HONG KONG TELEVISION NETWORK LTD v. CHIEF EXECUTIVE IN COUNCIL

HCAL 3/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 3 OF 2014

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JUDGMENT
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A. INTRODUCTION

1. This is the applicant’s judicial review challenging the decision (“the Decision”) of the Chief Executive in Council (“the CEIC”) dated 15 October 2013 refusing the applicant’s application for a domestic free television licence (“FTV licence”).

2. The application is premised upon a number of grounds, including that the Decision was made in breach of a stated Government policy, the statutory discretion entrusted in the CEIC in granting a FTV licence is unconstitutional, the Decision was tainted with various procedural unfairness, and it was in any event irrational.  I would elaborate on each of these grounds later when I deal with them in this judgment.

3. To put these grounds in proper context, I would first set out the background and statutory framework relevant to this application.

B. BACKGROUND

4. In 1998, the Government carried out a major review of television policy.  Following the review (where a report was published), the Government announced its decision to open up the television market.

5. In this respect, in relation to domestic free television (“FTV”), the Government stated publicly and to the Legislative Council (“the LegCo”) that, given the broadcasting policy objectives to broaden programme choices, encourage innovation, maintain Hong Kong’s competitiveness and enhance its position as a regional broadcasting hub, under the new licensing regime to be introduced under the Broadcasting Bill, there would be no limit on the number of domestic FTV licences to be issued.[1]

6. In line with this published policy, the Broadcasting Ordinance (Cap 562) (“the BO”) was enacted in July 2000.

7. Under section 5 of the BO, any person who provides, among others, domestic FTV programme services[2] in Hong Kong without a licence commits an offence which is punishable by a fine and imprisonment.  In other words, a person who wishes to provide such services must obtain a licence in accordance with the BO.

8. Sections 8, 9, and 10 of the BO set out the licensing regime for FTV.  They provide as follows:

“8. To whom licence may be granted

(1) The [CEIC] may in accordance with this Ordinance grant a licence to provide a domestic free television programme service or domestic pay television programme service on application made to him in the specified form by a company.

…

9. Recommendations by the Authority on applications for licences

(1) An application for the purposes of section 8(1) or (2) shall be submitted to the Authority [the Communications Authority] in the specified form.

(2) The Authority shall consider applications for a domestic free television programme service licence or a domestic pay television programme service licence and make recommendations thereon to the Chief Executive in Council.

(3) Where an application is submitted to the Authority, it shall—

(a) cause a notice to be published in the Gazette as soon as is practicable—

(i) stating the name of the applicant and the type of licence sought by the applicant together with such other particulars as the Authority thinks fit; and

(ii) stating that members of the public who are interested may make representations on the application to the Authority by a date specified in the notice, being a date not less than 21 days after the notice is published; and

(b) consider the representations, if any, received by the date.

10. Grant of licence

(1) The Chief Executive in Council may, after considering recommendations made pursuant to section 9(2), grant a licence under section 8(1) subject to such conditions as he thinks fit specified in the licence.

(2) …

(3) The Chief Executive in Council, in the case of licences, or a class of licences, that may be granted under section 8(1) and the Authority, in the case of licences, or a class of licences, that may be granted under section 8(2), may by notice in writing specify conditions to which the licences shall be subject.

…”

9. Thus, under sections 8(1), 9 and 10(1) of the BO, the CEIC is vested with the discretion to decide whether to grant a licence (subject to any conditions as the CEIC thinks fit to impose) to an applicant for providing FTV programme services.

10. The statutory provisions have however not specified any limit on the number of FTV licences to be issued by the CEIC.  Hence, any interested applicant may apply to the Communications Authority[3] (“the Authority”) for the grant of a FTV licence at any time.  Once an application is received, the Authority shall consider such an application and make recommendations thereon to the CEIC.  Having considered the Authority’s recommendations, the CEIC may, in the exercise of his discretion, grant a FTV licence to an applicant.

11. To facilitate any interested party to apply for a FTV licence, the Authority has since 2002 promulgated a “Guidance Note for Those Interested in Apply for Domestic Free Television Programme Service Licences in Hong Kong” (“the Guidance Note”).  The Guidance Note sets out, among others, the various criteria for assessment of a licence application that the Authority will look at before making a recommendation to the CEIC.

12. Although the BO was enacted in 2000, it was until 2009 and 2010 that the Government received respectively three applications for FTV licence.  At all material times before then, Hong Kong has two incumbent licensees (namely, ATV and TVB) providing FTV programme services.

13. The three new applicants are:

(1) HKTVN[4] (ie, the applicant in this judicial review application) who submitted its application for licence in December 2009;

(2) Fantastic TV[5] who submitted its application on 15 January 2010; and

(3) Entertainment TV[6] who submitted its application on 31 March 2010.

14. The Authority had processed these FTV licence applications and assessed each of them having regard to (a) the relevant statutory requirements in the BO; (b) assessment criteria set out in the Guidance Note; (c) public opinion; (d) whether each of the applicants had agreed to comply with the proposed licence conditions that might be imposed; and (e) possible impact of new FTV licences on the local television programme service market.

15. Other than conducting a public consultation exercise from July to September 2010, the Authority also engaged a consultant[7] (“the Consultant”) to provide a report on the competition implications on new entrants to the local FTV market.  The Consultant provided its report (“the first report”) in April 2010.

16. It also provided a stage two report in April 2011 (“the second report”) to advise the Government and the Authority on the potential for additional domestic FTV licences to be made available in Hong Kong.

17. In the second report, the Consultant was asked to and provided its assessment, among others, of the relative competitiveness of the three applicants for licence in four areas,[8] namely, (a) financial capability; (b) investment plan; (c) programming strategy and capability; and (d) technical soundness.  The Consultant has put HKTVN second amongst the three applicants in all areas, except programming strategy and capability, where HKTVN ranked last.[9]  Insofar as the overall competitiveness analysis is concerned, the Consultant again ranked HKTVN second amongst the three applicants.[10]

18. At the same time, after analysing the general revenues generated in the domestic FTV markets and the then current business plans submitted by the applicants, the Consultant was of the opinion in this report that the market might not be able to sustain a total of five players (ie, the two incumbent licensees and three new licensees).[11]

19. On 13 July 2011, the Authority submitted its recommendations to the CEIC for his consideration.  The Authority recommended that approval‑in‑principle (“AIP”)[12] be given for the grant of FTV licence to all the applicants.  In its letter dated 13 July 2011, the Authority also set out in details its assessment of the applications in support of the recommendations.

20. In particular, in making the recommendations:

(1) The Authority was of the view that it did not have a duty to protect the interests of incumbent licensees (ie, TVB and ATV) by maintaining the status quo or limiting entry to the market.

(2) The Authority believed that it would be in the public interest to do so as new entrants in the FTV market would enhance competition, increase investment in programming and local content production, and substantially enhance viewers’ choice.  This is particularly so as most of the public views in response to the public consultation were in support of opening up the FTV market.

(3) In relation to sustainability of the market, noting the Consultant’s expressed doubts on the sustainability of HKTVN and Entertainment TV, the Authority was of the view that the Consultant’s analysis was based on static information provided by the applicants in the applications, and did not take into account the dynamic competitive environment where companies respond to market conditions and adjust their business strategies and operations accordingly.  Further, it believed that the applicants with their experience and expertise would be in the best position to evaluate market potential and economic viability of the proposed services.  It therefore was of the view that the sustainability of the market or individual applicants should not be the primary consideration in deciding whether a licence should be granted or not.  The Authority should recommend granting licence to an applicant so long as it was considered to have met all the relevant requirements.

21. Upon subsequent requests by the Authority, the Consultant also provided an updated analysis of the second report on 10 January 2012 and a report of supplementary analysis on the competition assessment on the new applications for FTV licence on 6 February 2012.

22. The CEIC considered and discussed the applications and the recommendations at various Executive Council (“ExCo”) meetings held respectively in January, February, and May 2012.

23. After 22 May 2012, following the procedural steps as approved by the CEIC, the Commerce and Economic Development Bureau (“the CEDB”) further:[13]

(1) provided:

(a) all interested parties (the applicants, TVB, and ATV) with the Authority’s recommendations and its subsequent updates contained in its letters dated 24 and 27 February 2012 to the Secretary for Commerce and Economic Development (“the SCED”) and a summary of the updated analysis by the Consultant; and

(b) TVB and ATV with copies of the Consultant’s reports with the parts containing confidential information redacted; and

(2) invited them to make submissions in response to these documents.

24. Submissions were subsequently received from the interested parties.  The Authority was then asked by the SCED to make responses to these submissions.

25. In July 2012, a new Chief Executive (“CE”) was elected in Hong Kong.

26. In the meantime, in relation to the FTV new licence applications, ATV and TVB had respectively applied for leave to apply for judicial review seeking to challenge the consultation process and prevent the CEIC from proceeding to finally consider the applications.  There had also been other events affecting the consideration of HKTVN’s application which are not relevant to this judicial review.

27. When all these matters had been resolved, the Authority’s recommendations and the FTV licence applications were then further considered by the CEIC in various ExCo meetings held in January, February, March, May, September, and October 2013.

28. At the meeting on 15 October 2013, after deliberation, the CEIC decided, among others, that:

(1) A gradual and orderly approach should be adopted in considering FTV licence applications.

(2) Fantastic TV’s and Entertainment TV’s licence applications should be granted AIP, subject to the CEIC’s further review and final determination at the second stage.  The FTV licences that might be granted to Fantastic TV and Entertainment TV should be prepared and submitted to the CEIC for consideration and, if appropriate, approval at the second stage, with licensing conditions considered.  They should also provide further information as required for the purpose of the CEIC’s review and determination at the second stage.

(3) HKTVN’s licence application should be rejected.

29. The CE then publicly announced these decisions.

30. On 6 January 2014, HKTVN applied for leave to apply for judicial review challenging the decision (ie, the Decision) to reject its application.  Leave was granted on papers on 9 January 2014.

C. THIS JUDICIAL REVIEW

31. HKTVN raises a number of grounds in support of this judicial.  I would consider each of them in turn below.

C1. The Decision is not in adherence to a stated Government policy

32. Under this ground, essentially HKTVN complains that the Decision to reject its licence application is made in departure from or not in adherence to the Government’s publicly stated policy (“the Policy”) made in 1998 after the review.

