KWAN SHUNG KING v. HOUSING APPEAL TRIBUNAL

HCAL 161/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATION LAW LIST

NO. 161 OF 1999

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J U D G M E N T

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1. This is an application by the Applicant, Mr Kwan Shung-king for a judicial review of the decision of the Housing Appeal Tribunal (the Tribunal) confirming a notice to quit dated 30 March 1999 served by the Housing Authority on the Applicant, leave having been granted by this court on 3 January 2000.

2. The factual background of the case is relatively simple.

3. On 7 August 1969, the Applicant as a tenant entered into a tenancy agreement with the Hong Kong Housing Authority in respect of a public housing flat at Room 23, Block 2, Wong Chuk Hang Estate, Wong Chuk Hang, Hong Kong ("the flat").

4. Under Clause 2(j) of the tenancy agreement, the Applicant agrees "not to use or cause or permit the flat to be used for any illegal or immoral purpose".

5. Clause 4(g) of the tenancy agreement further provides that "for the purposes of this Agreement, any act, neglect or default of any members of the Tenant's family or of any servant of his shall be deemed to be act, neglect or default of the Tenant".

6. On 3 December 1998, 5 people including Fan Koon Shing, were arrested by the police from the flat. It is not disputed that in return for a sum of $10.00 from each of the other 4 persons, Fan Koon Shing allowed them to play mahjong in the flat.

7. Subsequently Fan Koon Shing was charged with and convicted of the offence of permitting a place to be used as a gambling establishment. He was fined $1,000.00 and sentenced to 2 months' imprisonment, suspended for 12 months.

8. The other 4 persons arrested with Fan Koon Shing also pleaded guilty to the offence of gambling in a gambling establishment. They were fined $300.00 to $500.00 each.

9. On 31 March 1999, the Housing Authority, pursuant to section 19(1)(b) of the Housing Ordinance (the Ordinance), issued a notice to quit to the Applicant on the basis that he was in breach of Clause 2(j) of the tenancy agreement.

10. Despite explanation by the Applicant that neither he nor any of his family members had knowledge of people playing mahjong in the flat, the Secretary of Housing affirmed the decision to terminate the tenancy agreement.

11. The Applicant then appealed to the Tribunal pursuant to section 20(1) of the Ordinance.

12. On 31 August 1999, the Tribunal confirmed the notice to quit issued to the Applicant on 31 March 1999, hence the present application.

13. The Applicant suggests that the decision of the Tribunal is wrong in law in that on the proper construction of the tenancy agreement in question, the Applicant had committed no breach and therefore the notice to quit is illegal

14. The Applicant further suggests that the decision of the Tribunal was based on an error or misunderstanding of the relevant facts and that in making the decision as it did, the Tribunal had taken into consideration matters that should not have been admitted. Therefore the decision is tainted with procedural irregularities.

15. The present application was taken out on 29 December 1999, about 4 months from the decision of the Tribunal.

16. In the light of attitude of the Tribunal in this application and bearing in mind the fact that the Applicant did not receive the reasons of decision from the Tribunal until 13 September 1999 as well as the time taken by him to properly obtain legal advice and legal representation, the short delay should not, in the circumstances operates in any way against him.

17. For the purpose of the present proceeding, the delay will be ignored and the application is to be treated as if it was made in time.

18. The Applicant claims not to have any knowledge of the flat being used as a gambling establishment.

19. It is his case that since October 1997, he only returned to the flat on weekends and he would be staying in his workshops in Mongkok with his wife during weekdays to attend to his tailoring business.

20. The Applicant has 4 children, one daughter and three sons.

21. The daughter is married and had moved out of the flat. Her name was also removed from the list of family members.

22. The eldest son had also moved out of the flat, as he did not get along well with the rest of the family.

23. The youngest son suffers from poor health and started to reside at the Applicant's workshop in mid 1998.

24. In May 1998, the Applicant's second son, Kwan Fan Shing was convicted of the offence of burglary and was sentenced to 2 years imprisonment.

25. The Applicants suggests that before Kwan Fan Shing was imprisoned, he gave the keys of the flat to Fan Koon Shing so that Fan Koon Shing could clean it periodically. According to Kwan Fan Shing, Fan Koon Shing could be trusted as he was a friend and he worked as a cleaner in the Wong Chuk Hang area.

