ORRICO, PHILIPPE AND OTHERS v. MUNICIPAL SERVICES APPEALS BOARD AND ANOTHER

HCAL 24/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 24 OF 2014

___________________

___________________

___________________

J U D G M E N T

___________________

Introduction

1.  This is a judicial review of a decision revoking the liquor license of a restaurant. I had previously granted the applicants ex parte leave to apply for judicial review of the decision which I stayed in the meantime. I have decided to grant the judicial review and these are my reasons for doing so.

The licensing history

2.  The 1^st applicant operates a fine dining restaurant through the corporate vehicle of the 2^nd applicant at the ground floor at Shops B to D of Elegance Court, 6-14 Upper Station Street, Sheung Wan, Hong Kong (the premises).  On 13 February 2014, the Municipal Services Appeals Board (the MSAB) revoked the liquor licence of the premises which had been granted by the Liquor Licensing Board (the LLB) on 29 October 2013. It is the decision of the MSAB to revoke the liquor licence that is the subject of the judicial review.

3.  On 10 July 2013, the 1^st applicant applied for a General Restaurant Licence for the premises. A provisional licence was granted and issued on 25 October 2013 for the period up to 24 April 2014. 

4.  On 17 July 2013, the 1^st applicant also applied to the LLB for a liquor licence for the premises. On 29 October 2013, the LLB considered the application in an open hearing. There was strong objection from local residents against the granting of the liquor licence whose general grounds of objection were that the surrounding locality of the premises was primarily residential and that the premises were not suitable as a licensed restaurant; that the operation of a licensed restaurant at the premises would generate late night noise and create disturbance to local residents; and that granting the liquor licence would encourage the establishment of similar businesses in the area. At the conclusion of the hearing, the LLB granted the liquor licence for the premises upon being satisfied that the 1^st applicant was a fit and proper person to hold a liquor licence, that the premises were suitable for selling or supplying intoxicating liquor and that in all the circumstances the grant of the liquor licence was not contrary to public interest. The LLB decided to issue a 9 month liquor licence so as to monitor the performance of the licensee and the operation of the restaurant at the premises. The following additional licensing conditions were imposed:

“(a) All doors and windows of the premises shall be kept closed between 6:00 p.m. and 9:00 a.m. the following day;

(b) No liquor shall be sold or supplied for consumption on the premises between 10:00 p.m. and 9:00 a.m. the following day;

(c) No liquor shall be consumed on the premises between 11:00 p.m. and 9:00 a.m. the following day;

(d) No music or other sound amplification device or TV shall be played or used on the premises between 10:00 p.m. and 9:00 a.m. the following day; and

(e) The licensee shall with due diligence ensure that liquor sold or supplied is to be consumed on the premises only.”

5.  On 6 November 2013, the applicants appealed to the MSAB against the LLB’s decision to grant a less than full term licence of 9 months and the imposition of additional licensing conditions (a) to (d). On 31 December 2013, various residents also appealed to the MSAB against the LLB’s decision to grant the licence.

6.  On 17 January 2014, the MSAB heard the two appeals together.

7.  On 13 February 2014, the MSAB handed down its written decision revoking the grant of the liquor licence with immediate effect.  The written decision briefly described the background to the two appeals and then gave the following description of the premises and the locality:

“8. The premises, with the area of about 172 square metres, are located on the ground floor of a commercial cum residential building and provided with a separate access. It is only the ground floor for commercial purpose and the upper floors purely residential. In fact, there is no residential units right above the Premises. Above the Premises is the podium for the enjoyment of residents of the upper floors.

9. Upper Station Street (“the Street”) is a very short and narrow street extending into Tai Ping Shan Street at one end and into Hollywood Road at the other end. It is one way traffic but just wide enough for 2 vehicles to pass through together. Other than the Premises, there is another restaurant holding a liquor licence. That restaurant is right at the end of the Street before joining into Tai Ping Shan Street. The Premises is somewhere in the middle of the Street and next to a sitting out area.

