FINANCIAL SECRETARY v. FELIX WONG

FACV No. 5 of 2003

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 5 OF 2003 (CIVIL)

(ON APPEAL FROM CACV NO. 96 OF 2001)

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J U D G M E N T

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Mr Justice Bokhary PJ:

1. In this appeal the Court is faced with an unprecedented problem. We have to cope with the disaster caused by the Insider Dealing Tribunal's mishandling of an insider dealing inquiry seven years ago. The securities involved in that inquiry were the shares in a listed company. This was the company named Paragon Holdings Ltd at the material time but later re-named CNPC (Hong Kong) Ltd. In 1995 it appeared to the then Financial Secretary that insider dealing in Paragon shares had or may have taken place during the period from 3 March to 7 May 1993. So, by a notice dated 28 December 1995 given under s.16 of the Securities (Insider Dealing) Ordinance, Cap. 395, he exercised his power under that section to institute an inquiry into the matter. All my references to sections and subsections will be to those of this Ordinance.

2. By the s.16 notice the Insider Dealing Tribunal ("the Tribunal") was called upon to inquire into and determine:

"(a) whether there has been insider dealing in [those shares during that period];

(b) in the event of there having been insider dealing as described in paragraph (2), the identity of each and every insider dealer; and

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

Those terms of reference conform with s.16(3) which reads:

"The object of an inquiry shall be to determine at the conclusion of the inquiry or as soon as is reasonably practicable thereafter, within the terms of reference of the inquiry as defined under subsection (2)

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

(b) the identity of every insider dealer; and

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

Report

3. The Tribunal was chaired by Mr Justice Yam ("the Chairman") who sat with two other members, one a solicitor and the other a stockbroker. Sitting half days only, the Tribunal sat on 110 days during the period from 25 March to 25 November 1996. On 3 June 1997 it issued its report. This report suffered from an omission. It contained the Tribunal's finding that insider dealing within its terms of reference had taken place. And it contained the names of the three persons whom the Tribunal identified as insider dealers. But it made no mention of any profit gained or loss avoided as a result of their insider dealing. Even if only by reason of that omission, the Tribunal cannot be said to have completed its task.

Unfairly and contrary to the rules of natural justice

4. Of course if that omission had been the only problem, the situation could have been saved by a supplemental report. Unfortunately there was another problem, and it was a far more serious one. This brings me to the first set of judicial review proceedings involved in the present case. The three persons whom the Tribunal found guilty of insider dealing were two gentlemen surnamed Tan and the respondent to the present appeal, Mr Felix Wong. About three weeks after the Tribunal issued its report, the Tans brought judicial review proceedings seeking an order of certiorari (as such orders are still called in Hong Kong even though they are now called "quashing orders" in England where they originated) to quash all of the Tribunal's findings. They sought such relief on the grounds that the Tribunal had conducted the inquiry in a manner which was unfair and contrary to the rules of natural justice.

5. The Tans succeeded. On 1 April 1998 Sears J held that those grounds had been made out. And he made an order of certiorari quashing all of the Tribunal's findings. Sears J's decision is reported as Dato Tan Leong Min v. Insider Dealing Tribunal [1998] 1 HKLRD 630. The Tribunal appealed to the Court of Appeal. On 27 January 1999 the Court of Appeal dismissed the Tribunal's appeal. The Court of Appeal's decision is reported as Dato Tan Leong Min v. Insider Dealing Tribunal [1999] 2 HKC 83. There was no appeal from that decision of the Court of Appeal.

6. In what manner had the Tribunal acted unfairly and contrary to the rules of natural justice? That may be taken from Mortimer VP's judgment (with which Rogers JA agreed and to which Godfrey JA added a concurring judgment). Sears J had listed seven conclusions which he described as "general conclusions". At pp 91H-92B Mortimer VP, leaving out the first of those seven conclusions, quoted the other six:

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

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

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

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

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

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

7. Then Mortimer VP turned to another conclusion to which Sears J had come, which was that the Tribunal had pre-judged certain issues. The learned Vice President felt unable to support the conclusion as to pre-judging. But he was satisfied that Sears J's other conclusions were justified and agreed with them. In the result, the Court of Appeal unanimously affirmed Sears J's order of certiorari quashing all of the Tribunal's findings on the grounds that the Tribunal had conducted the inquiry in a manner which was unfair and contrary to the rules of natural justice.

Mr Wong applies for costs

8. Unlike the Tans who are Malaysian residents and had chosen to absent themselves from the inquiry, Mr Wong is a Hong Kong resident and had been legally represented thereat. All of the Tribunal's findings having been quashed, Mr Wong applied to the Tribunal under s.26A for his costs of the abortive inquiry. This section reads:

"(1) Subject to subsection (5), at the conclusion of an inquiry or as soon as reasonably practicable thereafter, the Tribunal may award to -

(a) any witness;

(b) any person whose conduct is, in whole or in part, the subject of the inquiry,

such sum as it thinks fit in respect of the costs reasonably incurred by him in relation to the inquiry.

(2) Any costs awarded by the Tribunal under subsection (1) shall be charged on the general revenue.

(3) The Tribunal may order that any costs awarded under subsection (1) may be taxed on the basis of any one of the scales of costs set out in the Schedules to Order 62 of the Rules of the High Court.

(4) Subject to any rules made by the Chief Justice under section 36, Order 62 of the Rules of the High Court shall apply to the award and taxation of any costs awarded by the Tribunal under this section.

(5) This section shall not apply to any person referred to in subsection (1) who is -

(a) a person who has been identified as an insider dealer in a determination under section 16(3);

(b) an officer of a corporation who has been identified as such officer in a determination under section 16(4);

(c) a person who and in respect of whom it appears to the Tribunal has by his own acts or omissions caused or brought about (whether wholly or in part) the Tribunal to inquire into his conduct subsequent to the institution of the inquiry under section 16 or during the course of that inquiry; or

(d) any other person who and in respect of whom it appears to the Tribunal has by his own acts or omissions caused or brought about (whether wholly or in part) the institution of the inquiry under section 16."

Contamination?

9. As can be seen from s.26A(5)(c) and (d), the Tribunal is precluded from awarding costs to any person who had wholly or partly brought an inquiry upon himself by his own acts or omissions. Mr Wong's legal advisers feared that the Tribunal might embark upon the question of whether Mr Wong had brought the inquiry upon himself. And they feared that the Tribunal might have regard to the evidence from the inquiry when answering that question. So counsel for Mr Wong submitted on his behalf that none of the evidence from the inquiry could be looked at because the matters which led to the quashing of the Tribunal's findings had "contaminated" such evidence. I will refer to this submission as the "contamination" submission.

10. By a ruling which he delivered on 24 September 1999, the Chairman gave his decision on the contamination submission. He said that the Tribunal would not use any evidence taken in private during the inquiry. But he declined to rule out the use of evidence taken by the Tribunal in public hearing at the inquiry. Mr Wong was dissatisfied with this decision. And he rapidly sought leave to challenge it by way of judicial review. Hence the second set of judicial review proceedings concerned in the present case.

11. Mr Wong's judicial review challenge was dealt with at first instance by Keith JA (sitting throughout as an additional judge of the Court of First Instance of the High Court). On 26 October 1999 he granted Mr Wong leave to apply for judicial review. In September the following year, he heard the judicial review application itself. And on 22 December 2000 he rejected the contamination submission and dismissed the application for judicial review. But the contamination submission was accepted by the Court of Appeal (Rogers VP and Le Pichon JA, Waung J dissenting). On 30 January 2002 the Court of Appeal (by that majority) allowed Mr Wong's appeal so as to make an order of certiorari quashing the Chairman's decision. The Financial Secretary now appeals to this Court seeking the restoration of Keith JA's order dismissing Mr Wong's application for judicial review.

12. I feel unable ? and understand that all the other members of this Court likewise feel unable ? to support the acceptance by the majority in the Court of Appeal of the contamination submission. Unfairness in the course of a hearing may adversely affect the weight of evidence taken at that hearing, but it does not contaminate such evidence so as to expunge it.

Procedure rather than the end result

13. What was the end result which Mr Wong sought from the Tribunal? It was an award of, quoting from s.26A(1), "such sum as [the Tribunal thought] fit in respect of the costs reasonably incurred by him in relation to" the inquiry. But the Chairman's decision went only to the procedure along the way to a decision on that end result.

14. The courts' judicial review jurisdiction is of a supervisory nature. This extremely important jurisdiction is not meant for the purpose of micro-managing the activities of subordinate tribunals or administrative decision-makers. It should hardly ever be exercised to review decisions that go only to procedure rather than to the end result. I say "hardly ever" rather than "never" because there can be wholly exceptional cases calling for special treatment. In this connection I would draw attention to the useful discussion of the English cases in Michael Fordham: Judicial Review Handbook, 3rd ed. (2001) at p.102, para. 4.8.2 under the sub-heading "Whether to wait until the conclusion of the matter". If the Tribunal had been properly seised of an application for costs, the High Court's proper course would have been to leave the Tribunal to proceed to a decision on the end result and then, if the circumstances eventually so warranted, judicially review that end result. Quite apart from anything else, it often happens that the effect of questionable decisions made at an intermediate stage of a process are dissipated or overtaken by subsequent developments and turn out to have little or no impact by the time the final stage is reached.

