CHEN HAI TAO AND ANOTHER v. TRANSPORT TRIBUNAL

HCAL 1597/2021

[2025] HKCFI 2686

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 1597 OF 2021

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J U D G M E N T

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A.  Introduction

1.  Where the owner of a private car has applied for and been granted a hire car permit allowing him to provide private hire car services to members of the public, is the owner providing private or public services, and why might that matter?

2.  The operation of “Uber” – an e-hailing platform matchmaking passengers and drivers for personalized point-to-point (“P2P”) transportation services – is no stranger to Hong Kong citizens. Rather than physically hailing a taxi on the street, passengers can “e-hail” or locate nearby drivers for a service to the pre-selected desired destination for an agreed fee, through the mobile or web browser Uber application (“Uber App”). The Uber drivers are independent contractors and can be taxi drivers deploying a vehicle registered as a taxi. But the majority of them are ordinary drivers deploying an ordinary private car. The controversy of the lawfulness of this mode of operation is a matter of public knowledge.

3.  In 2017, 28 non-taxi Uber drivers were prosecuted in the Magistracy for contravening section 52(3) of the Road Traffic Ordinance, Cap 347 (“RTO”). Section 52(3) of the RTO criminalizes the driving or use of motor vehicles for carriage of passengers for hire or reward unless the vehicle falls within certain exemptions. These exempted categories include, amongst others, a vehicle in respect of which a hire car permit (“HCP”) is in force. Clearly for the Uber drivers deploying private cars, the only exempted category they could bring themselves within the type of HCP relating to private car hire services. But all the Uber drivers prosecuted drove a private car without an HCP.

4.  In the criminal proceedings, the Uber drivers argued that their mode of operation did not amount to “carriage of passengers for hire or reward” under section 52(3) such that there was no need to bring themselves within any of the exempted categories. They lost their argument in the Magistracy and were convicted in mid-2018. They took this argument on appeal up to the Court of Final Appeal (“CFA”): see HKSAR v Yuong Ho Cheung (2020) 23 HKCFAR 311. In January 2020, the CFA rejected their argument and dismissed the appeal. In light of the CFA’s decision, for an Uber driver to deploy a private car to operate lawfully, he or she must first obtain an HCP for that car.

5.  In parallel to the criminal proceedings, it might be said that the battle for Uber’s legitimacy was also fought on another front. The Applicants are two prospective Uber drivers. In March 2018, the Applicants each applied to the Commissioner of Transport for an HCP, with the stated purpose of operating a hire car service as a self-employed driver using the Uber App. The applications were made under the “private hire car service” category set out in regulation 14(1) of the Road Traffic (Public Service Vehicles) Regulations Cap 374D (“PSV Regulations”), regulation 14 being the provision governing the issuance of HCPs – as to which, see below.

6.  On 8 June 2018, both HCP applications were rejected by the Commissioner on the basis that the proposed hire car services were not “reasonably required” under regulation 14(3)(b) of the PSV Regulations.

7.  Both Applicants applied for the Commissioner’s decisions to be reviewed by the Transport Tribunal (“Tribunal”). Though commenced at different times, their review applications were eventually heard together on 31 May 2021 – which the Applicants say was an implicit recognition by the Tribunal that the proposed services subject to the reviews were of the same “type”.

8.  By its decision (“Tribunal Decision”) dated 31 August 2021, the Tribunal dismissed the reviews. The Tribunal Decision hinged on the proper construction of regulation 14(3)(b). It can also be usefully noted here that the Tribunal Decision is not based on, and did not consider, any supposed or potential difference between the HCP regime and “public transport”.

9.  By a Form 86 filed on 23 November 2021, the Applicants sought leave to challenge the Tribunal Decision by way of judicial review. I granted leave on 29 November 2021.

10.  The substantive judicial review hearing took place on 24 August 2022. The Applicants retained the same set of Counsel as at the Tribunal level: Mr Abraham Chan SC and Mr Tim Parker SC. The Commissioner, as Interested Party, was represented by Mr Jenkin Suen SC and Mr Johnny Ma SC, the latter having also represented the Commissioner before the Tribunal. The Tribunal, as usual, took a neutral stand and was excused.

11.  At the risk of stating the obvious, these judicial review proceedings concern the correct interpretation and application of the relevant law regarding the issuance of HCPs, rather than the Government’s policy concerning the operation of Uber or similar e-hailing platforms.

12.  At the end of the hearing, I reserved my decision.

13.  Though unfortunately delayed by other traffic through this Court, this is my Judgment.

B.  The HCP Regime

B.1  The law on HCP

14.  It is perhaps convenient to start with the statutory definitions of the following terms as provided in section 2 of the RTO:

(1)  Hire car permit (出租汽車許可證) means a permit issued in accordance with the RTO authorizing the use of a private car for the carriage of passengers for hire or reward.

(2)  Private car (私家車) means a motor vehicle constructed or adapted for use solely for the carriage of a driver and not more than 7 passengers and their personal effects but does not include an invalid carriage, motor cycle, motor tricycle or taxi.

(3)  Taxi (的士) means a motor vehicle which is registered as a taxi under the RTO.

15.  Therefore, “private car” within the meaning of the RTO is defined by its mechanical aspects. The mechanical aspects of a taxi, as a matter of common knowledge, could well fit within the meaning of “private car” but for its being expressly excluded from the definition. What makes a taxi a “taxi” is a matter of registration.

16.  Section 53(3) of the RTO provides:

(3) No person shall –

(a) drive or use a motor vehicle; or

(b) suffer or permit a motor vehicle to be driven or used, for the carriage of passengers for hire or reward unless –

(i) the vehicle is licensed as a public bus, public light bus or taxi;

(ii) the vehicle is licensed as a private bus and the passengers are students, teachers, or employees of an educational institution, disabled persons, or persons employed to assist disabled person;

(iia) the vehicle is licensed as a private light bus and is used –

(A) as a school private light bus; or

(B) exclusively for the carriage of persons who are disabled persons and persons assisting them; or

(iii) a hire car permit is in force in respect of the vehicle.

17.  Hence, the category of “taxis” is expressly exempted from the prohibition against the carriage of passengers for hire or reward under section 52(3). Private cars, whilst not exempted as a category, could also carry passengers for hire or reward if an HCP is obtained. Therefore, under the current legal regime, what are mechanically private cars could be used for hire or reward either through registration (as a taxi) or obtaining a permit specifically for this purpose.

18.  The particular regulations related to HCPs are to be found in “Part III: Hire Car Permits” of the PSV Regulations. The PSV Regulations were made pursuant to section 7 of the RTO, which provides:

7. Regulation of public service vehicles

(1) The Secretary may make regulations to provide for—

(a) controlling the use of public service vehicles, their equipment and apparatus;

(b) the powers of authorized persons to regulate and control—

(i) the driving and use of public service vehicles; and

(ii) the conduct of persons using such vehicles including drivers, conductors, passengers and intending passengers;

(c) (Repealed 89 of 1994 s. 5)

(d) controlling or prohibiting the carriage of goods and dangerous items in public service vehicles;

(e) controlling or prohibiting the carriage of animals and birds in public service vehicles;

(f) the wearing of uniforms and insignia by drivers and other persons employed by owners or operators of public service vehicles;

(g) controlling the conduct of persons using or intending to use public service vehicles and persons employed by the owners or operators of public service vehicles;

(h) the designation and use of places where public service vehicles may stand or stop to pick up or set down passengers and the traffic signs and road markings pertaining thereto;

(i) (Repealed 89 of 1994 s. 5)

(j) the display of destination boards, notices and advertisements on public service vehicles;

(ja) the period for which driver identity plates for public service vehicles remain valid and the display of the plates in the vehicles;

(k) the control and disposal of property lost on public service vehicles;

(l) the issue, by ballot or otherwise, amendment and cancellation of passenger service licences in respect of public buses, public light buses, private buses and school private light buses, and the review by a Transport Tribunal of any decision of the Commissioner to amend any such licence;

(m) the issue, refusal to issue and cancellation by the Commissioner of permits authorizing the use of private cars for the carriage of passengers for hire or reward, the limitation by him of the number of such permits that may be issued for any particular type of hire car service, and the review by a Transport Tribunal of any decision of the Commissioner to refuse to issue or to cancel any such permit; and

(n) generally carrying into effect the provisions of this Ordinance relating to public service vehicles.

(1A) Regulations made under this section may empower the Commissioner to specify by notice published in the Gazette requirements as to—

(a) the design, construction, size, colour and form of;

(b) without affecting the generality of paragraph (a), the size and colour of any letters or characters in; and

(c) the position in which to display,

any destination indicator, driver identity plate, driver identity plate holder, notice, sign or insignia required for the purposes of such regulations.

(1B) The Chief Executive in Council may make regulations to provide for the arrest and detention of persons who commit, or are suspected of having committed, offences under the regulations.

(1C) The Chief Executive in Council may make regulations to provide for the fares which may be charged on any public service vehicles other than buses operated under a franchise granted under the Public Bus Services Ordinance (Cap. 230) and the fees which may be charged for the hire of a public service vehicle.

(2) Where any regulation is made providing for the issue of hire car permits, the Commissioner may in his discretion—

(a) in issuing any such permit, give priority to any person or class of persons;

(b) determine, in accordance with any such regulation, by lot any applications for the issue of such permits;

(c) limit the number of such permits which may be issued to any person or class of persons.

19.  Section 7 confers on the Government wide powers in controlling various aspects of public service vehicles by way of making regulations. Sections 7(1)(m) and 7(2) specifically confer discretion on the Commissioner on the issuance, refusal and cancellation of HCPs.

20.  Part III of the PSV Regulations contains regulations 13 to 27. Central to this application is regulation 14(3) which governs the issuance of HCPs. Regulation 14 provides:

14. Issue or refusal of hire car permits

(1) Subject to this regulation and to regulations 15 and 19, the Commissioner may for the purpose of authorizing the use of a private car for the carriage of passengers for hire or reward, issue in respect of the private car a hire car permit for any of the following types of services—

(a) an hotel hire car service;

(b) a tour hire car service;

(c) an airport hire car service;

(d) a school hire car service;

(e) a private hire car service.

(2) An application for a hire car permit in respect of a private car shall be made to the Commissioner in the specified form by the registered owner of the private car.

(3) On receipt of an application under subregulation (2) and on payment of a fee calculated in accordance with regulation 20, the Commissioner may issue to the applicant a hire car permit if the Commissioner—

(a) is satisfied—

(i) as to the particulars furnished in the application;

(ii) that there is in force in relation to the user of the private car for the carriage of passengers for hire or reward such policy of insurance or such a security in respect of third party risks as complies with the Motor Vehicles Insurance (Third Party Risks) Ordinance (Cap. 272);

(iii) that such policy or security will remain in force during the period of validity of the hire car permit applied for; and

(iv) that there is in force a vehicle licence in respect of the private car to which the application relates; and

(b) is of the opinion that the type of hire car service specified in the application is reasonably required.

(4) Subject to regulation 18, a hire car permit shall be valid until the vehicle licence of the private car in respect of which the hire car permit is issued next expires; and the Commissioner shall specify the date of expiry of the hire car permit in the permit.

(5) A hire car permit shall be subject to such of the conditions set out in Schedule 3 as are specified in the hire car permit and to such other conditions as the Commissioner may from time to time specify in the hire car permit.

(5A) For a hire car permit issued in respect of a private car that is an e-permit, while a proper printout of the e-permit is displayed on the private car, the printout is deemed to be the original hire car permit.

(6) The Commissioner may refuse to issue a hire car permit, and if he does so, shall give the applicant notice in writing, either personally or by registered post, of his refusal and inform him of the reasons therefor; and any fee paid by the applicant under subregulation (3) shall be refunded to him.

