LEE HONG DISPENSARY SUPERSTORE CO LTD v. PHARMACY AND POISONS BOARD

HCMP 1545/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1545 OF 2006

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J U D G M E N T

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Facts

1.  The appellant, a body corporate, is an authorized seller of poisons under the Pharmacy and Poisons Ordinance (Cap 138) (“the Ordinance”).  It is authorized to carry out retail sale of poisons on registered premises provided that the actual sale is done by a registered pharmacist or in his presence and under his supervision.

2.  The appellant used to employ a Mr Ho to man its drug store.  He was not a pharmacist.  On two occasions, ie 6 December 2004 and 7 March 2005, Mr Ho sold antibiotics controlled under the Antibiotics Ordinance (Cap 137) to police undercovers without proper medical prescriptions.  He obtained the drugs by using a small screwdriver to open the locked cupboard in the drug store where the antibiotics were stored by the pharmacist.  He was duly charged and convicted of offences under the Antibiotics Ordinance, for selling the antibiotics without the authority of a prescription.

3.  Arising from the criminal convictions of Mr Ho, an employee of the appellant, by notice of inquiry dated 29 May 2006, the Pharmacy and Poisons Board established under the Ordinance notified the appellant that the board had decided to appoint a disciplinary committee to inquire into the appellant’s conduct in connection with the convictions in accordance with section 15 of the Ordinance, and to decide what action, if any, should be taken against the appellant under section 16(2)(b) of the Ordinance.

4.  The notice invited the appellant to submit in writing any explanation for the convictions and reminded the appellant that it might attend the inquiry in person or by counsel or solicitor.

5.  On 29 June 2006, the disciplinary committee appointed by the board held the inquiry.  The committee consisted of the medical officer in the Department of Health appointed by the Chief Executive under section 3(2)(e) of the Ordinance who acted as the chairman of the committee and two registered pharmacists (not being public officers) nominated by the Pharmaceutical Society of Hong Kong: section 15(1)(a) and (b).

6.  The committee was assisted by a legal adviser appointed by the Chief Executive: section 15(2).  He was a government counsel working in the Advisory Unit, Civil Division of the Department of Justice.  The division was headed by the Law Officer (Civil Law).

7.  The case against the appellant was presented by the secretary to the board who was represented by a legal officer: see regulations 5 and 6 and particularly 6(8) of the Pharmacists (Disciplinary Procedure) Regulations (Cap 138E).

8.  The legal officer was a government counsel working in the Civil Litigation Unit under the Civil Division headed by the Law Officer (Civil Law) in the Department of Justice.

9.  The appellant, as defendant in the inquiry, acted in person.  It was represented by its managing director, Mr Choy.

10.  The committee heard the case presented by the legal officer, which consisted of documentary evidence only.

11.  After conclusion of the legal officer’s case against the appellant, Mr Choy on behalf of the appellant indicated to the committee that the appellant would not call any witness to give evidence and had nothing to say in defence of the appellant’s case.

12.  Thereupon the committee adjourned the proceedings for deliberation.

13.  On the same day, after deliberation, the committee announced its decision.  Before doing so, the legal adviser disclosed at the resumed hearing in the presence of Mr Choy that he had given legal advice to the committee during its deliberation on the proper interpretation of section 17(2)(b) of the Ordinance (see below).

14.  The committee then announced its decision.  It rejected the board’s case based on section 17(2)(b) of the Ordinance (on which it had sought legal advice from the legal adviser), but found against the appellant on the basis of section 17(2)(d) of the Ordinance (also see below).

15.  After hearing mitigation from Mr Choy on behalf of the appellant, the board directed that the appellant be disqualified for a period of 4 weeks from being an authorized seller of poisons.  From that decision of the committee, the appellant now appeals to the Court of First Instance pursuant to section 16(3) of the Ordinance.