10. Shops or offices in the Street trade in ivory items, cosmetic, sausage making, art and design.  These trading activities stop at night, hence the Street would be very quiet at night time.  Across the Tai Ping Shan Street, there is only a take away shop.  At the other end of the Street and across the Hollywood Road there is a food and beverage outlet at No.223-209 of Hollywood Road, but there is no shop opening at night time at the stretch of the road right opposite to the Street.”

8.  At the conclusion of this description, the MSAB stated that it accepted that the street would be very quiet at night time with no commercial activity except for the premises.

9.  The MSAB then disposed of the two appeals by the following single paragraph:

“12. These 2 appeals raise the difficult question of balancing competing interests of residents and businessman. The Appeals Board has given the matter very serious consideration and at the end of the day has come to the conclusion that the Premises is not suitable for selling intoxicating liquor having regard to its location and it is contrary to the public interest to grant liquor licence. In the circumstances, not only the appeal by Mr ORRICO is dismissed, but also the appeal by the residents of Elegance Court and its vicinity is allowed. The liquor licence granted by the LLB is hereby revoked with immediate effect from the date of this decision.”

10.  Accompanying the written decision of the MSAB were notes of hearing which provided a brief overview of the persons in attendance, the appeals and the grounds, the background to the appeals and a brief description of the events at the hearing.

11.  Because the premises had been granted a provisional General Restaurant Licence until 24 April 2014, the liquor licence was also issued until that date. On 30 June 2014, a full General Restaurant Licence was issued for the premises. As a result, a fresh liquor licence was issued from the date of issue of the full licence to 28 July 2014, being the date of expiry of the 9 months licence period granted by the LLB. In the intervening period on 8 July 2014, the applicants, at the instigation of the LLB, applied for a renewal of the licence which is pending the outcome of these judicial review proceedings. By this Court’s order of 7 March 2014, the MSAB’s decision was stayed and this kept in effect the conditional liquor licence granted by the LLB on 29 October 2013.

12.  As I have just explained the original liquor licence expired on 28 July 2014 but the applicants’ appeal disputing the licence’s 9 months duration and the 4 additional conditions remain unresolved. Even after this hearing, the matter will be referred back to the MSAB to decide on the two appeals in relation to the original grant of the licence. It will be some time before the dispute over this licence is finally resolved. Clearly events have overtaken the applicants’ dispute with the original licence without resolution. I am informed by an officer of the secretariat of the LLB in an affirmation filed with the Court that the renewal of the applicants’ licence is likely to meet objection and a tentative date has been fixed for an open hearing on 16 September 2014. In other words, the process in relation to this liquor licence is likely to start all over again. I will say more about this matter later on in my judgment.

13.  I was also informed by the officer that: "By letter dated 9 July 2014, the LLB informed the 1^st Applicant that the Police has recommended that additional licensing condition (d) be amended to "No sound amplification device or TV shall be switched on and no music shall be played on the premises between 10.00 p.m. and 9.00 a.m. the following day. " and that if he does not accept the additional licensing conditions, the LLB would conduct an open hearing to hear his application." By letter dated 18 July 2014, the 1^st applicant accepted the additional licensing condition.

14.  Two observations I should make about what has taken place. First, the LLB is an independent and impartial licensing body that should make up its own mind as to whether or not licence conditions should be imposed. The licence condition is a recommendation from the Police and should be treated as such. Here the LLB has put an ultimatum to the 1^st applicant that if he does not accept a condition recommended by the Police the renewal application will be dealt with in an open hearing. Secondly, the new condition is basically the same as the previous condition but slightly reworded. I fail to see the purpose of the amendment and what it seeks to achieve. The imposition of conditions on a licence requires full and proper consideration. They should be imposed for a purpose and for good reason, and only after appropriate consideration of the issues and circumstances. They should never be imposed for the sake of it.

