Case Detail

CACV 257/2019

[2021] HKCA 877

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 257 OF 2019

(ON APPEAL FROM CTEA 2/2017)

____________________

BETWEEN	COMPETITION COMMISSION	Applicant
	and
	W. HING CONSTRUCTION COMPANY LIMITED (永興聯合建築有限公司)	1^st Respondent
	SUN SPARK CONSTRUCTION LIMITED (裕輝建築有限公司)	2^nd Respondent
	LAU CHUNG YAN (劉頌欣) and LAU CHUN KWOK ADAM (劉鎮國) (in partnership trading as MAU HANG PAINTING & DECORATION CO (茂恒油漆裝飾公司))	3^rd Respondent
	CHEUNG YIU FAI DANNY (張耀輝) and WONG TUNG HOI (黃東海) (in partnership trading as TAI DOU BUILDING CONTRACTOR (大道建築公司))	4^th Respondent
	KAM KEE MACHINE ELECTRICAL IRON WORKS COMPANY LIMITED (金記機電鐵器工程有限公司)	5^th Respondent
	HUI TAK CHEONG KANLY (許德昌) and HUI TAK ON BRYAN (許德安) (in partnership trading as HIP YICK CONSTRUCTION COMPANY (協益建築公司))	6^th Respondent
	SUEN SIK KAU (孫錫球) (trading as TAI WAH CIVIL ENGINEERING (泰華土木工程))	7^th Respondent
	POON WAI WOON (潘維桓) and POON KAI WO JULIO (潘啟和) (in partnership trading as WAI SUN IRON & DECORATION CO (維新鐵器裝修公司))	8^th Respondent
	YEUNG KWOK YEE (楊國儀) (trading as WIDE PROJECT ENGINEERING & CONSTRUCTION CO (百達建築工程公司))	9^th Respondent
	LUEN HOP DECORATION ENGINEERING CO LIMITED (聯合裝飾工程有限公司)	10^th Respondent

____________________

Before: Hon Lam VP, Barma and Au JJA in Court

Date of Hearing and Judgment: 5 May 2021

Date of Reasons for Judgment: 18 June 2021

________________________

REASONS FOR JUDGMENT

________________________

Hon Lam VP (giving the Reasons for Judgment of the Court):

1. This is an appeal by two individual partners named in the title of the proceedings as the partners of the firm Tai Dou Building Contractor (“Tai Dou”) against the judgment of 17 May 2019 [2019] HKCT 3 (“the Judgment”) by Godfrey Lam J sitting as the President of the Competition Tribunal. By that judgment, the learned President found that “the 4^th Respondent” contravened the first conduct rule under the Competition Ordinance Cap 619 (“the Ordinance”). In light of the contentions before us, we shall have more to say as to the identity of the 4^th Respondent at the proceedings below as well as in this appeal.

2. We should also record that Mr Hui SC (who argued the appeal together with Mr Lam and Mr Wong) informed this Court at the hearing of the appeal that he only acted for the two named individuals Mr Cheung and Mr Wong. Counsel also said he had no instructions to act for the partnership firm Tai Dou.

3. Subsequent to the Judgment, the President imposed sanction by way of pecuniary penalties by another judgment of 29 April 2020 [2020] HKCT 1 (“the Sanction Judgment”). There is an appeal by the Commission in respect of the penalties in CACV 143/2020. That appeal is to be heard later.

4. This Court is only concerned with the appeal against liability in the present appeal.

A. Background

5. The relevant factual background can be taken from the Judgment as there is no appeal against those findings, at least as far as Tai Dou is concerned[1]. As we shall explain, the focus of Mr Hui is whether the two named individual partners Mr Cheung and Mr Wong should be held liable in light of the absence of personal acts or mens rea constituting the breach of the first conduct rule on their part.

6. At the hearing, Mr Hui also confirmed that he did not challenge the conclusion of the President that the partnership Tai Dou Building Contractor was liable. Counsel confined his arguments in the appeal to the personal liabilities of Mr Cheung and Mr Wong.

7. The case concerned anti-competition arrangements in 2016 of several decoration contractors appointed by the Housing Authority under its Decoration Contractor System to divide the market for three buildings in Phase 1 of On Tat Estate, Kwun Tong which was then a new public housing estate. The findings regarding the anti-competitive scheme by which the breach of the first conduct rule was carried out were set out at [330] to [332] of the Judgment:

“ 330.   Between June and November 2016, the respondents, each an Appointed DC in On Tat Estate (Phase 1), made and gave effect to an agreement — the Floor Allocation Arrangement — with one another, whereby they were each allocated 4 floors in each of the 3 buildings in the pattern set out in §29 above for the purposes of taking up decoration business. They agreed not to actively seek business from tenants on floors allocated to the other respondents. If approached by those tenants, they would direct them to the respondents who had been allocated the relevant floors and, unless the tenants insisted, they would decline business from them. This agreement was implemented, resulting in the pattern of distribution of the flats decorated by the respondents as shown in Appendix 2. Such conduct consisted of the allocation of market for the supply of services and hence constituted ‘serious anti-competitive conduct’.
331.   During the same period of time, the respondents made and gave effect to an agreement — the Package Price Arrangement — with one another, whereby they agreed on the prices of the Packages to be put on a joint Flyer for On Tat Estate (Phase 1). Each of them agreed to and contributed financially to the printing of the Flyers. The Flyers were used by the respondents for promotional purposes and distributed to tenants. The prices in the Flyer served as a starting point or anchoring reference point for negotiations with many if not all customers where their requirements included the Package items. In a number of contracts, the prices in the Flyer were or were near the final prices. Such conduct consisted of fixing the price for the supply of services and therefore also constituted ‘serious anti-competitive conduct’.
332.   Both the Floor Allocation Arrangement and the Package Price Arrangement had the object of preventing, restricting or distorting competition in Hong Kong.”

8. The actual works done by the respondents in accordance with the Floor Allocation Arrangement were set out at [28] to [30] of the judgment:

“ 28.   Between June and November 2016, out of the total of 2,582 flats in the 3 buildings, the respondents carried out decoration works for 867 flats. It is not entirely clear how many tenants moved in without decoration, or decorated the flats by themselves or their friends or relatives, or engaged commercial decoration contractors other than the Appointed DCs (‘outside contractors’).
29.   It has since been discovered that the distribution of the vast majority of the flats decorated by the 10 respondents fell into a strikingly regular pattern. According to this pattern, each respondent worked on 4 and only 4 floors in each of the 3 buildings. The 4 floors each respondent worked on in each building are each 10 floors apart, so that the last digit of the floor number is constant. The pattern is shown in the following table:
Appointed DC Floors worked in
Chun Tat House Floors worked in
Oi Tat House Floors worked in
Shing Tat House
W Hing (R1) 1, 11, 21, 31 4, 14, 24, 34 8, 18, 28, 38
Sun Spark (R2) 2, 12 , 22, 32 5, 15, 25, 35 9, 19, 29, 39
Mau Hang (R3) 3, 13, 23, 33 6, 16, 26, 36 10, 20, 30, 40
Tai Dou (R4) 4, 14, 24, 34 7, 17, 27, 37 1, 11, 21, 31
Kam Kee (R5) 5, 15, 25, 35 8, 18, 28, 38 2, 12 , 22, 32
Hip Yick (R6) 6, 16, 26, 36 9, 19, 29, 39 3, 13, 23, 33
Tai Wah (R7) 7, 17, 27, 37 10, 20, 30, 40 4, 14, 24, 34
Wai Sun (R8) 8, 18, 28, 38 1, 11, 21, 31 5, 15, 25, 35
Wide Project (R9) 9, 19, 29, 39 2, 12 , 22, 32 6, 16, 26, 36
Luen Hop (R10) 10, 20, 30, 40 3, 13, 23, 33 7, 17, 27, 37
30.   832 of the 867 flats worked by the respondents follow this pattern, while 35 flats do not. …”

9. Tai Dou was one of these appointed decoration contractors found by the President to have participated in the anti-competitive conduct.

10. The business of Tai Dou and its organization was discussed by the President at [324] to [328] of the Judgment:

“ 324.     Tai Dou (R4) is a partnership consisting of 4 partners, being the two persons named in the Originating Notice of Application (namely, Cheung Yiu Fai Danny and Wong Tung Hoi) as well as Mr Pacquet Wong and Madam To Suet Chun.[39] It attempted at a very late stage to raise a similar argument but, for the reasons set out in this Tribunal’s Reasons for Decision dated 31 October 2018, was not allowed to do so. In so far as counsel sought in closing submissions to run the sub‑contractor defence on behalf of Tai Dou (R4), I consider that the argument is inadmissible.
325.   On the basis of its existing Response (filed jointly with the 2^nd, 3^rd, 6^th, 7^th, 8^th and 10^threspondents), Tai Dou (R4) admits that it attended the worship ceremony at the Site Office on 16 June 2016 and that lots were drawn there (though it is averred it was for the purpose of allocating desks in the Site Office). From the evidence, it can be seen that Pacquet Wong, an undisputed partner of Tai Dou (R4), signed the reply accepting the appointment as an Appointed DC, signed the surety bond, signed the Licence, signed and submitted to HKHA a list of staff and workers, attended the briefing session on 20 August 2015 and named KC Ho as the contact person. The evidence shows that those working in On Tat Estate (Phase 1) in the name of Tai Dou (R4) included KC Ho and Ma Yick Yin.
326.   A witness statement of KC Ho was originally filed on behalf of Tai Dou (R4), in which he described himself as the General Manager of Tai Dou (R4). In early October 2018, Tai Dou (R4), having replaced its previous lawyers, indicated that it would not be calling KC Ho. The 2^nd, 3^rd, 5^th, 6^th, 7^th, 8^th and 10^threspondents then indicated their intention to call him and also filed a witness statement of Ma Yick Yin. Eventually, KC Ho was not called to testify, and his statement is therefore to be disregarded. Ma Yick Yin was called, and said that he considered KC Ho the general manager of Tai Dou (R4), that he worked in On Tat Estate (Phase 1) in accordance with KC Ho’s instructions, and that he and the workers used business cards with Tai Dou (R4)’s name. There are also receipts issued to tenants bearing an oval chop stating ‘Tai Dou Building Co’ in both Chinese and English.
327.   Despite KC Ho’s absence, based on all the other evidence there is no doubt that KC Ho and the team working there in the name of Tai Dou (R4) had engaged in the Floor Allocation Arrangement and the Package Price Arrangement. Counsel’s argument that there is a possibility that Tai Dou (R4) did not enter into any arrangement with others but simply obtained decoration work from the remaining floors because they were not allocated to any of the other respondents, seems to me, with respect, to be wholly unrealistic.
328.   It is clear that the undertaking operating in On Tat Estate (Phase 1) was the partnership Tai Dou. The two named persons each being a partner must be held responsible as persons comprised in the undertaking. Counsel’s argument that there is nothing to show that they personally took part in or were aware of the conduct impugned is beside the point.