Grounds of appeal

16.  In this appeal, Mr Jackson Poon, Mr Edward Poon with him, takes 5 points on behalf of the appellant:

(1)     That there was a real danger of bias or appearance of bias, as both the legal adviser and the legal officer of the disciplinary committee were government counsel from the Civil Division of the Department of Justice;

(2)     That the disciplinary committee should not have treated the appellant as not defending its responsibility for the offences committed by Mr Ho, as the case presented by the legal officer disclosed a possible defence of due diligence under section 17(2)(d) of the Ordinance;

(3)     That as the appellant was not legally represented, the disciplinary committee and the legal adviser should have advised the appellant of the possible defence of due diligence under section 17(2)(d) of the Ordinance;

(4)     That the disciplinary committee should have considered the possible defence of due diligence as the evidence produced by the legal adviser had shown that due diligence was exercised by the appellant, which effectively amounted to a defence pursuant to section 17(2)(d) of the Ordinance; and

(5)     That taking into account all the mitigating factors, the disqualification of the appellant from being an authorized seller of poisons for 4 weeks was manifestly excessive.

1^st ground of appeal

17.  As regards the appellant’s first ground of appeal, namely the presence of a real danger of bias or appearance of bias as both the legal adviser and the legal officer were government counsel from the Civil Division of the Department of Justice, the applicable test for apparent bias may be found in Deacons v White & Case Ltd Liability Partnership [2004] 1 HKLRD 291.  In that case, the Court of Final Appeal endorsed the “reasonable apprehension test”.  In short, the court must ascertain all the circumstances which have a bearing on the suggestion that the judge or tribunal was biased.  It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility that the judge or tribunal was biased.  The material circumstances will include any explanation given by the judge or tribunal under review as to his knowledge or appreciation of those circumstances.  Where that explanation is accepted by the applicant for review, it can be treated as accurate.  Where it is not accepted, it becomes one further matter to be considered from the viewpoint of the fair-minded observer.  The court does not have to rule whether the explanation should be accepted or rejected.  Rather it has to decide whether or not the fair-minded observer would consider that there was a real possibility of bias notwithstanding the explanation advanced.  See pp 296 to 299 (paras 18-24).

18.  In the present case, although both the legal adviser and the legal officer were government counsel working in the Civil Division of the Department of Justice, they belonged to different units headed by different law officers.  The legal adviser belonged to the Advisory Unit whereas the legal officer came from the Civil Litigation Unit.  But more importantly, according to the unchallenged evidence, speaking generally, the legal adviser only assumes an advisory role and provides advice on legal matters to the committee during the disciplinary proceedings.  Both as a matter of practice and in the present case, the legal adviser does not give and indeed has not given any advice or representation to the secretary to the board in any matter concerning the latter’s conduct of the disciplinary proceedings.  The legal adviser would not be aware of the legal officer’s case before the inquiry and would not have sight of the hearing bundle until it was presented to the committee at the commencement of the disciplinary proceedings.

19.  At the inquiry, according to the evidence filed, the committee would consider the evidence adduced and submissions made by the legal officer on the secretary’s behalf and by or on behalf of the defendant respectively and determine whether a disciplinary charge against the defendant has been proved.  The legal adviser would advise the disciplinary committee on any legal issues or procedural matters that may arise in the course of the disciplinary proceedings.  Where the legal adviser has given any legal advice to the committee during its deliberation in private, the advice so given would be disclosed and recorded when the public hearing resumes after the deliberation stage.  If the defendant is found guilty of the charge, the committee will determine the level of punishment to be imposed after hearing any mitigating factors submitted by or on behalf of the defendant.  The legal adviser is not involved in the committee’s determination as to whether the defendant is guilty of the charge and the level of punishment to be imposed.

20.  In accordance with established practice, according to the unchallenged evidence, the legal adviser and the legal officer did not communicate with each other in the present case whether before or during the disciplinary proceedings, officially or otherwise.  Moreover, as mentioned, the legal advice given by the legal adviser to the committee during its deliberation was disclosed and recorded at the public hearing.  In fact, the advice given was about the interpretation of section 17(2)(b) of the Ordinance and had nothing to do with section 17(2)(d) of the Ordinance.

