AU ON AND ANOTHER v. MUNICIPAL SERVICES APPEALS BOARD AND ANOTHER

HCAL119/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 119 OF 2006

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J U D G M E N T

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1.  In this judicial review application, the applicants seek to quash the decisions made by the Municipal Services Appeals Board (“the Board”) on 18 August 2006 in connection with their appeals against the decisions of the Director of Food and Environmental Hygiene (“the Director”) to terminate their market stall tenancies.  The applicants raise issues of right of representation and procedural unfairness and further complain that the Board had taken into account irrelevant consideration.  

The facts

2.  The 1^st and 2^nd applicants are husband and wife.

3.  By two tenancy agreements both dated 4 August 2004 made with the Director, the 1^st and 2^nd applicants become respectively the tenant of market stalls no. W57 and W49 of Tai Po Hui Market for a period of three years commencing on 1 September 2004.  The two stalls are adjacent stalls located on the 1^st floor of the market.  The applicants sell vegetables at the stalls.

4.   By another tenancy agreement dated 25 October 2004, the 1^st applicant rented another stall, stall no. W5, in the same market for a period of three years commencing on 1 November 2004.  Stall W5 is also located on the 1^st floor, but is near the refuse collection point.

5.  Under each of the above tenancy agreements, clause 4(b)(1) provides that the tenancy shall be terminated by the Director without notice upon contraventions relating to the stall by the tenant or his agent of any provision of the Public Health and Municipal Services Ordinance, cap.132 or of any regulations made thereunder.

6.  Since 1 October 2002, the policy (“the Policy”) of the Food and Environmental Hygiene Department (“the Department”) has been that for a tenant who, within a period of 12 months, is convicted of four offences whilst operating the market stall, consideration will be given to terminate his tenancy. However, if it is a serious offence, the tenancy may be terminated upon one conviction.

7.  By separate letters dated 27 September 2004, the Director drew the applicants’ attention to the above contractual provision and the Policy.  

8.  Between September 2004 and September 2005, the 1^st applicant was convicted on four occasions of offences of causing obstruction to market passageway, contrary to sections 9 and 14(1) of Public Markets Regulation, cap.132BO (“the Regulation”), made under the Public Health and Municipal Services Ordinance, cap.132.  The dates of offences are: 25 September 2004, 12 January, 13 May and 19 July 2005.  The offences were related to the operation of the stall W57.

9.  Similarly, between October 2004 and October 2005, the 2^nd applicant was convicted on five occasions of offences of causing obstruction to market passageway, contrary to sections 9 and 14(1) of the Regulation. The dates of the offences are: 26 October 2004, 4 January, 13 May, 19 July and 24 October 2005.  The offences were in connection with the operation of the stall W49.

10.  In respect of each of their above convictions, the applicants had received from the Director warning letters.  In each of the letters, the applicants were reminded of the Policy and the number of convictions already recorded against the stall within the past 12 months.

11.  By separate letters dated 25 April 2006, the applicants were informed that the Director intended to terminate their respective tenancy agreement in accordance with the Policy and that the applicants may within seven days make representations to the Department.

12.  On 26 April 2006, both applicants made written representations to the Department, the contents of which are identical.  In their representations, they mentioned that their livelihood would be jeopardised and their employees would lose their jobs. They also promised to review and improve their mode of operation and to keep their stalls in clean and hygienic condition and to comply with the requirements of the Department.  They urged the Department to be lenient.

13.  By separate letters dated 15 May 2006, the Director informed the applicants that he did not consider their representations justify a departure from the Policy.  The applicants were also notified that their respective tenancy would be terminated pursuant to clause 4(b)(1)(i) of the tenancy agreement, effective from 22 May 2006.  They were further advised of their statutory right to appeal to the Board within 30 days.

14.   On 5 June 2006, the applicants lodged their notices of appeal against the Director’s decision to terminate their tenancy agreements (MSA Nos. 14 & 15 of 2006).

15.  In accordance with section 9(1)(a) of the Municipal Services Appeals Board Ordinance, cap. 220, the Director served on the applicants two statements dated 29 April 2006 for the purpose of their appeals.

16.  By two notices of hearing dated 17 July 2006, the Secretary of the Board informed the applicants of the date and venue of the appeal hearing.  The notices further informed the applicants that they may attend the hearing in person or be represented by lawyer or, with the consent of the Board, by their authorized representative.  The applicants were asked to inform the Secretary of the Board the details of the persons attending the hearing by means of the reply slip provided.

