CHONG WAI LEE, CHARLES AND ANOTHER v. INSIDER DEALING TRIBUNAL AND ANOTHER

CACV 96/2007, CACV 102/2007, CACV 104/2007,
CACV 106/2007, CACV 107/2007, CACV 108/2007,
CACV 109/2007 AND CACV 112/2007

CACV 96/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 96 OF 2007

(ON APPEAL PURSUANT TO SECTION 31 OF THE

SECURITIES (INSIDER DEALING) ORDINANCE, CAP. 395

FROM DETERMINATIONS AND ORDERS OF AN

INSIDER DEALING TRIBUNAL IN RELATION TO

VANDA SYSTEMS AND COMMUNICATIONS HOLDINGS LIMITED)

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BETWEEN

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J U D G M E N T

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Hon Rogers VP:

1.  These were eight appeals by a total of 10 appellants in respect of determinations of the Insider Dealing Tribunal (“the Tribunal”) given in the Tribunal’s Report to the Financial Secretary dated 26 March 2007. At the conclusion of the hearing of these appeals judgment was reserved.

2.  The Tribunal had been directed to consider whether there had been insider dealing, as that term is defined in the Securities (Insider Dealing) Ordinance Cap. 395 (“the Ordinance”), in relation to the listed securities of Vanda Systems and Communications Holdings Limited (“Vanda”), specifically between 14 and 17 February 2000. In the event that the Tribunal so found, it was directed to identify each and every insider dealer and the amount of any profit gained or loss avoided as a result of such insider dealing.

3.  The Tribunal found that all the implicated parties had acted in contravention of the Ordinance as follows:

a. Lam Hon Nam had been in breach of section 9(1)(c) by disclosing relevant information to Silvia Chan Yuk.

b. Silvia Chan Yuk had been in breach of section 9(1)(c) by receiving relevant information from Lam Hon Nam and dealing in Vanda shares.

c. Ernest Choy Ming Yan had in breach of section 9(1)(a) and 9(1)(c) by counselling his wife, Becky Chan Lai King, to purchase Vanda shares and disclosing relevant information to her knowing she would use it to purchase Vanda shares.

d. Becky Chan had been in breach of section 9(1)(e) by receiving relevant information from her husband Ernest Choy and dealing in Vanda shares.

e. Chris Wong Cheung Hung had been in breach of section 9(1)(e) by receiving relevant information from Debbie Ng Kit Ying knowing it came from a connected person and dealing in Vanda shares.

f. Christie Wo Man Shan had been in breach of section 9(1)(e) by receiving relevant information from Sammy Tse Kwok Fai and procuring dealing in Vanda shares.

g. Charles Chong Wai Lee had been in breach of section 9(1)(e) by receiving relevant information from Sammy Tse and dealing in Vanda shares and counselling and procuring his sister Becky Chong Bun Bun to purchase Vanda shares.

h. Chong Bun Bun had been in breach of section 9(1)(e) by receiving relevant information from her brother Charles Chong knowing it came from a connected person and dealing in Vanda shares.

i. Debbie Ng Kit Ying had been in breach of section 9(1)(e) by receiving relevant information from Sammy Tse and trading in Vanda shares on her mother’s, i.e. Fong Long’s, accounts at Taiwan Concord and South Capital and on Chris Wong Cheung Hung’s account at South Capital.

j. Dennis Li Yat Tung had been in breach of the terms of section 9(1)(e) by procuring the purchase of Vanda shares by Debbie Ng whilst he was in possession of relevant information.

k. Sammy Tse had been in breach of section 9(1)(a) by procuring the purchase by Debbie Ng of Vanda shares whilst he was a connected person in possession of relevant information and of section 9(1)(c) by disclosing relevant information to Debbie Ng, Christie Wo and Charles Chong having reasonable grounds to believe they would purchase Vanda shares, whilst he was a connected person,

4.  Sammy Tse was disqualified from being a director of or a manager in a listed company for a period of 3 years. Charles Chong was similarly disqualified for a period of 2 years and 6 months. Dennis Li, Lam Hon Nam, Debbie Ng, Chris Wong, Christie Wo and Ernest Choy were similarly disqualified for periods of 2 years. Silvia Chan, Becky Chan and Becky Chong were each disqualified for a period of 1 year. Penalties were imposed under section 23(1)(c) on all persons in respect of whom findings were made. Disgorgement orders under section 23(1)(b) were made on all those persons, save for Lam Hon Nam.

