KO CHUN KWEI v. THE COMMISSIONER FOR TELEVISION AND ENTERTAINMENT LICENSING

IN THE COURT OF APPEAL

1993 No. 106
     (Civil)

HEADNOTE

Licence holder of an amusement game centre licence - when making application to increase the number of machines, he misdescribed the premises. His next application for a new licence was made in identical terms. TELA took the view that this was misconduct in supplying false information and invited representations from the licence holder. When the licence holder did not respond, TELA revoked the licence. On appeal to a single judge, it was held that the licence holder was not guilty of any misconduct. Reversing the single judge, the Court of Appeal was satisfied that there was ample material before the Commissioner to warrant her conclusion that false information had been knowingly supplied.

IN THE COURT OF APPEAL

1993 No. 106
    (Civil)

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J U D G M E N T

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Power, V.-P. :

1. Mr. Ko, the respondent to this appeal, on 10th June 1988, was a licence holder with permission from the Commissioner for Television and Entertainment Licensing Authority (TELA) to conduct an amusement game centre situated at Room Nos.120-125 and 136-138 ("the licensed address") on the first floor of Melbourne Plaza, Queen's Road, Central. The licensed premises covered an area of 205.86 square metres. This area was on the building plan depicted as 9 shop spaces and an area of corridor. In 1988 Mr. Ko applied to increase the number of machines allowed to be operated on those licensed premises from 59 to 65. The application was granted on 19th August 1988. His licence was renewed in 1988 and in 1989 and on 19th May 1990 he signed a document which is headed "Application for increase of machines in a game centre" In this application which the respondent signed he applied to increase the number of machines at the licensed address. The address given in the application was that of the licensed address.

2. On the face of it this was a straight forward application to increase the number of machines on licensed premises. However, the accompanying layout plan, although it set out the licensed address, also had depicted thereon a configuration which was different in shape and size to that of the licensed premises being 279.72 square metres, Other materials which has been placed before us, shows that this area was, in fact, made up of rooms 118-123 and 136 to 138 and a large area of corridor. Rooms 124 and 125 formed no part of it but Rooms 118 and 119 were included in it. This plan was chopped by a TELA officer and returned to the applicant in a letter dated 7th June 1990 which granted the application. The letter indicated that the licensed premises at the address was permitted to have thereon the increased number of machines.

3. Whatever Mr. Ko may have thought, and we shall come to that later, this approval, if it related to an area different from the original licensed area, was wholly irregular and ineffective. Any altered area could only have been lawfully operated if a new application for a licence had been made and granted.

4. After this application was granted, Mr. Ko surrendered Shops 124 and 125 and leased 118 and 119. On 31st August 1990 he applied to renew his licence. In that application which was signed by him he again used the licensed address and again submitted a plan in support of the application which was the same as that used for the application to increase the number of machines, i.e. one setting out the licensed address and one delineating the larger area.

5. I pause here to remark that had the new area been truly described, giving its correct address, the Commissioner for Television and Entertainment would have been required to reject both the application to increase and the application to renew, and to tell Mr. Ko that he would have to apply for a new licence. That position however did not come to light until early in 1991 when, as a result of an I.C.A.C. investigation, facts became known to the Commissioner, in consequence of which she wrote to Mr. Ko on 20th March 1991. In this letter she said:

"Dear Sir,

Recent site visits have revealed that the centre is now operated at Shop Nos.118-123 and 136-138 of the above address. Shop Nos.124 and 125 no longer belong to the centre while Shop Nos.118 and 119 are being used as an amusement game centre. It has also been brought to my attention that false information was supplied by you in support of your various applications, including the one for renewal of licence submitted on 31 August 1990.

I take a very serious view of your misconduct in supplying false information to this Authority and conducting an amusement game centre not in accordance with the licence issued to you. In this regard I intend to revoke your licence under Section 5(2) of the Miscellaneous Licences Ordinance on the ground that you are considered to be unsuitable to hold such licence.

You are invited to make any representations you consider appropriate within fourteen days of this letter. In the absence of a reply after the specified period, I would assume that you do not wish to comment."

6. There was then an exchange of letters between the solicitors for Mr. Ko and the Commissioner in which the solicitors raised certain queries. The upshot of it was that on 6th April Mr. Ko's solicitors replied saying:

"We thank you for your letter dated 3rd April 1991.

Our client disputes the findings and allegations made by you in your two letters dated 20th March 1991 and 3rd April 1991 respectively."