33. In substance under this complaint,[14] HKTVN says:

(1) The Policy is that the Government would not impose any pre‑set limit or ceiling as to the number of FTV licences that could be granted, subject to physical or technological constraints.  In other words, other than for physical or technological constraints, the Government would not refuse any licence application on the basis or by reason of pre‑fixing or pre‑limiting the number of licences that she would be prepared to grant.

(2) The Decision to refuse HKTVN’s licence application was made on the basis that the CEIC had decided to limit to only grant at most two new FTV licences.  This is effectively pre‑setting or pre‑limiting the number of FTV licences that could be granted, and thus in departure from the Policy.

34. The CEIC has not disputed that there is the Policy. He however disputes the meaning of the Policy ascribed to it by HKTVN, and says that the Decision was made consistently with the Policy.

35. It is also important to note that it is not the CEIC’s position that there was a change of the Policy.

36. It is trite that the formulation of policies is a proper course for the provision of guidance in the exercise of an administrative decision: R (Alconbury Developments Ltd) v Secretary for State for the Environment Transport and the Regions [2003] 2 AC 195 at paragraph 143, per Lord Clyde.

37. Moreover,it is well settled that an administrative decision made in departure from a stated policy by reason of the decision‑maker’s misinterpretation of its meaning or misunderstanding of the policy itself is defective and unlawful, and can be quashed in a judicial review.  This is so as it could be regarded as the decision‑maker having ignored or no regard to the relevant policy (which he ought to have) in making the decision: Wong Wei Man v The Amusement Games Centers Appeal Board (unreported, HCAL 775/2000, 2 November 2000) at pp 10‑11, per Stock J (as he then was); Cathay Pacific Airways v Flight Attendants Union (unreported, HCAL 19/2005, 25 August 2006) per Hartmann J (as he then was) at paragraphs 13‑14.

38. Further, what is the meaning of a policy is a matter for the court to construe it objectively in accordance with the language used and in its proper context, and should not be construed as if they were statutory or contractual provisions: Tesco Stores Ltd v Dundee City Council [2012] UKSC 13 at paragraphs 18‑19; Wong Wei Man, supra, at p 11.

39. Given these legal principles and in light of the above contentions raised by the parties, the issues that I need to consider under this ground are:

(1) what is the meaning of the Policy; and

(2) whether the Decision was made in adherence to that Policy as construed by the court.

C1.1. The meaning of the Policy

40. The statement expressing the Policy is first made in the Government’s press release on 2 February 1998 at paragraph 3 as follows:

“3. As a long term policy objective and in line with the global trend of deregulation for the telecommunication and broadcasting industries, Government is committed to further liberalizing the television industry and opening up the market for more competition. This commitment is also guided by the long established and well‑recognized policy objective to encourage the exploitation of new technologies and the optimal use of resources in order to increase viewer’s programme choice as well as to enhance Hong Kong’s position as a pre‑eminent regional broadcasting hub. In an increasingly open and competitive market, Government will maintain its role to provide a conducive environment for the development of the broadcasting industry. In so far as market demands exist and the advance of technologies allows, no artificial limits should be set for the number of players in the field. Government’s role should be to ensure that there is free and fair competition and that all players will have the freedom to make business decisions and respond to market forces. Against this background, the 1998 review is set to achieve the following objectives:

a. to take stock of the current developments in local television broadcasting and to examine how new technologies impact on existing policies;

b. to review the existing regulatory regime in the light of technological developments and changing market demands; and

c. to identify ways to further advance Government’s broadcasting policy objectives of broadening programme choice, encouraging innovation and promoting Hong Kong as a regional broadcasting hub.” (emphasis added)

41. Then, perhaps more pertinently, the Policy statement was made to the LegCo in the LegCo Brief on the 1998 Review of Television Policy at paragraphs 12 and 20 as follows:

“12. Questions were raised as to why the Government had not proposed to open up the free‑to‑air television market for competition. TA [the Telecommunications Authority] has confirmed that, because of spectrum constraint, a fifth UHF television channel with territory‑wide coverage transmitted by analogue technology is technically not feasible at the moment. However, transmission of free television service is not limited to using the UHF spectrum. General and direct‑to‑home satellites, for example, can be used to provide free television services. Under the new technology‑neutral licensing regime, there would be no limit on the number of domestic free licences to be issued. Applications for domestic free licences transmitted through other technically feasible means will be considered.

…

20. Under the misguided belief that the Government does not intend to open up the free television market, a number of respondents have suggested that the charging of royalties on the terrestrial television licenses should continue. As explained in paragraph 12, there will be no limit on the number of domestic free television licences. Under the new regulatory regime, the free television market, like the pay television and other markets, will be opened up for competition. Thus, it is decided that the advertising and subscription royalties for all television and sound broadcasting licensees should be abolished as originally proposed. The abolition of royalties, together with the immediate application of full‑cost recovery licence fees, would take effect when the new regulatory regime has been put in place.” (emphasis added)

42. Although statements to similar effect have been repeatedly made by the Government in various contexts and documents over the years, for the present construction purposes, I think it is most pertinent to look at the above two documents.  This is so as it is common ground that the Policy was formulated and publicly made in 1998 and there has been no change to the Policy since then.

43. It is the CEIC’s contentions that the statements “no artificial limits should be set for the number of players in the field” (as stated in the press release), and “there would be no limit on the number of domestic free licences to be issued” (as stated in the LegCo Brief) meant and were intended to mean that “the previous ceiling which arose as a result of physical or technological constraints on longer existed”.[15]

44. Mr Yu SC (leading Ms Eva Sit) for the CEIC submits that the CEIC’s construction of the Policy is correct when it is looked at in the following proper context:

(1) Before the 1998 review, it had been the case that transmission of FTV programmes was made through analogue technology through the Ultra High Frequency (“UHF”) spectrum. The technological constraints of analogue transmission by UHF spectrum made it impossible and impracticable for accommodating any new FTV licensees in addition to the two incumbent licensees which had been offering TV programmes through four TV channels.

(2) It is therefore important to understand the statement of “no pre‑set limit” in this proper context.  Prior to 1998, the two incumbent licensees, ie, TVB and ATV, each took up two UHF, one for each of the English and Chinese channels.  The structural (spectrum) constraints were such that at the time it was physically not feasible to have a fifth UHF with territory‑wide coverage, and so no new FTV license could be granted.

(3) However, with the advancement in technology, it became possible for television programme services to be transmitted by means other than using the UHF spectrum, thus making it possible for the market to be “opened up” to new entrants.  For that reason, the decision was made in 1998 to open up the market, and the BO was enacted thereafter to facilitate this by introducing a “technology‑neutral” licensing regime.

(4) All the statements made by or on behalf of the Government that there would be no “pre‑set” or “artificial” ceiling on the number of licenses to be granted have to be understood in this context; they are directed at, and stand in contradistinction to, the previous technology based regime whereunder physical or technological constraints existed which limited the number of licenses that could be granted.

45. With respect, I am unable to accept the submissions.

46. As borne out by the above quoted texts from the press release and LegCo Brief, the Policy was made in the context of, and to facilitate, the stated objectives of:

(1) Opening up the market for free and fair competition.

(2) Enabling all players to have the freedom to make business decisions and respond to market forces.

(3) Broadening programme choice, encouraging innovation, and promoting Hong Kong as a regional broadcasting hub.

47. These underlying objectives of the Policy have been repeatedly emphasised by the Government over the years.  In particular, the Government had explained these unchanged objectives as follows:

(1) In the LegCo Paper dated 1 April 2000,[16] in introducing the Broadcasting Bill, and in explaining the general licensing policy under the heading of “Licensing Criteria for Television Programme Service Licences” at paragraph 3, it was stated that following the 1998 Review of Television Policy, the Administration announced the policy decision, among others, to “open up the television market.  We believe a vibrant and thriving television market would attract investment, encourage innovation and, most important of all, widen viewers’ choice of programmes…  It is stated in the Guidance Note that subject to physical or other constraints, there is no pre‑set limit on the number of licenses to be issued.”

(2) On 6 January 2010, in the written answer to the Hon Ms Emily Lau’s question on the status of the processing of the FTV licence applications, the Administration stated that “[i]t has long been the Government’s policy to promote the sustainable development of the local broadcasting industry and encourage investment and competition as well as the adoption of innovative technologies by the industry, thereby enhancing TV programming choices and quality, and strengthening HK’s position as regional broadcasting hub under a business‑friendly environment.  Subject to geographical and/or transmission constraint, we welcome application under the existing licensing and regulatory regime from any party… The provisions under the BO are comprehensive and forward‑looking.  We adopt a market‑driven approach, which is also technology neutral and without a pre‑set limit on the number of licences to be issued…”[17]

48. Looked against these objectives and the context underlying the Policy, I do not agree that the Policy was meant and intended to mean only the removal of a limit on the number of licences that can be granted imposed by reason of the previous technological constraint as contended by the CEIC.

49. In my view, these underlying publicly stated objectives of positively opening up the TV market, promoting fair and active competition in the TV market generally, having a market‑driven approach in the licensing regime, broadening viewers’ choice of programmes, and promoting Hong Kong as a regional hub of television broadcasting, are more consistent with the Policy being one that there would be generally no pre‑set limit on the number of FTV licences that can be granted, unless a limit is necessitated by reason of technological or physical constraints. This is particularly so as:

(1) It is more consistent with the language used in stating the Policy:

(a) For example and in particular, in the press release (as quoted at paragraph 40 above), the Administration stated expressly that so far as “market demands exist” and “the advance of technologies allows”, no artificial limits should be set for the number of players in the field.  In other words, the no pre‑set limit policy was a response to and reflection of not only just the removal of previous technological constraints but also the market demands for more players in the FTV market.  This is thus inconsistent with the CEIC’s contention that the Policy was only to remove a ceiling imposed previously by reason of technological constraints.

(b) Further, the positive language used in stating the Policy that there being no pre‑set limit on the number of FTV licences that could be granted is on its face inconsistent with expressing an intention that it was only to remove the previous ceiling which existed because of technological constraint.  This is more so as there was in any event not a previous stated policy that only two licences could be granted.  It was only an objective hitherto fact that there could only be two licences because of the technological constraints. Ordinarily understood, if it were the intention and meaning of the Policy to state that the latest technology removed any constraints on the number of licences that could theoretically be granted, one would have expected the Administration to state it simply that way, instead of stating it in the reverse way of there being no limit of licences that could be granted, subject to any technological or physical constraints.  It would also be unnecessary for the Administration to expressly underline the Policy by the objectives of facilitating and promoting a market‑driven, fair and free competition of the FTV market.

