RE AU KWOK HUNG

CACV 426/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 426 OF 2000

(ON APPEAL FROM HCAL NO. 147 OF 1999)

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J U D G M E N T

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Keith JA (giving the judgment of the Court):

Introduction

1. This appeal raises a short but by no means easy point on the powers of the appeal panel appointed under the Housing Ordinance (Cap. 283) ("the Ordinance"). The question is whether the panel can entertain an appeal if the appeal is lodged out of time. The panel decided that it could not. On an application for judicial review of that decision, Hartmann J agreed. The would-be appellant now appeals to the Court of Appeal.

The facts

2. The facts are not in dispute. In January 1998, the Housing Authority let a flat on an estate in Ngau Tau Kok to Au Kwok Hung. The rent was $480.00 a month payable in advance on the first day of each month. The tenancy was for an initial period of 52 days, after which it became a periodic monthly tenancy. After the first 52 days of the tenancy, the Housing Authority was entitled to terminate it by one month's written notice expiring at the end of any calendar month. Mr Au lived in the flat on his own.

3. In February 1999, Mr Au went to the Mainland to spend the Lunar New Year holiday with his family. He was intending to return to Hong Kong in April. Unfortunately, he fell ill while he was away and had to undergo surgery. While he was convalescing in the Mainland, he was re-admitted to hospital for treatment for another condition. As a result of these problems with his health, he did not return to Hong Kong until 14 July. While in the Mainland, he had either neglected or been unable to pay to the Housing Authority the monthly rent on his flat.

4. As a result of Mr Au's failure to pay the rent, the Housing Authority decided to terminate his tenancy. A written notice to quit dated 30 April was served on him by attaching it and an accompanying letter to the entrance to his flat. The notice to quit required him to vacate the flat by 31 May. When this had not been done, the flat was re-possessed, and Mr Au's personal belongings were removed to a place of storage.

5. Although the terms of the tenancy agreement had permitted the Housing Authority to terminate Mr Au's tenancy by a notice to quit, the Housing Authority had decided to terminate Mr Au's tenancy under section 19(1)(b) of the Ordinance, which provides (so far as is material):

".... the Authority may terminate the lease .... 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."

The effect of terminating Mr Au's tenancy under section 19(1)(b) was to prevent Mr Au from applying to the courts for any relief against the termination of the tenancy. That was the consequence of section 19(3) of the Ordinance, which provides:

"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."

However, the ouster of the court's jurisdiction was ameliorated by a statutory right of appeal to an appeal panel appointed under section 7A(1) of the Ordinance. That right of appeal appears in section 20(1) of the Ordinance, which provides (so far as is material):

"Where .... a notice to quit has been given under section 19(1)(b), the tenant may appeal to the panel .... not later than 15 days after the date on which .... notice to quit has been given under section 19(1)(b) .... :

Provided that where the chairman of the panel is satisfied that the tenant is unable to appeal by reason of ill-health, absence or other cause thought sufficient by the chairman, he may permit an appeal to be made on behalf of the tenant by a person authorized under the lease to occupy the land or part of it."

6. On his return to Hong Kong, Mr Au discovered that the lock to his flat had been changed and his personal belongings removed. He did not see the notice to quit. On the following day, i.e. 15 July, he went to the estate office to find out what had happened. He was told about the notice to quit which had been issued on 30 April because the rent due for the months of March and April had not been paid. He was also told that he could lodge an appeal if he wanted to. On 18 July, he wrote to the estate office asking for his flat be restored to him. There is no evidence as to whether he received a response to that letter, and eventually on 10 August he wrote to the appeal panel. This letter was treated as his notice of appeal.

7. The secretary to the panel decided not to pass Mr Au's letter to the panel because he took the view that the panel's jurisdiction to consider Mr Au's appeal had not been engaged since the 15-day time limit had expired some time previously. On 27 August, he wrote to Mr Au to that effect. That is the decision to which the application for judicial review related, the decision being treated as the decision of the appeal panel itself.

The conventional approach

8. Many Ordinances do not identify what the consequences of a failure to comply with a procedural requirement should be. The consequences of such a failure have conventionally depended upon whether the requirement has been imperative (or mandatory) or merely directory. This distinction was explained by Lord Penzance in Howard v. Bodington (1877) 2 PD 203 at p. 210:

"Now the distinction between matters that are directory and matters that are imperative is well known ... A thing has been ordered by the legislature to be done. What is the consequence if it is not done? In the case of statutes that are said to be imperative, the Courts have decided that if it is not done the whole thing fails, and the proceedings that follow upon it are all void. On the other hand, when the Courts hold a provision to be .... directory, they say that, although such provision may not have been complied with, the subsequent proceedings do not fail."

