HCAL 114/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 114 OF 2010

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D E C I S I O N

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1.  The Applicant was the tenant of stalls M9, M10 and M11 of Tai Po Hui Market since 1 June 2009. Under the Food Business Regulation Cap. 132X, the Director of Food and Environmental Hygiene [“Director”] granted him three permits for selling fresh meat (beef, mutton and pork) at the three stalls. The tenancy agreements also restricted the Applicant to use the stalls for such purposes only.

2.  The Applicant intended to use the stalls to sell frozen meat and applied to the Director for permission to do so.  Several letters were written.  Without going into details, the upshot was that in November 2009 the Director agreed to permit the Applicant to sell pre-packaged chilled meat but not frozen meat or poultry.  That was made clear in a letter dated 23 November 2009 from the Director to the Applicant.

3.  In February 2010, the Director issued warning letters to the Applicant regarding sale of chilled poultry and frozen meat at the stalls on 25 January 2010.

4.  On 9 February 2010, the Applicant lodged an appeal against the refusal of the Director to change the permit condition to the Licensing Appeals Board [“LAB”].  Two grounds were set out in the Notice of Appeal: (1) misrepresentation; and (2) unfair treatment of the Applicant.

5.  On 26 February 2010, the Director issued a second set of warning letters to the Applicant regarding sale of similar kind of unauthorized items at the stalls on 21 February 2010.

6.  On 23 March 2010, the Director issued a third set of warning letters to the Applicant regarding similar breach found on 15 March 2010.  On 16 April 2010, the Director issued letters to the Applicant informing him that the Director intended to terminate the tenancies of the three stalls and invited representations from the Applicant within 7 days before the execution of the termination.

7.  The stance of the Applicant to these warning letters and the termination notice was set out in a letter of 23 April 2010 from the then solicitor for the Applicant to the Food and Environmental Hygiene Department.  Basically, the Applicant said he should be allowed to sell frozen commodities and pre-packaged poultry items and appeal had been lodged with the LAB.  Pending the determination of the appeal, the Applicant said the warning letters were inappropriate.

8.  The LAB took the view that the Applicant’s challenge to the refusal by the Director to permit changes to the items to be sold at the stalls was an application to vary a condition of the tenancy agreements and as such “a matter relating to public stall tenancy and not a decision to grant, renew, suspend or cancel any registration, licence or permit”. Hence, the case did not fall within the scope of Section 125(8) of the Public Health and Municipal Services Ordinance [“PHMSO”] (Cap. 132) and the LAB did not have jurisdiction.  The Applicant was informed accordingly by a letter of 3 May 2010.

9.  In HCAL 115 of 2010, the Applicant seeks leave to challenge this decision of the LAB.  Until the filing of the Form 86A on 1 November 2010, the Applicant took no further step in respect of the LAB decision.  The application for judicial review is made out of time.

10.  Further, under Section 125B(4) of the PHMSO, a person dissatisfied with the decision of the LAB can appeal to the Municipal Services Appeals Board [“MSAB”] within 14 days after receiving the notice of the decision.  The Applicant did not lodge any appeal against the decision of the LAB to the MSAB.

11.  The Director served three letters to the Applicant on 4 June 2010 terminating the tenancies of the three stalls.  The Applicant lodged an appeal against the termination to the MSAB under section 6A of the Public Market Regulations Cap. 132 BO.  The grounds of appeal set out in the Applicant’s notice of appeal of 11 June 2010 were the same as those set out in the LAB appeal.

12.  The MSAB appeal was heard in September 2010. The Applicant was represented by counsel at the hearing.  By a decision dated 20 October 2010, the MSAB dismissed the appeal and upheld the Director’s termination of the tenancies.  In a written judgment, the Vice-chairman of the MSAB dealt with the grounds advanced on behalf of the Applicant comprehensively.

13.  In HCAL 114 of 2010, the Applicant seeks leave to challenge three decisions,

(a) The decision of the Director on 28 January 2010 that the sale of pre-packaged poultry and frozen commodities at the stalls was not allowed;

(b) The decision of the Director on 4 June 2010 to terminate the tenancies;

(c) The decision of the MSAB in dismissing the appeal of the Applicant.

14.  The two applications for leave were heard together as they stem from the same series of events and are inter-related.

15.  I shall first deal with the application in HCAL 114.  Of the three decisions referred to in the Form 86A as the decisions being challenged, in my judgment it is only the last decision which is relevant.  The first decision (the decision of 28 January 2010) was actually a reiteration of the decision of the Director made in the letter of 23 November 2009.  If the Applicant wished to challenge that decision, he should have done so with promptitude after he received that letter.  He is now seriously out of time in any challenge to the decision of 23 November 2009 and I do not see any justification for granting any extension to enable him to do so.

16.  As the matter developed, the Applicant actually chose to challenge that decision by an appeal to the LAB.  I shall come back to the LAB appeal in the context of HCAL 115.  Once the Applicant elected to pursue his challenge in the context of LAB appeal, I do not see any reason why he should be permitted to have a second bite of the cherry by a belated judicial review application in respect of the decision of the Director after he failed in the LAB appeal.

