ONSHINE SECURITIES LTD. V. THE STOCK EXCHANGE OF HK LTD.

1993, MP No.1013

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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ONSHINE SECURITIES LTD. V. THE STOCK EXCHANGE OF HK LTD.

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J U D G M E N T

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1. The Applicant is a firm of stockbrokers who have been the subject of Disciplinary proceedings. The decision which they seek to have judicially reviewed is contained in a letter dated the 19th March 1993.

" THE STOCK EXCHANGE OF HONG KONG LTD.

1/F, ONE & TWO EXCHANGE SQUARE, CENTRAL, HONG KONG G.P.O. BOX 8888, HONG KONG.

Our Ref: MD/FC/1360/93

19 March 1993

Onshine Securities Limited 8/F Malahon Centre 10-12 Stanley Street Central Hong Kong

CONFIDENTIAL BY HAND

Attn.: Mr. Li Chi Keung

Dear Sirs

Disciplinary Proceedings

Case No. 62/92

We refer to the disciplinary hearing for the above case before the Disciplinary Committee held on 17 March 1993 attended by your Mrs. Li Wong Hoi Ping.

The Disciplinary Committee, having considered the Compliance Division's Statement of Case dated of their letter dated 19 November 1992, the Compliance Division's supporting documents for the charges which were under the cover of their letter dated 13 November 1992, your statement of defence dated 16 November 1992, your supporting documents for the defence dated 13 November 1992 and the representations of the Compliance Division, your Mrs. Li Wong Hoi Ping and the four affected clients at the hearing, found the following charges against you in that you failed to comply with Rule 601 of the Rules of the Exchange proven :-

(a) that contrary to Rule 604 Onshine has failed to ensure that its employee Yeung Shu Hung acted in the best interest of Onshine's customers;

(b) that contrary to Rule 723(2)(e) Onshine has failed to deliver scrip to its clients;

(c) that contrary to Rule 723(2)(f), in failing to compensate its customers, Onshine is guilty of conduct which may be injurious to the character and interests of the Exchange; and

(d) that contrary to Rule 723(1)(c) Onshine has aided and abetted a breach of Section 50(1C) of the Securities Ordinance by :-

(I) Yeung Shu Hung;

(ii) Chu Moon Sun; and

(iii) Tsang Fook Wan, Samuel

Pursuant to Para. 4.13 of the "Disciplinary Procedures" of the Exchange, you may submit a written plea in mitigation to the Exchange within 5 days of the notification of the verdict, i.e. before 24 March 1993.

The Committee will, based on your plea in mitigation, if any, and if no plea in mitigation is received, based on the information before it, decide on what penalty should be imposed on each charge.

Yours faithfully, For The Stock Exchange of Hong Kong Ltd.

Signed

Fanny Chung Secretary Disciplinary Committee

FC/KC/sw

c.c.	Mr. Alec Tsui
	Securities and Futures Commission Mr. Paul Phenix SEHK"

2. Put very shortly the Applicant's case is that they were approached by 5 individuals who claimed that they could introduce customers to them. They were referred to as "Runners". The idea was that they would operate through a company called Sino Fair Investment Ltd. Each of them introduced their "connections" to the Applicant who would buy and sell shares on the Stock Exchange. In consideration for this the Applicant paid part of the commission payable on the shares to Sino Fair and this would be apportioned among the 5 individuals.

3. It is evident from the Applicant's records that the 5 individuals traded in both their own names and in the names of their "connections".

4. Unfortunately, one of these individuals, Mr. Yeung Shu Hung misappropriated some of the shares purchased by 6 Investors who he had introduced.

5. Four of the 6 Investors commenced legal action against the Applicant for the recovery of their losses. The writ was issued on the 11th June 1991 and I was informed at the hearing before me that the action is set down for hearing in March 1994.