26. The Applicant says it never occurred to him that Fan Koon Shing would use the flat for any illegal purpose and it was not considered necessary to give any specific instruction to him.

27. In its written determination, the Tribunal took the following view of the matter:

"The Applicant, because of his work, stayed in his workshop, and he handed over the unit to his son Kwan Fan Shing for him to temporarily reside in, but after he had given the keys of the unit to Kwan Fan Shing and other family members, he disregard everything and did not care about the matter any more and had indicated that he was not clear whether his family members had passed the keys to the unit to other people. The Applicant, being the tenant of the unit, had abstained from taking reasonable steps to prevent the unit from being used for illegal purpose, contravening the stipulation of clause 2(j) of the tenancy agreement. Thus, the Appeal Tribunal unanimously decided to uphold the notice to quit concerning the unit."

28. The Tribunal did not challenge the factual matters raised by the Applicant. Mr Law, on behalf of the Tribunal adopts the same stance in this application.

29. Mr Law, however raises a preliminary jurisdictional point.

30. Mr Law suggests that as section 20(4) of the Housing Ordinance provides that the decision of the tribunal shall be final, there is no jurisdiction for the court to review the decision of the Tribunal for "error of law" committed within its jurisdiction.

31. Mr Law relies on a number of authorities in particular the cases of In re A Company [1981] AC 374 and In R v. Hull University Visitor, Ex parte Page [1993] AC 682

32. In R v. Hull University Visitor, Ex parte Page (supra), it was held that where a visitor's decision was made within his jurisdiction in that he had power under the relevant regulating documents to enter into the adjudication of the dispute in question, his decision was not amenable to challenge by judicial review on the ground of error in fact or law contained in that decision.

33. But as Mr Yim on behalf of the Applicant correctly points out, the decision in Hull's was reached on its very special factual background as Lord Browne-Wilkinson stated at page 700 of the judgment:

"In my judgment this review of the authorities demonstrates that for over 300 years the law has been clearly established that the visitor of an eleemosynary charity has an exclusive jurisdiction to determine what are the internal laws of the charity and the proper application of those laws to those within his jurisdiction. The court's inability to determine those matters is not limited to the period pending the visitor's determination but extends so as to prohibit any subsequent review by the court of the correctness of a decision made by the visitor acting within his jurisdiction and in accordance with the rules of natural justice. This inability of the court to intervene is founded on the fact that the applicable law is not the common law of England but a peculiar or domestic law of which the visitor is the sole Judge. This special status of a visitor springs from the common law recognizing the right of the founder to lay down such a special law subject to adjudication only by a special judge, the visitor."

34. With respect, the general situation has been correctly stated by Lord Griffiths in the same case at page 693:

"It is in my opinion important to keep the purpose of judicial review clearly in mind. The purpose is to ensure that those bodies that are susceptible to judicial review have carried out their public duties in the way it was intended they should. In the case of bodies other than courts, in so far as they are required to apply the law they are required to apply the law correctly. If they apply the law incorrectly they have not performed their duty correctly and judicial review is available to correct their error of law so that they may make their decision upon a proper understanding of the law."

35. Lord Browne-Wilkinson also said at page 702:

"Therefore, I agree with Mr Burke that in general any error of law made by an administrative tribunal or inferior court in reaching its decision can be quashed for error of law."

36. I accept that in circumstances where the legislation clearly confers upon a court the exclusive jurisdiction to deal with a question of law and oust the jurisdiction of the High Court to review the decision, then such decision may not be amenable to a judicial review unless the decision exceeds the jurisdiction of the Court.

37. In South East Asia Fire Brick SDN. BHD v Non-Metallic Mineral Products Manufacturing Employees Union and others [1981] AC 363, it was held that "no award shall be challenged, appealed against, reviewed, quashed or called into question in any court of law" were wide enough to oust the jurisdiction of the High Court to review the decision by certiorari except when the Industrial Court had exceeded its jurisdiction.