11. At footnote 39 at [324], the President noted as follows:

“ It is not clear why only two of the four partners have been named as respondents, but the Commission accepts that as such, only the two named persons can be subjected to any sanctions and orders imposed by the Tribunal in these proceedings.”

B. The appeal

12. In the context of the present appeal, this Court (Lam VP and Au JA) held in a judgment of 16 November 2020 [2020] HKCA 930 (“the Striking Out Judgment”) that it was an abuse of process for the 4^th Respondent to attempt to revive the sub-contractor defence (which had been held by the President to be inadmissible due to case management reasons) in the appeal when there was no appeal against the President’s case management ruling as set out in the judgment of 31 October 2018, [2018] HKCT 6. Parts of the Notice of Appeal were struck out by the judgment of 16 November 2020.

13. The 4^th Respondent filed an amended Notice of Appeal on 4 February 2021 to reflect the outcome of the Striking Out Judgment.

14. In the Striking Out Judgment, this Court identified the permissible arguments to be entertained in this appeal at [34], [36] and [37]:

“34.   In our judgment, any attempt by the 4^th Respondent to rely upon the sub-contractor defence without appealing the Dismissal Decision constitutes an abuse of process and should be struck out. Without the sub-contractor defence, and in light of the pleaded case of the 4^th Respondent as outlined above, we agree with Mr Chiu that the 4^th Respondent should not be permitted to rely on any arguments in the appeal challenging the attribution of the acts of Mr KC Ho to the Partnership by the Tribunal.
…
36.   The position regarding the other parts of the Notice of Appeal is different. To some extent, the position on the face of the Notice of Appeal was not very clear because of the inherent ambiguity in the reference to ‘the 4^th Respondent’: it can either be taken as a reference to the Partnership (viz the firm) or a reference to Mr Danny Cheung and Mr Wong Tung Hoi personally.
37.   Based on Mr Lam’s submissions, we understand that the arguments raised in paragraphs 8(b), (c) and 9 are directed not at the finding against the Partnership (the firm), but rather at the finding that the 4^th Respondent (i.e. Mr Cheung and Mr TH Wong) should be held liable because of the finding against the Partnership. In that sense, paragraphs 8(b), (c) and 9 do not engage the impermissible challenge of attribution which Mr Cheung and Mr TH Wong are precluded by the Dismissal Decision from advancing in this appeal.”

C. The identity of the 4^th Respondent

15. After reading the respective submissions of Mr Hui and Mr Beard QC (who appeared with Mr Chan SC and Mr Chiu for the Commission), this Court discerned that a fundamental difference between the two sides stems from their respective understanding as to who were the 4^th Respondent in these proceedings. At the hearing, upon query by the Court, Mr Hui intimated that his team only acted for the two named individual partners and as mentioned above had no instruction to act for Tai Dou, the firm.

16. On the other hand, the stance of the Commission is that Tai Dou, the partnership firm, was the 4^th Respondent and parties had always proceeded on that basis in the Tribunal.

17. We agree with the Commission and reject the submissions of Mr Hui that only the two named individual partners were the 4^th Respondent but not the firm Tai Dou.

18. There had been changes of solicitors acting for the 4^th Respondent. In the Tribunal and in this appeal, the 4^th Respondent was represented by different firms of solicitors at different stages. However, at every stage of the proceedings before the Tribunal it was clear to all parties that though Mr Cheung and Mr Wong were also named, the undertaking against which the proceedings were brought by way of the 4^th Respondent was Tai Dou the firm. The liabilities of the named partners flowed from their capacity as partners of that firm, not in their capacity as individuals distinct from the firm.

19. At the time of the appeal hearing, the 4^th Respondent was represented by Henry Yu & Associates. This firm of solicitors came on record in this appeal by a Notice of Change of Solicitors of 1 February 2021.

20. Mr Hui only came on record when he signed the Amended Notice of Appeal dated 4 February 2021 after the Striking Out Judgment.

21. His juniors, Mr Lam and Mr Wong, acted for the 4^th Respondent in the striking out application in this Court on the instructions of Bryan Chan & Co. Bryan Chan & Co were the solicitors on record for the 4^th Respondent in this appeal by a Notice of Change of Solicitors of 2 October 2019.

22. When the original Notice of Appeal was filed on 14 June 2019, the 4^th Respondent was represented by another firm of solicitors Chan & Associates with another team of leading and junior counsel.

23. The junior counsel signing the original Notice of Appeal, Ms Ng, was also the counsel who acted for the 4^th Respondent at the trial and sanction hearing before the Tribunal. She was however instructed by two different solicitor firms: by Bryan Chan & Co at the sanction hearing and by Henry Wan & Yeung at the trial.

24. Another counsel Mr Dong acted for the 4^th Respondent on instruction from Henry Wan & Yeung at the pre-trial review. The application for amendments of the Response (to enable the 4^th Respondent to take the sub-contractor defence) was made at that hearing and rejected by the Tribunal in a judgment of 31 October 2018, [2018] HKCT 6 (“the Amendment Judgment”).

25. Henry Wan & Yeung actually came on record by a Notice of Change of Solicitors on 14 September 2018. Before that, the solicitors acted for the 4^th Respondent was JCC Cheung & Co.

26. JCC Cheung & Co became solicitors for the 4^th Respondent on 25 June 2018 by a Notice of Change of Solicitors. Before that, the solicitors on the record for the 4^th Respondent was Littlewoods.

27. At the hearing before us, after taking instructions from his clients Mr Hui informed this Court that instructions were given by Mr Cheung and Mr Wong to Henry Wan & Yeung and Bryan Chan & Co. However, counsel could not confirm the identity of the person(s) who gave instructions to JCC Cheung & Co and Littlewoods.

28. Whilst the naming of the 4^th Respondent in the Originating Notice of Application of 14 August 2017 as “Cheung Yiu Fai Danny and Wong Tung Hoi (in partnership trading as [Tai Dou]” and its description at paragraph 4(4) was ambiguous, upon reading this document as a whole and in context, there is no doubt that the proceedings were brought against Tai Dou the firm. Thus, at paragraphs 22 to 24, it was pleaded that the Respondents (including the 4^th Respondent) were the Appointed Contractors appointed by the Housing Authority and each of them had received letter from it and executed a Licence. Tai Dou was so appointed, received such letter and executed such Licence, not Mr Cheung nor Mr Wong. Paragraph 33(1) referred to the allocation of floors to Tai Dou, not Mr Cheung nor Mr Wong. Paragraphs 37 and 38 referred to the performance of decoration works by the Respondents and paragraphs 40 and 44 referred to the use of the flyers by the Respondents to promote their services to the tenants: again Tai Dou did so, not Mr Cheung nor Mr Wong. On the whole, the acts and conduct pleaded as contraventions of the first conduct rule were those of Tai Dou, not the acts or conduct of the individuals.

29. The Response of the 4^th Respondent was in the same document as the Response of the 2^nd, 3^rd, 6^th, 7^th, 8^th and 10^th Respondents which was prepared and filed by Littlewoods on 28 September 2017. The Statement of Truth in that document was signed by Mr KC Ho as “General Manager” of Tai Dou. Thus, Tai Dou was regarded as the 4^th Respondent, not the two named individuals. It is also plain from the reading of the Response that those acting for the 4^th Respondent understood that Tai Dou (the firm) was the 4^th Respondent instead of the two named individual partners. At paragraph 19 of the Response, it was pleaded that the Respondents (thus including the 4^th Respondent) agreed to observe the terms of the Licence (which was executed by Tai Dou). At paragraph 22(a), there was the plea that it was more economical and costs saving for the Respondents to carry out decoration works for the flats at the same floor and at paragraphs 22(b) and 32 that the Respondents would accept and conduct businesses with the tenants. In the context of the 4^th Respondent, these pleas had to be referring to Tai Dou, not Mr Cheung and Mr Wong who did not as individuals carry out decoration works or accept business at this estate. Paragraph 29(f) referred to the obligation of the Respondents as Appointed Contractors and paragraphs 44 and 46 referred to the use of the flyers by the Respondents. In the context of the 4^th Respondent, such references had to be taken as referring to Tai Dou rather than Mr Cheung and Mr Wong as individuals.

30. Had it been the belief of Mr Cheung and Mr Wong that they were sued as individuals without having the firm being made a party to the proceedings, their Response would not need to refer to the affairs of the firm. Instead, they should have set out their own lack of participation in the business concerning the decoration works in question. In that case, it would indeed be inappropriate for such response to be verified by a statement of truth made by Mr KC Ho instead of themselves.

31. Not surprisingly, the witness statement of the 4^th Respondent was made by Mr KC Ho on behalf of Tai Dou and filed with the Tribunal on 19 April 2018: see [7] of the Amendment Judgment. The evidence was prepared on the basis that Tai Dou was the 4^th Respondent.

