CHOW MARIO v. MUNICIPAL SERVICES APPEALS BOARD

HCAL 31/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 31 OF 2010

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J U D G M E N T

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A. Introduction

1.  The Applicant seeks judicial review of the decision (“the Decision”) made by the Municipal Appeals Board (“the Appeals Board”) on 11 January 2010, revoking the liquor licence (“the Licence”) issued by the Liquor Licensing Board (“LLB”) to the Applicant with effect from 18 January 2010.   If not revoked, the Licence would expire by effluxion of time in February 2010.

2.  The Applicant asks for an order of certiorari to quash the Decision.  He also submits, and I accept, that although even if the Court grants the relief sought now, the Licence would have expired, the application is not academic, as the Applicant would then be able to reapply for a new liquor licence without any restriction as imposed under Regulation 19 of the Dutiable Commodities (Liquor) Regulations (“the Regulations”) (Cap 109B)^[1].

3.  By a letter dated 3 June 2010, the Appeals Board informed the Applicant that it would adopt a neutral stance and would not take active participation in these proceedings.  The Appeals Board did not attend the hearing of the judicial review and undertook to abide by the decision of the Court.

B. Background

4.  The Applicant was a director of Billion Sino Ltd (“the Company”) until July 2009, and since then has been its employee.

5.  In April 2009, the Company decided to open a public house called “Mantis” and the Applicant was entrusted with the responsibility of making an application for a liquor licence under the Regulations.  There is no issue in the present case that the Applicant is a fit and proper person to hold a liquor licence within the meaning of Regulation 17 of the Regulations.

6.  And for that purpose, in May 2009, the Company rented a premises (“the Premises”) situated at G/F, Wing Hing Building, Nos. 25-27 Wing Hing Street, North Point, Hong Kong, for 3 years to set up for the operation of Mantis.

7.  The Premises is of an area of about 139 square metres and Mantis comprises of a bar and 2 small rooms of about 20 square metres and 10 square metres respectively.  The Company intended to operate Mantis from 6 am to 3 am.

8.  The Company has installed some sound proofing measures at Mantis.  It has hung a double-layered fleece curtain at the Premises’ entrance and a single-layered fleece curtain over the window.  It has also installed an insulator on the ceiling of the Premises and added a door to each of the small rooms.

9.  The section of Wing Hing Street in question, where the Premises is situated, is a road with three traffic lanes and about 120 metres in length.   There are two main roads at its both ends, namely King’s Road and Electric Road.  King’s Road is a road with five traffic lanes while Electric Road is one with two traffic lanes. 

10.  The surrounding buildings of the Premises and Wing Hing Street are generally residential, but there are also commercial shops located mostly at the ground floors of the buildings. 

11.  Diagonally opposite to the Premises, separated by Wing Hing Street, stands a residential building (“the Building”) known as Nos. 8A-B Wing Hing Street, North Point, Hong Kong.

12.  There is also the Empire Hotel standing opposite to the Premises and adjacent to the Building along Wing Hing Street. 

13.  The street next to Wing Hing Street in the eastbound direction is Mercury Street, which is populated with residential and commercial buildings, as well as the Causeway Bay market.

14.  The street next to Wing Hing Street in the westbound direction is Tsing Fung Street.  This is populated with restaurants which operate apparently well into the early hours of the morning.

15.  On 20 May 2009, the Applicant made an application to the LLB for the grant of a new liquor licence pursuant to the Regulations.

16.  On 4 June 2009, the Police informed the LLB that they had no objection to the Applicant’s application.

17.  On about 12 June 2009, the District Officer of the Eastern District Office, having considered the opinions of the members of the district, sent their opinions to the LLB.  The District Officer also relayed that the mutual aid committee (“the Mutual Aid Committee”) of the Building and two other incorporated owners objected to the application but none would attend the hearing of the LLB.   Further, one of the residents in the area agreed to the grant of the liquor licence on the condition that the Applicant only sold liquor from 6am to 12 midnight.

