RE AU KWOK HUNG

HCAL 147/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 147 OF 1999

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J U D G M E N T

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1. The Applicant in this matter, Au Kwok Hung, seeks by way of judicial review to challenge a decision of the Appeal Panel constituted under the Housing Ordinance, Chapter 283 ('the Ordinance'). Having learnt that his lease of residential premises entered into with the Housing Authority had been terminated, the Applicant sought redress by way of appeal to the Appeal Panel. His notice of appeal was out of time. The Appeal Panel declined to hear the appeal on the basis that it was mandatory that the time limit be met. The Applicant challenges that decision as being wrong in law. He contends that the time limit, as a matter of procedure, is directory only and does not go to jurisdiction.

The factual background

2. On 19 January 1998, the Applicant entered into a lease agreement with the Hong Kong Housing Authority in terms of which he leased a residential premises in the Lower Ngau Tau Kok (II) Estate in Kowloon ('the flat'). The lease agreement provided that the Applicant would enjoy indefinite rights of occupation upon payment of a monthly rental of $480. The Applicant lived alone in the flat.

3. In February 1999 the Applicant travelled to the Mainland to join his family there and enjoy the New Year festivities. Sadly, he fell ill and was forced to undergo surgery. As a direct result of his illness, he was unable to return to Hong Kong until 14 July of that year. During his time in the Mainland the Applicant either neglected - or was unable - to pay his monthly rental to the Housing Authority. He therefore fell into arrears.

4. The Applicant's breach of the lease entitled the Housing Authority to terminate his lease. This was done. A written notice to quit dated 30 April 1999 was served in accordance with the terms of the lease by being left at the flat. The notice instructed the Applicant to vacate the flat by 31 May. When this was not done, the flat was repossessed and the Applicant's personal belongings removed to a place of storage.

5. Upon his return to Hong Kong, the Applicant discovered that the lock to his flat had been changed and his personal belongings removed. Seemingly, he did not see the written notice of termination. The day after his return, the Applicant visited the Housing Authority where he was informed of the cancellation of the lease and was told that, if he wished, he could lodge an appeal pursuant to section 20 of the Ordinance.

6. On 10 August 1999, the Applicant lodged his appeal with the Appeal Panel appointed under section 7A of the Ordinance. In his grounds of appeal the Applicant admitted his breach of the lease agreement but asked for a sympathetic consideration of his predicament; namely, his inability to return to Hong Kong because of illness.

7. In reply, by letter dated 22 August 1999, the Secretary of the Appeal Panel set out the relevant provisions of the Ordinance concerning appeal procedures and concluded:

"As your appeal letter was sent to the Secretariat of the Appeal Panel on 10 August, i.e., after the expiration of the appeal period, the Panel under the circumstances has no jurisdiction to hear your case, for which we extend out apologies."

8. It is that decision which the Applicant challenges as being wrong in law. Before moving to the merits of that challenge, however, it should be mentioned that the Housing Authority has now provided the Applicant with alternate accommodation. The flat has been leased to a new tenant. In light of this I was concerned that the Court was being asked to determine a matter in vacuo: expressed in another way, to give what amounted to an advisory judgment. I have been informed, however, that the Applicant now resides in what is called temporary accommodation and it may well be several years before he can hope to be given permanent accommodation of the kind he previously enjoyed. If, however, this judgment is in his favour (and he is successful before the Appeal Panel) steps will be taken to ensure he receives permanent accommodation again as soon as that it possible. In short, there is a practical advantage to be gained.

A consideration of the Ordinance

9. Section 19 of the Ordinance empowers the Housing Authority to terminate leases and provides that:

"No court shall have jurisdiction to hear any application for relief by or on behalf of a person whose lease has been terminated ... in connection with such termination."

10. Having reduced the role of the courts to determine issues related to the cancellation of Housing Authority leases, the Ordinance does, however, provide a means of redress by way of appeal. The powers of the Appeal Panel are broad. They are described in section 20(3) of the Ordinance in the following terms:

"(3) A tribunal of the panel appointed under section 7A(6), in determining an appeal against a termination-

(a) under section 19(1)(a) or (aa), may confirm, suspend or cancel the termination;

(b) under section 19(1)(b), may confirm, amend, suspend or cancel the notice to quit.

