In re FU NING DISPENSARY

IN THE SUPREME COURT OF HONG KONG

MISCELLANEOUS PROCEEDINGS NO. 864 OF 1995

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(On appeal from the Pharmacy and
Poisons Board of Hong Kong)

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D E C I S I O N

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1. This is an appeal from a decision and direction of the Disciplinary Committee of the Pharmacy and Poisons Board which was formally given by letter dated the 1st March 1995 and followed a hearing on the 24th February this year. At the conclusion of the hearing of the Appeal I said that I would hand down my decision in writing and that I now do.

2. The Disciplinary Committee was appointed by the Board at a meeting on the 16th December 1994. The Committee was required to inquire into the conduct of Fu Ning Dispensary, in accordance with Section 15 of the Pharmacy and Poisons Ordinance. The Disciplinary Committee comprised, as required under the Ordinance, the medical officer appointed and 2 registered pharmacists.

3. The Inquiry arose as the direct result of a conviction of Mr. Luk Ting-fai, Jimmy, who at the relevant time had been an employee of the Dispensary, of selling a Third Schedule poison without the authority of a prescription and selling a Part 1 poison without the supervision of a registered pharmacist.

4. The pharmaceutical in question was called Survector. I was told that it was not a psychotropic drug and was not something that was open to abuse in the way that psychotropic drugs are.

5. At the hearing of the Disciplinary Committee the case as presented by the Legal Officer rested upon the footing that Mr. Foo Chung-ning, who was the proprietor of the Fu Ning Dispensary, ought to be regarded as responsible for the offences committed by his employee because as the authorised seller of poisons he had not used due diligence to enforce the execution of the Ordinance. That is in terms of Section 17(1) and (2)(d) of the Ordinance.

6. Because it will be important I will set out the exact finding of the Committee. It was said :

"The Committee is satisfied that Mr. Luk Ting-fai, Jimmy, was at all material times an employee of the defendant Fu Ning Dispensary. Mr. Luk Ting-fai, Jimmy was convicted of offences as set out in the Notice of the Inquiry. The fact that the defendant the Fu Ning Dispensary, an Authorised Seller of Poisons, had not used due diligence to enforce the execution of the Pharmacy and Poisons Ordinance, Cap. 138, is proved to the satisfaction of the Committee and the Committee is of the opinion that having regard to the facts proved above, the defendant, Fu Ning Dispensary, ought to be regarded as responsible for the employee's offences and that the facts alleged against Fu Ning Dispensary, the defendant in the Notice of Inquiry, have been proved to the satisfaction of the Committee and that the defendant, Fu Ning Dispensary is guilty of the charge."

7. The direction of the Disciplinary Committee was that the Dispensary be removed from the Register of Premises and be disqualified for a period of 6 weeks from being registered therein.

8. I should say at the outset, that there was no "charge" as such in the Notice of Inquiry. What the Disciplinary Committee was required to do was to inquire into the circumstances wherein an employee had been convicted of offences. The fact of conviction and the fact of employment were not matters in issue. What was in issue was first of all whether it had been shown that the authorised seller had not used due diligence. Pausing here, I would mention that because of the wording of the Ordinance it would seem that the onus was on the complainant to show that due diligence had not been used. There was no dispute at the hearing of the Appeal that the onus of proving lack of diligence lay upon the complainant; and it was not a question of the onus being upon defendant to show due diligence. The other matter that was in issue was whether "having regard to the facts proved the authorised seller ought to be regarded as responsible" for the offences.

9. I would emphasize here that the Notice of Inquiry merely commands the Committee to hold an Inquiry. The way the allegations against the Dispensary are put comes from the submissions of the Legal Officer at the hearing. What is more, the facts relied upon are alleged at the hearing other than, as I have already said, the undisputed facts of conviction and employment.

10. There is of course a right of appeal from a direction of the Disciplinary Committee to this Court. The Privy Council in the case Libman v General Medical Council [1972] AC 217 at 221E set out the approach which the Courts make to appeals of this nature. Lord Hailsham first of all set out 4 propositions. I can summarise the first 2 in which he said that although there was an appeal as of right, the actual exercise of the jurisdiction is severely limited and there is a heavy burden upon an appellant who wishes to displace a verdict on the grounds that the evidence alone makes the decision unsatisfactory. The third proposition is important. The material parts are as follows:

"Beyond a bare statement of its findings of fact, the Disciplinary Committee does not in general give reasons for its decision as in the case of a trial in the High Court ... . It follows from this that the only circumstances in which an appellate court can reverse a view of the facts taken by the Disciplinary Committee would be a case where, on examination, it would appear that the committee had misread the evidence to such an extent that they were not entitled to make a finding in the state of the evidence presented before them".