18.  On 14 July 2009, the LLB held a hearing in chambers for the application.  

19.  The LLB unanimously decided to issue the Licence (with Bar endorsement) to the Applicant with no additional conditions.   On 17 August 2009, the LLB formally issued the Licence to the Applicant which was to last from 6 August 2009 to 5 February 2010 (which coincided with the expiry date of the Provisional Light Refreshment Licence that Mantis was issued with before the grant of the Licence).

20.  By a letter dated 1 October 2009, a number of residents (“the Residents”) of the Mutual Aid Committee lodged an appeal to the Appeals Board against the LLB’s decision to grant the Licence under MSA No. 69/2009.

21.  On 3 November 2009, the LLB served a detailed statement in response to the appeal.  The Residents submitted a response thereto by a letter dated 27 November 2009.

22.  The appeal was heard by the Appeals Board on 18 December 2009.  The Applicant appeared in person at the hearing, and the Residents were represented by the Chairman of the Mutual Aid Committee. The LLB (represented by Government counsel) and the Police’s representative were also present at the hearing.

23.  The Appeals Board handed down the Decision on 11 January 2010, revoking the Licence.  

24.  On 18 March 2010, the Applicant took out the application for leave for to apply for judicial review.  I granted leave on 11 May 2010 after a hearing.  The Residents are joined as interested parties in this judicial review.  Although they have been served with the papers and informed of the date of the substantive hearing, none of them appeared at this hearing.

C.  The Decision

25.  Regulation 17 of the Regulations provides for the LLB’s powers in deciding whether to grant a liquor licence as follows:

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

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

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

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

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

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

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

…

(5) The applicant or 20 or more persons residing within a radius of 400 metres from the premises to which the application relates may, within 28 days after the date of the notice under paragraph (4), appeal to [the Appeals Board] against the decision.” (emphasis added)

26.  Further, section 7 of the Municipal Services Appeals Board Ordinance (Cap 220) provides that, in determining an appeal against, inter alia, a LLB’s decision, the Appeals Board may exercise all the powers and discretion that are conferred on the LLB which made the decision under appeal. 

27.  In the present case, the Appeals Board set aside the LLB’s decision to grant the Licence, and revoked the same on the basis that, since the Premises was located at a predominantly residential area, where it was relatively quiet along Wing Hing Street at night, it had not been demonstrated that it was not contrary to public interest to grant the Licence to the Applicant to operate at Mantis at that locality.    The reasons set out at paragraphs 11-17 of the Decision are as follows:

“法律原則及應用

11. 應課稅品(酒類)規例第17(2)條訂明─

“酒牌局除非信納以下事項，否則不得批出酒牌─

(a) 申請人是持有該牌照的適當人選；

(b) 就與申請有關的處所而言，考慮到─

(i) 處所的位置及結構；及

(ii) 處所內的消防安全及衞生情況，

該處所是適合用作售賣或供應令人醺醉的酒類的地方；

(c) 在有關個案的整體情況下，批出該牌照並不違反公眾利益。”

12.   應課稅品(酒類)規例第17(3)條又訂明─

‘酒牌局必須以書面說明作出以下決定的理由─

(a) 就遭反對的申請作出的決定；’

13.   本委員會審閱過酒牌局之會議紀錄及其為是次上訴準備之陳述書所討論之事情只涉獵周先生是否適合持有酒牌。政府律師曾力陳陳述書內第13段述及‘本局考慮了警方與東區民政事務專員提交本局的文件,以及這宗個案的整體情況後，認為申請人是持有酒牌的適當人選，決定批准申請，簽發為期12個月的酒牌(附加酒吧批註)”已包含了考慮第17(2)條之各項因素。本委員會不苟同，認為酒牌局沒有考慮或最低限度沒有說明“處所的位置 ...... 是適合用作售賣或供應令人醺醉的酒類的地方”及“批出該酒牌並不違反公眾利益’。

