何建民 對 香港警務處處長

HCMP 381/2010

香港特別行政區

高等法院上訴法庭

民事司法管轄權

高院雜項案件2010年第381號

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D E C I S I O N

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INTRODUCTION

1.  These five sets of proceedings arise from internal police disciplinary proceedings following which the five plaintiffs, each police officers, were dismissed from the Hong Kong Police Force (the Force).  Each now wishes to argue that they were denied a right to legal representation in the disciplinary proceedings, and that such a denial constitutes a wrongful repudiation and/or a breach of their respective contracts of employment, and violation of their constitutional rights under Article 10 of the Bill of Rights, (BOR) and/or Article 39 of the Basic Law, (BL) or breaches of statutory duties by the Commissioner under those provisions.

2.  On 23 March 2009, the Court of Final Appeal handed down its judgment in Lam Siu Po v Commissioner of Police (2009) 12 HKCFAR 237.  The Court held that rr 9(11) and 9(12) of the Police (Disciplinary) Regulations Cap 232A, (the Regulations), contravened Article 10 BOR and Article 39 BL, and were thus unconstitutional, null, void and of no effect. Those regulations purported to restrict the persons who might represent a defaulter and to prohibit legal representation of a defaulter by a barrister or solicitor in police disciplinary proceedings.

3.  Following their dismissal, each of the five plaintiffs took judicial review proceedings.  Mr Ho explicitly challenged the constitutionality of the Regulations and took the point about the prohibition of legal representation in disciplinary proceedings.  The other four plaintiffs did not make an explicit challenge to that constitutionality.  Each was unsuccessful in his judicial review proceedings.  Two of the plaintiffs, Mr Ho and Mr Lai appealed the result of the judicial review proceedings, and each was unsuccessful in that appeal.  One plaintiff, Mr Leung partially succeeded on judicial review, but on appeal by the Commissioner was deprived of that success.

4.  Now each plaintiff brings proceedings based upon a claim in contract, in which damages are sought, as a means by which each plaintiff seeks to establish a claim, notwithstanding the results of the judicial review proceedings.

5.  The Commissioner makes a preliminary application to strike out the claims relying upon three grounds:

(i) the proceedings disclose no reasonable cause of action in law even if the facts averred by the plaintiffs are all assumed to be true;

(ii) issue estoppel;

(iii) the claims are time barred by statute.

THE FACTUAL BACKGROUND

6.  The factual background to each of the five claims is relevant when considering the questions of issue estoppel and time bar, and accordingly is appropriately set out first.

HCMP 381/2010, Ho Kin Man

7.  Mr Ho joined the Force on 16 August 1993.  He suffered financial difficulties as a result of which disciplinary proceedings were commenced against him on 5 September 2003. 

8.  At the disciplinary proceedings he requested representation by an Auxiliary Inspector, who was also a solicitor.  The application was refused but the proceedings were adjourned.  The proceedings resumed on 15 September 2003, when again an application for representation was made.  Again the proceedings were adjourned, this time to 26 September 2003.  On that date, the application for representation was refused.

9.  When the proceedings resumed on 7 October 2003, he was represented by a sergeant who informed the Adjudicating Officer that because he was required to prepare for his own retirement, he could no longer represent Mr Ho.  The Adjudicating officer ruled that the disciplinary proceedings must proceed and the sergeant withdrew, leaving Mr Ho unrepresented.

10.  The disciplinary proceedings continued, and on 22 March 2004, after various confirmations by those of higher rank, Mr Ho was compulsorily retired from the Force.

11.  On 12th February 2005, Mr Ho sought leave to apply for judicial review, which application was dismissed on 22 April 2005, as being out of time.  Mr Ho specifically took the point that he had been denied legal representation in breach of Article 10 BOR, which point was held by the judge refusing leave, to be not capable of argument by Mr Ho.  An appeal to the Court of Appeal was dismissed on 31 August 2005.

