PCCW-HKT TELEPHONE LTD v. TELECOMMUNICATIONS AUTHORITY

CACV274/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

RESERVATION OF QUESTION OF LAW NO. 274 OF 2003

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J U D G M E N T

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Hon Ma CJHC :

The issues

1. The matter before us comes by way of a Case Stated referred under section 32R of the Telecommunications Ordinance, Cap.106 ("the TO") by the Telecommunications (Competition Provisions) Appeal Board ("the Appeal Board"). The Appeal Board is a statutory tribunal established under s.32M of the TO consisting of a Chairman (who must be legally qualified and, though not a High Court Judge, must be eligible to be one) and 2 other panel members. The Chairman of the Appeal Board in the present case was Mr John Griffiths, SC, sitting with 2 panel members, being Dr John Ho and Dr Jane Lee.

2. Section 32N of the TO states in material part as follows :-

"32N. Appeals to Appeal Board

(1) Any person aggrieved by -

(a) an opinion, determination, direction or decision of the Authority relating to -

(i) section 7K, 7L, 7M or 7N; or

(ii) any licence condition relating to any such section; or

(b) any sanction or remedy imposed or to be imposed under this Ordinance by the Authority [the Telecommunications Authority] in consequence of a breach of any such section or any such licence condition,

may appeal to the Appeal Board against the opinion, determination, direction, decision, sanction or remedy, as the case may be, to the extent to which it relates to any such section or any such licence condition, as the case may be.

(2) Subject to subsection (3), an appeal shall not suspend the operation of the appeal subject matter.

(3) Where an appeal is made and the appeal subject matter falls within section 36C, then the appeal subject matter shall be suspended in its operation from the day on which the appeal is made until the appeal is determined, withdrawn or abandoned.

(4) ..." (emphasis added)

3. We are in this Case Stated concerned with only sections 7K and 7L of the TO (dealing with, respectively, anti-competitive practices and abuse of dominant position) which can conveniently be set out :-

"7K. Anti-competitive practices

(1) A licensee shall not engage in conduct which, in the opinion of the Authority, has the purpose or effect of preventing or substantially restricting competition in a telecommunications market.

(2) The Authority in considering whether conduct has the purpose or effect prescribed under subsection (1) is to have regard to relevant matters including, but not limited to -

(a) agreements to fix the price in a telecommunications market;

(b) an action preventing or restricting the supply of goods or services to competitors;

(c) agreements between licensees to share any telecommunications market between them on agreed geographic or customer lines;

(d) the conditions of relevant licences.

(3) Without limiting the general nature of subsection (1), a licensee engages in conduct prescribed under that subsection if he -

(a) enters into an agreement, arrangement or understanding that has the purpose or effect prescribed by that subsection;

(b) without the prior written authorization of the Authority, makes the provision of or connection to a telecommunications network, system, installation, customer equipment or service conditional upon the person acquiring it also acquiring or not acquiring a specified telecommunications network, system, installation, customer equipment or service, either from the licensee or from another person;

(c) gives an undue preference to, or receives an unfair advantage from, an associated person if, in the opinion of the Authority, a competitor could be placed at a significant disadvantage, or competition would be prevented or substantially restricted.

7L. Abuse of position

(1) A licensee in a dominant position in a telecommunications market shall not abuse its position.

(2) A licensee is in a dominant position when, in the opinion of the Authority, it is able to act without significant competitive restraint from its competitors and customers.

(3) In considering whether a licensee is dominant, the Authority shall take into account relevant matters including, but not limited to -

(a) the market share of the licensee;

(b) the licensee's power to make pricing and other decisions;

(c) any barriers to entry to competitors into the relevant telecommunications market;

(d) the degree of product differentiation and sales promotion;

(e) such other relevant matters as may be stipulated in guidelines referred to in section 6D(4)(a).

(4) A licensee who is in a dominant position is deemed to have abused its position if, in the opinion of the Authority, the licensee has engaged in conduct which has the purpose or effect of preventing or substantially restricting competition in a telecommunications market.