14.   本委員會一致裁定酒牌局之決定有謬誤之處，本委員會要重新考慮如何行使酒牌局之權力。

15.   不爭議的事實是永興街介乎英皇道與電氣道之一截雖然不是純住宅區，但其商業活動在晚上已不存在。唯一的食肆「如意café」，由於沒有酒牌，相信只會提供輕食及會於晚上12時前停止營業。換言之，周先生之處所可能是唯一一間於午夜後還繼續營業之商舖。該段永興街，除卻地舖外，各大廈均為住宅。在處所那一面，有一市政垃圾站，晚間不會運作。在處所對面有一小型酒店。整體來說，該段永興街在入夜後是頗為寧靜的。

16.   鑑於上述，本委員會一致裁定「Mantis」之位置不適合用作售賣或供應令人醺醉的酒類的地方。本委員會在評核各方利益後，未能信納批出酒牌不違反公眾利益。

結論

17.   本委員會一致裁定推翻酒牌局之決定，取消酒牌局簽發之酒牌，生效日期為本裁決書頒發後7日，即2010年1月18日。”(emphasis added)

D. The present application for judicial review

D1. The grounds of judicial review in summary

28.  The Applicant seeks judicial review of the Decision on the basis that the Decision is illegal or irrational.  The following five principal bases of illegality or irrationality are provided in the skeleton submissions:

(1) The Decision is of Wednesbury unreasonableness, because there was no sufficient evidence or at all to support the conclusion that Wing Hing Street was relatively quiet during night time (“Ground 1”).

(2) It is illegal because the Appeals Board has misunderstood the meaning of “public interest” under Regulation 17 of the Regulations (“Ground 2”).

(3) It is also illegal because there was no sufficient evidence or at all to support the conclusion that the granting of a liquor licence on Wing Hing Street would be against public interest (“Ground 3”).

(4) It is illegal because the Appeals Board has failed to take into account of all the relevant considerations (“Ground 4”).

(5)                It is irrational in the public law sense (“Ground 5”).

29.  I will now turn to deal with these grounds as they are developed and run at the hearing.

D2. Ground1

30.  It is well established if there is no evidence for a finding upon which a decision depends, or where the evidence taken as a whole is not reasonably capable of supporting a finding of fact, the decision may be impugned on the ground of Wednesbury unreasonableness:  Ashbridge Investment Ltd v Ministry of Housing and Local Government [1965] 1 WLR 1320 (CA), 1326G-H per Lord Denning MR; Coleen Properties Ltd v Minister of Housing and Local Government [1971] 1 WLR 433 (CA), 439D-F per Sachs LJ.

31.  Relying on this principle, Mr Pun, counsel for the Applicant, in his skeleton submits that the principal and material conclusion made at paragraph 15 the Decision that Wing Hing Street was relatively quite at night time (“該段永興街在入夜後是頗為寧靜的”) is not supported by any or any sufficient evidence at all.  As such, the Decision is unreasonable and should be quashed.

32.  However, Mr Pun at the hearing fairly points out that in fact there are at least two unchallenged pieces of materials before the Appeals Board which may support the finding that Wing Hing Street was relatively quiet at night time.  They are:

(1)   What is set out in the Resident’s appeal statement dated 1 October 2009, which says as follows:

“其實在電器道及英皇道之間的永興街，除日間較交通繁忙外，晚間8時左右，兩旁的店舖早已關門，過了深夜12時，當巴士停駛後，街道便更覺寧靜，這時正是居民僅能把握到安靜入睡的好機會。”

(2)   What is stated at paragraph 2 of the Eastern District Office’s memo summarizing the results of the survey it had conducted concerning the application of a liquor licence for Mantis, which says as follows:

“介乎電氣道和英皇道的永興街基本上是位宅區，而非商業區。區內只有一些店舖和一間酒店，即使在日間商業活動也不多，街道兩旁的店舖通常每天晚上八時前便關門。之後一直到晚上11時，這一帶便會悄然寂靜，只有疏落的車聲。”

33.  Notwithstanding these, Mr Pun says they do not constitute sufficient evidence for any reasonable person in the position of the Appeals Board to come to the conclusion that Wing Hing Street was relatively quiet at night time.

