AA v Securities and Futures Commission
Court of First Instance
Constitutional and Administrative Law List No. 41 of 2016
Zervos J in Chambers
13 January 2017

Parties – joinder – judicial review of decision of Securities and Futures Commission to transmit compelled answers, testimony and documents to foreign regulators – whether leave to be granted for Secretary for Justice to intervene in proceedings in respect of constitutionality of s. 181 – Securities and Futures Ordinance (Cap. 571) s. 181

In May 2016, Xs obtained leave (the “Leave Decision”) for judicial review of the decision of the Securities and Futures Commission (“SFC”) to transmit their compelled answers, testimony and documents to Japanese regulators (the “SFC’s Decision”). Xs sought a declaration that the SFC had thereby acted unlawfully, absent a binding prohibition of the use of those materials in criminal proceedings and/or a proper assurance against them, or their contents, being leaked to the media and otherwise made public; and a declaration that s. 181 of the Securities and Futures Ordinance (Cap. 571) (the “SFO”), contravened Art. 10 of the Hong Kong Bill of Rights (Cap. 383) and was unconstitutional. In February 2016, Xs had obtained an anonymity order requiring leave before the court file, including the Form 86 and supporting affirmations and documents relevant to the anonymity application, could be inspected by any interested party and the public (the “Anonymity Order”). In July 2016, the SFC informed the Department of Justice (“DoJ”) of the proceedings and invited the DoJ to consider joining as an interested party, enclosing a copy of the Form 86. In December 2016, the DoJ requested copies of all documents filed by the parties before deciding whether to intervene. The SFC then provided the parties’ affirmations, the Leave Decision, the originating summons and various court orders to the DoJ believing it was entitled to do so under s. 378(3)(f)(iii) and (5) of the SFO; which was in breach of the Anonymity Order. The present hearing was to determine applications by: (a) the Secretary for Justice (“SJ”), made on 23 December 2016, to join as an intervener in the proceedings but only on the issue of the constitutionality of s. 181 of the SFO; and (b) the SFC for an order that “retrospective leave be granted to [the SFC] to provide all Court documents and affirmations in these proceedings to the [DoJ].” Xs opposed the SJ’s application to intervene, relying on the SJ’s delay in making it until shortly before the hearing of the substantive judicial review hearing scheduled for 17 January 2017 and the resultant prejudice to them. At the hearing, the SFC sought to amend the order sought by inserting the words: “Without prejudice to [Xs’] right of action for any alleged breach of the [Anonymity Order], ...” (the “SFC’s Amendment”).

Held, granting the SJ’s application and dismissing the SFC’s application, that:

  • The constitutional importance of Xs’ challenge to s. 181 concerning the SFC’s regulation of the financial services industry; and that the SJ was the guardian of the public interest and had a legitimate interest in the outcome, warranted the SJ’s intervention.
  • As for Xs’ opposition to the SJ’s application, the SJ’s draft skeleton argument was filed on 11 January 2017 in compliance with the Practice Directions within three clear days of the substantive hearing. The SJ’s submissions would not significantly lengthen the hearing or disadvantage Xs. Further, to appropriately address Xs’ concerns, the constitutional issue could be dealt with on the last of the three days set aside for the substantive application. The SJ was accordingly joined as an intervener in the proceedings.
  • However, Xs’ objection to the SFC’s Amendment was valid, given the SFC conceded there was a breach of the Anonymity Order and the amendment still sought retrospective leave to regularise its conduct in the face of a possible action for contempt of court which Xs were entitled to make.
  • There was no wilful or serious infraction of the Anonymity Order by the SFC. What had occurred was an innocent oversight. Nor was there any prejudice or inconvenience caused. If the SFC had sought leave to supply the court documents to the DoJ, it would have been granted to enable the DoJ to consider whether to intervene. It was also significant that the SJ, having been allowed to intervene, would as a party to the proceedings have full access to the court documents in any event. However, the Court did not consider that the order for retrospective leave sought by the SFC, even in its amended form, was an appropriate order for the Court to make.
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