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INDEPENDENT COMMISSION AGAINST CORRUPTION HONG KONG SPECIAL ADMINISTRATIVE REGION Report for the Independent Committee in relation to fire at Wang Fuk Court in Tai Po January 2026

TABLE OF CONTENTS

Paragraph 1. THE ROLE OF THE ICAC

Statutory Responsibilities and Purview of ICAC 1 – 2

The Three-pronged Approach 3

Independent Oversight 4 – 5

The Nature of Corruption 6

CORRUPTION IN BUILDING RENOVATION WORKS Multiple Stakeholders 7 – 15

The Building Renovation Market 16 – 26

ICAC’s Strategy and Efforts in Combatting Corruption in Building Renovation Works 27

 Community Relations Department: Publicity and Educational Efforts 28

 Corruption Prevention Department: Systemic Prevention Work 29 – 32

 Operations Department: Law Enforcement Efforts 33 – 97

CONCLUSION Conclusion 98 – 101

1 CORRUPTION IN LARGE-SCALE BUILDING MAINTENANCE AND RENOVATION WORKS

THE ROLE OF THE ICAC Statutory Responsibilities and Purview of ICAC

The ICAC was established in 1974 under the Independent Commission Against Corruption Ordinance (Cap. 204) (ICACO) to combat corruption. Guaranteed by Article 57 of the Basic Law, the ICAC functions independently of the civil service and the Commissioner is directly accountable to the Chief Executive.

According to section 12 of the ICACO, the statutory duties of the ICAC include (a) to investigate complaints alleging corrupt practices, or alleged or suspected offences under the ICACO and the Prevention of Bribery Ordinance (Cap. 201) (POBO); (b) to examine the practices and procedures of Government departments and public bodies in order to facilitate the discovery of corrupt practices and to secure revision of work method or procedures which may be conducive to corrupt practices; and instruct, advise and assist any person, on the latter’s request, on ways in which corrupt practices may be eliminated; and (c) to educate the public against the evils of corruption, and enlist and foster public support in combatting corruption. In order to enhance the effectiveness of law enforcement work in combatting corruption, the ICAC is empowered under ICACO to also deal with certain scheduled offences (e.g. fraud, false accounting and conspiracy to defraud) and offences connected with or facilitated by corruption.

The Three-pronged Approach

In fulfilment of these statutory duties, the ICAC has since its establishment adopted a holistic three-pronged strategy in fighting corruption

2 through law enforcement, systemic corruption prevention and community education via the three functional departments, viz Operations Department, Corruption Prevention Department (CPD) and Community Relations Department (CRD). Over the past 50 years, this time-tested strategy which seeks to address both the symptoms and the root causes of corruption has kept Hong Kong’s corruption under control and built up a culture of probity with zero tolerance against corruption.

Independent Oversight

The work of the ICAC is scrutinised by four independent advisory committees each comprising, on top of a few ex-officio members, non-official chairman and members appointed by the Chief Executive. The Advisory Committee on Corruption oversees the overall operation and policy matters of the Commission, the Operations Review Committee (ORC) on the investigative work of the Operations Department, and the Corruption Prevention Advisory Committee and the Citizens Advisory Committee on Community Relations respectively on the preventive and education work of CPD and CRD1. All corruption investigations must be reported to the ORC for scrutiny. No investigation is concluded without the endorsement of the ORC.

This report delineates the enforcement, prevention and education work of the ICAC on large-scale building maintenance and renovation works2 (hereafter referred to as building renovations), identifies and examines the issues in the sector.

1 Reports of ICAC Advisory Committees included in the 2024 ICAC Annual Report https://www.icac.org.hk/icac/annual-report/2024/pdf/Reports_of_ICAC_Advisory_Committees.pdf 2 According to the amended Building Management Ordinance, which became effective on 13 July 2025, “large-scale maintenance procurement”, is defined as those with a proposed value exceeding, or likely to exceed, $30,000 per flat. These high-value procurements are governed by stricter statutory rules, including a threshold for in-person owner voting.

3 The Nature of Corruption

Before considering the relevant issues, it is first necessary to understand the nature of corruption. Corruption is seldom an end in itself, but rather a means to an end. It is usually a tool used by criminals to achieve their ultimate objectives. By its very nature, corruption is a secretive and insidious crime, and most people would never notice its existence. Unlike traditional crimes like murder or robbery, there is often no crime scene or readily apparent victim. The true victim of corruption, which is society as a whole, is generally unaware of being victimised. Invariably, both parties to a bribe, the offeror and the acceptor, stand to gain from corrupt quid pro quo arrangements. Both are satisfied customers and would have no incentive to disclose their corrupt dealings to outsiders. As can be seen in the case studies on ICAC’s enforcement efforts (paragraphs 44-96 below), these features take on their most extreme form in the building renovation sector, rendering corruption in the sector particularly difficult to crack. Before examining how criminals target that sector, the underlying landscape and its key features are discussed in detail below.

CORRUPTION IN BUILDING RENOVATION WORKS Multiple Stakeholders

The majority of Hong Kong’s seven and a half million inhabitants live and work in tens of thousands of densely populated multi-owned buildings. The ownership, rights and obligations between owners in the buildings (including scope of common areas), are set out in the relevant Deed of Mutual Covenant (DMC)3. Common areas (e.g. entrance lobbies) and facilities (e.g. fire service installations) in the buildings are co-owned by all owners, who are responsible for their maintenance

3 A DMC is a private contract entered into by the developer, the first purchaser and the property manager. It is registered in the Land Registry and binds all subsequent owners and property managers appointed from time to time.

4 and renovation. In addition to the owners, there are other stakeholders involved in building management and maintenance (BMM) matters4.

Property Owners and Owners’ Corporations

Property owners bear a collective responsibility for properly managing and maintaining the common areas of their buildings, and Owners’ Corporations (OCs) are usually formed as an independent corporate body set up under the Building Management Ordinance (Cap. 344) (BMO) to handle such matters. A Management Committee (MC) is elected by the OC to act on its behalf. In addition to the contractual obligations arising from the DMC, the BMO, a legal framework for the formation of OCs and MCs, sets out the powers and duties of OCs in respect of the management of the common parts of their buildings. MC members should be owners of units in the building. However, the secretary and treasurer need not be owners. Where a corporate property owner is appointed as an MC member, that corporate entity may appoint any person to act as its “authorised representative”5 who can be appointed key roles such as Chairman.

To assist OCs and MCs in carrying out their duties, the Home Affairs Department (HAD) has published “A Guide on Building Management Ordinance (Cap. 344)” 6, which outlines the main provisions of the BMO in layman’s terms.

Property Management Companies

In view of the wide range of matters arising in BMM, many OCs engage a property management company (PMC) to assist in the management of their buildings. As of early 2025, nearly 800 licensed PMCs and approximately 15,000

4 Building management oversees a building’s overall operation, including finances and other basic security and cleanliness aspects. Building maintenance focuses specifically on the physical upkeep of a building. Building management and maintenance are two closely related issues. https://www.bd.gov.hk/doc/en/resources/codes-and-references/code-and-design-manuals/bmg/ch3-1.pdf 5 Paragraph 11 of Schedule 2 of the BMO refers. 6https://www.buildingmgt.gov.hk/file_manager/en/documents/bmo_guide/a_guide_on_building_managemen t_ordinance_cap344_en.pdf

5 PMC staff provide property management services to over 2.4 million units of various types of properties in Hong Kong7, indicating a strong demand and reliance on property management services by property owners.

PMCs either are appointed as managers under the DMC or are appointed by owners on a service contract basis (i.e. management agreements) to undertake BMM responsibilities. Similar to OCs, PMCs must comply with financial and procurement-related requirements under the BMO. Schedule 7 of the BMO sets out the requirements with regard to the general duties of a PMC, which include financial arrangements and communications between owners, as well as the arrangements for procurement of goods, supplies and services. As such, PMCs are subject to statutory obligations under the BMO and the Property Management Services Ordinance (Cap. 626) (PMSO), as well as contractual duties under DMCs and management agreements with owners.

The PMSO, enacted in 2019, established a mandatory licensing regime for PMCs and all managerial or supervisory staff of PMCs, also referred to as Property Management Practitioners (PMPs). A PMC providing property management services to the buildings in Hong Kong is required to hold licences8 issued by the Property Management Services Authority (PMSA), which was established under PMSO to implement PMSO, ensuring PMCs and their PMPs meet prescribed standards of competence and integrity. PMSA also issues codes of practice and best practices, prescribes training requirements and carries out regulatory actions (e.g. revocation of licence) on disciplinary offences 9 , e.g. contravention of conditions imposed on the licence, misconduct or neglect in a

7 PMSA Annual Report 2024-2025, page 15 https://www.pmsa.org.hk/ebook/202405/en/15/ 8 PMSO prescribes seven categories of property management services, including (i) general management services; (ii) management of the environment; (iii) repair, maintenance and improvement; (iv) finance and asset management; (v) facility management; (vi) human resources management relating to personnel involved in the management of a property; (vii) legal services relating to the management of a property. PMCs providing two or more categories of services are required to be licensed. 9 In 2024-25, PMSA held in public a total of eight disciplinary hearings. Disciplinary actions taken including verbal warning, written reprimand, severe written reprimand and fine, etc. PMSA Annual Report 2024-2025, page 5 https://www.pmsa.org.hk/ebook/202405/en/4/

6 professional respect, thereby supporting the Government’s objective of professionalising the sector.

In the context of building renovation projects, PMCs and PMC staff play key roles alongside other stakeholders. Their operational proximity to both building renovations and day-to-day building management functions, such as coordinating OC meetings and related voting arrangements, as well as administering tendering processes, places them in positions of considerable influence over procurement decisions.

Consultants and Contractors

In view of the complexity of building renovation works, OCs always engage a consultant to carry out inspections to assess the condition of a building, determine the scope of repairs, manage tender selection exercises and oversee the renovation works at the site. For renovation works subject to statutory notices issued under the Mandatory Building Inspection Scheme (MBIS) 10, a Registered Inspector (RI) must be engaged to take up the role and fulfil the statutory duties as stipulated in the Buildings Ordinance (Cap.123) (BO), the Building (Minor Works) Regulation (Cap. 123N), the Buildings (Inspection and Repair) Regulation (Cap. 123P) (B(I&R)R) (paragraph 21 refers). Contractors are responsible for carrying out the actual renovation works. Pursuant to BO, contractors carrying out prescribed repair under MBIS must also be Buildings Department’s registered contractors (RCs), which must meet the technical requirements prescribed by the Buildings Department (BD)11.

10 https://www.bd.gov.hk/en/safety-inspection/mbis/index.html 11 The BO also requires building renovation works to be carried out by either Registered General Building Contractors or Registered Minor Works Contractors which must meet the technical requirements imposed by the BD for admission and retention onto the registers.

7 Other Stakeholders

In addition to those with direct involvement as mentioned above, the ecosystem surrounding building renovations involves a number of other stakeholders, including Government departments and public bodies. The ICAC deals with corruption and related criminal offences, whereas the Hong Kong Police Force (the Police) deals with criminal activities that are found in building renovations, such as triad involvement, and the Competition Commission (CC)12 deals with bid-rigging activities. The Urban Renewal Authority (URA) is responsible for implementing various supporting schemes to facilitate building rehabilitation. Other stakeholders include BD, HAD and PMSA, whose roles are mentioned in the respective parts of the report.

The Building Renovation Market

As buildings age, they naturally require regular maintenance and, on occasion, large-scale renovations. Owners may choose to undertake such renovations of their own volition, or be required to do so in accordance with existing legislation. The legal and regulatory regime mainly governing building renovations can be found in the BO, B(I&R)R and BMO. The BD is the custodian of the BO and its subsidiary regulations. HAD is the custodian of the BMO.

To tackle the long-standing problem of building neglect, the Government has launched various mandatory inspection schemes and subsidy schemes13 designed to ensure that private building owners discharge their legal

12 A Memorandum of Understanding (MOU) was signed between the ICAC and CC in December 2024 to facilitate future collaboration, which has included capacity building training and joint operations – see Case Study 3. 13 Other statutorily required building maintenance/improvement works include those on fire service installation and fire safety construction measures (enforced by the Fire Services Department and BD), lifts and escalators (by the Electrical and Mechanical Services Department), waterworks (by the Water Supplies Department), sewerage system (by Environmental Protection Department), etc. According to the information of the Development Bureau in 2023, the Government, since 2018, has injected over $19 billion through a number of subsidy schemes to assist property owners to carry out maintenance works in compliance with these statutory orders. https://www.devb.gov.hk/en/home/my_blog/index_id_1529.html?y=2023&p=1

8 statutory responsibilities for maintaining building safety. This report focuses on the framework established by the MBIS and its associated subsidy scheme Operation Building Bright (OBB) 2.0, which were launched in 2012 and 2018 respectively.

Under MBIS, BD selects target buildings aged 30 years or above (except domestic buildings not exceeding three storeys) using a risk-based approach with key factors such as building age, condition, and potential risk to the public. Owners of the selected buildings are issued with statutory notices requiring them to carry out prescribed inspections and repairs. Since the inception of MBIS, around 9,000 buildings, out of 20,000 buildings aged 30 years above in Hong Kong14, have been issued with MBIS statutory notices. In the past three years, around 600 MBIS notices were issued annually.15

OBB was first launched in 2009 to provide financial assistance to owners of old buildings to carry out repair works. In 2018, the Government tasked URA to implement OBB 2.0 16 to provide another round of subsidies. The Government has so far injected a total of $6 billion under OBB 2.0, and its third round of applications closed in September 2023.

OBB 2.0 aims to provide financial support for owner-occupiers of properties with a relatively low average annual rateable value17 to act in compliance with MBIS. Owners of buildings aged 40 or above can apply for OBB 2.0 subsidies regardless of whether the building is subject to MBIS order. Eligible applicants will be subsidised 80 per cent of the cost subject to a cap of $40,000 per unit. For elderly applicants aged 60 or above, they will be subsidised 100 per cent of the cost subject to a cap of $50,000 per unit. Under OBB 2.0, there are Category 1 buildings and

14 Secretary for Development’s opening speech at a Legislative Council meeting on 15.1.2026 https://www.info.gov.hk/gia/general/202601/15/P2026011500259.htm 15 BD’s Controlling Officer’s Report for the 2025/26 financial year, paragraph 7 https://www.budget.gov.hk/2025/eng/pdf/head082.pdf 16 https://www.brplatform.org.hk/en/subsidy-and-assistance/operation-building-bright-2-0 17 The average annual rateable value of domestic units in the building which sited in urban areas should not exceed HK$187,000 or should not exceed HK$143,000 if the building sited in the New Territories.

9 Category 2 buildings 18, with BD taking a more proactive role in the latter by exercising its statutory power to carry out the requisite inspection and repair works in default of owners who have difficulties in co-ordinating the works in compliance with MBIS.

Registered Inspectors (RI)

To implement the MBIS, the Government has since 2011 established the RI scheme specifically to provide a pool of accredited professionals comprising surveyors, engineers and architects. The intention of the RI scheme is to ensure the inspections and repairs mandated under the MBIS are carried out with technical rigour by qualified practitioners. The BO and B(I&R)R prescribe the provisions for the registration, appointment, control and duties of RIs. A Code of Practice 19 specifies the technical standards and procedural requirements for RIs when conducting inspections and repairs. As can be seen from BD’s publication “Layman’s Guide on Mandatory Building Inspection Scheme (Common Parts)”20, the RI plays arguably the most critical role before, during and after building renovations under the MBIS regime, which also means that he is most vulnerable to corrupt or other undue influence. According to the registers maintained by BD on its website, as at December 2025, about 600 persons were registered as RIs, of whom only 128 RIs had expressed an interest in providing MBIS services.21 The small pool of RIs available in the building renovation market heightens their vulnerability.

18 https://www.brplatform.org.hk/f/upload/13481/AN-OBB2.0_OO-ENG.pdf 19 https://www.bd.gov.hk/doc/en/resources/codes-and-references/code-and-design- manuals/CoP_MBIS_MWISe.pdf 20 https://www.bd.gov.hk/doc/en/resources/pamphlets-and-videos/LGMBISCP_e.pdf 21 https://www.bd.gov.hk/en/resources/online-tools/registers- search/registrationsearch.html?reg_type=RI(A),RI(E),RI(S)

10 Smart Tender Building Rehabilitation Facilitating Services Scheme

In 2016, the URA launched the “Smart Tender Building Rehabilitation Facilitating Services Scheme” (Smart Tender)22, a fee-based service scheme to provide technical support to owners in building rehabilitation projects. All private residential or composite (for both commercial and residential use) buildings not in single ownership (except buildings of three storeys or less and New Territories Exempted Houses) may use the Smart Tender services.

URA mandates the use of Smart Tender service for projects receiving Government subsidies. However, property owners not receiving Government subsidies can also use Smart Tender to procure service providers to carry out inspection services and repair works.

Under Smart Tender, URA provides a DIY toolkit that offers guidance on organising building repair and maintenance works. It also features an electronic tendering platform to facilitate the procurement of consultants and contractors. URA handles tender collection through a centralised and electronic approach, with a professional accountant (or independent professional) administering tender opening procedures. URA also engages independent professionals under term contracts, i.e. Building Surveying Consultants, to offer general advice during the tender stage, such as providing cost estimates for OCs’ reference.

To further address the issue of property owners or OCs lacking professional knowledge and experience in selecting service providers to carry out renovation works, and also the prolonged process for reaching a consensus, the URA launched a prequalification list of consultants and contractors in 2024.

Currently, the prequalification list comprises 71 consultancy firms and 108 contractors. Consultancy firms and contractors aiming for prequalification must

22 https://www.brplatform.org.hk/en/subsidy-and-assistance/smart-tender

11 meet a number of requirements, covering areas of technical competencies as well as certain integrity standards, such as no conviction records in the past five years under specified legislation, including POBO. However, the requirements rely largely on the applicant’s self-declaration.

ICAC’s Strategy and Efforts in Combatting Corruption in Building Renovation Works

Prevention is better than cure, and a comprehensive anti-corruption strategy cannot rely on enforcement actions alone. It must include the elements of education and prevention as core principles. The work of CRD and CPD in the building renovation sector is described below.

Community Relations Department: Publicity and Educational Efforts

CRD’s publicity and educational efforts on BMM aim to enhance stakeholders’ awareness and strengthen their ability to address corruption risks. On average, over 4,600 people from over 870 building management bodies including OCs were reached each year. The following initiatives are of note:

(a) CRD conducts proactive outreach to stakeholders in need, including newly established OCs, buildings served with repair orders, fire safety instructions, statutory notices for mandatory building inspections, and those that have successfully applied for various building safety and rehabilitation subsidy schemes, with a view to providing anti-corruption information and services. Over the past three years, CRD has issued over 4,000 letters to building management bodies, but the average response rate has remained low. It reflects the generally low level of interest in BMM matters among property owners and other stakeholders;

12 (b) There is active collaboration between the ICAC and HAD to disseminate probity messages to building management bodies and property owners with briefing sessions through HAD’s Central Platform on Building Management, district seminars, and feature articles in district Building Management Newsletter. In addition, the ICAC also proactively engages 18 District Councils, and OCs’ associations/alliances at the district level to promote integrity and gather feedback on the ICAC services;

(c) CRD has joined hands with the PMSA to enhance the professional ethics of the industry, and cooperates with relevant Government departments / organisations, including the BD, the Police, the URA, and other professional bodies, to promote integrity in BMM;

(d) CRD produces a wide range of reference materials, including toolkits, training videos, self-learning packages, feature articles, leaflets, and poster sets. These materials are uploaded to the ICAC’s “Integrity and Quality Building Management” thematic website to meet different stakeholders’ needs23;

(e) Enforcement actions are publicised through press releases and live- streamed press conferences where appropriate, to raise public awareness and vigilance against potential corruption risks in building renovations;

(f) In a recent drama series, ICAC Investigators (2024), one of the episodes featured the theme of building renovations in order to educate the general public against the evils of corruption in the sector;

(g) Advisory services are also available through the Integrity in Building Management Enquiry Hotline and its regional offices; and

23 ICAC Website “Integrity and Quality Building Management” https://bm.icac.hk/?lang=en

13 (h) Mindful of the fact that problems in the sector are long-standing and multi- faceted involving many stakeholders, the ICAC in June 2025 hosted the first ever Building Management Summit. This pulled together over 300 stakeholders, including representatives from a number of relevant Government departments, regulatory and professional bodies24 , District Council members from all 18 districts, OCs, property owners, and property management professionals. The summit served as a platform for direct exchange and cross-sector collaboration to tackle the problems.

Corruption Prevention Department: Systemic Prevention Work

CPD provides proactive and early-stage corruption prevention advice to relevant Government departments and public bodies in respect of their policies and initiatives regarding building renovations. This includes advice on registration of building professionals and contractors, as well as administration of the MBIS. CPD has also provided recommendations to HAD on legislative amendments to the BMO, including enhancement to procurement requirements (e.g. declarations of conflict of interest by stakeholders in tender exercises, particularly for building renovation projects) and improvements to proxy arrangements to prevent manipulation and falsification.

In situations where deeper systemic risks are identified (e.g. matters involving significant public interest, complex operational arrangements), CPD conducts targeted and comprehensive reviews of work systems and procedures of the Government departments and public bodies, through assignment studies. Such in‑depth studies are undertaken in accordance with CPD’s strategy of prioritising areas where systemic improvements can generate significant preventive impact, with the objective of enhancing governance and overall corruption‑prevention capability.

24 Buildings Department, Home Affairs Department, Hong Kong Police Force, Competition Commission, Property Management Services Authority, Urban Renewal Authority, Hong Kong Institute of Architects, Hong Kong Institution of Engineers and Hong Kong Institute of Surveyors.

14 31.

To support frontline implementation, CPD has developed a range of industry-specific preventive guidelines, toolkits and pamphlets that provide step‑by‑step guidance for OCs, PMCs and property owners on planning and managing building renovation projects 25 . These materials incorporate good-governance and integrity elements consistent with CPD’s partnership approach with regulatory authorities and professional bodies, and leverage the influence of these organisations to promote such principles to property owners. CPD has also organised training programmes to directly promote these integrity elements through active engagement with the sector, and help stakeholders implement sound governance practice.

However, no amount of educational material or preventative measures can be completely effective if unscrupulous elements deliberately circumvent the relevant requirements and guidelines. When that happens, it easily leads to complaints and allegations of corruption, bid-rigging, fraud and other illegal activities or improper conduct from property owners and others whose lives and livelihood are impacted by these criminals.

Operations Department: Law Enforcement Efforts

Corruption complaints concerning building renovations

Corruption complaints regarding BMM issues, which impact on the livelihood and well-being of the whole of the Hong Kong community, have for many years accounted for about 25% of all complaints made to the ICAC each year. Complaints relating to BMM can be divided into three main categories: building renovations, other maintenance and repair projects, and general property management matters (e.g. staff issues, building security, cleaning etc.). Most BMM

25 The CPD publications include (i) Building Maintenance Toolkit; (ii) Building Financial Management Toolkit; (iii) Building Management Toolkit; (iv) Property Management Corruption Prevention Red Flag; (v) Corruption Prevention Guide for Property Management Companies; and (vi) Corruption Prevention 101 – Building Maintenance Tips for Owners https://bm.icac.hk/Building_Maintenance_Toolkit.html?lang=en; https://bm.icac.hk/Pamphlets.html?lang=en

15 complaints comprise nothing more than the allegation based on suspicion, and generally lack any substantive supporting information.

The statistics below refer to complaints in respect of building renovations, which are the focus of this report, for the period 2023-2025.

Complaints

*A complaint may refer to a single block, or a single residential estate that comprises multiple blocks, and there may be more than one complaint about the same building / estate concerning different allegations.

Within the Operations Department, there is a dedicated group comprising around 50 investigating officers to deal with corruption complaints concerning BMM (including those relating to building renovations). Where necessary, officers from other investigation groups may be drawn to assist, or a task force may be set up to deal with major cases.

After the Operations Department receives a corruption complaint, a categorisation process takes place each working day at a meeting of the department’s directorate officers. Pursuable corruption complaints will be passed onto the investigation sections, while non-pursuable and non-corruption complaints may be referred to relevant departments or agencies for necessary actions, as appropriate.

In order to encourage the public to report corruption and because of the insidious nature of corruption as mentioned above, a low threshold is deliberately adopted for classification of pursuable complaints. Members of the public may report corruption simply based on their own suspicions, without the need to supply any corroborating evidence to support their allegations. Anonymous complaints may 2023 2024 2025 No. of corruption complaints* 76 63 100 No. of pursuable complaints* 70 57 93

16 also be investigated by investigation sections, depending on the level of information provided.

Focusing on the complaints regarding building renovations over the last three years (2023-2025), the figures above show that the Operations Department launched formal investigations in respect of 220 out of 239 complaints (or 92%). Due to the low threshold of launching an investigation, many complaints were investigated despite limited substance. This is because it is difficult to judge the substance of a case based merely on the surface of an allegation, so the ICAC will normally open an investigation when a traceable complainant makes a corruption allegation. Whether a case merits the allocation of more resources and subsequent in-depth investigation depends on the amount and reliability of information provided by the complainant, the findings of preliminary enquiries, and other factors such as previous investigations or other useful intelligence.

The role of the investigation sections is to find out whether the corruption allegation has substance and if so, who is involved, with the aim of gathering evidence to determine whether a criminal prosecution should be mounted.

For the purpose of investigation into corruption and its related offences, investigating officers are empowered by the law or, where appropriate, with court authorisation, to exercise powers of arrest, detention, search, access to accounts and tax records, restraint on assets, etc.

Under Article 63 of the Basic Law, the Department of Justice (DoJ) shall control criminal prosecutions, free from any interference. By the separation of investigation and prosecutions powers, the ICAC conducts investigations and analyses, and then forwards the case evidence to the DoJ for consideration of mounting a prosecution. Under the POBO, the consent of the Secretary for Justice is required for the prosecution of the offences listed in Part II of the POBO, which includes the main corruption offences of solicitation or acceptance of advantages,

17 bribery, corrupt transactions with agents and possession of unexplained property. Figures in relation to arrests and prosecutions concerning building renovations for the last three years are shown below.

Arrests and Prosecutions

*The number of persons prosecuted may may not refer to the persons arrested in the same year as it takes time to proceed from investigation to prosecution.

Early Intervention

According to the Prosecution Code, there must be legally sufficient evidence to support a prosecution, i.e. the evidence is admissible and reliable, and demonstrate that there is a reasonable prospect of conviction. This is a high threshold. The prosecution rates shown above reflect inherent challenges in investigating these cases. Therefore, the ICAC has to assess the likelihood of securing sufficient evidence to charge suspects, and balance this against the interests of the building owners. So, beyond conducting investigations and mounting prosecutions, the Operations Department also adopts early intervention tactics, when issues appear to be looming in a particular building or estate but where, despite suspicion, evidence is unlikely to be obtained. The aim is to alert building owners to possible risks of corruption, bid-rigging and/or other fraudulent activities, and to deter and frustrate criminal syndicates from pursuing their illicit plan. Over the last three years, the ICAC carried out early intervention in a total of 20 cases, involving 32 buildings / estates, in order to frustrate impending corrupt activities in the building renovation sector.

2023 2024 2025 No. of persons arrested 58 34 45 No. of persons prosecuted* 24 0 0

18 43.

The case studies below are a sample of the investigations conducted by ICAC into the building renovation sector. They highlight the nature of corruption and other criminal and illicit activities in the sector.

Case Study 1

In July 2013, a building renovation project of a private residential estate was awarded to a contractor at $262M. After that, a number of property owners made complaints to the ICAC alleging possible corruption in the project. However, the allegations were based mainly on the high contract price of the project and no useful information was provided to support the suspicion. Investigation of these complaints did not yield any fruitful results.

A few months later, a middleman came forward to make a report to the ICAC. Under caution, the middleman admitted his role in assisting the contractor to secure the renovation project. According to the middleman, other parties involved included some PMC staff, MC members as well as the consultant, who had secured his appointment for the project at an unreasonably low price of $880,000 (i.e. 0.34% of the project sum). Most bribe payments would be paid in cash and through middlemen. A number of dummy companies were also set up to participate and rig the tender exercises. The abovementioned compromised parties would allegedly share kickbacks from the contractor totalling around 17.5% of the project sum, i.e. $46 million. The middleman confessed that he reported the matter to the ICAC after failing to obtain his share of the payment.

During his report to the ICAC, the middleman further admitted involvement in scams at two other residential estates involving different syndicates. Similar deceptive and corrupt means were said to be employed by the other two syndicates.

Protracted enquiries by the ICAC identified the suspects and more associates, as well as some suspicious fund flows. An arrest and search operation

19 was mounted. Examination of voluminous seizures revealed that possible false accounting and business records were used to conceal suspected bribe payments. However, no witnesses were available to give evidence about the records, or otherwise against the syndicate.

Follow up investigation revealed suspicious bank transactions between an associate of the contractor and a maintenance manager of the PMC of the estate. Under caution, the maintenance manager admitted having accepted $200,000 for disclosing the tender information of other bidders to the associate, who however denied the allegation.

The middleman and the maintenance manager were charged with corruption offences and convicted upon their own guilty plea. The middleman, who was involved in corruption schemes across three residential estates, was sentenced to 35 months’ imprisonment after pleading guilty to four corruption charges. The maintenance manager was sentenced to six months’ imprisonment.

Subsequently, the middleman provided a non-prejudicial statement seeking to implicate other syndicate members. However, as his evidence was uncorroborated, and given his dubious credibility, the DoJ considered there was no reasonable prospect of convicting his accomplices, and hence did not advise prosecution.

This case exposed deeply embedded, organized crime in the building renovation sector. Criminals used cash, middlemen, dummy firms, and false records to evade detection. Protracted enquiries could not gather direct evidence against key syndicate members and, even when resorting to evidence from an accomplice, such evidence was tainted and considered unreliable for prosecution.

While most culprits escaped justice, the case was widely publicised and reported in the media, thus raising public awareness of possible corruption and bid- 20 rigging activities in the building renovation sector. On the other hand, the suspected bogus business transactions were subsequently referred to the Inland Revenue Department for follow-up on tax matters, in an effort to deter such financial fraud. Case Study 2 Paragraphs 53-59 refer to Operation “Fire Net”. Cases are pending trial and the contents of these paragraphs are sub-judice. ICAC Press Conferences: https://www.youtube.com/watch?v=6CDPv2uHm3w https://www.youtube.com/watch?v=x-Ih8vLJPlA Case Study 3 Paragraphs 60-66 refer to Operation “Shotgun”. Investigation is ongoing and disclosure of these paragraphs may prejudice ongoing enquiries. ICAC Press Conference: https://www.youtube.com/watch?v=K53MSR4QZfI ICAC Press Releases at Annexes A and B Case Study 4 67. This case involved a public housing estate under the Tenants Purchase Scheme, whereby 84% of the flats at the estate were sold to the tenants while the remainder were owned by the Government, represented by the Housing Department (HD), for public rental purposes. As a representative of the Government, one HD officer was a member of the MC of the estate, but HD policy was that the officer would refrain from voting on routine management matters so as to remain neutral.

21 68.

In June 2021, upon receipt of an MBIS order, the MC of the estate resolved to conduct a building renovation project and to conduct an open tender, instead of using the Smart Tender services of URA, to select consultant and contractor for the project. The MC conducted the tender exercise and appointed a consultancy firm to supervise the contract. The consultant subsequently gave an estimated cost of $171 million for the project. During the owners’ meeting for the selection of a contractor, many property owners considered that the price was unreasonably high and criticised the MC for not using the Smart Tender scheme of URA. Some property owners suspected proxy manipulation was involved in the owners’ meeting, which was then called off after much dispute.

At the same time, the ICAC received complaints from some property owners, alleging possible corruption between the MC members, including the Chairman and the consultant, based on the property owners’ dissatisfaction with the project as mentioned above. Meanwhile, due to strong opposition from property owners, no further owners’ meeting could be convened to select the contractor. On the other hand, property owners also reported to the Police suspected fraudulent activities related to the alleged proxy manipulation.

Protracted enquiries by the ICAC revealed that on several occasions, two triad members, who had business ties with the consultancy firm and some of the contractors bidding for the project, had met certain MC Members and a middleman. The triad pair might have given advice on how to convene an owners’ meeting to ensure that the tender exercise would result in the selection of the contractor that they had favoured. It also transpired that the pair might have assisted the MC Members to collect proxies from some property owners, in order to facilitate them to manipulate voting at the owners’ meetings to achieve outcomes in their favour.

Knowing that there would be no turning back once a contractor was selected, and that no amount of subsequent enforcement action would be able to protect the well-being of the property owners, ICAC apprised HD of the situation.

22 HD eventually agreed to participate in the vote at an owners’ meeting. In the end, the property owners resolved by a majority of votes to terminate the contract with the consultancy firm and re-tender for the project through the Smart Tender platform.

An arrest and search operation was then mounted by the ICAC. No useful evidence was unearthed during the operation and legal advice precluded prosecution due to a lack of evidence to prove corruption or other crimes. Afterwards, the case was referred to HAD and the HD for their actions in respect of the proxy management matter. In respect of the investigation by the Police on proxy manipulation, it was understood that no prosecution was initiated as there was no evidence to prove who had handled or submitted the proxies in question.

This case showed how undue influence could be exerted on an MC by triad members. In addition, it demonstrated that in Tenants Purchase Scheme estates, HD as a major landlord can play an important proactive role in safeguarding the integrity of building renovation projects. In this case, although extensive investigation could not secure sufficient evidence to prosecute the suspects, HD had exercised its voting rights in order to frustrate the syndicate in the execution of its scheme, thereby triggering a re-tender for the project using the Smart Tender platform. While Smart Tender is not fool-proof, the fact that the syndicate had tried every means to avoid using it suggested that it could be a useful barrier to some criminals.

Case Study 5

Paragraphs 74-78 refer to an ongoing ICAC investigation. Disclosure of these paragraphs may prejudice ongoing enquiries.

Case Study 6

Paragraphs 79-83 refer to an ongoing ICAC investigation. Disclosure of these paragraphs may prejudice ongoing enquiries.

23 Case Study 7

The PMC of one old private residential building also managed several other aged private residential buildings where renovation projects were being carried out or about to be carried out. In December 2023, the ICAC received an anonymous complaint alleging that the proprietor of the PMC had solicited or accepted bribes of 3% to 5% of the project sums from the consultants and contractors, in return for his assistance in securing renovation projects for the latter. According to the complaint, in order to facilitate the corrupt arrangement, the proprietor of the PMC required the contractors to purchase certain materials for the project from a designated supplier at an inflated price, with the inflated amount to be reverted as bribes to the proprietor. Based on ICAC’s assessment, an investigation was opened even though the complainant was anonymous.

Investigation revealed that, in a renovation project of the first building, the contractor had in fact purchased the materials from the designated supplier, and that a family member of the PMC proprietor had a financial interest in that supplier. However, protracted enquiries could not reveal any payment of bribes or suspicious contacts between the proprietor of the PMC, and the relevant consultants and contractors some of whom had triad background.

ICAC did not reveal any evidence to implicate the suspects in the corrupt arrangement. With regard to the potential conflict of interest arising from the financial interest of the PMC proprietor’s family in the materials supplier, the MC confirmed that they had no system in place to deal with such conflicts of interest.

Knowing that tender exercises were ongoing for renovation projects at four other private residential buildings managed by the PMC, the ICAC proactively approached the MCs of these buildings and alerted them to the risks of corruption involved in the tender exercises.

24 88.

Although the investigation was based on information supplied anonymously, it revealed possible corrupt involvement of the proprietor of a PMC in the tender exercises. The investigation could not secure sufficient evidence to initiate a prosecution, so an early intervention strategy was adopted to alert the MCs of the four other buildings managed by the same PMC to the risks of corruption. The MC also lacked the relevant knowledge to implement a system to deal with potential conflicts of interest26. Some of the buildings in this case also involved the MBIS, OBB 2.0 funding and use of the Smart Tender platform.

Case Study 8

Paragraphs 89-94 refer to an ongoing ICAC investigation. Disclosure of these paragraphs may prejudice ongoing enquiries. ICAC Press Release at Annex C

Summary

Even though the Smart Tender scheme was deployed in several of the renovation projects involved in these investigations, there was ample evidence of blatant manipulation of tender exercises to appoint consultants to oversee the projects, with the bids consistently being unreasonably low. On occasion, the RI appointed by the consultant to oversee the project was in fact a mere dummy, who exercised little or no supervision over the project, and was only appointed to satisfy the statutory requirements imposed under the BO. In many instances the contractor was often part of a crime syndicate with triad connection, who would collude with the consultant and other contractors to rig the bids, corrupt members of the MC and PMC, or deploy other illegal means (e.g. faking proxies) in order to manipulate the selection of the contractor for the project.

26 This situation has been overtaken by events since the BMO amendments that took effect on 13 July 2025. Now a responsible person for the procurement of large-scale building renovations has to make a declaration of any pecuniary or other personal interest in relevant suppliers.

25 96.

However, as will have become obvious from the investigations described, criminal activities in building renovations are inherently difficult to investigate and prosecute despite protracted investigative efforts, due to its secretive and syndicated nature. Corruption, undeclared conflicts of interest, fraud and bid- rigging are often hidden behind layers of intermediaries and shell companies. Infights and disputes always complicate the issue. The illicit payments are customarily made in cash making it difficult to trace illicit funds, let alone proving its corrupt purpose. Potential witnesses, if any (including property owners or junior staff members of contractors, consultants and PMCs), may fear retaliation especially when triads are involved. They are therefore often reluctant to come forward to assist. When there is not enough evidence to meet the high standard of proof required, criminal prosecution becomes impossible. Therefore, the ICAC also adopts a proactive approach intervention strategy to disrupt impending illegal activities taking into account the overall interests of property owners.

The ICAC has on different occasions learnt from senior office bearers of the professional bodies representing surveyors, engineers and architects registered in Hong Kong that their members are unwilling to join the building renovation industry. These and other similar anecdotal accounts strongly suggest that the industry is dominated by unscrupulous operators, many with triad or dubious background, which has deterred ordinary and innocent professionals from joining the industry due to intimidation and unfair competition (i.e. unrealistically low consultancy fees).

CONCLUSION

The building renovation sector in Hong Kong has become a huge and highly lucrative market, as a result of the confluence of legal and regulatory maintenance requirements and the continual funding sustained by property owners’ contributions and substantial Government subsidies under various rehabilitation

26 schemes. This high-value environment operates largely within a framework that is built on an honour system, which relies on trust and integrity on the part of the consultants and contractors to function. It however contains inherent and apparent structural vulnerabilities. The primary legal responsibility for maintenance of building lies with the property owners but, through no fault of their own, they often lack the specialized technical expertise and experience required to plan and oversee complex renovation projects. As a loose entity with collective responsibility, it is also challenging for property owners to reach a consensus and hence disputes are not uncommon.

This combination of high financial incentives and structural gaps has allowed the market to be infiltrated by unscrupulous operators. Organized syndicates, employing illicit methods such as corruption, triad tactics, bid-rigging and fraud to manipulate the tendering processes, are driven by the potential profits to seek a dominant market share. The presence and tactics of these actors have created an uneven playing field, leading many honest and reputable professionals to actively decline participating in the market because of concerns over unfair competition and professional integrity.

The result is a self-perpetuating cycle: the withdrawal of ethical professionals further distorts the ecosystem in favour of nefarious elements, limiting choices for property owners and entrenching the dominance of problematic service providers. This cycle cannot be broken and reversed without targeted intervention. Therefore, any proposed measures to rectify the situation must be designed to disrupt and drive out the bad players on one hand, and on the other to create a fair and attractive environment that encourages good players to join the industry, so as to rebuild public confidence. 27 101. For its part, the ICAC will continue to adopt the three-pronged strategy. Community education and systemic prevention work remain vital for strengthening the capacity and resilience of property owners and others to fight corruption and bid- rigging, by raising public awareness and strengthening procedural safeguards to plug loopholes in the system. On the enforcement side, the overall objective is to make corruption in the building renovation sector a high-risk crime which will create the deterrent effect to drive out the bad players. Despite inherent challenges in dealing with complex and syndicated crime in the sector, ICAC will continue to proactively and vigilantly investigate all allegations of corruption and seek to prosecute the offenders whenever possible. At the same time, early intervention strategies will also be actively deployed when appropriate to frustrate corrupt schemes before they can negatively impact on property owners. Given that we are fighting a multi-faceted problem, enhanced inter-agency collaboration and intelligence exchange with the CC and other stakeholder agencies will also be key priorities.

Independent Commission Against Corruption January 2026

Post-report note: Between February and May 2026, the ICAC mounted three major law enforcement operations against corrupt syndicates targeting building maintenance projects, including Operation “Lion Rock” and Joint Operation “Scabbard” with the Police (ICAC Press Releases at Annexes D to F). For Case Study 3, a further Press Release in relation to charging of suspects was issued by the ICAC on 25 March 2026 (Annex G).

INDEPENDENT COMMISSION AGAINST CORRUPTION 廉政 公 署 2024 年4 月18 日 新聞稿 聯合新聞稿：廉署與競委會首次採取聯合行動 搗破樓宇維修工程 貪污及圍標集團拘20 人 廉政公署(廉署)與競爭事務委員會(競委會)過去兩日(4 月16 日及17 日) 首次採取聯合行動，搗破一個新冒起的樓宇維修工程貪污及圍標 集團。廉署在聯合行動中拘捕20 名人士，分別為17 男3 女，年齡介 乎36 歲至70 歲，包括該集團的主腦及骨幹成員，涉及工程承辦商、 工程顧問、中間人、業主立案法團成員以及物業管理公司職員。 廉署與競委會於聯合行動中，根據法庭手令搜查了共約40 個處所， 包括多間工程承辦商、顧問公司及物業管理公司的辦公室，以及涉 案人士的住所等，並檢走多項證物，包括多部電腦及手提電話，以 及與樓宇維修工程相關的招標文件等。 在今次行動中，競委會行使了其強制權力，除了持法庭手令搜查處 所，亦要求有關各方交出文件和資料。行動期間，有個別人士拒絕 提供有關資料，妨礙競委會的調查工作，此為《競爭條例》第52 條 及第54 條所訂明的刑事罪行，競委會會作出跟進。 涉案公司及人士涉嫌行賄受賄以及從事反競爭行為，藉此操控樓宇 維修工程的招標程序，將工程標價誇大，協助與集團有關的承辦商 取得工程及顧問合約，並操控監督維修工程及發放工程費用，違反 《防止賄賂條例》第9 條及《競爭條例》的「第一行為守則」。 行動共涉及兩個位於港島的住宅屋苑及商住樓宇，以及四個位於新 界的住宅屋苑及工業大廈的多項維修工程項目，合約總值約1.8 億元， 個別合約金額由數百萬元至數千萬元不等。個別工程項目懷疑涉及 賄款逾100 萬元。其中一半涉案的維修工程合約仍未批出，而其餘的 維修工程則早於廉署及競委會展開調查前已經開始進行。 …/2 Annex A

• 2 -

廉署及競委會相信集團已被瓦解，但由於調查仍在進行，不排除再 採取執法行動。廉署及競委會現階段不會就有關案件作進一步評論。 今次廉署與競委會首次採取聯合行動，充分展現出雙方決心打擊涉 及樓宇維修的貪污及潛在反競爭行為。廉署及競委會會繼續與其他 執法部門及相關機構保持緊密聯繫，確保樓宇維修業的廉潔及公平 競爭，保障業主權益。

調查源自有熱心市民早前向廉署舉報涉及樓宇維修的貪污投訴，廉 署經深入調查後發現上述貪污及圍標集團，並揭發該集團涉及其他 屋苑／樓宇的維修工程。而競委會早前亦接獲情報，指有涉案的公 司於多個樓宇維修工程中，從事反競爭行為。競委會及後深入跟進， 並信納有合理因由懷疑有關項目已成為合謀的目標，因而將個案提 升至調查階段。

廉署呼籲，如業主或任何人士懷疑樓宇維修工程涉及貪污，應立即 向廉署舉報或查詢。廉署24 小時貪污舉報熱線：25 266 366。

競委會呼籲任何人士，如可就個案或有關反競爭行為提供資料，請 盡快透過電話(3462 2118)或電郵(complaints@compcomm.hk)與競 委會聯絡。競委會會將收到的所有資料保密，包括資料提供者的身 份。而認為自己可能已從事或牽涉入合謀行為的人士，則應盡快聯 絡競委會申請寬待或提供合作(寬待熱線：3996 8010、電郵： leniency@compcomm.hk)。

廉署一直以執法、預防及教育的「三管齊下」策略，打擊涉及樓宇 管理業的貪污情況。廉署繼續主動接觸大廈管理組織，呼籲業主積 極參與樓宇管理事務，對維修項目的貪污風險提高警惕。此外，廉 署與相關政府部門、監管機構、專業團體及商會等合辦各類誠信培 訓，加強業界人士的防貪能力建設，拒絕貪污誘惑。廉署亦製作了 多元實用的防貪教育資源並上載於廉署「誠信優質樓宇管理」專題 網站(bm.icac.hk)，同時亦設有誠信樓宇管理諮詢熱線2929 4555， 歡迎市民查詢。

廉署最近編製了《防貪攻略 – 樓宇維修》業主篇單張，列出在樓宇 維修工程中業主要留意的事項，並提供相關防貪建議及有用資料。 市民現可於廉署防貪諮詢服務網頁(cpas.icac.hk)下載有關單張。

…/3

Annex A

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樓宇維修是全港業主非常關心的議題，競委會一直主動跟進涉及相 關市場的個案。包括圍標在內的合謀行為，在《競爭條例》下屬於 嚴重反競爭行為，除了採取執法行動外，競委會一直積極推行宣傳 教育，以提升公眾對圍標這議題的認知，及協助採購人員加強防範， 當中包括於網站推出一系列教育資源，同時亦積極接觸各區人士， 出席由不同政府部門、區議會及公營機構舉辦的地區活動，向業主 及物業管理人員作講解。 另外，競委會亦推出了一套「不合謀條款」範本，供採購人員加入 其招標文件及採購合約內，以減低他們在採購過程中面對反競爭行 爲的風險。該條款旨在警告競投者不得作出反競爭安排，以及作出 這些安排的後果，一旦有違反條款的情況，亦可為採購方提供清晰、 直接的合約保障。

（完）

April 18, 2024

Press release

Joint press release: Twenty netted, syndicate smashed in ICAC and Competition Commission first joint operation against corruption and tender- rigging over building maintenance

The ICAC and the Competition Commission conducted their first joint operation in the past two days (April 16 and 17), neutralising a newly-rising syndicate engaging in corruption and tender-rigging in relation to building maintenance. In the joint operation, the ICAC arrested 20 persons, namely 17 men and three women aged between 36 and 70, including the mastermind and backbone members of the syndicate. The arrestees included project contractors, project consultants, middlemen, members of Incorporated Owners and members of property management companies.

In the joint operation, search warrants were executed by the ICAC and the Competition Commission to conduct searches at about 40 premises, including offices of the aforementioned project contractors, consultancies and property management companies, as well as residences of the individuals concerned. Various exhibits were also seized, including computers, mobile phones, and tendering documents relating to building maintenance projects, etc. …/4 Annex A

• 4 -

The Competition Commission has exercised its compulsory powers in the operation. In addition to searching premises with warrants, it also requested relevant parties to produce documents and information. During the course of the operation, certain individuals had refused to provide relevant information. The Competition Commission will follow up on this obstruction of its investigation powers, which is criminal in nature under Sections 52 and 54 of the Competition Ordinance. The companies and individuals concerned were alleged to have engaged in corruption and anti-competitive activities, contravening Section 9 of the Prevention of Bribery Ordinance and the First Conduct Rule of the Competition Ordinance. Through bribery means, they had allegedly manipulated the tendering exercises of building maintenance projects, exaggerated contracts sums, assisted associated contractors to secure maintenance projects and consultancy contracts, and manipulated project supervision and project payment release.

The operation involved renovation projects of a residential estate and a residential- commercial composite building on Hong Kong Island, as well as four residential estates and industrial buildings in the New Territories. Individual contracts of such renovation projects worth from several millions to several tens of millions dollars, totalling around $180 million. It is alleged that bribe payments of individual projects amounted to over $1 million. Half of the renovation projects were yet to be awarded, while works of the remaining projects had been launched prior to the commencement of the ICAC and Competition Commission investigations.

The ICAC and the Competition Commission believe that the syndicate concerned has been neutralised. As inquiries are ongoing, further law enforcement actions will not be ruled out. No further comment on the case will be made by the ICAC and the Competition Commission at this stage.

The joint operation conducted by the ICAC and the Competition Commission demonstrated the determination of the two agencies in cracking down corruption and potential anti-competitive activities in building maintenance. The two agencies will continue to maintain close liaison with other law enforcement agencies and related authorities to ensure a clean and level-playing field for the building maintenance industry and to safeguard the rights of property owners.

…/5

Annex A

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The investigations arose from a corruption complaint in relation to building maintenance lodged with the ICAC by members of the public. In-depth inquiries by the ICAC uncovered the aforementioned syndicate and their alleged involvement in other residential estates and buildings. Meanwhile, the Competition Commission had also received intelligence earlier alleging anti-competitive conduct in relation to various building maintenance projects. The Competition Commission followed up on the case and was satisfied that there was reasonable cause to suspect that the concerned projects had been the target of collusion. The Competition Commission therefore decided to escalate the case to the investigation phase. The ICAC calls on property owners and members of the public that, should they suspect corruption is involved in building maintenance, they should make enquiries or report to the ICAC. The ICAC’s report corruption hotline: 25 266 366.

The Competition Commission calls on anyone who can provide information on the matter or the relevant practices to contact the Competition Commission as soon as possible by telephone on 3462 2118 or by e-mail at complaints@compcomm.hk. The Competition Commission will keep any information provided, including the identity of informants, confidential. Those who consider that they may have engaged or been involved in cartel conduct should approach the Commission as soon as possible for leniency or co-operation (Leniency Hotline: 3996 8010; e-mail: leniency@compcomm.hk).

The ICAC has adopted a three-pronged approach of enforcement, prevention and education in fighting corruption in relation to the building management industry. The ICAC will continue to proactively approach building management bodies and encourage flat owners to stay vigilant against corruption in renovation works through active participation in building management. In collaboration with different government departments, professional bodies, regulators and trade associations, the ICAC will continue to organise integrity training to enhance practitioners’ anti- corruption capacity and resistance to bribery temptations. The ICAC has also produced a wide range of practical education resources which are available in the Integrity and Quality Building Management website (bm.icac.hk). Citizens are also welcome to call the Integrity Building Management Enquiry Hotline at 2929 4555 for ICAC services.

…/6

Annex A

• 6 -

The ICAC has recently compiled the “Corruption Prevention 101 – Building Maintenance Tips for Owners” leaflet, which lists out the key points-to-note in relation to building maintenance projects, and provides relevant corruption prevention suggestions and information. Members of the public can now download the leaflet from the ICAC Corruption Prevention Advisory Service webpage (cpas.icac.hk). Building maintenance has been a matter of great concern for property owners in Hong Kong, and the Competition Commission has been proactively following up on cases in the relevant market. Cartel conduct such as bid-rigging, is specified as a serious anti-competitive conduct under the Competition Ordinance. In addition to enforcement actions, the Competition Commission has been actively launching publicity and educational initiatives to raise public awareness of such anti- competitive conduct, and to assist procurers in strengthening their preventive efforts. Apart from rolling out a series of educational resources on its website, the Competition Commission also reaches out to the community by speaking at briefings organised by different government departments, District Councils and public bodies targeting property owners and property management practitioners across different districts in Hong Kong.

Separately, the Competition Commission has also published a set of model “Non- collusion Clauses” for procurers to incorporate into their invitation to bid documents and contracts, with a view to reducing their exposure to anti-competitive conduct during procurement exercises. In essence, the “Non-collusion Clauses” serve to warn bidders of the prohibition against, and consequences of, entering into anti- competitive arrangements, as well as to provide a clear and straightforward contractual remedy for procurers in the event that these clauses have been breached.

X X X Annex A

INDEPENDENT COMMISSION AGAINST CORRUPTION 廉政 公 署 2024 年8 月26 日 新聞稿 廉署與競委會再度展開聯合行動 打擊樓宇維修工程貪污圍標 廉政公署(廉署)與競爭事務委員會(競委會)一連兩日(8 月21 日及22 日)展開聯合行動。今次行動是繼4 月中兩個機構首次進行代號「獵 槍」的聯合行動打擊一個新冒起的貪污圍標集團後，經過四個月深 入調查，詳細分析所收集到的證據，發現該集團有其他涉嫌貪污和 圍標行為，遂展開進一步執法行動。 廉署於是次行動再拘捕5 人和會見22 人，包括工程承辦商、工程顧 問、中間人、物業管理公司及業主立案法團成員。 兩個機構在聯合行動中根據法庭手令搜查了共約20 個地點，包括多 間工程承辦商及顧問公司的辦公室，涉案人士的住所等，並檢走多 項證物。競委會亦行使了其強制權力，要求有關公司和人士交出文 件和資料，以及出席競委會的聆訊以提供相關資料。 涉案公司及人士涉嫌行賄受賄以及從事反競爭行為，藉此操控樓宇 維修工程的招標程序，將工程標價誇大，協助與集團有關的承辦商 取得工程合約。 是次廉署調查，主要針對兩個位於港島的住宅屋苑之維修工程，懷 疑涉及貪污罪行，工程合約合共約1.4 億港元。兩個屋苑均有該集團 骨幹成員涉嫌透過中間人，向業主立案法團成員提供利益，以確保 該集團控制的兩間建築工程公司，分別取得兩個屋苑的維修工程合 約，涉嫌違反《防止賄賂條例》第9 條。涉案的維修工程並未執行。 而競委會今次行動涉及38 個分別位於港島、九龍及新界的住宅屋苑/ 大廈及工業大廈的維修工程，涉案工程合約總值逾10 億港元，個別 合約金額達2.6 億港元，部份維修工程合約仍未批出，部份合約則已 被推翻，而個別維修工程早於競委會展開調查前已經開始進行。 …/2 Annex B

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在該38 個住宅屋苑/大廈及工廈的維修工程招標期間，涉案公司及人 士涉嫌直接，或透過中間人交換並協調投標價格，部分工程承辦商 則作掩護式投標，以操控投標結果。有關行為構成圍標、合謀定價 及交換影響競爭的敏感資料，違反《競爭條例》下的「第一行為守 則」。 由於調查仍在進行，廉署及競委會現階段不會就有關案件作進一步 評論。

連串的聯合執法行動，展現了廉署與競委會決心捍衛樓宇維修業界 廉潔及公平競爭的環境，絕不姑息有關貪污和反競爭行為。兩個機 構會繼續與其他執法部門及相關機構緊密合作，竭力打擊相關的犯 罪份子，保障全港業主的權益。

廉署呼籲，如業主或任何人士懷疑樓宇維修工程涉及貪污，應立即 向廉署舉報或查詢。廉署24 小時貪污舉報熱線：25 266 366。競委 會呼籲任何人士，如可就個案或有關反競爭行為提供資料，請盡快 透過電話(3462 2118)或電郵(complaints@compcomm.hk)與競委會 聯絡，而認為自己可能已從事或牽涉入合謀行為的人士，則應盡快 聯絡競委會申請寬待或提供合作（寬待熱線：3996 8010、電郵： leniency@compcomm.hk）。

廉署一直嚴厲執法打擊涉及樓宇管理界的貪污問題，同時以制度預 防及宣傳教育，加强樓宇管理組織及業主抵禦貪污的能力。廉署將 繼續主動接觸大廈管理組織，及早介入懷疑有貪污風險的大廈維修 工程，呼籲業主積極參與樓宇管理事務，對維修項目的貪污風險提 高警惕。針對樓宇維修工程中常見的貪污風險，廉署編製及派發了 《防貪攻略–樓宇維修》單張，為業主提供防貪建議及相關資料。 市民可於廉署防貪諮詢服務網頁(cpas.icac.hk)下載有關單張。此外， 廉署與相關政府部門、監管機構、專業團體及商會等合辦各類培訓 及講座，提升業界人士的專業誠信水平，提醒他們應堅拒貪污誘惑。 廉署亦製作了多元實用的防貪教育資源並上載於廉署「誠信優質樓 宇管理」專題網站(bm.icac.hk)，同時亦設有誠信樓宇管理諮詢熱線 2929 4555，歡迎市民查詢。

除執法外，競委會一直透過宣傳教育，加強公眾對圍標及其他合謀 行為的認知，同時亦協助採購人員加強防範，當中包括於網站推出 一系列教育資源，並積極接觸各區人士。過去一年，競委會出席了 19 個關於樓宇維修及管理的講座，接觸不同地區的業主、物業管理 人員，以及相關政府部門及公營機構，重點宣揚打擊圍標的訊息。 …/3 Annex B

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此外，競委會亦推出了一套「不合謀條款」範本，供採購人員加入 其招標文件及採購合約內，以減低他們在採購過程中面對反競爭行 爲的風險。該條款旨在警告競投者不得作出反競爭安排，以及作出 這些安排的後果，一旦出現違反條款的情況，亦可為採購方提供清 晰、直接的合約保障。該範本備有中、英文版本，採購人員可於競 委會網站www.compcomm.hk 下載使用。 （完）

August 26, 2024

Press release

ICAC and Competition Commission conduct second joint operation against corruption and bid-rigging over building maintenance

The ICAC and the Competition Commission conducted a joint operation code- named “Shotgun” for two consecutive days on August 21 and 22, following the two agencies’ first collaborated action in mid-April against a newly-rising syndicate engaging in corruption and bid-rigging. After a four-month in-depth investigation and detailed analysis of evidence collected, the two agencies discovered that the syndicate might have been involved in other suspected corruption and bid-rigging activities and therefore took further enforcement actions.

The ICAC further arrested five persons and interviewed 22 persons during this operation, including project contractors, project consultants, middlemen, members of property management companies, and members of Incorporated Owners (IO).

In the joint operation, search warrants were executed by the ICAC and the Competition Commission to conduct searches at around 20 premises, including the offices of various project contractors, consultancies, as well as residences of the individuals concerned. Various exhibits were seized. The Competition Commission has also exercised its compulsory powers in the operation, requesting relevant companies and individuals to produce documents and information, and to attend before the Competition Commission to provide information relating to the case.

…/4

Annex B

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The companies and individuals concerned were alleged to have solicited and accepted bribes and engaged in anti-competitive activities in order to manipulate the tendering exercises of building maintenance projects. They were also alleged to have exaggerated contract sums and assisted associated contractors in securing contracts of the projects. The investigation of ICAC mainly targeted renovation projects of two residential estates in Hong Kong Island, whereby corruption was suspected. The value of the two renovation project contracts was worth about $140 million in total. It is alleged that the backbone members of the syndicate, through a middle man, might have offered advantages to the IO members in order to ensure that the associated project contractors controlled by the syndicate would be awarded the renovation contracts of the two residential estates respectively, thus contravening section 9 of the Prevention of Bribery Ordinance (POBO). The renovation projects concerned have yet to be executed.

Meanwhile, the investigation conducted by the Competition Commission concerned renovation projects of 38 residential estates / buildings, and industrial buildings in Hong Kong Island, Kowloon and the New Territories. The value of the relevant renovation contracts totalled over $1 billion, with individual contracts worth as much as $260 million. Some of the renovation contracts concerned have yet to be awarded and some had been overturned, while works of individual projects had commenced prior to the commencement of the Competition Commission’s investigations.

During the tendering of renovation projects for the 38 aforementioned buildings, the companies and individuals concerned had allegedly manipulated the tender results by exchanging and coordinating bidding prices, either directly or through intermediaries, while some contractors had submitted cover bids. Such conduct would amount to bid-rigging, price-fixing and exchange of competitively sensitive information, contravening the First Conduct Rule of the Competition Ordinance.

As investigation is ongoing, no further comment on the case will be made by the ICAC and the Competition Commission at this stage.

…/5

Annex B

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The series of joint operations conducted by the ICAC and the Competition Commission demonstrate the determination of the two agencies in safeguarding a clean and level-playing field for the building maintenance industry, and that no corruption and anti-competitive conduct will be tolerated. The two agencies will continue to maintain close collaboration with other law enforcement agencies and related authorities to crack down on illegal activities and to safeguard the rights of property owners. The ICAC calls on property owners and members of the public that, should they suspect corruption is involved in building maintenance, they should make enquiries or report to the ICAC without delay. The ICAC’s report corruption hotline: 25 266

1. The Competition Commission calls on anyone who can provide information

on the matter or the relevant practices to contact the Competition Commission as soon as possible by telephone on 3462 2118 or by e-mail at complaints@compcomm.hk. Those who consider that they may have engaged or been involved in cartel conduct should approach the Commission as soon as possible for leniency or co-operation (Leniency Hotline: 3996 8010; e-mail: leniency@compcomm.hk).

The ICAC has all along been taking stringent enforcement action against corruption in the building management sector. The ICAC also actively supports flat owners and building management bodies (BMBs) in enhancing their anti-corruption capability through corruption prevention and education. The ICAC will continue to proactively approach BMBs and adopt an early intervention strategy, as well as to encourage flat owners to stay vigilant against corruption in renovation works through active participation in building management. To address the corruption risks in building maintenance projects, the ICAC has compiled and distributed the “Corruption Prevention 101 – Building Maintenance Tips” leaflet to provide corruption prevention suggestions and relevant information for owners. Members of the public can download the leaflet from the ICAC Corruption Prevention Advisory Service webpage (cpas.icac.hk). In collaboration with different government departments, regulators, professional bodies and trade associations, the ICAC will continue to organise integrity training to enhance practitioners’ professional conduct and resistance to bribery temptations. The ICAC has also produced a wide range of practical education resources which are available in the Integrity and Quality Building Management website (bm.icac.hk). Citizens are also welcome to call the Integrity Building Management Enquiry Hotline at 2929 4555 for ICAC services.

…/6

Annex B

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Apart from enforcement actions, the Competition Commission has been actively launching publicity and educational initiatives to raise public awareness of bid- rigging and other anti-competitive conduct, and to assist procurers in strengthening their preventive efforts. In addition to rolling out a series of educational resources on its website, the Commission also spares no effort in engaging with the community. Over the past year, the Competition Commission has attended 19 briefings on building maintenance and management, reaching out to property owners and property managers in various districts, as well as relevant government departments and public bodies, to promote the message of combatting bid-rigging. Separately, the Competition Commission has also published a set of model “Non- collusion Clauses” for procurers to incorporate into their invitation to bid documents and contracts, with a view to reducing their exposure to anti-competitive conduct during procurement exercises. In essence, the “Non-collusion Clauses” serve to warn bidders of the prohibition against, and consequences of, entering into anti- competitive arrangements, as well as to provide a clear and straightforward contractual remedy for procurers in the event that these clauses have been breached. Both Chinese and English versions of the model clauses are available for downloading at www.compcomm.hk. X X X Annex B

INDEPENDENT COMMISSION AGAINST CORRUPTION 廉政 公 署 2026 年1 月2 日 新聞稿 廉署打擊樓宇維修貪污團夥涉兩屋苑拘捕21 人 廉署上星期採取執法行動，打擊一個有黑社會背景人士操縱的樓宇 維修貪污團夥，涉及觀塘區兩個屋苑的大維修工程，先後拘捕共21 名人士，包括該貪污團夥的骨幹成員。 被捕人士為15 名男子及六名女子，年齡介乎30 至81 歲，包括中間 人、工程顧問、工程承辦商及屋苑業主立案法團成員，部分人有黑 社會背景。 廉署人員在行動中搜查多個地點，包括涉案工程顧問及工程承辦商 的辦公室，並檢走多項證物，包括相關的招標文件。 行動涉及觀塘區兩個屋苑的大維修工程。就其中一項工程，涉案工 程承辦商涉嫌透過中間人行賄工程顧問及屋苑法團部分成員，以取 得總值約3,300 萬元的工程合約。另一項工程則仍在籌備階段，涉案 中間人懷疑藉貪污手段收集業主的「委任代表文書」(俗稱授權票)， 企圖操控屋苑法團以協助日後取得相關維修工程合約。 廉署採取執法行動後，已主動聯絡兩個屋苑的相關持分者，提醒他 們在跟進涉案工程時需留意的貪污風險。 樓宇維修與廣大市民息息相關，牽涉不同持分者，廉署一直十分關 注相關貪污情況，採取結合專業執法、制度預防及社區教育的「三 管齊下」策略，透過嚴厲執法及適時主動介入，並與相關部門及機 構緊密合作和各司其職，全力打擊樓宇維修工程中可能涉及的貪污 及其他不法行為。此外，廉署為法團及業主提供實務指引，協助他 們規劃及管理樓宇維修項目，並舉辦專業培訓，協助業內各持分者 落實良好管治及有效內部管控制度。廉署又持續透過探訪、講座、 研討會等多元化渠道，向樓宇管理組織、地區治理團隊及業主講解 反貪法例，並鼓勵法團主動提升透明度，加強與業主溝通。 （完） …/2 Annex C

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January 2, 2026 Press release

ICAC arrests 21 in crackdown on building maintenance corruption syndicate linked to two housing estates

In a law enforcement operation mounted last week, the ICAC neutralised a building maintenance corruption syndicate controlled by individuals with triad background. A total of 21 people linked to two grand renovation projects in Kwun Tong district, including backbone members of the corruption syndicate, were arrested.

The arrestees, comprising 15 men and six women aged between 30 and 81, included middlemen, project consultants, project contractors and members of incorporated owners (IO). Some of the arrestees have triad background.

During the operation, ICAC officers searched multiple locations, including offices of the project consultants and project contractors, and seized various exhibits, including relevant tender documents.

The operation targeted the grand renovation projects at two housing estates in Kwun Tong District. In one of the projects, the project contractor had allegedly bribed the project consultant and some IO members through middlemen to secure works contract worth a total sum of about $33 million. In another project, which was at the preparatory stage, middlemen had allegedly collected instruments of proxy from flat owners by corrupt means in an attempt to manipulate the IO of the estate, so that the relevant renovation works contracts could be secured in future.

Following the enforcement action, the ICAC had proactively contacted relevant stakeholders of the two housing estates, reminding them to stay vigilant to corruption risks when handling the projects concerned.

Building maintenance is closely related to the public and involves multiple stakeholders. The ICAC has always attached great importance to corruption in building maintenance, adopting a three-pronged strategy of law enforcement, systemic prevention and community education in tackling these cases. In combating corruption and other illegal acts in building maintenance works, the ICAC has carried out vigorous law enforcement, made timely and proactive interventions, and worked closely with other departments and organisations in accordance with a clear division of labour. In addition, the ICAC has offered step‑by‑step guidance for IOs and property owners on planning and managing building maintenance projects. …/3 Annex C

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Professional training courses have also been organised to help different stakeholders in the sector implement good governance and robust internal control systems. The ICAC has also all along engaged with building management bodies, district governance teams and flat owners through various channels, including visits, talks and seminars, to explain to them the anti-corruption laws, and to encourage IOs to adopt proactive measures to enhance transparency and strengthen communication with flat owners. X X X Annex C

INDEPENDENT COMMISSION AGAINST CORRUPTION 廉 政 公 署 2026 年2 月13 日 新聞稿 廉署拘捕22 人涉七個屋苑及大廈樓宇大維修貪污阻截批出逾一 億元合約 廉政公署本星期初(2月9日及10日)採取代號為「獅子山」的執法 行動，打擊樓宇大維修工程涉嫌貪污及相關違法行為，涉及全港 多區七個屋苑及大廈，拘捕共22名人士。 被捕人士分別為17名男子及五名女子，年齡介乎36至78歲，包括 四間工程顧問公司及三間工程承辦商的董事及職員，以及部分 屋苑及大廈的業主立案法團(法團)主席。 廉署人員在行動中根據法庭手令搜查多個地點，包括涉案工程 顧問公司及工程承辦商的辦公室，並檢走多項證物，包括相關大 維修工程的招標和工程文件，以及銀行和會計紀錄。 行動涉及三個屋苑、三座單幢住宅大廈及一座工業大廈的大維 修工程，分布於全港多個地區，分別為荃灣、深水埗、大角咀、 新蒲崗、觀塘、上環及筲箕灣，工程合約金額介乎200萬元至逾 一億元，總值逾二億元。其中兩項總值逾一億元的工程仍在籌備 階段，廉署執法行動成功阻截批出工程合約。 廉署早前接獲貪污投訴，指有工程承辦商涉嫌藉貪污手段，行賄 工程顧問公司及法團成員以取得屋苑及大廈的大維修工程合約。 廉署調查發現，有工程顧問公司及工程承辦商的帳目懷疑造假 以掩飾不尋常收入及支出。調查又發現其中一名法團主席涉嫌 應入標工程顧問公司要求，洩露機密招標面試題目，協助對方成 功獲聘為相關工程的顧問。 相關貪污調查仍在進行，廉署不排除再有進一步執法行動。 廉署採取執法行動後，已主動聯絡有關屋苑及大廈的相關持分 者，提醒他們在跟進涉案工程時需留意的貪污風險。 Annex D

2 - 廉署一直密切關注涉及樓宇管理及維修的貪污情況，採取結合 執法、預防及教育的「三管齊下」的全方位策略，並會繼續與相 關政府部門及機構緊密合作，全力打擊樓宇維修工程中可能涉 及的貪污及其他不法行為。 廉署提醒公眾及相關業內人士，如懷疑任何與樓宇維修相關的 貪污行為，應立即向廉署舉報。廉署24小時舉報貪污熱線 : 25 266 366。 (完) February 13, 2026 Press release Twenty-two arrested by ICAC for suspected corruption in seven grand renovation projects preventing award of contracts worth over $100 million The ICAC mounted a law enforcement operation codenamed “Lion Rock” this week (February 9 and 10) to combat suspected corruption and other related illicit activities involving the grand renovation projects of seven housing estates and buildings across the territory, arresting a total of 22 individuals. The arrestees, aged between 36 and 78, are 17 men and five women, including the directors and staff members of four project consultancy firms and three project contractors, as well as some of the chairpersons of incorporated owners (IO) of the estates and buildings concerned. During the operation, search warrants were executed by ICAC officers to conduct searches at multiple locations, including offices of the project consultancy firms and project contractors. Various exhibits were also seized, including the relevant tender and works documents, as well as banking and accounting records. The operation involved the grand renovation projects at three housing estates, three residential buildings and an industrial building across the territory in Tsuen Wan, Sham Shui Po, Tai Kok Tsui, San Po Kong, Kwun Tong, Sheung Wan and Shau Kei Wan. The individual contract sum ranged from $2 million to over $100 million, while the total contract sum amounts to over $200 million. Two of the projects, worth totalling over $100 million, were still at the preparatory stage. The ICAC’s operation prevented the award of the two contracts concerned. Annex D

3 - The ICAC investigation arose from a corruption complaint alleging that certain project contractors might have offered bribes to project consultancy firms and IO members for securing the grand renovation projects of the housing estates and buildings by corrupt means. The ICAC investigation revealed that the project consultancy firms and the project contractors had fabricated their accounting records to cover up dubious incomes and expenses. The investigation also revealed that one of the IO chairpersons had allegedly divulged confidential tender interview questions upon the request of a project consultancy firm to assist the latter in securing a consultancy contract. As the relevant corruption investigation is continuing, the ICAC does not rule out further law enforcement actions. Following the enforcement action, the ICAC had proactively contacted relevant stakeholders of the housing estates and buildings concerned, reminding them to stay vigilant to corruption risks when handling the projects. The ICAC has always attached great importance to corruption in building management and maintenance, adopting a three-pronged strategy of law enforcement, systemic prevention and community education in tackling these cases. The ICAC will continue to work closely with other government departments and organisations in combating corruption and other illicit activities in building maintenance works. The ICAC urges members of the public and relevant industry practitioners that if they suspect corruption in building maintenance, they should report to the ICAC immediately through its 24-hour hotline (25 266 366). X X X Annex D

INDEPENDENT COMMISSION AGAINST CORRUPTION 廉 政 公 署 2026 年3 月30 日 新聞稿 廉署與警方採取聯合行動打擊黑社會滲透樓宇維修貪污拘42 人 廉政公署自去年中起陸續接獲市民貪污投訴，劍指一間工程顧 問公司涉嫌透過貪污賄賂，於不同屋苑協助工程承辦商取得樓 宇維修工程合約。 廉署進行詳細情報分析及深入調查後，發現該工程顧問公司涉 嫌先以不合理低價進場，獲取不同屋苑的樓宇維修工程顧問合 約，其後懷疑透過與其有關聯的黑社會人士充當中間人，以貪污 手段意圖操控工程招標程序，協助承辦商在個別屋苑獲取大額 工程合約。 有見及此，廉署及警方策劃部署聯合行動，上星期一連兩日(3月 26日及27日)採取代號為「劍鞘」的執法行動，聯手打擊黑社會 以貪污不法手段滲透樓宇維修工程，並掃蕩由相關黑社會操控 的非法場所。 廉署調查發現，涉案工程顧問公司涉嫌於2025年中獲得新界區 一個租者置其屋計劃屋邨的大維修工程顧問合約。該工程合約 估算逾1.6億元，而工程顧問公司以遠低於合理水平的價格(即合 約金額0.5%)，取得該工程的顧問合約。廉署懷疑工程顧問公司 其後透過黑社會成員，暗中聯繫有意投標的工程承辦商，以行賄 受賄方式，意圖操控工程招標程序。由於相關招標工作仍在籌備， 廉署相信是次執法行動已及早阻止有關貪污勾當，成功堵截黑 社會染指該屋苑的大維修工程。(圖1) 另外，該工程顧問公司於2022年獲得港島區一座單幢住宅大廈 的大維修工程的顧問合約。一間工程承辦商後來以2,000萬元獲 取該項大維修工程。廉署調查發現，該工程承辦商有多筆總額達 數百萬元的不尋常支出。該工程顧問公司的註冊檢驗人員則涉 嫌沒有履行檢驗職責而簽署建築物檢驗報告。由於該工程已經 展開，基於安全考慮，廉署已將事件轉介屋宇署跟進檢視。(圖 2) Annex E

2 - 該工程顧問公司又涉嫌與九龍區一座單幢住宅大廈的物業管理 公司董事，從一名工程公司東主收賄，於2026年初游說各業主以 高於市價約一倍價格，即約140萬元，將消防安全改善工程合約 判授予該工程公司。由於合約尚未批出，廉署相信行動已阻截相 關不法勾當。(圖3) 廉署在行動中拘捕10名男子，年齡介乎28歲至61歲，包括該間工 程顧問公司的東主及註冊檢驗人員、多名有黑社會背景的中間 人、兩間工程承辦商的東主及一間物業管理公司的董事。 廉署人員又根據法庭手令搜查22個地點，包括涉案工程顧問公 司及工程承辦商的辦公室，以及涉案人士的住所等，並檢走大量 證物，包括與樓宇維修工程相關文件，以及銀行和會計紀錄等。 廉署連日檢視有關文件，初步發現涉案公司懷疑有不少帳目造 假的情況，用以掩飾不尋常收入及支出。 在廉署進行拘捕後，警方隨即迅速搜查新界區多個相信由上述 有黑社會背景人士操控的不法場所，並成功搗破兩個非法麻雀 檔及一個百家樂賭檔，並拘捕32人，分別為14男18女，年齡介乎 30歲至75歲，罪名包括「營辦賭博場所」及「在賭場以外任何場 所進行賭博」。 「劍鞘」行動後，廉署已主動聯絡涉案屋苑及大廈的相關持分者， 提醒他們在跟進涉案工程時需留意的貪污風險。 廉署發言人表示：「廉署一直密切關注樓宇管理及維修的貪污情 況，並會繼續與警方及其他政府部門和監管機構保持緊密合作， 因應合適個案及早介入，全力打擊及堵截樓宇維修工程中潛在 及可能涉及的貪污及其他不法行為。『劍鞘』行動中兩項總值逾 1.6億元的工程尚未批出。相關貪污調查仍在進行，廉署不排除 再有進一步執法行動。」 警方發言人表示：「警方高度重視有不法份子涉嫌利用非法手段 干預樓宇維修工程，並會嚴正追究任何違法行為。警方重申，打 擊三合會活動為警方首要行動項目之一，警方絕不容許任何非 法、暴力或三合會的活動在社會上發生，並會聯同廉署和其他相 關執法部門繼續大力打擊相關的犯罪行為及其收入來源。」 Annex E

3 - 廉署呼籲公眾以及樓宇管理及維修相關業內人士，如懷疑任何 貪污行為，應立即向廉署舉報。廉署24小時舉報貪污熱線：25 266 366。警方亦呼籲市民尤其是業主，應該積極參與樓宇管理 事務並向執法部門主動舉報任何違法行為。 (完) March 30, 2026 Press release ICAC and Police joint operation against corrupt triad infiltration in building maintenance, arrest 42 The Independent Commission Against Corruption (ICAC) has received corruption complaints from the public since mid-2025, alleging that a project consultancy firm had assisted construction contractors to secure building maintenance contracts in various residential estates through bribery. Detailed intelligence analyses and intensive investigations by the ICAC revealed that the project consultancy firm, which had allegedly secured consultancy contracts of various building maintenance projects at unreasonably low fees, had engaged triad members linked to the firm as middlemen to manipulate the tendering process of the projects through corrupt means, aiming to assist contractors in securing a high-priced contract in a residential estate. In view of the findings, the ICAC and the Police mounted a joint operation codenamed “Scabbard” for two consecutive days on March 26 and 27, joining hands to crack down on triad infiltration in building maintenance projects through corrupt means, raiding premises controlled by relevant triads for illicit activities. The ICAC investigation revealed that the project consultancy firm secured the consultancy contract of the grand renovation project of a housing estate under the Tenants Purchase Scheme in the New Territories in mid-2025. The project sum was estimated to be over $160 million and the consultancy firm secured the consultancy contract at a price far below a reasonable level (i.e. 0.5% of the contract sum). It is suspected that the project consultancy firm would subsequently contact potential bidders through triad members, and by means of bribery, manipulate the tendering process. While the relevant tendering exercise is still at preparatory stage, the ICAC’s early intervention is believed to have prevented the corrupt dealings from taking place and intercepted triad infiltration in the grand renovation project of the Annex E

4 - housing estate. (Diagram 1) In addition, the project consultancy firm secured the consultancy contract for the grand renovation project of a residential building on Hong Kong Island in 2022. The project was subsequently awarded at $20 million to a project contractor, which had various dubious expenditures totalling several million dollars. Investigation by the ICAC also found that a registered inspector of the project consultancy firm was suspected of failing to fulfil his inspection duties and signed on Building Inspection Reports without conducting any inspection. As the project has already commenced, the ICAC has referred the incident to the Buildings Department for further inspection due to safety concerns. (Diagram 2) The project consultancy firm, together with a director of the property management company of a residential building in Kowloon, is also suspected of accepting bribes from a project contractor for lobbying its flat owners to award the contract of a fire safety improvement project to the contractor at approximately twice the market price, i.e. $1.4 million, in early 2026. The contract is yet to be awarded and the enforcement action of the ICAC is believed to have thwarted the illicit dealings. (Diagram 3) In the operation, the ICAC arrested 10 men aged between 28 and 61, including the proprietor and a registered inspector of a project consultancy firm concerned, several middlemen with triad background, the proprietors of two project contractors and a property management company director. ICAC officers also executed search warrants to conduct searches at 22 locations, including offices of the project consultancy firm and project contractors, as well as residences of the arrestees. Voluminous exhibits were also seized, including documents relating to the building maintenance projects, as well as banking and accounting records. Reviewing those documents, initial findings by the ICAC suggested that the companies involved in the present case might have fabricated accounting records to cover up dubious incomes and expenses. Following the ICAC’s enforcement actions, the Police swiftly launched raids at multiple locations in the New Territories believed to be controlled by the abovementioned individuals with triad background, shutting down two unlawful Mahjong dens and an illegal baccarat gambling den. A total of 32 individuals, comprising 14 men and 18 women, aged between 30 and 75, were arrested by the Police for offences including “operating gambling establishments” and “gambling in any place not being a gambling establishment”. Annex E

5 - Following the Operation “Scabbard”, the ICAC had proactively contacted relevant stakeholders of the housing estate and buildings concerned, reminding them to stay vigilant to corruption risks when handling the projects. An ICAC spokesperson said, “The ICAC has been paying close attention to corruption in building management and maintenance. The Commission will continue to work closely with the Police as well as other government departments and regulatory bodies to combat potential and suspected corruption and other illicit activities in building maintenance projects by intervention at an early stage in cases deemed appropriate. Works contracts of two projects worth totalling over $160 million revealed in Operation ‘Scabbard’ are yet to be awarded. The relevant corruption investigation is ongoing, and the ICAC does not rule out further enforcement actions.” “The Police is highly concerned about suspected illegal interference in building maintenance and management projects by criminals. Any illegal activities will be pursued resolutely. The Police reiterates that combating triad activities is one of the Force’s top operational priorities. The Police does not tolerate any unlawful, violent, or triad-related activities in society, and will continue to co-operate with the ICAC and other law enforcement agencies to combat related crimes and cut the source of income of criminals,” a Police spokesperson noted. The ICAC urges members of the public and practitioners of the building management and maintenance industry to report suspected corruption to the ICAC immediately through its 24-hour hotline (25 266 366). The Police also calls on citizens, particularly property owners, to proactively participate in building management affairs and report any illegalities to law enforcement agencies. X X X Annex E

6 - 圖1 圖2 Annex E

7 - 圖3 Diagram 1 Annex E

8 - Diagram 2 Diagram 3 Annex E

INDEPENDENT COMMISSION AGAINST CORRUPTION 廉 政 公 署 2026 年5 月5 日 新聞稿 廉署拘七人圖奪樓宇大維修工程 法團主席疑涉貪包庇承辦商 工程顧問隱瞞雙重身分 廉署上星期(4月27日及28日)採取執法行動，打擊一個專門針對 單幢樓宇大維修工程的貪污集團，拘捕五男兩女，年齡介乎37歲 至75歲，當中包括業主立案法團主席、工程承辦商東主，以及工 程顧問公司的董事和聘用的註冊檢驗人員。 廉署早前接獲市民舉報，懷疑位於旺角一座商住大廈的大維修 工程招標過程可能涉及貪污。廉署調查揭發被捕承辦商東主，涉 嫌透過親友暗中持有涉案工程顧問公司，用低價取得工程顧問 合約，並在招標過程中隱瞞承辦商及工程顧問的雙重身分和利 益衝突，意圖誘使法團揀選其工程承辦商進行大維修。 廉署調查發現，該工程顧問公司並沒有按法團要求，申報與該工 程承辦商的利益衝突，而業主立案法團主席懷疑縱容包庇，可能 涉及貪污。因有業主對招標過程存疑，涉案承辦商最終未能獲取 該項價值約2,000萬元的工程合約。 廉署調查又發現被捕註冊檢驗人員正職從事金融業，懷疑她在 有關工程並沒有根據建築物條例履行檢驗職責而簽署建築物檢 驗報告。廉署已同步將相關建築物檢驗資料轉介屋宇署跟進。 廉署人員在行動中搜查多個地點，包括涉案工程顧問公司及工 程承辦商的辦公室，以及被捕人士的住所，並檢走相關樓宇維修 工程文件和會計紀錄。 廉署在行動中發現涉案工程顧問公司及承辦商亦試圖透過隱瞞 關係和利益衝突，以取得另外兩個位於大坑及深水埗的樓宇大 維修項目，有關工程正進行招標，合約價值共約600萬元。廉署 行動成功堵截有關非法行為，過程中亦已提醒相關業主代表在 判授合約時要留意的貪污風險。 Annex F

2 - 相關貪污調查仍在進行中，廉署不排除再有進一步執法行動。 廉署呼籲公眾以及從事樓宇維修及管理業人士，如有任何貪污 懷疑，應立即向廉署舉報。廉署24小時舉報貪污熱線：25 266 366。 (完) May 5, 2026 Press release Seven arrested by ICAC for alleged bribery for conniving at concealment of contractor’s dual role as consultant in grand maintenance projects Last week (April 27 and 28), the ICAC conducted an enforcement action against a corruption syndicate specifically targeting grand maintenance projects of single- block buildings, arresting five men and two women, aged between 37 and 75, including the chairman of an Incorporated Owners (IO), the proprietor of a project contractor, and directors of a project consultancy firm and a registered inspector employed by the firm. The ICAC received a public complaint alleging possible corruption in the tender exercise for the grand maintenance project of a single-block composite building in Mong Kok. Investigations revealed that the arrested project contractor’s proprietor allegedly controlled the project consultancy firm through his associates, secured the consultancy contract for the grand maintenance project at a low price, and concealed his dual roles as project contractor and consultant, along with his conflicting interests during the tendering process, with intent to induce the IO to select his company as the project contractor. ICAC enquiries found that the project consultancy firm concerned did not declare its conflicting interests with the project contractor as required by the IO, while the IO chairman was suspected of bribery for conniving at the concealment. As property owners surmised irregularities in the tender exercise, the project contractor eventually failed to secure the $20 million works contract. It was also revealed in the ICAC investigation that the arrested registered inspector, who maintained a full-time job in the finance industry, might not have discharged her inspection duties in accordance with the Buildings Ordinance when signing Building Inspection Reports. The ICAC has referred the relevant inspection information in parallel to the Buildings Department for follow-up action. Annex F

3 - ICAC officers conducted searches at multiple locations, including the offices of the project consultancy firm and the project contractor, as well as residences of the arrestees, seizing relevant documents related to the grand maintenance projects and accounting records. It was revealed in the ICAC operation that the project consultancy firm and project contractor also concealed their relationship and conflicting interests in two other grand maintenance projects currently undergoing tender exercises – one in Tai Hang and another in Sham Shui Po – to secure contracts with a total contract sum of about $6 million. The ICAC successfully intercepted these illicit activities and reminded property owners of potential corruption risks during contract awards. As the relevant corruption investigation is ongoing, the ICAC does not rule out further enforcement actions. The ICAC urges members of the public and practitioners in the building management and maintenance industry to report suspected corruption to the ICAC immediately through its 24-hour hotline at 25 266 366. X X X Annex F

4 - Annex F

INDEPENDENT COMMISSION AGAINST CORRUPTION 廉 政 公 署 2026 年3 月25 日 新聞稿 廉署持續打擊樓宇大維修工程貪污起訴五人涉三個屋苑 廉政公署持續打擊樓宇大維修工程貪污，星期一(3月23日)分三 宗案件落案起訴五名人士，控告他們涉嫌就三個屋苑的大維修 工程，行賄有關屋苑的業主立案法團(法團)成員及業主代表。三 個涉案屋苑的工程總值約9,000萬元。案件今早(3月25日)在東區 裁判法院提訊。 廉署一直密切關注涉及樓宇管理及維修的貪污情況，採取結合 執法、預防及教育的「三管齊下」的全方位策略，並持續與相關 政府部門及機構緊密合作，全力打擊樓宇維修工程中可能出現 的貪污及其他不法行為。 廉署早前與競爭事務委員會採取代號為「獵槍」的聯合行動，成 功搗破一個涉嫌透過貪污和圍標手段，以操控樓宇維修工程招 標程序的犯罪集團。經深入調查及徵詢法律意見後，廉署落案起 訴四男一女。 五名被告為張烱權、周淑霞及三名中間人黃湘豫、鄭國歡及江寶 材，年齡介乎42歲至70歲，共被控八項罪名，即七項向代理人提 供利益罪名，違反《防止賄賂條例》第9(2)(a)條，以及一項串謀 向代理人提供利益，違反《防止賄賂條例》第9(2)(a)條及《刑事 罪行條例》第159A條。 涉案三個屋苑分別為柴灣茵翠苑、堅尼地城海都樓及葵涌怡勝 花園，它們案發時正展開大維修工程。 首宗案件控罪指張烱權及茵翠苑時任法團秘書周淑霞涉嫌於 2022年9月至2023年2月期間，串謀向屋苑一名時任法團成員提 供一筆金額不詳的賄款，以協助與張烱權有聯繫的承辦商取得 該屋苑的大維修工程合約。該法團成員拒絕受賄，亦沒有協助相 關承辦商取得工程合約。案發時，茵翠苑業主大會通過以約3,900 萬元將相關大維修工程合約判給志富建築(集團)有限公司，但其 Annex G

2 - 後在另一業主大會推翻有關決定。周淑霞當時正為張烱權的一 間公司工作，而她出任茵翠苑法團秘書時，並非屋苑的業主或居 民。 另一宗案件涉及海都樓的大維修工程，最初居民通過決議，將有 關工程以約3,100萬元判給祥利建築公司(祥利)，但部分海都樓 業主其後入稟土地審裁處，要求推翻該決議。相關三項控罪指鄭 國歡及江寶材涉嫌於2022年10月至2024年2月期間，先後向一名 海都樓業主代表提供一封未有指明金額的利是及兩筆分別為數 萬元及50萬元的賄款，以協助游說其他業主停止反對祥利獲批 該工程合約，及協助該宗土地審裁處案件達致庭外和解。該名業 主代表拒絕受賄，亦沒有向二人提供協助。向土地審裁處入稟要 求推翻決議的居民最終獲勝訴。 第三宗案件四項控罪指黃湘豫涉嫌於2020年7月至2024年4月期 間，先後四次向怡勝花園一名時任法團成員提供未有指明金額 的賭場籌碼及價值約50,000元的裝修服務，以協助黃湘豫推薦的 工程顧問及承辦商取得怡勝花園大維修顧問及工程合約。該法 團成員並沒有接受黃湘豫提供的利益，亦沒有協助相關工程顧 問或承辦商取得合約。怡勝花園大維修工程的工程顧問合約，最 終由鴻毅建築師有限公司獲得，而有關工程合約則由俊豪建築 工程有限公司取得，合約金額逾2,100萬元。 相關貪污調查仍在進行，廉署不排除會有更多人士被檢控。 廉署提醒公眾及樓宇管理及維修相關業內人士，如懷疑任何貪 污行為，應立即向廉署舉報。廉署24小時舉報貪污熱線：25 266 366。 (完) March 25, 2026 Press release Five linked to three housing estates charged in ICAC’s ongoing crackdown on corruption in grand renovation projects The ICAC, in its ongoing effort to crack down on corruption in grand renovation projects, charged five individuals in three cases on Monday (March 23) for allegedly Annex G

3 - offering bribes to members of incorporated owners (IO) and a representative of flat owners in relation to the grand renovation projects of three housing estates with project sums totalling about $90 million. The cases are set for mention at the Eastern Magistrates’ Courts this morning (March 25). Paying close attention to corruption in building management and maintenance, the ICAC adopts a three-pronged strategy of law enforcement, systemic prevention and community education, and works closely with other government departments and organisations in combating corruption and other illicit activities in building maintenance works. The ICAC had earlier mounted a joint operation codenamed “Shotgun” with the Competition Commission, resulting in the successful crackdown on a crime syndicate allegedly engaged in manipulating the tendering exercises of building maintenance projects through bribery and bid-rigging. After conducting intensive investigations and seeking legal advice, the ICAC yesterday charged four men and one woman. The five defendants, aged between 42 and 70, are Cheung Kwing-kuen and Chow Shuk-ha, and three middlemen, namely Wong Sheung-yu, Cheng Kwok-foon and Kong Po-choy. They face a total of eight charges – seven of offering an advantage to an agent, contrary to section 9(2)(a) of the Prevention of Bribery Ordinance (POBO), and one of conspiracy to offer an advantage to an agent, contrary to section 9(2)(a) of the POBO and section 159A of the Crimes Ordinance. The three housing estates in the present cases, Yan Tsui Court in Chai Wan, Hoi Tao Building in Kennedy Town and Victory Garden in Kwai Chung, were undergoing grand renovation projects at the material times. In the first case, the charge alleges that between September 2022 and February 2023, Cheung and Chow, then member secretary of the IO of Yan Tsui Court, conspired together to offer an unspecified sum of money to a then IO member to assist contractors associated with Cheung in securing the grand renovation contract of Yan Tsui Court. The IO member rejected bribes and did not assist the contractors to secure the works contract. At an owners’ meeting, Yan Tsui Court’s grand renovation contract was awarded to Chi Fu Construction (Group) Limited at $39 million by resolution. The resolution was subsequently overturned at another owners’ meeting. At the material time, Chow worked for a company of Cheung. When Cheung assumed the position of the IO’s secretary, she was neither a flat owner nor a resident of Yan Tsui Court. Annex G

4 - Another case concerns the grand renovation project of Hoi Tao Building. The works contract was originally awarded to a contractor, Cheung Lee Construction Co (Cheung Lee), at $3.1 million by resolution of flat owners. Some flat owners subsequently filed a case with the Lands Tribunal, requesting the overturning of the resolution. The three charges allege that between October 2022 and February 2024, Cheng and Kong, allegedly offered a red packet of an unspecified amount and two bribes of several tens of thousands of dollars and $500,000 respectively, to a representative of flat owners to assist in persuading other flat owners to stop opposing the award of the works contract to Cheung Lee, and to assist in reaching a settlement of the Lands Tribunal case. The representative did not accept the bribes and did not offer any assistance to the duo. The Lands Tribunal eventually ruled in favour of the flat owners who filed the case. In the third case, the four charges allege that on four occasions between July 2020 and April 2024, Wong offered an unspecified amount of casino chips and renovation services worth $50,000 to a then member of the IO of Victory Garden to assist the project consultants and contractors recommended by Wong in securing the consultant and works contracts of the grand renovation project of housing estate. The IO member did not accept the advantages offered by Wong and did not assist the project consultants or contractors in obtaining any contracts. The consultancy contract for the grand renovation project of Victory Garden was eventually awarded to Will Power Architects Company Limited while the relevant works contract worth over $21 million was awarded to Smart Goal Construction Engineering Limited. As the relevant corruption investigation is continuing, further prosecutions will not be ruled out. The ICAC urges members of the public and practitioners of the building management and maintenance industry to report suspected corruption to the ICAC immediately through its 24-hour hotline (25 266 366). X X X Annex G

FD06223 ｜ 2025_港澳台_香港大埔宏福苑-特别重大火灾事故调查报告(政府开场陈词).pdf

分类：06_境外及港澳台调查报告 ｜ 年份：2025 ｜ 地域：香港 ｜ 严重程度：特别重大 ｜ 场所： ｜ 起火原因： ｜ 来源格式：pdf

Independent Committee in relation to the fire at Wang Fuk Court in Tai Po Written Opening Submission of the Relevant Bureaux and Departments of the Government (English translation) A. Introduction 1. This Written Opening Submission is submitted by the Government’s relevant policy bureaux and departments1 to the Independent Committee established in relation to the fire at Wang Fuk Court in Tai Po (the “Independent Committee”). This Submission aims at providing a preliminary background for the Independent Committee’s investigative work (the “Inquiry”), briefly setting out: (1) the Government’s stance on the Inquiry and how it is facilitating the same; (2) the basic background on the Wang Fuk Court estate and the course of the fire; (3) preliminary observations on the direct causes of the fire and systemic issues falling within item (1) of the Terms of Reference (the “ToR”); (4) preliminary observations on the systemic issues of conflicts of interest and irregularities in tendering falling within item (2) of the ToR; and (5) immediate and medium-to-long-term improvement measures taken or proposed to be taken by the relevant Government departments since the fire. 2. On 26 November 2025, a serious fire broke out at Wang Fuk Court in Tai Po, claiming 168 precious lives, injuring a number of persons and causing severe damage to property. This is the deadliest fire disaster in Hong Kong in recent years and has caused immense grief to all Hong Kong citizens.

1 Namely (1) the Hong Kong Police Force, (2) the Fire Services Department, (3) the Home Affairs Department, (4) the Housing Department, (5) the Buildings Department and (6) the Labour Department

-2- The Government extends its deepest condolences to all those who perished in the fire, and expresses its most sincere sympathies to the families of all the casualties. 3. This tragedy serves as a stark reminder of the critical importance of building safety and fire safety in safeguarding the lives and property of Hong Kong citizens. The Government fully understands that the families of the deceased, the residents of Wang Fuk Court and the public at large all expect a fair, clear and comprehensive account through the work of the Independent Committee. The Inquiry not only aims to ascertain the causes of the Wang Fuk Court fire, but also bears the important responsibility of formulating improvement measures and making recommendations for the future to ensure that similar tragedies do not happen again. 4. The ToR of the Independent Committee cover the following four areas: (1) Term of Reference (1): Regarding the fire broken out at Wang Fuk Court in Tai Po, its rapid spread and the resulting casualties and property damage, to examine - the causes and circumstances that led to the fire; the fire service installations and equipment in the buildings, and the supervision and responsibility for their effective operation; whether the construction safety requirements, standards, supervision and day-to-day maintenance regime for the building maintenance and renovation works were adequate; regarding the building maintenance and renovation works, whether the prevailing list of materials meeting safety standards is comprehensive, and whether the related verification and testing systems are effective; the roles and responsibilities of personnel with supervisory roles across all stages (including government officers, authorised professionals,

-3- contractors and others); and the liabilities arising from the aforementioned issues. (2) Term of Reference (2): Regarding large-scale building maintenance and renovation works, to examine - whether there were systemic problems such as undue connected interests, conflicts of roles, or improper collusion across all stages of the works; and whether bid- rigging corruption, or irregularities were involved in the tendering process of these works. (3) Term of Reference (3): Regarding the two matters above, to examine whether regulation and penalties under relevant existing laws are adequate. (4) Term of Reference (4): To make recommendations regarding matters in items (1) to (3) above. 5. The above ToR fully reflect the depth and breadth of the Inquiry, demonstrating the extremely heavy investigative burden borne by the Independent Committee. The Government fully appreciates that the scope of the Inquiry is extensive and the issues are complex. The adoption of this form of inquiry is aimed at ensuring that the investigative work can proceed in a more flexible and expeditious manner while upholding the principles of openness and transparency. The Government expressly supports the Independent Committee’s adoption of this mode of inquiry, and pledges its full support in response to the expectations of the families of the deceased, the residents of Wang Fuk Court and the public for a full account of the truth of this incident.

-4- B. The Government’s Stance and Approach 6. Following the Wang Fuk Court fire, the Chief Executive acted swiftly and established the Independent Committee in December 2025, demonstrating firm resolve to conduct a thorough investigation. Authorised by the Chief Executive, the Independent Committee immediately commenced its work and actively proceeded with its investigations. 7. The Government has adopted a proactive approach to cooperation in the Inquiry. Since the Independent Committee commenced its operations, Government departments have actively responded to letters issued by the Independent Committee’s legal team, and have simultaneously and proactively submitted documents, information and witness statements relevant to the ToR to the Independent Committee. As a guiding principle throughout the Independent Committee’s examination of the extensive range of investigative matters, the Government will raise and provide any information and documents it considers relevant to the Independent Committee’s reference, without waiting to be asked. 8. Furthermore, the Government understands that the depth and breadth of the Inquiry requires the continuous supply of information and documents from all parties throughout the investigative process, so as to enable the Independent Committee to conduct a comprehensive investigation and make findings on the basis of a full grasp of the relevant objective circumstances. Given the extensive scope and complexity of this matter, the collation of relevant documents and information has been an enormously demanding task, and all Government departments have been doing their utmost to cooperate within extremely tight timeframes, and have continued to do so.

-5- 9. Since the Independent Committee commenced its work in December 2025, the relevant Government departments have submitted a large volume of witness statements and documentary materials to the Independent Committee within a short period of time, which also reflects the high importance the Government attaches to the Inquiry and its full support for the work of the Independent Committee. 10. At the same time, the Independent Committee and its legal team have also reviewed the large volume of documents and materials submitted by the relevant Government departments and other parties, and have accordingly compiled the hearing bundles and drawn up witness lists for the Inquiry. The Government understands that the facts and background of the Inquiry are complex and intricate, and many details remain to be presented and clarified in the course of the Inquiry. In the upcoming public hearings of the Inquiry, the relevant witnesses will give evidence and be examined on their respective areas, which should help the public gain a more comprehensive understanding of the full circumstances of the incident. The Government will continue to cooperate fully with the work of the Independent Committee throughout the course of the hearings, so as to present an objective and complete picture of the incident to the Independent Committee and the public. C. Basic Background on Wang Fuk Court and the Course of the Fire Overview of Wang Fuk Court 11. Wang Fuk Court is a Home Ownership Scheme (“HOS”) estate in Hong Kong, completed in 1983, comprising eight residential blocks: Wang Yan House (Block A), Wang To House (Block B), Wang San House (Block C), Wang Kin House (Block D), Wang Tai House (Block E), Wang Cheong

-6- House (Block F), Wang Shing House (Block G) and Wang Chi House (Block H). 12. Each block has thirty-one floors, with each floor divided into eight residential units (numbered (1) to (8)) connected by a corridor, with the lift lobby located at the centre of the corridor. Opposite the lift lobby, there are two interlocking staircases (commonly known as “scissor stairs”) serving as means of escape in case of fire. Both staircases run from the thirty-first floor at the top down to the ground floor, but only one of them provides access to the rooftop. 13. Pursuant to the relevant provisions of the Housing Ordinance (Cap. 283) and the Buildings Ordinance (Cap. 123), Wang Fuk Court is subject to regulation under the Buildings Ordinance, and is regulated by the Independent Checking Unit (“ICU”) under the Office of the Permanent Secretary for Housing, which operates under the authority delegated by the Building Authority (i.e. the Director of Buildings) and in accordance with the Buildings Ordinance and the Building Authority’s policies and guidelines. Background to the Building Maintenance Works 14. Wang Fuk Court was selected as a target building under the Mandatory Building Inspection Scheme (“MBIS”) in 2014. 15. The ICU subsequently issued a pre-notification letter for the MBIS to the Incorporated Owners of Wang Fuk Court (“Wang Fuk Court IO”) on 29 April 2014, and on 10 June 2016 formally served the Statutory Notice on the Wang Fuk Court IO under section 30B(3) of the Buildings Ordinance requiring the carrying out of prescribed inspection and prescribed repair.

-7- 16. Thereafter, the ICU approved five extensions to the deadline of the statutory notice between June 2017 and October 2019. 17. The Wang Fuk Court IO appointed Will Power Architects Company Limited (“WP”) as the inspection consultant in January 2019. 18. In December 2021, WP was appointed by the Wang Fuk Court IO as the supervisory and repair consultant for the maintenance works. 19. In May 2023, the Wang Fuk Court IO commenced tendering for a contractor for the maintenance works. On 28 January 2024, Prestige Construction & Engineering Co. Limited (“PC&E”) was selected by the Wang Fuk Court IO as the contractor for the maintenance works. The maintenance works officially commenced in July 2024. Overview of the Course of the Fire 20. At 2:51 pm on 26 November 2025, the Fire Services Communications Centre of the Fire Services Department (“FSD”) received the first fire report, in which the caller stated that the external scaffolding of Wang Cheong House was on fire and there had been an explosion. The first fire appliance arrived at the scene at 2:56 pm. 21. In light of the rapid development of the fire and the increasing resources required for fire-fighting and Search and Rescue Operations, firefighters upgraded the fire to No. 3 Alarm Fire six minutes after arrival (i.e. at 3:02 pm). Firefighters subsequently further upgraded the fire to No. 4 Alarm Fire at 3:34 pm. Finally, the Deputy Director (Operations) upgraded the fire to No. 5 Alarm Fire at 6:22 pm and personally assumed overall command of the operations.

-8- 22. Based on the preliminary information currently available to the Government, it is believed that the fire spread rapidly upward along the re- entrant on the external walls of the affected blocks, with the manner of spread suspected to have been influenced by the “chimney effect”, whereby hot air, smoke and combustible gases rose rapidly within the re- entrant. In certain blocks, the fire spread from the lower floors to the rooftop within an extremely short period of time. The rapid development of the fire in certain blocks resulted in a continuous shower of burning bamboo scaffolding and debris falling from height, which accumulated on the ground and blocked the entrances and exits of Wang Cheong House and Wang Tai House; the fire also spread rapidly to other blocks due to weather conditions. 23. According to reports from frontline firefighters, thermal imaging cameras detected temperatures as high as 800 degrees Celsius in some of the affected units, while some corridors also reached approximately 400 degrees Celsius. 24. Throughout the operation, a total of nine firefighters who were carrying out fire-fighting and Search and Rescue Operations inside the blocks required hospitalisation due to heat exhaustion, physical exhaustion, breathing difficulties, smoke inhalation or being struck by falling objects. Most tragically, a firefighter who had entered the upper floors of Wang Tai House in the early stages of the fire lost his life in the line of duty. 25. Police officers also maintained order at the scene and assisted with the fire- fighting operations, before subsequently devoting themselves wholeheartedly to the follow-up evidential search, investigation and victim identification work.

-9- 26. Medical personnel also worked tirelessly to save every injured person, dedicating themselves to lifesaving and casualty treatment. Other frontline staff, civil servants and concerned citizens also spared no effort to participate in the rescue and subsequent relief operations. 27. The fire ultimately claimed 168 lives, and caused injury to a number of persons and severe damage to property. D. Preliminary Observations on the Causes of the Fire and Related Issues of Accountability 28. The ascertainment of the causes of the fire and related issues of accountability is the core of ToR item (1) and the most important aspect of the Inquiry. To assist the Independent Committee, the following paragraphs set out preliminary observations on the relevant causes and issues of accountability based on the preliminary information currently available to the Government. Naturally, as further evidence is disclosed, as witnesses and experts give their evidence, and as the Inquiry progresses, the Government will update or supplement these observations as appropriate. Detailed analysis will be reserved until after the relevant experts and witnesses have completed their evidence at the hearings, so as to enable the Independent Committee to make informed and comprehensive findings after full consideration of the submissions of all parties. 29. Prior to the Independent Committee commencing its work in December 2025, the FSD had already established an Inter-departmental Fire Investigation Task Force (the “Task Force”), comprising officers from the Hong Kong Police Force, the Buildings Department (“BD”), the Electrical and Mechanical Services Department, the ICU, the Labour Department (“LD”), the Government Laboratory and fire engineering professionals, to

-10- conduct an in-depth investigation into the causes of the fire. The findings of the Task Force will also provide reference and support for the Independent Committee in discharging its duties under ToR item (1). The investigation is currently ongoing and will continue to be updated as it progresses. 30. Meanwhile, in the course of preparing for the hearings, the relevant Government departments have submitted a large volume of documents, witness statements and technical materials to the Committee on the various issues covered by ToR item (1). 31. The causes of the fire and issues of accountability falling within ToR item (1) are believed to be capable of examination at two levels: first, the direct causes of the fire; and second, the systemic issues related to the fire and areas for improvement in the relevant systems. The two levels are complementary and together constitute the content of the Independent Committee’s investigation under ToR item (1). 32. The Government notes that, at the Direction Conference on 5 February 2026, Leading Counsel of the Independent Committee observed that the available information suggests that this incident involved a series of structural problems that cannot be overlooked. This observation also confirms the necessity of examining the fire at both levels: ascertaining the direct causes alone is insufficient to address the public’s deep concerns about this incident; only by also conducting an in-depth examination of the underlying systemic issues can result in effective forestalling of potential risks. Preliminary Observations on the Direct Causes

-11- 33. Based on information and footage provided by eyewitnesses, the fire is believed to have originated from the platform outside units 104 and 105 of Wang Cheong House. This finding was subsequently supported by evidence obtained by the Task Force through site inspections and investigations. 34. As regards the cause of ignition, the police have preliminarily ruled out arson, on the basis that forensic examination found no trace of accelerants at the source of ignition, and no suspicious behaviour by any person was observed in the vicinity prior to the fire. Having ruled out arson, the Task Force’s investigation has focused on accidental factors. The Task Force has preliminarily concluded that the fire was most likely accidental in nature, caused by a heat source igniting combustible materials. 35. In addition to ascertaining the cause of ignition, it is equally important to understand how the fire was able to spread throughout the entire estate within such a short period of time. 36. As regards casualties and property damage, in addition to the intensity of the fire itself, there are other factors of concern which warrant in-depth examination by the Independent Committee. 37. The Task Force set out preliminary conclusions on the causes and manner of spread of the fire in its interim investigation report dated February 2026. The Task Force will continue to conduct in-depth investigations into the details of the incident, including fire analysis and computational fluid dynamics simulation tests, and will provide a detailed analysis in its final report. The final report is provisionally scheduled to be completed in May 2026 and will be submitted to the Independent Committee upon completion.

-12- 38. Meanwhile, Professor Richard Yuen Kwok-kit, appointed as an expert by the Task Force, has also conducted relevant research work and analysis, including fire simulations, since the fire occurred. The FSD has also submitted Professor Yuen’s expert report dated 10 February 2026 to the Independent Committee for its consideration. 39. The above factors will be subjects for in-depth consideration by the Independent Committee at the hearings (together with the experts appointed by the Independent Committee, namely Professor Asif Sohail Usmani and Professor Jiang Liming). Preliminary Observations on Systemic Causes 40. Ascertaining the direct causes of the fire is merely the starting point, not the end point, of the Inquiry. ToR item (1) expressly provides that the Independent Committee is required to investigate “the circumstances that led to the fire”, a formulation of far-reaching significance that requires the Independent Committee not only to ascertain the direct cause of ignition, but also to conduct an in-depth examination of the deeper factors and systemic background that contributed to or exacerbated the outbreak and spread of the fire. In order to prevent similar tragedies from happening again, the more fundamental issue is to conduct an in-depth examination of whether the existing systems have any deficiencies or areas for improvement in preventing the occurrence of such type of incidents. 41. In this regard, ToR item (1) expressly lists a number of specific areas that the Committee is required to examine. 42. In examining the various systemic issues, the Independent Committee will need to have an appreciation of the historical background and technical complexity of Hong Kong’s system for regulating building management

-13- and maintenance works. The Government sets out a brief submission here in the hope that it will assist the Independent Committee. 43. The various existing systems relating to building maintenance works, site safety, building management and fire safety have not been established overnight, but have evolved over decades of policy development and legislative evolution, with building owners, the industry (including authorised professionals and contractors, among others) and various Government departments each playing their respective roles and working in a complementary fashion. The technical aspects involved in these systems – including construction works specifications, fire safety standards, building material requirements and site supervision mechanisms – all involve professional considerations. The Independent Committee will be able to, through the evidence of the relevant parties including Government departmental officers and expert witnesses – and in particular their detailed explanations on the above technical matters and systemic background – fully understand how the systems operate; and on that basis, objectively examine whether the existing arrangements have any deficiencies or areas for improvement, and assess the relevant roles and responsibilities of the various parties. 44. As shown by the records, the FSD had received notification from a registered fire service installation contractor prior to the fire that the fire hydrant/hose reel systems of the eight blocks of Wang Fuk Court were required to be shut down for maintenance. However, until the fire broke out, the FSD had not been notified of any need to shut down the fire alarm systems of the eight blocks of Wang Fuk Court. Nonetheless, preliminary indications suggest that at the time of the Wang Fuk Court fire, the fire alarm systems of at least seven of the eight affected blocks were not

-14- functioning effectively. The Independent Committee will therefore examine, under the existing system, the roles of Government departments, building owners, the industry (including authorised professionals and contractors, among others) and other stakeholders (including property management companies, among others), as well as the regulatory and relevant supervisory systems and areas for improvement, in respect of the effective operation of fire service installations. 45. Construction safety requirements, standards, supervision, site and building management and day-to-day maintenance regime for building maintenance works: The Independent Committee will be able to examine the existing legislative and regulatory framework, in particular regarding temporary construction measures used in external wall maintenance works on multi- storey buildings, including scaffolding, wooden planks, safety nets (commonly known as “scaffolding nets”) and toe-boards. This includes the roles of Government departments, building owners, the industry (including authorised professionals and contractors, among others) and other stakeholders (including property management companies, among others) under the existing system, as well as the regulatory and relevant supervisory systems and areas for improvement, including whether the existing safety standards (such as applicable fire-retardant standards) are sufficiently clear and specific, and whether the penalties carry sufficient deterrence. As regards the supervisory system, the Independent Committee may further examine whether the existing mechanisms can effectively ensure that specified building materials and construction procedures comply with the requirements of the relevant regulations and safety standards during the course of the works, and whether the existing supervision can achieve effective on-site verification and inspection of actual conditions on the construction site. Furthermore, the Independent

-15- Committee may assess, in terms of the overall design of the industry regulatory framework, site supervision, site and building management and day-to-day maintenance regime, and whether the relevant systems have structural gaps or deficiencies. 46. The prevailing list of materials meeting safety standards (such as applicable fire-retardant standards) and the verification and testing systems for the relevant building materials: As regards the requirements under the existing system for the use of materials meeting safety standards (such as applicable fire-retardant standards) in building maintenance works, whether such requirements are sufficiently clear, practically workable and conducive to proper site management, covering key categories of building materials in accordance with risk; and whether the existing inspection mechanism can effectively identify and intercept use of non-compliant materials at construction sites – these are matters on which the Independent Committee will be able to rely at the hearings on explanations from the relevant experts and persons with experience in material testing and works supervision (including officers of the relevant Government departments involved in the Wang Fuk Court maintenance works). 47. The roles and responsibilities of supervisory personnel, building owners and the industry across all stages: The safe implementation of building maintenance works is directly related to the ability of citizens to live and work in peace and contentment. As noted above, the regulatory landscape under the existing system – in which Government departments, building owners, the industry (including authorised professionals and contractors, among others) and other stakeholders (including property management companies, among others) work in a complementary and mutually supportive manner – has its historical development and objective technical

-16- reasons. The relevant Government departments will provide detailed explanations to the Independent Committee on the regulatory arrangements and specific implementation within their purview, rendering full assistance to the Independent Committee in clarifying the division of roles and responsibilities at each stage. E. Systemic Issues of Conflicts of Interest, Collusion and Irregularities in Tendering 48. Regarding the issues falling within ToR item (2), the Government agrees with the observation made by Leading Counsel of the Independent Committee at the Direction Conference on 5 February 2026 that these matters must be dealt with in the overriding interests of the public. In relation to the above matters, law enforcement agencies are also conducting independent criminal investigations and prosecution proceedings. It is in the public interest to ascertain the truth, establish accountability and ensure that legal proceedings are conducted fairly. It is certainly not in the public interest for those who ought to be held legally responsible to escape accountability. 49. Based on the information currently available, the involvement of the relevant Government departments in the tendering process for the Wang Fuk Court maintenance works appears, on a preliminary basis, to have not been significant. The relevant Government departments will uphold the principle of public interest above all else, maintain transparency throughout the Independent Committee’s investigation, and assist the Independent Committee in discharging its duties under the ToR. 50. Furthermore, the Government notes that Leading Counsel of the Independent Committee specifically emphasised at the Direction Conference that the scope of ToR item (2) is not limited to the individual

-17- Wang Fuk Court project itself, but extends to wider systemic issues. In this regard, the relevant Government departments will likewise cooperate with the Committee’s investigative work and provide information and assistance on the broader systemic issues. F. Improvement Measures 51. Following the Wang Fuk Court fire, the Government fully understands its responsibility to take immediate action to address public concerns and to drive reforms to the relevant systems, so as to ensure that similar tragedies do not happen again. The Chief Executive has also pledged that the investigation will hold all parties to full account, and has initiated the launching of improvement measures across all areas in support of and to assist the Independent Committee’s comprehensive review, with a view to completing the work as expeditiously as possible and implementing the systemic reforms. 52. ToR items (3) and (4) respectively require the Independent Committee to examine whether regulation and penalties under relevant existing laws are adequate, and to make recommendations on the matters covered by ToR items (1) to (3). These two ToR are expected to provide important directions for the Government’s push for reform in light of the issues revealed by the fire. The Government understands that the Independent Committee’s investigation findings and recommendations will provide important guidance for future systemic reforms. The relevant Government departments will also give serious consideration to and respond positively to the recommendations made by the Independent Committee in its final report on the above matters. 53. In the meantime, the Government has taken action on the various issues revealed by the fire at both the levels of immediate response and medium-

-18- to-long-term systemic reforms. The immediate measures aim to provide necessary safeguards for the most pressing issues in the existing system; the medium-to-long-term reform measures await implementation of systemic reforms on a more comprehensive basis. The following paragraphs set out an overview of some of the immediate and proposed medium-to-long-term measures taken by the relevant Government departments since the fire. 54. The relevant measures reflect both the Government’s serious concern about the various issues revealed by the fire and its commitment and determination to systemic reforms. The Government firmly believes that the Independent Committee’s investigative work will provide a solid foundation for driving more comprehensive and deeper systemic reforms in the future, and the Government will also respond positively and substantively after the Independent Committee has made its recommendations. Immediate Measures 55. In order to deal with fire service installation and equipment problems discovered during fire incidents in a timely and effective manner, the FSD has established a dedicated Quick Response Team operating on a round- the-clock standby basis since 4 December 2025. The Quick Response Team will be deployed to respond to all building fires to examine the operation of fire service installations during fires, and to take immediate follow-up or enforcement action where necessary. 56. Furthermore, in view of the potential fire risks that may arise from large- scale building maintenance / renovation works, the FSD immediately reallocated internal resources to establish a dedicated task force to conduct focused inspections of the fire service installation conditions of the

-19- relevant buildings. The inspection work has commenced since 4 December 2025. 57. With effect from 6 January 2026, the FSD introduced targeted measures to strengthen alerts on fire service installation failures, requiring all registered fire service installation contractors, when shutting down fire service installations, to fulfil their obligations to identify, assess and report the cascading effects on other installations, and to disclose the impairment of fire service installations to the building’s owners, occupants and property management company, thereby enhancing the overall fire safety of buildings. In addition, the FSD has optimised the management of fire service installation power supplies and introduced new requirements for the affixing of seals and management standards, whereby contractors are required to affix green or red seals to the power switches according to the power supply status of the fire service installations, so as to ensure that the building’s owners, occupants and property management company can immediately ascertain the status of the main fire service power supply. 58. Furthermore, in response to the problem of scaffolding nets of varying quality, the Development Bureau on 3 December 2025 ordered all scaffolding nets on buildings undergoing large-scale maintenance works to be removed within three working days, and immediately reviewed and reformed the arrangements for testing scaffolding nets, establishing multiple checkpoints in the system to ensure that only scaffolding nets that have passed tests may be used in the relevant maintenance works (details as set out in paragraph 60 below). 59. The BD also immediately launched a special operation to inspect approximately 400 private buildings undergoing large-scale maintenance works with scaffolding erected, to check fire-retardant test reports and

-20- certificates for scaffolding nets, and to collect samples of scaffolding nets on-site for testing by accredited laboratories. The BD also issued a circular to all registered building professionals and registered contractors on 27 November 2025, requiring all contractors to submit reports on the scaffolding nets / protective screens on the external walls of buildings under their charge, together with the relevant certificates and test reports from accredited laboratories, to confirm compliance with recognised fire- retardant standards and that the materials are in good condition. Subsequently, from late December 2025, the BD had also launched a special inspection operation to examine whether the maintenance and repair works at over 300 buildings were in proper compliance with the relevant fire safety precautionary measures, such as whether fire barriers (including fire doors and fire-resistant fixed windows) had been removed. The enhanced inspection of large-scale building maintenance sites has continued as a regular exercise after the completion of the above special operation. 60. To ensure that scaffolding protective materials comply with recognised standards and to effectively address the problem of forged test reports, the BD promulgated Practice Note for Registered Contractors No. 85 in mid- December 2025, introducing three main new requirements. First, registered contractors are required to obtain fire-retardant performance test reports provided with each batch of scaffolding nets received, and to keep them on the construction site for inspection by enforcement authorities at any time. Second, registered contractors are required to take samples of scaffolding nets for testing as required, including the requirement that, before commencing the relevant works on an existing building, samples of scaffolding nets must first be taken and a test report confirming compliance with recognised fire-retardant performance standards must be obtained

-21- before the scaffolding nets may be installed, thereby ensuring that scaffolding nets used on construction sites comply with fire-retardant performance standards. In addition, inspection of scaffolding nets must be conducted by Government-designated accredited laboratories, and test reports must be encrypted and digitally signed to ensure their authenticity and integrity. Third, upon receipt of a notification of scaffolding net installation, the BD will randomly select certain projects where scaffolding nets have been installed for on-site inspection. If it is found that a contractor has not complied with the requirements of the new system, or if the results of random sampling tests fail to meet the recognised fire- retardant standards, the BD will make an immediate cease work order and require the removal of non-compliant scaffolding nets, and will reserve the right to take other appropriate punitive action in accordance with the law. 61. The BD held a seminar in late January 2026 to remind the industry of the requirements under the new scaffolding net sampling and testing system, as well as the fire safety matters to be observed during building maintenance works. In early March, the BD also issued a circular letter to registered building professionals and registered contractors, once again reminding the industry of the need to observe and comply with the relevant fire safety codes and measures for buildings during large-scale building maintenance works. 62. Following the fire, the ICU immediately cooperated with the BD’s special operation to conduct on-site inspections of Home Ownership Scheme estates and Tenants Purchase Scheme estates undergoing large-scale repair and improvement works, and in response to the circular issued by the BD to all registered professionals and contractors on 27 November 2025, required the contractors of the relevant estates to submit relevant

-22- certificates and test reports on the scaffolding nets / protective screens installed on the external walls of buildings, to confirm compliance with recognised fire prevention standards and that the materials are in good condition. Following the Development Bureau’s order to remove scaffolding nets in early December 2025, the ICU has continued to conduct inspections of the scaffolding conditions of the above estates. 63. The LD also immediately launched a citywide special enforcement operation to inspect the fire prevention facilities and fire response arrangements at building maintenance construction sites with large scaffolding erected. The LD subsequently continued to follow up on the rectification of non-compliant sites and sites from which external wall scaffolding nets had been removed, so as to safeguard workers’ safety. 64. In terms of estate management, in response to the unprecedented management challenges faced by Wang Fuk Court following the fire, the Secretary for Home Affairs and Youth invoked section 31 of the Building Management Ordinance (Cap. 344) for the first time to apply to the Lands Tribunal to dissolve the management committee of the existing Incorporated Owners of Wang Fuk Court and to appoint Hop On Management Company Limited (“Hop On”), a subsidiary of the Chinachem Group, as the administrator. The Lands Tribunal granted the application on 6 January 2026, and Hop On has commenced its work. Medium-to-Long-Term Reform Measures 65. Fire Services Department: The FSD has established a “Mega-scale Fire Incidents Strategic Steering Committee” to review the effectiveness of operations in handling major fires and areas for improvement. The FSD will deepen rescue cooperation and coordination mechanism with the Guangdong-Hong Kong-Macao Greater Bay Area, incorporating major

-23- fire incidents into the scope of cooperation and drills, and optimising the coordination procedures for fire operations among the three places. Furthermore, in terms of technology application, the FSD will enhance the use of big data and artificial intelligence to analyse inspection-derived risk data and formulate targeted mitigation strategies, and will explore the adoption of the latest technology for continuous monitoring of the operational status of fire service installations. To further enhance overall fire safety, the FSD has established a “Legislative Amendment Working Group” to conduct a dedicated review of the existing legal framework for regulating fire service installations and equipment, regulating registered fire service installation contractors, and eliminating fire hazards, so as to identify areas suitable for amendment or update and to implement a series of legislative amendments. In terms of regulating fire service installations and equipment, the FSD proposes the introduction of a legislative provision requiring that the shutting down of fire service installations of a building must first obtain the Department’s approval, so as to strengthen the FSD’s regulatory function. In addition, it is proposed to introduce the statutory management responsibility of property management companies for fire service installations in buildings, making property management companies statutory responsible parties for fire safety in the system. In terms of regulating registered fire service installation contractors, it is proposed to significantly increase the penalties for registered contractors who issue false or misleading fire service installation and equipment certificates, so as to enhance the deterring effect. As regards offences related to fire hazards, it is proposed to introduce a fixed penalty system for certain readily verifiable contraventions, so as to enhance enforcement efficiency and the certainty and consistency of penalties.

-24- 66. Labour Department: The LD is amending legislation to implement a comprehensive smoking ban on construction sites, including requiring contractors to take all reasonable measures to implement a no-smoking policy on construction sites, and to penalise persons who smoke on construction sites with a fixed penalty, thereby improving safety levels at construction sites. At the same time, the LD is revising the Code of Practice relevant to scaffolding and setting out requirements for the materials used for what is commonly known as toe boards. 67. Development Bureau and Buildings Department: In terms of the regulatory framework, the scope of amendments to the Buildings Ordinance will be expanded to include: upgrading large-scale maintenance works from their current classification mainly as Class 2 minor works to Class 1 minor works, so as to enhance regulatory requirements by specifying that prescribed plans must be prepared and supervision conducted by a third- party professional; and making the safety standards for specified building materials currently promulgated by the BD through Practice Notes and other administrative means into statutory requirements, so as to enable direct prosecution for non-compliant materials and to increase penalties. It is also proposed to enhance regulation of registered building professionals and registered contractors, including increasing the maximum penalties for contraventions and strengthening the registration and disciplinary system – for example, so that future conviction under the Prevention of Bribery Ordinance may also give rise to disciplinary action and be taken into consideration as a factor in registration renewal. Additionally, the BD will strengthen audit checks and enforcement on a risk-based approach. 68. Furthermore, in order to reduce the risk of bid-rigging, the Development Bureau is working with the Urban Renewal Authority to formulate

-25- measures and plans to launch an enhanced “Smart Tender” service in the second half of this year, including: (1) formulating a more stringent pre- qualification list of consultants and contractors, which in addition to considering criminal and disciplinary records will also take into account more information reflecting past performance; consultants and contractors will also be required to pass background checks by the Police and Independent Commission Against Corruption before being included in the list and participating in tenders; (2) the Urban Renewal Authority will act as a gatekeeper for building owners in conducting tendering and evaluation work for engaging consultants and contractors; and (3) for buildings applying for Government maintenance subsidies, the Urban Renewal Authority will require consultants and contractors to report to the Urban Renewal Authority at important project milestones, such as significant changes in the scope of works or increases in project costs. so that the Urban Renewal Authority can provide independent advice to building owners. The 2026-27 Budget recently announced proposes to allocate a total of $300 million to the Urban Renewal Authority, of which $100 million is seed funding to enable the Urban Renewal Authority to establish a dedicated team to provide the enhanced “Smart Tender” service, and the remaining $200 million will be used as subsidies to encourage building owners to use the enhanced “Smart Tender” service. 69. ICU: The ICU will continue to carry out the relevant building control work in accordance with the regulatory framework of the BD and the safety requirements for building materials, including the newly established standards mentioned above. In addition, the ICU proposes to strengthen inter-departmental cooperation in respect of the relevant regulation of large-scale repair works, for example by jointly handling complaints and enquiries with broad impact. At the same time, the ICU will also discuss

-26- with the BD the feasibility of requiring professionals to submit on-site supervision records for large-scale repair works, so as to enhance the scrutiny of inspections. 70. Home Affairs Department: The Home Affairs Department will leverage its role in maintaining close liaison with owners’ corporations to facilitate communication and coordination between the relevant Government departments and owners’ corporations. In addition, the Home Affairs Department has preliminarily formulated five major directions for amendment to the Building Management Ordinance, including: raising the attendance and in-person voting thresholds for decisions on large-scale maintenance works and major procurement; enhancing the system for proxy instruments; enhancing the system for declaration of interests; clarifying meeting procedures; and strengthening the powers of the competent authority. 71. At the overall systemic level, the fire has also revealed that there is room for further optimisation of the existing inter-departmental collaboration mechanism. Each relevant department will systematically optimise its collaboration mechanism with other departments across four levels: policy formulation, day-to-day inspection, enforcement action and emergency crisis management. 72. The relevant Government bureaux and departments will strive to push forward and implement the above-announced improvement measures as early as possible, and to continuously review and study further measures, so that the system can be improved at the earliest opportunity and citizens can benefit from a better system as soon as possible. The Government will also make further improvements and refinements after the Independent Committee has completed its investigation and made its recommendations.

-27- G. Other Matters 73. As regards the roles, responsibilities and related legal issues of other parties involved in the Inquiry, subject to the further disclosure of relevant information by the Independent Committee and completion of evidence by the relevant witnesses and experts in the course of the hearings, the Government will make a comprehensive and full submission on its position.

-28- H. Conclusion 74. The Independent Committee’s investigation bears the important mission of ascertaining the truth, establishing accountability and driving reform. The Government fully understands that only through the Independent Committee’s comprehensive review, with objective, fair and comprehensive findings on the various issues revealed by the fire, can the heartfelt expectations of the families of the deceased, the residents of Wang Fuk Court and the public at large for a just account be truly met. 75. The Government will cooperate fully with the work of the Independent Committee throughout the investigative process, with a view to driving substantive and far-reaching reforms at the systemic level to prevent similar tragedies from happening again. The Government expects that, through the Inquiry and follow-up work thereafter, Hong Kong’s building safety and fire safety systems will be reviewed and improved, the safety protection afforded by the relevant systems will be substantively strengthened, and the reasonable expectations of the public will be duly met.