38. In Re A Company (supra), the court was actually dealing with the jurisdiction of the Court of Appeal to review the decision of the High Court in the light of the express provision that "The decision of a judge of the High Court ..... on an application under this section shall not be appealable"

39. Lord Diplock said at page 381 of the judgment:

"The jurisdiction of the Court of Appeal is wholly statutory; it is appellate only. The court has no original jurisdiction. It has no jurisdiction itself to entertain any original application for judicial review; it has appellate jurisdiction over judgments and orders of the High Court made by that court on applications for judicial review. Both the cases referred to in the Court of Appeal's judgment in the instant case were cases of judicial Review which started in the High Court and came up on appeal in the ordinary way, to this House in Anisminic [1969] 2 A C 147 and to the Court of Appeal in Pearlman [1979] Q B 56. The judgment in the instant case, however, does not differentiate between appeal and judicial review. On the face of it, it appears to treat the jurisdiction in both kinds of procedure as identical. This, it may be, reflects a view expressed obiter by Lord Denning M R in Pearlman, at p. 71. That was a case in which an order of certiorari was sought in respect of a determination of a county court judge made in the exercise of his statutory jurisdiction under Schedule 8 to the Housing Act 1974, which provides that his determination should be "final and conclusive." The Master of the Rolls, overruling the Divisional Court, held that certiorari would lie but added that if he had come to the contrary conclusion he would have held that "final and conclusive" excluded appeal from the country court to the Court of Appeal on questions of fact only but not on questions of law.

My Lords, with great respect, I think that this dictum on which counsel For the respondent strongly relied in wrong; but in any event it has no application to the instant case. The expression with which your Lordships are concerned instead of being "final and conclusive" is "not appealable," which perhaps makes the point even clearer, but I agree with counsel for the respondent that there is no relevant distinction between the two. The general jurisdiction of the Court of Appeal to hear and determine Appeal from any order of the High Court is conferred ....... but this is Subject to the restrictions specified in section 31(1) of which the relevant provision is:

'No appeal shall lie.... (d) from the decision of the High Court .........., the jurisdiction of which or of whom is now vested in the High Court, is to be final'."

40. With respect, none of the case relied on by Mr Law, on the proper understanding of them, supports his contention that this Court has no jurisdiction to judicially review a decision of a administrative tribunal such as the one set up under section 7A(6) of the Housing Ordinance just because the provision in the relevant section stipulates that the decision of the tribunal shall be final.

41. The principle that the High Court has jurisdiction to review a decision of an administrative tribunal on question of law is so well established, particularly in Anisminic Ltd v. Foreign Compensation Commission [1969] 2 A C 147 when it was held that as respects administrative tribunals and authorities, the old distinction between errors of law that went to jurisdiction and error of law that did not, was for practical purposes abolished. Any error of law that could be shown to have been made by them in the course of reaching their decision on matters of fact or of administrative policy would result in their having asked themselves the wrong question with the result that the decision they reached would be a nullity.

42. In Ryx Gramte Co. v. Ministry of Housing and Racal Government [1960] A C 260, it was held that a finality clause did not affect the power to award a declaration that a decision or order made by a statutory body is invalid. In Att. Gen. v. Hanwell U D C [1900] 1 Ch 51; [1900] 2 Ch 377, words as "final and conclusive" were held to be ineffective to abridge or attenuate judicial review.

43. Mr Law's submission on the jurisdictional limit of this court fails.

44. Mr Yim, on behalf of the Applicant suggests that the Tribunal had made material error on the facts which are crucial.

45. It is suggested that the Applicant in fact said he had temporary left the flat to his son Kwan Fan Shing to reside in, as he had to stay in the workshop. It is further suggested that other family members, including Kwan Fan Shing were on the list of family members, and must have their own keys to the flat. Indeed Kwan Fan Shing had all along been residing in the flat until he was imprisoned.

46. Therefore there is no question of him being given the keys and the flat to temporary reside in after the Applicant started to reside in the workshop.

47. The Tribunal might not have properly understood the Applicant's explanation, which was slightly ambiguous. There might well be further distortion because of the translation.

48. But I am not persuaded that those matters are relevant at all. The issue for the Tribunal to decide was simply whether there had been breach of clause 2(j) of the Tenancy Agreement.

49. The undisputed facts were that the Applicant entrusted the flat to his son who then entrusted it to his friend Fan Koon Shing.

