Telecommunications – Competition provisions – Misleading or deceptive conduct – Sales practice – Standard of proof – Whether licensee exempt from liability where conduct committed by employee in course of employment – Telecommunications Ordinance (Cap 106) ss 7M, 36C

I-CABLE WEBSERVE LTD v THE TELECOMMUNICATIONS
AUTHORITY [2009] 6 HKC 275

Court of Appeal
Civil Appeal No 329 of 2008
Rogers VP, Le Pichon and Yuen JJA
7 April, 11 June 2009

Rimsky Yuen SC ( Jones Day) for the appellant.
Monica Carss-Frisk QC & Edward Alder
(Department of Justice) for the respondent.

The respondent Telecommunications Authority (the TA) held that the appellant had contravened s 7M of the Telecommunications Ordinance after two of its salespersons gave untr ue assurances to potential customers about certain programmes they could watch during the contract period. The appellant appealed to the Telecommunications (Competition Provisions) Appeal Board and before
giving its decision, the Appeal Board sought the Court of Appeal’s opinion by way of case stated. At issue were the correct standard of proof the TA should
apply and whether the appellant as a licensee-employer could be held liable
for the conduct of an employee despite prohibiting them from acting this way.

Held, answering the case stated:

Looking at the Telecommunications Ordinance as a whole and, in particular, ss 36B and 36C, there was no doubt that the effect of those provisions was regulatory or disciplinary. Those sections did not make a contravention of s 7M a criminal offence. The fact that the penalties which could be imposed under s 36C could not be described as de minimis did not of itself make the matters under s 7M criminal in nature. The standard of proof was a civil one. The TA was entirely correct in its approach.

The licensee-employer was not exempted from liability if the conduct giving rise to a contravention of s 7M was committed by an employee in the course of his employment but contrary to a prohibition issued by the licensee-employer. Liability on the licensee-employer’s part for conduct on the part of employees acting in the course of their employment could only be excluded by completely
effective preventative measures and any ineffective steps taken by the licensee to
prevent such conduct might rank only in mitigation of penalty.