5.  The Tribunal heard 54 witnesses, including the implicated parties, in a hearing that extended over 77 days. At the risk of over simplification it can be said that the relevant information which was the subject of the Tribunal’s findings was generated in meetings which took place on 12, 14 and 16 February 2000. Those meetings were between representatives of Hutchison Whampoa Ltd and companies within its group, which will be collectively referred to as “Hutchison”, and Vanda. There had been previous approaches by Vanda to Hutchison when the former had attempted to interest the latter in its software services and projects. Vanda had apparently approached BNP Prime Peregrine (“BNP”) in late 1999 about the possibility of “spinning off” its software subsidiary and seeking a listing for it on the Growth Enterprise Market.

6.  Francis Leung of BNP arranged for the 12 February meeting that took place at Hutchison’s offices in Hutchison House. Present at that meeting were CanningFok and Peter Wong of Hutchison and Lam Hon Nam and Edmund Ma from Vanda as well as Francis Leung of BNP. Lam Hon Nam was the chairman of Vanda. He held 45.94% of its issued shares. He was described as being its controlling mind. Edmund Ma was at the time the Group Managing Director of Vanda. It is clear from the findings of the Tribunal that the outcome of the meeting was that Canning Fok considered that the idea of spinning off part of Vanda was not desirable as it was too small but that he gave, what in his terms was, the “green light” to Hutchison taking an interest in Vanda. He mentioned that that would be by way of convertible bonds, which was a method that had previously been used when Hutchison had taken an interest in Computer and Technologies Holdings Limited. Instead of Hutchison Global Crossing Ltd, with which Mr Wong was concerned, being the relevant entity it was likely to be E-commerce Resouces Limited, which came under the purview of Sammy Tse, who was Chief Executive Officer of Hutchison E-Commerce. The meeting then concluded on the basis that BNP would prepare a term sheet which would be provided by Hutchison to Vanda. The relevant persons within the 2 organisations were to explore the possibility of cooperation.

7.  The next meeting took place on Monday, 14 February. It would seem that Sammy Tse, who had not been at the first meeting, had lunch that day with Peter Wong before they both went to the meeting at 4:30 pm together with Bernard Fong. On Vanda’s part Edmund Ma, Ernest Choy and Gordon Cheung, the director of the Business Division of Vanda in the Mainland attended. There was then another meeting 2 days later on 16 February. The Tribunal’s considerations in respect of these meetings was summarised starting at page 63 of the Report. The findings of the Tribunal in relation to what transpired at these meetings can be summarised as set out in the following 4 paragraphs.

8.  The meeting on 12 February concluded on the basis of a proposal advanced by Canning Fok that Hutchison would purchase convertible bonds at a price of $3.175, that would give it an interest in an enlarged share issue of Vanda of about 20% when taken in conjunction with a share option also to be taken up by Hutchison. In parallel with that, a joint venture was to be explored between the two companies in the area of e-commerce.

9.  The proposal that Hutchison would take an interest in Vanda was in similar terms to its taking an interest in Computer and Technologies Holdings Ltd only a few weeks before and that what that meant was explained at the meeting. The information relating to that proposal thus generated at the meeting was not merely specific but precise. Furthermore, both companies treated the overall proposal seriously.

10.  In contrast, as of 12 February, the understanding that Vanda and Hutchison would explore cooperation in an e-commerce joint venture was not sufficiently specific to constitute relevant information. Nevertheless, on 14 February it was resolved that the e-commerce project to be pursued would be a “B2B” payment gateway. The joint venture then under contemplation was, by itself, specific information. It was a serious commercial proposal to cooperate within the reasonably defined field of “B2B” which went beyond a mere testing of the waters and was specific information.

11.  The Tribunal had little difficulty in concluding that the two aspects of the information, namely that relating to Hutchison taking an interest in Vanda and the proposal for the joint venture were not generally known. Having regard to the evidence, the Tribunal had no difficulty in concluding that the information was price sensitive.

