HONG KONG FOREX INVESTMENT LTD v. SECURITIES AND FUTURES COMMISSION

cacv 26/2008

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 26 of 2008

(on appeal from SFAT NO. 6 of 2007)

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D E C I S I O N

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1.  This is an application in respect of an order made by the Securities and Futures Appeals Tribunal yesterday.  It comes late in the day today.  The matter before the Securities and Futures Appeals Tribunal, which was Stone J sitting alone giving directions, was an appeal from the Securities and Futures Commission in respect of a notice of final determination under section 12 of the Leveraged Foreign Exchange Trading Ordinance and sections 194 and 198 of the Securities and Futures Ordinance.

2.  I have had a chance of reading through the decision of the Securities and Futures Commission and one thing is absolutely abundantly clear, this is a very serious breach of the Ordinance; not only a serious breach of the Ordinance, but it was a deliberate breach of the Ordinance.  The appellant in this case had very good reason to know what was going on and, apparently, breaches of the Ordinance were going on whilst previous complaints were being dealt with.

3.  To my mind, there is absolutely no defence in this case and, indeed, the application to the Securities and Futures Appeals Tribunal is an application in respect of the sentence.  The sentence was that the licence should be revoked.  The submission that was made to Stone J was that the licence should only be suspended for one month and that there should be a penalty of $10 million, which is likely in any circumstances to be extremely small and almost insignificant in very many respects in financial circles.  The judge said that he could not, as far as he was concerned, see any possibility of the penalty being reduced to any less than 5½ months, which would take it up to July when the appeal of Mr Tse Shiu-hoi is to be heard.

4.  In those circumstances, what he did was make an order - and I have a draft order in front of me - that there is to be a stay of the revocation as imposed by the Securities and Futures Commission by notice of final decision dated 27 August 2007, on the terms that:

(1)     there should be an interim suspension of the Applicant’s licence, such interim suspension to take effect as from 4 am on Wednesday, 30 January 2008, Hong Kong time, and to last until the determination of the hearing of the Securities and Futures Appeals Tribunal Application No. 10 of 2007, between Tse Shiu-hoi and Securities and Futures Commission on 15 and 16 July 2008;

(2)     the said interim suspension be effected on the terms set forth in the schedule to this order; and

(3)     the application do stand adjourned until the hearing of Tse Shiu-hoi’s application on 15 July 2008.

and then he gave directions for the parties to attend on 4 February of this year.

5.  What is said on this application is that the judge had no power to make such an order because the powers of the Tribunal are contained in section 219 of the Securities and Futures Ordinance, Cap. 571.  What is said is that there is no power under section 219(1)(i), which provides that:

“(1)	Subject to the provisions of Part I of Schedule 8 and to any rules made by the Chief Justice under section 233, the Tribunal, for the purposes of a review, may on its own motion or on the application of any of the parties to the review-
		…..
	(i)	stay any of the proceedings in the review on such grounds and on such terms and conditions as it considers appropriate having regard to the interests of justice.”

6.  In my view, the judge clearly did have power to make the order that he made and I see no reason why he should not.  The sort of order that he made is the sort of order that one quite often makes when injunctions are granted.  One demands an undertaking from a defendant in similar terms to the injunction, pending an appeal or whatever.  In my view, clearly there was power.  That is the basis of this application, that there was no power. 

7.  In my view, this was a matter of discretion for the judge, sitting as the Appeals Tribunal.  I see no grounds to interfere with his decision, and this last-minute application, in my view, has to be dismissed because these matters must go ahead and things cannot be left lying around forever and a day.  The Securities and Futures Commission have reached their decision.  It has gone to the Appeals Tribunal and I think it would be quite wrong for this court at this hour to interfere with that.