(7) Where a hire car permit issued under subregulation (1) is lost, destroyed, defaced or damaged, the Commissioner may, on payment of a fee of $130, issue a duplicate permit, and such permit when issued shall be deemed to be a permit issued under subregulation (1) and shall have the same force and effect as the original permit.

21.  As the Tribunal stated at §10 of the Tribunal Decision, it is important to note that “hire car service” is defined in regulation 13 as “any type of hire car service specified in regulation 14(1)”.

22.  Regulation 14(1) provides that there are five types of hire car services for which an HCP could be issued for a private car: (a) hotel hire car service; (b) tour hire car service; (c) airport hire car service; (d) school hire car service; and (e) private hire car service. These types of service are not defined in the Regulations.

23.  But Regulation 14(3) requires an HCP to be issued subject to permit conditions set out in Schedule 3. Amongst those permit conditions, it is provided at §§5-8 of Schedule 3 that:

(1)  an HCP for an hotel hire car service shall not be hired other than for conveyance of guest of a hotel specified in the permit;

(2)  an HCP for a tour hire car service shall not be hired other than for the conveyance of visitors to Hong Kong and their companies;

(3)  an HCP for an airport hire car service shall not be hired other than for the conveyance of person to and from the Hong Kong airport; and

(4)  an HCP for school hire car service shall not be hired other than for conveyance of students, teachers and employees of any school.

24.  There are no similar permit conditions restricting the routes or the kind of passengers that an HCP private car can take in respect of the last category – private hire car service.

25.  The requirements for the issuance of an HCP are provided in regulation 14(3). Broadly speaking, there are two group of requirements, as provided in regulations 14(3)(a) and 14(3)(b) respectively. Regulation 14(3)(a) requires the Commissioner to be satisfied with a number of what may be understood as formalities, including the particulars furnished in the application form and that insurance policies and vehicle licence as required by law are in force. This group of requirements could easily admit a yes/no answer and is objectively assessable.

26.  For present purposes, the key requirement is in regulation 14(3)(b), which provides that the Commissioner has to be “of the opinion that the type of hire car service specified in the application is reasonably required”. That kind of formulation – particularly the reference to “opinion” and “reasonably” – is not unusual in discretion-conferring provisions.

27.  There is no statutory definition or elaboration on the meaning of “reasonably required”.

28.  However, regulations 15(1) to (5) provide for a range of mandatory and non-mandatory factors to be taken into account by the Commissioner when deciding if an HCP should be issued in respect of each of the five types hire car services. Regulation 15 reads:

15. Restrictions on issue of hire car permits and considerations for issue

(1) A hire car permit for an hotel hire car service may only be issued—

(a) where an hotel proprietor is the registered owner of the private car, to the hotel; or

(b) in any other case, to the registered owner of the private car who produces, to the satisfaction of the Commissioner, written approval from the proprietor or manager of the hotel concerned for the provision of an hotel hire car service exclusively for that hotel,

and in determining whether to issue such a hire car permit, the Commissioner may have regard to, amongst other matters, whether the number of bedrooms and general standard of service provided by the hotel to which the application for the hire car permit relates, and its location, are such that an hotel hire car service is reasonably required for such an hotel.

(2) A hire car permit for a tour hire car service may only be issued—

(a) where a tourist agent is the registered owner of the private car, to the tourist agent; or

(b) in any other case, to the registered owner of the private car who produces, to the satisfaction of the Commissioner, written approval from a tourist agent for the provision by such owner of a tour hire car service exclusively for that tourist agent,

and in determining whether to issue such a hire car permit, the Commissioner may have regard to, amongst other matters—

(i) the nature and availability of existing facilities for visitors to tour Hong Kong; and

(ii) whether the applicant has the means and experience to enable him to provide visitors to Hong Kong with a suitable standard of tour hire car service.

(3) (a) A hire car permit for an airport hire car service may only be issued to the registered owner of the private car who produces, to the satisfaction of the Commissioner, written approval from the Airport Authority for the provision of an airport hire car service and, in determining whether to issue such a hire car permit, the Commissioner may have regard to, amongst other matters, the nature and availability of existing facilities—

(i) for persons arriving in Hong Kong by air to reach their destination within Hong Kong; and

(ii) for persons intending to depart from Hong Kong by air to reach the Hong Kong International Airport.

(b) No other type of hire car permit shall be issued in addition to a hire car permit for an airport hire car service in respect of the same private car without the further approval in writing of the Airport Authority.

(4) A hire car permit for a school hire car service may only be issued to the registered owner of the private car and, in determining whether to issue such a hire car permit, the Commissioner may have regard to, amongst other matters—

(a) whether the applicant’s private car is licensed to carry 7 passengers; and

(b) whether the applicant is able to provide satisfactory evidence that the proposed school hire car service to the school or schools specified in his application is required by the production of written approval from the principal or head of each school concerned.

(5) A hire car permit for a private hire car service may only be issued to the registered owner of the private car and, in determining whether to issue such a hire car permit, the Commissioner may have regard to, amongst other matters—

(a) the extent to which the area from which the applicant proposes to operate the private hire car service is served by public transport;

(b) whether the applicant is able reasonably to demonstrate that a private hire car service is required in the area from which he proposes to operate; and

(c) whether the applicant has, in the area from which he proposes to operate the private hire car service, a place which, in the opinion of the Commissioner, is a suitable place to park the private car when it is available for hire.

29.  The mandatory conditions are couched in the language of “may only”, in that an HCP “may only” be issued if certain conditions are met. One mandatory condition common to all five types of HCP is that the permit could only be issued to the person being the registered owner of the private car. For hotel hire car service and tour hire car service, an undertaking from the proprietor that the service will only be used exclusively to the hotel or tour agent concerned is also required. For airport hire car service and school hire car service, written approval from the Hong Kong Airport Authority or the principal/head of the school for the provision of services is needed.

30.  For private hire car service, the only mandatory condition is that the permit could only be issued to the registered owner of the vehicle. There is no requirement that the private car must be used exclusively for a certain entity or purpose, as in the case of hotel or tour hire car service or (implicitly) for airport hire car service.

31.  The non-mandatory factors are couched in the language of what the Commissioner “may have regard to, amongst other matters”. For private hire car service, the non-mandatory factors include (but are not limited to) the extent of public transport service in the proposed operation area, whether the private hire car service is reasonably required in the proposed operation area and whether there is a suitable parking place for the private car.

32.  Other regulations in Part III of the PSV Regulations provide for the renewal and cancellation of HPCs, replacement of HCPs for a different vehicle, validity of the HPCs issued, permit fees, offences and penalties for breaching permit conditions, the requirement for returning the permit to the Commissioner in some circumstances, and the offence for failing, upon request and without reasonable excuse, to produce the HCP or record for examination by a police officer or the Commissioner.

33.  Of note is regulation 19 which empowers the Commissioner to limit the number of any type of HCPs to be issued. By notice gazetted in 1981, the number of HCPs for private hire car service was set at 1,500: see regulation 2 of the Hire Car Permits (Limit on Numbers) Notice Cap 374L. As at the date of the hearing, that limit had not been updated since 1981. As of 31 December 2020, 1,067 private hire car permits had been granted, leaving the remaining available balance at 433.

34.  The Applicants were proposing only to take up two of them, i.e. one each.

B.2  The Transport Department’s Policy on the Issuance of HCPs

35.  The decision on issuance of an HCPs rests with the Commissioner. But internally within the Transport Department, there is a ‘Contract Hire Car Permits Selection Board’, chaired by a directorate officer of the Transport Department which will first consider the application and then make a recommendation to the Commissioner. The Commissioner will decide whether the recommendation should be endorsed. But, as pointed out by Mr Chan, it seems that in practice it is the Commissioner who first supplies in a ‘Selection Board Paper’ a recommendation to the Selection Board on whether a given HCP should be granted or refused, together with a set of reasons, and the Selection Board decides whether or not to follow the Commissioner’s recommendation. In other words, as Mr Chan put it, the Selection Board is in fact deciding whether to recommend the Commissioner’s recommendation back to the Commissioner (though, for present purposes, nothing turns on this).

36.  The Commissioner has a policy on how she should exercise her power under regulation 14(3), which is published in the Transport Department’s website.

37.  Administratively, the Transport Department further break down the HCPs for private hire car into three categories: (a) “private service (limousine) hire car” which is for carriage of clients of a contracted company, or individuals requiring personalized high-end transportation; (b) “private service (limousine cross boundary) hire car” which is for the carriage of clients of contracted company, or individuals requiring personalized high-end transportation crossing the boundary; and (c) “private service hire car” which is the carriage of residents of an area where there is no or inadequate transport.

38.  It is said on the website that the Selection Board will assess whether the applicant has met all the “established objective criteria” and fully demonstrated a genuine need for issue of hire car permit”. The suggested established objective criteria are not publicly published.

39.  But through a document – entitled ‘Brief Note on Hire Car Permit’ – disclosed in these proceedings, it is revealed that the criteria work as follows. An applicant will have to submit past hiring records of his private hire car service. The hiring records will be converted to “Projected Utilization Rates” for the applicant’s proposed service, which will then be compared to the prevailing demand level in the hire car market. The prevailing demand rate is represented by “Benchmarking Rates” which are based on the number of trips per hire car per day and the number of operating hours per hire car per day collected from sample data in the hire car service market. If the Projected Utilization Rate of the applicant could meet the Benchmarking Rates of the market, approval for the HCP application will normally be recommended.

40.  The “established objective criteria” are obviously designed with existing HCP holders in mind, because a first-time applicant will have no hiring records to provide.

41.  In 2017, to facilitate “new market entrants” – first-time HCP applicants – the Commissioner introduced two measures. The first was the option of “pre-application assessment” which would inform an applicant of the likelihood of success of his application before committing capital investment on purchasing a private car.

42.  The second measure was the “special considerations for applications for private service (limousine) hire car permits” in the Commissioner’s assessment. First-timer applicants without past hiring records would be considered if the proposed private car to be deployed is less than one year’s old and with a taxable value of more than HK$400,000. The Applicants term these conditions the “Luxury Car Requirements”, reflecting the higher specifications required of the vehicles in comparison to existing HCPs holders (less than 7 years’ old and worth no less than HK$300,000). Upon the satisfaction of the Luxury Car Requirements, the Commissioner may “give special consideration on individual merits” to a new market entrant. The applicant will also have to submit business plan for the Commissioner’s assessment. There is no further elaboration on how individual merits will be considered for first time applicants in the context of regulation 14(3).

C.  The Applicants’ applications for HCPs

43.  The two Applicants’ application documents are largely similar. Each application’s documents span more than 150 pages. The Applicants filled in the specified form for application for an HCP in the private service (limousine) category – as being closest to what they desired. Both Applicants intended to deploy a Tesla Model S which was worth about HK$800,000 and was less than one year old at the time of application.

44.  They set out in a separate covering letter attached to the application form the details of their proposed hire car operation in a separate covering letter spanning about 10 pages. They indicated at the beginning of their letter that they intended to operate the proposed hire car service as a self-employed partner driver using the Uber App. The documents explaining how the Uber App operates were attached. In gist, their business plan was based on increasing demand for personalized P2P transportation service which could not be met by taxis. They said the increasing demand was due to population growth in Hong Kong, aging population, growing GDP per capital, global popularity of e-hailing services. Taxis – the main type of vehicles offering personalized P2P transportation service – are not suitable for meeting the increasing demand. They said demand for taxis had stagnated despite the growing and aging population. Complaints against the quality of taxi services had continued to increase. Statistics were extensively cited to back up their claims. For example, in respect of the rising complaints against taxi services, they cited a report produced by the Consumer Council in 2017, showing that about 50% of the complaints against public transportation services were against taxis.

