charge is meant to say, why does it not say so? 76. But that creates another problem in this case. The “construction work”, that is to say, the installation of aluminium cladding, was being done by workmen employed by Ka Shing, the sub-contractor of HH Robertson, up at the roof of Tower 2. So it may well be that Ka Shing was a “proprietor” of the site up at the roof at the material time, owing a duty to ensure as far as practicable the health and safety of the men employed by him, under s 6A of the Ordinance. The Offence Under s 13(1) 77. Now, the charge against Paul Y as proprietor is laid under s 13(1). An ingredient of the offence is that another “offence against this Ordinance has been committed”, before Paul Y could be guilty of the “like offence”. The offence under s 13(1) is derivative. Where s 13(1) speaks of “offence against this Ordinance” it includes any subsidiary legislation made under the Ordinance[28]. Hence, if it was alleged in the summons that Ka Shing, being the contractor responsible for the aluminium cladding work, breached Reg. 38B of the Construction Sites (Safety) Regulations made under the Ordinance, in that Ka Shing had failed to take adequate steps to prevent his workmen falling from a height of 2 metres or more, then Paul Y would be guilty of “the like offence” if they were “proprietors” of the “industrial undertaking”. But that is not how the charge was framed. It must necessarily fail. The Charge Against Lucky Engineering 78. A similar defect afflicts the charge laid against Lucky Engineering Co Ltd, though the wording of that summons is rather different. There, it is alleged that Lucky Engineering: “being a proprietor of the industrial undertaking, namely, LUCKY ENGINEERING COMPANY LIMITED at HAPPY VALLEY CLUBHOUSE ... did fail to provide A SYSTEM OF WORK FOR THE INSTALLATION OF 18 Nos 400W-FLOODLIGHTS … etc” 79. Here, the ordinary person might understand on reading the summons that the “industrial undertaking” named in the summons is the business of Lucky Engineering: The summons says “namely, Lucky Engineering Co. Ltd” but it must mean the business of the company carried on at the Happy Valley Clubhouse. Taking the extended definition of “industrial undertaking” as explained in para 73 above, one could then construe the summons as saying that Lucky Engineering, being the proprietor having the management or control of the business carried on in the site where construction work was taking place, did fail to provide a system of work, etc. The “site” was the catwalk above the swimming pool and the construction work was the installation of the 18 400-W grey lights. If Lucky Engineering was the “proprietor” of that work site, then it might be derivatively liable under s 13(1). But, again, that charge fails because there is no averment as to who had committed an offence against the Ordinance to make Lucky Engineering derivatively guilty as proprietor of the industrial undertaking under the Ordinance. Charging Persons as “Proprietors” 80. As can be seen, the charges laid under s 13(1) are highly artificial. The Ordinance defines “proprietor” in relation to an industrial undertaking as including: “… the person for the time being having the management or control of the business carried on in such industrial undertaking …” (emphasis added). 81. Now, here, as regards Paul Y, who were general contractors responsible for building the entire superstructure of Tower 2 from the foundations upwards, it might be said that their business was being carried on up at the roof where the accident occurred, and hence “in such industrial undertaking”, in line with the statutory definition of “proprietor”. And, in relation to Lucky Engineering, which had the contract from the Jockey Club to upgrade the lighting system generally, and had a site agent So Hon Fai (PW3) on the ground, it could be said (in fact it was so alleged in the summons) that they carried on business at the catwalk where the fatal accident occurred. 82. But could the same be said of Shek Yuk Ming (the deceased) who, at the request of Lumen Arts (the supplier of the 18 grey lights), had undertaken the job of installing those lights, and had then gone to the Clubhouse with a workman (PW4) on 30 October 2008 to do the work. Assuming it had been PW4 who was killed, could Shek Yuk Ming have been deemed a “proprietor” who had failed to ensure the safety of PW4, under s 6A of the Ordinance? Would Shek have been held to have had the “management or control of the business” carried on by him at the catwalk? To the ordinary person, it might have seemed a trifle too grand to say that Shek was “carrying on a business” at the catwalk when, in truth, he was just doing work there and got someone else (PW4) to help him. 83. As I understand it, the Labour Department, prior to the observations of McMahon J in HKSAR v China Overseas Building Construction Ltd [2007] 2 HKLRD 216 at 223, did not use s 13(1) to charge offenders in cases such as these. No wonder. It is not a provision which is easy to operate. 84. Note this: Under the Ordinance, there is a distinction between “proprietor” and “owner”, though to an ordinary person the expressions may seem interchangeable. In the Factories and Industrial Undertakings (Suspended Working Platforms) Regulation, “owner”, in relation to any suspended working platform, is defined as including the lessee etc or person in charge or having control or management of the suspended working platform, and the contractor who has control over the way any construction work which involves the use of the suspended working platform is carried out and, in the case of a construction site, includes the contractor responsible for the construction site. 85. In China Overseas Building Construction Ltd the person targetted, the “owner”, is linked to the suspended working platform, the object which might cause danger to safety. In contrast, under the Ordinance, the scope of responsibility of a “proprietor” is ill-defined and amorphous. 86. Here, I have no doubt that the Appellants were properly convicted as “contractors” for the reasons given in Part B of Mr Justice Tang PJ’s judgment. The convictions, flowing from the facts as found by the magistrates, were straight-forward, and so were the summonses the Appellants faced. But charging them as “proprietors” was another matter. The Rule of Law 87. As I observed in Jetex HVAC Equipments Ltd v Commissioner for Labour [1995] 2 HKLR 24 at 25 informations are laid by officers of different departments of government on a daily basis in order to enforce the law and preserve the fabric of civil society in Hong Kong. Jetex was also a case dealt with under s 6A of the Factories and Industrial Undertakings Ordinance. The information was laid by a labour officer, as it was in this case. But there are many other statutes affecting municipal services, health and hygiene etc which are also administered by middle-ranking officers who enforce the law where necessary by laying informations in the magistracies. All one needs to do is to glance at, say, the Waste Disposal Ordinance, Cap 354 or the Public Health and Municipal Services Ordinance, Cap 132 to see how important it is that such statutory responsibilities are discharged effectively. This is an important aspect of the rule of law in Hong Kong. 88. And here we are, in this case, in the highest court in the land, struggling to make sense of the “proprietor” charges against the Appellants through the medium of the English language. By and large, the statutory schemes are administered by the various government departments using Chinese as their working language. Meaning can be lost in translation. The majority of the cases prosecuted through the magistrate courts are done in Chinese. Hence, it is crucial that the statutory language should be simple, and charges are laid in plain language which everyone can understand. 89. In a case such as this, it adds unnecessary complication to charge the Appellants as “proprietors” where, on the facts, they plainly had responsibility as contractors over the sites concerned. Mr Justice Gleeson NPJ : 90. I agree with the judgment of Mr Justice Tang PJ. 91. I also agree with the observations of Mr Justice Chan PJ. The charges laid against the appellants under s 13 of the Factories and Industrial Undertakings Ordinance, Cap 59, alleged offences of a hybrid nature, conflating the provisions of ss 6A and 13, and failing to distinguish between the primary offence, under s 6A, and what might be called the derivative offence, under s 13, of which the primary offence is an element. In respect of those charges, the appellants were convicted of offences not known to the law, and their appeals must be allowed. Mr Justice Chan PJ : 92. The appeals in respect of the charges stated in para 10(1) and 11(1) above are allowed. The appeals in respect of the charges stated in para 10(2) and (3) and para 11(2) are dismissed. 93. Should any party wish to apply for costs, application should be made in writing within 14 days of today, replies, if any, within 7 days thereafter. Mr Gerard McCoy SC and Mr Daniel Hui, instructed by Ng AuYeung & Partners, for the Appellant in FACC4 of 2012 Mr Alexander S King SC, Mr Adrian J Halkes and Ms Shirley C Hung, instructed by Clyde & Co, for the Appellant in FACC 5 of 2012 Mr Robert YH Pang SC, instructed by the Department of Justice, and Ms Winnie Mok, Public Prosecutor of that Department, for the Respondent [1] The employer and the owner was Valley Best Investment Ltd. [2] Such duty includes: “(a) the provision and maintenance of plant and systems of work that are, so far as is reasonably practicable, safe and without risk to health; … (c) the provision of such information instruction, training and supervision as is necessary to ensure, … safety at work … ” s6A(2). [3] The penalties include imprisonment, eg under s 6A(4), if s 6A was contravened “wilfully and without reasonable excuse”, otherwise only a fine was payable under s 6A(B). As for the charges under the Regulations, Regulation 38A(2), 38B(1) and Regulation 47(1) (FACC 5/2012), carried under Regulation 68(2), fines of $200,000, but that in relation to Regulations 38A(2) and 38B(1), if the offences were committed “without reasonable excuse” imprisonment for 12 months could be imposed. [4] Section 6BA(15) was added by amendment in 1999 and is not relevant to these appeals. [5] Section 2, Health and Safety at Work etc Act 1974 c37 (1974 Act). [6] Section 7, 1974 Act is its equivalent. [7] Section 3, 1974 Act “(1) It shall be the duty of every employer to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that persons not in his employment who may be affected thereby are not thereby exposed to risks to their health or safety”. [8] Deputy Judge Toh described the prosecution’s case when discussing the appellant’s submission in these words: “31… that s13(1) in conjunction with s6A of (the Ordinance) can, upon proper construction, extend a proprietor’s general duties to persons not employed by him”. [9] Itself a consolidating legislation. [10] The Ordinance has over 30 Regulations, of which, the Regulation is the ninth. [11] At the second reading of the Amendment Bill, the Secretary for Education and Manpower said: “The sanction of custodial penalties will greatly enhance the deterrent effect of the law, particularly for those businesses which have come to regard the payment of fines as part of their overheads”. [12] Section 6A(4) and s 6B(3). And in the case of contravention of, eg, Regulation 38A(2) or 38B(1), “where the offence was committed without reasonable excuse” Regulation 68(2)(g). There is no custodial sentence for the breach of Regulation 47(1). See Regulation 68(2)(g). [13] Section 6 OSHO is comparable to s 6A of the Ordinance. [14] OSHO did not have an equivalent of s 13 of the Ordinance. [15] I will refer to such proprietors as the s 6A proprietor and s 13 proprietor respectively. [16] See footnote 3 above. [17] See para 10(2) & (3) above. [18] The actual work was performed by Wah Yip Engineering Co (“Wah Yip”), Lucky Engineering’s sub-contractor for the purpose. Power supply required “additional electrical wiring work for the (grey lights) up to the adaptable boxes on the cable trunking of the Catwalk so as to provide the power supply …” 4.2 Mr Siu’s report. [19] Under Lucky Engineering’s contract with the Jockey Club there was a clause allowing for contingency which might have covered payment for the grey lights. It appeared that payment for the grey lights would be routed through Lucky Engineering. [20] Code of Practice for the Electricity (Wiring) Regulations. [21] Statement of Findings. [22] See para 11(2) above. [23] Section 17. [24] See para 32 above. [25] See para 37 above. [26] See para 52 above. [27] See para 52 above. [28] Section 3, Interpretation and General Clauses Ordinance, Cap 1, definition of “Ordinance”.
Press Summary (English) Press Summary (Chinese) DCCC 546/2016 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 546 OF 2016 ------------------------------ ------------------------------ -------------------------------------- REASONS FOR VERDICT -------------------------------------- INTRODUCTION 1. The trial was conducted partly in English and partly in Chinese. However, as the case involves a number of legal issues the submissions for which were made in English, the parties have agreed that this verdict should be given in English. 2. The defendant stands trial before this court for one charge of misconduct in public office, contrary to Common Law and punishable under section 101I(1) of the Criminal Procedure Ordinance, Cap 221. The particulars of offence read as follows: “LEUNG Kwok-hung, being a public official, namely a member of the Legislative Council (“LegCo”) of the Hong Kong Special Administrative Region, between the 22nd day of May 2012 and the 23rd day of June 2016, both dates inclusive, in Hong Kong, in the course of or in relation to his public office, without reasonable excuse or justification, wilfully and intentionally misconducted himself by failing to declare or disclose to, or by concealing from LegCo his acceptance of a payment of $250,000 Hong Kong currency from LAI Chee-ying through Mark Herman SIMON on the 22nd day of May 2012.” 3. At this juncture, it is important to note the way in which the charge is pleaded: - (i) there is not only a conspicuous absence of any allegation of corruption in respect of the payment, but also an absence of any allegation that the payment was attached with conditions. It is also not the prosecution case that the payment was intended to make the defendant feel obliged to be favourably disposed to either Mr Lai or his business. In this regard, the present case is significantly different from the case of HKSAR v Hui Rafael Junior;[1] (ii) the alleged misconduct was one of nonfeasance (rather than misfeasance), namely the defendant’s alleged non-disclosure of his receipt of the payment. It is not the prosecution case that the defendant, as a LegCo Member, could not legally accept the money. Barring any corruption, he could. There were no rules against it, at least none has been suggested by the prosecution. The relevant provision in the Rules of Procedure (“ROP”) of LegCo which forms the plank of the prosecution case, namely Rule 83, only required the defendant to register in a prescribed form financial sponsorships which he received as a Member, directly or indirectly, from any person or organization. This, the prosecution says, the defendant had failed to do; (iii) the nonfeasance is said to be “intentional” and the prosecution has nailed its colours to the mast by confirming in court that they do not rely on “recklessness” as a basis of conviction; and (iv) the prosecution says that the alleged misconduct had deprived the public’s right to know about any actual, perceived or potential conflict of interest and had undermined the public confidence of the effective discharge of the office by LegCo Members and in this sense the alleged misconduct was a serious one. 4. Having said that, there is no criticism, expressed or implied, from this court as to the way the prosecution has chosen to plead and conduct its case. Far from it, this court has obtained great assistance from both prosecuting and defence counsel. Furthermore, if I may say so, the prosecution team has conducted the trial and presented the available evidence with customary professionalism and fairness. However, since this case has attracted some publicity, it is desirable for this court to highlight the aforesaid salient features at the outset so that there would not be any misunderstanding as to the exact nature and scope of the offence charged. 5. There is another important point to note about the prosecution case. As a matter of evidence, the prosecution relies on the defendant’s knowledge of and participation in the LegCo debate of a motion on 22 January 2014. That motion was about editorial independence and autonomy in Hong Kong. During the motion debate the name of Mr Lai and “Apple Daily” (a newspaper over which Mr Lai had control) were mentioned in passing by Members other than the defendant.[2] The motion was not proposed by the defendant and there is nothing to suggest that the defendant’s speech or vote on the motion was in any way influenced by the alleged payment from Mr Lai. Moreover, the prosecution is at pains to emphasize that there is no challenge to the propriety or otherwise of the defendant’s speech or vote on that occasion. 6. On the other hand, the prosecution says that the motion must have at least reminded the defendant of the need to register with LegCo his payment of $250,000 from Mr Lai and the defendant’s failure to do just that even after the motion adds to the seriousness of the non-disclosure. Other factors which the prosecution says also contribute to the seriousness of the alleged misconduct include the importance of the office of a LegCo Member and the responsibility of the officer-holder, the size of the alleged payment as well as the fact that the defendant had failed to make disclosure in spite of the numerous opportunities available for him to do so over the 4-year period between the date of payment (22 May 2012) and the date of his arrest (23 June 2016). 7. As can be seen from the way the trial was conducted, the major factual issue for this court to decide is whether the $250,000 from Mr Lai was (a) a donation (as the prosecution says) to the defendant personally; or (b) a donation (as the defence says) to the League of Social Democrats (“LSD”) of which the defendant was the Chairman. However, before I evaluate the evidence and deal with the factual issues, it is necessary for me to give reasons for my decision on two pre-trial issues raised by the defence which are fundamental to the trial. PRE-TRIAL ISSUES 8. Before the trial proper, on 23 May 2017 counsel for the defendant, Mr Martin Lee, SC (and with him Mr Hector Pun, SC, Mr Carter Chim and Mr Anson Wong) raised before this court two preliminary legal issues, namely: - (i) whether this court has jurisdiction to try the Defendant in respect of the offence of MIPO as set out in the Charge (“the First Issue”); and (ii) whether certain documents of the Legislative Council (“LegCo”) (to be produced through a number of LegCo officers) which the Prosecution intends to adduce at trial are admissible (“the Second Issue”). 9. The defence submission as regards the First Issue was based on the Common Law doctrine of “parliamentary privilege” and there were two limbs to it, namely “freedom of speech” in and “exclusive cognisance” of LegCo. As regards the Second Issue, it was submitted that the documents in dispute were covered by “parliamentary privilege” as well as ss 3 & 4 of the Legislative Council (Powers and Privileges) Ordinance, Cap 382 (“LCPPO”) so that they were not admissible as evidence in court. RULING ON PRE-TRIAL ISSUES 10. Having considered submissions from the prosecution and the defence, both written and oral, on 31 May 2017 this court ruled that: - (i) as regards the First Issue, this court has jurisdiction to try the Defendant in respect of the charge of MIPO that he is facing, there being no infringement of any “parliamentary privilege” as submitted by the defence; and (ii) as regards the Second Issue, the evidence of the five LegCo officers and the LegCo documents (which consist of enclosures (14) to (27) attached to the Prosecution’s Submission and List of Authorities on Preliminary Legal Issues) are admissible for the limited purpose of proving what was done and said in LegCo meetings or its proceedings as a matter of history. They are not admissible for the purpose of proving that those words were improperly spoken or that they were spoken with an improper purpose. This is without prejudice to any objections other than “parliamentary privilege” which the defence may raise against their admissibility during the course of the trial. Moreover, if during the trial there is any dispute that the intended use of the said evidence or documents would in fact go beyond the terms of this ruling, or in any other way infringe the protection offered by ss 3 or 4 of LCPPO, the court would re-visit the issue and give further rulings or directions. 11. I said that the reasons for the above ruling would be given in due course. This, I now do. REASONS FOR THE RULING ON PRE-TRIAL ISSUES Freedom of speech and debate in LegCo 12. The following articles of the Basic Law are pertinent to the pre-trial issues raised by the defence: Article 75 “The rules of procedure of the Legislative Council shall be made by the Council on its own, provided that they do not contravene this Law.” Article 77 “Members of the Legislative Council of the Hong Kong Special Administrative Region shall be immune from legal action in respect of their statements at meetings of the Council.” 13. Although Article 77 refers only to “meetings of the Council”, it was held by Andrew Cheung J (as he then was ) in Cheng Kar Shun and Anor v the Honourable Li Fung Ying & Ors[3] that, reading in its context, the article clearly intended to also cover meetings of its committees. His lordship said, “As a matter of language, ‘Legislative Council’ in art 73 is quite clearly capable of meaning the Legislative Council functioning as a full body or the Council functioning through committees, as the individual context may require, just as the term is capable of such interpretation under arts 62(6), 77 and 78.” 14. Apart from the Basic Law, the following provisions in LCPPO are also pertinent: “3. Freedom of speech and debate There shall be freedom of speech and debate in the Council or proceedings before a committee, and such freedom of speech and debate shall not be liable to be questioned in any court or place outside the Council. 4. Immunity from legal proceedings No civil or criminal proceedings shall be instituted against any member for words spoken before, or written in a report to, the Council or a committee, or by reason of any matter brought by him therein by petition, Bill, resolution, motion or otherwise.” 15. There can be no doubt that the protection provided by ss 3 & 4 of LCPPO is, in part at least, inspired by Article 9 of the Bill of Rights 1688 of the UK[4] which says: “That the freedome of speech and debates or proceedings in Parlyament ought not to be impeached or questioned in any court or place out of Parlyament.” 16. In Pepper v Hart,[5] Lord Browne-Wilkinson commented on the object of article 9 of the Bill of Rights and said as follows: “Article 9 is a provision of the highest constitutional importance and should not be narrowly construed. It ensures the ability of democratically elected Members of Parliament to discuss what they will (freedom of debate) and to say what they will (freedom of speech) . . . In my judgment, the plain meaning of article 9, viewed against the historical background in which it was enacted, was to ensure that Members of Parliament were not subjected to any penalty, civil or criminal, for what they said and were able, contrary to the previous assertions of the Stuart monarchy, to discuss what they, as opposed to the monarch, chose to have discussed.” 17. I am of the view that, based on the fact that ss 3 & 4 of LCPPO owe their origin to article 9 of the UK Bill of Rights as well as the similarities both in purpose and in terms between the aforesaid provisions in the Basic Law and LCPPO (collectively referred to as “the Hong Kong provisions”) on the one hand and article 9 of the Bill of Rights 1688 on the other, UK case authorities on article 9 could be of assistance in the interpretation of the Hong Kong provisions. 18. On the other hand, it is important to note that the UK case authorities on article 9 of the Bill of Rights 1688 have to be adapted to the situation in Hong Kong with caution because of the following reasons: - (a) the Hong Kong provisions and article 9 of the Bill of Rights, though similar, are not identical; (b) although article 9 of the Bill of Rights and s 3 of LCPPO are similar and both of them refer to “proceedings”, the former is a constitutional document and the latter is not. Therefore, a more flexible technique of interpretation which would be appropriate for the former may not be so appropriate for the latter. The approach that I am going to adopt for the interpretation of the relevant provisions in LCPPO is the “purposive approached” as pronounced by the Court of Final Appeal in HKSAR v Cheung Kwun Yin;[6] (c) the context in which the word “proceedings” is used in s 3 of LCPPO is also different from that of article 9 of the Bill of Rights: (i) in article 9, it says that “proceedings in Parlyament ought not to be impeached or questioned in any court or place out of Parlyament” and this give rise to the jurisprudence of the absolute bar against any questioning of “proceedings” of Parliament and a series of cases on the meaning of the word “proceedings” in that article; and (ii) what s 3 says, however, is just that “freedom of speech and debate in … proceedings … shall not be liable to be questioned in any court”. Unlike article 9, there is no express bar against “impeaching” or “questioning” of proceedings in either s 3 or s 4. Moreover, s3 is not dealing with just any proceedings of LegCo but specifically “proceedings before a committee”. 19. Therefore, in my humble view whilst ss 3 & 4 of LCPPO are modelled on article 9 of the Bill of Rights, the protection provided under the two provisions may not be the same as that provided under article 9 of the Bill of Rights in that the formers appears to be more restrictive in scope than their UK counterpart, with the result that UK case authorities on the absolute bar against any “questioning” of “parliamentary proceedings” may not be not directly applicable to Hong Kong: cf the judgement of Au J in Chief Executive of the HKSAR v President of the Legislative Council.[7] Besides, in my view in determining the scope of the protection provided by the Hong Kong provisions, the courts should be guided by the non-intervention principle as pronounced by the Court of Final Appeal in Leung Kwok Hung v President of the Legislative Council (No 1) [8]and the test of “necessity” which was adopted in that case.[9] 20. Bearing the above caveat in mind, I now turn to consider the meaning of “proceedings” in s 3 of LCPPO. The first thing to note is that the word has not been defined in LCPPO or the Bill of Rights 1688. However, the word is used in LCPPO in the following ways: ● s 2 defines “Chamber (會議廳)” as “the Chamber in which the proceedings of the Council are conducted” and “journals (議事錄)” as “the minutes of the Council or the official record of the votes and proceedings thereof”; ● s 3 refers to “freedom of speech and debate in the Council or proceedings before a committee …”; ● s 7(1) refers to “any proceedings or examination held before the Council or committee”; ● in s 16, the word “proceedings” clearly refers to a hearing or inquiry before the Council or a committee, during which a person may be asked to give evidence or to produce documents; and ● s 17 creates an offence for any person who “creates or joins in any disturbance which interrupts or is likely to interrupt the proceedings of the Council or a committee while the Council or such committee is sitting”. By a plain and naturally reading of the above, the word “proceedings” in LCPPO whenever it appears clearly refers to those occasions where Members meet to conduct the business of LegCo, whether in plenary sessions or in committees. 21. Moreover, I find the following passage from Erskine May’s Treatise on the Law, Privileges, Proceedings and Usage of Parliament[10]instructive: “The primary meaning of proceedings, as a technical parliamentary term, which it had at least as early as the seventeenth century, is some formal action, usually a decision, taken by the House in its collective capacity. While business which involves actions and decisions of the House are clearly proceedings, debate is an intrinsic part of that process which is recognised by its inclusion in the formulation of article IX. An individual Member takes part in a proceeding usually by speech, but also by various recognized forms of formal action, such as voting, giving notice of a motion, or presenting a petition or report from a committee, most of such actions being time-saving substitutes for speaking.” (Emphasis supplied) 22. According to the ways in which the word “proceedings” is used in LCPPO, applying the above passage from Erskine May’s insofar as it is relevant to Hong Kong and bearing in mind that it is the freedom of speech and debate in LegCo that ss 3 & 4 of LCPPO is intended to protect, I am of the view that the phrase “proceedings before a committee” in s 3 of LCPPO refers to some formal action, including meetings, decision-makings, hearings or inquiries, of LegCo (or its committees[11]) acting in a collective capacity during the process of which speaking and debating forms an intrinsic part. 23. I now turn to consider the scope of the protection collectively provided by the Hong Kong provisions. In this regard, as aforesaid I am guided by the non-intervention principle and the test of “necessity”. Besides, I have also derived some assistance from the judgment of the House of Lords in R v Chaytor[12] and the speech of Lord Phillips (who gave the leading judgment) in particular. 24. R v Chaytor was a case about charges of false accounting which were laid against certain members of Parliament basing on claims they had submitted for allowances and expenses. A major issue in that case was whether those claims for allowances and expenses formed part of the “parliamentary proceedings” and therefore were subject to the absolute privilege provided by article 9. Lord Phillips, after a critical review of the relevant case authorities,[13] had the following to say about article 9: “47 The jurisprudence to which I have referred is sparse and does not bear directly on the facts of these appeals. It supports the proposition, however, that the principal matter to which article 9 is directed is freedom of speech and debate in the Houses of Parliament and in parliamentary committees. This is where the core or essential business of Parliament takes place. In considering whether actions outside the Houses and committees fall within parliamentary proceedings because of their connection to them, it is necessary to consider the nature of that connection and whether, if such actions do not enjoy privilege, this is likely to impact adversely on the core or essential business of Parliament.” 25. After a most detailed discussion, his lordship came to the conclusion that precedent,[14] the views of Parliament[15] and policy[16] all pointed in the same direction that submitting claims for allowances and expenses does not form part of, nor is it incidental to, the core or essential business of Parliament, which consists of collective deliberation and decision making. It was further held that the submission of claims was an activity which was an incident of the administration of Parliament; it was not part of the proceedings in Parliament. 26. In my humble view the following principles, which I have derived from R v Chaytor, are also applicable to the Hong Kong provisions: - (i) in determining the scope of the protection offered by the Hong Kong provisions, regard has to be given to their aim, namely the protection of freedom of speech and debate in LegCo and its committees; (ii) the aforesaid protection is capable of being extended to cover actions outside the “proceedings” of LegCo, if those actions can be regarded as part of the “proceedings” because of their connection to them; and (iii) whether or not the actions in question are so covered by the protection would depend on the nature of that connection and whether, if such actions do not enjoy privilege, this is likely to impact adversely on the freedom of speech or debate in LegCo which is its core or essential business and which the Hong Kong provisions are intended to protect. 27. It is well-established that the protection of article 9 is absolute and cannot be waived by Parliament: see R v Chaytor.[17] In this regard, in view of the mandatory terms in which ss3 & 4 of LCPPO are expressed, it would appear that the protection provided by them is also absolute in the sense that the protection cannot be waived even by LegCo. However, there are no direct case authorities on this point. For the purpose of the present case, it is not necessary for me to decide on this issue. I am prepared to work on the basis that the protection provided by ss 3 & 4 of LCPPO is absolute in that it cannot be waived. However, as can be seen from the discussion below, nothing really turns on this. Parliamentary privilege 28. “Parliamentary privilege” is a Common Law principle which predates and is wider in scope than the Bill of Rights 1688. Thus, in Prebble v Television New Zealand Ltd[18] at 413, [1995] 1 AC 321 at 332, Lord Browne-Wilkinson, giving the advice of the Judicial Committee of the Privy Council, said:[19] “ In addition to art 9, there is a long line of authority which supports a wider principle, of which art 9 is merely one manifestation, viz that the courts and Parliament are both astute to recognise their respective constitutional roles. So far as the courts are concerned they will not allow any challenge to be made to what is said or done within the walls of Parliament in performance of its legislative functions and protection of its established privileges: Burdett v Abbott (1811) 14 East 1, 104 ER 501, Stockdale v Hansard (1839) 9 Ad & El 1, 112 ER 1112, Bradlaugh v Gossett (1884) 12 QBD 271, British Railways Board v Pickin [1974] 1 All ER 609, [1974] AC 765, Pepper v Hart [1993] 1 All ER 42, [1993] AC 593.” 29. In Hamilton v Al Fayed,[20] Lord Browne-Wilkinson, this time giving the judgment of the House of Lords, said,[21] “The normal impact of parliamentary privilege is to prevent the court from entertaining any evidence, cross-examination or submissions which challenge the veracity or propriety of anything done in the submissions which challenge the veracity or propriety of anything done in the course of parliamentary proceedings. Thus, it is not permissible to challenge by cross-examination in a later action the veracity of evidence given to a parliamentary committee.” 30. The UK Government has given a succinct explanation of “parliamentary privilege”, in the Green Paper: Parliamentary Privilege (“the Green Paper”), [22]as follows: “15. Parliamentary privilege is a protection for the proceedings of Parliament – debates, committee hearings, votes and so forth – and only indirectly for the individuals who participate in them. It is a safeguard to ensure that parliamentarians, including the public’s elected representatives, are able to carry out their duties to the best of their ability, and that all of Parliament’s vital constitutional functions can be carried out to the highest possible standards. It is in short a necessity, just as legal professional privilege (confidentiality of discussions with clients) is a necessity, if people are to feel able to speak honestly with their lawyers.” 31. The origin/justification for parliamentary privilege has been variously stated, including historical development, functional necessity, the constitutional doctrine of separation of powers and (in the United Kingdom) the sovereignty of Parliament. However, in Leung Kwok Hung v President of the Legislative Council (No 1), supra, it is authoritatively held by the Court of Final Appeal, insofar as Hong Kong is concerned, that:[23] “it is preferable now to regard the relationship between a legislature and the courts as an outcome of the application of the doctrine of the separation of powers. This doctrine is a common law doctrine which, in the case of Hong Kong, is reinforced by the constitutional separation of powers provided for by the [Basic Law]. In other words, the principle of non-intervention is only a self-restraint imposed by the courts in the exercise of jurisdiction rather than a matter which goes to jurisdiction: see Chief Executive of HKSAR v President of the Legislative Council (CA).[24] 32. The Court of Final Appeal went on to say:[25] “28. In construing and applying the provisions of the Basic Law, it is necessary not only to apply common law principles of interpretation but also principles, doctrines, concepts and understandings which are embedded in the common law. They include the doctrine of the separation of powers and, within it, the established relationship between the legislature and the courts. This relationship includes the principle that the courts will recognise the exclusive authority of the legislature in managing its own internal processes in the conduct of its business, in particular its legislative processes. The corollary is the proposition that the courts will not intervene to rule on the regularity or irregularity of the internal processes of the legislature but will leave it to determine exclusively for itself matters of this kind (the non-intervention principle).” 33. The Court of Final Appeal also stressed that the principle of non-intervention is necessarily subject to constitutional requirements.[26] Thus, it was held that the courts would exercise jurisdiction to determine the existence of a power, privilege or immunity of LegCo or its President. The test is one of necessity, namely the privilege claimed is one without which the dignity and efficiency of the legislature cannot be upheld.[27] The courts would not, however, exercise jurisdiction to determine the occasion or the manner of exercise of any such powers, privileges or immunities.[28] 34. Speaking in the same vein, Cheung CJHC, affirming the decision of Au J in Chief Executive of HKSAR v President of the Legislative Council (CA),[29] highlighted the difference between the UK position and the Hong Kong position as follows: “24. However, in a jurisdiction like Hong Kong where a written constitution (that is, the Basic Law), rather than the legislature, is supreme, where the rule of law reigns and where the courts are given under the constitution the independent power of adjudication, this principle of non-intervention has its own inherent limit. 25. First and foremost, the supremacy of the Basic Law means that no one – the legislature included – is above the Basic Law. In other words, where a constitutional requirement under the Basic Law is in issue, even the legislature cannot act contrary to that requirement under the Basic Law. Secondly, given that the courts are given under the constitution the independent power of adjudication of the Special Administrative Region, the question of whether that constitutional requirement has been complied with or breached is a matter which it is both the power and responsibility of the courts to decide. As the Court of Final Appeal importantly pointed out in Leung Kwok Hung, paragraph 32: ‘In this respect it is important to recognise that the principle of non-intervention is necessarily subject to constitutional requirements.’” 35. Ms Lai, SC (and with her, Mr Johnathan Lin) for the prosecution submits that “parliamentary privilege” enjoyed by LegCo and its Members are “fully set out” in the Basic Law and LCPPO. If by this she means that the “wider principle” of Common Law referred to by Lord Phillips in R v Chaytor has been wholly replaced and therefore no longer applicable to Hong Kong, then with respect I am unable to agree. First, even on the basis that LCPPO is a codifying statute[30] so that the starting point must be the language of its provisions, it does not automatically follow that the common law is no longer relevant: cf Sky Heart Ltd v Lee Hysan Co Ltd.[31] Secondly, neither Leung Kwok Hung v President of the Legislative Council (No 1) nor the subsequent local case authorities following it has the effect that Ms Lai seems to be contending for. To the contrary, it is expressly recognized by the Court of Appeal in Chief Executive of HKSAR v President of the Legislative Council (CA) that the principle of non-intervention “is an established principle of common law which is of seminal importance and high constitutional significance.”[32] 36. Bearing in mind the aforesaid, for the present purpose I consider that the following which was said in R v Chaytor is also pertinent to the common law principle of “parliamentary privilege” as applicable in Hong Kong based on the non-intervention principle: - (i) in determining whether the matter under consideration pertains to the internal processes of LegCo in the conduct of its business and thus falls within the sphere of “parliamentary privilege”, the court will pay due regard to any views expressed by LegCo or by bodies or individuals in a position to speak on the matter with authority; (ii) the common law privilege, if exists, belongs to LegCo and not to individual Members and thus only LegCo has the right to waive or relinquish it;[33] (iii) as an analytical tool, a distinction may be drawn between an “ordinary crime” (such as theft) and a crime (such as sedition) which a Member committed by saying something in the exercise of his freedom of speech and debate in LegCo. In relation to the latter, it would be necessary for LegCo to have exclusive authority so that LegCo’s dignity and efficiency of the legislature can be upheld. However, in relation to the former it would not be so necessary even if the offence is alleged to have been committed entirely within the precincts of LegCo; [34] and (iv) there are, however, criminal conducts over which LegCo and the courts have different and overlapping jurisdictions, such that LegCo may take disciplinary proceedings for contempt and the court may try the offender for the crime.[35] 37. The above principles, I trust, are in harmony with the reservations expressed in the local case authorities as to the applicability of UK case law on “exclusive cognizance” in Hong Kong. The First Issue 38. Mr Lee submits that: - (a) the Register of the LegCo Members” interests[36] (“the Register”) fall within the definition of “proceedings” in LegCo. As such, the LegCo’s jurisdiction “to investigate and adjudicate upon an alleged wrongful failure to register” is absolute and exclusive. In other words, it falls within the exclusive cognisance of LegCo; and (b) the prosecution and trial of the defendant on the charge would create a “chilling effect” which parliamentary privilege is meant to eliminate. For it threatens not only the freedom of speech of the defendant, but also that of all the other Members of LegCo, in contravention of the Hong Kong provisions. As regards (a): exclusive authority of LegCo 39. Mr Lee places heavy reliance on the views of the Joint Committee on Parliamentary Privilege of the House of Lords and the House of Commons (“the Joint Committee”) expressed in its 2013-2014 Report. The Joint Committee opines, somewhat categorically, that the investigation and adjudication upon an alleged wrongful failure to register an interest by a member of Parliament ought to be a matter for Parliament alone. Thus, the Joint Committee recommends that: “if legislation on parliamentary privilege is contemplated, it should clarify that the registers of members’ interests, and other Registers prescribed by resolution of either House, are proceedings in Parliament for the purposes of Article 9 of the Bill of Rights.”[37] 40. It is pertinent to note that the above opinion of the Joint Committee is a response to the first instance decision of Popplewell J in Rost v Edward[38] that the Register of Members’ Interests was not a proceeding in Parliament. That was a case of defamation in which both the plaintiff (a member of Parliament) and the defendants (the journalist, the editor and the publisher of an article) wanted to use the Register of Members” Interests for their respective case in court.[39] Popplewell J’s approach to the issue was that the Register of Members’ Interest fell within a “grey area” as to whether it was Parliament or the courts which should have exclusive jurisdiction. His lordship said that in such a case: “a court, while giving full attention to the necessity for comity between the courts and Parliament, should not be astute to find a reason for ousting the jurisdiction of the court and for limiting or even defeating a proper claim by a party to litigation before it.” The learned judge concluded, in the absence of clear case authorities or provisions covering the matter, that the Register of Members’ Interest did not fall within the definition of “proceedings in Parliament”. Accordingly, his lordship ruled that it was open to the plaintiff to give the evidence that he sought to do in relation to the registration of members’ interest and it was open to the defendants to challenge that evidence.[40] 41. Rost v Edward has been subject to serious criticism. However, since the action was subsequently settled between the parties, there was no appeal from that judgment. Nevertheless, the Joint Committee notes that the correctness of Rost v Edwards was doubted by the Privy Council in Prebble v Television New Zealand Ltd[41] in 1995. The Joint Committee also notes that in the following year the effect of Rost v Edwards was reversed by the passing of the Defamation Act 1996 which specifically lists any communication with “any person having functions in connection with the registration of members’ interests’ as a proceeding in Parliament. 42. As regards Mr Lee’s reliance on the opinion of the Joint Committee, I have the following observations: (a) whilst due weight should be given to the aforesaid view of the Joint Committee as to what should fall within the sphere of “internal processes” of the legislature in conducting its own business, it is the view of our LegCo, its practice and convention which have a heavier bearing on the issue that this court is asked to decide. However, LegCo, by giving special leave for its officers to give evidence and to produce documents at this trial, obviously has not claimed exclusive jurisdiction over the issue. To the contrary, LegCo is facilitating the trial; (b) regarding Mr Lee’s reliance on the very broad proposition made in Bradlaugh v Gosset,[42] that case has now to be viewed in the light of the qualification noted in R v Chaytor[43] and also in Chief Executive of the HKSAR v President of the Legislative Council (CA);[44] (c) the opinion and the recommendation of the Joint Committee has to be viewed against the backdrop of article 9 of the Bill of Rights 1688 which presents an absolute bar against any impeaching or questioning of “proceedings” in Parliament in any court out of Parliament. There is, however, no such absolute bar in Hong Kong; (d) although it is true that Rost v Edwards was criticised in Prebble v Television New Zealand Ltd, what was said by the Privy Council about that case is as follows: “A number of the authorities on the scope of article 9 betray some confusion between the right to prove the occurrence of Parliamentary events and the embargo on questioning their propriety. In particular, it is questionable whether Rost v Edwards [1990] 2 QB 460 was rightly decided.”[45] Therefore, the criticism of the Privy Council aimed at a different aspect of Rost v Edwards. Furthermore, as can be seen in the discussion below, the distinction in purpose made by the Privy Council between “proving occurrence” and “questioning propriety” is in fact against Mr Lee’s submission regarding the admissibility of the LegCo documents; and (e) it is not clear when Popplewell J ruled that the claims for privilege in respect of the Register of members’ Interests did not fall within the definition of “proceedings in Parliament,” his lordship was referring to article 9 of the Bill of Rights 1688. If so, then his ruling would not, in my view, be pertinent to the Hong Kong provisions. Ms Lai has disavowed any reliance on Rost v Edwards. As such, Mr Lee’s submission on Rost v Edwards seems to involve a “straw man fallacy” in that even if the case were wrongly decided, it would not affect the prosecution’s argument in this case. In any event, the case is not binding on this court. For avoidance of doubt, I do not rely on Rost v Edwards either and therefore it would not be necessary for me to decide on its correctness. 43. Mr Lee further relies on the fact that LegCo has its own Rules of Procedure (“ROP”),[46] made pursuant to article 75(2) of the Basic Law, to regulate matters about disclosure of interests by its members and has set up a standing committee, the Committee on Members’ Interests (“CMI”), to oversee those matters. This, Mr Lee, submits, shows that declaration of interests is an internal matter of LegCo which is “absolute and exclusive” and “cannot be questioned in law”. 44. With respect, I am unable to accept the above submission of Mr Lee. First, the fact that LegCo has its own internal rules to regulate disclosure of interests by its members does not necessarily lead to the conclusion that the matter is “absolutely and exclusively” within the province of LegCo. For example, s 45(2) of the ROP says: “(2) The President, the Chairman of a committee of the whole Council or the chairman of any committee shall order a Member whose conduct is grossly disorderly to withdraw immediately from the Council or the committee for the remainder of that meeting; and the Clerk or clerk of any committee shall action order received by him from the Chair to ensure compliance with this order.” At s 87 of the ROP, it says: “The President, Chairman of a committee of the whole Council or chairman of a committee or subcommittee may order the removal from a meeting of any member of the press or of the public who behaves, or who appears likely to behave, in a disorderly manner.” I do not considered that the above provisions mean that the courts could not deal with a person or a Member who is accused of disorderly conduct committed within LegCo’s precincts: see for example, HKSAR v Leung Hiu Yeung & Ors (transliteration).[47] As noted above, there are matters which LegCo and the courts can have different and overlapping jurisdictions. 45. Secondly, I am unable to agree with the broad proposition that a misconduct by a Member relating to disclosure of interest, whether trifle or serious, would inevitably be an internal matter of LegCo so that the court must abstain from dealing with it. In this regard, I note that the charge of misconduct in public office would not be made out unless the misconduct in question was “wilful”, “without reasonable excuse or justification” and “serious”: see Sin Kin Wah v HKSAR.[48] Applying to the present case, the common law offence would bite only those cases of non-disclosure of interest by members which are so serious as to warrant criminal sanction. The seriousness of an alleged misconduct would very often depend on its legal and factual context: see the recent comments of the Court of Final Appeal in Chan Tak Ming v HKSAR.