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

CACV 532/2018 AND CAMP 155/2018

[2019] HKCA 44

CACV 532/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 532 OF 2018

(ON APPEAL FROM HCAL NO 448 OF 2018)

________________________

________________________

AND

CAMP 155/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 155 OF 2018

(ON AN INTENDED APPEAL FROM HCAL NO 448 OF 2018)

________________________

________________________

(Heard together)

________________________

J U D G M E N T

________________________

Hon Yuen JA:

1.  I agree with the judgment of Kwan JA.

Hon Kwan JA:

2.  This is the appeal of the applicant, Hong Kong Telecommunications (HKT) Limited, in an application for judicial review against the dismissal of a summons for disclosure of documents by Chow J on 3 October 2018.  On 25 October 2018, Chow J gave leave to appeal in respect of four out of six grounds of appeal, taking the view that the scope of the duty of candour in the public law context is a matter of considerable public importance and guidance from the Court of Appeal on this would be helpful.  He refused leave to appeal on the other two grounds.

3.  The applicant filed a notice of appeal on 26 October 2018 in respect of the four grounds for which leave was granted (CACV 532/2018) and renewed its application to the Court of Appeal for leave to appeal on the two remaining grounds (CAMP 155/2018).

4.  We heard the appeal on an expedited basis, together with the application for leave to appeal as a rolled‑up hearing, so that in the event we should decide to grant leave to appeal for the remaining grounds, the hearing of the leave application would be treated as that of the appeal.

Background

5.  The decision that is the subject of the application for judicial review is that of the respondents, the Secretary for Commerce and Economic Development (“the Secretary”) and the Communications Authority (“the Authority”), contained in a Joint Statement issued by them on 19 December 2017, entitled “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 Related Spectrum Utilisation Fee” (“the Joint Statement”), specifically “to conduct a partial auction of the 900 MHz and 1800 MHz Bands upon expiry of the existing assignments in 2020 and 2012” (“the Decision”).

6.  Leave to apply for judicial review was granted on paper on 23 March 2018 and the substantive hearing is to be held on 12 February 2019 before Chow J with four additional days reserved.

7.  On 24 April 2018, the applicant issued a summons under Order 53 rules 3 and 8[1] seeking:

(1) interim stay of the Decision (“the interim relief application”); and

(2) disclosure of (i) the full unredacted version of what has been referred to as the “Plum Report” prepared by Plum Consulting London LLP (“the Consultant”) in September 2016; 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 terms of the draft Confidentiality Order annexed to the summons (“the disclosure application”).

8.  The summons was heard by Chow J on 22 August 2018.  He gave the decision on the interim relief application on 24 August 2018 and the decision on the disclosure application on 3 October 2018.  The latter is the subject of the present appeal and application for leave to appeal.

9.  I take the following basic facts from those two decisions of Chow J and will adopt the expressions and abbreviations in his decisions:

“4. The mobile telecommunications market in Hong Kong is highly competitive, with 4 mobile network operators (“MNOs”), namely, HKT (“the Applicant”), China Mobile, Hutchinson Telephone (under the name “3”) and SmarTone Mobile, currently operating in Hong Kong.  As at September 2017, the number of mobile service subscribers in Hong Kong, with a population of some 7.3 million, was 18.25 million, representing one of the highest penetration rates in the world at about 247%.

5. Under Section 32H(1) of the Telecommunications Ordinance, Cap 106 (“the Ordinance”), the Communications Authority (the 2^nd Respondent, “the Authority”) may assign frequencies and bands of frequencies in all parts of the radio spectrum used in Hong Kong. Under Section 32I(2) of the Ordinance, the Secretary for Commerce and Economic Development (the 1^st Respondent, “the Secretary”) may by regulation prescribe the level of spectrum utilization fee (“the SU Fee”) or the method for determining the SU Fee.

6. Currently, 552 MHz of the radio spectrum (“the Spectrum”) in four different frequency bands, including the “900 MHz band” and “1,800 MHz band”, are assigned to the 4 MNOs for the provision of public mobile telecommunications services in Hong Kong.

7. Of the 198.6 MHz of the Spectrum in the 900 MHz and 1.800 MHz bands, representing some 36% of the total available Spectrum, which have been assigned to the 4 MNOs:-

(1)  the assignments of 49.8 MHz of the Spectrum in the 900 MHz band are due to expire on dates between 19 November 2020 and 11 January 2021; and

(2)  the assignments of 148.8 MHz of the Spectrum in the 1,800 MHz band are due to expire on 29 September 2021.