(5) The Authority may consider conduct to fall within the conduct referred to in subsection (4) as including, but not limited to -

(a) predatory pricing;

(b) price discrimination, except to the extent that the discrimination only makes reasonable allowance for differences in the costs or likely costs of supplying telecommunications networks, systems, installations, customer equipment or services;

(c) making conclusion of contracts subject to acceptance by other parties of terms or conditions which are harsh or unrelated to the subject of the contract;

(d) arrangements (other than arrangements the subject of an authorization referred to in section 7K(3)(b)) requiring a person seeking the provision of or connection to a telecommunications network, system, installation, customer equipment or service conditional upon the person acquiring it also acquiring or not acquiring a specified telecommunications network, system, installation, customer equipment or service either from the licensee providing the service or from another person;

(e) discrimination in supply of services to competitors."

4. Sections 7M and 7N of the TO deal with misleading or deceptive conduct (section 7M) and non-discrimination (section 7N). Although on the facts of the matter before us, these two sections are not engaged, it is noteworthy that for both these provisions as well as for sections 7K and 7L, the type of conduct referred to is to be judged in accordance with the "opinion" of the Telecommunications Authority ("the TA"). The significance of this will presently be made clear. The TA is defined in the TO as a public officer appointed for the purposes of the Ordinance.

5. There are 2 broad issues for this Court to determine :-

(1) The extent of the Appeal Board's jurisdiction to deal with opinions, determinations, directions or decisions of the TA relating to sections 7K and 7L. Specifically, what is the meaning which can properly be ascribed to the words "relating to .... section 7K, 7L ....."?

(2) The existence of the jurisdiction of the Appeal Board to grant a stay pending an appeal before it.

6. Both these matters are said to be matters of considerable importance and for that reason, it was submitted by both sides that this Court should determine them even though withdrawal of the relevant appeal brought before the Appeal Board has now been sought and it might therefore be said that the Case Stated was academic. Before dealing with the question whether or not the present case is academic, I should just briefly outline the background to the Case Stated.

Facts

7. The parties before us are PCCW-HKT Telephone Limited, the Appellant in the appeal proceedings before the Appeal Board ("PCCW") and the TA, who was the Respondent in those proceedings. I shall refer to them simply as PCCW and the TA.

8. Prior to the opening up of the telecommunications industry in Hong Kong several years ago, PCCW (or rather its predecessor) held a virtual monopoly in the provision of telecommunications services. It was seen, however, to be desirable in the public interest to open up the market and accordingly, other competitors in this industry were eventually permitted to participate. Amendments to the TO were accordingly made. Nevertheless, despite this opening up of the market to competitors, PCCW had a very extensive infrastructural network that probably none of its competitors had. It was for this reason that the TO in its current form makes provisions enabling the competitors of a dominant telecommunications operator to utilize the networking of that operator by basically 'plugging into' it. Of course, fees would be payable for the benefit. In the present case, the relevant sections in this regard are sections 36A and 36B of the TO. I should perhaps note in this somewhat generalized and simplistic overview that at some stage, PCCW disputed the fact that it was in a dominant position for the type of interconnection with which we are concerned, but for present purposes, this can be assumed to be the position.

9. The relevant type of interconnection in this case is known as Type II Interconnection for broadband services ("the Broadband Type II Interconnection"). It is not necessary to go into the exact technical details of this interconnection facility but essentially, one starts with the fact that PCCW has an extensive network (using a copper-wire medium) enabling it to supply broadband services to customers. A broadband network provides a greater capacity for the transmission of information at fast speeds than a narrowband network. There are other broadband networks that use a fibre optic medium but we are not concerned with this medium in the present case. A Broadband Type II Interconnection allows a competitor to utilize PCCW's broadband network by plugging into it. Technically, there is no connection at all; rather, the competitor installs its equipment at one of PCCW's broadband exchanges. However, the use of the term 'plugging in' perhaps conveys the concept better (at least to a non-technical person). The result of the competitor being allowed to plug into PCCW's network is that the end-user (the customer) is able to use the competitor's broadband services, although such services are in reality provided by PCCW. In the words of the TA in its Statement on Broadband Interconnection dated 14 November 2000 at paragraph 3.2.10 :-

"Type II Interconnection is the interconnection to customer access networks so that network operators [PCCW's competitors] without the customer access networks can also provide broadband services to customers through the customer access networks of other network operators [such as PCCW]."

