WONG WEI MAN v. THE AMUSEMENT GAME CENTERS APPEAL BOARD AND ANOTHER

HCAL775/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO.775 OF 2000

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J U D G M E N T

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The challenged decision

1. On 25 March 1999, the applicant applied for an amusement game centre licence in respect of extensive basement premises at China United Centre in Marble Road, North Point. The tenant of those premises is a company called Linky Chance Limited, and the application was made upon that company's authority. The premises are extensive, covering approximately 15,748 square feet and the documents I have seen suggest that the rent paid by the company is in the region of $240,000 per month. The premised were acquired so that a modern and large scale game centre could, from these premises, be operated.

2. On 6 June 1999, the Commissioner for Television and Entertainment Licensing ("the Commissioner") wrote to the applicant, saying that it was intended to refuse the application because the Commissioner was not satisfied that the proposed operation of the game centre was located in a suitable area, given the presence of an education institution at a distance of less than 100 metres from the proposed premises. The institution to which reference was made was a school, called the Hong Kong Shu Yan School, which is situated in King's Road, North Point. The applicant was invited to make representations if she wished; and she did so, but to no avail, because by letter dated 10 August 1999, the Commissioner informed her that he did not think that she had provided sufficient justification for a change of the earlier expressed intention, and that, for the reason provided in the June letter, the application for a licence was refused.

3. The decision itself refusing the application was made on 9 August 1999 and it states that the application is refused :-

"... on the ground that I am not satisfied that the place of proposed operation, as required under section 5(4)(b)(ii) of the Ordinance, is located in an area suitable for the operation of an amusement game centre."

4. The applicant lodged an appeal against that decision with the Amusement Game Centres Appeal Board ("the Board"). On 25 February 2000, there was a hearing before the Board, and the Board issued its decision on 20 March 2000, rejecting the appeal.

5. This application for judicial review challenges the decision of the Board in dismissing that appeal.

The Ordinance

6. The Ordinance which regulates amusement game centres is the Amusement Game Centres Ordinance, Cap.435 ("the Ordinance"). Section 5(4) of the Ordinance provides, in so far as is relevant to this appeal, as follows :-

"(4) The Commissioner shall not grant a licence unless he is satisfied in relation to the proposed operation of the amusement game centre, that-

(a) ...

(b) the place of proposed operation is-

(i) suitable for the operation of an amusement game centre; and

(ii) located in an area suitable for the operation of an amusement game centre.

..."

Section 5(7) provides as follows :-

"(7) A licence granted under this section shall-

(a) be in such form as the Commissioner may determine;

(b) not take effect except on payment of the prescribed fee payable for the grant of a licence;

(c) authorize the licensee to operate an amusement game centre-

(i) with such number and type of machines or devices;

(ii) for the playing of such type of games by persons of such category or description-

(A) who are under the age of 16 years; or

(B) who have attained the age of 16 years;

(iii) at such place; and

(iv) for period of 12 months or such lesser period,

as shall be indicated therein.

..."

I pause to comment that the application with which we are concerned was for persons of the age of 16 years and above.

7. Appeals against decisions of the Commissioner are governed by Part III of the Ordinance, and go to the Board whose chairman is a person qualified for appointment as District Judge (see sections 11 and 12).

The Policy

8. From time to time, guidelines have been issued to govern the grant or refusal of licences for such centres. In 1984, guidelines were issued amongst which was one which stated that licences may be issued so long as the premises are not in close proximity to another licensed game centre; or not in close proximity to an educational institution; and it was stated that "for the purpose of close proximity, the Commissioner considers that the minimum distance between a centre and an educational institution shall not be less than 30 metres". A note to that specification said that "in applying the 30 metre rule ... the shortest walking distance between the entrance to the premises which are the subject to the application and the entrance to any other licensed premised or any education establishment shall be counted".

