WONG SIN HUA FELIX v. THE INSIDER DEALING TRIBUNAL

HCAL 124/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO. 124 OF 1999

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J U D G M E N T

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1. This is an application for leave to apply for judicial review of a ruling made by the Insider Dealing Tribunal ("the Tribunal"). The Tribunal had at an earlier series of hearings considered whether the Applicant, amongst others, had been a party to insider dealing in relation to shares in Paragon Holdings Ltd. Two other persons were found to have been parties to insider dealing. The findings of the Tribunal that those two persons had been parties to insider dealing were challenged by judicial review. The application for judicial review was heard by Sears J. who quashed the findings of the Tribunal. An appeal from his decision was dismissed by the Court of Appeal.

2. The Applicant then applied to the Tribunal for his costs of the inquiry under section 26A of the Securities (Insider Dealing) Ordinance (Cap. 395). However, sections 26A(5)(c) and 26A(5)(d) prevent the Tribunal from awarding costs where the applicant for costs has brought the inquiry upon himself. In order to decide whether the Applicant had brought the inquiry upon himself, the Tribunal had to decide whether it could use the evidence which had been given in the inquiry, even though the findings of the Tribunal following that inquiry had been quashed. The Tribunal ruled that it could, and that is the ruling which the Applicant now wishes to challenge by way of judicial review.

3. Although the Tribunal has decided that the evidence may be used, the Tribunal may ultimately decide that, despite that evidence, the Applicant had not brought the inquiry upon himself. In that event, this application for leave to apply for judicial review would be academic. Accordingly, when the papers were first placed before me, my provisional view was that this application for leave to apply for judicial review should be adjourned sine die until after the Tribunal has finally ruled on the Applicant's application for costs, with liberty to the Applicant to restore the application then in the event of the Tribunal declining to make an order for costs in favour of the Applicant on the ground that the Applicant had brought the inquiry upon himself.

4. However, I have been told today that after giving its ruling the Tribunal also gave directions for the remainder of the hearing of the application for costs. The Tribunal decided that the hearing should take place on a date to be fixed and that three days should be set aside. Mr. Gerard McCoy S.C. for the Applicant believes that at least five days would be required. In those circumstances, if the hearing goes ahead before the legality of the ruling has been adjudicated upon, a lengthy and expensive hearing will have taken place, which will have been considerably shorter or even unnecessary if the ruling is eventually quashed. In those circumstances, I have decided that the course which I originally thought might be the right one is no longer appropriate. In any event, in its report to the Financial Secretary, the Tribunal had named the Applicant as an insider dealer. That is also something which I did not know about before today. In those circumstances, if the Tribunal's ruling on the evidence is allowed to stand, it may well be inevitable that the Tribunal will find that the Applicant had brought the inquiry upon himself. Thus, if the ultimate decision on costs is likely to be so dependent on whether the ruling on the evidence is lawful, the legality of the ruling on the evidence should be decided first.

5. In my view, therefore, it is not appropriate for the application for leave to apply for judicial review to be adjourned. It should be considered on its merits now. Having regard to the merits, I think that this is an appropriate case for saying that the ruling is potentially susceptible to challenge, and in the circumstances I grant the Applicant leave to apply for judicial review.