FUNG PING SUM CONNIE v. APPEAL PANEL (ESTATE AGENTS ORDINANCE)

HCAL 514/2021

[2022] HKCFI 277

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 514 OF 2021

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J U D G M E N T

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A.   Introduction

1.  This is the first case in which the Court has had to consider and construe the licensing regime for estate agents under Part III of the Estate Agents Ordinance 511 (“Ordinance”).

2.  The matter comes before the Court in the form of judicial review proceedings, by which the Applicant seeks to challenge the decision dated 19 July 2019 (“Decision”) made by a tribunal of the Appeal Panel under the Ordinance (“Panel”), together with the later reasons for decision dated 21 January 2021 (“Reasons”).  By the Decision, as explained in the Reasons, the Panel confirmed the decision of the Estate Agents Authority (“Authority”) dated 27 December 2018 and made under section 24 of the Ordinance, refusing to grant or renew a licence to the Applicant.

3.  Directions were given for the application to be dealt with at a ‘rolled-up’ hearing, which was heard before me on 20 January 2022. At the hearing, the Applicant was represented by Mr Foster Yim and Mr Jasper Wong of Counsel, and the Authority was represented by Mr Abraham Chan SC, leading Mr John Cheung of Counsel.  As would be expected, the Panel was not represented, and its attendance had been excused.

4.  This is my Judgment.

B.   Registration and Licensing Regime

5.  It may be helpful first to set out the relevant statutory provisions.

6.  The Ordinance’s definition section, section 2, contains the following material definitions (bold and italics in original):

estate agency work … Means any work done in the course of business for client –

(a)  being work done in relation to the introduction to the client of a third person who wishes to acquire or dispose of a property, or to the negotiation for the acquisition or disposition of a property by the client; or

(b)  being work done, after the introduction in the course of that business to the client of a third person who wishes to acquire or dispose of a property or the negotiation in the course of that business for the acquisition or disposition of a property by the client, in relation to the acquisition or disposition, as the case may be, of the property by the client;

estate agent … means a person who in the course of a business (whether or not he carries on that or any other business) does estate agency work;

estate agent’s license, except in section 17(1)(b), means a licence granted under section 17 and designated as being an estate agent’s license and includes any such licence which is renewed under section 23;

7.  Part II of the Ordinance, headed ‘Estate Agents Authority’, provides for the establishment of the Authority (section 4), its principal functions (section 5) and general powers (section 6). The Authority’s principal functions include the regulation and control of the practice of estate agents and sales persons, and taking such action it considers appropriate or necessary to promote integrity and competence amongst, or maintain or enhance the status of, estate agents and salespersons.  The general powers are broadly drawn, permitting the Authority to do such things as are expedient for or conducive to the performance of its functions or which, in its opinion, are necessary to facilitate the proper performance of those functions.

8.  In the context of the public importance accorded to the proper regulation and control of the estate agency industry, reference can also be made to section 7, which empowers the Chief Executive to give to the Authority such written general directions as to the performance of any of its functions as the Chief Executive considers appropriate.

9.  Part III of the Ordinance, headed ‘Registration and Licensing’, sets out the relevant regime.  Section 13 requires the establishment and maintenance of a register for the purpose of the Ordinance, containing particulars as regards every licence granted.  Section 14 requires every licensee to have a registered address.

10.  Focusing on the licensing of estate agents (as opposed to salespersons), the following provisions are material:

15.   Estate agents to be licensed

(1)  Subject to this Ordinance, an individual shall not, either by himself or as a member of a partnership—

(a)  exercise or carry on or advertise, notify or state that he exercises or carries on, or is willing to exercise or carry on, the business of doing estate agency work as an estate agent; or

(b)  act as an estate agent; or

(c)  in any way hold himself out to the public as being ready to undertake, whether or not for payment or other remuneration (whether monetary or otherwise), estate agency work as an estate agent,

unless he is a licensed estate agent.

(2)  Subject to this Ordinance, a company shall not—

(a)  exercise or carry on or advertise, notify or state that it exercises or carries on, or is willing to exercise or carry on, the business of doing estate agency work as an estate agent; or

(b)  act as an estate agent; or

(c)  in any way hold itself out to the public as being ready to undertake, whether or not for payment or other remuneration (whether monetary or otherwise), estate agency work as an estate agent,

unless it is a licensed estate agent.

17.   Licences and conditions

(1)  (a)  The Authority may grant licences for the purposes of this Ordinance.

(b)  Where a licence is granted, the Authority shall designate the licence as being either an estate agent’s licence or a salesperson’s licence.

(2)  A licence granted for the purposes of this Ordinance is not transferable.

(3)  The Authority may attach to a licence such conditions as it considers appropriate and conditions so attached to a licence may include conditions prescribed under section 56.

(4)  Any conditions attached to a licence under this section shall be specified in the licence.

18.   Right to grant of licences

(1)  Notwithstanding sections 19, 20 and 21, where, within the relevant period—

(a)  an individual or company makes an application for the grant of an estate agent’s licence to take effect at any time after the grant thereof and within the relevant period; or

(b)  an individual makes an application for the grant of a salesperson’s licence to take effect at any time after the grant thereof and within the relevant period,

then, subject to subsection (2) and to payment of the prescribed fee and, in the case of an individual, provided he has attained the age of 18 years and in any case, provided also that the applicant has complied with any requirement prescribed under section 56(1)(d) which is applicable to him or it, the applicant shall be entitled to be granted the licence sought.