9. With the explosion of the number of such game centres in the 1980s, the guidelines were amended, or rather new ones were issued in 1988. It is these guidelines that apply to this case :-

"Subject to consideration of public interest ... applications for Amusement Game Centre Licences may generally be approved if the following requirements are satisfied :

(i) ...

(ii) ...

(iii) the premises are not within a radius of 100 metres from an existing amusement game centre or educational institution.

..."

10. It would appear that in 1996, the preamble to these guidelines was modified, and the guidelines given to this particular applicant at the time she made her application stated, in so far as is relevant :-

"An Amusement Game Centre Licence will not normally be granted unless the Licensing Authority is satisfied that :

...

(g) the proposed premises are not within a radius of 100 metres from an existing amusement game centre or educational institution;

..."

11. The rationale for the policy reflected by these guidelines is not difficult to see. It is explained in an affirmation before me on behalf of the Commissioner as aimed at ensuring security, or the concern about security, of residential areas (hence the restriction to commercial buildings), and to minimize the possibility of school children being drawn from schools close at hand to the game centres. The 1988 guidelines were endorsed by the Executive Council.

The Evidence

12. The evidence by the Commissioner is that all applicants are required to submit an ordinance survey sheet printed by the Lands Department, with a circle marked upon it showing the position of a 100 metre radius with the main entrance of the proposed game centre as the centre point of the circle. The applicant submitted such a survey sheet with a circle. I have that plan before me and the proposed amusement game centre is at the centre of the circle drawn. Those examining the application on behalf of the Commissioner discovered that whilst there was within the circle drawn no other amusement game centre, there were eight educational institutions, four of which were registered with the Education Department, and three of those were tutorial schools, so the Commissioner was content to exclude those as possible grounds for refusal. But there remained this school, the Shu Yan School, which is both a kindergarten and primary school with 700 children up to the age of 14 years. The entire school fell within the circle thus drawn. Hence the letter of 6 June 1999.

13. The applicant says in her affirmation, in support of this application for judicial review, that it was always her understanding that the center of the circle was to be taken from the educational establishment entrance and not from the amusement game centre and that a lot of people in the trade made such an assumption - contentions which are a little surprising given that the plan she submitted made no such assumption; and further that the very extensive representations made to the Commissioner by the applicant and her surveyors after the June letter made no such suggestion. Indeed, those representations used as their basis the fact suggested by the Commissioner that there was an educational institution within the radius of 100 metres of the proposed location. Instead, what the applicant sought was a modification or exemption from the 100 metre requirement.

14. The report submitted on the applicant's behalf listed a host of factors in favour of a modification or exemption, including the suggestion (rather an extraordinary one, I think) that it was totally undesirable to have a school in the area because it abutted King's Road which was a very busy area; that most of the students who attended that school were fetched from it by their parents and would not wander about near the school; that a survey had been conducted amongst some 510 pedestrians concerning the location of the game centre, and that the majority were in favour of the proposal. It then cited four examples of cases in which the Commissioner had granted a licence despite the fact that the centre in question, in each such case, was within 100 metres radius of existing educational institutions. There was also a letter sent to the Commissioner from the landlord in support of the applicant, pointing out that the company (Linky Chance) had already committed itself to a tenancy.

The appeal to the Board

15. The notice of appeal, which is dated 26 August 1999, gave as the grounds for the appeal that the Commissioner's decision was made without a proper hearing; that the Commissioner failed to adopt a rational policy in consideration of the application; failed to take into consideration relevant circumstances; and that the decision was arbitrary and without justification.

16. The Board gave reasons for its decision to dismiss the appeal. It concluded that the applicant had been given full opportunity to make representations. As for the application of the guidelines, the Board said that the Commissioner had used guidelines which are known to the trade and to each individual applicant, adding that :-

"... the Guidelines are strict and in some cases discretionary power had been exercised flexibly by the Commissioner, but only in exceptional cases. However, the Board was satisfied that in the present case, the Respondent had made the right decision by following the Guidelines since under the present circumstances the Hong Kong Shu Yan School and Kindergarten did fall fairly and squarely within the 100 meter rule;"

and further that :-

"The Appellant alleged that the proposed premises are NOT within a radius of 100 meter from an existing institution as it was only stated in the Respondent's letter of intention to refuse ... that 'the presence of one education institute in a distance of less than 100 metres from the proposed premises.'

