KWOK CHEUK KIN v. COMMISSIONER FOR TRANSPORT

HCAL 41/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 41 OF 2011

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BETWEEN

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J U D G M E N T

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1.  Ferry service is the only means of public transport between some of the outlying islands and Hong Kong Island. Cheung Chau is one of those outlying islands. The ferry service between Cheung Chau and Hong Kong Island is operated under a licence granted by the Commissioner for Transport under section 28 of the Ferry Services Ordinance, Cap. 104. Under section 28(2)(b), the licence shall be subject to such conditions as the Commissioner shall specify.

2.  Since it is a means of public transport, the Commissioner must ensure the quality of the service.  Amongst other things, the Commissioner is given the statutory power under section 28(3) to specify the minimum frequency of a licensed service “after consultation with a licensee and having regard to the financial circumstances of the licensee.” The Commissioner is also given the statutory power under section 33 to determine the maximum fares that may be charged for such services.

3.  By Gazette Notice No. 1892 of 25 March 2011, the Commissioner determined [“the Determination”] that the maximum fares to be charged for the Cheung Chau services to be as follows as from 1 July 2011.

	Maximum Fare
	Mondays to Saturdays except public holidays			Sundays and public holidays
	Ordinary Ferry Service		Fast Ferry Service	Ordinary Ferry Service		Fast Ferry Service
	Ordinary Class	Deluxe Class		Ordinary Class	Deluxe Class
Single Journey
Adult	$12.6	$19.7	$24.6	$18.4	$28.7	$35.3
Child (aged 3 years old or above but under 12 years old)	$6.3	$9.9	$12.3	$9.2	$14.4	$17.7
Passenger aged 65 or above	$6.3	$9.9	$12.3	$9.2	$14.4	$17.7
Passenger with disabilities	$6.3	$9.9	$12.3	$9.2	$14.4	$17.7
Child under 3 years old (accompanied by adult)	Free	Free	Free	Free	Free	Free
Holiday Return Ticket (The first trip must start from Cheung Chau)
Adult	―	―	―	$25.2	$39.4	$49.2
Child (aged 3 years old or above but under 12 years old)	―	―	―	$12.6	$19.8	$24.6
Passenger aged 65 or above	―	―	―	$12.6	$19.8	$24.6
Passenger with disabilities	―	―	―	$12.6	$19.8	$24.6
Child under 3 years old (accompanied by adult)	―	―	―	Free	Free	Free
Monthly Ticket	$489	―	―	$489	―	―
Bicycle (per bicycle)	$18.6		―	$18.6		―
Freight (per cubic metre)	$170		―	$170		―

4.  The present proceedings focused on the differentials between the fares charged on weekdays and those charged on Sundays and holidays.  The effect of the Determination is that the holiday fares exceed the weekday fares by more than 20%.  The Applicant challenged the Determination on the basis that he had a legitimate expectation that the holiday fare differentials would not exceed 20%.  He contended that such legitimate expectation stemmed from a promise or representation from the Commissioner in a letter dated 21 December 2010 [“the Letter”].

5.  The Letter was written in Chinese.  Parties have not prepared any translation for the Letter.  I will quote its contents in Chinese,

“郭主席:

長洲渡輪服務

謝謝貴會在本年11月22日的來信，對離島渡輪服務提出寶貴的意見。就貴會對現時「中環–長洲」渡輪航線假日收費的意見，本署現回覆如下:

運輸及房屋局已在本年8月向立法會交通事務委員會滙報離島渡輪服務檢討的進展及政府將會落實推行協助措施，其中包括在下次招標時將「中環–長洲」航線的假日與平日票價差距，從現時大若40%收窄至不能超過20%，以回應離島居民對減低假日票價差距的訴求。

運輸署已於2010年12月17日就6條主要離島渡輪航線包括「中環–長洲」航線展開有關的招標工作。

最後，我們再次感謝貴會對離島渡輪服務的關注。

運輸署署長

(楊敏菁代行)

2010年12月21日”

6.  The Forms 86 and 86A were prepared by the Applicant in person.  Since then, he obtained legal aid and he was represented by Mr Pun at the substantive hearing.  In his written submissions, Mr Pun sought the following relief on behalf of the Applicant at paras. 86 and 87,

“(1) An order of certiorari to quash [the Determination] of the Commissioner;

(2) A declaration that the Commissioner, in awarding a licence under section 28 and/or determining the maximum fares under section 33 of the Ferry Services Ordinance [LA/8], was under a duty to take into account the legitimate expectation of the Applicant; and

(3) an order under Order 53, rule 9(4) that the matter to remit back to the Commissioner to reconsider it and reach a conclusion in accordance with the findings of the Court.