[49] 46. Thirdly, there are strong policy reasons as to why LegCo should not be dealing with cases of serious criminal conduct: (i) LegCo has no judicial authority[50] and all it can do, in case of a breach of ROP, is to admonish, reprimand or suspend the Member concerned;[51] (ii) there is doubt as to whether LegCo is sufficiently equipped to satisfy all the due process requirements before imposing penal sanctions: cf Demicoli v Malta;[52] and (iii) the inability of LegCo to impose penalty on its Members of a sufficient severity commensurate with the seriousness of the criminal conduct alleged to have been committed in the course of or in relation to their public office would tend to weaken, rather than strengthen, the public confidence reposed in LegCo in the discharge of its important constitutional duty. 47. Fourthly, the corollary of (iii) above is that giving LegCo the exclusive authority to deal with the misconduct of a Member so serious as to warrant the common law offence would not be necessary for upholding its dignity and efficiency. Thus, the necessity test adopted in Leung Kwok Hung v President of the Legislative Council (No 1) would not be met. 48. Fifthly, even assuming that non-disclosure in question falls within the common law parliamentary privilege of LegCo, there is evidence before me and I am so satisfied that LegCo has waived that privilege in the present case. This is the inference I draw from the special leave given by LegCo for its officers not only to give evidence at the trial and but also to produce the Register and the other documents in court. See the note dated 28 November 2016 issued by Clerk to Legislative Council to its Members for “Council Meeting on 30 November 2016” and the reply letter dated by 2 December 2016 by the Secretary General of the Legislative Council Secretariat to the Prosecution. If LegCo had intended to assert exclusive authority on the subject matter of the charge, it would not have granted the special leave. As regards (b): Chilling effect 49. Mr Lee places reliance on a paper presented by the UK Government to Parliament on “Parliamentary Privilege” in April 2012 (“the Green Paper”) where it says: “If the approach of disapplying the protection of privilege were to be followed, the principal consequence of this proposal that would need to be mitigated is the creation of a ‘chilling effect’ to free speech by the possibility of criminal liability from that speech. A ‘chilling effect’ would take place if any participant in proceedings were prevented from making whatever contribution to proceedings the participant felt was appropriate, by a concern that their words would end up being examined in court. In the view of Sir William McKay, a former Clerk of the House of Commons, when talking about the possible disapplication of the protection of privilege when there were allegations of bribery, any chilling effect would be ‘too high a price to pay for the remedying of a very, very serious but very rare mischief’.” 50. However, it needs to be pointed out that it is not the view stated in the Green Paper that there should be blanket protection given to parliamentarians for what they would say in the proceedings of Parliament. Rather, the Green Paper proposes that, in spite of any possible “chilling effect”, parliamentary privilege should be disapplied in respect of certain criminal offences. For example, the Green Paper notes, in respect of bribery and corruption: “The previous Government and the Joint Committee on Parliamentary Privilege saw the need for legislation here as greater than the danger of the potential chilling effect.”[53] In respect the offences of making a false or misleading statement, conspiracy to defraud and blackmail, the Green Paper says, “It is difficult, if not impossible to think of circumstances in which it would be appropriate for anyone to commit any of these offences in proceedings. This being the case, the chilling effect in allowing prosecutions for these offences to use parliamentary material would be limited: participants participating in good faith in proceedings would have no reason to be nervous owing to a fear of being prosecuted for any of these offences. There could though, remain the fear that participants could be called to court as witnesses and end up having to justify what they said.”[54] 51. For the sake of completeness, I need to point out that the Green Papers advises not to disapply parliamentary privilege in respect of the offence of misconduct in public office. However, that is because of the perceived wide and uncertain scope of the offence. The Green Papers advises that the offence could be reconsidered after it is codified. 52. In the present case, I do not agree that the prosecution of a LegCo Member for “wilful” and “serious” non-disclosure of interest which is “without reasonable excuse or justification” as alleged in the present case would have the chilling effect as Mr Lee suggests. As discussed above, the common law offence does not bite cases of misconduct which might have been inadvertently or negligently committed. For the purpose of the common law offence, “mere inadvertence is not enough”: see Shum Kwok Sher v HKSAR.[55] Moreover, the basis of the prosecution in the present case is not about what the defendant had said in the meetings of LegCo. It is about the allegation that the defendant had intentionally failed to make disclosure when he was fully aware of his duty to do so. Therefore, members who have just been careless should have no reason to be anxious of the possibility of being prosecuted for the common law offence. 53. Based on the above, in my view the present prosecution would not have a “chilling effect” as contended on a Member’s freedom of speech and debate in LegCo. 54. As regards Mr Lee’s reliance on HKSAR v Chow Nok Hang[56] and his submission that freedom of speech, “like all fundamental rights and freedoms, must be given a generous interpretation … Any law which purports to restrict such right must be narrowly interpreted.” With respect, this submission loses sight of the proper balance which needs to be struck between the protection of freedom of speech and debate in the legislature on the one hand and the equality before the law[57] on the other. I note also that HKSAR v Chow Nok Hang is not a case on parliamentary privilege but on freedom of demonstration. Moreover, what Chan PJ said in that case was that: “The right to freedom of expression, like all fundamental rights and freedoms, must be given a generous interpretation. (See Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4.) But this right is not absolute and may be subject to restrictions as prescribed by law in the interest of public order and for the protection of the rights and freedoms of others.” Therefore, the passage quoted above is in fact in harmony with what was said in Leung Kwok Hung v President of the Legislative Council (No 1) that the non-intervention principle is subject to constitutional constraint. Conclusion on the First Issue 55. For the reasons given above, I reject the defence argument on the First Issue. I rule that the present case is not covered by parliamentary privilege and does not contravene any of the protection provided by the Hong Kong provisions. I rule that this court has jurisdiction to try this case. The Second Issue 56. What is in dispute under this head is the admissibility of: (a) the Register; (b) the evidence of five LegCo officers, namely, Mr Leung Siu Kei (PW1), Mr Wong Kin Man (PW4), Mr Chan Che Fai Bosco, Ms Szeto Siu Wa (PW5) and Ms Sit Fung Ming Anita (PW6); and (c) some of the documents of the LegCo (collectively “the Disputed Evidence”). 57. As noted above, special leave has been given by LegCo under s7 of LCPPO for its officers to give evidence at this trial and to produce the documents in question. However, Mr Lee submits that the fact that special leave has been given does not mean that the evidence is therefore admissible. This, Mr Lee submits, is because: (i) the documents are “proceedings” of LegCo and therefore are inadmissible under s 3 of LCPPO; and (ii) the leave of LegCo was expressly given without prejudice to the privileges provided in ss 3 & 4 of LCPPO. As regards (i): Proceedings 58. With respect I am unable to accept that the Register in question forms part of the “proceedings” of LegCo. As discussed above, “proceedings” refer to the formal action of LegCo in its collective capacity whether in its plenary sessions or its committees. The filing of a declaration by a Member, however, is his or her individual act. That the filing of a declaration is a “time-saving” device is, in my view, besides the point[58] and not in itself sufficient to turn a Member individual act into a part of the proceedings of LegCo. Therefore, it follows that the Register, which is just a compilation of all the declarations filed by Members, also does not form part of the proceedings of LegCo. 59. As aforesaid, I am of the view that the protection of “freedom of speech and debate” is capable of being extended to cover actions outside LegCo meetings and its committees, if those acts bear a sufficiently close connection with the core and essential business of LegCo so that if they are not covered there would be an adverse impact on the freedom of speech and debated protected by the Hong Kong provisions. However, in the present case I do not consider that the Register has such a close connection. Besides, I do not think that there would be any adverse effect on the freedom of speech or debate in LegCo if the Register is not precluded from being produced in court as evidence. 60. I draw some comfort by the fact that my aforesaid conclusion about the nature of the Register is also supported by the correspondence between the Prosecution and LegCo. In the letter from LegCo to the Prosecution dated 29 September 2016, it was said: “ I refer to your letter dated 14 September 2016 in which the Department of Justice sought the special leave of the Council for seven officers of the Council to give evidence and to produce documents as set out in the Appendix to the letter (“specified documents”. To facilitate the Council’s consideration of the application, I should be grateful if you would provide the supporting reasons as required under Rule 90(1) of the Rules of the Procedure of the Legislative Council (“LegCo”), including how and why evidence of the respective specified documents is necessary for the above criminal proceedings. Under section 7 of the Legislative Council (Powers and Privileges) Ordinance (Cap. 382), no member or officer of the Council shall give evidence elsewhere in respect of the contents of any document laid before the Council or committee, or in respect of any proceedings before the Council or committee, without the special leave of the Council. In this regard, please consider whether evidence of some of the specified documents fall under section 7 of Cap. 382, Examples of such documents are copies of Registration Forms on Members” interests furnished by some LegCo Members, documents relating to Orientation Seminars for Members … and those relating to claims for reimbursement of office operation expenses, etc. Insofar as the specified documents relate to the official records of proceedings of the Council, video recordings of Council meetings and minutes of certain committee meetings … , since the relevant records contain speeches of or words spoken by Hon LEUNG Kwok-hung before the Council and its committees, depending on the purpose for which the relevant records will be used in court, sections 3 and 4 of Cap. 382 may be application. … ” 61. It can be seen, therefore, that LegCo was making a distinction between two categories of documents: (a) Registration Forms on Members” interests furnished by some LegCo Members, documents relating to Orientation Seminars for Members and those relating to claims for reimbursement of office operation expenses, etc; and (b) documents relating to the official records of proceedings of the Council, video recordings of Council meetings and minutes of certain committee meetings. 62. Subsequent to the letter from LegCo, on 24 November 2016 the Prosecution wrote to LegCo giving reasons for their application for special leave in respect of just category (b) only. The Prosecution did not continue to seek special leave for category (a). In the event, special leave was granted by LegCo in respect of category (b). 63. The only reasonable inference which I draw from the above is that LegCo was and is of the view that special leave is not necessary in respect of category (a). This view of LegCo is one which I am entitled to take into account. However, for avoidance of doubt I should say that even without the support of the aforesaid inference, by basing on the authorities I have quoted above my conclusion would have been the same. 64. Furthermore, even if I were wrong in my conclusion that the Register does not form part of the “proceedings” of LegCo, it is clearly not the law that “parliamentary proceedings” cannot be adduced as evidence in court proceedings no matter what the intended purpose is. This lead me to the following issue which relates to both the Register and the other “Disputed Evidence”. As regards (ii): ss3 & 4, LCPPO 65. The prosecution in its letter dated 24 November 2016 to LegCo seeking special leave stated its position as follows: “It is appreciated that the specified documents may only be used in court in a manner consistent with the statutory provisions in light of the principles developed in decided cases governing parliamentary privilege. We consider that sections 3 and 4 are not infringed as far as the intended use of the specified documents is concerned. The specified documents will be used to prove that the relevant parliamentary proceedings took place and that the Defendant participated in the proceedings. The Prosecution is not seeking to question or challenge the veracity or propriety of anything said by the Defendant as recorded in the relevant records of proceedings or reports. Rather, the Prosecution is seeking to adduce the documents as evidence of the fact that such statements were made by the Defendant. The allegation of impropriety relates to his failure to declare or disclose, or concealment of the receipt in question. The words said by the Defendant are not the cause of prosecution action or the foundation of criminality liability, and he is not exposed to any criminal liability in respect of what he said in LegCo proceedings. As such, the use of the material is consistent with parliamentary privilege. There is nothing in the allegations against the Defendant which relates to the legislative or deliberative processes of LegCo or its Members.” 66. From the above, what the Prosecution says that it is seeking to do is to use the evidence in question just to establish what had or had not taken place as a historical fact, ie, what was in fact said or not said in LegCo, by a particular person and on a particular day. That, in my view, does not involve any “questioning” of the propriety or otherwise of the proceedings or what the defendant had said in those proceedings, even if one were to interpret “questioning” in a broad sense. It is clear to me that LegCo was and is of the view that the prosecution’s intended usage of the evidence as stated in the aforesaid letter would be consistent with the principle of parliamentary privilege.[59] Furthermore, what the defendant had said in LegCo is not the subject matter of the charge and is not relied upon by the Prosecution as the foundation of its case. Therefore, in my view the protection provided by article 77 of the Basic Law and s 4 of LCPPO is simply not engaged. I note also that similar usage of records of parliamentary proceedings would be permissible even in jurisdictions where there is in existence the more extensive protection provided by article 9 of the Bill of Rights. Thus, in Prebble v Television New Zealand Lord Browne-Wilkinson said: “… A number of the authorities on the scope of article 9 betray some confusion between the right to prove the occurrence of Parliamentary events and the embargo on questioning their propriety. In particular, it is questionable whether Rost v Edwards [1990] 2 QB 460 was rightly decided. … Thus, in the present action, there cannot be any objection to it being proved what the plaintiff or the Prime Minister said in the House … or that the State-Owned Enterprises Act 1986 was passed … It will be for the trial judge to ensure that the proof of these historical facts is not used to suggest that the words were improperly spoken or the statute passed to achieve an improper purpose.”[60] See also Church of Scientology v Johnson-Smith;[61]and Toussaint v Attorney General of St Vincent and the Grenadines.[62] 67. Similarly, I do not accept that the prosecution’s stated intended usage of the evidence in question would have any adverse impact on a Member’s freedom of speech and debate protected by the Hong Kong provisions. Conclusion on the Second Issue 68. Based on the above, I reject the defence submissions on the Second Issue. I rule that the Register, the evidence that the five LegCo officers are expected to give and the Disputed Evidence are admissible for the limited purpose of proving what was done and said in LegCo meetings or its proceedings as a matter of history. As enjoined by Lord Browne-Wilkinson in Prebble v Television New Zealand, it is for me as the trial judge to ensure that the proof of the historical facts is not used to suggest that the defendant’s words were improperly spoken or were to achieve an improper purpose. 69. Based on all the above, I reject the defence submissions on the Pre-trial Issues and I rule in favour of the prosecution. RELEVANT LEGAL PRINCIPLES General 70. I bear in mind that the burden is on the prosecution to prove the charge beyond reasonable doubt. The defendant is not required to prove anything. In the present case, the defendant chose to give evidence. This is his right and no adverse inference would be drawn from this against him: Lee Fuk Hing v HKSAR.[63] 71. Insofar as the prosecution relies on any inferences to support the charge, such inferences are not to be drawn unless they are the only reasonable interferences from the direct facts proved: Kwan Ping Bong & Another v R.[64] Misconduct in public office 72. The elements of the common law office of misconduct in public office are stated by Sir Anthony Mason NPJ in Sin Kam Wah & Another v HKSAR,[65] namely the offence is committed when:- (1) a public official; (2) in the course of or in relation to his public office; (3) willfully misconducts himself, by act or omission, for example by willfully neglecting or failing to perform his duty; (4) without reasonable excuse or justification; and (5) where such misconduct is serious, not trivial. The above elements are re-affirmed in the recent case of HKSAR v Hui Rafael Junior, supra. 73. The essence of the offence is an abuse of office. So in determining whether or not the person was a “public officer”, the correct approach was to examine what, if any, powers, discretions or duties had been entrusted to the defendant in his official position for the public benefit, asking how, if at all, the misconduct alleged involved an abuse of those powers, such abuse ranging from fraudulent conduct, through nonfeasance of a duty, misfeasance in the performance of a duty or exercise of a power with a dishonest, corrupt or malicious motive, acting in excess of power or authority with a similar motive, to oppression: see HKSAR v Wong Lin Kay.[66] 74. As regards the element of “seriousness”, it is explained by Sir Anthony Mason NPJ in Shum Kwok Sher v HKSAR[67] that the seriousness of the misconduct is to be determined having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they served and the nature and extent of the departure from those responsibilities. There is no doubt a borderland in which the common law offence and disciplinary offences overlap. The offence may be committed for no discernible or provable motive: Chan Tak Ming v HKSAR, supra. However, it is necessary to note that the factors mentioned in Shum Kwok Sher are not meant to be exhaustive. As pointed out by Chan ACJ in HKSAR v Ho Hung Kwan Michael,[68] the consequences of the misconduct are also relevant when considering whether the misconduct is serious enough to merit criminal sanction. It would be wrong simply to conclude that if the misconduct in question was not trivial, then it must be serious enough to merit criminal sanction. The possible damage to the integrity of the system and the effect on public confidence in the system are clearly relevant matters for consideration in deciding whether the conduct of a public officer is so serious as to amount to the common law offence. Those matters must be considered in context and together with other relevant factors. His lordship also quoted Re A-G’s Reference (No 3 of 2003)[69] with approval where it was said that the motive with which a public officer acts may be relevant to the decision whether the public’s trust is abused by the conduct. Similarly, Yeung JA (as he then was) in HKSAR v Wong Kwong Shun Paul said, [70] “40. In order that Hong Kong can continue to be a corruption-free, fair and just community, any public officer in the execution of his public duties must not only be impartial and avoid doing anything in conflict with his personal interests, but must also ensure that his conduct will not lead to any reasonable criticism, cause any suspicion or bring his office into disrepute. Otherwise, the public will lose confidence in public administration and social stability and harmony will be perturbed. In performing his public duties, a public officer must never harbour any selfish motive and must not intentionally benefit himself or his friends or relatives in any way, for instance, by providing any assistance to them so that they would enjoy an unfair advantage. Any conduct of a public officer which contravenes the above principles is serious misconduct.” PROSECUTION EVIDENCE 75. The bulk of the prosecution evidence is adduced by way of admitted facts.[71] As a result, there were just a few witnesses who had given live evidence in this case, including the following officers from LegCo Secretariat:- I note that there was no challenge by the defence to the credibility of the above witnesses. On the other hand, the defence sought to establish their own case by questions put in cross-examination to PW1 who, Mr Lee said, was the important witness in this case because of his experience in matters relating to ROP and declaration of interests by Members. 76. The statements of the following prosecution witnesses are read into the evidence by agreement under s65B of the Criminal Procedure Ordinance, Cap 221: Apart from PW1, the role of the other prosecution witnesses from LegCo is mainly to produce documents. The evidence of the two bank officers from HSBC is about an incident in which the defendant had tried to pay a cashier order (issued in his favour) into the bank account of LSD. Basic facts 77. Based on the admitted or unchallenged evidence before the court, the following facts are in not dispute: - (1) The defendant was a founding member of LSD. He was also its Chairman between 12 February 2012 and 21 February 2016, succeeding Mr To Kwan-hang. (2) The defendant had been a LegCo Member since 2004. (3) The nomination period for the LegCo Election 2012 was between 18 and 31 July 2012. The defendant formally announced that he would run for that election on 23 July 2012 and was elected as a Member on 9 September 2012. (4) Since 2004, every time the defendant was elected as a Member, he would be reminded by the LegCo Secretariat through letters, notices and handbooks of his duty to register his “registrable interests”.[83] For the present purpose, “registrable interests” include all donations received by a Member as a candidate in the Legislative Council election in which he or she was elected and also financial sponsorships by any person or organization received by a Member.[84] (5) Particulars of “registrable interests” of all LegCo Members are recorded in the Register of Members’ Interests which is available for public inspection and scrutiny at the LegCo office, the purpose of which is to show whether the interests received by a LegCo member might reasonably be thought by others to influence his or her actions, speeches or votes in the LegCo, or actions taken in his or her capacity as a LegCo member. The records are also uploaded to the website of LegCo such that the public can inspect the Database on Members’ Interests on the internet at any time. (6) Mr Lai had been the Chairman, Executive Director and major shareholder of Next Media Limited of which Apple Daily Limited was a subsidiary. On 12 December 2014, Mr Lai resigned as the Chairman and Executive Director of Next Media Limited and a Director of Apple Daily. However, he remained as a major shareholder of Next Media Limited. (7) In mid-April 2012, a person called Mark Herman Simon (Simon) paid a total of HK$9.5 million to four political parties in Hong Kong, respectively Democratic Party (DP), Civic Party (CP), Labour Party (LP) and LSD, by way of four cashier orders with the political parties named as the respective payee. The cashier order in favour of LSD was in the amount of HK$1 million. The bank records show (and there is no dispute) that all of the cashier orders were in fact funded by Mr Lai. (8) On 3 May 2012, the aforesaid cashier order in favour of LSD was redeemed by Simon who later on the same day caused three new cashier orders to be issued, one for Mr To Kwan Hang (HK$250,000), one for the defendant (HK$250,000) and the last one for LSD (HK$500,000). (9) On 22 May 2012, the casher order in the defendant’s favour was deposited into his personal current account held with HSBC. (“The 1st Payment”) (10) Between 24 May and 31 May 2012, a total of HK$400,000, which consisted of the proceeds of the defendant’s aforesaid cashier order and a sum which came mainly from the LegCo Secretariat, was transferred from the defendant’s HSBC current account to an account of a Ms Tong. Ms Tong had never been a signatory of the HSBC bank account of LSD. (11) Apart from the 1st Payment, the bank records show that there were other payments from Simon to the defendant. Again, there is no dispute that all those other payments were in fact funded by Mr Lai: (a) A cheque in the amount of HK$50,000 issued by Simon dated 22 November 2012 was deposited into the defendant’s HSBC savings account. The same amount was withdrawn on 26 November 2012 and deposited into the HSBC savings account of LSD on the following day. (“The 2nd Payment”) (b) On 18 October 2013, Simon caused two cashier orders to be issued, one in favour of the defendant and the other Mr Lee Cheuk-yan (a LegCo Member), each for HK$500,000. On 22 November 2013, the cashier order in favour of the defendant was paid into his HSBC savings account. (“The 3rd Payment”) On 26 November 2013, the defendant withdrew the 3rd Payment and deposited the money into two bank accounts of a Mr Wong who was a practicing solicitor. There is some evidence that Mr Wong was at the time representing LSD members in lawsuits and that the payments to Mr Wong were legal fees. (c) On 27 June 2014, Simon caused a cashier order (HK$500,000) to be issued in favour of the defendant. (“The 4th payment”) At the time, the defendant was serving a prison sentence for which he was only released on 5 July 2014. In mid-October 2014, the defendant went to the main branch of HSBC and attempted to deposit the cashier order into the bank account of LSD. The bank officer at the counter (PW8) suggested that the defendant pay the cashier order into his own bank account first and then transfer the money to LSD’s bank account. The defendant appeared to be reluctant to do so. PW8 then said she needed to take instruction about the defendant’s request. The defendant left. Subsequently, PW8 was instructed that the defendant’s request could be acceded to and therefore she left a voice message with the defendant to that effect. However, the defendant did not come back to her. In about November/ December 2014, when PW8 saw the defendant again in the bank, he told her that because of the late reply from the bank, he had already returned the cashier order to someone. According to bank records, on 12 December 2014 the cashier order was redeemed and the proceeds were deposited back into the bank account of Simon. (d) On 28 October 2014, another cashier order (HK$500,000) was issued in favour of LSD using the funds in Simon’s bank account. On 5 November 2014, that cashier order was deposited into LSD’s bank account. (12) In the meantime, between July and August 2014 there was wide media coverage about the defendant and other LegCo Members accepting payments from Mr Lai.[85] As regards the defendant, however, the media coverage was only about the 3rd Payment and the 4th Payment. Between 30 July 2014 and 15 November 2015, the CMI of LegCo had held a number of close-door meetings to investigate the matters about the defendant and Mr Lee Cheuk-yan for their alleged breaches of Rule 83(3) of ROP. According to the Report of the CMI,[86] as regards the defendant the investigation was only the 3rd Payment and the 4th Payment and the defendant had not disclosed to the CMI anything about the 1st Payment or the 2nd Payment. Eventually, because of the divisive views among its members, the CMI was unable to come up with any conclusions about the allegations against either Mr Lee Cheuk Yan or the defendant. “Accepting on behalf” (代收) 78. There is one proposition raised by the evidence of PW1 which appears to be common ground, that is to say that if a Member received a donation which was in fact intended for someone else rather than the Member personally, in other words if the Member only received the donation on behalf of a third person (“代收”), then Rule 83 of ROP would not be engaged and there would be not a duty to make disclosure of that donation pursuant to that rule. PW1 in his evidence cited a precedent concerning LegCo Member Alan Leong to that effect. In that incident, it was accepted that Mr Leong had received a donation on behalf of Alliance for True Democracy and he had not made any disclosure of that donation as a Member. The CMI looked into the matter and resolved that the non-disclosure was not a breach. I say that the proposition appears to be common ground firstly because the prosecution has not asked the court to reject the proposition whilst the defence relies on the proposition in the defendant’s defence. The prosecution’s attack on that defence is on the factual level, submitting that the defence evidence in this aspect should be rejected. Secondly, I note that the prosecution has laid no charge and raised no question in respect of the 2nd Payment (HK$50,000) from Mr Lai through Simon, even though the defendant was named as the payee on the payment cheque,[87] there being evidence that the defendant had subsequently withdrawn the money and paid it into the bank account of LSD. Thirdly, apart from PW1’s evidence, I also take into account the common stance of the parties. Lastly, as a matter of construction of the relevant rules of the ROP, I agree that if a Member receives a donation on someone else’s behalf, then he is not accepting the donation “as a Member” and in those circumstances Rule 83 would not be applicable. I note that there may an interesting legal issue which has not been addressed by counsel, namely “who is to decide whether an interest was required to be disclosed pursuant to Rule 83 of ROP, is it a matter for the court or is it within the exclusive cognizance of LegCo?” However, since my view on the proposition is the same as that of CMI, the point does not need to be resolved for the purpose of this trial. Admissibility of LegCo documents and Media Reports 79. At the end of the prosecution case, Mr Lee invited the court to re-consider the admissibility of the following provisional exhibits: PP41-42: The record of the motion and the debate in LegCo on 22 January 2014. The prosecution relies on these documents to show that: (1) the defendant was present at the meeting; (2) he spoke at that meeting; (3) he voted in the motion debate; (4) he did not declare or disclose his interest at the LegCo proceedings; and (5) other legislators mentioned “Mr Lai”, “Boss Lai”, “Next Media” and “Apple Daily” during the motion debate. PP27-29: The defendant’s entry in the LegCo’s Register of Members’ Interest pursuant to Rule 83 of ROP for the 3th to the 5th LegCo. The purpose of the prosecution is to show that the defendant had never registered his receipt of the HK$250,000 from Mr Lai even up to 23 June 2016. PP22-26: LegCo’s records of the defendant’s declaration of interest in accordance with Rule 83A of ROP in relation to other matters not relating to Mr Lai or his business. The purpose of the prosecution is to show that the defendant was well-aware of his duty of disclosure in case of conflict and he knew how to do it. Therefore, his non-disclosure of the HK$250,000 was not inadvertent or a mistake PP30-35: Media reports in respect of the 3rd Payment and the 4th Payment. The purpose of the prosecution is to show that the defendant had failed to register the HK$250,000 even after the extensive media coverage about his other payments from Mr Lai. 80. Having considered counsel submissions, I ruled against the defence contention that the purposes of the prosecution in adducing the aforesaid documents went beyond the terms of this court’s ruling given at the pre-trial stage. In particular: (i) as regards PP41-42, as to Mr Lee’s complaint that PP41-42 cannot be used to show that the defendant had deliberately not disclosing his interests which the prosecution says should have been disclosed, with respect the defendant’s state of mind is a matter of inference to be determined after taking into account all the evidence. I can see no valid objection to the admissibility of PP41-42; (ii) as regards PP27-29, the prosecution is not questioning the truthfulness or propriety of what has been recorded in those documents. In my view, the prosecution is entitled to use these documents to show what the defendant had not disclosed the relevant interest. Whether the non-disclosure was deliberate or not is a separate question to be decided only after taking into account all the evidence. I am unable to see any valid objection to the admissibility of PP28-29; (iii) as regards PP22-26, in my view the prosecution is entitled to use the documents for the aforesaid purpose which is not inconsistent with the Ruling. Again, whether the failure to declare and the non-registration was deliberate or not is a separate question to be decided after taking into account all the evidence; and (iv) as regards PP30-35 the authenticity of which is not in dispute, the prosecution is not relying on the media reports to show the truth of their contents. The prosecution is relying on them to show that the defendant must have been aware, as late as July 2014, that there was media concern over the non-disclosure of his other donations from Mr Lai and yet the defendant still did not make any disclosure of his first payment (the subject matter of the charge) even up to the time of his arrest. That, the prosecution says, goes to the wilfulness and seriousness of the non-disclosure which are elements of the offence. I am of the view that the media reports are relevant to the issues as contended by the prosecution. Of course, the wilfulness and seriousness of the alleged non-disclosure are to be decided after taking into account all the evidence. 81. In the event, it is my ruling that all the provisional exhibits objected to by the defence are relevant and that their intended usage by the prosecution does not go beyond the terms of this court’s ruling on the Pre-trial Issues. Besides, I can see no valid reasons for them to be excluded. Therefore, I admit all of them as exhibits. NO CASE SUBMISSIONS The submissions 82. Mr Lee made a half-way submission after the prosecution had closed its case. The sole ground of the submission was that even assuming that the prosecution would be able to show that the defendant had not registered the 1st Payment pursuant to Rule 83 of ROP, he could have done it orally at any of the LegCo meetings under Rule 83A of ROP during the charge period and there is no evidence that he had failed to just do that, the prosecution having failed to adduce records of all of the LegCo meetings during that period. 83. In reply, Ms Lai for the prosecution submitted that Rule 83 and Rule 83A imposed different and separate duties. Furthermore, the defendant should have known by reading the paper for the motion debate on 22 January 2014 that the matter about Next Media was to be raised. That should have alerted him to register his interest pursuant to Rule 83 and also to make an oral declaration at the meeting pursuant to Rule 83A. However, the defendant failed to do either of those. The ruling 84. Having heard counsel submissions, I ruled that the defendant has a case to answer. I said that reasons would be given if and when necessary. This, I now do. The applicable legal principles 85. The approach a judge must take when considering a no case submission is set out in R v Galbraith,[88] where Lord Lane CJ said,[89] “How then should the judge approach a submission of “no case”? (1) If there is no evidence that the crime alleged has been committed by the defendant, there is no difficulty. The judge will of course stop the case. (2) The difficulty arises where there is some evidence but it is of a tenuous character, for example because of inherent weakness or vagueness or because it is inconsistent with other evidence. (a) Where the judge comes to the conclusion that the prosecution evidence, taken at its highest, is such that a jury properly directed could not properly convict upon it, it is his duty, upon a submission being made, to stop the case. (b) Where however the prosecution evidence is such that its strength or weakness depends on the view to be taken of a witness's reliability, or other matters which are generally speaking within the province of the jury and where on one possible view of the facts there is evidence upon which a jury could properly come to the conclusion that the defendant is guilty, then the judge should allow the matter to be tried by the jury. It follows that we think the second of the two schools of thought is to be preferred.” 86. As to how a trial judge should approach a prosecution’s case based on inferences when facing with a no-case submission, in my view the following said by Kempster JA in Attorney General v Li Fook Shiu Ronald,[90] which is about an application to discharge made under s 22 of the Complex Commercial Crimes Ordinance, Cap 394, is also applicable:- “In relation equally to primary facts and to inferences to be drawn from such facts, his concern is not with present proof to his satisfaction but with potential future proof to that of a jury. Both primary facts and the inferences therefrom are ‘matters generally speaking within the province of the jury’ in the language of Galbraith. Both can critically be affected by later evidence or a lack of evidence from the defence. Assuming all proper directions, the test is not what the judge thinks the jury, and still less he, ‘must’ conclude at that moment, but what a jury ‘could, may or might’ properly conclude in the future.” 87. In Director of Public Prosecutions v Varlack,[91] the prosecution appealed the determination of the Eastern Caribbean Court of Appeal quashing the conviction of the defendant of murder on the basis that the judge had erred in rejecting a submission of ‘no case to answer’ at the close of the prosecution case. The prosecution case against the respondent was circumstantial, being based largely on the evidence of telephone calls made between the defendants from which the prosecution sought to draw the inference that she knew of and agreed to a plan to kill the deceased. In the advice of the Privy Council delivered by Lord Carswell, the authorities relevant to the issue of the proper approach to be taken to a submission on no case to answer were addressed. Having said that the “canonical statement of law” was to be found in the judgment of Lord Lane CJ in R v Galbraith Lord Carswell cited the judgment of King CJ in the Supreme Court of South Australia in Questions of Law Reserved on Acquittal[92] as being an accurate statement of the law:- “It follows from the principles as formulated in Bilick (supra) in connection with circumstantial cases, that it is not the function of the judge in considering a submission of no case to choose between inferences which are reasonably open to the jury. He must decide upon the basis that the jury will draw such of the inferences which are reasonably open, as are most favourable to the prosecution. It is not his concern that any verdict of guilty might be set aside by the Court of Criminal Appeal as unsafe. Neither is it any part of his function to decide whether any possible hypotheses consistent with innocence arc reasonably open on the evidence … He is concerned only with whether a reasonable mind could reach a conclusion of guilty beyond reaonab1e doubt and therefore exclude any competing hypothesis as not reasonably open on the evidence… I would re-state the principles, in summary form, as follows. If there is direct evidence which is capable of proving the charge, there is a case to answer no matter how weak or tenuous the judge might consider such evidence to be. If the case depends upon circumstantial evidence, and that evidence, if accepted, is capable of producing in a reasonable mind a conclusion of guilt beyond reasonable doubt and thus is capable of causing a reasonable mind to exclude any competing hypotheses as unreasonable, there is a case to answer. There is no case to answer only if the evidence is not capable in law of supporting a conviction. In a circumstantial case that implies that even if all the evidence for the prosecution were accepted and all inferences most favourable to the prosecution which are reasonably open were drawn, a reasonable mind could not reach a conclusion of guilt beyond reasonable doubt, or to put it another way, could not exclude all hypotheses consistent with innocence, as not reasonably open on the evidence.” 88. Lord Carswell went on to cite with approval a passage from the judgment of the Court of Appeal of England and Wales, Criminal Division delivered by Moses LJ in R v Jabber:[93] - “The correct approach is to ask whether a reasonable jury, properly directed, would be entitled to draw an adverse inference. To draw an adverse inference from a combination of factual circumstances necessarily does involve the rejection of all realistic possibilities consistent with innocence. But that is not the same as saying that anyone considering those circumstances would be bound to reach the same conclusion. That is not an appropriate test for a judge to apply on the submission of no case. The correct test is the conventional test of what a reasonable jury would be entitled to conclude.” [Italics added.] In the end, Lord Carswell said that when one applies the above principle, it follows that the fact that another view, consistent with innocence, could possibly be held does not mean that the case should be withdrawn from the jury. See also the recent case of the Court of Appeal in Secretary for Justice v Ng Siu Lun[94]where DPP v Varlack was applied in Hong Kong. Applying to the present case 89. In the present case, there is no challenge by the defence against the credibility or reliability of the prosecution witnesses. Rather, the half-way submission is based on an alleged lacuna in the prosecution evidence. 90. In order to assess Mr Lee’s submission, it would be necessary to consider Rules 83 and 83A of ROP. I note that the relevant ROP has been amended over the years, but the amendments do not bear on the present case: “83. Registration of Interests (1) Except for the purpose of making registration of interests under subrule (2), every Member shall, not later than the first meeting of each term, furnish to the Clerk, in such form as may be approved by the President, particulars of his registrable interests. (2) Every new Member of the Legislative Council shall, within 14 days from the date of his becoming a new Member to fill a vacant seat, furnish to the Clerk, in such form as may be approved by the President, particulars of his registrable interests. (3) Every Member shall furnish to the Clerk, in such form as may be approved by the President, particulars of any change in such registrable interests, within 14 days of any such change. (4) The Clerk shall cause those particulars to be entered in a Register of Members’ Interests and that register shall be available for inspection by any person during office hours. (5) In this Rule, "registrable interests" means – … (d)(i) all donations, as a candidate in the Legislative Council election in which the Member was elected as a Member of the Council, received by the Member or any person on his behalf for the purpose of meeting the Member’s election expenses in the election; or (ii) financial sponsorships, as a Member of the Council, by any person or organization, stating whether any such sponsorships include any payment or any material benefit or advantage to the Member or his spouse, whether direct or indirect; … (Emphasis supplied) 83A Personal Pecuniary Interest to be Disclosed In the Council or in any committee or subcommittee, a Member shall not move any motion or amendment relating to a matter in which he has a pecuniary interest, whether direct or indirect, or speak on any such matter, except where he discloses the nature of that interest.” 91. With respect, the sole ground for Mr Lee’s halfway submission is based on a false premise. It can readily be seen that Rule 83 and Rule 83A are intended to serve very different purposes so that the fulfillment of one does not mean the fulfillment of the other: - (a) Rule 83 provides for the general duty of a Member to register all of his “registrable interests” for the purpose of public inspection. Moreover, there is a formal requirement that the registration of “registrable interests” has to be done by use of a form approved by the Chairman. The latter point was highlighted by PW1 in his evidence when he said that if a Member used a form other than the one approved by the Chairman, the Secretariat would not accept it for registration. PW1 also said that if a Member notified orally his “registrable interests” to the Secretariat, that oral notification would also be invalid; and (b) Rule 83A provides for a Member’s duty to declare his interest at a meeting before moving a motion or speaking in case of a situation which may involve a conflict of interest.[95] 92. That Rule 83 and Rule 83A impose separate and different duties on a Member is also made clear in the “Guidelines on Registration of Interests” (“個人利益登記指引”) issued by the LegCo Secretariat copies of which were distributed to all Members at the beginning of each term.[96] At item III(1) of the document it is said that the Guidelines in relation to registration of personal interests should be considered as the “minimum reasonable standard”. (“在登記個人利益方面, 此等指引應被視為最低的合理規定”). At Item III(2), it is said that Members have a duty to provide the information required and are responsible to the other Members and the public for the information concerning him or her as contained in the Register. Then at Item III(3), it is stated that the registration of interests is additional to and in no way a replacement of, the requirement on Members to disclose pecuniary interests under Rule 83A. 93. Lastly, PW1 also confirmed in his evidence that the duties under Rule 83 and Rule 83A are separate and different duties. 94. Turning to the elements of the offence, there is no dispute that a LegCo Member is a holder of a public office. Secondly, pursuant to Rule 83 of ROP the defendant as a LegCo Member had the duty, to make disclosure of all his “registrable interests”. As such, in my view there is a strong argument that the performance of that duty would be one in the course of or in relation to the defendant’s public office. Thirdly, in the light of the agreed bank evidence there can be little dispute that the defendant had received a payment of HK$250,000 from Mr Lai through Simon. Fourthly, at this stage and in the absence of evidence to the contrary the payment is prima facie an interest which had to be registered pursuant to Rule 83 of ROP. On the face of P28 and P29, however, the defendant had not registered that payment, resulting in a breach of his duty to make the relevant disclosure. Of course, I should add here that whether the payment was in fact required to be registered is a matter to be decided after consideration of all the relevant evidence including the evidence, if any, from the defence. Fifthly, there is also evidence that the defendant was fully aware of his duty under Rule 83 of ROP and therefore an inference would be open to a reasonable jury that the failure on the part of the defendant, if any, to disclose the payment in question was wilful and intentional. Sixthly, it has not been suggested that the alleged failure to disclose, if committed, had any reasonable excuse or justification and none has been raised at this stage. Lastly, as regards “seriousness” of the alleged breach/misconduct, taking into account the constitutional status and responsibilities of the office of a LegCo Member, the importance of the public trust reposed in legislators and the right of the public to know whether the speech or deeds of their representatives in LegCo are motivated by other interests and the circumstances of the alleged misconduct in the present case, it would be open to a reasonable jury to find that the misconduct, if established, was a serious one. For the above reasons, I rule that the defendant has a case to answer. Needless to say, whether the defendant is guilty of the offence charged is a matter to be decided in due course after taking into account all the evidence. Pre-trial issues revisited 95. For the sake of completeness, I have considered whether the evidence of PW1 would have any impact of my ruling on the pre-trial issues. This is because on a cursory reading PW1 seems to have suggested that a breach of Rule 83 was just an internal affair of LegCo which would not attract criminal liability, the reason being separation of powers. PW1 said the following in cross-examination: “問： 呢啲係關於呢一類嘅，即係冇及時報告利益呢一類嘅嘢，或者完全冇報到應該報嘅利益呢啲嘢，就係根據《議事規則》裡面做嘅？ 答： 係，根據《議事規則》做。 問： 凈係根據《議事規則》處理嘅？ 答： 凈係按《議事規則》去處理。 問： 呢啲亦可以話立法會嘅家法，得唔得？ 答： 可以。 問： 亦即係話立法會自己處理嘅嘢，就唔關政府部門嘅，同唔同意？ 答： 唔關。 問： 唔關，你同意吖嘛？ 答： 係，同意。 問： 因為三權分立，係咪？ 答： 係。” 96. However, PW1 later clarified that what he meant was that based on his understanding a “mere breach” of Rule 83 would not give rise to criminal liability. PW1 supplemented the following in cross-examination: “問： 而你哋咁耐都冇咁樣提醒，咁耐都冇話啲議員「如果你唔遵守呢啲《議事規則》，除咗會受呢個議員個人利益監察委員會調查，同埋可能有啲懲罰之外，仲會係受刑事檢控。」咁耐都未做過，未咁樣寫過嚟通知佢哋，啱唔啱，或者提醒佢哋？ 答： 佢冇登記利益係唔牽涉刑事罪行嘅，至於一個行為本身佢有冇違反《議事規則》同佢係咪干犯刑事罪係兩件事嚟嘅，所以我哋係只係提醒佢登記利益，我哋唔需要提醒議員去守法。 問： 但係如果，如果真係議員係因為冇申報利益係會受到刑事檢控，你唔應該警告下佢哋咩，等佢哋更加小心咩？刑事喎。 答： 我唔會覺得係佢冇登記就係--純粹冇登記就係個刑事。 問： 你唔認為係。 答： 純粹冇登記，佢冇登記係唔係有其他嘢係同一件... 問： 明白。 答： ...--即係呢個行為係咪刑事係睇下其他因素，呢個唔係我嘅處理範圍。” 97. Upon being asked by the court, PW1 clarified further and said: “問： 你記唔記得就喺盤問嘅時候李大律師都問過你，即係話如果一個議員佢係冇披露到佢作為議員身分收嘅金錢利益，呢樣嘢構唔構成一個刑事罪行嘅。 答： 係。 問： 應該有問過呢個問題喇？ 答： 係。 問： 你當時嘅答案就話唔構成嘅，如果我冇理解錯你嘅話。 答： 我當時--我想表達嘅，就係話佢唔會純粹因為冇--違反呢個《議事規則》，冇登記而干犯刑事罪行，但係佢冇登記呢樣嘢可能係佢另外一啲刑事行為嘅其中一部分嘅元素。 問： 你嘅意思即係話違反《議事規則》呢樣嘢本身唔係一個... 答： 本身唔會造成一個刑事後果嘅，呢個係我想表達啫。 問： 但係就會唔會觸犯到其他嘢就你就唔知道... 答： 就要睇下佢嗰個行為係咪再牽涉一啲刑事可以制裁嘅行為。 問： 但係係由你哋立法會決定吖，定抑或邊個決定呢？ 答： 唔係，我嘅理解就係咁啫。 問： 你嘅理解係咁樣？ 答： 係。 … 答： 即係我唔係話佢係冇刑事罪行嘅一定，其實喺我哋嗰個登記指引嗰度都有講，我哋只係規限議員需要登記佢嘅利益同埋披露佢嘅利益嘅啫，只於佢會唔會防--違反《防止賄賂條例》或者其他罪行，議員應該自行作出判斷，喺嗰個登記指引係有個咁嘅提醒嘅。” 98. What I understand PW1 meant is that he was of the view that a “mere failure” to register interests by a Member would not amount to a criminal offence. However, it may be that the breach would form a component of a criminal offence and in which case whether or not a Member would have committed a criminal offence was not a matter for the LegCo to decide. 99. Having considered PW1’s evidence, I do not consider that it would have any adverse effects on my decision on the Pre-trial Issues. Therefore, I maintain my decision on those issues. DEFENCE EVIDENCE 100. There is only one witness from the defence, who was Mr Ng Man Yuen, the current Chairman of LSD. He was its Internal Vice-chairman between 2010 and 2012 and External Vice-chairman between 2012 and 2016. The main points of his evidence consist of the following: (i) LSD was established in 2006. It was a small political party in Hong Kong consisting of several hundreds of members. LSD had an Executive Committee which was comprised of 21 members at the highest. However, not all on the Executive Committee were considered as core members of LSD. (ii) LSD had one savings account and two current accounts held with HSBC. There were four signatories (including the Chairman) and in 2012 two of them were required the accounts. The major income of LSD came from public donation. (iii) In 2011, LSD suffered a blow as two of its legislators had left to form a new political party, People Power (人民力量), which had a similar voter-base as LSD. (iv) In 2012, there was only one donation which was more than HK$200,000. That was the HK$1 million from Mr Lai. He did not know Mr Lai personally and Mr Lai was not a member of LSD. In March/April 2012, he came to know that Mr Lai was going to donate HK$1 million to LSD from the former Chairman Mr To Kwan-hang. Mr To was responsible for fund-raising. (v) Afterwards, there was a discussion about the deployment of the expected donation from Mr Lai among some core members of LSD, among the attendees were the defendant, Mr To and he. At the meeting it was resolved that HK$250,000 of the donation would be used for LSD’s branch in Kowloon East (“KE”), another HK$250,000 for the branch in New Territories East (“NTE”) and the remaining HK$500,000 for general expenses of the party. The aforesaid decision was considered sensitive as it had a bearing on LSD’s strategy in the coming election. LSD had only limited resources to deploy in its work in different geographical constituencies. In order that its resources deployment would not be leaked to other political parties, only those members who “needed to know” was informed about it. At the time, LSD was yet to decide who would represent it in the coming LegCo election in KE and NTE. (vi) The HK$250,000 for KE was subsequently deposited into the bank account of Mr To who was in charge of the KE Branch. Mr To used the money for the work of the party in the district generally, employing temporary workers, printing banners and publications. (vii) The defendant was also in charge of the NTE Branch. He was also a LegCo Member for the NTE Constituency. In March 2012, the defendant had expressed to Mr Ng an intention not to run again in the 2012 election, the reasons being that the defendant wanted more young people to run for the election and that the defendant had already been a legislator for two terms. Besides, the defendant was at the time on bail pending appeal in a criminal case and he was seeking a judicial review on his eligibility to run for the election the result of which was yet to be known.