8. The Decision concerns the arrangements to be made for the said 198.6 MHz together with 1.2 MHz of additional spectrum (currently vacant), making a total of 200 MHz, upon the expiry of the existing assignments.  The Respondents began the consultation process in February 2016 in relation to the said arrangements, and the Decision, in the form of the Joint Statement, was made on 19 December 2017.  It was decided, inter alia, that:-

(1)  an offer (“the Offer”) of a right of refusal (“RFR”) would be made to each of the 4 incumbent MNOs of up to 20 MHz (ie up to a total of 80 MHz) of the Spectrum in the 1,800 MHz band; and

(2)  the balance of the Spectrum, of at least 120 MHz, would be put up for auction (“the Auction”) to be held at the end of 2018, subject to caps on the amount of the Spectrum that could be acquired, to minimum prices that had to be paid, and to other rules.

9. On 19 March 2018, the Applicant made an application for leave to apply for judicial review of the Decision.  The Form 86 raises a total of 13 grounds of challenge to the Decision, which it is not necessary to recite here.  On 23 March 2018, the court granted leave to the Applicant to apply for judicial review of the Decision on consideration of papers alone. …”

(Decision of Chow J on 24 August 2018)

“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[2].  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”.”

(Decision of Chow J on 3 October 2018)

Chow J’s decision on the disclosure application

10.  Mr Yu[3] submitted on behalf of the applicant that two relevant principles should be applied:

“(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.

(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” ”[4].

11.  The respondents resisted the application primarily on the ground that the documents sought are irrelevant to the issues in dispute and are not necessary for the fair and just disposal of the proceedings for judicial review[5].  They prayed in aid the criteria for specific discovery as the established mechanism for requiring the production of further documents not included in the primary disclosure.

12.  Regarding the principle invoked by the applicant in (1), Chow J noted that in Ground 10 of the application for judicial review, a complaint is already advanced 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.  He took the view that this ground of judicial review can be advanced by the applicant without seeing the redacted parts of the Plum Report.  As for the communications to the Consultant sought by the applicant, this is ancillary to the application for disclosure of the full unredacted version of the Plum Report and does not require separate consideration[6].

13.  As for the applicant’s reliance on the principle in (2), Chow J cited the judgment of Ma CJHC (as he then was) in Chu Woan Chyi v Director of Immigration [2009] 6 HKC 77 at §14(6) and (7) and held:

“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.”[7]

14.  Having rejected the applicant’s submissions on the scope of the duty of candour, Chow J went on to apply the criteria for specific discovery.  He accepted the submission of Mr Abraham Chan, SC (who appeared for the respondents below and on appeal[8]) that “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”[9].  The judge noted that the only grounds in the Form 86 which may have some connection on their face with the Plum Report are Grounds 2, 3 and 10.

15.  Ground 10 has been dealt with as mentioned above.

16.  As for Ground 2, the 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.  The judge regarded it significant 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”.  He held that it has not been demonstrated by the applicant the redacted parts of the Plum Report are relevant to its complaint under Ground 2[10].

17.  Ground 3 relates to the complaint that the Authority erred in refusing and failing to carry out a full ‘refarming’ cost-benefit analysis under the Radio Spectrum Policy Framework (“SPF”) §4.4.  The judge took the view that 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.  He held that the applicant has failed to pin-point how the redacted parts of the Plum Report are or might be relevant to its complaint under Ground 3[11].

18.  Chow J summed up his conclusion in this way:

“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.”[12]

19.  He refused to give leave to appeal in respect of the two proposed grounds which relate to the complaint of “irrationality” (Ground 2 in the Form 86) and the complaint that the Authority failed to carry out a full ‘refarming’ cost-benefit analysis under §4.4 of the SPF (Ground 3 in the Form 86), as he is not convinced that the redacted parts of the Plum Report are relevant to either of these complaints, and does not consider that the proposed grounds of appeal are reasonably arguable or have reasonable prospects of success[13].

The grounds and proposed grounds of appeal

20.  Grounds 1 to 3 in the notice of appeal relate to the scope of the duty of candour on the part of the respondents and seek to challenge the holding that the scope of this duty is limited by reference to the issue or issues before the court, the determination of which must be based on the grounds of judicial review as raised in Form 86.  It is the applicant’s contention that this duty is not so confined but extends to the relevant facts and reasoning underlying the decision challenged.

