ZESTRA ASIA LTD v. COMMISSIONER FOR TRANSPORT

HCAL113/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 113 OF 2006

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J U D G M E N T

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1.  The decision under challenge in this judicial review is that of the Commissioner for Transport (“the Commissioner”) made on 29 August 2006 rejecting the applicant’s application for a personalized vehicle registration mark in the form of “ZESTRA” on the basis that it is likely to be offensive to a reasonable person, or has a connotation offensive to good taste or decency.  The challenge is made on the ground that the decision is Wednesbury unreasonable.

The Personalized Vehicle Registration Marks (PVRMs) Scheme

2.  The Commissioner’s decision was made in the context of the Personalized Vehicle Registration Marks (PVRMs) Scheme, which was launched by the Transport Department on 1 April 2006.  The objective of the Scheme is to provide more choices of vehicle registration marks to vehicle owners.  The basic features of the Scheme are that vehicle owners can choose their preferred vehicle registration marks, apply to the Commissioner and use the proposed PVRMs upon approval following a bidding exercise.

3.  For the purpose of implementing the PVRMs Scheme, the Road Traffic (Registration and Licensing of Vehicles) Regulations, Cap.374E had been amended by adding regulations 12A to 12R.

4.  Under the PVRMs Scheme, the Commissioner will by notice published in the Gazette and newspapers invite applications for the allocation of PVRMs.  If the number of applications received exceeds the number of applications to be considered in the exercise as specified in the invitation, the Commissioner will arrange a selection of the applications to be considered by lot.

5.  The Transport Department will then carry out a check of the applications selected in accordance with the basic combination requirements that are set out in Appendix 1 of the Guidance Notes. The Guidance Notes are available on the website and licensing offices of the Department.  For applications that meet the basic combination requirements, the applicants will be required to pay a $5,000 deposit.

6.  Upon receipt of the deposit, the Commissioner will determine whether to accept or reject the application. If he accepts it, the proposed PVRM will be offered for sale by auction on a date to be fixed by the Commissioner. 

Road Traffic (Registration and Licensing of Vehicles) Regulations,

Cap. 374E (The Regulations”)

7.  As mentioned above, the PVRMs Scheme is provided for and governed by regulations 12A to 12R of the Regulations.

8.  For the purpose of this judicial review application, regulation 12F dealing with determination of application for PVRMs is directly relevant. The power of the Commissioner to determine an application is provided by regulation 12F(1), which states that:

“On receipt of a deposit under regulation 12D(1), the Commissioner shall, in his discretion, determine whether to accept or refuse the application concerned.”

9.  Regulation 12F(2) sets out the grounds upon which the Commissioner shall refuse an application.  In particular, regulation 12F(2)(a) states as follows: 

”(2)   Without prejudice to the generality of the Commissioner’s discretion under subregulation (1), the Commissioner shall refuse an application if, in his opinion, the proposed personalized registration mark—

(a)     is likely to be offensive to a reasonable person, or has a connotation offensive to good taste or decency; …”                                                                            

The applicant and the product “Zestra”

10.  The applicant is a company incorporated in Hong Kong.  It is engaged in the sale, marketing and distribution in Asia and the Far East of a product called “Zestra”.

11.  “Zestra” is a registered trade mark in the United States of America and elsewhere.

12.  The evidence filed by the applicant shows that Zestra is a feminine health product.  It was first sold in the United States of America in 2002 and is now sold in over 50,000 outlets globally.  In Hong Kong, it is sold at all Watsons and Mannings retail stores as well as other dispensaries.

13.  On the applicant’s website, Zestra is described as a feminine arousal oil designed to be topically applied (i.e. to be applied to the skin). As to its use, it is said that it “helps to increase female sexual pleasure in normal women, those with arousal difficulties, and in women suffering sexual side effects from antidepressant medications”. 

14.  The applicant had included in its evidence several articles published in journals for professionals and practitioners in health science, nursing, medicine and pharmacy.  They show that: (i) female sexual disorder or dysfunction is a condition recognized by the medical profession; (ii) one recognized category of female sexual disorder is sexual arousal disorder; and (iii) Zestra is recognized as an effective product used in the treatment of or as a therapy for sexual arousal disorder.   