(2) In those publicly made statements setting out the Policy of no pre‑set limit, whenever a qualification was made, they only expressly referred to physical and technological constraints.  If the Administration had also intended, under the Policy, to be in a position to impose a limit based on other reasons in appropriate circumstances, it would be unusual for her not to have expressly reserved that position when stating and re‑stating the Policy repeatedly over the years.

50. Mr Yu however also contends that HKTVN’s construction of the meaning of the Policy cannot be correct as it would be inconsistent with the clear and wide statutory discretion given to the CEIC.

51. It is submitted that the BO has expressly made clear that the CEIC has an unfettered discretion whether to grant a licence or not, and the CEIC needs only to consider the Authority’s recommendations but is not bound by them.  On the other hand, HKTVN’s construction of the meaning of the Policy means effectively that as long as an applicant satisfies the requirements of the Guidance Note, it must be granted a FTV licence.  Thus (Mr Yu further says), HKTVN’s said contended meaning of the Policy, if accepted, will be directly contrary to the statutory scheme, as it would fetter the CEIC’s statutory discretion.  As such, the Policy could not have been a lawful policy, as it is trite that a policy is only lawful if it does not go beyond the terms and purposes of the relevant power or if it seeks to fetter the decision‑maker’s relevant discretion.  See: De Smith, supra, paragraph 5‑080; EC Gransden v Secretary of State for the Environment (1987) 54 P & CR 86 at 93‑94, per Woolf J; Asburn et al, Judicial Review Principles and Procedure, paragraphs 21.05 and 21.32; Wise Union Industries Ltd v Hong Kong Science and Technology Parks Corp [2009] HKLRD 620 at 630‑1.

52. Similarly, Mr Yu submits that HKTVN’s said construction of the Policy is also directly contradictory to and inconsistent with the Guidance Note, which has expressly provided that, whilst there is no pre‑set ceiling on the number of licences to be issued,[18] mere compliance with the Guidance Note does not entitle the applicant to the grant of a licence and the final decision rests with the CEIC.[19]

53. Again with respect, I am not persuaded by these submissions.

54. These arguments are premised fundamentally on the submissions that HKTVN’s case is that the Policy of no pre‑set limit means as long as an applicant satisfies all the requirements under the Guidance Note, a licence has to be granted.

55. However, I do not understand HKTVN’s case is as such.  This is confirmed by Mr Coleman SC (leading Mr Jin Pao) for HKTVN, who submits at the hearing that HKTVN’s case is that under the Policy, there would not generally be a pre‑set limit on the number of licences that can be granted in assessing any applications for FTV licences.  What it means is that an application (which say has met all the basic requirements as provided in the Guidance Note) cannot be rejected effectively on the ground and by the reason that there is already a fixed number of licences that would be granted.  The CEIC, in considering the applications, is however still entitled in the exercise of his discretion to reject an application on other reasons, for example say qualitative reasons targeted at the subject application and wider public interest considerations.  It is only that, given the Policy, the CEIC cannot reject an application effectively by reference to the reason that there is already a pre‑fixed number of licences that the Administration would grant.

56. I agree with Mr Coleman.  It is not HKTVN’s case as expressly stated in the Form 86 that the Policy means an application must be granted as long as it satisfies all the requirements in the Guidance Note.  I also do not find that to be a logical and inevitable consequence of the meaning that there cannot be a pre‑set limit on the number of licences that would be granted.  As submitted by Mr Coleman, the Policy only means that an application would and should not be rejected on the basis of there being a decided or pre‑fixed number of licences that can be granted.  It does not mean that it cannot be rejected on the basis of other justifiable reasons not based on there being a fixed number of licences that can be granted.

57. I will therefore also reject Mr Yu’s above contentions.

58. I therefore conclude that, on a proper construction, the meaning of the Policy of no pre‑set limit is that, other than physical or technological constraints, the Administration would not effectively reject an application for FTV licence on the basis of or by reference to the reason that there is already a pre‑fixed number of licences that could be granted.

59. Having concluded on the meaning of the Policy, I now turn to look at the next question as to whether the Decision was made in departure from that Policy.

C1.2  Whether the Decision made was in adherence to the Policy

60. Under this question, one has to consider whether the basis underlying the Decision to refuse HKTVN’s licence application is effectively that there was a pre‑fixed number of FTV licences that the Administration had decided to issue.

61. As mentioned above, after studying the Consultant’s reports, the Authority on 13 July 2012 submitted its recommendations to the CEIC recommending that AIP be given to grant FTV licence to all three applicants, including HKTVN.  It is also the Authority’s view that all three applications had met the requirements set out in the Guidance Note.

62. For the purpose of this judicial review, the CEIC has disclosed all the memoranda and minutes of those relevant ExCo meetings[20] leading to the Decision.  The SCED has also filed an affidavit to explain the background and events leading to the Decision.

63. After reading these minutes and evidence (which are not in any controversy), the bases upon which the CEIC decided to refuse HKTVN’s applicant can be summarised as follows:

(1) The CE was of the view that the Administration should in the public interest adopt a gradual and orderly approach in considering the granting of FTV licences.  This is so because the FTV market might not be able to support five licensees (as concluded by the Consultant in its reports).  This would lead to cut‑throat competition among the licensees, which would in turn lead to deterioration of programmes quality.  There would also be less divergence on programme types.  One or more of the licensees might fail.  The reputation of Hong Kong as a regional broadcasting hub would therefore be affected.  These would not be in the best interest of the public.  The CE was of the view that, although there was not sufficient competition in the current FTV market, a completely open market also would not be conducive to an optimal competition themselves and therefore a gradual and orderly approach was a right step in the current market in order to ensure quality.

(2) Further, the CE also reiterated his view that in considering the three applications for FTV licences, among the four criteria as assessed by the Consultant,[21] programming strategy and capability should be given the most important weight in assessing the competitiveness of the three applicants.

(3) After deliberations, the members then by majority[22] agreed that (a) the gradual and orderly approach should be adopted; and (b) Fantastic TV should be granted AIP if one licence was to be granted, and Fantastic TV and Entertainment TV should be given AIP if two licences were to be granted.

(4) It was then recorded that the ExCo advised and the CE ordered that (a) the gradual and orderly approach should be adopted in considering the FTV licence applications; and (b) Fantastic TV and Entertainment TV should be given AIP subject to the CEIC’s further review and final determination, while HKTVN’s application should be rejected.

64. In my view, the above bases objectively looked at show that the Decision was made by the CEIC in substance by reference to the reason that there was a pre‑fixed a number of FTV licences that can be granted.  This is so as:

(1) By adopting the gradual and orderly approach in considering the three applications (and given that the reasons in adopting it is to avoid too many players in the market which might in the CE’s view affect programme quality), the CEIC in effect and in substance decided that there should be a limit of no more than two licences that could be granted.  This is further borne out by the fact that, under this approach, the CEIC then went on to consider and rank which of the three applicants should be given the AIP if either one or two AIP were to be granted.

(2) Inherent in having to rank the applicants, instead of assessing each of them individually on its own merits as to whether its application for licence should be granted, is that there would be a pre‑fixed limit on the number of licences that can be granted.

65. The Decision is therefore in my view made not in adherence to the Policy.

66. The Administration is of course entitled to change her policy, subject to complying with various criteria deemed as necessary by the law.[23] However, it is not the CEIC’s position in the present case that there is a change of policy.

67. In the premises, I would quash the Decision on the basis that it was made in departure from the Policy and remit the same to the CEIC for reconsideration in light of the Policy.

C2. Legitimate expectation

68. It is more convenient to consider this ground after my above conclusion on the ground of Policy.

69. The applicable principles on legitimate expectation have been laid down by the CFA in Ng Siu Tung v Director of Immigration (2002) 5 HKCFAR 1 at paragraphs 91‑99, perLi CJ.  They can be summarised as follows:

(1) Generally speaking, a legitimate expectation arises as a result of a promise, representation, practice or policy made, adopted or announced by or on behalf of the Government (at paragraph 92).

(2) While it is essential that the Government and the relevant government agency remain free to change its policy, the adoption of a new policy does not relieve a decision‑maker from his duty to take account of a legitimate expectation (at paragraph 93).

(3) The law requires that a legitimate expectation arising from a promise or representation be properly taken into account in the decision‑making process so long as to do so falls within the power, statutory or otherwise, of the decision‑maker (at paragraph 94).

(4) Unless there are reasons recognised by law for not giving effect to legitimate expectations, then effect should be given to them; fairness also requires that, if effect is not given to the expectation, then the decision‑maker should express its reasons so that they may be tested by the court when the decision is challenged (at paragraph 95).

(5) Even if the decision involves the making of a political choice by reference to policy considerations, the decision‑maker must make the choice in the light of the legitimate expectation (at paragraph 96).

(6) If the decision‑maker fails to do so, the decision will be vitiated by reason of a failure to take into account a relevant consideration; the failure to take account of the legitimate expectation constitutes an abuse of power and once the court has established such an abuse, it may ask the decision‑maker to exercise his discretion by taking the legitimate expectation into account (at paragraph 97).

70. Under this ground, it is HKTVN’s contention that, by reason of the Policy, it enjoyed a substantive legitimate expectation from the time when it submitted its FTV licence application on 31 December 2009 onwards that:

(1) its application would not be rejected by reason of a ceiling imposed on the number of FTV Licences unless there were technological or physical constraints warranting otherwise;

(2) its application would not be approached on the basis that there would be a fixed number of FTV licences to be issued such that HKTVN would have to justify in terms of relative merit why its application ought to succeed in priority to the other applicants; and

(3) its application would not be rejected on account of the fact that there were, or would be, a sufficient number of FTV licence holders in the market at a particular time.

71. HKTVN contends that its legitimate expectation was frustrated by the Decision.  This is so as:

(1) By adopting the gradual and orderly approach in making the Decision, the CEIC effectively and in substance failed to take into account the legitimate expectation.

(2) Although the Government denies there is any change of policy, if there were any change of the Policy in adopting gradual and orderly approach, the Government could only lawfully do so by still taking into account the said legitimate expectation and give reasons why she did not give effect to it.  The Government had failed to do so in making the Decision (which is borne out by the fact that (a) the Government had repeatedly denied that HKTVN had a legitimate expectation (which therefore must mean that it had not taken that into account); and (b) in any event she had not given any reasons for why she decided to change the policy).

