RE MR DAVID PHILIP PANNICK QC

HCMP4647/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 4647 of 2003

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REASONS FOR JUDGMENT

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The application before the court

1. By a Notice of Motion dated 21 October 2003, the Applicant sought admission under section 27(4) of the Legal Practitioners Ordinance, Cap.159 "for the purpose of representing the Hong Kong Housing Authority in CACV 250/2003 and CACV 251/2003 and any appeal from the decisions therein". The two appeals from the judgments of Chung J handed down, respectively, on 11 July 2003 and 12 August 2003, are due to be heard by the Court of Appeal on 20 April 2004.

2. After hearing submissions from Mr William Marshall SC for the Applicant, Mr Clive Crossman SC and Mr Herbert Au Yeung for the Hong Kong Bar Association and Mr Herbert Li for the Secretary for Justice, I made an order in terms of the Notice of Motion save that the words "and any appeal from the decisions therein" were deleted. No order for costs was made.

CACV 250 and 251 of 2003

3. It would appear that over 30% of Hong Kong's population reside in public housing. This is a reflection of what has been the reality in Hong Kong for a very long time, namely, that housing is scarce and property prices are high, and therefore assistance must be given to those relatively low income earners to be able to afford housing here. The Hong Kong Housing Authority ("HKHA") was set up in the 1970s with the responsibility of overseeing most, if not all, aspects of public housing, including the determination of rents.

4. The HKHA operates under the provisions of the Housing Ordinance, Cap.283 ("the Ordinance"). The two applications for judicial review dealt with by Chung J, from which the present appeals emanate, involve specifically the consideration of sections 16(1) and (1A) of the Ordinance. These provisions state:-

"16. Leases of land in estates

(1)	Subject to this Ordinance, the Authority [the HKHA] may -
	(a)	let to any person, for any period, any land in an estate, subject to the payment of such premium, rent or other consideration as the Authority may determine; and
	(b)	fix the terms, covenants and conditions on which any land in an estate may be let or occupied.
	(1A)(a)	Any determination of variation of rent after the commencement of the Housing (Amendment) Ordinance 1997 (108 of 1997) by the Authority under subsection (1)(a) in respect of any class (whether determined by the nature of the land or status of the lessee) of land in an estate for residential purposes shall only take effect at least 3 years from the date on which any immediately preceding determination in respect of the same such class of land came into effect.
	(b)	The rent determined under paragraph (a) in respect of any such class of land shall be of such amount that the median rent to income ratio in respect of all classes of land in all estates let for residential purposes, as determined by the Authority, shall not exceed 10%."

5. The applications for judicial review concerned decisions of the HKHA in which, basically, the Authority refused to review the rent that was chargeable to the applicants. The applicants for judicial review are both low income earners and the ratio of the rental they have to pay for the public housing units they occupy compared with their household income (that is, the total income of all earners in the particular applicant's household), ranges from about 17% to 24%. In other words, the rent payable by the applicants take up between 17% and 24% of their total household income. The applicants' situation is a common one. The representative rent to income ratio in Hong Kong is referred to in the Ordinance as the median rent to income ratio ("MRIR") and there are established procedures as to how this is arrived at:- see sections 16(1D) and (1E) of the Ordinance.

6. The complaint of the applicants in the judicial review proceedings was essentially that the HKHA had failed to review rents for public housing in circumstances where the economic downturn had caused the MRIR to increase substantially. While rents remained the same, household incomes in Hong Kong had on the whole dropped, with the MRIR increasing beyond 10% (this is the figure mentioned in section 16(1A)(b)).

7. The problem claimed to be faced by the applicants, like many in Hong Kong, was that in real terms, the cost to them of housing had increased at a time when they could least afford it. The question for the court was, in brief, whether in those circumstances the HKHA was obliged to review rents?

8. Chung J held that the HKHA was obliged as a matter of law to review the rents of the applicants. He found such a duty to exist as a result of the combined effect of section 16(1A) of the Ordinance and the doctrine of legitimate expectation.

9. The judge concluded that by having failed to review the rent since at least January 1999, and especially when the MRIR in Hong Kong had increased beyond the 10% referred to in section 16(1A)(b) of the Ordinance, the HKHA was in breach. After a further hearing on the appropriate form of the order he should make, by a decision handed down on 12 August 2003, Chung J made an order for mandamus whereby the HKHA was ordered "forthwith" to review the rents of the applicants.