10. According to the Case Stated, in November 2000, after consulting the telecommunications industry, the TA issued the said Statement on Broadband Interconnection dated 14 November 2000. The stated policy objective of the TA in this Statement was to open up the market for broadband interconnection so that the public would have greater choice. That said, the TA recognized the need to strike an appropriate balance between more open competition and ensuring that companies like PCCW were treated fairly for allowing competitors to plug into their broadband network. The TA's conclusion was put thus at paragraph 3.3.4 :-

"... the TA maintains the view that the proper balance between the maintenance of investment incentives and promotion of open access and effective competition should be achieved through the choice of the appropriate pricing models."

As far as the terms of any interconnection were concerned, the TA maintained the view that while parties were encouraged to negotiate their terms of any 'plugging in' themselves, the TA would intervene where parties were not able to reach agreement. The TA would then attempt to strike the balance mentioned above.

11. Following this Statement, from December 2000 onwards, one of PCCW's competitors, Wharf T & T Limited ("WTT") began negotiating with PCCW with a view to establishing a Broadband Type II Interconnection using PCCW's existing network. No agreement, however, could be reached. In July 2001, WTT asked the TA to make a Determination under section 36A of the TO. This section provides that the TA may itself determine the terms and conditions of any interconnection between parties.

12. PCCW objected to the TA making a Determination under section 36A, but at the same time submitted a tariff proposal for broadband interconnection. This tariff proposal was made under General Condition 22 ("GC22") of the terms of PCCW's Fixed Telecommunications Network Services Licence issued on 31 March 1998. GC22 provides that where PCCW proposed to introduce any new service or charge, it was obliged to notify the TA. In turn, the TA was to give his approval unless such service or charge would lead to a contravention of GC15, 16 or 20(4). The latter General Condition has no relevance in the present case but GC15 and GC16 refer specifically to a prohibition against the licence holder engaging in anti-competitive conduct or abusing its dominant position. It is in terms almost identical to sections7K and 7L of the TO (see paragraph 3 above).

13. No doubt satisfying himself of the requirements of GC22 (and the references therein to GC15 and GC16), in other words, that the tariff proposal did not entail any anti-competitive conduct or an abuse of a dominant position, the TA approved PCCW's tariff proposal by a letter dated 5 October 2001. This tariff, headed "Broadband Copper Local Loop and Exchange Co-location Services Tariff" ("the Tariff") was gazetted on 17 October 2001.

14. However, for its part, WTT continued to press the TA to make a Determination. In a letter dated 7 November 2001, WTT rejected the Tariff as forming the basis of any contractual agreement with PCCW, saying that the terms and conditions set out in the Tariff were "harsh and unfair and completely disregards the existing regulatory obligations of [PCCW]" and it had to be rejected outright as it would "deprive the consumers of effective competition in the broadband market". Extensive reasons were then set out in that letter stating why the charges in the Tariff were "excessive, unsubstantiated and uncompetitive".

15. Not content with the TA just considering whether or not to make a Determination, WTT then pressed the TA to issue a Direction under section 36B of the TO to the effect that pending the Determination, PCCW was to permit WTT to secure a Broadband Type II Interconnection. Section 36B(1)(a) of the TO provides as follows :-

"36B. Directions by Authority

(1) Subject to subsection (2), the Authority may issue directions in writing -

(a) to a licensee requiring it to take such action as the Authority considers necessary in order for the licensee to -

(i) comply with any of the terms or conditions of its licence; or

(ii) comply with any provision of this Ordinance or any regulation made thereunder; or

(iii) in relation to any interconnection of the type mentioned in section 36A(3D), secure the connection of any telecommunications service being the subject of its licence to -

(A) any other telecommunications service being the subject of a licence granted under this Ordinance or of an order made under section 39; or

(B) a system of the description mentioned in section 8(4)(e); or

(C) a closed circuit television system of the description mentioned in section 8(4)(f); and

(D) ... [repealed]."

