ROBERT MARK TAI SEN CHOY v. MUNICIPAL SERVICES APPEALS BOARD

HCAL 1448/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO. 1448 OF 2001

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J U D G M E N T

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1. The applicant, Robert Mark Tai Sen Choy (the applicant) is the Managing Director of Cybertram Limited (Cybertram). In 2000 Cybertram rented the premises at Shops D and E, Felicity Building, 56 to 58, Hollywood Road, Central Hong Kong (the premises) for a term of 3 years commencing on 1 October 2000 to run an entertainment venue with bar and dancing facilities known as "Blush".

2. In January 2001, the applicant applied to the Liquor Licensing Board (the Board) for the issue of a liquor licence with bar and dancing endorsements for the premises which were already covered by a Provisional Light Refreshment Restaurant Licence. The proposed business hours and liquor selling hours of the premises were 12 noon to 5 a.m. the next day.

3. The Police raised no objection to the application but significant objections were received from residents in the nearby buildings, particularly those of Felicity Building and members of the Central and Western District Council.

4. The Felicity Building is a 23-storey mixed commercial and residential building. Apart from ground and lower ground floors, the other floors, comprising 136 flats are used for residential purposes. The residents' concern was that if liquors were allowed to be sold at the premises until 5 a.m., substantial noise and nuisance would be created and the well-beings of the nearby residents affected.

5. The Board, after considering representations made by all interest parties decided to issue to the applicant a 6-month liquor licence with bar and dancing endorsement with the following additional licensing condition:

"No liquor shall be sold or supplied for consumption on the Premises after 11.00 p.m."

6. The applicant appealed to the Municipal Services Appeals Board (the Appeals Board) against the decision of the Board.

7. The Appeals Board dismissed the appeal. The applicant now applies to this court for a judicial review the decision of the Appeals Board; leave having been granted by Chu J on an earlier occasion.

8. The Appeals Board adopts a neutral stance and chooses not be present. Instead, with the consent of the applicant, the Board had been granted leave to be heard.

9. In its decision, the Appeals Board had detailed all the relevant matters pertaining to the question of whether the additional licensing condition should be imposed. The Appeals Board concluded that there was no reasonable expectation that the applicant would be granted any liquor licence with no restriction on hours for sale of liquor. The Appeals Board pointed out that those establishments that had no restriction were mostly located on the south of Hollywood Road and the only two establishments on the north of Hollywood Road without time restriction on their liquor licenses were located in buildings not for residential use.

10. The Appeals Board was of the view that the applicant should have known the risk he had to take in renting the premises.

11. The Appeals Board took into consideration complaints by the residents to the effect that drunkard persons from "Blush" were seen urinating and vomiting in the street and "noises" were emitted at or around 2 a.m. The Appeals Board was doubtful of the effectiveness of the precautionary measures taken by "Blush" to prevent the problems.

12. The Appeals Board also agreed that it was appropriate to take into account the business nature of "Blush" in deciding to limit its liquor selling hours as a condition.

13. In this judicial review application, the applicant only raises one matter. It is suggested that the Appeals Board had adopted an erroneous approach by confining itself to a review of the decision of the Board instead of properly discharging its duties under the Municipal Services Appeals Board Ordinance, Cap. 220.

14. The attack on the decision of the Appeals Board rests purely on the following 2 paragraphs of its Decision:

"We find that the Licensing Board has properly considered every aspect of the case and had not committed any mistake in arriving at its decision.

We do not think the decision of the Licensing Board is so unreasonable that no sensible person who had applied his mind to the question could have arrived at its conclusion to impose that additional condition...."

15. The suggestion is that the Appeals Board had misconstrued it own role as a reviewing body instead of an appeal board. In the circumstances, the Appeals Board had not properly exercised its power in deciding if additional licensing condition was justified.

16. Section 17 of the Dutiable Commodities (Liquor) Regulations, Cap. 109 provides:

"(1) Upon application the Board may grant a liquor licence without conditions or subject to such conditions as it may thinks fit, or refuse the application.

(2) the Board shall not grant a liquor licence unless it is satisfied -

(a) that the applicant is a fit and proper person to hold the licence;

(b) that the premises to which the application relates are suitable for selling or supplying intoxicating liquor, having regard to -

(i) the location and structure of the premises; and

(ii) the fire safety and hygienic conditions in the premises;

(c) that in all the circumstances the grant of the licence is not contrary to the public interest."

17. Sub-regulation 5 of the Regulation 17 further provides that the Applicant or ................... may, within 28 days ................ appeal to the Municipal Services Appeals Board against the decision.

18. The powers of the Appeals Board are clearly set out in section 7 of the Municipal Services Appeals Board Ordinance as follows:

"(1) In determining an appeal against an administrative decision or an appeal board decision, the Board -

(a) may exercise all the powers and discretions that are conferred on the person who made the administrative decision or the first decision, as the case may require;

(b) shall affirm, vary or set aside the administrative decision or the appeal board decision and, where it sets aside the administrative decision or the appeal board decision, it shall substitute its own decision .........................."