(4) The decision of the tribunal shall be final."

11. As to the process of appeal, section 20(1) states:

"(1) Where a lease has been terminated under section 19 ... the tenant may appeal to the panel, appointed under section 7A(1), not later than 15 days after the date on which-

(a) service of the notice of termination has been effected under section 19A(2); or

(b) notice to quit has been given under section 19(1)(b),

as the case may be:

Provided that where the chairman of the panel is satisfied that the tenant is unable to appeal by reason of ill-health, absence or other cause thought sufficient by the chairman, he may permit an appeal to be made on behalf of the tenant by a person authorised under the lease to occupy the land or part of it." [my emphasis]

12. It is not disputed that notice to quit in terms of section 19(1)(b) of the Ordinance was properly given by the Housing Authority. That written notice was served on 30 April 1999. Accordingly, the 15 day period allowed for the filing of an appeal in terms of section 20 would have expired on or about 15 May 1999 at a time when the Applicant was still in Mainland China.

A brief history of the Ordinance

13. The Ordinance, which became law in 1973, established a Housing Authority responsible for the management and development of Hong Kong's public housing. Part IV of the Ordinance deals with the control of public housing estates and, in terms of section 19, bestows upon the Authority summary powers to terminate leases. Section 19 reads:

"(1) Notwithstanding the terms thereof, the Authority may terminate any lease-

(a) without notice, if, in the opinion of the Authority, the land held under the lease has become unfit for human habitation, a nuisance, dangerous to health or unsafe; or

(aa) without notice, if, in the opinion of the Authority, no person authorised under the lease to occupy the land or part thereof occupies the land or part thereof; or (Added 42 of 1976 s. 3)

(b) otherwise, by giving such notice to quit as may be provided for in the lease or 1 month's notice to quit, whichever is the greater.

(2) Upon the termination of a lease under subsection (1), the tenant shall, if he is still occupying the land, be a trespasser thereon.

(3) No court shall have jurisdiction to hear any application for relief by or on behalf of a person whose lease has been terminated under subsection (1) in connection with such termination."

14. Provision for an appeal process was always contained in the statute but was not always in its present form. Originally just 10 days was allowed within which to make an appeal. In 1982, however, the Ordinance was amended by extending the time period to 15 days. In addition, the proviso was added in terms of which, if the tenant himself was unable to appeal 'by reason of ill-health, absence or other cause', it could be done on his behalf by a representative who was authorised under the lease to occupy the premises or any part of it: effectively, a family member.

15. In respect of these amendments, Hansard records the Secretary for Housing saying the following to the Legislative Council (10 February 1982):

"The opportunity is also taken in this Bill to revise the procedures under which Housing Authority tenants may appeal against termination of their tenancies.

Section 20 of the Ordinance gives an Authority tenant the right of appeal against termination of his tenancy, providing the appeal is lodged within ten days of the serving of the notice of termination. It is proposed that this section be amended to provide that where a tenant is unable to submit the appeal personally, it may be lodged by a member of his family who is an authorised occupant under the tenancy agreement. It is also proposed to increase the time limit for lodging an appeal to 15 days."

16. In my judgement, it must be indicative of the intention of the law makers that at no time has the Ordinance contained any provision for extending the time period within which an appeal may be made. In 1982 that fixed time period was made longer and, to assist tenants in difficulty, family members could make the appeal in a representative capacity. But at no time in the history of the legislation has it been stated that a discretion of any kind has been vested in the Appeal Panel (originally the Appeal Committee) to enlarge the period within which an appeal may be made.

The legal principles

17. The distinction between a statutory provision that is imperative or merely directory was explained by Lord Renzance in Howard v. Bodington (1877) 2 P.D. 203, 210:

"Now the distinction between matters that are directory and matters that are imperative is well known to us all in the common language of the courts at Westminster ... A thing has been ordered by the legislature to be done. What is the consequence if it is not done? In the case of statutes that are said to be imperative, the courts have decided that if it is not done the whole thing fails, and the proceedings that follow upon it are all void. On the other hand, when the courts hold a provision to be mandatory or directory, they say that, although such provision may not have been complied with, the subsequent proceedings do not fail."

