CHUN SAI WAH v. HONG KONG HOUSING SOCIETY AND ANOTHER

HCAL 56/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW PROCEEDINGS

NO 56 OF 2015

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D E C I S I O N

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INTRODUCTION

1. This is an application for leave to apply for judicial review (commenced in April 2015 (the Form 86 was amended in August 2015)).  There is a related summons for time extension to so apply.  The applicant (“Mr Chun”) is and was the occupier of a unit in one of the public housing estates of the 2^nd putative respondent ( respectively “the subject unit” and “HKHA”).

2. The 1^st putative respondent (“HKHS”) was the developer and vendor of the residential units of a development called “Greenview Villa”.  Mr Chun’s son (“Chun’s son”) is and was the purchaser of one of those units (respectively “the subject sale and purchase” and “the purchased unit”).

3. This application seeks various relief which in effect is aimed at compelling:

(a)   HKHS to rescind its sale and purchase agreement with Chun’s son;

(b)   HKHA not to make Mr Chun surrender the subject unit, or to make him deliver up vacant possession of the subject unit.

4. It is noted that Chun’s son has not been named by Mr Chun as an interested party, and was absent during the inter partes hearing.

BACKGROUND

5. Mr Chun is now in his 70s, and suffers from serious cataract (he claims it was impossible for him to see clearly).  His wife is in her 60s, and suffers from senile dementia and muscle disease.  Chun’s son (now about 34 years old) is an architect.

6. The family has been residing in the subject unit, which is a public housing unit in an estate in Tsuen Wan, for over 30 years (since 1982).

7. “Greenview Villa” is one of the subsidized residential projects of HKHS for sale to the public.  For those who are already residing in a public housing unit (such as Mr Chun), they were allowed to make an application to purchase a unit using what has come to be known as a “Green Form”.  When such an application is made, the applicant is required (in the “Green Form”) to undertake to:

(1)   issue to HKHA a notice to quit the public housing unit;

(2)   surrender the said housing unit upon completion of the sale and purchase, and upon his taking possession of the unit purchased from HKHS.

8. The dispute concerning the subject sale and purchase (and the purchased unit) will be set out below.  But as a matter of factual chronology:

(1)   a “Green Form” dated 18 January 2013 signed by Mr Chun, his wife and Chun’s son was submitted to HKHS for the purpose of the subject sale and purchase (“the subject GF”).  Chun’s son was named as the applicant thereof;

(2)   following established administrative procedures, the subject GF was sent to HKHA essentially for verifying the particulars. Upon such verification, the subject GF was sent to HKHS for further processing;

(3)   being satisfied that the application should proceed, the subject GF was approved by officers of HKHS beginning on 3 March 2013.  The final approval was given on 8 March 2013;

(4)   a declaration in Chinese dated 17 April 2013 states that Mr Chun understood he would issue a written notice of termination to HKHA when he accepts the purchased unit (“the Chinese declaration”).  The Chinese declaration was signed by Chun’s son on behalf of Mr Chun; 

(5)   a preliminary sale and purchase agreement also dated 17 April 2013 was also entered into between HKHS (as the vendor) and Chun’s son (as the purchaser);

(6)   the subject sale and purchase was entered into between HKHS and Chun’s son on 23 April 2013;

(7)   the residential units of “Greenview Villa” were ready for completion, and the sale and purchase of the other units were completed, around July 2015 (in any event, a letter dated 20 July 2015 informed Chun’s son the deadline for completing the subject sale and purchase (but this was later in effect retracted)).

9. The dispute which gives rise to this application can be summarized as follows:

(a)   Mr Chun claims that, in January 2013, Chun’s son lured Mr Chun and his wife to sign some documents misstating that the same were about the application of Chun’s son to the tax authorities for dependent parent allowance; and they did so as a result;

(b)   in mid-2013, Chun’s son lured Mr Chun to give him $120,000 using the excuse that this was for paying for his wedding banquet; Mr Chun did so;

(c)    in May 2014, Mr Chun came to know of the untruthful when he received a letter from HKHA about the subject sale and purchase;

(d)   Mr Chun then confronted Chun’s son but the latter ignored Mr Chun.