6. At this stage it is important to state that there is no suggestion that the Applicant has been in any way involved in any dishonesty themselves. It is clear that the main issue in the litigation is the status of Yeung at the time of the misappropriations. The Applicants argue that Yeung was not an employee of theirs at the relevant time and they claim that they are in no way liable to reimburse any of the Investors who sustained losses as a result of Yeung's conduct.

7. The Investors made a complaint to the Stock Exchange. As a consequence of this a Decision was made to institute Disciplinary proceedings against the Applicant. To obtain a complete picture of the complaint which is made I can do no better than refer to the short statement of case which was prepared by the Compliance Division of the Stock Exchange.

"COMPLAINT TO THE
DISCIPLINARY COMMITTEE OF

The Stock Exchange of Hong Kong Limited
("the Exchange")

Onshine Securities Limited

Statement of Case

(1) At all material times Onshine Securities Limited ("Onshine") has been a Member of the Exchange trading under broker number 3390.

(2) At all material times Onshine has been registered under Part VI of the Securities Ordinance (Cap. 333) as a dealer.

(3) References below to rules are references to the Rules of the Exchange.

(4) As a Member of the Exchange Onshine has been at all material times bound by the Rules.

(5) The Exchange has received complaints from six of Onshine's customers regarding the conduct of a former runner Yeung Shu Hung ("Yeung") employed by Onshine from January 1990 to December 1990, the basis of which are as follows :-

(a) During the months of June and July 1990, the following six customers entered into a series of transactions through Yeung to purchase securities having a total value in excess of one million dollars (HK$1 million) :-

Mr. Tong Chun Chung

Mr. Ng Hon

Ms. Chan Suk Wah

Mr. Yi Moon Wah

Mr. Wong Chi Hung

Mr. Wong Shiu Cheung

(b) All of the transactions were done on a cash basis.

(c) Commissions in respect of the transactions were paid by Onshine to Yeung

(d) None of the scrip the subject of the transactions was delivered to any of the customers.

(e) Throughout the whole of period he was a runner for Onshine including at the time of the transactions referred at (a), Yeung was registered as an Authorised Clerk with another Member of the Exchange.

(f) Yeung had a margin account with Onshine and the majority of the shares which were not delivered to the six customers appear to have passed through this account.

(g) Yeung was found guilty in respect of summons relating to the short selling to ITC warrants through both Onshine and the Member with which he was registered of and although denied by Onshine it has been alleged by the customers that these shares were sold by Onshine to cover the losses incurred by Yeung in the short selling of ITC warrants.

(h) In August 1992 Yeung was sentenced in the District Court by His Honour Judge Yam to 18 months' jail suspended for 2 years for the theft from one of the complainants, Ms Chan Suk- Wah, of shares worth $198,000.

(i) Onshine has declined to compensate the six customers.

(6) Onshine has denied that it is liable to the six customers because

:-

(i) it never met the complainants; and

(ii) instructions for the purchase were given by Yeung who claimed to be the customers' agent and/or representative.

(7)	(a) During the course of investigations it was revealed that a Mr. Chu Moon Sun and a Mr. Tsang Kwong Shek, Samuel ("Tsang") had also acted as runners of Onshine whilst being employed as Authorised Clerks of other Members.

(b) In respect of Chu, he has been registered with the Securities & Futures Commission as a Dealer's Representative since 14th March 1986. During the period April 1986 to November 1990 he was registered with another Member as an Authorised Clerk but during the period January 1990 and November 1990 acted as a runner for and received commissions from Onshine.

(c) In respect of Tsang, he has been registered with the Securities and Futures Commission as a Dealer's Representative since 18th August 1983 and as the Authorised Clerk of another Member since 1986. During the period January 1990 to May 1991 Tsang acted as a runner for and received commissions from Onshine.

(8) Section 50(1C) of the Securities Ordinance provides inter alia that a dealer's representative shall not act on behalf of any person other than the person specified in the registered in accordance with Section 501(1B) of the Securities Ordinance.

(9) Paragraph 4.3(d) of the Securities and Futures Commission publication "The Fit and Proper Criteria" states that knowingly or negligently aiding or abetting other persons in breaches of the Rules of the Exchange must cast doubt on a person continuing to be fit and proper to remain registered.

