MO CHUN HON AND ANOTHER v. DIRECTOR OF THE AGRICULTURE, FISHERIES AND CONSERVATION DEPARTMENT

HCAL 56/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 56 OF 2006

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J U D G M E N T

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1. The applicants are husband and wife.  For many years they have been poultry farmers, specialising in the rearing of quail.

2. In early 2002, at a time of great concern as to the threat of avian influenza, commonly called bird flu, the applicants entered into an agreement with Government in terms of which they ceased their quail farming operations.  Government made an ex gratia payment of about $720,000 to the applicants in return for which the applicants surrendered their licences (known as livestock keeping licences) and undertook to demolish the farm buildings in which they had bred their birds.

3. The agreement with Government did not prevent the applicants from applying for new licences but made it plain, if only by inference, that, if they did so, the fact that they had been licensed to farm quail in the past would give them no advantage.  The offer from Government, in part, read :

“(1) After receiving the allowance for the closing of business, your present licence for poultry farming will be cancelled.  If you would like to breed poultries in the future, you must apply to the Department again for the Poultry Licence.  The Department shall consider whether to issue a licence with reference to the overall circumstances of your farm, including the resolutions to the use of land and the relevant public hygiene and environmental protection conditions.

(2) …

(3) Upon receiving the allowance for the farm buildings, you must acquire the written approval from the Lands Department before rebuilding the premises inside the farm; otherwise the premises built prior to approval may be pulled down by the relevant government departments.”  [my emphasis]

4. A few weeks after they had received their ex gratia payment and surrendered their licences, the applicants applied for a new licence; a single licence this time in the name of the wife.

5. It is the applicants’ case that, with the assistance of officers from the Agriculture, Fisheries and Conservation Department, they duly complied with all the requirements necessary to obtain a new licence.  To put it another way, they did everything to comply with the licensing policy of the Director as it then was.  The applicants contend that, having submitted their application, they had a legitimate expectation that any change in the Director’s requirements would not be such as to frustrate the completion of their licence application.  The Director, however, frustrated this legitimate expectation by bringing in new requirements after they had filed their application, requirements which it was impossible for them to meet.

6. The applicants therefore seek an order of certiorari to quash the Director’s decision to refuse their licence application and, as I understand it, an order of mandamus directing that a licence be issued.

7. During the course of the hearing, I was informed that, because of the continuing bird flu threat, the Director now considers quail farming to be too dangerous and no longer permits it in Hong Kong.

8. The applicants say that, if they cannot be granted a new licence, they should at least be compensated for the time and money spent in meeting all the Director’s requirements to obtain a new licence.  In the alternative, therefore, they seek damages.

9. The Director’s case is simply enough.  It may be described as follows.  In the first place, despite their assertions to the contrary, the applicants did not meet all of the Director’s requirements, even those which they always knew they had to meet.  In the alternative, if it is found that they did meet all the requirements, they had no legitimate expectation of the kind alleged because any such expectation would limit the Director in his ability to change policy, unlawfully fettering his discretion in an area of very considerable public importance; that is, of public health.

10. It is said that in law context is everything.  That is certainly so in the present case, the context being the threat of a bird flu pandemic.

11. Evidence has been put before me that the farming of quail, when they are in the same environment as other poultry, presents one of the most acute threats to the spreading of bird flu, not simply from bird to bird but to humans too.  In that environment the bird flu virus may mutate, creating a virus that will spread infection from species to species.

12. The virus, I am told, may be spread through the air; that is, by being carried in the atmosphere.  In the result, ‘bio-security’ has become essential in the commercial breeding of poultry, particularly quail.  One means of ensuring bio-security is by segregation of quail and other poultry.

15. The Director’s decision to segregate quail farms in this manner came after the applicants had submitted their application for a new licence but about two months before he refused that application.

16. For the applicants, the segregation decision was a mortal blow.  They had already built the necessary farm buildings on the foundations of their previous buildings.  It seems they had nowhere else to build.  Their new buildings, however, according to the Director, were within 500 metres of 28 pigeon farms and one chicken farm.  Adequate segregation was simply not possible.

17. In the letter of 7 May 2003 refusing to issue a new licence to the applicants, the Director explained the basis for his new requirement :

“Testing in Hong Kong in the past has shown that quails are infected with H6N1 and H9N2 influenza viruses.  While these viruses produce relatively mild and self-limiting disease in poultry (two infants were infected with H9N2 virus in 1999) nevertheless, the presence of these viruses in quail in the same environment as poultry with H5 influenza viruses can result in re-assortment of genetic material.  Re-assortment of genetic material from influenza viruses from different species of birds is believed to have resulted in the formation of the virulent H5N1 strain of 1997. 

To minimise this risk, strict measures were introduced by the Government to ensure the strict segregation of quail from other poultry in Hong Kong.  Since March 2003, this Department requires a minimum separation of 500 metres from existing poultry farms for any new application for a livestock keeping licence, that licence being for keeping poultry, including quail.”

18. The Director went on to say that the applicants’ application did not meet this new licensing requirement :

“Our records show that there are 28 pigeon and one chicken farm within 500 metres of your proposed property for quail farming.  Hence we do not believe that adequate segregation can be achieved to ensure that any viruses in the quail do not come in contact with other poultry.  As this application is a new application, it cannot meet this requirement.”

19. The Director concluded by emphasising that the refusal of the application was in the interests of the poultry industry and the community at large.

20. As I have said, it is the applicants’ case that the Director was not permitted to refuse to issue the licence on the basis of his new segregation policy as it had only been adopted after they had submitted their licence application.  The applicants contend they had a legitimate expectation that their application would be determined only on the basis of what was required of them at the time they submitted their application.

