LEUNG FONG WAI FERGUS v. SECRETARY FOR JUSTICE

HCMP 77/2022

[2023] HKCFI 296

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 77 OF 2022

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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 2020 Legislative Council General Election (“2020 Election”) and was required to lodge an election return within a specified period under the Election (Corrupt and Illegal Conduct) Ordinance, Cap 554 (“ECICO”). As matters transpired, he did not do so.

2.  By summons filed on 17 January 2022 as subsequently amended on 5 May 2022, the Applicant seeks permissions under section 40 of the ECICO (1) to submit an election return out of time, and (2) to be exempted from submitting certain invoices or receipts evidencing his election expenses and donations.

3.  The Applicant was represented by Ms Tessa Chan of Counsel who has filed two sets of written submissions on the Applicant’s behalf. The Applicant has also made two affirmations in support of his application.

4.  The Secretary for Justice (“SJ”) was represented by Mr Dickson Heung, Government Counsel. The SJ adopts a neutral stance, but has provided assistance to the Court by filing an affirmation made by the Registration of Electoral Office (“REO”) and written submissions (signed by Mr Heung) to draw the Court’s attention to relevant facts and law.

5.  Having considered all the materials available to this Court, I am satisfied that this application can be dealt with on paper.

6.  This is my Decision.

B.  Background facts

7.  This Application arises from the 2020 Election, which was originally scheduled for 6 September 2020. Due to matters which are now a matter of public knowledge in Hong Kong, the election was eventually postponed to 19 December 2021 (thus becoming the “2021 Election”).

8.  The Applicant was a District Councillor. In June 2020, he publicly announced his intention to run in the 2020 Election, for the Hong Kong Island Geographical Constituency. He submitted his nomination form on 20 July 2020.

9.  However, on 30 July 2020, his nomination was ruled as invalid by the Returning Officer of that constituency. In other words, he was disqualified from running in the 2020 Election.

10.  Nevertheless, under section 2 of the ECICO, the definition of “candidate” covers not only persons who stand as validly nominated candidates, but also to those who have publicly announced their intention to run in the election. As such, the Applicant was still required (a) to lodge an election return to declare his election expenses and donations under section 37(1); and (b) to accompany the return with the invoices and receipts of election expense or donations exceeding certain amount under section 37(2).

11.  Therefore, as at 30 July 2020, and notwithstanding that the Applicant had been disqualified from running in the election, he was still required to lodge an election return with supporting invoices and receipts.

12.  The period within which the return must be lodged is 60 days after either the result of the election is notified in the Gazette, the proceedings for the election are declared to be terminated, or the election is declared to have failed: see the then applicable sections 37(1B) and 37(1C).

13.  However, the applicability of the duties was called into question the next day – 31 July 2020 – when the Government announced that the 2020 Election would be postponed for a year to 5 September 2021. The postponement was unprecedented and not amongst the three triggering events from which the 60 days for a candidate to submit the election return is calculated under section 37(1C).

14.  But on 1 August 2020, the matter was cleared up by the enactment of Emergency (Date of General Election) Seventh Term of the Legislative Council Regulation Cap 241L (“Regulation”) which, in effect, materially operated to institute a new deadline for the submission of election return notwithstanding that none of the triggering events under the original law had occurred. Under the Regulation, candidates for the 2020 Election were required to lodge the election return (with supporting invoices and receipts) within 60 days from 1 August 2020, i.e. on or before 29 September 2020.

15.  The Applicant failed to do so.

16.  The Applicant has explained the reasons for his failure in his two affirmations dated 28 January 2022 and 13 May 2022 respectively.

17.  As said, the Applicant was a District Councillor so he had the experience of running for an election. But this was his first time standing in an election for the Legislative Council. He says he had spent time and effort in familiarizing himself with the legal duties imposed upon a candidate. He had read the “Notes on Completion of Return and Declaration of Election Expenses and Election Donations” and understood his duties for lodging an election return with supporting invoices, receipts, etc. From the time he submitted his nomination form, he started to record his election expenses and donations in electronic spreadsheets. He also started to keep invoices and receipts related to the 2020 Election at his District Councillor’s Office which also served as his office for the 2020 Election. He exhibited a set of Excel spreadsheets with records of donations and expenses up to 31 July 2020 and some invoices and receipts.

18.  However, the Applicant says that after he was disqualified from running in the election on 30 July 2020 and then the subsequent postponement was announced on 1 August 2020, he was under the mistaken belief that his duty as a “candidate” had come to an end. He thought after the invalidation of his nomination, he could no longer be regarded as a candidate at the 2020 Election. He now admits that he was mistaken about the meaning of “candidate” under the relevant election rules and, with the benefit of hindsight, that he probably should have been more prudent and have sought professional advice on this regard. But, when the election was announced to be postponed, there was simply no event to trigger the 60 days’ period within which a candidate must lodge an election return. Since then, he had been put off-guard completely and thought that there would be nothing further related to the 2020 Election which he would have to deal with.

