NEW WORLD DEVELOPMENT CO LTD AND OTHERS v. THE STOCK EXCHANGE OF HONG KONG LTD

CACV 170/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 170 OF 2004

(ON APPEAL FROM HCAL 79 OF 2003)

________________________

J U D G M E N T

________________________

Hon Cheung JA :

Facts

1. New World Development Company Limited (‘New World’) (the 1^st applicant) is a public company whose shares are traded on the stock exchange operated by The Stock Exchange of Hong Kong Limited (‘the Exchange’).

2. On the afternoon of 15 March 2001, New World announced its interim accounts for the six months period ended on 31 December 2000.  It had a net profit of $311 million.

3. However, in the morning of this announcement, the newspapers reported that New World might have disclosed its interim results before the announcement to a selected group of financial analysts.  There were further reports of the alleged leak on the following day, i.e., 16 March 2001.

4. As a result of these reports the Listing Division of the Exchange carried out an investigation and in October 2002, submitted a report to the Listing Committee of the Exchange.  The report concluded that New World had selectively disclosed to certain investment analysts its interim profit figures which were price sensitive, in breach of paragraph 2 of the Listing Agreement which it had entered into with the Exchange.

5. In essence under paragraph 2 of the Listing Agreement a listed company is to keep the Exchange, the holders of the securities of the company and the public informed of any information concerning its activities which

1) is necessary to enable them to appraise the position of the company;

2) is necessary to avoid the establishment of a false market in the securities of its shares; and

3) might be reasonably expected materially to affect the market activity in and the price of the securities.

6. The report found that :

1.	Prior to the announcement, the actual net profit of New World was a matter of speculation in the market.  On 9 March 2001, Goldman Sachs forecast a profit of $730 million and on 12 March 2001, Vickers Ballas forecast $628 million.
2.	On 13 March 2001 an employee of New World, Mr. Kwok, came to know that the actual profit was about $300 million.  He then allegedly disclosed the information to several analysts.  They immediately circulated the information.
3.	From 9 to 15 March 2001, the price of New World’s securities fell by about 24% and on 14 March 2001 33.5 million of its shares were traded on the Exchange, representing about 1.6% of its then issued share capital.  This was about 4.4 times the average trading volume of the shares over the 10 day period prior to and including 14 March 2001.

7. The report recommended that New World should be publicly censured.  It also recommended that the executive directors of New World, i.e., the 2^nd to 5^th applicants in this case, should also be publicly censured for breach of their undertaking to the Exchange in that they had failed to procure New World to put in place adequate control procedures to prevent leakage of the price sensitive information. 

8. The applicants disputed the finding in the Report.  Subsequent to the receipt of the Report, the Listing Committee of the Exchange formed a Disciplinary Committee to decide the case.

9. On 25 June 2003, the Chairman of the Listing Committee gave directions (‘the Directions’) for the conduct of the Disciplinary Committee hearing.  The first four paragraphs of the Directions can be summarised as follows :

1.	The factual issues in dispute were to be identified by the parties and defined.
2.	The parties were at liberty to call witnesses subject to prior disclosure of their intended evidence by way of their witness statements or a summary of those statements.  The witness statements or the summary will be treated as evidence in chief of the witnesses.
3.	Cross examination of any witnesses by the parties would be allowed but would be restricted to the factual issues in dispute and previously identified by the parties.
4.	Attendance of the witnesses at the substantive hearing would be the sole responsibility of those parties proposing to call them.

10. The Directions further provided that :

‘	5.	Submission by the parties will be presented ‘in accordance with the usual practice provided for in the Disciplinary Procedures (a brief opportunity to consult with legal advisers, upon the conclusion of any oral evidence and prior to presentation of closing submissions will be allowed).
	6.	Legal advisers will not be permitted to address the Disciplinary Committee (whether by way of oral submissions, the examination of witnesses of fact or otherwise).  (emphasis added)
	7.	Leave is granted to the parties to be accompanied by legal advisers (with no limitation as to number at the substantive hearing).’

The present proceedings

11. The applicants contended that the Directions deprived them of the right of legal representation at the disciplinary proceeding and was in breach of the Basic Law, the Bill of Rights and the principles of natural justice.  They issued judicial review proceedings to challenge the Directions made by the Chairman.

12. Hartmann J. dismissed the application.  The applicants now appeal to this Court.

The structure of the Exchange

13. The Exchange is a company incorporated under the Companies Ordinance (Cap. 32) and is authorised by section 19 of the Securities and Futures Ordinance (Cap. 571) (‘the SFO’) to operate a stock exchange in Hong Kong.  It is controlled by a parent company, namely, the Hong Kong Exchanges and Clearing Limited.  The Exchange’s activities are supervised, monitored and regulated by the Securities and Futures Commission (‘the SFC’) under section 5 of SFO.  The SFC is a body corporate established by legislation.  A regulatory objective of the SFC is to, among other things, maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the securities and futures industry.

14. In order to trade in the Exchange, public companies must agree to be bound by the ‘Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited’ (‘the Listing Rules’).  The executive directors of these companies are also required to give an undertaking (‘Declaration and Undertaking with regard to Directors’) (‘the undertaking’) to use their best endeavours to ensure their companies comply with the Listing Rules.

15. The Listing Committee of the Exchange is responsible for its management.  Its members are not employees of the Exchange but are independent persons drawn from practitioners of the stock market and experts of the securities and futures industries.

16. The actual administration of the Exchange is carried out by its employees who constituted the Listing Division.  They include legally qualified persons. 

17. This division is responsible for the enforcement of the Listing Rules.  It investigates any breach of the rules and conduct subsequent prosecution in disciplinary proceedings.

18. The determination of a breach of the Listing Rules is vested in the Disciplinary Committee which is a sub-committee of the Listing Committee.  Its Chairman and members are drawn from the Listing Committee.

The Listing Rules

19. Section 23(1) of the SFO empowers the Exchange to make rules for, among other things, the proper regulation of its exchange participants and holders of trading rights.  In particular it may make rules for ‘the imposition on any person of obligations to observe specified standards of conduct or to perform, or refrain from performing, specified acts reasonably imposed in connection with the Listing or Continued Listing of securities’ (section 23(2)(d)).      These rules must be approved by the SFC under section 24.

20. The Listing Rules have been formulated by the Exchange and approved by the SFC.  Under Rule 2A.15 of the Listing Rules, the Listing Committee may prescribe procedures and regulations for hearings.  Rule 2A.16 further provides that,

‘ In any disciplinary proceedings of the Listing Committee and on any further review of the decision resulting from those proceedings by the Listing Committee or the Listing Appeals Committee, the party the subject of such proceedings shall have the right to attend the meeting, to make submissions and to be accompanied by its professional advisers.  In all disciplinary proceedings the Listing Division will provide the parties with copies of any papers to be presented by it at the meeting, in advance of the meeting.’

The Disciplinary Procedures

21. A set of rules entitled ‘Disciplinary Procedures’ made pursuant to Rule 2A.15 was adopted by the Listing Committee. 

22. In essence the Disciplinary Procedures envisages, first a hearing called the ‘First Instance Hearing’ which is the hearing of the disciplinary action taken by the Listing Division against a party.  After the Disciplinary Committee has made a decision against that party, that party may apply to the Disciplinary Committee for a review of its decision.  A decision by the Disciplinary Committee on review is subject to a further and final review of the decision by that party to the Listing Appeals Committee.  The decision of this body is conclusive.

23. Under paragraph 2.7 of the Disciplinary Procedures, the Disciplinary Committee in the exercise of its functions is to regard all relevant circumstances, including the facts as contained in the written submissions, the documentary evidence appended to the submissions, and any oral evidence and submissions made before the Listing Committee at the hearing.

24. The Disciplinary Procedures provides the First Instance Hearing to be an informal hearing.  This is provided by the following :

‘	Para. 6.1	The Listing Committee is a lay and informal tribunal, and it is the intention of the Listing Committee to keep the first instance hearing informal.
	Para. 6.2	Rules of Evidence do not apply.  The Listing Committee may receive any material, written or otherwise, and attach such weight as it thinks appropriate to these materials, notwithstanding that such material may not be admissible in civil or criminal proceedings.’

