WONG SHEUN LING v. ADMINISTRATIVE APPEALS BOARD AND ANOTHER

HCAL 2817/2018

[2020] HKCFI 323

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 2817 OF 2018

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J U D G M E N T

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INTRODUCTION

1.  This is the rolled-up hearing of an application for judicial review of:

(1)     the decision of the Administrative Appeals Board (“the Board”) on 21 September 2018 to uphold the decision of the Public Officer appointed by the Secretary for Home Affairs (“the Secretary”) dated 25 September 2017 refusing the Applicant’s application for a mahjong/tin kau licence (“MJTK Licence”) in respect of the premises at G/F, 171 Shau Kei Wan Main Street East, Hong Kong (“the Premises”); and

(2)     the policy of the Secretary for the grant of MJTK Licence contained in a document titled “Brief Policy Guidelines on Issue of Mahjong/Tin Kau Licence” (“the Guidelines”).

BASIC FACTS

2.  On 23 December 2015, the Applicant submitted an application (“the Application”) to the Public Officer for a MJTK Licence in respect of the Premises.

3.  By a letter dated 28 April 2017, the Public Officer informed that Applicant that he was minded to refuse the Application on the following grounds:

(1)     the proposed location was not suitable for the establishment of a mahjong/tin kau parlour because it was in close proximity to 4 educational institutions; and

(2)     there were strong local objections to the Application,

and invited the Applicant to make representations within 14 days.

4.  The names and addresses of the 4 educational institutions were given in an Annex to the Public Officer’s letter of 28 April 2017, as follows:

(1)     赤城補習班 at Flat C, 3/F, Ming Fai Building, 20-22 Kam Wa Street, Shau Kei Wan, Hong Kong;

(2)     新世紀硯士教室 (Mastery Education Centre), at G05 & G08, Galaxy Plaza, 2 Mong Lung Street, Shau Kei Wan, Hong Kong;

(3)     雅然中英文幼稚園 (Wise Le Sage Anglo-Chinese Kindergarten), at M/F, Galaxy Plaza, 2 Mong Lung Street, Shau Kei Wan, Hong Kong; and

(4)     艾莎國際中學 (Carmel School Association Elsa High School), at 460 Shau Kei Wan Road, Hong Kong.

5.  In a further letter dated 17 May 2017, the Public Officer provided to the Applicant’s solicitors a summary of the local consultations conducted by the relevant District Officer to assess the local reaction to the establishment of the proposed mahjong parlour.  The consultees included (i) District Council Members, (ii) the Aldrich Area Committee, (iii) the Owners Incorporation of the building in which the proposed mahjong parlour was located, (iv) the Owners Incorporations / Mutual Aid Committees / Property Management Agencies of 39 nearby buildings, (v) residents / owners / tenants / occupiers of 3 nearby buildings, (vi) 4 educational institutions, (vii) the Owners Incorporations / Mutual Aid Committees of 5 nearby buildings, (viii) trade associations / religious and educational institutions / institutions for babies, youth and the elderly, and (ix) three persons who claimed to be residents of Shau Kei Wan Main Street (the consultees in (vii), (vii) and (ix) were outside “the 100-metre Circle”).  The results of the local consultations showed that:

(1)     none of the consultees supported the establishment of the proposed mahjong parlour;

(2)     2 consultees had no comment;

(3)     20 consultees objected to the establishment of the proposed mahjong parlour; and

(4)     83 consultees did not respond.

6.  The reasons given by those consultees who objected to the establishment of the proposed mahjong parlour included the following: many schools and educational institutions in the area; the proposed mahjong parlour might attract similar business operators to the area; objections from locals; adverse impact on the peaceful environment; encouragement of gambling and attraction of gamblers; mahjong clubs already existed in the area; not enough parking spaces in the area; noise and smoking problems and strong light; law and order concerns; and bad influence on students.

7.  On 13 June 2017, the Applicant’s solicitors wrote to the Public Officer seeking to address the 2 grounds given by the Public Officer for intending to refuse the Application.

8.  On 25 September 2017, the Public Officer gave notice (“the Notice”) to the Applicant that the Application was refused (“the Public Officer’s Decision”) on the following grounds:

(1)     the proposed location was not suitable for the establishment of a mahjong/tin kau parlour due to its close proximity to 3 educational institutions; and

(2)     there were strong local objections to the Application.

9.  In an accompanying letter to the Applicant’s solicitors dated 25 September 2017, it was stated that the Public Officer had the following comments on the Application:

(1)     A site visit had been conducted, and it was confirmed that 赤城補習班 had ceased operation (hence the reference to only 3 educational institutions being in close proximity to the proposed mahjong parlour in the Notice).

(2)     The allegation that there was no real risk that students of Mastery Education Centre and Wise Le Sage Anglo-Chinese Kindergarten would go near the proposed premises was not accepted.

