PO LING DISPENSARY v. PHARMACY AND POISONS BOARD

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS No.1491/1995

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REASONS FOR JUDGMENT

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Jerome Chan, J.:

1. This was an appeal, by way of rehearing, against the refusal of the Pharmacy and Poisons Board ("the Board") and the Pharmacy and Poisons Appeal Tribunal ("the Tribunal") to renew the appellant's application for registration of their premises for the purpose of s.13 of the Pharmacy and Poisons Ordinance, Cap.138. The appeal was dismissed with reasons reserved. I now hand down the reasons therefor.

2. The appellant is a firm operating a business of a dispensary at room 112, ground floor, Choi Chu House, Choi Yuen Estate, Sheung Shui, New Territories. The partnership was first set up in 1982 under the name of Po Ling Chinese and Western Medicine Company. In 1987, the appellant obtained registration as an authorised seller of poisons and changed its name to Po Ling Dispensary. The partners were Chung Yuk Lun and Kwok Mui. It is common ground that Chung was the partner in charge. In 1988, Po Ling Dispensary Company Limited was set up to run the business of the dispensary at the premises. On 25 February 1993, Chung submitted an application on behalf of "Po Ling Dispensary Limited" for registration of the premises under s.13. The application was processed as a new application notwithstanding the premises having been registered under the appellant's name since 1987. That application was refused without an appeal. On 22 September 1994, an application was submitted by Chung on behalf of the appellant for renewal of its registration. In December 1994, that application was also refused. From that refusal the appellant appealed to the Tribunal. The appeal was also unsuccessful. Pursuant to s.30A of the Ordinance, the appellant further appealed the decision of the Tribunal to this court.

3. The first and main ground of appeal was that the Tribunal's refusal to renew the appellant's registration was inconsistent and incompatible with the decision of the Disciplinary Committee to suspend the appellant as an authorised seller of poison for six months.

4. The Disciplinary Committee was appointed and met on 15 July 1994 to inquire into the conduct of the appellant after its partner and employee were convicted of offences under the Ordinance. The appellant was penalised by a suspension for six months from 26 August 1994. However, the registration of the premises would expire on 1 January 1995, i.e. less than 4 months after 26 August 1994. Effectively, the appellant was suspended as an authorised seller of poison for the full residue of its term of registration.

5. Chung was in trouble with the law under the Ordinance even before the appellant was registered as an authorised seller of poison. In November 1985, he was convicted of unlawful possession of Part I poison and antibiotics on 26 June 1985, and fined a total of $400. Since the registration of the appellant in 1987, and within a span of 2½ years between June 1990 and December 1992, Chung and/or the appellant's employees were convicted of offences under the Ordinance on three separate occasions. On 14 March 1991, Chung was convicted of failing to store Schedule I poisons in a lockable receptacle of which the key should be kept by the registered pharmacist, and possession of unregistered pharmaceutical product for the purpose of sale on 29 June 1990, and fined $500 and $300 respectively. On the same occasion, Chung was also convicted of selling a Part I poison without the supervision of registered pharmacist and failing to store Schedule I poisons in a lockable receptacle on 26 September 1990, and fined $2,000 and $1,000 respectively. At the same hearing as Chung in March 1991, another employee of the appellant was convicted of selling a Third Schedule poisons without prescription on 29 June 1990, and fined $400. On 19 April 1993, Chung was further convicted of possession of unregistered pharmaceutical products and failing to store First Schedule poisons in a lockable receptacle on 7 December 1992, and fined $500 and $2,000 respectively. On 19 April 1993, an employee of the appellant was convicted of selling a Part I poison without the supervision of a pharmacist on 7 December 1992, and fined $1,500. For the convictions on the second occasion in September 1990, the appellant was disqualified as an authorised seller of poisons for 3 months with effect from 6 October 1991. For the convictions on the third occasion, the appellant suffered the six month disqualification, the subject matter of the comparable used in the main ground of appeal.