72. I agree with these submissions.

73. Given the court’s above construction of the Policy’s meaning, I agree that HKTVN had a legitimate expectation that its licence application would not be rejected on the basis that there would be a pre‑fixed number of licences to be granted.  It would also give rise to the expectation as formulated by HKTVN stated above.

74. Mr Yu’s contention is that HKTVN did not have a legitimate expectation premised on the CEIC’s arguments on what he understood to be HKTVN’s meaning of the Policy as mentioned above — an argument which I have rejected above.  Hence, I would similarly reject the CEIC’s contentions on the lack of a legitimate expectation.

75. Mr Yu also argues that even if there was a legitimate expectation, it is at most a procedural (in contrast to a substantive) one, since it is accepted by HKTVN that the Policy could be changed.

76. This is however a distinction without substance for the present purpose.  As observed by the CFA in Ng Siu Tung, supra, although the government is generally entitled to change its stated policy, it is subject to the requirement that she still has to give regard to that legitimate expectation premised on a published policy in making the relevant decision and to explain why she does not give effect to it.

77. In the present case, given that it is the CEIC’s position that there was no change of policy, and given the court’s conclusion that he had misconstrued the Policy’s meaning, it must be the case that he had not given a proper regard to the Policy and thus the legitimate expectation when making the Decision.  Alternatively, if either there was a change of policy or that the CEIC had not followed the Policy in making the Decision, he must give an explanation as to why that was the case.  This has also not been done.  Whichever is the case, it has rendered the Decision unlawful in that respect.

78. For these reasons, I would also quash the Decision on this ground, and remit it to be reconsidered by the CEIC by taking into account the legitimate expectation.

C3. Procedural unfairness

79. HKTVN relies on a number of bases to support the ground that the Decision is tainted by procedural unfairness.  They are: (a) the CEIC failed to seek the views of the Authority; (b) HKTVN was precluded from amending its application; (c) the CEIC has failed to give reasons for the Decision; and (d) the CEIC’s reliance on the Consultant’s reports was flawed.

80. I would deal with these bases one by one.

C3.1  Failure to seek the views of the Authority

81. Under this ground, Mr Coleman’s arguments run as follows:

(1) Sections 9 and 10 of the BO impose expressly a duty on the CEIC to consider the recommendations of the Authority before making a decision as to whether to grant a FTV licence.

(2) Implicit under section 10 is also that the CEIC should give considerable weight to the Authority’s recommendation since the Authority possesses specialist knowledge and expertise on matters concerning broadcasting industry.

(3) In exercising his statutory powers under section 10, the CEIC must take reasonable steps to acquaint or equip himself with the necessary relevant information to enable him to make an informed decision.[24]  This information must include the Authority’s recommendation.

(4) In this regard, the CEIC failed to take reasonable steps to equip himself with the necessary relevant information to enable him to make an informed decision by not seeking the views of the Authority on the introduction of the gradual and orderly approach and its impact on the applications, including the relative ranking of the three applications under this approach.

(5) The Authority was prevented by the CEIC from giving its recommendation on the above matters which formed the essential basis upon which the applications were ultimately determined.  The CEIC thus precluded himself from properly discharging his statutory obligation to fairly and properly consider the Authority’s recommendations.

(6) It was therefore manifestly unfair and procedurally flawed for the CEIC to reach its decision without first seeking the Authority’s views as to the gradual and orderly approach and its impact on the applications (including their relative ranking under the approach).

82. I am unable to accept these submissions.

83. It is correct that the CEIC has a statutory obligation under section 10 to take into account the Authority’s recommendations in making the decision whether to grant a FTV licence. However, this must be understood also in the context that the CEIC has an unfettered discretion in making the decision, including not accepting the said recommendations.  This has also been expressly made clear in the Guidance Note.

84. In the present case, as rightly submitted by Mr Yu, in the Authority’s recommendations, it has (a) given its opinion that sustainability should be left to the market to decide, and hence there was no need to take a cautious approach; and (b) decided not to rank the applicants for the reasons set out therein.  The CEIC disagreed with these and decided (a) to adopt the gradual and orderly approach in light of his concern on the sustainability of a total of five players in the market (if all three new applications were approved); and (b) as such, to rank the applicants.  Subject to the question (which I have concluded above) of this approach amounting to a departure from the Policy, the CEIC was fully entitled to come to these views in disagreement with the Authority’s recommendations.

85. HKTVN’s above contentions under this ground, if correct, would amount to requiring the CEIC to seek the Authority’s further opinion or recommendations every time he disagrees with the Authority’s already submitted recommendations.  This cannot be right in the context of the CEIC’s unquestionable discretion to do so.

86. The CEIC is of course also entitled to seek further views from the Authority when he thinks necessary to do so on questions that he believes he requires the relevant assistance from the Authority.  Other than questions where the statute has specified requiring the views from the Authority, what amount to relevant factors that would require the Authority’s assistance is also within the CEIC’s discretion to decide subject to the test of Wednesbury unreasonableness.  See: R v Somerset County Council ex p Fewings [1995] 3 All ER 20 at 32; Re Findlay [1985] AC 318 at 333‑334, per Lord Scarman.

87. In the present case, given the Authority’s views in the Authority’s recommendation mentioned at paragraph 84 above, which the CEIC disagreed, I agree with Mr Yu’s submissions that it would not serve any useful purpose for the CEIC to ask the Authority to express a view again on the gradual and orderly approach and its impact on the application.  At the least, it cannot be said to be Wednesbury unreasonable for the CEIC to regard as irrelevant and thus not necessary to seek the Authority’s views again on these questions.

88. I would therefore reject this ground as a basis to support this judicial review.

C3.2  HKTVN precluded from amending its application

89. By a letter dated 14 May 2013, the CEDB informed all the three applicants (including HKTVN) that the CEIC was considering introducing the gradual and orderly approach, and indicated that the CEIC might not necessarily approve all three applications, while not precluding the possibility of allowing more FTV operators as when appropriate.  It then invited each of the applicants to make written representations by 4 June 2013 as to why its application should be allowed in the event that the CEIC was not to allow all the applications.  For that purpose, the CEDB disclosed to the applicants copies of all the Consultant’s reports.  In this letter, the CEDB however stated that the applicants were not allowed to amend, revise or modify their existing applications as submitted. If the written representations amounted to such amendments, revisions or modifications, the CEIC would regard them as fresh applications, and would be disregarded for the purpose of considering the existing submitted applications.

90. HKTVN then submitted a 49‑page written response as invited by the CEDB under this letter.  In any view, the written response is a substantial document in support of HKTVN’s application in light of the suggested gradual and orderly approach and the scenario that less than three applications might be approved.  It dealt comprehensively with matters relating each of the four areas assessed in the Consultant’s reports.  It had also made submissions as to why a licence should be granted to HKTVN instead of the other two applicants.

91. In this ground, HKTVN now complains that, since the Government had in substance moved its goalpost by assessing the relative merits of the applicants under the gradual and orderly approach, it is procedurally unfair for the CEIC not to have allowed HKTVN to amend its submitted application in response to this change.

92. As mentioned, HKTVN was provided with an opportunity to respond to the changed approach by way of written response.  Thus, in substance, HKTVN’s complaint is that it had not been provided with an adequate or proper opportunity to respond to the change of approach by way of amending its application.

93. The question is dependent on whether it can be shown that HKTVN was prevented from making a proper and full response to the changed approach only by way of a written response but not by amending or revising its application.  This in turns in my view depends on whether it can be shown that HKTVN would have been able to put in matters of substance and significance that could only be made by way of amending or revising the application but not the written response.

94. However, HKTVN’s own evidence does not show that it would make any difference in substance in terms of what it would have been able to put in by amending its application than what it was already able to submit by way of the written responses.  This is underlined by what is said by Mr Wong Wai Key at paragraph 10 of his 2^nd affirmation as follows:

“10. Additionally, I repeat paragraphs 156‑158 of the Form 86. More particularly:

(a) In terms of financial capability, the Applicant would have in its original FTV licence application dated 31 December 2009 demonstrated even higher levels of financial soundness and capability, and proposed even more substantial investment plans and commitments, akin to those set out in paragraphs 4.8 ‑ 4.18 and 6.1 ‑ 6.11 (Parts D and F on pages 20 ‑ 23 and 27 ‑ 31) of the Applicant’s Responses to the Consultant’s Reports Annexed to the CEDB’s Letter dated 14 May 2013 (the “Applicant’s Responses”) enclosed with the letter from the Applicant’s solicitors to the CEDB dated 4 June 2013. A copy of the Applicant’s Responses is now produced and shown to me marked “WWK‑2”. In this respect, I wish to point out that:

(i) The Applicant would have been able to demonstrate the aforementioned even higher levels of financial soundness and capability, and to propose the aforesaid even more substantial investment plans and commitments, in its original FTV licence application, prior to its disposition of all of its telecommunications‑related businesses in May 2012.

(ii) The financial capability‑related information in the Applicant’s original FTV licence application merely represented the Applicant’s then minimum financial commitments to its proposed FTV businesses, and was not a complete picture of the Applicant’s actual full financial capability. Had the Applicant known that it would effectively be competing for 2 FTV licences along with 2 other applicants, it would have made significantly more financial commitments, which it was and is able to make in view of its actual financial capability.

(iii) As a matter of fact, the Applicant has submitted a fresh FTV licence application to the [Authority] on 11 April 2014 (the “Fresh Application”), under which the Applicant’s proposed investment plan for the first 6 years of operations is estimated to be around HK$3.4 billion, including HK$2.4 billion on programme cost, HK$600 million on operating expenditure and HK$400 million on capital expenditure, as recorded in page 2 of the Applicant’s announcement entitled “Update on Mobile Television Services” made on 1 April 2014, a copy of which is now produced and shown to me marked “WWK‑3”.

(b) As far as management and technical expertise is concerned, the Applicant in its original FTV licence application would have invited more senior and experienced figures in the media (particularly television) profession to join and serve on its Board of Directors / senior management.

(c) Turning to transmission infrastructure, the Applicant would have in its original FTV licence application made even stronger proposals similar to Part E (on pages 23 – 27) of the Applicant’s Responses. In particular, the Applicant would have proposed that all of its FTV services be transmitted in high‑definition television (HDTV) standard.