17.  In his reply slip dated 1 August 2006, the 1^st applicant stated that the 2nd applicant and one Mr Cheung Wing Chung would accompany him at the appeal hearing.  In her reply slip also dated 1 August 2006, the 2^nd applicant stated that the 1^st applicant and Mr Cheung would accompany her at the hearing.  Both applicants stated the capacity of Mr Cheung as business consultant (業務顧問).

18.  On 18 July 2006, the applicants sent in a joint written submission to the Board.

19.  The appeal hearing took place on 18 August 2006.  The applicants were accompanied by Mr Cheung.  The two appeals were heard together.   At the conclusion of the hearing, the Board dismissed the appeals.  The written decision was handed down on 30 August 2006.

20.  On 16 November 2006, the applicants filed the Form 86A herein.  Leave to apply for judicial review was granted on 27 November 2006.  The Notice of Motion was filed on 7 December 2006.  As a result of this application, the Department has suspended the resumption of the two market stalls until after the determination of this application.

Grounds for judicial review

21.  The Form 86A raised the following grounds:

(1)    Right of representation

The applicants say that the Board had refused to give consent for them to make representations through Mr Cheung and further failed to assess the need for an adjournment so that the applicants could consider instructing legal representative or have an opportunity to better prepare their representations.  It is said that the applicants’ right of representation under section 11 of the Municipal Services Appeals Board Ordinance and Article 35 of the Basic Law had been compromised and the appeal hearing was conducted unfairly.

(2)    Procedural unfairness

During the appeal hearing, the representative of the Director disclosed to the Board that the 1^st applicant had also rented stall no. W5.  The applicants say that the disclosure was unfair in that they were not given prior notice of it and that the Board had drawn adverse inferences against them without affording them a proper opportunity to explain.

(3)   Irrelevant consideration

The applicants further say that the W5 tenancy was an irrelevant consideration, but the Board’s decision was materially affected by it.

22.  For the purpose of understanding and analysing the grounds for this judicial review, it is necessary to look at the matters that the applicants put before the Board and also the reasoning of the Board.

The applicants’ arguments before the Board

23.  In their notices of appeal, the applicants raised the following matters:

(1)    The applicants had operated vegetables stalls for more than 20 years. Before moving into the Tai Po Hui Market, they had operated at the Tai Po Temporary Market.

(2)    The applicants’ convictions were the results of their failure to appreciate that the Regulation and the Policy would be strictly enforced.

(3)   They had heavy family responsibilities. Their two children were at school.  Their livelihood would be severely affected by the termination of their tenancies and the closure of their stalls.  As they were not young and had no other expertise, they would have difficulties competing for other jobs.

(4)   They were remorseful and would undertake not to re-offend.  

24.  In their joint written representation submitted after the Director served the statements for the appeals, the applicants made the following additional points:

(1)   The vegetables business they operated was inherited from businesses started by their respective families some 50 years ago.  They had established close friendship with residents in the Tai Po area.  The termination of their business would mean a termination of this long-standing relationship.

(2)   As the applicants had operated at open markets for many years, they were in the habit of displaying their goods in an unorganized manner. After they moved indoor to the new Tai Po Hui Market, they had not been able to eradicate the old habit completely. This was the reason for their convictions. They did not commit the offences deliberately.     

(3)   The applicants had discussed and reviewed with their employees their method of operation. They had acquired more shelves and tried to better utilize the limited space available so as to avoid taking up public areas. This had proved to be effective.  Since October 2005, they had not been prosecuted by the Department. 

25.  At the hearing before the Board, these points were repeated by the 1^st applicant for himself and also on behalf of the 2^nd applicant.  In relation to point (2) in paragraph 24 above, the 1^st applicant explained that displaying goods outside the stall area was a means to attract customers’ attention, which was how they used to operate their business at the open markets.

The Board’s decision

26.  The Board’s reasons for the decision to dismiss the appeals are that:

(1)   The applicants had repeatedly offended and their convictions spread over 12 months. It is not open to them to say that they offended because they could not eradicate their bad habits within a short time.

(2)   As tenants, the applicants were under a duty to ensure that their employees did not contravene the Regulation. After moving into the new market, the applicants had not taken appropriate measures to adapt to the new environment and to ensure that they did not order too many goods thereby necessitating goods to be placed outside the stall area.

