CHAN CHIU WAH v. A TRIBUNAL OF THE PANEL APPOINTED UNDER SECTION 7A(6), HOUSING ORDINANCE, CAP. 283 AND ANOTHER

HCAL88/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 88 OF 2010

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J U D G M E N T

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A. THE APPLICATION

1.  This is an application for judicial review against :

(1) the Housing Authority’s decision of issuing a notice to quit dated 31 March 2010 (“the Notice”), thereby terminating the tenancy of Flats 1407 and 1410, Tsui Pak House, Tsui Ping (North) Estate, Kowloon (“Flat 1407” and “Flat 1410” respectively and “the Flats” collectively); and

(2) the decision of the Appeal Tribunal dated 1 June 2010 confirming the Notice. 

2.  The applicant seeks a certiorari quashing both decisions and a declaration that the Notice be amended to exclude Flat 1410, the unit in which he is living with his own family. 

3.  The facts leading to this application may be summarized as follows. 

B.  THE FACTS

4.  The applicant’s parents and their family members, including the applicant, used to live in two public housing units in Jordan Valley Estate.  The mother was the tenant.  In about 1990, Jordan Valley Estate underwent redevelopment.  The mother applied for relocation whereupon she was offered tenancy of the Flats.  She entered into a tenancy agreement with the Authority on 9 October 1990.  The family was permitted to occupy the Flats.  In 1997, she died.  The Authority then entered into a tenancy agreement with the applicant’s father for the Flats on 5 September 1997 (“the Tenancy Agreement”)[1].

5.  It is the applicant’s case, apparently not disputed, that since 1990 the father and other family members have occupied Flat 1407 whereas the applicant and his own family have occupied Flat 1410. 

6.  Under Clause II(11) of the Tenancy Agreement, the father agreed not to use or cause or permit the Flats to be used for any illegal or immoral purpose.  Should there be a breach thereof, the Authority may re-enter the Flats and terminate the tenancy under Clause IV(2).

7.  On 29 December 2009, the applicant’s father was convicted of dealing with 71,200 sticks of cigarettes, contrary to the provisions of the Dutiable Commodities Ordinance, Cap. 109.  He carried out the illegal activity in Flat 1407.   He was sentenced to 5 months’ imprisonment.

8.  The father’s criminal act constituted a serious breach of Clause II(11).  The Authority issued the Notice on 31 March 2010 pursuant to section 19(1)(b) of the Housing Ordinance, Cap. 283 (“the Ordinance”), demanding him to delivery up vacant possession of the Flats on or before 30 April 2010. 

9.  The father appealed to the Appeal Tribunal. He did not appear but was represented by the son who lived with him at Flat 1407. Neither did the applicant appear.  Among other things, the son told the Tribunal that the applicant and his own family had been staying in Flat 1410 for over 20 years and that they were ignorant of the father’s wrongdoing. The Tribunal seemed to have accepted what he had said.  They asked if they could confirm the Notice in respect of one of the Flats, presumably Flat 1407, when only it was involved in the tenant’s criminal activity.  The representative of the Authority advised that it was not possible as the Tenancy Agreement covered both Flats.  In the end, the Tribunal by letter dated 1 June 2010, confirmed the Notice in its entirety.  In the same letter, they strongly urged the Authority to render help to the occupiers of Flat 1410 as the circumstances might permit. 

10.  The Authority took up the Tribunal’s suggestion and issued a letter dated 31 August 2010 to the applicant, advising him that if he was eligible they would assist him and his own family in the application for interim housing in the New Territories and, if they so wished and consented, refer them to the Social Welfare Department.  The applicant, however, did not respond to that letter.  Instead, he took out the present application for judicial review. 

11.  At the hearing before me, the Tribunal did not appear, having previously indicated that they would adopt a neutral stance and abide by any decision of the court. 

C.  TWO MAIN ISSUES

12.  Two main issues arose from the submissions presented by the applicant and the Authority :

(1) whether the decisions being impugned are amenable to judicial review; and

(2) if so, whether the decisions are nevertheless lawful. 

I will deal with them in turn. 

