PCCW-HKT TELEPHONE LTD v. THE TELECOMMUNICATIONS AUTHORITY

FACV No. 14 of 2004

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 14 OF 2004 (CIVIL)

(ON APPEAL FROM CACV NO. 274 OF 2003)

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J U D G M E N T

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Chief Justice Li:

1.  I agree with the judgment of Mr Justice Bokhary PJ and that of Mr Justice Ribeiro PJ.

Mr Justice Bokhary PJ:

2.  Some matters attract automatic suspension pending appeal to the Telecommunications (Competition Provisions) Appeal Board (“the Appeal Board”).  But other matters do not.  Does the Appeal Board have discretionary power to suspend them pending appeal?  That is the question of law before the Court.

3.  Telecommunications in Hong Kong is governed by the Telecommunications Ordinance, Cap. 106 (“the Ordinance”).  Save where otherwise indicated, all my references to sections and subsections will be to its sections and subsections.  In the year 2000 the law was reformed when the Ordinance was amended to introduce competition law provisions.  These provisions empower the Telecommunications Authority (“the Authority”) to issue opinions, determinations, directions and decisions.  They also empower him to impose sanctions and remedies.  The Ordinance creates the Appeal Board, and provides for an appeal to the Appeal Board against such opinions, determinations, directions, decisions, sanctions and remedies (which the Ordinance calls “appeal subject matter”). 

4.  At the material time the right of appeal to the Appeal Board was dealt with in s.32N(1).  Since then subsections (1A), (1B) and (1C) have been added.  So the first four subsections of s.32N now read:

“(1) Any person aggrieved by -

(a) an opinion, determination, direction or decision of the Authority relating to -

(i) section 7K, 7L, 7M or 7N; or

(ii) any licence condition relating to any such section; or

(b) any sanction or remedy imposed or to be imposed under this Ordinance by the Authority in consequence of a breach of any such section or any such licence condition,

may appeal to the Appeal Board against the opinion, determination, direction, decision, sanction or remedy, as the case may be, to the extent to which it relates to any such section or any such licence condition, as the case may be.

(1A) Any carrier licensee aggrieved by an opinion, direction or decision of the Authority published under section 7P(14) may appeal to the Appeal Board against the opinion, direction or decision (but the licensee may so appeal only if the opinion, direction or decision was formed, issued or made in respect of the licensee).

(1B) Any person who -

(a) is, in relation to a change referred to in section 7P(1), an interested person within the meaning of paragraph (a) of the definition of ‘interested person’ in section 7P(18); and

(b) is aggrieved by an opinion or direction of the Authority published under section 7P(14)(a) in respect of the change,

may appeal to the Appeal Board against the opinion or direction.

(1C) Any person who -

(a) is, in relation to a proposed change referred to in section 7P(6), an interested person within the meaning paragraph (b) of the definition of ‘interested person’ in section7P(18); and

(b) is aggrieved by an opinion, decision or direction of the Authority published under section 7P(14)(b) in respect of the proposed change,

may appeal to the Appeal Board against the opinion, decision or direction.”

Sections 7K, 7L, 7M and 7N are directed against anti-competitive practices, abuse of position, misleading or deceptive conduct and discrimination respectively.  And s.7P deals with changes in relation to carrier licensees. 

5.  As to suspension pending appeal, s.32N now provides that:

“(2) Subject to subsection (3), an appeal shall not suspend the operation of the appeal subject matter.

(3) Where an appeal is made and the appeal subject matter falls within subsection (1A), (1B) or (1C) or section 36C, then the appeal subject matter shall be suspended in its operation from the day on which the appeal is made until the appeal is determined, withdrawn or abandoned.”

Subsection (2) has not been amended at all.  The only amendment to subsection (3) since the material time consists of the addition of the words “subsection (1A), (1B) or (1C) or”.  Those three additional subsections, namely (1A), (1B) and (1C), are concerned with s.7P.  So they deal with changes in relation to carrier licensees.  Section 36C deals with financial penalties. 

6.  This case does not concern any change in relation to any carrier licensee.  Nor does it concern any financial penalty.  So no automatic suspension is involved.  Hence the question whether the Appeal Board has a discretion to suspend pending appeal.  This question arises in the following circumstances.

Appeal Board holds that it has no discretion to suspend pending appeal. 