The licensing system

15.  The sale and consumption of liquor on premises is regulated through a licensing system administered by the LLB under the Dutiable Commodities (Liquor) Regulations, Cap 109B. See Sabinano II Marcel R v MSAB [2014] HKCU 538. A person seeking a new liquor licence, or an amendment to or renewal of a current liquor licence is required to make application to the LLB. In the case of an application for a new licence, the LLB may refuse it, or grant it without conditions or with such conditions as it thinks fit. Once granted a licence is normally valid for a period of one year. The LLB’s discretion to grant a liquor licence is subject to the limitations under regulation 17(2) which provides that it cannot grant a licence unless it is satisfied that the applicant is a fit and proper person to hold the licence; that the premises are suitable for selling or supplying intoxicating liquor, having regard to the location and structure of the premises and the fire safety and hygienic conditions in the premises; and that in all the circumstances the grant of the licence is not contrary to the public interest.

16.  The statutory requirements provide an important guide to the LLB in the discharge of its responsibilities under the Regulations in the processing of a new or current liquor licence. The LLB is obliged in every case, at least two weeks prior to considering an application, to cause it to be advertised in such manner as it may decide appropriate. The purpose of the advertisement is to give notice of the application to the public at large and for any affected or interested party to make representations in relation to it. The public interest and the views of the public play an important role in the consideration of an application for a liquor licence. In processing an application for a liquor licence, the LLB also seeks the views of relevant bodies or authorities, such as the Police and the relevant District Office.

17.  The discretionary power of the LLB must be exercised in accordance with the objects and the policy of the Regulations, and whilst the discretion to grant a licence is wide it is limited by the provision that the licence cannot be granted unless the LLB is satisfied of the statutory requirements under regulation 17(2). When the LLB makes a decision in relation to an application, it must provide written reasons for it to the applicant and to any person or body that has expressed an interest in the application. Under regulation 17(5) there is a right to appeal the LLB's decision within 28 days after the date formal notice of the LLB's decision has been given which can only be exercised by the applicant or 20 or more persons residing within a radius of 400 metres from the premises. It is important to note that the only third-party right of appeal is given to 20 or more local residents.

18.  An appeal of a decision by the LLB is made to the MSAB and is by way of rehearing. Hence the MSAB is required to conduct an independent and impartial determination and to consider the issues afresh. In determining an appeal, the MSAB may affirm, vary or set aside the LLB's decision and in the latter case it may substitute its own decision. The MSAB must give reasons in writing for its decisions, including its findings on material questions of fact and by reference to evidence or other material on which the findings were based.

Some comments about the licensing system

19.  At this juncture, it is appropriate that I make some comments about the licensing system for licensed premises. When one stands back and looks at the system in place, it is understandable why it has been criticised by both applicants and objectors alike. If a commercial operator wishes to establish a licensed restaurant or bar he needs to apply for a restaurant licence which in most circumstances will be for a General Restaurant Licence or a Light Refreshment Restaurant Licence. The application is made to the Food and Environmental Hygiene Department (the FEHD). A procedure has been laid down for the processing of restaurant licences. It involves initial screening and vetting of the application after which a Letter of Requirements is issued. This normally sets out a range of works and matters that have to be attended to before a licence is issued. In the guidance notes issued by the FEHD it is suggested, amongst other things, that an applicant should choose premises which are suitable for operating a restaurant business under the Occupation Permit, the Government lease conditions and the relevant statutory plan. A key requirement for a restaurant licence is that under the planning code a restaurant is a permitted use of the premises. This is probably where the first problem arises.

20.  A planning code is formulated setting out a range of permissible and non-permissible uses for an area with varying requirements that have to be satisfied for a particular use to be permitted. To a large extent the objective of a planning code is to reflect the current and future character of an area by providing guidance for the use and development of land within it. It is an important document and there is a legal obligation on public officers and bodies to use approved plans as standards for guidance in the exercise of any powers vested in them. See section 13 of the Town Planning Ordinance, Cap 383.