[97] (viii) As regards the HK$250,000 for NTE, the money was paid into the defendant’s bank account and the defendant received the money on behalf of LSD. The money was eventually used for political publicity and work in the district for the benefit of the party. (ix) As regards Ms Tong, she was a founding member of LSD and she also used to help the defendant and work for him in the NTE Branch in relation to bookkeeping and financial matters. CONSIDERATION OF THE EVIDENCE 101. As the tribunal of fact, based on the bank evidence before this court I am sure so that I find that Mr Lai had the intention to make donations (through Simon) to four political parties in Hong Kong, namely DP, CP, LP and LSD, in the total amount of HK$9.5 million. The important issue to be decided, then, is whether I can also be satisfied to the requisite standard that there had been a change of purpose regarding the HK$ 1 million to LSD so that HK$250,000 of which later became a donation to the defendant personally. 102. I am fully alive that the burden of proof is on the prosecution. However, purely for the sake of convenience I would first consider the evidence of Mr Ng. I bear in mind all the criticisms that Ms Lai has levelled, in her oral and written closing submissions, at the various inadequacies of Mr Ng’s evidence. I note in particular that Mr Ng’s evidence is very vague as to the time and location of his discussion with the defendant and other core members of LSD about the use of the HK$1 million donation from Mr Lai in early 2012. I note that it is Mr Ng’s evidence that the HK$250,000 mentioned in the charge had not been used in the defendant’s election campaign in 2012. His evidence was to the effect that the money had been used generally for the work of LSD in NTE. Nevertheless, Mr Ng had not produced a single document or any accounts from LSD to support his version in this regard. On the other hand, there was a minute of meeting of the Executive Committee LSD[98] recording just a donation of HK$500,000 in 2012 without any mention of the other two sums each of HK$250,000 to the KE Branch or NTE Branch respectively. Furthermore, Mr Ng’s evidence, if true, would suggest that even the Treasurer of LSD had not known about the existence of the two sums. As regards the role of Ms Tong, there is independent evidence showing that the defendant had claimed reimbursement from LegCo for her salary as his accountant in relation to his office there.[99] On the other hand, there is no document to show that Ms Tong had worked for or helped the defendant in the NTE Branch of LSD. Last but not least, I note that Mr Lai had through Simon made direct donations to LSD so that if Mr Lai wanted to make donations to LSD, there is no necessity for Mr Lai to do that through the defendant. 103. Ms Lai asks the court to reject the evidence of Mr Ng. Ms Lai places great reliance on the fact that there was originally just one cashier order (HK$1 million) in favour of LSD which was later redeemed and replaced by three cashier orders: one for the defendant (HK$250,000), one for Mr To (HK$250,000) and one for LSD (HK$500,000). Ms Lai submits that the only reasonable inference to be drawn is that the cashier order for the defendant was intended to be a payment to him personally. 104. Having considered all the evidence and bearing in mind the burden of proof, I find that there is some credence in Mr Ng’s evidence that Ms Tong had helped the defendant in respect of the work of LSD in NTE. Firstly, the fact that the defendant had claimed reimbursement from LegCo in respect of Ms Tong does not mean that she had not also helped him, with or without pay, in respect of LSD. Secondly, Mr Ng’s evidence that Ms Tong was an active member of LSD has not been contradicted by any other evidence. Thirdly, that the defendant would trust Ms Tong not only regarding matters relating to his office in LegCo is to a certain extent supported by the agreed bank evidence that he had transferred the whole of the proceeds of the 1st Payment from his bank account to her bank account. 105. As regard the nature of the 1st Payment, with respect there is force in the closing submission of Mr Pun, SC (who argued this part of the defence for the defendant) that there were similarities between that payment and the other payments from Mr Lai in that none of them had stayed in the defendant’s bank account. To the contrary, all of them had been withdrawn in their entirety almost immediately upon receipt. The proceeds of the 1st Payment were withdrawn by instalments within a few days upon receipt and transferred to Ms Tong who, according to Mr Ng, was helping the defendant in matters relating to the NTE Branch of LSD. The proceeds of the 2nd Payment were paid into the bank account of LSD four days after it was received by the defendant. There is evidence before this court, not contradicted by the prosecution, that the proceeds of the 3rd Payment were used for the legal costs of LSD members. As regards the 4th Payment, the cashier order in the defendant’s favour was subsequently replaced by a cashier order in favour of LSD. Before that, there was evidence that the defendant had tried to pay his cashier order into the bank account of LSD. Therefore, there is a discernible pattern which provides some circumstantial support to Mr Ng’s assertion that the 1st Payment, even though having been paid into the defendant’s account, was in fact intended for LSD and used for its purposes. On the other hand, there is no evidence to contradict Mr Ng’s evidence that the 1st Payment had been used for the purpose of LSD. 106. I have not ignored the fact that when the defendant was interviewed on 1 August 2014 by RTHK in a radio programme, he was asked by the host whether the HK$500,000 (the 3rd Payment) was the only payment and whether there had been other payments before that (“咁即係，係咪誒由始至終都係收到呢一筆，… 五十萬?再之前呢?再之前有冇㗎”). To this, the defendant replied in the negative by saying that he had none (“我、我無㗎，我無㗎。”).[100] The prosecution does not rely on this as a lie. I think the prosecution is right not to do so. Even if it could be proved that the aforesaid statement of the defendant was a lie, it does not in my view has much probative value for strengthening the inference of guilt, as there could be innocent reasons why the defendant would not want to reveal the existence of other donations from Mr Lai at the time: Yuen Kwai Choi v HKSAR.[101] The prosecution relies on the radio interview to show that the defendant must be particularly alerted that he had all along failed to comply with Rule 83 and what he should have done was to make belated registration. In my assessment, however, if the defendant had not considered himself to be duty bound to disclose the 3rd Payment, then the fact that he had not made any disclosure even after the radio interview would be neither here nor there and the failure to register the payment would not advance the prosecution case. 107. I consider that the defendant’s conduct is not without suspicion. This is because of the replacement of the original cashier order (in LSD’s favour) with the subsequent cashier order (in the defendant’s favour). Even according to the defence, the defendant had a role to play in causing that replacement. However, having taking all the evidence into account, I cannot be sure that the latter cashier order was for the defendant personally as a LegCo Member rather than a payment which he had received on LSD’s behalf. As such, the benefit of doubt goes to the defendant. That means that the prosecution has failed to prove the main plank of its case, namely that the defendant had committed a misconduct by breaching his duty of disclosure under Rule 83 of ROP. As a result, it would be unnecessary for me to consider whether the prosecution has made out the remaining elements of the offence which are in dispute. CONCLUSION 108. As the tribunal of fact, despite the suspicions I have of the defendant’s conduct, I am not satisfied that the prosecution has proven its case against him beyond reasonable doubt. In the circumstances, the defendant has the benefit of doubt and is acquitted of the charge. 109. I thank all counsel for their valuable assistance for all of which this court is indebted. [1] FACC 12-15/2016, at §§ [2] P42. On that occasion, Members talked mostly about another local newspaper “Ming Pao”. The defendant’s speech is at pp 4370-4372. [3] [2009] 4 HKC 204 [4] See “Issues relevant to consideration of an application for Council’s special leave for officers of the Council to give evidence of Council proceedings in a criminal case” (“the Briefing Note) prepared by Legislative Council Secretariat relating to the present case dated 25.11.2016 (LC Paper No. LS/16-17), at §4. [5] [1993] AC 593 [6] (2009) 12 HKCFAR 568, at §§11-14 [7] [2016] 6 HKC 417, at §§63-64. [8] (2014) 17 HKCFAR 689. [9] Ibid, at §§39-43. See the discussion on “Parliamentary privilege” below. [10] 24th ed, at 235-236, [11] It has been held that Committees are the natural extensions of LegCo through which it functions: see Cheng Kar Shun and Anor v the Honourable Li Fung Ying & Ors, supra, at §§209-211 [12] [2011] 1 AC 684, at §§27-62 [13] Including Attorney General of Ceylon v De Livera [1963] AC 103, 120; Ex p Watson (169) LR 4; United States v Brewster (1972) 408 US 501; and R v Greenway (unreported) 25 June 1992, Central Criminal Ct, but see [1998] PL 367, 257. [14] See §§27-50 of the speech of Lord Phillips. [15] Ibid, at §§ 51-60 [16] Ibid, at §61 [17] supra, at §§61, 128 & 130 [18] [1994] 3 All ER 407 [19] Ibid, at 413g-h [20] [2000] 2 All ER 224 [21] Ibid, at 234j-235a [22] Cm 8313, April 2012 [23] Ibid, at §27 [24] [2017] 1 HKLR 460, §62 (as per Lam VP) [25] Ibid, at §28 [26] Ibid, at §32 [27] Ibid, at §40, citing New Brunswick Broadcasting Co v Nova Scotia (Speaker of the House of Assembly) [1993] 1 SCR 319, 382 with approval. [28] Ibid, at §43 [29] [2017] 1 HKLRD 460, at §24 [30] See the speech of the Chief Secretary moving the second reading of the Legislative Council (Power and Privileges) Bill 1985 on 15 May 1985 [31] (1997-98) 1 HKCFAR 318, at 341C-D [32] Supra, at §22 [33] Supra, as per Lord Phillips (at §63) and Lord Clarke (at §§129-130). See also Lord Hope, Baroness Hale, Lord Brown, Lord Mance & Lord Kerr (at §128). [34] Supra, as per Lord Rodger (at §118). See also Lord Hope, Baroness Hale, Lord Brown, Lord Mance & Lord Kerr (at §128). [35] Supra, as per Lord Phillips (at §81-83) and Lord Clarke (at §129) and Lord Rodger (at §108). See also Lord Hope, Baroness Hale, lord Brown, Lord Mance & Lord Kerr (at §128). [36] See Rule 83 of ROP. [37] At §234 of the Report [38] [1990] 2 QB 460 [39] Ibid, at 476C-D [40] Ibid, 478 A-F [41] [1995] 1 AC 321, approved by the House of Lords in Hamilton v Al Fayed, supra. [42] (1884) 12 QBD 271, 275 as per Lord Coleridge CJ: “What is said or done within the walls of Parliament cannot be inquired into in a court of law . . . The jurisdiction of the Houses over their own members, their right to impose discipline within their walls, is absolute and exclusive.” [43] Supra, at §§29-30 (per Lord Phillips) [44] Supra, at §§25, 51 (per Cheung CJHC), §§76-78 (per Lam VP) & §§85-87 (per Poon JA) [45] Supra, at p337D [46] In particular, Rules 73, 83, 83A, 84 & 85 of ROP of Legislative Council [47] 香港特別行政區訴梁曉暘, HCMA 229/2016; see also Part IV of Cap 382 which render certain conducts committed in LegCo as criminal offences. [48] (2005) 8 HKCFAR 192 [49] (2010) 13 HKCFAR 745, at §§26-27. [50] See Chief Executive of HKSAR v President of the Legislative Council, supra, at §65 (per Lam VP) [51] See ROP, s85 [52] (1991) 14 EHRR 47 [53] At §111 [54] Ibid, at §113 [55] (2002) 5 HKCFA 381, 408G [56] (2013) 16 HKCFAR 837, at §2 [57] Article 25, the Basic Law [58] It is Mr Lee’s contention that the filing of the prescribed registration form for disclosure is just a device to save a Member’s trouble in making disclosure orally in LegCo meetings. However, as discussed below this contention betrays a confusion of the different and separate duties imposed respectively by Rule 83 and Rule 83A of ROP. [59] See the Brief prepared by the Legislative Council Secretariat dated 25.11.2016 (LC Paper No. LS 15/16-17, Appendix IV, fn 4) in respect of the Prosecution’s request [60] Supra, at §337C-E [61] [1972] 1 QB 522, at 531F [62] [2008] 1 All ER 1, at §19. [63] (2004) 7 HKCFAR 600 [64] [1979] HKLR 1 [65] (2005) 8 HKCFAR 192 [66] (2012) 15 HKCFAR 185 [67] (2002) 5 HKCFAR 381 [68] (2013) 16 HKCFAR 525 [69] [2005] QB 73 [70] [2009] 4 HKLRD 840, at §40 [71] P37 & P45 [72] P40 [73] P46 [74] P43 [75] P44 [76] P47 [77] P49 [78] P50 [79] P51 [80] P52 [81] P53 [82] P54 [83] P4 – P20 [84] See ROP(P2), Rules 83 & 83A [85] See the transcripts of TV interview (P30a & P32a), radio interviews of the defendant (P31a, P33a & P34a) and the newspaper cuttings (P35). [86] P36 [87] P21, SHM/HSBC/19 [88] [1981] 1 WLR 1039 [89] at p1042B [90] [1990] 1 HKC 1, at p12H [91] [2008] UKPC 56 [92] (No 2 of 1993) (1993) 61 SASR 1 [93] [2006] EWCA Crim 2694 [94] CACC 304/2013 [95] See also Rule 84, ROP which deals with the situation where a Member has a direct pecuniary interest in a question before LegCo. [96] See for example, P10 [97] HCAL 54/2012. A decision in favour of the defendant was made on 14.6.2012. [98] P56 [99] P39 [100] P33a, Counters 103 & 104 [101] (2003) 6 HKCFAR 113, 128D–H
Chief Justice Ma: 1. At the conclusion of submissions, the appeal was dismissed, with the reasons for the Court’s decision to be handed down. I agree with the reasons contained in the judgments of Mr Justice Ribeiro PJ and Mr Justice Tang PJ. Mr Justice Ribeiro PJ : 2. I respectfully agree with the reasons given by Mr Justice Tang PJ and would add a few reasons of my own. 3. The Commonwealth of Australia seeks the extradition of the appellant on drug trafficking charges on the basis of evidence acquired through telephone intercepts lawfully carried out in Australia. Mr Gerard McCoy SC seeks to argue that such evidence is inadmissible in the Hong Kong extradition proceedings. 4. If section 61(1) of the ICSO[1] were applicable, such evidence would be excluded since it lays down a prohibition on using the product of intercepts as evidence in court proceedings. However, section 61(1) is inapplicable since it does not apply to the foreign intercepts concerned. 5. The appellant seeks to rely instead on Article 30 of the Basic Law which provides: “The freedom and privacy of communication of Hong Kong residents shall be protected by law. No department or individual may, on any grounds, infringe upon the freedom and privacy of communication of residents except that the relevant authorities may inspect communication in accordance with legal procedures to meet the needs of public security or of investigation into criminal offences.” 6. Mr McCoy SC submits that Article 30, like section 61(1), prevents use in court proceedings of evidence derived from the Australian intercepts. He accepts that the Basic Law does not have extra-territorial effect and so does not suggest that the effecting of the intercepts in Australia infringed the Basic Law. What he seeks to argue is (i) that the use of the product of those intercepts in the Hong Kong extradition proceedings is an infringement of the privacy right; and (ii) that such infringement renders the product inadmissible in evidence in those proceedings. 7. That is not a tenable argument. Article 30 is self-evidently concerned with protecting the privacy of communications. It creates an exception allowing officials to inspect communications for the purpose of protecting public security or investigating crime, in a manner prescribed by law. As the exception shows, the right is infringed by some third person gaining access to the content of the communication so that it loses its quality of privacy. Where a law enforcement agency seeks authority to breach such privacy the court’s role is to balance the right to privacy of communications against the public interest in protecting public security and in investigating crime. The ICSO provides the machinery and framework for striking that balance. 8. The question whether certain evidence – including evidence obtained in breach of a constitutionally protected right[2] – is admissible in court proceedings involves a different balance founded on a different right, namely, the right of the defendant to a fair trial. The well-established balance here is between the public interest in the Court having access to relevant and probative evidence on the one hand, and the exclusion of evidence with a prejudicial effect which is out of proportion with its probative value on the other.[3] The Court might also be asked to consider whether the conduct of the prosecution in securing such evidence constitutes an abuse of the process on a stay application.[4] It determining the admissibility of evidence or a stay application, the Court carries out its judicial function in the light of the defendant’s constitutionally protected right to a fair trial. Issues of use and admissibility of evidence are not the concern of Article 30. 9. The suggestion of inadmissibility of evidence obtained in breach of a constitutional right was authoritatively rejected by the Court in HKSAR v Muhammad Riaz Khan[5]and no basis exists for accepting Mr McCoy’s invitation to re-visit the correctness of that decision. 10. No fair trial issues presently arise. The Hong Kong court is not concerned with determining guilt. The magistrate merely has to determine whether a prima facie case exists to justify sending the appellant to face trial in Australia. There is no basis for any discretionary exclusion of the intercept evidence. Mr Justice Tang PJ: 11. Extradition proceedings were commenced against the appellant, a Hong Kong permanent resident, at the request of the Government of the Commonwealth of Australia for his surrender to Australia where he was wanted for certain drug offences. It is common ground that the evidence against the appellant in respect of these offences included evidence of the appellant’s telephonic communications from Hong Kong to Australia, which was intercepted and obtained by Australian authorities in Australia[6] under Australian law and that without such intercept evidence there could be no prima facie case against him. 12. On 17 March 2011, a magistrate made an order under s10(6)(b) of the Fugitive Offenders Ordinance Cap 503 committing the appellant to custody to await the decision of the Chief Executive as to the surrender of the appellant to Australia. 13. Thereafter, the appellant applied for the issue of a writ of habeas corpus ad subjiciendum. For present purpose,we are only concerned with his contention that the committal order was wrongly made because s10(6)(b)(iii) required the evidence to make out a prima facie case sufficient to put the appellant on trial in Hong Kong for the offences and that the intercept evidence would not be admissible in Hong Kong because of Article 30 of the Basic Law. 14. The application was dismissed by Wright J. The appellant’s appeal to Court of Appeal was dismissed on31 July 2012. 15. On 15 July 2013, the appeal committee granted leave to the appellant to appeal to this court. The question of great general importance certified for the purpose of the appeal is: “Whether Article 30 of the Basic Law renders telecommunications intercepts obtained lawfully in a foreign jurisdiction inadmissible as evidence in extradition proceedings in Hong Kong courts? ” 16. Basic Law Article 30 provides: “The freedom and privacy of communication of Hong Kong residents shall be protected by law. No department or individual may, on any grounds, infringe upon the freedom and privacy of communication of residents except that the relevant authorities may inspect communication in accordance with legal procedures to meet the needs of public security or of investigation into criminal offences.” 17. Mr McCoy’s submission is that Article 30renders any intercept evidence of any communication made to or from a Hong Kong resident while he is in Hong Kong inadmissible in Hong Kong. He submitted that the protection given to the privacy of communications is absolute save that “the relevant authorities may inspect communication in accordance with legal procedures to meet the needs of public security or of investigation into criminal offences.” Even so, the exception only permitted inspection and not use of the contents of the communication. 18. Although this appeal is concerned with telecommunications intercepts, it is plain that Article 30 is not concerned solely with telecommunications intercepts. Thus, Mr McCoy submitted that Article 30 provides the same protection to a letter sent to Australia by a Hong Kong resident from Hong Kong. Indeed, it extends to any evidence obtained in circumstances where a resident’s freedom and privacy of communication was affected, for example, by covert surveillance. 19. Mr McCoy accepted that his submission is inconsistent with HKSAR v Muhammad Riaz Khan (2012) 15 HKCFAR 232, a decision of this court. In Riaz Khan, the defendant was convicted of conspiracy to traffic in dangerous drugs. The defendant and a co-conspirator met with an undercover US drug enforcement agent in a hotel room and the conversation about the contents of a suitcase, which was later found to contain 1.9 kg of heroin was secretly taped. The Court of Appeal held that prima facie there was a breach of the defendant’s right to privacy, contrary to Article 14 of the Hong Kong Bill of Rights and Article 30 of the Basic Law. The issue was whether there was a discretion to receive evidence obtained in breach of the defendant’s constitutional rights. Bokhary PJ whose judgment was agreed to by the other members of the court said: “15 … There is under our law no absolute bar to the reception of evidence obtained in breach of a defendant’s constitutional rights. It is a matter of discretion.”[7] 20. It has long been the position at common law, that evidence obtained illegally is admissible if relevant, subject to the discretion to exclude such evidence if necessary to secure a fair trial for the accused. See R v Sang and Another [1980] AC 402, which was decided before the advent of human rights legislation. Now, in England, s 78 of the Police and Criminal Evidence Act 1984 has put the matter on a statutory footing. In Hong Kong, the common law position has not changed notwithstanding the enactment of the Bill of Rights or the commencement of the Basic Law. HKSAR vChan Kau Tai[2006] 1 HKLRD 400 paras 108-116. 21. Mr McCoy invited us to depart from Riaz Khan. In support, he pointed to s 61(1) of the Interception of Communications and Surveillance Ordinance Cap 589 (the Ordinance) which makes any telecommunications interception product inadmissible in evidence in any proceedings before any court. Although Mr McCoy accepted that, s 61(1) does not apply to the intercept evidence in this appeal[8],he submitted s61(1) supports his construction of Article 30 because it was obvious that s61(1)was enacted to give effect to Article 30. In effect, he asked us to interpret Article 30 by reference to s 61(1). This is an impossible argument. It ignored the fact that s61(1) only made evidence obtained by telecommunications interception inadmissible, other protected products (s2), which may include evidence obtained pursuant to a prescribed authorization for covert surveillance as well as interception product (such as product of postal interception), may be disclosed “for the purposes of any civil or criminal proceedings before any court that are pending or are likely to be instituted.” s 59(3)(b)(ii). So, it is obvious the legislature did not share Mr McCoy’s view about the effect of Article 30. 22. It is obvious as Stock VP explained s61(1) was enacted: “22. … to ensure that the confidentiality which the legislature has deemed desirable in the public interest to maintain in relation to methods and extent of lawful interceptions in this jurisdiction does not adversely impact upon the ability of defendants to secure a fair trial. Section 61 itself is replete with provisions designed to maintain confidentiality. ...” 23. Similar provisions in the Interception of Communications Act 1985 (the 1985 Act) were also explained by the necessity for secrecy. R v Preston[1994] 2 AC130. In R v P[2002] 1 AC 146, Lord Hobhouse of Woodborough said at 165 “Where the Act did not apply surveillance evidence was in principle admissible subject to section 78 and the ordinary safeguards.” R v P held that telecommunications intercept evidence obtained lawfully outside the UK (hence the 1985 Act did not apply), although they involved at least one party within the UK, was admissible in criminal proceedings in the UK. 24. Mr McCoy also submitted that we should deconstruct Article 30 and give meaning to the first sentence in Article 30 by contrast-effects with the second sentence. Thus read, he said we should conclude that the only exception to the protection of the freedom and privacy of communication are the limited exceptions in the second sentence. He further submitted that the expression “department or individual” in the second sentence cover the courts. I do not agree. The clear purpose of the second sentence was to make clear that no “department or individual” other than “relevant authoritiesmay inspect communication” and then, only “in accordance with legal procedures to meet the needs of public security or of investigation into criminal offences.” It has nothing to do with the admission of relevant evidence. 25. In the interpretation of the Basic Law, “a purposive approach is to be applied” and “as to the language of its text, the courts must avoid a literal, technical, narrow or rigid approach. They must consider the context.” Ng Ka Ling and Others v Director of Immigration (1999) 2 HKCFAR 4 at 28. The purpose of the second sentence is clear. Bokhary PJ explained in Koo Sze Yiu and Another v Chief Executiveof the HKSAR(2006) 9 HKCFAR441 at 449, it was to control covert surveillance. It was not to change the common law position about the admissibility of relevant evidence. Neither the language nor the purpose of Article 30 supports Mr McCoy’s submission. On the contrary, it runs counter to the general theme of continuity reflected in the Basic Law. Secretary for Justice v Lau Kwok Fai and Another (2005) 8 HKCFAR 304 at 321. 26. For the above reasons, I agreed to the dismissal of the appeal at the conclusion of the hearing on 24 February 2014. Mr Justice Bokhary NPJ: 27. The following is all that I would add to the reasons given by Mr Justice Tang PJ for the Court’s decision, announced at the conclusion of the hearing, to dismiss this appeal with costs. Mr Gerard McCoy SC for the appellant invited the Court to lay down an absolute rule to the effect that no evidence obtained in violation of the freedom and privacy of communication guaranteed by art. 30 of our constitution the Basic Law would be admissible. He relies on the difference between the present case and the case of HKSAR v Muhammad Riaz Khan (2012) 15 HKCFAR 232 which difference consists of the fact that the present case concerns the interception of telecommunications while Khan’s case concerned covert surveillance. That is a difference which is important for some purposes, but not for present purposes. And Mr McCoy has not shrunk from – there being no reason why he should – inviting us to depart from our decision in Khan’s case. 28. In Khan’s case, four members of the Court simply expressed their agreement with the judgment given by one member of the Court. The fact that I was that one member emphasized in my mind the importance of looking with care at any judgment of ours which responsible counsel seriously submits is insufficiently protective of a fundamental right or freedom. I therefore approached Mr McCoy’s submission in this regard with, if anything, a predisposition in its favour. Nevertheless, I found myself unable to accept it. 29. The test laid down in Khan’s case, which is to be found at para 20 of the report, is this: “Evidence obtained in breach of a defendant's constitutional rights can nevertheless be received if, upon a careful examination of the circumstances, its reception (i) is conducive to a fair trial, (ii) is reconcilable with the respect due to the right or rights concerned (iii) appears unlikely to encourage any future breaches of that, those or other rights. The risk-assessment called for under the third element will always be made by the courts, vigilantly of course, in the light of their up-to-date experience. Thus is achieved, consistently with the constitution, a proper balance between the interests of individual defendants and those of society as a whole. It cannot have been the framers' intention - and is not the constitution's effect - to stand in the way of such of balance being struck. Just as rationality and proportionality can justify an impact on a non-absolute constitutional right, so can they justify a discretion to receive evidence obtained in breach of a constitutional right. Under the test stated above, the discretion concerned is rational and proportionate. The factors to be taken into account in applying this test and the weight to be accorded to each such factor will depend on the circumstances of each case.” As can be seen, there is no question of any discretion to receive evidence the reception of which is not reconcilable with the respect due to any right or freedom concerned. The discretion is the well-established one to exclude otherwise admissible evidence if its reception would be unfair in the circumstances. Lord Walker of Gestingthorpe NPJ: 30. I agree with the judgment of Mr Justice Tang PJ and also with the concurring judgment of Mr Justice Ribeiro PJ. Mr Gerard McCoy SC, Mr Andrew Lynn and Ms Denise Souza, instructed by Haldanes, for the applicant/appellant Mr Anderson Chow SC, instructed by the Department of Justice, Mr Wayne Walsh, Deputy Law Officer (Mutual Legal Assistance) and Ms Linda Lam, DPGC of the Department, for the respondents [1] Interception of Communications and Surveillance Ordinance (Cap 589), section 61(1): “Any telecommunications interception product shall not be admissible in evidence in any proceedings before any court other than to prove that a relevant offence has been committed.” The qualification “other than to prove that a relevant offence has been committed” merely preserves admissibility in relation to “a relevant offence” which is defined in section 2 to involve offences involving prohibited disclosures of interception product or information relating to obtaining the same. [2] HKSAR v Muhammad Riaz Khan (2012) 15 HKCFAR 232 at §§15 and 20. [3] Secretary for Justice v Lam Tat Ming (2000) 3 HKCFAR 168 at 178-179; Lau Ka Yee v HKSAR (2004) 7 HKCFAR 510 at §53; Kissel v HKSAR (2010) 13 HKCFAR 27 at §96. [4] HKSAR v Lee Ming Tee (2003) 6 HKCFAR 336. [5] (2012) 15 HKCFAR 232. [6] The interception of communication takes place when, and at the place where, the electrical impulse or signal which is passing along the telephone line is intercepted in fact. R v Aujla [1998] 2 Cr App R 16 at 19B-E. [7]The discretion to exclude should be exercised “whenever (the court) considers it necessary to secure a fair trial for the accused.” Li CJ in Secretary for Justice v Lam Tat Ming and Another (2000) 3 HKCFAR 168 at 178J. Mr McCoy accepted that a magistrate hearing an application for extradition has no discretion to exclude admissible evidence. Thanat Phaktiphat v Chief Superintendent of Lai Chi Kok Reception Centre and Another CACV 5/1995 (12 May 1995). [8] s 61(1) only applies to telecommunications intercepts obtained pursuant to authorization obtained under the Ordinance.
Chief Justice Ma: 1. At the hearing, the Court unanimously allowed the appeal with reasons to be provided later. Those reasons are given in the judgment of Mr Justice Ribeiro PJ, with which I agree. Mr Justice Ribeiro PJ: 2. The respondent in this appeal, Ms Chu Ang (“Ms Chu”), was charged with accepting an advantage as an agent contrary to section 9(1)(a) of the Prevention of Bribery Ordinance (“POBO”).[1] The Magistrate, Ms Yim Shun-yee, ruled that Ms Chu had no case to answer, holding that she was not an “agent” for the purposes of that section.[2] On the prosecution’s appeal by way of case stated, that ruling was upheld by DHCJ Gary Lam.[3] Not satisfied with the question certified by his Lordship,[4] the prosecution sought leave to appeal from the Appeal Committee on a reformulated question and on the substantial and grave injustice basis, pointing out that a number of similar cases had arisen with the same outcome, and submitting that guidance was needed as to the proper approach to the status of “agent” in the aforesaid context. The prosecution conceded that, treating this as a test case, even if successful on appeal, it would not seek an order for the case to be remitted for resumption of the trial before the Magistrate, so that Ms Chu’s verdict of acquittal would stand. Leave to appeal was granted by the Appeal Committee on the basis that it is reasonably arguable that there has been a substantial and grave injustice in that the law had been misapplied in the decisions below.[5] A. Section 9(1)(a) and the charge 3. POBO section 9(1)(a) materially provides as follows: “Any agent who, without lawful authority or reasonable excuse, ... accepts any advantage as an inducement to or reward for or otherwise on account of his ... having done ... any act in relation to his principal's affairs or business; ... shall be guilty of an offence.” 4. Two definitions in POBO section 2 are relevant: “‘Agent’ includes a public servant and any person employed by or acting for another.” “‘Principal’ includes— (a) an employer; (b) a beneficiary under a trust; (c) a trust estate as though it were a person; (d) any person beneficially interested in the estate of a deceased person; (e) the estate of a deceased person as though it were a person; and (f) in the case of an employee of a public body, the public body;” 5. The charge against Ms Chu was drawn as follows: “CHU Ang, on or about the 11th day of July 2013, in Hong Kong, being an agent, namely a violin teacher engaged by her principal LAW Chi-yin Myrian, without lawful authority or reasonable excuse, accepted from Chairman Instruments Trading Limited an advantage, namely a gift, loan, fee, reward or commission consisting of $20,000 Hong Kong currency, as an inducement to or reward for or otherwise on account of the said CHU Ang, having done an act in relation to her principal’s affairs or business, namely arranging for the said LAW Chi-yin Myrian’s purchase of a violin from the said Chairman Instruments Trading Limited.” B. The facts 6. The facts upon which the no case to answer ruling was based were not in dispute. Ms Chu had, since about 2009 or 2010, been engaged by Ms LAW Chi-yin Myrian (the first prosecution witness, “PW1”) to give private violin lessons to PW1’s son Sampson Tam Sum-yin (“Sampson”), starting when he was aged 10. Ms Chu was paid $650 for each one-hour lesson four times per month. 7. In May 2013, PW1 told Ms Chu that Sampson wanted a new, Italian-made violin and asked Ms Chu to help find a suitable one. Ms Chu later informed PW1 that some Italian violins were available and, at PW1’s request, got the shop in question, Chairman Instruments Trading Ltd (“CITL”), to reserve them for a month. PW1 had not previously heard of CITL. On 25 June 2013, Ms Chu accompanied PW1 and Sampson to CITL, having arranged for the violins to be made available. After Sampson, and then Ms Chu, tried out the violins, Ms Chu indicated that one of them was preferable and it was chosen for purchase. 8. Its list price was HK$99,000 but Ms Chu took part in the bargaining process and helped PW1 to negotiate the price down to HK$80,000 to include a violin bow. That was the price PW1 paid. About two weeks later, CITL paid Ms Chu HK$20,000 which was commission for the purchase made by PW1. Ms Chu had never told PW1 about such commission. 9. In her testimony, PW1 said that she had sought Ms Chu’s advice and assistance in the purchase because Ms Chu was her son’s violin teacher and that she would not have bought the instrument if Ms Chu had not recommended it. She stated that she would not have allowed Ms Chu to receive the rebate. 10. The second prosecution witness, Ms Wong Mei-wun (“PW2”) was an accounts clerk employed by CITL. She testified that the violin had a list price of $99,000 and a wholesale price of $58,000 and that, having been purchased by PW1 for $80,000, the sum of $20,000 was rebated to Ms Chu. This was evidently established practice at CITL, as she explained: “… CITL would pay back the price difference to a teacher who referred a student to the company to make a purchase. PW2 confirmed that CITL offered different discounts to ‘walk-in customers/students’ and ‘teachers’. If it so happened that a teacher brought a student along to purchase a violin, CITL would pay the teacher the difference between the two discounts. The witness agreed that the higher the discount that the teacher succeeded in negotiating for on behalf of the student, the less price difference the teacher would get.”[6] 11. The witness statement of the third prosecution witness, Ms Hui Suk-ha (“PW3”), an assistant to PW2 in CITL’s accounts department, was admitted in evidence without cross-examination. In it, she elaborated upon the system for rebates or commissions: “PW3 pointed out that the sources of CITL’s customers were mainly walk-in customers and regular customers such as musical instrument teachers, schools and music companies. After negotiating the price with the customer, the salesman would inform PW3 of the category of customer concerned, the model number of the musical instrument sold, the discount and the concessional rate offered (if any). The discounts offered by CITL could be divided into the ‘wholesale price’ and the ‘tutor’s price’. The former was roughly 50% of the ‘retail price’ while the latter was a discount of about 40% on the original price. The wholesale price was often offered to corporate accounts, music companies, and musical instrument tutors with a business registration certificate[s] or those who had been in collaboration with the company for a long time. Any customer purchasing a musical instrument in the capacity of musical instrument tutor would be required to produce his music tutor certificate for verification by CITL. As for walk-in customers, they might be given a discount ranging from about 10% to 20%. PW3 was aware that some teachers would refer or bring their students to CITL for purchasing musical instruments or the relevant products. CITL would pay the difference between the actual selling price of the musical instrument and the wholesale price or the teacher’s price to the tutor as a rebate. ...”[7] 12. Since the proceedings ended with the Magistrate’s ruling of no case to answer, there was no occasion for Ms Chu to give evidence. However, the Magistrate referred to what Ms Chu had said in her cautioned statement: “The respondent admitted that she was the violin teacher of PW1’s son. The respondent took PW1 and her son to CITL for the purchase of a violin. The respondent said that she would negotiate with CITL the prices for her students and would probably get a discount of 15-30%. She admitted that after her student had successfully made a purchase, CITL would call her about the commission payable for the transaction. However, she had no idea as to how the commission was calculated. She agreed that her name, telephone number and bank account number were found in the invoice relating to PW1’s purchase of the violin. She believed that the commission for the purchase made by PW1 was deposited into her bank account. The respondent also agreed that she had never told PW1 she would receive a rebate from CITL for PW1’s purchase of the violin but she thought there was nothing wrong for her to receive it since the student or the parent would have paid more if they purchased it from elsewhere. She admitted to receiving the said HK$20,000 from CITL after arranging for PW1 to purchase the violin from it.”[8] C. The Magistrate’s ruling of no case to answer and Case Stated 13. The Magistrate observed that the prosecution’s evidence was “basically not in dispute” and concluded that it had not “established a prima facie case of any agent-principal relationship between the defendant and the witness for the purposes of the Ordinance”.[9] 14. In reaching that conclusion, the Magistrate’s focus was on PW1’s contractual relationship with Ms Chu as Sampson’s violin teacher, treating the selection and purchase of the new violin as something quite separate. The teaching relationship, she held, was “based on an independent contract of services”[10] and assistance given by Ms Chu in the purchase of the violin was purely voluntary and fell outside that contract.[11] 15. The Magistrate held that an agent-principal relationship had already to be in existence at the time when an offence was committed under section 9(1)(a) and accordingly, the violin acquisition, being outwith their contractual relationship, Ms Chu was not an “agent” for the purposes of the statutory offence: “I am of the view that any agent-principal relationship to which Section 9(1)(a) applies must exist at the same time and comply with the interpretations of agent and principal under the Ordinance. The defendant provided violin teaching service to the witness’s son in return for the agreed reward from her in the capacity of an independent contractor. The defendant performed the terms of his service contract in the capacity of a party to the contract, which did not include selecting and purchasing a violin on her behalf. Further, according to the witness’s testimony, their contractual relationship was restricted to the time of teaching. At the time of her accompanying (them) to CITL for the purchase of the musical instrument, the agent-principal relationship between the two parties did not exist at all.”[12] 16. She went on to hold that even if one were to focus on the purchase transaction as involving Ms Chu acting for PW1, Ms Chu was not an “agent” because she was not in a “special relationship” and did not come under an enforceable duty of trust and loyalty sufficient to constitute PW1 Ms Chu’s “principal”: “Even if the voluntary act in the matter of purchasing the violin can be deemed as acting for the witness, there was no special relationship between the witness and the defendant which would enable the former to enforce (a duty of) trust and loyalty against the latter. That is, even though the witness took the view that the defendant was required to accompany her to try the violins and offer professional advice upon promising her to do so, all these were assistance rendered by the defendant voluntarily, but not (a duty) that could possibly be enforced. I am of the view that the interpretation of principal does not apply to the witness, and on the evidence of the prosecution, the witness is not the principal for the purposes of the ordinance, either.”[13] 17. The premise of the Magistrate’s ruling was therefore that, in order to make the defendant an “agent” for section 9(1)(a) purposes, the act charged had to fall within a pre-existing legal relationship, in this case, either the contractual violin teaching relationship or a special relationship giving rise to an enforceable duty of trust and loyalty. Those themes are reflected in the questions put forward for the opinion of the Judge in the Case Stated as follows: Question (1) I ruled that the teacher and student’s parent relationship between the respondent and PW1 was one based on an independent contract for services. Did I err in the aforesaid ruling? Question (2) Based on the fact that the scope of the independent contract of services between PW1 and the respondent did not cover assistance rendered to PW1 in the selection of a suitable violin, even though there was a teacher and student’s parent relationship between them, such a relationship did not extend to the length of time when PW1 invited the respondent to assist in choosing a violin. Hence: (a) The principal-agent relationship did not exist between the two parties in the matter of selecting and purchasing a violin. Did I err in law in respect of the aforesaid ruling? (b) If no special relationship existed at the time of selecting and purchasing a violin, the respondent could not become a person acting for PW1, and thus an agent of PW1, for rendering assistance voluntarily in the purchase of the violin. Did I err in law in respect of the aforesaid ruling? Question (3) Based on the fact that the scope of the independent contract of services between PW1 and the respondent did not cover assistance offered to PW1 in selecting a suitable violin, I found that the interpretation of “principal” in Section 2 of POBO did not apply to PW1 in the matter of the respondent assisting in the purchase of the violin. There was no special relationship between them. The respondent did not owe a fiduciary duty to PW1. Did I err in law in making the aforesaid finding? Question (4) For the correct explanation of “in relation to his principal’s affairs or business” as stated in Section 9 of POBO, I also based on the fact that the scope of service involved in the independent contract between PW1 and the respondent did not include assisting PW1 in selecting a suitable violin, (a) Did I err in law in not considering whether PW1 was prejudiced? (b) Did I err in law in not considering and determining whether the respondent’s collection of the rebate had harmed the principal’s interest or damaged the relationship of trust between the principal and the agent? Question (5) Did I err in law in ruling that the respondent had no case to answer? D. The Judge’s decision 18. The appeal was heard by DHCJ Gary Lam on 13 September 2018. By that date, two highly germane decisions of this Court had been published, namely, HKSAR v Luk Kin Peter Joseph (“the Peter Luk case”)[14] and Secretary for Justice v Chan Chi Wan Stephen (“the Stephen Chan case”),[15] to which I shall return. 19. The Judge apparently approved the submission of Counsel for Ms Chu[16] to the effect that the status of “agent” and “principal” arises only in established commercial relationships or at least in relationships where the agent had been given authority, or come under a duty, to act for another: “Mr Lee pointed out that in the cases that Mr Tam[17] relied on, the ‘agents’ and ‘principals’ had obvious employment or business partnership relationships (e.g. director of an affiliated company); fiduciary obligations; and/or substantial conflict of interest. He submitted that in cases where the existence of agent/principal relationship between the two parties could be proved, the courts were all of the view that some necessary requirements must be fulfilled, and those cases could extend to the following principle: To become an agent, that person must be given some certain authority/duty or possessing continuous authority/duty, and act for another under the above situation, only then could the role of agent arise.”[18] 20. Continuing to cite Counsel’s argument with approval, his Lordship held that such relationships were to be distinguished from situations where the alleged agent merely offered assistance on a non-commercial, voluntary basis in a “social or friendly” context, falling outside section 9(1)(a): “Mr Lee considered that, as shown in the related cases, the courts did not find that the agent/principal relationship existed between the two parties because one person undertook to offer assistance to another under a situation which was non-commercial, entirely on a voluntary basis and merely involving social or friendly aspects. ... The position adopted by the appellant was that even if a person was not given any authority or fiduciary relationship did not exist between the two parties, the capacity as agent could still be established (e.g. friend making self-nomination). Mr Lee criticised that the interpretation of section 9 made by Mr Tam was clearly too loose that it toppled the ordinary social ethics and widely accepted social behaviour, thereby raising the assistance offered to others out of good intention and on a voluntary basis to self-exclusive fiduciary duty which could be resulted in one’s own imprisonment. As this was definitely not the legislative intent, what the appellant said could not stand. …”[19] 21. Commenting that “[the] crux of the issue ... lies in whether the capacity as agent can be established”[20] the Judge held that in the present case: “Judging from the existing evidence, I consider that in respect of the purchase of the violin, the respondent only provided her ‘services’ (namely arranging for PW1 and Tam SY to choose and buy a violin from CITL; providing opinion on timbre; and allowing them to obtain a discount). She did not do something in the name of PW1, do something on behalf of PW1 or do something in place of PW1. Even if PW1 relied on the respondent’s opinion, that would not have made her PW1’s agent.”[21] 22. In so holding, the Judge rejected the submission of Mr Tam SC (citing the Peter Luk case)that: “... it is not necessary for a person to be under any legal, contractual or fiduciary obligation to act in relation to the affairs and business of another in order to be the latter’s ‘agent’. The CFA holds that the acceptance of a request to act may itself create a duty to do so honestly and in good faith. Besides, it is sufficient for a person, by accepting instructions to act or acting voluntarily for another, to come under a fiduciary duty.”[22] 23. He also rejected the submission that the arrangement for a secret commission subverted the integrity of the agency relationship between Ms Chu and PW1 to the detriment of PW1’s interests. Having decided that Ms Chu was not PW1’s agent in the purchase transaction he thought it unnecessary to take any such detriment into account: “... in respect of the purchase of a [violin] and for the purpose of Section 9, I do not think that the respondent was PW1’s agent. The court therefore did not need to take into the account whether the respondent had injured the relationship of trust and loyalty between her and PW1 which was hence to the detriment of PW1’s interests.”[23] 24. Two other features of the judgment may be noted. First, the Judge appears to have considered the question whether PW1 had suffered economic loss to be relevant: “… Even if the respondent had not received a commission, the CITL would not have sold the violin at a lower price. Currently, there was no evidence that PW1 had other better choices or that the respondent deliberately recommended CITL to PW1 while knowing full well that the selling prices at the CITL were higher. In other words, PW1 got what she wanted without suffering any economic loss. ... the respondent completed the task successfully according to PW1’s requirements. Without the respondent’s referral, PW1 might not know the channel through which Italian violins could be bought. What was more important is that if it had not been for the respondent, PW1 would not have been given the relevant discount. In my view, the respondent did not deviate from her duty regarding the purchase of a violin.”[24] 25. Secondly, his Lordship appears to have thought that where a system of commissions could be considered “normal practice”, recipients of the advantage would fall outside section 9(1)(a): “Even if I was wrong on the issue of whether the respondent was PW1’s agent, one of the purposes of Section 9, in my view, is to prevent businessmen and intermediaries from transferring unnecessary transaction fees to consumers. In the present case, there was no evidence that PW1 paid unnecessary money to buy the [violin]. It is a normal sales / marketing strategy for a store to offer commissions to musical instrument instructors, tour guides, sports coaches, etc. to encourage them to refer customers. The above people, who, in the capacity of personal friends, voluntarily provide their students, tour members, friends and relatives with professional shopping opinion as an aspect of ordinary social interaction, should not be regarded as agents and regulated by Section 9.”