(10) Rule 354 states that a Member shall be responsible for all acts done, commitment and contracts entered into by his employees in his business of dealing in securities.

(11) Rule 601 provides that all Members shall strictly comply with and adhere to, inter alia, the Securities Ordinance and the Rules of the Exchange.

(12) Rule 723(1)(c) states that the Exchange's disciplinary powers may be exercised if a Member has been in breach of the Securities Ordinance.

(13) Rule 723(2)(e) states that the Exchange's disciplinary powers may be exercised if a Member has failed to carry out any legal obligation relating to securities.

(14) Rule 723(2)(f) states that the Exchange's disciplinary powers may be exercise against a Member if Member appears to be guilty of conduct which may be injurious to the character and interests as prejudicial to the objects of the Exchange.

IN RESPECT OF THE ABOVE, THE COMPLIANCE DIVISION PREFERS THE FOLLOWING CHARGES AGAINST ONSHINE SECURITIES LIMITED IN THAT IT FAILED TO COMPLY WITH RULE 601:-

(a) that contrary to Rule 604 Onshine has failed to ensure that its employee Yeung Shu Hung acted in the best interest of Onshine's customers;

(b) that contrary to Rule 723(2)(e) Onshine has failed to deliver scrip to its clients;

(c) that contrary to Rule 723(2)(f), in failing to compensate its customers, Onshine is guilty of conduct which may be injurious to the character and interests of the Exchange; and

(d) that contrary to Rule 723(1)(c) Onshine has aided and abetted a breach of Section 50(1C) of the Securities Ordinance by :-

(i) Yeung Shu Hung;

(ii) Chu Moon Sun; and

(iii) Tsang Fook Wan, Samuel

 

Particulars

The Compliance Division repeats Paragraphs (5) to (7).

Compliance Division

The Stock Exchange of Hong Kong Limited

19th October 1992"

8. The Applicant filed a detailed Defence to these charges. Also there was a fairly voluminous exchange of documentation.

9. In view of the fact that the issues framed in the litigation cover very similar ground to the Disciplinary case the Applicant endeavoured to secure the Agreement of the Disciplinary Committee to adjourn the disciplinary hearing until the outcome of HCA 4343/91.

10. Correspondence was exchanged on this subject and the initial hearing date was vacated. The Stock Exchange, however, was anxious to be kept informed of progress in the litigation. It is evident from the correspondence that they were not satisfied that sufficient progress was being made and they insisted upon a hearing taking place on the 17th March 1993. A hearing did take place on that day and Mrs. Li, who represented the Applicant appeared before the Disciplinary Committee which was chaired by Mr. Anthony Neoh, Q.C.

11. It was shortly after this hearing that the letter I referred to at the commencement of this judgment was sent to the Applicant.

12. On the 21st April an application was made for leave to apply for Judicial Review. The Applicants are seeking an order of Certiorari quashing the Decision contained in the letter and a Prohibition enjoining the Disciplinary Committee not to proceed further on the charges until the conclusion of the hearing of HCA 4343/91

13. At the beginning of the hearing before me Mr. Ronny Wong, Q.C. for the Applicant sought leave to amend the grounds upon which the application is being made. This was unopposed and I granted leave.

14. The amended grounds are as follows:

"AMENDED GROUNDS ON WHICH
RELIEFS ARE SOUGHT

1. The said Disciplinary Committee failed to act in accordance with the rules of natural justice or alternatively acted contrary to the Bill of Rights Ordinance in that :-

(a) The "prosecutor" and the "judge" at the said Disciplinary Committee are all members of the Council of the Stock Exchange.

(b) In the course of the disciplinary proceedings, the Applicant was improperly deprived of legal representation.

(c) The identity of the principal witness at the hearing was not revealed to the Applicant and contrary to prior representations to the Applicant no statement of that principal witness was furnished to the Applicant.