16. For its part, PCCW saw no need either for the Determination under section 36A or a Direction under section 36B and therefore objected to both. No doubt as far as it was concerned, the Tariff ought to govern any relationship between it and WTT. Nevertheless, PCCW made submissions as regards the Determination.

17. The TA, however, encouraged the parties to try to agree on an arrangement for the interim broadband interconnection. By April 2002, it would appear that PCCW and WTT had agreed on an interim arrangement based on all terms of the Tariff save for 3 terms. The TA then wrote to the parties on 16 April 2002 giving his views on the 3 disputed terms and enclosed for the parties' consideration, a draft Direction under section 36B(1)(a)(iii).

18. By a letter dated 30 April 2002, WTT strongly objected to the draft Direction. After repeating its stance that the charges in the Tariff were "excessive" and the terms "so restrictive that [WTT] believes they are anti-competitive", the letter then went on to say that "consumers are being denied alternative choice of service provider and benefits of competition". The TA was called on to "ensure that the consumers will enjoy benefits of competition in the broadband market without further undue delay". Further reasons were given as to why WTT thought the Tariff was anti-competitive and allowed "no room for other operators to provide broadband services to the public". In short, WTT was insisting that the Tariff was anti-competitive and entailed an abuse of PCCW's dominant position. PCCW maintained its insistence that any interim arrangement ought to be in terms of the Tariff.

19. On 15 May 2002, the TA issued a Direction ("the Direction") pursuant to section 36B(1)(a)(iii) directing that PCCW was obliged, upon receipt of a request from WTT, promptly to implement a Broadband Type II Interconnection. However, and in my view significantly, none of the conditions that reflected PCCW's wish for the Tariff to be followed, were imposed. In fact, apart from a condition on WTT to comply with directions from the TA to prevent interference to telecommunications services, there were no conditions imposed on WTT at all, not even any payment requirements. Not only were the 3 disputed terms excluded, so were all the other terms of the Tariff. This, it is to be noted, was the position of WTT; if anything it was, perhaps even more extreme than WTT's position.

20. In the letter to PCCW that accompanied the Direction, also of the same date, it was stated by the TA that WTT had regarded the terms in the draft Direction as being "harsh and anti-competitive". In the Direction itself, it was stated that :-

(1) the TA considered it was in the public interest to direct the immediate availability of a Broadband Type II Interconnection between PCCW and WTT;

(2) the making of the Direction was intended "to promote effective competition in the telecommunications industry, which will in turn maximize consumer benefits by enabling consumers to enjoy sooner the benefits brought by increased competition in the market of broadband services as soon as it is technically feasible". (emphasis added)

21. The reference to "effective competition" is, in my view, important as it indicated that the TA was of the view that otherwise, there would be no competition for PCCW or that such competition would be ineffective. In the context of the facts and matters set out above, it is obvious that the Direction was made by the TA in what he regarded as the interests of effective (as opposed to ineffective) competition to PCCW. The term "effective competition" was again used by the TA in a letter dated 28 May 2002 to Messrs Richards Butler (PCCW's solicitors at the time) in which it was stated :-

"The public interest demands that interconnection should be effected as soon as it is technically feasible : interconnection promotes effective competition in the telecommunications industry and its early implementation will in turn maximize consumer benefits by enabling consumers to enjoy sooner the benefits brought about by increased competition in the market for broadband services".

22. It is at this stage that PCCW sought to appeal the Direction to the Appeal Board under section 32N of the TO.

The proceedings before the Appeal Board

23. On 29 May 2002, by a Notice of Appeal (later amended), PCCW appealed to the Appeal Board under section 32N. It sought as the main relief that the Direction be amended so that the Broadband Type II Interconnection should only be provided on the terms and conditions of the Tariff. As an alternative, PCCW sought that any interconnection be delayed until a determination under section 36A was made by the TA. The Amended Notice of Appeal made express reference to PCCW being a person aggrieved by a decision relating to sections 7K and 7L of the TO. Grounds in support of this were given. Among them, it was stated :-

"(3) The direction relates to s.7K and/or 7L of the Telecommunications Ordinance because :

1.	(a)	...
	(b)	...
	(c)	If one looks at the reasons behind why the Authority issued the Direction there is clear evidence that the Authority decided that the Direction was necessary because of the Appellant's conduct in failing to Interconnect and, that the Authority held the view that such failure was preventing or substantially restricting competition in a telecommunications market; and/or
	(d)	...
	(e)	....".