15.  The applicant has also filed evidence showing that Zestra had been advertised in various local newspapers and magazines.  The product had also been a sponsor of sports and cultural events including, the Singapore Golf Masters Tournament and Hong Kong Sex Cultural Festival.  The latter event was co-sponsored by, inter alia, the Hong Kong Family Planning Association and RTHK.    

The applicant’s PVRM application

16.  By a notice published in the Gazette on 31 March 2006, the Commissioner invited applications for the first PVRM exercise.

17.  On 7 April 2006, the applicant submitted an application for a PVRM in the form of “ZESTRA”.

18.  As the number of applications received by the Commissioner exceeded the prescribed number of 1,000 in the exercise, a selection was conducted by means of drawing of lots.

19.  By letter dated 26 May 2006, the Commissioner informed the applicant that its application had been selected.  As requested, the applicant paid the $5,000 deposit.

20.  At about the same time, the Commissioner sought and obtained the comments of the Police, the Home Affairs Bureau (“HAB”) and the Official Language Division (“OLD”) on the proposed PVRM “ZESTRA”.  The Police did not make any comment.  The HAB remarked that “ZESTRA” was “sexually offensive (medical product for arousal)”. As for the OLD, the remark received by the Commissioner is that “ZESTRA” is a “tropical oil for female sexual response”.

21.  The proposed PVRM of “ZESTRA” together with other selected PVRMs were referred to a vetting committee for consideration. The abovementioned remarks of the HAB and OLD were also provided to the vetting committee.  The vetting committee held its meeting on 30 June 2006.  In respect of the applicant’s proposed PVRM, the Commissioner’s affirmation stated that members of the vetting committee did not dispute the views given by the HAB or the OLD on it.

22.  By letter dated 29 August 2006, the Commissioner informed the applicant that its application was rejected.  The reason for the decision was stated to be:

“The proposed personalized vehicle registration mark is likely to be offensive to a reasonable person, or has a connotation offensive to good taste or decency.  It has therefore been rejected in accordance with regulation 12F(2)(a) of the Road Traffic (Registration and Licensing of Vehicles) Regulations, Cap.374E.”

23.  On 6 September 2006, the applicant protested against the decision both orally and by email.  The applicant pointed out to the Commissioner that the product “Zestra’ was sold in 50,000 retail outlets globally, including all Watsons and Manning stores in Hong Kong, that it had been clinically tested and recommended by medical and health professionals and that it had sponsored major sports and other events, both overseas and in Hong Kong.

24.  The Commissioner replied on 10 October 2006, explaining that the proposed mark was considered in the context of vehicle registration marks, that whether a PVRM is offensive or has a connotation offensive to good taste or decency is to be decided by the Commissioner after taking into account the views from relevant departments and the vetting committee.

The application for judicial review

25.  On 27 October 2006, the applicant filed the Form 86A herein.  Leave to apply for judicial review was granted on 1 November 2006.  The Notice of Motion was filed on 2 November 2006.  On 6 March 2007, the Form 86A was amended to add an additional ground of procedural impropriety.  The Amended Notice of Motion was filed on the same day.

26.  The applicant initially seeks an order of certiorari to quash the decision of the Commissioner and for a mandamus requiring the Commissioner to grant its PVRM application.  Further or alternatively, the applicant seeks a declaration that the Commissioner’s decision is contrary to the Regulations.  At the hearing, the applicant through Mr Duncan SC, indicated that it is contented with an order of certiorari and for the matter to be remitted to the Commissioner for reconsideration.  

27.  On the Amended Form 86A, two grounds were relied upon.  They are Wednesbury unreasonableness and procedural impropriety.  In respect of the second ground of procedural impropriety, it is directed at

the vetting committee, to which the Commissioner had referred the PVRMs applications for comments.  It is said that this was improper in that the setting up of and the consultation with the vetting committee are not provided for in the Regulations.

28.  At the hearing, the applicant did not press the ground of procedural impropriety. This is because even if it succeeds on this ground, it will be of no consequence since it is the Commissioner’s evidence that the vetting committee had not expressed any view on the proposed PVRM.  His evidence is just that the vetting committee did not disagree with the remarks given by the HAB and OLD.