19.  On the same day as the Government announced the postponement, the Applicant was aware that the Electoral Affairs Commission (“EAC”) had also issued a press release, which said that the spokesman of the EAC said that “follow-up arrangements of the postponement such as how candidates calculate election expenses will be announced in due course”. But the Applicant says he thought that was referring to validly nominated candidates only. He refers to the next paragraph in the same press release where the Commission said that “the lots drawing session for candidates to allocate number on ballot papers and online briefing for candidates originally scheduled for August 4 and 6 respectively are cancelled”. He says he knew that the lot-drawing session and the online briefing session were only for validly nominated candidates, and thus he thought any reference to “candidates” in that press release must be referring to validly nominated candidates.

20.  The REO’s affirmation identifies that steps had been taken to remind the Applicant to lodge his election return on or before 29 September 2020. A letter was sent on 14 August 2020 and two reminder emails were issued on 25 and 29 September 2020 respectively.

21.  The Applicant does not dispute that the letter and the reminder emails were sent to him. But he says that it would be his election assistants who would read such letters and emails first, and they would only pass them onto him if they considered it appropriate. The Applicant did exercise supervision by occasionally conducting sample checking. Unfortunately, neither the letter nor the reminder emails were passed to him. He supposes his election assistants also assumed that there would be nothing further for him to deal with after the disqualification and postponement.

22.  He was not aware of the need to lodge the election return until 24 February 2021, when he was interviewed by some ICAC officers for failure to lodge an election return under section 37 of the ECICO. However, before he had time to deal with the failure to lodge an election return, his mind was quickly occupied by another matter.

23.  On 26 February 2021, he received a call from the National Security Department, requesting him to report to them on 28 February 2021 in respect of his suspected breach of what is generally known as the National Security Law. On 28 February 2021, he was charged with the offence of “conspiracy to commit subversion” contrary to Article 22(3) of the National Security Law and the Crimes Ordinance, Cap 200. It is a matter of public knowledge that the Applicant was one of the 47 persons charged for holding or running in the ‘primary election’ of the “pan-democrats” for the 2020 Election. He was brought to the Magistracy on 1 March 2021 and was not granted bail. He has been held in custody ever since.

24.  He says he was physically and mentally exhausted at the time; the charge he faced could lead to a sentence of life imprisonment; and he had no choice but to give priority to deal with the charge under the National Security Law. It was only in about late 2021 that he had the capacity to divert some of his attention to the failure of lodging an election return. He sought legal advice and then started to prepare for this application. The process had taken time because he was on remand throughout, and the application was prepared with the assistance of his friends, family and his former election assistants. Communication was also complicated by the outbreak of Covid-19 which led to tightening of visiting arrangements to the Lai Chi Kok Reception Centre where he was held on remand.

25.  The Applicant’s friends and family only managed to retrieve some of the receipts and invoices for the Applicant’s election expenses and/or donations, but not all. As said, he had been keeping receipts and invoices relating to the 2020 Election at his District Councillor’s Office. But, in January 2021, the office was searched by the Police for suspected offences under the National Security Law. The Applicant understood that the Police targeted materials related to the 2020 Election. In May 2021, the Applicant resigned from the office of District Councillor and his office was then closed and vacated in July 2021. Since he was still in detention on remand, he was unable personally to oversee the vacating process and the relocation of documents inside that office.

26.  The Applicant exhibited such invoices and receipts as retrieved by his family and friends. For those of which that are no longer retrievable, he believes they had been accidentally lost or destroyed during the Police search in January 2021 or the vacating of the office in July 2021, or have otherwise become unavailable due to inadvertence or a reasonable excuse. He confirms on affirmation that he did not deliberately dispose of any of the missing receipts or invoices.

C.  Whether to Grant Relief

27.  The Court has power to allow a candidate to lodge an election return out of time under section 40(1) of the ECICO, and the power to exempt a candidate from the requirement to submit invoices and receipts under section 40(5).

28.  I have summarized the legal principles applicable in the context of seeking relief from the Court under section 40(1) in Tse Wing Chi v Secretary for Justice [2021] HKCFI 3473, at §§18-19. The Court should only exercise its power under section 40(1) if one of the four limbs provided in section 40(2)(a) to (d) is satisfied and there was no bad faith on the Applicant’s part.