12.  He instituted his present proceedings on 1 March 2010.

HCA 480/2010 Lai Ying On

13.  Mr Lai joined the Force in April 1982.  He was adjudged bankrupt in April 2001.  In January 2004, he was charged with “Contravention of Police Orders”, the particulars being that he had failed to be prudent in managing his financial affairs.  Disciplinary proceedings commenced on 9 February 2004.

14.  Mr Lai says that at the commencement of the hearing he requested formal legal representation but that request was refused by the Adjudicating Officer on the grounds that the Regulations did not permit representation by lawyers.  He was represented at the hearing by a police officer who was not legally qualified.

15.  Mr Lai was found guilty by the Adjudicating Officer and following confirmation procedures a decision was made that he be compulsorily retired with deferred benefits.  He appealed to the Commissioner against both the findings and the awards but the appeal was dismissed.

16.  On 7 January 2005, Mr Lai sought leave to apply for judicial review of the decisions.  He did not challenge the constitutionality of the Regulations.  Leave was refused by the High Court judge and an appeal was dismissed by the Court of Appeal in October 2005.

17.  Mr Lai commenced the present proceedings by filing a writ on 1 April 2010, but the statement of claim was not served until 8 May 2011.

HCA 508/2010 Ng Sai Hing

18.  Mr Ng joined the Force in August 1978.  In November 2003, he was charged with two counts of “Contravention of Police Orders”.  In the disciplinary proceedings he was represented by a police officer who was not legally qualified.  The disciplinary proceedings commenced on 18 November 2003.  Like Mr Lai, he says that he requested legal representation before the commencement of the hearing, which request was denied.

19.  He was found guilty in the disciplinary proceedings of one count of association with a triad personality, but acquitted on the second count.  After the usual confirmation procedures, the Force Discipline Officer confirmed the awards that he be reduced in rank from sergeant to constable, and dismissed from the Force.

20.  An appeal to the Commissioner was submitted, but dismissed, and Mr Ng was dismissed from the Force on 17 November 2005.

21.  On 10 February 2006, Mr Ng sought leave to apply for judicial review of the various decisions.  Leave was granted on 20 July 2007.  The only ground of review upon which leave was granted was that the disciplinary and confirming officers had failed to consider whether it was appropriate to make an award resulting in loss of pension.  The constitutionality of the Regulations was not challenged.  The application for judicial review was dismissed on 26 January 2007, after a substantive hearing. There was no appeal to the Court of Appeal.

22.  On 13 April 2010, Mr Ng filed the writ in these proceedings, serving the statement of claim a year later, on 12 April 2011.

HCA 429/2011 Leung Fuk Wah, Oil

23.  Mr Leung joined the Force in February 1983.  In May 1998 he was convicted of six counts of disciplinary charges for which various penalties, “dismissal suspended for 12 months”, “severe reprimand”, and “severe reprimand and forfeiture of one hour’s pay” were awarded.  In December 1998, he was further charged with two counts of “Contravention of Police Orders”, and a disciplinary hearing began on 4 January 1999.

24.  Mr Leung says that at the commencement of the disciplinary hearing he did not seek legal representation, believing that he was not entitled to be represented by a lawyer.  He was found guilty on both counts, and after the usual confirmation procedures an order was made that he be dismissed from the Force.  An appeal, with legal assistance, was lodged to the Commissioner, but was unsuccessful, and he was dismissed from the Force on 17 March 2000.

25.  Mr Leung sought judicial review of all decisions, but did not challenge the constitutionality of the Regulations.  In August 2001, Hartmann J allowed the application in part and quashed a decision of a Deputy Commissioner rejecting the appeal that had been lodged to the Commissioner.  The judge ordered that it was open to Mr Leung to submit a fresh appeal.

26.  However on 28 March 2002, the Court of Appeal allowed an appeal by the Commissioner, effectively reinstating the dismissal and denying the opportunity to Mr Leung to submit a fresh appeal.

27.  Some nine years later, on 14 March 2011, Mr Leung filed a writ, and on 30 March 2011, filed his statement of claim.

HCA 1769/2011 Wu Chung Yi, Eddy

28.  Mr Wu joined the Force in May 1977.  In April 2002, as a result of certain behaviour he was charged with 17 counts of “Contravention of Police Orders”, and one count of “Making a Statement which is False in a Material Particular in Connection with the Discharge by the Police Force of its Duties”.  At the commencement of disciplinary proceedings on 22 April 2002, he requested legal representation, but was denied that representation.