7.  The appellant company (which I will call “PCCW”) holds a Fixed Telecommunications Networks Services licence issued under the Ordinance.  Section 36B deals with the Authority’s power to issue directions to licensees and others.  It reads:

“(1) Subject to subsection (2), the Authority may issue directions in writing-

(a) to a licensee requiring it to take such action as the Authority considers necessary in order for the licensee to-

(i) comply with any of the terms or conditions of its licence; or

(ii) comply with any provision of this Ordinance or any regulation made thereunder; or

(iii) in relation to any interconnection of the type mentioned in section 36A(3D), secure the connection of any telecommunications service being the subject of its licence to-

(A) any other telecommunications service being the subject of a licence granted under this Ordinance or of an order made under section 39; or

(B) a system of the description mentioned in section 8(4)(e); or

(C) a closed circuit television system of the description mentioned in section 8(4)(f); and

(D) (Repealed 40 of 1995 s. 9)

(b) to any person being the operator of-

(i) a system of the description mentioned in section 8(4)(e); or

(ii) a closed circuit television system of the description mentioned in section 8(4)(f); or

(iii) a telecommunications service being the subject of an order under section 39.

requiring that person to take such action as the Authority considers necessary in order to secure, in relation to any interconnection of the type mentioned in section 36A(3D), the connection of any such system, closed circuit television system or telecommunications service to-

(A) any telecommunications service provided by a licensee under this Ordinance; or

(B) any other system of the description mentioned in section 8(4)(e); or

(C) any other closed circuit television system of the description mentioned in section 8(4)(f); or

(D) any other telecommunications service being the subject of an order made under section 39.

(E) (Repealed 40 of 1995 s.9)

and the licensee or such person shall give effect to such direction.

(2) No direction shall be so issued under subsection (1)(a)(iii) or (b), unless the Authority is satisfied that the licensee or such person has been afforded reasonable opportunity to make representations to the Authority.”

8.  On 15 May 2002 the Authority issued a direction under s.36B(1)(a)(iii) requiring PCCW to supply unbundled local loops to a competitor.  PCCW appealed to the Appeal Board against this direction.  Not unnaturally PCCW desired that the direction be suspended pending appeal.  It began by applying to the Appeal Board for a suspension of about a week.  This would be an interim suspension pending a decision by the Appeal Board on whether there should be a suspension until the determination of the appeal.  Opposing suspension, the Authority submitted that the Appeal Board has no discretion to suspend. 

9.  Section 32O(1)(b) provides that questions of law before the Appeal Board shall be determined by its Chairman or Deputy Chairman.  By a judgment dated 15 July 2002 the Chairman of the Appeal Board (Mr John Griffiths SC) accepted the Authority’s submission.  So an interim suspension was refused with costs against PCCW.  But Mr Griffiths indicated that he would have favoured an interim suspension if there were power to order one. 

Court of Appeal agrees

10.  Appeals lie from the Appeal Board to the Court of Appeal on questions of law by way of case stated.  Such appeals are provided for by s.32R.  PCCW appealed to the Court of Appeal on two questions of law.  The first was one which the Appeal Board decided on 12 July 2002 and gave reasons for on the 29^th of that month.  That question does not concern us.  We are only concerned with the second question, namely whether the Appeal Board has a discretion to suspend pending appeal. 

11.  By a judgment dated 8 July 2004 the Court of Appeal (Ma CJHC, Rogers VP and Le Pichon JA) declared that the Appeal Board has no discretion to suspend pending appeal.  They awarded PCCW half its costs.  On 26 November 2004 they granted PCCW leave to appeal to us to seek a declaration that the Appeal Board has a discretion to suspend pending appeal.  The costs of that application for leave to appeal was made costs in the appeal to us.

Appeal Board’s reasoning

12.  In arriving at his conclusion that the Appeal Board has no discretion to suspend pending appeal, Mr Griffiths reasoned along lines which may be outlined thus.  As we have seen, s.32N provides that “[s]ubject to subsection (3), an appeal shall not suspend the operation of the appeal subject matter”.  Mr Griffiths found this wording ambiguous.  It could, in his view, mean that there was no automatic suspension save as provided by subsection (3).  Or it could, in his view, mean that the Appeal Board is forbidden from granting a discretionary suspension for cause.  To resolve the ambiguity as he saw it, he looked at the Legislative Council proceedings in respect of the competition law amendments to the Ordinance.  He resorted to such Legislative Council materials as an aid to statutory construction, proceeding on his view of the application in Hong Kong of the approach favoured by a six : one majority of the House of Lords inPepper v. Hart [1993] AC 593.  Having done so, he concluded that the “legislative intention” of s.32N(2) is “to prevent the Board at any stage of an appeal granting a stay”.

13.  He then turned to s.32O(7) which provides that:

“ The Chairman may determine any matter of practice or procedure relating to the hearing of appeals where no provision governing such matter is made in this Ordinance or in regulations made thereunder.”

No regulation has been made in regard to suspension.  Mr Griffiths took the view that absent s.32N(2) the Appeal Board would have had a discretion under s.32O(7) to suspend pending appeal but that s.32N(2) “overrides” such power under s.32O(7).