50. Whether the Applicant had temporary left the flat to his son or whether his son only temporary resided in the flat is simply not relevant.

51. Mr Yim also complains of certain alleged procedural irregularities.

52. In the course of the hearing, it was brought to the attention of the Tribunal that the Applicant had committed breaches of the tenancy agreement in the past.

53. Mr Yim argues that evidence of past breaches is irrelevant because the notice to quit in question was only based on the illegal gambling activities on 3 December 1998 and not on any past breaches. The suggestion is that in allowing evidence of past breaches to be placed before it, the Tribunal had committed procedural irregularities.

54. The relevant record of the hearing indicates that in the course of the hearing, Mr Yim on behalf of the Applicant actually suggested that the Applicant had not caused any trouble to the Housing Authority in the past 30 years and that if the Housing Authority had any proof to the contrary, they would certainly raise it.

55. It was clearly in response to the suggestion of Mr Yim that the representative of the Housing Authority mentioned the past breaches to the Tribunal. The Applicant cannot have any legitimate complaint in the circumstance.

56. The Chairman of the Tribunal had indicated in the course of the hearing that the past breaches were not important. In his affirmation he also said they were not relevant to the issues of the appeal.

57. If by "the issues of the appeal", the Chairman meant the issues of whether there had been breach of Clause 2(j) of the tenancy agreement, I would agree with him. But in my view, when the Tribunal had to decide if the notice to quit should be cancelled, it is certainly entitled to look at the entire background, including the past breaches, if any. The Tribunal is also entitled to take into consideration not just 'the law', but 'the reason and sentiment'.

58. Under section 19(b) of the Housing Ordinance, the Housing Authority may terminate any lease by giving such notice to quit, as may be provided for in the lease or 1 month's notice to quit, whichever is the greater and on an appeal, the Tribunal may confirm, amend, suspend or cancel the notice to quit.

59. The Ordinance clearly confers upon the Tribunal a wide and unfettered discretion.

60. It is open to the Tribunal to amend, suspend or cancel the notice to quit even if breaches of the tenancy agreement are established. It is perhaps precisely for that reason that Mr Yim in the hearing before the Tribunal chose to make the remark as he did that the Applicant had not caused any trouble in the past 30 years.

61. The fact that the Tribunal received the evidence of the past breaches of the Applicant and the remark by the Tribunal that 'law, reason and sentiment' should be taken into consideration could not, in the circumstances of the present case, give rise to any legitimate complaint.

62. I have dealt with most of the issues raised by the parties. The only remaining issue and perhaps the most important issue is whether the Tribunal was correct in holding that the Applicant had committed a breach of the tenancy agreement.

63. Mr Law submitted that he had. Firstly Fan Koon Shing was the servant of the Applicant and he was therefore caught under Clause 4(g) of the tenancy agreement. Secondly the Applicant had not taken reasonable steps to secure that the flat had been used according to the terms of the tenancy agreement and not otherwise, he must therefore have permitted the flat to be used for an illegal purpose. Mr Law relies on Berton and Others v. Alliance Economic Investment Co. Ltd and Others [1922] 1 K B 742.

64. The Tribunal had not made any finding that Fan Koon Shing was the servant of the Applicant and its decision to confirm the notice to quit was not based on such finding. Indeed, Clause 4(g) was not relied on by the Housing Authority when the notice to quit was served. The Tribunal also did not rely on Clause 4(g) to confirm the notice to quit.

65. In any event I am not persuaded that Fan Koon Shing was the Applicant's servant at all.

66. Neither the tenancy agreement nor the Ordinance defines the meaning of 'servant'. I note that the normal reference to an 'agent' in the terms "agent and servant" is conspicuously absent. If it was the intention of whoever drafted the tenancy agreement to include any one who acts in any capacity for the tenant to render the tenant vicariously liable for his act, it should have been expressly spelt out.

