HARRIS TSANG SHING KUNG AND ANOTHER v. THE ROYAL HONG KONG JCOKEY CLUB

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HEADNOTE

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                Judicial Review. Expulsion from race-course pursuant to Section 25(2) of Gambling Ordinance - no requirement to have an inquiry before power exercised - private matter and not subject of judicial review.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS NO. 1746 OF 1985

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JUDGMENT

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Background

1. This is an application for Judicial Review brought under Order 53 of the Rules of the Supreme Court whereby the applicants seek an order of certiorari to remove to this Court and quash two orders made by the Assistant Security Manager of the Respondent Club whereby on the 24th of April 1985 they were ejected from the Happy Valley racecourse or, alternatively, a declaration also in accordance with Order 53 that the action of the said Assistant Security Manager was against the rules of natural justice and therefore ultra vires and wrong.

The facts

2. Affidavits have been sworn and filed by the applicants and also by the previous Assistant Security Controller of the Respondent Club, Mr. S.J. Fudge, now retired, and by its solicitor Mr. T.J. Gregory.

3. These show that the circumstances giving rise to the applicants complaints are substantially not in dispute. Each was issued a season "guest" badge by the Respondent Club for the 1984/1985 racing season. These badges were obtained through friends who were members of the Club and each applicant paid $27,000 for his badge. Neither applicant is himself a member of the Club.

4. On the evening of the 24th of April 1985, each of the applicants went separately to the Happy Valley racecourse and by means of their guest badges entered the member's enclosure where they met. At about 8:45 p.m., shortly before the third race of the evening, each applicant was separately approached by an official of the Respondent Club. They were each asked to take off their guest badges and to surrender them to the official. Each refused to do so. On each occasion police officers were also present and the applicants were taken to a room where they found themselves together. One of the applicants, Mr. Tsang Chin-hing, also complained that he was shouted at by the official and accused of book-making in the presence of his friends. Once in the room, each applicant was asked to surrender his guest badge which he did. Each was given a receipt for the badge, which has been exhibited. This receipt simply sets out that a Mr. Yeung Nam-keung is a person authorised by the Stewards of the Jockey Club to demand the surrender of a season guest badge and it acknowledges having received that badge. Each applicant was told that he was, suspected of book-making and that he was going to be ejected from the course. On each occasion another form was filled in which the applicants were asked to sign. Each refused to do so. These forms have also been exhibited. The form sets out that any person who engages in book-making commits an offence under section 7 of the Gambling Ordinance Cap. 148. It then sets out section 25 of that Ordinance. That section reads as follows :-

The form then goes on to say that the official named is so authorised by the Stewards that he suspects that the person being served with the notice has been committing an offence under section 7 and that he is accordingly being ejected from the racecourse. It further goes on to say that the official is authorised by the Stewards of the Jockey Club to demand the surrender of his badge pursuant to the Club's enclosure By-Laws and furthermore pursuant to those By-Laws the Stewards have directed that any person who is ejected pursuant to section 25(2) of the Ordinance shall be denied access to the Club premises for a period of two years from the date of ejection. A translation of the notice in Chinese is on the reverse side.

5. It is not in dispute that the Respondent is a racing club and the official, Mr. Yeung, was duly authorised under section 25 and the Club By-Laws.

6. The applicants go on to say that they were searched by police officers, some of their personal documents taken away and subsequently returned to them. The applicants were each told that they were suspected of book-making but were not told on what grounds that suspicion was based. Each denied that they had taken part in any book-making activity. The applicants were then told to leave the course and they did so.

7. Mr. Fudge in his affidavit says that before making the decision to eject the applicants he discussed the information he had about their activities with the security controller who agreed with the decision. He did not tell either applicant what that information was but says that their activities had been observed over a period of some six months, not only at Happy Valley but also at the Shatin racecourse. He said that he considered that if such information was given to the applicants it would reveal the methods used by the Respondent Club in carrying out its statutory duties to prevent illegal booker-making and render those methods valueless in future.

8. The applicants then instructed their solicitors to seek an interview with a Senior Official of the Respondent Club to be followed by some form of hearing before "some neutral person" when the evidence against the applicants would be heard and tested by cross-examination, both the applicants and the Respondent Club being legally represented. That request was refused and the Club's solicitors denied the allegations that the applicants had been rudely treated but said they had simply been told that they were suspected of book-making, their badges had been taken back and they had been ejected from the course. This was done in pursuance of the Club's statutory obligations. The Respondent Club said it had the right to take back the guest badges from the applicants and to declare them irvalid for the rest of the season. It also had the right as owners of private premises to refuse the applicants' admission to those premises and furthermore, as they were suspected of book-making, not only did the Club have the right but also were under a statutory duty to eject them from a course. The applicants' solicitors replied to that stating that the manner in which the applicants had been treated was contrary to the rules of natural justice and repeated their request for an interview with a Steward or Senior Club Official. That has not been granted.

