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HCMA001475/1989
| IN THE COURT OF APPEAL |
Magistracy Appeal
1989 No. 1475 |
Headnote
Validity of "special conditions" made pursuant to Miscellaneous Licences Regulations. Held condition invalid as it was not made by way of regulation and Governor-in-Council has no power to make "special conditions" by executive decision but can do so only in accordance with the terms of s.3 of the Miscellaneous Licences Ordinance by regulation.
| IN THE COURT OF APPEAL |
Magistracy Appeal
1989 No. 1475
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BETWEEN
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THE ATTORNEY GENERAL
AND
CHAN FOO
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Coram: Silke, V.-P., Power & Macdougall, JJ. A.
Date of Hearing: 24 April 1990
Date of Delivery of Judgment: 10 May 1990
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JUDGMENT
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Power, J. A.:
1. We take the history of this matter and the agreed facts from the recitation in the Magistrate's Case Stated as. follows:
"1. At the Magistrates Court at San Po Kong on the 14th day of April, 1988 the Respondent appeared before me for the trial of 8 Informations preferred against him by the Appellant.
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2. The informations against the Respondent were inter alia as follows:
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A.
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'For that you on the 20th day of August, 1987 at 37-39 Pak Tai street, G/F in Hong Kong, you being the licensee of Amusement Game Centre, Licence No. 5515 did fail to comply with the condition in the licence issued by the Commissioner for Television and Entertainment Licensing in that you allowed C/B LIN Yiu-wing, 15 years, C/B LO Chun-ki, 15 years, and C/B CHEUNG Hung-on, 15 years old, persons under the age of 16, to enter the said licensed premises, contrary to Sec. 7(b) of Miscellaneous Licences Ordinance, Cap. 114, Laws of Hong Kong.'
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B.
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'For that you on the 25th day of September, 1987, at 26, Nga Tsin Long Road, G/F in Hong Kong, you being the licensee of Amusement Game Centre, Licence No. 5348 did fail to comply with the condition in the licence issued by the Commissioner for Television and Entertainment Licensing in that you allowed C/B KIN Chi-keung, 15 years, and C/B CHAN Kai-shun, 15 years old, persons under the age of 16, to enter the said licensed premises, contrary to sec. 7(b) of Miscellaneous Licences Ordinance, Cap. 114, Laws of Hong Kong.'
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3. On the 14th and 25th days of April, 1988 the said Informations were heard and determined by me. The Appellant was represented by Mr. Roderick Wu, and the Respondents by Mr. Nicholas Pirie, of Counsel." |
The Magistrate then set out the evidence given at the trial and went on:
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"7. At the First Trial Counsel for the Crown produced a certified copy of the licences whereon it is endorsed that they are Adult Centre' licences issued to the aforesaid Respondent's Amusement Games Centres. Each of the licences has annexed thereto 3 stencil printed sheets containing in English and Chinese 20 'Licence conditions'.
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8. When I asked whether Governor-in-Council had approved the said licence conditions pursuant to Regulations 9 of the Miscellaneous Licences Regulations, Chapter 114, I was informed that the conditions attached to the licence have not been gazetted or approved by Governor-in-Council. " |
2. The Magistrate dealt with and rejected the argument of Defence Counsel that, the Respondent not having been shown to have been on the premises, the Crown had not proved a failure on his part to comply with a condition of the licence. He then went on to deal with what he termed the "Ultra Vires Conditions" saying;
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"The Respondent is charged for contravention of Section 7(b) of the Miscellaneous Licences Ordinance, Cap. 114, Section 7(b) creates an offence for failing 'to comply with any condition in a licence issued hereunder'.
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Regulation 9 in the general part of the Miscellaneous Licences Regulations, Chapter 114, provides that, subject to approval by Governor-in-council, the licensing authority may impose such special conditions in respect of any licence as the circumstances may require. Since I was informed that the conditions attached to the licences have not been gazetted or approved by Governor-in-Council, I held that they were ultra vires and not binding on the Respondent.
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11. The Appellant being dissatisfied with my said determination of the said Informations and alleging himself to be aggrieved thereby as being erroneous in point of law pursuant to Section 105 of the Magistrates Ordinance Chapter 227 applied to me to state and sign a case setting forth the facts and grounds of my said determinations so that he might appeal therefrom to a Judge of the High Court.