24. At the hearing before the Appeal Board, which took place in several sessions between July and November 2002, the following applications were made by the parties :-

(1) The TA applied to strike out the appeal on the basis of lack of jurisdiction. It was contended that PCCW's appeal did not concern a decision relating to sections 7K or 7L.

(2) PCCW applied for a stay of the Direction pending the outcome of the appeal.

25. The Chairman of the Appeal Board, in reserved decisions, dismissed both applications and proceeded with the appeal proper, refusing an application by the TA for the Appeal Board to state a case to the Court of Appeal. The Chairman felt that rather than delay the appeal by a Case Stated (he must have had in mind section 32R(3) of the TO which provides for a stay of the appeal pending the determination of a Case Stated by the Court of Appeal), this should be left until the appeal had been concluded. However, before the appeal was completed, PCCW and WTT settled their differences and arrived at an arrangement for the terms of the Broadband Type II Interconnection with the result that, subject to the question of costs, both sides (PCCW and the TA) agreed that the appeal before the Appeal Board could be withdrawn.

26. On the question of costs, however, both sides wanted their costs. The TA also renewed his application for a case to be stated to the Court of Appeal. This was granted by the Appeal Board not just on the question of jurisdiction but also in relation to its refusal of the interim stay applied for by PCCW. In the meantime, pending the decision of this Court, both the application for leave to withdraw the appeal and the question of costs were adjourned.

27. The Case Stated for the Court of Appeal raises 2 questions :-

(1) Whether the Direction issued by the TA on 15 May 2002 requiring the supply of unbundled local loops by PCCW to WT&T [a Broadband Type II Interconnection] is a direction relating to s.7K and/or 7L of the TO for the purpose of an appeal to the Board under s.32N(1) of the TO?

(2) Whether on the true construction of the TO, the Board has power to grant an interim stay of that Direction pending any hearing by the Board of PCCW's appeal?

Both questions raise the 2 broad issues set out in paragraph 5 above.

The hearing before the Court of Appeal

28. In the written submissions, a point was raised whether this Court had the jurisdiction to refuse to hear a Case Stated, particularly in circumstances where it might be said that the questions raised were academic (in view of PCCW's application to withdraw its appeal before the Appeal Board). Two points were addressed here :- the jurisdiction to refuse to hear a Case Stated under section 32R of the TO and, even if jurisdiction existed, whether this Court should in the exercise of its discretion determine the questions in the Case Stated since they might be said to be academic.

29. On jurisdiction, there is in my view no doubt that the Court of Appeal can refuse to determine questions in a Case Stated if it be inappropriate to do so. The word "may" in section 32R(2) is conclusive in this regard. I would add that it would be very surprising indeed were it otherwise. I cannot imagine that the Court of Appeal should be compelled to decide questions raised in a Case Stated (or in any other case) where, for example, the questions were wholly academic, or so badly framed as to be meaningless.

30. On whether the determination of the questions in the Case Stated is academic, this Court has had occasion recently to consider the topic in Chit Fai Motors Co Ltd v Commissioner for Transport [2004] 1 HKC 465. Quite apart from the fact that the resolution of the 2 questions placed before us will be relevant to the incidence of costs in the proceedings before the Appeal Board (as the Chairman of the Appeal Board and both parties accept), it is said by the TA that the questions are of considerable importance, going as they do to the Appeal Board's jurisdiction and any determination of them would offer guidance in relation to provisions of the TO hitherto apparently not considered by the courts. I accept that the determination of the 2 questions is far from academic and am persuaded by the TA's submissions that the decision of this Court may have some relevance and utility. The present case is more a public law type of case than a private one :- see here Chit Fai Motors Co Ltd at 472-3 (paragraph 20(3)).