The Court may order the Commissioner to take into account the Applicant’s Legitimate Expectation when he reconsiders the issue; or alternatively, enforce the Legitimate Expectation of the Applicant by ordering the Commissioner to honour his promise.”

Review of the ferry services in 2010

7.  The holiday fare differentials had been in place for quite some time.  The underlying rationale is that by permitting higher fares on Sundays and holidays there would be more room for lower fares on weekdays.  In effect, those who used the services on Sundays and holidays (many of them were holiday makers) subsidized those who used the services on weekdays (most of them were local residents).  Without such differentials, the fares for weekdays would inevitably be higher.  From time to time there were demands for the abolition of such differentials.  However, the Commissioner did not accede to such demands in the 2008 tender exercise.  The result of that tender exercise was that the holiday fare differentials for Cheung Chau service from 2008 to 2011 was about 40%.

8.  In 2010, the situation was reviewed.  The Government conducted a survey in January and February 2010 on ferry services.  In respect of the service from Cheung Chau to Central, 961 passengers were successfully interviewed (about 85% of those were Cheung Chau residents).  According to the report on the survey, 22.1% regarded the holiday fare differentials to be totally unacceptable whilst another 48.8% found them to be unacceptable.  Amongst these people, 61.1% suggested that the differentials should be abolished altogether.  Another 18.6% thought that the differentials should be less than 10%, 13.4% thought it should be between 10% and 20% and 4.6% thought it should be between 20% and 30%. 

9.  The survey did not examine how the abolition or reduction of differentials could be achieved.  However, there was a survey on the acceptability of fare increases for increasing service frequency and improvement of vessel.  The majority of the responses were against any fare increases: 81.9% opposed fare increase for increasing service frequency and 78.4% opposed fare increase for improvement of vessel.  For those who accepted the option of increase in fares, the majority accepted a fare increase of not more than 5%. 

10.  In a paper tabled before the Transport Committee of the Legislative Council, the Transport Bureau reiterated some guiding principles for the formulation of the relevant policy at para. 8 of the paper.  Again the document is in Chinese and I quote as follows:

“在檢討期間及制定建議時，我們的原則及理念如下:

(a) 公共交通服務應由私營機構根據商業原則經營

我們的基本前提是盡量貫徹公共交通服務的既定政策，讓私營機構根據商業原則經營公共交通服務。因為這是提供有效率的公共交通服務的最佳做法。然而，考慮到渡輪服務是若干離島唯一的交通工具，我們需要確保能為居民提供這些必要的服務，所以要採取特殊措施。

(b) 長遠的財務可行性及維持票價穩定

基於渡輪服務的獨特之處，我們需要確保能為居民提供這些必要的服務及令票價維持在穩定的水平。但離島渡輪服務長期面對服務需求欠缺增長及燃油價格波動的問題，而導致票價需要不斷上調的壓力。因此，我們需要針對離島渡輪服務面對的長期問題而提供進一步措施，以確保離島渡輪服務長遠的財務可行性及維持票價穩定。

(c) 審慎運用公帑及市民的責任

在制定建議時，我們緊記務須審慎運用公帑。我們平衡了兩方面的需要，既需顧及如無支援便會在財務上不可行的必要服務，又能讓選擇居於離島的市民承擔適度責任。因此，我們建議在有需要時進一步協助6 條主要航線，減輕票價加幅對乘客帶來的負擔。

(d) 海港規劃

我們一直有採取措施，以改善營辦商的非票務收入。我們亦計劃在中環四至六號碼頭加建一層半，以便營辦商分租作商業或零售用途，賺取更多非票務收入，補貼渡輪服務的營運開支。但再加建多些樓層或將加建樓層土地的用途改作寫字樓的發展來開拓更多的非票務收入，將違反海港規劃的原則，並不會獲公眾接受。”

