NG ENTERPRISES LTD. v. THE URBAN COUNCIL

HEADNOTE

[(i) An amendment to the Hawker (Urban Council) Bylaws removed the category of licence appropriate to itinerant hawkers. Its effect has been to prohibit all hawking by itinerant hawkers on streets in the Urban Council area. The Urban Council did not exceed its powers in passing this amendment, since it was not prohibiting what would otherwise have been lawful : the Public Health and Municipal Services Ordinance (Cap. 132) prohibits all hawking on the streets of Hong Kong without a licence.

(ii) Even though the Applicant (a well-established company which sells ice-cream from a fleet of mobile vans) was far removed from the common stereotype of the itinerant hawker, the decision of the Urban Council not to exempt the Applicant from the policy of banning itinerant hawkers from streets in its area was not Wednesbury unreasonable : the Council was entitled to conclude that the inconvenience of establishing a scheme to determine which itinerant hawkers should be exempted from the ban outweighed the injustice suffered by the few itinerant hawkers who may not have been responsible for the environmental and traffic problems which caused the ban.]

1994 M.P. No. 2812

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. The Applicant, Ng Enterprises Ltd. ("the Company"), manufactures and sells ice-cream known as Mister Softie Ice-Cream. It has been in business since April 1969. It manufactures its own ice-cream from a factory near Shatin, and it sells its ice-cream from its own ice-cream vans, which have been specially designed and constructed for that purpose. Over the years, considerable sums have been invested in its vans and its factory. However, changes are soon to be made to the licensing system under which the Company has always traded. The Company is concerned that those changes will put it out of business. Accordingly, with the leave of Mayo J. (as he then was) which was granted on 7th October 1994, the Company now applies, amongst other things, for the quashing of the bylaw which puts those changes into effect.

THE FACTS

2. A licensing system covering hawkers has been operated by the Urban Council ("the Council") since the 1950s. For a number of years, the issue of hawkers' licences was unrestricted. The objective was to persuade everyone who wished to trade as a hawker to give themselves the legal cover of a licence. Under that licensing system, the Company had been treated as hawking from "mobile shops", and it had been issued with itinerant hawkers' licences for each of its vans. However, large numbers of hawkers chose not to apply for hawkers' licences, and the Council eventually decided that no new licences for itinerant hawkers should be issued.

3. In 1972, the Hawker (Urban Council) Bylaws ("the Bylaws") were enacted. The category of licence which the Company was issued for each of its vans, under these Bylaws, was that of Itinerant Hawker Licence (Mobile Van). These replaced the licences which the Company had held under the previous licensing system. An additional four licences were issued to the Company under the Bylaws in 1975 when it wished to increase the size of its fleet, though this was expressed to be an exception to the Council's policy that no new licences for ice-cream vans would be issued. This brought the number of licences which the Company had for its vans in the area covered by the Council up to 13.

4. In 1982, the Company was informed that the Council had received legal advice to the effect that the Bylaws did not contemplate a limited company being granted a licence under them. It was told that the Council had agreed that, as a temporary arrangement, a maximum of 13 licences could be granted to nominated employees of the Company. The Company took advantage of that arrangement, and since then the 13 licences for its vans have been in the names of the Company's employees who drove and operated them. The licence fees, though, continue to be paid by the Company. As a result of the establishment of the Regional Council in 1986, the Company gave up 5 of the 13 licences, and those (plus one other licence for a van which had always been operated in the New Territories) have been held under bylaws enacted by the Regional Council. The remaining 8 licences continued to be held under the Hawker (Urban Council) Bylaws.

5. In 1990, the Council decided to take further steps to reduce the number of Itinerant Hawker Licences. Accordingly, it introduced a scheme under which holders of existing licences were encouraged to surrender their licences in return for an ex gratia payment or the allocation by ballot of a vacant fixed pitch or stall in a public market. All existing licence holders were informed of the scheme. The introduction of the scheme resulted in a modest reduction in the number of licensed itinerant hawkers, but since it would take many years to achieve the aim of eliminating such hawkers altogether, the Council established a Working Party to consider how that could be achieved more quickly. In May 1992, the Working Party recommended that the category of licence known as the Itinerant Hawker Licence be removed by 1st April 1996, and that mobile vans selling ice-cream should not be exempted from that policy. The effect of removing that category of licence will be the banning of itinerant hawkers in the Urban Council area because it is an offence to hawk in a street in Hong Kong without a licence. In February 1993, the Standing Committee of the Council agreed with that recommendation, and on 17th March 1993 the Market and Street Traders Select Committee of the Council ("the Committee") resolved to adopt the recommendations. Licence holders affected by the recommendations had not been consulted, and the first they knew of the recommendations was when the adoption of the recommendations was publicly announced on 17th March 1993.

6. The decision of the Committee of 17th March 1993 is the first of the decisions challenged in these proceedings, though it is important to note that the Company does not challenge the decision to remove the category of Itinerant Hawker Licence altogether. It challenges only that part of the decision by which the policy was to be applied without exception. The effect of the application of the policy to the Company was that the Company could not, from 1st April 1996, lawfully sell its ice-cream from mobile vans in streets in the Urban Council area.