(d) No attempt was made to elicit from the witnesses called at the initiation of the Stock Exchange of Hong Kong Limited to produce documents relevant to the Applicant's case and a document tendered by the principal witness had not been revealed to the Applicant prior to the hearing.

(e) The Applicant was led to believe and did believe that cross examination of the witnesses was confined to matters raised in the course of questions posed by the tribunal.

(f) Despite the Applicant's prior intimation of its intention to call 3 witnesses to give evidence on its behalf, no opportunity was given at that hearing for such witnesses to be called.

(g) The representations put forward by the Compliance Division considered by the Disciplinary Committee were not made known to the Applicant and departed fundamentally from the Statement of the Stock Exchange's Case dated 19.10.1992.

2. By virtue of the matters set out in paragraph 1 above and by virtue of the Disciplinary Committee's improper disregard of the pendency of High Court Action No. A4343/1991 in proceeding to hear the charges, the said decision should be quashed and further proceedings be stayed as the principal issue in the disciplinary proceedings is currently before the High Court as part of the subject matter in the said High Court Action."

The only matter not dealt with in this amendment were particulars of the disparities referred to in paragraph 1(g). These particulars were contained in the very helpful skeleton prepared by Mr. Wong and subsequently, separately extracted.

15. It is convenient to deal with the first substantive issue raised by Mr. Bunting for the Stock Exchange. He submitted with some force that it was only in exceptional cases that Judicial Review would be entertained where there was an alternative remedy available. In the present case an appeal procedure was provided for to the Disciplinary Appeals Committee. He placed reliance upon a passage in the speech of Lord Scarman at p.852 of Ex parte Preston 1985 IAC 835.

" My fourth proposition is that a remedy by way of judicial review is not to be made available where an alternative remedy exists. This is a proposition of great importance. Judicial review is a collateral challenge: it is not an appeal. Where Parliament has provided by statute appeal procedures, as in the taxing statutes, it will only be very rarely that the courts will allow the collateral process of judicial review to be used to attack an appealable decision. In the first part of his speech my noble and learned friend, Lord Templeman, has set out in detail the ample appeal procedures available to a taxpayer aggrieved by a decision of the commissioners to exercise their powers and duties under Part XVII of the Act of 1970 to counteract a tax advantage alleged to have been obtained by him.

But cases for judicial review can arise even where appeal procedures are provided by Parliament. The present case illustrates the circumstances in which it would be appropriate to subject a decision of the commissioners to judicial review. I accept that the court cannot in the absence of special circumstances decide by way of judicial review to be unfair that which the commissioners by taking action against the taxpayer have determined to be fair. But circumstances can arise when it would be unjust, because it would be unfair to the taxpayer, even to initiate action under Part XVII of the Act of 1970. For instance, as my noble and learned friend points out, judicial review should in principle be available where the conduct of the commissioners in initiating such action would have been equivalent, had they not been a public authority, to a breach of contract or a breach of a representation giving rise to an estoppel. Such a decision could be an abuse of power: whether it was or not and whether in the circumstances the court would in its discretion intervene would, of course, be questions for the court to decide."

16. I have no doubt as to the correctness of this proposition. The question which has to be decided is whether the circumstances of this case were such as to amount to "special circumstances" such as to justify a departure from the Rule.

17. Mr. Wong accepted that the scope for Judicial Review was limited when there was an alternative remedy available.

18. He referred to a number of cases where the Courts had seen fit to review decisions notwithstanding the availability of an appeal procedure. He placed particular reliance upon the speech of Lord Wilberforce in Calvin v. Carr 1980 AC 574 at 593 when he was considering situations at both ends of the spectrum as to when Judicial Review would lie.