10. In a letter dated 30 March 2015 from Chun’s son, he denied the above claim, asserting that:

(1)   Mr Chun could read with one eye (not suffering from cataract);

(2)   he never misled Mr Chun;

(3)   the cashier order of $120,000 (probably for deposit payment) was purchased by Mr Chun from a bank;

(4)   Mr Chun had submitted other “Green Forms” before and was well versed of the content;

(5)   Mr Chun’s claim (of having been cheated) only appeared when he in effect retracted from an earlier family arrangement (which in short was about Mr Chun residing in Shenzhen by himself, and allowing Chun’s son to reside in the purchased unit in return for Chun’s son taking care of his mother).

11. Up to the inter partes hearing of this application:

(a)   the subject sale and purchase has not proceeded to completion by Chun’s son or HKHS;

(b)   HKHA has not fixed a time for Mr Chun to surrender the subject unit, nor has it decided to recover possession of the same from Mr Chun.

(more details concerning these will be given below)

ISSUES IN THIS APPLICATION

12. The amended Form 86 seeks to challenge the following decisions:

(a)   the decision of HKHS contained in a letter dated 8 April 2015 (“the HKHS letter”);

(b)   the decision of HKHA contained in a letter dated 16 April 2015 (“the HKHA letter”).

It is alleged that, by those decisions, HKHS and HKHA decided to:

(1)   accept the subject GF;

(2)   continue with the subject sale and purchase;

(3)   compel Mr Chun to surrender the subject unit within 60 days from the possession of the purchased unit.

13. Below is a summary of the grounds put forth in support of this application:

(a)   there has been unfairness, or abuse of power, on the part of HKHS and/or HKHA in that they accepted the subject GF despite having been notified of the wrongful acts of Chun’s son;

(b)   HKHS’s decision not to rescind the subject sale and purchase is unreasonable in the Wednesbury sense (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 234);

(c)    HKHA’s decision to compel Mr Chun to deliver up possession of the subject unit is unreasonable in the Wednesbury sense;

(d)   the said decisions of HKHS and HKHA contravene art 29, The Basic Law of the Hong Kong Special Administrative Region (“Basic Law”).

14. HKHS opposes this application essentially on the following grounds:

(1)   the decision under challenge (that is, the HKHS letter) has not been made;

(2)   there is another venue for determining the dispute between Mr Chun and Chun’s son;

(3)   even if the decision had been made, it was a contractual decision which falls within the private law domain and is thus not amenable to judicial review;

(4)   any relevant decision made by HKHS is reasonable;

(5)   art 29, Basic Law is not engaged;

(6)   there has been a substantial delay on Mr Chun’s part in making this application.

15. HKHA opposes this application essentially on the following grounds:

(a)   the same ground as para 14(1) above. Consequently, this application is premature;

(b)   the same ground as para 14(5) above.

MR CHUN’S CASE AGAINST HKHS

(a)  Was the HKHS letter a decision ?

16. The relevant parts of the HKHS letter (para 12(a) above) are:

“We are instructed that [the Chinese declaration] is a standard document which [HKHS] requests a successful Green Form applicant to sign … As it is apparent from the contents of [the Chinese declaration], the purpose of [the Chinese declaration] is simply to notify the management office of the housing estate at which the successful applicant is then residing that the successful applicant understands that he must give notice to [HKHA] to terminate his tenancy and to surrender vacant possession of the premises when possession of [the purchased unit] is given to him.

…

[The subject GF] was duly signed by [Mr Chun] and his family members including [Chun’s son], [Mr Chun] has already agreed to give notice to [HKHA] to terminate his tenancy and to surrender possession of [the subject unit] in the manner stated therein, [HKHS] did not see any reasons why [Chun’s son] could not sign [the Chinese declaration] on behalf of [Mr Chun].

…

Further, [HKHS] also clarifies that it has not relied on [the Chinese declaration] in approving the application by [Mr Chun] and his family members under [the subject GF]. The fact is [the Chinese declaration] was only signed after [HKHS] had already approved the application.