11.  Six proposals were put forward in the paper.  For present purposes, I only need to refer to proposals (b) to (e),

“(b) 保持現有服務水平

我們會在下次招標時，保持該6條主要航線的服務水平與現時相若。

(c) 扣減低假日票價差距

我們會在下次招標時收窄假日票價差距，不能超過20%，以回應居民對假日票價差距的不滿。

(d) 擴展二零零八年推行的特別協助措施

我們會將現時為4條航線提供的特別臨時協助措施(見附件B)擴展至所有6條航線。

(e) 協助降低票價加幅

如加價理由仍然充份，我們建議透過向營辦商發還他們已支付的船隻維修保養費，從而降低在扣除一般通脹率後的票價加幅，以分擔乘客的負擔。

因此，當有需要增加票價時，乘客先全數承擔相當於上一次加價以來的一般通脹率的票價加幅後，再承擔餘下的一半加幅，其餘的一半加幅由政府補貼。”

12.  The Special Measures referred to in proposal (d) were set out in Annex B to the paper.  There is no need to recite them in this judgment.  It suffices to note that those measures have no direct correlation with the reduction of the holiday fare differentials.

13.  There were public consultations in respect of the proposals.  47 Cheung Chau residents attended a public consultation forum held on 1 June 2010.  For present purposes, it is pertinent to note that in response to the proposals, most attendees speaking in the forum said that they would not accept any fare increase in the next tender and insisted that the narrowing of the fare differentials should be achieved through the lowering of the holiday fares. Thus, whilst most of them also asked for a complete abolition of the differentials, such opinions were premised on the maintenance of fares at existing weekday levels.

14.  On 10 June 2010, a meeting was held between the Transport Department and a lobby group called 三島聯盟.  The Applicant was one of those who attended this meeting.  At the meeting, some representatives of the lobby group queried the maintenance of a 20% holiday fare differentials in the Government’s proposals. There was a suggestion that since the Cheung Chau service was a profitable one, the holiday fare differentials for that route should be abolished.  The officials of the Transport Department explained the rationale for the holiday fare differentials and the implication on weekday fares if there were to be a large reduction in such differentials.  However, it was indicated that the Government would invite those submit tenders to include different fare structures for consideration in the next tender exercise. 

15.  After that meeting, the Applicant wrote a letter to the Transport Department on 12 June 2010.  Some of the requests by the Applicant in that letter are (for reasons set out below) of great significance for the purpose of the present proceedings.  He requested the Transport Department to ask the licensee to provide, amongst other matters, the following information,

(a)  If there were to be no holiday fare differentials, what would be the fares for weekdays;

(b)  If the existing fare structures were to be maintained (viz. keeping the existing fare differentials), what would be the fares for weekdays.

16.  In August 2010, the Government tabled another paper before the Transport Committee of the Legislative Council.  After reference to the views collected at the public consultations, the paper explained the policy considerations at para. 7,

“7. 我們理解市民對離島服務的期望，亦考慮了渡輪服務是若干離島唯一的交通工具，因此需要確保能為居民提供這些必要的服務，所以要採取特殊措施。基於渡輪服務的獨特之處，我們除了需要確保能為居民提供這些必要的服務，亦需要令票價維持在穩定的水平。不過，在制定建議時，我們也需要顧及現行政策及作出平衡。我們的基本前提是盡量貫徹公共交通服務的既定政策，讓私營機構根據商業原則經營公共交通服務。同時，我們緊記務須審慎運用公帑。我們亦平衡了兩方面的需要，既需顧及如無支援便會在財務上不可行的必要服務，又能讓選擇居於離島的市民承擔適度責任。因此，我們建議在有需要時進一步協助6條主要航線，減輕票價加幅對乘客帶來的負擔。”

17.  At paras. 8 and 9 of the paper, the Government explained why other options were not viable. Those options included the following:

(a)  透過重整航線及調整服務以降低成本

(b)  以專營權取代渡輪服務牌照令牌照期延長

(c)  政府為營辦商購置船隻

(d)  外判

(e)  燃油相關機制

18.  In other words, the Government came to the conclusion that ferry services to the outlying islands should continue to be operated by licensees on a commercial basis with limited assistance in the form of the Special Measures.  The proposals tabled for the considerations of the Transport Committee included the proposals outlined above which remained materially the same.