6. It is submitted by the appellant that when imposing the six month disqualification, the Disciplinary Committee must have taken into consideration the whole history of the said convictions and decided that the seriousness of the circumstances only warranted a penalty of disqualification for a period instead of the more severe penalty of removal from the register. It was alleged that the Disciplinary Committee and the Board are but different arms of the same organ and were at the material times composed mostly of identical members. In the premises, it was submitted that the same persons should have come to the same decision and not different conclusions. It was also submitted that the Board in considering the application for renewal of registration should not further penalise the appellant again by a refusal, but should have adopted the same conclusion as the Disciplinary Committee that the said period of disqualification would suffice as adequate penalty. If that attitude was adopted, the Board ought to have renewed the registration of the appellant after it has served the full term of disqualification. In refusing the renewal, it was submitted, the appellant was effectively penalised three times for the same convictions; namely, by the Magistrate, the Disciplinary Committee and the Board. This, the appellant submitted, cannot be fair. The arguments were rejected by the Tribunal.

7. The appellant had flawed fundamentally in its main ground of appeal. The fines were imposed for the criminal activities perpetrated at the appellant's premises and were directed personally against the actual offenders of the law, and not against the appellant. The disciplinary penalties were directed against the appellant for its failure to ensure due observance of the law at its premises by its partner and employees. The two sanctions are of quite different nature, founded on different considerations and reasons, and were directed at different individuals. The consideration of an application for renewal is a whole different exercise from the first two. Wholly different considerations and statutory duties are involved. The purpose of the exercise is not to penalise or punish past wrongful conducts. The Board is bound by s.13(4) to register only a person who satisfies the considerations prescribed by the section. As stipulated by s.13(4), the Board must be satisfied that :

(1) the applicant is a fit and proper person to conduct the retail sale of poisons;

(2) the premises are suitable for conducting the retail sale of poisons thereon;

(3) the actual sale of poisons will be conducted on the premises by a registered pharmacist or in his presence or under his supervision, in accordance with s.11(1); and

(4) the premises will be under the control of a registered pharmacist in accordance with s.12.

8. The facts forming the background and history to be taken into consideration in the three different exercises might be the same; but, that is where the similarity ends. The ways such identical facts are to be treated and considered, and the weight to be given to each individual fact are wholly different. The weight to be attached to previous convictions differs substantially between an imposition of penalty and a consideration of the fitness of an individual as authorised seller of poisons. It is obvious that the weight to be attached to previous convictions must be much heavier in the latter. In the imposition of penalty, previous convictions only mean the absence of a good record in mitigation of the wrongful conduct for which the individual is to be punished, be it criminal sanction or disciplinary penalties, and no more. A man cannot be punished twice for the same wrongful act as the appellant rightly submitted. It is trite law and no reference need be made here to established principles in criminal sentencing. In the premises, it would be wrong for the Disciplinary Committee when disqualifying the appellant for six months to give the same weight and consideration to its previous convictions as when the Board considered its application for a renewal of its registration. The Disciplinary Committee could and should only punish the appellant for the particular misconduct charged against it at the inquiry and no more. However, in an application for renewal, the fact of repeated previous convictions can be a reflection upon the fitness of an individual to be trusted for discharging statutory duties of supervising the conduct of activities in a manner prescribed by law. It can be a relevant indicator of the ability and propensity of the individual to observe the law and his duties. It can be of substantial assistance in understanding the fitness of the individual to be a registered person or a licence-holder.

9. In the rejection of an application for renewal of registration, there is no question of any element of penalty involved. It would be a derogation of its statutory duty if the Board, and subsequently the Tribunal on appeal, would fail to give due and sufficient consideration to the previous convictions of the appellant. It can never be argued that the imposition of a penalty by the Magistrate and the Disciplinary Committee for the offence should prevent the Board from giving any further consideration to that fact in the discharge of its statutory duty under s.13(4). There could be no question of any unfairness as alleged by the appellant or at all. It cannot be right, and would be contrary to legislative intent, to require the authority to elect between criminal sanction, disciplinary penalty and a refusal of renewal of registration when an authorised seller of poisons commits an offence. The authority is entitled to invoke all three statutory redresses against an offender.

10. For reasons given supra, there was no inconsistency or incompatibility between the penalty handed down by the Disciplinary Committee and the Board's refusal to renew the appellant's registration.

11. The appellant further submitted that its registration was renewed on 3 January 1994, after the last conviction in relation to its business in September 1993. Since the said renewal there had not been any further offence or misconduct committed by the appellant. It was thus argued that since the said renewal the appellant had a legitimate expectation that its registration would be further renewed when there had not been any change of circumstances to its detriment. The refusal in December 1994 for a renewal of the appellant's registration for a further 12 months from January 1995 was, the appellant submitted, in breach of such legitimate expectation. It should be noted that the six month suspension from August 1994 would only expire on a date after the expiration of the registration in January 1995; and the Board did not refuse the further renewal on the basis of such suspension. The ground for the Board's refusal was that the appellant was not a fit and proper person.