(3)     Carmel School Association Elsa High School was a secondary school on the same side of the street of the proposed premises.  Its students might not all be Chinese, but they were children and youths to be protected according to the Guidelines.

(4)     There were strong local objections from parties within 100 metres from the Premises.

(5)     No sympathetic consideration could be given as the Application was not to relocate an existing mahjong/tin kau parlour while the relevant licence was still in force.

10.  On 13 October 2017, the Applicant lodged a Notice of Appeal against the Public Officer’s Decision on the following grounds:

(1)     the Public Officer erred in deciding that the proposed location was not suitable for the establishment of a mahjong/tin kau parlour due to its close proximity to 3 educational institutions; and

(2)     the Public Officer erred in deciding that there were strong local objections to the Application.

11.  On 11 May 2018, the Board (constituted by Dr P Y Lo as Chairman, and Mr Cheng Wai-lung and Miss Ho Yuen-han as Members) heard the Applicant’s appeal against the Public Officer’s Decision (“the Appeal”). On 21 September 2018, the Board gave a written decision (“the Decision”) dismissing the Appeal.

12.  On 10 December 2018, the Applicant made the present application for leave to apply for judicial review of the Decision.  At §43 of the Form 86, the Applicant advanced the following 3 grounds in support of the application:

(1)     The Relocation Factor in the Guidelines was Wednesbury unreasonable in excluding a “relocation” case where, even though an applicant did not have a licence at the time of the application, the applicant was forced to relocate through no fault of his/her own and had been persisting energetically and with reasonable promptness in finding alternative premises to relocate.

(2)     The Board failed to take into account relevant considerations, took into account irrelevant considerations and/or was otherwise Wednesbury unreasonable in dismissing the Undertakings (see §35 below) as ineffective in alleviating the policy concerns of protection of children and youths from the bad influence of gambling under the Location Factor in the Guidelines.

(3)     The Board took into account irrelevant considerations in assessing the Local Reaction Factor and/or unlawfully fettered its power to remit the case to the Public Officer for reconsideration on that issue.

THE STATUTORY/ADMINISTRATIVE REGIME FOR THE ISSUE OF MJTK LICENCES

13.  Section 3(1) of the Gambling Ordinance, Cap 148 (“the Ordinance”), provides that save as provided in subsections (2) to (8), gambling is unlawful.  Subsections (2), (3), (4), (5), (7) and (8) are not relevant to the present case.

14.  Subsection (6) of Section 3 of the Ordinance provides that gaming is lawful if -

(a)     the game is one in which mahjong or tin kau tiles are used; and

(b)     it is played in premises licensed for the purpose under section 22.

15.  Section 22(1)(b) of the Ordinance provides that the public officer appointed by the Secretary may license premises for the playing therein of games in which mahjong or tin kau tiles are used.  Section 22(2)(b) provides that a licence under subsection (1) may on payment of the prescribed fee be granted or renewed for a period of 12 months.

16.  For the purpose of administering the licensing regime under Section 22(1)(b) of the Ordinance, the Secretary has published the Guidelines embodying his policy for issuing MJTK Licences.  §2 of the Guidelines, under the sub-heading “Points for consideration before the issue of a Mahjong/Tin Kau Licence”, states as follows:

“Each application will be considered on its own merits. However, the public officer will consider major factors listed in (i) to (vi) below.

(i) Cogent need for a lawful gambling outlet

Government’s policy is that a mahjong/tin kau parlour (MJP) should, as a general rule, be allowed to be set up only if a cogent need for such an outlet is established.

(ii) Suitability of the applicant

The applicant should be found suitable for managing a MJP.

(iii) Suitability of the proposed premises

The proposed premises should be found suitable for use as a MJP from structural and means of escape points of view, as well as in terms of the lease of the land.

(iv) Suitability of the proposed location

The location of the proposed premises should be found suitable. As a general rule, the proposed MJP should not be located within a pure residential neighbourhood or in close proximity to an educational or religious institution or an institution or facility catering to children and youths. Besides, the establishment of the proposed MJP should not result in an undue concentration of MJPs in the locality.

(v) Local reaction

The public officer would assess the local reaction to the establishment of the proposed MJP and the potential objection if the application is approved, with the assistance of the relevant District Officer.

(vi) Sympathetic consideration for a ‘relocation’ case

An application may be considered with some degree of sympathy if a licensee relocates his premises to a site within the immediate neighbourhood, if the application is made when his licence is still in force, and if the new application does not lead to any increase in the number of gaming tables. In such cases, however, the other considerations as stated under these guidelines will continue to apply.”

17.  The “major factors” referred to in §2(iv), (v) and (vi) of the Guidelines will hereafter be referred to as the “Location Factor”, “Local Reaction Factor” and “Relocation Factor” respectively.