[Mr Chun] does not dispute that he signed [the subject GF] and … [HKHS] did not have any notice and was not aware of [Mr Chun’s] allegations of undue influence or misrepresentation …

…

As [HKHS] is not privy to and has no knowledge of the dealings between [Mr Chun] and [Chun’s son], [HKHS] is not in a position to verify the truthfulness of [Mr Chun’s] allegations and that of [Chun’s son]. [HKHS] also notes that in the Police statement given by [Mr Chun], it was stated that [Mr Chun] could write and read Chinese and he understood that he had signed document(s) relating to the purchase of a property. These statements appear to be inconsistent with the allegations in your letter …

In the premises, [HKHS] is not prepared to accede to [Mr Chun’s] requests [that is, to permanently withhold from proceeding with the subject sale and purchase, not to compel Mr Chun to deliver vacant possession of the subject unit, to accept the Chinese declaration as being void, and so on]”.

17. In short, the part of this application concerning HKHS was commenced based on the above (especially the last paragraph of the quoted passage).

18. But the HKHS letter has to be understood in its proper context.  As stated above, the subject GF was approved in March 2013 (para 8(3) above), the subject sale and purchase was entered into in April 2013 (para 8(5) above) and Mr Chun came to know of the alleged deception in May 2014 (para 9(c) above).

19. The HKHS letter was dated 8 April 2015, about 2 years after the above events (para 18 above), and written in response to a letter from Mr Chun’s solicitors dated 28 January 2015.

20. Understood in such context, I agree with HKHS that the HKHS letter cannot properly be regarded as an independent decision (assuming for discussion’s sake that it was an administrative decision within the public law domain).  For this reason, HKHS is correct in complaining that:

“[this is an] attempt to circumvent [the delay problem] … [It is an attempt] to engineer or portray a ‘fresh’ or ‘continuing’ decision [which] is pure artifice of the kind deprecated by Hartmann J (as he then was) in §§217-[219] Super Lion Enterprises and Others v Commissioner of Rating and Valuation HCAL 71/2005, unrep. 6 October 2006 [citing R v Commissioner for Local Administration, ex parte Field [2000] COD 58, 60 and Lo Siu Lan and Ma Ki Chiu v Hong Kong Housing Authority CACV 378/2004]” (para 19, HKHS skeleton submissions) (emphasis supplied).

21. That the HKHS letter was not a self-standing decision is consistent with the subsequent history:

(1)   in a letter dated 20 July 2015 from HKHS’s solicitors (which appears to be a pro forma letter), HKHS gave written notice to Chun’s son to complete the subject sale and purchase;

(2)   in a letter dated 11 August 2015 from HKHS’s solicitors:

(a)   HKHS referred to the family affair (this must refer to the dispute between Mr Chun and Chun’s son) and intimated that Chun’s son would be unable to deliver up vacant possession of the subject unit;

(b)   HKHS in effect treated the said inability as an anticipatory breach of the subject sale and purchase;

(c)   in conclusion, HKHS held up the completion of the subject sale and purchase (and indicated that the letter of 20 July 2015 was wrongly sent and should be ignored).

(b)  Alternative venue

22. The only parties having direct personal knowledge of (and privy to) the dispute between Mr Chun and Chun’s son are themselves (and possibly also Mr Chun’s wife).  Neither HKHS nor HKHA has such knowledge, and if required to do so, they would have to make an assessment about the family dispute (between Mr Chun and Chun’s son) as an “outsider”.

23. This fact highlights why it is undesirable to proceed with a judicial review application, as opposed to Mr Chun pursuing a civil suit against Chun’s son.  The court in the former application would likewise have to determine, not the rights and wrongs between Mr Chun and Chun’s son, but whether HKHS and/or HKHA was/were entitled to make the above assessment.

24. The further fact that Chun’s son has not taken part in this application reinforces the undesirability; there is no proper means within the proposed judicial review to directly adjudicate on the underlying family dispute.  Added to this is the possibility of a potential conflicting outcome (for example, if Mr Chun were to succeed in the judicial review, and if Chun’s son should succeed in a (later) civil suit between him and Mr Chun (or vice versa)).

25. Mr Chun has not argued that it is legally impossible for him to commence legal proceeding against Chun’s son.  He rather argues that HKHS (and HKHA) would take action which would render such legal proceeding futile (that is, Mr Chun being compelled to surrender the subject unit before he successfully sues Chun’s son).

26. The argument has no substance in view of the matters set out in para 16 to 21 above.  Further, to put the matter beyond doubt, HKHS has during the hearing of this application indicated that it never had any intention not to abide by any court decision which determines the dispute between Mr Chun and Chun’s son.