45.  That report by the Consumer Council (together with other documents) were attached to the letters. The report is titled “More Choices Better Service – Personalized Point-to-point Car Transport Service Market”. The report explored the growing market demand for personalized P2P transport in Hong Kong, the popularity of such services facilitated via the Uber App and other similar applications, the increasing dissatisfaction against taxi services and other jurisdictions’ approach towards Uber and made recommendation for market reform. The Consumer Council suggested legalising e-hailing platform through a licensing system with quota, with a view to gradually move to an open market in the long run. The Consumer Council further suggested that the initial licensing could start by making use of the 1,500 HCP for private hire car service.

46.  Also cited in the letter is a remark made by Mr Frank Chan, the then Secretary for Housing and Transport in a LegCo session on 20 October 2017 (original in Chinese):-

陳帆回應指，政府制定政策時要考慮公共交通工具生態平衡，政府無限制網約車的安排，但營辦商要合法經營，可以申請出租車牌照。

The Government has to consider the balance of public transports when making policies. The Government does not restrict the operation of e-hailing platforms. But operators have to operate lawfully. They can apply for HCPs.

47.  The two applications were rejected on 7 June 2018. The two letters of rejection were brief and identically worded:

You have not submitted any hiring record of hire cars to support the proposed demand. Having taken into account the views of the Selection Board as well as all relevant facts and considerations, the Commissioner cannot be satisfied that the issuance of a hire car permit is ‘reasonably required’ in respect of your application.

48.  Whilst the 1^st Applicant sought a review by the Tribunal almost immediately, the 2^nd Applicant sought a review by the Commissioner, and submitted further information upon the Commissioner’s request. The Commissioner maintained her earlier decision by letter dated 17 February 2021:

In support of your application, you did not submit any hiring records or concrete justifications to support your application for a private service (limousine) hire care permits; and you have not clearly explained a) how the growth of GDP per capita and e-hailing service would lead to the demand for your hire car service, b) how ‘premium’ your proposed hire car service will be to meet the demand for premium transport service and c) how your private car could cater for the needs of elderly and disabled person. Having taken into account the views of the Selection Board as well as all relevant facts and considerations, the Commissioner cannot be satisfied that the issuance of a hire car permit is ‘reasonably required’ in respect of your application.

D.  Further Evidence Before the Tribunal

49.  It was decided by the Tribunal and not seriously contested between the parties that the review by the Tribunal should be approached on a de novo basis. The Tribunal would have to decide for itself if an HCP should be issued to each of the Applicants under regulation 14(3), as opposed to reviewing the Commissioner’s decisions.

50.  Since the review was de novo in nature, that permitted both the Applicants and the Commissioner to put in more evidence before the Tribunal.

51.  In a document entitled “Further Evidence for the Commissioner for Transport”, the Commissioner essentially made the following points (a) private cars with HCP are not regarded as part of the public transport; (b) they are intended for areas where the demand for personalized P2P transportation service could not be met by public transport; (c) HCPs have only been approved for personalized P2P services targeting special market ‘niches’ e.g. wedding services, premium services for corporate executives, wheelchair-bound passengers, (d) whilst the Government recognized that there is “certain demand” for personalised P2P “public transport services” of better quality, they considered it appropriate to “introduce franchised taxis, which should form part of the public transport system made available to the general public and in the whole territory, could meet such new demand”.

52.  Statistics and a summary of the private hire car HCPs approved for first-timer applicants from 2017 to 2020 were also provided. Among the 103 first timer applications, 64 were approved or partially approved. 20 of them were wheelchair accessible hire cars targeting wheelchair-bound passengers. 32 aimed to provide premium corporate services for senior management, VIPs or business partners of local or multinational corporations, featured by luxury cars and drivers with multi-lingual capabilities. 6 applications targeted wedding services, with features said to be suitable for wedding functions, such as an antique car which was good for shooting photographs. The other 6 applications approved were intended for the entertainment industry which was said to work at irregular hours, for professional trainers from overseas who provided adventure training based at remote locations, for members of fishing clubs, etc.

53.  Whilst not put in these precise terms, the message from this “Further Evidence” document was that unmet demand for personalized P2P services should be met by taxis or an improved version – i.e. “franchised taxis” – rather than HCP private cars, which were said to be intended for some specific market ‘niche’ rather than for the general purpose of the public at large. The Commissioner did not link such an understanding by reference to regulation 14(3) nor did she clearly portray it as a matter of law. The overall tenor of this document – said to be “evidence” – is that what it contains reflects the Commissioner’s understanding on how the HCP regime and e-hailing platforms should be dealt with as a matter of policy.

54.  Attached to the “Further Evidence” document is the final report of the “Public Transport Strategy Study” which was published by the Government in 2017 (“2017 Study”). Chapter 8 is headed “Personalized and Point-to-Point Public Transport Services”. There, there was a reference to that the HCP private cars “[do] not come under the category of public transport services” which was cited by the Commissioner in support of her view that the HCP system is not intended to form part of the public transport system.

55.  But the main purpose of Chapter 8 was indeed to provide support for the Government in introducing the “Franchised Taxi Service Bill”. There, the Government recognized, as reflected in its own study, that there was a certain demand – a demand which was also described as “solid and pressing” – for personalized P2P services with better quality at a higher fare. That was a demand which the then existing taxi system was unfit to meet. Taxi licenses were issued without conditions and they were permanent without the need for renewal, both features making it difficult for Government to exercise control over them. It was said that after years of consultation with the relevant stakeholders in the community, the Government believed introducing franchised taxis was the way forward to meet the demand.

56.  The franchised taxi initiative eventually crystalized into the Franchised Taxi Service Bill which was introduced by the Government in 2019. But the Bill was not well received in the LegCo and was withdrawn by the Government in 2020. The Commissioner said the franchised taxi concept was not entirely abandoned and the Government would continue to explore utilizing franchised taxi to meet the community’s demand for personalized P2P services with better quality.

57.  For the Applicants, they submitted to the Tribunal numerous public opinions surveys, reports, or studies conducted by various institutes from 2019 to 2020 which pointed to the general popularity and high satisfaction of P2P services provided by Uber, the high dissatisfaction in respect of taxi services, and the views that the franchised taxi scheme was inapt to resolve that problem. Amongst the materials includes the Competition Commissioner’s view on the Franchised Taxi Service Bill dated 20 December 2019 submitted to the LegCo. In brief, the Competition Commissioner was of the view that the scheme proposed in the bill would not be able to meet the demand for personalized P2P service with better quality and the best way to achieve this aim would be to allow more competition in the P2P market.

E.  The Tribunal Decision

E.1  The Tribunal’s construction of Regulation 14(3)(b)

58.  Central to the enquiry before the Tribunal was whether “the type of hire car service specified in the application is reasonably required” under Regulation 14(3)(b). As already said, this was a question for the Tribunal to answer for itself, on a de novo basis, and it hinged on the proper construction of Regulation 14(3)(b).

59.  At §12(b) of the Tribunal Decision, the Tribunal summarized the issues it had to tackle as including:

c. When applying r.14(3)(b) of Cap. 374D, which of the following is the correct legal test:

i. Is the hire car service specified in the application reasonably required?

ii. Is the type of hire car service specified in the application reasonably required?

d. Have the Applicants satisfied the “reasonably required” test in r.14(3) of the Cap. 374D?

60.  In so saying, the Tribunal broke down the approach to Regulation 14(3) into two issues:

(1)  the correct legal test or meaning set out in regulation 14(3)(b), where the Tribunal identified the two contrasting and competing legal tests as advanced by the parties, being (in reverse order of listing):

(a)  the formulation representing the Applicants’ position adopting the words in full verbatim fashion taken directly from Regulation 14(3)(b); and

(b)  the formulation representing the Commissioner’s position, omitting the words “type of”;

(2)  the factual question as to whether in the Tribunal’s opinion the Applicants satisfied the “reasonably required” test.

61.  There is no doubt that in the Tribunal’s mind the first issue would be determinative. At §28 of the Tribunal Decision, the Tribunal said:

If the Applicants’ interpretation of Regulation 14(3)(b) of Cap. 374D is correct, although not admitted by the Respondent, it appears that there is not much dispute that the Applicants should be granted HCP. On the other hand, if the Respondent’s interpretation of Regulation 14(3)(b) of Cap. 374 is correct, the Tribunal will still have to consider whether the “reasonably required” test as interpreted by the Respondent is satisfied.

62.  Therefore, if what has to be “reasonably required” is only the “type of hire car service specified in the application” rather than “the hire car service specified in the application”, in the Tribunal’s view, the Applicants should be granted HCPs. In other words, the Tribunal was satisfied that the type of hire car service specified in the Applicants’ applications were reasonably required. If the Applicants’ legal test was preferred, that would be the end of the matter.

63.  Pausing here, it might be thought slightly unexpected that the battle line was not drawn on the meaning of “reasonably required”, but on what was the subject matter upon which the Tribunal had to decide whether it was reasonably required. The meaning of “reasonably required” was not expressly identified as an issue for discussion, nor was there any such express discussion in the entire Tribunal Decision.

64.  It might be thought even more perplexing that the debate was on whether the two words expressly within the statute – “type of” – should somehow be omitted in construing Regulation 14(3)(b).

65.  Nevertheless, the Tribunal in effect concluded that the words “type of” should be omitted. The analysis is at §§29-36 of the Tribunal Decision, under the heading ‘The Test of “Reasonably Required”’. It is necessary to set out those paragraphs in full, as follows (sic) (emphasis in original):

29. The Applicants submits that the issue is whether the type of hire car service specified in the application is “reasonably required” while the Respondent submits that the issue is whether the private hire car service specified in the application is reasonably required, putting the focus on the individual applicant’s proposed service as specified in his/her application form.

30. The Applicants submits that the express wording of Regulation 14(3)(b) of Cap. 374 provides that HCP may be issued if the Commissioner “is of the opinion that the type of hire car service specified in the application is reasonably required.” The Applicants submits that the Respondent’s interpretation thus completely ignores the express wording of “type of hire car service” as provided in Regulation 14(3)(b) of Cap. 374D.

31. The Applicants also submits that the Respondent’s construction is illogical. The Applicants take the view that if there is demand for a particular type of service, and an applicant proposes to supply that type of service, then there must be demand for the applicant’s service.

32. The Applicants also submits that the Commissioner, by reference to Annex 2 of “Further Evidence”, has never construed Regulation 14(3)(b) of Cap. 374D in the manner now advanced.

33. The Applicants submits that the word “type” in Regulation 14(3)(b) of Cap. 374, as applied in the present case, refers to Uber-facilitated services.

34. On the other hand, according to Respondent’s construction, the Respondent would have to be satisfied that each of the Applicant’s proposed service is reasonably required, not someone else’s service or services.

35. The Respondent contends as follows:

a. The “type” of hire car service as referred to in Regulation 14(3)(b) of Cap. 374D is a reference to the five types of hire car service as specified in Regulation 14(1) of Cap. 374D. Thus, the question under Regulation 14(3)(b) of Cap. 374D is whether the Commissioner is of the opinion that the private hire car service specified in the application is reasonably required.

b. Properly construed, the relevant statutory provisions empower the Commissioner to consider inter alia whether the private hire car service “specified in the application” is reasonably required. As a result, it must be the applicant’s proposed service as specified in his application that matters.

c. Each of the Applicant must demonstrate that he is somehow so distinguished from other hire car service operators or ride hailing service operators that there is no or will be a genuine business demand for his proposed service, and that his proposed service is reasonably required.

d. The “reasonably required” test is not satisfied by merely showing that there is sufficient demand for the type of service in question, and that the Applicants are among so many others in the community who happens to be providing that type of service.

