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CACV000157/1999
CACV 157/99
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 157 OF 1999
(ON APPEAL FROM HCAL 40 OF 1998)
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FRANCIS CHEUNG |
1st Applicant
(1st Appellant) |
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PANG KAM CHI, CAMMIE |
2nd Applicant
(2nd Appellant) |
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INSIDER DEALING TRIBUNAL |
Respondent |
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Coram: Hon. Nazareth, V.-P., Mayo and Leong, JJ.A. in Court
Date of hearing: 28 & 29 October 1999
Date of handing down judgment: 24 November 1999
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J U D G M E N T
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Leong, J.A.:
1. The appellants Mr. Francis Cheung and Ms Cammie Pang are two applicants in an application for judicial review before Keith, J. (as he then was) to set aside a decision of the Insider Dealing Tribunal. The application was refused. They now appeal against that decision.
2. The two appellants were two of six persons investigated in an inquiry conducted by the Insider Dealing Tribunal in April 1997. They were alleged to have involved in insider dealing in shares in a company called Chee Shing Holdings Limited. The Tribunal consisted of Mr. Justice Burrell as chairman and two members Mr. Wu and Mr. Chan who were accountants in private practice.
3. Mr. Wu and Mr. Cheung were members of the executive committee of the King's College Old Boys Association (KCOBA) and from the outset of the inquiry, this relationship was disclosed to all concerned in the inquiry and no objection was raised to Mr. Wu sitting as a member of the Tribunal in this inquiry.
4. The proceedings commenced on 17th November 1997. Evidence and submission were heard for 37 days concluding on 13th February 1998. The report was issued on 30th March 1998 finding Mr. Cheung and Ms Pang guilty of insider dealing. The question of penalty was adjourned to a hearing to be fixed.
5. On 12th February 1998 one day before the conclusion of the hearings, Mr. Wu met Mr. Siu at a bar. Mr. Siu was a former president of the KCOBA. What happened at this meeting is affirmed by Mr. Siu in his affidavit. According to his evidence, at this meeting, he asked Mr. Wu about the outcome of the inquiry. Mr. Wu told him he did not know what the other two members of the Tribunal were going to decide and if he were not sitting with them, he would not have found the allegations against Mr. Cheung substantiated and he would not have made any adverse findings of insider dealing against him.
6. On 19th March 1998, Mr. Siu and Mr. Wu met again and what happened at this meeting is also contained in an affidavit of Mr. Siu. According to Mr. Siu's evidence, Mr. Wu told him that Mr. Cheung lost the case because he had been found by the other two members of the Tribunal that he had 'probably' committed the matters alleged. Mr. Siu in his affidavit said this:
"... I said to Mr. John Wu that as he was one of the members of the Tribunal, he should have performed his own role as to the findings of the Tribunal. However, Mr. John Wu said that as the other two members of the Tribunal had already made up their minds to make adverse findings against Francis Cheung, there was no use or purpose for him to give dissenting views as in any event that would result in a decision of 2 against 1."
7. On 7th April 1998, a week after the report of the Tribunal had been issued, Mr. Wu met Mr. Cheung. When they met, Mr. Wu apologised to Mr. Cheung. What was their conversation is contained in the affirmation of Mr. Cheung. According to his evidence, Mr. Cheung told Mr. Wu he had received the report, Mr. Wu told him he could either object to the report or appeal. Mr. Wu apologized to Mr. Cheung about the contents of the report. Mr. Cheung told Mr. Wu he could not believe that the members of the Tribunal could have come to those findings because one of the witnesses called against him had admitted he had lied. According to Mr. Cheung's affirmation, Mr. Wu responded to say that the other two members, namely the Chairman and Mr. Chan had already made up their minds as to their decision. Mr. Wu said Mr. Chan had been very meticulous and had taken lots of notes on every witness. He said Mr. Chan had decided against Mr. Cheung almost on a 90:10 basis. Mr. Wu said the Report was drafted on a piecemeal basis which was given to him form time to time. He added that the chart attached to the Report was also drafted by Mr. Chan. Mr. Wu said that as Mr. Chan and the Chairman had already made up their minds on the outcome of the hearing, he saw no use or purpose in dissenting and did not bother to go against them both. Mr. Wu then told Mr. Cheung that if Mr. Cheung did not believe what he had said, he would send Mr. Cheung by fax the notes written by Mr. Chan but the letter head would have to be blanked out.
