HONG KONG TELECOMMUNICATIONS (HKT) LTD v. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT AND ANOTHER

HCAL 448/2018

[2018] HKCFI 2224

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 448 OF 2018

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DECISION

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INTRODUCTION

1.  By a summons dated 24 April 2018 (“the Summons”), the Applicant applies for (i) interim relief (“the Interim Relief Application”), and (ii) disclosure or production of various documents more particularly described below (“the Disclosure Application”).

2.  I gave my decision on the Interim Relief Application on 24 August 2018 (“the Interim Relief Decision”).  I now give my decision on the Disclosure Application.

BASIC FACTS

3.  A brief outline of the facts of this case was given in the Interim Relief Decision, and the same will not be repeated here. For the purpose of this decision, I shall adopt the expressions and abbreviations as defined in the Interim Relief Decision.

4.  In connection with the consultation process referred to in paragraph 8 of the Interim Relief Decision, the Authority provided to the Applicant a copy of a consultancy brief dated 19 October 2015 (“the Consultancy Brief”) issued to Plum Consulting (“the Consultant”), who was asked to provide consultancy services (“the Consultancy Services”) in relation to the re-assignment of the Spectrum in the 900 MHz and 1,800 MHz bands upon the expiry of the existing assignments, and invited the Applicant and the other three incumbent MNOs to meetings with the Consultant for the purpose of seeking information from them.

5.  It is provided, in Paragraph 3 of the Consultancy Brief, that the objectives of the Consultancy Services are to - (a) provide an independent and objective quantitative assessment of the impacts on service quality arising from the re-assignment of the Spectrum upon expiry of the existing assignments of the Spectrum in 2020/21; and (b) offer assistance and advice to the Authority in the analysis of technical issues as raised in the submissions received in response to the two rounds of public consultation to be launched by the Authority on the re-assignment arrangements of the Spectrum as well as all other submissions received by the Authority in relation to the re-assignment arrangements of the Spectrum during the period prior to the promulgation of the Authority’s final decision.

6.  In Paragraph 4.1 of the Consultancy Brief, it is provided that the Consultant shall conduct independent and objective quantitative analyses and assessment of the impacts on service quality arising from the adoption of each re-assignment option proposed in the first public consultation paper.  For each of the proposed options, the Consultant is required to take into account the various possible re-assignment scenarios, which may range from the status quo for all existing spectrum assignees in one extreme, to all existing assignees not being assigned with any of the Spectrum in another extreme, as well as other possible re-assignment scenarios in between.  The Consultant is also required to postulate, with justifications, the likely re-assignment scenarios under each proposed option.

7.  In relation to the issue of confidentiality, Paragraph 16.1 of the Consultancy Brief provides that:-

“All materials and data furnished by or on behalf of the [Authority] in connection with the Consultancy Agreement, Materials (defined in paragraph 23.10), and the terms and conditions of the Consultancy Agreement shall be treated as confidential information. The Consultant shall not, during the continuance of the Consultancy Agreement or at any time thereafter, disclose to any person … any confidential information, provided that the restrictions on disclosure contained in this paragraph shall not apply –

(d) to the disclosure of any information in circumstances where such disclosure is required pursuant to any law, regulation, rule of any relevant stock exchange, or order of a court or arbitral authority of competent jurisdiction”.

8.  Section 23(1) of the Communications Authority Ordinance, Cap 616, similarly imposes a duty of confidentiality in the following terms:-

“If a person has obtained or received any confidential information by virtue of the person’s position as—

(a) a member of the Authority or a committee appointed by the Authority;

(b) a person authorized by the Authority or a committee appointed by the Authority; or

(c) an employee, agent, service provider, contractor or adviser engaged by OFCA in connection with the performance of any functions of the Authority,

the person must not give or disclose the confidential information to any other person.”

9.  This duty, however, is also qualified by Section 23(2)(e) of the Communications Authority Ordinance, which provides that nothing in subsection (1) applies to –

“the giving or disclosure of information in accordance with an order of a court, or in accordance with a law or a requirement made under a law”.

10.  On 14 February 2017, the Respondents published their Second Consultation Paper: “Arrangements for the Frequency Spectrum in the 900 MHz and 1800 MHz Bands upon Expiry of the Existing Assignments for Public Mobile Telecommunications Services and the Spectrum Utilisation Fee”. Accompanying the Second Consultation Paper was a redacted version of what has been referred to as the “Plum Report” prepared by the Consultant in September 2016, which was also the version given to the Applicant.

