LO YUET HING v. HONG KONG HOUSING AUTHORITY AND ANOTHER

HCAL 95/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO. 95 OF 2002

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J U D G M E N T

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1. The Applicant is 71 years old. She and her family have been residing in public housing estate premises for 20 odd years. They were re-allocated the subject premises, namely, Flat 2046, Man Chun House, Tsz Man Estate on 1 February 1997. A new Tenancy Agreement dated 9 January 1997 was signed by the Applicant as the tenant and the 1st Respondent as the landlord. The Applicant has since been residing there with her two adult sons and an adopted son (before his imprisonment) - they were listed as members of the tenant's family.

2. The Applicant is a disabled person. She was born without one lower leg. She has been suffering from poor health. She requires regular medical attention from a doctor practising in the neighbourhood. Yet despite all that, on 25 May 2001, she was served with a notice to quit ("Notice to Quit") by the 1st Respondent, giving her and her family until 30 June 2001 to vacate the premises.

3. This draconian action was taken because the adopted son of the Applicant was convicted of an offence of unlawful trafficking in dangerous drugs, namely 80 packets, totalling 163.73 grammes of mixture containing 70.21 grammes of heroine hydrochloride, that were found inside a drawer of an unused mahjong table, inside the adopted son's room which he shared with one of the adult sons of the Applicant in the subject premises. The adopted son was convicted on 28 April 2000 and he was sentenced to five years' imprisonment on 27 June 2000.

4. On 25 May 2001, the Applicant appealed against the decision of the 1st Respondent to issue the Notice to Quit. The appeal was heard by the 2nd Respondent on 5 December 2001. By a letter dated 7 December 2001, the 2nd Respondent informed the Applicant that it had confirmed the Notice to Quit.

5. Throughout, the Applicant and her two sons have been maintaining that they knew nothing about the criminal activities of the adopted son who had a clear criminal record prior to the conviction in question.

6. In these proceedings, the Applicant seeks to judicial review the decision of the 1st Respondent in issuing the Notice to Quit as well as the decision of the 2nd Respondent confirming the Notice to Quit.

7. The standard-term Tenancy Agreement contains the following material terms:

"(II) The Tenant agrees with the Landlord as follows:

...

(11) Not to use or cause or permit the said flat to be used for any illegal or immoral purpose.

...

(IV) IT IS HEREBY expressly agreed as follows:

...

(2)	If the rent payable hereunder or any part thereof shall be unpaid for fourteen days after becoming payable (whether formally demanded or not) or if any agreement on the Tenant's part herein contained shall not be performed or observed then and in either of the said cases it shall be lawful for the Landlord at any time thereafter to re-enter upon the said flat or any part thereof in the name of the whole and thereupon the tenancy hereby created shall absolutely determine.
(3)	Without prejudice to the last preceding sub-clause the tenancy hereby created may be determined at any time after the expiration of the period of 28 days specified in Clause I hereof by either party giving to the other at least one calendar month's notice in writing expiring at the end of any calendar month.
...
(7)	For the purposes of this Agreement any act, neglect or default of any member of the Tenant's family or of any servant of his shall be deemed to be the act, neglect or default of the Tenant.

..."

8. However, the terms in the Tenancy Agreement must be read subject to the provisions in the Housing Ordinance (Cap. 283). The relevant provisions are section 19 and section 20:

"19(1)	Notwithstanding the terms thereof, the Authority may terminate any lease --
	(a) without notice, if, in the opinion of the Authority, the land held under the lease has become unfit for human habitation, a nuisance, dangerous to health or unsafe; or (aa) without notice, if, in the opinion of the Authority, no person authorized under the lease to occupy the land or part thereof occupies the land or part thereof; or (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.
(2)	Upon the termination of a lease under subsection (1), the tenant shall, if he is still occupying the land, be a trespasser thereon.
(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.
...
20(1)	Where a lease has been terminated under section 19(1)(a) or (aa), or where a notice to quit has been given under section 19(1)(b), the tenant may appeal to the panel, appointed under section 7A(1), not later than 15 days after the date on which --
	(a) service of the notice of termination has been effected under section 19A(2); or (b) notice to quit has been given under section 19(1)(b),
	as the case may be: ...
(2A)(a)	Paragraph (b) shall apply in relation to any policy of the Authority which is stated and specified as being such in a certificate in writing issued for the purposes of this subsection by the Authority's secretary and as regards which the certificate also certifies that the policy was both considered and applied by the Authority when deciding to terminate the lease or, where appropriate, to issue the notice to quit to which the appeal relates.
(b)	In considering an appeal under subsection (1) --
	(i) if the tribunal concerned is satisfied that at the time of making the decision to which a certificate mentioned in paragraph (a) relates, the appellant was aware of the policy or could reasonably be expected to have been so aware, the tribunal shall have regard to such policy; and (ii) if such tribunal is not so satisfied, it may, where it considers it appropriate so to do, have regard to such policy.
(3)	A tribunal of the panel appointed under section 7A(6), in determining an appeal against a termination --
	(a) under section 19(1)(a) or (aa), may confirm, suspend or cancel the termination; (b) under section 19(1)(b), may confirm, amend, suspend or cancel the notice to quit.
(4)	The decision of the tribunal shall be final."

9. The Notice to Quit was issued by the Housing Authority pursuant to section 19(1)(b) of the Ordinance.

10. In these proceedings, the Respondents do not dispute that the decision of the 1st Respondent to issue the Notice to Quit pursuant to section 19(1)(b) and therefore the decision made by the 2nd Respondent in an appeal arising from the decision to issue the Notice to Quit by the 1st Respondent are liable to be judicially reviewed by this Court. See the two decisions by Yeung J (as he then was) in Kwan Shung King v. Housing Appeal Tribunal [2000] 2 HKLRD 764 and Thai Muoi v. Hong Kong Housing Authority HCAL 155 of 1999 (30 May 2000).

11. The primary submission of Mr Lam, counsel for the Applicant, is that the 1st Respondent's decision was fettered by policy. Counsel argues that the 1st Respondent has adopted a policy of issuing a notice to quit to a public housing tenant once it is found that the flat has been used for an unlawful purpose including trafficking in or possession of dangerous drugs by him or by his family members. He argues that under section 19(1) of the Ordinance, the 1st Respondent is conferred with the discretion to terminate any lease by giving a notice to quit. This power conferred upon the 1st Respondent is expressly stated to be notwithstanding the terms of the lease. According to counsel, it is unlawful for an authority to fetter its discretion by adopting a rigid policy or by implementing a policy in an inflexible manner. Counsel cites de Smith, Woolf & Jowell's Principles of Judicial Review para. 10-001 et seq.; R v. Secretary of State for the Home Department, ex parte Venables [1998] AC 407; R v. Warwickshire County Council ex parte Collymore [1995] ELR 217; and Attorney General ex rel. Tilley v. Wandsworth LBC [1981] 1 WLR 854 in support of his proposition.

12. That there is a policy in this type of situations cannot be denied. There is in evidence before me a memorandum dated 6 March 2000 setting out the policy of the 1st Respondent as follows:

"Background

2. The tenancy agreement (T/A) between the Housing Authority (HA) and its tenants enables the Department to take action against the tenant for any breach of tenancy conditions. Different management approaches in dealing with such breaches are adopted, depending on the latter's nature and seriousness. For minor breaches, a warning system is in place. Only when repeated warnings fail to achieve rectification on the tenants' part would action be taken to terminate the tenancies. For serious breaches, the Department will institute action to recover the PRH flats without prior warning.

3. There is a clause in the T/A which prohibits the tenant from using or causing or permitting the leased premises to be used for any illegal or immoral purpose. There is another clause which makes it a breach on the tenant's part for any offence committed by his/her family member, even though the tenant may claim ignorance or non-permission for such offence.

