KWOON CHUNG MOTORS CO LTD v. TRANSPORT TRIBUNAL AND ANOTHER

HCAL17/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW PROCEEDINGS

NO. 17 OF 2009

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J U D G M E N T

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Introduction

1.  By decision dated 6 July 2007, the Commissioner for Transport suspended the applicant’s passenger service licence (“PSL”) for buses HV6013 and HV6097 for 6 months.  The applicant then applied for a review to the Transport Tribunal.  By decision dated 6 January 2009, the Tribunal confirmed the Commissioner’s decision.

2.  The applicant now applied for judicial review, seeking an order of certiorari to quash the Tribunal’s decision and an order of mandamus directing the Tribunal to reverse or alternatively to vary the Commissioner’s decision.  The Commissioner opposed the application.  The Tribunal adopted a neutral stance and did not appear at the hearing on 8 December 2009.

3.  The background leading to this application may be summarized as follows.

Background

4.  The applicant is an operator of non-franchise public bus service under two PSLs issued by the Commissioner pursuant to section 27 of the Road Traffic Ordinance (Cap. 374) (“the Ordinance”).  The subject licence is PSL No. 9396A, which covered among other services, A08 contract hire service.  Condition 1 of the PSL No. 9396A stipulated :

“Any service operated by buses specified in this license or under the control of the same licensee … with a fixed route or fixed destination area and operated for more than 14 days either consecutively or intermittently during a continuous period of 12 months on which carriage is offered to any member of the public, should be subject to the prior approval of the Commissioner for Transport in writing.” (“the Old Condition”)

5.  PSL No.9396A was first issued to the applicant on 31 July 1998 and had since been renewed (on the applicant’s case) or extended (on the Commissioner’s case) for several times up to now.

6.  Pursuant to regulation 8 of the Road Traffic (Public Service Vehicles) Regulations (“the Regulations”), the Commissioner on 30 July 2005 gave notice to all PSL holders of public buses that with effect from 1 November 2005, the Old Condition would be amended as set out in the letter.  The amendment which is material for present purposes read :

“The operation of any service … with the same origin and destination areas for more than 2 days either intermittently or consecutively in a period of 30 days, shall be subject to the prior approval of the Commissioner for Transport in writing …” (“the New Condition”)

7.  On 29 September 2005, the applicant applied for a renewal or, on the Commissioners’ case, an extension of PSL No.9396A.  While the application was still pending, the Commissioner on 22 October 2005 gave all PSL holders a reminder about the imminent implementation of the New Condition on 1 November 2005.  The Commissioner approved the applicant’s application on 28 October 2005.  PSL No. 9396A then became valid for another year between 31 October 2005 and 30 October 2006.  The Old Condition formed part of the licensing conditions because according to the Commissioner’s case, as at 31 October 2005, the New Condition had not come into force yet.

8.  On 16 February 2006, the Commissioner again reminded all PSL holders that the New Condition applied since 1 November 2005.

9.  Surveys conducted by the transport inspectors revealed that the applicant’s buses HV6097 and HV6013 were operating services on 11, 13 and 27 April 2006, which apparently contravened the New Condition.  The Commissioner then appointed a public officer to hold an inquiry under section 30 of the Ordinance.  The officer submitted the report of the inquiry to the Commissioner in November 2006.

10.  On 6 July 2007, the Commissioner notified that applicant that the PSL for HV6097 and HV6013 would be suspended for 6 months as from 30 July 2007 on the ground that the applicant had failed to comply with the New Condition.

11.  The Tribunal heard the applicant’s review on 11 November 2008 and 6 January 2009.  The issue before the Tribunal was whether the Old Condition applied (as contended by the applicant) or the New Condition applied (as contended by the Commissioner).  It was not in dispute that the three instants complained of would only constitute a breach of the New Condition but not the Old Condition.  In the end, the Tribunal accepted the Commissioner’s argument and confirmed his decision.  The reasons for the Tribunal’s decision were set out in the notes of proceedings dated 18 February 2009.

