WONG FUNG-LUI v. THE COMMISSIONER FOR TELEVISION AND ENTERTAINMENT LICENSING

HCAL1/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 1 OF 2006

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J U D G M E N T

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1.  In this judicial review, the applicant seeks to quash the decisions of the Commissioner for Television and Entertainment Licensing (“the Commissioner”) refusing to grant an amusement game centre licence to the applicant.  The decisions were communicated to the applicant by letters dated 7 November and 15 December 2005, in which the Commissioner indicated that she could not possibly grant a licence to the applicant unless he has obtained permission from the Town Planning Board to operate an amusement game centre on the premises in question.  The applicant also seeks an order of mandamus to compel the Commissioner to issue the licence in compliance with the order made by the Amusement Game Centre Appeals Board on 25 August 2005.

The Facts

2.  On 30 August 2004, the applicant applied to the Commissioner for the grant of an amusement game centre (“AGC”) licence in respect of the premises situated at Shop 3-8, 10-16, 55-65 and part of Corridor Podium, Richly Plaza, Phase II, 1 Tin Wu Road, Tin Shui Wai, New Territories (“the Premises”).  Prior to that, the applicant had entered into a provisional tenancy agreement for the renting of the Premises.  The formal tenancy agreement was subsequently executed by his company, Crown Stand Investment Limited.

3.  Richly Plaza is a commercial building.

4.  In considering the application, the Commissioner sought comments from various government departments and bureaus, but not the Planning Department.  Objections were received from several individuals and organizations, including Legislators, District Councillors, estate owners committees as well as local residents.

5.  On 2 March 2005, the Commissioner refused the application on the ground that she was not satisfied that the Premises were located in an area suitable for the operation of an AGC as required under section 5(4)(b)(ii) of the Amusement Game Centres Ordinance (“the AGCO”).  The order was communicated to the applicant by letter dated 3 March 2005.

6.  The applicant appealed against the refusal to the Amusement Game Centres Appeal Board (“the Appeal Board”).

7.  On 7 July 2005, the Appeal Board by a majority allowed the appeal.  The Reasons for Decision was published on 25 August 2005.  Paragraph 38 set out the order of the Appeal Board as follows:

“[T]he Respondent’s decision in her letter dated 3^rd March 2005 was reversed and the Respondent’s order dated 2^nd March 2005 was substituted with an order that the licence be granted to the Appellant for a trial period of 9 months with the Special Conditions of Licence set out in the Schedule annexed hereto and such other conditions which the Respondent may impose.”

8.  By a letter dated 17 September 2005, the Commissioner informed the applicant that she would give further consideration to the application.  The applicant was however required to comply with certain fitting out requirements in relation to ventilation, fire and safety as well as lighting and noise control before a licence would be issued to him.

9.  Thereafter the applicant engaged contractors to carry out the necessary work to meet the requirements stipulated by the Commissioner in her letter.

10.  On 22 and 23 September 2005, two estate owners committees wrote to the Commissioner pointing out that the Premises were situated in an Residential (Group B) zone on the draft Tin Shui Wai Outline Zoning Plan (“OZP”) No. S/TSW/9.  Upon enquiry made by the Commissioner, the District Planning Officer advised on 2 November 2005 that unless the AGC was an existing use before the OZP was gazetted on 21 October 1994, permission for such a use was required from the Town Planning Board.

11.  By letter dated 7 November 2005, the Commissioner informed the applicant that she had been advised that under the Notes to the OZP, an amusement game centre is a place of entertainment, which is a Column 2 use requiring planning permission from the Town Planning Board.  As such, unless the amusement game centre was an existing use before the first gazettal of the OZP on 21 October 1994, the applicant was required to obtain planning permission.  The Commissioner went on to state: “If you have not complied with the regulations laid down by the Town Planning Ordinance (Cap. 131), I cannot possibly grant an AGC licence to you.”  The letter concluded by saying: “I would like to remind you that this letter and my letter issued to you dated 17 September 2005 shall not be taken as the grant of a licence to you.  When making a final decision on whether to issue a licence, I will consider all the circumstances of the application as a whole, including whether the captioned address has complied with other relevant requirements and other laws of Hong Kong.” 

12.  Thereafter, there was a series of correspondence between the applicant’s solicitors herein and the Department of Justice on behalf of the Commissioner in connection with the issue of planning permission.

13.  By letter dated 9 December 2005, the applicant informed the Commissioner that the Premises were ready for inspection by her staff.

14.  The Commissioner replied by letter dated 15 December 2005, reiterating the points in her earlier letter of 7 November 2005.  The applicant was asked to provide the relevant information and proof if he had already applied to the Town Planning Board for planning permission.  The last paragraph of the letter stated that if the applicant had not complied with the regulations laid down by the Town Planning Ordinance, the Commissioner could not grant any AGC licence.

The application for judicial review

15.  On 3 January 2006, the applicant commenced these proceedings.  Leave to judicial review was granted on 9 January 2006.   The Notice of Motion was filed on 16 January 2006.