However, Counsel ... submitted that the Respondent has been correct in measuring from the entrance of the proposed premises. ... the Board agreed in the submission ... that the Respondent had been correct in measuring from the proposed premises."

17. There was before the Board a statement of William Yam Yee Hing, who is the Chief Executive Officer (Licensing) of the Television and Entertainment Licensing Authority. He explained why it was that in four particular cases licences had been granted despite the fact that an educational establishment had been within, or partially within, the 100 metre radius. In the first case, only a very small part of the school touched the circumference of the 100 metre circle and, moreover, the licence of an existing amusement game centre was to be surrendered in place of the new premises, so that the new facilities would result in better management and less nuisance to the neighbourhood. In the second case, the new premises were for adults to replace a children's game establishment and, again, only part of the school was affected. In the third case, the school entrances were outside the radius and only half the school was, in any event, within the circle. In the fourth case, the educational institute was a kindergarten for 3 to 5 year olds who were taken to and from school by their parents or by buses and, in the circumstances, hardly candidates for admission into the centre.

18. As I say, the appeal was dismissed.

The Grounds

19. The notice of application seeks an order of certiorari to quash the decision of the Board as well as a declaration that on a true and proper construction of paragraph (g) of the Guidelines, the 100 metre radius was to be measured from the existing game centre or educational institution.

20. It is said under the title "Submissions", presumably intended to be the grounds of the application, that :-

1. the Board erred in applying a heavier burden than the one applied by the Commissioner in respect of cases falling outside the Guidelines, for the Board took the view that the Guidelines were to be applied strictly whereas the Board had done so flexibly;

2. rigid adherence to the Guidelines amounted to a failure to exercise discretion;

3. no adequate consideration was given to the substance of the applicant's case; that students of the school would by reason of their age not be permitted to visit the centre;.

4. that there was no evidence upon which the Board could have come to the view that amusement game centres were harmful to young persons. The finding was, it is suggested "Wednesbury unreasonable". Furthermore, the applicant was not given notice of the point and had no opportunity to answer it;

5. that the Board erred in law in that on the proper wording of paragraph (g) of the Guidelines, the 100 metre radius should be measured from the school. It made no sense to measure it from the premises entrance for that could always be relocated, or the premises cut down in size; and

6. that the Board failed to hold that the Commissioner had made up his mind before allowing the applicant to make her representations.

21. All these grounds, save one, have been abandoned. The sole point pursued by Mr Dykes - neither he nor his learned junior were responsible for drafting the notice of application - is the ground which alleges that the Commissioner (measuring from the premises rather than from the school) has misapplied his own policy; and that the Board has misconstrued that policy. I need only say that the abandonment of the other grounds was sensible, for there was nothing in them.

The issue, and the law

22. There was some hint, in the course of the submissions made by Mr Dykes, at the question of legitimate expectation arising from the published Guidelines. But I was not happy about him pursuing a ground not pleaded at all in the notice of application; and, in any event, the question arising from the Guidelines and the policy which they represent is one in respect of which there is no need to depend upon legitimate expectation. It is an issue which stands upon its own. The question which, therefore, arises is one quite divorced from any question of legitimate expectation, for where a policy has been misinterpreted, that misinterpretation may render the decision just as flawed as if the policy has been overlooked and altogether ignored. That is a point made in many a previous judgment. So, for example, in E.C. Gransden and Co. Ltd v. The Secretary of State for the Environment [1986] JPL 519, Woolf J, as he then was, said that the policy of the department concerning the obligations of a planning inspector was a matter to which the decision-maker had to have regard and that :-

"...... In order to give effect to that approach it [is] essential that the policy [is] properly understood by the determining body. If the body making the decision [fails] properly to understand the policy then the decision would be as defective as it would be if no regard had been paid to the policy."

