DIRECTOR OF FOOD AND ENVIRONMENTAL HYGIENE v. THE LICENSING APPEALS BOARD & ANOTHER

HCAL41/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW

LIST NO. 41 OF 2003

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J U D G M E N T

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1. In this application, the Director of Food and Environmental Hygiene ("the Director") applies to judicial review the decision of the Licensing Appeals Board ("the Board") holding that it has jurisdiction to hear and deal with an appeal brought by Mr Wong Yim Fat ("Mr Wong") against the refusal of the Director to transfer a public market stall tenancy to Mr Wong.

FACTUAL BACKGROUND

2. In July 1999, the then Provisional Urban Council ("the Council") granted a three years tenancy to Mr Sham Ching Fai ("Mr Sham") in respect of market stall no. F25 ("the Stall") at Sai Ying Pun Market to commence from 1 August 1999. At the same time, the Council also granted to Mr Sham a permit to sell fish at the Stall. The Council had since then been abolished on 1 January 2000.

3. By an undated letter that reached the Director on 23 April 2001, Mr Sham gave notice of termination of his tenancy of the Stall with effect from 1 July 2001. In the same letter, Mr Sham recommended Mr Wong to take up the tenancy of the Stall. Mr Wong was said to have been working for Mr Sham for more than seven years, and was a registered assistant of Mr Sham at the Stall.

4. By two letters dated 18 May 2001 and 8 June 2001, Mr Wong applied to the Director to have Mr Sham's tenancy transferred to him. The application was refused by the Director, and the refusal was communicated to Mr Wong by a letter dated 12 June 2001. By another letter dated 11 September 2001, the Director further explained that the tenancy could not be transferred to Mr Wong in his capacity as a registered assistant and Mr Wong was advised to appeal to the Municipal Services Appeals Board ("the MSAB") if so desired. The letter pointed out at the same time that this is not indicative of the chances of the appeal being successful.

5. Mr Wong did appeal to the MSAB and his appeal was dismissed. By letter dated 5 October 2001, the Director notified the 2nd respondent to vacate the Stall. The Stall was repossessed on 12 October 2001.

6. On 10 October 2001, the Federation of Hong Kong Kowloon New Territories Hawker Association lodged an appeal on behalf of Mr Wong against the Director's refusal to transfer the tenancy. By a letter dated 28 August 2002, the Secretary of the Board informed the Association that the Board did not have power under the law to deal with the appeal and gave reasons for the view.

7. On 18 September 2002, Mr Wong himself lodged an appeal with the Board against the Director's refusal. The Board received submissions from the Director and also obtained independent counsel opinion on the issue of whether it has jurisdiction to entertain Mr Wong's appeal. At the hearing on 21 January 2003, the Board ruled that it had jurisdiction to hear and deal with the appeal. The Reasons for the Ruling was handed down on 29 January 2003.

8. On 24 April 2003, the Director commenced the present proceedings. Leave to judicial review was granted on 29 April 2003. The Notice of Motion was filed on 9 May 2003. Pending the determination of the application, the Board had adjourned the appeal of Mr Wong sine die.

THE RELIEF SOUGHT

9. In this application, the Director seeks the following relief :

(1)	A declaration that the Board erred in law in ruling that it has jurisdiction to hear and deal with Mr Wong's appeal against the Director's refusal;
(2)	An order of certiorari to remove into the High Court and quash the said decision of the Board;
(3)	An order of mandamus requiring the Board to dismiss Mr Wong's appeal to the Board against the Director's refusal; and
(4)	An order for costs.

THE BOARD'S DECISION

10. In concluding that it has jurisdiction over Mr Wong's appeal, the Board has accepted the legal opinion of its counsel, a copy of which was annexed to the Board's written reasons. In a nutshell, the Board's counsel adopted a purposive approach in construing sections 125(8) and (9) of the Public Health and Municipal Services Ordinance, Cap. 132 ("the Ordinance"), under which the Board is empowered to deal with appeals on cancellation, suspension and application for the grant or renewal of any "registration, licence or permit". The Board's counsel concluded that "registration, licence or permit" was wide enough to cover the tenancy of the Stall granted to Mr Sham. He also questioned the legal status of Mr Sham's tenancy, doubting whether it was in its true nature a tenancy as opposed to a licence.

11. The Board further observed that prior to the abolition of the Council on 1 January 2000, an intended transferee of a public market stall, such as Mr Wong, could apply to the Review Select Committee to review the decision of the licensing authority. The Board was concerned that with the abolition of the Council, hence the Review Select Committee, an intended transferee would be left with no redress if the Board did not have jurisdiction to hear the appeal against the licensing authority's decision. The Board endorsed its counsel's opinion that the legislature could not have intended to deprive an aggrieved person of an avenue of appeal or review.