Court of Appeal’s reasoning

14.  The Court of Appeal gave a single reason for holding that the Appeal Board has no discretion to suspend pending appeal.  In a judgment with which Rogers VP and Le Pichon JA agreed, Ma CJHC said that s.32N(2) “seems, on its clear language, to refer simply to the question whether an appeal will stay the appeal subject matter, irrespective of the stay being automatic or discretionary”.

PCCW’s submissions summarised

15.  PCCW’s printed case contains a helpful summary of its submissions.  This summary is to the following effect: -

(a) As a judicial tribunal established by the legislature to determine appeals from the Authority, the Appeal Board would, in the absence of an express prohibition, have an implied discretion to suspend the operation of matters appealed against pending the determination of the appeal against them.  It requires clear and unambiguous wording to exclude such implied power.

(b) Alternatively, in the absence of an express prohibition, s.32O(7) confers such a discretion on the Appeal Board.

(c) Section 32N(2) does not prohibit discretionary suspension pending appeal.  This subsection should be read consistently with subsections (1) and (3) and in the context of Part VC of the Ordinance dealing with appeals to the Appeal Board and then on law to the Court of Appeal.  So read, subsection (2) is plainly directed to excluding automatic suspension pending appeal of appeal subject matter not covered by subsection (3), and does not address discretion to suspend such matters pending appeal.  Alternatively, subsection (2) is not so clear as to exclude the implied and/or express power to suspend pending appeal.

(d) The absence of any discretion in the Appeal Board to suspend pending appeal:

(i) could lead to injustice since the exercise of the Authority’s extensive powers under the Ordinance is capable of causing significant damage without any right to compensation for the injured party if the Authority’s order is subsequently set aside; and/or

(ii) amounts to, contrary to art. 35 of the Basic Law and art. 10 of the Bill of Rights, a disproportionate restriction on the aggrieved party’s right to an effective remedy.

Section 32N(2) should be construed so as to avoid such injustice and encroachment upon fundamental rights.

(e) Even if the strict conditions for admissibility of Legislative Council materials under the Pepper v. Hart approach are satisfied, that approach should not be applied in Hong Kong so as to:

(iv) permit the government to rely on such materials to interpret a statutory provision in its own favour and against a private party or

(v) permit reliance on papers before or a report of the Legislative Council’s Bills Committee.

(f) If s.32N(2) bars discretionary suspension pending appeal, then it is unconstitutional.

Authority’s submissions summarised

16.  As summarised in his printed case, the Authority’s submissions are to the following effect:-

(a) The Appeal Board has no express discretion to suspend pending appeal.

(b) Nor does it have inherent or implied power to do so.

(c) Section 32N(2) on its true construction expressly provides that the Appeal Board shall have no power to suspend pending appeal.

(d) If necessary, Bills Committee papers may be resorted to for the purpose of ascertaining the legislative intent of s.32N(2) to resolve any ambiguity in it.

(e) Section 32N(2) is not inconsistent with art. 35 of the Basic Law or art. 10 of the Bill of Rights.

17.  In his supplemental printed case the Authority puts forward a submission based on s.46 of the Interpretation and General Clauses Ordinance, Cap. 1, which reads:

“Where any Ordinance confers power upon any person to make, grant, issue or approve any proclamation, order, notice, declaration, instrument, notification, licence, permit, exemption, register or list, such power shall include power-

(a) to amend or suspend such proclamation, order, notice, declaration, instrument, notification, licence, permit, exemption, register or list;

(b) to substitute another proclamation, order, notice, declaration, instrument, notification, licence, permit, exemption, register or list for one already made, granted, issued or approved;

(c) to withdraw approval of any proclamation, order, notice, declaration, instrument, notification, licence, permit, exemption, register or list so approved; and

(d) to declare the date of the coming into operation, and the period of operation, of any such proclamation, order, notice, declaration, instrument, notification, licence, permit, exemption, register or list.”

The submission is to the following effect.  A person aggrieved by a direction made by the Authority can apply to him for a suspension of the direction pending appeal.  If the Authority refuses to suspend, his refusal can be challenged by way of judicial review.  Therefore there would be an avenue by which to seek suspension pending appeal even if the Appeal Board had no discretion to suspend pending appeal. 

18.  The oral arguments ably presented by Mr Peter Roth QC for PCCW and Ms Teresa Cheng SC for the Authority were directed mainly to the questions of whether a discretion to suspend pending appeal is expressly prohibited and, if not, whether such a discretion is to be implied.

Use of Legislative Council materials

19.  Each in its own way, both sides seek to place reliance on things said in the legislature during the passage of the legislation under consideration in the present case. 