29.  On 13 June 2002, he was found guilty of 16 counts, and was referred for the award of penalty.  On 12 July 2002, a Force Discipline Officer confirmed the findings and awards, which did not involve dismissal, and further directed that Mr Wu be served with a “Warning for Dismissal (General)”.

30.  On 1 August 2002, Mr Wu appealed to the Commissioner against the findings.  The appeal was dismissed, and the penalty that had been imposed upon him was increased to compulsory retirement with deferred benefits.  Mr Wu was compulsorily retired on 16 October 2002.

31.  With legal representation he made an application for judicial review of the disciplinary proceedings, but did not challenge the constitutionality of the regulations.  Leave was granted, but the application for judicial review was dismissed on 14 October 2003.  Mr Wu did not appeal further.

32.  Mr Wu commenced these proceedings some eight years later, by filing a writ on 19 October 2011, and a statement of claim on 21 November 2000.

No reasonable cause of action

33.  This ground may be shortly dealt with.  After hearing Mr Shieh, I indicated to Mr Dykes but I did not need to hear him in response.  I was satisfied that there was an arguable cause of action.  The onus is on the defendant to demonstrate that the case is a plain and obvious one in which the claim is bound to fail: see O 18 r 19(1)(a) and The Artemis [1983] HKLR 364.  Mr Shieh’s argument had failed to persuade me that, if permitted to proceed, the claims were bound to fail.

34.  It is undeniable that the relationship between each of the police officers and the Government was one of a contract of service: see Chan Tak Keung v Commissioner of Police (unreported HCAL 315/2000, 13 July 2000).  In that case Chung J held that a police officer in Hong Kong is a civil servant and there is an employment contract between him and the Government, although subject to regulation in the form of the Regulations.  That must be right.

35.  The relationship being one of contract, it must be arguable at least that there is an implied term that the Government would fully comply with the laws of Hong Kong in so far as they are relevant to the plaintiffs’ employment.  The particular laws relied upon by the plaintiffs are Article 10 BOR and Article 39 BL.

36.  As long ago as 1951, Byrne J held in Gregory v Ford [1951] 1 All ER 121 at 124A that there was an implied term in the contract of service “that the employer would comply with the statute”.  The statute in question was the Road Traffic Act 1930.  As a result of a breach of that Act by his employers, a lorry driven by an employee, was not covered by third party insurance.  The employee was held entitled to recover from his employers the amount of damages that he was liable to pay the plaintiff who had been injured in an accident involving the lorry.  The same finding was reached, without reference to Gregory v Ford, in Semtex Ltd v Gladstone [1954] 1 WLR 945.

37.  I am in no doubt that it is reasonably arguable that the implied term pleaded by the plaintiffs was a term of the contract of employment between the plaintiffs and the Government, represented in these proceedings by the Commissioner.

38.  Mr Shieh argued that even if that were so, what he described as “constitutional damages” for breaches of articles of the BOR or the BL would not be available.  He points out that neither the BOR nor the BL make provision for damages to be available as a remedy for violations of any article.

39.  With respect to Mr Shieh, the submission misses the basis of the plaintiffs’ claim.  They do not make a claim for damages for breach of either the BOR or the BL in isolation, but instead a claim for damages for breach of contract.  They do not seek to argue that they have a private law cause of action based upon breach of statutory or constitutional duties.  They simply say that there has been a breach of contract.  It must be arguable that if it is a term of a contract that the provisions of a law will be observed, and a party to that contract is in breach of a provision of law, the consequence of which causes loss or damage to a plaintiff, a claim for damages will lie.  It simply does not matter that the particular breach of contract happens to involve what is also a public law right.

40.  It is accordingly not necessary for the plaintiffs to have recourse to s 6 of the Bill of Rights Ordinance, which is restricted to proceedings in an action for breach of that Ordinance.  The claim is one for breach of contract, and it is incidental that the particular breach alleged happens to be a breach of rights established under either the BOR or the BL.