The misuse of the information

12.  The Tribunal found that the use, or misuse, of the information, fell into 2 separate clusters. In the first place there was information that came from the Vanda side and was passed to those related to Lam Hon Nam and Ernest Choy and used to purchase Vanda shares. In the second place Sammy Tse was found to have been responsible for disseminating relevant information which was passed to a web of friends and acquaintances and, in one instance, to a person with whom he had not been shown to have any connection. The Tribunal held that he had only received about $80,000 but was possibly motivated by a desire to impress his acquaintances and friends.

Information coming from Vanda

Lam Hon Nam

13.  Commencing at 3:26 pm on 14 February and continuing at various times up until the afternoon of 17 February, Silvia Chan purchased 710,000 shares at a total cost of $2.95 million. She had previously worked at Vanda but her connection with Lam Hon Nam went much further. Silvia Chan’s younger sister Chan Yuk Mee was married to Lam Hon Nam and Silvia Chan was herself married to Lam Hon Nam’s younger brother, Lam Hon Yuen. The Tribunal went into very considerable detail about phone calls which it concluded were between Lam Hon Nam and Silvia Chan and as to how their timing corresponded to Silvia Chan’s purchase of Vanda shares. The Tribunal found that although Lam Hon Nam did not trade in Vanda shares himself,it was satisfied to a high degree of probability that he had passed relevant information to Silvia Chan and that he knew and had reasonable grounds to believe she would act on that information and purchase Vanda shares. There were side issues as to where the $2.3 million that was used to purchase the shares had come from. Whilst the Tribunal was prepared to accept that the money had come from the Mainland, it did not accept the explanation for it that was put forward, nor did it accept the explanation that Silvia Chan had used the money to buy the shares contrary to the intention that she had had with her husband to purchase a flat with the money.

14.  It may be noted that the Tribunal also held that Lam Hon Nam had not taken steps to procure Silvia Chan’s purchases of Vanda shares. The Report also stated that the Tribunal was not satisfied to a high degree of probability that he counselled her in her purchases though there remained a considerable suspicion that he did so. On that basis the Tribunal made the findings referred to above.

Ernest Choy

15.  Ernest Choy was married to Becky Chan. They had gone to Macau on 11 February and he did not return to work until 14 February, but, as already noted, he attended the meeting that afternoon. The Tribunal found that Becky Chan was responsible for purchasing 860,000 Vanda shares for a total cost of $3,092,956. There was a considerable coincidence or, as the Tribunal put it, symmetry in the timing of phone calls, that the Tribunal concluded were between Becky Chan and her husband, and the purchase of the shares which, coupled with the size of the purchases relative to her previous share dealing, lead the Tribunal to conclude that her husband had provided her with relevant information.

16.  In coming to that conclusion the Tribunal gave full consideration to Becky Chan’s own explanation as to why she had purchased the shares, to the fact that she may well have purchased 300,000 Vanda shares for her sister, that the first purchase of 50,000 shares was not made with relevant information and finally to the fact that she had given instructions on 11 February whilst in Macau to sell most of her exiting portfolio and had used that money to purchase the Vanda shares.

Information coming from Sammy Tse

17.  As already noted the other cluster involved Sammy Tse, who had attended the meetings on 14 and 16 February. It would appear that he had only benefited financially to a minor extent. The Tribunal had no difficulty in coming to the conclusion that Sammy Tse possessed relevant information as from 14 February. The Tribunal said that it was satisfied that as of that date he would have been aware of sufficient details of the Hutchison proposal to Vanda concerning Hutchison taking a large potential shareholding in Vanda and both companies endeavouring to participate in a joint venture in e-commerce, with the result that he would be in possession of relevant information. It concluded that he was the only possible ultimate source of relevant information for Debbie Ng, Dennis Li, Christie Wo, Charles Chong and, Chong Bun Bun and Chris Wong. Importantly, the Tribunal came to the conclusion that Sammy Tse, Debbie Ng and Dennis Li were not witnesses of truth and that their evidence was inherently unbelievable in many respects. As regards Sammy Tse, the Tribunal found his explanations of the telephone calls between himself and Christie Wo, Charles Chong and Debbie Ng “simply unbelievable”.