20.  It has been clear at least since the decision of the Full Court in Elson-Vernon Knitters Ltd v. Sino-Indo-American Spinners Ltd [1972] HKLR 468 that the Objects and Reasons or Explanatory Memorandum annexed to a Bill is admissible for the purpose of ascertaining the mischief which the proposed statute was intended to remedy.  Explanations given by Ministers when introducing a Bill are also admissible for that purpose.  But to treat ministerial statements about the meaning and effect of proposed legislation as reflecting the will of the legislature would go beyond using such statements to ascertain the mischief against which a statute is aimed.  Lord Millett NPJ, with whom the other members of this Court agreed, said this in Director of Lands v. Yin Shuen Enterprises Ltd (2003) 6 HKCFAR 1 at p.15 F-H:

“Such evidence is admissible for a limited purpose only, to enable the Court to understand the factual context in which the statute was enacted and the mischief at which it was aimed. This is not the same as treating the statements of the executive about the meaning and effect of the statutory language as reflecting the will of the legislature. Within the permissible limits, however, the admissible evidence is not confined to the Explanatory Memorandum of Objects and Reasons, but must logically extend to explanations given by Ministers when introducing the Bill.”

21.  Pepper v. Hart relaxed the rule excluding reference to Parliamentary materials as an aid to statutory construction.  The relaxed rule is to be found in Lord Browne-Wilkinson’s speech at p.640 B-C.  It permits reference to Parliamentary materials

“where (a) legislation is ambiguous or obscure, or leads to an absurdity; (b) the material relied upon consists of one or more statements by a Minister or other promoter of the Bill together if necessary with such other Parliamentary material as is necessary to understand such statements and their effect; (c) the statements relied upon are clear.”

As it happens, a more modest relaxation than that would have been enough to permit reference to the Parliamentary materials there in question.  At p.616G Lord Bridge of Harwich said that those materials raised

“an acute question as to whether it could possibly be right to give effect to taxing legislation in such a way as to impose a tax which the Financial Secretary to the Treasury, during the passage of the Bill containing the relevant provision, had, in effect, assured the House of Commons it was not intended to impose.”

So relaxation could have been limited to ministerial assurances to the legislature that proposed legislation was not meant to create a particular impost.  I have no difficulty with that limited relaxation.  But more adventurous use of ministerial statements about the meaning and effect of proposed legislation would give rise to practical, conceptual and constitutional problems.  The practical problem was discussed by Lord Hoffmann in Robinson v. Secretary of State for Northern Ireland [2002] N1 390 at paras 39-40.  And the conceptual and constitutional ones were discussed by Lord Hobhouse of Woodborough in Robinson’s case at para. 65 and by Lord Nicholls of Birkenhead in Wilson v. First County Trusts Ltd (No. 2) [2004] 1 AC 816 at p.841 B-F.

Statements relied upon

22.  I turn now to the Legislative Council materials cited in the Authority’s printed case.  They consist of three statements.  The first is contained in a paper dated 20 April 2000 presented by the Information Technology and Broadcasting Bureau to the Bills Committee on the Telecommunication (Amendment) Bill 1999.  This is the Bill which led to the amendment of the Ordinance by the introduction of competition law provisions.  The statement in this paper reads:

“The proposal now put forward must strike a balance in ensuring that theappeal board mechanism meets our policy objective and that the appeal channel will not be susceptible to abuse. Therefore, while we propose to empower the Board to review the merits of [the Authority’s] decisions, the opinion, decision, direction and determination which is being appealed against should not be subject to suspension by the Appeal Board as an interim relief, with the exception for the penalties and remedies which [the Authority] may impose under the new section 36C.” (Underlining in the original.)

23.  The second statement consists of the preamble to a question raised by the Bills Committee’s Chairman the Hon. Sin Chung-Kai at its meeting on 27 April 2000.  We do not have a transcript of the actual words used, but as noted in the minutes of that meeting, this statement reads:

“Noting that proposed section 32N(2) and (3) provided that decisions of [the Authority] would not be subject to suspension except for thepenalties and remedies imposed under proposed section 36C, theChairman enquired whether [the Authority] would be liable in any action for damages if his decision was subsequentlyquashed by the Appeal Board.”

24.  As for the third statement, it is contained in a paper dated May 2000 prepared by the Legislative Council Secretariat.  This paper’s purpose is to report to the House Committee on the Bills Committee’s deliberations.  The statement in this paper reads:

“Whilst maintaining that the Bill meets the fair hearing requirement under the relevant human rightslegislation, the Administration has agreed, as a matter of policy, to provide under the Bill a Telecommunications (Competition Provisions) Appeal Board (the Appeal Board) to hear appeals against [the Authority’s] opinions and decisions, determinations and directions under proposed sections 7K, 7L, 7M or 7N relating to competition matters, as well as thefinancial penalties/remedies imposed by [the Authority] under proposed section 36C. In order to ensure that the appeal mechanism meets its policy objective and will not be susceptible to abuse, it has been proposed that while the Appeal Board can review themerits of [the Authority’s] decisions/opinions, such decisions/opinions should not be suspended as an interim relief, with the exception of the penaltiesand remedies imposed by [the Authority] under proposed section 36C.”