(d) In regards to commitment to provide quality television programme services, the Applicant would have put forward in its original FTV licence application proposals along the lines of paragraphs 3.1 – 3.28 (Part C on pages 10 – 18) of the Applicant’s Responses. Again, as a matter of fact, in the Fresh Application the Applicant has proposed to provide 3 channels, including a Cantonese integrated channel, and English channel and a 24‑hour news channel, as noted in page 3 of the Applicant’s press release entitled “HKTV’s Latest Updates on Mobile TV & Multimedia Business” dated 11 April 2014, a copy of which is now produced and shown to me marked “WWK‑4”.

For the avoidance of doubt, the foregoing is not an acceptance that the Applicant’s original FTV licence application was deficient in any way. On the contrary, and as a matter of fact, the [Authority] (and the BA, its predecessor) has recommended that the Applicant’s original FTV licence application, as submitted, be approved.” (emphasis added)

95. It is thus Mr Wong’s own evidence that what he would have wanted to put additionally and differently in the original application had he known about the gradual and orderly approach, he had effectively managed to do so in substance by stating them in the written response, other than what he has set out at paragraph 10(b) of the affirmation.  That is about the possibility of inviting more senior and experienced management and expert personnel to join its management team. However, this element is irrelevant for the purpose of determining if there is any procedural unfairness leading to the Decision, as the Decision was not based on any purported relative weakness in HKTVN’s management team.

96. In the premises, I am not satisfied that there is any procedural unfairness in not allowing HKTVN to amend its application.[25]

C3.3  Failure to give reasons

97. I can deal with this ground shortly.

98. Under this ground, HKTVN complains that the CEIC has failed to give adequate reasons for the Decision.

99. Although accepting that the CEIC is generally not required to give reasons for his decision, HKTVN submits that common law principles on fairness in the present circumstances require that reasons be given for the Decision.[26]

100. HKTVN says the following circumstances of the present case require the CEIC as a matter of fairness to give reasons for the Decision:

(1) The fundamental and important matters at stake to be determined by the Decision which involves not only the private commercial right of a company to obtain a FTV licence, but also an incursion into its freedom of expression, and the entitlement of the Hong Kong public as a whole to enjoy FTV programming from an additional FTV operator.

(2) The fact that the CEIC decided to depart from the recommendation made by the Authority under section 9(2) of the BO which contains a clear, detailed and well‑articulated justification as to why all three FTV licences should be granted; and the fact that the former CE has expressly stated that it would only be in special cases where the CEIC would so depart.  However, this is not a special case where it could be said the CEIC adopted the Authority’s recommendation or implicitly endorsed the reasoning of the Authority (in which case, the reasons would be implicit).

(3) HKTVN’s licence application has been rejected apparently because it has been categorized as the weakest of the applicants, when this was not the finding of the Authority, and when the policy against which the application was made rendered any such point (even if correct) irrelevant.

(4) This is a case which involves a substantive legitimate expectation enjoyed by HKTVN, and since this was not given effect to, fairness requires an explanation as to why this was not done.

(5) The CEIC knew that HKTVN had invested heavily for the purposes of obtaining the FTV licence and that its decision to reject the application would have not only a highly damaging financial impact on HKTVN, but also on its staff who were made redundant.

(6) The inordinate delay which had taken place in the decision‑making process and, in particular, the lack of any explanation as to why the so‑called “gradual and orderly approach” was formulated so late in the application process, and this “eleventh hour” approach cries out for an explanation.

(7) The repeated insistence by the Government that it had not changed its own policy when, in fact, it acted contrary to it.

101. There is some force in HKTVN’s above submissions. However, the CEIC has by now filed evidence by way of affidavit and the relevant ExCo minutes (see above) to explain how he had come to make the Decision.  The ExCo minutes are contemporaneous records of the reasons underlying the Decision.  There is no reason not to accept them.[27]  Mr Coleman also has not (rightly so I think) asked this court to treat these reasons as post justification.

102. In the circumstances, given that the evidence now filed in this judicial review enables HKTVN to lead a fully informed inquiry into the Decision, even if (without deciding that) the CEIC did have a duty to give reasons in the circumstances of the present case, this court will not in the exercise of discretion quash the Decision on the ground of inadequacy of reasons.[28] I will therefore also refuse this ground as a basis for judicial review.

C3.4. Flawed reliance on the Consultant’s reports

103. HKTVN submits that the CEIC’s reliance on the Consultant’s reports is flawed because:

(1) The last of those reports was prepared in April 2011, which was before the very substantial disposal (“VSD”) of CTI (HKTVN’s predecessor)’s communications business which was effected on 31 March 2012. This would have further strengthened HKTVN’s financial capability and position, of which the Consultant could not have taken into account in its reports in assessing and evaluating HKTVN’s sustainability and relative competitiveness. However, the CEIC failed to take reasonable steps to equip himself with the necessary independent and expert information from the Consultant to enable him to properly assess the favourable impact of the VSD on HKTVN’s application.

(2) HKTVN as part of its written response to the CEDB on 4 June and 18 June 2013 referred to the independent analysis by PricewaterhouseCoppers (“PwC”) to suggest that the overall advertising market of the FTV market had been grossly underestimated by the Consultant in the reports.  There is nothing to suggest that the CEIC took into account PwC’s independent analysis or anything showing that the CEIC even appreciated the difference in figures and their significance for HKTVN’s application.

(3) The Consultant has confirmed in evidence that the reports were prepared under its understanding of the Policy of no pre‑set limit, and it would have prepared the reports differently had it been informed that the relevant inquiry to be answered was which of the three applications were to be granted a FTV licence or the gradual and orderly approach.

104. HKTVN further says, if the CEIC could properly rely on the reports, then the Decision was inconsistent and illogical with the CEIC’s apparent main concern on sustainability, since HKTVN was ranked second in the reports in terms of overall competitiveness.  It is contended that the CEIC’s treating of “programming strategy and capability” with the most important weight among the four criteria could not have rendered the Decision one consistent with the main concern on “sustainability” given this overall competitiveness ranking.

105. I am unable to accept these contentions for the following reasons.

106. First, I accept Mr Yu’s submissions that although the reports could not take into account the VSD:

(1) Both HKTVN and the Authority were invited to and did provide their comments on the VSD to the CEIC and such comments were available to the CEIC.

(2) The VSD would not have affected the Consultant’s assessment on the overall sustainability of the market.

(3) As for the HKTVN’s relative competitiveness, the CEIC did not rely on the Consultant’s overall ranking made in the report, but made his own assessment on the basis and for the reasons as I have summarised above.

107. Second, HKTVN’s submissions on the growth of advertising revenues for the FTV market had been summarised and placed before the CEIC when he made the Decision.  He was thus equipped with the relevant information, including contrasting information, in this respect in making the Decision.  As rightly submitted by Mr Yu, the estimate on the overall advertising growth is not a matter of incontrovertible fact but a matter of prediction, and so even if the CEIC had preferred the Consultant’s view instead of HKTVN’s, that would still be within the range of reasonable choices open to the CEIC.

108. Finally, insofar as the complaint that the CEIC could not properly rely on the reports because (a) the Consultant would have prepared the reports differently if it had been informed of the departure from the Policy; and (b) there is an inconsistency between the claimed concern on sustainability and the overall ranking of HKTVN’s competiveness in the reports, I do not think it is now necessary or appropriate for me to decide on these grounds.  This is so as I have concluded that the Decision was made in departure from the Policy and thus should be quashed and remitted back to the CEIC for reconsideration in light of the Policy.  In the premises, the Consultant’s said observation becomes irrelevant, and the CEIC would in any event have to look at the matters again in the exercise of his discretion in the reconsideration.

109. I would also dismiss this ground for judicial review.

C4. Constitutional challenge ground

110. Article 27 of the Basic Law guarantees that Hong Kong residents shall have, among others, freedom of speech, of the press, and of publication.

111. Article 39 of the Basic Law also provides that:

“The provisions of the [International Covenant on Civil and Political Rights (‘the ICCPR’)]… as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region.

The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law. Such restrictions shall not contravene the provisions of the preceding paragraph of this Article.”

112. Article 16 of the Bill of Rights (“BOR”), in incorporating Article 19 of the ICCPR, provides relevantly that:

“… (2) Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice.

(3) The exercise of the rights provided for in paragraph (2) of this article carries with it special duties and responsibilities. It may therefore be subject to certain restrictions, but these shall only be such as are provided by law and are necessary —

(a) for respect of the rights or reputations of others; or

(b) for the protection of national security or of public order (ordre public), or of public health or morals.”

113. Thus, under these provisions of the Basic Law and BOR, freedom of expression can only be restricted “as prescribed by law” or “as provided by law” and for the purposes set out at Article 19(3) of the ICCPR.

114. The authorities show that the expressions “prescribed by law” used in Article 39(2) of the Basic Law and “provided by law” used in the BOR mandate the principle of legal certainty.[29]  Moreover, for that purpose and in relation to restrictions on fundamental rights, it has been said that a law which confers discretionary power on public officials must give an adequate indication of the scope of that discretion,[30] and the law should be accessible to the persons concerned and formulated with sufficient precision to enable them to foresee to a degree that is reasonable in the circumstances the consequences which a given action may entail.[31]

115. HKTVN contends that the Decision is unconstitutional because:

(1) The restriction imposed through the CEIC’s exercise of discretion under the statutory licensing system lacks the requisite legal certainty and thus is not one “as prescribed by law” or “provided by law”.

(2) Further, the CEIC has failed to establish that the restriction on HKTVN’s freedom of expression falls within the scope of specific purposes permitted under Article 16(3) of the BOR.

(3) The restriction is in any event invalid as it did not satisfy the proportionality test for the lack of a legitimate purpose or it is disproportionate as the restriction went further than necessary to achieve the alleged objective of the sustainability of the FTV market.

116. I will look at these issues respectively.

C4.1 Is the restriction prescribed by law

117. The CEIC (through Mr Yu) fairly accepts that the right to freedom of expression is engaged in this case as the publication through the means of airwave through FTV broadcasting is restricted by the need to apply for licence under the BO.  Further, under the licensing system, whether a FTV licence would be granted or not is subject to the discretion conferred by the BO on the CEIC.