- a case cited by Sedley J, as he then was, in R v. Secretary of State for the Home Department, ex parte Urmaza (11 July 1996, unreported) in which Sedley J added, at page 7, that such an approach was an approach which stood on its own, in the sense that it could be adopted without resort to the doctrine of legitimate expectation. He also said :-

"There is a coherent line of authority ... to the broad effect that a policy means what it says, and that its meaning can ordinarily be established by the court and the decision-maker be held to it."

and (at page 8) that :-

"... the meaning of the policy cannot be a matter for the Secretary of State to decide subject only to the broad limits of rationality. If, as is nowadays almost always the case, it is couched in ordinary English, it is not open to the Secretary of State to give it other than its plain and ordinary meaning. ..."

23. In this regard, I note that in R v. Secretary of State for the Home Department, ex parte Lancashire Police Authority [1992] COD 93, it was held that whilst it was not necessary or proper to construe a policy in a way in which an act of parliament or a statutory instrument would be construed, it was necessary to construe it simply in the way in which an educated person acquainted with the factual context would construe it, by giving to it a common sense meaning and without resort to any such legal rule.

24. Finally, in R v. Ministry of Defence, ex parte Walker [1999] 1 WLR 1209, 1216, Auld LJ said that :-

"Subject to what I shall say in a moment, the true meaning of the policy is a matter for the court to decide. Misinterpretation by the ministry of its own policy may render its decision defective in the same way as would ignoring it: see Reg. v. Criminal Injuries Compensation Board, Ex parte Schofield [1971] 1 W.L.R. 926; Reg. v. Criminal Injuries Compensation Board, Ex parte Ince [1973] 1 W.L.R. 1334; E. C. Gransden & Co. Ltd. v. Secretary of State for the Environment [1986] J.P.L. 519 and Horsham District Council v. Secretary of State for the Environment [1992] 1 P.L.R. 81. However, as Mr. Sales submitted, if the policy is not as clearly or fully expressed as it might be, there is nevertheless a spectrum of meaning as to what might constitute 'military activity,' and the court should respect the ministry's evaluation of it unless it is irrational. He cited Lord Mustill, with whom the other members of the Appellate Committee agreed, in Reg. v. Monopolies and Mergers Commission, Ex parte South Yorkshire Transport Ltd. [1993] 1 W.L.R. 23, 32:

'the criterion so established may itself be so imprecise that different decision-makers, each acting rationally, might reach differing conclusions when applying it to the facts of a given case. In such a case the court is entitled to substitute its own opinion for that of the person to whom the decision has been entrusted only if the decision is so aberrant that it cannot be classed as rational: Edwards v. Bairstow [1956] A,C, 14.' (Emphasis added.)"

Argument

25. Mr Dykes' point was a narrow one, but not the less cogent for that. He says that the words mean what they say and cannot reasonably be construed in any other way, namely, that the radius is to be drawn from the educational establishment. The evidence of the applicant is that that has always been her understanding and the understanding of others in the trade. I have already expressed surprise at that contention for reasons I have given, but Mr Dykes says that the fact that the applicant submitted plans on the footing that the centre of the circle was to be taken from the entrance to the games premises is merely the product of an administrative requirement, and does not answer the question which arises in respect of the plain meaning of the stated policy.

26. He points out that the issue before me has real practical implications. I have been shown a plan of the area in which a number of circles have been drawn, using the school as the centre of the circle, and that plan shows that if the school is used as the centre of the circle, only part of the applicant's premises are caught within the circumference, so that it would be open to her to move the entrance so as to take it outwith that circle, and would enable her, further, to pray in aid the fact that not the entire games premises are caught. All of this has significant financial implications for the applicant, or rather for the company behind her, who have rented these premises and have spent a great deal upon them.

