COMMISSIONER FOR TELEVISION & ENTERTAINMENT LICENSING v. AMUSEMENT GAME CENTRES APPEAL BOARD

HCAL 35/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO.35 OF 2003

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J U D G M E N T

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Introduction

1. The interested party in this matter, Mr Hui Kin, has made an application pursuant to O.32, r.6 of the Rules of the High Court to set aside an order made ex parte. The order which is the subject of his application was made on 6 May 2003. It is an order granting leave to the applicant, the Commissioner for Television & Entertainment Licensing ('the Commissioner'), to judicially review a judgment of the Amusement Game Centres Appeal Board ('the Appeal Board'). The granting of leave was made by myself ex parte; that is, solely on a consideration of the documents filed by the Commissioner.

2. It is not disputed that Mr Hui Kin is an interested party. The judgment of the Appeal Board which the Commissioner has sought to judicially review is one which supports Mr Hui Kin's entitlement to a licence to operate an amusement game centre under the provisions of the Amusement Game Centres Ordinance, Cap.435 ('the Ordinance').

The background

3. In April 2002, Mr Hui Kin made application for his licence. As I understand it, it was to relocate an existing licence to new premises, the application therefore being in respect of the proposed new premises. That application was considered by the Commissioner and in September 2002 was refused. Mr Hui Kin appealed to the Appeal Board. That appeal was heard 14 January 2003. Mr Hui Kin was successful. The Appeal Board did not give full reasons for its decision on that date but indicated that it would do so later.

4. Thereafter, Mr Hui Kin entered into business arrangements with an associate and formalised his tenancy agreement in respect of the proposed new premises. At the same time, his solicitors entered into correspondence with the Commissioner to seek an early resolution of outstanding matters. The first letter from the solicitors was dated 29 January 2003. It reads :

"We refer to a unanimous decision of the Appeal Board in favour of our client made on 14 January 2003, and we are instructed by our client to urge your authority to issue a letter of further consideration as speedily as possible, bearing in mind our client's financial burden on the proposed premises as testified by him at the appeal hearing. Your delay will definitely have a detrimental effect on our client's interest and finance."

5. The Department of Justice, acting on behalf of the Commissioner, replied to the following effect :

"Concerning your request for a letter of further consideration to be issued to your client, our instructions are that the authority is currently considering whether to challenge the Appeal Board's decision by way of judicial review. And as written reasons for decision are still pending, the authority cannot form a definite view in this regard yet. While the authority appreciates your client's financial concern, it does not, for the above reason, find it appropriate to process his application further at this stage. We will let you know once the authority has reached a decision as to the way forward."

6. The Appeal Board's full reasons for the decision it had made in favour of Mr Hui Kin were handed down on 25 February 2003.

7. Some four weeks later, a letter dated 20 March 2003 was sent to the Department of Justice by Mr Hui Kin's solicitors :

"As it is nearly one month lapsed since the delivery of written reasons for decision, our client with a view to save time and minimise his loss, is carrying out fitting and decoration for the above proposed game centre."

8 . The letter elicited the following response from the Department of Justice dated 2 April 2003 :

"As we have mentioned in our previous letter of 5 February 2003, the authority does not find it appropriate at this stage to process your client's application further, pending its decision whether to seek judicial review of the Appeal Board's decision. Please be informed that we are at the final stage of considering the same and would soon reach a decision. Meanwhile, in the absence of a letter of further consideration issued by the authority to your client, we would strongly urge your client to hold off carrying out the said fitting and decoration works and not to incur further expenses in respect of the proposed amusement game centre. We will let you know once we have decided the way forward in this matter."