8. On 8th April 1998, Mr. Wu sent to Mr. Cheung copies of Mr. Chan's notes of comments on the evidence of the witnesses. Mr. Cheung informed his lawyer of this. Mr. Wu in his reply to a letter from counsel for the inquiry sent to him for his comment on the matter, denied that he had said that he had an opposite opinion with Mr. Chan and the Chairman. He said he totally agreed to the content of the Report and did not and would not make any objections to any part of the report and that he only passed copies of the notes of Mr. Chan to Mr. Cheung for his reference upon his request. He had never indicated that the decision making was only done by Mr. Chan and the Chairman and not done by him. He also said that the report issued was the proper findings of the Tribunal and he absolutely agreed to its contents.
9. It was on the basis of these facts that the appellants sought to quash the findings of the Tribunal by judicial review on the ground of Mr. Wu's conduct.
10. The preliminary question for decision is the admissibility of the evidence establishing these facts in the application for judicial review. The Judge below admitted the evidence de bene esse and after taking them into account, in the end rejected the claim for relief by the appellants. The question of admissibility of the evidence had not been decided.
11. Mr. Thomas, S.C. for the Financial Secretary submits that what happened fall into three different sets of facts:
1. Mr. Wu sending of the notes of Mr. Chan to Mr. Cheung after the report had been issued.
2. Mr. Wu speaking to Mr. Cheung and Mr. Siu before and after the report had been issued about the case on matters which should have been kept confidential.
3. Mr. Wu telling Mr. Cheung that although he did not agree with the other two members' view, he did not mention his dissenting view.
12. The first two sets, it is submitted, are matters of breach of confidence by a member of a statutory tribunal. The breach was not in relation to what went on in the tribunal or how the tribunal came to its decision. Such breach by itself would not render invalid the tribunal's decision. This was conceded by the appellants in the court below and the Judge there also came to the same conclusion. But the third set, it is submitted, is different. This is in relation to what went on in the mind of Mr. Wu and how the decision of the Tribunal came to its conclusion. Evidence in this regard is not admissible. It is not admissible because of the principle in the Duke of Bucceleuch v. Metropolitan Board of Works (1871) L.R. 5 H.L. 418 and because such evidence would necessarily be hearsay.
13. Mr. Thomas submits that evidence adduced to contradict the Tribunal's Report which on its face is both regular and unimpeachable should be excluded in a judicial review on the ground of public policy.
14. Mr. McCoy, S.C. for the appellants on the other hand submits the subject matter of judicial review is the decision making process itself and evidence of errors or misconduct by a member of the Tribunal relate to the decision making process, as opposed to the reasoning behind the decision and should not be rendered inadmissible on the ground of public policy. The evidence of what Mr. Wu did as a member of the Tribunal before and after the Report was issued was evidence of his misconduct including dereliction of duty in the decision making process and that should not be excluded.
15. The principle nearest to the question under consideration is that in the Duke of Bucceleuch case. There, in relation to how far an arbitrator could be examined as to his award, Clearsby B said:
"That questions might be properly put to him for the purpose of proving the proceedings before him, so as to arrive at what was the subject matter of adjudication when the proceedings closed and he was about to make his award. That as regards the effect of the award no questions could properly be put to the umpire for the purpose of proving how it was arrived at, or what items it included or what was the meaning which he intended at the time to be given to it."
16. In Re Whiteley and Roberts' Arbitration [1891] Ch 558, Kekewich J., citing the judgment of Lord Carins in Duke of Buccleuch, said this:
"Lord Cairns seems to me to sum up the law exactly. He says (1): 'It appears to me that upon every point which may be considered to be a matter of fact with reference to the making of the award, the evidence of the arbitrator or umpire was properly admissible. He was properly asked what had been the course which the argument before him had taken - what claims were made and what claims were admitted; so that we might be put in possession of the history of the litigation before the umpire up to the time when he proceeded to make his award. But there it appears to me the right of asking questions of the umpire ceased.' That I understand to mean that if you desire to prove that circumstances were brought before the umpire which ought not to have been brought before him, and matter of that kind, you may call the umpire and have the history of the litigation before him proved in the ordinary way by his evidence, he being the person best qualified to give it. He is a witness for that purpose; but beyond that you must not question him - you must not examine him as to the award. That does not exclude his evidence in a case like this, because here it is not a question of litigation before the umpire, it is not a question of what occurred in reference to the award or to the arbitration under which the award is founded; but the question is as to what took place before the award. The question is whether the arbitrator was bribed. Mr Whiteley can if so advised, call him to prove that, and no possible objection could be taken to his evidence on either side. That seems to me to show that, though there may be some difficulty in proving such a fact as this, there is no legal difficulty and that again, is a reason, it seems to me, why one should rely upon the ordinary rules, and say that, if a man come here to establish a case founded on an allegation of fraud, he must prove that fraud, otherwise his case fails."