18.  Two observations may be made about the Guidelines at this stage.  First, it is clear, from §2 of the Guidelines, that each application should be considered on its own merits.  The 6 factors listed under that paragraph are “major” factors only, and should not be regarded as being decisive of an application.  Second, even if an application is a relocation case within the meaning of §2(vi) of the Guidelines, it only means that the application may be considered with “some degree of sympathy”.  This factor does not of itself override the other factors, as made clear by the last sentence of that sub-paragraph (“In such cases, however, the other considerations as stated under these guidelines will continue to apply”).

19.  When considering how these factors should be applied to an application for a MJTK Licence, it is also necessary to take into account the Government’s overall policy on “controlled gambling”, as explained by Cheung JA in Li Wai Hung Cesario v Administrative Appeals Board (CACV 250/2015, 15 June 2016), at §7.21:

“My view is that the various factors stated in the Guidelines were interwoven and built upon the Government policy on ‘controlled gambling’ which is to strike a compromise on the polarising views on the demand for gambling and the undesirable aspect of it. As the Board recognized, first, while there is always a demand for gambling, the conduct of gambling activities should be authorised and regulated as unregulated gambling activities can lead to a number of social problems and become a potential source of income for triad and criminal activities. Second, since it is impossible to reconcile the different views in the community on the extent to which authorised gambling outlets should be allowed to exist, a compromise approach is to allow only a limited number of authorised gambling outlets, the purpose of which is to satisfy public demand for gambling which would otherwise turn to illegal operators.”

20.  It is thus clear that the Government’s policy on gambling is not intended to be “business-facilitating”.  The Government permits authorised gambling outlets to exist only as a compromise between the public demand for gambling and the undesirable social problems and related illegal activities arising from gambling.

21.  Section 22(5B) of the Ordinance provides that any person aggrieved by a decision of the Public Officer appointed by the Secretary made in respect of him under that section may, within 28 days after receiving notice of the decision, appeal to the Board.  The nature of an appeal before the Board is by way of rehearing on the merits, and not simply by way of review.  In other words, the Board’s jurisdiction is appellate, and not merely supervisory (see Li Wai Hung Cesario, supra, at §6.1).

GROUND (1): THE RELOCATION FACTOR IN THE GUIDELINES IS WEDNESBURY UNREASONABLE

22.  The factual foundation of the Applicant’s argument under Ground 1 is that she was previously an operator of a mahjong parlour in the neighbourhood of the Premises, and was forced to cease that business through no fault of her own, and has made persistent effort to open another mahjong parlour.  The details of the “relocation history” of the Applicant’s mahjong parlour is set out in §44 of the Form 86, as follows:

(1)     The Applicant was one of the shareholders of Wing Hing Mahjong Game Company (“Wing Hing”).

(2)     Wing Hing originally carried on the business of a mahjong parlour at Nan On Lane in Shau Kei Wan between 1994 and 2005, but the business had to close in 2005 since the premises were repossessed for redevelopment[1].

(3)     In 2008, Wing Hing was able to find premises at 299, Shau Kei Wan Road to resume operation under a MJTK Licence granted for those premises, but had to cease operation again since the premises were repossessed for redevelopment[2].

(4)     In 2009, the Applicant submitted an application for a MJTK Licence in respect of some other premises in North Point, but that application was refused in September 2009[3].

(5)     In 2015, there was yet another application for a MJTK Licence for the premises at 279, Shau Kei Wan Road, but that application was also refused in February 2015[4].

(6)     The Application, submitted on 23 December 2015, was the Applicant’s 4^th attempt to relocate the original mahjong parlour that had ceased business in 2005.

23.  There are some discrepancies between the details of the “relocation history” as set out in §44 of the Form 86 and the information set out in a document titled “Four Previous Mahjong/Tin Kau Licence Applications” (Item 44 attached to the Public Officer’s Statement dated 27 November 2017 before the Board).  However, nothing much turns on those discrepancies.

24.  The Applicant says that she has been trying to find suitable premises in Shau Kei Wan for relocation and has made 3 applications since the last (briefly) operating premises were repossessed in 2008, and has “persisted energetically and with reasonable promptness to find alternative premises on each occasion”, and thus it would be “harsh” to deprive her of sympathetic consideration even though she has been doing her best in trying to relocate her previous mahjong parlour (see §54 of the Form 86).  In §43a of the Form 86, the Applicant argues that the Relocation Factor is Wednesbury unreasonable because it excludes a case where even though an applicant did not have a licence at the time of the application, the applicant was forced to relocate through no fault of his/her own and has been persisting energetically and with reasonable promptness in finding alternative premises to relocate.

25.  According to §2(vi) of the Guidelines, one of the conditions which has to be met before a case can be regarded as a “relocation” case qualifying for “some sympathetic consideration” is that the application is made when the existing licence is still in force (“the Licence in Force Requirement”).  As earlier noted, a MJTK licence is, subject to renewal, generally in force for a period of 12 months only.