18. This distinction suggests a relatively straightforward (if difficult) process of determining whether, on a true construction, a statutory provision is imperative or directory. However, in a recent decision, the English Court of Appeal has warned that the process is a more complex one. In R. v. Secretary of State for the Home Department ex parte Jeyeanthan [2000] 1 WLR 354, in giving the judgment of the court, Lord Woolf M.R. said:

"The issue is of general importance and has implications for the failure to observe procedural requirements outside the field of immigration. The conventional approach when there has been non-compliance with a procedural requirement laid down by a statute or regulation is to consider whether the requirement which was not complied with should be categorised as directory or mandatory. If it is categorised as directory it is usually assumed it can be safely ignored. If it is categorised as mandatory then it is usually assumed the defect cannot be remedied and has the effect of rendering subsequent events dependent on the requirement a nullity or void or as being made without jurisdiction and of no effect. The position is more complex than this and this approach distracts attention from the important question of what the legislator should be judged to have intended should be the consequence of the non-compliance. This has to be assessed on a consideration of the language of the legislation against the factual circumstances of the non-compliance. In the majority of cases it provides limited, if any, assistance to inquire whether the requirement is mandatory or directory." [my emphasis]

19. He later commented:

"It must be remembered that procedural requirements are designed to further the interests of justice and any consequence which would achieve a result contrary to those interests should be treated with considerable reservation."

20. Lord Woolf M.R. cited with approval the dicta of Lord Hailsham L.C. in his speech in London and Clydeside Estates Ltd v. Aberdeen District Council [1980] 1 WLR 182 (at pages 188-190) in which inter alia the following was said:

"In this appeal we are in the field of the rapidly developing jurisprudence of administrative law, and we are considering the effect of non-compliance by a statutory authority with the statutory requirements affecting the discharge of one of its functions. In the reported decisions there is much language presupposing the existence of stark categories such as 'mandatory' and 'directory', 'void' and 'voidable', a 'nullity', and 'purely regulatory'.

"Such language is useful; indeed, in the course of this opinion I have used some of it myself. But I wish to say that I am not at all clear that the language itself may not be misleading in so far as it may be supposed to present a court with the necessity of fitting a particular case into one or other of mutually exclusive and starkly contrasted compartments, compartments which in some cases (e.g. 'void' and 'voidable') are borrowed from the language of contract or status, and are not easily fitted to the requirements of administrative law.

"When Parliament lays down a statutory requirement for the exercise of legal authority it expects its authority to be obeyed down to the minutest detail. But what the courts have to decide in a particular case is the legal consequence of non-compliance on the rights of the subject viewed in the light of a concrete state of facts and a continuing chain of events. It may be that what the courts are faced with is not so much a stark choice of alternatives but a spectrum of possibilities in which one compartment or description fades gradually into another.

...

I do not wish to be understood in the field of administrative law and in the domain where the courts apply a supervisory jurisdiction over the acts of subordinate authority purporting to exercise statutory powers, to encourage the use of rigid legal classifications. The jurisdiction is inherently discretionary and the court is frequently in the presence of differences of degree which merge almost imperceptibly into differences of kind."

21. In light of this dicta, Lord Woolf laid down the following guidelines which I accept as reflecting the current law:

"I suggest that the right approach is to regard the question of whether a requirement is directory or mandatory as only at most a first step. In the majority of cases there are other questions which have to be asked which are more likely to be of greater assistance than the application of the mandatory/directory test. The questions which are likely to arise are as follows.

1. Is the statutory requirement fulfilled if there has been substantial compliance with the requirement and, if so, has there been substantial compliance in the case in issue even though there has not been strict compliance? (The substantial compliance question.)

2. Is the non-compliance capable of being waived, and if so, has it, or can it and should it be waived in this particular case? (The discretionary question.) I treat the grant of an extension of time for compliance as a waiver.