25. The Disciplinary Procedures allows the presence of legal advisers but restricts their role in the hearing.  Paragraph 5.1 provides that :

‘A Party (i.e. one who is the subject of disciplinary proceedings) may be accompanied by his/her legal adviser....  Whilst a party may confer with his/her legal adviser at any stage during the first instance hearing, all submission should be made by the party(ies) and all questions addressed to a party by the Chairman and/or any members of the Listing Committee present at the first instance hearing must be answered directly by that Party and not through his/her legal adviser.’

26. The nature of the hearing (both First Instance Hearing and Review Hearing) is primarily by written submission.  Paragraph 2.5 provides that,

‘The hearing is primarily by way of written submissions exchanged in accordance with the procedural time-table.  Whilst the procedures allow for limited oral submissions to be made at the hearing, all submissions should, so far as possible, be contained in the written submissions which are delivered to the Listing Committee in advance of the hearing through the Secretary to the Listing Committee (the ‘Secretary’).  This gives the other parties to the hearing fair notice of the case and ensures that the hearing is kept as brief as possible.  Given the nature of the tribunal, the Listing Committee discourages lengthy oral submissions and in so far as they are deemed necessary at all, oral submissions should be limited to matters not contained in the written submissions.’

The substantial dispute

27. The applicants denied that Mr. Kwok had disclosed information on the interim profit.  There clearly is a substantial dispute between the parties on whether there was a leakage of information and whether the applicants had put in place a system which would prevent the leakage of information.  These are fact sensitive disputes.  As a matter of common sense and in order to ensure that a proper finding can be made, the dispute cannot be resolved simply by reading the statements taken by the Listing Division from Mr. Kwok and the financial analysts.  These witnesses have to be examined orally so that their credibility can be tested. 

28. This being the real issue, at the heart of the applicants’ complaint that full legal representation is denied is that the Directions precluded their lawyers from examining the witnesses.  While lawyers may be present, their role is limited to advising the applicants who have to personally address the Disciplinary Committee and conduct the examination of the witnesses.

The meaning of the Directions

29. Prior to the Chairman giving the Directions, lawyers for the applicants submitted that there ought to be examination of witnesses by counsel.  The Listing Division had also informed the Listing Committee that in view of the exceptional circumstances ‘it would be appropriate for there to be examination and cross examination of all witnesses by counsel’.

30. However, paragraph 6 of the Directions stated that

‘Legal advisers will not be permitted to address the Committee (whether by way of oral submissions, the examination of witnesses of fact or otherwise).’

31. The judge in paragraph 34 of the judgment took the view that this paragraph did not ‘in stated terms prohibit the examination and cross-examination of witnesses by legal representatives.  That issue has been left open and, it seems to me, must be a matter for future directions if they are sought’.  A similar view was also expressed in paragraph 71 of the judgment.

32. The Chairman had since expressed his view that he did not prohibit the examination of witnesses by counsel, the matter was reserved and left to be determined at the substantive hearing. 

33. A fair reading of paragraph 6 in the light of the submissions from the parties which had identified the issue of examination of witnesses by counsel supports the applicants’ argument that this paragraph does not allow counsel to examine the witnesses.  The reservation was also not apparent from the Directions itself. 

34. However (and accepting what the Chairman now said to be his view) it is not necessary to dwell on this aspect because the real question in this case is whether full legal representation should be allowed at the disciplinary proceeding.

The role of lawyers

35. Lawyers are an integral part of the administration of justice.  The rule of law depends on a very large extent on the presence of competent and independent minded lawyers.  With the increasing complexity of cases in a modern society, the contribution of lawyers both in the civil and criminal fields is invaluable.  However, their importance is most acutely felt in criminal cases or quasi-criminal cases (such as a disciplinary proceeding) where a person is faced with penal sanctions.  In these cases the law and human wisdom consider that the accused person should have a choice of being represented by a lawyer no matter how intelligent or able he may be in his own calling.  Leaving aside the emotional difficulties of asking someone who is faced with a serious charge to defend himself, a person in an advanced and open society is entitled to seek the assistance of independent experts such as a lawyer when he faces legal problems.  Just as we will not expect a sick person to read up the medical textbooks in order to find a cure for his illness, we should not expect a lay person to be able to advance his own case when he is faced with a serious charge.  The entitlement to legal representation if a person so wishes is a basic and fundamental part of the concept of fair trial. 

36. The law reports are full of comments by judges on the need of legal representation.  The Canadian case of Joplin v. Chief Constable of the City of Vancouver (1982) 2 CCC (3d) 396 (Supreme Court of British Columbia) 20 DLR (4^th) 314 (Court of Appeal) contains a collection of these cases.  In that case a police subsidiary regulation restricted the right of legal representation by police officers facing disciplinary charges.  The British Columbia courts declared the regulation to be ultra vires on the basis that when the disciplinary framework was established, those responsible for it could not have intended to leave out the important safeguard of the right to legal representation in the parties.

Common law

37. It is recognized that under common law the right to legal representation is not an absolute right in every type of proceedings.  Such a right may be excluded in domestic tribunals where a person has by agreement consented to be subject to hearings without the right of legal representation.  Some samples of this category include members’ clubs and universities.

Article 35 of the Basic Law

38. Article 35 of the Basic Law provides that

‘Hong Kong residents shall have the right to confidential legal advice, access to the courts, choice of lawyers for timely protection of their lawful rights and interests or for representation in the courts, and to judicial remedies....’

39. Article 35 recognizes the importance of legal assistance and specifically the right of legal representation in legal proceedings.  While this provision clearly applies to court proceedings, in deciding whether it also applies to proceedings other than those held in courts such as in tribunals, the matter has to be approached on a case by case basis.  The framework of a particular tribunal has to be examined.  However, within the confines of this approach, the following principles are relevant :

1.	The Basic Law being a constitutional document must be given a purposive approach in its interpretation.  Where the provisions are concerned with the fundamental rights of the residents, a generous approach in interpretation should be adopted.
2.	The use of tribunals alongside courts is so prevalent in Hong Kong that it will need a strong case to justify the exclusion of tribunals from coming under the general word of ‘courts’ in Article 35.
3.	A tribunal may be known by different names, the name given to a tribunal is irrelevant in this context.
4.	Many of the tribunals are set up expressly by statute but a statute-created tribunal is not the only criterion for coming within Article 35.  What is equally important is that such a tribunal is an integral part of a legislative framework which is concerned with and takes into account matters of public interest.
5.	The tribunal to be subject to Article 35 does not need to be a part of the judicial organ of the government.  A tribunal will fall within its ambit if it exercises a judicial function and its jurisdiction is not private and consensual.
6.	A judicial decision is made according to rules and not administrative policies.  The exercise of judicial function means the tribunal will make determinations affecting the rights of parties before it and on the basis of rules of law and following proceedings conducted in a prescribed manner.

See Yeung May-wan and others v. HKSAR (CACC No. 19 of 2004), Dr. Ip Kay Lo Vincent v. Medical Council of Hong Kong (No. 2) [2003] 3 HKC 579 and A Solicitor v. The Law Society of Hong Kong (CACV 302/2002).

Disciplinary proceeding

40. In this case the applicants are faced with a disciplinary proceeding.  They are accused of disclosing price sensitive information to a selected few and of not installing proper preventive measures which would avoid the leakage of such information. 

The penalties

41. The penalties that may be imposed by the Disciplinary Committee are extensive.  They include, in addition to a suspension or cancellation of a listing, the following :

1.	a private reprimand;
2.	a public statement which involves criticism;
3.	a public censure;
4.	report of the offenders’ conduct to regulatory authorities (both local and foreign) and professional bodies;
5.	ban a professional adviser and its employees from representing a party in matters coming before the Listing Division or the Listing Committee;
6.	require a breach to be rectified including the appointment of independent advisers to minority shareholders;
7.	in case of wilful or persistent failure by a director to discharge responsibilities under the Listing Rules a public statement by the Exchange that the retention of office by the director is prejudicial to the interests of investors;
8.	suspension or cancellation of the company’s securities following the event of a director remaining in office after a public statement in paragraph 7 above;
9.	in the event of willful or persistent failure by a company to discharge its responsibilities under the Listing Rules, an order that the facilities of the market be denied to the company and prohibit dealers and financial advisers from acting for it.