26.  According to the evidence filed on behalf of the Secretary[5], the Licence in Force Requirement -

“helps ensure that generally sympathetic consideration would not be given to an application for MJ/TK licence if the applicant has already ceased operating the MJ/TK parlour within the immediate neighbourhood, which makes its application no different from a fresh application as there is no MJ/TK parlour operated by the same applicant in the immediate neighbourhood at the time of the application. The Licence in Force Requirement under the Relocation Factor helps differentiate a ‘relocation’ case from other fresh application.”

27.  It is, in my view, obvious that a person who has, until recently, been operating a mahjong parlour in the immediate neighbourhood of the proposed premises for a new mahjong parlour should be entitled to a more sympathetic consideration of his application for a new MJTK Licence than someone who has never operated a mahjong parlour in a nearby location or whose operation in a nearby location has already ceased for a long time, and that the closer in time between the previous operation and the current application the stronger his/her claim for a new MHTK Licence being issued to him/her.  The imposition of a temporal requirement between the previous operation and the current application for a new MJTK Licence before sympathetic consideration is given to the application is, I consider, rational and reasonable.  In so far as the fixing of the actual temporal requirement is concerned, there can be no objection to the drawing of a bright line even through there would necessarily be some degree of arbitrariness in the line being chosen by the Secretary.  In my view, the court should be slow to interfere with such decision of the Secretary.  In the present case, the line chosen by the Secretary, namely, the Licence in Force Requirement, seems to me to fall within the permissible range which a reasonable decision-maker may choose, and cannot be said to be Wednesbury unreasonable.

28.  In support of his argument under Ground 1, Mr Philip Dykes, SC (for the Applicant) relies on the judgment of Seagroatt J in Leung Kam Yung Ivy v Commissioner for Television and Entertainment Licensing [2001] 2 HKC 555.  That case concerned an application made in 1999 for a MJTK Licence in respect of new premises by an applicant whose previous operation of a MJTK parlour ceased in late 1994 as a result of the decision of the landlord not to renew the lease of her old premises.  The application for the new MJTK Licence (being the 3^rd application since the cessation of the old business) was refused by the Commissioner on the grounds of (i) absence of “cogent need”, and (ii) “undue concentration of mahjong or tin kau parlours in the district”, and the refusal was upheld by the Board on the absence of “cogent need” ground only. The applicant then applied for judicial review of both the decisions of the Commissioner and the Board.  One of the issues raised in the application for judicial review was whether the Commissioner made an error of fact that the repossession of the applicant’s old premises was due to non-payment of rent (an issue which had in fact already been resolved), which led to the view taken that the application should not attract sympathetic consideration.  The relevant policy in force at that time, in the form of a memorandum by the Secretary dated 18 April 1990, stated, inter alia, that “… if a licensee has to relocate his premises at no fault of his own (e.g. demolition) the application could be considered with some degree of sympathy particularly if the new premises is within the immediate neighbourhood and if the new application does not lead to an increase in the number of gaming tables”.  The learned judge considered that there was a material misdirection on the factual basis that the decision to cease the previous operation was due to the “fault” of the applicant, whereas the closure of the business was in fact the result of the landlord’s decision not to renew the relevant lease.  The learned judge then made the following observation at 566C-E (which is heavily relied upon by Mr Dykes):

“As far as the effluxion of time is concerned it must be a factor in deciding for how long an application can be regarded as a relocation for the purposes of sympathetic consideration. But account must be taken of the time and expense involved in finding suitable premises and having them assessed by the various authorities. If there is a substantial delay between making applications so as to suggest a lack of serious endeavour, that would be a weighty favour in deciding for how long the element of ‘relocation’ could hold good. This applicant has made three applications. I find it difficult to conclude that she has not persisted energetically and with reasonable promptness to find alternative premises on each occasion and it would be harsh to say that such ‘sympathetic consideration’ should evaporate in these circumstances. It is not without significance that the Commissioner (CTEL) in his memorandum to the Secretary for Home Affairs thought that she was still entitled to it.”

29.  Three points may be made in respect of this passage in the judgment of Seagroatt J:

(1)     the Licence in Force Requirement was not part of the relevant policy at that time;

(2)     the learned judge was of the view that the “effluxion of time” was a factor in deciding for how long an application can be regarded as a relocation for the purposes of sympathetic consideration; and

(3)     the above observation of the learned judge should not be read as a statement of law that an application should necessarily be given some sympathetic consideration in a relocation case if he/she has persisted energetically and with reasonable promptness to find alternative premises.