67. The meaning of a servant normally refers to a personal or domestic attendant, a person employed in a house to perform various household duties according to the orders and requirement of his employer or a person who has undertaken to perform various duties for and to carry out the orders of an individual or corporate employer. (The New Shorter Oxford English Dictionary)

68. While it may not be reasonable to confine the meaning of a "servant" in Clause 4(g) to a personal or domestic attendant or a person employed in a house to perform household duties, it certainly denotes a employer and employee relationship. The plain meaning of the word "servant" does not cover a friend, a visitor or a relative. If one were to look at the Chinese tenancy agreement, "servant" is referred to as "僕人" and this further reinforces the aforesaid conclusion.

69. The tenancy agreement in question is obviously a standard form document prepared by the Housing Authority. Any ambiguity should be resolved in favour of the tenant.

70. On the undisputed facts of the case, Fan Koon Shing was not a servant of the Applicant. The Applicant did not instruct Fan Koon Shing to do what he did. Indeed, the Applicant had no knowledge or suspicion that Fan Koon Shing would make use of the flat to allow the 4 kaifongs to play mahjong. The Applicant was not responsible for the act, neglect or default of Fan Koon Shing. Clause 4(g) of the tenancy agreement did not bite.

71. There is no suggestion that the Applicant had used or caused the flat to be used for illegal purpose. Was he nevertheless in breach of Clause 2(j) because he permited the flat to be so used?

72. In the Berton's case (supra), it was held that the covenants not to "permit" the unauthorized user of the premises and not to "suffer" unauthorized acts therein did not bind the defendants to do more than to take reasonable steps to secure that the premises should be used according to the terms of the lease and not otherwise.

73. What is "reasonable steps" is of course a question of facts depending on the circumstances of each case. I think it is fair to say that the Applicant in fact had taken no step to prevent the flat from being used as a gambling establishment.

74. But what reasonable steps is the Applicant supposed to take in the light of the background of the case? Was he to inform every friend, every visitor or every relative to his flat of the terms of the tenancy agreement and that they must not committed any breach of the terms when there was no reason whatsoever to foresee or suspect that such breach would occur? I think the answer is obvious.

75. Atkin L J in Berton's said at p. 759:

"To my mind the word 'permit' means one of the two things, either to give leave for an act which without that could not be legally done, or to abstain from taking reasonable steps to prevent the act where it is within a man's power to prevent it."

76. In my view, it is only within a man's power to prevent an act if the man has knowledge or at least suspicion that the act will be committed.

77. Mr Yim suggests that a person cannot be said to have permitted an act unless he has actual knowledge that the act will be done and chooses to deliberately close his eyes to what is going on and abstains from taking any action.

78. With respect, that is setting too high a standard in a civil dispute.

79. In Hill & Redman's Law of Landlord and Tenant (1999) volume 1, para. 7085, note 2, reference is made to the case Norton v Charles Deane Productions Ltd [1970] EGD 286. It is stated that Swanwick J applied observations of Atkin L J in the Berton's case (supra) on the meaning of 'permit or suffer'. Swanwick J condensed what Atkin LJ said into the statement that "an act that a party could have, but had not prevented was 'permitted' by that party if he could reasonably have foreseen that the act might be done".

80. There is no suggestion that the Applicant or any of his family members could reasonably have foreseen that Fan Koon Shing would on that isolated occasion make use of the flat for gambling activities.

81. The Applicant might well have been a most irresponsible tenant by allowing others to have keys to the flat and did not care about the matter any more. But such irresponsible attitude is not abstaining from taking reasonable steps to prevent the flat from being used for illegal purpose when he could not have foreseen and had no reasonable suspicion that the flat would be so used.

82. In the absence of a breach of the tenancy agreement, there was no valid basis upon which the Housing Authority could serve the notice to quit on the Applicant.

83. In finding and/or confirming that the Applicant was in breach of clause 2(j) of the tenancy agreement in question, the Tribunal had committed an error of law.

84. In the circumstances, the application of the Applicant must be allowed. The decision of the Tribunal confirming the notice to quit served on the Applicant by the Housing Authority is hereby quashed.

85. The Tribunal is directed to cancel the notice to quit on the appeal by the Applicant.

86. There will also be an order nisi that the Tribunal is to pay the Applicant's costs to be taxed if not agreed. The order nisi on costs will be made absolute 14 days after the handing down of this judgment.

87. The Applicant's own costs are to be taxed in accordance with the Legal Aid Regulations.