27. That judicial review is a remedy of last resort is trite: Stock Exchange of Hong Kong Ltd v New World Development Co Ltd & Others (2006) 9 HKCFAR 234, para 114-117 and 130; Kwok Ping Sheung Walter v The Law Society of Hong Kong HCAL 73/2012 (27 September 2013), para 19.

(c)  Is HKHS’s decision amenable to judicial review?

28. Government’s policy to construct subsidized housing to sectors of the public is of course a matter properly falling within the public law domain.  But:

(a)   this application is not concerned with the legality or propriety of such policy;

(b)   not every act performed pursuant to such policy should similarly fall within the public law domain: Anderson Asphalt Ltd and Others v Secretary for Justice [2009] 3 HKLRD 215, para 57.

29. The sale of a piece of land by government, or a land grant by government to an individual, is often regarded as an act not falling within the public law domain; government is usually regarded as acting qua landlord in such instances (for example, Hung Hing and 66 Others v Director of Lands [2015] 5 HKC 468).

30. The subject-matter of this application has its origin in the sale of a residential unit (HKHS, though a statutory body, is treated as a public authority for the purpose of this discussion).  It therefore has its origin in a contractual context, where HKHS acts as the vendor, and Chun’s son as the purchaser.  The contracting parties’ rights and obligations are to be determined according to the contract terms between them. At least arguably, the dispute between Mr Chun and Chun’s son may also have a contractual dimension (that is, whether Mr Chun was deceived of the subject unit (and $120,000 (para 9(b) above)), or whether he had agreed to surrender the subject unit to enable Chun’s son to acquire the purchased unit).

31. That this is a matter of private contract is also illustrated by the analysis below.  Unless HKHS and HKHA can somehow be regarded as having a legal connection (which Mr Chun, in the absence of a valid basis (especially evidential basis), tried to argue during the hearing), HKHS and HKHA are different legal entities.  HKHS is not concerned with (and has no power regarding) whether Mr Chun can continue to reside in the subject unit, except to the extent this should constitute a breach of the terms of the subject sale and purchase.

(d)  Is HKHS’s decision unreasonable?

32. As observed above, HKHS would have to make an assessment of the dispute between Mr Chun and Chun’s son, without the benefit of direct knowledge, but only as an “outsider”.

33. Here I agree with HKHS that there is no substance in contending that the assessment made in the HKHS letter was unreasonable:

(1)   Mr Chun’s allegations are not accepted by Chun’s son, the party with whom HKHS has contracted.  Instead, Chun’s son denied those allegations (para 10 above);

(2)   it was impossible for HKHS, whose tasks were not to resolve such kind of dispute (and thus not equipped to do so), to undertake a proper (or comprehensive) investigation of such dispute;

(3)   the subject GF was signed by Mr Chun (para 8(1) above);

(4)   in any event, Mr Chun has contradicted himself when he reported the matter to the police.  In a police statement dated 20 May 2014, he was recorded as having stated:

“問(一) : 你知唔知簽文件係買樓?

答(一) : 我知買樓但係我唔知係要交返間 … 單位”.

Although Mr Chun made a statutory declaration on 9 February 2015 to clarify that he misunderstood the above statement when he signed the police statement, HKHS was not legally bound to accept the clarification (it is also noted Mr Chun said in the statutory declaration he was able to read the police statement (contrary to his case that he had lost his eyesight)).

34. Finally, I also agree with HKHS:

(a)   the subject GF was approved in March 2013, before Mr Chun complained to HKHS;

(b)   after Mr Chun has complained to HKHS, the weight to be attached to the matters to which HKHS should take into account is something for HKHS (unless HKHS has acted perversely, or against the weight of the totality of the evidence, or has wrongly applied the legal principles): for example, BH v Director of Immigration HCAL 105/2014 (14 April 2015, para 63-65.  Bearing in mind para 33 above, no such error can be found.

35. There is no merit in this ground.

(e)  Art 29, Basic Law

36. This article reads:

“The homes and other premises of Hong Kong residents shall be inviolable. Arbitrary or unlawful search of, or intrusion into, a resident's home or other premises shall be prohibited.”