Debbie Ng

18.  One of the central persons in this aspect was Debbie Ng. At the time she was only 17 years old. Despite her young age she appears to have spent considerable time in stockbrokers’ offices. She dealt primarily using accounts opened in her mother, Fong Long’s name. The Tribunal calculated that she had purchased a total of 664,000 Vanda shares at a total cost of $2.72 million. The Tribunal held that Sammy Tse had, through Dennis Li, provided Debbie Ng $500,000 to purchase Vanda shares. When those shares came to be sold, money was returned and Dennis Li retained $300,000 and $80,000 was returned to Sammy Tse. Whilst the Tribunal was satisfied that Sammy Tse procured Debbie Ng to purchase the Vanda shares and that he must have known or had reasonable grounds to believe that she would purchase Vanda shares on her own behalf, it did not consider that there was sufficient evidence that he had counselled or procured Debbie Ng to purchase Vanda shares beyond those purchased with the $500,000 he had provided.

Chris Wong

19.  Chris Wong was a friend of Debbie Ng and the Tribunal was satisfied that he was not acquainted with either Sammy Tse or Dennis Li. He purchased slightly more than 600,000 Vanda shares using two separate accounts. There was another purchase of 30,000 shares in an account held in his name but the Tribunal accepted that that was an account that was operated by Debbie Ng. He had purchased the 600,000 shares on 16 February. This was the first purchase he had made of Vanda shares and the Tribunal observed that he had never made such a large purchase of a single share before. The Tribunal considered the timing of the various telephone calls which had been made between Chris Wong and Debbie Ng on 15 February and how they had been close in time to calls between Debbie Ng and Sammy Tse. Chris Wong had attempted to persuade the Tribunal that his purchases of Vanda shares were merely coincidental with the purchase of 30,000 Vanda shares in his name by Debbie Ng. Likewise he had attempted to persuade the Tribunal that telephone contacts which he had had with Debbie Ng were simply social and that it was a mere coincidence that she had been in telephone contact with Sammy Tse at about the same time.

20.  In rejecting the suggestion that the purchase of Vanda shares had been coincidental, the Tribunal took into account evidence that on 29 February and 1 March a number of parties who featured in the present enquiry were implicated in the purchase of shares in a company called Harbour Ring International Holdings Ltd (“Harbour Ring”). The relevance of that was that Sammy Tse had been involved in negotiations concerning that company on behalf of Hutchison. Although the admission of that evidence was hotly contested, the Tribunal regard it as relevant in rebutting the suggestion of coincidence and supporting the proposition that the various individuals had purchased Vanda shares as a result of their connection, direct or indirect with Sammy Tse, and not as a matter of mere coincidence.

Christie Wo

21.  Christie Wo was another friend of Sammy Tse. She also had a boyfriend, Mao Chi Fai. Christie Wo apparently regularly dealt with shares but her share dealing on this occasion was done using the trading account of her boyfriend’s secretary, Olivia Chung. Altogether some 550,000 Vanda shares were purchased in that account in the 3 days commencing 15 February. The Tribunal accepted that Olivia Chung purchased 40,000 of those shares on her own account. Not only were Christie Wo and her boyfriend together with Sammy Tse and Dennis Li at a karaoke lounge in the evening of 14 February but, importantly, there were a series of telephone calls between Christie Wo and Sammy Tse both in the afternoon of 14 February and in subsequent days which, of themselves, might be said to indicate that there were discussions which led to and respecting the purchase of the Vanda shares. There was one telephone call which seemingly might have been made either during the meeting between Hutchison and Vanda on 14 February or, at the least, immediately thereafter. There were also telephone calls late in the evening of the night of 14 February between Christie Wo and Olivia Chung. The Tribunal recorded, that on the following morning, 15 February, Olivia Chung started to sell the major part of the existing share portfolio and purchase Vanda shares.

22.  Given all the factors referred to by the Tribunal, it came to the inevitable conclusion that Christie Wo had been in possession of relevant information when she gave instructions to purchase the Vanda shares.