(2)  (a)  No person making an application in accordance with subsection (1) shall be entitled to be granted the licence sought in the application unless the Authority considers that—

(i)  the person is a fit and proper person to hold the licence; and

(ii)  in the case of a company making an application for the grant of an estate agent’s licence, each of the company’s directors for the time being is a fit and proper person for the purposes of this Ordinance.

(b)  In determining whether a person is fit and proper for the purposes of paragraph (a)(i) the Authority shall have regard to—

(i)  in the case of an individual making an application for the grant of an estate agent’s licence, the matters described in section 19(2)(a), (c) and (d);

(ii)  in the case of a company making an application for the grant of an estate agent’s licence, the matters described in section 20(2)(a);

(iii)  in the case of an individual making an application for the grant of a salesperson’s licence, the matters described in section 21(3)(c).

(c)  In determining whether a person who is a director of a company making an application for the grant of an estate agent’s licence is a fit and proper person for the purposes of this Ordinance, the Authority shall have regard to the matters described in section 20(3)(a), (c) and (d).

(3)  In this section the relevant period (有關期間) means the period determined for the purposes of this section by the Authority with the prior approval of the Secretary and specified in a notice published in the Gazette.

19.   Grant of estate agent’s licences to individuals restricted

(1)  An individual shall not be eligible to be granted or hold or continue to hold an estate agent’s licence unless—

(a)  he has attained the age which is for the time being prescribed for the purposes of this subsection;

(b)  he satisfies the Authority—

(i)  that he has a good understanding of any regulations made for the time being under section 56(1)(j) and which apply to a licensed estate agent;

(ii)  that he has the educational qualifications or experience or both prescribed for the time being under section 56(1)(d) and which apply to him; and

(iii)  that he complies with such other requirements (if any) as are prescribed for the time being under section 56(1)(g) and which apply to him; and

(c)  the Authority otherwise considers him a fit and proper person to hold an estate agent’s licence.

(2)  In determining whether or not a person is fit and proper for the purpose of holding an estate agent’s licence, the Authority shall have regard to the following—

(a)  the fact that the person is an undischarged bankrupt, or has, within the 5 years immediately prior to the day on which the Authority considers, or, where appropriate, begins to consider the matter, made a composition or scheme of arrangement with his creditors;

(b)  the fact that the person is a director or officer of a company which is for the time being disqualified under this Ordinance for holding a licence, or was a director or officer of that company at the date when the company was so disqualified;

(c)  the fact that the person is a mentally disordered person or a patient within, in either case, the meaning of section 2 of the Mental Health Ordinance (Cap. 136);

(d)  any conviction, whether in Hong Kong or elsewhere, of the person for any offence (other than an offence under this Ordinance), being a conviction as regards which it was necessary to find that the person acted fraudulently, corruptly or dishonestly; and

(e)  any conviction of the person under this Ordinance in respect of which he has been sentenced to imprisonment, whether the sentence is suspended or not.

22.   Applications for grant of licences

(1)  An application for the grant of a licence shall be made to the Authority in the prescribed manner and be in the prescribed form and it shall also contain such particulars (if any) as are prescribed under section 56(1)(b) and apply in relation to it.

(2)  Where a licence is granted under this Ordinance, the Authority shall cause notice thereof to be published in the Gazette.

23.   Renewal of licences

(1)  A licensee may apply in the prescribed manner to the Authority to renew the relevant licence.

(2)  Where an application is allowed under this section, subject to compliance with any regulations under section 56 which are relevant to the application, the Authority may in allowing the application do all or any of the following, namely, vary or remove conditions already attached to the licence or attach new conditions to the licence.

(3)  Pending the determination of an application under this section, the Authority shall, where the licence whose renewal is sought has expired, grant a provisional licence to the applicant and whether or not conditions were attached to the licence whose renewal is sought, the Authority when granting such a provisional licence may attach thereto such conditions (if any) as it considers appropriate.

(4)  Where an application under this section is allowed, the Authority shall cause notice thereof to be published in the Gazette.

(5)  (a)  An application under subsection (1) may, and may only, be made before the licence in respect of which renewal is sought expires.

(b)  Where an application under this section is allowed, the period of renewal shall be such as the Authority specifies when allowing the application and such period shall begin to run or, where appropriate, shall be deemed to have begun to run, immediately after the day on which the relevant licence would otherwise have expired.

24.   Refusal of application for licence or renewal

(1)  The Authority may refuse an application for the grant or renewal of a licence if, and only if it is satisfied that any 1 or more of the requirements of such of the following as apply in the particular case, namely, section 18, 19, 20, 21 or 22, are not met or complied with by the applicant or that any 1 or more of such requirements or other provisions of regulations under this Ordinance as are relevant to the application are not complied with or otherwise satisfied.

(2)  Where an application for the grant or renewal of a licence is refused, the Authority shall, within the period of 21 days beginning on the date of the refusal, notify the applicant in writing of its decision and such notification shall state the reasons for the decision.

25.   Application for licence, etc. not to be made within prescribed period

(1)  Where—

(a)  an application for the grant or renewal of a licence is refused; or

(b)  a licence is revoked by the Authority,

the applicant or, where appropriate, the former licensee shall not be entitled to make an application under section 22 or 23 within the period prescribed for the purposes of this section.

(2)  Notwithstanding subsection (1), the Authority may allow an application under section 22 or 23 within the period prescribed for the purposes of this section if, and only if, it is satisfied by the applicant that to refuse to allow the application would, having regard to the particular circumstances of the case, be unreasonable.