15. For his proposition that procedural decisions are susceptible to judicial review, counsel for Mr Wong cited two decisions, both concerning adjournments. These are the decision of the Divisional Court of the Queen's Bench Division in R v. Thames Magistrates' Court, ex parte Polemis [1974] 1 WLR 1371 and the decision of Ronald Young J at first instance in the New Zealand case of Genesis Power Ltd v. Environment Court [2003] NZAR 371. Polemis's cases does not really shed any light on the matter. What was quashed by certiorari there was the conviction following a wrongful refusal of an adjournment. In the Genesis Power case the judge did consider a decision granting an adjournment to be reviewable (although he declined on the merits to disturb the grant of the adjournment). But that was a wholly exceptional case in which a general principle was engaged since it was suggested that the Environment Court's decision to grant an adjournment had been unjustifiably influenced by the prospect of legislation changing the law which it had to apply in arriving at the end result.

16. As for the Australian cases that may be relevant to this aspect of the present appeal, they include Australian Broadcasting Tribunal v. Bond (1990) 170 CLR 321. That decision is necessarily of particularly persuasive authority even by the much to be admired standards of the High Court of Australia since it is a decision of the Mason Court. As I understand that decision, my views are in respectful conformity with the thinking underlying it. But I should indicate that I have taken the precaution of first forming my views independently of what their Honours said because ? and solely because ? they were concerned with an Australian statute of which Hong Kong has no equivalent.

Inquiry has not concluded

17. Mr Wong had taken a wrong turning even before commencing his judicial review proceedings. He had done so as soon as he went to the Tribunal in order to seek his costs. That took him down a forensic cul-de-sac. The Tribunal's power to award costs is contained in s.26A, which I have quoted in full above. Where a person whose conduct has been the subject of an inquiry is concerned, the Tribunal's power to award him costs cannot on any view arise until after its inquiry has concluded. The inquiry has not concluded. All of the Tribunal's findings having been quashed and the Financial Secretary not having withdrawn his s.16 notice, the Tribunal's duty to hold an inquiry remains extant. And if the Financial Secretary does not withdraw his s.16 notice, the Tribunal (differently constituted of course) must begin all over again.

Mr Wong's costs of the abortive inquiry

18. Plainly it would now be right for the Financial Secretary to indicate with reasonable promptitude whether or not he withdraws his s.16 notice. The insider dealing in question is alleged to have taken place 10 years ago. And Mr Wong has already been through the ordeal of an abortive inquiry. For these reasons ? and perhaps for other reasons as well or instead ? the Financial Secretary may well consider it appropriate to withdraw his s.16 notice.

19. If the Financial Secretary does not withdraw his s.16 notice, the inquiry will conclude when a fresh Tribunal (by which I mean a Tribunal constituted differently from the one whose findings have been quashed) completes its task. If the Financial Secretary withdraws his s.16 notice, the inquiry will conclude upon such withdrawal.

20. Can the judiciary, whether or not the Financial Secretary withdraws his s.16 notice, deal with Mr Wong's costs of the abortive inquiry as a matter consequential to the order of certiorari quashing the Tribunal's findings? If this course is open, then this Court could itself deal with those costs rather than remitting the question of those costs to the High Court. So the attractions of such a course would include an immediate end to this matter which has already been going on for so long. Shortly stated, the thinking as to why such a course is available would be along the following lines. Because the Tribunal had acted unfairly and contrary to the rules of natural justice, the High Court had to intervene by making an order of certiorari quashing all of the Tribunal's findings. And that order exposed Mr Wong to the risk of the further costs of another inquiry. So Mr Wong's costs of the abortive inquiry are costs to which he was put in defending himself and which were wasted through no fault of his own and through the fault of a Tribunal in an inquiry established by the Financial Secretary. And the fact that such costs have been wasted is a consequence of the order of certiorari because that order quashed all of the Tribunal's findings, rendered the inquiry abortive and exposed Mr Wong to the risk of the further costs of another inquiry. That, in short, would be the case for Mr Wong's costs of the abortive inquiry being met at government expense.

21. Judicial review is a rapidly developing area of the law. And I think that it may well develop so that a course such as the one which I have just outlined will become accepted. For my own part, I would be inclined to so develop the law here and now. But perhaps the circumstances of the present case are too fraught to provide a sufficiently steady platform on which to be innovative. I understand that there are other members of the Court who favour some other course. And I certainly consider it extremely important in a disaster rescue operation like this that the Court speaks, if not in one voice then at least in harmonious voices.

22. So I support that other course, which is to leave Mr Wong to go to a Tribunal once the inquiry has concluded (in one or other of the ways referred to above) and to ask it for his costs of the abortive inquiry. It would be the Tribunal as previously constituted if the s.16 notice is withdrawn (Mr Wong having waived any objection to the Tribunal so constituted when he applied to it for his costs as he did). If the s.16 notice is not withdrawn, it would be to a fresh Tribunal. I recognise that this course can be said to have an unsatisfactory feature, which is this. The Tribunal, whether as previously constituted or as freshly constituted, will have to deal with costs under s.26A. That means that Mr Wong will be barred from recovering his costs of the abortive inquiry if he had brought the inquiry upon himself even though he would not have brought upon himself the unfairness which rendered the inquiry abortive. This could be said to leave him with a less than full remedy for the violation of his right to a fair hearing. And that is why I spoke as I did about how the law may yet develop in future. As for the present position, I say "a less than full remedy" rather than "no remedy" because Mr Wong has got the remedy of having the findings against him quashed and the remedy of some prospect of getting his costs of the abortive inquiry at the hands of the Tribunal whether as previously constituted or as freshly constituted.

Government's expenses in the Tribunal after the first set of judicial proceedings

23. Section 27 provides:

" At the conclusion of an inquiry or as soon as is reasonably practicable thereafter, the Tribunal may order any person who has been identified as an insider dealer in a determination under section 16(3) or as an officer of a corporation in a determination under section 16(4), as the case may be, to pay to the Government such sums as it thinks fit in respect of the expenses of and incidental to the inquiry and any investigation of his conduct or affairs made for the purposes of the inquiry."

If the Government wishes to seek against Mr Wong its expenses in the Tribunal after the first set of judicial proceedings, it will have to pursue the same in one of the following ways. If the inquiry concludes because the Financial Secretary withdraws his s.16 notice, the Government may pursue those expenses before the Tribunal as previously constituted, Mr Wong having waived any objection to the Tribunal so constituted when he applied to it for his costs as he did. If the s.16 notice is not withdrawn, the Government may pursue those expenses before a fresh Tribunal when that Tribunal has completed its task.

Costs here and in the courts below

24. We have been addressed on costs here and below. They were incurred because Mr Wong, insisting on his erroneous point on contamination, pursued misconceived judicial review proceedings.

Conclusion

25. In the result I would allow the appeal so as to set aside the Court of Appeal's order and restore Keith JA's order dismissing Mr Wong's application for judicial review. And I would award the Financial Secretary his costs here and in the courts below against Mr Wong.

Mr Justice Chan PJ:

This appeal

26. I agree with that conclusion. The inquiry instituted by the notice issued by the Financial Secretary pursuant to s.16 of the Securities (Insider Dealing) Ordinance, Cap 395 ("Ordinance") has not concluded; Mr Wong's application for costs made to the Tribunal was pre-mature and the Tribunal's ruling on the evidence to be used for the application for costs was not amenable to judicial review. This appeal should therefore be allowed; the application for judicial review should be dismissed; and Mr Wong should pay the Financial Secretary's costs in this Court and in the courts below.

27. Notwithstanding the quashing of the Tribunal's findings by Sears J, I also do not think that the evidence adduced at the inquiry can be regarded as having been "contaminated" such that it should be excluded from consideration by the Tribunal (whether it be the originally constituted Tribunal or a differently constituted Tribunal) when dealing with an application for costs under s.26A of the Ordinance. It is a question of what, if any, weight which might be attached to it.

Costs and expenses incurred in the abortive inquiry

28. I would like to add a few observations on how the expenses incurred by Mr Wong which are basically his legal costs in the abortive inquiry should be dealt with. The concern we have is whether this Court can put an early and proper end to this unfortunate and messy situation. In this connection, I agree with the views expressed by Mr Justice Ribeiro PJ in his judgment that the course which is now open is either for the inquiry to proceed to its conclusion since the s.16 notice is still extant or for the Financial Secretary to intervene by withdrawing the notice thus putting an end to the inquiry.

29. The Tribunal is a body established by the Ordinance to perform a public function, i.e., to make inquiry into possible insider dealings as required by a notice issued by the Financial Secretary under s.16. Both the Financial Secretary and the Tribunal are discharging a duty in the public interest: the former institutes the inquiry into possible insider dealings and the latter conducts the inquiry.