12.  The 6 months’ suspension imposed by the Commissioner has been stayed pending the outcome of these proceedings.

The issues

13.  The primary issue before me, as was the case before the Tribunal, is : did the Old Condition or the New Condition apply at the time of the three instants complained of?

14.  The applicant argued that when the Commissioner approved its application in October 2005, a new licence, albeit with the same licence number 9396A, was issued, which was expressly subject to the Old Condition.  The Commissioner was at liberty to impose the New Condition but chose not to do so.  The Commissioner could not then seek to replace the Old Condition with the New Condition.  No reliance could be placed on the notice previously issued under regulation 8 in July 2005.  The Old Condition accordingly applied at all material times.  The applicant therefore did not commit any breach by reason of the three instants complained of.  The Commissioner contended that PSL9396A was merely extended with an extended validity period of one more year.  The due process in regulation 8 having been complied with earlier, the New Condition applied since 1 November 2005.  The New Condition applied and the applicant was in breach.

15.  The parties’ submissions focused the discussion on another crucial issue : was PSL No. 9396A renewed or extended in October 2005?  Renewal in the present context means the granting of a new licence altogether.

Renewal or extension

16.  The Commissioner derives the power to grant PSLs from section 27(1) of the Ordinance, which stipulates :

“(1) Subject to the provisions of this section and of sections 28 and 29, the Commissioner may, on application made in the prescribed manner, issue a passenger service licence in respect of one or more public buses, public light buses, private buses or school private light buses for use in accordance with this Ordinance.”

17.  Section 28 sets out various matters that the Commissioner needs to take into account when determining an application for a PSL.

18.  Under section 29, the Commissioner may refuse the application or issue a PSL subject to the conditions as he may specify including those listed out in subsection (1)(b).

19.  Ms Wu, for the Commissioner, submitted that the power to grant a PSL under section 27 is confined to the first issuance of a new licence.  It does not include the power to grant a new licence upon the expiry of a current one.

20.  In my view, Ms Wu’s interpretation seems to be too narrow.  I am inclined to think that under section 27, the Commissioner is entitled to issue a new licence upon the expiry of a current one if he so chooses.  But for reasons which will become clear in a moment, I do not think I need to come to a definitive view for present purposes.  I will proceed on the assumption that the Commissioner has such a power.

21.  The Commissioner has the express power to extend a PSL pursuant to regulation 6 of the Regulations :

“A [PSL] may be issued for a period not exceeding 5 years and may be extended by the Commissioner for a further period or periods each of not more than 5 years.”

22.  When the PSL of a holder is about to expire, if he wishes to carry on with the licensed services, he may apply for an extension, which is apparently a simpler and more cost-effective option.  Or for some good reasons, he may apply for a new license.  On the Commissioner’s part, he may upon application extend the current licence or grant a new licence.

23.  Whether a PSL is extended or a new licence is granted upon the expiry of a current one is a question of fact, which is generally best left to the decision maker.  Here, the Commissioner maintained and the Tribunal agreed that PSL No. 9396A was merely extended for another year.  Unless the applicant can satisfy the court that the Commissioner and the Tribunal had, in coming to their determination on the facts, made an error which entitles the court to intervene in the exercise of its supervisory jurisdiction on recognized grounds, its application for judicial review must fail.

24.  Ms Ng, for the applicant, submitted that when all the facts are considered objectively, the Commissioner must have granted a new licence to the applicant.  Her submission, in substance, amounted to an attack that the determination to the contrary made by the Commissioner and the Tribunal is perverse in the sense that it is so inconsistent with the objective facts that no reasonable decision maker would have so concluded.

25.  The objective facts, which are not in dispute, can be found in the witness statement of Siu Wing Ho, senior executive officer of the Transport Department, placed before the Tribunal.  The relevant parts read :

“Passenger Service Licence (‘PSL’) No. 9396A of Kwoon Chung Motors Co. Ltd

3.        According to the records of the Transport Department, the Applicant was first issued with PSL No. 9396A on 31^st July 1998 with a validity period up to 2^nd August 2000.  The validity period of the Applicant’s PSL No. 9396A has since been extended 7 times, the 4^th of which was on 28^th October 2005.  Upon the latest extension on 29^th October 2008, the current expiration date of PSL No. 9396A is 30^th October 2009.