(3)  Subject to subsection (2), an applicant described in subsection (1) shall, during the period prescribed for the purposes of this section, be regarded as being disqualified for holding a licence.

26.   Form of licences, payment of licence fee and duration of licences

(1)  A licence shall be in the prescribed form and shall not have effect unless and until the relevant prescribed fee has been paid by or on behalf of the applicant for the licence.

(2)  Subject to any regulation made in that regard under section 56, the period during which a licence is to be in force shall be that specified in the licence.

27.   Suspension or revocation of licences

(1)  Subject to the provisions of this section, the Authority may suspend a licence for such a period of time as it thinks fit, or revoke a licence.

(2)  The Authority may suspend or revoke a licence—

(a)  if in the case of an estate agent’s licence, a notice is received under section 40(1);

(b)  if in the case of a salesperson’s licence, a notice is received under section 40(1) and if, and only if, the Authority considers that the relevant licensee is no longer a fit and proper person to hold a salesperson’s licence within the meaning of section 21(2)(c);

(c)  if in the opinion of the Authority, the licensee has been generally doing estate agency work in a manner which, in such opinion, is contrary to the public interest as perceived by it and if in such opinion to permit him to continue so to do such work in such manner would be contrary to the public interest as so perceived;

(d)  if the relevant licensee is not eligible to hold or continue to hold the licence under section 19, 20 or 21, or is not entitled to be granted the licence under section 18, as the case may be;

(e)  if the relevant licensee has failed to pay any fee, charge or penalty charged or imposed under this Ordinance, and the period within which it should have been paid has expired;

(f)  if the relevant licensee has failed to comply with any of the conditions attached to the licence;

(g)  if the relevant licensee has contravened or failed to comply with any requirements or other provisions of this Ordinance; or

(h)  if the relevant licensee has contravened or failed to comply with an AML/CTF requirement.

(3)  (a)  Where the Authority proposes to suspend or revoke a licence it shall give the relevant licensee written notice of the proposal and the reasons for it.

(b)  A notice under this subsection shall state that within the period of 21 days beginning on the date of the notice, or within such longer period as the Authority may allow in the particular case, representations regarding the proposed suspension or revocation, as the case may be, may be made in writing to the Authority by or on behalf of the licensee concerned (which representations are hereby authorized to be made).

(4)  Where representations are made pursuant to subsection (3)(b), the Authority shall not suspend or revoke the licence concerned without having considered the representations.

(5)  (a)  Where the Authority suspends or revokes a licence pursuant to this section, it shall—

(i)  within the period of 21 days beginning on the date of the suspension or revocation, notify the relevant licensee or, where appropriate, former such licensee, in writing of the decision and such notice shall state the reasons for the Authority’s decision together with, in the case of a suspension, the period for which the relevant licence is suspended; and

(ii)  publish notice of the decision in the Gazette.

(b)  A suspension or revocation referred to in paragraph (a) shall take effect on the date of the relevant notice under paragraph (a)(i), or such later date as may be specified in the notice, and such suspension or revocation shall have effect as regards a particular case notwithstanding any 1 or more of the following, namely, that the licensee concerned has appealed under section 31, that the time for the making of such an appeal has not expired, or that a notice has not yet been published pursuant to paragraph (a)(ii).

(6)  Where a licence is suspended under this section, the Authority may in its discretion shorten the period for which the licence is suspended or lift the suspension.

(7)  (a)  Where the Authority shortens the period of suspension of a licence or lifts such a suspension, it shall—

(i)  within the period of 21 days beginning on the date of its decision, notify the relevant licensee or, where appropriate, the former such licensee in writing of the decision and such notice shall state the period for which suspension of the relevant licence has been shortened; and

(ii)  publish notice of the decision in the Gazette.

(b)  The shortening of a period or the lifting of a suspension referred to in paragraph (a) shall take effect on the date of the relevant notice under paragraph (a)(i) to the relevant licensee or, where appropriate, the former such licensee, or such later date as may be specified in the notice, and such a shortening or lifting shall have effect as regards a particular case notwithstanding the fact that such notice has not yet been published pursuant to paragraph (a)(ii).

(8)  Where any licence is suspended or revoked under this section, no fee or other sum paid in respect of the grant or renewal of the licence shall be refunded.

11.  The argument in this case turns to an extent on whether the applicable section for consideration of the Applicant’s application for a licence was section 18 or section 19.  Further, the form of the application is governed by either section 22 or section 23.  For the purposes of the specific challenge now sought to be mounted, it is section 24 which provides for refusal of application for licence or renewal.  That is the section invoked by the Authority in its decision.

12.  Part IV of the Ordinance, headed ‘Investigations and Discipline’, includes section 31 relating to ‘Appeals’, granting a right of appeal where, amongst other things, an application for the grant or renewal of a license is refused under section 24: see section 31(1)(a).

13.  Such appeals are heard by a tribunal consisting of not less than three members of the Panel established under section 32. In relation to an appeal under section 31, the appointed tribunal may confirm, vary or reverse any of the decision to which the appeal relates: see section 32(8).  It is common ground that such an appeal is a de novo hearing.