32. As mentioned above, there was a late application for amendment of the Response by the 4^th Respondent to run the sub-contractor defence. It was rejected by the Tribunal in the Amendment Judgment. That application was filed by Henry Wan & Yeung for the 4^th Respondent. As acknowledged by Mr Hui, at that stage instructions came from Mr Cheung and Mr Wong. The contents of the proposed amended response were set out at [12] and [13] of the Amendment Judgment. In that document, a distinction was drawn between the 4^th Respondent (which the President understood to be Tai Dou) and its partners. The application was presented on the basis that Tai Dou was the 4^th Respondent and it was supported by three new witness statements: from Mr Cheung, Mr Wong and another partner Pacquet Wong.

33. At [16] of the Amendment Judgment, the President referred to the explanation put on behalf of Tai Dou as the 4^th Respondent as regards the delay in making the application. Pacquet Wong, the unnamed partner, authorized Mr KC Ho to handle the defence of the 4^th Respondent. In [17] to [22], the President further alluded to the involvement of Pacquet Wong (as partner of Tai Dou) being informed of the developments in the litigation by Mr KC Ho. The tenor of the Amendment Judgment clearly bears out that at that stage it was common ground that Tai Dou was the 4^th Respondent.

34. With the rejection of the amended Response, the trial proceeded on the original Response which, as we have seen, treated Tai Dou as the 4^th Respondent. Hence, naturally the President regarded Tai Dou to be the 4^th Respondent in the Judgment, see in particular [324] to [328]. In the sealed judgment of 17 May 2019 (filed on 9 July 2019), it was Tai Dou that was adjudged (as the 4^th Respondent) to have contravened section 6 of the Ordinance.

D. The liabilities of Mr Cheung and Mr Wong as partners of Tai Dou

35. The President explained the practical consideration for naming Mr Cheung and Mr Wong as partners at [303]:

“ 303. While the competition rules target undertakings, in accordance with general legal principles, applications brought in the Tribunal and orders made by the Tribunal are necessarily addressed to legal entities. Thus ss 92‑94 of the Ordinance allow the Commission to apply for and the Tribunal to make orders against persons who have contravened or been involved in a contravention of a competition rule. Accordingly, when liability is to be attached for infringement by an undertaking, the infringement must be imputed to one or more person against whom legal proceedings may be instituted and on whom orders including financial penalties may be imposed.”[2]

36. In the Sanction Judgment at [79] to [87], the President found it necessary to address the same point in light of the arguments advanced on behalf of Mr Cheung and Mr Wong at the Sanction hearing that they as “salaried partner” and “silent partner” should not be liable for the pecuniary penalty. For present purposes, in light of the submissions of Mr Hui, it would be useful to refer to [87]:

“ 87. In contrast with these two cases, we are not here concerned with criminal offences and mens rea. As explained in the Judgment, while the competition rules apply to undertakings, ss 92–94 of the Ordinance allow the Commission to apply for, and the Tribunal to make, orders against persons who have contravened or been involved in a contravention of a competition rule. ‘Person’ as defined in s 2 of the Ordinance, in addition to the meaning given by s 3 of the Interpretation and General Clauses Ordinance (Cap 1), includes an undertaking. Where a partnership, as an undertaking, has contravened the first conduct rule, it seems to me generally that its partners as such are persons who have contravened the rule. An agreement entered into by a partnership is an agreement to which the partners are jointly party. Here, the persons specifically named in the Notice of Application are Mr Cheung and Mr TH Wong in partnership trading as Tai Dou. They were undoubtedly partners of Tai Dou and were proceeded against as such. As partners of Tai Dou, they joined in making and giving effect to the agreements in question which contravened the rule and therefore likewise contravened the rule: cf Clode v Barnes [1974] 1 WLR 544. Whether the application could have been brought against the partnership as a ‘person’ without naming any individuals does not strictly arise.”

37. In addition to pecuniary penalties, under Section 94 the Tribunal can impose other sanctions against a person who has contravened or been involved in a contravention of a competition rule by way of orders specified in Schedule 3 to the Ordinance. Such orders include orders restraining or prohibiting some specified acts or conduct[3] or orders requiring some specified acts to be done[4]. Hence, insofar as the Commission may wish to apply for such orders against any individual partner(s), there is a practical need to name some individuals for each undertaking.

38. It is clear from these paragraphs that the President held Mr Cheung and Mr Wong to be liable for the penalties by virtue of their roles as partners of Tai Dou instead of any personal acts and conducts on their parts as individuals.

39. In our judgment, such legal consequence flowed from the law relating to the liabilities of a partner for the civil obligations of a partnership.

40. Under Section 155A of the Ordinance, a pecuniary penalty imposed under Section 93 can be enforced in the same manner as a judgment of the Court of First Instance for the payment of money. Subsection (2)(b) further provides that the Registrar is to enforce payment as a judgment debt due to the Registrar. In other words, such pecuniary penalty can be enforced as a civil liability.

41. By reason of Section 11 of the Partnership Ordinance Cap 38, every partner in a firm is liable jointly with the other partners for all debts and obligations of the firm incurred while he is a partner. Thus, Mr Cheung and Mr Wong are jointly liable (together with other partners) for the pecuniary penalty imposed on Tai Dou.

42. Mr Hui submitted that such analysis fails to take account of the criminal nature of the proceedings. Relying on Lindley & Banks on Partnership,20^th Ed paragraph 14-02, R v W Stevenson & Sons [2008] 2 Cr App R 14 at [30] to [31], counsel submitted that in the criminal context, partners should be treated as a separate entity from the partnership and in the present case Mr Cheung and Mr Wong were named as individuals and they were the only parties identified as the 4^th Respondent in the proceedings before the Tribunal. Thus, Mr Hui submitted, the President erred in finding liability on the basis that the 4^th Respondent was the partnership, Tai Dou. He said though it was possible for the Commission to proceed against Tai Dou, this was not the course adopted and it is now bound by the choice it made when instigating the proceedings.

43. Based on that premise, Mr Hui relied on the presumption for the need to prove mens rea (citing Hin Lin Yee v HKSAR [2010] 2 HKLRD 826 at [10] and Kulemesin v HKSAR (2013) 16 HKCFAR 195 at [41] and submitted that there was no evidence to establish the mens rea of Mr Cheung and Mr Wong in the contravention of the first conduct rule as found by the Tribunal. These partners should not be held criminally liable for the acts of another partner without proof of their own requisite mens rea for such contravention, see Riley v Director of Public Prosecutions [2017] 1 WLR 505 at [32].

44. With respect, these submissions are flawed and we cannot accept the same.

45. First and foremost, though the allegations of contravention are, as held by the President, to be classified as criminal charge for the purpose of article 11 of the Hong Kong Bill of Rights (“art 11”), it does not follow that the contravention of the first conduct rule is to be regarded as a criminal offence for the purpose of domestic law incorporating the requirement of mens rea as submitted by Mr Hui. Unlike the stricter standard of proof, the requirement of mens rea is not one of the safeguards prescribed by art 11. It is thus a matter of substantive criminal law and it depends on whether the legislature has created a statutory offence of contravention of the first conduct rule.

46. As submitted by Mr Beard, it is legally possible for such allegations to be determined in civil proceedings (as classified under domestic law) notwithstanding the attraction of art 11 protection based on the autonomous human right definition of criminal charge, see Secretary for Justice v Cheung Kai Yin [2016] 4 HKLRD 367 at [36] and [37].

47. In that case, this Court held at [25] that the applicability of a stricter standard of proof (by reason of the safeguard under art 11) is a separate question from determining if the proceedings is essentially criminal in character as a matter of domestic law.

48. Likewise, the attraction of the safeguards under art 11 (which guarantees the procedural fairness of a trial on a criminal charge by way of human right protection) is a distinct question from determining if the Ordinance has created an offence of contravention of the first conduct rule with all the incidental characteristics of a criminal offence. The latter is essentially a question of statutory construction.

49. Adopting such approach, it is plain to us that the Ordinance does not create an offence of contravention of the first conduct rule. The only criminal offences in the Ordinance are those specified in Sections 52 to 55 and Sections 172 to 175. Contravention of the first conduct rule is not included in those parts of the Ordinance. It is also provided specifically in Section 171(1) that criminal proceedings for an offence under the Ordinance may not be brought in the Tribunal. Persons charged with such offences would be prosecuted in the criminal courts. It is also pertinent to note that the prosecution of such offences is not within the scope of function and power of the Commission under Sections 130 and 133 of the Ordinance.

50. In contrast, proceedings for contravention of the first conduct rule must be brought in the Tribunal and application for pecuniary penalty is only to be brought by the Commission, see Sections 92, 108 and 109 of the Ordinance.

51. Subject to modifications in the Competition Tribunal Rules Cap 619D (“the Rules”), proceedings in the Tribunal are to follow the practice and procedure of the Court of First Instance in the exercise of its civil jurisdiction: see Section 144 of the Ordinance and Section 4 of the Rules (which provide for the application of the Rules of the High Court Cap 4A to proceedings in the Tribunal). The appeal mechanism as set out in Sections 154 and 155 is similar to the one for appeals from a civil judgment of the Court of First Instance, with leave requirement for interlocutory appeals.

52. Thus, there cannot be any prosecution by the Secretary for Justice in a criminal court in respect of the contravention of the first conduct rule.

53. Sections 45 and 148(3) of the Ordinance which provide for inadmissibility of answers given under compulsion in subsequent proceedings refer to criminal proceedings (under 45(3)(b)) and proceedings for pecuniary penalty (under 45(3)(a)) separately. Thus, the legislature did not regard proceedings for pecuniary penalty as criminal proceedings.

54. As we have already mentioned, the pecuniary penalty ordered by the Tribunal shall, as provided under Section 155A, be enforced in the same way as a civil judgment.