10. The HKHA has appealed Chung J's decision. It is not necessary to go through the Notices of Appeal and the Respondent's Notices in any detail. If suffices to say that some important issues arise for determination (among other issues) including:-

(1) The extent of the duty on the HKHA to review rent for public housing, in particular, the regularity of such reviews, and the identification of the factors relevant to such reviews. Here, the judge held that there should be a review every 3 years. However, if he were held to be wrong on this, it would then be relevant for the Court of Appeal to consider whether the HKHA is obliged at all to review rents and, if so, the regularity of such reviews, or whether this is purely a matter of discretion.

(2) What are the limitations on the level of rent that HKHA can impose? In particular, can it exceed 10% of the MRIR?

(3) The proper limits of the doctrine of legitimate expectation in the circumstances of the present case. One of the issues here is the extent to which a duty can arise based on a combination of statute and the doctrine of legitimate expectation.

11. Chung J acknowledged the importance of the issues before him. In his Decision handed down on 12 August 2003, he said of his earlier judgment:

"The Judgment is of great importance to both parties and may have wide-ranging ramifications for the community."

Reasons for the Applicant to be admitted

12. In Re Flesch QC [1999] 1 HKLRD 506, Chan CJHC stated that in considering admissions, the court should take into account the factor whether the issues before it involved the determination of principles which might impact substantially on the development of the law in Hong Kong. If a case was one which did involve such a determination or was "likely to go all the way up to the Court of Final Appeal for a determination of some principles of law", this was a relevant factor in favour of admission: see Re Flesch QC at 514A. Although this ground does no doubt overlap with the ground that the case for which overseas counsel is sought is one of unusual difficulty and complexity, it is nonetheless distinct. The basis here is that the court should have the benefit of specialist and eminent overseas counsel in a case involving important points of law or principle. It is not only that the case is difficult or complex.

13. I should also add this. Where the case for which overseas counsel seeks to be admitted is one that does involve the determination of principles that may have an impact on the law in Hong Kong, this factor is not restricted by any requirement that the case itself will or is likely to end up in the Court of Final Appeal. Many important and significant cases are decided by courts at all levels. As I remarked in Re McGregor QC [2003] 3 HKLRD 585, at 589-590 (paragraph 11(1)) in relation to this aspect, the words of Chan CJHC in Re Flesch QC quoted in the previous paragraph, are merely illustrative of the point that a case involved important principles of law. It may be an a fortiori situation that a case which does or is likely to end up in the Court of Final Appeal does involve important principles and very often, this is in fact the position. Of course, if the relevant case is to be heard by the Court of Final Appeal, this is by itself a very powerful factor: see Re Pannick QC, unreported HCMP 2374 of 2003, 4 July 2003.

14. Applying the principles I have just referred to, I am in no doubt that the present application is one that should be granted. The issues that arise in the appeals deal with very much more than just statutory interpretation. Here, I would just point out that it is by no means certain that the Ordinance does expressly spell out a duty on the part of the HKHA to review rents. I think Chung J recognized this to an extent. As I have pointed out above, the duty he found to exist was one that resulted from a combination of section 16(1A) of the Ordinance and the doctrine of legitimate expectation. In addition, the rather interesting (if not novel) way in which the judge approached the matter is one which raises important legal questions which may well have a substantial impact on Hong Kong law.

15. Mr Grossman accepted that the present appeals were important and that their outcome would have very serious financial consequences for Hong Kong. Nevertheless, he argued, these were not reasons by themselves to allow overseas counsel to be admitted. I agree. The fact that a case has important ramifications, not only for the immediate parties to the litigation but to the public as well, does not by itself justify the admission of overseas counsel. Nothing in the authorities suggests such a wide proposition and nothing as a matter of principle compels this result. Hong Kong counsel are at least just as capable than overseas counsel, however eminent, to deal with important cases.

16. The decisive feature in the present application is the fact that the appeals involve a determination of important points of principle that might impact substantially on Hong Kong law. Moreover, the cases may well end up in the Court of Final Appeal for resolution. It is in my view obviously desirable in the public interest that the Court of Appeal should have the benefit of a specialist and eminent Queen's Counsel such as the Applicant in the present case.