19.  The matter was discussed again at the Finance Committee of the Legislative Council when the Government applied for funding to finance the Special Measures.  At the meeting of 5 November 2011, many problems pertaining to the sustainability of the ferry services were canvassed.  Due to the decline in the population of the outlying islands and the increasing costs of maintaining adequate ferry services due to inflation and rise in fuel prices, it was necessary for the Government to provide assistance by way of Special Measures in order to keep the fares at levels acceptable to those who must use the services for commuting.  A balance had to be struck between the levels of fares generally and the demand for the abolition of the holiday fare differentials.  The Secretary for Transport and Housing indicated that in the next tender exercise, the Government would reduce the holiday fare differentials to 20%.

20.  On 22 November 2010, the Applicant wrote a letter to the Chief Executive of the Hong Kong SAR, copied to (amongst others) the Deputy Commissioner for Transport.  In the letter, he challenged the Government’s position that the abolition of the holiday fare differentials would inevitably lead to an increase in weekday fares generally.  He suggested the Government to implement a trial run of abolishing the differentials for one month to test the situation.  If the licensee suffered any loss in revenue during that one month, he suggested the Government to compensate the licensee. 

21.  The Letter (relied upon by the Applicant to support his case of legitimate expectation) was written by way of reply to this letter.

The tender exercise

22.  The tender process commenced with the publication of a gazette notice on 17 December 2010.  The tender document could be obtained from the Transport Department.  As indicated in the review and consultation process, the tender document contained a requirement that the holiday fare differentials must not exceed 20%.  At the same time, the tender document requires the tenderers to submit 2 sets of reference faretables: (1) a faretable of fares without any holiday differentials; and (2) a faretable of fares at the existing level of differentials (viz. about 40%).  The tender document further provides that the Commissioner may require a Selected Tenderer to adopt the reference fares for the operation of a licensed service, see paras. 21 to 23 of the tender document.

23.  Thus, though the primary faretable submitted could not have a holiday fare differential exceeding 20%, the Commissioner kept the options open to require the licensee to adopt either a fare structure with no holiday fare differentials or one with a holiday fare differentials at existing level. 

24.  The Commissioner explained why it was necessary for him to keep the options open at para. 7 of his Affirmation.

“因此，這建議能否落實，是需取決於實際招標的反應和結果，例如把假日與平日票價差距收窄或甚至取消會否導致平日票價出現過高及不為人所接受的加幅。一點重要的是，在招標機制下，運輸署是無權規限新票價是多少或相對於原先現有票價的加或減的幅度是多少，這是投標者的商業決定。當然，如建議票價不可接受，運輸署可以與投標者商討，甚至不接受投標，再從新招標，但運輸署不可能事前可以肯定或承諾新票價(無論平日或假日)是可以接受而同時肯定或承諾差距一定會是在某一程度，或收窄差距的方法只會透過減低假日票價達至。正如上文第4段和‘LYT-l’提及，眾所周知，離島渡輪航線的較高假日票價一向是用以補貼航線平日的開支，從而令航線平日票價維持在較低的水平。此措施最主要惠及離島的居民，因為他們是航線平日最主要的使用者。因此，政府就研究任何收窄票價的差距的具體方案的可行性，從而盡量回應某些居民對有假日票價差距的意見時，其中的一個大前提是該做法不可以不合理地調高平日的票價從而達到收窄差距的目的，以免對離島居民構成太大的負擔。”

25.  Only one tenderer submitted a tender in respect of the relevant routes.  According to the tender, if the holiday fare differentials were kept at existing level, the increase in the adult weekday fare would be 23%; if the holiday fare differentials were reduce to less than 20%, the increase in the adult weekday fare would be 29-30%; if the holiday fare differentials were abolished, the increase would be 32%.

26.  The tender was considered by Tender Assessment Panel at a meeting on 9 February 2011.  Amongst other things, the Panel gave due consideration to the option of reducing the holiday fare differential to 20%.  In the end, the Panel took the view that the rates of fare increase proposed under all options would unlikely be acceptable to the passengers.  They recommended the Commissioner to discuss with the tenderer with a view to lowering the fares.