31. That said, it must, however, be recognized that the determination of the first of the questions stated to us (see paragraph 27 above) does also involve a consideration of the relevant facts and is therefore fact-sensitive once the legal principles are determined. That is why in relation to this question, the general legal issue is as I have tried to identify in paragraph 5(1) above. As regards the second question, this does by itself raise the general issue identified in paragraph 5(2) above. It is to these 2 issues and questions that I now must turn.

32. However, before doing so, I should just briefly mention the fact that judicial review proceedings were also instituted by PCCW against the TA as regards the Direction. Both sides accept that the issues in the judicial review proceedings differed from those raised in the present Case Stated. I say no more about those proceedings save that judgment is expected in the near future, if not already handed down.

"Whether the Direction issued by the TA on 15 May 2002 requiring the supply of unbundled local loops by PCCW to WT&T is a direction relating to s.7K and/or 7L of the TO for the purpose of an appeal to the Board under s.32N(1) of the TO" [Issue 1 : the extent of the Appeal Board's jurisdiction under section 32N(1)(a)(i) of the TO]

33. Section 32N defines the jurisdiction of the Appeal Board, setting out the only situations in which an appeal can be brought before that body. These situations are restricted to an opinion, determination, direction or decision of the TA "relating to" sections 7K, 7L, 7M or 7N (section 32N(1)(a)(i)), or any licence condition relating to such sections (section 32N(1)(a)(ii)), or any sanction or remedy imposed or to be imposed by the TA in consequence of a breach of sections 7K, 7L, 7M or 7N or any such licence conditions (section 32N(1)(b)). There are therefore 6 acts of the TA that can give rise to an appeal to the Appeal Board :- an opinion, determination, direction, decision, sanction or remedy. We are of course in this appeal concerned with a direction made by the TA under section 36B(1)(a)(iii) of the TO and therefore only section 32N(1)(a)(i) is relevant.

34. PCCW submitted that the direction related to sections 7K or 7L of the TO. The TA said it did not. Counsel for both parties approached the question from entirely different positions.

35. It is not necessary to set out in full all of Mr Gordon's points, regarding section 32N(1)(a)(i) but his submissions in essence can be summarized as follows :-

(1) Only where an opinion, determination, direction or decision of the TA involved a breach of sections 7K, 7L, 7M or 7N would appeals be permitted under section 32N.

(2) As an alternative to this, there at least had to be in existence an opinion of the TA that there was conduct on the part of the licensee that was anti-competitive (section 7K), or an abuse of position (section 7L), or misleading or deceptive (section 7M) or discriminatory (section 7N).

(3) It was not enough simply to point out in relation to, for example, a direction that it was somehow connected in a general way to anti-competition, or an abuse of dominant position, or misleading or deceptive conduct or discriminatory conduct. There had to exist either a breach or an opinion of the TA along the lines described above. He submitted that many directions of the TA may deal with competition among licensees or would-be licensees, but this did not mean that sections 7K or 7L were engaged. The references in section 32N to sections 7K and 7L (and 7M and 7N for that matter) were specific references to the matters dealt with in those particular sections and not general references to competition, abuse of dominant position, misleading or deceptive conduct or non-discrimination.

(4) The crucial point in the present case was that on the facts, the TA had never turned his mind to either sections 7K or 7L and had never given or ventured an opinion along the lines stipulated in those sections. The TA was certainly not saying in the Direction, whether expressly or impliedly, that PCCW was in breach of the sections either. He places some reliance on the phrase "increased competition" in the Direction to indicate that just because the TA wanted more competition did not mean that in its opinion, PCCW was engaged in anti-competitive conduct or abusing its dominant position contrary to sections 7K and 7L. The antithesis of competition was not necessarily anti-competitive conduct. All that the TA was doing by issuing the Direction was to create an interim position pending any determination he may make under section 36A of the TO.