30.  Mr Dykes argues that the Licence in Force Requirement does nothing to “differentiate a ‘relocation’ case from other fresh applications”, as there is “no consideration of, for example, the length of the licence period, the time it may take to prepare for a new licence application, and the promptness in which the applicant acted”[6], and that it does not import any consideration of “good reasons” for any delay in bringing a relocation application, and it is “overly prescriptive and inflexible so as to constitute a real fetter on discretion and/or it is irrational because it does not focus on what really matters, ie demonstrating genuine efforts to secure suitable premises”[7]. Mr Dykes also says that since a MJTK Licence would generally last for 12 months only, it is exceedingly harsh and difficult to require a person, who is suddenly forced to relocate his/her mahjong parlour (perhaps even late into that 12-month period, eg having been served with one month’s notice from a landlord), to be able to complete the process of finding suitable premises and then having them assessed by various authorities within such a limited time frame[8].

31.  In my view, these arguments fail to take into account the fact that although the Relocation Factor is listed in §2 of the Guidelines as one of the 6 major factors for consideration of an application for a MJTK Licence, the overriding principle is that each application will be considered on its own merits.  The Guidelines do not preclude altogether any sympathetic consideration being given to a “relocation” case where the applicant has demonstrated genuine efforts to find alternative premises in the immediate neighbourhood of the original mahjong/tin kau parlour even though the application is made after the expiry of the original licence, or where the circumstances make it practically impossible for the applicant to make the application during the currency of the original licence.  As a matter of fact, although the Board, correctly in my view, held that the Relocation Factor did not apply to the Applicant’s case[9], it nevertheless took into account the historical circumstances of the Applicant’s case and gave “some weight” to them.  At §49 of the Decision, the Board stated thus:

“Given that this Hearing Board is obliged to determine this administrative appeal by rehearing on the merits of the Appellent’s application, this Hearing Board accepts that the historical fact that since the previous mahjong parlour licensed in the Appellant’s name ceased operation in December 2005 due to redevelopment, she had made four applications in respect of premises in North Point and Shau Kei Wan (including one that did not commence business because the proposed premises became subject of redevelopment) is a relevant matter and some weight is to be given to it. This Hearing Board reminds itself that the application is for the establishment of a mahjong parlour of eight gaming tables and therefore at most 32 players at any one time”.

The Board’s approach cannot be faulted.

32.  I would add that, in considering the rationality of the Relocation Factor, it would be wrong to focus excessively on the harshness of its application on an applicant on the facts of any given case because, as earlier noted, the Government’s overall controlled gambling policy is not intended to be “business facilitating”.

33.  The Applicant also argues that the Licence in Force Requirement “fails to treat like situations alike”[10].  It seems to me, however, that whenever a bright line is being drawn for the purpose of determining qualification for some benefit, it is inevitable that different treatment would be accorded to a person falling on one side of the line and another falling on the other side of the line, even though their factual circumstances may be close, or similar, to each other.  Such consideration does not make it impermissible to draw the line in the first place.

34.  In all, I reject the argument that the Relocation Factor in the Guidelines is Wednesbury unreasonable.

GROUND (2): THE BOARD’S DISMISSAL OF THE UNDERTAKINGS AS INEFFECTIVE IN ALLEVIATING THE POLICY CONCERNS OF PROTECTION OF CHILDREN AND YOUTHS FROM THE BAD INFLUENCE OF GAMBLING UNDER THE LOCATION FACTOR IN THE GUIDELINES WAS WEDNESBURY UNREASOANBLE

35.  In support of the Application, the Applicant gave various undertakings (“the Undertakings”), which were recorded in §9 of the Decision:

“(1) Erect new concrete block walls in order to block the front of the Premises facing Shau Kei Wan Main Street East. In other words, the Premises would not be accessible through the shop front on Shai Kei Wan Main Street East. Customers and staff alike would have to gain entry to the Premises from the rear lane, walking around the corner and entering the rear lane from Kam Wah Street.

(2) Not to put up any advertising signs along Shau Kei Wan Main Street East, such that the public (not to mention school children) would not even notice the existence of a mahjong parlour whilst walking along Shau Kei Wan Main Street East.

(3) Comply with the necessary conditions relating to sound proofing (including the installation of sound proofing systems, and the purchase of electrical mahjong tables, which would serve to significantly reduce the level of noise), business hours and means of admission and security.”[11]

36.  The Board dealt with the Undertakings at §§50 and 51(6) of the Decision:

(1)     At §50, the Board stated -

“Also, this Hearing Board takes into account the undertakings made by the Appellant to this Hearing Board in her response of 24 January 2018 that new concrete block wall would be erected in order to block the front of the Premises facing Shau Kei Wan Main Street East with the consequence that customers and staff alike would have to gain entry to the Premises from the rear lane; that no advertising signs would be put up along Shau Kei Wan Main Street East; and that conditions relating to sound proofing, business hours and means of admission and security would be complied with. This Hearing Board considers these undertakings to be arrangements seeking to address and mitigate against the ‘major factors’ of close proximity of the Premises to educational institutions and adverse local reaction to the establishment of a mahjong parlour in the neighbourhood.”