21.  Ground 4 in the notice of appeal relates to the adequacy or sufficiency of the proposed confidentiality ring.  This will become relevant if the applicant is correct in its contention about the scope of the duty of candour and goes to the exercise of the court’s discretion whether a full, unredacted version of the Plum Report should be ordered to be disclosed.

22.  The two proposed grounds of appeal for which the applicant seeks leave to appeal challenge the holdings that the redacted parts of the Plum Report are irrelevant to Grounds 2 and 3 in the Form 86.  The proposed grounds of appeal attack the conclusion reached by the judge in applying the criteria for specific discovery.

23.  Mr Yu indicated that his main submission is that the applicant has a general duty of disclosure under the duty of candour, and specific discovery is his fallback position, which would include his reliance on Order 24 rule 10.

24.  Be that as it may, I think it is more logical first to deal with specific discovery in respect of the proposed grounds of appeal.  The criteria for specific discovery are narrower than the scope of the duty of candour as advocated by Mr Yu.  If the applicant is unable to bring itself within the narrower ambit, it would then be appropriate to consider whether there is a duty of candour with the wider scope as submitted and, if so, whether the discretion to order disclosure should be exercised notwithstanding the issue of confidentiality.

Grounds 2 and 3 in the Form 86

25.  Ground 2 seeks to challenge the Decision of the Authority on irrationality as regards the question of service continuity.  The applicant’s case is encapsulated in §138 of the Form 86.  Specifically, these two sentences in §14 and §29 of the Decision, are said to be “incoherent and irrational” when taken together: “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 “[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”.

26.  The applicant contended in §138 of the Form 86 “it is incoherent and irrational to accept that the relevant spectrum constitutes a third of the spectrum deployed for 3G and 4G” (in §14 of the Decision) and then to conclude (in §29 of the Decision) that “the reassignment of the spectrum is not expected to affect the provision of 3G services (4G and 5G services apparently being overlooked altogether)”.

27.  The gravamen of the attack in Ground 2 is that there is an apparent internal inconsistency in the reasoning of the Decision, which vitiates the conclusion arrived at.  I agree with the judge that in Ground 2 the applicant is not making any complaint about the Consultant’s analysis relating to customer service continuity in the Plum Report.

28.  Ground 3 relates to the interpretation of §4.4 of the SPF and the complaint that the Authority failed to carry out a full ‘refarming’ cost-benefit analysis.  The issue here is whether the Authority was or was not required to undertake the appraisal.  Quite clearly, this does not turn on the content or merits of the Consultant’s analysis in the Plum Report.  As the judge has stated, this issue should turn on the relevant provisions of the SPF and the Joint Statement.

29.  In the proposed grounds of appeal, the applicant sought to argue the judge was in error in requiring the applicant to demonstrate that the redacted parts of the Plum Report are or might be relevant to the complaints in Grounds 2 and 3 of the Form 86.  The reasons are firstly the Plum Report was so heavily redacted that the Consultant’s analysis was not intelligible, so the applicant was unable to make any complaint about the Consultant’s analysis.  Secondly, as the Plum Report was incorporated by reference in the Joint Statement “without any abstraction of its reasoning”, the Plum Report was relevant to the reasoning behind the Decision of the Authority.

30.  I do not accept the above arguments.  We are applying here the criteria for specific discovery.

31.  The assertion that the applicant was unable to make any complaint about the Consultant’s analysis insofar as this relates to Grounds 2 and 3 in the Form 86 owing to heavy redaction of the Plum Report is tacit acceptance that the applicant has not raised any issue about the Consultant’s analysis in Grounds 2 and 3.  Quite clearly, disclosure of the redacted parts is sought to enable the applicant to explore if complaints could be made about the Consultant’s analysis.  This is fishing for material to mount possible further challenge and is not permissible.

32.  The complaint that there was procedural unfairness arising out of the redaction is the subject of the challenge in Ground 10.  Mr Yu submitted that the disclosure of the redacted parts would not “pre‑empt” Ground 10.  He contended that the redacted parts should be disclosed so that the court would be able to better assess if the redacted material could have made any difference to the applicant’s understanding and its ability to make a meaningful response.