7. The announcement of the new policy was accompanied by a pamphlet which explained the options which licence holders had if they chose to surrender their licences. Some of those options were only available to certain kinds of licence holders, but the options available to those who held Itinerant Hawker Licences (Mobile Van) selling ice-cream were :

(i) the allocation of fixed pitches or stalls in public markets,

(ii) the establishment of purpose-built kiosks in Urban Council leisure grounds,

(iii) the allocation of vacant stalls in cooked food centres, and

(iv) an ex gratia payment of $30,000.00 in respect of each licence.

8. Following the announcement of the new policy, the Company made strenuous representations to the effect that either the new policy should not be applied to it, or that a new category of licence should be issued to enable its vans to continue to operate in the Urban Council area as before. Both recommendations were considered by the Committee on 15th September 1993. The Committee decided that the Company should not be exempted from the new policy, and that a new category of licence should not be created for it. This decision is the second of the decisions challenged in these proceedings.

9. Following further representations by the Company, the Company was informed by a letter dated 9th February 1994 from the Director of Urban Services that since the nominated employees of the Company were the licence holders, the Council's offers of alternative sites and compensation had been made to them, and could not be made to the Company. The "decision" to which that letter related is the third of the decisions challenged in these proceedings. The danger which the Company envisaged was that its drivers might be tempted by the offer of compensation to surrender the licences, and the Company's operations in the Urban Council area would be reduced even before 1st April 1996.

10. The means by which the category of licence known as the Itinerant Hawker Licence was to be removed had been considered by the Committee on 17th March 1993. It was acknowledged that its removal could only be achieved by legislation. However, that was not made public. Indeed, the Company was led to believe that its removal was to be achieved by the simple expedient of the non-renewal of Itinerant Hawker Licences, and that when the renewal of the licences held by the Company's drivers was refused, any person dissatisfied with the refusal to renew could appeal against the refusal by invoking the statutory appeals procedure. The first the Company knew that the removal of this category of licence was to be achieved by legislation was when its solicitors were informed by letter dated 6th July 1994 that the Council intended to amend the Bylaws to remove all references to Itinerant Hawker Licences.

11. That intention was put into effect on 13th September 1994 when the Council resolved to enact the Hawker (Urban Council)(Amendment) (No. 3) Bylaw (L.N.508 of 1994) ("the amending Bylaw"). The effect was to amend the Bylaws to remove the Itinerant Hawker Licence as a category of licence with effect from the expiration of 12 months beginning with its commencement day. The Company and its solicitors were unaware of the actual enactment of the amending Bylaw when these proceedings were launched on 30th September 1994. That was why one of the decisions then being challenged was the decision to achieve by legislation the removal of Itinerant Hawker Licences. After the commencement of these proceedings, the Company became aware of the enactment of the amending Bylaw, and it is its enactment on 13th September 1994 which is the final decision of the Council now being challenged, rather than the acknowledgement by the Committee on 17th March 1993 that the removal of Itinerant Hawker Licences could only be achieved by legislation.

THE FOCUS OF THE CHALLENGE

12. The immediate focus of the Company's challenge is to the amending Bylaw. It is challenged on the basis that its enactment by the Council was outside the powers of the Council. However, the Company needs to challenge the underlying policy as well. That is because Mr. Philip Dykes for the Company accepts that the removal of the category of Itinerant Hawker Licence without any exceptions for existing licence holders can be enacted by the Legislative Council. Accordingly, the quashing of the amending Bylaw alone might only be a temporary respite for the Company. That is why the Company is also anxious to succeed in its challenge to the decision of the Urban Council not to exempt the Company from the new policy. If that decision is successfully challenged on the basis, for example, of its irrationality, the Legislative Council might think twice before enacting laws implementing the Urban Council's policy to remove the category of licence without exempting the Company from the application of the policy.

THE EFFECT OF THE POLICY ON THE COMPANY'S BUSINESS

13. Extravagant claims have been made both by the Company and the Council on the effect of the removal of this category of licence on the Company's business. The Company claims that it will have to go out of business. It acknowledges that it will have six mobile vans still selling ice-cream outside the Urban Council area, but it claims that those six vans will not produce an income which is sufficient to fund the factory in which the ice-cream is made and to pay for the other expenses of the business. It also claims that it is questionable whether there is a sufficient market outside the Urban Council area for more ice-cream vans. The Council, on the other hand, claims that the effect of its policy on the Company's business will be negligible. The Company will be able to continue to sell its ice-cream in the Urban Council area : the only difference will be that it will have to do so from fixed pitches. It can even do so from mobile vans : the only thing which the vans cannot do is to stop and sell ice-cream wherever the driver thinks that business might be good.