" In their Lordships' judgment such intermediate cases exist. In them it is for the court, in the light of the agreements made, and in addition having regard to the course of proceedings, to decide whether, at the end of the day, there has been a fair result, reached by fair methods, such as the parties should fairly be taken to have accepted when they joined the association. Naturally there may be instances when the defect is so flagrant, the consequences so severe, that the most perfect of appeals or re-hearings will not be sufficient to produce a just result. Many rules (including those now in question) anticipate that such a situation may arise by giving power to remit for a new hearing. There may also be cases when the appeal process is itself less than perfect: it may be vitiated by the same defect as the original proceedings: or short of that there may be doubts whether the appeal body embarked on its task without predisposition or whether it had the means to make a fair and full inquiry, for example where it has no material but a transcript of what was before the original body. In such cases it would no doubt be right to quash the original decision. These are all matters (and no doubt there are others) which the court must consider. Whether these intermediate cases are to be regarded as exceptions from a general rule, as stated by Megarry J., or as a parallel category covered by a rule of equal status, is not in their Lordships' judgment necessary to state, or indeed a matter of great importance. What is important is the recognition that such cases exist, and that it is undesirable in many cases of domestic disputes, particularly in which an inquiry and appeal process has been established, to introduce too great a measure of formal judicialisation. While flagrant cases of injustice, including corruption or bias, must always be firmly dealt with by the courts, the tendency in their Lordships' opinion in matters of domestic disputes should be to leave these to be settled by the agreed methods without requiring the formalities of judicial processes to be introduced."

19. He also went on to consider the Judgment of May L.J. in Ex parte Calveley 1986 1QB 424 at 437:

" In the light of these passages from the two earlier cases and bearing in mind that we are considering an exception to a general rule, I think that one must guard against granting judicial review in cases where there is an alternative appeal route, merely because it may be more effective and convenient to do so. In both the cases to which I have referred it is clear that the challenged decisions were in truth ones which had been made without jurisdiction or in consequence of an error of law.

A further indication of when it is legitimate to depart from the general rule can be found in passages in the speeches of Lord Hailsham of St. Marylebone L.C. and Lord Brightman in Chief Constable of North Wales v. Evans [1982] 1 W.L.R. 1155. In his judgment in the Court of Appeal in that case Lord Denning M.R. had said (see p.1173):

"I go further. Not only must he be given a fair hearing, but the decision itself must be fair and reasonable. That is the protection afforded to every servant who is employed under a contract of service. He is protected against unfair dismissal. No less protection should be afforded to a probationer constable."

It was in relation to this dictum that Lord Hailsham of St. Marylebone L.C. said, at pp. 1160-1161:

"There are passages in the judgment of Lord Denning M.R. (and perhaps in the other judgments of the Court of Appeal) in the instant case and quoted by my noble and learned friend which might be read as giving the courts carte blanche to review the decision of the authority on the basis of what the courts themselves consider fair and reasonable on the merits. I am not sure whether the Master of the Rolls really intended his remarks to be construed in such a way as to permit the court to examine, as for instance in the present case, the reasoning of the subordinate authority with a view to substituting its own opinion. If so, I do not think this is a correct statement of principle. The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter on which it is authorised by law to decide for itself a conclusion which is correct in the eyes of the court."

Lord Brightman in his turn quoted Lord Evershed's reference in Ridge v. Baldwin [1964] A.C. 40, 96, to "a danger of usurpation of power on the part of the courts... under the pretext of having regard to the principles of natural justice" and continued, at p. 1173:

"Judicial review is concerned, not with the decision, but with the decision-making process. Unless that restriction on the power of the court is observed, the court will in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power."

Finally, he said, at pp. 1174,1175:

"There is however a wider point than the injustice of the decision-making process of the chief constable. With profound respect to the Court of Appeal, I dissent from the view that "Not only must [the probationer constable] be given a fair hearing, but the decision itself must be fair and reasonable." If that statement of the law passed into authority without comment, it would in my opinion transform, and wrongly transform, the remedy of judicial review. Judicial review, as the words imply, is not an appeal from a decision, but a review of the manner in which the decision was made. The statement of law which I have quoted implies that the court sits in judgment not only on the correctness of the decision-making process but also on the correctness of the decision itself... When the sole issue raised on an application for judicial review is whether the rules of natural justice have been observed, these propositions are unexceptionable. Other considerations arise when an administrative decision is attacked on the ground that it is vitiated by self-misdirection, by taking account of irrelevant or neglecting to take account of relevant factors, or is so manifestly unreasonable that no reasonable authority, entrusted with the power in question, could reasonably have made such a decision : see the well known judgment of Lord Greene M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948]1 K.B.223.""