14.  Section 56 of the Ordinance relates to the making of Regulations, by which the Authority (with the approval of the Secretary for Transport and Housing), may, amongst other things:

(b)  prescribe the manner in which, the form of and particulars to be contained in applications of any class or description for the grant or renewal of a licence

(d)  prescribe any educational qualifications or experience or both required to be held for the purposes of section 18, 19 or 21

15.  The Estate Agents (Licensing) Regulation Cap 511A (“Regulation”) was created pursuant to section 56 of the Ordinance. Amongst its provisions is section 7, which materially provides as follows (bold and italics in original):

7.   Educational qualifications and experience for licensees

(1)  Subject to the other provisions of this section, no licence shall be granted to or renewed in favour of an individual unless— 

(a)  he has completed an educational level of Form 5 of secondary education or its equivalent and has, within 12 months immediately before the date of his application for the grant of the licence, passed the relevant examination; or

(aa)  where he applies for the grant of a licence of the same type as the one that he has held, he complies with the requirements mentioned in subsection (4A); or

(ab)  …; or

(ac)  where he applies for the grant of an estate agent’s licence, he complies with—

(i)  the requirements mentioned in subsection (4C); or

(ii)  the requirements mentioned in subsection (4CA); or

(b)  in the case of an application for the grant of a licence made before 1 January 2002—

(i)  he is an existing practitioner or a senior practitioner and has complied with the relevant condition; or

(ii)  he is a professional surveyor and has done estate agency work in Hong Kong for a period or periods totalling at least 12 months within the period of 24 months immediately before the implementation date; or

(c)  the licence to be renewed is one granted or renewed under this subsection.

(2)  A licence may, on or before 31 December 2001, be granted to or renewed in favour of a person who is an existing practitioner or a senior practitioner for a period expiring not later than that date subject to the requirement that the person shall comply with the relevant condition on or before that date.

(3)  No licence granted to any person under subsection (2) shall be renewed on or after 1 January 2002 unless—

(a)  he has complied with the relevant condition before that date; or

(b)  the Authority has granted him an extension under subsection (4) and—

(i)  the period of extension has not expired; or

(ii)  he has complied with the relevant condition within the period of extension.

(4)  Where an existing practitioner or a senior practitioner who does not comply with the relevant condition before 1 January 2002, satisfies the Authority that the reason he did not so comply was due to exceptional circumstances (including the case where the practitioner is incapacitated by ill health), then the Authority may, if it considers that it would be oppressive and unjust not to do so, grant an extension of time, expiring not later than 31 December 2002, within which period the practitioner must comply with the condition.

(4A)  The requirements referred to in subsection (1)(aa) are—

(a)  the applicant makes the application within the relevant period; and

(b)  where the licence that he has held was granted or renewed subject to the requirement to comply with the relevant condition on or before a date specified in the licence, he has fufilled that requirement.

(4B)  The requirements referred to in subsection (1)(ab) are—

(a)  the applicant—

(i)  holds an estate agent’s licence; or

(ii)  has held an estate agent’s licence and makes the application within the relevant period; and

(b)  where the licence that he holds or has held (as the case may be) was granted or renewed subject to the requirement to comply with the relevant condition on or before a date specified in the licence, he has fulfilled that requirement.

(4C)  The requirements referred to in subsection (1)(ac)(i) are—

(a)  the applicant—

(i)  holds a salesperson’s licence; or

(ii)  has held a salesperson’s licence and makes the application within the relevant period; and

(b)  (i)  the licence that he holds or has held (as the case may be) was granted under subsection (1)(a), or was so granted and renewed under subsection (1)(c); and

(ii)  he has at any time passed a qualifying examination for estate agents; or

(c)  (i)  the licence that he holds or has held (as the case may be)—

(A)  was granted under subsection (1)(b)(i), or was so granted and renewed under subsection (1)(c); or

(B)  was granted or renewed subject to the requirement to comply with the relevant condition on or before a date specified in the licence, and he has fulfilled that requirement; and

(ii)  (A)  he has at any time passed a qualifying examination for estate agents; or

(B)  where he is a senior practitioner, he has completed a training course for estate agents on or before 31 December 2001; or

(d)  the licence that he holds or has held (as the case may be) was granted under subsection (1)(b)(ii), or was so granted and renewed under subsection (1)(c).

(4CA)  The requirements referred to in subsection (1)(ac)(ii) are the applicant—

(a)  holds a CIREA Certificate; and

(b)  has completed the training course provided under subsection (4CB)(a) and has, within 12 months immediately before the date of the application, passed the examination set under subsection (4CB)(b).

(4CB)  The Authority—

(a)  may provide a training course to a holder of a CIREA Certificate on the subjects of the examination set under paragraph (b); and

(b)  may set an examination for a holder of a CIREA Certificate to test the holder’s competence in doing estate agency work in Hong Kong.

(4D)  In subsection (4C)(b) and (c), “qualifying examination for estate agents” (地產代理資格考試) and “training course for estate agents” (地產代理訓練課程) respectively mean a qualifying examination and a training course specified by the Authority as such pursuant to subsection (5).

(4E)  For the purposes of subsections (4A), (4B) and (4C), a person makes an application for the grant of a licence within the relevant period if the application is made within 24 months from—

(a)  where the licence that the person has held was suspended—

(i)  subject to subparagraph (ii), the date on which the suspension took effect;

(ii)  if the suspension had ceased to have effect before the licence expired, the day following the expiration of the licence;

(b)  in any other case, the day on which the licence ceased to be valid, whether by reason of its expiration or otherwise.

16.  Note can be taken of the various references in section 7 of the Regulation to steps which might be taken on or before 31 December 2001 and on or after 1 January 2002.