42. These are serious penalties.  As Mr. Griffiths S.C., counsel for the applicants, observed, a blemish on the record of the company and directors will have serious implications on the price of the company’s securities and its ability to raise finance bearing in mind the involvement of institutional investors holding substantial amount of securities of listed companies in a modern financial market.  This point does not need to be elaborated. 

The Disciplinary Committee

43. A disciplinary hearing obviously affects the rights of the parties.  It cannot be seriously argued otherwise that the Disciplinary Committee is exercising a judicial function in accordance with the rule of law and prescribed procedure.  It does not decide a case on administrative policies.  The Disciplinary Committee bears all the characteristics of a tribunal which engaged the operation of Article 35.  It is in such a setting that legal representation is needed.  In my view to allow the presence of lawyers but prohibit them from addressing the tribunal or conducting examination of witnesses is not a sufficient or proper form of legal representation that fulfills the requirement of Article 35.  An illustration that has been highlighted is the raising of objections at the hearing.  A lay person will need to be prompted by the legal advisers to raise objections and when an objection is raised, how is a lay person able to formulate and put forward the basis of the objection at the short time that is available to him?  Once one stands back and looks at the matter objectively, one will realise that this so-called limited legal representation simply does not work.  The desire for a speedy disposal of the proceeding cannot be a valid reason for the exclusion of legal representation in its full form.  An informal proceeding can operate with the full participation by lawyers.  In fact there are many tribunals which function on an informal basis but with full participation by lawyers.  Two such tribunals that come to my mind are the Administrative Appeals Board and the Municipal Services Appeals Board.  The restriction cannot be a rational reason or proportionate to the fundamental requirement of a fair trial.

Domestic and consensual tribunal

44. The only serious challenge to this view is whether the Disciplinary Committee is a domestic tribunal whose jurisdiction is based on the consent of the parties who wished to be listed in the Exchange.

45. Mr. Scott S.C., counsel for the respondents, had very properly referred to the historical nature of the Exchange.  A stock exchange evolved from a market where traders traded their wares and later their securities.  The ability to trade in this type of market depends entirely on the trader willing to abide by the rules and regulations.  In this case New World had signed a Listing Agreement with the Exchange agreeing to abide by the Listing Rules.  The executive directors had also signed the undertaking agreeing to comply with the Listing Rules as well. 

46. In my view, the consensual aspect of the case is clearly a relevant consideration.  However, it is too narrow a view to say that the Disciplinary Committee is a private or domestic tribunal whose jurisdiction is based on contract.  Hong Kong has consolidated the various stock-exchanges of a by-gone era into one stock exchange.  This is in line with the development of Hong Kong into a world class financial centre with complex rules and regulations controlling the operation of financial institutions.  With virtually 24 hour financial trading around the globe, Hong Kong is no longer a lone operator in the international financial market.  The operation of the Exchange is clearly subject to a highly sophisticated legislative framework.  The Government has rightly intervened in a very important sector of our society whose activities have serious implications on the welfare of Hong Kong as a whole.  The duties of the Exchange is regulated by section 21 of the SFO.  Section 21(2) expressly requires it to act in the interest of the public and where such interest conflicts with its own interest it is required to ensure that the public interest prevails.

47. Further, the ability of the Exchange to make rules regulating its activities is not simply based on the consent of the players, but, as pointed out earlier, mandated by the SFO to make rules for its proper operation and such rules must be approved by the SFC.  The Exchange, through the Disciplinary Committee, may impose sanctions on parties who have not signed any agreement with the Exchange : see Rule 2A.10 of the Listing Rules.  All this clearly defeats any argument that the Exchange is operating as some kind of cozy members-only club.

48. I have no hesitation in concluding that the Disciplinary Committee is not a domestic tribunal which is not subject to the ambit of Article 35.  On the contrary it is operating as an integral part of a legislative framework for the regulation of financial activities in Hong Kong.  Its source of power and its ability to impose sanction came from statute.  It is under a duty to act judicially.

49. It should be noted that even in disciplinary proceedings in purely domestic tribunals it is recognized that a person threatened with social or financial ruin in such proceedings may be gravely prejudiced if he is denied legal representation (see de Smith Woolf and Jowell on Judicial Review of Administrative Action (5^th Ed para 9-33)).  It is of course a matter for discretion for such tribunals to allow legal representation but as pointed out by the authors of this well-known work :

‘... it may be that where the allegation is an ‘infamous’ one, the tribunal can only reasonably exercise its discretion in one way, and there is therefore a duty to allow representation’  (para. 9-029)

Ambit of the application

50. If Article 35 applies to a disciplinary proceeding, a question arises as to whether the right of legal representation is satisfied so long as the procedure as a whole recognizes this right even though it may not be available at the First Instance Hearing.

51. I am not impressed with the argument which may support this view.  A First Instance Hearing is a very important hearing in which the case against a party is presented.  If a fundamental right is conferred on a party, I do not see why he should wait until the next stage of the proceedings before he can exercise this right.  In construing Article 35, I would adopt what Megarry J (as he then was) expressed in Leary v. National Union of Vehicle Builders [1971] Ch. 34 at 49 :

‘If the rules and the law combine to give the member the right to a fair trial and the right of appeal, why should he be told that he ought to be satisfied with an unjust trial and a fair appeal?... As a general rule...  I hold that failure of natural justice in the trial body cannot be cured by a sufficiency of natural justice in an appellate body’.

52. I recognize that there are subsequent English decisions which restricted the approach of Megarry J, but in the Hong Kong context, if a generous interpretation is to be adopted in relation to the fundamental rights provisions of the Basic Law, I find it difficult to dilute this right in such a manner.

53. In any event, under Rule 2A.16 of the Listing Rules, one sees the same restrictions imposed on legal representation in respect of the Review Hearing and appeal hearing : the party’s right is merely ‘to be accompanied by its professional advisers’.  Paragraph 8 of the Disciplinary Procedures makes it beyond doubt that in Review Hearings the same restriction on legal representation applies as in First Instance Hearings.  While there is no prescribed rules for appeal hearings, given the restrictions imposed in the earlier hearings, I have grave doubt that a more liberal approach will be adopted for the appeal hearing.

54. A final challenge to the decision of the Disciplinary Committee is by way of judicial review to the Courts.  Given the challenge is on the fundamental right of legal representation and the nature of a judicial review, there really is no room for argument that the requirement of Article 35 can still be met at this stage of the proceedings.

Tribunals without legal representations

55. Mr. Scott referred to the Small Claims Tribunal Ordinance (Cap. 338) and the Labour Tribunal Ordinance (Cap. 25) which excluded legal representation in their proceedings although their relevance to the present case was not elaborated.  These tribunals clearly are courts.  Whether their exclusion of legal representation offends Article 35 or can be justified on the basis of the proportionality test because of the nature of these proceedings should only be considered in an appropriate opportunity.  It is sufficient to say that we are dealing with a proceeding of a completely different nature, namely, a disciplinary proceeding which affects a man’s reputation and livelihood.

Attorney General v. British Broadcasting Corporation

56. Arguments have been raised about the case of Attorney General v. British Broadcasting Corporation [1981] A.C. 303 in which the House of Lords discussed the characteristics of a court in the classic sense.  The approach was followed by this Court (Rogers VP, ^{Le Pichon JA and Sakhrani J) in Tse Wai Chun Paul v. Solicitors Disciplinary Tribunal and another [2002] 4 HKC 1.  British Broadcasting Corporation} is an important case and the views expressed by the law lords should be accorded with the highest regard.  However the focus there was whether a local valuation court which discharged administrative duties was an ‘inferior court’ within the meaning of Order 52 Rule 1 of the Rules of Supreme Court.  That rule was concerned with contempt of court in proceedings conducted in, among other things, ‘inferior courts’.  The focus of this case is different : whether Article 35 applies to courts as well as tribunals and the type of tribunals that is covered by Article 35.