Charles Chong and Chong Bun Bun

23.  Charles Chong is an accountant and in February 2000 was a director of American Phil International Ltd (“American Phil”), a garment manufacturing company. He was the brother of Chong Bun Bun whose late husband had been the proprietor of American Phil. Dennis Li was a former colleague of his at American Phil. In the 3 days commencing 15 February a total of 650,000 Vanda shares were purchased for $3.08 million in accounts held in the name of Charles Chong. One of those accounts was only opened on 16 February, it was apparently operated by Chong Bun Bun and apparently only ever used for purchasing Vanda, Harbour Ring and one other share. Chong Bun Bun, herself, purchased a total of 1.1 million shares at a cost of $4.8 million.

24.  Despite the fact that the initial purchases of Vanda shares had been made on 15 February whilst Charles Chong and Chong Bun Bun had probably been at the airport in Japan waiting to come back to Hong Kong, the Tribunal had no difficulty in coming to the conclusion that the purchases of shares were made as a result of relevant information passed by Sammy Tse either directly or possibly through Dennis Li. The Tribunal did not accept the explanations for the various phone calls particularly those between Sammy Tse and Charles Chong given by Charles Chong, Sammy Tse and Dennis Li that Sammy Tse was hoping that Charles Chong could find him a maid as he was living in the same development. The Tribunal also took into account the comparative size of the trades, particularly in relation to Charles Chong’s assets and the rapidity with which those trades had been carried out.

25.  The Tribunal also took into account in discounting the suggestion that there had been a pure coincidence, that Charles Chong, as well as Chong Bun Bun, had also purchased Harbour Ring shares on 29 February and 1 March.

26.  In view of the telephone calls between Charles Chong and his sister at the relevant time and the close involvement between the two, which included Charles Chong opening an account with the same broker as his sister on 16 February, the Tribunal came to the inevitable conclusion that Chong Bun Bun had purchased the Vanda shares as a result of the relevant information given to her by her brother.

Dennis Li

27.  Dennis Li was, at the material time, a director of a garment company. The Tribunal carefully considered the evidence in relation to his involvement with Sammy Tse and Debbie Ng and came to the conclusion that he was a middleman who had received $500,000 from Sammy Tse as conduit for it to be passed to Debbie Ng who then invested the money in Vanda shares using margin facilities. The ultimate proceeds were returned to Dennis Li who kept $300,000, passed $600,000 to Christie Wo and returned $80,000 to Sammy Tse. The Tribunal could only observe that the suggestion that the $600,000 payment to Christie Wo was a loan was clearly unbelievable, not least because “repayment” was only made well after the commencement of the hearing in the Tribunal.

This appeal

28.  On this appeal a number of points were taken on behalf of the various appellants. Naturally, a number of the matters raised related to the individual cases. However, there were some objections which were taken by nearly all the appellants and will therefore be treated together.

The standard of proof

29.  At the commencement of the Report the Tribunal considered, at some length, the authorities relating to the appropriate standard of proof. Following the then existing authorities, it reached the conclusion that the appropriate standard of proof was the civil standard, but because of the nature and consequences of the allegations involved not on the basis of bare probabilities. It said that it would require proof on the basis of a high probability. The Tribunal expressly appreciated that allegations of insider dealing involved quasi-criminal elements and said:

“The standard of “high probability” is a genuinely high standard and, in our view, is commensurate with the serious allegations and consequences faced by implicated persons.”

30.  It has to be observed that a reading of the Report demonstrates the care that the Tribunal took in reaching its conclusions. The length of the proceedings themselves is another indication that the Tribunal considered the matter fully and carefully. The Report contains many instances where the persons concerned were given the benefit of a doubt which barely could command the epithet “reasonable”. Although the Tribunal applied a standard which it said was the civil standard, it was hardly, if at all, different from the criminal standard.

31.  Reliance was placed by the appellants on, in particular, the case of Solicitor (24/07) v Law Society of Hong Kong (2008) 11 HKCFAR 117 and, specifically, the passages therein relating to the standard proof. Whereas it can be said that following that decision a different wording can be used in the formulation of the Tribunal’s approach, in my view, as was held in that case, a fair reading of the Tribunal’s Report does not indicate that there was any error in approach that would vitiate the findings of the Tribunal. To put it in another way, the Tribunal only acted on evidence which it considered was compelling. In this respect I do not consider that it can be suggested that the lay members of the Tribunal approached the matter in any other way.