30. Although it is the Financial Secretary who institutes an inquiry, he is not a party to the inquiry and does not participate in it. Nor is he in the position of a prosecutor. Very often, the s.16 notice issued by him does not name or identify any person, let alone accusing any person as a possible insider dealer. Even if it does name or identify a particular person, it is usually for the purpose of identifying the transaction(s) in question. The Tribunal conducts the inquiry and of course does not take part in the inquiry as a party. Although the inquiry is an inquisitorial process, the Tribunal must be perceived to be impartial. If it is to be an impartial authority, there is every good policy reason to safeguard it from the risk of incurring personal liability, even if it is ultimately to be indemnified out of public funds.

31. The Tribunal has the power to make an award of costs under s.26A or to order payment of expenses under s.27: under s.26A in favour of a person who has been exonerated and who has not brought about the inquiry on himself and under s.27 against a person who is identified as an insider dealer. These are the only powers it has relating to costs or expenses incurred in the inquiry. But these powers can only be exercised at the conclusion of the inquiry. Before a conclusion of the inquiry, the Tribunal has no power to deal with this matter. When it makes an order of costs or payment of expenses, such costs or expenses are to be paid either by the Government out of general revenue (s.26A order), or to the Government (s.27 order). This also reflects the public nature of the inquiry. It is not contemplated in this legislative scheme that the Tribunal or the Financial Secretary would be personally held liable for any costs or expenses.

Court's powers under s.52A of High Court Ordinance

32. Mr Wong was not a party to the judicial review proceedings initiated by the Tans before Sears J who quashed the Tribunal's findings. Nor has Mr Wong commenced any fresh judicial review proceedings to challenge those findings. But it is accepted that had he done so, those findings made by the Tribunal against him would also have to be quashed. The question is: if he had, would the Court of First Instance (hence this Court, pursuant to s.17 of the Hong Kong Court of Final Appeal Ordinance, Cap 484) have the power to deal with the expenses he had incurred in the abortive inquiry?

33. In any judicial review proceedings subsequent to an inquiry, it is the finding or determination of the Tribunal which is subject to challenge and the Tribunal is often made a respondent to the proceedings. When the Tribunal is a party participating in the judicial review proceedings, the Court of First Instance has the power to make an order of costs either in favour of or against it in connection with those proceedings. The Secretary for Justice usually defends the proceedings on its behalf. The court makes an order of costs pursuant to its power under s.52A of the High Court Ordinance, Cap 4 which provides:

"(1) Subject to the provisions of rules of court, the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction and in the Court of First Instance, including the administration of estates and trusts, shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid.

(2) Subject to specific provision made in this or any other Ordinance (other than subsidiary legislation) nothing in subsection (1) shall authorize an award of costs against a person who is not a party to the relevant proceedings."

34. In my view, "proceedings" refers to the judicial review proceedings before the court, and not the proceedings before the Tribunal, i.e. the inquiry. It would be stretching the meaning of "costs of and incidental to all proceedings" too much to construe this to include the costs and expenses incurred in the inquiry as part of the costs of and incidental to the judicial review proceedings to give the court the power to deal with those costs and expenses. Even if "proceedings" could be construed to include the proceedings before the Tribunal, no order of costs could be made by virtue of subsection (2) against the Tribunal or the Financial Secretary as they could not be regarded as a party to those "relevant proceedings".

Court's powers consequential upon granting order of certiorari

35. Has the Court of First Instance the power to order the payment of compensation (in terms of the costs and expenses incurred in the inquiry) as part of or consequential upon the granting of relief in the judicial review proceedings? I do not think so. Judicial review is the process by which the High Court exercises its supervisory jurisdiction over the proceedings and decisions of inferior courts and tribunals charged with the performance of public acts or duties. In relation to such proceedings and decisions, the purpose of judicial review is to ensure procedural fairness, observance of the rules of natural justice, and the prevention of excess or abuse of power. (See generally Halsbury's Laws of England, 4th ed. Vol. 1(1), para. 59; and also Halsbury's Laws of Hong Kong, Vol. 1, para. 10.047.) The forms of relief which may be granted upon an application for judicial review are governed by s.21K of the High Court Ordinance which includes an order of mandamus, prohibition or certiorari, a declaration, an injunction and where appropriate, an award of damages. Any order consequential to such relief must, in my view, be aimed at the effective implementation and execution of the relief granted by the court.

36. Mr Wong's complaint (as that of the Tans) was that the Tribunal had adopted an unfair procedure resulting in adverse findings made against him. If he had applied for judicial review, those findings would also have been quashed by the Court of First Instance. But if the court was minded to make an order compensating him for the expenses incurred by him in the abortive inquiry, there would be a number of jurisdictional objections.

37. First, as Mr Justice Ribeiro PJ said in his judgment, this would in effect be making an award of costs incurred in a different set of proceedings for which there are already express provisions in the relevant Ordinance vesting the power to make such order only in the Tribunal and at the conclusion of an inquiry.

38. Secondly, an order of compensation cannot, in my view, be considered as consequential relief since it cannot be said to be made for the effective implementation or execution of the relief granted by the court, in this case, the order of certiorari quashing the Tribunal's findings.

39. Thirdly, an order compensating Mr Wong for his expenses incurred in the abortive inquiry would be in the nature of an award of damages. If so, is such an award within the ambit of s.21K of the High Court Ordinance, that is, the kind of relief to be granted upon judicial review? Is it within the contemplation of the legislation that an award of damages be made against an administrative tribunal for having adopted a procedure which was subsequently held by the court to be unfair? In this connection, I note, as Mortimer VP commented in the first set of judicial review proceedings initiated by the Tans, that there was "no intention on the part of the Tribunal to be unfair. Rather the reverse." Besides, what is the cause of action for making such an award? This is important as it affects the basis for the assessment of the compensation/ damages which may be more than taxed costs and it is costs which are what Mr Wong wants.

40. Fourthly, there is also the difficulty as to who should be the proper person against whom the order of compensation is to be made and from where should payment of such compensation come. If such an order were to be made against the Tribunal or the Financial Secretary, would they be held personally liable, bearing in mind that they are not parties to the inquiry and are performing a public duty? If they were to be held liable, this would have far reaching implications on the system of administrative tribunals operating in Hong Kong. If payment is to be made out of general revenue, on what basis can this be done? Section 26A(2) of the Ordinance allows the payment of costs to a person who is exonerated and who has not brought about the inquiry upon himself to be made out of general revenue. This applies only to an award of costs granted by the Tribunal at the conclusion of an inquiry. It does not apply to an order of compensation made by the court in a subsequent judicial review litigation. There is no statutory provision conferring such power on the court.

Conclusion

41. In my view, there are insurmountable jurisdictional difficulties in seeking to make an order of compensation as a consequential relief upon the granting of an order of certiorari. Much as I would wish to put an end to this sad state of affairs now instead of referring the matter back to the Tribunal, I too am of the view that the inquiry should first be brought to a conclusion and then the question of costs, wasted or otherwise, is to be dealt with by the Tribunal.

Mr Justice Ribeiro PJ :

The inquiry

42. On 28 December 1995, the Financial Secretary issued a notice to the chairman of the Insider Dealing Tribunal pursuant to section 16 of the Securities (Insider Dealing) Ordinance, Cap 395 ("the Ordinance"), requiring the Tribunal to institute an inquiry into dealings in shares in Paragon Holdings Limited during the period from 3 March to 7 May 1993.

43. Section 16(3) of the Ordinance defines the object of such an inquiry in the following terms :-

Section 16(3)

"The object of an inquiry shall be to determine at the conclusion of the inquiry or as soon as is reasonably practicable thereafter, within the terms of reference of the inquiry as defined under subsection (2) -

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

(b) the identity of every insider dealer; and

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

44. The particular Tribunal constituted for this purpose was chaired by Yam J and sat during 1996. On 3 June 1997, it delivered a report to the Financial Secretary and provided copies to certain implicated persons, more particularly to two residents of Malaysia, Dato Tan Leong Min and Tan Fo King (together "the Tans") and the respondent in the present appeal ("Mr Wong"). That report was not published and was incomplete. By section 22(2) of the Ordinance, such a report must, among other things, "contain the reasons for its determinations under section 16(3)" and reasons for any punitive order made. While the report had identified the persons concerned as insider dealers, it did not contain a determination of the amount of any profit gained or loss avoided as a result of the insider dealing, as required by section 16(3)(c).

The Tans' application for judicial review

45. At that point, judicial review proceedings instituted by the Tans intervened and, for the reasons described by Mr Justice Bokhary PJ, on 1 April 1998, Sears J quashed the Tribunal's findings and directed that any continuation of the inquiry should be in the hands of a differently constituted tribunal (see Dato Tan Leong Min v The Insider Dealing Tribunal [1998] 1 HKLRD 630).

46. That ruling was upheld in the Court of Appeal on 27 January 1999 (see Dato Tan Leong Min v The Insider Dealing Tribunal [1999] 2 HKC 83). As the Tans had not taken part in the Tribunal proceedings, they may not have incurred significant legal costs. In any event, they did not raise the question of wasted costs.