(3)   The applicants cannot reasonably argue that they did not appreciate that the Regulation and the Policy would be strictly enforced.  At the time of the offences, they also had the use of stall no. W5, which was used for storage of goods.  It was only in October 2005 that they took steps to order fewer goods.  Clearly, in displaying the goods on the passageway outside their stalls, the applicants were trying to attract more customers.  The obstruction did not cease after the first one or two convictions.  On the contrary, the area obstructed was even larger than before.  The Director acted properly to terminate the applicants’ tenancies in light of their repeated contraventions, which had affected the safety of and fair competition within the market.

(4)   The applicants’ financial burden is not a sufficient reason for departing from the Policy.

(5)   Further, the 1^st applicant had not been frank in not disclosing to the Board that he was also a tenant of stall no.W5.

(6)   The applicants’ remorse and determination to change came too late.      

Right of representation

27.  The applicants’ first ground for application is that the Board had deprived or suppressed their right of representation.  Their case is that under section 11 of Municipal Services Appeals Board Ordinance, they are entitled to be represented by Mr Cheung at the appeal and as they had given notice to the Board of Mr Cheung’s presence at the hearing, they had a legitimate expectation that they would have access to the assistance of Mr Cheung.  However, the Board did not allow Mr Cheung to make representations or assist them to make representations at the hearing.  The applicants complain that the Board had exercised its discretion under section 11 unfairly by suppressing their right of representation, by failing to give prior notice to the applicants as to whether it would allow Mr Cheung to make representations for the applicants and by not explaining to the applicants what assistance they were entitled to seek from Mr Cheung.               

28.  Although the applicants had made reference to Article 35 of the Basic Law in their Form 86A, this was not pursued at the hearing. Miss Ho’s submission on this ground was confined to the Municipal Services Appeals Board Ordinance and the principle of natural justice.

29.  Section 11 of the Municipal Services Appeals Board Ordinance provides:

“The parties to an appeal may be present at the hearing of the appeal and make representations either in person or by counsel or solicitor or, with the consent of the Board hearing the appeal, by some other person.”

30.  In my view, three points are clear from the section. First, an appellant has the right to choose between making representations in person or through his legal representative or through some other person. In other words, he has three choices and he can choose any one of them. 

31.  Second, if he chooses to make representations through someone other than a lawyer, he has to obtain the consent of the Board.  There is thus no question of any legitimate expectation arising.

32.  Third, the consent is to be given by the Board hearing the appeal. In other words, the consent is to be given at the hearing.  This will dispose of the applicants’ point that the Board should give prior notice to them on whether consent would be given.  Indeed, the Board can only properly exercise its discretion after it has met the party and the proposed representative and has ascertained any relevant information about the proposed representation.  Further in the context of the present application, the applicants only indicated in their reply slips to the Secretary of the Board that Mr Cheung was a business consultant.  They did not inform the Board that Mr Cheung would be their representative or would make representations on their behalf at the appeal.     

33.  As to the complaint that the Board did not allow Mr Cheung to make representations or assist the applicants to make representations, the Director had provided this court with the verbatim transcript of the entire appeal hearing.  It is important to note two matters.  First, Mr Cheung was the first one to address the Board. On his suggestion and invitation, the 1^st applicant proceeded to make representations both on behalf of himself and on behalf of the 2^nd applicant.  Neither Mr Cheung nor the applicants had indicated to the Board that they would like to be represented by and to make representations through Mr Cheung.  It goes without saying that the Board was not asked to give consent to Mr Cheung representing the applicants or making representations on their behalf.  

34.  Second, during the 1^st applicant’s representation, he made the point that they had improved the operation of the business (Transcript, para.48). This led the Board to ask since when had the applicants ceased to contravene the Regulation (Transcript, para.61).   At this point, Mr Cheung interjected to say there was no obstruction since October 2005 (Transcript, paras.63-65).  The 1^st applicant was however reluctant to go along with this answer; he was only prepared to say that there was no further prosecution since October 2005 (Transcript paras.68-72, 78).  It is to be readily appreciated that there is an important difference between no further obstruction of the passageway and not being prosecuted by the Department for obstruction.  As explained by the Board (Transcript, paras.78 & 80), the difference is directly relevant to the applicants’ representations to the Board that they had made improvements to their stalls and the manner of operation, that they were remorseful and would not re-offend.