THE DIRECTOR'S GROUND FOR JUDICIAL REVIEW

12. The Director contends that the board commits an error of law in asserting jurisdiction. It challenges the Board's interpretation of its power under sections 125(8) and (9) of the Ordinance and its view that an intended transferee of a market stall tenancy had a right of appeal to the Select Review Committee before 1 January 2000. Mr Kwok who appears for the Director at the hearing additionally submits that the tenancy granted to Mr Sham is a lease and therefore falls outside the scope of sections 125(8) and (9) of the Ordinance.

13. The central issue in this application is whether appeals relating to public market stall tenancy falls within the jurisdiction of the Board. This in turn involves the statutory construction of the provisions in the Ordinance as well as the Public Markets Regulation made thereunder.

THE RELEVANT LEGISLATIONS

(1) Public Health and Municipal Services Ordinance

14. Prior to the enactment of the Provision of Municipal Service (Reorganization) Ordinance (Ordinance No. 78 of 1999) on 4 December 1999, section 125 of the Ordinance provides, inter alia, as follows:

"125. General provisions as to licences, etc.

(1) Where, under the provisions of this Ordinance, any public officer (referred to in this section as the licensing authority) is empowered to require registration or to grant any licence or permit, such registration, licence or permit, as the case may be, shall, subject to the provisions of this Ordinance and any regulations made thereunder -

(a)	be made, granted or renewed subject to such requirements, conditions or restrictions as the licensing authority may think fit to impose for the purpose of carrying out the objects of this Ordinance, and may, for the like purpose, include a declaration by the licensing authority waiving the application of any of the provisions of any regulation made under this Ordinance;
(b)	be refused, suspended or cancelled at the sole discretion of the licensing authority for the purpose of carrying out the objects of this Ordinance, but no registration, licence or permit shall be suspended or cancelled for any cause other than the contravention of any of the provisions of this Ordinance or of any requirement, condition or restriction to which such registration, licence or permit was subject.

(1A) ...

(1B) ...

(2) ...

(3) Subject to the provisions of any regulations made under this Ordinance, every registration, licence or permit shall be transferable.

(4) ...

(5) ...

(6) ...

(6A) ...

(7) ...

(8) Where any registration, licence or permit is cancelled or suspended, or any application for the grant or renewal thereof is refused, by the licensing authority, the licensing authority shall forthwith serve a notice in writing upon the holder thereof or applicant therefor, as the case may be, declaring its decision.

(9)	(a)	If any person is dissatisfied with any decision referred to in subsection (8), he may, within 14 days after the service upon him of the notice declaring the same, apply in writing to the licensing authority for review, and the licensing authority may before determining the application -
		(i) cause such investigation to be made as may in the circumstances appear to be necessary; and
		(ii) if it thinks fit, appoint a place, time and day for hearing the application.
	(b) ...
	(c) ...
	(d) ...

(10) If any person is dissatisfied with the determination of the licensing authority upon review under the provisions of subsection (9), he may, with 14 days after notification by the licensing authority of such determination, appeal -

(a)	where the licensing authority is the Urban Council or the Regional Council, to the Appeals Board; and
(b)	in any other case to the Governor in Council by way of petition, and the decision of the Governor in Council shall be final.

(11) ..."

15. On 4 December 1999 Ordinance No. 78 of 1999 was enacted. By section 7, section 125(9) and (10) of the Ordinance were replaced by the following :

" (9) A person dissatisfied with a decision referred to in subsection (8) may, within 14 days after the service on him of the notice declaring the decision, appeal to the Licensing Appeals Board established under section 125A against the decision.

(10) If an appeal is made under this section, the licensing authority may, in its discretion, suspend the operation of the decision to which the appeal relates, pending the determination of the appeal."

16. Sections 125A and 125B were further added to the Ordinance by section 7 of Ordinance No. 78 of 1999. Section 125A establishes the Board, and section 125B sets out the functions and powers of the Board and provides for appeals from its decisions. In particular, section 125B(1) and (4) provide that :

" (1) The function of the Board is to hear and determine any appeal which lies to the Board under section 125.

(2) ...

(3) ...

(4) A person who appeals to the Board, if dissatisfied with the decision of the Board may appeal to the Municipal Services Appeals Board within 14 days after receiving notice of the decision."