Differences between the Application for and Issuance of a New PSL and an Extension of an Existing PSL

4.        There are a number marked differences between (a) an application for the grant of a new PSL and (b) that for/of an extension of validity period of an existing PSL.  Contrary to what is argued on behalf of the Applicant in the Applicant’s Further Submissions, these differences arise from the fact that those are two difference types of applications and cannot be ‘accounted for as for the convenience of administrative processing’.  Paragraphs 5 to 12 below set out the major differences.  For the purposes of the present case, I shall focus on the position in late 2005, i.e. the time when the Applicant made its application under the form enclosed to the Department of Justice’s letter dated 14 November 2008 at Annex 1 (‘Annex 1’) and was issued with the PSL which was in force on the relevant survey dates (11, 13 and 27 April 2006).

The Application Forms

5.        To apply for a new PSL, an application form titled ‘Application For Passenger Service Licence—Public Bus Service’ (form TD 246A), has to be submitted.  A copy of a sample of the said form is enclosed to DoJ’s Letter at Annex 2.

6         An applicant for a new licence must provide in the said form TD 246A particulars in respect of, among other things, its nature of business, the names of officers or other corporate bodies authorised to enter into contracts on behalf of it, type(s) of service under application, the ‘route(s) or area to be served’, ‘frequency of service’ and ‘proposed fares to be charged (if applicable)’ and particulars of proposed public buses to be used.

7.        On the other hand, for an application for extension of an existing PSL, an applicant has to submit an application form TD 317A, previously titled ‘Application for a New Passenger Service Licence—Public Bus Service Upon Expiry of the Current Passenger Service Licence’.  Annex 1 was a copy of the TD 317A form submitted by the Applicant on 29^th September 2005.  As can be seen from the form, unlike in applications for new PSLs, an applicant applying for an extension of an existing PSL needed not provide the particulars as mentioned in paragraph 7 above.  Rather, what were required were particulars in respect of, inter alia, the ‘expiring passenger service licence’ including its number, expiry date and type(s) of service authorised under it, the total number of public bus(es) operated under the licence.

8.        It should also be mentioned that the word ‘New’ as then appearing in the English version of the title of the TD 317A form was a typographical error.  To avoid confusion, the form has been amended since February 2008 with the word ‘New’ in the English version of the title deleted.  A copy of the amended TD 317A form submitted by the Applicant on 2^nd October 2008 in support of its latest (i.e. the 7^th) application for extension of its PSL No. 9396A is now produced and shown to me marked ‘SWH-1’.

9.        According to the Transport Department’s records, the Applicant only submitted a TD 317A form on 29^th September 2005 (Annex 1) for an extension of its PSL No. 9396A which would otherwise expire on 30^th October 2005.  No. TD 246A form was submitted on that occasion.

Acknowledgement of Receipt/Notification of Successful Application

10.      In response to an application for a new PSL, the Transport Department would issue a receipt to acknowledge the same.  A sample of the receipt which would have been issued in response to an application for a new PSL in late 2005 is now produced and shown to me marked as ‘SWH-2’.  If the application was successful, the Transport Department would then issue an approval-in-principle letter to inform the Applicant accordingly.  A sample of the letter which would have been issued where an application for a new PSL was successful in late 2005 is now produced and shown to me marked ‘SWH-3’.

11.      On the other hand, if an application for an extension of a PSL was successful, the Transport Department would issue a receipt to the Applicant and to request it to ‘collect the extended PSL/PSLC(s)’ on a specified date else its ‘application for Extension_of PSL/PSLC(s) will be void’.  A copy of the receipt issued to the Applicant on 28^th October 2005 informing it that its application for extension was successful is now produced and shown to me marked ‘SWH-4’.