9. The correspondence continued with an urgent letter of the same date from Mr Hui Kin's solicitors :

"As you are fully aware, an application for leave to apply for judicial review should be made promptly and it is, however, over one month lapsed since the delivery of written reasons for decision. The fact is that the verdict of the Appeal Board was reached on 14 January 2003, and we believe you should have ample time to make a decision whether to seek judicial review of the Appeal Board's decision. Your delay in making a decision is not justified and is unfair to our client who is bearing a heavy financial burden on a proposed game centre. Please be informed that the fitting out and decoration works to the proposed game centre will soon be completed. All our client's rights are hereby reserved." [my emphasis]

10. The Department of Justice replied the following day in a letter which (in relevant part) reads :

"As you will recall, at the end of the hearing on 14 January 2003, the Appeal Board gave its oral verdict with brief reasons only. The detailed (written) reasons for the decision were not made available to us until 26 February 2003, without which we were unable to determine whether there are any grounds for judicial review and hence could not prepare our application properly (should we decide to make one). We reiterate that we do appreciate your client's financial concern, yet, we consider it prudent to give careful deliberation to this matter before taking any further action. We would, once again, urge your client to hold off fitting out and decorating the proposed amusement game centre until we have a decision as to the way forward (which we will let you know of shortly)." [my emphasis]

11. Finally, there was a letter from the solicitors representing Mr Hui Kin dated 23 April. It reads (in relevant part) :

"Last time, we were informed that you were at the final stage of considering the decision whether to seek judicial review of the Appeal Board's decision and would soon reach a decision. However, we have received nothing from you yet. We reiterate that your unreasonable delay in making a decision is totally unjustified and unfair to our client, and simply the consideration of the decision does not justify the authority to withhold the issue of a letter of further consideration."

12. On 17 April 2003 - some seven weeks after the Appeal Board had given its detailed reasons - the Commissioner filed his application for leave to apply for judicial review. Despite undertakings to the contrary, there is nothing in the papers before me to indicate that the Commissioner had earlier communicated with Mr Hui Kin's solicitors to the effect that a decision had at last been made to seek judicial review and that an application would now be filed.

The grounds for seeking to set aside leave

13. The grounds for Mr Hui Kin's application to set aside leave are founded on two contentions. First, that the application was made out of time or, if not out of time, was not made promptly. Second, that there was material non-disclosure on the part of the applicant by failing to advise the court in the ex parte application of the very matters to which I have just made reference; that is, to the accruing commercial burden placed on Mr Hui Kin and the Commissioner's failure, in the light of that state of accruing potential prejudice, to act promptly.

14. I will look first to the question of disclosure. In the application for judicial review, oblique reference has been made of the fact that the interested party, Mr Hui Kin, has committed himself to certain business expenses. The reference appears in paragraphs 28 and 29 of the application. Paragraph 28 reads (under the heading "More employment opportunities") :

"It is not clear from the decision precisely what the Appeal Board had in mind. However, there was some discussion at the appeal hearing relating to the fact that the appellant had already signed a lease for the premises of the new site. It was also submitted that the appellant intended that there would also be further moneys spent should his relocation application be granted."

Paragraph 29 of the application reads :

"If the Appeal Board took into account the fact that moneys had already been expended, that was an improper matter to which to have given any weight. It cannot be a proper or relevant factor that an applicant for a licence has 'jumped the gun' and spent money in the hope or expectation of receiving a licence. Any money spent in anticipation of and in advance of the grant of a licence is spent by an applicant at his own commercial risk. It could not conceivably properly improve his chances of receiving a licence."

15. That is the extent of the disclosure made in the application as to the fact that the interested party had made financial commitments. No mention is made of the extended correspondence which had been entered into between the respective legal representatives.

16. Mr Ng, counsel for Mr Hui Kin, emphasised that in all ex parte applications the party making the application is under a duty of full and frank disclosure. In this regard, in Fitzgerald v. Williams [1996] 2 WLR 447 (at 454) Sir Thomas Bingham MR said :

"In seeking ex parte relief, an applicant must disclose to the judge any fact known to him which might affect the judge's decision whether to grant relief or what relief to grant. It is no answer for an applicant who falls down on his duty to say that his breach of duty was committed in good faith and inadvertently, or to show that the relief would have been granted, even if he had complied with his duty. The courts have traditionally insisted on strict compliance with this rule as a forwarding essential protection to an absent defendant. And as applications for ex parte relief have multiplied, so the importance of complying with this duty has grown."