33.  I agree with the judge that the challenge of procedural unfairness in Ground 10 can be advanced without seeing the redacted parts.  And there is no getting away from the reality that disclosure of the redacted parts would “pre‑empt” Ground 10.  Applying the criteria of specific discovery, I do not think disclosure of the redacted parts is necessary for disposing fairly of the issue raised in Ground 10.  As submitted by Mr Chan, disclosing the redacted parts at this stage would plainly undermine and essentially negate the respondents’ ability to effectively maintain, at the substantive hearing, that it was and remains proper and in the public interest to withhold the redacted information from the applicant.

34.  As for the contention that the Plum Report was “relevant to the reasoning behind the Decision of the Authority”, such a general assertion is insufficient for specific discovery and must be considered in the context of the present circumstances.  There was “full engagement” by all the MNOs, including the applicant, in the course of the Study including their participation in three rounds of individual meetings with the Consultant, who had “provided the relevant scenario assumptions (namely the range of spectrum holding of the concerned MNO in scenarios) to the corresponding MNO during the meetings”[14]. The Form 86 in these proceedings is a detailed and lengthy document in which 13 grounds were advanced to challenge the Decision.  It is telling that the applicant is unable to demonstrate any possible relevance of the redacted material to any of the detailed grounds of challenge and has to resort to assertions that the Plum Report was relevant to the Decision in a broad manner of speaking.

35.  Order 24 rules 10 and 11 are subject to Order 24 rule 13(1) that no order for production of any documents shall be made unless it is necessary for disposing fairly of the cause or matter.  For the reasons already given, neither Order 24 rule 10 nor the general observations of Rix LJ in Rubin v Expandable Ltd [2008] 1 WLR 1099 at §24 regarding the inspection of a document mentioned in one of the qualifying documents in the rules of court would avail the applicant.

36.  It does not appear to me that the proposed grounds of appeal are reasonably arguable.  I would refuse to grant leave to appeal and dismiss the applicant’s summons in CAMP 155/2018.

The applicant’s submissions on the duty of candour

37.  The applicant submitted that the Decision plainly relied on the Study for its conclusions and asserted that the detailed reasoning supporting the Authority’s conclusions is hidden behind the redactions in the Plum Report[15]. The duty of candour covers materials which are relevant to why the decision-maker has made the decision in question.  Under this duty, the decision-maker is to make full and fair disclosure of the decision-making process, laying before the court all the relevant facts and reasoning underlying the decision challenged (Tweed v Parades Commission for Northern Ireland [2007] 1 AC 650 at §§31 and 54, per Lord Carswell and Lord Brown respectively).  The existence and rationale of this duty are not to be equated with procedural rules and practices concerning the proving of facts or leading evidence (Graham v Police Service Commission [2011] UKPC 46 at §19, per Sir John Laws), and proceedings for judicial review should not be conducted in the same manner as hard-fought litigation (Belize Alliance of Conservation Non-Governmental Organisations v Department of the Environment of Belize [2004] UKPC 6 at §86, per Lord Walker).

38.  The duty of candour arises upon the granting of leave to apply for judicial review, as by then the material before the court is sufficient to persuade it to grant leave.  The duty then rests upon the respondent to file evidence to fill up the gaps in the knowledge of the court, bearing in mind that the court is exercising a supervisory jurisdiction (R v Barnsley Metropolitan Borough Council ex parte Hook [1976] 1 WLR 1052 at 1060F to G, per Scarman LJ; R v Lancaster County Council ex parte Huddleston at 945b, per Sir John Donaldson MR).

39.  Mr Yu submitted that the scope of this duty of candour is not limited by reference to the issues as raised in the Form 86 and it covers material that is relevant or assists the claimant including material on some as yet unpleaded ground.  Other than the general statements of principles as mentioned above, he relied on these statements in De Smith’s Judicial Review (8^th ed) and Fordham’s Judicial Review Handbook (6^th ed) at §10.4:

“The duty has been described as a very high one to assist the court with full and accurate explanations of all the facts relevant to the issues which the court must decide. The duty extends to documents and other information which will assist the claimant’s case and/or which may give rise to further grounds of challenge which might not otherwise occur to the claimant.” (De Smith at §16-027)

“10.4 Defendant/interested party’s duty of candour. A defendant public authority and its lawyers owe a vital duty to make full and fair disclosure of relevant material. That should include: (1) due diligence in investigating what material is available; (2) disclosure which is relevant or assists the claimant, including on some as yet unpleaded ground; …” (Fordham at §10.4)

(Emphasis supplied)

40.  The passage in Fordham at §10.4 was cited with approval by Lord Kerr in R (Bancoult) v Secretary of State for Foreign and Commonwealth Affairs (No 4) [2017] AC 300 at §183.