[Original Chinese version submitted to the Independent Committee in relation to the fire at Wang Fuk Court in Tai Po on 9 March 2026] Jenkin Suen SC Calvin Cheuk Michael Lok Charlie Liu

FD06224 ｜ 2025_港澳台_香港大埔宏福苑-特别重大火灾事故调查报告(政府结案陈词).pdf

分类：06_境外及港澳台调查报告 ｜ 年份：2025 ｜ 地域：香港 ｜ 严重程度：特别重大 ｜ 场所： ｜ 起火原因： ｜ 来源格式：pdf

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Independent Committee in relation to the fire at Wang Fuk Court in Tai Po Written Closing Submissions of the Relevant Bureaux and Departments of the Government

PART I: INTRODUCTION ................................................................................................................ 9 A. THE WANG FUK COURT (“WFC”) FIRE ............................................................... 9 A1. THE WFC FIRE ....................................................................................................................... 9 A2. THE GOVERNMENT’S IMMEDIATE RESPONSE – THE THREE TASK FORCES ............................. 11 B. ESTABLISHMENT OF THE INDEPENDENT COMMITTEE ............................. 13 B1. THE CHIEF EXECUTIVE’S DECISION TO SET UP THE INDEPENDENT COMMITTEE (“COMMITTEE”) ................................................................................................................................ 13 B2. THE COMMITTEE’S TERMS OF REFERENCE (“TOR”) ............................................................. 15 B3. THE INVOLVED PARTIES ........................................................................................................ 17 B4. LEGAL REPRESENTATION OF THE INVOLVED GOVERNMENT BUREAUX / DEPARTMENTS ....... 18 B5. HOW THE INVOLVED GOVERNMENT BUREAUX / DEPARTMENTS HAVE ASSISTED THE COMMITTEE’S WORK, AND THEIR OVERALL APPROACH TO THE INQUIRY .......................................... 19 C. THE COMMITTEE’S TREATMENT OF EVIDENCE AND MAKING OF FINDINGS 21 C1. THE PURPOSE OF THE INQUIRY .............................................................................................. 21 C2. THE HANDLING OF EVIDENCE RECEIVED BY THE COMMITTEE ............................................... 22 C3. BURDEN/STANDARD OF PROOF ............................................................................................. 24 C4. “CAUSATION” IN THE LEGAL CONTEXT ................................................................................. 28 D. OVERVIEW OF THE GOVERNMENT’S CASE .................................................... 31 PART II: BACKGROUND TO WFC AND THE WFC FIRE ...................................................... 42 E. WFC ............................................................................................................................... 42 E1. WFC AND THE SURROUNDING AREA ..................................................................................... 42 E2. MANAGEMENT OF THE WFC AFFAIRS AT THE MATERIAL TIME ............................................. 44 (i) The PMC .......................................................................................................................... 44 (ii) The IO and MC ................................................................................................................ 46 E3. INTRODUCTION TO THE FSI SYSTEM AT WFC ....................................................................... 47 E4. STATUTORY CONTROL OF WFC BY THE ICU ........................................................................ 52 (i) The background of delegation from the BD to ICU ......................................................... 52 (ii) “Administrative control” vs. “statutory control” ........................................................... 56 (iii) The scope of delegation ................................................................................................... 58 E5. ISSUANCE OF THE STATUTORY NOTICES TO WFC UNDER THE MBIS..................................... 61 E6. THE WFC RENOVATION WORKS FOLLOWING COMPLETION OF THE MBIS INSPECTION – MAINLY GOVERNED BY THE MWCS ................................................................................................. 63 E7. BEFORE THE WFC FIRE – THE MARINERS’ CLUB INCIDENT (2023) AND CHINACHEM TOWER INCIDENT (OCTOBER 2025, SHORTLY BEFORE THE WFC FIRE) .......................................................... 64 F. THE REGULATORY FRAMEWORK UNDER EACH RELEVANT AREA AND STAKEHOLDERS’ ROLES AND RESPONSIBILITIES ............................................................ 69 F1. GENERAL BUILDING MANAGEMENT UNDER PRIVATE OWNERSHIP ......................................... 69

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(i) The regulatory framework and model.............................................................................. 69 (ii) The Government’s facilitative role (for the case of WFC) .............................................. 71 (iii) The other stakeholders’ responsibilities - owners and the PMC ..................................... 72 F2. OWNERS’ ENGAGEMENT OF PROFESSIONALS FOR MAINTENANCE OF THE FSI SYSTEM .......... 73 (i) The regulatory framework and model for ownership and maintenance of FSIs ............. 73 (ii) The Government’s facilitative role .................................................................................. 74 (iii) The other stakeholders’ responsibilities – owners, the PMC, contractors, consultant and RI .................................................................................................................................... 76 F3. OWNERS’ ENGAGEMENT OF BUILDING PROFESSIONALS FOR CARRYING OUT BUILDING- OR ESTATE-WIDE INSPECTIONS AND RENOVATION WORKS ...................................................................... 77 (i) The regulatory framework and model.............................................................................. 77 (ii) The Government’s facilitative role .................................................................................. 78 (iii) The other stakeholders’ responsibilities – owners and the PMC .................................... 80 F4. MANAGEMENT OF FIRE RISKS AND MAINTENANCE OF FSI ..................................................... 81 (i) The regulatory framework and model.............................................................................. 81 (ii) The Government’s supervisory role - the BD and FSD ................................................... 83 (iii) The other stakeholders’ responsibilities – owners, the PMC and RFSICs ...................... 88 F5. REGULATION AND SUPERVISION OF CONSTRUCTION METHODS, PROCEDURES AND USE OF MATERIALS UNDER THE MBIS AND MWCS...................................................................................... 89 (i) The regulatory framework and model.............................................................................. 89 (ii) The Government’s supervisory role ................................................................................. 92 (iii) The other stakeholders’ responsibilities – owners, the PMC and building professionals ........................................................................................................................................ 94 F6. REGULATION AND SUPERVISION OF BUILDING PROFESSIONALS – REGISTERED INSPECTORS (I.E. RI) UNDER THE MBIS AND REGISTERED CONTRACTORS (I.E. RC) FOR CARRYING OUT WORKS .. 95 (i) The regulatory framework and model.............................................................................. 95 (ii) The Government’s supervisory role ................................................................................. 97 F7. REGULATION AND SUPERVISION OF OCCUPATIONAL HEALTH AND SAFETY ......................... 100 (i) The regulatory framework and model............................................................................ 100 (ii) The Government’s supervisory role ............................................................................... 101 (iii) The other stakeholders’ responsibilities – owners, the PMC and building professionals ...................................................................................................................................... 103 PART III: TOR 1 ............................................................................................................................. 104 G. THE CAUSES AND ORIGIN OF THE FIRE, SPREAD OF FIRE AND HEAVY CASUALTIES - THE INTER-DEPARTMENTAL FIRE INVESTIGATION TASK FORCE’S GENERAL FINDINGS ................................................................................................................... 104 G1. A BRIEF CHRONOLOGY OF THE FIRE WITH ALL OF THE FACTORS CONTRIBUTING TO THE FIRE, SPREAD OF FIRE AND HEAVY CASUALTIES SUMMED UP .................................................................... 104 G2. THE INTER-DEPARTMENTAL FIRE INVESTIGATION TASK FORCE ......................................... 107 G3. THE IFITF’S GENERAL FINDINGS ON THE CAUSE AND ORIGIN OF THE FIRE .......................... 108 G4. THE IFITF’S GENERAL FINDINGS ON THE RAPID SPREAD OF THE FIRE ................................. 110 G5. THE IFITF’S GENERAL FINDINGS ON THE HEAVY CASUALTIES CAUSED BY THE FIRE ........... 115 G6. THE COMMITTEE’S INDEPENDENT EXPERT EVIDENCE AND AREAS OF AGREEMENT ............ 122 PART III(A): ON THE FIREFIGHTING AND RESCUE OPERATIONS .............................. 128 H. THE EVENTS FROM 26 TO 28 NOVEMBER 2025 ............................................. 128 H1. THE FSD ............................................................................................................................. 128

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H2. EVIDENCE ON THE FIREFIGHTING OPERATION – DIFFERENT PHASES OF THE WFC FIRE WITH REFERENCE TO THE FIRE ALARM LEVELS AND DEPLOYMENT OF RESOURCES ................................... 129 (i) Breakout of the fire (No. 1 Fire Alarm) ......................................................................... 129 (ii) No.3 Fire Alarm (including setting up of the Director’s Command Post) .................... 133 (iii) No.4 Fire Alarm ............................................................................................................. 136 (iv) No.5 Fire Alarm ............................................................................................................. 138 (v) Handover of command at 0935 hours on 2025.11.27 .................................................... 141 (vi) Declaration of the fire being “surrounded”, “under control” and delivery of the “STOP” message .......................................................................................................... 141 H3. EVIDENCE ON THE RESCUE OPERATION ............................................................................... 142 (i) Handling of 999 calls since the first call received ......................................................... 142 (ii) Evacuation at the early stages of the fire, in particular the status of the fire alarms at each of the eight blocks ................................................................................................ 145 (iii) The rescue operation...................................................................................................... 147 H4. EVIDENCE ON THE CHALLENGES AND DIFFICULTIES FACED BY THE FSD FRONTLINE OFFICERS

150 H5. EVIDENCE ON THE SETTING UP OF THE COMMAND POST FOR THE DISASTER VICTIM IDENTIFICATION UNIT (“DVIU”) ON 2025.11.28 AND DVIU’S OPERATION ................................... 155 H6. EVIDENCE ON CASUALTIES AND DAMAGE ........................................................................... 158 (i) The passing of Senior Fireman Ho Wai-ho ................................................................... 158 (ii) Other casualties and the Police’s Casualty Enquiry Unit (“CEU”) ............................. 161 (iii) Damage to property ....................................................................................................... 162 PART III(B): START OF THE FIRE ........................................................................................... 164 I. WORKERS SMOKING ONSITE ............................................................................ 164 I1. PREVALENCE OF WORKERS SMOKING ONSITE ...................................................................... 165 (i) The various complaints made by the WFC residents / IO to Prestige / Will Power, the PMC and LD ................................................................................................................. 165 (ii) The presence of photographic / video, contemporaneous and other factual evidence showing workers smoking onsite .................................................................................. 167 I2. HOW WORKERS SMOKING ONSITE RESULTED IN START OF THE FIRE .................................... 168 (i) The relevant factual evidence ........................................................................................ 168 (ii) The IFITF’s investigations ............................................................................................. 168 I3. THE PRIMARY AND SUPERVISORY RESPONSIBILITIES FOR SUCH CONTRIBUTING FACTOR ..... 169 (i) The regulatory and supervisory regime for workers smoking onsite ............................ 169 (ii) The primary responsibilities of Prestige and the PMC, including site management .... 171 (iii) The Government’s supervisory responsibilities ............................................................. 172 (iv) The actions taken by the LD at WFC ............................................................................. 174 (v) The role of the FSD ........................................................................................................ 175 I4. SYSTEMIC AND/OR OPERATIONAL WEAKNESSES ON THE REGULATORY LEVEL .................... 176 PART III(C): RAPID SPREAD OF THE FIRE ........................................................................... 180 J. THE USE OF SCAFFOLDING NETS UNCERTIFIED FOR FR PROPERTIES

180 J1. USE OF SCAFFOLDING NETS UNCERTIFIED FOR FR PROPERTIES AT WFC ............................. 180 (i) The various complaints made by the WFC residents / IO to Prestige / Will Power, the PMC and Government Departments ............................................................................ 184 (ii) The relevant conversation records and other factual evidence ..................................... 185 (iii) The unreliable test certificate presented by Prestige ..................................................... 186

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J2. HOW THE USE OF SCAFFOLDING NETS UNCERTIFIED FOR FR PROPERTIES RESULTED IN RAPID SPREAD OF THE FIRE ........................................................................................................................ 187 (i) The relevant factual evidence ........................................................................................ 187 (ii) The IFITF’s investigations and expert evidence ............................................................ 187 J3. THE PRIMARY AND SUPERVISORY RESPONSIBILITIES FOR SUCH CONTRIBUTING FACTOR ..... 188 (i) The FR standards and other requirements applicable to scaffolding nets administered by the BD ........................................................................................................................... 188 (ii) The primary responsibilities of Prestige and the RI ...................................................... 190 (iii) The Government’s supervisory responsibilities ............................................................. 192 (iv) The actions taken by the ICU at WFC, including the ICU’s practice of giving advance notice ............................................................................................................................ 193 (v) The actions taken by the LD at WFC ............................................................................. 197 J4. SYSTEMIC AND/OR OPERATIONAL WEAKNESSES ON THE REGULATORY LEVEL .................... 198 K. THE USE OF POLYVINYL CHLORIDE FOAM BOARDS AS COVERS ON WINDOWS AS TEMPORARY PROTECTION .......................................................................... 204 K1. EXTENSIVE USE OF FOAM BOARDS ...................................................................................... 205 (i) The various complaints made by the WFC residents / IO to Prestige / Will Power, the PMC and Government Departments ............................................................................ 207 (ii) The relevant conversation records and other factual evidence ..................................... 207 (iii) The actual manner of use of foam boards at WFC ........................................................ 209 K2. HOW THE EXTENSIVE USE OF FOAM BOARDS TO COVER UP WINDOWS RESULTED IN RAPID SPREAD OF THE FIRE AND HEAVY CASUALTIES ................................................................................ 210 (i) The relevant factual evidence ........................................................................................ 210 (ii) The IFITF’s investigations and expert evidence ............................................................ 210 K3. THE PRIMARY AND SUPERVISORY RESPONSIBILITIES FOR SUCH CONTRIBUTING FACTOR ..... 211 (i) The standards and requirements applicable to the use of foam boards as protection .. 211 (ii) The primary responsibilities of Prestige and the RI ...................................................... 214 (iii) The Government’s supervisory responsibilities ............................................................. 214 (iv) The actions taken by the ICU at WFC ........................................................................... 217 (v) The actions taken by the FSD at WFC ........................................................................... 219 K4. SYSTEMIC AND/OR OPERATIONAL WEAKNESSES ON THE REGULATORY LEVEL .................... 220 L. THE USE OF OTHER NON-FR CONSTRUCTION

MATERIALS

SPECIFICALLY, PLASTIC SHEETS / CANVAS ...................................................................... 225 L1. USE OF OTHER NON-FR CONSTRUCTION MATERIALS – THE RELEVANT EVIDENCE ............... 225 L2. HOW THE USE OF OTHER NON-FR CONSTRUCTION MATERIALS RESULTED IN RAPID SPREAD OF THE FIRE .......................................................................................................................................... 229 (i) Plastic sheets and canvas............................................................................................... 229 (ii) Toe-boards, wooden planks, nylon strips ...................................................................... 230 L3. THE PRIMARY AND SUPERVISORY RESPONSIBILITIES FOR SUCH CONTRIBUTING FACTOR ..... 231 (i) The FR standards and other requirements applicable to such other construction materials ....................................................................................................................... 231 (ii) The primary responsibilities of Prestige and the RI ...................................................... 232 (iii) The Government’s supervisory responsibilities on the use of such other construction materials ....................................................................................................................... 232 L4. SYSTEMIC AND/OR OPERATIONAL WEAKNESSES ON THE REGULATORY LEVEL .................... 233 PART III(D): OTHER FACTORS CONTRIBUTING TO THE HEAVY CASUALTIES ..... 236

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M. UNTENABILITY OF THE MEANS OF ESCAPE CAUSED BY CREATION OF ACCESSES 236 M1. CREATION OF WOODEN OR METALLIC ACCESSES AT ESCAPE STAIRCASES AT EVERY FIVE LEVELS OF WFC – THE RELEVANT CONVERSATION RECORDS AND OTHER FACTUAL EVIDENCE SHOWING THE MANNER OF CREATION OF SUCH ACCESSES AT WFC ................................................ 237 M2. HOW THE CREATION OF SUCH ACCESSES AT ESCAPE STAIRCASES RESULTED IN RAPID SPREAD, AS WELL AS SUCH HEAVY CASUALTIES ............................................................................................ 239 (i) The relevant factual evidence ........................................................................................ 239 (ii) The IFITF’s investigations ............................................................................................. 240 M3. THE PRIMARY AND SUPERVISORY RESPONSIBILITIES FOR SUCH CONTRIBUTING FACTOR ..... 240 (i) The standards and requirements applicable to the creation and use of such accesses and the LD’s occupational health and safety perspective ................................................... 240 (ii) The primary responsibilities of Prestige and the RI ...................................................... 243 (iii) The Government’s supervisory responsibilities ............................................................. 244 (iv) The actions taken by the ICU in the case of WFC ......................................................... 246 M4. SYSTEMIC AND/OR OPERATIONAL WEAKNESSES ON THE REGULATORY LEVEL .................... 246 N. THE FAILURE OF ALL FIRE ALARMS AT WFC ............................................. 250 N1. THE FAS AT EACH BLOCK OF WFC BEING SHUT DOWN ...................................................... 251 (i) The part of WFC renovation works touching on the FH/HR System ............................. 251 (ii) The engagement of China Status as the RFSIC ............................................................. 253 (iii) How the FAS was eventually deactivated by a staff member of the PMC ..................... 256 (iv) The maintenance and repair works carried out by Victory Fire at WFC from October to November 2025 up to the day of the fire ...................................................................... 259 N2. HOW THE SHUTDOWN OF THE FAS RESULTED IN SUCH HEAVY CASUALTIES ....................... 262 (i) The relevant factual evidence ........................................................................................ 262 (ii) The IFITF’s investigations and expert evidence ............................................................ 263 N3. THE PRIMARY AND SUPERVISORY RESPONSIBILITIES FOR SUCH CONTRIBUTING FACTOR ..... 264 (i) The regulatory and supervisory regime for the shutdown of FSI .................................. 264 (ii) The primary responsibilities of Prestige and the RI ...................................................... 267 (iii) The primary responsibilities of China Status................................................................. 269 (iv) The primary responsibilities of the PMC ....................................................................... 272 (v) The primary responsibilities of Victory Fire ................................................................. 274 (vi) The Government’s supervisory responsibilities: ........................................................... 275 (vii) The FSD’s handling of the FS251s and SDNs in the case of WFC and actions taken .. 280 N4. SYSTEMIC AND/OR OPERATIONAL WEAKNESSES ON THE REGULATORY LEVEL .................... 282 PART III(E): CONCERNS ON THE FIREFIGHTING AND RESCUE OPERATIONS ....... 291 O. THE GOVERNMENT’S REVIEW OF THE FIREFIGHTING AND RESCUE OPERATIONS ................................................................................................................................. 291 O1. THE TACTICAL CONSIDERATION TO CONTROL THE FIRE AT EACH AFFECTED BUILDING ACCORDING TO THE CIRCUMSTANCES AT THE EARLY STAGE OF THE FIRE INSTEAD OF DEPLOYING MANPOWER TO CARRY OUT EVACUATION ....................................................................................... 293 (i) The FSD’s understanding with the Police ..................................................................... 293 (ii) The FSD’s tactical consideration and difficulties in carrying out evacuation .............. 295 (iii) Whether sufficient weight had been given to the failure of the fire alarms in deciding not to deploy manpower on evacuation .............................................................................. 298

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(iv) Whether there was sufficient attention paid on the horizontal spread of fire from Wang Tai House to other blocks and inward spread of fire from the façade into the building ...................................................................................................................................... 299 O2. THE ESCALATION OF FIRE ALARM LEVELS ........................................................................... 300 (i) Whether the fire could be escalated to higher fire alarm levels earlier for deployment of further resources to the fire scene ................................................................................ 300 (ii) Whether the current fire alarm levels are capable of covering varying features at different fire scenes, e.g. the fire risks arising from large-scale renovation projects .. 304 O3. THE JOINT-HANDLING OF 999 CALLS BY THE POLICE AND FSD IN THE CASE OF FIRE .......... 305 (i) The discretion on the Police’s side to decide whether to refer a call to the FSD’s side305 (ii) The waiting time for some calls to be referred to the FSD ............................................ 307 (iii) The repetition of requests for information and questions on the FSD’s side ................ 308 (iv) The advice given to callers, in particular whether callers should generally be advised to evacuate ........................................................................................................................ 309 (v) The sharing of information within the FSD on requests for rescue, and the FSD’s recording of information .............................................................................................. 310 (vi) The call-back arrangement ............................................................................................ 311 O4. THE SUFFICIENCY OF THE FSD’S VARIOUS COMMUNICATION SYSTEMS AT THE FIRE SCENE AND BETWEEN THE FSD CALL CENTRE / DIRECTOR’S COMMAND POST AND THE FIRE SCENE ......... 312 O5. THE SAFETY AND TRACKING OF FIREFIGHTERS ENTERING THE BLAZE ................................. 314 (i) The sufficiency of breathing apparatus and other equipment generally used by firefighters at the fire scene .......................................................................................... 314 (ii) The sufficiency of the Firefighter Location System ........................................................ 316 (iii) The (lack of) ECP at the early stage of the fire ............................................................. 317 O6. RESPONSE TO OTHER QUERIES / CRITICISMS RAISED ............................................................ 317 (i) Coordination among different teams of the FSD at the scene to be enhanced? ............ 317 (ii) The bamboo scaffolds should be dismantled first? ........................................................ 319 (iii) The EAS should be invoked? .......................................................................................... 320 (iv) Helicopters and other advanced technologies such as drones should be used in the firefighting operation? .................................................................................................. 322 (v) Additional support from the Chinese Mainland should be sought? .............................. 324 O7. REVIEW ............................................................................................................................... 325 (i) Improvements already introduced ................................................................................. 325 (ii) Improvements to be introduced, and further studies to be conducted ........................... 327 PART III(F): SYSTEMIC ISSUES ................................................................................................ 330 P. ABUSE OF THE SYSTEM BY PROFESSIONALS AND OTHER NON- GOVERNMENTAL PARTIES ...................................................................................................... 330 P1. PRESTIGE CONSTRUCTION & ENGINEERING COMPANY LIMITED ........................................ 331 P2. WILL POWER (CONSULTANT PURPORTEDLY PROVIDING RI SERVICES) AND NG YEUK (THE RI)

333 P3. CHINA STATUS .................................................................................................................... 335 P4. VICTORY FIRE ..................................................................................................................... 336 P5. ISS (THE PMC) ................................................................................................................... 337 P6. RESIDENTS AS VICTIMS OF THE CUMULATIVE EFFECT OF PRIVATE-ACTOR FAILURE ............ 339 Q. SYSTEMIC ISSUES ACROSS KEY CONTRIBUTING FACTORS ................... 341 Q1. RELIANCE ON THE SELF-REGULATION OF PROFESSIONALS, AND SUFFICIENCY OF AUDIT CHECKS AND SITE INSPECTIONS ....................................................................................................... 343 Q2. SUPERVISION OF PROFESSIONALS – RCS, RIS AND RFSICS ................................................ 344

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Q3. SUFFICIENCY OF THE RELEVANT PROCEDURAL GUIDELINES, CODES OF PRACTICE, ETC. ...... 345 Q4. INTERNAL AND EXTERNAL COMMUNICATIONS .................................................................... 348 (i) Internal communications between the BD and ICU under the delegation arrangement ...................................................................................................................................... 348 (ii) Internal communications between the Police and FSD during the firefighting and rescue operations ..................................................................................................................... 348 (iii) Internal communications across departments and referrals of complaints / enquiries – the roles of the 1823 hotline, the HAD and other relevant Government Departments under ToR 1 in referring complaints and enquiries to the appropriate Department(s) for handling ........................................................................................................................ 349 (iv) External communications with residents ....................................................................... 350 (v) External communications with building professionals .................................................. 350 Q5. STATUS OF TECHNOLOGY APPLICATION .............................................................................. 351 R. THE GOVERNMENT’S SUBMISSIONS IN CONCLUSION OF TOR 1 ........... 353 R1. CONCLUSIONS ON THE DIRECT CAUSES OF THE FIRE, SPREAD OF FIRE AND HEAVY CASUALTIES

353 R2. CONCLUSIONS ON RESPONSIBILITIES OF PROFESSIONALS AND OTHER NON-GOVERNMENTAL PARTIES ........................................................................................................................................... 355 R3. CONCLUSIONS ON THE GOVERNMENT’S SYSTEMIC AND OPERATIONAL ISSUES ................... 356 (i) The weaknesses of the self-regulation regime for the supervision of building professionals under the MBIS and MWCS, and RFSICs .............................................. 357 (ii) Areas for improvement concerning the audit checks and inspections to identify risks and problems ....................................................................................................................... 358 (iii) Inadequacies in the relevant procedural guidelines, codes of practice, etc. ................. 359 (iv) Weaknesses in internal communications and exchanges between the BD and ICU under the delegation arrangement .......................................................................................... 359 (v) The trailing in the use of more advanced technologies to assist work and/or manage risks ............................................................................................................................... 359 R4. EXECUTIVE SUMMARY OF IMPROVEMENTS AND IMMEDIATE STEPS TAKEN BY THE GOVERNMENT AFTER THE FIRE ....................................................................................................... 360 R5. THE GOVERNMENT’S RESPONSE TO MEASURES RECOMMENDED BY THE COMMITTEE’S EXPERTS .......................................................................................................................................... 364 PART IV: TOR 2 ............................................................................................................................. 369 S. OUTLINE OF THE SYSTEMIC ISSUES AS IDENTIFIED FROM THE EVIDENCE 369 S1. BID-RIGGING AND OTHER ANTI-COMPETITIVE / UNLAWFUL CONDUCT – CONSULTANTS / RIS AND CONTRACTORS ......................................................................................................................... 370 S2. BRIBERY – CONSULTANTS / RIS AND CONTRACTORS BRIBING THE RELEVANT STAKEHOLDERS, E.G. THE PMC AND MEMBERS OF THE MC OF THE IO ...................................................................... 373 S3. OTHER MISCONDUCT OR DISHONEST CONDUCT IN THE TENDERING AND QUOTATION PROCESSES ...................................................................................................................................... 373 S4. ABUSE OF THE PROXY SYSTEM ............................................................................................ 374 S5. THE FAILURE OF THE PMCS IN DISCHARGING THEIR DUTIES ............................................... 375 T. THE INVOLVEMENT OF THE GOVERNMENT AND RELATED BODIES . 377 T1. THE URA ............................................................................................................................ 377 T2. THE COMPETITION COMMISSION ........................................................................................ 380 T3. THE ICAC........................................................................................................................... 382

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T4. THE POLICE......................................................................................................................... 384 U. THE ROLES AND RESPONSIBILITIES OF THE HAD ..................................... 387 U1. THE REGULATORY CONTEXT FOR THE HAD’S INVOLVEMENT ............................................. 387 (i) The HAD’s roles and responsibilities in facilitating building management.................. 387 (ii) The HAD’s powers under the Building Management Ordinance (Cap. 344) ................ 388 U2. THE CONDUCT OF THE RELEVANT WFC IO / DISPUTES AND CHALLENGES, AND THE HAD’S INVOLVEMENT AT DIFFERENT STAGES ............................................................................................. 389 (i) The stage of compliance with the MBIS and engagement of Will Power as the consultant providing RI services .................................................................................................... 389 (ii) The stage of renovation design and project procurement, and engagement of Will Power as the consultant for the subsequent renovation works ................................................ 390 (iii) The stage of contractor tendering and selection............................................................ 391 (iv) The stage of contract finalisation and execution ........................................................... 393 (v) The stage of re-election of the MC up to the fire ........................................................... 394 U3. SYSTEMIC AND/OR OPERATIONAL WEAKNESSES ON THE REGULATORY LEVEL .................... 396 V. IMPROVEMENT MEASURES (RELEVANT TO TOR 2) PROPOSED BY THE GOVERNMENT AS A WHOLE ................................................................................................... 404 PART V: ENDING REMARKS ..................................................................................................... 407 W. ENDING REMARKS ................................................................................................. 407

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PART I: INTRODUCTION A. THE WANG FUK COURT (“WFC”) FIRE A1. The WFC Fire 1. On 26 November 2025, a fire broke out at WFC, a Home Ownership Scheme (“HOS”) estate in Tai Po, New Territories, comprising eight high-rise residential blocks built in 1983. 2. At the time of the incident, all eight blocks were undergoing concurrent exterior maintenance and renovation works, and were enveloped in bamboo scaffolding and protective netting that wrapped the towers from the ground to the upper floors. The renovation project, valued at approximately HK$336 million, was entrusted to registered professionals and a registered contractor (“RC”) who bore primary statutory obligations under, inter alia, the Buildings Ordinance (Cap. 123) (“BO”), Fire Services Ordinance (Cap. 95) (“FSO”), Occupational Safety and Health Ordinance (Cap. 509) (“OSHO”), and Factories and Industrial Undertakings Ordinance (Cap. 59) (“FIUO”) to ensure that the works were carried out safely and in compliance with legal and regulatory requirements. They had each failed their responsibilities and the public’s expectations. 3. The fire was first reported to the Fire Services Communications Centre (“FSCC”) at 1451 hours. The caller reported a fire with explosion at scaffolding installed along the external wall of Wang Cheong House. On the evidence presently available to the Committee, the fire originated from the flat roof outside Flats 104 and 105 of Wang Cheong House. CCTV footage and videos taken by members of the public point consistently to that location as the place where the initial fire took hold.

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The fire spread with extraordinary speed. Within approximately 20 minutes of the first fire appliance arriving at the scene, the fire had spread from its point of origin to multiple locations across Wang Cheong House, extending to multiple façades and the open ground surrounding the building, and had reached Wang Tai House. In certain blocks, the fire spread across multiple levels within an extremely short period of time, driven by the chimney-like configuration of the re-entrant, which confined and directed hot air, smoke and combustible gases upward. Wind-carried embers then spread the fire horizontally from building to building. By the conclusion of the incident, 12 instances of rapid vertical fire spread were observed along the re-entrants across 6 buildings.

The fire burned for approximately 43 hours and was declared “surrounded” at 2131 hours on 27 November 2025, “under control” at 0315 hours on 28 November 2025, and largely extinguished at 1018 hours on 28 November 2025. At its peak, the response involved 174 fire engines, 47 ambulances, and 989 FS personnel, the largest deployment in the history of the Fire Services Department (“FSD”). Over the course of the entire 43-hour operation, the cumulative deployment comprised 581 fire appliances, 217 ambulances, and 3,531 FS personnel (including 2,643 firefighters, 224 fire officers, 585 ambulance personnel and 79 ambulance officers).

The scale and severity of the fire was without precedent in Hong Kong’s post- war history. With seven of the eight towers affected, thousands of residents lost their homes or found them uninhabitable due to fire damage, smoke, water and structural risks. The displacement of nearly 5,000 people created rehousing, welfare and support needs that required sustained Government attention. 11

A2. The Government’s immediate response – the three Task Forces 7. The Government responded swiftly and comprehensively to the incident. On 2 December 2025, the Chief Executive announced that three cross-bureau Task Forces had been established to coordinate the relief, investigation and rehousing work. 8. The first was the Task Force on Investigation and Regulation, led by the Chief Secretary for Administration, which was tasked with coordinating the technical and regulatory probes into the fire’s causes, performance of FSIs, and adequacy of construction safety and building maintenance practice. This Task Force brought together relevant bureaux and departments, including the FSD, Hong Kong Police Force (“Police”), Buildings Department (“BD”), Labour Department (“LD”) and other relevant regulators to investigate the fire scene, examine materials and design features, assess compliance with safety legislation, and identify immediate risks at similar construction sites across the territory, and formulate improvement measures to enhance the current regulatory system. The Inter-departmental Fire Investigation Task Force (“IFITF”), whose Final Investigation Report (May 2026) forms a primary evidential foundation for the Committee’s work under ToR 1, was established within this structure. 9. The second was the Task Force on Emergency Support and Fund-Raising, led by the Deputy Chief Secretary for Administration, which focused on immediate financial assistance, social welfare and community support. The Support Fund for WFC in Tai Po was established, seeded with HK$300 million in government capital and supplemented by public and corporate donations. An emergency subsidy of HK$10,000 per affected household was disbursed within days; by 2 December 2025, nearly 1,916 households had received this payment. A “one social worker per household” model was implemented, assigning dedicated case workers to coordinate welfare services, counselling and administrative support.

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An online platform (taipodonation.hk) was established to register and coordinate offers of supplies and donations from the public under the coordination of this Task Force. 10. The third was the Task Force on Emergency Accommodation Arrangements, led by the Deputy Financial Secretary, which addressed the logistical challenge of rehousing thousands of people. By early December 2025, over 1,000 residents had been placed in youth hostels, camps or hotel rooms, while over 1,600 had moved into transitional housing units or flats provided by the Hong Kong Housing Society. Temporary shelters were maintained, and the Government assessed residents’ actual needs and matched donated supplies accordingly. Tens of thousands of items were distributed to affected residents and temporary accommodation facilities. 11. These three Task Forces’ activities represented an immediate comprehensive crisis response combining operational firefighting and investigation, social and financial support, housing solutions, and legal facilitation. At the same time, given the scale and severity of the incident, the Government has gone above and beyond routine administrative follow-up and the Chief Executive took the swift initiative of establishing a mechanism for independent, public scrutiny, i.e. the setting up of the Independent Committee.

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B. ESTABLISHMENT OF THE INDEPENDENT COMMITTEE B1. The Chief Executive’s decision to set up the Independent Committee (“Committee”) 12. On 2 December 2025, while announcing updates on the three Task Forces, the Chief Executive stated that an Independent Committee would be established to examine the causes and related issues of the WFC fire. A formal Government announcement on 12 December 2025 confirmed that the Committee had been set up, with a clear mandate to complete its work within nine months. 13. In particular, the Chief Executive made clear that we are to ensure that justice is done, and to ensure that we will prevent such a tragedy from happening again. The Chief Executive made a call for a thorough investigation and serious reform, and promised to pursue accountability regardless of who he or she is. The primary aim is to uncover the truth, ensure that justice is served, let the deceased rest in peace and provide comfort to the living1. 14. On 19 December 2025, the Committee convened its first meeting and formally commenced its work. The decision to appoint a sitting High Court Judge as Chairman and to identify the body as “independent” was a deliberate measure to ensure impartiality and professionalism (which have unsurprisingly been demonstrated by the Committee in its work hitherto), drawing on Hong Kong’s established tradition of judge-led inquiries in major public safety incidents. 15. The Chief Executive emphasised that the Committee faced a substantial investigative task in examining two broad issues.

1 Remarks by the Chief Executive on matters related to the WFC fire in Tai Po at a media session on 2 December 2025 (https://www.info.gov.hk/gia/general/202512/02/P2025120200489.htm)

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1. 1. The first related directly to the fire: the causes and circumstances that led

to the blaze, including FSIs and their supervision; the adequacy of construction safety requirements and supervision in building maintenance and renovation works; the comprehensiveness of safety-compliant materials lists; the effectiveness of verification and testing systems; the roles and responsibilities of government officers, authorised professionals, contractors and others; and the liabilities arising from the aforementioned issues. 15.2. The second concerned systemic problems in large-scale building maintenance and renovation, including undue connected interests, conflicts of roles, improper collusion, bid-rigging corruption and irregularities in tendering processes. 16. As to the legal nature of the Committee, the Chief Executive explained that rather than immediately invoking the Commissions of Inquiry Ordinance (Cap. 86), which provides statutory powers of compulsion, he had opted to appoint the Committee under the general executive authority. He stated that a reserve power had been given to the Committee: if, in the course of its work, it considered that exercising powers equivalent to a statutory Commission of Inquiry would help it complete its tasks, the Chief Executive would be “very willing to consider” 2 appointing it as such, following the legal procedures for a Commission of Inquiry under existing ordinances. 17. This formulation placed the Committee in a position whereby it operates as an executive-appointed body, relying primarily on voluntary cooperation and the authority of its composition for evidence gathering, while retaining the explicit potential for transition to a Commission of Inquiry exercising all such statutory

2 Remarks by CE on matters related to the WFC fire in Tai Po at a media session on 12 December 2025 (https://www.info.gov.hk/gia/general/202512/12/P2025121200776.htm)

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powers as are necessary. The adoption of this form of inquiry was aimed at ensuring that the investigative work could proceed in a more flexible and expeditious manner while upholding the principles of openness and transparency. 18. The Government expressly supports this mode of inquiry. The Government immediately pledged its full support, and continues to pledge its full support, to the work of the Committee, in order to fulfil the expectations of the families of the deceased, the residents of WFC and the wider public for a full account of the truth behind this fire. As it turned out, 27 factual witnesses being current or former officers and representatives from different Bureaux and Departments of the Government, gave oral evidence (in addition to numerous written statements/submissions filed over the course of the proceedings). 19. As the Chairman neatly put it, what the Committee is trying to do is to reassess the risks and try to make it as best as it can. The Committee cannot be overly idealistic – there are other considerations to be taken into account and what the Committee is suggesting is that it will set the path forward. Stakeholders’ interests will be debated and what the Committee is trying to do is to try to raise awareness of the whole public about the risks associated with large-scale building maintenance and renovation projects in the future [Day 27/101/2-13]. B2. The Committee’s Terms of Reference (“ToR”) 20. The Committee’s ToR, published on 12 December 2025, define the boundaries of the inquiry and illuminate its purpose. They may be summarised as identifying the Committee’s tasks in four parts. 21. ToR 1 concerns the events of 26 November 2025: what happened at WFC, why the fire occurred, and what factors led to the heavy casualties. This includes an examination of the initial ignition, the role of construction materials and design

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features in the fire’s rapid spread, the functioning and supervision of FSIs, the adequacy of construction safety requirements, standards, supervision and day-to- day maintenance for the building maintenance and renovation works, whether the prevailing list of materials meeting safety standards is comprehensive and whether the related verification and testing systems are effective, the roles and responsibilities of personnel with supervisory roles across all stages (including government officers, authorised professionals, contractors and others), and the liabilities arising from the aforementioned issues. 22. ToR 2 moves from the particular to the general, asking whether there exist wider systemic problems in large-scale building maintenance and renovation works, including undue connected interests, conflicts of roles, or improper collusion across all stages, and whether bid-rigging corruption or irregularities were involved in the tendering process. 23. ToR 3 requires the Committee to examine whether regulation and penalties under relevant existing laws are adequate in respect of both matters above. 24. ToR 4 requires the Committee to make recommendations regarding matters in ToR 1 to 3. 25. The ToR therefore position the Committee as a fact-finding body, with recommendations regarding the relevant matters to be made. A critical feature of the ToR, as addressed further below, is to clearly demarcate the role of the Committee and that of law enforcement agencies and relevant courts/tribunals, with the latter being responsible for addressing any questions and determinations of legal liability (which fall outside the scope of the ToR) [A1/4].

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B3. The involved parties 26. Given the complexity of the fire and breadth of the ToR, the Committee (rightly) adopted a structured approach to participation, identifying a category of “involved parties” which could participate in the evidential hearings, including rights to be legally represented, to call witnesses and/or to make submissions. The Rules of Procedure for the Evidential Hearing set out the mechanisms for parties to apply for participation and the logistical framework for hearings. 27. As at today, a total of 42 involved parties have been permitted by the Committee to participate in the Evidential Hearing. These comprise the following: 27.1. Six Government departments (the Police, FSD, LD, BD, Housing Department (“HD”, specifically the Independent Checking Unit (“ICU”)), and Home Affairs Department (“HAD”)); 27.2. Three statutory or regulatory bodies (the Competition Commission, Independent Commission Against Corruption (“ICAC”) and Urban Renewal Authority (“URA”)); 27.3. Ten residents of WFC (Ms Chow Yim Ling, Mr Lee Kwok Hung, Mr Leung Ho Hin, Ms Lo Hiu Kei, Mr Lo Hiu Kin, Mr Yip Ka Kui Sdanni, Mr Yip Shun Ting, Mr Yip Shun Yin, Mr So Hiu Fung and Ms Chong Sio Pek); 27.4. Fourteen current or former office-holders of the 12th MC of the IO of WFC (Mr Tsui Moon Come Tony as Chairperson, Mr Mak Chi Hung as Vice Chairperson, Mr Ho Chung Hang as Secretary, Ms Cheung Tsz Wan as Treasurer, and ten Members);

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1. 5. Two property management entities (ISS and Hop On Management

Company Limited (“Hop On”)); 27.6. Victory Fire (an RFSIC); 27.7. Mr Leung Ping Kay (Director of China Status); 27.8. Mr Wong Hap Yin (Director of Will Power); 27.9. Mr Hau Wa Kin and Mr Ho Kin Yip (Directors of Prestige); 27.10. Mr Wong Chung Kee Steve (Authorised Signatory (“AS”) of Prestige); and 27.11. China Taiping Insurance (HK) Company Limited. 28. The inclusion of residents and former Management Committee members among the involved parties has demonstrably allowed them to articulate their concerns, present evidence on the handling of safety complaints and tendering process, and participate in the proceedings of the Committee (with some benefitting from legal assistance and representation). 29. The participation of the Competition Commission and ICAC is a recognition that the systemic dimension under ToR 2 includes potential breaches of competition and anti-corruption laws. Their involvement has evidently enriched the Committee’s evidentiary base on sector-wide practice and vulnerabilities. B4. Legal representation of the involved Government Bureaux / Departments 30. The relevant Government bureaux and departments — namely the Police, FSD, LD, BD, ICU of the HD, and HAD — are represented in these proceedings by (1) the Department of Justice and (2) a team of Counsel comprising Mr Jenkin Suen SC, Mr Calvin Cheuk SC, Mr Michael Lok and Mr Charlie Liu.

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B5. How the involved Government Bureaux / Departments have assisted the Committee’s work, and their overall approach to the inquiry 31. The Government has adopted a proactive approach to cooperate with and support the work of the Committee. Since the Committee was set up, various departments and bureaux have actively responded to letters and requests issued by the Committee’s legal team, whilst simultaneously and proactively taking the initiative of submitting documentary evidence, information as well as witness statements relevant to the ToR to the Committee before relevant requests were made on the Committee’s behalf. As illustration, the Government has, as recently as 29 June 2026, submitted a further witness statement dated 25 June 2026 in relation to the examination of plastic sheeting by Dr Lee Wing-man of the Government Laboratory to provide a fuller picture to the Committee. 32. The scale of cooperation has been substantial. Since the Committee commenced its work in December 2025, the relevant Government departments have submitted a large volume of witness statements and documentary materials within a short period. The Committee has received nearly one million individual documents from Government departments, law enforcement agencies, contractors and members of the public, along with hours of CCTV footage and digital materials. The total volume of data exceeds one terabyte. 33. Government departments have contributed to this evidential base in multiple ways. 33.1. They have provided formal witness statements and made witnesses available for oral evidence, in some cases over several days. Witness statements have been published on the Secretariat’s website subject to necessary redactions.

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1. 2. In all, during the course of the evidential hearings, 31 witnesses from the

six Government departments represented in these proceedings and the IFITF gave oral evidence across 13 hearing days between 10 April and 25 June 2026. Of these, 19 witnesses were from the FSD and the IFITF, giving evidence over 8 hearing days (Days 10–12, 17–19 and 25–26), spanning every level of the organisation from frontline Senior Station Officers to the Director of Fire Services (“DFS”); 3 were from the LD, giving evidence on 1 hearing day (Day 16); 1 was from the BD, giving evidence on 1 hearing day (Day 20); 3 were from the HAD, giving evidence across 2 hearing days (Days 20 and 24); 3 were from the ICU of the HD, giving evidence across 3 hearing days (Days 22, 23 and 24); and 2 were from the Police, giving evidence on 1 hearing day (Day 12). 33.3. Witnesses have been examined by Counsel for the Committee and by other involved parties’ counsel on specific issues including the division of responsibility for assessing flammable materials, functioning and supervision of fire alarms, enforcement of occupational safety rules, and handling of building maintenance complaints. 33.4. In addition to those witnesses who gave oral evidence, a large number of Government witnesses provided witness statements to the Committee which were admitted into evidence without being called to give oral testimony. 33.5. They have also disclosed internal records relating to the supervision of the WFC maintenance works and their follow-up actions in response to complaints. 34. In tandem with the work of the Committee, the Government departments have begun implementing improvement measures even before the Committee’s final

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report, reflecting a proactive, learning-oriented stance. These measures are addressed in detail below. 35. The Government will continue to cooperate fully with the work of the Committee throughout the course of the hearings and beyond, so as to present an objective and complete picture of the incident to the Committee and the public. C. THE COMMITTEE’S TREATMENT OF EVIDENCE AND MAKING OF FINDINGS C1. The purpose of the inquiry 36. The purpose of the Committee’s inquiry is to investigate the matters set out under the ToR. It includes a fact-finding exercise based on the available evidence, with a view to making recommendations for the prevention of recurrence. 37. It is not an exercise in determining any party’s legal liabilities, civil or criminal. This distinction (from the role of law enforcement agencies and relevant courts/tribunals) is fundamental to the proper understanding of both the Government’s submissions and the Committee’s findings. Specifically, the Government takes the position that neither (1) the Government’s submissions in these proceedings nor (2) the Committee’s findings, assessments and conclusions should be understood to imply guilt or any civil, criminal or other legal liabilities on the part of any person or body. The issues relevant to legal liabilities are properly left for the relevant bodies to determine in other appropriate fora. 38. The Committee has itself recognised this distinction. The Note to the ToR expressly exclude determinations of legal liability from the scope of the inquiry [A1/4]. By way of illustration, Counsel for the Committee has explained that ongoing criminal investigations proceed in parallel, that if a prosecution is brought the determination of guilt will be a matter for the courts, and that the

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Committee’s role is to provide clarity and accountability rather than to substitute for judicial processes. 39. This separation ensures that the Government will have the benefit of the Committee’s findings and recommendations in considering further improvement measures without awaiting the conclusion of what may be protracted legal proceedings. C2. The handling of evidence received by the Committee 40. The Committee has received evidence in multiple forms: witness statements from government officers, contractors, consultants, property management staff, FSI contractors, residents and others; documentary exhibits including contracts, correspondence, photographs, meeting minutes, statutory submissions, circulars, codes of practice and legislation; CCTV footage from the day of the fire; digital communications records; expert reports; and the Final Investigation Report of the Inter-departmental Fire Investigation Task Force (May 2026). 41. The Committee conducted public evidential hearings over 27 hearing days (between 19 March and 25 June 2026), during which 73 factual witnesses and 7 expert / IFITF witnesses gave evidence and were examined on their respective areas. Witnesses were examined by Counsel for the Committee, Counsel for the involved parties, and by the Chairman and Members of the Committee. 42. The Government takes note of the Committee’s decision, announced by the Chairman on 22 June 2026, not to recommend to the Chief Executive that the Committee be converted into a statutory Commission of Inquiry under the Commissions of Inquiry Ordinance (Cap. 86). As the Chairman explained, the Committee reached this decision after careful consideration of five factors: (i) the Committee had already obtained sufficiently comprehensive information to

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identify what happened and why, and was confident it could analyse and draw conclusions on all matters within the ToR; (ii) conversion to a statutory inquiry would inevitably prolong the proceedings due to the procedural complexity inherent in statutory inquiries, at a time when the public interest demanded timely completion (with the UK’s Grenfell Tower Inquiry as a counter-example); (iii) conversion might affect or at least delay ongoing or subsequent criminal and civil proceedings, and could complicate the work of the law enforcement agencies; (iv) the current modus operandi afforded greater flexibility and openness in the conduct of the inquiry; and (v) investigations into bid-rigging or irregularities at WFC specifically were more appropriately pursued by the law enforcement agencies, which had already laid charges and had not ruled out further enforcement action. The Government respectfully supports the Committee’s approach which we believe cast a proper and appropriate balance between the need for completeness in the evidence and other relevant considerations such as timing. The Government particularly echoes the Committee’s position that this decision does not diminish the Committee’s ability to make factual findings and draw appropriate inferences from the evidence before it. After all, as has been made clear from the outset and emphasised throughout, it was and remains a matter for the Committee to determine what, if any, additional powers it may require in order to complete its work. 43. In particular, the absence of certain involved parties and/or their failure to give evidence before the Committee does not preclude the Committee from drawing (adverse) inferences from that absence or failure, and/or from making (adverse) factual findings based on the totality of the evidence available. Ultimately, and by way of illustration, whether any adverse inference is to be drawn “is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so.

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Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances”: ANZ Commodity Trading Pty Ltd v Excellence Raise Overseas Ltd [2025] HKCA 701 at §121 per Kwan VP; citing Efobi v Royal Mail Group Ltd [2021] 1 WLR 3863 at §41 per Lord Leggatt JSC. Echoing the above, as observed by the Chairman when explaining the Committee’s decision (per paragraph 42 above) on 22 June 2026: “On the other hand, even if the stakeholders have given up the opportunity to testify in front of the public, the Committee can still make an adverse finding against them with the information we have already had. In other words, even though witnesses refused or choose not to attend the hearing to give testimony, this will not affect our ruling in terms of roles and accountability” [Day 25/9/13-20]. 44. The Government submits that in the present case, where a party with knowledge of relevant facts has chosen not to give evidence (and a fortiori where they have declined an invitation by the Committee to do so), and the available evidence from other sources permits a finding of fact on the balance of probabilities, the Committee is fully entitled to make that finding insofar as is necessary. In any case, the Committee should be entitled to consider the totality of evidence (or its absence) before it to draw its conclusions using its common sense as appropriate. 45. The admissibility of and weight to be given to uncontested evidence, the inferences to be drawn from silence, and the assessment of credibility where accounts conflict are all matters for the Committee’s judgement, exercised in light of the circumstances of the case and gravity of the findings concerned. C3. Burden/Standard of Proof 46. The Committee is not constituted as a formal Commission of Inquiry under the Commissions of Inquiry Ordinance (Cap. 86). Nevertheless, its fact-finding

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function is materially akin to that of a statutory commission. The Government respectfully invites the Committee to consider and, where appropriate, apply the principles developed in the context of commissions of inquiry and analogous inquisitorial proceedings in Hong Kong, as summarised below. 47. As the Commission of Inquiry into the Construction Works at and near the Hung Hom Station Extension under the Shatin to Central Link Project stated in its Final Report at §115, while “parties before a commission of inquiry may not be required to discharge any formal burden of proof, a commission must come to its determinations according to the measure of objective standards.” This approach is consistent with the Court of Appeal’s decision in Securities and Futures Commission v Cheng Chak Ngok [2018] 4 HKLRD 612, in which Cheung JA held at §9.9 that “the orthodox approach that in an inquisitorial inquiry by a tribunal there is no place for the requirement of burden of proof is the guiding principle,” reasoning that “[i]f there are no adversaries as such then it is meaningless to talk about a party carrying a burden.” An analogous approach was taken in Riady, Tjondro Stephen v Insider Dealing Tribunal (unrep., CACV 310/2002, 9 January 2003), where Ma JA (as he then was) held that an Insider Dealing Tribunal “does not have parties before it in the sense of a prosecution and accused or a plaintiff and defendant. Its function is not to adjudicate between rival claims or positions but to inquire into the question of insider dealing. The proceedings are not accusatorial but inquisitorial. There is no lis as such.” 48. The Government respectfully submits that the Committee can adopt a similar approach. No party before the Committee carries a formal burden of proof. The Committee’s task is to inquire into the matters set out in the ToR, to receive and evaluate the evidence placed before it, and to make findings according to objective standards.

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As to the standard of proof, i.e. how the Committee may be satisfied that a finding of fact is sufficiently supported by the evidence (noting that there is no party which carries a formal burden of proof so that this is an exercise for the Committee with reference to the available evidence), the Committee may wish to note that the Commissions of Inquiry Ordinance (Cap. 86), whilst providing that a commission of inquiry is a “judicial proceeding” (s. 11(1)), makes no mention of the standard of proof to be applied.

Against such background, public inquiries have consistently reserved to themselves the flexibility to determine what standard of proof they require in order to make their findings. The standard of proof applicable to the Committee’s findings of fact is, in general, the civil standard: the balance of probabilities. A fact is established if the Committee is satisfied that it is more probable than not. This civil standard has been consistently adopted in Hong Kong public inquiries: the Report of the Commission of Inquiry on Allegations relating to The Hong Kong Institute of Education (2007) at §2.18; the Report of the Commission of Inquiry into the Collision of Vessels near Lamma Island on 1 October 2012 (2013) at §32; and the Final Report of the Commission of Inquiry into the Construction Works at and near the Hung Hom Station Extension under the Shatin to Central Link Project (2020) at §116.

The standard is not, however, applied mechanically. It calls for a degree of satisfaction which varies according to the gravity of the facts to be established. As the Court of Final Appeal explained in HKSAR v Lee Ming Tee (2003) 6 HKCFAR 336 at 361-362 per Sir Anthony Mason NPJ, and as Lord Nicholls held for the majority in Re H [1996] AC 563 at 586D-F: “The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in 27

mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence. Deliberate physical injury is usually less likely than accidental physical injury…… Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation.” 52. Public inquiries may also, in appropriate circumstances, call for a higher standard for specific issues of particular gravity. “It has been observed that public inquiries ‘have consistently reserved to themselves the flexibility to determine what standard of proof they require in order to make their findings’, and the lack of any stipulation or guidance in the Ordinance tends to support the pragmatic principle of flexibility”: Commissions of Inquiry in Hong Kong at §7-24. 53. By way of illustration, in the Hung Hom Station Extension Commission of Inquiry, the Commission chose to adopt the civil standard of proof in general, save for the primary issue of structural safety. On that issue, the Commission adopted a standard akin to the criminal standard, stating at §117 as follows: “The Commission recognises that it would not be in the public interest - indeed it would manifestly be contrary to public interest - if it was to go no further than to determine that the structural works which are the subject of this expanded inquiry are more likely than not to be safe or unsafe. What (by clear inference) the Terms of Reference require, and what the public seeks, is an unequivocal assurance of safety or a clear statement of concern as to lack of safety. Accordingly, whatever language may conveniently be used in context, any and all findings as to structural safety will be made on the basis that, having given anxious consideration to all relevant evidence, the Commission is satisfied so that it is sure of such findings.” 54. In the present case, it is submitted that where the findings to be made involve attribution of responsibility or criticisms of the conduct of specific entities or stakeholders (whether in the construction industry, in property management, or

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in the supervisory regime, etc.), the Committee may consider whether it is satisfied, on the balance of probabilities, that such findings are supported by evidence commensurate with their gravity. A major distinction between the present case and the Hung Hom Station Extension Commission of Inquiry is that the latter adopted a standard akin to the criminal standard precisely because its Terms of Reference required it to address “concerns about public safety” (§29), a category of finding for which it may well be contrary to the public interest to go no further than to determine that the structural works were more likely than not to be safe or unsafe. 55. Conversely, where a finding concerns a systemic or structural deficiency (such as inadequacies or insufficiencies in industry standards, professional self-regulation, statutory control, regulatory and supervisory framework, contingency measures or resource allocation), it does not necessarily involve attribution of responsibility in the same sense and might not require the same degree of circumspection. The Government accepts that where the evidence demonstrates systemic weaknesses, the Committee should not hesitate to say so clearly. C4. “Causation” in the legal context 56. The ToR require the Committee to examine “the causes and circumstances that led to the fire” and the factors that led to the heavy casualties. This necessarily involves questions of causation: whether, and to what extent, particular acts, omissions or conditions contributed to the outbreak of the fire, its rapid spread, or the severity of casualties. 57. The Government recognises that the Committee’s inquiry is not litigation, and that questions of causation do not arise in the Committee’s proceedings in the same manner as they do in a civil action or a criminal prosecution. The Committee

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is not required to determine legal liability or to apportion fault in the technical legal sense. 58. Nevertheless, certain principles developed in the law of causation may, by analogy, provide a useful framework for the Committee’s analysis — particularly where the evidence discloses multiple contributing factors and the Committee is called upon to assess the relative significance of each of them. 59. In Stapley v Gypsum Mines Ltd [1953] AC 663, Lord Asquith of Bishopstone observed at 687 that “Courts of law must accept the fact that the philosophic doctrine of causation and the juridical doctrine of responsibility for the consequences of a negligent act diverge. To a philosopher… the whole legal doctrine of responsibility must seem anomalous. To him, if event C could not occur unless each of two previous events — A and B — had preceded it, it would be unmeaning to say that A was more responsible for the occurrence of C than was B, or that B was more responsible for its occurrence than was A. The whole modern doctrine of contributory negligence, however, proceeds on the contrary assumption… But the fission between law and strict logic goes deeper than that. For I am persuaded that it is still part of the law of this country that two causes may both be necessary pre-conditions of a particular result — damage to X — yet the one may, if the facts justify that conclusion, be treated as the real, substantial, direct or effective cause, and the other dismissed as at best a causa sine qua non and ignored for purposes of legal liability.” 60. Lord Reid expressed similar sentiments at 681: “To determine what caused an accident from the point of view of legal liability is a most difficult task. If there is any valid logical scientific theory of causation, it is quite irrelevant in this connection… The question must be determined by applying common sense to the facts of each particular case. One may find that as a matter of history several

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people have been at fault and that if any one of them had acted properly the accident would not have happened, but that does not mean that the accident must be regarded as having been caused by the faults of all of them. One must discriminate between those faults which must be discarded as being too remote and those which must not. Sometimes it is proper to discard all but one and to regard that one as the sole cause, but in other cases it is proper to regard two or more as having jointly caused the accident. I doubt whether any test can be applied generally.” 61. These passages were cited with approval by our Court of Appeal in Cheng Kin Ping v Woo Cho Wing John (unrep., CACV 252/1999, 26 January 2000) at 9-

1. The Court further noted that no definitive test has been formulated to enable

questions of causation to be answered universally: the “but for” test might not be universally applicable, and it all depends on the facts of each case. 62. After all, the Government is confident that the Committee (chaired by a highly experienced High Court Judge) is well placed, having heard extensive evidence over many hearing days, to apply common sense to the facts and to discriminate between those factors which were the real, substantial and effective causes of the fire, its spread and the casualties, and those which (while they may have been background conditions or which, if remedied, might have reduced the probability or severity of the fire) were not causally decisive in the same way.

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D. OVERVIEW OF THE GOVERNMENT’S CASE 63. The evidence before the Committee paints a coherent and clear picture. A renovation project valued at approximately HK$336 million, affecting eight residential towers housing nearly 5,000 people, was entrusted to professionals and contractors who bore primary statutory and contractual obligations to ensure the safety and quality of the works. 64. It is now clear that those professionals and contractors have failed their duties and have abused the system through a combination of deliberate cheating, conspiracy, collaboration, neglect, contraventions and non-compliance that directly caused the fire, its rapid spread, and the death of 168 people. 65. The Government’s overall case may be summarised in the following terms. 66. The regulatory framework for building maintenance and renovation in Hong Kong has long been founded on a model of professional self-regulation, underpinned by statutory obligations, registration requirements, and supervisory mechanisms. This was based on the trust and confidence that the Government had reposed in the professionals in the construction industry. 67. This model was not developed in a vacuum; it has developed and modified over all the six terms of HKSAR Government. Over the years, there have been consistent calls from the industry, the legislature and indeed the public for the Government to streamline regulatory framework and procedures so as to reduce costs and delays for building owners, particularly in the context of building maintenance and minor works. 67.1. As informed to the Legislative Council during the development of the MWCS (first proposed in 2007 and fully implemented on 31 December

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2010), prior to its implementation the building control system under the BO applied to all building works regardless of their scale and complexity, requiring approval of building plans and consent to commence building works from the BA before commencement; and “the costs and time involved in complying with these requirements were often disproportionate to the scale of the works” with the result that “many minor building works were carried out without complying with BO, and therefore became unauthorized building works” (LC Paper No. CB(1)1116/11-12(08)3, §2). 67.2. The MWCS was introduced in 2010 precisely to “facilitate members of the public to carry out minor works in private buildings lawfully through simplified procedures and thereby improving building safety in Hong Kong” (LC Paper No. CB(1)1116/11-12(08), §3). 67.3. Similarly, the MBIS (first announced in 2007, enacted in 2011 and brought into full operation on 30 June 2012) was introduced following extensive Legislative Council scrutiny with the objective of ensuring that building owners would “undertake the responsibility for keeping their buildings in good conditions, including shouldering the financial commitment”, given that “[b]uilding neglect has been a long-standing problem in Hong Kong. The presence of aging buildings lacking proper care and maintenance poses potential threats to residents and the public at large” (LC Paper No. CB(1)343/13-14(04) 4 , §2), with the system relying on registered professionals to carry out and supervise the prescribed inspection and repair works. 67.4. The degree of reliance on professional self-regulation in both schemes was thus a considered policy decision, developed against a background of

3 https://www.legco.gov.hk/yr11-12/english/panels/dev/papers/dev0228cb1-1116-8-e.pdf 4 https://www.legco.gov.hk/yr13-14/english/panels/dev/papers/dev1126cb1-343-4-e.pdf

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sustained demand for a more efficient and business-facilitating regulatory environment, and endorsed by the legislature on the (not unreasonable) understanding and expectation that professionals would ordinarily and as a matter of principle honour and discharge their statutory obligations and that audit checks and disciplinary mechanisms would serve as sufficient safeguards against aberrations (and it was hardly envisioned that such professionals would, whether on their own or in collusion with one another, deliberately circumvent the system and the relevant authorities by active deception and manipulation). The bottom line is that these professionals who (i) should have requisite expertise and integrity, (ii) are bound by professional ethics or code of conduct, and (iii) would otherwise have their qualifications and reputation at stake, can be reasonably expected and relied upon to comply with the relevant legal and regulatory requirements. 68. Thus, this model entrusts and places the primary responsibility for the safety and quality of works squarely upon the registered professionals, contractors and other private actors engaged by building owners to plan, carry out and supervise such works. 69. The Government, in turn, sets standards, maintains registers, conducts audit checks and inspections, responds to and follows up on enquiries and complaints, liaises with the relevant parties and enforces where non-compliance is detected. 70. The model is premised on the integrity, competence and good faith of the professionals upon whom it confers responsibilities. 71. At WFC, that premise was systematically violated. 71.1. The main contractor, Prestige, chose not to appear in the Committee’s hearings. However, it is now clear that (among others):

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(1) It deliberately supplied and used, and directed the purchase and use, of scaffolding nets uncertified for FR properties to achieve greater profit margins and went as far as selectively replacing scaffolding nets uncertified for FR properties with compliant ones before inspections and furnishing a test certificate (which is at least suspected to have been fabricated) to frustrate governmental oversight and conceal the ongoing non-compliance. (2) It used combustible foam boards extensively and for a prolonged period to cover windows across the estate, in direct breach of its own express representation to the relevant Government officer to (i) use non-combustible foam boards (ii) for localised use (every 3 floors in turn) and (iii) for a transient period only. (3) It both created and directed the creation of access openings at escape staircases at regular five-floor intervals across all eight blocks at WFC, compromising the protected means of escape. (4) It (i) directed a non-RFSIC to drain the FS Water Tanks without supervision of an RFSIC which led to the shutdown of the main power switch controlling both the FH/HR System and FAS in all eight blocks, depriving residents of the fire warning they needed to evacuate; (ii) engaged non-RFSICs to undertake renovation works on rooftop FS Water Tanks which are integral components of the FH/HR System without supervision of an RFSIC (let alone the same RFSIC who signed the relevant Shutdown Notices (“SDNs”) and FS 251 forms (“FS251”) submitted to the FSD); and (iii) engaged an RFSIC on paper to undertake administrative works (submissions of SDNs and FS251 to the FSD) as a rubber stamp to create a false

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image of engagement of an RFSIC for the aforesaid repair works on the rooftop FS Water Tanks and to mislead and conceal the true picture from the FSD. (5) It failed to enforce an effective no-smoking regime on site despite repeated complaints from residents, despite its own in-house rules recognising the problem, and despite warnings from the LD. (6) And it failed to ensure frequent clearance of combustible construction debris from the point where the fire originated. 71.2. Will Power and its purported staff Ng Yeuk, respectively appointed as the consultant and Registered Inspector (“RI”) with primary statutory responsibility for supervising the works and ensuring compliance with the BO, similarly did not appear in the Committee’s hearings. The evidence demonstrates that Will Power and the RI have wholly neglected their duties and failed to discharge their supervisory obligations in any meaningful sense. The evidence before the Committee discloses no real or effective supervision by Will Power and the RI over any of the five contributing factors: the non-FR certified scaffolding nets, the extensive foam board use, the access openings at escape staircases, the site management failings that permitted smoking and debris accumulation, or the shutdown of FSIs. 71.3. China Status, the RFSIC engaged by Prestige to submit SDNs and FS251 to the FSD for the shutdown of the FH/HR System, admitted in oral evidence that it never visited the site, never independently assessed the need and consequences for shutdown of the relevant FSI systems, nor effected the shutdown of those FSI systems themselves, and functioned only as a “rubberstamp”. It submitted SDNs and thereby falsely represented to the FSD that it was the RFSIC carrying out the relevant

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repair works and that the shutdown of the relevant FSI systems was due to repairs needed as a result of “leakage of F.S water tank” (without mentioning “empty tanks”, let alone the plan to use the FS Water Tanks for other purposes). The SDNs were further submitted with only the FH/HR System box ticked (indicating that this was the only FSI being shut down while the FAS was and remained simultaneously inoperative), thereby misleading and concealing from the FSD albeit unknowingly the full extent of the condition / status of the FSI thereat. 71.4. Victory Fire, the long-standing RFSIC responsible for annual inspections, discovered in October and November 2025 during their repair works on the FH/HR System and FAS at WFC that WFC’s FS Water Tanks had been drained and the main power switches had been switched off, which would shut down the FAS. Yet, notwithstanding its knowledge that WFC’s FAS was shut down for a period of time (possibly well over a month, as accepted by Chung Kit-man of Victory Fire: [Day 6/89/3-6] and [Day 6/55/2-4 (Chinese transcript)]), and despite its admission that it considered such shutdown abnormal or unusual and needed to turn the main power switches back on to test their own repair works, Victory Fire made no attempt to notify the FSD of the FAS shutdown (let alone the empty FS Water Tanks which would jeopardise the fire safety of the whole building); nor did it ever contact and follow up with China Status, the RFSIC supposedly responsible for the FAS shutdown. 71.5. ISS, the licensed PMC, issued job orders directing its own unlicensed electrician to operate FSIs, failed to coordinate between two simultaneously engaged RFSICs, and confined its response to persistent fire safety complaints to the role of a passive intermediary.

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Following the fire, the Police and ICAC swiftly set up the largest joint investigation task force in recent years to conduct comprehensive investigations5. On 10 June 2026, the Police and ICAC laid charges against seven individuals (including the directors of Prestige and Will Power, and the RI Ng Yeuk) and two companies (Prestige and Will Power) with a total of 25 counts of offences, including manslaughter, conspiracy to defraud, dealing with property known or believed to represent proceeds of an indictable offence, attempting to pervert the course of public justice and tax evasion, in relation to the WFC fire and the renovation project. The Government notes that the relevant investigations are continuing and further law enforcement actions have not been ruled out. While the determination of guilt is a matter for the courts in due course, the laying of these charges confirms that there is at least a prima facie case of serious criminal wrongdoings on the part of the key private actors identified in these submissions.

Two features of this pattern of abuse warrant emphasis.

The first is the scale of the financial incentives involved. The WFC renovation contract was valued at approximately HK$336 million. Against rewards of this magnitude, the existing deterrents were insufficient. The maximum penalties for contravention of safety legislation, the disciplinary sanctions available under the BO, and the prospect of prosecution under occupational health and safety legislation may be modest in comparison with the profit that could be extracted from a project of this scale by cutting corners on materials, fabricating certificates, and circumventing safety requirements. When the potential gain from abuse vastly exceeds the cost of compliance and risk of sanction, the economic incentive for unscrupulous actors is to abuse the system rather than to comply with it (even at the expense of health and safety). 5 See Press Release from the Police dated 10 June 2026: https://www.police.gov.hk/ppp_en/03_police_message/pr/press- release-detail.html?refno=P202606100004

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The second is the collaborative nature of the abuse. The safeguards built into the regulatory framework depend for their efficacy on the integrity of the professionals to whom responsibilities are allocated and who are expected to regulate and supervise each other. Instead, they chose to collude with each other. When the RI who is supposed to supervise the works becomes a collaborator rather than a check on the contractor; when the RFSIC who is supposed to certify FSIs becomes a paid conduit for false notifications; when the PMC who is supposed to monitor fire safety becomes a passive issuer of job orders without enquiring whether the work requires specialist authorisation, the entire system of mutual checks ceases to function, and the regulatory framework can be significantly weakened in its function of protecting the public it was established to serve.

As with any system, the Government does not suggest that the existing regulatory and supervisory framework was without weaknesses and room for improvements. However, if the relevant parties colluded to circumvent the system with a clear and deliberate intention to bypass it, it would be difficult if not impossible for such system to have all systemic loopholes plugged whilst maintaining workable efficiency and appropriate checks and balances.

As the analysis in the sections that follow demonstrates, in light of such widespread and deceptive acts of circumvention, there can now be identified a number of areas susceptible to abuse in, for example, over-reliance on the self- regulation of professionals whose compliance was assumed rather than verified, the limited scope and frequency of audit checks and site inspections; inadequacies in prescriptive standards for certain construction materials; areas requiring improvements in inter-departmental communication; and a supervisory architecture that was not designed to address collaborative and coordinated concealment. The Government acknowledges these systemic weaknesses 39

candidly, and responded swiftly in reviewing the measures and practice in a number of crucial areas and took the initiative to introduce timely and comprehensive improvement measures. 78. The Government’s case is, however, that these areas for improvements (in and of themselves) should not be equated or identified as primary causes of the fire, its spread, or the casualties. The Government also acknowledges, as the Committee’s independent experts observed, that “strong firefighting performance and fast response from the FSD cannot fully compensate for weaknesses in building design, maintenance, management or user behaviour” (IC Expert Report §8.4.7(a) [ER3/2262]; [ER6/2740]). 79. The evidence of the Committee’s experts, and the exchanges between the Chairman and those experts during the evidential hearing, brought into focus a further observation. The Chairman stated directly: “regulation by itself is not the end... Even if they pass regulations, it may still cause --” [Day 27/73/14-17].6 In the same vein, the Committee’s experts agreed and explained: “since every building project is different and may have features that may throw up unforeseen challenges to occupant safety, a certain level of rigour and engineering judgement should be mandated through the approval process, whether it is for new projects or for building repair, rehabilitation or renovation projects” (IC Expert Report §7.5.2 [ER3/2256]). 80. The Government accepts these observations, which highlight the importance of risk assessment. A compliance-driven approach to fire safety, even where the regulations are themselves sound, cannot always account for the unique combination of risks presented by each individual project. The approach must be proportionate and practicable; as the Chairman observed, “we cannot make it

6 References to the oral evidence in these submissions are in the form [Day X/Y/Z], denoting the Day of the Evidential Hearing / page number / line number of the English transcript, unless otherwise stated.

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[foolproof] and use all costs, but we really have to look at the risk and assess the risks from a different angle” [Day 27/76/17-20]. 81. The primary causes remained the deceit, inaction and deliberate omissions of private actors who abused their positions of trust, statutory responsibility and public confidence. Whilst (with the benefit of hindsight) the system may have placed over-reliance on the self-regulation of professionals, no matter how well it may have been designed, it has to count on the people involved to run it; therefore it is not unreasonable (indeed it is necessary) for the Government and for any regulatory system to be founded upon the premise that those subject to it will comply with the relevant laws and regulations that govern their conduct. 82. In these submissions, the Government addresses each contributing factor and the primary responsibilities of the private actors, and discusses the need for improvement measures to enhance the Government’s supervisory role, in that order and with that emphasis in mind. 83. The Government then turns to the systemic issues that cut across the contributing factors, and the improvement measures already introduced. 84. Throughout, the Government maintains the distinction between direct causes (the five contributing factors) and other systemic weaknesses and areas for improvements, and between the facilitative role of the Government in certain areas and its supervisory role in others. The nature of the issues that can properly be attributed to the Government differs according to which role it was exercising in the respective areas. 85. The Government’s submission concludes with an account of the improvement measures that have been implemented since the fire and those currently underway. These measures are directed not merely at incremental enhancement of the pre-

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fire regime but at significant changes to the supervisory architecture for large- scale renovation works, designed to ensure that the system can no longer be undermined by the kind of organised, collaborative and deliberate abuse that occurred at WFC. 86. The Government respectfully invites the Committee to note that a number of the improvement measures which were mentioned during the evidential hearings as proposals or matters under consideration have, by the time of the submission of the Government’s Table of Improvement Measures on 15 June 2026, already been implemented; the Committee is invited to consider the progress in that regard as set out in the Table. 87. On top of the current improvement measures already undertaken by the Government (as set out in the Government’s Table of Improvement Measures), the Government will continue to review and act robustly on further improvement measures to address the problems including those to be identified by the Committee in due course.

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PART II: BACKGROUND TO WFC AND THE WFC FIRE E. WFC E1. WFC and the surrounding area 88. WFC is a HOS estate in Tai Po, New Territories, Hong Kong, completed in 1983 and comprising eight high-rise residential blocks. Each block is identified by both a letter designation and a Chinese name: Wang Yan House (Block A), Wang Tao House (Block B), Wang Sun House (Block C), Wang Kin House (Block D), Wang Tai House (Block E), Wang Cheong House (Block F), Wang Shing House (Block G) and Wang Chi House (Block H). 89. WFC is situated near the Tolo Highway in Tai Po, New Territories. To the north lies Kwong Fuk Estate, a public rental housing development, and Tai Po Baptist Public School, which is located within or immediately adjacent to the WFC estate grounds. The school served as the on-site command post during the firefighting operation. To the south, the estate connects to Tai Po Road and the Tolo Highway. The estate is bounded by Island House Lane to the east and Kwong Wang Street to the west. The proximity of the eight residential blocks to one another within the estate compound is relevant to the mechanisms of inter-building fire spread addressed in Section G below; the analysis of wind-carried embers and falling debris as vectors of horizontal spread was directly influenced by the spatial configuration of the estate. 90. Each block has thirty-one floors, with each floor divided into eight residential units (numbered 1 to 8) connected by a corridor, with the lift lobby located at the centre of the corridor. The estate comprises a total of approximately 1,984 flats. 91. According to the 2021 census data, there were some 4,600 residents in WFC, of whom more than one-third (approximately 1,700) were aged 65 or above, and

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approximately 420 residents were aged below 14. This demographic profile is significant: the high proportion of elderly residents materially affected the speed at which residents could respond to the fire and evacuate, a factor reflected in the casualty data which records that 114 of the 168 fatalities were individuals aged 65 or older (IFITF Report §9.3.1.2 [ER1/195]). 92. Opposite the lift lobby on each floor, there are two interlocking staircases (commonly known as ‘scissor stairs’) serving as means of escape in case of fire. Both staircases run from the thirty-first floor at the top down to the ground floor, but only one of them provides access to the rooftop. This design feature is directly relevant to the evacuation difficulties experienced during the fire, as addressed in Section M of these submissions. 93. A critical design feature of each block is the vertical re-entrant between the two wings, extending from the 1st floor to the roof. The IFITF found that this chimney- like configuration “naturally channelled rising smoke and hot gases” and “confined and directed their upward movement, allowing the fire to spread rapidly and engulf multiple floors in a short timeframe” (IFITF Report §6.2.1.6 [ER1/80]). There are four re-entrants surrounding each block, located between the building façades, with a flat roof on the first floor closed off via a metal gate. The fire originated from the flat roof at the bottom of the re-entrant outside Flats 104 and 105 of Wang Cheong House, as addressed in Section G below. 94. At the time of the incident, all eight blocks were undergoing concurrent exterior maintenance and renovation works, and were enveloped in bamboo scaffolding and protective netting that wrapped the towers from the ground to the upper floors. The renovation works had commenced in July 2024 with a final contract price of HK$336 million.

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The social context of the estate is relevant to the Committee’s assessment of the incident’s impact: WFC housed a long-standing community, and the displacement of nearly 5,000 people created complex rehousing, welfare and support needs that required sustained government attention. E2. Management of the WFC affairs at the material time (i) The PMC

ISS was the PMC responsible for the day-to-day management and administration of WFC at the material time. ISS is a subsidiary of the Denmark-based ISS group and held a licence under the Property Management Services Ordinance (Cap. 626).

The evidence before the Committee demonstrates that ISS occupied a central position in the management of the estate, with contractual responsibilities that placed it at the intersection between the residents, IO, and various contractors engaged for the renovation works.

ISS’s contractual obligations under the Property Management Agreement [H1- 1/1-24] included responsibilities that are directly relevant to the fire safety failures addressed in Sections I to N of these submissions. Cheng Tsz-ying of ISS confirmed in oral evidence that “in relation to fire risk complaints it seems ISS has a contractual obligation to record, investigate and liaise and follow up on the matter with the relevant government department” [Day 8/34/10-16]. The ISS Security Manual treated the identification of potential fire risks as a core purpose of security patrol [H1-3/6639]. These obligations placed ISS in a position where it bore responsibility for monitoring the fire safety environment of the estate, including during the renovation period when the fire risk was materially elevated. 45

The Property Management Services Authority (“PMSA”) Code of Conduct also specifically requires licensed PMCs to monitor the progress of the RFSIC’s work, follow up timely with the RFSIC on required rectifications, follow up timely with the RFSIC that it has notified the DFS of FSI shutdowns, and assist FSD officers during visits [B2/2631].

• ISS’s staff also played a direct and significant role in the events that led to the de-

energisation of the FSIs at WFC. As addressed in detail in Section N of these submissions, Law Kwok-shui, an electrician employed by ISS, physically switched off the main power switches in the booster pump rooms of all eight blocks, simultaneously deactivating both the FH/HR System and FAS, on the instruction of Prestige to drain the FS Water Tanks without supervision of an RFSIC and pursuant to job orders issued by ISS management. The evidence establishes that ISS issued these job orders for work that required RFSIC engagement without ensuring that engagement was so made; this arrangement was “against the law” [Day 10/18/24 – 19/2].

• The evidence establishes that ISS bore responsibility for multiple failures that

contributed to the conditions in which the fire occurred: issuing job orders directing non-RFSIC staff to operate FSI; failing to coordinate between the two simultaneously engaged RFSICs; failing to ensure that FSIs were maintained in efficient working order; and confining its response to resident complaints about smoking and fire safety hazards to the role of a passive intermediary rather than an active safety monitor. The primary responsibility for the fire safety failures addressed in the contributing-factor sections of these submissions lies with the private actors identified in those sections; ISS’s failures compounded and facilitated those primary failures. 46

(ii) The IO and MC

1. The IO of WFC was the legal entity responsible for the collective management

and maintenance of the estate’s common areas and facilities, operating under the framework established by the Building Management Ordinance (Cap. 344) (“BMO”) [G1-1/1-250].

1. Under the BMO, the IO possesses powers including the power to engage and

remunerate staff, accountants, managers or other professionals; improve and maintain common areas; carry out renovation, improvement or decoration works on common parts; and act on behalf of the owners in matters of common interest. Individual owners have rights to monitor the work of the IO and its MC, including the right to inspect financial statements and to require the MC chairman to convene an OC general meeting for specified purposes at the request of not less than 5% of the owners.

1. What emerges from the evidence is that the residents of WFC were not passive

in the face of the concerns many of which would later prove to have been well- founded. Residents questioned the appointment of Prestige, sought to exercise their statutory rights to convene meetings, raised concerns about proxy irregularities, challenged the adequacy of safety measures during the renovation, and raised numerous enquiries and complaints.

1. Relatedly, the responses they received from the various government departments

and the extent to which those complaints were substantively addressed are matters examined in the systemic sections of these submissions.

1. The critical point for the present background section is that the IO and MC

structure at WFC, while functioning within the BMO framework and having the professional assistance from a PMC, was confronted with a renovation project of

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exceptional scale and complexity that strained the capacity of lay MC members to exercise effective oversight, particularly in circumstances where, as the evidence has revealed, the consultant and contractor engaged to carry out the works failed to discharge their professional and statutory obligations.

1. The key events are addressed in detail in Part IV (ToR 2) below.

E3. Introduction to the FSI system at WFC

1. This section provides the descriptive foundation for understanding the FSIs at

WFC, how they were designed to operate, who was engaged to maintain them, and the state of the annual inspection regime immediately preceding the fire. It establishes the technical baseline against which the responsibilities and failures addressed in Section N are to be assessed.

1. WFC comprises eight identical 31-storey domestic buildings, all of which share

an identical design [B11/5626-5627]. The required FSIs in each building are: a FAS, a FH/HR System, and fire extinguishers [B11/5627].

1. The FSIs were installed in accordance with the 4th version of the Code of Practice

for Minimum Fire Service Installations and Equipment (November 1979), being the version in force when the first General Building Plan for the development of WFC was submitted in October 1980.

1. The FAS at WFC is a manually-operated system. Each floor from the ground

floor to the 31st floor is equipped with one manual call point (a break-glass unit “BGU”) and one alarm bell, positioned adjacent to the hose reel [B11/5627]. An independent alarm panel was not required for a manually operated FAS under the 1979 Code of Practice. The mechanism is straightforward: breaking the glass releases a micro-switch, which actuates the alarm.

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• The FH/HR System provides coverage across the entire building, from the ground

level to the roof. Its major components comprise: a rooftop FS Water Tank (minimum effective firefighting quantity 18,200 litres [B2/1896]), which supplies hose reels and hydrant outlets; a ground-floor FS Transfer Tank (2,000 litres), which prevents backflow contamination; an upfeed pump on the ground floor, which relays water from the FS Transfer Tank up to the rooftop FS Water Tank; two FS/intermediate booster pumps on the ground floor (one duty and one standby), which pressurise water from both the FS inlet and FS Water Tank for the FH/HR System; an FS inlet; hydrant outlets at every staircase half-landing; and hose reel points on every floor from the ground floor to the 31st floor [B11/5628-5633].

• A critical design feature is that the FH/HR System and FAS are interconnected in

operation. AD Keung Sai-ming of the FSD confirmed this during oral evidence: [Day 10/15/18 - 16/13]. The interconnection is deliberate: triggering the BGU also triggers the booster pump so that water is available when a fire is reported. The applicable Code of Practice provision (as referred to in AD Keung’s oral evidence) states that “the means of operating fire alarms shall be interconnected with the means of operating fixed fire pumps of fire hydrant/hose reel installations” [Day 10/15/18 - 16/13].

• Each block has two pump rooms on the ground floor: a general (main) pump room

and a separate FS booster pump room [Day 10/7/5-8] [C1-2/1627]. 114.1. The general pump room houses the FS Transfer Tank, the upfeed pump, and three control panels. Of these, the red panel is the control panel of the FS upfeed pump; the white and green panels control the flushing-water system and fresh-water system respectively [Day 10/8/5-23] [C1-2/1651]. 49

1. 2. The FS booster pump room houses the two booster pumps (duty and

standby), a larger control panel, and a separate, smaller main power switch. The larger control panel on the left-hand side controls the automatic operation of the FS booster pump [Day 5/92/1-4] [C1-2/1640-1642]. The smaller unit is the main power switch of the FS system [Day 10/10/5-7].

1. The larger booster-pump panel carries individual controls including: pump 1 and

pump 2 isolator switches, a “silence alarm” switch, a normal-test switch, running and failure indicator lamps, a system reset, and three-phase power indicator lamps. AD Keung confirmed that “the on and off of the two pumps, even with main power connection on, these switches can control the on and off of the individual pumps” [Day 10/12/13-16] [C1-2/1640-1642].

1. The single main power switch simultaneously controls the power supply to both

the FH/HR System (booster pumps) and FAS. Switching it to the “OFF” position deactivates both systems. AD Keung confirmed this unequivocally in oral evidence: when asked “to turn off the main power switch, the fire alarm system, booster pump and upfeed pump will all lose power?”, he answered “Right” [Day 10/10/14-17] [C1-2/1642].

1. It is, however, possible to isolate the FH/HR System without cutting the main

power switch. The control panel is equipped with two pump isolator switches capable of interrupting power to the two pumps of the FH/HR System even when the main power switch remains in the “ON” position. AD Keung’s witness statement confirms that “it is possible to shut down solely the FH/HR system by simply switching off the pump isolators, rather than by switching off the main

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power switch, which would otherwise cut the power supply to both the FH/HR system and the FAS”7 [WS1/138] [C1-2/1641].

1. To drain the rooftop FS Water Tank (which was the purpose of the renovation

works touching on the FH/HR System, addressed in Section N below), the technically necessary step is to switch off the upfeed pump in the main pump room and use the tank-side drain or gate valve on the roof. Nothing about the drainage process requires cutting the booster-pump main power switch. This is confirmed by both AD Keung [Day 10/16/14-18] and Chung Kit-man of Victory Fire [Day 6/29/9-11] [Day 9/27/17-24].

1. Turning now to the inspections of FSI at WFC, Victory Fire was the RFSIC

engaged by ISS to conduct annual inspections of the FSIs at WFC. Victory Fire had held this role for approximately nine consecutive years (from about 2016), save for one intervening year8 [WS2/1270].

1. The scope of Victory Fire’s annual contract included quarterly and annual FSI

inspections and submission of FS251 certificates to the FSD. The contract covered the emergency lighting, FH/HR System, FAS and fire extinguishers for all eight blocks9 [WS1/136]. As elaborated below, the FS251 certificate is the primary documentary mechanism by which the FSD monitors RFSIC performance.

1. Victory Fire carried out the annual inspections of all eight blocks on 24 March

2025 (works 24 to 26 March) and issued FS251 certificates dated 31 March 2025 [B2/1440, 1484, 1505, 1579, 1604, 1671, 1707, 1770]. AD Keung’s witness statement records that “According to the FS251s dated 31.3.2025, all the FSIs

7 KEUNG Sai Ming 1st WS §10.3 8 鄭芷盈 (Cheng Tsz-ying, ISS) 1st WS §55 9 KEUNG Sai Ming 1st WS §9.1

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provided in Wang Fuk Court were in compliant with FSD requirements, certifying that all FSIs, including the FAS, should be operable” 10 [WS1/136].

1. The March 2025 FS251s did, however, record several minor defects requiring

follow-up or repair action, including manual call point (a FAS component) defects at some locations11 [WS1/136]. A rectification contract to remedy these defects was awarded to Victory Fire in October 2025 following a separate tender exercise, and the rectification works were undertaken from 16 to 17 October 2025, and from 19 to 26 November 202512 [WS1/136; WS2/1270-1271; WS2/1529- 1530].

1. The annual inspection was conducted using FSD-prescribed checklists. These

checklists need not be submitted with the FS251 to the FSD, but the RFSIC must retain them for seven years for potential FSD audit [Day 10/58/17-21]. The FSD’s audit of annual inspection checklists is conducted on a random sampling basis. AD Keung confirmed that approximately 300 checklists out of approximately 60,000 buildings per year (approximately 0.5%) are document-checked [Day 10/59/3 – 61/1]. Victory Fire’s WFC annual inspection checklists had not been selected for checking across approximately nine years [Day 10/59/3-9].

1. The technical description set out above establishes three matters of particular

significance for the analysis in Section N below. 124.1. First, the FH/HR System and FAS share a single main power switch found in the booster pump room; switching it off deactivates both systems simultaneously, yet (by design and known to any qualified personnel) (i) the drainage of the FS Water Tank does not necessitate the switching off

10 KEUNG Sai Ming (AD Licensing & Certification of FSD) 1st WS §9.2 11 KEUNG Sai Ming 1st WS §9. 12 KEUNG Sai Ming 1st WS §9.3; Cheng Tsz-ying (ISS) 1st WS §§60-62; 鍾傑文 (Chung Kit-man, Victory Fire) 1st WS §§5-8

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of the FH/HR System (as opposed to the upfeed pump which is controlled, not by way of the single main power switch in the booster pump room, but by way of the upfeed switch found in the general pump room) and (ii) even if it does require the switching off of the FH/HR System, this does not (and should not) require the main power switch to be turned off at all. 124.2. Second, the system as designed places primary reliance on the RFSICs (Victory Fire and China Status, in the case of WFC) to inspect, certify and maintain the FSIs, with the FSD exercising a supervisory role through proactive audit check rather than continuous oversight. 124.3. Third, as at March 2025, Victory Fire certified all FSIs as operable; yet by 26 November 2025, the FAS in all eight blocks had been de-energised and incapable of alerting residents. The post-fire investigation by the FSD’s Fire Protection Facilities Supervision Division (“FPFS”) further revealed that the main power switches in seven of the eight blocks were found in the “OFF” position, and that the control fuses in the pump panels of all blocks (except Wang Cheong House) had blown. The consequence was that even after the main power switches were restored to the “ON” position, the FAS and intermediate booster pumps in the majority of blocks still could not be actuated [B11/5643]. How that transition occurred, and where responsibility for it lies, is the subject of Section N. E4. Statutory control of WFC by the ICU (i) The background of delegation from the BD to ICU

1. The statutory control of WFC by the ICU, rather than by the BD directly, arises

from a delegation arrangement with a history spanning more than three decades since the early 1990s.

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• The origins of this arrangement, its rationale, and the mechanisms through which

it operates are essential to understanding the supervisory framework under which the WFC renovation works were conducted, and the boundaries of each body’s responsibility for the safety failures that the Committee has examined.

• The starting point is the legislative framework governing Hong Kong’s public

housing. The BO provides for the planning, design and construction of buildings and associated works, and for related safety requirements. However, section 41(1)(aa) of the BO exempts from its provisions “buildings upon any land vested in the Housing Authority or over which the Housing Authority has control and management,” subject to sections 18(2) and (3) of the Housing Ordinance (Cap. 283) (“HO”).

• The effect of this exemption is that buildings designed and constructed by the

Housing Authority (“HA”) are not subject to the BO during the construction phase. The Government has been providing public housing since 1954, and when the HO was enacted in 1973 it also amended the BO to exempt public housing buildings designed and constructed by the HA from the application of the BO.

• The position changed with the introduction of the HOS. Section 18 of the HO was

amended in 1978 so that the BO would apply to any HA building if, after its construction was completed, any part of it was sold or otherwise disposed of under section 17A of the HO 13 [WS1/725]. The consequence is that HOS buildings, once sold to private owners, become subject to the control of the BO. WFC, as a sold HOS estate built in 1983, therefore falls within this category: it was exempted from the BO under section 41(1)(aa) at the time when it was built, 13 PANG Yuk Lung, Michael (AD Corp Services, BD) 1st WS §40

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but came under the purview of the BO by virtue of section 18 of the HO after its units were sold to individual private owners14 [WS1/726].

1. When sold HOS buildings first came under the BO following the 1978

amendment, building control was exercised by the then Buildings Ordinance Office (the predecessor of the BD, “BOO”). However, the BOO was not provided with as-built drawings of completed HOS blocks, which inhibited its enforcement of the BO. The HA, as the Deed of Mutual Covenant (“DMC”) manager, was better placed to exercise control by virtue of its powers under the DMC entered into by all flat owners at the time of purchase15 [WS1/726].

1. Following a series of internal discussions and approvals, the formal delegation

process commenced. In June and July 1991, the BOO proposed the secondment of experienced BOO officers to assist the HA in achieving consistency in the interpretation of the BO. In February 1992, the HD provided a draft paper recommending that the HA take up building control of sold HOS buildings by way of authorisation under the BO for a trial period of three years, and this was endorsed by the BOO. On 1 June 1992, the then Secretary for Planning, Environment and Lands gave formal approval to the authorisation. The first authorisation instrument was issued on 25 June 1992, authorising certain officers of HD to act on behalf of the Building Authority (“BA”) in matters arising from specified provisions of the BO, including sections 22 to 28, 32A, 32B, 33 and 3416 [WS1/727-730].

1. A further impetus for the development of the ICU came from a series of piling

scandals in the late 1990s, which triggered a fundamental reform of the HA’s construction quality assurance processes. AD Michael Pang of the BD confirmed

14 PANG Yuk Lung, Michael 1st WS §41 15 PANG Yuk Lung, Michael 1st WS §42 16 PANG Yuk Lung, Michael 1st WS §§44-51

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that in January 2000, the HA issued a paper entitled “Building Homes with Care” for public consultation, and in April 2000 approved a plan to implement 50 quality housing measures to enhance housing standards 17 [WS1/729]. To introduce independent third-party reviews of HA development projects, the HD established the ICU in November 2000, which reported directly to the Director of Housing over the conduct of third-party reviews of HA projects.

1. Since 2004, the authorisation of HD officers under the BO to exercise building

control for sold HOS buildings has been redirected to officers of the ICU. The first authorisation instrument involving officers of ICU was issued on 28 April 2004, authorising officers to act on behalf of the BA in matters arising from an expanded list of BO provisions18 [WS1/730]. The delegation has been updated periodically since then. AD Michael Pang of the BD confirmed that the delegation instruments are renewed at intervals, with the most recent pre-fire instrument having been signed by the Director of Buildings on 12 December 2023, authorising officers of the ICU to act on behalf of the BA in matters arising from sections 22(1), 23, 24, 24A, 24AA, 24B, 24C, 25, 26, 26A, 27, 27A, 27B, 27C, 28, 29, 29A, 30, 30B, 30C, 31, 32A, 32B, 33, 34, 36C, 36F, 36G, 36H, 40(1BE), 44, 51, 52 and 53, and Schedule 7 of the BO, and all sections of the Building (Appeal) Regulation, and all matters arising under the BO in respect of alteration and addition (“A&A”) works, and minor works (“MW”) commenced under the simplified requirements19 [WS1/731].

1. To underline its impartiality, the ICU was detached from the HD and placed under

the direct control of the Office of the Permanent Secretary for Transport and Housing (Housing) in 2015, and following a further government reorganisation

17 PANG Yuk Lung, Michael 1st WS §50 18 PANG Yuk Lung, Michael 1st WS §51 19 PANG Yuk Lung, Michael 1st WS §§54-55

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in July 2022, the ICU now reports to the Permanent Secretary for Housing20 [WS1/731]. AD Michael Pang of the BD confirmed that “the scope, extent and nature of the powers and duties delegated by DB to the officers of ICU are the same as that delegated to the officers of BD in handling all matters in connection with building control of existing buildings, the MBIS, the MWIS and the MWCS, as performed by the Existing Buildings Divisions 1 & 2, Mandatory Building Inspection Division and Corporate Services Division of BD” 21 [WS1/732].

1. The conclusion to be drawn from this history is that the delegation arrangement

was not a temporary or expedient measure but the product of a deliberate, decades-long policy to concentrate building control of sold HOS estates within a specialised body that could draw upon the HA’s institutional knowledge of those estates while exercising the BA’s statutory powers. When the WFC renovation works were underway, it was the ICU that exercised statutory building control over the estate. (ii) “Administrative control” vs. “statutory control”

1. The ICU’s work is divided into two distinct regimes, the distinction between

which is fundamental to understanding the nature and limits of its authority over WFC. Lau Fu-kwok, then Head of the ICU, explained these as the “administrative building control” regime and “statutory building control” regime22 [WS1/601].

1. The administrative building control regime applies to HA buildings that remain

exempt from the BO, including new construction sites of the HA and existing public rental housing estates without any part sold or otherwise disposed of by the HA. For these buildings, the BO does not apply as a matter of law by virtue of section 41(1)(aa) of the BO read with section 18(2) of the HO. Nevertheless,

20 PANG Yuk Lung, Michael 1st WS §§54-55 21 PANG Yuk Lung, Michael 1st WS §56 22 LAU Fu Kwok (then Head of ICU) 1st WS §6

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by way of a Memorandum of Understanding between the Director of Housing and Director of Buildings (the latest version dated 1 July 2022) (“MOU”) [I1- 1/54-59], the HA and HD have committed administratively to adhering to the requirements under the BO, its subsidiary legislation and codes of practice and guidelines issued by the BD at all times for the design and construction of HA buildings. Pursuant to clause 2 of the MOU [I1-1/56], the ICU is responsible for this administrative building control in line with the BO and related requirements, covering the approval of building plans, the granting of consent to commencement of works, site monitoring for buildings under construction and existing buildings with A&A works in progress, and conducting final inspections for the issue of occupation permits or acknowledgement of completion.

1. The statutory building control regime, by contrast, is the regime under which the

ICU exercises the BA’s delegated powers under the BO itself. This regime applies to buildings developed by the HA where any part has been sold or otherwise disposed of under sections 4(2)(a) and 17A of the HO, so that those buildings are brought within the BO by operation of section 18(3) of the HO23 [WS1/603-606]. The ICU’s evidence identifies these functions as including: processing building and structural plan submissions, consent applications and reports of completion for A&A works; carrying out site monitoring of A&A works and MW as necessary; implementing the MBIS and MWIS; processing MW submissions under the MWCS; exercising building control regarding unauthorised building works and dilapidated buildings and building elements; conducting planned surveys to identify UBW and building defects for follow-up actions; and providing emergency services related to building and drainage defects 24 [WS1/605-606].

23 LAU Fu Kwok 1st WS §§10-15 24 LAU Fu Kwok 1st WS §13

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(iii) The scope of delegation

1. The scope of the delegation from the BA to the ICU is defined by the delegation

instruments issued under section 2(2) of the BO, the most recent of which (prior to the fire) was dated 12 December 2023 [I1-1/11-18]. As set out above, those instruments authorise officers of the ICU to exercise the BA’s powers under a comprehensive list of BO provisions, encompassing the full range of existing- building control functions.

1. The delegation does not, however, extend to all functions of the BA. As noted

above, prosecution powers under section 40 and disciplinary powers under sections 7 and 13 of the BO have not been delegated to the ICU. Nor does the delegation extend to the regulation of registered building professionals and contractors as such; the registers of RIs and RCs are maintained by the BD, and the registration, renewal and de-registration processes are administered by the BD25 [WS1/607].

1. The relationship between the BD and ICU is maintained through several

institutional mechanisms. 141.1. First, the ICU submits six-monthly reports to the BD covering its statutory building control activities, and a management-level liaison meeting between Head(ICU) and the Deputy Director of the BD is held at six- monthly intervals to discuss these reports. Lau Fu-kwok acknowledged, however, that “as the progress reports cover mainly policy or overall operational issues, hence details of individual projects (including the renovation details of Wang Fuk Court) would not be, and were not as a matter of fact, captured therein”26 [WS1/613]. The WFC renovation was

25 LAU Fu Kwok 1st WS §15 26 LAU Fu Kwok 1st WS §21

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never mentioned in the six-monthly reports, nor was it raised in the management-level liaison meetings. 141.2. Second, working-level meetings are held between specific teams: the MBIS Liaison Meeting between the MBIS teams of the ICU and BD; the MWCS Liaison Meeting between the MW teams; and Sectional Meetings attended by the Senior Building Surveyor seconded from the BD 27 [WS1/735]. These meetings serve to align policies, standards and practice, and to share experience or discuss difficult cases. AD Michael Pang of the BD confirmed that “BD was given to know that ICU has been following the BO and BD’s policies, standards and practices in exercising its delegated duties” 28 [WS1/737] through these channels. 141.3. Third, the BD seconds three senior professional officers to the ICU: a Senior Building Surveyor/Building Control (SBS/BC), a Senior Building Surveyor/Advisory (SBS/Adv), and a Senior Structural Engineer/Advisory (SSE/Adv) 29 [WS1/738-743]. These seconded officers provide guidance to the ICU on the interpretation of BO provisions and legislative requirements. The SBS/BC in post at the material time (25 April 2023 to 6 July 2025) was Mr Franco Tse Kam-ming, whose role in the foam board issue is addressed in Section K of these submissions. Mr Franco Tse gave evidence on Day 20. These seconded officers are under the direct supervision of Chief Maintenance Surveyor/ICU and Chief Structural Engineer/ICU respectively, with their performance appraised by their supervisors within the ICU rather than by the BD.

27 PANG Yuk Lung, Michael 1st WS §61 28 PANG Yuk Lung, Michael 1st WS §66 29 PANG Yuk Lung, Michael 1st WS §§67-74

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1. 4. Fourth, clause 3.2 of the MOU [I1-1/58] provides that “BD may conduct

audit checks on ICU when necessary to ensure that the standards of checking by ICU are consistent with those of BD”. In practice, the audit function was discharged through the BD secondees serving as advisors within the ICU, who played the role of auditor as well during their daily work in relation to A&A works submissions, giving advice to the vetting team on the interpretation of the BO [Day 24/71/7 - 72/2]. While no separate formal audit checks were conducted by the BD on the ICU’s MBIS work specifically, the presence of BD secondees within the ICU provided a standing and practicable mechanism for ensuring alignment of standards and practice between the two bodies.

1. The scope of the delegation, taken as a whole, gave the ICU the statutory authority

to exercise building control over WFC in the same manner as the BD exercises control over private buildings generally. The evidence demonstrates, however, that the delegation was accompanied by institutional constraints and resource pressures within the specialist teams. By way of illustration, the evidence of Andy Ku of the ICU provides a revealing account of the MBIST’s workload. 142.1. In 2025 alone, the team issued 21 MBIS statutory notices and nearly 17,000 MWIS statutory notices; handled approximately 32,000 MWIS submissions; issued 275 fixed penalty notices; investigated 25 prosecution cases under the MWIS; and handled 1,300 complaints or enquiries under the MBIS and MWIS (excluding verbal telephone enquiries) 30 [WS14/2129-2130]. 142.2. Ku confirmed that “almost 90% of the MBIST’s time and efforts is dedicated to the MWIS” 31 [WS14/2129-2131], and that in addition to

30 KU Siu Ping (Senior Maintenance Surveyor, ICU) 3rd WS §8 31 KU Siu Ping 3rd WS §§8-9

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newly issued statutory notices, the MBIST was required to attend to statutory notices previously issued but not yet complied with in 42 courts and estates at various stages of the process.

1. The evidence demonstrates the significant resource constraints under which the

MBIST operated, and contextualises the level of attention that was available for any individual renovation project, including the WFC renovation. These constraints are relevant to the Committee’s assessment of the ICU’s supervisory performance during the WFC renovation works. As to the MWT, Yung Siu Lun of the ICU confirmed that in 2025, the MWT (comprising only 10 professional and technical staff in total) received 27,585 MW submissions, of which 1,425 (5.17%) were audited [WS14/2119]32. He stated that “on average, each PO handled over 350 audited MW submissions in 2025” and that “in addition to the random audit arrangement, MWT also conducted form screening for around 4,000 MW submissions related to windows and external wall repairs in 2025” [WS14/2119] 33. The MWT was also “responsible for performing other MWCS- related duties including handling enquiries/complaints, uploading signboard information online for public viewing and enhancing the Minor Works Management System” [WS14/2119] 34. As a matter of fairness, these constraints ought to be taken into account in the Committee’s assessment of the ICU’s supervisory performance during the WFC renovation works. E5. Issuance of the statutory notices to WFC under the MBIS

1. WFC was selected as a target building under the MBIS in 2013. The secretary of

the ICU’s Selection Panel identified all HOS/TPS/BRO/GSH courts aged over 30 years, prepared building scores for each eligible building, and finalised a nomination list. The ICU nominated five courts; WFC ranked fourth with a score

32 YUNG Siu Lun (Senior Maintenance Surveyor, ICU) 2nd WS §10 33 YUNG Siu Lun 2nd WS §11 34 YUNG Siu Lun 2nd WS §12

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of 3235 [WS1/627-628]. The Selection Panel meeting was held on 13 December 2013; members did not raise any concern in relation to WFC 36 [WS1/628]. Following verification that WFC had not carried out inspection or prescribed repair works relevant to the MBIS, all eight blocks were selected as target buildings. The final list was approved by the then CMS/ICU on 12 March 201437 [WS1/629].

1. Under the building score system then in force [I1-2/1632-1634], a higher score

was accorded to buildings with an OC on the basis that the prospect of compliance with MBIS notices would be better for such buildings. Ku confirmed in oral evidence that this scoring criterion has since been revised; under the current system [J1-2/4740-4742], higher scores are instead accorded to ‘three-nil’ buildings lacking proper building management [Day 22/9/14 - 10/24].

1. The ICU sent a pre-notification letter for the MBIS to the WFC IO on 29 April

2014 [I1-2/1678-1685]. The statutory notices were issued on 10 June 2016, served on the WFC IO under section 30B(3) of the BO [I1-2/1686]. Following the issuance of the statutory notices, and given active progress by the WFC IO, the ICU approved extensions of time for compliance on five occasions between June 2017 and October 201938 [WS1/629].

1. The WFC IO appointed Will Power as the inspection consultant (covering the

provision of RI services – as the RI must be an individual) in January 2019. Will Power engaged an individual known as Mr Shum Kui Chung to take up the duties of an RI (at least on paper, see e.g. Certificate of Building Inspection (Form MBI 3) of Wang Yan House [I1-2/1881]) and submit Inspection Reports together with

35 KU Siu Ping 1st WS §§15-16 36 KU Siu Ping 1st WS §17 37 KU Siu Ping 1st WS §18 38 KU Siu Ping 1st WS §20

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Forms MBI 3; the said Inspection Reports and Forms MBI 3 were submitted to the ICU on 10 December 2019. Of these eight submissions, the one for Block E was sampled for a full audit check (document audit and site audit) under the MBIS; the remaining seven were subject to preliminary and fundamental checks only. Both the document audit and site audit results for Block E were satisfactory39 [WS1/634]. E6. The WFC renovation works following completion of the MBIS inspection – mainly governed by the MWCS

1. Based on Will Power’s Inspection Reports submitted in December 2019, the

proposed prescribed repair works for WFC comprised only MW and exempted works under the BO. No works requiring prior plan approval and consent from the BA were identified. The renovation works under the MBIS and those outside the scope of MBIS were therefore carried out principally under the MWCS, the regulatory framework and model of which are described in Section F below.

1. At the time of the fire, there were 48 MW submissions related to renovation works

in the common areas of WFC that were still ongoing. These comprised 24 Forms MW01 (notices of commencement of Class I MW) and 24 Forms MW03 (notices of commencement of Class II MW). No certificate of completion had been received by the ICU before the fire, as the works were still in progress.

1. Of these 48 submissions, two Class I MW submissions were randomly selected

for the Audit Fundamental Check (“AFC”) under the MWCS: MWB02504820 and MWB02504821, both submitted on 2 May 202540 [WS1/665]. These related to the erection of protective barriers and alteration of windows along the staircases of Blocks F and H respectively. The window works they covered were

39 KU Siu Ping 1st WS §34 40 YUNG Siu Lun 1st WS §31

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the very works that involved the replacement of staircase windows with the access openings addressed in Section M.

1. The remaining 46 of the 48 submissions received no further check beyond the

Form Screening Check and Preliminary Check, because they either did not fulfil the criteria for priority selection or were not selected through the random ballot41 [WS1/668].

1. The WFC renovation, valued at approximately HK$336 million and involving

extensive exterior modifications to eight 31-storey residential buildings housing thousands of residents, was classified and processed through the regulatory framework applicable to minor works, i.e. the MWCS. Whether this classification was adequate for a project of this scale and complexity is a systemic question addressed in Section Q. E7. Before the WFC fire – the Mariners’ Club incident (2023) and Chinachem Tower incident (October 2025, shortly before the WFC fire)

1. Two significant fire incidents involving scaffolding on high-rise buildings

preceded the WFC fire and are relevant to the Committee’s assessment of the regulatory and supervisory response to known fire risks in renovation works. The first was a fire at the Mariners’ Club building in Tsim Sha Tsui in March 2023; the second was a fire at Chinachem Tower in Central on 18 October 2025, just five weeks before the WFC incident.

1. The Mariners’ Club fire occurred on 2 to 3 March 2023 and involved a building

that was under construction with scaffolding erected at the upper levels. The fire was classified as a No. 4 alarm fire. It is relevant that the incident involved the

41 YUNG Siu Lun 1st WS §38

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spread of fire along scaffolding of a high-rise building, a mechanism of spread that would later prove catastrophic at WFC.

1. The significance of the Mariners’ Club fire for the present inquiry lies in the

regulatory response it prompted. Following the Mariners’ Club fire: 155.1. The BD issued a circular letter to all prescribed building professionals and RCs on 21 March 2023 on the subject of “Use of Fire Retardant Protective Net/Screen/Tarpaulin/Plastic Sheeting on Façade of Buildings under Construction, Demolition, Repair or Minor Works” [J1-2/5915]. This circular letter specifically stated that “protective net, screen, tarpaulin/plastic sheeting installed to cover the façade of buildings under construction, demolition, repair or minor works should have appropriate fire retardant properties in compliance with a recognised standard,” and listed three examples of recognised standards: GB 5725-2009, BS 5867- 2:2008 (Type B performance requirements), and NFPA 701:2019 (Test Method 2) [J1-2/5915]. 155.2. In addition, the FSD issued Circular Letter No. 2/2024 dated 21 March 2024 [B2/1312-1317], which introduced revised requirements on fire protection measures in high-rise buildings under construction with a designed construction height of 30 metres or above. The circular required the provision of a closed-circuit type water relaying system and other fire protection measures to facilitate firefighting operations in such buildings. The circular further required the responsible registered general building contractor or authorised person to inform the local fire station of any circumstances that may lead to the unavailability of the system or the failure to maintain its performance, including defects and temporary shutdowns, and to adopt suitable alternative measures without delay. The

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FSD Circular Letter No. 2/2024 took effect from 1 July 2024 and applied to buildings under construction rather than existing buildings undergoing renovation.

1. The Chinachem Tower fire on 18 October 2025 was a more proximate and

directly relevant precedent. Chinachem Tower, a commercial building in Hong Kong’s Central Business District, was undergoing renovation works when a fire broke out on exterior scaffolding. The fire was classified as a No. 3 alarm fire and spread rapidly along the exterior scaffolding, generating heavy smoke visible from across Victoria Harbour. At least four persons were hospitalised. The BD subsequently assessed the building as structurally sound, and the fire was brought under control without fatalities.

1. The Chinachem Tower fire prompted a more intensive regulatory response than

the Mariners’ Club incident. On 21 October 2025, the BD issued a further circular letter [J1-2/6192-6193] to all PBPs and RCs, requiring them “to take immediate action to inspect and ascertain the fire-retardant property of the protective materials on the façade of buildings with building works under their charge”42 [WS1/825]. The circular letter stated that if contractors were found to be using protective materials with inadequate FR properties, the BD would take appropriate actions including consideration of instigating prosecution and disciplinary actions.

1. Ku confirmed that the Chinachem Tower fire also prompted the ICU to take

proactive steps in relation to the courts / estates under its purview. On 23 October 2025, the ICU sent an email to the RIs appointed to the five courts / estates undergoing repair works under the watch of the MBIST, including the RI of WFC, reminding them “to give clear instruction to all parties including the contractors,

42 YUE Chak Sang (AD NB1, BD) 1st WS §41

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site supervision staff and their team members to prioritise fire safety” and “to ensure that the scaffolding was in good condition and that the fire-retardant properties of the scaffolding nets fully complied with the requirements of BD circular and the Code of Practice for Bamboo Scaffolding Safety issued by LD, given the scaffolding had been in use for an extended period and some scaffolding nets had been replaced after the typhoon”43 [Il-4/8903-8912] [WS1/645-646].

1. The ICU also attached information regarding fire safety at construction sites

issued by the Construction Industry Council and an FSD’s circular letter regarding fire protection measures in high-rise buildings under construction. On 27 October 2025, the ICU sent a further email to the same group of RIs, reminding them to comply with the requirements set out in the BD’s circular letter of 21 October 202544 [Il-4/8913-8918] [WS1/646]. The site inspection at WFC on 28 October 2025, at which further quick tests of scaffolding nets were conducted, was partly prompted by this heightened concern following the Chinachem Tower incident45 [WS14/2140-2142].

1. Following the Chinachem Tower fire, the FSD also offered to assist the BD in

conducting fire tests on scaffolding nets. AD Yung Kam-hung confirmed that “the FSD learned from the BD that they were conducting further reviews on the use of scaffolding nets, and offered to assist in the process. A fire test for scaffolding nets was subsequently scheduled for 12 December 2025 at the Fire and Ambulance Services Academy of the FSD. However, the test was withheld due to the fire incident at Wang Fuk Court on 26 November 2025”46 [WS1/98- 99]. AD Yung also confirmed that although no additional active fire safety provision was considered necessary for buildings under renovation following the

43 KU Siu Ping 1st WS §51 44 KU Siu Ping 1st WS §52 45 KU Siu Ping 3rd WS §§34-41 46 YUNG Kam Hung, Michael (AD Fire Safety of FSD) 1st WS §20.2

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Chinachem Tower fire, the FSD’s assistance to the BD in reviewing scaffolding nets represented inter-departmental cooperation on a matter that, while primarily within the BD’s regulatory purview, had direct implications for firefighting operations47 [WS1/99].

1. The circular letters, reminder emails and site inspections that followed the

Chinachem Tower fire represented a measurably heightened level of regulatory attention. The two preceding fire incidents provided a clear warning; the question for the Committee is whether the regulatory response to those warnings was sufficient, and what systemic reforms are needed to ensure that comparable warnings produce more effective protective actions in a pre-emptive manner in the future.

47 YUNG Kam Hung, Michael 1st WS §20.2

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F. THE REGULATORY FRAMEWORK UNDER EACH RELEVANT AREA AND STAKEHOLDERS’ ROLES AND RESPONSIBILITIES (I) Areas in which the Government has a facilitative role F1. General building management under private ownership (i) The regulatory framework and model

1. The regulatory framework for building management in Hong Kong is premised

on the principle of private ownership. The right to private property is enshrined in Articles 6 and 105 of the Basic Law of the Hong Kong Special Administrative Region. The Government takes the view that the right to private property carries with it the inherent responsibility for its proper management, including up- keeping and maintenance. Government intervention in private property management should be premised on safeguarding the public interest, and should be exercised with caution and restraint given the right of private ownership48 [WS1/486].

1. The BMO provides the principal legislative framework. It is enacted to provide

for the IOs, and the management and maintenance of their buildings. The Secretary for Home and Youth Affairs (“SHYA”) is the Authority under the BMO, and the HAD is her executive arm [WS1/486]49. For a building in which owners hold undivided shares, the responsibility for managing the common parts is to be discharged collectively and jointly; the BMO provides the legal mechanism for owners to form a legal entity, namely the Owners’ Corporation OC, to assume and discharge their shared responsibility on building management50 [WS1/486].

48 TE Chi Wang (Deputy Director, HAD) 1st WS §7 49 See also section 2 of the BMO [G1/11] and [Day 24/8/26-35 (Chinese transcript)] 50 TE Chi Wang 1st WS §8

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• The BMO sets out the duties and powers of OCs and MCs with regard to the

management and maintenance of common parts of buildings. Pursuant to section 18(2) of the BMO, an OC possesses powers including the power to engage and remunerate staff, accountants, managers, or other professionals; to improve and maintain common areas; to carry out renovation, improvement or decoration works on common parts; and to act on behalf of the owners in matters of common interest. The BMO also confers on individual owners the rights to monitor the work of the OC and its MC, including the rights to inspect financial statements and, if applicable, accountants’ reports, and to require the MC chairman to convene an OC general meeting for specified purposes at the request of not less than 5% of the owners51 [WS1/486].

• The SHYA has issued two Codes of Practice pursuant to sections 44(1)(a) and

44(1)(b) of the BMO: the Code of Practice on Procurement of Supplies, Goods and Services [G-1/251-260] and Code of Practice on Building Management and Safety [G-1/261-284]. Recognising that MCs are often comprised of owners who are laymen and serve on a voluntary basis, these Codes of Practice provide practical guidelines and benchmarks for reasonable conduct in their respective areas52 [WS1/491]. While under section 44(2) of the BMO, a failure to follow any of the Codes does not of itself constitute a criminal offence, in any civil or criminal proceedings such a failure may be relied upon as admissible evidence relevant to establishing or disputing liability53 [WS1/491].

• The regulatory model is therefore one of self-governance by owners, supported

by a statutory framework that provides the mechanism for collective decision- making. The Government’s role is facilitative: to assist owners in forming OCs, 51 TE Chi Wang 1st WS §9 52 TE Chi Wang 1st WS §18 53 TE Chi Wang 1st WS §19

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to provide consultative and support services, and to intervene where public interest demands and the self-regulatory mechanisms are inadequate. (ii) The Government’s facilitative role (for the case of WFC)

1. The HAD, through District Building Management Liaison Teams (“DBMLTs”)

in each of the 18 District Offices, provides a range of services to OCs and owners. These include: assisting in OC formation; attending owners’ meetings upon invitation and providing advice according to the BMO; advising parties of non- compliance and requesting rectification; answering BMO enquiries; and organising training and briefings for MC members and owners54 [WS1/487-488].

1. In the case of WFC, the Tai Po District Office (“TPDO”) assisted owners in the

operation of the OC and dealing of building management matters, including attending owners’ meetings and providing information to owners as and when necessary (including meetings on 25 January 2019, 13 December 2019, 11 December 2021, 4 March 2023, 28 January 2024, 25 May 2024, 6 September 2024, 5 October 2024, 21 March 2025 and 13 September 2025); giving advice on operational procedures of meetings; handling enquiries and complaints relating to building management; and, for matters not under the BMO, referring complaints and requests to responsible departments and relevant bodies such as the BD, URA, and Competition Commission where appropriate55 [WS1/504].

1. The HAD’s attendance at WFC meetings was in line with the usual role of HAD

representatives at owners’ meetings, namely “to observe the meeting to provide advice when any irregularity is spotted” 56 [WS1/504]. HAD representatives maintain impartiality and professionalism, offering advice solely on BMO

54 TE Chi Wang 1st WS §10 55 CHAN Hau Man (former DO Tai Po, HAD) 1st WS §7 56 CHAN Hau Man 1st WS §7

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provisions, especially those governing procedures relating to the conduct of owners’ meetings and the rights and powers of the IO and owners.

1. Section 40A(1) of the BMO empowers the Authority (i.e. the SHYA) or an

authorised officer to inspect common parts of a building, attend OC general meetings, and inspect or obtain copies of OC budgets, accounts, documents and records, for the purpose of ascertaining how a building is being controlled, managed, or administered57 [WS1/492]. Given the HAD’s facilitative role, in most cases OCs and owners are willing to work with the HAD in a voluntary and cooperative manner, and section 40A serves mostly as a “last resort” for exceptional cases58 [WS1/492]. In the case of WFC, the buildings were at all material times managed by a functional MC, there was an elected body operating within the framework of the BMO with the assistance of a licensed PMC, and both the MC and PMC had been cooperative; accordingly the HAD did not see the need to trigger the powers under section 40A against WFC59 [WS1/493].

1. The facilitative model had been operating effectively in the majority of

circumstances at WFC. Its systemic design which defines the HAD’s role, particularly in the context of large-scale renovation procurement where owners would face complex decisions without the benefit of specialist expertise, is addressed in Section U below. (iii) The other stakeholders’ responsibilities - owners and the PMC

1. Under the BMO and regulatory model described above, it is the owners, acting

through the OC and MC, who bear primary responsibility for the management of their building. The decision whether to carry out renovation works, what scope of works to undertake, which consultant and contractor to engage, and how to

57 TE Chi Wang 1st WS §21 58 TE Chi Wang 1st WS §22 59 TE Chi Wang 1st WS §24

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supervise the works are all decisions that the BMO allocates to the owners collectively.

1. Section 18(2)(fa) of the BMO stipulates that it is the OC’s duty to “carry out any

renovation, improvement or decoration work to the common parts” of the building60 [WS1/504]. Section 18(2)(g) states that the OC may act on behalf of the owners in respect of any other matter in which the owners have a common interest61 [WS1/504].

1. The PMC engaged by the OC assumes responsibility for the day-to-day

management of the building on behalf of the OC.

1. In the case of WFC, the owners made the decisions to engage Will Power as the

consultant providing RI services, to approve the renovation option, and to appoint Prestige as the main contractor. ISS served as the licensed PMC. Both of the above decisions, and the subsequent supervision of the works, were the primary responsibility of the owners (including through their IO/MC) and professionals they engaged; again, the Government’s role was facilitative. F2. Owners’ Engagement of professionals for maintenance of the FSI system (i) The regulatory framework and model for ownership and maintenance of FSIs

1. The regulatory framework for ownership and maintenance of FSIs in residential

buildings is established by the FSO (Cap. 95) and its subsidiary legislation, principally the Fire Service (Installation Contractors) Regulations (Cap. 95A) and Fire Service (Installations and Equipment) Regulations (Cap. 95B)62 [WS1/104].

60 CHAN Hau Man 1st WS §7 61 CHAN Hau Man 1st WS §7 62 KEUNG Sai Ming 1st WS §5.3.1

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• Under Regulation 8 of Cap. 95B [B2/177], the owner of any FSI has a legal

responsibility to keep such installation or equipment in efficient working order at all times, and shall arrange for inspection of such FSI by an RFSIC at least once every 12 months.

• Under Regulations 6 and 7 of Cap. 95B [B2/176-177], only an RFSIC shall install,

maintain, inspect, or repair any FSI that is required by or pursuant to law to be installed63 [WS1/105]. This requirement places the execution of FSI maintenance in the hands of professionally qualified contractors who are registered with and subject to the disciplinary oversight of the FSD, while the responsibility for engaging such a contractor and ensuring annual inspections are conducted rests with the building owners.

• The model is therefore one of owner responsibility for engagement combined

with RFSIC responsibility for execution: it is for the owners (or the OC, or in appropriate cases the PMC acting on the OC’s behalf) to select and engage a suitably registered RFSIC; it is for the RFSIC to carry out the maintenance, inspection or repair in accordance with the applicable Codes of Practice and to certify the result to the FSD by way of an FS251 certificate. (ii) The Government’s facilitative role

• The FSD’s engagement with building owners in the context of FSI maintenance

is primarily through the FS251 audit mechanism and SDN regime, addressed in Section F4 below. The FSD also maintains the register of RFSICs and makes it publicly accessible so that owners may select a contractor.

• The regulatory framework is premised upon the OC and PMC’s prompt actions

in engaging an RFSIC to inspect and maintain FSIs, and the contractual 63 KEUNG Sai Ming 1st WS §5.4.1

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arrangement between them. As AD Keung confirmed, the FSD “is not privy to the engagement process nor the contractual negotiations and therefore will not be directly involved in the technical content of the works”64 [WS8/1911]. The RFSIC engaged will inspect the FSI and, if there is a need for the FSI to be shut down for maintenance, modification or repair overnight or for more than 24 hours continuously, the RFSIC will notify the FSD of the shutdown. The notification system for FSI shutdown is not an approval mechanism; the RFSICs bear the ultimate responsibility in certifying the FSIs are in efficient working order and are expected to exercise their professional skills and judgement accordingly [WS8/1911].

1. As part of its enforcement priority, the FSD focuses more on buildings that are

unable to have any RFSIC engaged for FSI maintenance, in which circumstances the FSD will take enforcement actions. AD Keung confirmed in oral evidence: “for our priorities, we are more worried that there’s no one doing annual maintenance. And if annual maintenance is being done, if no one is following up on the defects, it is also a problem” [Day 10/147/8-13]. WFC had a functioning OC, an engaged PMC (ISS), and an RFSIC (Victory Fire) under contract for annual inspections.

1. In the case of WFC, Victory Fire was engaged, annual inspections were

conducted (March 2025), FS251 certificates were submitted, and the FSD received and processed them. The systemic problems that subsequently arose in the FSI regime stemmed from failures in the execution of primary responsibilities by private actors; these are addressed in Sections F4 and N.

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(iii) The other stakeholders’ responsibilities – owners, the PMC, contractors, consultant and RI

1. As stated above, Regulation 8 of Cap. 95B imposes on the owner the legal

responsibility to keep the FSI in efficient working order at all times and to arrange for annual inspections by an RFSIC65 [WS1/108]. In practice, for an estate such as WFC where a PMC is engaged (i.e. ISS), the OC normally delegates the day- to-day management of the FSI (including the engagement of an RFSIC and follow-up on defects) to the PMC. The DMC typically stipulates that FSIs in common areas are common parts, and the OC is responsible for their maintenance66 [WS1/109].

1. Under the Property Management Services Ordinance (Cap. 626), licensed PMCs

are required to comply with the codes of conduct issued by the PMSA. In the context of FSIs, the PMSA Code of Conduct for Handling Fire Safety Work [B2/2631-2633] requires the PMC to clearly stipulate in the RFSIC contract that the RFSIC must comply with the FSD requirements, to monitor the progress of the RFSIC’s work, to follow up timely with the RFSIC on required rectifications and keep relevant documents, to follow up timely with the RFSIC that it has to notify the DFS of any FSI shutdowns, and to assist FSD officers during visits, inspections or investigations67 [WS1/109].

1. In the case of WFC, ISS engaged Victory Fire as the RFSIC for the annual

inspections and rectification works of the FSIs. In addition, to the knowledge of ISS, Prestige engaged China Status ostensibly as the RFSIC for renovation works of the FS Water Tanks (which were an integral part of the FSIs). Yet, ISS also received requests from Prestige to assist with the drainage of the FS Water Tanks, which led to the shutdown of the main power switch by ISS’s own electrician (a

65 KEUNG Sai Ming 1st WS §5.5.1 66 KEUNG Sai Ming 1st WS §5.5.3 67 KEUNG Sai Ming 1st WS §5.5.3

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non-RFSIC). The primary responsibility for ensuring that only an RFSIC operated the FSI, and for coordinating between the two simultaneously engaged RFSICs (Victory Fire and China Status), rested with ISS as the PMC, the OC as the owners of the FSI, Prestige as the contractor engaged by the owners to undertake renovation works of FS Water Tanks, and Will Power and Ng Yeuk appointed as consultant and RI for supervising the renovation works as a whole. Their failures in discharging these responsibilities are addressed in detail in Section N. F3. Owners’ engagement of building professionals for carrying out building- or estate-wide inspections and renovation works (i) The regulatory framework and model

1. Under the MBIS introduced by the BO, building owners of private buildings aged

30 years or above who are served with a statutory notice are required to appoint a RI to carry out prescribed inspection and a RC to carry out any necessary rectification and repair works under the supervision of the RI68 [WS1/779]. The registers of RIs and RCs are maintained by the BD.

1. The BA has no involvement in the appointment of the RI and RC. It is the IO’s

decision which RI and RC to engage; the IO is also responsible for deciding whether to employ a consultant, and if so, which one. The system is designed to respect the owners’ autonomy in making these commercial decisions, while requiring that whoever is appointed must be suitably registered and is qualified under the BO.

1. There is no mandatory requirement under the BO for the employment of

consultants for the MBIS. It is the IO’s decision whether to employ any, and if so, the IO should also be responsible for taking the necessary steps for the

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engagement of the consultant. The BD or ICU has no role in reviewing or confirming the quality, reliability and integrity of consultants69 [WS1/626].

1. The model is therefore one of owner-led procurement underpinned by

professional registration requirements. The BA sets the standards for registration and maintains the registers; the owners select from the registered pool; and the professionals bear primary statutory responsibility for the quality, safety and compliance of the works they carry out and supervise.

1. Legislation and related mechanisms exist to guard against improper collusion,

bid-rigging corruption and other irregularities in the procurement process. These include the Prevention of Bribery Ordinance (Cap. 201), Competition Ordinance (Cap. 619), and Building Management (Amendment) Ordinance 2024 70 (effective July 2025) which introduces enhanced declaration of interest requirements for high-value procurement and a “voting-in-person” threshold for large-scale maintenance procurement. The Government’s approach recognises that the owners’ collective decision-making process is vulnerable to manipulation and provides legal safeguards while preserving the foundational principle that the decisions themselves are the owners’ to make. (ii) The Government’s facilitative role

1. The Government’s facilitative role in the engagement of building professionals

for inspection and renovation works operates through multiple channels.

1. The HAD, through the Central Platform on Building Management established

since 2018, organises monthly briefings for OCs and owners at which relevant

69 KU Siu Ping 1st WS §11 70 While these BMO amendments were in force at the time of the WFC fire, they post-dated the engagement of Will Power (2019) and Prestige (January 2024) and were therefore not applicable to the procurement decisions in the case of WFC.

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government departments (including the BD, FSD, Electrical and Mechanical Services Department (“EMSD”), LD and Police) and institutions (including the ICAC, URA and Competition Commission) may be invited to introduce their services and schemes on building management and maintenance, including details of services, application procedures, and channels for making further enquiries. These briefings are particularly directed at owners and OCs that have received MBIS notices71 [WS1/489-490; Day 24/3/17 – 4/13]. DBMLTs also organise seminars, workshops and briefings for OCs and owners in their respective districts by inviting the relevant departments and organisations to introduce information related to building management and maintenance, so owners can better fulfil their responsibilities in managing their buildings 72 [WS1/490].

1. The URA provides further facilitative support through the Smart Tender scheme

(addressed in Section U1 below), which offers an e-tendering platform designed to reduce the risk of bid-rigging in contractor procurement. The HAD, through its Free Legal Advice Service on Building Management and dispute resolution services, provide mechanisms for owners facing disagreements about renovation decisions73 [WS1/489].

1. The BD has also published guidance materials to assist owners in the appointment

of RIs and RCs, including the Practice Note for Mandatory Building and Window Inspection Schemes 2 (“PNBI-2”) [J1-2/4975-4977] on best practice for tendering procedures, a Fact Sheet on mechanisms for fostering a fair and healthy building inspection and repair service market [J1-2/5934-5935], and the Building Maintenance Guidebook [J1-1/1139-1467] [WS1/791-792]74. These publications

71 TE Chi Wang 1st WS §§13-14 72 TE Chi Wang 1st WS §16 73 TE Chi Wang 1st WS §13 74 CHEUNG Yuk Ching 1st WS §34

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provide comprehensive guidance on combatting corruption, preventing bid- rigging, and services in tender and contract management.

1. The facilitative model is intended to equip owners with the information, services

and legal safeguards needed to make informed decisions about the professionals they engage for building maintenance and renovation, without the Government itself directing the commercial choices that owners make about their own property. (iii) The other stakeholders’ responsibilities – owners and the PMC

1. The primary responsibility for the engagement of building professionals rests

with the owners acting through their OC and MC. They must decide which RI and RC to appoint, evaluate competing bids, and satisfy themselves as to the suitability and competence of the professionals they select. Where owners choose to engage a consultant to advise them on the procurement process, that too is their decision and their responsibility.

1. In the case of WFC, the IO appointed Will Power as the consultant to provide,

among other things, RI services, and subsequently appointed Prestige as the main contractor, through owners’ meetings at which the decisions were approved by majority vote. Neither the HAD, nor the ICU, nor the BD had any involvement in these appointment decisions. The professionals so appointed bore the primary statutory obligations under the BO for the safety and compliance of the works; the owners bore the responsibility of having selected them.

1. The evidence before the Committee demonstrates that in the building

maintenance sector, the procurement process is vulnerable to manipulation by organised syndicates, as documented by the Competition Commission, ICAC and Police (addressed in detail in Section S below). The Government’s facilitative

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model, while respecting the principle of private ownership, depends for its efficacy on the integrity of the professionals from whom owners must choose and on the enforcement mechanisms available when that integrity is absent. (II) Areas in which the Government has a supervisory role F4. Management of fire risks and maintenance of FSI (i) The regulatory framework and model

1. The regulatory framework for FSIs is established by statute and designed to

ensure that all FSIs remain in efficient working order at all times. The FSD administers a framework that “clearly delineates responsibilities amongst the regulator, accredited contractors, and building owners or their agents” 75 [WS1/104]. The framework operates through three principal legislative instruments: section 16(1)(b) of the BO, which requires buildings to be provided with the minimum FSIs required for their intended use; the Fire Service (Installation Contractors) Regulations (Cap. 95A), which empowers the DFS to regulate the conduct of RFSICs; and the Fire Service (Installations and Equipment) Regulations (Cap. 95B), which empowers the DFS to control the installation, repair, maintenance and inspection of FSIs76 [WS1/104].

