CHAN YIK TUNG v. THE HONG KONG HOUSING AUTHORITY

H.C.M.P. No. 2111 of 1989

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

--------------

---------------------

D E C I S I O N

----------------------

1. The applicant is a licensed cooked food hawker. In April 1988, the Hong Kong Housing Authority gave him a three years' tenancy of Cooked Food Stall No. 5 in the Tung Tau Market. Under his Tenancy Agreement, user of Stall No. 5 was restricted to the selling of "Rice with Siu Mei/Lo Mei". The applicant also signed an undertaking to abide by that restriction.

2. Clause 4(a) of that Tenancy Agreement empowered the Hong Kong Housing Authority to terminate his tenancy for any unauthorized user. Clause 4(b) allowed the Hong Kong Housing Authority to put an end to the tenancy by the service of a three months' notice to quit.

3. The applicant is said to have been guilty of blatant and persistent disregard of the user restriction by selling "Dim Sum". The Hong Kong Housing Authority complained of continuing breaches of the restriction but elected not to terminate the tenancy under Clause 4(a) but under Clause 4(b). Service of the three months' notice to quit under Clause 4(b) was motivated by the applicant's defiance of the term for restricted user.

4. The applicant has given a further undertaking to unconditionally deliver up vacant possession of the Stall to the Hong Kong Housing Authority without compensation "whenever the tenancy is terminated for whatever reason".

5. After the applicant was duly served with a notice to quit, he lodged his appeal to the Tenancy Appeals Committee. The Tenancy Appeals Committee sat in July and the notice to quit was confirmed after deliberation.

6. Pursuant to leave granted, the applicant now moves this court for judicial review. The only ground in support of the application is a complaint that both the Hong Kong Housing Authority and its Tenancy Appeals Committee took into account an irrelevant consideration in reaching their respective decision as to whether or not to issue or confirm the notice to quit. The matter alleged to have been wrongly relied upon is "that there would possibly be investigations and/or intervention by ICAC should no action be taken by the Hong Kong Housing Authority".

7. This case is not simply concerned with an exercise of a contractual right by a statutory body. The notice to quit was served expressly under a section of the Housing Ordinance with reference to Clause 4(b) of the Tenancy Agreement. The section resorted to is section 19(1)(b) which reads as follows:

"19(1) Notwithstanding the terms thereof, the authority may terminate any lease-

(b) otherwise, by giving such notice to quit as may be provided for in the lease or 1 month's notice to quit, whichever is the greater."

What is being sought to be reviewed is, therefore, an exercise of a statutory power by the Hong Kong Housing Authority and a further exercise of a statutory power by its appointed Committee sitting in a tenancy appeal.

8. On these allegations, both the Hong Kong Housing Authority and its appointed Committee may be said d to have laid themselves open to the criticism that an error going to jurisdiction was committed. The Hong Kong Housing Authority and its appointed Committee may thus be accused of having acted in excess of jurisdiction and their respective decision to issue or confirm the notice to quit is arguably a nullity. See Anisminic Ltd. v. Foreign Compensation Commission [1969] 2 A. C. 147 at p.p. 171 Letters D/E, 195 Letter C and 210 Letters D-F.

9. Broadly speaking, when a tribunal makes an error in law in matters exclusively reserved for its determination, there will be no room for curial intenvention. An ouster clause is often the primary source for testing whether or not the tribunal's decision is immune from judicial review. Evidently, each case must be judged on its own facts. One of the core issues in this application is whether the Court's ordinary jurisdiction to supervise has been excluded. At the hearing of this motion, by consent the respondent took this as a preliminary point with reference to S.19(3) of the Housing Ordinance which is set out below:

"19 (3) No court shall have jurisdiction to hear any application for relief by or on behalf of a person whose lease has been terminated under subsection (1) in connection with such termination."

The language is reasonably clear. The sub section seeks to deprive a tenant of his right of recourse to the courts after his tenancy has been terminated by, inter alia, a notice to quit of the Hong Kong Housing Authority. Shortly put, the question which falls to be decided is whether s.19(3) has displaced the courts' ordinary jurisdiction in granting judicial review.