D.  REVIEWABILITY

13.  Ms Tong, for the Authority, submitted that when the Authority issued the Notice to the applicant’s father, it was just exercising its contractual right qua landlord under Clause IV(2) of the Tenancy Agreement.  It did not involve any public law element.  The Authority’s decision is therefore not amenable to judicial review.  Ms Tong’s submission is contrary to the weight of the authorities. 

14.  In Chan Yik Tung v Hong Kong Housing Authority [1989] 2 HKC 394, the Authority issued a notice to quit to a tenant who had acted in breach of the user clause of the tenancy agreement.  The Tenancy Appeals Committee, who was then the body dealing with appeals arising from notices to quit, confirmed the notice.  The tenant applied for judicial review against both decisions of the Authority and the Committee on the ground that they had taken into account an irrelevant consideration.  A preliminary point arose as to whether section 19(3)[2] and section 20(4)[3] of the Ordinance had ousted the court’s supervisory jurisdiction.  Liu J (as he then was) held that as the Authority and the Committee were exercising statutory powers and not merely a contractual right, the allegation would, if substantiated, constitute a jurisdictional error susceptible to judicial review.  He said at p. 396F-I :

“ This case is not simply concerned with an exercise of a contractual right by a statutory body. The notice to quit was served expressly under a section of the Housing Ordinance (Cap 283) with reference to cl 4(b) of the tenancy agreement. The section resorted to is s 19(1)(b) which reads as follows:

(1) Notwithstanding the terms thereof, the authority may terminate any lease—

(b) otherwise, by giving such notice to quit as may be provided for in the lease or 1 month’s notice to quit, whichever is the greater.

What is being sought to be reviewed is, therefore, an exercise of a statutory power by the Hong Kong Housing Authority and a further exercise of a statutory power by its appointed committee sitting in a tenancy appeal.”

15.  Similarly in Lam Hei Ying v Hong Kong Housing Authority and Appeal Tribunal, HCAL2299/2000, unreported, 23 January 2001, Yeung J (as he then was) said :

“There could be no doubt that the said flat had been used for illegal purpose and by the operation of the deeming provision under Clause IV(7), the applicant was clearly in breach of the Tenancy Agreement.

But the Notice to Quit was not served by HKHA in the exercise of its contractual right. The Notice to Quit was served under section 19(1)(b) of the Housing Ordinance by giving 1 month’s Notice to Quit.

  Section 19(1) of the Housing Ordinance gives HKHA the discretion, notwithstanding the terms of the lease, to terminate the lease in appropriate circumstances. ...”

16.  Similar views can be gathered from three other decisions of Yeung J.  In Chan Ming Yan v Hong Kong Housing Authority and Appeal Tribunal, HCAL100/2000, unreported, 13 July 2000, the learned judge held that for the proper exercise of the discretion under section 19(1), each case must be considered on its own merits and decided as the public interest required at the time.  His Lordship must have regarded the discretion under section 19(1) as a public law function.  In Thai Muoi v The Hong Kong Housing Authority and Appeal Tribunal, HCAL155/1999, unreported, 30 May 2000, he rejected the Authority’s submission that its decision to issue a notice to quit was not open to judicial review because section 19(3) ousted the court’s jurisdiction.  Then in Kwan Shung King v Housing Appeal Tribunal [2000] 2 HKLRD 764, he held that section 20(4) did not oust the court’s supervisory jurisdiction over the Tribunal’s decision.  His Lordship must have been satisfied that both the Authority’s and the Tribunal’s decision fell within the public law domain when he considered the effect of the ouster provisions. 

17.  Indeed, that was previously the understanding of the Authority and the Tribunal as well.  For in Lo Yuet Hing v Hong Kong Housing Authority and Appeal Tribunal, HCAL95/2002, unreported, 25 September 2002, they did not dispute that the Authority’s decision to issue a notice to quit and the Tribunal’s decision made in the consequential appeal were liable to be judicially reviewed.[4]

18.  Ms Tong said that the Authority now adopts a different stance because in none of the cases cited had the courts examined the nature of the decision to issue a notice to quit by the Authority, which she maintained, is entirely contractual in nature.[5] I disagree.  I think the courts had considered the nature of the Authority’s decision to issue a notice to quit under section 19(1) of the Ordinance and found that it was a public law function.  In any event, Ms Tong’s submission is premised on the wrong footing that when the Authority issues a notice to quit, it is only exercising its contractual right under the tenancy agreement, when in fact it is invoking section 19(1)(b) of the Ordinance.  The statutory discretion conferred upon the Authority by section 19(1) is properly engaged. 