41.  For these reasons I was satisfied that the plaintiffs each have an arguable cause of action and that the application to strike out the proceedings under O 18 r 19(1)(a) by the Commissioner must fail.

ISSUE ESTOPPEL

42.  Mr Shieh summarised the principles relating to issue estoppel upon which he relied in five propositions.  Mr Dykes did not challenge those propositions, and I can do no better than to repeat Mr Shieh’s propositions:

(i)     a res judicata is a decision pronounced by a judicial or other tribunal with jurisdiction over the cause of action and the parties, which disposes once and for all of the fundamental matters decided, so that they cannot be re-litigated between the parties bound by the judgment except on appeal: see Spencer Bower & Handley on Res Judicata 4^th Edn, 2010, §1.01;

(ii)    there are two species of res judicata: cause of action estoppel and issue estoppel.  The Commissioner relies upon issue estoppel in the application to strike out;

(iii)   issue estoppel may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant, none of the parties may seek to reopen that issue: Arnold v NatWest Bank [1991]2 AC 93 at 105D-106A, per Lord Keith;

(iv)   the doctrine of res judicata applies where the earlier proceedings are public law in nature: Asher v Environment Secretary [1974] Ch 208 at 222D per Lord Denning MR, 228AE, per Lawton LJ; Thrasyvoulou v Environment Secretary [1990] 2 AC 273 at 289C-D, per Lord Bridge; Chu Pak Tin v Commissioner of Police, (unreported, HCAL 144/2009 4 June 2010) at §34, per Reyes J.  It applies to bar not only subsequent public law litigation but also subsequent private law litigation: Spautz v Butterworth (1996) 41 NSWLR 1 at 19D-20E, per Clark JA, Spencer Bower & Handley on Res Judicata 4^th Edn, 2010, §16.07;

(v)    the absence of an explicit challenge on a particular point in the earlier proceedings is not relevant because issue estoppel applies not only to issues actually raised and determined in the earlier proceedings but also those which could and should have been, but were not raised: see Arnold §§106B‑107D per Lord Keith.

43.  The argument mounted by Mr Shieh on behalf of the Commissioner was that in all five cases before the court, the plaintiffs had commenced, and failed in, judicial review applications challenging their respective disciplinary hearings and dismissals.  In the light of propositions (iii) & (v) in the preceding paragraph, I invited Mr Shieh to formulate the issue which he contended had been at the heart of the judicial review proceedings.  He put it as being:

“Whether the conduct of the relevant disciplinary hearings was lawful and in compliance with the Hong Kong Bill of Rights.”

Mr Dykes did not seek to challenge that formulation.

44.  Mr Shieh’s proposition (v) is particularly important in this case, and it is appropriate to record the statement of Lord Keith in Arnold at 106B:

“Issue estoppel, too, has been extended to cover not only the case where a particular point has been raised and specifically determined in the earlier proceedings, but also that where in the subsequent proceedings it is sought to raise a point which might have been but was not raised in the earlier.” (sic)

45.  Mr Shieh argued, relying on Tsui Kin Kwok v Commissioner of Police (unreported, HCAL 50 & 143/2009, 29 January 2010), per A Cheung J at §11, that a challenge to the constitutionality of the Regulations on the Lam Siu Po basis could have been raised in the earlier judicial review applications.  He pointed to the fact that Mr Ho explicitly challenged the Regulations on that point although the other four did not.

46.  As far as Mr Ho is concerned it is clear beyond argument that the issue he now seeks to raise may be answered by issue estoppel.  Not only did he raise the issue as to whether or not the conduct of the disciplinary proceedings was lawful and in compliance with the Hong Kong Bill of Rights, he did so, in part, upon the very ground that he now seeks to raise in these proceedings.

47.  I am equally satisfied that it is clear beyond argument, that it was open to the remaining four plaintiffs, in the course of their challenge by judicial review to the conduct of the disciplinary proceedings, to raise the particular point they now seek to raise.  It is no answer for them to say they did not take the point in the earlier proceedings.