55. As stated in the preamble to the Ordinance, the purpose of the legislation is to prohibit conduct that prevents, restricts or distorts competition and to prohibit mergers that substantially lessen competition. In respect of a contravention of the first conduct rule, the Ordinance provides various options and means to achieve such objective by way of enforcement actions by the Commission:

(a)  Acceptance of a commitment by the Commission from a person and the enforcement of such commitment under Division 1 of Part 4 of the Ordinance;
(b)  Issuance of infringement notices by the Commission under Division 2 of Part 4 of the Ordinance offering not to bring proceedings on condition that the persons involved make a commitment to comply with the requirements of the notice;
(c)  The Commission may make a leniency agreement with a person in exchange for his co-operation in an investigation or in proceedings under Division 3 of Part 4 of the Ordinance;
(d)  The Commission may under Division 4 of Part 4 of the Ordinance issue a warning notice to an undertaking requiring it to cease its contravening conduct and not to repeat the same;
(e)  The Commission may apply to the Tribunal for pecuniary penalty under Division 2 of Part 6 of the Ordinance;
(f)    Under Section 94 in Division 3 of Part 6, the Tribunal, whether or not it makes an order for pecuniary penalty, can make other types of order as specified in Schedule 3 to the Ordinance;
(g)  Under Section 95 in Division 3 of Part 6, the Tribunal can also make interim orders pending its determination of an application under Section 94; and
(h)  Under Division 5 of Part 6, the Commission can apply to the Tribunal for disqualification order against a person to debar such person from being a director of a company or in any way be concerned or take part in the promotion, formation or management of a company for a specified period not exceeding 5 years if such person is a director of company which has contravened a competition rule and such person’s conduct as director makes him unfit.

56. Options (a) to (d) are enforcement options in the hands of the Commission and cannot be regarded as actions in prosecuting a criminal offence. As regards options (e) to (h), there will be proceedings in the Tribunal. Since the Tribunal does not have any criminal jurisdiction (as it has been made clear in Section 171), the applications for such relief cannot be regarded as the prosecution of a criminal offence.

57. Reading the Ordinance as a whole, the contravention of the first conduct rule is not regarded as a criminal offence in the statutory scheme to combat anti-competitive conduct. This accords with the conclusions reached by the President in Competition Commission v T.H. Lee Book Company Limited[2020] HKCT 12 at [7] and in the Sanction Judgment at [129] to [133].

58. There is therefore no basis for Mr Hui to import the requirement of mens rea on the part of the individual partners into proceedings for pecuniary penalty under Section 93. There is no room for the application of the principle in R v W Stevenson & Sons, supra and Riley v Director of Public Prosecutions, supra(which concerned convictions and trials of criminal offences) and our analysis above[5] as to the civil nature of the liabilities of each partner for the acts of the firm is not undermined by that case.

59. Lest it be thought that the President had not considered the state of knowledge of Tai Dou as to the anti-competition arrangements, such suggestion is refuted by a reference to [325] to [327] of the Judgment. In particular, the President made this finding at [327]:

“ 327. Despite KC Ho’s absence, based on all the other evidence there is no doubt that KC Ho and the team working there in the name of Tai Dou (R4) had engaged in the Floor Allocation Arrangement and the Package Price Arrangement. Counsel’s argument that there is a possibility that Tai Dou (R4) did not enter into any arrangement with others but simply obtained decoration work from the remaining floors because they were not allocated to any of the other respondents, seems to me, with respect, to be wholly unrealistic.”

60. Before us, Mr Hui did not challenge this finding and he accepted that there is no basis for disturbing the President’s conclusion on liability against Tai Dou.

61. Hence, with our rejection of the submission that the proceedings involved a trial of a criminal offence, it is plain that Mr Hui’s contention based on lack of finding of mens rea on the part of Mr Cheung and Mr Wong has no merit.

E. Order 81 Rule 1

62. Coming back to the naming of the 4^th Respondent, Mr Hui referred to a commentary in Hong Kong Civil Procedure 2021, vol 1 at paragraph 81/1/10 which suggested that because the liability of partners is joint and not several, “a suit by or against an ordinary partnership would have been defective for want of parties unless all the partners were before the court”.

63. It follows, Mr Hui submitted, that the Commission could not have been suing in respect of the joint liability stemming from the acts of the Tai Dou the firm since it was conceded by Mr Beard before the Tribunal that the Commission was not proceeding against the other two unnamed partners[6]. Therefore, the Commission was actually suing the two named partners as individuals regarding their own personal involvement in respect of the contravention of the first conduct rule.

64. With respect, we cannot accept these submissions.

65. Firstly, such submission ignored the reality as discussed in Section C above. All parties had proceeded in the Tribunal on the basis that Tai Dou the firm was the 4^th Respondent and Mr Cheung and Mr Wong were proceeded against by virtue of their capacity as partners of Tai Dou. In such circumstances, if there were irregularities in the naming of the 4^th Respondent, we see no difficulty in granting leave for such irregularities to be rectified insofar as it is necessary to do justice between the parties in light of the fact that Tai Dou had actually been party to the proceedings in substance and those acting for Mr Cheung and Mr Wong in the Tribunal were fully aware of the nature of the claims against them.

66. In so saying, we have not forgotten the concession of Mr Beard on Day 17 which was also taken up by the President at footnote 39 of the Judgment. However, the concession seemed to have been made on the basis it is legally permissible to sue in respect of the liability of the firm with the naming of some but not all the partners. Likewise, the President proceeded on that basis in the Judgment and the Sanction Judgment. As far as we are aware, no point had been taken before the Tribunal that one cannot pursue an application in respect of the liability of the firm without proceeding against all the partners.

67. This bring us to our second ground for rejecting Mr Hui’s submissions. As a matter of law, there is no rigid rule that in advancing a claim on a joint liability the plaintiff or applicant must join all the parties who were jointly liable to the proceedings. However, if objection is taken by a defendant that there were other parties who were jointly liable, the court may consider if such other persons should be joined as parties to the proceedings in the interest of justice. Thus, in Robinson v Geisel [1894] 2 QB 685, the English Court of Appeal refused to grant a stay of the action against some but not all of the joint guarantors because the plaintiff had done everything in his power to serve the remaining joint guarantor without success. In the context of legal proceedings against a partnership, it means that a plaintiff can sue some but not all the partners in respect of the liabilities arising from the business of the firm. Depending on the circumstances of the case, on the application of the defendants, the court may direct the other partners to be joined as parties, see Halsbury’s Laws of England, 5^th Ed. 2020, Vol 79 paragraph 84; Lindley & Banks on Partnership, 20^th Ed paragraphs 14-43 and 14-44. But the cause of action would not be defeated by non-joinder of parties.

68. As Mr Cheung and Mr Wong did not complain about non-joinder of the other two partners in the Tribunal and there was no application for staying the proceedings on that ground, it is not necessary for us to consider whether in the present case the other two partners should have been joined if such application were made. It suffices for us to hold that in light of the above analysis, Mr Cheung and Mr Wong cannot now rely on the omission to name the other two partners as a ground for challenging the finding of the Tribunal against them in respect of the contravention by Tai Dou.

69. The President did not find it necessary to address the question whether orders could be made against a firm under Sections 93 to 96 as a ‘person’ without naming any individuals. We are sure that the President has not overlooked Order 81 Rule 1 which, as far as we can see, is applicable to proceedings in the Competition Tribunal by reason of Section 4 of the Competition Tribunal Rules as there is nothing those rules negating such application. As explained by the President[7], the definition of “person” in the Ordinance is wide enough to cover a partnership. Hence, in terms of proceedings in the Tribunal in general, it is permissible to name a partnership as a respondent without naming all the partners. The effect would be the same as the naming of a firm in civil proceedings in the High Court, viz all the partners are treated to have been joined as respondents.

70. When the individual partners are not named, the enforcement of a judgment against the firm would be subject to the conditions laid down under Order 81 Rule 5.

71. We believe that the President had the practicalities of enforcement of orders other than that of pecuniary penalty in mind (as alluded to by us at [37]) when he eschewed expressing a view on the feasibility of suing a firm without naming the partners.

72. In the present case, as far as we are aware, the Tribunal has only imposed sanction by way of pecuniary penalty. In such context, we cannot see any difficulty regarding enforcement pursuant to Order 81 Rule 5 even if the individual partners were not named.

73. Mr Hui submitted that it was unjust that the Commission only targeted against Mr Cheung and Mr Wong in seeking pecuniary penalty. With respect, counsel failed to take account of:

(a)  As the penalty was ordered against the 4^th Respondent, the assets of the firm Tai Dou would be subject to execution;
(b)  Even assuming that enforcement actions were taken against the personal estates of Mr Cheung and Mr Wong, they would have the right to seek indemnity or contribution from their partners under the general law of partnership; and
(c)  As partners of Tai Dou, there is no injustice in sanction being imposed against Mr Cheung and Mr Wong.

F. Disposal of the appeal

74. For the above reasons, we dismissed the appeal with costs at the hearing on 5 May 2021.

G. The Respondent’s Notice

75. By the Respondent’s Notice, the Commission asked this Court to reverse the President’s ruling on the standard of proof in proceedings for pecuniary penalty. In Competition Commission v Nutanix Hong Kong Limited[2019] HKCT 2, the President held that the standard of proof is proof beyond reasonable doubt. That judgment was handed down on the same date as the Judgment. At [39] of the Judgment, the President adopted the same view in the present case. The Commission sought to argue that the standard of proof should be the civil standard of balance of probabilities with cogent evidence being required commensurably with the seriousness of the allegations.

76. Notwithstanding the sustained efforts of Mr Beard, we were not persuaded that we should determine this issue in this appeal when we had already concluded that the appeal by Mr Cheung and Mr Wong should be dismissed on the other grounds set out above. As the Commission is understandably anxious to have the question of standard of proof to be reconsidered at the appellant level, we shall explain in greater detail the reasons for our refusal to determine the issue in this appeal.

