THE QUEEN v. WONG KIN CHAU t/a KIN SING LORRY AND ANOTHER

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H E A D N O T E

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    Mother was a buyer licensed to trade on a wholesale vegetable market. Son was one of her workers and had an entry permit for the market. On 13th May 1988 there was an altercation between son and a gate-checker in the market. The gate-checker said that son had assaulted him. The market management immediately suspended mother and son from the market pending investigation and in late May 1988 (without hearing either of them) suspended mother for 2 months (until 12th July 1988) and son for 2 years (until 12th May 1990). On 14th July 1988 son was tried on a charge of assaulting the gate-checker and was acquitted. On 29th December 1988 mother and son instituted these proceedings, claiming that they had been unfairly treated and claiming damages. On 4th January 1989 the Director of Marketing held, or attempted to hold, a hearing on the merits of their case but they did not take advantage of it. The Director did, however, reduce son's suspension to 1 year. The respondent conceded that mother and son had originally been unfairly treated; but submitted that this had been cured by the offer of the hearing on 4th January 1989 and that, in any case, mother and son were not entitled to damages.

HELD, rejecting the respondent's submissions:

(i) that the suspension of mother and son without hearing them was unfair and that the offer of the hearing on 4th January 1989 did not cure the matter;

(ii) that mother and son were entitled to damages and that inquiries would accordingly be directed.

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J U D G M E N T

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1. This is an application for judicial review, made pursuant to leave granted by Mayo, J. on 30th December 1988.

2. The applicants are Wong Kin Chau ("the mother."), and Lai Pui Wa ("the son"). The respondent (although named as "The Queen") is a public authority responsible for the conduct of wholesale vegetable markets. It is known as "The Vegetable Marketing Organisation" and has been constituted under the Director of Marketing, an office created by S.4(1) of the Agricultural Products (Marketing) Ordinance, Cap. 277.

3. The applicants claim, in the circumstances which I shall presently set out, that they have been improper1y and unfairly treated by the Authority; and they seek redress. But, before I set out the facts, 1 will for convenience first refer, to the legislative background against which they fall to be considered.

4. The Director of Marketing ("the Director") may, under the Ordinance, appoint any person to be the manager or senior manager of a wholesale vegetable market: see S.3(2) of the Ordinance. The Governor-in-Council may, under the Ordinance, make regulations enabling the Director (among other things) to establish and regulate the control of markets for agricultural products : see S.10(1)(b) of the Ordinance. Such regulations have been made. They are the Agricultural Products (Marketing) Regulations ("the regulations"). Under the regulations, the Director has power to establish wholesale vegetable markets in the Kowloon area and the New Territories; and, in 1965, he established a wholesale vegetable market at Cheung Sha Wan, Kowloon ("the market").

5. You cannot purchase vegetables at the market unless your name is included in the Market Register (see Regulation 9) kept by the Market manager (see Regulation 8(1)), Entry upon and deletion of persons from the Market Register is made at the discretion of the Market Manager, subject to appeal to the Director (see Regulation 8(5)). The Market Manager may supply an identity badge to each person whose name is entered on the Market Register (see Regulation 8(6)).

6. On 21st April 1987, the Director made some administrative rules ("the administrative rules") for the purpose of regulating the conduct, control and administration of the market, and authorized the manager of the market to exercise the powers and discretions vested in the Director for the purposes of the administrative rules. The administrative rules provide (in the preface) that any written appeal against any decision made by the manager should be referred, to the Director personally.

7. Administrative rule 4 provides that the manager shall be responsible for the general administration, operation and control of the market and matters relating thereto. It also provides that the manager may, with the approval of the Director, delegate such responsibilities and duties as he may deem fit to other staff members.

8. Administrative rule 5 provides (among other things) that all vehicles or persons entering the market must possess a valid entry permit.

9. Administrative rule 13 provides (among other things) that any person causing any disruption of the proper conduct of the market or in any way causing nuisance in the market shall be required to leave the market premises.

10. Administrative rule 15 provides (among other things) that no illegal activities, such as fighting or threatening, are permitted on the market premises.

11. Administrative rule 53 provides that any person who violates any of the rules shall be liable at the recommendation and endorsement made by the Market Manager and Senior Manager respectively : -

(a) in the case of a buyer, to have his name struck off the Register;

(b) in the case of a seller to be prohibited from conducting sales; and

(c) to be prohibited from entering the market premises.

12. The rule concludes by providing that any appeal against such decision(s) shall be referred to the Director for his consideration.