11. The conclusion derived from these propositions was that an appellant could only displace the findings of the committee if they were sufficiently out of tune with the evidence to indicate with reasonable certainty that the evidence had been misread.

12. Turning to this case I regret that the Disciplinary Committee has at best made only bare findings in relation to what lay before them. The only facts said to be found were those as to the convictions and employment which were the starting point of the Inquiry. The statement that the authorised seller had not used due diligence to enforce the execution of the Pharmacy and Poisons Ordinance, Cap. 138, is simply a repetition of the words of the Ordinance. It is true that the opening words of Section 17(2) refer to that as being a fact necessary to be found by the Disciplinary Committee but it is in truth a conclusion based on primary facts, which are not stated, and opinion. The primary facts on which such conclusion could be based have not been stated by the Committee however briefly, or "barely" to use the words of Lord Hailsham. Self evidently when the Committee said "the defendant, Fu Ning Dispensary, ought to be regarded as responsible for the employee's offences", it was stating a matter of opinion.

The need to give reasons

13. Whilst I prefer to look upon the situation as one where the primary facts upon which the conclusion is based have not been stated, another way of looking at the situation is that although the Disciplinary Committee found a fact, it did not give reasons for its decision.

14. In 1992 Barnett J. gave judgment in an appeal against a direction of the Disciplinary Committee of the Pharmacy and Poisons Board in the case of Tin Sing Aberdeen Pharmacy. I set out here what he said because I agree with it.

"It has been said both by the Court of Appeal and by this Court on innumerable occasions that when a tribunal makes a decision which adversely affects another person that person is entitled to know why or how that decision has been reached. In other words, the tribunal should give reasons. Those reasons need not be long or detailed. Some indication of the principal factors affecting the tribunal's thinking is all that is required. In the present case I am sure that, if it had thought so to do, the Committee could have given reasons for its directions in two or three simple sentences. Had it done so its direction would in all probability have been unassailable and these proceedings would have been unnecessary. I earnestly enjoin both this Committee and any other disciplinary tribunal to observe this simple requirement in future. This omission apart, I should, in fairness, say that the conduct of the Committee was otherwise impeccable."

15. More recently the House of Lords has considered the question of reasons in connection with decisions of bodies which come under the category of administrative decisions in Reg. v. Home Secretary, Ex p. Doody [1994] 1 A.C. 531. At page 564 of the report Lord Mustill said that the law did not recognise a general duty to give reasons for decisions but he specifically approved what was said by the Court of Appeal in Reg. v. Civil Service Appeal Board Ex parte Cunningham [1991] 4 All E.R. 310. That case was one of judicial review there McCowan L.J. had this to say at p. 322.

"As I would put it, not only is justice not seen to have been done but there is no way, in the absence of reasons from the board, in which it can be judged whether in fact it has been done. I find that a thoroughly unsatisfactory situation, in which this court should hold, if it can properly do so, that the board ought to give reasons for its recommendation.

In reaching a conclusion as to the propriety of Otton J's order, I am influenced by the following factors.

1. There is no appeal from the board's determination of the amount of compensation.

2. In making that determination the board is carrying out a judicial function.

3. The board is susceptible to judicial review.

4. The procedure provided for by the code, that is to say the provision of a recommendation without reasons, is insufficient to achieve justice.

5. There is no statute which requires the courts to tolerate that unfairness.

6. The giving of short reasons would not frustrate the apparent purpose of the code.

7. It is not a case where the giving of reasons would be harmful to the public interests.

These considerations drive me to the view that this is a case where the board should have given reasons and I would, therefore, dismiss the appeal.

I add only that I see no reason why the board need take more than a few simple sentences to state those reasons, or why the necessity to do this should in any way prejudice the informality of the proceedings or, in Mr. Forman's words, lead to 'bodies of precedent and legalistic concepts'."

16. Those reasons seem to me to apply even more strongly in a case where there is a statutory right of appeal. That is the case here.

