CHOW TIM FAT v. DIRECTOR OF FOOD AND ENVIRONMENTAL HYGIENE DEPARTMENT AND ANOTHER

HCAL148/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 148 OF 2007

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J U D G M E N T

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Hon Poon J (giving the judgment of the Court) :

A.  Background

1. The applicant was at all material times the 1^st respondent’s tenant of Stall Nos. 39 and 40 of Tsing Yi Market (“the Stalls”), which is managed by the Food and Environmental Hygiene Department (“FEHD”). 

2. During the currency of the tenancies, it was FEHD’s policy that :

(1) the tenancy of a stall would be terminated if 3 warning letters on account of breaches of any of the conditions/clauses of the tenancy agreement had been registered against a stall within a period of 12 months (reduced to 6 months since 13 November 2003) (“the Warning Letter Policy”); and

(2) consideration would normally be given to terminate the tenancy if 4 offences resulting in convictions under the Public Health and Municipal Services Ordinance, Cap. 132 or its regulations had been registered against a stall within 12 months (“the Conviction Policy”). 

3. Displaying goods outside the designated areas of the stalls by some of the tenants in contravention of the tenancies had given rise to various problems over the years.  On 1 October 2006, after consultation with the tenants including the applicant, FEHD implemented a scheme whereby tenants might take up an extended display area (“EDA”) in front/or at the said of their stalls (“the EDA Scheme”).  It was a voluntary scheme, the tenants being at liberty to join or not.  Should a tenant decide to join, he needed to sign a revised tenancy agreement.  For those who did not join, they would still operate their business within the confines of their stall areas. 

4. The applicant did not join the EDA Scheme. 

5. The FEHD issued 3 warning letters to the applicant dated 4 October, 22 November and 6 December 2006 respectively, alleging that the applicant had in breach of clause 2(m) of the tenancy agreements displayed goods outside the designated areas of the Stalls on three separate occasions. 

6. By letters dated 22 December 2006, the FEHD notified the applicant of its intention to terminate the tenancy agreements for the Stalls under the Warning Letter Policy and invited him to make representations.  The applicant’s solicitors made representations on his behalf by letter dated 11 January 2007, which the FEHD rejected on 13 March 2007.  By letters both dated 17 April 2007, the FEHD formally issued notices of termination of the applicant’s tenancies for the Stalls. 

7. The applicant then appealed to the 2^nd respondent under Regulation 6A of the Public Markets Regulations.  On 17 August 2007, the 2^nd respondent dismissed his appeal. 

8. The applicant took out the present proceedings claiming for :

(1) an order of certiorari to effectively quash the EDA scheme;

(2) an order of certiorari to quash the decision to terminate the applicant’s tenancies for the Stalls;

(3)    an order of certiorari to quash the decision by the 2^nd respondent dismissing his appeal; and

(4) an order extending the time for bringing the present proceedings. 

B.  The EDA scheme

9. We first consider the challenge against the implementation of the EDA Scheme. 

10. As noted, the EDA Scheme was implemented on 1 October 2006.  The application for leave to apply for judicial review was not taken out until 14 December 2007, some 14 months later.  It is undoubtedly well out of time.  As we understand the applicant’s case, he alleged that the 1^st respondent was biased against him because he did not join the EDA Scheme.  What he mounted is effectively a collateral challenge against the EDA Scheme within the context of bias. 

11. The EDA Scheme was entirely voluntary.  The applicant, having decided not to join, would still have to conduct himself according to the tenancies then subsisting for the Stalls.  His non-participation of the Scheme did not affect his rights and obligations under the tenancies a bit.  As to the participating tenants, their entitlement to display goods and merchandise within the EDA is simply irrelevant to the applicant’s rights and obligations under his tenancies.  In our view, no possible bias could have arisen out of the implementation of the EDA Scheme per se.  The applicant’s collateral challenge against the EDA Scheme, made well out of time, must fail. 

12. We believe it is for the above reasons that Mr Poon, counsel for the applicant, did not press his case on the EDA Scheme at the hearing before us. 

13. In the circumstances, we refuse to extend the time for applying for judicial review against the implementation of the EDA Scheme and dismiss that part of the judicial review application. 