21.  As regards actual bias, Mr Jackson Poon submits on behalf of the appellant that as both the legal adviser and the legal officer were government counsel from the Civil Division of the Department of Justice, the legal adviser could have “unconsciously thought in the same way as the legal officer instead of protecting the interest of the appellant”.  He relies on Re Otis Elevator Co (HK) Ltd [1994] 1 HKC 740.

22.  I accept the argument of Mr Lee Tin Yan, senior government counsel for the respondent, that there is nothing in the evidence to suggest that the legal adviser who advised the committee was motivated by any misplaced sense of loyalty, even if only unconsciously, to his colleague in the Civil Litigation Unit.

23.  In my view, Re Otis Elevator is wholly distinguishable on the facts.  In that case, the relevant legislation provided for the Director of Electrical and Mechanical Services to be both the prosecutor/complainant as well as a member of the disciplinary board hearing the complaint.  Those facts were far removed from the facts in the present case.

24.  Mr Poon also relies on the 2^nd to 4^th grounds of appeal as evidence of actual though unconscious bias on the part of the legal adviser – if he had not been biased, those matters ought to have been raised by him with the disciplinary committee, counsel argued.

25.  For reasons that will be set out below, I reject all those 3 grounds.  In the circumstances, the substratum of counsel’s argument is wholly gone.  In any event, even if I were to accept any of those grounds of complaint as valid, I do not agree that whether taken individually or in conjunction with all other relevant circumstances, they would be sufficient to found the allegation of actual bias, as opposed to the possibility that they arose out of innocent mistakes (ex hypothesi) on the part of the legal adviser and/or the committee.

26.  On the unchallenged evidence, I am of the clear view that the circumstances would not lead a fair-minded and informed observer to conclude that there was a real possibility that the legal adviser, and thus the disciplinary committee, were biased.  On the evidence, there is no question of any actual bias either.  There is no substance in the first ground of appeal and I reject it.

2^nd ground of appeal

27.  The second ground of appeal is that the disciplinary committee should not have treated the appellant as not defending its responsibility for Mr Ho’s offences as the case presented by the legal officer disclosed a possible defence of due diligence under section 17(2)(d) of the Ordinance.

28.  Section 17 of the Ordinance reads as follows:

“(1)   In any case under section 16, where the person convicted of an offence or guilty of misconduct is an employee of the authorized seller of poisons, the Disciplinary Committee shall not give any direction unless proof is given to its satisfaction of some one or more of the facts specified in subsection (2), and it is of the opinion that having regard to the facts so proved the authorized seller of poisons ought to be regarded as responsible for the offence or misconduct.

(2)     The facts as to some one or more of which the Disciplinary Committee must be satisfied before giving any such direction as is mentioned in subsection (1) are -

(a)    that the offence or misconduct in question was instigated or connived at by the authorized seller of poisons or in the case of a body corporate, by an officer of that body corporate or in the case of an unincorporated body of persons, by any member of such body;

(b)   that the authorized seller of poisons or any person employed by him, or, in the case of a body corporate or an unincorporated body of persons, any officer or member of such body, as the case may be, had been guilty, at some time within 12 months before the date upon which the offence or misconduct in question took place, of a similar offence or misconduct and that the authorized seller of poisons had, or ought reasonably to have had, knowledge of that previous offence or misconduct;

(c)    if the offence or misconduct in question was a continuing offence or continuing misconduct, that the authorized seller of poisons had, or reasonably ought to have had, knowledge of the continuance thereof;

(d)   in the case of an offence under this Ordinance, the Dangerous Drugs Ordinance (Cap. 134) or the Antibiotics Ordinance (Cap. 137), that the authorized seller of poisons had not used due diligence to enforce the execution of the relevant Ordinance.

(3)     In this section references to the responsibility, knowledge or diligence of an authorized seller of poisons shall, in the case of a body corporate or an unincorporated body of persons, be construed as references to the responsibility, knowledge or diligence of that body as a whole.”

29.  It is clear that in order to render the authorized seller responsible for the offence of its employer and make a direction for disqualification against the authorized seller, the disciplinary committee must be satisfied of some one or more of the facts specified in section 17(2) and further take the view that having regard to the facts so proved the authorized seller ought to be regarded as responsible for the relevant offence.  In other words, establishing one or more of the four particular facts set out in section 17(2) is an essential step in the secretary’s case against the authorized seller.  Strictly speaking, it is therefore a misnomer to call due diligence, the subject matter of section 17(2)(d), a “defence”.