4. Under the existing policy, the use of PRH flat for illegal purpose, e.g. keeping of or trafficking in drug, constitutes a serious breach which may result in the termination of a tenancy. This stringent policy has a long history dating back to the 1970s. When it was last reviewed on 26 March 1994 (vide Paper No. MOC 32/94), the then Management and Operations Committee re-affirmed that the use of PRH flat for any criminal activities should be regarded as a very serious breach of tenancy conditions that warranted termination of the lease with notice-to-quit (NTQ).

Need For Review

5. Two recent cases of tenancy termination on account of keeping of drug by one of the household members in the leased premises have attracted public concern. The HA's long-standing policy was criticized as inflexible and too drastic as the whole household had been held responsible for the offence committed by only one of its members.

Department's View

6. The HA, like any landlord, has a legal responsibility to see to it that its flats are not used for criminal/illegal activities. The inclusion of an explicit clause in the T/A on prohibition of such activities and the adoption of a stringent management approach against the defaulting tenant serve to protect the interests of the HA as well as the estate residents and to deter misuse of the heavily subsidized PRH flats. Any relaxation of the existing policy may risk paving the way for PRH flats to become dens of iniquity. Members may wish to note that similar enforcement measures, including the incorporation into the T/A a prohibition clause in relation to illegal activities, are adopted by landlords in the private sector.

7. Any tenant who feels aggrieved by the Department's action on tenancy termination is allowed to lodge an appeal within a prescribed period. The existing appeal mechanism ensures a fair and impartial hearing by the Appeal Panel as adequate opportunity is given to the appellant to state the case. After considering the facts and defence put forth by the Department and the appellant, the Appeal Panel may confirm, amend suspend or cancel the NTQ.

8. In the process of dealing with the tenant's appeal, we will liaise where necessary with the Social Welfare Department (SWD) on the need for rendering assistance, including the consideration of compassionate rehousing, to the affected household.

Proposal

9. Having regard to the need for striking an equitable balance between the rights and the responsibilities/obligations of PRH tenants and the existence of an appeal mechanism, we propose to uphold the existing policy of terminating the tenancies of those tenants who are convicted of using their premises for illegal purposes, which invariably include keeping of or trafficking in drug. Should the tenants concerned lodge an appeal, the Department will conduct a careful assessment, before the appeal hearing, on whether the enforcement of the NTQ would bring about insurmountable housing problem to the household. Where the circumstance warrants, the expert advice of SWD will be sought. The assessment report and/or SWD's views will be made known to the Appeal Panel to facilitate its deliberation on whether a re-grant of tenancy or other form of rehousing should be considered if the NTQ is to be enforced."

13. This proposal was unanimously endorsed by the Rental Housing Committee of the Housing Authority in a meeting held on 9 March 2000.

14. Following the endorsement, a "Management Branch Instruction" was issued to the relevant estate management offices on 10 March 2000. Its status was said to be "mandatory". It read as follows:

"	Management Branch Instruction No. M10/2000
	Termination of Lease due to Illegal Use of Premises

Status: Mandatory

...

PURPOSE

1. This instruction promulgates the revised procedures for handling appeal against termination of lease due to illegal use of premises.

BACKGROUND

2. Breaches of leasing conditions may be classified into minor and serious ones. For minor breaches, a warning system is in place. Only when repeated warnings fail to achieve rectification on tenants' part would action be taken to terminate the tenancies. However, for serious breaches, the Department will institute action to recover the leased flats without prior warning.

3. Under the existing policy, the use of PH flats for illegal purposes constitutes serious breaches as a fundamental stipulation of all standardized leasing documents in use for domestic flats in estates and IH is contravened. Such documents include tenancy agreement, monthly licence and fixed term licence. HM/Estate/IH may terminate the subject lease in pursuant to Section 19(1)(b) of the Housing Ordinance.