25.  The Authority’s printed case asserts that “[a]ny doubt about the effect of section 32N(2) is dispelled by the Bills Committee papers”.  (Emphasis supplied).

26.  In regard to the first statement, let us assume that the Information Technology and Broadcasting Bureau is to be regarded as the promoter of the Bill.  Is its statement clear?  Saying without more that matters appealed against “should not be subject to suspension by the Appeal Board as an interim relief” seems to be saying that the Appeal Board should not have discretionary power to suspend pending appeal.  But that is not said without more.  It is followed by the words “with the exception for the penalties and remedies which the TA may impose under the new section 36C”.  That cannot be about a discretion to suspend pending appeal.  It can only be about automatic suspension.  If there is anything about the first statement which is clear, it is that it is about when automatic suspension arises and when it does not.  The first statement cannot be put forward as a clear statement that the Appeal Board will not have a discretion to suspend pending appeal.  Therefore, on any view of the Pepper v. Hart principle, the first statement is of no assistance to the Authority. 

27.  Neither the second nor the third statement is by a minister or other promoter of the Bill in question.  Indeed neither is even a statement to the legislature.  The second statement was by a legislator in committee.  As for the third statement, it is an internal communication by which the legislature’s secretariat reported one committee’s deliberations to another committee.  Even ignoring any other objection to their being used in aid of construction, neither of these statement can be brought within the Pepper v. Hart principle on any view of that case.  On any view of that case, therefore, none of the Legislative Council materials relied upon by the Authority is admissible in regard to the Ordinance’s effect. 

28.  In Lam Pak Chiu v. Tsang Mei Ying (2001) 4 HKCFAR 34 at p.44 D-E this Court expressly left open the question of whether, and if so to what extent, the approach favoured by the majority of the House of Lords in Pepper v. Hart is appropriate for Hong Kong.  I would continue to leave that question open.

No provision expressly prohibiting discretionary suspension

29.  I am unable to accept the Authority’s submission that s.32N(2) expressly provides that the Appeal Board shall have no power to suspend pending appeal.  To say that “an appeal shall” suspend would necessarily bring about an automatic suspension pending appeal.  But saying that “an appeal shall not” suspend can mean no more than that there will be no automatic suspension pending appeal.  After all if a tribunal exercises a discretion to suspend, it would be the tribunal and not the appeal that suspends ¾ in other words, does the suspending.  Suspension brought about by an event is by its nature automatic while suspension ordered by a tribunal is by its nature discretionary. 

30.  Mr Roth places some, but by no means sole, reliance on a statement by the Secretary for Information Technology and Broadcasting at the second reading of the Telecommunication (Amendment) Bill 1999.  The Secretary said that “[t]o avoid abuse of the appeal mechanism which would frustrate the decisions of [the Authority], all matters involved in the appeal will not be suspended, with the exception of the decision on penalties.”  This statement, Mr Roth submits, shows that the mischief against which s.32(N)(2) combats is abuse of automatic suspension.  I do not find the statement sufficiently clear to be helpful.  But what Mr Roth cannot get from the statement, he gets by the following process of reasoning.  Automatic suspension can be abused by filing hopeless appeals in order to put off the day when the Authority’s directions have to be complied with.  Where suspension is automatic, such appeals can do that unless and until summarily dismissed as manifestly abusive.  A discretion to suspend, on the other hand, is not open to such abuse.  It would involve the Appeal Board taking a view of the appeal’s prospect of success.  And it would involve the Appeal Board balancing all relevant considerations for and against suspension.  As I observed in Anglo Starlite Insurance v. The Insurance Authority [1992] 2 HKLR 31 at p.36, discretionary powers of this kind “will not paralyse administrative action”.

31.  For the foregoing reasons, I am of the view that there is no provision in the Ordinance expressly prohibiting discretionary suspension. 

Nor any expressly permitting it

32.  Nor, in my view, is there any provision therein expressly permitting it.  I take this view for the following reasons.

33.  Section 32O(7) is put forward by  PCCW as such a provision.  As I noted earlier, it reads:

“The Chairman may determine any matter of practice or procedure relating to the hearing of appeals where no provision governing such matter is made in this Ordinance or in regulations made thereunder.”

Mark the words “the hearing of”.

34.  It was said very long ago in England (by Lush LJ in Poyser v. Minors (1881) 7 QBD 329 at p.333).  And it was adopted long ago in Hong Kong (by Reece J in Li Tse Cho (No.3) v. Ching Hua Co. (HK) Ltd [1961] HKLR 201 at p.206).  Practice, like procedure, denotes

“the mode of proceeding by which a legal right is enforced, as distinguished from the law which gives or defines the right, and which by means of the proceeding the Court is to administer the machinery as distinguished from its product.”