118. It is HKTVN’s contentions that there is no or insufficient publicly accessible guidance on the scope of the discretion that the CEIC can exercise under section 10 of the BO to determine whether to grant or refuse a FTV licence.  In other words, there is no way for the public or an applicant, such as HKTVN, to properly foresee what criteria and consideration the CEIC would or may have in considering exercising that discretion.  This is so as:

(1) The statutory provisions give the CEIC an absolute and wide discretion but do not set out, other than the Authority’s recommendation made pursuant to section 9(2), the criteria, factors or considerations which the CEIC is required or entitled to take into account in the exercise of that discretion.

(2) Although the Guidance Note provides at paragraph 5.1 for the criteria for assessing a FTV licence application, it is also expressly stated that the CEIC is not bound to accept the Authority’s recommendations (made based on the evaluation of an application by, among others, reference to those criteria).  Moreover, it also does not require the CEIC to take into account these factors in the exercise of his own discretion nor does it preclude the CEIC from taking into account other considerations not set out in the Guidance Note.  It also does not set out the circumstances in which the CEIC may depart from the Authority’s recommendation.

(3) There are also no policy guidelines or other documents setting out the criteria, factors or considerations to be taken into account when the CEIC exercises his discretion under sections 8(1) and 10(1).

(4) In the premises, there is no way for persons concerned, including HKTVN, to reasonably foresee the manner in which the CEIC’s discretion could be exercised in a particular case.  The exercise of that discretion is thus left unfettered and arbitrary.

119. Mr Coleman further submits that the CEIC’s position that he does not have to give reasons for the relevant decision (which is also emphasised in the Guidance Note) highlights the said arbitrariness of the exercise of discretion under section 10.  In support, counsel essentially relies on the authorities of Meltex, supra, and Glas Nadezhda EOOD, supra.

120. With respect to Mr Coleman, I do not agree.

121. In considering whether a subject restriction is “prescribed by law”, the following principles as submitted by Mr Yu are also relevant:

(1) The law must be adequately accessible, ie, the citizen must be able to have an indication that is adequate in the circumstances of the legal rules applicable to a given case.

(2) The “law” includes statute law and unwritten law (including common law),[32] and the court can look at relevant non‑statutory documents, directives and guidelines that are accessible to the parties or public in assessing whether the criterion of foreseeability is satisfied.[33]

(3) It must be formulated with sufficient precision to enable the citizen to regulate his conduct — he must be able, if need be with appropriate advice, to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail.[34]

(4) However, sufficient precision is not to be equated with absolute certainty.  It is recognized that given the need of the law to keep pace with changing circumstances, laws are inevitably couched in terms which, to a greater or lesser extent, are vague, and whose interpretation and application are questions of practice and require clarification by the courts: see Sunday Times at paragraph 49; Mo Yuk Ping at paragraphs 61‑62.  The fact that doctrine issues may remain and require to be resolved by the court in an appropriate case merely provides an illustration of the common law at work.  The mere existence of debatable issues does not make the law uncertain: see Winnie Lo v HKSAR at paragraph 84.  A law that confers a discretion is not necessarily in itself inconsistent with the requirement: see Goodwin v United Kingdom (1996) 22 EHRR 123, paragraph 31.

(5) Further, where the issue is the exercise of a discretionary power conferred by statute, the degree of precision required of the law will also be adjusted, depending on the particular subject matter of the discretion (Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229at paragraph 29, p 251I), the content of the instrument in question, the field it is designed to cover, and the number and status of those to whom it is addressed.  The law needs only to be formulated with such sufficient precision to enable the individual, with appropriate advice when necessary, to regulate his conduct (Hasan v Bulgaria (2002) 34 EHHR 55 at paragraph 84).

(6) Ultimately, the question is answered by whether the law is able to enunciate some boundaries which create an area of risk. There will be conduct that fall along the boundaries of the area of risk for which no definite prediction or answer can be given in advance; but the identification of the area of risk will provide guidance to citizens and that suffices for the purpose of certainty: see Sunday Times at paragraph 52; R v Nova Scotia Pharmaceutical Society [1992] 2 SCR 606, paragraph 62.

122. Moreover, in determining whether the said foreseeability of boundaries of risk can be achieved in the context of broadcasting, the court should also take into account the following considerations:

(1) The fact that broadcasting is a highly technical and complex area, and the applicants are expected to have the necessary degree of expertise, sophistication and ability to understand and seek to inform themselves fully of the requirements, if necessary with the help of advisers: see Groppera Radio AG v Switzerland (1990) 12 EHRR 321, paragraph 68;

(2) As a result, even if the licensing criteria contain requirements which are not very clear and are subject to a subjective assessment (for example, such as “societal function”), that could still be regarded as sufficiently precise when viewed under that context: Glas Nadezhda EOOD, supra, at paragraphs 48‑49; and

(3) Given the pervasiveness and importance of television broadcast, public or societal interest is necessarily engaged and relevant, and such interest is by nature incapable of precise definition.

123. Bearing these principles in mind, I accept Mr Yu’s submissions that, in the present case, the “prescribed by law” requirement is satisfied by considering the provisions in the BO together with the Guidance Note.  This is so as the scope of statutory discretion can reasonably be worked out with sufficient precision by reference to the following (which are all accessible to the relevant parties):

(1) The objectives of the BO,[35] which are: (a) wider programming choice to cater for diversified tastes and interest in the community; (b) encouraging investment, innovation and technology transfer in the broadcasting industry; (c) ensuring fair and effective competition in the provision of services; (d) ensuring that broadcasting services provided are up to the expectations and do not offend the tastes and decency of the community; and (e) promoting the development of Hong Kong as a regional broadcasting and communications hub.  They provide the boundaries to and limit the exercise of power under sections 8(1) and 10(1).

(2) The underlying context of the BO which is public interest.  This is so as (a) the subject matter of FTV broadcast affects almost everyone in Hong Kong; (b) the CEIC (being the highest executive authority in Hong Kong) is positioned as the licensing authority; and (c) section 10(4) of the BO refers to public interest.  Read in this context, public interest therefore provides further indicia and delimitation as to how the discretion is to be exercised, and is the governing consideration in the exercise.

(3) The various requirements set out under other statutory provisions in the BO (such as residence of company applicant and its directors, the requirement of “fit and proper person”) which would also provide guidance on the scope of the discretion.

(4) The assessment criteria set out in the Guidance Note, which the CEIC should take into account as relevant considerations.  In this regard:

(a) Although the Guidance Note does not bind the CEIC, the criteria set out therein are still relevant to the exercise of power, since those criteria are formulated by the Authority for the purpose of preparing its recommendation which the Authority is required to place before the CEIC and the CEIC is required to consider them.[36]

(b) That the Guidance Note is not statutory does not affect its ability to be counted towards the foreseeability requirement.

(c) Similarly, the fact that the Guidance Note is non‑binding also does not undermine the relevance and role it plays towards setting the framework, with which a zone of risk can be identified.  Although it is not binding, the Guidance Note criteria are still relevant considerations that the CEIC would have to take into account in making a decision under sections 8(1) and 10(1) in the absence of cogent reasons not to: cf R (Munjaz) v Mersey Care NHS Trust [2006] 2 AC 148, paragraph 21.

124. The above materials therefore provide the basis upon which the court can interpret sections 8(1) and 10(1) and determine whether the exercise of power is within or outwith the scope conferred by the statute.  By the same token, a lawyer conversant in the principles of statutory interpretation would also be able to so advise his clients.

125. Thus, on the basis of the above materials, a reasonably competent lawyer would have advised HKTVN that its FTV licence application must address all the requirements set out in the BO and the Guidance Note to meet the minimum requirements.  Further, such lawyer would also have been able to advise HKTVN that even if HKTVN had satisfied all the statutory and Guidance Note requirements, the CEIC still has a discretion to decide whether to grant it the licence, but that discretion has to be exercised in accordance with the purposes of the BO and public interest.  Of course, the lawyer will not be able to advise HKTVN that it is bound to succeed or fail in its application, but that is (as stated above) not the test for precision.  All that is required is the ability to identify some area of risk, so that the applicant will be able to plan and adjust its conduct accordingly.

126. Mr Coleman refers this court to Leung Kwok Hung, supra, at paragraphs 75‑78 to say that “public interest” is too vague as a concept to sufficiently guide the scope of a statutory discretion to make a relevant restriction achieving the necessary legal certainty.  If Mr Coleman is saying that Leung Kwok Hung is authority to say as a matter of principle, “public interest” can never be a sufficient element as guidance to the exercise of discretion, I am unable to accept that.  Whether sufficient legal certainty is achieved in relation to a subject statutory discretion must be determined in the context of the matter.  In Leung Kwok Hung, the CFA was saying that the reliance on “public order” (order public) (which is in any event not the same in meaning as public interest) as a purpose by the Commissioner of Police to guide the exercise the relevant statutory discretion to restrict the right of peaceful assembly does not satisfy the constitutional requirement of “prescribed by law”.  This is so as it (order public) being an abstract concept used at the constitutional level (taken from the ICCPR) is by itself alone inappropriate as a basis to gauge the actual exercise of discretion at the statutory level in the circumstances and context of that case.

127. This is very different from what we are looking at above and in the present case.  The element of “public interest” in the present context is to be looked at in the area of FTV market and prescribed by the related statutory objectives.  Moreover, the exercise of the CEIC’s discretion is further defined by the other indicia and elements outlined in the Guidance Note and provided in the BO, and not just “public interest”.  These taken together provide adequate indication as to the area of risks.

128. As said above, the test of precision does not require absolute certainty.  All that is required is that the advice be able to identify potential risks, so as provide a basis to guide the behaviour of the applicant.  As observed by the court (in applying Sunday Times, supra) in Silver v United Kingdom, supra, at paragraph 88:

“88. A third principle is that ‘a norm cannot be regarded as a ‘law’ unless it is formulated with sufficient precision to enable the citizen to regulate his conduct: he must be able—if need be with appropriate advice—to foresee, to a degree that is reasonable in the circumstances, the consequences which a given action may entail’ (ibid. [ie, Sunday Times]).

A law which confers a discretion must indicate the scope of that discretion. However, the Court has already recognized the impossibility of attaining absolute certainty in the framing of laws and the risk that the search for certainty may entail excessive rigidity (ibid.). These observations are of particular weight in the ‘circumstances’ of the present case, involving as it does, in the special context of imprisonment, the screening of approximately 10 million items of correspondence in a year (see paragraph 57 above). It would scarcely be possible to formulate a law to cover every eventuality. Indeed, the applicants themselves did not deny that some discretion should be left to the authorities.