17. There is no doubt that the principle applies with equal force in respect of applications for judicial review. See, for example, the observations of Latham J in R v. Leeds City Council, ex parte Hendry (1994) 6 Admin LR 439 (at 445) :

"This is a case which I can properly use in order to send a message to those who are making applications to this court reminding them of their duty to make full disclosure : failure to do so will result in appropriate cases in the discretion of the court being exercised against [a claimant] in relation to the grant of [a remedy]."

18. In the present case, of course, it is not an absent respondent who alleges prejudice, it is an interested third party. But where the interests of third parties are affected, it seems to me that the principle must still apply although, depending on the factual circumstances, not necessarily with the same severity.

19. In the present case, disclosure of the protests of Mr Hui Kin contained in the letters of his solicitors would have had no bearing on the merits of the Commissioner's application. That, in my view, is an important distinction. But it may well have influenced the court in the exercise of its important 'case management role' of determining whether an expedited hearing should have been ordered. Delay may prejudice the legitimate interests of interested third parties as well as the interests of the applicant and respondent.

20. In that light, it does not seem to me that the failure on the part of the Commissioner (due solely to inadvertance) is of such seriousness as to require action which denies the Commissioner the remedy he seeks against the Appeal Board. The delay that has been occasioned may in large measure be remedied by an order now for an expedited hearing.

21. However, I would not wish my decision made on the particular facts of the present case to be taken as somehow condoning a failure on the part of an applicant in an application for leave to apply for judicial review from displaying utmost candour. Indeed, one of the reasons why discovery is so limited in judicial review is because it is taken that public authorities will, in the spirit of utmost candour, reveal all matters that are material, including third party interests. In my view, the statement made with such force in Lloyds Bowmaker v. Britannia Arrow [1988] 1 WLR 1337 (at 1341) remains the sextant by which our courts set their bearings :

" A party who seeks [a remedy] ex parte is under a duty to the court to make the fullest disclosure of all material facts. He must disclose any defence he has reason to anticipate may be advanced. If he does not comply, he will be deprived of the fruits of his order without consideration of the merits and irrespective of whether, had he made such disclosure, he would or would not have obtained the order. It matters not whether the non-disclosure is deliberate or innocent. The court may allow a limited latitude for a slip, but only where the party seeking [a remedy] has corrected the error quickly."

22. By way of postscript, while I do not believe that the failure to disclose the contended interests of Mr Hui Kin should result in the Commissioner's application for leave being set aside, this does not prevent the interested third party from raising the issue of non-disclosure at the substantive hearing : see the Practice Directions in respect of judicial review (The White Book 2002, page 1367 PDSL 3/4, paragraph 1.4)

23. I turn now to the question of alleged delay. O.53, r.4 governs the time within which applications for judicial review are to be made. It reads :

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

(2) Where the relief sought is an order of certiorari in respect of any judgment, order, conviction or other proceeding, the date when grounds for the application first arose shall be taken to be the date of that judgment, order, conviction or proceeding.

(3) The preceding paragraphs are without prejudice to any statutory provision which has the effect of limiting the time within which an application for judicial review may be made."

[my emphasis]

24. That applications for leave to apply for judicial review 'shall be made ... within three months' does not render the requirement that they shall be made 'promptly' superfluous. In short, an application may be made within the required three months and yet still be properly subject to the criticism that there has been undue delay. In R v. Stratford-on-Avon DC, ex parte Jackson Ackner LJ, delivering the judgment of the court, said ([1985] 3 All ER 769 at 774) :

"... we have concluded that whenever there is a failure to act promptly or within three months there is 'undue delay'. Accordingly, even though the court may be satisfied in the light of all the circumstances, including the particular position of the applicant, that there is good reason for that failure, nevertheless the delay, viewed objectively, remains 'undue delay'. The court therefore still retains a discretion to refuse to grant leave for the making of the application or the relief sought on the substantive application on the grounds of undue delay, if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration." [my emphasis]

25. On behalf of the interested party, it has been submitted that the Commissioner failed to file his application within three months of the decision that is challenged; namely, the decision of the Appeal Board made on 14 January2003. But, of course, the decision of the Appeal Board given in January 2003 was accompanied by the barest reasons only. Full reasons were not given until 25 February 2003. The Commissioner's application was filed on 17 April 2003, some seven weeks later, well within three months of the handing down of those full reasons.