10. An exclusionary provision in a statute has been differently termed. It is called an ouster clause, privitive clause, finality clause or preclusive clause.

11. There may be a special need for decisions of a tribunal, judicial or quasi-judicial alike, to be completely divorced from any challenge or review. I use the word "tribunal" loosely to signify all bodies amenable to judicial review. For the purpose of achieving this aim, the legislature has been known to engage several drafting techniques. It may clothe the tribunal with a wide discretion, particularly for decisions of high policy content, which are best left to the administrative out in the field.

12. An ouster clause is couched at other times in subjective terms, for instance, "when the Tribunal is satisfied", "where it appears to the Tribunal", "in its opinion", "has reasonable grounds to believe" or "may consider necessary". See also Anisminic Ltd. supra. p.209 Letters F-H. Such an attempt has met with little success mainly because of the recent judicial tendency to intervene under the further developed doctrine of ultra vires. See Associated Provincial Picture Houses Ltd. v. Wednesbury Corp. [1948]1 K.B. 223.

13. An enactment may prefer to assign or commit specific questions solely to a designated tribunal with a view to avoiding, by necessary implication, the courts' supervisory jurisdiction. See South East Asia Fire Bricks Sdn. Bhd., v. Non-metallic Products Manufacturing Employees Union, [1981] A.C. 363 373'Letters D/E, where the reliance on the opinion of the Attorney General was held to have kept "questions.......away from the ordinary courts". See also Wordward's Estate (Executor) v. Minister of Finance, (1972) 27 DLR (3d) 608 for the provision: "any determination of the Minister made under this subsection is hereby ratified and confirmed and is binding on all parties."

14. Another attempt at exclusion is to make the decisions of a tribunal final, unquestionable, unchallengeable, unappealable or beyond review.

15. The legislature has also tried to be more explicit by using privitive words to ensure that there would be no appeal, no review or certiorari. It may even confer on the decision a status of legislation, such as "as if enacted".

16. Stronger exclusionary formulae are found in legislation touching upon declarations on matters of State, acts of State, extradition or parliamentary practices. See de Smith's Judicial Review of Administration Action, 4th Edn., p.371.

17. In order to induce the Judiciary to be more receptive, law-makers often propose a partial exclusion restricted to selected pockets in a host of chores assigned to the tribunal. See Wade on Administrative Law 6th Edn., p.731 and an article "The Limits of Judicial Review" by Mr Ferguson in The Scots Law Times, 2nd October 1987, 306 (the last paragraph in the Left Hand Column at p.307 and the ending paragraph at p.309).

18. It would seem that the formulation of time-limited ouster clauses to immunize decisions after a set period has proved to be more palatable to the Judiciary. This device was first introduced in England in 1930 in her housing legislation for greater flexibility. See Wade p.733. It was extended to areas in which any re-opening of the countless administrative decisions would likely dislocate or frustrate a government policy or a communal project, necessitating e.g. suspension of the construction of a housing estate, diversion of a trunk road, modification of a tunnel or adjustment of an underpass at enormous public expense. An individual or isolated error could ill-afford to be freely tested in matters within the policy-making perogatives of the executive.

19. But in his "The Limit of Judicial Review" supra at p.307 Left Hand Column, Mr Ferguson assailed the lack of justification for according different treatment to total ouster clauses on the one hand and partial ouster clauses on the other : "It is unclear", he submitted, "why the fact that a statute allows for a statutory appeal in respect of some errors but not for all errors should eo ipso exclude the Court of Session's common law jurisdiction to review any error which takes the administrative body outside the limited jurisdiction."

20. Ouster clauses with a time element has been introduced to legislation for housing, town and country planning, compulsory acquisition/purchase. See de Smith 4th Edn. p.372; Wade 6th Edn. p.733 et seq. It has been regularly deployed in labour legislation in Australia.