(2)     At §51(6), the Board stated -

“Turning to the Appellant’s undertakings to block off the shop front and not putting up advertising signs at Shau Kei Wan Main Street East, although this Hearing Board appreciates the Appellant’s positive intent in this regard, this Hearing Board questions how effective these measures will be objectively and realistically, bearing in mind that the proposed mahjong parlour still requires some means of promotion for the business to commence and maintain viability and that some form of signage is still required to enable customers to find the entrance to the mahjong parlour. Once the business is in operation, given that the prescribed business hours of the mahjong parlour of between 12 noon and 12 midnight do overlap with the usual schooling hours of the three specified educational institutions, it is reasonable to consider and this Hearing Board does consider that the strong policy concerns of protection of children and youths from the bad influence of gambling as they wander and explore the neighbourhood, which underlies the ‘general rule’ above, remain applicable and adverse to the Appellant’s case.”

37.  Two main arguments are advanced by Mr Dykes under Ground 2:

(1)     Matters of “distance”, “accessibility” and “geography” are relevant in the consideration of whether the proposed premises are in “close proximity” to educational institutions for the purpose of the Location Factor.  However, the Board appeared to have considered the issue of “close proximity” in terms of accessibility without taking into account the 1^st Undertaking, the effect of which was that the proposed mahjong parlour would not in fact be accessible through the shop front on Shau Kei Wan Main Street, which was clearly relevant to and affect the accessibility of the Premises from the educational institutions.  Also, by relegating the Undertakings to consideration only after deciding that there was “close proximity” and that the “general rule” applied, the Board failed to take into account a relevant consideration in its assessment of whether the “general rule” applied at all in the first place.[12]

(2)     The Board took into account an irrelevant consideration in assessing the effectiveness of the Undertakings, namely, that despite the Undertakings the proposed mahjong parlour “still requires some means of promotion”, and that “some form of signage is still required”.  The proposed mahjong parlour is small in scale and promotion of such a form of business may well be mainly by word of mouth and the business may be viable without the need for conspicuous promotion.  Also, the Board did not discuss what form, size or location of signage might be required, all of which would affect whether children or young people would realistically be distracted by it.  The “means of promotion” referred to by the Board stem from the Board’s unfounded assumptions about the modus operandi of the Applicant’s yet-to-exist parlour.[13]

38.  In respect of the argument at §37(1) above, the Board referred to the judgment of Zervos J (as he then was) in Li Wai Hung Cesario v Administrative Appeals Board [2015] 2 HKLRD 575, at §60, and correctly understood that the concept of “close proximity” involved not just a consideration of the distance between the proposed parlour and the educational institutions, but also considerations of accessibility and geography[14], and that each case depended upon its own particular circumstances.  The Board, “having considered matters of distance, accessibility and geography”, came to the conclusion that the 3 educational institutions were in close proximity to the Premises[15]. The Board then referred to a series of authorities to the effect that “as a general rule”, if the proposed parlour was in close proximity to an educational institution, the decision-maker should refuse the application for a MJTK Licence, unless it found in the consideration of other major factors and in other matters it considered relevant to the application that good and sufficient reasons outweighed the “general rule”[16].  The Board considered, correctly in view, that the Undertakings were put forward with a view to addressing and mitigating other major factors, including the Location Factor, but was not impressed by the effectiveness of the proposed measures.  I consider it matters little whether the Board took into account the Undertakings as part and parcel of its consideration of the Location Factor, or considered them as mitigating measures against the adverse effect of close proximity between the proposed mahjong parlour and the 3 educational institutions.  I agree with Mr Liu’s submission that it would be wrong for the court to technically and artificially dissect the thinking process of the Board[17].  Even if (contrary to my view), there is some validity to the argument that the Undertakings should be taken into account as part and parcel of the Board’s consideration of the Location Factor, I consider it to be clear, having regard to the Board’s view as regards the ineffectiveness of the proposed measures (see further §39 below), that the Board would inevitably have come to the same and correct conclusion that the proposed parlour was in close proximity to the 3 educational institutes.  Since the remedy of judicial review is discretionary, I would not, in any event, be minded to grant relief on this ground.

39.  In respect of the argument at §37(2) above, it seems to me that the Board took a commonsense and reasonable view that “the proposed mahjong parlour still requires some means of promotion for the business to commence and maintain viability and that some form of signage is still required to enable customers to find the entrance to the mahjong parlour”. The 2^nd Undertaking offered by the Applicant, namely, that advertising signs would not be put up along Shau Kei Wan Main Street East, indicated that the Applicant did intend to erect some advertising signs or signboards.  It would make little sense to put up signs or signboards which are not readily visible to the public.  Also, as observed by the Board, children and young people attending the 3 educational institutions may wander and explore the neighbourhood, and could be subject to the bad influence of gambling.  Ultimately, assessment of the effectiveness of the Undertakings was a matter for the Board.  Unless the Board came to a conclusion which crossed the high threshold of Wednesbury unreasonableness, the court should not interfere.  I am far from being satisfied that the Board’s conclusion was Wednesbury unreasonable.