C.   Material Facts

17.  The material facts can be traversed economically.

18.  The Applicant was convicted of possession of dangerous drugs on 8 June 2007, and was fined HK$5,000.

19.  The Applicant was granted an estate agent’s licence (“Licence”) by the Authority on 3 March 2009.  There is no suggestion that, when applying for the Licence, the Applicant was in any way at fault for failing to report her conviction to the Authority between 2009 and 2011.

20.  Between 2011 and 2016, the Applicant submitted seven application forms to the Authority to apply for the renewal of the Licence.  Though some of the detail on the forms was in fact filled in by colleagues, the Applicant signed each application form.  Though the Applicant submitted Chinese language forms, I shall refer to the English language version.

21.  The particular application form, ‘Form 11 – Application for Renewal of Estate Agent’s Licence (Individual)’, is a statutorily prescribed form under the Regulation.  The content of Form 11 is materially identical to that of ‘Form 2 – Application for the Grant of Estate Agent’s Licence (Individual)’.  Therefore, as to the Form, there was and is no material difference between application for grant or for renewal.

22.  In each application Form 11, the Applicant was asked to tick ‘yes’ or ‘no’ to the questions:

1.  Are you an undischarged bankrupt or have you within the 5 years immediately prior to the date of this application made a composition or scheme of arrangement with your creditors/

2.  Are you a director or officer of a company which is now disqualified under the Estate Agents Ordinance (Cap. 511) for holding a licence, or were you a director or officer of that company at the date when the company was so disqualified?

3.  Are you a mentally disordered person or a patient within the meaning of section 2 of the Mental Health Ordinance (Cap. 136)?

4.  Have you ever been convicted, whether in Hong Kong or elsewhere, on the basis of any fraudulent, corrupt or dishonest acts?

5.  Have you ever been convicted under the Estate Agents Ordinance (Cap 511) in respect of which you have been sentenced to imprisonment, whether the sentence is suspended or not?

23.  As can be seen from the statutory provisions set out above, those five questions track, in the same order, the five matters identified in section 19(2)(a) to (e) of the Ordinance.

24.  For present purposes, the focus is on questions 4 and 5.  In all the application forms the Applicant ticked the ‘no’ box to those questions.  The answer ‘no’ was correct; the Applicant has never been convicted either (a) on the basis of any fraudulent, corrupt or dishonest act, or (b) under the Ordinance.

25.  However, in addition to the prescribed Forms, the Authority required applicants for grant or renewal of licences to complete a supplementary form.  Though it differed in content over the years, it broadly consistently: (1) stated that the provisions for rehabilitation under the Rehabilitation of Offenders Ordinance (commonly referring to “spent” convictions) did not apply to questions 4 and 5 in the Forms; (2) explained that in considering whether the applicant is a suitable person to holder continue to hold a licence, apart from questions 4 and 5, the Authority would consider other criminal records; and (3) asked the applicant to answer the question whether he or she had been convicted of any criminal offence (apart from certain minor offences) in Hong Kong or elsewhere.

26.  The Applicant points to the particular difference between the supplementary form filled out by her in 2011, and the other subsequent supplementary forms.  The factual difference between the versions of the forms is said to give rise to one of the intended grounds of judicial review (see below).

27.  The potential answers to the relevant question about any previous convictions were boxes providing for ‘yes’, ‘no’ and ‘not sure’. In each of the supplementary forms, the Applicant ticked the ‘no’ box to that relevant question – save for one form, in 2016, which was originally ticked ‘not sure’, but later substituted with ‘no’.  The material application (later refused) was made in 2017.

28.  On 30 October 2017, the Authority wrote to the Police to seek the Applicant’s criminal record.  The Police replied on 2 November 2017, disclosing the Applicant’s previous conviction in 2007.  Accordingly, in December 2017, the Authority invited the Applicant to give further explanation and to give a cautioned statement.  She did so on 21 May 2018, explaining that she was under the mistaken belief that she did not have a criminal record because she only paid a fine upon pleading guilty.

29.  The Authority reported the Applicant’s non-disclosure to the Police on 11 June 2018, as potentially evidencing the commission of an offence under section 55(1)(c) of the Ordinance, relating to the making of any statement or furnishing any information which is false or misleading in a material particular in connection with any application for the grant or renewal of an estate agent’s licence.  However, no further action was taken by the Police.

30.  In its decision dated 27 December 2018 (notified to the Applicant on 3 January 2019), and though expressly stating that (a) the Applicant’s conviction does not belong to the category of those in section 19(2)(d) of the Ordinance and (b) the Authority placed no weight on the Applicant’s criminal record from some 11 years previously, the Authority nevertheless refused the Applicant’s application for renewal of Licence on the basis that the Applicant failed to report her conviction in application forms submitted between 2011 and 2017.

31.  The Applicant appealed to the Panel, and the hearing was held before the tribunal of the Panel on 16 July 2019.  On 29 July 2019, the Panel dismissed the appeal, but no reasons were provided.  Eventually, after various requests for reasons, the Panel provided the Reasons on 13 January 2021 (approximately one and a half years after the hearing of the appeal, and the Decision).

32.  In the Reasons, the Panel held that the Authority could rely on section 19(1)(c), permitting the Authority to take into account any factor it thinks appropriate in deciding whether the Applicant is a fit and proper person to hold an estate agent’s licence.  Reference was also made to section 5 of the Ordinance, relating to the principal functions of the Authority.