20. Mr. Wong submitted that the facts of the present case were such as to warrant the intervention of the Court by way of Judicial Review.

21. It is not possible to come to any conclusion on this without considering in some detail the substantive case which is made out by the Applicants.

22. Their complaint is in essence that by virtue of the informal manner in which the Disciplinary proceedings were conducted they have effectively been denied a fair hearing.

23. Mr. Wong argued that it was impossible to understand either HCA 4343 on the Disciplinary charges against the Applicant unless one distinguished clearly between the different relationships involved and divided the case into two separate parts.

24. The first part comprised the relationship between Yeung and the Applicants. The complainants in the Disciplinary Proceedings were Yeung's clients. In order that justice could be done it was imperative that there should be a detailed consideration of the relationship between Yeung and his customers.

25. The second part of the case consisted of a consideration of the relationship between the Applicants and their customers who happened to be the Plaintiffs in HCA 4343 and the complainants in the Disciplinary proceedings.

26. It is evident from the transcript of the Disciplinary proceedings that it was only this second part of the case which had been canvassed at the Disciplinary hearing.

27. One of the reasons for this was the fact that the Applicants had not been legally represented at the hearing. This was as a result of the Decision of Miss Chung at the Preliminary hearing to decline to allow such representation.

28. The consequences of there being no legal representation at the hearing appear to have been unfortunate.

29. It is evident from the said transcript that Mr. Neoh did not at any time invite Mrs. Li to call witnesses in support of the Applicants' Defence to the charges. That there were such witnesses is beyond dispute. Prior to the hearing the Applicant informed the Stock Exchange in a letter that Ho Fai and Chu Moon Sun would be called as witnesses. These 2 people were 2 Runners involved with Sino Fair. They were being called as witnesses to give evidence concerning the relationship between Yeung and the Investors. From what I have said earlier this could have been a matter of crucial importance in determining whether the Applicants were in any way liable for Yeung's misconduct. The failure to canvass this important issue would have resulted in the Applicant being deprived of a fair hearing. This failure was in my opinion such as to being the case within the categories of situations referred to by Lord Wilberforce and May L.J. where Judicial Review may be appropriate.

30. Finally, on this aspect of the matter Mr. Wong submitted that the alternative remedy under the Rules was not straightforward or satisfactory. One of his criticisms related to the procedure adopted if fresh evidence was to be admitted as would be the case here. It was possible that procedural difficulties may be encountered in introducing the evidence as there was no guarantee that the Disciplinary Appeals Committee would be able to refer the fresh evidence to the Disciplinary Committee in a satisfactory manner.

31. I am not convinced that these problems will necessarily arise. I consider, however, that the not unlikely possibility that difficulties could be encountered as a result of the matter being referred back in the manner contemplated is a further justification for judicially reviewing the Decision.

32. This leads naturally to another important limb of this application. That is the question as to whether the Stock Exchange was right to decline to grant further adjournments of the proceedings to await the outcome of HCA 4343.

33. It is apparent from the correspondence exhibited that the Stock Exchange was initially disposed to grant such an indulgence. They certainly gave the question serious and sympathetic consideration. They only decided to press ahead when it became clear that the litigation was not making expeditious progress.

34. In this connection it is perhaps necessary to observe that there was an inherent conflict in the situation. The Applicants were the Defendants in the case and as such they had little incentive to encourage the Plaintiffs to proceed more diligently in their claims against them. Be that as it may I do have some sympathy for the Stock Exchange. Once the proceedings had been set in motion it was unsatisfactory to allow the matter to remain outstanding for a protracted period.