48.  But that does not finally conclude the matter, because there are exceptions to issue estoppel.  Mr Shieh acknowledges that there may be special circumstances where the issue estoppel may not operate.  Such special circumstances include where there has become available to a party further materials that are relevant to the correct determination of the earlier proceedings, whether or not that point was specifically raised and decided, and where those further materials could not, by reasonable diligence have been adduced in the earlier proceedings.

49.  Mr Shieh accepts in this regard that a subsequent change in the understanding of the law may suffice: see Arnold, at §§110H-111A, per Lord Keith, where he cited with approval the following passage from the judgment of Sir Nicholas Browne-Wilkinson VC at first instance in Arnold, ([1989] 1 Ch 63 at 70-71):

“In my judgment a change in the law subsequent to the first decision is capable of bringing the case within the exception to issue estoppel. If, as I think, the yardstick of whether issue estoppel should be held to apply is the justice to the parties, injustice can flow as much from a subsequent change in the law as from the subsequent discovery of new facts. In both cases the injustice lies in a successful party to the first action being held to have rights which in fact he does not possess. I can therefore see no reason for holding that a subsequent change in the law can never be sufficient to bring the case within the exception. Whether or not such change does or does not bring the case within the exception must depend on the exact circumstances of each case.” (Original emphasis).

50.  In Arnold, having determined that a subsequent change could constitute an exception to issue estoppel, Lord Keith went on to consider the circumstances in which that exception might apply.  At 109E-G, he said this:

“Your Lordships should appropriately, in my opinion, regard the matter as entire and approach it from the point of view of principle. If a judge has made a mistake, perhaps a very egregious mistake, as is said of Walton J’s judgment here, and a later judgment of a higher court overrules his decision in another case, do considerations of justice require that the party who suffered from the mistake should be shut out, when the same issue arises in later proceedings with a different subject matter, from reopening that issue?

A certain analogy can, in my view, be drawn with the principles governing the situation where leave to appeal out of time is sought.”

In Arnold, the aggrieved party had no right of appeal, and that fact weighed in the balance in the court permitting that party to reopen the question that had been decided against him. It is plain that had there been a right of appeal, which had not been exercised, or in the circumstances leave would not have been granted to bring an appeal out of time, the court would not have permitted the issue to be reopened as an exception to issue estoppel.

51.  The authorities are firmly against an extension of time for leave to appeal as a result of the decision in Lam Siu Po: see Clarence Chan Kang Chau v Commissioner of Police (2010) 13 HKCFAR 462, where the Court of Final Appeal refused leave to appeal against the decision of the Court of Appeal, refusing leave to appeal to that court out of time.  The ground Mr Chan sought to advance before the Court of Appeal was that arising from Lam Siu Po.  In refusing leave the Court said, at §7:

“It is in the nature of our legal system that the view of the law on which a litigant lost may be overruled in another case decided after the time for him to appeal has expired. Finality in litigation being so important, such overruling cannot of itself justify an extension of time for appealing. There can of course be exceptional circumstances that would justify such an extension. But such circumstances are so exceptional that they would very rarely arise.”

52.  The court rejected a submission that exceptional circumstances were found from the fact that the fairness of the disciplinary proceedings was involved.  In the face of such authority, directly in point both in principle and in fact, I am obliged to hold that were any of the applicants to seek leave to appeal the judicial review proceedings out of time the court would be obliged to refuse that leave.

53.  Mr Dykes sought to argue that the authorities do not support the proposition that issue estoppel applies to bar not only subsequent public law litigation, but also subsequent private litigation.  I accept that a successful judicial review can be used as a springboard for a damages claim, but that does not answer the proposition that issues determined in public law litigation do not raise an issue estoppel in private litigation between the same parties.  Mr Dykes accepted that if, in judicial review proceedings a court found that imprisonment was unlawful, for example as in R v Governor of Brockhill Prison, e p Evans (No 2) [2001] 2 AC 19, it would not be open to the Governor to contend, in subsequent litigation for damages for false imprisonment, that the imprisonment was lawful.