13. Anyone connected with the business of the market, including buyers, and their workers, may apply for an entry permit to the market. Any applicant for an entry permit must subscribe to the rules which have been laid down in that connection ("the entry permit rules"). The entry permit rules include rule (7), which provides that applicants for an entry permit must observe the rules; and that violators are to be disqualified from entry into the market and have to surrender their entry permits. By entry permit rule (8), applicants are informed that according to administrative rule 8(5) mentioned above, the Market Manager can reject any application or cancel any entry permit.

14. Against this simple background I now turn to consider the complaints of the applicants in these proceedings.

15. The mother is a buyer trading in the market (in association with others) under the name of "Kin Shing Lorry". The son is one of her workers. The mother has been trading in the market since 1958. For the purposes of her business there, she has issued with identity badges, and corresponding "buyer's chops". She was issued with four chops altogether, numbered respectively 90, 220, 285 and 303. Number 220 was her own chop. Number 90 was the chop of her elder son. Number 303 was the chop of a partner of hers, Yuen Kin-fat, The fourth chop, number 285, was issued in the name of one Wong Chun-kun.

16. The son is the younger son of the mother. He was issued with an entry permit under rule 5 of the administrative rules.

17. In the market, vegetables are stored in containers, and, for control and record purposes, each container has a sales memorandum affixed to it. The sale of each container of vegetables is a separate sale. On conclusion of the sale, the seller initials the agreed price on the sales memorandum and the buyer affixes his chop on it. The vegetables sold are removed from the market after the necessary procedures are completed. The staff of the market includes gate-keepers or gate-checkers, whose job it is to see that only vegetables which have been the subject of a sale in this way are allowed to be taken away from the market by the buyers. It is part of their duty to cause random checks to be taken on all vegetables taken away by buyers. The carrying out of such random checks can make the gate-checker unpopular with some buyers.

18. On 13th May 1988, there was some sort of altercation between the son and a senior gate-checker. The Market Manager told the Senior Manager about this incident. The Market Manager recommended to the Senior Manager that three buyer chops of the mother, Nos. 90, 220 and 303, be suspended pending further investigation. The Senior Manager accepted this suggestion, and the Market Manager wrote to the mother a memorandum in terms which have been translated as follows :-

"Dear Madam,

On 13th May 1988 at about 1:20 p.m., your employee pushed and knocked our market's employee near gate 2A of our market and attempted to threathen and obstruct him in carrying out normal duties. This kind of your behaviour indeed infringes our Market Administrative Rule 15. Now our market had passed this matter to the police for handling and during the period of police investigation, our market will suspend your Credit Buyers Chops Nos. 220, 90 and 303, until the outcome of the investigation."

19. On 14th May 1988, the Senior Manager had a meeting with the mother. She asked him to lift the suspension on one chop, so that she could continue trading. She suggested to the Senior Manager that it was a minor case; that her son had no intention of assaulting the gate-checker; that he was a hot-tempered fellow; and that it was simply an altercation between two youngsters.

20. The Senior Manager refused her request. He informed her that in his opinion it was not a minor matter; he said that the son had assaulted the gate-checker; and had disrupted the market operations with his shouting. He told her that he would refer the matter to his superior before making a final determination. He told her that she could appeal against the interim suspension order to the Director.

21. In fact, the mother instructed solicitors. On 17th May 1988, the mother's solicitors wrote to the Authority. They stated that they were instructed that the mother expressly denied all the allegations made in the memorandum of 13th May 1988. They said that by reason of the suspension of the three buyer's chops, the mother had suffered and would continue to suffer financial loss. They stated that they were instructed to inquire if consideration would be given to allowing the mother to operate on any one of the chops in the meantime, pending the outcome of the trial of the son in respect of the alleged incident.

22. The Senior Manager reconsidered the matter in late May 1988. But, at the date of his reconsideration of the matter, the criminal charge of assault against the son had not ben finalised; and the son was not invited to make representations and was not given any opportunity to be heard. Nevertheless, as a result of his reconsideration, the Senior Manager determined that the mother's three buyers chops should be suspended for three months and that the son should be banned from the market for two years. He was of the opinion that the mother's buyer's chops should be suspended for two months as she had to take responsibility for the actions of her employees when their conduct threatened the orderly operation of the market; and he determined that the son should be suspended from the market for two years because assaulting an employee of the market, in the course of that employee's duties, seriously threatened the orderly operation of the market.

23. 0n 30th May 1988, the mother's solicitors wrote again to the Authority, pressing for a reply to their letter of the 17th May 1988.