27.  The Commissioner conducted discussions with the tenderer and various options with different holiday fare differentials were explored.  The Commissioner set out the details of such discussions in his Affirmation.  I shall not repeat such details in this judgment.  The upshot was that in order to achieve a fare increase within 10%[1] the Commissioner had to accept holiday fare differentials of more than 20%. 

28.  This was explained in a paper tabled before the Transport Committee of the Legislative Council on 2 June 2011 and in a letter to the Applicant on 3 June 2011.  Despite that, the Applicant issued the present proceedings on 18 June 2011. 

Effect of the letter of 21 December 2010

29.  The case of the Applicant rests upon the Letter which he said generated a legitimate expectation on his part that the holiday fare differentials would be reduced to less than 20%.  The crucial question is whether that letter gave rise to a reasonable expectation to such effect.  In Ng Siu Tung v Director of Immigration (2002) 5 HKCFAR 1 at para. 101, the majority of the Court of Final Appeal said,

“Though the concept of ‘legitimate expectation’ is somewhat lacking in precision, it is now firmly established that to be legitimate, the expectation must be reasonable … that is, reasonable in the light of the official conduct which is said to have given rise to the expectation. Whether an expectation is legitimate in this sense depends, at least in part, upon the conduct of the relevant public authority and what is has committed itself to. Whether an expectation is legitimate, and to what extent, must also depend upon what the applicants are entitled to expect. The requirement of legitimacy means that judicial decisions ‘must be founded not only on what the claimant factually expected, but also on what the claimant, bearing in mind any relevant considerations of policy and principle, was entitled to expect’. … It follows that, to the extent that an expectation of a benefit which cannot legally be accorded, it is not a legitimate expectation.”

30.  Further at para. 104, the majority referred to the proper approach in the construction of a representation.

“… we recognize that there will be cases where a representation is reasonably susceptible of competing constructions. In such a case, far from adopting the construction which is most favourable to the person asserting the legitimate expectation, the correct approach is to accept the interpretation applied by the public authority, subject to the application of the Wednesbury unreasonableness test.”

31.  The letter had to be understood in context.  The ferry services were not operated by the Commissioner. It was clear to everybody involved in the consultation process, including the Applicant, that the Commissioner would call for tenders in order to select a licensee to operate the ferry services on a commercial basis.  Moreover, it was equally clear to everybody that the holiday fare differentials could have an impact on the level fares charged on weekdays.  The correlation between the holiday fare differentials and the weekday fares is a matter of common sense and not susceptible to dispute by any reasonable person.  As a matter of fact, this was borne out by the outcome of the tender exercise. 

32.  Though the Applicant sought to challenge the extent of the impact in his letter of 22 November 2010, he accepted implicitly that there could be some impact in his requests set out in his letter of 12 June 2010.  He tried to obtain data to support his case for abolishing the holiday fare differentials by asking for proposed fares without any differentials as compared with the proposed fares under the existing fare differential structure.  His intention was to demonstrate that the difference in fares in the two scenarios could be acceptable.  Ultimately an important consideration must be whether the resulting increase in weekday fares would be acceptable to the users of the ferry services.  The Applicant was fully aware of this when he wrote his letter of 12 June 2010. 

33.  In setting the requirements to submit reference faretables in the tender conditions, the Commissioner followed a similar line of thinking though he still adopted the 20% differentials as his primary preference.  Before the submission of any tender, the Commissioner was not in a position to know what would be the end results in terms of the increase in the weekday fares if the holiday fare differentials were reduced to 20% or abolished altogether.  As explained by him in his affirmation, he had to keep his options open and the tender conditions were formulated accordingly. 

34.  Since the Letter was written after the tender documents were made available to the public and there was a reference to the tender process having begun in the letter, I agree with Mr Wong SC that the tender conditions form part of the relevant context for the consideration of the effect of that letter.  There is no need for the Commissioner to show that the Applicant had actual knowledge of the tender conditions, see Ng Siu Tung para. 356 and Ahmed v Secretary of State for the Home Department [1999] Imm AR 22 at p. 40.