Inferences

32.  Following on the submissions in relation to the standard of proof it was suggested that the Tribunal was in error in drawing inferences. Again, in this regard the Tribunal directed itself that it would only draw an inference if it was a compelling inference and the only reasonable inference which could be drawn from proven facts. In the main these were inferences drawn from the timing of telephone calls in relation to the trading by the various persons. In my view, the inferences which were drawn by the Tribunal were so blatant that it would have been perverse for the Tribunal to have come to any other conclusion other than the fact that many of those calls were intimately linked with the purchase of Vanda shares.

Harbour Ring evidence

33.  It was contended that the Tribunal should not have taken into account evidence relating to the purchase of Harbour Ring shares. The basis upon which that was done and the reasons therefor were set out in the passage in the Report commencing at page 117. The evidence in relation to the purchase of the Harbour Ring shares was admitted because it was relevant to the issue as to whether the various implicated parties may have purchased the Vanda shares as a matter of innocent coincidence. As the Tribunal said:

“Quite bluntly the Harbour Ring evidence would tend to support the proposition that these individuals purchased Vanda shares as a result of their connection, direct or indirect with Sammy TSE, and not as a matter of mere coincidence.”

34.  In my view this was a proper use of that evidence. It was not admitted and it was not used to prove that the implicated parties had misused relevant information. It was used to rebut suggestions of coincidence. It was thus probabative.

35.  It was also said on behalf of the appellants that it was prejudicial because of the existence of lay members on the Tribunal who may not have understood the correct legal position in relation the evidence in relation to trading in the Harbour Ring shares. In view of what is stated in the Report itself, as well as in annexure F, I do not see that that there is any justification in saying that the lay members of the Tribunal, the Chair Professor of the Department of Finance and Decision Sciences at Hong Kong Baptist University and the Managing Director of a firm of accountants respectively, would not have understood the basis for the admission of that evidence or that there was any need to give the lay members any further warning that any conclusion as to whether there had been insider dealing in relation to Harbour Ring shares was irrelevant to the present proceedings.

36.  Nor is there justification for the suggestion that the evidence was used for reasons beyond the purpose stated. The fact remains that the relevant parties, specifically Debbie Ng and the Chongs had given explanations for the purchase of the Vanda shares which amounted to there being a pure coincidence between the purchases and Sammy Tse’s involvement in the matter on behalf of Hutchison. The evidence in relation the purchase of Harbour Ring shares was thus relevant in relation to those explanations.

37.  It was said on behalf of the Chongs that there was no evidence that Sammy Tse had relevant information in relation to Harbour Ring at the time that Charles Chong had purchased shares. But what was of probabative value was whether there was other history of Sammy Tse’s associates purchasing shares of companies that were the subject of negotiations involving Hutchison and in particular Sammy Tse, as stated at page 119 of the Report.

38.  It was argued that the evidence was not relevant because at the time Chong Bun Bun traded there was no proof that Sammy Tse knew about Harbour Ring. It is true that there was no direct evidence that Sammy Tse knew that Harbour Ring would be used as a vehicle as of 29 February. Nevertheless, Sammy Tse had attended a very relevant meeting with McKinsey on 16 February and although he was not there on 22 February, he was the CEO of Hutchison E-Commerce. It might, therefore, be expected that he would be kept abreast of prospective developments that would involve operations that were seemingly under his responsibility.

39.  Although the records of mobile phone calls did not show there was communication between Sammy Tse and Chong Bun Bun, it has to be remembered that the available of evidence did not purport to cover all means of communication between those persons: the records were restricted to mobile calls. There were no records of landline calls: see page 44 of the Report. Furthermore Sammy Tse and Charles Chong lived in the same complex.

The need to deal with each and every argument put forward

40.  Particularly on behalf of Charles Chong and Chong Bun Bun it was argued that the Tribunal was in breach of its statutory duty in failing to deal with each and every argument that had been raised on the their behalf.