21.  There will always be underlying tension between the various interests affected by a planning code. This is inevitable and makes decision-making in relation to planning matters an extremely difficult task. The tension that is mainly seen in cases of this type is between commercial and residential uses and this occurs with inner city development where areas are sometimes transformed from predominantly residential to commercial or residential/commercial. A problem may arise when a commercial operator seeks to establish a business in premises which are zoned commercial use but are viewed to be in conflict with the existing residential amenity. To some extent the argument may be more with the planning code rather than with the commercial operator. Thus the first problem is with the planning code and highlights the importance of public consultation and participation in the formulation of the planning and zoning codes. But once formulated and approved, a planning code is intended to provide guidance and direction for the future character and development of an area.

22.  As I previously noted, an application for a restaurant licence is made to the FEHD and is regulated by the Director of the FEHD under the Public Health and Municipal Services Ordinance, Cap 132. The Director operates a provisional licensing system where a provisional licence is issued to premises, which is valid for six months, in order to satisfy a list of requirements under the Letter of Requirements, including all essential health, building and fire safety requirements for a full licence. In satisfying the requirements, a commercial operator would most likely have to expend substantial funds in property holding charges and refurbishment costs for the establishment of a restaurant. The obtaining of a liquor licence is by way of a separate application from the LLB.

23.  It seems to be the practice that once the requirements have been satisfied, the FEHD will grant a full restaurant licence with no restriction on operating hours. At this stage, there appears to be little if any public consultation or participation in the decision-making process to grant the restaurant licence. The commercial operator has committed himself to the establishment of a licensed restaurant by expending substantial funds to satisfy the requirements for the restaurant licence while at the same time making a separate application for a liquor licence. The second problem is with the separate restaurant licence process where the commercial operator has expended substantial funds to satisfy the licensing requirements with little or no objection to the grant of the restaurant licence.

24.  A person seeking a new liquor licence, or an amendment to or renewal of a current liquor licence is required to make application to the LLB. In the case of a new licence, the LLB may refuse, or grant it without conditions or with such conditions as it thinks fit. A licence is valid for a period of one year, although the LLB may issue it for a lesser period. The LLB cannot grant a liquor licence unless it is satisfied that the applicant is a fit and proper person to hold the licence; that the premises are suitable for selling or supplying intoxicating liquor, having regard to the location and structure of the premises and the fire safety and hygienic conditions in the premises; and that in all the circumstances the grant of the licence is not contrary to the public interest. Some of these requirements would have been satisfied in order to obtain the restaurant licence. However, by this stage, the issues tend to be whether the premises are suitable for the selling of intoxicating liquor and whether it is contrary to the public interest to grant the licence.

25.  The application for a liquor licence is a public exercise and understandably so. The LLB is obliged in every case to ensure that the application is advertised for the purpose of giving notice of it to any affected or interested person that may want to express an interest in the application. The LLB would also request a report from the Police and the District Office on the suitability of the application. It is at this stage that third-party objection is usually made against the licensed restaurant and invariably by local residents. This brings about the third problem. The commercial operator has by this stage committed himself to the establishment of a licensed restaurant at the premises without knowing or appreciating the likelihood and nature of any objection to it. It then becomes a costly and protracted exercise to be eventually resolved through the processes established to deal with the licence application.

26.  There are three observations I would make about the processes that are in place. First, a liquor licence is required to be renewed every year and could involve the applicant in litigation on each occasion. Secondly, the appeal processes take too long to resolve disputes over the grant of and conditions to a liquor licence. Sometimes decisions on appeal are not followed by the licensing body. There have been occasions when conditions have been removed on appeal and then reinstated on the renewal of the licence. See McGettigan and Anor v MSAB and Anor, HCAL 168/2013, 5 December 2013, unreported.  Thirdly, the MSAB is not a permanent appellant body made up of permanent judicial officers. Administrative appeals in other established common law jurisdictions are handled by an independent and permanent appellant body with permanent judicial officers establishing a body of relevant law and legal principles. Compare with the Administrative Appeals Board Ordinance, Cap 442.