1. The regulatory model distinguishes between passive fire safety provisions and

active fire safety provisions. As AD Keung and AD Yung of the FSD confirmed, to achieve the fire safety objective, there shall be active and passive fire safety provisions within every building77 [WS1/91, 104]. Reference can be made to the BD’s Code of Practice for Fire Safety in Building 2011 (2024 Edition) (“FS

75 KEUNG Sai Ming 1st WS §5.2 76 KEUNG Sai Ming 1st WS §5.3 77 YUNG Kam Hung 1st WS §6; KEUNG Sai Ming 1st WS §5.1

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Code”) [J1-2/3983], which recognises the distinction between passive and active fire safety provisions. 201.1. Passive fire safety provisions [J1-2/4008] “means permanent building features and architectural aspects of a building that prevent fire development and spread. Examples include required staircases, fire rated doors, spandrels, fire barriers, linings with low combustibility etc.” 201.2. Active fire safety provisions in turn concern FSIs and equipment (FAS, FH/HR System, sprinkler systems, fire detection systems, smoke extraction systems and the like), which fall primarily under the regulatory control of the FSD.

1. AD Yung of FSD confirmed this division in both his witness statement and oral

evidence. His witness statement states that “From a technical perspective, fire safety in buildings can be divided into two main categories: ‘active fire safety provisions’ and ‘passive fire safety provisions’, both of which work together to ensure safety. In fact, it is clearly stated in the ‘Code of Practice for Fire Safety in Buildings 2011’ issued by the BD that fire safety provisions include active fire safety provisions and passive fire safety provisions” 78 [WS1/91]. In oral evidence, AD Yung confirmed that the FSD is responsible for regulating active fire safety provisions, while passive fire safety provisions fall primarily under the BD (and, for WFC, the ICU): “For these passive provisions or facilities, they would have a clear division of labour with the BD or the ICU. As I say in my witness statement, we focus on the active part” [Day 17/11/11-14]. AD Yung explained that the rationale for this division of work is to ensure that the most appropriate department with the relevant professional expertise handles the matter. As he put it, “It is because we need to have the most appropriate department to deal with

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it” [Day 17/41/6-7], elaborating that the BA has the professional expertise and oversight over construction practices, and the FSD lacks the expertise to determine whether certain construction arrangements (such as access openings) are warranted as part of the works, “They have the professional expertise and we need to look at the practice” [Day 17/43/15-16].

1. Notwithstanding the above distinction as a matter of technical demarcation and

internal division of labour in general, however, AD Yung readily confirmed, that the FSD’s remit “goes beyond just active provisions” under section 7(c) of the FSO, which imposes a duty to give “advice on fire protection measures and fire hazards as occasion requires” [Day 17/9/17 - 10/1] [B2/82]. The definition of “fire hazard” under section 2 of the FSO (Cap. 95) is broad, encompassing “matter or circumstances which materially increases the likelihood of fire or other calamity or the danger to life or property” [Day 17/10/6-13] [B2/77].

1. Under Regulation 8 of Cap. 95B [B2/177], the owner of any FSI has a legal

responsibility to keep such installation or equipment in efficient working order at all times, and shall arrange for inspection by an RFSIC at least once every 12 months. The FSD monitors compliance with this responsibility through the FS251 certificate mechanism and through visits and inspections conducted on a risk- based and complaint-driven basis. (ii) The Government’s supervisory role - the BD and FSD (1) Passive FSI

1. The BD is generally the authority responsible for regulating the design and

construction of passive fire safety measures in private buildings. These include the design and construction of exit staircases, smoke lobbies, corridors, compartmentation, fire resisting ratings of fire barriers (walls, doors and fixed

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lights), and the design and construction of emergency vehicular access (“EVA”) and means of access for firefighting and rescue79 [WS1/807].

1. The relevant statutory provisions, among others, are found in (1) Part V of the

Building (Planning) Regulations (Cap. 123F) (“B(P)R”) [J1-1/46-55], which e.g. provides for the provision of means of escape in case of fire (regulations 39 to 41) and means of access for firefighting and rescue (regulations 41A to 41D); and (2) Part 10 of the Building (Construction) Regulation (Cap. 123Q) (“B(C)R”) [J1- 2/5751], under which a building must be designed and constructed so as to inhibit the spread of fire within the building and to buildings nearby, provide adequate resistance to the spread of fire and smoke, maintain the stability of the building to allow adequate time for safe evacuation, rescue and firefighting, and avoid consequential damage to buildings nearby; as well as (3) section 16 of the B(C)R [J1-2/5735-5736], which requires that in carrying out building works or street works, appropriate construction methods and procedures must be adopted and appropriate precautionary measures must be taken. Section 16 is a provision of general application that governs not only the permanent design and construction of fire safety elements but also the manner in which works are carried out, including the precautionary measures that must be in place during the course of renovation to protect building occupants and the public from fire risk.

1. The FS Code, published by the BD, provides the detailed prescriptive

requirements deemed to comply with the statutory requirements of the B(P)R and B(C)R. Parts B and C of the FS Code outline the prescriptive requirements on provision of means of escape and fire resisting construction of buildings respectively. Clause F5.6 of the FS Code [J1-2/4169-4170] stipulates that when carrying out alterations, additions, renovations and repair works, certain major fire safety requirements must be observed, including: all means of escape should

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be maintained at all times; alternative measures for ensuring adequate standard of fire safety should be provided if any means of escape, fire rated doors, fire barriers have to be temporarily removed; any inflammable and combustible materials should be stored under safe custody and accumulation in excessive quantity should be avoided.

1. For buildings under the purview of the ICU (such as WFC, a sold HOS estate),

the BD’s regulatory functions with respect to passive fire safety measures are now exercised by the ICU under delegated authority. The nature and effect of this delegation arrangement is addressed in Section E4 above. It bears reiteration that WFC was constructed at a time when it was exempt from the provisions of the BO by virtue of section 41(1)(aa), as a building upon land vested in the HA. WFC was therefore not required to comply with the BO, its subsidiary legislation, or the relevant codes of practice and guidelines at the time of its design and construction (although they were in fact complied with on a voluntary basis). (2) Active FSI and their maintenance

1. The FSD is the authority responsible for regulating active fire safety measures

involving FSIs and equipment. Active FSIs include FAS, FH/HR System, sprinkler systems, emergency lighting, fire detection systems, smoke extraction systems, staircase pressurisation systems, dry riser systems and water spray systems.

1. Under section 21(6)(d) of the BO [B2/340], the BD will not issue an occupation

permit unless the DFS certifies that the required FSIs shown on the vetted building plans have been properly installed and are up to the required standard. Thereafter, the primary monitoring mechanism for the continued operability of FSIs is the mandatory FS251 certificate. Under Regulation 9(1) of Cap. 95B [B2/179], whenever an RFSIC installs, maintains, repairs or inspects any FSI, it

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must within 14 days after completion of the work issue a certificate to the person on whose instructions the work was undertaken and forward a copy to the DFS. The certificate must state the address, a description of the FSI concerned, the date of completion, the nature of the work, and whether the FSI is in efficient working order.

1. The FSD monitors RFSIC performance through an audit-check mechanism

comprising three distinct activities: document review of FS251 certificates submitted by RFSICs to ensure compliance with statutory requirements; verification inspection to verify accuracy of the FS251 certificate; and functional test of FSI to ensure its efficient working order80 [WS1/107]. The FSD conducts proactive audit checks on a percentage of submitted FS251 certificates. For certificates indicating no defects, the local fire stations would also conduct a significant number of on-site verification inspections annually. Throughout the process, any defects or discrepancies identified are followed up, and instances of non-compliance or misconduct by RFSICs may be uncovered81 [WS1/107].

1. Where FSIs are found defective and major defects are reported via FS251, the

local fire station visits the affected premises within 24 hours [B2/2191], conducts an on-site risk assessment for further formulation of contingency plan, issues an advisory letter to the FSI owner requiring provision of standby means and expedited rectification, and monitors compliance through a 72-hour re- inspection82 [WS1/115].

1. In general, visits and inspections to a domestic estate such as WFC by various

units of the FSD are initiated from three aspects: fire hazard complaints, FSI-

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related visits and inspections, and proactive visits by local fire stations under the Risk-based Building Fire Safety Visit Programme83 [WS1/115].

1. Between July 2024 and November 2025, the FSD conducted a total of 26

visits/inspections at WFC: 18 FSI-related visits/inspections (6 relating to defective installations and 12 relating to shutdowns), 7 complaint inspections (2 relating to EVA, 3 relating to means of escape, and 2 relating to other matters), and 1 proactive visit84 [WS1/116-118]. (3) The RFSICs

1. The RFSIC registration system is governed by Cap. 95A. Three classes of

RFSICs are designated: Class 1 (for any FSI containing an electrical circuit or other apparatus for the detection and warning of smoke or fire); Class 2 (for any FSI containing pipes and fittings designed to carry water or some other fire extinguishing medium, or any type of electrical apparatus other than those in Class 1); and Class 3 (for any portable equipment)85 [WS1/105]. During the registration process, applicants and their proposed qualified persons must produce supporting documents, participate in an interview, and undergo a workshop inspection demonstrating the use of required equipment86 [WS1/105].

1. For RFSICs who violate regulations, the FSD will initiate investigations,

prosecute the RFSICs concerned, and refer matters to the Registered Fire Service Installation Contractors Disciplinary Board for inquiry, with the maximum punishment being removal from the register 87[WS1/107]. The FSD mainly prosecutes RFSICs in breach of Regulation 9(1) (failing to issue the certificate), Regulation 9(2A) (signing a false or misleading certificate), and Regulation

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9(3)(b) (issuing or forwarding a false or misleading certificate) of Cap. 95B88 [WS1/107] [B2/179].

1. The FSD also operates a Demerit Points System for RFSICs. Under this system,

inspection levels are determined based on the accumulation of points. RFSICs prosecuted for violating ordinances or punished by the Disciplinary Board are assigned demerit points, as is a finding of non-compliance during an on-site inspection. RFSICs with higher accumulated points are subject to more on-site inspections and proactive audit functional tests89 [WS1/108]. (iii) The other stakeholders’ responsibilities – owners, the PMC and RFSICs

1. The entire FSI regulatory regime involves responsibilities from multiple parties:

the owners and OC as the owners of FSIs with the ultimate responsibility to ensure that FSIs are in efficient working order at all times, the RFSICs engaged by owners (or other contractors in turn) as the party responsible for maintenance and execution of works over FSIs, and the FSD as the regulator. According to Regulation 8 of Cap. 95B [B2/177], the owner must have such installations inspected by an RFSIC at least once every 12 months. Where no FS251 has been received, it is a prima facie case of non-compliance by the owners, and the FSD will take necessary enforcement actions90 [WS1/109].

1. The PMC, according to the Property Management Services Ordinance (Cap. 626)

and its Code of Conduct, has a responsibility to assist the OC in fulfilling these duties, including monitoring the progress of the RFSIC’s work, following up timely with the RFSIC on required rectifications, following up timely with the

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RFSIC that it has to notify the DFS of any FSI shutdowns, and assisting FSD officers during visits, inspections or investigations91 [WS1/109].

1. The RFSIC engaged by the owner bears the professional responsibility for the

proper execution of FSI maintenance, inspection and repair. Under Cap. 95B, only an RFSIC shall maintain, inspect or repair any FSI required to be installed in premises. It is the RFSIC’s obligation to inspect the FSI, to assess the need for shutdown, to notify the FSD via an SDN where shutdown is required, to carry out or supervise the repair works, and to certify completion via FS251. Where an RFSIC issues a certificate which is false or misleading in any material particular, it commits an offence under Regulation 9(2A) and 9(3) of Cap. 95B [B2/180].

1. The evidence before the Committee demonstrates that at WFC, both RFSICs

engaged (albeit for different purposes) failed in their primary responsibilities, the PMC (ISS) failed in its duty to coordinate between the two RFSICs and to ensure FSI operability, and the contractor (Prestige), consultant (Will Power) and RI (Ng Yeuk) failed in their responsibility to oversee and ensure that renovation and maintenance works over FSIs were conducted only by an RFSIC. These failures are a direct and proximate cause of the FAS shutdown and are addressed in detail in Section N. F5. Regulation and supervision of construction methods, procedures and use of materials under the MBIS and MWCS (i) The regulatory framework and model (1) The MBIS

1. The MBIS, introduced under the BO in 2012, applies to private buildings aged

30 years or above (except domestic buildings not exceeding three storeys in height). Under the MBIS, building owners served with a statutory notice are

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required to appoint an RI to carry out prescribed inspection and an RC to carry out any necessary rectification and repair works under the supervision of the RI.

1. The building elements to be covered under the MBIS prescribed inspection are

clearly defined: external elements and other physical elements; structural elements; fire safety elements; drainage system; and identification of unauthorised building works in common parts of the building, on the exterior other than the common parts, or on the street on which the building fronts or abuts92 [WS1/780].

1. A critical feature of the MBIS is that inspection does not necessarily lead to major

building repairs. Whether repair works are required, and if so, their extent, will be dependent on the outcome of the inspection as set out in the report submitted to the BA by the RI. The majority of prescribed repair works carried out under the MBIS should be MW or exempted building works under section 41 of the BO, and the repair proposal normally does not require the BA’s approval or consent before commencement of work.

1. Under the MBIS regime, the ICU (for buildings under its statutory control, such

as WFC) conducts audit checks on the relevant submissions made by the RI at two points in time: upon completion and submission of the Inspection Report (Form MBI 3), and upon submission of the Completion Report after completion of the prescribed repair works (Form MBI 4) 93 [WS14/2128]. There is no statutory requirement for the ICU to supervise and conduct regular or ad hoc inspections of works during the course of inspection and renovation works.

1. Under the MBIS, the ICU conducts preliminary check (verification of RI

registration status), fundamental check (ensuring reports and proposals have been

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duly completed and signed), and audit check (document audit and site audit on randomly sampled cases)94 [WS1/631-634].

1. Specifically for audit check, it consists of document audit and site audit. For each

month, 16 cases are sampled for audit check; of the cases sampled for document audit, one-third further proceed to site audit95 [WS1/632-633]. (2) The MWCS

1. For repair works that are relatively smaller in scale, less complex and of lower

risk, the works may follow the simplified procedures under MWCS introduced in 2010 without the need to obtain prior approval of plans and consent for commencement of works from the BA. There are currently 187 items of building works designated as MW under Part 3 of Schedule 1 to the Building (Minor Works) Regulation (Cap. 123N) (“B(MW)R”), classified into three classes according to their scale, complexity and risk to safety96 [WS1/656-658].

1. For Class I MW, both Prescribed Building Professionals (“PBPs”) and Prescribed

Registered Contractors (“PRCs”) are required to be appointed, and they are required to submit notifications, plans and documents before commencement and after completion of works. For Class II MW, only a PRC is required who should also submit notifications, plans and documents before commencement and after completion of works. For Class III MW, only a PRC is required and submissions are made after completion rather than before commencement.

1. As expressly stated as background in the BD’s manual on MW [J1-2/5139], “the

Minor Works Control System (MWCS) is a self regulatory system”. The spirit of the MWCS primarily relies on self-regulation of the construction industry’s

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professionals for its implementation, having regard to the relevant background and context.

1. Under the MWCS, the PBPs and PRCs are required to supervise the carrying out

of MW, notify BA of any contraventions of the regulations which would result from the carrying out of MW, and comply with the BO. Sections 42 and 43 of the B(MW)R set out the duties of the PBPs and PRCs: they must give periodical and continuous supervision to ensure that there is no material divergence or deviation from the prescribed plans and details submitted, and are responsible for ensuring the works are carried out in accordance with the BO. (ii) The Government’s supervisory role

1. The Government’s supervisory role in relation to construction methods,

procedures and use of materials operates at different intensities depending on the nature and risk level of the works.

1. For works requiring the BA’s prior approval and consent (new buildings, A&A

and demolition works), the BD scrutinises and approves building plans, grants consent to commencement, conducts periodic surprise site inspections during construction, and inspects the completed works before issuing an occupation permit97 [WS1/715-716]. The BD regularly carries out inspections and audit checks to building works sites on a risk basis; high-risk activities such as demolition works are inspected every one to three weeks, while superstructure works are inspected every eight to sixteen weeks98 [WS1/718-719].

1. For repair works under the MBIS, the Government’s supervisory role is exercised

through the audit-check mechanism described above. As confirmed by the BD, the submitted certificates on completion of prescribed building inspection or

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repair by RIs are sampled for audit checks comprising document audit and site audit, carried out in accordance with the MBI Manual99 [WS1/798]. The BD has adopted the ISO-2859-1 “Sampling Procedures for Inspection by Attributes” to guide the selection of MBIS submissions for audit checks, requiring successfully conducting a minimum of 315 samples of submissions in order to achieve an acceptable level of quality control over RIs’ and RCs’ performance under the BO100 [WS1/800].

1. The ICU adopts the same ISO-based standard in determining the number of cases

selected for audit checks. As Lau Fu-kwok explained, the ICU’s practice of selecting 16 submissions per month for audit check was originally derived from the BD’s ISO-based ratio, applied pro rata to the ICU’s caseload; and for the final work audit check (approximately 1,725 cases per year), this was likewise based on the BD’s standards set on the basis of ISO, representing approximately one- fourth of the total caseload [Day 24/78/12 - 80/4].

1. The degree of pre-works checking, audit checking during the course of works,

post-works checks and handling of complaints differs between the approval-and- consent system, the MBIS and MWCS. For the MWCS in particular, the simplified procedures mean that the BA does not vet, approve or consent to the works before they commence; its supervisory role is generally exercised before the commencement of works and after the completion of works through random audit sampling. Under the MBIS, no regular inspections during the course of works are required; site inspections would generally be arranged in response to complaints or enquiries. This design reflects the self-regulatory nature of the system, which places primary reliance on the registered professionals for supervision and compliance during the works period.

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• In the case of WFC, the prescribed repair works were MW and exempted works

under the BO. No plan submission for prior approval and consent by the ICU was required. The ICU’s supervisory role during the renovation under the MWCS was therefore limited to: processing MW submissions and conducting audit checks on those randomly selected; handling complaints and enquiries as they arose; and conducting site inspections in response to those complaints. Thus, for professionals who are minded to abuse or circumvent the systems, their proneness to abuse and the opportunity for such abuse exists from the very commencement of works. (iii) The other stakeholders’ responsibilities – owners, the PMC and building professionals

• The primary responsibility for ensuring that construction methods, procedures

and materials comply with the BO rests with the PBPs and RCs. Under section 30D(4) of the BO, an RI appointed under the MBIS is responsible for providing proper supervision of the carrying out of the prescribed repair, ensuring that the repair materials to be used are not defective and comply with all relevant Ordinances and Regulations, codes of practice and practice notes, and ensuring the building is safe or has been rendered safe101 [WS14/2128].

• Under sections 3 and 16 of the B(C)R [J1-2/5727, 5735-5736], all materials used

in building works must be of a nature and quality suitable for their intended use, adequately tested by recognised tests, and appropriate construction methods and procedures must be adopted with appropriate precautionary measures taken. The PBPs and RCs are required to ensure that protective materials meeting the required standards are used in building works. 101 KU Siu Ping 3rd WS §4

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• Under the Code of Practice for the Mandatory Building Inspection Scheme and

the Mandatory Window Inspection Scheme [J1-2/4746-4970], the RI and RC each has a role to play in safety and quality management during the course of rectification and repair works. The supervision and control to be exercised by RIs and RCs during the course of works shall cover adequate measures to ensure a safe working environment and adequate control on the sequence of rectification and repair works, the erection and maintenance of scaffolds. RIs and RCs “should fully understand the potential fire risks involved in the course of repair works and adopt appropriate precautionary measures accordingly in carrying out the works”102 [WS1/797].

• For the case of WFC, Will Power (as consultant providing the RI services) and

the RI bore primary statutory responsibility for supervising the repair works and ensuring that materials and methods complied with the BO. Prestige (as RC) bore primary responsibility for carrying out the works in compliance with the BO and for ensuring that the part of the building for which it was appointed was rendered safe. The said parties were required to certify completion of works in compliance with the BO. The failures of such parties in these primary responsibilities are the central subject of Sections I through N below. F6. Regulation and supervision of building professionals – registered inspectors (i.e. RI) under the MBIS and registered contractors (i.e. RC) for carrying out works (i) The regulatory framework and model

• The registration systems for RIs and RCs under the BO serve as the gateway

control through which only suitably qualified professionals and contractors may undertake building works. The primary aim is to ensure that only competent professionals and contractors take up the roles, duties and obligations to prepare 102 CHEUNG Yuk Ching 1st WS §55

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plans, supervise, carry out and certify building works in accordance with the BO103 [WS1/709].

1. The RI registration system under the BO permits registration of persons holding

the qualification of Authorised Person (“AP”), Registered Structural Engineer (“RSE”), Registered Architect, Registered Professional Engineer in specified disciplines, or Registered Professional Surveyor in specified divisions, provided they also possess the relevant practical experience in building construction, repair and maintenance104 [WS1/747-749]. It bears emphasis that the aforesaid persons are already subject to the registration requirements applicable to their professions as appropriate to begin with. Leaving that aside, for applicants who are not AP or RSE, they must attend an interview conducted by the Inspectors Registration Committee under section 3(5CB) of the BO, which examines qualifications and experience and advises the BA whether to accept, defer or reject the application.

1. Registration for an RI is valid for five years. To renew registration, the RI must

apply within the time limits specified in section 3(9C)(b) of the BO. The BA shall refuse renewal unless the applicant continues to possess the necessary qualifications105 [WS1/750].

1. For RCs, applicants must satisfy the BA as to the adequacy of their management

structure (if a corporation), the appropriate experience and qualifications of their personnel, their ability to have access to plant and resources, and the ability of the person appointed to act for the applicant to understand building works through relevant experience and a general knowledge of basic statutory requirements106 [WS1/754]. Applications are referred to a Contractors Registration Committee

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(“CRC”) for interview and assessment107 [WS1/752]. The validity period for registration is three years108 [WS1/756].

1. The model therefore relies on a well-defined registration system serving as the

gatekeeper for professional competence, combined with statutory obligations during works, certification upon completion, random audit checking by the BA, and sanctions (prosecution, disciplinary action, or refusal of renewal) for non- compliance. However, the model’s gatekeeping role cannot be conflated with the primary responsibilities which rest on qualified professionals at all times. (ii) The Government’s supervisory role

1. The BA’s supervisory role over registered professionals and contractors operates

through four mechanisms: the registration and renewal process itself (which serves as a periodic competence check); the audit-check system (which tests whether professionals are properly discharging their duties in the actual cases); the prosecution mechanism (for contraventions of the BO identified through audit checks, complaints or investigations); and the disciplinary mechanism (for misconduct or negligence rendering a professional unfit to remain on the register)109 [WS1/709-711, 721-723].

1. On renewal of registration, the BD retrieves conviction, disciplinary and

suspension records covering the three years preceding the application date (or the current registration period preceding the date of submission of the renewal application). Where such records exist, the application is referred to the relevant registration committee for interview and assessment, and the BA may refuse

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renewal if satisfied that the contractor is no longer suitable for registration110 [WS1/756, 758-759].

1. If PBPs or RCs are convicted of an offence relating to their professional duties or

building works respectively, or have failed to discharge the duties or abide by the imposed requirements under the BO, or have been negligent or have misconducted themselves, the BD may instigate disciplinary action by referring the case to the relevant disciplinary board set up under the BO. The board may order permanent or temporary removal from the register, a reprimand, or a fine of up to $250,000. From 2021 to November 2025, a total of 75 cases were referred to disciplinary boards for proceedings111 [WS1/722-723].

1. Under the existing delegation arrangements, the ICU does not possess the

delegated authority to initiate prosecution of offences under section 40 of the BO or administrative disciplinary actions against RIs and RCs under sections 7 and 13 of the BO; those powers remain vested with the BD. If the ICU identifies any non-compliance of the BO, it refers the relevant cases to the BD for assessment of prosecution and disciplinary actions112 [WS1/607]. Between 2006 and 2025, the ICU referred 852 cases to the BD for prosecution, resulting in a total of 1,064 summonses 113 [WS1/745]. Five cases were referred for disciplinary action between 2023 and 2025114 [WS1/746].

1. In the case of WFC, the RI appointed for the renovation was Ng Yeuk of Will

Power. He was included in the register of RI on 31 May 2019 by virtue of being

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an AP, and his registration was renewed on 22 March 2024 with expiry on 31 May 2029115 [WS1/761-762].

1. Prestige was first registered as a Registered General Building Contractor

(“RGBC”) on 24 March 2006. In August 2023, it was disciplined under the BO for misconduct in building works, resulting in a fine of $50,000 and a four-month prohibition from certifying or undertaking any MW116 [WS1/762-763]. After Prestige’s application for renewal in December 2023, the AS who had been involved in the disciplinary matter failed the CRC interview on 6 March 2024; but since another AS with a clean record remained acting for Prestige, the renewal was granted on 21 March 2024 with the failed AS removed117 [WS1/763-764]. AD Karen Cheung of the BD confirmed in oral evidence that Prestige no longer holds any licence under the BD, as the relevant AS has since resigned.118

1. Prestige had also previously been registered as a Registered Minor Works

Contractor (“RMWC”) (since 8 August 2013). During its application for renewal in May 2019, its AS was required to attend a CRC interview because of a record of 14 convictions on labour safety offences and 7 warning letters issued by the BD; the AS failed the interview and the application was refused, resulting in Prestige’s removal from the RMWC register on 4 October 2019119 [WS1/764].

1. The evidence therefore demonstrates that the registration system did subject

Prestige to enhanced scrutiny at the point of renewal, and that on one occasion the renewal was refused. The broader question of whether the system could be

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enhanced to better inform owners of contractors’ disciplinary histories is a systemic issue addressed in Section Q below. F7. Regulation and supervision of occupational health and safety (i) The regulatory framework and model

1. The LD is responsible for administering and enforcing the OSHO and FIUO and

their subsidiary legislation.

1. The LD’s primary mandate is to safeguard the occupational safety and health

(“OSH”) of employees at work. The professional expertise of the LD is in OSH120 [WS1/312-313, 325].

1. The OSHO [D1/5-83] provides safety and health protection for employees in both

industrial and non-industrial workplaces, covering almost all workplaces including construction sites. The FIUO [D1/84-132] provides safety and health protection for workers in the industrial sectors, including construction works, and its subsidiary legislation includes the Construction Sites (Safety) Regulations (Cap. 59I) (“CSSR”) [D1/133-204] and the Factories and Industrial Undertakings (Safety Management) Regulation (Cap. 59AF).

1. The general duty provisions of the legislation impose on employers (including

principal contractors) the obligation, so far as reasonably practicable, to ensure the safety and health at work of all their employees. This encompasses the provision and maintenance of safe plant and systems of work, the provision of information, instruction, training and supervision, and the maintenance of a working environment that is safe and without risks to health121 [WS1/315].

120 YUEN Tsz Lok, Murphy (Chief OSO, LD) §§6-7, 39 121 YUEN Tsz Lok 1st WS §12

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• In the specific context of Renovation, Maintenance, Alteration and Addition

(“RMAA”) works to existing buildings, the OSHO, FIUO and their subsidiary legislation (in particular the CSSR) are applicable to the protection of construction workers’ safety and health at work122 [WS1/315].

• The fire safety provisions within the OSH legislation are found principally in

Regulations 53 and 54 of the CSSR [D1/186]. 260.1. Regulation 53 empowers the Commissioner for Labour to issue a written order prohibiting smoking and the use of naked lights at a construction site where any flammable liquid or any mixture containing such liquid or any substance or thing involving danger from fire is used or intended to be used. 260.2. Regulation 54(1) requires the contractor responsible for a construction site to maintain in good condition and free from obstruction all the means of escape in case of fire and all fire-fighting appliances. The penalties for non- compliance are a maximum fine of $400,000 for a contractor and $150,000 for a worker. (ii) The Government’s supervisory role

• Occupational safety inspections conducted by Occupational Safety Officers

(“OSOs”) are surprise inspections. No prior notice is given to renovation contractors, RIs or building management. This has long been a well-established practice 123 [WS13/2107-2018]; an internal LD email of 4 December 2024 reminded all divisional officers that “inspections of workplaces shall be surprise in nature. No inspection schedules shall be disclosed to any third party, including consultants, in advance” [D2/1981]. 122 YUEN Tsz Lok 1st WS §13 123 LAM Sau Ching 2nd WS §§5-6

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• The inspection frequency for construction sites is determined on risk-based

principles. Taking into account the nature and risk levels of work processes and scale of works, the inspection frequency is generally set at one to two months124 [WS1/338; Day 16/3/19-23]. OSOs conduct complaint investigations as soon as possible; even if a construction site is not yet due for inspection according to schedule, OSOs will advance the next site visit upon receiving OSH complaints 125 [WS1/338].

• The LD’s enforcement options comprise prosecution, suspension notices,

improvement notices and written warnings (by way of Construction Site Inspection Reports (“CSIRs”)). Officers exercise professional judgement, discretion and common sense in selecting the appropriate response based on the gravity of the offence.

• During inspections of RMAA sites, OSOs pay particular attention to: the

readiness and proper use of fall arresting systems; competencies of workers engaging in scaffolding works; access to and egress from scaffolds; suitability and adequacy of planks to form working platforms; conditions of scaffolds and their scaffolding members; provision of catch-fans with suitable receptacle and nettings; and proper maintenance and inspection of scaffolds by competent persons 126 [WS1/339-340]. The focus is on the safety of workers at work; properties of construction materials used at the site (such as foam boards) are not the main focus of OSH inspections127 [WS1/332]. 124 LI Man Pong (Senior Div. OSO, LD) 1st WS §22 125 LI Man Pong 1st WS §22 126 LI Man Pong 1st WS §25 127 LI Man Pong 1st WS §7

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(iii) The other stakeholders’ responsibilities – owners, the PMC and building professionals

1. Under section 6A of the FIUO and section 6(1) of the OSHO, the employer

(including the principal contractor) must, so far as reasonably practicable, ensure the safety and health at work of all the employer’s employees. Every employer must provide and maintain plant and systems of work that are safe and without risks to health, and must provide such information, instruction, training and supervision as may be necessary.

1. In the case of WFC, Prestige bore the primary statutory duty as the principal

contractor to ensure the safety and health of its employees and others on site. This duty encompassed the provision of safe systems of work, provision of safety equipment, maintenance of scaffolding in safe condition, and management of fire risks at the construction site. The Factories and Industrial Undertakings (Safety Management) Regulation (Cap. 59AF) required Prestige as a specified contractor to develop, implement and maintain a safety management system containing an element of emergency preparedness.

1. The PMC and building professionals also bear responsibilities. In occupied

buildings where construction works are carried out, the BD and FSD are the authorities responsible for enforcing fire safety construction aspects and FSIs which form common parts of the building, in accordance with the BO and Fire Safety (Buildings) Ordinance. The LD’s jurisdiction is directed at the safety of workers, while the BD and FSD are responsible for the safety of occupants in relation to passive and active fire safety provisions. This jurisdictional division is relevant to understanding the respective departments’ approaches to the contributing factors addressed below.

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PART III: TOR 1 G. THE CAUSES AND ORIGIN OF THE FIRE, SPREAD OF FIRE AND HEAVY CASUALTIES - THE INTER-DEPARTMENTAL FIRE INVESTIGATION TASK FORCE’S GENERAL FINDINGS

1. The starting point for the Committee’s analysis under the ToR 1 is the work of

the IFITF, which has produced a comprehensive Final Investigation Report setting out the cause and origin of the fire, the mechanisms of its rapid spread, and the factors that contributed to the heavy casualties. This section summarises the IFITF’s general findings; the analysis of each contributing factor, and the establishment of causation for each factor, are addressed in Sections I to N below. G1. A brief chronology of the fire with all of the factors contributing to the fire, spread of fire and heavy casualties summed up

1. The fire at WFC was first reported to the FSCC at 1451 hours on 26 November
2. The caller reported “a fire with explosion occurred at scaffolding installed

along the external wall of Wang Cheong House” (IFITF Report §1.1.1, fn 1 [ER1/13]). A full No. 1 Alarm Fire Pre-determined Attendance (“PDA”), together with additional fire appliances dispatched in response to the renovation works and defective FSIs, was immediately mobilised.

1. The evidence establishes, however, that the fire started earlier than 1451 hours.

CCTV footage captured embers falling onto the bicycle parking area of Wang Cheong House at approximately 1443 hours (IFITF Report §5.1.2 [ER1/40]). The IFITF concluded that the fire “started earlier, likely between 1430 hours and 1443 hours” and that “despite extensive efforts, the exact time of the fire’s occurrence could not be definitively determined” (IFITF Report §5.1.8 [ER1/41]).

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• The IFITF observed that “even a difference of a few minutes in the timing of the

first emergency call may critically affect the stage at which firefighting operations can commence and, consequently, the prospects of limiting further fire spread” (IFITF Report §5.1.7 [ER1/41]). The significance of this observation lies in its illustration of the extreme rapidity of fire development: by the time the first fire appliance arrived at 1456 hours, the fire was already of substantial scale.

• The speed with which the fire developed following the first appliance’s arrival

was extraordinary. Within approximately 20 minutes of the FSD’s arrival at the scene, the fire had spread from its point of origin on the flat roof of Wang Cheong House to multiple locations, including “the open ground surrounding Wang Cheong House, multiple façades of the building and different re-entrant spaces,” and had “progressed across buildings, reaching Wang Tai House and its re- entrant areas” (IFITF Report §5.2.3.6 [ER1/54]). The situation was “further exacerbated by flying scaffolding debris falling from the building, which blocked entrances and significantly obstructed firefighting efforts” (IFITF Report §5.2.3.6 [ER1/54]).

• By the conclusion of the incident, the fire had produced 12 instances of rapid

vertical fire spread across 6 of the 8 buildings at WFC (IFITF Report §8.7.2 [ER1/175]). A total of 1,736 flats were assessed, of which the interiors of 924 flats sustained varying degrees of fire damage (IFITF Report §5.3.1 [ER1/62]) (subject to the qualifications at §§436-437 below).

• The fire was surrounded at 2131 hours on 27 November 2025, brought under

control at 0315 hours on 28 November 2025, and largely extinguished at 1018 hours on 28 November 2025 (IFITF Report §1.1.5 [ER1/13]). 106

• 79 individuals sustained injuries and 168 lives were lost, including one Fire

Services member, namely Senior Fireman Ho Wai-ho (“SFn Ho”)128. Over 100 persons were rescued by the FSD during the operation (IFITF Report §1.1.5 [ER1/13]).

• The IFITF identified several key factors contributing to the high number of

fatalities and injuries (IFITF Report §1.5.1 [ER1/15]). These are: 276.1. First, rapid and extensive fire spread driven by a combination of factors, which left residents with limited time to evacuate and increased the risk of entrapment; 276.2. Second, fire-damaged combustible envelope blocking exits; 276.3. Third, failure of fire alarms; 276.4. Fourth, polystyrene window covers obstructing residents’ awareness and contributing to fire spread; and 276.5. Fifth, compromised tenability in the means of escape.

• Each of the relevant contributing factors, and the primary and supervisory

responsibilities attaching to them, are addressed in detail in Sections I to N below. 128 SFn Ho was at the time of the WFC fire performing the duties of a Fireman (Fn), but he was posthumously awarded the honorary title of Senior Fireman in recognition of his outstanding service and selfless dedication to duty by the FSD.

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G2. The Inter-departmental Fire Investigation Task Force

1. Due to the severity of the fire damage and large number of casualties and fatalities,

the IFITF was established on 28 November 2025 to investigate the incident (IFITF Report §2.1.1 [ER1/16]).

1. The IFITF comprises representatives from the FSD, Police, BD, EMSD, ICU

under the HD, LD, and Government Laboratory, as well as fire engineering professionals (IFITF Report §2.1.2 [ER1/16]). The inclusion of an independent fire engineering professional, Prof Yuen Kwok-kit, Richard, together with the Government Laboratory’s independent analytical capability, ensured that the IFITF’s technical findings were subject to independent scientific scrutiny.

1. The IFITF’s terms of reference focused on two primary objectives: investigating

the cause of the fire and how it spread, and determining the factors that led to heavy casualties (IFITF Report §2.3.1 [ER1/17]).

1. The investigation was conducted with reference to international standards,

including XF/T 812-2008 and the National Fire Protection Association 921 “Guide for Fire and Explosion Investigations,” encompassing scene examination, evidence collection, witness interviews, and laboratory and expert analysis (IFITF Report §3.1.1 [ER1/18]). Collected samples were submitted to accredited laboratories for chemical analysis, material testing and combustion property testing. Bench-scale experiments, computer simulations and full-scale fire tests were also conducted, and autopsy reports were reviewed (IFITF Report §3.5.1 [ER1/18]). The full-scale fire tests, conducted in Sichuan, represent a notably thorough scientific validation exercise which confirmed the IFITF’s hypotheses regarding the mechanisms of fire spread.

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• An Interim Investigation Report was issued in February 2026 and all findings

from that Interim Report have been incorporated into the Final Report. The Government acknowledges that the Report notes it “may require modification” if further information comes to light in other proceedings. G3. The IFITF’s general findings on the cause and origin of the fire

1. The IFITF concluded that the fire originated from the flat roof outside Flats 104

and 105 of Wang Cheong House (IFITF Report §§1.3.1, 6.1.1 [ER1/14, 73]). Excavations at the suspected point of origin revealed debris up to 2 metres high, consisting of construction materials “such as safety nets, toe-boards, polystyrene window covers, carton paper boxes and backing paper from mosaic tiles” (IFITF Report §1.3.2 [ER1/14]). The accumulation of these combustible materials in the area “could have served as fuel for the fire” (IFITF Report §6.1.6 [ER1/74]).

1. The IFITF ruled out deliberate acts, electrical faults and gas-related causes.

Neither traces of accelerants nor evidence of suspicious activity immediately prior to the fire were identified at the scene, and accordingly “a deliberate act with the use of accelerant is considered unlikely to be the cause of the fire” (IFITF Report §6.1.2 [ER1/73]). Post-fire inspections conducted by the EMSD “ruled out both electrical faults and Liquefied Petroleum Gas-related causes as potential causes of the fire” (IFITF Report §6.1.5 [ER1/73]).

1. Two cigarette ends were discovered at the site (IFITF Report §1.3.2 [ER1/14]).

Evidence of smoking at the construction site was widespread: numerous cigarette ends were discovered on the bamboo scaffolding of Wang Chi House; CCTV footage captured construction workers smoking on the roof floor of Wang Cheong House; and at least five occupants of Wang Cheong House had occasionally noticed the smell of smoke or the presence of cigarette butts on the scaffolding (IFITF Report §6.1.8 [ER1/74]). More broadly, 105 out of 2,011

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residents who provided statements and questionnaires reported “witnessing smoking, smelling cigarette smoke or noticing cigarette ends within Wang Fuk Court during the renovation period” (IFITF Report §6.1.8, fn 64 [ER1/74]).

1. Weather conditions on the day of the fire also materially contributed to the

ignitability of materials at the point of origin. The Hong Kong Observatory issued a Red Fire Danger Warning, with relative humidity levels measuring between 40% and 50% from 1500 to 1800 hours. The IFITF found that these “low humidity levels reduced the moisture content in materials, rendering them more prone to combustion and more conducive to fire spread” and “facilitated the development of smouldering fires, which may initially go unnoticed, but could later develop into open flames” (IFITF Report §6.1.9 [ER1/74]).

1. Having excluded all other potential sources of ignition, the IFITF was satisfied

that the fire was most likely accidental in nature: “Most probably: A glowing source, such as a lit cigarette end, ignited combustible materials, such as carton paper boxes, at the scene” (IFITF Report §6.1.10 [ER1/75]). The IFITF further observed that “while the windy and dry weather conditions contributed to its development, it was the abundant presence of combustible materials that played a crucial role in allowing the fire to grow in size, intensify and rapidly spread further to other combustibles within the re-entrant” (IFITF Report §8.2.5.3 [ER1/130]).

1. Prof Yuen confirmed in oral evidence that the fire at WFC necessarily started

small. “When you start a fire, it always starts small. So you always go through the stage when the fire is small” [Day 26/36/7-9]. He further stated: “we have reason to think that when the fire was small, it already ignited other combustible items nearby” [Day 26/36/17-18]. This confirms the IFITF’s finding that the progression from a small glowing source to a catastrophic conflagration was not

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inevitable but was enabled by the presence of (i) sizable amount of combustibles (such as carton boxes) that could be readily ignited by an ignition source (such as a lit cigarette end) and (ii) non-FR materials (such as safety nets and canvas) serving as a vertical plane that allowed the small fire to propagate and escalate to a size sufficient to ignite the bamboo scaffolding within the re-entrant, which represents the bulk (over 80%) of mass but is otherwise relatively difficult to ignite. G4. The IFITF’s general findings on the rapid spread of the fire

1. The fire development at WFC was, in the IFITF’s assessment, “highly complex,

with the modes of fire spread exhibiting intricate and multifaceted behaviours” (IFITF Report §1.4.1 [ER1/14]).

1. The IFITF identified three dominant and interconnected modes of fire spread

(IFITF Report §1.4.1 [ER1/14]): 290.1. First, rapid vertical fire spread along the re-entrant, driven by intense heat and flames; 290.2. Second, façade fire turning into interior fires through openings such as windows, exhaust fans or by radiant heat; and 290.3. Third, secondary ignitions via embers, flaming droplets and falling debris.

1. These hypotheses were confirmed by full-scale fire tests conducted in Sichuan

(IFITF Report §8.5.1 [ER1/174]). The IFITF also made key additional observations regarding (i) the FR properties of safety nets; (ii) the FR properties of canvas; (iii) fire spread into units via radiation ignition; (iv) ignition at ground- level thereby further intensifying the fire and its damage; and (v) the extensive

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nature of the fire spread and involvement of multiple simultaneous outbreaks across numerous indoor units (IFITF Report §8.6 [ER1/174-175]).

1. A critical structural feature of WFC was the vertical re-entrant between two wings

of each block, extending from the 1st floor to the roof (IFITF Report §4.1.3 [ER1/19]). This chimney-like configuration “naturally channelled rising smoke and hot gases” and “confined and directed their upward movement, allowing the fire to spread rapidly and engulf multiple floors in a short timeframe” (IFITF Report §6.2.1.6 [ER1/80]). A heat release rate study conducted as part of the investigation demonstrated that the re-entrant configuration increased the peak heat release rate to slightly over 3 MW, compared with approximately 1 MW for an open configuration, and “exhibited a significantly faster growth rate” (IFITF Report §7.2.3.2 [ER1/94]).

1. The re-entrant design dates from 1983 and is therefore a pre-existing structural

condition of the building which amplified the consequences of the combustible loading created by the renovation works.

1. The re-entrant contained large quantities of accumulated combustible materials

forming a continuous fuel source across multiple levels. These materials included bamboo scaffolding, safety nets, wooden planks, toe-boards, canvas, nylon strips, and polystyrene window covers (IFITF Report §6.2.1.3 [ER1/79]). Amongst these materials, bamboo, safety nets, toe-boards and wooden planks were identified, and the impact of these identified combustibles were evaluated in the fire severity analysis. The fire severity analysis demonstrated that “the fire reached extreme levels of severity even when only the identified materials were included,” with the peak heat release rate for a three-storey mockup reaching 29 MW, “comparable to the peak fire HRR of a bus or heavy goods vehicle in a tunnel fire” (IFITF Report §8.2.4.2 [ER1/128]).

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• Given that the actual re-entrants span 31 storeys and contained additional

combustibles beyond those modelled, “the fire severity could have escalated dramatically” (IFITF Report §8.2.4.2 [ER1/128]).

• It was further identified in the test that when the fire reached the level of severity

required, bamboo could become a dominant fuel source, contributing nearly 78% of the total energy released, followed by wooden planks at 14%; however, the IFITF found that “other materials, such as safety nets, toe-boards and wooden planks, ignited first due to their relatively lower thermal resistance” (IFITF Report §7.2.3.7 [ER1/95]).

• The IFITF also identified the presence of safety nets potentially lacking FR

properties as a critical factor in the rapid spread. The IFITF observed that “if these nets were made of FR materials, even if ignited, the fire would likely have self- extinguished after the removal of the heat source, thereby minimizing the risk of igniting other combustible materials and reducing the overall spread of the fire” (IFITF Report §6.2.3.4 [ER1/86]). The “presence of safety nets potentially lacking FR properties, combined with dry and windy conditions created an ideal environment for the fire to spread and for embers to spark additional fires” (IFITF Report §6.2.3.5 [ER1/86]).

• The full-scale fire tests and simulations confirmed this analysis.

1. 1. The IFITF noted that “the safety nets collected from Wang Chi House

exhibited a more rapid spread, even when compared to Sample 3 (Non-FR) safety nets…the safety nets collected from Wang Chi House were completely consumed by the end of the tests” (IFITF Report §7.2.3.9 [ER1/97]). 113

1. 2. The IFITF concluded that “the use of safety nets and canvas with FR

properties is essential to effectively prevent the development and spread of fire” (IFITF Report §8.2.6.1 [ER1/130]). 298.3. The IFITF explained that “FR safety nets significantly reduced the likelihood of fire propagation by preventing secondary ignitions and self- extinguishing small fires once the external heat source was removed,” whereas “uncertified, non-FR safety nets and samples collected from Wang Chi House sustained small fire propagation and generated flaming droplets that ignited other combustible scaffolding components, such as nylon strips, toe-boards and wooden planks” (IFITF Report §8.6.1.1 [ER1/174]). 298.4. Computational fluid dynamics simulations demonstrated that in small fire size cases with FR-certified safety nets, “the fire could not sustain itself, with no rapid fire spread having occurred,” whereas with non-FR certified safety nets and samples collected from Wang Chi House, the result was “significant fire spread and severe fire development” (IFITF Report §7.3.5.2 [ER1/125]). 298.5. Dr To Chi-wing (expert witness of the FSD) also confirmed in oral evidence that had FR nets been used, the secondary ignition mechanism that spread the fire to adjacent blocks would likely not have operated [Day 26/71/16 - 72/7].

1. Canvas lacking FR properties further accelerated the fire.
2. 1. Laboratory examinations revealed that both types of canvas used at WFC

“were more susceptible to sustained burning after flame impingement than

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the safety nets, with some producing burning droplets” (IFITF Report §6.2.1.8 [ER1/81]). 299.2. The IFITF found that non-FR certified canvas used on catch-fans “allowed small fires in the re-entrant area to escalate into widespread, intense blazes capable of consuming nearly all combustibles and spreading rapidly across multiple levels” (IFITF Report §8.6.2.1 [ER1/174]), and that catch- fans “trapped flying embers, flaming droplets and burning debris” rather than performing their intended function of intercepting falling objects (IFITF Report §8.6.2.2 [ER1/174]).

1. The fire spread from Wang Cheong House to adjacent blocks through secondary

ignitions caused by wind-carried embers, flaming droplets from melting safety nets, and falling burning debris (IFITF Report §§6.2.3.1–6.2.3.3 [ER1/85]). These mechanisms operated in a combustible environment created by the renovation works: the buildings’ external walls were “surrounded by scaffolding and construction related materials” which “created a combustible ‘envelope’ enclosing the buildings and provided an abundant fuel source for the fire” (IFITF Report §6.2.3.3 [ER1/85]). Within a two-hour period, 11 instances of rapid fire spread were observed at various re-entrants across multiple buildings, and “it is conservatively estimated that more than 470 units were affected by the fire within the two-hour timeframe” (IFITF Report §8.6.5.1 [ER1/175]).

1. Wind conditions on the day of the fire were an environmental factor beyond

anyone’s control that materially amplified the spread. The average wind speed recorded at the Tai Po Kau Anemometer at 1500 hours was approximately 14 km/hr, blowing from the east to southeast (IFITF Report §7.3.2.1 [ER1/113]). Winds “intensified the fire’s progression by supplying additional oxygen to the

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flames, increasing the fire’s heat and causing it to grow more quickly and uncontrollably” (IFITF Report §6.2.3.7 [ER1/86]).

1. The wind profile also explains why Wang Chi House was the only unaffected

building: “the wind did not carry embers towards Wang Chi House, which may account for its minimal damage” (IFITF Report §7.3.2.4 [ER1/117]).

1. The three modes of fire spread were not independent phenomena but “amplified

and promoted the fire’s development through interconnected mechanisms” (IFITF Report §8.7.1 [ER1/175]). Rapid vertical spread along the re-entrant generated intense heat and flames which spread through windows and other openings or in some cases radiation ignition, transforming façade fires into interior fires; interior fires in turn ignited previously unaffected façades through the openings and windows of affected units; and burning fragments from intensifying fires ignited combustibles in nearby re-entrants, initiating new cycles of fire development.

1. The IFITF characterised this as a self-reinforcing cycle that “made containment

significantly more difficult” (IFITF Report §8.7.2 [ER1/175]). By the conclusion of the incident, this cycle had produced 12 instances of rapid vertical fire spread across 6 buildings (IFITF Report §8.7.2 [ER1/175]). G5. The IFITF’s general findings on the heavy casualties caused by the fire

1. The 168 fatalities comprised 58 males and 110 females, ranging in age from 6

months to 98 years. Notably, 114 of the fatalities were individuals aged 65 or older (IFITF Report §9.3.1.2 [ER1/195]).

1. The causes of death were attributed to adverse effects of fire (65), inhalation of

fire fumes (91), inhalation of fire fumes and burns (4), inhalation of fire fumes

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and extensive burns (4), and multiple causes (4) (IFITF Report §9.3.1.3 [ER1/195]).

1. Of the deceased, 103 were found inside residential units, 64 were discovered in

common areas or on the roof of the affected buildings, and 1 was located on the open ground outside a building (IFITF Report §9.3.1.4 [ER1/196]).

1. Wang Cheong House and Wang Tai House suffered the highest number of

fatalities, with 81 and 82 lives lost respectively (IFITF Report §9.3.2.1 [ER1/196]).

1. As mentioned above, the IFITF identified five critical factors that contributed to

the heavy casualties, working in combination to drastically compress the available evacuation window (IFITF Report §10.1.1 [ER1/203]). These are (IFITF Report §11.6 [ER1/239]): 309.1. Increased risk of entrapment due to rapid and extensive fire spread; 309.2. Fire-damaged combustible envelope blocking exits; 309.3. Failure of fire alarms; 309.4. Polystyrene window covers; and 309.5. Compromised tenability in means of escape.

1. First, the extreme rate of vertical fire spread “left residents with limited time to

react, significantly reducing opportunities for safe evacuation and increasing the likelihood of entrapment” (IFITF Report §10.2.1 [ER1/203]). The IFITF recorded that “from a very early stage, the fire behaviour had already set a critical time pressure on both evacuees and first responders” (IFITF Report

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§10.2.2 [ER1/203]). The evidence of individual residents starkly illustrates how rapidly conditions deteriorated: one resident observed that the common corridor outside her unit was free of smoke when she initially opened her entrance door at approximately 1430 hours, but “upon reopening the door a couple seconds later, she observed that the corridor was filled with dense black smoke” (IFITF Report §10.2.5.1 [ER1/204]).

1. Second, flaming bamboo scaffolding and other construction materials detached

from the upper levels during the fire, collapsing and accumulating at ground level and “resulting in flaming blockages at building entrances” (IFITF Report §10.3.1 [ER1/208]). As a result, “both escape for evacuees and access for firefighting personnel were obstructed and in turn delaying escape, rescue efforts and fire suppression” (IFITF Report §10.3.1 [ER1/208]). The front entrance and rear exit of Wang Cheong House were blocked by collapsed burning scaffolding at about 1505 and 1457 hours respectively; for Wang Tai House, the front entrance and rear exit were similarly obstructed at about 1520 and 1530 hours respectively (IFITF Report §10.3.3 [ER1/208]).

1. Third, post-fire investigation revealed that the FAS of all eight blocks were shut

down before the fire (IFITF Report §§5.4.7.1, 10.4.1 [ER1/71, 215]). As a result, “residents did not receive timely warnings, leading to delayed evacuation” and once they became aware of the fire “the means of escape might have already been exposed to smoke and heat, which contributed to the heavy casualties” (IFITF Report §10.4.1 [ER1/215]).

1. The IFITF recorded that Ms Chung Sui-ha, the security guard of Wang Cheong

House, attempted to manually activate the FAS at about 1448 hours, three minutes before the fire was officially reported to the FSD (IFITF Report §10.4.3 [ER1/215]). Her attempt was unsuccessful. The IFITF observed that had the

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system been operational, “Ms. CHUNG’s activation attempt at 1448 hours could have provided residents with a critical evacuation alert during the key escape window between 1448 hours and 1458 hours, when escape routes were still tenable” (IFITF Report §10.4.4 [ER1/215]). However, “as the FAS was not functional, residents remained unaware of the immediate danger until evacuation was no longer viable” (IFITF Report §10.4.5 [ER1/215]). The circumstances in which the FAS came to be shut down, and the responsibilities arising therefrom, are addressed in detail in Section N below.

1. Fourth, polystyrene window covers installed during the renovation worked as a

protective measure from debris obstructed residents’ view of the external environment, “potentially hindering occupants from realizing the severity of the fire in neighbouring buildings as well as their own buildings, lowering their awareness and in turn delaying their response” (IFITF Report §10.5.1 [ER1/217]). The IFITF noted that among 291 witness statements, only 43 individuals (14.7%) reported seeing fire or smoke, and among 579 questionnaires, only 48 respondents (8.3%) indicated that they had witnessed the fire. The IFITF characterised these as “surprisingly low numbers for such a large fire” and concluded that “the installation of polystyrene window covers may have significantly hindered occupants’ ability to perceive the situation outside their units, thereby delaying their escape” (IFITF Report §10.5.3 [ER1/218]).

1. In addition to obstructing awareness, the combustible polystyrene panels

“contributed to the vertical spread of the fire” and once windows were breached, “flames and smoke entered units easily and directly exposing residents to dangerous conditions” (IFITF Report §10.5.4 [ER1/218]). The combustion of polystyrene materials generated toxic gases including carbon monoxide. Toxicological reports indicated that 102 of the 168 fatalities had blood carbon

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monoxide saturation levels ranging from 15% to 80% (IFITF Report §10.5.4, fn 179 [ER1/218]).

1. Fifth, two distinct mechanisms compromised the tenability of the means of

escape. 316.1. First, the upper ventilation parts of the windows in lift lobbies on some floors were left open during the fire, allowing smoke from the burning scaffolding to enter the lift lobbies and corridors and further shortening the time available for evacuation (IFITF Report §10.6.1.1 [ER1/225]). Security camera footage from Flat 1006 of Wang Tai House shows that the common corridor on the 10th floor was clear of smoke at 1516 hours, but “due to the rapid fire spread at the re-entrant adjacent to the lift lobby window,” the same corridor “was engulfed in dense smoke within the span of one minute” (IFITF Report §10.6.1.2 [ER1/225]). 316.2. Second, some windows in staircases were replaced with movable boards as access openings to the exterior scaffolding. During the fire, “these movable boards permitted smoke and heat to infiltrate the staircases” and “severe blackening of ceilings above the opening indicated heavy smoke penetration” (IFITF Report §10.6.2.1 [ER1/225]). The consequence was that “staircases intended to serve as protected escape routes were compromised, leaving residents without safe pathways for evacuation” (IFITF Report §10.6.2.1 [ER1/225]). The evidence demonstrates the effect of this compromise at Wang Tai House: of the 38 fatalities in the staircases and common areas of that building, 28 were found inside the staircase and the cause of death for all 28 was inhalation of fire fumes (IFITF Report §10.6.2.2 [ER1/225]; Corrigendum [ER9/2755]). The IFITF attributed this outcome to “the compromised openings in the staircase ... which allowed

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smoke and heat to infiltrate” and which “rendered the staircase, intended as a protected escape route and temporary place of safety, incapable of providing a safe environment for evacuation” (IFITF Report §10.6.2.2 [ER1/225]).

1. Full-scale fire tests conducted in Sichuan confirmed that the wooden boards and

aluminium composite panels used as access opening covers at WFC were wholly unsuitable for protecting staircase openings (IFITF Report §10.6.2.4 [ER1/231]). 317.1. During the fire tests, the wooden board ignited at 4 minutes 40 seconds and the aluminium composite panel ignited at 7 minutes 49 seconds (IFITF Report §10.6.2.3 [ER1/230]). 317.2. By contrast, the fire-rated glass window “remained intact and maintained a lower interior temperature, therefore ensuring a safer environment for evacuation” (IFITF Report §10.6.2.4 [ER1/231]). 317.3. This scientific conclusion was corroborated by evidence: Ms Tse Yuk-wa, the occupant of Flat 204 of Wang Cheong House, observed during her evacuation at approximately 1455 hours “a reflection of fire immediately outside the fire-rated windows along the staircase,” providing “direct confirmation of the effectiveness of the fire-rated glass window installed along the escape staircase, which successfully served a fire separation component and prevented smoke infiltration into the staircase under fire conditions” (IFITF Report §10.6.2.5 [ER1/231]).

1. The IFITF’s analysis confirms that the combination of the five factors “critically

affected both the ASET and the RSET” (IFITF Report §10.7.6 [ER1/236]).

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1. 1. On the one hand, the rapid fire spread “developed at the re-entrants at an

exceptionally fast rate, simultaneously compromising the means of escape and causing blockages at building exits,” thereby reducing the Available Safe Egress Time (“ASET”) (IFITF Report §10.7.6 [ER1/236]). 318.2. On the other hand, the “failure of the fire alarm systems, combined with the presence of polystyrene window covers, further delayed occupant response and evacuation,” thereby increasing the Required Safe Egress Time (“RSET”) (IFITF Report §10.7.6 [ER1/236]). 318.3. The result was “an extremely limited escape window for evacuees, particularly for those occupants at Wang Cheong House and Wang Tai House,” who “were confronted with a dire situation during evacuation, as the means of escape had already been compromised at the very early stage of the fire” (IFITF Report §10.7.7 [ER1/237]).

1. The IFITF’s conclusion is appropriately expressed in the following terms: “The

fire at Wang Fuk Court on 26.11.2025 was one of the most devastating incidents in recent history, resulting in 168 fatalities, including one FS member and 79 injuries. The scale and severity of the incident highlighted critical issues related to fire safety, building management and renovation practices, requiring attention to prevent similar incidents” (IFITF Report §11.1 [ER1/238]). The IFITF also recorded that “notwithstanding the rapid fire spread, over 100 individuals were rescued” and that “special arrangements were implemented, including early activation of the DCP, strengthening of the command structure and deployment of substantial rescue resources to manage the situation as effectively as possible” (IFITF Report §11.2 [ER1/238]).

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G6. The Committee’s Independent Expert Evidence and areas of agreement

1. The Committee appointed Prof Asif Sohail Usmani and Prof Jiang Liming of the

Hong Kong Polytechnic University (“PolyU”) as independent fire engineering experts. Their expert report dated 15 June 2026 [ER3/2154-2265] sets out their independent findings based on their own experimental tests (conducted at the PolyU fire laboratory on samples provided by the Police), computational fluid dynamics simulations, and review of the available video, photographic and documentary evidence.

1. The Committee’s experts and the IFITF’s expert (Prof Yuen) have worked

independently over several months, conducting separate tests and using their own methodologies to simulate the fire.

1. Their conclusions129 are substantially consistent on all material matters.
2. During the evidential hearing on Day 27, the Committee’s two experts confirmed

that the two teams had reached substantially similar conclusions in their respective reports [Day 27/84/3-8]. By way of illustration, the following key areas of agreement were also expressly confirmed (and which bear reiteration for present purposes):

129 For completeness, the Committee’s Expert Report at §5.3.6 (Table 5.1) [ER3/2241-2242] suggests that WFC may not have been fully compliant with the Code of Practice on the Provision of Means of Escape in Case of Fire 1976. The Government does not consider there to be non-compliance: as explored in cross-examination, the lift lobby configuration of WFC complies with Diagram 8 [B16/6373] of the Code [Day 27/93/11 – 97/21]. In any event, the Chairman indicated that the Committee would not make a finding of non-compliance: “If we are going into detailed interpretation as to whether this fulfil or not, since in this particular case it doesn't make a difference, we will not make any findings on that particular question … We note that there will be a difference of interpretation by the Government and the experts. That's it. We are not going to -- since in this case it does not make a difference” [Day 27/98/5-16].

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1. 1. The lack of FR quality in the safety nets and canvases was an important

factor in the causation of fire in this instance (IC Expert Report §6.3.3 [ER3/2246]; confirmed at [Day 27/85/3 - 86/10]). 323.2. The re-entrant geometry created an uncontrolled chimney effect that was a key factor in the rapid vertical fire spread (IC Expert Report §6.2 [ER3/2245]; confirmed at [Day 27/84/13-23]). 323.3. The use of foam boards to cover windows was another important factor in the spread of fire and heavy casualties, despite their small mass (IC Expert Report §6.4.2 [ER3/2246]; confirmed at [Day 27/86/11 - 87/2]). 323.4. The alteration of staircase windows into access openings for workers was also an important factor in the spread of fire and heavy casualties (IC Expert Report §6.5.3 [ER3/2247]; confirmed at [Day 27/87/19 - 88/8]). The Committee’s experts agreed that fire and smoke infiltrated the staircases through gaps and holes in the movable boards for worker access openings, even before the boards were completely burned out, and that both wooden boards and aluminium composite panels were unsuitable for protecting staircase openings (IC Expert Report §6.5.3 [ER3/2247]; IFITF Report §10.6.2.1 [ER1/225]). 323.5. The unreported shutdown of the FAS lengthened the residents’ detection time of the fire. It was one of the contributing factors that led to heavy casualties because, together with the compromise of the means of escape through access openings and open lift lobby windows, it had reduced the time for escape of the residents in Wang Cheong House and Wang Tai House to practically zero (IC Expert Report §6.6.1 [ER3/2247]; IFITF Report §10.4.5 [ER1/215]).

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• The Committee’s experts expressly agreed with Prof Yuen’s conclusion that if

the safety nets and canvases at WFC had been fire-retardant, the initial fire may have self-extinguished and not caused the combustible materials inside the re- entrant to catch fire, so the fire might not have developed and the fire spread would have been much more minimal (IC Expert Report §6.3.3 [ER3/2245]). Prof Jiang confirmed this directly during his oral evidence when asked whether both teams agreed that the lack of FR quality in the safety nets and canvases was an important factor in the causation of fire in this instance: “Yes, correct” [Day 27/85/16]. Prof Usmani likewise confirmed: “That would be fair” [Day 27/86/10].

• Prof Yuen reached the same conclusion from his experiments. When asked

whether, assuming all other factors being equal and the only difference being that FR nets and canvas were used, the re-entrant fire at Wang Cheong House would have developed as it did, Prof Yuen stated: “According to my scientific analysis, the answer is no” [Day 26/38/3-4]. He further confirmed that with FR materials, the fire “would not be as severe” and that while it “may burn for a while, and some materials might be ignited... for the development, it would not be as severe” [Day 26/38/10-13].

• The Committee experts’ findings on the role of non-FR canvas are also consistent

with the IFITF’s conclusions. The experts noted that Tests 12 and 13 of the full- scale fire tests (which used identical safety nets from Wang Chi House but differed only in whether FR or non-FR canvas was used) yielded dramatically different outcomes: Test 12 (FR canvas) produced a peak heat release rate (“HRR”) of 0.62 MW with bamboo unaffected, whereas Test 13 (non-FR canvas) produced a peak HRR of 11.58 MW with bamboo sticks ignited (IC Expert Report §3.6.16 [ER3/2184]). The IFITF likewise concluded that “non-FR canvas accelerated fire growth, transforming limited and localized fires into a 125

widespread intense blaze with excessive heat release sufficient to ignite bamboo sticks” (IFITF Report §§7.2.3.19 & 8.6.2.1 [ER1/104 & 174]).

1. Both teams therefore agree that non-FR canvas was a critical accelerant that

transformed small localised fires into uncontrollable conflagrations.

1. In the specific context of the WFC fire, the original fire source was likely to come

from one or more cigarette. Further, the secondary fire spread from Wang Cheong House to adjacent blocks was caused by embers drifting [Day 26/62/14-19]. Those were relatively small sources of fire [Day 26/71/22-25]. As Prof Yuen put it, “When the fire started, barely anyone noticed. There were some droplets. At that point the fire was probably a small fire” [Day 26/36/20-22]. Echoing the above, Dr To Chi-wing confirmed that the small fire that came into contact with the combustibles on the flat roof outside Flats 104 and 105 of Wang Cheong House “would probably look more like the small fire scenario mentioned by Prof Yuen” [Day 26/63/10-15].

1. In contrast, even in the so-called small fire conducted by Prof Yuen’s team (with

fire size below 1.5 MW or 1,500 KW), wooden cribs with 10 wooden sticks were used as the fire source (as in all other tests) [ER1/92, Photo 7-2(a), (b); ER2- 2/1423]. There is apparently little evidence to suggest that the fire source of the WFC fire (at least at the incipient stage) exceeds the scale of the set-up in Prof Yuen’s tests, which are thus at least comparable.

1. As Prof Yuen explained, “We can talk about it at different stages. If it is a small

fire, if we assume that the combustibles have caught fire, at the incipient stage the situation would be similar because the fire started at a lower level. Even with a long shaft, the development has yet to take place. So at the initial stage it’s comparable” [Day 26/28/19-25].

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• In these circumstances, the use of FR materials would have likely caused an initial

fire to self-extinguish, thereby preventing both the primary vertical fire spread within the re-entrant and the secondary fire spread to adjacent blocks. This is borne out by Test 11 conducted by Prof Yuen [ER1/106, Figure 7-4 & Photo 7- 6(a), (b)].

• The Committee experts’ additional emphasis was directed at a complementary

point: the re-entrant geometry is inherently prone to amplifying any fire that takes hold within it, regardless of the ignition source. Their CFD simulations demonstrated that for a 50 MW fire at the base of a re-entrant, flames exceeded 100 metres in height within seconds, whereas a single flat wall produced flames of only 33 metres under identical conditions (IC Expert Report §6.2.1, Appendix A §1.4 [ER3/2245, 2270-2272]).

• Both teams’ simulations also independently confirm that once the critical HRR

threshold is exceeded, the re-entrant geometry drives exponential fire growth to the point where all combustibles are eventually consumed. The Committee experts’ simulations showed HRRs of 700–800 MW for a 31-storey building (IC Expert Report §3.7, Appendix A §1.5 [ER3/2187-2198, 2273-2275]); the IFITF’s CFD simulations produced comparable results of 755–834 MW across Cases 1 to 3 (IFITF Report §7.3.4.2 [ER1/122]).

• The Government notes that the convergence of the two independent expert teams’

conclusions, arrived at through separate methodologies, provides a robust scientific evidential foundation for the Committee’s findings on causation.

• The Government notes further Prof Usmani’s evidence that whilst he accepts that

a small fire might self-extinguish and the use of FR materials would substantially reduce the probability of exponential growth of fire, he is naturally concerned that the consequence is grave once such probability materialises [Day 27/62/15 - 63/1- 127

9]. His concern is that once a certain threshold point is reached then all combustibles including bamboo will be burnt within a re-entrant. As Prof Usmani put it, risk is the product of probability and consequence [Day 27/50/21 - 51/7]. In the ideal world, of course all measures should be taken to address both, and the Committee’s Experts advocate use of non-combustible materials only at re- entrant spaces. Prof Usmani added that, if not, he would insist that all windows facing a re-entrant should be FR windows [Day 27/63/12-16]. That said, the Committee’s Experts fairly accepted that they said so from a fire engineering point of view, while other factors such as socio-economic considerations are also at stake [Day 27/99/1-9]. Whilst the Government will give serious considerations to all these, at this juncture the Committee may note that there are various measures (or combination of measures) at play. Some of them may affect both probability and consequence, whilst others target only one (but not both). For instance, FR materials could reduce probability of a big fire as well as its consequence (i.e. even if a fire is to fully develop, it would still need more time), whereas an uncompromised staircase (without opening) limits the consequence, i.e. it does not reduce the probability of a fire but effectively averts the consequence by affording residents a safe passageway for escape, thus substantially increasing the ASET. At the end of the day, it is a balancing exercise, and the question boils down to risk assessment: see Section R5 below.

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PART III(A): ON THE FIREFIGHTING AND RESCUE OPERATIONS H. THE EVENTS FROM 26 TO 28 NOVEMBER 2025 H1. The FSD

1. The FSD is led by the DFS with the support of the Deputy Director (Operations)

(“DD(Ops)”) and Deputy Director (Public Safety and Corporate Strategy) (“DD(P&C)”). The senior management comprises 22 directorate officers, including 21 uniformed officers and one civilian officer130 [WS1/38].

1. The organisational structure at the material time provided for four Operational

Commands: the Operational Support and Professional Development Command, Ambulance Command under DD(Ops), the Corporate Strategy Command, Fire Safety Command, Licensing and Certification Command and Administration Branch under DD(P&C) 131 [WS1/38].

1. The firefighting and rescue operation at WFC involved a large number of FSD

officers across multiple ranks, units and commands. The evidence before the Committee includes witness statements and oral testimony from officers who served at every level of the command structure, from the initial attending crew to the DFS himself. DD Chan confirmed this was “the largest scale deployment ever” in the FSD’s history [Day 18/47/22 - 48/2].

1. The Incident Occurrence Log at [B13/5734-6152] contains a granular record of

the entire firefighting and rescue operation from the FSD’s perspective, including all radio messages, resource deployments, and SAR updates. The Committee may wish to refer to the same for a comprehensive account of the timing and sequence of the operational decision, deployment and communication throughout the

130 TANG Wing Wah (AD NTN, FSD) 1st WS §5 131 TANG Wing Wah 1st WS §5

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incident; the narrative that follows draws upon that record together with the witness statements and oral evidence of the officers involved.

1. In the narrative that follows, the Government draws upon the evidence of those

witnesses to present a chronological account of the operation organised by reference to the successive fire alarm levels. H2. Evidence on the firefighting operation – different phases of the WFC fire with reference to the fire alarm levels and deployment of resources (i) Breakout of the fire (No. 1 Fire Alarm)

1. At 1451 hours on 26 November 2025, the FSCC received the first fire call. The

caller reported that a fire with explosion had occurred at scaffolding installed along the external wall of Wang Cheong House132 [WS1/40]. SStnO Hui Kin-on confirmed that the information relayed was: “fire involving scaffolding on external wall with explosion occurred”133 [WS2/987].

1. Pursuant to the PDA for a No. 1 Alarm Fire [B2/2106], one Hydraulic Platform,

one Major Pump (“MP”), one Light Rescue Unit (“LRU”), one Turntable Ladder (“TL”) and one Ambulance were immediately dispatched.

1. Additionally, by reason of the contingency plan for WFC dated 13 November

2024 [B2/2642-2649], one additional MP and one additional LRU were dispatched upon receipt of the first fire call.

1. Furthermore, due to the shutdown of the FH/HR System at Wang Cheong House,

one additional MP was dispatched pursuant to the FSD Departmental Policy Instructions.

132 TANG Wing Wah 1st WS §8 133 HUI Kin On (SStnO, FSD) 1st WS §7

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• Upon receipt of more than one fire call, a further SAR team comprising one HP

and one LRU was dispatched at 1454 hours, together with one Reserve Heavy Pump134 [WS1/40].

• In total, 12 fire appliances and 1 ambulance with 61 FS members were dispatched

during the initial stage. It was stated that “the magnitude of manpower deployment at that time had already reached around 80% of the PDA for a No. 3 Alarm Fire (i.e. 79 FS members)” 135 [WS1/41].

• SStnO Hui Kin-on was the officer-in-charge of the first fire appliance (HP of Tai

Po Fire Station) to arrive at WFC. He arrived at 1456 hours (five minutes after the first call) and became the initial Incident Commander136 [WS1/40; WS2/987]. There was no copy of the contingency plan on board the fire engine, but SStnO Hui was aware of its content from having been involved in its formulation [Day 11/8/6-10]. The mobile data terminal informed SStnO Hui of a defective FSI [Day 11/6/2-23].

• Upon arrival, no fire or smoke was visible on the façade of Wang Cheong House

facing Kwong Wang Street. A passer-by led SStnO Hui to the rear façade facing Island House Lane, where the scaffolding was “well alight” from the ground floor to approximately the 8th or 9th floor, measuring approximately 8 metres in width by 30 metres in height 137 [WS2/988]. “Well alight” is a professional term indicating a serious, intense fire [Day 19/7/20-25]. The fire was therefore already of enormous scale five minutes of the first call.

• At approximately 1457 hours, SStnO Hui directed crew members to lay fire hoses

and deploy two water jets towards the lower portion of the scaffolding at the 134 TANG Wing Wah 1st WS §12 135 TANG Wing Wah 1st WS §14 136 TANG Wing Wah 1st WS §9; HUI Kin On 1st WS §5 137 HUI Kin On 1st WS §9

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exterior of Wang Cheong House facing Island House Lane. He observed that the fire was “vertically spreading upward along the scaffolding structure rapidly” and that “a large quantity of burning bamboo, wooden planks, and miscellaneous articles were falling from height of Wang Cheong House to the open ground on ground floor,”138 blocking the rear exit [WS2/990].

1. At approximately 1459 hours, SStnO Hui returned to the roundabout and

observed that the fire had already spread from the rear façade of Wang Cheong House to its west façade via flying embers. At 1500 hours, he observed fire spread from Wang Cheong House to the east façade of Wang Tai House139 [WS2/989]. DD Chan confirmed in oral evidence that this building-to-building spread within approximately 10 minutes was “unprecedented” and that in his years of experience with the FSD he had “never” encountered a situation in which “within such a short space of time so many blocks would be involved” [Day 18/30/7-18]. He agreed that “everything was unprecedented” [Day 18/30/19–22].

1. The fire appliance sirens were turned off after arrival at the scene. SStnO Hui

confirmed this was to prevent the substantial sound volume of the sirens from affecting proper communications between firefighters at the fire scene; the sirens had served its alerting function en route [Day 11/14/1-8] – particularly bearing in mind the arrival of numerous fire appliances one after another at the scene.

1. No fire alarm sounded at Wang Cheong House or any other block. SStnO Hui

confirmed he did not hear any fire alarm [Day 11/21/18 - 22/4]. He attempted to gain access to activate the break-glass unit, but both the front entrance and rear exit of Wang Cheong House were blocked by falling burning debris. As SStnO Hui stated: “I tried to ask my colleagues to get in to the building to see why there was no fire alarm. A lot of times we were the ones who activate the fire alarm

138 HUI Kin On 1st WS §14 139 HUI Kin On 1st WS §11

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system. At the rear entrance of Wang Cheong House, we couldn’t get in, and when we went to the front entrance there were many burning debris falling from height... We couldn’t get in from the front entrance so we couldn’t get into Wang Cheong House to activate the fire alarm system” [Day 11/22/4-13].

1. No representative of the PMC approached SStnO Hui or any other officer at the

scene during the period of SStnO Hui’s command [Day 11/21/10-17].

1. At 1502 hours, SStnO Hui observed rapid fire spread among different façades of

Wang Cheong House, with the mid-lower level of the east façade of Wang Tai House “well alight.” Noting that there were no evacuees from the front entrance of Wang Cheong House, and in view of the fire development and potential large number of residents trapped therein, he upgraded the fire to No. 3 Alarm so as to request additional manpower and appliances resources to the scene140 [WS2/990]. The decision was made six minutes after SStnO Hui’s arrival and 11 minutes after the first call.

1. AD Tang Wing-wah confirmed the initial firefighting tactics: two jets were

immediately deployed towards the scaffolding structures at the exterior of Wang Cheong House where the fire started and was vertically spreading, specifically at “the side where Rooms 104 and 105 are located”. At the material time, “the fire had spread to Wang Tai House” 141 [WS1/41]. This unit-specific reference cross- references the IFITF’s fire investigation findings on the point of origin addressed in Section G above.

1. At approximately 1503 hours, immediately after upgrading to No. 3 Alarm,

SStnO Hui received a message from the FSCC of an assistance call at Room 2701 of Wang Cheong House. He ordered PStnO Liao Kong-lap, officer-in-charge of

140 HUI Kin On 1st WS §12 141 TANG Wing Wah 1st WS §15

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the Sha Tin Major Pump, to handle this assistance call. PStnO Liao then instructed PFn Chan Chun-man, officer-in-charge of the Sha Tin Light Rescue Unit to organise the rescue, who in turn instructed SFn Ho, Fn Yeung Ching and Fn Siu Tsz-ho to respond142 [WS2/990; WS15/2186 & 2190]. This is the direct chain of instruction leading to SFn Ho’s entry into the fire, addressed in detail at Section H6(i) below. (ii) No.3 Fire Alarm (including setting up of the Director’s Command Post)

1. At 1519 hours, ADO Cheung Lok-hang arrived at the scene and took over as

Incident Commander143 [WS2/995]. Upon arrival, he observed that the northwest façade of Wang Cheong House and east façade of Wang Tai House were “well alight”, that the fire had spread to Wang Shing House with its southwest façade (middle to upper floors) also alight, and that burning bamboo sticks and debris were continuously falling from Wang Cheong House144 [WS2/995].

1. At approximately 1523 hours, ADO Cheung met SStnO Hui at the roundabout

near Wang Tai House. SStnO Hui reported firefighting and rescue operations in progress at Wang Cheong, Wang Tai and Wang Shing Houses, and reported that a Mayday message was received at approximately 1522 hours via radiotelephone. The message content was muffled; the identity of the distressed member and building location could not be confirmed from the message145 [WS2/996].

1. In response to the Mayday message, SStnO Hui formed four Emergency

Response Teams, with crew members of TP/MP and TP/HP directed to apply water jets to the front entrance of Wang Cheong House to suppress the fire and clear an access as quickly as possible for the rescue operation. A fifth Emergency

142 HUI Kin On 1st WS §13 143 CHEUNG Lok Hang (Stn Cmdr Tai Po, FSD) 1st WS §6 144 CHEUNG Lok Hang 1st WS §6 145 CHEUNG Lok Hang 1st WS §7

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Response Team (“ERT”) was subsequently formed on PStnO Liao’s request after Liao confirmed that the Mayday sender was SFn Ho of ST/LRU146 [WS2/991- 992]. The ERTs could not enter Wang Cheong House as both its front entrance and rear exit were blocked by burning bamboo sticks and debris147 [WS2/1001].

1. At 1529 hours, DO Lam Ho-chun arrived at Tai Po Baptist Public School inside

WFC and took over as Incident Commander of the No. 3 Alarm Fire. At the material time, DO Lam noted that fire had scattered on the middle and upper portions of the scaffoldings installed along the external walls of the east façade of Wang Sun House and southeast façades of Wang Kin House and Wang Shing House, whilst fire had spread along the scaffoldings on the southwest façade of Wang Cheong House and east façade of Wang Tai House148 [WS2/1000-1001].

1. Simultaneously with the No. 3 Alarm at 1520 hours, the DFS activated the

Director’s Command Post (“DCP”) at Tier 2 Response and mobilised approximately 80 uniformed members from non-operational units to establish a Support Centre with 18 dedicated hotlines149 [WS1/44]. In light of the rapid development of the fire and continued increase in assistance calls, DCP prioritised the immediate augmentation of rescue manpower: two additional Search and Rescue (“SAR”) teams were deployed through the FSCC at 1520 hours, four additional SAR teams at 1533 hours, and four further SAR teams at 1548 hours (totalling 10 additional SAR teams comprising 20 fire appliances with 105 FS members, all dispatched on the Director’s instruction) 150 [WS2/1016]. All 10 additional SAR teams were dispatched during the No. 3 Alarm period, before the No. 4 upgrade at 1534 hours.

146 HUI Kin On 1st WS §§19-21 147 LAM Ho Chun (Dep. Div. Cmdr NTE) 1st WS §7 148 LAM Ho Chun 1st WS §§5-6 149 TANG Wing Wah 1st WS §28 150 FOK Chun Ming (DCFO Corp Strategy, FSD) 1st WS §9

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• At 1534 hours, in view of the rapid fire spread at Wang Cheong House and Wang

Tai House, and the fire development at Wang Shing House, Wang Kin House and Wang Sun House, Lam upgraded the fire to No. 4 Alarm. He simultaneously tasked ADO Cheung to continue firefighting operations at Wang Kin House and Wang Sun House, ADO Chow Tsz-ho to assist with the Mayday rescue operation, and SSO Hui to tackle fire at Wang Shing House, Wang Cheong House and Wang Tai House and to gain clearer access for the ERTs into Wang Cheong House151 [WS2/1002].

• At approximately 1545 hours, a massive collapse of ignited scaffolding sent a

torrent of burning bamboo sticks and debris cascading onto the open ground between Wang Cheong House and Wang Tai House. Lam made an immediate call to pull back all crew members from the impact zone. In approximately 30 seconds, crew members resumed firefighting operations with three jets in use at the open ground between the two buildings152 [WS2/1002].

• At approximately 1538 hours, DCFO(NTN) Wong King-man, having arrived at

the scene at 1535 hours, directed the FSCC to collaborate with the Public Safety and Communication Division to issue a Special Announcement via press release and FSD social media to alert the public about the fire 153 [WS2/1007]. At approximately 1539 hours, DCFO(NTN) Wong observed six buildings ablaze: Wang Shing House (southwest façade), Wang Cheong House (multiple façades, well alight), Wang Tai House (multiple façades, well alight), Wang Kin House (southwest façade), Wang Sun House (south façade) and Wang Tao House (middle-upper portion, southwest façade). The fire had just spread to Wang Tao 151 LAM Ho Chun 1st WS §8 152 LAM Ho Chun 1st WS §9 153 WONG King Man (DCFO NTN, FSD) 1st WS §7

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House. DCFO(NTN) Wong immediately ordered the attendance of three additional TLs154 [WS2/1007].

1. The No. 3 Alarm firefighting tactics included three additional jets deployed at the

open ground outside Wang Cheong and Wang Tai Houses, and two jets deployed to Wang Kin and Wang Sun Houses. Two TLs were dispatched: the first arrived at 1504 hours and was positioned at the roundabout to suppress fire spread among Wang Cheong, Wang Tai and Wang Shing Houses; the second arrived at 1523 hours and was strategically repositioned to Tai Po Road near Wang Tai House155 [WS1/42]. Once the No. 3 Alarm was raised, the FSCC also deployed Compartment Fire Specialists, High-rise Building Firefighting Specialists, a BA Unit with specialists to monitor overall BA operations, and a Communications Support Team to maintain effective radio communication and battery checks156 [WS1/45]. (iii) No.4 Fire Alarm

1. DCFO(NTN) Wong King-man assumed the role of Incident Commander of the

No. 4 Alarm Fire at 1550 hours, upon boarding the Mobile Command Unit (“MCU”) of Tsim Sha Tsui Fire Station. He immediately requested the MCU crew to provide a map detailing the names of the buildings at WFC to assist with planning the Incident Command System157 [WS2/1008].

1. At approximately 1600 hours, the Water Supplies Department (“WSD”) opened

all relevant government water main valves, achieving a continuous water pressure of 7 to 7.5 bar at WSD street hydrants near WFC. This was significantly above the FSD’s minimum requirement of 1.7 bar, by a factor of 3.1 to 3.4 times. AD

154 WONG King Man 1st WS §8 155 TANG Wing Wah 1st WS §21 156 TANG Wing Wah 1st WS §29 157 WONG King Man 1st WS §11

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Tang confirmed that “the availability of water from those street hydrants did not pose a limitation on FSD’s firefighting efforts”158 [WS2/967].

1. At 1610 hours, DD Chan arrived at the scene. The fire had already spread to seven

of the eight residential buildings, with Wang Chi House being the only block not yet directly involved by flame, and assistance calls were surging from multiple blocks. DD Chan promptly confirmed with DO Lam that occupants were evacuating from all blocks (with the help from the Police as per the usual understanding between the FSD and Police), and confirmed with the duty Senior Station Officer (Control) that the deployed manpower at that time (269 FS members) had already exceeded twice the PDA for a No. 5 Alarm (110 FS members)159 [WS8/1924].

1. At 1618 hours, AD Tang took over as Incident Commander from DCFO(NTN)

Wong King-man. At 1623 hours, AD Tang assigned DCFO(NTN) Wong to take over the role of Rescue Officer and take charge of the overall Search and Rescue operations. AD Tang confirmed that assigning a DCFO to the Rescue Officer role was a first-ever initiative, reflecting the unprecedented scale of the SAR operation160 [WS2/968-969].

1. At 1635 hours, DD Chan instructed AD Tang to implement a building-by-

building command strategy by setting up eight operation sectors (Ops 1 to 8), each corresponding to one of the residential buildings, each to be commanded by a Senior Officer responsible for firefighting, with one additional Senior Officer in each sector dedicated as SAR leader161 [WS8/1924].

158 TANG Wing Wah 2nd WS §6 159 CHAN Derek Armstrong (DD Ops, FSD) 1st WS §11 160 TANG Wing Wah 2nd WS §§10-12 161 CHAN Derek Armstrong 1st WS §12

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• AD Tang assigned specific SDOs and DOs to each block to lead and oversee the

firefighting operations thereat: Wang Shing House (SDO Wong Wang-leong), Wang Cheong House (DO Cheng Chun-kit), Wang Tai House (SDO Lai Wai- hei), Wang Kin House (DO Lam Ho-chun), Wang Sun House (DO Lai King- leung, acting), Wang Tao House (DO Wong Chun-on), Wang Yan House (SDO Ho Chun-pong), and Wang Chi House (DO Chow Chin-choi for precautionary intervention) 162 [WS2/969]. The allocation of precautionary intervention to Wang Chi House (the only unaffected block) was a proactive decision that may have contributed to its remaining the sole building spared by the fire.

• At 1534 hours, a total of 48 fire appliances and 13 ambulances with 269 FS

members had been dispatched to the scene. The deployed manpower had already reached approximately twice the PDA for a No. 5 Alarm Fire 163 [WS1/45]. Within approximately one hour of the fire outbreak (by 1551 hours), three TLs had arrived; within another half-hour (by 1621 hours), six TLs were at the scene; and before the No. 5 Alarm was raised, seven TLs were deployed at strategic locations along the EVA of WFC, Tai Po Road (Yuen Chau Tsai), Island House Lane and Yuen Shin Road164 [WS1/46]. (iv) No.5 Fire Alarm

• DD Chan upgraded the fire to No. 5 Alarm at 1822 hours. By that time, assistance

calls had escalated to 82 units, and a total of 171 FS appliances with 718 FS members had been dispatched to WFC, with every building under the charge of designated Senior Officers for both firefighting and SAR operations. His written witness statement165 [WS8/1930-1931] explains the rationale for the upgrade in 162 TANG Wing Wah 2nd WS §15 163 TANG Wing Wah 1st WS §32 164 TANG Wing Wah 1st WS §34 165 CHAN Derek Armstrong 1st WS §24

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terms that make clear it was driven by command-structure considerations rather than resource inadequacy: “At the time of my arrival at 1610 hours on 26.11.2025, the manpower at scene (269 FS members) had already exceeded twice the PDA for a No. 5 Alarm (110 FS members), and by 1822 hours a total of 116 fire appliances and 55 ambulances with 718 FS members had been despatched, such that the cumulative manpower deployed already exceeded 6.5 times the PDA for a No. 5 Alarm... I considered it appropriate to upgrade the fire to No. 5 Alarm at 1822 hours and assume overall command as Incident Commander, so as to provide a clearly defined strategic command for the whole scene and to ensure that firefighting and SAR operations across all sectors were coordinated under a single incident-wide framework”

1. The pattern is consistent across all three upgrade decisions: actual deployment

ran well ahead of the formal alarm level. As AD Tang confirmed in his oral evidence: “Each officer at their respective post will know what resources they need and they can make the request directly... Colleagues at their respective posts will do their best instead of being classified in their approach” [Day 19/32/15– 33/21].

1. When asked whether “if the incident commander is of the view that they require

additional resources, say, for example, turntable ladders, regardless of the number of alarm, they can make that request,” AD Tang confirmed: “Yes. There are colleagues at different positions. At each block there is the sector officer, rescue officer and the incident commander. So each officer at their respective post will know what resources they need and they can make the request directly” [Day 19/32/25 - 33/5]. He further confirmed that in addition to the automatic PDA upon alarm escalation, “colleagues will, after taking into account the actual

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situation, ask for additional resources or additional appliances or reinforcement” [Day 19/33/16-21]. The Chairman confirmed his understanding of the design: “Every time when there was an upgrading of the level of alarm, you had established procedures as to the number of appliances to be deployed and therefore the commander at the scene already knew the number of appliances would be sent” [Day 19/28/21-25]. The effect of this established mechanism was that no officer needed to await a formal alarm upgrade before requesting specific resources.

1. At 2230 hours on 26 November, a cumulative total of 221 FS appliances and 989

FS members had been dispatched, approximately nine times the PDA for a No. 5 Alarm Fire. At that material time, the appliances and manpower of the Fire and Rescue Corps of Guangdong Province were known to be present at Liantang Port. DD Chan assessed that additional manpower support from them was not required, for reasons of scene capacity and operational incompatibility addressed in detail at Section O6(v) below.

1. Several unprecedented operational initiatives were implemented during the No. 5

Alarm period. AD Tang’s evidence records that these included: the DCP being activated at Tier 2 and led by AD(CS) at the very initial stage; both DD(Ops) and DD(P&C) proactively responding to the scene and EMSC respectively; the Support Centre making approximately 1,500 call-back calls; the assignment of a DCFO as Rescue Officer; the assignment of SDO or DO to lead both firefighting and SAR operations for all individual buildings; the deployment of AD(NTS) to monitor operational safety issues; the deployment of DCFO(FS) to facilitate SAR communications; and the presence of 25 Senior Officers and Directorate Officers

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at the scene by 2100 hours on 26 November, including ranks from DO through to Director166[WS1/50-52]; IFITF Report §5.4.6.1 [ER1/69-70]. (v) Handover of command at 0935 hours on 2025.11.27

1. DD Chan served as overall Incident Commander from 1822 hours on 26

November through the overnight period to 0935 hours on 27 November, over 13 hours of continuous command. At 0935 hours, he handed over to DD(P&C) Wong Ka-wing. At 2100 hours on 27 November, DD Chan returned to WFC and resumed the role of Incident Commander167 [WS8/1929-1930].

1. Proactive measures to sustain the prolonged operation included: a reserve of

approximately 220 BA cylinders maintained at the BA Main Control; compact portable pumps stationed at the staging area for immediate deployment to various sectors; Unmanned Aerial System (“UAS”) aerial surveillance from 1615 hours; special manpower relief arrangements with officers called in 1.5 hours early and coaches arranged to convey fresh crews to the scene at 0900 hours on 27 November; and the establishment of a temporary on-site mortuary coordinated with the Chief Ambulance Officer upon the discovery of multiple casualties168 [WS8/1927–1928]. (vi) Declaration of the fire being “surrounded”, “under control” and delivery of the “STOP” message

1. “Fire surrounded” was declared at 2131 hours on 27 November 2025. At that

time the FSCC recorded assistance calls for 355 locations, with 320 locations (90.1%) successfully attended by FS members169 [WS8/1929].

166 TANG Wing Wah 1st WS §50 167 CHAN Derek Armstrong 1st WS §§21-22 168 CHAN Derek Armstrong 1st WS §§17-19 169 CHAN Derek Armstrong 1st WS §22

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• “Fire under control” was declared at 0315 hours on 28 November 2025. Among

the assistance calls for 364 locations, 356 had been attended by FS members, with 129 FS appliances and 541 FS members deployed170 [WS8/1930].

• The “STOP” message was delivered at 1018 hours on 28 November 2025,

meaning further mobilisation of resources was no longer required. At that time 143 FS appliances and 635 FS members remained in attendance. As DD Chan explained: “We were dealing with a couple of things. For the affected units, we still had to spray water on them to prevent reignition. There were still officers on the scene and we had to keep an eye on the conveyance of the deceased. Firefighters would also be going upstairs to conduct thorough searches to make sure that we could locate all the deceased ones” [Day 18/47/12-21].

• The total duration of the firefighting operation, measured from the first fire call

at 1451 hours on 26 November 2025 to the delivery of the “STOP” message at 1018 hours on 28 November 2025, was approximately 43 hours. H3. Evidence on the rescue operation (i) Handling of 999 calls since the first call received

• The FSCC received the first fire call at 1451 hours. Upon receipt of more than

one fire call, a SAR team was dispatched at 1454 hours pursuant to the established protocol: a SAR team is automatically dispatched when a building fire is reported by two or more callers, comprising one pumping appliance and one rescue appliance, together with one Reserve Heavy Pump equipped with a PPV Blower and one ambulance171 [WS1/40; WS1/61]. 170 CHAN Derek Armstrong 1st WS §23 171 TANG Wing Wah 1st WS §8; WONG Sze Lut, Sunny (DCFO OSPD, FSD) 1st WS §5.1.2

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• Upon receipt of the fourth assistance request, the FSCC dispatches an additional

SAR team comprising two fire appliances, as well as one MCU, and allocates an additional talk group exclusively for SAR operations172 [WS1/62]. Given the speed of call accumulation on 26 November, the MCU was effectively triggered at a very early stage of the incident.

• The standard procedures for handling assistance requests comprise three steps:

first, console operators collect essential information from the caller, including the location of persons requiring assistance, the number of persons along with their gender and age, and a contact phone number; second, all assistance requests are recorded in the Computer Mobilising System and relayed to the SAR Team Leader immediately; third, if the caller has doubts about evacuation, appropriate safety advice is provided173 [WS1/62]. Essential information is disseminated to the Incident Commander, SAR Team Leader and officer-in-charge of the MCU via FSD Messenger, the Department’s internal instant messaging application174 [WS1/62-63].

• The Support Centre established at 1520 hours on the DFS’s instruction was

separate from the 999 call system operated by the Police. Its function was to assist the FSCC in implementing the Call-back Mechanism thereby enabling the FSCC to maintain focus on receiving and handling incoming emergency calls while ensuring that callers who had reported their need for assistance would continue to receive attention and guidance in the changing circumstances175 [WS2/1023]. Upon termination of the three-way call involving the caller, FSCC and Police Control and Command Centre (“PCCC”), the Support Centre would call the caller back periodically to obtain updates on their situation and provide ongoing 172 WONG Sze Lut, Sunny 1st WS §5.1.4.1 173 WONG Sze Lut, Sunny 1st WS §5.1.3.1 174 WONG Sze Lut, Sunny 1st WS §5.1.5 175 WONG Sze Lut, Sunny 3rd WS §4.1.1

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safety advice176 [WS1/44; WS2/1023]. In total, approximately 1,500 call-back phone calls were made by the Support Centre to update the conditions and locations of affected residents 177 [WS1/51] [B13/1] [B15/1]. The Chairman specifically commended this mechanism at the hearing, observing that “callback is quite useful, as proven by this experience” [Day 12/108/12-16].

1. Despite the surge in the volume of calls after the fire broke out, with the

establishment of the Support Centre, the FSCC was able to answer calls within an average of one minute for the rest of the day178 [WS1/164].

1. The Government acknowledges, however, that the large volume of duplicated

calls “did cause difficulties to operations, underscoring the importance of effective filtering and streamlining processes in managing high-demand incidents” 179 [WS1/165]. The 4th Generation Mobilising System to be upgraded, currently in testing, will automate the transmission of assistance request information to all parties simultaneously, eliminating the manual steps of photographing and transmitting screen information that characterised the operation on 26 November 2025180 [WS1/166].

1. At 1520 hours, the DCP directed deployment of two additional SAR teams; four

more at 1533 hours; four more at 1548 hours — totalling 10 additional SAR teams comprising 20 fire appliances with 105 FS members, all dispatched on the DFS’s instruction during the No. 3 Alarm period 181 [WS2/1016]. The proactive augmentation of SAR resources by the DCP significantly pre-dated the formal alarm escalation to No. 4 at 1534 hours.

176 TANG Wing Wah 1st WS §28; WONG Sze Lut, Sunny 3rd WS §4.1 177 TANG Wing Wah 1st WS §50.3 178 WONG Sze Lut, Sunny 2nd WS §4.5.1 179 WONG Sze Lut, Sunny 2nd WS §4.7.4 180 WONG Sze Lut, Sunny 2nd WS §4.8.2 181 FOK Chun Ming 1st WS §9

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(ii) Evacuation at the early stages of the fire, in particular the status of the fire alarms at each of the eight blocks

1. The FAS failed to activate in seven of the eight buildings; only Wang Sun

House’s FAS was “momentarily actuated at the incipient phase of the fire” [B11/5643]. AD Tang confirmed that “during the fire, the manual fire alarm systems failed to be activated in 7 out of 8 buildings and hence affected the evacuation of residents in those buildings”182 [WS1/56]. This was identified as one of the principal challenges delaying evacuation.

1. Crew members were sent to Wang Kin, Wang Sun and Wang Tao Houses to break

the break-glass units and activate the FAS, but this failed. SStnO Hui confirmed: “I asked the crew members to turn on the fire alarm system of other blocks. There were crew members who have entered Wang Kin, Wang Sun and Wang Tao House to break the break-glass unit to turn on the fire alarm system, but in vain. At that time I realised that the FAS of Wang Fuk Court was problematic.” He estimated this realisation came “at around 3.35, 3.40 pm” [Day 11/43/11-20].

1. Over 250 residents from different buildings self-evacuated to the ground floor

with the assistance of the Police and FSD. AD Tang clarified that this figure was “a sum of all the best estimates that the initial attending officers were able to make while they were also carrying out their own operational duties during the initial stage of the fire against the urgent and everchanging situation at the time”183 [WS2/976]. It is a visual estimate under operational pressure, not a precise count.

1. At the early stage of the fire, as the FSD’s first attending crews were largely

engaged in firefighting operations and clearance of obstructions at the entrances and exits of various buildings, particularly at Wang Cheong House and Wang Tai

182 TANG Wing Wah 1st WS §63 183 TANG Wing Wah 2nd WS §35

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House, assistance was sought from the Police to assist in evacuation. Police personnel used the Public Address system in police vehicles and loudhailers to urge residents to evacuate, and evacuees were guided to places of safety on the ground level by the combined efforts of both the FSD and Police personnel184 [WS6/1861]. Specifically, 13 officers of PTU X4 entered Wang Chi House and Wang Yan House between approximately 1613 and 1640 hours to assist in the evacuation of residents from upper floors, successfully evacuating nine residents 185 [WS17/2204-2207]. The FSD was informed of these evacuation initiatives186 [WS17/2205]. In addition, at approximately 1604 hours, the Police deployed a drone (DJI Matrice 30T) from the rooftop of the WFC car park, which was used to conduct aerial surveillance of the fire scene with live-streaming to the New Territories North Command Centre and simultaneously broadcast evacuation messages in Cantonese, urging WFC residents to evacuate.187

1. The Emergency Alert System (“EAS”) was considered but not used. DD Chan

explained that he “considered the EAS unsuitable for this incident because, at the material time, this situation required localised, one-on-one communication with specific residents in the affected buildings rather than broadcast to the general public due to the unpredictability of the dynamic fire development. This specific

184 TANG Wing Wah 3rd WS §7 185 CHEUNG Lui (PTU X Cmdr, Police) 1st WS §§4-7. In addition to the 13 officers of PTU X4 (Column 1-2) mentioned at CHEUNG Lui’s 1st WS, 4 more officers of PTU X4 (Column 3) also assisted in the evacuation by attending the 9th, 10th, 14th and 15th floors of Wang Yan House, though yielding no results: see the police witness statements of SGT , SGT , PC and PC [7th Lists of Content submitted to the Committee by the Police, Part IX-A1-62, Part IX-A1-63, Part IX-A1-81, Part IX-A1-82]; and one officer of EU NTN attended Wang Tai House to assist the evacuation of a resident upon request by her family member: see the police witness statement of PC 7th Lists of Content submitted to the Committee by the Police, Part IX- A1-38. 186 CHEUNG Lui 1st WS §7 187 Police witness statements of SIP Liu Wai-keung and SIP Li Shing-hon [5th Lists of Content submitted to the Committee by the Police, Part IX-A1-4 and Part IX-A1-7], SGT and PC 7th Lists of Content submitted to the Committee by the Police, Part IX-A1-16 and Part IX-A1-26.

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need was met effectively by the Support Centre, which made approximately 1,500 callback phone calls”188 [WS8/1933].

1. The safety advice given to callers was provided on a case-by-case basis, tailored

to the specific details each caller provided. As DCFO(OP) Wong Sze-lut, Sunny confirmed, the guiding principle was to avoid smoke: “If there is heavy smoke outside the unit, the caller will be advised to remain calm inside and seal the door gaps. On the other hand, if the corridor is clear of smoke, the caller will be advised to leave quickly using the nearest smoke-free staircase”189 [WS1/162].

1. The overriding aim was to ensure safe egress from the fire scene; the FSD did not

specify particular evacuation routes or designate refuge locations within the building, as fire and smoke conditions could change rapidly190 [WS2/1024]. As to whether the rooftop was an advisable place of refuge, DCFO(OP) Wong confirmed there was “no hard and fast rule” — while the fire resulted in fatalities on rooftops, some casualties were also successfully rescued from rooftops191 [WS2/1024]. (iii) The rescue operation

1. The fundamental principle governing SAR operations was operational feasibility

— specifically, whether prevailing conditions permitted SAR teams to safely access the locations where individuals required assistance. DCFO(NTN) Wong identified four primary determining factors: the status of firefighting progress; the availability of safe access and egress routes; the structural integrity and safety of the affected areas; and the clarity of the location information provided by the caller 192 [WS2/1010]. Order of receipt of assistant calls was not the only

188 CHAN Derek Armstrong 1st WS §28 189 WONG Sze Lut, Sunny 2nd WS §4.3.2 190 WONG Sze Lut, Sunny 3rd WS §4.2.1 191 WONG Sze Lut, Sunny 3rd WS §4.2.2 192 WONG King Man 1st WS §15

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consideration at the time; the SAR teams actively prioritised their deployment decisions based on operational feasibility.

1. Rescue resources were prioritised for the most severely affected blocks; fewer

resources were allocated to less-affected blocks such as Wang Chi House. By way of illustration, as DCFO(NTN) Wong confirmed: “Wang Chi, we did not deploy as much resources/manpower to Wang Chi House, because it’s somewhat untouched” [Day 11/114/11-20].

1. SAR teams made multiple attempts to surpass the floors undergoing firefighting

to effect rescue on upper floors. DCFO(NTN) Wong confirmed that “despite challenges from flames, heat, and dense smoke, SAR teams would and did take risks to advance whenever opportunities arose” 193 [WS2/1011]. AD Tang confirmed that “the SAR teams accepted heightened risks at times advancing through burning floors or delaying the use of Breathing Apparatus to expedite their ascent”194 [WS6/1866]. DD Chan further corroborated this, noting instances where “SAR team members accepted heightened levels of risk in order to reach persons reported in distress, including advancing through burning floors or delaying the use of BA while moving upward through staircases filled with hazardous gases”195 [WS8/1935].

1. Prior to Sector Officers assuming their roles, the firefighting and SAR teams had

already undertaken snatch rescue attempts at various buildings. AD Tang recorded a specific example: “a first responding officer entered Wang Cheong House and attempted to conduct snatch rescues and evacuate residents. However, the officer was compelled to retreat upon reaching the half-staircase landing of the front staircase due to intense heat and smoke conditions and narrowly

193 WONG King Man 1st WS §17 194 TANG Wing Wah 3rd WS §16 195 CHAN Derek Armstrong 1st WS §33

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avoided being unable to withdraw when the front entrance of Wang Cheong House was subsequently blocked by fallen debris and engulfed in flames”196 [WS6/1866]. Separately, CCTV footage from the entrance of Wang Tai House [C6/1] played at the evidential hearing [Day 18/69/1-4], showed that at approximately 1516 hours FSD personnel entered Wang Tai House but were compelled to retreat almost immediately. These incidents illustrate how rapidly conditions deteriorated.

1. At approximately 1540 hours, the first team cleared a narrow access route into

Wang Cheong House on the ground floor and rescued three unconscious residents from the ground-floor lobby — notwithstanding that the front entrance was being progressively obstructed by descending burning debris197 [WS6/1866; WS1/57]. This was the first confirmed internal rescue, achieved 49 minutes after the first call.

1. Senior Officers assumed their designated roles as Sector Officers starting from

approximately 1630 hours. The incremental approach with tactical advancement strategy had been initiated at the outset and was consistently maintained throughout. At approximately 1730 hours, an access route to the 2nd floor became available in Wang Cheong House, and the SAR teams took the opportunity to rescue three residents in a unit on a lower floor198 [WS6/1867]. A turntable ladder was deployed to rescue three residents from Unit 202 of Wang Cheong House from outside the building [B10/5161; Day 19/19/22 - 20/17]. AD Tang explained that this rescue operation involved positioning the turntable ladder on a road that was not an EVA and extending the arm horizontally over a considerable distance

196 TANG Wing Wah 3rd WS §17 197 TANG Wing Wah 3rd WS §§16-18; 1st WS §64 198 TANG Wing Wah 3rd WS §§19-20

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to reach the unit, with the loading alarm activating during the operation, requiring the residents to be rescued one by one [Day 19/20/1-17].

1. At Wang Tai House, at approximately 1930 hours and 2100 hours on 26

November, crews identified and acted upon rescue opportunities, conducting snatch rescues on the 10th floor and 14th floor respectively while fire on lower floors was still severe199[WS6/1867].

1. In the whole operation, more than 100 persons were rescued from various

locations in the affected buildings. Apart from attending the 347 units reported as requiring FS assistance, all remaining units on all floors of all affected buildings were attended by FS members to check for possible casualties200 [WS1/49]. H4. Evidence on the challenges and difficulties faced by the FSD frontline officers

1. The operational difficulties and challenges at WFC can be grouped under four

heads, each of which connects to the key contributing factors addressed below.

1. The first challenge was the falling of bamboo scaffolding blocking entrances and

EVA. Large quantities of burning bamboo, wooden planks and miscellaneous articles continuously fell from height from Wang Cheong House and Wang Tai House, piling up at ground level, blocking front entrances and rear exits of both buildings at the initial stage, engulfing ground-floor lobbies in flames, and severely hindering both resident escape and firefighter access. 407.1. AD Tang recorded that the “process was challenging because fallen objects continued to reignite and advances made through the debris continued to be closed off by more fallen objects,” and that “two firefighters working on

199 TANG Wing Wah 3rd WS §20 200 TANG Wing Wah 1st WS §47

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the periphery were injured by falling objects and required treatment in hospital” 201 [WS1/53-54]. In oral evidence, AD Tang confirmed that falling debris also covered the EVA between the blocks, rendering the designated turntable ladder positions inaccessible. He explained that “in most of the buildings there are EVAs” but that “they have already been covered by debris and other things, and therefore the only location where we can position our TLs... such locations might not no longer be available” [Day 19/22/13-25]. He confirmed that the requirement for EVAs is that they must “be at a distance of no more than 10 metres away from the block” with appropriate loading for fire appliances, but that falling bamboo sticks and debris prevented appliances from accessing these positions [Day 19/22/15 - 24/20]. As a consequence, turntable ladders were positioned on roads around WFC rather than at their designated EVA locations [Day 19/23/1-3]. 407.2. Falling debris also covered part of the EVA, preventing turntable ladders from being positioned at their EVA-designated locations. The operational consequences of this were illustrated by the rescue at Unit 202 of Wang Cheong House described above: because the turntable ladder could not be positioned at the designated EVA close to the building, it had to be deployed on a road further away, requiring the arm to extend horizontally beyond its normal operating angle to reach the unit. AD Tang concluded that “given turntable ladders had already been deployed at available strategic positions for external firefighting around Wang Fuk Court and the EVA near the buildings became inaccessible due to fallen burning scaffolding materials and debris, further reinforcement of turntable ladders, regardless of their operational height, would not have effectively

201 TANG Wing Wah 1st WS §54

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met the operational objectives”202 [WS6/1873]. Two fire appliances were also damaged by falling debris during the operation203 [WS6/1865].

1. The second challenge was heavy smoke and extreme heat penetrating buildings

via access openings at staircases. 408.1. The fire “spread rapidly into different parts of the buildings through windows of units and corridors suspected to be covered with polystyrene boards and the modified worker access points on staircases, resulting in ignitions and smoke-logging of multiple units and floors simultaneously”204 [WS1/54]. 408.2. Even worse, “the fire could spread with heavy black smoke rushing into the staircases through the modified worker access points on various floors” 205 [WS1/54]. 408.3. Corridors and staircases, the primary escape routes for residents and access routes for firefighters, were invaded by smoke and flames from the exterior at an early stage, in circumstances where the staircase design “should effectively block flame and smoke during fire, with smoke stop doors and fire resisting construction providing sufficient protection” 206 [WS1/55]. In this fire, however, “staircases were invaded by smoke and flames from the exterior early on that resulted in high temperature, dense smoke and very low visibility at the access routes within the buildings, making firefighting operations extremely difficult” 207 [WS1/55].

202 TANG Wing Wah 3rd WS §39 203 TANG Wing Wah 3rd WS §15 204 TANG Wing Wah 1st WS §55 205 TANG Wing Wah 1st WS §55 206 TANG Wing Wah 1st WS §57 207 TANG Wing Wah 1st WS §57

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1. 4. Firefighters advancing to upper floors found that reignition occurred in

lower levels, “potentially cutting off the retreat routes and making firefighters more dangerous,” requiring them “to move repeatedly between different floors for firefighting” 208 [WS1/47].

1. The third challenge was the failure of all fire alarms and impairment of the FH/HR

System. 409.1. The FH/HR System in the affected buildings were under repair and the associated pumps were non-functional during the fire. Water fed from pumping appliances through FS inlets on the ground floor “could not be effectively boosted up by the FH/HR systems to the upper floors (i.e. around 20–23/F upwards) for very effective firefighting”209 [WS2/974]. 409.2. To address this, numerous compact portable pumps (approximately 80 kg each) were deployed for water relay to upper floors. As AD Tang explained: “Bringing the compact portable pump (about 80 kg) to the upper floors, in addition to our basic personal protective equipment (about 23 kg), requires considerable physical effort from our frontline crews” 210 [WS2/974]. In oral evidence, AD Tang provided a more precise account of the operational constraint: without the building’s own booster pump, relying solely on the major pump, “the fire hose could still produce water up to the 20th floor. So for floors above the 20th floor, we needed to use portable pumps to pressurise the system so that the water could be used to put out the fire on floors above the 20th floor” [Day 19/18/4-11]. The portable pumps therefore needed to be transported “about 10-odd floors” up staircases that were only “1 metre wide” and “pitch dark” [Day 19/17/17-18/14]. When

208 TANG Wing Wah 1st WS §36 209 TANG Wing Wah 2nd WS §31 210 TANG Wing Wah 2nd WS §31

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asked whether the deactivation of the FH/HR System caused significant impact to the operation, AD Tang confirmed: “There was an impact, but it could be overcome. Yes. An impact that could be overcome” [Day 19/18/18-19].

1. The fourth challenge was the unprecedented simultaneous multi-block external

façade fire. The fire quickly spread upward through the re-entrant, trapping hot air, flames and flammable gases, allowing them to rise rapidly from lower to upper floors within individual blocks before spreading laterally to adjacent blocks due to unfavourable weather conditions. On the day of the fire, an east to southeast wind was blowing at about 14 km/hr at Tai Po Kau wind station, relative humidity of 40% was recorded at 1500 hours, and the Hong Kong Observatory issued a Red Fire Danger Warning211 [WS1/56]. Normal building fire design assumes fire originates internally and relies on passive fire safety provisions to contain spread. At WFC the fire originated externally and bypassed these provisions entirely.

1. Taken together, these four challenges created conditions never previously

encountered in Hong Kong. The firefighters gave everything during the firefighting and rescue operations; they rescued over 100 persons, attended all 347 reported assistance locations and all remaining units, sustained nine hospitalisations among their own ranks, and lost one of their own. That they could not prevent the rapid spread of fire and heavy casualties is attributable to the presence of the contributing factors addressed below, factors for which the primary responsibility lies overwhelmingly with private actors.

211 TANG Wing Wah 1st WS §61

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H5. Evidence on the setting up of the Command Post for the Disaster Victim Identification Unit (“DVIU”) on 2025.11.28 and DVIU’s operation

1. The DVIU was established in 1975 and operates under the command of the

Detective Training Centre, following the mode and standard of operation set out by INTERPOL. Its duty is to assist the Consultant Forensic Pathologist-in-charge in the identification of disaster victims in major incidents for investigation and subsequent court proceedings212 [WS1/270]. The DVIU reserves are trained to discharge duties at Command Post (including administration and logistics support), Recovery Teams, Dead Body Collection Point and Mortuary Team. After training, members return to normal policing duties in their parent formations but are mobilised when necessary213 [WS1/271].

1. For the WFC incident, a total of 605 DVIU officers were turned out: 1

Superintendent, 6 Chief Inspectors, 153 Senior Inspectors/Inspectors, 1 Police Station Sergeant, 71 Police Sergeants and 373 Police Constables214 [WS1/275]. On 28 November 2025, the Command Post was set up at Tai Po Baptist Public School with 64 members deployed; the Dead Body Collection Point was set up on the ground floor of the WFC Car Park with 64 members deployed; and the designated Mortuary was Fu Shan Public Mortuary in Tai Wai with 56 members deployed. A total of 94 Recovery Teams were formed, each comprising 4 members (1 Team Leader, 1 Recording Officer/Photographer and at least 2 Recovery Handlers), involving 376 officers215 [WS1/275].

1. The recovery operation proceeded in structured phases.
2. 1. Between 29 November and 3 December 2025, Recovery Teams were

deployed into the seven affected buildings to conduct the first and

212 CHENG Ka Chun (Supt, Det Training Centre, Police) 1st WS §§5-6 213 CHENG Ka Chun 1st WS §8 214 CHENG Ka Chun 1st WS §17 215 CHENG Ka Chun 1st WS §18

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preliminary search from the ground floor to the rooftop, covering all flats (except 41 flats with potential safety concerns pending clearance by the HA), electricity metre rooms, garbage rooms, corridors, staircases and all other common areas. Designated areas were assigned to 8 to 10 Recovery Teams, led by a Zone Leader, to coordinate search efforts and ensure thoroughness216 [WS1/275]. 414.2. On 3 December 2025, a second search was conducted against 12 flats where no missing persons had been found in the first search, together with the 41 previously inaccessible flats which had by then been cleared safe217 [WS1/275]. 414.3. Between 4 December and 9 December 2025, Recovery Teams searched for any body or body part covered in soot, fallen scaffoldings and rubble scattered around the estate grounds, and checked the lift shafts of the affected buildings. Scaffolding adhering to outer walls inaccessible to Recovery Teams was searched with the assistance of Small Unmanned Aircraft Teams from the Police218 [WS1/276].

1. On 29 November 2025, no body or body part was recovered. From 30 November

to 9 December 2025, a total of 74 bodies and/or body parts were found: Wang Cheong House (31), Wang Tai House (36) and Wang Sun House (7). No body or body part was found at Wang Yan House, Wang Tao House, Wang Kin House or Wang Shing House219 [WS1/276].

1. Each recovery was assigned a Unique Body Reference Number (“UBRN”).

Documentation was completed using either paper or electronic Disaster Victim

216 CHENG Ka Chun 1st WS §19 217 CHENG Ka Chun 1st WS §20 218 CHENG Ka Chun 1st WS §21 219 CHENG Ka Chun 1st WS §24

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Recovery Booklets linked to the Major Incident Investigation and Disaster Support System. Four tags bearing the UBRN were tied to a peg beside the body, the body itself, the inner body bag and the outer body bag respectively. Bodies were placed in an inner bag and then an outer bag before removal to the Dead Body Collection Point, where registry, initial pathological examination, photo- taking and documentary checking were conducted before transportation to Fu Shan Public Mortuary220 [WS1/272, 276].

1. The breakdown of the 168 fatalities is as follows: 106 fatalities (including S/N

73) were recovered by the FSD; 61 fatalities were handled by the DVIU (S/N 103-153, 158-165, 167 and 168); and 1 fatality (S/N 166) was recovered by the forensic pathologist (not part of the DVIU) on 19 December 2025 221 [WS10/1952-1953].

1. Of the 74 suspected human tissue samples collected by the DVIU, 12 were found

to be non-human (animal substance) and 2 were animal but not human tissues. Among the remaining 60, after further examination by pathologists, odontology experts and anthropologists, additional body parts were retrieved (that is, one bag of body and/or body parts carrying human tissues from more than one victim), resulting in a total of 65 identifiable bodies and/or body parts. Of these, 60 victims were identified by forensic methods of DNA and/or fingerprint comparison and/or odontology; 4 body parts were matched to 3 of those 60 victims (S/N 73, 112 and 119); and 1 body part (a skull found beside a body part confirmed by DNA to be S/N 112) was identified by circumstantial evidence as S/N 112’s daughter (S/N 167)222 [WS1/277-278; Day 12/151/18 - 152/15].

220 CHENG Ka Chun 1st WS §§11-12, 21-22 221 CHENG Ka Chun 2nd WS §§4-9 222 CHENG Ka Chun 1st WS §27

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• The DVIU commander SP (DVIU) Cheng Ka Chun confirmed that the true death

toll does not exceed 168: “I think it’s impossible to find evidence that there is more than 168 victims. The reason is that excluding persons reported missing by their relatives, and also missing persons with no enquiries made, when we conducted this search... we have searched every inch of the scene... there would not be more than 168 victims” [Day 12/152/22 - 153/11]. H6. Evidence on casualties and damage (i) The passing of Senior Fireman Ho Wai-ho

• SFn Ho was a member of the Sha Tin Light Rescue Unit. He lost his life in the

line of duty during firefighting operations at WFC on 26 November 2025.

• SFn Ho’s assigned mission was to respond to an assistance call at Room 2701 of

Wang Cheong House. The instruction came from PStnO Liao, who was himself directed by SStnO Hui in response to an FSCC assistance call message received at approximately 1503 hours223 [WS2/990].

• CCTV footage shows that at 1516 hours, SFn Ho entered Wang Tai House rather

than his assigned destination of Wang Cheong House. The evidence is that he had, out of compassion, stopped to assist an elderly resident in a wheelchair, became separated from his team, and mistook Wang Tai House for Wang Cheong House.

• No Entry Control Point (“ECP”) had been established at Wang Tai House at the

time SFn Ho entered. The standard ECP procedure (two floors below the rescue floor) could not yet be implemented because no BA team had been assigned to Wang Tai House at that stage; all attempts were directed at Wang Cheong House [Day 18/72/11-15]. 223 HUI Kin On 1st WS §13

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• Because no ECP was in place and SFn Ho entered without passing through a

control point, his Firefighter Locator System (“FLS”) Personal Transmitter (“PT”) red magnetic key was not removed and his PT was not activated. Even if the PT had been activated, the signal from SFn Ho’s position on the 30th and 31st floors of Wang Tai House “might not have been received by the HHR on G/F of either Wang Cheong House or Wang Tai House due to the long transmission distance, as well as environmental conditions and anything that might cause interference or reflection of PT signal”224 [WS4/1811]. This constraint of the existing FLS system for high-rise scenarios is addressed in Section O5(ii) below.

• SFn Ho conducted the daily BA test at 0930 hours on 26 November and recorded

no defects; the BA set was in good working condition225 [WS4/1808].

• The Mayday message received at approximately 1522 hours stated: “Mayday,

Mayday, Mayday, ...... 而家被困係30 樓”. SStnO Hui responded via R/T asking “你喺咩位置” but could not hear any response 226 [WS2/991]. PStnO Liao subsequently confirmed to SStnO Hui at the roundabout near Wang Cheong House that the Mayday sender was SFn Ho of ST/LRU227 [WS2/992].

• The IFITF noted that “Based on the post-fire investigation, it is believed that

conditions deteriorated rapidly shortly after Fn HO arrived on the 25/F” and that “Equipped with proper PPE and BA, Fn HO was fully capable of escaping from Wang Tai House upon noting the deteriorating situation. However, it is believed that he stayed in Wang Tai House in an attempt to assist the evacuation of others” (IFITF Report, §§9.2.8.4 and 9.2.8.5 [ER1/193]). At approximately 1555 hours, DO Lam, whilst conducting assessment of hazards at the roundabout near the 224 TUNG Wing Kei (Div. Officer BA, FSD) 1st WS §7.7 225 TUNG Wing Kei 1st WS §6.4 226 HUI Kin On 1st WS §19 227 HUI Kin On 1st WS §21

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northeast façade of Wang Tai House, noted SFn Ho unconscious, lying on a quantity of burning bamboo sticks and debris at the open ground in front of the front entrance of Wang Tai House228 [WS2/1002]. SFn Ho was believed to have exited the building via a broken window at the 31st Floor (IFITF Report, §9.2.8.6 [ER1/194]). At approximately 1600 hours, crew members removed SFn Ho from the burning debris and conveyed him to ambulance personnel229 [WS2/1003]. From the Mayday at 1522 hours to recovery at 1555 hours was 33 minutes; from recovery to removal was a further 5 minutes.

1. Post-fire examination of SFn Ho’s BA set confirmed: the cylinder valve and

handwheel were damaged, consistent with severe impact; no burn marks appeared on the BA set; the BA Set Tally was still attached; the PT red magnetic key was still inserted; and the alphaSCOUT was found inoperable due to water damage. The BA set was recovered from the waterlogged Roof Floor of Wang Tai House at approximately 1733 hours on 27 November 2025, where the floor was submerged to a depth of approximately 10 to 20 cm. Rust accumulation and water infiltration into the alphaSCOUT motherboard were identified, consistent with approximately 16 hours of submersion230 [WS4/1808-1811]. The alphaSCOUT data is irrecoverably lost; the exact chronology of SFn Ho’s final minutes cannot be established.

1. The IFITF concluded that:
2. 1. “[T]he evidence indicates that [S]Fn HO was engaged in a valiant effort

to escape or obtain help under extreme conditions. His incapacitation — whether primarily due to smoke inhalation or traumatic injuries sustained

228 LAM Ho Chun 1st WS §10 229 LAM Ho Chun 1st WS §11 230 TUNG Wing Kei 1st WS §§6.4-6.6, 7.5-7.7

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during a fall — ultimately rendered him unable to remove himself from danger, leading to his tragic passing” (IFITF Report, §9.2.8.8 [ER1/194]); 429.2. The confirmed cause of death of [S]Fn HO was determined to be the adverse effects of fire and inhalation of fire fumes and smoke. Although the PPE was severely damaged due to prolonged contact with hot or burning objects, it continued to serve its intended purpose” (IFITF Report, §9.2.8.9 [ER1/194]); 429.3. “According to the Autopsy Report, [S]Fn HO died from inhalation of fire fumes and extensive burns, with head and neck injuries as other significant conditions contributing to the death.” (IFITF Report, §9.2.9.1 [ER1/194]).

1. Finally, the Government endorses the IFITF’s final remark that “[S]Fn HO

demonstrated exceptional bravery and a deep sense of duty while responding to the incident. Despite the challenging and life-threatening conditions, he prioritized the safety of others over his own, exemplifying the highest standards of selflessness and dedication.” (IFITF Report, §9.2.9.2 [ER1/194]). (ii) Other casualties and the Police’s Casualty Enquiry Unit (“CEU”)

1. Parallel to the DVIU’s physical recovery and identification work, the Police’s

CEU served as the public-facing interface between the families of those affected and investigative machinery. Its role was to receive, collate and act upon enquiries from members of the public who believed their relatives or friends may have been involved in the fire, and to match that information against the casualty data being generated by the DVIU, hospitals and other sources.

1. As of 1800 hours on 13 January 2026, the CEU had received a total of 489

missing person reports. Of these: 196 reports related to 166 missing persons confirmed dead in the incident (165 by forensic examination, 1 by circumstantial

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evidence); 40 reports related to 37 missing persons confirmed injured; 31 reports were non-pursuable due to insufficient information for further investigation; 1 was a misunderstanding; 31 related to individuals confirmed to have passed away before the fire; 6 related to individuals who had left Hong Kong before the fire; and 184 were confirmed safe231 [WS1/238, 240-244].

1. Nine firefighters who were carrying out firefighting and Search and Rescue

Operations inside the blocks required hospitalisation due to heat exhaustion, physical exhaustion, breathing difficulties, smoke inhalation or being struck by falling objects232 [WS1/55].

1. The CEU operation was concluded on 26 January 2026, having operated

continuously for two months. The sustained operation of the CEU across three progressively scaled-down phases ensured that every pursuable missing person report was resolved, and that the families of the deceased and injured were identified and notified through a single, coordinated channel. (iii) Damage to property

1. The fire caused extensive damage to property across the WFC estate. Seven of

the eight residential blocks were directly affected by fire; only Wang Chi House was spared from direct flame involvement, though it was not immune from the effects of smoke, water and falling debris in the surrounding area.

1. Across the seven affected buildings, a total of 1,736 flats were assessed. The

IFITF Report records that the interiors of 924 flats sustained varying degrees of fire damage, while the interiors of the remaining 812 flats remained relatively unaffected, notwithstanding that the exterior of the buildings had been damaged by the high temperature with prolonged exposure to fire (IFITF Report §5.3.1

231 TSANG Shuk Yin (Chief Supt, CIIB, Police) §26, Annex 232 TANG Wing Wah 1st WS §60

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[ER1/62]). The damage ranged from total destruction of interior contents in units directly penetrated by fire, to severe smoke damage, water damage from firefighting operations, and structural concerns arising from prolonged exposure to extreme heat.

1. The FSD conducted an internal assessment of all 1,736 units from a firefighting

perspective. The DFS confirmed that this assessment was “just from the angle of firefighting” and constituted “an internal assessment by the FSD” that did not examine the buildings from a structural perspective [Day 19/104/16 – 105/10]. The IFITF also makes clear that such “figures and information about the residential flats…are only recording the observations of the interior condition of the flats, but not the assessment on the overall habituality of the concerned flats and the entire Wang Fuk Court” (IFITF Report §5.3.4 [ER1/63]).

1. Beyond the residential units, the fire caused significant damage to the common

areas of the estate, including corridors, staircases, lift lobbies and rooftops. The bamboo scaffolding enclosing the buildings was largely consumed by the fire or collapsed onto the ground and surrounding roadways. The estate’s communal facilities, landscaping and vehicular access areas were also affected by the accumulation of burnt debris, fire-suppression water and operational footprint of the extended firefighting and recovery operation. The scale of property damage rendered WFC uninhabitable in the immediate aftermath, displacing the residents and necessitating the emergency accommodation arrangements described above.

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PART III(B): START OF THE FIRE I. WORKERS SMOKING ONSITE

1. As mentioned, the IFITF concluded that the fire was most likely accidental in

nature, caused by a glowing source such as a lit cigarette end igniting combustible materials at the flat roof outside Flats 104 and 105 of Wang Cheong House.

1. This section examines the evidence on the prevalence of workers smoking at the

WFC construction site, the circumstantial link between smoking and the ignition of the fire, the primary responsibility of the contractor and PMC for site management, and the supervisory role of the LD.

1. As will be seen, the primary responsibility for this contributing factor lies

squarely with Prestige as principal contractor, whose failure to enforce an effective no-smoking regime persisted despite repeated complaints from residents, documented observations by the PMC, and warnings issued by the LD.

1. Nevertheless, having regard to the WFC Fire, the Government acknowledges that

the pre-fire regulatory framework warrants a review: smoking at construction sites was not an offence per se, and the threshold for the LD to exercise its prohibition power under Regulation 53 of the CSSR was high as it targets specific scenarios requiring the simultaneous presence threshold conditions. Such constraint in statutory control is being addressed through a legislative programme already underway.

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I1. Prevalence of workers smoking onsite (i) The various complaints made by the WFC residents / IO to Prestige / Will Power, the PMC and LD

1. The evidence throughout the evidential hearings establishes that workers smoking

at the WFC construction site was a persistent and well-documented problem throughout the renovation period.

1. The LD received nine complaints about smoking at the RMAA sites of WFC

before the fire, lodged via multiple channels including the OSH Complaint Platform, email, OSH complaint hotline, and 1823 hotline 233 [WS1/352; WS1/356-376].

1. The PMC received repeated smoking complaints from residents, both by

telephone and in person. Lok Sin Ying of ISS confirmed that residents would “complain by phone sometimes, and they would come face to face sometimes” [Day 6/122/7 – 123/11]. The PMC maintained a standalone Renovation Complaint Record logbook which contained multiple smoking entries, including workers smoking on the scaffolding [C1-1/749]. The recorded follow-up against these was consistently limited to “Inform Prestige” [Day 7/99/17-23].

1. Smoking complaints were raised in the WhatsApp group “宏福苑大維修” which

served as a communication platform among the IO, ISS, Prestige and Will Power, as evidenced by the messages at [F4/1041, 1131, 1134, 1166, 1263, 1268, 1269, 1284, 1285]. Tsui Moon Come, the then Chairperson of the MC, confirmed in oral evidence that “there were many complaints from residents” in this regard [Day 14/92/11-12].

233 LI Man Pong 1st WS §62; LAM Sau Ching (Div. OSO, LD) 1st WS §§6-79

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• Smoking complaints were also raised repeatedly in the regular renovation works

meetings, of which the PMC kept the minutes. These records document a persistent pattern across multiple months: on 12 September 2024, the IO raised workers smoking and proposed penalties with photo evidence; on 12 October 2024, Prestige blacklisted a scaffolder for smoking and not wearing a safety harness; on 4 January 2025, the IO again reminded Prestige to ensure no smoking on scaffolding; and on 15 March 2025, smoking was found to be persisting, and the IO gave Prestige one month to improve, with a designated smoking area to be set up and further breaches to be fined per occurrence234 [WS2/1268; C1-1/651]; [Day 8/44/22 - 45/15].

• When asked whether there had been any improvement after the one-month

deadline, Cheng Tsz-ying (Security Supervisor of ISS) confirmed “Not much improvement” [Day 8/45/6-18].

• The PMC’s frontline staff also personally observed workers smoking onsite.