Mr Wong's application for costs

47. Mr Wong was not a party to the judicial review proceedings brought by the Tans. However, as everyone accepts, he is entitled to treat the Tribunal's determinations and findings as having equally been quashed in respect of himself. On this basis, he applied to the Tribunal, as originally constituted, for an award of costs to be made in his favour pursuant to section 26A of the Ordinance which provides as follows :-

Section 26A

(1) Subject to subsection (5), at the conclusion of an inquiry or as soon as reasonably practicable thereafter, the Tribunal may award to -

(a) any witness;

(b) any person whose conduct is, in whole or in part, the subject of the inquiry,

such sum as it thinks fit in respect of the costs reasonably incurred by him in relation to the inquiry.

(2) Any costs awarded by the Tribunal under subsection (1) shall be charged on the general revenue.

(3) The Tribunal may order that any costs awarded under subsection (1) may be taxed on the basis of any one of the scales of costs set out in the Schedules to Order 62 of the Rules of the High Court (Cap 4).

(4) Subject to any rules made by the Chief Justice under section 36, Order 62 of the Rules of the High Court (Cap 4) shall apply to the award and taxation of any costs awarded by the Tribunal under this section.

(5) This section shall not apply to any person referred to in subsection (1) who is -

(a) a person who has been identified as an insider dealer in a determination under section 16(3);

(b) an officer of a corporation who has been identified as such officer in a determination under section 16(4);

(c) a person who and in respect of whom it appears to the Tribunal has by his own acts or omissions caused or brought about (whether wholly or in part) the Tribunal to inquire into his conduct subsequent to the institution of the inquiry under section 16 or during the course of that inquiry; or

(d) any other person who and in respect of whom it appears to the Tribunal has by his own acts or omissions caused or brought about (whether wholly or in part) the institution of the inquiry under section 16.

48. Since the Tribunal's findings and determinations had been quashed after it had been criticised for adopting fundamentally flawed procedures, there subsisted no finding of insider dealing against Mr Wong. Nonetheless, the fact was that the Tribunal as originally constituted had indicated that it considered Mr Wong guilty of insider dealing. It may therefore perhaps be thought surprising that Mr Wong decided to approach that Tribunal for an order as to costs. Leaving aside for the moment the question whether the Tribunal, at that stage, had jurisdiction to award such costs, could it (as Rogers VP asked in the Court of Appeal) be expected to apply the section 26A criteria, particularly those in section 26A(5)(c) and (d), in a manner which was not only fair but seen to be fair? Ought the Tribunal as so constituted have recused itself on the basis of the test for apparent bias laid down in Re Medicaments and Related Classes of Goods (No 2) [2001] 1 WLR 700, and Porter v Magill [2002] 2 AC 357 (see the determination of the Appeal Committee of this Court in Deacons v White & Case Limited Liability Partnership [2003] 3 HKC 374)?

49. As Keith JA (sitting as an additional judge of the Court of First Instance below) pointed out, this issue was very much in the mind of the Tribunal and was resolved in favour of its dealing with the costs application. Keith JA explained how this was arrived at (HCAL 124/1999, 22 December 2000, at pp 9-10) :-

"A powerful argument could have been mounted for saying that, if the membership of the Tribunal remained as it had been in the course of the inquiry, its ability to evaluate fairly the evidence for the purpose of deciding whether the Applicant had brought the inquiry on himself would have been undermined by the procedurally unfair evaluation of the evidence for the purpose of deciding whether the Applicant and the other implicated persons had been insider dealers. Indeed, the Tribunal itself wanted to be addressed on the question whether it should recuse itself from considering the issue of costs. Such an argument, if successful, would have resulted in the Applicant's application for costs, and therefore the question whether the Applicant had brought the inquiry upon himself, having to be decided by a differently constituted Tribunal. Such a Tribunal, not having heard the evidence and therefore being unable to evaluate it, would either have to re-hear such of the evidence as related to the question whether the Applicant had brought the inquiry upon himself or decide that question without the evidence.

An argument along these lines had originally been advanced by counsel to the Tribunal in a skeleton argument which he had submitted to the Tribunal prior to the hearing which resulted in the ruling under challenge. Having relied on the evidence given in the course of the inquiry to make the findings of fact which resulted in the Applicant being held to be an insider dealer, counsel was concerned that the public might think that the Tribunal as originally constituted might not be able to evaluate the evidence again impartially. However, by the date of the hearing, he had had second thoughts on the matter, and his further submissions acknowledged that '[p]ublic confidence in the decision-making process of the Tribunal would be maintained so long as the Tribunal is alerted to the possible appearance of bias and approaches the question of costs with extreme care'.

For his part, the stance of Mr McCoy when he appeared at the hearing which resulted in the ruling under challenge was that the Tribunal as originally constituted should not recuse itself. Having referred the Tribunal to the modern cases on bias, including the seminal decision of the House of Lords in R v Gough [1993] AC 646, Mr McCoy told the Tribunal that there was no reason why the Tribunal as then constituted should not decide the question of costs, and therefore whether the Applicant had brought the inquiry on himself, on its merits. Thus, an argument which could persuasively have been advanced to the effect that the Tribunal as then constituted should not proceed to decide the question of costs was expressly disavowed, and the Tribunal was faced with agreement on the topic by the parties.

Everyone must therefore be taken to have accepted that the Tribunal's ability to evaluate the evidence fairly for the purpose of deciding whether the Applicant had brought the inquiry on himself had not been compromised by its previous evaluation of the evidence for the purpose of deciding whether the Applicant and the other implicated persons had been engaged in insider dealing. Thus, not only was the evidence itself not contaminated, but the Tribunal's ability to evaluate the evidence fairly for the purpose of deciding whether the Applicant had brought the inquiry on himself was accepted as not having been undermined."

50. It is of course open to a party to waive any appearance of bias and to invite the tribunal to hear the case notwithstanding possible objections. As the Court stated in Locabail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451 (per Lord Bingham CJ, Lord Woolf MR and Sir Richard Scott VC):-

"Although disqualification under the rule in the Dimes case, 3 HLCas 759 and Ex parte Pinochet (No 2) is properly described as automatic, a party with an irresistible right to object to a judge hearing or continuing to hear a case may, as in other cases to which we refer below, waive his right to object. It is however clear that any waiver must be clear and unequivocal, and made with full knowledge of all the facts relevant to the decision whether to waive or not. (at para 15) ......

We do not consider that waiver, in this context, raises special problems: see Shrager v Basil Dighton Ltd [1924] 1 KB 274, 293; Rex v Essex Justices, Ex parte Perkins [1927] 2 KB 475, 489; Ex parte Pinochet (No 2) [2000] 1 AC 119, 136-137; the Auckland Casino case [1995] 1 NZLR 142, 150, 151; Vakauta v Kelly, 167 CLR 568, 572, 577. If, appropriate disclosure having been made by the judge, a party raises no objection to the judge hearing or continuing to hear a case, that party cannot thereafter complain of the matter disclosed as giving rise to a real danger of bias. It would be unjust to the other party and undermine both the reality and the appearance of justice to allow him to do so." (at para 26)

51. It is therefore clear that Mr Wong decided to waive possible objections and to invite the Tribunal to proceed notwithstanding his knowledge of its earlier views as to his culpability and the criticisms made of its flawed procedures. This was a course acceded to by all parties involved. One should, however note, in fairness to the Tribunal, Mortimer VP's comment in the following terms : -

"Finally, it must be said that the minutes demonstrate no intention on the part of the Tribunal to be unfair. Rather the reverse." ([1999] 2 HKC 83 at 100)

52. There may have been a strong tactical element in Mr Wong's decision. Having persuaded the Tribunal to proceed with the application, Mr McCoy SC, acting for Mr Wong, submitted in effect that the Tribunal would have to proceed without looking at any of the evidence gathered in the course of the inquiry on the grounds that the matters which had led to the quashing of the Tribunal's findings had "contaminated" such evidence. If this had been accepted, it would no doubt have been submitted that (i) Mr Wong had not been identified as an insider dealer within section 26A(5)(a) or (b) (any such findings having been quashed); and (ii) that there was no "uncontaminated evidence" available to ground a finding that Mr Wong had brought the inquiry upon himself for the purposes of section 26A(5)(c) or (d). It would therefore have been urged that the only proper exercise of the discretion under section 26A(1)(b) was to award Mr Wong his costs.

Mr Wong's application for judicial review

53. The Tribunal rejected the "contaminated evidence" submissions and, without waiting for proceedings to go any further, Mr Wong instituted the judicial review proceedings which are at the origin of the present appeal. The decision giving rise to the application was identified as the Tribunal's decision :-

"that ... the evidence taken by the Tribunal in hearings of the Inquiry subsists uncontaminated by the wrongful, unfair and/or unlawful procedures it had adopted throughout the course of the Inquiry, which evidence can be used, relied upon and/or revisited by the Tribunal for the purpose of determining whether or not sections 26A(5)(c) or (d) of the Ordinance applied to the Applicant."

54. The relief sought was a :-

"Declaration that the evidence taken before the Tribunal in hearings was contaminated by the illegal, unfair and/or unlawful procedures that the Tribunal had adopted throughout the course of the Inquiry and; as a matter of law, such evidence does not subsist for and/or should be excluded from costs considerations under section 26A of the Ordinance."