  In view of these considerations, the Court points out once more that ‘many laws are inevitably couched in terms which, to a greater or lesser extent, are vague and whose interpretation and application are questions of practice’ (ibid.).”

   See also: Mo Yuk Ping, supra, at paragraph 68.

129. In this respect, it is pertinent to note that, as a matter of fact, HKTVN’s own lawyers similarly invoked the concept of “public interest” in their submissions and correspondence with the Government in support of HKTVN’s application.[37]  It shows that HKTVN’s lawyers had no difficulty in understanding that public interest is the guiding factor in the CEIC’s exercise of discretion in this context and thus must be in a position to similarly advise HKTVN.

130. Moreover, the fact that there are no precedents in the present case does not undermine the above conclusion.  The existence of case law would have provided an additional factor in favour of precision, but its absence does not mean that the boundaries of the area of risk cannot be identified by reference to first principles and the above materials.

131. Finally, HKTVN’s further reliance on Glas Nadezhda EOOD and Meltex to support its complaints that the restriction under the licensing system results in arbitrary interference of freedom of expression is also in my view not warranted.

132. This is so as these two cases are clearly distinguishable from the present case.

133. In Glas Nadezhda EOOD, the applicants applied for a broadcasting licence for a radio station with Christian religious programming for the subject region in Bulgaria.  The applicants’ application was refused by the relevant authority, relying on the decision of the National Radio and Television Committed (“the NRTC”) that the proposed programming of the applicants did not satisfy NTRC’s published prescribed criteria.  The subsequent judicial reviews brought by the applicants against the refusal in the domestic courts were also unsuccessful.  The applicants then challenged the decision in the European Court of Human Rights (“the ECHR”) and claimed for damages, claiming that the refusal interfered unlawfully their freedom of expression as protected by the relevant Convention.

134. The ECHR allowed the application.  In doing so, the ECHR held,[38] among others, that (a) the refusal to grant the licence was an interference with the applicants’ freedom to impart information as protected under Article 10 of the Convention; (b) the relevant licensing system organising broadcasting in the subject territories was permissible subject to meeting the requirement of “prescribed by law” provided under Article 10(2) of the Convention; (c) under the system, the grant or refusal of a broadcasting licence was premised on the applicants’ compliance with a number of criteria published by the NRTC, and these criteria were sufficiently accessible and precise to comply with the requirement of “prescribed by law”; (d) however, the ECHR should also examine whether the manner in which the NRTC applied them in the licensing process provided sufficient guarantees against arbitrariness; (e) in this respect, given that (i) the guidelines on broadcasting regulation produced by the Committee of Ministers of the Council of Europe clearly advised that all decisions must be duly reasoned and (ii) the applicants were never made aware of the full reasons for the refusal of their application, had not been given any minutes of the meeting where their application was considered, and the subject judicial review did not remedy the matter, this amounted to unlawful arbitrary interference with the applicants’ freedom of expression.

135. The gist of the ECHR’s ruling in that case is thus based on the failure to provide reasons to the applicants (given the guidelines on broadcasting regulation produced by the Committee of Ministers of the Council of Europe) but not on the fact that the relevant licensing scheme by itself lacked necessary clarity and accessibility.  In particular, in Glas Nadezhda EOOD, there was no public hearing and no public consultation of any sort, and the public authority not only declined to provide any reasons for its decision but also chose not to comply with a court order requiring disclosure of the relevant minutes.[39]

136. In Meltex, the 2^nd applicant (which established the 1^st applicant company) ran another television company which broadcast news and current affairs programmes which were critical of the Government. That company was frequently harassed by government agents as well.  A total of 11 licences were put up to tender, but the applicants’ tenders were unsuccessful.  The applicants complained about a lack of reasons for rejecting their tenders.  Proceedings for disclosure of the tender documents from the successful companies were dismissed.  The applicants challenged the refusal to the ECHR for unlawful interference of their freedom of expression under the Convention and claimed for damages.

137. The ECHR allowed the application and held, among others, that there was a violation of the right protected under Article 10 of the Convention for lack of reasons for the refusal.  This is so as (a) although the decisions of the licensing authority were based on the domestic Broadcasting Act, which defined the criteria on which the authority should exercise its power, the Act did not require the authority to give reasons for its decisions; (b) no such reasons were given by the authority in the refusal and the applicants and the public had no way of knowing the basis upon which the decisions to award licence were actually taken; (c) however, the guidelines on broadcasting regulation produced by the Committee of Ministers of the Council of Europe clearly advised that all decisions must be duly reasoned; and (d) viewed against these guidelines, without such reasons, there was a possibility that the decision would be arbitrary and it could not be said the interference was lawful.[40]

138. It thus immediately can be seen that the facts and challenges of these two cases are very different from the present case:

(1) In the present case, as submitted by Mr Yu, no reliance has been or can be placed on the guidelines adopted by the Committee of Ministers of the Council of Europe (which formed one of the central analyses in support of the judgments in those two cases).  There is also no general duty at law to give reasons; and it is trite that whether reasons are required in any given case depends on considerations of fairness, for which the court is the final arbiter.  Under our jurisdiction, the CEIC’s decision is amenable to judicial review.  If the court finds that fairness requires the CEIC to give reasons in any given case, the court has the power to remit the matter to the CEIC for reasons to be given.  In any event, the CEIC has now disclosed the ExCo minutes and provided full reasons for the Decision.

(2) Moreover, these two cases do not establish that a public hearing is necessary in such a context — there were such hearings in Meltex.  HKTVN’s contentions seem to be that there was no occasion for it to make oral representations to the CEIC.  However, it is possible, and HKTVN has repeatedly made use of that, to make detailed written submissions to the CEIC, which can be regarded as sufficient as a matter of fairness to safeguard against arbitrariness given the technical and specialist nature of the FTV licence.

139. I therefore also reject HKTVN’s submissions that licensing system under the BO by itself results in arbitrary interference of freedom of expression.

140. For all the above reasons, I accept that the restriction imposed through the licensing regime rested with the CEIC’s discretion under the BO is one which is “prescribed by law” or “provided by law”.

C4.2  Legitimate aim

141. The CEIC submits that the aim for the restriction relevant in the present case is that of public order (order pubic).

142. It is well established that the meaning of order public is wider than public order in terms of law and order.  It is to be understood as a basis of restricting some specific rights and freedoms in the interest of the adequate functioning of the public institution necessary to the collectivity when other conditions are met.  These include prescription for peace and good order; public health; esthetic and moral considerations, and economic order (such as consumer protection etc): Leung Kwok Hung, supra, at paragraphs 69‑71; HKSAR v Ng Kung Siu (1999) 2 HKCFAR 442, at paragraphs 457I‑460A.

143. It has been held that, in the context of broadcasting, prevention of disorder in telecommunications, protection of rights of others and control of the quality and balance of programmes are legitimate aims.  See: Groppera Radio, supra, paragraph 69; Demuth v Switzerland (2004) 38 EHRR 20 at paragraph 37. Further, the Court of Appeal in Hong Kong has also accepted societal justification for a licensing system: Secretary for Justice v Ocean Technology Ltd [2009] 1 HKC 271 at paragraph 67.  I accept that these considerations are directed at the collective interest of the community and thus fall within the scope of order public.

144. Given the undisputed wide pervasiveness and thus the widespread effect of FTV broadcasting on the public, the BO’s legislative purposes and objectives as mentioned above, the various criteria set out in the Guidance Note for assessing an application for FTV licence under the BO (including programme quality and balance), I also accept that the licensing system is, as submitted by Mr Yu, directed at protecting the interest of the community at large.  For example, this can be illustrated by what Mr Edward To has said at paragraphs 22‑42 of his affirmation as follows:

“E2.2 Interest of the public and common welfare

22. By stipulating that the decision whether to grant a domestic free/pay TV licence must be made by the CEIC, the legislature must have contemplated that the CEIC would have regard to the relevant public interest in making its decision. In particular, in the present case, the three applicants for free TV licences were informed of the public interest concerns of the CEIC and were invited to make representations on the same before the CEIC made its decision.

E.2.2.1 Benefit to the TV market

23. As mentioned in Mr. Liu’s Affirmation, the Government’s role is to provide an environment conducive to the flourishing of the communications and information industries and to promote the development of Hong Kong as a regional broadcasting and communications hub. In order to attract potential investors and encourage fair competition, the Government is committed to providing a level‑playing field for all the operators in the industry, and ensuring that the market will not be unfairly dominated by any player which owns various types of media in Hong Kong. A licensing system is crucial to achieving such objective.

24. Allowing the TV market to be guided by only free market force without any regulation is not to the benefit of the society. It can be envisaged that, in the absence of specific requirements and regulations, TV operators may only focus on producing or broadcasting programmes which may yield higher returns or which attract the target audience group of those “big‑spending” advertisers (since licensees are reliant on advertising revenues). Interests of minority groups (including non‑Chinese‑speaking community) or the lower‑income groups may not be properly taken care of.

25. Further, TV operators (especially free TV operators) may not be able to survive as a result of an unfair and unhealthy competition. Although the Government is not concerned with the protection of individual operators, the Government is legitimately concerned with the impact that a failed free TV operator may have on the community as a whole and also on the reputation of Hong Kong as a regional broadcasting hub.

26. The reality of the situation is that there is unlikely to be a significant increase in the total advertising expenditure in Hong Kong within a short period of time (even with introduction of new channels) because (a) the overall amount of TV viewing is not likely to significantly increase, (b) the low latent demand for TV advertising, and (c) the competition from advertising on online platforms (see e.g. sections 4.1 to 4.5 of the Consultant’s Report in April 2010).

27. To minimize conflict of interest, encourage competition in media markets and avoid editorial uniformity, the Government through the licenensing regime imposes restrictions on owners of other media (including sound broadcasting licensees, proprietors of newspaper and advertising agency) to be granted a licence of domestic free/pay TV or otherwise having voting control over a free/pay TV licensee (i.e. cross media ownership restriction). An existing licensee of domestic free/pay TV is prohibited from being granted a licence, or having voting control, of another domestic free/pay TV (i.e. intra‑media ownership restriction) (Schedule 1 to the BO)

28. In addition, a licensee is also prohibited from engaging in any anti‑competitive conduct (section 13 of the BO). A licensee in a dominant position in the market is prohibited from abusing its position (section 14 of the BO). These provide safeguards against anti‑competitive conducts to the detriment of the TV industry.