36. Despite the forceful and persuasive submissions of Mr Chan SC, the Tribunal does not accept the Applicants’ submissions. In particular:

a. In HKSAR v Yuong Ho Cheung (2020) 23 HKCFAR 311, Fok PJ (with other Judges agreeing), after reviewing various statutory provisions regulating transport services business in Hong Kong, stated at §43 that “vehicular passenger carriage in Hong Kong intended to be operate on a strictly controlled basis”.

b. Regulation 14(3)(b) of Cap. 374D provides that the Commissioner may issue HCP if the Commissioner “is of the opinion that the type of hire car service specified in the application is reasonably required”.

c. As defined in Regulation 13 of Cap. 374D, “hire car service” means “any type of hire car service specified in regulation 14(1)”.

d. Regulation 14(1) of Cap. 374D provides that the Commissioner may authorize the use of a private car for the carriage of passenger for hire or reward for 5 types of services, namely (i) an hotel hire car service: (ii) a tour hire car service; (iii) an airport hire car service, (iv) a school hire car service; or (v) a private hire car service.

e. The definition of “hire car service” as provided in Regulation 13 of Cap. 374D is fatal to the Applicant’s interpretation. Having regard to the express definition of “hire car service” as provided in Regulation 13 of Cap. 374D, the question to be considered under Regulation 14(3)(b) of Cap. 374D is whether the five types of hire car service as provided under Regulation 14(1) of Cap. 374D (ie. (i) an hotel car service, (ii) a tour hire car service; (iii) an airport hire car service: (iv) a school hire car service: Or (v) a private hire car service) specified in the application is reasonably required. The reference to “hire car service” in Regulation 14(3)(b) of Cap. 374D is a reference to the five types of hire car service as provided in Regulation 13 of Cap. 374D, contrary to the suggestions of the Applicants. For this reason alone, the Applicant’s interpretation must be, with respect, rejected.

f. Further, the Applicants’ interpretation would lead to the absurd result that as long as an individual is using an e-hailing service that has sufficient demand (Uber in the present case), then such individual should be granted an HCP. Bearing in mind that vehicular passenger carriage in Hong Kong is intended to be operated on a strictly controlled basis, the Tribunal takes the view that this cannot be a correct interpretation. The Applicants’ interpretation would inevitable render the licensing regime a first come first entitled regime, which would be completely against the context and the purpose of restricting regulation transport services in Hong Kong.

g. When Mr Chan SC was asked by the Tribunal as to the definition of “hire car service” as provided in Regulation of 13 of Cap. 374D, Ms Chan SC submitted that this would render an even broader and less restrictive basis. Mr Chan SC explained that if the Respondent’s interpretation is adopted, and that the word “type” in Regulation 14(3)(b) of Cap. 374D refers to the five types of hire car service as provided in Regulation 14(1) of Cap. 374D, then all an applicant needs to be satisfied is that his or her service is one of the five types of hire car service as defined in Regulation 14(1) of Cap. 374D. This will provide a broader and less restrictive measure contrary to the spirit of the statutory regime. To put it to the present context, Mr Chan SC explained that the Applicants’ application is made specifically for HCP under Regulation 14(1)(e), for private hire car service. Then, on the Respondent’s interpretation, the only question that needs to be asked is “Is there reasonably required a private hire car service?”

h. The Tribunal agrees with Mr Chan SC that the statutory regime could not have intended for such a broad regime. However, the Tribunal takes the view that the words “specified in the application” immediately after the words “type of hire car service” in Regulation 14(3)(b) of Cap. 374D is the answer to Mr Chan SC’s concern. The Tribunal takes the view that it is the type of hire car service as specified in the application that needs to be reasonably required. This interpretation would prevent an applicant to be successful simply because this type of hire car service is one specified under Regulation 14(1) of Cap. 374D, will still have to be satisfied that the type of hire car service as stated in the application form is “reasonably required”.

i. As a result, the Tribunal takes the view that, on a proper construction of Regulation 14(3)(b) of Cap. 374, the Tribunal is to consider whether the private hire car service as specified in the Applicants’ application is reasonably required.

66.  The consequence of the legal test as found by the Tribunal – by omitting “type of” and focusing on “specified in the application” – is made clearer when the Tribunal then applied that legal test to the Applicants’ applications. At §§44-46 and 50 (original emphasis):

44. As explained above, the Tribunal takes the view that, contrary to the Applicants’ submissions, the Tribunal is not to consider whether the type of hire car service (i.e. Uber) is reasonably required. Given that the test in Regulation 14(3)(b) of Cap. 374D, as interpreted by the Tribunal, requires the Tribunal to look specifically at the proposed hire car service as specified in the application, the Tribunal must look at the consider the materials as stated in the application of Mr. Chen and Mr. Yin and the materials as submitted by the Applicants.

45. The Tribunal agrees with the Respondent’s submissions that there is nothing in the Applications or in the materials as submitted by the Applicants to show that the private hire car service of the Applicants is reasonably required. Even if there is an increasing demand for personalised point to point transportation in Hong Kong, there is no evidence that there is an increase demand for the services of Mr. Chen and Mr. Yin specifically.

46. The Tribunal agrees that even if there is an increasing demand for Uber, that does not mean that there is an increase in demand for the Applicants’ proposed service. The demand is for the Uber application, but not the Applicants’ proposed service with their vehicles.

47. The Applicants have also contended that the use of environmentally friendly vehicles assists the Applicants to show that the Applicants’ proposed service is reasonably required. The Applicants further say that the Applicants’ proposed service offers consumers a personalised eco-friendly transportation option not otherwise available.

48. With respect, the Tribunal does not agree with the Applicants. The mere fact that the vehicles of the Applicants are environmentally friendly does not necessary mean that the Applicants’ proposed hire car service is reasonably required. There is simply no evidence to show that environmentally friendly vehicles would increase or enhance the demand for the proposed hire car service. In the absence of such evidence, the Tribunal fails to see how environmentally friendly vehicles would render the Applicant’s proposed hire car service reasonably required.

49. Further, the Applicants have explained in their Application Form that that their Tesla vehicle is more convenient for persons with mobility issues because:

a. the rear seats can be folded, creating a large storage space for wheelchairs and “outsized” equipment; and

b. air suspension height can be adjusted, making it easier for people with mobility needs to board.

50. However, even without the need of any expert evidence, the Tribunal is well aware that these two special features are not peculiar to the Applicants’ Tesla vehicle. The rear seats of many vehicles may be folded and the air suspension height can be adjusted as well. Without any other special features, the Tribunal fails to see how persons with disability may specifically require the need of the Applicants’ vehicle. In those circumstances, the Tribunal does not accept that this enhances the Applicants’ case any further.

E.2  The meaning of “reasonably required” adopted by the Tribunal

67.  The heading of this section is perhaps misleading, if taken to mean that there was an express finding on the meaning of “reasonably required” by the Tribunal. There was no such express finding and the arguments between parties before the Tribunal did not focus on the meaning of “reasonably required”. But of course, a meaning must have been adopted by the Tribunal before it could apply the test to the factual circumstances before it.

68.  The position implicitly adopted by the Tribunal was that for a hire car service or a type of hire car service to be required, it means that there exists a market or public demand for such services. In §§45-46 and 48 of the Tribunal Decision (cited above), the word “demand” was used in substitution for or interchangeably with “reasonably required” or “required”. Reference to “demand” could also be found in §52 (not cited above).

69.  The fact that the Tribunal intended to use “demand” interchangeably with “reasonably required” was also prominent in §36(f) of the Tribunal Decision, when it explained why the Applicants’ interpretation of Regulation 14(3)(b) must be rejected. I reproduce §36(f) again for convenience:

Further, the Applicants’ interpretation would lead to the absurd result that as long as individual is using an e-hailing service that has sufficient demand (uber in the present case), then such individual should be granted a HCP. …

70.  This position – equating “reasonably required” with the existence of a market demand – was assumed by the Applicants. Albeit not said expressly, this position was reflected in the way they framed their arguments before the Tribunal. The Applicants advanced six reasons on why the Tribunal should reverse the Commissioner’s decisions and approve the Applicants’ HCP applications. The third reason was that the Commissioner had failed to engage with the fact of huge customer demand for high-end P2P services provided through the Uber App. The extensive evidence provided by the Applicants for such demand remained unchallenged by the Commissioner.

71.  The Applicants’ assumed position was also implicitly adopted by the Commissioner without protest. This could be seen from the Commissioner’s reply to the Applicant’s argument on the former’s failure to engage with the fact of huge demand for P2P services facilitated by the Uber App (at §§46 to 53 of the Commissioner’s written submissions before the Tribunal). In gist, the Commissioner submitted that even if there was demand for high-end P2P services provided through the Uber App, it does not follow that there was demand for the Applicant’s proposed service. The submission was as follows (emphasis in original):

46.  Turning now to the Applicants’ case, which in a nutshell is that there is “huge customer demand for the high-end P2P services provided through the Uber App”, “and thus”, “the Applicants’ proposed service is reasonably required” (Applicants’ Skeleton §§74 & 76)

47.  The Commissioner disagrees. The Applicants’ above assertion is too superficial a view which involves quantum leap and defies logic, and cannot be accepted.

48.  Among hire car or ride-hailing service providers, Uber is one of the various providers. For providers using e-hailing apps, apart from Uber, the Applicants have also mentioned others such as Didi Chuxing and Lyft.

50.  Even focusing only on Uber, according to HKU Business School’s findings in its “Hong Kong Economic Policy Green Paper 2021”, it is said that there are currently 14,000 Uber drivers in Hong Kong (Applicants’ Skeleton §84(1)).

51.  Against the foregoing background, the Commissioner is of the view that a strong demand in the community for personalized point-to-point transport services of higher quality should not be equated with, and does not per se establish, a huge demand for services through the Uber App as the Applicants assert.

51.  Besides, even assuming for present purposes that there is a huge demand for services through the Uber App as the Applicants contend, the Commissioner is of the further view that such a demand is not equivalent to, does not per se establish, a genuine demand for the Applicants’ proposed service. After all, based on the presently available materials, the Applicants are 2 out of the 14,000 Uber drivers in Hong Kong.

52.  In other words, the enquiry is not whether the Uber’s services are reasonably required. Rather, the Commissioner would have to be satisfied that each of the Applicant’s proposed service is reasonably required, not someone else’s service or services. Based on the material made available to the Commissioner, and bearing also in mind inter alia the 1,500 limit of HCPs that may be issued for all types private hire car service (of which Private Service (Limousine) is just one of the three types), the Commissioner is fully entitled to come to the view that each of the Applicants has not demonstrated that he is somehow so distinguished from other hire car service operators or ride-hailing service operators or drivers (including all other Uber drivers) that there is or will be a genuine business demand for his proposed service, and that his proposed service is reasonably required.

[and in §53 the Commissioner explained why the above interpretation reflects the correct construction of Regulation 14(3)(b)].

72.  As can be seen from the Commissioner’s arguments before the Tribunal, the position implicitly taken must also be that reasonably required means that there is a market demand for that service. But the Commissioner submitted that a demand for e-hailing P2P services was not enough. What had to be demanded or required is the very specific service provided by the Applicants, to the point that their services should be ‘unique’, i.e. non-substitutable by other Uber (or other ride-hailing) drivers.