4. The above policy was re-affirmed by RHC at its meeting on 9.3.2000 with a slight modification on the approach to be taken in dealing with the appeal subsequently arises.

ACTION

5. HM/Estate/IH should take immediate action to terminate, by way of departmental NTQ, the lease when tenant and/or any authorized person is convicted of using the leased premises for illegal purposes, which invariably include keeping of or trafficking in drugs.

6. Should the tenant lodge an appeal, HM/Estate/IH should conduct a careful assessment, before the appeal hearing, on whether the enforcement of the NTQ would bring about insurmountable housing problem to the household concerned.

7. Expert advice of SWD should be sought if circumstances are so exceptional/complicated that such a referral is warranted.

8. The assessment report and/or SWD's views should be annexed to the Appeal Paper to be submitted to the Appeal Panel to facilitate its deliberation on the case.

IMPLEMENTATION DATE

9. The above measures take immediate effect."

15. Moreover, prominent notices written in Chinese are said to have been posted on the notice boards at the lift lobbies of the housing estates to inform the tenants of the existence of such a policy. The notices at the housing estate in question read as follows:

	" 通告
	非法使用公屋單位將喪失租住權
	公共房屋乃租予公屋住戶及其家人作居住之用。根據租約條款的規定，任何公屋租戶均不可使用或容許他人使用其公屋單位作任何違法或不道德的用途。
	若公屋單位被承租人或其家人用作非法或不道德用途，如藏毒及聚賭等，均屬違反租約的行為。一經發現，房署會採取終止租約的行動及將該單位收回，而不會預先作出警告。至目前為止，房署已向本邨一位此類違法租戶發出遷出通知書，終止他們的租約。
	遵守租約條款及確保公屋單位用作正當用途，是每位公屋居民應有的責任。
	慈樂邨辦事處啟"

16. There is no denial that in the present case when the 1st Respondent decided to issue the Notice to Quit against the Applicant, the above policy was considered and indeed applied. But Mr Ng, counsel for the 1st Respondent, argues that the above extracts clearly show that the policy is not a mandatory one in the sense that it precludes the 1st Respondent or its staff from taking into account all other relevant considerations before deciding to issue a notice to quit. In particular, counsel points out that in paragraph 4 of the memorandum extracted above, the policy only says that the use of the premises for an illegal purpose constitutes a serious breach "which may result in the termination of a tenancy." It does not say that it must result in the termination of the tenancy.

17. Moreover, counsel argues that as a matter of fact, in the present case, after the discovery of the conviction of the adopted son of the Applicant, the Applicant's tenancy was not immediately terminated; instead, she was invited to attend interviews by the management staff of the 1st Respondent, and according to the evidence filed, during those interviews, information including that pertaining to the personal circumstances of the Applicant and her family as well as her claimed innocence or ignorance of the criminal activities of the adopted son, was obtained by the Housing Authority staff. Moreover, according to the evidence filed, the 1st Respondent took into account all this information in applying the policy before arriving at its conclusion that the Notice to Quit should nonetheless be issued.

18. According to the evidence filed by the 1st Respondent as well as the very helpful submission made on behalf of the 1st Respondent at the hearing, as regards the claimed innocence or ignorance of the Applicant and her sons about the criminal activities that took place within the rented premises, the 1st Respondent's attitude, usual practice or policy has always been as follows:

"(a)	In the vast majority of cases, it is simply impossible or extremely difficult for HA to definitely ascertain if a tenant has knowledge of the illegal activities. A tenant will almost invariably claims that he or she has no knowledge of the illegal activities carried out by a family member. While HA may interview the tenant, or may inspect the flat at all reasonable times, HA does not have any investigative or other coercive powers to gather evidence to prove a tenant's knowledge.
(b)	Neither it is appropriate for HA to carry out the above investigative role. HA, or the Housing Department, is an administrative organ managing the estates. HA is not the "police force" of the housing estates and they cannot and should not assume such a role.
(c)	HA certainly cannot carry out the above investigative role without gross breach of privacy into the tenant's family life. There is simply no legal basis for HA to do that. Nor is it appropriate for HA to do so.
(d)	HA also has a duty to manage and safeguard the use of limited public housing resources, and to prevent abuses by tenants for illegal purposes.
(e)	The waiting list for public housing is always very long and to allow or condone abuses by tenants will be contrary to public policy and unfair to other people on the waiting list."