[25] 26. The Judge formally answered all the questions in the Case Stated in the negative and thus upheld the Magistrate’s approach of requiring the impugned act to be performed pursuant to a pre-existing legal relationship. E. The Peter Luk case 27. The Peter Luk case involved a listed company X which had a subsidiary Y, which held the shares of Z, a sub-subsidiary. Mr Luk and his co-defendant Ms Yu were the directors of Y but had no legal relationship with X. X wished to sell Z and X’s chief executive, Mr Yeung, asked Mr Luk to find a third party buyer for Z. Mr Luk put up, as an ostensibly independent purchaser, a company which he beneficially owned. Mr Luk was a person “connected” with X, so that acquisition of Z by a company beneficially owned by him would require disclosure of a connected transaction to the Stock Exchange, triggering various conditions to be met before acquisition could proceed. However, Mr Luk and Ms Yu signed a board minute as Y’s directors falsely confirming that “none of the directors of [Y] was interested in the transactions herein contemplated” so that X would notify the Stock Exchange that the purchasing company and its ultimate beneficial owners were independent of both X and its connected persons. It was alleged that Mr Luk had bribed Miss Yu to co-operate in publishing the false statement by offering her 1.5 million of his shares in X. They were charged with offering and accepting an advantage as agents of X, contrary to POBO section 9(1) and (2). 28. A central facet of the defendants’ defence was the contention “... that they could not be agents of [X] because they were not its directors or employees. They owed it no legal or fiduciary duties.”[26] In other words, that there was no pre-existing legal relationship between themselves and X. This was rejected by the Court of Appeal which held that they were X’s “agents” because they were persons acting for X in finding a purchaser for Z’s shares.[27] This led to the following question being certified on appeal: “What is the meaning of ‘agent’ for the purposes of s.9 of the [POBO] and specifically whether a person who is under no legal, contractual or fiduciary obligation to act in relation to the affairs or business of another is that person's ‘agent’ for the purposes of s.9?” 29. In dealing with that question, Lord Hoffmann NPJ’s judgment[28] directly addresses the issue which is central to the present case. He held that whether the Judge and the Court of Appeal were right to hold that the appellants were agents of X turned upon the definition of “agent”, which includes “any person … acting for another”.[29] He noted that counsel for the defendants had submitted that: “... [a] person cannot ... be an agent for the purposes of the Ordinance unless there is a pre-existing contractual or fiduciary relationship which obliges him to act. ‘[M]erely because a person acts in accordance with another's request does not render him an agent of that other unless he is bound to act upon [it]’.”[30] 30. His Lordship pointed out that this was contrary to a consistent line of authority in Hong Kong which: “... makes it clear that no pre-existing duty is required. Acceptance of a request to act may itself create a duty to do so honestly and in good faith.”[31] 31. The authorities cited included R v Chong Chui Ha,[32] the facts of which were summarised by Lord Hoffmann NPJ as follows: “... a firm of estate agents received an offer of the asking price for a flat which they were marketing. Later, someone else made them a higher offer. An employee of the estate agents told the representative of the first buyer that if he paid her $200,000, she would not pass on the higher offer to the owner. Charged with soliciting a bribe contrary to s.9(1), the defendant submitted, as in this case, that she was not an agent for the purposes of the Ordinance: ‘it is not sufficient for a person merely to act for another person’.”[33] 32. His Lordship explained why that submission was rejected: “It is true that she had no power to contract on the owner's behalf. Nor was she obliged to do anything. If she had not lifted a finger to find a buyer, she would not have been in breach of contract. Nor was the owner going to pay for her services. She was hoping to share the commission of the buyer's agent. But Keith J held, rightly if I may respectfully say so, that by accepting instructions she came under a duty, so far as she acted for the owner at all, to do so honestly and in his interest. That made her his agent for the purposes of the Ordinance.”[34] 33. His Lordship went further: “It is not even necessary that there should have been a request to act. A person who is in a position to act on behalf of another and voluntarily does so may also thereby assume fiduciary duties.”[35] 34. This was illustrated by Hung John Terence v HKSAR,[36] where a voting member of the Jockey Club had, without being asked to do so by the Club, proposed someone for full membership, having solicited and accepted a bribe for that purpose. As Lord Hoffmann NPJ points out: “Mr Hung was not under any contractual or fiduciary duty to propose members of the Club. He had not even been asked to do so. But, having chosen to recruit a member on behalf of the Club, he came under a duty to do so in good faith and not to exploit his position to obtain a bribe.”[37] 35. It was held that section 9(1)(a) clearly applied to Mr Luk and Ms Yu: “Having agreed with Mr [Yeung], acting for [X], that he would find a buyer for [Z], Mr Luk created a reasonable expectation that he would act in the interest of [X] and to the exclusion of his own interest. More specifically, he assumed a duty to act in good faith and not deceive [X] into making a false statement to the Stock Exchange. Miss Yu was aware that this was the basis upon which he was putting forward [the purchaser company] as a buyer and participated in his deception.”[38] 36. Lord Hoffmann NPJ therefore construed section 9(1)(a) as qualifying a person as an “agent” where he or she was “acting for another”, having agreed or chosen so to act in circumstances giving rise to a reasonable expectation, and hence a duty, to act honestly and in the interests of that other person to the exclusion of his or her own interests, without the need for proving any pre-existing legal relationship between them or even necessarily proving a request by that other person for the agent so to act. As his Lordship noted,[39] a fiduciary duty often arises in similar circumstances. There is, however, no need to burden the construction of section 9 by detailed discussion of the law of fiduciaries or other branches of the law. It is clear, for instance, from the expansive nature of the definition of “principal” set out above,[40] that the section 9 scheme goes well beyond ordinary principles of agency law. 37. Applying the Peter Luk case to the present, one is led to conclude that: (a) The Magistrate and the Judge fell into error in requiring proof that Ms Chu’s act of accepting an advantage occurred pursuant to a pre-existing legal relationship if she was to be treated as an “agent” under section 9(1)(a). (b) They erred in focussing on the independent contract for services whereby Ms Chu gave violin lessons to Sampson as the relevant pre-existing relationship. They ought instead to have concentrated on the role Ms Chu had played regarding purchase of the violin. (c) They wrongly held that Ms Chu was not an “agent” in relation to the purchase of the violin because that transaction fell outside the scope of the pre-existing contractual relationship. (d) They also erroneously held that even if one were to focus on the violin purchase, Ms Chu was not an “agent” because she was acting voluntarily and did not thereby come under an enforceable duty of trust and loyalty in favour of PW1. 38. The Court’s judgment in the Peter Luk case had not been published when this case came before the Magistrate. However, the Judge was referred to, and himself cited, that authority,[41] but it is evident that he did not apply it. F. The Stephen Chan case and POBO section 19 39. In the Stephen Chan case, it was pointed out[42] that section 9(1)(a) does not require the agent to have been acting in his capacity as an agent within a pre-existing relationship but instead, that the relevant act done (or not done) must be “in relation to his principal’s affairs or business”. [43] It was held that this means that his conduct must be “aimed at the principal’s affairs or business” and that : “... on a proper construction of s.9 in the light of its mischief, the induced or rewarded conduct ‘aimed at the principal’s business’ has to be conduct which subverts the integrity of the agency relationship to the detriment of the principal’s interests.”[44] 40. It was emphasised that such detriment does not require the principal to suffer any economic loss: “... the prejudice to the principal's interests ... does not need to involve immediate or tangible economic loss to the principal or benefit to the agent at the principal's expense. Of course, it will frequently (or indeed, usually) do so, but that is not essential on the true construction of the section. The agent may, for instance, be induced to act prejudicially to the reputation of the principal's business or to divulge confidential information without any immediately palpable loss to the principal. Where the offering, solicitation or acceptance of an advantage is of such a nature as to undermine the integrity of the agency relationship, that is, of such a nature as to injure the relationship of trust and loyalty that a principal is entitled to expect from his agent, this in itself is capable of constituting the necessary detriment.”[45] 41. Accordingly, it was erroneous for the Judge to suggest that Ms Chu was not caught by section 9(1)(a) because PW1 had not suffered economic loss. As a matter of fact, the Judge’s suggestion that “if it had not been for the respondent, PW1 would not have been given the relevant discount”[46] appears to run contrary to the evidence of PW2 and PW3 who confirmed that “walk-in customers” would be given discounts ranging from 10% to 20%.[47] A reduction from the list price of $99,000 to $80,000 is a discount of about 19%. It is true that a bow was included, but there was no evidence of its cost. But in any event, as pointed out in the Stephen Chan case, economic loss is not an element of the offence. Moreover, Ms Chu made a secret profit representing a significant economic gain equivalent (as Mr Tam SC points out[48]) to about 7¾ months’ worth of Sampson’s tuition fees. The relevant question, applying the Stephen Chan case, was whether, in accepting an advantage consisting of the secret commission, Ms Chu had subverted the integrity of the agency relationship with PW1. 42. The Judge’s suggestion that a person escapes liability under section 9(1)(a) if he or she accepts an advantage in a situation where commissions might be considered “normal practice”, overlooks POBO section 19 which provides: “In any proceedings for an offence under this Ordinance, it shall not be a defence to show that any such advantage as is mentioned in this Ordinance is customary in any profession, trade, vocation or calling.” G. Applied in the present case 43. As pointed out above, a person is an “agent” for the purposes of section 9(1)(a) where he or she “acts for another”, having agreed or chosen so to act in circumstances giving rise to a reasonable expectation, and hence a duty, to act honestly and in the interests of that other person to the exclusion of his or her own interests. There is no need for any pre-existing legal relationship between them. Acceptance of a request to act may suffice. Indeed, it may be sufficient for the agent to choose to act for another even without a request to do so. 44. In the present case, the correct focus is on the purchase of the violin by PW1 from CITL since that is the transaction which gave rise to Ms Chu’s acceptance of the $20,000 rebate from CITL. Ms Chu agreed to assist PW1 to source a violin. She made the preliminary arrangements with CITL, accompanied PW1 and Sampson to the shop, helped them to select the violin and took part in negotiating the price eventually paid. This course of conduct involved Ms Chu acting for PW1 in assisting her to purchase the Italian violin from CITL. That purchase constituted the relevant “affairs or business” conducted by PW1 as principal. Ms Chu’s conduct created a reasonable expectation that she would act honestly and in good faith in the interest of PW1, to the exclusion of her own interest in connection with such purchase. 45. Ms Chu knew all along that she would be rewarded by CITL by payment of a commission but did not mention this to PW1. The evidence was that there was in place a system whereby commission was paid to the music tutor who introduces a student-customer making a purchase, representing the difference between the price paid by the customer and CITL’s “wholesale” or “tutor’s” price. The undisputed evidence also showed that the lower the tutor negotiated the customer’s price, the smaller would have been his or her commission. Acceptance of such a secret commission while acting for PW1 in the purchase of the violin placed Ms Chu in a conflict of interest situation, which is one example of a case where the integrity of an agency relationship such as existed between Ms Chu and PW1 would be subverted. Accordingly, the decisions below cannot be supported. H. The respondent’s submissions on this appeal H.1 Need for a pre-existing legal relationship 46. The submissions of Mr Lee SC sought to perpetuate the fallacy that a pre-existing legal relationship must be proved to constitute someone an “agent” under section 9(1)(a). Thus, he criticised the prosecution for alleging that Ms Chu was an agent without first establishing an agency relationship, calling this “putting the cart before the horse”. In contrast, he pointed out that the Magistrate and the Judge had: “... correctly focused on the ‘horse’ rather than the ‘cart’. Fundamentally, if R was not the agent of PW1, it was not PW1’s (and indeed no one’s) concern whether CITL had paid R any money afterwards.” [49] 47. Counsel reiterated the propositions which the Courts below had erroneously accepted. He summarised his submissions as follows: “Given the nature of R’s part-time employment (which was strictly time-based rather than job-based); PW1’s confirmation that R was free to do anything outside the teaching hours, including taking up jobs that would conflict with PW1’s interests; that no obligation was undertaken by, and expected from, R in arranging the purchase, and that there was no actual ‘reliance’ on the knowledge of R, her assistance was truly ‘voluntary’ and ‘gratuitous’ ... No duty of good faith could arise whether from the employment, or from the uncharged ‘acting for’ basis. The ruling of no case was amply justified, and indeed inevitable.”[50] (Emphasis in the original) H.2 The argument that the two authorities are irrelevant 48. The abovementioned submissions obviously cannot stand in the face of this Court’s decision in the Peter Luk case. However, Mr Lee SC sought to evade the effect of that authority by inviting this Court not to apply it “retrospectively”: “In so far as the final judgement of this Honourable Court would involve principles in the Luk Kin judgment, which was decided after the trial of R, the final judgment should not be applied retrospectively to the decision of no case to answer...”[51] (Emphasis in the original) 49. Counsel went further and suggested that both the Peter Luk case and the Stephen Chan case, being “post-trial decisions”, are “relevant to a general discussion of the law on POBO offences, but irrelevant for deciding whether this appeal should be allowed.”[52] 50. Those propositions are heretical and wholly unsustainable. The Court was concerned in the two earlier cases, and is presently concerned, with determining, as a matter of law, the true construction of POBO section 9(1)(a) read together with the definition of “agent” in section 2. As Li CJ pointed out in HKSAR v Hung Chan Wa:[53] “Under the common law, the well-established position is that a judgment determining a legal question operates retrospectively as well as prospectively.”[54] 51. The role of a court is to apply the law to facts which will generally have occurred before its decision. It is not open to a party to invite the court somehow to exempt him or her from application of the law so determined.[55] H.3 The questions raised in the case stated 52. Mr Lee SC sought to justify his attempted evasion of the two abovementioned authorities by reliance on The Attorney General v Leung Chi Kin,[56] but that decision is of no possible assistance to his argument. Huggins J was there concerned to provide guidance regarding the correct form and content of a case stated as a matter of practice and procedure, specifying what it should and should not contain. In the passage relied on by Mr Lee, his Lordship stated: “A case stated is not to be used as a device for obtaining the opinion of the Court upon questions which did not form the basis of the magistrate's decision, and, even where a point did form part of the basis of his decision, if it was not taken at the trial the Court will not allow it to be argued on appeal unless it is one which no evidence could alter: Kates v. Jeffery [1914] 3 K.B. 160”.[57] 53. In the present case, the true construction of section 9(1)(a), read together with the definition of “agent” in section 2, is a question of law that has throughout been at the heart of these proceedings. Indeed, in the light of Ms Chu’s admissions, it has been the sole question in issue. It formed the basis of the decisions below and obviously arises for decision in the case stated. The procedural requirements of The Attorney General v Leung Chi Kin have plainly been met and that decision does not in any way justify the attempted circumvention of the two authorities laid down by this Court. H.4 “Friendly” assistance 54. Mr Lee SC also urged upon the Court the proposition that the offence should not be construed to be so wide as to penalise persons who merely seek to “give a helping hand” to “friends, colleagues and even strangers”.[58] He put forward at the hearing an example he had given in his Written Case as follows: “‘C’ ... bought a cup of coffee at shop Y for colleague ‘D’. As a result of that purchase, stamps were collected and C was entitled to a cup of free coffee as a result of that purchase.”[59] 55. Presumably in this example, C had been requested by D to buy the coffee and provided by D with the money to do so. As a result, C collects stamps from the coffee-shop, presumably as part of a customer-loyalty programme which entitles C to have a free cup of coffee when sufficient stamps are collected.[60] 56. Mr Lee SC’s submission was that C, in purchasing the coffee is “acting for” D and thus deemed D’s “agent” and that C’s collected stamp is an advantage obtained as a result of so acting, making C guilty of an offence. He proffered this as an example showing that such a broad construction of “agent” would lead absurdly to unwarranted criminalisation. 57. It is often unwise to argue by analogy from a hypothetical example since the applicability of section 9 and the legal issues arising must depend on the particular facts of each case. Thus, in the coffee example, I think it clear that C would not be guilty of a section 9 offence, but not because of the meaning of “agent”. 58. The relevant provisions of section 9(1)(a) are set out in Section A of this judgment. The “agent” requirement is only one element of the offence. C may well come within the definition of an “agent” in acting for D in the purchase of the coffee. However, applying the Stephen Chan case,in so far as earning the coffee stamps might be regarded as the “advantage” under section 9(1)(a), it is impossible to see how that could be regarded as conduct by C aimed at D’s business, being conduct which subverts the integrity of the agency relationship in relation to buying the cup of coffee for D. As Fok PJ pointed out,[61] “[the] section does not ... criminalise any and all payments of money by a third party to an agent made without the principal's knowledge and consent.” The conduct and the advantage must be aimed at the principal’s affairs or business in the subverting sense explained in the Stephen Chan case. 59. One can readily agree that the section 9 offence should not be given such a wide ambit that it unacceptably criminalises helpful assistance given to another person honestly and in good faith. However, in a case like the present, we are concerned with a defendant who places herself in a conflict of interest situation and makes a secret profit out of acting for another, clearly subverting the integrity of the agency relationship. 60. A person acting honestly and in good faith can easily avoid POBO liability by disclosing the commission arrangement rather than keeping it secret from the person for whom he or she is acting. The other person’s prior permission to accept the rebate might be sought. No doubt some parents in PW1’s position, if informed of the commission, might be content to permit the tutor to accept and keep it out of appreciation for the tutor’s services, or viewing it as a needed part of the tutor’s remuneration, or as payment for the help given in selecting and buying the instrument. Others, if told, might suggest that the tutor should share the commission with them to reduce the expense of the purchase; or they might suggest that the commission should result in reduced tuition fees, and so forth. Or they may be unwilling to proceed on the basis of the tutor receiving a rebate. These would be matters for negotiation and the tutor could deal appropriately with their reactions, acting honestly and in good faith. H.5 The particulars of the charge 61. Much of Mr Lee SC’s submissions involved a complaint that the prosecution was seeking to depart from the way the charge is particularised, his contention being that the charge limits the prosecution to pursuing a case of agency solely based on acts done within the four corners of the violin teaching contract rather than on Ms Chu “acting ... for” PW1 in connection with the violin purchase. 62. I do not accept that the charge, read as a whole,[62] conveys such a restricted meaning. It states that Ms Chu is an agent who is a violin teacher engaged by PW1, but makes it plain that the charge centres on her act “in relation to her principal’s affairs or business” consisting of “arranging for [PW1’s] purchase of a violin from [CITL]”. It was made clear by prosecution counsel[63] at the trial, that the case against Ms Chu was based on her being an “agent” by “acting for PW1” in the violin purchase, as particularised in the charge. The Judge dismissed Mr Lee SC’s complaint, holding that the charge and the prosecution’s conduct of the case “did not give rise to unfairness to the respondent”.[64] There was no application for, or grant of, leave to appeal on the basis of a ground concerning the framing of the charge. This argument is accordingly not open to the respondent and would not in any event be viable. I. Disposal of the appeal 63. For the foregoing reasons, I would allow this appeal and set aside the rulings of no case to answer by the Courts below. 64. As the Court indicated at the hearing, in the light of the prosecution’s concession, there will be no order for any remitter to the Magistrate and it is to be directed that Ms Chu’s verdict of acquittal stands. 65. The Court having indicated that it would be making the aforesaid orders, the parties were given liberty to lodge submissions regarding the orders for costs which had been made in favour of Ms Chu in each of the Courts below. Their submissions have now been received. 66. Mr Lee SC seeks to persuade the Court that those costs orders should be maintained on the grounds that: (i) “this appeal is a test case ...”; (ii) Ms Chu was “selected arbitrarily to face trial ...”; (iii) the Magistrate and Judge “found the charge to be ambiguous”; and (iv) if, hypothetically, the case were to proceed to trial, she could ultimately succeed. 67. None of those grounds has any merit. It must be borne in mind that the prosecution is not seeking any orders for costs against Ms Chu but only to set aside costs orders that had been made in her favour on the basis of rulings that she had no case to answer which have now been overturned. 68. The prosecution’s concession flowing from the submission that the Court should determine this appeal as a test case was that there should be no remitter and the verdict of acquittal should stand. That concession provides no basis for her receiving any award of costs. 69. The decision to prosecute Ms Chu was not “arbitrary” but fully justified, which follows from the outcome of this appeal. It is unsustainable to submit that the charge was, or was thought by the Courts below to be, “ambiguous”. The hypothesis of ultimate possible success if the case were to proceed to trial is similarly unsupportable. I would therefore set aside the costs orders made in Ms Chu’s favour. Mr Justice Fok PJ: 70. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Chan NPJ: 71. I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Stock NPJ: 72. I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 73. The Court unanimously allows the appeal, sets aside the rulings of no case to answer and the orders for costs made in Ms Chu’s favour in the Courts below and, in the light of the appellant’s concession, directs that Ms Chu’s verdict of acquittal stands. Mr William Tam, SC, DDPP and Ms Karen Yuen, SPP, of the Department of Justice, for the Appellant Mr Robert S K Lee, SC and Ms Cathy W Y Chan, instructed by LCP, for the Respondent [1] Cap 201. [2] TWCC 1031 of 2016 (13 September 2016). The proceedings below were conducted in Chinese. Citations in this judgment from the transcript, case stated and the judgments below are from certified English translations. [3] [2019] HKCFI 1361 (3 June 2019). [4] [2019] HKCFI 2150 (2 September 2019). “Is it correct that when someone, purportedly in a private or friendly capacity, provides gratuitous advice, which is based on the special knowledge of that person in a particular field, to another, no fiduciary obligation on the former could arise which would give rise to an agent-principal relationship for the purpose of [POBO section 9]?” [5] Ribeiro and Fok PJJ and Chan NPJ [2019] HKCFA 42 (15 November 2019). [6] Case Stated §13. [7] Case Stated §§15-16. [8] Case Stated §7. [9] Transcript p 169. [10] Transcript p 165. [11] Transcript p 166. [12] Transcript pp 167-168. See also Case Stated §20(b). [13] Transcript pp 168-169. See also Case Stated §20(c). [14] (2016) 19 HKCFAR 619. [15] (2017) 20 HKCFAR 98. [16] Mr Robert S K Lee SC, appearing with Ms Cathy W Y Chan for Ms Chu. The Judge stated: “I think the comments made by Mr Lee are not groundless” (Judgment §28). [17] Mr William Tam SC appearing with Ms Karen Yuen for the prosecution. [18] Judgment §27. [19] Judgment §28. [20] Judgment §29. [21] Judgment §31. [22] Judgment §17. [23] Judgment §39. [24] Judgment §§36 and 37. [25] Judgment §40. [26] Peter Luk case at §21. They also argued that while they were directors of Y, they had not deceived that company as they were its only directors and must be taken to have consented to Ms Yu accepting the advantage offered by Mr Luk. [27] Ibid at §22. [28] With which the other members of the Court agreed. [29] Peter Luk case at §26. [30] Ibid at §27. [31] Ibid at §28. [32] [1997] 4 HKC 518. [33] Peter Luk case at §29. [34] Ibid. [35] Ibid at §30. [36] FAMC 85/2010 (22 February 2011). [37] Peter Luk case at §31. [38] Ibid at §33. [39] Ibid at §§32-33. [40] Section A. [41] Judgment at §§16-18. [42] Stephen Chan case at §37. [43] Citing Commissioner of the Independent Commission Against Corruption v Ch’ng Poh [1997] HKLRD 652 at 656-657. [44] Stephen Chan case at §53. [45] Ibid at §54. [46] Judgment §37. [47] See Section B above. [48] AC§26. [49] RC§§8-9. [50] RC§18. [51] RC§58(4). [52] RC§107. [53] [2006] 9 HKCFAR 614 at §10. [54] Re Spectrum Plus Ltd [2005] 2 AC 680 at §§4-7. [55] This is not a case involving the overruling of an established line of authority where the issue might arise (left open in Hung Chan Wa) as to the possibility of prospective overruling. [56] [1974] HKLR 269. [57] Ibid at p 273. [58] RC§60. [59] RC§61(2). [60] Mr Lee SC provided two other similarly constructed examples at RC§61. [61] The Stephen Chan case at §142. [62] Set out in Section A above. [63] Ms Cannise Chan. [64] Judgment §14.
Mr Justice Ribeiro PJ: 1. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Tang PJ: 2. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Fok PJ: 3. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Justice Bokhary NPJ: 4. I agree with the judgment of Lord Neuberger of Abbotsbury NPJ. Lord Neuberger of Abbotsbury NPJ: Introductory 5. These two appeals arise out of a decision of the Lands Tribunal (Deputy Judge Kot and Mr K K Chiu) given on 15 October 2014 (LDMR No 23 of 1999). The decision concerned the compensation payable to Penny’s Bay Investment Company Limited (“PBIC”) for the extinguishment of marine rights enjoyed with certain land it owned at Penny’s Bay (“the Land”). The compensation was assessed at $10,952,500 (subsequently adjusted by agreement to $9,431,000), for reasons set out in a judgment which ran to 481 paragraphs, as there were a large number of legal and valuation disputes between the parties. 6. Following that decision, PBIC and the Director of Lands (“the Director”) each appealed on a number of issues. In a judgment given on 16 May 2016, the Court of Appeal (Hon Lam VP and Barma and Poon JJA) resolved a total of eight issues, upholding the Lands Tribunal on some and reversing them on others (CACV 13-6, 115, 116, 119 and 120 of 2015). 7. PBIC appeals to this Court on an issue concerning the interpretation of the restrictive user provisions of the grant under which PBIC held the Land, and the Director appeals to this Court on an issue as to whether the Land should be valued on the assumption that the proposed development giving rise to the loss of marine rights was certain to proceed. 8. The Court of Final Appeal has already delivered a judgment (“the 2010 CFA judgment”) dealing with two questions, which came before it in 2010 as preliminary issues prior to the hearing before the Lands Tribunal – see Penny’s Bay Investment Co Ltd v Director of Lands (2010) 13 HKCFAR 287. The factual and statutory background The factual background 9. The Land lies near the eastern end of Lantau Island. It is now included in the site of Hong Kong Disneyland, which opened in 2005 and was built on about 300 hectares of land reclaimed from the waters of the bay. It has its own MTR station and fast road connections to Hong Kong Island and the airport. In 1994, however, as the Court of Appeal said, Penny’s Bay was a remote corner of the coastline, inaccessible except from the sea or on foot. 10. Before its development, the total area of the Land extended to about 2,010,000 square feet or 18.6 hectares. 11. The Land was acquired by PBIC in 1970 pursuant to an Agreement and Conditions of Exchange dated 2 January 1970 and registered in Tsuen Wan Land Registry as New Grant No 4706 (“the Grant”). The initial term of the Grant was 99 years, less 3 days, from 1 July 1898, and it was subsequently extended to 30 June 2047 by the New Territories Leases (Extension) Ordinance, Cap 150. 12. Para (a) of clause 3 of the Special Conditions of the Grant (“clause 3”) stated that: “the [Land] shall be used for general industrial and/or godown purposes [excluding any offensive trade as defined] and shall not be used for any other purpose whatsoever. … [I]n the event of the [Land] or any part thereof being used for godown purposes or for the storage of petroleum products or dangerous goods … the method of storage … shall be subject to the approval of the Director of Fire Services. Not less than 285,000 sq ft of the [Land] shall be used for shipbuilding purposes only.” Clause 3(b) stated, inter alia, that “no building shall be erected on the [Land] except a factory and/or warehouse, ancillary offices and … quarters for watchmen or caretakers”, although clause 3(c) permitted the erection of residential accommodation for staff working in any industrial activity pursued on the Land. 13. The Land enjoyed limited rights of access to the sea, and, reflecting the nomenclature which has been adopted throughout these proceedings, I shall refer to those rights as “the Marine Rights”. 14. By a tenancy agreement made in December 1975, PBIC let the Land to a subsidiary, Cheoy Lee Shipyards Limited, which carried on the business of shipbuilding and repairing. At all times thereafter until the surrender of the Grant to the Government in 2001 as described below, the Land was used for shipyard purposes, which of course involved making use of the Marine Rights. 15. On 11 March 1994, pursuant to section 5 of the Foreshore and Sea-Bed (Reclamations) Ordinance, Cap 127 (“FSRO”), the Director of Lands published Gazette Notice No. GN 847 identifying a scheme which involved reclaiming the foreshore and sea-bed situated at Penny’s Bay in order to provide for, inter alia, land for the construction of two container terminals, land for industry, back-up areas, and associated infrastructure (“the CT Scheme”). The CT Scheme involved substantial land reclamation (“Reclamation”), which would inevitably involve depriving the Land of the Marine Rights. 16. On 24 March 1995, a draft Outline Zoning Plan No S/I-NELP/1 (“the Plan”) outlining the development plan for the CT Scheme was published. Under the Plan, the area to be reclaimed at Penny’s Bay, together with part of the Land, was zoned for industrial use, container terminals, container back-up area, a business park, and other incidental uses. The majority of the Land was zoned under the Plan for industrial use, and there was to be a new access road which passed through the Land and linked the North Lantau Expressway with the container terminal sites. 17. On 25 April 1995, pursuant to section 8(2) of the Roads (Works, Use and Compensation) Ordinance, Cap 370, the Secretary for Transport published Gazette Notice No. GN 1450, which represented the proposed road scheme (“the road scheme”) associated with the CT Scheme. The notice described in general terms the nature of the proposed road works. 18. On 5 May 1995, pursuant to section 8(1)(c) of FSRO, the then Governor in Council published Gazette Notice No. GN 1574 (“the 1995 Authorisation”), which formally authorised a proposal to reclaim about 1260 hectares of the foreshore and sea-bed at Penny’s Bay for the purpose of construction of two container terminals and associated infrastructure. 19. In or about August 1999, the Government abandoned the CT Scheme and instead promoted the Disneyland Project. The road scheme, which was a necessary element of the CT Scheme and which had never been implemented, was also abandoned. 20. Subsequently, by Gazette Notice No. GN 2230 dated 10 April 2000, the 1995 Authorisation was formally revoked. Four days later, on 14 April 2000, a new authorisation for the Disneyland reclamation in respect of a rather smaller area (about 330 hectares) was published as Gazette Notice No. GN 2231. 21. The Land was required in order to implement the Disneyland project, and it was surrendered by PBIC to the Government by a Deed of Surrender executed by PBIC on 3 April 2001. Upon the execution of the Deed of Surrender, the Government paid PBIC a sum of $1,506,098,750, of which $1,483,380,000 was stated to be an ex gratia payment. The statutory background 22. The relevant provisions of FSRO are described in paras 16-22 of the 2010 CFA judgment, and I will limit myself to the provisions which are centrally relevant to this appeal. 23. Sections 3-6 deal with preliminary steps to be taken before the Director can issue an authorisation for any reclamation (defined as “includ[ing] any work over and upon any foreshore and sea-bed”), and part of the reason for those steps is to enable objections to be made by anyone with “an interest, right or easement in or over the [relevant] foreshore” – ie any marine rights. If there are no objections or if any objections are overruled, the reclamation may be formally authorised under section 7 or section 8 respectively. 24. Section 9 provides that notice of authorisation must be published, and that any such publication must state that anyone who considers that his marine rights “will be injuriously affected by the reclamation” may claim compensation. Section 10 provides, inter alia, that on publication of the notice all marine rights over the land designated for reclamation are extinguished, and section 11 states that the sole remedy of anyone injuriously affected is a claim for compensation under section 12. 25. The legislative guidance on the question of compensation is sparse. It is contained in section 12 (“section 12”), subsection (1) of which provides as follows: “Any person who claims that his [marine rights] will be injuriously affected by the reclamation may deliver to the Director a written claim stating the sum of money which he is willing to accept in full and final settlement of his claim …”. Section 13 provides for either the claimant or the Director to refer the claim to the Lands Tribunal if the claim is rejected or the amount of compensation is not agreed within seven months of service of the claim. 26. In these circumstances, it is unsurprisingly common ground that in this case publication of the 1995 Authorisation extinguished the Marine Rights, and that revocation of that Authorisation did not revive those rights. It is also agreed that PBIC had a vested right to compensation for loss of those rights as a result of the 1995 Authorisation. The question for the Lands Tribunal was how the compensation which had become payable to PBIC by virtue of the 1995 Authorisation should be calculated. The 2010 decision of the Court of Final Appeal 27. There were three preliminary issues before the Court of Final Appeal. They all arose from the question as to “how the compensation which had become payable by virtue of the 1995 Authorisation should be calculated and, in particular, the effect (if any) of the subsequent events” – see para 14 in the judgment of Lord Hoffmann NPJ, with whom the other members of the court (Bokhary PJ, Chan PJ, Ribeiro PJ, and Litton NPJ) agreed. As Lord Hoffmann explained in para 34, the injurious affection referred to in section 12 “means a diminution in the value of land caused by works authorised by statute which would otherwise have been tortious”. 28. The first issue concerned the effect of events which occurred subsequent to the 1995 Authorisation on the valuation exercise required by section 12. As Lord Hoffmann explained in para 27, PBIC’s case was that compensation was to be assessed on the assumption that the 1995 Authorisation was effective, and that “the correct measure was the difference between the value on 5 May 1995 with marine rights and its value after their extinction” (para 28). Accordingly, PBIC argued, the valuation exercise required by section 12 was to be carried out without taking account of any event which occurred after that date. By contrast, the Director contended that, as the CT Scheme had been abandoned, compensation under section 12 should be limited to the loss “caused by the situation of the ship building business being precarious after the [1995] Authorisation and before the sale, together with the difference in the price for which the lease had been surrendered and what its value would have been with marine rights”. 29. On this first issue, after considering the wording of section 12 as well as the wording of the equivalent English legislation, Lord Hoffmann resolved the dispute in favour of PBIC, concluding at para 43 that “nothing which happened after [5 May 1995] can affect the valuation”. This was based on his analysis of section 12, the effect of which he summarised in para 41, in a passage which I think should be quoted in full: “Thus we have a statute which provides for compensation for injurious affection which will be caused by the reclamation but assumes that this has accrued and can be fully quantified before the reclamation has taken place – indeed, when it may be uncertain whether a reclamation will take place at all. In my opinion this can only mean that for the purposes of assessing the compensation, it must be assumed that on the date of authorisation it was certain that the reclamation would take place. This gives effect to the future tense in s.12: the owner claims that his land “will be” injuriously affected, not that it has been or may be so affected. The statute cannot have contemplated that the Government, having given notice that a reclamation was authorised, would be able to invite the Tribunal to speculate as to whether and, if so, when it might happen and have the compensation discounted accordingly.” 30. Lord Hoffmann went on in para 42 to say that: “What this means in practice is that the reclamation is treated as having taken place on the date of publication of the authorisation and the compensation is the difference between the open market value of land in actual enjoyment of its marine rights and its open market value when deprived de facto as well as de jure of its access to the sea”. 31. Accordingly, compensation was to be determined in accordance with Lord Hoffmann’s guidance, by calculating the difference between the value of the Land as at 5 May 1995 with and without the Marine Rights. In these proceedings, this has been described as the difference between “the before value” and “the after value”, and I shall adopt those expressions. 32. The second issue, which only arose if PBIC succeeded on the first issue (which of course it did), was whether the Director was right in contending that, as Lord Hoffmann put it in para 28, because “the value [of the Land] on 5 May 1995 after … extinction [of the Marine Rights] … should also take into account that the [CT Scheme] was expected to bring road connections to [the Land]”, this “would increase its value, probably more than any diminution caused by the loss of marine rights [and so] no compensation would be payable”. 33. In dealing with this second issue, Lord Hoffmann said at para 44 that “the parties to the hypothetical sale on 5 May 1995 would have had expectations about the future which, whether right or wrong, would have influenced the price at which they were willing to deal”. He went on to say that the published plans relating to the Land as at 5 May 1995 may have led to the owner having “lively expectations about how the value of [the Land] would be enhanced by the proposed works”. But he added that “[w]hether such expectations existed and the extent, if any, to which they would have affected the open market value of the land is a matter for evidence when the valuation comes to be done”. 34. In para 45, Lord Hoffmann explained that the assessment of compensation was to be carried out on the basis that “the prospect of new uses for the land, and the increased value which that may have generated, would have entered into the valuations both with and without access to the sea” (emphasis supplied). However, he observed that this did not necessarily undermine the argument that the differences in such valuations could be “not … very substantial” (or, I would add, zero) if the prospect of a new access road would have led to the Land being seen as having value attributable to a use which primarily or exclusively relied on road, rather than marine, access. He concluded in para 46 that both “valuations must take into account all the information which was public knowledge at the time and (apart from the assumptions about marine rights) not be based on any artificial assumptions”. 35. Thus, as Ribeiro PJ explained in a subsequent judgment on costs (FACV No 8 of 2009 dated 27 August 2010), the Court of Final Appeal plainly did not accept the Director’s contention that the after value would be greater than the before value as a result of the prospect of road access. Lord Hoffmann considered that the issue raised a matter of valuation, which could not properly be decided by the Court of Final Appeal as a preliminary point of law. 36. Although there was a third issue, it was not the subject of any oral argument or any significant discussion in Lord Hoffmann’s judgment, and it is anyway of no relevance for present purposes. The reasoning of the Lands Tribunal 37. Thereafter, the valuation of PBIC’s claim for compensation for injurious affection was the subject of detailed expert and factual evidence and full argument before the Lands Tribunal. In accordance with the guidance given by the 2010 CFA judgment, the calculation of the compensation involved assessing the difference between the before value and the after value of the Land. 38. As already mentioned, the Lands Tribunal gave a very long judgment because it had to resolve a plethora of different issues, both of law and of valuation, between the parties. Fortunately, only a few of those issues are relevant for the purposes of this appeal. 39. While it involves a degree of oversimplification, the Lands Tribunal’s assessment of the before value of the Land as at 5 May 1995 can for present purposes be analysed as involving the following five steps: (a) Value of the Land assuming the Marine Rights continued until 2047, enabling shipbuilding use on 285,000 square feet and mid-stream use on the remainder, but with no industrial use (which was economically unfeasible without road access): $551,157,000; (b) Value of the Land assuming the Marine Rights continued (so shipyard use was still enabled on 285,000 square feet) but otherwise assuming that the CT Scheme went ahead (enabling industrial use to be carried out on the remainder): $841,828,000; (c) Additional value resulting from industrial development, as a result of the possibility of the CT Scheme proceeding was thus: $841,828,000 less $551,157,000 = $290,671,000; (d) Market assessment of the CT Scheme proceeding was assessed at 50%, so the additional value attributable to industrial development was accordingly half (c): $145,335,500; (e) Therefore, the before value was (a) plus (d): $696,492,500 (subsequently adjusted by agreement to $694,971,000). 40. Steps (c) and (e) of the before valuation were purely arithmetical and no more need be said about them. However, the other three steps involved evaluation or judgment, and four points should be made about them for present purposes. 41. Steps (a) and (b) of the before valuation proceeded on the assumption that the shipyard use could continue for the duration of the Grant. This was because the before valuation assumed that the Marine Rights would not be lost (and that the other uses there described would also be able to benefit from the Marine Rights): the correctness of this assumption in relation to those steps is not in contention. 42. Secondly, and this is contentious, the valuation exercise involved in step (a) included the assumption that “godown purposes” includes use for storage on open land, and more particularly, as the Lands Tribunal put it, for “mid-stream operation or open storage of containers”. 43. As to steps (b) and (d) of the before valuation, there are two points to be noted, neither of which is contentious for present purposes, but both of which are relevant to the Director’s appeal before this Court. They each arise from the fact that, in order for the Land to be put to industrial use, the CT Scheme would have to be implemented (as the completion of that Scheme, and in particular the construction of road access to the Land, would have been seen as the only possible way by which industrial use could become economically viable). 44. When assessing the value of the Land for industrial use as at 5 May 1995 at step (b), it was necessary to determine what the market would assess as the likely period before the CT Scheme was completed, and industrial use of the Land could accordingly begin. In the light of the evidence, the Lands Tribunal decided that eight years was the appropriate period, and accordingly the present day (or “dead ripe” as it is sometimes rather picturesquely called) industrial value of the Land as at 5 May 1995 had to be discounted to allow for that. 45. Quite apart from delay, there would have been uncertainty in the market as at 5 May 1995 as to whether the CT Scheme would go ahead at all. In the light of the evidence they heard, the Lands Tribunal decided that the market as at that date would have assessed the prospects of the CT Scheme proceeding as being 50-50. Accordingly, the increase in the value of the Land attributable to its being able to be used for industrial purposes had to be adjusted downwards, and this was done at step (d) of the before valuation. 46. The Lands Tribunal’s after valuation of the Land as at 5 May 1995 was a shorter exercise. Again simplifying somewhat, it can be analysed as involving the three following steps: (a) Value of the Land for shipbuilding and godown use: $21,420,600; (b) Value of the Land for industrial use: $664,119,400; (c) Accordingly, the value of the Land is: $685,540,000. 47. Step (c) of the after valuation simply involves aggregating the figures in steps (a) and (b) and nothing more need to be said about it. 48. An important aspect of the assessments in both steps (a) and (b) of the after valuation is that the Lands Tribunal proceeded on the basis that, for the purposes of the after valuation, the CT Scheme was certain to go ahead. 49. Step (a) of the after valuation, like step (a) of the before valuation, proceeded on the assumption that “godown purposes” included mid-stream storage use, and to that extent, but only to that extent, step (a) of the final valuation is controversial. Although step (a) of the after valuation involved taking the same value for shipbuilding use which was assessed as step (a) of the before valuation, it was then very substantially discounted by 90%. This was to allow for the fact that implementation of the CT Scheme would result in the loss of the Marine Rights, and would therefore put an end to shipbuilding use. However, rather than attributing no value to the shipbuilding use, the Lands Tribunal thought that some value should be attributed to it because of the prospect for a change of use. 50. Step (b) of the after valuation ascribed an industrial value to the Land which was different from that contained in the before valuation. This was because the Lands Tribunal considered that, as they proceeded for the purposes of the after valuation on the basis that the CT Scheme was bound to go ahead, the delay factor should be six years, rather than eight years, as it had been in the before valuation. Furthermore, the after valuation included no discount for uncertainty when considering the effect of industrial use, as there was in step (d) of the before valuation. This was again because the Tribunal considered it right to carry out the after valuation on the basis that it was certain that the CT Scheme would proceed. 51. Accordingly, the Lands Tribunal decided that the compensation payable to PBIC for the loss of the Marine Rights should be $694,971,000 less $685,540,000, namely $9,431,000. The decision of the Court of Appeal and the issues on this appeal 52. PBIC and the Director were dissatisfied with some aspects of the determination by the Lands Tribunal, and they each appealed to the Court of Appeal. As mentioned above, there was a total of eight issues raised in that Court, but for present purposes it is only necessary to identify four of them. 53. The first relevant issue applied to step (a) of both the before valuation and the after valuation. It was whether mid-stream storage use was within the expression “godown purposes” in clause 3(a). In disagreement with the Lands Tribunal, the Court of Appeal did not consider that such a use was within the expression, and therefore it concluded that, subject to any further argument, mid-stream storage use was not permitted under the terms of the Grant. PBIC now appeals against the Court of Appeal’s conclusion on this issue. 54. The second relevant issue arose from the rejection by the Lands Tribunal of an argument, to which I have not so far referred and which was raised by the Director, namely that, when carrying out the after valuation as at 5 May 1995, it should be assumed that the Reclamation, ie the reclamation works contemplated by the CT Scheme and the 1995 Authorisation, had actually been carried out. The Court of Appeal agreed with the Lands Tribunal on this issue and so rejected the Director’s appeal on the point. The Director was refused leave to appeal this aspect of the Court of Appeal’s decision by the Court of Appeal and the Court of Final Appeal. 