55. At first instance, Keith JA dismissed the application. At its core, his judgment states as follows :-

"What was contaminated by the submissions made on the evidence in private by counsel to the Tribunal was not the evidence, but the Tribunal's evaluation of it. The evidence was still what it had always been: the testimony of witnesses about the events to which their evidence related. That testimony remained the same. Where the springs of justice became polluted was after that evidence had been given and in the course of that testimony being evaluated."

56. The Court of Appeal decided by a majority (Rogers VP and Le Pichon JA, Waung J dissenting) to allow Mr Wong's appeal.

(a) Rogers VP disagreed with Keith JA for two principal reasons. First, he did not accept that one could separate the processes of amassing and evaluating the evidence and secondly, and perhaps more fundamentally, he thought it "absurd" that the Tribunal as originally constituted should be asked to perform an evaluation of the evidence for section 26A purposes in the light of its earlier views as to Mr Wong's culpability and of the criticisms its defective procedures had attracted. Thus, his Lordship stated :-

"As has already been said, the course taken by the Tribunal on the inquiry has been held to have been fundamentally flawed and unfair. That course resulted not only in an evaluation of the evidence but in findings that had to be set aside. I do not see that it would be possible for the same Tribunal now to reach conclusions on matters akin to the original inquiry without being influenced by the conclusions to which it had previously arrived. Certainly, in my view, the appearance of fairness cannot be maintained if a Tribunal, which has been so heavily criticized for the manner in which it went about its primary task, were to attempt to adjudicate on the merits of an application, consequential on the result of the primary task, made by a party who has been a subject of the unfair treatment. In those circumstances it follows that the application under section 26 by the applicant cannot be dealt with by the original Tribunal." (at para 39)

(b) Le Pichon JA stressed the inquisitorial role of the Tribunal with the result that the private meetings between itself and its counsel "would inevitably have shaped or influenced the evidence sought to be elicited and the 'direction' of the inquiry." It followed that :-

"...... the dichotomy sought to be drawn to separate the evidence itself from the evaluation of it is wholly artificial and, in my view, intellectually unjustifiable. In the present case, the 'data' i.e. the evidence given in public was neither 'raw' nor 'pristine': rather, it became infected by what took place in the private sessions." (at para 52)

(c) Waung J, dissenting, held, in agreement with Keith JA, that there was no legal basis for treating the evidence as "contaminated" or excluded as a consequence of the Tribunal's findings being quashed, pointing out that in considering questions relevant to section 26A(5)(c) or (d), the focus is likely to be on items of evidence gathered prior to commencement of the inquiry or otherwise incapable of being regarded as "contaminated" by the criticised conduct of the Tribunal.

57. Given the conclusion that the Tribunal could not use any of the evidence gathered at the hearings, the majority's view (Rogers VP at paras 25 and 40; Le Pichon JA at para 56) was in effect that Mr Wong should be awarded his costs by a freshly constituted tribunal. It was envisaged that Mr Wong should apply to such a Tribunal for his costs under section 26A and, there not being any extant finding to disqualify him as an insider dealer under section 26A(5)(a) or (b) and, the Tribunal not being permitted to refer to "contaminated evidence" for the purposes of finding that he had brought the inquiry on himself within section 26A(5)(c) or (d), it would only remain for the Tribunal to exercise its discretion under section 26A(1)(b) in his favour on the footing that the irregularities aborting the inquiry had not been caused by him.

The difficulties posed by the majority judgment

58. The power to award costs under section 26A is subject to two conditions. First, the power is subject to and confined by the restrictions imposed by section 26A(5); and secondly, it only arises to be exercised at the conclusion of an inquiry or as soon as reasonably practicable thereafter. It cannot be exercised prior to "the conclusion of an inquiry."

59. Rogers VP, with whom Le Pichon JA agreed, was plainly alive to the latter requirement and held that the inquiry had concluded. This view was reached on two grounds. First, this was considered to be the effect of Sears J's order. As his Lordship put it :-

"An indication that the inquiry was concluded is that the order of certiorari has been made. It is clear from the Order of Sears J that if the allegations of insider dealing are to be inquired into any further a new Tribunal would have to be appointed to conduct afresh the inquiry: see paragraph 2 of his order." (at para 23)

Secondly, this was thought to be indicated by the scheme of the Ordinance :-

"In my view, it is clear from the scheme of the Ordinance and the sections to which I have referred, that it was intended that the steps would be that there would be an inquiry at the conclusion of which, or thereafter, there would be the relevant determinations followed by a report giving reasons. The determinations are therefore not part of the inquiry, as the term is used in the Ordinance, but follow it. Any order made in respect of penalties and specifically any order made in respect of costs would be on the basis of the determination of the Tribunal under section 16(3) which are set out in its report under section 22 which is required to contain its reasons.

Since the inquiry has concluded and the applicant was a person falling within section 26A(1)(b) he could apply for costs." (at paras 24 and 25)

60. To take the latter point first, I quite agree that under the Ordinance, the "conclusion of the inquiry" is something that can be reached prior to the Tribunal making any section 16(3) determinations, prior to its issuing a report and prior to making any punitive orders. That conclusion flows from the language of sections 16(3), 22(2) and 26A. I therefore also agree that the fact that the Tribunal's "draft report" did not contain a determination under section 16(3)(c) regarding profit gained or loss avoided, did not of itself mean that the inquiry had not "concluded" for section 26A purposes.

61. Nevertheless, the propositions stated above do not provide the required answer to the question posed, namely: After the quashing of the Tribunal's findings in the present case, had "the conclusion of the inquiry" been reached for the purposes of section 26A? In my view, the answer is "No".

62. As noted above, on 28 December 1995, the Financial Secretary issued a notice to the Chairman of the Insider Dealing Tribunal pursuant to section 16 of the Ordinance. As a result, the Tribunal (as permanently constituted) came under a duty to conduct the statutory inquiry. This was by virtue of section 22(1) which provides :-

"Where an inquiry is instituted under section 16 the Tribunal shall conduct the inquiry in accordance with this Ordinance, and shall prepare and issue a written report thereon."

63. In accordance with this section, the particular Tribunal chaired by Yam J was convened. It has never reported. Its findings have been quashed, but the section 16 notice is still extant and, unless varied or rescinded by the Financial Secretary so as to bring the inquiry instituted to an end, the Tribunal remains under a duty to proceed with the inquiry referred to it and ultimately to produce its report on the matter referred (albeit with a differently constituted panel). If the inquiry is revived, it would be the same inquiry as that which was referred to the statutory Tribunal on 28th December 1995. Accordingly, the conclusion of the inquiry in question has not been reached.

64. I do not think Sears J's order is inconsistent with this view of the statutory position (although if it were inconsistent, such inconsistency could not in any event prevail). That order states materially as follows :-

"(1) Certiorari is granted so that all decisions (including findings) of the Respondent Tribunal chaired by [Yam J] and appointed by the Financial Secretary under a notice issued pursuant to section 16 [of the Ordinance] dated 28th December 1995 to inquire into dealings in the securities of [Paragon] are brought up into the Court of First Instance and quashed.

(2) No member of the Respondent Tribunal chaired by [Yam J] shall sit on any other Tribunal that may be appointed by the Financial Secretary to conduct afresh the inquiry into the dealings in the securities of [Paragon]."

While it requires the membership of the Tribunal to be changed, the order plainly regards any reconvened inquiry as the same inquiry as that which was instituted by the December 1995 notice.

65. Consequently, it is my view that Mr Wong's application to the Tribunal (as originally constituted) for costs under section 26A was, to say the least, premature. As the inquiry had not concluded, the power to award such costs had not arisen. It follows that the debate as to what evidence was available to be used for determining section 26A questions, leading to the judicial review proceedings and this appeal were questions which did not, or did not yet, arise. For these reasons, it is my view that the majority's decision granting certiorari to quash the Tribunal's decision to have reference to the evidence for section 26A purposes was not properly founded and will have to be set aside. Unless and until the inquiry is concluded within the meaning of section 26A, the Tribunal has no power to make any order for costs in respect of the costs of that inquiry.

The future disposal of this matter

66. Practical guidance for the future disposal of this matter is no doubt required. I would in the first place state that I agree with Mr Justice Litton NPJ's rejection of the notion that evidence can somehow be excluded on the basis that it is "contaminated" as alleged in this case. No authority for such a rule of evidence has been cited.

67. It appears to me that the sentiments underlying this concept of "contamination" in fact reflect a rejection - not of the relevance, admissibility or probative value of the evidence gathered - but of the idea that the Tribunal which had already expressed views as to Mr Wong's culpability and whose procedures for arriving at findings of insider dealing have been severely criticised should be allowed to engage in a related exercise of evidential evaluation. This appears to me to be the source of the alleged "contamination". But, as I pointed out at the beginning of this judgment, it was Mr Wong himself who brought the matter before that Tribunal and, in the face of reservations expressed by it, unequivocally waived any objection to its undertaking the task. Mr Wong cannot at one and the same time contend that such Tribunal should proceed to deal with his costs application, but that it is somehow so stigmatised by its past that it must proceed without being able to refer to admissible evidence relevant to the task at hand. Of course, should the Tribunal as originally constituted have to deal with the matter, all parties concerned would be free in the ordinary way to make whatever submissions are required as to the admissibility or weight of any item of evidence sought to be relied upon.