17. The importance of reasons is in my view underlined by the fact that they are necessary for the following reasons:-

1. In fairness to the party who is the subject of complaint, he should be told why it is that the matter has been decided against him. In the contrary case, it is important that the public and ultimately the complainant should know why the matter has been decided against the complainant. This is perhaps emphasised by the fact that the penalty of striking the pharmacy from the Register for a period of 6 weeks can work as a considerable financial penalty to the pharmacy. The estimate given was that the loss of business would cause a loss far greater than any fine that was imposed against Mr. Luk who sold the medicine.

2. Without reasons the right of Appeal can be rendered virtually nugatory.

3. The reasons why a decision of a body such as the Disciplinary Committee are important is that it is important that pharmacists should know what is expected of them. By publishing the reasons for their decisions the Committee can build up a body of decisions from which the profession, which it is their task to control, may know what standards they must observe and precautions they must take.

The evidence at the Hearing

18. At the hearing there were only 2 witnesses. Mr. Foo gave evidence that he had given strict instructions to his employees and in particular Mr. Luk that the drugs should be kept in the cabinet in which they would be locked up when the pharmacist was not there and that no such drug should be sold without the authority of a prescription and without the supervision of the registered pharmacist. This instruction was given under the threat of dismissal if it was disobeyed. Although Mr. Luk was not dismissed immediately on the happening of the sale he was dismissed after the conviction in the magistrate's court. On the face of it, it would seem that there was no reason not to believe Foo when he said that he gave strict instructions to employees not to sell without prescription and not to sell without the pharmacist. He was not cross-examined as to that and his evidence in this regard went unchallenged. As Mr. McCoy who appeared for the Appellant pointed out, it would have been fundamentally wrong if his evidence were disregarded and yet he had been given no hint at the hearing that he was not to be believed.

19. True it is that some criticism may be made of the evidence of Mr. Luk, but he was the person who had been convicted of selling the poisons and he may therefore have had, or at least have felt he had, reason to give unsatisfactory evidence.

20. The sale took place at a time when Mr. Foo was temporarily out of the shop. The pharmacist had also left the shop. The evidence was that he had gone to buy a lunch box and had returned to the shop to eat his lunch box very soon after the sale. Contrary to instructions he had left the dispensary cabinets open and unlocked. He resigned as an employee of the pharmacy as a result of the incident.

21. The sale thus apparently took place because of separate breaches by 2 employees of their respective instructions. As a direct consequence of this incident both employees lost their jobs. Mr. Luk came to give evidence at the hearing and made no complaint about his dismissal, the pharmacist's resignation is at the least a tacit admission of his responsibility and breach of his duties. On the face of it, therefore, those breaches were regarded by the employees themselves as serious enough to warrant immediate dismissal.

22. If the Committee had felt that the Appellant in giving instructions and warning to the employees had not taken sufficient steps then it should have said so. Again although some suggestion was made by the Legal Officer at the closing submission that the instructions given to the staff were not sufficient, I have the following comments to make.

23. In the first place the suggestion put forward by the Legal Officer does not commend itself to me. It was that the employee should be given a partial list of prohibited substances. Admittedly the suggestion was that the list should be of the more common substances but by reason of its being not comprehensive it seems to me to raise more dangers than it solves. Since the Committee did not comment on it I have no way of knowing whether they disagree with my views.

24. In the second place because the Committee have not dealt with it I have no way of knowing whether it was something that operated on their mind.

Conclusion

25. I regret that in this case I am driven to the conclusion that this appeal must be allowed. As each of the Judges said in the Court of Appeal in Reg. v. Civil Service Appeal Board Ex parte Cunningham fairness requires that a tribunal such as this gives sufficient reasons for its decision to enable the parties to know the issues to which it addressed its mind and that it acted lawfully. As the Court of Appeal said in that case and as Barnett J. said in the Tin Sing Aberdeen Pharmacy case nothing onerous is required, only a few simple sentences.

26. I regret that in this case this has not happened. The effect on the ultimate decision is that there is a denial of justice.

27. In giving this decision I wish to emphasise that I have been very reluctant to come to the conclusion that I had to allow the appeal because of the special position held by tribunals such as the Disciplinary Committee and the importance to the public of there being proper enforcement of control of drugs. Nevertheless in this case I feel I have no alternative.

28. I therefore make an Order allowing the appeal and reversing the direction of the Disciplinary Committee setting aside the direction for removal and disqualification. I make an Order Nisi that the costs of this Appeal be to the Appellant.