Wong Pak-shing, a security guard, confirmed that from the start of the renovation works to the day of the fire, he personally took approximately four to five complaints about Prestige workers smoking onsite, and on one occasion went to Wang Yan House and found Prestige workers smoking near the 1st floor, shouting up from the ground floor to ask them to stop [WS2/1239]. Cheng confirmed that she “knew that there were construction workers smoking and there were complaints” and that she had personally seen “construction workers smoking” [Day 8/74/22 – 75/16]. 234 Cheng Tsz-ying 1st WS §10

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(ii) The presence of photographic / video, contemporaneous and other factual evidence showing workers smoking onsite

1. Beyond the complaints, direct evidence of smoking at the site was recovered after

the fire. Prestige’s own in-house disciplinary measures provide further evidence of the recurring nature of the problem. Lam Sau-ching of the LD confirmed that Prestige had “in-house rules for prohibition of smoking on the site” under which “the worker would be fined by PC&E if he/she was found smoking on the site for the first time” and “if the worker was found smoking on the site again, he/she would not be allowed to work on the site anymore”235 [WS1/359]. SO-I Kwan of the LD was told by Prestige that “a worker had been banned from working on the site for violating the in-house rule of smoking” 236 [WS1/364]. The existence of these disciplinary measures confirms that smoking was sufficiently prevalent to require formal internal sanction.

1. Lam’s witness statement stated that, on the basis of the observations made during

the inspections at WFC, “there is no cogent basis to suggest that smoking was prevalent in the renovation site at WFC” 237 [WS1/383]. Her evidence has to be understood in the context of the inspections conducted by reference to the narrow threshold requirements under Regulation 53 of the CSSR. In oral evidence, Lam candidly accepted the need for improvement in the initiative undertaken by the LD at WFC under existing legislation. When it was put to her that not personally seeing anyone smoking “doesn’t mean that nobody ever smoked there,” Lam fairly agreed. When it was further suggested that LD “could not gather the evidence successfully,” Lam confirmed: “Yes, you can put it this way. We could not get the evidence” [Day 16/13/19 - 14/11]. This is not to detract from the evidence from the complaints, CCTV footage, audio recording, Prestige’s own disciplinary record, and the PMC’s first-hand observations which now

235 LAM Sau Ching 1st WS §16 236 LAM Sau Ching 1st WS §33 237 LAM Sau Ching 1st WS §95

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collectively establishes that workers smoking at the WFC construction site was prevalent throughout the renovation period. However, the point remains that such evidence alone would not suffice for the purpose of Regulation 53 of the CSSR: see Section I4 below. I2. How workers smoking onsite resulted in start of the fire (i) The relevant factual evidence

1. The fire originated from the flat roof outside Flats 104 and 105 of Wang Cheong

House. CCTV footage and videos taken by members of the public point consistently to that location as the place where the initial fire took hold.

1. The debris excavated at the origin of the fire contained burnt remnants of carton

paper boxes and other rubbish, together with cigarette ends. The accumulation of combustible waste materials at the point of origin, combined with the presence of cigarette ends, provides the evidential link between smoking and the ignition of the fire. (ii) The IFITF’s investigations

1. The fire originated from the flat roof outside Flats 104 and 105 of Wang Cheong

House. CCTV footage and videos taken by members of the public point consistently to that location as the place where the initial fire took hold.

1. As summariesd above, the IFITF concluded that the fire originated from the flat

roof outside Flats 104 and 105 of Wang Cheong House (IFITF Report §§1.3.1, 6.1.1 [ER1/14, 73]). Excavations at the suspected point of origin revealed debris up to 2 metres high, consisting of construction materials “such as safety nets, toe- boards, polystyrene window covers, carton paper boxes and backing paper from mosaic tiles” (IFITF Report §1.3.2 [ER1/14]). The accumulation of these

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combustible materials in the area “could have served as fuel for the fire” (IFITF Report §6.1.6 [ER1/74]).

1. Two cigarette ends were discovered at the site (IFITF Report §1.3.2 [ER1/14]).

Evidence of smoking at the construction site was widespread: numerous cigarette ends were discovered on the bamboo scaffolding of Wang Chi House; CCTV footage captured construction workers smoking on the roof floor of Wang Cheong House; and at least five occupants of Wang Cheong House had occasionally noticed the smell of smoke or the presence of cigarette butts on the scaffolding (IFITF Report §6.1.8 [ER1/74]). More broadly, 105 out of 2,011 residents who responded to statements and questionnaires reported “witnessing smoking, smelling cigarette smoke or noticing cigarette ends within Wang Fuk Court during the renovation period” (IFITF Report §6.1.8, fn 64 [ER1/74]). I3. The primary and supervisory responsibilities for such contributing factor (i) The regulatory and supervisory regime for workers smoking onsite

1. The principal legislative provision governing smoking at construction sites at the

material time was Regulation 53 of the CSSR, which empowers the Commissioner for Labour to issue a written order prohibiting smoking and the use of naked lights at a construction site “where, in any construction site, any flammable liquid or any mixture containing any such liquid or any substance or thing which in the opinion of the Commissioner involves danger from fire is used or intended to be used.” A contractor responsible for a site in which such a prohibition is in effect must take “such steps to enforce the prohibition as the Commissioner may by notice direct.” Failure to comply is an offence punishable by a maximum fine of $400,000 for a contractor and $150,000 for a worker.

1. The LD’s prevailing interpretation of Regulation 53 of the CSSR required the

coexistence of all three elements of the fire triangle (a source of ignition, fuel and

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oxygen) at the same place of work simultaneously. Li Man-pong of the LD stated: “According to OSOs’ training, ‘involves danger from fire’ in regulation 53 of the CSSR means that all three elements of a fire triangle (i.e. a source of ignition, fuel and oxygen) are found to coexist at the same time at a place of work”238 [WS1/347]. In actual daily operation, this refers to the coexistence of (i) flammable liquid / substance / thing and (ii) naked lights for hot work / heats / smoking, or them being in proximity of each other [WS1/347]. He further confirmed that “the coexistence of these conditions is rarely seen on site, making the issuance of prohibition notices for smoking quite uncommon” 239 [WS1/347].

1. The consequence of this interpretation was a high threshold for enforcement. No

prosecutions have been initiated under Regulation 53 of the CSSR in the past decade240 [WS1/353]. When asked whether the ban had ever been imposed, Murphy Yuen of the LD confirmed from memory that it had been imposed on some occasion, but no prosecution had been initiated under Regulation 53 of the CSSR for the past decade [Day 16/94/19-22]. No prohibition of smoking notice was issued in respect of WFC241 [WS1/384].

1. Li Man-pong confirmed in oral evidence that even the presence of foam boards

on the scaffolding would not, in the LD’s pre-fire analysis, have triggered the threshold for a smoking ban, because foam boards are “combustible but they’re not flammable materials” within the meaning of Regulation 53 of the CSSR [Day 16/69/20 - 70/2]. The pre-fire regulatory position was therefore that smoking at a construction site was not an offence per se; it could only be prohibited where flammable substances were present and danger from fire was involved.

238 LI Man-pong 1st WS §43 239 LI Man-pong 1st WS §44 240 LI Man-pong 1st WS §63 241 LAM Sau Ching 1st WS §96

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(ii) The primary responsibilities of Prestige and the PMC, including site management

1. Under section 6A of the FIUO and section 6(1) of the OSHO, the employer,

including the principal contractor, must so far as reasonably practicable ensure the safety and health of all employees at work. This encompasses the provision and maintenance of safe systems of work, provision of information, instruction, training and supervision, and maintenance of a working environment that is safe and without risks to health.

1. Prestige bore primary responsibility for site safety management at WFC. The

evidence establishes that Prestige had actual knowledge that workers continued to smoke outside the designated area notwithstanding the in-house rules. As mentioned in Section I1(i) above, smoking complaints were raised directly with Prestige through multiple channels: residents complained to the PMC by telephone and in person, and the PMC proceeded to liaise with Prestige; complaints were raised in the WhatsApp group which included Prestige as a participant; and smoking was raised repeatedly at the regular renovation works meetings attended by Prestige.

1. Yet the smoking persisted throughout the renovation period; the PMC confirmed

“not much improvement” even after the March 2025 ultimatum imposed by the IO as mentioned above.

1. More broadly, Lam Sau-ching of the LD confirmed that the contractor bears

responsibility for overall site safety management. It was “not acceptable” for workers not to have undergone safety induction training, and that “the contractors hire the safety officers, and the safety officers do have the duty about safety on site” [Day 16/12/18 – 13/5].

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• The site management failure extended beyond smoking to the accumulation of

combustible debris at the point of origin. The failure to ensure frequent clearance of construction garbage and debris from the flat roof adjacent to Flats 104 and 105 was a site management failure squarely within Prestige’s primary responsibility as principal contractor.

• The PMC’s role in relation to smoking was limited but not non-existent. ISS bore

contractual obligations under the Property Management Agreement to identify and follow up on fire risks. Cheng of ISS confirmed that “in relation to fire risk complaints it seems ISS has a contractual obligation to record, investigate and liaise and follow up on the matter with the relevant government department” [Day 8/34/10-16]. The ISS Security Manual treated identification of potential fire risks as a core purpose of patrol [H1-3/6639]. However, ISS’s actual response to smoking complaints was limited to relaying them to Prestige. Wong Pak-shing of ISS agreed that the management office was “playing the role of passing on the message” [Day 7/100/21 - 101/11]. Cheng accepted: “We simply cannot control the Prestige workers. We cannot really dismiss them” [Day 8/47/13-25]. She further accepted that ISS “hasn’t taken any further action to deal with this” beyond referring complaints to Prestige [Day 8/48/1-5], and that ISS had “the responsibility to make sure everything is in order” [Day 8/52/2-7]. (iii) The Government’s supervisory responsibilities

• The LD’s primary mandate is to administer and enforce occupational safety and

health legislation to protect employees at work. Its professional expertise is in OSH, not building fire safety. As Murphy Yuen of the LD confirmed: “Materials such as foam boards used to seal residents’ windows are consequently not the focus of LD’s inspections. Also, fire safety measures in public places, including 173

firefighting equipment, fire alarms, staircases servicing as means of escape, etc., are not within LD’s purview”242 [WS1/325].

1. The Chairman identified an apparent ‘oddity’ in this arrangement: “I find

something odd. So the Labour Department focuses on OSH, occupational safety and health, so it’s about protecting workers. But the fire hazard has to do with a different group of people: the residents. Getting the Labour Department to take charge of such matters at the policy level seems weird.” Li Man-pong responded by clarifying that he was speaking from the workers’ perspective: “a fire hazard for the public also means fire hazard for workers” [Day 16/66/5-17]. Counsel for the Committee agreed with Li that “fire prevention, if this responsibility is put on you, it’s not fair to the Labour Department” and that “government departments should collectively play a monitoring and supervisory role”; Li agreed [Day 16/67/9-15].

1. The LD’s enforcement regime operates on a risk-based inspection model. Taking

into account the nature and risk levels of work processes and scale of works, the inspection frequency is generally set at one to two months243 [WS1/338; Day 16/3/19-23].

1. For WFC specifically, OSOs conducted inspections in a frequency “higher than

the normal frequency of once every one to two months” (i.e. almost every month [Day 16/5/11-17]) as a result of the number of complaints received244 [WS1/339].

1. The LD’s enforcement options range across four tiers: prosecution, suspension

notices, improvement notices, and warning letters. Officers exercise professional

242 YUEN Tsz Lok 1st WS §39 243 LI Man Pong 1st WS §22 244 LI Man Pong 1st WS §24

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judgment, discretion and common sense in selecting the appropriate response based on the gravity of the offence [D1/1724]. (iv) The actions taken by the LD at WFC

1. The LD conducted 16 inspections plus one surprise surveillance visit at WFC

between July 2024 and 20 November 2025245 [WS1/356; WS13/2108].

1. All inspections were conducted on a surprise basis; no prior notice was given to

contractors, RIs or building management246 [WS13/2107-2108]. This practice was confirmed by internal LD email: “inspections of workplaces shall be surprise in nature. No inspection schedules shall be disclosed to any third party, including consultants, in advance” [D2/1981].

1. Regarding the smoking complaints specifically, the consistent finding on every

inspection was that no worker was observed smoking in working areas. Lam’s evidence is that “no worker was found smoking on the site during the inspection” 247 [WS1/357]. Workers were found smoking “at the designated smoking area set up by PC&E at the open ground between Wang Chi House and Wang Shing House”248 [WS1/359]. On some inspections, cigarette stubs were found in common areas of the estate, though it was unclear whether they were left by workers or others [Day 16/13/12-14].

1. The LD issued three Construction Site Inspection Reports (CSIRs) dated 2

August 2024, 9 August 2024 and 2 September 2024 reminding Prestige that steps shall be taken to ensure that “smoking or the use of naked lights is prohibited in

245 LAM Sau Ching 1st WS §6; 3rd WS §7 246 LAM Sau Ching 3rd WS §§5-6 247 LAM Sau Ching 1st WS §10 248 LAM Sau Ching 1st WS §15

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a site where flammable liquid or any mixture containing such liquid or any substance or thing which involves danger from fire is used”249 [WS1/358–360].

1. The LD also initiated criminal prosecution against Prestige and its scaffold sub-

contractor Gain Profit Shed Industry Limited (“GPSI”) for working-at-height offences, resulting in three summonses. On 3 October 2025, Prestige was convicted and fined $18,000, and GPSI was convicted and fined $12,000 250 [WS1/365]. (v) The role of the FSD

1. Workers smoking at construction sites generally does not fall within the

enforcement purview of the FSD. When the LD referred 251 the smoking complaint to the FSD in July 2024, the FSD’s reply was that “the subject matter is not under the jurisdiction of FSD. You may wish to refer the case to the relevant department” [D1/930].

1. AD Yung confirmed this position in oral evidence. When asked which

department should handle complaints about smoking on construction sites, he stated that such complaints should go to the LD [Day 17/6/22-23]. He acknowledged, however, that the FSD’s statutory concern under section 7(c) of the FSO “goes beyond just active provisions” and that the broad definition of “fire hazard” under section 2 of the FSO (Cap. 95) encompasses “matter or circumstances which materially increases the likelihood of fire or the danger to life or property” [Day 17/9/17-10/13]. AD Yung accepted that the FSD’s concern

249 LAM Sau Ching 1st WS §§13, 18, 23 250 LAM Sau Ching 1st WS fn 6 251 For the avoidance of doubt, the LD’s referral to FSD did not reflect any view on the LD’s part that smoking at construction sites fell outside its own purview. The referral to the FSD was made because the complainant had expressly invoked the Fire Services Ordinance in the complaint, as confirmed in Lam’s oral evidence [Day 16/16/8-10].

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therefore extends beyond active fire safety provisions to any matter that materially increases fire risk [Day 17/10/17-21]. I4. Systemic and/or operational weaknesses on the regulatory level

1. The evidence reveals three areas requiring review and improvements.
2. First, the high threshold under Regulation 53 of the CSSR meant that smoking

per se was not an offence at construction sites, and no enforcement tool was available to the LD unless the threshold conditions under Regulation 53 were simultaneously present. This was a structural design of the existing legislative framework with regard to the policy intent – the CSSR focuses on workers’ safety rather than smoking. No prosecutions have been initiated under Regulation 53 of the CSSR in the past decade252 [WS1/353], demonstrating that the threshold was consistently rarely met across the industry, not merely at WFC. The result was that the Government did not have a specific regulatory mechanism in place to tackle the fire risk posed by workers smoking on scaffolding as such.

1. Second, the LD officers were unable to gather direct evidence of workers

smoking in working areas during surprise inspections. The nature of the act (transient, easily concealed upon the approach of inspectors) made detection inherently difficult during inspections that OSOs conducted. In this regard, whilst the “could not be justified” language used in the LD’s complaint-disposal records might appear inapt when considered on a standalone basis focusing on the act of smoking per se, properly construed the conclusion that a complaint “could not be justified” in the context of Regulation 53 of the CSSR reflected only that the specific statutory threshold for enforcement action was not met on the evidence

252 LI Man Pong 1st WS §63

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available at the time; it did not mean (albeit that it may be perceived to suggest) the complaint was baseless

1. In direct response to the identified regulatory constraint, the Government has on

19 May 2026 introduced into the Legislative Council a comprehensive legislative package [D4/1988-2003, 2004], as also outlined in Murphy Yuen’s oral evidence [Day 16/92-93], proposing to: 482.1. amend the Smoking (Public Health) Ordinance (Cap. 371) to designate all construction sites, irrespective of size, as no-smoking areas and to impose a fixed penalty of HK$3,000 under the Fixed Penalty (Smoking Offences) Ordinance (Cap. 600) on any person smoking at a construction site [D4/1990-1991]. 482.2. amend the Fixed Penalty (Smoking Offences) Ordinance (Cap. 600) to empower an OSO to issue fix penalty notices to a person who is committing or has committed the smoking offence [D4/1992]. 482.3. amend Regulation 53 of the CSSR to impose a positive duty on contractors responsible for a construction site to take all reasonable measures to ensure that no person smokes or carries a lighted specified smoking product (e.g. cigarettes) or uses naked light to light a specified smoking product in a construction site [D4/1991].

1. The combined effect of these improvement measures is expected to

fundamentally alter the enforcement landscape. 483.1. First and foremost, the constraint which was the principal obstacle to enforcement at WFC, namely that smoking per se was not an offence under the OSH legislation, requiring the LD to prove the simultaneous presence

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of flammable materials before any enforcement action could be taken [Day 16/30/25 - 31/5], is being addressed. As a result, enforcement actions may be taken by the LD once any person is found to be smoking at a construction site. It is no longer necessary for the threshold conditions under Regulation 53 of the CSSR to be established before the LD may take enforcement actions. 483.2. Secondly, even if the officers of LD could not see anyone smoking at a construction site or could not ascertain the identity of the person smoking at a construction site, they may still take enforcement actions if the contractors fail to take all reasonable measures to prevent smoking at a construction site. As Lam of the LD confirmed: “After the Construction Sites (Safety) Regulation is amended, with a smoking ban in effect on the construction site, the contractor will be under a duty to prevent smoking. Even when officers do not see any workers smoking, we can rely on photos from residents or other people, and that will be enough evidence for us to pursue prosecution” [Day 16/55/24 - 56/16]. 483.3. Thirdly, with the above obstacle of the threshold conditions removed, evidence of smoking (including photographic and video evidence from residents which could previously only serve as corroborative material [Day 16/31/17]) will become a sufficient basis for prosecution of the new offence [Day 16/100/10-12]. Yuen of the LD also confirmed the same: “If smoking is to be banned, then through the information given by the complainant, we can use the evidence as a basis to consider prosecution” [Day 16/100/10- 12].

1. In terms of enforcement methodology, the LD is exploring the use of drones and

other technology to assist evidence-gathering for the new smoking ban [Day

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16/100/10-17] (Table of Improvement Measures, Item E1). The Chairman observed that “the government is looking into amending the law or maybe use drones in the future to help with enforcement” [Day 16/30/18-23].

1. Member Au-yeung also echoed the point that “what is difficult at the moment is

that you need to see it with your own eyes. Other than raising the penalty, I do not see any changes made to enforcement” [Day 16/100/18-21]. In response to Member Au-yeung’s concern, the Government emphasises that the proposed improvement measures go beyond raising penalties: by making smoking per se an offence at construction sites and extending the liability to cover contractors’ failure to take all reasonable measures to prevent smoking, the expectation is to fundamentally change the enforcement landscape by removing the requirement to prove the coexistence of flammable materials, and by enabling the LD to rely on evidence from third parties (including residents’ photographs and videos) on top of direct observation by LD officers during inspections. For the avoidance of doubt, whilst it may be said that the LD could equally rely on evidence from third parties in the past, the point is that such evidence per se is not sufficient for prosecution in the past (and hence of limited value), whereas under the proposed new legislation, such evidence should suffice on its own to substantiate the bringing of prosecution. In this regard, the exploration of drone-assisted enforcement is also a direct response to this concern.

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PART III(C): RAPID SPREAD OF THE FIRE J. THE USE OF SCAFFOLDING NETS UNCERTIFIED FOR FR PROPERTIES

1. The IFITF’s findings establish that the presence of scaffolding nets uncertified

for FR properties was one of the most critical contributing factors to the rapid spread of the fire. In small fire size cases, the CFD simulations demonstrated that with FR-certified nets, the fire could not sustain itself; with non-FR nets, the result was significant fire spread and severe fire development.

1. This section examines the factual evidence on the use of such nets at WFC, the

complaints raised, the unreliable certificate presented by Prestige, the causal link to fire spread established by the IFITF, and the respective responsibilities of the contractor, RI, and relevant Government departments.

1. The primary responsibility for this contributing factor lies with Prestige, which

deliberately directed the supply and use of nets that were non-FR certified (in contravention of the recognised standards) and furnished a test certificate (which is at least suspected to have been fabricated) to conceal the non-compliance, and with Will Power and the RI, who bore the statutory duty to ensure compliance and failed to discharge it.

1. The Government also acknowledges that the supervisory mechanisms contained

areas requiring review and improvements that the evidence has exposed. These areas are addressed below, together with the improvement measures that have since been introduced. J1. Use of scaffolding nets uncertified for FR properties at WFC

• The evidence before the Committee establishes that non-FR certified scaffolding

nets were used at WFC. 181

• The witness statement of Chan Yiu-fai (of Gain Profit Shed Industry Limited

(“Gain Profit”), a supplier engaged by Prestige) establishes the chain of instruction from Prestige to the supplier. Chan states that after the first typhoon in July 2025, Gordon (Ho Kin-yip, a director of Prestige) contacted him and asked him to procure replacement nets. When Chan explained that the WFC project required FR nets and suggested using FR nets (whose cost with shipping was not significantly different from ordinary nets), Gordon instructed him: “叫你訂就訂， 唔使講咁多，你訂阻燃網都唔會找數俾你” (just order what I tell you to order, don't say so much; if you order FR nets I won't pay you for them)253 [WS2/1437].

• Chan raised the issue with Hau Wa-kin (another director of Prestige), who told

him to follow Gordon’s instructions. Chan accordingly procured 450 sheets of ordinary (non-FR certified) nets for Prestige254 [WS2/1437-1438].

• The same pattern was repeated following Typhoon Ragasa in September 2025:

Gordon again instructed Chan to order 4,500 sheets of ordinary nets, and when Chan once more explained that FR nets were required and that the price difference was modest, Gordon again insisted on ordinary nets255 [WS2/1438-1439].

• Chan’s evidence further records that on 27 October 2025, Gordon called him to

urgently order 115 sheets of FR nets because of a LD inspection prompted by the Chinachem Tower fire, requiring Prestige to selectively replace ordinary nets with FR nets ahead of the inspection256 [WS2/1439-1440]. This is corroborated by a WhatsApp message from Sam Tam of Prestige to Hau Wa-kin on 27 October 2025 at 09:54 am stating: “（不公開）明天下午預 ICU 到地盤預要燒棚網 check 定邊啲 ok” (confidential: tomorrow afternoon expect ICU to come to site, 253 Chan Yiu-fai 1st WS §14 254 Chan Yiu-fai 1st WS §14 255 Chan Yiu-fai 1st WS §16 256 Chan Yiu-fai 1st WS §17

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expect they will burn-test the scaffolding nets, check which ones are ok) [A2/item 95]. This demonstrates that Prestige was not only aware the nets on site were non- FR, but was internally coordinating to identify which nets would pass testing and to selectively replace non-compliant nets with compliant ones specifically to deceive the regulatory authorities during the anticipated inspection.

1. WeChat discussions between Chan and a Mainland manufacturer (濱州市源進

化纖繩網有限公司) in September 2025 confirm that Chan was actively seeking the supply of non-FR certified nets for WFC [A2/item 111]. 495.1. Chan placed an order expressly specified as “綠色不阻燃” (green, non- FR), 1.8 by 17 metres, in a quantity of 2,500 sheets at RMB 24 per sheet (totalling RMB 60,000), for delivery to Guangdong/Shenzhen [A2/item 111]. The manufacturer confirmed the order and arranged shipment, with delivery expected around 1 to 3 October 2025. 495.2. On 13 October 2025, approximately ten days after the delivery, Chan asked the same manufacturer whether there was any FR agent (“阻燃劑”) that could be applied to the nets after they had already been erected (“等網掛 上去，它要改阻燃的，有沒有那個阻燃劑可以賣給我”). The manufacturer replied: “不能後加. 這個都是一開始拉絲的時候添加進去 的” (it cannot be added afterwards; it has to be added at the stage of drawing the filaments). When Chan pressed further, asking whether there was any FR agent that could be sprayed on the nets after installation (“也 沒有那個阻燃劑可以後加噴一點在上面”), the manufacturer confirmed: “沒有那種的啊陳總” (there is no such thing). The manufacturer then suggested: “能不能跟工地商量一下，下次直接發阻燃的” (can you discuss with the site to just send FR ones next time) [A2/item 111]. This

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exchange demonstrates not only that the nets delivered in October 2025 were non-FR certified, but also that there was active consideration of how to disguise their non-compliance after installation, a consideration that was ultimately frustrated by the technical impossibility of retrofitting FR properties.

1. Further, WhatsApp messages between Chan Yiu-fai and Zhong Fengping

(Chan’s wife) on 26 November 2025 (the day of the fire) provide further corroborating evidence that the nets which had been delivered to WFC were non- FR certified [A2/item 112]. 496.1. Zhong sent WhatsApp voice messages to Chan (her husband) stating: “宏 福苑火燭呀，你嗱嗱聲打電話搞掂佢啦” (Wang Fuk Court is on fire, hurry up and call to sort it out), followed immediately by: “仲有啊，我哋 後期送啲網過去，阿添叫你解畫，夾好口供解話打俾佢，因為我哋 嗰啲唔係阻燃網嚟㗎嘛” (Also, the nets we delivered later, Ah Tim is asking you to explain it away, align your story and call him, because ours are not FR nets) [A2/item 112]. 496.2. This message constitutes an admission that the nets supplied by Chan to WFC were not FR-certified, and further demonstrates an immediate attempt to coordinate a cover story upon learning of the fire.

1. The forensic evidence from the Government Laboratory independently

corroborates the above. Dr Lee confirmed that of 5 samples tested from Wang Cheong House (the block where the fire originated), 4 had after-flame times exceeding the 4-second threshold under GB 5725-2009, meaning 80% of available samples failed the standard [Day 25/103/7-14]. Dr Lee explained the apparent anomaly that some samples from other blocks appeared compliant: there

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were constraints at the scene because non-FR nets are more easily consumed by fire. As Dr Lee confirmed: “the remaining samples, they can be tested. The percentage of them fulfilling the criteria would be high because all the non-FR nets might have already been burned through” [Day 25/100/18-23]. This selection limitation means that the proportion of non-FR nets actually present at WFC was likely significantly higher than the tested sample set indicates.

1. Taken together, this evidence demonstrates that Prestige, through its directors and

its supply chain, knowingly supplied and used, and directed the purchase and use, of scaffolding nets uncertified for FR properties, and did so on multiple occasions including replacement batches supplied as recently as September 2025, just two months before the fire. The test certificate furnished to the LD and ICU purporting to demonstrate FR compliance did not correspond to the nets actually installed at WFC.

(i) The various complaints made by the WFC residents / IO to Prestige / Will Power, the PMC and Government Departments

1. Multiple complaints were made to government departments raising concerns

about the FR properties of scaffolding nets at WFC.

1. On 5 October 2024, the ICU was copied in an email in which “the enquirer raised

concerns on the fire risks of the WFC Renovation and stressed the importance of ensuring the fire-retardant properties of the scaffolding nets”257 [WS14/2134]. Around the same time, ICU also received “several other complaints and enquiries, covering issues including use of foam boards, quality of bamboo scaffolding, etc., pertaining to the WFC Renovation” 258 [WS14/2134].

257 KU Siu Ping 3rd WS §17 258 KU Siu Ping 3rd WS §17

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• The ICU received a further complaint in October 2025 about aging of old

scaffolding nets following Typhoon Ragasa 259 [WS14/2141]. The ICU sent reminder emails to the RI and conducted a site inspection on 28 October 2025260 [WS14/2141-2142].

• From the LD’s perspective, the FR issue was first engaged during the 1st

Inspection of the site on 22 July 2024, when SO-I Kwan “proactively requested PC&E to provide the relevant test report(s) of scaffolding nets to confirm their compliance with the fire-retardant standards stipulated in the Code of Practice for Bamboo Scaffolding Safety (5th Edition), which was not yet in force at the time”261 [WS1/378]. (ii) The relevant conversation records and other factual evidence

• In response to the LD’s request, Prestige furnished a test report on 24 July 2024

[D1/1550, 1599-1603]. 503.1. The report stated that the FR property of the scaffolding nets met the standard of GB 5725-2009, which is one of the acceptable standards stipulated in the 5th edition CoP [D1/709] [WS1/378]. 503.2. The certificate showed a specimen and manufacture date of 5 January 2024 and was issued on 8 January 2024. 503.3. SO-I Kwan also obtained a delivery note [D1/1604] from Prestige, which showed that the manufacturer made a direct delivery of the scaffolding nets to WFC after the FR test262 [WS1/379]. 259 KU Siu Ping 3rd WS §38 260 KU Siu Ping 3rd WS §§38-40 261 LAM Sau Ching 1st WS §81 262 LAM Sau Ching 1st WS §82

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1. 4. On the face of the documentation, the certificate appeared regular: issued

by a laboratory purportedly testing against GB 5725-2009, with a traceable delivery chain.

1. In view of the complaints and enquiries received involving multiple issues of

concern in September and October 2024, the ICU issued an email to the RI on 22 October 2024 “requiring that he took immediate actions to address such issues, as well as asking for the arrangement of a site inspection for ICU to better understand the circumstances” 263 [WS14/2134]. The date and time of the inspection (10:00 am on 28 October 2024) were confirmed the following day264 [WS14/2134].

1. Following the Chinachem Tower fire in October 2025, the ICU took the initiative

to send reminder emails to the RIs of all five courts under its purview, including WFC, on 23 October 2025 and 27 October 2025, “reminding them to ensure that the scaffolding was in good condition and that the fire-retardant properties of the scaffolding nets remained fully in compliance with the requirements of BD’s circular and LD’s Code of Practice for Bamboo Scaffolding Safety” 265 [WS14/2140-2141]. (iii) The unreliable test certificate presented by Prestige

1. It was only after the fire that the ICU discovered the test certificate provided by

Prestige was unreliable. Ku of the ICU confirmed: “After the fire there is a number and there is some discrepancy regarding two characters in the name of the agency” [Day 22/92/7-22]. Ku also accepted that “if you just rely on the

263 KU Siu Ping 3rd WS §18 264 KU Siu Ping 3rd WS §18 265 KU Siu Ping 3rd WS §§35-36

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certificate or the standard thereon, it’d be difficult for you to check whether the scaffolding nets were not authentic” [Day 22/105/23 - 106/1].

1. From the LD’s perspective, the same test certificate was received a second time

on 20 November 2025, during the 16th inspection, when replacement nets were installed after typhoon damage [D1/1685-1689, 1693]. The LD “focused on the test result but did not notice at the material time that the report received was the same as the one LD received on 24 July 2024”266 [WS1/379]. Lam accepted in oral evidence that this was “an area that should have been improved” [Day 16/37/23 - 38/9]. J2. How the use of scaffolding nets uncertified for FR properties resulted in rapid spread of the fire (i) The relevant factual evidence

1. Witness accounts and CCTV footage revealed that burning safety nets melted and

dripped as fire droplets onto lower floors, serving as an ignition source for other combustible materials on the scaffolding below. Wind-carried embers, including fragments of burning netting, travelled to nearby structures where they ignited safety nets, construction debris and other combustible materials on adjacent blocks (IFITF Report §§6.2.3.1-6.2.3.3 [ER1/85]) (ii) The IFITF’s investigations and expert evidence

1. The IFITF’s investigations, addressed in detail in Section G4 above, established

that the presence of safety nets potentially lacking FR properties was a critical factor in the rapid spread. The IFITF Report concluded: “if these nets were made of FR materials, even if ignited, the fire would likely have self-extinguished after the removal of the heat source, thereby minimizing the risk of igniting other combustible materials and reducing the overall spread of the fire” (IFITF Report

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§6.2.3.4 [ER1/86]). In small fire size cases, the CFD simulations confirmed that “the use of Sample 2 (FR) safety nets showed that the fire could not sustain itself, with no rapid fire spread having occurred. In contrast, the use of Sample 3 (non- FR) safety nets... resulted in significant fire spread and severe fire development” (IFITF Report §7.3.5.2 [ER1/125]).

1. The full-scale fire tests conducted in Sichuan and CFD simulations “highlighted

the critical role of FR safety nets in mitigating fire risks. FR safety nets significantly reduced the likelihood of fire propagation by preventing secondary ignitions and self-extinguishing small fires once the external heat source was removed. In contrast, uncertified, non-FR safety nets and samples collected from Wang Chi House sustained small fire propagation and generated flaming droplets that ignited other combustible scaffolding components, such as nylon strips, toe-boards and wooden planks” (IFITF Report §8.6.1.1 [ER1/174]). J3. The primary and supervisory responsibilities for such contributing factor (i) The FR standards and other requirements applicable to scaffolding nets administered by the BD

1. Before the fire, the BD’s regulatory framework (through multiple publications)

already required scaffolding protective materials to possess FR properties meeting recognised standards.

1. The relevant publications included clause F5.6(e) of the FS Code [J1-2/4169],

paragraph 4(a) of PNAP APP-70 [J1-1/688], paragraph 4(a) of PNRC 26 [J1- 1/689], paragraph 6.15 under Part C of the Guidelines on the Design and Construction of Bamboo Scaffolds [J1-1/1983], clause 11.2.10 of the Technical Guidelines on the Minor Works Control System (2024 edition) [J1-1/2917], and

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the circular letter to PBPs and RCs dated 21 March 2023 267 [J1-2/5915] [WS1/766].

1. The March 2023 circular letter, issued following the Mariners’ Club fire,

specifically stated that “protective net, screen, tarpaulin/plastic sheeting installed to cover the façade of buildings under construction, demolition, repair or minor works should have appropriate fire retardant properties in compliance with a recognised standard,” and listed three examples: GB 5725-2009, BS 5867- 2:2008 (Type B performance requirements), and NFPA 701:2019 (Test Method 2) [J1-2/5915].

1. The LD’s Code of Practice for Bamboo Scaffolding Safety reinforced similar

standards. 514.1. The 4th edition (prevailing until October 2024) required protective screens to be of FR material, but only specified standards for tarpaulin, not for nylon nets [D1/654]. 514.2. The 5th edition, gazetted on 19 April 2024 and effective from 19 October 2024, explicitly extended the FR requirement to “protective net, screen, tarpaulin/plastic sheeting installed on the face” [D1/709] and specified examples of recognised standards including GB 5725-2009, BS 5867- 2:2008 and NFPA 701:2019. 514.3. The 5th edition was the product of inter-departmental collaboration: the BD was consulted on the proposed amendments [D1/1932-1934], and the LD incorporated the BD’s FR requirements to achieve “a set of unified

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requirements across the relevant government departments to facilitate the compliance of the industry”268 [WS1/321].

1. Lam of the LD confirmed that comparing the two editions, the 5th edition was

“sufficiently clear” in extending the FR requirement to nylon nets [Day 16/42/11

• 43/9].

1. For WFC specifically, the building-safety regulation of scaffolding nets fell under

the ICU (not the BD directly) by virtue of the ICU’s delegated authority under the BO for sold HOS buildings. Ku confirmed that the BD’s circular letter of 21 March 2023 set out the recognised FR standards and that “the test report we received demonstrated compliance with the GB 5725-2009 standard” 269 [WS14/2138]. (ii) The primary responsibilities of Prestige and the RI

1. Under the BO regulatory regime, the primary statutory obligation to ensure

scaffolding protective materials met FR requirements lay with the RC and RI.

1. Sections 3 and 16 of the B(C)R require that all materials used in building works

must be of a nature and quality suitable for their intended use, adequately tested by recognised tests, and that appropriate precautionary measures must be taken [J1-2/5727, 5735-5736]. As AD Lawsons Yue of the BD confirmed: “PBPs and RCs are required to ensure that protective materials meeting the required fire retardant standards are used in building works under sections 3 and 16 of the B(C)R”270 [WS1/822].

268 YUEN Tsz Lok 1st WS §31 269 KU Siu Ping 3rd WS §28 270 YUE Chak Sang 1st WS §35

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• Under the MBIS, the RI has specific statutory responsibility. According to section

30D of the BO, an appointed RI “is responsible for providing proper supervision of the carrying out of the MBIS-prescribed repair and ensuring that the repair materials to be used are not defective and comply with all relevant Ordinances and Regulations, as well as codes of practice and practice notes”271 [WS14/2128].

• The ICU does not separately verify or certify building materials under the MBIS:

“Given the RI’s responsibility to ensure compliance of the materials with the relevant standards, there is no separate or additional requirement to seek approval from the ICU regarding the choice and use of building materials. Further, in line with BD’s practice, the ICU does not verify and certify building materials or carry out sample testing and periodical checks on the building materials used”272 [WS1/640].

• The deliberate manipulation by Prestige demonstrated by the evidence set out at

§§490-497 above (directing the supply and use of nets that were not FR-certified, furnishing an unreliable test certificate and, as the evidence indicates, selectively replacing nets to deceive inspectors), if proven, goes to the heart of primary responsibility. Ku stated: “We however could not have imagined and it was not foreseeable at that time that the RI / RC would deceive ICU or resort to the deliberate calculated moves through selective replacements of nets, noting that doing so would have required considerable effort and expense in sourcing and installing compliant nets specifically for the purpose of deceiving ICU. Such conduct, if proven, would represent a serious and deliberate subversion of the inspection process that ICU could not reasonably have been expected to anticipate or guard against”273 [WS14/2143]. 271 KU Siu Ping 3rd WS §4 272 KU Siu Ping 1st WS §47 273 KU Siu Ping 3rd WS §43

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(iii) The Government’s supervisory responsibilities

1. The ICU agreed that issues relating to scaffolding net fire risks fall within its

purview [Day 22/38/6-8]. The ICU’s supervisory role is exercised through complaint-handling and audit checks. As Ku confirmed: “A documentary audit will not enable you to spot whether the construction method is compliant or not; you can’t tell from a documentary check... You rely on the RI... Under the system” [Day 22/29/16-24].

1. The ICU had not met the RI (Ng Yeuk) at any point and received no replies from

him directly [Day 22/53/24 - 54/1]. Under the MBIS regime, “there is no statutory requirement for the ICU to supervise and conduct regular/ad hoc inspections of works” 274 [WS1/638]. The system is designed as a two-point monitoring mechanism: the ICU monitors the RI at submission of the inspection report and at completion; “there is no one monitoring the RI during the construction process unless there are complaints against RI” [Day 22/30/5-8]. Ku of the ICU confirmed this directly, “For the MBIS, one document would cover the entire housing estate... Under the MBIS from the start to the end of works, there is no requirement regarding regular inspections. It mainly targets complaints, about the handling of complaints” [Day 22/30/5-8].

1. From the LD’s perspective, the supervisory role was complementary. The LD’s

primary responsibility for scaffolding nets derives from the Code of Practice for Bamboo Scaffolding Safety and Regulation 49 of the CSSR, requiring contractors to provide FR protective nets on the faces of scaffolds. Inspection of FR certificates is conducted “on a need basis. If fire is a prevailing risk on site or there is any complaint in relation to fire risks on scaffolding, contractors will be requested to provide fire retardant certificates of scaffolding nets to confirm their

274 KU Siu Ping 1st WS §43

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compliance”275 [WS1/341]. The LD’s frontline officers “do not have the requisite expertise to authenticate or verify the certificates” issued by specialist laboratories276 [WS1/342]. Lam of the LD confirmed: “we don’t have the relevant professional expertise. We do not do any sampling, we do not take this for testing” [Day 16/38/20-22].

1. The LD’s position is that the BD, as the authority setting the FR standards for

scaffolding protective nets, “should also be the authority taking the lead in specifying whether and how checks and inspections, such as fire-retardant test or sample taking of protective nets for testing by recognised laboratories, should be conducted to ensure compliance of the relevant requirement in a coherent manner”277 [WS1/322]. (iv) The actions taken by the ICU at WFC, including the ICU’s practice of giving advance notice

1. The ICU conducted three site inspections involving scaffolding net quick tests:

28 October 2024, 18 November 2024, and 28 October 2025. Ku confirmed: “a total of 17 spots were randomly picked by me for conducting quick tests. No prior notice of the precise location of such spots was given to the RI/RC” 278 [WS14/2133-2134].

1. The ICU primarily relied on the (now known to be unreliable) test certificate; the

quick tests “served to provide a practical (albeit rough) indication of the fire- retardancy of the scaffolding nets under actual site conditions” and were “conducted to provide a further quick reference, as they could be administered

275 LI Man Pong 1st WS §28 276 LI Man Pong 1st WS §30 277 LI Man Pong 1st WS §32 278 KU Siu Ping 3rd WS §16

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readily without much time and costs as a handy cross-check”279 [WS14/2135- 2136].

1. On 28 October 2024, the first quick test on the rooftop showed the net igniting

for more than 10 seconds. Ku of the ICU confirmed in oral evidence that this was “problematic” at the time [Day 22/82/1-2], but before any further action could be considered, the RC’s representative immediately blew out the flame and re-tested the same piece twice; for both subsequent attempts the sample was not ignited [Day 22/81/8 - 83/11]. Quick tests conducted at two other locations of WFC were also satisfactory on that day. Importantly, as Ku explained, there was room for improvement (such as what resulted from time constraints) in the inspection on 28 October 2024 which was concerned with a host of other issues. Hence, Ku took the initiative to conduct a more focused inspection on 18 November 2024 to conduct 12 additional quick tests of nets on random locations at WFC to verify the result and allay his concern. It is thus not entirely fair to expect Ku to focus only on a single quick test result whilst ignoring the rest especially given the immediacy of the re-tests on the same piece of sample. Even if one is to focus on the single quick test result alone, Ku explained that “we considered such arrangement acceptable since it is not uncommon to re-test the same sample to confirm the test result after a failed attempt for the first time” 280 [WS14/2137]. Given that the two re-tests produced negative results, and coupled with the test report provided by the RC’s representative and further quick tests conducted at a larger scale on 18 November 2024, the ICU did not raise further concerns on the whole. Whilst there is room for improvements, in fairness the matter should also be viewed holistically and in context. Further, without shying away from the above, the mitigation is that the underlying cause was deliberate deception

279 KU Siu Ping 3rd WS §21 280 KU Siu Ping 3rd WS §26

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through selective net replacement, which could not reasonably have been detected by a quick test alone.

1. As mentioned, to allay Ku’s concern, on 18 November 2024, the ICU conducted

12 further quick tests across five blocks. Ku confirmed: “We had no specific concerns on all of the 12 samples tested. Taken together with our earlier review of the test report... the cumulative results of the quick tests across the inspections provided no ground to question the fire-retardant properties of the scaffolding nets at the time” 281 [WS14/2139-2140].

1. Thereafter, concerns over scaffolding nets resurfaced following the destruction

of nets by typhoon and the Chinachem Tower fire in October 2025. These led to initiatives taken by the ICU itself, alongside complaints made by Mr Kong [WS2/1354-1358], a resident of WFC. They culminated in the inspection on 28 October 2025 which focused on the conditions and protective function of the old scaffolding nets. Other than that, quick tests on a few samples were also conducted as a cross-check. There were no specific concerns on the test results during this inspection282 [WS14/2142].

1. As to the ICU’s practice of giving advance notice before site inspections upon

receipt of complaints: 531.1. Ku explained that “the purpose of such site inspections was to address complaints and enquiries, and that the RI is the responsible party under the MBIS regime and the Registered Contractor is the one who carries out actual works, it is imperative that the RI and/or RC (or their representatives) are present” so that ICU could “better understand the actual situation,” “assess whether the subject matter being complained or

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enquired about could be substantiated,” and “request the RI and/or RC... to give explanations as well as make improvements/rectifications as necessary”283 [WS14/2131]. 531.2. Ku further stated that “this inspection was not a site audit under the MBIS regime” and that “one of the priorities at the time was for the multitude of issues to be brought to the immediate attention of the RI and RC such that they could be addressed and dealt with sooner rather than later, with a view to protecting the interest of residents and the public”284 [WS14/2135].

1. The Government strenuously denies any allegation of collusion or intentional

misconduct by the ICU in giving advance notice (although we understand from the examination stage that this does not seem to be the position being advanced by Counsel for the Committee). There is in any event no evidence before the Committee, whether direct or circumstantial, to support such a serious allegation. To the contrary, the evidence positively negates it. 532.1. First, Ku’s stated rationale for giving advance notice is not unreasonable on its face: the purpose of the site inspections was to address complaints and enquiries, which required the RI and/or RC (or their representatives) to be present so that the ICU could understand the actual situation, assess whether the complaint could be substantiated, and request explanations or rectifications as necessary. This is consistent with the self-regulatory spirit of the MBIS, under which the ICU’s role is to hold the RI to account rather than to conduct its own independent works supervision. 532.2. Second, the suggestion of collusion is wholly inconsistent with the affirmative steps the ICU took. If the ICU were colluding with the RC,

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there would have been no reason for Ku to conduct quick tests at 17 randomly selected locations, to raise fire hazard concerns directly with the RC at the 28 October 2024 inspection, to review the test certificate, to send reminder emails to the RI following the Chinachem Tower fire, or to conduct the further inspection on 28 October 2025. The totality of the ICU’s conduct is that of a supervisory body engaging actively, within the constraints of its system, with the issue as it understood it to be. 532.3. Third, the implausibility of collusion given the steps the ICU affirmatively took (quick tests, certificate review, follow-up inspections at 17 locations, reminder emails to the RI); and 532.4. Fourth, the deliberate deception by Prestige, through selective replacement of nets requiring “considerable effort and expense in sourcing and installing compliant nets specifically for the purpose of deceiving ICU” 285 [WS14/2143], constituted a “serious and deliberate subversion of the inspection process that ICU could not reasonably have been expected to anticipate or guard against” 286 [WS14/2143–2144]. (v) The actions taken by the LD at WFC

1. The LD conducted 16 site inspections and one surprise surveillance visit at WFC

between July 2024 and 20 November 2025. On 22 July 2024, SO-I Kwan proactively requested the FR test certificate from Prestige. Upon receipt, the LD verified that the stated standard (GB 5725-2009) was one of the recognised standards. The LD also obtained the delivery note establishing a traceable supply chain287 [WS1/379]. On 11 November 2024, the LD made a referral to the ICU by memo, raising “the fire-retardant properties of scaffolding nets arising from

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previous complaints” and stating that “the case is referred to you for any actions you may deem necessary” 288 [WS1/365]. J4. Systemic and/or operational weaknesses on the regulatory level

1. The MBIS has not required onsite inspections by the ICU in the course of works.

This is not an ICU operational choice. The then Head of ICU, Lau Fu-kwok, accepted this directly: when asked whether the system at the time had provision for auditing or vetting the RI, Lau fairly accepted that in hindsight, the system had not addressed this “in terms of the design” [Day 24/64/4-14].

1. The ICU’s practice of carrying out inspections with advance notice given to the

RI/RC did not align with the BD’s own practice. Both the FSD and BD conduct inspections without prior notification upon receipt of complaints [Day 22/61/8 - 62/23]. Ku accepted he was not aware of the non-alignment of the ICU’s practice [Day 22/61/8 - 62/23]. Lau accepted in oral evidence that “in hindsight” he should have taken a closer look at the inspection practice discrepancy [Day 24/82/24 - 83/5]. After the fire, the ICU changed its practice: “most of our checks will be conducted in a surprise manner. We will not disclose them in advance” [Day 24/80/23 - 82/23]. The Government acknowledges this was an operational area requiring improvements in terms of the discrepancy in practice. As with other aspects of the supervisory framework, the practice assumed good faith on the part of the professionals subject to it, an assumption that the evidence demonstrates was deviously exploited and undermined.

1. As to the pre-fire practice in respect of verifying the fire retardancy of scaffolding

nets between the ICU and BD, there is apparent difference but the evidence is not unequivocal. On the one hand, the BD did not conduct any quick tests on scaffolding nets due to the uncertainty on the reliability of such tests, as they were

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not conducted in the laboratory under controlled conditions. In other words, they rely on the test certificates. In contrast, the ICU conducted quick tests as supplementary measure or reference, alongside the test certificates. Whilst much may be said about their limitations, it seems fair to say that such quick tests (albeit not comparable to laboratory testing introduced post-WFC Fire) did offer a degree of check and balance. On the other hand, as to the test certificates, the BD checked laboratory accreditation against HOKLAS or mutual recognition schemes [Day 20/31/7 - 33/20]. In this regard, Ku explained that the BD’s circular letter of March 2023 did not expressly require HOKLAS accreditation, and that “before the fire we need to have HOKLAS or a mutually recognised organisation for testing. We don’t see this in the guidelines or in the code” [Day 22/94/1-10]. Post-fire, the encrypted and digitally signed verification system introduced under PNRC 85 [J1-2/6200-6209] removes any uncertainty and addresses any such systemic vulnerability.

1. As mentioned, the quick tests conducted by the ICU were merely an ancillary

reference – they were never intended as a substitute for laboratory testing. Ku accepted: “Whether the scaffolding nets meets fire retardancy requirements, that is GB 5725, we need to draw reference from the laboratory tests” [Day 22/106/19

• 107/6]. However, Ku explained that prior to the introduction of PNRC 85, there

was no established mechanism for the ICU to send scaffolding nets to the Government Laboratory for testing absent proof that the nets had been rigged or were otherwise non-compliant; in other words, if one could only rely on the certificate or the standard thereon, it would be difficult to check whether the scaffolding nets were not authentic [Day 22/105/5 - 106/1]. In this regard, Dr Lee confirmed in oral evidence that such on-site tests, while not equivalent to laboratory testing, can nonetheless serve as a reference: when discussing a burn test conducted on site, she observed that “if they want to have some reference” from such a test, they could have regard to the observable characteristics (such as

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the net being ignited, the flame lasting for a period of time, and flaming droplets): [Day 25/101/15-17; Day 25/102/4-9].

1. Furthermore, as Ku fairly pointed out when Counsel for the Committee suggested

the quick tests gave residents a false sense of security: “Probably someone had rigged the scaffolding nets, not because we have conducted additional quick tests” [Day 22/107/11-21]. The false assurance arose from the rigged nets, not from the quick tests. The quick tests were a supplementary measure beyond what the system required; the fact that they could not serve as a definitive test is beside the point, as they are never intended as a substitute for laboratory tests; rather their purpose was to flag any obvious concerns, not to certify compliance as such.

1. The Government also acknowledges that the ICU’s reply to a complaint received

in October 2025 about aging scaffolding nets following Typhoon Ragasa did not specifically address the fire retardancy concern raised by the complainant, as Ku of the ICU accepted during oral evidence [Day 22/104/9-16]. The reply to the complainant did not fully convey the specific follow-up actions being undertaken or address the particular concern raised, and there is room for improvement in this regard.

1. The LD’s enforcement methodology also relied on checking contractor-supplied

FR certificates against the recognised standards, rather than independent sampling and testing. Li Man-pong explained: “Given the technical nature and variety of these requirements and standards, it is not feasible for OSOs, who do not have the relevant technical expertise, to conduct sampling and then re- examining of such plant, equipment or items to check for their compliance with all the standards mentioned in LD’s publications during inspections. Accordingly, inspection of testing certificates issued by laboratories and relevant authorities

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is the current method used by OSOs to perform compliance check”289 [WS1/345- 346]. This is an area for improvement of the LD’s enforcement framework, not specific to WFC.

1. Despite awareness of the FR concern from at least July 2024, the LD did not

proceed further to consult the BD, ICU or the Government Laboratory about its lack of expertise in authenticating certificates [Day 16/39/13-19]. The Government acknowledges that consultation could have been made. The referral to the ICU on 11 November 2024 [D1/1162] was a partial response (in that it raised the FR issue with the ICU), it came approximately four months after the first certificate was received and was not accompanied by a request for laboratory testing.

1. The 4 October 2024 email reply to a complainant stated that scaffolding nets did

not involve FR standards under safety regulations. Lam accepted in oral evidence that this statement was “incorrect” and that a complainant relying on the information would be “misled” [Day 16/48/6-25] – that said the Committee may note that well before such email reply the LD had in fact followed up and had asked for and obtained a FR test certificate beforehand (see Section J1 above). The email was written 15 days before the 5th edition CoP took effect; Lam had already (in July 2024) requested the FR certificate as a matter of practice and should have mentioned it, meaning there was an internal inconsistency between the LD’s own operational practice and the information given to the complainant. A corrective reply was later issued in December 2024 [D1/1096].

1. Separately, the fact that LD did not notice in November 2025 that the FR

certificate submitted by Prestige for replacement nets was identical to the certificate submitted in July 2024 is also acknowledged as an operational area

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requiring improvements. Lam accepted that “looking back” this was “an area that should have been improved” [Day 16/37/23-38/9].

1. Turning now to the improvements already and to be introduced, and further

studies to be conducted, the BD has introduced PNRC 85 [J1-2/6200-6209], promulgated in mid-December 2025, with three main new requirements 290 WS1/829. 544.1. First, RCs must obtain FR performance test reports with each batch of scaffolding nets received and keep them on site for inspection at any time. 544.2. Second, before commencing works on an existing building, samples must be taken and a test report confirming compliance obtained before nets may be installed; inspection must be conducted by Government-designated accredited laboratories, and test reports must be encrypted and digitally signed. 544.3. Third, upon receipt of notification of scaffolding net installation, the BD will randomly select projects for on-site inspection; non-compliance results in immediate cease work orders.

1. The ICU has introduced site inspections at least once every four months for large-

scale MBIS renovation projects [Day 24/90/1-11]. The ICU has established a two-way communication channel with the FSD for large-scale renovation projects, under which the ICU provides lists to the FSD when works commence, and the FSD’s inspection findings are passed to the ICU for follow-up [Day 24/90/17 - 91/13]. The ICU now uses computer-randomised selection for inspection locations to prevent manipulation [Day 22/74/13-19]. The ICU also

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requires RIs to submit regular site supervision records during works 291 [WS1/618].

1. Since May 2026, the ICU has also implemented project-based integrated control

for courts with large-scale renovation in progress. This approach is consistent with the risk-based methodology advocated by the experts before the Committee. Under this approach, the ICU conducts holistic risk assessments taking into account various minor works conducted in the same court concurrently, and formulates inspection and random check plans during the course of works based on the risk levels. These risk assessments and plans are regularly reviewed through internal meetings across teams chaired by ICU’s directorate staff (Table of Improvement Measures, Item B3(i)).

1. The FSD has established a mechanism with the BD and ICU under which, every

two weeks, information is provided to the FSD on buildings with scaffolding nets. The DFS confirmed: “For the buildings with scaffolding nets, whenever there is any shutdown, we inform the BD or the Housing Department at once. We will not allow any works to continue because of the shutdown of the fire service system. There were five buildings having this situation and we already ordered works to be stopped” [Day 19/70/4-16]. As at April 2026, approximately 600 buildings under renovation have been inspected by the FSD [Day 19/71/12-13]. The FSD’s operational teams also formulate contingency plans with new elements specifically addressing the WFC scenario: “Having drawn reference from the Wang Fuk Court fire, if buildings nearby have scaffolding nets, in the contingency plan they need to detail how the fire will be handled in the case of any spread” [Day 19/70/22 - 71/5].

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• The LD will amend the CoP to incorporate the BD’s PNRC 85 requirements292

[WS1/326] and has since January 2026 been deploying its staff to support the BD’s work in taking samples of scaffolding nets under PNRC 85 (Table of Improvement Measures, Item E4(ii)). The LD will also “explore opportunities to collaborate with BD and FSD for joint inspections to RMAA sites in respect of areas with common concern” 293 [WS1/327]. K. THE USE OF POLYVINYL CHLORIDE FOAM BOARDS AS COVERS ON WINDOWS AS TEMPORARY PROTECTION

• The IFITF found that polystyrene window covers installed during the renovation

obstructed residents’ awareness of the fire, delayed their response, and contributed to the vertical spread of fire. Toxicological reports indicated that 102 of the 168 fatalities had elevated blood carbon monoxide saturation levels, consistent with inhalation of toxic gases generated by the combustion of polystyrene materials.

• This section examines the extent to which foam boards were used at WFC, the

complaints raised, the representations made by the contractor, the causal link to fire spread and casualties established by the IFITF, and the respective responsibilities of the contractor, RI and relevant Government departments.

• The primary responsibility for this contributing factor lies with Prestige, which

both used and directed the use of combustible foam boards extensively and for a prolonged period in breach of its own express representation to use non- combustible materials in a specific manner, and with the RI (Ng Yeuk and Will Power which purportedly was engaged to provide RI services), who bore the 292 YUEN Tsz Lok 1st WS §43 293 YUEN Tsz Lok 1st WS §45

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statutory duty to ensure that construction methods complied with section 16 of the B(C)R.

1. The Government acknowledges that the ICU, having raised the fire hazard

concern at the 28 October 2024 inspection, could have followed up on the matter in a more proactive manner; such operational weakness, together with the lack of more specific prescriptive standards for temporary window protection materials under the pre-fire regime, is addressed below. K1. Extensive use of foam boards

• The evidence establishes that it was Prestige that directed the use of foam boards

to cover windows at WFC.

• Based on the meeting minutes [C1-2/1145], at the construction management

meeting on 17 June 2024, Prestige proposed using foam boards despite Will Power’s express warning that foam boards are flammable objects and will cause a lot of smoke during fire and its suggestion to use protective boards instead. Prestige insisted on using foam boards, and Will Power stated that if the contractor insists, they have to bear their own risk.

• On 18 July 2024, Prestige issued a letter to Will Power, confirming the use of

foam boards [M1/240].

• From August 2024 onwards, sub-contractors engaged by Prestige placed orders

for foam boards. On 19 September 2024, Hoi Tak Construction Ltd (the sub- contractor responsible for the facade works of Wang Kin, Wang Tai and Wang Cheong Houses [WS2/1457]) ordered foam boards expressly specified as non- FR (“非阻燃”) [C1-2/1099]. 206

• Prestige’s instructions to sub-contractors to seal residents’ windows with foam

boards are further confirmed by the reply to the Committee by Yiu Kam-fai of Shing Construction Co., Limited, the sub-contractor responsible for the facade works of Wang Yan House and Wang Tao House. Yiu states that before commencing external wall repair works, Gordon Ho, a director of Prestige, orally instructed him to seal every household’s windows with foam boards to prevent stone debris from breaking residents’ glass windows during chiselling, and that the sealing had to be completed before any other external wall works could commence [WS2/1468].

• There are also invoices indicating that foam boards were supplied to other blocks

through another sub-contractor, New Nam Fong Construction Limited [C1- 2/1128, 1130, 1132, 1134].

• A WhatsApp exchange on 2 October 2024 [A2/item 124] between Gordon Ho of

Prestige and the then MC Chairman Tsui Moon Come confirms that Prestige was aware that residents had strong objections to the foam boards (“居民覺得 FOAMBOARD 咁大意見”) and that the question of their fire retardancy was a live issue. Ho asked whether the second and third phases should switch to hollow boards instead. Tsui responded by asking whether foam boards that were less flammable could be found. Gordon replied: “我再問下廠，但即使佢話有我都 唔夠敢擔保一定有阻燃” (I’ll ask the factory again, but even if they say they have it, I wouldn’t dare guarantee it’s definitely fire-retardant). Tsui suggested that a video showing the board self-extinguishing after burning would suffice without needing a certificate. Gordon then confirmed: “收到，如我訂到可於第 二及三期工程轉用，但注意，第一期無法更換” (Understood. If I can order them, they can be used for phases 2 and 3, but note that phase 1 cannot be replaced). This exchange demonstrates that (at least) as at 2 October 2024, 207

Prestige knew the foam boards already installed in phase 1 did not demonstrate FR properties, and that they would remain in place without replacement. (i) The various complaints made by the WFC residents / IO to Prestige / Will Power, the PMC and Government Departments

1. Multiple complaints were made to government departments raising concerns

about the use of foam boards to cover windows at WFC. The ICU received a total of three complaints relating to the use of foam boards as temporary window protection between 17 September and 17 October 2024294 [WS14/2144]. The first enquiry, received on 17 September 2024, was titled “有關反映大埔宏福苑正進 行大維修工程使用發泡膠封窗是否符合安全規定” [I1-4/8221-8228]; the second, received on 23 September 2024 [I1-4/8229-8251], was also referred to the FSD and BD by the 1823 hotline295 [WS1/650]. (ii) The relevant conversation records and other factual evidence

1. The ICU’s site inspection on 25 September 2024 was its first direct observation.

Ku observed that “some materials labelled as ‘CO2 生態健廉地暖板’ were stored on ground floor” and that the ICU “also entered into a block and took the lift to one of the upper floors and observed that a foam board was used to cover the window of the lift lobby from outside”296 [WS14/2147]. For the three blocks with scaffolding nets erected, the ICU “were unable to see the condition of the windows of the domestic flats by looking from the outside” 297 [WS14/2147].

1. The ICU’s site inspection on 28 October 2024 was the pivotal occasion. Ku asked

the RI’s assigned person and RC about the process of hacking off external finishes, and “expressed concern on the temporary protection that would affect natural

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lighting and ventilation, and the possible complaints from residents” 298 [WS14/2150]. The RC’s explanation was that “the RC’s workers would proceed with the hacking off works every three floors at a time, and the foam boards were only used for temporary protection of window glazing around each floor during hacking off, and would be removed immediately upon completion of the hacking off works around each floor” 299 [WS14/2150-2151]. On the basis of this explanation, “the use of foam boards appeared to be both limited in scope and short in duration, confined to the immediate vicinity of the works being carried out at any given time” 300 [WS14/2151].

1. Critically, Ku also raised with the RC the concern “that the use of foam boards

could pose a fire hazard to residents.” 301 The RC responded that “they would use non-combustible material for such temporary protection” 302 [WS14/2151]. Additionally, Ku “pointed out that the foam boards were piled up too close to the buildings and requested them to be moved away from the buildings. The contractor agreed to follow up on this” 303 [WS1/651-652]. The RC’s representation was subsequently reduced to writing and made known to residents by way of a Q&A published by the WFC IO on 23 November 2024: “問：為何 現時窗邊已沒有保護？答：宏業表示打鑿時才會有保護，完成打鑿後會拆 除窗外保護物” 304 [I2/9630] [WS14/2145].

1. After the three inspections in September to November 2024, the ICU received no

further foam board complaints and did not follow up further on the issue. Ku explained: “on 28 October we thought that it was not an issue anymore. That’s

298 KU Siu Ping 3rd WS §61 299 KU Siu Ping 3rd WS §61 300 KU Siu Ping 3rd WS §62 301 KU Siu Ping 3rd WS §63 302 KU Siu Ping 3rd WS §63 303 KU Siu Ping 1st WS §60(ii) 304 KU Siu Ping 3rd WS §45(b)

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why we did not notice that” [Day 22/130/14-18]. He further gave explanations for not detecting the extensive use: “There’s also one thing. Hacking and then removing the protective materials is an approach adopted by the trade. It is not infeasible” [Day 22/123/10-16]. (iii) The actual manner of use of foam boards at WFC

1. The reality, as it emerged after the fire, was that the foam boards were in place

for far longer than the RC had represented. Ku accepted: “Looking at the papers, it has been more than a year” [Day 22/121/21 - 122/2]. When asked whether the ICU was unaware because there were no further complaints, Ku confirmed: “That’s one of the reasons. Afterwards, we saw from some documents in January 2025 — we saw exchanges between residents and the contractor. We wondered why the temporary protective materials were not there. The contractor said that that was there temporarily under the hacking process” [Day 22/122/11-19].

1. The IFITF’s post-fire investigation confirmed the extent of foam board coverage.

The IFITF Report records that polystyrene window covers were “installed as a protective measure from debris on unit and common corridors windows” across the affected buildings (IFITF Report §10.5.1 [ER1/217]).

1. The scale of coverage is evidenced by the IFITF’s finding that among 291 witness

statements, only 43 individuals (14.7%) reported seeing fire or smoke, and among 579 questionnaires, only 48 respondents (8.3%) indicated that they had witnessed the fire (IFITF Report §10.5.3 [ER1/218]). These figures are consistent with windows being covered on a widespread, not localised, basis across the estate.

1. The ICU’s witness statements acknowledged that upon close-up review in

preparation of the witness statements, Ku identified that some windows in photographs from subsequent inspections (conducted for unrelated complaints

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such as A/C hoods and structural issues in January 2025 and June 2025) appeared to be covered by foam boards. However, at the time of those inspections, the ICU’s focus was on the subject matter of those complaints; the ICU did not pay particular attention to window covers because the RC had represented foam boards would be temporary, and no further foam board complaints had been received after October 2024 [WS1/623, 632-635]. K2. How the extensive use of foam boards to cover up windows resulted in rapid spread of the fire and heavy casualties (i) The relevant factual evidence

1. The IFITF’s investigations, addressed in Section G5 above, established that

polystyrene window covers “obstructed residents’ view of the external environment... hindered occupants from realizing the severity of the fire in neighbouring buildings as well as their own buildings, lowering their awareness and in turn delaying their response” (IFITF Report §10.5.1 [ER1/217]). As mentioned above, among the 291 witness statements, only 43 individuals (14.7%) reported seeing fire or smoke; among the 579 questionnaires, only 48 respondents (8.3%) indicated they had witnessed the fire - “surprisingly low numbers for such a large fire” suggesting that the foam board covers “may have significantly hindered occupants’ ability to perceive the situation outside their units, thereby delaying their escape” (IFITF Report §10.5.3 [ER1/218]). (ii) The IFITF’s investigations and expert evidence

1. Beyond obstructing awareness, the combustible polystyrene panels contributed

to the vertical spread of the fire. The IFITF identified four key mechanisms: fueling the external fire spread as the panels burned readily on the building façade; falling as ignited debris that sparked fires beneath windows; generating burning fragments light enough to travel significant distances and ignite secondary fires; and producing burning droplets that dripped onto nearby combustibles, igniting

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them and causing additional fire spread (IFITF Report §10.5.6 [ER1/218-219]). Dr To Chi-wing further confirmed in oral evidence that foam boards attached to windows, when ignited, could cause the breakage of the windows themselves, thereby facilitating the entry of fire and smoke into the units [Day 26/69/6-8, 17- 23]. “Once windows were breached, flames and smoke entered units easily and directly exposing residents to dangerous conditions, not to mention the combustion of such polystyrene materials generated toxic gases such as carbon monoxide” (IFITF Report §10.5.4 [ER1/218]). Toxicological reports indicated that 102 of the 168 fatalities had blood carbon monoxide saturation levels ranging from 15% to 80% (IFITF Report §10.5.4, fn 179) [ER1/218]). K3. The primary and supervisory responsibilities for such contributing factor (i) The standards and requirements applicable to the use of foam boards as protection

1. Section 16(1) of the B(C)R [J1-2/5735] provides that “in carrying out building

works or street works — (a) appropriate construction methods and procedures must be adopted; and (b) appropriate precautionary measures must be taken.”

1. This is a general provision that applies to all materials used in building works,

including temporary protective materials. The oral evidence of AD Karen Cheung of the BD is unequivocal: “Extensive use of foam boards to cover windows is an improper work procedure and that may be against section 16 of the Building (Construction) Regulation” [Day 20/41/10 - 42/5]. When asked directly whether the BD would approve the use of foam boards, AD Karen Cheung of the BD stated: “We won’t approve that. Instead, we would take enforcement actions” [Day 20/42/18 - 44/7].

1. However, a degree of flexibility was identified in the other evidence. Franco Tse,

the BD secondee at the ICU from April 2023 to July 2025, gave evidence that

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short-term, localised use of foam boards during active chiselling might not contravene section 16: “When a certain floor is going through chiselling work, and let’s say you cover the windows with foam boards and you remove the foam boards after chiselling is completed, for such a short period of time I believe that it is not in contravention of any regulation or in contravention of section 16 of B(C)R. We need some sort of flexibility in our work” [Day 20/85/19 - 86/24]. The ICU’s Ku agreed with this view: “If it’s just a short time, several floors at a time, it doesn’t necessarily contravene section 16 of B(C)R” [Day 22/159/8-14].

1. Notably, AD Lawsons Yue of the BD said in paragraph 72 of his Witness

Statement: “Subject to further investigation, the extensive use of foam boards at the external walls is in contravention with the above requirements.” 305 [WS1/836] It would appear that, in a similar vein, what AD Lawsons Yue of the BD took issue with is the “extensive use of foam boards” at the external walls, which leaves a degree of flexibility whether the use of the same for a short period at localised area might or might not contravene the law. He also opined that the foam boards “had brought about additional fire hazards to the buildings” and “might also have blocked the occupants’ sight of the severity of the fire and delayed their response to leave the buildings” 306 [WS1/836].

1. The distinction identified by both the BD (Karen Cheung) and ICU (Franco Tse

and Andy Ku’s) position is therefore one of extent and duration: localised, short- term use during active chiselling may be acceptable under a flexible reading of section 16; extensive, prolonged use covering windows across multiple blocks for over a year is not. The ICU was deceived about the extent and duration of use at WFC. The RC’s representation (that foam boards would be used only “three floors at a time during active hacking and removed immediately upon completion”

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for a short period) was not simply false: it was an outright lie. The extensive and prolonged use was contrary to what the ICU was told, and constituted a further element of the wrongdoings by Prestige.

1. A further point arises under clause F5.6(f) of the FS Code, which requires

inflammable and combustible materials in a building to be “stored under safe custody” [J1-2/4170]. Both Tse and Ku took the view that foam boards in use as window covers (as distinct from foam boards merely stored on site) do not fall within this “stored under safe custody” limb. Tse explained: “As the foam boards are not put in other places and yet it is already attached to the windows, I believe that this should not be regarded as needing to be stored under safe custody” [Day 20/89/4-8]. Ku agreed with Tse’s understanding [Day 22/161/20 - 162/23].

1. Before the fire, no specific prescriptive standard for temporary window protection

materials existed in any regulation, code of practice or practice note. Ku confirmed: “the term ‘appropriate precautionary measures’ is a very broad concept, and there is no specific requirement in respect of the use or standards of foam board as temporary protection in statutory provisions”307 [WS1/648]. Ku was “unaware that there is any specific guideline on the use or standards of foam board in other documents (such as BD’s Code of Practice, Practice Notes for Authorized Persons, Registered Structural Engineers and Registered Geotechnical Engineers, Circular Letters, etc.), or any prosecution action taken previously against the use of foam board in contravention of section 16 of B(C)R” 308 [WS1/648]. This absence of specific guidance contextualises the regulatory environment in which the ICU and other departments were operating.

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(ii) The primary responsibilities of Prestige and the RI

1. Under the MBIS Code, the RI and RC bear primary statutory responsibility for

ensuring repair materials comply with the BO: “the RI and RC shall comply with the BO and regulations and shall provide supervision to the rectification and repair works to ensure that the works are prepared, carried out and completed safely and up to the required standards” 309 [WS1/684-685]. The primary responsibility for the extensive and prolonged use of combustible foam boards to cover windows (in breach of the RC’s own express promise to use non- combustible materials) lies squarely with Prestige and Will Power / the RI (Ng Yeuk). (iii) The Government’s supervisory responsibilities

1. Ku agreed that the question of whether foam board use contravenes section 16 of

the B(C)R falls within the ICU’s purview [Day 22/38/2-5]. However, there was “neither statutory provision on the fire-retardant properties under the BO prohibiting or restricting the use of foam boards as temporary protection, nor clear guidelines from BD of the same that ICU could rely on to act on,” and ICU “hence could hardly take further actions in this regard. ICU also had no basis to raise doubt or demand a test, as there was no standard to test against in the first place” 310 [WS1/686]. That said, Ku confirmed: had he “been aware that the foam boards were used for covering up windows extensively, we would and must have taken follow-up actions” 311 [WS14/2152].

1. As to the FSD’s position, a complaint was received by the FSD on 23 September

2024 regarding polystyrene boards at WFC. The FSD inspected the site on 25 September 2024 and found polystyrene boards at open ground areas outside three

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blocks; the finding was recorded as “not irregularity concerning the FSD”312 [WS1/99]. The complainant was informed on 3 October 2024 that the issue of fixing polystyrene boards on building windows “was not under the purview of FSD” 313 [WS1/99]. As the complaint was also sent to the ICU, no further referral was made by the FSD314 [WS1/99]. However, as addressed below, the DFS accepted in oral evidence that the FSD’s statutory powers are not confined to active FSIs and that the division of work with the BD is not calcified.

1. AD Yung accepted in oral evidence that, before the fire, the guidelines to frontline

staff on how to handle such enquiries were “by no means clear” [Day 17/20/3-4]. He confirmed that the FSD has since implemented a new referral mechanism: “From now on, this is being practised, whether it is complaints or enquiries, if the residents have any questions about fire safety issues, we would seek consent and for referral to be done to the relevant departments” and that the FSD would follow up with the receiving department to confirm receipt Day 17/18/17 - 19/7.

1. The DFS addressed the inter-departmental division of work in relation to foam

boards and access openings in more detail during his own oral evidence. His evidence establishes three propositions of significance for the Committee’s assessment of the FSD’s role. 582.1. First, notwithstanding the inter-departmental division of work in general, the FSD’s statutory powers are not confined to active FSIs. The DFS confirmed that the powers of the FSD under sections 7 and 8 of the FSO are “extensive and comprehensive” and “are not confined to fire service installation and equipment or ‘non-building works’, which are only a few

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amongst many aspects of fire safety and firefighting” [Day 19/53/1-8]. When asked directly whether it was correct that “We can’t rigidly say that passive FSIs are not under your portfolio. You are only in charge of active ones,” the DFS confirmed: “Right” [Day 19/60/17-22]. He further confirmed: “when it comes to fire safety, you have the statutory role to protect life and property and roles on fire protection and fire hazards. So you can’t say that if it is a passive FSI then you don’t have a role to play, because saying so would be incorrect” [Day 19/61/10-15]. 582.2. Second, the division of work between the FSD and BD is “not calcified” and operates on a complementary, not exclusive, basis. The DFS stated: “our division of labour is not calcified. We do not have a silo portfolio; we share the same portfolio” [Day 19/58/3-4]. He confirmed that Wilson Chan J in the U Storage decision [A5/785] accepted that “when you both have power, your roles are complementary to each other” [Day 19/61/6-7]. The practical mechanism is sequential consultation: the FSD will “talk to the BD first” before issuing a Fire Hazard Abatement Notice on a matter within the BD’s regulatory portfolio, because the BD’s scope is wider and encompasses structural, lighting and ventilation considerations that the FSD would not independently assess [Day 19/84/14-19]. But this requirement for prior consultation does not negate the FSD’s power: “if you think there is a need to exercise the power, you will?” to which the DFS confirmed: “Yes” [Day 19/63/1-3]. 582.3. Third, the DFS accepted that the ultimate responsibility for fire safety rests with the FSD. When asked: “Under section 7 of the FSO the gatekeeping function of the FSD, after all, it is the FSD that is responsible for fire safety. You may have to consult other departments. But the ultimate responsibility of fire safety rests with the FSD; is that correct?” the DFS confirmed:

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“Correct” [Day 19/87/23 - 88/3]. He further confirmed: “after consultation with other departments concerning how to take law enforcement actions and remove the fire hazards, it is your responsibility; is that correct?” to which he answered: “Yes” [Day 19/88/4-8]. The Chairman also directly engaged with this point, observing: “I think, Director, you will agree that communication is very important. The BD may not be aware of all fire risks, so you’ll agree that enhanced communication is necessary?” to which the DFS again confirmed: “I agree” [Day 19/63/4-8].

1. In relation to foam boards specifically, the DFS confirmed that “both departments

have the power to enforce the law” [Day 19/65/1-3]. He confirmed that the BD has since issued a circular letter in March 2026 stating that “foam boards should not be used to cover windows” and that “in this regard division of labour is clear. There are clear requirements that foam boards should not be used to seal windows, but we have a statutory duty. We will talk to the BD as to how it will be handled” [Day 19/65/8-13]. The FSD’s views summarised in §§581-583 are not only relevant to the issues dealt with in this Part K (use of foam boards), but also to other issues that are capable of bringing about significant fire risks. (iv) The actions taken by the ICU at WFC

1. As mentioned above, the ICU conducted three inspections at which the foam

board issue was touched upon: 25 September 2024, 28 October 2024 and 18 November 2024315 [WS14/2144]. On 25 September 2024, Ku observed foam board materials stored on the ground floor and one foam board covering a lift lobby window. On 28 October 2024, he raised the fire hazard concern with the RC, who represented to use non-combustible materials. On 18 November 2024, Ku enquired whether follow-up actions had been taken since 28 October, and “the

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RC replied in the affirmative” 316 [WS14/2151-2152]. Thereafter, the ICU received no further foam board complaint. Ku stated that had he “been aware that the foam boards were used for covering up windows extensively, we would and must have taken follow-up actions” 317 [WS14/2152].

1. As to the consultation with Franco Tse, the accounts of Ku and Tse diverge.
2. 1. Ku’s account is that he “visited Mr Tse’s office after the inspection on 25

September 2024 to consult him whether there were any regulations or guidelines issued by BD regarding the use of foam boards to cover up the windows” 318 [WS14/2148-2149]. Ku stated he explained to Tse that his team had received an enquiry about the use of foam boards for temporary protection of windows, and that Tse “advised that the said use of foam boards was not considered as building works and that there was no requirement on the fire-retardant properties of the foam boards used” and that “as the said use of foam boards would not be considered as unauthorised buildings works, it would not be actionable”319 [WS14/2149]. Ku explained that he did not provide Tse with more detail because “I did not have information on the extent of the use of foam boards at that material time” 320 [WS14/2149]. 585.2. Tse’s account is that he is “not able to recall that Mr. Ku Siu Ping has verbally consulted me regarding the use of foam boards to cover up windows at Wang Fuk Court” [WS3/1682]. In his second letter, Tse stated that the advice attributed to him “is obviously unsound” [WS3/1682]. However, Tse also acknowledged that “the context of the statement... may

316 KU Siu Ping 3rd WS §66 317 KU Siu Ping 3rd WS §67 318 KU Siu Ping 3rd WS §57 319 KU Siu Ping 3rd WS §57 320 KU Siu Ping 3rd WS §58

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be acceptable given that the coverage of the foam boards is only confined to few individual flat or a particular floor and the duration is short” [WS16/2200]. Tse confirmed during his oral evidence that “I really do not remember whether he has asked me or in what kind of format he asked me. I can only say that I didn’t have any detailed information. I have not seen any photos, I do not know which estate he was referring to” [Day 20/85/2- 9].

1. The Committee is not required to resolve the divergence between Ku and Tse as

to whether the consultation occurred as a matter of fact. Recollections may differ. Whether or not it did, the underlying operational concern remains: no written record was made of any such discussion, and insufficient background information was provided for the purposes of obtaining meaningful advice. Tse’s view that Ku “should have tried his utmost to obtain a full picture of the case” and could have verified the RC’s representation “by simply bring up the case for arranging further site re-inspection, say in 2 or 3 weeks time” [WS16/2201] is a valid point that the Government acknowledges: a follow-up inspection to verify the RC’s representation would have been better practice. (v) The actions taken by the FSD at WFC

1. As mentioned above, the FSD conducted an inspection of the site on 25

September 2024 and did not consider the polystyrene boards found at the open ground areas per se to be an irregularity from the FSD’s perspective. The FSD’s response when consulted by the ICU was that foam boards were not dangerous goods. The FSD’s primary concern is with dangerous goods, not construction materials. The Government acknowledges that the FSD’s response, while reflecting the internal division of work, did not address the broader fire safety concern raised by the use of foam boards – that said the Committee may note that

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in context the matter was in fact taken up and followed up by the ICU who undertook inspections and acted upon the representations given by the contractor. K4. Systemic and/or operational weaknesses on the regulatory level

1. No specific standard for foam board fire retardancy existed before the fire, and

section 16 of the B(C)R, while applicable, provides only a general requirement without prescriptive content321 [WS1/648; WS1/686]. The absence of specific standards or guidelines added to the difficulties on the ICU’s part to take decisive enforcement action: The ICU had no defined benchmark against which to measure the foam boards’ fire performance and no basis on which to demand a FR test (there being no standard to test against). The post-fire circular issued by the BD in March 2026 [B13/5714-5719], which expressly prohibits the use of combustible materials including foam boards on external walls or windows, directly addresses this gap.

1. The operational area requiring improvements is equally clear: the ICU did not

proactively follow up thoroughly on the foam board issue despite multiple inspections and documents received after October 2024. The Chairman observed directly: “You did follow up, but you didn’t follow up thoroughly. For the foam boards, they have been used to seal up the windows and you didn’t follow up. You did follow up, as you said, but if you follow up more thoroughly, you must have picked this up.” Ku accepted: “It is with the benefit of hindsight, indeed there are areas that we could have done better” [Day 22/148/22 - 149/2].

1. The lack of written records of the contractor’s promise at the 28 October 2024

inspection and of the Tse consultation (if it occurred) is a further operational area requiring improvements. Ku accepted: “With the benefit of hindsight, if we had

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the instructions written down, it would be a better approach” [Day 22/115/1-9]. The ICU now requires that “if safety or major concerns, high-risk issues or complaints are involved, then we ask our colleagues to compile comprehensive records, and when they do inspections, they need to complete the inspection forms” [Day 24/70/11-15].

1. A further operational weakness concerns the fact that the ICU did not

communicate the RC’s representation on the manner of use of foam boards in its reply to the complainant or in any other correspondence with residents. 591.1. When the ICU replied to the complainant on 12 November 2024 [I1- 4/8251], the reply stated that foam boards were used as temporary protection measures and that there is no legislation or regulation to require such protection materials need to meet fire-retardant requirements. 591.2. The ICU did not inform the complainant of the specific representation made by the RC at the 28 October 2024 inspection that foam boards would be used only three floors at a time during active hacking and would be removed immediately upon completion of the hacking works around each floor. 591.3. If residents were informed of what the RC had represented, they would have a clear benchmark against which to assess whether the contractor’s practice on the ground matched its undertaking. Ku accepted in oral evidence that the unintended consequence of the way the reply was framed was that “no resident would complain to you and they told a lie” [Day 22/141/9-12]. He further accepted that “with the benefit of hindsight indeed, in answer to the residents, it would be far better to make things clearer” [Day 22/141/15-16].

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• The DFS’s evidence establishes that the FSD’s involvement in the foam board

issue was a result of the pre-fire division of work, but not by any absence or abnegation of statutory power.

• The DFS confirmed that “before the fire, you each have your respective power to

handle the matter” [Day 19/66/1-3], and that the FSD could in principle have issued a FHAN in relation to combustible foam boards as a fire hazard. However, the practical position was that the BD had specific legislation applicable to external wall materials and a wider expertise encompassing structural, lighting and ventilation considerations, and the FSD deferred to the BD’s lead regulatory role on this basis [Day 19/64/1-21].

• As to foam boards specifically, the DFS stated that “there are existing regulations

of the BD” and that “what happens now is that if the foam boards are not removed, the contractor will be prosecuted. In the future we will talk to them about enforcement” [Day 19/64/12-14].

• The BD issued a circular letter in March 2026 that expressly addresses the foam

board issue. AD Karen Cheung of the BD confirmed: “combustibles include foam boards; they cannot be put on external walls or windows” [Day 20/45/9 - 46/24]. A limited exception is preserved for temporary covering of windows during active chiselling works: “if there is some temporary chiseling work to be done, (g) states that if it is a temporary covering of windows, it is allowed” [Day 20/46/6-9]. When asked whether this represented “a huge difference between the regulations before and after the fire,” AD Karen Cheung of the BD responded: “We just want to be clear” [Day 20/46/20-24]. The Government’s position is that the March 2026 circular clarified the regulatory context: the position that extensive foam board use was always in breach of section 16 of the B(C)R was correct both before and after the circular. 223

• The BD has also since December 2025 stepped up surprise inspections of large-

scale building repair works sites at least once every six months, with specific focus on whether combustible materials (such as foam boards) have been installed on windows (Table of Improvement Measures, Item B1).

• The ICU’s, BD’s and FSD’s improvements set out in Section J4(iii) above,

including regular site inspections, enhanced record-keeping requirements, and inter-departmental communication channels, apply equally to the detection of foam board use and other non-compliant construction practice.

• The post-fire inter-departmental coordination mechanisms, including the bi-

weekly information sharing with the BD/ICU and the FSD’s new referral-and- follow-up practice, are designed to ensure that fire safety concerns arising from construction practice are no longer left in a gap between departmental mandates.

• Relatedly, the FSD has announced an optimised case referral and handling

mechanism (in April 2026) under which, for fire safety cases involving matters within the professional purview of other government departments (such as construction materials on external walls), the FSD will, with the complainant’s consent, proactively refer the case to the most appropriate department, confirm that the referral has been taken over by the relevant department, and follow up until completion. Should a department contest a referral, the case will be escalated to the Assistant Director or Deputy Director level for inter-departmental coordination. This mechanism directly addresses the pre-fire gap whereby the FSD’s response to the foam board complaint was limited to confirming that foam boards were not dangerous goods without addressing the broader fire safety concern (Table of Improvement Measures, Item A11).

• In addition, the BD has issued a fire safety guideline pamphlet for major

renovation works, with the FSD’s specialised advice on firefighting and rescue 224

operations, dangerous goods handling, and FSIs incorporated (Table of Improvement Measures, Item A11) [B14/6327-6328]. This publication demonstrates the enhanced inter-departmental collaboration on fire safety matters arising from construction practice and provides accessible guidance to contractors, RIs and building owners in a single consolidated format.

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L. THE USE OF OTHER NON-FR CONSTRUCTION MATERIALS - SPECIFICALLY, PLASTIC SHEETS / CANVAS

1. Beyond the scaffolding nets and foam boards addressed in Sections J and K, the

re-entrant at WFC contained a range of other combustible construction materials that contributed to the rapid spread of the fire. These included canvas used on catch-fans and working platforms, plastic sheeting, toe-boards, wooden planks and nylon strips.

1. The primary responsibility for the use of non-compliant materials across the

scaffolding rests with Prestige and the RI under sections 3 and 16 of the B(C)R. The Government’s post-fire reforms, including the Secretary for Labour and Welfare’s announcement that the CoP will be revised to specify material requirements for toe-boards and the BD’s review of the BO to consider making non-compliance with material safety standards a new offence, directly address the identified inadequacies or gaps. L1. Use of other non-FR construction materials – the relevant evidence

1. The IFITF Report established that two types of canvas were used at WFC,

“mainly made of polyethylene or a mixture of polyethylene and polypropylene”. Laboratory examinations revealed that “both types of canvas were more susceptible to sustained burning after flame impingement than the safety nets, with some producing burning droplets. Therefore, if a fire were to be initiated in the working platform, the canvas would easily ignite, quickly spreading the fire to nearby combustibles and leading to rapid fire development” (IFITF Report §6.2.1.8 [ER1/81]).

1. These findings are corroborated by the independent laboratory analysis conducted

by Dr Lee [ER2-1/478-481].

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1. 1. Dr Lee examined plastic sheeting samples seized from WFC and control

samples obtained from construction material suppliers associated with the renovation works. The examination revealed that the plastic sheeting used at WFC was made of mainly polyethylene, or a mixture of polyethylene and polypropylene, in multi-layered configurations. 604.2. Of the six samples of plastic sheeting examined from the construction material suppliers (Lab Ref. 26C0714/1-6), five (items 26C0714/1, 3-6) sustained burning after removal of a flame, with some specimens largely consumed with flame reaching the top edge and producing burning droplets. Only one sample (item 26C0714/2), which was allegedly FR, did not sustain burning after removal of the flame [ER2-1/481]. 604.3. The examination of plastic sheeting seized from the WFC scene itself produced consistent results. All five items of plastic sheeting tested with reference to Condition A of GB/T 5455-2014 were ignited, with average afterflame times ranging from 12.4 seconds to 30.7 seconds, substantially exceeding the 4-second threshold applicable to safety nets under GB 5725-

1. Specimens from four of the five items were found to have burnt to

the top edge and were mostly consumed before extinguishing, with flaming droplets produced. Under the more stringent Condition B, average afterflame times ranged from 15.9 seconds to 41.1 seconds, again with specimens largely consumed and flaming droplets produced [ER2-1/485- 486, 499-500]. 604.4. Dr Lee confirmed in oral evidence that both types of canvas found at WFC were more susceptible to sustained burning than the safety nets: “even when the source of fire has been taken away, it continued to burn, and then it spread to the side and upward... basically it's spreading upward and then

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you can see the flame and droplets coming down all the time until the time when it's completely consumed” [Day 25/88/12 - 89/2]. When asked directly whether canvas was more combustible than safety nets, Dr Lee confirmed: “Yes... We didn't have to wait for 12 seconds. There are flames and they spread pretty rapidly and upwards. All the canvas, they were completely burned down” [Day 25/105/16-19]. Dr Lee described the fire performance of canvas as “dangerous” [Day 25/108/3] and confirmed that the use of such materials on scaffolding during renovation was “rather perilous in terms of fire risk” [Day 25/114/2-4].

1. Dr Lee’s further statement dated 25 June 2026 [C19/2826-2835] extends the

analysis by comparing the plastic sheeting recovered from the WFC scene against control samples obtained from construction material suppliers associated with the renovation works, and by evaluating the burning behaviour of all samples upon surface ignition with reference to BS 5867-2:2008 (Type B performance requirements). 605.1. The comparison exercise established material links between the scene and the supply chain. The general appearance, weaving pattern, layer structure and chemical compositions of the green plastic sheeting recovered from the scene (items 25C2825/37, 40, 40A and 40B, from Wang Chi House) were found to agree with control samples from the supplier 林記建築材料 (items 26C0714/1 and 26C0714/4 respectively), suggesting that they could be of similar make. Similarly, the blue/white plastic sheeting recovered from the scene (items 25C2825/39, 40C and 41, from Wang Chi House) was found to agree with a control sample from 祥記帆布工程有限公司 (item 26C0714/5), again suggesting similar make [C19/2828-2829].

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1. 2. Of the control samples tested, only two (items 26C0714/2 and 26C1071/1),

both alleged to be FR, were made of PVC-coated polyester fabric. These two samples did not sustain burning upon surface ignition: no part of any hole nor any part of the lowest boundary of any flame reached the top edge or either vertical edge, and no flaming debris droplets were observed [C19/2829]. 605.3. By contrast, all remaining plastic sheeting items (whether recovered from the scene or obtained from suppliers) were made of mainly polyethylene or a mixture of polypropylene and polyethylene. In burning behaviour tests conducted with reference to BS 5867-2:2008, holes and the lowest boundary of flame reached the top edge or either vertical edge in at least five out of the set of six test specimens for every non-FR sample; flaming debris droplets were observed in more than three out of the set of six test specimens; and most test specimens were consumed in the tests [C19/2829]. 605.4. An additional set of tests was conducted after cleaning the scene samples to remove surface-adhering foreign materials, with the same cleaning procedure applied to control samples for comparison. Dr Lee found no significant change in the burning test results with or without cleaning, confirming that the combustibility observed was an inherent property of the materials themselves rather than an artefact of contamination from the fire scene [C19/2829]. 605.5. Dr Lee concluded that the non-FR plastic sheeting items “were found to be easily ignited after surface impingement by a small flame with remarkable upward and/or lateral spread as well as generation of burning droplets which could aid the spread of fire” [C19/2829].

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L2. How the use of other non-FR construction materials resulted in rapid spread of the fire (i) Plastic sheets and canvas

1. As recorded in Dr Lee’s statement, photographic evidence from the scene

confirmed that the plastic sheeting was “used extensively, such as covering construction materials and along the interior of the working platform” [ER2/486, 503]. In a similar vein, Dr To Chi-wing of the FSD confirmed, “[t]he buildings in Wang Fuk Court were undergoing major renovation at the time of the fire, which led to their external walls being surrounded by combustible construction materials. These materials included bamboo scaffolding, safety nets, polystyrene window covers, plastic skirting boards (toe-boards), canvas, wooden planks, etc. Together, these materials created a combustible ‘envelope’ enclosing the buildings and provided an abundant fuel source for the fire”322 [WS1/31]. By way of illustration, Dr To referred to a photograph of canvas used at Wang Tao House [B2/1865].

1. The IFITF’s findings establish that canvas lacking FR properties “allowed small

fires in the re-entrant area to escalate into widespread, intense blazes capable of consuming nearly all combustibles and spreading rapidly across multiple levels” (IFITF Report §8.6.2.1 [ER1/174]). The catch-fans, designed to intercept falling debris, “trapped flying embers, flaming droplets and burning debris instead during the fire, especially with non-FR canvas used on the catch-fans, which increased the risk of ignition and enabled fires to spread horizontally along the catch-fans and onto the scaffolding” (IFITF Report §8.6.2.2 [ER1/174]).

1. Dr Lee concluded that “the plastic sheeting seized from the scene were found to

be more susceptible to sustained burning after impingement of a flame than the safety nets,” and that “if a fire initiated in the working platform, the plastic

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sheeting materials would easily be ignited, spreading the fire quickly to the nearby combustibles leading to a fast development of fire” [ER2-1/486]. Prof Yuen’s Test 13 at Sichuan, which combined safety nets collected from Wang Chi House with non-FR canvas, corroborated this conclusion: the introduction of non- FR canvas “further accelerated the fire growth, transforming limited and localized fires into a widespread and intense blaze” and the “resulting excessive heat release was sufficient to ignite bamboo sticks on a large scale, significantly increasing the HRR” (IFITF Report §7.2.3.19 [ER1/104]). (ii) Toe-boards, wooden planks, nylon strips

1. The IFITF Report identified that the re-entrant contained large quantities of

accumulated combustible materials forming a continuous fuel source across multiple levels, including “bamboo scaffolding, safety nets, wooden planks, toe- boards, canvas, nylon strips; and polystyrene window covers” (IFITF Report §6.2.1.3 [ER1/79]). The full-scale fire tests revealed that “bamboo was the dominant fuel source, contributing nearly 78% of the total energy released, followed by wooden planks (14%). Despite bamboo’s dominance as a fuel, the test revealed that other materials, such as safety nets, toe-boards and wooden planks, ignited first due to their relatively lower thermal resistance” (IFITF Report §7.2.3.7 [ER1/95]). The time-to-ignition data revealed that toe-boards (16s to 42s) and nylon strips (36s) exhibit relatively low TTI values, indicating a higher susceptibility to ignition, and that wooden planks ignite at about 58s to 79s while bamboo demonstrates a substantially higher TTI of over 110s (IFITF Report §7.2.3.16 [ER1/101]).

1. The significance of this finding is that materials with lower thermal resistance

(specifically nylon strips, toe-boards and wooden planks) served as the ignition initiators that then spread fire to the dominant fuel (bamboo), creating the self- reinforcing cycle described in Section G4 above.

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L3. The primary and supervisory responsibilities for such contributing factor (i) The FR standards and other requirements applicable to such other construction materials

1. The BD’s regulatory framework under sections 3 and 16 of the B(C)R provides

the legal basis for requiring compliant materials and appropriate construction methods; these apply to all materials used in building works.

1. In relation to plastic sheeting used to cover scaffolding on the façade of buildings,

the requirement for FR properties has existed since 1995, when PNAP APP-70 was first issued [J1-1/688]. Paragraph 4(a) of APP-70 expressly advises that “flame-retardant sheeting should be used” when plastic sheeting is used to cover scaffolding erected around the walls of buildings. The March 2023 circular letter [J1-2/5915], built upon this long-standing requirement by specifying particular recognised FR standards (GB 5725-2009, BS 5867-2:2008 (Type B performance requirements), and NFPA 701:2019 (Test Method 2)) applicable to protective net, screen, tarpaulin and plastic sheeting installed on the façade of buildings under construction, demolition, repair or minor works. The LD’s 5th edition CoP, which became effective on 19 October 2024, also incorporated corresponding FR standard requirements (at paragraph 4.4.4(d)) [D1/709]).323

1. The requirement that canvas and plastic sheeting on scaffolding must possess FR

properties was therefore not a post-fire innovation but a regulatory requirement

323 Paragraph 4.4.4(d) of LD’s 5th edition CoP [D1/709] applies expressly to canvas and prescribes specific standards as follows: “(d) On the face of the scaffold, suitable protective screen (such as nylon nets, plastic sheeting, canvas, etc.) should be provided to confine falling objects. Protective net, screen, tarpaulin/plastic sheeting installed on the face of the scaffold should have appropriate fire retardant properties in compliance with a recognised standard. Examples of recognised standards are listed below for reference: (i) GB 5725-2009 - Safety nets (or formerly GB 16909-1997 – Fine mesh safety vertical net); (ii) BS 5867-2:2008 (Type B performance requirements) – Fabrics for curtains, drapes and window blinds - Part 2: Flammability requirements - Specification; and (iii) NFPA 701:2019 (Test Method 2) - Standard methods of fire tests for flame propagation of textiles and films Other standards of equivalent fire retardant performance as per the above recognised standards may also be used.”

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of some three decades’ standing, with specific recognised standards identified from March 2023 onwards.

1. However, no specific prescriptive FR standard existed for toe-boards, wooden

planks or nylon strips used as scaffolding components before the fire. The pre- fire regime relied on the general requirements of section 16 of the B(C)R without prescriptive content for these specific materials. (ii) The primary responsibilities of Prestige and the RI

1. The same primary responsibility framework as applicable to scaffolding nets

applies to all other scaffolding protective materials. The primary obligation to ensure materials used in building works are of a nature and quality suitable for their intended use, and that appropriate precautionary measures are taken, rests with the RC and RI under sections 3 and 16 of the B(C)R. (iii) The Government’s supervisory responsibilities on the use of such other construction materials

1. The ICU’s supervisory role under section 16 of the B(C)R extends in principle to

all construction materials and methods. However, under the MBIS, no proactive inspection or testing regime for materials was in place; the ICU relied on the RI’s compliance and complaints. No action was taken by the ICU concerning the combustibility or FR properties of plastic sheets, canvas, toe-boards or nylon strips at WFC: but this must be seen in the proper context that no complaints on these specific materials were received and the MBIS does not require onsite inspections in the course of works, or the testing of construction materials in the absence any complaint or enquiry.

1. The LD had no enforcement power in relation to the FR properties of toe-boards

and wooden planks used on scaffolding prior to the announced CoP revision. The

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LD’s focus was on the physical condition and safe working order of scaffolding components (adequate to prevent falls) rather than their combustion properties.

1. The explanation for no specific action having been taken concerning the

combustibility / FR properties of such other construction materials may lie in the regulatory framework: for toe-boards, no FR standard existed; for canvas and plastic sheeting, the FR requirement was set out in the BD’s circulars and LD’s CoP which was directed to contractors and RIs, with enforcement dependent on complaints or proactive site inspections by the BD/ICU. L4. Systemic and/or operational weaknesses on the regulatory level

1. Before the fire, no legislation, CoP or practice note specified FR material

requirements for toe-boards, wooden planks or nylon strips used as scaffolding components. This was a constraint that applied across the industry. The MBIS does not require onsite inspections in the course of works, and there was no basis for testing construction materials absent a complaint or enquiry specifically raising the issue.

1. For canvas and plastic sheeting, the FR requirement has existed in the BD’s

circulars and LD’s CoP, but verification depended on the same certificate-check methodology addressed in Section J above.

1. The Secretary for Labour and Welfare has announced that the LD will revise the

CoP to specify material requirements for toe-boards 324 WS1/326. This is a direct and proportionate response to the identified regulatory inadequacy.

324 YUEN Tsz Lok 1st WS §42

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• The LD will also explore joint inspections with the BD and FSD for RMAA sites

with “areas of common concern,” which (post-fire) includes the FR properties of all materials on scaffolding. Murphy Yuen confirmed: “after BD issued PNRC 85... BD is inviting LD to assist them in carrying out sample collecting work for scaffolding protective nets.” 325 [WS1/327].

• The BD’s post-fire reforms under PNRC 85 [J1-2/6200-6209], requiring

encrypted digital certificates, sampling before installation, and random on-site inspections, extend to all protective materials on scaffolding, not only nets. The BD is reviewing the BO and considering legislative amendments to “empower BD to specify requirements over construction methods and procedures, and to clearly stipulate what constitutes ‘appropriate precautionary measures must be taken’ under current legislation” and will “include the safety requirements of building materials as statutory standards in BO and make non-compliance with such standards a new offence”326 [WS1/773]. These reforms address the general nature of section 16 of the B(C)R by providing specific prescriptive content that was previously lacking. More broadly, the Development Bureau (“DEVB”) and Construction Industry Council have commenced discussions with the industry on a roadmap to switch from bamboo scaffolding to metal scaffolding where appropriate, based on the needs of different work scenarios. Discussions commenced in December 2025 with a view to reaching consensus as soon as possible (Table of Improvement Measures, Item G2). The Construction Industry Council is also formulating a set of Good Practice Guidelines for the large-scale building maintenance industry, which will include recommendations on the subcontracting of such works to promote the healthy development of the 325 YUEN Tsz Lok 1st WS §45 326 PANG Yuk-lung 1st §144 (b) and (c)

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construction industry. The Guidelines are expected to be promulgated within 2026 (Table of Improvement Measures, Item G3).

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PART III(D): OTHER FACTORS CONTRIBUTING TO THE HEAVY CASUALTIES M. UNTENABILITY OF THE MEANS OF ESCAPE CAUSED BY CREATION OF ACCESSES

1. The IFITF found that some windows in escape staircases were replaced with

movable wooden boards or aluminium composite panels as access openings to the exterior scaffolding.

1. During the fire, these boards (and the openings left behind after the boards were

burnt off) permitted smoke and heat to infiltrate the staircases, rendering them incapable of providing a safe environment for evacuation and a safe route for firefighters to proceed to higher levels of the buildings.

1. Of the 38 fatalities in the staircases and common areas of Wang Tai House, the

cause of death for 28 was inhalation of fire fumes. The full-scale fire tests confirmed that the wooden boards and aluminium composite panels ignited within minutes, whereas the fire-rated glass windows already installed in replacement of the original non-fire-rated windows remained intact and maintained a lower interior temperature.

1. This section examines the evidence on the creation of access openings at WFC,

the causal link to the heavy casualties, and the respective responsibilities of the contractor, RI, and relevant Government departments. The primary responsibility lies with Prestige (as RC) and Will Power/Ng Yeuk (as the consultant and RI), who created or permitted the creation of access openings at regular five-floor intervals across all eight blocks in contravention of multiple provisions of the BO and the FS Code. The RI bore a specific statutory obligation to identify and report “unprotected openings at enclosure walls of exit routes” to the BA; this obligation was not discharged.

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• The Government acknowledges that the supervisory architecture contained areas

requiring improvements: the MWCS classification of the window works as MW meant no prior plan approval or consent was required; the AFC checklist focused on procedural compliance rather than safety hazard identification; the ICU was not aware of the BD’s 20% site safety inspection practice for MW until after the fire; and the LD regarded the means of escape in occupied buildings as falling outside its OSH jurisdiction. The result was that no department had detected the access openings before the fire. This was also, as the Chairman observed, a situation in which “the workers’ interests and the residents’ interests seem to be on a collision course.” The Government’s post-fire improvement measures are directed at resolving this tension. M1. Creation of wooden or metallic accesses at escape staircases at every five levels of WFC – the relevant conversation records and other factual evidence showing the manner of creation of such accesses at WFC

• The evidence establishes that during the renovation works at WFC, windows at

the escape staircases were removed and replaced with movable wooden boards or aluminium composite panels at regular five-floor intervals across all eight blocks, creating access openings from the protected staircases to the exterior scaffolding. These openings permitted workers to enter and exit the scaffolding from the interior of the building without climbing the scaffolding itself.

• On 21 February 2025, during the LD’s 10th inspection (a Special Enforcement

Operation), a void was found between the scaffold and external wall outside the 25th floor of Wang Cheong House. The access to and egress from the bamboo scaffold was found unsafe since a worker “might be liable to fall more than 2 metres through the void.” As no worker was found working nearby, no prosecution was initiated. Two Improvement Notices were issued (one to Prestige and one to the scaffolding sub-contractor) requiring rectification of the hazardous 238

condition regarding access and egress within 14 days327 [WS1/370]. Li Man-pong confirmed in oral evidence that the LD’s action was directed at the fall risk for workers, not at the access openings [Day 16/81/2-9].

1. On the ICU’s end, the access openings were visible in photographs submitted as

part of two Class I MW submissions for Blocks F and H (MWB02504820 and MWB02504821), which covered the erection of protective barriers and alteration of windows at escape staircases. They were randomly selected for AFC under the MWCS. The pre-commencement photographs (e.g. [I1-3/6227, 7971] showed windows already replaced by wooden boards with locks and warning signs, with some of the wooden boards partially opened.

1. Yung, the ICU officer responsible for the AFC, explained the focus of the AFC

process in his evidence. “AFC is concerned with the final building product as it will stand upon completion”328 [WS14/2122]. The MW submissions in question had the particular intended purpose of replacing the original openable, non-fire- rated windows with fixed windows with fire-rated glass panels, a replacement regarded as an upgrade in terms of fire safety. Yung explained: “Since such replacement is regarded as an upgrade in terms of fire safety, the immediate existing condition of the original windows, which would be overtaken by event as they were meant to be replaced and would have been overtaken by the time the subject works were complete, was not a matter of primary concern during the relevant AFC. Consistent with the focus of AFC as described above, MWT's attention was directed at ensuring that the final building works resulted from the MW (i.e. the windows in replacement) would satisfy requirements under the BO” 329 [WS14/2124; Day 23/35/5 - 36/23]. In other words, the MWT’s primary

327 LAM Sau Ching 1st WS §56 328 YUNG Siu-lun 2nd WS §20 329 YUNG Siu-lun 2nd WS §25

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concern was whether the new fire-rated windows to be installed would comply with the BO, rather than the pre-existing condition of the windows being replaced.

1. Notwithstanding the above, Yung explained that he examined the photographs

but interpreted the wooden boards as temporary protective measures for windows that were to be replaced, not as access openings. He explained: “At that time when we look at this photo, we find that this is some temporary protective measures on the windows.. At that time I don’t think it is an access for people to go in and out” [Day 23/30/24 - 33/9]. Yung further accepted that had he examined the photos more carefully during the AFC, he may not have concluded that the wooden boards were intended merely as temporary protection [Day 23/33/10-21].

1. The BD received no complaints about access openings at WFC escape staircases

before the fire330 [WS1/834]. The BD’s post-fire special inspection found only 8 out of approximately 400 inspected buildings (approximately 2%) with access openings at escape staircases [Day 20/46/25 - 47/9]. M2. How the creation of such accesses at escape staircases resulted in rapid spread, as well as such heavy casualties (i) The relevant factual evidence

1. Of the 38 fatalities in the staircases and common areas of Wang Tai House, 28

were found inside the staircase. The cause of death for all 28 was inhalation of fire fumes [ER9/2755]. The IFITF concluded: “This tragic outcome can likely be attributed to the compromised openings in the staircase... which allowed smoke and heat to infiltrate. These openings rendered the staircase, intended as a protected escape route and temporary place of safety, incapable of providing a safe environment for evacuation” (IFITF Report §10.6.2.2 [ER1/230]).

330 YUE Chak Sang 1st WS §67

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(ii) The IFITF’s investigations

1. The IFITF’s findings, addressed in Section G5 above, established that the

movable boards replacing staircase windows “permitted smoke and heat to infiltrate the staircases” and that “severe blackening of ceilings above the opening indicated heavy smoke penetration. As a result, staircases intended to serve as protected escape routes were compromised, leaving residents without safe pathways for evacuation” (IFITF Report §10.6.2.1 [ER1/230]).

1. The full-scale fire tests conducted in Sichuan demonstrated that “the wooden

board ignited at 4 min 40 sec and the aluminium composite panel ignited at 7 min 49 sec,” while the fire-rated glass window “remained intact and maintained a lower interior temperature, therefore ensuring a safer environment for evacuation” (IFITF Report §10.6.2.3-10.6.2.4 [ER1/230-231]). A resident’s account provided direct real-world corroboration. According to Ms Tse Yuk-wa, the occupant of Flat 204, Wang Cheong House, “during her evacuation at about 1455 hours, she observed a reflection of fire immediately outside the fire-rated windows along the staircase. Her experience provides direct confirmation of the effectiveness of the fire-rated glass window installed along the escape staircase, which successfully served a fire separation component and prevented smoke infiltration into the staircase under fire conditions” (IFITF Report §10.6.2.5 [ER1/231]). M3. The primary and supervisory responsibilities for such contributing factor (i) The standards and requirements applicable to the creation and use of such accesses and the LD’s occupational health and safety perspective

1. The BD’s position on the legal status of the access openings is clear. AD Karen

Cheung of the BD confirmed that access openings affecting the structure of the fire escape staircase are “in contravention of regulations” [Day 20/48/10-16], that they breach section 16 of the B(C)R because they are “not an appropriate work

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procedure” [Day 20/49/3-8], and that they contravene clause F5.6(a) of the FS Code which requires that “all means of escape should be maintained at all times” [Day 20/49/9-16]. AD Lawsons Yue of the BD confirmed that when scaffolding was erected and “some windows of the exit staircases were removed and replaced with wooden access doors which are combustible, and the window openings are suspected to be misused for access of workers and delivery of materials to the scaffolding, all these allowed the exit route to communicate with the working area at the external wall, introducing additional fire hazard to, and adversely affecting the normal function of, the exit staircases”331 [WS1/833].

1. The LD’s perspective on the access openings and that of the BD’s can be

summarised as below, reflecting their different mandate and the worker safety considerations that the access openings were intended to serve. 639.1. From an occupational safety standpoint, access openings might serve a worker safety function. Li Man-pong explained: “under the code of practice, it provides that we don’t allow the workers to climb on the scaffolding … In a High Court case 332 it says that climbing on the scaffolding would present danger” [Day 16/74/2-4, 74/6-7]. He confirmed that “the access openings would serve some purpose. In case there is fire on the scaffolding or the scaffolding is collapsing, the workers will have to flee, they don’t have to climb to the roof or down to the floor to escape” [Day 16/73/2-7]. When Counsel for the Committee asked whether access openings on the rear staircases presented any problems from the LD’s perspective, Li’s view was that “No, it’s not against the law” and that “how many they open and the way in which they do it, the Labour Department doesn’t impose any standard” [Day 16/73/8 - 74/20]. As the Chairman

331 YUE Chak Sang 1st WS §65 332 The judgment was subsequently submitted to the Committee [D3/1928-1987]

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followed upon, “having an access opening is all right in terms of occupational health and safety?... Because workers need to go up and down and they are not supposed to climb on the scaffolding to reach other floors?” Li confirmed: “Yes” [Day 16/81/10-23]. 639.2. At the policy level, Murphy Yuen provided a more nuanced position: “On the policy level, the access opening is not essential. The access opening is for exit and entry to the scaffolding, but there are many different ways to access the scaffolding.” He acknowledged that access openings have their use, “but we need to look at the location, the size, the number of openings. Contractors need to make a risk assessment and not just to make an opening where convenient. The access openings may involve structural problems and contractors may need to discuss this with the relevant departments before opening those accesses” [Day 16/97/19 - 98/20]. This framework represents the Government’s forward-looking position on how the competing safety interests identified by the Chairman should be balanced.

1. The Government submits that, properly understood, the positions of the BD and

LD are consistent rather than divergent. 640.1. The BD’s position is that access openings at escape staircases contravene the BO because they compromise the fire resisting construction and the protected means of escape. The LD’s position is that workers require safe access to and egress from scaffolding and should not be required to climb the scaffolding itself. 640.2. These two positions are not in conflict: the LD’s occupational safety considerations identify a legitimate need for workers to access the scaffolding safely, but the BD’s position is that this legitimate need cannot

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be met by creating openings at the escape staircase, because to do so would compromise the very fire safety provisions upon which both workers and residents depend. 640.3. In other words, the need for safe access is acknowledged, but the escape staircase is not an acceptable location at which to provide it. (ii) The primary responsibilities of Prestige and the RI

1. Under the MWCS, the primary responsibility for ensuring compliance rests with

the prescribed building professionals and prescribed registered contractors. They certified the MW submissions for the window works at WFC. Yung confirmed: the PBPs and PRCs “are required to supervise the carrying out of MW, notify BA of any contraventions of the regulations which would result from the carrying out of MW, and comply with the BO” 333 [WS14/2117]. The supervision plans submitted stated that the PBPs (Lai Ka Wing as AP and Chi Wuh Jian Joseph Duncan as RSE) would conduct weekly inspections, and the PRC representatives would conduct full-time and weekly inspections respectively334 [WS14/2125].

1. The RI bears obligations in relation to access openings at two distinct stages.
2. 1. First, at the inspection stage, the MBIS Code requires the RI to inspect fire

safety elements including “means of escape, means of access for fire fighting and rescue and fire resisting construction”335 [WS1/799]. The Code specifically requires that “unprotected openings at enclosure walls of exit routes or compartment walls, floors and ceilings” shall be identified and reported to the BA [J1-2/4774-4775]. Will Power, providing RI services for the WFC renovation and Ng Yeuk, i.e. the actual RI, bore

333 YUNG Siu Lun 2nd WS §30 334 YUNG Siu Lun 2nd WS §29 335 Cheung Yuk Ching 1st WS §58

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primary responsibility for identifying the access openings and reporting them as contraventions. AD Karen Cheung of the BD confirmed: “RI’s responsibility in their inspection, they would need to check whether there are any contraventions, to see whether access openings are made” [Day 20/50/19 - 51/7]. 642.2. Second, during the work process, Cheung confirmed that “RI has the responsibility to notify the BD when there are any contraventions” [Day 20/51/2-4].

1. Will Power, providing RI services for the WFC renovation, and Ng Yeuk, i.e. the

actual RI, bore primary responsibility for notifying the ICU of such contraventions during the course of the works including the creation of access openings at escape staircases. This obligation was not discharged. (iii) The Government’s supervisory responsibilities

1. As mentioned above, the ICU agreed that the question of whether access openings

at rear staircases contravene section 16 of the B(C)R falls within its purview. Yung confirmed that there were only discussions that access openings should not be formed in rear staircases after the fire. Prior to the fire, they did not consider the issue. When Member Chan asked: “with the benefit of hindsight you found it necessary?” Yung confirmed: “Yes” [Day 23/38/21 - 39/10].

1. Under the MWCS, there is no requirement for the ICU to conduct regular

inspections during the course of works unless complaints are received [Day 23/22/22 - 23/14]. No complaint about the access openings had been received by the ICU.

1. The AFC is a document check focused on procedural compliance of the B(MW)R;

it is not a safety hazard assessment. The relevant checklist items require only that

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photographs “have been provided/are clear” and that “the information... as shown on the plans/photographs tallies with the submitted form/are clear” 336 [WS14/2123; Day 23/34/9-14].

1. Of the 48 MW submissions related to renovation works at WFC, only two (for

Blocks F and H) were randomly selected for AFC; the remaining 46 received no further check unless complaints were received [Day 23/24/15 - 25/4].

1. An area calling for improvements lies in the BD-ICU communication gap

concerning site safety inspections. 648.1. The BD had been selecting 20% of Class I MW with supervision plans for immediate site safety inspections by the BD’s site monitoring team since April 2023; the ICU was not aware of such practice until December 2025. 648.2. Had the ICU followed the same practice, Yung confirmed there was “a fairly high chance that a site safety inspection could have been arranged by the ICU to the works site concerned (i.e. the windows along the staircases of Blocks F and H of Wang Fuk Court)”337 [WS1/671], because “the probability that one of the two Class I MW submissions of Wang Fuk Court... could have been selected for a site safety inspection is rather high”338 [WS1/671; Day 23/54 - 55/2]. 648.3. Lau also confirmed the BD-ICU communication gap directly: “Yes, there is a gap” [Day 24/73/19-22]. He accepted that “in hindsight, agree” and ICU should have aligned its practice with BD’s [Day 24/82/24 - 83/5].

336 YUNG Siu Lun 2nd WS §22 337 YUNG Siu Lun 1st WS §54 338 YUNG Siu Lun 1st WS §54

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• The Chairman observed that this evidence appeared to be shifting responsibility

to the BD. Yung made clear that this was not the intention: “Regarding communication with the BD, I am not passing the buck. It is just a case that after the incident, the site monitoring team made an enquiry and we found that the BD had this practice and we really did not know. I just wanted to explain this. It is not the case that I said we didn’t know and we didn’t do it. I’m just saying that if we had known this, we would have done so” [Day 23/58/5 - 59/5]. The Government is fully committed to supporting the Committee’s work in a full and frank manner, and the ICU would not conceal such communication gap from the Committee. In fact, once the ICU became aware of such communication gap, the ICU immediately aligned its practice with the BD from January 2026 onwards.

• This goes to support that, as part of the improvement measures (which have been

or are being put in place), there should be site safety inspection even for MW particularly in large-scale maintenance and renovation works. (iv) The actions taken by the ICU in the case of WFC

• As mentioned above, the ICU conducted the AFC on the two selected MW

submissions (MWB02504820 and MWB02504821). The AFC checklist items were satisfied; the ICU’s Structural Vetting Team identified structural calculation issues which were resolved through correspondence with the PBP [WS1/666- 668]. However, the pre-commencement photographs showing the access openings were not identified as a safety concern during the AFC process. M4. Systemic and/or operational weaknesses on the regulatory level

1. The design for window replacement works to be classified as MW subject to

control of the MWCS, without requiring prior plan approval or consent, meant there was no formal gateway for the ICU to review the design of the access

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openings before they were created as a matter of system design. AD Lawsons Yue confirmed: “replacement of fire-rated glass panels for exit staircase can be carried out under the simplified requirements of MWCS as long as the fire resisting construction for the original design of the exit staircase will not be prejudiced. Plan submission for prior approval and consent by ICU... is not required under the BO” 339 [WS1/835]. This is a design of the MWCS classification system in line with its rationale of simplifying the procedures for certain types of works with lower risks.

1. The AFC checklist did not require identification of safety hazards visible in

photographs; it required only that photographs were provided, clear, and tallied with the submitted form. The Government acknowledges that this checklist design, while consistent with the AFC’s intended purpose (procedural compliance), was a weakness in terms of safety concerns that were visible on the face of the submissions. The photographs did contain indicators (locks, warning signs, a regular five-floor pattern) that could, on careful examination, have suggested the boards were functioning as doors rather than temporary window protection. Yung accepted that had he looked more closely, he may not have concluded the boards were temporary protection [Day 23/33/10-21; Day 23/44/17 - 45/2].

1. Yung’s evidence was that he had never in 27 years of professional practice

encountered access openings at fire escape staircases340 [WS14/2124], that the submissions were for a replacement window project representing a fire safety upgrade341 [WS14/2124], and that the duration and manner of use of temporary protective works “are not matters required to be disclosed in MW submissions”342

339 YUE Chak Sang 1st WS §68 340 YUNG Siu Lun 2nd WS §26 341 YUNG Siu Lun 2nd WS §25 342 YUNG Siu Lun 2nd WS §28

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[WS14/2125]. These are contextualising factors, not a complete answer; but they are relevant to the characterisation of the issue.

1. The BD-ICU communication gap on site safety inspections is an operational

weakness that affected the probability of detecting the access openings. Lau Fu- kwok accepted: “Yes, there is a gap” and confirmed that the ICU would “proactively reach out to BD to step up communications at different levels” [Day 24/73/19-22; Day 24/75/14-18].

1. Yung accepted directly that “before the fire, the supervision of major renovation

seemed to be too lax”, though he qualified this by noting “I agree to the extent that we rely only on the contractors” [Day 23/13/23 - 14/15]. This acceptance, combined with the broader evidence that 46 out of 48 MW submissions received no audit whatsoever, and that the MWCS did not require site inspections during works, confirms that the pre-fire classification of major renovation as MW with minimal oversight may require reconsideration.

1. The ICU implemented the BD’s 20% site safety inspection practice for Class I

MW with supervision plans in January 2026, immediately upon notification of the BD’s existing practice343 [WS1/671]. The ICU has increased the selection percentage to 30% for Class I minor works with supervision plans, effective since May 2026 ([Day 23/71/2-16]; Table of Improvement Measures, Item B3(ii)(c)). Enhanced inter-departmental communication has been established: BD-ICU quarterly meetings and a designated high-ranking professional liaison officer between BD’s SMT and ICU’s SMT [Day 24/97/15 - 98/5]. From the LD’s perspective, since 17 March 2026, the LD’s frontline staff has been directed to refer any non-conformity with the BD’s requirements on means of escape

343 YUNG Siu Lun 1st WS §44

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detected during site inspections to the BD and FSD for follow-up (Table of Improvement Measures, Item E5).

1. The Committee’s observation at the hearing provides the constructive way

forward: “We need to try to strike a balance and plug the loopholes. There is a grey area at the moment. So in the future we need to discuss with the FSD how we can have the access openings yet ensure fire safety. The access opening should be fire-retardant, and if it is locked then it can block out some of the flames and the smoke” [Day 16/81/24 - 82/10]. The Government endorses this approach: the solution lies in collaborative multi-departmental design.

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N. THE FAILURE OF ALL FIRE ALARMS AT WFC

1. The IFITF found that the FAS of all eight blocks of WFC were shut down before

the fire. Residents did not receive timely warnings, leading to delayed evacuation. Once they became aware of the fire, the means of escape had already been exposed to smoke and heat. The IFITF concluded that had the FAS in Wang Cheong House been operational, the security guard’s activation attempt at 1448 hours “could have provided residents with a critical evacuation alert during the key escape window between 1448 hours and 1458 hours, when escape routes were still tenable” (IFITF Report §10.4.4 [ER1/215]).

1. This section examines how the FAS came to be shut down, the causal link

between that shutdown and the heavy casualties, the primary responsibilities of the private actors whose conduct caused the shutdown, and the supervisory role of the FSD.

1. The primary responsibility for this contributing factor lies overwhelmingly with

private actors: Prestige, which directed an unlicensed person to drain the FS Water Tanks without supervision of an RFSIC which led to the switch off of the main power supply; China Status, which submitted SDNs to the FSD without ever visiting the site, without assessing the need and consequences for shutdown nor to effect the shutdown of the relevant FSI systems themselves, and without discovering, let alone, disclosing that the FAS had been deactivated; ISS (the PMC), which issued job orders directing its own non-RFSIC staff to illegally operate FSI and failed to coordinate between two simultaneously engaged RFSICs; and Victory Fire, which discovered the shutdown in November 2025 but failed to notify the FSD or contact and follow up with China Status.

1. The Government also acknowledges that the FSD’s supervisory mechanisms

contained areas requiring improvements that the evidence has revealed,

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principally an SDN regime that was notification-based and absent of verification of the subject FSI / other remaining FSIs, the low audit rate for FS251 certificates, and absence of any mechanism to detect that a partial SDN concealed a wider FSI failure. These areas are addressed below together with the comprehensive reform programme that has since been initiated. N1. The FAS at each block of WFC being shut down (i) The part of WFC renovation works touching on the FH/HR System

1. As described in Section E3 above, the FS Water Tanks at WFC are integral

components of the FH/HR System and are required to maintain a minimum water reserve of 18,200 litres for firefighting purposes [B2/1896]. The FS Water Tank is not a standalone structure; it is a named component of the FH/HR System under the applicable Code of Practice.

1. The supply tank is expressly identified as one of the “major components” of the

FH/HR System under the Code of Practice for Minimum Fire Service Installations and Equipment (Specification of FH/HR System, para. 5.14(c)) [B2/860]. The consequence, as AD Keung confirmed, is that section 7(1) of Cap. 95B applies to the supply tank: any works on the supply tank that require the FH/HR System to be shut down must be carried out by, or under the direct supervision of, an RFSIC. It is contrary to the legislative intent for the installation, repair or maintenance of the supply tank to be carried out without the engagement and supervision of an RFSIC344 [WS9/1942]. It is also contrary to the legislative intent for the supply tank to be repaired by persons other than the RFSIC that is filing the relevant SDN; in other words, it is unacceptable for the RFSIC filing

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the SDN to be “just a paid rubber stamp to sign the corresponding SDN” while the actual works are carried out by non-RFSICs345 [WS9/1942-1943].

1. For the avoidance of doubt, nothing in the FSD’s website [R3/3/1039-1040]

undermines the above. Whilst there is no “tick” of the appropriate classes of RFSICs in the entry under “Supply tank” in the “Table showing the systems/installations/equipment may be required to be installed in various premises under the “Code of Practice for Minimum Fire Service Installations and Equipment” and the appropriate classes of registered contractors for such works”, there is a “tick” in favour of Class 2 RFSICs in the entry under “fire hydrant/hose reel system” (which the “Supply tank” forms a component thereof) [WS9/1943].346 As explained by AD Keung of the FSD in his oral evidence, it is only if it is a standalone water tank not connected to any FS pipes (e.g. when the water tanks were constructed at the outset) that a RFSIC would not be required [Day10/173/25 – 174/2] – he nevertheless emphasized that even if the RFSIC has not been engaged at the time of pouring of concrete, the RFSIC should be there to inspect the process and also to check at the time of acceptance [Day10/173/14- 24]. In the case of WFC, one is not concerned with the construction phase, but rather renovation (and repair) works of FS Water Tanks which form part of the FH/HR System. As such, RFSICs must be engaged.

1. Specifically, the renovation works at WFC included repair and re-tiling of the FS

Water Tanks, which required drainage of the tanks. This was agreed by the IO and Prestige as part of the renovation contract. Ms Lok Sin-ying of ISS confirmed that “the suggested approach was to renovate the FS water tank so that it could be used as a freshwater tank, a potable water tank” as a temporary measure while the freshwater tank was being repaired [Day 7/6/19-22].

345 KEUNG Sai Ming 5th WS §§19-20 346 KEUNG Sai Ming 5th WS §21

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• AD Keung confirmed that the use of an FS Water Tank simultaneously as a fresh

water tank is unacceptable under the Code of Practice. The Code provides that, under normal circumstances, “the reserve water supply for fire fighting shall be contained in a supply tank,” meaning a water tank containing a specified quantity of water reserved solely for firefighting [B2/860]. Using an FS Water Tank simultaneously as a fresh water tank would diminish the quantity of water reserved for firefighting purposes by reason of consumption for domestic use. Changing the use of an FS Water Tank to a fresh water tank during the course of repair would also affect the entire FH/HR System and cause undue delay to the resumption of the system, and is therefore also unacceptable347 [WS9/1946]. The arrangement proposed by Prestige and accepted by ISS, whereby the FS Water Tank would be repurposed as a potable water tank while the freshwater tank was being repaired, was therefore contrary to the requirements of the Code of Practice from its inception.

• Minutes of the renovation works meeting held on 29 March 2025 record that

Prestige reported FS Water Tank repair work would commence at Wang Tai House and Wang Chi House from 7 April 2025, that the FS Water Tanks would be suspended and an SDN submitted to the FSD, and that water-based fire extinguishers would be placed on odd floors [H1-3/6079-6080]. The decision to drain the FS Water Tanks was therefore a deliberate step in the renovation process. (ii) The engagement of China Status as the RFSIC

• China Status was engaged by Prestige [R1/1-2] to submit SDNs and FS251

certificates348 to the FSD in connection with the FS Water Tank repair works. China Status did not personally inspect the FSI or supervise the drainage works. 347 KEUNG Sai Ming 5th WS §29 348 Wang Yan House (Block A) [B2/1419-1420]; Wang Tao House (Block B) [B2/1473-1774]; Wang Sun House (Block C) [B2/1499-1500]; Wang Kin House (Block D) [B2/1569-1570]; Wang Tai House (Block E) [B2/1627-

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• Leung Ping-kay, Director of China Status, confirmed in his witness statement that

in or around March 2025 he received a telephone call from Gordon Ho of Prestige “requesting a quote from China Status for submitting fire service installations Shutdown Notice(s) (‘SDN(s)’) to the Fire Services Department (‘FSD’) for the temporary shutdown of the fire hydrant or hose reel system (‘FH/HR System’) of 8 buildings in Wang Fuk Court, so that PC&E could carry out renovation works to the fire services water tanks of these 8 buildings”349 [WS2/1509].

• Critically, Leung confirmed that “prior to submitting these applications, no

representative of China Status attended Wang Fuk Court for the purposes of understanding first-hand the FH/HR System in place, the relevant renovation works proposed to be conducted there, the necessity of shutting down the FH/HR System for such renovation works, or the feasibility of putting in place additional fire services measures while the FH/HR System is shut down”350 [WS2/1514]. Leung also confirmed that he “did not attend Wang Fuk Court to personally shut down the FH/HR Systems” and that “no personnel of China Status did” 351 [WS2/1515].

• In oral evidence, Leung also confirmed unequivocally: “you did not personally

go to Wang Fuk Court to check any of the FSIs and you did not independently make a judgment call in relation to the shutting down of the relevant FSIs” — “Yes” [Day 9/111/16-24]; “in relation to the submission of applications, no one from China Status have attended Wang Fuk Court to look at what the FH/HR system was like and why the system needed to be shut down, as well as whether it was 1628]; Wang Cheong House (Block F) [B2/1660-1661]; Wang Shing House (Block G) [B2/1696-1697]; Wang Chi House (Block H) [B2/1759-1760] 349 LEUNG Ping Kay (China Status) 1st WS §3 350 LEUNG Ping Kay (China Status) 1st WS §30 351 LEUNG Ping Kay (China Status) 1st WS §35. See also LEUNG Ping Kay (China Status) 2nd WS §63 [WS7/1886]

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necessary for the fire services still needed to be shut down” – “I never went there” [Day 9/115/16 – 116/4].

1. When asked whether China Status, in submitting the SDN applications to the FSD,

was “just a rubberstamp” doing only what it was asked to do, Leung answered: “Yes” [Day 9/116/19-23].

1. This concession is a significant adverse admission by China Status on the

question of RFSIC conduct.