Thus, if the requirement is imperative, the failure to comply with it will normally be regarded as incapable of being remedied. But if the requirement is merely directory, the failure to comply with it will usually be regarded as something which is capable of being ignored. The conventional approach was adopted by the Court of Appeal in The Appeal Tribunal v. de Kantzow [1992] 1 HKLR 55. Thus, the time limit on bringing a statutory appeal under the Buildings Ordinance (Cap. 123) was held to be imperative, and the appeal tribunal's jurisdiction to hear the appeal was held not to have been engaged.

The modern approach

9. However, the criticism of the conventional approach is that it concentrates too much on labels. What is the point in labelling the procedural requirement as imperative or directory if there is at the same time no method for determining which is the correct label to apply? This led the English Court of Appeal in R. v. Secretary of State for the Home Department ex p. Jeyeantham [2000] 1 WLR 354 to adopt a far more principled approach. The conventional approach was said by Lord Woolf MR (at p. 358F-G) to distract

".... attention from the important question of what the legislator should be judged to have intended should be the consequence of the non-compliance. This has to be assessed on a consideration of the language of the legislation against the factual circumstances of the non-compliance."

10. If the critical question is what the legislature should be regarded as having intended to be the consequence of the non-compliance, how is that intention to be ascertained? At p. 362D-E, Lord Woolf said that three questions are likely to be of assistance:

"1. Is the statutory requirement fulfilled if there has been substantial compliance with the requirement and, if so, has there been substantial compliance in the case in issue even though there has not been strict compliance? (The substantial compliance question.)

2. Is the non-compliance capable of being waived, and if so, has it, or can it and should it be waived in this particular case? (The discretionary question.) I treat the grant of an extension of time for compliance as a waiver.

3. If it is not capable of being waived or is not waived then what is the consequence of the non-compliance? (The consequences question.)"

He added that which of these questions will arise will depend upon the facts of the case and the nature of the particular requirement, and that the second and third questions can often be decided together.

The need for strict compliance

11. We have no doubt what the answer to the first question is. Whether a requirement has to be strictly complied with, or whether substantial compliance with it is sufficient, will depend on the nature of the requirement. Take an appeal which is required to be lodged on a particular form, which requires a number of particulars to be completed, including, for example, the appellant's telephone number (not because his telephone number is relevant to the merits of his appeal but so that the appeal panel can communicate with him easily). In such a case, it is likely that a failure to comply with the requirement to give one's telephone number will not be regarded as fatal, and that the lodging of the form without the telephone number will be regarded as substantial compliance with the requirement to complete the particulars and a sufficient compliance to render the statutory requirement fulfilled.

12. But the position is different when the requirement consists of doing a particular act by a particular date. We really cannot see how such a requirement can be regarded as anything other than a requirement which has to be complied with strictly. Why should a requirement, which consists simply of doing something by date X, be regarded as having been complied with (albeit substantially) if it is only done by date Y? And in relation to section 20(1), we have not discerned any basis for saying that that is what the legislature intended. In our opinion, the critical question in this appeal relates to the second and third questions which Lord Woolf posed.

The history of section 20 of the Ordinance

13. The Ordinance was enacted in 1973. Section 20(1) was not in its present form. Originally, the tenant had only ten days to bring his appeal. However, two amendments were made to section 20(1) in 1982. First, the time limit for bringing an appeal was increased to 15 days. Secondly, the proviso was added to cater for a tenant's inability "by reason of ill-health, absence or other cause" to bring the appeal himself. In that event, the appeal could be lodged on a tenant's behalf "by a person authorized under the [tenancy] to occupy the [flat] or part of it". For practical purposes, that simply meant that the notice could be lodged by a member of the tenant's family living with him in the flat, though it still had to be lodged within the 15 days from the date on which the notice to quit had been given.

14. What is significant is that at no time has the legislature thought it appropriate to provide for extending the time within which an appeal must be brought - not even when it was decided in 1982 to increase the time limit and to permit an appeal to be brought in a representative capacity. Thus, there has never been an express provision conferring on the appeal panel (originally the appeal committee) the power to enlarge the period within which a tenant must bring the appeal.

15. The absence of an express power to extend the time limit suggests that the legislature had in mind one of two alternatives. On one view, the legislature could have had in mind that the failure to bring an appeal within the time limit would be an absolute bar to the appeal proceeding. If that was so, the panel's jurisdiction would simply not have been engaged. Alternatively, the legislature could have had in mind that the appeal should go ahead even if it was brought outside the time limit, leaving it to the panel to include any delay in bringing the appeal as one of the factors which it would be taking into account in deciding whether the appeal should be allowed or dismissed.