35.  Understandably, the Board asked the 1^st applicant to clarify whether there were any more instances of obstruction after October 2005.  It is this part of the hearing that forms the thrust of the applicant’s complaint (Transcript paras.83-117).  After the 1^st applicant said that it was not the case that there was no more obstruction, Mr Cheung requested to supplement the 1^st applicant’s answers.  The Board therefore asked him whether he worked at the stalls, to which Mr Cheung replied in the negative. The Board pointed out to Mr Cheung that if he was merely repeating what others had told him, that would be hearsay, and that only things that were within his personal knowledge would be useful.  The Board then asked Mr Cheung what it was that he wanted to say.  Mr Cheung replied that he only wished to express his friend’s points more clearly.  The Board then told Mr Cheung that this would not be necessary because if there were any ambiguity in the 1^st applicant’s representations, the Board would have clarified directly with the 1^st applicant. The Board referred to the incident mentioned in paragraph 34 of this Judgment and reminded Mr Cheung he should not incite the 1^st applicant to lie (教唆佢講大話).  The Board also pointed out that what Mr Cheung was trying to help with was not information he knew from having worked with the applicants, but was out of an attempt to patch up the applicants’ case (想同佢兜).    

36.  Thereafter, the 1^st applicant went on with his representations, elaborating on the points that were contained in the written representations.  In the course of this, the Board had put questions to him to obtain detailed information on, for example, the income of the applicants’ business, the employees engaged by them, the applicants’ family expenses and their children’s education and expenses.  The Board also asked the 1^st applicant what measures had been taken to ensure there was no further obstruction and why despite the Department’s letters of warning, they continued to obstruct the passageway resulting in further convictions.

37.  On behalf of the applicants, Miss Ho submitted that Mr Cheung was clearly trying to give assistance to the applicants when they demonstrated difficulty expressing or responding to the Board’s queries, but was either cut short, rejected or criticised by the Board.  It was said that the Board had no justification for depriving the applicants of the assistance of Mr Cheung. I am unable to accept this submission.

38.  Firstly, while I agree that the transcript shows that Mr Cheung was indeed trying to help the 1^st applicant, it was not because the 1^st applicant was unable to express himself or to answer the Board’s questions.  What the 1^st applicant was having difficulties with was the reasoning underlying his representations and how to reconcile his representations with the facts of the case.   Even then, throughout the hearing, the 1^st applicant did not indicate that he would like to have Mr Cheung to speak for him or to otherwise assist him.  Rather, it was Mr Cheung who felt he had to intervene. 

39.  Secondly, although the hearing before the Board was informal in nature, it is for the Board to regulate the conduct of its proceedings.  The statute also gave the Board a discretion as to whether to permit Mr Cheung to address it.  It should also be remembered that the hearing was inquisitorial in nature.  When Mr Cheung sought to interject, the Board was ascertaining from the 1^st applicant an important piece of fact, namely, whether there was any more obstruction of the passageway after October 2005.  In the circumstances, it must be a reasonable exercise of its discretion and power for the Board to indicate to Mr Cheung that he should only speak on matters within his personal knowledge.  It is immaterial that Mr Cheung did not attend the hearing as the applicants’ witness.  Admittedly, Mr Cheung was not involved in the operation of the stalls. He clearly was not the appropriate person to provide the factual information that the Board was entitled to explore. The submission that the Board had mistreated the role of Mr Cheung cannot be sustained. 

40.  Thirdly, it was also within the Board’s power to decide it was not necessary for Mr Cheung to clarify or supplement the 1^st applicant’s representation, with which it did not find any ambiguity. 

41.  Fourthly, it was not unjustified for the Board to tell Mr Cheung that he should not try to influence the 1^st applicant in answering the Board’s questions or to attempt to improve the applicants’ case with incorrect information.  Apart from the fact that he did not have personal knowledge of the operation of the vegetable business, Mr Cheung had earlier on in the hearing told the Board that there was no more obstruction after October 2005, which was plainly incorrect.  Although the Board’s remark that Mr Cheung should not incite the 1^st applicant to lie was a strong one, it was not an arbitrary remark. 

42.  Miss Ho also submitted that the Board had not dealt fairly with the applicants’ right of representation.  It was said that the Board should have enquired the purpose or reason of Mr Cheung’s presence at the hearing and whether the applicants would nominate Mr Cheung to speak for them.  It was also said that the Board should have enquired with the applicants whether they had difficulty in expressing themselves and what assistance they intended to solicit from Mr Cheung. 