35. I do not think that there is any simple answer to this. The mere fact that the Committee might reach a Decision which conflicts with the outcome of the litigation is not of itself sufficient reason to adjourn the proceedings.

36. What I consider is necessary is to consider carefully all of the surrounding circumstances. Lord Donaldson in a slightly different context touched upon the type of considerations which would have to be weighted in such a situation at p. 512 of Ex parte Guinness PLC 1989 1 All ER 509.

"The jurisdiction of the court

The court's jurisdiction and limitations on its exercise are established in Ex p Datafin plc. However the present appeal calls for a further review and, in particular, consideration of whether the separate grounds for granting relief (illegality, irrationality, procedural impropriety and, possibly, proportionality) are appropriate in all situations. Illegality would certainly apply if the panel acted in breach of the general law, but it is more difficult to apply in the context of an alleged misinterpretation of its own rules by a body which under the scheme is both legislator and interpreter. Irrationality, at least in the sense of failing to take account of relevant factors or taking account of irrelevant factors, is a difficult concept in the context of a body which is itself charged with the duty of making a judgment on what is and what is not relevant, although clearly a theoretical scenario could be constructed in which the panel acted on the basis of considerations which on any view must have been irrelevant or ignored something which on any view must have been relevant. And similar problems arise with procedural impropriety in the narrow sense of failing to follow accepted procedures, given the nature of the panel and of its functions and the lack of any statutory or other guidance as to its procedures which are intended to be of its own devising. Similarly, in the broad sense of breach of the rules of natural justice, what is or is not fair may depend on underlying value judgments by the panel as to the time scale which is appropriate for decision, the consequences of delay and matters of that kind. Approaching the problem on the basis of separate grounds for relief may at once bring several interlocking and mutually inconsistent considerations into play. Were the underlying judgments tainted by illegality or irrationality? If not, accepting those judgments, was the action unfair? If the underlying judgments were so tainted, was the action unfair on the basis of judgments which might reasonably have been made? The permutations, if not endless, are considerable and confusing.

It may be that the true view is that, in the context of a body whose constitution, functions and powers are sui generis, the court should review the panel's acts and omissions more in the round than might otherwise be the case and, whilst basing its decision on familiar concepts, should eschew any formal categorisation. It was Lord Diplock who in Council of Civil Service Unions v Minister for the Civil Service [1984] 3 All ER 935, [1985] AC 374 formulated the currently accepted categorisations in an attempt to rid the courts of shackles bred of the technicalities surrounding the old prerogative writs. But he added that further development on a case-by-case basis might add further grounds (see [1984] 3 All ER 935 at 950, [1985] AC 374 at 410). In the context of the present appeal he might have considered an innominate ground formed of an amalgam of his own grounds with perhaps added elements, reflecting the unique nature of the panel, its powers and duties and the environment in which it operates, for he would surely have joined in deploring any use of his own categorisation as a fetter on the continuous development of the new 'public law court'. In relation to such an innominate ground the ultimate question would, as always, be whether something had gone wrong of a nature and degree which required the intervention of the court and, if so, what form that intervention should take."

37. In my view the most important factor to be borne in mind is that the issues to be considered in the Disciplinary proceedings were not entirely straightforward and were not in my opinion suitable to be considered by what is essentially a comparatively informal Tribunal.

38. The Courts were clearly a more satisfactory venue to adjudicate upon Yeung's role and the question whether any liability attached to the Applicants.

39. From the Disciplinary view point the main thrust of the charges was that the Applicants had failed to give satisfaction to the complainants. There was no reason why they should on the basis of the legal advice which was presumably tendered to them.

40. The Applicants were not permitted to have legal representation at the hearing and it is accordingly difficult to see how the legal issues could have been satisfactorily ventilated before the Disciplinary Committee. It was undoubtedly preferable that they should be canvassed before the Court. An adjournment pending the hearing was clearly desirable.

41. I am doubtful whether serious prejudice would have been likely to arise consequent upon the delay which would be occasioned by such an adjournment.