19.  The Tribunal is specifically created by the Ordinance to deal with appeals arising from termination of tenancy by a notice to quit issued under section 19(1).  Section 20 of the Ordinance confers a wide and unfettered discretion in determining the appeal: Kwok Koon Wor v Appeal Panel and Hong Kong Housing Authority, HCAL71/2000, unreported, 20 September 2000, per Yeung J at p. 7 of the judgment; Kwan Shung King, at p. 772I.  It may confirm, amend, suspend or even cancel the notice : section 20(3).  Plainly, the Tribunal is exercising a public law function under section 20. 

20.  I accordingly find that both decisions being impugned in the present case are liable to be judicially reviewed by the court. 

21.  I now turn to the merits of the grounds of challenge. 

E.  MERITS

E.1.   Challenge against the Authority’s decision

22.  Mr Kwok, for the applicant, argued that when the Authority issued the Notice, it had failed to make a determination as to whether the applicant was innocent of the illegal act committed by his father and its decision was irrational because it issued the Notice despite the fact that the applicant had himself done nothing wrong.  In support of his contentions, Mr Kwok relied on Lam Hei Ying, Kwan Shung King, Chan Ming Yan and Lo Yuet Hing. 

23.  In all the cases relied on by counsel, the applications for judicial review were brought by the tenant.  Properly read, they establish the proposition that if the tenant himself was innocent and had no knowledge of the illegal acts conducted by another occupier in the subject premises, it constitutes a relevant factor that the Authority needs to take into account when deciding whether to terminate the tenancy.  This is so even though Clause IV(7) of the tenancy agreement deems any act, neglect or default of any member of the tenant’s family, as occupiers, to be his.  In other words, although technically a breach is deemed to have been committed by the tenant, the Authority must still consider his culpability substantially when deciding to issue a notice to quit.  The cases do not support a wider proposition advocated by counsel that the Authority must give due regard to the innocence of the occupier or his lack of knowledge of the tenant’s wrongdoing when deciding to issue a notice to quit. 

24.  Mr Kwok placed particular reliance on Lo Yuet Hing.  There, the tenant’s adopted son was convicted of an offence of unlawful trafficking in dangerous drugs at the subject premises.  The tenant and her natural sons claimed that they had no knowledge of his criminal activity.  The Authority issued a notice to quit to the tenant nevertheless, which was confirmed by the Appeal Tribunal.  Deputy Judge A Cheung (as he then was) said :

“21. In my judgment, the decision of the 1^st Respondent [i.e. the Authority] must be disturbed for two reasons. First, as was indeed accepted by counsel for the 1^st Respondent during the hearing, in a case of the present type, the knowledge or the lack of knowledge on the part of the tenant of the illegal activities that had been carried on in the premises is a relevant factor or consideration to take into account in the exercise of the 1^st Respondent’s statutory power and discretion under section 19(1) of the Ordinance. This is indeed commonsense—for, everything else being equal, one would legitimately expect the treatment to be meted out to a tenant who was totally ignorant of the criminal activities should be different from that to be meted out to a tenant who was aware of those activities being carried on in his premises.

22. As I said, counsel for the 1^st Respondent does not dispute with this at least as a matter of theory, but he argues that in practice given the reasons set out above, the 1^st Respondent is in no, or no good position, to verify these claims of innocence or ignorance that were invariably made by the tenants and their family members in cases of the present type. So in effect, a practice or policy has grown up that the 1^st Respondent would not determine or come to any conclusion on whether these claims were well founded or not. Indeed, Mr Ng, in his submission, says that not even a presumption of innocence or for that matter, a presumption of guilt, is applied by the 1^st Respondent to deal with these usual claims of ignorance. The 1^st Respondent simply makes no determination and comes to no conclusion on the claims. That notwithstanding, according to counsel as well as the evidence filed, what, as a matter of practice or policy, happened and what happened in the present case, was that ‘due weight’ or ‘consideration’ was accorded to the claim in the deliberation process.