68. This raises the second and more fundamental question. Mr Wong is, in my view, entitled to know where he stands both as to the fate of the inquiry and the question of costs. As a matter of law, the section 16 notice still being extant, the statutory Tribunal is obliged to reconstitute the panel to inquire into the matters referred to it. If this is what occurs, then the costs of the abortive part of the inquiry would have to be held in abeyance until the conclusion of the revived inquiry is arrived at. At that point, any applications for costs, including an application for the wasted costs, would have to be dealt with in accordance with section 26A in the light of the evidence adduced in the course of the revived inquiry.

69. However, I fully recognize that the Financial Secretary may take the view that it is not in the public interest that the inquiry should be revived and accordingly that no freshly constituted Tribunal should be appointed. Such a view might commend itself to the Financial Secretary because of the substantial lapse of time or because Mr Wong has already been subjected to the burdens of the inquiry for many years or for any other relevant reason. Since the Financial Secretary is empowered by the Ordinance to institute the inquiry, he must implicitly have power to vary or rescind his section 16 notice so as to bring it to an end without its having fulfilled all or any of the section 16(3) objectives. And where this occurs, it is my view that the inquiry will have been brought to a "conclusion" for the purposes of section 26A, activating the Tribunal's power to deal with costs in accordance with that section. It seems to me that if this were to occur, Mr Wong's application to the Tribunal as originally constituted could then properly proceed, with the Tribunal having regard to all relevant evidence adduced in the course of the aborted proceedings, in the light of the parties' submissions as to the weight and probative value of the same. Mr Wong would plainly not be ineligible for a costs award under section 26A(5)(a) or (b) as there would, on this hypothesis, be no finding identifying him as an insider dealer. However, the question would still arise as to whether he is rendered ineligible by section 26A(5)(c) or (d). Needless to say, one would expect the procedures to be adopted at any such hearing in respect of such issues to reflect the obvious need for justice not only to be done, but to be seen to be done and for such issues to be dealt with employing the utmost transparency.

An alternative approach

70. I was originally attracted by the wholly different approach, identified in Mr Justice Bokhary PJ's judgment. It involves this Court assuming a power immediately to award to Mr Wong the costs of the abortive inquiry proceedings consequential upon the order for certiorari granted by Sears J and upheld by the Court of Appeal. On this approach, Mr Wong would be treated as having intervened in those proceedings and as enjoying the full benefit of the order quashing the Tribunal's findings. It is an approach driven by a desire to compensate Mr Wong for costs thrown away as a result of the procedural deficiencies of the Tribunal which were not of his making, without having to await the outcome of any revived inquiry and with a view to avoiding further costs being expended in debating entitlement to costs before the Tribunal.

71. However, I have concluded for two reasons that this is not a viable approach. In the first place, I consider the better view to be that this Court lacks jurisdiction to make such an order. I accept of course that the Court has a general power to make orders and to give directions consequential upon the substantive orders it makes for disposing of matters which come before it. That power is routinely exercised to ensure that the substantive orders are effective. However, in the present case, the particular order proposed to be made as a consequential order is an order for costs which is a matter expressly regulated and, indeed, constrained, by statute, namely, by section 52A of the High Court Ordinance, Cap 4 and section 26A of the Ordinance. One must obviously give effect to those statutory provisions and the general power to make consequential orders cannot displace or be exercised inconsistently with any constraints imposed by such provisions.

72. Section 52A confers on the Court a statutory power to award costs, subject to rules of court, in respect of "the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction and in the Court of First Instance," with full power to determine by whom and to what extent the costs are to be paid. This Court enjoys the same power by virtue of section 17 of its statute. This is, however, a power to award costs of and incidental to proceedings before the Court itself and does not empower the Court to make such orders in respect of non-court proceedings.

73. It is section 26A which specifically addresses the entitlement to costs of persons implicated in an insider dealing inquiry. It plainly seeks to provide a complete code concerning such entitlement. Thus, it expressly allocates liability for such costs as a charge on the general revenue. It provides for such costs to be taxed on one of the bases of taxation provided for by the High Court Rules and makes O 62 of those Rules generally applicable to such costs. Most importantly, it restricts eligibility to such costs to those implicated persons who have neither been identified as insider dealers nor been found to have brought the inquiry on themselves.

74. In my view, that legislative framework does not allow room for the Court to make a costs order at large, which is not subject to any such constraints, purely on the jurisdictional basis that it is consequential to an order quashing the Tribunal's findings. This is particularly so where the payment of those costs is to be met out of the general revenue. It is for the legislature and not the Courts to determine what is and what is not to be a charge on the general revenue. The legislature has expressly made such provision in respect of the costs of implicated persons in insider dealing proceedings, subjecting such entitlement to the conditions specified in section 26A.

75. Even if the Court has jurisdiction to make the suggested consequential order, its decision to do so must be discretionary, with the consequential order made perceived to be necessary to give effective relief. These discretionary considerations furnish my second reason for concluding that the alternative approach should not be followed. The case for making a consequential order so that Mr Wong would be given an avenue for making a claim for his wasted costs may be thought to be strong where no such avenue otherwise exists. Thus, if Mr Wong had fallen between two stools so that no application for costs could be entertained either under section 52A of the High Court Ordinance or under section 26A of the Ordinance, it might have been a compelling discretionary reason for the Court itself taking up the question of his costs. However, as indicated above, section 26A remains available as the basis for dealing with Mr Wong's costs, with its provisions to be activated as and when the inquiry is brought to a "conclusion". There is accordingly no necessity for the Court, as it were, to improvise a costs remedy. The better course is for the Court to intimate, as I have sought to do, that the inquiry should, one way or another, be brought to a conclusion so that the application for costs under section 26A can proceed.

76. I quite see the argument that any course which does not lead to an award of the costs for the abortive inquiry proceedings to Mr Wong would be unjust since he was not responsible for the Tribunal's procedural errors leading to the quashing of those proceedings. However, I do not consider that argument to be sound. If one accepts, as I do, that section 26A establishes the proper framework for determining any person's entitlement to costs incurred as a result of being implicated in an insider dealing inquiry, then such entitlement, to be determined at the conclusion of the inquiry, only exists where the claimant was neither found to have been an insider dealer nor found to have brought the inquiry on himself. This is the case no matter how the inquiry was brought to its conclusion: whether after section 16(3) determinations and any punitive orders have been made and a report has been published; or after the inquiry is terminated by the Financial Secretary for some policy reason before that stage has been reached or where, as might possibly occur in the present case, an incomplete report is stillborn as a result of successful judicial review proceedings, followed by the Financial Secretary's termination of the inquiry. I do not think that the manner by which an inquiry concludes, even if it is the result of the Tribunal's procedural deficiencies, is capable of excluding consideration of the question whether the person concerned brought the inquiry upon himself or of elevating his claim for costs under section 26A to one which should automatically be granted.

Conclusion

77. Mr Wong made an application to the Tribunal which it lacked jurisdiction to entertain, he then launched judicial review proceedings in respect of a purely interlocutory ruling which (for the reasons given by Mr Justice Bokhary PJ and Mr Justice Litton NPJ) was not properly susceptible to judicial review and he furthermore advanced a contention as to the excluding of "contaminated evidence" which has been rejected as unfounded. While the focus and division of opinion in the Courts below have been on the last of these three issues, all three have been resolved against Mr Wong in this Court. In such circumstances, he must bear the relevant costs here and in the Courts below.

78. As it is my view that this Court does not have jurisdiction to make orders as to the costs of proceedings before the Tribunal, any claim for the costs of the hearing before the Tribunal leading to the application for judicial review before Keith JA will have to be resolved by the Tribunal as and when the inquiry is brought to a conclusion.

79. For the reasons given above, I would concur in making the orders, enumerated by Mr Justice Bokhary PJ.

Mr Justice Litton NPJ :

Introduction

80. The history of these proceedings, set out fully in the judgments of Mr Justice Bokhary PJ and Mr Justice Ribeiro PJ, needs no repetition. I find myself so much in agreement with Mr Justice Ribeiro PJ's judgment that I was at first inclined simply to adopt that as my own; but as the case is unusual and has wide implications for the rule of law in Hong Kong, I will endeavour to add a few words.

81. The matter comes up to this Court as an appeal against an order of certiorari of the Court of Appeal, quashing a decision of the Insider Dealing Tribunal. From the outset the proceedings went awry.

82. To understand how this occurred it is necessary to go back to the beginning : To the notice dated 28 December 1995 by which the inquiry was instituted in terms of s.16(2) of the Securities (Insider Dealing) Ordinance, Cap.395. That notice required the Tribunal to determine three matters, enumerated as paras.(a), (b) and (c), in accordance with s.16(3) of the Ordinance. The Tribunal purportedly determined the matters set out in paras.(a) and (b), and so reported to the Financial Secretary on 3 June 1997. It made no findings in relation to para.(c), which it was under a statutory duty to do. Hence it never completed the inquiry. But it did make findings of insider dealing against two Malaysian residents (for convenience called the Tans) and Mr Felix Wong.

