REID, LANCE JOHN AND ANOTHER v. THE MUNICIPAL SERVICES APPEALS BOARD AND ANOTHER

HCAL 71/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 71 OF 2013

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J U D G M E N T

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Introduction

1.  The applicants are respectively the general manager and owner of one restaurant known as “Staunton Street Café” situated at the Outside Seating Accommodation in the open space at the Flat Roof of 1/F and G/F-1/F, Full View Court, 10-12 Staunton Street, Central, Hong Kong (the premises).  The premises are located on a commercial and residential building.

2.  The premises were first issued with a liquor licence in 1997. Various changes had been made to the conditions of the liquor licence between 1997 and 2011.

3.  In January 2012, the Liquor Licensing Board received an application for the transfer of the liquor licence from one Mr Kapoor, the previous liquor licence holder, to the 1^st applicant.

4.  The Liquor Licensing Board consulted the police which did not object to the application but recommended one additional condition, namely:

“The licensee shall with due diligence ensure that except the Outside Seating Accommodation between 11:00 am and 11:00 pm, the liquor sold or supplied is to be consumed on the premises only.” (emphasis added)

The two applicants did not agree.

5.  As a result, the Liquor Licensing Board held a hearing in May 2012 which, after hearing submissions from parties, decided amongst other matters, to include the additional condition as part of the licensing conditions.

6.  In June 2012, dissatisfied with the decision, the two applicants lodged an appeal with the Municipal Services Appeals Board (The Appeals Board).  The Appeals Board heard their appeal in September 2012 and announced its decision in January 2013.

7.  The Appeals Board decided that it was:

(i) not unreasonable to impose the additional condition; and

(ii) unnecessary to provide for the exception given the fact that the Outside Seating Accommodation formed part of the premises.

8.  As a result, the Appeals Board amended the additional condition to:

“The licensee shall with due diligence ensure that the liquor sold or supplied is to be consumed on the premises only.” (emphasis added)

Their appeal to the Appeal Boards was dismissed accordingly.

The judicial review

9.  Again, dissatisfied with the decision, the two applicants sought leave to judicial review the Liquor Licensing Board as well as the Appeals Board’s decision.  Leave was granted on 11 July 2013.  Prior to the judicial review hearing, the two applicants sought leave to discontinue their action against the Liquor Licensing Board.  I refuse that application for the Liquor Licensing Board is clearly an interested party to this hearing, given the decision under review originates from the Liquor Licensing Board.  Further, as the Appeals Board has always adopted a neutral stance in this type of proceedings, the absence of any representation from the Liquor Licensing Board would deprive this court from viewing the whole picture.

10.  In their original Form 86, the two applicants argue three grounds:

(i) Error of law—the Appeals Board’s decision is based on an incorrect interpretation of the law.

(ii) Procedural irregularity—counsel was not given opportunity to make submission on a point of law.

(iii) Error of law—the Appeals Board applied the wrong test.

11.  In the judicial review hearing, only the first ground was pursued.

The applicants’ complaint

12.  The major complaint put forward by the two applicants is that the Dutiable Commodities Ordinance, Cap 109 (the Ordinance) and the Dutiable Commodities (Liquor) Regulation, Cap 109B (the Regulation), create a situation which results in a permission being granted to sell liquor, on premises for subsequent consumption therein; neither the Ordinance nor the Regulation contain a legislated requirement that any liquor that is sold on premises, that is the subject of a liquor licence, permitting consumption of such therein combined with the prior sale thereat, must only be consumed therein.  It follows, argued by the two applicants, that the Appeals Board by reading in and using the word “only” in its decision clearly commits an error in law.

13.  In addition, the two applicants also argue that it was unreasonable for the Appeals Board to come to that conclusion because there was not enough evidence (noise complaints) to justify the imposition of the new condition, thus err in law.

Discussion

14.  Section 2 of the Ordinance defines “liquor licence” to mean a licence for the sale or supply of liquor at any premises specified therein for the consumption on the premises.

15.  Section 17(3B) of the Ordinance provides as follows:

“Where regulations prohibit the sale or supply of any liquor except on the authority of a prescribed licence or permit, no person shall sell, or advertise or expose for sale, or supply, or possess for sale or supply, such liquor except on the authority of such a licence or permit and in accordance with the terms thereof.”