41.  In §10.4.3 of Fordham, under the heading of “Defendant’s candour: beyond the pleaded case”, the author cited these cases as examples in which disclosure was made by the respondent which went beyond the grounds stated in the original statement: R (Evans) v Lord Chancellor and Secretary of State for Justice [2011] EWHC 1146 (Admin) [2012] 1 WLR 838 at §5; R v Barnsley Metropolitan Borough Council, ex parte Hook at 1058C to D; R v Waltham Forest London Borough Council, ex parte Baxter [1988] QB 419 at 422A to B.

42.  Mr Yu also drew attention to Secretary of State for Foreign and Commonwealth Affairs v Quark Fishing Ltd [2002] EWCA Civ 1409 at §50, in which Laws LJ did not confine the duty “to assist the court with full and accurate explanations of all the facts relevant to the issue the court must decide” to the pleaded grounds.  It was held in that case that the material put forward by the Secretary of State did not convey a fair and full picture of the decision-making process (at §51).

43.  There remain these pertinent statements of Ma CJHC in §§14(6) and (7) of Chu Woan Chyi, which were followed by the judge:

“(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…”

44.  Mr Yu submitted that the judgment of the CJHC in Chu Woan Chyi should be read as a whole and the statements in §§14(6) and (7) should be read in context with §13 which is as follows:

“The duty of candour, from a practical point of view, is primarily relevant from an evidential point of view. Essentially, it is a duty placed on the decision maker (the respondent in judicial review proceedings) to be full and frank to both the court and the other side (the applicant) in disclosing all the relevant facts and documents. The facts and documents may relate to the actual reasons for a decision (as in the present case) or to any other aspect that is relevant in the judicial review proceedings. A respondent is invariably in a position to be full and frank; after all, he or she will be in possession of all the relevant facts going to a decision.”

45.  Mr Yu contended there is no indication what was said in §14(6) should undermine what was stated earlier in §13.

Discussion of the applicant’s submissions

46.  The applicant’s contention is that the judge was wrong in law to hold that the scope of the duty of candour of a respondent is limited by reference to “the issues pleaded in the Form 86”[16].  As Mr Yu rightly pointed out, in the extract in Chu Woan Chyi at §§14(6) and (7) set out above, Ma CJHC did not use the words “pleaded or unpleaded” issue in the Form 86.  What he actually said was: “What in any given case may constitute the fulfilment of that duty [of candour] is entirely dependent on the issue or issues that are before the court”.  Properly understood, what was said in Chu Woan Chyi at §§14(6) and (7) are not in conflict with the statements in De Smith and Fordham cited by Mr Yu, in which the authors expressed the view that the duty of candour may extend to disclosure of information relating to “further grounds of challenge which might not otherwise occur to the claimant”, “including on some as yet unpleaded ground”.

47.  Although the issue or issues that are before the court in judicial review proceedings should be identified from the grounds in the Form 86, there may be unusual situations in which the issues are not so raised.  The three cases cited in Fordham at §10.4.3 are examples.  It should be noted in each of those cases, no or no relevant information on the decision-making process was disclosed to the applicant at the time leave was granted to apply for judicial review. Quark Fishing Ltd is another instance in which the business of uncovering the decision-making process was described as “tortuous and problematic” (at §§22 and 27).

48.  In R v Barnsley Metropolitan Borough Council, ex parte Hook, the relevant information (that the market manager was present at the deliberations of the council committee) was not known to the applicant and so was not mentioned in his grounds of application for judicial review in the Divisional Court.  The issue was raised in the affidavit evidence filed by the authority.  On appeal, the applicant was allowed to use this as a ground to challenge the committee’s decision.

49.  In Evans, the court at first instance had refused permission to advance a complaint of want of disclosure as a ground of judicial review.  Thereafter, disclosure of the documents was properly made by the Secretary of State, showing the true reasons for the amendment of the funding code of the Legal Services Commission (being the subject of the judicial review).  This allowed the applicant to argue on appeal that the consultation process leading to the amendment of the funding code was flawed for want of disclosure of documents showing the true reasons for the proposed amendments.

50.  Similarly, the applicants in R v Waltham Forest London Borough Council, ex parte Baxter were faced with the initial difficulty that they did not know why certain members had voted in favour of a resolution in a council meeting and could only allege that the conduct of those members was Wednesbury unreasonable.  It was when the council rightly responded with additional information that four principal issues emerged, which the Divisional Court and later the Court of Appeal considered.