21. I have not been able to find a provision comparable to s.19(3) of our Housing Ordinance. An infinite variety of exclusionary clauses have appeared in widely-ranged enactments : "shall be determined by the Minister" in Healey v. Minister of Health, [1955] 1 Q.B. 221; "binding and conclusive" in A.G. v. Hanwell U.D.C. [1900] l Ch. 51; "shall be conclusive for all purposes", "final", "final and conclusive"; "conclusive evidence" in Ex p. Ringer, (1909) 73 J.P. 436; "shall not be questioned by prohibition or certiorari or in any legal proceedings", "shall not be questioned in any court of law" in Anisminic v. Foreign Compensation Commission supra; "shall not questioned in any legal proceedings whatever" in the Housing Act 1930, section 11; "shall not be subject to appeal or liable to be questioned in any court" in the Interception of Communications Act, 1985, section 7(8); "shall not be subject to appeal or review in any court" in the British Nationality Act, 1948 section 26 in A.G. v. Ryan, [1980] A.C. 718; "no judgment or order ..... nor any proceedings ..... shall be removed by appeal, motion, certiorari or otherwise into any other court whatsoever ...." in the County Courts Acts 1959, s.107 in R. v. Hurst, ex parte Smith, [1960] 2 Q.B. 133; "shall be final and conclusive for all intents and purposes" in the Licensing (Consolidation) Act, 1910 section 29(1) in Piper v. St. Marylebone Licensing Justices, [1928] 2 K.B. 221; "shall be final and conclusive, and no award shall be challenged, appealed against, reviewed, quashed or called in question in any court of law" in the Industrial Relations Act, 1967 in South East Asia Fire Bricks v. Non-Mettallic Products, [1981] A.C. 363; "sole and exclusive jurisdiction to hear and determine all questions of fact and law, including questions of jurisdiction" in the Pringle v. Fraser, (1972)26 DLR (3d)28; "no civil proceedings shall be brought against any person in any court in respect of any such act without the leave of the High Court" in Ex parte Waldron, [1986] Q.B. 824, where the term "civil proceedings" was also held not to include judicial review. This is by no means an exhaustive list.

22. All ouster clauses must be construed strictly. See Anisminic v. Foreign Compensation Commission, supra p.170 Letters C/D per Lord Reid. There are sound reasons for the courts' ordinary jurisdiction to supervise by judicial review to be jealously guarded. This has been described as the "constitutional fundamentals" by Professor Wade in his article "Constitutional and Administrative Aspects of the Anisminic case" (1969)85 LQR 198 at p.200. Without which, the tribunal could be made a law unto itself. It would virtually become a potential dictator with uncontrollable given jurisdiction, and the personalities presiding it would become sole judges of the validity of their own decisions. That, needless to say, is repugnant to a coherent legal system. It is therefore a cardinal principle that the courts' ordinary jurisdiction to review should not be whittled down except by clear and comprehensive language. However, it would seem that the courts would more readily accept a time-limited ouster clause than an absolute one. See p. 733, 737 of Wade's Administrative Law 6th Edn. A probable explanation is that being analogous to provisions in a statute of limitation, time-limited ouster clauses would not likely draw as much hostility from the Judiciary.

23. Except for ouster clauses to become operative after a period of time, I have not been able to find any decided cases since or immediately before Anisminic, where the courts were prepared to respect a purported decision made in excess of jurisdiction.

24. Even the validity of a time-limited ouster clause taking effect after the expiration of a period has been criticized by Mr Ferguson at p.306 of his article "The Limit of Judicial Review" as somewhat lacking in legal justification. Appropriate time-limited ouster clauses are nevertheless still being upheld in England. In Smith v. East Elloe R.D.C., [1956] A.C. 736, an ouster clause subject to a time limit was accepted as "a complete statutory code for regulating the extent to which, and the conditions under which, courts of law might be resorted to for the purpose of questioning [its] validity". In Smithy a compulsory purchase order was made unchallengeable after the expiration of a period of 6 weeks. It was sought to be quashed after the period on the grounds that the order had been made wrongly and in bad faith, but the validity of time-limited ouster clauses was affirmed. Smith was applied by the English Court of Appeal in R. v. Secretary of Estate for the Environment, ex p. Ostler, [1977] Q.B. 122. It had been followed earlier in Routh v. Reading Corporation, (1970) 217 E.G. 1337. Smith has not been overruled. Subject to criticism, this string of cases seem to represent the law in England as it is to-day.