23. In my judgment, this is wrong.  Once it is accepted, quite inevitably, that knowledge or ignorance is a relevant consideration for the 1^st Respondent to take into account in the exercise of its discretion under section 19(1) of the Ordinance, it is incumbent upon the 1^st Respondent to make a determination or to come to a conclusion, based on whatever material or information that is available to or before it, on the veracity of the claim of innocence or ignorance on the part of the tenant or the other family members. Without making such a determination or reaching such a conclusion, there is really no way that the 1^st Respondent could accord ‘due weight’ or ‘consideration’ to the claim of innocence; and without making the determination or reaching the conclusion, a relevant factor or consideration must, by definition, have been left out from the consideration of the 1^st Respondent, and that must quite fatally taint any decision reached by the 1^st Respondent in the purported exercise of its discretion under section 19(1) of the Ordinance.”

25.  Mr Kwok argued that according to what his Lordship had said in paragraph 23 of the judgment, the claim of innocence or ignorance by an occupier, other than the tenant, is a relevant consideration that the Authority must take into account when deciding to issue a notice to quit.  

26.  I disagree.  What the learned judge had said must be understood in context.  In paragraph 21 of the judgment, he recognized that the claim of innocence or ignorance by the tenant was a relevant consideration.  He did not say that similar claims by her natural sons as occupiers were relevant.  So when he said at paragraph 23 that it was incumbent on the Authority to consider the veracity of the claim of innocence or ignorance on the part of the tenant or the other family members, what he meant was that the claim by the family members as occupiers would be relevant to the determination if the tenant’s claim of innocence or ignorance was sustainable in the overall context of the case.  He had not laid down any general proposition that such a claim by the occupier alone is a relevant factor. 

27.  Mr Kwok then relied on the general duties imposed on the Authority by section 4(2)(e) of the Ordinance :

“… to manage any housing, and any premises, structures and grounds ancillary thereto, and any common parts, having regard to the interests, welfare and comfort of the tenants, owners or occupiers thereof, and to charge fees for its services in connection with such management”.

He argued that the obligations of the Authority go beyond that of its tenants.  It has the same obligations towards any occupier of its premises.  It would therefore be an irrational decision for the Authority to ask the occupiers of a public housing unit to leave without making any inquiry as to whether there is any fault on their part which render their occupation of the public housing unit not in the interest, welfare, or comfort of other tenants, owners, or occupiers of a housing estate in light of its obligation to provide them with housing and taking care of their interest, welfare and comfort. 

28.  The Authority may well owe various duties to the tenants and occupiers of a public housing estate.  But it does not follow that the Authority owes the same duty towards a tenant and an occupier in any given scenario.  Whether the Authority owes any duty to an occupier must depend on the actual circumstances.  When it comes to the termination of a tenancy based on a breach of the user clause, the Authority is dealing with the tenant and the tenant alone.[6]  It is the tenant’s conduct and circumstances that count.  The alleged innocence or ignorance on the part of the occupier is irrelevant, which the Authority is entitled to disregard. 

29.  The question of relevance can be tested in another way.  A matter is relevant if, had account be taken of it, it might have caused the decision maker to reach a different conclusion.   If a tenant committed a breach upon which the Authority terminated the tenancy, might the occupier’s innocence or ignorance have caused the Authority to decide otherwise?  I think not. Otherwise the defaulting tenant could take advantage of the occupier’s position and remain as a tenant despite his breach.  It would certainly and easily lead to abuse.  I do not think the Authority might have reached a different conclusion simply because of the occupier’s innocence or ignorance.  Thus tested, the occupier’s claim of innocence or ignorance is plainly irrelevant. 

