LEE BING FAI STEPHEN v. HONG KONG AUTOMOBILE ASSOCIATION

HCA 25/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 25 OF 2015

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REASONS FOR DECISION

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Introduction

1. The plaintiff (“Lee”) has brought this claim in relation to matters arising from decisions (“Decisions”) of the defendant (“HKAA”) overturning certain results of races in which he took part as a driver.  In making the Decisions, the HKAA acted by the Motor Sport Council (“MSC”), a committee established pursuant to Article 22.17 of its articles of association.

2. On 25 June 2015, I heard and dismissed an application made by the HKAA by summons dated 16 February 2015, which sought:

(1)   a declaration that in the circumstances of the case the court of the Hong Kong Special Administrative Region should not exercise its jurisdiction in respect of the subject matter of this action or the relief or remedy sought in this action; and

(2)   an order to stay this action on the ground that the HKAA is entitled to rely on an agreement to which Lee is a party to exhaust the agreed appeal procedures, excluding the jurisdiction of the courts of the Hong Kong Special Administrative Region.

3. I gave my reasons for the dismissal of that application in my Reasons for Decision dated 3 July 2015 (“Reasons”).

4. In the Reasons, I noted that Mr Samuel Wong, then appearing for the HKAA, confirmed that he was not suggesting that the jurisdiction of the court had been entirely ousted, but rather that the court should decide in the circumstances not to exercise its jurisdiction.

5. In the exercise of my discretion, I dismissed the application for a stay, in part on the basis that the HKAA had not been able to identify firstly the particular provision of any of the rules or regulations (those which are said to have become contractual terms) which conferred upon the MSC the right to make decisions of the nature it made, nor secondly the particular provision of any of the rules or regulations which identified the rights and procedures of an appeal from a decision of the MSC: see Reasons §52.  Essentially, no relevant appeal route had been identified, and no time for any appeal had been identified (so it could not have expired, as had been argued): see Reasons §56.

6. I also considered that Lee had identified at least a proper basis for a complaint of serious procedural unfairness in the steps leading to the Decisions and the alleged review of them: see Reasons §61.  I held that the obvious place for such complaints to be considered and determined is the court, which in any event is the appropriate supervisor of sporting regulatory authorities: see Reasons §63.

7. As to the relevance of the prior exhaustion of domestic remedies (had one been identified), I referred to the twofold test in Leigh v. National Union of Railwaymen [1970] Ch 326 at 334: see Reasons §66. 

8. But I held that, in any event, the nature of the particular disputes in this case identifies the court as clearly and distinctly the most appropriate forum for the resolution of those disputes, so that even if there had been identified a domestic remedy agreed by contract, I should not have required prior recourse to it: see Reasons §68.

9. I also noted that Lee’s claim includes claims in negligence and defamation which would provide another reason why a stay of the action is inapt: see Reasons §69.

10. By summons dated 9 July 2015, the HKAA sought leave to appeal from my dismissal of its application for a stay.  I heard that leave application on 23 November 2015, and I dismissed the application on that date with costs to Lee.  The following are my reasons for refusing to grant leave.

Refusal of Leave

11. The test for the grant of leave is well-settled.  What is required is that either the appeal has a reasonable prospect of success, or there is some other reason in the interests of justice that the appeal should be heard.  A reasonable prospect of success means that the prospects are more than fanciful, without having to be probable.

12. For reasons which will become apparent below, Ms Teresa Cheng SC, appearing with Mr Alexander Tang for the HKAA, submitted that in determining an application for leave to appeal the Court of Appeal has power to entertain points that have not been run below, although points which are fact sensitive or otherwise would affect the course of evidence should not be allowed.

13. The application for leave to appeal had draft grounds of intended appeal attached.  As summarised by Ms Cheng, the broad grounds of appeal indentified are:

(1)    Contrary to the Reasons, a proper study of the relevant rules and regulations, unveils a clear decision-making and appeal mechanism.

(2)    Once this is appreciated, it would become clear that the proper decision for the court is to stay the action pending the proper appeal procedure, as it is well-established that the court would afford bodies exercising jurisdiction over sporting activities as great a latitude as is consistent with fundamental requirements of fairness and would not intervene prematurely.

14. As is perhaps obvious, at least the first point is new.  It does not reflect how the matter was argued before me by Mr Wong, who (as I recorded in my Reasons §52) could not identify any provision in the relevant alleged contractual terms which contained a clear decision-making power or appeal mechanism.  But Ms Cheng submits that no question of incurable prejudice arises from the change in stance, because no new facts are being alleged and the course of evidence is not affected.