19. Indeed that was the very reason why the 1st Respondent decided to insert clause IV(7) to its standard-term tenancy agreements in the first place.

20. Counsel for the 1st Respondent therefore argues that what happened in the present case was that on the one hand, the 1st Respondent's management staff listened to and bore in mind the claim of innocence or ignorance of the Applicant and her family members; on the other, they did not make any determination or come to any conclusion on their knowledge or lack of knowledge about the criminal activities. Nonetheless, according to counsel, what also happened was that they gave the claim of innocence or ignorance its "due weight". And at the end of day, according to the evidence, the 1st Respondent decided that the lease should be terminated:

" primarily because of the seriousness of the offence in this case - the quantity of drugs involved was large. (163.7 grammes of mixture) and the trafficking operations had been carried on for a period of one month."

21. In my judgment, the decision of the 1st Respondent must be disturbed for two reasons. First, as was indeed accepted by counsel for the 1st Respondent during the hearing, in a case of the present type, the knowledge or the lack of knowledge on the part of the tenant of the illegal activities that had been carried on in the premises is a relevant factor or consideration to take into account in the exercise of the 1st Respondent's statutory power and discretion under section 19(1) of the Ordinance. This is indeed commonsense - for, everything else being equal, one would legitimately expect the treatment to be meted out to a tenant who was totally ignorant of the criminal activities should be different from that to be meted out to a tenant who was aware of those activities being carried on in his premises.

22. As I said, counsel for the 1st Respondent does not dispute with this at least as a matter of theory, but he argues that in practice given the reasons set out above, the 1st Respondent is in no, or no good position, to verify these claims of innocence or ignorance that were invariably made by the tenants and their family members in cases of the present type. So in effect, a practice or policy has grown up that the 1st Respondent would not determine or come to any conclusion on whether these claims were well founded or not. Indeed, Mr Ng, in his submission, says that not even a presumption of innocence or for that matter, a presumption of guilt, is applied by the 1st Respondent to deal with these usual claims of ignorance. The 1st Respondent simply makes no determination and comes to no conclusion on the claims. That notwithstanding, according to counsel as well as the evidence filed, what, as a matter of practice or policy, happened and what happened in the present case, was that "due weight" or "consideration" was accorded to the claim in the deliberation process.

23. In my judgment, this is wrong. Once it is accepted, quite inevitably, that knowledge or ignorance is a relevant consideration for the 1st Respondent to take into account in the exercise of its discretion under section 19(1) of the Ordinance, it is incumbent upon the 1st Respondent to make a determination or to come to a conclusion, based on whatever material or information that is available to or before it, on the veracity of the claim of innocence or ignorance on the part of the tenant or the other family members. Without making such a determination or reaching such a conclusion, there is really no way that the 1st Respondent could accord "due weight" or "consideration" to the claim of innocence; and without making the determination or reaching the conclusion, a relevant factor or consideration must, by definition, have been left out from the consideration of the 1st Respondent, and that must quite fatally taint any decision reached by the 1st Respondent in the purported exercise of its discretion under section 19(1) of the Ordinance.

24. Sevenoaks District Council v. Emmott (1979) 39 P & CR 404 referred to by Mr Ng does not assist him because on a careful reading of the judgment, the Court of Appeal there was merely saying that a local housing authority need not hold a formal inquiry or anything that would correspond to the inquiry by a court into the question of who was right and who was wrong about a relevant complaint made against a tenant before deciding whether to issue a notice to quit. It did not say that the housing authority need not decide the question of who was right and who was wrong, or whether the complaint was justified on the facts.