55. The third and fourth relevant issues can be taken together. They both arose from the fact that the Lands Tribunal carried out the after valuation on the basis of an assumption that as at 5 May 1995 the CT Scheme was bound to go ahead. As mentioned above, the Lands Tribunal therefore decided that the after valuation should be carried out on the assumptions that (i) the delay in being able to use the Land for industrial purposes should be six years rather than the eight years appropriate for the before valuation, and (ii) there should be no allowance for the prospect of the CT Scheme not proceeding and the Land therefore not being usable for industrial purposes, unlike the 50% allowance in the before valuation. The Court of Appeal held that the Lands Tribunal were wrong on this issue, and that the after valuation should have been carried out on the basis of the same assumptions in relation to these two points as were made in the before valuation. In other words, step (b) of the after valuation should have involved the value for industrial use being adjusted to allow for (i) eight years, not six years of delay, and (ii) a 50% risk, as opposed to no risk, of industrial use not being available. 56. PBIC now appeal against the Court of Appeal’s decision summarised in para 53 above. Contrary to the conclusion reached by the Court of Appeal, and in accordance with the reasoning of the Lands Tribunal, PBIC contends that “godown purposes” in clause 3(a) of the Grant included mid-stream storage use. 57. And the Director appeals against the Court of Appeal’s decision summarised in para 55 above, namely that the Lands Tribunal were wrong, or not entitled, to assess the after valuation on the assumption that the CT Scheme was bound to be carried out. 58. I will deal with those two issues in turn. The first issue: the meaning of the user covenant 59. The Lands Tribunal concluded that mid-stream storage use of the Land was permissible under the Grant because it constituted use of the Land “for godown purposes”, even though it involved storing goods on open land and a godown was, as they rightly accepted in their judgment, “a structure or building”. They justified this conclusion on the ground that the expression “godown purposes” was concerned with “the nature or purpose of the use instead of confining to whether a building was involved”, and they relied on the decision of Liu J in Cavendish Property Development Ltd v The Attorney General, HCMP 762/1987, 6 August 1988, as being “directly on point”. 60. The Court of Appeal disagreed, stating, without giving much in the way of positively supportive reasons, that “a ‘godown’ must involve a building or part of a building. It does not cover storage in the open”. 61. So far as Cavendish is concerned, I agree with the Court of Appeal that it is of no assistance. The issue in that case was whether use of six floors of a building, let on terms that they could only be occupied “for industrial or godown purposes or both”, could be lawfully used for the purposes of a bank’s data processing centre. Unsurprisingly, Liu J answered that question in the negative. Much more importantly for present purposes, it is self-evident from my very brief summary of the facts that, as the Court of Appeal said, the issue in the present case, namely “whether a godown must involve a building was simply not an issue at all” in Cavendish. Although the relevant words of the user covenant in that case were almost identical to those in the present case, the issue in the present case, whether storage on open land is “for godown purposes” simply could not have arisen in that case, which involved activities on six floors of a building. 62. In para 63 of their judgment, the Lands Tribunal referred to Liu J’s “findings” that “a godown is a place where at least movement of the stored items would be expected” and “storage without more is not user for godown or warehouse purposes”, and concluded they were “directly on the point”. Sentences extracted from a judgement in one case can often appear to support a proposition being advanced in another case, but once those sentences are read in their context, it can be quickly seen that they provide no support for the proposition that storage of goods on open land can be use of that land “for godown purposes”. Thus, Liu J’s quoted observations were not made in connection with the question whether godown purposes have to involve a building, and they do not give, and they did not purport to give, any guidance on that issue. Indeed, bearing in mind the issue in Cavendish, it would be surprising if they had done so. 63. It is right to record that, on this appeal, as in the Lands Tribunal and in the Court of Appeal, both parties referred (albeit only in their written arguments) to other judicial decisions on the interpretation of user restrictions in statutes or contracts. As is so often the position in cases concerning issues of interpretation, earlier decisions involving different documents and different facts are of no assistance, and can sometimes be positively unhelpful as they take the eye off the ball. 64. Turning then to the specific issue raised on PBIC’s appeal, I agree with the conclusion reached by the Court of Appeal. As in many cases involving a dispute as to the interpretation of a few words in a document, there is a limited amount which can usefully be said to explain how I arrive at this conclusion. In this case, as in many others, having identified the rival interpretations, the first stage is to decide what seems to be the natural meaning of the relevant words, and, the next stage is to consider whether there was anything in the document (ie the Grant), or in the surrounding circumstances when it was made, which called that interpretation into question. At any rate in this case, the first stage is almost a matter of impression and the second stage involves identifying a negative, so there is a limited amount that can be said by way of justification for this conclusion. 65. It is clear that a godown is, in summary terms, a building in which storage takes place, and therefore a restriction to use “for … godown purposes” would naturally seem to imply, again in summary terms, use for a building in which storage takes place. 66. However, it is said on behalf of PBIC that, if it had been intended to restrict the use of the land in that way, clause 3(a) would have been differently worded, restricting the use to, for instance, “as a godown or godowns”. When choosing between two rival interpretations of a document, a court should beware of placing weight on an argument that, if the parties had intended a particular meaning, they would have expressed themselves differently. Occasionally, such an argument has some force, but normally it is unhelpful, as both parties can normally play that game, not surprisingly as interpretation issues usually arise where the document concerned is not entirely clear. In this case, for example, the Director can say that, if the parties had meant what PBIC contends, they would have limited the use to “storage” rather than to “godown purposes”. Indeed, that is a point which has a little more force given the reference to storage later in clause 3(a). 67. In any event, I consider that the natural meaning of “for … godown purposes” in the Grant is “for the purposes of a godown (or godowns)”. If it needs some sort of justification, the use of the word “purposes” is readily explicable both syntactically and substantively. Syntactically explicable, because of the inclusion of the words “industrial or”. Substantively explicable, because use “for … godown purposes” is potentially wider than use “as a godown or godowns”, as the former expression would clearly include uses which are ancillary to the godown use, whereas the latter might well not do so. 68. It is also said on behalf of PBIC that “godown purposes” more naturally means “purposes (or uses) which would be carried out in a godown”. Even if that is right (and I am unconvinced that it is), it does not seem to me to point to a different conclusion in this case. The purposes (or uses) to which a godown is put is storage of goods (on a temporary basis) in a building. It would normally be surplusage to add “in a building” (as it was for Liu J in Cavendish), but it is appropriate to do so in this case. Analogies can be dangerous, but a user restriction to “house purposes” or “hospital purposes” would, subject to contextual considerations, involve a building: they are not the same as, respectively, “for residential purposes” (which could involve a tent or a caravan) or “for medical purposes” (which could involve an outdoor clinic). 69. I see nothing in the documentary or factual context of the Grant to call this conclusion into question. As already mentioned, the reference to “storage” shortly after the words in issue could be said to support the conclusion on the ground that where the parties mean to refer to storage generally they say so, but that is a very slight point in my view. The reference in clause 3(b) to constructing a warehouse, which it was suggested also supported the conclusion, seems to me to be neutral. 70. As to the surrounding facts, it was suggested by Mr Chang SC for PBIC that the sheer size of the Land called the conclusion into question. I am unimpressed with that point. It ignores the other uses permitted by the Grant, and in any event, there was no limitation on the number or size of godowns which could be erected on the Land, or to the ancillary uses to which neighbouring parts of the Land could be put. 71. Having reached the same conclusion, the Court of Appeal pointed out that there had been no argument or ruling on the issue whether mid-stream storage use might nonetheless have been permitted under the Grant on the ground that it constituted use for “industrial … purposes”. As I understand it, the parties are agreed that the issue of whether the Land can be used for midstream storage use on the ground that it would be “for industrial … purposes” should be remitted to the Lands Tribunal together with certain other issues as a result of the unchallenged decisions of the Court of Appeal. The second issue: the assumption about the CT Scheme in the after valuation The approach of the Lands Tribunal and the Court of Appeal 72. The Lands Tribunal decided that they should carry out the after valuation on the assumption that the market as at 5 May 1995 would assume that the CT Scheme would effectively be certain to proceed. This was inconsistent with their conclusion that, as at that date, the market would, as a matter of fact, have regarded the prospects of the Scheme proceeding as 50-50. 73. The reasoning of the Tribunal is rather exiguous in this connection, but I think that it is tolerably clear from para 464 (where they said that “[w]ith the marine access being extinguished, one would expect that the Container Terminal Scheme would proceed as planned”) to para 477 (where they referred to it being “more certain that the Government has decided to proceed with the Container Terminal Scheme” because “marine access has been extinguished”) coupled with the after valuation itself. The reasoning effectively proceeded along the following lines: (a) For the purpose of the after valuation, it must be assumed that the notional open market sale as at 5 May 1995 was agreed on the basis that it was certain that the Reclamation would proceed, as it was the Reclamation that would deprive the Land of the Marine Rights; (b) If it is to be assumed that the Reclamation is bound to go ahead, then the Tribunal considered that the view in the market would be that the whole CT Scheme would be bound to go ahead; (c) If the market would have assumed that the CT Scheme was bound to go ahead then it would follow that there should be no discount for the uncertainty of being able to use the Land for industrial purposes; (d) There would, however, still have to be a discount for delay, but the Tribunal considered that it should be somewhat less than on the facts assumed for the before valuation, because of the confidence that the CT Scheme would proceed. 74. If step (a) in that line of reasoning is correct, it seems to me to be hard to identify any convincing reason for quarrelling with the other three steps. As to step (b) the market assessment as to the likelihood of the CT Scheme proceeding in particular assumed circumstances, including where it was certain that the Reclamation would proceed, was a matter for the Tribunal. Having said that, it is not hard to understand why they concluded, on this assumption, that the market would have thought it very likely that the CT Scheme would proceed. Reclaiming well over 1,000 hectares of land would be a very expensive operation, and, if one is proceeding on the basis that the Reclamation was bound to happen, it would be unsurprising if people assumed that the subsequent works needed to complete the CT Scheme were therefore bound to happen as well. It is fair to add that the absence of any discount, so that it was assumed to be 100% likely, is rather more surprising. However, it was the Tribunal’s assessment of the market view, and it does not seem to me to be a view which could be characterised as unreasonable. 75. Step (c) really follows as a matter of logic from step (b). And my observations on step (b) apply equally to step (d). 76. It is step (a) in the Lands Tribunal’s reasoning which was successfully challenged by PBIC in the Court of Appeal. In that connection, the Court of Appeal said that the references to “before valuation” and “after valuation” “can be misleading”, because “the only difference which Lord Hoffmann postulated is that one valuation must proceed on the basis that the land has marine rights whilst the other valuation shall proceed on the basis that the land does not have any marine rights”. The Court of Appeal considered that it was illegitimate for the after valuation to proceed on any assumption different from the before valuation save in relation to the subsistence of the Marine Rights. The three possible approaches 77. Assessment of the before value and the after value each involved considering a hypothetical transaction, namely the sale of the Land on the open market as at 5 May 1995; in the case of the before value with the Marine Rights, and in the case of the after value without the Marine Rights. The question to be addressed is: when carrying out the after valuation, what, if any, further assumption is to be made? 78. It seems to me that in the judgment of Lord Hoffmann in the CFA’s 2010 decision, one can find at least one sentence which appears to support each of three different possible (and mutually exclusive) answers to that question, namely: (a) It must be assumed that as at 5 May 1995 the Reclamation has actually been carried out. Support for that approach is to be found in para 42 (quoted in para 30 above) where Lord Hoffmann said that “the Reclamation is treated as having taken place on the date of publication of the Authorisation and the compensation” was to be assessed accordingly. (b) It must be assumed that as at 5 May 1995, the Reclamation has not been carried out, but that it is certain that it would be. Support for that approach is to be found in para 41 (quoted in para 29 above) where Lord Hoffmann said that “for the purposes of assessing the compensation, it must be assumed that on the date of authorisation it was certain that the reclamation would take place”. (c) No artificial assumption should be made as to whether, as at 5 May 1995, the Reclamation has been or will be carried out: one merely assumes that the Marine Rights have been lost. Support for that approach is in para 46 (quoted in para 34 above) where Lord Hoffmann said that the after valuation (and the before valuation) “must take into account all the information which was public knowledge at the time and (apart from the assumptions about marine rights) not be based on any artificial assumptions”. 79. Approach (a) was rejected by the Tribunal and by the Court of Appeal, and both the Court of Appeal and this Court refused the Director permission to appeal on the point. Accordingly, the choice is between approach (b), which was adopted by the Lands Tribunal and is supported by the Director, and approach (c) which was preferred by the Court of Appeal and is supported by PBIC. The case in favour of the Court of Appeal’s approach 80. There are undoubtedly strong arguments in favour of approach (c), the Court of Appeal’s view, as against approach (b), the Lands Tribunal’s view. 81. First, approach (c) involves making no assumption which departs from reality, because it requires one to value on the basis that the Land, in terms of its physical state and its prospects, is as it was on the date of valuation without the Marine Rights - ie taking the actual market assessment (which the Lands Tribunal considered to have been 50-50) of the prospect of the Reclamation and the rest of the CT Scheme proceeding as it was as at May 1995. By contrast, approach (b) involves a departure from reality, in that it requires one to make the artificial assumption that, as at May 1995, the Reclamation will definitely proceed. 82. Where a valuation is made on the basis of a notional sale in the open market then, as Lewison LJ put it in Harbinger Capital Partners v Caldwell (As the Independent Valuer of Northern Rock Plc) [2013] EWCA Civ 492, para 23, the hypothetical transaction “is only a mechanism for enabling one to arrive at a value of particular property for a particular purpose”. He added that “it does not entitle the valuer to depart from the real world further than the hypothesis compels. The various hypotheses must be taken no further than their terms make strictly necessary”. A little later, he added this: “Where the hypothesis inevitably entails a particular consequence, the valuer must take that consequence into account” but “where the alleged consequence is not inevitable, but merely possible (or even probable), then the consequence cannot be assumed to have happened”. 83. It can fairly be said in this case that there is no logical reason why the assumption that the Marine Rights have been lost should require a person valuing on that assumption to search for or identify a reason why they have been lost, namely the Reclamation. Further, there is no practical reason requiring such a valuer to do so. Thus, it has not been suggested that it is impossible, or even more difficult, to carry out the after valuation without an explanation as to how or why the Marine Rights were lost; one simply values on the basis that they have been lost. Indeed, it is easier to value on that basis, as it involves making the assumptions as to delay and likelihood which had already been assessed and made in relation to the before value. 84. Secondly, approach (b) involves effectively crediting the Government with the increase in value which the CT Scheme would confer on the Land through the provision of road access to and from the public highway. Yet, at least in England, the law has fairly authoritatively been stated to be that “[i]n the absence of any special provisions it appears that betterment arising from exercise of statutory powers cannot be set off against compensation for injurious affection” to quote from the current Encyclopedia on Compulsory Purchase, paras B-0061 and B-0482, citing Senior v The Metropolitan Railway Co (1863) 2 H&C 258 and Eagle v The Charing Cross Railway Company [1867] LR 2 CP 638. 85. Thirdly, there is obvious force in the point that it could be unfair in practice on PBIC if its compensation for the loss of the Marine Rights enjoyed by the Land is reduced (or even extinguished) because of a potential improvement in the value of the Land attributable to a development which may not happen, particularly as it is largely up to the Government whether the development proceeds, and PBIC has no control and little, if any, influence over that decision. That point can be said to have particular force in this case, given that the development, the CT Scheme, did not in fact proceed. The case in favour of the Lands Tribunal’s approach 86. The presumption of reality, discussed in paras 81-83 above, undoubtedly should be borne strongly in mind by anyone undertaking a market valuation exercise - whatever its purpose, as Lewison LJ said in Harbinger at para 22. However, the ultimate question is what assumptions are required by the particular ordinance, contract or other document pursuant to which the valuation is being carried out, as Mummery LJ (with whom Beatson LJ agreed) effectively said in Harbinger at para 122. Indeed, that point is well illustrated by the fact that the majority of the Court of Appeal, differing from Lewison LJ, considered that the presumption did not apply in that very case. 87. Turning to the present case, it seems to me that there is obvious force in the argument that, all other things being equal, if a development scheme on neighbouring property has both beneficial and detrimental effects on a person’s land, it would be wrong for that person to be able to claim compensation for the diminution in value attributable to the detrimental effect without having to take into account the increase in value attributable to the beneficial effect. It is worth bearing in mind in this context that as Lord Nicholls of Birkenhead said in Waters v Welsh Development Agency [2004] 1 WLR 1304, para 63, in relation to the application of the Pointe Gourde principle (namely that “compensation for compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying that acquisition” – per Lord McDermott in Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands (Trinidad) [1947] AC 565, 572) when assessing compensation for compulsory purchase, one should aim to “achieve … a fair and reasonable result”, and that plainly applies equally when assessing compensation for injurious affection. 88. If one is carrying out a valuation assuming (as one must in the present case for the purposes of the after valuation) that any marine rights have been lost, it is, at the very least, not unreasonable, to consider why they have been lost, and then to take into account any valuation implications which naturally flow from that reason. It is true that in many valuations where one has to make an assumption that a right exists or does not exist, it would be illegitimate for the valuer to inquire why the right does or does not exist. However, while rules such as the presumption of reality have an important part to play, it seems to me that the courts have to do their best to find a valuation hypothesis which is consistent with the wording and aim of the legislation, is workable in practice, and which produces a fair and reasonable result. 89. Given the paucity of statutory guidance, that is not an easy task in this case, as a reading of Lord Hoffmann’s judgment demonstrates. However, given that relevant marine rights are to be treated as irretrievably lost, de facto as well as de jure, on publication of the authorisation, it can be said to be logically consistent to make the assumption that the cause of the loss, namely the reclamation, will undoubtedly proceed. Further, the assumption is a relatively mild departure from reality - especially compared with that involved in approach (a), namely that the Reclamation has actually been completed as at May 1995 which does seem to me to be too extreme a departure from reality to be acceptable. A variant of the reality principle which seems to me to be applicable is that, if there is a departure from reality, it should be kept to a reasonable minimum. In this case, if a departure is appropriate, it is unnecessary to go further than assuming that the Reclamation will occur: it is unnecessary to go further and assume either that the Reclamation has occurred or that the remainder of the CT Scheme will occur (although that would not prevent the Lands Tribunal concluding as a matter of judgment that the market view would be that the remainder of the CT Scheme was bound to go ahead). 90. As to the second point, which is discussed in para 84 above, assuming that it is indeed the law of England that a claim for injurious affection cannot be subjected to a set-off attributable to betterment, there is in my view no reason to apply that principle to a claim for compensation under section 12. As Lord Hoffmann said in para 36 of the CFA’s 2010 decision, the fact that the section refers to the English law concept of injurious affection “does not mandate the same method of assessing the compensation” as in English law. The very fact that section 12 provides that the loss is suffered and the compensation is assessed as soon as the reclamation is authorised suggests that a different approach to compensation may very well be required. 91. In any event, I am unconvinced that the view expressed in the Encyclopedia is reliable: the two cases it cites do not, in my view, provide much if any real support for the general proposition it expresses. Of the four Judges who decided Senior, Pollock CB and Channell B expressed no view on the point (if anything they seem to have assumed that such a set-off might have been permitted), Bramwell B thought a set-off of the sort claimed in that case could not be claimed but made it clear that it was an obiter view, and Wilde J “doubt[ed] whether, in a case of compensation for injury to land, a Company can claim a set-off by reason of the land being subsequently benefited”. As for Eagle, I can find nothing in the judgments of Bovill CJ, Keating J or Montague Smith J which really touches on the point of set-off. The Court in that case upheld an umpire’s award of £656 for loss of light which rendered “the plaintiff’s premises less convenient and suitable for the requirements of his trade to the extent of £656” (per Keating J), despite the Umpire “having inserted an impertinent averment in his award” (per Montague Smith J). The issue in the case ultimately concerned the interpretation of a confused award. 92. I turn to the third argument, which is discussed in para 85 above, namely that approach (b) would operate unfairly on a landowner in a case where the reclamation concerned never eventuates. It is equally true that approach (c) would operate unfairly on the Government in a case where the reclamation concerned does eventuate. At first sight, one might think that, as it is the Government which decides whether to publish a formal authorisation and it is the Government which normally decides whether the reclamation proceeds, the injustice involved in approach (c) is significantly less than that involved in approach (b). 93. Closer consideration, however, seems to me point the other way. It appears unlikely that the Government would publish a formal authorisation for a particular reclamation if it did not intend pretty confidently to proceed with it. In the first place, it would mean that all the effort in getting to the point of publishing an authorization of a scheme would be wasted. Further, it appears to me that would be commercially disruptive, and administratively misleading to publish such an authorisation in the absence of a firm intention to proceed with the development so authorised, and therefore it is unlikely to happen. Also, the very fact that the issue of an authorisation triggers a liability to pay compensation under section 12 is a strong disincentive to the Government not to publish an authorisation for reclamation with which it does not firmly intend to proceed. It is true that the facts of this case can be said to belie these points, but the circumstances in Hong Kong at the time of the 1995 Authorisation, which was during the period leading up to the hand-over in 1997, were exceptional. 94. Quite apart from these considerations, the fact is that, so long as the reclamation does not go ahead, the landowner continues in practice to enjoy the marine rights; that is indeed what happened in this case (see para 14 above). Accordingly, so long as an authorised reclamation does not go ahead, a landowner will, it appears, continue to enjoy any marine rights as a matter of fact even though he may have been deprived of them as a matter of law. That is a practical pointer, in my view, in favour of approach (b) over approach (c). 95. It also appears to me that the Lands Tribunal’s approach is more consistent with the guidance given in the CFA’s 2010 decision. It is fair to say that, as I have explained, different sentences in Lord Hoffmann’s judgment can be said to support different conclusions. However, Lord Hoffmann ended his judgment by saying that the compensation payable to PBIC should be “the difference between (a) the price which [the Land] would have fetched … on 5 May 1995 on the assumption that it enjoyed access to the sea as it had done up to that date and (b) the price which it would have fetched … on the assumption that access to the sea had been lawfully interrupted by the completion of the proposed reclamation” (emphasis supplied). This direction, like the statements in para 41 of Lord Hoffmann’s judgment, and (once one rejects approach (a) as one must) para 42, all support approach (b). While what Lord Hoffmann said in para 46 can be said to support approach (c), it is fair to say that it is not inconsistent with approach (b): it depends what is meant by “assumptions about marine rights”. 96. It would be wrong to make too much of the 2010 judgment of this Court in the present context, because the point currently in issue was not before the Court. The two relevant points were simply those described in paras 28 and 32 above. The passages cited in paras 78(a) and (b) above are to be found in passages dealing not with a different valuation assumption from that currently in issue, namely what assumption is to be made as to the existence of the Marine Rights as at the valuation date, or, to be more precise, whether events after May 1995 are relevant to the valuation exercise. Further, because the judgment concerned preliminary issues, it could be dangerous to ascribe to statements in it wider implications than they were intended to have at the time. Lord Hoffmann himself presciently made that point at paras 9-13 and 30 of his judgment, which include a reference to “the danger inherent in the trial of preliminary issues”, the statement that it is “seldom if ever helpful to approach issues of law as an academic exercise”, and the warning that “an understanding of the practical consequences of applying a principle can sometimes demonstrate that it cannot possibly be right”. 97. Nonetheless, in my view, it is relevant when deciding which of the various approaches to valuation to adopt that it would be inconsistent with the general thrust of a reasoned decision of this Court in a case between the same parties and relating to the same general issue, if we were to favour approach (c) over approach (b). Conclusion on the second issue 98. In these circumstances, while I cannot pretend to have found the point at all easy, I am of the view that the approach adopted by the Lands Tribunal to the after valuation, ie what I have called approach (b) as explained in para 78 above, was correct. Disposition 99. For the above reasons, I am of the view that PBIC’s appeal on the first issue, relating to the proper interpretation of the user covenant, should be dismissed, and that the Director’s appeal on the second issue, relating to the assumption to be made in the after valuation, should be allowed. 100. I would also direct by way of order nisi that PBIC pay to the Director the costs of both appeals with liberty to the parties, if so advised, to lodge written submissions as to costs within 14 days of the date when this judgment is handed down, and in the absence of such submissions, that the order nisi stand as an order absolute without further direction. 101. We were told that the parties have already agreed that the case should in any event be remitted to the Lands Tribunal as a result of the decision of the Court of Appeal. Accordingly, it would be inappropriate for me to say any more about the future conduct of these proceedings. However, the proceedings have been going on for an unconscionable period and have already taken up a substantial amount of court time. The parties and their legal advisers should do their best to achieve a final outcome as quickly and cheaply as is consistent with justice. Mr Justice Ribeiro PJ: 102. The Court unanimously dismisses PBIC’s appeal, allows the Director’s appeal and makes the orders as to costs set out in paragraph 100 of the judgment of Lord Neuberger of Abbotsbury NPJ. Mr Denis Chang SC, Mr Johnny K.C. Ma and Mr Jeremy S.K. Chan, instructed by Wilkinson & Grist, for the Applicant (Appellant in FACV 1/2017 and Respondent in FACV 2-9/2017) Mr Michael Barnes QC and Mr Valentine Yim, instructed by the Department of Justice, for the Respondent (Appellant in FACV 2-9/2017 and Respondent in FACV 1/2017)
Chief Justice Cheung: 1. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Fok PJ: A. Introduction 2. This is an appeal against a decision by Campbell-Moffat J to grant a permanent stay of criminal proceedings. The prosecution related to a charge of trafficking in a dangerous drug arising out of the facts outlined below in Section B of this judgment. Consequent upon the decision to grant a stay of proceedings, and notwithstanding the prosecution’s indication of an intention to apply for leave to appeal to this Court against the stay, the judge granted bail to the respondent on conditions that permitted him to leave Hong Kong. The respondent then left the jurisdiction. Thereafter, leave to appeal was granted by the Appeal Committee for this appeal on the terms more fully described in Section C.4 below. 3. This appeal is primarily against the judge’s decision to grant a permanent stay of proceedings. As will be seen, however, it also raises questions as to the correctness of a prior decision of the judge relating to the admissibility of the contents of the respondent’s mobile phone, identified as exhibit P60. From that “iPhone” mobile phone, photographs of certain WhatsApp messages had been taken by officers of the Customs and Excise Department. Finally, this judgment also addresses the correct approach that should be taken in relation to the grant of bail when a stay of criminal proceedings has been ordered but the prosecutor seeks to appeal against that stay and to proceed with the prosecution. B. The facts relating to the trafficking charge 4. The respondent (defendant below) was indicted on one count of trafficking in a dangerous drug contrary to s.4(1)(a) and (3) of the Dangerous Drugs Ordinance (Cap.134). He had arrived at the Hong Kong International Airport on 10 September 2019 on a flight from São Paulo, Brazil via Zurich, Switzerland. He was intercepted by Customs officers on arrival. His two suitcases, when searched, were found to contain false compartments in which 3,941 grammes of a solid containing 3,312 grammes of cocaine were found. The estimated market value of the drugs was HK$4.97 million. 5. The respondent was arrested. Under caution, he said he had come from Europe to Hong Kong for real estate business. He said he was asked by someone called Jimmy to go to Brazil to bring the suitcases to Zurich and then to Hong Kong where someone would contact him at the Mira Hotel to collect them. A controlled delivery was attempted in order to apprehend the intended recipient of the drugs but was unsuccessful. 6. The respondent was later interviewed on video under caution. In the course of the video-recorded interview (“VRI”), he stated that he had become acquainted, through the Internet, with a woman called Yolanda, with whom he had a developing romantic relationship, who asked him to collect some confidential documents from Brazil so that she could claim an inheritance of US$10 million from her great-grandfather. The respondent said he had undertaken one journey from Brazil to London previously and his trip from Brazil to Hong Kong was the second such journey. Both trips were organised by two individuals, Jimmy Roland and Anthony Campbell, said to be working for the “United Nations Association” and responsible for handling Yolanda’s inheritance claim. The two suitcases the respondent was travelling with to Hong Kong, into which he packed his own belongings, had been provided by Jimmy and Anthony. He understood he was collecting confidential documents in the nature of bearer bonds for Yolanda, which could be used to obtain funds. He thought they had been hidden in the suitcases because they were not approved by the Brazilian authorities to be taken out of the country. He denied knowledge of the drugs in the suitcases and said that he did not think the suitcases contained drugs because he did not believe someone could take drugs through customs nowadays. He had received US$900 and €200 from Jimmy and Anthony as reimbursement of his costs in Brazil. He was not going to be paid for carrying the documents, which he did as a favour for Yolanda. But he was to be paid US$2,500 once he delivered the documents to pay for his hotel and return journey to the airport and for meals. He never met Yolanda, Jimmy or Anthony in person and only communicated with Yolanda and Jimmy by WhatsApp messages and with Anthony by email. 7. The above is a brief summary of the circumstances of the respondent’s arrest and his explanation for how he came to be in possession of the drugs in the two suitcases. It is clear that, in relation to the charge of trafficking in a dangerous drug, the critical issue is one of the respondent’s knowledge. Did he know he was transporting dangerous drugs or might he have believed he was not carrying drugs with him but, instead, confidential documents? The issue of knowledge is a commonly encountered issue in a prosecution for drug trafficking and, in a trial on indictment, an issue determined by a jury upon a consideration of the evidence. C. The procedural history C.1 The voire dire ruling 8. After he was charged with the offence of trafficking in a dangerous drug, the respondent was remanded in custody pending trial. Case management hearings were held before the judge on 15 October 2021 and 2 November 2021 respectively. The parties had prepared and submitted draft admitted facts for the judge’s consideration at those hearings. Those admitted facts recorded, amongst other matters, that: (1) the respondent’s mobile phone was seized from him by Customs Officer Cheung Sin-ying on 11 September 2019 as exhibit P60; (2) a search warrant in respect of the phone was obtained on 11 September 2019 to inspect its contents; (3) on 11 September 2019, between 1757 hours and 2040 hours, Customs Inspector Chau Kin-lung, Customs Inspector Leung Hok-pan and Customs Officer Kwok Sze-lok carried out a video recorded interview with the respondent in English, the transcript of which was exhibit 78A and the video of which was exhibit 78B; (4) on 15 and 17 September 2019, Customs Officer Cheung took photographs of the WhatsApp messages in the phone, some of which were produced as exhibits P80, P81 and P82, being exchanges between the respondent, on the one hand, and Yolanda and Jimmy, on the other, on various dates; and (5) on 2 November 2019, Acting Chief Customs Officer Chan Tsz-lai examined the phone, during which process the contents of the phone had not been interfered with or tampered with, and confirmed that it contained the messages in exhibits P80, P81 and P82. 9. The judge, of her own motion, raised a question as to the admissibility of the photographs of the WhatsApp messages found on the phone. She directed that a voire dire hearing be conducted in respect of the photographs of those WhatsApp messages and the digital evidence recovered from the phone by Acting Chief Customs Officer Chan. 10. The respondent was then arraigned on 16 December 2021 and a voire dire conducted before the judge on 16 and 17 December 2021 at which Acting Chief Customs Officer Chan was the only witness. On 17 December 2021, the judge gave a ruling on the voire dire.[1] She was critical of what she considered to be the mishandling of the mobile phone by Customs and Excise and concluded, for reasons that will be examined further below, that: “None of the data recovered from the mobile phone P60 may be adduced. It follows that the prosecution must now liaise with the defence to consider the effect of this ruling upon the content of the video recorded interview where photoshots and the contents of the phone have been put to the defendant without any proper record being made and after insecure access to the phone prior to interview.”[2] C.2 The grant of a permanent stay 11. Following the voire dire ruling, the parties prepared a revised draft of the admitted facts, deleting references to the WhatsApp evidence. The transcript of the VRI was also redacted to remove references to the content of the WhatsApp messages. 12. The respondent then applied to permanently stay the proceedings on the basis that he could not receive a fair trial as he was unable to adduce the WhatsApp evidence consequent upon the voire dire ruling. The judge heard the stay application on 14 March 2022 and acceded to the respondent’s application on that date, indicating that she intended to order the release of the respondent who had hitherto been remanded in custody. 13. The written reasons for the judge’s decision to stay the proceedings were then handed down on 18 March 2022.[3] The judge concluded that, as a result of her voire dire ruling, the respondent was deprived of the ability to adduce in evidence the WhatsApp messages on his mobile phone in support of his defence as to knowledge. She cited the principles in HKSAR v Lee Ming Tee & Another[4] and concluded that the respondent had discharged his burden of showing a fair trial was not possible in the light of her ruling.[5] She rejected the suggestion that the respondent could refer to the documents when giving evidence, and therefore concluded there was no way to mitigate what she considered to be the mishandling of the mobile phone. For these reasons, the judge ordered a permanent stay of proceedings against him. C.3 The prosecution’s intention to appeal and the judge’s grant of bail 14. On 15 March 2022, the prosecution served a notice of intended application for leave to appeal to the Court of Final Appeal against the judge’s decision to stay proceedings and sought the continued remand of the respondent in custody. At a hearing on 15 March 2022, without objection from the prosecution and as foreshadowed the previous day, the judge ordered the release of the respondent on bail subject to conditions, including a prohibition on his leaving Hong Kong pending the handing down of her written reasons for her decision to stay proceedings. 15. Thereafter, at an adjourned hearing on 18 March 2022 following the handing down of those reasons, the prosecution confirmed that it wished to appeal her stay decision and asked that the respondent’s existing bail conditions be extended, upon its undertaking to apply to the Court of Final Appeal for an expedited hearing in light of the respondent’s status as a foreign defendant. The judge declined to do so and made an order varying the respondent’s bail terms so that he was permitted to leave the jurisdiction of Hong Kong but that he should reside at a specified address in Aberdeenshire, Scotland, and remain in contact with his instructing solicitors. 16. Following the judge’s variation of his bail conditions, the respondent left Hong Kong on 20 March 2022. As at the date of this appeal, he remains outside the jurisdiction. C.4 The grant of leave to appeal to this Court 17. On 31 May 2022, the Appeal Committee granted the prosecution leave to appeal against the judge’s decision to grant a permanent stay of the proceedings against the respondent on the substantial and grave injustice ground. 18. In addition, the Appeal Committee granted leave to appeal on the following question of law, namely: “When a judge of the Court of First Instance grants a final stay of criminal proceedings against a foreign defendant with little connection to Hong Kong but the prosecution wishes to appeal against that stay to the Court of Final Appeal, when considering the question of bail terms, should the judge ever impose or vary bail conditions in such a way that might render the intended appeal nugatory, in the sense that, if the stay were set aside, the prosecution could not proceed due to the absence of the defendant from the jurisdiction?” C.5 The issues arising on this appeal 19. The issues arising on this appeal are: first, as a preliminary matter, whether it is open to the prosecution to challenge the correctness of the voire dire ruling (Section D); secondly, whether, if the prosecution can challenge that ruling, it was flawed (Section E); thirdly, whether, if the voire dire ruling was flawed, the judge’s exercise of discretion to grant the stay of proceedings miscarried or was wrong in any event (Section F); fourthly, how the judge should have approached the question of bail and whether she erred in her approach to bail (Section G). D. Is it open to the prosecution to challenge the judge’s ruling on admissibility? 20. In appealing against the judge’s grant of a permanent stay of proceedings, the prosecution seeks to challenge the correctness of the judge’s underlying ruling on the voire dire.[6] The respondent contends, however, that it is not open to the prosecution to challenge the ruling on the voire dire and that the correctness of the stay decision has to be determined on the basis of the judge’s ruling that the WhatsApp messages are inadmissible.[7] The respondent’s contention is based on the premise that the judge’s ruling on the voire dire in the present case, being interlocutory, is not a final decision and so not appealable to the Court of Final Appeal. 21. For the following reasons, the respondent’s contention cannot be accepted. 22. It is correct that the Court of Final Appeal’s jurisdiction in a criminal cause or matter is circumscribed by s.31 of the Hong Kong Court of Final Appeal Ordinance (Cap.484) (“HKCFAO”)[8] such that appeals only lie against final decisions. It is also correct that rulings in the course of a trial on the admissibility of evidence are almost invariably interlocutory rather than final. The limitation on interlocutory appeals to the Court of Final Appeal in s.31 of the HKCFAO is a reflection of the policy against the fragmentation of the criminal appellate process, a matter to which Lam PJ recently referred in HKSAR v Chen Keen (No 2).[9] The policy aims to avoid the disruption and delay that would inevitably follow if interlocutory decisions could be appealed to a higher court, whether the Court of Appeal or this Court, in the course of a criminal trial. Instead, erroneous judicial decisions made in the course of a trial should normally be corrected, if necessary, by way of an appeal against conviction. 23. It follows that, in a criminal trial resulting in the defendant’s conviction, a judge’s interlocutory ruling on the admissibility of certain evidence will not be appealable until after the trial when the conviction is appealed as a final decision. At that point, on the appeal against conviction, it is open to the defendant to challenge the correctness of the interlocutory ruling on the admissibility of the evidence in question. The Respondent’s Case acknowledges and accepts this.[10] 24. But appeals in a criminal cause or matter are not limited to appeals by a convicted defendant. The prosecution, being “a party to the proceedings”, has standing under s.31 to apply for leave to appeal against a final decision,[11] including a decision to grant a permanent stay of proceedings.[12] Where it does so, an interlocutory decision which is the basis of the final decision appealed against will be open to challenge, since the correctness of the final decision will depend in turn on the correctness of the preceding interlocutory decision.[13] This is the case in respect of an appeal against conviction where the ground of appeal is that an interlocutory ruling admitting certain evidence was wrong. On the appeal, it will be open to the convicted appellant to challenge that interlocutory evidentiary ruling. The position is no different in the present case, albeit that it is the prosecution which seeks to challenge the correctness of the judge’s ruling on the voire dire, which in turn was the basis of her decision to grant a permanent stay of proceedings. 25. It follows that, since the prosecution’s appeal against the grant of the permanent stay of proceedings is an appeal against a final decision and that appeal takes issue squarely with the judge’s ruling on the voire dire, on which that final decision was in substance based, it is open to the prosecution to challenge the correctness of that earlier evidentiary ruling as part of this appeal. E. The judge’s voire dire ruling 26. The judge identified the relevant evidence to which the voire dire ruling related as being: (i) “photoshots” (i.e. photographs) of WhatsApp messages[14] found within the memory of the respondent’s iPhone X (exhibit P60) and taken on 15 and 17 September 2019; and (ii) digital evidence recovered from exhibit P60 by Acting Chief Customs Officer Chan at the Customs and Excise Computer Forensics Laboratory.[15] In addition, the judge also analysed the evidence under “two separate methods of investigation and two separate periods of time”: first, the seizure and handling of exhibit P60 from the respondent’s arrest to when the phone was handed over for forensic examination; and secondly, when it was held by the laboratory and thereafter forensically examined.[16] 27. At the outset of the voire dire ruling, the judge expressed her concern as to the practice of prosecuting authorities relying upon “short cuts”, as she put it, to digital evidence and seeking to agree evidence which is or might be, in her view, inadmissible and the use of such shorts cuts in relation to criminal prosecutions, especially the omission in witness statements of “large gaps in the handling of exhibits”.[17] In the course of her ruling, the judge focused on the integrity of the phone as an exhibit and the manner in which the Customs and Excise had accessed and stored it. In particular, she noted that the “hash value”[18] of the phone would be altered whenever the phone was accessed but that the respondent’s phone was accessed on multiple occasions without a record of when and in what manner it had been accessed being kept and made available to the defence.[19] She also noted, in particular, that the phone had a storage capacity of 64GB (gigabytes) of which approximately 40GB had been used but of which only 19.7GB of data was able to be extracted when examined forensically by Customs and Excise.[20] 28. The judge’s concerns led to the following material conclusions in the voire dire ruling: “The provenance of the physical iPhone P60 is questionable. There is no proper record of when a sealed exhibit is retrieved and unsealed and what occurs to it over several days when that has occurred. … The taking of photoshots from the phone at this stage has not been properly documented nor exhibited and they may not be adduced in trial. The prosecution has been given fair warning that there was a problem and it is now too late to correct what has been a poor supervision of evidence. In any event, the reality is that the prosecution seeks to rely upon the content of such shots as evidence of the truth of their contents and the prosecution has provided no admissible route to place these before the Court given that the information relied upon is derived from a computer. … My findings in that respect are in any event overtaken by the subsequent handling of the phone and its contents. There is no system in place to secure the data on a mobile phone which preserves the integrity of the data within. No secure and unassailable copy is made of the data retrieved and, in any event, a significant amount of data is not and cannot be retrieved. This results in a substantial prejudice to the defence who have little idea of these shortcomings until a long way into the investigation by which time the harm has been done and the costs of seeking to unravel that harm would be significant. …”[21] 29. There are, with respect, a number of fundamental flaws in the judge’s approach and her analysis of the admissibility of the relevant evidence. 