The Commissioner’s decision

29.  Accordingly, the only ground of challenge pursued by the applicant is that of Wednesbury unreasonableness. 

30.  In paragraph 30 of his first affirmation, the Commissioner explained his decision as follows:

“On the basis of the views of the parties consulted, namely the [vetting committee], the HAB, the Police and the OLD, my subordinate recommended me to reject the application for “ZESTRA”.  I personally studied the different views expressed and agreed that though “ZESTRA” was a company name it had sexual connotation. I was of the view that due to its sexual connotation, “ZESTRA”, if used as a vehicle registration mark, was likely to be offensive to a reasonable person, or had a connotation offensive to good taste or decency in the Hong Kong community which is predominately Chinese and generally conservative about issues relating to sex and particularly sexual intercourse.”  

31.  As mentioned above, the Police had made no comment on the proposed mark of “ZESTRA” and the vetting committee had not expressed any special view of its own.  Essentially, therefore, the views that the Commissioner had considered were those expressed by the HAB and the OLD.

32.  In respect of the remark given by the OLD, Miss Chung who appeared for the Commissioner accepted that it would not be right to describe the product as a “tropical” oil.  She explained that the OLD’s original remark was the product was a “topical” oil, but there was a clerical error when the OLD’s remark was communicated to the Commissioner.  However, there was no mention of this explanation in the Commissioner’s two affirmations.  There is thus no evidence to this effect.

33.  In his second affirmation, the Commissioner further explained his determination as follows (at paragraph 4):

“… my determination is based on the fact that the mark “Zestra” is the brand name of a sex arousal product and my assessment that the Hong Kong community is generally conservative about sex in particular matters about sex intercourse.”

The arguments

34.  The gist of the applicant’s arguments is that “Zestra” is not a sex product or something that is sold in a sex shop.  Nor is it a product associated with unnatural or unsafe sex.  The applicant complains that the Commissioner had failed to appreciate the true nature and categorization of the product and the integrity with which the product is perceived by the medical and health science professionals.  The applicant further says that sex or sexual intercourse is a natural act and human activity.  It is therefore argued that there is no rational basis for the conclusion that the proposed PVRM, which is the name of the product, is likely to be offensive to a reasonable person, or has a connotation offensive to good taste or decency.

35.  For the Commissioner, it is pointed out that he had made proper consultations by seeking the views of the Police, the HAB, the OLD and the vetting committee.  His conclusion on the proposed PVRM, which involves a value and moral judgment, is based on and supported by the views he had received.  Further, in the context of vehicle registration licences, the Commissioner is entitled to take a stricter view because as the vehicle is driven around, the licence plate will be readily seen by the public, including youngsters.   It is also the Commissioner’s argument that in the context of judicial review, the court should not substitute its own view for that of the Commissioner, on whom the statue has conferred a wide discretionary decision-making power.

The applicable legal principles

36.  There is no disagreement between counsel as to the applicable legal principles.  The law is clear that in judicial review proceedings, the court exercises a supervisory and not an appellate jurisdiction.  It has also been recognized that a high standard must be achieved before the Wednesbury unreasonable ground can succeed.  As put by Lord Greene MR in Associated Provincial Picture Houses Limited v. Wednesbury Corporation [1948] 1 KB 223 at 233, it has to be so unreasonable that no authority properly directing itself on the relevant law and acting reasonably could have reached that decision.

37.  In de Smith, Woolf & Jowell’s Principles of Judicial Review (1999) at para.12-018 at p.459, it is further pointed out that:

“Although the terms irrationality and unreasonableness are these days often used interchangeably, irrationality is only one facet of unreasonableness.  A decision is irrational in the strict sense of that term if it is unreasoned; if it is lacking ostensible logic or comprehensible justification.  Instances of irrational decisions include those made in arbitrary fashion, perhaps “by spinning a coin or consulting an astrologer”. “Absurd” or “perverse” decision may be presumed to have been decided in that fashion, as may decision where the given reasons are simply unintelligible.  Less extreme examples of the irrational decision include those in which there is an absence of logical connection between the evidence and the ostensible reasons for the decision, where the reasons display no adequate justification for the decision, or where there is absence of evidence in support of the decision.” 