Article 10 of the Bill of Rights

57. Article 10 of the Bill of Rights provides that,

‘All persons shall be equal before the courts and tribunals.  In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law.’

58. Both parties accepted that the Disciplinary Committee proceeding is within the meaning of ‘suit at law’ of Article 10.  In my view the requirement of ‘fair hearing’ includes the right of representation by a lawyer in a Disciplinary Committee proceeding. 

59. The parties further agreed that Article 10 is a codification of the common law right of a fair trial.  The case of R v. Hong Kong Polytechnic, ex parte Jenny Chua Yee Yan (1992) HK PLR 234 deals with the factors there are to be considered in deciding whether there should be a right of representation :

1. The seriousness of the charge and of the potential penalty;

2. Whether any points of law is likely to arise;

3. The capacity of a particular person to present his own case;

4. Procedural difficulties;

5. The need for reasonable speed in making an adjudication;

6. The need to achieve fairness between the parties.

60. I have considered many of these factors when I was dealing with the application of Article 35.  They are equally applicable to this topic.  In my view Article 10 and the common law principle are likewise engaged in this case.

Have the applicants exhausted their remedy?

61. Mr. Scott recognized that the applicants are entitled to seek judicial review.  However, he argued that as they have not exhausted the remedy available to them in the Listing Rules, namely the review and appeal procedures, the Court should deny them the remedy of judicial review.  This is the subject matter of the respondent’s notice.

62. Judicial review is a discretionary remedy.  The availability of an alternative remedy is clearly a factor to be considered in deciding whether to grant the relief by way of judicial review.  The discretion is, however, generally to be exercised against the granting of relief where the alternative remedy has not been exhausted.  However, in Stock Exchange of Hong Kong Ltd. v. Onshine Securities Limited [1994] 1 HKC 319, this Court (Power VP, Mortimer and Godfrey JJA) recognized that even where there is available alternative remedy, the Court may still intervene in extraordinary circumstances. 

63. Under the Disciplinary Procedures, the right to apply for a review and appeal can only happen after a final determination has been made at the First Instance Hearing and the Review Hearing.  There is no procedure for interlocutory appeal.  When the complaint is as fundamental as a denial of legal representation and hence fair hearing, I really do not see the logic of compelling the applicants to complete the so called available remedies first before they could seek the remedy from the Court.  This point does not need further consideration.  The ‘extraordinary circumstances’ requirement has been fulfilled in this case.

Conclusion

64. The appeal is accordingly allowed and the judgment below is set aside.  The applicants are entitled to the relief they asked for.

65. I will make the following orders :

1.	A declaration that the Directions which deny full legal representation at the Disciplinary Committee proceedings are null and void.
2.	An order of certiorari is issued to quash the Directions.
3.	An order of mandamus is issued to compel the Disciplinary Committee to allow the applicants full legal representation including the right by their legal advisers to address the Disciplinary Committee and to examine the witnesses at the hearing.

66. In view of my determination on legal representation, the directions for the proceeding would have to be reconsidered.  It would be simpler if the whole of the existing Directions is quashed.  Although the applicants had asked that the witness statements should not stand as evidence in chief in the disciplinary proceeding, their present application is lodged on the basis of the exclusion of legal representation.  I will not compel the Disciplinary Committee to make such an order except to make the following observation.  Where there are disputes on facts and on the credibility of the witnesses, Keith J (as he then was) in Hanwa Konzai (HK) Co. Ltd. v. Hanggiu Ltd. (1995) 1 HKLR 33 decided that there should be oral evidence being called.  This should be taken into account by the Disciplinary Committee when new directions for the hearing are being considered.

67. The respondent’s notice is dismissed.

Costs

68. There shall be an order nisi that the applicants are entitled to the costs of the appeal (including the costs occasioned by the respondent’s notice) and below with certificate for two counsel.

Hon Yeung JA :

69. I have read both the judgments of Cheung JA and Reyes J.  I agree with their conclusions and reasonings.

Hon Reyes J :

I.  Introduction

70. The facts are summarised in the judgment of Cheung JA. 

71. The issues are as follows:-

(1)	Is a Disciplinary Committee of the Stock Exchange a "court" within the terms of Basic Law (BL) art.35? If so, the Appellants say that Directions by the Chairman of the Sub-Committee hearing their case abridge their right under BL art.35 to be represented by lawyers.
(2)	Are the Directions contrary to Hong Kong Bill of Rights Ordinance (Cap.383) (HKBORO) art.10 or common law principle?  The Appellants and Stock Exchange agree that, for the present hearing, HKBORO art.10 can be treated as enshrining common law principles of procedural fairness.
(3)	Do exceptional circumstances exist to justify judicial review of the Directions by the High Court?  The Stock Exchange says that Hartmann J erred in believing that there were.

72. I shall discuss each issue in the order set out.  In considering the first 2 issues, I shall assume that Hartmann J correctly held that there were exceptional circumstances.

II.  Background

73. By Securities and Futures Ordinance (Cap.571) (SFO) s.23(1) the Stock Exchange has power to make rules “for such matters as are necessary or desirable:-

(a) for the proper regulation and efficient operation of the market which it operates;

(b) for the proper regulation of its exchange participants and holders of trading rights;

(c) for the establishment and maintenance of compensation arrangements for the investing public.”

74. SFO s.23(2) lists some (but not all) matters for which the Stock Exchange can make rules under s.23(1).  These matters include:-

“

(d)

the imposition on any person of obligations to observe specified standards of conduct or to perform, or refrain from performing, specified acts reasonably imposed in connection with the listing or continued listing of securities.”

75. Under SFO s.23(1) the Stock Exchange has promulgated Listing Rules.  Of the latter, Rules 2A.09 to 2A.16 specifically concern disciplinary proceedings.

76. A company proposing to list securities must enter into a Listing Agreement with the Stock Exchange.  By such contract the company agrees to abide by the Listing Rules.  The company's directors in turn undertake to comply with the Rules and use their best endeavours to ensure that a company follows the Rules.

77. Infringements of the Listing Rules are investigated and "prosecuted" by the Stock Exchange's Listing Division.  The charges brought by the Listing Division against companies or individuals for breaches are heard by a Disciplinary Committee of the Listing Committee.

78. The Listing Committee consists of 25 members, each of whom has experience in securities matters, either as a market user or professional.  Disciplinary Committees are formed as necessary from the membership of the Listing Committee to hear proceedings against persons for infractions of the Listing Rules.

79. Listing Rule 2A.09 sets out the sanctions which a Disciplinary Committee may impose.  The rule provides:-

“In addition to its powers to suspend or cancel a listing, if the Listing Committee finds there has been a breach by any of the parties named in rule 2A.10 of the Exchange Listing Rules, it may:-
(1)	issue a private reprimand;
(2)	issue a public statement which involves criticism;
(3)	issue a public censure;
(4)	report the offender's conduct to the Commission or another regulatory authority (for example the Financial Secretary, the Commissioner of Banking or any professional body) or to an overseas regulatory authority;
(5)	ban a professional adviser or a named individual employed by a professional adviser from representing a specified party in relation to a stipulated matter or matters coming before the Listing Division or the Listing Committee for a stated period;
(6)	require a breach to be rectified or other remedial action to be taken within a stipulated period including, if appropriate, the appointment of an independent adviser to minority shareholders;
(7)	in the case of wilful or persistent failure by a director of a listed issuer to discharge his responsibilities under the Exchange Listing Rules, state publicly that in the Exchange's opinion the retention of office by the director is prejudicial to the interests of investors;
(8)	in the event a director remains in office following a public statement pursuant to (7) above, suspend or cancel the listing of the issuer's securities or any class of its securities;
(9)	in the case of wilful or persistent failure by a listed issuer to discharge its responsibilities under the Exchange Listing Rules, order that the facilities of the market be denied for a specified period to that issuer and prohibit dealers and financial advisers from acting or continuing to act for that issuer;
(10)	take, or refrain from taking, such action as it thinks fit, including making public any action pursuant to paragraphs (4), (5), (6), (8) or (9) above.”