27.  Overall the system in place would benefit from reform by providing greater certainty and finality as to the appropriateness and viability of a licensed establishment at particular premises.

The grounds of judicial review

28.  There are five grounds of review relied upon to quash the MSAB’s decision.

Ground 1

29.  In the first ground of review it is complained that the MSAB took into account irrelevant considerations by the excessive use of unsupported and unsubstantiated objections, in that (i) it received and accepted comments or objections from persons who had not established that they were, or representatives of, nearby residents of the premises; and (ii) it incorrectly perceived and recorded the commercial activities in the locality, and failed to appreciate in particular that there were other licensed premises in the same street.  

26.       It is submitted by the applicants that the MSAB was required to make its decision addressing each of the criteria under regulation 17(2) based on relevant and accurate factual circumstances. It is complained that the MSAB wrongly took into account two matters that appeared to play a significant part in arriving at its decision.

30.  The first matter relates to the residents’ objections. The applicants argued that the MSAB wrongly took into account, or wrongly gave weight to, evidence from persons who had not established that they were local residents, being residents who live within 400 metres of the premises, or that they would be affected by the operation of a licensed restaurant at the premises. The applicants also argued that the MSAB wrongly considered submissions from persons who purportedly represented local residents without establishing that they were authorised to do so. It is submitted that such representatives were heard in error by the MSAB.

31.  The selling and consumption of intoxicating liquor on premises is a matter of public concern and clearly an application for a liquor licence may involve or concern a variety of interests. This will no doubt include the residents and other persons in proximity to the proposed licensed premises. It is enough for a person to show an interest in the application to take part in the process as to whether or not a liquor licence should be granted. It is fundamental that any tribunal of fact is obliged to properly consider and evaluate the information and material submitted to it, and to act only on information and material that is relevant and reliable.

32.  The right of appeal is restricted. As I have already mentioned, under regulation 17(5), the only persons that can appeal the decisionof the LLB to the MSAB are the applicant or "20 or more persons residing within a radius of 400 metres of the premises." Accordingly, the MSAB should ensure that an appeal has been properly brought as required by law. It is not certain whether or not the MSAB had done so. It should have satisfied itself that the resident appellant had met this requirement and that any representative was properly authorised by the appellant, being 20 or more local residents. Each person had to be residing within a radius of 400 metres of the premises.  This is a limitation that has been imposed by the legislature.

33.  It is also submitted by the applicants that the MSAB did not properly evaluate or scrutinise the representations made which they claimed were bare assertions without any credible supporting evidence.

34.  The applicants made the point that the restaurant had been selling liquor under the current licence for a period of three months with no complaints or adverse comments having been made about its operation to the relevant authorities. Another point that was made was that the premises had been granted a General Restaurant Licence with no conditions or a limitation to its operating hours. If not for the obtaining of a liquor licence, there were no restrictions on its operating hours as a restaurant. This highlights the problem I mentioned before about the two separate licence applications.

35.  Mr Halkes for the applicants argued that the objections from the residents were in some instances couched in extreme and general language.  In the notes of hearing a summary of the objections was listed which included complaints about “…potential environmental hygiene problem that food wastes, vomits, cigarette ends and broken glasses could be seen everywhere; public order problem that drunkards or patrons might disturb residents and women; vehicle-pedestrian conflicts that many cars parked along the street; street obstruction caused by drunkards and impact on the students going to the schools in the vicinity”.  He submitted these were unsubstantiated complaints and referred to the fact that no complaints or objections concerning the restaurant were received by the relevant authorities during the 3 months prior to the hearing when the restaurant was selling liquor on the premises. This was confirmed in the appeal hearing before the MSAB. 