(5) Finally, reference was made to legislative materials, not for the purpose of assisting in the construction of the statutory provisions, but to provide some legislative background to the TO and in particular, the anti-competitive provisions contained therein.

36. Mr Roth's position was straightforward. The use of the phrase "relating to" meant simply that as long as the relevant opinion, determination, direction or decision of the TA was objectively referable to or dealt with anti-competition, abuse of dominant position, misleading or deceptive conduct or discriminatory conduct, an appeal under section 32N was possible. The triggering of the appeal mechanism under that section was in no way dependent on any opinion on the part of the TA that there was or may be conduct that was covered by the provisions of sections 7K to 7N. His alternative submission was that on the facts, it was in any event clear that in issuing the Direction, the TA must have been of the opinion that there would otherwise be anti-competitive conduct or an abuse of a dominant position on PCCW's part.

37. In my view, the effect of section 32N(1)(a)(i) of the TO is as follows :-

(1) It is not enough simply for the relevant opinion, determination, direction or decision of the TA to have some connection (however strong) to competition (or anti-competition), abuse of dominant position, misleading or deceptive conduct or non-discrimination. If this were the only criterion needed, the phrase "relating to" would refer to exactly such terms rather than specifically to sections 7K, 7L, 7M and 7N. Something else must therefore be required.

(2) What is required is that the person who is aggrieved by the relevant opinion, determination, direction or decision of the TA must also establish that one or more of sections 7K to 7N have been truly engaged. This means that the TA (in issuing or making the relevant opinion, determination, direction or decision) must, expressly or by implication, have arrived at an opinion that the licensee concerned has engaged, or will (if the relevant opinion, determination, direction or decision is not complied with) engage or continue to engage in conduct that contravenes one or more of sections 7K to 7N. I put it in these terms to emphasize that not only is past or present conduct covered but also future conduct. The language of sections 7K to 7N is sufficiently wide (and for good reason) to cover such situations. A good measure of flexibility is therefore given to the TA.

(3) Whether or not in issuing or making an opinion, determination, direction or decision, the TA has arrived at such opinion, is in any given case a question of fact. In his submissions, Mr Roth raised the spectre of the possibility of there being cross-examination to establish whether or not the TA has indeed reached such an opinion. In my view, it will in most (if not all) cases be fully evident whether or not the TA has arrived at such an opinion. I note here the duty on the part of the TA to provide reasons for any opinion, determination, direction or decision :- see section 6A(3)(b) of the TO. This will no doubt facilitate the exercise.

(4) As to Mr Gordon's point that breaches of sections 7K, 7L, 7M or 7N are required to be shown before an appeal under section 32N(1)(a) can be triggered, this is really a matter of semantics. Section 32N(1)(a)(i) does not use the word 'breach' (although section 32N(1)(b) does) This matters not. The important point to remember is that an appeal to the Appeal Board under section 32N(1)(a)(i) is possible only where the relevant opinion, determination, direction or decision involves an opinion on the part of the TA along the lines mentioned in sub-paragraph (2) above. Whether or not one chooses to refer to this as a past, present or future breach is immaterial. The important requirement is the TA's opinion under sections 7K, 7L, 7M or 7N.

(5) I am prepared to accept that opinions, determinations, directions or decisions made or issued by the TA may not necessarily engage sections 7K to 7N but the important point for present purposes is that they may, depending on the facts.

(6) I have found the legislative history to be of limited assistance. The legislative background referred to in the materials shown to us is already evident from the terms of the Ordinance itself.

38. I now turn to the facts of the present case and the question whether, PCCW was entitled, as a matter of jurisdiction, to appeal to the Appeal Board under section 32N against the Direction. In my view, it was entitled to do so :-

(1) The facts referred to in paragraphs 10 to 18 above leading up to the Direction amply demonstrate that the TA was acutely aware, in terms of the broadband market (using a copper-wire medium), of PCCW's dominance within it. He saw the need to open up this market to competitors and in particular to WTT. It will be recalled just how aggressive WTT was in raising the argument that it regarded PCCW's position and the Tariff as being harsh, unfair and anti-competitive.

