SECRETARY FOR JUSTICE v. CHOW KAM KEI FRANKIE

HCMP 1050/2021

[2022] HKCFI 704

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1050 OF 2021

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D E C I S I O N

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A. Introduction

1.  The Applicant was a candidate in the 2019 District Council Election (“Election”) which was held on 24 November 2019.  On 27 December 2019, he lodged the “Return and Declaration of Election Expenses and Election Donations” (“Election Return”) as required by section 37 of the Elections (Corrupt and Illegal Conduct) Ordinance Cap 554 (“ECICO”).

2.  The Applicant later discovered that his Election Return was not in compliance with the requirements under ECICO in four aspects: (1) he had under-stated his expenses for placing an advertisement on a minibus; (2) he had under-stated his expense on advertisement placards; (3) because of the mistakes in (1) and (2), he had under-stated his total expenses and, after the total expense is corrected, his total expense would exceed the statutorily allowed maximum by HK$316.78; and (4) he failed to submit the invoice and receipt for the expense on printing pamphlets.

3.  On 26 July 2021, the Applicant filed an Originating Summons seeking the following relief: (1) leave to correct the wrongly stated items of expense/total expense; (2) leave to be excepted from lodging the relevant invoice and receipt; and (3) relief from any penalties and/or disqualifications for his non-compliance with the ECICO.

4.  The Applicant has filed two affirmations by himself in support of his application, dated 26 July 2021 and 1 November 2021 respectively.  The Secretary for Justice (“SJ”) has filed one affirmation, from Mr Wan Ka Po, a Senior Electoral Officer of the Registration and Electoral Office (“REO”) dated 23 August 2021.

5.  The Applicant has filed written submissions prepared by Mr Ernest Ng of Counsel.  The SJ has taken a neutral stance, but in written submissions prepared by Mr Alvin Hor, Government Counsel, has submitted the SJ should have costs of this application.

6.  Though originally fixed for oral hearing, it was agreed that the application could be properly determined on paper.  Having considered all the materials before the Court, this is my Decision.

B.  The Background Facts

7.  The Applicant’s affirmation evidence mainly focuses on setting out the instances of non-compliance and giving explanation as to why they occurred.

8.  There is very little on other aspects of the facts in his affirmations.  I am only told that he was a first-timer candidate with no prior election experience; apparently he was associated with a political organization known as ‘Kickstart Wan Chai’; and that he had attended a briefing session on 21 August 2019 given by an officer of the Independent Commission Against Corruption (“ICAC”) to familiarize himself with the legal requirements under the ECICO.  I will come back to the briefing session below.

9.  Other than those matters, the affirmations do not provide other information which may be relevant in applications of this type, e.g. his age, occupation, whether he was given any other materials (besides the briefing session) on how to fill in the Election Return and if he had read them, how and when he became aware of his mistakes and details of the remedial steps he took, etc.  The Court is also not assisted with the relevant rules which might explain why he is said to be wrong in the way he filled in his Election Return.

10.  Nor could I find the missing information from the SJ’s affirmation.  Mr Wan confirmed the four aspects of non-compliance in his submission of the Election Return and took note of whether the Applicant had provided an explanation without commenting on the explanations given, subject to one or two observations to which I will come below.  It also appears that from the REO’s perspective, there was possibly a further incidence of non-compliance where the Applicant did not declare the costs of a small-sized megaphone as part of his election expenses.  The Applicant has explained why he did not include the megaphone in his 2^nd affirmation.  The SJ’s written submissions only cover costs matters.

11.  Nevertheless, on balance, I accept that I have the necessary materials properly to determine the application.

C.                The Non-Compliances

12.  As said, there are four aspects of non-compliance.

C.1    Advertisement on mini-bus

13.  He placed an advertisement of his candidacy on a minibus for two months (from 4 October 2019 to 3 December 2019) at a total cost of HK$14,600.  He thought that out of the 61 days, only 47 days fell during the “election period” so he only declared the portion of costs covering the election period as his election expenses (HK$11,249 = HK$14,600 x 47/61).  This mistake made his declaration on the total expense on “Van Print” (which covers the minibus expenses) understated by the difference in amount (HK$3,351).

14.  The Applicant’s belief came from the ICAC briefing session he attended on 21 August 2019.  The briefing session was organized by ‘Kickstart Wan Chai’ for the purpose of assisting potential district council candidates better to understand candidates’ duties under the ECICO.  The session was attended by 10 potential candidates (including the Applicant).

15.  The Applicant says he did inquire during the session with the ICAC officer about the definition of election expenses and, in particular, whether it covers expenses incurred after the election period.  The Applicant could not recall the officer’s answer verbatim but the gist of her answer was that expenses which might affect the election results would fall under the definition of “election expenses” and had to be disclosed in the Election Return.  His interpretation was that any expenses incurred after the election period should not be counted towards election expenses, because they would not affect the results.