The case for the applicants

9. Mr. Van Burren argues that it is a basic rule of natural justice that before a person is penalized he must be told what offence he has alleged to have committed and what the evidence is against him. He must be given the opportunity to refute such allegations and to have his side of case considered. Here the applicants have been accused in the presence of their friends of book-making, their badges have been removed, they have been ejected from the course and told that they may not come back to either of the only two racecourses in Hong Kong for a period of two years. They are both keen race-goers and this is a very severe penalty, in addition to the loss of esteem and reputation among their friends, employers and business associates. Natural justice demands that they should have been afforded a fair hearing of the case against them and they should have been allowed to reply to it. He relies on the dicta of Hailsham, L.C. in the Chief Constable of North Wales v. Evans (1982) 1 WLR 1155 at p. 1173:

"Thus the decision of an inferior court or public authority may be quashed (by an Order of Certiorari made on an application for. Judicial Review) where that court or authority acted without jurisdiction or exceeded its jurisdiction or failed to comply with the rules of natural justice in a case where those rules are applicable. The function of the court is to see that lawful authority is not abused by unfair treatment. "

 

The concept that nobody should be deprived of liberty or property, including the right to practise a profession or calling, by a judicial proceeding without a fair opportunity of answering the case against him, audi alteram partem, goes back a very long way and the applicants rely on a line of cases which set out that principle. In General Medical Council v. Spackman (1943) A. C. 627 it was held that the Medical Council should have heard evidence tendered by a doctor regarding alleged adultery with a patient and a failure to do so rendered its decision to strike the doctor off the register void as it had not held a "due inquiry" as required by the Medical Act, 1858. In Davies v. Carew-Pole and Others (1956) 1 WLR 833, which also had a racing conotation as it concerned an unlicensed trainer of horses being "warn off''', Pilcher, J. said at p. 838 :

"It has been laid clown frequently by the courts that domestic tribunals such as committees of clubs and committees of trade anions while not bound by the strict rules which prevail in a court of law should observe the cardinal principles of natural justice - no doubt in order that they should not unwittingly commit an injustice. It has also frequently been said that prominent among such rules is the rule that an accused person should be given reasonable notice of the charges to be brought against him so that he may consider and prepare his defence, if any. The second cardinal rule is that the accused be afforded an opportunity of saying anything he may wish to in his own defence."

10. Here the applicants say that the Respondent Club is a public authority which has been granted a monopoly of racing in Hong Kong. It has sold the applicants a season guest badge but has taken it back and ejected them from the course on the grounds that they were suspected of book-making without being told what was the evidence in support of that allegation and being asked what they wish to say in reply to that allegation. The applicants have furthermore been told that they may not be admitted to the racecourses for a period of two years and their request that there should be an enquiry held as to the truth of the allegations has been refused.

11. So far as the statutory provision is concerned, the applicants submit that section 25 of the Ordinance directs the respondent to use "reasonable and lawful" methods to prevent book-making. The way the applicants were treated was not reasonable as they were not told what the evidence was against them or given a chance to refute it, and it therefore follows that it was not lawful.

The case for the respondent

12. Mr. Citing for the respondent ways that first of all this is simply not a case where judicial review is an appropriate remedy. Quite apart from the statutory obligation placed on the respondent by section 25 of the Gambling Ordinance, here a Club has removed persons from its own private premises and any rights which the applicants may have are essentially private. Only matters of a public nature are subject to Judicial Review and the fact that the respondent is a Club which enjoys a monopoly of horse racing in Hong Kong does not make its right to remove persons from its premises a public matter. Law v. National Greyhound Racing Club Ltd.  (1983) 1 WLR 1302. Furthermore here the respondent is under a statutory obligation to do what is now complained of. A duly authorised official of the Respondent Club, a "racing club", did suspect that the applicants had committed an offence under section 7 of the Ordinance. Sub-section (1) of section 25 of that Ordinance says that the Respondent shall use all reasonable and lawful means to prevent the commission of such offences and specifically says that removal pursuant to sub-section (2) is one of those means. The section contains nothing at all suggesting that there should be any form of enquiry or hearing before a person is so removed. It would, in any event, be totally inpractical to have such a hearing which would have to be clone at the time removal was being considered. It would be impossible to hold any form of enquiry under those circumstances and in any event such an enquiry would inevitably gravely prejudice the Club in carrying out its functions. The Club employs methods to combat book-making which are highly confidential and is under no obligation either by the terms of the Ordinance or by the principles of natural justice to advise the applicants what those methods are and how they were carried out in their particular case. The Respondent Club has a duty to protect what is a very substantial betting operation involving enormous sums of money and it could not do so if its hands were tied in the manner suggested by the applicants.

Decision

13. After the hearing of this matter, as I was in no doubt that the application could not succeed, I dismissed it and said I would give my reasons in writing, which I now do.