17.  To further compound the procedural flaw in the challenge in respect of the decision of the Director regarding the change of permits and tenancy agreements, after his failed attempt in the LAB appeal, the Applicant chose to advance the same lines of argument in the MSAB appeal. Though the decision under appeal in the MSAB hearing was the termination of the tenancy, the substance of the Applicant’s major contentions in that appeal revolved around attack on the Director’s refusal to change the permits and the tenancy agreements.  Those arguments have been fully considered by the MSAB in its written decision.

18.  Under the legislative scheme of the PHMSO, the MSAB was established to hear all the appeals arising from the administration of that ordinance and the regulations made under it.  For that purpose, the MSAB was given the necessary power to grant the appropriate relief.  There is no restriction as to the grounds that can be advanced in a MSAB appeal and legal representation is permitted.  It would militate against the policy underlying such legislative scheme if the court readily entertains judicial review application in respect of primary decisions which have been subject to an unsuccessful MSAB appeal when there is no arguable challenge to the MSAB decision.

19.  In the present case, I do not see any reason why the court should afford a further opportunity to the Applicant to expand his challenge to the primary decision of the Director.  The Applicant should not be permitted to have an independent and freestanding challenge to the decision in November 2009.  The same observation applies to the Director’s decision to terminate the tenancies.  Thus, the application for judicial review in HCAL 114 should focus on the MSAB decision.

20.  In respect of the MSAB decision, the Applicant’s grounds for seeking judicial review are set out at paras. 81 to 85 of the Form 86A.  The Applicant further supplemented his grounds in his 2^nd Affirmation and the supplemental submissions of Mr Tse.  Some of the arguments raised are new grounds which were not canvassed before the MSAB: the evidential aspects of the breaches; the timing of the MMCC objection; the identity of the objector; information as to frozen meat stalls in Tai Po area and the demand for the same.  These points are fact-sensitive and if they have been raised in the MSAB appeal, the Director may wish to provide further information and file evidence in response.

21.  As the Applicant has changed his lawyers after the MSAB appeal, Mr Tse cannot offer any explanation why these points were not raised before.  The Applicant’s affirmations did not give any clue as to why such a course was adopted.

22.  Judicial review is not an appeal and the function of the court is not to rehear the case on its merits.  Instead in the exercise of its supervisory function, the court shall focus on the legality, rationality and fairness of the subject decision and process.  Mr Tse did not mount any argument against the legality of the MSAB decision.  Neither did counsel suggest that the proceedings at the MSAB had been conducted unfairly.  Since the new points had not been raised before the MSAB, it is not possible to suggest that it acted irrationally in failing to consider them.

23.  I do not see any arguable ground to permit these new points to be canvassed in an application for judicial review against the MSAB decision.

24.  As regards the remaining grounds relied upon by the Applicant, viz. the weight attached to the policy statement and the so-called unfair treatment, the written decision of the MSAB has adequately addressed the same.  In my view, it was perfectly open to the MSAB to conclude that the policy statement did not dictate the Director to give consent to the change of user of the stalls as contended by the Applicant.  The Applicant’s challenges based on Wednesbury unreasonableness and unfair treatment are bound to fail.

25.  I therefore refuse to grant leave for judicial review in HCAL 114.

26.  Turning now to HCAL 115, for present purposes I am prepared to accept it is arguable that the decision of the Director in November 2009 in refusing to permit change of user for the stalls has a dual character: one qua landlord under the tenancy agreements and the other one qua licensing authority under the Food Business Regulations.  Thus, it is arguable that the LAB’s reason for declining jurisdiction is wrong as a matter of law.

27.  Even so, I do not think this court should grant leave in HCAL 115.  First, the Applicant had the alternative remedy of appealing to the MSAB pursuant to Section 125B(4) of the PHMSO.  The Applicant did not explain why he did not do so.  Had he done so, it is likely that the appeal from LAB would be heard at the same time as the other MSAB appeal brought by the Applicant (against the termination of the tenancies).  Given that the substance of the LAB appeal had been dealt with in the MSAB appeal (as mentioned the grounds of appeal were the same in both appeals and the written decision of the MSAB appeal had covered points relied upon by the Applicant in the LAB appeal), the jurisdiction point would be a matter of no moment.

28.  Second, and perhaps more fundamentally, even on the Applicant’s construction of the statutory scheme, the LAB appeal is confined to the decision of the Director qua licensing authority.  It does not have any effect on the tenancy arrangement.  Nor does it have any impact on the legitimacy of the decision of the Director in terminating the tenancies on account of breaches.  Since the tenancies of the Applicant had been terminated and the challenge to the termination in the MSAB appeal had failed, whether the Director should have granted the Applicant permit under the Food Business Regulations for selling frozen meat and poultry at the 3 stalls has become academic.  Upon the termination of the tenancies, the Applicant has no right to carry on any business at the stalls.

29.  Third, I do not think the Applicant has any cogent grounds for challenging the Director’s refusal to grant the change of users in the permits by way of judicial review in the light of the history of the matter.  In this connection, I only need to refer back to what I said in the context of HCAL 114.

30.  Therefore, leave is also refused in respect of HCAL 115.