17. It would appear that what Re Whiteley decided was evidence by others of the arbitrator's admission of misconduct such as taking bribe, was not admissible. But there could be no objection to the arbitrator himself giving evidence of taking bribe. Thus evidence of misconduct by an adjudicator in a dispute is not inadmissible provided that it is not hearsay.
18. In the New Zealand case of Zanatta v. McCleary [1976] NZLR230, Street, C.J. recognised that there was little authority in this regard. But in his judgment, immediately following his reference to Re Whiteley (at p.233), he said this:
"Whilst that case appears to go a very long way and might require critical examination if the point were to arise again, it is at least consistent with the general proposition that evidence is not admissible of subsequent statements made by a person who has adjudicated in a dispute, be he arbitrator or judge, tending to affect their rights of the parties under his adjudication. He being functus officio, this is but a basic rule of evidence. What the arbitrator of judge might say about the dispute, after fulfilling his function in regard to it is pure hearsay.
A judge does not fulfil a role comparable, for example to statutory tribunals of the character of those, which far from determining a dispute between the parties, exercise an original and direct administrative authority over an individual. In such a case the administrative authority is fairly to be regarded as the opposing partly to the individual, and subsequently statements made by it might be admissible in proceedings brought to examine the validity or effect of its decision. A judge is remote from the contest and from the parties and his subsequently statements implying error on his part or procedural irregularity have, in general, no evidentiary significance as between the parties themselves. If a question of alleged dereliction of duty on the part of the judge arose, the position might be different. But that is not this case, and I express no opinion in that regard. In a complaint of error such as is here advanced, the other litigant is not to have his rights questioned upon the basis of hearsay evidence such as a subsequent statement by the trial judge."
19. Later in his judgment at p.234, he said:
"But drawing upon such guidance as is to be derived from the authorities, I am of opinion that evidence cannot be adduced from a judge seeking to establish how his decision was reached, whether the line of inquiry be directed to the admissibility of the material before him to the process of reasoning which he adopted, to the weighing by him of extraneous irrelevancies or otherwise to matters underlying his adjudicative process. The correctness or regularity of proceedings before him is not examinable in the light of subjective evidence from the judge who heard the case. There are in my view strong considerations of public policy in denying to any party the freedom to elicit from a judge evidence of this character. Nor is it without significance that no such case can be found where such evidence has been tendered and admitted."
20. Street, C.J. seems to have drawn a distinction between a judge and an administrative tribunal and the principle seems to be that in the case of a tribunal and where the allegation was dereliction of duty by a judge, the general rule of the adjudicator's decision not being examinable would not apply. Samuel, J.A. in the same decision was of the opinion that extra curicular statements made by a Judge concerning a proceeding in which he has given judgment are not admissible if its purpose is to show the process of reasoning or the factors taken into account in coming to the decision. That would appear to be the limit of this principle and evidence relating to misconduct or dereliction of duty would be outside that limit.
21. Warren v. Warren [1997] QB 488 is another authority in which the principle in the Duke of Buccleuch case was referred to. Lord Woolf M.R. considered that "the justification for judges not being compellable identified by Clearsby B (in Duke of Buccleuch case) was still valid and he said that "the exception to the principle of compellability only applies to the Judge being required to give evidence of those matters of which he became aware relating to and as a result of his performance of his judicial functions. That means on collateral incidents."