Is the decision Wednesbury unreasonable ?

38.  The word “Zestra” is a created word. When the Commissioner says it has a sexual connotation, it can only be because it is the name of the product “Zestra” and that the product is used in connection with sexual intercourse.  The Commissioner has confirmed this in his second affirmation.

39.  As to the nature of the product, the Commissioner does not dispute that it is a health product.  It is also not disputed that arousal disorder is a recognized category of female sexual disorder or dysfunction and that “Zestra” is recognized as an effective product for its treatment and therapy.  Although the Commissioner accepted in his second affirmation that he was not aware of the journal articles, advertisements and promotional materials exhibited by the applicant in this application, Miss Chung submitted that the Commissioner must be aware from the remark given by the HAB that the product is a medical product.  Miss Chung also submitted that it is not the Commissioner’s case that the product is a sex product or a product associated with unsafe or unnatural sex.

40.  It would therefore follow that the sexual connotation that the Commissioner perceived the product and the mark “ZESTRA” to possess can only be in the sense that it is associated with sexual intercourse.  In this sense, the applicant does not take issue with the view that the word “Zestra” may have a sexual connotation.

41.  As to the meanings to be ascribed to the terms “is likely to be offensive to a reasonable person” and “has a connotation offensive to good taste or decency” under the Regulations, it is useful to refer to the advice given to the members of the vetting committee in assessing a proposed PVRM.  The advice will reflect the Commissioner’s interpretation, with which no issue is taken by the applicant in this application.  The advice is in these terms (paragraph 16 of the Commissioner’s first affirmation):

“… generally, “offensive” carries the meaning of giving or meant to give offence, being insulting, disgusting, nauseous or repulsive, etc, while “offensive to good taste or decency” carries the meaning of not conforming to the recognized standards of good taste, modesty or decorum, or being improper, immoral or obscene, etc. and that a PVRM application may be rejected if it contains foul language or disturbing words.  The [vetting committee] members are also advised of other considerations including, but not limited to (a) sexual connotation; (b) obscenity, contempt, prejudice, hostility, insult, profanity or vulgarity; (c) violence, (d) degradation, discrimination or bias based on race, ethnic, religious beliefs, sexual orientation/ connotations, etc; (e) inflammatory; (f) related to illegal activities or substances and (g) a drug related term.  They are also reminded that a foreign word or term that falls into any of the above category should be rejected and that whether a proposed PVRM is offensive or has a connotation offensive to good taste and decency is a matter of fact to be adjudged in the relevant circumstances and the criterion should be applied in accordance with the test of reasonableness and the generally accepted social or moral standard.”

42.  Mr Duncan SC submitted that the statutory terms, as understood by the Commissioner, impose high thresholds. I agree.  Further, as interpreted by the Commissioner, it is of critical importance to gauge the standards of good taste and decency that are generally recognized and accepted by the community. 

43.  On the reasoning of the Commissioner, it would be that in the context of Hong Kong, merely because the word “zestra” may be associated with sexual intercourse, a vehicle licence plate bearing the mark of “ZESTRA” is likely to be insulting, disgusting, nauseous or repulsive and/or is contrary to the recognized standards of good taste, modesty or decorum, or is improper, immoral or obscene.  This is because in the Commissioner’s assessment, the Hong Kong Community is generally conservative about sex and particularly sexual intercourse.  The underlying logic or rationale is that an open reference to sex or sexual intercourse is objectionable to a reasonable member of the community. 

44.  While I accept that where an administrative decision involves a value and moral judgment, the court in its supervisory jurisdiction should not substitute its view for that of the decision maker, it does not mean that the court can never subject the logic and basis of the decision maker’s view to scrutiny.  In the present context, whether the proposed PVRM is likely to be offensive or has a connotation offensive to good taste or decency is no doubt a matter for the Commissioner.  However, the court in dealing with a Wednesbury challenge will have to examine the reasons and justifications relied upon by the Commissioner to see whether they are capable of supporting the conclusion.