14. There is no way that I can determine which of these two extreme positions represents the more accurate forecast of the Company's trading future in the event of the Council's policy being implemented. If the Company's trading future had been relevant to any discretion which I might have had to exercise, I would have given the parties an opportunity to file such evidence on the topic as they wished.

CORPORATE LICENCES

15. I have already referred to the Company being informed by the Council in 1982 that the Bylaws did not contemplate a limited company being granted a licence under them. That is what one would have expected. A company is not an obvious holder of an Itinerant Hawker Licence. However, the Company maintains that the Bylaws do contemplate corporate licensing. The Bylaws were made under the Public Health and Municipal Services Ordinance (Cap. 132) ("the Ordinance"). Section 125 of the Ordinance deals with general powers relating to licences granted by a licensing authority. Section 125(2) provides :

"Save where the licensing authority thinks fit, no registration, licence or permit shall be made or granted in the name of more than one person :

Provided that nothing in this subsection shall be construed to prevent the making of any registration or the granting of any licence or permit in the name of a corporation."

The Company's case is that the proviso (even though limited in its application to the sub-section) demonstrates that the Ordinance pursuant to which the Bylaws were made clearly contemplated a corporate licence holder.

16. I do not have to decide whether that is correct. That is because the Council's policy which the amending Bylaw sought to implement applied whether the licence holder was an individual or a company. Apart from the danger of the Company's drivers surrendering their licences in order to get the ex gratia compensation, the fact that the licences have been in the drivers' names cannot have worsened the Company's position.

17. I do not overlook the fact that the Company was informed by the Director of Urban Services in 1982 that the legislation would be reviewed to see whether an Itinerant Hawker Licence could be granted to the Company. I accept that that may have given the Company a legitimate expectation that the law might in the future be amended to permit corporate licence holders, and that in that event the drivers' licences might be cancelled and new ones issued to the Company. In that context, it is unfortunate that, when the decision was subsequently made not to amend the legislation, the Company was kept in the dark about that decision until it received the letter of 9th February 1994. However, the fact remains, as Mr. Dykes realistically accepted, that the change from corporate to individual licences had no impact on the Council's decision to apply its new policy without exception.

DELAY

18. Ord. 53 r. 4(1) of the Rules of the Supreme Court provides :

"An application for leave to apply for judicial review shall be made promptly and in any event within three months from the date when grounds for the application first arose until the Court considers that there is good reason for extending the period within which the application shall be made."

In this case, all the decisions challenged were made more than three months before the application for leave to apply for judicial review of them was made. That applies even to the decision of 13th September 1994 to enact the amending Bylaw, because the application to amend the Notice of Application so as to challenge that decision was not made until 14th December 1994. However, no point on delay is taken by the Council in relation to that decision, since it accepts that the Company was not aware of the decision until much later. There is, though, one procedural hurdle which the Company must clear in relation to this decision. Although Sears J. gave leave for the Notice of Application to be amended so as to enable the Company to challenge this decision, the Order does not record him as actually giving leave to the Company to apply for judicial review of the decision itself. To the extent that Sears J. did not do so, I extend the Company's time for applying for leave to apply for judicial review of the decision, and I give leave for the application for judicial review of it to be made.

19. I turn to the other three decisions which the Company challenges, namely

(i) the decision of the Committee on 17th March 1993 not to exempt the Company from its new policy,

(ii) the confirmation by the Committee on 15th September 1993 of that decision,

(iii) the decision (which must have been made prior to the letter of 9th February 1994 informing the Company of it) that the offers of alternative sites and compensation which had been made to the actual holders of the licences would not be withdrawn.

These decisions were communicated to the Company by letters dated 3rd April 1993, 14th October 1993 and 9th February 1994. Despite that, these proceedings were not launched, as I have said, until 30th September 1994, though in granting leave to the Company to apply for judicial review of these decisions, Mayo J. must have considered that there was good reason for extending the period within which the application for leave had had to be made.

20. Mr. Edward Chan Q.C. for the Council argues that there was no good reason for extending the Company's time for applying for leave. He submits that the leave granted by Mayo J. ex parte should be set aside under either Ord. 32 r. 6 of the Rules of the Supreme Court (which empowers the Court to set aside an order made ex parte) or section 21K(6) of the Supreme Court Ordinance (Cap. 4), which provides :

"Where the High Court considers that there has been undue delay in making an application for judicial review, the Court may refuse to grant -

(a) leave for the making of the application; or

(b) any relief sought on the application,

if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration."

21. I decline to set aside Mayo J.'s order granting the Company leave. As for Ord. 32 r. 6, I agree with the reasoning of the Divisional Court in R. v. Derbyshire County Council ex p. Noble [1989] C.O.D. 285 at p. 286 :

"Where it was sought to make an application ... under Ord. 32 r. 6 ... to set aside a grant of leave, the application should be made timeously. If it was not made before the substantive hearing there was no point in making the application at all since it saved no costs and was to no-one's advantage."

As for section 21K(6), that relates to the refusal of the grant of leave in the first place, not to the setting aside of leave once leave has been granted.