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12. The case (The First Case) was duly set down before Mr. Justice Duffy on the 20th April, 1989. Mr. Justice Duffy directed that the following points in this appeal and another be argued before the Court of Appeal pursuant to Section 118(1)(d) of the Magistrates Ordinance, Chapter 227:" |
He continued:
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"13. On the 12th July 1989, having accepted further evidence by way of affidavit under s. 83V (2) (a) of Cap. 221 the Honourable Court of Appeal remitted the matter back to me to reopen and reconsider the case in the light of the new evidence that they had admitted.
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14. On the 10th August the Magistrates Court was reconvened and the said informations were heard and determined by me. The Appellant was represented by Miss Patty Lee and the Respondent by Mr. Nicholas Pirie of Counsel." |
The further evidence contained in an affidavit of Mr. Robin Clive Gill the Clerk of Counsels established that the Governor-in-Council had at a meeting on 10th July 1984 "considered and approved the imposition" of 18 special conditions in respect of amusement games centres.
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2. The Governor in Council at a meeting on 10 July 1984 considered .and approved the imposition of special conditions in respect of amusement game centre licences. The conditions approved were as follows
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(1) |
Except with the written permission of the licensing authority endorsed on the licence, the licensee shall not transfer, lend or hire his licence to any person.
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(2)* |
The licensee shall not permit any machine or device to be operated between the hours of 2 a.m. and 8 a.m. daily.
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(3) |
No machine or device other than those endorsed on the licence shall be installed or placed for use or operation in the promises.
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(4) |
No bet shall be wagered or paid on the premises, nor shall any person offer to receive any advantage to be determined by the result of any game played on a machine or device.
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(5) |
No prizes or cash refunds shall be offered or given to any person in consequence of the result of any play on a machine or device.
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(6) |
Machines or devices shall be positioned inside the premises in such localities that they shall not obstruct any exit or fire fighting equipment.
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(7) |
There shall be a minimum clear space of 46 cm. on either side of every machine or device i.e. 92 cm. between two machines or devices and a minimum clear space of 1.1 m. to the front of each machine or device of 2.2 m. between two machines or devices if their fronts are facing each other.
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(8) |
When in use, the machines or devices are to remain in the position at all times as indicated in the plan attached to the licence.
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(9) |
No business other than that of an amusement game centre shall be permitted in the promises without the written permission of the licensing authority.
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(10) |
No person in school uniform shall be allowed to enter the premises.
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(11) |
Premises must be air-conditioned and brightly lit (not less than 50 lux measured at 1 metre above floor level and at any point at least one metre from walls).
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(12) |
No partitions shall be erected in areas available to the public for the playing of machines or devices.
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(13) |
Sufficient security and safety measures must be provided to ensure that good order is maintained in the premises.
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(14)** |
No person under the age of 16 shall be allowed to enter the premises.
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(15)** |
No persons of 16 years of age or above shall be allowed to enter the premises unless he is in charge of child(ren) under 16 years of age.
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(16)* |
No machine or device shall be used between 10.00 p.m. to 10.00 a.m. nor after the closing time of the shopping arcade/commercial podium, in which the premises are located.
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(17) |
The licensee and any person who operates, manages, assists in any capacity in the operation of or assists in the management of the premises shall ensure that, when on duty at the premises, they can be properly identified as members of staff by means of a uniform, an identity badge or other suitable means.
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(18) |
Sufficient measures must be taken to prevent noise generated by the operation of the centre from causing annoyance to any person outside the premises.
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Note: |
Any breach of these conditions shall entitle the licensing authority to refuse to renew or to revoke the licence. In certain circumstances a person who contravenes the provisions of the Miscellaneous Licences Ordinance and any subsidiary legislation commits an offence and is liable to a fine of $10,000 and to imprisonment for 6 months.
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Notes: |
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Condition 2 applies to Adults' Centre and Condition 16 to Children's Centre. Shorter permitted hours of operation may be imposed by the licensing authority in cases where his advice on noise reduction measures has not been followed.
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Condition 14 applies to Adults' Centres and Condition 15 to Children's Centres." |
Special Condition 14 is the condition in question, i.e. a condition excluding persons under the age of 16 from entering the premises.