16.  Pausing here, the Applicant did not set out in his affirmations how he arrived at 47 days.  I note that the period from 3 October 2019 (first day of advertisement) to 24 November 2019 (Election day) actually covers 52 days, rather than 47 days.  Working 47 days backward from the Election day would suggest that he must have taken 8 October 2019 as the first day rather than 3 October 2019. The Applicant did not explain why he also excluded the period before 8 October 2019.  He said that he only declared the expenses covering the “election period”, which is defined under section 2 of the ECICO as “beginning with the nomination day for the election and ending with the polling day for the election”.  As a matter of public information, the nomination day for the Election began on 4 October 2019.  In any event, the Applicant now agrees that he should have included all the 61 days.

C.2    Placards expenses

17.  In Section D, item 7 of the Election Return, the Applicant listed all his placards expenses and then added them up to a total for this category.  Apparently, the Applicant omitted one of the items in his summation process (the 6 placards which were produced on 29 October 2019 at the cost of HK$472) and therefore the total for this category was also understated by the same amount.

18.  Mr Wan also pointed out in his affirmation that the number of placards produced on 29 October 2019 was said to be 11 (instead of 6) in another form submitted by the Applicant to the REO.  The Applicant confirmed in his 2^nd affirmation that 6 is the correct number and it was the other form which was wrongly stated.

C.3    Total expenses exceeding the statutory limit

19.  Because of the understatement in the mini-bus advertisement and the placards expenses, the Applicant’s total expenses were understated by HK$3,823 (HK$3,351 + HK$472).  The Applicant originally declared his total expenses as HK$65,293.78.  Adding back HK$3,823, his total expenses become HK$69,116.78.

20.  Under section 3(b) of the Maximum Amount of Election Expenses (District Council Election) Regulation Cap 554C, the maximum amount of election expenses that could be incurred by the Applicant was HK$68,800.  His corrected total expenses exceed the maximum by HK$316.78.  Exceeding the maximum allowance is made illegal conduct under section 24(1) of the ECICO.

C.4    Missing the invoice and receipt for the pamphlets

21.  Section 37(2)(b)(i) of the ECICO requires that for election expense of HK$500 or more, the candidate must also submit an invoice and a receipt giving particulars of the expenditure.  The Applicant declared an expense on pamphlets at the cost of HK$6,630.  But the document he attached for support was a “quotation” at the stated amount.

22.  The Applicant confirmed that he has spent the exact amount as quoted in the quotation.  He said was no longer in possession of the invoice and receipt and sought the Court’s indulgence to be excepted from it.

23.  As said, Mr Wan also pointed that that Applicant did not declare the costs of a mini-sized megaphone at the cost of HK$155, whilst he exhibited the invoice of the same to his Election Return.  I note that the relevant invoice also featured a backpack the expense of which was declared as election expenses.  The Applicant replied in his 2^nd affirmation that after he had purchased the megaphone, he realized that using it would cause nuisance to the neighboring area.  He had never used it and did not include it in his election expenses.

D.  Whether to Grant Relief

24.  The four aspects incidences of non-compliances broadly fall into three categories:

(1)  The understatements in the minibus advertisement and placards are failures to set out the candidate’s election expenses as required by section 37(1)(a).  The Applicant seeks relief to correct the Election Return under section 40(3) of the ECICO.

(2)  The failure to attach the invoice and receipt for the pamphlets was in breach of section 37(2)(b)(i). The Applicant asks to be exempted from submitting the invoice and receipt for the pamphlet expenses under section 40(5) of the ECICO.

(3)  For exceeding the statutory maximum on election expenses, he applies under section 31(1), which provides relief to a candidate who has done or omitted to do an act which would otherwise amount to illegal conduct under the ECICO.

25.  The requirements for the Court to grant relief under sections 40(3) and section 40(5) are the same.  They are provided by sections 40(4) and 40(6) respectively.  The Court has to be satisfied that the false statement or error in the Election Return (1) was attributable to the misconduct of an agent or employee of the applicant; the inadvertence or an accidental miscalculation by the applicant or other person, or any reasonable cause, and (2) was not attributable to the applicant’s bad faith.

26.  I have recently set out the relevant law on the meaning of “inadvertence” and “bad faith” in David Ho v The Secretary for Justice [2022] HKCFI 566 at §§59-71 in the context of section 40(2) on the requirements to grant relief for failure to lodge an Election Return.  The same principles apply here, but I shall not repeat them.

27.  Sections 31(1) and 31(2) are not for granting relief for exceeding the statutory maximum for election expenses specifically, but for relief from penalties and disqualifications that could be imposed under an electoral law for any act or omission amounting to illegal conduct generally.

28.  The requirements under section 31(2) appear to be broader than granting relief for making false statements in a return or forgetting to submit the invoice/receipt.  The section provides that the Court may grant relief if it is satisfied that: (1) the act or omission was due to inadvertence, an accidental miscalculation or any other reasonable cause and was not due to bad faith; (2) where the Court requires notice of application to be given in Hong Kong, the notice has been given; and (3) it is just that the applicant should not be subjected to one more of those penalties and disqualification.