25. As to the alleged likely difficulties faced by the 1st Respondent if it seeks to investigate the truthfulness of the claim of ignorance or innocence, I have no intention to doubt the magnitude of the difficulties described by the 1st Respondent. But the difficulty of the task cannot justify the failure to perform the task, and still less, a practice or policy not to perform the task. I am not for a moment saying that the 1st Respondent, in a particular case based on facts pertaining to that case, can never come to the conclusion that the truthfulness of a claim of ignorance cannot be verified, but nonetheless, it should still proceed to consider exercising its discretion under section 19(1). But a refusal to even try to determine the claim of ignorance as a general practice or policy is totally different and, in my judgment, unacceptable.

26. Moreover, I am far from saying that in the light of the difficulties outlined by the 1st Respondent in evidence and on its behalf in submission, and in order to overcome those difficulties, it would not be legitimate for the 1st Respondent to adopt some sort of burden of proof or even presumptions, or as counsel for the Applicant suggests, a requirement on those making claims of innocence to back up their allegations by statutory declarations which, of course, carry criminal sanctions against untrue declarations. I can think of quite legitimate ways and means to alleviate the difficulties. But whether the difficulties can be overcome entirely or only partially, it does not, in my judgment, given the fact that the 1st Respondent has been conferred with the statutory discretion to exercise, justify the 1st Respondent's systematic refusal or failure to make up its mind and come to a conclusion on claims of innocence by the tenants or their family members in cases of the present type.

27. Secondly, whilst I would not go so far as to say and conclude on the evidence before me that the 1st Respondent has adopted an inflexible policy in cases of the present type which precludes the 1st Respondent from ever taking into account any or any other relevant considerations in the exercise of its statutory discretion, apart from the fact that illegal activities have been carried on in the premises, I am quite satisfied on the evidence before me that in practice or in implementation, the thinking of the management staff of the 1st Respondent has been so very much affected by the policy that there was no meaningful consideration of other relevant factors in the deliberation process. I have already extracted above the content of the public notices posted at the notice board by the management office in question. The notices go quite beyond the content of the policy as construed by counsel for the 1st Respondent. They actually say that once a unit is found to have been used for any illegal purpose by the tenant or his family members ("一經發現"), the 1st Respondent will terminate the lease without any prior warning. A similar observation may be made regarding paragraph 5 under "ACTION" in the "Management Branch Instruction" extracted above.

28. As I said, according to the evidence filed, the decision to terminate the lease was "primarily" because of the seriousness of the offence in question. Given the personal circumstances and condition of the elderly Applicant and her claim of innocence, one would have thought that at least they should constitute weighty if not sufficient factors in the mind of the 1st Respondent when it deliberated on whether to issue the Notice to Quit. Yet according to the evidence filed, the present case of the Applicant seems to have been, in the eyes of the 1st Respondent, a very one-sided case - "one sided" because of the seriousness of the offence in question.

29. According to de Smith (op. cit.) at para. 10-008:

" The courts may be prepared to scrutinise closely the conduct of a decision-maker in assessing whether or not he has unlawfully fettered his discretion. A course of conduct involving the consistent rejection of applications belonging to a particular class may justify an inference that the competent authority has adopted an unavowed rule to refuse all. Further, where a departmental handbook on its face fettered the discretion of the Ministry, the courts were prepared to go behind a claim that the handbook was not in fact relied upon in reaching the impugned decision, the handbook was on the basis that "so much a part of the Department's thinking" that its influence could not be dismissed."