34.  I do not accept Mr Pun’s submissions.  In light of these unchallenged statements, I cannot say that no reasonable members in the position of the Appeals Board would have come to the conclusion in the Decision that Wing Hing Street was relatively quiet at night time.  In my view, it is entirely and reasonably open to the Appeals Board to come to that conclusion in light of these uncontradicted statements.

35.  I therefore would reject the Applicant’s first ground of judicial review.

D3. Grounds 2, 3 and 4

36.  Mr Pun submits and accepts that these three grounds can and should be considered together.  The arguments in support of them run as follow:

(1) Regulation 17(2)(c) provides that the LLB or the Appeals Board may grant a licence when in all the circumstances the grant of the licence is not contrary to public interest.

(2) Public interest must be looked at from the perspective of all the parties involved, not only at one of the parties.  As such, the Appeal Boards in considering whether issuing the Licence was not contrary to public interest must look at all the interested parties’ interests and then carry out a balancing exercise.

(3) The Appeals Board had however misunderstood the meaning of “public interest” as, in coming to the conclusion that it was not in the public interest to issue the Licence, it had only looked at the interest of the Residents (or the opposing party) by focusing only on the fact (as found by the Appeals Board) that Wing Hing Street was relatively quiet.   It had not looked at the interest of the Applicant and other users of the public house in the area.    The Decision is therefore wrong in law and should be quashed.

(4) Further or alternatively, the Decision is illegal or unreasonable and should be quashed since the Appeals Board had failed to take into account of all the relevant considerations in considering whether issuing the Licence was not contrary to public interest:

(a) It had not taken into account the effect of the Applicant’s measures introduced to reduce or control the sound or any noise generated at the Premises at night.

(b) It had not taken into account the facts that (i) over the past two years, in relation to the pub operating at the Premises before Mantis and the operation of Mantis since its opening, there was only one incident of complaint of disturbance, which event was not even pursued by the police after investigation, and (ii) the Police had no objection to the granting of a liquor licence to the Applicant.

(c) It had failed to consider whether to impose some reasonable conditions to the licence to minimize any noise or disturbance it believed Mantis might cause to the neighbourhood if a liquor licence was to be granted. 

37.  I also do not accept Mr Pun's submissions.  My reasons are as follows.

38.  Paragraphs 2, 3, 4, 7, 9 and 10 of the Decisions set out the following:

“2. 警方於2009年6月4日回覆表示不反對周先生之申請。東區民政事務專員則回覆2個大廈業主立案法團及1個互助委員會反對周先生之申請。反對者之意見可概括如下─

(甲) 過去在上址經營之酒吧對居民造成滋擾，他們不相信「Mantis」之經營者能改善情況；

(乙) 附近環境入夜後頗為寧靜及基本上是住宅區，所以不應有酒吧；

(丙) 若要光顧酒吧可到附近區域。

3. 酒牌局於2009年7月14日以閉門會議形式審議申請。酒牌局決定發牌予周先生，為期12個月。酒牌除卻有附加酒吧批註外，沒有任何附加條件。

上訴

4. 酒牌局於2009年9月23日以書面通知有關人士酒牌局之決定。反對者之一，即永興街8A-B號互助委員會集合了20名居民向市政服務上訴委員會提出上訴。上訴理由可撮錄如下─

(甲) 過往不同店號經營之酒吧對居民造成滋擾，剝奪睡眠；

(乙) 酒牌局漠視坊眾之意見；

(丙) 酒牌局沒有公開決定之準則及質疑批出酒牌是否不違反公眾利益。

......

7. 根據各人在聆訊之陳述及無爭議下，本委員會獲悉下列各點─

(甲) 「Mantis」之位置處於永興街介乎英皇道與電氣道之間，在該段永興街只有一間食肆或餐廳，名「如意café」，其他所有商舖均於晚上大約7至8時停止營業。「如意café」沒有酒牌。

(乙) 在電氣道之後一段永興街有一間西餐廳領有酒牌。與永興街平衡之清風街有多間食肆均領有酒牌。

(丙) 附近沒有以酒吧形式經營之賣酒處所。

(丁) 「Mantis」之位置前身亦是一間酒吧，曾於2007年4月24日至2009年4月28日持有酒牌。之前的處所營業時間為下午5時至翌晨3時，酒牌沒有任何附加條件。根據警方紀錄，於該兩年間只有一次打架事件要警方處理。