3. The Magistrate went on:
"17. On the 10th day of August I maintained the original verdict of dismissing the said Informations and, treating the Second Trial as an interlocutory proceeding in the Appeal by way of Case Stated, ordered that the matter be re-submitted to the Court of Appeal by an amended case."
4. For reasons which he set out at length the Magistrate held
"that a special condition must be one tailored for the particular circumstances of an individual case"
and that the special condition as to age and 13 of the other conditions approved by the Governor-in-council did hot "qualify as special conditions". He held as follows when dismissing the summonses:
"In summary, I hold that the licence conditions in question were nut validly approved by the Governor-in-Council under Regulation 9 of Cap. 114, they were not within the power of the licensing authority to impose under Regulation 152 of Cap. 114 since they had not been validly approved and because also they were not special conditions within Regulation 152 even if no approval is required"
As can be seen, he did not question the validity of the power given by Regulation 152 but only the validity of its exercise in the instant case. He set out the questions of law for the opinion of this Court as follows:
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"(a) |
Having regard to my finding that the Regulations set up a control system whereby the Governor-in-Council may prescribe limits, parameters and guidelines for the special conditions which the licensing authority may impose, was I right to hold that any condition that applies to a type, sub-type or class of licence does not qualify as a special condition?
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(b) |
Given that the licensing authority may only impose special conditions with the approval of the Governor-in-Council, was I right to hold that a special condition must be one tailored for the particular circumstances of an individual case?
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(c) |
Was I right to find that the licence conditions in question were not validly approved by the Governor-in-Council and were therefore not within the power of the licensing authority to impose?
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(d) |
Was I right in dismissing the said Information?" |
5. It is necessary to look first at the legislation and the regulations. Section 3 of the Miscellaneous Licences Ordinance Cap. 114 - the Ordinance - reads:
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"3. (1) The Governor in Council may by regulation provide for -
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(a) |
licensing, regulation and control of any place, trade, business, undertaking or occupation specified in the First Schedule;
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(b) |
classifying for the purposes of paragraph (a) any place, trade, business or occupation for which a licence may be issued under this Ordinance;
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(c) |
the particulars which an applicant for any licence granted under this Ordnance shall furnish to any officer empowered to issue a licence hereunder;
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(d) |
the form and conditions of any licence granted under this Ordinance, the officers who may issue such licence and the fees therefor, the hours during which such licence may be used and the period for which such licence shall be issued;
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(e) |
the lighting to be used in any place licensed under this Ordinance and in such regulations to provide the general specifications and requirements to be satisfied in respect of such lighting, or to empower any officer specified therein to determine, at the time of the issue or renewal of any licence under this Ordinance, the particular specifications and requirements to be satisfied in respect of such lighting in the place to which the licence relates;
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(f) |
precautions to be taken against fire in any place licensed under this Ordinance;
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(g) |
maintenance of peace and good order in any place licensed under this Ordinance;
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(h) |
means of securing hygienic conditions and requiring the maintenance of such conditions in any place licensed under this Ordinance;
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(i) |
entry and inspection of any place licensed under this Ordinance, by the Commissioner of Police, the Secretary for Home Affairs or any other officer authorized by the Governor in that behalf;
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(j) |
exempting any place, trade, business or occupation situated or carried on within specified areas from the Operation of this Ordinance or of any part thereof or of any regulations made thereunder, and specifying and varying the boundaries of such areas; and
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(k) |
generally, carrying into effect the provisions of this Ordinance.
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(2) Such regulations may provide that the contravention of any particular regulation shall constitute an offence and may prescribe penalties for breach of the regulations not exceeding a fine of $10,000 or imprisonment for 6 months.''
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"5. (1) Subject to the provisions of subsection (3), the grant of any licence issued, or to be issued under this Ordinance and the grant of any renewal of any licence shall be in the absolute discretion of the officer authorized to issue such licence.
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(2) Such officer may revoke a licence granted to any person on proof to his satisfaction of an offence against this Ordinance or other misconduct by such person.
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(3) An appeal shall lie by way of petition, in such manner and form and within such period as may be provided by regulation under section 3, to the Governor in Council from the decision of any officer under this section." |
Regulation 152 of the Miscellaneous Licences Regulations reads.