30. I must say that having read the evidence available before me, it is difficult to escape the conclusion that despite claims to the contrary, the policy of the 1st Respondent has played an unduly significant role in the 1st Respondent's management staff's decision-making process. By "policy", I am referring to the policy to evict the entire family once a flat has been used for an illegal purpose. And in this regard, I am not comforted by the figures disclosed in the evidence before me, i.e. that in the 44 months prior to March 2000, there were 103 cases where dangerous drugs were found in different housing estate units and in all 103 cases notices to quit were issued. Mr Ng vaguely suggests in submission that that was only the position prior to March 2000 and prior to another decision by Yeung J (as he then was) in Chan Ming Yan v. Hong Kong Housing Authority HCAL 100 of 2000 given on 13 July 2000, in which the learned judge seriously criticized the inflexible policy adopted by the Housing Authority in cases of the present type:

" Mr Chan says once it is found that the flat has been used for an unlawful purpose, HKHA will issue NTQ and it is for the Tribunal to find out if it is the tenant who uses, causes or permits the flat to be used for an illegal purpose or whether the tenant is liable because of the deeming provision under clause 4(g). The suggestion is that HKHA lacks the means to investigate to find out the true picture.

...

As I have observed in Thai Muoi's case HKHA (supra), if clause 2(j) per se is relied on, we are concerned with the wrongdoings committed by the tenant himself whereas clause 4(g) relates to the vicarious liability of the tenant for the wrongdoings of someone else. There is a legitimate expectation that HKHA will deal with the different situation in a different manner.

...

It is not open, in my view for the HKHA to take the position that as a matter of policy, once the flat has been used for an illegal purpose, a NTQ will be issued whether the tenant is himself in breach of the tenancy agreement or whether he is liable only by reason of clause 4(g).

The NTQ was issued under section 19(1) of the Housing Ordinance which gives the HKHA discretion to terminate a lease. It is a fundamental rule for the proper exercise of discretion that each case must be considered on its own merits and decided as the public interest requires at the time.

If an authority blindly adheres to a policy laid down in advance without applying its mind to the special circumstances of an individual case, it is not exercising its discretion lawfully. (Bromley LBC v. Greater London Council [1983] 1 AC 768, per Lords Diplock and Brandon)

It is not open for the HKHA to take the stance as it did that an unlawful use of the flat would invariably lead to the issue of a NTQ even when the tenant himself had done no wrong. Such a decision could well be Wednesbury unreasonable.

In my view, a decision to issue a NTQ on the basis that the tenant is in breach of clause 2(j) by reason of clause 4(g) is more susceptible to a judicial review on the basis that the decision is Wednesbury unreasonable. ...

...

A decision to deprive a tenant of his home is an extremely serious matter, particularly when the tenant himself has done no wrong and is held liable only because a family member uses the premises for an illegal purpose without his being aware of it. A court will need a lot of persuasion to be convinced that such a decision is not unreasonable."

(See also Lam Hei Ying v. Hong Kong Housing Authority HCAL 2299/2000 (23 January 2001) Yeung J)

31. I do not accept Mr Ng's suggestion, which is not based on any evidence, that there has been a change of or relaxation of adherence to the policy since Chan Ming Yan was decided. In fact, according to the evidence filed, the only example which was put forward to counter the allegation that the 1st Respondent rigidly adhered to its policy was a case in which the dangerous drugs (Estazolam tablets) found within the premises were intended to be consumed by the tenant for her own suicide. I must say I am not impressed by this supposed counter example at all.

32. To recapitulate, the second reason why I have come to the conclusion that the 1st Respondent's decision to issue the Notice to Quit cannot be sustained is that notwithstanding that in theory, the policy admits of consideration of other relevant matters, in practice or implementation, it has been rigidly adhered to, so much so that there was no meaningful consideration of the other relevant factors.

33. Turning to the decision of the 2nd Respondent to confirm the Notice to Quit, the 2nd Respondent now maintains a neutral stance in these proceedings and is prepared to abide by the result. In my judgment, the decision on appeal to the 2nd Respondent must also be disturbed for two reasons.

34. First, once the decision of the 1st Respondent to issue the Notice to Quit is held to have been unsustainable, it must follow that there was nothing left for the 2nd Respondent to confirm on appeal.