16.  The applicant challenges the Commissioner’s decisions communicated in the two letters of 7 November and 15 December 2005 on a number of grounds.  They are:

(1) The decisions are ultra vires in light of the Appeal Board’s order that an AGC licence be granted to the applicant for a trial period of nine months with special conditions.

(2) The Commissioner had taken into account irrelevant consideration by considering planning permission from the Town Planning Board to be a relevant consideration.

(3) The Commissioner committed an error of law in considering that she may take planning matters into consideration.

(4) It was an abuse of discretion for the Commissioner after requiring the applicant to comply with fitting out requirements, to withhold the AGC licence on a ground relating to planning permission, which is unrelated to the fitting out of the Premises.

(5) The applicant has a legitimate expectation that the Commissioner would not (i) rely on either the Town Planning Ordinance or the OZP as a ground for withholding an AGC licence; or (ii) require the applicant to apply for planning permission; or (iii) refer to the Planning Department or Town Planning Board for comment or advice in respect of his application.     

17.  In his Amended Form 86A, the applicant had also raised the ground that the Commissioner acted inconsistently.  This was not pursued at the hearing.   Having regard to the fact that the approval from the Fire Services Department was only given on 15 March 2006, the applicant also did not pursue the relief for damages.

The issues

18.  The contentions between the applicant and the Commissioner essentially boil down to two broad issues.  The first is whether it is legitimate for the Commissioner to have regard to the provisions in the Tin Shui Wai OZP no. S/TSW/9 and the Town Planning Ordinance.  The second is whether the Commissioner may withhold the grant of an AGC licence when the Appeal Board had decided and ordered that a licence be granted to the applicant for a trial period of nine months with special conditions.

Is planning permission a relevant consideration?

19.  Under section 5(4)(b)(ii) of the Amusement Game Centres Ordinance, cap. 435, the Commissioner shall not grant a licence unless he is satisfied in relation to the proposed operation of the amusement game centre, that the place of proposed operation is located in an area suitable for the operation of an amusement game centre.

20.  Section 13 of the Town Planning Ordinance provides that: “Approved plans shall be used by all public officers and bodies as standards for guidance in the exercise of any powers vested in them.”

21.  There is no doubt that the Commissioner is a public officer within the meaning of section 13.     

22.  It is the applicant’s case that whether he had applied and obtained permission from the Town Planning Board for the operation of the proposed amusement game centre on the Premises is irrelevant to the Commissioner’s consideration of suitability of the area for the operation of an amusement game centre.  Mr Cooney argues that on a purposive interpretation, the Amusement Game Centres Ordinance is only concerned with the suitability of the area in respect of nuisance, the types of games and protection of children, but not planning matters.  In his submission, planning considerations and enforcement of requirements of OZP are within the remit of the Town Planning Board and the Building Authority.

23.  I do not agree that the requirements of a relevant approved plan are irrelevant to the consideration of the Commissioner.  Firstly, she is required by section 13 of the Town Planning Ordinance to do so.  Secondly, planning permission can be a proper and relevant factor when assessing the suitability of the location of a proposed amusement game centre in terms of any possible nuisance it may cause to the neighbourhood.  As in this case, the compatibility of a proposed amusement game centre, being a place of entertainment, with, and its potential impact on, a neighbourhood, which is primarily residential, is as much a matter for the Town Planning Board, as it is a consideration for the Commissioner.  It is not an isolated issue of the user of the place.  By having a place of entertainment within a residential area may also give rise to various other issues, such as noise, effect on children residing in the area and also law and order generally.  Accordingly, whether the required permission from the Town Planning Board has been applied for or granted is not an irrelevant consideration for the Commissioner when exercising her power under section 5(4)(b)(ii) of the Amusement Game Centres Ordinance.     

Does the Commissioner retain a discretion under section 5(4)(b)(ii)

of cap. 435?

24.  That deals with the general question of the relevance of planning permission to the exercise of the Commissioner’s power.  The specific question that arises in this case is whether, notwithstanding the Appeal Board’s decision and order that a licence be granted to the applicant for a trial period of nine months with special conditions, the Commissioner may withhold the issue of the licence unless the requirements of the Tin Shui Wai OZP No. S/TSW/9 that applies to the Premises have been complied with. This in turn calls into consideration two subsidiary questions.  The first is whether the Commissioner is correct in her view that without the requisite planning permission, she is bound to withhold the issue of an AGC licence.  If her view is incorrect, the next question is whether it is within her power to refuse the issue of the AGC licence in light of the Appeal Board’s decision and order.  

25.  On the first point, it is the Commissioner’s argument that by reading section 5(4)(b)(ii) together with the Town Planning Ordinance, she has no discretion and is bound to refuse the issue of an AGC licence unless planning permission has been obtained from the Town Planning Board.  Mr Wong submits that the use of the words “ shall not grant … unless he is satisfied” in English and “… 除非 … 否則不得” in Chinese (cap 435 was enacted bilingually) demonstrates a clear legislative intent that the Commissioner has no discretion to grant an AGC licence where there is a contravention of the statutes in relation to the suitability of the area in which the proposed amusement game centre will be located.     