43.  These submissions overlooked the fact that when the hearing started, Mr Cheung was the first to address the Board with the suggestion that the 1^st applicant should proceed to make representation for himself and for the 2^nd applicant. There was no reason for the Board to doubt the 1^st applicant’s intention and ability to directly address the Board.  As a matter of fact, although the 1^st applicant was not very expressive, he was able to articulate his points clearly and systematically.  In this regard, Miss Ho’s suggestion that the 1^st applicant had difficulty articulating himself and responding to the Board’s questions was not borne out by the transcript.  The real difficulty confronting the 1^st applicant was how to overcome the inherent weakness in the applicants’ case, namely, to satisfactorily explain why they continued to offend despite several convictions and the clear warnings from the Department.              

44.  Miss Ho further submitted the Board should have asked the applicant whether they required legal representation or assistance, after Mr Cheung was not allowed to further represent them.  But it was not the case that the Board did not allow the applicants to be represented by Mr Cheung.  Right from the beginning of the hearing, the 1^st applicant was ready and prepared to make representation in person, both for himself and on behalf of the 2^nd applicant.  And as noted above, the 1^st applicant never indicated he required the assistance of Mr Cheung, let alone a lawyer.

45.  Miss Ho also made the point that the applicants are uneducated and cannot be expected to stand up to the challenge and questions of a professional board.  However, it should be noted that the points relied upon by the applicants for their appeals are straightforward and based upon facts that are clearly within their own knowledge and experience. There are no complicated issues of law or fact involved.  As pointed out by Mr Wong, who appeared for the Director, the applicants did not dispute that their tenancies were liable to be terminated on account of their convictions.  Their grounds of appeal were primarily pleas of mitigation. It is true that the Board had put a number of questions to the 1^st applicant both to elicit more factual information and also to test the logic and reasoning of the applicants’ case on appeal.  The questions are relevant and pertinent to the issues before the Board.  The manner in which the questions were put is also not inconsistent with the inquisitorial role of the Board. 

46.  In support of this ground of challenge, Miss Ho referred to the cases of R v. Hong Kong Polytechnic, ex parte Jenny Chua Yee Yan (1992) 2 HKPLR 34, R v. Leicester City Justices, ex p Barrow [1991] 2 QB 260 and Re O (Children) [2005] 3 WLR 1191.  In the Hong Kong Polytechnic case, Mayo J applied R v. Home Secretary ex parte Tarrant [1985] 1 QB 251 and held that the factors that should be taken into account by an administrative tribunal in deciding whether to allow the parties to have legal representation or assistance of a friend or adviser, include: (a) the seriousness of the charge and the potential penalty, (b) whether any points of law are likely to arise, (c) the capacity of a particular person to present his own case, (d) procedural difficulties, (e) the need for reasonable speed in making an adjudication, and (f) the need to achieve fairness between the parties.  The other two English decisions confirm the rights of litigants in person to have the assistance of a McKenzie friend in proceedings in the magistrate courts and family courts.  

47.   These authorities do not advance the applicants’ case.  Throughout the hearing before the Board, Mr Cheung was present with the applicants.  The applicants were not forbidden from seeking the assistance and advice of Mr Cheung or otherwise communicating with him.  None of the rationale in the authorities cited is engaged.  What is however useful to note is the observation made in the ex p Barrow case (at 289D-E & 292D) that a tribunal is entitled to intervene where the McKenzie friend acts, or is likely to act, disorderly or disruptively or his assistance is inimical to the proper and efficient administration of justice.   As noted above, in light of Mr Cheung’s interjection over when did the applicants cease to obstruct the passageway, the Board’s warning was not unjustified.  Still less can it be regarded as undermining the applicants’ right of representation.

48.  Ultimately, it is the question of fairness that lies at the heart of the right of representation.  In this case, there is no evidence from Mr Cheung or the applicants as to what representations Mr Cheung would have made to the Board, but were not made because of the words said by the Board.  There is therefore no indication of what unfair prejudice, if any, had occasioned to the applicants by reason of the Board’s conduct of the appeal hearing.  As had been repeatedly said, judicial review does not operate as an appeal.  It is a discretionary remedy.  If the 1^st applicant had already said all that could fairly and reasonably be said for the applicants, the court would not grant the relief even if it can be shown that their right of representation had been denied or suppressed, which I do not accept is the case.     

Procedural unfairness

49.  The crux of the applicants’ complaints under the ground of procedural unfairness and irrelevant consideration relates to the disclosure of the 1^st applicant’s tenancy in stall no. W5 (“the W5 tenancy”).   In essence, the applicants contend that this piece of information is irrelevant to the applicants’ appeals and that the disclosure of it at the hearing without prior notice was unfair.