(2) The actual terms and expressions used by the TA both in the Direction itself and in the letter that accompanied it, particular when set in the context referred to above, demonstrate quite forcefully that the TA was of the opinion that unless the interim arrangement (in the form of the Direction) was put in place, PCCW would fall foul of the anti-competitive and abuse provisions of sections 7K and 7L. It is not without significance to note that not only did the TA put in place an interim arrangement which would compel PCCW to allow to WTT a Broadband Type II Interconnection, but that this was to be compelled without terms or conditions imposed on WTT.

39. For the above reasons, I would therefore answer the first of the questions in the Case Stated, "Yes".

"Whether on the true construction of the TO, the Board has power to grant an interim stay of that Direction pending any hearing by the Board of PCCW's appeal" (Issue 2 : whether there exists any jurisdiction on the Appeal Board's part to order a stay pending appeal)

40. The relevant provisions here are sections 32N(2) and (3), set out in paragraph 2 above and also section 32O(7) of the TO, which states :-

" 32O. Procedure and powers of Appeal Board, etc.

(7) The Chairman may determine any matter of practice or procedure relating to the hearing of appeals where no provision governing such matter is made in this Ordinance or in regulations made thereunder."

41. PCCW argues that section 32O(7) gives power to the Chairman of the Appeal Board to order a stay pending appeal. Mr Roth cited numerous authorities going to the wide meaning of "practice and procedure" and also referred to section 19 of the Interpretation and General Clauses Ordinance, Cap.1.

42. However, in my view, the provisions in section 32N(2) and (3) expressly dealing with the specific situation whether an appeal will suspend the operation of the matter appealed from, are conclusive. They are clear :- an appeal will not suspend the operation of the matters appealed from (whether an opinion, determination, direction, decision, sanction or remedy) except only in one specified situation, namely, where the subject matter of the appeal falls within section 36C of the TO, dealing with financial penalties and other matters. To put it another way, but for the matters falling within section 36C, an appeal will not suspend the operation of any matter appealed from.

43. It was sought to be argued that somehow section 32N(2) only applied to situations where an appeal automatically stayed the matter appealed from and not where the Appeal Board might in its discretion order a stay pending appeal. I regret I do not read the provision in this restrictive way at all. It seems, on its clear language, to refer simply to the question whether an appeal will stay the appeal subject matter, irrespective of the stay being automatic or discretionary.

44. The position may very well be different if there existed a provision expressly enabling the Appeal Board to grant a stay pending appeal (for example, in terms of RHC O.59 r.13(1)), because in such a situation the express words of section 32N(2) would then be subject to a more specific provision elsewhere. This is precisely the position in relation to the Competition Act 1998 in the United Kingdom (Mr Roth drew our attention to this Act) where section 46(4) thereof was in terms similar to section 32N(2) of the TO. The crucial difference between the Competition Act 1998 and the TO in this context, however, is that in the case of the 1998 Act, there are express provisions (contained in Schedule 8 paragraph 13) dealing with the grant of interim stays. There is no such equivalent provision in the TO, only the very general provisions in section 32O(7) thereof. As a matter of statutory construction, while a specific provision might or might well qualify another specific one, a general provision will not qualify a specific provision to the contrary.

45. It has to be borne in mind that since the Appeal Board is a tribunal set up by statute, it has no inherent powers; in other words no powers other than those given to it under statute. In this regard the only statutory provision said to give rise to relevant powers of the Appeal Board is section 32N. This contains no power to grant a stay. Thus, unlike a Court, it has no inherent power to make ancillary orders, still less can it make orders which may have an effect similar to an injunction.

46. In my opinion, the answer to the second question of the Case Stated is "No". The Appeal Board does not have jurisdiction to grant a stay pending appeal of the matter appealed from.

Costs

47. The answers to the 2 questions in the Case Stated being "Yes" and "No", each party has won on one point. However, given that much of the argument before us has dealt with the first question, I would make an order nisi that PCCW should have half of its costs in the Case Stated, such costs to be taxed if not agreed.

Hon Rogers VP :

48. I agree.

Hon Le Pichon JA :

49. I agree.