73.  It might be thought hardly surprising that the Commissioner would implicitly adopt such an interpretation of “reasonably required”. For renewal applications, the Commissioner’s assessment is based on the Benchmarking Rates and Projected Utilization Rates, both of which are quantitative measurements of market demand. In the Commissioner’s rejection letter dated 21 February 2021 to the 2^nd Applicant (cited above) which was supposed to explain in more detail why the Applicants failed to meet the “reasonably required” test, the reasoning given is in essence that the 2^nd Applicant failed to show there will be sufficient demand for his proposed service. The hearing before the Tribunal was de novo in nature and the Commissioner could perhaps depart from her previous position had she minded to, but did not.

74.  Indeed, it would seem correct that the words “reasonably required” in context refer to what the general public (or a particular section of it) requires for its transportation purposes, in other words the market and its demands. In context of the PSV Regulations as a whole, and to complete a consistent and harmonious reading of them, the reference to “reasonably required” in regulation 14(3)(b) identifies the question whether the proposed hire car service would enable the public, or particular members of the public, to enjoy appropriate and convenient travel within Hong Kong to suit their needs and purposes. Further, the phrase permits the appropriate flexible and context-sensitive approach to what is required (albeit without there being any need for the Commissioner to take on, in effect, some form of paternalistic role in deciding what the public ought to seek by way of their transportation needs). The requirement to form an opinion on what is reasonably required focuses ascertaining what the public in fact appears to require in terms of hire car services, and to assess whether those demands and expectations are reasonable as can be met through the grant of the HCPs.

75.  Hence, the Applicants, the Commissioner and the Tribunal all proceeded – as I have indicated, in my view correctly – on the basis that “reasonably required” was essentially equivalent to “market demand”. The difference in approach was simply as to whether there should be demonstrated a reasonable requirement or market demand for (1) the type of hire car service specified in the application, or (2) the specific hire car service proposed to be provided by the particular Applicants.

76.  This further explains why (as already canvassed above) the Tribunal considered the question of the proper construction of regulation 14(3)(b) – if decided in favour of the Applicants’ argument – to be determinative.

77.  In adopting its approach, the Tribunal held that it must look at and consider the materials as stated in the Applicants’ applications in deciding whether there is demand for their services specifically, and that there was no evidence of any special features which would enhance the demand for the Applicants’ hire car services or mean that such hire car services are reasonably required.

F.  Grounds of Review

78.  The Applicant advanced three grounds on why the Tribunal Decision should be quashed:

(1)  Ground 1: The Tribunal made an error of law in misconstruing and/or misapplying the “reasonably required” test in Regulation 14(3)(b) of the PSV Regulations. The correct construction should be that advanced by the Applicants.

(2)  Ground 2: Alternative to Ground 1, if the Tribunal’s construction was correct, that construction contravenes the constitutional right to property under Article 6 and Article 105 of the Basic Law (“BL6” and “BL105”); and the right to freedom of choice of occupation in Article 33 of the Basic Law (“BL33”). Regulation 14(3)(b) must be read remedially.

(3)  Ground 3: The Tribunal Decision is beset with errors of analysis, rendering it irrational.

79.  In my summary of the Commissioner’s broad responses to these grounds, the Commissioner argues:

(1)  The question of construction of Regulation 14(3)(b) is a question of law, admitting of only one correct answer, and informed by the relevant context and purpose of the HCP regime. (This must be common ground.)

(2)  The Court is neither bound by the Tribunal’s construction, nor is it bound to accept any of the opposing constructions advanced before the Tribunal.

(3)  The HCP is to be issued to an applicant in respect of his vehicle, so that it is the applicant’s proposed “private hire car service” to be provided by the use of his vehicle as specified in the application that matters.

(4)  The term “reasonably required” cannot simply be equated with the mere existence of market or public demand, as that would mean that any proposed private hire car service meeting public demand would suffice, even if it in effect replicates, constitutes or directly competes with public transportation services.

(5)  The HCP regime considers whether the proposed service targets special needs or occasions as opposed to serving the general public.

(6)  Even if the Applicant’s offered construction is correct, it does not follow that their proposed service is reasonably required.

(7)  Neither the rights to property nor the right to freedom of choice of occupation are engaged.

(8)  In any event, the HCP regime confers a discretion on the Commissioner and pursues rationally connected and legitimate aims of regulating transport service businesses on a strictly controlled basis.

(9)  Irrespective of the standard of scrutiny applicable, the HCP regime passes all steps in the proportionality assessment.

(10)  There is no basis to interfere with the discretion exercised by the Commissioner and the Tribunal on any suggestion that there was irrationality in the Tribunal Decision.

80.  I can now turn to consider the arguments in more detail.

G.  Ground 1: Error of law on construction of regulation 14(3)(b)

G.1  The Applicants’ Submissions

81.  Mr Chan for the Applicants submitted six reasons as to why the Tribunal’s construction of Regulation 14(3)(b) is incorrect. The reasons are as follows (not all in the original order).

82.  The first reason is that the Tribunal’s construction essentially strikes out or ignores the express words “type of”. This offends the interpretative principles that the actual statutory words used cannot be ignored, and every word in an enactment must normally be given meaning: see Yung Chi Keung v Protection of Wages on Insolvency (2016) 19 HKCFAR 69 at §22; HKSAR v Fugro Geotechnical Services Ltd (2014) 17 HKCFAR 755; Bennion, Bailey & Norbury on Statutory Interpretation (8^th Ed, 2020), §21.2.

83.  Mr Chan submitted that the Tribunal’s interpretation is also unworkable and impracticable. The Tribunal’s reading requires the Applicants to provide a demand uniquely for their services, to the exclusion of even other Uber drivers. Indeed, faithful adherence to such a reading would mean that no vehicle would be granted an HCP if there is more than one such vehicle offering services of the same type. No Uber drivers would be granted HCPs given that there are more than 10,000 Uber drivers offering Uber facilitated P2P services. They are all substitutable with each other. The absurdity highlighted that the words “type of” must not be ignored. Otherwise, no application could cross such a high bar.

84.  Mr Chan also submitted that this reading is not consistent with the Commissioner’s own practice, as shown in its summary of the first-timer applications approved for a private hire car HCP. Indeed, in the table prepared by the Commissioner, the first column is called “Hire car service type” and there are three “types” under this column: “wheelchair accessible”, “premium corporate” and “wedding”. Obviously each vehicle within the same type of category was intended to offer similar services, thus enabling them to be put under the same “type”. This shows, Mr Chan submitted, that it was not the Commissioner’s policy that there must be demand unique to a specific application or car or driver before an HCP could be granted.

85.  The second reason is that the Tribunal’s reliance on the definition of “hire car service” in Regulation 13 in rejecting the Applicants’ reading is confusing. The Tribunal said, at §36(e) that the reference to “hire car service” is a reference to the five types of hire car service provided under Regulation 14(1), because Regulation 13 defines “hire car service” as “any type of hire car service specified in Regulation 14(1)”. Proceeding from there, the Tribunal then jumped to the conclusion that “For this reason alone, the Applicants’ interpretation [that type of hire car service means Uber facilitated P2P services] must be, with respect, rejected.” Mr Chan said that the reasoning is confusing, because the Tribunal’s application of Regulation 13 would yield an even broader scope for the “type of hire car services” that has to be proved as “reasonably required” under Regulation 14(3)(b). This would make the threshold that the Applicants had to be meet even lower, rather than defeating the Applicants’ case.

86.  The third reason concerns the Tribunal’s reasoning that the Applicants’ interpretation would lead to opening the floodgates for all e-hailing services, and thus had to be rejected. That reasoning is wrong and circular: it starts with the premise that e-hailing services should not be granted HCPs when the question to be answered is whether the two applications (featuring an e-hailing service facilitated by the Uber App) should be granted HCPs. In any event, there is a statutory limit of 1,500 HCPs for private hire car permits, as well as the administratively imposed “Luxury Car Requirements”, to ensure that the floodgates would not be opened.

87.  The fourth reason submitted by Mr Chan was that the Tribunal failed to adopt a fair, large and generous construction in accordance with the Applicants’ rights to property under BL6 and BL105, and their right to work under BL33 and the common law.

88.  The fifth reason advanced was that the Tribunal misunderstood the CFA’s comments in Yuong Ho Cheung (at §43) that vehicular passenger carriage in Hong Kong is intended to be operated on a strictly controlled basis. Mr Chan said what the CFA meant was that a person absolutely should not be allowed to carry passengers for hire or reward except with permission to do so.

89.  The sixth reason argued that none of the policy documents published by the Commissioner suggest that she or the Tribunal would apply the “reasonably required” criterion as imposing a threshold as high as to the extent that the proposed service must be so distinguished from any other drivers.

G.2  The Commissioner’s Submissions

90.  Mr Suen made the following submissions.

91.  First, the Tribunal was correct to hold that the “type of hire car service” in regulation 14(3)(b) refers to any of the five types of service listed in regulation 14(1), and “hire car service” as defined in regulation 13 as meaning “any type of hire car service specified in regulation 14(1)”. Therefore, in principle, an application under regulation 14(2) can be made for any one of those five types of services. But it could not have been the legislative intention that an applicant need only demonstrate that this application falls within any of the five; rather the applicant must demonstrate that any such type of service listed in regulation 14(1) as specified in the application is reasonably required.

92.  Secondly, in context and purpose, “private hire car service” is clearly not intended to enable or facilitate a private car owner issued with a HCP to use his private car as if it were a public vehicle or pseudo-taxi, or to provide services which could or should have been catered for by public transport services, and/or for which there are alternatives. Rather, private car hire is intended to provide personalised, higher quality point-to-point, i.e. P2P, private services that are not intended to be provided, and cannot be adequately provided in certain areas by public transport services.

93.  There is a distinction between private transport and public transport, where e-hailing “blurs the lines” with plying for hire, although it is accepted that the issue in this case is not whether the Applicant’s proposed hire car service would involve any plying for hire. Assuming that it does not, it does not follow that the proposed service satisfies the requirement under regulation 14(3)(b).

94.  Third, the “type” in regulation 14(3)(b) cannot be construed in isolation. Where an HCP is issued to the applicant in respect of his private car for the use of that car, it must be the applicant’s proposed hire car service as specified in the application that matters. The inquiry is necessarily focused on the applicant’s proposed service, not someone else’s service or services.

95.  Fourth, the HCP regime was introduced to legalise the then existing “pak pai” operations which were providing bona fide contract hire car services, without opening up contract hire cars on an entirely unlimited basis. Hence, in part, the maximum number of HCPs at 1,500. On the basis that vehicular passenger carriage in Hong Kong is clearly intended to be operated on a “strictly controlled basis”, the availability of public transport services is plainly a relevant factor. The specific nature or quality of the hire car service can also be a relevant factor in deciding whether it is “reasonably required”, in that it may provide service for special market niches. Further, if the Applicants are right in their offered construction, against the increasing prevalence of e-hailing platforms or mobile applications, HCP’s would have to be granted to all HCP applicants who are Uber drivers, given the market for e-hailing services of private hire cars via the Uber App. That cannot be correct.

96.  The crux of the matter is that the Applicants’ proposed hire car service, being e-hailing hire car service via the Uber App, per se and without more, does not possess any specific or special nature or quality in the business or service to be provided via the use of the Applicants’ vehicle. The focus is on whether the Applicants’ proposed services feature special characteristics to cater for special niches or occasions, to set them apart from public transport services, such that their services are reasonably required in such context. On that basis, the Tribunal’s construction must prevail.

97.  Fifthly, in reaching its conclusion on the correct construction of regulation 14, the Tribunal did not delete or excise the words “type of”. Rather, it construed the phrase “the type of hire car service” in light of the other provisions as intending to refer to any of the five types of hire car service listed in regulation 14(1) – in this case “private hire car service” – such that an applicant must demonstrate not only that his application falls within any of the five types, but also that any such type of hire car services specified in the application as reasonably required. In contrast, the Applicants’ proposed construction wrongly seeks to construe the term “type” in vacuo and ignores the prescribed five types of hire car services listed in regulation 14(1).