22. How this principle may be applied depends on the nature of the evidence? What then is the nature of the evidence of Mr. Wu's conduct? Mr. Wu discussed the tribunal's decision with Mr. Cheung and sent a member's confidential notes on the evidence to Mr. Cheung. Mr. Wu admitted to Mr. Cheung that he did not participate in the decision making process. All this happened just before and then after the final day of hearing of the inquiry. This evidence is undoubtedly evidence of breach of confidence by Mr. Wu. And that might well be misconduct tending to show that Mr. Wu was not a fit and proper person to have sat as a member of the Tribunal in the Inquiry. Nevertheless, what Mr. Wu did was when the hearing had almost concluded and a decision had probably been made, albeit pending the issue of the report. The appellants had conceded before the Judge that breach of confidence of this nature was not sufficient to render the Tribunal's findings in valid. These circumstances are therefore wholly different from cases of the jury being unable to discharge their duty at the trial or indiscreet out of court conduct of the trial judge during a trial. I do not think Mr. Wu's conduct of breach of confidence, reprehensible as it might be, would have given rise to any procedural irregularity or unfairness as to render the Tribunal's findings invalid.
23. The next question is whether as member of a three member tribunal, Mr. Wu's non participation is dereliction of duty.
24. The Canadian case of IBM Canada Ltd. v. Deputy M.N.R., Customs and Excise [1992] 1 FC 663 decided that it is. The case involved the Tariff Board. By the powers and functions of the board are required to be exercised and performed by three or more members. All members of Board did not participate in the separately issued decisions. It was held by Court of Appeal that the members must at some point of time reach a decision collectively and each member must "participate" individually in that collective decision in agreeing with it or in dissenting in that collective decision in agreeing with it or in dissenting from it. There is to be a meeting of the minds, each member being informed at least in a general way of the point of view of each of his colleague.
25. Decary, J.A. said (at p. 672):
"While there appears to be no authority directly on the point in issue, a perusal of the jurisprudence that has examined questions related to quorum indicates that the courts have consistently insisted on the necessity for a decision making authority to strictly comply with quorum requirements at all times. A long series of cases have established a proposition which I would venture to formulate as follows: in setting a quorum and requiring that a minimum number of persons participate in a decision, Parliament reposes its faith in collective wisdom, does so for the benefit of the public as well as for the benefit of those who might be affected by the decision either as members of the majority or as dissenting members to act together up to the very last moment which is the making of one united, though not necessarily unanimous, decision. Having the proper quorum at all relevant times, from the beginning up to the very last moment is a question of principle, of public policy and of sound and fair administration of justice.
The nature, degree and form of this 'acting together' need not cannot and should not be defined. Tribunals have their own ways and their own rules. Members of a panel have their own personality and habits and cannot be expected to hold hands from the time a case is heard until the time as case is decided. What must be done, however, is that at some point in time the panel must reach a decision collectively and each member must participate individually in that collective decision in agreeing with it or in dissenting from it. This in my view, is what is meant by 'making the decision'. Counsel for the appellant rightly pointed out relying on the statement of Chief Justice Laskin in P.P.G. Industries Canada Ltd. v. A.G. of Canada that signature does not necessarily equate with participation. I would add, however, that the reverse is also true; non signature does not necessarily equate with non participation."
26. Coleridge, J. inLord v. Lord (1855) 119 E.R. 531 said (at p.532):
"It is now clearly established that every judicial act, to be done by two or more must be completed in the presence of all who do it; for those who are to be affected by it have a right in the united judgment of all up to the very last moment."
27. Cresswell, J. in Re Beck and Jackson (1857) 140 E.R. 286 also said that the duty of joint arbitrators must all act together. He said:
"They must each be present at every meeting and the witnesses and the parties must be examined in the present of them all for the parties are entitled to have recourse to the arguments, experience and judgment of each arbitrator at every stage of the proceedings brought to bear on the minds of his fellow judges, so that by conference they shall mutually assist each other in arriving together in a just decision."
28. Thus non participation by Mr. Wu in the Tribunal's decision must mean dereliction of duty. Evidence of non participation does not go to the reasoning process behind the Tribunal's findings. Such evidence if it were not hearsay would be admissible tending to show that the decision making process had not been carried out regularly and fairly.