30.  There are further hurdles to the applicant’s challenge, which are insurmountable.  By seeking to quash the decisions and a declaration that Flat 1410 be deleted from the Notice, the applicant is in effect contending that the Notice should only cover one of the Flats, the subject premises of the Tenancy Agreement.  In other words, there should only be a partial termination of the Tenancy Agreement.  His contention is not sustainable for two reasons. 

31.  First, under the common law, it is well established that a notice to quit in respect of a tenancy must extend to the entire premises and not to part only, otherwise the notice would be invalid : Bebington v Wildman [1921] 1 Ch. 559; Woodward v Earl of Dudley [1954] Ch. 283; Oceania Manufacturing Co. & another v Pang Kwong-hon, CACV99/1978, unreported, 23 July 1979.  Neither the Tenancy Agreement nor section 19(1) of the Ordinance enables the Authority to issue a notice to quit covering part of the subject premises under a tenancy agreement.  

32.  Second, such a partial termination of the Tenancy Agreement, even if legally permissible, would defeat the whole purpose of the Notice.  Plainly, by serving the Notice, the Authority wanted to evict the applicant’s father, the defaulting tenant, from all the premises that he had rented from the Authority.  Mr Kowk has made no submission that the Authority is not entitled to do so, which submission is in any event untenable.  It would frustrate the purpose of the Notice entirely if, despite his wrongdoing, the applicant’s father would be entitled to remain as a tenant and continue to occupy Flat 1410. 

33.  In response, Mr Kwok took a point of challenge of which no leave has been granted.  Mr Kwok could not raise it in the absence of leave.  In any event, the point is unmeritorious.  Mr Kwok submitted that the Authority could delete the father’s name from the list of occupiers in the Tenancy Agreement so that he could no longer occupy Flat 1410. The mind boggles at Mr Kwok’s suggestion that somehow a tenancy can be made with a tenant while at the same time he is deprived of the right to possession of the subject premises. 

34.  The applicant’s challenge against the Authority’s decision must fail. 

E.2.   Challenge against the Tribunal’s decision

35.  Mr Kwok contended that the Tribunal erred in confirming the Notice in its entirety when section 20(3) of the Ordinance gives it the power to amend it by deleting Flat 1410.  However, as seen, a valid notice to quit must cover the subject premises in its entirety. Section 20(3) does not empower the Authority to amend the Notice in such a way as turning it into an invalid one.  Further, as I have said, the partial termination of the Tenancy Agreement, which arose from amending the Notice by deleting Flat 1410, would defeat the purpose of the Notice entirely. 

36.  Mr Kwok again took a point of which no leave has been granted.  He submitted that the Tribunal could amend the Notice by substituting the name of the father with the applicant’s.  This is in fact tantamount to re-writing the Tenancy Agreement or granting a new tenancy agreement in favour of the applicant.  The Tribunal simply has no power to do so.  In the end, Mr Kwok did not press the point any further.  

37.  The applicant’s challenge to the Tribunal’s decision also fails. 

F.   ORDERS

38.  For the above reasons, I dismiss the present application. 

39.  The parties agree that costs should follow the event.  I will therefore order the applicant to pay the costs of these proceedings, to be taxed if not agreed.  The applicant’s own costs are to be taxed in accordance with the legal aid regulations. 

[1] It is a standard-term tenancy agreement. 

[2] Section 19(3) provides that no court shall have jurisdiction to hear any application for relief by or on behalf of a person whose lease has been terminated under section 19(1) in connection with such termination. 

[3] The then section 20(4) provided that the decision of the Committee in determining an appeal under section 20(3) shall be final.  

[4] See para.10 of the judgment. 

[5] Ms Tong referred to Anderson Asphalt Ltd v Secretary for Justice [2009] 3 HKLRD 215 and King Prosper Trading Ltd v Urban Renewal Authority, HCAL56/2009, unreported, 17 December 2010 for the well established principles on how to determine if a decision of a public body is amenable to judicial review.  For present purposes, I do not think I need to repeat them here. 

[6] This explains why, if it is the occupier’s act, neglect or default that constituted a breach of the tenancy agreement, it is necessary to deem the conduct complained of as that of the tenant’s under Clause IV(7) of the tenancy agreement.