11.  The Respondents relied on the findings of the Consultant contained in the Plum Report in relation to the issue of “Customer Service Continuity” upon re-assignment of the Spectrum in their Decision as embodied in the Joint Statement dated 19 December 2017.  Relevantly for the present purpose, the following is stated in the Joint Statement:-

“Ensuring Customer Service Continuity

29. Insofar as customer service continuity is concerned, the Re-assignment of the 900/1800 MHz Spectrum will have an impact on the provision of 2G services in the whole territory. It is not expected to affect the provision of 3G services in general since 3G services are primarily provided by using the spectrum in the 1.9 – 2.2 GHz band. In relation to the provision of 4G services in areas other than the Remaining MTR Stations, given that spectrum in the 1.9 – 2.2 GHz, 2.3 GHz and 2.5/2.6 GHz bands is also used by MNOs for 4G services, it is not expected that the provision of 4G services will be affected by the present spectrum re-assignment exercise. In addition, the findings of the Study reveal no general adverse impact on service quality post spectrum re-assignment, except for the possible marginal service degradation in high traffic areas on the 3G network of an MNO in 2021, and on the 4G networks of this and another MNO in 2023 if some of the 900/1800 MHz Spectrum is acquired by a new entrant. The marginal service degradation could be effectively mitigated by the affected MNOs implementing remedial measures such as migrating more 3G traffic to the 4G network, increasing the number of antenna sectors and offloading more traffic to the Wi-Fi networks.

30. The above analysis demonstrates that if 2 x 10 MHz of spectrum in the 1800 MHz band is to be re-assigned to each of the incumbent spectrum assignees through the offer of a right of first refusal under the revised hybrid approach (ie Option 3 as proposed in the Second Consultation Paper), it can be expected to adequately address the concerns about customer service continuity in relation to the 4G services at the MTR premises, particularly in the Remaining MTR Stations, as well as the continuous provision of 2G services in the territory.”

12.  It is the Applicant’s case that it has been unable to give intelligent consideration to the Plum Report in relation to the issue of customer service continuity, or meaningful response to the Consultant’s conclusions on that issue, in view of the extensive redaction of the report.

13.  The Applicant’s request for the disclosure of an un-redacted version of the Plum Report was rejected by the Authority.  For the present purpose, it is not necessary to set out the course of the correspondence between the parties during the period from February 2017 to May 2017.

14.  The Applicant now applies for disclosure or production of (i) the full unredacted version of the Plum Report, and (ii) all communications to the Consultant comprising the instructions, terms of reference, facts and/or assumptions of facts upon which the Plum Report is based, subject to a “Confidentiality Ring” to be established in the terms of a draft Confidentiality Order annexed to the Summons.  At the hearing on 22 August 2018, Mr Benjamin Yu, SC (on behalf of the Applicant) informed the court that the Applicant would narrow down the Confidentiality Ring by removing all the names under “Internal team” in Part A of the Schedule to the draft Confidentiality Order with the exception of Chris Cheng (Chief Legal Counsel). The remaining members of the Confidentiality Ring on the Applicant’s side consist of “External counsel”, “External solicitors” and “External consultants”.

DISCUSSION

15.  In support of the application, Mr Yu argues that there is and can be no suggestion that the redacted parts of the Plum Report are not relevant or necessary for the reader to understand the report, and relies on two principles which are said to be relevant here:

(1) A party has a basic right to be given sufficient information to enable proper representations before a decision is taken that potentially affects his rights (see Fordham, Judicial Review Handbook, 6^th Ed, at paragraph 60.7).

(2) Once judicial review proceedings have commenced, a defendant public authority comes under a duty of candour and has to make full and fair disclosure of all relevant materials which are relevant or assist the applicant, even on “some as yet unpleaded grounds”.

In support of these propositions, Mr Yu refers the court to Fordham, Judicial Review Handbook, 6^th Ed, at paragraphs 60.7 and 10.4 respectively.

16.  The Disclosure Application is resisted by Mr Abraham Chan, SC on behalf of the Respondents primarily on the ground that the documents sought by the Applicant are irrelevant to the issues in dispute in the present application for judicial review, and are not necessary for the fair and just disposal of the proceedings.  The Respondents also rely on the confidentiality of the information contained in the redacted parts of the Plum Report and the communications to the Consultant referred to in the Summons. That there would be real confidentiality concerns flowing from the disclosure sought by the Applicant cannot, I believe, seriously be disputed, bearing in mind the circumstances in which, and the basis on which, commercially sensitive information was provided by the incumbent MNOs to the Authority/Consultant, and the fact that those MNOs (of which the Applicant is one) are keen competitors of each other in the mobile telecommunications market in Hong Kong. It is common ground, however, that “confidentiality” is not in itself a sufficient ground to bar the application for disclosure or production (unlike a claim for public interest immunity, which the court is not concerned with here), although the fact that the documents sought contain confidential and/or commercially sensitive information is a matter which the court may take into account in the exercise of its discretion whether to order disclosure, and also when considering what, if any, safeguard(s) against improper use or dissemination of the information ought to be provided if it decides to order disclosure or production of the documents.

17.  Logically, the issue which the court should first consider is whether to order disclosure or production of the documents sought by the Applicant, before it considers the sufficiency of the Confidentiality Ring proposed by the Applicant.

18.  In so far as the Applicant is relying on the principle mentioned in paragraph 15(1) above, the complaint that the version of the Plum Report disclosed to the Applicant is so heavily redacted that it has been unable to give intelligent consideration to the Plum Report in relation to the issue of customer service continuity, or meaningful response to the Consultant’s conclusions on that issue, is already being advanced under Ground 10 of the present application for judicial review.  It seems to me to be clear that this ground of judicial review can be advanced by the Applicant without seeing the redacted parts of the Plum Report.  The communications to the Consultant sought by the Applicant is ancillary to the application for disclosure of the full unredacted version of the Plum Report and does not require separate consideration.