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"152. (1) Every person holding a licence to keep an amusement game centre shall observe the following conditions, namely-
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(a) |
that except with the written permission of the licensing authority endorsed on the licence, the licensee shall not transfer, lend or hire his licence to any person;
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(b) |
that the licensee shall not permit any machine or device of a type specified in paragraph (a), (b) or (c) of the definition of 'amusement game centre' or the Third Schedule to the Ordinance which is installed or placed in the amusement game centre for the purpose of amusement recreation or entertainment to be operated between the hours of 2 a.m. and. 8 a.m. daily.
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and such special conditions as the licensing authority may in his discretion impose.
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(2) Every condition specified in or imposed under paragraph (1) shall be endorsed on the licence." |
6. The intention of the Ordinance is, clearly, to give the Governor in Council authority to control the licensing of the types of premises mentioned therein. It gives that body a general power to make regulations but does not require it to make any particular regulations or classes of regulations, and concludes, in s.3 (1) (k), by giving power to make regulations "generally carrying into effect the provisions of this Ordinance". The Ordinance in s.5 makes provision for a licensing authority but envisages that that authority will, in so far as Governor in Council makes provision therefor, be subject to that body. The legislature intended that the Ordinance be implemented by licensing authorities under the overall control of the Governor in Council.
7. The Governor in Council has in the case of each of the types of licences specified in the Ordinance appointed a licensing authority, and promulgated regulations.
8. Suggestions that the regulations are ultra vires must be examined in the light of the clear intention of legislature to give wide power of control of the licensing procedure to the Governor in Council.
9. The Ordinance governs Auctioneers, Public Dance Halls, Timber Stores, Physiotherapy Clinics and Amusement Game Centres.
10. The regulations allow the Governor in Council to exercise its powers in different ways in relation to each of the different types of licence.
11. The regulations in Regulations 1 to 17 lay down general provisions applicable to each type of licence. Each type is then dealt with separately. In each case a form is specified but there is, otherwise, no uniformity of approach.
12. When dealing with Dancing Schools the regulations specify 24 terms of operation (Reg. 107A to 128). These deal with employees, lighting, exits and doors, latrines, etc. They fall under the sub-heads (d), (e), (f), (g), (h) and (k) in s.3(1) of the Ordinance. Reg. 128 (1) specifies four "conditions". It is, at first sight, difficult to see how these differ from the terms which precede them other than by the description used.
13. The conditions prohibit transfer of the licence without permission, instruction between 2 a.m. and 8, a.m., employment of more instructors than the number endorsed on the licence, and limit the number of persons permitted on the premises. Reg. 128 (1) concludes with the words "and such special conditions as the licensing authority may impose".
14. For Auctioneers the regulations specify 2 terms and 2 conditions and make similar provision for special conditions.
15. For Public Dance Halls the regulations specify 20 terms and 4 conditions and again provide for special conditions.
16. For Timber stores the regulations specify no terms but there are four conditions and there is the provision for special conditions.
17. For Physiotherapy Clinics the regulations specify 10 terms but no conditions are specified and there is no provision for special conditions.
18. Amusement Game Centres are subjected to 4 terms, two conditions and the provision for special conditions.
19. In the case of Auctioneers and Timber Stores only the special conditions must be endorsed on the licence.
20. In the case of Public Dance Halls, Dancing Schools and Amusement Game Centres both the conditions specified and the special conditions must be endorsed. As regards these three types of licence the difference between terms and conditions is in the requirement for endorsement. The latter are required to be brought in a specific way to the attention of the licensee by endorsement.
21. We cannot help but remark that this distinction, on its face, is both unnecessary and inappropriate. In our view, it would have been much better had it been required that all licences have the terms and conditions governing them endorsed thereon.
22. Regulation 9 provides that while the licensing authority "may impose such special conditions in respect of any licence as the circumstances may require" these are subject to the approval of the Governor in Council. The Governor in Council plainly sought thereby to retain the same overall control over "special conditions" as it had exercised by its promulgation of the regulations, over terms and specified conditions.
23. As can be seen from the foregoing the Governor in Council by Regulation 9 gave itself power to approve the imposition of "special conditions". The effect of this is that "special conditions" are not made by regulation but by executive decision. In the case of Amusement Game Centres the Governor in Council exercised this power by approving the 18 "special conditions" set out in the affidavit of Mr. Gill.