83. The Tans went to the High Court and succeeded in having those findings of insider dealing quashed upon judicial review by Sears J. (see Dato Tan Leong Min v. Insider Dealing Tribunal [1998] 1 HKLRD 630). Because of the reasons for Sears J's order, everyone accepts that, by implication, the Tribunal's findings against Mr Wong were quashed as well. What this means, in the eyes of the law, is that Mr Wong has not been "identified as an insider dealer in a determination under s.16(3)" in terms of s.26A(5)(a). But does this mean that Mr Wong could apply to the Tribunal for an order for his wasted costs when he did? Note the opening words in s.26A(1) :

"(1) Subject to subsection (5), at the conclusion of an inquiry as soon as reasonably practicable thereafter, the Tribunal may award ... etc."

Judicial Review

84. The decision sought to be quashed by judicial review was made by the Tribunal in the course of entertaining Mr Wong's application for costs : It was made upon counsel's submission that all the evidence was "contaminated" and should be excluded : The Tribunal rejected that submission and held that evidence taken by it in public hearings could be considered in determining the application for costs. Mr Wong was dissatisfied with this ruling.

85. In his application for leave to apply for judicial review the matter was put thus : The decision to be challenged was a decision that :

"the evidence taken by the Tribunal in hearings of the Inquiry subsists uncontaminated by the wrongful, unfair and/or unlawful procedures it had adopted throughout the course of the Inquiry, which evidence can be used, relied upon and/or revisited by the Tribunal for the purpose of determining whether or not ss.26A(5)(c)or (d) of the Ordinance applies to the Applicant."

86. The relief sought in the application was for (i) an order of certiorari to quash that decision and (ii) a declaration that the evidence was "contaminated" for the reasons set out above and "as a matter of law" such evidence "does not subsist for and/or should be excluded from costs considerations under s.26A of the Ordinance".

87. At the hearing before us, counsel conceded that the declaration as sought was "odd".

88. In fact, it was more than odd. The application was fundamentally flawed :

(i) The so-called "decision" was nothing more than a ruling on evidence. What the Tribunal said was :

"... we reject Mr McCoy's submission that the evidence taken by the Tribunal in its public hearings were so tainted that there is simply no evidence now before the Tribunal for the Tribunal to consider whether or not s.26A(5)(c) or (d) applies to [the applicant]."

This ruling did not touch upon any substantive rights of the applicant; it did not resolve any substantive issue and was not the final determination of anything.

(ii) The proposition upon which the ruling was based was itself unsound : There is no principle of law whereby relevant evidence might be excluded because it was "contaminated" in the way suggested here : The proposition has nothing to do with the principles evolved in the criminal courts whereby improperly obtained evidence might, in some limited circumstances, be excluded. Obviously, where, for instance, testimony has been received without an implicated party having been given the opportunity to challenge it by cross-examination or by rebutting evidence, its evidentiary value is virtually nil. This goes to weight, not admissibility.

89. It is perhaps worth repeating here that judicial review is an exceptional remedy. It is not granted as of right. The origin of the jurisdiction lies in the old prerogative writs whereby, as Lord Denning MR reminds us in O'Reilly v. Mackman [1983] 2 AC 237 at 252, it was the sovereign himself who called upon the inferior tribunal to account for its action.

90. As regards the procedure for applying for judicial review, the first - and perhaps the most obvious - point to note is that the aggrieved party must first obtain leave before he can make his application : O.53 r.3. This is not mere formality. As I observed in Ho Ming-sai v. Director of Immigration [1994] 1 HKLR 21 at 26, the discretion vested in the court under O.53 r.3 is not an easy one to exercise, particularly as it is dealt with ex parte : The intention behind the rule is that public authorities and the like should not be vexed with hopeless applications.

91. The second point to note is that the remedy lies in the court's discretion : Hence, it is relevant to see whether there is some other remedy open to the aggrieved party. As Sir John Donaldson MR observed in R. v. Epping and Harlow General Commissioners [1983] 3 All ER 257 at 262 - dealing with an appeal from a refusal of leave by the Divisional Court - it is a cardinal principle that, save in the most exceptional circumstances, the jurisdiction will not be exercised where other remedies are available and have not been used.

92. As to jurisdiction, s.21I (1) of the High Court Ordinance merely says that the Court of First Instance shall have jurisdiction to make orders of mandamus, prohibition and certiorari in those classes of cases in which it had power to do so immediately before the commencement of the Supreme Court (Amendment) Ordinance 1987, without stating what the scope of those remedies might be. Where the matter is as wide as that, it is of particular relevance to adhere to established principles, lest these important remedies be debased and their procedures abused by over-zealous applications.

93. Turning more specifically to the scope of judicial review, it is, broadly speaking, the means by which judicial control of administrative action is exercised. It is not every decision by a decision maker which is susceptible to review : Were it otherwise the functioning of the executive arm of government and of statutory bodies and tribunals would be ensnared in multiple applications in the courts. As put by the authors of Administrative Law : Wade and Forsyth (8th ed.) p.600-601 :

"As the law has developed, certiorari and prohibition have become general remedies which may be granted in respect of any decisive exercise of discretion by an authority having public functions ..."

94. The emphasis here is on the decisive nature of the exercise of power. An example given in Administrative Law : Wade and Forsyth at p.600 is R. v. St. Lawrence's Hospital ex p. Pritchard [1953] 1 WLR 1158 where the court refused to grant the remedy to quash a mere report, being a report as to the need for continued detention of a mental defective : The report was an intermediate step to detention : The body that made the report had no power to make the detention order. That case was decided under the old prerogative writs, long before the reforms which brought in judicial review under O.53, but there is no reason to think that it would have been decided differently today.

95. As Mason CJ said in Australian Broadcasting Tribunal v. Bond (1990) 170 CLR 321 at 337, an essential quality of a reviewable decision is that it is a substantive determination : Thus

"the refusal by a decision-maker of an adjournment at an administrative hearing would not constitute a reviewable decision, being a procedural matter not resolving a substantive issue and lacking the quality of finality".

Here, the "decision" of the Tribunal was far from definitive. Indeed the first instance judge entertained the possibility of separate "inquiries" by the Tribunal into "each piece of evidence" to determine whether such evidence was "contaminated" : With, presumably, the possibility of judicial review at each step. The pernicious nature of such proceedings, if legitimate, cannot be overstated.

96. It follows from what is said above that there were two fundamental problems in the proceedings in the courts below :

(i) the inquiry (instituted by the notice of 28 December 1995) not having concluded, the Tribunal's hearing of the application for costs was premature;

(ii) the tribunal's ruling, made in the course of hearing that application for costs, was not amenable to judicial review.

The Court of Appeal's order, granting certiorari, plainly cannot stand.

The way forward

97. In the unusual circumstances of this case, how should this Court proceed? Mr Justice Bokhary PJ in his judgment has adumbrated a way forward: That this Court might itself deal with those costs. It involves a number of assumed steps to cut through the procedural tangle : That Mr Wong has made a proper application under Ord. 53 of the Rules of the High Court and is now a party in the Tan proceedings; that the appellate processes leading to this Court have been undertaken; upon these assumptions, this Court should now exercise its powers under s.17(1) of the Hong Kong Court of Final Appeal Ordinance, Cap.484 to take in hand the question of the wasted costs. There is much to be said for taking drastic procedural steps in the unusual circumstances of this case, but has the High Court jurisdiction, in judicial review proceedings, to deal with Mr Wong's costs incurred in 1996 in the Tribunal proceedings? It is to that jurisdiction that I now turn.

Jurisdiction as to costs

98. Section 52A(1) of the High Court Ordinance, Cap.4 provides :

"Subject to the provisions of rules of court, the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction and in the Court of First Instance, including the administration of estates and trusts, shall be in the discretion of the Court, and the court shall have full power to determine by whom and to what extent the costs are to be paid."

99. Assuming that Mr Wong were now joined as a party to the first judicial review proceedings and the findings of insider dealing were quashed in his favour as well, would the judge have had power to award him his costs incurred in the abortive proceedings? More accurately, can those wasted costs be treated as "costs of and incidental to all proceedings ... in the Court of First Instance" in terms of s.52A(1)?

100. Plainly, they are not costs of the High Court proceedings : Are they costs incidental to those proceedings?

101. In my judgment the word, "costs incidental to" the High Court proceedings cannot be stretched so far as to cover the wasted costs in the abortive proceedings. Mr Wong incurred his expenses in 1996 in the course of the Tribunal's hearings : By no stretch of language could his expenses thus incurred be said to be costs incidental to the subsequent High Court proceedings. I do not understand any member of this Court to think otherwise.