25. Mr Ferguson finds Smith and Ostler irreconcilable with the concept enshrined in the Anisminic decision. Also out of tune with Smith and Ostler was a rejection of a time-limited ouster clause in Scotland in 1984. See MCDaid v. Clydebank District Council, 1984 S.L.T. 162, where it was held that the notice under consideration was a nullity and consequently the court's jurisdiction was not excluded. However, no reference was made to the English case, Smith. At p.167, the following observation was made :

"Having breached their duties, they cannot .... seek to take advantage by reason of that breach, of an alleged finality or exclusion clause in their favour, a clause which is only effective when compliance with a statutory code has been possible. This was not a mere error in the manner or requirement of service; so far as the peititoners are concerned there was no service upon them at all."

26. But in 1987. McDaid was not followed in Scotland but sought to be distinguished. See Martin v. Bearsden & Milngavie District Council, 1987 S.L.T. 300, where the validity of a statutory ouster clause taking effect after expiry of a time limit of six weeks was upheld, thus excluding the Court of Session's ordinary jurisdiction to review. In fact, Martin was preceded by a similar Scottish decision. See Hamilton v. Secretary of Estate for Scotland, 1972 S.L.T. 233, where the English decision in Smith, was unreservedly embraced in upholding a time-limited ouster clause. In between 1972 and 1987, the 1984 McDaid decision had steered in the opposite direction. Mr Ferguson is not impressed by what was regarded in Martin as the distinguishing feature in terms of the permitted court challenge to the decision protected by the ouster clause. He dismisses the distinction so advanced for the ratio in Martin curtly : "it is nothing to the point". See "The Limits of Judicial Review" supra. p.308 Left Hand Column.

27. Mr Ferguson finds it "difficult to understand how Smith and the cases following it including Hamilton can co-exist with Anisminic", and for that matter it is equally hard to reconcile Hamilton and Martin with McDaid. Whether or not the legislation introducing an ouster clause also provides a right to or venue for appeal cannot, so submits Mr Ferguson, justify exclusion of the courts' supervisory jurisdiction. He expresses the view that "both Anisminic and McDaid are undoubtedly preferable on pragmatic and legal grounds." He concludes:

"After all, there should be no such thing, as Hume observed, as a creature of statute which can determine his own powers and excuse its own errors."

I feel constrained to adopt his closely-reasoned analysis and share his sentiments.

28. S.19(3) of the Housing Ordinance, literally construed, appears to confer extensive and unreviewable power upon a tribunal. Its language is as robust as, if not more so than that of "shall not be questioned in any court" in Anisminic v. Foreign Compensation Commission, supra or "shall not be subject to appeal or liable to be questioned in any court" in the Interception of Communications Act 1985, S.7(8). These English provisions have categorically been acknowledged by Professor Wade as "unambiguous instructions of Parliament". See Wade's Administrative Law, 6th Edn. p.728. Nevertheless, as ouster clauses including our s.19(3), they do not escape close scrutiny.

29. Mr Lam for the respondent contended that S.19 (3) of the Housing Ordinance is couched in fairly comprehensive terms. I would be the first to agree, but it remains to be examined whether section 19(3), when strictly construed (particularly as regards the words "terminated" and "determination"), has effectively excluded judicial review.

30. Counsel relied on five aspects : First, S.19(3) is more clearly worded than the already sweeping provision in Anisminic. Secondly, within the multifarious duties and power of the Hong Kong Housing Authority, S.19(3) only seeks to introduce a partial exclusion from the courts' ordinary jurisdiction to supervise. Thirdly, here the Legislature assigned an exclusive venue for testing a notice to quit before the Tenancy Appeals Committee. It was thus deliberately intended to be kept within the domestic forum. Fourthly, the power of the Hong Kong Housing Authority to serve a notice to quit is unfettered without any pre-conditions to fulfil. Lastly, the Hong Kong Housing Authority is, as a government department, more of a decision-making body than a fact-finding one. There is, so Mr Lam urged, every compulsion for this Court to assume that the decision to serve a notice to quit was a matter of high policy content exclusively committed to the Hong Kong Housing Authority. See also Anisminic v. Foreign Compensation Commission, supra p. 209 Letters G-H, per Lord Wilberforce.