30. The starting point for a correct analysis is to examine the nature and purpose of the evidence forming the subject matter of the judge’s voire dire inquiry. As already indicated, the evidence consisted of photographs of WhatsApp messages recorded on the respondent’s mobile phone. Some of those messages had also been referred to and read into the VRI and so, being part of the transcript of that interview, existed in the form of a written record of those messages. Whilst it is not clear to what extent the prosecution would need to rely on the WhatsApp messages, it is clear that the defence case would rely heavily on them to support the respondent’s defence “that he was groomed online, and was tricked into bringing the drugs into Hong Kong”.[22] Clearly, the WhatsApp messages in question would, if believed, be relevant to the respondent’s state of mind, in particular his state of knowledge of the contents of the suitcases he was carrying: did he know they were drugs (the prosecution case) or might he have believed they were just confidential documents (the defence case)? 31. The judge appears to have misapplied two separate principles of the law of evidence in her voire dire ruling: first, she misapplied the hearsay rule as regards the WhatsApp messages; and secondly, she confused the issue of their admissibility with that of their weight and reliability. E.1 The hearsay rule was inapplicable 32. A clear formulation of the hearsay rule which this Court has previously adopted as a workable definition is that “an oral or written assertion, express or implied, other than one made by a person in giving oral evidence in court proceedings is inadmissible as evidence of any fact or opinion so asserted”: Oei Hengky Wiryo v HKSAR (No 2).[23] 33. But this does not mean that the rule always forbids evidence of what somebody has declared, orally or in writing, out of court. As Stock NPJ, writing for the Court in HKSAR v Lau Shing Chung Simon, stated, that is not the rule.[24] As his Lordship there elaborated, the rationale of the rule is a concern for the probative value of out-of-court statements: “Sometimes the circumstances in which an out-of-court declaration is made are deemed to confer sufficient inherent reliability as to render the declaration admissible to prove the truth of what is declared and it is upon that reasoning that the common law and statutory exceptions are based. In other circumstances, however, the probative value of evidence of a fact in issue is said to be materially undermined where it cannot be tested by cross-examination and it is the inability to cross-examine the declarant to test the accuracy of his out-of-court statement that lies at the heart of the general rule.”[25] 34. It is necessary, however, to contrast statements tendered solely to show the fact that they were made by another person. That is not evidence which is rendered inadmissible by the hearsay rule. On the contrary, the witness tendering the statement is giving direct evidence of a fact to which he can speak directly and which can be tested in cross-examination. This demonstrates the importance of ascertaining the purpose to which an out-of-court statement is tendered, a factor which was emphasised by McHugh NPJ in Oei Hengky Wiryo v HKSAR (No 2), since: “[a]s long as its contents are not relied on to prove a fact recited or asserted, it will be admissible if it tends to prove a fact in issue or a fact relevant to a fact in issue.”[26] 35. Similarly, in the case of the production of a document which expressly or impliedly contains a statement, Lord Hoffmann NPJ in Secretary for Justice v Lui Kin Hong noted: “The hearsay rule never makes a document as such inadmissible. It is only inadmissible for a particular purpose, namely, as evidence that a statement which [it] contains is true. If it is relevant to an issue in some other way, it is admissible for that purpose.”[27] 36. The above passages from both Oei Hengky Wiryo v HKSAR (No 2) and Secretary for Justice v Lui Kin Hong were cited by Stock NPJ in the Court’s judgment in HKSAR v Lau Shing Chung Simon.[28] 37. In the voire dire ruling at [17], quoted above, the judge clearly misconceived, with respect, the purpose for which either party was wishing to rely upon the content of the photographs of the WhatsApp messages on the respondent’s phone. Neither the prosecution nor the defence case was relying on those messages for a testimonial purpose, that is to say, to prove the truth of the underlying facts conveyed in the messages. It was certainly no part of the prosecution case that the messages emanating from Yolanda or Jimmy or referring to Anthony were true in the sense that they showed the reason for the respondent’s journey from Brazil to Hong Kong. Nor was it part of the defence case that those messages were necessarily true. Rather, the respondent was relying on those messages as real evidence showing the content of communications received by him at material times to support his case as to his state of mind that, having received them, he was or might have been misled as to the contents of the suitcases he was carrying. 38. A further indication that the judge misapprehended the purpose of the WhatsApp evidence is her reference to s.22A of the Evidence Ordinance (Cap.8). That section provides a specific statutory exception to the common law rule against hearsay in respect of a statement contained in a document produced by a computer in these terms: “(1) Subject to this section and section 22B, a statement contained in a document produced by a computer shall be admitted in any criminal proceedings as prima facie evidence of any fact stated therein if – (a) direct oral evidence of that fact would be admissible in those proceedings; and (b) it is shown that the conditions in subsection (2) are satisfied in relation to the statement and computer in question.” Sub-s.(2) stipulates the conditions which have to be satisfied. The judge noted in the voire dire ruling that the respondent’s mobile phone was “a computer for the purposes of s22A of the Evidence Ordinance”.[29] This reference was later picked up in her conclusion in the voire dire ruling, quoted above, where she stated that “the prosecution has provided no admissible route to place these before the Court given that the information relied upon is derived from a computer.”[30] Subsequently, in the stay decision, the judge again referred to s.22A when she concluded: “There is no proper digital copy of what was on the phone at the material time for the purpose of a s22A certificate by an independent expert. That error cannot be remedied. S22A(3) precludes the defendant from adducing it himself.”[31] 39. Since, in this case, it was not intended to adduce the WhatsApp messages as prima facie evidence of any fact stated in them, s.22A did not apply. This misapprehension on the part of the judge in respect of s.22A of the Evidence Ordinance reflects a similar misapprehension sometimes manifested in other cases. In HKSAR v Lau Shing Chung Simon, the magistrate made the same error in thinking that s.22A was engaged when, in fact, the WhatsApp evidence in that case was not being relied upon for the purpose of proving the content of the messages but instead merely to show that the statement in the messages had been made and that the defendant had believed them and acted as he did in the light of that belief. Stock NPJ illustrated the point neatly when he said: “If we take as an example the message which read: ‘When you push her, pay attention to me’, the appellant wished to adduce that in evidence to show that the statement had been made by Ms Yau and that, in reliance upon it and other matters, he, rightly or wrongly, but nonetheless honestly, believed that he had Ms Yau’s consent to use limited violence upon her whenever she appeared to him to be ‘possessed’. On his view of it, the statement amounted to a request as to the future and there was no assertion of fact in it upon the truth of which he sought to rely.”[32] 40. Similarly, in the recent Court of Appeal decision in HKSAR v Fung Hoi Yeung,[33] a photograph taken from a mobile phone was sought to be used to challenge the evidence of the complainant that she had only seen a pair of boxer shorts in a laundry basket but had not handled or moved them. The Court of Appeal cited paragraphs [23] to [33] of this Court’s judgment in HKSAR v Lau Shing Chung Simon in support of the true scope and purpose of s.22A of the Evidence Ordinance and observed: “… if we ask for what purpose, or to prove what fact, was [the photograph of the boxer shorts] tendered, the answer would surely be in order to ask Ms X whether she had a photograph on her telephone of some red-chequered boxer shorts lying on a computer keyboard, why it was there, why she should have sent that photograph to another person, and when she did so; given her evidence that she had never touched the applicant’s red-chequered boxer shorts in the linen basket. We do not see how s.22A, assuming it was even applicable, was conceivably engaged by this line of enquiry.”[34] 41. In the same way the rule against hearsay was not engaged in relation to the WhatsApp messages in HKSAR v Lau Shing Chung Simon or the photograph in HKSAR v Fung Hoi Yeung, neither was it engaged in relation to the WhatsApp messages extracted from exhibit P60 in the present case. Their admissibility did not depend on compliance with the conditions stipulated by s.22A of the Evidence Ordinance and reference to that statutory exception to the hearsay rule was simply irrelevant. E.2 The admissibility of exhibit P60 was not affected by questions as to its weight or reliability 42. At the stage of the case management hearings, the judge was made aware of the parties’ intention to adduce the WhatsApp messages by way of admitted facts. The purpose of their doing so has been addressed above. Leaving aside the possibility of excluding any evidence on a discretionary basis on the ground that its prejudicial effect outweighed its probative value (which was not suggested to be the case here), at that stage of the proceedings, the only issues as regards admissibility were relevance and, because they were in a recorded form, authenticity. 43. As to relevance, it is clear that the WhatsApp messages in the present case are relevant to a fact in issue in the proceedings, namely the true state of mind of the respondent as regards the contents of the suitcases he was carrying and whether he knew they contained dangerous drugs or might have believed that they were just confidential documents. 44. In Hong Kong, the proper legal standard to which any issue of authenticity is to be determined in the context of admissibility is the “prima facie evidence” standard. If the evidence satisfies the judge to that standard, it justifies the issue going forward to the jury for determination of the general issue of guilt. The Appeal Committee of this Court so held in refusing leave to appeal in HKSAR v Chan Siu Tan,[35] concerning convictions for assault based on disputed video footage. 45. In so holding, the Appeal Committee cited[36] with approval the distinction between the voire dire stage and the determination of the general issue of guilt drawn by Shaw J in R v Robson, namely: “... in a recent criminal trial, Reg. v Stevenson [1971] 1 WLR 1, ... it was contended that the standard of proof of originality was that which applied to any issue which had to be resolved by the jury in such a trial, namely, proof beyond reasonable doubt. This is, of course, right if and when the issue does come before the jury as a matter they have to decide as going to weight and cogency. In the first stage, when the question is solely that of admissibility — ie whether the evidence is competent to be considered by the jury at all — the judge, it seems to me, would be usurping their function if he purported to deal with not merely the primary issue of admissibility but what is the ultimate issue of cogency. My own view is that in considering that limited question the judge is required to do no more than to satisfy himself that a prima facie case of originality has been made out by evidence which defines and describes the provenance and history of the recordings up to the moment of production in court. If that evidence appears to remain intact after cross-examination it is not incumbent on him to hear and weigh other evidence which might controvert the prima facie case. To embark on such an inquiry seems to me to trespass on the ultimate function of the jury.”[37] 46. That statement of principle has been endorsed by the Northern Irish Court of Appeal in R v Murphy[38] and by the English Court of Appeal in R v Gibbins (Martin).[39] Similarly, the Court of Appeal in this jurisdiction has endorsed Shaw J’s “prima facie authentic” test in HKSAR v Lee Chi Fai.[40] 47. In the present case, neither party had raised any question as to the authenticity of the WhatsApp messages or the contents of exhibit P60. It was the judge, it will be remembered, who raised the issue of admissibility of the evidence of her own motion. 48. Furthermore, this was not a case in which the respondent has ever suggested, even at the stage of the hearing of this appeal, either (i) that the WhatsApp messages which he was shown during the VRI were not genuine in that their content had been altered from their original form, or (ii) that the WhatsApp messages were incomplete and that there were other messages conveying certain information on which he wished to rely that were no longer accessible on the mobile phone due to any alleged mishandling. Indeed, the parties had informed the judge that they proposed formally to agree that the contents of the mobile phone were authentic (see paragraph [8(5)] above). 49. Finally, the only technical evidence before the judge, from Acting Chief Customs Officer Chan, was that although each time the phone was accessed the data on it would be altered in some way, he believed that it would not affect the WhatsApp messages to be relied upon. The judge noted this evidence,[41] but despite the absence of any contrary evidence, concluded that the contents of exhibit P60 as a whole, including the WhatsApp messages, could not be adduced in evidence. 50. It is established that authenticity may be proved circumstantially.[42] In this case, the circumstantial evidence readily established a prima facie case of authenticity of the WhatsApp messages. Such circumstantial evidence included: the fact that over 3,900 messages between June and September had been downloaded from the mobile phone[43] and appeared to form a chain of communications flowing naturally from preceding messages forming a comprehensive whole; the admissions made by the respondent in the VRI with regard to the messages found on the mobile phone; and the content of the messages retrieved, which appeared generally consistent with the respondent’s account in the VRI. 51. With respect, none of the concerns raised by the judge would have suggested the prima facie authentic test was not satisfied in the present case. As such, there was no warrant for the judge holding the voire dire hearing to inquire into the authenticity of the WhatsApp messages or the contents of exhibit P60, let alone ruling against the admissibility of such evidence. Her expressed conclusions as to the securing of the data on the mobile phone, the preservation of the integrity of the data within, the absence of a secure and unassailable copy of the data retrieved and the inability to retrieve a significant amount of data (at [18] of the voire dire ruling, quoted above) clearly demonstrate that the judge trespassed into the function of the jury in deciding the weight and reliability of the contents of the mobile phone and went far beyond any prima facie inquiry as to authenticity. E.3 Conclusion on the voire dire ruling 52. For the above reasons, the judge should not have directed the holding of a voire dire into the admissibility of the WhatsApp messages and her ruling that the contents of exhibit P60 were inadmissible as evidence was wrong. 53. In reaching the above conclusion as to the voire dire ruling, it has been sufficient to focus on the matters discussed above. It has not been necessary to consider wider issues that might arise in relation to the adducing of digital evidence from a mobile phone. There are various technical questions which might arise in that regard, including the forensic exercises of digital imaging and digital cloning.[44] 54. It is conceivable that cases might arise where the manner in which a mobile phone or other mobile device is accessed and data retrieved from it might be material to the prima facie authenticity or weight or reliability of the evidence in question. However, that is clearly not the case here, nor was it the case in HKSAR v Lau Shing Chung Simon, HKSAR v Fung Hoi Yeung or HKSAR v Chan Siu Tan. Given the proliferation of mobile messaging applications, it is highly likely that evidence will be sought to be tendered in the form of WhatsApp messages in other cases in future. As discussed above, where such messages are tendered as real evidence or for a non-testimonial purpose, the hearsay rule is not engaged and no question of reliance on any statutory exception to that rule (such as s.22A of the Evidence Ordinance) arises. But where a party seeks to rely on WhatsApp messages to prove the content of those communications and so tenders the messages for a testimonial purpose, the hearsay rule will be engaged and the admissibility of the evidence will depend on compliance with the relevant statutory regime. 55. More detailed consideration of other technical aspects of the forensic exercises mentioned will, therefore, need to await another case in which those aspects are relevant to questions of admissibility at the prima facie authentic threshold or as to weight and reliability at the trial threshold. It is likely in that context that it will be necessary to consider technical evidence of a nature not adduced, nor fully argued, in this case. F. The judge’s exercise of discretion to grant the stay of proceedings 56. As Sir Anthony Mason NPJ stated, in HKSAR v Lee Ming Tee & Securities and Futures Commission (Intervener): “The order for the grant of a permanent stay proceeded from the exercise of a judicial discretion by the Judge. An appeal from the exercise of such a discretion is governed by well-settled principles. It must appear that the exercise of discretion was based upon a misunderstanding of the law or of the evidence or upon evidentially unsupported inferences that particular facts existed or did not exist. Alternatively, it must appear that the exercise of discretion miscarried because it was based upon an irrelevant consideration or it failed to take into account a relevant consideration or it was plainly wrong in the sense that it was so unreasonable that it must have proceeded from some undisclosed error of principle or erroneous application of the principle. See Owners of the Las Mercedes v Owners of the Abidin Daver (The Abidin Daver) [1984] AC 398 at p.420A-C where Lord Brandon’s statement is confined to a situation where there is no challenge to the facts on which the exercise of the discretion is based.”[45] 57. The judge’s decision to grant a stay of proceedings, being an exercise of judicial discretion, was squarely based on the voire dire ruling. (1) In the stay decision, the judge stated: “The defendant is charged with one count of trafficking in a dangerous drug … This is an application for a permanent stay of those proceedings as a result of my Ruling dated 17 December 2021 (‘the Ruling’), under which I ruled inadmissible the digital evidence from the defendant’s mobile phone [P60]. That Ruling should be read in conjunction with this Decision.”[46] (2) The respondent’s counsel relied on the voire dire ruling as the basis of his submission that it would be impossible to give the respondent a fair trial and that for the trial to continue would amount to an abuse of process.[47] In turn, the judge framed the issue for her decision in these terms: “The issue now is how the Ruling has affected the defendant and whether it has rendered any trial unfair. The defence cannot adduce it in its current form of its own volition. There is no proper digital copy of what was on the phone at the material time for the purpose of a s22A certificate by an independent expert. That error cannot be remedied. S22A(3) precludes the defendant from adducing it himself.”[48] (3) The judge concluded that what she considered to be failures on the part of Customs and Excise in respect of the processing of evidence from exhibit P60 had led to substantial prejudice to the respondent, which could not be addressed, so that, as a result, he could not receive a fair trial.[49] (4) It is therefore clear that the basis of the judge’s decision to grant a permanent stay of proceedings, being an exercise of judicial discretion, was the voire dire ruling. 58. Since, for the reasons set out in Section E above, the voire dire ruling was erroneous, it follows that the inadmissibility of the WhatsApp messages from the respondent’s mobile phone was not a factor that could properly be taken into account by the judge in the exercise of her discretion as to whether to grant a permanent stay of proceedings. On the contrary, it was an irrelevant consideration. That factor was, however, the sole basis of the judge’s decision to grant a stay of proceedings. 59. But for the erroneous view the judge took of the admissibility of the WhatsApp messages, there would have been no basis for the respondent’s application to permanently stay the proceedings against him. Accordingly, the stay application, if made, should have been dismissed by the judge. 60. By taking an irrelevant factor into consideration in the exercise of her judicial discretion, the judge self-evidently allowed a serious departure from an accepted norm to the disadvantage of the prosecution to occur. Had she not ruled erroneously that the WhatsApp messages in exhibit P60 were inadmissible as evidence, there would have been no basis for the respondent to apply for a permanent stay of the proceedings against him. The trial would have proceeded and the issue of whether the respondent knew the suitcases he was carrying contained dangerous drugs would have been determined by the jury. 61. For the above reasons, the judge’s exercise of discretion in relation to the respondent’s application to stay proceedings miscarried and should be set aside. 62. A permanent stay of criminal proceedings is a highly exceptional course since it is only in very unusual circumstances that a court will conclude that a fair trial is impossible and thus, as a last resort, abort the trial.[50] The prosecution has contended, on this appeal, that in any event, even if the voire dire ruling were correct, a fair trial would still have been possible.[51] However, since the prosecution’s appeal against the stay decision is based on the substantial and grave injustice ground and succeeds on the straightforward basis that the judge took an irrelevant consideration into account, it is unnecessary to burden this judgment by a discussion, on a hypothetical basis, of whether, even if the judge’s voire dire ruling were correct, she should not have granted a permanent stay of proceedings. It is sufficient to record that the arguments advanced by the prosecution as to the practical measures by which any perceived unfairness to the respondent might have been avoided or alternatively adequately mitigated were reasonably arguable. G. The judge’s variation of the respondent’s bail conditions 63. Upon a judge granting a permanent stay of proceedings against a defendant in a criminal prosecution, it is open to the prosecution to apply for leave to appeal to this Court against such an order. The application for leave may or may not be successful. If leave is granted, the appeal may or may not be allowed. If the appeal is allowed, it will follow that the criminal prosecution should proceed to trial. At the trial, the defendant may or may not be convicted. If convicted, the defendant may be liable to punishment by way of custodial sentence. This chain of possible outcomes demonstrates the obvious point that it is possible, notwithstanding a judge’s order permanently to stay criminal proceedings, that a defendant may ultimately be convicted of the offence charged and thereafter be subject to a term of imprisonment. 64. Given those circumstances, what should a judge’s approach to the issue of bail be when, following a grant of a permanent stay of proceedings, the prosecution indicates an intention to apply for leave to appeal to this Court against that stay? 65. The starting point in answering that question is s.35(2) of the HKCFAO, which applies: “… where, immediately after a decision of the Court of Appeal or the Court of First Instance, as the case may be, from which an appeal lies to the Court, the prosecutor is granted or gives notice that he intends to apply for, leave to appeal.”[52] That was the position here, when the prosecution served notice, on 15 March 2022, of its intention to apply for leave to appeal to the Court of Final Appeal from the judge’s decision granting a permanent stay of proceedings. 66. S.35(2) provides: “If, but for the decision of the Court of Appeal or the Court of First Instance, as the case may be, the defendant would be liable to be detained, the Court of Appeal or the Court of First Instance, as the case may be, may, on the application of the prosecutor made within 7 days of that decision, make an order providing for his detention, or directing that he shall not be released except on bail (which may be granted as under section 34), as long as an appeal to the Court is pending.” 67. S.34 of the HKCFAO, referred to in s.35(2), is the statutory provision setting out the jurisdiction to grant bail to a person in custody who is appealing or intending to appeal against a decision to the Court of Final Appeal. The material provisions of s.34 are those set out in sub-ss.(1) and (2) which read: “(1) The Court, the Court of Appeal or the Court of First Instance, as the case may be, may on the application of a person appealing or applying for leave to appeal or on the application of a person in custody pending the determination of the appeal, grant the person in custody bail pending the determination of the appeal. (2) A grant of bail under subsection (1) may be made subject to such conditions as the Court, the Court of Appeal or the Court of First Instance, as the case may be, considers necessary.” 68. It will be apparent that the statutory power under s.35(2) is discretionary. The court whose decision is to be appealed may make an order providing for the defendant’s detention or it may order his release on bail subject to such conditions as the court considers necessary. The power is also conditional on the premise that “but for the decision of the Court of Appeal or the Court of First Instance, as the case may be, the defendant would be liable to be detained”. 69. The context in which the discretion in s.35(2) falls to be exercised is the administration of the criminal justice system in Hong Kong. The statutory purpose of s.35(2) is to assist in the just and efficient administration of that criminal justice system. It is generally in the interests of that system that defendants facing allegations of serious criminal wrongdoing are subject to a fair trial and, if a conviction follows thereafter, subject to such sentence of punishment as is appropriate. Thus, s.35(2) expressly provides that where, but for the decision sought to be appealed from, “the defendant would be liable to be detained”, there is a power to detain in custody or grant bail. As the Appeal Committee explained, in HKSAR v Lai Chee Ying: “Section 35 operates to enable a defendant who has been in custody and who has successfully appealed to the CFI or the Court of Appeal to be ordered by that court, on the application of the prosecutor, to continue to be held in custody where the prosecutor ‘is granted or gives notice that he intends to apply for, leave to appeal’.”[53] This applies equally in the present case, where a defendant, rather than having successfully appealed to the judge below (as was the position in HKSAR v Lai Chee Ying), has succeeded in an application to stay proceedings permanently. 70. When s.35(2) is invoked by the prosecution, the court to whom the application is made must determine whether “but for the decision [appealed against], the defendant would be liable to be detained”. In so determining, the court must ascertain what the position would have been but for the impugned decision as regards the liberty of the defendant. That status quo ante is the starting point from which the discretion in s.35(2) is to be exercised. In the case of a defendant who has been in custody, it does not follow that the court must order his continued detention but, unless there has been some material change in circumstances, the proper exercise of such discretion will generally be to maintain that status quo ante. As explained by the Appeal Committee in HKSAR v Lai Chee Ying: “… the statutory intention is plainly to enable the status quo to be maintained, with the defendant continuing to be held in custody in case the lower court’s decision proves to be wrong and the prosecutor’s intended appeal is successful.”[54] 71. Therefore, in the light of that statutory intention and in the case of a proposed appeal by the prosecution against an order granting a permanent stay of proceedings, it would not normally be a proper exercise of discretion under s.35(2) to make an order which might give rise to a substantial risk of a previously remanded defendant, whether foreign or not, being absent from the jurisdiction when the prosecution, having succeeded on the appeal, then sought to proceed with the prosecution. The defendant’s absence at that stage would frustrate the prosecution’s ability to proceed and would, in that sense, render the appeal nugatory. 72. To that extent, in my view, the answer to the question for which leave to appeal was granted (set out at [18] above) is, clearly, “No”. 73. In the present case, the respondent was in custody pending trial. But for the judge’s decision to stay the proceedings, which was intended to be the subject of an appeal by the prosecution, the defendant would have remained under detention in custody pending his trial. That was the status quo ante in the present case and should have been the judge’s starting point in the exercise of her discretion under s.35(2). But for the decision intended to be appealed from, namely the judge’s stay decision, the respondent was liable to be detained since he had been remanded in custody pending trial. 74. The departure of a criminal defendant from this jurisdiction prior to his trial raises the possibility that he may not return to the jurisdiction, or not be liable to extradition, to face trial. In that event, in the case of a defendant who, if he were to have been tried, would have been convicted, justice will have been frustrated. This does not serve the public interest, which requires that serious crimes are prosecuted and, if a conviction follows, offenders punished. 75. In the present case, if, having left the jurisdiction, the respondent were not voluntarily to return, or could not be brought back to the jurisdiction under compulsion, the appeal against the judge’s stay decision would have been rendered nugatory. That should not have occurred. H. Conclusion and disposition of appeal 76. For the reasons set out in Section F above, the judge’s grant of a permanent stay of proceedings against the respondent was erroneous, being based on her flawed ruling on the voire dire (for the reasons set out in Section E above). It follows that the prosecution’s appeal against the stay must be allowed and the stay granted by the judge set aside. 77. What happened following the judge’s delivery of her decision on the stay application regarding the grant of bail on 15 March 2022 and then the variation of the bail conditions on 18 March 2022 is not the subject of the question of law in relation to bail for which leave to appeal was granted. However, the conclusion that the stay was wrongly granted and must be set aside is that the subsequent grant of bail, on 15 March 2022, and the variation of the conditions of bail thereafter, on 18 March 2022, must also be set aside in consequence. 78. The effect of the judge’s grant of bail and then her subsequent variation of his bail conditions, following her decision to grant a permanent stay of proceedings against him, was that the respondent was free to leave the jurisdiction of Hong Kong and he duly did so. However, for the reasons already explained, the proceedings against the respondent should not have been stayed and he should therefore face a trial on the charge of trafficking in a dangerous drug. If such a trial were to result in his conviction, and that is a matter of speculation at this stage, he would be liable to imprisonment for a lengthy period in light of the quantity of drugs involved. 79. The prosecution is at liberty to list the matter before another judge of the Court of First Instance to make such orders as may be appropriate in order to proceed, if possible, with the prosecution. The grant of bail on 15 March 2022 having been set aside, the respondent is liable to be detained pursuant to the order remanding him in custody pending trial. If he remains at large, a judge of the Court of First Instance may issue a warrant of arrest in respect of the respondent. It may yet be the case that the respondent will return voluntarily to this jurisdiction to face trial for the offence of trafficking. Unfortunately, however, by reason of the judge’s orders in the present case, there is no certainty that this will happen. Mr Justice Lam PJ: 80. I agree with the judgment of Mr Justice Fok PJ. Mr Justice Stock NPJ: 81. I agree with the judgment of Mr Justice Fok PJ. Lord Neuberger of Abbotsbury NPJ: 82. I agree with the judgment of Mr Justice Fok PJ. Chief Justice Cheung: 83. The appeal is therefore unanimously allowed and the question of law for which leave to appeal was granted answered in the manner set out in paragraph [72] above. The Court makes the orders set out in paragraphs [76], [77] and [79] above. Mr Derek Lau SADPP (Ag) and Mr Gary Leung ADPP (Ag), of the Department of Justice, for the Appellant Mr Richard Donald, instructed by Morley Chow Seto, assigned by the Director of Legal Aid, and Ms Nisha Mohamed, instructed by Morley Chow Seto, on a pro bono basis, for the Respondent [1] [2021] HKCFI 3824, HCCC 240/2020, Ruling, 17 December 2021 (“the voire dire ruling”). [2] Ibid. at [19]. [3] [2022] HKCFI 800, HCCC 240/2020, Reasons for Decision, 18 March 2022 (“the stay decision”). [4] (2001) 4 HKCFAR 133. [5] The stay decision at [16]. [6] The Appellant’s Case at [28]. [7] The Respondent’s Case at [6] et seq. [8] “An appeal shall, at the discretion of the Court, lie to the Court in any criminal cause or matter, at the instance of any party to the proceedings, from – (a) any final decision of the Court of Appeal; (b) any final decision of the Court of First Instance (not being a verdict or finding of a jury) from which no appeal lies to the Court of Appeal.” [9] [2022] HKCFA 6, (2022) 25 HKCFAR 34 at [17]. [10] At [11]. [11] HKSAR v To Chak Hang (2015) 18 HKCFAR 541 at [5]. [12] HKSAR v Chen Keen (No 2) [2022] HKCFA 6, (2022) 25 HKCFAR 34 at [23]. [13] See, e.g., HKSAR v Lee Ming Tee & Another (2001) 4 HKCFAR 133, and also HKSAR v Lee Ming Tee & Securities and Futures Commission (Intervener) (2003) 6 HKCFAR 336. [14] There were some 3,923 messages between 14 June and 11 September 2019 downloaded from the phone by Customs and Excise: see the stay decision at [10(i)]. [15] The voire dire ruling at [1]. [16] Ibid. at [5]. [17] Ibid. at [2]-[3]. [18] Referring to the MD5 (Message-Digest algorithm 5), used for digital authentication. [19] The voire dire ruling at [7]. [20] Ibid. at [12]. [21] Ibid. at [17]-[18]. [22] The Respondent’s Case at [14]. [23] (2007) 10 HKCFAR 98 at [35]. The strict common law rule is, of course, now subject to statutory exceptions: see, principally, the Evidence Ordinance (Cap.8), s.22. [24] (2015) 18 HKCFAR 50 at [27]. [25] Ibid. at [28]. [26] (2007) 10 HKCFAR 98 at [39]. [27] (1999) 2 HKCFAR 510 at 526C-D. [28] (2015) 18 HKCFAR 50 at [27]-[32]. [29] The voire dire ruling at [7]. [30] Ibid. at [17]. [31] The stay decision at [25]. [32] (2015) 18 HKCFAR 50 at [25]. [33] [2022] HKCA 1073, [2022] 3 HKLRD 833. [34] Ibid. at [48]. [35] [2020] HKCFA 14, (2020) 23 HKCFAR 153 at [18]. [36] Ibid. at [19]. [37] [1972] 1 WLR 651 at 653-654. [38] [1990] NI 306 at 342-343. [39] [2004] EWCA Crim 311 at [51]-[54]. [40] [2003] 3 HKLRD 751. [41] The voire dire ruling at [9]. [42] HKSAR v Yeung Ka Ho (2013) 16 HKCFAR 609 at [44] and [52]; HKSAR v Chan Siu Tan [2020] HKCFA 14, (2020) 23 HKCFAR 153 at [20] and [22]. [43] See FN14 above. [44] The former (digital imaging) is a forensic process of creating an exact bit-by-bit replica of an original device. This enables forensic examiners to conduct an examination of digital evidence on an exact copy, or image, rather than on the original device. The latter (digital cloning) is a process by which an exact copy of an original device is created. The difference between the two processes is that the copy in the case of digital cloning is stored in a similar device to the original device, whereas with digital imaging the copy is stored in the form of files in any suitable storage device. [45] (2003) 6 HKCFAR 336 at [68]. [46] The stay decision at [6]. [47] Ibid. at [11], [14]. [48] Ibid. at [25]. [49] Ibid. at [29]. [50] HKSAR v Lee Ming Tee & Another (2001) 4 HKCFAR 133 at 150C-G. [51] The Appellant’s Case, Section C.3. [52] HKCFAO, s.35(1); the heading of s.35 is “Detention on appeal by prosecutor”. [53] [2020] HKCFA 45, reported as HKSAR v Lai Chee Ying (No 2) in [2021] 1 HKC 344, at [27]. [54] Ibid. at [28].
The Court: A. Introduction 1. As is now a matter of public record, between June and October 2019, Hong Kong, a city long regarded as safe, experienced an exceptional and sustained outbreak of violent public lawlessness. The evidence of these extraordinary events is essentially common ground between the parties to these appeals and will be addressed in more detail later in this judgment but there is no question that by early October 2019 the situation in Hong Kong had become dire. Something had to be done. 2. For reasons we shall examine in detail below, the Chief Executive in Council (“CEIC”) determined that what should be done was to introduce a law prohibiting the wearing of face masks and face coverings at certain types of public gatherings. That law, made by the CEIC on 4 October 2019 and coming into effect at midnight on 5 October 2019, is the Prohibition on Face Covering Regulation (“PFCR”).[1] The PFCR was made by the CEIC under section 2 of the Emergency Regulations Ordinance (“ERO”).[2] 3. The question at the heart of these appeals is whether, in the light of the Basic Law of the Hong Kong Special Administrative Region (“Basic Law”), the CEIC was lawfully given power by the Legislative Council to make the PFCR under the ERO. As well as that core question of constitutionality, a number of additional specific legal challenges to the ERO are advanced. These are “the constitutionality issues”. 4. If the ERO is determined to be constitutional and the PFCR duly made thereunder, the other principal question central to these appeals is whether certain of the provisions of the PFCR are a proportionate restriction of protected rights. The appeals raise issues concerning the appropriate standard of review and the application of a proportionality analysis. These are “the proportionality issues”. A.1 The PFCR 5. The PFCR consists of six sections. Section 1 specifies the commencement and section 2 is an interpretation section containing various definitions, including “facial covering” meaning “a mask or any other article of any kind (including paint) that covers all or part of a person’s face”. 6. Section 3 creates an offence of using a facial covering in certain circumstances. It reads: “3. Use of facial covering in certain circumstances is an offence (1) A person must not use any facial covering that is likely to prevent identification while the person is at – (a) an unlawful assembly (whether or not the assembly is a riot within the meaning of section 19 of Cap. 245); (b) an unauthorized assembly; (c) a public meeting that – (i) takes place under section 7(1) of Cap. 245; and (ii) does not fall within paragraph (a) or (b); or (d) a public procession that – (i) takes place under section 13(1) of Cap. 245; and (ii) does not fall within paragraph (a) or (b). (2) A person who contravenes subsection (1) commits an offence and is liable on conviction to a fine at level 4 and to imprisonment for 1 year.” 7. Section 4 provides, for a person charged with an offence under section 3(2), a defence of lawful authority or reasonable excuse for using a facial covering in the following terms: “4. Defence for offence under section 3(2) (1) It is a defence for a person charged with an offence under section 3(2) to establish that, at the time of the alleged offence, the person had lawful authority or reasonable excuse for using a facial covering. (2) A person is taken to have established that the person had lawful authority or reasonable excuse for using a facial covering if – (a) there is sufficient evidence to raise an issue that the person had such lawful authority or reasonable excuse; and (b) the contrary is not proved by the prosecution beyond reasonable doubt. (3) Without limiting the scope of the reasonable excuse referred to in subsection (1), a person had a reasonable excuse if, at the assembly, meeting or procession concerned – (a) the person was engaged in a profession or employment and was using the facial covering for the physical safety of the person while performing an act or activity connected with the profession or employment; (b) the person was using the facial covering for religious reasons; or (c) the person was using the facial covering for a pre-existing medical or health reason.” 8. Section 5 gives a police officer power to require a person using a facial covering in a public place to remove the facial covering, failing which an offence is committed, and provides: “5. Power to require removal in public place of facial covering (1) This section applies in relation to a person in a public place who is using a facial covering that a police officer reasonably believes is likely to prevent identification. (2) The police officer may – (a) stop the person and require the person to remove the facial covering to enable the officer to verify the identity of the person; and (b) if the person fails to comply with a requirement under paragraph (a) – remove the facial covering. (3) A person who fails to comply with a requirement under subsection (2)(a) commits an offence and is liable on conviction to a fine at level 3 and to imprisonment for 6 months.” 9. Section 6 extends the time limit for commencement of a prosecution for an offence under section 3(2) or section 5(3) to 12 months from the date on which the offence is committed. A.2 The ERO 10. As already mentioned, the PFCR was made under the ERO. The ERO was enacted on 28 February 1922 and contains three operative sections (sections 2, 3 and 4). The relevant parts of those provisions are identified in Section B.1 below. A.3 The CEIC’s decision to make the PFCR 11. The CEIC’s decision to invoke the ERO and to make the PFCR was taken at a meeting of the Executive Council held on the morning of 4 October 2019. At a press conference that afternoon at which the Chief Executive announced the decision, she emphasised four points: “One – although the Ordinance carries the title ‘Emergency’, Hong Kong is not in a state of emergency and we are not proclaiming that Hong Kong is entering a state of emergency. But we are indeed in an occasion of serious danger, which is a stated condition in the Emergency Regulations Ordinance for the Chief Executive in Council to exercise certain powers, and I would say that we are now in rather extensive and serious public danger. It is essential for us to stop violence and restore calmness in society as soon as possible. We hope that the new legislation can help us to achieve this objective. The second point I want to make is the objective of this regulation is to end violence and restore order, and I believe this is now the broad consensus of Hong Kong people. The third point is this regulation targets rioters or those who resort to violence. That’s why the regulation contains defence and exemptions to cater for legitimate needs to wear a mask, and we believe that by so doing we have struck the necessary balance. Fourth, the regulation is a piece of subsidiary legislation subject to negative vetting. So when Legislative Council resumes on October 16, the regulation will be tabled in the Legislative Council for members’ discussion.” 12. The PFCR was annexed to a Legislative Council Brief (File Reference: SBCR 3/3285/57) setting out a justification for the invocation of the ERO by the CEIC and the decision to make the PFCR thereunder.[3] The PFCR was laid on the table of the Legislative Council (“LegCo”) on 16 October 2019 pursuant to the negative vetting procedure prescribed under section 34 of the Interpretation and General Clauses Ordinance (Cap. 1) (“IGCO”). A.4 The judicial review challenges 13. These appeals arise out of two separate applications for judicial review. The first in time was that made on 5 October 2019 by 24 members of LegCo in HCAL 2945/2019. The second was that made on 8 October 2019 by Mr Leung Kwok Hung, the former member of LegCo known as “Long Hair”, in HCAL 2949/2019. Together, the 24 LegCo member applicants and Mr Leung Kwok Hung will be referred to in this judgment as “the applicants”. The respondents to those applications were the CEIC and the Secretary for Justice, who together as a party to the proceedings will be referred to in this judgment as “the Government”. 14. There were various grounds of challenge mounted in the two judicial review applications. The applicants did not contend that the CEIC had acted otherwise than in good faith in reaching the decision to invoke the ERO to make the PFCR. Nor did any of the applicants suggest that the decision to do so was unreasonable in the Wednesbury public law sense.[4] Instead, it was contended, in summary, that: (1) The ERO was an unconstitutional delegation of general legislative power by the legislature to the CEIC, contrary to various provisions of the Basic Law. This was referred to below as Ground 1, or “the delegation of legislative power ground”. (2) The ERO was impliedly repealed by section 3(2) of the Hong Kong Bill of Rights Ordinance,[5] either entirely or to the extent inconsistent with section 5 of the HKBORO, alternatively by Article 4 of the International Covenant on Civil and Political Rights (“ICCPR”) applied through Article 39 of the Basic Law. This was referred to below as Ground 2, or “the implied repeal ground”. (3) The ERO infringes the “prescribed by law” requirement in Article 39 of the Basic Law. This was referred to below as Ground 3, or the “prescribed by law ground”. (4) The PFCR is ultra vires by reason of the principle of legality which precludes the adoption of measures under section 2(1) of the ERO that infringe fundamental rights otherwise than in circumstances amounting to emergency situations. This was referred to below as Ground 4, or the “principle of legality ground”. (5) Section 3 of the PFCR constitutes a disproportionate restriction of the rights to liberty and privacy, freedom of expression and right of peaceful assembly under the BOR and the Basic Law. This was referred to below as Ground 5A, or the “section 3 proportionality ground”. (6) Section 5 of the PFCR constitutes a disproportionate restriction of various rights and freedoms under the BOR and the Basic Law. This was referred to below as Ground 5B, or the “section 5 proportionality ground”. 15. The two judicial reviews were heard together before G. Lam J and Chow J on 31 October 2019 and 1 November 2019. By their joint judgment dated 18 November 2019 (“the CFI Judgment”), their Lordships held in favour of the applicants on: (i) the delegation of legislative power ground (Ground 1); (ii) the section 3 proportionality ground (Ground 5A) in respect of the provisions in sections 3(1)(b), 3(1)(c) and 3(1)(d) of the PFCR; and (iii) the section 5 proportionality ground (Ground 5B). 16. By notices of appeal in CACV 541/2019 and CACV 542/2019, the Government sought to challenge those holdings in the CFI Judgment. The 24 applicants in HCAL 2945/2019 sought to cross-appeal (in CACV 583/2019) against the rejection of Grounds 2 and 3 in the CFI Judgment and to affirm, by respondent’s notice in CACV 542/2019, the CFI Judgment on Ground 4. The applicant in HCAL 2949/2019 also filed a cross-appeal and respondent’s notice in CACV 541/2019, seeking to challenge aspects of the CFI Judgment in respect of Ground 5B and the rejection of Ground 3. 17. The appeals were heard together by Poon CJHC, Lam VP and Au JA on 9 and 10 January 2020. By a judgment of the Court dated 9 April 2020 (“the CA Judgment”), the Court of Appeal allowed the Government’s appeal under Ground 1 and partially allowed its appeal under Ground 5A to the extent that it set aside the CFI Judgment that section 3(1)(b) of the PFCR is disproportionate but dismissed the Government’s appeal under Ground 5B. The Court of Appeal otherwise dismissed the applicants’ cross-appeals and respondents’ notices. 18. The resulting position, following the CA Judgment, is that the ERO, insofar as it empowers the CEIC to make emergency regulations on any occasion of public danger, has been held to be constitutional. The constitutionality of section 3(1)(a) of the PFCR has not been challenged. Section 3(1)(b) of the PFCR has been held to be constitutional but sections 3(1)(c), 3(1)(d) and 5 of the PFCR have been held to be unconstitutional. Essentially, the applicants failed on their Grounds 1, 2, 3, 4 and 5A (partially in respect of section 3(1)(b) of the PFCR) and the Government failed on Ground 5A (in respect of sections 3(1)(c) and 3(1)(d)) and Ground 5B. A.5 The certified questions on appeal 19. The parties sought leave to appeal to this Court on the grounds on which they had failed in the Court of Appeal. The issues in the appeals being of obvious general and public importance, the Court of Appeal granted leave to appeal to this Court to all the applicants and also to the Government in respect of various questions of law. It is not necessary to set those questions out at length in this judgment. It is sufficient to state that the parties were respectively granted leave to argue those issues on which they lost in the Court of Appeal. As noted below, the Government did not pursue Ground 5B (in respect of section 5 of the PFCR) before this Court. 20. The questions raised as to the constitutionality of the ERO and the power to make regulations thereunder are logically anterior to considerations of the proportionality or otherwise of sections 3(1)(b), 3(1)(c) and 3(1)(d) of the PFCR. The constitutional issues will therefore be addressed first in Section B below. Thereafter, we shall address the proportionality issues in Section C below. B. The Constitutionality Issues (Grounds 1 to 4) B.1 The ERO 21. The ERO was enacted in 1922 by the legislature to give the Governor in Council power to make regulations in case of emergency or public danger. Since its enactment, various regulations have been made under the ERO by the Governor in Council.[6] There have been two unsuccessful legal challenges against the vires of the Ordinance.[7] On both occasions, the Full Court held that the Ordinance was not unconstitutional under the pre-1997 constitutional set-up. 22. Upon the establishment of the Hong Kong Special Administrative Region (“HKSAR”) on 1 July 1997, the ERO was adopted as part of the laws of the Special Administrative Region pursuant to articles 8, 18 and 160 of the Basic Law, the Ordinance not being amongst those listed in Appendix I or II to the Decision of the Standing Committee of the National People’s Congress (“SCNPC” and “NPC” respectively) dated 23 February 1997 as being in contravention of the Basic Law.[8] The CEIC has replaced the Governor in Council as the regulation making authority under the ERO. 23. The ERO consists of only four sections. Its preamble says that it is an Ordinance to confer on the CEIC power to make regulations on occasions of emergency or public danger. This power is set out in section 2(1): “On any occasion which the Chief Executive in Council may consider to be an occasion of emergency or public danger he may make any regulations whatsoever which he may consider desirable in the public interest.” 24. Section 2(2) of the Ordinance specifically provides, without prejudice to the generality of section 2(1), that the regulations made by the CEIC may provide for a number of matters, including, amongst other things, censorship of publications;[9] arrest, detention, exclusion and deportation;[10] appropriation, control, forfeiture and disposition of property and of the use thereof;[11] entry and search of premises;[12] requirement to do work or render services;[13] and the apprehension, trial and punishment of persons offending against the regulations.