D.   Intended Grounds of Review

33.  In the Form 86, drafted by Mr Yim and Mr Wong, the following broad intended grounds of judicial review are identified:

(1)  Ground 1 – Error of Law: misinterpretation and/or misapplication of sections 18 and 19 of the Ordinance.

(2)  Ground 2 – Error of Fact: no non-disclosure in the application form in 2011.

(3)  Ground 3A – Fundamental Rights: the Tribunal’s delay in providing the Reasons disproportionately interfered with the Applicant’s right to private property

(4)  Ground 3B – Failure to Take Into Account Relevant Considerations: the failure to take into account the effect of the delay in the Reasons explaining the Decision.

34.  It is fair to say that the focus of oral submissions by Mr Yim at the hearing was very much on Ground 1.

35.  It is also to be noted that there is no Wednesbury unreasonableness challenge.

E.   Ground 1: Error of Law

36.  The error of law put forward is the Panel’s reliance on section 19(1)(c) of the Ordinance, as permitting the Authority to take into account various factors when considering whether the Applicant was a fit and proper person to hold an estate agent’s licence.  Mr Yim submits that:

(1)  Section 19 is inapplicable, because it is section 18 which is applicable; and

(2)  under section 18(1), section 18(2)(a)(i) and section 18(2)(b)(i), when determining whether a person is fit and proper and therefore entitled to be granted the licence sought, the Authority shall have regard to section 19(2)(a), (c) and (d) – and not to section 19(1)(c).

37.  Mr Yim submits that this reflects the legislative intention that there is a higher threshold for denying an existing estate agent’s licence renewal application, as compared with a fresh application for an estate agent’s licence.

38.  Mr Yim notes the contention advanced in the evidence put forward on behalf of the Authority that section 18 was intended to be applicable only to a “transitional period of three years”, so as to allow the trade to meet the full licensing requirements.  But, Mr Yim points out there is nothing in the section itself to suggest that section 18 is intended for a transitional period only and is now inoperative.  Rather, by reference to the “relevant period” provided for in section 18(3), one can find a reference to “relevant period” in section 7(4E) of the Regulation, namely the period of 24 months following the expiry of the previous licence.

39.  Mr Yim says the Applicant did apply within that period, so section 18 was the applicable section.  On that basis, when considering fitness and properness, the Authority should have dealt with the matter under section 18(1), section 18(2)(a)(i) and section 18(2)(b)(i), and therefore should have had regard only to the matters set out in section 19(2)(a), (c) and (d) – and not to section 19(1)(c) or the other paragraphs of section 19(2) which might have been applicable under section 19(1)(c).

40.  Mr Chan submits that – even leaving aside that the root question before the Authority and the Panel was simply whether the Applicant was a fit and proper person to hold a licence – it is section 19 which is the operative provision.  Under section 19, an individual shall not be eligible to be granted or hold or continue to hold a licence unless certain requirements are fulfilled.  Those requirements include possession of the relevant educational qualifications or experience, and that the Authority “otherwise considers him a fit and proper person to hold an estate agent’s licence”: section 19(1)(c).  On that basis, Mr Chan submits, an applicant who is either re-applying for or renewing a licence must satisfy the conditions contained in section 19, including section 19(1)(c), before he or she may be eligible to be granted or hold or continue to hold a licence.

41.  Further, Mr Chan submits that in so far as Mr Yim suggests that the “relevant period” in section 18 is to be equated with the “relevant period” of 24 months applicable to section 7(4E) of the Regulation, that is simply fallacious.

42.  Further, Mr Chan says that the Applicant’s reading of section 18 flies in the face of its clear legislative history. The Authority introduced the licensing system on 1 January 1999, which amongst other things made it a requirement for practitioners to have completed an educational level of Form five of secondary education or its equivalent.  However, whilst the aim was to raise standards, it was recognised that the new educational requirement would cause problems for existing practitioners in the short-term.  Hence, section 18 was introduced as a “grandfather provision” for the right to a grant of a licence during a three-year transitional period.

43.  In support of that submission, Mr Chan refers to:

(1)  the minutes of a meeting of the Bills Committee on Estate Agents Bill held on 30 April 1996, in which the clause by clause examination of the Bill included looking at Clause 18 (as became section 18 of the Ordinance).  The relevant paragraph states (underlining as in original):

10.  Members asked for the Administration’s stance on the suggestion for a transitional period of at least two years to allow the trade to meet the full licensing requirements.  Mr SHIU [then Principal Assistant Secretary for Housing] advised that the Administration was fully aware of the need to ensure a smooth transition to prevent undue disruption to the trade and the service to the public.  It was also the Administration’s intention to have transitional licences issued as soon as essential aspects of the regulatory system such as licensing requirements and practising guidelines were available.  Mr SHIU emphasised that the length of the transitional period would have to be determined by the EAA [ie. the Authority] taking into consideration the progress of implementation of the regulatory system.  It would be imprudent to prescribe a fixed transitional period at that stage, as a member suggested, as it would limit the operational flexibility of the EAA.  While members agreed that the EAA should be accorded flexibility, they urge the Administration to consider stipulating a period of say two years as the transitional period and to undertake prior consultation with the trade on transitional arrangements.

(2)  a discussion paper prepared in May 2001 for the Legislative Council Panel on Housing, to brief members on the then proposed amendments to the Regulation, which includes the following paragraphs, under the heading ‘Arrangement for existing practitioners’:

4.  To ensure that the standard of service provided by estate agents reaches a stipulated standard, new entrants to the trade are required to have an educational qualification of Form five and passage of a qualifying examination.