31. This court is now being called upon, therefore, to determine the nature of the decision to issue or confirm the notice to quit and whether s.19(3) of the Housing Ordinance has, in all the circumstances of this case, effectively barred judicial review.

32. The unanimous decision in Anisminic may be briefly summarised : a comprehensive ouster clause would not preclude the courts from questioning any decision of a tribunal made outside its jurisdiction, but an error committed within its jurisdiction is not reviewable. The House was, however, divided 3 to 2 in their Lordships' conclusions as to whether the error complained of in that case was one made outside or within jurisdiction. This dichotomy is often categorised as :"jurisdictional error" and "non-jurisdictional error". No tribunal could ignore its duties or the proper exercise of its power at will. If its power is exceeded or the exercise improper, then the tribunal would be acting in excess of its jurisdiction, and its decision could only be one which it purports to make but is in fact not one required of it by the enactment. That would constitute a jurisdictional error of law outside the jurisdictional limits of the tribunal. "But if it decides a question remitted to it for decision without committing [errors which go to jurisdiction] it is as much entitled to decide that question wrongly as it is to decide it rightly". See Anisminic, supra. p.171 Letter E. Such a collateral error would be one made within jurisdiction or is more sophisticatedly called "non-jurisdictional error" because it is not an error affecting jurisdiction. This often happens in cases of non-compliance with a merely directory as opposed to mandatory procedural requirement, e.g. the tribunal addresses itself to the right question as to whether service of any notice was required, then answers it wrongly. See "The Limits of Judicial Review" by Mr Ferguson, p.308 Right Hand Column.

33. There seems to be a judicial inclination to retain supervisory control by holding ouster clauses as ineffective in every case where the error could at all be taken (and at times artificially taken) as going to jurisdiction. Anisminic is an example. At p. 208 Letters C/D, Lord Wilberforce offered the rationale:

"What would be the purpose of defining by statute the limit of a tribunal's powers if, by means of a clause inserted in the instrument of definition, those limits could safely be passed?"

It is a delicate balance which may not be objectively struck always with consistency and that could perhaps explain why only by a majority of three to two that the Foreign Compensation Commission was held in Anisminic to have exceeded its jurisdiction. Both Lord Morris and Lord Pearson dissented. cf. Professor Wade's criticism of the headnote in the law reports in his "Constitutional and Administrative Aspects of the Anisminic Case", supra. p. 209, footnote 63. As I have earlier endeavoured to summarise : their Lordship unanimously held that a decision made in excess of jurisdiction could be quashed whilst a mere error within jurisdiction could not be questioned. The concept of "non-jurisdictional error" is thus said to have been fully established in Anisminic. See "The Limit of Judicial Review" by Mr Ferguson, supra at p. 308, Right Hand Column.

34. In Re Racal Communication, [1980] 1 A.E.R. 634, from the end of p. 638 to p.639 Letter a, it was suggested that the distinction on between the unquestionable errors within jurisdiction and reviewable errors outside jurisdiction was practically abolished by Anisminic. But such suggested abolition was rejected by the Privy Council in South East Asia Fire Bricks v. Non-Metallic Products [1981] A.C. 363 at P. 370 Letters C/D - Letter F. However, the distinction has decidedly eroded as it is well put in de Smith's Judicial Review of Administrative Action, 4th ed., at p:372 : "The categories of jurisdiction error were, however, so widely formulated that it has been doubted whether there were any errors of law that could not, consistently with their Lordships' reasoning [in Anisminic], be characterised as non-jurisdictional".