36.  The second matter relates to the MSAB’s finding that the street in which the restaurant is located "would be very quiet at night time with no commercial activity, but for the premises." The applicants took issue with this description which they said was factually inaccurate and listed various commercial outlets located in the street, including other licensed premises. They also made the point that the MSAB by focusing on the state and manner of the street did not address the statutory criteria as to whether the premises were suitable for the selling of liquor and whether in all the circumstances the grant of the licence was not contrary to the public interest. It also emerged during the hearing of the judicial review that the MSAB was wrong about the location of the restaurant in the street. It was not in the middle of the street but at the bottom end, near the junction with Hollywood Road. This was significant because the location of the premises was close to a busy street and not further up the street which were suggested to be the quiet end.

37.  I find that the MSAB did not properly describe or address the nature and circumstances of the locality in which the premises are located and failed to properly address, if at all, the statutory requirements it was obliged to consider under regulation 17(2).  The latter aspect is apparent throughout my discussion of the grounds of review.

Ground 2

38.  In the second ground of review it is complained that the MSAB failed to give adequate reasons for its decision.  It is provided under section 15 of the Municipal Services Appeals Board Ordinance, Cap 220, that the MSAB “shall give reasons in writing for its decisions, and those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based.”

39.  It is obligatory for the MSAB to give reasons in writing for its decisions, setting out its findings of fact with appropriate reference to the evidence or other material on which the findings are based.

40.  The applicants argued that the MSAB’s decision was materially deficient. They referred to the MSAB’s stated task of addressing the difficult question of "balancing competing interests of residents and businessman" without providing any analysis or explanation as to how or if it struck a balance between these competing interests. The applicants argued that the statutory criteria that had to be addressed were wider than striking a balance between the competing interests of "the residents" on the one hand and "the businessman" on the other. It was, however in my view, a critical issue that had to be addressed and resolved although with other interests and factors that had to be taken into account when addressing the statutory criteria. The main complaint of the applicants is that the MSAB to state that the matter was given "very serious consideration" with nothing further was unsatisfactory. They complained, and rightly in my view, that there was no adequate or discernible reasoning for its decision. The applicants argued that it appeared that the MSAB took a one-sided view of the matter without considering the other interests involved, consisting of the interests of the applicants, the commercial interests and purposes of the locality and the wider interests of the dining public of Hong Kong. The MSAB in addressing the statutory criteria was obliged to explain why the premises were not suitable for the selling of intoxicating liquor as a result of the location and why it was contrary to the public interest to grant the licence. It did not do so.

41.  In Oriental Daily Publisher Ltd v Commissioner for TELA (1997‑1998) 1 HKCFAR 279, the Court of Final Appeal held that a duty to give reasons had to be discharged by giving adequate reasons and what was adequate depended on the context in which the decision maker was operating and the circumstances of the case in question. The Court observed in that case that the reasons should show that the tribunal had addressed the substantial issues before it and why it had come to its decision; that merely reciting statutory guidelines, asserting conclusions and not revealing why the tribunal had come to such conclusions would normally be inadequate; and that reasons might not require great elaboration and might be brief. As the Court observed, the benefits of a tribunal giving reasons were that they imposed an intellectual discipline on the decision maker to appropriately concentrate on the relevant issues and ensure that decisions were made on proper grounds and that they also provided the parties and the wider community a basis for understanding the decision and a reference for future guidance and consistency in decision-making as well as engendering public confidence by demonstrating that the tribunal was functioning properly.

42.  The reasons given by the MSAB were totally inadequate in that none were given. The single paragraph which set out the MSAB’s decision did not contain reasons and can barely be said to have contained conclusions. On this ground alone I would grant the judicial review. A commercial enterprise that had hitherto been allowed to operate was brought to a complete and immediate standstill by a few general and sweeping statements that provided no reasoning or analysis of the issues. It resulted in extreme unfairness to the applicant, but it also resulted in unfairness to all the parties involved in the matter, for they are left with a result, but without an understanding of the issues and arguments from both sides and how they were addressed which would have given them a better understanding and appreciation of their respective cases and maybe brought them closer together in seeking a solution to this dispute. It leaves the distinct impression that the matter was not properly considered.