35. Secondly, and in any event, it is quite apparent from the very short reasons given by the 2nd Respondent for its decision to confirm the Notice to Quit that like the 1st Respondent, the 2nd Respondent has failed to make any determination or come to any conclusion on the claim of innocence or ignorance of the Applicant and her family members. The reasons for the decision can be found in one short paragraph:

"審議

10.	委員認為警方確實在上訴人兒子陸錦華所住公屋房間內搜獲毒品及陸錦華已因藏毒被法庭定罪，上訴人確實違反租約。考慮到上訴人的經濟情況，委員認為並沒有特殊原因可行使酌情權，因此，上訴審裁小組一致決定確認遷出通知書。"

36. Although there was mentioned elsewhere by the 2nd Respondent the claim of innocence by the Applicant and her family members, it is clear that in the reasons given no reference whatsoever was made to the claim, still less any determination on the claim of innocence.

37. In my judgment, it is plain that the 2nd Respondent has not made any determination. For by the nature of things, a determination either way would have been a very material consideration for the 2nd Respondent to take into account. In other words, if (say) the 2nd Respondent had made a determination that the claim was false and that the Applicant was aware of the criminal activities of her adopted son, that would have been a very weighty additional reason in support of the 2nd Respondent's decision to uphold the Notice to Quit. One would expect the 2nd Respondent to set this out expressly amongst the reasons given for its decision. On the other hand, if (say) the 2nd Respondent had reached the conclusion that the claim of innocence was true, that determination would likewise have been a very material consideration in favour of the appeal by the Applicant and one would have expected the 2nd Respondent to set that out as well. Here, I am not saying that this hypothetical finding in favour of the Applicant would have been sufficient, whether by itself or together with other relevant considerations, to tilt the balance in the appeal. That is not something that I am concerned with.

38. All that I am concerned with here is that like the 1st Respondent, the 2nd Respondent in reaching its decision to uphold the Notice to Quit has failed to make a determination on a relevant factor, i.e. whether the Applicant and her family members were as innocent and ignorant as they claimed.

39. For the avoidance of doubt, I am not concerned with how the 2nd Respondent should have gone about making the determination. Nor, as I say, am I concerned with what weight the 2nd Respondent should have attached to such a determination (once made) in its deliberation process. The crucial fact in the present case is that it is plain that the 2nd Respondent has not made the determination. The 2nd Respondent's decision to confirm the Notice to Quit in those circumstances must be open to challenge.

40. So, for these reasons, I have come to the conclusion that the decision of the 2nd Respondent in upholding the Notice to Quit cannot be allowed to stand.

41. For the sake of completeness, I should record that at the hearing, many other arguments were put forward by counsel. In the light of the reasons I gave above, I need not deal with them here but I would like to acknowledge counsel's assistance in rendering those arguments.

42. In the circumstances and in the exercise of my discretion, I make an order of certiorari quashing the decision of the 1st Respondent in issuing the Notice to Quit and the decision of the 2nd Respondent in confirming the Notice to Quit in terms of paragraphs 1 and 2 of the Notice of Motion, and I also make a declaration that the two decisions are null and void and of no legal effect as prayed for in paragraph 3 of the Notice of Motion.

43. As regards costs, I make an order nisi that (1) as between the Applicant and the 1st Respondent, the costs of the proceedings be paid by the 1st Respondent to the Applicant to be taxed if not agreed; (2) as between the Applicant and the 2nd Respondent, (a) the costs of proceedings incurred by the Applicant up to 28 August 2002 (when the 2nd Respondent wrote to the Court and the parties indicating that it would take a neutral stance in these proceedings) be paid by the 2nd Respondent to the Applicant to be taxed if not agreed, and (b) there be no order as to costs incurred thereafter; and (3) the Applicant's own costs be taxed in accordance with the Legal Aid Regulations (Cap. 91). Unless any party applies to vary the cost order nisi within 14 days after the date this judgment is handed down, it shall become absolute upon the expiry of the 14-day period.