26.  The applicant on the other hand argues that the Town Planning Ordinance does not remove the discretion that the Commissioner has under section 5(4)(b)(ii) of the Amusement Game Centres Ordinance.  In support of this argument, Mr Cooney draws assistance from two Court of Appeal decisions in Building Authority v. Head Step Ltd (1996) 6 HKPLR 87 and Wing On Company & Another v. Building Authority, unreported, CACV 168 of 1998.  These cases turn on the interpretation of the Building Authority to refuse approval of plans of building works under section 16(1) of the Buildings Ordinance, cap.123.  The Court of Appeal held that the word “may” in section 16(1) does not mean “must” and the power of the Building Authority to refuse approval is discretionary. 

27.  Mr Wong responds by pointing out that in both these decisions, the Court of Appeal had not referred to two earlier first instance decisions, which held that the Building Authority did not have a discretion when there is a contravention of the Town Planning Ordinance, despite the use of the word “may” in section 16(1) of the Buildings Ordinance: Crozet Ltd & Others v. Attorney General [1973-1976] HKC 97, Singway Co Ltd v. Attorney General [1974] HKLR 275, 286-288.  It is further argued that section 5 of the Amusement Game Centres Ordinance is drafted differently from section 16(1) of the Buildings Ordinance. 

28.  In my view, all these authorities are not determinative of how section 5(4)(b)(ii) of the Amusement Game Centres Ordinance is to be construed, whether on its own or read together with section 13 of the Town Planning Ordinance. 

29.  Subsequent to the hearing of the application, the applicant had, with the Department of Justice’s agreement, drawn my attention to the decision of Reyes J in Cheng Suk Yee v. The Commissioner for Television and Entertainment Licensing, unreported, HCAL14 of 2006.  In that case, Reyes J held that section 5(4)(b)(ii) of the Amusement Game Centres Ordinance leaves a discretion on the Commissioner.  I respectfully agree.

30.  As Reyes J pointed out in his Judgment, in providing that the grant of an AGC licence is upon the Commissioner being satisfied as to the matters stipulated under section 5(4), the legislature plainly contemplates the Commissioner exercising judgment and discretion in considering licensing applications.

31.  The Town Planning Ordinance has not removed the discretion conferred upon the Commissioner by section 5(4) of the Amusement Game Centres Ordinance.  Under section 13 of the Town Planning Ordinance, public officers and bodies are required to use approved plans as guidance in the exercise of their power.  On a plain reading of the section, it does not have the effect of removing the discretion vested in a public officer or body.  Accordingly, while the contravention of an approved plan or the non-availability of a planning permission is a material consideration for the Commissioner when she exercises her power under section 5(4), it does not take away her statutory discretion.  She is not bound to refuse the issue of an AGC licence because of non-compliance of an approved plan.  The Commissioner is therefore in error in considering that she cannot issue an AGC licence to the applicant unless he has obtained planning permission from the Town Planning Board.

The Appeal Board’s decision and order

32.  In the circumstances, the Commissioner is bound by the decision and order of the Appeal Board.  It is a fact that when she first considered the application and decided against it, she had not consulted the Planning Department or the Town Planning Board and her attention was not drawn to the Tin Shui Wai OZP No.S/TSW/9.  However, that does not entitle her to revisit the deliberation process after the appeal was concluded and especially in light of the Appeal Board’s decision and order that an AGC licence be granted to the applicant for a trial period of nine months with special conditions.  The Commissioner already had the opportunity to and did consider the issue of suitability of the Premises for the operation of the proposed amusement game centre.  During the process, she could have consulted the Planning Department and/or the relevant approved plan and applicable planning requirements, but she had not done so.  Her eventual decision to refuse the application was reversed on appeal to the Appeal Board. When implementing the decision and order of the Appeal Board, it is not open to the Commissioner to re-consider the suitability of the Premises for the operation of the proposed amusement game centre as if she was dealing with the application afresh. 

33.  Accordingly, the Commissioner decision to withhold the issue of an AGC licence unless the applicant has obtained planning permission from the Town Planning Board isultra vires.  The judicial review application should be allowed on this basis.

Legitimate expectation

34.  In the premises, it is not necessary to deal with the challenge based on legitimate expectation in details.  It is sufficient to say that although the Guidelines on the application for AGC licence do not refer to the Town Planning Ordinance or OZPs or planning permissions, they cannot give rise to any legitimate expectation as argued by the applicant.  There is no unequivocal representation that the Commissioner would not have regard to planning considerations.  On the contrary, the Guidelines inform the applicant that the Commissioner would consider the views of other departments in deliberating upon the AGC licence application.        

Conclusion

35.  For the reasons above, the application for judicial review is allowed.  The decisions of the Commissioner as indicated in the letters dated 7 November and 15 December 2005 are quashed.  There is also an order of mandamus requiring the Commissioner to act in accordance with the order of the Appeal Board as contained in the Decision dated 25 August 2005 in appeal case no. 82-03/2005. 

36.  Applying the normal rule of costs follow event, there is an order nisi that the Commissioner pays the costs of the applicant, to be taxed if not agreed.