50.  The first issue that falls to be decided is whether the W5 tenancy is relevant to the appeals before the Board.  In my view, it is highly relevant to the grounds relied upon by the applicants for their appeals in two major aspects. 

51.  Firstly, it was the applicants’ case before the Board that they did not commit the offences deliberately; rather it was because they had not been able to eradicate their bad habit of displaying the goods outside the stall area.  They also made the point that they had come up with solutions, such as acquiring more shelves, to better utilize the limited space of the stalls.  It is apparent from the exchange between the Board and the 1^st applicant that the Board was concerned to find out what remedial measures had been adopted by the applicants to avoid obstructing the passageway.  In response, the 1^st applicant said they had since October 2005 ordered fewer goods so as to reduce the volume of stock in the stalls. Thus, although the size of their stalls was not a ground expressly relied upon by the applicants for their appeals, whether there was sufficient space inside the two stalls for storage or display of goods was a live issue before the Board.  Plainly, if the applicants had the use of stall no. W5 at the time of their offences, then there was little or no reasonable excuse for the repeated incidents of obstruction.  It would show that they did not have to put their goods outside their stalls.  It would also discredit their case that they did not deliberately offend the Regulation.  Furthermore. it would demonstrate that they had failed to take steps that were well within their means to abate the problem of obstruction.

52.  Secondly, a major ground of the applicants was that the termination of their tenancies would seriously affect their livelihood and also the financial support for their two children who were at school.  The impression they gave in their written and oral representations was that the two stalls were their only means of earning an income. With the existence of the W5 tenancy, the applicants are clearly able to continue selling vegetables and to earn an income.  The fact that stall no. W5 is located at a less favourable location in the market is beside the point.  It is obvious that the existence of the W5 tenancy is material to the applicants’ case on the hardship caused by the Director’s decision.

53.  The next issue that has to be considered is whether the Director’s reference to the W5 tenancy had caused unfair prejudice to the applicants.  Given that this is a relevant fact, it must be proper for the Director’s representative to bring it to the Board’s attention.  The applicants complain that the Director had given them no prior notice of the disclosure.  However, the tenancy is a matter well within their knowledge and it cannot be said that they had been taken by surprise.   As to the submission that they did not have a proper opportunity to deal with the matter, it can be seen from the transcript that the Board had put the fact to the 1^st applicant and invited his response on each of the relevant aspects (Transcript paras.572 – 634).  It was further argued that had prior notice been given, the applicants could have gone to the hearing prepared or better prepared to deal with the point.  Quite apart from the fact that it was reasonably anticipated that the existence of the W5 tenancy would be raised, the applicants have not indicated in these proceedings what other matters they could have put before the Board and which would have materially affect the outcome of the appeals.  The suggestion that they might have produced the information on the turnover of stall no.W5 cannot be supported because the 1^st applicant had told the Board that stall no.W5 was all along used for storage of goods for the vegetable business.   In my view, the applicants have not demonstrated that the disclosure by the Director of the W5 tenancy at the appeal hearing was improper and/or unfair.                        

Irrelevant consideration

54.  It follows from my conclusion that the W5 tenancy is a relevant fact that the Board’s decision cannot be impugned on the ground that it was influenced by an irrelevant consideration.  It is correct that the Board took the view that the applicants had not been forthcoming in respect of the W5 tenancy.  Upon a proper reading of the Board’s Decision, it will be appreciated that this was said in the context of the applicants’ submission on financial hardship.  As analysed above, this is a view that the Board was reasonably entitled to. 

55.  In considering the challenge on the rationality of the Board’s Decision, it is important to take an overview of the applicants’ case.  It cannot be seriously argued, and the applicants had not sought to argue, that their tenancies are liable to be terminated under the tenancy agreements.  Their situation also falls squarely within the Policy.  It is for them to demonstrate exceptional circumstances that justify the Director and/or the Board exercising their discretion to depart from the Policy.  The Board did not accept the  matters advanced by the applicants both in writing and orally to be sufficient justifications.  Having regard to the circumstances of the case, it is a conclusion that the Board was entitled to draw.   

Conclusion

56.  For the above reasons, the application for judicial review is dismissed.  Applying the normal rule of costs follow event, there is an order nisi that the applicants pay the 2^nd respondent the costs of this application, to be taxed if not agreed.