3. If it is not capable of being waived or is not waived then what is the consequence of the non-compliance? (The consequences question.)

Which questions arise will depend upon the facts of the case and the nature of the particular requirement. The advantage of focusing on these questions is that they should avoid the unjust and unintended consequences which can flow from an approach solely dependant on dividing requirements into mandatory ones, which oust jurisdiction, or directory, which do not. If the result of non-compliance goes to jurisdiction it will be said jurisdiction cannot be conferred where it does not otherwise exist by consent or waiver."

The discretionary question

22. It is not disputed that the Applicant in this present matter did not comply with the requirement of section 20(1) to serve his notice of appeal not later than 15 days after the date on which the Housing Authority had served its notice to quit. Indeed, his notice was served almost 3 months out of time. In light of this, I believe the first question to be asked is whether, upon a true construction, non-compliance with the requirement of section 20(1) goes to jurisdiction. If I find that it does go to jurisdiction then the Appeal Panel has no power to exercise discretion in the matter by agreeing, for example, to waive the time limit requirement. As Lord Woolf said supra: 'If the result of non-compliance goes to jurisdiction it will be said jurisdiction cannot be conferred where it does not otherwise exist...'

23. In considering the nature of the time limit requirement imposed by section 20(1), I believe it is necessary to have regard to the purpose of the Ordinance. That purpose is to provide for the establishment of the Housing Authority which itself has imposed upon it a statutory duty, that duty being defined in section 4(1) in the following terms:

"The Authority shall exercise its powers and discharge its duties under this Ordinance so as to secure the provision of housing and such amenities ancillary thereto as the Authority thinks fit for such kinds or classes of persons at the Authority may, subject to the approval of the Chief Executive, determine."

24. The Authority therefore has a duty to secure housing for various classes of persons, those persons invariably being incapable (by way of purchase or rental) of otherwise securing adequate housing for themselves.

25. I believe too that I am entitled to take judicial notice of a fact notorious in Hong Kong; namely, the existence of considerable pressure on the Authority to secure housing for an extensive waiting list of applicants. It follows therefore that when accommodation becomes available the Authority has a duty to allocate it as soon as reasonably possible.

26. In such circumstances, if a tenant is to appeal the termination of his lease, I believe that a strict approach by the legislature to time requirements is readily understandable. It has practical ramifications. For example, section 19(2) of the Ordinance directs that if a tenant remains in his premises after termination of his lease, he is classified as a trespasser and, in terms of section 21(1), steps may be taken to order his removal. The Housing Authority has been given this power so that a premises which is subject to a terminated lease may be repaired, redecorated and re-allocated. Clearly, in the public interest, these physical steps need to be taken as soon as practical. However, if a tenant appeals then, in terms of section 21(2) he is not deemed to be a trespasser and retains security of possession until the appeal has been determined. If it was intended that the 15 day time limit was directory only, it would mean that a tenant who was already evicted could appeal out of time. He would not then be deemed to be a trespasser and would be entitled presumably to return to his accommodation - whether under repair and redecoration or not - and remain there until his appeal was decided.

27. This is why, I believe, it is significant - despite the absence of any imperative words such as 'shall' or 'must' - that the Ordinance as originally framed gave no power to extend time limits and why, when the Ordinance was amended in respect of appeal procedures in 1982, although the time for making an appeal was extended from 10 to 15 days, no attempt was made to give a discretion to extend time limits in suitable cases. Instead, in terms of the proviso, if a tenant could not personally make an appeal because of difficulties such as ill-health, some limited provision for an appeal by a representative was made. But that appeal too was to be made within the 15 day time limit.

28. In my judgment, it is clear that the legislature did not vest the Appeal Panel with any discretion to extend the time period allowed for an appeal. The rhetorical question may be asked: 'why amend the Ordinance to extend the time from 10 to 15 days when the Appeal Panel in any event had a discretion to extend?'