24. On 6th June 1988, the Senior Manager replied. He said he was satisfied that there was sufficient evidence that the son had threatened, physically assaulted and interfered with a senior gate-checker of the market while the latter was discharging his official duties. He said that this had caused disruption in the conduct and order of the market; and he said that the mother and her associates had apparently condoned that misconduct. He said that on these grounds, he had exercised the power of discretion vested in him under Regulation 8(5) to temporarily delete the mother and her associates from the market register of persons entitled to purchase vegetables at the market, for two months. He said that the validity of the buyer's chops in the mother's possession had been suspended from 13th May 1988 to 12th July 1988 inclusive. He said that, his decision in that regard was made from the market management point of view. He added that any appeal against such decision should be referred to the Director.

25. There matters rested until 14th July 1988. On 14th July 1988, the charge (of common assault) which had been laid against the son was heard; and the son was found not guilty. By then, the suspension of the mother had come to an end; but the suspension of the son was still continuing.

26. On 15th July 1988, the mother's solicitors, now also acting for the son, wrote to the Authority to urge it to review its decision in banning the son from entering the market until 1990.

27. On 19th July 1988, the Senior Manager replied, confirming that the mother's three buyer's chops were now valid again; but stating that, regarding the so, he was still awaiting police detailed report for conclusion of the case.

28. On 29th July 1988, and again on 18th August 1988, the solicitors wrote to the Authority pressing for an early reply.

29. On 26th August 1988, the Senior Manager wrote to the solicitors stating that the market management had reviewed the case. He reported that it had maintained the decision to prohibit the son from entering the market until 12th May 1990, because the son had interfered with a senior gate-checker of the market while the latter was discharging his official duties on 13th May 1988. This hid caused (said the Senior Manager) serious disruption in the conduct and order of the market. He added that the decision was made from the market management point of view; and that any appeal against such decision should be referred to the Director.

30. On 22nd September 1988, the solicitors wrote (for the first time) to the Director. They took a number of legal points, and in addition remarked that their appeal to the market organisation to revoke the orders against the mother and the son had been rejected. They recorded that they had been informed that an appeal against those decisions should be referred to the Director. They added "hence this letter to you''. They addressed a copy of their letter to the Attorney-General.

31. On 30th September 1988, the Director of Marketing wrote to inform the solicitors that legal advice was being sought from the Attorney-General and that a full reply would be given in due course.

32. On 24th October 1988, the solicitors wrote again, pressing for a satisfactory response to their letter of 22nd September 1988.

33. On 25th October 1988, the Director wrote to the solicitors asking them to confirm whether they had any further representations to make on behalf of the mother and the son, to enable him to consider all the evidence and facts before re-examining the whole issue in order to reach a decision.

34. On 9th November 1988, the solicitors wrote to the Director, asking him to rescind the order against the son forthwith.

35. On 29th November 1988, the solicitors wrote pressing for a satisfactory and definite reply.

36. On 2nd December 1988, the Director wrote to the solicitors, saying that in connection with their appeal against the decision of the Senior Manager, he had been advised to ask whether they wished to have an oral hearing before the Director or if they wished only to make written representations.

37. On 5th December 1988, the solicitors protested at the dilatory manner in which (they said) the Director was dealing with the matter. They said that they were however still prepared to meet with the Director and make oral representations in support of the written submissions which they had made (all of which, I interpolate, had been concerned with matters of law and not with matters of fact). They said they would attend the meeting with Counsel.

38. On 14th December 1988, the Director wrote to the solicitors, referring to their letter of 5th December 1988, to which he referred as advising him of their wish to make oral representations in support of the appeal against the decision to ban the son from the market for a period of two years with effect from 13th May 1988. The Director stated that he would be pleased to hear the appeal on 4th January 1989.

39. On 29th December 1989, the applicants instituted these proceedings; and (as I have said) on 30th December 1988 Mayo J. granted the leave pursuant to which they now come before me.

40. On 4th January 1989, the Director of Marketing held, or attempted to hold, the hearing of the son's appeal (as he regarded it). The mother and the son were represented by solicitors and Counsel. The Director was given the following documents as part of the case for the Market Manager :

(a) statements from Chow Pu -lun (the Senior Gate-Checker who was alleged to have been assaulted by the son); Pang Wai-tong, Wong Kin-lun and Yiu Kam-man (market assistants);

(b) a report on the incident prepared by the Market Management in November 1988, and

(c) records of correspondence between the parties.

41. Chow, Pang and Wong were present at the appeal for the purposes of cross-examination. The Senior Market Manager and the Market Manager were also in attendance. The applicants were not present. Counsel was asked by the Director if he wished to cross-examine any or all of the witnesses for the Market Manager. Counsel stated that he did not wish to cross-examine any of these witnesses. The Director gave Counsel an opportunity to call any witnesses he wished to call. Counsel declined to call any witnesses. Counsel was given the opportunity to address the Director.