26. In my judgment, it is important to look to 'the judgment, order, conviction or other proceeding' (see O.53, r.4(2)) that has been challenged by the Commissioner. It is expressed in by the Commissioner's application in the following terms :

"The decision of the Amusement Game Centres Appeal Board ('the Appeal Board') in the Amusement Game Centres Appeal case no. 66-04 of 2002, pronounced orally at the appeal hearing on 14th January 2003 and in Written Reasons dated 25th February 2003 ('the Decision')."

The decision that is challenged encompasses - for compelling reason - the detailed reasons handed down on 25 February 2003. That being the case, I am satisfied that the Commissioner's application was filed within three months 'from the date when the grounds for the application first arose'. I come to this conclusion for the following reasons. In considering delay, O.53, r.4 constrains a court to look to when the 'grounds' for the application first arose. A decision, judgment or ruling unsupported by reasons may reveal no 'grounds' for judicial review which, of course, does not look to the merits of a decision but rather to its legality. Those 'grounds' may only become apparent when the reasons are given. I accept that in other contexts 'judgments' or 'orders' have been taken to be the making of the decision itself exclusive of reasons which may later be given in support. But in law context is everything and I am satisfied that O.53, r.4 is not to be read in this narrow way. It must be remembered that judicial review looks to three fundamental challenges. First, that a 'judgment, order, conviction or proceeding' is wrong in law; second, that there has been procedural or substantive unfairness; third, that the decision challenged is so unreasonable that no reasonable decision-maker, appraised of the relevant facts, could have made it. All three grounds of challenge - invariably, although not exclusively - can only be ascertained when reasons are given. For it is those reasons which reveal whether the decision has or has not been lawfully made.

27. Accordingly, I am satisfied that the Commissioner's application was made within three months from the date when the 'grounds' for it first arose. But that does not end the matter. Bearing in mind that the interests of a third party were at stake, was the application made promptly?

28. The fact that Mr Hui Kin was at all material times pushing for an early resolution cannot of itself point to undue delay on the part of the Commissioner. Why should the Commissioner be rushed into a decision in respect of a potentially important and complex set out proceedings? But, as against that, the Commissioner may not ignore the realities that govern the business lives of those who seek licensing authority from him.

29. As I have earlier indicated, I believe that the fact of Mr Hui Kin's anxiety should have been disclosed. But there is nothing on the papers before me to demonstrate that there was a lack of promptness on the part of the Commissioner constituting undue delay. Time was required to take legal advice, to consider that advice and thereafter for the application to be drafted. Such matters are not brought to fruition within days.

Conclusion

30. For the reasons given I am satisfied that the application to set aside leave must be dismissed

31. But, having said that, despite the criticisms levelled against Mr Hui Kin that he has 'jumped the gun' or acted precipitously by proceeding with his business investment, I confess to having some sympathy with his predicament. Once the Appeal Tribunal had ruled in his favour, understandably, he was anxious to make good on his investment. Even if the application for judicial review is eventually rejected and, of course, I make no value judgment on that matter too long a delay may result in a pyrrhic victory for Mr Hui Kin, one so costly that it is equivalent to a defeat.

32. It is undoubted that the Commissioner has an important public responsibility to discharge. The relevant law must be made certain for his guidance and that of the Appeal Board and the public too. But I comment that the required result may perhaps be achieved by way of a declaration rather than an order of certiorari, an order of the latter kind having direct consequences for Mr Hui Kin. But that, of course, will be (in all respects) for the court at the substantive hearing.

Costs

33. Looking to all the circumstances, I am satisfied that costs of this matter must be costs in the cause.

Expedited hearing

34. I will order that there be an expedited hearing so that any on-going prejudice may be reduced to a minimum.