54.  Mr Dykes next argued that the plaintiffs in the present proceedings were acting under a mistake of law and that they were not aware of the unconstitutionality of the regulations.  But that is not the point.  The point, as is demonstrated by Mr Ho having taken the point, is that the constitutionality of the bar to legal representation in disciplinary proceedings was a live issue and open to be taken at the time, and pursued all the way to the Court of Final Appeal.  It cannot be an answer to the proposition that if a point is open and should have been taken, to say that neither I nor my solicitor appreciated that the point was open, and we therefore acted under a mistake.

55.  Mr Dykes sought to rely upon the statement by Lord Bingham in Johnson v Gore Wood & Co [2002] 2 AC 1 (HL), at 31D:

“It is, however, wrong to hold that because the matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.”

And at 23E-F:

“Thus the abuse in question need not involve the reopening of the matter already decided in proceedings between the same parties, as where a party is estopped in law from seeking to relitigate a cause of action or an issue already decided in earlier proceedings, but, as Somervell LJ put it in Greenhalgh v Mallard [1947] 2 All ER 255, 257, may cover

‘issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them.’”

56.  The proposition does not assist Mr Dykes.  The point that was available to be taken, so clearly could have been raised, that it cannot be said that it ought not to have been raised.  That raising the point now constitutes an abuse of process is plain beyond argument.

57.  Mr Dykes next argues that the proceedings do not raise the constitutionality of the Regulations, because that issue has already been decided.  The argument is disingenuous.  The point may well have been decided, but it is no less the essential issue upon which the plaintiffs rely to base their claim for breach of contract.  It is an issue which has been determined against them in the judicial review proceedings and which constitutes an issue estoppel against them.  It is not now open to them to contend that the Regulations are unconstitutional.

58.  I accordingly hold that there is an issue estoppel against each of the plaintiffs in respect of the constitutionality of the Regulations, and that the proceedings accordingly constitute an abuse of process and must be struck out.

LIMITATION

59.  In case I am wrong on that issue I proceed to consider the limitation issue.

60.  The actions are based upon simple contract for which the limitation period is six years from the date on which the cause of action accrued: s 4(1)(a) Limitation Ordinance, Cap 347.  The general rule in contract is that the cause of action accrues, not when the damage is suffered, but when the breach takes place: see Chitty on Contracts 30^th Edn Vol 1 §28-032:

“Therefore, although such damage may occur within six years before the action is brought, the action will be barred if the contract was broken before that period.”

61.  The breach of contract complained of by each of the five plaintiffs is the refusal to grant them entitlement to legal representation at the commencement of the disciplinary proceedings, which refusal they say, (it now known to be correctly), was a breach of their rights under Article 10 BOR and Article 39 BL.  That refusal, on the best case for each plaintiff, occurred on the day upon which the disciplinary proceedings commenced.

62.  Mr Dykes’ contention that time began to run from the date of dismissal from the Force cannot be right.  If that contention were right, arguably the actions of Mr Ho, Mr Lai and Mr Ng are in time.  The basis of the argument that the date of dismissal is the date upon which the damage was caused to each of those three plaintiffs is that although there had been an earlier breach of contract, so long as they remained in the Force, no damage had accrued to them.

63.  That the argument must fail is demonstrated by the authorities that show that in an action for breach of warranty or condition against a seller of goods, the cause of action accrues when the goods are delivered, and not when the defect is discovered: see Battley v Faulkner (1830) 3 B & Ald, and Lynn v Bamber [1930] 2 KB 74.

THE TIME LIMITS IN RESPECT OF EACH PLAINTIFF

64.  Mr Ho’s disciplinary proceedings finally got underway on 7 October 2003, with a refusal to permit him legal representation.  Time expired on 7 October 2009.  The writ was issued, out of time, on 1 March 2010.

65.  Mr Lai’s disciplinary proceedings commenced on 9 February 2004, his request for legal representation being refused on that day.  Time accordingly expired on 9 February 2010.  The writ was issued, out of time, on 1 April 2010.