Ground 3

43.  In the third ground of review it is complained that the MSAB’s decision was inherently inconsistent and irrational in that its concluding description of the locality was incorrect and inconsistent with the description given in its decision.

44.  In one part of its decision it acknowledged that there was another licensed premises in the street but in its concluding remarks stated that there would be no commercial activity in the street other than the premises. It is also complained that its description of the location was based on a misdescription of the street and a lack of regard to the surrounding locality.  I have already addressed this matter and have found that there was a misdescription of the street and the locality.

45.  The fact is that a restaurant operated from the premises and it was a question of whether or not to permit the operators to sell liquor on the premises for consumption. There appears to have been no consideration given to the existing use of the premises or to the suitability of the premises for the sale and consumption of liquor. The applicants complained that the MSAB’s blanket conclusion that the location was very quiet at night and that the premises were not suitable for selling intoxicating liquor having regard to its location evidenced a failure to consider relevant matters and to properly consider the relevant issues, in particular that no complaints had been received by the relevant authorities during its previous three-month operation.

46.  The applicants also make the point that the reference to “night time” was vague and general. It is complained with justification in my view that the MSAB stated that the street was very quiet at night time without identifying when during the night. The applicants queried what was actually meant by this description and whether it included early evening. In any event, the applicants argued that there was a restaurant and cafe that operated a little further up the street which had a liquor licence with operating hours from 9 am to 9 pm. Furthermore they argued that the restaurant operated at lunchtime but no consideration was given to that fact.

Ground 4

47.  In the fourth ground of review it is complained that the MSAB failed to consider and analyse submissions on behalf of the applicants.

48.  There is no discussion in the MSAB’s decision addressing the submissions of the applicants. The only reference to the premises is in a descriptive narrative of the location. The obligation on the MSAB was to give a sufficient analysis and an explanation for its decision to show that it was properly considered and reasoned.

49.  The MSAB heard two appeals. The residents’ appeal sought the revocation of the licence, whereas the applicants’ appeal sought to remove restrictions placed on the licence that had been granted. I can understand the MSAB having decided to allow the residents’ appeal not to go on to address the applicants’ appeal. Once the MSAB had decided to grant the residents appeal by revoking the licence, it was unnecessary in those circumstances to address the applicants’ appeal. However, it was necessary for the MSAB to address the applicants’ arguments against revocation of the licence and to set out its reasons for its decision to revoke the licence.

50.  It is important to bear in mind that the LLB is required to provide to the MSAB a statement together with relevant documents relating to its decision. See section 9(1) (a) and (b) of the Municipal Services Appeals Board Ordinance, Cap 220. It appears it was not considered by the MSAB, or at least there was no indication it was in its decision. The LLB considered that the premises were suitable for the selling and consumption of intoxicating liquor. It placed what it considered appropriate in the circumstances, restrictions on the licence to address any adverse impact on the existing residential amenity.

Ground 5

51.  In the fifth ground of review it is complained that the MSAB failed to act reasonably by the brief and inadequate basis of its decision to revoke the applicants’ licence “having regard to its location”.

52.  The obvious criticism is that this conclusive remark was inadequate as reasons for its decision but the applicants also argued that it was based on a misdescription of the location by the MSAB and that it was unreasonable to limit the decision to location as it did. It is the latter complaint that is highlighted under this ground of review.

53.  It was submitted by Mr Halkes that there had been many instances where liquor licences had been granted by the LLB, albeit with conditions, in relation to premises that were in close proximity to residential buildings and which had been routinely upheld by the MSAB. This may be so, but decisions of this type will be case specific and fact sensitive. The better point that can be made in the circumstances of this case is that no consideration seems to have been given by the MSAB to the imposition of conditions to address any tension between the commercial and residential uses and instead took all or nothing approach based on location without any explanation as to why.

54.  I have already mentioned the importance of the statutory requirements under regulation 17(2). It is provided that the LLB should not grant a liquor licence unless it is satisfied of these requirements. For the purpose of addressing this ground of review it is necessary to set out the relevant wording of the requirements:

“(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.”