C.  Extension of time for the remainders

14. We digress to deal with the extension of time for the remainders of the application for judicial review. 

15. We first look at the reason for and the length of the delay.  The applicant explained that he had to wait for the outcome of the decision of the 2^nd respondent before launching the present proceedings.  Thus the time should start to run on 17 August 2007.  Thereafter he sought disclosure of information from the 1^st respondent but to no avail.  He then took out the application for leave to apply for judicial review on 14 December 2007.  The delay was about one month only.  We accept that the length of delay is not substantial. 

16. We next consider if there is any prejudice caused by the delay.  We note the submission of Mr Wong, appearing for the 1^st respondent, that pending the determination of the judicial review, the re-tendering of the Stalls would be inhibited.  But we do not think the prejudice caused by the one month’s delay is significant.

17. In the circumstances of this case, we are prepared to extend the time for the remainders of the application for judicial review.  We now turn to consider their merits and begin with the challenge against the 1^st respondent’s decision to terminate the tenancies. 

D.  The 1^st respondent’s decision to terminate the tenancies

18. In challenging the 1^st respondent’s decision, the applicant effectively took 4 points. 

D.1.  Bias

19. First, the applicant contended that the 1^st respondent was biased against him.  In Form 86A, the applicant stated a case of actual bias based on selective enforcement and preferential treatment.  He alleged that the 1^st respondent did not take enforcement action against other tenants who had joined the EDA Scheme for their breaches of the tenancies or contraventions of the regulations but only targeted the non-participating tenants including the applicant.  He complained that between October and December 2006, 15 non-participating tenants (including him) received 3 warning letters and had their tenancies terminated subsequently, whereas the breaches of the participating tenants during the same period were tolerated. 

20. However, this allegation of actual bias is not borne out by evidence.  The 1^st respondent did take enforcement action against the participating tenants.  For example, between October 2006 and July 2007, the FEHD issued summonses to 5 different participating tenants for their contravention of the tenancies.  Each of them was also issued with a warning letter on account of conviction of the offences. 

21. Mr Poon submitted that during the same period, only a few summonses and warning letters had been issued against the participating tenants whereas 15 non-participating tenants had their tenancies terminated.  It was said to be not a co-incidence and was clear evidence of bias.  However, as rightly pointed out by Mr Wong, the difference is just the natural result of the EDA Scheme taking its course.  The participating tenants were granted the EDA under the revised tenancies.  With the additional space, the instances of them displaying goods outside the designated areas (now enlarged) thereby breaching the tenancies would naturally be reduced, as compared to the case of the non-participating tenants. 

22. We fail to see any merit in the applicant’s case of real bias.  This point must fail. 

23. In his submissions, Mr Poon sought to argue apparent bias.  But no leave was granted for him to do so for the simple reason that it was not even mentioned in Form 86A.  We would not deal with this ground. 

D.2.  No fair hearing

24. The second point taken by the applicant is that the applicant was not given a fair hearing to challenge each of the 3 warning letters leading up to the termination of the tenancies.  He also complained that the letters did not contain the particulars of the breaches. 

25. However, the evidence shows that before the FEHD issued each of the 3 warning letters, the applicant was first given a verbal warning about the breach in question by the officer carrying out the inspection.  The warning letter was issued when it was subsequently discovered that the applicant did not abide by the oral warning.  That being the case, the applicant must have been fully aware of the particulars of the breaches.  Further, in each of the warning letters, the applicant was told that if he so wished, he could contact an inspector surnamed Law regarding the matter.  Nothing stopped or could have stopped the applicant from disputing the breaches by contacting the inspector.  There is no substance in the applicant’s complaint that he was not given a fair hearing for the warning letters at all. 

26. Even assuming that the applicant was not given a right to be heard for the warning letters, that procedural deficiency is plainly cured by the appeal procedure before the 2^nd respondent : see Happy Pacific Limited carrying on business of The Fair Sauna House & Another v. Commissioner of Police, HCAL115/1999, unreported, per Stock J (as he then was) at pp.14J-15F; R. v. Lift Contractors’ Disciplinary Board, ex parte Otis Elevator Co. (Hong Kong) Ltd [1995] 5 HKPLR 78, per Litton VP (as he then was) at p.88E-G.