……

9. 周先生陳述他已採取了4種措施，務求減低滋擾。第一，他在門外及大窗換上厚的窗帘以作吸音之用。第二及第三，他指派員工送客人離開及勸喻酒醉人士離開。最後，12時後會較細音量。

10. 上訴人採納其上訴陳述書之內容。”

39.  After setting out these uncontroversial matters and the grounds of the appeal which the Residents asked the Appeals Board to consider, the Appeals Board then went on in the Decision to set out Regulation 17 and to provide the reasons as to why the Appeals Board came to the conclusion that it was not satisfied that issuing the Licence was not contrary to public interest (as quoted above).

40.  In my view, when the Decision is read properly and as a whole in this way, it is reasonably clear to me that, in considering whether the requirements under Regulation 17 were met, including the question of public interest, the Appeals Board had taken into consideration the facts that (a) there was only one incident of complaint about disturbance in the past two years, (c) the Police did not object to the grant of the Licence, (c) the Applicant had imposed those measures to control the noise at night, and (d) that people in the area who wanted to visit a drinking place at night could go to the nearby hotel or other public houses.   I am therefore not persuaded by the submissions that the Appeals Board had misunderstood the meaning of “public interest” under Regulation 17 by focusing only on the interest of the Residents or it had failed to take into consideration those relevant factors as submitted by Mr Pun.

41.  Once it is clear that the Appeals Board had taken into account of the relevant factors in its balancing exercise to decide whether or not to issue the Licence, I cannot see how it can be said that the Decision is one that is so unreasonable that no reasonable Appeals Board could come to.    Whether this court, after looking at those factors, may or may not come to a different conclusion is irrelevant.  It is a decision that the Appeals Board is empowered and entrusted by the statute to make and this Court in judicial review is not to substitute its own view with that of the Appeals Board once it is satisfied that there are no procedural irregularities and that the Appeals Board has not erred in law. 

42.  Further, I am not persuaded that the Appeals Board had acted wrongfully in law or had failed to take into consideration a relevant factor when it had not considered or suggested any conditions to be imposed for the purpose of deciding whether to issue the licence or not: 

(1) In my judgment, to say otherwise would amount to suggesting that there is a positive duty on the Appeals Board (and to that extent on the LLB) to always have to consider whether there are any conditions that would have made an initial or prima facie conclusion not to grant a liquor licence different.  I can find nothing in the Regulations to suggest this nor are there any authorities cited to me to support the same[2].   When asked, Mr Pun accepts that he cannot go so far to suggest that that there is such a duty imposed on the Appeals Board.

(2) In the absence of such a duty, and in light of the fact that the Applicant himself had not suggested to the Appeals Board at the hearing any additional conditions to be imposed in the Licence, he can hardly now complain that the Appeals Board had wrongfully failed to take into its consideration the possibility of imposing conditions.  This is further underlined by Mr Pun’s inability, when asked, to come up in precise terms what he says to be the “obviously reasonable” conditions that the Appeals Board should have (according to him) taken into account to impose in order to grant the Applicant the liquor licence.

43.  I would therefore also reject the 2^nd to 4^th Grounds of this judicial review.

D.4 Ground5

44.  Under Ground 5, what the Applicant means is that the Decision is irrational by reason of the matters stated under the Grounds 1 to 4.  Mr Pun accepts that if he fails in all these other four Grounds, there is nothing further in Ground 5.

45.  For the same reasons given above in rejecting Grounds 1 to 4, I do not see how it can be said that the Decision is irrational in the public law sense.  I would similarly dismiss Ground 5.

E. Conclusion

46.  I refuse the Applicant’s application for judicial review.

47.  Given that the Respondents and the Interested Parties have not participated in this application, I will further make an order nisi that there should be no order as to costs.  This shall be made absolute 14 days from today in the absence of any application to vary it.