77. We have read the judgment in Competition Commission v Nutanix Hong Kong Limited and skeleton submissions of Mr Beard and Mr Hui and discussed the same amongst ourselves before the hearing. Our preliminary view was as follows.

78. Since it is common ground that proceedings for pecuniary penalty involved a determination of criminal charge for the purpose of art 11, the implication of art 11(1) on standard of proof as explained by the Court of Final Appeal in Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170 has to be considered. As mentioned in the course of hearing, one should start from the position is that in order to be art 11 compliant criminal standard of proof is the norm for the determination of criminal charges.

79. It is possible to have a statute providing otherwise if the relaxation of standard of proof can be justified according to the proportionality test. However, it is also common ground that the Ordinance does not contain any provision which explicitly spells out the standard of proof for penalty proceedings. Hence, one must first consider if the Ordinance has laid down by necessary implication that the standard of proof should be the civil standard before one considers the proportionality of such relaxation.

80. In short, if one cannot conclude by way of statutory interpretation that the Ordinance has provided for the civil standard to apply, the criminal standard should be applicable by virtue of the principle of legality as explained by Lord Hoffmann in Regina v Secretary of State for the Home Department, Ex parte Simms [2000] 2 AC 115 at p.131. If it is held that criminal standard of proof applies as a matter of statutory interpretation, no issue of proportionality arises.

81. The relevant approach for determining by way of statutory construction if a fundamental right like the one provided for under art 11(1) has been impliedly abrogated was discussed by the Supreme Court in Beghal v Director of Public Prosecutions [2016] AC 88 and recently applied by this Court in Kot See For v Lam Man Cheung[2021] HKCA 348. At [42] of the latter case, the Court held that purposive construction should consider whether the statutory objective would be nullified if full effect is given to the fundamental right.

82. The question of implied abrogation or derogation was addressed by the President at [63] to [67] of Competition Commission v Nutanix Hong Kong Limited, supra. He could not find such implication from the fact that civil procedure is adopted for the proceedings and the legislative materials. At [68] to [71], the President summarized the other points canvassed by the Commission but held that they were of no avail when there is no express provision or necessary implication for the application of civil standard.

83. One of these points was the difficulty in meeting the criminal standard of proof in the potentially complex and technical nature of the issues in competition proceedings, see [68] to [69]. On our reading of Mr Beard’s skeleton submissions, counsel relied strongly on this point to contend that the Ordinance has relaxed the standard of proof by necessary implication by virtue of the potential frustration of effective enforcement of competition law by a criminal standard of proof.

84. Whilst we can see that there is a reasonably arguable basis (and we put it no higher than that) for suggesting the President might not have given sufficient consideration to the potential frustration of effective enforcement in assessing if there is derogation by necessary implication (since he did not discuss this in the context of addressing the issue of necessary implication at [68] to [71] and this could be attributable to how the matter was argued before him by another leading counsel in Nutanix), we find it very difficult to assess the validity of this contention based on consideration of potential frustration on a high level of abstraction. With due respect, we do not think it is sufficient for us to adopt some passages from the decisions of the UK Competition Appeal Tribunal[8] or a textbook[9] on competition law as making good this contention.

85. We are not suggesting Mr Beard intended to invite us to take such a course. Counsel indicated that he would need to take us through the scheme of the Ordinance and the elements that the Commission would have to establish in respect of each type of anti-competition conducts and the different types of evidence the Tribunal would have to assess.

86. Whilst we would not doubt that, with his immense experience in this field, Mr Beard could provide the Court with able assistance in so doing, the actual facts and evidence in the present appeal are also relevant to our assessment of whether this appeal afforded a good opportunity to embark on such exercise. On the facts, the President was able to conclude that the contravention of the first conduct rule was proved on the criminal standard. We could discern nothing in the evidence that had been adduced in the trial which can give rise to potential frustration of the enforcement objective because the criminal standard of proof was applied.

87. Mr Beard urged upon us that there are other cases in which the different standards of proof could make a difference, not only in respect of actual penalty proceedings but also in respect of the Commission’s investigation and decisions on enforcement options.

88. We took such submission into account. However, in the end, we came to the clear conclusion that it would be much better for the argument of potential frustration of enforcement objective to be tested in an actual case where the application of criminal standard of proof would have a real impact. And it would also be much better if the Competition Tribunal (with its expertise in handling competition cases) have had the opportunity of dealing with this issue squarely and fairly with regard to actual (instead of conceptual or notional) evidential assessment in regard to specific pieces of evidence on a particular competition issue before the point is considered by the Court of Appeal.

89. In this connection, we disagreed with Mr Beard’s concern as to the futility of re-arguing the issue of standard of proof before the Competition Tribunal in light of the judgments in Nutanix and the present case. As we have highlighted above, it would appear that the angle of potential frustration of enforcement objective had not been fully canvassed, perhaps not surprisingly in light of the evidence and the contentious issues in these cases.

90. Mr Beard also advanced arguments based on the statutory scheme of the Ordinance and its similarities with overseas competition regimes where civil standard of proof is applied. However, there are also some special features in our Ordinance which we have highlighted in our directions of 4 May 2021:

(a) There is no parallel regime for criminal offence in respect of anti-competitive conduct as in England; and
(b) In Sections 45, 147 and 148, proceedings for pecuniary penalties are treated in the same manner as proceedings for other criminal offences under the Ordinance.

91. Also, at the time when the Competition Bill was debated, the legislature (and the administration which put forward the bill) was aware of the Court of Final Appeal’s judgment in Koon Wing Yee v Insider Dealing Tribunal, supra. Though the President attached little weight to it, the criminal standard of proof and Koon Wing Yee had been alluded to during the legislative debates. Notwithstanding this, the legislature did not include any specific provision in the Ordinance to stipulate that civil standard of proof is to be applied.

92. We do not express any view on these matters as we have not heard counsel on whether these features would affect, and if so how, the assessment of the implied derogation point. However, these may require further research and arguments than those which have already been placed before us.

93. Mr Beard relied on the observations of the Ma CJHC (as he then was) in Chit Fai Motors Co Ltd v Commissioner for Transport [2004] 1 HKC 465 at [20] to invite this Court to address the issue of standard of proof notwithstanding that we had been able to determine the appeal without doing so. In particular, counsel emphasized that this is a recurrent issue which has great public importance in relation to the development of competition law in Hong Kong.

94. We respectfully agree with Ma CJHC that this Court still retains a discretion to hear an appeal even though the lis between the parties has gone (whether by way of settlement or determination on other grounds). We also accept that there are cases where it is appropriate to exercise such discretion because of the great public interest in having the issue determined at the appellate level. However, the Court must still consider whether the appeal is the appropriate occasion to determine such important issue.

95. As highlighted by Lord Slynn of Hadley in Regina v Secretary of State for the Home Department, Ex parte Salem [1999] 1 AC 450 at p.457 (and cited by Ma CJHC at sub-paragraph (3) in [20] of Chit Fai), even in the public law context, the discretion must be exercised with caution. After all, it would not be in the public interest to have a highly controversial but important point determined when the Court does not find the underlying materials before it provides a solid basis for assessing the competing arguments.

96. Though the question of standard of proof, as analysed above, can be said to be a matter of statutory construction, for the reasons we have given above, the implied derogation point is not an issue which we found appropriate to be determined in the present appeal. We therefore declined to embark on such course.

Certificate for three counsel

97. We have already ordered Mr Cheung and Mr Wong to pay the costs of the Commission in this appeal. The outstanding issue is whether there should be certificate for three counsel.

98. In light of our above reasons for determining the appeal and declining to address the question of standard of proof, we would only give the Commission certificate for two counsel.

(M H Lam)
Vice President

(Aarif Barma)
Justice of Appeal

(Thomas Au)
Justice of Appeal

Mr Daniel Beard QC, Mr Abraham Chan SC and Mr Byron Chiu, instructed by King & Wood Mallesons, for the applicant

Mr Martin Hui SC, Mr Solomon Lam and Mr Joshua S Kanjanapas Wong, instructed by Henry Yu & Associates, for the 4th respondent

[1] Insofar as there were paragraphs in the Amended Notice of Appeal suggesting that some findings of fact were challenged in a general manner, they have not been pursued at the hearing of the appeal.

[2] Similar analysis was given by the President in the course of closing submissions when he invited submissions from counsel for the 4^th Respondent on the naming of 2 instead of all 4 partners of Tai Dou, see transcript of Day 16 at Appeal Bundle G p.1313 to 1314, in particular internal p.20 to 22. See also the submissions of Mr Beard before the Tribunal on Day 17 at Appeal Bundle G p.1358, internal p.58-59.

[3] See paragraph 1(b), (d), (g), (j), (l), (m), (q) of Schedule 3.

[4] See paragraph 1(c), (e), (h), (k), (n), (o), (p) of Schedule 3.

[5] At [39] to [41] above.

[6] As recorded in the transcript of Day 17 at Appeal Bundle G p.1358, internal page 58.

[7] At [87] of the Sanction Judgment, cited at [36] above.

[8] Napp Pharmaceutical Holding Ltd v Director General of Fair Trading [2002] CAT 1; JJB Sports PLC v Office Fair Trading [2004] CAT 17.

[9] Whish & Bailey, Competition Law 9^th Edn.