102. Wherein lies then the High Court's jurisdiction to award costs?

Brief historical surrey

103. One starts with the proposition that, historically, at common law, the court had no power to award costs.

104. As Lord Blackburn pointed out in Garnett v. Bradley (1878) 3 App. Cas. 944 at 962 :

"Costs in Courts of Common Law were not by Common Law at all, they were entirely and absolutely creatures of statute ..."

Hence, in R v. Beadle [1857] 7 EL and BL 492; 119 ER 1329 the order of Quarter Sessions awarding costs to a successful defendant was quashed for want of jurisdiction. Lord Campbell CJ put the matter succinctly thus :

"... as yet, there is no enactment applicable to this case where, on an information for a penalty under an Excise Act, there has been an acquittal, an appeal against that acquittal, and a confirmation of it. It would be becoming that a party thus twice tried, and twice acquitted, should have his costs; but he has them not by common law; and there is no enactment giving them to him."

105. In the Court of Chancery, the position was different - see the observations of Lord Hatherley in Garnett v. Bradley at 957 - the Court of Chancery always having had a wide discretion as to the measure and extent as to costs : see also Andrews v. Barnes (1888) 39 Ch.D. 133 at 138.

106. Then came the Judicature Act 1875, mingling the jurisdictions of the courts of common law and equity. By Order LV (incorporated as part of the Act in the schedule) judges of the High Court were given a general discretion as to costs. Order LV is in these terms :

"Subject to the provisions of the Act, the costs of an incident to all proceedings in the High Court shall be in the discretion of the Court; but nothing herein contained shall deprive a trustee, mortgagee, or other person, of any right to costs out of a particular estate or fund to which he would be entitled according to the rule hitherto acted upon in Courts of Equity : Provided, that where any action or issue is tried by a jury, the costs shall follow the event, unless upon application made at the trial, for good cause shewn, the Judge, before whom such action or issue is tried, or the Court shall otherwise order."

107. Plainly, the intention of the legislature was to sweep all the powers of the judges of the High Court as regards costs under one roof : categorized by Lord Hatherley in Garnett v. Bradley at 955 as the judge's "absolute discretion (meaning of course his judicial discretion) to determine this question of costs".

108. Ever since that time, the jurisdiction in England to award costs has been entirely statutory. Thus, in Zanussi v. Anglos Venezuelan Real Estate and Agricultural Development Ltd, (1996 The Times April 18), the Court of Appeal held that the English statute did not confer jurisdiction to award costs other than costs incurred in the proceedings before the court or incidental to those proceedings.

109. In Hong Kong the Supreme Court of Judicature was first established in 1844 by Ordinance No. 15 of that year. In essence the law of England was introduced into Hong Kong, except where local conditions rendered them inapplicable or where they had been modified by laws passed by the local legislature. The Supreme Court Ordinance of 1873 established the model for the modern Supreme Court which existed (with many modification) until the resumption of sovereignty in 1997. Throughout this period the jurisdiction and the practice relating to the award of costs in Hong Kong followed that of England : To the extent that the current s.52A(1) of the High Court Ordinance is in terms virtually identical to s.51(1) of the Supreme Court Act 1981.

110. It follows from what is said above that in Hong Kong, as in England, the jurisdiction of the High Court to award costs is statutory. It would seem from the High Court of Australia's judgment in Knight v. F.P. Special Assets Ltd (1992) 174 CLR 178 that the development of the jurisdiction as to costs in Queensland followed the same pattern as in Hong Kong : The jurisdiction now being entirely regulated by statute.

Is there some interstitial jurisdiction?

111. As Mr Wong's wasted costs cannot come within s.52A(1) of the High Court Ordinance, is there some residual jurisdiction vested in the High Court which might enable a judge to make him an award of costs? Or some interstitial space in the fabric of the law where the judge might lawfully act?

The real issue

112. It is important to define what precisely is in issue here. Mr Wong incurred his expenses in tribunal proceedings in 1996. The award of costs, for or against Mr Wong, was regulated by the Securities (Insider Dealing) Ordinance. Any expectation he might have had that some of those expenses might ultimately be borne by someone else (in effect, out of general revenue) was conditional upon two things : (1) That he was not identified as an insider dealer by the Tribunal and (2) that he was not found to have brought the proceedings upon himself in terms of s.26A(5). True it is that he could not have anticipated that those expenses would be wasted in consequence of the irregular practices of the Tribunal, with the possibility that he might have to incur similar expenses again with a fresh inquiry. But, as Mr Justice Ribeiro PJ has pointed out in his judgment, s.26A provides a complete code for dealing with tribunal costs and allocates liability for such costs as a charge upon the general revenue. Section 26A looks to the conduct of implicated parties in the award of costs. Here, in relation to the wasted costs, Mr Wong is blameless; he did nothing to cause the Tribunal to adopt unfair procedures. So the analysis turns upon the conduct of the Tribunal in causing the situation of wasted costs to develop. The debate, then, strays from the field of costs to that of compensation for alleged wrong done : Here, there is an insuperable difficulty : There has never been any suggestion that Mr Wong has some cause of action against the Tribunal that might have enabled the court to make an award of damages under Ord. 53 r.7 of the Rules of the High Court. The order to be made, if such jurisdiction exists, would not have been for the taxation of costs by a taxing master, but some form of order for assessing monetary loss.

Inherent jurisdiction

113. Mention was faintly made at the hearing before us of the inherent jurisdiction of the High Court being called in aid : It is right that it should be faint. The inherent jurisdiction of the court is part of procedural law, not of substantive law : It enables the court to maintain its authority and to prevent its processes being obstructed and abused : see Lord Morris of Borth-y-Gest in Connelly v. DPP [1964] AC 1254 at 1301 and see generally Halsbury's Laws of Hong Kong Vol.5(1) para.90.0019.

114. Plainly, the power to make an order against the Tribunal compensating Mr Wong for his wasted costs does not come within the inherent jurisdiction of the court. The objection is not removed by the notion that, in practice, the money would come from government coffers and not out of the pockets of the members of the Tribunal.

An order incidental to certiorari?

115. Can the order be justified, then, as one incidental to the order for certiorari? If it is to be categorized as compensation it attracts all the objections as set out above. And if it be categorized as costs it begs the very question : Wherein lies the jurisdiction outside the scope of s.52A(1) of the High Court Ordinance and s.26A? To suggest that it can be treated as something incidental to the order for certiorari is to make a quantum leap, wholly without precedent. Of course, when a court makes an order of any kind - be it certiorari or anything else - it is incumbent on the court to ensure that the order is effective : Hence, there must be jurisdiction to make incidental orders. But here, an order quashing the findings of the Tribunal would have been effective in itself. And, as Mr Justice Ribeiro PJ has remarked, a general power to make consequential orders cannot displace or be exercised inconsistently with constraints imposed by statute.

The Financial Secretary's election

116. The way forward, as adumbrated in Mr Justice Bokhary PJ's judgment, being blocked by the lack of jurisdiction, a practical solution has to be found. In this regard I would adopt what Mr Justice Ribeiro PJ has said under the heading "The future disposal of this matter". The inquiry, instituted by the notice of 28 December 1995, being still on foot, the Financial Secretary has two courses open to him :

(i) To require the tribunal (a standing body) to conduct a fresh inquiry under that notice; or

(ii) To withdraw the notice, in which case the inquiry would have been brought to a conclusion.

117. In the case of (i) above, Mr Wong's wasted costs become simply part of the costs of the inquiry, to be dealt with summarily at its conclusion under s.26A.

118. In the case of (ii) above the original three members of the Tribunal (happily still available) will have jurisdiction to entertain Mr Wong's application for costs (if he is still minded to make such an application). All objections to that Tribunal regarding it's ability to deal properly with the application having been irrevocably waived, the Tribunal will simply have to do the best it can in the circumstances of the case : Remembering that the determination of costs is a summary process. One would not expect days and days of hearing before the Tribunal, piling costs upon arguments as to costs. Obviously, the Tribunal can no longer make an order under s.27 that Mr Wong pays to the government the expenses of the inquiry and of the investigation of his conduct and affairs, since the finding that Mr Wong has been identified as an insider dealer must be deemed to have been quashed; but that still leaves the disqualification under s.26A(5)(c) to be considered, in the light of such material as the Tribunal feels it can fairly entertain. No better guidance can or should be given to the Tribunal in this regard : Bearing in mind, of course, what the members of this Court have said concerning the "contamination" of evidence.

Conclusion

119. I agree with the orders proposed by Mr Justice Bokhary PJ. The costs of the proceedings in the Tribunal leading to the application for judicial review before Keith JA will have to be resolved by the Tribunal as and when the inquiry is brought to a conclusion.

Lord Millett NPJ:

120. I agree with the judgment of Mr Justice Bokhary PJ.

Mr Justice Bokhary PJ:

121. The Court is unanimous. We allow the appeal so as to set aside the Court of Appeal's order and restore Keith JA's order dismissing Mr Wong's application for judicial review. And we award the Financial Secretary his costs here and in the courts below against Mr Wong. Mr Wong's costs of the abortive inquiry and the Government's expenses in the Tribunal after the first set of judicial review proceedings are for the Tribunal to deal with after the inquiry has concluded.