29. The evidence of Mr. Wu's admission of non participation was found in the affirmation of Mr. Cheung. This is hearsay evidence if it adduced to prove that Mr. Wu's non participation. Mr. McCoy citing Re Chan Heung-mui [1993] 1 HKLR 126 submits that hearsay evidence can be admitted in judicial proceedings. Reliance is placed on R. v. Home Secretary ex p. Rahman [1998] QB 139. It is also submitted that because of the practical difficulty in calling Mr. Wu as a witness, who would necessarily be hostile to the appellants' case, it would be futile to call him.
30. Mr. Thomas on the other had submits that the facts in a judicial review must be supported by an affidavit or affirmation. The provisions of RHC Order 41 r 5(1) requires that an affidavit in support must contain on such facts as the deponent is able to prove by his own knowledge and no order under Order 38 r 3 has been made for proof of the facts based on statements of belief or information. Evidence of Mr. Wu's admissions being hearsay is inadmissible. Different considerations apply to cases of administrative decisions as in ex p. Rahman.
31. In ex p. Rahman, an illegal entrant from Bangladesh who claimed to be the son of a British citizen sought leave to apply for judicial review and a writ of habeas corpus against a removal order. The Secretary of State tendered in evidence affidavits of immigration officers who had conducted inquiries in Bangladesh as to the truth of the applicant's claim. One of the issues was whether such evidence was admissible.
32. Hobhouse, L.J. after quoting from speeches by Lord Scarman and Lord Templement in Ex parte Khawaja, said at page 176:
"The tenor of all these quotations which I have made from the speeches is an acceptance of evidence which does not necessarily meet the criteria of admissibility for a court conducting a trial. It is implicit that the court can take into account all relevant material making appropriate allowance of the weight which is to be attached to it which, of course does not exclude the view that a certain evidence should be disregarded if it is not worthy of any weight."
33. Later in his judgment, he said: "I consider that the relevant law is correctly encapsulated in the words of May, L.J. in Ahmad v. Secretary of State for the Home Department adopted by Glidewell, L.J. in R. v. Secretary of State for the Home Department, ex parte Patel [1986] Imm. A. R. 515 523:
"the role of the court in these cases is to consider all the available material and to decide for itself whether it has been satisfied by the Secretary of State that the applicant for habeas corpus or certiorari is an illegal entrant."
34. Hutchison, L.J. and Staughton, L.J. both agreed that the court is entitled to take into account all the evidence that was before Secretary of State in addition to any other evidence that was available to the court and it would be a question of how much weight should be given to the evidence if is hearsay.
35. Chan Heung-mui also decided that hearsay evidence, provided it can be fairly regarded as reliable and logically may also be taken into account in an application for judicial review and the question would then be what weight should be attached to it.
36. The emphasis in the IBM Canada case (at p. 678) that evidence is to be provided by affidavit to ensure that no one is hurt by allegations which one does not have a chance to challenge is not in consistent this principle.
37. In the present case Mr. Cheung's evidence on his affidavit is clearly relevant and probative of Mr. Wu's dereliction of duty by non participation in the decision making process. There was no evidence from Mr. Wu or otherwise to the contrary indicating that such evidence is not reliable.
38. I do not see any reason why such evidence is not admissible under the above principles. I would rule the evidence admissible.
Mayo, J.A.:
39. As a result of constraints of time a decision was made to utilise the limited time available to the resolution of a preliminary issue.
40. This issue was raised by Mr. Thomas, S.C. in his Respondent's Notice. It was whether the Judge had properly admitted the affidavit evidence of the Chairman of the Tribunal Mr. Siu and Mr. Cheung concerning the alleged irregularities or misconduct of Mr. Wu. Further to this was the nature of the evidence contained in the affidavits. Mr. Thomas contended that it was inadmissible by virtue of the fact that the affidavits contained hearsay evidence. A consequence of this was that there was no direct evidence concerning what Mr. Wu thought about the charges and whether in truth he was a dissentient.
41. Mr. Thomas conceded that there was evidence that Mr. Wu had sent a copy of Mr. Chan's notes to Mr. Cheung and that both before and after the issuance of the Report Mr. Wu had had conversations with Mr. Siu and Mr. Cheung concerning the Report. He accepted that this was reprehensible conduct and constituted a breach of confidence. However this fell short of misconduct such as to call into question the validity of the Report.