22. However, that does not mean that delay is no longer a relevant consideration. Section 21K(6) reproduces section 31(6) of the Supreme Court Act 1981. In Caswell v. Dairy Produce Quota Tribunal for England and Wales [1990] 2 A.C. 738, the House of Lords held that the words "undue delay in making an application for judicial review" refer to the failure to apply promptly and in any event within three months for leave to apply for judicial review. It is therefore open to the Council to argue that the Company should be refused any relief on the ground of hardship, prejudice or detriment to good administration. I shall return to the issue when I address what relief, if any, the Company would otherwise be entitled to.

THE ENACTMENT OF THE AMENDING BYLAW

23. I have already said that the effect of the amending Bylaw was to remove the Itinerant Hawker Licence as a category of licence from the Bylaws. Since

(a) the combined effect of sections 83B(1) and 83B(3) of the Ordinance is to make it an offence to "hawk in any street except in accordance with a licence issued under regulations made under section 83A", and

(b) the Bylaws are regulations which had been made under section 83A(1) of the Ordinance,

the effect of the amending Bylaw was to prohibit itinerant hawkers from hawking in the streets of Hong Kong. The Company argues that the Council had no power to enact a bylaw which had that effect.

24. The premise on which this argument is based is that the Ordinance regards itinerant hawking as a lawful activity. It was expressly provided for in the definition of "hawker" in section 2(1) :

" 'Hawker' means -

(a) any person who trades in a public place -

(i) by selling or exposing for sale any goods, wares or merchandise; or

(ii) by exposing samples or patterns of goods, wares or merchandise to be afterwards delivered; or

(iii) by hiring or offering for hire his skill in handicraft or his personal services; and

(b) any person who itinerates for the purpose -

(i) of selling or exposing for sale any goods, wares or merchandise; or

(ii) of hiring or offering for hire his skill in handicraft or his personal services ..."

It is against the background of itinerant hawking being a lawful activity, it is said, that the section of the Ordinance conferring the power on the Council to make regulations relating to hawkers must be construed. Section 83A(1) permits the Council to make regulations which provide, for example, for the licensing, classification, regulation and control of hawkers. However, it does not expressly permit the Council to make regulations which provide for the prohibition of a particular type of hawking, and since the Ordinance treats itinerant hawking as lawful, a power in the Council to make regulations which provide for the prohibition of itinerant hawking should not be inferred. The distinction between regulating an activity and prohibiting it has been recognised in a number of cases, including two in the Privy Council : Municipal Corporation of the City of Toronto v. Virgo [1896] A.C. 88 (a case concerned with a municipal bylaw prohibiting hawkers from plying their trade in a number of streets in Toronto) and Attorney-General for Ontario v. Attorney-General for the Dominion [1896] A.C. 348. In any event, subsidiary legislation cannot prohibit (whether expressly or impliedly) an activity rendered lawful by the Ordinance which confers the power to make the subsidiary legislation : see section 28(1)(b) of the Interpretation and General Clauses Ordinance (Cap. 1).

25. I cannot accept this argument. In my view, it falls at the first hurdle. The Ordinance does not regard itinerant hawking as a lawful activity. The fact that itinerant hawking is acknowledged to be a type of hawking in section 2(1) does not mean that its legality is accepted. On the contrary : sections 83B(1) and 83B(3) make it clear that there is a blanket ban on all hawking on the streets of Hong Kong, save only to the extent that it is rendered lawful by being licensed. It is not the case that hawking on the streets of Hong Kong is rendered unlawful only to the extent that it is not licensed. Such an argument is inconsistent with the language of sections 83B(1) and 83B(3), and it ignores the fact that section 83A confers only a power, not a duty (note the word "may"), on the Council to introduce a licensing system.

26. Accordingly, the amending Bylaw does not prohibit an activity which would otherwise be lawful. The correct analysis, in my judgment, is that it merely provides for an activity which the Ordinance has rendered unlawful, but which has been rendered lawful for the time being under the licensing system provided for by the Bylaws, to be rendered unlawful once again by the amendments to the relevant parts of the Bylaws. In these circumstances, the relevant section of the Interpretation and General Clauses Ordinance is not section 28(1)(b), but section 28(1)(c) which provides that subsidiary legislation may at any time be amended by the same body by, and in a manner in, which it was made. As for the distinction which Mr. Dykes drew between hawkers and hawking, I reject the distinction : the power conferred on the Council to make regulations relating to hawkers was wide enough to include a power to regulate their activities for the purposes set out in section 83A(1) of the Ordinance.

27. Mr. Dykes sought to justify the premise on which the Company's argument was based by comparing hawkers with motorists. Driving a vehicle on a road, he said, is a lawful activity, even though all drivers are required to have a driving licence. By analogy, hawking in the street should be regarded as a lawful activity, even though all hawkers have to obtain a licence to do so. I do not think that this comparison helps in any way. It begs the question to be decided. Whether driving a vehicle on a road is a lawful activity depends on the proper construction of the provisions of the Road Traffic Ordinance (Cap. 374). It may be that driving a vehicle on a road is unlawful only if it is done without a licence. But what the statutory provisions relating to road traffic provide for is no guide at all to the true effect of section 83A and 83B of the Public Health and Municipal Services Ordinance.