30.  As mentioned, at the conclusion of the secretary’s case, the committee asked the appellant whether it had any submission to make, and the reply given was in the negative.  The committee then asked the appellant whether it wanted to adduce factual evidence on oath or merely make a statement/submission.  Mr Choy on behalf of the appellant elected not to give or call any evidence but to make a statement.  Then when he was asked to make a statement, he replied that he had nothing to say.  The chairman of the committee then asked him whether he wanted to defend the case or not, Mr Choy replied that there was no need to do so.  The committee therefore adjourned the proceedings for deliberation.

31.  In the reasons given by the committee for its decision on liability, the committee noted that the representative of the appellant had taken the stance not to defend the case.  Nonetheless, it rightly recognized that one or more of the facts set out in section 17(2) must be established before the appellant could be found responsible for the offences of its employee.  It therefore went on to deal with section 17(2).  As mentioned, the legal officer had based the secretary’s case on section 17(2)(b) as well as section 17(2)(d).  The committee rejected the secretary’s case based on the first sub-section, but accepted its case on section 17(2)(d) (due diligence).  It then went on to consider whether, having regard to the facts so proved, the appellant as the authorized seller ought to be regarded as responsible for the offences committed by Mr Ho, its employee.  The committee came to a positive answer.  After hearing submission from Mr Choy on mitigation, the committee determined the direction to be given.

32.  In those circumstances, I wholly reject Mr Poon’s second ground of appeal.

33.  As mentioned, it is wrong for Mr Poon to say that due diligence was a defence.  In fact, it was an essential element of the secretary’s case.  Regardless of the stance of the appellant’s representative at the hearing, due diligence as an issue had to be raised and proved.  Indeed it was so raised and proved to the satisfaction of the committee.  There is therefore no question of the committee not considering the issue of due diligence.

34.  As to the committee’s treating the appellant as not defending the case, it all depends on what “not defending” means.  I have already summarized what had happened from the transcript.  What had happened requires no further elaboration.  I do not think the committee was led by the appellant’s attitude or stance at the hearing into thinking that it need not inquire into the issue of due diligence.  Indeed, it did, as is evidenced by the detailed reasons given on the issue.

35.  Certainly, the transcript shows that the disciplinary committee was never led by what Mr Choy said, did or did not do into thinking that the issue of due diligence had been conceded and need not be considered in its deliberation.  That did not happen.

36.  As I said, I reject the second ground of appeal.

3^rd ground of appeal

37.  The third ground of appeal is that the disciplinary committee and the legal adviser should have advised the appellant of the possible defence of due diligence.

38.  Mr Poon argued that the disciplinary committee should have specifically drawn Mr Choy’s attention to the “defence” of due diligence at the conclusion of the secretary’s case, particularly when Mr Choy was evincing an intention not to “defend” the case.

39.  Mr Poon relied on Szeto Ming v The Queen [1978] HKLR 61 and HKSAR v Wong Hon Wai [2002] 3 HKLRD 258, both criminal cases, in support of his argument that the disciplinary committee had the duty of drawing to the appellant’s specific attention any possible points of defence and the further duty to reasonably assist the appellant to bring the points out fully.

40.  I doubt very much whether the duty of the disciplinary committee or legal adviser towards an unrepresented defendant is as onerous as that suggested by Mr Poon, particularly when disciplinary proceedings are essentially civil, rather than criminal, in nature: A Solicitor v The Law Society of Hong Kong, CACV 107/2005 (7 July 2006), paras 44 and 94.

41.  In any event, on the facts, I am convinced that the appellant was more than adequately aware of the issue of due diligence and its importance.  Its not putting forward any positive case on the issue was a matter of its own choice.

42.  I note that in the notice of inquiry given by the board to the appellant on 29 May 2006, the appellant was specifically told that it could submit any explanation in writing to the committee and attend the hearing in person or by counsel or solicitor.  At the hearing, the legal officer specifically drew the committee’s attention to section 17(2)(b) and (d) and their importance to the secretary’s case against the appellant.