Suspension pending appeal is a matter of practice or procedure.  But it relates to appeals, not the hearing of appeals.  As we have seen, s.32O(7) deals with “practice or procedure relating to the hearing of appeals”.  It gives the Chairman power to determine matters of practice or procedure which arise or may arise during the hearing of appeals.  It is highly unlikely that the legislature would vest the power to suspend in the Chairman rather than in the Appeal Board.  So s.32O(7) is not concerned with suspension pending appeal.

Is there implied power of discretionary suspension?

35.  There being nothing express one way or the other, the question whether the Appeal Board has a discretion to suspend pending appeal boils down to this.  Does it have implied power of discretionary suspension?

36.  Absent express power of a particular kind, a question can arise as to whether a superior court has inherent power of that kind.  In regard to an inferior court or tribunal, the equivalent question is whether there is such implied power.  And the correct test for determining whether an inferior court or tribunal has an implied power is, in my view, the one articulated by Dawson J in Grassby v. R (1989) 168 CLR 1 at p.17 and accepted by the other members of the High Court of Australia hearing that appeal.  It comes to this.  An inferior court or tribunal has such ancillary powers as are derivable by statutory implication and are required for the effective exercise of jurisdiction expressly conferred upon it.  This is the governing proposition in the present case since the Appeal Board is an inferior tribunal in the jurisdictional sense although of course not in any pejorative sense.

37.  It is instructive to observe how the test operated in Grassby’s case itself.  The question there was whether a magistrate hearing committal proceedings under New South Wales’ Justices Act 1902 had implied power to stay the proceedings as an abuse of process.  Section 41(6) of that Act provided as follows:

“When all the evidence for the prosecution and any evidence for the defence have been taken, the Justice or Justices shall, after considering all the evidence before the Justice or Justices -

(a) if of the opinion that, having regard to all the evidence before the Justice or Justices, a jury would not be likely to convict the defendant of an indictable offence - forth­with order the defendant to be discharged as to the information then under inquiry; or

(b) if not of that opinion - commit the defendant for trial.”

Their Honours unanimously held that a magistrate had no implied power to stay committal proceedings as an abuse of process.

38.  Why their Honours so held is easy to understand.  At p.18 Dawson J gave these reasons (with which Mason CJ and Brennan and Toohey JJ agreed):

“There is no room in the face of these statutory obligations, couched as they are in mandatory terms, for the implication of a discretionary power to terminate the proceedings in a manner other than that provided. Nor is this surprising. True it is that a person committed for trial is exposed to trial in a way in which he would otherwise not be, but the ultimate determination whether he does in fact stand trial does not rest with the magistrate. The power to order a stay where there is an abuse of the process of the trial court is not to be found in the committing magistrate and the considerations which would guide the exercise of that power have little relevance to the function which the magistrate is required to perform. Having regard to the exceptional nature of the occasions upon which the prosecution of an offence will amount to an abuse of the process of the court trying that offence, oppression arising from, and confined to, the committal process itself is difficult to conceive.”

39.  The decision in Grassby’s case did not deprive committing magistrates of any power required for the effective exercise of their express jurisdiction.  As Deane J pointed out at p.6:

“If the magistrate is of the view that, having regard to all the evidence, a prosecution in the Supreme Court would be permanently stayed as an abuse of the process of that court, he or she would, in my view, necessarily be of the opinion that a jury would not be likely to convict the defendant of an indictable offence if a committal order were made.”

And that would, by virtue of s.41(6)(b) of the 1902 Act, result in the defendant’s discharge as to the information under inquiry.

40.  Another decision of the High Court of Australia on powers by necessary implication is Pelechowski v. Registrar, Court of Appeal (NSW) (1999) 198 CLR 435.  At p.452 Gaudron, Gummow and Callinan JJ said in their joint judgment that in this context the term “necessary” is to be understood in the sense ascribed to it by Pollock CB in Attorney-General v. Walker (1849) 3 Ex 242 at pp 255-256; 154 ER 833 at pp 838-839.  The term, their Honour said and I agree, connotes what is “reasonably required”.

41.  An example of powers being implied for an inferior court is to be found in the decision of the English Court of Appeal in Bodden v. Metropolitan Police Commissioner [1990] 2 QB 397.  It concerned s.12(1) and (2) of the Contempt of Court Act 1981.  Those subsections read:

“(1) A magistrates' court has jurisdiction under this section to deal with any person who - (a) wilfully insults the justice or justices, any witness before or officer of the court or any solicitor or counsel having business in the court, during his or their sitting or attendance in court or in going to or returning from the court; or (b) wilfully interrupts the proceedings of the court or otherwise misbehaves in court.

(2) In any such case the court may order any officer of the court, or any constable, to take the offender into custody and detain him until the rising of the court; and the court may, if it thinks fit, commit the offender to custody for a specified period not exceeding one month or impose on him a fine not exceeding [£1,000], or both.”