28. For these reasons, therefore, I have reached the clear conclusion that the enactment by the Council of the amending Bylaw was within the powers conferred on it by section 83A(1) of the Ordinance.

THE IMPEACHMENT OF THE AMENDING BYLAW

29. Bylaws may be impeached on the grounds that they are (a) unreasonable, (b) contrary to the law or (c) in restraint of trade : Halsbury's Laws of England, 4th ed., vol. 28, paras. 1328, 1330 and 1331. The Company contends that even if the Council had the power to enact the amending Bylaw, it should be struck down on each of these three grounds. Although I propose to address each of these grounds separately, it should be remembered that these grounds are no more than particular applications of the doctrine of ultra vires. The words of Diplock L.J. (as he then was) in this connection in Mixnam's Properties Ltd. v. Chertsey U.D.C. [1964] 1 Q.B. 214 at pp. 237-238 should not be overlooked :

"The various special grounds upon which subordinate legislation has sometimes been said to be void - for example, because it is unreasonable ... [or] because it is repugnant to the general law or to some other statute - can, I think, today be properly regarded as being particular applications of the general rule that subordinate legislation, to be valid, must be shown to be within the powers conferred by the statute. Thus, the kind of unreasonableness which invalidates a bylaw is not the antonym of 'reasonableness' in the sense of which that expression is used in the common law, but such manifest arbitrariness, injustice or partiality that a court would say : 'Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires'; Kruse v. Johnson [1898] 2 Q.B. 91 per Lord Russell C.J. at p. 100. ... Invalidity upon the ground of repugnancy to the general law or to some other statute ... is merely an application to clauses which empower a subordinate authority to make changes in the law of the general rule of construction that the legislature is presumed not to have intended to make any substantial alteration in the law beyond the immediate scope and object of the statute which confers the power."

30. Reasonableness. The classic statement of whether a bylaw is so unreasonable that the body making it must have exceeded its powers is to be found in Kruse v. Johnson itself. The headnote reads :

"In determining the validity of bylaws made by public representative bodies, ... the Court ought to be slow to hold that a bylaw is void for unreasonableness. A bylaw so made ought to be supported unless it is manifestly partial and unequal in its operation between different classes, or unjust, or made in bad faith, or clearly involving an unjustifiable interference with the liberty of those subject to it."

The reason why bylaws should be given a "benevolent" interpretation and should "be supported if possible" is because the power to make bylaws is entrusted to particular bodies. To use the words of Russell L.C.J. in Kruse v. Johnson at p. 98, they are required to exercise "their own judgment as to what are the bylaws which to them seem proper to be made for good rule and government in their own localities". It is their knowledge, experience and judgment which counts.

31. The Company contends that the enactment of the amending Bylaw on 13th September 1994 to implement the earlier decisions of the Committee of 17th March 1993 and 15th September 1993 not to exempt the Company from the policy of banning itinerant hawkers in the Urban Council area was so unreasonable that the Council must have been exceeding its powers in enacting the amending Bylaw. That argument turns on whether the earlier decisions of the Committee were irrational in the sense that they were "so outrageous in [their] defiance of logic or of accepted moral standards that no sensible person who applied his mind to the question to be decided could have arrived at [them]" : Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service [1985] 1 A.C. 374 at p. 410G.

32. The Company argues that, even if a majority of itinerant hawkers cause environmental problems and obstruction, the banning of all itinerant hawkers without exception amounted to overkill. The Company and its drivers had only occasionally been convicted of hygiene or road traffic offences, and they had never been convicted of any offence under the Bylaws. Moreover, the Company was a unique case : its ice-cream vans were far removed from the stereotype of the hawker standing outside a crowded MTR station with a trolley holding boiling fat emitting smells regarded by many as unpleasant. The nature and size of the Company's business, and the sums which it had invested in its business over the years, distinguished it from almost every other person who could properly be characterised as an itinerant hawker, and the environmental problems and the obstruction to the free flow of traffic and pedestrians which the Council concluded itinerant hawkers caused could not possibly be said to apply to the Company and its drivers.

33. In evaluating this argument, two points must be borne in mind :

(i) The reasonableness of the Committee's earlier decisions can only be judged on the contents of the briefing papers which the members of the Committee were provided with, and on their own knowledge of the problems caused by itinerant hawkers in Hong Kong. There is no suggestion in this case that the Committee was not told of other relevant facts which might have affected the conclusions of its members.

(ii) The briefing papers recorded at commendable length what the recommendations to the Committee had been, and the reasons for those recommendations. However, although the Committee adopted some of the recommendations, and not others, I do not know what particular arguments caused the Committee to make the decisions which it did. That is not surprising. The Committee was made up of a number of members, all of whom may have had different reasons for their conclusions. The effect of that is that the reasonableness of the Committee's decisions can only be judged objectively, and not by reference to the process of reasoning by which individual members may subjectively have arrived at their conclusions.