1. Leung was aware that the SDN regime required the filing RFSIC to have

personally inspected the FSI and assessed the need for shutdown: “the QP or AS of RFSIC should critically review the need for extension of FSI shutdown and personally confirm such need. You understand that requirement; right?” — “Yes” [Day 9/105/1-5]. He acknowledged that on the information provided in the SDN, the FSD would be “of the understanding that [he was] the contractor” and that “the information of the FSD would be incorrect” [Day 9/123/1-4]. When asked whether he agreed that “FSD would be of the view that [he was] the one to check the FS water tank”, he replied that “they wouldn’t know that someone else was responsible” [Day 9/123/23-25 – 124/1-2]. He further acknowledged that according to the SDN as submitted, “[he] said that [he] went to check [the FS water tank], [he] saw that there was water tank water leakage and there was a need to repair”, and replied in the affirmative when asked whether the FSD relied on the information provided in the SDN: “the FSD relied on the information provided to you by the FSD. Do you agree?” — “Yes” [Day 9/126/21 - 127/6].

1. Although Leung initially insisted that it was “common practice” for one company

to help another company to submit documents for FS water tanks [Day 9/160/22

• 161/12], he later admitted that the company filing the SDN would be held

accountable for the acts committed by the other company [Day 9/164/19-25] and

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ultimately conceded that the RFSIC filing the SDN should take part in inspecting or repairing the relevant FSI: “So the circular letter was very clear. In seeing that if the registered FSI contractor is required to notify the FSD, it would be because they are engaged in the inspection or the maintenance work. They shouldn't act just like a rubberstamp to notify the FSD. Do you agree with that?” — “Yes” [Day 9/193/2-8].

1. China Status had a prior disciplinary record [B2/2579]. In December 2021, China

Status was penalised by the FSD’s Disciplinary Board for failing to notify the FSD of an FSI shutdown at a building in Kwai Chung. Leung confirmed this: “that was about you breaching requirements on a shutdown notice?” — “Correct” [Day 9/95/11-13]. Despite this prior sanction, and despite the enhanced inspection regime that should have applied under the Demerit Points System following that sanction, China Status was not deterred from repeating the same conduct again at WFC.

1. Importantly, the above not only implicates China Status, as it also implicates

Prestige which, not being itself an RFSIC 352 [WS9/1938], deliberately (i) engaged non-RFSIC to undertake renovation works of rooftop FS Water Tanks which are an integral part of the FH/HR System and yet (ii) approached and engaged China Status [R1/1-2] on paper to submit the SDNs to the FSD as a rubberstamp which created a false image of engagement of and supervision by an RFSIC and conceals the true picture from the FSD. (iii) How the FAS was eventually deactivated by a staff member of the PMC

1. As mentioned above, the FH/HR System and FAS at WFC share a single main

power switch found in the booster pump room. The main power switch in the booster pump room of each of the eight blocks was physically switched off by

352 KEUNG Sai Ming 5th WS §7

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Law Kwok-shui, an electrician employed by ISS (the PMC), as a result of the instruction of Prestige to drain the FS Water Tanks and pursuant to job orders issued by ISS management353 [WS2/1233-1234].

1. Law’s witness statement sets out the three steps he understood to be required for

FS Water Tank drainage: turning off the upfeed switch to stop the upfeed pump; turning off the gate valves to drain the tanks at rooftop and ground floor; and closing the lever switch in the booster pump room to stop the booster pump. He understood this procedure from observations of Victory Fire during annual inspections354 [WS2/1234].

1. Law knew that operating FSIs required an RFSIC licence. When asked why he

proceeded despite that knowledge, Law stated that he took the job order to Lok Sin-ying of the management office, who told him that “PC&E needed to empty the tanks and need my assistance because I have the electrician licence” [Day 7/85/21 - 86/10]. When pressed further — “since you know that you require a licence to operate the FSIs and even though Ms Lok told you to assist, you still did so. Why?” — Law answered: “Well, I just followed orders” [Day 7/86/11-16].

1. AD Keung of the FSD confirmed that a non-licensed PMC switching off the main

power switch without the engagement of an RFSIC was contrary to law, unprecedented in his experience, and an elementary error: When asked whether there was any circumstance under which a PMC could turn on and off the switch without engaging a RFSIC, AD Keung answered: “That would be against the law.” When asked whether a third party turning off the switch was something rare or happened often, he confirmed: “I’d say the former... I’ve never seen somebody who does not belong to an RFSIC turning off the switch” [Day 10/18/24 - 19/12].

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He further confirmed: “just for draining the tank” there was no need to turn off the main switch, and that if a RFSIC had performed this act it would have been “a grave error” [Day 10/17/4 - 18/10].

1. Lee Shing-foo, an ISS carpenter, assisted Law by opening the booster pump room

doors with the ISS master key on each occasion. Lee confirmed he did not enter the pump room and was unaware that the main switch controlled the FAS [Day 7/70/5-21].

1. Between approximately May and August 2025, ISS received 8 job orders to assist

Prestige with FS Water Tank drainage across the 8 blocks. ISS currently holds only 3 copies H2/6779-6781355 [WS2/1255].

1. There is a direct conflict of evidence between Law and Lok as to whether Law

raised the RFSIC licence requirement with Lok before proceeding. Law’s account is that he raised the issue and was told to proceed because he was an electrician356 [WS2/1233]. Lok’s account is: “I have no impression that they raised that” [Day 6/134/12-16]. On either version, ISS management issued job orders for work that required the engagement of an RFSIC without ensuring an RFSIC was so engaged.

1. No proper record was kept of Prestige’s entry into the pump rooms to effect the

release of water. Cheng Tsz-ying of ISS confirmed that Prestige workers “did not really do the registration because they were stationed in the complex. They were all in uniform” [Day 8/60/11-22]. The consequence was that the FSI shutdown occurred without documentation: “If the procedure was followed, then there should have been a form stating that there was a drainage, working permits were

355 李承富 (Lee Shing-foo, ISS) 1st WS §17 356 LAW Kwok-shui 1st WS §19

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issued and the entry of whether the fire alarm system would be affected would be filled in” — “Prestige workers did not really do the registration” [Day 8/60/11- 19]. (iv) The maintenance and repair works carried out by Victory Fire at WFC from October to November 2025 up to the day of the fire

1. Victory Fire’s annual inspections in March 2025 found no structural problems

with the FS Water Tanks. Wong Kin-wa (electrician of Victory Fire) confirmed: when asked whether during the March 2025 annual check anyone told him about leakage, he said “No”; when asked whether he found any structural problems with the water tanks on the rooftop, he said “No” [Day 5/97/14-17] [Day 5/106/11- 16].

1. The rectification works contracted to Victory Fire in October 2025 concerned

defects in the FAS components (BGUs, alarm bells) and hose reel components identified in the March 2025 FS251s. They did not concern the FS Water Tanks themselves357 [WS2/1529].

1. On 16 to 17 October 2025, Victory Fire’s plumbers attended WFC to replace hose

reel nozzles and gate valves. They discovered the FS Water Tanks in all 8 blocks were empty, having been drained as part of the renovation works. Chung Kit-man of Victory Fire was informed by his colleague Tong Hing-lun, who had been told by ISS’s Lam Man-yan that the tanks were empty due to ongoing renovation358 [WS2/1529]. Chung accepted that he could not complete testing of the replaced components without water in the FS Water Tanks [Day 6/30/19-25 – 31/1-2]. Notably, there is no contemporaneous evidence that Victory Fire asked Lam Man-yan for a copy of any SDN during their discussion on 16 October 2025 [Day 9/20/17-25 – 21/1-9], nor is there any contemporaneous evidence that Victory

357 CHUNG Kit-man 1st WS §§5-6 358 CHUNG Kit-man 1st WS §§5-6

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Fire asked Cheng Tsz-ying of ISS for a copy of any SDN during the alleged call to her on 17 October 2025 or until 17 November 2025 [Day 6/64/4-12, 66/7-25 – 67/1-21]. In the premises, it can be inferred on the available evidence that Victory Fire therefore made no attempt to verify the status of the FSI shutdown or to ascertain whether the FSD had been properly notified, despite having direct knowledge that the FS Water Tanks were empty across all eight blocks for more than one month and notwithstanding the hindrance it caused to the completion of their own repair works.

1. On 19 November 2025, Victory Fire’s electricians Li Chun-yin and Wong Kin-

wa discovered that the main power switches in the booster pump rooms of all eight blocks had been switched off (not to mention that the upfeed pump was removed). Li Chun-yin found that in all eight blocks of WFC, the ground floor fire pump main power switch had been switched off, which caused the FAS and FH/HR System to be simultaneously inoperative359 [WS2/1538]. He immediately informed Cheng Tsz-ying of ISS. Cheng told them that due to large-scale renovation works the fire system had to be suspended, that an SDN had been submitted to the FSD, and that temporary fire extinguishers had been placed as required by the FSD360 [WS2/1530]. Chung Kit-man admitted in oral evidence that after what transpired after 19 November 2025, when told about the major maintenance works, he “thought it was more than that” because the part related to the upfeed pump was removed and that “if it was work relating to the repair of the FS tank, that would not be necessary” [Day 9/47/243-25 – 48/1-21]. Nonetheless, Victory Fire’s electricians were instructed by Chung Kit-man to continue the repair works and notwithstanding that a test could not be conducted with the main power switched off [Day 6/38/22-25 – 39/1-7]. Once again, there is no contemporaneous evidence that Victory Fire asked Cheng Tsz-ying for a

359 李俊賢 (LI Chun Yin, Victory Fire) 1st WS §5 360 CHUNG Kit-man 1st WS §8

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copy of the SDN on 19 November 2025 [Day 5/112/24-25 – 113/1-5] [Day 6/72/19-23] [Day 6/114/21-25], nor did Victory Fire take any steps to verify that the SDN covered the FAS (as distinct from merely the FH/HR System), despite its direct knowledge that the FAS had been shut down for a period of time (possibly for over a month since 16 October 2025 [Day 6/89/3-6]) and notwithstanding the hindrance it caused to the completion of their own repair works; they simply turned a blind eye.

1. Contemporaneous documentary corroboration exists: at 11:51 to 11:54 am on 19

November 2025, Li Chun-yin sent WhatsApp messages to the block-specific WhatsApp groups stating the fire service pumps were switched off in relation to blocks B, A, C and others consecutively (e.g. [R1/686-692]).

1. Cheng did not tell Victory Fire that the main switch controlled the FAS, did not

inform Victory Fire of the extent of the FSI shutdown, and did not pass the SDN documentation to Victory Fire. When asked why she did not show the SDN to Victory Fire or suggest coordination between the two contractors, Cheng answered: “it didn’t cross anyone’s mind that that needed to be done” [Day 8/70/17 - 71/13].

1. On 26 November 2025, Victory Fire’s workers completed their rectification

works and left WFC by approximately 1:00 pm. No test of the FSI was conducted and no FS251 was issued. At 1:28 pm on the day of the fire, ISS’s Lam Man-yan called Chung Kit-man, who told him that for the connection system component, a certificate could not be issued because the FS Water Tanks had no water and the power supply to the water supply system and fire pump had been shut off361 [WS2/1531]. Less than two hours later, the fire broke out.

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N2. How the shutdown of the FAS resulted in such heavy casualties (i) The relevant factual evidence

1. When the fire broke out at approximately 1451 hours on 26 November 2025, the

FAS in all eight blocks was de-energised. The fire alarms did not sound at any block during the critical early phase of the fire, depriving residents of the warning they needed to evacuate.

1. Multiple resident witnesses confirmed they did not hear any fire alarm during the

fire. Residents only became aware of the fire through neighbours knocking on doors, smelling smoke, or seeing flames. Lam Man-yan of ISS attended the booster pump rooms of Wang Yan House, Wang Tao House and Wang Sun House on the afternoon of the fire and physically switched the main power switches back to “ON.” In Wang Yan House the fire alarm sounded; in Wang Tao House it did not; in Wang Sun House it sounded362 [WS2/1217-1218].

1. The FSD’s FPFS arrived at WFC at approximately 1554 hours and attempted to

reactivate the FAS at Wang Yan House, Wang Tao House and Wang Chi House (the three blocks not yet significantly affected by fire). The FAS failed to reactivate even after the main power switch was turned to “ON” at Wang Yan House, Wang Tao House and Wang Chi House. Wang Chi House was unaffected by fire and the FAS should have remained intact, yet testing revealed it was non- functional363 [WS4/1799-1801].

1. The comparative casualty data starkly illustrates the significance of the FAS

failure. AD Keung was asked whether the FAS failure was “definitely one major cause” for the difference in the number of deaths between Wang Sun House (which experienced momentary FAS activation and suffered only two deaths

362 Lam Man-yan 1st WS §§20-23 363 KEUNG Sai Ming 3rd WS §§4.1-4.8

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despite severe structural damage) and Wang Tai House (where the FAS never activated and over 80 persons perished) and a factor that “should be given some weight”. AD Keung answered: “I cannot rule this out” [Day 10/47/4 - 48/2].

1. Had the FSD been notified of the FAS shutdown, particularly a shutdown of FAS

(which is critical) for an excessive period lasting for a few months, the FSD could have taken immediate enforcement measures such as issuance of FHAN and refusal of extensions of SDNs. Meanwhile and at the very least, the FSD would have updated the contingency plan to deploy additional appliances, notified the local fire station, and required the owner to implement standby measures and notify residents. None of this occurred. AD Keung confirmed by reference to the FSD’s Circular Letter No. 1/2021: “it is imperative that the FSD should be promptly notified of the FSI shutdown so that the units of the FSD may formulate appropriate contingency plan and advise the owners/occupiers of the premises to take additional fire safety measures during the shutdown period”364 [WS9/1939]. (ii) The IFITF’s investigations and expert evidence

1. The IFITF’s findings on the FAS shutdown and its contribution to casualties are

addressed in Section G5 above. The IFITF concluded that the security guard’s attempt to activate the FAS at Wang Cheong House at 1448 hours, had the system been operational, “could have provided residents with a critical evacuation alert during the key escape window between 1448 hours and 1458 hours, when escape routes were still tenable” (IFITF Report §10.4.4 [ER1/215]). Instead, “as the FAS was not functional, residents remained unaware of the immediate danger until evacuation was no longer viable” (IFITF Report §10.4.5 [ER1/215]).

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N3. The primary and supervisory responsibilities for such contributing factor (i) The regulatory and supervisory regime for the shutdown of FSI (1) FS251, its filing and response / following up upon receipt

1. Under Regulation 9(1) of Cap. 95B [B2/179], whenever an RFSIC installs,

maintains, repairs or inspects any FSI, it must within 14 days after completion of the work issue a certificate (FS251) to the person on whose instructions the work was undertaken and forward a copy to the DFS. The certificate must state the address, a description of the FSI concerned, the date of completion, the nature of the work, and whether the FSI is in efficient working order. An RFSIC who signs or issues a false or misleading certificate commits an offence under Regulation 9(2A) and 9(3) of Cap. 95B.

1. The FSD’s processing of FS251s is predominantly manual and paper-based

(approximately 95% of submissions are by fax or post), subject to significant time lags between signing, submission and inputting into the Integrated Licensing Fire Safety and Prosecution System (“LIFIPS”). AD Keung accepted that in one documented case, an FS251 signed in December 2023 was not faxed to the FSD until August 2024 and not inputted into LIFIPS until November 2024 [Day 10/105/16-24].

1. The FSD’s audit of FS251s operates on a random sampling basis. AD Keung

confirmed that only approximately 300 annual inspection checklists out of approximately 60,000 buildings per year (0.5%) are document-checked [Day 10/60/12-22]. Such audit of checklists is, however, only one component of the FSD’s overall monitoring activity. The FSD also conducts document reviews of

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FS251 certificates submitted by RFSICs, on-site verification inspections, and functional tests of FSI on a selective basis365 [WS1/107-108].

1. AD Keung explained these components in detail during oral evidence.
2. 1. For document review, the FSD selects approximately 15,000 out of

300,000 certificates submitted annually for checking, including all 20,000- odd certificates relating to licensed premises (restaurants, guesthouses, bed spaces, dangerous goods stores) and approximately 30,000 certificates reporting defects, which are followed up individually [Day 10/57/18-24; Day 10/61/11-19]366. In other words, a total of 65,000 out of 300,000 certificates received annually will be audited by the FSD for follow up. 703.2. For verification inspections, the FSD conducts approximately 10,000 random on-site inspections per year, approximately 2,000 follow-up inspections arising from defect certificates, and approximately 1,000 targeted inspections of contractors with accumulated demerit points [Day 10/62/2-18]. 703.3. For functional tests, the FSD conducts approximately 1,000 tests per year arising from reports of fire alarm mis-activation or actual fires, together with approximately 80 targeted functional tests of contractors with high demerit scores [Day 10/62/22 - 63/7].

365 KEUNG Sai Ming 1st WS §5.4.2 366 See Chinese transcript at [Day 10/31/29-34] for more clarity: “姜世明先生：係。咁剛才我講你入份證書畀我，我 會抽一萬五千份。此外，嗰三十萬證書裏面其實有兩萬份係關於一啲持牌處所、餐廳食肆、酒店賓館、危險倉 等等。咁嗰啲因為要同我哋續牌，或者係申請牌照呢，我哋都係份份都有所跟進。此外，三十萬份證書裏面約 有每年三萬份，佢會喺個證書嘅第三部分係寫咗有一啲損壞事項，咁呢三萬份損壞事項我哋都有所跟進，咁呢 個我將會歸落去我呢個（English Spoken）呢個類別。”

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1. 4. AD Keung emphasised that these different activities should be viewed

collectively rather than in isolation [Day 10/60/20-24]. (2) The FSI SDN, its filing and response / following up upon receipt

1. The SDN mechanism under the FSD’s Circular Letter No. 1/2021 [B2/1302] was

a notification (not approval) mechanism.

1. When defects requiring overnight or continuous shutdown of more than 24 hours

are identified, the RFSIC is required to notify the FSD by submitting an SDN. Upon receipt, the local fire station must visit the premises within 24 hours, conduct a risk assessment, issue an advisory letter, and monitor progress. The system relies entirely on the accuracy / truthfulness and timeliness of the RFSIC’s reporting. AD Keung confirmed: “the whole mechanism is built on the contractor’s integrity and his effective and timely reporting of the shutdown” — “Agree”; “So if the contractor makes a mistake it’s not possible for the FSD to know” — “Well, unless it falls within the scope of random inspection” [Day 10/84/8-16].

1. The FSD’s Circular Letter No. 1/2021 explains the rationale for the notification

system [B2/1302]: “it is imperative that the FSD should be promptly notified of the FSI shutdown so that the units of the FSD may formulate appropriate contingency plan and advise the owners/occupiers of the premises to take additional fire safety measures during the shutdown period, where necessary.” The RFSIC is identified as “the most appropriate person to notify the FSD accordingly” [B2/1302] because the RFSIC “will be engaged by the FSI owners to inspect FSIs to see whether they have to be shut down for maintenance/modification/repair”367 [WS9/1939].

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• The notification system is not an approval mechanism. AD Keung’s witness

statement explains: “The FSD is not privy to the engagement process nor the contractual negotiations and therefore will not be directly involved in the technical content of the works. The RFSIC engaged will inspect the FSI and if there is a need for them to be shut down for maintenance / modification / repair overnight or for more than 24 hours continuously, the RFSIC will notify the FSD of the shutdown. However, the notification system for FSI shutdown is not an approval mechanism as the RFSICs should bear the ultimate responsibility in certifying the FSIs are in efficient working order”368 [WS8/1911].

• The 14-day interval requirement for SDN extensions is designed to ensure that

the RFSIC is “actively and consciously making a professional assessment that an extension is required” and to enable the FSD to verify that repair works are being overseen by an RFSIC, to identify the latest RFSIC responsible, and to ascertain whether the RFSIC may have been removed from the register369 [WS8/1912].

• Where an extension notification pertains to the same defect as previously assessed,

“no further visit/inspection or duplicated risk assessment would be required” under the pre-fire regime. The rationale given is that “the initial risk assessment had already been completed, the necessary mitigation measures had been implemented, and the relevant stakeholders including residents had been informed of the shutdown”370 [WS1/113]. (ii) The primary responsibilities of Prestige and the RI

• Prestige, as the main contractor, (i) engaged non-RFSIC to undertake renovation

works of the FS Water Tanks which are an integral part of the FH/HR System without supervision of an RFSIC and (ii) directed the drainage of the FS Water 368 KEUNG Sai Ming 4th WS §9 369 KEUNG Sai Ming 4th WS §10 370 KEUNG Sai Ming 1st §6.8

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Tanks as part of the renovation works which eventually resulted in ISS (a non- RFSIC) performing the physical shutdown of the main power switch. Under section 7(1) of Cap. 95B, “no person other than a registered contractor shall maintain, inspect or repair any fire service installation or equipment which is installed in any premises.” Shutting down any FSI is considered an act that can only be carried out by an RFSIC371 [WS8/1911]. AD Keung stated that this arrangement was “unacceptable”372 [WS9/1944].

1. When Prestige informed Leung Ping-kay of China Status at the outset that the

building management (ISS, a non-RFSIC) would “handle the physical shutting down of the FH/HR Systems,” Leung raised no objection and sought no clarification. When asked whether this struck him as legally impermissible, he replied: “I don’t know how to answer you” [Day 9/175/7-13]. When asked who would actually perform the shutdown, he said he was simply told “someone would make the arrangement” [Day 9/174/24 - 175/5].

1. AD Keung confirmed that “from the FSD’s stance, under current law, it is explicit

that they have to personally monitor the shutting down of the FS system” and that allowing a non-RFSIC to perform the act was “against the law” and “something that one must never do” [Day 10/39/9-20].

1. A further point requires emphasis. Prestige itself is not an RFSIC. AD Keung

confirmed that although a separate entity bearing a similar name, Prestige Construction & Fire Engineering Co Ltd, holds RFSIC registration (RC1/0563 and RC2/0744), that company is distinct from Prestige and did not carry out any FSI-related works at WFC 373 [WS9/1938]. Prestige therefore possessed no qualification whatsoever to direct, arrange or supervise any works touching on

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FSIs. The arrangement was one in which a non-RFSIC contractor engaged non- RFSIC to undertake renovation works on FSIs and directed a non-RFSIC PMC to operate FSIs as part of the renovation works, with a third-party RFSIC engaged solely to provide the paperwork.

1. In short, every actor in this chain, save for the paper signatory, lacked the

statutory authority to do what they did. (iii) The primary responsibilities of China Status

1. China Status submitted SDNs to the FSD without conducting any site

inspection 374 [WS2/1514], without personally assessing the need and consequences for shutdown375 [WS2/1517], without effecting the shutdown or verifying which FSI systems were actually being shut down376 [WS2/1515], and without ever discovering [Day 9/121/16-21], let alone, notifying the FSD that the FAS (as distinct from the FH/HR System) had been shut down.

1. China Status’s SDNs consistently ticked only the FH/HR System box, leaving the

FAS box blank. Leung admitted this was because “we only knew that the water tanks was being worked on” and that he filled the forms out as Prestige asked him to [Day 9/121/16-21]. China Status never realised that the FAS had in fact been shut down, let alone, report it to the FSD because it never visited the site. As a result, the FSD received no notification that the FAS was also inoperative, and the contingency plan was never updated to reflect this critical additional risk.

1. AD Keung’s assessment was unequivocal, China Status also misrepresented to

the FSD that it was the RFSIC carrying out the relevant repair works and that the repairs were needed as a result of leakage of the FS Water Tanks: “China Status

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not only failed the expectation of the public, but also breached the FSD’s trust by falsely representing to the FSD that it was the relevant RFSIC carrying out the relevant repair works based on the defect(s) as detected. Moreover, the relevant FS251s were not provided to the FSD with the corresponding SDNs until October 2025, and descriptions of defects in the concerned FS251s have misled the FSD by giving the impression that the shutdown of the FSI was due to repairs needed as a result of ‘leakage of FS water tanks’ (without mentioning ‘empty tanks’, let alone the plan to use the FS Water Tanks for other purposes, or indeed the shutdown of the FAS)”377 [WS8/1915]. Leung admitted that the FSD would be so misrepresented as to the identity of the RFSIC carrying out the relevant repair works [Day 9/122/13-18] [Day 9/123/1-4] [Day 9/123/19-25 – 124/1-2].

1. Leung admitted frankly that he did not exercise his discipline in looking at

whether his acts breached the requirements in the circular letter [Day 9/136/3-16; Day 9/155/20 – 156/1], and that he “breached all of [his] obligations” shown to him in the circular letter [Day 9/156/2-5].

1. It is “never part of the notification system and... unacceptable for one RFSIC to

sign the SDN while the actual works are carried out by another RFSIC (let alone, as it transpires in the case of Wang Fuk Court, by sub-contractors who are not even RFSICs). Such a practice circumvents statutory accountability and undermines the FSD’s ability to enforce disciplinary action against the responsible RFSIC should they fail to follow the relevant requirements” 378 [WS9/1939].

1. When the FSD made enquiries of China Status in October 2025 following

multiple extension applications, Leung did not disclose to the FSD that China Status was playing a purely administrative role and was not the RFSIC

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conducting or supervising the works [Day 9/170/14-21]. The FSD therefore remained under the false impression throughout the relevant period that China Status was the responsible RFSIC inspecting, supervising and certifying the FSI works at WFC [Day 9/122/13-18] [Day 9/123/1-4] and that the works were necessitated by leakage of the FS Water Tanks [Day 9/123/19-25 – 124/1-2] [Day 9/126/21-25 – 127/1-6].

1. Overall, AD Keung confirmed: it was “unacceptable for Tin Hung and Red Sun,

both not being RFSICs, to carry out the concrete works at the water tanks particularly when China Status is just a paid rubber stamp to sign the corresponding SDN” 379 [WS9/1942].

1. AD Keung’s 5th Witness Statement elaborated on the specific obligations that

China Status failed to discharge. The Code of Practice for Inspection, Testing and Maintenance of Installations and Equipment requires at clause 1.16 that the RFSIC “shall advise the residents/occupants/property management company to take preventative measures to mitigate the risk during the works period when any FSI is defective or shut down for inspection, maintenance, modification or repair” [B2/884]. Without attending the site and supervising the works, an RFSIC cannot properly discharge this advisory obligation. The same Code further provides at Appendix 9, Item (I), that the “QP/AS of RFSIC should critically review the need for extension of FSI shutdown and personally confirm such need” [B2/961].

1. Without attending the site, an RFSIC cannot critically review whether an

extension is required or whether the system should be resumed to normal operation. China Status did neither: it never attended the site, never advised the residents or PMC of preventative measures from its own assessment, and never personally confirmed the need for any of the 85 extensions it submitted for all 8

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blocks at WFC. Each extension was filed mechanically on the basis of information provided by Prestige, without any independent professional judgement and without any concern for the progress of the repair works. This was admitted by Leung: “You didn’t carry out any inspection, you just did what you were told to do, you didn’t explore for how long the system needed to be shut down and whether it could be shut down for a shorter period of time. And this is against the circular letter we went over just now. Do you agree? […] What does ‘mm’ mean? Does it mean you agree?” – “Yes” [Day 9/129/11-20]. (iv) The primary responsibilities of the PMC

1. The PMSA Code of Conduct specifically requires licensed PMCs to monitor the

progress of the RFSIC’s work, follow up timely with the RFSIC on required rectifications, follow up timely with the RFSIC that it has notified the DFS of FSI shutdowns, and assist FSD officers during visits [B2/2631]. AD Keung confirmed: “had ISS monitored or checked the guidelines, then this should not have happened” — “I agree. It should not have happened” [Day 10/21/12-20].

1. ISS bears the responsibility for: issuing job orders directing non-RFSIC staff to

operate FSI; failing to coordinate between the two engaged RFSICs (Victory Fire and China Status); and failing to ensure FSI were in efficient working order.

1. Lok Sin-ying of ISS confirmed that she knew the water tank was part of the FSI:

“Did you know that the water tank is part of the FSI?” — “Yes” [Day 7/31/17- 19]. Yet when asked whether it occurred to her that draining the FS Water Tank should be done by a RFSIC rather than the property company, she answered: “No, it did not occur to me” [Day 7/33/19-24]. She did not ask Prestige whether they would engage a RFSIC [Day 7/33/14-18].

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• Cheng Tsz-ying, ISS’s property officer, confirmed she understood it was her

responsibility to know when the fire systems were suspended and when they would be resumed, describing this as “a serious matter” [Day 8/40/25 - 41/4]. Yet despite this knowledge, she never followed up on the duration of the shutdown, never coordinated with Victory Fire, and never passed the SDN documentation to Victory Fire [Day 8/70/17 - 71/13].

• Lam Man-yan, who rejoined ISS in October 2025, confirmed he had not seen any

SDN and did not know the tanks in all eight buildings were empty until the day of the fire. When asked “nobody told you?”, he answered: “Yes” [Day 7/141/5- 17]. He confirmed he did not have a chance to see any SDN documentation up to the point of the fire [Day 7/158/8-15]. This is reinforced by the evidence of the WhatsApp exchange between Lam and Chung Kit-man on the night of the fire: Lam asked Chung “how to get those forms because I’ve never downloaded them before” and asked whether there were any certificates in relation to WFC’s buildings [Day 7/147/11-25 - 148/1-2], and Chung texted Lam a link to the SDN standard form [H3/6798]. This is conduct consistent only with Lam never having previously seen or received any SDN documentation in relation to the FS Water Tank shutdown.

• AD Keung further identified a systemic gap in coordination: “I have seen

instances like this... coordination is very important. We haven’t really seen much problem with coordination before but we have seen in this incident coordination is an issue” [Day 10/28/23 - 29/19]. There was no express regulatory requirement compelling PMCs to coordinate between multiple simultaneously engaged RFSICs, and the evidence demonstrates that ISS did not do so. 274

(v) The primary responsibilities of Victory Fire

1. Victory Fire was engaged for the annual inspection and rectification works at

WFC. When its staff discovered during their repair works on the FH/HR System and FAS at WFC that the FS Water Tanks were empty (16 October 2025) and the main power switches were switched off (19 November 2025), Victory Fire had an obligation under the FSD’s circular letter No. 1/2021 to notify the FSD. Not only did it fail to do so, it did nothing to reinstate both FSI systems even though their repair works on the FH/HR System [Day 6/30/19-25] and FAS could not be tested as a result [Day 5/108/22-25 – 109/1-5] [Day 6/38/22-25 – 39/1-7].

1. AD Keung rejected Victory Fire’s position that it had done what it was “supposed

to do”: “I won’t accept what he said because, in this trade, we work with fire services installations and the ultimate goal is to protect residents. If the power supply is cut off, even if the system is operational, it does not achieve the intended effect. The alarm will not sound, there’s no water. And we have already reminded them in the circular letter to notify us so that we can implement other measures... deploy more appliances, notify the residents” [Day 10/32/5-24].

1. By 16 October 2025, Chung Kit-man’s own evidence establishes that he knew

the FS Water Tanks in all eight blocks had no water and that the upfeed pumps had been switched off [Day 6/28/23 - 29/14]. He acknowledged that he had considered that the main switch could have already been shut off for more than one month from 16 October to 19 November; “And did you also think that the lever switch had been turned off for a month, since 16 October?” – “Yes” [Day 6/89/3-6]380.

1. Yet Victory Fire took no steps to submit its own SDN, made no enquiry of China

Status, did not ask ISS to restore power before testing, and did not notify the FSD

380 More clearly reflected in Chinese transcript at [Day 6/55/2-4]

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of the FAS shutdown, let alone the empty water tank. When asked whether he considered conducting an inspection to check the situation during the one-month period between 17 October and 17 November 2025, Chung confirmed: “we didn’t consider this” [Day 6/63/12-18].

1. When Victory Fire’s electricians discovered the lever switches were turned off

on 19 November 2025, Wong Kin-wa accepted the management office’s explanation without further enquiry: “we felt that, well, if a contractor was involved, the contractor should know what they were doing” [Day 5/126/14-21]. He confirmed he did not ask Prestige, and did not ask China Status directly [Day 5/114/19 – 115/4].

1. AD Keung confirmed that the obligation to notify the FSD fell on both Victory

Fire and China Status: “Both of them” [Day 10/33/11 - 34/16]. Victory Fire could not shelter behind the existence of China Status’s SDN for the FH/HR System: quite apart from the issue of the empty water tank, it knew the FAS had been shut down for over 24 hours (and possibly for over a month) and yet did not obtain copies of the SDN to check whether the FAS was covered by them despite the admitted unusualness in the situation [Day 6/90/8-12]. (vi) The Government’s supervisory responsibilities: (1) The audit-check system for all submissions received, and the FSD’s focus

1. The FSD’s monitoring of RFSIC performance operates through various distinct

mechanisms: document review of FS251s; verification inspection; and functional test of FSI. These are separate activities conducted on different occasions and on a selective basis.

1. The FSD conducts proactive audit checks on a percentage of submitted FS251s.

For certificates indicating no defects, the local fire stations also conduct a

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significant number of on-site verification inspections annually. Throughout the process, any defects or discrepancies identified are followed up, and instances of non-compliance or misconduct by RFSICs may be uncovered381 [WS1/106-107].

1. In general, visits and inspections to a domestic estate like WFC by various units

of the FSD are initiated from three aspects: fire hazard complaints, FSI-related visits and inspections, and proactive visits by local fire stations under the Risk- based Building Fire Safety Visit Programme382 [WS1/114-116].

1. High-priority complaints (involving “imminent danger” to life such as locked

escape routes) trigger a response within 24 hours. Normal-priority cases trigger inspection within 10 working days383 [WS1/114].

1. The Risk-based Building Fire Safety Visit Programme, launched in 2018,

provides for proactive risk-based visits across the territory to promote fire safety education. WFC was not selected under this programme during the renovation period [Day 10/96/13]. (2) The FSD’s response upon receipt of SDNs, complaints or enquiries, in particular when site inspections would be carried out

1. AD Keung’s evidence established that the FSD visits and inspections at WFC

were initiated from three aspects: fire hazard complaints, FSI-related visits/inspections (including defective FSI and shutdown cases), and proactive visits by local fire stations [Day 10/95/10-16].

1. Between July 2024 and November 2025, the FSD conducted a total of 26

visits/inspections at Wang Fuk Court: 18 FSI-related visits/inspections (6 relating to defective installations and 12 relating to shutdowns), 7 complaint inspections

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(2 relating to EVA, 3 relating to means of escape, and 2 relating to other matters), and 1 proactive visit384 [WS1/114-119].

1. For complaint-driven inspections, the FSD operates under a priority classification

system. “High priority” complaints alleging imminent danger to life, such as locked escape routes, require investigation to commence within 24 hours, while “normal priority” cases trigger inspection within 10 working days385 [WS1/117; Day 10/69/20-25]. AD Keung confirmed that for complaint-led investigations, no prior notification is generally given because this could compromise the investigation386 [WS8/1909; Day 10/70/9-14].

1. Among the complaint inspections at WFC, two related to matters other than the

means of escape or EVA. One concerned a public complaint via 1823 about the storage and potential use of large quantities of polystyrene boards (25 September 2024), and the other concerned a complaint about the installation of solar panels on the roof floor (17 November 2024)387 [WS1/118]. In each case, the FSD conducted a site inspection focused on the subject matter of the complaint. 744.1. For the complaint about the storage and potential use of the polystyrene boards, no breach of the FSO was found, and as the case had already been referred by 1823 to the ICU, no further referral was made by the case officer. 744.2. The solar panel complaint was referred to the ICU for follow-up.

1. In relation to the complaint inspection on 25 September 2024, it was preceded by

another complaint inspection at or around the same period. The FSD received a

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complaint in the morning of 13 September 2024 that polystyrene boards were obstructing the means of escape and the FSD carried out inspection in the afternoon of 13 September 2024, finding that there was no obstruction to the means of escape or EVA [B2/1737-1739]. This was explained further by AD Yung in his oral evidence [Day 17/20/9 – 22/14].

1. For the proactive visit to WFC, AD Keung explained in oral evidence that the

visit to WFC took place on 19 October 2025. During such visit, officers of the FSD checked whether the EVA was obstructed and tested the street fire hydrants [Day 10/96/1-25].

1. In addition to FSI-related visits, complaint inspections and proactive visits, the

FSD also responded to enquiries from stakeholders. For example, the FSD organised a fire safety talk at Wang Fuk Court attended by approximately 100 residents. Station Commander Herman Hor explained that such talks are arranged upon application by members of the public and are not automatically triggered by major renovation works [Day 17/68/1-25].

1. As to the response to SDNs, upon receipt of an SDN, the objectives of the on-site

risk assessment are twofold: “to assess the risk from an operational perspective” and “to assess the scale and type of additional fire safety measures to be taken by FSI owner(s) during the shutdown period” 388 [WS1/111]. The assessment focuses on building type, configuration, type of occupancies affected, availability of water supply for firefighting purposes, state of housekeeping, and information provided by the RFSIC about the types of FSI that are inoperative or shut down389 [WS1/112].

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• The structural design and perhaps a weakness of this mechanism is that it is

designed to verify compliance with standby measures rather than to check the accuracy / truthfulness of the SDN or the condition of other FSI systems. AD Keung confirmed: “Because it’s just a partial shutdown, you would assume that other systems would still be in working order?” — “Correct” [Day 10/84/4-7].

• This (valid and natural) assumption is the vulnerability that China Status’s

declarations exploited.

• When the FH/HR System SDN was received, the FSD acted on the information

as stated on the SDN and did not proceed further to verify the condition of the FAS or any other remaining parts of the FSI systems. AD Keung accepted: “before the incident, when a fire safety system is defective, the Fire Services Department has not checked other systems to see if they’re in working order... if you’re talking about that case, then that is true” [Day 10/86/5-11].

• The 8 April 2025 on-site inspection following receipt of China Status’s first SDN

illustrates the operational weakness in the SDN regime. AD Keung explained that verifying FSI operability requires more than visual inspection: “You can’t just conduct visual inspection to check if the system is in efficient working order. You need to conduct functional tests, and for some buildings they may have not only two systems, but seven” [Day 10/85/7-14]. The SDN regime did not require the attending officer to enter the booster pump room, check whether the main switch was in the correct position, check the FAS independently, and verify the condition of the FS Water Tank; for other circumstances, the FSD had “other kinds of audits and check” [Day 10/86/9-11]. AD Keung accepted that the officer’s finding that “defects were the same as stated on the shutdown notice” was based on an assumption rather than independent verification [Day 10/122/16-25], and that 280

“based on the mechanism then, that was adequate, but we think there’s room for enhancement” [Day 10/123/7 - 124/2].

1. The FSD conducted one proactive visit to WFC during the entire renovation

period (19 October 2025), and this visit was limited to checking the EVA and street fire hydrants; no inspection of FSI, pump rooms or main switches was conducted. AD Keung confirmed: “while Wang Fuk Court was undergoing major repairs, that was the only visit that was done” [Day 10/97/15-17] and that “before the fire in relation to Wang Fuk Court” there would not be a surprise check arising specifically from major renovations [Day 10/73/14-18].

1. The Chairman observed: “Do you agree — of course with hindsight is what we’re

doing now — the fire risk of buildings under major renovation is almost the highest because, in addition to existing fire risks, there are also people living there?” AD Keung confirmed: “Well, speaking today, I agree with what you say” [Day 10/101/6-12]. The Government accepts this observation and acknowledges the absence of a specific arrangement for enhanced FSI inspection or surprise checks triggered by major renovation works as an area requiring improvements. (vii) The FSD’s handling of the FS251s and SDNs in the case of WFC and actions taken

1. By way of illustration, China Status submitted the first SDN for Wang Tai House

on 7 April 2025 (estimated completion 20 April 2025). The FH/HR System remained suspended through 16 further extension notices until the day of the fire on 26 November 2025, a total shutdown period of approximately 7.5 months. The same pattern repeated at Wang Chi House (also 7 April 2025, 16 extensions). The

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FSD’s block-by-block response across all eight blocks is set out in detail in AD Keung’s witness statement390 [WS1/123-135].

1. AD Keung did explain that under the pre-fire practice, the FSD may intervene if

there are extensions for a long time. However, he frankly admitted that based on the data available to the FSD, many works concerning FSIs may take more than several months to complete by reason of inter alia the time required for owners to engage RFSICs to undertake the work, etc. He also explained that what the FSD was most concerned with at the time were buildings which do not even have RFSICs or conduct annual inspections. Against such context, the FSD did not question the extension notices at WFC (including the 16 extension notices for Wang Tai House or Wang Chi House). Under the prevailing mechanism, as long as an RFSIC was shown to be engaged and submitting extensions, no further enquiry was initiated for up to one year. AD Keung accepted: “SDN being extended 16 times, if there were new SDNs being submitted... over seven months you did not ask how come it would take so long” — “Right” [Day 10/134/8-16]. When asked whether, regardless of the number of SDNs (85 across the estate), “there is no mechanism to follow up on the matter, even if the extension lasted for over a year,” AD Keung confirmed: “Agree.” He also acknowledged that such practice was “not ideal” [Day 10/146/12-22].

1. The FSD was unaware that two RFSICs (Victory Fire and China Status) were

simultaneously engaged at WFC. AD Keung attributed this in part to the volume of paper-based submissions and time lags in LIFIPS, which prevented detection of the back-to-back submission of Victory Fire’s FS251 (31 March 2025) and China Status’s first SDN (7 April 2025). He acknowledged that “there is a large amount of certificates posted to our department, 300,000 every year” and that

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“there are still certificates being posted to us and there is a time lag” [Day 10/34/17 - 36/20].

1. A further consequence of the FS251 processing lag was that the FSD could not

determine whether a “major defect” requiring enhanced enforcement action was involved. China Status did not submit its FS251 until October 2025, approximately six months after the SDN was filed in April 2025. AD Keung accepted: “in the six months nobody checked the certificate to see if a major defect [was involved]” — “Correct” [Day 10/138/16-18]. In the absence of timely FS251, the attending officer had to resort to calling China Status to ascertain the reason for the shutdown which resulted in the classification of the defect on the information provided by China Status in the telephone conversation [Day 10/136/13-15]. Putting aside the issue of an attending officer misclassifying water leakage as a “major defect” [Day 10/136/9-13], the result was that the FSD was put under the false impression that (1) the shutdown was necessitated by maintenance of the FS water tank (when this had not been assessed by China Status), and (2) that the shutdown and the relevant repair works were being carried out by an RFSIC (when China Status had no involvement), a misconception that influenced the level of enforcement follow-up that was otherwise required of the FSD. N4. Systemic and/or operational weaknesses on the regulatory level

1. The evidence identifies the following systemic and operational areas requiring

improvement in the FSD’s supervisory role.

1. First, the SDN mechanism was a notification, not approval, mechanism, and relies

on RFSIC integrity and their timely and accurate / truthful reporting. The regime enforced at the time did not require the FSD to carry out physical inspections of all FSI systems at a premises to detect an inaccurate / false SDN: the on-site risk

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assessment conducted upon receipt of an SDN was directed at formulating an appropriate contingency plan and assessing standby measures, rather than independently verifying the accuracy / truthfulness of the SDN or checking the condition of FSI systems beyond those identified in the notification.

1. Second, the manual, paper-based FS251 processing system create substantial time

lags that render the document-checking function of limited effectiveness in real time. The 8-to-11-month lag between signing, faxing and inputting of FS251s identified in the evidence demonstrates that the existing system was unable to detect contemporaneous problems.

1. Third, there was no arrangement for enhanced FSI inspection or surprise checks

specifically triggered by major renovation works [Day 10/72/22 – 73/2], despite the acknowledged reality that buildings under major renovation carry elevated fire risk by reason of the combination of combustible construction materials, partial FSI shutdowns, and continued residential occupation.

1. Fourth, the standby measures specified in the applicable procedures (fire

extinguishers at alternate floors) are not fully adequate when both the FH/HR System and FAS are simultaneously inoperative. There is currently no equivalent backup measure for FAS failure. AD Keung accepted: “we need to implement other fire safety measures, but you’re right, we cannot really achieve the same effect” [Day 10/93/22 – 94/4].

1. Fifth, the Code of Practice applicable to WFC’s FAS is the 1979/1982 version.

The 2022 version’s requirement for warning labels on the main power switch (stating “THIS SWITCH ALSO CONTROLS THE SUPPLY TO THE FIRE ALARM SYSTEM”) [B2/919] did not apply to WFC, and no equivalent labelling obligation was imposed under the earlier code. AD Keung accepted that such a

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warning label would “reduce the chance of unqualified personnel turning off the switch” [Day 10/154/10-17].

1. Following the WFC fire, the FSD has implemented a comprehensive programme

of immediate and medium-to-long-term reforms to enhance the current regulatory arrangements and enforcement.

1. In terms of immediate measures already implemented: the FSD engaged property

management stakeholders to elevate fire safety awareness; established that FSI should be inspected and repaired before major renovations commence; completed functional tests on FSIs in 461 buildings undergoing major renovation by January 2026 (in coordination with the ICU and BD); established a Quick Response Team to assess FSI operation during fires and test FSI post-operation; and issued FSD Circulars Nos. 1 and 2/2026 mandating prominent notices of FSI shutdowns (A3 size, laminated, at each lift lobby floor), mailbox notifications to residents, clear marking of non-operational installations, and sealing of FSI power switches by RFSICs with green (operational) or red (under repair) tamper-evident seals391 [WS8/1918-1919]. As of 27 May 2026, the Quick Response Team has been deployed 647 times (Table of Improvement Measures, Item A4).

1. The FSD is also actively promoting the Fire Services Department Building

Emergency Responder training scheme, aiming to train 45,000 property management personnel, OC representatives, and residents within 2026 to help them identify and proactively report FSI abnormalities. As of 27 May 2026, approximately 10,000 property management personnel have been qualified under this scheme (Table of Improvement Measures, Item A7).

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• The DFS confirmed that the inspection programme has expanded significantly.

Phase 1 (Operation Outpost), commencing on 19 January 2026, covered 1,500 higher-risk target buildings, with irregularities identified in 267 buildings resulting in 69 prosecutions and FHANs issued against 395 FSIs. Phase 2 commenced in April 2026 with a target to inspect 5,000 buildings within two years. As of 27 May 2026, 272 target buildings have been inspected under Phase 2 (Table of Improvement Measures, Item A6).

• The FSD has also established a two-way communication channel with the BD,

Architectural Services Department (“ArchSD”), Housing Department and ICU for large-scale renovation projects: when works commence, the ICU provides a list to the FSD, and the FSD conducts more frequent inspections accordingly. The DFS confirmed: “For the buildings with scaffolding nets, whenever there is any shutdown, we inform the BD or the Housing Department at once. We will not allow any works to continue because of the shutdown of the fire service system. There were five buildings having this situation and we already ordered works to be stopped” [Day 19/70/4 - 71/5].

• The operational teams now formulate contingency plans with new elements

specifically addressing the WFC scenario. The DFS confirmed: “A contingency plan is also formulated by the operational team. New elements are included, including the configuration and the operation of the fire systems. Having drawn reference from the Wang Fuk Court fire, if buildings nearby have scaffolding nets, in the contingency plan they need to detail how the fire will be handled in the case of any spread” [Day 19/70/23 - 71/5].

• In terms of medium-to-long-term legislative amendments under consideration:

the FSD proposes requiring FSD approval for major FSI shutdowns prior to commencement (converting the notification mechanism to an approval-based 286

mechanism), with a 60-day cap and Fire Hazard Abatement Notices for non- compliance. The DFS confirmed: “We want to introduce provisions to mandate approval instead of just notification in relation to any shutdown of the fire service system” [Day 19/72/1-14].

1. The DFS confirmed in oral evidence the scope and timetable of the proposed

legislative reform. 772.1. On the conversion from notification to approval: “We want to introduce provisions to mandate approval instead of just notification in relation to any shutdown of the fire service system. We will check whether there is any need to shut down the fire service system concerned and we will also see whether any facilities or equipment has been put in place in the interim, that is, replacement measures” [Day 19/72/1-11]. The Government has since proposed legislative amendments to upgrade the regulatory regime of major FSI shutdowns, bringing it up from administrative “post-event notification” to statutory “pre-approval” checks. The Government published a public consultation on the proposed amendments on 26 May 2026 (Table of Improvement Measures, Item A8) [B14/6272]. 772.2. On the 60-day cap: “We want to close the loopholes. If need be, the shutdown notices... the works need to be completed within 60 days. Otherwise, we will issue FHAN” [Day 19/72/12-14]. On the timetable: “In early May, we’re going to conduct consultation at the Legislative Council” [Day 19/72/3-4]. The relevant measures have been introduced in April 2026 (Table of Improvement Measures, Item A8). For shutdowns of major FSIs exceeding 60 days, the FSD will issue FHANs to the owners, requiring completion of repairs by a specified deadline; failure to comply will result in further enforcement action.

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• The Government submits that this represents a fundamental transformation of the

SDN regime from a passive notification system to an active approval and monitoring mechanism.

• The DFS provided further details on enhanced enforcement.

1. 1. On electronic FS251 submission: “In the coming two months, we are going

to issue a circular; we are going to ask all fire service contractors to submit the electronic version of FS251. Otherwise, we are going to invoke the existing legislation to handle the case by disciplinary hearing. We want to handle the situation where the submission is late” [Day 19/67/6-16]. That measure has since been implemented. The FSD issued a circular letter on 15 May 2026 notifying contractors of the mandatory submission of FS251 certificates via a designated electronic platform with effect from 1 July 2026 [B14/6257]. The upgraded online submission system was officially launched on 18 May 2026, with mandatory electronic submission commencing on 1 July 2026 (Table of Improvement Measures, Item A9). 774.2. On the penalty regime: “for contractors not submitting certificates or not conducting annual inspections or failure to report any defects, we’re going to increase the level of penalty by five times or even 10 times or even jail” [Day 19/69/1-5]. The proposed enhancement of penalties and criminal accountability for various offences has been included in the legislative amendments proposed by the Government in May 2026 (Table of Improvement Measures, Item A10(iv)) [B14/6285-6287]. 774.3. On RFSIC registration reform: “within three to five years, they have to apply for renewal once. The criteria include whether they have been prosecuted by the FSD or whether they score very high scores, and we consider this basket of factors. So we will not allow underperforming 288

contractors to apply for renewal” [Day 19/69/8-15]. The abovesaid legislative proposals in May 2026 include replacing the permanent registration of RFSICs into a renewal system, made subject to “fit and proper” assessments (Table of Improvement Measures, Item A10(iii)) [B14/6278]. 774.4. On the responsible person system: “the property management companies will be made the party responsible” [Day 19/69/7]. The abovesaid legislative proposals in May 2026 also propose to introduce the FSI “Responsible Persons” regime and to incorporate PMCs into the statutory responsibility chain alongside owners or occupiers (Table of Improvement Measures, Item A10(ii)) [B14/6275].

1. These proposals, taken together with the fixed penalty regime for identifiable fire-

related offences and broader FSD investigation and enforcement powers, constitute a comprehensive statutory overhaul of the FSI regulatory framework.

1. The DFS also confirmed that upon receipt of SDNs, the FSD now conducts

proactive checks beyond the system reported as shut down: “Regarding the new practice of SDNs, colleagues need to conduct inspections to check for alternate measures. At the same time, colleagues will also need to check two systems. One, the fire hydrant/hose reel system; and, two, the break-glass unit. That is the power of the BGU as well as the situation of the fire service tank. This practice has already started” [Day 19/73/7-13]. The relevant measures were introduced in April 2026 (Table of Improvement Measures, Item A8). This directly addresses the vulnerability that China Status’s SDNs - which identified only the FH/HR System as being shut down while omitting the FAS - exploited: under the new practice, the FSD independently verifies the condition of FSI systems beyond those reported as defective, eliminating the assumption that FSI systems not

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identified in the SDN remain in working order. RFSICs are also reminded of their responsibility to identify, assess, and report any chain effects that the shutdown of one FSI would have on other FSIs, e.g. if the shutdown of the FH/HR System would lead to the failure of the FAS: the FSD Circular Letter No. 2/2026 dated 8 January 2026 [B14/6249].

1. A pilot programme testing fire alarms in 1,500 older residential buildings (pre-

1987) has been initiated and extended to 5,000 buildings, with a view to extending to 32,000 buildings territory-wide [Day 19/104/10-12]. As of 27 May 2026, 272 target buildings have been inspected (Table of Improvement Measures, Item A6). Research is also ongoing into temporary fire alarm systems for renovation sites, and the FSD is exploring FSI that can be installed on scaffolding to suppress or extinguish fire [Day 17/47/10-20]. In parallel, the FSD has promoted a voluntary fire alarm testing programme with stakeholders including the PMSA, Hong Kong Association of Property Management Companies Limited (“HKAPMC”), HA, Hong Kong Housing Society (“HS”), Real Estate Developers Association of Hong Kong (“REDA”), and the Association of Registered Fire Service Installation Contractors. Over 100 members of the HKAPMC have expressed support and will actively promote voluntary fire alarm testing in buildings under their management, covering more than 6,000 property projects. The HA has completed voluntary fire alarm testing or regular inspections of FSIs for about 1,300 public rental housing blocks (Table of Improvement Measures, Item A2).

1. The Government submits that this reform programme directly addresses the

operational weaknesses and areas for improvements identified above. The conversion from notification to approval, electronic submission mandate, PMC Responsible Person System, enhanced penalty regime, and proactive inter- departmental communication channel collectively constitute a fundamental

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improvement of the FSI regulatory framework for buildings undergoing major renovation.

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PART III(E): CONCERNS ON THE FIREFIGHTING AND RESCUE OPERATIONS O. THE GOVERNMENT’S REVIEW OF THE FIREFIGHTING AND RESCUE OPERATIONS

1. Section H above presents the chronological narrative of the firefighting and

rescue operations as they unfolded from 26 to 28 November 2025. This section constitutes the Government’s review of those operations: an assessment, informed by the evidence before the Committee, of specific aspects of the FSD’s operational response that have been the subject of questioning, criticism or concern during the evidential hearings.

1. The Government’s primary position is that the firefighting and rescue operations

were conducted professionally, at unprecedented scale, under extraordinary conditions not previously encountered in Hong Kong or, in terms of simultaneous multi-block residential façade fire, anywhere in the comparable developed world. Over 100 persons were rescued; all 347 reported assistance locations and all remaining units were attended; and the operation was sustained over 43 hours with continuous command at the highest level.

1. The Government also acknowledges candidly that the evidence discloses areas

where operational decisions and systemic arrangements could, with the benefit of hindsight and in light of the unprecedented circumstances that materialised, have been improved. These acknowledged areas for improvements are, in the Government’s submission, by no means individual failures by frontline officers operating under extreme pressure.

1. Throughout this review, the overarching factual context must be borne in mind:

the firefighters could not prevent the rapid spread of fire and heavy casualties because of the presence of the five key contributing factors addressed above.

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Those factors, for which primary responsibility lies overwhelmingly with private actors, created conditions that no fire service could have fully overcome regardless of the operational decisions taken.

1. This assessment is borne out by the evidence of the DFS. He stated that it was

“important to recognise the truly unprecedented nature of the Wang Fuk Court fire,” observing that it “involved the full-scale involvement of seven high-rise residential blocks in close succession” in which the buildings’ compartmentation, fire-resisting construction requirements and FSIs were “completely compromis[ed], such that once the fire reached a certain magnitude, it became self-sustaining”392 [WS2/1028]. His assessment was that “there is, at present, no obviously superior or fundamentally different operational approach that fire brigades elsewhere could realistically have adopted to contain such a conflagration effectively under the circumstances” 393 [WS2/1028].

1. The DFS further observed that “for a fire of this scale and configuration, the

strategic focus should shift from how to extinguish the fully developed blaze to how to prevent its occurrence or limit its development at the very initial stage,” and emphasised that “the underlying causes and contributing factors of the Wang Fuk Court fire span across multiple domains beyond frontline firefighting operations” 394 [WS2/1028-1029]. This assessment is independently corroborated by the Committee’s experts, who concluded that “in practical terms very limited additional action that the FSD could have taken on site to materially alter the outcome” (IC Expert Report §8.1.5 [ER3/2257]). The Government adopts this analysis as the starting point of its submission in this section: the

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firefighting operation was conducted to the best of the FSD’s ability and resources. O1. The tactical consideration to control the fire at each affected building according to the circumstances at the early stage of the fire instead of deploying manpower to carry out evacuation (i) The FSD’s understanding with the Police

1. The FSD and Police operate under an established understanding for fire incidents:

upon the arrival of police at a fire scene, they assist in evacuating and directing residents to places of safety, while the FSD concentrates on firefighting and rescue. This arrangement was activated from the earliest stage of the WFC fire.

1. DD Chan confirmed in oral evidence: “according to our usual practice of

collaboration, the police would also help us to evacuate the residents in the neighbourhood and then we would try to fight the fire so that residents would be able to get the time to run out” [Day 18/33/20-24].

1. This arrangement was put into practical effect. As set out in Section H above,

officers of PTU X4 entered Wang Chi House and Wang Yan House between approximately 16:13 and 16:40 hours on 26 November 2025 to assist in the evacuation of residents from upper floors. Nine residents were successfully evacuated, and the FSD was informed of the evacuation initiatives 395 [WS17/2204-2206].

1. AD Tang confirmed in the context of the WFC fire: “As the FSD first attending

crews were largely engaged in the firefighting operations and clearance of obstructions at the entrances and exits of various buildings, particularly at Wang Cheong House and Wang Tai House during the initial stage, assistance was

395 CHEUNG Lui 1st WS §§4-7. See also footnote 185 above.

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sought from the Hong Kong Police Force (“HKPF”) personnel to assist in evacuation. To my knowledge, the HKPF personnel had used the Public Address system in police vehicle(s) to urge the evacuation of residents. Evacuees were guided to places of safety on the ground level by the combined efforts of both the FSD and HKPF personnel”396 [WS6/1861].

1. The IFITF also noted that:
2. 1. After the fire was raised to No.3 Alarm at 1502 hours, “Concurrently, the

residents from the unaffected blocks were evacuating to the ground level on their own. At 1515 hours, Police set up FCP at scene. In line with usual collaboration, the police took initiative in evacuating residents in the surrounding using vehicle’s public announcement system and loudhailers. Besides, Police Tactical Unit (PTU) entered Wang Chi House and Wang Yan House and successfully evacuated a total of 9 residents.53 FS crews were tasked to activate fire alarms in the three unaffected blocks (i.e. Wang Tao, Wang Sun and Wang Kin House). They discovered that the FAS of the three blocks were inoperative. To buy critical time for residents to evacuate, FSD concentrated most available manpower on fire suppression at Wang Cheong and Wang Tai Houses to slow its progression towards the remaining not yet affected blocks” (IFITF Report, §5.4.3.2 [ER1/65]); 789.2. “By prioritizing immediate fire suppression over other tasks, firefighters bought critical time for residents and maintained viable escape conditions that would have otherwise been compromised by flames spreading from the external scaffolding into the building interiors. This tactical prioritization

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likely delayed the fire spread, providing residents at Wang Sun House more time to evacuate” (IFITF Report, §9.3.2.8 [ER1/198]).

1. For completeness, the Government notes that the FSD-Police arrangement is

described in the evidence as an established usual practice of collaboration [Day 18/33/13-24; 52/18-25]. (ii) The FSD’s tactical consideration and difficulties in carrying out evacuation

1. The FSD’s tactical decision at the early stage was to concentrate available

resources on suppressing the fire at Wang Cheong House and Wang Tai House in order to prevent further spread, while relying on the Police to assist with evacuation of residents in less-affected areas. DD Chan explained the two options available to him in oral evidence [Day 18/51/25 - 53/13]: “In fact, at the time there were two options available to us. Given the manpower at the scene and also the scale of the fire, there were two options available to us. One, concentrating the resources to suppress the fire; at Wang Cheong, Wang Tai House, we can spray water at these two blocks. As I said, police already arrived at the scene at 3.30. And then, according to our tacit arrangement, they would try to help the residents to evacuate. That’s the first option. The second option would be to deploy some manpower to Wang Kin, Wang Sun, Wang Tao, Wang Yan or even Wang Shing Houses, to evacuate the residents there. But then, in doing so, the fire might have spread more rapidly and the blaze could become more serious and it could also affect the other blocks more quickly.”

1. DD Chan acknowledged that with the benefit of hindsight, deploying manpower

to evacuate other blocks earlier was an option he could have taken: “If you look at what you just said, if you look at the number of casualties, my review afterwards was that that’s also an option that I could have taken” [Day 18/53/11-

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13]. The Government presents this candidly as the judgement of a senior commander facing unprecedented conditions. The question of which option would have produced the better outcome is one that even hindsight may not be able to provide a complete answer. The available evidence does not establish that earlier deployment of manpower to evacuation (at the cost of reduced fire suppression at Wang Cheong and Wang Tai Houses) would on balance have reduced overall casualties; the cause of those casualties was the combination of contributing factors that created conditions beyond what any resource allocation could have fully overcome.

1. Indeed, a difficulty in executing evacuation was the complete failure of the FAS

across seven of eight blocks. DD Chan confirmed: “Given the resources available at the time, apparently there was no other device that would have worked like a fire alarm to effectively alert the residents in the units that there is a fire and you need to escape as soon as possible” [Day 18/49/13 – 50/1]. Without a functioning FAS there was no automated means of alerting residents estate-wide, and no substitute system available that could replicate the FAS’s coverage.

1. Another difficulty was the blockage of entrances and exits to Wang Cheong

House and Wang Tai House by burning debris, which made forced evacuation of those blocks physically impossible at the initial stage and required firefighters to clear passages before any internal rescue could proceed. Shortly after FS arrival at 1456 hours (IFITF Report §5.2.2.1 [ER1/44]), blockage of entrances and exits to Wang Cheong House was observed by SStnO Hui at 1457 hours (rear exit) and 1505 hours (front entrance) (IFITF Report §10.3.3 [ER1/208]); after the fire was observed to have spread to Wang Tai House at around 1500 hours (IFITF Report §5.2.3.1 [ER1/53]), blockage of entrances and exits to Wang Tai House was observed by SStnO Hui at 1520 hours (front entrance) and 1530 hours (rear exit) (IFITF Report §10.3.3 [ER1/208]). AD Tang confirmed that “most of the

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casualties/deceased were located in Wang Cheong House and Wang Tai House” and that “evacuation was made difficult there because the entrances/exits to those buildings were engulfed in flames and blocked by fallen bamboo sticks and debris at the initial stage”397 [WS1/55-57].

1. DCFO(NTN) Wong confirmed that the standard SAR protocol (sending one team

to the rooftop and one to the target flat) was not applicable to fully engulfed blocks such as Wang Cheong and Wang Tai Houses. He stated: “The guidelines that I just mentioned was for general fire. But for Wang Cheong/Wang Tai House, the fire engulfed the entire two blocks so we could not invoke the guidelines that I mentioned just now. All we could do was to come up with a plan with the firefighting officers. Because we could not put out the fire, we could not send firefighters there” [Day 11/117/1-22].

1. There was no established written guideline for the FSD dealing with total FAS

failure across a multi-block estate. SStnO Hui confirmed that there was nothing “clearly written down” directing officers what to do to direct residents to leave in such circumstances [Day 11/23/19-23]. DO Lam similarly confirmed: “No, no such guidelines... if you’re talking about a general order, we don’t have that to teach us step by step what to do when that happens” [Day 11/94/19-24].

1. Indeed, commenting on the evacuation efforts as a whole, the IFITF also noted

that “While the evacuation process was complex and challenging, it in fact reflected the necessity of adopting an ongoing dynamic assessment when evacuating during a fire due to the rapidly changing circumstances” (IFITF Report, §9.4.3.6 [ER1/202]).

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(iii) Whether sufficient weight had been given to the failure of the fire alarms in deciding not to deploy manpower on evacuation

1. At the early stage of the fire, crew members were sent to three blocks (Wang Kin

House, Wang Sun House, Wang Tao House) to attempt break-glass activation at approximately 1530; by approximately 1535 to 1540, the estate-wide FAS failure was confirmed, as described in Section H above.

1. DD Chan confirmed he was aware of the FAS failure before his arrival at 1610.

His evidence was that he considered the EAS unsuitable for this incident because the situation required localised, one-on-one communication with specific residents in the affected buildings, a need that was met by the call-back mechanism (approximately 1,500 phone calls to trapped residents made by the Support Centre) 398 [WS8/1933]. This mechanism made approximately 1,500 call-back calls during the operation, providing ongoing safety advice and updating frontline personnel on the conditions and locations of trapped residents [B13/5720] [B15/6329-6360].

1. The Government acknowledges that the call-back mechanism necessarily

operated reactively (after residents called the FSD), not proactively (alerting residents who had not yet called). Residents who did not call 999 were not reached by call-backs. This constraint was inherent in the system which was predicated on 999 calls having been made to the FSD first. The reforms to address this inadequacy, including the potential reconfiguration of the EAS for localised use and public education on response, are addressed below (Table of Improvement Measures, Item A12(iv)).

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(iv) Whether there was sufficient attention paid on the horizontal spread of fire from Wang Tai House to other blocks and inward spread of fire from the façade into the building

1. The fire spread horizontally from Wang Cheong House to Wang Tai House

within approximately 10 minutes, and then to five further blocks within approximately 45 minutes. DD Chan confirmed that this building-to-building spread was “unprecedented” and that he had “never” encountered a comparable situation [Day 18/30/7-22; Day 18/36/14-19]. He further confirmed: “We only knew that it was spreading unusually fast” [Day 18/80/3-4]. The mechanism of spread (flying embers carried by east-to-southeast wind) was not predictable from the initial stage.

1. ADO Cheung Lok-hang confirmed that the fire’s external origin bypassed the

building’s passive fire safety provisions entirely: “In terms of design, in terms of the fire-resistant compartments, there should have been smoke-free staircase so that the fire would not escalate to such a scale. But for this case, the fire- resistance capabilities of the building was not up to par. Perhaps there were other reasons for why the fire spread so quickly” [Day 11/76/9-15].

1. The inward spread, being fire penetrating from the external façade into residential

units, was the defining characteristic of this fire and fundamentally different from a standard internal building fire. The IFITF’s findings on this mechanism warrant emphasis. The IFITF observed that: “Our hypothesis posits that the fire predominantly spread into units through openings, such as broken or open windows. However, the test results from Sichuan revealed additional factors contributing to this fire spread. Apart from convective fire spread via broken windows, the radiant heat flux was sufficient to ignite combustibles inside the units. Notably, the time taken for the windows of the re-entrant to be broken by fire coincided with that for the combustibles inside units to be ignited by radiant heat. Even when windows were covered with polystyrene panels, these covers

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could potentially detach under intense heat, allowing radiation to penetrate and ignite materials within. Additionally, the investigation revealed that heat and smoke could also spread through other openings in kitchens and toilets, such as exhaust fans. These findings do not contradict our hypothesis but rather supplement it, revealing additional mechanisms of fire spread that need to be considered” (IFITF Report §8.3.2.1 [ER1/136]).

1. The Government acknowledges that the unprecedented nature of the horizontal

and inward spread created a tactical challenge for which no established protocol existed. The FSD’s operational review, addressed below, is examining whether the contingency plan framework for renovation site fires should specifically address horizontal spread scenarios and what pre-positioned resources should be available for buildings undergoing large-scale renovation (Table of Improvement Measures, Item A12(iii)). O2. The escalation of fire alarm levels (i) Whether the fire could be escalated to higher fire alarm levels earlier for deployment of further resources to the fire scene

1. The applicable FSD guideline provides that if the Incident Commander is not

confident the fire can be contained within a short period, the fire “should be upgraded immediately.” The governing principle is essentially: If in doubt, upgrade [B9/4858; Day 11/28/12-22; Day 11/42/9-13]. SStnO Hui confirmed his agreement with this principle.

1. The critical context should be stated at the outset: the formal alarm level was not

the binding constraint on resource deployment at any stage of the WFC fire. At every stage, actual deployment significantly exceeded the formal alarm level. Officers at their posts could and did request additional resources directly through the FSCC, without in any way being constrained or hampered by the actual alarm

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level. AD Tang confirmed: “each officer at their respective post will know what resources they need and they can make the request directly... Colleagues at their respective posts will do their best instead of being classified in their approach” [Day 19/32/15 - 33/21].

1. Further, the IFITF also noted that “Given the complexity and challenges of the

fire, the FSD recognized that the strategy could not rely solely on established action plans to address the situation. Instead, the strategy needed to adapt and respond dynamically as the incident evolved”, with “special arrangements…not covered under existing procedures and guidelines” which “helped operational efficiency of frontline Officers” (IFITF Report, §5.4.6.1 [ER1/69] with the relevant special arrangements and their details tabulated thereunder).

1. As to the No. 1 to No. 3 upgrade: SStnO Hui upgraded the fire six minutes after

his arrival (at 1502 hours). His witness statement confirms the criterion was met at the time: “there was a rapid spread of fire among different façades of Wang Cheong House, and the mid-lower level of east façade of Wang Tai House was well alight. At the time of my arrival, I observed that there were no evacuees from the front entrance of Wang Cheong House. In view of the fire development and potential large number of residents trapped therein, I upgraded the fire to No. 3 Alarm”399 [WS2/990].

1. SStnO Hui acknowledged in oral evidence that with the benefit of hindsight, he

may have upgraded immediately upon arriving: “If I had known of the consequences, then upon alighting the vehicle, I would have upgraded the fire immediately. The sooner the better” [Day 11/40/21 - 41/2]. The Chairman acknowledged the practical reality of the frontline officer’s position: “You need time to observe the environment before making the decision. You cannot upgrade

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the fire immediately upon alighting the vehicle; right?” to which SStnO Hui agreed [Day 11/42/4-8]. That said, the practical effect of such immediate upgrade may have been modest given that 12 appliances with 61 FS members were already dispatched and additional resources were already automatically triggered by the contingency plan.

1. By the time of the No. 3 Alarm at 1502 hours, the initial deployment had already

reached approximately 80% of the PDA for a No. 3 Alarm Fire400 [WS1/41].

1. As to the No. 3 to No. 4 upgrade: DD Chan acknowledged in oral evidence, with

hindsight, that upgrading to No. 4 Alarm earlier would have helped: “But it was quite some time afterwards when it was upgraded to No. 4 alarm. Of course with hindsight we might have asked a bit too much, but now, do you think that it would be a better time to escalate it to a No. 4 alarm earlier?” to which he answered “Yes, looking with hindsight, it would help if it had been upgraded to No. 4 alarm earlier.” When asked whether he would take that into consideration in a future review of guidelines, he confirmed “Yes” [Day 18/59/25 - 60/10].

1. The Government further invites the Committee to take heed of two

contextualising matters. 812.1. First, by 1534 hours when the No. 4 upgrade occurred, 269 FS members had already been dispatched, approximately twice the PDA for a No. 5 Alarm 401 [WS1/45]. The practical resource gap that an earlier No. 4 upgrade might have addressed was already being filled by other means, including the DCP’s independent deployment of 10 additional SAR teams between 1520 and 1548 hours.

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1. 2. Second, the above acknowledgements are made with the benefit of

hindsight and in the knowledge of a fire of unprecedented scale; the real- time decision is invariably made in less than ideal circumstances, and particularly so in the present conditions that no officer had previously encountered given the unprecedented nature and extent of the Tai Po fire.

1. As to the No. 4 to No. 5 upgrade: DD Chan upgraded at 1822 hours. By that time,

cumulative deployment was 6.5 times the No. 5 Alarm PDA (718 FS members deployed against a PDA of 110). DD Chan’s evidence explains that the upgrade was for command-structure purposes rather than resource mobilisation: it was to “provide a clearly defined strategic command for the whole scene and to ensure that firefighting and SAR operations across all sectors were coordinated under a single incident-wide framework”402 [WS8/1930-1931].

1. Critically, DD Chan had already arrived at the scene at 1610 hours (well before

the No. 5 upgrade) and had immediately begun providing on-site strategic advice, instructions and support to the Incident Commander. By 1635 hours, DD Chan had instructed the implementation of the building-by-building command strategy with eight operation sectors, each under a designated Senior Officer for firefighting and a separate Senior Officer as SAR leader403 [WS8/1923-1925]. The formal No. 5 upgrade at 1822 hours therefore formalised a command structure that was already substantively in place and operational, rather than representing the first point at which strategic-level direction was being exercised.

1. Overall, the Government submits that the pattern across all three upgrade

decisions is consistent: actual deployment ran well ahead of the formal alarm level at every stage. The alarm level determined the automatic PDA deployment; it did not cap what could be requested on top of that. The Government commits

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to reviewing the alarm escalation guidelines to ensure that they accommodate and duly respond to the particular characteristics of large-scale renovation site fires. (ii) Whether the current fire alarm levels are capable of covering varying features at different fire scenes, e.g. the fire risks arising from large-scale renovation projects

1. DD Chan confirmed that the contingency plan for WFC already provided

additional resources over the standard PDA at the No. 1 Alarm stage, and that he considered this to be more flexible than a fixed and automatic No. 2 Alarm classification for renovation sites: “Major renovation is temporary, not permanent. In relation to buildings undergoing major renovation, we will not treat it as a No. 2 fire alarm mobilisation at the start. However, we have put in place a contingency plan to add more appliances. This serves the same purpose but it is a temporary arrangement, not a permanent one, that is in the form of a contingency plan. Contingency plan gives us more flexibility because the local fire station can make assessments as to how many appliances should be added when they consider the sites under major renovation. There is more flexibility and it’s more suitable than rigidly setting it as a No. 2 fire to start” [Day 18/61/1- 20].

1. AD Tang confirmed that the FSD’s post-fire operational review would examine

this question directly: “Every time after there’s a fire we would conduct an operational review and the Wang Fuk Court fire would be no exception. We also had relevant committees to review different aspects of the issue in order to draw experience or draw lessons from the incident so that in terms of our tactics, our strategies, in terms of the coverage and the depth or even the details that we could undertake in putting out the fire would also be studied” [Day 19/30/13-21]. While AD Tang opined that “internal firefighting remains the primary fire suppression

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strategy for building fires”404 [WS6/1873] and confirmed that in the case of Wang Fuk Court, turntable ladders had already been deployed at available strategic positions for external firefighting such that “further reinforcement of turntable ladders, regardless of their operational height, would not have effectively met the operational objectives” 405 [WS6/1873], when asked specifically whether the review would address whether more turntable ladders should arrive earlier for façade fires, AD Tang confirmed this “would be subject to the review” [Day 19/30/10-12].

1. The Government acknowledges that the contingency plan approach, while more

flexible than a fixed alarm classification, in hindsight requires review given the scale and nature of what materialised at WFC. The FSD is thus conducting an operational review of all aspects of the firefighting response, including whether the contingency plan framework is adequate for façade fires at renovation sites (Table of Improvement Measures, Items A12(i) and (iii)). The Government supports a specific review of whether the current alarm level system should be amended to reflect the particular risks of buildings undergoing large-scale renovation works. O3. The joint-handling of 999 calls by the Police and FSD in the case of fire (i) The discretion on the Police’s side to decide whether to refer a call to the FSD’s side

1. The 999 hotline is managed by the PCCC. Upon confirmation that a call relates

to fire or rescue, it is immediately transferred to the FSCC. The PCCC establishes a three-way phone conference connecting the caller, FSCC, and PCCC

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simultaneously, allowing the PCCC to continue providing support during the initial stages of the handover406 [WS1/161].

1. The applicable Police guideline provides that where a caller “states an accident

involving injury has occurred or reports a fire, or requests provision of either an ambulance or fire appliance the caller will be immediately informed that the call will be connected to Ambulance/Fire Control” 407 [WS2/1144-1145]. While waiting for the call to be picked up by the FSD, the Police console operator may ask for further details. DCFO(OP) Wong confirmed this was helpful: “[t]he police has helped us tremendously in a three-party call, the police would not hang up immediately, they would wait and see if our dispatchers have obtained all the information successfully” [Day 12/121/13 - 122/10].

1. DCFO(OP) Wong acknowledged, however, that in some cases on 26 November

2025, police operators collected information and asked questions before transferring calls to the FSD, which was a deviation from the intended design: “the police has already confirmed the caller’s details before forwarding the call to you and that’s not according the mechanism; is that right?” to which Wong answered “Correct” [Day 12/10/13 - 13/7].

1. As the Committee may recall, in one documented case (Wang Cheong House,

17/F at 15:06 hours), a caller who stated she was in a fire, on the 17th floor with smoke entering the flat, was not transferred to the FSD. The police operator ended the call after asking if she needed FS assistance and accepting her decision to close windows and stay. DCFO(OP) Wong considered this was not handled correctly: “From my experience, we have never heard of these cases. But in

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relation to this case, I do think that it should not have been handled in this way” [Day 12/47/16 – 48/5].

1. The Government acknowledges that the deviation between the intended design

(immediate transfer upon confirmation of a fire) and practice on 26 November 2025 (information collected first in some cases, and case(s) of non-transfer) is a joint FSD-Police issue to be addressed. A joint review of 999 call-handling procedures is being conducted. Having said the above, it bears reiteration that isolated deviation(s) from established procedures is not necessarily indicative of any systemic deficiency or failing in those procedures. (ii) The waiting time for some calls to be referred to the FSD

1. On average, the FSCC answered transferred calls within approximately one

minute (58 seconds) for the rest of the day following the establishment of the Support Centre at 1520 hours. The FSD considers this an adequate response given the circumstances408 [WS1/164]. This figure measures the time from the moment the call was transferred by the Police to the moment it was picked up by the FSD; it does not include any waiting time before transfer. The total elapsed time for a caller from dialling 999 to speaking with the FSD was therefore longer than one minute in some cases.

1. In one documented instance (Wang Shing House 2802), a longer gap existed

between the 999 call (2122 hours) and the FSD’s first record of the assistance request (2211 hours). DCFO(OP) Wong acknowledged that information transfer relied in part on fax or email: “… the police would still have a mechanism to refer the information to us... They would fax to us in paper copies” [Day 12/30/12-24]. He accepted that “[i]t’s better to have this system simply transfer the data to us.

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But when we developed the system, then there was no such technology” [Day 12/31/11-13].

1. The Government acknowledges that the information transfer by fax was not

adequate for a large-scale incident involving hundreds of simultaneous calls. FSD will actively work with the Police to refine information exchange mechanisms, enhancing the efficiency of both departments in handling emergency calls (Table of Improvement Measures, Item A12(ii)). (iii) The repetition of requests for information and questions on the FSD’s side

1. The FSD’s standing practice was to independently verify key information

(address, caller details) received from the Police, because the FSD has in the past made incorrect deployments by relying on unverified information from third parties. DCFO(OP) Wong explained: “This practice is longstanding. It is the result of many years of experience, which gives rise to this mechanism where both parties have to confirm the address of the call. All of the FSD dispatched has a bearing on life or death so we have to confirm the gender and age of the caller. But that’s not the most important thing. The most important things are the telephone number and the address” [Day 12/11/12-21].

1. The Government maintains the FSD’s rationale for independent verification as

grounded in operational experience and safety. As mentioned by the DFS, the FSD and the Police are co-operating and working on the improvement of existing administrative measures [Day 19/78/22 – 79/3] in the hope that information could be obtained and passed between departments in a more seamless manner (Table of Improvement Measures, Item A12(ii)).

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(iv) The advice given to callers, in particular whether callers should generally be advised to evacuate

1. The FSD’s safety advice to callers is given on a case-by-case basis. The guiding

principle is avoidance of smoke. Callers are advised to check the corridor before deciding whether to leave or stay. DCFO(OP) Wong explained: “As a matter of guiding principle, callers are advised to avoid smoke, as inhaling smoke can be fatal. In practice, this means the advice given depends on the conditions immediately outside the caller’s unit rather than their specific floor level. If there is heavy smoke outside the unit, the caller will be advised to remain calm inside and seal the door gaps. On the other hand, if the corridor is clear of smoke, the caller will be advised to leave quickly using the nearest smoke-free staircase”409 [WS1/162].

1. The overriding aim is to ensure safe egress from the fire scene. The FSD does not

specify particular evacuation routes or designate refuge locations within the building, as fire and smoke conditions can change rapidly and vary significantly throughout different sections of the building410 [WS2/1024].

1. DCFO(OP) Wong acknowledged in oral evidence that the call-back safety script

(Temporary Operational Guideline No. 05/2024, dated 29 November 2024) was intended for call-backs rather than initial calls. For initial calls, operators gave safety advice based on their training and judgment; there was no equivalent written script. Wong stated that safety advice “will not work if we put the requirements in black and white as a rigid rule” because operators must exercise judgement in the diverse circumstances of each caller [Day 12/84/21 - 85/14].

1. The Government maintains that rigid scripting is not universally appropriate

given the diverse circumstances of callers, and that the principle-based approach

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(avoid smoke; check corridor; leave if clear, stay if not) is sound. The new 4th Generation Mobilising System will again assist with real-time information sharing to support operators in providing more targeted advice. (v) The sharing of information within the FSD on requests for rescue, and the FSD’s recording of information

1. Information collected from callers requiring FS assistance was disseminated to

frontline personnel through three channels: radio (for immediate operational information); FSD Messenger (screenshot of the Computerised Mobilising System interface sent to commanders’ phones); and printed paper reports at the Mobile Command Unit411 [WS1/62-63; WS1/164-165].

1. DCFO(OP) Wong confirmed: “Information collected from the callers requiring

FS assistance was immediately disseminated by FSCC to the frontline personnel via chat group set up in the FSD Messenger. All 347 locations reportedly seeking FS assistance were all attended to by the frontline personnel through the combined efforts of all sectors”412 [WS1/164].

1. The Government acknowledges, however, that the FSD Messenger screenshot

mechanism involved significant manual work: frontline commanders received up to several hundred images in a single group chat, each of which had to be individually opened and read. DCFO(OP) Wong accepted that “the large volume of duplicated calls did cause difficulties to operations, underscoring the importance of effective filtering and streamlining processes in managing high- demand incidents”413 [WS1/165]. He further confirmed: “Currently, when FSCC operators forward assistance requests to frontline personnel, they use an official mobile phone to photograph the information displayed on the Computerized

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Mobilising System screen and then transmit it via the FSD Messenger. This process still involves a significant amount of manual work. The upgraded system, by contrast, will automate these procedures”414 [WS1/166].

1. The Government acknowledges this as a weakness in the information relay

mechanism and notes that the upgraded system, once commissioned, will automate the transmission of assistance request information to all parties simultaneously, with a view to eliminating the manual steps that characterised the operation on 26 November 2025. (vi) The call-back arrangement

1. The Support Centre, established at 1520 hours on the DFS’s instruction, made

approximately 1,500 call-back phone calls during the operation to update the conditions and locations of affected residents and to provide ongoing safety advice415 [WS1/51; WS2/1023] [B13/5720] [B15/6329-6360].

1. The Chairman specifically commended this mechanism at the hearing: “Callback

is quite useful, as proven by this experience. And we had individuals talking to firefighters, count them down. Of course there is room for improvement, but I think there is some good out of it” [Day 12/108/12-16].

1. The Government respectfully agrees with this assessment. The call-back

mechanism provided personalised, ongoing communication with trapped residents at a point where no estate-wide alerting system was available to provide safety advice. It was an initiative that proved its value under the most demanding circumstances.

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O4. The sufficiency of the FSD’s various communication systems at the fire scene and between the FSD call centre / Director’s Command Post and the fire scene

1. The FSD’s radio telephone system uses separate talk groups for different

functions; separate fire-ground channels were allocated to the affected buildings; vehicle and portable repeaters were available for long-distance communication; and the Communications Support Team maintained effective radio communication and battery checks throughout416 [WS2/975].

1. Communication challenges arose from the use of breathing apparatus with full-

face masks. AD Tang explained: “the VoiceCOM has its limitations, as it does not provide a direct link to our handheld radio. During the incident, we observed instances where VoiceCOM messages transmitted via handheld radio lacked clarity, particularly under noisy environment or while speaking amidst hurried breath, even though successful radio connections had been established. The communication can become more challenging when the receiver is also wearing BA with full-face mask, as the receiver’s ears are covered by a protective hood” 417 [WS2/975-976].

1. This issue has been resolved. The new Interspiro BA system, placed into service

on 19 January 2026, “features a Spirocom system mounted onto each full-face mask (with a microphone inserted into the speech cone and a flexible speaker arm set the desired speaker position against the ear). The Spirocom system is directly connected to the handheld radio of each firefighter to facilitate effective communication” 418 [WS2/976].

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• The DCP also provided round-the-clock backend support. Hourly situation

reports were compiled and disseminated to Directorate Officers and the Emergency Monitoring and Support Centre. Livestreaming of drone images to DCP was enabled from 1615 hours by the ICT Division. A Command Support System allowing remote data sharing between the on-site incident scene and DCP was also set up419 [WS2/1019].

• The FSD is exploring an upgrade to the computerised mobilising system with

features to filter duplicate calls. Once operators enter information into the system, it will be shared simultaneously with all parties involved in the operation, eliminating the need for the manual steps described above420 [WS1/165-166].

• In addition, the FSD plans to introduce SMS location sharing for callers and a

video evidence collection platform to allow the public to share footage of fire scenes with the FSD in real time [Day 12/61/20 - 62/25].

• The 4th Generation Mobilising System will increase the number of incoming lines

to 100 and mitigate the existing capacity constraint. 846.1. The DFS confirmed that the system is currently in testing and training, and acknowledged delays: “Coming back to the development of the 4th generation system, in between we encountered the pandemic and there were also the black riots and the contractors also delayed the delivery of some of the products and supplies and in fact there were some 24 subsystems. We are now in the stage of testing and training, and in between we have also spent a lot of time to urge the contractors to complete their 419 FOK Chun Ming 1st WS §13.4 420 WONG Sze Lut, Sunny 2nd WS §4,.7

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work. I fully agree that the earlier that the system can be commissioned, the better” [Day 19/78/4-13]. 846.2. In relation to the duplication of questions between the Police and FSD during call transfer, the DFS confirmed that “in terms of duplication of questions and also the cutting off of the lines and so on, some of these might have to do with communication problems and we will be working with the police in detail as to how we will be making sure that there would be no need to repeat the questions” [Day 19/78/22 - 79/3]. 846.3. In relation to the new system’s capability to relay information to frontline commanders, the DFS confirmed that “in the new system we have this thing called a portable device or the PD, and every commander will have access to that, so they would be holding this. It’s a handheld device and right away such messages can be transmitted to them” [Day 19/79/24 - 80/2]. 846.4. As to the filtering of duplicate calls by AI, the DFS struck a note of appropriate caution: “we’ve been looking into it. But then we would also have to be careful because for repeated calls, they might be repeating the address or there might be different people reporting the address, and if we haphazardly use AI to screen them out, then the consequence might be... you might have thought that it’s a repeated address or a repeated call, and if you screen that out, then some people who might be needing help might be screened out” [Day 19/80/13-23]. O5. The safety and tracking of firefighters entering the blaze (i) The sufficiency of breathing apparatus and other equipment generally used by firefighters at the fire scene

1. The MSA 8-litre BA cylinders in service at the time of the fire (in use since May

2014) provide a theoretical working duration of 33 minutes. In a fire of this scale,

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with firefighters carrying BA plus personal protective equipment (approximately 23 kg) plus compact portable pumps (approximately 80 kg) to upper floors, the 33-minute working duration imposed significant operational constraints 421 [WS15/2196-2197; WS2/974-975].

1. The FSD evaluated alternatives to the 8-litre cylinder and concluded that none

was suitable for high-rise firefighting operations at WFC. The Twin-Cylinder BA (56-minute duration) weighs 20.5 kg and its bulk “would have aggravated physical exertion during high-rise building firefighting operations and accelerated fatigue” 422 [WS15/2197-2198]. The Closed-Circuit BA (3-hour duration) “cannot be exposed to naked flames or high levels of radiant heat, which will shorten its effective air supply” 423 [WS15/2198]. The Airliner (unlimited duration) has an “air hose system highly susceptible to snagging, entanglement, or obstruction when navigating corners and staircases” and “its effective range is limited by its 90-metre hose length, making it impractical for operations on upper floors” 424 [WS15/2198].

1. The new Interspiro BA system (in service from January 2026) retains 8-litre

cylinders (now slightly lighter at 7.1 kg), and adds a TeamTalk function for communication within the same BA team and an Emergency Breathing Safety System enabling air-sharing between BA team members425 [WS15/2197]. The air-sharing capability directly addresses the scenario where a team member exhausts their supply.

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(ii) The sufficiency of the Firefighter Location System

1. The FLS deployed at the time of the fire used a single radio frequency. Above

approximately the 23rd floor in a high-rise building, concrete interference prevents the ground-floor receiver from detecting the signal. DO(BA) Tung confirmed: “even if… SFn HO had removed the red magnetic key of the PT and activated it, and the closest team and ECO on G/F had started searching for him, the signal from SFn HO’s PT on 30/F and 31/F of Wang Tai House might not have been received by the HHR on G/F of either Wang Cheong House or Wang Tai House due to the long transmission distance, as well as environmental conditions and anything that might cause interference or reflection of PT signal”426 [WS4/1811].

1. A new FLS system using dual-frequency signals (including low-frequency for

better concrete penetration) was already in procurement before the WFC fire. DO(BA) Tung confirmed in response to a question from the Chairman: “This is also using radio signals, but it would be using two different signals. It has a high frequency and low frequency. The low frequency signal is good because it can penetrate better... It can also show the distance between me and the one being rescued. It would be useful in this case because it would show the height differential between me and the one being rescued... We tested the new and the old devices on the 23rd floor. The old system cannot receive any signal, not to mention 30th floor. For the new one, it can pick up the signal” [Day 18/15/1 - 16/8].

1. The Government notes that the new FLS system addresses the constraint that

prevented location of SFn Ho. Its procurement was already underway before the fire, and testing confirms successful signal reception at the 23rd floor.

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(iii) The (lack of) ECP at the early stage of the fire

1. No ECP was established at Wang Cheong House or Wang Tai House at the initial

stage of the fire. DD Chan explained: “It wasn’t set up yet. Because the place they needed to go to was Wang Cheong House. He was from Shatin LRU, he couldn’t enter Wang Cheong House, so they had to create an access on Wang Cheong House” [Day 18/72/11-15]. When asked whether “things were happening so fast that the entry control procedures were not set up and the colleagues already went in,” DD Chan confirmed: “Correct” [Day 18/72/16-19].

1. The absence of an ECP at Wang Tai House meant that SFn Ho’s FLS Personal

Transmitter was not activated before his entry, directly affecting the ability to locate him after he issued his Mayday, as described in Section H above.

1. The Government presents this as a consequence of the speed and chaos of the

initial stage rather than a systemic failure of ECP procedure. In a normal single- building fire, the ECP would be established before entry teams advance. At WFC, multiple entry points were being established simultaneously at different buildings by teams arriving from different stations. The FSD is reviewing ECP procedures to address multi-block fires, including improved block identification mechanisms for officers from other districts [Day 18/72/20-22]. O6. Response to other queries / criticisms raised (i) Coordination among different teams of the FSD at the scene to be enhanced?

1. The suggestion that there was a lack of coordination among different teams of the

FSD at the scene is not borne out by the evidence. The FSD implemented a building-by-building command strategy with designated Sector Officers for firefighting and separate SAR leaders for each of the eight blocks, under overall direction from the Incident Commander and Rescue Officer. Each building was assigned both a Senior Officer (SDO or DO) responsible for firefighting

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operations and an additional Senior Officer dedicated as SAR leader, ensuring that life-saving efforts were prioritised and coordinated at the tactical level within each sector427 [WS8/1924].

1. By 2100 hours on 26 November 2025, 22 Senior Officers and Directorate Officers

from both operational and non-operational units were present at the scene, “far beyond the required PDA of attendance for a No. 5 Alarm Fire, which normally required only a single-digit number of Senior/Directorate Officers”428 [WS1/51].

1. The coordination framework extended beyond the sector structure. The DCP

provided continuous backend support from 1520 hours, compiling hourly situation reports disseminated to all Directorate Officers and the Emergency Monitoring and Support Centre429 [WS2/1019]. Livestreaming of drone images to the DCP was enabled from 1615 hours, and a Command Support System allowed remote data sharing between the on-site incident scene and the DCP430 [WS2/1019]. At the fire scene itself, the MCU served as the central coordination and briefing point: all arriving appliance teams were required to report to the MCU for briefing before deployment, at which point they received instructions on block identification, sector assignment, and operational priorities [Day 19/31/12-25].

1. Officers from other districts, unfamiliar with WFC’s layout, might have faced

difficulty in identifying individual blocks. The difficulty might have been compounded by the fact that the blocks were enveloped in scaffolding nets, making visual identification of individual buildings more difficult from the outside, and that some officers might have arrived and entered the blocks before

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the MCU briefing system could assist them, given the extraordinary speed of the fire’s development.

1. However, this was addressed through briefings at the MCU and the provision of

GIS maps and layout plans. AD Tang confirmed: “During the time when I was the incident commander, the person in charge of appliances at the scene had to go to the MCU for briefing. If the appliance team had arrived, if they were not familiar with the layout and position of the individual buildings, we would give them instructions. There is the geographical information system and various information on the MCU” [Day 19/31/12-25]. In addition to briefings at the MCU, AD Tang further confirmed that there were other means by which instructions were made available to frontline officers: “There is the MDT, the mobile data terminal, with information of the layout of the blocks. I don’t think that this creates serious obstacles to the colleagues working at the scene. You follow the access in the inner court, you find BA main control, you have another team, there is the forward command post. So they would obviously see the different posts or points in addition to the reserve areas. So these people manning these points will know the locations of individual blocks” [Day 19/31/22-25 – 32/1-9].

1. The Government submits that the command structure established at WFC was

comprehensive and unprecedented in scale. The coordination arrangements, encompassing the eight-sector building-by-building strategy, the dual firefighting and SAR leadership at each sector, the DCP backend support, the MCU briefing process, and the presence of senior and directorate officers, collectively demonstrate a structured and effective command architecture. (ii) The bamboo scaffolds should be dismantled first?

1. Complete dismantling of the burning scaffolding was operationally unfeasible

and counterproductive. DCFO(OP) Wong explained that dismantling would have

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required extensive manpower diverted from rescue; would have “exponentially increased the risk of falling debris, striking both firefighters and evacuating residents on the ground level and rekindling fires in the vicinity that had already been subdued or put out”; and the “massive structure, once dismantled, would have been reduced to nothing but a voluminous pile of burning bamboo sticks and scaffolding nets left on the ground, thereby causing further blockage to the vital entrances of the buildings from which they were torn”431 [WS1/80-81].

1. The FSD’s paramount objective was “securing immediate interior access for

firefighting and victim rescue. Saving lives is always the first priority; however, this must occur alongside firefighting efforts, as effective fire suppression is essential to ensure the successful implementation of rescue procedures. In permissive environments, the tactical decision therefore focused on clearing only essential pathways at building entrances rather than attempting comprehensive scaffolding removal” 432 [WS1/81]. (iii) The EAS should be invoked?

1. The EAS was considered but not used. DD Chan explained his reasoning: “The

EAS is a public dissemination system for time-critical messages via mobile networks. Activation criteria include territory-wide emergencies such as massive infrastructure breakdowns, large-scale riots or bomb disposals, rather than localised incidents. I considered the EAS unsuitable for this incident because, at the material time, this situation required localised, one-on-one communication with specific residents in the affected buildings rather than broadcast to the general public due to the unpredictability of the dynamic fire development”433 [WS8/1933].

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• The formal position is set out in General Circular No. 5/2020 [B2/1318], which

confined EAS use to territory-wide emergency matters.

• DD Chan acknowledged in oral evidence that the decision not to use the EAS was

a conscious choice: “From what we’ve heard from you, it was a conscious decision not to use it, it’s not that the system had been forgotten” to which he answered “That’s right” [Day 18/68/4-8]. When asked whether, looking back, it was not a wise decision, he reiterated the operational reasoning: “It’s not just about that. As I said, we would not know how the residents would react having received the alert. We all know about the conditions of the blocks. If residents tried to escape, they might be put in greater danger” [Day 18/66/4-9]. He confirmed that in future, “if the system is used, we will need to first look at the messages to be sent and put in place relevant public education” Day 18/67/16 - 18).

• The Government reiterates that major causes of the evacuation difficulty lie with

the FAS failure (Section N above) and the blockage of entrances and exits by burning debris, not the non-use of the EAS. The possibility of using the EAS is a possible area of improvement which merits the Government’s attention: the system was (at the time) not configured for localised use and there had been no public education on how to respond to an EAS alert. The Government has since initiated work to configure the EAS for localised use and to design a public education campaign (Table of Improvement Measures, Item A12(iv)). DD Chan confirmed: “Afterwards, the Government consider improving the EAS for the use of various government departments. Information from the public domain said that the system can be configured to be issued to a localised area” [Day 18/67/3-8]. 322

(iv) Helicopters and other advanced technologies such as drones should be used in the firefighting operation?

1. Helicopters were not deployed for water bombing. DCFO(OP) Wong explained

the technical reasons: water dropped from height “would not be able to penetrate into the interior of the building where the fire was located. Instead, it would largely fall on exterior façades or rooftops, and would therefore have little or no direct effect on controlling fires within residential units”434 [WS1/73]. Helicopter downwash “can force smoke into buildings, thereby increasing the risk to occupants who are trapped inside. It may also drive additional air into the structure, potentially intensifying the fire” 435 [WS1/73]. A helicopter water bomb carrying up to one tonne of water “when released from height, can damage temporary structures such as bamboo scaffolding and wash debris to ground level, creating additional hazards” 436 [WS1/73].

1. DCFO(NTN) Wong King-man also identified the steam risk from applying

external water jets into residential units where residents might be trapped: “When we apply water jet from the external environment, the control is at the bottom of the vehicle. We would not know about the conditions at the block or the interior environment... there is risk arising from applying water jet from the outside into the units of the blocks because if there are firefighters inside the building, they could be injured. They could sustain fire injury” [Day 11/122/4-22].

1. One hundred-metre aerial ladder platforms were not deployed because they

require a 10-metre wide deployment footprint (wider than any EVA in Hong Kong), weigh more than 60 tonnes (exceeding the 30-tonne load-bearing capacity of Hong Kong EVAs), and even if deployed, the sole viable location (Tai Po Road, 46 metres from Wang Sun House) would have meant the rescue cage could not

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reach the building façade437 [WS1/66-69]. AD Tang concluded: “given turntable ladders had already been deployed at available strategic positions for external firefighting around Wang Fuk Court and the EVA near the buildings became inaccessible due to fallen burning scaffolding materials and debris, further reinforcement of turntable ladders, regardless of their operational height, would not have effectively met the operational objectives. More turntable ladders would not be able to get close enough to the buildings”438 [WS6/1873].

1. As to firefighting drones: DCFO(OP) Wong confirmed that according to

information from the National Fire and Rescue Administration, “no firefighting drones are currently in operational use by Chinese Mainland fire departments, and using drones for firefighting is still at the research and development stage... Based on available information, there are currently no known fire departments that have utilized drones for direct fire suppression in actual fire incidents”439 [WS1/69]. In oral evidence he stated: “Frankly speaking, there are a lot of online videos showing that there are fire drones in use. Those are only videos produced by the manufacturers. They have gone through major editing. I won’t say they are completely useless, but in our actual firefighting operations, so far they are not mature enough to be deployed” [Day 12/110/12 - 112/7].

1. However, drones were effectively deployed for other purposes. Ten FSD drones

equipped with live-streaming and thermal imaging capabilities were used for aerial surveillance, identifying two trapped persons on a rooftop, monitoring for reignition, and providing supplementary illumination at night. An additional 10 drones were borrowed from Guangdong Province. AD Tang recorded: “the UAS team identified the locations of the two persons trapped on a building rooftop who were out of sight from the ground crews. By continuously monitoring the

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situation via the drones, our rescue team identified a safe window of opportunity to reach them and successfully led both individuals to safety”440 [WS6/1864] [B17/6398]. The drone-assisted rooftop rescue is a concrete example of effective technology use during the fire. (v) Additional support from the Chinese Mainland should be sought?

1. The decision not to accept additional firefighting manpower from Guangdong

Province was based on scene capacity constraints and operational incompatibilities. DD Chan assessed that additional resources were not required because the FSD had “already despatched over 220 FS appliances and 980 personnel to the scene, a deployment that exceeded the standard PDA for a No. 5 Alarm by approximately nine times” 441 [WS8/1931-1932] and that “due to the buildings’ structural limitations, including narrow staircases and restricted corridor space, as well as extreme heat conditions requiring a floor-by-floor advancement, there was a practical limit to the number of personnel who could be effectively and safely deployed at any one time”442 [WS8/1931-1932].

1. DCFO(OP) Wong identified specific operational incompatibilities in BA

procedures, Mayday procedures, evacuation signals, hydrant coupling systems and portable pump designs. In his evidence, he illustrated these with a vivid example: “The terminology for issuing a Mayday message differs fundamentally between the Chinese Mainland and Hong Kong. Hong Kong firefighters follow local protocol by calling ‘Mayday, Mayday, Mayday’ in English to initiate their distress signal, while Chinese Mainland firefighters use ‘呼救、呼救、呼救’ in Putonghua. This linguistic divide means that when a Chinese Mainland firefighter trapped in a collapsed structure broadcasts his distress call in

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Putonghua, Hong Kong personnel may not immediately recognize it as an emergency signal”443 [WS1/75-76]. He further explained that evacuation horn blasts differ between the two jurisdictions: Hong Kong uses long blasts while the Mainland uses intermittent blasts, creating a life-critical risk of misunderstanding [Day 12/124/12 - 126/16].

1. Cross-boundary equipment support was, however, accepted: ten UAS with

optical and thermal imaging and 20 sets of exoskeleton equipment were borrowed from Guangdong Province to support operations444 [WS2/1020; WS1/79].

1. The distinction between declining personnel (operationally incompatible) and

accepting equipment (interoperable) reflects a professional safety assessment, not a political decision. The Guangdong-Hong Kong-Macao Emergency Management Cooperation Framework Agreement’s current phase focuses on natural disaster scenarios; work is underway to extend it to cover large-scale building fires. DCFO(OP) Wong confirmed: “the FSD will engage with its counterparts in Guangdong and Macao to explore the feasibility of expediting to operationalize mutual assistance arrangements for large-scale building fires”445 [WS1/79]. O7. Review (i) Improvements already introduced

1. The following improvements had already been implemented by the time of the

evidential hearings:

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1. 1. The new Interspiro BA system with Spirocom radio connectivity was

placed into service on 19 January 2026, resolving the communication limitation identified during the fire446 [WS2/976]. 877.2. A new referral mechanism has been established: for any fire safety enquiry or complaint, the FSD now proactively refers to the relevant department with the caller’s consent and follows up to confirm receipt Day 17/48/21

• 49/8.

1. 3. The DFS has also established a “Mega-scale Fire Incidents Strategic

Steering Committee” (Table of Improvement Measures, A12(i)). His second witness statement records that the Committee is “led by the Deputy Director (Operations), to conduct a comprehensive review of existing firefighting and rescue strategies, protocols and equipment for incidents of mega-scale and nature” and will “undertake a thorough examination of current operational strategies, drawing on the experience and good practices of Chinese Mainland and overseas counterparts, with a view to enhancing rapid response, command and deployment, firefighting and rescue tactics and evacuation effectiveness under large-scale and complex fireground conditions”447 [WS2/1029]. During oral evidence in specific response to Member Chan, the DFS confirmed that the Committee’s work encompasses “the command structure and also the firefighting strategies and tactics and so on, how we can make use of technology and equipment to fight fires and so on, that would be a continuous process to enhance our capabilities” [Day 19/106/6-14].

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(ii) Improvements to be introduced, and further studies to be conducted

1. Beyond the immediate measures already in effect, the FSD has identified a series

of medium-to-long-term improvements to be introduced across four areas: technology and systems, equipment, inter-agency coordination, and operational guidelines.

1. In terms of technology and communication systems:
2. 1. The 4th Generation Mobilising System will increase the number of

incoming lines to 100 and automate information relay, eliminating the manual screenshot process that characterised the 26 November operation. Once operators enter information into the system, it will be shared simultaneously with all parties involved in the operation. The DFS confirmed that the system is currently in testing and training and that “the earlier that the system can be commissioned, the better” [Day 19/78/4-13]. Complementing the FSCC upgrade, the FSD is developing SMS location sharing for callers (enabling callers to share their GPS position via a link sent to their mobile phone) and a video evidence collection platform to allow the public to share footage of fire scenes with the FSD in real time [Day 12/61/20 - 62/25]. 879.2. The EAS is also being reconfigured for localised use so that alerts can be issued to a specific geographic area rather than territory-wide, and a public education campaign on how to respond to an EAS alert is being designed Day 18/67/3-8).

1. In terms of equipment, a new FLS with dual-frequency signals (including low-

frequency for better concrete penetration) and a height differential display is in procurement. Testing confirms successful signal reception at the 23rd floor,

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directly addressing the limitation that prevented location of SFn Ho during the WFC fire [Day 18/15/1 - 16/8]. An electronic entry control clipboard is also being introduced to replace the paper BA log system, eliminating manual recording errors and ensuring automatic logging of firefighter entry and exit times [Day 18/24/10-18].

1. In terms of inter-agency coordination, the cross-boundary cooperation framework

with Guangdong and Macao is being expedited to cover large-scale building fires. The current framework focuses on natural disaster scenarios; the FSD will engage with its counterparts in both jurisdictions “to explore the feasibility of expediting to operationalize mutual assistance arrangements for large-scale building fires”448 [WS1/79]. By way of example, a 3-day Guangdong-Hong Kong-Macao Greater Bay Area emergency response and rescue exercise took place in Macao from 20 to 22 May 2026 [B14/6263]. A joint review with the Police on 999 call- handling procedures is also being conducted, encompassing the elimination of duplicated questions Day 19/78/22 - 79/3).

1. In terms of operational guidelines and research, guidelines are to be developed

for multi-block FAS failure scenarios (a situation for which no written guidance existed before the fire), and new ECP establishment protocols for multi-block fires are being formulated. Ongoing research is being conducted into temporary fire alarm systems for renovation sites and FSIs that can be installed on scaffolding to suppress or extinguish fire at an early stage [Day 17/47/10-25].

1. The Government submits that this programme of reform, encompassing

immediate operational changes already in effect, medium-term legislative amendments before the legislature, and longer-term technology and research

448 WONG Sze Lut, Sunny 1st WS §12

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initiatives, represents a comprehensive and considered response to the operational challenges revealed by the WFC fire. The reforms are systemic in nature, addressing the structural inadequacies identified in this review rather than simply augmenting resources within the existing framework.

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PART III(F): SYSTEMIC ISSUES P. ABUSE OF THE SYSTEM BY PROFESSIONALS AND OTHER NON-GOVERNMENTAL PARTIES

1. Before turning to the Government’s acknowledged systemic issues, it is necessary

to set out comprehensively the primary responsibilities of each private actor whose conduct directly caused the fire, its rapid spread and the heavy casualties.

1. The evidence addressed in Sections I to N above, taken together, establishes that

the fire at WFC was not the product of a single act of negligence or a single regulatory weakness.

1. It was the product of sustained, multi-faceted wrongdoings with deceit by

multiple private actors operating over a period of months, in circumstances where every actor bearing primary responsibility either actively participated in the creation of hazardous conditions or was grossly negligent in circumstances amounting to a complete abdication of professional duty. Worse still, it is evident that such wrongdoings specifically sought to circumvent and/or undermine the existing structural frameworks in place, thereby seriously hampering and undermining the Government’s supervisory function.

1. As the evidence under ToR 2 further reveals (addressed in Part IV below), the

conduct observed at WFC was not an isolated aberration but reflects sector-wide patterns of non-compliance, collusion and exploitation of the self-regulatory model that have persisted in the building maintenance industry over a prolonged period (cf. paragraphs 929-930 below).

1. This Part addresses each culpable party in turn, drawing together the threads of

their conduct across the contributing factors to demonstrate the cumulative weight of private-actor failure.

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P1. Prestige

1. Prestige was the main contractor engaged for the WFC renovation works at a

contract price of approximately HK$336 million. It bore the primary statutory duty under the BO, FIUO, and OSHO to ensure the safety of the works, compliance of materials, and maintenance of safe systems of work. Its conduct in relation to each of the five contributing factors demonstrates a systematic pattern of non-compliance, concealment and disregard for the safety of the residents whose homes surrounded its works.

1. As to the start of the fire: Prestige bore primary responsibility for site

management and carrying out of the works, including the enforcement of no- smoking rules, clearance of construction debris, and maintenance of a safe working environment.

1. Despite repeated complaints from residents, documented observations by the

PMC, reminders at renovation works meetings, and warnings issued by the LD, Prestige failed to enforce an effective no-smoking regime. Prestige also failed to ensure frequent clearance of combustible construction waste from the flat roof at the point of origin, where debris had accumulated. The combination of uncontrolled smoking and accumulated combustible waste in a confined space created the conditions in which a discarded cigarette could ignite materials and start a fire.

1. As to the use of scaffolding nets uncertified for FR properties: Prestige

deliberately supplied and used, and directed the purchase and use, of scaffolding nets uncertified for FR properties, i.e. scaffolding nets that are not certified for satisfying any of the FR standards as required by the BD’s circular letters, LD’s Code of Practice, and B(C)R. When asked to produce a test certificate, Prestige furnished a document that was subsequently found to be unreliable. The evidence

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further indicates that Prestige engaged in selective replacement of scaffolding nets in areas likely to be inspected. If such findings are made by the Committee, Prestige’s act would be deliberate and calculated deception directed at the regulatory body exercising supervisory authority over the works.

1. As to the extensive use of foam boards: Prestige used combustible polyvinyl

chloride foam boards to cover windows across multiple blocks for a period exceeding one year. When the ICU raised the fire hazard concern at the 28 October 2024 site inspection, Prestige’s representative expressly represented that the foam boards would be used only temporarily during active hacking works (three floors at a time) and that non-combustible materials would be used for such temporary protection. This representation was false. The foam boards remained in place across the estate, obstructing residents’ awareness of the fire, delaying their evacuation response, and contributing to the vertical spread of fire and generation of toxic gases that caused the deaths of individuals by carbon monoxide inhalation.

1. As to the creation of access openings at escape staircases: Prestige created and

directed the creation of access openings resulting in the removal of windows and replacement with movable wooden boards or aluminium composite panels at regular five-floor intervals across all eight blocks. These openings permitted smoke and heat to infiltrate the protected staircases during the fire, rendering them incapable of providing a safe environment for evacuation. Of the 38 fatalities in the staircases and common areas of Wang Tai House, 28 were found inside the staircase; the cause of death for all 28 was inhalation of fire fumes attributable to the compromised openings. The full-scale fire tests confirmed that the wooden boards ignited within minutes, whereas the fire-rated glass windows they replaced remained intact and maintained a lower interior temperature.

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• As to the failure of fire alarms: Prestige directed the drainage of the FS Water

Tanks as part of the renovation works which resulted in ISS (a non-RFSIC) physically switching off the main power switch in the booster pump rooms of all eight blocks, an act that simultaneously deactivated both the FH/HR System and FAS. Prestige arranged this despite the fact that the drainage of the FS Water Tanks did not require the main power switch to be turned off at all; the technically necessary steps were to switch off the upfeed pump and open the rooftop drain valve. Prestige engaged China Status to submit SDNs to the FSD, informed China Status that the building management company would “handle the physical shutting down,” and at no point ensured that an RFSIC was present to oversee the operation of FSIs. The consequence was that 168 people lived without a functioning fire alarm for months, and when the fire broke out, no warning sounded.

• Prestige’s conduct, taken as a whole, demonstrates a pattern of systematic non-

compliance. P2. Will Power (consultant purportedly providing RI services) and Ng Yeuk (the RI)

• Will Power was appointed to provide consultancy services for the renovation

project (including the provision of Registered Inspector services) under the MBIS. The RI bears specific statutory responsibilities under section 30D of the BO: to provide proper supervision of the carrying out of prescribed repair works; to ensure that repair materials are not defective and comply with all relevant Ordinances, Regulations, codes of practice and practice notes; and to ensure that the building is safe or has been rendered safe. 334

• The evidence before the Committee discloses no attempt to discharge, let alone

any effective discharge, of these statutory responsibilities by the RI in relation to any of the five contributing factors.

• There is no evidence that the RI took any steps to verify the FR properties of the

scaffolding nets installed by Prestige, despite the existence of clear requirements in the BD’s circular letters and LD’s Code of Practice.

• There is no evidence that the RI raised any concern about the extensive and

prolonged use of foam boards to cover windows, despite the obvious departure from the representation made to the ICU that they would be used only temporarily and in a localised manner.

• There is no evidence that the RI identified or reported the access openings at

escape staircases as a contravention of the BO, despite the MBIS Code’s specific requirement to identify and report “unprotected openings at enclosure walls of exit routes.”

• The RI’s absence of supervision was not merely passive. The MBIS Code

requires the RI to certify, upon completion, that works have been carried out in compliance with the BO. The supervision plans submitted under the MWCS for the window replacement works stated that the PBPs would conduct weekly inspections. The totality of the evidence suggests that these representations to the regulatory authority were not matched by any substantive supervisory activity on the ground.

• The ICAC’s evidence before the Committee identifies a broader pattern in which

certain RIs in the building maintenance sector function as “mere dummies” who exercise “little or no supervision over the project” and are “only appointed to satisfy the statutory requirements imposed under the BO.” Whether or not that 335

characterisation applies to Will Power’s/the RI’s conduct at WFC is a matter for the Committee’s assessment; what the evidence does establish is that the RI’s statutory obligations were clearly not discharged. P3. China Status

1. China Status was engaged by Prestige to submit SDNs and FS251 certificates to

the FSD in connection with the FS Water Tank repair works. The evidence establishes that China Status performed no substantive function beyond the administrative act of completing and submitting forms – which completely defeats the purpose of its appointment and serves to make a complete mockery of the system in place.

1. China Status never visited the site. Its director admitted that no representative

attended WFC “for the purposes of understanding first-hand the FH/HR System in place, the relevant renovation works proposed to be conducted there, the necessity of shutting down the FH/HR System for such renovation works, or the feasibility of putting in place additional fire services measures while the FH/HR System is shut down.” When asked whether China Status was “just a rubberstamp,” the DFS answered: “Yes.”

1. China Status submitted SDNs that consistently identified only the FH/HR System

as the subject of shutdown, leaving the FAS box blank. Because China Status never visited the site, never assessed the need and consequences for the shutdown of the FH/HR Systems, and never effected the shutdown of the relevant FSI themselves, it never knew and never realised that the FAS had also been deactivated. The FSD therefore received no notification that the FAS across all eight blocks were inoperative. Had the FSD been notified, it would have updated the contingency plan, required the owner to notify residents, and demanded

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implementation of standby measures. None of this occurred because China Status’s representations to the FSD were incomplete and misleading.

1. China Status’ director admitted that he “breached all of his obligations” shown

to him in the FSD’s Circular Letter No. 1/2021. He admitted he did not exercise his discipline in considering whether his acts breached the requirements. The FSD’s assessment was that China Status “not only failed the expectation of the public, but also breached the FSD’s trust” by falsely representing to the FSD that the shutdown of the FH/HR Systems was due to repairs needed as a result of leakage of the FS Water Tank and that it was the responsible RFSIC carrying out the relevant repair works based on the defect(s) as detected.

1. Had China Status discharged its obligation to supervise the works and critically

review the need for each extension, it would have noted the completion of the FS Water Tank repair works at certain blocks well before the fire. In the case of Wang Tai House, the works were completed by the end of October 2025; had China Status been aware of this, the filing of the last SDN dated 13 November 2025 would not have been necessary and the FH/HR System should have been resumed to normal operation. The same applies to other blocks where repair works were completed in September to November 2025. China Status’s failure to inquire into the progress of the works, or to attend the site at any point, meant that SDN extensions continued to be filed mechanically for works that had already been completed, prolonging the shutdown of the FSI beyond any legitimate need and maintaining a state of heightened fire risk for residents who had no knowledge that their FSIs remained inoperative. P4. Victory Fire

1. Victory Fire was the long-standing RFSIC engaged by ISS for annual inspections

and rectification works at WFC. It had held this role for approximately nine

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consecutive years. In October and November 2025, Victory Fire’s staff discovered, first, that the FS Water Tanks in all eight blocks were empty (16 October 2025) and, second, that the main power switches controlling the power of both the FH/HR System and FAS of all eight blocks had been switched off (19 November 2025) when they were doing repair works on the very FH/HR Systems and FAS at WFC respectively. The second discovery meant that Victory Fire’s staff had direct knowledge that the FAS in all eight blocks were de-energised.

1. Victory Fire failed to make any attempt to notify the FSD of this discovery. The

FSD’s Circular Letter No. 1/2021 expressly requires an RFSIC who discovers a defect involving one of 9 major FSIs (FH/HR systems and FAS included) to submit an SDN to the FSD. Victory Fire’s director conceded that this obligation existed; he sought to shelter behind the presence of China Status’s SDN for the FH/HR System, but that SDN did not cover the FAS.

1. Victory Fire completed its rectification works and left the site at approximately

1:00 pm on 26 November 2025 without testing the FSIs it was engaged to rectify, without issuing an FS251 for the FSIs, and without notifying the FSD of the shutdown of the SDN, let alone the empty water tank, even though it discovered during the course of its works that the shutdown had lasted more than 24 hours. Less than two hours later, the fire broke out. P5. ISS (the PMC)

1. ISS occupied a central position in the management of the estate, with contractual

responsibilities that placed it at the intersection between the residents, IO, and various contractors engaged for the renovation works. The PMSA Code of Conduct specifically requires licensed PMCs to monitor the progress of the RFSIC’s work, follow up timely with the RFSIC on required rectifications, follow

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up timely with the RFSIC that it has notified the DFS of FSI shutdowns, and assist FSD officers during visits.

1. ISS failed in these obligations in several critical respects.
2. First, ISS issued job orders directing its own unlicensed electrician to physically

operate FSIs, an act that was categorised by AD Keung as “against the law” and “something that one must never do.” ISS management did not enquire whether an RFSIC should be engaged for this work; its property officer accepted it “did not occur” to her that the drainage of the FS Water Tank should be done by a RFSIC rather than the property company.

1. Second, ISS failed to coordinate between two simultaneously engaged RFSICs

(Victory Fire and China Status). When Victory Fire’s electricians discovered the FS Water Tanks were empty on 16 October 2025 and that the main power switches had been turned off on 19 November 2025, ISS’s property officer told them that an SDN had been submitted and temporary measures were in place, but did not show them the SDN, did not suggest coordination between the two contractors, and did not inform Victory Fire that the FAS had been deactivated. She confirmed that “it didn’t cross anyone’s mind that that needed to be done.”

1. Third, ISS’s response to persistent fire safety complaints from residents was

limited to relaying them to Prestige without follow-up. Despite contractual obligations to “record, investigate and liaise and follow up on the matter with the relevant government department,” ISS’s actual practice was, as its own security guard confirmed, to play the role of “passing on the message.” ISS neither escalated unresolved complaints nor took independent steps to verify whether Prestige had remedied the hazards.

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• Fourth, ISS permitted Prestige workers to enter the pump rooms without proper

registration or documentation, with the consequence that the FSI shutdown occurred without any contemporaneous record. ISS’s property officer accepted that had proper procedures been followed, “there should have been a form stating that there was a drainage, working permits were issued and the entry of whether the fire alarm system would be affected would be filled in.” P6. Residents as victims of the cumulative effect of private-actor failure

• The residents made the collective decisions to engage Will Power as consultant

and to provide RI services (noting that the residents were never asked to directly engage the RI who must be an individual), and to appoint Prestige as the main contractor, through owners’ meetings at which the decisions were approved by majority vote.

• The residents of WFC were not passive in the face of the concerns that would

later prove to have been well-founded. Complaints were made repeatedly and to multiple departments regarding fire safety, smoking, materials, and proxy irregularities. In this context, the residents and those IO/MC members who raised concerns can be properly characterised as persons adversely affected by the misconduct rather than contributors to it. The responsibility for the decisions that led to the engagement of Prestige and Will Power lies with those who manipulated the decision-making process, not with the owners who were similarly deceived.

• When the conduct of these private actors is viewed together, the picture that

emerges is one of a complete and simultaneous failure of every layer of private- actor responsibility. Each contributing factor to the fire, its spread and the heavy casualties traces directly to the acts and omissions of these private actors. 340

• The safeguards built into the regulatory framework were designed on the

assumption that professionals would exercise a degree of integrity commensurate with the trust reposed in them and obligations imposed upon them by law. At WFC, that assumption was not borne out. It is against this background, and with this understanding of where primary responsibility lies, that the Government turns to address the systemic issues within its own supervisory framework. 341

Q. SYSTEMIC ISSUES ACROSS KEY CONTRIBUTING FACTORS

1. This Part examines the systemic issues within the Government’s regulatory and

supervisory framework that cut across the contributing factors addressed above.

1. These issues are distinct from the direct causes of the fire (which are addressed

in Sections I to N and the primary responsibilities summarised in Part P); they concern structural, procedural and operational characteristics of the Government’s own systems that permitted the private actors’ wrongdoings to go undetected before the incident.

1. It is important to place these systemic issues in their proper historical context.

The regulatory frameworks involved include those which began in the 1960s and in 1992 well before the first term of the HKSAR Government and developed over all six terms of HKSAR Government. They had also been subject to the scrutiny of HKSAR’s legislature over the years, and were not hastily or carelessly constructed. 924.1. The delegation arrangement between the BD and ICU dates from 1992 and has been renewed and refined over more than three decades. 924.2. The FSI regulatory framework under the FSO has been developed incrementally since the 1960s, with the SDN mechanism formalised in 2021. 924.3. The MWCS was introduced in 2010 with the deliberate policy objective of simplifying procedures for lower-risk works while preserving professional accountability in response to calls for streamlined regulatory procedures. 924.4. The MBIS was introduced in 2012 following extensive consultation and Legislative Council scrutiny.

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• These frameworks were designed, debated and enacted reflecting what was then

considered to be the appropriate balance between regulatory oversight and professional self-governance. The systemic issues identified below are therefore not novel discoveries arising solely from the WFC fire. The question for the Committee is not whether these characteristics were unreasonable when adopted, but whether they remain adequate going forward, in light of what the evidence has revealed about the vulnerability of the system to organised and deliberate subversion.

• As noted in the overview at Section D above, the degree of reliance on

professional self-regulation in the MBIS and MWCS was the product of a deliberate policy balancing exercise. The legislative history demonstrates that these frameworks were developed in response to sustained calls from building owners, the industry and the legislature to streamline regulatory procedures, reduce compliance costs, and avoid imposing disproportionate requirements on works of lower risk. As the Chairman observed in the context of the post-Grenfell reforms in the United Kingdom, the imposition of very strict requirements “imposes a lot of hardship on the developers and as a result a lot of developers cannot finish the projects” [Day 27/76/4-6]. The trust placed in registered professionals was thus the mechanism through which the legislature’s endorsed balance was struck: professionals would bear primary responsibility for planning, supervision and compliance, and the Government would exercise oversight through audit checks, complaint-driven responses and disciplinary mechanisms.

• Indeed, the evidence of the Competition Commission, ICAC and Police under

ToR 2 (addressed in Part IV below) demonstrates that the systemic vulnerabilities in the building maintenance sector (including bid-rigging, the misuse of the RI role, and the exploitation of the self-regulatory model) are not 343

recent developments but have persisted over a prolonged period, notwithstanding the progressive efforts of the relevant enforcement agencies. Q1. Reliance on the self-regulation of professionals, and sufficiency of audit checks and site inspections

1. The pre-fire regulatory framework for building maintenance and renovation

relied heavily on the self-regulation of registered professionals and contractors for its implementation. The Government’s role is exercised through inter alia audit checking of submissions and in response to complaints.

1. The system was designed to detect non-compliance on a statistical sampling basis,

not to provide continuous oversight of individual projects. Where a contractor and RI were actively collaborating to conceal non-compliance (as the evidence indicates was the case at WFC), the probability of detection through random audit alone was low. This was compounded by the absence of any statutory requirement for the ICU to conduct regular site inspections during the course of MBIS-related works; the ICU’s inspections at WFC were conducted solely in response to complaints and enquiries, not pursuant to any programmed monitoring regime.

1. The Government acknowledges that this degree of reliance on professional self-

regulation, without more intensive verification during the works period, created a vulnerability that was deceptively exploited at WFC.

1. The improvement measures already introduced and under consideration are

designed to address this vulnerability by introducing meaningful ongoing oversight during the works period rather than relying solely on pre-works and post-works certification.

1. The recalibrated system preserves the role of registered professionals as the

primary actors responsible for compliance while introducing verification

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mechanisms with sufficient frequency and independence to detect the kind of systematic non-compliance that occurred at WFC. Q2. Supervision of professionals – RCs, RIs and RFSICs

1. The registration systems for RIs, RCs and RFSICs serve as gateway controls

through which only suitably qualified professionals and contractors may undertake building works or FSI maintenance. The systems operate primarily at the point of entry (registration) and renewal, with prosecution and disciplinary action available as enforcement mechanisms for non-compliance detected subsequently.

1. The evidence before the Committee reveals three areas for improvement in this

supervisory architecture as it operated before the fire.

1. First, while the registration system did subject Prestige to enhanced scrutiny at

the point of renewal (including on one occasion refusing renewal of its RMWC registration in October 2019), the system operated as designed at the time did not preclude Prestige’s subsequent re-registration as an RGBC. The broader question is whether the system could be enhanced to better inform building owners of contractors' disciplinary histories at the point of engagement, and to enable more responsive regulatory action where serious incidents are involved. In this regard, the Government is actively pursuing legislative and administrative reforms, including (Table of Improvement Measures, Items B2(iii)-(iv); DEVB Paper §§3(d), 3(f), 7, 16 [WS23/2470, 2474, 2479]): 935.1. Empowering the BD to de-register PBPs and RCs directly without going through disciplinary procedures in cases of violations of the Prevention of Bribery Ordinance (Cap. 201) and Competition Ordinance (Cap. 619);

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1. 2. Empowering the BD to renew registration of RCs for shorter periods and

with conditions for RCs involved in serious incidents; increasing the maximum penalty from $1 million to $10 million where works directly involved have caused serious cases of injury or death; and 935.3. Firming up information-sharing arrangements under which the URA will have access to conviction and disciplinary records for the purposes of compiling and maintaining pre-qualified lists under the enhanced Smart Tender service.

1. Second, the supervision of RIs during the works period needed enhancement. The

current system expects that the RI will discharge the statutory duty; it provides no mechanism for detecting a failure to do so until completion (or until a complaint is received).

1. Third, the supervision of RFSICs similarly relied on the integrity of their own

reporting. The FSD’s monitoring of RFSICs operated through the FS251 and SDN mechanisms, both of which depend on the accuracy / truthfulness and timeliness of the RFSIC’s submissions. The system was not designed to detect whether an SDN accurately described the FSI systems shut down or whether its corresponding FS251 accurately described the defects necessitating the repair works / shutdown. Neither was it designed to detect whether an RFSIC claiming to have conducted works had in fact visited the site, assessed the need and consequences for the shutdown, and effected the shutdown themselves. Q3. Sufficiency of the relevant procedural guidelines, codes of practice, etc.

1. The evidence before the Committee identifies that private actors have sought to

create and/or invoke gaps and ambiguities in the prescriptive content of the regulatory framework so as to circumvent any such safeguards altogether. The

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Government reiterates that the intactness of the regulatory framework is not the primary cause of any contributing factor, but the Government acknowledges that there had arisen an environment in which private actors could exploit uncertainty and the current regulatory system needs clearer benchmarks for more proactive and immediate enforcement measures to be taken.

1. In the area of construction materials: before the fire, no specific prescriptive

standard existed for temporary window protection materials (such as foam boards) in any regulation, code of practice or practice note. Section 16 of the B(C)R requires “appropriate precautionary measures” but provides no specific content as to what materials are or are not acceptable for temporary window protection. Similarly, before the fire, no specific FR standard existed for toe-boards, wooden planks or nylon strips used as scaffolding components.

1. In the area of inter-departmental jurisdiction: no guideline clearly delineated

which department (the FSD, BD/ICU or LD) was responsible for addressing the fire safety implications of construction materials used on scaffolding. The result was that the fire safety concern raised by foam boards, canvas and other combustible materials used on the scaffolding did not receive a comprehensive response from any department.

1. In the area of concurrent large-scale renovation works across multiple blocks:
2. 1. Before the fire, no regulation, code of practice or practice note required a

risk assessment addressing the fire safety implications of simultaneous renovation works across multiple buildings in close proximity. AD Karen Cheung of the BD confirmed that there was no rigid requirement that works on multiple blocks in the same estate must be done separately or in phases; it depended on the contract and the works method [Day 20/36/4-7].

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1. 2. She explained the rationale: blocks in the same complex share the same

DMC and land lease, were built around the same time with the same materials, and residents had given feedback that treating blocks differently within the same complex creates practical problems [Day 20/35/5-24]. 941.3. The Government notes, however, that the MBIS Code already required the RI and RC to provide proper supervision and control during the course of rectification and repair works, including “adequate measures to ensure a safe working environment” (clause 6.1.2(a)) and safety measures to “safeguard the workers, occupants and the public as well as the adjacent buildings” (clause 6.2.1) [J1-2/4907]. These existing obligations, properly discharged, would encompass a fire safety risk assessment appropriate to the nature and scale of the works, including the cumulative risks arising from concurrent renovation across multiple blocks. 941.4. After the fire, the BD issued a circular in March 2026 (paragraph 4) [B13/5714-5719] reminding contractors and professionals to conduct risk assessments before works start, including consideration of whether phased works are appropriate having regard to fire safety, and suggesting to owners that works be done by phases. AD Karen Cheung confirmed that some complexes have since adopted this phased approach [Day 20/36/13- 23]. 941.5. In addition, an inter-departmental working group comprising the LD, BD and FSD has been established to study the requirements regarding safety distance for buildings requiring erection of scaffolding for large-scale repair works. Subject to the findings of that study, it is proposed that the BA may prescribe requirements regarding the safety distance for buildings

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undergoing concurrent large-scale repair works (Table of Improvement Measures, Items B2(vi) and E4(i)). Q4. Internal and external communications (i) Internal communications between the BD and ICU under the delegation arrangement

1. The delegation arrangement between the BD and ICU, while conferring on the

ICU the full statutory authority to exercise building control over sold HOS estates, was not invariably accompanied by communication mechanisms sufficient to ensure that developments in the BD’s practice were promptly conveyed to the ICU.