42. The hearing was abortive. The applicants' representatives went to it solely for the purposes of trying to persuade the Director to rescind, on legal grounds, the decisions made by the Senior Manager. The Director, on the other hand, had envisaged that the hearing would take the form of a hearing of the son's case on the merits, that is to say, a hearing designed to ascertain what the true, facts were. A transcript of the proceedings is in evidence. There is no doubt that the applicants' representatives on the one hand, and the Director on the other hand, were throughout at cross-purposes.

43. At the conclusion of the hearing, the Director reserved his decision.

44. On 20th January 1989, he gave his decision. It was in the following terms :

"In connection with the appeal lodged by Mr Lai Pui-wa against the administrative decision to prohibit him from entering the market premises for a period of two years, I have carefully examined the statements of the employees of the Vegetable Marketing Organisation (VMO) who were involved in the case and all the relevant correspondence."

I have listened to the representations made by Counsel for the appellant and by the senior agricultural officer for the VMO.

I accept the evidence of the VMO concerning the incident. I note that Mr Lai Pui-wa chose not to appear before me but to be represented by Counsel who elected not to cross-examine the VMO witnesses, although, he was offered the opportunity to do so.

I find that the Senior Manager acted in accordance with his powers under Administrative Rules 53, 13 and 15 in Mr Lai Pui-wa's case and with Regulation 8(5) of the Agricultural Products (Marketing Regulations) Cap. 277 in the suspension of the credit buyers chops 220, 90 and 303.

In the light of the representation made by Counsel for the appellant, I have decided to reduce the period of prohibition for Mr Lai Pui-wa from two years to one year."

Those are the facts.

45. I remind myself, before considering them further, that I am not concerned in these proceedings with the merits or demerits of the aplicants' case; only of the propriety or impropriety of the way in which the respondent dealt with it. This is a judicial review; not an appeal.

46. Have the applicants, been improperly or unfairly treated? I think they have.

47. The Authority has power, under the Administrative Rules, to strike a buyer's name off the register : see Administrative Rule 53. In my opinion, this comprehends a power summarily to suspend a buyer as a holding operation, without a hearing or any other formality, pending inquities into allegations made against the buyer or an employee of the buyer for whose conduct she must be responsible (compare the observations of Lord Denning M.R. in Lewis v. Heffer [1978]1 W.L.R. 1061, at p.1073). I see nothing  wrong with the decision initially made by the Authority on 13th May 1988 to suspend the mother's buyer's chops. It lay within the powers of the Authority to do so and, pending inquiries, it was a reasonable thing to do. But the decisions made later in May by the Authority, and communicated to the applicant's solicitors by the letter of 6th June 1988, are quite another matter. It may be that if those decisions had been made after giving the applicants a proper opportunity to state their case, and if the Authority had then concluded that the allegations made against the son were justified, the decisions would have been unimpeachable. I do not propose to hold that these decisions were decisions which lay altogther outside the powers of the Authority; nor that the decisions were unreasonable (although I have not forgotten that, so far as the criminal charge of common assault was concerned, the son was eventually acquitted of it). But it is not in fact necessary for me to determine these points; for I do propose to hold that the aplicants were, at this stage, unfairly treated. To decide, in late May 1988, to suspend the mother from trading in the market for two months on the ground of the son's misconduct, and to suspend the son from entering the market for two years on the like ground, having heard only the market staff's side of the story, was an unfair exercise of the Authority's powers, however wide they were (and, indeed, so much was conceded at the hearing before me). Accordingly the decisions taken in late May 1988 cannot be allowed to stand.

48. The Authority submits, however, that, looking at the matter as a whole, the applicants have had a fair deal. I approve this approach to the matter; but I do not think, looking at the facts of this case as a whole, that the applicants have had a fair deal. I appreciate that the applicants were offered a hearing on the merits of the case on 4th January 1989 and that they chose not to take the opportunity to avail themselves of it. But illegal administrative action can be challenged in the courts as soon as it is taken or threatened. There is no need first to pursue any administrative procedure or appeal. An administrative appeal on the merits of the case is something quite different from judicial determination of the legality of the whole matter. There is an essential difference between a review and an appeal. (For these elementary principles, which are sometimes overlooked, see Wade, Administrative Law, 6th Edn., (1988), at p. 712.)