98.  The Tribunal’s construction means that it is necessary to consider whether there is a reasonable demand for an applicant’s proposed hire car service as specified in the application to be provided by his vehicle. But that is not the same as requiring an applicant to prove that his proposed private hire car service has to be unique or incapable of being satisfied by any other service provider.

99.  Mr Suen also offered submissions in response to the latter points raised by Mr Chan, as listed by me above. But I do not think I need to set them out of any great length in light of my conclusions on them below.

G.3  The Correct Construction of Regulation 14(3)

100.  There can be no dispute as to the principles of statutory construction, and they do not need to be rehearsed at any length. It is an iterative and dynamic process. The proper starting point is to look at the relevant words, having regard to their context and purpose, taken in the widest sense and including the other provisions of the statute and the existing state of the law. The object of the exercise is to ascertain the legislative intent of the language used in the statute.

101.  Giving a statutory provision a purposive interpretation, however, does not permit the Court to distort or even ignore the plain meaning of the text, or to construe the statute in whatever manner achieves a result which the Court may consider desirable. That is not permissible. Purposive construction means only that statutory provisions are to be interpreted to give effect to the intention of the legislature, to be ascertained by a proper application of the interpretative process.

102.  I think Mr Chan’s first three points (as listed above) are sufficient to show the correct answer, and that the Tribunal misconstrued regulation 14(3)(b). For the reasons which appear below, I agree with Mr Chan and I reject most of Mr Suen’s submissions, save where they are common ground and in line with the construction identified by me below.

103.  The correct construction flows from a grammatical consideration and as a matter of common sense, against the statutory purpose and context.

(1)  A useful starting point is to recognise that title of the PSV Regulations indicates that the PSV Regulations are intended to provide for the occasions when vehicles, including private vehicles, provide a public service or services to the public.

(2)  That is consistent with the definitions in section 2 of the RTO itself (see above).

(3)  Therefore, applications for an HCP made under Part III of the PSV Regulations necessarily envisage applications in respect of a private car, but for that private car to be used for the provision of services to the public or a segment of the public.

(4)  Regulation 13 defines “hire car service” as meaning any “type of hire car service specified in Regulation 14(1)”.

(5)  Regulation 14(1) identifies that there are five “types” of hire car services.

(6)  Regulation 14(1) also permits an HCP to be issued in respect of those “types” of hire car services.

(7)  Regulation 14(2) requires an application for an HCP to be in a specified form, which would include identification of the proposed “type” of hire car service.

(8)  There is no such thing as a general HPC for all types of hire car services.

(9)  Hence, if an applicant desires the issue to him of an HCP, he needs to choose and then specify in his application which “type” of the potential five “types” of car hire service is the subject of his application.

(10)  Regulation 14(3) permits the Commissioner to issue to the applicant an HCP if the Commissioner:

(a)  is satisfied as to certain minimum requirements or formalities (insurance, vehicle licence, etc); and

(b)  is of the opinion that “the type of hire car service specified in the application as reasonably required”.

(11)  The reference to “type of hire car service specified in the application” is obviously a reference back to one of the “types” identified in regulation 14(1) which needs to have been specified in the application form under regulation 14(2).

(12)  The Tribunal itself correctly identified at §36(g) of the Tribunal Decision that the word “type” in regulation 14(3)(b) refers to the five “types” of hire car service as provided in regulation 14(1).

(13)  Also as a matter of grammar, the words “specified in the application” form an adjectival clause describing the noun clause before it – “the type of hire car service”.

(14)  To give an example, if an applicant desires the issue of an HCP for “school hire car service”, he will need to specify that type in his application and the Commissioner will need to be of the opinion that there is a reasonable requirement for that type of hire car service (not some other type as might have been the subject of a different application, for example hotel car hire service).

(15)  In other words, what has to be shown by the applicant to be reasonably required is the one type of car hire service specified in the form, that is one amongst the possible five types rather than simply any one of the five types.

(16)  Regulation 15 emphasises this by identifying what the Commissioner must and may take into account when deciding whether to issue or refuse an HCP. There are different factors for each different type, so the focus must be on the factors relevant to the type specified in the application.

(17)  Regulation 16, which applies to renewal of permits is also consistent, where it provides that an HCP holder may apply for his HCP for “the same type of hire car service in respect of the same private car”, and that regulation 15 (relating to the same type of hire car service) is applicable.

(18)  Regulation 17, which applies to replacement of an HCP for a different vehicle, is also consistent, where it provides that an HCP holder may apply for a new HCP to be issued to him in replacement of it “for the same type of hire car service in respect of another private car of which the applicant is the registered owner”.

(19)  If, by focusing on “specified in the application”, the Tribunal meant that the words “type of” could be ignored or given no meaning, that must be wrong.

104.  However, it is plain that the Tribunal has indeed chosen to omit the words “type of”, or at least to give them no meaning. This is shown starkly in how it framed the two competing legal tests put forward by the Commissioner and the Applicants in §12(b)(c)(i) and §12(c)(ii) of the Tribunal Decision. As identified above, the only difference in the two formulations lies in the inclusion or exclusion of the words “type of”.

105.  This is contrary to a key interpretive principle that the actual statutory words used should not be ignored. Ordinarily, on the assumption that the legislature does not use surplus language, the Court will strive to give meaning to every word in an enactment. To give the meaning to the words “type of” as is advanced on behalf of the Applicants is consistent with those principles of statutory interpretation, and it does no violence to the language of the regulation viewed within its context and purpose. The language of the regulation is straightforward, and points to the assessment of the reasonable requirement (or not) for the type of hire car service proposed to be provided by an applicant for an HCP. To put it bluntly, this is exactly what the regulation says. It is also coherent and consistent with the use of the word “type” elsewhere in the PSV Regulations.

106.  Giving “type of” its ordinary meaning will not open the floodgates in the way the Commissioner suggested. The Commissioner still would have to be satisfied that the type of service specified in the application is reasonably required. For illustration purposes, say, if on correct application of regulation 14(3)(b) to the circumstances of Hong Kong, only 300 more HCP for private hire car services are reasonably required, the next applicant making the application would not be granted an HCP.

107.  Further, the words “specified in the application” is (and perhaps is only) given meaning on the Applicants’ interpretation, because the relevant type of car hire service is given some specification or description of that type as proposed by the particular applicant.

108.  I do not see that adopting a ‘first come first served’ approach would be problematic (and it appears to have been envisaged elsewhere that the remaining number from the limit of 1,500 would appropriately be used to meet demand in the first instance – the view of the Consumer Council, for example). That approach would likely occur whenever a limit might be imposed on the grant of licences or permissions. Indeed, the situation would be analogous to any limit on taxi registrations. Further, there is indeed the statutory limit for HCPs of 1,500. The Applicants have not asked for the limit to be revised, nor challenged the legitimacy of imposing such a limit. Further, I do not think the existence of a limit means that, within the limit, each of the private hire cars should not be allowed to offer their service to the public generally (as that is a different point).

109.  With respect, it seems to me to be close to absurd to suggest that the specific individual characteristics of either Applicant in this case, or any other individual applicant – his driving, his car, etc – are meant to be the subject-matter of the thing on which the Commissioner needs to form the opinion that it is reasonably required. The Tribunal’s reasoning in effect would require each applicant for an HCP to demonstrate the reasonable requirement for the provision of a hire car service by him in particular (as opposed to, and in preference to, some other – perhaps even hypothetical – car and driver of a similar type or who might propose a similar service).

110.  Not only is this likely impossible in the context of any first-time applicant for an HCP, but it is also impracticable, illogical and unworkable to graft on some requirement for a “unique” or “niche” service to be provided “specifically” by that applicant – itself contrary to the rule of interpretation that seeks to avoid results that are impossible, unworkable or impracticable, inconvenient, anomalous or illogical. I also agree there is nothing in the policy statements or other materials which suggest that applicants for an HCP should understand that their applications should go further than just showing a reasonable requirement or demand for their proposed service as a type or category, and should in addition show that their proposed service specifically and individually is distinguished from some other person within the same category.

111.  Mr Suen may be correct when he says that it is the individual applicant’s proposed hire car service as specified in the application that matters, and that the inquiry focuses on his proposed service, not someone else’s. But I do not think that point is instructive as to the correct construction of regulation 14(3)(b). Of course, it is the individual applicant who seeks the HCP, for him (and not for someone else) to provide the proposed service. But what he is seeking is an HCP for him to provide the type of service specified in the application. That does not turn the focus of inquiry onto the individual applicant’s or his car’s characteristics, save in so far as they can be seen to fall within the type of service proposed.

112.  If there is a reasonable requirement for that type of service, then an HCP might be granted. That would not be blurring the line between “public” and “private” transport. Any submission made for the Commissioner that the Applicants’ proposed services are “public” transport services because anyone might book them is not tenable (see also further below). Whilst the Commissioner has submitted that the Uber business model entails the provision of services to the public at large via the Uber App, as opposed to serving and targeting people with special needs or special occasions, it seems to be common ground that there was no plying for hire. Anyway, this is a point accepted in the relevant UK authorities, such as R (on the application of United Trade Action Group Ltd) v Transport for London [2022] EWCA Civ 1026 at §§42-46, and Reading BC v Ali [2019] 1 WLR 2635 at §§33-39. Hiring a vehicle through the e-hailing app is a private service: the vehicle employed is a private car owned by the driver, and the service is only open to the person who has booked it. It is not “public” transport in the sense complained of in this case – though it does, of course, provide a service to the public.

113.  In any event, Mr Chan is correct when he submitted that the Commissioner’s position lacks consistency, in that the Commissioner has routinely granted HCPs to operators open for booking by members of the public. The fact that a wedding car is booked for a wedding, or a limousine by a corporate executive, or a private car for a person going fishing, does not create any categorical distinction between that vehicle and one booked using an e-hailing app. I also agree that there is nothing in the legislative language supporting this approach argued for the Commissioner (see also further below). The relevant type or category in question in this case is “private hire car services”, and that has no bearing on the construction question as to whether the correct focus should be on the demand for the type of service proposed, or the specific individual service that the specific individual applicant wishes to offer.

114.  I further accept Mr Chan’s submission that the Commissioner’s and Tribunal’s view of what is to be “reasonably required” is also distinctly at odds with the Secretary for Transport and Housing’s express policy assurance that e-hailing services are not excluded from the legislative scheme and that drivers can apply for HCPs. Indeed, at §37 of the Tribunal Decision, the Tribunal recognised and accepted that the broader question about authorising e-hailing services to operate in Hong Kong generally was not the issue in the case. It is also correct that there seems to be no possible difference of substance discernible between what the Applicants put forward in this case and that of the various service providers who earlier obtained HCPs.

115.  I am satisfied that, based on the above analysis alone, Ground 1 is established.

116.  Since I have already found that Ground 1 is established, I propose to deal with the other three reasons submitted by Mr Chan more economically.

117.  As to the fourth point, if the meaning of a statutory provision as properly construed will run contrary to some higher governing law, such as the Basic Law, the argument can of course be run that the provision has to be remedially read to bring it within its constitutional limit (which argument is indeed run by the Applicants as Ground 2). But that is different from saying that – as the Applicants seem to suggest – the Court should automatically take into account an individuals’ constitutional rights in discerning the meaning of a statutory provision as intended by the legislature, if the meaning of the provision is otherwise clear. Otherwise, the process of statutory construction will have pre-empted constitutional review of the relevant provision.