34. In my judgment, the Committee's decisions not to exempt the Company from the policy of banning itinerant hawkers in the Urban Council area were not so irrational as to render them flawed. If the Committee had decided that the Company should be exempted, there would have had to have been a similar exemption for every itinerant hawker who the Council was satisfied was not responsible for any of the environmental or road traffic problems which had been the rationale for the ban in the first place. For that purpose, the Council would have had to establish a procedure for the determination of applications for exemption. The work involved in the adjudication of such applications could well have been significant. In my view, it was open to the Committee to conclude that the desirability of avoiding the considerable administrative inconvenience of establishing and implementing such an exemption scheme (a) justified the imposition of a ban on all itinerant hawkers, and (b) outweighed the injustice which a few itinerant hawkers (particularly, but not necessarily only, the Company and its drivers, who may not have been responsible for the problems which caused the blanket ban) would suffer, by having either to go out of business altogether, or to change to a different kind of hawking. It goes without saying that the Court should not be deflected from taking the course which it believes to be right by an argument that taking that course would open the floodgates to many claims, but I see no reason whatever why the Committee should not have been entitled to put in the balance the possibility that the Council might be inundated by applications for exemption if it permitted the Company to be exempted from the policy.

35. Contrary to law. The Company's primary argument is that the amending Bylaw is contrary to the law of Hong Kong, because it has the effect of prohibiting an activity - itinerant hawking - which the law permits. I have already dealt with this argument in the context of the Council's power to enact the amending Bylaw. It is not contrary to the law of Hong Kong, because all hawking (whether itinerant or otherwise) is unlawful, save to the extent that it is rendered lawful by licence. The relaxation for the time being on the prohibition on itinerant hawking is now to be removed.

36. However, Mr. Dykes also argues that the amending Bylaw is unlawful because it uses a system of licensing to discriminate between itinerant hawkers and hawkers who sell their wares from fixed pitches. His researches have led him to the dictum of Phillimore and Hamilton JJ. in Conservators of Mitcham Common v. Cox [1911] 2 K.B. 854 at pp. 875-876 :

"Licences or permits are unobjectionable so far as they are part of the machinery of legitimate regulation. As soon as they become mere means of discrimination or hindrances in the way of one class from which other classes are free they cease to be justifiable and cannot be required."

I agree with that observation as a general principle, but I wholly reject its application to the present case. It is true that the amending Bylaw favours one type of hawker over another, but whether the prohibition on hawking altogether should be relaxed to permit a particular form of hawking is, in my judgment, exactly what the Ordinance leaves to the Council to decide. In other words, the machinery of legitimate regulation permitted the Council to decide whether the system of licensing should continue to sanction itinerant hawking.

37. Restraint of trade. The Company's case is that its business - selling ice-cream which complies with hygiene standards from taxed and insured mobile vans - is lawful. There is nothing about it which is either dangerous or hazardous to health. In that respect, it is no different from a well-run shop. Since the effect of the amending Bylaw is to curtail a lawful trade, the amending Bylaw itself is unlawful as being in restraint of trade.

38. The fallacy in this argument is that it assumes that the restraint is being imposed by the amending Bylaw. It is not. The restraint on the trade, being a form of hawking, is in the Ordinance. It is the Ordinance which outlaws all form of hawking in the street, save to the extent that the hawking is licensed pursuant to regulations passed under it. Unlike bylaws, ordinances are not susceptible to challenge on the basis that they are in restraint of trade. The fact that it is the legislation which prohibits the Company's trade is what distinguishes the present case from Rossi v. Lord Provost of Edinburgh [1905] A.C. 21 (another case concerning ice-cream), on which Mr. Dykes relied.

39. For these reasons, I conclude that the amending Bylaw cannot be successfully impeached on the footing that the Council exceeded its powers by enacting a bylaw which was (a) unreasonable, (b) contrary to the law of the land or (c) in restraint of trade.

CONSULTATION ON THE AMENDING BYLAW

40. The Company claims that both the enactment of the amending Bylaw, and the decisions of the Committee on 17th March 1993 and 15th September 1993 which laid the foundations for its enactment, were flawed because the Company was not consulted over the decision to apply the new policy to all itinerant hawkers without exception. That ground was not referred to in the Notice of Application for leave to apply for judicial review. Mr. Dykes sought leave to re-amend the Notice to rely on this ground. I give leave for the Notice to be re-amended in accordance with the draft placed before me. It makes sense for all issues between the parties to be determined at the same time, and I discern no prejudice to the Council if I allow the re-amendment : Mr. Chan did not wish to file any further evidence, and he was able to address me fully on the issue of lack of consultation.