15. It is noteworthy that Mr Wong made his submissions not just with his instructing solicitors present, but also with members of the HKAA present in court.  No-one present pointed out to Mr Wong that the rules in fact show what is now said to be clear, even after the luncheon adjournment when Mr Wong made the alternative suggestion that the HKAA would undertake to set up a national court of appeal for consideration of an appeal from the Decisions, and that no issue would be taken over timing: see Reasons §57.

16. This is also to be viewed against the history that I recorded which included that Lee had tried to launch an appeal, including by his solicitors who pointed out the apparent absence of any clear reference to appeal procedure or rules or requirements, but which attempt was effectively ignored by the HKAA: see Reasons §§37, 39, 40, and 41.  Indeed, Lee was expressly told that the Decisions were final and binding.

17. In reality, the HKAA seemed historically to think it had in fact concluded the whole process, including by some sort of appeal or review: see Reasons §§42 and 45. 

18. The submission now made is also to be viewed against the earlier equivocation or evolution in the HKAA’s case as to what was the proper alternative dispute resolution forum to which I was being asked to stay this action, and on which expert evidence had been adduced by the parties: see Reasons §49. 

19. It therefore seems a little rich for the HKAA to say that it should be entitled to appeal when at no earlier time had the HKAA itself been able to identify in its own rules and regulations – and then act on – the provisions now said to be clear.

20. Ms Cheng has referred me to various provisions by which she says (a) the HKAA could have made the Decisions (NCR rule 160) and (b) impose penalties (NCR rules, 173, 174, 178, 180, and 182), and (c) which identify the relevant appeal body as “the Stewards of the HKAA” (NCR rule 202).

21. It is therefore submitted that there are reasonable prospects of success in arguing that, contrary to the suggestions in the Reasons, the MSC did have power to make the Decisions and there is a clear route of appeal which has not been exhausted.

22. Ms Cheng also took me to various authorities she says I should have been shown before, which identify that the court will afford sporting bodies as great a latitude as is consistent with the fundamental requirements of fairness, and the fact that sports regulating bodies have unrivalled practical knowledge of the sport they regulate; that the court’s role is supervisory and the court should be reluctant to be drawn into making substantive decisions in substitution of sporting bodies; that the court should look at the fairness of a disciplinary regime as a whole, not just at one stage of it; and therefore that the court will allow the disciplinary regime to run its course before any intervention, which may in any event be premature.

23. Even on these principles, I consider there are no reasonable prospects of success.  Whilst the court will perhaps normally afford sporting regulatory bodies some latitude, the HKAA has not so far demonstrated unrivalled knowledge of its own regulatory powers, and rather has acted in a way which some might think calls out for supervision.  I do not think it is consistent with the fundamental requirements of fairness to leave this claim to be dealt with within the HKAA, and said as much in my Reasons: see §61.

24. Further, the original application for a stay was for a permanent stay of the proceedings, not some temporary stay whilst the regulator’s disciplinary regime is allowed to run its course.  That was in part because the HKAA’s previous stance was that the regime had in fact run its course, or that the HKAA was in any event not the appeal body because the relevant races had taken place in China and Malaysia, and that insofar as Lee was left without a remedy, that was his own fault: see Reasons §§48 and 56.

25. I also accept the submission made by Mr Jose Maurellet, leading Mr Jason Yu (who argued the case for Lee at the stay application), that there is a Flywin point in that there could be a factual contest as to the availability and appropriateness of the suggested alternative forum.  As he points out, notwithstanding the evidence already out forward (including expert evidence on the rules), no evidence has been adduced to canvass the likely composition of the Stewards of the HKAA, either as to the identity or the relevant qualifications or areas of expertise of any likely or potential members (whether standing members, or those who might be appointed ad hoc).  Nor has there been evidence to address the timing of any appeal to the Stewards of the HKAA, or its procedure, or how that body might deal with Lee’s full claims as are made in this action.

26. In any event, I decided the case on the basis that even if there were a clear appeal process, that would not oust the jurisdiction of the court, and such were the factual circumstances that I would not insist on the prior exhaustion of any appeal process.  Indeed, it seemed to me in the exercise of my discretion that the nature of the complaints were ones for which the court is clearly and distinctly the appropriate forum.

27. I do not think there are reasonable prospects of success in the attempt to interfere with the exercise of that discretion.  Nor do I think there is any other reason why in the interest of justice that the proposed appeal should be heard (and, indeed, no other reason was suggested by Ms Cheng in any event).