27. Mr Poon purported to rely on Leary v. National Union of Vehicle Builders [1970] 2 All ER 713 where Megarry J (as he then was) said at p.720 that “as a general rule, at all event, I hold that a failure of natural justice in the trial body cannot be cured by a sufficiency of natural justice in an appellate body”.  He argued that the sufficiency of natural justice before the 2^nd respondent did not cure the procedural deficiency because the applicant appeared in person before the 2^nd respondent and none of the points contended on his behalf in these proceedings was taken there and then.  We disagree.  At the hearing before the 2^nd respondent, the applicant admitted all the breaches.  The fact that he did not take any of the points now advanced in these proceedings does not assist him. 

28. The second point must fail as well. 

D.3.  Sudden change of policy

29. The third point taken by the applicant is that there was a sudden change from the Conviction Policy to the Warning Letter Policy, which led to the termination of his tenancies.  He alleged that in all the meetings and letters preceding the commencement of the EDA Scheme, the Conviction Policy was widely publicized.  It is unreasonable for the applicant, as a layman, to acknowledge and understand the parallel operation of the Conviction Policy and the Warning Letter Policy.  He contended in effect that the 1^st respondent should not have applied the Warning Letter Policy against him to terminate his tenancies. 

30. On the evidence before us, the co-existence of the Conviction Policy and the Warning Letter Policy at all material times cannot be possibly disputed.  And there can be no room for the applicant to have misunderstood that the Warning Letter Policy did not apply to him.  There was simply no change of policy as contended at all.  This point must fail. 

D.4.  Minor breaches

31. Lastly, the applicant argued that the breaches that he committed were all minor.  The 1^st respondent should not have terminated the tenancies for the Stalls. 

32. However, whether or not the breaches were minor is a matter for the 1^st respondent.  There is nothing before us to suggest that the 1^st respondent had been faulted in coming to the decision to terminate the tenancies for the Stalls.  This point also fails. 

D.5.  Conclusion

33. In our view, none of the points taken by the applicant to impugn the 1^st respondent’s decision to terminate the tenancies is meritorious.  The corresponding application for judicial review is dismissed. 

E.  The 2^nd respondent’s decision

34. We now come to the applicant’s challenge against the 2^nd respondent’s decision to dismiss his appeal. 

35. The applicant has raised no separate ground against the 2^nd respondent’s decision.  Mr Poon’s only submission is that if the applicant succeeds in impugning the 1^st respondent’s decision to terminate the tenancies, then it follows that the 2^nd respondent’s decision must fall as well. 

36. But the applicant’s challenge against the 1^st respondent’s decision has already failed.  The basis of Mr Poon’s argument is simply gone.  Further, even if the applicant is able to impugn the 1^st respondent’s decision, it does not necessarily follow that the 2^nd respondent must allow his appeal.  Indeed, we doubt if the 2^nd respondent would allow his appeal at all in light of his unequivocal admission of all the breaches.

37. The applicant’s challenge against the 2^nd respondent’s decision must fail. 

F.   Amenability TO JUDICIAL REVIEW

38. For completeness, we would like to briefly mention Mr Wong’s submission on whether the decision of the 1^st respondent in question is amenable to judicial review.  He submitted that the present subject matter concerned the civil rights and obligations of tenancies between the applicant as tenant and the 1^st respondent as landlord.  They are matters of private law and are not amenable to judicial review.  Having disposed of the present application on its merits, it is not necessary for us to come to a definite view on Mr Wong’s submission. 

G.  Orders

39. We dismiss the application for judicial review in its entirety. 

40. On costs, neither Mr Poon nor Mr Wong has sought to argue against the normal rule of costs follow event.  We therefore make an order that the applicant pays the costs of the 1^st respondent to be taxed if not agreed. 

41. We note that the hearing bundle compiled by the applicant’s solicitors is not in compliance with Practice Direction SL3, notably paragraph 1.93.  Among other matters, the exhibits to the various affirmations were not put in a separate section and, most importantly, not chronologically arranged.  This has resulted in duplications of a large number of documents.  In some instances, the documents appeared 3 times in the bundle while a number of others appeared twice.  It is apparent that no thought had been given to the format and contents of the hearing bundle.  We do not consider it right that the applicant should pay for the costs of the bundle.  Neither should his solicitors be entitled to charge for the preparation of the hearing bundle.  Mr Poon did not seek to advance any submission in these regards.  Accordingly, as between the applicant and his solicitors, we would disallow the costs of and in connection with the preparation of the hearing bundles.