118.  In any event, I do not think there can be any real complaint about some form of regulation of the provision of hire car services by way of grant or refusal of permits. This is so, even if the grant or refusal of an HCP might affect an individual’s choice of work or his right to freely make productive use of his own property. Therefore, I do not think much weight lies in Mr Chan’s submission that a reading which seems more restrictive of an owner’s ability to use his property should give rise to an interpretation which is “more benign”, because the Courts do not construe statutes or subsidiary legislation as depriving a person of his normal rights unless clear language is used. With respect, this submission seems to me to be rather beside the point of the construction exercise required in this case.

119.  As to the fifth point, however, I agree. Yuong Ho Chueng concerned whether the mode of operation carried out by Uber drivers amounts to “carriage of passengers for hire or reward” within the meaning of section 52(3) such that it is to be prohibited unless granted an HCP. It was in that context that Fok PJ pointed out that particular passenger carriage in Hong Kong is intended to be operated on a strictly controlled basis, and that context makes clear that the strict control was to ensure that a person may not carry out precluded activities absent permission. The point was not addressing the proper approach to the grant of permission (and did not need to have done so, where the PSV Regulations set out the relevant process). The relevant control and degree of control – whether regarded as strict or otherwise – is provided for in the PSV Regulations, and I do not see how the Yuong case could shed any real light on the proper interpretation of “type of hire car service specified in the application”.

120.  As to the sixth point, it seems to me that this point is neither here nor there. It is the empowering statutory provision that delineates the legal boundary of the policy to be made by the Government under that statutory provision, not the other way round.

121.  What I said above is sufficient to dispose of Ground 1.

122.  But, as the matter was argued in this Court, the Commissioner sought to advance a new basis to justify why the Applicants’ application should be rejected (which is why Mr Suen submitted that the Court is not bound by the interpretation adopted by the Tribunal, and the Court is free to accept a new interpretation even though it was neither argued before nor adopted by the Tribunal).

123.  Whilst the new argument was presented in the context of responding to the Applicants’ Ground 1, it clearly was not exactly a response to Ground 1 as it arose. Hence, though I have not lost sight of this point in the overall argument on Ground 1, and I have taken it into account in reaching my ultimate conclusion on Ground 1, it seems to me to be appropriate separately to address the new point as it was developed.

G.4  The New Argument

124.  Rather than relying on the meaning of “type of” to suggest that the Applicants’ applications should be rejected, the focus has now been shifted to the meaning of “reasonably required”. It will be recalled that, at the Tribunal level, all parties including the Tribunal at least implicitly adopted the position that “reasonably required” is a reference to market demand for the relevant hire car service.

125.  However, in this Court, the Commissioner sought expressly to depart from that position. In the oral hearing, Mr Suen said it cannot be right that private hire car service should be considered as “reasonably required” as long as there is a demand for it. In other words, without expressly admitting or denying the relevance of demand, the position was that “reasonably required” means more than the existence of an unmet demand.

126.  The main theme of Mr Suen’s submissions was that, read in the light of context and purpose of the RTO as a whole, to show that a type of hire car service is “reasonably required”, the service has to address some “special market niche” rather than “serving the general public”. Serving the public generally by personalized P2P services is intended to be provided by taxis, it was argued, not by private cars with HPCs.

127.  As I understand it, Mr Suen’s submissions might be broken down into the following propositions:

(1)  There is a “public/private” divide between vehicles.

(2)  The divide is characterised by whether the vehicle is intended to provide service to the public generally. Public vehicles provide service to the public generally. Private vehicles provide services of a limited scope, for example by targeting some special market niche.

(3)  Taxis are public vehicles intended to provide services which are public in nature, i.e. to be public generally.

(4)  The HCP regime is for private vehicles. Private cars with HPCs – albeit also providing personalized P2P services – are “private vehicles” which are not supposed to provide service to the public generally. Otherwise, they would operate as a “pseudo-taxi” or as a substitute to taxis.

128.  Mr Suen said the Court should read “reasonably required” in regulation 14(3)(b) in the light of this “public/private” divide said to be intended by the legislature. If the proposed private hire car service (i.e. the personalised P2P transportation service) operates in a mode which is intended to be provided by a form of public transport (e.g. taxis), then the proposed service should not be seen as “reasonably required”.

129.  In the process leading to the Tribunal hearing (and at some point in her written submissions before this Court), the Commissioner denied that there is any categorical ban on granting HCPs to Uber facilitated vehicles. But it seems to me that the inevitable consequence of the new position taken by the Commissioner is that – unless the proposed P2P service is unavailable to the public generally, and is available only to a niche market – there is such a categorical ban, supposedly dictated by the law.

130.  It cannot be seriously disputed that this is a new basis to reject the Applicants’ applications which was neither advanced by the Commissioner before the Tribunal nor adopted by the Tribunal in its reasoning.

131.  Although the position that HCPs are not meant to function as part of the public transport system and the idea that private hire car HCPs are only intended for some special market niche was referred to in the Commissioner’s “Further Evidence” and the written submissions for the Tribunal hearing, that was intended to illustrate the Commissioner’s own policy in administering the HCP regime. As already said, the law dictates the policy, not the other way round. But the new position advanced by Mr Suen is a legal one. Rather than saying that, as a matter of policy, HCP vehicles are not treated as part of the public transport system, Mr Suen said that this position represents the correct construction of regulation 14(3)(b).

132.  However, as I understand it, Mr Suen did not rely on the actual text of the material provisions under either the RTO or the PSV Regulations to make good his submissions. Instead, he mainly relied on the legislative history leading to the introduction of the HCP regime in 1977. I shall come to the legislative history below. But, as with any statutory interpretation exercise, the starting point is and must be the actual text of the applicable provisions (of course viewed in context and by reference to its purpose). So it is also important to see if Mr Suen’s submissions could be supported by or are consistent with the relevant provisions in the current RTO or the PSV Regulations, even though he did not rely on them.

133.  Central to Mr Suen’s submissions is what might be called a “public/private” divide between vehicles, as defined by their availability to the public generally on the for hire or reward basis.

134.  It is helpful first to understand what Mr Suen meant by public or private transport or vehicles. Such terms are not defined in the RTO or the PSV Regulations. Nor did Mr Suen choose expressly to articulate his intended meanings in using those terms. But he seemed to be using the term public transport/vehicles as a shorthand for vehicles which are available, on a for hire or reward basis, (1) for members of the public generally, and (2) for general transportation purposes, rather than for some special use or occasions. That second characteristic was necessary for the Commissioner’s case to hold up; otherwise, it would be inexplicable why HCPs are granted for what is described as “wedding cars”, which are intended to be booked by any member of the public, albeit only for transportation during wedding events. Any reference to “to the public generally” below should be so understood.

135.  In the course of the oral hearing, I referred Mr Suen to the definition of “public service vehicle” in section 2 of the RTO, which is the closest term apparently found in the statute as might identify a concept of “public transport” or “public vehicles” referred to by Mr Suen.

136.  “Public services vehicles” (公共服務車輛) are defined in section 2 of the RTO as “any motor vehicle registered as a public bus, public light bus or taxi, or as a private car in respect of which a hire car permit is in force”. Perhaps the first three items – public bus, public light bus and taxi – are what most people would recognize as “public transport” in the ordinary usage of the term. But the last item shows that, once an HCP is issued for a private car, that private car becomes a “public service vehicle”. Hence, Part III of the PSV Regulations, with the short title already identified, namely ‘Road Traffic (Public Service Vehicles) Regulations’.

137.  The statutory definition of public service vehicles, operating in tandem with section 7 of the RTO, enables the Government to regulate a HCP private car on the same footing as a public bus, public light bus or taxi. There are also detailed regulations for the other categories of vehicles in the PSV Regulations, alongside the regulations for HCPs.

138.  As said, there are no general definitions as to what might be called “public car” or “public vehicle” (or “private car” or “private vehicle”) in the current RTO. But if looking at section 2, there are definitions of certain types of vehicles described as “public” or “private.

139.  For bus:

(1)  bus (巴士) means a motor vehicle constructed or adapted for the carriage of a driver and more than 19 passengers and their personal effects;

(2)  public bus (公共巴士) means a bus, other than any private bus, which is used or intended for use for hire or reward;

(3)  private bus (私家巴士) means a bus used or intended for use –

(a)  otherwise than for hire or reward; or

(b)  for the carriage of passengers who are exclusively – (i) the students, teachers and employees of an educational institution; or (ii) disabled persons and persons assisting them, whether or not for hire or reward.

140.  For light bus:

(1)  light bus (小型巴士) means a motor vehicle constructed or adapted for use solely for the carriage of a driver and not more than 19 passengers and their personal effects, but does not include an invalid carriage, motor cycle, motor tricycle, private car or taxi;

(2)  public light bus (公共小巴) means a light bus, other than any private light bus, which is used or intended for use for hire or reward;

(3)  private light bus (私家小巴) means –

(a)  a school private light bus; or

(b)  a light bus (other than a school private light bus) used or intended for use – (i) otherwise than for hire or reward; or (ii) exclusively for the carriage of persons who are disabled persons and persons assisting them, whether or not for hire or reward.

141.  Hence, “public bus” and “public light bus” are defined by reference to their being used or intended for use for hire or reward. On the flip side, being used or intended for used otherwise than for hire or reward is on its own sufficient to put a bus into the “private bus” category, and a light bus into the “private light bus” category. These seem to show that being used or intended to be used for hire or reward is closely associated with whether a vehicle will be described as “public” or not in the RTO.

142.  This is also consistent with the fact that the entire list of public service vehicles is exempted from the prohibition against being used for hire or reward under section 52(3).

143.  Mr Suen did not directly address if “public service vehicle” as defined in the RTO is what he referred to as “public vehicle” or “public transport”. If so, both taxi and HCP private car are “public” in nature. There is no divide between them. The argument that the HCP regime is not supposed to create a new form of public vehicle/transport is untenable. Because the intended legal effect of an HCP is to make “public” what would otherwise be a non-public vehicle. Also, if the so-called public nature of a vehicle is tied to its being allowed under the law to be used for hire or reward, it also cannot be said that an HCP private car is not “public” in nature.

144.  As said, Mr Suen mainly relied on the legislative background of the HCP regime to make good the submissions that personalized P2P transportation available to the public generally was intended to be provided by “public” vehicles (i.e. taxis) and, therefore, it is not “reasonably required’ to allow private cars to operate as “pseudo-taxis”.

145.  The HCP regime was first introduced by amending the RTO (then Cap 200) in 1977. The bulk of the detailed regulations now provided in Part III of the PSV Regulations was first enacted in 1981 by amending the then Road Traffic (Registration and Licensing of Vehicles) Regulations.

146.  Before examining whether the legislative history could support the propositions relied upon by Mr Suen, I should point out that I will give no weight to some materials on which he placed some emphasis, namely the memorandum prepared for the discussion of the Executive Council, in relation to the 1977 amendments and the 1981 amendments. On every page of each memorandum, at the top and the bottom, there is conspicuously printed in large font size the words “CONFIDENTIAL 機密”. These documents were not legislative documents but merely represented the Executive Governments’ views or agenda on the proposed legislative amendments. Nor were they available to the general public. I do think much explanation is needed on why the Executive Government’s intention behind putting forward or supporting a bill, which it saw fit not to be disclosed to the public, is no aid in ascertaining the legislative intent.