41. Bodies charged with making decisions in the administrative field are frequently under a duty, before making their final decision, to consult with those persons or bodies who are likely to be affected by it. Occasionally, that duty to consult is imposed by legislation. More frequently, it arises as part of the decision-making body's general duty to act fairly : persons or bodies who are likely to be affected by a decision will often have a legitimate expectation that they will have an opportunity to make representations to the decision-making body before a final decision is made, and fairness requires that that legitimate expectation be given effect to by those persons or bodies being afforded such an opportunity.

42. The question which is said to arise in this case is whether the duty to act fairly in general, and the duty to consult in particular, relates to bodies charged with making decisions in the legislative field, i.e. bodies such as the Urban Council empowered to enact subordinate legislation. In practice, consultation with interested or affected parties does normally occur before delegated legislation is made, and that may be why there have been relatively few judicial decisions on the topic. But the prevailing view is undoubtedly that of Megarry J. (as he then was) in Bates v. Lord Hailsham of St. Marylebone [1972] 1 W.L.R. 1373 : in the absence of a legislative requirement to consult, interested parties do not enjoy a right to be consulted before subordinate legislation is enacted which might affect them.

43. Mr. Dykes argues that the recent decision of the Divisional Court in R. v. Secretary of State for Health ex p. United States Tobacco International Inc. [1992] 1 Q.B. 353 shows that the tide of modern authority is now moving the other way. I disagree. In that case, it was held that the manufacturers of oral snuff had been entitled to see a report produced by a Governmental advisory body which suggested a link between the taking of oral snuff and cancer. The failure to disclose that report to the manufacturers invalidated regulations which purported to outlaw the product. However, a careful reading of the judgments of Taylor L.J. (as he then was) and Morland J. shows that the true ratio of the case was that

(i) the minister was under a statutory duty to consult with the manufacturers,

(ii) on the facts of that case, that duty required a high degree of fairness and candour to be shown by the minister, and

(iii) in the light of that, the minister's statutory duty to consult with the manufacturers required a copy of the report to be disclosed.

It was this legislative requirement to consult which made the principle in Bates inapplicable to the case. That the case was concerned with the limits of a particular statutory duty to consult, rather than with whether the law recognises a general duty to consult over the enactment of subordinate legislation, is borne out by the fact that no argument was addressed to the Court on the issue nor was Bates cited to it.

44. Although I am strongly inclined to the view expressed by Megarry J., the correctness of his view is not something I need to decide in this case. That is because, as a matter of fact, the Company made such representations as it chose as to why the Council's policy should not be applied to it, and those representations were considered by the Committee on 15th September 1993. Accordingly, since the Council's enactment of the amending Bylaw on 13th September 1994 was merely the legislative implementation of the Committee's decisions of 17th March 1993 and 15th September 1993, no question of a lack of consultation arises. I recognise, of course, that the Company's representations were only made after the Committee's initial decision that the policy was to apply to all itinerant hawkers without exception. But there is no reason to suppose that the members of the Committee on 15th September 1993 regarded their decision of 17th March 1993 as cast in stone, or that they felt less able to give effect to the Company's representations by reason of their earlier decision.

45. The facts that the Company made such representations as it chose, and that those representations were considered by the Committee on 15th September 1993, dispose of another attack on the procedural fairness of the enactment of the amending Bylaw. Relying on various dicta in F. Hoffman-La Roche & Co. A.G. v. Secretary of State for Trade and Industry [1975] A.C. 295, Mr. Dykes argues that subordinate legislation may be vitiated by a failure to act fairly at a stage prior to its enactment. Assuming, without deciding, that there is such a principle, it does not help the Company, because even if there was procedural unfairness in not affording the Company the opportunity to make representations to the Committee prior to 17th March 1993, that unfairness was remedied by the Committee's consideration of the Company's representations on 15th September 1993.

46. The only procedural unfairness alleged by the Company relates to the lack of consultation. In those circumstances, I do not propose to address the interesting question, derived from the decision of the High Court of Australia in Arthur Yates & Co. Pty. Ltd. v. The Vegetable Seeds Committee (1946) 72 C.L.R. 37, that subordinate legislation can be challenged on the ground that it was enacted for an ulterior purpose. Suffice it to say that Dixon J. (as he then was) thought that it could be challenged on that ground because the legislation could in such circumstances be said to be outside the powers of the body enacting it. For my part, I do not think for one moment that subordinate legislation can be regarded as ultra vires simply because it was enacted without proper consultation.

47. THE DECISIONS OF 17TH MARCH 1993 AND 15TH SEPTEMBER 1993

The decisions of 17th March 1993 and 15th September 1993 are challenged to the extent that they applied the new policy to all itinerant hawkers without exception, and that the Company was not to be exempted from its application. The grounds on which those decisions are challenged have all been covered by the grounds on which the enactment of the amending Bylaw has been challenged, and my rejection of the challenge to its enactment means that I also reject the challenge to those decisions.