42.  It was submitted that the power to order a person’s detention under subsection (2) did not include a power to order that he be brought before the magistrate.  Nor, it was also submitted, did it include a power to inquire into the circumstances of the interruption for the purpose of deciding whether he had acted wilfully.  Both submissions were rejected.  At p.405 F-G Beldam LJ ¾ with whose judgment Lord Donaldson of Lymington MR and Woolf LJ (later Lord Woolf CJ) agreed ¾ said this:

“In giving the magistrates' court jurisdiction to deal with the different kinds of contempt referred to in section 12(1)(a) and (b), Parliament obviously intended to confer all incidental powers necessary to enable the court to exercise the jurisdiction in a judicial manner.”

43.  An example going the other way is the decision of the Supreme Court of New South Wales (Current Jurisdiction) in Road and Traffic Authority v. Hayek [2004] NSWSC 575.  It concerned the statutory jurisdiction of magistrates to hear appeals against administrative orders suspending authority to examine vehicles.  Was the jurisdiction to hear appeals against such orders attended by an implied power to stay them pending appeal?  The court said that hardship to those against whom such orders were made was not the paramount consideration.  There was public safety to consider.  In the result, it was held that magistrates had no implied power to stay such orders pending appeal.

44.  The question before the Court in the present case concerns those matters which can be appealed to the Appeal Board but do not attract automatic suspension pending appeal.  It boils down to this.  Section 32O(4) expressly confers upon the Appeal Board jurisdiction to determine appeals by upholding, varying or quashing appeal subject matters and by making such consequential orders as may be necessary.  Is a discretion to suspend such matters pending appeal an ancillary power, derivable by statutory implication, that the Appeal Board requires for the effective exercise of the jurisdiction expressly conferred upon it? 

45.  Where an order has been rightly made, considerable disadvantage can result from its suspension pending an eventually unsuccessful appeal against it.  On the other hand, considerable loss can be caused by an order that was wrongly made but operated until set aside on appeal.  An avenue of appeal against a regulator’s orders is not meant to paralyse the regulator’s activities.  But it is meant to provide an effective remedy for appellants.  Where suspension pending appeal is not automatic, any discretion to suspend pending appeal would be exercised by an appellate tribunal with both of those considerations kept carefully in mind. 

46.  One extreme would be to say that a discretion to suspend pending appeal is always an ancillary power, derivable by statutory implication, that every appellate tribunal requires for the effective exercise of the jurisdiction expressly conferred upon it.  The opposite extreme would be to say that such a discretion is never an ancillary power, derivable by statutory implication, that any appellate tribunal requires for the effective exercise of the jurisdiction expressly conferred upon it.  Neither extreme is acceptable.  Whether a power to suspend pending appeal is to be implied must depend on the entire context of each situation.

47.  If an appeal subject matter has not been suspended pending appeal, failure to act in conformity with it pending appeal can have serious consequences.  The present case itself illustrates that well.  As we have seen, it is provided at the end of s.36B(1) that where the Authority has issued a direction to a licensee or other person “the licensee or such person shall give effect to such direction”.  Failure to do so would therefore be a contravention of the Ordinance.  And under s.34(4) contravention of the Ordinance by a licensee can result in his licence being suspended for up to 12 months or even being cancelled.

48.  The matters appealable to the Appeal Board, including those which do not attract automatic suspension pending appeal, can have a heavy impact.  They can involve complex issues of law and fact.  The Appeal Board has power to receive oral evidence.  Considerable time can elapse before the Appeal Board reaches a decision.  And although appellate, the hearing by the Appeal Board would be the first hearing that an appellant gets.

49.  Judicial review of a refusal by the Authority to suspend under s.46 of the Interpretation and General Clauses Ordinance would not fulfil the function of a discretion in the Appeal Board to suspend pending appeal.  The Ordinance provides for a full merits appeal to the Appeal Board.  It would be cumbersome and less efficient for suspension pending appeal to be decided by a body other than the one which will hear the appeal.  It is the appellate tribunal itself that would be best placed: to take a view of the appeal’s prospect of success; to balance all relevant considerations for and against suspension pending appeal; and to work out any terms on which such suspension is to be ordered. 

50.  The foregoing represents the context in which the Court has to answer the question of whether a discretion to suspend pending appeal is an ancillary power, derivable by statutory implication, that the Appeal Board requires for the effective exercise of its express jurisdiction of a full merits appeal.  Answering this question in its context, I answer it in the affirmative.  So PCCW succeeds before one reaches its submission on unconstitutionality.

Result

51.  For the foregoing reasons, I would allow the appeal to declare that the Appeal Board has a discretion to suspend pending appeal.  It being common ground that the costs of this appeal should follow the event, I would award PCCW its costs of this appeal including of course the costs of the leave application which the Court of Appeal made costs in this appeal.  There being no common ground as to the costs before the Chairman of the Appeal Board and the balance of PCCW’s costs in the Court of Appeal, I would direct that such costs be dealt with by the Court on paper upon written submissions to be provided by the parties within 21 days.