17. The amendments to sections 125(9) and (10) of the Ordinance have the effect of removing the right to apply for a review of the licensing authority's decision. The power to review was previously delegated by the licensing authority to the Review Select Committee. Under the new section 125(9), an aggrieved person will have to appeal against the licensing authority's decision to the Board, which is created by the new section 125A. He can no longer apply for a review of the decision before bringing an appeal.

(2) Public Markets Regulation

18. Under section 80(1) of the Ordinance, the Authority (meaning the Secretary for Health Welfare and Food) may make regulations in relation to, inter alia, public markets. In particular, section 80(1)(a) enables it to make regulations providing for "the grant by lease, licence or permit to any person, or any group or class of persons, of the right to possess or to use shops, stalls, sheds, pens or standings therein".

19. Pursuant to section 80(1), the Public Markets Regulation ("the Regulation") was enacted. Sections 5 and 6 of the Regulation provide as follows :

"5. Business restricted to stall tenants

(1) No person shall carry on any business in a public market unless he -

(a)	is the tenant of a stall or the authorized servant or agent of such a tenant;
(b)	is the legal personal representative of such a tenant or the authorized servant or agent of such legal personal representative; or
(c)	has the permission in writing of the Director.

(2) No person shall occupy any stall unless he is the tenant of that stall.

6. Letting of market stalls

The Director may let any stall to any one person at such rent and subject to such terms and conditions as he may determine."

20. By section 7 and schedule 3 of Ordinance No. 78 of 1999, section 80(1) of the Ordinance was amended by adding a subsection (aa), which enables the Authority to make regulations providing for "an appeal to the Municipal Services Appeals Board against a decision to terminate a grant, lease, permit, or decision to adjust the rent of a shop, stall, shed, pen or standing referred to in paragraph (a)".

21. By section 634 of Ordinance No. 78 of 1999, section 6A was added to the Ordinance. Section 6A reads as follows :

"6A. Appeals

A person to whom a shop, stall, shed, pen or standing is let under section 6 may appeal to the Municipal Services Appeals Board against any decision of the Director to terminate the lease, licence, permit or to adjust the rent, within 30 days of the notice of termination or adjustment."

22. It is important to note firstly, that before the enactment of section 6A, there was no right of appeal under the Regulation. Secondly, under section 6A, the right to appeal to the MSAB is only given to a tenant of the Director and only in relation to the termination of the grant or adjustment of rent. Effectively, an intended transferee of a market stall tenancy such as Mr Wong has no entitlement to invoke section 6A. In short, under the Regulation, an intended transferee of a market stall tenancy has no right of appeal, whether before or after the enactment of Ordinance No. 78 of 1999 and the abolition of the Council.

THE BOARD'S JURISDICTION

23. There can be no doubt that by virtue of section 125B(1) of the Ordinance, the Board's jurisdiction is confined to appeals brought under section 125(9) in respect of decisions referred to in section 125(8) of the Ordinance. Section 125(8) refers to decisions to grant, renew, suspend or cancel "registration, licence or permit". In order that the Board can have jurisdiction over Mr Wong's appeal, it must be demonstrated that the tenancy granted to Mr Sham is a "registration, licence or permit" within the meaning of section 125(8).

24. "Registration, licence or permit" are not defined in the Ordinance. The nature and legal effect of Mr Sham's tenancy is relevant to whether it comes within section 125(8) of the Ordinance. In this regard, it is necessary to look at the terms and provisions of the Tenancy Agreement dated 27 July 1999 made between the Council and Mr Sham, which is a standard form document. In the case of Chan Shu Hung (陳樹雄) v. Director of Food & Environmental Hygiene (unreported) Municipal Services Appeal No. 35 of 2000, Cheung J (as he then was), sitting as the Chairman of the Municipal Services Appeal Board, proceeded on the basis that such tenancy is a lease. In my view, the Tenancy Agreement between the Council and Mr Sham bears all the hallmarks of a lease. In particular, clause 4 of the Tenancy Agreement prohibited Mr Sham from assigning, sub-letting, transferring, or otherwise parting with the benefits or obligations of the agreement. By contrast, section 125(3) of the Ordinance provides that every registration, licence or permit covered by section 125, subject to the Regulations enacted under the Ordinance, shall be transferable. I am unable to see any basis for regarding the Tenancy Agreement to be in the nature of a licence rather than a lease. Although "registration, licence, permit" are general terms capable of encompassing a wide range of matters, I am of the view that a market stall tenancy does not come within them.

25. In arriving at the view that a market stall tenancy, such as that granted to Mr Sham, is a "registration, licence or permit" within the meaning of section 125 of the Ordinance, the Board's counsel considered that the Regulation did not truly reflect the intention of section 80(1)(a). It was said that while the empowering section, namely, section 80(1)(a), refers to grant by lease, licence or permit, section 6 of the Regulation is confined to letting, hence a grant by tenancy. Similarly, it was also said that section 6A of the Regulation is unduly restrictive in that the right to appeal is only given to a person to whom the Director has made a grant by letting.