35.  In any event, in the light of the context in which the reduction of the holiday fare differentials were discussed in public consultations and mentioned in the Letter, the tender conditions only spelt out more clearly what had been implicit in the reference to the reduction of the differentials to 20% in the Letter.  In other words, what the Commissioner was trying to tell the Applicant in the Letter was that he would set such requirement in the tender documents (and he had actually done so).  Because everybody involved in the matter understood or ought to understand that the ultimate decision must depend on the outcome of the tender process in terms of the resulting fares increase generally and weekday fares in particular, and these were not factors that were within the power of the Commissioner to dictate (since the tenderer(s) would have their own commercial considerations in fixing the fares) there could not be any guarantee at that stage that the differentials would be less than 20%.  This was the construction given to the letter by the Commissioner and I do not find that to be Wednesbury unreasonable.

36.  The matter can be examined by asking whether the Applicant was entitled to expect the Commissioner to commit himself to set holiday fare differentials at less than 20% no matter how substantial the increases in the weekday fares would become as a result thereof.  Take the initial result of the tender exercise as example, if the Applicant were correct, the Commissioner, subject to negotiation with the tenderer, would be constrained to accept an increase of 29% to 30% for weekday fares.  Given the views collected in the public consultation in opposition to fare increases, it would be unreasonable for the Applicant to harbour such an expectation. 

37.  This analysis illustrates a fundamental flaw in the Applicant’s case on legitimate expectation.  The Letter was written by way of response to his letter of 22 November 2010.  The subject matter was the ferry service between Central and Cheung Chau.  It was the common understanding of the parties to the correspondence that the service would be operated by a commercial licensee.  Though the correspondence focused on one specific aspect of the operation of the ferry service to Cheung Chau, viz. the holiday fare differentials, plainly the Applicant was aware that this aspect could not be considered in isolation.  Further, it was equally plain that there were competing considerations which the Commissioner needed to balance: the extent of increase in the weekday fares and the holiday fare differentials.  Such balancing exercise could not be performed until the Commissioner had all the necessary information.  A vital piece of information which the Commissioner did not have at the time of the Letter was the level of fare increases for weekdays if the holiday fare differentials were reduced to 20%.  Whilst it may be reasonable for the Applicant to expect that the Commissioner would set out the reduction of the holiday fare differentials to 20% in the tender conditions (which the Commissioner had done), it is unreasonable for him to expect that the Commissioner would tie his hand in the exercise of his discretion before he had all the necessary information for making a proper decision in balancing all relevant factors.

38.  The tender exercise, as shown by the developments since the submission of the tender, was only the first stage in the whole process leading to the grant of the licence for the Cheung Chau ferry service in 2011 and the Determination by the Commissioner.  In such circumstances, in particular having regard to the importance the Commissioner should attach to the resulting fare levels and increases for weekdays, it would be unlawful for the Commissioner to fetter his discretion prematurely by whatever he said in the Letter.

39.  Unlike other cases on the doctrine of legitimate expectation cited by counsel, the expectation which the Applicant advocated here was that the Commissioner would exercise his discretion on a matter of public policy in a particular manner instead of an exercise of discretion for the personal benefit of the Applicant.  The correspondence and the consultations in question were conducted by reference to public interest.  In such context, it must have been within the contemplation of all the parties involved that the Commissioner must ultimately make his determination based on his final assessment as to what is in the public interest. 

40.  The Applicant did not put forward his suggestions to the Commissioner in 2010 (as he now did in his Affirmation in support of these proceedings) with a declaration that he had a personal interest in the reduction of holiday fare differentials in terms of his employment by a restaurant in Cheung Chau and the business of the restaurant would flourish if the holiday fare differentials were reduced to attract more holiday makers to visit Cheung Chau.  It is therefore, in my view, misconceived for him to rely on these matters as the detriment that he suffered.

41.  In this judgment, it is not necessary for me to decide whether as a matter of law it is ever possible for a person to mount a judicial review based on a legitimate expectation in respect of a statement by an official in the context of public debate or public consultation as to how a policy discretion should be exercised.  But I find the following dicta of Laws LJ in R v Secretary of State for Education and Employment, ex p Begbie [2000] 1 WLR 1115 enlightening,

“80. As it seems to me the first and third categories explained in Coughlan [2]are not hermetically sealed. The facts of the case, viewed always in their statutory context, will steer the court to a more or less intrusive quality of review. In some cases a change of tack by a public authority, though unfair from the applicant’s stance, may involve questions of general policy affecting the public at large or a significant section of it (including interests not represented before the court); here the judges may well be in no position to adjudicate save at most on a bare Wednesbury basis, without themselves donning the garb of policy-maker, which they cannot wear. The local government finance cases, such as R v Secretary of State ex parte Hammersmith [1991] 1 AC 521, exemplify this. As Wade and Forsyth observe (Administrative Law, 7th edn p.404): ‘Ministers’ decisions on important matters of policy are not on that account sacrosanct against the unreasonableness doctrine, though the court must take special care, for constitutional reasons, not to pass judgment on action which is essentially political.’