55.  Mr Halkes argued that location as mentioned under regulation 17(b)(i) is a reference to where the premises are specifically located as opposed to the general location of the premises. He also argued that the issue of the general location of the premises was a matter that was caught by the public interest requirement under regulation 17(c). I disagree. In my view the issue of location is an important consideration as to whether or not a liquor licence should be granted for the premises and that is why it is specifically referred to under regulation 17(b)(i). It was not meant to be given the narrow scope as Mr Halkes would seek to impose. The word location in the context of the statutory requirement is meant to cover the general location of the premises, in particular the site, position and place of the premises.

56.  In any event, I have found that the MSAB had incorrectly described the location and had not adequately reasoned on what basis the location warranted the revocation of the licence.

Findings

57.  I find that the MSAB failed to properly consider the two appeals in this matter and to provide adequate reasons for its decision. In particular, I find that the MSAB:

(i) did not take into account relevant considerations in relation to the premises, such as, the nature and layout of the restaurant, it being a fine dining establishment, its operating hours, its situation and position within the building and the street - above the premises was a podium and on one side were commercial premises and on the other side an open space area;

(ii) took into account irrelevant considerations in that certain matters raised by way of objection appeared to be considered without assessment or verification as to their relevance to the premises, incorrectly described the locality and the location of the premises - the premises were located at the bottom end of the street close to Hollywood Road and there was another licensed premises further up the street which had a liquor licence with operating hours from 9am to 9pm;

(iii) failed to address the statutory requirements under regulation 17(2); and

(iv) failed to provide adequate reasons and based its decision on location and the public interest without any explanation or reasoning.

Conclusion

58.  For the reasons given, I quash the MSAB’s decision to revoke the applicants’ liquor licence and remit the applicants’ appeal to a differently constituted MSAB to hear it together with the residents’ appeal in accordance with the law.

59.  As I previously mentioned there is an issue as to the current status of the applicants’ liquor licence. By my decision in this judgment I have found that the MSAB misdirected itself on the law by not addressing statutory requirements, made material errors of fact and gave inadequate reasons for its decision. I have accordingly quashed the decision of the MSAB and the applicants’ appeal together with the residents’ appeal will now be heard again before a differently constituted MSAB. It is within the power of the MSAB to extend a liquor licence beyond its expiry date or grant an interim liquor licence pending determination of the appeal.  The principles laid down in PCCW-HKT Telephone Ltd v Telecommunication Authority (2005) 8 HKCFAR 337 provide that a power will be implied where it can be shown that it is necessary in the sense of being “reasonably required” for the effective exercise of the statutory jurisdiction expressly conferred on the inferior court or tribunal concerned and the enabling statute does not expressly prohibit such a power.  It is my view that a discretionary power to grant an extension of the liquor licence or an interim liquor licence pending final determination of an appeal is reasonably required for the MSAB’s effective exercise of its power to determine an appeal.  See McGettigan and Anor v MSAB and Anor, HCAL 168/2013, 5 December 2013, unreported, paras 28‑38: Sabinano II Marcel R v MSAB and Anor, HCAL 170/2013, 20 December 2013, unreported, paras 21‑40; Siano, Clare Podsok v LLB, [2012] HKEC 1176; HCAL 97/2012, 20 August 2012, unreported, paras 10-38. 

60.  Part of the court’s supervisory jurisdiction over bodies performing a public function is to take appropriate measures to protect the position of an applicant who has been unfairly treated. This is such a case and the relief sought includes any other order the court thinks fit. Accordingly, I make an order directing the MSAB to either extend the current liquor licence or grant an interim liquor licence in the same terms and conditions as granted to the 1^st applicant by the LLB on 29 October 2013 pending final determination of the applicants’ appeal by the MSAB.

61.  I make an order nisi that the costs of the application be awarded to the applicants, to be taxed if not agreed. The order nisi will become absolute in 14 days.