40.  In all, Ground (2) of the judicial review is rejected.

ISSUE 3: THE BOARD TOOK INTO ACCOUNT IRRELEVANT CONSIDERATIONS IN ASSESSING THE LOCAL REACTION FACTOR AND/OR UNLAWFULLY FETTERED ITS POWER TO REMIT THE CASE TO THE PUBLIC OFFICER FOR RECONSIDERATION ON THAT ISSUE

41.  The Board assessed the Local Reaction factor at §§45 to 47, and 51(5) of the Decision, as follows:

“[45] As to ‘local reaction’, this Hearing Board has before it the results of the local consultation/opinion survey of neighbourhood stakeholders done by the District Officer (Eastern) in February 2016 (including copies of reply slips received) and the results of an opinion survey of members of the public frequenting at six significant locations in Shau Kei Wan (including three that were within the 100-metre circle) conducted by Long Sound in November 2015 as part of its work in producing the Long Sound Report. Having considered the methodology of the two surveys, this Hearing Board is of the view that greater weight should be placed on the results of the local consultation of neighbourhood stakeholders done by the District Officer (Eastern). This is because of the valid criticism the Respondent has made of the geographically wide definition of ‘living in the area of Shau Kei Wan’ (which included Lei King Wan, Upper Yiu Tung, Heng Fa Chuen, Chai Wan and Siu Sai Wan) that Long Sound adopted for its opinion survey. Although this Hearing Board appreciates that like ‘close proximity’, what is the ‘locality’ is a matter dependent on the particular circumstances of the case, the definition that Long Sound adopted for its opinion survey, in this Hearing Board’s opinion, clearly affected adversely the potency of the survey results as an indicator of ‘local reaction’.

[46] Previous decisions of the Administrative Appeals Board have advised that the object of assessing local reaction ‘is to balance the need of the gambling public and the views of those who opposed gambling. Those who opposed gambling may not be able to give any good reasons. … There is nothing to suggest that [the public officer] has taken into consideration irrelevant matters given as reasons by those who oppose the issue of MJTK licence. The object of the assessing … local objection is to assess the likely extent of objection once the licence is issued, and which objection is certainly coming from those who opposed gambling. It is the objection of those that the [public officer] should be concerned about’ (Chow Tat Chuen v Commissioner for Television and Entertainment Licensing (AAB No. 13/2010, 18 February 2011) pp 9-10; see also Lam Muk Mau v Commissioner for Television and Entertainment Licensing (AAB No.22/2010, 15 February 2011) para 17); and that the object of the assessment is to assess ‘the potential objection and not potential support’, though support from some quarters obviously could mitigate the potential objection (Lau Cheuk Fung (above) at para 6). Although Mr Dawes has cited Winston Lam (above) to suggest that the Administrative Appeals Board would have [to] consider whether the grounds of objection advanced by locals are substantiated or whether they are vague and general, this Hearing Board does not read paras 37-39 of Winston Lam (above) to be capable of supporting this submission; the Administrative Appeals Board that heard that administrative appeal was concerned with the peculiar historical facts of the case and [the] public officer in that case in fact considered the local objection to be mild. In the circumstances, this Hearing Board’s approach is to consider local reaction mainly from the perspective of from whom any objection to the granting of licence would come from if the application is approved and, having said so, the reasons for any such objection would be of lesser or secondary importance.

[47] Having reviewed the matters placed before this Hearing Board by the parties relating to ‘local reaction’, this Hearing Board is of the view that the potential ‘local reaction’ to approving the Appellant’s application is objection at a degree clearly more than moderate. It is remarkable that the representatives of three of the five buildings along [the] same side of Shau Kei Wan Main Street East adjoining the Premises and all except one of the buildings at Wang Wa Street behind the Premises objected to the Appellant’s application. It is also reasonable for some of these potential objectors to be concerned about the mahjong players frequenting or gathering at the back alley or rear lane the Premises share with these buildings. This Hearing Board appreciates that the local consultation was conducted with the provision of the limited information that a mahjong parlour was proposed to be established at the Premises. However, in the absence of any additional evidence, material or information, this Hearing Board has to make the assessment on the basis of the evidence, material and information before it.

[51(5)  On the evidence, materials and information before this Hearing Board, the major factor of ‘local reaction’ is determined to be not in favour of the Appellant’s case. The ‘local reaction’ to the establishment of a mahjong/tin kau parlour at the Premises is considered to be objection of a nature and degree that is more than moderate. As stated above, this Hearing Board has found that the expressed concerns of some of the potential objectors about the mahjong players frequenting or gathering at the back alley or rear lane the Premises share with the nearby buildings are reasonable in the context of the Appellant’s proposal to have the entrance of the mahjong parlour situated at the rear of the Premises. The potential of mahjong players gathering or lingering at the rear lane shared with the nearby building appears to be a matter that the Appellant might have little control. Also, this matter has thus far not been adequately addressed either in her solicitors’ representation to the Respondent or in her response to the Respondent’s statement.”