51.  In rejecting Mr Yu’s submission that “the duty of candour would require the public authority to disclose documents which may be relevant to unpleaded grounds”, Chow J said the effect of the extracts in §§14(6) and (7) of Chu Woan Chyi is 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”[17].  If by this Chow J meant that “the issue or issues that are before the court” must be confined to pleaded grounds in the Form 86, it seems to me he was rather too restrictive in his reading of §§14(6) and (7) in Chu Woan Chyi, as there are unusual instances borne out by the cases mentioned above.  To this extent, I do not agree with Mr Chan in his written submission that “the ambit of the duty [of candour] cannot exceed the scope of substantive issues identified in the Form 86 which require decision by the court”.

52.  The important point that was made in §§14(6) and (7) of Chu Woan Chyi is not so much whether an issue is or is not pleaded in the Form 86 so as to be covered by the duty of candour.  The particular aspect Ma CJHC sought to highlight in that extract is that the obligation to be full and frank in the discharge of that duty is “not an open‑ended or imprecise concept” and “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”.  Hence, whether in any given case the duty of candour is fulfilled “is entirely dependent on the issue or issues that are before the court”.  That is why “there is no automatic discovery in judicial review proceedings”, so “if discovery is required, a separate application must be made: RHC O. 53 r. 8”.  The court will in principle be “more, not less, inclined to make the necessary orders”, “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”.

53.  If it is suggested that §§14(6) and (7) of Chu Woan Chyi should be read down so this would not have the effect of undermining the statements in §13, I would disagree with this suggestion.  As stated in the opening words of §14, the sub‑paragraphs that follow “highlight various facets and examine how the duty fits into the general scheme of judicial review proceedings, in order fully to comprehend the true nature and extent of the duty”.

54.  I do not understand Mr Yu to have belittled the importance to guard against fishing expeditions by applicants in the hope of unearthing material to enable a challenge to be made.  The words of Lord Carswell in Tweed at §31 were cited in §14(6) of Chu Woan Chyi (“the undesirability of allowing “fishing expeditions”, where an applicant for judicial review may not have a positive case to make against an administrative decision and wishes to obtain disclosure of documents in the hope of turning up something out of which to fashion a possible challenge”).  See also Lord Brown in Tweed at §56 (“disclosure orders are likely to remain exceptional in judicial review proceedings, … and the courts should continue to guard against what appear to be merely “fishing expeditions” for adventitious further grounds of challenge”).  To similar effect are these words of Parker LJ in R v Lancaster County Council ex parte Huddleston at 947f to g:

“In so doing they will, in my view, be making full and fair disclosure and putting the cards face upwards on the table as referred to by Sir John Donaldson MR. I express my views in a rather more restricted way, for I would not wish it to be thought that once an applicant has obtained leave he is entitled to demand from the authority a detailed account of every step in the process of reaching the challenged decision in the hope that something will be revealed which will enable him to advance some argument which has not previously occurred to him.”

55.  Sir John Donaldson MR expressed his agreement with Parker LJ that “the grant of leave to apply for judicial review does not constitute a licence to fish for new and hitherto unperceived grounds of complaint” (at 946f).

56.  To recapitulate, the law on this aspect of the scope and nature of the duty of candour is as stated in §§14(6) and (7) of Chu Woan Chyi.  As Chow J has observed[18], this is consistent with the statements of Singh LJ in R (Hoareau) v Secretary of State for Foreign and Commonwealth Affairs [2018] EWHC 1508 (Admin) at §20:

“The duty of candour and co-operation which falls on public authorities, in particular on HM Government, is to assist the court with full and accurate explanations of all the facts relevant to the issues which the court must decide. It would not, therefore be appropriate, for example, for a defendant simply to off‑load a huge amount of documentation on the claimant and ask it, as it were, to find the “needle in the haystack”. It is the function of the public authority to draw the court’s attention to relevant matters; as Mr Beal put it at the hearing before us, to identify “the good, the bad and the ugly”. This is because the underlying principle is that public authorities are not engaged in ordinary litigation, trying to defend their own private interests. Rather, they are engaged in a common enterprise with the court to fulfil the public interest in upholding the rule of law.”