Mr Justice Chan PJ:

52.  I agree with the judgment of Mr Justice Bokhary PJ and the judgment of Mr Justice Ribeiro PJ.

Mr Justice Ribeiro PJ:

53.  I have had the benefit of reading in draft the judgment of Mr Justice Bokhary PJ and respectfully agree with it.  In my view, the points arising turn on the construction of the Ordinance without any need to consider extrinsic legislative materials or questions concerning fundamental rights.

54.  The first question is whether, as Mr John Griffiths SC (sitting as chairman of the Appeal Board) and the Court of Appeal found, s.32N(2) prohibits the Board from granting a stay of a direction given by the Authority pending an appeal to the Board against that direction.  Section 32N(2) states:

“(2) Subject to subsection (3), an appeal shall not suspend the operation of the appeal subject matter.”

55.  But this provision says nothing about the powers of the Board in relation to the grant of a stay.  It is concerned with the legal consequence of “an appeal” which, in the context, means “making an appeal” or “lodging notice of an appeal” as indicated by subsections (3) and (4) which, at the material time, provided as follows:

“(3) Where an appeal is made and the appeal subject matter falls within section 36C, then the appeal subject matter shall be suspended in its operation from the day on which the appeal is made until the appeal is determined, withdrawn or abandoned.

(4) A person who wishes to make an appeal shall, not later than 14 days after he knows, or ought reasonably to have known, of the proposed appeal subject matter, lodge a notice of appeal with the Appeal Board.”

56.  Lodging notice of an appeal is the act of the appellant and not of the Board and any s.36C penalty attached to the matter appealed against is suspended “from the day on which the appeal is made” until the appeal is disposed of.  The suspension is automatic and there is no need for anyone, in particular, no need for the Board, to order a stay or suspension of the penalty in question.

57.  So, when 32N(2) says that except for cases coming within 32N(3), “an appeal shall not suspend the operation of the appeal subject matter”, it is concerned only with automatic suspension, making it clear that with the exception of s.36C penalty cases, no such automatic suspension occurs simply by reason of the lodging of an appeal. 

58.  Such a rule is not unusual.  Order 59 r 13(1)(a), for instance, is to like effect, stating:

“Except so far as the court below or the Court of Appeal or a single judge may otherwise direct, an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below.”

59.  Accordingly, on its true construction, s.32N(2) does not address and so does not exclude the power to grant a discretionary stay. 

60.  Does such a power exist in the Board either by express provision or by implication?  I agree with Mr Justice Bokhary PJ that the proper approach to implying such a power is that set out in Grassby v. R (1989) 168 CLR 1 at 17, as explained in Pelechowski v. Registrar, Court of Appeal (NSW) (1999) 198 CLR 435: such a power will be implied where it is necessary in the sense of “reasonably required” for the effective exercise of the statutory jurisdiction expressly conferred on the inferior court or tribunal concerned.

61.  The relevant powers in the present case are those conferred on the Board by s.32O(4) for disposing of appeals.  They are powers enabling it to mount a full merits review of the Authority’s decision :

“After hearing an appeal, the Appeal Board shall determine the appeal by upholding, varying or quashing the appeal subject matter and may make such consequential orders as may be necessary.”

62.  It is obvious that a suspension of the Authority’s direction or order may in some cases be essential if the Board’s powers for disposing of the appeal are effectively to be exercised upon determining the appeal.   There can accordingly be no doubt that it is reasonably necessary to imply such a power to enable the Board effectively to carry out its statutory appellate function.

63.  The only policy cited against the Board having such a power is the avoidance of abuse of the appellate process.  But since the implied power to suspend is discretionary, it may be assumed that the Board will refuse any stay application that is abusive.  Prevention of abuse as a policy makes sense in relation to automatic stays.  Section 32N(2) aims to exclude such abuse by making it clear that (with the s.36C exception) merely lodging an appeal does not give rise to any automatic stay.  But a discretion in the Board to suspend operation of an Authority direction pending appeal does not facilitate such abuse.

64.  I agree, for the reasons given by Mr Justice Bokhary PJ, that s.32O(7) does not provide the basis for finding an express power to grant interim stays. 

Sir Anthony Mason NPJ:

65.  I agree with the judgment of Mr Justice Bokhary PJ and the judgment of Mr Justice Ribeiro PJ.

Chief Justice Li:

66.  The Court unanimously allows the appeal to declare that the Appeal Board has a discretion to suspend pending appeal and orders that the costs of this appeal be awarded to PCCW.  The parties are directed to provide written submissions within 21 days as to the costs before the Chairman of the Appeal Board and in the Court of Appeal.