29.  The first requirement is identical to the requirement for granting relief for making false statements or failing to submit supporting documents under section 40, except for the limb of misconduct on the part of the applicant or his employees.  The second requirement is irrelevant to the present case.  The third requirement seems to call on the Court to exercise its overall discretion and to consider if it is just to grant relief, weighing everything in the balance.  I consider that must be what the Court has to do even if such a requirement were not expressly stated in section 40.

30.  The Applicant seeks to rely on “inadvertence” and no bad faith for all three categories of non-compliance.

31.  For the misstatement in the expenses for the minibus advertisement, the Applicant has obviously applied his mind to the meaning of “election expenses” and tried to compute the right figure under his own understanding.  Since a deliberate and conscious decision was made, “inadvertence” is not open to the Applicant.

32.  But I would grant relief on the “with reasonable cause” limb.  Based on the answer given by the ICAC officer in the briefing session, it is not unreasonable for a lay person to take the view that the costs attributable to the period after 24 November 2019 should not be counted as “election expenses” since they would not have any impact on election results.

33.  Section 2 of the ECICO defines “election expenses” as

expenses incurred or to be incurred, before, during or after the election period, by or on behalf of the candidate for the purpose of promoting the election of the candidate; or prejudicing the election of another candidate, and includes the value of election donations consisting of goods and services used for that purpose.

34.  The text of section 2 alone is not entirely clear as to portion of the advertisement period after the Election day which would have no impact on promoting the candidate or prejudicing another candidate.  But, if one takes a wider view, the portion of the period after the Election was incurred because it had to be incurred together with the portion falling before the Election Day, which was obviously for election purpose.  Neither Mr Hor nor Mr Ng has made any submissions on the proper scope of “election expenses”, but implicitly they must have taken the wider view as being correct.

35.  Nor has my attention been drawn to any materials provided to the Applicant as a candidate which clearly states that he would have to declare the monthly advertising expenses even though part of the period would be post-Election.

36.  A candidate is required to exercise reasonable diligence to familiarize himself with the election rules under the law, including the requirements on filling out the Election Return.  But viewing the circumstances as a whole, I have come to the view that relief should be granted in this case because the mistake was made with a reasonable cause and without bad faith.  I have taken into account that he is a first-timer candidate, he had attended the briefing session and specifically directed his mind to and asked questions about expenses covering the post-Election period.

37.  The understatement in the total expenses for placard obviously falls within the meaning of “accidental miscalculation”.  He omitted an item in his summation process.  There was no intention to hide that item which was clearly set out.  I would grant relief for this item as well.

38.  The fact that the Applicant exceeded the total expenses allowed by the statute was but a direct consequence of the two errors above.  I accept Mr Ng’s submissions that he had only exceeded by a small margin.  I also accept that since the Applicant had submitted documents showing the full amount for the minibus advertisement and the placards, he could not be accused of deliberately understating those items to bring his total expenses within the statutory limit.  Weighing everything, I accept that the Applicant exceeded statutory limit due to his inadvertence and that was without bad faith.  It would be unjust not to relieve him of the potential consequences flowing from such non-compliance.

39.  Finally, I would also grant relief to except the Applicant from submitting the invoice and receipt for the pamphlets.  I also accept that the error was made due to inadvertence and was without bad faith.

E.  Conclusion

40.  The Applicant’s application is granted.  The Applicant should lodge the corrected Election Return within 14 days.

F.  Costs

41.  Mr Ng submits that there are no special reasons to order costs against the Applicant in this case – and instead there should be no order as to costs – because: (1) the Applicant has candidly accepted his responsibility; (2) the parties have jointly applied for disposal of the case on paper; (3) there has been no inordinate delay on the part of the Applicant; and (4) the SJ has adopted a neutral stance throughout.

42.  Mr Hor submits that this approach is misconceived.  He points to a plethora of authorities which describe that when an applicant seeking the indulgence of the Court in this sort of application, the usual costs order is that an applicant should bear the costs of a respondent.  By way of example only, Mr Hor points to Te Wing Chi v Secretary for Justice [2021] HKCFI 3473 at §28, where I said as follows:

Where the Applicant is seeking the Court’s indulgence, and the SJ has properly adopted a neutral stance whilst drawing to the Court’s attention matters properly to be taken into the balance, the appropriate order is that the Applicant should bear the SJ’s costs.

43.  I agree with Mr Hor that remains the correct approach in this case.  I also agree that the submissions made by Mr Ng do not point to a different costs order.  The Applicant’s candid acceptance of his responsibility was appropriate when seeking the Court’s indulgence, but does not remove the need to have sought that indulgence.  The agreement to deal with the application on paper may have saved costs, but does not otherwise change the incidence of costs.  The question of delay is largely irrelevant to the costs question.  The neutrality of the SJ, whilst filing short affidavit evidence and submissions to assist the Court with matters to be taken into the balance, is the approach taken in most such cases.

44.  Therefore, the Applicant shall bear the SJ’s costs.

45.  Mr Hor seeks those costs to be summarily assessed at HK$22,982, by reference to a statement of costs provided.  Having considered that statement, and applying the usual approach to summary assessment, I make the assessment at HK$18,000.