147.  Whilst the use of legislative materials in aid of statutory construction is permissible nowadays, the law is far away from allowing confidential and unpublished executive materials as an interpretative aid. Mr Chan submitted that an overarching principle running through the case law is that material ought not to be admitted as an interpretative aid unless it is publicly available. This rationale was succinctly put by Sales J in R (on the application of Public and Commercial Services Union) v Minister for Civil Service [2010] ICR 1197 at §55, as follows:

An Act of Parliament creates law applicable to all citizens. In my judgment, it is fundamental that all materials which are relevant to the proper interpretation of such an instrument should be available to any person who wishes to inform himself about the meaning of that law. That is not the position in relation to notes on clauses and for that reason I do not consider that are a legitimate aid to construction of an Act of Parliament

148.  The legislative background of the HCP regime, which is covered to some extent in the Yuong Ho Cheung decision at §§16-28, with a focus on the meaning of “for hire or reward”.

149.  Before the 1977 amendment, Cap 200 (1964 Ed), section 2(1) contained the following definition:

(1)  “car” means any motor vehicle constructed or adapted only for the carriage of not more than nine passengers and their effects.

(2)  “vehicle” means any vehicle whether mechanically propelled or otherwise intended or adapted for use on roads and includes a rickshaw and a chair but does not include a perambulator or any conveyance for sue solely on railways or tramways.

(3)  “public” in relation to any vehicle means standing or plying for hire or available and intended for hire and carrying goods or passengers for hire or reward.

(4)  “standing or plying for hire” means, in respect of any vehicle, being on any road in motion or stopped and exhibiting any sign or signal or having a driver who is exhibiting any sign or signal indicating that is or any portion of it is available for hire whether on a predetermined route or otherwise.

150.  Section 2(2) further provided:

For the purpose of this Ordinance, motor vehicles shall be divided into the following classes which, in respect of any vehicle which is registered under any such class or any division thereof, indicate the purpose for which the vehicle may be lawfully used –

(b) taxis, that is to say any cars which stand or ply for hire and in which the passengers are carried for hire or reward under a contract expressed or implied for the use of the vehicles as a whole at a rate indicated by the taximeters;

(c) public cars, that is to say cars, not being taxi, which either –

(i) stand or ply for hire and are sued to carry passengers at separate and distinct fares within the Colony on a recognized and predetermined route or for a recognized or purpose, in accordance with a right or licence granted by or under any enactment; or

(ii) are hired or intended to be hired for the carriage of passengers under a contract expressed or implied, other than a hire purchase agreement, for the use of the vehicle as a whole at or for a fixed or agreed rate or sum, whether or not such contract makes provision for the driving of the vehicles by the hirers;

(d) private cars, that is to say any cars which are not public cars or taxis and are not used to carry passengers for hire or reward;

151.  In respect of the public/private divide, the following observations can be made about the pre-1977 regime:

(1)  There was indeed a public/private divide for cars and vehicles generally.

(2)  The divide was defined by the ability lawfully to provide carriage service for hire or reward. Public cars could be used for hire or reward, whilst private cars could not. From the brief discussion of the current RTO above, one can see that the theme of this public/private divide, understood as such, can still be found in the current version.

(3)  Public cars are subdivided into two types: (a) those which would stand or ply for hire on a fixed route or for a specific purpose at a fare separately charged to each passenger; and (b) those where the car was available to be hired as a whole on a non-fixed route to be agreed between the driver and the hirer (this is what might now be described as personalized P2P service).

(4)  Taxis – being cars which could be used for hire or reward like a public car – were expressly excluded from the definition of public car.

(5)  Taxis were distinguishable from both types of public cars because they would stand or ply for hire and yet the route could be personalised.

152.  Mr Suen argued that the legislative history of the HCP regime shows that hire cars are intended to be “private” rather than “public”, in the sense that their personalized P2P service was not intended to be available to the public generally. I have noted above that in the pre-1977 regime the public/private divide did not turn on the availability to the public generally, but simply the lawfulness of the vehicles’ service to be used for hire or reward.

153.  Turning to the 1977 amendments, the HCP regime was introduced in 1977 by the Road Traffic Amendment (No. 2) Bill. The bill had a number of purposes, but the following three are most pertinent in the present context. They were set out in §1 of the Explanatory Memorandum to the bill: (a) to empower the Commissioner to issue permits for the use of private cars for the carriage of passengers for hire of reward (i.e. HCPs); (b) to abolish “public car” as a category; and (c) to allow vehicles previously registered as “public car” to be converted to a “taxi” upon the payment of a fixed premium.

154.  In the pre-1977 regime, the categories of “cars” were (a) taxi; (b) public car; and (c) private car. Taxis and public cars could lawfully be used for hire or reward. Taxi and some public cars (those travelling on fixed route for a recognized purpose) could also stand or ply for hire. Private cars could do neither.

155.  Post-1977, after the implementation of the HCP regime and the associated registration rules, categories of “cars” became (a) taxi; (b) private car with HCP; and (c) private car without HCP. Both taxis and private cars with HCPs could be lawfully used for hire or reward. But with the abolition of “public car” as a registration category, taxis became the only category of cars which could stand or ply for hire.

156.  One of the propositions relied upon by Mr Suen is that allowing HCP private cars’ service to be provided to the public generally (as supposed to focusing only on some special market niche) would turn them into pseudo taxis, against the legislative intention. But it seems that, after the 1977 amendments, the main distinction between taxis and HCP private cars lay in the way they obtained their hirer or passengers. Taxis would do so by standing and plying for hire on the streets whilst HCP private cars’ service had to be pre-booked. From the text of the statute, there was no obvious reference as might suggest that the distinction lay in their general availability to the public, contrary to what Mr Suen suggested.

157.  Mr Suen placed some emphasis on the speeches (which need not be set out at length in this Judgment) made by the then Secretary for the Environment when the Government moved the amendment bills for the 1977 amendments to second reading. But I do not think the speeches support his submission as to the legislative intention or relevant point of distinction.

158.  Amendments were then further made in 1981 to the Road Traffic (Registration and Licensing of Vehicles) Regulations, and introduced the regulations which have since been moved to and are now contained in Part III of the PSV Regulations. The bulk of the texts has barely changed since 1981. The amendments included the introduction of the five types of HCPs, the “reasonably required” test for issuance of HCPs, the non-mandatory factors to be considered, as well as the limit on the total number for each type of HCPs to be issued.

159.  The speech made by the then Secretary for the Environment on moving the second reading of 1981 bill included references to: (1) providing existing pak pai operators with the general opportunity to legalize their operations; (2) different permits would be issued for different types of service, namely hotel hire cars, tour hire cars, airport hire cars, school hire cars and private hire cars; (3) the majority would be in the two latter categories which had hitherto been largely served by pak pai operators; (4) contract hire cars would only operate on a prior booking basis; (5) apart from airport and hotel hire cars, the vehicles should not display any distinguishing markings on the outside; and (6) the new hire car scheme represented an endeavour on the part of the Government to regularize and provide a legal basis for the pak pai trade so as to meet a legitimate, established, demand for a mode of convenient, properly insured, personalized transport service operating under properly controlled conditions.

160.  The two speeches seem to me to confirm the observations I have already made by comparing the texts of the RTO before and after the 1977 and 1981 amendments. Whilst there were numerous references to “hung pai” or “pak pai” cars operating as illegal/pirate taxis, the Government clearly saw the illegality in their standing or plying for hire when they were not allowed to do so. Plying and standing was seen as exclusive only to taxis, but not other cars even though they were allowed to be used for hire or reward. One purpose of the new regime was to deter cars other than taxis from standing or plying for hire, and HCP private cars were supposed to obtain their passengers by prior bookings, rather than by standing or plying for hire.

161.  As I have already taken into account above, it does not appear to me that the legislative history supports the proposition that the legislature intended that the HCP regime should not allow private cars to offer personalized P2P service to the public generally.

162.  At the oral hearing, Mr Suen also pointed to regulation 15(5) where one of the non-mandatory factors for the Commissioner’s consideration is the extent to which an area from which the hire car service is proposed to operate is served by public transport. I do not see how this can advance the Commissioner’s case. This is a non-mandatory factor. The highest Mr Suen can make out of this is that the availability of transport may be a relevant factor. But it will be impossible to extrapolate this into what Mr Suen submitted – that there is a categorical ban for private hire car to provide personalized P2P service to the public generally because such service was intended to be provided by taxis or what he considered to be public vehicles.

163.  For the various reasons above, Ground 1 is made out.

H.  Ground 2: Constitutional Challenge; and Ground 3: Irrationality

164.  I propose to deal with Ground 2 and Ground 3 more economically. Both grounds are intertwined with Ground 1 since they hinge on the Tribunal’s construction of regulation 14(3)(b).

165.  Ground 2 is an alternative to Ground 1 – in the case that this Court is with the Tribunal on the correct construction of regulation 14(3)(b), Mr Chan said such an interpretation would present an impermissible restriction on a vehicle owner’s right to property under BL6 and BL106, as well as his right to work under BL33 and the common law.

166.  The property right arguments are premised on the Tribunal’s construction of regulation 14(3) as requiring there to be a demand specific to the Applicants’ proposed service, rather than only to a type of service which covers the Applicants. Since I have found that the Tribunal’s construction of regulation 14(3) is incorrect, it is not necessary to deal with Ground 2.

167.  For Ground 3, Mr Chan relied on four points.

168.  First, at §46 of the Tribunal Decision, the Tribunal said that the Applicants only showed demand for Uber Application (which obviously referred to the Uber-facilitated service rather than the Uber App itself in context), but not the Applicants’ proposed service with their vehicles. Mr Chan said this is irrational because demand for Uber facilitated service generally would entail demand for such service within this category. Reading the Tribunal Decision as a whole, I think the Tribunal clearly meant demand not just for the Uber App, but demand “specific” to the Applicants’ service provided using that App (although I have held that that is contrary to the proper construction of what was required).

169.  Second, Mr Chan said the Tribunal, also at §46, wrongly focused on “increasing” demand when it should have focused on reasonable demand. However, it was the Applicants’ case that demand for Uber’s service was increasing. So I do not think the Tribunal could be blamed for referencing increasing demand, and the adjective “increasing” had no particular consequence to the Tribunal’s line of reasoning.

170.  Third, Mr Chan submitted that it was wrong for the Tribunal to assume that the demand for the relevant transportation service could be met by any other driver using the Uber App applying for an HCP. Mr Chan submitted that the Tribunal ignored that fact that the Applicants met the Luxury Car Requirements. It appears to me that the demand referred to by the Tribunal seemed to be demand for personalized P2P service facilitated via Uber or other e-hailing platforms, without the additional requirement that the vehicle had to be as luxurious as the Applicants.

171.  Fourth, Mr Chan said the Tribunal failed to give weight to some particularly attractive features of the Applicants’ vehicles, such as their environmental friendliness and ability to serve disabled person. I believe not much explanation is needed to say this line will not support an irrationality challenge.

172.  Insofar as necessary, I find that the Applicants have not made out their case that Tribunal Decision is irrational for the reasons put forward by them. Ground 3 is not established.

I.  Relief

173.  In the circumstances, it seems to me that the appropriate relief is to quash the Tribunal Decision in respect of both Applicants. I so order.

174.  In light of the Tribunal’s apparent view (see above) that if the correct interpretation of the Regulation 14(3)(b) is that put forward by the Applicants, that would be practically determinative of the applications for the HCPs in the Applicants’ favour, it might be thought that there is no need to remit the matter. However, it seems to me that the appropriate course is to remit the matter back to the Tribunal, for reconsideration in accordance with the interpretation of the PSV Regulations as set out in this Judgment.

175.  I see no reason why the costs should not follow the event. Therefore, the Applicants’ costs should be paid by the Commissioner, as Interested Party and ‘contradictor’ in the argument leading to this Judgment. Those costs should taxed if not agreed, with certificate for two Counsel.