PCCW HKT TELEPHONE LTD AND ANOTHER v. THE SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT AND OTHERS

CACV 208/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 208 OF 2015

(ON APPEAL FROM HCAL NO. 51 OF 2013)

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D E C I S I O N

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Hon Cheung JA (giving the Decision of the Court) :

1. This is the applicants’ application for leave to appeal to the Court of Final Appeal against our judgment of 17 May 2016. We will deal with the application on paper.

2. To begin, we will briefly summarise the issue and our decision because they have a material bearing on the way this application is brought. 

3. The applicants challenged the decision of the respondents dated 27 November 2012 which decided, amongst other things, that the customer connecting fees in respect of UnifiedCarrierLicencebereducedfromHK$8toHK$7per customer connection per year.  In essence the applicants’ complaint was that the respondents had been charging excessive fees which offended the principle that there should not be hidden or unauthorised taxation and levying charge beyond its proper objective.  The applicants had brought a separate action for the recovery of the licence fees paid by them in the past. 

4. In reaching the decision, the respondents had looked at the past performance of the OFCA Trading Fund and its future financial projections. 

5. Looking at the past performance, the Court was of the view that a serious question did arise as to whether there was indeed a planned surplus that exceeded the financial objectives of the OFCA Trading Fund which engaged the principle that there should not be hidden or unauthorised taxation.  The Court was prepared to assume these points in the applicants’ favour but we went on to consider the future financial projections and came to the view that the vice that occurred in the past did not arise in the future projections.  Further, as the respondents had taken into consideration both the past financial results and the future financial projections in arriving at its decision, the Court, recognizing public law principles, was not in a position to unravel or micro-manage the decision.  Accordingly the Court dismissed the applicants’ appeal.

6.   It is clear in seeking to obtain leave to appeal under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance (Cap. 484), there must be a question of legal principle to be involved which is said to be of great general or public importance :CG Lighting Ltd. v Commissioner of Inland Revenue (2011) 14 HKCFAR 750.  The Court requires the applicant to succinctly frame the question or questions involved.

7.  In the applicants’ ‘Application for leave to appeal’, the question that was framed is :

‘ The question involved in the appeal is whether the Respondents’ Decision to set licence fees so as to generate a surplus above the sums referred to in s. 6(6) of the Trading Funds Ordinance (Cap 430) (TFO) was unlawful and irrational.’

8.  It then set out the principal grounds of appeal. 

9.   This cannot be a properly framed question.  It is written in general terms, fact laden and does not draw a proper distinction between the past performance and the decision itself which is the only subject matter of the judicial review challenge.  In our view the question is plainly not reasonably argued.

10.   In their written submissions the applicants formulated two other questions :

‘ (1) whether notional tax and/or payment of dividends may be lawfully included in the budgeting for the purpose of determining licence fees under the Telecommunication Ordinance, or whether the payment of notional tax and/or dividend to the Government would be ultra vires the Telecommunication Ordinance and/or was unlawful and irrational in a public law sense, and/or

(2)   whether in administering the OFCA Trading Fund (renamed from OFTA Trading Fund), it would be lawful to budget for notional tax and/or dividend to the Government, and whether the budgeting of notional tax and/or dividend would be contrary to the cost recovery principle for the operation of the trading fund under s. 6 of the Trading Fund Ordinance.’

11.   This is not a proper way to seek leave.  To proceed in this way, without even seeking leave to amend the ‘Application for leave to appeal’, the applicants clearly had offended what the Court of Final Appeal said in Safder Tehseen v. Permanent Secretary for Security (2014) 17 HKCFAR 567 on the proper procedure for leave application :

‘ 10. ......The proper procedure plainly requires the applicant for leave to appeal to identify and state in his notice of application the grounds of the application and, where one of the grounds relied upon is that a question of great general or public importance is involved in the appeal, that question must be identified in the notice.’

12.  In any event, the two formulated questions are in our view academic because we have already in our judgment assumed in the applicants’ favour that there was a planned surplus in the past.  The matter of notional tax and dividend was the consequence of such a planned surplus.  What these two questions fail to address is the real issue in this case, namely, whether the decision itself, which had taken into account both the past surplus and future projections, offends public law principles and is susceptible to challenge by judicial review.  The questions as framed, even if answered affirmatively, would not enable the applicants to successfully challenge the decision.

Conclusion

13.   Accordingly the application is dismissed with costs to the respondents.  We certified this application fit for two counsel.