57.  To state the obvious, whether in a given situation the duty of candour is discharged would depend on the facts, the issues before the court, and the basis of the challenge mounted.  As Parker LJ had said in R v Lancaster County Council ex parte Huddleston at 947b, the grounds on which leave is granted to apply for judicial review vary enormously, so too do the answers which the respondent may properly make.  It is not possible to generalise.  Sir John Donaldson likewise agreed that “the appropriate response by the respondent will depend on the facts of each case which are almost infinitely variable” (at 946f).

If the duty of candour is fulfilled in the present case

58.  Turning to the facts in the present case, I examine the circumstances to see if the duty of candour is fulfilled.  Put in another way, the question is whether the disclosure sought is “necessary for disposing fairly” of the issues before the court, or to “enable the court to deal justly” with the challenge mounted in this application for judicial review (Tweed at §§3 and 52).

59.  The redacted materials in the Plum Report, being part of the documents sought to be disclosed in the disclosure application, consist largely of information provided by the MNOs (which are in direct competition with one another) to the Consultant relating to the utilisation of the relevant band of frequencies assigned to them.  It includes for each of the MNOs a combination of actual and forecast figures including data traffic, the number of customers using the respective bands of frequencies, the deployment of mobile technologies (such as 3G or 4G) in its network as well as any spectrum refarming plan, all of which is very specific to the MNO concerned and highly commercially sensitive.

60.  As disclosure of such information of an MNO to its competitors could potentially be highly damaging and could undermine competition between them, the MNOs had insisted on information in relation to their network design and traffic to be provided to the Consultant for the Study being kept confidential.  Notwithstanding that the Authority and the Consultant are under a statutory duty[19] to preserve the confidentiality of information provided by the MNOs to the Consultant, the Authority and the Consultant provided independent confidentiality undertakings to the MNOs at the specific request of the applicant, SmarTone and Hutchison to give all the MNOs additional assurance to safeguard the confidentiality of the information provided by each of them.

61.  Further, as the information obtained by the Consultant from direct competitors is of an exceptionally sensitive kind, and the Study involved predictions about how individual MNOs would be impacted by loss of their spectrum holdings which could itself influence the outcome of the Auction, the Consultant took care not to disclose a level of detail in its published findings that would enable one MNO to understand, or reverse engineer, sensitive information drawing on the position of the other MNOs.  Hence, following completion of the Study, the Plum Report was published in a redacted form with the Second Consultation Paper, and the reasons for redaction, as subsequently explained in the Consultant’s Response in September 2017, were that “it is not appropriate for [the Consultant] to disclose further details of the assumed spectrum scenarios” as “to disclose such information would in effect enable all readers to second-guess the identity of the MNOs in the spectrum scenarios, thereby in effect compromising [the Consultant’s] undertaking of non-disclosure of confidential information as obtained from each MNO.”

62.  The entire Consultancy Brief was issued to the MNOs.  I am not persuaded that disclosure of all communications to the Consultants sought in the disclosure application is necessary for a proper understanding of the Plum Report.  The MNOs were extensively involved in the Study.  The Consultant conducted extensive information gathering and consultation with each of the MNOs.  There were three rounds of meetings with each of them prior to the publication of the Plum Report: the first covered the general assessment approach, the key considerations in the Study and the inputs and outputs of the assessment mode; the second involved clarification of the data provided by each MNO and the Consultant’s update on the assessment model; the third was for the Consultant to brief each MNO on the results of its preliminary assessment and the key assumptions it had used for the assessment model.  Following the publication of the Plum Report, there was another round of individual meetings with each MNO to obtain feedback on the report.

63.  Hence, in the individual meetings, the applicant (with the involvement of its external consultants) was informed about the traffic forecasts adopted, assumptions used in the model, the assumptions for the various spectrum scenarios (including assumptions as to the range of spectrum holding that the applicant may have), the maximum amount of spectrum that the applicant was assumed to lose if there was a new entrant, the general results of the Study and those related specifically to the applicant[20].  The same applied to the other MNOs.  Each was informed about how the network information it provided to the Consultant had been deployed in the assessment model and was provided with findings specific to each of them under the different scenarios referred to in the Study.  But none of them was given corresponding information and specific findings in respect of the other MNOs, so none was privy to the confidential information provided by other MNOs.

64.  The applicant had sought disclosure of the full unredacted version of the Plum Report in February 2017 when the redacted report was published.  The Authority refused the applicant’s request and provided reasons for its refusal, which included the fact that the Study contained input and findings based on commercially sensitive operational information of individual MNOs.  The applicant did not bring proceedings to challenge this refusal decision at the time.  The disclosure application, seeking essentially the same documents, was only made a month after the Form 86 was issued.