80. Listing Rule 2A.10 lists the persons against whom a Disciplinary Committee can impose sanctions.  It provides:-

“The sanctions in rule 2A.09 may be imposed or issued against any of the following:-

(a) a listed issuer or any of its subsidiaries;

(b) any director of a listed issuer or any of its subsidiaries or any alternative of such director;

(c) any member of the senior management of a listed issuer or any of its subsidiaries;

(d) any substantial shareholder of a listed issuer;

(e) any professional adviser of a listed issuer or any of its subsidiaries;

(f) any sponsor of a listed issuer or a new applicant;

(g) any authorised representative of a listed issuer;

(h) any supervisor of a PRC issuer.”

81. Where a Disciplinary Committee sanctions a person, that party may request a re-hearing before another Disciplinary Committee (known as the Listing (Disciplinary Review) Committee). If, upon re-hearing, the second Disciplinary Committee imposes a sanction under Listing Rules 2A.09(2), (3), (5), (7), (8) or (9), the aggrieved party may ask the Listing Appeals Committee (LAC) for a further review.  On review the Disciplinary Committee may hear evidence.

82. The LAC comprises the Chairman of Hong Kong Exchanges and Clearing Limited (HKEC) (the Stock Exchange's parent company) and 2 HKEC directors.  When reviewing a Disciplinary Committee, the LAC considers oral and written submissions and may at its discretion receive new evidence.  The LAC's decision is final and binding, subject to judicial review.

83. There is no right to a review by the Disciplinary Committee where no sanction is imposed.  There is no right of appeal to the LAC where a more lenient sanction than the 6 mentioned above is directed by the Disciplinary Committee after review.

84. Listing Rule 2A.16 expressly gives the parties the right to be heard before a Disciplinary Committee (whether at first instance or review) or before the LAC.  The rule states:-

“In any disciplinary proceedings of the Listing Committee and on any further review of the decision resulting from those proceedings by the Listing Committee or the Listing Appeals Committee, the party the subject of such proceeding shall have the right to attend the meeting, to make submissions and to be accompanied by its professional advisers.  In all disciplinary proceedings the Listing Division will provide the parties with copies of any papers to be presented by it at the meeting, in advance of the meeting.”

85. In practice, under procedures prescribed by the Listing Committee pursuant to a power conferred by Listing Rule 2A.15, only the party charged (or a director where the party is a company) can orally address a Disciplinary Committee or LAC at a hearing.  A lawyer may draft a party's written submissions and attend an oral hearing with his client.  A party may confer with his legal adviser in the course of the oral hearing.  But lawyers do not have a right of audience before the Disciplinary Committee or LAC.

86. The formal rules of evidence will not apply to an examination or cross-examination of witnesses before a Disciplinary Committee or LAC.

87. The procedural rules adopted by the Stock Exchange are silent on whether a party's lawyer (as opposed to only the party himself) may examine witnesses before the Disciplinary Committee.  It seems, however, that a Disciplinary Committee has a discretion to allow witnesses to be examined by legal representatives.

III.  Discussion

A.  The scope of the judicial review

88. There was some question before this Court as to the relief sought by the Appellants.  Mr. Griffiths SC (appearing for the Appellants) clarified at the end of the hearing that the Appellants were seeking to quash the Disciplinary Committee chairman's Directions to the extent that they limited the Appellants’ ability to be fully represented by lawyers at any oral hearing.  In other words, the Appellants object to being restricted from addressing oral submissions to the Disciplinary Committee by lawyers and from being allowed to examine witnesses through their lawyers.

B.  The right to legal representation under art.35

89. BL art.35 provides:-

“Hong Kong residents shall have the right to ... access to the courts, choice of lawyers for timely protection of their lawful rights and interests or for representation in the courts, and to judicial remedies....”

B.1  Cases on art.35

90. There has been recent case law on the ambit of "courts" in art.35.

91. In Dr. Ip Kay Lo Vincent v. Medical Council Hong Kong (No.2) [2003] 3 HKC 579 the Court of Appeal quashed a decision of the Medical Council on judicial review.  Before the Council, Dr. Ip requested an adjournment in order to instruct lawyers.  The Council refused.  It proceeded to hear Dr. Koh's complaint of fraudulent misrepresentation against Dr. Ip.

92. Cheung JA thought that, as a matter of first impression, the word "courts" in art.35 should include statutory tribunals such as the Medical Council established under Medical Registration Ordinance (Cap.161) s.21.  He believed that, by refusing an adjournment, the Council had infringed the right to legal representation conferred by art.35.

93. Yuen JA held that the procedure followed by the Medical Council had been unfairly prejudicial to Dr. Ip.  It being unnecessary, she stated no view on whether the Medical Council constituted a "court" for the purposes of art.35.

94. Burrell J agreed with Cheung JA and Yuen JA.

95. In A Solicitor v. The Law Society of Hong Kong Civil Appeal No.302 of 2002, 18 February 2004, the question was whether the Solicitors Disciplinary Tribunal (SDT) established under Legal Practitioners Ordinance (Cap.154) s.10 is a "court" within art.35.

96. Left to himself, Woo VP would have regarded the SDT as "not a court of the classic kind" and outside the ambit of art.35.  He thought that the exclusion of the word "tribunal" from art.35 (in contrast to its inclusion in HKBORO art.10) was deliberate. 

97. But, having seen Dr. Ip, Woo VP felt himself bound by the decision.  He held that the SDT was a "court" covered by art.35. 

98. He considered that a routine imposition of indemnity costs by the SDT, regardless of whether the penalty levied by the SDT was heavy or light, could deter a solicitor from defending against any charges.  Such "usual" costs order would then compromise a solicitor's right of access to the SDT in breach of art.35.  It being unclear whether the SDT had only taken account of proper considerations in directing that the solicitor pay costs on an indemnity basis, Woo VP was for remitting the question of costs to the SDT for more deliberation.

99. Cheung JA agreed with Woo VP.  He affirmed his views in Dr. Ip, noting that a tribunal was likely to fall within art.35 if it exercised judicial functions otherwise than on a "private or consensual" basis. 

100. The SDT had powers to impose penalties on a solicitor or even remove him from practice.  Such powers, conferred by statute (as opposed to mere contract), could have serious repercussions on a solicitor's career.  It was thus "inconceivable that [the SDT] does not come into the ambit of a court or tribunal envisaged by Article 35".

101. BL art.35 being applicable, the question (according to Cheung JA) was whether a proper balance had been struck.  On the one hand, a losing party normally should paycosts.  On the other hand, costs should not be so disproportionate as to discourage a person from recourse to the SDT.  Cheung JA thought that it was disproportionate for an SDT automatically to order indemnity costs whenever a solicitor was disciplined. 

102. In general, although stressing that strictly Woo VP's conclusions on art.35 were obiter, Burrell J agreed with Woo VP. But Burrell J felt that the SDT had amply justified its order of indemnity costs in the specific case.  He was consequently not minded to send the matter to the SDT for reconsideration.

B.2  Observations on art.35 cases

103. I derive 3 insights from the cases just summarised.

104. First, the label given to a forum cannot be decisive on whether or not it is a "court" within art.35.  Fundamental rights should not hinge on mere semantics.  It is necessary to consider a forum's function.  A forum, although officially a "tribunal," may discharge functions similar to those discharged by the High Court.  By contrast, a forum may be termed a "court" (such as the valuation court in Attorney-General v. BBC [1981] AC 303), but be confined to purely "administrative" functions. 

105. Dr. Ip and A Solicitor do not say that all tribunals set up by statute are to be treated as "courts" within the terms of art.35.  Instead, the Court needs to consider whether particular tribunals fall within art.35 on an individual basis. 

106. Second, a number of tests can help to gauge whether a given forum is or is not a "court" within art.35.

107. Where a tribunal exercises a "judicial" function, it is likely that the tribunal is a "court" within art.35.  Where a "court" merely makes "administrative" decisions, then (despite its official name) it may fall outside the scope of art.35. 