Different Vetting Criteria

12.      Furthermore, as a matter of fact, a more stringent approach was adopted in vetting applications for new PSLs than for extension of existing PSLs.  For an application for a new PSL, the applicant would be requested to furnish the Transport Department with a deployment plan for all the public buses intended to be used under the PSL under application for full fleet vetting whereas in the renewal cases, the PSL holder would only be required to submit relevant contracts to support the continuation of the service needs.  Applications for new PSLs must be approved by the Transport Department’s Assistant Commissioner level while applications for extensions were approved by Executive Officers.

The PSL Number

13.      Where an application for a new PSL was successful, the PSL then issued would be accorded a fresh PSL number.  On the other hand, where an extension of an existing PSL was granted, the extended PSL would bear the same licence number as the PSL to be extended.  That explains why, in the present case, upon the extension of its validity period on 28^th October 1998, the extended PSL No. 9396A of the Applicant bore the same PSL number as it did before the extension.”

26.  In my view, the objective facts unequivocally establish that what the applicant applied for in September 2005 was an extension of PSL No. 9396A, and upon the Commissioner’s approval, PSL No. 9396A was in fact extended in October 2005.  Contrary to the applicant’s contention, no new licence was issued even if the Commissioner had the power to renew under section 27 of the Ordinance.

27.  In her able submissions, Ms Ng took a number of points to support the applicant’s case.

28.  She first argued that PSL No. 9396A issued in October 2005 made no reference to regulation 6 or extension.  The licence expressly stated that it was issued pursuant to section 27 and regulation 7 of the Regulations.

29.  In my view, the reference to section 27 does not necessarily indicate that it is a new licence.  After all, an extended licence remains a licence issued under section 27.  The reference to regulation 7 does not assist.  It sets out the mandatory requirement for the contents of a PSL.  It is not confined to a new licence.

30.  She next argued that had it been a mere extension, an endorsement on the old licence with the extended validity period would suffice.  But I think it is a matter for the Commissioner and him alone as to how to deal with the matter.

31.  Ms Ng then relied on the old Form TD 317A which contained the heading “Application for a new [PSL]—Public Bus service upon expiry of the current [PSL]”.  The Form clearly showed that what was applied for was a new licence.  She asked me not to give any weight to Ng’s evidence that the reference “new” was a typographical error.  However, I have no reason to doubt the bona fides of Ng’s evidence on this point.  In any event, I do not think much weight can be gathered from the heading in the old Form.  The heading is only one of the pertinent factors, which cannot be considered in isolation.  When properly assessed with all the relevant facts, the heading does not distract from the overall picture objectively as set out in paragraph 26 above.

32.  Finally, Ms Ng submitted that there was no ambiguity in the PSL issued in October 2005 that the Old Condition applied.  The applicant is entitled to rely on what was clearly stated in the licence.  In my view, given the 3 months’ consultation before the Commissioner issued the notice in July 2005 and the reminder on 22 October 2005 before the extension granted about 1 week later, the applicant must be fully aware of the change to be implemented on 1 November 2005.

33.  In my view, the Commissioner and the Tribunal were entirely correct in determining that PSL No. 9396A was extended for another year in October 2005 and that no new licence was issued.

The New Condition applied

34.  Regulation 8 of the Regulations provide :

“The Commissioner may, after consultation with the licensee, by giving 3 months’ notice in writing to the licensee … amend the terms or conditions of a [PSL] at any time during its validity …”

35.  Ms Wu submitted that to extend a PSL does not involve creation of a new licence.  The current licence continues with a lengthened validity or is prolonged in time : Chan Tin Shi v Li Tin Sung (2006) 9 HKCFAR 29; Kan Kam Cho v Kan Chiu Nam (2008) 11 HKCFAR 538.  On a proper construction, the word “validity” in regulation 8 includes the extended validity period.  It follows that insofar as PSL No. 9396A is concerned the Commissioner had satisfied the due process requirement in regulation 8 when implementing the New Condition.  The New Condition applied to it since 1 November 2005.  I agree.

Orders

36.  For the above reasons, I will dismiss the application for judicial review.

37.  Counsel agreed that costs should follow the event.  I will therefore order the applicant to pay the Commissioner costs, including all costs reserved, to be taxed if not agreed.