1. In particular, the BD had adopted a practice of selecting 20% of Class I MW with

supervision plans for immediate site safety inspections by the site monitoring team from April 2023; the ICU was only informed of its existence until 22 December 2025, after the fire. The six-monthly liaison meetings between Head(ICU) and the Deputy Director of the BD covered mainly policy or overall operational issues and did not capture details of individual projects or new operational practice adopted by the BD’s teams. The Government acknowledges there is an area requiring improvements. (ii) Internal communications between the Police and FSD during the firefighting and rescue operations

1. The evidence demonstrates that the intended design for 999 call-handling

(immediate transfer to the FSD upon confirmation that a call relates to fire or rescue) was not consistently followed on 26 November 2025. In some cases, police operators collected information and asked questions before transferring calls to the FSD, causing callers to repeat information.

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• The rescue information-sharing mechanism between the Police and FSD relied in

part on fax or email. FSD will actively work with the Police to refine information exchange mechanisms, enhancing the efficiency of both departments in handling emergency calls (Table of Improvement Measures, Item A12(ii)).

• The Government acknowledges that the deviation between the intended design

and actual practice is a joint FSD-Police issue requiring resolution. A joint review of 999 call-handling procedures is being conducted, encompassing the elimination of duplicated questions. (iii) Internal communications across departments and referrals of complaints / enquiries – the roles of the 1823 hotline, the HAD and other relevant Government Departments under ToR 1 in referring complaints and enquiries to the appropriate Department(s) for handling

• Complaints and enquiries relating to the WFC renovation were received by

multiple departments, each of which processed the complaint within its own jurisdictional mandate and, where appropriate, referred it to another department.

• The 1823 hotline served as a general intake point, routing complaints to the

relevant departments. Departments also referred complaints laterally.

• The post-fire reforms introduce the establishment of inter-departmental

coordination mechanisms for large-scale renovation projects, including: the FSD's enhanced case referral and handling mechanism, under which the FSD will proactively refer fire safety cases to the most appropriate department (with the complainant’s consent), confirm that the referral has been taken over by the relevant department, and escalate any contested referral to Assistant Director or Deputy Director level for inter-departmental coordination (Table of Improvement Measures, Item A11); the newly-implemented notification mechanism between BD and LD whereby BD will regularly provide LD with information to facilitate 350

its timely safety inspections at buildings with scaffolding work and buildings issued with statutory notices (Table of Improvement Measures, Item E4(iii)); and the enhanced information-sharing within the RenoSafe framework. (iv) External communications with residents

1. The residents of WFC made complaints to multiple departments about safety

concerns over a period of months. The Government acknowledges that more transparent, accurate and informative communication with complainants would have been desirable and would have maintained confidence in the regulatory system. The reforms include enhanced complaint-handling protocols and the commitment to substantive responses that address the specific concerns raised. (v) External communications with building professionals

1. The primary mechanism for communicating regulatory requirements to building

professionals was through circular letters, practice notes and codes of practice published by the BD and LD. The evidence demonstrates that these communications were issued and updated (including after the Mariners’ Club and Chinachem Tower fires), and that reminder emails were sent to the RI of WFC specifically.

1. These communications relied on compliance by the recipients. Where the RI was

not discharging his supervisory function, the communications did not produce the intended effect.

1. The reforms address this by the ICU requiring RIs to submit regular site

supervision records during works (thereby creating a verifiable trail of supervisory activity) and by establishing regular ICU site inspections that provide an independent check on compliance during the works period.

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Q5. Status of technology application

1. A recurring theme across the contributing factors and firefighting operation is the

extent to which critical processes relied on manual, paper-based or technologically outdated systems that were inadequate for the challenges presented by a large-scale renovation site and the incident that followed.

1. In the area of FSI monitoring, despite the availability of an electronic submission

platform, the FSD’s FS251 processing was approximately 95% paper-based, with certificates submitted by hand, fax or post and subject to time lags of up to eleven months between signing and inputting into the LIFIPS database. The consequence was that the FSD’s monitoring system did not reflect the real-time status of FSIs at any given building, and anomalies such as the near-simultaneous submission of Victory Fire’s FS251 and China Status’s first SDN could not be detected in a timely manner. The SDN extension mechanism similarly operated through paper submissions without automated alerts or escalation triggers, such that 16 consecutive extensions over 7.5 months passed without generating any system- level flag.

1. In the area of construction material verification, neither the ICU nor LD possessed

any technological tool for authenticating FR test certificates. Verification depended entirely on visual inspection of paper documents furnished by the contractor. No database of accredited laboratories, no digital signature verification, and no equivalent anti-forgery mechanism existed. A certificate bearing a slightly altered laboratory name and a plausible standard reference was sufficient to pass every check.

1. In the area of site inspection, the ICU’s selection of inspection locations was

conducted manually rather than by computer-randomised allocation, creating at least a theoretical vulnerability to anticipation or manipulation by those subject

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to inspection. No digital monitoring tools were deployed for the ongoing supervision of scaffolding conditions, material usage or site safety at WFC or any comparable renovation site.

1. In the area of firefighting operations, the information relay from the FSCC to

frontline commanders relied on manual photography of computer screens and transmission via an instant messaging application. Frontline commanders received up to several hundred images in a single chat group during the WFC fire, each requiring individual attention. The Firefighter Location System was incapable of penetrating concrete above approximately the 23rd floor, rendering it ineffective for high-rise operations. The breathing apparatus communication system (VoiceCOM) lacked a direct link to handheld radios, producing unclear transmissions under operational conditions.

1. The Government acknowledges that earlier adoption of digital systems for FS251

processing, automated anomaly detection for SDN extensions, blockchain-based certificate verification, computer-randomised inspection selection, and enhanced firefighter communication and location systems would have been desirable. But for the delays in commissioning the 4th Generation Mobilising System, attributable in part to the pandemic and supply-chain disruptions, the 4th Generation Mobilising System would have been in service when the largest fire in Hong Kong’s history occurred.

1. The reforms now in progress represent a deliberate shift from manual, paper-

based processes to digital systems capable of real-time monitoring and automated anomaly detection. These include the mandate for electronic FS251 submission with QR-code generation upon receipt; the PNRC 85 requirement for encrypted, digitally signed test certificates from Government-designated accredited laboratories; the LD’s corresponding amendment of the Code of Practice for

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Bamboo Scaffolding Safety to incorporate BD’s latest requirements under PNRC 85; the ICU’s adoption of computer-randomised selection for inspection locations; the new dual-frequency FLS with height-differential display; the Interspiro BA system with integrated Spirocom radio connectivity; the 4th Generation Mobilising System with 100 lines and automated simultaneous information relay; and the introduction of SMS location sharing and a video evidence collection platform for the public. Collectively, these reforms are designed to eliminate the manual vulnerabilities that the WFC fire exposed and to equip the regulatory and operational framework with technological capabilities commensurate with the risks it is required to manage. R. THE GOVERNMENT’S SUBMISSIONS IN CONCLUSION OF TOR 1 R1. Conclusions on the direct causes of the fire, spread of fire and heavy casualties

1. On the basis of the evidence before the Committee, the Government submits that

the following conclusions are supported on the balance of probabilities.

1. The fire most probably originated from a glowing source, such as a lit cigarette

end, igniting combustible materials accumulated on the flat roof outside Flats 104 and 105 of Wang Cheong House. The windy and dry weather conditions (relative humidity approximately 40%, Red Fire Danger Warning in effect, east-to- southeast wind approximately 14 km/hr) contributed to the development of the fire, but it was the abundant presence of combustible materials at the point of origin and the presence of suspected non-FR materials in the re-entrant space that allowed the fire to grow in size, intensify and rapidly spread.

1. The rapid vertical spread of the fire was driven by the chimney-like configuration

of the re-entrant, which confined and directed rising smoke and hot gases upward, and by the large quantities of combustible materials and suspected non-FR

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materials accumulated within the re-entrant across multiple levels, including scaffolding nets that are uncertified for and potentially lacking FR properties, non-FR canvas on catch-fans, wooden planks, toe-boards and nylon strips. The presence of safety nets potentially lacking FR properties was a critical factor: in small fire size cases, the CFD simulations demonstrated that with FR-certified nets the fire could not sustain itself, whereas with non-FR nets the result was significant fire spread and severe fire development. The non-FR canvas on catch- fans allowed small fires to escalate into widespread, intense blazes, and trapped embers and burning debris rather than performing their intended protective function. Furthermore, the combustion of non-FR or potentially non-FR safety nets, canvas, toe-boards, and etc. generated flaming droplets which dripped onto lower levels, serving as ignition sources for other combustible materials below, while wind-carried embers (burning fragments light enough to travel considerable distances) were lifted by the intense flames from the re-entrants and carried to the façades of adjacent buildings, where they ignited safety nets, construction debris and other combustible materials.

1. The horizontal spread of fire from Wang Cheong House to adjacent blocks was

caused by secondary ignitions via wind-carried embers, flaming droplets from melting safety nets, and falling burning debris. Within a two-hour period, 11 instances of rapid vertical fire spread were observed at various re-entrants across multiple buildings, and it is conservatively estimated that more than 470 units were affected within that timeframe.

1. The heavy casualties resulted from the combination of five factors that drastically

shortened the available safe egress time while simultaneously increasing the required safe egress time: rapid and extensive fire spread leaving residents with limited time to evacuate; fire-damaged combustible scaffolding collapsing and blocking exits at ground level; failure of fire alarms in all eight blocks depriving

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residents of timely warning; polystyrene window covers obstructing residents’ awareness and delaying their response; and compromise of the means of escape through access openings in staircases that permitted smoke and heat to infiltrate protected escape routes.

1. The re-entrant design of the buildings (dating from 1983) and wind conditions on

the day of the fire were environmental factors beyond anyone’s control that amplified the consequences. These factors explain why the fire, once started, developed with such extraordinary speed; they do not explain why the combustible loading, non-compliant materials, fire alarm shutdown and compromised escape routes existed in the first place. Those conditions were the result of human conduct. R2. Conclusions on responsibilities of professionals and other non-governmental parties

1. The Government invites the Committee to find that the primary responsibility for

the direct causes of the fire, its rapid spread and the heavy casualties lies overwhelmingly with private actors, specifically: 967.1. Prestige as main contractor, whose multiple acts of non-compliance, deception and misrepresentation across all five contributing factors were the direct and proximate cause of the hazardous conditions; 967.2. Will Power purportedly providing RI services and Ng Yeuk, the RI, whose complete failure to discharge statutory supervisory obligations permitted Prestige’s wrongdoings to continue unchecked throughout the renovation period;

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1. 3. China Status, whose submission of incomplete and misleading

notifications to the FSD concealed the full extent of the FSI failure from the regulatory authority; 967.4. Victory Fire, whose failure to notify the FSD upon discovering the empty water tank and fire alarm shutdown in October and November 2025 was a lost opportunity to trigger the FSD’s contingency measures during the critical weeks before the fire; and 967.5. ISS, whose issuance of unlawful job orders, failure to coordinate between RFSICs, and passive handling of complaints facilitated and compounded the primary failures.

1. The Government further invites the Committee to find that these private-actor

failures were not isolated or coincidental but formed a pattern of collaborative and mutually reinforcing wrongdoings. R3. Conclusions on the Government’s systemic and operational issues

1. The Government acknowledges that the evidence before the Committee reveals

areas requiring improvements in the regulatory and supervisory framework with the result that the private actors’ wrongdoings went undetected before the fire. These areas gave rise to conditions in which the primary causes could operate without detection or intervention.

1. The Government sets out below its conclusions on the systemic issues, framed in

general terms as areas for improvement in the framework’s design or execution rather than as judgements on individual bureaux and departments. This framing reflects the Government’s position that the responsibility for systemic reform lies with the Government collectively, and that the reforms introduced since the fire have been developed and implemented on a cross-departmental basis.

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(i) The weaknesses of the self-regulation regime for the supervision of building professionals under the MBIS and MWCS, and RFSICs

1. The self-regulation model, while sound in principle and effective in the majority

of cases, proved inadequate when confronted with professionals who were either actively complicit in the contractor’s wrongdoings and/or were negligent to the degree of complete abdication. The evidence demonstrates that in certain segments of the building maintenance sector, the role of RI has been reduced to a mere formality: a professional appointed to satisfy statutory requirements without exercising any or any meaningful supervision. This phenomenon, described in the evidence as reflective of an “industry practice” in certain areas, represents an area for improvement of the professional self-regulation on which the MBIS and MWCS depend.

1. In the opening address [Day 2/73-83], the Committee was taken to evidence

illustrating this phenomenon in the case of the RI for WFC: 972.1. WhatsApp conversations between Ng Yeuk and his full-time employer in which he described his role at Will Power as being “limited primarily to signing prescribed forms and inspection reports that were made available to [him], rather than actively engaging in MBIS works or related repairs, including those for [WFC]” [A2/item 170]; 972.2. Conversations between Ng and a middleman discussing the arrangement of freelance RI work on the basis of ‘just going through the motions’ and backdating documents [A2/items 171, 173.1]; 972.3. A “Bonus List” file recording that between 1 October and 10 November 2025, Ng signed 84 forms involving 56 different projects, including WFC (listed at $150M with a $150,000 bonus), with the only activity recorded

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being the signing of various statutory forms on batch dates [A2/item 174]; and 972.4. The transfer of Will Power shares to Wong Hap Yin on the evening of the fire [A2/173.2, 175].

1. This evidence, if accepted, demonstrates that the RI for WFC exercised no

meaningful supervision whatsoever over the renovation works, and that his appointment served solely to satisfy the statutory requirements on paper.

1. The fact that the authority did not detect professionals’ wrongdoings is a result of

the audit rates and verification mechanisms described above. The unreliable test certificate provided by Prestige passed through the LD’s and ICU’s review without detection because neither body had the basis or mechanism to authenticate the document against the issuing laboratory. (ii) Areas for improvement concerning the audit checks and inspections to identify risks and problems

1. The audit-check mechanisms under the MBIS, MWCS and FSI regimes operated

on statistical sampling bases with rates that, while appropriate for quality assurance in a population of generally compliant professionals, were insufficient to detect deliberate and coordinated concealment.

1. The audit mechanisms were designed to assess compliance across the system as

a whole rather than to monitor individual projects. Where no complaint was received and no audit selection occurred, there was no sufficient mechanism for detection regardless of the severity of the non-compliance. The absence of any requirement for site inspections by the ICU during the course of MBIS-related works meant that the works period between commencement and completion was a period during which supervisory oversight was limited, filled only by

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complaint-driven responses. The practical consequence may have been that, in the absence of complaints, the system’s reliance on statistical sampling left owners and the IO as the only parties with day-to-day visibility of conditions on site. (iii) Inadequacies in the relevant procedural guidelines, codes of practice, etc.

• The prescriptive content of the regulatory framework also contained inadequacies

that hindered enforcement. No specific standard existed for temporary window protection materials. No standard existed for toe-board fire retardancy. The general language of section 16 of the B(C)R (“appropriate precautionary measures”) provided insufficient specificity for compliance and enforcement actions in the absence of a defined benchmark. The 1979 Code of Practice applicable to WFC’s FAS did not require warning labels on the main power switch. (iv) Weaknesses in internal communications and exchanges between the BD and ICU under the delegation arrangement

• The delegation arrangement gave the ICU the statutory authority to exercise

building control over sold HOS estates, but the communication mechanisms accompanying that delegation were areas requiring improvements to ensure real- time alignment of operational practice. The six-monthly liaison meetings covered policy-level matters and did not descend to the operational detail necessary to identify practice divergences. (v) The trailing in the use of more advanced technologies to assist work and/or manage risks

• The evidence also demonstrates that several critical processes (FS251 submission

and processing, the FSD information relay during operations, the ICU inspection location selection, firefighter location tracking in high-rise buildings) relied on 360

manual or technologically outdated systems that were inadequate for the challenges presented by a major incident at a large-scale renovation site. R4. Executive summary of improvements and immediate steps taken by the Government after the fire

1. Since the fire on 26 November 2025, the Government has implemented a

comprehensive programme of immediate improvement measures while simultaneously developing medium-to-long-term structural changes. This paragraph provides a consolidated summary; the detail is set out in the relevant sections above and in the Government’s Table of Improvement Measures.

1. In the area of FSI: the FSD has mandated prominent notices of FSI shutdowns at

each lift lobby floor and mailbox notifications to residents (Table of Improvement Measures, Item A8) [B14/6235]; required tamper-evident seals on FSI power switches (Table of Improvement Measures, Item A8) [B14/6235]; established that FSI must be inspected and repaired before major renovations commence (Table of Improvement Measures, Item A3); completed functional tests on FSIs in 461 buildings undergoing major renovation by January 2026 (Table of Improvement Measures, Item A3); mandated electronic submission of FS251 forms by circular (Table of Improvement Measures, Item A9) [B14/6257]; established a Quick Response Team for FSI assessment during fires (Table of Improvement Measures, Item A4); created a two-way communication channel with the BD, ArchSD, HD and ICU for large-scale renovation projects (Table of Improvement Measures, Item A3); and initiated a pilot programme testing fire alarms in 1,500 to 5,000 older residential buildings (Table of Improvement Measures, Item A6). Legislative amendments are proposed to convert the SDN notification mechanism to an approval-based mechanism with a 60-day cap, to introduce a Responsible Person System for PMCs, to revise RFSIC registration

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to require periodic renewal, and to increase penalties for false or misleading certificates (Table of Improvement Measures, Item A10) [B14/6268-6326].

1. In the area of building safety and construction materials: the BD has issued PNRC

85 [J1-2/6200-6209] requiring encrypted and digitally signed digital test certificates for scaffolding nets, mandatory sampling before installation by Government-designated accredited laboratories, and random on-site inspection with immediate cease-work orders for non-compliance (Table of Improvement Measures, Item C1). The LD has since January 2026 been deploying its staff to support the BD’s work in taking samples of scaffolding protective nets (Table of Improvement Measures, Item E4(ii)). The BD has issued a circular in March 2026 [B13/5714-5719] expressly prohibiting the use of combustible materials including foam boards on external walls or windows (with a limited exception for temporary chiselling). The BD is reviewing the BO and considering legislative amendments to empower it to specify requirements over construction methods and make non-compliance with material safety standards a new offence (Table of Improvement Measures, Item B2(v)).

1. In the area of the MBIS and MWCS: the ICU has introduced site inspections at

least once every four months for large-scale MBIS renovation projects and has implemented the BD’s 20% site safety inspection practice for Class I MW with supervision plans. The ICU has increased the selection percentage to 30% for Class I minor works with supervision plans, effective since May 2026 (Table of Improvement Measures, Item B3(ii)(c)). The BD has also since December 2025 stepped up surprise inspections of large-scale building repair works sites at least once every six months (Table of Improvement Measures, Item B1).

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• In the area of strengthening the supervision of building professionals: the

Government is reviewing the BO and considering legislative amendments to require supervision of large-scale building repair works by third-party professionals, with submission of prescribed plans and supervision plans before commencement of works; to clarify the duties of building inspection and works supervision under the existing large-scale repair works regime with a view to breaking the chain of interests between inspection consultants and contractors; and to strengthen the causes for disciplinary actions and the factors for considering registration renewal for registered building professionals and contractors. The ICU has implemented measures mandating the submission of supervision proposals by RIs, stepped up random checks on RI site inspection records, and introduced regular in-person meetings with RIs and RCs to follow up on works progress and details (Table of Improvement Measures, Items B2(i), (iii), (iv) and B3(iv)). In addition, the BD, subject to further legal advice, aims to share BO convictions with Professional Registration Boards and professional bodies starting from the fourth quarter of 2026, thereby extending the existing referral mechanism which currently covers disciplinary records under the BO only (DEVB Paper §16 [WS23/2479]). The DEVB also agrees to the suggestion to require PBPs (including RIs) appointed to supervise repair works to declare before commencement of works that they have no conflict of interests with the RC appointed to carry out the prescribed repair; any false declaration may attract prosecution or disciplinary action and is considering to take this forward when reviewing the BO (DEVB Paper §21 [WS23/2481]).

• In the area of inter-departmental communication and coordination: the BD and

ICU have strengthened their communication mechanism through multiple measures, including rationalising the consultation mechanism so that all consultations (including verbal consultations) require endorsement by a directorate-level officer from the BD and are recorded in a designated database 363

for reference by ICU staff; increasing the frequency of regular working-level liaison meetings from an annual basis to a quarterly basis to discuss annual enforcement targets, enforcement and implementation details, as well as specific cases, so as to ensure consistency between the practices of the ICU and BD; expanding the content of the bi-annual reports submitted by the ICU to the BD to include the handling of specific cases, the review of communication mechanisms and training matters as standing agenda items; and establishing a mutual secondment mechanism between the BD and ICU to enhance mutual understanding of each other’s standard practices and culture (Table of Improvement Measures, Item D1). The ICU and FSD have established the two- way communication channel for large-scale renovation projects. The LD, BD and FSD are developing joint inspection arrangements for RMAA sites. The RenoSafe framework is being enhanced with expanded information-sharing. The FSD is also working with the Police to refine information exchange and 999 call- handling arrangements.

1. In the area of occupational safety and construction site management: the LD has

proposed a three-tier legislative reform to prohibit smoking at all construction sites and impose a fixed penalty of HK$3,000 on any person smoking at a construction site (amendment to Cap. 371), to empower an OSO to issue fixed penalty notices to a person who is committing or has committed the smoking offence (amendment to Cap. 600), and to impose a positive duty on contractors to take all reasonable measures to ensure that no person smokes or carries a lighted specified smoking product (e.g. cigarettes) or uses naked light to light a specified smoking product in a construction site (amendment to the CSSR) (Table of Improvement Measures, Item E1). The LD will revise the Code of Practice to specify material requirements for toe-boards and is exploring drone-assisted enforcement for the new smoking ban (Table of Improvement Measures, Items E1 and E2). Since 17 March 2026, the LD’s frontline staff has been directed to

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refer any non-conformity with the BD’s requirements on means of escape detected during site inspections to the BD and FSD for follow-up (Table of Improvement Measures, Item E5).

1. In the area of firefighting technology and operations: the new Interspiro BA

system with Spirocom radio connectivity was placed into service in January 2026. A new dual-frequency FLS system is in procurement. The FSD added 18 and 20 additional telephone lines in April and June 2026 respectively, bringing the total number of available lines to 68 (Table of Improvement Measures, Item A12(ii)). The 4th Generation Mobilising System with automated information relay is in testing. The EAS is being reconfigured for localised use (Table of Improvement Measures, Item 12(iv)). A steering committee on high-rise firefighting strategies has been established under the Deputy Director’s chairmanship.

1. The Government submits that this extensive cross-departmental programme of

improvement measures, in its breadth, its speed of implementation, and its structural ambition, demonstrates the Government’s commitment to ensuring that a fire of this nature cannot recur. The measures address not merely the specific failures exposed by the WFC fire but the underlying systemic vulnerabilities that permitted those failures to occur. They are designed to create a regulatory and supervisory framework that can withstand the deliberate and coordinated abuse of the kind that occurred at WFC, while preserving the foundational principles of private ownership and professional responsibility on which Hong Kong’s building management system is based. R5. The Government’s response to measures recommended by the Committee’s experts

1. The Committee’s independent experts made a series of recommendations in their

expert report. The Government is giving serious consideration to these recommendations.

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• The Government notes that the Committee is itself conducting further studies and

collating views from industry stakeholders and professional bodies on the matters raised by the experts. As the Chairman observed: “whatever recommendation that we make will be based on different considerations” and “the most important thing is we have to change our culture and to look at our risk — reassess our risk” [Day 27/100/19-24]. As the Chairman put it, “what we are trying to do is we put our heads together and reassess the risks and then we try to make it as best as we can and we cannot make it too ideal in that sense. Of course the experts from the academic area, they have other consideration, but you can rest assured that what we are suggesting is that we set the path forward. It will be debated, stakeholders’ interests, whatever, but I think what we are trying to do is try to raise awareness of the whole public about the risks associated with this kind of project in the future, especially with many people living, still living in the buildings” [Day 27/101/2- 13]. The Chairman further indicated that the Committee’s recommendations “should not detach too much from reality” and that “every site is different” [Day 26/54/25 – 55/1, 55/10]. The Government respectfully agrees with this approach: recommendations must be grounded in practical reality while addressing the risks that this fire has exposed, and the Government will continue to bear such considerations in mind as and when the Government receives and comes to consider the Committee’s recommendations in due course.

• Both the Committee’s experts and Prof Yuen of the IFITF converged on the

central importance of risk assessment as the organising principle for future regulation of temporary works in occupied buildings.

• The Committee’s experts recommended that “a well thought out and well-

designed risk-based methodology must be developed for approval of building maintenance and renovation works for all buildings in Hong Kong, enabling a bespoke building-specific temporary works solution to be implemented with 366

appropriate safety measures including potentially redundant fire safety installations” (IC Expert Report §7.4.1 [ER3/2255]). Prof Yuen endorsed the same principle: “in the area of risk assessment, I think it’s something that should be incorporated into monitoring, design and execution of work so that the parties will be alive to the risks in order to prevent incidents” [Day 26/51/10-13].

1. The Chairman’s observation during the hearing encapsulates the rationale:

“regulation by itself is not the end... Even if they pass regulations, it may still cause … you are actually proposing an actual project, you have to have a risk assessment” [Day 27/73/14-20]. As Prof Usmani lamented, “in Grenfell, they were not violating the regulations; they had passed the test and it still happened” [Day 27/47/13-15]. In a similar vein, the Chairman rightly cautioned: “In a way I think Grenfell taught us even with all the best legislation, it can still happen” [Day 27/100/24 – 101/1]. The lesson of both WFC and the Grenfell Tower fire is that compliance with legislation and prescriptive standards, while crucial, might not be sufficient. It might be inadequate or inapt where the combination of site- specific factors creates additional risks. Hence, the key lies in raising awareness on risk assessment, both within the industry and socially.

1. The risk assessment must not be a formulaic exercise. As Prof Usmani

emphasised: “Risk is a product of probability times consequence. So you cannot just look at — say the risk is reduced by reducing the probability of a fire happening. If you reduce the probability of a fire happening by fire-retardant materials, that’s fine. But if the consequence of a fire is going to be exceptionally high... then the risk is not just the probability that you have reduced but also the consequence” [Day 27/50/21 - 51/8]. Where the consequence of failure is catastrophic, the risk assessment must reflect that consequence irrespective of the assessed probability of ignition.

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• The Committee’s experts made a number of further recommendations covering,

inter alia, the prohibition of combustible materials in re-entrant spaces, a ban on simultaneous cladding of adjacent buildings, stricter approvals for renovation works involving re-entrants, fire-rated glazing for staircase and lift lobby windows facing re-entrant spaces, redundant FSI systems, enhanced monitoring, strengthened worker training, fire drills for occupants, and coordination with building management (IC Expert Report §§7.3.1(a)-(l) [ER3/2252-2255]). The experts also identified areas requiring further study and research, including the development of new lightweight non-combustible protective materials, bespoke redundant FSI systems for temporary works, and technology-driven monitoring solutions (IC Expert Report §§7.4-7.5 [ER3/2255-2256]).

• The Government notes that these recommendations are made from the

perspective of fire engineering experts, as Prof Usmani confirmed: “this is our — essentially a view from our professional background” [Day 27/99/7-9]. As the Chairman observed, the Committee’s eventual recommendations will necessarily take into account other socioeconomic considerations [Day 27/99/4-6], and will require further consultation with stakeholders. Prof Usmani accepted this, confirming that the recommendations are “interim in nature and will need further considerations” [Day 27/98/23-24] and that implementation will depend on feasibility studies and practical constraints [Day 27/100/12-17].

• The Government notes that a number of the experts’ recommendations are

already addressed by or consistent with the improvement measures set out in Section R4 above, including the BD’s prohibition on combustible materials on external walls or windows (March 2026 circular) [B13/5714-5719], the inter- departmental coordination mechanisms for buildings under renovation, and the enhanced site inspection regimes. Indeed, in a manner not dissimilar to the approach adopted by the Committee’s independent experts (by differentiating 368

into immediate and longer-term recommendations), the Government has introduced improvement measures which are categorized into short, medium and longer terms, many of which have already been introduced or are being introduced now, to avert the risk in future. The Government will also give careful and serious consideration to any eventual recommendations made by the Committee in its final report, and will continue to review and introduce further improvement measures as appropriate.

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PART IV: TOR 2 S. OUTLINE OF THE SYSTEMIC ISSUES AS IDENTIFIED FROM THE EVIDENCE

1. Before addressing the involvement of each Government body and related

institution under ToR 2, it is appropriate to set out the systemic issues as they emerge from the totality of the evidence before the Committee.

1. The Committee’s primary focus can properly be on the evidence available and

submissions made by the relevant parties.

1. The Government recognises (as indicated by the Chairman) that there may be

difficulties in making specific factual findings regarding certain aspects of the WFC tendering process - particularly where persons who may have direct knowledge have declined to give evidence or where matters are sub judice.

1. However, such difficulties need not prevent the Committee from discharging its

functions under ToR 2 and making relevant recommendations. This is consistent with the approach indicated by the Chairman at the evidential hearing on 8 May 2026, in which the Committee directed that the evidence received under ToR 2 mainly focuses on the WFC renovation works and does not cover other similar works in Hong Kong, and that the Committee will accordingly make reference to the conclusions of the reports submitted by relevant law enforcement agencies concerning ToR 2, and the information received from members of the public and organisations, as the basis for its findings of fact under this ToR.

1. The systemic issues identified in this section are drawn from the reports, witness

statements and oral evidence of the Competition Commission, ICAC, Police, URA, and HAD. They are not limited to the individual WFC project but extend to broader sector-wide patterns.

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S1. Bid-rigging and other anti-competitive / unlawful conduct – consultants / RIs and contractors

1. The evidence before the Committee establishes that bid-rigging in the building

maintenance sector is widespread, systematic and long-standing, encompassing multiple forms of anti-competitive conduct. The Competition Commission’s Report (“CC Report”) to the Committee states in terms: “The CC believes that there is indeed a widespread, systematic, and long-standing practice between some building maintenance contractors to affect the outcome of tenders for building maintenance works.” (CC Report to the Committee §12(1) [WS22/2451]).

1. In his oral evidence, Wong Se King of the URA confirmed this assessment: the

building rehabilitation market in Hong Kong has long been exposed to anti- competition behaviour and a lot of contractors and consultants are involved. [Day 21/93/2-9].

1. The Competition Commission has identified the following specific forms of anti-

competitive conduct in the sector: bid suppression (one or more contractors refraining from bidding); cover bidding (a pre-agreed “designated winner” supported by deliberately less attractive bids from others); bid rotation (a market- wide coordinated scheme in which members of syndicates facilitate each other’s chances of winning over a number of tenders); market sharing; information exchange; credential sharing; and phantom bidding (CC Report to the Committee §§12(1)(a)–(c), 12(3)(a)–(d) [WS22/2451-2453]).

1. The Competition Commission has further found evidence of syndicate-led cartels

with organised systems of “registration,” dissemination of pricing instructions (referred to by the syndicates as “homework”), and the presence of ring-leaders and coordinators. These syndicate-led cartels may involve dozens of building maintenance contractors and consultants. In different cases, the Competition

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Commission has observed syndicates working with, as well as competing against, each other to affect the outcome of a tender (CC Report to the Committee §3(5) [WS22/2445]).

1. A central structural feature of the problem identified by both the Competition

Commission and ICAC is the facilitation of contractor bid-rigging by consultants and RIs. The model operates as follows: a consultant wins appointment at below- cost fees, then steers the renovation contract to an affiliated contractor at an inflated price. The Competition Commission’s Report describes this practice: “These practices are sometimes facilitated by the consultants that are supposedly independently engaged by the owners / incorporated owners of a building. In these cases, the consultants may, in exchange for compensation (whether by way of outright payment or by taking a ‘cut’ from the final project works), agree to favourably recommend a building maintenance contractor for the owners and IO to select.” (CC Report to the Committee §12(2) [WS22/2451]).

1. The ICAC’s Report confirms that in several of its investigated cases, “the RI

appointed by the consultant to oversee the project was in fact a mere dummy, who exercised little or no supervision over the project, and was only appointed to satisfy the statutory requirements imposed under the BO.” (ICAC Report §95 [WS10/1979]). Wong Se King of the URA confirmed in oral evidence that there is no effective mechanism to handle the situation where RIs use unreasonably low prices to win service contracts and then assist contractors to inflate the price. [Day 21/102/16-24].

1. WFC is one of at least 11 housing estates and buildings targeted by the bid-rigging

syndicate in the Competition Commission’s March 2026 Competition Tribunal proceedings. The tender period alleged (April 2022–September 2023) corresponds to the period of contractor tendering at WFC. The total value of the

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relevant contracts across the 11 buildings is estimated at close to HK$700 million (CC Press Release (25 March 2026) [U2/164]).

1. The Competition Commission confirms that all relevant consultancy and

contractor tenders at WFC contained non-collusion clauses (“NCCs”) and that most bidders executed non-collusive tendering certificates (NCTCs) (CC Report to the Committee §26 [WS22/2458]). The significance of this finding is that any person who was knowingly party to a collusive arrangement rendering the representations in the NCTC false may be criminally liable for conspiracy to defraud (CC Report to the Committee §§24–25 [WS22/2457-2458]). This demonstrates that preventive tools were in fact deployed at WFC; the wrongdoing is attributable to private actors who deliberately subverted the existing safeguards.

1. The Competition Commission and ICAC, and Police, have identified triad

involvement in the building renovation sector. The Competition Commission has encountered cases where threats of or actual violence were used to compel bidders to withdraw or follow syndicate instructions, and where building maintenance contractors affiliated with the same triad society coordinated their bids (CC Report to the Committee §§12(4), 3(6) [WS22/2445-2446, 2453]). The ICAC’s assessment is that “organized syndicates, employing illicit methods such as corruption, triad tactics, bid-rigging and fraud to manipulate the tendering processes, are driven by the potential profits to seek a dominant market share.” (ICAC Report §99 [WS10/1980]).

1. The Police also offer an important qualification: while triad involvement takes

many forms (direct involvement and discreet approaches through front persons, influence over “concern groups”, participation via indirect links with consultants or contractors), it may be inaccurate to assume triads are always the dominant driver. Many bid-rigging schemes are organised and executed by ordinary market

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players, with triad elements engaged only at particular stages, or not at all449 [WS1/287]. S2. Bribery – consultants / RIs and contractors bribing the relevant stakeholders, e.g. the PMC and members of the MC of the IO

1. The ICAC’s evidence demonstrates a consistent pattern in which contractors

bribe PMC staff and MC members through cash payments, unreasonably low consultancy fees, kickbacks, and materials supplier arrangements. These payments are designed to corrupt the procurement decision-making process at the IO/MC level.

1. The ICAC’s case studies provide detailed illustrations of this pattern. In one

investigated case involving a $262 million renovation project, a middleman admitted his role in assisting the contractor, confirming involvement of PMC staff, MC members and the consultant, with alleged kickbacks totalling approximately 17.5% of the project sum (approximately $46 million), paid in cash through middlemen and dummy companies (ICAC Report §§44–52 [WS20/2280-2282]).

1. The ICAC observes that “corruption, undeclared conflicts of interest, fraud and

bid-rigging are often hidden behind layers of intermediaries and shell companies… The illicit payments are customarily made in cash making it difficult to trace illicit funds, let alone proving its corrupt purpose.” (ICAC Report §96 [WS20/2287]). S3. Other misconduct or dishonest conduct in the tendering and quotation processes

1. Evidence from multiple sources identifies a range of dishonest conduct beyond

bribery and bid-rigging: preparation of inflated and misleading tender analysis

449 LAM Kai Chor (Supt, OCTB, Police) 1st WS §28

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reports; submission of false litigation records; use of below-cost consultant fees as a loss-leader to gain appointment and thereafter steer the renovation contract; unreasonably low manday estimates; use of dummy companies and shell companies; and false accounting records (ICAC Report §§45, 95 [WS20/2280, 2288]).

1. The ICAC identifies the typical modus operandi: “the contractor was often part

of a crime syndicate with triad connection, who would collude with the consultant and other contractors to rig the bids, corrupt members of the MC and PMC, or deploy other illegal means (e.g. faking proxies) in order to manipulate the selection of the contractor for the project.” (ICAC Report §95 [WS20/2286]).

1. In the context of WFC specifically, evidence before the Committee indicates that

Prestige submitted litigation records certified to show “no record of being sued by IOs and management companies” in the past seven years, but a post-fire litigation search returned 108 results including prior judgments and sentences; the submitted records “at least” appear incomplete450 [WS18/2221-2222]. S4. Abuse of the proxy system

1. Both the ICAC and Police have identified manipulation and falsification of proxy

instruments at owners’ meetings as a common tool for achieving corrupt outcomes in contractor and consultant selection. The proxy system creates structural vulnerability given the collective decision-making framework of Owners’ Corporations.

1. The ICAC reports that in one investigated case, suspects “might have assisted the

MC Members to collect proxies from some property owners, in order to facilitate them to manipulate voting at the owners’ meetings to achieve outcomes in their

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favour.” (ICAC Report §§68–72 [WS20/2283-2284]). The same Report records that “in respect of the investigation by the Police on proxy manipulation, it was understood that no prosecution was initiated as there was no evidence to prove who had handled or submitted the proxies in question.” (ICAC Report §§68–72 [WS20/2283-2284]).

1. The ICAC further observes that faking proxies is one of the “illegal means”

deployed by syndicates “in order to manipulate the selection of the contractor for the project.” (ICAC Report §95 [WS20/2286]).

1. The Building Management (Amendment) Ordinance 2024 (effective 13 July 2025)

introduced enhanced requirements for declarations of interest in the context of large-scale procurement. The HAD has proposed further improvement measures to the proxy system, including a potential cap on the number of proxies an individual may hold and a posting requirement. These measures are addressed in Section U3(ii) below. S5. The failure of the PMCs in discharging their duties

1. The ICAC identifies property management companies as structurally positioned

to exert corrupting influence over procurement decisions, given their operational proximity to OC meetings, voting arrangements, and tendering processes. The ICAC Report states: “In the context of building renovation projects, PMCs and PMC staff play key roles alongside other stakeholders. Their operational proximity to both building renovations and day-to-day building management functions, such as coordinating OC meetings and related voting arrangements, as well as administering tendering processes, places them in positions of considerable influence over procurement decisions.” (ICAC Report §13 [WS20/2268]).

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• PMCs’ conflicts of interest are frequently undisclosed and inadequately regulated.

In one ICAC case study, “the MC confirmed that they had no system in place to deal with such conflicts of interest.” (ICAC Report §§84–88 [WS20/2285]). In another, a family member of the PMC proprietor had a financial interest in a materials supplier designated by the contractor (ICAC Report §§84–88 [WS20/2285]).

• The Building Management (Amendment) Ordinance 2024 (effective 13 July

2025), which now requires a responsible person for the procurement of large- scale building renovations to make a declaration of any pecuniary or other personal interest in relevant suppliers, represents a direct response to this identified vulnerability (ICAC Report fn.26 [WS20/2286]).

• More broadly, the Police observe that “homeowners are heavily reliant on

consultants for their professional advice in terms of building inspection, identifying suitable work options, tender analysis and subsequent supervision of works. As a result, consultants and contractors are rife with collusion, corruption and ‘silent agreements’, commonly found between organized crime groups”451 [WS1/287]. This observation encapsulates the structural vulnerability that PMC failures compound. 451 LAM Kai Chor 1st WS §31

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T. THE INVOLVEMENT OF THE GOVERNMENT AND RELATED BODIES T1. The URA

1. The URA is a statutory body established under the Urban Renewal Authority

Ordinance (Cap. 563), one of whose objectives under section 5 is to promote the maintenance and improvement of individual buildings in terms of structural stability, external finishes and fire safety452 [WS18/2209-2210].

1. In 2016, the URA Board approved the launch of the Smart Tender scheme as a

fee-based service specifically designed to reduce the risk of bid-rigging faced by building owners and OCs. The scheme was designed to address five categories of misconduct spanning the entire tendering process: internal collusion between MC members and bidders; manipulation of tender documents to filter out non- colluding bidders; bid suppression through selective invitation and obstruction; manipulation of the bid return and opening process; and manipulation of the tender analysis report453 [WS18/2210].

1. The WFC IO applied to join Smart Tender on 2 February 2018, and a bilateral

service agreement was signed on 16 June 2018 confirming the URA’s role as agent of the OC to assist in engaging the contractor454 [WS18/2224-2225]. RS Surveyors Limited (“RS Surveyors”) was assigned as the independent consultant under Smart Tender455 [WS18/2225].

1. At the time WFC joined Smart Tender in 2018, the e-tendering platform did not

extend to the engagement of RIs or consultants. Accordingly, the URA had no involvement in the tendering for Will Power as consultant (noting that Will Power cannot be directly engaged as RI in any event) and had no knowledge of the

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tendering arrangements456 [WS18/2225-2226]. The URA provided only limited assistance for the RI engagement: posting the tendering notice on the URA’s platform, and preparing a one-page tender price summary based on 24 tender materials provided by the OC, without any assessment of reasonableness of prices457 [WS18/2225-2226].

1. Similarly, the URA had no role in the tendering for the consultant in January 2020,

including preparation of tender documents, receiving and opening of tenders, and attending the bid opening on 20 January 2020. The OC also declined the URA’s offer to use the e-tendering platform for the consultant appointment 458 [WS18/2227].

1. The role of RS Surveyors as independent consultant under Smart Tender appeared

to be defined and limited: to prepare preliminary assessment reports, an independent cost estimate (sealed until bid opening), and a returned tender analysis report. RS Surveyors did not comment on the reasonableness of optional works items, the choice of materials, or the pricing strategy of tendering consultants and contractors. RS Surveyors confirmed in its reply to the Committee that its role was “limited to preparing the cost estimate based on the draft tender documents” and that it did not conduct independent verification of tenderers’ backgrounds or connections, as “such verification falls outside the scope of our appointment as an independent consultant under the Smart Tender Scheme” [WS21/2341-2342]. Wong Se King confirmed in oral evidence that regarding anti-bid-rigging, the consultant had “very little role to play” because “at that stage tenders have already returned, we just need to make sure the tender is fair.” [Day 21/119/24 - 120/4]. He further confirmed that regarding collusion

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to conduct unnecessary works, “the consultant could not prevent this from happening.” [Day 21/122/9-20].

1. The Smart Tender e-tendering platform was used for the contractor procurement

in 2023. The advertisement went live on 16 May 2023; 99 contractors downloaded the final tender document; 57 tenders were submitted and opened on 5 July 2023 in the presence of a registered accountant and the OC’s representative; no tenders were withdrawn 459 [WS18/2230-2231]. The URA did not check associations among the 57 tendering companies in public records and accepted that this was not the URA’s responsibility; it relied entirely on the consultant (Will Power).

1. After the fire, the URA is developing an enhanced Smart Tender service (“Smart

Tender 2.0”) incorporating: a pre-qualified contractor list based on police and ICAC background screening; URA-conducted tender vetting replacing reliance on the consultant; and disclosure requirements for contractor shareholding connections. Wong Se King stated: “In the future we will also get involved in the vetting of tenders… In Wang Fuk Court there were 57 tenders. In the future we will go through all 57 tenders. In the past we relied on Will Power, but in the future we will take matters into our own hands” [Day 21/139/3 - 140/15].

1. In early December 2025, upon learning of law enforcement action against Will

Power and Prestige (including the arrest of their key personnel), the URA exercised its discretion under clause 13.1 of the Building Rehabilitation Company Registration Scheme Terms and Conditions Manual to remove their registrations in writing460 [WS18/2232].

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T2. The Competition Commission

1. The Competition Commission is the primary enforcement agency under the

Competition Ordinance (Cap. 619). In addition to its enforcement function, one of its statutory functions is to conduct market studies into matters affecting competition in markets in Hong Kong (CC Report to the Committee §§4–5 [WS22/2449]).

1. The Competition Commission’s 2016 market study identified suspicious patterns

consistent with widespread bid-manipulation in the building maintenance sector, including bids by consultants priced below the minimum cost of providing services — suggesting remuneration through other, possibly nefarious, means — and statistically anomalous frequency of certain consultants working with certain contractors (CC Report to the Committee §7 [WS22/2449-2450]). These findings pre-date the full commencement of the Competition Ordinance and demonstrate that the structural problem in the sector was already well-documented well before the WFC fire.

1. Between 2016 and 2019, the Competition Commission successfully brought three

enforcement actions against 18 undertakings and 5 individuals for anti- competitive conduct (price-fixing and market sharing) in the decoration and renovation sector, obtaining declarations of contraventions, pecuniary penalties, and director disqualification orders (CC Report to the Committee §9 [WS22/2450]).

1. From 2022 onwards, the Competition Commission conducted five major

investigations into the large-scale building maintenance sector in coordination with the Police’s Organised Crime and Triad Bureau, covering at least 68 residential estates, 15 industrial estates, and 64 companies (CC Report to the Committee §10 [WS22/2450]).

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• In January 2024, the Competition Commission received a referral from the ICAC

regarding a newly-rising syndicate and thereafter conducted two joint operations with the ICAC in April and August 2024, leading to the filing of proceedings in the Competition Tribunal in March 2026 (CC Press Release (25 March 2026) [U2/164]). WFC is one of the 11 named buildings in those proceedings.

• The Competition Commission’s case in the March 2026 proceedings is that the

bid-rigging syndicate comprised several contractors and middlemen, was operated by a mastermind who scouted for target building maintenance projects and selected syndicate contractors to bid for those tenders. In any given tender, contractors were assigned either to be the “main character” (the syndicate’s designated winner) or “helpers” (those responsible for providing cover bids), and pricing instructions (“homework”) were prepared and distributed (CC Press Release (25 March 2026) [U2/161]).

• The Competition Commission recommends the following legislative reforms:

amending the Competition Ordinance to stipulate the civil standard of proof in pecuniary penalty proceedings; incorporating statutory presumptions; clarifying that the Commission need not prove bid-rigging was “not made known” to the tendering body; increasing penalties and director disqualification periods; and requiring Statutory Declarations in large-scale tenders to facilitate criminal prosecution (CC Report to the Committee §§28–32 [WS22/2458-2460]). The Competition Commission has also completed preparing an enhanced version of the NCCs (i.e. the Non-Collusion Clauses) for procurers to incorporate into their tender documents and procurement contracts, including adding a clause explicitly stating that violating the NCC may constitute a criminal offence, and introducing additional terms requiring bidders to make a Statutory Declaration affirming the warranties within the NCC. The enhanced NCC is expected to launch soon (Table of Improvement Measures, Item G4). 382

T3. The ICAC

1. The ICAC has statutory responsibility under the ICAC Ordinance (Cap. 204) to

investigate corrupt practice, examine government procedures conducive to corruption, and educate the public against corruption (ICAC Report §§1–3 [WS20/2263-2264]). It has adopted a three-pronged strategy (enforcement, prevention, education), specifically targeting the building renovation sector.

1. Corruption complaints regarding building management and maintenance issues

have for many years accounted for approximately 25% of all complaints made to the ICAC each year. Focusing on complaints regarding building renovations over the last three years (2023–2025), the ICAC received 239 complaints, of which 220 (92%) were formally investigated (ICAC Report §§33, 34, 38 [WS20/2276- 2278]).

1. Despite 137 arrests in 2023–2025, criminal prosecution rates are low due to the

inherent nature of corruption in this sector. The ICAC explains: “Criminal activities in building renovations are inherently difficult to investigate and prosecute despite protracted investigative efforts, due to its secretive and syndicated nature. Corruption, undeclared conflicts of interest, fraud and bid- rigging are often hidden behind layers of intermediaries and shell companies. Infights and disputes always complicate the issue. The illicit payments are customarily made in cash making it difficult to trace illicit funds, let alone proving its corrupt purpose. Potential witnesses, if any (including property owners or junior staff members of contractors, consultants and PMCs), may fear retaliation especially when triads are involved.” (ICAC Report §96 [WS20/2287]).

1. The ICAC’s Community Relations Department reached over 4,600 people from

over 870 building management bodies annually and issued over 4,000 letters to

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building management bodies over three years, though the average response rate has remained low — “reflect[ing] the generally low level of interest in BMM matters among property owners and other stakeholders.” ICAC Report §28 [WS20/2273]. The ICAC’s Corruption Prevention Department has provided recommendations to the HAD on legislative amendments to the BMO, including enhancement to procurement requirements and improvements to proxy arrangements (ICAC Report §29 [WS20/2275]).

1. Because of the high threshold for prosecution, the ICAC also deploys early

intervention to alert building owners to risks and frustrate syndicates before they execute their schemes. Over three years, 20 early interventions were carried out covering 32 buildings and estates (ICAC Report §42 [WS20/2279]).

1. The ICAC’s summary assessment is stark: “This high-value environment

operates largely within a framework that is built on an honour system, which relies on trust and integrity on the part of the consultants and contractors to function. It however contains inherent and apparent structural vulnerabilities.” (ICAC Report §98 [WS20/2288]). The result is “a self-perpetuating cycle: the withdrawal of ethical professionals further distorts the ecosystem in favour of nefarious elements, limiting choices for property owners and entrenching the dominance of problematic service providers. This cycle cannot be broken and reversed without targeted intervention.” (ICAC Report §100 [WS20/2288]).

1. As at December 2025, based on the then available survey results only 128 out of

approximately 600 registered RIs had expressed interest in providing MBIS services. The small pool of RIs available in the building renovation market heightens their vulnerability (ICAC Report §21 [WS20/2271]).

1. Further statistics of RIs providing services in the MBIS were submitted to the

Committee by the BD in its Third List of Documents dated 1 June 2026. In

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summary, according to the BD’s record as at 31 December 2025 [J3/7978], “there were 632 RIs, of whom some 400 had handled or are handling works related to MBIS notices. On average in the past five years, 233 different RIs submitted specified forms for the MBIS each year.”

1. Between February and May 2026, the ICAC mounted three further major law

enforcement operations against corrupt syndicates targeting building maintenance projects, including Operation “Lion Rock” and Joint Operation “Scabbard” with the Police (ICAC Report post-report note [WS20/2289]).

1. The Government notes the convergence of the ICAC’s analysis with that of the

Competition Commission and Police: the building renovation market is infiltrated by organised syndicates exploiting structural vulnerabilities in the regulatory and facilitative ecosystem. The ICAC’s three-pronged strategy is also consistent with the Government’s broader reform programme. T4. The Police

1. The Police’s involvement in ToR 2 matters falls under the Organised Crime and

Triad Bureau (“OCTB”) and encompasses: the inter-departmental RenoSafe scheme; intelligence-gathering and referrals on organised crime and triad involvement in building maintenance; and their views on legislative reform461 [WS1/281].

1. RenoSafe was launched on 4 September 2013 as an inter-departmental publicity

and education campaign by a working group initiated and chaired by the OCTB, in response to the potential infiltration of building maintenance works by criminals including triads462 [WS1/282]. Standing members of the working group

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currently comprise the Police, BD, Competition Commission, EMSD, FSD, HAD, ICAC, PMSA, and URA463 [WS1/282].

1. RenoSafe members operate a risk assessment matrix (seven factors producing

high, medium and low risk ratings), a 24-hour police hotline (2527 7887), periodic inter-departmental briefings, and a building enrolment system. Since its launch in September 2013 until 31 January 2026, the Police paid visits to a total of 7,100 buildings, of which 3,055 were enrolled in RenoSafe; 148 briefing sessions were conducted; and 345 enquiries were received by the police hotline464 [WS1/283-286].

1. The existence and growth of RenoSafe since 2013 evidences an inter-

departmental coordination mechanism for building maintenance-related crime has been in place for over a decade. RenoSafe’s remit was focused on publicity, education and crime prevention rather than more specifically on site safety supervision, and recent reviews have identified potential areas for improvement.

1. The Police proposes enhanced information exchange among RenoSafe members

covering: large-scale maintenance works arising from statutory inspection and repair orders; tender information of subsidised building maintenance works; building maintenance works that repeatedly seek extensions of deadlines for compliance; and building management or maintenance work related complaints against building representatives465 [WS1/288-289].

1. The Police’s view on organised crime and triad involvement, based on

observation, experience and reliable intelligence, is that triad involvement takes many forms but it would be inaccurate to assume triads are always the dominant

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driver. Many bid-rigging schemes are organised and executed by ordinary market players, with triad elements engaged only at particular stages or not at all. When the use of suppression or violence is essential, triads then become the “enforcer”. Intelligence indicates that a small number of triads had set up and were operating their own consultant and contractor companies466 [WS1/287].

1. The Police considers that the current civil penalty regime under the Competition

Ordinance (Cap. 619) may not outweigh the potential gains from prohibited conduct, and proposes bespoke criminal legislation with clearly defines fiduciary duties for MCs, consultants and contractors. The Police further recommends immunity provisions and statutory informer protection to improve evidence gathering467 [WS1/289-290].

1. The Government notes the convergence of the Police’s proposals with those of

the Competition Commission and ICAC.

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U. THE ROLES AND RESPONSIBILITIES OF THE HAD U1. The regulatory context for the HAD’s involvement (i) The HAD’s roles and responsibilities in facilitating building management

1. The HAD’s role in building management is facilitative, not supervisory. The

foundational policy principle is that the right to private property carries with it the inherent responsibility for its proper management, including up-keeping and maintenance. Government intervention in private property management should be premised on safeguarding public interest, and should be exercised with caution and restraint given the right of private ownership468 [WS1/486].

1. The SHYA is the statutory Authority under the Building Management Ordinance

(Cap. 344), and the HAD is her executive arm469 [WS1/486]. The HAD, through its DBMLTs in each of the 18 District Offices, provides the following services to OCs and owners: assisting in OC formation; attending owners’ meetings upon invitation and providing advice according to the BMO; advising parties of non- compliance and requesting rectification; answering BMO enquiries; and organising training and briefings for MC members and owners470 [WS1/487].

1. The HAD has established a Central Platform on Building Management since 2018,

organising monthly briefings for OCs and owners at which relevant government departments (including the BD, FSD, EMSD, LD, and Police) and institutions (including the ICAC, URA and Competition Commission) introduce their services and schemes on building management and maintenance, including briefings on bid-rigging471 [WS1/489]; [Day 24/3/20 – 4/16].

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• The HAD also provides dispute resolution services through mediation and

advisory panels. These services were made known to WFC owners but were not taken up by any resident or owner. [Day 24/5/4 – 6/4].

• When attending owners’ meetings, HAD representatives maintain impartiality

and professionalism, offering advice solely on BMO provisions, especially those governing procedures relating to the conduct of owners’ meetings and rights and powers of the IO and owners472 [WS1/505].

• The appropriate level of HAD assistance therefore depends on the specific

circumstances of the building. In the case of WFC, the HAD’s role was primarily to advise on meeting procedures and BMO matters. [Day 20/114/10-23]. (ii) The HAD’s powers under the Building Management Ordinance (Cap. 344)

• Section 40A of the BMO empowers the SHYA or an authorised officer to inspect

common parts of a building, attend OC general meetings, and inspect or obtain copies of OC budgets, accounts, documents and records, for the purpose of ascertaining how a building is being controlled, managed or administered 473 [WS1/492]. This power serves mostly as a “last resort” for exceptional cases. Deputy Director Te Chi Wang confirmed in oral evidence that “under most circumstances, the parties would be cooperative, they would provide you with information, you do not need to invoke section 40A.” [Day 24/19/23 - 20/3].

• Section 31 of the BMO empowers the Lands Tribunal, upon application by

(among others) the SHYA, to dissolve the MC and appoint an administrator. This power was invoked for the first time in relation to WFC on 6 January 2026, when Hop On (a subsidiary of the Chinachem Group) was appointed as administrator. 472 CHAN Hau-man 1st WS §7 473 TE Chi Wang 1st WS §§21-22

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DD Te confirmed: “I think this is unprecedented. That is the first time we invoked 31(1)(d).” [Day 24/21/5-19].

1. The BMO does not confer on the HAD a power to compel the OC chairman to

convene a meeting. Where the chairman refuses, the remedy available to owners is to apply to the Lands Tribunal [Day 24/12/15-25]. Or Wai Yin acknowledged this: “if the chairman refused to hold a meeting, there was nothing you could do.” [Day 20/105/5-12]. This is a statutory constraint that manifested directly in the WFC experience.

1. Similarly, the BMO does not confer on the HAD a prosecution power for general

non-compliance with building management obligations. The HAD’s enforcement tools are limited to advisory letters, verbal reminders, and (in the context of the present case) the exceptional resort to section 40A or section 31. [Day 24/24/22

• 25/12].

U2. The conduct of the relevant WFC IO / disputes and challenges, and the HAD’s involvement at different stages (i) The stage of compliance with the MBIS and engagement of Will Power as the consultant providing RI services

1. The Tai Po District Office (“TPDO”) attended the 21st Annual General Meeting

of the IO of WFC held on 25 January 2019, during which Will Power was appointed as the inspector. No irregularity was observed by the attending TPDO representative474 [WS1/507].

1. TPDO was not involved in the appointment of Will Power or the conduct of the

MBIS inspection. According to file records and confirmation with the relevant TPDO colleagues, TPDO had no role in respect of Will Power’s appointment or

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the subsequent inspection carried out by that firm 475 [WS1/507]. This is consistent with the HAD’s facilitative role. (ii) The stage of renovation design and project procurement, and engagement of Will Power as the consultant for the subsequent renovation works

1. TPDO was not consulted on and had no involvement in the tendering for Will

Power’s appointment as renovation consultant [WS1/508].

1. According to file records, TPDO had not been “consulted or approached to seek

or ask to give advice in respect of the tendering process for appointment of consultant for the Wang Fuk Court Renovation and/or the eventual appointment of WP as consultant” 476 [WS1/508]. Nor did TPDO receive any complaints about the reasonableness or propriety of Will Power’s consultancy bid477 [WS1/508]. The HAD’s primary objective in this context is to safeguard the procedural transparency of the bid selection process; it was not in a position to form a view on the reasonableness of any bid or consultancy fee, but remained vigilant in referring reports of irregularities, had any been received, to the appropriate enforcement bodies478 [WS1/508].

1. Earlier disputes among owners in the second half of 2021 were known to TPDO.

A group of owners dissatisfied with the then MC attempted to remove members of the MC by convening a meeting at the request of not less than 5% of owners. TPDO responded to 16 phone enquiries regarding meeting procedures 479 [WS1/508]. The resolution to remove MC members was not successful at the EGM held on 11 December 2021. It did not come to TPDO’s attention that there

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was any irregularity regarding improper gathering of proxy votes or exclusion of residents from attendance at the meetings during this period480 [WS1/508-509]. (iii) The stage of contractor tendering and selection

1. The EGM of 28 January 2024 was the critical juncture at which Prestige was

appointed as contractor for the WFC renovation works. The meeting was held at the basketball court in WFC and was attended by Or Wai Yin of TPDO481 [WS1/529].

1. The resolution appointing Prestige was passed by a majority of 54.79% of the

owners’ votes482 [WS1/530]. At the same meeting, Option 3 for the renovation works (hacking off all original external claddings, carrying out concrete repair, adding waterproofing plastering, and covering external walls with new mosaic tiles and paint) was also passed by an 80.5% majority483 [WS1/530] [G1-1/1005].

1. Or Wai Yin confirmed that neither the MC, the IO, nor any residents of WFC had

consulted, sought, or received advice from the HAD before or during the meeting in respect of the appointment of Prestige as contractor. As far as she could observe, she “did not see any irregularity or non-compliance with the procedural requirements under the Building Management Ordinance” during that meeting484 [WS1/530].

1. Or Wai Yin’s attendance at the meeting followed the HAD’s standard practice.

She arrived approximately 15 minutes before the meeting to take a look at the background of the OC, checked whether notice postings were compliant, and observed registration to see “whether everything is smooth” and “whether there

480 CHAN Hau-man 1st WS §§16-17 481 OR Wai-yin (Liaison Officer, HAD) 1st WS §6 482 OR Wai-yin 1st WS §7 483 OR Wai-yin 1st WS §9 484 OR Wai-yin 1st WS §8

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is any suspicious behaviour” [Day 20/115/10-20]. She observed that 57 potential contractors were listed [Day 20/115/16-17].

1. The initial attendee count of 293 was announced by the MC at the commencement

of the meeting [Day 20/93/2-7]. The subsequent increase in votes from the initial count of 293 to approximately 570–590 at the time of voting drew resident complaints. Or Wai Yin followed up with the management office and was told that the management office continued to register attendees after the initial quorum announcement; the figure of 293 represented the quorum count at approximately 1:50 pm, not the final registration total. Or Wai Yin confirmed she found this explanation acceptable [Day 20/93-95]. Or Wai Yin photographed approximately 280 proxy votes at the meeting [G4/2735]; she observed approximately 200 to 300 people in attendance and considered the number of proxies consistent with that observation [Day 20/95/8-18].

1. As to the proxy mechanism: under paragraph 3(5)(b) of Schedule 3 to the BMO,

it is the chairman or, in his absence, the person who presides at the meeting, who determines the validity of a proxy instrument. The HAD has no statutory role in this determination.

1. Chan Hau Man confirmed that the HAD’s position is that proxy voting is a proper

tool under the BMO for owners unable to attend meetings in person to participate in building management decisions: proxy instruments represent “a way to reflect the choice and decision of owners” and “the owner should choose a person they trust to get the proxy in order to make a decision for them” [Day 20/125/25 - 126/23]. The holding of proxies by an individual is not, of itself, a contravention of the BMO. Where allegations of criminal conduct in the obtaining of proxies arise, and specific information is provided, the appropriate course is referral to the enforcement authorities [Day 20/126/13-23; Day 20/128/21-25].

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• Following this EGM, TPDO received 9 complaints touching on the manner by

which Prestige was selected as contractor, questioning the validity of proxies collected for the meeting 485 [WS1/510]. TPDO replied to complainants and followed up by referring and relaying the complaints and requests to the MC. A further 8 complaints questioned Prestige’s qualifications and suitability for appointment, carrying concerns over the validity of its licences and its previous conviction records; 4 of the 8 complaints were also lodged directly with the BD and URA by the complainants themselves486 [WS1/510].

• TPDO was not aware of Prestige’s prior disciplinary record on the day of the 28

January 2024 meeting [Day 20/103/5-8]. The evidence demonstrates that, at the time the contractor appointment decision was made, the HAD’s representatives had no information before them indicating that Prestige’s record raised concerns. (iv) The stage of contract finalisation and execution

• TPDO received no complaints relating to works quality, cost escalation,

supervision adequacy, and fire safety during works. TPDO did not have any other knowledge of these issues487 [WS1/512].

• TPDO was aware that the renovation commenced in July 2024 with scaffolding

constructed. As no BMO irregularity was involved or observed, no action by the HAD was taken488 [WS1/512]. This is a consequence of the HAD’s facilitative mandate.

• TPDO was aware of the lack of an on-site works supervisor through three resident

letters issued to the MC which were copied to TPDO among other departments. 485 CHAN Hau-man 1st WS §20 486 CHAN Hau-man 1st WS §21 487 CHAN Hau-man 1st WS §27 488 CHAN Hau-man 1st WS §28

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TPDO relayed the letters to the PMC for necessary follow-up actions and provided substantive reply to the complainant489 [WS1/513]. This referral and reply is consistent with the HAD’s complaint-handling mechanism: for complaints not within the BMO’s purview, the HAD confirms receipt, refers to the relevant body, and replies substantively to the complainant. (v) The stage of re-election of the MC up to the fire

1. In February 2024, the then MC Chairman Tang was requested by not less than 5%

of the owners to convene an owners’ meeting. TPDO received complaints against Tang for failing to respond to the request within 14 days as required by paragraph 1(2) of Schedule 3 to the BMO.

1. TPDO issued 4 advisory letters to Tang [G1-1/1312-1321] and also verbally

contacted him, reminding him to undertake his duties in accordance with the relevant BMO provisions 490 [WS1/511]. Or Wai Yin confirmed that if the chairman refused to hold a meeting, as a matter of practice there was nothing the HAD could do beyond issuing advisory letters [Day 20/105/5-12]. The first February 2024 request was ultimately withdrawn by the convener [Day 24/11/17- 19; Day 20/117/24-25].

1. On 5 July 2024, Tang was again requested by not less than 5% of the owners to

convene an owners’ meeting, this time seeking to re-elect the MC and extend the payment schedule. TPDO maintained close liaison with Tang, issued another 4 advisory letters, and also verbally contacted him to remind him of his duties under the BMO 491 [WS1/511]. Or Wai Yin confirmed that the tone of the letters escalated: the 29 July 2024 letter [G1-1/1319-1320] was “more detailed” and the “tone is sterner” [Day 20/105/13 - 106/2]. When Tang expressed difficulty

489 CHAN Hau-man 1st WS §29 490 CHAN Hau-man 1st WS §23 491 CHAN Hau-man 1st WS §24

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finding a venue that could accommodate the large number of owners, TPDO coordinated and facilitated the rental of the hall of CCC Fung Leung Kit Memorial Secondary School, located adjacent to WFC, for the owners’ meeting scheduled for 6 September 2024492 [WS1/511; Day 20/107/5-8].

1. At the 6 September 2024 EGM, 1,243 owners attended in person and by proxy

[Day 20/107/9-12]. The HAD’s involvement was active and constructive. Or Wai Yin found that a significant number of owners were still queuing to register at the scheduled start time and suggested delaying the start to allow more owners to complete registration [Day 20/116/16-25]. She further suggested that a live broadcast to the outdoor playground be arranged so that owners who could not be accommodated inside the hall could participate [Day 20/116-117].

1. During the meeting, Tang sought to adjourn the proceedings and left the venue.

The HAD representative intervened: she clarified that the decision to adjourn rested with the owners present at the meeting, and advised the owners of their rights under paragraph 3(1) of Schedule 3 to the BMO, which allowed them to appoint a substitute presiding person from among themselves if the chairman left the meeting493 [WS1/505; Day 20/113/2-12]. The meeting continued under a substitute presiding person, and the remaining items on the agenda were dealt with. The result of the meeting was that a majority voted in favour of dissolving the OC and the owners voted on, inter alia, the composition and membership of new MC [G1-1/1045-1046].

1. The Government submits that the HAD’s intervention at the 6 September 2024

EGM demonstrates that the HAD did not passively observe even the most difficult situations. When the chairman abandoned the meeting in a manner that would have frustrated the owners’ statutory right to have their agenda items

492 CHAN Hau-man 1st WS §25 493 CHAN Hau-man 1st WS §7

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considered, the HAD representative acted promptly to ensure owners were informed of the procedural mechanism available to them. This intervention was entirely consistent with the facilitative role: advising on BMO procedure, maintaining impartiality between camps, and ensuring owners could exercise their statutory rights. The HAD did not take a side on the substance of any resolution; it ensured that the meeting could lawfully continue. U3. Systemic and/or operational weaknesses on the regulatory level

1. The HAD’s mandate under the BMO does not extend to supervising construction

works, materials, or fire safety. Its jurisdiction is confined to building management procedures under the BMO. As Chan Hau Man confirmed: “When it comes to building management, it’s the rights and obligations of every owner. As to what choices they make, say, in the case of major renovation, the selection of contractors and details of the works, that would be the decision of owners” [Day 20/122/22 – 123/6].

1. A central area as a matter of policy design identified in the evidence is the HAD’s

lack of statutory power to compel the OC chairman to convene a meeting. DD Te confirmed: “According to existing regulations, it’s true that the OC chairman has the power to convene a meeting. Owners, if the OC chairman does not convene meeting, can apply to the Lands Tribunal. That’s the design of the existing legislation” [Day 24/12/15-25]. In the WFC context, this resulted in 8 advisory letters being issued to Tang across two petition cycles without producing the required EGM within the statutory timeframe. The consequence for the owners was a protracted period during which concerns about the renovation could not be formally raised or resolved through the owners’ meeting mechanism.

1. A further area for improvement is that the BMO complaint-handling mechanism

relies on the HAD identifying BMO-specific issues and referring others to the

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appropriate department. Where complaints crossed jurisdictional lines, the referral mechanism operated but was not always accompanied by proactive follow-up to ensure the receiving department had in fact taken substantive action. The Government acknowledges that, with the benefit of hindsight, more robust follow-through on inter-departmental referrals would have been desirable in a case of this complexity.

1. The Government also acknowledges that in one instance, Or Wai Yin was unable

to open the audio files [G1/841-842] but she neither informed the complainant of this difficulty nor sought an alternative format [Day 20/111/10-19]. The appropriate course, had the recordings been accessible, would have been to follow up on the complaint. In any event, Chan Hau Man of the HAD confirmed that complaints involving allegations of unlawful conduct (such as fraudulent obtaining of proxy instruments) would be referred to law enforcement agencies rather than handled by the District Office itself [Day 20/128/21 – 129/1].

1. The Government accepts that this ought to have been followed up. The singular

lapse should, however, also be viewed in its proper context. TPDO handled 44 relevant complaints in respect of WFC [Day 24/8/8-17], issued 8 advisory letters across two petition cycles, attended multiple owners’ meetings, facilitated the venue and live broadcast arrangements for the 6 September 2024 EGM, and intervened actively when the chairman abandoned that meeting. This was an isolated omission within an otherwise active pattern of engagement, and should not be treated as representative of the HAD’s overall handling of the matter.

1. Overall, as DD Te acknowledged in oral evidence, in the specific context of large-

scale renovation work, the powers conferred on the SHYA under the current BMO regime were not adequate to address the difficulties encountered by owners arising from such works [Day 24/25/2]. The HAD lacked a mandate to intervene

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in the substance of owners’ decisions, whether as to the choice of contractor, the assessment of works quality, or the evaluation of professional advice. These were matters for the owners themselves, assisted by the professionals they engaged.

1. As the Chairman observed, “I think it is a long-lasting and complex problem.

Since it is a private property, that’s why I can understand the position of the government. It is hard for government to make the decision on their behalf” [Day 24/29/24 – 30/3]. The Chairman further observed that “the residents do not have such subject knowledge. That’s why when they participate in the process, it will be very difficult” [Day 24/30/11–14] and identified the need for “more consultation or assistance so that they can understand better before they make the decision” [Day 24/31/6–9].

1. The Government respectfully agrees with these observations and submits that

they identify the core challenge that the post-fire reform measures are designed to address: how to provide meaningful support and safeguards for owners facing complex decisions about large-scale renovation without overriding the foundational principle of private ownership and owners’ right to determine their own building management affairs.

1. It was also observed by Member Chan that the OC system itself may be

structurally incapable of handling large-scale renovation and suggested greater reliance on property management companies, noting: “If the property management companies are treating the OC as an IO, it will be very different because the owners do not have to share this kind of legal responsibilities” [Day 24/32-35]. The Government notes this observation and submits that it reinforces the case for the reform measures described below, which include enhanced roles and accountability for licensed PMCs in the process.

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• Turning now to the improvements already and to be introduced, and further

studies to be conducted, the Building Management (Amendment) Ordinance 2024, which came into effect in July 2025, represents a significant legislative advance in addressing the vulnerabilities exposed by the WFC experience. The Amendment Ordinance introduces defined categories for high-value procurement (Type 1, Type 2, and large-scale maintenance procurements) with corresponding tendering and declaration of interests and connections requirements. For large- scale maintenance procurement specifically, the Amendment Ordinance introduces a new “voting-in-person” threshold requiring that at least 5% of owners or 100 owners (whichever is less) cast their vote personally at the meeting494 [WS1/493; Day 24/38/22-39/15] [G5/2742]. This aims to encourage more owners to personally participate in owners’ meetings concerning large-scale maintenance procurement, thereby strengthening the protection of owners’ rights.

• The HAD has further announced five further amendment directions for the BMO,

which have been the subject of consultation with the Legislative Council Panel on Home Affairs, Culture and Sports in February 2026 [G5/2738-2757]. These proposed amendments are as follows. 1104.1. First, in relation to decisions on large-scale maintenance works and high-value procurement, the HAD proposes to impose higher attendance requirements and voting thresholds. For Type 2 high-value procurement, it is proposed to impose a “voting-in-person” threshold requiring 5% of the owners or 100 owners (whichever is the lesser) to attend and vote in person. For large-scale maintenance procurement, it is proposed to introduce a tiered system for quorum and voting-in-person thresholds, with projects of higher per-owner cost attracting correspondingly higher thresholds. To align with the features of the enhanced Smart Tender of the URA, 494 TE Chi Wang 1st WS §§26-29

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corresponding amendments would be made to the procurement-related provisions of the BMO to allow exemptions for projects for which the URA conducts tenders on behalf of owners. It is further proposed that a briefing session shall be convened seven days prior to the owners’ meeting for the large-scale maintenance procurement resolution, allowing owners to fully understand the details of the project [G5/2742-2743]. 1104.2. Second, in relation to proxy instruments, the HAD proposes enhancing transparency through the following initiatives: imposing a ceiling on the number of proxy instruments a person may hold (for buildings with 50 or fewer units, a person may obtain only one proxy instrument; for buildings with more than 50 units, the number shall not exceed 2% of the total number of owners or 20 instruments, whichever is the lesser); requiring the public display within the building of a list of units whose owners have signed proxy instruments, with all instruments made available for inspection by owners prior to and at the owners’ meetings concerned; adding a section to the relevant proxy instruments for meetings concerning large-scale maintenance procurement to allow owners to voluntarily specify their voting instructions to their proxies; and adding a “declaration” section to the form of proxy instrument to explicitly require the owner to confirm that the meeting agenda has been noted and clearly state that making a false instrument constitutes a criminal offence and the associated penalties [G5/2743] . 1104.3. Third, in relation to declaration of interests, the HAD proposes that OCs be required to provide the works consultants and the contractors with designated declaration forms to disclose any conflict of interest between the two parties, with such declarations to be made publicly available to all owners. In cases where the declaration is refused, such refusal must also be

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disclosed to the owners. Any false declaration shall constitute a criminal offence [G5/2744]. 1104.4. Fourth, in relation to meeting procedures, the HAD proposes to clarify the arrangements for convening owners’ meetings, agenda setting, cancelling, postponing or suspending meetings. Specifically: where the Chairman of the MC refuses to convene an owners’ meeting at the request of 5% of the owners, it is proposed to empower 10% of owners to apply to the SHYA for the appointment of a specified person (e.g. an owner, a licensed PMC or a PMP) to convene the meeting on their behalf; the Chairman would be prohibited from making changes to the issued agenda without reasonable cause; if the Chairman cancels a meeting without reasonable grounds, 10% of owners may apply to the SHYA for the appointment of a specified person to reschedule and chair the meeting; unless there are reasonable grounds, the Chairman cannot alone decide to postpone or suspend a meeting after it has commenced, with any such decision to be put to a vote by the owners present; and in the event of handling an emergency, the notice period for convening an MC meeting or owners’ meeting may be shortened to at least 3 hours or 12 hours respectively [G5/2744-2745]. 1104.5. Fifth, in relation to the powers of the SHYA, it is proposed that in special circumstances where the MC cannot function normally or fails to handle the affairs of the OC (e.g. when all positions in the MC are vacant, or when all MC members cannot be contacted within a reasonable period), the SHYA should be granted powers to intervene and provide assistance. For example, upon application by 10% of the owners, the SHYA would have the power to appoint a specified person to assist in convening an owners' meeting to dissolve the current MC and re-elect a new MC. In

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conjunction with these proposals, a statutory appeal board (building management) would be established; if owners object to the decision of the SHYA, they may lodge an appeal, and any decision rendered on appeal shall be final [G5/2745].

1. The Government consulted the Legislative Council Panel on Home Affairs,

Culture and Sports on these proposed amendments in February 2026 and has commenced consultations with the property management sector. A public consultation is planned for mid-2026, which will include collecting district views through the Working Groups on Building Management under the District Councils [G5/2748]. The Government will strive to submit the amendment bill to the Legislative Council for scrutiny as soon as practicable, with a view to further strengthening the legal framework (Table of Improvement Measures, Item F2).

1. Of particular note is the proposal to empower the SHYA to direct a PMC to

convene a meeting where the OC chairman refuses to do so. DD Te stated: “We proposed to empower the authority to, upon receipt of 5 per cent owners’ request, identify a property management committee to convene a meeting if the OC chairman is not willing to organise such a meeting. That’s the proposed way forward” [Day 24/13/1-20]. He emphasised that the SHYA would assist in convening the meeting but would not participate in the decision-making process.

1. The HAD is further committed to enhancing inter-departmental collaboration and

leveraging its role in liaising closely with OCs. Subject to the agreement of other relevant departments and institutions involved in building repairs and maintenance, the HAD stands ready to participate in joint initiatives for large- scale building maintenance and renovation works to facilitate communication and coordination between government departments and OCs on both regular and ad

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hoc bases495 [WS1/494]. DD Te confirmed his agreement with the Chairman’s suggestion that the HAD consider taking the lead in coordinating different organs to offer assistance to residents: “I completely agree with the chairman. There are a lot of cases we need to follow up after the fire. We have been working with the Development Bureau, also the URA. I think we are also engaging Hong Kong Institute of Surveyors. As an industry body, I hope they can offer some comments about how the cases shall be handled” [Day 24/31/16-23].

1. The HAD’s directions for reform, addressing the proxy system, the voting-in-

person threshold, the chairman’s meeting-convening power, and the inter- departmental coordination role, represent a considered and proportionate response to the systemic issues revealed by the WFC experience. The Government will respond positively and substantively to any further recommendations the Committee may make in this area, and respectfully invites the Committee to note that the legislative and administrative reform process is already substantially advanced.

495 TE Chi Wang 1st WS §30

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V. IMPROVEMENT MEASURES (RELEVANT TO TOR 2) PROPOSED BY THE GOVERNMENT AS A WHOLE

1. The systemic issues identified under ToR 2, encompassing bid-rigging, bribery,

proxy manipulation, conflicts of interest and PMC failures in the building maintenance sector, require a coordinated, multi-agency response. The Government has already taken concrete steps across these domains, and further measures are in progress.

1. In the area of tendering and procurement reform, DEVB, in collaboration with

the URA, is preparing to launch an enhanced version of Smart Tender to assist OCs and owners in engaging consultants and contractors from pre-qualified lists to be established. A total of $300 million has been allocated to the URA for this purpose. The enhanced Smart Tender will incorporate more rigorous pre- qualified lists requiring consultants and contractors to pass background checks by the Police and ICAC before being eligible to participate in tendering; URA oversight of the tendering and tender evaluation processes; and, for buildings applying for government maintenance subsidies, URA will require consultants and contractors to report at critical project junctures so that URA may offer independent advice to owners. The Government aims to roll out the enhanced Smart Tender in the fourth quarter of 2026. In addition, DEVB is reviewing how to strengthen oversight of the performance of inspection consultants, supervision consultants, and contractors through legislative and administrative measures (Table of Improvement Measures, Item F1).

1. In the area of building management legislation, the Home and Youth Affairs

Bureau is taking forward the next phase of amendments to the BMO. The five proposed amendment directions cover: raising the quorum and voting thresholds for decisions on large-scale maintenance works and high-value procurement; enhancing the handling of proxy instruments; enhancing the declaration of

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interests mechanism; clarifying meeting procedures; and enhancing the powers of the SHYA. The Government consulted the Legislative Council Panel on Home Affairs, Culture and Sports on the proposed amendments in February 2026 and has commenced consultations with the property management sector. A public consultation is planned for mid-2026, which will include collecting district views through the Working Groups on Building Management under the District Councils (Table of Improvement Measures, Item F2).

1. In the area of competition law enforcement, as mentioned above, the Competition

Commission has completed preparing an enhanced version of the NCCs for procurers to incorporate into their tender documents and procurement contracts. The enhanced NCC includes adding a clause explicitly stating that violating the NCC may constitute a criminal offence, and introducing additional terms requiring bidders to make a Statutory Declaration affirming the warranties within the NCC. The enhanced NCC is expected to launch soon Moreover, the Commerce and Economic Development Bureau is working closely with the Competition Commission to review the Competition Ordinance from multiple perspectives and consider the need for legislative amendments, taking into account the implementation of the Ordinance to date and the experiences of other jurisdictions, with a view to strengthening deterrence against anti-competitive conduct (Table of Improvement Measures, Item G4).

1. In the area of strengthening the regulation and supervision of building

professionals, the DEVB and BD are further reviewing the BO to strengthen the registration and disciplinary systems for contractors. Proposals include strengthening the causes for disciplinary actions and the factors for considering registration renewal for registered building professionals and contractors, and clarifying the duties of building inspection and works supervision under the existing large-scale repair works regime with a view to breaking the chain of

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interests between inspection consultants and contractors (Table of Improvement Measures, Item B2(iii)-(iv)).

1. In the area of industry practice and good governance, the Construction Industry

Council is currently reviewing the practices and operations of the large-scale building maintenance industry, including its subcontracting system. The objective is to review and enhance the conduct and integrity of the sector, as well as to strengthen safety awareness and training for both management personnel and frontline workers. The Construction Industry Council is formulating a set of Good Practice Guidelines for the large-scale building maintenance industry, which will include recommendations on the subcontracting of such works to promote the healthy development of the construction industry. The Guidelines are expected to be promulgated within 2026 (Table of Improvement Measures, Item G3).

1. These improvement measures aim at addressing the structural conditions that

permitted organised syndicates to infiltrate the building maintenance procurement process, while preserving the foundational principle that building management decisions are ultimately for the owners to make. The Government will continue to review and act robustly on further measures to address the problems identified by the Committee in due course.

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PART V: ENDING REMARKS W. ENDING REMARKS

1. 168 lives were lost. SFn Ho gave his life in the service of others. Thousands of

residents were displaced from their homes. The scale of this incident weighs upon the Government as well as the community it serves.

1. The evidence before the Committee establishes that the professionals and

contractors primarily entrusted with the safety and quality of the WFC renovation works abused the mechanisms designed to protect the public, betrayed the trust and expectations that the Government and regulatory framework placed in them, and through their deliberate wrongdoings and gross negligence caused the fire that took 168 lives.

1. In the meantime, the Government readily acknowledges the systemic and

operational weaknesses in its own supervisory framework that permitted the abuse by those bearing primary responsibilities to go undetected.

1. Thus, since the fire, the Government has responded swiftly in reviewing the

measures and practice in a number of crucial areas and took the initiative to introduce improvement measures to address immediately safety concerns. These improvement measures are set out in Section R4 above (and detailed in the table filed for the Government on 15 June 2026). They represent significant changes to the supervisory architecture, the verification mechanisms, the inter-departmental coordination arrangements, the penalty regimes and the technological infrastructure through which the Government oversees building safety.

1. On top of the improvement measures already implemented or soon to be

implemented, the Government is fully aware that, subject to the Committee’s recommendations to become available in due course, there will be further efforts

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made on reviewing and introducing improvement measures in the major policy areas covering at least the MBIS, MWCS and establishment of concrete joint efforts in handling enquiries and complaints arising from or generally in connection with large-scale renovation works. The Government is committed to completing and implementing these reforms with the urgency that the expectations of the public demand.

1. The Government respectfully invites the Committee to make such findings and

recommendations on the path forward as it considers appropriate in light of the evidence. The Government pledges to respond positively, substantively and expeditiously to those recommendations, and to ensure that the system is made resilient against the kind of organised abuse that resulted in this fire. Dated 7 July 2026. Jenkin Suen S.C. Calvin Cheuk S.C. Michael Lok Charlie Liu Counsel for the Relevant Bureaux and Departments of the Government

FD06225 ｜ 2025_港澳台_香港大埔宏福苑-特别重大火灾事故调查报告(政府结案陈词摘要).pdf

分类：06_境外及港澳台调查报告 ｜ 年份：2025 ｜ 地域：香港 ｜ 严重程度：特别重大 ｜ 场所： ｜ 起火原因：燃气/爆炸;焊接/动火 ｜ 来源格式：pdf

就大埔宏福苑火災成立的獨立委員會 政府相關決策局與部門總結陳詞綱要 註：政府總結陳詞以英文書寫。此文件為政府總結陳詞的中文版綱要，以 求方便公眾人士理解。由於篇幅所限，本綱要只是概述政府總結陳詞的重 點，當中如與英文版內容有任何歧義，應以英文版為準。

I. 引言 1. 2025 年11 月26 日，大埔宏福苑發生嚴重火災。宏福苑為居者有其 屋計劃屋苑（「居屋屋苑」），由八幢於1983 年落成的高層住宅大 廈組成。事發時，所有八幢大廈正同時進行外牆維修及翻新工程， 整幢大廈由地面至天台均被竹棚及保護網包圍。 2. 大火持續焚燒約43 小時，奪去168 條人命（包括一名消防人員—— 消防隊目何偉豪），79 人受傷，逾100 人獲消防處救出。在行動高 峰期，共出動174 輛消防車、47 輛救護車及989 名消防人員，為消 防處歷來最大規模的部署。 3. 火警於下午2 時51 分首次接報，報案人稱宏昌閣外牆棚架起火並發 生爆炸。根據現有證據，火源位於宏昌閣104及105 室外的平台。火 勢以極其迅速的速度蔓延——在首輛消防車抵達後約20 分鐘內，火 勢已由起火點蔓延至宏昌閣多個外牆面及附近地面，並波及宏泰閣。 至事件結束時，共7 幢大廈遭波及。 4. 政府迅速成立三個跨政策局專責小組協調善後工作： (1) 由政務司司長領導的調查及規管工作組，負責統籌和協調技術 及規管層面的調查，以及制定改善措施以強化現有規管制度。 跨部門火警調查專責小組（「專責小組」）亦在調查及規管工

-2- 作組下成立，由消防處、警務處、屋宇署、機電工程署、房屋 局轄下的獨立審查組（「ICU」）、勞工處、政府化驗所及獨 立消防工程專家組成，負責調查大火成因。 (2) 由政務司副司長領導的緊急支援及募捐工作組，負責即時財政 援助、社會福利及社區支援，包括成立「大埔宏福苑援助基 金」、發放多項補助、作出多項寬免，以及透過「一戶一社工」 安排為每戶居民提供一站式支援服務； (3) 由財政司副司長領導的應急住宿安排工作組，處理數以千計居 民的臨時住宿安排，包括安排青年旅舍、營地、酒店房間、過 渡性房屋及房協單位等。 II. 成立獨立委員會 5. 行政長官於2025 年12 月2 日宣布會就大埔宏福苑火災成立的獨立委 員會（「獨立委員會」），並於12 月12 日宣布獨立委員會正式成 立，目標於九個月內完成工作。獨立委員會由現任高等法院法官出 任主席，在行政長官授權下運作。 6. 獨立委員會的職權範圍涵蓋以下四個方面： (1) 職權範圍（一）：就大埔宏福苑起火、火勢迅速蔓延和造成的 人命傷亡及財產損毀，審視 – 成因和導致火災發生的情由；大 廈配置的消防裝置及設備，及其有效運作的監督和責任問題； 有關的樓宇維修工程的施工安全要求、標準、監督和日常維護 制度是否足夠；針對樓宇維修工程，現行安全標準的用料清單 是否全面，有關的驗證和檢測制度是否有效；各環節的監管人

-3- 員（包括政府部門人員、授權負責的專業人士及承建商等）的 角色和責任承擔；和上述問題相關的責任。 (2) 職權範圍（二）：針對大型樓宇維修工程，審視 – 有關工程各 環節有否不適當的相連利益、角色衝突、不當的合謀串連等系 統性問題；及有關工程有否涉貪圍標，違規招標的問題。 (3) 職權範圍（三）：就上述兩項事宜，檢視現行相關法律的規管 及懲罰是否足夠。 (4) 職權範圍（四）：就上述（1）至（3）的事宜，提出建議。 7. 政府全力配合獨立委員會工作。自獨立委員會開始運作以來，政府 部門積極回應獨立委員會法律團隊所發出的信函和要求，並主動向 獨立委員會提交與委員會職權範圍相關的文件、資料及證人供詞。 在聽證會期間，來自六個政府部門及專責小組的31名證人於13個聆 訊日出庭作供。獨立委員會共接獲近百萬份文件，數據總量超過 1TB。 III. 獨立委員會如何處理證據及作出事實裁斷 8. 獨立委員會的調查目的為查明事實真相並提出建議，以防止同類事 件再次發生，而非裁定任何一方的法律責任。 9. 獨立委員會已於27 個聆訊日進行公開聽證，期間73 名事實證人及7 名專家/專責小組證人出庭作供。 10. 就未有出席聆訊或提供證供的涉事方，獨立委員會有權根據現有證 據的整體情況，按照常理作出事實裁斷及推論（包括不利的事實裁 斷及推論）。舉證準則方面，無任何一方承擔正式舉證責任。一般

-4- 適用民事舉證準則（即相對可能性的衡量）。就嚴重性較高的事實 裁斷，獨立委員會可考慮所需證據的說服力是否與指控的嚴重程度 相稱。就成因判斷，獨立委員會亦可考慮運用常理區分「真正、實 質、直接或有效的原因」與較為間接的背景條件。 IV. 政府的案情概要 （一）本港樓宇維修保養工程的監管架構及其演變 11. 香港樓宇維修保養工程的監管架構建基於專業人士自我監管的模式， 並以法定責任、註冊制度及監督機制為骨幹。此模式的基礎在於政 府對建築業專業人士所寄予的信任和信心。 12. 此模式自上世紀九十年代經歷多年來的演變，並在特區政府成立後 六屆任期逐步發展。在宏福苑大火之前，業界、立法會及公眾多年 來一直呼籲精簡監管程序、以降低業主負擔。樓宇失修的問題亦存 在已久，舊樓欠缺妥善維修保養，會對居民和普羅大眾構成潛在威 脅。 因應上述情況，政府於2010 年實施小型工程監管制度（「小型 工程監管制度」），並於2012 年實施強制驗樓計劃（「強制驗樓計 劃」）。有關制度均經立法會詳細審議，旨在為業主提供合法、簡 易、安全及便捷的途徑進行小型工程維修保養樓宇，並依靠註冊專 業人士確保工程的安全和質素。 13. 有關制度的核心設計，是將工程安全及質素的首要責任，明確施加 在獲業主委聘的註冊專業人士及承建商。政府則制定標準、維持註 冊名冊、進行審核抽查及巡查、處理投訴及查詢，並在發現違規時 採取執法行動。

-5- 14. 現行制度的前提是該等專業人士具備所需的專業知識及操守、並受 相關的專業操守守則約束、其資歷及聲譽均受制約，從而令政府及 公眾有合理期望及依賴他們遵守相關法律及規管要求。宏福苑大火 前就現行監管強度及精簡監管程序、降低業主負擔等之間的考量， 反映了多年制度發展過程中逐步形成的政策取捨及公眾利益的平衡。 （二）宏福苑涉及的系統性違規為是次大火的直接成因 15. 宏福苑維修工程造價約為3.36 億港元，由持有《建築物條例》（第 123章）（「《建築物條例》」）下法定責任的註冊專業人士及註冊 承建商負責執行。證據清楚顯示，若非負責宏福苑維修工程的專業 人士及承建商的一連串蓄意欺詐、合謀串連、疏忽及違法濫用行為， 是次大火不會發生。 16. 宏業建築工程有限公司（「宏業」）作為主承建商：蓄意購買及使 用未經阻燃認證的棚網以牟取更高利潤，並提供疑為偽造的測試證 書及在巡查前選擇性更換棚網以欺騙監管機構；大規模及長期使用 可燃發泡膠板封蓋窗戶，違反其向相關政府人員所作的明確陳述； 指示並允許在走火樓梯每隔約五層開設「生口」損害逃生通道；指 示非註冊消防裝置承辦商排放消防水缸，導致控制消防栓／喉轆系 統及火警警報系統的主電源開關被關閉；以及未能有效禁止工地吸 煙及清除可燃廢料。 17. 鴻毅建築師事務有限公司（「鴻毅」）及其註冊檢驗人員吳躍：完 全沒有履行監督職責，證據顯示並無就任何一項火災促成因素進行 任何真正或有效的監督。

-6- 18. 中華發展工程有限公司（「中華發展」，一間註冊消防裝置承辦 商）：從未到訪現場、從未獨立評估關閉消防裝置的需要及後果、 僅作為「橡皮圖章」提交關閉通知書（「SDN」），令消防處無從 得知火警警報系統同時失效的事實。 19. 宏泰消防工程有限公司（「宏泰消防」，負責年檢的註冊消防裝置 承辦商）：於2025 年10 月及11 月進行維修工作時發現消防水缸已 清空且主電源開關已被關閉，卻未有通知消防處或聯絡中華發展跟 進。 20. 置邦興業有限公司（「置邦」，持牌物業管理公司）：發出工作指 示讓其非持牌電工操作消防裝置（屬違法行為）、未能協調兩間同 時受聘的消防裝置承辦商、對居民持續投訴僅扮演「傳話人」角色。 21. 是次系統性濫用有兩個顯著特點：其一為涉及的財務誘因規模巨大 （工程造價約3.36 億港元），遠超違規成本及被處分的風險；其二 為濫用行為的共謀性質，當本應互相監督的專業人士選擇合謀串連， 整個相互制衡的機制便告失效，導致有關違法行為及濫用難以被揭 示。 （三）特區政府已採取的改善措施 22. 政府承認現行規管及監督架構需要在監管強度及精簡監管程序之間 取得適當平衡，並已於火災後迅速採取全面的改善措施。相關改善 措施涵蓋消防裝置監管、建築物料安全、強制驗樓計劃及小型工程 監管制度、建築專業人士監管、跨部門溝通協調、工地安全管理及 科技應用等範疇（見下文第XII 部分）。

-7- V. 大埔宏福苑及大火的背景 23. 宏福苑位於新界大埔，共有約1,984 個單位，按2021 年人口普查約 有4,600 名居民，當中超過三分之一（約1,700 人）年齡在65 歲或以 上。每幢大廈31 層，設有兩組交叉走向的樓梯（「鉸剪梯」）作為 走火通道。大廈設計的關鍵特徵為兩翼之間的垂直「內角」（re- entrant），由一樓延伸至天台。 24. 宏福苑由隸屬房屋局常任秘書長辦公室的ICU 在屋宇署署長的授權 下進行《建築物條例》下的法定監管，此授權安排自1990 年代初沿 用至今逾三十年。 25. 宏福苑於2014 年被選定為強制驗樓計劃的目標樓宇。2019 年1 月， 鴻毅獲委任為檢驗顧問。維修工程主要依據小型工程監管制度進行， 無須事先取得建築事務監督批准。工程於2024 年7 月展開。 26. 在宏福苑大火之前，2023 年海員俱樂部大火及2025 年10 月華懋大 廈大火均涉及棚架高層建築物起火。屋宇署及ICU 在上述事件後曾 發出通告函件及/或提醒信函，要求建築專業人士確保棚網阻燃性能 符合要求。 VI. 各有關範圍下持份者的角色及責任 27. 宏福苑大火涉及多個監管範疇，各由不同法例規管，政府部門、業 主、業界及其他持份者在各範疇中各司其職、相輔相成。在部分範 疇中，政府的角色屬促進及推動性質（如私人建築物管理及業主委 聘專業人士）；在其他範疇中，政府則擔當監督角色（如消防風險 管理、施工物料規管及職業安全）。

-8- 28. 下表概述各範疇的規管架構、政府角色及其他持份者的責任： 範疇 規管架構、政府角色及其他持份者 (1) 私人建 築物的管 理 a. 規管架構：《建築物管理條例》（第344 章） b. 政府角色（促進及推動）： 民政事務總署協助業主 立案法團運作、出席業主大會提供建議、轉介投訴 c. 其他持份者： (i) 業主/業主立案法團：承擔管理首 要責任；(ii) 物業管理公司：受聘代為執行日常管理 (2) 消防裝 置及設備 的保養 a. 規管架構：《消防條例》（第95 章）及其附屬法 例 b. 政府角色（促進及推動）： 消防處監察；維持註冊 消防裝置承辦商名冊 c. 其他持份者： (i) 業主/業主立案法團：有法定責任 保持消防裝置有效運作並安排每年檢驗；(ii) 物業管 理公司：按物業管理服務管理局守則監督承辦商工 作；(iii) 承建商、顧問及註冊檢驗人員：負責監督維 修工程期間涉及消防裝置的工作 (3) 業主委 聘專業人 士進行維 修工程 a. 規管架構：《建築物條例》下的強制驗樓計劃及小 型工程監管制度 b. 政府角色（促進及推動）： 維持註冊名冊、提供指 引 、抽樣審查、處理投訴及查詢、發現違規時採取執 法行動

-9- c. 其他持份者： (i) 業主/業主立案法團：自主決定委 聘註冊檢驗人員及承建商；(ii) 註冊檢驗人員及承建 商：承擔法定首要責任 (4) 消防風 險管理及 消防裝置 的維護 a. 規管架構：《建築物條例》、《消防條例》及相關 守則 b. 政府角色（監督）： 屋宇署/ICU 主要負責被動式 消防安全措施（如逃生通道、防火間隔的設計與建 造）；消防處主要負責主動式消防裝置 c. 其他持份者： 註冊檢驗人員、承建商、物業管理公 司及業主各負相關責任 (5) 施工方 法及物料 規管 a. 規管架構：《建築物（建造）規例》等 b. 政府角色（監督）： 屋宇署/ICU 透過審核抽查及 投訴處理機制監管 c. 其他持份者： 註冊檢驗人員及承建商：須確保物料 符合標準並採取適當預防措施 (6) 職業安 全及健康 a. 規管架構：《職業安全及健康條例》（第509 章） 及《工廠及工業經營條例》（第59 章）及相關附屬 法例 b. 政府角色（監督）： 勞工處以風險為本的突擊巡查 （一至兩個月一次）、執法行動 c. 其他持份者： 承建商（包括總承建商）：須在合理 切實可行範圍內確保僱員的工作安全及健康

職權範圍1

-10- VII. 專責小組就大火起因、火勢蔓延及造成重大傷亡因素的調查結果 29. 專責小組由消防處、警務處、屋宇署、機電工程署、ICU、勞工處、 政府化驗所及消防工程專業人士（袁國傑教授）組成。調查參照國 際標準進行，包括現場勘察、實驗室分析、電腦模擬及全尺寸火災 測試（於四川進行）。最終調查報告於2026 年5 月完成。 30. 專責小組的主要結論包括火災最有可能屬意外性質，由一個熱源 （如未熄滅的香煙）點燃宏昌閣104及105室外平台上的可燃物料引 起。急速垂直蔓延受大廈內角的「煙囪效應」驅動。 31. 造成重大傷亡的五個關鍵因素為：（一）火勢迅速蔓延致逃生時間 極短；（二）燃燒中的可燃物塌下堵塞出口；（三）火警警報系統 全數失效；（四）發泡膠板遮蔽居民視線並延誤反應；（五）走火 樓梯的逃生通道因「生口」而失去防護。 32. 獨立委員會委聘的專家（香港理工大學Asif Sohail Usmani 教授及江 黎明教授）與專責小組的專家分別獨立進行研究，在所有重要事項 上得出大致一致的結論：棚網及帆布缺乏阻燃性能是導致火災的重 要因素；若使用阻燃物料，初期火勢或可自行熄滅。 VIII. 由宏昌閣起火至大火被撲滅的發展 33. 主要事件時序如下： 時間 事件 約14:30-14:43 大火起源（閉路電視於14:43 拍到燃燒碎片墜 下）

-11- 14:51 消防通訊中心接獲首個火警報告 14:56 首輛消防車抵達（共12 輛消防車及61 名消防 人員於初段出動） 15:02 升為三級火警（抵達後6 分鐘） 15:20 消防處處長指揮部啟動、增派10 隊搜救隊 15:34 升為四級火警（已部署269 名消防人員，約為 五級火警標準部署的兩倍） 18:22 升為五級火警（已部署718 名消防人員） 22:30 累計出動221 輛消防車及989 名消防人員 2025.11.27 21:31 宣布火勢被圍 2025.11.28 03:15 宣布火勢受控 2025.11.28 10:18 發出「停止」訊息

救火及救援工作面對的困難包括：（一）燃燒中的竹棚塌下堵塞入 口及緊急車輛通道；（二）濃煙及高溫經走火樓梯的「生口」滲入 大廈；（三）消防栓／喉轆系統失效，消防人員須將約80 公斤的便 攜式水泵搬上20 樓以上；（四）史無前例的多座大廈同時外牆起火。

就消防隊目何偉豪殉職一事，根據委員會目前掌握的證據，何消防 隊目原奉命前往宏昌閣2701 室救援，因途中協助輪椅長者而與隊伍 分離，誤入宏泰閣。閉路電視顯示其於15:16 進入宏泰閣。其於 15:22 發出求救訊息，約15:55 被發現倒臥於宏泰閣前的燃燒碎片上。 專責小組認為：何消防隊目留在宏泰閣是為了嘗試協助他人疏散， 展現了非凡的勇氣和崇高的使命感。 IX. 大火起因、火勢蔓延及造成重大傷亡的促成因素 -12- （一）大火起因：工人在宏福苑工地範圍內吸煙 36. 工人在工地範圍內吸煙的情況持續且有充分記錄——居民多次投訴、 物管公司人員親眼目睹、閉路電視拍到工人吸煙、工程會議記錄反 覆提及、宏業自設內部罰則（證明問題嚴重）。起火源頭挖出的瓦 礫中發現煙頭。宏業作為總承建商，對工地安全管理負有首要法定 責任，明知工人吸煙問題持續卻未能有效制止。置邦的跟進僅限於 將投訴轉達宏業，未有採取進一步行動。 37. 就政府部門採取的行動而言，勞工處於2024 年7 月至2025 年11 月 期間進行16 次突擊巡查及1 次突擊監察，頻率高於一般標準。勞工 處在上述巡查及監察行動後沒有就工人吸煙問題採取進一步執法行 動，除因巡查期間未有目擊工人吸煙外，亦受大火前就工地吸煙的 監管框架所限。根據《建築地盤（安全）規例》第53 條，凡任何建 築地盤使用或擬使用易燃液體或涉及火警危險的物質等，勞工處處 長可發出書面「禁止吸煙命令」，禁止在該建築地盤吸煙。按大火 前的監管框架，除受「禁止吸煙命令」規管的建築地盤外，工人於 建築地盤吸煙本身並不違反職安健條例，而這亦反映大火前規管架 構在政策意圖上的結構性設計。就宏福苑而言，宏福苑建築地盤未 有具備發出「禁止吸煙命令」的特定條件，勞工處因此沒有向其發 出「禁止吸煙命令」。因此，工人吸煙本身沒有違反職安健條例， 故勞工處未能採取進一步執法行動。勞工處共發出了三份建築地盤 巡查報告提醒宏業。 （二）火勢蔓延促成因素：使用未經阻燃性能認證的棚架保護網 38. 於2025 年7 月，證據顯示宏業時任董事何建業明確指示供應商購買 非阻燃棚網，且儘管供應商有提出反建議，仍然拒絕購買阻燃棚網。

-13- 2025 年9 月颱風後再次訂購非阻燃棚網。WhatsApp 訊息亦顯示宏業 曾在ICU 巡查前緊急購入115 張阻燃棚網作選擇性替換。事後政府 化驗所對從宏昌閣（起火大廈）取得的5 個棚網樣本進行測試，其 中4 個（80%）的殘燃時間超過GB 5725-2009 標準下的4 秒門檻。 39. 《建築物（建造）規例》第3 及16 條要求所有用於建築工程的物料 須適合其預定用途並經認可測試，且須採取適當預防措施。註冊檢 驗人員在《建築物條例》第30D 條下負有法定責任，須確保修葺物 料符合所有相關條例的要求。相關的作業備考及通告函件亦要求所 有在外牆裝設的保護網應具備適當的阻燃特性，並符合認可標準。 宏業蓄意使用非阻燃棚網並提供不可靠的測試證書以掩飾違規；鴻 毅/吳躍完全沒有履行其監督職責，沒有採取任何步驟核實棚網的阻 燃性能是否符合屋宇署通告函件及勞工處工作守則中明確列出的認 可標準。 40. 就政府部門採取的行動而言，勞工處於2024 年7 月主動要求宏業提 供阻燃測試證書並獲提供（事後發現為不可靠文件）。ICU 進行三 次涉及棚網快速燃燒測試的巡查（2024 年10 月28 日、11 月18 日及 2025 年10 月28 日），共於17 個隨機抽選地點進行測試。ICU 於華 懋大廈火災後亦主動向五個屋苑的註冊檢驗人員發出提醒電郵。 41. 惟面對承建商通過選擇性更換棚網進行的蓄意欺騙，上述措施未能 發現有關違規行為和濫用。 （三）火勢蔓延促成因素：使用聚氯乙烯泡沫板（發泡膠板）封蓋窗戶作 臨時防護

-14- 42. 2024 年6 月的工程會議記錄顯示，鴻毅曾警告發泡膠板為可燃物質， 宏業仍堅持使用。分包商確認受宏業董事何建業口頭指示以發泡膠 板封蓋所有住戶窗戶。宏業與法團主席的WhatsApp 對話確認宏業知 悉第一期已安裝的發泡膠板不具阻燃性能。 43. 宏業曾向ICU 人員明確表示僅會臨時及小範圍地使用發泡膠板（每 次三層、打鑿完成即拆除），但發泡膠板實際上在全屋苑範圍內大 規模使用超過一年，直至火災發生之日仍然封蓋在窗戶上。宏業向 ICU 人員所作的陳述完全虛假。鴻毅/吳躍作為負責監督工程的顧問 及註冊檢驗人員，亦完全沒有就發泡膠板的廣泛及長期使用提出關 注或採取任何監督行動。 44. 就政府部門採取的行動而言，ICU 於2024 年9 月至11 月進行三次涉 及發泡膠板的巡查。ICU 接納並倚賴了宏業的陳述，因此未有進一 步跟進。 （四）火勢蔓延促成因素：使用其他沒有阻燃性能的建築物料（尤其包括 塑料帆布） 45. 政府化驗所分析確認，在宏福苑使用的兩類帆布（主要由聚乙烯或 聚乙烯與聚丙烯的混合物製成）比棚網更易持續燃燒，並產生燃燒 液滴。專責小組的火災測試證實，非阻燃帆布令內角區域的小火發 展成為能消耗幾乎所有可燃物的大範圍猛烈火災。 46. 《建築物（建造）規例》第3 及16 條要求所有用於建築工程的物料 須適合其預定用途並經認可測試，且須採取適當預防措施。相關的 作業備考及通告函件亦要求所有在外牆裝設的塑膠帆布應具備適當 的阻燃特性，並符合認可標準。宏業及鴻毅/吳躍作為註冊承建商及

-15- 註冊檢驗人員，負有確保所有建築物料符合相關標準的首要法定責 任。 47. 由於在火災前並未收到針對塑料帆布阻燃性能的投訴或查詢，政府 相關部門未有就此具體採取行動。 （五）造成重大傷亡促成因素：因在走火樓梯間開設「生口」導致逃生途 徑失去安全防護 48. 宏業在所有八幢大廈的走火樓梯約每隔五層開設或允許開設「生 口」，以可燃木板或鋁塑板取代窗戶，讓工人進出外牆棚架。宏泰 閣38 名在梯間及公共地方罹難者中，28 人在梯間被發現。火災測試 證實木板在4 分40 秒內被點燃，而防火玻璃窗則保持完整並維持較 低的內部溫度。 49. 屋宇署確認在走火樓梯開設「生口」違反多項規定，包括違反《建 築物（建造）規例》第16 條，及《建築物消防安全守則》F5.6(a)條， 該條要求所有逃生途徑必須經常保持暢通無阻。《強制驗樓計劃及 強制驗窗計劃作業守則》明確要求註冊檢驗人員識別及向建築事務 監督報告在出口路線圍封牆或分隔牆、樓層及天花板的無防護開口。 鴻毅/吳躍完全沒有履行此責任。 50. 就政府部門採取的行動而言，勞工處在2025 年2 月巡查時發現棚架 與外牆之間的空隙（工人可能墜落超過2 米），但其關注點在於高 處工作墜落風險而非走火樓梯的「生口」。ICU 對被隨機抽選進行 審核基本檢查的兩份第一類小型工程申請（其中一份涉及F 座的走 火樓梯窗戶更換工程）進行審核時，雖然施工前的照片顯示窗戶已

-16- 被木板或鋁塑板取代，但審核人員將木板或鋁塑板理解為待更換窗 戶的臨時保護措施，因此未有作出查詢或採取相應行動。 （六）造成重大傷亡促成因素：宏福苑各座消防警鐘失效 51. 宏福苑的消防栓／喉轆系統（「FH/HR 系統」）及火警警報系統 （「FAS」）共用一個主電源開關。置邦的電工應宏業的指示，關 閉了所有八幢大廈增壓泵房的主電源開關（以排放消防水缸進行翻 新），同時令FH/HR 系統和FAS 失效。然而，排放消防水缸的技術 操作根本無須關閉主電源開關。 52. 中華發展獲宏業聘用提交SDN，但從未到訪現場、從未評估關閉的 需要或後果、從未親自進行關閉。其提交的SDN 僅勾選FH/HR 系統 （未有勾選FAS），令消防處不知悉FAS 同時失效。中華發展的董 事在口頭證供中承認其僅為「橡皮圖章」，並承認違反了消防處通 函中的全部責任。 53. 宏業明知自身非註冊消防裝置承辦商，仍指示非註冊承辦商進行消 防水缸維修工程，並聘用中華發展僅作為提交文件的橡皮圖章。 54. 宏泰消防於2025 年10 月16 日發現消防水缸已清空，於11 月19 日 發現主電源開關已被關閉（即知悉FAS 已停止運作，可能已超過一 個月），但未有通知消防處、未有向中華發展查詢，亦未有要求恢 復電源以進行測試，僅按指示繼續維修工作。 55. 置邦發出工作指示讓非持牌人員操作消防裝置，未能協調兩間承辦 商。

-17- 56. 就政府部門採取的行動而言，消防處接獲中華發展提交的SDN 後， 按既定程序進行風險評估及巡查（涉及宏福苑期間共26 次視察/巡 查）。惟事前的SDN 制度屬通報性質而非審批機制，並依賴承辦商 如實申報。 X. 救火及救援工作的成效檢視 57. 是次救火及救援工作在前所未有的條件下專業地進行。行動規模為 消防處歷來之最，所有347 個報告求助地點及所有八幢大廈其餘單 位均獲消防人員到場處理，行動持續43 小時。 58. 事後回顧顯示若干範疇的操作決定及制度安排，在制度及操作層面 或有改善空間。消防處已成立「特大型火警事故策略督導委員會」， 全面檢討滅火及救援策略、裝備及科技應用。但與此同時，獨立委 員會的專家亦確認，消防處在現場實際上可採取的額外行動極為有 限，不足以實質改變結果。 59. 就先集中人手控制火勢而言，消防處在大火初段決定集中資源於宏 昌閣及宏泰閣滅火，同時警方協助附近範圍的疏散。此乃消防處與 警方之間行之有效的協作安排。當時雖可選擇抽調人手進入其他大 廈作疏散，惟此決定受制於火勢蔓延速度及大廈出入口可能被燃燒 棚架及雜物堵塞等安全考慮。 60. 就火警升級機制而言，各次升級決定均顯示實際部署大幅超前於正 式火警級別。升級為三級時已出動約80%的三級標準部署量；升為 四級時已出動約五級標準的兩倍。正式的火警級別並非限制資源調 配的因素。各崗位的指揮官可隨時直接透過消防通訊中心要求增派 資源，且事實上已經如此行動。

-18- 61. 就999 電話處理而言，消防通訊中心（經設立支援中心後）平均在 約一分鐘內接聽轉介電話，並進行約1,500 通回撥電話，為被困居民 提供持續的安全指引及情況更新。獨立委員會主席在聽證會中亦特 別肯定回撥機制的成效。另外，警方與消防處之間以傳真傳送部份 資訊的做法不適合處理大規模事故，正進行聯合檢討以優化信息交 流機制。 62. 就緊急警示系統而言，該系統曾被考慮但未使用，原因為當時系統 未配置作地區性使用，且缺乏公眾教育。政府已啟動將系統配置為 地區性使用的工作，並正設計相關公眾教育計劃。 63. 就消防人員安全而言，消防員定位系統在高於約23 樓的高層建築物 中具有無法接收信號的限制。新的消防員定位系統已在採購中，測 試確認可在23 樓成功接收信號。新呼吸器系統已於2026 年1 月投入 使用，具備隊員間空氣共享功能及直接連接手提無線電的通訊系統。 64. 就其他公眾質疑而言，政府亦在書面總結陳詞中逐一回應，包括： 不同消防隊伍之間的協調問題、應否先拆除竹棚（操作上不可行、 甚至會適得其反）、應否使用直升機灑水、以及應否接受內地額外 消防人手。 XI. 各相關專業人士及非政府方的系統性機制濫用 65. 是次火災並非單一疏忽或單一制度弱點的結果，而是多名持份者在 一段時間內持續作出多方面的蓄意違法行為所致。負有首要責任的 專業人士及其他私營持份者蓄意欺瞞和敷衍塞責。每一項促成因素， 均可追溯至該等持份者的作為或不作為。更甚者，該等違法行為刻 意規避及破壞現有制度框架，嚴重阻礙及削弱政府的監管職能。

-19- XII. 監管架構的弱點及已推行/即將推行的改善措施 66. 就制度歷史來由與發展而言，相關監管架構（包括消防裝置規管自 1960 年代起發展、屋宇署與ICU 的授權安排自1992 年回歸前起沿 用、小型工程監管制度及強制驗樓計劃分別於2010 年及2012 年實 施）均經審慎制定、大部分亦經立法會審議，反映有關政策乃於制 定之時已在規管監督與專業自治之間取得平衡，屬深思熟慮的政策 決定。政策始終為人所採用並加以執行，相關政策之原意及機制在 專業人士及其他私營持份者依法、適當地採用及執行的情況下並無 根本問題、政府部門之間有所分工亦無根本問題；整體而言，弱點 主要在於面對蓄意合謀或完全怠忽職守之情況時，有關機制不足以 揭示有關違法行為及濫用的情況。 67. 經總結，政府在書面陳詞中點明了現行制度存在的五個系統性弱點： (1) 制度設計依賴專業人士的操守和能力，惟在面對蓄意合謀或完 全怠忽職守之情況時，不足以揭示有關違法行為及濫用的情況； (2) 以統計抽樣為基礎的審核機制不足以偵測蓄意和有組織的隱瞞、 有關違法行為及濫用的情況； (3) 程序指引及工作守則存在改善空間； (4) 屋宇署與ICU 之間溝通機制存在弱點； (5) 科技應用存在滯後。 68. 政府自火災後已提出了改善措施（見政府於2026 年6 月15 日提交的 改善措施一覽表），包括以下範疇。

-20- (1) 就消防裝置而言，主要措施包括SDN 由通報改為審批機制 （設60 天上限）、強制電子提交FS251（2026 年7 月1 日生 效）、引入物業管理公司法定管理責任、將註冊消防裝置承辦 商的永久註冊改為續期制、大幅提高罰則、以及接獲SDN 後 須主動檢查其他消防系統。 (2) 就建築物料而言，主要措施包括推出PNRC 85，落實棚網就地 抽樣檢查新制度（規定加密數碼簽署測試報告、上架前取樣檢 驗、隨機實地抽查）、2026 年3 月通告函件明確禁止在外牆或 窗戶使用可燃物料（例如發泡膠板）、以及考慮修訂《建築物 條例》規定指定建築物料需要符合指明的安全標準。 (3) 就強制驗樓計劃及小型工程而言，主要措施包括ICU 引入大型 維修項目至少每四個月一次的工地巡查、工地安全巡查抽選比 例提高至30%、屋宇署加強突擊巡查大型樓宇維修工程地盤 （至少每六個月一次）、以及研究大型維修工程棚架安全相隔 距離要求。 (4) 就專業人士規管而言，主要措施包括檢視《建築物條例》以加 強紀律處分及註冊續期考量、ICU 要求註冊檢驗人員提交定期 現場監督記錄、以及定期與註冊檢驗人員及承建商進行面對面 會議。 (5) 就跨部門溝通而言，主要措施包括ICU 與屋宇署加強溝通機制 （季度會議、指定聯絡橋樑、互派人員借調機制）、ICU 與消 防處建立雙向溝通機制、勞工處與屋宇署及消防處發展聯合巡 查安排、以及消防處優化個案轉介及跟進機制。

-21- (6) 就工地安全而言，主要措施包括全面禁止建築地盤吸煙、以及 修訂工作守則為踢腳板訂定物料要求。 (7) 就科技應用而言，主要措施包括第四代調配系統（100 條線路、 自動同步傳送資訊）、新消防員定位系統、以及電子入場控制 板。 職權範圍2 XIII. 從涉及職權範圍2 的證據所見的系統性議題 69. 競爭事務委員會（「競委會」）、廉政公署（「廉署」）及警方的 證據一致顯示，大型樓宇維修業界的圍標問題相當普遍、屬系統性 且積弊已久。具體手法包括壓低投標（圍標者不投標）、掩護式標 書、輪流圍標、瓜分市場、信息交換、共用資歷及虛構投標。有組 織犯罪集團透過圍標、賄賂、操控委任代表文書及利益衝突等手段 侵蝕樓宇維修採購過程。 70. 宏福苑為競委會2026 年3 月向競爭事務審裁處提出法律程序中的11 個屋苑之一，涉及合約總值估計接近7 億港元。 71. 顧問公司及註冊檢驗人員的角色尤為關鍵——廉署確認在若干調查 個案中，顧問公司委任的註冊檢驗人員實際上只是一個空殼，對項 目幾乎不進行監督，僅為滿足《建築物條例》的法定要求而受聘。 廉署的整體評估為：大型樓宇維修行業在很大程度上建基於信譽制 度，包含固有及明顯的結構性漏洞，形成自我延續的惡性循環。 XIV. 政府及相關部門的角色

-22- 72. 市區重建局（「市建局」）於2016 年推出「招標妥」計劃以減低圍 標風險。在宏福苑的案例中，委聘鴻毅為顧問的招標程序不在「招 標妥」涵蓋範圍內；「招標妥」雖用於2023 年承建商招標程序，但 市建局當時不審核投標分析報告中對宏業的評分是否合理，而是依 賴顧問公司（即鴻毅）。火災後，市建局正開發加強版「招標妥 2.0」，包括經警方及廉署背景審查的預審名單及市建局親自進行標 書審核。 73. 競委會早於2016 年市場研究中已識別大型樓宇維修業界存在的問題， 2022 年起進行五項重大調查，當中包括與警方有組織罪案及三合會 調查科合作，並於2026 年3 月向競爭事務審裁處提出法律程序。競 委會建議的立法改革包括在罰款程序中明確規定民事舉證準則、加 入法定推定條文、增加罰則及取消董事資格年期、以及要求大型招 標使用法定聲明。 74. 廉署在過去三年（2023 至2025 年）接獲239 宗涉及樓宇維修的貪污 投訴，當中220 宗（92%）獲正式調查，137 人被捕。因案件性質隱 秘且涉及有組織犯罪，成功檢控門檻甚高。廉署亦透過早期介入機 制，主動向業主預警風險並阻撓犯罪集團的計劃。 75. 警務處透過「復安居計劃」（RenoSafe），自2013 年起進行宣傳、 教育及預防犯罪工作，至2026 年1 月曾到訪7,100 幢樓宇。警方建 議加強成員之間的信息交流、設立具刑事罰則的專門法例，以及引 入免罪條款和法定保護舉報人。 76. 民政事務總署在大廈管理方面的角色屬促進及推動性質。其職責範 圍限於《建築物管理條例》下的大廈管理程序事宜，不延伸至監督

-23- 施工工程、物料或消防安全。大埔民政事務處積極處理了44 宗涉及 宏福苑的相關投訴、發出多封勸喻信函、出席多次業主大會並就 《建築物管理條例》的程序提供建議。舉例而言，在2024 年9 月6 日特別業主大會上，當時的法團主席離場企圖終止會議，民政事務 處代表即時介入，向業主說明其在《建築物管理條例》下的權利， 確保會議得以合法繼續進行。 XV. 與職權範圍2 有關已推行/即將推行的改善措施 77. 就招標改革而言，發展局聯同市建局正部署推出加強版「招標妥」 （已批准撥款3 億元），包括推出通過警方及廉署背景審查，更嚴 謹的顧問及承建商「預審名單」，、市建局把關招標和評標工作、 以及要求顧問及承建商在重要工程節點向市建局報告，目標為2026 年第四季推出。 78. 就《建築物管理條例》修訂而言，民政及青年事務局正推進五大修 訂方向：（一）提高大型維修工程及大額採購決定的出席及投票門 檻（包括「親身投票」門檻）及規定在議決大型維修工程的業主大 會舉行前召開簡介會，以確保讓業主充分了解工程詳情；（二）完 善委任代表文書制度（包括設立限制持有代表文書的上限、進一步 增設公開名單張貼已簽署委任代表文書業主的要求、容許委任人自 願註明投票意向、加入聲明條款）；（三）完善利益申報制度（包 括顧問及承建商須披露利益衝突、虛假申報屬刑事罪行）；（四） 進一步保障業主在業主大會的召開、議程、取消、延期或暫停等會 議程序上的權益及確保法團依法行事（包括賦權民政及青年事務局 局長指派指定人士召開業主大會）；（五）加強主管當局權力（在

-24- 特殊情況下介入協助）。上述方向已於2026 年2 月諮詢立法會，公 眾諮詢計劃於2026 年年中進行。 79. 就《競爭條例》（第619 章）檢討而言，商務及經濟發展局正與競 委會合作，從多個角度研究立法修訂需要，以加強對反競爭行為的 阻嚇力。競委會亦已完成制定加強版「非合謀條款」，包括明確指 出違反條款可構成刑事罪行及要求投標者作出法定聲明。 80. 就業界良好作業而言，建造業議會正制定大型樓宇維修業界良好作 業指引，包括就分包制度提出建議，預計於2026 年內公布。 XVI. 總結 81. 是次大火造成的嚴重人命傷亡令政府及整個社會深感沉痛。證據確 立，獲委以首要責任的專業人士及承建商濫用了旨在保障公眾的機 制，辜負了政府及監管架構對他們的信任和期望，並透過蓄意的違 法行為及嚴重疏忽，造成了這場大火。 82. 政府自火災後已迅速採取行動，就多個關鍵範疇檢討措施和做法， 並主動推行改善措施。政府懇請獨立委員會按其認為適當的方式， 根據證據作出事實裁斷及建議。政府承諾對獨立委員會的建議作出 實質的回應，以確保制度能夠抵禦宏福苑所發生的有組織、合謀式 蓄意濫用行為。 於2026 年7 月14 日向就大埔宏福苑火災成立的獨立委員會呈交 孫靖乾 資深大律師 卓元暢 資深大律師 陸栩然 大律師 劉逸冲 大律師 政府相關決策局與部門代表大律師

FD06226 ｜ 2025_港澳台_香港大埔宏福苑-特别重大火灾事故调查报告(梁炳基结案陈词).pdf

分类：06_境外及港澳台调查报告 ｜ 年份：2025 ｜ 地域：香港 ｜ 严重程度：特别重大 ｜ 场所： ｜ 起火原因： ｜ 来源格式：pdf

1 Independent Committee in relation to the fire at Wang Fuk Court in Tai Po

Written Closing Address of Mr Leung Ping Kay

[A/1/ §2]

Bundle A/Page 1/Paragraph 2

[T(C)/D1/2/3]

Chinese Transcript / Day 1 / Page 2 / Line 3

A. Introduction

At the outset, Mr. Leung wishes to express his deepest condolences to the families of those who lost their lives, and his deepest sympathy to all those who suffered injury, loss and distress as a result of this tragic incident.

Of his own volition, Mr. Leung has been willing throughout to assist the Independent Committee (“Committee”) in its search for the truth. It is for that reason that he testified personally before the Committee, and has provided all relevant documents and information within his possession.

By this written closing submission, Mr. Leung seeks to clarify certain matters arising from the live and documentary evidence, as well as to make some observations to hopefully assist the Committee in its fact-finding exercise.

B. Overview

This Committee was established by the Chief Executive to inquire into the matters set out in its Terms of Reference [A1/1-4], including the causes and circumstances of the fire at Wang Fuk Court on 26 November 2025 (the “Fire”), the reasons for its rapid spread, the resulting casualties and property damage, and to make recommendations arising therefrom. Issues concerning the legal liabilities of any person fall outside the Committee’s remit.

Mr. Leung participated in this inquiry in his personal capacity as an involved party. Although he is one of the directors of China Status Development and

2 Engineering Company Limited (“China Status”), he does not represent China Status in these proceedings, nor does he purport to represent any other person who has not participated in this inquiry.

• To assist the Committee’s inquiry, Mr. Leung provided three witness

statements: (a) 1st Witness Statement dated 2 March 2026 WS2/1509-1517;

(b) 2nd Witness Statement dated 2 April 2026 WS7/1875-1890; and

(c) 3rd Witness Statement dated 21 May 2026 WS21/2359-2361.

He also attended the evidential hearing and gave oral evidence before the Committee on 8 April 2026 [T(C)/D9].

Various experts have provided statements, reports and oral evidence to assist the Committee. Among them, the following are relevant to the issues relating to Mr. Leung. In particular:

(a) The Inter-Departmental Fire Investigation Task Force’s (“IFITF”) Expert Report (“IFITF’s Report”) published in May 2026 [ER1]; and

(b) the Expert Report dated 15 June 2026 (“IC’s Report”) by Prof. Asif Sohail Usmani and Prof. Jiang Liming (collectively the “IC Experts”), who were appointed by the Committee as experts [ER3]; and

(c) Mr. YIU Men-yeung’s oral evidence [T(C)/D26].

3 C. Issues relating to Mr. Leung

• As reflected in the Committee’s oral opening [T(C)/D2/13-14], the issues

relating to Mr. Leung may be summarised as follows: (a) Whether China Status assumed any supervisory role in relation to the relevant fire service works, or merely assisted in the submission of the relevant documents to the Fire Services Department (“FSD”) (“Issue (a)”);

(b) Whether, under the applicable statutory and regulatory regime, the shutdown of the relevant fire service installations could properly be effected by a person other than the Registered Fire Service Installation Contractor (“RFSIC”) responsible for the shutdown applications (“Issue (b)”); and

(c) Whether China Status properly assessed the necessity for each application to extend the shutdown of the relevant fire service installations, particularly where the shutdown continued for a prolonged period (“Issue (c)”).

• During Mr. Leung’s oral testimony, Counsel for the Committee further

questioned Mr. Leung regarding his responsibility for the failure of the fire alarm system on the day of the incident [T(C)/D9/97]. Accordingly, these submissions also address: (d) The role of the fire alarm system in the Fire (“Issue (d)”).

• By this written closing submission, Mr. Leung wishes to set out his

observations on the above four issues, with a view to assisting the Committee’s fact-finding exercise. 4 D. Mr. Leung’s Case

Mr. Leung’s evidence is straightforward. He accepts that neither he nor, to his knowledge, any employee of China Status attended Wang Fuk Court to inspect the relevant fire service installations before the relevant SDN (“Shut Down Notice”) applications were submitted [WS2/1517/48]. However, that was not because he intended to circumvent, or assist any other person to circumvent, the applicable legal requirements.

Mr. Leung’s evidence is that he acted throughout in the honest belief that Prestige Construction & Engineering Co. Limited (宏業建築工程有限公司) (“PC&E”) was itself an RFSIC and that the necessary site inspections would be carried out by PC&E or those acting on its behalf before China Status submitted the relevant SDN applications [WS7/1884-1885/§§53-55].

E. Factual Background

Before addressing the four issues identified in Section C above, it would be beneficial to first consider the relevant factual background. In particular, it is necessary to understand the relationship between Mr. Leung and China Status, and between China Status and PC&E, in order to place the relevant events in their proper context.

Mr. Leung joined China Status in or around September 2014. China Status is an RFSIC registered under both Class 1 and Class 2 [WS7/1876/§7]. Mr. Leung is one of its directors and his duties include responsibility for the company’s administrative matters, including the preparation and submission of tenders and quotations, planning works under the Fire Safety (Buildings) Ordinance (Cap. 572), applying for SDNs, liaising with government departments and attending site inspections for quotation purposes [WS7/1877/§§11-12]. He is also an authorised signatory of China Status [WS7/1878/§13].

5

1. Mr. Leung first became acquainted with PC&E whilst employed by his

previous employer, Marvel Fire Engineering Co. Ltd., in the course of a large- scale project where PC&E was responsible for the building works and Marvel Fire Engineering Co. Ltd. was responsible for the fire service installations [WS7/1881/§33]. From around 2017 onwards, Mr. Leung continued to have regular dealings with Gordon Ho, director of PC&E, in connection with projects requiring fire service installation works [WS7/1881/§§34-35]. Over the years, Mr. Leung and PC&E had established a good working relationship.

On a number of occasions, Mr. Leung attended tender interviews together with Gordon Ho. During those meetings, Mr. Leung understood PC&E to be undertaking projects involving fire service installation works, and Gordon always represented “Prestige” (“宏業”) as an RFSIC [WS7/1882/§39].

In relation to the project at Wang Fuk Court, China Status’s involvement included the provision of additional fire extinguishers [WS2/1509/§4] and the submission of the relevant SDN applications in connection with the repair of the fire service water tanks [WS7/1883/§§43-46]. China Status, in its line of business, did not itself carry out the concrete water tank repair works.

F. Analysis: Issues (a) - (c)

The first three issues identified in Section C overlap substantially and may conveniently be considered together. In substance, they give rise to two principal questions.

First, what was the legal and practical position concerning the division of responsibilities in relation to fire service installation works?

Secondly, what was China Status’s supervisory role, based on Mr. Leung’s knowledge, at the Wang Fuk Court project?

6 F1. Division of Responsibilities in Fire Service Installation Works

At the outset, it is important to clarify Mr. Leung’s position. Mr. Leung has never suggested that fire service installation works may be carried out without the involvement of an RFSIC. His evidence is that such works must either be carried out or supervised by an RFSIC [WS2/1515/§36; T(C)/D9/94/17-23]. He does not suggest that an RFSIC who signs and submits the relevant documents thereby becomes completely immune from liability merely because part of the works was carried out by another RFSIC [T(C)/D9/94/3-6].

During his oral evidence, when asked by the Chairman whether China Status, as the RFSIC which submitted the SDN, would remain responsible if something went wrong, notwithstanding that PC&E had been at fault in turning off the main power switch, Mr. Leung answered in the affirmative [T(C)/D9/90/30-36].