7. On 19th April the Commissioner wrote to the solicitors for Mr. Ko saying:

"As you did not put forward any arguments or information in your letter of 6 April 1991 and the extended period for submitting representation has expired, I have decided to exercise my discretion under Section 5(2) of the Miscellaneous Licences Ordinance to revoke the captioned licence effective from 26 April 1991."

8. On 24th April Mr. Ko sought by judicial review to quash the decision of the Commissioner and to reinstate his licence.

9. The matter then went through a number of hearings which do not concern us today before finally being dealt with by Mayo J. on 26th April 1993. On 5th May he handed a decision granting the relief sought. He held:

"Although neither of the layout plans contains the numbering of the shop spaces it is not difficult to see what area is included. Certainly if anyone from the TELA had attended at the 1st floor of Melbourne Plaza they would encounter no difficulty in determining the area referred to by reference to the layout plans. In my opinion it would have been reasonable for the Applicant to assume that someone at TELA would inspect the premises by reference to the new layout plan.

So far as the evidence before me was concerned there was no evidence at all that the Applicant was aware that he had in any way contravened either the terms of his licence or the provisions of the Ordinance including its subsidiary legislation. All there is evidence of is a misdescription of the premises."

And the Judge went on:

"As the Respondent had not in my view on the limited facts I have earlier outlined established that the Applicant had been guilty of any misconduct or been in breach of his licence, I consider that his decision to revoke the licence was ultra vires. I also consider that it was unreasonable in a Wednesbury sense. There were no grounds for him to reach a conclusion that the Applicant was not a suitable person to hold a licence."

10. Insofar as the trial judge considered that the question before him was whether the Commissioner had established that the applicant had been guilty of any misconduct or been in breach of his licence he was in error. The question for him properly put was whether there was material before the Commissioner from which she could reasonably be satisfied that Mr. Ko was guilty of misconduct in that he attempted to mislead officers of TELA by giving false information to them.

11. Mr. Whitehead, for the appellant, really relies upon two grounds in this appeal. Firstly that there was evidence or material before TELA upon which she could be satisfied as to misconduct, and secondly that the trial judge took into account matters not relevant to the proper determination of the matter. As to the second ground the principal complaint and the only one with which we need to deal arises out of the use of the words:

Certainly if anyone from the TELA had attended at the 1st floor of Melbourne Plaza they would encounter no difficulty in determining the area referred to by reference to the layout plans.

Mr. Whitehead submits that the issue was not whether someone might have decided to inspect, but whether Mr. Ko intended, when he made the documents, to mislead. This is so. However, it must be said that the trial judge was, when he made that observation, considering whether Mr. Ko might have had an intention to deceive. He was in effect saying it is unlikely that he would have an intention to deceive if he bore in mind the likelihood that someone could go and inspect the premises.

12. That, however, was not the real issue which is contained in the first ground. Mr. Whitehead points out that both the application to increase a number of machines and the application to review was clearly on their face misleading and that they would have been seen to be so by anyone knowing the true facts let alone the licensee who controlled the premises and who signed the application and the plans. He submits that the fact that the configuration was different does nothing to help Mr. Ko as the address thereunder clearly suggested that that configuration represented the licensed premises at the licensed address. Mr. Whitehead points out that when the Commissioner made her decision Mr. Ko had said nothing to suggest any reason why a conclusion of deliberate intention to mislead should not be drawn and that the Commissioner was entitled to come to that conclusion.

13. Mr. Warren Chan, who appears for Mr. Ko, submits that the address which appeared in the two documents to which we have made reference was a mere misdescription and that the real position was revealed by the configuration that appeared on the plan. He submits that there is nothing to indicate that Mr. Ko was not simply mistaken in thinking that he could, by way of an application, increase the number of machines and change and increase the licensed area. He submits that the fact that the TELA officer had chopped the plan which bore the configuration would have led anyone to believe that the application was approved. He submits further that there was nothing to prove any intention to mislead and there was no material from which such an intention could be inferred. We cannot agree. The facts speak for themselves. There was, we are satisfied, ample material before the Commissioner sufficient to warrant her concluding that false information had been knowingly supplied by the applicant to her officers.

14. This appeal must, therefore, be allowed.

Litton, J.A.:

15. This case falls within a narrow compass. It is regrettable that it has taken two and three-quarter years to reach this court. The point is simply this. Was the decision of the Commissioner set out the letter of 19th April 1991 to revoke the Amusement Game Centre licence null void and of no effect in law ? The decision to revoke was made under s.5(2) of the Miscellaneous Licences Ordinance Cap.114 which states:

"[The officer authorized to issue a licence] may revoke a licence granted to a person on proof to his satisfaction of an offence against this Ordinance or other misconduct by such person."