5.  When the licensing system was introduced, the aim was to strike a balance between raising the standard of service and minimising disruptions to the trade. Existing practitioners are granted conditional licences to continue to practice.  The educational qualification of completion of Form five is not applicable to them.  Practising agents are given three years until 31 December 2001 to pass the qualifying examination.  In recognition of the experience of some senior members of the trade, estate agents who have six years’ experience in estate agency work are exempted from the examination.  They are only required to complete a training relevant to the estate agency work within the three year period.  Those who are unable to fulfil these requirements will not have their licenses renewed after 31 December 2001 and, should they apply for the licence again in future, they will be dealt with as new entrants to the trade and subject to the educational and other requirements.

44.  I accept that those statements show that there was at least discussion – though no clear decision – on a potential transitional arrangement of the sort which might be regarded as a “grandfather provision”.  The reference to a three-year period ending 31 December 2001 – and the idea that it is transitional – also has some echo in section 7 of the Regulation: see section 7(1)(b), (2), (3) and (4), together with the definition of “existing practitioner” to be found in section 2 of the Regulation.

45.  On the other hand, I agree with Mr Yim that there is nothing on the face of section 18 itself which suggests that it is transitional.

46.  What can be noted is that section 18 is a provision relating to “right” or “entitlement” to the grant of a licence.  This is in distinction to section 19, which is dealing with the matter of “eligibility”.  Certainly, the two sections appear to be dealing with separate concepts, and the introductory words to section 18 identify that its provision is intended to apply “notwithstanding sections 19, 20 and 21”.

47.  If necessary to find it, there is also some possible logic in the apparent limitation for the purpose of considering whether a person is fit and proper to hold a licence under section 18(2)(a)(i) and (b)(ii) to those matters described in section 19(2)(a), (c) and (d) – but not (b) and (e).  Paragraphs (b) and (e) relate respectively to prior disqualification and conviction under the Ordinance, which may have been temporally irrelevant to the intended operation of section 18.

48.  Of course, it is also right that section 18 itself has some express intended temporal limitation.  Any relevant application under the section is one made “within the relevant period” and is further to be an application for the grant of a licence to take effect both (1) at any time after the grant thereof (though this is somewhat odd wording, because it is unusual to think of a licence taking effect before it is granted), and (2) “within the relevant period”.  Therefore, the “relevant period” is relevant to both the making of the application for the grant of the licence and the timing of its taking effect.

49.  But ultimately the debate about section 18 seems to me to be utterly sterile.  This is because the section is only operable when applications are made “within the relevant period”, where “the relevant period” is specifically intended to be defined for the purposes of section 18 as meaning the period determined by the Authority with the prior approval of the Secretary and specified in a notice published in the Gazette.  However, it is common ground that no such determination of “the relevant period” was ever made by the Authority with the prior approval of the Secretary and published in the Gazette.

50.  Therefore, as a matter of both law and fact, no person could ever have made an application under section 18.  Quite simply, the section never became operable.

51.  The debate also seems to me to be sterile because the relevant consideration under either section was simply whether the Applicant was to be considered a fit and proper person to hold an estate agent’s licence.

52.  As to the proper approach to what became section 19(2)(a) to (e) of the Ordinance, Mr Chan refers to a letter dated 22 July 1996 from the Government Secretariat Housing Branch to the clerk to the Bills Committee to study the Estate Agents Bill, which includes the following (bold and underlining in original):

Clause 19:   Grant of estate agent’s licence to individuals restricted

“Shall have regard to” circumstances

The various circumstances mentioned in Clause 19(2)(a) to (e) which the Estate Agents Authority (EAA) “shall have regard to” are those situations and factors that the Authority should take into account in considering whether a licence should be granted to individuals.  However, they are not intended to be rigid licensing criteria or the only factors to be considered.

53.  But, even absent that material, it seems to me to be plain and obvious from the provision and the context of it – including the description of the principal functions of the Authority set out in section 5 of the Ordinance – that the list of matters to which the Authority shall have regard is a non-exhaustive list of the (minimum) matters to which the Authority is mandated to have regard.  In other words, the Authority cannot consider a person to be fit and proper without having regard to those listed matters; but, when considering whether a person is fit and proper the Authority is not limited to having regard only to those listed matters.  Fitness and properness is a broad concept, requiring an assessment of moral worth.  Albeit that it is understandable that the consideration might require certain specific factors to be taken into account, it would be anathema to limit the matters which might be taken into account, at least absent clear wording that account can be taken only of those matters listed.  I reject Mr Yim’s submission that there is a ‘hard edge’ to the consideration, delineated by the matters specifically listed in the section.

54.  I also reject Mr Yim’s submission as to the proper interpretation of section 19(2)(d).  That part of the section relates to convictions as regard which it was necessary to find that the person acted fraudulently, corruptly or dishonestly.  In other words, it relates only to those convictions where fraud, corruption or dishonesty was a necessary element to the conviction.  It does not extend to convictions where there may have been some contextual fraud, corruption or dishonesty but where those matters were not a necessary element of the crime.  It is easy to think of crimes where fraud, corruption or dishonesty is not a necessary element to a conviction, but where the fact of conviction might be relevant to an assessment of fitness and properness: for example, crimes of sexual assault or other violence.