Mr. Leung’s stance is that the applicable legal framework permits one RFSIC to arrange for another RFSIC to undertake part of the relevant fire service installation works on its behalf.

That position is expressly reflected in Regulation 6A(3) of the Fire Service (Installation Contractors) Regulations (Cap. 95A) [B2/153-154], which provides:

“6A. Illness or absence from Hong Kong … (3) Nothing in paragraph (2) shall prohibit any work being undertaken on behalf of a registered contractor registered in class 1 or 2 by another registered contractor registered in the same class.”

• Regulation 6A(3) therefore contemplates situations where work is undertaken

on behalf of one RFSIC by another RFSIC. R.6A(3) is not relied upon for the illness-or-absence situation in paragraph (2). Its significance lies in what it 7 presupposes: the legislature would not have expressly provided that such delegation is not prohibited unless it were already an accepted and common practice. It follows that the FSD would have appreciated that the RFSIC signing an FS251 or SDN may not necessarily be the same entity carrying out every aspect of the physical works.

Reference was made during Mr. Leung’s oral evidence to FSD Circular Letter No. 1/2021 B2/1302-1311 [T(C)/D9/56-61]. However, it is submitted that, at most, the Circular Letter provides that the RFSIC which has inspected the relevant fire service installations is the most appropriate party to notify the FSD. It does not purport to address the situation where more than one RFSIC is involved in the same project or where part of the relevant works is undertaken by another RFSIC, such as the situation contemplated in R.6A(3). Accordingly, the Circular Letter does not detract from the statutory framework discussed above.

The same understanding is also reflected in the evidence of Mr. Keung of the FSD:

「關有禮大律師：所以你同唔同意其實消防處其實都認同即係個 維修個水缸，其實就個註冊承辦商未必真係要親自嚟做嗰個維修， 不過要監住嗰個維修工程？

姜世明先生：因為承辦商係公司，所以公司佢都係要有佢嘅認可 人士，佢要做好個監督嘅責任，一般要監督好自己嘅員工去做呢 啲嘢，唔該。

關有禮大律師：咁未必係自己嘅員工，即係可能係另外一個承辦 商，不過佢要監督住？

姜世明先生：同意，係。」（粗體後加，以資強調） [T(C)/D10/87/25-30]

8

1. On this basis, it is submitted that the FSD accepts in practice that the RFSIC

submitting an FS251 and SDN may not necessarily be the same entity carrying out the physical repair works. The mere fact that China Status did not itself carry out the repair works is therefore not inconsistent with the applicable legal framework and practice.

F2. China Status and its Supervisory Role

• It is submitted that the question of whether China Status assumed any

supervisory role has to be considered against the circumstances of the present case. The nature and extent of supervision required necessarily varies depending on various factors such as the nature and complexity of the works, the experience and expertise of the person undertaking them, and the relationship between the parties. As such, supervisory role assumed by China Status in the Wang Fuk Court project should be assessed by reference to the circumstances known to Mr. Leung at the material time. The level of supervision required in the present case

In the present case, several features are material in determining the level of supervision required.

First, at the material time, Mr. Leung genuinely believed that PC&E was itself an RFSIC, although that belief turned out to be mistaken. Mr. Leung explained the basis for such a belief in his Second Statement [WS7/1882/§39]:

(a) First, Gordon Ho had consistently represented to him that “Prestige” was an RFSIC;

(b) Secondly, during tender interviews attended by Mr. Leung together with Gordon, “Prestige” was introduced as an RFSIC and documents used during those interviews likewise described “Prestige” as an RFSIC; and

9 (c) Thirdly, Mr. Leung recalled checking the List of Registered Fire Service Installation Contractors and believed that “Prestige” appeared on that list. (Although, during the preparation of the Second Statement, he noted that PC&E did not in fact appear on the list, another company with a highly similar name did [WS7/1882/§40].)

During Mr. Leung’s oral evidence, both Counsel for the Committee and ISS East Point Properties Ltd. challenged Mr. Leung’s assertion that he genuinely believed PC&E to be an RFSIC. Notwithstanding that questioning, Mr. Leung’s evidence remained consistent and unshaken [Exchange with Counsel for the Committee: T(C)/D9/88/25-33 & T(C)/D9/90/9-11, 26-29] [Exchange with Counsel for ISS East Point Properties Ltd.: T(C)/D9/100/13-25]. He maintained that he had checked the relevant list and genuinely believed that PC&E was an RFSIC [T(C)/D9/89/21-34].

Second, it should also be emphasised that, prior to the Wang Fuk Court project, the two companies had cooperated on a number of previous projects over several years, including projects at Mayland Court in Causeway Bay and Chung Sing Building in Tai Kok Tsui [WS7/1882-1883/§§41-42]. Those projects proceeded without issue. China Status and PC&E had established a good working relationship. It is submitted that this provided a good foundation, albeit mistaken, for Mr. Leung to proceed on the basis that the representations made by PC&E could be relied upon.

It is also submitted that, in those circumstances, the degree of supervision required from China Status was different from a case where the underlying works were carried out by an unfamiliar contractor or a non-RFSIC.

The supervisory role of China Status

• Mr. Leung readily accepted that, regarding the Wang Fuk Court project, he did

not attend the site to inspect the fire service water tanks before the relevant SDN applications were submitted [WS2/1517/§48; T(C)/D9/63-64]. His evidence is that he proceeded in that manner because he genuinely, albeit 10 mistakenly, believed that PC&E was itself an RFSIC. Mr. Leung was also explicitly told by Mr. Cheung, the foreman of PC&E, that the physical shutdown would be arranged, and that China Status’s personnel would not be permitted to attend the premises [WS2/1515/§37].

Upon that understanding, together with the parties’ previous course of dealings, Mr. Leung proceeded on the assumption that the necessary site inspection and arrangements for the shutdown of the relevant fire service installations would be undertaken or supervised by an RFSIC.

It is nonetheless submitted that the question of whether China Status assumed a supervisory role should be assessed with regard to the steps taken by Mr. Leung and the circumstances known to him at the material time.

As stated in his Second Statement, before each renewal application, Mr. Leung contacted Mr. Cheung to enquire about the progress of the repair works and requested that he be notified immediately once the works had been completed [WS7/1885/§§60-61]. According to the telephone records, between mid- March 2025 and November 2025, Mr. Leung made 85 telephone calls to Mr. Cheung [WS21/2360-2361/§§9-10]. Despite his numerous and repeated enquiries regarding the progress of the repair works, Mr. Leung was never informed by PC&E that the works had been completed [WS7/1888/§74].

It is accepted that some of the SDNs remained in force for several months. However, that fact alone gave Mr. Leung no reason to suspect that the information provided by PC&E was inaccurate. Mr. Keung of FSD accepted that it is not unusual for repair works to fire service water tanks to take several months to complete [T(C)/D10/69/5-8]. It is submitted that there was nothing inherently unusual, from Mr. Leung’s perspective, in being informed that the repair works were still ongoing.

The witness statements of the workers of Red Sun Construct (Asia) Engineering Limited and Tin Hung Engineering Co. show that the repair works to the fire service water tanks in various blocks were completed

11 between September and November 2025 [C1-2/1191/§8; C1-2/1179/§6]. However, Mr. Leung’s evidence, which has not been contradicted, is that PC&E never informed him that those works had been completed, notwithstanding his repeated requests that he be notified immediately upon completion [WS7/1885/§61]. Likewise, Mr. Leung was never informed that certain repaired fire service water tanks had been converted for temporary fresh water use [WS7/1887/§72].

It should also be added that Counsel for the Committee suggested that it was implausible for PC&E, having secured a renovation project worth HK$300 million, to lack the manpower to deal with the SDN renewal paperwork every 14 days. Mr. Leung, however, was unequivocal that this was the explanation given to him by PC&E, and he had no reason at the time to disbelieve it [T(C)/D9/90/18-20].

In those circumstances, and having regard to the previous course of dealings and the good working relationship between China Status and PC&E, Mr. Leung had no reason to suspect that PC&E was withholding material information. PC&E likewise had no apparent commercial reason to prolong the SDNs unnecessarily, at least from Mr. Leung’s perspective.

The Quotation and the Fixed Fee

During the evidential hearing, attention was given to the quotation issued by China Status, which referred to an anticipated duration of “1 year”. Mr. Leung explained in both his Second Statement [WS7/1884/§49] and oral evidence [T(C)/D9/76/5-14] that this referred only to his general understanding of the anticipated duration of the Wang Fuk Court project as a whole, not that any individual SDN would remain valid for one year. That explanation is consistent with the SDN applications, which were submitted between April and September 2025 for different buildings at different times [WS2/1511/§16].

Mr. Leung was challenged regarding his evidence that China Status charged a fixed fee for the project regardless of the number of renewal applications

12 required [T(C)/D9/75/16-32]. It is respectfully submitted that fixed-fee quotations are not uncommon in commercial practice. Whether such an arrangement ultimately proves to be commercially advantageous or disadvantageous depends upon how the project unfolds, and that commercial risk is borne by China Status. The mere fact that China Status agreed to charge a fixed fee does not render Mr. Leung’s evidence improbable, nor does it suggest any improper motive for the renewal of the SDNs.

G. Matters arising from Mr. Leung’s Oral Evidence

• Before turning to Issue (d), it is convenient to first clarify two matters arising

from Mr. Leung’s oral evidence: namely, the “rubber stamp” allegation, and alleged inconsistency between Mr. Leung’s First and Second Statements. G1. The “Rubber Stamp” Allegation

During his oral evidence, Mr. Leung accepted Counsel for the Committee’s suggestion that China Status acted as a “rubber stamp” - it submitted the SDNs and the subsequent renewal applications as requested by PC&E. However, Mr. Leung’s acceptance must be understood in its proper context.

The relevant exchange is as follows:

「杜淦堃資深大律師：唔。所以個情況就係咁嘞，宏業叫你哋交 SDN，你哋就交，係咪？

梁秉基先生：係。

杜淦堃資深大律師：你哋冇諗過要做任何嘢，佢哋叫你做，你哋 就做，同唔同意？

梁秉基先生：同意，但係可唔可以講？

13 杜淦堃資深大律師：我知道你有解釋，你嘅解釋喺你第二份證人 供詞裏面講咗。我一陣間會慢慢同你探討你嘅解釋。

梁秉基先生：Okay。

杜淦堃資深大律師：但係就頭先嘅講法，即係事實上嚟講你係同 意嘅，係咪？

梁秉基先生：係，冇落過去嘅。

杜淦堃資深大律師：唔，只不過你係有解釋點解你咁去做，咁講 公唔公道？

梁秉基先生：係。

杜淦堃資深大律師：唔。咁你同唔同意呀？所以其實中華發展一 開始交 SDN 畀消防處去關閉有關嘅系統，到之後每一次嘅延期， 其實你哋都係好似一個橡皮圖章咁，人哋叫你做你就做，同意嘛？

梁秉基先生：係。」（粗體後加，以資強調）[T(C)/D9/64/4-18]

Immediately before putting the “rubber stamp” proposition to Mr. Leung, Counsel for the Committee invited Mr. Leung to answer the question on the footing that his explanation was to be left out of account. It was only in that context that Mr. Leung accepted that, viewed purely as a description of the sequence of events and without regard to his explanation, the expression “rubber stamp” objectively described China Status’s conduct.

The Committee is respectfully invited not to read Mr. Leung’s answer in isolation or as an acceptance that China Status acted without any basis.

14 G2. The Alleged Inconsistency between the First and Second Witness Statements

During his oral evidence, Counsel for the Committee suggested that Mr. Leung’s First and Second Statements were inconsistent [T(C)/D9/93/13-22]. In particular, it was suggested that, in the First Statement, Mr. Leung considered it proper to assist PC&E because PC&E had already engaged another RFSIC [WS2/1512-1513/§22], whereas in the Second Statement, he explained that he proceeded on the basis that he believed PC&E was itself an RFSIC [WS7/1882/§39].

It is submitted that this allegation arises from a misreading of the First Statement and, in particular, the question to which Mr. Leung was responding.

In the First Statement, Mr. Leung was asked by the Committee’s solicitors, Messrs. Lo & Lo, inter alia, why China Status had been engaged during the Wang Fuk Court renovation when another RFSIC, namely Victory Fire Engineering Limited (“Victory Fire”), had already been engaged:

“4. Please explain why it was necessary to engage China Status as a separate FSI Contractor during the Wang Fuk Court Renovation when another FSI contractor (which we understand to be Victory Fire Engineering Limited [“Victory Fire”]) had already been engaged to carry out annual inspection of fire installations and equipment in Wang Fuk Court.” (emphasis added)[WS2/1502/§4]

• In response, Mr. Leung answered in his First Statement:

“Question 4

• When I was initially approached by PC&E, I presumed PC&E would

have already engaged another FSI contractor for the Wang Fuk Court Renovation, no explanation was provided by PC&E as to why China Status had to be engaged to make these FSD applications. However, I did not give much thought as to why services from a second FSI 15 contractor (such as China Status) would be required, nor did I speculate on this.” [WS2/1512-1513/§22]

Mr. Leung’s answer was directed solely to explaining why PC&E had engaged China Status notwithstanding the involvement of another RFSIC. There could have been numerous commercial explanations, for example, PC&E might have wanted to engage different RFSICs for different aspects of the project. The point, however, is that Mr. Leung simply did not know the reason and did not purport to speculate. More importantly, his answer did not purport to explain why he considered it proper for China Status to assist PC&E with the SDN applications. That issue was addressed in the Second Statement [WS7/1883/§44].

Properly understood, the two Statements address different questions and are entirely consistent with one another.

H. Issue (d): The role of the fire alarm system in the present incident

Mr. Leung accepts that, had the fire alarm system been operational at the material time, it is possible that the number of casualties might have been reduced [T(C)/D9/97/21-22]. Nevertheless, it is submitted that the role of the fire alarm system should be assessed together with the other factors specific to this particular incident.

Both the IFITF and the IC Experts identified a number of critical factors contributing to the high number of casualties. While the failure of the fire alarm system was one such factor [ER1/203/§10.1.1; ER3/2247/§6.6.1], it is submitted that the practical effectiveness of a fire alarm system might have been diminished by the rapid loss of the available means of evacuation and the residents’ impaired ability to appreciate the seriousness of the Fire.

16 H1. The rapidly compromised means of evacuation

It is submitted that the practical effectiveness of the fire alarm system in Wang Cheong House might have been significantly constrained by the rapid and swift deterioration of the means of evacuation. In reality, the evacuation window might have been much shorter than the theoretical evacuation window of no more than 10 minutes identified by the IFITF [ER1/215/§10.4.4].

A security guard attempted to activate the manual fire alarm at 1448 hours, approximately three minutes before the Fire was officially reported to the FSD at 1451 hours, but the attempt was unsuccessful [ER1/215/§10.4.3; ER2- 1/578/§2].

Mr. Yiu Men-yeung, leader of the IFITF, opined that since the fire engulfed the entire east re-entrant at 1458 hours, the staircase of Wang Cheong House also became untenable at that moment [WS6/1844/§20]. Echoing this opinion, the IFITF concluded that, had the fire alarm system been operational, residents might have received a warning during the key escape window of no more than 10 minutes between 1448 hours and 1458 hours:

“Had the FAS been operational, Ms. CHUNG’s activation attempt at 1448 hours could have provided residents with a critical evacuation alert during the key escape window between 1448 hours and 1458 hours, when escape routes were still tenable…” [ER1/215/§10.4.4]

• The IC Experts reached a similar conclusion but considered that the staircase

had in fact become unsafe earlier. They referred to evidence that the staircase on the 14th floor of Wang Cheong House was already filled with thick black smoke between 1456 and 1457 hours [ER2-1/708/§4] and concluded that at 1456 hours, the staircase had ceased to function as a place of safety [ER3/2234/§4.4.14]. 17

1. It is submitted that, in reality, residents may have had considerably less time

to evacuate safely than the theoretical evacuation window of no more than 10 minutes identified by the IFITF, for the following reasons:

(a) Given that the fire originated on the flat roof outside Flats 104 and 105 and spread upwards [ER1/14/§1.3.1; ER3/2167/§3.2.2], it follows that the staircase below the 14th floor would likely have been affected by smoke before 1456 hours;

(b) This is further supported by Professor Yuen’s observation, accepted by the IC Experts, that fire and smoke could infiltrate the staircase through gaps and openings in the movable boards even before those boards were completely burned through [ER2-2/1191/§2.6.7; ER3/2247/§6.5.3]; and

(c) Once smoke had entered the staircase, residents would effectively have no safe means of evacuation, as they should not evacuate through a smoke-filled staircase and should not use lifts during a fire [T(C)/D26/44/3-17].

H2. The effect of the polystyrene window coverings

The effectiveness of a fire alarm system also depends upon residents being able to assess the situation after hearing the alarm and decide whether evacuation is appropriate. It is submitted that, in the present case, that ability was materially impaired by the polystyrene window coverings.

It is neither realistic to assume nor advisable that residents should immediately evacuate solely upon hearing a fire alarm. As Mr. Yiu explained in his oral evidence, evacuation is not invariably the safest course of action. Depending upon the circumstances, remaining inside one’s own unit may be the safer option [T(C)/D26/44/11-12].

A resident hearing a fire alarm would naturally seek to assess the situation by reference to visible smoke or flames, the smell of burning, shouting, or other

18 indications of fire. However, the polystyrene window coverings substantially obstructed residents’ ability to observe the Fire. The IFITF’s survey findings likewise indicate that only an extremely small proportion of residents became aware of the fire through actually seeing the Fire:

“Among the 291 witness statements, only 43 individuals (14.7%) reported seeing fire or smoke. Similarly, among the 579 questionnaires, only 48 respondents (8.3%) indicated that they had witnessed the fire…” [ER1/218/10.5.3]

In those circumstances, even if the fire alarm system had functioned, residents might still have been unable to make a timely and informed decision as to whether evacuation was necessary or whether the available evacuation route remained safe.

Accordingly, whilst the failure of the fire alarm system undoubtedly formed part of the overall circumstances leading to this tragedy, its practical effectiveness might have been significantly curtailed by the rapidly deteriorating conditions within the staircases and the inability of many residents to appreciate the seriousness of the Fire. It follows that the failure of the fire alarm system should be considered together with those other critical factors, rather than in isolation.

H3. The integrity of the fire alarm system

Finally, it is submitted, when considering the role of the fire alarm system in the Fire, one should not too readily assume that the fire alarm system would have been operational during the Fire if the main switch (“刀掣”) had remained on.

Regarding Wang Chi House, which was only minimally affected by the Fire and in respect of which Mr. Keung opined that the fire alarm system should have remained intact and undamaged, the fire alarm system nevertheless could not be actuated during the post-fire investigation and was only restored to

19 operation after replacement of the fuses [WS1/140-141/§10.11; ER2-4/1811]. Mr. Keung accepted that he could not exclude the possibility that, even if the main switch of Wang Chi House had remained on during the Fire, the fire alarm system might still not have operated [T(C)/D10/80/27-30].

A similar observation could be made in respect of Wang Tao House, which was likewise “not affected or significantly affected” by the Fire [WS4/1800/§4.3]. There was evidence suggesting that the main switch had been restored during the Fire, yet the fire alarm system still could not be activated [ER2-4/1769/§7].

As regards Wang Kin House and Wang Shing House, which were more seriously affected by the Fire and whose fire alarm systems likewise could not be actuated during the post-fire investigation, similar observations may nevertheless be made. Although it is accepted that the Fire may have damaged the relevant circuitry, the post-fire investigation does not eliminate the possibility that the fire alarm systems were already not fully functional before the Fire.

It is further noted that, according to the post-fire investigation, the control fuses of the fire alarm systems in all buildings, with the exception of Wang Cheong House, were found to have blown [ER2-4/1816]. Mr. Keung testified that where the fuse is blown, a fire alarm cannot be activated whether the main switch is in the “ON” or “OFF” position [T(C)/D10/80/17-20].

It is accepted that the Fire may have caused those control fuses to blow. However, that is not the only possible explanation. Significantly, Wang Cheong House, despite sustaining the most severe fire damage, was the only building whose control fuse remained intact after the Fire. In those circumstances, the post-fire investigation does not permit a firm conclusion that the blown fuses in the other buildings were necessarily caused by the Fire.

The above is not intended to suggest that the fire alarm system would necessarily have failed, regardless of the position of the main switch. It simply

20 demonstrates that one should not too readily assume that, had the main switch remained on during the Fire, the fire alarm system would necessarily have operated. Caution should therefore be exercised before concluding that the position of the main switch was the sole factor determining whether the fire alarm system would have been functional during the Fire.

I. Conclusion

• Finally, Mr. Leung reiterates his sincere sympathy to all those affected by the

Fire. He respectfully hopes that the above observations will assist the Committee in its fact-finding exercise and in reaching a full, balanced and informed understanding of the matters relating to him. Dated this 6th day of July 2026.

Jonathan Kwan

Aaron Chan

Counsel for Leung Ping Kay

FD06227 ｜ 2025_港澳台_香港大埔宏福苑-特别重大火灾事故调查报告(消防工程专家意见).pdf

分类：06_境外及港澳台调查报告 ｜ 年份：2025 ｜ 地域：香港 ｜ 严重程度：特别重大 ｜ 场所： ｜ 起火原因： ｜ 来源格式：pdf

These slides are extracted from the presentation by Prof. Asif Sohail Usmani and Prof. Jiang Liming, Fire Engineering Experts appointed by the Independent Committee, at the Evidential Hearing on 25 June 2026. They summarise the experts’ recommendations and are published with priority to facilitate public discussion.

Recommendations for immediate implementation

1. Do not permit simultaneous cladding of high-rise buildings with combustible temporary works that are

adjacent or in the vicinity of each other.

1. Architectural features such as the re-entrants in Wang Fuk Court should be considered as a part of the

building, as a special kind of the vertical shaft.

1. For high-rise building facades under renovation a higher regulatory bar should be set where buildings remain

occupied during the works.

1. In addition to the duration of the project, other considerations in approval of the repair/renovation works

should be any special features of the building, such as its geometry, distribution and locations of windows and openings and any exits and entrances, provision of refuge floors etc.

1. Continuous monitoring of the site should be undertaken using currently available automated monitoring

systems based on computer vision with independent detection and potentially suppression systems.

1. No combustibles should be allowed on any part of the building façade that could enable heat and smoke to

enter the building and block evacuation routes.

1. No combustibles should be present above the ground level exits that could allow materials from the

temporary works to fall and block exits.

1. Stricter oversight must be maintained to ensure that all the materials used in temporary works have been

adequately treated with fire retardant compounds with proper certification and source identification.

1. Site workers must receive regular training to maintain awareness of fire hazards and remain vigilant.
2. An intensive induction of occupants and workers must be conducted before the commencement of the

repair/renovation works followed by routine fire drills. 11.The building management structure (PMC/OC) and their coordination with HA and MBIS regimes should be reviewed. 81

Recommendations that require research

1. A well thought-out and well-designed risk-based methodology must be developed for approval of

renovation/repair work for all buildings in Hong Kong enabling a bespoke building specific temporary works solution to be implemented with appropriate safety measures including redundant FSI.

1. Development of new less combustible light-weight materials that could be used in temporary works.
2. Development of bespoke redundant FSI systems especially for temporary works (such as temporary

sprinkler systems).

1. Dedicated apps for each building should be developed to provide personal information, reporting

and alarm portal to each resident, including live video feeds. The more eyes the more the likelihood of early fire detection.

1. In the longer term smarter technologies could enable real time monitoring of high-risk sites using

digital twins and identifying the most serious potential hazards and disaster scenarios in advance through AI based simulations and AI based automated building safety management. 82

Recommendations for policy level changes

1. Building regulations, codes of practice, building codes and standards etc. provide essential guidance to

engineers and practitioners. Compliance with them ensures a certain level of assurance of safety against severe demands during the life of a building. The flip side of this is that often compliance with regulations and codes is seen as adequate by highly cost-conscious clients and the construction industry promoting a tick-box culture of ensuring safety against expected hazards that a building may face in its lifetime. As a society we must address this culture and promote more rigorous engineering analyses and judgement to be exercised, especially when making decisions that could have a bearing upon the life safety implications of an engineering design. Since every building project is different and may have features that may throw up unforeseen challenges to occupant safety, a certain level of rigour and engineering judgement should be mandated for each individual case.

1. Without the risk of “throwing the baby out with the bathwater”, it is recommended that a committee is

formed to review Hong Kong building regulations and codes of practice to ensure that some level of responsibility is borne by stakeholders when things go wrong and compliance with regulations should not become a shield for them.

1. “How to interpret and execute the public policy” and “how does the system check and ensure that the policy

is fully executed?” There is no effective mechanism to learn from past incidents and make changes to fire safety policy. Strategic level routine risk assessment of urban hazards should be mandated. HAD RE-ENTRANTS FACED THE SAME RESTRICTIONS AS LIFT WELLS (POST GARLEY BUILDING) THIS TRAGEDY COULD NOT OCCUR! 83

FD06229 ｜ 2025_港澳台_香港大埔宏福苑-特别重大火灾事故调查报告(竞争事务委员会完整报告).pdf

分类：06_境外及港澳台调查报告 ｜ 年份：2025 ｜ 地域：香港 ｜ 严重程度：特别重大 ｜ 场所： ｜ 起火原因： ｜ 来源格式：pdf

1

Re. Independent Committee in relation to the fire at Wang Fuk Court in Tai Po (“IC”)

Report of the Hong Kong Competition Commission (“CC”)

Introduction 1. This is the report of the CC to the IC in response to its request for submissions with regards to §§2 to 4 of the Terms of Reference (“ToR”). 2. This report is broken down into the following sections: (1) Part 1 sets out a general overview of the CC’s enforcement work relating to the building maintenance and renovation sector1; (2) Part 2 sets out the CC’s observations on the systematic problems in large-scale building maintenance works in Hong Kong (§2 ToR); (3) Part 3 sets out the CC’s observations on the adequacies of existing regulations and penalties to address the said systematic problems (§3 ToR); (4) Part 4 sets out the CC’s recommendations that are relevant to (2) and (3) above (§4 ToR); and (5) Part 5 sets out the CC’s concluding observations.

In summary, the CC’s position is as follows: Re. §2 ToR

(1) Based on the CC’s market study and investigations, there is indeed a widespread, systematic, and longstanding practice among a sizable number of building maintenance contractors to affect the outcome of tenders for building maintenance works.

(2) Such practices are sometimes (although not necessarily) facilitated by malpractices from supposedly independent consultants that have been engaged by the owners of the relevant building(s) concerned.

(3) Such practices extend beyond “bid-rigging” per se (as defined under s.2 of the Competition Ordinance (Cap. 619) (“CO”) [Tab-1]), but

1 For the purpose of this report, the phrase “building maintenance work” / “building maintenance sector” should be read to encompass renovation works and the renovation sector as well.

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almost always involve other anticompetitive practices such as price- fixing and market-sharing.

(4) It is also not uncommon for building maintenance contractors to seek to influence the outcome of tenders through other means that do not constitute “bid-rigging” as defined in the CO. These methods may include:

(a) the exchange of competitively sensitive information (e.g. price) in circumstances that fall short of an actual agreement to rig-bids;

(b) engaging in an overarching market-sharing agreement where, for example, contractors would agree to not “enter” into each other’s “territory” ahead of any tender that may come about from buildings located in that territory;

(c) one building maintenance contractor “lending” its template letterheads, company credentials, and email accounts to another building maintenance contractor so that the latter may prepare and submit bids in the name of the other contractor as a “cover” for its own bid. This practice is colloquially known as “Credential Sharing”; and

(d) the setting up of ostensibly independent contractor companies that are, in effect, under the control of the same person / syndicate. These ostensibly independent contractors would, in turn, bid “against” each other in tenders to give the false impression that the underlying tendering process is a competitive one. This practice is colloquially known as “Phantom Bidding”.

(5) There exist syndicate-led cartels whereby there are clear systems of “registration”, dissemination of “homework”, and the presence of ring-leaders / coordinators. These syndicate-led cartels may involve dozens of building maintenance contractors and consultants. In different cases, the CC has observed syndicates working with, as well as competing against, each other to affect the outcome of a tender.

(6) A number of building maintenance contractors and consultants are believed to be affiliated with triad societies in Hong Kong who, in

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turn, may facilitate the operation / continuance of these anticompetitive practices through unlawful means (such as the use of threats or actual violence).

Re. §§3-4 ToR

(7) In terms of existing regulation, the CO provides a suite of powers to the CC and prescribes penalties which enable the CC to tackle anticompetitive conduct including those related to building maintenance under existing legal framework. In addition, with a view to reducing procurers’ exposure to anticompetitive conduct in the procurement process, in 2017 (later revised in 2023), the CC published a set of model non-collusion clauses (“NCC”) and non- collusive tendering certificate (“NCTC”) and encouraged procurers to include the same in their bidding documents and contracts. These have since been widely adopted in the public and private sectors.

(8) While it is still able to tackle building maintenance related anticompetitive conduct under existing legal framework, the CC believes that there is certainly room for legislative changes as well as additional administrative measures which would (1) enhance the effectiveness of CC’s enforcement work under the CO; (2) facilitate criminal prosecutions in appropriate cases; and (3) better deter would-be cartelists. In particular:

Enhancing CC’s enforcement effectiveness under the CO

(a) the CO should clearly stipulate that the relevant standard of proof which the CC must meet in cases where it seeks pecuniary penalties against undertakings and persons it suspects to have contravened the CO is that of the civil standard (i.e. balance of probabilities). Apart from being consistent with the “civil nature” of competition law that was passed by the Legislature in 2012, this would also render the investigative and enforcement work of the CO much more effective compared to the current status quo whereby the relevant standard is the criminal standard (i.e. beyond any reasonable doubt), in part because the CO is silent on what the appropriate standard of proof should be;

(b) the CO should clearly provide for certain statutory

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presumptions that are in line with well-established overseas jurisprudence. For example, where it is proven that competitors had exchanged competitively sensitive information, there should be a statutory presumption that the competitors had done so in order to influence each other’s behaviour on the relevant market and that such an exchange did, in fact, have that effect. This would negate the need for the CC to prove intent / causation which is inherently difficult especially under a criminal standard of proof; and

(c) the existing definition of “bid-rigging” (s.2 CO [Tab-1]) should expressly stipulate that it is not necessary for the CC to show that the relevant anticompetitive conduct was not made known to the person calling the tender in order to prove its case. If, in any case, a respondent wants to rely on the fact that it had made the relevant collusive arrangement known to the person calling the tender as a defense or mitigation, the burden should be on the respondent to prove the positive (that the arrangement was made known by “Bidder X” to “Tenderee Y”) rather than on the CC to prove the negative (that no one at “Bidder X” had made the arrangement known to anyone from “Tenderee Y”).

Facilitating criminal prosecutions / Increasing deterrence

(a) Under the existing laws of Hong Kong, where a building maintenance contractor / consultant had submitted bids that are arrived at by collusion in circumstances where it had expressly warranted by way of the NCTC that it had not engaged in anticompetitive conduct, the breaching of the NCTC could also lead to criminal prosecution under the common law offence of conspiracy to defraud.

(b) The CC fully supports any initiative that seeks to impose criminal sanctions and to increase deterrence against natural persons and undertakings that have been engaged in anticompetitive behaviour when tendering for building maintenance work. To this end, the CC has the following observations:

(i) In terms of short-term measures: that may be immediately

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taken, to the extent that this is not already done, in all large-scale building maintenance tenders involving public bodies, there should be a requirement for all bidders to execute NCTCs lest their bid will not be counted. If it subsequently transpires that the bidder has, in breach of the terms of the NCTC, in fact engaged in collusion prior to submitting its bid, the bidder can be referred to the relevant authorities for criminal prosecution under the common law offence of conspiracy to defraud.

(ii) Additionally, bidders in such large-scale building maintenance tenders could be required to execute a Statutory Declaration confirming the contents of the NCC / NCTCs which, if it is subsequently shown that it is knowingly false, would render the bidder criminally liable for the separate offence of having made a false declaration. The CC views this as being a sensible and effective addition that would make prospective criminal prosecutions easier.

(iii) In terms of mid-term measures: the execution of NCTCs / proposed Statutory Declarations could be required for all large-scale building maintenance tenders and not just for those involving the public sector.

(iv) In terms of long-term measures: amendments to the CO may be made to introduce a criminal regime whereby a specific statutory offence is created targeting natural persons to address anticompetitive behaviour in large- scale building maintenance works while preserving civil penalties for undertakings and natural persons engaged in less egregious conduct. In this regard, the relevant offence should be framed as being one that does not only cover “bid-rigging” per se but also capable of catching other anticompetitive conduct that aims to influence the outcome of the relevant tender (c.f. §3(4) above).

(v) Additionally, in civil cases, the maximum penalty for undertakings that have been found to have contravened the CO as well as the maximum period of director’s

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disqualification orders should be increased. Part 1: General Overview of the CC’s Enforcement Work in the Building Maintenance Sector 4. The CC is the primary law enforcement agency of the CO. In addition to its law enforcement work, one of the CC’s statutory functions is to conduct market studies into matters affecting competition in markets in Hong Kong.

The CO came into full commencement on 14 December 2015. Prior to the full commencement of the CO, the CC conducted an extensive market study into the building maintenance sector in Hong Kong. At the time, this was done, in part, to address the widespread perception that this sector was rife with anticompetitive behaviour.

In May 2016, the CC published its “Report on study into aspects of the market for residential building renovation and maintenance” Tab-2.

In the Report, the CC had sought and obtained from the Urban Renewal Authority (“URA”) and the Hong Kong Housing Society tender records from a number of tenders for building maintenance works. Applying structural and behavioural economic screening techniques that are commonly deployed by overseas competition agencies to the relevant records, the CC’s screening analysis did reveal suspicious patterns that are consistent with there being widespread bid-manipulation practices in Hong Kong. In particular:

(1) A substantial number of bids which supposedly independent consultants had submitted fell below the minimum cost of providing the relevant services. This would suggest that unless the consultants were willing to engage in loss-making behaviour (which generally makes no commercial sense), these consultants might have expected to be remunerated through other (possibly nefarious) means.

(2) In a number of instances, consultants were recorded as having priced their bids in circumstances that did not appear to have any meaningful correlation with the size of the project. This, in turn, suggests that these consultants might have priced their bids in circumstances that were unrelated to the projected costs in undertaking the relevant works.

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(3) Statistically, the frequency in which certain consultants would end up working with certain contractors would lend support to the existence of some form of vertical cooperation between the consultant and the chosen contractor.

As, at the time, the Report was based on analysis of bids submitted prior to the full commencement of the CO, the CC could not take any enforcement actions off the back of the findings of the Report.2

Between 2016 and 2019, the CC filed 3 enforcement actions against 18 undertakings and 5 individuals for engaging in anticompetitive conduct (price-fixing and market sharing) in the decoration and renovation sector in Hong Kong. In each of these actions, the CC was successful in securing declarations of contraventions, pecuniary penalties, and director disqualification orders against those persons holding office in the relevant companies.

In 2022, the CC conducted the first of five investigations into the building maintenance sector in Hong Kong in coordination with the Organized Crime and Triad Bureau of the Police. As of January 2026, the CC had five investigations relating to building maintenance works in Hong Kong covering at least:

(1) 68 residential estates;

(2) 15 industrial estates; and

(3) 64 companies.

The CC filed its first enforcement action concerning price-fixing, bid- rigging, and market-sharing in the large-scale building maintenance sector in March 2026. The CC has provided its Originating Notice of Application and the press-release materials corresponding to that case to the IC and understands that they will be made open to public. 2 It is also important to note that absent exceptional circumstances, proof of suspicious patterns alone will not be sufficient to find a case of “bid-rigging” for the purposes of the CO. Screening analysis of this sort are, instead, generally used to identify potential areas for investigation and to support the necessary statutory threshold which must be met before the CC may use its compulsory powers of investigation under the CO.

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Part 2: Systematic Problems in Large-Scale Building Maintenance and Renovation Works in Hong Kong (§2 ToR) 12. Based on the CC’s investigations, the following observations may be relevant for present purposes:

(1) The CC believes that there is indeed a widespread, systematic, and long-standing practice between some building maintenance contractors to affect the outcome of tenders for building maintenance works. Such practices can range from and are not limited to:

(a) a one-off agreement between building maintenance contractors whereby one / some would refrain / drop out from the bidding process (colloquially referred to as “bid- suppression”);

(b) a one-off agreement between building maintenance contractors whereby there would be a pre-agreed “designated winner” of the tender whose chances of winning would be supported by other building maintenance contractors who would purposely submit less attractive bids (colloquially referred to as “cover-bidding”); and

(c) a market-wide coordinated effort where members of syndicates of building maintenance contractors would agree to / “register” themselves to an overarching scheme where they would facilitate each other’s chances of winning over a number of tenders by systematically engaging in cover bidding if and when called upon (colloquially / loosely referred to as “bid-rotation”).

(2) These practices are sometimes facilitated by the consultants that are supposedly independently engaged by the owners / incorporated owners (“IO”) of a building. In these cases, the consultants may, in exchange for compensation (whether by way of outright payment or by taking a “cut” from the final project works), agree to favourably recommend a building maintenance contractor for the owners and IO to select.

(3) Aside from the practices referred to at §12(1)(a)-(c) above, there exist many other anticompetitive practices on the market for building

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maintenance works that while they may fall short of the definition of “bid-rigging” for the purposes of s.2 CO3 [Tab-1], are nevertheless capable of influencing the outcome of a tender. For example:

(a) an undertaking (whether it may be a bidder / consultant) may exchange competitively sensitive information concerning an ongoing / upcoming tender with an actual / potential bidder, in circumstances where there is no express evidence of an agreement as to how that information will be deployed. This practice is known as “information exchange” and while it is usually, in itself, a standalone contravention of competition law, this is generally not regarded as “bid-rigging’ per se;

(b) multiple undertakings may engage in a market-wide agreement to allocate territories amongst themselves such that they have agreed, in advance, not to “enter” into each other’s geographical market regardless of whatever tendering opportunities that may arise. In competition law, this is known as “market sharing” and is, in fact, separately defined as being a form of Serious Anti-competitive Conduct under s.2 CO [Tab- 1];

(c) one building maintenance contractor may agree to lend its company templates, credentials, email accounts to another building maintenance contractors to put in tender in the former’s name whenever convenient. This practice is known as “credential sharing” and depending on the extent of the first building maintenance contractor’s knowledge, may fall outside the definition of bid-rigging for the purposes of the CO4; and

(d) one building maintenance contractor may set up a number of ostensibly independent building maintenance contractors but which are under common de facto control. These contractors

3 Which, broadly speaking, is defined as: (1) the submission of a bid that have been arrived at by agreement that was not made known to the person calling the tender; or (2) an agreement to withdraw / refuse to bid that was not made known to the person calling the tender. It should be noted that for the purposes of the CO, “bid-rigging” is regarded as a Serious Anti-competitive Conduct that enables the CC to directly bring enforcement action before the Competition Tribunal (“Tribunal”) (c.f. s.2 CO [Tab-1]).

4 At present the CC has only encountered the practice of credential sharing in other industries. The CC however believes that there is no reason why cartelist will not also apply similar malpractices in the building maintenance sector.

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will “bid against” each other in tenders for building maintenance works to give the impression that the tender was a competitive one when, in fact, it was not. This practice is known as “phantom bidding” and depending on whether “phantom bidders” may be regarded as truly “separate” businesses, this practice may fall outside the definition of bid- rigging for the purposes of the CO if the Tribunal does not regard this arrangement as amounting to an agreement between undertakings.

(4) Finally, the CC has reasons to suspect that a number of building maintenance contractors and consultants are affiliated with triad societies in Hong Kong. In the past, the CC has encountered cases where there was evidence that:

(a) threats of or actual violence were used to compel a bidder for building maintenance works to withdraw from a tender or to follow the instructions of the triad societies on how to submit a tender;

(b) building maintenance contractors that are affiliated with the same triad society would coordinate their bids in accordance with instructions received from a senior member of that triad society; and

(c) even within the same tender for a particular building maintenance contract:

(i) building maintenance contractors from two triad societies would try to influence the outcome of the tender by coordinating the behaviour of their own affiliated building maintenance contractors in “competition” with the other triad society; or

(ii) two triad societies would work with each other by cover- bidding for each other.

The following live case studies are provided as illustrations of some of the above practices: 11

(1) Case Study 1: Bid-suppression with the involvement of triads

and suspected corrupt consultants

In one of the CC’s investigations, a building maintenance contractor was interested in bidding for a building maintenance project for a residential building that was the subject of a mandatory building inspection order.

The building maintenance contractor therefore reached out to the appointed consultant inquiring about the status of the tender. The building maintenance contractor and the appointed consultant agreed to meet to discuss the tender.

On the day of the meeting, the appointed consultant had invited two other men to attend as well. One of the men identified himself as being a bidder of the tender while the other claimed to be a member of a triad society.

The two men then, in the presence of the consultant, asked the building maintenance contractor to refrain from bidding and upon him refusing to do so, assaulted him. Subsequently the building maintenance contractor decided to not bid in the tender and reported the matter to the Police who then referred the matter to the CC.

(2) Case Study 2: Syndicate operated cover-bidding cartel

In another of the CC’s investigations, a person who is believed to be a senior office bearer of a triad society is the de facto owner of a building maintenance contractor.

Whenever there was a tender for building maintenance works on the market which this senior office bearer and/or his associates were interested in securing, these persons would “blow the whistle” (吹雞 ) to gather other building maintenance contractors (“Instructed Bidders”) to help rig the outcome of the tender.

This would be achieved by associates of the senior office bearer preparing individual pricing instructions for these Instructed Bidders to follow (which the syndicate refers to as “homework” (功課)). These “homework” would then be sent to the Instructed Bidders either through WhatsApp or fax.

The Instructed Bidders would then submit bids in accordance with the

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“homework” with the net result that a pre-determined bidder would end up submitting a more attractive bid than the other Instructed Bidders.

The CC believes that this syndicate has been operational since June 2020 until 2024 when the CC turned its investigation overt.

(3) Case Study 3: Cooperation between multiple syndicates to rig- bids

Finally, in one of CC’s investigations, in an attempt to rig the outcome of a tender for a particular building maintenance project, the ringleader / coordinator of one syndicate had sought and received assistance from members of another syndicate.

As a result, the CC believes that more than 20 building maintenance contractors were involved in attempting to rig the outcome of a single tender with all of this being centrally coordinated in a systematic fashion.

Against all of the above, the CC considers the above practice to be: (1) Widespread: in that geographically it covers buildings in the whole of Hong Kong and involves a substantial number of building maintenance contractors and consultants.

(2) Systematic: especially where syndicates are involved whereby there are clear systems of “registration”, dissemination of “homework” and existence of ring-leaders / coordinators.

(3) Long-standing: almost every witness who has been willing to attest to the above practices has attributed this to being a long-standing trade practice in Hong Kong. Some of the jargons used (e.g. 「豬標 」 and 「豬仔標」) are used by cartelists in other market sectors as well, such as the IT sector and the sector for installation and maintenance of large-scale air-conditioning works.

Part 3: Existing Regulations and Penalties (§3 ToR) Regulations and Penalties under the CO 15. Under the CO, undertakings are expressly prohibited from entering into any agreement / concerted practices that has the object or effect of harming

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competition in Hong Kong (referred to as the First Conduct Rule under s.6 CO [Tab-1]). This would include paradigmatic cases of bid-suppression, cover-bidding, and bid-rotation.

The maximum penalty for undertakings that have entered into anticompetitive agreements (such as bid-rigging) is capped at 10% of its Hong Kong turnover for a maximum of three years for each year the undertaking has contravened the CO (see. s.93(3) CO [Tab-1]).

For persons involved in the anticompetitive agreement (such as the relevant director / employee), the CO does not specify a maximum penalty as such. It is the CC’s position that the maximum penalty is unlimited in these circumstances.

Where a company has contravened the CO and if the Tribunal considers that a person’s conduct as a director makes the person unfit to be concerned in the management of a company, that person may be disqualified from being concerned in the management of a company for up to 5 years (see. ss.101-103 CO [Tab-1]).

The Tribunal has previously held that the applicable standard of proof in proceedings where the CC seeks a pecuniary penalty is that of the criminal standard. This is because:

(1) The CO itself is silent on the applicable standard of proof; and

(2) As proceedings involving the imposition of a pecuniary penalty involve a determination of a criminal charge for the purposes of Art. 11 of the Hong Kong Bill of Rights (“BOR”), absent express / implied legislative provisions to the contrary, the starting point for such proceedings would normally be the criminal standard of proof.

While the Court of Appeal has previously observed obiter that there is a “reasonably arguable basis” the Tribunal may not have had sufficient regard to the potential frustration of effective enforcement in assessing whether there had been a derogation of Art. 11 BOR by necessary implication, it declined to definitively come to a determination on this issue (see W. Hing Construction Company Limited [2021] 3 HKLRD 219 [Tab-3] at 240-244 [75]-[96], [84] in particular). 14

Regulations and Penalties under the General Laws of Hong Kong 21. It should be noted that bid-rigging per se (i.e. where supposedly competing undertakings agree to not compete with each other in response to a call for tender) is not a criminal offence, or at least does not constitute a conspiracy to defraud. In Chan Wai Yip (2010) 13 HKCFAR 842 [Tab-4], the Court of Final Appeal expressly held that persons attending an auction owed no obligation to the vendor to compete nor were they required by law to ensure that the vendor achieved the highest possible price, and an agreement not to compete in an auction had no deceptive element and hence not per se unlawful.

However, there was also an observation that if the person calling the tender in that case (the FEHD) wanted to protect itself, it could have required a written warranty from each of the potential bidders to the effect that in making a bid, the bidder warranted that he/she had not entered into any prior arrangement to refrain from competitive bidding (Chan Wai Yip supra at 854 [31] [Tab- 4]).

Against the above, in 2017, the CC recommended the adoption of certain model “non-collusion clauses” and “non-collusive tendering certificates” by both the private and public sectors so that any prospective bidders must expressly warrant that in bidding for the relevant tender, the bidder had independently prepared the bid and, in essence, had not colluded with any other persons. CC’s model NCC and NCTC was further revised in 2023 to enable procurers to more easily ascertain the ultimate beneficial owners of persons submitting bids in tenders containing these provisions.

Armed with the revised NCC / NCTC, the CC takes the view (supported by Counsel’s advice recently obtained) that where:

(1) a company has submitted a bid containing a signed NCTC; and

(2) it subsequently transpires that employees / agents / other persons relating to the company had engaged in any form of collusion that renders the representations contained in the NCTC a falsity;

any person that are knowingly parties to the collusive agreement that ultimately led to the submission of the bid which contains the false NCTC may be criminally liable for conspiracy to defraud.

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By way of illustration: (1) where a building maintenance contractor has submitted a bid containing an NCTC and the person executing the NCTC (e.g. the authorised signatory of a company) had colluded with a competitor or the consultant in an attempt to rig the outcome of the tender, any person that is party to the collusion may be criminally liable for a conspiracy to defraud; and

(2) conversely, even if the person executing the NCTC does not have actual knowledge of the underlying collusion that renders the representation false, although he will not be criminally liable, other employees within the company who intended that the NCTC be signed with false representations (e.g. because they were the relevant persons colluding with the relevant competitor / consultant) will still be liable for conspiracy to defraud - along with any persons who are knowingly involved at the other end of the collusion (e.g. the relevant employees working for the competitor / consultant).

Since its introduction in 2017, the CC’s model NCC and NCTC have been adopted by many Government bodies in Hong Kong, including the URA. As of today, the CC understands that all tenders that are called pursuant to the URA’s SMART Tender scheme contain the CC’s model NCC and corresponding bidders are required to provide an NCTC as part of their bid under the SMART Tender scheme. In the context of Wang Fuk Court, the CC understands that all of the relevant consultancy and contractor tenders contain NCCs and most of the bidders have, in turn, executed NCTCs.

In the circumstances and for the purposes of §3 ToR, the existing regulations in Hong Kong are capable of imposing criminal liability at common law on persons that are knowingly parties to bid-rigging in the building maintenance sector provided that there are means to require prospective bidders to provide the relevant written warranties to the procurers (such as an NCTC). Part 4: CC’s Recommendations Amendments to the CO

The CC considers that while it is able to tackle building maintenance related anticompetitive conduct under existing legal framework, there is always room for legislative changes which would enhance the effectiveness of CC’s enforcement work under the CO, facilitate criminal prosecutions in

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appropriate cases, and better deter would-be cartelists. 29. At present, the CC considers that amendments to the CO along the following lines will prove critical in enhancing the effectiveness of the competition law regime in Hong Kong. (1) First, on the question of “standard of proof” for proceedings where the CC is seeking a pecuniary penalty, the existing legislation (s.93 CO for example) should be amended so that it expressly provides that the relevant standard is that of the civil standard (i.e. balance of probabilities). This is not only in line with international best practices, but as the CC had submitted in W. Hing [83] – [84] [Tab- 3], there is a real prospect that a criminal standard would frustrate effective enforcement of competition law in Hong Kong. This is especially in cases that are complex, technical, and/or where the underlying conduct is well concealed (as one would expect in paradigmatic cases of cartel conduct). (2) Second (particularly important if the standard of proof is to remain that of the criminal standard in pecuniary penalty proceedings), the CO should expressly incorporate well-established overseas presumptions lest the criminal standard of proof renders the CC and the Tribunal unable to draw upon such well-established jurisprudences. For example, in a case of information exchange, where it is shown that a competitor (actual or potential) had transmitted competitively sensitive information to another competitor, this exchange should be presumed (subject to proof to the contrary) to have influenced each other’s market behavior (this is known as the Anic presumption in EU law). Such statutory presumption is, in effect, similar to that provided for in insider dealing regulations where similar presumption of “use” of information also exists. (3) Third, on the definition of bid-rigging, the CO should be amended to clearly provide that it is not necessary for the CC to show that the relevant anticompetitive conduct was not made known to the person calling the tender in order to prove its case. This will obviate any potential argument that, in any given bid-rigging case, the CC must prove the negative (i.e. that the suspected bid-riggers had not made their relevant arrangements known to any of the relevant persons within the tendering body) - something which will understandably require considerable time and effort on the part of the CC.

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(4) Finally, concerning the available sanctions against persons that have contravened the CO, the CC recommends that the relevant penalties / periods for director disqualification be increased in a meaningful manner. In doing so, the CC hopes that, together with the changes in (1)-(3) above, the CO is truly able to strike its message of deterrence at the “hearts” of would-be cartelists. 30. In terms of the actual wordings of the above proposed amendments, the CC, working in collaboration with the Commerce and Economic Development Bureau, will approach the Department of Justice on this matter in due course.

Finally, the CC recommends that in addition to requiring all prospective bidders to execute NCTCs in any given tender for large-scale building maintenance works, all prospective procurers should also require all bidders in large-scale tenders (including residential building maintenance works) to execute a Statutory Declaration in terms that are similar to the model NCTC.

In doing so, it is the CC’s intention to provide for the possibility of subsequent criminal prosecution against persons that have engaged in bid- rigging and have sworn the relevant Statutory Declaration to, further or alternative to the offence of a conspiracy to defraud, be charged for having made a false declaration under section 36 of the Crimes Ordinance (Cap. 200) [Tab-5].

“Criminalising Bid-rigging” 33. As to whether Hong Kong should expressly criminalise bid-rigging in order to sanction egregious cartelists and to deter persons from engaging in such conduct in future, the CC’s observations are as follows: (1) The CC fully supports any initiative that seeks to impose criminal sanctions and increase deterrence against persons and undertakings that have been engaged in anticompetitive behaviour when tendering for building maintenance work. (2) The CC is currently considering the legal and enforcement framework from other jurisdictions that have a dual-track civil and criminal competition regime (e.g. UK, Australia, and New Zealand) which allows differential enforcement routes against cartelists and to what extent the experiences from those jurisdiction may be readily

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applicable to Hong Kong. (3) Given that the overwhelming public concern is about all sorts of anticompetitive behaviour that are capable of influencing the outcome of a tender for building maintenance works, simply criminalising “bid-rigging” as defined by the CO may not be sufficient to address this concern. The criminal “net” must, in the circumstances, be cast wider to capture other forms of anticompetitive conduct that may fall short of / be different from “bid-rigging” (e.g. information exchange, market-sharing, credential sharing, and phantom bidding). (4) Finally, it would be prudent for any legislative attempt to “criminalise bid-rigging” to be complementary to (and not designed to supplant) any existing avenues that may already impose criminal liability on would-be cartelist (such as the offence of conspiracy to defraud and the making of false declarations etc.). 34. In this regard, the CC has also been working in collaboration with the Commerce and Economic Development Bureau on possible approaches to criminalization and will consult the Department of Justice on this matter in due course. Part 5: Concluding Observations 35. The CC hopes that this report will prove helpful to the IC in understanding the nature of the underlying problem at hand and the extent to which existing / future regulations may play a role in tackling this problem.

Dated the 14th day of May 2026

Competition Commission

Re. Independent Committee in relation to the fire at Wang Fuk Court in Tai Po List of Documents 1. Sections 2, 6, 93, and 101-103 Competition Ordinance (Cap. 619). 2. Report on study into aspects of the market for residential building renovation and maintenance dated May 2016. 3. W. Hing Construction Company Limited [2021] 3 HKLRD 219. 4. Chan Wai Yip (2010) 13 HKCFAR 842. 5. Section 36 Crimes Ordinance (Cap. 200). Dated the 14th day of May 2026 Competition Commission

Chapter 619 Competition Ordinance 19/09/2019 2. Interpretation (1) In this Ordinance— agreement ( 協議) includes any agreement, arrangement, understanding, promise or undertaking, whether express or implied, written or oral, and whether or not enforceable or intended to be enforceable by legal proceedings; Commission ( 競委會) means the Competition Commission established by section 129; Communications Authority ( 通訊事務管理局) means the Communications Authority established by section 3 of the Communications Authority Ordinance (Cap. 616); company (公司), in addition to the meaning given by section 2(1) of the Companies Ordinance (Cap. 622), includes a non-Hong Kong company within the meaning of that Ordinance and a company registered under Part IX of the Companies Ordinance (Cap. 32) as in force from time to time before the commencement date* of section 2 of Schedule 9 to the Companies Ordinance (Cap. 622) or under Part 17 of the Companies Ordinance (Cap. 622); (Amended 28 of 2012 ss. 912 & 920 and L.N. 162 of 2013) company secretary (公司秘書) includes any person occupying the position of company secretary, by whatever name called; competition authority (競爭事務當局) means— (a) the Commission; or (b) the Communications Authority; competition matter ( 競爭事宜) means any matter involving or having a connection with— (a) a contravention or alleged contravention of a competition rule; or (b) any decision relating to a competition rule, that has been made or is to be made under this Ordinance; competition rule (競爭守則) means— (a) the first conduct rule; (b) the second conduct rule; or (c) the merger rule; conduct (行為) means any conduct, whether by act or omission; conduct rule (行為守則) means— (a) the first conduct rule; or (b) the second conduct rule; confidential information ( 機密資料) has the meaning given by section 123; contract of employment (僱傭合約) means any agreement, whether in writing or oral, express or implied, under which one person (an employer) agrees to employ another and that other agrees to serve the employer as an employee, and also includes a contract of apprenticeship; director ( 董事) includes any person occupying the position of director or involved in the management of a company, by whatever name called, and includes a shadow director; 2/27/26, 5:43 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 1/6

document (文件) includes information recorded in any form; first conduct rule ( 第一行為守則) has the meaning given by section 6; functions (職能), except in section 130, includes powers and duties; funds of the Commission (競委會資金) means the funds of the Commission, as specified in section 21 of Schedule 5; Government (特區政府) does not include a company that is wholly or partly owned by the Government; information (資料) includes information contained in a document; infringement notice (違章通知書) means an infringement notice issued under section 67(2); investigation (調查) means an investigation conducted under Part 3; leniency agreement (寬待協議) means a leniency agreement made under section 80; member (委員), in relation to the Commission, means a member of the Commission appointed under section 2 of Schedule 5; merger (合併) has the meaning given by section 3 of Schedule 7 read together with section 5 of that Schedule; merger rule ( 合併守則) has the meaning given by section 3 of Schedule 7; person (人), in addition to the meaning given by section 3 of the Interpretation and General Clauses Ordinance (Cap. 1), includes an undertaking; President ( 主任法官) means the President of the Tribunal appointed under section 136; reviewable determination (可覆核裁定) has the meaning given by section 83; second conduct rule (第二行為守則) has the meaning given by section 21; serious anti-competitive conduct (嚴重反競爭行為) means any conduct that consists of any of the following or any combination of the following— (a) fixing, maintaining, increasing or controlling the price for the supply of goods or services; (b) allocating sales, territories, customers or markets for the production or supply of goods or services; (c) fixing, maintaining, controlling, preventing, limiting or eliminating the production or supply of goods or services; (d) bid-rigging; Note— See also subsection (2). shadow director (幕後董事), in relation to a company, means a person in accordance with whose directions or instructions all the directors or a majority of the directors of the company are accustomed to act, but a person is not to be regarded as a shadow director by reason only that all the directors or a majority of the directors act on advice given by that person in a professional capacity; statutory body (法定團體) means a body of persons, corporate or unincorporate, established or constituted by or under an Ordinance or appointed under an Ordinance, but does not include— 2/27/26, 5:43 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 2/6

(a) a company; (b) a corporation of trustees incorporated under the Registered Trustees Incorporation Ordinance (Cap. 306); (c) a society registered under the Societies Ordinance (Cap. 151); (d) a co-operative society registered under the Co-operative Societies Ordinance (Cap. 33); or (e) a trade union registered under the Trade Unions Ordinance (Cap. 332); Tribunal (審裁處) means the Competition Tribunal established by section 134; undertaking (業務實體) means any entity, regardless of its legal status or the way in which it is financed, engaged in economic activity, and includes a natural person engaged in economic activity. (2) For the purposes of the definition of serious anti-competitive conduct— bid-rigging (圍標) means— (a) an agreement— (i) that is made between or among 2 or more undertakings whereby one or more of those undertakings agrees or undertakes not to submit a bid or tender in response to a call or request for bids or tenders, or agrees or undertakes to withdraw a bid or tender submitted in response to such a call or request; and (ii) that is not made known to the person calling for or requesting bids or tenders at or before the time when a bid or tender is submitted or withdrawn by a party to the agreement or by an entity controlled by any one or more of the parties to the agreement; or (b) a submission, in response to a call or request for bids or tenders, of bids or tenders that are arrived at by an agreement— (i) that is made between or among 2 or more undertakings; and (ii) that is not made known to the person calling for or requesting bids or tenders at or before the time when a bid or tender is submitted or withdrawn by a party to the agreement or by an entity controlled by any one or more of the parties to the agreement; goods (貨品) includes real property; price ( 價格) includes any discount, rebate, allowance, price concession or other advantage in relation to the supply of goods or services; supply (供應)— (a) in relation to goods, means sell, rent, lease or otherwise dispose of the goods, an interest in the goods or a right to the goods, or offer so to dispose of the goods or of such an interest or right; and (b) in relation to services, means sell, rent or otherwise provide the services or offer so to provide the services. 2/27/26, 5:43 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 3/6

Chapter 619 Competition Ordinance 19/09/2019 Chapter 619 Competition Ordinance 19/09/2019 (3) A note located in the text of this Ordinance is provided for information only and has no legislative effect.

Editorial Note:

• Commencement date : 3 March 2014.

Prohibition of anti-competitive agreements, concerted practices and decisions (1) An undertaking must not— (a) make or give effect to an agreement; (b) engage in a concerted practice; or (c) as a member of an association of undertakings, make or give effect to a decision of the association, if the object or effect of the agreement, concerted practice or decision is to prevent, restrict or distort competition in Hong Kong. (2) Unless the context otherwise requires, a provision of this Ordinance which is expressed to apply to, or in relation to, an agreement is to be read as applying equally to, or in relation to, a concerted practice and a decision by an association of undertakings (but with any necessary modifications). (3) The prohibition imposed by subsection (1) is referred to in this Ordinance as the first conduct rule. 93. Tribunal may impose pecuniary penalty (1) If the Tribunal is satisfied, on application by the Commission under section 92, that a person has contravened or been involved in a contravention of a competition rule, it may order that person to pay to the Government a pecuniary penalty of any amount it considers appropriate. (2) Without limiting the matters that the Tribunal may have regard to, in determining the amount of the pecuniary penalty, the Tribunal must have regard to the following matters— (a) the nature and extent of the conduct that constitutes the contravention; (b) the loss or damage, if any, caused by the conduct; (c) the circumstance in which the conduct took place; and (d) whether the person has previously been found by the Tribunal to have contravened this Ordinance. (3) The amount of a pecuniary penalty imposed under subsection (1) in relation to conduct that constitutes a single contravention may not exceed in total— (a) subject to paragraph (b), 10% of the turnover of the undertaking concerned for each year in which the contravention occurred; or 2/27/26, 5:43 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 4/6

Chapter 619 Competition Ordinance 19/09/2019 Chapter 619 Competition Ordinance 19/09/2019 Chapter 619 Competition Ordinance 19/09/2019 (b) if the contravention occurred in more than 3 years, 10% of the turnover of the undertaking concerned for the 3 years in which the contravention occurred that saw the highest, second highest and third highest turnover. (4) In this section— turnover (營業額) means the total gross revenues of an undertaking obtained in Hong Kong; year (年度) means the financial year of an undertaking or, if the undertaking does not have a financial year, a calendar year. 101. Disqualification order (1) In the circumstances specified in section 102, the Tribunal may, on application by the Commission, make a disqualification order against a person. (2) A disqualification order is an order that a person may not, without the leave of the Tribunal— (a) be, or continue to be, a director of a company; (b) be a liquidator or provisional liquidator of a company; (c) be a receiver or manager of a company’s property; or (d) in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company, for a specified period, not exceeding 5 years, beginning with the date of the order. (3) In this section— specified (指明) means specified in the disqualification order. 102. Circumstances in which disqualification order may be made The Tribunal may only make a disqualification order against a person if both of the following conditions are satisfied in relation to that person— (a) it has determined that a company of which the person is a director has contravened a competition rule; and (b) it considers that the person’s conduct as a director makes the person unfit to be concerned in the management of a company. 103. Unfitness to be concerned in management of company (1) For the purpose of deciding under section 102(b) whether a person is unfit to be concerned in the management of a company, the Tribunal— (a) must have regard to whether subsection (2) applies to the person; and 2/27/26, 5:43 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 5/6

(b) may have regard to the conduct of the person as the director of a company, in connection with any other contravention of a competition rule. (2) This subsection applies to a person if as a director of the company— (a) the person’s conduct contributed to the contravention of the competition rule; (b) the conduct of the person did not contribute to the contravention, but the person had reasonable grounds to suspect that the conduct of the company constituted the contravention and took no steps to prevent it; or (c) the person did not know but ought to have known that the conduct of the company constituted the contravention. 2/27/26, 5:43 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 6/6

Report on study into aspects of the market for residential building renovation and maintenance May 2016

The market for residential building renovation and maintenance is an important market for the people of Hong Kong. Building renovation and maintenance costs are often a major expense for ordinary home owners 1, so that outcomes in this market have a signiϐicant impact on the family lives and standards of living of many ordinary people. Moreover, a wide variety of sources have expressed deep concern that there is widespread collusive activity in tenders for renovation and maintenance projects, to the detriment of home owners who must pay for the associated costs out of their savings. In view of these concerns, and to enable the Competition Commission to understand how this complex market operates so as to inform its future enforcement and advocacy efforts, the Commission undertook a study of certain aspects of the market for residential building renovation and maintenance since the spring of 2015. This report outlines the results of the Commission’s examination of certain activities in this market. The Commission’s general purpose and approach in conducting market studies

The Commission’s functions include “to conduct market studies into matters affecting competition in markets in Hong Kong” and “to advise the Government on competition matters in Hong Kong and outside Hong Kong”. 2

The Commission’s market study function provides the Commission with the opportunity to assess whether competition in a market is working effectively. This is particularly relevant where it is desirable to focus on the functioning of the market as a whole or on features of a market in more general terms rather than on a single aspect of it or the conduct of particular ϐirms within it. Market studies may examine any competition problem and may identify the market features causing the problem. A wide range of information may be studied and analysed during the course of a market study. Economic analysis techniques may be used to further identify issues. The use of “screening” techniques applied during this particular study is described in this report.

The main objective of a market study is to examine if competition within a market is working well or can be improved; it does not seek to establish general rules and obligations for ϐirms. The Commission can look at the conduct of ϐirms as it relates to the functioning of competition in the market generally, and it can also look for other causes of insufϐicient competition such as structural aspects of the market (including barriers to entry and expansion) or the conduct of customers. The purpose of a market study is not necessarily to look for contraventions of the Competition Ordinance, and subjects for a market study are not conϐined to issues that could be contraventions. 1 We would note that tenants will likely be affected in a similar way to home owners, because higher maintenance and renovation costs will likely be passed on to them to some extent. 2 Competition Ordinance, section 130. 1‧ Report on study into aspects of the market for residential building renovation and maintenance

Two things should be noted about the Commission’s study in this case. Firstly, and as a general point, the Commission does not have compulsory information gathering powers in conducting market studies unlike in the case of investigations of possible contraventions of the Competition Ordinance. Secondly, this market study relates to activities that occurred before the full commencement of the Competition Ordinance in any event. Thus, in contrast with market studies that the Commission might conduct in the future, the conduct studied would not likely constitute a contravention of the competition rules because they were not yet in force.

If the Commission identiϐies that there are systematic problems of insufϐicient competition in a market, it can take a number of steps. For instance, if the Commission identiϐies that there is problematic conduct potentially falling foul of the Competition Ordinance by a number of ϐirms in the market, it may identify that sector as meriting priority in enforcement case selection. Additionally, if the Commission identiϐies that there is a structural competition deϐicit within the market that may be solved through Government policies or action, it may make appropriate recommendations to the Government in accordance with its government advisory function. The Commission may also consider whether education of market participants would assist in resolving the problems identiϐied. Potential competition issues identiϐied in the market for residential building renovation and maintenance

The Commission undertook an examination of a segment of the market for residential building renovation and maintenance related to the common areas of residential buildings as it operated just prior to the Competition Ordinance coming into effect. To do this, the Commission sought information from a range of stakeholders and market participants. In particular, the Commission was greatly assisted in its understanding of the market by the Urban Renewal Authority (the URA) and the Hong Kong Housing Society (the HKHS), who provided the Commission with historical information on tenders for projects.

The appointment of ϐirms to undertake building renovation and maintenance work for home owners is usually done in a two-stage process. Commonly, the home owners ϐirst appoint a consultant to advise them on the type of work that needs to be done and to oversee a tender process for the appointment of a contractor. That ϐirm (that is, the consultant) must include an authorised person registered under the Buildings Ordinance (typically a registered architect, engineer, or surveyor). Second, the contractor – who will undertake the physical renovation and maintenance construction work – is appointed by way of a tender overseen by the consultant. ‧2

The Commission’s examination of the market in this case indicated that different types of bid-manipulation practices appear to be of particular concern in this two stage process. One type of bid-manipulation practice occurs where competing contractors engage in bid-rigging cartel conduct or other collusive behaviour intended to inϐluence the outcome of the tender for their services to their favour, typically resulting in an inϐlated contract price compared to a more competitive level. The consequence of the higher price is that the consumers of the contractors’ services, that is, the home owners who have to pay for the building work, pay more because of the collusive practice.

A second type of bid-manipulation practice (which may accompany or facilitate the conduct described in the preceding paragraph) occurs where a consultant and a contractor conspire with each other so that the particular consultant wins the bid to oversee the tender for the physical works (sometimes by putting in an extremely low bid for the consulting services), and then organises for its allied contractor to win the bid for the renovation work at an inϐlated price. Again, the ordinary home owner pays more because of this bid-manipulation practice.

These two practices are very likely not the only conduct engaged in for the purpose of bid-manipulation in this market. The Commission also notes that both practices – potentially in conjunction with other conduct – may be used in combination as part of a broader bid-manipulation scheme. The extent to which speciϐic instances of bid- manipulation could potentially contravene the Competition Ordinance depends on the facts of each case.

The Commission received substantial anecdotal and other market intelligence suggesting that bid-manipulation practices may have taken place regularly in Hong Kong in the recent past in relation to the market examined, to the detriment of Hong Kong consumers. The Commission therefore applied screening techniques to analyse the tender records of past actual projects. As explained in more detail below, screening can help competition authorities detect suspicious conduct and decide where to look more closely for evidence of competition law breaches. The screening carried out by the Commission can provide an indication of whether patterns in the data would be consistent with the widely suspected bid-manipulation practices. It also indicates whether the Commission would likely decide to investigate some of the observed patterns if they were encountered today using a more recent set of tender data. The Commission has undertaken detailed quantitative “screening” analysis on a wide range of projects

The Commission examined the past tender results of a wide range of speciϐic building maintenance projects which the URA and HKHS shared with the Commission on a conϐidential basis. Based on its analysis of these tender records, the Commission found patterns that would be consistent with the above mentioned bid- manipulation practices widely suspected in the building maintenance and renovation market.

3‧ Report on study into aspects of the market for residential building renovation and maintenance

The projects examined were those subsidised under the Operation Building Bright (OBB) scheme, a government subsidy scheme launched in 2009. OBB consisted of two rounds of funding with a total allocation of up to $3.5 billion. Buildings beneϐiting from the scheme are of a certain vintage (30 year-old or over). Geographically, the scheme covers Hong Kong Island, Kowloon and the New Territories and involves building works in the common area of buildings, typical of the works undertaken in most building renovation and maintenance projects initiated by owners in Hong Kong. Information on the tenders concerned was collected by the URA and the HKHS during the course of the scheme. The Commission analysed the results of around two hundred tenders for the appointment of consultants to plan and oversee OBB renovation projects, and of around ϐive hundred tenders for the appointment of contractors to carry out the renovation works.

The Commission examined these tender records by using a method known as screening. Originally proposed by academic economists, screening has been used by competition agencies around the world to facilitate cartel detection. Cartels cause signiϐicant economic harm and ϐighting them is a priority for competition authorities. However, cartels operate in secret and they are hard to detect. Leniency programmes that offer cartelists immunity or reductions in ϐines in exchange for information on cartel conduct have been used by many competition authorities with great success. Screens represent an additional tool competition authorities can use to uncover cartel behaviour and can – as such – complement leniency programmes and other detection techniques. Background information about screening

Generally, screens can be classiϐied into two types – structural and behavioural. 3 Structural screens are based on the structural characteristics of a market (e.g. the number of competitors and product homogeneity) and aim to identify markets that are more susceptible to collusion. Such structural screens can provide useful guidance to competition authorities in deciding which markets within the economy to prioritise when enforcing cartel prohibitions.

Behavioural screens, on the other hand, look for behaviour on the part of market participants within a speciϐic market that appears more likely to be consistent with collusion rather than competition. 4 These screens can again be classiϐied broadly into two categories: (1) screens that look for patterns that are very unlikely to occur under competition and (2) screens that look for patterns that appear inconsistent with some benchmark (for example, a market in another region or some measure of costs). In both cases the screen ϐlags behaviour/patterns that appear(s) inconsistent with competition, indicating that the market concerned may be affected by some form of collusion. The Commission has applied both types of behavioural screens in this market study. A brief review of screens applied elsewhere in the world below illustrates how such screens can work in practice. 3 OECD Directorate for Financial and Enterprise Affairs – Competition Committee (2014), Ex ofϐicio cartel investigations and the use of screens to detect cartels, Background Note by the Secretariat, p.225. Available at http://www.oecd.org/daf/competition/exofficio-cartel-investigation-2013.pdf 4 Ibid, p.20 ‧4

A prominent example internationally is the uncovering of collusive conduct in the setting of the LIBOR benchmark interest rate in the ϐinancial market through the use of screening techniques. 5 LIBOR is an important benchmark interest rate – that is, a price of borrowing money – used widely in ϐinancial markets. It was set daily in London by the British Bankers Association based on individual quotes on the costs of borrowing money from a number of banks. Journalists initially ϐlagged suspicious patterns in the LIBOR benchmark. Academics then followed up with more detailed screening analysis. One of the results of this screening was that many banks had submitted identical quotes for extended periods of time. This is a pattern that seems highly unlikely if the banks made their decisions independently of each other without any coordination. Subsequent investigations by competition authorities and ϐinancial regulators in several jurisdictions led to substantial penalties.

Screens have also been used to detect collusive behaviour in the construction sector. For example, the screening of highway paving project tenders in New York State in the United States suggested that certain known cartelists who had previously participated in bid-rigging rings elsewhere in New York State also rigged the tenders under study. 6 Speciϐically, the authors of the study looked into the relationship between the level and ranking of bids and the underlying costs of the bidders. They found that the level and ranking of bids submitted by the non-cartel ϐirms could be explained by relevant cost indicators while this was not the case for the bids submitted by the cartelists. The authors interpreted these results as an indicator of cover bidding – where bidders agree to submit bids with higher prices or less attractive (or unacceptable) terms as compared with the bid of the designated winner – by those parties with a prior history of cartel conduct. The results of the Commission’s use of screening techniques

The Commission applied a number of different and complementary screening techniques to the tender records it had obtained. One screen the Commission applied focused on tender participation and tender success. The motivation for this screen ϐlows directly from the forms of bid-manipulation widely suspected in this market and outlined above: if certain groups of bidders conspire to inϐluence tender outcomes in their favour, one might expect those groups of bidders to participate in the same tenders frequently. Furthermore, where such groups do participate in the same tender, group members’ chances of winning the tender should also increase. The Commission screened the tender data for such patterns.

More speciϐically, the Commission ϐirst looked for indications of consultants and/or contractors participating in the same tenders more often than would be expected if they were making their decisions to participate independently of each other. It is, of course, difϐicult to decide in practice which level of participation in the same tenders is consistent with independent decision making and which level is not. 5 See, for example, Abrantes-Metz, Rosa M., Michael Kraten, Albert D. Metz and Gim S. Seow (2012), LIBOR Manipulation?, Journal of Banking and Finance, 36(1), pp. 136-150. 6 Porter, Robert H. and Zona, J. Douglas (1993), Detection of Bid Rigging in Procurement Auctions, Journal of Political Economy, 101(3), pp. 518-538. 5‧ Report on study into aspects of the market for residential building renovation and maintenance

‧6

1. The Commission therefore looked at different measures of participation. One measure

evaluated participation from a statistical perspective. The Commission ϐirst asked: how often would we expect to see consultant/contractor and contractor/contractor pairs in the same tender if participating together occurred at random (or put differently, if participation were statistically independent)? The Commission then compared this benchmark level of anticipated pairs with actual pairs in the data. It labelled pairs that appeared too frequently as being possibly associated. 7 A second measure of groups of contractors started from actual participation in tenders. The measure looked for groups of contractors where each group member (1) participated with some frequency in tenders in general and (2) satisϐied some threshold of participation in other group members’ tenders. Again, the Commission considered groups of contractors that fulϐilled these requirements as being possibly associated. As a result of these analyses, the Commission identiϐied possible associations in the data between certain consultants and contractors as well as between certain contractors.

1. The Commission then went on to check whether the presence of an association between

bidders – as indicated by the above screening analysis – increased the prospect of winning a tender. The result is that it did. Contractors were more likely to win a tender where our screening indicated they were associated with the consultant organising the tender. Similarly, contractors were more likely to win a tender the higher the number of associated contractors – again, as indicated by the above screening analysis – participating in the tender.

1. Overall, these results suggest that participation patterns in the tender data appear

consistent with the widely alleged bid-manipulation practices described at the outset of this report. While the results do not prove that such practices were present, they would – if encountered today using more recent data – likely lead the Commission to investigate particular tenders.

1. In a separate analysis, the Commission screened for bid amounts that appear not to be

reϐlective of the costs of providing the underlying goods and services. The motivation for the screen is that in a competitive environment there should typically be a relationship between the cost of providing the goods and services and the bid submitted: the higher the costs underlying the bid, the higher the level of the bid. The Commission’s analyses indicate that bidding patterns of consultants often appear out of line with the underlying costs. There are two ways by which the Commission arrived at this conclusion.

1. In the ϐirst part of the analysis, the Commission compared the values of consultants’ bids

with an estimate obtained from an industry expert of the minimum costs of providing the services associated with even the most basic consulting project. The ϐigure below illustrates this analysis. 7 The word “associated” as used in this paragraph is not intended to imply any legal association in a corporate sense. The word merely refers to the fact that particular parties appear together in particular tenders more often than might be anticipated if they made their decisions completely independently.

The ϐigure shows the distribution of consultants’ bids with respect to their value (the bid amount). The red line in the ϐigure indicates the minimum estimate of costs associated with even the most basic consultancy project as provided by an industry expert. More than 65% of the bids submitted by consultants fall below that estimate. This may suggest that consultants’ bids are suspiciously low in many projects. One possible interpretation would be that consultants bid aggressively low in order to win a project and subsequently beneϐit from awarding renovation work to particular contractors.

In the second part of the screening analysis of the costs underlying bids, the Commission analysed whether consultants’ bids increased with the size of a project. While genuine bids should show a relationship between project size and bid value, this need not necessarily be the case for cover bids that are not intended to win a project. The results indicate that some consultants’ bids did vary in line with project size, but other consultants’ bids did not (or at least much less). The ϐigure below illustrates the result. 7‧ Report on study into aspects of the market for residential building renovation and maintenance

The ϐigure shows the relationship between bid amounts and project size (approximated by the number of units in a building) for two consultants. The consultant on the left submitted bids that tend to increase with project size. This is a pattern one would expect under competition: the larger the project, the higher the associated costs and the higher the value of the bid. The consultant on the right, on the other hand, submitted bids that show no clear relationship with the size of the project (and often take on the same value for projects of very different size). One possible interpretation for this latter pattern is that certain consultants may have submitted bids that were unrelated to their costs in certain tenders.

Overall the results of the Commission’s screening analyses would be consistent with the widely alleged bid-manipulation practices outlined above having been present to an extent. They are, however, no proof of such activities having actually taken place; our screening analyses are neither suited nor intended to conclusively prove contraventions. The purpose of screens is primarily to identify patterns that are suspicious in order to focus an investigation and decide where to look more closely for additional evidence. As a consequence, the Commission has neither concluded that any speciϐic practices led to the patterns observed during the study, nor that the conduct underlying these patterns would have contravened the Competition Ordinance had it been in full effect at the relevant time. Nevertheless, if encountered today, the results would likely lead the Commission to initiate further investigations into certain aspects of this market. ‧8

The Commission will investigate future bid-rigging collusion that is now illegal under the Competition Ordinance

1. The Competition Ordinance came into full effect on 14 December 2015. Under the First

Conduct Rule in the Ordinance, businesses must not make, give effect to or facilitate agreements that have the object or effect of preventing, restricting or distorting competition in Hong Kong. If the Commission were to encounter similar patterns detected in the context of this study today, it would likely raise concerns that there may be conduct underlying them that could contravene the First Conduct Rule and warrant further investigation. If such investigations eventually conϐirmed suspected contraventions of the First Conduct Rule, the conduct could be brought to the Competition Tribunal for the imposition of penalties. In particular, where there is evidence of collusion on bids between competing contractors as part of a bid-rigging cartel, the practices may constitute serious anti-competitive conduct as deϐined by the Competition Ordinance and may attract very serious penalties.

1. Moreover, if a consultant conspires with, aids or is in any way knowingly

concerned in a bid-rigging cartel, the consultant is also exposed to pecuniary penalties under the Competition Ordinance. Market participants are advised to bid for projects on a competitive basis and to avoid collusive practices or conspiring with others in support of such practices now that the Competition Ordinance is in full force.

1. The methods used in the Commission’s study of the building renovation and maintenance

sector have potential implications for future conϐidential investigations and law enforcement actions to be undertaken by the Commission. As a result, the Commission proposes to limit the amount of detail it provides on the methods employed in this case.

1. The Commission’s enforcement and advocacy activities will be informed by the

results of the screening exercises in this study, as it attempts to uncover bid- rigging and other contraventions of the Competition Ordinance now that the law is in full force. To the extent that bid-rigging cartels, in particular, can be prevented, Hong Kong home owners and tax payers will beneϐit from more competitive contract prices.

1. Home owners and other members of the public are encouraged to be alert to

the prospect of bid manipulation and are encouraged to come forward and report any speciϐic information to the Commission and other authorities for further examination. The Commission will be issuing educational materials about bid- rigging including brochures and videos. This will include detailed guidance to relevant stakeholders, such as procurement ofϐicers, on how to structure tenders to avoid potential bid manipulation and how to detect bid manipulation more readily. 9‧ Report on study into aspects of the market for residential building renovation and maintenance

The Commission supports the URA’s, the HKHS’s and the Government’s initiatives in this market

1. The Commission wishes to acknowledge that in administering the OBB Scheme,

the URA and the HKHS have taken a number of important steps to address the problem of bid-rigging. Their formulation of OBB Maintenance Guidelines and New Tender Arrangements (“NTA”) in consultation with the ICAC has gained notable success in improving the competitiveness of the tender process for OBB projects.

Under the NTA, three tender procedures originally handled by the authorised person, building management company and/or owners’ corporation members of buildings under the OBB scheme were managed by an independent accounting ϐirm appointed by the URA or HKHS. The whole process from collecting, acknowledging and recording expressions of interest, distributing tender documents as well as collecting and opening the returned tenders was carried out and certiϐied by a certiϐied public accountant. In order to encourage more building contractors to take part in the tendering process and in line with the OBB Maintenance Guidelines, 10 additional registered general building contractors were selected by the appointed independent accounting ϐirm from a computer ballot to add to the list of tenderers. 8

Before and after the introduction of the NTA in September 2013, in the cases handled by URA, the average number of expressions of interest for an OBB project rose from around 20 to 50, and the number of bids submitted rose from around 16 to 29. The most striking change was an increase in the share of projects for which actual award prices were in line with independent consultants’ pre-tender estimates from around 54% to 93%.

The Commission also understands that the URA and the HKHS have referred suspected cases of bid-rigging with criminal elements to the Police and the ICAC.

Th e Government of the HKSAR has recently announced additional measures to combat bid-rigging. Speciϐically, on 10 May 2016 the URA launched the “Smart Tender” Building Rehabilitation Facilitating Services (pilot scheme) which will (1) set up an electronic bidding platform for property owners to invite bids and receive expressions of interest from contractors for building renovations, thereby keeping conϐidential the identity of the bidders until the bid opens, and (2) provide access for home owners to professional advice regarding the recommended scope of building renovation projects and estimated value of works. 9 8 See announcement by URA and HKHS, available at http://www.ura.org.hk/en/media/press- release/2013/20130918.aspx 9 See http://www.ura.org.hk/en/media/press-release/2016/20160510.aspx ‧10

The Commission supports and encourages these Government initiatives. Hong Kong home owners will beneϐit signiϐicantly if markets for this important expense operate competitively – home owners would receive better prices, better quality services, and more choices in building renovation and maintenance. The electronic bidding platform proposed by the Government can, by partly anonymising bids, help tenders operate more effectively and protect against the establishment of bid rigging cartels. Similarly, the access to the professional advisory services proposed by the Government can assist home owners to be better informed and more able to distinguish between legitimate and collusive bids, and assist them to make better, more informed and competitive choices as to how to spend their money on the renovation and maintenance of their homes. The Commission welcomes these positive outcomes. Going forward

The techniques developed in the context of this study could potentially be used to detect possible competition law violation going forward. The Commission now has the tools developed over the course of the study at its disposal. The ability to conduct a meaningful screening exercise depends very much on the amount and quality of data that are made available for analysis. In this connection, the Commission calls upon both the public and private sectors to work on collecting and building databanks of building maintenance- related tenders. For example, the Commission will explore with the Government the possibility of assessing data on different projects collected via the electronic bidding platform mentioned in paragraph 40 above.

As the tender process home owners use to award contracts may expose them to certain forms of bid-manipulation, information about how to prevent and detect bid-rigging is important. It is also important that consultants and contractors understand their obligations. The Commission has identiϐied the need to undertake further education and outreach activities on bid-rigging. The Commission is launching a series of brochures, videos and exhibitions on this topic, and all participants or would-be participants in tenders are urged to actively ϐind out more.

More generally the Commission could also see that there is considerable scope to work with stakeholders such as the URA and the ICAC and other government bodies to closely review the process of awarding work in this area and to recommend measures that could help protect home owners. This could, for example, involve recommended changes to the tendering process and tender documents. For example, consultants and contractors could be required to declare that no bid-rigging has occurred when submitting tenders. This would ensure that bidders turn their minds to the need to ensure no bid-rigging has occurred. Additionally, if the bid is subsequently found to be rigged the tenderer may be able to take private action in respect of the misleading declaration. 11‧ Report on study into aspects of the market for residential building renovation and maintenance

Consultants of different professions and contractors play an essential role in building maintenance projects. The market study has highlighted possible concerns about the participation of some of these players in bid-manipulation practices. In this connection, the Commission calls upon the relevant industries and professional bodies to develop and strengthen the codes of conduct for their members to give due regard to the competition rules. The Commission stands ready to facilitate these industries and professional bodies in such an exercise. Conclusion

This market study has considered the issue of bid-manipulation in residential building renovation and maintenance project tenders. The Commission’s use of screening techniques to analyse tender outcomes has revealed patterns that would be consistent with the wide-spread feeling among the public that there may have been problems in building renovation and maintenance markets. If the Commission were to obtain similar results today, it would very likely investigate further certain patterns highlighted by the analysis. The results of the study will be used to inform the Commission’s enforcement and advocacy activities now that the Competition Ordinance is in full effect.

Those who might be tempted to manipulate bids in contravention of the competition rules should know that the Commission is watching and it has at its disposal a number of different tools to detect such contraventions. The Commission understands what has been taking place, and it will investigate where it can. Those contemplating rigging a bid should abandon such projects. Those already involved in rigging bids should realise that they are involved in serious anti-competitive conduct and should do the right thing by approaching the Commission to apply for leniency under the Commission’s Leniency Programme to avoid the risk of facing substantial penalties and other sanctions. The Commission has identiϐied bid-rigging cartels as a priority for enforcement and will use the full extent of its powers to end bid-rigging cartels.

The study also provides an opportunity for the Commission to share knowledge with relevant government departments and public authorities to assist them to identify where potentially anti-competitive bid-rigging conduct has occurred, and measures that can be taken to minimise the risk of it occurring in the future. Additionally, where the Commission identiϐies bid-manipulation that is unlikely to contravene the Competition Ordinance, but may be an offence under other laws (e.g. anti-corruption or bribery laws) the Commission will refer relevant cases to the appropriate authorities such as the Police and the ICAC. 24 May 2016 ‧12

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Competition Commission and W Hing Construction Co Ltd (永興聯合建築有限公司) ———— [2021] HKCA 877 (Court of Appeal) (Civil Appeal No 257 of 2019) ———— Lam V-P, Barma and Au JJA 5 May, 18 June 2021 Competition law — Competition Tribunal — proceedings for breach of “first conduct rule” — proceedings against partnership for pecuniary penalty — liability of individual partners — no basis to import requirement of mens rea on part of individual partners — Competition Ordinance (Cap.619) Competition law — Competition Tribunal — proceedings for pecuniary penalty — standard of proof — inappropriate for Court of Appeal to determine issue at high level of abstraction — Competition Ordinance (Cap.619) Civil procedure — appeal — Court of Appeal — discretion to entertain appeal where lis between parties had gone — inappropriate to determine at high level of abstraction 競爭法 — 競爭事務審裁處 — 違反「第一行為守則」的法律程序 — 針 對合夥的金錢處罰的法律程序 — 個人合夥人的法律責任 — 沒有基礎去 引入個人合夥人該部分的犯罪意圖之要求 — 《競爭條例》(第619章) 競爭法 — 競爭事務審裁處 — 金錢處罰的相關法律程序 — 舉證標準 — 不適合由上訴法院於高度抽象的層面上裁定爭議 — 《競爭條例》(第619 章) 民事訴訟程序 — 上訴 — 上訴法院 — 在訴訟方之間的爭議已消失的情 況下受理上訴的酌情決定權 — 不適合於高度抽象的層面上裁定爭議 R4 was found by the Competition Tribunal (the Tribunal) to have contravened the “first conduct rule” under the Competition Ordinance (Cap.619) (the Ordinance). Subsequently, the Tribunal imposed sanction by way of pecuniary penalties. In the Originating Notice of Application, the Competition Commission (the Commission) had named R4 as “Cheung Yiu Fai Danny and Wong [2021] 3 HKLRD 219

Tung Hoi (in partnership trading as Tai Dou Building Contractor)”. Xs, the two named individual partners, appealed against their liability, submitting, inter alia, that: (i) since it was conceded before the Tribunal that the Commission was not proceeding against the unnamed partners, the Commission could not have been suing in respect of their joint liability stemming from the acts of the firm and was actually suing Xs as individuals regarding their own personal involvement in respect of the contravention of the first conduct rule; (ii) because the liability of the partners was joint, and not several, the proceedings were defective by virtue of the failure to join the unnamed partners; and (iii) taking into account the criminal nature of the proceedings, Xs should not have been held liable in the absence of personal acts or mens rea on their part constituting breach of the first conduct rule. Xs did not seek to disturb the Tribunal’s finding that the firm was liable. The Commission, by respondent’s notice, sought to challenge the determination that the standard of proof for proceedings for a pecuniary penalty under ss.92 and 93 of the Ordinance was proof beyond reasonable doubt. It contended, inter alia, that the Ordinance had impliedly derogated from the criminal standard, otherwise applicable pursuant to art.11 of the Hong Kong Bill of Rights, by necessary implication by virtue of potential frustration of effective enforcement. Held, dismissing the appeal and declining to address the respondent’s notice, that: (1) Although the naming of R4 in the Originating Notice of Application and its description therein was ambiguous, reading it as a whole and in context, the acts and conduct pleaded as contraventions of the first conduct rule were those of the partnership. In any event, all parties had proceeded in the Tribunal on the basis that the firm was R4, and Xs were proceeded against by virtue of their capacity as partners. There was no rigid rule that in advancing a claim on joint liability all parties jointly liable must be joined. (See paras.28, 34, 65, 67.) (2) Notwithstanding the application of criminal standard of proof by virtue of art.11 of the Hong Kong Bill of Rights in terms of procedural safeguards, on the proper construction of the Ordinance, proceedings in respect of contraventions of the first conduct rule did not involve the trial of a substantive statutory criminal offence. Accordingly, there was no basis to import the requirement of mens rea on the part of Xs; their liability flowed from the liability of partners for the civil obligations of a partnership (Competition Commission v TH Lee Book Co Ltd [2020] HKCT 12 approved; Secretary for Justice v Cheung Kai Yin [2016] 4 HKLRD 367 applied; R [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 220

v W Stevenson & Sons (A Partnership) [2008] 2 Cr App R 14, Riley v Director of Public Prosecutions [2017] 1 WLR 505 distinguished). (See paras.39, 45–46, 57–58, 61.) (3) The Court was not persuaded that it should determine the implied derogation point in the respondent’s notice at a high level of abstraction, having dismissed Xs’ appeal on other grounds. The discretion to hear an appeal where the lis between the parties had gone was to be exercised with caution. In the absence of argument concerning potential frustration of enforcement objectives having been tested where the application of the criminal standard would have a real impact, it was not appropriate to determine the issue (R v Secretary of State for the Home Department, ex p Salem [1999] 1 AC 450, Chit Fai Motors Co Ltd v Commissioner for Transport [2004] 1 HKC 465 applied; Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170, Competition Commission v Nutanix Hong Kong Ltd [2019] HKCT 2, [2019] 3 HKC 307 considered). (See paras.76, 84, 86, 88–89, 94–96.) Appeal This was an appeal by two individual partners named in the title of the proceedings as the partners of a firm from the decision of Godfrey Lam J, sitting as the President of the Competition Tribunal, that the firm had contravened the “first conduct rule” under the Competition Ordinance (Cap.619) (see [2019] 3 HKLRD 46), and, by respondent’s notice, an appeal by the Competition Commission concerning the applicable standard of proof in proceedings for pecuniary penalties under that Ordinance. 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. Legislation mentioned in the judgment Competition Ordinance (Cap.619) ss.6, 45, 45(3)(a), (b), 52–55, 93–96, 130, 133, 144, 147, 148, 148(3), 154, 155, 155A, 155A(2)(b), 171, 171(1), 172–175, Sch.3, 3 paras.1(b), (c), (d), (e), (g), (h), (j), (k), (l), (m), (n), (o), (p), (q), Pt.4 Divisions 1, 2, 3, 4, Pt.6 Divisions 2, 3, 5 Competition Tribunal Rules (Cap.619D, Sub.Leg.) s.4 Hong Kong Bill of Rights Ordinance (Cap.383) s.8 art.11, 11(1) Partnership Ordinance (Cap.38) s.11 Rules of the High Court (Cap.4A, Sub.Leg.) O.81 rr.1, 5 221 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219

Cases cited in the judgment Beghal v Director of Public Prosecutions [2015] UKSC 49, [2016] AC 88, [2015] 3 WLR 344, [2016] 1 All ER 483, [2015] 2 Cr App R 34 Chit Fai Motors Co Ltd v Commissioner for Transport [2004] 1 HKC 465 Competition Commission v Nutanix Hong Kong Ltd [2019] HKCT 2, [2019] 3 HKC 307 Competition Commission v TH Lee Book Co Ltd [2020] HKCT 12, [2021] 2 HKLRD E2, [2020] HKEC 4147 Hin Lin Yee v HKSAR (2010) 13 HKCFAR 142, [2010] 2 HKLRD 826, [2010] 3 HKC 403 JJB Sports PLC v Office Fair Trading [2004] CAT 17, [2005] Comp AR 29 Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170, [2008] 3 HKLRD 372 Kot See For v Lam Man Cheung [2021] 2 HKLRD 263, [2021] HKCA 348 Kulemesin v HKSAR (2013) 16 HKCFAR 195, [2014] 1 HKC 1 Napp Pharmaceutical Holding Ltd v Director General of Fair Trading [2002] CAT 1, [2002] ECC 13 R v Secretary of State for the Home Department, ex p Salem [1999] 1 AC 450, [1999] 2 WLR 483, [1999] 2 All ER 42, (1999) 11 Admin LR 194 R v Secretary of State for the Home Department, ex p Simms [2000] 2 AC 115, [1999] 3 WLR 328, [1999] 3 All ER 400, [1999] EMLR 689 R v W Stevenson & Sons (A Partnership) [2008] EWCA Crim 2732008] 2 Cr App R 14 Riley v Director of Public Prosecutions [2016] EWHC 2531 (Admin), [2017] 1 WLR 505 Robinson v Geisel [1894] 2 QB 685 Secretary for Justice v Cheung Kai Yin [2016] 4 HKLRD 367, [2016) 6 HKC 25 Other materials mentioned in the judgment Halsbury's Laws of England (5th ed., 2020), Vol.79, para.84 Hong Kong Civil Procedure 2021 Vol.1, para.81/1/10 Lindley & Banks on Partnership (20th ed.), paras.14-02, 14-43, 14-44 REASONS FOR JUDGMENT Lam V-P (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 [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 222

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 4th 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 4th 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]–[332] of the Judgment: [330] Between June and November 2016, the respondents, each an Appointed DC in On Tat Estate (Phase 1), made 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. 223 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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]–[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). [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 224

[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: Floors worked in Shing Tat House Floors worked in Oi Tat House Floors worked in Chun Tat House Appointed DC 8, 18, 28, 38 4, 14, 24, 34 1, 11, 21, 31 W Hing (R1) 9, 19, 29, 39 5, 15, 25, 35 2, 12 , 22, 32 Sun Spark (R2) 10, 20, 30, 40 6, 16, 26, 36 3, 13, 23, 33 Mau Hang (R3) 1, 11, 21, 31 7, 17, 27, 37 4, 14, 24, 34 Tai Dou (R4) 2, 12 , 22, 32 8, 18, 28, 38 5, 15, 25, 35 Kam Kee (R5) 3, 13, 23, 33 9, 19, 29, 39 6, 16, 26, 36 Hip Yick (R6) 4, 14, 24, 34 10, 20, 30, 40 7, 17, 27, 37 Tai Wah (R7) 5, 15, 25, 35 1, 11, 21, 31 8, 18, 28, 38 Wai Sun (R8) 6, 16, 26, 36 2, 12 , 22, 32 9, 19, 29, 39 Wide Project (R9) 7, 17, 27, 37 3, 13, 23, 33 10, 20, 30, 40 Luen Hop (R10) 225 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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 organisation was discussed by the President at [324]–[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 2nd, 3rd, 6th, 7th, 8th and 10th 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 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 2nd, 3rd, 5th, 6th, 7th, 8th and 10th respondents 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), [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 226

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 V-P 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 4th 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 4th respondent filed an amended Notice of Appeal on 4 February 2021 to reflect the outcome of the Striking Out Judgment. 227 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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 4th 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 4th Respondent as outlined above, we agree with Mr Chiu that the 4th 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 4th 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 4th 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 4th 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 4th 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 4th respondent and parties had always proceeded on that basis in the Tribunal. [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 228

We agree with the Commission and reject the submissions of Mr Hui that only the two named individual partners were the 4th respondent but not the firm Tai Dou. 18. There had been changes of solicitors acting for the 4th respondent. In the Tribunal and in this appeal, the 4th 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 4th 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 4th 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 4th 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 4th 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 4th 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 4th 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 4th respondent on instruction from Henry Wan & Yeung at the pre-trial review. The application for amendments of the Response (to enable the 4th 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 4th respondent was JCC Cheung & Co. 26. JCC Cheung & Co became solicitors for the 4th respondent on 25 June 2018 by a Notice of Change of Solicitors. Before that, the solicitors on the record for the 4th respondent was Littlewoods. 229 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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 4th 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 para.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 paras.22–24, it was pleaded that the respondents (including the 4th 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 paras.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 4th respondent was in the same document as the Response of the 2nd, 3rd, 6th, 7th, 8th and 10th 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 4th respondent, not the two named individuals. It is also plain from the reading of the Response that those acting for the 4th respondent understood that Tai Dou (the firm) was the 4th respondent instead of the two named individual partners. At para.19 of the Response, it was pleaded that the respondents (thus including the 4th respondent) agreed to observe the terms of the Licence (which was executed by Tai Dou). At para.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 paras.22(b) and 32 that the respondents would accept and conduct businesses with the tenants. In the context of the 4th 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 paras.44 and 46 referred to the use of the flyers by [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 230

the respondents. In the context of the 4th 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 4th 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 4th respondent. 32. As mentioned above, there was a late application for amendment of the Response by the 4th 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 4th 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 4th respondent (which the President understood to be Tai Dou) and its partners. The application was presented on the basis that Tai Dou was the 4th 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 4th respondent as regards the delay in making the application. Pacquet Wong, the unnamed partner, authorised Mr KC Ho to handle the defence of the 4th respondent. In [17]–[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 4th 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 4th respondent. Hence, naturally the President regarded Tai Dou to be the 4th respondent in the Judgment, see in particular [324]–[328]. In the sealed judgment of 17 May 2019 (filed on 9 July 2019), it was Tai Dou that was adjudged (as the 4th respondent) to have contravened s.6 of the Ordinance. 231 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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]–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

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 2 Similar analysis was given by the President in the course of closing submissions when he invited submissions from counsel for the 4th respondent on the naming of two instead of all four partners of Tai Dou, see transcript of Day 16 at Appeal Bundle G p.1313–1314, in particular internal pp.20–22. See also the submissions of Mr Beard before the Tribunal on Day 17 at Appeal Bundle G p.1358, internal pp.58–59. [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 232

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

1. 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 s.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 Sch.3 to the Ordinance. Such orders include orders restraining or prohibiting some specified acts or conduct3 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 s.155A of the Ordinance, a pecuniary penalty imposed under s.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 s.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 (20th ed.), para.14-02, R v W Stevenson & Sons [2008] 2 Cr App R 14, [30]–[31], counsel submitted that in the criminal context, partners should be treated as a separate entity 3 See paras.1(b), (d), (g), (j), (l), (m), (q) of Sch.3. 4 See paras.1(c), (e), (h), (k), (n), (o), (p) of Sch.3. 233 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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 4th respondent in the proceedings before the Tribunal. Thus, Mr Hui submitted, the President erred in finding liability on the basis that the 4th 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) 13 HKCFAR 142, [10], and Kulemesin v HKSAR (2013) 16 HKCFAR 195, [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, [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 s.8 art.11 of the Hong Kong Bill of Rights Ordinance (Cap.383) (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, [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 [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 234

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 ss.52–55 and ss.172–175. Contravention of the first conduct rule is not included in those parts of the Ordinance. It is also provided specifically in s.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 ss.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 ss.92, 108 and 109 of the Ordinance. 51. Subject to modifications in the Competition Tribunal Rules (Cap.619D, Sub.Leg.) (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 s.144 of the Ordinance and s.4 of the Rules (which provide for the application of the Rules of the High Court (Cap.4A, Sub.Leg.) to proceedings in the Tribunal). The appeal mechanism as set out in ss.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 s.45(3)(b)) and proceedings for pecuniary penalty (under s.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 s.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: 235 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

(a) Acceptance of a commitment by the Commission from a person and the enforcement of such commitment under Division 1 of Pt.4 of the Ordinance; (b) Issuance of infringement notices by the Commission under Division 2 of Pt.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 Pt.4 of the Ordinance; (d) The Commission may under Division 4 of Pt.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 Pt.6 of the Ordinance; (f) Under s.94 in Division 3 of Pt.6, the Tribunal, whether or not it makes an order for pecuniary penalty, can make other types of order as specified in Sch.3 to the Ordinance; (g) Under s.95 in Division 3 of Pt.6, the Tribunal can also make interim orders pending its determination of an application under s.94; and (h) Under Division 5 of Pt.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)–(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)–(h), there will be proceedings in the Tribunal. Since the Tribunal does not have any criminal jurisdiction (as it has been made clear in s.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 TH Lee Book Co Ltd [2020] HKCT 12, [2021] 2 HKLRD E2, [2020] HKEC 4147, [7], and in the Sanction Judgment at [129]–[133]. [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 236

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 s.93. There is no room for the application of the principle in R v W Stevenson & Sons and Riley v Director of Public Prosecutions (which concerned convictions and trials of criminal offences) and our analysis above5 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]–[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 4th respondent, Mr Hui referred to a commentary in Hong Kong Civil Procedure 2021, Vol.1 at para.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 5 At [39]–[41] above. 237 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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 4th 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 4th 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 (5th ed., 2020), Vol.79, para.84; Lindley & Banks on Partnership (20th ed.), 6 As recorded in the transcript of Day 17 at Appeal Bundle G p.1358, internal p.58. [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 238

paras.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 ss.93–96 as a “person” without naming any individuals. We are sure that the President has not overlooked O.81 r.1 which, as far as we can see, is applicable to proceedings in the Competition Tribunal by reason of s.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 O.81 r.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 O.81 r.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 4th 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 7 At 87 of the Sanction Judgment, cited at [36] above. 239 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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 Ltd [2019] HKCT 2, [2019] 3 HKC 307, 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 Ltd 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 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 [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 240

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 R v Secretary of State for the Home Department, ex p Simms [2000] 2 AC 115,

1. 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] 2 HKLRD 263. 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]–[67] of Competition Commission v Nutanix Hong Kong Limited. He could not find such implication from the fact that civil procedure is adopted for the proceedings and the legislative materials. At [68]–[71], the President summarised 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]–[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]–[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, 241 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

we do not think it is sufficient for us to adopt some passages from the decisions of the UK Competition Appeal Tribunal8 or a textbook9 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, and 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. 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 (9th ed.). [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 242

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 ss.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. 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, [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 emphasised 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 R v Secretary of State for the Home Department, ex p Salem [1999] 1 AC 450, 457 (and cited by Ma CJHC at sub-para.(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. 243 Competition Commission v W Hing Construction Co Ltd [2021] 3 HKLRD 219 Lam V-P

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. Reported by Robert Drake [2021] 3 HKLRD 219 HONG KONG LAW REPORTS & DIGEST 244

842 HKSAR and Chan Wai Yip Bokhary, Chan and Ribeiro PJJ, Litton and Sir Anthony Mason NPJJ Final Appeal No 4 of 2010 (Criminal) 25 November, 13 December 2010 Criminal law and procedure — conspiracy to defraud — auction by public body — restricted auction of cooked food stalls — secret pre-auction allotment and agreement by defendants not to bid against each other for stalls in order to knock down to reserve price — “knock out” agreements, that is agreements to keep price down, were lawful — valid and enforceable contract could not itself be “dishonest” for purposes of criminal conspiracy to defraud Ds were convicted of conspiracy to defraud. Ds, tenants of cooked food stalls, were given priority to bid for new stalls in a restricted auction held exclusively for them by the Food and Environmental Hygiene Department (FEHD). The reserve price for stalls was fixed at 75% of the market rent. Ds pre-allotted stalls amongst themselves and agreed that no one else would bid for the same stall. At the auction, there was no competitive bidding and each stall was knocked down to the sole bidder at the reserve price. Ds’ appeal against conviction was allowed by the Court of Appeal, which held that an agreement not to compete at an auction was valid and enforceable. At issue was whether a secret agreement between potential bidders not to compete at an auction, or such an agreement followed by participation by such bidders at the auction, fell within the formulation of the common law offence of conspiracy to defraud as formulated in Mo Yuk Ping v HKSAR (2007) 10 HKCFAR 386, with the focus on “dishonest means”. Held, dismissing the appeal, that: (Per Sir Anthony Mason NPJ) (1) A long line of English authorities, which went back almost 160 years, was to the effect that “knock out” agreements, that is agreements to keep the price down, were lawful. A contract which was valid and enforceable could not itself be “dishonest” for the purposes of criminal conspiracy to defraud. Not only had the relevant decisions stood for a very long time, they almost certainly had been taken to represent the law of conspiracy in Hong Kong. If there was to be a change, then it was a matter entirely for the legislature (Galton v Emuss [1844] 1 Coll 243, Re Carew’s Estate [1858] 26 Beav 187, Heffer v Martyn (1867) 36 LJ Ch 373, Jones v North (1874–75) LR 19 Eq 426, Rawlings v General Trading Co [1921] 1 KB 635, Cohen v Roche [1927] 1 KB

(2010) 13 HKCFAR 843 HKSAR v Chan Wai Yip Litton NPJ 169, Pallant v Morgan [1953] Ch 43, Harrop v Thompson & Another [1975] 1 WLR 545, Norris v Government of the United States of America [2008] 1 AC 920 applied). (See paras.54–75.) (2) “Knock-out” agreements in restraint of trade might be void and unenforceable as between the parties, but not illegal. So long as traders individually or collectively were pursuing their own business interests without infringing the rights of others or intending to do them harm, that pursuit was legitimate, even if, by deliberately lowering prices, it drove others out of business (Mogul Steamship Co Ltd v McGregor Gow & Co (1888) LR 21 QBD 544 (CA), Mogul Steamship Co Ltd v McGregor Gow & Co [1892] AC 25 (HL), Rawlings v General Trading Co [1921] 1 KB 635 applied; R v De Berenger (1814) 3 M & S 67, Scott v Brown, Doering, McNab & Co [1892] 2 QB 724 explained). (See paras.71–73.) (3) The FEHD could protect itself from “knock out” agreements by fixing a reserve (and not disclosing it) and reserving the right to bid and withdraw (Harrop v Thompson [1975] 1 WLR 545 applied). (See para.76.)  (Per Litton NPJ) (4) Where an agreement not to compete in an auction had no deceptive element, the fact that it was made in secret did not by itself render it dishonest in law: the potential purchasers had not set out to do something lawful by unlawful means. Persons attending an auction owed no obligation to the vendor to compete with each other; nor were they required by law to ensure the vendor achieved the highest possible price. Further, there was no suggestion that the pre-allotment arrangement was aimed at harming the FEHD’s economic interests. Ds were looking to their own economic interests (Rawlings v General Trading Co [1921] 1 KB 635 applied). (See paras.16, 24–27.) 刑法與刑事訴訟程序— 串謀欺詐罪— 公營機構舉行投標— 局限性競 投熟食檔位— 各名被告人於競投進行前私下分配檔位，並協定不會互 相就檔位出價，以期用底價投得檔位— 此等「壓價」協議乃屬合法— 就串謀欺詐的刑事罪行而言，有效和可予以強制執行的合約本身不能構 成「不誠實」 本案各名被告人經原審後被判串謀欺詐罪成立。案情指他們是各個熟食 檔位的租戶，而食物環境衛生署（下稱「食環署」）專為他們舉行一場局 限性投標，讓他們可優先競投新的熟食檔位。各個檔位的底價，定為市 值租金的75%。投標進行前，每名被告人自行認投一個檔位，而他們協 定無人會競投同一個檔位。投標過程中，每一個檔位均無人出價競投， 結果由唯一承價人以底價投得。各名被告人不服定罪，提出上訴，而上 訴法庭判處各人上訴得直，並裁定各人同意不在投標過程中出價競投的 協議有效和可予以強制執行。控方不服裁決，上訴至終審法院，所涉爭 議點為：參與投標人士私下協定不在投標過程中出價競投的秘密協議或 該等人士訂立該等協議後參與投標，是否合乎Mo Yuk Ping v HKSAR HKSAR v Chan Wai Yip

844 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR (2007) 10 HKCFAR 386一案對普通法下「串謀欺詐」罪行的表述，特別 是當中關於「不誠實方式」的元素？ 裁決—駁回上訴（判詞由非常任法官梅師賢爵士作出）： (1) 根據過往近160年的英國案例典據，「壓價」協議乃屬合法。就串謀 欺詐的刑事罪行而言，有效和可予以強制執行的合約本身不能構成 「不誠實」。有關的案例典據不但歷史悠久，而且幾乎肯定已被視 為代表關於串謀罪的香港法律。假如要改變這方面的法律，則須 由立法機關全權決定如何進行（引用Galton v Emuss [1844] 1 Coll  243，Re Carew’s Estate [1858] 26 Beav 187，Heffer v Martyn (1867) 36 LJ Ch 373，Jones v North (1874—75) LR 19 Eq 426，Rawlings v General Trading Co [1921] 1 KB 635，Cohen v Roche [1927] 1 KB 169，Pallant v Morgan [1953] Ch 43，Harrop v Thompson & Another [1975] 1 WLR 545，Norris v Government of the United States of America [2008] 1 AC 920）。（見第54至75段） (2) 用以限制貿易的「壓價」協議雖然在協議各方之間可能無效和不可 予以強制執行，但並非不合法。從商人士個別或集體地謀求本身 商業利益的做法，只要是沒有侵犯他人權利或意圖損害他人權益， 便屬合法，即使從商人士藉著故意降價而令其他競爭對手無法生 存，情況亦然（引用Mogul Steamship Co Ltd v McGregor Gow & Co (1888) LR 21 QBD 544 (CA)，Mogul Steamship Co Ltd v McGregor Gow & Co [1892] AC 25 (HL)，Rawlings v General Trading Co [1921] 1 KB 635；R v De Berenger (1814) 3 M & S 67，Scott v Brown, Doering, McNab & Co [1892] 2 QB 724予以解釋）。（見第71至73 段） (3) 為免受「壓價」協議影響，食環署可釐定而不披露投標項目的底 價，以及保留出價和撤回投標項目的權利（引用Harrop v Thompson [1975] 1 WLR 545）。（見第76段） （判詞由非常任法官烈顯倫作出） (4) 對於不在投標過程中出價競投的協議，假如該協議不帶有欺詐成 分，則該協議即使是秘密達成，本身也不會令該協議構成法律所 指的不誠實：準買家並未開始以不合法方式做合法的事情。出席 投標的人士並不對賣家負有互相競投的責任；法律亦沒有要求該等 人士確保賣家以可行範圍內的最高價格賣出投標項目。此外，案中 沒有證據顯示各名被告人於投標進行前自行認投檔位的用意是損害 食環署的經濟利益。各名被告人所關注的，不外是本身的經濟利益 （引用Rawlings v General Trading Co [1921] 1 KB 635）。（見第16、 24至27段） Mr Kevin Zervos SC, Director of Public Prosecutions, Mr Wesley Wong, Deputy Director of Public Prosecutions, and Mr Michael Wong, Senior Public Prosecutor (Manager), for the applicant. Mr Martin Lee SC, Mr Siu Him Lee and Ms Bonnie Tam, instructed by JCC Cheung & Co, for the third, fifth to ninth, thirteenth, fifteenth to seventeenth respondents. Mr Kenny Chan, instructed by Liu, Chan & Lam for the fourth, tenth and eleventh respondents.

(2010) 13 HKCFAR 845 HKSAR v Chan Wai Yip Litton NPJ HKSAR v Chan Wai Yip Mr Gibson Shaw, instructed by Lo, Wong & Tsui for the twelfth respondent. The first, second and fourteenth respondents in person (present). Legislation mentioned in the judgment Auctions (Bidding Agreements) Act 1927 [England] s.1(1) Crimes Ordinance (Cap.200) s.159C(6) Hong Kong Court of Final Appeal Ordinance (Cap.484) s.32(2) Magistrates Ordinance (Cap.227) s.118(1)(d) Prevention of Bribery Ordinance (Cap.201) s.7 Cases cited in the judgment Carew’s Estate, Re [1858] 26 Beav 187, (1861) 54 ER 894 Cohen v Roche [1927] 1 KB 169 Galton v Emuss (1844) 1 Coll 243, 63 ER 402 Harrop v Thompson [1975] 1 WLR 545, [1975] 2 All ER 94 Heffer v Martyn [1867] 36 LJ Ch 373 Jones v North (1874–1875) LR 19 Eq 426 Mo Yuk Ping v HKSAR (2007) 10 HKCFAR 386, [2007] 3 HKLRD 750, [2007] 4 HKC 107 Mogul Steamship Co Ltd v McGregor, Gow & Co (1889) 23 QBD 598 Mogul Steamship Co Ltd v McGregor, Gow & Co [1892] AC 25 Norris v Government of the USA [2008] UKHL 16, [2008] 1 AC 920, [2008] 2 WLR 673, [2008] 2 All ER 1103 Pallant v Morgan [1953] Ch 43, [1952] 2 All ER 951 R v De Berenger (1814) 3 M & S 67, 105 ER 536, [1814–23] All ER Rep 513 R v Ghosh [1982] 1 QB 1053, [1982] 3 WLR 110, [1982] 2 All ER 689 R v Goldshield Group Plc [2008] UKHL 17, [2009] 1 WLR 458, [2009] 2 All ER 737 Rawlings v General Trading Co [1920] 3 KB 30 Rawlings v General Trading Co [1921] 1 KB 635 Scott v Brown, Doering, McNab & Co [1892] 2 QB 724 Scott v Metropolitan Police Commissioner [1975] AC 819, [1974] 3 WLR 741, [1974] 3 All ER 1032 Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381, [2002] 2 HKLRD 793, [2002] 3 HKC 117 Wai Yu Tsang v R [1992] 1 AC 269, [1991] 3 WLR 100, [1991] 4 All ER 664 Welham v Director of Public Prosecutions [1961] AC 103, [1960] 2 WLR 669, [1960] 1 All ER 805 Wickens v Evans (1829) 3 Y & J 318, 148 ER 1201 Cases in the List of Authorities not cited in the judgment A-G for Northern Ireland’s Reference (No 1 of 1975), Re [1977] AC 105, [1976] 3 WLR 235, [1976] 2 All ER 937

846 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR A-G of the Commonwealth of Australia v Adelaide Steamship Co Ltd [1913] AC 781, [1911–13] All ER Rep 1120 Attorney-General v Suen Chun Kwong [1980] HKLR 543 Chou Shih Bin v HKSAR (2005) 8 HKCFAR 70, [2005] 1 HKLRD 838 Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435, [1942] 1 All ER 142 Hamlyn & Co v Wood & Co [1891] 2 QB 488, [1891–94] All ER Rep 168 HKSAR v Chan Shu Hung [2001–2003] HKCLRT 325 HKSAR v Ho Yau Yin (2010) 13 HKCFAR 217, [2010] 4 HKC 160 HKSAR v Tse So So (2007) 10 HKCFAR 368, [2007] 3 HKLRD 932 HKSAR v Wong Shiu Fong (unrep., HCMA 1085/2003, [2004] 1 HKLRD A7) Johnson v Nobbs (unrep., Court of Appeal, 9 March 1983) Li Man Wai v Secretary for Justice (2003) 6 HKCFAR 466, [2003] 3 HKLRD 1037 Mogul Steamship Co Ltd v McGregor, Gow & Co (1888) 21 QBD 544 Moorcock, The (1889) 14 PD 64, [1886–90] All ER Rep 530 Norris v Government of the USA [2007] 1 WLR 1730, [2007] 2 All ER 29 North Western Salt Co Ltd v Electrolytic Alkali Co Ltd [1913] 3 KB 422 R v Arrowsmith [1975] QB 678, [1975] 2 WLR 484, [1975] 1 All ER 463 R v Chan Kang To [1997] HKLRD 412, [1997] 2 HKC 281 R v Gerald Cooper Chemicals Ltd [1978] Ch 262, [1978] 2 WLR 866, [1978] 2 All ER 49 R v Jones (Margaret) [2007] 1 AC 136, [2006] 2 WLR 772, [2006] 2 All ER 741 R v Lewis (1869) 11 Cox CC 404 R v Rimmington [2006] 1 AC 459, [2005] 3 WLR 982, [2006] 2 All ER 257 R v So Man King [1989] 1 HKLR 142 Shackleton, ex p Whittaker, Re (1874–1875) LR 10 Ch App 446 Smith v R [2000] 1 WLR 1644 So Wai Lun v HKSAR (2006) 9 HKCFAR 530, [2006] 3 HKLRD 394 So Yiu Fung v HKSAR (1999) 2 HKCFAR 539, [2000] 1 HKLRD 179, [2000] 1 HKC 348 Solicitor (24/07) v Law Society of Hong Kong (2008) 11 HKCFAR 117, [2008] 2 HKLRD 576, [2008] 2 HKC 1 Sorrell v Smith [1925] AC 700, [1925] All ER Rep 1 Union Bank of London v Munster (1888) 37 Ch D 51

(2010) 13 HKCFAR 847 HKSAR v Chan Wai Yip Bokhary PJ Other materials mentioned in the judgment Atiyah, Patrick, The Rise and Fall of Freedom of Contract (1979) pp.408– 413 Lever J and Pike J “Cartel Agreements, Criminal Conspiracy and the Statutory ‘Cartel Offence’: Part 1” (2005) 26(2) ECLR 90 Smith, ATH, “Auction Rings” [1981] Crim LR 86 Bokhary PJ 1.  I agree with the judgment of Sir Anthony Mason NPJ. Chan PJ 2.  I agree with the judgment of Sir Anthony Mason NPJ. Ribeiro PJ 3.  I agree with the judgment of Sir Anthony Mason NPJ. Litton NPJ Introduction 4.  This appeal raises important questions concerning the conduct of auctions. 5.  The essential facts fall within a narrow compass. They are as follows: (i) An auction of cooked food stalls at the new Tai Po Hui Market was held on 21 July 2004 by the Food and Environmental Hygiene Department (the Department) of the Hong Kong Government. (ii) This was a restricted auction. The only persons allowed to bid were the stall-holders at the old Tai Po Market: They were, in effect, being re-located to the new market. (iii) The Department had, some time before, notified the stall-holders of the reserve price for each stall, which the Department said had been fixed at 75% of the market price. (iv) Before the auction the Department sent to the stall-holders the Rules for the restricted auction. More will be said about these Rules later. (v) Prior to the auction, thirty six of the stall-holders had met together and had drawn lots with regard to the stall he or she would bid for at the auction. It was agreed that no-one else would bid for the same stall. The Department was unaware of such an agreement prior to the auction. (vi) The auction on 21 July 2004 was conducted by a Senior Health Inspector. Each stall was put up in turn. There was only one bid. The auctioneer announced the bid three times in the usual way. The stall was then knocked down to the bidder at the reserve price. This process was repeated a total

848 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR of 40 times. No bids were offered for 4 of the stalls. 36 of them were knocked down at the reserve price. Each time to a sole bidder. (vii) The bid price constituted the monthly rent for the stall, good for three years. (viii) Some time later, the 36 stall-holders were asked by the Department to sign the tenancy agreements for the stalls, which they did. They have been in possession to this day. 6.  Arising out of the facts as summarized above, nineteen of the stall-holders were charged with conspiracy to defraud, contrary to common law. 7.  The matter went before Deputy Magistrate Mr Eric Cheung Kwan-ming. The trial lasted over 50 days. They were all convicted and sentenced to terms of imprisonment ranging from 9 to 12 months. They all appealed (except for one who testified for the prosecution) and their appeals were referred by the High Court Judge to the Court of Appeal. By the time the Court of Appeal heard their appeal one of the appellants had died. The appeals were allowed. Hence it is the government which appears as the appellant in this Court, with seventeen respondents before us. The charge 8.  The particulars of the charge of conspiracy to defraud are as follows: … between a date unknown in June 2004 and the 21st day of July 2004, in Hong Kong, conspired together with AU Wing and other persons unknown, to defraud the Food and Environmental Hygiene Department (“the FEHD”), by dishonestly pre-allotting amongst themselves and their representatives the cooked food stalls at Tai Po Hui Market … prior to the auction held by the FEHD on the 21st day of July 2004 (“the Auction”) and agreeing amongst themselves and their representatives not to compete against one another in bidding the aforesaid cooked food stalls at the Auction, thereby deceiving the FEHD into believing that there was only one bid offered at the upset price for each of the aforesaid cooked food stalls and renting the aforesaid cooked food stalls at the upset prices to the aforesaid persons or their representatives. 9.  As can be seen the dishonesty as averred was this: The Department was (a) deceived into believing “that there was only one bid offered at the upset price for each of the aforesaid cooked food stalls” and (b) deceived into “renting the aforesaid cooked food stalls at the upset prices to the aforesaid persons or their representatives”.

(2010) 13 HKCFAR 849 HKSAR v Chan Wai Yip Litton NPJ 10.  As to the alleged deceit (a) above, that was, by the nature of the prosecution case, an impossibility: The very core of the Department’s complaint was that there was no competitive bidding. Each stall in turn was knocked down to the sole bidder at the reserve price. The Department could not have been deceived as alleged. 11.  As to the alleged deceit (b) above, the act of the Department in renting the stalls at the reserve price — that is to say, offering the tenancy agreements for signature to the respective bidders, with the rent set at the reserve price — simply flowed from the auction itself. Once the Department had accepted the bid, the “renting” was a simple administrative act. There could have been no intervening deceit which caused the Department to rent out the cooked food stall. 12.  If there was no deceit involved in the respondents’ “plot”, that is to say, the “pre-allotting” amongst the stall-holders as averred in the charge, and in the subsequent bids made at the auction, that was the end of the prosecution case. There was no dishonesty in the transaction which might have caused economic loss to the Department. The pre-auction agreement between the stall-holders could not be a criminal conspiracy. The Magistrate’s Approach 13.  Unfortunately, that was not the way the magistrate approached the case. Between §333 and §347 of his Statement of Findings he gave a long recital of his understanding of the law on conspiracy, without once adverting to the charge which he had to try. 14.  It is worth mentioning here this point: At the trial an Acting Chief Health Inspector was called as a prosecution witness (PW4). He produced a list of auctions of stalls by his Department at various locations which took place in the second half of 2004 (including the one held on 21 July, the subject of the charge). Over 320 stalls were involved: Virtually every one of them was knocked down at the reserve price. At the hearing before us Mr Zervos SC, counsel for the government, accepted that this must have been because, in each case, there was only one bidder. It is inconceivable that the Department was unaware of the fact that the bidders had agreed before hand that they would not bid against each other: And yet it went ahead and signed the tenancy agreements, giving possession of the stalls at the reserve price. The notion that the Department was deceived into renting the cooked food stalls to the various bidders at the reserve price is absurd. The First Question of Law 15.  The first point of law certified for our consideration is as follows:

850 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR Whether the formulation in Mo Yuk Ping v HKSAR (2007) 10 HKCFAR 386 is applicable to all forms of alleged conspiracy to defraud and ought also to be applied to a secret agreement not to compete at an auction as in any other cases or whether some aggravating feature as required in Norris v Government of the USA [2008] 1 AC 920 has to be present before such an agreement is indictable? 16.  I would simply answer it in this way: In Mo Yuk Ping v HKSAR (2007) 10 HKCFAR 386 a fraudulent scheme to manipulate the stock market was charged and proved: It was to artificially prop up the share price of a publicly-quoted company. In pursuance of the scheme, fictitious accounts were opened with many firms; the bank which had lent money on the security of those shares, and the investing public at large, were massively deceived, as the conspirators had intended. 17.  Where an agreement not to compete in an auction has no deceptive element in it, the fact that the agreement was made in secret does not by that fact alone render the agreement dishonest in the eyes of the law. Persons attending an auction owe no obligation to the vendor to compete with each other; nor are they required by law to so conduct themselves that the vendor achieves the highest possible price. As Atkin LJ said in Rawlings v General Trading Co [1921] 1 KB 635, 648: Why it should be illegal for two possible competitors to agree to a joint adventure in the purchase of an article offered for sale in any of the ways I have mentioned I cannot discern. One of the ways mentioned by him, earlier in the same passage of that judgment, was for one of the parties to absent himself from the auction or, being there, to refrain from bidding, thereby leaving the other party as the sole bidder. Atkin LJ went on to say that if there was any combination to make misrepresentations with intent to deceive the seller, the agreement would be illegal. Rawlings v General Trading Co was a civil case where the defendant had reneged on a prior agreement not to compete at an auction of surplus stores held by the government. The question was whether it was against public policy that parties should combine in this way prior to a public auction. The majority in the Court of Appeal (Bankes and Atkin LJJ) held that it was not. A later attempt to challenge this proposition in Harrop v Thompson [1975] 1 WLR 545 failed. At p.549B Templeman J said: If two potential bidders have entered into some form of agreement which results in one of them keeping his mouth shut at the auction, there is no method open to me in the light of the authorities to distinguish a good agreement from a bad agreement.

(2010) 13 HKCFAR 851 HKSAR v Chan Wai Yip Litton NPJ 18.  Misrepresentation and fraudulent conduct calculated to deceive would, of course, be an “aggravating feature”, thus rendering an otherwise innocent agreement illegal. 19.  In this regard, Mr Zervos SC counsel, for the appellant, relies on Rule 20 of the Rules of the auction which says: Any person who defrauds the Department by dishonest means (such as conspiring to refrain from competitive bidding causing everyone to win the bid for their stalls at the upset price) in the auction shall be prosecuted. This appears under the heading “Prevention of Bribery”, in the context of s.7 of the Prevention of Bribery Ordinance (Cap.201), which has no relevance to this case. But even assuming that this statement in Rule 20 was made in the context of the common law offence of conspiracy to defraud, it begs the very question: Is an agreement between the stall-holders “to refrain from competitive bidding causing everyone to win the bid for their stalls at the upset price”, without more, a crime? The answer must be No. 20.  Dishonesty is an essential element in the common law offence: see Mo Yuk Ping v HKSAR, 408F. None was present in this case. The Second Question of Law 21.  The second question certified for consideration by this Court is this: Whether the holding of an auction in a commercial context would by its nature necessarily imply that only competitive and genuine bids are acceptable, such as to prohibit any price fixing conduct in respect of it, and to render such conduct dishonest and prima facie indictable? 22.  The magistrate convicted the respondents on the basis of their statements to the police. In essence each of them said words to this effect: (i) They participated in the drawing of lots for the stalls. (ii) The purpose was to avoid competing with each other to drive up the price. (iii) The agreement would cause the Department to receive less rent for the stalls. (iv) The Department might have suffered a loss as a result. 23.  In some cases they agreed with the interviewer that the meaning of an auction was to have the item under the hammer to go to the

852 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR highest bidder. This lies, in effect, at the heart of the case as presented to this Court by the appellant. Mr Zervos SC argues thus: The deception on the Department was that this restrictive auction which the respondents attended was a genuine competitive auction without the bidders colluding among themselves. (Emphasis added.) Apart from the fact that the Department could not, by any stretch of the imagination, have been deceived (as to which see §§10 and 11 above), it begs the question: How was the expectation that this would be a “competitive auction” aroused? What made the Department believe that the stall-holders would compete with each other, so that the Department would get a higher price? By the sole fact that this was an “auction”? Or a “restrictive auction”? Or that the respondents had attended the auction? 24.  As Atkin LJ said in Rawlings v General Trading Co, 648: I see no principle upon which sales by auction differ from an offer of sale by tender or indeed by private treaty, except that at an auction without reserve the goods are offered to the purchaser who there and then offers the highest price. An auction, just as a sale by private treaty, involves mutual dealings. The purchaser’s interest is to obtain the goods at the lowest price: Does the vendor owe a duty to the purchaser that he gets the goods at the lowest price? If not, why should the purchaser owe a duty to the vendor that he sells at the highest price? Plainly, no such duty exists. 25.  A combination, as such, is not illegal. It is only where persons agree to do an unlawful act, or to do a lawful act by unlawful means, that it becomes a criminal conspiracy. As mentioned earlier, for potential purchasers to agree together, before an auction, that they would not compete with each other, is not per se unlawful. If the agreement involves no deception of any kind then they have not set out to do something lawful by unlawful means. This analysis of the law is, of course, made in the context of the charge in this case: The common law offence of conspiracy to defraud. It pays no regard to s.7 of the Prevention of Bribery Ordinance (Cap.201)1. It does not address the question whether X has offered an “advantage” (as 1 Section 7 (1) Any person who, without lawful authority or reasonable excuse, offers any advantage to any other person as an inducement to or reward for or otherwise an account of that other person’s refraining or having refrained from bidding at any auction conducted by or on behalf of any public body, shall be guilty of an offence. (2) Any person who, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for or otherwise on account of his refraining or having refrained from bidding at any auction conducted by or on behalf of any public body, shall be guilty of an offence.