24. In our view the first matter to be determined is whether these "special conditions" are "conditions" In the sense in which that term is used in s.3 (1) (d) of the Ordinance.
25. In Wickman Machine Tool Sales Ltd. v. L. Schuler A. G. (1972) All E. R. 1173 Lord Denning M. R. when dealing with the meaning of the word "condition" said at P.1180:
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"(a) The proper meaning
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There are three meanings of 'condition' open to us, The first is the proper meaning, which is given pride of place in the Oxford English Dictionary: 'Something demanded or required as a prerequisite to the granting or performance of something else'; and which is carries: over into the law in this ways: 'In a legal instrument, e.g. a ... contract, a provision on which its legal force or effect is made to depend.'..........................
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(b) The common meaning
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The second meaning of 'condition' is the common meaning which receives little attention in the Oxford English Dictionary: 'a provision, a stipulation'.
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The word is frequently used by laymen and lawyers in this sense. When an agreement is made for the sale of land, it is always subject to conditions of sale'.. The Law Society's 'Conditions if Sale' are in everyday use. When a building contract is made, it is usually subject to the RIBA conditions. Whenever a quotation is given or invoice sent, the printed form invariably says, it is subject to the 'conditions' on the back. In all these cases the wore 'conditions' simply means terms of the contract. Sometimes these 'conditions' may contain a provision which is so expressed as to be a 'condition' proper, e.g. when something or other is a prerequisite of an obligation to pay. At other times it is simply a term of the contract which gives rise to damages if it is broken. Its effect depends solely on the true interpretation of the clause itself and not in the least on the fact that it is labelled a 'condition'.
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(c) The term of art
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I must turn to the third meaning of 'condition'. It is the meaning given to it by lawyers as a term of art. A 'condition' in this sense is a stipulation in a contract which carries with it this consequence: if the promisor breaks a 'condition' in any respect, however slight, it gives the other party a right to be quit of his future obligations and to sue for damages unless he, by his conduct, waives the condition, in which case he is bound to perform his future obligations, but can sue for the damages he has suffered." |
26. We have no doubt that the "common meaning" dealt with in (d) above must he ascribed to the word "conditions" in s.3 (1) (d) and that the expression was used to describe both terms and conditions. It is true that one would not expect to find such in imprecise usage in a statute out we are satisfied, nonetheless, that this meaning was the one intended for the term by the legislature. The "special conditions" are, in our view, not in character in any way different from the four terms specified in Regulations 148, 149, 150 and 151 nor, indeed, from the two, so-called conditions in Reg. 152(1), A feature of these "special conditions", the significance of whim is difficult to comprehend, is that "special conditions" (1) and (2) deal, except for changes of wording which have no significance, with exactly the same matters as are already dealt with by the two conditions specified in Reg. 152(1)(a) and (b). We are at a loss to understand why it should be thought necessary that these be endorsed on the licence both as conditions and as "special conditions". This, if anything, strengthens us in our view that there is no real difference between the terms and conditions in the Regulations and the "special conditions". We are satisfied that the "special conditions" are neither conditions nor are they special and that they are properly characterized as terms of the licence falling within the meaning of the term "conditions" as it is used in, s.3 (1) (d).
27. The second matter for determination is the meaning to be given to the word "may" in s.3. It clearly gives an enabling power. It cannot be suggested in our view that it places any duty upon the Governor in Council to exercise that power. What must be asked is whether, given that the Governor in Council, "may by regulation provide for ... the form and conditions of any licence granted under this ordinance ....", it has any power to make regulations allowing for the making of conditions otherwise than by regulation.