35. The applicant's allegation is that the Hong Kong Housing Authority and its Tenancy Appeals Committee have taken into account, as an irrelevant consideration, the feared ICAC investigation and impending action. The allegation that the Hong Kong Housing Authority and its Tenancy Appeals Committee had paid regard to matters beyond those fit for their proper de liberation if substantiated, would constitute a jurisdictional error susceptible to judicial review. The decision to serve the notice to quit would arguably be a purported decision and thus a nullity. The notice to quit served may be said to be only a purported notice and would likewise be arguably a nullity. The termination may accordingly be impugned as a purported but not a real termination and hence invalid as in the case of Anisminic. See Anisminic, supra. p.p.171 Letter D/E, 195 Letter C and 210 Letters D-F.

36. The Tenancy Appeals Committee may confirm, suspend or cancel the termination. If, on the same parity of reasoning, its decision should be a nullity, despite s.20(4) of Housing Ordinance that it is final, the confirmation would only be an apparent or purported confirmation which, as Lord Reid observed in Anisminic at p.170 Letters A/B, "in the eyes of the law has no existence because it is a nullity" and would also be susceptible to judicial review.

37. Notwithstanding s.19 (3) and the matters advanced by Mr Lam of counsel as a buffer to the courts' resistence to an effectual ouster clause, the alleged complaints as jurisdictional errors going to jurisdiction could turn the termination and its confirmation into nullities vulnerable to judicial review. In Anisminic at p.170 Letters A/B, Lord Reid explained the overriding power to review over an ouster clause in these terms:

"If you seek to show that a determination is a nullity, you are not questioning the purported determination - you are maintaining that it does not exist as a determination. It is one thing to question a determination which does exist : it is quite another thing to say and there is nothing to be questioned."

The tenancy termination flowing from the respective decisions of the Hong Kong Housing Authority and the Tenancy Appeals Committee to serve or confirm the notice to quit is therefore reviewable.

38. I pass then to consider the matters ventilated by counsel. Partial exclusion even as to time has been, in my view, rightly criticized. But this is not a case of a time-limited ouster clause. S.19(3) of the Housing Ordinance is merely a partial exclusion clause. Irrespective of the nature of the partial exclusion, no court should standby and allow an attempted encroachment on its power of review unless it is restrained by an unassailably appropriate ouster clause. For the reasons I have given, S.19(3) is not such a clause. It matters not that the language in s.19(3) of the Housing Ordinance is equally clear and could prehaps be said to be even more sweeping than that considered in Anisminic.

39. Further, it is true that the Hong Kong Housing Authority does enjoy a great variety of duties and power of far-reaching ramifications, and that s.19(3) merely introduces a partial exclusion limited to termination of tenancy. Whilst partial exclusion has often been successful in tempting the courts to forego its supervisory jurisdiction, as Mr Ferguson has sounded a warning note, the courts' concession does not seem to be truly warranted.

40. Mr Lam leant heavily on the fact that the Legislature specified a venue for appeal by s.20 of the Housing Ordinance and pronounced the decisions of the Tenancy Appeals Committee as final by its sub-section 4. But such an exclusionary clause in s.20(4) has been held, time and again, not to have the effect of eliminating the courts' power to review. It is quite unnecessary for me to express any concluded view as to whether there exists a conflict between s.19(3) and s.20(4) with regard to any legislative intention to exclude the courts' ordinary jurisdiction. I have taken the view that s.19(3) does not oust the courts' supervisory power, and it is tolerably clear that by itself s.20(4) does not have the effect of shunting the decisions of the Tenancy Appeals Committee from the courts' ordinary jurisdiction. There is much to be said for the administration of housing estates and hawkers' markets that they must be left to be managed in a flexible manner best calculated to promote governmental policy. But I am not persuaded that the termination of a single tenancy is, on the facts of this case, a matter crucial to its execution. Consequently, what would appear to be a complete domestic code cannot have a decisive influence in the overall assessment.

41. Despite the factors raised by Mr Lam in his plea for accepting s.19(3) as a valid partial ouster clause, on legal principles and against the known scenario, I cannot accede to counsel's invitation.

42. The surrounding circumstances in this case, therefore, add little to my endeavours to gauge the effect of s.19(3) on the respective apparent or purported decisions to issue or confirm the notice to quit.

43. I therefore hold, on the preliminary issue, that the Court has jurisdiction to entertain the applicant's motion made unto this Court pursuant to leave granted.