42. In this connection Mr. Thomas referred to the passage appearing at p.9 and p.10 of the judgment of Keith, J. (as he then was) in support of this contention:
"I do not wish to be judgmental, but there is little doubt that Mr. Wu was extremely unwise to discuss the case with persons other than the other two members of the Tribunal, and to disclose Mr. Chan's notes. I am sure that he would now recognise that it was wholly inappropriate for him to do that. In acting as he did, he was not simply being indiscreet. He was in breach of the duty which he owed to the other members of the Tribunal to keep the views expressed by them in the course of the Tribunal's deliberations private and confidential.
But should his conduct result in the quashing of the findings of the Tribunal relating to Mr. Cheung and Ms. Pang? Mr. Denis Chang S.C. for the Applicants does not contend that Mr. Wu's breach of the duty of confidentiality which he owed to the other members of the Tribunal would by itself be sufficient to result in the Tribunal's findings being quashed. In my view, that was the correct stance to take. ..."
43. This was of importance to the case being advanced by Mr. Thomas. His main authority in support of the contentions he was advancing that it would be contrary to public policy to admit any evidence concerning the deliberations of the Tribunal was the case of the Duke of Buccleuch v. Metropolitan Board of Works (1871) L.R. 5 H.L. 418. Mr. McCoy, S.C. for the Applicants generally accepted that this case was authority for the proposition that it was contrary to public policy to visit the deliberations of the members of the Tribunal. However he submitted that the case had no application to Judicial Reviews which by their nature were concerned with the lawfulness of the decision making process. Also he contended that where it appeared that there had been misconduct on the part of an adjudicator this did not come within the purview of the Duke of Buccleuch.
44. Having regard to the concession made by Mr. Chang it is essential to establish more than just sending the notes to Mr. Cheung and the admittedly indiscreet conversations with Mr. Siu and Mr. Cheung.
45. It is necessary to consider the contents of the various affidavits with some care. The approach adopted by the Judge, whether this was done de bene esse or as an integral part of the proceedings, was to consider in particular what was said by Mr. Siu and Mr. Cheung and then see how Mr. Wu responded to the allegations made. What was immediately evident was that although Mr. Wu had attempted to deny some of the allegations in a letter he had sent in response he had not condescended to go on oath. Also although he had had full knowledge of the allegations being made against him he had chosen to seek leave to withdraw from the proceedings at their commencement which had been granted.
46. In these circumstances the Judge decided to proceed upon the basis that the evidence contained in Mr. Siu and Mr. Cheung's affidavits had not been contested and that it was proper for him to consider it at its face value.
47. At this stage I consider it to be necessary to consider what is the nature of the allegations being made against Mr. Wu.
48. In my view they go far beyond indiscretions and breaches of confidence. If what Mr. Siu and Mr. Cheung say is true it appears that the relationship between Mr. Wu and Mr. Cheung was much closer than was represented at the beginning of the hearing when the parties were afforded an opportunity of objecting to Mr. Wu being a member of the Tribunal. Why otherwise would Mr. Wu be prepared to go to such lengths in an attempt to ingratiate himself with Mr. Siu and Mr. Cheung?
49. If it is true that Mr. Wu was really concerned about what Mr. Siu and Mr. Cheung thought about him this almost inevitably leads to a situation where there is a grave risk of bias or at least the appearance of it.
50. Over and above this Mr. Wu's conduct may well have amounted to criminality. The question which then arises is whether Mr. Wu was a fit and proper person to be performing the duties and responsibilities of a member of an important Tribunal of this nature.
51. While it is undoubtedly true that the findings of the Tribunal can be reached on the basis of a majority decision the Ordinance stipulates that the Tribunal shall be constituted by the chairman and two members.
52. In the absence of Mr. Wu giving truthful testimony we will never know whether he did in fact perform his duties as he was required to under the Ordinance. It seems that there was a considerable amount of speculation at the hearing below as to whether Mr. Wu had been telling the truth when he informed Mr. Siu and Mr. Cheung that it had been his view that Mr. Cheung had not been guilty as charged.
53. The evidence given by Burrell, J. could hardly assist on this. While undoubtedly the Judge was endeavouring to the best of his ability to assist there was no way that he would have known what was in Mr. Wu's mind and whether the opinions he was advancing were genuinely what he believed.
54. I have reluctantly come to the conclusion that Mr. Wu was on the evidence available probably guilty of serious misconduct.