29.  The limbs relied upon by the Applicant are that the delay was due to “inadvertence” or “any reasonable cause”. Inadvertence means negligence or carelessness. Hence, where a deliberate decision has been made to exclude an item from an election return, the applicant cannot rely on the inadvertence limb. There is a distinction between a candidate who simply turned a blind eye or acted recklessly as to the legal requirements and a candidate who had tried but failed correctly to understand the legal requirements.

30.  The conditions for the Court to exercise its power under section 40(5) are provided for in section 40(6). The applicant has to show that one of three limbs under section 40(6)(a) to (c) is satisfied and that there was no bad faith.

31.  The limbs relied upon by the Applicant are ‘inadvertence, or an accidental loss or destruction of the invoice/receipt” and “any reasonable cause”. The law applicable in the context of section 40(5) is similar to that relevant to section 40(1).

32.  Whilst every case must be decided on its own facts, Ms Chan for the Applicant submitted that the present case is highly comparable to Tse Wing Chi, where I recognized the exceptional circumstances brought about by the postponement of the 2020 Election and, for the other reasons there relevant, I granted relief to allow the applicant there to lodge an election return out of time. I agree that the overall landscape surrounding the 2020 Election should be factored into the overall assessment for the exercise of the Court’s powers under section 40.

33.  In this case, the original deadline had been missed by more than one year by the time the Applicant took out this application in January 2022. The delay is substantial. But having considered the Applicant’s personal situation against the overall circumstances surrounding the 2020 Election, I am satisfied that this is a proper case to grant relief under sections 40(1) and 40(5).

34.  I am satisfied that the Applicant’s failure to lodge an election return with the relevant invoices and receipts by 29 September 2020 could be attributable inadvertence:

(1)  I accept that the Applicant did take his candidacy seriously, and this is plainly not a case of wholesale disregard. Efforts were made to familiarize himself with the relevant election rules. This is not merely supported by his assertions in the affirmations, but also backed up by documentary evidence including the electronic spreadsheets he had prepared to record his expenses and donations, as well as the invoices and receipts he was still able to retrieve.

(2)  Ignorance of the law is no defence. But the duty to lodge an election return was only made applicable again by the Regulation which was enacted on 1 August 2020. As of the time of the announcement of the postponement, upon the application of the original law, the Applicant’s understanding that none of the events triggering the statutory period for lodging an election return was correct.

(3)  The fact that the Applicant’s nomination for candidacy was invalidated on 30 July 2020 – when viewed against the unprecedented postponement of the election – should also be given some weight in explaining why the Applicant was put off-guard as to any further duties with which he might have to comply as a candidate.

(4)  I have taken into account the reminder letter and emails sent by the REO to the Applicant in September 2020. The Applicant had hired two election assistants who were responsible for filtering his incoming correspondence relating to the 2020 Election, with occasional sample checking by himself. I accept that this is an appropriate system for overseeing his election affairs. The failure of his election assistants to pass the said reminders to him was unfortunate, but when viewed against the entire backdrop could also be properly regarded as inadvertence.

35.  I also accept that the failure to provide some of the invoices and receipts (as particularized in the amended summons) within any period as further extended by the Court could be attributed to inadvertence or a reasonable cause. I accept that some of the invoices or receipts might have been lost or destroyed during the Police search of his District Councillor’s Office in January 2021 and/or the vacating of his office in July 2021. There was not much he could do about the Police search, and he was held on remand when his office was vacated. I accept that any loss or destruction of documents arising from those events could be properly described as inadvertent or attributable to a reasonable cause.

36.  Matters pertaining to the criminal charge now faced by the Applicant only arose after the lodging deadline of 29 September 2021 and thus could not go towards explaining why the deadline was not met. But I have taken that into account in considering the substantial delay in taking out this application. Whilst the legal duties imposed on a candidate to lodge election return is no small matter, given the gravamen of the criminal charge faced by Applicant and that he has been kept in custody since late January 2021, it is understandable that the Applicant would have focused more if not all of his energy and efforts on dealing with the criminal charge and on-going proceedings.

37.  I also accept that there was no bad faith on the Applicant’s part. The total amount of his election expenses, as deposed to by himself, stand at HK$136,177.73, which falls well below the applicable statutory limit of HK$2,661,000 for the Hong Kong Island geographical constituency under section 3(b)(ii) of Cap 554D. Given the entire circumstances, it is difficult to imagine what the Applicant could have gained by not filing an election return.

D.  Disposition

38.  The Applicant’s originating summons (as amended) is granted.

39.  The Applicant agrees to bear reasonable costs of the SJ, who has submitted a statement of costs totalling HK$29,961. Having considered the statement of costs and applying the usual approach to summary assessment, I assess the SJ’s costs to be paid by the Applicant in that sum claimed.