The decision is that of the Commissioner. It is Mr. Ko's case that the decision was ultra vires and "Wednesbury unreasonable". Note this. In proceedings by way of judicial review to impeach the Commissioner's decision the question is not whether the court is satisfied on the evidence before it that the licensee was guilty of misconduct. The proper question is simply whether the Commissioner acted within the law when she said she was satisfied on the material before her that the licensee was guilty of misconduct. Accordingly when the judge said at p.9 of his judgment:

"As the Respondent (the Commissioner) had not in my view on the limited facts I have earlier outlined established that the Applicant had been guilty of any misconduct or been in breach of his licence," (emphasis added)

he plainly was wrong. He applied the wrong test. The only thing the Commissioner had to establish was that on the material before her in April 1991 she acted within the law in concluding that Mr. Ko was guilty of misconduct.

Background Facts

16. The premises in which the Amusement Game Centre was licensed to operate were shops No.120-125 and 136 to 138, first floor, Melbourne Plaza. Mr. Ko first became the licensee in June 1988. In August 1988 he was allowed to increase the number of machines installed in those premises from 59 to 65, an increase of 6. The application was accompanied by a layout plan showing the location of each of the 65 machines and also another layout plan showing the area occupied by the Centre on the first floor of Melbourne Plaza. This application was approved. In November 1988 the licence to operate on those premises was renewed for one year and renewed again in November 1989.

Application to increase the number of machines

17. On 19th May 1990 Mr. Ko made another application to increase the number of machines from 65 to 108. In his application form he identified the premises in which the machines were to be installed as the original premises: shops No.120-125 and 136-138. There was a layout plan which accompanied this application. The "box" below the layout plan described the premises as the licensed premises. The application was approved. The application made by Mr. Ko was plainly misleading. The original licensed premises could not have accommodated 108 machines. Mr. Ko's intention was to relocate the Amusement Game Centre partly in the shop spaces originally designated and partly in two other shop spaces Nos.118 & 119, and in the process to enclose part of the corridor leading to a set of stairs on the first floor of Melbourne Plaza. Two shop spaces Nos.124-125 were to be given up.

18. If one had examined the layout plan minutely and compared that with the original plan, Mr. Ko's intention would have been apparent. However, if the officer dealing with the application had simply applied his mind to the question whether the space shown in the layout plan was sufficient to accommodate the increased number of machines, then Mr. Ko's intentions would not have been apparent. There was a significant omission in that the layout plan as submitted, compared with the old one, did not show the position of the Amusement Game Centre within the first floor of Melbourne Plaza. The plan itself did not identify the new shop numbers as such.

19. Mr. Warren Chan, counsel for Mr. Ko, said that the error was a mere misdescription of the premises. That seems to me a charitable label to apply to what Mr. Ko did. In describing the premises in which the 108 machines were to be installed as the licensed premises, he had effectively avoided scrutiny as to whether the enlarged premises were suitable for an Amusement Game Centre.

20. On 31st August 1990 Mr. Ko applied to renew his existing licence. By that time the Centre was being operated in the enlarged premises comprising shops 118, 119 and the enclosed corridor. Yet Mr. Ko described the premises as the old premises. Obviously, if he had given an accurate description of the premises in his application to renew, it would not have been simply a matter of renewal of an existing licence; he must have known that the licence as granted by the Commissioner was attached to the original premises; the renewal must plainly be confined to those premises. The effect of what occurred was that Mr. Ko was operating his Centre in unlicensed premises, contrary to Regulation 15 of the Miscellaneous Licences Regulations.

21. When these matters were put to Mr. Ko by letter dated 20th March 1991, the response was equivocation on his part. Receiving no satisfactory answer the Commissioner exercised the power to revoke on 19th April 1991.

The judge at p.8 of his judgment said:

"So far as the evidence before me was concerned there was no evidence at all that the Applicant was aware that he had in any way contravened either the terms of his licence or the provisions of the Ordinance including its subsidiary legislation. All there is evidence of is a misdescription of the premises."

It seems to me that the evidence was at least capable of leading to the conclusion that, in his application dated 19th May 1990, Mr. Ko intended to pull the wool over the eyes of the Authority. The layout plan told half the story. Arguably, it was so intended. This misleading picture was repeated in the subsequent applications to renew the licence. The Commissioner was, in my view, perfectly entitled to so conclude, particularly when, given the opportunity to refute any adverse inference being drawn, Mr. Ko through his solicitors declined to do so.

I agree with my Lord the Vice-President that this appeal must be allowed and the order made by the judge in the court below be discharged.

Rhind, J.:

22. I agree.

Power, V.-P. :

23. The appellant is to have costs both here and below.