108. One might ask what "judicial" and "administrative" mean in the context of this test.  A working guideline is offered by Wade and Forsyth, Administrative Law (9th ed.) (at p.41):-

“A judicial decision is made according to rules. An administrative decision is made according to administrative policy.  A judge attempts to find what is the correct solution according to legal rules and principles.  An administrator attempts to find what is the most expedient and desirable solution in the public interest.  It is true, of course, that many decisions of the courts can be said to be made on grounds of legal policy and that the courts sometimes have to choose between alternative solutions with little else than the public interest to guide them.  There will always be grey areas.  Nevertheless the mental exercises of judge and administrator are fundamentally different.  The judge's approach is objective, guided by his idea of the law.  The administrator's approach is empirical, guided by expediency.  Under this analysis, based on the nature of the functions, many so-called administrative tribunals ... have judicial rather than administrative functions, since their sole task is to find facts and apply law objectively....”

109. Another test may be to examine the source of a forum's jurisdiction.  Is the basis of power "consensual" or "statutory"? 

110. In A Solicitor, Cheung JA contrasted a private club looking into whether a member has breached a membership rule, with a statutory body investigating whether a professional should be punished for his conduct.  The club has jurisdiction by reason of contract.  A person agrees that, in consideration of being admitted as member, the club can exercise certain powers in relation to him or his property.  The disciplinary body, on the other hand, exercises a power whether or not the person being admonished has consented to its jurisdiction.  The club is unlikely to be a "court" within art.35, while the statutory body is probably within art.35.

111. Yet another test may be to look at the consequences of the tribunal's decisions.  Where (as in Dr. Ip and A Solicitor) an adverse decision may have a serious or significant impact on a defendant's reputation or career, the likelihood is that the forum comes within art.35.

112. There could well be more tests.  It is also worth bearing in mind that no single test may be conclusive.  For present purposes, it is enough to observe that the tests identified in Dr. Ip and A Solicitor, whether applied individually or cumulatively, are strong pointers to whether a tribunal is a "court" within art.35.

113. Third, where a forum is a "court" within art.35, it does not follow that a person is entitled to act by his lawyer in every single aspect of the forum's process.  An inquiry into whether art.35 rights have been transgressed by a court's procedure does not end with mere identification of a tribunal as a "court".  As Cheung JA stresses, there remain questions of proportionality. 

114. One must assess whether a proper balance has been struck. One considers the tribunal's procedures as a whole and evaluates whether the party's right to (say) legal representation under art.35 has been adequately respected and safeguarded by those procedures.

115. But, in determining whether art.35 rights have been compromised, the High Court takes a generous approach in favour of the person claiming the right.  This is because, as evidenced by art.35, society regards the right to legal representation as fundamental.  This means that the right should not be restricted without compelling reason.  A liberal approach, giving the defendant the benefit of the doubt, is especially called for where a tribunal's decision may have substantial ramification on a person's reputation, well-being or livelihood.

B.3  Application of art.35 cases to present situation

116. I now apply the insights highlighted to the present case. 

B.3.1  Is the Disciplinary Committee a "court"?

117. In my view, the Disciplinary Committee is a "court" within the terms of art.35.

118. First, a Disciplinary Committee exercises a judicial function as defined by Wade and Forsyth.  It does not merely decide "as a matter of policy" whether there has been an infringement of the Listing Rules.  On the contrary, a cursory perusal of Listing Rules 2A.09 to 2A.16 indicates that a Disciplinary Committee is to act objectively and fairly when determining whether the Listing Rules have been transgressed.

119. A close reading of the written procedures of the Disciplinary Committee and LAC reinforces this conclusion.  Although hearings are informal, the procedures stress a need to hear the submissions of both sides and weigh the evidence with care.  Where a party is sanctioned, he is entitled to written reasons for the Committee's decision.

120. Second, not only does a Sub-Committee perform a "judicial" function, but its decision may have serious impact on a person's livelihood.  Thus, a listed company might be de-listed.  A director might be publicly censured.  A professional adviser might be banned from activities which form a significant part of his work.  These are outcomes which may seriously prejudice a corporation or individual's future reputation and well-being.

121. Mr. Scott SC (appearing for the Stock Exchange) argues that the impact of any decision cannot be significant in this particular instance.  This is because the Listing Division only seeks 2 sanctions.  Those are:-

(1)	public censure of each Appellant; and,
(2)	appointment of independent auditors to report on how New World's procedures for preventing leakage of price sensitive information might be improved.

Mr. Scott submits that, while serious, neither sanction can be said to threaten the livelihood of any Appellant.

122. I am not persuaded by Mr. Scott's submission.

123. I do not accept that a public censure against the Appellants would only have mild repercussions on their reputations. 

124. In any event, the Disciplinary Committee is not bound to follow the Listing Division's recommendations on penalty.  The Disciplinary Committee may impose more severe sanctions than those advised by the Listing Division, although apparently this has not happened so far since the Listing Rules were promulgated.

125. Further, the issue is whether the Disciplinary Committee is a "court" within art.35.  This is an abstract question.  Its answer must be valid for every particular disciplinary hearing before the Listing Committee.  An attempt to answer the question has to proceed on a level of generality.  One cannot answer the question by looking at the sanctions sought to be imposed in a specific instance before the relevant tribunal.  The Disciplinary Committee cannot be a "court" in a discrete case because severe penalties are being sought, but some other type of forum at another time when milder reproofs are warranted.

126. Third, the source of the Disciplinary Committee's jurisdiction appears to me to be statutory rather than consensual.  The Committee derives its effective authority to make decisions binding on parties (with or without their consent) from SFO s.23(2)(d) in particular.

127. Mr. Scott argues the opposite.  He submits that the Disciplinary Committee can enforce its decisions because those subject to its rulings have agreed or undertaken to be bound. 

128. It is true that New World has entered into a Listing Agreement with the Stock Exchange.  Likewise, the other Appellants (all directors) have undertaken to use their best endeavours to see that New World observes the Listing Rules.  But I do not think that it follows from that mere fact in this specific instance that Mr. Scott is right.  It does not follow that the Appellants' contract with the Stock Exchange is the only source (or even principal source) of the Disciplinary Committee's jurisdiction over them.

129. Again, one cannot evaluate whether a Disciplinary Committee is a "court" by looking at a discrete situation.  One must once more evaluate the Disciplinary Committee's powers and procedures on a level of generality.

130. As is apparent from Listing Rule 2A.10, the Disciplinary Committee's decisions can affect even parties who have not signed a Listing Agreement or provided an undertaking.  For example, the substantial shareholders and professional advisers of a listed company may be sanctioned, even though they have not lodged undertakings with the Stock Exchange to be bound by the Listing Rules.  That punishment may (contrary to what Mr. Scott has submitted) be severe.

131. Mr. Scott wondered whether the Listing Rules might have overreached themselves in authorising a Disciplinary Committee to penalise persons who had not undertaken to be bound by the Rules. He thought that it was arguable that a Disciplinary Committee could not sanction such individuals. 

132. But in my view Listing Rule 2A.10 is well within the vires of the Stock Exchange.  By SFO s.23(2)(d), for the due regulation of the market, the government has given the Stock Exchange power to impose standards on persons regardless of their consent.  The disciplinary procedures in the Listing Rules are an emanation of that power.

B.3.2  Does the disciplinary procedure conform to art.35?

133. I am also of the view that, in limiting a respondent's right to address it by lawyers, the Disciplinary Committee has wrongly abridged the right to legal representation under art.35.

134. Listing Rule 2A.16 recognises a respondent's right to have legal representation.  The provision tacitly acknowledges that a decision may have serious implications; that in consequence the Listing Committee must observe due process; and that access to lawyers at the time of hearing should be an element of due process before the Listing Committee.

135. Unfortunately, having conceded that much, the Listing Rules then dilute the right to legal representation.  The lawyer (the Listing Committee says) may only accompany the respondent into a hearing.  The respondent may seek his advice in the course of the hearing, but only the respondent can say anything to the Committee or a witness at the hearing.  As far as explaining anything to the Committee is concerned, the lawyer is to be confined to the preparation of written submissions.

