CHAN MING YAN v. HONG KONG HOUSING AUTHORITY AND ANOTHER

HCAL 100/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 100 OF 2000

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J U D G M E N T

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1. This is yet another judicial review application against the decision of the Hong Kong Housing Authority (HKHA) to issue a Notice to Quit (NTQ) to the Applicant Chan Ming Yan and the decision of the Housing Appeal Tribunal (the Tribunal) confirming such notice, leave having been granted by this court on 3 March 2000.

2. The application was made more than 3 months after the decisions of the Tribunal. Mr Chan and Mr Law on behalf of the Respondents are not taking any issue on the delay which has been fully explained.

3. I therefore grant extension of time under Order 53 of the Rules of the High Court and the matter is treated as if it was commenced in time.

4. By a tenancy agreement dated 14 January 1985 and made between the Applicant and the HKHA, the Applicant became the tenant of a public housing unit at Flat A1503, Wun Wah House, Lok Wah South Estate, Kowloon (the flat).

5. The Applicant's first wife and their adopted son, Chan Wai Lun were listed as members of the tenant's family. The Applicant's first wife passed away in 1995 and the Applicant remarried in 1996.

6. The Applicant's second wife, Madam Wong Sau Kuen gave birth to a son Chan Wai Lok on 28 February 1997 and his name had been added to the list of family members in the tenancy agreement. Madam Wong is not yet a permanent Hong Kong resident and is therefore not entitled to any public housing benefit.

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

8. Clause 4(g) 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 the act, neglect or default of the Tenant".

9. On 9 December 1998, Wai Lun was arrested by the police on a charge of unlawful trafficking in a dangerous drug. The police found 15 packets of "ice" in a brown wooden box in the middle part of a bookshelf next of Wai Lun's bed.

10. Subsequently, Wai Lun pleaded guilty to the charge of unlawful trafficking in a dangerous drug and was sentenced to 2 years imprisonment.

11. The Applicant claims to have no knowledge whatsoever about Wai Lun's illegal activity. Wai Lun was not a drug addict and the Applicant had never seen him taking any drug at home. In fact on 9-10 December 1998 when Wai Lun was arrested by the police, the Applicant was working on shift and did not notice anything unusual about Wai Lun. He only became aware of Wai Lun's problem when Wai Lun telephoned home asking for $5,000 to pay for his bail money.

12. On 30 June 1999, HKHA served on the Applicant a NTQ under section 19(1)(b) of the Housing Ordinance on the ground that Wai Lun had used the flat for an illegal purpose and thus the Applicant had violated Clause 2(j) of the tenancy agreement.

13. On 10 July 1999, the Applicant gave a notice of appeal to the Appeal Penal of the Housing Bureau under section 20(1) of the Housing Ordinance and an Appeal Tribunal appointed under section 7A of the Housing Ordinance was set up to hear the appeal by the Applicant.

14. The appeal was heard on 16 November 1999 and was dismissed by the Tribunal, hence the present application.

15. Both HKHA and the Tribunal resist the application.

16. In the light of the decisions in Kwan Shung King v. Housing Appeal Tribunal HCAL 161 of 1999 and Thai Muoi v. The Hong Kong Housing Authority and another HCAL 155 of 1999, HKHA and the Tribunal no longer argue that sections 19(3) and 20(1) of the Housing Ordinance take their decisions outside the scope of any judicial review. They however wish to reserve their right should the matter proceeds further.

17. In his Notice of Application for Leave to Apply for Judicial Review, the Applicant raises the issue of whether the flat had been used for an illegal purpose. There are also the suggestions that the termination of the lease in question constitutes double punishment with no consideration being given to the plight of the family, in particular the interest of Wai Lok.

18. Mr Pun on behalf of the Applicant also chooses not to rely on those matters in the light of the decision in Thai Muoi's case (supra) although he too wishes to reserve his position.

19. Mr Pun however suggests there had been procedural impropriety in issuing and confirming the NTO and those decisions are Wednesbury unreasonable.

20. The NTO was accompanied by a letter also dated 30 June 1999 in the following terms:

"This Department is given to understand that your unit was used for illegal purpose on 8th December 1998 by your household member Mr Chan Wai Lun. Owing to your breach of the provision under Clause 2(j) of the lease, this Department has determined to issue a Notice to Quit and terminate your lease-dwelling right on 31st July 1999. Enclosed please find a formal Notice for your retention.

You must vacate the captioned unit on or before the 31st of July 1999, Otherwise you will be evicted for the sake of resuming the said unit ..."

21. The Applicant lodged his appeal under section 20(1) of the Housing Ordinance and before the hearing, the Secretary for Housing supplied to the Tribunal a certificate setting out the policy of HKHA in accordance with section 20(2A)(a) of the Housing Ordinance.