55.  Lest it be thought that a broad approach to the consideration of fitness and properness gives the Authority entirely free rein, there is of course the supervisory jurisdiction of the Court in judicial review.  If the Authority or Panel were to take something into account which was plainly irrelevant to the consideration, or fail to take into account something which was plainly relevant to the consideration, an illegality or Wednesbury unreasonableness challenge might be mounted.

56.  In cases involving someone with a previous conviction, the core question on the consideration of fitness and properness is whether, despite that prior conviction, the person has now shown himself or herself to be fit and proper for the purpose of the application.  To an extent at least, consideration might be given to whether there has been a change of character or reformation.  In those circumstances, the repeated failure by the Applicant properly to disclose her 2007 conviction – which can be viewed as a failure to give full and honest disclosure – was potentially material to the Authority’s consideration of her fitness and properness at the time of her last application for a licence, and the Authority and Panel cannot properly be criticised for taking it into account.

57.  There may be many who would think that the decision to refuse to renew the licence was ‘harsh’ in the circumstances, but the weighing exercise in the assessment of fitness and properness is by statute to be performed by the Authority, and on appeal by the Panel.  In this case, there was no error of law and there is no public law justification for interfering in the decision of the Authority or the Panel.

58.  I do not think Ground 1 is reasonably arguable.

F.   Ground 2: Error of Fact

59.  Ground 2 focuses on the question whether the Applicant’s answer to the supplementary form question about previous convictions – sent with her application dated 20 June 2011 – was or was not correct.

60.  The argument proceeds on the basis that the proviso in the form stated that the rehabilitation provisions as to “spent” convictions did not apply to questions 4 and 5 under the declaration in the Form – but did not suggest that the rehabilitation provisions did not apply to the relevant question asked outside the Form itself, but in the supplementary form.

61.  Mr Yim then submits that the error of fact was a material part of the Panel’s reasoning, so that all four of the matters ordinarily required for the court to intervene to correct an erroneous conclusion on a question of fact – see §§38-39 of my decision in He Wei v Director of Immigration [2020] 2 HKC 648 – are satisfied.

62.  First, I am not sure that the error is so clear as Mr Yim suggests.  The 2011 supplementary form told the Applicant to disclose “ALL conviction records” (emphasis in original), because the Authority was going also to consider convictions in addition to those specified in questions 4 and 5.

63.  But, in any event, I agree with Mr Chan’s submission that the Panel in fact made no “finding” as such that the Applicant had failed to disclose a conviction in the 2011 supplementary form.  The relevant factual matter founding the Authority’s decision and the Panel’s Decision was the repeated and multiple non-disclosure over a number of years.  Repeated, multiple non-disclosure was not controversial.  I do not think it material to the decision whether the non-disclosure was on six or seven occasions.

64.  Put shortly, I do not think there is any reasonably arguable suggestion that there might have been a different decision but for the alleged factual error.  There is no merit in this proposed ground.

G.   Grounds 3A and 3B

65.  I can deal with both these grounds quickly. Neither was pressed by Mr Yim at the hearing.  Neither has any merit.

66.  Ground 3A fails at the first hurdle.  A licence under the Ordinance is not “property” for the purposes of Articles 6 and 105 of the Basic Law.  It is not transferable, nor marketable, nor obtained at market price.  Further, even if property rights are engaged, the Applicant accepts that the first and second stages of the proportionality test are satisfied, but made no real attempt to identify why the third and fourth stages of the proportionality test are not satisfied.  It can also be noted that it was open to the Applicant to have made a fresh application for a licence on any date on or after 27 December 2019 (and I do not think she needed the Reasons for the Decision to be able to make such an application).

67.  Ground 3B is illogical.  As Mr Chan submits, it is paradoxical to say that the Panel should have somehow taken into account its own apparent delay in providing reasons for the decision it had already made some time earlier, so as to reverse its decision by reason of its delay.

H.   Result

68.  In light of my above views, I dismiss the application for leave to apply for judicial review.

69.  Further, even had I thought that any of the grounds advanced were reasonably arguable, I would obviously have dismissed the substantive application.

70.  I see no reason why costs should not follow the event.  In the circumstances, I order the Applicant to pay the Authority’s costs, to be taxed if not agreed.  The Authority properly appeared as an interested party, and its submissions were of genuine assistance to the Court. However, as I have not actually heard any costs argument, I will first make the costs order on a nisi basis, to become absolute if no application for variation is made within 14 days.  Any variation application will be dealt with on paper.

I.   Postscript

71.  I have reached the firm conclusion that, whatever its original intended purpose, section 18 of the Ordinance never became capable of being operated – as a matter of law and fact.  Its presence in the Ordinance is of no effect.

72.  That is not to say that position was necessarily understood.  It may be that for a period of time the Authority accepted and dealt with applications as though they had been properly made under a properly operable section 18 (Mr Chan was unable to obtain instructions at the hearing to give a clear answer to that possibility), and because of the Authority’s understanding as to the intended purpose of the section.  But, even if that were so, that would have been by reference to a “relevant period” or other transitional period almost certainly ending as long ago as 31 December 2001 (over 20 years ago).

73.  In the overall circumstances, I think it would be best to make clear now that section 18 can be ignored for all current and future purposes of regulation and licensing under Part III of the Ordinance.  Section 18 can be treated as having been deleted, and (unless some reason is identified for breathing life into the section at this late stage) it may be that it would be only sensible for a future amendment to the Ordinance formally to make that deletion so as to avoid any possible confusion.