16.  Regulation 25A of the Regulation provides as follows:

“The sale of liquor is prohibited except on the authority of a liquor licence or a temporary liquor licence-

(a) at any premises for consumption on those premises; or

…”

17.  Regulation 17(1) and (2) of the Regulation provides as follows:

“(1) Upon application the Board may grant a liquor licence without conditions or subject to such conditions as it thinks fit, or refuse the application.

(2) The Board shall not grant a liquor licence unless it is satisfied-

(a) that the applicant is a fit and proper person to hold the licence;

(b) that the premises to which the application relates are suitable for selling or supplying intoxicating liquor, having regard to—

(i) the location and structure of the premises; and

(ii) the fire safety and hygienic conditions in the premises;

(c)  that in all the circumstances the grant of the licence is not contrary to the public interest.”

18.  The Ordinance and the Regulation only regulate premises for the sale and supply of liquor for consumption on the premises.  In other words, the sale and supply of liquor per se is not regulated.  Consequently, people can purchase beer and wine freely from supermarkets or convenience stores for consumption anywhere of their choice, other than the premises where they acquire their liquor.  Since the sale and supply of such per se is not subject to any licensing requirement, it therefore follows that any terms or conditions attached to any licence are not applicable at all.

19.  The meaning of liquor licence as defined in Section 2 of the Ordinance is unambiguous.  It is a licence “for the consumption on the premises”.  The wordings of Regulation 25A are also very specific.  Regulation 25A regulates the sale of liquor “at any premises for consumption on those premises”.  On a plain and objective reading of both the Ordinance and the Regulation, it seems to me very clear that the sale and supply of liquor is for consumption on those premises only.  Allowing customers, after their purchase, to consume liquor outside or in the vicinity of the licensed premises would defeat the whole purpose of this licensing regime.

20.  It is particularly so because Regulation 17(2) requires the Liquor Licensing Board not to issue any liquor licence unless it is satisfied that the premises are suitable, having regard to: (i) the location and structure of the premises; and (ii) the fire safety and hygienic conditions in the premises. There are no points in placing particular emphasis on these factors if they are not for regulating consumption on the premises only.

21.  Even if I am wrong in the above construction, taking the two applicants’ argument to the highest, namely, that all those provisions in both the Ordinance and the Regulation do not mandate any of the restaurant’s customers to consume their drinks on the premises, that, however, is only a permissive action.  Section 17(3B) of the Ordinance states so.  Logically, it must also be within the Liquor Licensing Board and the Appeals Board’s power to restrict the manner of sale and supply of liquor.  It is not uncommon to see restrictive licensing conditions being imposed, such as restriction on the opening hours and the number of customers admitted into the premises, depending on circumstances of each individual case.  That being the case, the only logical step remains is whether the Liquor Licensing Board or the Appeals Board was acting unreasonably in imposing the “premises only” restriction.

22.  It was argued that there was insufficient evidence to justify the imposition of the additional condition, given the police only received one noise complaint against the premises.  Firstly, judicial review is not a hearing on merit.  Secondly, the issue of noise complaint had been extensively canvassed in both the Liquor Licensing Board and the Appeals Board’s hearings. In the whole year of 2011, the police received 154 cases of noise complaint in Staunton Street, in which 41 were against liquor licensed premises.  Between October 2011 and  July 2012, the police received 11 noise complaints against the premises of which 7 were confirmed to be valid.  As the Appeals Board rightly indicated, the area was mixed with residential and commercial buildings, the noise nuisance had already affected the local residents.  The Liquor Licensing Board and the Appeals Board in granting liquor licence must also pay regard, in accordance with Regulation 17(2)(c), to public interest.  It is therefore not surprising to understand why the Appeals Board decided to uphold the new condition. After all, the licensee is only required to ensure its compliance on a due diligence standard.

23.  For those reasons, the application for judicial review is without merit and must be dismissed.  There will be an order nisi awarding costs to the two respondents. The order to be made final 30 days from the date of handing down this judgment unless the matter is earlier set down for argument.