CACV 257/2019

[2020] HKCA 930

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 257 OF 2019

(ON APPEAL FROM CTEA 2/2017)

________________________

BETWEEN
	COMPETITION COMMISSION	Applicant
	and
	W. HING CONSTRUCTION COMPANY LIMITED	1^st Respondent
	(永興聯合建築有限公司)
	SUN SPARK CONSTRUCTION LIMITED	2^nd Respondent
	(裕輝建築有限公司)
	LAU CHUNG YAN (劉頌欣) and LAU CHUN KWOK ADAM (劉鎮國) (in partnership trading as	3^rd Respondent
	MAU HANG PAINTING & DECORATION CO
	(茂恒油漆裝飾公司))
	CHEUNG YIU FAI DANNY (張耀輝) and WONG TUNG HOI (黃東海) (in partnership trading as TAI DOU BUILDING	4^th Respondent
	TAI DOU BUILDING CONTRACTOR (大道建築公司))
	KAM KEE MACHINE ELECTRICAL IRON WORKS COMPANY LIMITED (金記機電鐵器工程有限公司)	5^th Respondent
	HUI TAK CHEONG KANLY (許德昌) and HUI TAK ON BRYAN (許德安) (in partnership trading as HIP YICK CONSTRUCTION COMPANY	6^th Respondent
	(協益建築公司))
	SUEN SIK KAU (孫錫球)	7^th Respondent
	(trading as TAI WAH CIVIL ENGINEERING (泰華土木工程))
	POON WAI WOON (潘維桓) and POON KAI WO JULIO (潘啟和)	8^th Respondent
	(in partnership trading as WAI SUN IRON & DECORATION CO
	(維新鐵器裝修公司))
	YEUNG KWOK YEE (楊國儀) (trading as WIDE PROJECT ENGINEERING & CONSTRUCTION CO (百達建築工程公司))	9^th Respondent
	LUEN HOP DECORATION ENGINEERING CO LIMITED	10^th Respondent
	(聯合裝飾工程有限公司)

_____________________________________

Before:

Hon Lam VP and Au JA in Court

Dates of Written Submissions:	1, 15 and 22 September 2020
Date of Judgment:	16 November 2020

________________________

JUDGMENT

________________________

Hon Lam VP (giving the Judgment of the Court):

1. This is an application by the Applicant (“the Commission”) to strike out parts of the Notice of Appeal filed by the 4^th Respondent on the ground that they amount to an abuse of process.

2. Having read the submissions lodged by the parties, we consider it appropriate for this application to be determined on paper without an oral hearing.

Background

3. In August 2017, the Commission commenced proceedings before the Competition Tribunal (“the Tribunal”) against a number of contractors appointed to perform decoration work in three buildings of On Tat Estate in Kwun Tong, alleging that they made or gave effect to an agreement or engaged in a concerted practice which contravened the first conduct rule in the Competition Ordinance (Cap 619).

4. The 4^th Respondent, as named in the proceedings (as well as in these appeal proceedings), is “Cheung Yiu Fai Danny and Wong Tung Hoi (in partnership trading as TAI DOU BUILDING CONTRACTOR (大道建築公司))”.

5. On 24 September 2018, less than 2 weeks before the pre-trial review, the 4^th Respondent took out an application to amend its Response and sought leave to file three new witness statements in substitution for a statement already filed (“the Amendment Application”).

6. At the hearing on 2 October 2018 fixed for the pre-trial review, G Lam J, sitting as President of the Tribunal dismissed the Amendment Application (“the Dismissal Decision”) after hearing parties’ submissions. On 31 October 2018, the Tribunal handed down its reasons for the Dismissal Decision ([2018] HKCT 6, reported in [2018] 5 HKLRD 437) (“the Reasons for the Dismissal Decision”).

7. The trial on liability commenced on 26 November 2018.

8. On 17 May 2019, the Tribunal handed down its judgment in which the Tribunal found that each of the 10 Respondents, including the 4^th Respondent, had contravened the first conduct rule ([2019] HKCT 3, reported in [2019] 3 HKLRD 46) (“the Judgment on Liability”).

9. On 14 June 2019, the 4^th Respondent filed its Notice of Appeal against the Judgment on Liability. The Commission filed its Respondent’s Notice on 5 July 2019.

10. Subsequently, dispute arose between solicitors for the Commission and solicitors for the 4^th Respondent as to whether documents in respect of the 4^th Respondent’s Amendment Application (“the Amendment Application Documents”) should be included in the appeal bundles. Solicitors for the Commission considered it necessary to include the Amendment Application Documents to show the inappropriateness of the 4^th Respondent’s attempt to re-run the case it sought to introduce by way of the Amendment Application. Solicitors for the 4^th Respondent took the view that the Amendment Application Documents have never been adduced as evidence in the Trial and should therefore be considered as new evidence in these appeal proceedings. The appeal bundles were eventually lodged without the Amendment Application Documents.

11. On 18 March 2020, the Commission took out a summons (“the New Evidence Summons”) to adduce the Amendment Application Documents into evidence for the purposes of these appeal proceedings.

12. Meanwhile, on 29 April 2020, the Tribunal handed down its judgment on the amount of pecuniary penalties that should be imposed on each Respondent and issues relating to costs ([2020] HKCT 1, reported in [2020] 2 HKLRD 1229) (“the Judgment on Penalties”).

13. After the Commission and the 4^th Respondent filed and served evidence and written submissions on the New Evidence Summons, on 21 July 2020, Lam VP directed that if the real complaint of the Commission is that it is an abuse of process for the 4^th Respondent to re-run a case based on the Amendment Application which had been rejected by the Tribunal, the proper course is to strike out the relevant part of the 4^th Respondent’s Notice of Appeal and evidence could be adduced to demonstrate such alleged abuse.

14. On 4 August 2020, the Commission made the present application to strike out the alleged offending parts of the 4^th Respondent’s Notice of Appeal.

Legal principles

15. The applicable legal principles are not in dispute.

16. The Court of Appeal has inherent jurisdiction to strike out a notice of appeal where an appeal is plainly not competent, or where the appeal is frivolous, vexatious or an abuse of process of the court. In the case of the latter, the inherent jurisdiction would be exercised on precisely the same basis as if Order 18 rule 19 applied to notices of appeal: Leung Chung Lan Lorraine v Hang Seng Bank Ltd[2019] HKCA 1408 at [34].

17. The categories of conduct rendering a claim frivolous, vexatious or an abuse of the process are not closed but depend on all the relevant circumstances and for this purpose considerations of public policy and the interests of justice may be very material. The court’s jurisdiction to strike out is discretionary and is only to be exercised in plain and obvious cases: Recorder Fok SC (as he then was) in Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35 at [27]-[28].

Discussion

18. The crux of the Commission’s complaint in the present application is based on the contention that the 4^th Respondent is seeking to run on appeal the same case it sought to introduce by way of the Amendment Application when there is no appeal against the Dismissal Decision. It is therefore necessary to discern the content of the proposed amendments.

19. By the Amendment Application, the 4^th Respondent applied for leave to introduce inter alia the following new pleas contained in the draft Amended Response of the 4^th Respondent to the Originating Notice of Application:

“ 6. In relation to paragraphs 3 and 4, it is further averred that at all material times:
(1) It is noted that, at paragraph 4, the Applicant has alleged that the 4^th Respondent consisted of Danny Cheung Yiu Fai (“Danny Cheung”) and Wong Tung Hoi, individuals in partnership trading as Tai Dou.
(2) However, Tai Dou is in fact a general partnership consisting of the following four general partners (“Partners”): (i) Danny Cheung; (ii) Wong Tung Hoi; (iii) Pacquet Wong Siu Wah (“Pacquet Wong”) and (iv) To Suet Chun.
…
(5) None of the Partners and/or the 4^th Respondents were engaged in and/or had undertaken any decoration works for the Tenants of the Units in the Three Houses of Phase 1 of the Estate (“Relevant Works”) …
   7.     It is further averred that:
(1)     The individual who had undertaken the Relevant Works was Mr Ho Kit Chung (“Mr Ho”). Mr Ho’s father was a long-time personal friend of the founder of Tai Dou, Mr Lau Yuen To and his wife, Ms To Suet Chun, a current partner of Tai Dou. …
(2)     In accordance with a long-standing and informal arrangement between Tai Dou and Mr Ho (as defined below as “the Arrangement”), Mr Ho undertook the Relevant Works as a sub-licensee or assignee of Tai Dou’s License issued by the HKHA.
   …
   11.     It is further averred that, at the material times:
(1)     The 4^th Respondent and/or the Partners did not undertake or engage in the Relevant Works. It was Mr Ho who had undertaken the Relevant Works. Paragraphs 6-7 above are repeated.
(2)     The 4^th Respondent and/or the Partners had sub-licensed or assigned Tai Dou’s rights under the License to Mr Ho.
…
(4)     By virtue of the aforesaid, Mr Ho operated as a separate and independent undertaking from the 4^th Respondent and/or the Partners in relation to the Relevant Works, within the meaning of an “undertaking” pursuant to s.2 of the Ordinance.
…
C. 4^th Respondent did not participate in the Relevant Works
   …
   19.     …
(7)     Thereafter, neither the 4^th Respondent, nor any other Partners, had any further participation and/or knowledge in relation to the Relevant Works after the briefing session on 20 August 2015. Paragraphs 5-6 [sic] above are repeated.”