THE DECISION REFERRED TO IN THE LETTER OF 9TH FEBRUARY 1994

48. There is no challenge to the decision of the Committee of 17th March 1993 to encourage the voluntary surrender of Itinerant Hawker Licences before 1st April 1996 by offering compensation to licence holders. Nor is there any challenge to the decision of the Committee of 15th September 1993 not to offer compensation to the Company, despite the fact that the Committee was recommended to make such an offer. No doubt that decision is not being challenged because the Company has no intention of accepting such an offer even if one was made to it : the Company thinks, I assume, that it might as well continue trading from mobile vans for as long as the licences last.

49. What the Company is challenging is the subsequent decision of the Committee not to withdraw the offers of compensation to its drivers. That decision was made following the Company's letter of 15th January 1994 to the Department of Urban Services (which is the executive arm of the Council). In that letter, the Company took exception, amongst other things, to the fact that offers of compensation had been made to its drivers. The basis of this challenge is not so much that the Committee had no power to make offers of compensation to the Company's drivers, but that once the Company objected to those offers, it was irrational for the Council not to accede to that objection.

50. On this issue, I agree with Mr. Dykes. The Company's drivers only became the licence holders because of the legal advice which the Company had received that the Bylaws did not contemplate corporate licence holders. Whether or not that legal advice was correct, the fact is that the licences were de facto held by the Company. The Company paid the licence fees, not the drivers. The vans to which the licences related were owned by the Company, not the drivers. And it was the Company, I assume, who paid for their maintenance and repair. The licences were issued to the drivers to enable them to carry out the Company's business. It is disingenuous, in my view, for the Council to argue that it is not concerned with the private arrangements between licensees and third parties, when

(a) the Company only gave up the licences in favour of its drivers as a result of questionable legal advice given to the Council, and

(b) the Council was in fact aware, when it decided not to revoke the offers to the drivers, of the true nature of their relationship with the Company and of the Company's beneficial interest in the licences.

It should have been obvious to the Council that if one or more of the drivers accepted the offer of compensation, the drivers would have obtained a wholly unexpected and unjustifiable windfall, and the Company's operations in the Urban Council area would be jeopardized even before 1st April 1996.

RELIEF

51. The final question is whether I should give the Company any relief in relation to the one decision which I have found to be susceptible to challenge, namely the decision referred to in the letter of 9th February 1994. I do not think that the Company should be denied any relief by reason of its delay in launching proceedings to challenge that decision. I can discern no hardship, prejudice or detriment to good administration if the Council was required to withdraw the offers made to the Company's drivers. There is no need to recover sums already paid to them, because there was no evidence of any of the drivers having already accepted the offers, and Mr. Chan did not seek to tell me that the contrary was the case. It is true that the drivers could be said to suffer some hardship if the option to claim compensation is withdrawn from them, but since they never had any legitimate expectation of compensation before the offers were made to them, I do not regard that hardship as sufficiently serious to warrant depriving the Company of the relief to which it would otherwise be entitled.

52. Mr. Chan argues that the Company should be denied relief in public law in relation to the one decision which I have found susceptible to challenge because the Company has adequate remedies in private law to prevent its drivers accepting the Council's offers of compensation. It may be that the Company could require the drivers to account to it for any payments of compensation made to them by the Council, but that could hardly be said to be an adequate remedy because the real damage to the Company is the fact that it would lose the ability to trade from any van whose driver had surrendered his licence. The only remedy of any value to the Company would be an injunction restraining its drivers from accepting the offers from the Council. I have grave doubts as to whether the Company could obtain such an injunction against its drivers. The only factual basis for doing so would be that the offers were made pursuant to a decision which was unlawful. Without a declaration in public law that the decision was unlawful, the factual basis for an application for an injunction would disappear. If, therefore, it is appropriate for me to declare in public law that the decision was unlawful, I should, in my view, proceed to grant the Company the relief in public law which would be necessary to give effect to such a declaration.

53. Accordingly, the orders I make are as follows :

(i) an order of certiorari quashing the decision of the Urban Council not to withdraw the offer of ex gratia compensation which it had made, by a pamphlet issued on 17th March 1993 and subsequently, to those holders of licences in the category of Itinerant Hawker Licence (Mobile Van) who were employed as drivers by the Company,

(ii) an order of mandamus requiring the Urban Council to withdraw such offers within 7 days of the date of this order,

(iii) an injunction restraining the Urban Council, whether by the Department of Urban Services or otherwise howsoever, from making the same or similar offers of ex gratia compensation to those holders of licences in the category of Itinerant Hawker Licence (Mobile Van) who are employed as drivers by the Company.

COSTS

54. The Company has only succeeded on an issue which, though important to the Company, can at best be described as peripheral to the main issue. On the main issue, the Council has succeeded. In my judgment, I should reflect the Company's limited measure of success in such costs order as I should make. In the exercise of my discretion, the order nisi which I make as to costs is that, with the exception of those costs specifically dealt with by Sears J. in his Order of 14th December 1994 as amended, the Company must pay to the Council one-half of the Council's legal costs, to be taxed if not agreed.