66.  Mr Ng’s disciplinary proceedings began on 18 November 2003, at which time he was denied legal representation. Time expired on 18 November 2009.  The writ was issued, out of time, on 13 April 2010.

67.  Mr Leung’s disciplinary proceedings began on 4 January 1999.  He was refused legal representation on that day. Time expired on 4 January 2006.  The writ was issued, out of time, on 14 March 2011.

68.  Mr Wu’s disciplinary proceedings began on 22 April 2002, on which day he was refused legal representation.  Time expired on 22 April 2008.  The writ was issued, out of time, on 19 October 2011.

69.  It is clear on that analysis that each plaintiff is out of time to bring these proceedings.

AN ACTION FOR RELIEF FROM THE CONSEQUENCES OF A MISTAKE

70.  Mr Dykes sought to argue  that by virtue of s 26(1) Limitation Ordinance, time did not run against the plaintiffs, Mr Leung and Mr Wu, because, until the delivery of the decision of Court of Final Appeal in Lam Siu Po, they mistakenly believed that the disciplinary hearings against them had been constitutionally undertaken.  The relevant provision reads:

“(1) Subject to subsection (4), where in the case of any action for which a period of limitation is prescribed by this Ordnance either-

....

(c) the action is for relief from the consequences of a mistake,

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.”

71.  I accept Mr Shieh’s submission that this provision is restricted to cases where mistake is an essential ingredient of the cause of action: Phillips-Higgins v Harper [1954] 1 QB 411 at 418-419.  In the present case an essential ingredient of the cause of action brought by the plaintiffs is not a mistake.  “Mistake” is relied upon solely as an excuse for not having brought proceedings within time, and not as an essential ingredient of the cause of action.

72.  The industry of Mr Dykes and Mr Pun over a slightly extended lunch break revealed that the decision in Phillips-Higgins has been criticised academically^[1], and that in Deutsche Morgan Grenfell Group plc v IRC [2007] 1 AC 558, at §146, the comment was made that the decision “rested on a surprisingly uncertain basis”.

73.  Mr Dykes however quite properly drew my attention to the fact that Phillips-Higgins was affirmed by the United Kingdom Supreme Court in Test Claimants in the Franked Investment Income Group Litigation (Appellants) v Commissioners of Inland Revenue & Anor (Respondents) [2012] UKSC 19.  Mr Dykes invited me not to follow Phillips-Higgins, drawing my attention to the fact that while decisions of the United Kingdom Supreme Court should be treated with great respect, they are not binding on Hong Kong courts: see Solicitor (24/07) v Law Society of Hong Kong (2008) 11 HKCFAR 117 at §§16-17.

74.  While I accept that proposition, the powerful reasoning^[2] in Test Claimants leads me irresistibly to the view that Phillips-Higgins was correctly decided.

75.  The provisions of s 26(1)(c)  of the Limitation Ordinance are of no assistance to the  plaintiffs.  I am satisfied that it is plain and obvious that all five claims are out of time.

THE ORDERS THAT FLOW FROM THE DECISIONS ON LIMITATION

76.  Mr Dykes was technically correct to draw my attention to Ronex Properties Ltd v John Lange Construction Ltd & Ors [1983] 398, where it was held that the issue of limitation had to be specifically pleaded, that the court will not entertain an application to strike out until it has been pleaded, and that if the limitation period has expired that does not normally take away the plaintiff’s right to bring an action, as the bar may only operate as a bar to relief.

77.  There must be an order that the claims of Mr Ho, Mr Leung and Mr Wu are statutorily barred from proceeding and must be struck out.  It is right that the Commissioner has not yet formally pleaded the time bar in respect of Mr Lai and Mr Ng.  Strictly therefore there cannot be an order striking out the proceedings of Mr Lai and Mr Ng until the Commissioner files the appropriate pleading.

78.  The Commissioner and the parties may think it better not to incur further costs but to recognise the reality of the situation.

COSTS

79.  There will be an order nisi that the plaintiffs must pay the Commissioner’s cost of the proceedings, to be taxed on a party and party basis.  If required, the plaintiffs’ own costs will be taxed on Legal Aid Regulations, with a certificate for two counsel.