27. Mr Fitzpatrick for the respondent accepts that the essential issue is whether the Commissioner's interpretation of the policy as stated is one that falls within a permissible range of interpretations of paragraph (g) of the Guidelines. He contends that the policy as stated allows of more than one interpretation, for it is not as clearly or fully expressed as it might be. There is, he says, no indication in paragraph (g) of the point from which the radius is to be measured - is it from the entrance of a school or from its curtilage, or from where? And what is to happen if but part of a game centre is within 100 metres of the school? That, too, is not stated. In other words, he says, there are a variety of factors not stated in the Guidelines, and it is for the Commissioner to fill in the gaps as he sees fit. So, too, the argument goes, it makes practical sense for the policy to be so interpreted as to permit of one circle to be drawn and only one, from which all existing game centres and all educational institutions can be identified; rather than having a host of circles on one plan, starting from existing game centres and from educational institutions.

Analysis

28. I have considerable sympathy with Mr Fitzpatrick's submission. It is indeed easier to cater for just one circle and to start from the entrance of the proposed game center. But, as against that, entrances of proposed game centres can be moved, whereas existing schools cannot; a requirement to draw a number of circles is not impracticable; and the fact is that the language of the policy could hardly be more clear. Putting aside any question of an exercise in statutory interpretation, the educated person, even acquainted with the factual context, who, looking at the policy, is asked : from where is the radius to be drawn? - is bound to say, is he not :-

"Well, it says so, right there in paragraph (g), in terms - 'from an existing amusement game centre or educational institution'." (Emphasis added)

It is a question of plain English. It is altogether a more simple exercise than that which faced the court in ex parte Walker, where the court had to grapple with what might constitute "military activity"; and even more simple than the phrase which was before the court in R v. Criminal Injuries Compensation Board v. Schofield [1971] 1 WLR 927, where the Court of Appeal held that the plain and ordinary meaning of a paragraph in a scheme provided by the Criminal Injuries Compensation Board, entitling persons to ex gratia compensation where the person suffered personal injury directly attributable to an arrest or attempted arrest of an offender, did not, as a matter of plain English or ordinary meaning, restrict those entitled to the person affecting the arrest or attempting to affect the arrest.

29. The plain meaning of paragraph (g) as promulgated in 1988 and subsequently used, and which throughout has said to have been the policy applied is further made evident when one compares it with the terms of the policy promulgated in May 2000. Paragraph (g) has been changed, so that the relevant part of the Guidelines now reads :-

"An Amusement Game Centre Licence will not normally be granted unless the Licensing Authority is satisfied that :

...

(g) existing amusement game centre(s) or educational institution(s) is/are not within a radius of 100 metres from the main entrance of the proposed amusement game centre;

..."

Looking at the one and then the other, shows that the policy in 1988 said something quite different from the policy in 2000; and that, all along, it is the meaning now expressed in the May 2000 document that has been applied by the Commissioner.

30. It is said by Mr Fitzpatrick that paragraph (g) of the 1988 policy left the matter incomplete, in the sense that interpreted according to its suggested plain meaning would result in no one knowing from where at the existing game centre or at the educational establishment the centre of the circle was to be taken. But that fact does not alter the plain meaning of the guideline. It is simply a matter for the Commissioner to complete, giving flesh to the policy and in applying it, and no one could complain about such decision as he took, unless it were irrational. And in coming to a conclusion about the plain meaning of the words used, let it not be forgotten that the 1988 document was not some hastily or loosely drawn document. There had, as we have seen, been a policy in 1984 and it was amended, but its amendment was only made after extensive consultation with District Boards, and also with the approval of the Executive Council. I think that one can safely assume, though I have not seen the relevant Executive Council memorandum, that the words of the policy were placed before that body. I do not see why the Commissioner should not be bound by the policy thus expressed.