81. In other cases the act or omission complained of may take place on a much smaller stage, with far fewer players. Here, with respect, lies the importance of the fact in Coughlan that few individuals were affected by the promise in question. The case’s facts may be discrete and limited, having no implications for an innominate class of persons. There may be no wide-ranging issues of general policy, or none with multi-layered effects, upon whose merits the court is asked to embark. The court may be able to envisage clearly and with sufficient certainty what the full consequences will be of any order it makes. In such a case the court’s condemnation of what is done as an abuse of power, justifiable (or rather, falling to be relieved of its character as abusive) only if an overriding public interest is shown of which the court is the judge, offers no offence to the claims of democratic power.

82.  There will of course be a multitude of cases falling within these extremes, or sharing the characteristics of one or other.  The more the decision challenged lies in what may inelegantly be called the macro-political field, the less intrusive will be the court’s supervision.  More than this: in that field, true abuse of power is less likely to be found, since within it changes of policy, fuelled by broad conceptions of the public interest, may more readily be accepted as taking precedence over the interests of groups which enjoyed expectations generated by an earlier policy.”

42.  In the present context, in the light of the above analysis, the most that the Applicant could legitimately expect from the statement in the Letter is, as submitted by Mr Wong, that the Commissioner would try to achieve a reduction of the holiday fare differentials to 20%.  The same can be said in respect of the statements made at the hearing at the Finance Committee.  On the evidence, it is patently clear that the Commissioner had made substantial efforts in that direction, including the requirement in the tender conditions to such effect and the analysis he conducted on different scenarios (including a reduction of the differentials to less than 20%) after the tender had been submitted.   

43.  Given the circumstances under which the Letter was written, I cannot accept the submission of Mr Pun that it generated a legitimate expectation on the part of the Applicant that the Commissioner would inflexibly exercise his power under section 33 to achieve a reduction of the holiday fare differentials to 20% irrespective of the effect of that on the level of increase for weekday fares.  In the course of submissions, Mr Pun accepted it would be difficult for the Applicant to challenge the Determination if the Commissioner had, before the making of the Determination, informed the Applicant of the need to retain a higher differentials due to the outcome of the tender process and the negotiation with the tenderer.  This shows that the Applicant could not have any legitimate expectation on substantive benefit.  And it is not difficult to see the reason why it is so.  The Applicant was aware that it is a matter of balancing competing considerations and when the Letter was written the Commissioner did not have all the necessary information (viz. the response of the tenderers) to enable him to strike the proper balance.   

44.  As Chu J (as she then was) held in Lam Yuet Mei v Permanent Secretary for Education and Manpower  [2004] 3 HKLRD 524 at para. 75,

“An expectation will not be regarded as reasonable or legitimate if the applicant could have foreseen that the subject matter of the representation was likely to be alter, or that it would not have been respected by the relevant agency, or that the applicant knew that the representor did not intend his statements to create an expectation.”

45.  In my judgment, the Applicant could and should have foreseen that the Commissioner was not in a position to commit himself to the reduction of holiday fare differentials to 20%.  Not knowing the outcome of the tender process and the impact on the level of increase for weekday fares if the reduction of holiday fare differentials to 20% were adhered to, it would be irresponsible (and possibly open to challenge as an undue fetter of his discretion without taking account of a highly relevant matter in terms of the resulting increase for weekday fares) for the Commissioner to commit to such policy prematurely when the Letter was written.

Results

46.  I hold that the Applicant could not have a legitimate expectation that the Commissioner would reduce the holiday fare differentials to 20% irrespective of its impact on the increase of weekday fares.  Therefore his challenge against the Determination must fail.

47.  The application for judicial review is dismissed.  I also make a costs order nisi that the Applicant shall pay the costs of the Commissioner, such costs is to be taxed if not agreed.