26. The Board's counsel further considered that prior to the abolition of the Council, an intended transferee such as Mr Wong did have a right of appeal. Given that the preamble of Ordinance No. 78 of 1999 provides that the Ordinance is to, inter alia, transfer the functions of the Council to other bodies, including the Board, the legislature could not have intended that an intended transferee would be deprived of a right of appeal. On these bases and adopting a purposive approach to statutory interpretation, the Board's counsel concluded that "registration, licence or permit" under section 125(8) of the Ordinance extend to include a public market stall tenancy.

27. In my view, the reasonings of the Board's counsel fall into error in two respects. Firstly, in respect of section 80(1) of the Ordinance, it is an empowering section. The Authority may make regulations on any of the matters set out therein. But the Authority is not bound to make regulations to deal with any or all of the matters prescribed in section 80(1). Accordingly, although section 80(1)(a) refers to grant by lease, licence or permit, the Authority is not obliged to make regulations to enable the right to possess or use market stalls and so on to be granted by lease, licence and permit. In providing that the Director may let market stalls at such rent and on such terms as he shall determine, section 6 of the Regulation cannot be said to have failed to reflect the intention of section 80(1)(a) of the Ordinance. Similarly, when section 80(1)(aa) of the Ordinance empowers the Authority to make regulation providing for a right to appeal against a decision terminating a grant, lease or permit, it does not mean that a right of appeal is to be given to people other than the tenants. Section 6A of the Regulation cannot therefore be said to have been restrictive in terms of the right to appeal.

28. Secondly, the Board's counsel was heavily influenced by the consideration that an intended transferee of a market stall would have no redress after 1 January 2000, if section 125(8) of the Ordinance does not extend to cover a market stall tenancy. As noted above, before the addition of section 6A to the Regulation, the Regulation did not provide for a right to appeal against decisions on the grant or termination of a market stall tenancy. With or without the enactment of Ordinance No. 78 of 1999 and the abolition of the Council, an intended transferee in the position of Mr Wong has no right to appeal against the Director's decisions relating to market stall tenancies. The Board's Counsel therefore proceeded on false premises when he considered that the legislature, in the absence of express language, could not have intended to deprive an intended transferee of his right of appeal.

29. To the extent that the Board had adopted the opinion of its counsel and was of the view that an aggrieved unsuccessful intended transferee of a public market stall had a right to appeal or review prior to 1 January 2000, the Board was also acting on false premises. The Board similarly erred in concluding that the legislature could not have intended to deprive an aggrieved intended transferee an avenue of appeal or review.

30. Plainly on matters relating to public market stall tenancies, the right to appeal and the mechanism of appeal are regulated by regulations made under section 80(1)(aa) of the Ordinance, hence section 6A of the Regulation. The reference to section 125 of the Ordinance cannot be sustained. The Board therefore erred in law in holding that it had jurisdiction to hear and deal with Mr Wong's appeal against the Director's refusal to transfer Mr Sham's tenancy to him.

31. Mr Wong in his submissions referred to the policy of the Council to permit, on a discretionary basis, transfer of market stall tenancy to a registered assistant who had worked for the tenant of the stall for five years or more. Mr Kwok accepted that a resolution on the policy had been passed by the Council on 15 December 1999 but pointed out that with the abolition of the Council, the resolution had lapsed and did not find its way into any legislations. In short, the policy referred to by Mr Wong does not have the status of law and cannot confer a right of appeal on Mr Wong. Neither can the policy provide the basis for the Board to hear and deal with Mr Wong's appeal.

32. For the reasons set out above, the Board committed an error of law in arriving at its decision that it had jurisdiction over Mr Wong's appeal. Accordingly, the Director's application for judicial review is allowed. I grant the declaration and orders of certiorari and mandamus sought by the Director.

COSTS

33. The Director applies for costs of these proceedings against Mr Wong. Costs is a matter of discretion. Although Mr Wong did appear at the hearing and had, understandably, opposed the judicial review application, Mr Wong had not filed any evidence in opposition nor raised any substantial argument. His appearance did not in any way lengthen or complicate the hearing or the application. Additionally, as Mr Wong pointed out, the dispute over jurisdiction that leads to this judicial review proceedings is primarily one between the Director and the Board. I consider that the circumstances of this case justify a departure from the general rule of costs follow event. Accordingly, I order that there be no order as to the costs of these proceedings.