RE CHANG WING TAI

Headnote

Judicial Review. Regulation to the effect that the Decision of a Tribunal on questions of law and fact is final. The extent to which the Chairman's Decision can be the subject of Judicial Review.

Held

                The Chairman's Decision could not be quashed by certiorari.

IN THE SUPREME COURT OF HONG KONG

MISCELLANEOUS PROCEEDINGS No. 1987 OF 1987

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JUDGMENT

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1. The Applicant was a shareholder in the Overseas Trust Bank (The Bank). The assets of the Bank were acquired by the Government by virtue of the provisions contained in the Overseas Trust Bank Acquisition Ordinance Chapter 379. The objects of the Ordinance were to:

"To provide for the acquisition by the Government of the Overseas Trust Bank Limited, the compensation payable in respect of such acquisition and the carrying on of the business of that Bank and for connected purposes".

2. Section 10 of the Ordinance empowered the Financial Secretary to make such regulations as may be necessary for the implementation of the objects of the Ordinance. The Overseas Trust Bank (Compensation of Registered Holders of Shares) Regulations were duly made.

3. The main scheme of the Regulations was to establish a Tribunal whose purpose it was to assess the value of shares in the Bank on the day before its assets were transferred to the Government namely the 8th June 1985. The regulations and more particularly the schedule thereto laid down detailed criteria as to how shares in the Bank were to be valued.

4. A Board of Inquiry or Tribunal was established. Mr. Justice Mortimer was appointed Chairman and sat with other members on a number of occasions. The modus operandi of the Tribunal included obtaining assistance from a firm of Accountants who were instructed to assist the Tribunal in determining the value of the said shares.

5. Shareholders were legally represented at the hearings of the Tribunal. Mr. K. H. Woo who represents the Applicant in this judicial review appeared before the Tribunal and made representations.

6. I understand from Mr. Woo that the main contention he advanced before the Tribunal was that Para 3(a) (v) of the schedule to the regulations was ultra vires. This paragraph provides:

7. Mr. Woo had argued that it was grossly unjust that such claims should be disregarded particularly as litigation had already been commenced at the time of the hearings against, inter alia, the Auditors in respect of alleged breaches of their duties.

8. Mr. Woo had argued that it was well within the realms of possibility that it might prove to be possible to recover substantial sums from the Auditors and or Directors. It was most unjust that the Government may receive damages and the shareholders would in effect be excluded from any benefit from actions taken. Mr. Woo had gone on to submit that the regulations were clearly ultra vires the substantive legislation namely the Ordinance.

9. I have already described the purposes of the Ordinance. Mr. Woo submitted that Regulation 3(a) (v) was clearly contrary to these stated purposes and accordingly ultra vires.

10. These submissions did not find favour with Mr. Justice Mortimer. It is evident from perusing the reasons he gave in his Decision that the issue was fully canvassed before him and he rejected the argument to the effect that the said paragraph was ultra vires.

11. The present application before me is to judicially review the Chairman's Decision. I am asked to grant a writ of certiorari quashing that part of the Chairman's Decision which held that claims or possible claims against the Auditors or former Directors should be disregarded. Grounds are also advanced to the effect that there were ambiguities arising out of the terminology adopted in the Regulations. This particularly revolves around the use of the word "possibility" in relation to claims. With the greatest respect to Mr. Woo I see much less force in this argument than I do in what I see as the main complaint that Paragraph 3(a) (v) was ultra vires the Ordinance.

12. The first question I have to ask myself is whether Mr. Justice Mortimer's decision is ameanable to judicial review.

13. Regulation 11 provides:

               "11. (1)    Any -

Although this ouster of the jurisdiction of the Court is in subsidiary legislation, I do not think that much depends on this by virtue of the provisions contained in S.33 of the Interpretation and General Clauses Ordinance, Cap. 1:

"33.  An act shall be deemed to be done under an Ordinance or by virtue of the powers conferred by an Ordinance or in pursuance or execution of the provisions of or under the authority of an Ordinance, if it is done under or by virtue of or in pursuance or execution of or under the authority of subsidiary legislation made under any power contained in that Ordinance".

14. I have no doubt that Mr. Justice Mortimer was making a determination of the law when he held in his Decision that paragraph 3(a) (v) of the schedule was not ultra vires.

15. Mr. Woo attempted to overcome this difficulty by reference to cases where the courts had been prepared to consider situations where Tribunals had exceeded their jurisdiction and consequently their findings had been held to be a nullity. The landmark case on this is Anisminic Ltd. v. Foreign Compensation Commission & Another⁽¹⁾. At page 171 Lord Reid outlined the types of situation where a Tribunal could overreach itself.

"It has sometimes been said that it is only where a tribunal acts without jurisdiction that its decision is a nullity. But in such cases the word "jurisdiction" has been used in a very wide sense, and I have come to the conclusion that it is better not to use the term except in the narrow and original sense of the tribunal being entitled to enter on the inquiry in question. But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the inquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it pourer to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive".

16. At page 195 Lord Pearce considered the consequences which could ensue if a Tribunal did exceed its powers.

"Lack of jurisdiction may arise in various ways. There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an inquiry. Or the tribunal may at the end make an order that it has no jurisdiction to make. Or in the intervening stage, while engaged on a proper inquiry, the tribunal may depart from the rules of natural justice; or it may ask itself the wrong questions; or it may take into account matters which it was not directed to take into account. Thereby it would step outside its jurisdiction. It would turn its inquiry into something not directed by Parliament and fail to make the inquiry which Parliament did direct. Any of these things would cause its purported decision to be a nullity".

I do not consider that there is anything in Mr. Justice Mortimer's Decision which could remotely bring it within the types of situation above outlined.

17. The important matter to be determined is whether it can be claimed that Mr. Justice Mortimer merely made an error in law on the face of his Decision or on the other hand whether it can be argued that he exceeded his jurisdiction.

18. Lord Fraser deals with this distinction at page 370 of S.E. Asia Fire Bricks v. Non-Metallic Products⁽²⁾. He rejects the suggestion made by Lord Denning in Pearlman v. Keepers ⁽³⁾ that the time had come to discard such a distinction. He went on to adopt the dissenting judgment of Geoffrey Lane L. J. in that case when he said at page 74.

"... the only circumstances in which this court can correct what is to my mind the error of the judge is if he was acting in excess of his jurisdiction as opposed to merely making an error of law in his judgment by misinterpreting the meaning of 'structural alteration ... or addition"'.

19. There can be no doubt in the present case that Regulation 11 ousts the jurisdiction of the Courts on questions of law and questions of fact. In my view Mr. Justice Mortimer's Decision comes within the situation envisaged by Geoffrey Lane L. J.

20. This type of situation was considered by Lord Diplock in Racal Communications Ltd.⁽⁴⁾ He made his observations at page 383. He said that such ouster must be in clear terms. I am satisfied that it is in the present case.

21. I am also satisfied that Mr. Justice Mortimer did not exceed his jurisdiction when making the determination to the effect that para. 3(a) (v) of the schedule was not ultra vires. In such circumstances it is irrelevant to consider whether he was right or wrong. His determination that it was intra vires was the end of the matter and final.

22. For this reason, this application for Judicial Review cannot succeed. Consequently it is not necessary for me to consider the other matters which were argued. This application is dismissed and I will hear the parties on costs.

(1)    [1969] 2 A.C. 147

(2)    [1981] A.C. 363 (P.C.)

(3)   [1979] 1 Q.B. 57

(4)    (1981) A. C. 374