43.  Furthermore, the legal officer specifically read out to the committee, as part of the secretary’s case against the appellant, the relevant parts of Mr Ho’s cautioned statement which Mr Poon now relies on as materials which could possibly support a case of due diligence.  And before the conclusion of his case, the legal officer again referred to the two subsections and submitted that the disciplinary committee had to be satisfied with either of them before concluding that the charge against the appellant was proved.

44.  All this was done in the presence of Mr Choy.

45.  In those circumstances, I do not think there was anything further that the disciplinary committee ought to do at the conclusion of the legal officer’s case, apart from what it had done which I have already mentioned above.  I do not agree that the disciplinary committee or the legal adviser had to raise the issue of due diligence with the appellant specifically when Mr Choy on behalf of the appellant told the disciplinary committee in no uncertain terms that he did not wish to say anything by way of defence.

46.  I reject the third ground of appeal.

4^th ground of appeal

47.  The fourth ground of appeal is that the disciplinary committee should have considered the possible defence of due diligence as the evidence produced by the legal officer had shown that due diligence was exercised by the appellant.

48.  I reject this ground.  I have already mentioned that the disciplinary committee was fully aware of the need to consider section 17(2)(d) as an essential ingredient of the legal officer’s case against the appellant.  The reasons for its decision fully demonstrated that the disciplinary committee had considered the question of due diligence on the materials placed before it.

49.  There is no substance in the fourth ground of appeal.

5^th ground of appeal

50.  The last ground of appeal relates to punishment.  It is submitted that the disqualification period of 4 weeks was manifestly excessive.  Mr Poon argues that the evidence presented clearly showed at least “some diligence” on the part of the appellant, yet no credit was given by the disciplinary committee for the diligence exercised.  Mr Poon also argues that the disciplinary committee failed to give the appellant any discount for its “not defending” the case.  He suggests the customary one-third discount adopted in criminal cases for a plea of guilty was applicable.

51.  Mr Poon also complains that the present disqualification period was 4 times the period imposed by the disciplinary committee on the appellant in relation to a previous similar offence.  He submits that the increase could not be justified by the mere fact that it was a repeated offence.

52.  I reject these arguments.

53.  The disciplinary committee has heard the submission of Mr Choy on behalf of the appellant by way of mitigation.  It has taken into account all the relevant circumstances, including what the appellant has done and failed to do in relation to safekeeping the drugs and putting into place a system for that purpose. 

54.  I see nothing in the criticism that the disciplinary committee has failed to give credit for the appellant’s “diligence”.

55.  As regards the suggested one-third discount, as I said, I do not regard the disciplinary committee as having proceeded on the basis that the appellant had conceded the issue of due diligence.  There was no “guilty plea”.  In any event, Mr Poon was unable to tell the Court that there was any sentencing tariff for the type of offences in question and how the one-third discount ought to be applied.

56.  As regards the so-called 300% increase in sentence, the fallacy of Mr Poon’s argument was that it treated the previous punishment of one week’s disqualification as a sort of sentencing tariff.  It was not.  The previous punishment was imposed by reference to the relevant circumstances of that particular case.  The facts in the present case are not the same.  Apart from the fact that this is a repeated offence, I see no real connection between the previous conviction/punishment and the present case.

57.  The disciplinary committee has given full reasons for its direction.  They are valid reasons which this Court would be very slow to interfere with.  In any event, the disqualification period does not appear to this Court to be manifestly excessive.

58.  Matters of punishment should best be left to the disciplinary bodies constituted by persons involved in the profession or discipline concerned.  Brighton Pharmacy Ltd v The Disciplinary Committee of the Pharmacy and Poisons Board [1993] 2 HKLR 18, 20.

Outcome

59.  For the above reasons, the direction of the disciplinary committee is affirmed (section 16(3)(b)) and the appeal is dismissed accordingly.  The parties having agreed that costs should follow the event, I order that the costs of this appeal be paid by the appellant to the respondent, to be taxed if not agreed.