22. The certificate specifies that the policy of the HKHA with regard to the public housing is that if a tenant is in breach of Clause 2(j) of the tenancy agreement, the HKHA will take steps against the tenant, including the issue of a NTQ. The original text in Chinese is as follows:

"房屋條例（第283章）

個案編號：325/99

上訴人：陳明恩先生

房屋委員會秘書依據第20（2A）條擬備的證明書

本人證明：

（i） 按照香港房屋委員會有關公營房屋租約的政策，倘承租人違反下述租約規定房屋署可採取行動，包括向承租人發出遷出通知書：

第2（j）條：

「不得使用或促使他人或容許他人使用上述樓宇作任何違法或不道德之用途。」

（ii）房屋署於1999年6月30日向陳明恩先生發出遷出通知書，通知他署方於1999年7月31日終止其於樂華南邨奐華樓A1503室的租住權時，房委會或代表房委會行事及代表房委會的高級房屋事務經理已考慮及引用上述政策。

房屋委員會秘書
（       代行）

一九九九年八月二十四日”

23. Section 20(2A) of the Housing Ordinance provides:

"(a) Paragraph (b) shall apply in relation to any policy of the Authority which is stated and specified as being such in a certificate in writing issued for the purposes of this subsection by the Authority's secretary and as regards which the certificate also certifies that the policy was both considered and applied by the Authority when deciding to terminate the lease or, where appropriate, to issue the notice to quit to which the appeal relates.

(b) In considering an appeal under subsection (1)-

(i) if the tribunal concerned is satisfied that at the time of making the decision to which a certificate mentioned in paragraph (a) relates, the appellant was aware of the policy or could reasonably be expected to have been so aware, the tribunal shall have regard to such policy; and

(ii) if such tribunal is not so satisfied, it may, where it considers it appropriate so to do, have regard to such policy."

24. The Applicant's appeal was heard by the Tribunal on 16 November 1999 and the appeal was dismissed.

25. In its written rulings, the Tribunal states the following findings:

"Members do not accept that the Applicant did not know his adopted son trafficked in dangerous drug in above-mentioned unit. Members are of the opinion that, because the Appellant is not always in the above-mentioned unit due to long working hours, he has the responsibility to watch carefully the way the said unit is used. However, the Appellant is unable to point out what reasonable steps he had taken to prevent the above-mentioned unit from being used for illegal purpose, (this) was equivalent to permitting others to use the said unit for illegal purpose thereby violating clause (2)(j) of the tenancy agreement.

Even if the Appellant does not know that Chan Wai Lun used the above-mentioned public housing unit for illegal purpose, since Chan Wai Lun is a family member of the tenant, according to clause 4(g) of the tenancy agreement, an act or default of any members of the tenant's family member shall be deemed to be the act or default of the tenant. Therefore, Chan Wai Lun trafficked in dangerous drug in the above-mentioned public housing unit, also constitutes breach of clause 2(j) of the tenancy agreement by the Appellant.

Based on the aforesaid reasons, there is no basis for the Housing Authority to exercise its discretion; moreover, the illegal act involved by the family member of the Appellant is a serious criminal offence, capable of endangering the residents of the housing estate, and the Appellant did not give sufficient reason causing the Appeal Tribunal to think that (it) needs to exercise its discretion to give the Appellant special compassion, to preserve his occupancy status in the above-mentioned public housing unit. The Housing Authority has also indicated that if the Appellant becomes homeless after repossession of the public housing unit, the Housing Authority will first arrange his whole family to live at the temporary shelter center; if the Appellant meets the requirements relating to family income and asset, the Housing Authority will also consider allotting transitional housing to the Appellant and his family according to the established policy. Hence, the Appeal Tribunal unanimously decide to confirm the execution of the notice to quit issued to the Appellant by the Housing Authority."

26. In the NTQ, it was not stated that the Applicant was in breach of clause 2(j) because of clause 4(g). In fact, Mr Chan on behalf of HKHA quite frankly admits that HKHA is not concerned with whether clause 2(j) was breached due to act, neglect or default of the tenant himself or whether the tenant was liable under clause 4(g) due to the act, neglect or default of his family members.

27. Mr Chan says once it is found that the flat has been used for an unlawful purpose, HKHA will issue NTQ and it is for the Tribunal to find out if it is the tenant who uses, causes or permits the flat to be used for an illegal purpose or whether the tenant is liable because of the deeming provision under clause 4(g). The suggestion is that HKHA lacks the means to investigate to find out the true picture.

28. Mr Chan further suggests that as in any landlord and tenant cases, the form of a notice to quit is immaterial provide that it indicates, in substance and with reasonable clearness and certainty the intention of the person giving it to determine the existing tenancy at a certain time.

29. In any event, the failure on the part of the HKHA to specify the exact reason for serving the NTQ on the Applicant had resulted in no injustice or unfairness as the Applicant could not have said more than what he had already said in seeking to persuade HKHA to withdraw the NTQ.

30. In this judicial review proceeding, my duty is not just to decide the validity or otherwise of the NTQ. I also have to decide if there is any procedural irregularity and whether the decisions to issue and confirm the NTQ are reasonable ones.