20. The effect of the new pleas was summarized in the Tribunal’s Reasons for the Dismissal Decision as follows:

“ 5. Proceedings were brought in this Tribunal by the Commission’s Originating Notice of Application on 14 August 2017. A Notice to Act was filed by Messrs Littlewoods as solicitors for the 2^nd, 3^rd, 4^th, 6^th, 7^th, 8^th and 10^th respondents on 27 September 2017 together with a Response on behalf of those respondents filed pursuant to rule 75 of the Competition Tribunal Rules (Cap 619D). The Response denies that there was any market sharing agreement or price-fixing agreement as alleged. It is alleged, inter alia, that it was more economical for the respondents to carry out decoration work for flats located on the same floor and that the respondents were therefore inclined to seek business from tenants of the same floor. It is averred that, if the alleged agreements existed, they did not contravene the first conduct rule since they in fact enhanced overall economic efficiency.
…
7. On 19 April 2018, a witness statement made by Mr Ho Kit Chung (‘KC Ho’) was filed by Littlewoods on behalf of Tai Dou. In that statement KC Ho stated that he was the General Manager of Tai Dou and was authorised to make the statement on behalf of Tai Dou. He said that whenever Tai Dou was invited by the HKHA to be a decoration contractor for public housing units, Tai Dou would contact him. In response to the allegations about On Tat Estate, he said that Tai Dou did not enter into or authorised him or anyone to enter into any market sharing or price‑fixing arrangement. He said, however, that there was a ‘Cleaning Agreement’ among all the respondents whereby each respondent was to clean up four specified floors of each building …
…
12. The proposed Amended Response of Tai Dou was virtually a wholesale substitution of a new document for what had previously been pleaded. It sought to say that neither Tai Dou nor any of its partners undertook any decoration work in relation to the three buildings in On Tat Estate, and that it was KC Ho, with whom Tai Dou had a ‘long-standing informal arrangement since in or around 2006’, who undertook such work using the name of Tai Dou, as a sub-licensee or assignee of Tai Dou’s licence. Once Tai Dou received an invitation from the HKHA to obtain a licence as an approved decoration contractor for public housing units, Madam To, one of the partners of Tai Dou, would inform KC Ho who would then decide whether to undertake the decoration work as invited by the HKHA. Tai Dou ‘would then execute all necessary formalities to obtain a licence for the aforesaid decoration works’. In carrying out such work, KC Ho did not report to Tai Dou. He bore all the costs and retained all the revenues and profits. If it was necessary to enter into any agreement or sign any document which might have legal effect on Tai Dou, KC Ho would have to inform and obtain the agreement of Pacquet Wong, a partner of Tai Dou. It was, however, admitted that, in relation to On Tat Estate, Pacquet Wong replied to the HKHA to confirm Tai Dou’s acceptance of the appointment, executed a surety bond in the amount of HK$500,000, and accompanied KC Ho at the briefing session organised by the HKHA.
13. The proposed Amended Response went on to state that Tai Dou and its partners did not authorise KC Ho in the capacity of an agent or employee to undertake the relevant decoration work on behalf of Tai Dou or its partners, and that KC Ho operated as a separate and independent undertaking from Tai Dou and its partners in relation to such work. It was not admitted that KC Ho had made or given effect to the alleged market sharing agreement or price‑fixing agreement, or that those agreements had an anti‑competitive object or effect. It was said that Tai Dou did not make or give effect to the alleged agreements.
14. The proposed three new witness statements were made by Wong Tung Hoi, Cheung Yiu Fai Danny and Pacquet Wong, in support of the new case in the proposed Amended Response.” (emphasis added)

21. Shortly stated, the new case which the 4^th Respondent sought to introduce by way of the Amendment Application was what the parties and the Tribunal have been calling the “sub-contractor defence”. In the context of the 4^th Respondent, the sub-contract defence is comprised of the argument that the Commission had mistakenly named as respondent Cheung Yiu Fai Danny (“Mr Cheung”) and Wong Tung Hoi (“Mr TH Wong”) trading in partnership as Tai Dou Building Contractor (“the Partnership”), when it was the Partnership’s sub-contractor Mr Ho Kit Chung (“Mr KC Ho”) who undertook the works in the On Tat Estate (Phase 1) as a separate and independent undertaking.

22. As recorded in the Reasons for the Dismissal Decision, the 4^th Respondent had submitted before the Tribunal that the Commission would not require significant time to respond to the new case because the 1^st and 9^th Respondents had already raised the same sub-contractor argument (see [24]). Such submission was rejected by the Tribunal on the ground that the scope of an undertaking and whose acts may be attributed to it are fact-sensitive questions and there was no justification to force the Commission to squeeze its investigation, preparation and decision-making processes into the few weeks before the Trial (see [25]).

23. Notwithstanding the Dismissal Decision and the absence of appeal against the same, the 4^th Respondent made an attempt to run the sub-contractor defence in its closing submissions for the trial. The said attempt was addressed in the Judgment on Liability at [324]-[328]:

“ 324. Tai Dou (R4) is a partnership consisting of 4 partners, being the two persons named in the Originating Notice of Application (namely, Cheung Yiu Fai Danny and Wong Tung Hoi) as well as Mr Pacquet Wong and Madam To Suet Chun. It attempted at a very late stage to raise a similar argument [that the work on the Estate was carried out by a separate undertaking] but, for the reasons set out in this Tribunal’s Reasons for Decision dated 31 October 2018, was not allowed to do so. In so far as counsel sought in closing submissions to run the sub-contractor defence on behalf of Tai Dou (R4), I consider that the argument is inadmissible.
325. On the basis of its existing Response (filed jointly with the 2^nd, 3^rd, 6^th, 7^th, 8^th and 10^th respondents), Tai Dou (R4) admits that it attended the worship ceremony at the Site Office on 16 June 2016 and that lots were drawn there (though it is averred it was for the purpose of allocating desks in the Site Office). From the evidence, it can be seen that Pacquet Wong, an undisputed partner of Tai Dou (R4), signed the reply accepting the appointment as an Appointed DC, signed the surety bond, signed the Licence, signed and submitted to HKHA a list of staff and workers, attended the briefing session on 20 August 215 and named KC Ho as the contact person. The evidence shows that those working in On Tat Estate (Phase 1) in the name of Tai Dou (R4) included KC Ho and Ma Yick Yin.
326. A witness statement of KC Ho was originally filed on behalf of Tai Dou (R4), in which he described himself as the General Manager of Tai Dou (R4). … Ma Yick Yin was called, and said that he considered KC Ho the general manager of Tai Dou (R4), that he worked in On Tat Estate (Phase 1) in accordance with KC Ho’s instructions, and that he and the workers used business cards with Tai Dou (R4)’s name. There are also receipts issued to tenants bearing an oval chop stating “Tai Dou Building Co” in both Chinese and English.
327. Despite KC Ho’s absence, based on all the other evidence there is no doubt that KC Ho and the team working there in the name of Tai Dou (R4) had engaged in the Floor Allocation Arrangement and the Package Price Arrangement. Counsel’s argument that there is a possibility that Tai Dou (R4) did not enter into any arrangement with others but simply obtained decoration work from the remaining floors because they were not allocated to any of the other respondents, seems to me, with respect, to be wholly unrealistic.
328. It is clear that the undertaking operating in On Tat Estate (Phase 1) was the partnership Tai Dou. The two named persons each being a partner must be held responsible as persons comprised in the undertaking. Counsel’s argument that there is nothing to show that they personally took part in or were aware of the conduct impugned is beside the point.” (emphasis added)

24. Notably, after explaining that the 4^th Respondent’s argument based on the sub-contractor defence is inadmissible, the Tribunal went on to make a finding on the basis of the existing pleadings and evidence that the undertaking operating in the On Tat Estate (Phase 1) was the Partnership and that the two persons named as the 4^th Respondent (i.e. Mr Cheung and Mr TH Wong) must be held responsible as persons comprised in the same undertaking (i.e. the Partnership): see [328] quoted above.

25. It is also worth mentioning that in respect of the sub-contractor defence raised by the 1^st and 9^th Respondents, the Tribunal held that while the relevant sub-contractors may well be liable for the infringing conduct as another person comprised in the same undertaking, this does not preclude the Commission proceeding against the respondent contractor who retained a wide range of legal and economic obligations in relation to the works undertaken by their “sub-contractors” and must be regarded as a person comprised in the undertaking in question and therefore liable for the contraventions of the first conduct rule: see [301]-[323] of the Judgment on Liability.

26. The 4^th Respondent apparently made another attempt to run the sub-contractor defence at the hearing on penalties. Such attempt was again rebuked by the Tribunal. As held in the Judgment on Penalties at [79]-[81], [87]:

“ 79. There is no dispute that the value of the work orders done at On Tat Estate (Phase 1) in the name of Tai Dou Building Contractor is $2,943,630. The 4^th respondent submits, however, that the person who carried on renovation business there was KC Ho, not the partnership Tai Dou or the two individuals named in the Originating Notice of Application, namely, Mr Cheung Yiu Fai Danny (‘Mr Cheung’) and Mr Wong Tung Hoi (‘Mr TH Wong’). The Value of Sales of the 4^th respondent is therefore nil.
80. This submission is also to be rejected. The undertaking that is alleged by the Commission and found by this Tribunal to have operated in On Tat Estate (Phase 1) and, in the course of such operations, contravened the first conduct rule is Tai Dou, the partnership, as an undertaking. The ‘sub-contractor defence’ was held not open to the 4^th respondent. In any event, having regard to the Tribunal’s conclusions with respect to the defence raised by the 1^st and 9^th respondents, it would not have absolved the 4^th respondent altogether.
81. As is clear from the Originating Notice of Application, Mr Cheung and Mr TH Wong are proceeded against herein as persons ‘in partnership trading as TAI DOU BUILDING CONTRACTOR (大道建築公司)’ although, as a partnership, Tai Dou was registered as having four partners including, in addition, Madam To Suet Chun and Mr Pacquet Wong (the brother of Mr TH Wong). The Response that the 4^th respondent filed jointly with some other respondents did not in any way contend that the Commission has proceeded against the wrong person, and indeed contained a statement of truth signed by KC Ho as the ‘general manager of Tai Dou’ on behalf of the 4^th respondent.
…
87. … As explained in the Judgment, while the competition rules apply to undertakings, ss 92-94 of the Ordinance allow the Commission to apply for, and the Tribunal to make orders against persons who have contravened or been involved in a contravention of a competition rule. ‘Person’ as defined in s 2 of the Ordinance, in addition to the meaning given by s 3 of the Interpretation and General Clauses Ordinance (Cap 1), includes an undertaking. Where a partnership, as an undertaking, has contravened the first conduct rule, it seems to me generally that its partners as such are persons who have contravened the rule. An agreement entered into by a partnership is an agreement to which the partners are jointly party. Here, the persons specifically named in the Notice of Application are Mr Cheung and Mr TH Wong in partnership trading as Tai Dou. They were undoubtedly partners of Tai Dou and were proceeded against as such. As partners of Tai Dou, they joined in making and giving effect to the agreements in question which contravened the rule and therefore likewise contravened the rule: cf Clode v Barnes [1974] 1 WLR 544. Whether the application could have been brought against the partnership as a ‘person’ without naming any individuals does not strictly arise.” (emphasis in bold added)