29. Mr Kwok, who appeared for the Applicant, argued that the 15 day provision was manifestly procedural and accordingly the intention of the legislature went no further than to issue a direction that appeals were to be conducted with 'reasonable expediency'. I agree, of course, that the provision is procedural but I cannot agree, as Mr Kwok appeared to contend, that procedural steps by their nature are invariably directory only. Our law has long recognised that statutory time limits may well go to jurisdiction. The work, Judicial Review of Administrative Action by de Smith, Woolf and Jowell (5th ed.) contains the following commentary at page 236:

"A number of statutes, particularly in the areas of housing, town and country planning and compulsory acquisition, preclude challenge to the validity of decisions made outside a limitation period within which statutory appeals are available.

...

The principal justification for regarding a clause containing a time limit as an effective bar to review after the time limit has expired is that the legislator, having created a statutory remedy, is entitled to limit the availability of that remedy. This can be the case even where the time limit is too short to enable the order or decision to be challenged in some situations. The use of limitation periods to prevent the assertion of legal rights is, after all, a perfectly familiar feature of the legal system. Furthermore, there can be an obvious public interest in enabling public or private works to be commenced and resources to be committed in reliance upon the legal invulnerability of an apparently valid order."

30. When the authors speak of an obvious public interest in enabling public or private works to be commenced and resources committed in reliance upon an apparently valid order, I believe the same principle applies in the present case. The Housing Authority has a duty to provide housing; that encompasses a duty to commit the necessary resources to render vacated premises habitable for new tenants. That duty would, in my opinion, be undermined if the time limit on appeals did not operate as an effective bar.

The consequences question

31. Lord Woolf in ex parte Jeyeanthan (supra) defined the question in this regard as being: what the laws makers should be judged to have intended should be the consequence of non-compliance.

32. In the present case, upon a consideration of the wording of the Ordinance and its history of amendments, I am satisfied that the law makers intended that if an aggrieved tenant did not comply with the time limit he should be barred totally from pursuing his appeal. If that were not the case, as I have already indicated, I believe that the smooth running of the legal machinery in Part IV of the Ordinance would be materially impaired. That would not be in the greater public interest although it may have an unhappy consequence for the individual tenant.

33. Mr Kwok, for the Applicant, contended that this would effectively deny an aggrieved tenant of the right to a hearing. This, he said, was a right guaranteed by Article 14(1) of the International Covenant on Civil and Political Rights, that covenant being incorporated (per Article 39) into our Basic Law. With respect to Mr Kwok's contention, the Ordinance does not deny an aggrieved tenant of the entitlement to a fair and public hearing before a competent and independent tribunal, it simply provides that right within a time limit. And time limits, as I have already indicated, are common features of our law.

The substantial compliance question

34. In my judgment, in the present case there has not been substantial compliance with the 15 day provision in section 20(1). But even if, factually, there had been such compliance, I do not believe it would have fulfilled the statutory requirement. Strict compliance is required because, as I have said, it would otherwise undermine the ability of the Housing Authority to fulfil its duty to move timeously to prepare vacated premises for occupation by new tenants.

Appearance of counsel for the Appeal Panel

35. Before concluding this judgment, I wish to say something briefly of the fact that the Respondent in the hearing was represented by counsel. As I understand it, it is the practice today, when tribunals are subject to judicial review, for them to adopt a neutral role but perhaps to supply information which will assist in ensuring a just result. It is unusual for counsel to appear. In this regard, for example, see Dato Tan Leong Min v. Insider Dealing Tribunal [1999] 2 HKC 83. It must be said, however, that Mr Law, for the Respondent, did not so much advocate the case for the Panel as assist the court with both history and, where appropriate, legal authority. His approach was at all times moderate and in keeping.

Conclusion

36. In all the circumstance, I am satisfied that the time limit of 15 days imposed by section 20(1) of the Ordinance is imperative, that it cannot be waived by the Appeal Panel and that, in consequence, the Applicant's non-compliance deprived the Appeal Panel of jurisdiction to determine the appeal. The application is therefore dismissed.

37. I have not been addressed on costs. But I see no reason why the usual order should not follow. There will therefore be an order nisi awarding costs to the Respondent, the order to be made final after 21 days unless application is made prior to that time to argue the matter.