21. The applicants, of course, claim a substantive legitimate expectation not merely a procedural one.  But this begs the question of whether there was ever a legitimate expectation of any kind.  I do not think there was, certainly not a ‘legitimate’ expectation.  I will explain why I have come to this conclusion.

22. When the applicants reached their agreement with Government to surrender their licences in return for compensation, while they knew that they could in the future apply for a new licences to breed poultry, they knew that any such applications would be considered in the context, not only of standard matters such as restrictions on land use and suitability of farm infrastructure, but would also be considered in the context of ‘relevant public hygiene and environmental protection conditions’.  That was stated explicitly in Government’s letter of offer.

23. The applicants cannot deny they knew that the purpose of the agreement was to close down quail farms in order to protect the public from the risk of a potentially catastrophic pandemic.  Government’s purpose was not simply economic; for example, to prevent a glut in the market or to honour some condition of an international convention.  The purpose was to take effective measures to meet an on-going threat and to do so to best effect as that threat continued to manifest itself.

24. Yes, of course, the applicants may have had an expectation that their application would be judged according to the Director’s published requirements at the time they completed their application and filed it.  No doubt the reasonable man would expect exactly that.  The issue, however, is whether, in public law, that expectation was ‘legitimate’.

25. The Director at all times was responsible for the administration of policies that, in respect of the threat posed by bird flu, would counter that threat.  His administrative policies had to change to meet changing circumstances.  As was said by Lord Diplock in Hughes v. Department of Health and Social Security [1985] AC 776, at 788, when stressing the importance of an unfettered power to change policy : “The liberty to make such changes is something that is inherent in our constitutional form of Government”.

26. If legitimate expectation is simply fairness in action, what must be asked, I think, is whether the Director abused his power by applying the segregation requirement to the applicants’ application after it had been filed.  Did he act unjustly towards the applicants when there was no overriding public interest to warrant it?  That his decision to apply the requirement may have resulted in some unfairness to the applicants has to be accepted.  But frankly, once the Director was convinced of the importance of the segregation policy, I do not see how he could have acted otherwise.

27. As Sedley J expressed it in R. v. Ministry of Agriculture, Fisheries and Food, ex parte Hamble (Offshore) Fisheries [1995] 2 All ER 714 :

“The notion that the legitimacy of an expectation depends ultimately on the weight it carries in the face of the need for the policy change which threatens to frustrate it is explored perceptively by P P Craig in his article ‘Legitimate expectations: A conceptual analysis’ (1992) 108 LQR 79 and in his Administrative Law (3^rd edn, 1994) ch 18, p 652.  It seems to me the approach which both best explains the current state of the law and offers a principle by which the courts may balance the two countervailing propositions is advanced in Wade and Forsyth Administrative Law (7^th edn, 1994) pp 419-420:

‘… the courts now expect government departments to honour their statements of policy or intention or else to treat the citizen with the fullest personal consideration … But those demands cannot be pressed to the point where they obstruct changes of policy which a government should be at liberty to make within its discretionary powers.’”

28. Taylor LJ, in R. v. Secretary of State for Health, ex parte US Tobacco International [1992] 2 All ER 212, at 222, expressed the principle in the following terms :

“The applicants are understandably aggrieved that, after leading them on, the government should then strike them a mortal blow by totally banning their products … However, a minister cannot fetter a discretion given him under statute.  Providing he acts within his statutory powers, rationally and fairly, he is entitled to change his policy.”

29. The present case is stark in its factual content and for that reason not difficult to decide.  As I have said, I do not see how the Director could – without materially compromising his constitutional duty under art.62(1) of the Basic Law to ‘formulate and implement policies’ for the good governance of Hong Kong – have come to any other decision.  If he had made an exception in the case of the applicants that exception may have been the Achilles’ heel that stripped away the community’s protection.

30. I am satisfied, therefore, that the applicants had no expectation enforceable as a legitimate expectation in the present case.  To put it more broadly, I am satisfied that the Director did not abuse his discretion.

31. On a purely factual issue, the applicants argued that there were no other operating poultry farms in a 500 metre radius of their farm buildings.  The Director, however, filed cogent evidence to show that he had come to his finding on an informed and entirely rational basis.

32. I turn now to what, in the course of the hearing became almost the subsidiary issue; namely, whether in any event, when they filed their application, the applicants had complied with all the Director’s known requirements.  The Director said they had not and, on balance, he appears to be correct.

33. The Director required extensive details of the applicants’ intended market for their quails.  Clearly, he wanted to be assured that the quails would be handled safely by those to whom they were sold.  The applicants could not understand this requirement.  Hong Kong, they said, had a free market.  Not in respect of all things, however, is there a free market.  The Director considered quails, unless carefully controlled, to present a serious health risk.  He was entitled to obtain the information he sought and the fact is that the applicants did not supply it.  Indeed, a couple of the intended purchasers informed the Director that they no longer intended to buy quail.  The health risk was too great.  These were Kadoorie Farm and Ocean Park.

34. The Director further required formal notification from the Lands Department that approval had been given to the applicants to build new farm buildings on their land.  No such formal notification was obtained by the Director.  It is the applicants’ case that written approval from the Lands Department was not required to enable them to rebuild.  They spoke to the relevant officers, they said, and obtained the relevant approval.  That was sufficient.  But that misses the point.  The Director required written conformation that the Lands Department had given its approval; that was a matter of which he needed to be assured before issuing a licence.  The applicants failed to provide him with that assurance in the manner demanded.

35. For the reasons given, this application for judicial review must be dismissed.