27. It is against the above procedural history that the Commission now seeks to strike out paragraphs 1, 8(b), (c), (i), (j), (l), (m) and 9 of the 4^th Respondent’s Notice of Appeal on the ground that the 4^th Respondent is making yet another attempt to run the sub-contractor defence on appeal. Those paragraphs read as follow:

“ 1. Contrary to the Commission’s pleaded case and without an explanation of his reasoning for so doing, the Learned President equated the 4^th Respondent with Tai Dou Building Contractor (‘the Partnership’) and made findings against the 4^th Respondent based on the acts and/or omissions of other members of the Partnership and/or their agents. (Footnote 39 of the Judgment and §§324-328 of the Judgment);
…
8. The Learned President analysis of the evidence was flawed in that:
...
b. he failed acknowledge as significant the 4^th Respondent’s ignorance of and lack of participation in, the alleged contravening acts (either personally or through any employee(s)/contractor(s)/agent(s) of theirs);
c. he wrongly assumed the Pacquet Wong acted on behalf of the Partnership and/or the other partners when there was no evidence to that effect;
…
i. he was wrong to draw the inference that the 4^th Respondent attended the worship ceremony at the Site Office on 16 June 2016 by reason of the admission that KC Ho was there on behalf of the Partnership (§325 of the Judgment);
j. he was wrong to infer from the presence of KC Ho as a representative of the Partnership at the Worship Ceremony that he was authorised by the 4^th Respondent to participate in any drawing of lots in respect of any price fixing or market sharing agreement which took place on that or any other day, which drawing of lots is in any event denied;
…
l. he was thus wrong to infer that the 4^th Respondent or their employee(s)/contractor(s)/agent(s) had attended the alleged price fixing meeting and/or had participated in any price fixing or market sharing agreement which in any event occurred at a later date if at all;
m. he was wrong to infer the 4^th Respondent’s participation in or knowledge of price fixing or market sharing agreements from evidence that KC Ho had entered such agreements with the other Respondents;
…
9. Had the Learned President applied the correct approach in his analysis, he would have found that even if Pacquet Wong was guilty of the contravening acts through any of the workmen at the site, the Commission had failed to prove beyond reasonable doubt that those acts were done within the consent or connivance of the 4^th Respondent, and/or due to their neglect or omission; …”

28. Counsel for the 4^th Respondent, Mr Solomon Lam (with Mr Joshua S Kanjanapas Wong), submitted that although the 4^th Respondent is not allowed to run a positive case based on the sub-contractor argument by virtue of the Dismissal Decision, it is nevertheless entitled to require the Commission to prove its case and to appeal against the Judgment on Liability for any error.

29. To the extent that Mr Lam is pointing out that the Commission bears the burden to prove its case against the 4^th Respondent, that must be correct. On the other hand, we agree with counsel for the Commission, Mr Byron Chiu, that requiring the Commission to prove its case does not entitle the 4^th Respondent to raise arguments which are effectively running the sub-contractor defence by the back door.

30. As the Tribunal had observed in its Reasons for the Dismissal Decision, the focus of the Response filed on behalf of the 4^th Respondent (and other Respondents) plainly lies in the denial of any market sharing or price-fixing agreement and the positive averment that it was more economical to carry out decoration work for flats located on the same floor. As the pleadings stood at the time of the Amendment Application, the 4^th Respondent had not pleaded the sub-contractor defence but had instead admitted to attending the worship ceremony where lots were drawn. By virtue of the Dismissal Decision, this remained the case at trial. This set the limit to which the 4^th Respondent can manoeuvre in the conduct of this appeal.

31. Mr Lam was at pains to stress that the 4^th Respondent is not appealing against the Dismissal Decision. He however submitted that the 4^th Respondent is only precluded from running the sub-contractor defence but not adopting the stance set out in the grounds of appeal now under challenge.

32. Mr Lam suggested that the Commission had misread the 4^th Respondent’s Notice of Appeal. According to Mr Lam, the 4^th Respondent’s grounds of appeal are that the Tribunal had erred in equating Mr Cheung and Mr TH Wong with the Partnership and in finding Mr Cheung and Mr TH Wong liable for contravening competition rules without any evidential basis or finding that they personally had the requisite mens rea or mental state.

33. On behalf of the Commission, Mr Chiu contended that paragraphs 8(b), (c) and 9 of the 4^th Respondent’s Notice of Appeal are also liable to be struck out because they concern the argument that the 4^th Respondent should not be held responsible for the acts and/or omissions of other members of the Partnership. He submitted that such an argument is “strongly reminiscent” of the sub-contractor defence.

34. In our judgment, any attempt by the 4^th Respondent to rely upon the sub-contractor defence without appealing the Dismissal Decision constitutes an abuse of process and should be struck out. Without the sub-contractor defence, and in light of the pleaded case of the 4^th Respondent as outlined above, we agree with Mr Chiu that the 4^th Respondent should not be permitted to rely on any arguments in the appeal challenging the attribution of the acts of Mr K C Ho to the Partnership by the Tribunal.

35. On a careful and reasonable reading of the document, the 4^th Respondent’s Notice of Appeal includes grounds which make the impermissible challenge to such attribution:

(a)     Paragraphs 8(i) (j), and (m) contain references to the works in the On Tat Estate (Phase 1) having been carried out by Mr KC Ho as distinct from the Partnership;
(b)     Paragraph 8(l) contended that the Tribunal erred in concluding that the 4^th Respondent or their employee(s) /contractor(s) /agent(s) had attended the alleged price fixing meeting and/or had participated in any price fixing or market sharing agreement (by reference to Mr KC Ho’s participation in the same);
(c)     Though on its face Paragraph 1 is not specifically directed against the attribution of the acts of Mr KC Ho to the Partnership, it was specifically directed against footnote 39 of the Judgment and §§324-328 of the Judgment. These parts of the Judgment explained the attribution of the acts of Mr KC Ho to the Partnership.
(d)     If the sole purpose of paragraph 1 is to set out the argument now put before us by Mr Lam as summarized at [32] above, we cannot see any need to make reference to §§324-328 of the Judgment.
(e)     Actually the argument summarized at [32] has also been set out in the other paragraphs in the Notice of Appeal and repetitions at different paragraphs in the same Notice of Appeal is unnecessary and unhelpful.
(f)     To avoid any misunderstanding, we would strike out the references to §§324-328 of the Judgment in paragraph 1 of the Notice of Appeal.

36. The position regarding the other parts of the Notice of Appeal is different. To some extent, the position on the face of the Notice of Appeal was not very clear because of the inherent ambiguity in the reference to “the 4^th Respondent”: it can either be taken as a reference to the Partnership (viz the firm) or a reference to Mr Danny Cheung and Mr Wong Tung Hoi personally.

37. Based on Mr Lam’s submissions, we understand that the arguments raised in paragraphs 8(b), (c) and 9 are directed not at the finding against the Partnership (the firm), but rather at the finding that the 4^th Respondent (i.e. Mr Cheung and Mr TH Wong) should be held liable because of the finding against the Partnership. In that sense, paragraphs 8(b), (c) and 9 do not engage the impermissible challenge of attribution which Mr Cheung and Mr TH Wong are precluded by the Dismissal Decision from advancing in this appeal.

38. With this judgment, the permissible perimeters of the arguments to be entertained in this appeal should be clear to all parties.

Disposition

39. For the reasons stated above, the following parts of the Notice of Appeal filed by the 4^th Respondent are struck out as an abuse of the Court’s process:

(a) The reference to §§324-328 of the Judgment in Paragraph 1;
(b) Paragraph 8(i), (j), (l) and (m).

40. We regard the Commission has largely been successful in the application for striking-out. We make an order nisi that the 4^th Respondent do pay the Commission 80% of the costs of the application. Having regard to the statement of costs of the Commission, we fix such costs at $80,000. We shall make no order as to costs in respect of the New Evidence Summons.

(M H Lam)
Vice President

(Thomas Au)
Justice of Appeal

Mr Byron Chiu, instructed by King & Wood Mallesons, for the applicant

Mr Solomon Lam and Mr Joshua S Kanjanapas Wong, instructed by Bryan Chan & Co, for the 4th respondent

COMPETITION COMMISSION v. W. HING CONSTRUCTION COMPANY LTD AND OTHERS

Related cases with same parties

Files (2)

Appointed DC	Floors worked in Chun Tat House	Floors worked in Oi Tat House	Floors worked in Shing Tat House
W Hing (R1)	1, 11, 21, 31	4, 14, 24, 34	8, 18, 28, 38
Sun Spark (R2)	2, 12 , 22, 32	5, 15, 25, 35	9, 19, 29, 39
Mau Hang (R3)	3, 13, 23, 33	6, 16, 26, 36	10, 20, 30, 40
Tai Dou (R4)	4, 14, 24, 34	7, 17, 27, 37	1, 11, 21, 31
Kam Kee (R5)	5, 15, 25, 35	8, 18, 28, 38	2, 12 , 22, 32
Hip Yick (R6)	6, 16, 26, 36	9, 19, 29, 39	3, 13, 23, 33
Tai Wah (R7)	7, 17, 27, 37	10, 20, 30, 40	4, 14, 24, 34
Wai Sun (R8)	8, 18, 28, 38	1, 11, 21, 31	5, 15, 25, 35
Wide Project (R9)	9, 19, 29, 39	2, 12 , 22, 32	6, 16, 26, 36
Luen Hop (R10)	10, 20, 30, 40	3, 13, 23, 33	7, 17, 27, 37