42. Before me Mr. Bunting made it clear that it was no part of his case that the Applicants had been guilty of moral turpitude. It would therefore have been open to the Stock Exchange to explain to the complainants that as the Courts were seized of the matter, it was preferable that the hearing of the Disciplinary proceedings should be deferred until the outcome of the legal action.

43. Closely associated with the question of the adjournment is the complaint that legal representation was not permitted at the hearing.

44. I am satisfied that there is no automatic right to insist upon legal representation in proceedings before an informal Committee such as the Disciplinary Committee where the Rules confer upon the Body a discretion in the matter.

45. What has to be considered in the present case is the way in which the discretion has been exercised.

46. I have already commented upon the issues which were before the Committee. While I should resist the temptation of substituting my own views for those of the Committee it is difficult to see how the Applicant could have received a fair hearing if they were not allowed to instruct legal advisers to assist them in presenting their case before the Committee.

47. There is another important point on legal representation. Mr. Wong argued that the seriousness of the charges was such as to require legal representation. His authority for this was Manchanda v. Medical Eye Centre 1986 Solicitors Journal Vol. 131 No. 2. I do not agree. Infamous conduct was alleged in that case. This is quite different from the allegations made against the Applicants.

48. Although almost any Disciplinary charges may be considered serious it must be a matter of degree whether legal representation is required. I do not think that the charges were so serious than legal representation was necessary for that reason.

49. However, for the reasons I have given earlier I consider that the grounds of complaint relating to lack of legal representation have been made out.

50. The next ground that I will consider is ground 1(a). The complaint is that the "Prosecutor" and the "Judge" are members of the Council of the Stock Exchange.

51. I do not consider that this complaint can be sustained. There is a note at the conclusion of Rule 5 relating to the Disciplinary Committee which reads:

" No Exchange official or member of the Disciplinary Committee who is an interested party by virtue of his connection with the member or his involvement in the matters being dealt with shall be permitted to sit on the Disciplinary Committee while it is considering any question relating to that member."

52. There is a similar note at the end of Rule 6 which deals with the Disciplinary Appeals Committee. In my view this is a sufficient safeguard for the complaint which is made. In re S (A Barrister) 1981 1QB 683 is authority for this proposition.

53. The Applicant also complains that the identity of the Principal witness at the hearing was not revealed to it and contrary to prior representations to it no statement of the said witness was provided.

54. I consider this complaint to be misconceived. It is necessary to bear in mind the informal nature of the Tribunal. When the proceedings are considered as a whole I have no doubt that the Applicant had more than sufficient notice of the case which was being made out against it. It would be a mistake to saddle the Committee with undue procedural formality. This complaint has not been substantiated.

55. Amended Ground 1(d) can be dealt with in a similar manner. Although Mr. Neoh did make reference to "his" witnesses it is obvious from reading the transcript of the proceedings as a whole that he maintained an even hand and that there was nothing to indicate any bias on his part.

56. So far as the name card is concerned I accept the submission made by Mr. Bunting that this was not a critical item of evidence. There was no evidence to suggest that the Applicant had arranged for the printing of the cards or had agreed to Yeung using their name.

57. Amended ground 1(g) deals with similar considerations. Namely the way in which the proceedings were conducted. I do not consider that it is a valid ground of criticism that Mr. Phenix chose to present the case in the way he did. It would have been clear to the Committee that he was putting forward his view of the matter and that it would be up to the Committee to make their own determination of the case as a whole.

58. The only other outstanding matter is Ground 1(e). I consider that the views I have expressed on the subject of legal representation supersede any consideration of this complaint.

59. For the reasons I have given earlier I have come to the conclusion that Judicial Review is appropriate in this case. I am prepared to grant the relief which is sought as I believe that the only satisfactory way of disposing of this matter is to quash the Decision of the Disciplinary Committee and defer a hearing of the Disciplinary charges until the outcome of HCA 4343 is known.

60. As the Applicant has succeeded I propose making an order nisi that they will have their costs.