19.  In so far as the Applicant is relying on the principle mentioned in paragraph 15(2) above, the duty of candour in the public law context was comprehensively considered by the Court of Appeal in Chu Woan Chyi v Director of Immigration [2009] 6 HKC 77, at paragraphs 11 to 14. The following principles, at paragraph 11(6) and (7) of the judgment of Ma CJHC (as he then was), are relevant here:-

“(6) The obligation to be full and frank in the discharge of the duty of candour is of course not an open‑ended or imprecise concept. What in any given case may constitute the fulfilment of that duty is entirely dependent on the issue or issues that are before the court. The court will be astute in judicial review proceedings not to permit so called ‘fishing’ expeditions by applicants in the hope of unearthing material to enable a challenge to be mounted: see Tweed at 664A‑B (paragraph 31). In my view, the court will, in most judicial review proceedings, not make a general order for discovery based on Peruvian Guano principles because in most cases, there will simply be no necessity for such an order. This will explain why there is no automatic discovery in judicial review proceedings; if discovery is required, a separate application must be made: RHC O.53, r.8.

(7) However, once the critical issue is identified in judicial review proceedings and where the resolution of this issue requires that the court be provided with adequate material (by way of discovery or otherwise), I believe the court will in principle be more, not less, inclined to make the necessary orders…”

20.  It is clear from the above judgment of the Court of Appeal, which is of course binding on me, that the scope of the duty of candour is limited by reference to the issue or issues before the court, the determination of which must, in my view, be based on the grounds of judicial review as raised in the Form 86.  I am therefore unable to accept Mr Yu’s submission that the duty of candour would require the public authority to disclose documents which may be relevant to unpleaded grounds.

21.  In the present case, as pointed out by Mr Chan, the accuracy or rigor of the analysis in the Plum Report is not a critical issue in dispute in these proceedings, and none of the Applicant’s 13 Grounds of challenge are founded on the assertion that the analysis in the Plum Report is unreasonable or incorrect.  I do not propose to examine the 13 Grounds of challenge raised in the Form 86 individually.  On their face, the grounds which may have some connection with the Plum Report are Ground 2 and Ground 10 (which I have already dealt with above).  In so far as Ground 2 is concerned, the Applicant’s complaint is that the Authority acted irrationally in having regard to service continuity only in respect of 2G and a limited part of 4G service.  It is significant, however, that the Applicant is not making any complaint about the Consultant’s analysis in relation to the issue of customer service continuity in the Plum Report.  The Applicant’s case, as stated in paragraph 138 of the Form 86, is that:-

“The Authority’s decision to recognise the need for service continuity in relation to 2G and a limited part of 4G services, but not in relation to 3G or the bulk of the operators’ 4G services was irrational and unreasonable. The Authority said (at Decision, paragraph 14): ‘While the 900/1800 MHz Spectrum constitutes only 31% of the spectrum deployed for the provision of 3G and 4G services, the provision of 2G services is supported solely by spectrum in the 900 MHz and 1800 MHz bands’ and (at Decision, paragraph 29): ‘[the Re-assignment of the 900/1800 MHz Spectrum] is not expected to affect the provision of 3G services in general since 3G services are primarily provided by using the spectrum in the 1.9-2.2 GHz band.’ These two sentences taken together are incoherent and irrational: it is incoherent and irrational to accept that the relevant spectrum constitutes a third of the spectrum deployed for 3G and 4G and then to conclude that the reassignment of the spectrum is not expected to affect the provision of 3G services (4G and 5G services apparently being overlooked altogether).”

22.  It has not been demonstrated by the Applicant that the redacted parts of the Plum Report are relevant to its complaint under Ground 2 as advanced in the Form 86.

23.  In the course of his submissions, Mr Yu also referred to Ground 3 (“The Authority erred in refusing and failing to carry out a full ‘refarming’ cost-benefit analysis under [Radio Spectrum Policy Framework] (‘SPF’) paragraph 4.4”).  Whether the Authority was required, but failed, to do so should be readily apparent from the relevant provisions of the SPF and the Joint Statement.  Again, the Applicant has failed to pin-point how the redacted parts of the Plum Report are or might be relevant to the complaint under Ground 3 as advanced in the Form 86.

24.  Overall, I consider that the Applicant can adequately advance the 13 Grounds of judicial review in the Form 86, as indeed it has done so, without in any way being hampered by the redaction of the Plum Report.  Bearing in mind also the harm which may arise from the disclosure of undoubtedly confidential and commercially sensitive information relating to the businesses of the Applicant’s competitors to the Applicant, I am not prepared to make the disclosure/production order sought by the Applicant.

DISPOSITION

25.  For the foregoing reasons, I dismiss the Disclosure Application.  I further make an order that the Applicant shall pay the Respondents’ costs in relation to the Disclosure Application, to be taxed if not agreed with certificate for 2 counsel.

26.  Lastly, it remains for me to thank counsel for their assistance rendered to the court.