37. Mr Chun’s case here only becomes arguable if his allegations above are accepted.

38. By reason of the matters set out above (and bearing in mind para 28(a) above), HKHS is not legally bound to make factual conclusions in Mr Chun’s favour.  Such being the case, there is nothing wrong for HKHS to insist on Chun’s son performing the subject sale and purchase (even if HKHS had in fact done so).  Similarly, although HKHS has not done so, HKHS would have been entitled to insist on the undertakings given in the subject GF to be performed, without acting “arbitrarily or unlawfully” within the meaning of art 29, Basic Law.

(f)  Delay

39. By virtue of matters set out in para 8(3), 9(c) and 16 to 21 above, there has been substantial delay (of about a year from May 2014 to April 2015) on Mr Chun’s part.

40. In this connection, the observations of Hartmann J (as he then was) in Law Chun Loy v Secretary for Justice on behalf of the Chief Executive of the Hong Kong Special Administrative Region HCAL 13/2005 (26 October 2006) are repeated as a reminder of the need to act promptly:

“… the court may refuse permission to grant leave unless it considers that there is good reason for extending the period. But even if it considers that there is good reason, it may still refuse to grant leave if it believes that the granting of the relief sought would be likely to cause hardship or prejudice or would be detrimental to good administration.

What must also be emphasised is that O.53, r.4(1) does not permit an applicant simply to sit back and wait until the three month period stated in the order is drawing to a close before instituting action. The primary requirement of O.53, r.4(1) is promptness. The fact that an application has been made within three months does not necessarily mean that it has been made promptly. There may be occasions when an applicant who has filed his application for leave within the three months time period will still be judged to be guilty of undue delay.” (emphasis supplied)

MR CHUN’S CASE AGAINST HKHA

41. The evidence adduced in this application shows that HKHA has not even threatened to re-possess the subject unit without regard to whether the subject sale and purchase would be completed.

42. The HKHA letter said this:

“We refer to your letters dated 28 January 2015 and 26 March 2015 ...

We understand that [HKHS] has given reply to you through [the HKHS letter] …

Regarding [the Chinese declaration] … we would like to point out that [HKHA] has no participation nor involvement whatsoever …

You would note from [the subject GF] which was duly signed by [Mr Chun] and his family members, [Mr Chun] has declared that:- (1) he agrees that [Chun’s son] should be the applicant for [the purchased unit] and (2) [Mr Chun] undertakes that upon the successful purchase of [the purchased unit] and upon taking possession of the said flat, [Mr Chun] would surrender vacant possession of [the subject unit] to [HKHA].

…

Hence, under the prevailing policy, when the purchase of [the purchased unit] is competed by [HKHS] and [Chun’s son], and upon the taking of possession of [the purchased unit] by [Chun’s son], [Mr Chun] shall serve notice to quit to [HKHA] and surrender [the subject unit] within 60 days upon the taking possession of [the purchased unit] … ” (emphasis supplied).

43. It is therefore obvious HKHA was aware of, and in fact referred to, the HKHS letter.  Despite this, HKHA only informed Mr Chun of the need to surrender vacant possession of the subject unit subject to the matters stated in the HKHA letter.

44. HKHA received the Chinese declaration before it became aware of Mr Chun’s allegations made against Chun’s son.  A fortiori, the same applies to the subject GF.

45. It is therefore clear that HKHA has not made the decision under challenge in this application (para 12(b) above).

46. Mr Chun’s ground of application based on art 29, Basic Law has been discussed at para 36 to 38 above.  The same applies here.

CONCLUSION

47. The test for granting leave to apply is reasonable arguability: Po Fun Chan v Winnie Cheung (2007) 10 HKCFAR 676.  By reason of the above matters, Mr Chun fails to cross this threshold.  The application for leave is accordingly refused.  The related “time extension” summons is also dismissed.

OTHER MATTERS

48. The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the decision and its comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.

COSTS ORDER

49. Both HKHS and HKHA seek the costs of this application to be paid by Mr Chun.  Mr Chun asks for there be no order as to costs even if this application is unsuccessful.  No valid reason has however been put forth in support.

50. There is no apparent reason to depart from the usual rule that costs should follow the event.  There will accordingly be a costs order that the costs of this application (and of the “time extension” summons) are to be paid by Mr Chun to HKHS and HKHA to be taxed if not agreed.