136. But why should there be such restrictions?

137. In Pett v. Greyhound Racing Association Ltd. [1969] 1 QB 125 (at 132), Lord Denning MR pointed out:-

“It is not every man who has the ability to defend himself on his own.  He cannot bring out the points in his own favour or the weakness in the other side.  He may be tongue-tied or nervous, confused or wanting in intelligence.  He cannot examine or cross-examine witnesses.  We see it every day.  A magistrate says to a man: 'You can ask any questions you like'; whereupon the man immediately starts to make a speech.  If justice is to be done, he ought to have the help of someone to speak for him.  And who better than a lawyer who has been trained for the task?  I should have thought, therefore, that when a man's reputation is at stake, he not only has a right to speak by his own mouth.  He also has a right to speak by counsel or solicitor.”

138. Applying Pett, McEachern CJSC in Joplin v. Chief Constable of the City of Vancouver (1982) 2 CCC (3d) 396 held that police disciplinary proceedings where the respondent was not entitled to legal representation were ultra vires their enabling statute and regulations.  This was despite the fact that, under the police disciplinary regulations, legal representation was allowed where the maximum penalty for an infraction was dismissal, resignation or reduction.  In Joplin the respondent police officer was charged with using abusive language and the maximum penalty that could be imposed was merely a one-day suspension without pay.

139. McEachern CJSC stated (at 409):-

“I do not think it possible to treat any disciplinary proceedings under this disciplinary code (except those conducted formally on a 'man to man basis' where no entry is made in an officer's record) as other than serious.  In today’s society, where career decisions must be made at an early age, and many of our citizens do not have a second chance, and where all policemen are assumed to be career officers, and where good conduct is obviously an important factor in promotion and therefore in salary, and where pension and other benefits depend in part upon salary in the closing years of a career, it is clearly untenable to argue that a recorded conviction for a disciplinary default -- even for using one naught participle -- is not serious.  If a senior officer of this police force considers the complaint serious enough to engage this formal hearing procedure with its full panoply of legalities, then it is per se serious, and this is so regardless of the nature of the alleged offence or the maximum penalty which is recommended.  I think right-thinking citizens would agree.”

The British Columbia Court of Appeal affirmed the decision in (1985) 20 DLR (4th) 314, singling out the foregoing passage for express approval.

140. As Mr. Griffiths noted, it does not follow that successful businessmen or stock market practitioners have the eloquence and skill to defend themselves cogently in oral hearing.  If a person feels more comfortable presenting his case by a lawyer, he should normally be allowed to do so where the consequences of an adverse finding may blot his reputation and have a serious effect on his future career or livelihood.

141. Applying Pett and Joplin, I do not think that it is sufficient recognition of the right to legal representation for the Listing Committee to say that written submissions can be drafted by a party's lawyers. 

142. There may be questions which arise when Committee members read the submissions.  Those will presumably have to be dealt with orally.  There may be factual issues which will need to be clarified in oral examination and cross-examination.  There may be intricate points of law or fact which, difficult to explain on paper, are more easily communicated through face-to-face interaction with committee members. 

143. I do not think that one can downplay the benefits and importance of succinct, pinpoint and cogent oral submissions in any forum, the High Court included.  Such type of oral submission is pre-eminently the stock-in-trade of the skilled barrister or solicitor.  If the layman charged with serious matters feels inadequate to the task of oral submission and examination, he should be allowed to have his lawyer to speak on his behalf.

144. I was initially attracted by Mr. Scott's point that the disciplinary procedures here were designed to enable enquiries to be conducted speedily. 

145. It would not be in the public interest for hearings before the Disciplinary Committee to be long-drawn out affairs.  Further, the members of the Committee are volunteers who receive no remuneration for their service.  It would be a financial strain on them for enquiries to be protracted.

146. But, on further reflection, I do not believe that Mr. Scott's point is a legitimate concern in the present situation.  I do not think that efficiency and informality in procedure by themselves militate against a tribunal being directly addressed by lawyers or allowing lawyers to examine witnesses.

147. Mr. Scott’s point assumes that the intervention of lawyers will lead to the lengthening of enquiries.  Implicit is the suggestion that lawyers will prolong hearings by taking unmeritorious technical points and spinning out their examination.  I do not think that those assumptions are warranted. 

148. Typically, in (say) High Court cases, the intervention of lawyers is regarded as shortening hearings.  Lawyers are under an obligation not to waste High Court time on bad points which are of little merit and doomed to fail.  Where lawyers waste time, a judge can rein them in, asking them to explain the relevance of their submissions before being allowed to proceed further.  Where no proper explanation is forthcoming, a judge can direct the lawyer to move on to more solid points.

149. In contrast, any forum needs to be patient with litigants in person.  Laymen are not trained in distinguishing relevant from irrelevant submissions.  Conventionally, a lay litigant throws in everything in his oral address to the Court.  Good, bad and indifferent points are all expressed in a jumble, which the tribunal has to sort out as best it can.  That sorting inevitably takes time.

150. Thus, far from lengthening hearings, the deployment of lawyers should lead to enquiries moving more briskly.  Where lawyers appear, the Disciplinary Committee can be bolder.  It would be entitled to expect a high standard of succinct oral presentation with submissions and examinations strictly confined to relevant issues.

151. For the above reasons, there seems to be no good reason for the restrictions imposed on legal representation.  In my judgment, therefore, in denying the respondents the ability to make oral submissions and conduct examinations of witnesses through a lawyer, the Directions contravene BL art.35.  The Directions should be quashed to the extent that they restrict the Appellants from making oral submissions or examining witnesses by their lawyers.

B.4  Two footnotes

152. In this section, I briefly deal with 2 submissions advanced by Mr. Scott in support of his case regarding art.35.

B.4.1  Footnote 1: The Small Claims and Labour Tribunals

153. Mr. Scott warns that a holding that a Disciplinary Tribunal was a "court" within art.35, may have implications on the Small Claims Tribunal and the Labour Tribunal.  This is because (Mr. Scott suggests), save in limited situations, the statutes establishing those tribunals deny barristers and solicitors the right to appear on behalf of clients in those 2 tribunals.

154. To Mr. Scott's note of caution, I make 2 comments. 

155. First, whether or not the Small Claims and Labour Tribunals are "courts" within the terms of art.35 is not relevant to the status of the Disciplinary Committee.  Assume, for example, that the procedures of the Small Claims and Labour Tribunals violate art.35.  Nothing can be inferred from that for the purposes of deciding the issues here.  By the same token, one cannot conclude, from a finding that the procedure of the Disciplinary Committee violates art.35, that the Small Claims and Labour Tribunals are similarly flawed. 

156. As previously observed, the Court considers the functions and processes of functions of a given tribunal in deciding whether art.35 is applicable and whether there has been a violation of the rights guaranteed by that article.  A right under art.35 is not absolute.  It may be restricted for good reason, provided the restriction imposed is proportionate to the reason and does not have the effect of negating the right.

157. Second, in any event, it is difficult to see how the Small Claims and Labour Tribunals can offer much guidance.  The procedures of the former tribunals are different from those found here. 

158. For instance, both the Small Claims and Labour Tribunals are inquisitorial.  Their presiding officers, who are lawyers, are obliged to investigate any matter which may be relevant to a claim, whether or not raised by a party.  The presiding officers are trained lawyers.  It is their job to help litigants put forward their best case, not just when submissions are being made, but also when witnesses are being examined.

159. Further, the Small Claims and Labour Tribunals may transfer cases before them to the District or High Courts.  The tribunals may do this of their own motion or upon application by one or both parties before it.  Cases are typically transferred when they involve complex issues of law or fact.  Once transferred to the District or High Court, the parties will be able to use lawyers as usual.

160. For the purposes of this case, it is unnecessary definitively to decide whether the Small Claims and Labour Tribunals are within the terms of art.35.  Even if it is assumed that they are, it by no means follows that their procedures violate art.35.