41.  In my view the Tribunal clearly dealt with all the important and major arguments that had been raised. It was the Tribunal’s duty to reach findings and to give reasons for those findings. That it did. In so far as complaint is made that not every point which was raised was specifically mentioned in the Report, it can be said that it is not the duty of a court or tribunal necessarily to mention each and every argument that is considered, particularly if it concluded them to be without merit. Some arguments are so unmeritorious that it is better that they are left unmentioned. Furthermore, this court’s attention was drawn to the skeleton arguments that were put in. That on behalf of Charles Chong and his sister extended to a very close typed 80 pages with a further 40 pages of annexures. It may be said that those that consider they have good points to be made would be well advised to express them succinctly.

Whether the information was relevant information

42.  One of the matters that was raised on this appeal, in one form or another, is whether the Tribunal was justified in accepting the evidence that the information both as to Hutchison intending to take an interest in Vanda and, also, the later information that Hutchison intended to enter a joint venture with Vanda was price sensitive information. In my view the matter is so clear and obvious that it hardly requires evidence. Quite apart from that, these were issues of fact that the Tribunal was in a position to find and, secondly, no proper basis for upsetting the Tribunal’s findings was advanced. The arguments credit this court with such an ignorance of the state of affairs and common sense that they brook no further comment. Both aspects must have been clearly price sensitive. In this regard I would merely say that the point sought to be made on behalf of Ernest Choy that the price of the Vanda shares did not respond to the news of a joint venture with a Mainland entity would not affect, in any way, the conclusion which I consider the Tribunal was bound to come to in this regard.

Causation

43.  Some assistance was sought to be derived from the judgments in the case of R v Staines and Morrissey [1997] 2 Cr.App.R. 426. It was said on the basis of what had been said in that case that the Tribunal had failed to consider whether relevant parties would have purchased the Vanda shares irrespective of whether they had been in possession of relevant information. Reliance was placed upon what was said by Lord Bingham, particularly at page 438C, as to whether the disclosure of the information caused the relevant party to deal in the security in question. However, the statutory provision with which Lord Bingham was dealing was different from the Hong Kong provision. Section 9 of the Ordinance does not require proof of causation. Section 10(3) provides a defence if it is shown that the person concerned entered a transaction otherwise than with a view to profit, but none of the parties sought to rely on that defence either before the Tribunal or before this court.

The Hi-Tech Frenzy

44.  It was a constant refrain in the arguments advanced that there was a considerable interest amongst those involved in share dealing in “Hi-Tech” stocks. It was said that at the relevant time other “Hi-Tech” shares had increased in price whereas the Vanda shares had lagged behind in comparison. This is a matter which the Tribunal clearly took into consideration when considering the evidence of the respective parties. It was not a matter which on its own would cause this court to interfere with the Tribunal’s findings, nor even taken into consideration with the other points made on behalf of the appellants would it be sufficient for this court to alter the conclusions reached. I would add that the same is true of many of the points raised in argument, which were in essence an attempt to ask this court to substitute a different conclusion to that arrived at by the Tribunal, without establishing a proper basis for disturbing the Tribunal’s findings.

Untruthful witnesses

45.  Particularly on behalf of Debbie Ng, it was argued that the Tribunal was in error in taking into account lies when assessing her evidence. It is quite clear when considering pages 176-180 of the Report that any reference to the truthfulness or candour of Debbie Ng in relation to peripheral matters had no impact on the conclusion which the Tribunal found it inevitable to reach in relation to her dealings and knowledge.

Conclusion

46.  In conclusion, I do not consider that grounds have been made out which would justify this court in disturbing the conclusions of the Tribunal. The financial penalties imposed under section 23(1)(c) of the Ordinance were set aside in view of the decision in Koon Wing Yee v Insider Dealing Tribunal 11 HKCFAR 170. Save in that respect, the appeal by Sammy Tse was abandoned with no order as to costs. In respect of the other appeals, I would dismiss those appeals and make an order nisi of costs in favour of the respondents.

Hon Yeung JA:

47.  I agree with the judgment of Rogers VP and have nothing to add.

Hon Lunn J:

48.  I agree.