(2010) 13 HKCFAR 853 HKSAR v Chan Wai Yip Litton NPJ defined in that Ordinance) to Y when he undertakes to Y not to bid against him when the item “pre-allotted” to Y comes under the hammer. Of course, the “advantage” is mutual, since Y has made an identical undertaking to X. The “advantages”, in a sense, cancel out each other. 26.  Note also this: In a case like the present, where Rule 8 of the auction rules allows the auctioneer to refuse to accept any bid without explanation, the stall-holders could do no more than to hope that, by their arrangement, each would get the allotted stall at the reserve price. Their agreement went no further than to mutually agree not to bid against each other. Full stop. There was no way they could have been sure that the pre-allotted stalls would be knocked down to them at the reserve price. The surprising thing in this case is that the auctioneer continued the auction when it became blindingly obvious very early on in the proceedings that the stall-holders had agreed not to bid against each other, as each stall was knocked down to a sole bidder. And if, as the Department now alleges, the auction was vitiated by fraud, it could have avoided the contract and refused to sign the tenancy agreement. 27.  Mr Zervos SC’s proposition (at §23 above) therefore boils down to this: By their bare conduct, that is to say, by attending the auction, nothing else, the respondents impliedly represented that they would make it “competitive”; that they would bid against each other; that they had formed no prior agreement to refrain from bidding against each other. 28.  Note this: There is no suggestion in Mr Zervos SC’s proposition that the pre-allotment arrangement was aimed at harming the economic interests of the Department. The stall-holders were looking to their own economic interests: If each stall was knocked down to them at the reserve price, so much the better for them (and, it might be added, for the consumers who frequented their stalls). 29.  Plainly, no such implication as proposed by the appellant can arise: neither by law, nor from the facts of the case. Serious criminal offences like conspiracy to defraud cannot crystallize from such shadowy propositions. The answer to the second question must necessarily be No. The Third Question of Law 30.  The third question is this: Whether the incorporation of an express condition in the auction rules to the effect that only competitive and genuine bids are acceptable would prohibit any price fixing conduct in respect of it, and render such conduct dishonest and prima facie indictable? 31.  For the appellant, this question fails in limine upon the facts of this case. Clause 20 of the Rules (referred to in §19 above) in no way

854 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR amounted to a representation by the stall-holders of any kind. It was simply a warning by the Department. As Tang V-P said (§78 of his judgment) the Department could have required a written warranty from each potential bidder. The warranty could have been to this effect: that, in making a bid, the bidder warranted that he/she had not entered into any prior arrangement to refrain from competitive bidding; each bid would then be accepted on that basis. In no way can Rule 20 be construed to operate in this way. Conclusion 32.  These are my reasons for agreeing that this appeal should be dismissed. Sir Anthony Mason NPJ Introduction 33.  19 defendants were charged with a single count of common law conspiracy to defraud, punishable under s.159C(6) of the Crimes Ordinance (Cap.200). The particulars of the offence charged were as follows: … between a date unknown in June 2004 and the 21st day of July 2004, in Hong Kong, conspired together with AU Wing and other persons unknown, to defraud the Food and Environmental Hygiene Department (the FEHD), by dishonestly pre-allotting amongst themselves and their representatives the cooked food stalls at Tai Po Hui Market at No 8 Heung Sze Wui Street, Tai Po prior to the auction held by the FEHD on the 21st day of July 2004 (the Auction) and agreeing amongst themselves and their representatives not to compete against one another in bidding the aforesaid cooked food stalls at the Auction, thereby deceiving the FEHD into believing that there was only one bid offered at the upset price for each of the aforesaid cooked food stalls and renting the aforesaid cooked food stalls at the upset prices to the aforesaid persons or their representatives. As will appear, the way in which the conspiracy is formulated is of critical importance in this appeal. 34.  The defendants other than the 1st defendant, who pleaded guilty, pleaded not guilty but were convicted by the Deputy Magistrate (as he then was) and sentenced to imprisonment ranging from 9  to 12 months. Their appeals against conviction and sentence were transferred to the Court of Appeal pursuant to s.118(1)(d) of the Magistrates Ordinance (Cap.227). The appeal by the 19th defendant, who died in the meantime, was abated on 2 March 2010. 35.  On 15 March 2010 the Court of Appeal allowed the appeal by the other defendants who pleaded not guilty (the respondents

(2010) 13 HKCFAR 855 HKSAR v Chan Wai Yip Sir Anthony Mason NPJ in this Court) and quashed the convictions. On 1 April 2010 the Court published its reasons for allowing the appeal. The principal judgment was delivered by Tang V-P, with Yeung JA and D Pang J agreeing. On 9 July 2010, the Appeal Committee extended the time for applying for leave to appeal and granted the prosecution leave to appeal out of time under s.32(2) of the Hong Kong Court of Final Appeal Ordinance (Cap.484), on the ground that points of law of great and general importance were involved. The prosecutor’s appeal to this Court is brought pursuant to that grant of leave. 36.  The three points of law on which the Appeal Committee granted leave to appeal are: (a) Whether the formulation in Mo Yuk Ping v HKSAR is applicable to all forms of alleged conspiracy to defraud and ought also to be applied to a secret agreement not to compete at an auction as in any other cases or whether some aggravating feature as required in Norris v Government of the USA [2008] 1 AC 920 has to be present before such an agreement is indictable. (b) Whether the holding of an auction in a commercial context would by its nature necessarily imply that only competitive and genuine bids are acceptable, such as to prohibit any price fixing conduct in respect of it, and to render such conduct dishonest and prima facie indictable. (c) Whether the incorporation of an express condition in the auction rules to the effect that only competitive and genuine bids are acceptable would prohibit any price fixing conduct in respect of it, and render such conduct dishonest and prima facie indictable. The facts 37.  The facts of the case are uncontested. I take them from the judgment of Tang V-P where they are summarised succinctly. The respondents were the tenants or assistants to the tenants of cooked food stalls at the former Tai Po Temporary Market (the Old Market). In 2004, the respondents and other tenants were required by the Food and Environmental Hygiene Department (FEHD) to move from the Old Market to the newly built Tai Po Hui Market (the New Market). They were given priority to bid for stalls at the New Market in a restricted auction (圍內競投) which was held exclusively for them. The bid price would become the rent to be paid. The upset prices for these stalls were fixed at 75% of the market rent as assessed by the Rating and Valuation Department. These upset reserved prices were made known by letters sent by FEHD to the potential bidders including the respondents in early June 2004. 38.  The prosecution’s case is that before attending the restricted auction, the respondents had attended a pre-allotment exercise held

856 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR among themselves and other tenants of the Old Market. The exercise was conducted by way of the drawing of lots. The numbers drawn in the first round would determine the sequence of the draw in the second round. A number drawn in the second round would be the number of the stall in the New Market allotted to the drawer of that number. The participants also agreed amongst themselves that each would only bid for the stall which had been allotted to him/her in this manner. 39.  The restricted auction was held on 21 July 2004 and was attended by 36 eligible bidders, including the respondents. 40 cooked food stalls were put up for auction. There was no competitive bidding during the auction and the stalls were knocked down to all the 36 bidders at the upset prices. Lack of competitive bidding was by no means confined to the auctions in question. From materials in evidence it seems to have been a fairly common feature of auctions conducted by the FEHD at this time, involving a single bid with lots sold at the upset price. 40.  Included in the documents sent to each of the stallholders who were potential bidders were the rules of the auction. Rule 4 provided that the basic principle of an auction was that the stalls would be knocked down to the highest bidder. Rule 8 provided that the participants of the auction “shall not in any way influence another person in bidding for a stall …”. Rule 20, which appears under the heading “Prevention of Bribery”, stated the effect of s.7 of the Prevention of Bribery Ordinance (Cap.201) (the PBO), without identifying the section or the Ordinance. The Rule then provided: Any person who defrauds the Department by dishonest means (such as conspiring to refrain from competitive bidding causing everyone to win the bid for their stalls at the upset prices) in the auction shall be prosecuted. This warning was directed to conspiracy to defraud rather than a breach of s.7. 41.  The Senior Health Inspector, Kwan Chi Hung (PW4), who conducted the auction, agreed in cross-examination, however, that he had not mentioned the auction rules before conducting the restricted auction. Nonetheless the stallholders who were potential bidders were notified of the rules and they formed part of the terms and conditions of the auction. I shall refer to r.20 later in these reasons. It is nevertheless clear that, at no stage of the proceedings, did the prosecutor rely on s.7 of the PBO. The Court of Appeal 42.  In the Court of Appeal, the prosecution (the appellant in this Court) relied on the pre-allotment and the agreement not to compete

(2010) 13 HKCFAR 857 HKSAR v Chan Wai Yip Sir Anthony Mason NPJ as the constituent elements of the common law offence of conspiracy to defraud. The prosecution, as at trial, did not rely on any additional element such as fraud, misrepresentation, violence, intimidation or inducement of breach of contract. Instead, the foundation of the prosecution case was Viscount Dilhorne’s statement in Scott v Metropolitan Police Commissioner [1975] AC 819, 840 that the law is: that an agreement by two or more by dishonesty to deprive a person of something which is his or to which he is or would be or might be entitled and an agreement by two or more by dishonesty to injure some proprietary right of his, suffices to constitute the offence of conspiracy to defraud. In addition to this proposition, Mr Terence Wai, who appeared for the prosecution in the courts below, submitted that FEHD suffered economic loss as a result of the respondents’ conduct. 43.  The respondents submitted that an agreement by which the parties agreed not to bid against each other at an auction has always been held to be valid and enforceable under English law and has never been held to be criminal. The Court of Appeal upheld this submission and rejected the argument of the prosecution. In doing so, the Court of Appeal relied on a long and consistent line of English authority, beginning with the judgment of Knight Bruce V-C in Galton v Emuss [1844] 1 Coll 243, 246 and culminating in the decisions of the House of Lords in Norris v Government of the United States of America [2008] 1 AC 920, 936B–E and R v Goldshield Group Plc [2009] 1 WLR 458. The Court of Appeal saw no inconsistency between Norris and the decision of this Court in Mo Yuk Ping v HKSAR. The arguments in this Court 44.  The appellant submits that Mo Yuk Ping v HKSAR authoritatively states the constituent elements of the offence of conspiracy to defraud in Hong Kong and that the offence is not limited to cases involving “the aggravating features” identified in Norris v Government of the United States of America. The appellant then submits that the essence of the restrictive auction was that it was a genuine competitive auction which would not involve any collusion by the bidders themselves. Yet there was collusion which resulted in deception and therefore dishonesty, falling within the Mo Yuk Ping formulation, so that it was not a case of mere price fixing, as the Court of Appeal found. 45.  The case for the respondents as argued in the Court of Appeal is that an agreement not to bid at an auction, without any of “the aggravating features” identified in Norris v Government of the United States of America, is neither criminal nor dishonest and therefore falls outside the scope of the offence of conspiracy as formulated in Mo

858 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR Yuk Ping v HKSAR. In any event, the respondents submit that an agreement not to bid at an auction is not, and never has been held to be dishonest or criminal at common law. The charge 46.  Before considering the arguments presented in this appeal, it is necessary to turn to the way in which the charge of conspiracy against the respondents was formulated and the consequences this may have for the disposition of the appeal. In the courts below no attention was given to the terms of the charge. In this Court, however, when Mr Kevin Zervos SC for the appellant was asked in argument how he formulated the elements of the alleged conspiracy, attention was directed to the terms of the charge. It alleged that the defendants conspired to defraud the FEHD by dishonestly pre-allotting among themselves the relevant food stalls so as not to bid against each other, thus (as it is particularised in the charge) deceiving the FEHD into believing that there was only one bid offered at the upset price for each of the aforesaid cooked food stalls and renting the aforesaid cooked food stalls at the upset prices to the aforesaid persons or their representatives. 47.  The case averred by the prosecution was therefore one of deception, namely that the pre-allotment and the agreement not to compete deceived the FEHD into believing that there was only one bid for each stall at the auction. There are three problems with the case as so pleaded. First, the FEHD was not aware of the pre-allotment and the agreement not to compete until some time after the auction. Secondly, there is no evidence that the pre-allotment on the agreement not to compete induced or deceived the FEHD into believing anything. Thirdly, no doubt the FEHD did believe that only one bid was offered at the upset price for each stall but that belief was founded on the FEHD’s knowledge of what in fact happened at the auction. The deception alleged simply cannot be substantiated. 48.  Mr Zervos SC frankly admitted that the charge was defective and put his case on two different bases. The first was that the pre-allotment and, in particular, the agreement not to compete amounted to a collusive arrangement intended to deprive the FEHD by dishonest means of a higher price, thereby causing economic loss. The second was that, by participating in the auction on the basis on which they did, the defendants made a false representation to the FEHD causing it loss. 49.  The problem with proceeding with the appeal is that we could not allow an appeal and convict the respondents on a charge of conspiracy which cannot be made out. Nor can we convict them of

(2010) 13 HKCFAR 859 HKSAR v Chan Wai Yip Sir Anthony Mason NPJ an offence of conspiracy to defraud which has never been charged. It follows that the appeal could not succeed. The Court made an order dismissing the appeal with costs at the end of the oral argument, stating that reasons would be handed down later. This judgment sets out my reasons for dismissing the appeal. 50.  As the principal issue argued in the appeal is of some importance, I shall deal with it on the two bases argued by the appellant. The common law offence of conspiracy to defraud 51.  In Mo Yuk Ping v HKSAR, this Court held that the essence of the offence of conspiracy to defraud was becoming a party to an agreement with another or others to use dishonest means (i) with the purpose of causing economic loss to, or putting at risk the economic interests of another; or (ii) with the realisation that the use of those means might cause such loss or put such interests at risk. In stating the elements of conspiracy to defraud in this way, this Court adopted earlier formulations of the offence in both the House of Lords (Welham v DPP [1961] AC 103; R v Scott [1975] AC 819) and the Privy Council on appeal from Hong Kong (Wai Yu Tsang v R [1992] 1 AC 269). The Court pointed out (at p.405D–E) that most cases of agreement to use dishonest means were cases of deceit. The Court rejected the argument that the offence, as formulated in Mo Yuk Ping v HKSAR, offended the principle of legal certainty. 52.  In Norris v Government of the United States of America, as well as R v Goldshield Group Plc, the House of Lords did not refer at all to the formulations in its two earlier decisions, though in R v Goldshield Group Plc there was a reference to Wai Yu Tsang v R. No doubt this was because their Lordships were directing their attention to the precise issue which arose for decision in the proceedings before them. In Norris v Government of the United States of America, that issue was whether the defendant’s alleged conduct in conspiring with producers of carbon products to operate a price fixing agreement or cartel in several countries, which was the subject of the conspiracy offence with which the defendant was charged in the United States, constituted common law conspiracy to defraud. In R v Goldshield Group Plc, the issue was whether arrangements to fix and maintain prices for drugs supplied and for manipulating the supply of drugs constituted such a conspiracy. 53.  It was in this context that the House of Lords held, after reviewing the relevant authorities, that: [t]he common law recognised that an agreement in restraint of trade might be unreasonable in the public interest, and in such cases the agreement would be held to be void and unenforceable. But unless there were aggravating features such as fraud, misrepresentation,

860 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR violence, intimidation or inducement of a breach of contract, such agreements were not actionable or indictable (Norris at 933F–G). 54.  Neither the appellant nor the respondents contend that Norris v Government of the United States of America is inconsistent with Mo Yuk Ping v HKSAR. Be this as it may, neither what was decided nor what was said in Norris v Government of the United States of America or R v Goldshield Group Plc constitutes any reason for this Court to depart from the general formulation of the offence of conspiracy to defraud as expressed in Mo Yuk Ping v HKSAR. On the issue of legal certainty, the Court’s approach in Mo Yuk Ping v HKSAR was consistent with the approach which it had adopted earlier in Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381. On the other hand, the discussion in Norris about the common law treatment of price fixing agreements, in particular the conclusion that, absent the so-called “aggravating features”, they did not involve dishonesty (see p.936C–E), is a matter that calls for close attention. The issue for decision in this appeal 55.  The issue argued in this Court therefore is whether a secret agreement between potential bidders not to compete at an auction, or such an agreement followed by participation by such bidders at the auction, falls within the formulation of the common law offence of conspiracy to defraud as formulated in Mo Yuk Ping v HKSAR. The focus of attention in that formulation was on the expression “by dishonest means”, where the word “dishonest” is to be understood in its ordinary sense (see R v Ghosh [1982] 1 QB 1053). The English authorities on agreements restricting bidding at auctions 56.  There is no doubt, as the Court of Appeal held, that there is strong English authority to support the proposition that an agreement by potential buyers not to bid at an auction, what is called in England a “knock out” agreement, in order to keep the price down, is neither unenforceable as being contrary to public policy nor criminal. Whether they go so far as to hold that such an agreement, if secret, is dishonest for the purposes of the law of conspiracy, is a question I leave for later consideration. 57.  Galton v Emuss [1844] 1 Coll 243, Re Carew’s Estate [1858] 26 Beav 187 and Heffer v Martyn [1867] 36 LJ Ch 373 were cases in which two potential buyers agreed that one would not bid against the other at an auction for valuable consideration. The agreement in each case was held to be valid and enforceable, resulting in Galton v Emuss and Heffer v Martyn in an order for specific performance. In Re Carew’s Estate the agreement was that the parties would divide

(2010) 13 HKCFAR 861 HKSAR v Chan Wai Yip Sir Anthony Mason NPJ the property between them if it was bought by the bidding party under the sale pursuant to a court order. On a summons to set aside the sale on the ground that the agreement was unlawful, Sir John Romilly MR said (at p.190) that “a mere agreement” between two persons not to bid against each other was not “sufficient to invalidate a sale to one of them”. 58.  In Jones v North (1875) 19 Eq 426, after a corporation had invited tenders for the supply of stone, A, B, C and D who were quarry owners agreed that A should buy stone at a fixed price from the other three and submit the lowest tender. B should not tender, that C and D should tender above A’s price and that B, C and D should not supply stone to the corporation during 1875. A purchased the stone as agreed but B sent in a tender, in breach of the agreement, and it was accepted. Bacon V-C held that the agreement was legal and valid. He also said (at p.429) that the case was “on one side at least, a very honest one”, a statement which has been doubted (Norris v Government of the United States of America [2007] 1 WLR 1730, para.50, (Auld LJ)), indeed criticized (Lever and Pike, “Cartel Agreements, Criminal Conspiracy and the Statutory ‘Cartel Offence’: Part 1” (2005) ECLR, 90–97). Bacon V-C rejected a submission that the plaintiff could not obtain equitable relief because the arrangement was a device to compel the authority, under the fiction of public competition, to accept tenders not representing the market price of the stone. He held (at p.430) that the agreement was “perfectly lawful”. 59.  In Norris v Government of the United States of America, their Lordships stated that Jones v North has never been overruled and treated it as representing the law to-day (see p.936C–E). 60.  In Rawlings v General Trading Co [1920] 3 KB 30, the question was whether on the sale of Government stores by public auction, where no reserve was fixed, two or more buyers could agree that one of them only would bid in order to keep down the price, and that they would then share the profits between them. At first instance Shearman J concluded (at p.34) that the agreement was one “which it is contrary to public policy to enforce”. 61.  On appeal (1921) 1 KB 635, the Court of Appeal by majority (Bankes and Atkin LJJ with Scrutton LJ dissenting) allowed the appeal. Scrutton LJ considered (at p.647) that “the agreement was contrary to public policy, as a restraint of trade contrary to the interests of the public”, though it was neither criminal nor actionable. On the other hand, Bankes and Atkin LJJ, on the basis of the long line of existing authorities, concluded (at pp.641 and 652 respectively) that the agreement was legal and enforceable. Atkin LJ said (at p.652): I can see no reason for saying that this contract is ex facie illegal. It would probably be sufficient to say that for nearly a century Courts

862 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR of equity have held similar agreements legal and enforceable by suit for specific performance. But apart from decided cases, as between the parties it appears to be plainly reasonable, and if the defendant wished to establish that the public interests suffered he should have so pleaded so as to give the plaintiff notice. 62.  Rawlings v General Trading Co was subsequently followed by McCardie J in Cohen v Roche [1927] 1 KB 169, 173. And the legality of a “knock out” agreement was assumed in Pallant v Morgan [1953] Ch 43 where a party to such an agreement who became the successful bidder refused to divide the property sold with the other party to the agreement as it provided. The Court declared that the successful party held the property sold for the other party to the agreement. 63.  Rawlings v General Trading Co was again followed by Templeman J (as he then was) in Harrop v Thompson [1975] 1 WLR

1. There specific performance was ordered of an agreement for the

sale of two farms purchased at a public auction, despite the existence of an antecedent agreement between the purchaser and another potential bidder that the latter would not bid with the result that the purchaser obtained the property more cheaply. 64.  In that case, counsel for the first defendant invited the court to follow the path favoured by Shearman J and Scrutton LJ in Rawlings v General Trading Co and to conclude that an agreement not to bid, if not proved to be reasonable, is unenforceable and relieves the vendor from his contract. A “knock out” agreement, he submitted, is an interference with the liberty of the potential bidder to bid at the auction and ought not to be enforceable if the sole or primary object of the knock out agreement is to buy the property cheaply. Templeman J responded to this argument by saying (at pp.548H–549A): This submission tends to bring most contracts within the grasp of restraint of trade and therefore unenforceable unless proved to be reasonable, because most contracts interfere with liberty of action one way or another. I am not convinced that the agreement alleged in the present case was in restraint of trade. If it was in restraint of trade, I am not convinced that it therefore invalidated or affected the contract between the vendors and the purchaser. 65.  Templeman J went on to say (at p.549D): A vendor can protect himself by conditions under which he imposes a reserve and keeps the right to bid and to withdraw. A timid vendor need not sell by auction. The significance of this observation is a matter to which I shall return.

(2010) 13 HKCFAR 863 HKSAR v Chan Wai Yip Sir Anthony Mason NPJ 66.  In Norris v Government of the United States of America, Rawlings v General Trading Co, as well as Jones v North, was accepted as correctly stating the law. The other authorities which I have discussed were not referred to in Norris v Government of the United States of America, but if Rawlings v General Trading Co and Jones v North correctly state the law in England so do they. 67.  On the other hand, the common law has taken a different approach to agreements the purpose of which is to raise the market value of public funds and shares. In R v De Berenger (1814) 3 M & S 67 the defendants were charged with conspiring by false rumours to raise the price of public Government funds and were convicted. On a motion to arrest judgment, which was dismissed, Lord Ellenborough CJ said (at pp.72–73) that the purpose itself is mischievous, it strikes at the price of a vendible commodity in the market, and if it gives it a fictitious price, by means of false rumours, it is a fraud levelled against all the public … Bayley J and Dampier J were of a similar opinion, as was Le Blanc J who said (at p.74): the raising or lowering the price of public funds is not per se a crime … But if a number of persons conspire by false rumours to raise the funds on a particular day, that is an offence … 68.  In Scott v Brown, Doering, McNab & Co [1892] 2 QB 724 the Court of Appeal held that an agreement between two or more persons to purchase shares in a company in order to induce persons who might thereafter purchase shares in that company to believe, contrary to the fact, that there was a bona fide market for the shares, and that the shares were at a real premium, is an illegal transaction which may be made the subject of an indictment for conspiracy and no action can be maintained on the agreement or the purchase of the shares. The Court of Appeal followed R v De Berenger and held that the acts of the plaintiff in ordering shares to be bought for him at a premium was to deceive the public by leading the public to suppose that there were buyers of the shares at a premium on the Stock Exchange. The purchase of the shares was to be equated to a false representation. Assessment of the English authorities on agreements restricting bidding 69.  For present purposes, the English authorities establish that these agreements were lawful at common law. Although Jones v North is the only case which expressly holds that such agreements are “honest”.

864 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR The other cases by holding that they are lawful necessarily negate the possibility that they could be “dishonest” in the sense that they could be the subject of a conviction for conspiracy to defraud. A contract which is valid and enforceable cannot itself be “dishonest” for the purposes of criminal conspiracy to defraud. 70.  To an observer familiar with the modern law relating to restrictive trade practices and uninstructed in the way in which the law on this point developed, the proposition that “knock out” agreements are “honest” might seem somewhat surprising. The explanation lies no doubt in the nature of the capitalist economic philosophy which prevailed in England in the period 1800–1870, which strongly favoured freedom of trade and freedom of contract (see Atiyah, The Rise and Fall of Freedom of Contract (1979) pp.408– 412). One consequence of this approach was that the courts were not concerned with the effect of a contract on third parties but with the legal effect and enforcement of the contract as between the parties to it (see Atiyah, pp.412–413). This serves to explain why the impact of a “knock-out” agreement on the vendor at an auction was not considered in the cases which have been discussed. They were, of course, with the exception of Cohen v Roche, cases in which the vendor at an auction was not a party. 71.  The different treatment of an agreement to raise prices at an auction may be explained at two levels. First, they were cases which involved a misrepresentation by words or conduct, whereas a “knock out” agreement of itself did not, though it might lead to the making of such a misrepresentation. Secondly, there was a recognition that a false increase in market prices has an adverse impact on the public; such an impact may or may not occur in the case of a false lowering of auction prices. Although a “knock out” agreement may be in restraint of trade because it is restrictive of freedom of competition, it may not necessarily be contrary to the public interest, a matter that was acknowledged in Rawlings v General Trading Co (see para.61 above). 72.  Until Rawlings v General Trading Co, there was no suggestion that a “knock out” agreement might be in restraint of trade. In the period which the cases before Rawlings v General Trading Co were decided, the courts were not disposed to invalidate or treat as unenforceable agreements which were restrictive of competition on the ground that they were in restraint of trade. It seems to have been thought that restrictive agreements would not survive the pressure of freedom of competition (see, for example, Wickens v Evans (1829) 3 Y & J 318, 330; 148 ER 1201, 1206 which was cited with approval by Fry LJ in Mogul Steamship Co Ltd v McGregor, Gow & Co (1889) 23 QBD 598, 628, in a judgment upheld in the House of Lords [1892] AC 25). Jones v North itself was a striking illustration of how far the courts were prepared to go in enforcing contracts which, to modern eyes, might seem to be in restraint of trade. There, the court

(2010) 13 HKCFAR 865 HKSAR v Chan Wai Yip Sir Anthony Mason NPJ having rejected the argument that the agreement was in restraint of trade and an unlawful conspiracy, granted an injunction which prevented the defendant from carrying out his contract to supply the Birmingham Corporation to the detriment of its interests, though it was not a party to the proceedings. 73.  And even when, at the end of the 19th century, restraint of trade issues were litigated before the courts, arising out of combination, cartel and restrictive trade agreements, the courts were unwilling to hold that they were illegal. They might be void and unenforceable as between the parties but they were not illegal. That was the real point of the decision of both the Court of Appeal and the House of Lords in Mogul Steamship Co Ltd v McGregor, Gow & Co. Indeed, the underlying thrust of the reasoning both in the Court of Appeal and the House of Lords in that case was that, so long as traders individually or collectively were pursuing their own business interests without infringing the rights of others or intending to do them harm, that pursuit was legitimate, even if, by deliberately lowering prices, it drove others out of business. In this respect, Mogul Steamship Co Ltd v McGregor, Gow & Co is generally consistent with, and supports, the long line of decisions in the “knock out” cases and Jones v North. Should this Court follow the English authorities? 74.  The question which arises therefore is whether the Court should, in stating the law of conspiracy to defraud for Hong Kong, declare that the long line of decisions on “knock out” agreements, including Jones v North, no longer represents the law of Hong Kong. The argument for taking this course is that such agreements are dishonest and anti-competitive and strike at the very essence of a competitive auction. Even assuming that there is strong reason to take this course in an appropriate case, this is not such a case because the appeal must be dismissed for the reasons already given. 75.  And, in any event, to discard the long line of English authority to bring “knock out” agreements within the reach of the law of criminal conspiracy would be a step too far. Not only have the relevant decisions stood for a very long time — they go back more than 160 years — they almost certainly have been taken to represent the law of conspiracy in Hong Kong. For all we know, people in Hong Kong have relied on them. If there is to be a change, then in my view it is a matter entirely for the legislature. Other matters 76.  It is, of course, true that the FEHD can protect itself from “knock out” agreements by fixing a reserve (and not disclosing it) and reserving the right to bid and withdraw, as Templeman J pointed

866 HONG KONG COURT OF FINAL APPEAL REPORTS (2010) 13 HKCFAR in Harrop v Thompson, p.549D but this expedient leaves unresolved the question whether there should be a criminal sanction against the making of collusive “knock out” agreements. 77.  Finally a word about s.7 of the PBO. It seems that it has not been enforced in Hong Kong due to doubts about its efficacy. The section, though expressed in different terms, is broadly similar to s.1(1) of the Auctions (Bidding Agreements) Act 1927 (UK). Professor ATH Smith discusses the section in “Auction Rings” [1981] Crim LR 86 and identifies the problems associated with it. Conclusion 78.  These are my reasons for dismissing the appeal. Bokhary PJ 79.  At the conclusion of the hearing, the Court announced that the appeal was dismissed for reasons to be handed down in due course. The reasons given by Sir Anthony Mason NPJ constitute the reasons of the Court. Costs will be dealt with on written submissions as to which the parties should seek procedural directions from the Registrar.

Chapter 200 Crimes Ordinance 16/11/2017 36. [cf. 1911 c. 6 s. 5 U.K.] False statutory declarations and other false statements without oath Any person who knowingly and wilfully makes (otherwise than on oath) a statement false in a material particular, such statement being made— (a) in a statutory declaration; or (b) in an abstract, account, balance sheet, book, certificate, declaration, entry, estimate, inventory, notice, report, return or other document which he is authorized or required to make, attest or verify, by any enactment for the time being in force; or (c) in any oral declaration or oral answer which he is required to make by, under or in pursuance of any enactment for the time being in force, shall be guilty of an offence and shall be liable on conviction upon indictment to imprisonment for 2 years and to a fine. (21 of 1922 s. 7 incorporated. Amended 5 of 1924 Schedule) 1/8/26, 10:02 AM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 1/1

FD06230 ｜ 2025_港澳台_香港大埔宏福苑-特别重大火灾事故调查报告(竞争事务委员会改进措施建议).pdf

分类：06_境外及港澳台调查报告 ｜ 年份：2025 ｜ 地域：香港 ｜ 严重程度：特别重大 ｜ 场所： ｜ 起火原因： ｜ 来源格式：pdf

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Re. Independent Committee in relation to the fire at Wang Fuk Court in Tai Po (“IC”)

Recommendations of the Competition Commission (“CC”) in relation to Terms of Reference (2) (“ToR (2)”)

Introduction

These are the submissions of the CC to the IC pursuant to: (1) the IC’s directions at the evidential hearing on 30 April 2026 concerning the legality and practicality of fee-scales for the consideration of residents;1 and

(2) its directions made on 8 May 2026 concerning any recommendations on improvement measures to ToR (1) and ToR (2).

These submissions are broken down into the following sections: (1) Part 1 will address the issue of fee-scales and its relevant legality and practicality;

(2) Part 2 will address any additional developments in terms of the CC’s overall recommendations to ToR(2); and

(3) Part 3 will set out the CC’s concluding observations.

In summary, the CC’s position is as follows: Fee-scales

(1) It is not unlawful for a statutory body such as the Urban Renewal Authority (“URA”) to compile a set of fee-scales whether generally or in order to provide some form of reference for residents in their determination of which consultant / contractor to select in carrying out large-scale building maintenance works.

(2) Save in exceptional circumstances, it is unlawful for members of an association of undertakings (like the Hong Kong Institute of Surveyors (“HKIS”)) to discuss and agree on a set of fee-scales. Such an arrangement (i.e. where competing undertakings discuss

1 [Day 21, 101:14-23]

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and agree on a set of prices they would likely charge for future works) is expressly prohibited by the First Conduct Rule (“FCR”) under the s.6 of the Competition Ordinance (Cap. 619) (“CO”) [Tab-1].

(3) In the event that the URA (or another statutory body) wishes to compile fee-scales of consultants for residents / property management companies to make reference to, the CC’s recommendations are as follows:

(a) if the fee-scales are compiled using the prices of previous bids as benchmark, care must be taken to ensure that the previous prices used for benchmarking purposes were, in the opinion of the statutory body, reasonable and competitive;

(b) although it may be suspicious for a consultant to put in an overly “low” bid for consultancy services, it cannot be discounted that there may be legitimate business reasons why a particular consultant may be bidding aggressively for a consultancy contract. This may, for example, be where:

(a) the consultant is willing to forego some of its profits to gain relevant staffing and project experiences especially if it is a new entrant to the consultancy market and needs to accrue such experience in order to meet the URA’s prequalification criteria; and/or

(b) the consultant has special technical know-how and expertise that enables it to carry out the relevant works in a manner that is more efficient / cost effective compared to its competitors. It is therefore able to lower its bidding prices without sacrificing its profits;

thus, rather than simply disqualifying a relevant consultancy bid for being priced at a very low level, it may be prudent for the residents / property management companies to make further inquiries to ascertain whether any legitimate reason is present lest they end up disqualifying a genuine competitive tender; and

(c) finally, while a set of fee-scales may be helpful in informing the residents / property management companies which bids

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are suspiciously cheap, it does not necessarily follow that those bids which are within the fee-scale / reference price range must be free from manipulation. The use of fee-scales must therefore not be the only form of due diligence which needs to be carried out.

Recommendation on Improvement Measures to ToR(2)

(4) In addition to the previous recommendations which the CC has proposed:

(a) the CC will shortly be publishing:

(i) a set of revised model Non-Collusion Clause (“NCC”) and Non-Collusive Tendering Certificate (“NCTC”) to strengthen its efficacy in deterring anticompetitive behaviour in the tendering for building maintenance works; and

(ii) a pro-forma statutory declaration for prospective procurers to incorporate into their tenders - requiring bidders in building maintenance works to confirm that they had not engaged in anticompetitive behavior prior to bidding;

which the CC recommends to be included as mandatory criteria in future bids for relevant large-scale building maintenance works;

(5) Finally, on the question of criminalisation and legislative reform, the CC has continued to work closely with the Commerce and Economic Development Bureau (“CEDB”), the Government’s Task Force on Investigation and Regulation, as well as other stakeholders such as the Hong Kong Bar Association on different options. Subject to any specific recommendations from the IC, the CC should be ready to propose a set of reforms to existing legislations with a view to enhancing the deterrent effect of the law and to better facilitate the detection and enforcement of the CO against cartelists in the building maintenance sector.

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Part 1: The legality and practicality of fee-scales

On day 21 of the Evidential Hearing (30 April 2026), a series of exchanges took place between the representative of the URA (Mr. Wong Se King (“Mr. Wong”)), Leading Counsel to the IC, and the Chairman of the IC concerning a set of fee-scales which was published by the HKIS.2 At the end of the exchange, the Chairman requested the CC to provide some assistance in respect of the legality and practicality of fee-scales noting, especially, that: “The public may want to have more information about this. Without violating the Competition Ordinance, how can we have more of such information?” 5. In order to address the Chairman’s question, the CC will:

(1) first, set out the relevant background of its exchanges with the HKIS in 2015 and 2016;

(2) second, set out the relevant principles of law and why it would be unlawful for members of a trade association (such as the HKIS) to discuss and agree on a set of fee-scales; and

(3) third, set out why it would not be unlawful for a statutory body (such as the URA) to compile such fee-scales and to provide the CC’s recommendations as to how that might be done in compliance with the CO.

Relevant Background

In 2015, as part of the CC’s initiative to prepare different Hong Kong trade associations for the commencement of the CO (which came into full effect on 14 December 2015), the CC had reviewed the practices of all trade associations in Hong Kong and upon discovering practices which may risk contravening the CO, notified these trade associations of the relevant compliance risks.

As part of this project, the CC had reviewed the practices of the HKIS and noted, in particular, that its publication of fee-scales in relation to “Professional Charges for Building Surveying Services”, the “Scale of Professional Charges for Land Surveying Services”, and the “Scale of

2 [Day 21, 96:19-101:23]

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Professional Charges for General Practice Services in Hong Kong” may contravene the FCR.

Between 2015 and 2016, the CC and HKIS engaged in numerous communications over the CC’s concerns and in 2016, the HKIS, through its solicitors, informed the CC that it was abolishing the said fee-scales.

According to HKIS’ own Annual Report for 2015/16 this was done upon the HKIS being advised by its own appointed legal advisors “that the Fee Scales… were in contravention of the [CO] and should be abolished.”: see. paragraph 4.7 of HKIS’ Annual Report for 2015/16 [Tab-2].

It was therefore in these circumstances that the HKIS had voluntarily removed the relevant fee-scales and their corresponding association rules.

Fee-Scales Compiled by Trade Associations - Relevant Legal Principles

Fundamental to the notion that competition generates consumer welfare is the idea that in a market economy, businesses operating independently will always seek to provide better goods and services and/or provide such services at lower prices and better quality compared to their rivals in order to win businesses from consumers. The more intense the rivalry, the greater the incentive for businesses to seek to capture their businesses by providing greater value to the consumer.

Correspondingly, the greater the degree of uncertainty amongst business as to how its rivals may conduct themselves on the relevant market (e.g. what prices they will charge), the stronger the competitive pressure would be on those businesses to offer greater value to consumers (see. in particular, paragraph 15 below).

Central to competition law is therefore the protection of this rivalry and feature of uncertainty through prohibiting any means by which businesses may directly or indirectly disclose their future market intent to each other.

As was observed by the Competition Tribunal in Competition Commission v Nutanix [2019] HKCT 2 [Tab-3]: “32. Any direct or indirect contact between economic operators of such a nature as to disclose to a competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market, where the object or effect of such contact is to create conditions of competition which do not correspond to the normal

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conditions of the market in question, constitutes a concerted practice…

1. In order to prove a concerted practice, it is not therefore necessary

to show that the competitor in question has formally undertaken to adopt a particular course of conduct. It is sufficient that, by its statement of intention, the competitor should have eliminated or, at the very least, substantially reduced uncertainty as to the conduct to expect of the other on the market…” [citations omitted] 15. The protection of this state of rivalry and uncertainty amongst bidders is all the more important in the context of bidding and tendering. This is because:

(1) in any given tender, the procurer will likely have little / no idea as to what the state of the market is, what is likely to be the best deal it can get, and what sort of terms it should expect to purchase the relevant goods or services;

(2) while the procurer can try to better understand the market through its own research and analysis, this will likely require substantial time and costs, especially where the goods or services are highly technical in nature;

(3) the procurer may try to engage multiple suppliers and to try and “play” each of their proposed terms against one another. However, in addition to being costly in terms of time, it would similarly be hard for the procurer to know if the number of suppliers it had contacted was enough for it to secure the best deal. This is especially the case where the projected contract sum is sizeable and suppliers may be quoting at wildly different terms / prices;

(4) the procurer may address this information asymmetry through conducting a competitive bidding process. Specifically, the procurer can invite a larger number of suppliers to submit their best offer at a designated date while, at the same time, letting the suppliers know that a large number of their rivals have also been invited to submit their best offers;

(5) as each supplier prepares its best offer for submission, they will know its own cost for providing the goods / services and may also have a reasonably good idea about the cost of its rivals. Its final offer will therefore be influenced by a combination of its own cost,

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its beliefs about its rivals’ cost, the number of rivals that have been invited to participate, and the profits it can expect to obtain (all of this information being otherwise unknown to the procurer);

(6) through the process of competitive tendering, the procurer is thus able to overcome the problem of its ignorance about the market - by requiring the suppliers to solve the problem through their own rivalry;

(7) the rivalry, which is essential to achieving what the procurer wants, is contrary to the joint interest of the suppliers. If a supplier is able to discover what other suppliers will do (e.g. what their terms of bid are), this will reduce their rivalry and allow the suppliers to increase their joint profits - especially if they can find a way to share the benefits of the reduced rivalry;

(8) the simultaneous consideration of offers by informed bidders, who know that they must prevail against similarly informed rivals in head-to-head competition in order to obtain the payoff (i.e. to win the bid), is a powerful market force which the procurer can pray-in- aid of even if it is uninformed about the relevant market characteristics;

(9) the intensity of the rivalry and the uncertainty among bidders is what encumbers the profits for the bidders. Collusion by the bidders, especially if it reduces this uncertainty, increases payoffs by suppressing that rivalry.

(c.f. The Economics of Collusion - Cartel and Bidding Rings at pp. 164- 166 [Tab-4]).

It is, in the circumstances, why collusion between businesses are universally condemned by competition law. To this end, section 6 of the CO [Tab-1] expressly prohibits: (1) undertakings (i.e. businesses) from entering into any agreement or concerted practices that has the object or effect of harming competition in Hong Kong; and

(2) specifically in the context of trade associations, members of those associations from making or giving effect to a decision of the association which has the object or effect of harming competition in Hong Kong.

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Fee-scales that are the result of members of a trade association discussing / agreeing on what a price they should charge for prospective works harm consumers because they are based on the incentives and profit maximizing aims of the associating members and not the interest of consumers. It is therefore unlikely to represent what a competitive price should be and may end up misleading consumers that it is.

Even if the fee-scales are stated to be “for general reference only” or that the association members are “free to depart from the fee-scale” it may still be capable of harming competition on the relevant market.

In the past, the argument that a set of fee-scales should not be regarded as being anticompetitive because it is of a non-binding nature and/or is intended to facilitate transparency for consumers has been rejected in the context of:

(1) fee guidelines issued by the Royal Institute of British Architects that were stated to be merely indicative and used only as a yardstick by which a client, who may be ignorant of what a reasonable charge is, can forecast the cost of the service;3

(2) a “list of average fees received by advocates” issued by the Rennes Bar for professional legal services that were rendered by its members on the basis that it was intended to act as a guide for clients;4

(3) a “Guideline on Fees” published by the Singapore Medical Association (“SMA”) which recommended a range of professional fees for a range of medical services to be provided by medical professionals in Singapore. This was despite the guidelines being recommendatory only and that they were meant to protect patients’

3 Royal Institute of British Architects, Case GP/908 (14 March 2003), OFT Competition Case closure summaries 1-31 March 2004 [Tab-5]. In particular, the Office of Fair Trade noted that: “Circulation of guidance on fees issued by an association of undertakings or a professional body may encourage tacit collusion as it is likely to provide a lead on prices which may hinder the ability or incentive of efficient firms to compete by reducing price to reflect their lower costs. It may also protect those who are less efficient and reduce the incentive to improve. The fact that the guidance was in the form of an indication rather than a binding decision did not prevent it from being a decision of an association of undertakings.”

4 Re. Fees Imposed by the Rennes Bar [1997] E.C.C. 469 [Tab-6]. In particular at [16] therein, the French Competition Council noted that “… by distributing the document in question the Rennes bar might have led its members to fix their fees on the basis of the figures reproduced in the list, instead of by reference to the terms and conditions of their own chambers” and then at [17] “although the [list of average fees] did not have the object of distorting competition in the market in question, it could have been used… as a reference by all advocates… Therefore the list, which was identifiable as a reference scale, constituted a concerted action which may have had the effect of distorting competition…”

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interest by reducing the information asymmetry between patients and medical practitioners.5

Finally, the publication of “guidance prices” 「指導價」; “base prices” 「 基準價」; “reference prices” 「參考價」; “recommended prices” 「推薦 價」; and “future prices” 「「預測價 」are also expressly regarded as being a “high risk activity” 「高風險行為 」for trade associations in the Chinese Mainland according to the guidance from the State Administration for Market Regulation.6

In view of all of the above, it was, and still is, the CC’s position that fee- scales which are the result of an agreement between members of a trade association will likely have the object of harming competition in Hong Kong and be unlawful under the FCR.7

The only exceptional situation in which fee-scales set by members of a trade association may not be in contravention of the FCR is if it can be demonstrated that it enhances overall economic efficiency pursuant to the conditions in s.1 Sch. 1 CO [Tab-1]. While each case must be assessed according to its own merits, the CC takes the view that fee-scales set by trade associations are unlikely to satisfy the requisite statutory criteria for the economic efficiency exclusion.8

Fee-Scales Compiled by Statutory Bodies - Relevant Legal Principles and CC’s Recommendations

Unlike the position of trade associations, statutory bodies stand on an entirely different footing both in terms of: 5 Application for Decision by the Singapore Medical Association in relation to its Guideline on Fees (Case number: CCS 400/001/09) (“SMA GOF Decision”) [Tab-7]. See. in particular [58] “… CCS is of the view that there is no reason for professional or trade associations to circulate recommended prices unless they intend to, at least, provide a reference for members and influence their independent pricing decisions”; [65] “… even recommendations that purport to be voluntary can have the object of restricting competition”; and then at [72] “… medical practitioners may argue that setting a minimum price helps to ensure that quality will not be compromised… Nevertheless, the jurisprudence is replete with judicial pronouncements rejecting such arguments, as there is no guarantee that, even with minimum price, quality level of services will necessarily be maintained.” 6 See. Article 10(2) of 国务院反垄断反不正当竞争委员会关于行业协会的反垄断指南 [Tab-8].

7 Guideline for the First Conduct Rule paras. 2.34 and 6.14 [Tab-9]

8 See, in this respect, CCS’ decision as to why it did not consider the SMA’s guideline of fees met the relevant criteria in Singapore’s equivalent of s.1 Sch. 1 CO: Part V of SMA GOF Decision [Tab-7].

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(1) jurisdiction; and

(2) theories of harm.

The FCR does not apply to statutory bodies in general

First, s.3 of the CO [Tab-1] expressly provides that the conduct rules (e.g. the FCR) does not apply to a statutory body unless they are expressly specified as such by the Chief Executive in Council.

As of today, only 6 statutory bodies have been expressly specified as such under the Competition (Application of Provisions) Regulation (Cap. 619A) [Tab-10]. They are namely:

(1) Ocean Park Corporation;

(2) Matilda and War Memorial Hospital;

(3) Kadoorie Farm and Botanic Garden Corporation;

(4) The Helena May;

(5) Federation of Hong Kong Industries; and

(6) The general committee of the Federation of Hong Kong Industries.

There is therefore no prospect of a statutory body, such as the URA, contravening the FCR should it decide to compile a fee-scale.9 The FCR does not apply where there is no collusion

Furthermore, fee-scales / reference prices that are compiled by a third-party (such as the URA) will not contravene the FCR if they do not involve collusion among competing businesses. 9 While not strictly relevant for present purposes, it should be made clear that there may be situations where the trade association is a statutory body but its members are not. In these situations, while the FCR may not apply to the trade association, it will continue to have application over its members. These members must therefore not, directly or indirectly, enter into any agreement / concerted practices / make or give effect to the decision of the association that has the object or effect of harming competition.

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In fact, the URA, itself, has through the Cost Reference Centre established by the Building Rehabilitation Platform, published a set of detailed “Reference Unit Rate” for “typical works items” in building rehabilitation works which are: (1) to be “used for reference in preparing the preliminary estimates for building rehabilitation works”;

(2) compiled using data “gathered periodically from the awarded contracts and returned tenders of building rehabilitation properties”; and

(3) intended to be updated “once a year for the reference of the public”.10

As the URA’s “Reference Unit Rate” does not involve / require building contractors to agree on a set of prospective fees, it will not contravene the FCR regardless of URA’s status as a statutory body. 11 CC’s recommendations

Notwithstanding the above, the CC has the following recommendations if a statutory body (such as the URA) wishes to compile a set of fee-scales / reference prices of consultants for the consideration of residents / property management companies: (1) first, if the fee-scales are compiled by benchmarking against previously awarded contracts, care must be taken to ensure that previous price actually reflects what is, in the opinion of the statutory body, reasonable and competitive and is not, itself, distorted (whether upwards or downwards) because of anti-competitive practices. It may, in this respect, be fallacious to simply assume that the market price is reflective of the competitive price if the market in question has been the subject of anticompetitive practices for a prolonged period of time;

(2) in the context of consultants that appear to be “undercharging” when compared with the fee-scale rates, it may be important for the

10 https://brplatform.org.hk/en/cost-reference-centre/reference-unit-rate

11 Notwithstanding the existence of such fee-scales, contractors on the relevant market must still independently determine their bidding prices in any given tender. Putting the point differently, any collusion amongst contractors to use the Reference Unit Rate as a form of focal point when bidding in tenders remains unlawful under the FCR.

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procuring residents to be adequately informed that there may, in certain circumstances, be legitimate business reasons why a particular consultant may be bidding aggressively or even seemingly at a loss. This may, for example, be where:

(a) the consultant is willing to forego some of its profit to gain relevant staffing and project experiences especially if it is a new entrant to the consultancy market and needs to accrue such experience in order to meet certain prequalification criteria; and/or

(b) the consultant has special technical know-how and expertise that enables it to carry out the relevant works in a manner that is more efficient / cost effective compared to its competitors. It is therefore able to lower its bidding prices without sacrificing its profits.

(3) stemming from (2) above, rather than simply disqualifying a relevant consultancy bid for being priced at a very low level, it may be prudent for the residents / property management companies to first ascertain whether any legitimate reason is present lest they end up disqualifying a genuine competitive tender; and

(4) finally, while a set of fee-scales may be helpful in informing the residents / property management companies which bids are suspiciously cheap, it does not necessarily follow that those bids which are within the fee-scale / reference price range must be free from manipulation. The use of fee-scales must therefore not be the only form of due diligence which needs to be carried out.

Conclusion on Fee-Scales

For the foregoing reasons, it is the CC’s position that: (1) fee-scales that are compiled by members of a trade association discussing / agreeing on prospective prices will likely contravene the FCR;

(2) fee-scales that are compiled by a statutory body (such as the URA) in circumstances that do not involve collusion between businesses will unlikely contravene the FCR; and

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(3) if a statutory body wishes to compile such a fee-scale, it should heed the issues raised at paragraph 30 above.

Part 2: CC’s recommendations that may be relevant to ToR(2)

The CC has previously provided its recommendations that may be relevant to ToR(2) in: (1) its written opening to the IC dated 9 March 2026 (in particular, paragraphs 27-33); and

(2) its written report to the IC dated 14 May 2026 (in particular, paragraphs 28-34);

the contents of which will not be repeated herein.

In terms of additional measures and developments since the filing of the above submissions, the IC may wish to note that: (1) the CC will shortly be publishing:

(a) a set of revised model NCC and NCTC to strengthen their efficacy in deterring anticompetitive behavior; and

(b) a pro-forma statutory declaration for prospective procurers to incorporate into their tenders - which will require bidders in building maintenance works to confirm, on oath, that they had not engaged in anticompetitive behavior prior to bidding.

which the CC recommends to be included as mandatory criteria in future bids for relevant large-scale building maintenance works; and

(3) on the question of criminalisation and legislative reform, the CC has continued to work closely with the CEDB, the Government’s Task Force on Investigation and Regulation, as well as other stakeholders such as the Hong Kong Bar Association on different options. Subject to any specific recommendations from the IC, the CC should be ready to propose a set of reform to existing legislations with a view to enhancing the deterrent effect of the law.

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Part 3: Concluding Remarks

The CC hopes that these submissions have adequately addressed the concerns of the IC (especially with regards to fee-scales) and will welcome any opportunity to further address / assist the IC. Dated the 17th day of June 2026.

Competition Commission

Re. Independent Committee in relation to the fire at Wang Fuk Court in Tai Po (“IC”) List of Materials 1. Sections 3, 6, and s.1 Sch.1 of the Competition Ordinance (Cap. 619). 2. Para. 4.7 Annual Report of the Hong Kong Institute of Surveyors for 2015/16. 3. Competition Commission v Nutanix [2019] HKCT 2. 4. The Economics of Collusion - Cartel and Bidding Rings at pp. 164-166. 5. Royal Institute of British Architects, Case GP/908 (14 March 2003), OFT Competition Case closure summaries 1-31 March 2004. 6. Re. Fees Imposed by the Rennes Bar [1997] E.C.C. 469. 7. Application for Decision by the Singapore Medical Association in relation to its Guideline on Fees (Case number: CCS 400/001/09). 8. 国务院反垄断反不正当竞争委员会关于行业协会的反垄断指南. 9. Paras. 2.34 and 6.14 Guideline for the First Conduct Rule. 10. Competition (Application of Provisions) Regulation (Cap. 619A). Dated the 17th day of June 2026 Competition Commission

Chapter 619 Competition Ordinance 19/09/2019 Chapter 619 Competition Ordinance 19/09/2019 Chapter 619 Competition Ordinance 19/09/2019 3. Application to statutory bodies (1) The following provisions do not apply to a statutory body— (a) Part 2 (The conduct rules); (b) Part 4 (Enforcement powers of Commission); (c) Part 6 (Enforcement before Tribunal); and (d) Schedule 7 (Mergers). (2) Despite subsection (1), the provisions referred to in that subsection apply to— (a) a specified statutory body; and (b) a statutory body, to the extent that it is engaged in a specified activity. (3) In this section— (a) specified (指明) means specified in a regulation made for the purpose of this section by the Chief Executive in Council under section 5; and (b) a reference to a statutory body includes an employee or agent of the statutory body, acting in that capacity. 6. Prohibition of anti-competitive agreements, concerted practices and decisions (1) An undertaking must not— (a) make or give effect to an agreement; (b) engage in a concerted practice; or (c) as a member of an association of undertakings, make or give effect to a decision of the association, if the object or effect of the agreement, concerted practice or decision is to prevent, restrict or distort competition in Hong Kong. (2) Unless the context otherwise requires, a provision of this Ordinance which is expressed to apply to, or in relation to, an agreement is to be read as applying equally to, or in relation to, a concerted practice and a decision by an association of undertakings (but with any necessary modifications). (3) The prohibition imposed by subsection (1) is referred to in this Ordinance as the first conduct rule. Schedule 1 [ss. 9, 15, 24, 30, 36 & 163] General Exclusions from Conduct Rules 6/12/26, 5:17 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 1/4

Agreements enhancing overall economic efficiency The first conduct rule does not apply to any agreement that— (a) contributes to— (i) improving production or distribution; or (ii) promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit; (b) does not impose on the undertakings concerned restrictions that are not indispensable to the attainment of the objectives stated in paragraph (a); and (c) does not afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the goods or services in question. 2. Compliance with legal requirements (1) The first conduct rule does not apply to an agreement to the extent that it is made for the purpose of complying with a legal requirement. (2) The second conduct rule does not apply to conduct to the extent that it is engaged in for the purpose of complying with a legal requirement. (3) In this section— legal requirement (法律規定) means a requirement— (a) imposed by or under any enactment in force in Hong Kong; or (b) imposed by any national law applying in Hong Kong. 3. Services of general economic interest etc. Neither the first conduct rule nor the second conduct rule applies to an undertaking entrusted by the Government with the operation of services of general economic interest in so far as the conduct rule would obstruct the performance, in law or in fact, of the particular tasks assigned to it. 4. Mergers (1) To the extent to which an agreement (either on its own or when taken together with another agreement) results in, or if carried out would result in, a merger, the first conduct rule does not apply to the agreement. (2) To the extent to which conduct (either on its own or when taken together with other conduct) results in, or if engaged in would result in, a merger, the second conduct rule does not apply to the conduct. 5. Agreements of lesser significance (1) The first conduct rule does not apply to— (a) an agreement between undertakings in any calendar year if the combined turnover of the undertakings for the turnover period does not exceed $200,000,000; 6/12/26, 5:17 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 2/4

(b) a concerted practice engaged in by undertakings in any calendar year if the combined turnover of the undertakings for the turnover period does not exceed $200,000,000; or (c) a decision of an association of undertakings in any calendar year if the turnover of the association for the turnover period does not exceed $200,000,000. (2) Subsection (1) does not apply to an agreement, a concerted practice, or a decision of an association of undertakings, that involves serious anti-competitive conduct. (3) Subject to subsection (4), the turnover period of an undertaking is— (a) if the undertaking has a financial year, the financial year of the undertaking that ends in the preceding calendar year; or (b) if the undertaking does not have a financial year, the preceding calendar year. (4) The turnover period of an undertaking is the period specified as such for the purpose of this subsection in the regulations made under section 163(2) if— (a) for an undertaking that has a financial year— (i) the undertaking does not have a financial year that ends in the preceding calendar year; or (ii) the financial year of the undertaking that ends in the preceding calendar year is less than 12 months; or (b) for an undertaking that does not have a financial year— (i) the undertaking is not engaged in economic activity in the preceding calendar year; or (ii) the period in which the undertaking is engaged in economic activity in the preceding calendar year is less than 12 months. (5) In this section— preceding calendar year (對上公曆年) means the calendar year preceding the calendar year mentioned in subsection (1)(a), (b) or (c); turnover (營業額)— (a) in relation to an undertaking that is not an association of undertakings, means the total gross revenues of the undertaking whether obtained in Hong Kong or outside Hong Kong; and (b) in relation to an association of undertakings, means the total gross revenues of all the members of the association whether obtained in Hong Kong or outside Hong Kong. 6. Conduct of lesser significance (1) The second conduct rule does not apply to conduct engaged in by an undertaking the turnover of which does not exceed $40,000,000 for the turnover period. (2) Subject to subsection (3), the turnover period of an undertaking is— (a) if the undertaking has a financial year, the financial year of the undertaking that ends in the preceding calendar year; or 6/12/26, 5:17 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 3/4

(b) if the undertaking does not have a financial year, the preceding calendar year. (3) The turnover period of an undertaking is the period specified as such for the purpose of this subsection in the regulations made under section 163(2) if— (a) for an undertaking that has a financial year— (i) the undertaking does not have a financial year that ends in the preceding calendar year; or (ii) the financial year of the undertaking that ends in the preceding calendar year is less than 12 months; or (b) for an undertaking that does not have a financial year— (i) the undertaking is not engaged in economic activity in the preceding calendar year; or (ii) the period in which the undertaking is engaged in economic activity in the preceding calendar year is less than 12 months. (4) In this section— preceding calendar year (對上公曆年) means the calendar year preceding the calendar year in which the conduct mentioned in subsection (1) is engaged in; turnover (營業額) means the total gross revenues of an undertaking whether obtained in Hong Kong or outside Hong Kong. 6/12/26, 5:17 PM Hong Kong e-Legislation - Print Selected Documents https://www.elegislation.gov.hk/printhtml 4/4

DIRECTORY AND ANNUAL REPORT 2015-2016

President's Report 34

1. Members’ Communication and

Services We value members’ experience with the Institute. 4.1 Networking The HKIS Members’ Welfare Committee successfully held two drinks gatherings for members on 31 May and 1 December 2016, with 130 and 88 members in attendance respectively. These events provided invaluable networking opportunities for members across all grades and Divisions. 4.2 HKIS Archive An archive has been developed under the HKIS website to allow easier access to the Institute’s records, including its publications, reports and media coverage. 4.3 Wikipedia A Wikipedia page for the HKIS has been enhanced and updated with new contents to serve as a platform for the promotion of the Institute’s public stature. 4.4 Members’ Forums The Housing Policy Panel organised a discussion forum on “Elderly Housing Policy” on 17 June 2016. The forum reviewed the existing housing policy against the needs of the Elderly in Hong Kong. Speakers from different sectors shared their views on the role of the Government, NGOs and the private sector in this area, as well as issues surrounding the housing supply and demand situation in private and public housing. 4.5 Extraordinary General Meeting and Forum A discussion forum was held on 9 September 2016 to explain the rationale behind the resolutions on the proposed amendments to the HKIS Rules of Conduct, Constitution and Bye-Laws, the proposed revisions to annual subscriptions and application fees, and the ratification of Guidance Notes on Standards, before an Extraordinary General Meeting (EGM) was held to pass the resolutions. At the EGM held on 19 September, six out of seven resolutions were passed in respect of the amendments to the Rules of Conduct and Constitution relating to the Competition Ordinance, admission to membership and the ratification of Guidance Notes on Standards (namely the Rules of Conduct, Valuation Standards, Guidance Notes on Land Boundary Survey and Surveyors Acting As Experts in Commercial Rent Determination – A Joint Guidance Note with RICS Hong Kong) as well as the approval of an increase in the annual subscriptions and application fees for membership admission. The proposal to implement an automatic annual subscription adjustment mechanism was not passed. 4.6 Forum for the Creation of an Additional Post of Vice-President To cope with the growing demands and expectations arising from the development of the surveying profession, the General Council considered and agreed that it was necessary to add one additional post of Vice-President to the existing number of Office Bearers to assist in the affairs of the Institute. A discussion forum was organised by the General Council on 24 October 2016 to explain the rationale behind its decision. 4.7 Competition Ordinance A working group was formed to study the implications of the Scales of Professional Charges (or Fees Scales) and Rules 1.2.5 and 1.2.6 of the HKIS Rules of Conduct under the Competition Ordinance (Cap. 619). The HKIS was advised by the appointed legal advisors that the Fees Scales and the two Rules were in contravention of the Ordinance and should be abolished. Such abolition became effective at the EGM on 19 September. 4.8 Cooperation with Other Professional Institutes Regular meetings and liaison were held with four other professional institutes, the Hong Kong Institute of Architects, Hong Kong Institute of Planners, Hong Kong Institute of Landscape Architects and Hong Kong Institution of Engineers to exchange views and pursue subjects of common interest and concerns. The Institute participated in various functions of the Construction Industry Alliance in 2016 with an aim to promote the healthy growth of the construction industry in Hong Kong. We also exchanged views on subjects including membership reciprocity agreement and measures to better nurture our young members with the Royal Institution of Chartered Surveyors. We joined the

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V CTEA 1/2017 [2019] HKCT 2 IN THE COMPETITION TRIBUNAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COMPETITION TRIBUNAL ENFORCEMENT ACTION NO 1 OF 2017

BETWEEN COMPETITION COMMISSION Applicant

and

NUTANIX HONG KONG LIMITED 1st Respondent BT HONG KONG LIMITED

2nd Respondent SIS INTERNATIONAL LIMITED 3rd Respondent INNOVIX DISTRIBUTION LIMITED 4th Respondent (trading as “INNOVIX DISTRIBUTION”) TECH‑21 SYSTEMS LIMITED 5th Respondent

Before: Hon G. Lam J, President of the Competition Tribunal Dates of Hearing: 20‑22, 25‑29 June, 3 July, 17‑20 September 2018 Date of Judgment: 17 May 2019

J U D G M E N T

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V TABLE OF CONTENTS

Paragraph

A. INTRODUCTION··················································································· 1 B. LEGAL FRAMEWORK··········································································· 11

Statutory framework for prohibition and enforcement ························· 12

Warning notice················································································ 18

Guidelines issued by the Commission················································ 22

The first conduct rule········································································ 24

Agreement······················································································· 25

Concerted practice ··········································································· 28

Infringement by object······································································ 35

Vertical and horizontal agreements···················································· 40

Knowledge and foresight································································· 45 C. STANDARD OF PROOF········································································· 50

The parties’ contentions···································································· 51

The requirement of Art 11································································· 53

Is there derogation from the criminal standard of proof by statute?········ 63

Nature of competition proceedings and overseas jurisprudence ············ 68

Application of the applicable standard················································ 73 D. THE FACTS AND EVENTS···································································· 76

Nutanix’s hyper-converged system···················································· 77

Nutanix’s supply chain····································································· 80

Nutanix’s deal registration system····················································· 83

YWCA’s need for a new server system·············································· 88

YWCA’s procurement policy and procedures····································· 102

The first tender················································································ 105

The second tender············································································ 115

Submission of bids in the second tender············································· 138

a. Innovix··················································································· 141

b. SiS························································································· 149

c. Tech-21··················································································· 158

d. iCON······················································································ 166

The aftermath·················································································· 168

The third tender··············································································· 174

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V E. AGREEMENT BETWEEN NUTANIX AND BT······································· 181

The communications········································································ 183

Absence of Hung as witness····························································· 188

Whether the Commission may impugn Chan’s evidence······················ 196

Discussion······················································································· 200

Conclusion······················································································ 227 F. AGREEMENT BETWEEN NUTANIX AND SiS······································ 229 G. AGREEMENT BETWEEN NUTANIX, BT AND INNOVIX······················ 238 H. AGREEMENT BETWEEN NUTANIX AND TECH-21····························· 267 I. ATTRIBUTION OF CONDUCT AND KNOWLEDGE ····························· 288

The issue························································································· 288

The facts························································································· 290

a. The set-up within SiS······························································· 291

b. The second tender··································································· 297

c. Submitting the bid on 18 July 2016············································ 300

d. Meeting on 9 August 2016························································ 304

e. SiS’s company chop································································· 305

f. Shek’s motives········································································ 310

Special rule of attribution·································································· 315

The parties’ submissions··································································· 320

Overseas jurisprudence····································································· 323

a. EU ························································································ 323

b. UK ························································································ 332

c. Australia ················································································ 341

d. United States··········································································· 344

Section 91 of the Ordinance······························································ 346

Attribution for the first conduct rule··················································· 360

Application to the facts ···································································· 374

The Commission’s alternative case···················································· 378

Conclusion······················································································ 381 J. ANTI-COMPETITIVE OBJECT······························································ 382

General principles············································································ 382

Content and context of the agreements··············································· 392

Deal registration system··································································· 404

No inflated price·············································································· 408

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Vertical vs horizontal······································································· 417

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Conclusion on “object” ···································································· 437 K. EXCLUSION UNDER SECTION 5 OF SCHEDULE 1······························ 440 L. WARNING NOTICE·············································································· 443

Section 82······················································································· 443

The relevant time for the purpose of s 82············································ 451

a. The pleadings·········································································· 451

b. The new point·········································································· 455

c. Objection to the new point························································ 458

d. Time for assessing existence of serious anti-competitive conduct under s 82················································································ 464

e. “Has reasonable cause to believe” ············································· 478

i. Subject matter of belief····················································· 479

ii. Subjective belief······························································ 486

iii. Objective basis································································ 490

Bid-rigging······················································································ 491 a. Statutory definition·································································· 491

b. Agreement·············································································· 494

c. Between 2 or more undertakings··············································· 497

d. Submission of bids or tenders arrived at by the agreement··········· 506

e. Agreement not made known····················································· 511

f. A further controlling quality? ··················································· 517

Whether made known to YWCA······················································· 519 a. The scope of the question························································· 520

b. Lok’s knowledge······································································ 524

c. Reasonable cause for belief as to knowledge······························ 545

The definition of bid-rigging applied·················································· 548 M. SUMMARY AND CONCLUSION··························································· 553

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V Abbreviations APD Administration and Procurement Department (YWCA) BT BT Hong Kong FLimited, the 2nd respondent Chan Mr CHAN Wai Ying Denis, Technical Pre‑Sales Manager of BT Cheung CHEUNG Kar Hay Danny, Assistant Product Manager of Innovix CJEU Court of Justice of the European Union Commission Competition Commission, the applicant EU European Union FAC Finance and Administration Committee (YWCA) Hung Mr Thomas HUNG, Territory Account Manager of Nutanix ICCPR International Covenant on Civil and Political Rights iCON iCON Business Systems Ltd Innovix Innovix Distribution Limited, the 4th respondent ISD Information System Department (YWCA) IT Information technology ITDC Information Technology Development Committee (YWCA) Li Mr Benny LI, Systems Engineer (YWCA) and assistant of Lok Lok Mr LOK Yiu Ying Alan, Head of ISD and Secretary of the ITDC (YWCA) Mak Mr MAK Pui Hing Harris, Administration and Procurement Manager of YWCA Nutanix Nutanix Hong Kong Limited, the 1st respondent Ordinance Competition Ordinance (Cap 619) Percy Ng Mr NG Tat Keung Percy, Alliance & Business Development Manager of BT Shek Mr SHEK Ka Kit Keith, Product Manager of SiS SiS SiS International Limited, the 3rd respondent Siu Mr SIU Kiu Fai Tommy, Product Manager of Innovix Steve Ng Mr NG Chi Hang Steve, Sales Manager of Tech‑21 Tech‑21 Tech‑21 Systems Limited, the 5th respondent TFEU Treaty for the Functioning of the European Union Tribunal Competition Tribunal UK United Kingdom Wong Mr WONG Ka Man Morris, Assistant Procurement Officer in the Administration and Procurement Department of YWCA YWCA Hong Kong Young Women’s Christian Association

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A. INTRODUCTION 1. In these proceedings, the Commission contends that the five respondents, in their conduct in relation to a call for tenders for IT equipment YWCA in July 2016, each contravened the first conduct rule (s 6(1) of the Ordinance) which prohibits agreements or concerted practices between undertakings the object or effect of which is to prevent, restrict or distort competition in Hong Kong. The Commission seeks against each of them declarations of contravention and orders for pecuniary penalty pursuant to s 93. 2. Broadly described, the Commission’s case is as follows. In July 2016, in response to YWCA’s invitation to tender for the supply and installation of a Nutanix cloud-based server system, BT planned to submit a bid. YWCA’s procurement policy required a minimum of five bids for this tender. Where fewer than five bids were received, special approval would be required before the contract could be awarded. A prior tender had failed because only one bid was received (from BT). For the second tender, to assist BT’s bid, Hung (Nutanix) agreed with Chan (BT) that Hung would obtain four “dummy bids” (in the sense of non-genuine bids) from friendly Nutanix channel partners. Chan gave BT’s completed bid including the bid prices to Hung. Hung prepared bids for SiS, Innovix, Tech-21 and another IT company (iCON) with substantially higher bid prices than BT’s, and separately agreed with Shek (SiS), Siu (Innovix) and Steve Ng (Tech-21) and a friend from iCON, for them to sign the bids which he arranged to be submitted. Pursuant to these agreements, SiS, Innovix and Tech‑21 (but not iCON) each submitted a dummy bid to YWCA, in addition to the bid submitted by BT.

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V 3. The Commission contends that the arrangements between Nutanix and BT, Nutanix and SiS, and Nutanix and Tech-21 respectively were vertical, bilateral agreements or concerted practices, and that the arrangement with Innovix was either a trilateral one between Nutanix, BT and Innovix or a bilateral one between Nutanix and Innovix. 4. The Commission contends that the respondents’ conduct constituted contravention of the first conduct rule, in that they made or gave effect to agreements or engaged in concerted practices with the object of preventing, restricting or distorting competition. 5. The Commission further contends that the respondents’ conduct constituted “bid‑rigging” and therefore “serious anti‑competitive conduct” as defined in the Ordinance and that therefore no warning notice was required to be issued to them before the commencement of these proceedings in the Tribunal. 6. In broad terms, the respondents have raised the following matters. Nutanix and BT dispute that they agreed to procure, and Innovix and Tech-21 dispute that they agreed to submit, non-genuine bids. They contend that the bids submitted were genuine bids with prospects (albeit low prospects) of success. SiS contends that it was a junior employee (Shek) who privately agreed to and did submit a bid in its name, and that his conduct was outside his scope of work and authority and not attributable to SiS, which carried on business as a distributor and had never taken part in end-users’ tenders. 7. The respondents contend that any such agreements or concerted practices as existed did not have the object of preventing, restricting or distorting competition.

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V 8. Further and in any event, the respondents contend that their conduct did not constitute “bid-rigging” for various reasons including that YWCA knew of their agreements. Accordingly, a warning notice was required before proceedings could be instituted against them and, since none was issued, the proceedings must be dismissed. 9. Separately, Tech-21 has argued that the first conduct rule is excluded by virtue of s 5 of Schedule 1 to the Ordinance on the ground that it has not been shown that the combined turnover of itself and Nutanix for the relevant year exceeds $200 million. 10. This judgment is structured as follows. Section B introduces the general legal framework and basic concepts in the Ordinance relevant to this case. Section C deals with the standard of proof the Commission has to meet in this application. Section D sets out the facts and events which are largely uncontroversial or supported by incontrovertible evidence. Sections E, F, G and H each deals with the agreements or concerted practices between Nutanix and BT, Nutanix and SiS, Nutanix and Innvoix (and BT), and Nutanix and Tech-21 respectively. Section I considers the question of attribution of Shek’s conduct to SiS. Section J is concerned with whether the agreements or concerted practices found had the object of preventing, restricting or distorting competition. Section K deals with the exclusion under s 5 of Schedule 1. Section L deals with the issues concerning warning notice, including whether there was bid-rigging and whether the agreements were made known to YWCA. A brief summary is set out in Section M.

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V B. LEGAL FRAMEWORK 11. In this section I shall outline the statutory scheme so far as relevant and explain in general some of the principal concepts that may be relevant in this case. (1) Statutory framework for prohibition and enforcement 12. The Ordinance lays down three prescriptive provisions called “competition rules”. They include two “conduct rules”, namely, the first conduct rule (s 6) and the second conduct rule (s 21), and a “merger rule” (Schedule 7, s 3). 13. Section 6, which lays down the first conduct rule, provides: “ (1) An undertaking must not— (a) make or give effect to an agreement; (b) engage in a concerted practice; or (c) as a member of an association of undertakings, make or give effect to a decision of the association, if the object or effect of the agreement, concerted practice or decision is to prevent, restrict or distort competition in Hong Kong. (2) Unless the context otherwise requires, a provision of this Ordinance which is expressed to apply to, or in relation to, an agreement is to be read as applying equally to, or in relation to, a concerted practice and a decision by an association of undertakings (but with any necessary modifications). (3) The prohibition imposed by subsection (1) is referred to in this Ordinance as the “first conduct rule”.” 14. In the present case the Commission alleges infringement of the first conduct rule “by object”. In this respect, s 6 has to be read together with s 7(1) and (2), which provide that:

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V (1) if an agreement, concerted practice or decision has more than one object, it falls within the first conduct rule if one of its objects is to prevent, restrict or distort competition (s 7(1)); and (2) the object of prevention, restriction or distortion of competition may be found even if it can be ascertained only by inference (s 7(2)). 15. Following such investigation as it considers appropriate, the Commission may apply under s 92 to this Tribunal for a pecuniary penalty to be imposed on any person it has reasonable cause to believe (a) has contravened a competition rule, or (b) has been involved in a contravention of a competition rule. In addition to pecuniary penalty, under s 94 the Tribunal has power to make a wide range of orders specified in Schedule 3. 16. The Tribunal is set up under the Ordinance as a superior court of record consisting only of the judges of the Court of First Instance: ss 134‑135. It has all the powers, rights and privileges of the Court of First Instance with respect to witnesses, production of documents and enforcement of its orders: s 143(1). It may receive any evidence whether or not admissible in a court of law and is not bound by the rules of evidence except in proceedings in which pecuniary or financial penalties are sought: ss 143(2) and 147. 17. Section 93(1) empowers the Tribunal, if it is satisfied on such application, that a person has contravened or been involved in a contravention of a competition rule, to order that person to pay to the Government a pecuniary penalty. Section 93(2)‑(4) make further provision for the determination of the amount of a pecuniary penalty. According to s 93(3), the penalty may not exceed in total 10% of the turnover of the undertaking

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V concerned for each year in which the contravention occurred, or, if it occurred in more than three years, 10% of the turnover for the highest three years. (2) Warning notice 18. Sections 92 and 93, however, have to be read subject to s 82. Section 82(1) provides: “ If the Commission has reasonable cause to believe that— (a) a contravention of the first conduct rule has occurred; and (b) the contravention does not involve serious anti‑competitive conduct, the Commission must, before bringing proceedings in the Tribunal against the undertaking whose conduct is alleged to constitute the contravention, issue a notice (a “warning notice”) to the undertaking.” 19. A warning notice has to state that the Commission requires the undertaking to cease the contravening conduct within the period specified in the notice, and not to repeat that conduct after that period: see s 82(2)(d)(i). It is only after the warning period has expired, where there is reasonable cause to believe that the contravening conduct has continued or is repeated, that the Commission may bring proceedings in the Tribunal, and then not in respect of any period preceding the warning period: see s 82(4) and (5). 20. “Serious anti‑competitive conduct” is defined in s 2(1) to mean: “ any conduct that consists of any of the following or any combination of the following— (a) fixing, maintaining, increasing or controlling the price for the supply of goods or services; (b) allocating sales, territories, customers or markets for the production or supply of goods or services; (c) fixing, maintaining, controlling, preventing, limiting or

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V eliminating the production or supply of goods or services; (d) bid‑rigging”. 21. Section 2(2) lays down a specific definition of “bid‑rigging” for the purposes of the definition of “serious anti‑competitive conduct”, which is set out in §491 below. (3) Guidelines issued by the Commission 22. Certain guidelines have been issued by the Commission as required by s 35(1) of the Ordinance, including the Guideline on the First Conduct Rule. These guidelines are not subsidiary legislation (see s 35(8)) but the Legislative Council must be consulted before they are issued or amended (see s 35(4)). They represent the Commission’s views and policies and provide guidance to the public, but have no binding legal effect on this Tribunal and the courts or indeed on anyone else. Thus s 35(6) of the Ordinance provides: “ A person does not incur any civil or criminal liability only because the person has contravened any guidelines issued under this section or any amendments made to them.” 23. However, s 35(7) goes on to provide that: “ If, in any legal proceedings, the Tribunal or any other court is satisfied that a guideline is relevant to determining a matter that is in issue— (a) the guideline is admissible in evidence in the proceedings; and (b) proof that a person contravened or did not contravene the guideline may be relied on by any party to the proceedings as tending to establish or negate the matter.”

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V (4) The first conduct rule 24. The first conduct rule is modelled on Art. 101(1) of the TFEU. 1 Both provisions are directed at undertakings; both target agreements, concerted practices and decisions of associations of undertakings; both refer to the object and effect of these arrangements in the alternative, in each case with regard to the prevention, restriction or distortion of competition. EU case law is of obvious value in relation to the interpretation and application of the first conduct rule. (5) Agreement 25. The present case is not concerned with decisions of associations of undertakings. Only agreements and concerted practices are relevant. An “agreement” is not required to be in any particular form and is not limited to a legally enforceable contract but is defined broadly in s 2(1) to include: “ any agreement, arrangement, understanding, promise or undertaking, whether express or implied, written or oral, and whether or not enforceable or intended to be enforceable by legal proceedings.” 26. It is not in dispute that the central component in the concept of agreement is a meeting of minds or a concurrence of wills between at least

1 Art. 101(1) of the TFEU provides:

“ The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which: (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical development, or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.”

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V two parties. In Case T‑41/96 Bayer v Commission,2 the General Court of the EU, based on previous case law, stated (at §69) that the concept of agreement centres around the existence of a concurrence of wills between at least two parties, the form in which it is manifested being unimportant so long as it constitutes the faithful expression of the parties’ intention.3 It is sufficient that the undertakings in question should have expressed their common intention to conduct themselves on the market in a specific way (§67; on appeal to CJEU, at §97). For the purpose of the first conduct rule, an agreement does not, in my view, require the same certainty as would be necessary for the creation of a contract enforceable at law. 27. The concurrence of wills does not have to consist in an explicit offer and acceptance. An agreement can equally exist where an apparently unilateral anti‑competitive measure adopted by one party, constituting an invitation to another party, whether express or implied, to fulfil that goal jointly, receives the tacit acquiescence of that other party: Bayer v Commission, at §§71‑72, on appeal at §102. It is not essential to have direct evidence of express communications; the existence of an agreement can be deduced from the conduct of the parties (Bayer, on appeal, at §100), subject of course to meeting the applicable standard of proof. The inclusion of “understanding” in the statutory definition, in my view, reinforces that tacit dealings suffice and also shows that there can be an agreement even if there is nothing to prevent either party from going back on it. (6) Concerted practice

2 [2000] ECR II‑3383. 3 The passage was apparently approved by the Court of Justice on appeal: Joined Cases C‑2/01 & C‑3/01P [2004] ECR I‑23, §97.

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V 28. “Concerted practice” is not defined in the Ordinance. It is a concept borrowed from EU jurisprudence. A consistent line of decisions in the EU case law, starting with Case 48/69 etc ICI v Commission [1972] ECR 619,4 has held that a concerted practice is: “ a form of coordination between undertakings by which, without it having been taken to the stage where an agreement properly so‑called has been concluded, practical cooperation between them is knowingly substituted for the risks of competition.” 29. The criteria of coordination and cooperation do not require the working out of an actual plan, and must be understood in the light of the concept that each economic operator must determine independently the policy which he intends to adopt on the market: Suiker Unie, §§172‑173. Further (at §174): “ Although it is correct to say that this requirement of independence does not deprive economic operators of the right to adapt themselves intelligently to the existing and anticipated conduct of their competitors, it does however strictly preclude any direct or indirect contact between such operators, the object or effect whereof is either to influence the conduct on the market of an actual or potential competitor or to disclose to such a competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market.” 30. Reciprocal contact between the undertakings in question is implied in the concept of “concerted practice”, in the sense that there is an element of acting in concert “where one competitor discloses its future intentions or conduct on the market to another when the latter requests it or, at the very least, accepts it …”: see Joined Cases T‑25/95 Cimenteries CBR v Commission, EU:T:2000:77, §1849.

4 Case 40/73 etc, Suiker Unie v Commission, EU:C:1975:174, [1975] ECR 1663, §191; Joined Cases C‑89/85 A. Ahlström Osakeyhtiö v Commission (Woodpulp II), EU:C:1993:120, [1993] ECR I‑1307, §63; Case C-8/08 T-Mobile, §26. The quotation is taken from T-Mobile at §26.

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V 31. The fact that only one participant reveals his future intentions or other competitive information is not sufficient to exclude the possibility of an agreement or concerted practice, since the recipient of the information in question cannot normally fail to take that information into account when formulating its policy on the market: Cases T‑202/98 etc Tate & Lyle plc v Commission [2001] ECR II‑2035.5 32. Any direct or indirect contact between economic operators of such a nature as to disclose to a competitor the course of conduct which they themselves have decided to adopt or contemplate adopting on the market, where the object or effect of such contact is to create conditions of competition which do not correspond to the normal conditions of the market in question, constitutes a concerted practice: Case C-49/92P Commission v Anic Partecipazioni SpA, EU:C:1999:356, §117; C-199/92P Hüls AG v Commission, §160. 33. In order to prove a concerted practice, it is not therefore necessary to show that the competitor in question has formally undertaken to adopt a particular course of conduct. It is sufficient that, by its statement of intention, the competitor should have eliminated or, at the very least, substantially reduced uncertainty as to the conduct to expect of the other on the market: Cimenteries at §1852. 34. There was some debate in this case concerning the distinction between agreements and concerted practices, and their relationship inter se. Ultimately it seems to me that the difference between the parties is simply a difference in focus and emphasis. That the two concepts are not synonymous

5 Upheld on appeal to the CJEU in Case C-359/01P British Sugar plc v Commission, ECLI:EU:C:2004:255, 29 April 2004.

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V is not in doubt. The fact that the legislature has employed two terms instead of one supports this. But the CJEU has stated that: (1) the relevant treaty provision is intended to apply to all collusion between undertakings, whatever the form it takes. “The only essential thing is the distinction between independent conduct, which is allowed, and collusion, which is not, regardless of any distinction between types of collusion”: Anic, §108; (2) the two concepts of agreement and concerted practice have partially different elements but are not mutually incompatible: Anic, §132; (3) the definitions of “agreement” and “concerted practice” are “ intended, from a subjective point of view, to catch forms of collusion having the same nature which are distinguishable from each other only by their intensity and the forms in which they manifest themselves”: see Case C‑8/08 T‑Mobile v Raad van bestuur van de Nederlandse Mededingingsautoriteit ECLI:EU:C:2009:343, at §23; Anic, §131; and (4) the distinction is made solely with the intention of catching such various forms of collusion: Case C‑194/14P AC‑Treuhand v Commission, ECLI:EU:C:2015:717, at §29. (7) Infringement by object 35. It is common ground that an anti‑competitive object and an anti‑competitive effect are alternative conditions in determining whether certain conduct is prohibited by the first conduct rule (see Case C‑56/65 Société Technique Minière v Maschinenbau Ulm, EU:C:1966:38, 249). In the present case the Commission only alleges infringement “by object” without

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V advancing a case of infringement “by effect”. Where it is established that an agreement has the object of preventing, distorting or restricting competition, it can be concluded there is an infringement of the first conduct rule without having to consider the actual effects of the agreement on competition. 36. In the leading EU case of Case C‑67/13P Groupement des cartes bancaires v Commission EU:C:2014:2204, the CJEU held that the General Court was wrong to find that the concept of restriction must not be interpreted “restrictively”, and that: “ The concept of restriction of competition “by object” can be applied only to certain types of coordination between undertakings which reveal a sufficient degree of harm to competition that it may be found that there is no need to examine their effects.” 37. Consistently with the case law that will be further discussed in section J below, the Commission’s Guideline on the First Conduct Rule (at §§3.2 – 3.6) explains that: (1) An arrangement which has the object of restricting competition is one that, by its nature, is harmful to competition. In relation to restrictions having the object of harming competition, there is no need to establish that they have anti-competitive effects. (2) In order to determine whether an agreement has the object of harming competition, regard must be had to the content of the agreement, the way it is implemented and its context (including both the economic and legal context). (3) Although determination of the object of an agreement essentially involves an objective assessment of its aims, there is nothing to prevent the parties’ subjective intention from being taken into account.

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V 38. Whether a concerted practice has an anti‑competitive object is judged by the same criteria as those applicable in the case of an agreement: T‑Mobile §24. 39. It is the contention of the Commission that the conduct in this case amounts to a prevention, restriction or distortion of competition by object and to bid‑rigging because it was intended to interfere with the proper competitive process of a tender. I shall return to these topics in sections J and L below. (8) Vertical and horizontal agreements 40. It is not in dispute that the first conduct rule applies not only to agreements between undertakings at the same level of the supply chain (horizontal agreements) but also agreements between undertakings at different levels (vertical agreements). 41. At a general level it is however correct to say that in many jurisdictions vertical agreements are viewed with less suspicion than horizontal agreements between competitors. Thus it is stated in the Commission’s Guideline on the First Conduct Rule that (omitting footnotes): “ 5.5 Vertical arrangements are, as a general matter, unlikely to be considered Serious Anti‑competitive Conduct although the definition of Serious Anti‑competitive Conduct does not preclude the possibility (there is no reference in the definition to “competitors”). 5.6 The Commission considers, however, that vertical arrangements may amount to Serious Anti‑competitive Conduct in certain cases. For example, in certain circumstances, resale price maintenance may be Serious Anti‑competitive Conduct.” 42. That said, whether a vertical agreement contravenes the first conduct rule in a particular case depends on the nature, content and context of

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V the agreement. As the CJEU stated in AC‑Treuhand at §35, the relevant prohibition refers generally to all agreements and concerted practices which, in either horizontal or vertical relationships, distort competition, irrespective of the market on which the parties operate. In the Commission’s Guideline on the First Conduct Rule it is stated: “ 6.6 While vertical agreements as compared with horizontal agreements are generally less harmful to competition, some vertical agreements may, nonetheless, cause harm to competition. 6.7 This may be the case where vertical agreements include restrictions which foreclose existing competition or limit the scope for market entry or expansion. In certain cases, vertical restrictions of competition may also serve to facilitate horizontal coordination between competing suppliers and/or downstream distributors.” 43. In Argos Ltd and Littlewoods Ltd v Office of Fair Trading [2006] EWCA Civ 1318, the English Court of Appeal also recognised the potential of vertical agreements to give rise to infringement of competition law. In terms of the general approach, the court stated: “ 28. The Chapter I prohibition catches agreements and concerted practices whether between undertakings at different levels or between those at the same level of commercial operation. An agreement between a supplier and a commercial customer, which may be called a vertical agreement, may breach the prohibition as much as an agreement between competing suppliers of the same product or the same type of product, which can be referred to as a horizontal agreement. 29. Each of these types of agreement may be a serious breach of the prohibition, but horizontal agreements have generally been regarded as more serious. It is unavoidable for a supplier and a customer to have dealings and agreements, though they ought not to be anti-competitive. It is not normal for competing undertakings to have dealings with each other, so that any dealings which they do have are regarded with greater suspicion. However, it may be in the interests of a supplier and several of its customers to restrict competition in relation to the supplier’s products, so that a serious breach of the Chapter I prohibition may be created by dealings between a supplier and two or more of its customers. …

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V 31. It is not in dispute that there could be a trilateral or multilateral agreement or concerted practice between two or more customers and their common supplier, nor that this might come about by virtue of indirect contact between the customers via that supplier. Equally it is clear that there could be a series of bilateral vertical agreements between one supplier and several of its customers, none of the customers being aware of the fact or nature of the agreements between the supplier and other customers, such that there would be no horizontal element to the customers’ agreements. If, on the other hand, each customer did know of the other agreements, it could be equivalent to a multilateral agreement between the supplier and each of the customers.” 44. In cases of that kind it is relevant to examine the structure of and parties to the agreement. In Argos Ltd and Littlewoods Ltd, the Court of Appeal considered the following scenario to fall within the case law of the CJEU on concerted practice (see §141): “ The proposition which, in our view, falls squarely within the Bayer judgment in the ECJ and which is sufficient to dispose of the point in the present appeal can be stated in more restricted terms: if (i) retailer A discloses to supplier B its future pricing intentions in circumstances where A may be taken to intend that B will make use of that information to influence market conditions by passing that information to other retailers (of whom C is or may be one), (ii) B does, in fact, pass that information to C in circumstances where C may be taken to know the circumstances in which the information was disclosed by A to B and (iii) C does, in fact, use the information in determining its own future pricing intentions, then A, B and C are all to be regarded as parties to a concerted practice having as its object the restriction or distortion of competition. The case is all the stronger where there is reciprocity: in the sense that C discloses to supplier B its future pricing intentions in circumstances where C may be taken to intend that B will make use of that information to influence market conditions by passing that information to (amongst others) A, and B does so.” (9) Knowledge and foresight 45. The Commission submitted that, in order to find that an undertaking participated in an anti‑competitive agreement or concerted practice, it is necessary to prove that the undertaking concerned intended to

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V contribute by its own conduct to the common objectives pursued by all the participants and that it was aware of the actual conduct planned or put into effect by other undertakings in pursuit of the same objectives or that it could reasonably have foreseen it and that it was prepared to take the risk: AC‑Treuhand, §30; see also Anic, §87, and C‑204/00P etc Aalborg Portland and Others v Commission, EU:C:2004:6, §83. 46. In Case T‑82/13 Panasonic Corp v Commission, the cartel lasted for a number of years and had a number of facets, and the different actors took part in different forms of collaboration with each other. The question arose whether Panasonic by virtue of its participation in certain forms of coordination could be held liable for the single and complex infringement as a whole. The General Court held that the mere fact that each undertaking takes part in the infringement in ways particular to it does not preclude responsibility for the entire infringement, including conduct put into effect by other undertakings sharing the same anti‑competitive object or effect (see §80). Panasonic could be held liable if it was aware of the other undertakings’ anti‑competitive activities or it could reasonably have foreseen them (§82). 47. In Case C‑542/14 VM Remonts v Konkurences padome, ECLI:EU:C:2016:578, three firms responded to a Latvian municipal council’s call for tenders for food supply. One firm, Pārtikas, had independently prepared a draft tender but had instructed another company providing legal services to prepare a formal tender and submit it on its behalf. That company had, in turn, engaged a sub‑contractor, MMD lietas, to perform this task. Without the knowledge of Pārtikas, MMD lietas had also undertaken to prepare the tenders of other two firms, VM Remonts and Ausma. An employee of MMD lietas used the price information received from Pārtikas as

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V a basis in preparing the bids of VM Remonts and Ausma, so that Ausma’s bid was approximately 5% lower than the Pārtikas’s and VM Remonts’ bid was in turn approximately 5% lower than Ausma’s. On a reference by the Latvian Supreme Court, the CJEU held (at §33) that an undertaking may, in principle, be held liable for a concerted practice on account of the acts of an independent service provider if (i) the service provider was in fact acting under the direction or control of the undertaking concerned, (ii) that undertaking was aware of the anti-competitive objectives pursued by its competitors and the service provider and intended to contribute to them by its own conduct, or (iii) that undertaking could reasonably have foreseen the anti‑competitive acts of its competitors and the service provider and was prepared to accept the risk which they entailed. 48. Precisely what an undertaking needs to be aware of or to expect will depend on the facts and evidence of the particular case. In the case of disclosure of commercially sensitive information, the English Court of Appeal considered in Argos Ltd and Littlewoods Ltd that there may be a concerted practice where A discloses to B its pricing intentions in circumstances where A foresees B would make use of the information to influence market conditions by passing it on to C, and B passes the information to C in circumstances where C appreciates that the information is being passed to him with A’s concurrence (see §§91 & 141). 49. There has been some debate between the parties in this case as to the relevance of reasonable foreseeability of the conduct of other parties. The respondents submitted that the approach taken in AC‑Treuhand and Panasonic is not applicable in the present kind of case and that VM Remonts should not be followed. On the view that I have taken of the evidence, it is unnecessary to deal with this debate.

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C. STANDARD OF PROOF 50. The Commission accepts, in my view correctly, having regard to the well‑known Engel criteria6 and the pecuniary penalties that the Tribunal is invited to impose, that these proceedings involve the determination of a criminal charge within the meaning of Arts. 10 and 11 of the Bill of Rights.7 The parties are in dispute, however, as to whether the standard of proof to be applied in these proceedings is the criminal standard of proof beyond reasonable doubt or the civil standard of proof on the balance of probabilities. (1) The parties’ contentions 51. The Commission acknowledges that because the proceedings involve the determination of a criminal charge, proof beyond reasonable doubt is the starting point. It contends, however, that the civil standard of proof nevertheless applies. Its submissions may be summarised as follows. A criminal classification for the purpose of Art. 11 of the Bill of Rights does not make the case a criminal one for all purposes under all laws. The precise implications of the classification must be determined on a case by case basis: see Han v Customs and Excise Commissioners [2001] 1 WLR 2253, §§84 and

1. The applicable legislative rules indicate that these proceedings are

characterised internally as non‑criminal and that the rules of civil procedure should apply. Such internal classification and the application of civil procedure indicate that the legislature intended that the civil standard of proof

6 See Engel v The Netherlands (No 1) (1976) 1 EHRR 647 for the criteria, namely, (1) the classification of the offence under domestic law; (2) the nature of the offence; and (3) the nature and severity of the potential sanction. 7 Section 8 of the Hong Kong Bill of Rights Ordinance (Cap 383).

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V should apply. Applying the criminal standard might serve to frustrate the effective application of competition laws. The civil standard is applicable in other common law jurisdictions including Australia, Canada, New Zealand, Singapore and the UK, all of which (except Singapore) are state parties to the ICCPR. Application of the criminal standard of proof is not a “guaranteed” right under the Bill of Rights or ICCPR. Alternatively, if it is, then the application of the civil standard of proof in this particular case satisfies the proportionality test. 52. In contrast, the respondents contend that the criminal standard of proof should apply. Their submissions may broadly be summarised as follows. The Court of Final Appeal has decided in Koon Wing Yee that the criminal standard of proof is to be applied in proceedings involving the determination of a criminal charge under Hong Kong law, and that decision is binding on the Tribunal. There are legislative materials showing that the Administration’s intention was that the criminal standard should apply in proceedings where substantial pecuniary penalties were sought. In particular, SiS submitted that while it is in principle possible for the legislature to modify the standard of proof, any such modification must be prescribed by law and proportionate. Whether or not the legislature has in fact done so in a given case is a question of statutory construction governed by the principle of legality. The legislature has not modified the standard of proof in the Ordinance. (2) The requirement of Art 11 53. I begin with the question whether Art. 11 of the Bill of Rights requires the application of the criminal standard of proof. Art. 11(1), which is identical to Art. 14(2) of the ICCPR, provides:

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V “ Everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law.” 54. While Art. 11 does not expressly stipulate any mandatory standard of proof, authoritative guidance has been laid down in Koon Wing Yee v Insider Dealing Tribunal (2008) 11 HKCFAR 170 as to what it requires. In that case, the Court of Final Appeal considered the question whether, in an inquiry conducted under the Securities (Insider Dealing) Ordinance (Cap 395), the Insider Dealing Tribunal was obliged to apply the criminal standard of proof. In his judgment, in which the other members of the court concurred, Sir Anthony Mason NPJ recognised that it was not clear that Art. 6(2) of the European Convention on Human Rights mandated the criminal standard of proof.8 His Lordship however noted that the position is clearer under Art. 14 of the ICCPR because General Comment No. 13 on Art. 14 of the ICCPR, which was later replaced by General Comment No. 32, stated: “No guilt can be presumed until the charge has been proved beyond reasonable doubt”. 55. In Koon Wing Yee, the relevant General Comment was No. 13 because the acts of infringements were committed and the tribunal inquiry took place both before 2007, when General Comment No. 32 was published. Nevertheless the court had regard to this later version which it considered to be a reinforcement of the criminal standard. General Comment No. 32 (para 30) stated: “ According to article 14, paragraph 2 everyone charged with a criminal offence shall have the right to be presumed innocent until proven guilty according to law. The presumption of innocence,

8 In Revenue and Customs Commissioners v Khawaja [2009] 1 WLR 398, decided after Koon Wing Yee, Mann J specifically held that the civil standard of proof applied in the UK in tax penalty cases despite the fact that Art. 6(2) was applicable; see also R (on the application of V) v Independent Appeal Panel for Tom Hood School [2010] EWCA Civ 142 at §33. In Jussila v Finland (2007) 45 EHRR 39 at §43, the European Court of Human Rights recognised that the criminal‑head guarantees will not necessarily apply “with their full stringency” to all proceedings classified as criminal by reference to the Engel criteria but which do not fall with the “hard core of criminal law”.

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V which is fundamental to the protection of human rights, imposes on the prosecution the burden of proving the charge, guarantees that no guilt can be presumed until the charge has been proved beyond reasonable doubt, ensures that the accused has the benefit of doubt, and requires that persons accused of a criminal act must be treated in accordance with this principle …” 56. Sir Anthony Mason NPJ continued to state in Koon Wing Yee (footnote omitted): “ 101. The General Comments are a valuable jurisprudential resource which is availed of by the Committee in its adjudicative role. While the General Comments are not binding on this Court, they provide influential guidance as to how the ICCPR is applied and will be applied by the Committee when sitting as a judicial body in making determinations.

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Privy Council regarded General Comment No.13 as indicating that the standard of proof beyond reasonable doubt was the general standard applicable for the purposes of art.14 of the ICCPR and art.11(1) of the BOR. The judgment of the Privy Council delivered by Lord Woolf makes it plain that art.14 of the ICCPR and art.11(1) of the BOR permit a degree of flexibility which allows a balance to be drawn between the interest of the person charged and the state so that sensible and reasonable deviations in certain situations are not proscribed. Lord Woolf is not to be understood, however, as suggesting that the substitution of the civil standard of proof for the criminal standard of proof in a proceeding classified as criminal would be a sensible or reasonable deviation.

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No.13, in so far as it prescribed the standard of proof beyond reasonable doubt, as the appropriate standard to be applied for the purposes of art.11 of the BOR before it was replaced by General Comment No.32 (which then reinforced the application of that standard). In this respect, my view is strongly fortified by the fact that in our criminal jurisprudence proof beyond reasonable doubt is the standard to be applied once proceedings have been classified as involving the determination of a criminal charge.” 57. In the case before it, the Court of Final Appeal held that the criminal standard was applicable in the light of the criminal character of the proceedings which flowed from the presence of the power to impose the

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V penalty. Because it was impossible to say whether that standard had been applied by the tribunal, its findings were impaired. In the result, however, the Court held that the power to impose a penalty was invalid as being contrary to Arts. 10 and 11 of the Bill of Rights and, the reason for characterising the proceedings as criminal having been eliminated, the tribunal’s findings were reinstated and upheld. 58. In Attorney‑General of Hong Kong v Lee Kwong‑kut [1993] AC 951, the Privy Council had to consider whether certain statutory provisions creating offences9 were inconsistent with Art. 11 of the Hong Kong Bill of Rights in placing a burden of proof on the defendant. The parts of the judgment of Lord Woolf referred to by Sir Anthony Mason NPJ in Koon Wing Yee are as follows. At p 968B‑C, Lord Woolf, giving the advice of the Board, after quoting from General Comment No. 13, stated: “ However, it should not be assumed from this statement that the comparable article in the International Covenant to article 11(1) does not permit the degree of flexibility which is normally assumed to be implicit in any provision of general application which is of the same nature as article 11(1) of the Hong Kong Bill. Placing to one side for the moment the decisions in Canada all of the many decisions in different jurisdictions, to which their Lordships were referred, recognise that provisions similar to article 11(1) are always subject to implied limitations so that a contravention of the provisions does not automatically follow as a consequence of a burden on some issues being placed on a defendant at a criminal trial.” Further, at p 969D‑E, Lord Woolf stated: “ This implicit flexibility allows a balance to be drawn between the interest of the person charged and the state. There are situations where it is clearly sensible and reasonable that deviations should be allowed from the strict applications of the principle that the prosecution must prove the defendant’s guilt beyond reasonable doubt.”

9 Section 30 of the Summary Offences Ordinance (Cap 228) and s 25 of the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap 405).

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V 59. There was argument before this Tribunal on the scope of the “flexibility” referred to by Lord Woolf and in particular whether such flexibility extended to the standard of proof applicable to a case as a whole. Upon fuller consideration of matter, I do not think the debate is open in this Tribunal. It seems to me that the tentative view I expressed obiter in Television Broadcasts Ltd v Communications Authority [2016] 2 HKLRD 41 (at §§290‑295) that Koon Wing Yee could be distinguished, was wrong. The ratio decidendi of Koon Wing Yee, consisting in the essential logical steps in the reasons for the conclusion (Saif Ali v Sydney Mitchell & Co [1978] 3 All ER 1033, 1040h‑j per Lord Diplock), seems to me to encompass the proposition that the appropriate standard of proof to be applied to proceedings classified as criminal for the purposes of Art. 11 is proof beyond reasonable doubt. It precludes this Tribunal from adopting the civil standard where pecuniary penalties are sought and the proceedings are to be classified as involving a determination of a criminal charge. 60. Every case is of course decided in the context of its facts, but it is in my view not open to this Tribunal to distinguish Koon Wing Yee on the basis that it involved insider dealing as opposed to an infraction of competition law. It is true that in earlier passages in his judgment 10 Sir Anthony Mason NPJ had referred to insider dealing as an “insidious mischief”, “very serious misconduct” and “a species of dishonest misconduct”, but these were stated as considerations favouring the classification of the proceedings as criminal (see §50), rather than as factors distinguishing insider dealing, for the purpose of standard of proof, from other conduct classified as criminal for Art. 11 purposes. In any event, there are also forms of competition law infringement, such as cartels and bid-rigging, that are viewed

10 Koon Wing Yee at §§45 and 46.

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V as serious misconduct and punishable as actual criminal offences in other jurisdictions including Australia, Canada, the UK and the United States. 61. Subsequent cases have reinforced the approach that Koon Wing Yee mandates. In Ng Po On v HKSAR (2008) 11 HKCFAR 91 at §22, Ribeiro PJ stated “there is a clear basis for suggesting that [the criminal] standard of proof is implicit within Article 11(1) of the Bill of Rights”. 62. In Wong Tak Wai v Commissioner of Correctional Services [2010] 4 HKLRD 409, the Court of Appeal held that prison disciplinary proceedings with the potential result of loss of remission for a serving prisoner involved the determination of a criminal charge for the purpose of Art. 11 of the Bill of Rights. Applying Koon Wing Yee, the Court of Appeal held that proof beyond reasonable doubt was required by Art. 11; see §100 of Kwan JA’s judgment with which Stock VP and A Cheung J (as they then were) agreed. (3) Is there derogation from the criminal standard of proof by statute? 63. It is common ground that even if Art. 11 mandates the criminal standard of proof, this requirement is not absolute and can be deviated from by proportionate legislation. The difficulty with the Commission’s submission that a civil standard of proof applies to all elements of liability, however, is that the Ordinance is silent on this matter, in contrast with other statutes (such as ss 218(7), 252(7) and 387 of the Securities and Futures Ordinance (Cap 571)) that expressly prescribe for the civil standard. It is well established that the legislature will not be taken to have intended any derogation from fundamental rights absent express and unambiguous language or necessary implication: A v Commissioner of Independent Commission

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V Against Corruption (2012) 15 HKCFAR 362, at §§28‑29, 67‑71; R v Secretary of State for the Home Department, ex parte Simms & Anor [2000] 2 AC 115, 131E. A necessary implication is one which necessarily follows from the express provisions of the statute construed in the context; it is a matter of express language and logic, not interpretation: R (on the application of Morgan Grenfell & Co Ltd) v Special Commissioner [2003] 1 AC 563 at §45. 64. The fact that s 144 of the Ordinance provides for civil procedure to be adopted by the Tribunal “in so far as it thinks fit” is not an indication of legislative intent that the civil standard of proof should apply, because it is perfectly possible for the applicable standard of proof to be the criminal one notwithstanding the proceedings take a civil mode with civil rules of procedure, as in the case of contempt of court: see Secretary for Justice v Cheung Kai Yin [2016] 4 HKLRD 367, §§25, 27 and 36; In re B (Children) (Care Proceedings: Standard of Proof) (CAFCASS intervening) [2009] 1 AC 11. It is unnecessary to examine the Competition Tribunal Rules or the Tribunal’s Practice Directions for the requisite legislative intent cannot be derived from them. 65. So far as legislative materials are concerned, the respondents relied on the proceedings of the 17th meeting of the Bills Committee on Competition Bill held on 21 June 2011 where it was stated: “ The Administration pointed out that contravention of the competition rules under the Bill would be subject to civil actions. If a substantial pecuniary penalty was to be imposed on a breach of the competition law, the criminal standard of proof would apply and criminal safeguards would be attracted to the legal proceedings.”11

11 LC Paper No. CB(1)3059/10-11, Appendix, p 8.

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V The context was, however, a discussion of the territorial application of the first conduct rule so that the sentence relied upon appears to have been a side comment made during the discussion of a different topic. 66. Reliance was also placed by the respondents on a speech by the Under‑Secretary for Commerce and Economic Development at a competition law forum in December 2009, which referred to the decision of the Court of Final Appeal in Koon Wing Yee and expressed the view that the criminal standard of proof had to be applied to meet the requirements of the Bill of Rights. 67. I do not regard these materials as of much significance. Their admissibility is in doubt. While legislative materials may be admitted to show the context in which a law was enacted, there is no need to rely on these materials to show that the administration and the legislature were aware of the decision in Koon Wing Yee. Nor do these materials go to the mischief at which the law was aimed. Beyond these established limits I am unable to see how these materials shed any light on the will of the legislature: PCCW-HKT Telephone Ltd v Telecommunications Authority (2005) 8 HKCFAR 337, §20. (4) Nature of competition proceedings and overseas jurisprudence 68. The Commission submitted that having regard to the potentially complex and technical nature of competition proceedings it would not be appropriate to apply the criminal standard. Reliance was placed on what the (UK) Competition Appeal Tribunal said in Napp Pharmaceutical Holding Ltd v Director General of Fair Trading [2002] CAT 1 at §106: “ We add that in many cases under the Act the factual issues before this Tribunal will often relate to such matters as determining the relevant market, whether dominance exists, and assessing whether

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V conduct characterised as an ‘abuse’ is economically justified. Issues of that kind involve a more or less complex assessment of mainly economic data and perhaps conflicting expert evidence. It seems to us more likely that Parliament would have intended us to apply the civil standard of proof to issues of this kind, rather than the time‑honoured criminal standard of ‘proof beyond reasonable doubt’.” 69. The Commission submitted that requiring the criminal standard of proof to be applied “might serve to frustrate the effective application of the competition laws”. A similar concern has been raised in relation to the proof of contravention of the equivalent of our second conduct rule in Whish & Bailey, Competition Law (9th ed), p 215, as follows: “If every case were to require the demonstration of anti‑competitive foreclosure effects beyond reasonable doubt, the enforcement of Article 102 might become all but impossible, which would bring one back to the problem of false negatives and false positives.” 70. The Commission further submitted that the civil standard of proof is also uniformly applied (either as a result of express statutory provisions or judicial decisions) in other common law jurisdictions in relation to the imposition of pecuniary penalties for contravention of competition law: (1) In Australia, Part IV of the Competition and Consumer Act 2010 lays down a number of prohibitions, including against anti- competitive contracts, arrangements and understandings. 12 Section 76(1)(a)(i) empowers the court to impose a pecuniary penalty if a person has contravened a provision of Part IV (other than criminal cartel offences). The standard of proof for breach of the competition provisions (other than in relation to criminal

12 For a summary, see Miller’s Australian Competition and Consumer Law Annotated (39th ed, 2017), pp 353‑354, 358‑361, 371‑380, 603‑607 and 611‑612.

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V proceedings for cartel offences13) is the civil standard of balance of probabilities: see s 140 Evidence Act 1995; Heating Centre Pty Ltd v Trade Practices Commission 65 ALR 429 at 435. (2) In Canada, issues before the Competition Tribunal are determined according to the civil standard of proof.14 The Competition Act contains provisions dealing with abuse of dominant position (ss 78 and 79). The application of these provisions lies with the Tribunal, which has power inter alia to impose significant financial penalties. 15 (3) In New Zealand, Part 2 of the Commerce Act 1986 deals with “restrictive trade practices”, including “contracts, arrangements, or understandings substantially lessening competition” (s 27) and “cartel provisions” (s 30A). The court may impose pecuniary penalties in relation to restrictive trade practices (s 80). The applicable standard of proof is the civil standard (s 79A). (4) In Singapore, the Competition Act (Cap 50B) prohibits agreements or concerted practices which have as their object or effect the prevention, restriction or distortion of competition (section 34 prohibition) and also prohibits the abuse of a dominant position (section 47 prohibition). Section 69(2)(d) empowers the Singapore Competition Commission to impose a financial penalty for the infringement of a section 34 or 47 prohibition. The standard of proof is the civil standard of balance of probabilities: see Konsortium Express and Tours Pte Ltd & Others v Competition Commission of Singapore [2011] SGCAB 1, §85. This standard has been consistently applied to bid‑rigging cases: Pang’s Motor Trading v Competition

13 See ss 45AF and 45AJ. 14 See Musgrove, Fundamentals of Canadian Competition Law (3rd ed), p 17. 15 See Musgrove, Fundamentals of Canadian Competition Law (3rd ed), p 255.

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V Commission of Singapore [2014] SGCAB 1 §40, though the issue was not argued in either case. (5) In the UK, while it is accepted that a finding of competition law infringement involves the determination of a criminal charge, the settled view is that the applicable standard of proof is the civil standard of balance of probabilities: Napp Pharmaceutical Holding Ltd v Director General of Fair Trading [2002] CAT 1, §§101‑106; JJB Sports v Office of Fair Trading [2004] CAT 17, §193; Chester City Council v Arriva [2007] EWHC 1373 (Ch), §10. This applies equally to cases involving bid rigging.16 71. Article 14 of the ICCPR (the equivalent of Art. 11 of the Bill of Rights) has not prevented the courts in Australia, Canada, New Zealand and the UK, all being state parties to the ICCPR, from applying the civil standard of proof to competition cases. As far as Art. 6 of the European Convention on Human Rights is concerned, proof beyond reasonable doubt is not even a concept to be found in many of the domestic systems of the party states, or in the jurisprudence of the courts of the EU.17 72. For the reasons I have given above, however, in the absence of express provision or necessary implication by statute, this Tribunal is not at liberty to apply any other standard than proof beyond reasonable doubt. The matters relied upon by the Commission are therefore not matters that can justify the application of the civil standard of proof by this Tribunal.

16 Eg see Makers UK Ltd v Office of Fair Trading [2007] CAT 11 §46; GMI Construction Holdings Plc v Office of Fair Trading [2011] CAT 12 §14; and Durkan Holdings Ltd v Office of Fair Trading [2011] CAT 6 §94. 17 See the summary of the position in the courts of the EU in Television Broadcasts Ltd v Communications Authority & Anor [2016] 2 HKLRD 41 at §§283‑284. There are, however, statements by the EU courts referring to the principle “in dubio pro reo” and that the “benefit of … doubt must be given to the undertakings accused of the infringement” of competition law: Case C-89/11P E.ON Energie AG v Commission, §§71-74.

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V (5) Application of the applicable standard 73. It is not in dispute what the applicable standard of proof requires. I would mention two aspects here. First, the Commission has submitted, and I do not understand it to be controverted by any respondent, that it is not necessary for every item of evidence produced to satisfy the standard of proof in relation to every aspect of the contravention. It is sufficient if the body of evidence relied on, viewed as a whole, satisfies the burden: Case C‑407/08P Knauf Gips v Commission EU:C:2010:389, §47; Myers v R [2015] UKPC 40, §46. 74. Secondly, there is no dispute that this Tribunal can, like any other trier of fact, draw appropriate inferences from facts. As noted by the CJEU in Case C-204/00 Aalborg Portland v Commission, in many competition cases the existence of the practice or agreement in question has to be inferred: “ 55. Since the prohibition on participating in anti-competitive agreements and the penalties which offenders may incur are well known, it is normal for the activities which those practices and those agreements entail to take place in a clandestine fashion, for meetings to be held in secret, most frequently in a non-member country, and for the associated documentation to be reduced to a minimum. 56. Even if the Commission discovers evidence explicitly showing unlawful contact between traders, such as the minutes of a meeting, it will normally be only fragmentary and sparse, so that it is often necessary to reconstitute certain details by deduction. 57. In most cases, the existence of an anti-competitive practice or agreement must be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules.” 75. Equally clear is that where the criminal standard of proof applies, three conditions have to be satisfied for an inference to be drawn: (1) the inference must be grounded on clear findings of primary fact; (2) the inference

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V must be a logical consequence of those facts; and (3) the inference must be “irresistible”, that is, it must be the only inference that can reasonably be drawn on the basis of those facts: Winnie Lo v HKSAR (2012) 15 HKCFAR 16, §115.

D. THE FACTS AND EVENTS 76. This section sets out the background facts and the main events relating to YWCA’s tenders as found on the evidence. They are, for the most part, and unless otherwise specified, uncontroversial. (1) Nutanix’s hyper‑converged system 77. Founded in 2009 with its Hong Kong office established in December 2012, Nutanix is an IT infrastructure provider that sells “hyper‑converged infrastructure”. A hyper‑converged system is a new generation of servers. It is a software‑defined IT infrastructure that virtualizes all of the elements of the traditional “hardware‑defined” server system, including virtualized computing (a hypervisor), virtualized storage and virtualized networking, in a commodity hardware box. 78. Nutanix’s hyper‑converged system is a software product which can either be packaged and sold on Nutanix’s own branded hardware made by contract manufacturers, or on the tailored hardware of one of Nutanix’s OEM18 partners which included Dell and Lenovo at the time. These packaged

18 Original equipment manufacturer.

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V product combinations may be referred to as the Nutanix-NX solution, the Dell‑Nutanix solution and the Lenovo‑Nutanix solution respectively. The product can also be sold on a software‑only basis for use on compatible hardware provided by third party manufacturers. 79. Nutanix’s main competitors globally include traditional storage array vendors, traditional IT systems vendors which sell integrated systems, software providers such as VMware Inc, providers of public cloud infrastructure as well as a number of vendors which provide hyper‑converged infrastructure. (2) Nutanix’s supply chain 80. The Nutanix-NX solution is sold to end‑customers via Nutanix’s own network of distributors and resellers. In Hong Kong, as of July 2016, Nutanix had two non‑exclusive distributors, namely, Innovix and SiS, and around 23 approved resellers which were companies approved and authorised by Nutanix to re‑sell Nutanix products.19 Both BT and Tech‑21 were among these resellers. 81. Of the two distributors, Innovix mainly promoted and sold products to resellers, while it would also promote and sell to end‑users directly. SiS was permitted by its distributorship agreement to purchase Nutanix products for resale to both resellers and end‑users, but in practice it sold only to resellers and not directly to end‑users, with certain rare exceptions in special circumstances (see §291 below).

19 Innovix’s distributorship of Nutanix products has ceased since November 2017, but nothing turns on that.

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V 82. In Hong Kong, a reseller can only purchase the Nutanix-NX solution through a distributor, ie Innovix or SiS. For the Dell‑Nutanix or Lenovo‑Nutanix solution, the applicable hardware would have to be packaged with Nutanix software and then sold by the OEM partner, ie Dell or Lenovo, through its own sales teams or its network of channel partners, which may or may not also be channel partners of Nutanix. Dell or Lenovo would then pay Nutanix a royalty based on sales of Nutanix software as part of the combined product. In this particular case, as will be seen below, YWCA eventually purchased the equipment from a reseller of Dell. (3) Nutanix’s deal registration system 83. Nutanix runs a deal registration system to encourage its OEM partners, distributors and resellers to identify, cultivate and close sales opportunities. It allows business opportunities to be registered via an online platform with Nutanix who would provide discounted pricing exclusively for a specified period on the registered opportunity. Only one partner may register for each opportunity. Nutanix’s guidelines suggested that a deal registration could be granted to more than one partner for situations such as RFP20 or public sector requirements but this was considered non‑standard and an exception and required approval on a case‑by‑case basis. 84. With a deal registration in place, other interested partners are still free to pursue the opportunity and are generally entitled to a standard discount, but the registered deal discount is only available to the registered partner. In Nutanix’s published guidelines, the level of the registered deal discount is defined by the partner’s level and programme status in the Nutanix Channel Programme, product type and deal registration status, ranging between [●]%

20 “RFP” stands for “request for proposal”.

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V and [●]%. In practice, sales representatives are allowed flexibility to depart from the published levels. The actual registered deal discount is therefore a matter of discretion for the relevant sales representative on a case‑by‑case basis but generally does not exceed [●]%. 85. If the opportunity concerns solely a Nutanix-NX solution, it would either be the re‑seller registering for the opportunity or the distributor registering on behalf of the re‑seller. If the opportunity concerns a Dell‑Nutanix or Lenovo‑Nutanix product, Dell or Lenovo may register for the opportunity. 86. Upon receipt of a deal registration, Nutanix will validate the request which would include checking that there are no other active registrations for the same opportunity and that the partner is pursuing the opportunity in good faith. The registration, once recognised, will remain valid for 90 days, extendible at Nutanix’s discretion. 87. In the case of Dell‑Nutanix solutions or Lenovo‑Nutanix solutions, the integrated solution is sold by the OEM partner, i.e. Dell or Lenovo, directly, with a royalty paid to Nutanix. Where the OEM partner is registered with Nutanix for a particular opportunity, it may grant a discount to its channel partners of up to [●]% on the Nutanix component of the integrated solution, beyond which it will require special approval from Nutanix. (4) YWCA’s need for a new server system 88. In the first half of 2015, YWCA’s ISD was considering replacing the existing IT servers at YWCA Headquarters at MacDonnell Road, Mid‑Levels. The person responsible within YWCA for IT services was Lok,

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V the ISD Head. 89. At that time BT was working for YWCA on two other IT projects. One of them began in the third quarter of 2014, when BT was engaged to consult on a new Customer Relationship Management system to be used in YWCA centres. (For the implementation of the system, however, BT was outbidden by another company, though BT was later engaged to provide quality assurance checks on the implementation of that system in mid‑2015.) In the second project, BT was awarded a contract in March 2015 to set up an IT server room and to install the cables and Wi‑Fi routers for the YWCA Kowloon Centre in Ho Man Tin. In around the third quarter of 2015, BT was further awarded a contract to install the audio and visual equipment to be used at the YWCA Kowloon Centre, but this came later. 90. Percy Ng was the main person dealing with YWCA at that time. He was the Alliance & Business Development Manager of BT. His primary responsibility concerned the sales of BT’s IT products and services. Within his team, he was assisted by Chan, Technical Pre‑Sales Manager of BT. Percy Ng’s role was focused on more “commercial” matters involving pricing, customer relations, sales of products and internal BT approvals, whereas Chan was more concerned with the pre-sales technical matters such as the provision of technical support. 91. Whilst working on the server room project, Percy Ng enquired with Lok to see what server system YWCA intended to install in the server room in the Kowloon Centre and how the servers at YWCA’s Headquarters could support each other. Since YWCA also intended to replace the servers at the Headquarters, Lok asked for Percy Ng’s opinion and discussed with him YWCA’s server requirements. Percy Ng got Chan involved and together they

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V decided Nutanix’s cloud‑based server system would suit YWCA. In around mid‑2015 Percy Ng proposed to Lok that YWCA could consider using that system. 92. At around this time, between mid‑2015 and September 2015, BT registered the YWCA opportunity on Nutanix’s deal registration system. 93. In the initial stages BT was considering offering a Nutanix-NX solution to YWCA. On 28 July 2015, Chan sent an e‑mail to Siu (of Innovix) with the subject “YWCA quotation” for a quote based on Nutanix hardware. Siu in turn obtained quotes from Nutanix and, after a mark‑up, gave the quotes to Chan. When BT requested a lower quotation, Innovix provided a revised quotation but BT still complained (to both Innovix and Nutanix) that it was too expensive. On 5 August, after discussing with Chan, Hung wrote to Siu saying he would like to update him on the pricing strategy on YWCA. Shortly afterwards, Innovix provided another revised quote to BT for the equipment for YWCA. 94. At that stage, however, BT had not decided which Nutanix model to propose to YWCA. In late September 2015, Chan asked Hung for an update on which model BT should propose to YWCA. On 24 September 2015, Hung sent a bill of materials to Chan (copied to Siu and Cheung of Innovix) and stated the quotation was being prepared. 95. Following a meeting in early October 2015, BT considered the Dell‑Nutanix combination more suitable for YWCA having regard to their budget and storage configuration. YWCA’s ITDC (Information Technology Development Committee) also felt the Dell‑Nutanix solution would be better because they had confidence in Dell’s hardware and after‑sales maintenance.

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V 96. After further discussions, BT offered to arrange for the loaning of a Dell‑Nutanix hyper‑converged server to YWCA as part of BT’s “proof of concept” to test whether the server was capable of meeting YWCA’s needs. Such proof-of-concept exercise is common with clients making the switch from traditional IT infrastructure to hyper‑converged infrastructure. Three units of Dell‑Nutanix servers were later loaned (from Dell) to YWCA in late October 2015. 97. On 12 November 2015, Percy Ng and Chan delivered a presentation to YWCA’s ITDC to introduce the concept of a hyper‑converged system by using Nutanix’s system as an example. 98. On 5 January 2016, Cheung (Innovix) sent an e‑mail to Chan (BT) (copied to Siu) asking if there was anything else Innovix could do regarding “the Nutanix YWCA case”. Also in around early January 2016, Siu and Cheung learnt that YWCA’s preference had moved to a Dell‑Nutanix system. On 8 January 2016, Siu referred the YWCA matter to Innovix’s Dell team member Jacky Lee. 99. In late January or early February 2016, the deal registration for the YWCA opportunity was re‑registered with Nutanix through Dell. Dell registered it with reference to BT’s name, recognising that BT would derive some benefit of the deal registration for this opportunity. 100. BT helped YWCA with the proof-of-concept process, and also assisted Lok to deal with the queries that ITDC members had about the Nutanix system. On 7 January 2016, Eric Mak of Innovix was brought into the loop for the “p2v” troubleshooting (a physical‑to‑virtual process of migrating a physical server’s operating system, applications and data to a

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V virtual system). On 29 January 2016 Eric Mak forwarded an e‑mail chain to Siu from which it is clear that BT was conducting a proof-of-concept for YWCA. On 1 February 2016, Siu responded: “Ok, i will ask Dell HK order the OEM deal to us”. 101. While certain technical problems arose and various questions were raised by YWCA about the product and about Nutanix, the Dell‑Nutanix solution was eventually found to be suitable, and on 23 May 2016 the ITDC resolved that YWCA should procure Nutanix’s hyper‑converged system for Headquarters as well as for Kowloon Centre. ISD was to commence preparing for the procurement process. (5) YWCA’s procurement policy and procedures 102. Within YWCA, the APD (Administration and Procurement Department) is responsible for organising and overseeing the procurement of goods, services and works required by YWCA including through tender exercises. APD’s head was Mak, the Administration and Procurement Manager, who was assisted by Wong, an Assistant Procurement Officer. 103. Under YWCA’s procurement policy, contract for goods, services or works exceeding HK$50,000 must have written quotations from five companies. Procurement for goods exceeding HK$100,000, services exceeding HK$250,000 or works exceeding HK$500,000 must be conducted through a tender. Where the procurement involves a tender, the procurement decision must be approved by YWCA’s Tender Board, which is a sub‑committee of the FAC (Finance and Administration Committee). The Tender Board is composed of members from FAC, a member from the

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V relevant user department, and two Tender Board advisors selected from a list of external parties with relevant expertise. 104. The procurement policy required that at least five tender submissions be received from contractors or suppliers. If the requisite number of tenders is not obtained, approval from FAC and a report to YWCA’s board of directors are required before the contract can be awarded. (6) The first tender 105. Within YWCA, APD looked to ISD for preparing the technical specifications for the procurement exercise. ISD in turn received assistance from BT in preparing those specifications. Following discussions, Chan produced the first draft of the technical specifications which he sent to Lok on 10 June 2016. The specifications were for (i) Nutanix’s hyper‑converged system without specifying the brand of hardware to be used, together with (ii) hypervisors and (iii) backup software. At Lok’s suggestion, they had a meeting about the specifications on 16 June. 106. ISD then provided the revised draft technical specifications to APD, which prepared the other tender documents. On 20 June 2016, Wong e‑mailed Lok and his assistant, Li, the draft tender documents with a query on the technical specifications. Wong also asked Lok and Li to recommend suppliers for the purpose of completing the tenderers list. 107. Mak explained that this was on the basis that while it was APD that would make the final decision on which tenderers to invite, ISD was likely to have greater familiarity with the potential suppliers and was in a better position to ascertain the companies capable of supplying the server system.

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V 108. Li then made a call to Chan on the same day asking him to recommend the names of vendors in Hong Kong capable of supplying the Nutanix hyper‑converged system. Percy Ng then in turn sent a message to Hung saying he needed to provide vendors’ names for YWCA to issue the tender, listing six companies including BT and Tech‑21, and asked for Hung’s opinion. 109. As he was unable to reach Hung, Percy Ng decided to e‑mail to Li all the names of Nutanix’s suppliers that he knew, suggesting six companies including BT and Tech‑21 and mentioning four other companies that were on YWCA’s own suppliers list – a total of ten companies. 110. Li then gave this list to Lok. Based on the list, Lok sent a proposed tenderers list setting out those ten companies to APD for their consideration. 111. On 21 June, Hung asked Percy Ng: “Is it a dell Nutanix?” to which Percy Ng replied “yes”. Edward Yeung (Nutanix’s Managing Director – Hong Kong and Taiwan) suggested to Percy Ng that Expert Systems be removed from the list because they always “bugged” Nutanix for the best price. Percy Ng then asked Li to exclude Expert Systems. Hung also texted Percy Ng that morning, saying “I can assist to manage Tecg21 and basic bit” [sic]. Li then e‑mailed Wong (copied to Mak and Lok) asking him to exclude Expert Systems. Li later asked Wong to add one more company called ITRC. 112. With these revisions suggested by Li and additions made by Mak himself, the APD finalized a list of tenderers which included twelve companies. An invitation to tender was sent to them on 21 June 2016. The

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V twelve companies are as follows; they included BT and Tech‑21 but not

Nutanix, SiS or Innovix.

Afina Data Systems Ltd

Automated System Ltd

Basic Bit Technology Ltd

BT

HKT Ltd

ITRC

Microware Ltd

Nikoyo (HK) Ltd

Petabytes & Beyond Technology Ltd

Senco‑Masslink Technology Ltd

Tech‑21

Wafer Systems Ltd 113. Having received the invitation, on 21 June 2016 Chan wrote to his contacts in Dell, asking them for the latest quotation, with separate prices for product and maintenance items. 114. On 28 June 2016, after the tender deadline, it was found that only BT had submitted a bid while two other companies, namely, Basic Bit and ITRC, had written to YWCA to indicate that they declined to bid. (7) The second tender 115. In view of there being only one bid received, whereas YWCA’s procurement policy required at least five return bids, on about 30 June 2016, Gary Sze, Director of Finance and Administration of YWCA, together with Mak and Lok, decided to conduct a second tender for the Nutanix server system.

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V 116. In the next few days, in order to better organise the second tender, Mak and Wong contacted several of the companies which did not respond to the first tender to find out why they did not. The responses received included that the period for responding to the tender was too short, some of the mandatory items could not be supplied and that there were too many optional items listed. They passed on the feedback to Lok and asked him to prepare a new set of technical specifications for the second tender to make it easier for invitees to bid. 117. Quite a lot of activities took place on 5 July 2016, Tuesday: (1) At 09:20, Chan, who did not yet know the result of the first tender, texted to ask Lok whether there was any update on the first tender. (2) Lok telephoned Chan at 14:50 and they spoke for about six minutes. I find that in this conversation, Lok told Chan that the first tender failed because there were insufficient bids, that BT’s was the only bid, and that there would be a second tender. Lok did not positively deny this conversation; he only said he could not recall whether it was he or Li who told BT. In his first statement he said (at §18) that he told Chan on the phone. In this conversation Lok also asked Chan to provide names of companies who might be able to supply the equipment sought. (3) Chan called Hung at 15:37 and they spoke for ten minutes. In broad terms Chan and Hung agreed that Hung would get four friends of his who worked in Nutanix’s channel partners to submit bids in the second tender to make up the required minimum number of five. Chan asked Hung to provide him with

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V a list with contact details of the four bidders that day. What Chan and Hung agreed is dealt with in greater detail in section E below. (4) At 16:14, Chan sent Hung an e‑mail headed “YWCA tender docs” which set out in the body of the e‑mail the prices which BT proposed to include in its tender response. It also attached the tender documents sent out by YWCA. The e‑mail read: “ Hi Thomas, As discussed, attached is the tender spec document. This will change to just providing quotation for Nutanix HW and everything else like ESX license, Veeam license becomes optional so your friends don’t need to spend too much time on it. For our proposal, we are proposing the following the Dell XC630 model and price below. Anyway, once I finished the whole table, I will share it with you so you can give the quotation to your friend to just fill in. Thanks!” (5) At 16:22, Chan sent Lok an e‑mail stating: “ To make things simple, let’s get the quotation for Nutanix HW only and everything else becomes optional, e.g. ESX license, Veeam license, migration services etc. Also, please use the following updated spec for your new RFP HW requirement. Let’s catch up around 5 pm today to discuss further. Thanks.” The e‑mail further set out the technical specifications for the Nutanix server equipment, which were slightly different from those in the first tender. Since Lok was in a meeting, it is not clear whether he read the e‑mail at that time. (6) At 17:08 Chan texted Lok asking him to give him a call when he was free. At 17:15 Lok texted back saying he was still in a meeting and would call him once it finished. (7) At 18:18, Lok called Chan and they spoke for about 14 minutes. (8) At 18:56, Chan texted Hung, stating: “ Hi Thomas, please don’t forget to send me the list of vendors

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