[14] Furthermore, section 2(2)(g) stipulates that regulations made by the CEIC may provide for: “amending any enactment, suspending the operation of any enactment and applying any enactment with or without modification.” 25. Section 2(3) provides that the regulations made by the CEIC “shall continue in force until repealed by order of the [CEIC]”. 26. Section 2(4), which should be read together with section 2(2)(g), provides: “A regulation or any order or rule made in pursuance of such a regulation shall have effect notwithstanding anything inconsistent therewith contained in any enactment; and any provision of an enactment which may be inconsistent with any regulation or any such order or rule shall, whether that provision shall or shall not have been amended, suspended or modified in its operation under subsection (2), to the extent of such inconsistency have no effect so long as such regulation, order or rule shall remain in force.” 27. Section 3 of the Ordinance says that regulations made by the CEIC may provide for the punishment of any offence with penalties and sanctions up to and including a maximum penalty of mandatory life imprisonment.[15] 28. Section 4 was added to the ERO for the removal of doubt and declares that the power to make regulations in section 2(1) has always included the power to make regulations as mentioned in section 2(2)(g), namely regulations to amend, suspend the operation of or apply any enactment, and that the provisions of section 2(4) have always been incorporated in the ERO. B.2 The decisions below 29. The courts below came to opposite conclusions on the constitutionality of the ERO. Essentially, the Court of First Instance (“CFI”) took the view that on a proper construction of the Basic Law as a whole, the constitutional order established by the Basic Law after 1997 vests the general legislative power of the HKSAR in LegCo only.[16] Whilst the CEIC has the power to make subordinate legislation, she does not have and cannot be delegated with general legislative power which belongs only to LegCo.[17] The ERO attempts to do what cannot be done under the Basic Law, namely to delegate LegCo’s general legislative power to the CEIC to enact what is in nature of primary legislation.[18] In the CFI’s own words: “It is the power and function of the LegCo as the designated legislature of the Hong Kong SAR to legislate. Other bodies cannot consistently with the constitutional framework be given general legislative power but only the power to make subordinate legislation. It may be a matter of degree whether a power granted is in truth general legislative authority rather than the acceptable power to make subordinate legislation. But insofar as the public danger ground is concerned, the ERO is so wide in its scope, the conferment of powers so complete, its conditions for invocation so uncertain and subjective, the regulations made thereunder invested with such primacy, and the control by the LegCo so precarious, that we believe it is not compatible with the constitutional order laid down by the Basic Law having regard in particular to Arts 2, 8, 17(2), 18, 48, 56, 62(5), 66 and 73(1) of the Basic Law. We do not consider that, within the proper limits of remedial interpretation as set out in HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at §66 and Keen Lloyd Holdings Ltd v Commissioner of Customs and Excise [2016] 2 HKLRD 1372 at §97, the ERO in relation to the public danger ground could be made compatible with the Basic Law without introducing changes that the court is ill‑equipped to decide on or producing something wholly different from what the legislature originally intended.”[19] 30. This part of the CFI’s decision was reversed by the Court of Appeal. Relying heavily on the theme of continuity as informing the analysis of the constitutionality of the ERO,[20] and after examining in detail the principal features of the Ordinance,[21] the Court of Appeal concluded that the ERO does not confer on the CEIC general legislative power to make primary legislation.[22] Regulations made pursuant to the ERO are only subsidiary legislation. The constitutional set-up under the Basic Law is not infringed. Since the Court of Appeal, like the CFI, also rejected the other grounds for challenging the constitutionality of the ERO,[23] it therefore concluded that the Ordinance is constitutional.[24] B.3 The impermissible delegation argument 31. Before us, the applicants essentially repeated the arguments run in the courts below, namely the impermissible delegation argument, the principle of legality argument, the HKBORO section 5 argument and the prescribed by law argument. 32. We will first deal with the impermissible delegation argument – the argument that divided the CFI and the Court of Appeal – before dealing with the other arguments which were rejected by both courts below. B.3.1 The applicants’ core propositions 33. Under the impermissible delegation argument, the “core propositions” of the applicants are as follows: “The constitutional framework that underpins the system of law and governance in the HKSAR, which is the [Basic Law], confers general legislative powers on LegCo as the Legislature of the HKSAR, and gives no power to LegCo to confer such powers on the executive branch, and that any primary legislation which purports to confer such powers, or which enables the executive branch to circumvent this constitutional role and function of LegCo, is unconstitutional and invalid. The ERO, which allows the CEIC to enact any regulation of any kind and without any limit; which the CEIC considers desirable in the public interest; which can take immediate effect; which prevails over any other laws; and which is impervious to repeal without the CEIC’s consent, is therefore unconstitutional and invalid.” [25] 34. We have no difficulty with the first proposition. Chapter IV of the Basic Law clearly sets out the political structure of the HKSAR. Sections 1 to 4 under Chapter IV deal with, respectively, the Chief Executive, the Executive Authorities, the Legislature and the Judiciary. They all have different roles to play, powers to exercise and functions to perform. So far as legislative power is concerned, the legislative power which the NPC authorises the HKSAR to exercise, pursuant to article 2 of the Basic Law, is exercisable by LegCo, which is made the legislature of the HKSAR under article 66. Article 73(1) specifically says that LegCo shall exercise the power and function “to enact, amend or repeal laws in accordance with the provisions of [the Basic Law] and legal procedures.” 35. However, this does not mean that the Chief Executive and the Executive Government have no role to play in terms of legislating for the HKSAR. So far as the Government is concerned, article 62(5) provides that the Government has the power and function “to draft and introduce bills, motions and subordinate legislation”. As for the Chief Executive, who is both the head of the HKSAR[26] and head of the executive authorities of the HKSAR, i.e. the Government,[27] article 56(2) states: “Except for the appointment, removal and disciplining of officials and the adoption of measures in emergencies, the Chief Executive shall consult the Executive Council before making important policy decisions, introducing bills to the Legislative Council, making subordinate legislation, or dissolving the Legislative Council.” 36. This being the relevant constitutional set-up, three points can immediately be made. First, the legislative power of the HKSAR is vested in LegCo only. Subject to one exception, the Basic Law does not provide for any power on the part of LegCo to delegate its general legislative power to any other body. Secondly, it follows that LegCo cannot delegate its power to make primary legislation to anybody, including the CEIC. Thirdly, the above does not, however, mean that LegCo cannot give another person or body power to make subordinate legislation. Article 62(5) specifically refers to the Government’s role in drafting and introducing subordinate legislation to LegCo. Moreover, article 56(2) expressly provides that the CEIC may make subordinate legislation – if the power to do so has been delegated by LegCo. (It is not disputed by the parties that, apart from the CEIC, LegCo may also give other persons or bodies power to make subsidiary legislation.) B.3.2 The only issue 37. This therefore brings into sharp focus the only real issue raised under the impermissible delegation argument, that is, whether in truth and in substance, the ERO is a piece of legislation which seeks to delegate to the CEIC general legislative power to make primary legislation, in which case the Ordinance is unconstitutional, or whether it merely authorises the CEIC to make subordinate legislation in times of emergency or public danger – in which case the Ordinance cannot be challenged on the present ground. Put in terms of these two core propositions of the applicants, the real debate here is in relation to the second proposition, that is whether: “[t]he ERO, which allows the CEIC to enact any regulation of any kind and without any limit; which the CEIC considers desirable in the public interest; which can take immediate effect; which prevails over any other laws; and which is impervious to repeal without the CEIC’s consent, is therefore unconstitutional and invalid.” 38. Underlying this proposition advanced by the applicants is the contention that in legal systems with a written constitution and a common law tradition, the courts have interpreted statutes as conferring impermissible general legislative power to the executive when: “(1) the power to enact is virtually unfettered and unrestricted; or (2) there are no prescriptive guidelines for its use; or (3) the legislature fails to establish the ‘principles and policies’ in the statute and the delegation is thus more than a mere giving effect to statutory principles and policies or ‘filling in the details’.”[28] 39. In other words, the applicants’ point is that in the above-mentioned situations, what has been purportedly delegated to the executive is not a power to make subordinate legislation, but general legislative power that can only be exercised by the legislature ordained under the written constitution. 40. In support of this point, the applicants contended that the general features of subsidiary legislation in Hong Kong are these.[29] First and foremost, subordinate legislation cannot go outside the confines of the primary legislation enacted by LegCo, especially as expressed in the stated purpose of any subordinate legislation. A hallmark of subordinate legislation is that the vires of any regulation can be determined by reference to the stated purpose. Secondly, subordinate legislation is by definition subordinate to primary legislation such that, whenever there is a conflict between subordinate and primary legislation, the latter prevails.[30] Thirdly, subordinate legislation is not meant to introduce major changes to the law. B.3.3 Reasons for subordinate legislation 41. It is unnecessary to comment on whether the applicants have correctly or fully summarised the relevant case law said to be in support of their contention on the distinction between impermissible delegation of general legislative power and legitimate delegation of the power to make subordinate legislation. This can be accepted for present purposes. We also have no difficulty in accepting what the South African Constitutional Court has said about the fundamental purpose the legislature under a written constitution like the Basic Law is intended to serve and the need for delegated legislation: “The reason why full legislative authority, within the constitutional framework mentioned above, is entrusted to Parliament and Parliament alone would seem to be that the procedures for open debate subject to ongoing press and public criticism, the visibility of the decision-making process, the involvement of civil society in relation to committee hearings, and the pluralistic interaction between different viewpoints which parliamentary procedure promotes, are regarded as essential features of the open and democratic society contemplated by the Constitution. It is Parliament’s function and responsibility to deal with the broad and controversial questions of legislative policy according to these processes. It is not its duty to attend to all the details of implementation. Indeed, if it were to attempt to do so, it would not have the time to serve its primary function. Hence the need for delegated legislation, which has become a feature of parliamentary democracies throughout the world. The power to delegate should therefore be considered as an integral part of the legislative authority; it simply cannot legislate wisely if it tries to legislate too well.”[31] 42. What is, however, important is to remember that there are different reasons why a legislature may find it necessary or desirable to delegate legislative power, and the reason mentioned in the passage quoted above is but one, albeit a very common one. As pointed out by Bennion on Statutory Interpretation,[32] these reasons include: “(a) Modern legislation requires far more detail than Parliament itself has time or inclination for. For example, Parliament may not wish to concern itself with minor procedural matters. (b) To bring a complex legislative scheme into full working operation, consultation with affected interests is required. This can best be done after Parliament has passed the outline legislation, since it is then known that the new law is indeed to take effect and what its main features are. (c) Some details of the overall legislative scheme may need to be tentative or experimental. Delegated legislation provides an easy way of adjusting the scheme without the need for further recourse to Parliament. (d) Within the field of a regulatory Act new developments will from time to time arise. By the use of delegated legislation the scheme can be easily altered to allow for these. (e) If a sudden emergency arises it may be essential to give the executive wide and flexible legislative powers to deal with it whether or not Parliament is sitting.” 43. It can be readily seen that in situations (a) to (d), the power to make subordinate legislation is almost by definition expected to be controlled and limited. There would be neither necessity nor justification to delegate to the executive a power to enact which is “virtually unfettered and unrestricted”; neither is there any reason for the legislature not to give guidelines for the exercise of the delegated power to legislate; nor is there any reason to expect that the subordinate legislation so made is anything other than there to fill in the details of the principal legislation. B.3.4 Emergency subordinate legislation 44. However, this is not so in relation to situation (e) described in Bennion. That situation deals with what we are concerned with in the present appeals, namely the situation of emergency or something akin to it. Indeed, the applicants seemed to accept that the CEIC can enact legislation to deal with emergencies through powers conferred by primary legislation.[33] It is recognised that in such situations, it is “essential” to give the executive “wide and flexible legislative powers” whether or not the legislature is sitting. Such situations must, we think, also include circumstances of public danger. 45. In this regard, the Court of Appeal was right to emphasise that under situation (e) concerning emergency (or public danger), the considerations are entirely different: “For scenario (e), the legislative approach can be different for a number of reasons. By nature, emergency or public danger is not capable of exhaustive definition, which means that usually a general or broad definition is used. It ordinarily requires an urgent and effective response to avoid an imminent threat, prevent a worsening of the situation or mitigate the effects of the emergency. The executive needs wide and flexible powers to deal with every and all exigencies expeditiously and effectually. It follows that emergency regulations which the primary legislation delegated to the executive to make are necessarily wide and extensive in scope. They may even by virtue of the so-called ‘Henry VIII Clauses’ dis-apply or amend a primary legislation. A ready example of adoption of such legislative approach is the English Civil Contingencies Act 2004. The editors of Wade and Forsyth on Administrative Law, (11th edn), at pp730 - 731 observe: ‘… [The] definition of an emergency in the 2004 Act is very wide. It comprises ‘serious threats’ to the welfare of any part of the population, the environment, the political, administrative or economic stability or, the security of the United Kingdom. There is no requirement that an emergency be declared, but Her Majesty may by Order in Council make emergency regulations for the purpose of preventing, controlling or mitigating an aspect or effect of the emergency if satisfied that an emergency is occurring or about to occur, that the regulations are necessary and the need is urgent. Practically anything may be required to be done, or prohibited, by the regulations. … The full plenary powers of Parliament have been given to the maker of the regulations for they ‘may make any provision of any kind that could be made by Act or Parliament’ including disapplying or modifying an Act.’”[34] 46. As Hogan CJ pointed out in Li Bun: “That it may be desirable for the sake of ‘peace, order and good government’ to have, on occasions of emergency or public danger, a delegated power to legislate speedily and effectively in order to meet any and every kind of problem is, I think, obvious. That such power should, as the Attorney General has argued, extend to all existing legislation seems equally apparent, since otherwise its capacity to make adequate provision for some unexpected danger or emergency might be hampered or limited by its inability to alter an existing Ordinance and that, possibly, at a time when the ordinary legislature could not, as a result of the emergency or state of public danger, be brought into session or meet.”[35] 47. This is not to say that the delegated power to make emergency regulations can be totally untrammelled and unguided, not subject to control by the legislature or the courts, or may ignore constitutional protection of fundamental rights. What it does mean, however, is that in deciding whether the ERO purports to delegate to the CEIC general primary legislative power (and is thus unconstitutional under the Basic Law), one must firmly bear in mind the subject matter concerned, namely occasions of emergency or public danger, which, by definition, require the delegation of “wide and flexible legislative powers” to the executive in order to meet them. B.3.5 Applicants’ criticisms of the ERO 48. The applicants submitted that when looked at as a whole, the ERO which confers the powers to “make any regulations whatsoever which [the CEIC] may consider desirable in the public interest”[36] must constitute an impermissible attempt to delegate general legislative power. The invoking of the Ordinance is left to the subjective, and therefore, potentially arbitrary, consideration of the CEIC. There are no definitions or guidelines for “emergency”, “public danger” or “public interest”. There is no safeguard against “authoritarian abuse” of the wide powers given under the Ordinance. There is no requirement for the CEIC to proclaim a state of emergency or public danger, or to specify what the occasion of emergency or public danger is. There is no mechanism to compel a review as to whether the state of affairs which gives rise to the public danger has subsided so as to revoke the regulations. There is no constraint on the duration of the regulations, nor is there any statutory mechanism to review the necessity or propriety of the regulations. The regulations made under the Ordinance take immediate effect when gazetted, and there is no minimum period before the regulations can take effect, or specified period before they must be placed before LegCo to be scrutinised. Furthermore, the regulations made under the Ordinance have primacy over all inconsistent legislation including primary legislation, and are capable of amending or suspending any primary legislation. Finally, it is also said that the regulations made under the Ordinance confer the widest powers of punishment. 49. We find these criticisms of the Ordinance to be more apparent than real. The power of the CEIC to make emergency regulations, as well as any regulations so made, are controlled and restrained by the internal requirements of the Ordinance, by the courts, by LegCo and by the Basic Law. B.3.6 Internal requirements of the ERO 50. The power to make emergency regulations can only be invoked if and when there exists an occasion which the CEIC considers to be one of emergency or public danger, as laid down in section 2(1) of the Ordinance. This imports a requirement of good faith on the part of the CEIC which is judicially reviewable in court. It also requires the CEIC’s conclusion that an occasion of emergency or public danger has arisen to be a reasonable one in the public law sense, such that it may withstand a challenge in court for Wednesbury unreasonableness. That there should be some leeway, or margin of discretion, accorded to the CEIC in determining whether an occasion of emergency or public danger exists is fully consistent with the very nature of the Ordinance, which requires the conferring of “wide and flexible powers” on the executive to deal with emergencies or public dangers of all kinds. 51. It is true that neither “emergency” nor “public danger” is defined. However, as the Court of Appeal has rightly pointed out,[37] by nature, emergency or public danger is not capable of exhaustive definition, and any definition that may be offered is bound to be general or broad. Whether a general or broad definition is used in the empowering Ordinance, or whether, as is the case here, the matter is left to the judgment of the CEIC, and if challenged, to the court, this cannot be determinative of the question of whether general legislative power is impermissibly sought to be delegated to the CEIC. 52. The same comments can be made in relation to the power given to the CEIC to make whatever regulations she may consider desirable in the public interest to make. There can be no real criticism of the wide scope of regulations that the CEIC may choose to make, since the regulations are, by definition, in response to an emergency or public danger, which, by nature, is not capable of specific or exhaustive definition in advance. Again, given that one is concerned with an emergency or public danger, the hands of the CEIC cannot be tied and there can be no real objection to the Ordinance giving the CEIC the power to make regulations which she may consider “desirable”. 53. As was pointed out by O’Regan J in Dawood, Shalabi and Thomas v Minister of Home Affairs and Others2000 (3) SA 936 (CC) at [53]: “Discretion plays a crucial role in any legal system. It permits abstract and general rules to be applied to specific and particular circumstances in a fair manner. The scope of discretionary powers may vary. At times, they will be broad, particularly where the factors relevant to a decision are so numerous and varied that it is inappropriate or impossible for the Legislature to identify them in advance. Discretionary powers may also be broadly formulated where the factors relevant to the exercise of the discretionary power are indisputably clear. A further situation may arise where the decision-maker is possessed of expertise relevant to the decisions to be made. …” (emphasis added) 54. Likewise, the fact that regulations made by the CEIC may take effect immediately only highlights the point that one is here not concerned with the making of ordinary subordinate legislation, but an empowering Ordinance to make regulations to deal with occasions of emergency or public danger, which may well require swift and urgent responses. B.3.7 Judicial control 55. All this is not to say that the power given to the CEIC is unrestrained and uncontrolled. The courts control the exercise of the power to make regulations on three bases. First, the CEIC has to consider that an occasion of emergency or public danger has arisen. This must be a bona fide conclusion which is not Wednesbury unreasonable. There can be no arbitrary exercise of the power. Secondly, no matter how desirable the CEIC may consider them to be, the regulations made must be for the purpose of dealing with the emergency or public danger in question, and for no other irrelevant purpose.[38] Thirdly, the regulations must be made “in the public interest”, subject to the margin of discretion accorded to the CEIC’s judgment of what is “desirable”. We disagree with the applicants’ contention that these facets do not amount to meaningful judicial control. 56. In a public law challenge, there is no question of the CEIC concealing the reasons for finding the existence of an occasion of emergency or public danger, or the considerations and justification for the regulations that are actually made. The applicants’ submission that the CEIC can hide behind the rule of confidentiality of the deliberations of the Executive Council and may refuse to disclose the reasons and considerations to the court is unreal. Indeed, in the present case, as one might expect, the CEIC has been anxious to explain to LegCo and the general public the reasons why she has considered it necessary to invoke the ERO and make the PFCR. B.3.8 LegCo control 57. Furthermore, LegCo retains full control of any regulations made under the ERO. The Ordinance empowers the CEIC to make “regulations”. Putting aside the debate over the nature of the regulations so made for the time being, “regulations” has the same meaning as subsidiary legislation and subordinate legislation,[39] and as such they are governed by Part V of IGCO. In particular, section 34 provides for the “negative vetting” of any regulations made under the ERO by LegCo. They are required to be laid on the table of LegCo at the next sitting thereof after the gazetting of the regulations.[40] LegCo may by resolution amend the regulations “in any manner whatsoever consistent with the power to make such subsidiary legislation”, and the regulations shall be deemed to be amended accordingly.[41] 58. We reject the applicants’ argument that section 34 has been excluded by a contrary intention[42] appearing in the ERO. 59. We also reject a further argument by the applicants that LegCo does not have any power, whether by negative vetting or otherwise, to amend or repeal any regulations made under the ERO – that only the CEIC has the power to do so. 60. Both these arguments were advanced on the basis of section 2(3) of the ERO which says that any regulations made under the Ordinance “shall continue in force until repealed by order of the [CEIC].” The applicants construed this to mean that only the CEIC has the power to amend or repeal any regulations made under the Ordinance. There is therefore no room, it was contended, for any negative vetting under section 34, nor even any amendment or repeal by LegCo under its general legislative power. 61. We see no justification whatsoever, on a purposive construction of section 2(3), for adopting such a narrow and restrictive interpretation. Nor was that the position of the Government in the past when regulations were made under the ERO or on this occasion in relation to the PFCR.[43] It should be remembered that the purpose of the ERO is to provide the CEIC with wide and flexible legislative powers in times of emergency or public danger in order to deal quickly and adequately with the situation in question. This is particularly so when, depending on what emergency or public danger is involved, LegCo may not be able to function and respond promptly enough or at all to the occasion of emergency or public danger in terms of passing the requisite legislation, and thus the need to delegate the legislative power to the CEIC to do so in the first place. Where, however, LegCo is in a position to sit and examine the situation,[44] and in particular to examine the regulations made by the CEIC under the ERO in response to an emergency or a public danger, and it is able to take a view on whether the regulations so made require amendment or should be repealed, there is no reason at all why LegCo should be deprived of the power to do so. On a purposive construction of section 2(3), there is simply no support for an interpretation that makes the CEIC the only body which can amend or repeal emergency regulations. 62. Indeed, the applicants’ interpretation would go directly against article 73(1) of the Basic Law which vests the legislative power of the HKSAR in LegCo to, amongst other things, amend or repeal laws. Section 2A(1) of IGCO, which specifically requires that all pre-1997 laws, of which the ERO is one, to be construed “with such modifications, adaptations, limitations and exceptions as may be necessary so as not to contravene the Basic Law”, operates to mandate the court to adopt a construction which does not contravene article 73(1). 63. In any event, there is simply nothing to stop LegCo from amending or even repealing section 2(3) of the ERO if (contrary to our view) it bears the meaning argued for by the applicants, so as to regain “control” over any regulations made by the CEIC under the ERO. 64. The fact that, in the Basic Law,[45] there are restrictions on the introduction of private bills to LegCo does not detract from the fact that LegCo itself retains the full legislative power to amend or repeal any regulations made under the ERO, and indeed the ERO itself. Any political or other difficulties in introducing a private bill to LegCo with a view to amending or repealing regulations made under the ERO do not affect the legal position as to whether LegCo has sought to delegate general legislative power to the CEIC under the ERO in contravention of the constitutional set-up laid down under the Basic Law. 65. In short, any regulations made under the ERO are subject to the scrutiny and control of LegCo, just like any other subsidiary legislation.[46] B.3.9 Duration and review 66. What we have said above in relation to judicial and legislative control also adequately deals with the point made by the applicant that the ERO is general and vague in that it does not provide for the duration of the regulations made, or any review mechanism regarding the necessity or propriety of the regulations. Quite to the contrary, LegCo retains full control over these matters, and, in any event, they are open to challenge in court.[47] The fact that some of the regulations made in the past under the ERO remained on the statute book for years[48] does not mean that LegCo did not at any stage have power to amend or repeal them or that they were not open to judicial challenge. Indeed, there was an occasion when regulations made under the ERO were debated in LegCo with a view to repealing them. The motion was however defeated.[49] As a matter of law and as a matter of past practice, the applicants’ argument that section 2(3) of the ERO only allows the CEIC to amend or repeal regulations made under the ERO is unsound. B.3.10 Constitutional control 67. Not only are the power to make regulations under the ERO and the regulations so made subject to legislative and judicial control, they are also subject to the Basic Law. We have already referred to article 73(1) which specifically provides that it is for LegCo to amend or repeal laws, and section 2A(1) of IGCO mandates the adoption of a compliant statutory construction. As explained, it is one of the reasons why we reject the applicants’ interpretation of section 2(3) of the ERO. 68. The points we now make are in relation to the protection of fundamental rights under the Basic Law. First, article 39 gives a constitutional guarantee of the provisions of the ICCPR as applied to Hong Kong and implemented by the HKBORO. Accordingly, any regulations made under the ERO that seek to restrict fundamental rights protected under the ICCPR and HKBORO are (as the Government accepts) subject to the constitutional control of the courts in terms of the dual requirements of “prescribed by law” and proportionality. 69. In other words, despite the apparently wide powers given to the CEIC under section 2(1) and (2) of the ERO to make regulations on a variety of matters, there can be no restriction of fundamental rights protected under the ICCPR and the HKBORO as guaranteed under article 39 of the Basic Law unless the regulations satisfy the prescribed by law requirement and proportionality analysis. 70. Secondly, section 5 of the HKBORO, which is based on article 4 of the ICCPR, provides for the derogation from the fundamental rights in the BOR (ICCPR) in times of public emergency subject to specified conditions. Given the constitutional guarantee of the ICCPR as implemented by the HKBORO under article 39, there is no question of construing the ERO to mean that LegCo has given the CEIC any power to make any regulations that are inconsistent with section 5 of the HKBORO, and indeed section 2A(1) of IGCO operates to mandate the adoption of a contrary construction.[50] 71. Thirdly, nothing in any regulations made under the ERO can restrict the rights guaranteed under the Basic Law itself, including the right of access to the courts,[51] unless the restriction can be justified. B.3.11 Sections 2(2)(g) and 2(4) of the ERO 72. The applicants argued that sections 2(2)(g) and 2(4) of the ERO give the regulations made by the CEIC a status not enjoyed by any other ordinary subsidiary legislation in that these regulations may amend any enactment, suspend the operation of any enactment and disapply any enactment with or without modification. The applicants argued that only primary legislation can have such effect. 73. We reject the argument for the simple reason that regulations made under the ERO have the described effect over other enactments because sections 2(2)(g) and 2(4) of the ERO, which is primary legislation, say so. In any event, as already mentioned, sections 2(2)(g) and 2(4) cannot and do not mean that regulations made under the ERO can override the HKBORO. B.3.12 Penalties 74. We do not see the power to impose punishment, including extremely heavy punishment, under the regulations made by the CEIC has any material bearing on the question under discussion. In any event, one must remember that the ERO concerns occasions of emergency or public danger. Maximum flexibility must be accorded to the CEIC to handle those occasions. B.3.13 The theme of continuity 75. For these reasons, we conclude that there is no impermissible delegation of general legislative power to the CEIC under the ERO, and we reject the impermissible delegation argument. In so doing, we have not found it necessary to labour the theme of continuity to which both the CFI and the Court of Appeal devoted substantial portions of their judgments,[52] save to observe that the ERO has been in our statute book for almost 100 years. It has been resorted to on many occasions before 1997. It has survived two constitutional challenges in the pre-1997 days. It has not been declared by the SCNPC to be in contravention of the Basic Law pursuant to article 160(1) of the Basic Law. There is nothing to suggest that the ERO was regarded as incongruent with the new constitutional order under the Basic Law during the drafting stage of the Basic Law. For the reasons we have given, we do not see the ERO as being incompatible with the post-1997 constitutional design under the Basic Law. In those circumstances, we do not find it necessary to dwell on the theme of continuity or to resort to it in rejecting the applicants’ impermissible delegation argument. 76. We can deal with the applicants’ remaining arguments challenging the constitutionality of the ERO very briefly. B.4 The principle of legality argument 77. First, the principle of legality argument. As argued before us in the written case,[53] this argument boils down to the general propositions that “[t]he common law has also gone a long way in protecting the separation of powers and imposing constitutional limits on both executive power and even the notion of Parliamentary sovereignty”,[54] and the common law thus “embodies the values and principles of the separation of powers and the rule of law, including the rule of the constitution and the courts’ role as the guardian of the constitution.”[55] The applicants therefore contended that “[t]hese values and principles cannot allow the legislature to confer an unfettered power such as the ERO on the Executive”.[56] 78. We need not comment on these propositions, save to say that they add nothing to the applicants’ impermissible delegation argument which, for the reasons we have given, is rejected. For the same reasons, we reject the present argument. B.5 The HKBORO section 5 argument 79. Secondly, the argument based on section 5 of the HKBORO, which was all but withdrawn at the hearing. In any event, it is a non-starter. As we have explained, the ERO and any regulations made thereunder must be read subject to section 5 of the HKBORO concerning derogation of fundamental rights protected under the BOR in times of public emergencies. Given the constitutional protection under article 39 of the Basic Law regarding the ICCPR as implemented by the HKBORO, section 2A(1) of IGCO requires the ERO to be construed in such a way as to be compatible with the Basic Law, and via article 39 of the Basic Law, section 5 of the HKBORO. The other side of the same coin is that there is no question of any implied repeal of the ERO for being inconsistent with section 5 by virtue of section 3(2)[57] of the HKBORO when the latter came into effect in 1991, which was the gist of the applicants’ argument based on section 5. We therefore reject the applicants’ argument. B.6 The prescribed by law argument 80. Thirdly, the prescribed by law argument. There is no dispute that any regulations made under the ERO which purport to restrict fundamental rights must pass the prescribed by law test as required by article 39(2) of the Basic Law. However, the applicants argued that the prescribed by law requirement is applicable not only to the regulations, but also to the ERO, it being a law which empowers the making of regulations that may restrict fundamental rights. 81. Both the CFI and the Court of Appeal were right in rejecting this argument on the ground that the prescribed by law requirement is not engaged.[58] Article 39(2) of the Basic Law provides that the rights and freedoms enjoyed by Hong Kong residents “shall not be restricted unless as prescribed by law”. The requirement is directed at actual restrictions on the rights and freedoms enjoyed by Hong Kong residents. It is not directed at empowering legislation such as the ERO which merely authorises the making of subsidiary legislation which, if and when made, may seek to restrict fundamental rights. Of course, we do not necessarily exclude the possibility of a situation arising where the empowering Ordinance and the subsidiary legislation made thereunder are so intertwined that it is unrealistic or artificial to separate the two. However, we are not faced with such a situation here. We also consider that the protection intended to be afforded by the prescribed by law requirement under article 39(2) is fully achievable by subjecting any regulations made under the ERO that seek to restrict fundamental rights to that requirement. 82. The applicants’ reliance on what this court said in Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at [29] [59] is misplaced. There the court was referring to a law which empowers a public official to exercise powers that may interfere with fundamental rights. It was not dealing with an empowering Ordinance which delegates to the CEIC power to make regulations which, if and when made, may affect rights. 83. Likewise, we find the applicants’ reference to what was said in the South African case of Affordable Medicines Trust and Others v Minister of Health and Others 2006 (3) SA 247 (CC) at [34] [60] to be unhelpful. The observations relied on were not directed at any prescribed by law requirement as such, but rather at the principle of legality under the South African Constitution,[61] which was the basis of the constitutional challenge in that case.[62] 84. In any event, there is no substance in the prescribed by law argument insofar as it relies on the same or similar points made under the impermissible delegation argument to say that the ERO is too general and vague to pass the prescribed by law test. For the reasons we have given, those points are rejected. B.7 Conclusion on the constitutional challenge to the ERO 85. In conclusion, we reject the applicants’ constitutional challenge to the ERO and now turn to address the proportionality issues. C. The Proportionality Issues (Ground 5A) 86. It was common ground both in this Court and below that, to the extent that the PFCR restricts any protected rights, the validity of any such restrictions will depend on the provision in question satisfying the four-step proportionality test laid down in Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372 at [134]-[135]. We shall address each of those steps in turn below but will begin by examining the evidence as to the circumstances said by the Government to justify the imposition of the PFCR in the first place. C.1 The evidence of deteriorating law and order 87. The PFCR was made by the CEIC because of a sudden and severe deterioration of law and order in Hong Kong arising from protests and social unrest in opposition to the Government’s proposal in February 2019 to enact the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill 2019 (“Fugitive Offenders Bill”). This bill was controversial and attracted opposition from many members of the public. Notwithstanding that opposition, the Government announced that it would seek to have the bill debated and passed by LegCo before the end of its session in July 2019. That announcement stimulated further protests and public processions on a massive scale which eventually persuaded the Government, in June 2019, to suspend the bill’s legislative process. On 9 July 2019, the Government acknowledged that the bill was “dead” and, on 4 September 2019, the Government announced that the bill would be formally withdrawn, which it was on 16 October 2019. 88. The Government adduced evidence from a police superintendent, the Principal Assistant Secretary for Security and a clinical psychologist to demonstrate the dire situation that had developed in Hong Kong in the period leading to the making of the PFCR and to explain the necessity for the regulation.[63] None of that evidence was challenged by the applicants. Nor was it disputed that, if the ERO was constitutional, there was a proper basis for the CEIC to form the opinion that there was an occasion of public danger. The unchallenged evidence paints a bleak picture of the degeneration of law and order in Hong Kong and the ever increasing violence and lawlessness, almost on a daily basis, that was becoming common on the streets of Hong Kong in the period up to 4 October 2019. A number of discrete features of that evidence need to be emphasised to put the discussion of the proportionality issues that follows into proper context. 89. The first point to emphasise is the scale and extent of the events disrupting public order. From 9 June 2019 to 4 October 2019, over 400 public order events arising from the Fugitive Offenders Bill were staged and led to a significant number of outbreaks of violence. These public order events took place in various parts of Hong Kong at frequent intervals every week and involved hundreds and thousands of participants. The violence involved escalated and included the following acts: repeatedly charging police cordon lines with weapons whilst wearing body armour; blocking roads, including scattering nails on roads; vandalising public facilities (including pavements, roadside fences and barriers, signs, dust bins, lamp posts, traffic lights, street lights and CCTV cameras) and Government buildings (including the LegCo Complex, Police Headquarters, Cheung Sha Wan Government Offices); setting fires at and near police stations and other public places; damaging private shopping malls, shops and restaurants; looting some of the damaged shops; damaging residential premises and harassing residents; attacking members of the public and police officers with weapons including high-powered laser pointers, slingshots, sharpened objects, bricks and inflammable liquids; throwing petrol bombs at police vehicles and police stations; damaging and obstructing the operation of critical infrastructure including Hong Kong International Airport, the Mass Transit Railway and the Cross-Harbour Tunnel; stopping motorists and extorting mobile phones or money by threatening to damage their vehicles. As at 4 October 2019, a total of 2,135 individuals had been arrested for taking part in public order events of an unlawful or criminal nature. 90. The second point to emphasise is the alarming breakdown of law and order and escalating violence on 29 September and 1 October 2019 in particular. The frequency of outbreaks of violent protests increased and the locations at which they took place also spread from one or two areas to become a phenomenon described colloquially as “blossoming everywhere”[64] in which multiple outbreaks of violence happened simultaneously on Hong Kong Island, in Kowloon and in the New Territories. On 29 September, violent protesters participated in unlawful assemblies on Hong Kong Island and blocked roads, vandalised various MTR stations, threw petrol bombs at police and started fires at multiple locations. On 1 October, there was further violence and widespread use of petrol bombs across various parts of Hong Kong. Whilst a total of 419 persons were arrested from 1 to 24 September 2019, on 29 September and 1 October 2019 alone 429 persons were arrested. The use of inflammable liquid bombs increased in frequency and extent, with around 100 thrown on 29 September and over 100 thrown on 1 October. The number of incidents of violence and vandalism was particularly acute on 1 October. On that date: 283 individuals were arrested and 123 were sent to hospital; in Tuen Mun, a police officer was injured by protesters throwing corrosive liquid on him, causing a third degree burn; police officers were attacked by large groups of protesters using a range of objects and potentially lethal weapons; 1,439 tear gas canisters or grenades had to be deployed (slightly less than half the number used from 9 June to 30 September 2019) and 6 live rounds, 919 rubber bullets and 192 bean bags were fired (more than the total of each of these respectively fired from 9 June to 30 September 2019) in attempts to disperse protesters and restore law and order. 91. The third point to emphasise is the phenomenon of the protesters’ use of what are described as “black bloc” tactics for concealing their identities and evading arrest and prosecution. These black bloc tactics include quick mobilisation via social media and involve groups of protesters wearing black clothing with little or no distinguishing features and covering the whole or most of their faces with gas masks, balaclavas, goggles, sunglasses or surgical masks in order to conceal their identities. The use of facial coverings has the additional feature of emboldening protesters to participate in increasingly violent acts and to abuse their anonymity by acting with a sense of impunity and an ability to evade police investigation. It also encourages their non-violent supporters to provide assistance including food and water, tools and weapons and transport. The concealment has hampered police investigation and hindered police work and its effectiveness. 92. The fourth point to note is the propensity for peaceful assemblies to degenerate into unlawful public gatherings and descend into violence. Whilst many public gatherings started lawfully, many degenerated into violence and unlawfulness. A major part of the reason why this happened was that violent protesters who were masked would “often mix themselves into a larger group of protestors (consisting of those who are taking part in a largely peaceful public meeting or procession), and instigate acts of violence or vandalism”.[65] From 9 June to 4 October 2019, out of a total of 103 public meetings or processions for which a Letter of No Objection had been issued by the police, 28 ended in violence. A public meeting or public procession which was taking place lawfully at first could turn into an unauthorised or unlawful assembly quickly with protesters deviating from the original location or route approved by the police and radical protesters then resorting to violence. For example: on 24 August 2019, a public procession in Kwun Tong for which a Letter of No Objection was issued by the police led to the obstruction of roads, damage to lamp posts and assaults on police officers; and on 21 September 2019, a public procession in Tuen Mun for which a Letter of No Objection was issued by the police degenerated at its conclusion with protesters vandalising Light Rail stops, placing objects on the tracks, blocking roads, setting fires and hurling petrol bombs, and eventually leading to the spread of violence to other areas in Yuen Long and a siege of the Mongkok Police Station. This trend of peaceful protests degenerating into violence continued after the PFCR was made. 93. The fifth point to emphasise is the trend of an increasing number of young persons and students taking part in unlawful assemblies and riots as well as engaging in unlawful or criminal acts of violence and vandalism. Of the total number of persons arrested as at 4 October 2019, 30.7 per cent were students and 10.4 per cent were aged under 18. These figures show a steady increase in the number of young persons and students arrested from the beginning of September 2019. 94. The sixth point to emphasise is the extent to which innocent bystanders (including motorists) and law-abiding passersby were subjected to violent reprisals by some protesters if they sought to voice opposition to the damage or inconvenience that the protesters were causing. Even peaceful protesters were attacked and assaults were committed against people with different views to those perpetrating the violence. For example, as will be seen below: one person was set on fire and another killed when struck by a hard object thrown by protesters. Many ordinary and innocent people as well as businesses were adversely affected if not actually harmed. As mentioned in a speech made by the Chief Executive on 4 October 2019 at a press conference “treatment of people with different views have gone from yelling and beating in the earlier days to vigilantism”.[66] In addition, looting and thefts from shops and other premises that had been damaged caused loss to operators of businesses and shop owners. 95. The seventh point to emphasise is that the evidence filed by the Government following the CFI Judgment,[67] also unchallenged, shows the continued deterioration of the situation during October and November 2019, despite the making of the PFCR. The following is a selective list of some of those events. (1) On 5 October 2019, violent masked protesters caused extensive damage to the MTR system leading to its first ever network-wide shut down. (2) On 13 October 2019, masked protesters vandalised LegCo and threw objects onto the tracks of the MTR at Sha Tin station and damaged the Light Rail tracks, leading to a closure of the entire Light Rail network and a number of MTR stations in the afternoon. A masked protester slashed a police officer’s neck with a blade and another assaulted an officer and tried to snatch his equipment. (3) On 20 October 2019, despite a Letter of Objection from the police, protesters staged a procession in Tsim Sha Tsui and blocked roads and attacked various police stations, government facilities, MTR stations and certain banks and shops, committing various acts of arson. (4) On the night of 31 October 2019, there was an unauthorised assembly in Mong Kok with protesters blocking roads, building barricades and throwing petrol bombs. (5) On 3 November 2019, masked protesters vandalised MTR facilities and shopping malls, during which a District Council member had part of his ear bitten off. (6) On 11 November 2019, a student was shot by a police officer during an incident in which the police officer had been attacked. Also on that date, during a confrontation between different groups of protesters at Ma On Shan, a 57-year old man was doused in flammable liquid and set on fire by a masked protester, resulting in severe burns to nearly 30 per cent of his body. (7) On 11 and 12 November 2019, after protesters had hurled objects from a footbridge onto the Tolo Highway, there were various serious confrontations and clashes between police officers and protesters at the Chinese University of Hong Kong which included the use of bricks, bows and arrows and petrol bombs. (8) On 13 and 14 November 2019, the blocking of roads, vandalism and attacks continued. An employee of the Food and Environmental Hygiene Department was struck on the head by a hard object thrown by masked rioters and subsequently died of his injuries. For safety, all schools in Hong Kong were suspended from 14 to 19 November 2019. (9) The violence continued on 17 to 18 November 2019 with the occupation of the roads around the campus of the Hong Kong Polytechnic University by violent protesters. A member of the Force Media Liaison Cadre was hit in the calf by an arrow. Other violent protests also occurred on the same date elsewhere in Hong Kong and included an incident in which rioters attacked police who had arrested a woman for taking part in an unlawful assembly and removed her from police custody. 