19. Under the relevant statutory provisions, the Appeals Board has all the powers of the Board in deciding if a liquor licence should be granted and if so whether condition should be imposed. The Appeals Board can also decide what condition to impose. The Appeals Board is not bound by the decision of the Board at all. If the Appeals Board considers that the licensing condition originally imposed by the Board is not necessary or too harsh, it can dispense with or vary the condition as it thinks fit.

20. The Appeals Board must follow its own view in the exercise of its discretion.

21. There appears to be little dispute, if at all on the aforesaid approach.

22. Mr Coleman, on behalf of the Board however suggests that despite the contents of the two objectionable paragraphs, a fair reading of the decision of the Appeals Board indicates that it had indeed adopted a correct approach. The suggestion is that the Appeals Board did conduct the appeal by way of re-hearing and then made its independent decision on the merits of the case.

23. I must say there is considerable force in the argument of Mr Coleman.

24. As I have said, the written decision of the Appeals Board is lengthy and detailed. It set out the background of the matter, the issues involved in the dispute. In particular, the Appeals Board dealt with all the grounds raised by the applicant as to why the additional condition should be removed.

25. Not only did the Appeals Board deal with matters that had already been raised in the hearing before the Board, it also dealt with fresh matters. It agreed with some of the points of the Board and disagreed with others. It pointed out the fallacy of part of the reasoning of the Board and endorsed the other parts.

26. I have little doubt that the Appeals Board was fully aware of its function and had adopted the correct approach by re-hearing the matter.

27. But adopting a correct approach is one thing; whether the Appeals Board had genuinely exercised its discretion is another.

28. The issues that the Appeals Board could decide were narrow, namely whether the applicant should be granted a liquor licence and if so whether such licence should be subject to any condition.

29. As a matter of fact, bearing in mind the undisputed facts that the applicant is a fit and proper person to hold a liquor licence and that the premises are suitable for sale of liquor for consumption, the issues that the Appeals Board had to decide were even narrower, namely whether the additional condition limiting the liquor selling hours should be removed or varied. It was for example perfectly legitimate for the Appeals Board to conclude that there should be limit to the liquor selling hours but the limit should be varied so that liquor could be sold or supplied for consumption until 12 or 1 a.m. instead of 11 p.m.

30. Unfortunately, despite the length of its decision, the Appeals Board had said very little on the aforesaid issues. There was little indication that the Appeals Board had considered if the limit of liquor selling hours imposed by the Board was a reasonable one.

31. I must not ignore that the case is quite an evenly balanced one.

32. The interest of the local residents must be protected. Every attempt should be made to ensure that they would not be unduly affected or harassed by unruly behaviours of drunkards. If the applicant chooses to set up a dancing and drinking establishment in a residential area and finds the liquor selling hours of his establishment being reasonably objected to by local residents, he only has himself to blame when such objections lead to unforeseen difficulties.

33. On the other hand, there are other similar establishments in the vicinity and they are not subject to the additional licensing condition. In any event, a11 p.m. curfew on selling liquors appears to be quite rigid and can have crippling effect on an entertainment establishment. These matters are matters for the Appeals Board to take into consideration and it is not for this court to express any definitive view, as the power of this court in a judicial review application is a limited one.

34. I have considered the facts of the case and the able submissions by counsel carefully.

35. Despite the observation by Mr Coleman, I am of the view that the decision of the Appeals Board indicates that it might have been unduly influenced by the decision of the Board and had not in fact exercised its discretion properly.

36. The correct question that the Appeals Board should ask itself is not whether "the decision of the Licensing Board is so unreasonable that no sensible person who had applied his mind to the question could have arrived at its conclusion to impose that additional condition."

37. With respect, the correct question that it should ask itself is "whether in all the circumstances of the case, the additional condition is a reasonable one and if not whether it should be removed or varied?"

38. It is a question for the Appeals Tribunal to decide and it should not be bound by or unduly influenced by the earlier decision of the Board. The applicant has no burden to demonstrate that the decision of the Board was mistaken or wrong.

39. It is a fundamental rule for the exercise of discretionary power that discretion must be brought to bear on every case: each case must be considered on its own merits and decided as the public interest requires at the time. The discretion must be exercised by the body and in the manner intended by the empowering legislation.

40. On a reasonable and fair analysis of the decision of the Appeals Board, I am of the view that the Appeals Board might not have properly exercised its discretion under section 7 of the Municipal Services Appeals Board and that the applicant has demonstrated a justifiable grievance against its decision.

41. In the circumstances, I feel obliged to grant the application.

42. The decision of the Appeals Board is set aside. The matter is remitted for a fresh consideration by a differently constituted board under section 3 of the Municipal Services Appeals Board Ordinance, Cap. 220.