28. The following passage from "Craies on Statute Law" 7th Ed., at p.286, is apposite in this regard:
"Language prima facie permissive may not only make it imperative upon the court to do the thing which the enactment states that it may do, but it may also prohibit that particular thing from being done by the court in any other way. This was pointed out by Jessel M. R. in Taylor v. Taylor. (1876) 1 Ch. D. 426"
29. The passage upon which reliance is placed appears at p.431 as follows:
"Now the first question depends on the wording of the 2nd and 16th sections of the original Act (19 & 20) Vict. c. 120). The 2nd section of that Act (The Leases and Sales of Settled Estates Act) gives a power to the Court of Chancery in England (which is now vested in the High Court of Judicature), if it shall deem proper and consistent with a due regard for the interests of all parties entitled under the settlement, and subject to the provisions and restrictions in the Act contained, to authorize leases. That is the material part of that section. The 16th section says: 'Any person entitled to the possession or to the receipt of the rents and profits of any settled estates for a term of years determinable on his death, or for an estate for life, or any greater estate, may apply to the Court by petition in a summary way to exercise the powers conferred by this Act.' The 17th section provides that, subject to the exception contained in the next section, every application must be made with the concurrence of certain persons. It appears to me that the 16th section, though in form merely enabling, is in fact the only enabling part which entitles the Court to set the Act in motion. When a statutory power is conferred for the first time upon a Court, and the mode of exercising it is pointed out, it means that no other mode is to be adopted. For instance, the 16th section says that the proceeding is to be by petition. It is enabling, I know, in form, that the application may be by petition; but no other process can be adopted. That has been decided on a great variety of Acts where the application has been directed to be by petition, and it has been laid down that that being the made pointed out by the Act which conferred the jurisdiction, you must exercise the jurisdiction (as the 2nd section of this Act says in terms, though it was not necessary) according to the previsions of the Act." (Emphasis supplied.)
30. The Governor in Council is, in our view, in exactly the same position under the Miscellaneous Licences Ordinance as was the High Court of Judicature under the Leases and Sales of Settled Estates Act. The mode of exercise of its power to make licence conditions "pointed out" in the Ordinance is by the promulgation of regulations and it must exercise that power according to the provisions of the Ordinance. The reason for the legislature so to require seems to us clear. It thereby retained to itself, by virtue of the provisions in Part V of the Interpretation ant General Clauses Ordinance, an overall supervisory power. A power which the legislature would, given the impact made by at least some categories of licensed establishments on community life, understandably wish to reserve to itself.
31. We are satisfied that, when the legislature provided that the Governor in Council may by regulation make licence conditions, it enabled it so to do by regulation only and gave no power to impose conditions, by any other process.
32. Mr. Reading, who appeared for the applicant, seemed to be suggesting that as an ordinance by virtue of the definition thereof in s.3 of the Interpretation & General Clauses Ordinance, includes any additional legislative provisions made in accordance therewith and as every ordinance must, in accordance with the established principles of, statutory interpretation, be read as a whole nay irregularity in the stipulation of the "special conditions" was cured. This argument is clearly unsustainable. A body cannot arrogate to itself a power not given to it by the legislature by stipulating therefor in subsidiary legislation.
33. Mr. Reading finally sought to pray in aid s.40 of that Ordinances:
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"40. (1) where any Ordinance confers upon any person power to do or enforce the doing of any act or thing, all such powers shall be deemed to be also conferred as are reasonably necessary to enable the person to do or enforce the doing of the act or thing.
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(2) Without prejudice to the generality of subsection (1), where any Ordinance confers power -
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(a) ......................................
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(b)
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to grant a licence, Crown lease, permit, authority, approval or exemption, such power shall include power to impose reasonable conditions subject to which such licence, Crown lease, permit, authority, approval or exemption may be granted; " |
34. We are satisfied that this provision can have no application where the ordinance giving the power to issue licences also creates an authority superior to the licencing authority, in this case the Governor in Council, and gives that superior authority, and it alone, power to lay down the form and conditions of the licence to be issued.
35. We have considered Whether s.3 (1) (k) is wide enough to confer upon the Governor in Council power to make Regulation 9. We are satisfied that it is not. A general implementation clause such as this cannot be used to override the specific limited power to make conditions by regulation contained in s. 3 (1) (d).
36. We are satisfied that the "special condition" in question was ultra vires and that Questions (c) & (d) must be answered in the affirmative. It is not, as is apparent from our reasons set out above, necessary for us to answer Questions (a) and (b).
Representation:
Mr. John Reading and Mr. Watson Brown (Crown prosecutor) for the Applicant.
Mr. Nicholas Pirie and Mr. Jeremy Cheung (Messrs. Lau & Co.) for the Respondent.
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