65.  The Decision being the subject of the application for judicial review was made in the Joint Statement issued on 19 December 2017.  The Consultant’s Response to the comments received in the submissions to the Second Consultation was published on the same date.  Relevant parts of the Joint Statement have been set out in the earlier part of this judgment.  The Joint Statement is a detailed document giving inter alia a comprehensive account of the consultation process and the approach adopted towards spectrum re-assignment.  The level of transparency and extensive engagement of those involved in the consultation exercise gave a fair and full picture of the decision-making process, unlike the situation in the cases mentioned earlier when the applicant was hampered by the lack of information on the decision-making process when leave was sought to apply for judicial review (R v Barnsley Metropolitan Borough Council, ex parte Hook; Evans; R v Waltham Forest London Borough Council, ex parte Baxter; Quark Fishing Ltd).

66.  The Form 86 issued by the applicant on 19 March 2018 took up 85 pages, excluding appendices.  13 grounds of review were put forward.  Given that detailed and comprehensive grounds have been advanced, there is no good reason why the issues that are before the court in these proceedings for judicial review should not be identified from the grounds in Form 86.  As was said by Zervos J (as he then was) in Zhu Li v The Law Society of Hong Kong [2017] 3 HKLRD 513 at §46: “Given the diversity and breadth of public administration, with its numerous structures and layers, the court’s judicial review jurisdiction needs to be put in perspective and kept in check.”  There is much to be said for the point made by Mr Chan that given the continuing administrative pressures on the court system, and particularly where the decision-making process under challenge is lengthy and complicated (as in the present and increasingly many cases), the importance of a focused (rather than roving) supervisory process is acute.

67.  The only grounds in the Form 86 that could be said to have some connection to the Plum Report are Grounds 2, 3 and 10.  They have been discussed earlier and for the reasons already given, I agree with Chow J that it has not been shown the redacted material would have any relevance to the detailed grounds of challenge.  The applicant has not been able to identify specific issues that are alleged to require further specific disclosure of the particular documents sought, why those issues are relevant, or why it is contended that the information provided hitherto is not adequate to enable the court to resolve the specific issues that arise[21].  We were given to understand that documents voluntarily disclosed by the respondents have taken up more than 20 bundles and this application for judicial review is the heaviest litigation the Authority has to deal with so far, necessitating five days to be set aside for the substantive hearing.

68.  In my view, the disclosure sought was made in the hope of obtaining information to enable the applicant to fashion further grounds of challenge that have not occurred to its legal advisers.  This is a fishing expedition and is not permissible.  I consider that the duty of candour has been fulfilled in this instance in light of the issues that are before the court.  The disclosure sought is not necessary for disposing fairly of the critical issues in these proceedings.

Confidentiality

69.  It is not strictly necessary to consider the sufficiency of the confidentiality ring and how this may impact on the discretion to order disclosure if I had been of the view that the duty of candour had not been fulfilled by the Authority.  In deference to the submissions made, I would endeavour to give my views succinctly.

70.  If it had been necessary to consider the confidentiality ring, I am not persuaded that in carrying out the balancing exercise, the discretion should be exercised in favour of the applicant.  The Authority cannot resort to statutory powers[22] to obtain information in the context of a consultation and relies on the trust and co‑operation of the industry participants.  If the Authority is required to disclose the commercially sensitive information sought by the applicant, this is likely to undermine the MNOs’ trust and confidence based on the assurance that confidential information would not be divulged and may well have a chilling effect on their willingness to co‑operate by providing confidential information in future[23].  There is also the risk of inadvertent disclosure notwithstanding a confidentiality ring limited to the applicant’s external lawyers, external consultants and one in‑house counsel, and the practicality of monitoring the restraint.  It is more prudent to “cause minimum disturbance to that confidence when assessing the requirements of justice in the disclosure of the documents sought” (Tweed, §37).  That was also the view taken by Chow J[24].

Conclusion

71.  For the above reasons, I would dismiss the appeal in CACV 532/2018 and the summons for leave to appeal in CAMP 155/2018.

72.  We have heard submissions on costs.  There is no dispute that costs should follow the event and there should be a certificate for two counsel.  I would make an order that the applicant is to pay the respondents’ costs in CAMP 155/2018 and CACV 532/2018, with a certificate for two counsel.