B.4.2  Footnote 2: The decision in Tse Wai Chun Paul

161. In Tse Wai Chun Paul v. Solicitors Disciplinary Tribunal and another [2002] 4 HKC 1 Mr. Tse claimed an entitlement under HKBORO art.10 to an open (as opposed to in camera) hearing of disciplinary proceedings.  The Court of Appeal (Rogers VP, Le Pichon JA and Sakhrani J) held that the SDT was not "a court of the classic kind" and so was not a "court" or "tribunal" within the terms of HKBORO art.10.

162. Le Pichon JA stated (at 11A-C):-

“What is important ... is thus to consider whether [the SDT] is a court of law of the classic kind integrated within the standard judicial machinery of the country.  Once it is appreciated that the full test entails that the particular tribunal must be integrated within the standard judicial machinery of the country it can be seen at once that [the SDT] is not so integrated.  In the General Medical Council v. British Broadcasting Corp [1998] 3 All ER 426 it was held that the General Medical Council in United Kingdom was not a body which exercised the judicial power of the state.  Likewise here, the [SDT] does not exercise the judicial power of the state.  It exercises a disciplinary function over solicitors, foreign lawyers and their employees.”

163. Mr. Scott cited Tse in support of his argument that the Disciplinary Committee could not be a "court" within the terms of BL art.35.

164. But Tse concerns the construction of the expression "courts and tribunals" in HKBORO art.10 (and the similar art.14 of the International Covenant on Civil and Political Rights incorporated into Hong Kong law by BL art.39).  Strictly, it did not involve the interpretation of art.35.

165. While it may be that a person's entitlement to a public hearing under art.10 depends on whether the relevant forum is "integrated within the standard judicial machinery" of Hong Kong, that is not the issue here.  The question in this case is not whether the Disciplinary Committee is a "court" which must generally proceed by way of public hearing.

166. The present issue is the fundamental entitlement to legal representation.  The question in Tse was narrower.  There would have been no doubt that Mr. Tse was entitled to be represented by lawyers before the SDT. 

167. Consequently, I do not believe that the test in Tse is apposite for the purposes of construing the scope of art.35.

C. The right to a fair hearing at common law and under HKBORO art.10

168. HKBORO art.10 provides:-

“All persons shall be equal before the courts and tribunals.  In the determination of any criminal charge against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law....”

169. The parties agree that, whatever "courts" and "tribunals" might mean in light of Tse, HKBORO art.10 imports the familiar common law requirement of a fair hearing into such forum.  Even if Disciplinary Committee proceedings were not subject to HKBORO art.10 by reason of Tse, one would still have to apply the common law principle of fairness to that process.

170. Obviously, no one suggests that the Disciplinary Committee can follow an unfair procedure.  The dispute is whether its restrictions on legal representation prejudice the Appellants' right to a fair hearing.

171. For the same reasons as in Section III.B.3.2 of this Judgment, I believe that there is such unfairness.

D.  Exceptional circumstances justifying judicial review

172. In Stock Exchange of Hong Kong Ltd. v. Onshine Securities Ltd. [1994] 1 HKC 319, the Court of Appeal (Power VP, Mortimer and Godfrey JJA) held that the Disciplinary Committee could be judicially reviewed in exceptional circumstances. 

173. Power VP stated (at 326F-327D):-

“Mayo J [at first instance] stated, rightly in our view, ... the scope for judicial review was limited when there was an alternative remedy available and that the 'question which has to be decided was whether the circumstances of this case were such as to amount to "special circumstances" such as to justify a departure from the rule.'  We would, for ourselves, prefer to use the term 'exceptional circumstances'....
The matters which Mayo J appears to have taken into account when coming to his conclusion that such circumstances existed were:
(1)	Onshine was not allowed legal representation in circumstances in which it could not, without such representation, receive a fair hearing.
(2)	...
(3)	...
(4)	...
None of these seem to us to be exceptional circumstances, whether taken separately or together, which would require the immediate intervention of the court in the interests of justice, which is the principle to be applied.”

174. Mr. Scott contends that, as in Onshine, there were no exceptional circumstances warranting judicial review here.  He submits that the Appellants have not exhausted all their remedies under the Listing Committee's procedures.  First, the Appellants can still appeal to the Listing Committee for a review and, if that is not successful, they can go to the LAC.  Second, the Directions leave it open to the Appellants to apply at the hearing for lawyers to be allowed to examine witnesses.  The Disciplinary Committee retains a discretion (Mr. Scott says) to accede to such request.

175. There has been debate on whether the Directions preclude (as they appear to me to do) examination and cross-examination of witnesses by legal representatives.  Hartmann J believed that the Directions left the issue open.  In response to a query raised by this Court among the parties, the Chairman of the Disciplinary Committee has written that the Directions do not prohibit a party from making an ad hoc application at the time of substantive hearing for the oral examination of witnesses by lawyers.

176. I shall assume that the Directions leave open the possibility of an application at the time of hearing as suggested by the Disciplinary Committee's Chairman.  Even then, in my judgment there are exceptional circumstances justifying judicial review.

177. Hartmann J thought that there were 2 exceptional factors (at §§42-3):-

(1)	“[T]he applicants' complaint "goes to the essential lawfulness of the disciplinary proceedings to which they are subject”.  A question of ultra vires was involved.
(2)	“[T]he interests of justice dictate that the court should intervene at this stage.”  The Court should “set parameters for the future guidance of the Listing Committee and persons appearing before it as to the impact of art.35...”

178. I agree with the first reason given by Hartmann J.

179. SFO s.23(2)(d) must be construed in light of BL art.35.  The former provision cannot be read as having authorised the Stock Exchange to promulgate regulations and procedures which are contrary to art.35.  To the extent then that the Directions are contrary to art.35, they would be ultra vires.

180. Given that a question of vires is concerned, no appeal or review to the Listing Committee or LAC can cure the defect. 

181. As Hartmann J pointed out, the Court of Appeal in Onshine regarded questions of ultra vires as an exceptional circumstance.  In Onshine Power VP said (at 329G-I):-

“Similarly, if the court's immediate intervention will result in abating the litigation, this will also be an important -- perhaps decisive -- consideration.  We have in mind cases where the tribunal has no jurisdiction to entertain the proceedings or where the proceedings were based on an obvious and fundamental error of law.  In such circumstances, it would not be possible to start the same proceedings again and justice and convenience may require that the decision is struck down immediately.”

182. There seems no point in going through the machinery of review and appeal under the Listing Rules when the relevant committees would only be considering the Directions in the context of a flawed procedural framework countenanced by the Listing Rules. 

183. In practical terms, that would be a waste of time.  Assume the Disciplinary Committee only permits examination by the Appellants.  Even if the Disciplinary Committee or the LAC on appeal thought that was wrong, evidence would already have been taken.  The process of taking evidence would have to be repeated.  Time and money would have been needlessly expended.

184. More importantly, as I have stressed above, there is no apparent good reason why the Appellants' fundamental right to representation should be constrained.  The Appellants should not be under a doubt at the outset (as they are now), whether the Disciplinary Committee will in due course allow an ad hoc application for oral examination by lawyers.

185. It is true that Onshine seems to have regarded limitation on legal representation as merely an unexceptional circumstance.  But Powers VP's remarks should be treated with caution.  At the time when Onshine was decided, BL art.35 was not in effect.  In light of art.35, it is far from clear that the Court of Appeal would have held as it did in regard to restrictions on legal representation.

186. As for Hartmann J’s second reason, I am uncertain of the extent to which the High Court can select certain cases (in which remedies have not yet been exhausted) for judicial review solely to clarify the law and give much-needed guidance.  Given my conclusions so far, it is not necessary to decide the validity of Hartmann J's second ground.

IV.  Conclusion

187. I would allow the appeal.  In my judgment, there has been a violation of the right to legal representation under BL art.35.  I do not think that the restrictions on legal representation imposed by the Directions allow a fair hearing.

188. More specifically, I would quash Directions §6 (which reads: "Legal advisers will not be permitted to address the Committee (whether in respect of oral submissions, the examination of witnesses of fact or otherwise)".

189. I would dismiss the Respondent's Notice.  This is a case in which judicial review is warranted.

190. I agree with the costs order nisi proposed by Cheung JA.