49. So far as the mother is concerned, her failure to take advantage of the offer of a hearing on 4th January 1989 was perfectly understandable.  Her suspension had expired long before 4th January 1989, and the hearing on that date could have been of no help to her. And so far as the son is concerned, although I have considered whether, having regard to his failure to take advantage of the offer of a hearing on the merits of his case on 4th January 1989 , I ought to exercise my discretion to refuse him relief, I have come to the conclusion that I ought not to do so. I think, looking at the matter as a whole, that the applicants have not had a fair deal, as I have said. I know that in some cases the courts have held that an initial decision arrived at in breach of the rules of natural, justice has been cured by a subsequent hearing on the merits properly conducted : see, for example, Calvin v. Carr [1930] A.C. 574. But as noticed in the opinion of the Judicial Committee of the Privy Council (at p. 593D) in that case, there are equally other cases in which the defect is so flagrant, or the consequences so severe, that the most perfect of appeals or rehearings will not be sufficient to produce a fair result.

50. In the present case, even "the most perfect of appeals or rehearings" held on 4th January 1989 could not (as I have said) help the mother, whose two months suspension (decreed in breach of the fundamental rule of natural justice that you must in this sort of situation hear both sides, not just one) had expired on 12th July 1988. The hearing of 4th January 1989 came much too late to be of any use to her. Nor, in my judgment was it of sufficient help to the son to justify treating it as curing the like defect in his case. It is true that his suspension was still continuing (and indeed the Director reduced it from a suspension of two years to a suspension of one year), so that the hearing was of some help, rather than of no help, to him. But in his case it did not, and could not, after so long a lapse of time, produce a fair result.

51. The applicants, on the footing that they have been unfairly treated, claim damages. It seems illogical and unjust to deny them this remedy (the only remedy of any use to them) when there is no doubt that the suspensions imposed on them have caused them loss. With Denning L.J. in Abbott v. Sullivan [1952]1 K.B. 189, at p. 200 :

"I should be sorry to think that if a wrong has been done, the plaintiff is to go without a remedy simply because no one can find a peg to hang it on. We should then he going back to the days when a man's rights depended on whether he could fit them into a prescribed form of action, whereas in these days the principle to be applied is that where there is a right, there should be a remedy."

52. There is no authority which precludes me from holding that in this case justice requires that the applicants should have a remedy in damages, even if there is no conventional legal peg on which to hang such as award. There is no precedent for doing so, either; but I am not deterred by the argument that his has (apparently) never been done before.

53. I do not think, however, it is necessary to take this novel approach; for in my judgment there is here a legal peg on which to hang an award of damages. The relationship between the Authority and those to whom it grants rights to trade in and enter the market is, in my opinion, a contractual relationship. The Authority, and those to whom it grants such rights, are alike subject to the rules. Under the rules those to whom licences or permits are granted have a legitimate expectation that the Authority will not deprive them of such right arbitrarily or unfairly. This, although not expressed in the rules, must in my judgment be read into them as a matter of necessary implication. When the Authority unfairly deprived the applicants of their rights in late May 1988 (it will be recalled that I have found nothing wrong with its earlier actions) it acted in breach of contract.

54. For these reasons, I propose to direct an inquiry as to damages in the case of each of them, the mother and the son. The inquiry in the case of the mother will be an inquiry what damage the mother has sustained by reason of the suspension of her rights to use her buyer's chops 90, 220 and 303 between 1st June 1988 and 12th July 1988. The inquiry in the case of the son will be an inquiry what damage the son has sustained by reason of the suspension of his rights to use his entry permit for the market between 1st June 1988 and 12th May 1989.

55. No doubt, if the Authority had acted differently, it could have avoided these consequences. I am in particular acutely aware that, despite his acquittal on 14th July 1988 on the charge of common assault laid against him, the son might well have been guilty, on 13th May 1988, of conduce prejudicial to the goodorder and proper conduct of the market. But I do not think that I can take this possibility into account in reaching my conclusions on the present application for judicial review. I will now hear counsel on the form of the order to be made consequent upon this judgment; and any argument they may wish to advance on costs; but first I would add a footnote to this judgment. Since preparing it, I have had an opportunity of considering in relation to what occurred on 4th January 1989 in this case, an observation made in an immigration case, Begga Khan v. Secretary of State for the Home Department [1987] Immigration Appeal Reports 543, by Bingham L.J. at p. 555. He said :-

"If a procedural mishap occurs as a result of misunderstanding, confusion, failure of communication, or even perhaps inefficiency, and the result is to deny justice to an applicant, I should be very sorry to hold that the remedy of judicial review was not available."

This, I think, supports my conclusion that the rights of the applicants here should not be regarded as adversely affected by the fact that the hearing of 4th January 1989 was, in the circumstances I have mentioned, abortive.