31. As I have observed in Thai Muoi's case (supra), if clause 2(j) per se is relied on, we are concerned with the wrongdoings committed by the tenant himself whereas clause 4(g) relates to the vicarious liability of the tenant for the wrongdoings of someone else. There is a legitimate expectation that HKHA will deal with the different situation in a different manner.

32. It is therefore important for the HKHA to decide and to indicate if the NTQ was issued because it was alleged that the tenant was himself in breach of clause 2(j) or whether he was liable by reason of clause 4(g).

33. It is not open, in my view for the HKHA to take the position that as a matter of policy, once the flat has been used for an illegal purpose, a NTQ will be issued whether the tenant is himself in breach of the tenancy agreement or whether he is liable only by reason of clause 4(g).

34. The NTQ was issued under section 19(1) of the Housing Ordinance which gives the HKHA discretion to terminate a lease. It is a fundamental rule for the proper exercise of discretion that each case must be considered on its own merits and decided as the public interest requires at the time.

35. If an authority blindly adheres to a policy laid down in advance without applying its mind to the special circumstances of an individual case, it is not exercising its discretion lawfully. (Bromley L.B.C. v. Greater London Council [1983] 768, per Lords Diplock and Brandon).

36. It is not open for the HKHA to take the stance as it did that an unlawful use of the flat would invariably lead to the issue of a NTQ even when the tenant himself had done no wrong. Such a decision could well be Wednesbury unreasonable.

37. In my view, a decision to issue a NTQ on the basis that the tenant is in breach of clause 2(j) by reason of clause 4(g) is more susceptible to a judicial review on the basis that the decision is Wednesbury unreasonable. It is therefore imperative for the HKHA to state in the NTQ if clause 4(g) is being relied on.

38. I am not persuaded that I was wrong when I ruled in Thai Muoi (supra) that "if clause 4(g) is relied on, it must also be clearly stated" in the NTQ.

39. In its ruling, the Tribunal found that the Applicant did know that Wai Lun trafficked in dangerous drug and as he was unable to point out what reasonable steps he had taken to prevent the unit from being used for illegal purpose. In the circumstances he had in fact permitted others to use the unit for illegal purpose.

40. As an alternative, even if the Applicant did not know that Wai Lun used the unit for illegal purpose, the Tribunal was of the view that Wai Lun's act or default would still be attributable to the Applicant by reason of clause 4(g) of the tenancy agreement.

41. The Tribunal had not specified why the Applicant must be aware of the illegal act of Wai Lun. Wai Lun was a young man of 17. He was not a drug addict and did not have any previous history of dealing in dangerous drug. The Applicant was working on shifts and the dangerous drug was hidden inside a wooden box in Wai Lun's bookshelf. The conclusion reached by the Tribunal is highly questionable.

42. Even if the Tribunal was right in reaching the conclusion as it did, there was also a procedural irregularity when the Tribunal decided to confirm the NTQ issued by the HKHA.

43. Before the hearing by the Tribunal, the Secretary for Housing supplied to the Tribunal a certificate setting out the policy of HKHA and it is legitimate to conclude that the Tribunal must have regard to such policy in deciding to confirm the NTQ.

44. Under section 20(2A)(b)(i) of the Housing Ordinance, the Tribunal must be satisfied that the Applicant was aware of the policy or could reasonably be expected to have been so aware before the Tribunal could have regard to the policy.

45. There is no evidence at all to indicate that the Applicant was aware of the policy or could reasonably be expected to have been so aware. It was wrong for the Tribunal to have regard to the policy of HKHA that if a tenant was in breach of clause 2(j) of the tenancy agreement, HKHA would issue a NTQ to the tenant.

46. Mr Law, on behalf of the Tribunal suggests that the Tribunal could have relied on section 20(2A)(b)(ii) which provides:

"if such tribunal is not so satisfied, it may, where it considers it appropriate so to do, have regard to such policy."

47. If the Tribunal considers it appropriate to take into consideration the policy of HKHA when the Applicant was not aware of the policy and could not reasonably be expected to have been so aware, the Tribunal must state the reasons for its conclusion. After all, how else is the court to examine if the decision to have regard to the policy is Wednesbury reasonable or otherwise?

48. A decision to deprive a tenant of his home is an extremely serious matter, particularly when the tenant himself has done no wrong and is held liable only because a family member uses the premises for an illegal purpose without his being aware of it. A court will need a lot of persuasion to be convinced that such a decision is not unreasonable.

49. I have considered the background of the case and counsel's submission carefully, I am satisfied that the decision of HKHA to issue the NTQ and the decision of the Tribunal in confirming such NTQ cannot be upheld.

50. Both decisions are hereby quashed.

51. There will also be an order nisi that HKHA and the Tribunal are to bear the Applicant's costs of this application. Such 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.

52. There will also be a Legal Aid taxation of the Applicant's own costs.