96. As it was put in the evidence of the Principal Assistant Secretary for Security: “… the further escalation of violence and vandalism especially since the week of 11 November 2019 can simply be summed up by (1) the more frequent appearances of increasingly aggressive assaults and attacks (even including setting a person on fire as well as throwing of hard objects at persons resulting in severe injury or even death), (2) the more extensive road blockage with dangerous items placed on vehicular passageways and railway tracks or even petrol bombs and hard objects hurled at moving vehicles, not only causing severe disruption to public transport but also a genuine safety concern to motorists and passengers of the MTR, and (3) the growth in the severity of clashes and confrontations between police officers and protestors/rioters, resulting in even more damage to public properties and facilities and the need for the use of force. All of the above were carried out by persons wearing facial coverings that prevented identification.”[68] 97. The eighth point to emphasise is the increasing number of persons arrested and the increasing need to use appropriate force for dispersal and to curb violent acts. At the same time, the use of facial coverings hampered the effectiveness of the police use of tear gas as a crowd dispersal tactic. (1) Between 5 October and 14 November 2019, 2,184 persons were arrested (compared to 2,137 in the period between 9 June and 4 October 2019). In the week of 8 November 2019 alone, 582 persons were arrested and, between 15 and 17 November 2019, 154 persons provisionally arrested for offences relating to public order events. (2) Between 9 June and 4 October 2019, tear gas was used 5,501 times in violent public order events occurring on 28 days. In contrast, between 5 October and 17 November 2019, tear gas was used 4,522 times in violent public order events occurring on 22 days. On 12 November 2019 alone, tear gas was used 1,500 times and about 1,300 rubber bullets were fired. On 11 and 17 November 2019, 3 and 4 live rounds were respectively fired. C.2 Application of the proportionality test 98. The starting point of the proportionality test is the prerequisite of identifying the constitutional right engaged and to determine whether the provision under challenge restricts any such right: Catholic Diocese of Hong Kong v Secretary for Justice (2011) 14 HKCFAR 754 at [65]; Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950 at [39]. 99. In the present case, the PFCR makes the wearing, at particular types of public gatherings, of facial coverings likely to prevent identification an offence punishable by a fine and imprisonment. It is not disputed that the restrictions in the PFCR affect the enjoyment of (i) the freedom of assembly, procession and demonstration under Article 17 of the BOR[69] and Article 27 of the Basic Law,[70] (ii) the freedom of speech and expression under Article 16 of the BOR[71] and Article 27 of the Basic Law, and (iii) the right to privacy under Article 14 of the BOR.[72] The extent to which these rights are affected by a ban on facial coverings is further discussed below.[73] 100. None of these rights is absolute but may be subject to lawful restrictions. As will be apparent from its wording, the freedom of assembly, procession and demonstration under Article 17 of the BOR is not absolute but is subject to lawful restrictions including the interests of public safety, public order and the protection of the rights and freedoms of others. The freedom of speech and expression is similarly subject to lawful restrictions by reason of Article 16(3) of the BOR.[74] The right to privacy under Article 14 of the BOR is likewise not absolute, being a protection against arbitrary or unlawful interference. 101. It is in this context that we shall now examine the PFCR by reference to the four steps of the proportionality test. Since the Government accepts that section 3 of the PFCR restricts the protected rights identified, it is necessary to assess whether the interference with such rights is proportionate. However, it is relevant to note at the outset of this discussion that, on the footing that the ERO itself is constitutional, the applicants do not seek to challenge the lawfulness of the prohibition in section 3(1)(a) of the PFCR on the use of a facial covering likely to prevent identification at an unlawful assembly. They accept that this is rationally connected to the legitimate aim of the PFCR and is proportionate as being no more than necessary and strikes a fair balance between an individual’s rights and the societal benefits served by the restriction. C.3 Step One – Legitimate aim 102. It is the Government’s case that the PFCR has a two-fold aim: (1) the deterrence and elimination of the emboldening effect for those who may otherwise, with the advantage of facial covering, break the law; and (2) the facilitation of law enforcement, investigation and prosecution. These aims were found by the courts below to be legitimate aims: CFI Judgment at [130] and CA Judgment at [165] and [170]-[171]. 103. The evidence of the background leading to the making of the PFCR is set out in Section C.1 above. In the light of that evidence, the aims of the Government in making the PFCR are undeniably legitimate. Indeed, no party to these appeals has sought to suggest otherwise. The escalating violence and continued lawlessness arising from the ongoing protests made it essential to take some action to prevent, deter[75] and stop the violence in the first place or at least to assist the police to detect and apprehend those persons breaking the law.[76] That action had become necessary to restore stability and maintain law and order in Hong Kong. The applicants’ acceptance that section 3(1)(a) is a proportionate, and therefore lawful, restriction on any of the rights engaged incorporates an acceptance that that provision in question pursues a legitimate aim. But there is no suggestion that the restrictions in sections 3(1)(b), 3(1)(c) and 3(1)(d) on the use of facial coverings likely to prevent identification at those other public events do not also pursue the same legitimate aims. C.4 Step Two – Rational connection 104. The rational connection between (i) section 3 of the PFCR and the aim of deterring those wearing facial coverings from breaking the law and eliminating the emboldening effect of, and consequent propensity to break the law arising from, the anonymity provided by facial coverings was analysed in the CFI Judgment at [133], and (ii) between section 3 of the PFCR and the aim of facilitating law enforcement, investigation and prosecution at [134]. At [146] of the CFI Judgment, their Lordships concluded that the measure adopted in section 3 of the PFCR was rationally connected to the two legitimate aims identified by the Government. This conclusion was not challenged on appeal to the Court of Appeal: CA Judgment at [170]. Nor has that conclusion been challenged in this Court. 105. As in relation to the first step of the proportionality test, therefore, it is unnecessary to deal at length on the question of whether the measures taken by section 3 of the PFCR are rationally connected to the legitimate aims identified by the Government. That such rational connection is established is plainly made out. As their Lordships rightly pointed out (at [135] of the CFI Judgment), whether a measure is rationally connected to an identified aim is largely “a matter of logic and common sense”. Leaving aside the scope of the ban, which will be addressed below, by prohibiting the use of facial coverings at public events the Government would self-evidently directly address both unlawful behaviour itself and the emboldening effect the wearing of masks has on both violent and peaceful protesters alike. It would also obviously assist in the identification of those who nevertheless do break the law and facilitate their apprehension and prosecution. C.5 Proportionality 106. As was the case in the courts below, the focus of the argument on the constitutionality of the PFCR has been on the third and fourth steps of the proportionality test. The scope of that argument is also narrower in this Court since the Government has not appealed against the decision of the Court of First Instance, upheld by the Court of Appeal, that section 5 of the PFCR, concerning the power of a police officer to require a person using a facial covering in a public place to remove the facial covering, is a disproportionate restriction of the protected rights in question. The absence of an appeal against this holding is understandable since the Court of Appeal accepted that existing powers in the Public Order Ordinance (Cap. 245) (“POO”) and Police Force Ordinance (Cap. 232) to demand proof of identity are sufficient.[77] The focus in this Court is therefore solely on section 3 of the PFCR and, as has already been stated, both the applicants and the Government appeal against the Court of Appeal’s judgment. The applicants appeal against the Court of Appeal’s holding that section 3(1)(b) of the PFCR is proportionate and the Government in turn appeals against the Court of Appeal’s holding that sections 3(1)(c) and 3(1)(d) of the PFCR are not proportionate. C.5.1 The protected rights and their proper limits 107. The freedom of speech and the freedom of peaceful assembly are “precious and lie at the foundation of a democratic society”: Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at [1]. But it is important to stress that their cardinal importance hinges on their peaceful exercise. This has been stressed before. In HKSAR v Chow Nok Hang (2013) 16 HKCFAR 837, having referred to the permitted restrictions in Article 17 of the BOR, Ribeiro PJ held (at [38] and [39]) that: “38. Article 17 allows a line to be drawn between peaceful demonstrations (where, as noted above, full rein is given to freedom of expression) and conduct which disrupts or threatens to disrupt public order, as well as conduct which infringes the rights and freedoms of others. In Leung Kwok Hung, having recognized that the interests of ‘public order (ordre public)’ are listed by art. 17 as a legitimate purpose, the Court held that there is no doubt that such concept ‘includes public order in the law and order sense, that is, the maintenance of public order and the prevention of public disorder’. It concluded that a statutory scheme giving the Commissioner of Police discretion to regulate public processions with a view to maintaining public order was constitutionally valid after severance of certain objectionably vague words. 39. Once a demonstrator becomes involved in violence or the threat of violence – somewhat archaically referred to as a ‘breach of the peace’ – that demonstrator crosses the line separating constitutionally protected peaceful demonstration from unlawful activity which is subject to legal sanctions and constraints. The same applies where the demonstrator crosses the line by unlawfully interfering with the rights and freedoms of others.” We would note that the public disorder and violence displayed in Chow Nok Hang was far less significant or extensive compared with the facts in the present case. C.5.2 The ambit of section 3 of the PFCR 108. The legitimate aim of the PFCR is set out above. Section 3 of the PFCR prohibits the wearing of facial coverings likely to prevent identification at four categories of public gatherings defined by reference to the POO, being those types of public gatherings where public order issues might arise. These are: (a) an “unlawful assembly”, (b) an “unauthorized assembly”, (c) a “public meeting”, and (d) a “public procession”. 109. An “unlawful assembly” is defined in section 18(1) of the POO, which provides: “When 3 or more persons, assembled together, conduct themselves in a disorderly, intimidating, insulting or provocative manner intended or likely to cause any person reasonably to fear that the persons so assembled will commit a breach of the peace, or will by such conduct provoke other persons to commit a breach of the peace, they are an unlawful assembly.” 110. There being no challenge to the proportionality of section 3(1)(a) of the PFCR, it is unnecessary to consider this prohibition on the use of facial coverings at any length. All that need be said is that the acceptance by the applicants that this is a proportionate restriction of the protected rights in question is plainly correct. Once any public gathering has deteriorated to the point it is an unlawful assembly, the protected rights are no longer being exercised by those particular individuals who are behaving in the disorderly, intimidating, insulting or provocative manner as defined. In doing so, that person “crosses the line separating constitutionally protected peaceful demonstration from unlawful activity which is subject to legal sanctions and constraints”.[78] Requiring a person at such a gathering to do so without a facial covering is no more than reasonably necessary to achieve the two legitimate aims of preventing law breaking and assisting law enforcement. Equally, prohibiting a person present at an unlawful assembly, even if not taking part in it so as to attract prosecution under section 18(3) of the POO, from wearing a facial covering is no more than reasonably necessary to achieve the legitimate aims of avoiding the emboldening effect of anonymity from a facial covering and the consequent propensity to break the law, as well as assisting in law enforcement when the law has been broken. 111. It is the public events in sections 3(1)(b), 3(1)(c) and 3(1)(d) upon which it is necessary to focus in these appeals. 112. An “unauthorized assembly” is defined in section 17A(2) of the POO, which provides: “Where – (a) any public meeting or public procession takes place in contravention of section 7 or 13; (b) 3 or more persons taking part in or forming part of a public gathering refuse or wilfully neglect to obey an order given or issued under section 6; or (c) 3 or more persons taking part in or forming part of a public meeting, public procession or public gathering, or other meeting, procession or gathering of persons refuse or wilfully neglect to obey an order given or issued under section 17(3), the public meeting, public procession or public gathering, or other meeting, procession or gathering of persons, as the case may be, shall be an unauthorized assembly.” 113. A “public meeting” is defined in section 2(1) of the POO as being “any meeting held or to be held in a public place”, which “takes place under section 7(1)” of the POO and which is not an unlawful assembly or unauthorised assembly. Section 7(1) of the POO regulates public meetings and permits a public meeting to take place if the Commissioner of Police has been notified of the intention to hold the meeting and has not prohibited it. In practice, this is indicated by a Letter of No Objection issued on behalf of the Commissioner of Police. Section 7 of the POO does not apply to a meeting of not more than 50 persons and so, by definition, a public meeting will involve more than that number of persons. 114. A “public procession” is defined in section 2(1) of the POO as being “any procession in, to or from a public place”, which “takes place under section 13(1)” of the POO and which is not an unlawful assembly or unauthorised assembly. Section 13(1) of the POO regulates public processions and permits a public procession to take place if the Commissioner of Police has been notified of the intention to hold the procession and has not prohibited it. Again, this is indicated in practice by a Letter of No Objection issued on behalf of the Commissioner of Police. Section 13 of the POO does not apply to a procession of a public procession of not more than 30 persons and so, by definition, a public procession will involve more than that number of persons. 115. It can be seen, therefore, that a common factor in the events that are the target of the disputed provisions of section 3 of the PFCR (sections 3(1)(b), 3(1)(c) and 3(1)(d)) is that they are all gatherings, public meetings or public processions of which (i) the Commissioner of Police is aware and to which he has not objected, or (ii) which are in contravention of the statutory conditions (in section 7 or 13 of the POO) or involve some refusal or wilful neglect by 3 or more persons to obey an order issued by the police (under section 6 or 17(3) of the POO) thus making the gathering, public meeting or public procession an unauthorised assembly. The distinction between an unauthorised assembly in section 3(1)(b) and a public meeting or public procession in sections 3(1)(c) and 3(1)(d) is that, in the case of the former, some breach of condition will have already occurred, whereas in the case of the latter, the public meeting or public procession will be taking place in accordance with any conditions duly imposed by the police under the POO. C.5.3 Are sections 3(1)(b), 3(1)(c) and 3(1)(d) proportionate? 116. The applicants contended that the Court of Appeal’s decision that section 3(1)(b) is a proportionate restriction on the rights in question was wrong for two principal reasons. Their arguments can be summarised thus: (1) First, it was contended that the prohibition in section 3(1)(b) is too wide because an outbreak of isolated violence, or a breach of a relevant condition by as few as three persons causing the assembly to become unauthorised (pursuant to section 17A(2) of the POO), does not deprive a peaceful demonstration as a whole of its essential characteristic as such. The demonstration remains essentially peaceful and is an exercise of the freedom of peaceful assembly. In other words, the rights of peaceful protesters are disproportionately undermined. (2) Secondly, it was contended that casting the scope of the prohibition in section 3 by reference to persons “at” an unlawful assembly is too wide because it catches an innocent bystander or passerby who may not be participating in the public gathering that has become an unauthorised assembly. 117. These contentions applied, so argued the applicants, all the more so to the prohibitions on facial coverings in sections 3(1)(c) and 3(1)(d) because, by definition, these are public meetings or public processions which are wholly peaceful and, by definition, in compliance with any conditions duly imposed by the police. Accordingly, it was contended, the courts below were right to conclude that these prohibitions were disproportionate and therefore unconstitutional. 118. There is support for the proposition that a peaceful demonstration does not lose its character as such simply because of an outbreak of isolated violence. In relation to Article 11 of the European Convention on Human Rights (paragraphs (1) and (2) of which are in substantially the same terms as Article 17 of the BOR), the European Court of Human Rights (“ECtHR”) has held: “… an individual does not cease to enjoy the right to freedom of peaceful assembly as a result of sporadic violence or other punishable acts committed by others in the course of the demonstration if the individual in question remains peaceful in his or her own intentions or behaviour. The possibility of persons with violent intentions, not members of the organising association, joining the demonstration cannot as such take away that right. Even if there is a real risk that a public demonstration might result in disorder as a result of developments outside the control of those organising it, such a demonstration does not as such fall outside the scope of art. 11(1), and any restriction placed thereon must be in conformity with the terms of para. (2) of that provision.”[79] 119. Similarly, United Nations Human Rights Committee’s General Comment No. 37,[80] observes (at [16]-[17]) that: “16. If the conduct of participants in an assembly is peaceful, the fact that certain domestic legal requirements pertaining to an assembly have not been met by its organizers or participants does not, on its own, place the participants outside the scope of the protection of article 21. … 17. … [I]solated acts of violence by some participants should not be attributed to others, to the organizers or to the assembly as such. Thus, some participants in an assembly may be covered by article 21, while others in the same assembly are not.” 120. It is undoubtedly correct that a peaceful demonstration does not lose its character as such because of an isolated outbreak of violence. The question is, however, inevitably one of degree and will be highly fact sensitive. The violence may come from the participants themselves, or from counter-demonstrators, or from members of the public aimed at the demonstrators. It may be entirely isolated and discrete. It may be readily contained without leading to the spread of violence. But it may not. 121. All that notwithstanding, the fundamental flaw in the applicants’ first contention (summarised at [116(1)] above) is that the legitimate aim to which the PFCR is directed is not limited just to public gatherings at which violence has already broken out or where an identified criminal offence under the POO has already occurred. As we have noted above (in Section C.3), the PFCR has a two-fold aim, both to deter violence and crime and to promote effective law enforcement. Inherent in these legitimate aims is the fact that, as the events of 2019 in Hong Kong show (see Section C.1 above), large demonstrations are fluid events which can be difficult to control and police. What may start as a peaceful demonstration may readily degenerate from a peaceful gathering into a serious public order incident involving hundreds or even thousands of people. The preventative and deterrent nature of the PFCR is therefore crucial. 122. In this regard, the summary of the evidence in Section C.1 above shows clearly that the Court of Appeal was entirely justified in referring to (CA Judgment at [228]): “… the worrying phenomenon recently witnessed in Hong Kong where the situations were often highly fluid (with peaceful demonstrations rapidly developed into unlawful riots with wanton and reckless violence causing serious damage to properties and even serious injuries to others). The evidence also shows that there were many instances where [sic] less radical protestors remaining at the scene to provide moral and actual support (in terms of shielding the identities of those violent protestors). Instead of condemnation of violent acts committed or the public disorder occasioned by the radical protestors, some other protestors provide assistance to the perpetuators of violent and destructive acts.” 123. At [237] of the CA Judgment, the Court of Appeal reached the view that the prohibition in section 3(1)(b) of the PFCR is no more than necessary to achieve the legitimate aims identified. The Court of Appeal recognised that the threat to law and order posed by the violence that gave rise to the need to make the PFCR arose not just from actual violence but also from the propensity for peaceful demonstrations to deteriorate into violence and the emboldening effect of the anonymity provided by facial coverings. The legitimate aim of the PFCR (see Section C.3 above) is not limited to the suppression of violence after it has broken out but is also preventative and intended to deter violence from developing out of the highly fluid and volatile situations that had been occurring in Hong Kong over a period of many months. 124. The Court of Appeal noted (CA Judgment at [168]) that the Court of First Instance agreed (CFI Judgment at [137]) with the Government’s contention that “many public assemblies or processions in the past months which took place lawfully and peacefully at the beginning turned into unauthorised or unlawful ones with some radical protesters resorting to violence”. As the Court of Appeal also noted (CA Judgment at [169]) there is not a “simple dichotomy between peaceful and violent protesters as people’s behaviour may change depending on the circumstances and the influence from others around them.” However, despite recognising this, as the Court of Appeal rightly observed, “the Judges [of the Court of First Instance] failed to have regard to the pre-emptive nature of the provisions” (CA Judgment at [211]). 125. We would therefore respectfully agree with the Court of Appeal that the ambit of section 3(1)(b) is not disproportionate. Given the legitimate aim of the prohibition on facial coverings, the application of that prohibition to situations within section 3(1)(b) is a proportionate means to achieve the legitimate aim in question. 126. But the reasoning in respect of section 3(1)(b) also appears to us to apply equally to sections 3(1)(c) and 3(1)(d). We reiterate that the preventative and deterrent nature of the PFCR is crucial and the need to prevent the deterioration of peaceful gatherings into violence is an integral part of the legitimate aim. As such, it is clearly proportionate for the PFCR to seek to prohibit the wearing of facial coverings – used to hide the identity of law breakers and having an emboldening effect leading to degeneration of peaceful protests into violence – whether at an unauthorised assembly, a public meeting or a public procession. 127. The Court of Appeal, however, thought otherwise. At CA Judgment [243], the Court of Appeal concluded that, so long as a public meeting or public procession proceeded in accordance with sections 7(1) and 13(1) of the POO, “there cannot be any serious public order or safety issues which warrant additional restrictions being placed on the same by way of prohibition to wear facial coverings”. They considered that, if the gathering was “hijacked” by violent protesters, there was “ample power on the part of the police under the POO regime to issue an order under section 17(3) including an order to stop and disperse. Disobedience to such an order would turn the meeting or procession into an unauthorized assembly.” 128. The Court of Appeal were unpersuaded by the Government’s argument based on the evidence that there was a propensity for demonstrations to become violent. Their reasoning (at CA Judgment [246]) was as follows: “… a peaceful demonstration would have already degenerated into an unauthorized assembly or unlawful assembly before actual violence begins. For those fluid situations where such degeneration occurs rapidly, there is still sufficient powers under the POO regime to regulate the same in a proportionate manner. Thus, we have highlighted that there are cases where a lawful assembly can become an unauthorized one without a section 17(3) order when violent or other reprehensible conducts on the part of some demonstrators pose serious and imminent risk to public order and safety which requires immediate actions on the part of the police. For those scenarios, an offence under section 17A(2)(a) and (3) can be committed without an order made under section 17(3).” 129. Two errors are apparent in this reasoning. First, it appears to ignore the previous acceptance (see the references at [123] and [124] above) that there is no simple dichotomy between peaceful and violent protesters and that it is important to give effect to the preventative and deterrent nature of the prohibition. Resort to police powers to order a dispersal when a fluid situation is deteriorating is too late and of little practical efficacy in the factual circumstances surrounding the making of the PFCR. 130. Secondly, it appears erroneously to limit the need for preventative measures to be taken to those situations in which an offence under section 17A(2)(a) or 17A(3) of the POO has been committed. The legitimate aim of the PFCR is not limited to the situation in which an offence under the POO has already been shown to be established. The PFCR is tied to categories of public gatherings under the POO but its scope is not determined by reference to offences under that ordinance. Given the clear and urgent need to address a serious situation of public danger, the prohibition on facial coverings in sections 3(1)(c) and 3(1)(d) does not go further than reasonably necessary to achieve the legitimate aim of the PFCR. The adoption of the POO definitions of public gatherings in the PFCR was simply a convenient way to limit the breadth of the prohibition on facial coverings, confining it to those situations where public order issues might arise, and it is not necessary to find an offence under POO before the prohibition can apply. As we have repeatedly stressed above, the PFCR is intended to be preventative and to dampen the emboldening effect of a facial covering. 131. We turn to the applicants’ second main contention (summarised at [116(2)] above), that section 3(1)(b), and also by extension sections 3(1)(c) and 3(1)(d), are disproportionately widely framed because they give rise to the possibility of innocent bystanders or passersby at these public gatherings being subject to criminal prosecution for wearing a facial covering. 132. This contention is somewhat artificial. If an innocent bystander or other passerby were to find themselves accidentally present at a public gathering caught by section 3 of the PFCR, it would be a matter of evidence in any given case to determine if they were “at” the relevant public gathering for the purposes of the PFCR. But if they were present there, wearing a mask for medical or other proper reasons, they would prima facie have a defence of reasonable excuse under section 4 of the PFCR. 133. The applicants also emphasised the nature of the rights they were asserting and drew attention to the United Nations Human Rights Committee’s General Comment No. 37 (supra) at [60] where the committee observed: “The wearing of face coverings or other disguises by assembly participants, such as hoods or masks, or taking other steps to participate anonymously may form part of the expressive element of a peaceful assembly or serve to counter reprisals or to protect privacy, including in the context of new surveillance technologies. The anonymity of participants should be allowed unless their conduct presents reasonable grounds for arrest, or there are other similarly compelling reasons, such as the fact that the face covering forms part of a symbol that is, exceptionally, restricted for the reasons referred to above … The use of disguises should not in itself be deemed to signify violent intent.” 134. That observation is to be read in context. The wearing of a facial covering, whilst it may be a legitimate form of expression or be used for reasons of privacy or a legitimate desire for anonymity, does not lie at the heart of the right to peaceful assembly. It is still possible to demonstrate peacefully without wearing a facial covering. Prior to the events of June to October 2019, Hong Kong did not have a tradition of demonstrations by persons wearing masks to conceal their identities. 135. The observation is also, of course, made in the context of a commentary on the right to peaceful assembly. The situation in Hong Kong in 2019 leading to the making of the PFCR was not one in which public assemblies were remaining peaceful. Similarly, nothing in Kudrevičius v Lithuania (supra) prohibits restrictions being imposed to prevent a recognised trend of violence breaking out in deteriorating public assemblies. That case did not involve the situation prevalent in Hong Kong at the time in question of non-violent protesters helping violent ones. Nor was the case decided in the context of a situation of public danger arising from continuing violence sustained over a period of four months. On the contrary, the reasoning of the ECtHR recognises that restrictions “on freedom of peaceful assembly in public places may serve to protect the rights of others with a view to preventing disorder …”.[81] This reasoning is consistent with what was said by the ECtHR in Austin v United Kingdom (2012) 55 E.H.R.R. 14, p.380 ([55]): “…In connection with Article 11 of the Convention, the Court has held that interferences with the right of freedom of assembly are in principle justified for the prevention of disorder or crime and for the protection of the rights and freedoms of others where demonstrators engage in acts of violence (see Giuliani and Gaggio v. Italy [GC], no. 23458/02, § 251, ECHR 2011). It has also held that, in certain well-defined circumstances, Articles 2 and 3 may imply positive obligations on the authorities to take preventive operational measures to protect individuals at risk of serious harm from the criminal acts of other individuals (Giuliani and Gaggio, cited above, § 244; P.F. and E.F. v. the United Kingdom, (dec.), no. 28326/09, § 36, 23 November 2010). When considering whether the domestic authorities have complied with such positive obligations, the Court has held that account must be taken of the difficulties involved in policing modern societies, the unpredictability of human conduct and the operational choices which must be made in terms of priorities and resources (Giuliani and Gaggio, cited above, § 245; P.F. and E.F. v. the United Kingdom, cited above, § 40).” In this context, it should also be noted that in the passage from General Comment No. 37 set out above it was said that the “anonymity of participants should be allowed unless … there are other similarly compelling reasons”. 136. In the context of what we have earlier referred to as the degeneration of law and order, and the ever increasing violence and lawlessness, the ban on facial coverings can be regarded as a relatively minor incursion into the relevant rights on which the applicants rely. As we have said, this does not lie at the heart of the right of peaceful assembly. 137. Mr Johannes Chan SC’s submission that the evidence showed that about 70% of all public gatherings for which Letters of No Objection had been issued by the police between June and October 2019 remained peaceful ignores the far more alarming statistic that about 30% of all such gatherings ended in violence. That is a high proportion of incidences of violence and not one which the law should require the public of Hong Kong to have to continue to endure. 138. That there might have been some other means of achieving a suitably defined set of circumstances in which to impose a prohibition on the wearing of facial coverings does not affect the conclusion that the PFCR is proportionate as no more than reasonably necessary. This Court has previously approved[82] the dictum of McLachlin J in RJR-MacDonald Inc v The Attorney General of Canada [1995] 3 SCR 199 at [160] that: “… the government must show that the measures at issue impair the right of free expression as little as reasonably possible in order to achieve the legislative objective. The impairment must be ‘minimal’, that is, the law must be carefully tailored so that rights are impaired no more than necessary. The tailoring process seldom admits of perfection and the courts must accord some leeway to the legislator. If the law falls within a range of reasonable alternatives, the courts will not find it overbroad merely because they can conceive of an alternative which might better tailor objective to infringement ... On the other hand, if the government fails to explain why a significantly less intrusive and equally effective measure was not chosen, the law may fail.” 139. In his oral submissions, Mr Chan did not address a number of submissions on proportionality that had been included in the applicants’ written case.[83] We do not propose to deal with them at any length. None of them, either singly or in combination, provides a sound basis for concluding that the prohibition in section 3 of the PFCR is disproportionate. 140. Having reached this conclusion on the basis addressed by the Court of Appeal, namely that the standard of review is the “no more than necessary” standard, it is unnecessary to address the Government’s contention that the applicable standard should be some other standard on the relevant spectrum between “no more than necessary” and “manifestly without reasonable foundation”. 141. It is also not necessary to address the applicants’ contention regarding the meaning of the word “at” in section 3 of the PFCR, namely that the words “at an unauthorised assembly” in section 3(1)(b) imported the same requirements as section 17A(3)(b) of the POO. On its face, the preposition “at” means a temporal spatial proximity to the public gathering in question. If a bystander or passerby gets caught up in a demonstration to which the PFCR applies, they may have a defence of reasonable excuse or lawful authority under section 4. If they are not participating and their presence is wholly fortuitous, then it is likely that defence will be made out. It is not necessary to define “at” in terms of “taking part in” an unauthorised assembly because, as we have already explained above, it is not necessary for there to be an existing public order offence under the POO for the PFCR to apply. In any event, this question is not engaged on the facts of the present case. It is preferable to address it when it arises on the facts. C.5.4 Supervening events not relevant 142. A discrete point that calls for comment arises from the current requirement under the Prevention and Control of Disease (Wearing of Mask) Regulation (Cap. 599I). This regulation, made under section 8 of the Prevention and Control of Disease Ordinance (Cap. 599), was introduced on 15 July 2020 as part of a raft of measures introduced by the CEIC to combat the pandemic caused by COVID-19 this year. 143. The fact that almost every person in Hong Kong is therefore now wearing a mask in public does not affect the decision on the proportionality of the PFCR and is wholly irrelevant to these appeals. The proportionality of the PFCR has to be judged by reference to the circumstances pertaining in October 2019 when the prohibition on facial coverings was made. It is irrelevant to that question that subsequent events have changed the legal context. Whilst the Court may certainly take judicial notice of the fact that there have not been the same number of public demonstrations, the reason for this is not in evidence before the Court. In any event, there is no evidence before the Court as to what effect the ongoing mandatory mask wearing rule has had on the behaviour of persons participating in the various public gatherings specified in the PFCR. It has not been determined by the CEIC that the time has come to revoke the PFCR, nor has any application been made for an order of mandamus to that end. Whether or not the time has come when it can safely be assumed that peaceful assemblies in Hong Kong will not be liable to be affected by violence or by black bloc tactics is simply not a matter that has been debated before the Court in these appeals. C.6 Whether a fair balance has been struck 144. This Court held in Hysan Development Co Ltd v Town Planning Board (supra) that a fourth step should be adopted in the proportionality analysis. This requires that: “… where an encroaching measure has passed the three-step test, the analysis should incorporate a fourth step asking whether a reasonable balance has been struck between the societal benefits of the encroachment and the inroads made into the constitutionally protected rights of the individual, asking in particular whether pursuit of the societal interest results in an unacceptably harsh burden on the individual.”[84] This requires the Court to take an overall balanced view.[85] Without such a step: “… the proportionality assessment would be confined to gauging the incursion in relation to its aim. The balancing of societal and individual interests against each other which lies at the heart of any system for the protection of human rights would not be addressed.”[86] 145. As Ribeiro PJ noted in Hysan at [73], in the great majority of cases, the application of the fourth step would not invalidate a restriction which has satisfied the requirements of the first three stages of the inquiry. The PFCR is not an exception to that general rule. As we have already noted, in the present case, the Government did not decide to address the legitimate aim to deter violence and crime and to promote effective law enforcement by casting the net of the prohibition on facial coverings as widely as possible. Instead, the prohibition was tailored to the specific public gatherings listed in section 3 of the PFCR. They are all events of which the police will be aware. In the case of sections 3(1)(a) and 3(1)(b), the police will likely have been dealing with them because of reports of unlawful activity. And in the case of sections 3(1)(c) and 3(1)(d), the police will have been notified of the intention to hold the public meeting or public procession and will have issued a Letter of No Objection. 146. Relevant to the fourth step in the present case is the fact that the PFCR was made to address an ongoing situation of violence and unlawfulness that had existed over a period of months and had led to the CEIC to conclude that there was an occasion of public danger under the ERO. The situation on the streets and in other public places in Hong Kong had become dire. Members of the public were fearful of going out to certain places and significant inconvenience was caused to the public at large by the blockage of roads and closure of public transport facilities. There is a clear societal benefit in the PFCR when weighed against the limited extent of the encroachment on the protected rights in question. As Mr Benjamin Yu SC submitted, the PFCR affects a range of different people in Hong Kong. Although some people might wish to demonstrate in public but with a facial covering as a form of expression or for reasons of privacy, there were others who might wish to demonstrate peacefully but who were deterred from doing so because of the ongoing violence. The interests of that latter category should be given due weight in the balance. Similarly, due weight must be given to those persons who had sustained personal injury or property damage as a result of the actions of the violent protesters. And finally, the interests of Hong Kong as a whole should be taken into account since the rule of law itself was being undermined by the actions of masked lawbreakers who, with their identities concealed, were seemingly free to act with impunity. D. Conclusion and disposition 147. For the reasons set out above, we: (1) Dismiss the applicants’ appeals in FACV 6, 7 and 8 of 2020; and (2) Allow the Government’s appeal in FACV 9 of 2020. 148. We make an order nisi that the costs of the appeals be paid by the respective applicants to the Government. We further direct that any submissions that the parties may wish to make as to costs be submitted in writing within 14 days of the date of the handing down of this judgment and that, in default of such submissions, the order nisi stand as an order absolute without further direction. FACV 6 & 7/2020 Ms Gladys Li SC, Mr Johannes Chan SC (Hon), Mr Earl Deng, Mr Jeffrey Tam, Mr Geoffrey Yeung and Ms Allison Wong, instructed by Ho Tse Wai & Partners, for the 1st to 24th Applicants (Appellants) Mr Benjamin Yu SC, Mr Jenkin Suen SC, Mr Jimmy Ma and Mr Mike Lui, instructed by the Department of Justice, for the 1st to 2nd Respondents (Respondents) FACV 8/2020 Mr Hectar Pun SC, Mr Lee Siu Him and Mr Anson Wong Yu Yat, instructed by JCC Cheung & Co., assigned by the Director of Legal Aid, for the Applicant (Appellant) Mr Benjamin Yu SC, Mr Jenkin Suen SC, Mr Jimmy Ma and Mr Mike Lui, instructed by the Department of Justice, for the 1st to 2nd Respondents (Respondents) FACV 9/2020 Mr Benjamin Yu SC, Mr Jenkin Suen SC, Mr Jimmy Ma and Mr Mike Lui, instructed by the Department of Justice, for the 1st to 2nd Respondents (Appellants) Ms Gladys Li SC, Mr Johannes Chan SC (Hon), Mr Earl Deng, Mr Jeffrey Tam, Mr Geoffrey Yeung and Ms Allison Wong, instructed by Ho Tse Wai & Partners, for the 1st to 24th Applicants (Respondents) [1] (Cap. 241K), originally L.N. 119 of 2019. [2] (Cap. 241), originally Ordinance No. 5 of 1922. [3] It was stated in this Brief (at [3]) that “[t]he escalating illegal and violent acts of radical protesters are not only outrageous, they also push Hong Kong to a very dangerous situation”. [4] Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. [5] (Cap. 383) (“HKBORO”) setting out, in Part II, the Hong Kong Bill of Rights (“BOR”). [6] Regulations were made in the context of, amongst other things, the general strike and boycott which nearly ruined the economy between June 1925 and October 1926; the fear of subversion by prescribed organisations in 1927; the severe drought in 1929; the prevention and mitigation of cholera in 1932; the outbreak of World War II in 1939; the Chinese civil war in 1949; the banking crisis in 1965; the outbreak of the Cultural Revolution and riots in 1967; and the oil crisis in 1974: CA Judgment at [65]. [7] R v To Lam Sin (1952) 36 HKLR 1; R v Li Bun [1957] HKLR 89. [8] The Decision was made pursuant to art. 160(1) of the Basic Law which provides: “Upon the establishment of the Hong Kong Special Administrative Region, the laws previously in force in Hong Kong shall be adopted as laws of the Region except for those which the Standing Committee of the National People's Congress declares to be in contravention of this Law. If any laws are later discovered to be in contravention of this Law, they shall be amended or cease to have force in accordance with the procedure as prescribed by this Law.” [9] S. 2(2)(a). [10] S. 2(2)(b). [11] S. 2(2)(f). [12] S. 2(2)(h). [13] S. 2(2)(l). [14] S. 2(2)(n). [15] S. 3(1). [16] CFI Judgment at [48]. [17] CFI Judgment at [49]-[52]. [18] CFI Judgment at [53]-[96]. [19] CFI Judgment at [97]. [20] CA Judgment at [58]-[121]. [21] CA Judgment at [122]-[152]. [22] CA Judgment at [153]. [23] CFI Judgment at [98]-[125]; CA Judgment at [154], [283]-[352]. These were Grounds 2, 3 and 4 as set out earlier. [24] CA Judgment at [355]. [25] Case for the Applicants (FACV 6 & 7/2020) at [11]. [26] Basic Law, art. 43. [27] Basic Law, art. 60(1). [28] Case for the Applicants (FACV 6 & 7/2020) at [66]. [29] Supplemental Case for the Applicants (FACV 6 & 7/2020) at [21]-[26]. [30] IGCO, s. 28(1)(b). [31] Executive Council, Western Cape Legislature v President of the Republic of South Africa 1995 (4) SA 877 (CC) [205]. [32] (7th ed.) p. 68. [33] Case for the Applicants (FACV 6 & 7/2020) at [1] and [47]. [34] CA Judgment at [126]. [35] [1957] HKLR 89 at p. 101. [36] ERO, s. 2(1). [37] CA Judgment at [126]. [38] Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997. [39] IGCO, s. 3. [40] IGCO, s. 34(1). [41] IGCO, s. 34(2). [42] IGCO, s. 2(1). [43] The PFCR was subject to the negative vetting procedure: see [12] above. [44] Whether at the request of the CE pursuant to art. 72(5) of the Basic Law or otherwise. [45] Art. 74. [46] For the reasons given, we disagree with Li Bun insofar as it suggests (at p. 97), without detailed reasoning, that the negative vetting procedure has been displaced by s. 2(3) of the ERO. It is to be noted that the Full Court came to the opposite view in To Lam Sin (at p. 14). [47] Teh Cheng Poh v Public Prosecutor, Malaysia [1980] AC 458, 473F-474B. [48] See Norman Miners, The Use and Abuse of Emergency Powers by the Hong Kong Government (1996) 26 HKLJ 47. [49] CA Judgment at [67]. [50] See also the discussion of the HKBORO section 5 argument below. [51] Art. 35. [52] CFI Judgment at [82]-[93]; CA Judgment at [58]-[121]. [53] Case for the Applicants (FACV 6 & 7/2020) at [117]-[120]; no separate oral argument was presented at the hearing. [54] At [119]. [55] At [120]. [56] At [120]. [57] S. 3(2) provided: “All pre-existing legislation that does not admit of a construction consistent with [the HKBORO] is, to the extent of the inconsistency, repealed.” S. 3 of the HKBORO was not adopted as part of the laws of the HKSAR under the Decision of the SCNPC dated 23 February 1997. [58] CFI Judgment at [110]-[117]; CA Judgment at [305]-[331]. [59] “A law which confers discretionary powers on public officials, the exercise of which may interfere with fundamental rights, must give an adequate indication of the scope of the discretion.” [60] “However, the delegation must not be so broad or vague that the authority to whom the power is delegated is unable to determine the nature and the scope of the powers conferred. For this may well lead to the arbitrary exercise of the delegated power. Where broad discretionary powers are conferred, there must be some constraints on the exercise of such power so that those who are affected by the exercise of the broad discretionary powers will know what is relevant to the exercise of those powers or in what circumstances they are entitled to seek relief from an adverse decision. These constraints will generally appear from the provisions of the empowering statute as well as the policies and objectives of the empowering statute.” [61] The principle of legality was explained at [48]-[49]. [62] At [24]. [63] Affirmation of Cheung Tin Lok dated 18 October 2019; affidavit of Chui Shih Yen, Joceline dated 18 October 2019; and affidavit of Dr Tsui Pui Wang, Ephraem dated 23 October 2019. [64] This being a translation of the Chinese phrase: “遍地開花”. [65] Affirmation of Cheung Tin Lok at [22.2]. [66] The speech was delivered in Chinese and the words quoted are a translation of the following statement: “對於持不同意見的人士，往時是對罵、毆打，現在是用私刑解決”. [67] Second affidavit of Chui Shih Yen, Joceline dated 20 November 2019. [68] Second affidavit of Chui Shih Yen, Joceline dated 20 November 2019 at [19]. [69] BOR Article 17 reads: “The right of peaceful assembly shall be recognized. No restrictions may be placed on the exercise of this right other than those imposed in conformity with the law and which are necessary in a democratic society in the interests of national security or public safety, public order (ordre public), the protection of public health or morals or the protection of the rights and freedoms of others.” [70] Basic Law Article 27 reads: “Hong Kong residents shall have freedom of speech, of the press and of publication; freedom of association, of assembly, of procession and of demonstration; and the right and freedom to form and join trade unions, and to strike.” [71] BOR Article 16(2) reads: “Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice.” [72] BOR Article14(1) reads: “No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation.” [73] At [133] to [134] below. [74] BOR Article 16(3) reads: “The exercise of the rights provided for in paragraph (2) of this article carries with it special duties and responsibilities. It may therefore be subject to certain restrictions, but these shall only be such as are provided by law and are necessary – (a) for respect of the rights or reputations of others; or (b) for the protection of national security or of public order (ordre public), or of public health or morals.” [75] Deterrence was said to be the main objective of the PFCR: affirmation of Cheung Tin Lok at [22.1]. [76] The concealment of identity by facial coverings was said to be “a major impediment to law enforcement” and “a significant number of violent protestors [remained] at large”: affirmation of Cheung Tin Lok at [22.5], [22.8]. [77] CA Judgment at [269]-[272], [278]-[279]. [78] HKSAR v Chow Nok Hang (2013) 16 HKCFAR 837 at [39]. [79] Kudrevičius v Lithuania (2016) 62 E.H.R.R. 34, p.1107, at p.1128 ([94]). [80] CCPR/C/GC/37 (2020) on the right of peaceful assembly (article 21); referring to Article 21 of the ICCPR, which is given effect in Hong Kong via Article 17 of the BOR. [81] Kudrevičius v Lithuania (supra) at p.1142 ([157]). [82] See Official Receiver v Zhi Charles (2015) 18 HKCFAR 467 at [53]; Hysan Development Co Ltd v Town Planning Board (2016) 19 HKCFAR 372 at [85], [88]. [83] Case for the Applicants (FACV 6 & 7/2020) at [191]. [84] (2016) 19 HKCFAR 372 at [135]. [85] Kwok Cheuk Kin v Secretary for Constitutional and Mainland Affairs (2017) 20 HKCFAR 353 at [47]. [86] Ibid.