42.  Mr Dykes argues that the Board’s assessment of the Local Reaction Factor is flawed in 2 aspects:

(1)     It wrongfully took into account objections that did not arise from opposition to gambling, which ought to be irrelevant; and

(2)     It wrongfully limited itself to “the evidence, material and information before it” and fettered its power to order the case to be remitted to the Public Officer for further consideration.

43.  In respect of the argument at §42(1) above, Mr Dykes submits that the Board ought to distinguish between objections that arose from opposition to gambling on the one hand, and objections that arose from other concerns, say, the operation of the gambling premises, on the other hand[18]. Alternatively, if the Board was entitled to take into account objections that did not arise from opposition to gambling itself, then it ought not to have relegated the reasons for such objection to a “lesser and secondary importance”.  To the contrary, the Board should have considered whether such objections were substantiated or reasonable, or could have been mitigated by a different mode of operation of the parlour or by imposing licence conditions[19].

44.  There is, in my view, no valid basis to seek to draw a distinction between (i) objections to the establishment of a proposed parlour arising from opposition to gambling, and (ii) objections arising from other concerns, for the purpose of assessment of the Local Reaction Factor. §2(v) of the Guidelines requires the Public Officer (or the Board on an appeal) to assess the local reaction to the establishment of a proposed mahjong/tin kau parlour and the potential objection if the application is approved.  It does not draw any distinction as suggested by Mr Dykes.  Neither does it require the Public Officer (or the Board on an appeal) to adjudicate on the validity or soundness of the reasons for an objection to the establishment of a proposed mahjong/tin kau parlour.  It is, in any event, artificial to seek to differentiate between objections to the establishment of a proposed mahjong/tin kau parlour which are based on opposition to gambling itself, and those which are based on other concerns such as the operations of the proposed mahjong/tin kau parlour.  While it is conceivable that some people may oppose gambling purely as a matter of principle, there could be other people who do not oppose gambling itself but may object to the establishment of a mahjong/tin kau parlour in a particular place or locality for other reasons, eg the undesirable influence on young children from nearby educational institutions, or the adverse law and order consequences in the particular neighbourhood.  There could also be people who object to the establishment of a proposed mahjong/tin kau parlour based on multiple, overlapping, reasons.  In my view, the Board was correct to hold that, for the purpose of assessing local reaction under §2(v) of the Guidelines, the object was to assess “the likely extent of objection once the licence is issued”, and that the reasons for such objection are of “lesser or secondary importance”, although the reasons for objection cannot be completely ruled out of consideration as being necessarily irrelevant (eg, reasons which are wholly irrational can obviously carry no or minimal weight).

45.  In respect of the argument at §42(2) above, Mr Dykes submits that, in as much as the Board itself recognized and admitted the limitation of the local consultations carried out by the District Officer (Eastern), namely, that the local consultations were only conducted “with the provision of the limited information that a mahjong parlour was proposed to be established at the Premises”, which limitation (says Mr Dykes) was significant because the objections might well be attenuated if, for example, the residents knew that the mahjong parlour would not be accessible or seen from Shau Kei Wan Main Street East, the Board should exercise its power under s 21(3) of the Administrative Appeals Board Ordinance to order that the case be sent back to the Public Officer for further consideration of such matter as the Board might order (for example, for the Public Officer to obtain better information about the Local Reaction Factor and reconsider the Application on such basis).  Instead, the Board wrongfully confined itself to the “evidence, material and information before it” (as stated in §47 of the Decision)[20].

46.  In my view, it is primarily a matter for the Board to decide, notwithstanding the limitation of the local consultations carried out by the relevant District Officer, whether to accept the findings of the consultations and the weight to be given to those findings.  As observed by the Board, the objection to the establishment of the proposed mahjong parlour was at a degree clearly more than moderate.  Having regard also to the reasons given for the objections[21], there is, I consider, no good reason to believe that the degree of objection would be significantly different even if the consultees were told that the mahjong parlour would not be accessible or seen from Shau Kei Wan Main Street East.  There was also no application by the Applicant that the Board should, in view of the limitation of the local consultations carried out by the District Officer (Eastern) and the Undertakings proffered by the Applicant, remit the matter to the Public Officer for further consideration.  In all the circumstances, I do not consider that the Board acted irrationally in deciding to assess the Local Reaction Factor on the basis of the evidence, material and information before it.

47.  For the above reasons, Ground (3) of the judicial review is rejected.

DISPOSITION

48.  The application for leave to apply for judicial review is dismissed, with costs to the 2^nd Putative Respondent, to be taxed if not agreed.