31. In coming to its conclusion, the Board said that it agreed with counsel's submission made at the appeal haring that if the measurement had to be made from the educational institute instead of the proposed amusement game centre, there would be tremendous difficulties when there were numerous educational establishments "and the problem would arise as to which educational institution was to be measured from". The difficulty with this approach of the Board, is that the fact that the policy as expressed would present more paper work in that a number of circles might have to be drawn, does nothing to change the plain meaning of the policy, and, in any event, the policy as it presently is expressed nevertheless requires identification on a plan of all educational institutions regardless of their number. I am driven to the conclusion that the Board has erred in so far as it has held that the Commissioner did not deviate from the promulgated policy. I recognize that the true merits of the matter do not sit terribly well with this conclusion, in so far as the approach actually applied is the more sensible one, and in so far as it is one that has been applied for so long. But that is not the key point. The key point is that the policy, according to its plain meaning, has not been applied and, accordingly, the decision of the Board should, subject to the question of this court's discretion to withhold the remedy, be quashed.

Remedy

32. Mr Fitzpatrick has argued that, were I to find against the Board on the question of the interpretation and application of the policy, relief should nonetheless be withheld on the footing that the grant of relief will in the event make no difference. This is because even if the circle were redrawn from the entrance of the school, part of the building which houses the proposed premises will be caught within the circle; and he points out that there is also an existing amusement game centre in Marble Road from the entrance of which part of the China United Centre would fall within a 100 metres radius. That existing game centre is not within a circle whose centre is at the entrance of the applicant's premises.

33. I do not think that it is appropriate for this court to come to that conclusion. It may be - I know not - that the application considered in accordance with the former policy, properly interpreted, will fail again. But I am not in a position to say that that is inevitable. In such a case, only part of the applicant's premises are "cut" by the circle; the circle drawn from the school as well as the circle drawn from the existing amusement game centre; so that the applicant would be able to put forward a case that her application should receive the same sympathetic consideration as did other applications in which only part of the buildings at play have come within the circle; and, what is more, it would be open to the applicant to propose another entrance further away from the school. I am not in a position to judge the matter. Only the Commissioner is. So I will not refuse relief.

34. It has been recognized that there is an impracticality in granting relief to quash only the Board's decision. It makes little sense for the matter to go back to the Board for reconsideration where the new factors at play will be many. The applicant may well wish to put forward further submissions based upon the new approach that the (former) policy requires. Alternatively, if, despite the new approach, the Commissioner were still minded to refuse the application, he would wish to give the applicant an opportunity to have her say about such objections as he now has, and they will have to be considered. This is not an appropriate exercise for the Board. There is power in the Ordinance for the Board to remit the matter to the Commissioner. If, as seems to be the case, that is inevitable, then what is the point of remitting the case to the Board, merely so that it can pass it back to the Commissioner? The most sensible course is to quash the decision of the Commissioner as well, that is, the decision of 9 August 1999. But the notice of application does not include a challenge to that decision. Mr Dykes does not know why that was not done; perhaps because it was out of time and it could not be challenged in time, since the applicant needed first to exhaust such statutory avenues of appeal as were available, namely, the appeal to the Board. In the event, the most practical course is for me to grant leave to the applicant to amend her application for leave to apply for judicial review to challenge the decision of the Commissioner dated 9 August 1999 whereby he refused to grant the application for an amusement game centre's licence; to extend the time for making that application until the date of this order; and to grant the applicant leave to apply for judicial review of that decision. I make such orders accordingly.

Result

35. For the reasons that I have given, I shall order that the decisions of the Commissioner dated 9 August 1999 and of the Board dated 20 March 2000 be removed forthwith to this court and be quashed. The applicant's application for a licence is remitted to the Commissioner with the direction of this court to reconsider the application in accordance with the findings of this court. The application for a declaration is not pursued, and none shall be made.

36. There will be a costs order nisi that the respondent will pay to the applicant her costs of and occasioned by this application for judicial review, to be taxed if not agreed, save for the costs of and in connection with the application to amend the application for leave to include the decision of the Commissioner, which costs will be to the respondent in any event.