29. Further, the operation of a domestic free/pay TV requires substantial investment in terms of financial and manpower resources. The amount which an operator will invest in the provision of the service will also have a direct bearing on the quality and quantity of the TV programmes to be broadcast. The licensing system is vital to ensure that the operators have the financial ability to make sufficient capital investment. An applicant is also required to satisfy the [Authority] in relation to its investment plan, and an applicant may be required to provide performance bond (see e.g. paragraphs 3.8, 4.7 and 5.1(a) of the 2012 Guidance Note).

E2.2.2 Programme content and quality

30. One of the objectives of the Government’s TV policy is to ensuring that broadcasting services provided are up to the public expectations and do not offend the tastes and decency of the community. In particular, the free/pay TV has wide‑ranging audience with different background and interests. Among them include the elderly, children, lower income group, and people of different ethnicities. Therefore, the TV programmes, especially free TV programmes, should cater for both the needs and interests of the different groups.

31. Further, given the pervasiveness and influence of TV programmes, it is in the public interest that free TV programmes should not present any inaccurate, biased, immoral or harmful messages or information.

32. To this end, the licensing system prohibits the licensee from broadcasting any programme which is likely to (a) incited hatred against any group of persons, being a group defined by reference to colour, race, sex, religion, nationality or ethnic or national origins; (b) result in a general breakdown in law and order; or (c) gravely damage public health or morals (section 36 of the BO). Any programme which may contain subliminal message is also prohibited (section 23(1) of the BO). The licensee company and the person exercising control over the licensee should be and remain a fit and proper person (section 21 of the BO).

33. A TV programme service licensee (except free TV licensee and a few exceptional cases) is further required to provide a programme locking device for, inter alia, preventing children’s access to those pay TV programmes which are not suitable for children (section 20 of the BO). In the case of free TV, since children can gain access to its broadcast easily, the licensee is required to comply with the family viewing policy whereby nothing which is unsuitable for children should be shown during the period between 4 pm and 8:30 pm on any day (see Chapter 2 of the Generic Codes of Practice on TV Programme Standards exhibited as “TWHE‑2” above) as well as to observe tighter restrictions regarding contents which may cause adverse impact on children (see e.g. Chapter 7 of the Generic Codes of Practice on TV Programme Standards exhibited as “TWHE‑2” above).

34. To ensure that the TV programmes will cater for local interest and taste, there are also statutory requirements that the place of residence of the licensee company and the controlling directors or principal officers should be Hong Kong (section 8 of the BO) (see also paragraphs 11.10 and 11.11 of the Consultation Paper of the 1998 Review of TV Policy). The [Authority] will also invariably consult the public in respect of each new application or each renewal of domestic TV programme licence (sections 9(3) and 11(4) of the BO). In addition, a licensee is required to receive and consider any comment and complaint from the public about the TV programmes service it provides, and shall keep good record of such comments and complaints for the inspection by the [Authority] upon demand (paragraph 3.25 of the 2012 Guidance Note).

35. Moreover, a licensee can be required to produce documentary programmes and current affairs programmes primarily for the Hong Kong market (see e.g. Conditions 5.1 and 6.1 of the First Schedule to ATV’s and TVB’s respective Amended Licenses exhibited as “TWHE‑1” above), and to produce a minimum amount of locally produced programmes.[41] Requiring a minimum amount of locally produced programmes can broaden the viewers’ choice and also create additional employment opportunities in the local media industry. It will also promote Hong Kong as a regional broadcasting hub.

36. On the other hand, to accommodate the needs of the non‑Chinese‑speaking community, a licensee can be required under the licensing condition to broadcast at least one channel in the English language (see e.g. Conditions 2.1 of the First Schedule to ATV’s and TVB’s respective Amended Licenses exhibited as “TWHE‑1” above).

37. To protect the public, news programmes and any factual programmes dealing with matters of public policy or controversial issues of public importance in Hong Kong (except personal view programmes) are required to be accurate, impartial and fair (Chapter 9 of the Generic Codes of Practice on TV Programme Standards exhibited as “TWHE‑2” above). Further, a licensee is required to ensure that no advertisements may contain any descriptions, claims or illustrations which expressly or by implication depart from the truth or mislead about the product or service advertised or about its suitability for the purpose recommended (the Generic Codes of Practice on TV Advertising Standards exhibited as “TWHE‑2” above). There is also statutory safeguard against any interference with a licensee’s programming independence (section 22 of the BO).

38. Further, because of public health concern, there are special guidelines and restrictions in relation to medical preparation and treatment and products or services claiming to have nutrition or dietary effects (paragraphs 7 to 21 of Chapter 6 of the Generic Codes of Practice on TV Advertising Standards exhibited as “TWHE‑2” above).

39. There are also restrictions and guidelines in relation to TV advertisements on financial‑related services and facilities (paragraphs 27 to 35 of Chapter 6 of the Generic Codes of Practice on TV Advertising Standards exhibited as “TWHE‑2” above).

40. Thus, the licensing system is necessary to ensure that the above concerns and the need to protect and balance various interests in different segments of the community can be achieved through the vetting under the licensing system and the appropriate use of licence conditions as imposed by the licensing authority.

E2.2.3 Effective regulation of TV operators

41. Without a licensing system, conducts which are improper or contrary to public decency or morals on the part of a free TV operator may not be effectively and efficiently dealt with to meet and address the public expectations.

42. Under the licensing system, the Government has the power, in an appropriate case, to suspend, revoke or not renew upon expiry a TV operator’s licence if there are repeated and serious breaches of the relevant regulations.  The [Authority] likewise is given statutory power to require a licensee to cease certain conduct, to take prescribed actions, or to make a correction or apology (sections 16, 24 and 30 of the BO).  The [Authority] is also empowered to obtain from a licensee the relevant information for the purpose of investigating any complaint or breach of the relevant regulations (section 25 of the BO).”

145. For these reasons, I accept the CEIC’s submissions that, given the potential widespread effect of FTV broadcasting on the general public, the restriction through the licensing system is implemented to protect and balance the collective interest of the community at large, and thus for the permissible purpose of order public.

C4.3  Proportionality

146. HKTVN’s challenge based on proportionality is targeted at the Decision itself but not the legislation (whether generally or specifically sections 8(1) and 10(1)).  Although it is generally for the respondent to justify proportionality, the lack of even an assertion that the relevant legislative regime lacks proportionality may be taken as HKTVN’s acceptance that the licensing system imposed under the BO meets the proportionality test or that it cannot be so faulted.  In any event, without hearing any further contrary arguments, for the same reasons I have set out in the above sections on the identification of the scope of the CEIC’s discretion and on legitimate aim, and giving due margin of appreciation to the legislature and the Administration in an area where issues concerning the public interest also feature largely, I would accept that the statutory licensing system is a proportionate response to achieve the legitimate aim of order public in the context of FTV broadcasting.

147. If the legislation underlying which the systemic restriction is implemented is not and cannot be faulted on the ground of proportionality, I doubt very much whether every decision then made through the exercise of discretion provided under the said legislation can and should still be subject to an individual challenge on the ground of proportionality, as that would lead to “micro examination of the actual decision made under that law”.  See the observations of Lam VP at paragraph 87 of Hysan v The Town Planning Board (unreported, CACV 232 & 233/2012, 13 November 2014, Lam VP, Chu JA and Au J).  In this respect, it is however important to note that these decisions would of course still be subject to the court’s scrutiny by way of judicial review under the traditional grounds, including Wednesbury unreasonableness.

148. But in any event, if the Decision could still be subject to the challenge of proportionality, I do not think it is appropriate for me to form a view in the present case.  This is so as I have already decided to quash the Decision and remit it back to the CEIC for reconsideration in light of the Policy.  In the circumstances, it is a meaningless and inappropriate exercise for me to consider whether the Decision is a proportionate one in light of the factors and approach that had been taken by the CEIC[42] when he had done so in the context of misconstruing the meaning of the Policy.  In his reconsideration of the Decision, in light of the Policy as now construed by the court, the CEIC may well approach the matter differently and may take into account different considerations.  It is thus an inappropriate and meaningless exercise for me to examine for the present purposes whether the Decision is a proportionate one.

149. I would therefore not consider this question.

150. In the premises, HKTVN has not made out the grounds in support of the constitutional challenge.

C5. The Decision is irrational and contrary to the Policy and legislative aim

151. I can also deal with this ground very briefly.

152. Under this ground, HKTVN challenges the Decision on the basis that, under the Policy and legislative aim of the BO, the Government is to further liberalize the FTV market to fair and open competition, and to increase overall viewer programming choice.  It would thus be contrary to this Policy and legislative aim if the CEIC, in considering whether to grant new licences under the BO, seeks to ensure the continued survival of an existing FTV licensee by concerning himself predominantly with the question of sustainability.

153. Mr Coleman submits that the CEIC did exactly that in arriving at the Decision, as the CEIC took into account the fact that if HKTVN’s application were successful, this would mean that the continued survival of one of the existing players would be called into question.  It is therefore submitted that the CEIC took into account irrelevant consideration (ie, to protect the survival of the incumbent licensees) in making the Decision.  For the same reason (continued Mr Coleman), the Decision is made contrary to the underlying aim of the Policy and the BO. It should therefore be quashed.

154. Reading the bases of the Decision (as evidenced by the relevant ExCo minutes) I have summarised above, I do not think this ground is made out on the facts.  Fairly and objectively read, it cannot be said that one of those underlying reasons for the Decision was to ensure the continued survival of the incumbent licensees.  I therefore also reject this ground.

D. CONCLUSION

155. For all the reasons I have set out above, I would allow the judicial review on the grounds that the Decision is made not in adherence to the Policy and without giving effect to HKTVN’s legitimate expectation.  I would however reject all the other grounds made in support of this judicial review.

156. I therefore would quash the Decision and remit it back to the CEIC for reconsideration.  In doing so, the CEIC should have regard to and take into account the Policy as construed in this judgment and HKTVN’s legitimate expectation.

157. I further make an order nisi that costs of this application be to HKTVN, to be taxed if not agreed, with certificate for two counsel.  This costs order shall become absolute 21 days from today unless any of the parties applies to vary it by summons.

158. I would like to thank counsel for their valuable assistance in this matter.