45.  As analysed above, an important plank in the Commissioner’s conclusion is his view that the general Hong Kong community is conservative and will find an open reference to sexual intercourse to be objectionable and against good taste and decency.   However, the Commissioner had not explained the objective basis for his view.  The fact that the population is predominately Chinese does not automatically lead to the conclusion that the general public is likely to be upset by an open reference to sexual intercourse.  After all, Hong Kong is a mature and pluralistic community.  There has to be a cogent and objective basis for suggesting that its members will find it offensive to see the public display of a word that may be associated with sexual intercourse.  In this context, it is also relevant to note that there was no information or material before the Commissioner to indicate how well known or otherwise is the product and, in turn the word “zestra” and its connotation, in Hong Kong.  Plainly, given that “zestra” is a created word, it would not be understood to be associated with sexual intercourse, let alone be offended, if the person who sees the mark is not aware of the product. 

46.  Miss Chung submitted that the Commissioner had already consulted the relevant departments and the vetting committee.  She argued that the comment the HAB made on the proposed PVRM is reflective of the community’s view on the proposed PVRM.   I do not agree that the consultations carried out by the Commissioner afford the necessary support to his conclusion.  In the first place, the consultation with the OLD does not carry the matter any further given that its remark was incorrect or, on counsel’s submission, incorrectly conveyed to the Commissioner. The OLD’s remark is in any event merely explanatory of the word “zestra”.   The consultation with the vetting committee also did not assist the Commissioner in gauging the morality of the community and/or public perception of the proposed PVRM in that its members did not appear to have stated any views on the applicant’s proposed PVRM.  As for the HAB, the Commissioner had explained that it is a policy bureau responsible for promoting human rights and equal opportunities, which may touch on matters relating to sex, race and religion and are potential areas of concern of the criterion laid down in regulation 12F(2)(a) of the Regulations.  But that does not mean that the views of the HAB can necessarily be equated with the views of the general public.  That said, the comment given by HAB is difficult to reconcile.  Notwithstanding it described the product as a “medical product for arousal”, HAB considered the word “zestra” to be “sexually offensive”.  It seemed to have taken the view that any product for arousal is sexually offensive, a view that must be open to doubts in light of the expert evidence filed by the applicant.    

47.  Miss Chung also relied on a newspaper article on the Hong Kong Cultural Sex Festival (Star, 5 March 2006, p.5).  In reporting the event, the writer stated that “the usually taboo subject came out in the open in cosmopolitan Hong Kong”.  Miss Chung argued that this shows sex is a taboo subject in Hong Kong.  However, in the same report, the writer also said that a statement that “Hongkongers were too shy and conservative” was ironic and he went on to give reasons why it was an ironic statement, which included the prominent presence in Tsim Sha Tsui of sex shops, bookshops selling magazines such as Playboy and Penthouse.  The article, when read in context and as a whole, does not provide support for the Commissioner’s conclusion.  

48.  It was emphasised by the Commissioner that the matter has to be considered in the context of PVRM application.  It was also submitted that the Commissioner is entitled to take a stricter view when considering what could be accepted as a vehicle registration mark.  I accept that in judicial review applications, the severity of the decision is not a ground for disturbing it so long as the decision falls within the permitted range of discretion open to the decision maker.  However, the critical issue in this application is not whether the standard or approach adopted by the Commissioner is too high or strict.  What the applicant’s complaint boils down to is: What objective basis was there for the view that the proposed PVRM is sexually offensive or for the conclusion that it is likely to be offensive to a reasonable man in Hong Kong and/or is offensive to good taste or decency?   The Court is therefore not asked to give a view on the moral standard of the community.  Neither is it substituting its value or moral judgment for that of the Commissioner.

49.  Having regard to the uncontroverted expert evidence before the court on the nature and application of the product “Zestra” and the fact that the applicant is a company trading in the product, I agree with the applicant that an objective and rational justification for the Commissioner’s conclusion on the proposed PVRM and the decision to refuse the applicant’s application has not been shown.  The decision is accordingly Wednesbury unreasonable.

Conclusion

50.   For the above reasons, the application for judicial review is allowed.  I grant an order quashing the Commissioner’s decision to reject the applicant’s PVRM application.  There is also an order directing that the applicant’s application be remitted to the Commissioner for reconsideration.

51.  Applying the normal rule of costs follow event, there is an order nisi that the respondent pays the applicant the costs of these proceedings, to be taxed if not agreed.