55. I accept the validity of the submission made by Mr. McCoy that where a question of misconduct arises it is not protected by the principles propounded in the Duke of Buccleuch. This I think is supported by the passage on p. 436 of the report of the case.
"The acts of the arbitrators and not the hidden operations of their minds are the proper subject of inquiry. If the claim was made and received and evidence given upon it, this would be decisive of the jurisdiction exercised by the arbitrators, quite independent of any reservation in the minds of the arbitrators at the time. One cannot help asking what would be the effect, in such as a case, of the arbitrators giving different answers to the supposed question. It certainly strikes me very strongly that the state of the arbitrator's or Judge's mind is of no importance, except so far as it is embodied in some judicial act done by him. His mind may fluctuate and change more than once until the decision is delivered, and then, whether it be upon an interlocutory or final matter, the case is so far bound.
I wish to add that what has been said has reference only to such a proceeding as the present, and not to a proceeding of a different nature, viz., when an application is made (the submission having been made a rule of Court) to refer back the award, or set it aside on the ground of some mistake or misconception of the arbitrator so as to make it wrong that the award should stand. In the exercise of such a jurisdiction the Court to which the application was made would probably reject no means of informing itself whether the arbitrator had proceeded upon such a mistake or misconception. This was the nature of the application in the case In re Dare Valley Railway Company (Law Rep. 6 Eq. 429), where Vice-Chancellor Giffard thought a written statement by the arbitrator of his reasons admissible in considering whether the arbitrator had proceeded upon an erroneous view of his duties or not. The opinion given has reference only to an action at law upon the award, in which of course the rules of evidence must be attended to."
56. So far as the admissibility of hearsay evidence is concerned I also agree with Mr. McCoy that there is a relaxation of the usual principles in Judicial Review proceedings and Habeas Corpus cases. This is perhaps best illustrated by two passages from the judgment of Hutchison, L.J. in R. v. Home Secretary, ex parte Rahman [1998] Q.B. 136. The first passage appears on p. 166:
"I agree with Collins J. who cited most of the above passage and said, ante, p. 997G: 'It is perfectly plain, in my judgment ... that Lord Templeman was not suggesting ... that the material was not admissible. What he was indicating was that it was for the court to decide its weight.'
I need not cite a passage from the speech of Lord Scarman [1984] A.C. 74, 111B in which he explained why in this context the approach of the courts should be the same whether the challenge to the finding that the applicant was an illegal entrant was mounted by way of habeas corpus or judicial review because, as I have said, Mr. Shrimpton does not dispute that this is so. His submission is that the strict rules of evidence would apply to both forms of challenge. The passages I have cited from Ex parte Khawaja and the reasoning of Collins J. lead me to conclude that this submission must be rejected, and that accordingly the disputed evidence was rightly admitted."
57. The second appears on p.176:
"The tenor of all these quotations which I have made from the speeches is an acceptance of evidence which does not necessarily meet the criteria of admissibility for a court conducting a trial. It is implicit that the court can take into account all relevant material making appropriate allowance for the weight which is to be attached to it which, of course, does not exclude the view that certain evidence should be disregarded if it is not worthy of any weight."
58. For the reasons given I am of the view that the affidavit evidence referred to was properly admitted by the Judge. This being the case I would decide this preliminary issue in favour of the Applicants.
Nazareth, V.-P.:
Introduction
59. I gratefully adopt the outline of the facts and background given by Leong J.A.
60. Most of the appellants' several grounds to a significant extent rest on the affidavit evidence to which the judge had regard but as to the admissibility of which he did not in the event pronounce, understandably, given the way the matter was unfolded before him. It has in that way become necessary for this Court to rule upon the admissibility of that evidence before it is relied upon before us.
61. As will have been seen from the judgments of Mayo and Leong JJA, the critical questions before us are whether the affidavit evidence goes to misconduct (in which case it would be admissible); and whether it would nonetheless be shut out by reason of being hearsay.