The preferable alternative

16. In deciding which of these two alternatives the legislature had in mind, it is entirely legitimate, as Hartmann J held, to take into account the policy underlying the enactment of the Ordinance, which was to create a body - the Housing Authority - to be responsible for the provision of public sector housing for people who may be unable to buy or rent for themselves suitable housing in the private sector. Hartmann J took judicial notice, as do we, that there is considerable pressure on the Housing Authority to secure housing for an extensive waiting list of applicants. It follows that when a flat becomes available, any repairs or redecoration have to be carried out quickly so that the flat can be allocated to persons on the waiting list as soon as reasonably possible.

17. It is against that background that Hartmann J placed considerable reliance on certain provisions in the Ordinance. If a tenant remains in occupation of the flat after his tenancy has been terminated, he will be treated as a trespasser (section 19(2)), and steps may be taken to effect his removal from the flat (sections 21(1) and 21(3)). But if a tenant brings an appeal, he is not deemed to be a trespasser until his appeal has been determined (section 21(2)). This led Hartmann J to conclude:

"If it was intended that the 15 day time limit was directory only, it would mean that a tenant who was already evicted could appeal out of time. He would not then be deemed to be a trespasser and would be entitled presumably to return to his accommodation - whether under repair and redecoration or not - and remain there until his appeal was decided."

Thus, if an appeal could be brought at any time after the 15-day time limit, with the result that the tenant was entitled to have his flat restored to him in the meantime, the policy underlying the Ordinance would be frustrated. That strongly suggests that the legislature had in mind that a failure to comply with the time limit should be an absolute bar to the appeal proceeding. We agree with this reasoning.

18. There is another reason which convinces us that that was what the legislature had in mind. If, when the Ordinance was originally enacted, the legislature had it in mind that an appeal could be brought at any time after the 10-day time limit, what was the point in increasing the time limit to 15 days? The legislature in 1982 must be regarded as having thought that an appeal could only be pursued if it was brought in time. Indeed, that is what the promoter of the amendment, the Secretary for Housing, informed the Legislative Council:

"Section 20 of the Ordinance gives an Authority tenant the right of appeal against termination of his tenancy, providing the appeal is lodged within ten days of the serving of the notice of termination": Hong Kong Legislative Council, Reports of Debates, 10 February 1982 (emphasis supplied).

19. We recognise, of course, that what we think the legislature had in mind is, in theory at least, capable of causing an injustice in an extreme case. Take the case of a tenant living alone who is involved in a truly disabling accident and is in hospital for many months incapable of looking after his affairs. He will have fallen into arrears with his rent, and if the Housing Authority is unaware of his plight, he will suffer exactly the same consequences as Mr Au through no fault of his own. But even if he is denied the opportunity to appeal out of time, the legislature may well have thought that it was more desirable for the Housing Authority to be relieved of the problem of late appeals. If there were meritorious cases which truly deserved to be re-considered, the Housing Authority could re-consider them itself. Although the tenant would not be able to appeal to the panel, there would be nothing to prevent the Housing Authority from re-considering his case. We refrain from making any comment on what the Housing Authority should do on a re-consideration of Mr Au's case, but it could be said that knowing that he was to be out of Hong Kong until April, he should have made arrangements before he left Hong Kong for the payment of the rent due on 1 March and 1 April. However, there may be a good explanation for him not having done that, and we do not comment on the matter further.

20. For these reasons, our answer to the second and third questions posed by Lord Woolf is that a failure to comply strictly with the time limit in section 20(1) is not capable of being waived, and that the consequence of such a waiver is that there is an absolute bar to the appeal proceeding.

Miscellaneous points

21. There are four other points made by Mr S. H. Kwok on behalf of Mr Au upon which we should comment. First, Mr Kwok pointed out that section 20(1) provided that "the tenant may appeal ...." - language which is permissive and procedural only. That is so, but the fact that a tenant is under no obligation to appeal does not help in any way as to what the consequences should be of a failure to appeal in time. Moreover, the fact that the time limit is a procedural provision is irrelevant. The question still is what should be the consequence of a failure to comply with the provision, even though it is procedural in nature. As Hartmann J said, the law has long recognised that a failure to comply with statutory time limits for bringing appeals which are procedural in nature may well prevent the jurisdiction of the appellate tribunal from being engaged. De Smith, Woolf and Jowell, "Judicial Review of Administrative Action", 5th ed., contains the following illuminating passages at paras. 5-024 and 5-026:

"A number of statutes, particularly in the areas of housing, town and country planning and compulsory acquisition, precluded challenge to the validity of decisions made outside a limitation period within which statutory appeals are available. .... The principal justification for regarding a clause containing a time limit as an effective bar to review after the time limit has expired is that the legislator, having created a statutory remedy, is entitled to limit the availability of that remedy. This can be the case even where the time limit is too short to enable the order or decision to be challenged in some situations. The use of limitation periods to prevent the assertion of legal rights is, after all, a perfectly familiar feature of the legal system. Furthermore, there can be an obvious public interest in enabling public or private works to be commenced and resources to be committed in reliance upon the legal invulnerability of an apparently valid order."

22. Secondly, Mr Kwok pointed out that when a tenant wishes to bring an appeal under section 20(1), he has to serve a notice of appeal on the secretary to the panel. The secretary to the panel then has to provide the Housing Authority with a copy of it. Mr Kwok pointed out that there is no time limit for the secretary to do that. Thus, Mr Kwok's skeleton argument contained this point:

"If the legislature intends that time is of absolute importance, a time limit must also be imposed on the Secretary for him to furnish the notice to the Authority. There is no point in imposing a time-limit on appellants only without time limits on the Secretary if a mandatory time-table is meant to be maintained so as to ensure appeals are to be heard within a strict time table."

We cannot go along with this argument. The fact that the legislature thought it appropriate for appeals only to proceed if they were brought within a specified time does not mean that it was necessary to provide for a time limit within which the secretary to the panel had to provide the Housing Authority with a copy of the notice of appeal. The legislature may well have assumed that, in the normal course of events, the secretary to the panel would do that as soon as he received the notice of appeal, and that it was not necessary to stipulate a time for that to be done.

23. Thirdly, Mr Kwok developed an interesting argument along the lines that to construe section 20(1) as barring a tenant who failed to comply with the time limit from appealing would be tantamount to denying an aggrieved tenant (a) his constitutional right at common law of access to the courts and (b) the right guaranteed to him by Art. 14(1) of the International Covenant on Civil and Political Rights ("the ICCPR") (as applied to Hong Kong by Art. 39 of the Basic Law) to have his civil rights determined at "a fair and public hearing by a competent, independent and impartial tribunal established by law". The hearing by the appeal panel was necessary because his right of access to the courts had been removed by section 19(3) of the Ordinance (to which we have already referred). We cannot go along with this argument. An aggrieved tenant is not being denied a hearing of the kind contemplated by Art. 14(1). His entitlement to that hearing is simply subject to a time limit, and as the European Court of Human Rights held in Pérez de Rada Cavanilles v. Spain (1998) 29 EHRR 109 at paras. 44 and 45 (a case concerning Art. 6(1) of the European Convention on Human Rights, being the equivalent of Art. 14(1) of the ICCPR), access to the courts

".... is not absolute; it is subject to limitations permitted by implication ... The rules on the time limits for appeals are undoubtedly designed to ensure the proper administration of justice and compliance with, in particular, the principle of legal certainty."

The justification for the imposition of an absolute time bar for appellants to the appeal panel under the Ordinance which we have identified are in our view sufficient to prevent the time bar from being incompatible with the rights guaranteed by Art. 14(1).

24. Fourthly, in the course of argument, Mr Kwok stated that he was not asking the court for an order requiring the panel to hear Mr Au's appeal - which was the order sought in the notice of application for leave to apply for judicial review. Instead, he was asking the court for an order merely requiring the panel to consider whether Mr Au's appeal should be heard. For the reasons we have given, we are not persuaded that that course would have been open to us, even if we had wanted to take it. It is inconsistent with the absence of an express power conferred on the panel to enlarge the appellant's time. But as we have said, if we had taken the view that the appeal could have proceeded despite the failure to comply with the time limit, the delay in bringing the appeal could have been a factor to have been taken into account in deciding whether the appeal should be allowed or dismissed.

Conclusion

25. For these reasons, we dismiss this appeal. At present, we see no reason why costs should not follow the event. The order nisi which we therefore make as to costs is that Mr Au must pay to the appeal panel its costs of the appeal to be taxed if not agreed. But since we assume that Mr Au is legally aided, we also order nisi that

(a) there be legal aid taxation of Mr Au's own costs, and

(b) but for the order for legal aid taxation of Mr Au's own costs, this order be not enforced without the leave of the Court of First Instance or the Court of Appeal.