12. The principle founded on a legitimate expectation has been used to redress a wrongful exercise of administrative discretion. However, the discharge of a statutory duty proper should be distinguished from a statutory duty to exercise a discretion. The former would not involve any discretion. The legal alchemy that gives an expectation sufficient legitimacy to give rise to a remedy in public law is that "it is in the interest of good administration that it should act fairly and should implement its promise, so long as implementation does not interfere with its statutory duty", (see Attorney General of Hong Kong v. Ng Yuen Shiu [1983]2 AC 629 at 638 per Lord Fraser). Thus, the principle does not lead to an absolute right to hold the authority to a promise. Sedley J. in R. v. Maff, ex parte Hamble Fisheries [1995] 2 All ER 714 at 730-1, quoted with approval the following passage from a recent article, "Making legitimate use of legitimate expectation" (1994)144 NLJ 1215,

"Legitimate expectation cannot be used to defeat a duty which public law imposes on a body nor to extend the power of a public body beyond what legislation has prescribed but it can be used to ensure that an act which is intra vires is performed if the public body has given rise to a legitimate expectation that it will be."

It would be wholly wrong to enforce a promise made by the authority if to do so would interfere with the discharge of its statutory duty. Considerations of good administration cannot override public interest to ensure due discharge of statutory duty in the interest of public good.

13. In a late affidavit filed on behalf of the Board, it was disclosed that as a matter of practice and policy, the Board would not take into consideration any recent convictions and/or disciplinary inquiry that came into existence too close to the time of the consideration of an application for renewal. The Board would simply rubber-stamp the application and postpone consideration of the conviction and/or disciplinary finding until the next application for renewal. In the present case, the last disciplinary hearing was still pending at the time of the consideration of the appellant's application for renewal for the 1994-5 registration. Accordingly, the application was rubber-stamped in January 1994 without consideration of the latest 1993 convictions of the appellant. In the premises, it would be inaccurate to suggest there had not been any change in the basis for consideration between the penultimate and last applications for renewal, though it is perhaps correct to say there had not been any change of circumstance in that there had not been any emergence of new facts in the interim.

14. It was a neglect of its statutory duty for the Board to adopt the said practice to postpone any consideration of convictions coming into existence shortly before the time for renewal. It should be incumbent upon the Board to consider all circumstances and facts known to it, irrespective how recent they might be, that are relevant for the discharge of their statutory duty. Only when it is not possible for all relevant facts of the convictions to be made available for a proper consideration by the Board, as a result of insufficient time lapsing between the conviction and the consideration of the application, should the Board legitimately give all benefits of the doubt to the applicant in respect of possible adverse inferences that could be drawn from such convictions. It was wrong of the Board in the circumstances of the present case to approve the 1994-5 renewal without considering the 1993 convictions of the appellant. All relevant circumstances of the said convictions were known to the Board, the only reason for not giving any consideration to such convictions was the strict observance of the said practice by the Board. That consideration for not taking into account the latest convictions was irrational and ill-founded. Two wrongs do not make one right. It is the Board's evidence that had the 1993 convictions been taken into account in the penultimate application for renewal, the application would have been refused instead of approved. In my view, the Board ought to have refused the renewal for 1994-5. As the 1994-5 renewal was granted by the Board upon a failure to discharge properly its statutory duties, there could be no legitimate expectation to be enforced against it in the 1995-6 application. No legitimate expectation can be born of a breach of statutory duty. In the premises, this complaint of the appellant was ill-conceived.

15. The appellant also submitted that the "sentence" of a refusal to renewal the registration was in the circumstances of the case "manifestly excessive". From what I have ruled supra, it was groundless for the appellant to equate the refusal to renew its registration as a further "sentence" upon it.

16. The refusal of the Board in the circumstances of the case, in particular the repeated convictions of Chung and his employees, cannot be criticised in any manner. I am wholly satisfied the Board was entitled to come to the decision it did in refusing the renewal of the appellant's registration. Upon a careful consideration of all relevant facts and circumstances of the case, I came to the same conclusion that the appellant was not a fit and proper person to conduct retail sale of poisons at the premises. In the premises, the appeal was dismissed with costs, save that I had made no order as to costs of the adjourned hearing.

(Jerome Chan)

Judge of the High Court