Misconduct
62. The misconduct is said to be the disclosure by Mr Wu that he did not take part, that the other two members came to a very early decision, the supply to Mr Cheung of the written notes made by Mr Chan, the other lay member of the Tribunal, and Mr Wu's own non-participation or lack of sufficient participation in the deliberations of the Tribunal. As to the disclosure itself, insofar as it was breach of the duty of confidence owed to the other two members, it was conceded by Mr Denis Chang SC, who appeared for Mr Cheung below, that this did not amount to misconduct. However, without seeking to resile from that concession, in addressing other alleged misconduct, Mr McCoy SC placed before this Court a list of the offences under the Ordinance, which revealed that such disclosure was a criminal offence. In effect, he submitted that what was a crime must be misconduct.
63. In the present context, that inevitably leads to a consideration of what is meant by misconduct. Notwithstanding the concession, in a general sense, breach of duty of confidence owed particularly to fellow members of a disciplinary tribunal is plainly misconduct, i.e. improper conduct, to give misconduct its ordinary meaning. But that, in my view, would not be within the spirit and general intent of the Ordinance, nor sensible in the particular context. That context, it is well to remember, is a challenge to the validity of the Tribunal's proceedings and its conclusion, and, in my view, therefore, must mean misconduct that goes to the validity of the Tribunal's proceedings and conclusion. I am satisfied that the disclosure here, deplorable as it was, and even though a criminal offence it may be, is simply a breach of the duty of confidence and does not in the circumstances undermine the Tribunal's proceedings and conclusion.
64. However, there is the other aspect of Mr Wu's actions upon which Mr McCoy relies, i.e. his non-participation or lack of participation. For the reasons given by Mayo and Leong JJA, I agree that there is at least an arguable case that this is misconduct that, in my view, goes to the validity of the proceedings. As to whether it was fatal to those proceedings, this will fall to be determined at the further hearing of this appeal.
65. Likewise, there is a further aspect that has rightly concerned Mayo JA. Mr Wu's apparent anxiety to placate Mr Cheung, and Mr Siu, to the point of even sending to the former Mr Chan's notes which must clearly have been apparent to him to be confidential, must call into question his independence. Plainly, it is arguable that there must have been a real danger that in his concern for Mr Cheung, he may have shifted the latter's culpability elsewhere, thus creating a real danger of bias. Upon that basis, too, the related evidence should, in my view, be admitted.
66. Mr Thomas's fundamental point here was that the principle in the Duke of Bucceleuch v Metropolitan Board of Works (1871) LR 5 HL 418 precluded the admission of such evidence. That principle in essence protects from investigation the reasoning or mental process by which a member of a tribunal reached his decision. The latter is to be contrasted to other matters including the subject matter of the adjudication and what passed before the tribunal. I have to say that while some of Mr Wu's evidence about Mr Chan's decision, his degree of certainty from the outset, and that the other two members having made up their minds, he, Mr Wu, saw no purpose in dissenting, comes perilously close to going beyond matters that were before the Tribunal, and into the area of its reasoning and the mental process by which it reached its decision, it does not seem to me to have actually transgressed into the latter.
67. However, virtually all the evidence in question comes not from Mr Wu himself, he, not having appeared or deposed to any of those matters, but from what he is alleged to have told Mr Cheung and Mr Siu. It was plainly hearsay, which brings me to the question whether it should be shut out on that account.
Hearsay
68. Here, I am in entire agreement with the views of Mayo and Leong JJA. Upon the authorities to which they have referred, hearsay is not a bar to the admission of the evidence in these proceedings. The evidence was in that respect, therefore, admissible before the Tribunal. It should, therefore, as the authorities show, also be admissible before this Court in judicial review of the Tribunal's proceedings.
Conclusion
69. For the reasons given by Mayo and Leong JJA, and those I have outlined, I would also admit the affidavit evidence. The misgivings I originally entertained as to the exercise of discretionary power to admit evidence that was attacked with some reason as lacking credibility, in hindsight, I think would fall to be dealt with at the further hearing of the appeal.
70. The affidavit evidence is accordingly admitted, and we will proceed to hear the remainder of the appeal on the date fixed.
| (G.P. Nazareth) |
(Simon Mayo) |
(Arthur Leong) |
| Vice-President |
Justice of Appeal |
Justice of Appeal |
Representation:
Mr. Gerard McCoy, S.C. and Mr. Wong Yan-lung instructed by M/S Szeto and Yeung for Applicants
Mr. Michael Thomas, S.C. and Mr. Nicholas Cooney, S.G.C. instructed by M/S Lo & Lo for Financial Secretary
|