14. There are three grounds on which I am satisfied that these applications must fail. These are :-

1.             I am satisfied that the applicants were in the members' enclosure at the Happy Valley racecourse pursuant to a contract between them and the Respondent, Club. They had paid $27,000 and had been issued with a guest badge for the 1984/85 season, and any rights which might arise by the Respondent club unilaterally terminating that contract are essentially between itself and the applicants. They may give rise to a claim for damages but they are not of a public nature and are not subject to judicial Review. In Law v. National Greyhound Racing Club Ltd., a dog trainer had been suspended by the Club's Stewards because a dog in his charge had been doped. He brought an action by way of originating summons, seeking a declaration that the Stewards' action was void as being in breach of an implied condition in the contract between them that the Stewards would only take reasonable and fair action against him and this they had failed to do. The Court of Appeal upheld a decision dismissing an application by the Club to strike out the motion on the grounds that the matter should have been brought by application for judicial review. Lawton, L.J. agreed with the dicta of Wolff, J. in R. v. British Broadcasting Co-operation Ex Parte Lavelle (1983) 1 WLR 23:

"There is nothing in rule 1 or section 31 which expressly extend the circumstances in which the prerogative writs of mandamus prohibition or certiorari are available. These remedies were not previously available to enforce private rights but were, what could be described as public law remedies. They were not appropriate, and in my view, remain inappropriate remedies for enforcing performance of ordinary obligations owed by a master to his servant.... I regard the wording of the Order 53 Rule 1(2) and section 30(2) of the Act of 1981 is making it clear that the application for Judicial Review is confined to reviewing activities of a public nature as oppose to those of a truly private or domestic character."

 

Lawton, L.J. goes on to say that he considers that that dicta is supported by two other decisions of the House of Lords O'Reilly v. Mackman (1983) 2 A.C. 237 and Cocks v. Thanet District Council (1983) 2 A. C. 286. In each of these cases, the plaintiffs had commenced actions against the defendants for declarations, not by way of Judicial Review. In O'Reilly v. Mackman, the defendants were the board of visitors of a prison in Cocks v. Thanet District Council the defendants were a housing authority. In Cocks v. Thanet District Council at p. 294 Lord Bridge adopts and approves dicta of Lord Diplock in O'Reilly v. Mackman:

"It would, as a general rule, be contrary to public policy, and as such an abuse of the process of the court, to permit a person seeking to establish that a decision of a public authority infringed rights to which he was entitled under the public law to proceed by way of an ordinary action and by this means to evade the provisions of Order 53 for the protection of such authorities."

 

Here I am satisfied that the security officer employed by the Respondent Club could not be considered a "public authority". He is an official appointed by the Respondent Club to carry out its policy of removing persons from its own private premises who it does not wish to remain there. Lawton, L.J. in Law v. national Greyhound Racing Club Ltd. at p. 1309 says:

"Accordingly in my view the authority of the Stewards to suspend the licence of the plaintiff derives wholly from a contract between him and the defendants. I see nothing to suggest that the defendants have rights or duties relating to members of the public as such. What the defendants do in relation to the control of Greyhound racing may affect the public or a section of it but the defendants' power in relation to the matters with which this case is concerned are contractual."

 

I am satisfied that precisely the same considerations apply here.

2.             I am also satisfied that, as the applicants are not members of the Respondent Club, there is no duty on the Club to hold any form of enquiry before it expels them from its premises. It may well be that if they were members of the Club they would have rights under the Club's constitution to be informed of the evidence against them and to be given an opportunity of making submissions to the Stewards if they were to be suspended from membership. That is simply not the case here. The applicants are members of the public who have obtained badges via friends who are members of the Club. Pursuant to its By-Laws the Club has the right to revoke those badges at any time in its absolute discretion and this it has done. The exercise of that power is not challenged here.

3.             I am also satisfied that in exercise of its powers under section 25 of the Gambling Ordinance, the Respondent Club is not exercising a judicial or ever a ministerial function but is exercising a discretion and that discretion is not the subject judicial review. In the Australian case of The King on the Prosecution of Freeman, v. Arndel 3 C.L.R. 557 there was an application for mandamus to quash an order made by the Postmaster General of New South Wales made under section 57 of the Post and Telegraph Act 1901. That Section provided that if the Postmaster General had reasonable ground to suppose any person was engaged in receiving money or any valuable thing inter alia in connection with a fraudulent, obscene, indecent or immoral business or undertaking he could refuse to deliver mail to such a person. At p. 574 Barton, J. said:

"Nothing can be adduced from the framework or substance of the Post and Telegraph Act 1901 which entitles us to consider that this particular section 57 is one which prescribes a judicial enquiry. Other sections of the Act had been cited and amongst them sections 29 and 43 which I will mention directly. There is not a shred of context in the Act which shows that the Minister of State, prima facie an officer with administrative functions, is conducting a judicial enquiry when he is informing his mind for the purpose of deciding whether he has reasonable cause to suppose that a business largely conducted through his department is fraudulent or immoral."

 

15. In the same way I do not see any suggestion of an enquiry being held before a decision is made to remove a person from a racecourse under section 25(2). It simply provides that the authorised official may require a person to leave the racecourse if he has reason to suspect that that person is committing the offence of book-making. It is a sweeping power but no doubt was intended to be so.

16. In The Queen v. Davey and Others (1899) 2 QB 301, it was held that an order whereby a person was removed to a hospital because they were considered to be suffering from a dangerous infectious disease could be made on an application without notice. At p. 306 Channell, J. said:

"There are, however, exceptions to this law which arise where it can be seen on the words of statue that it was intended that the order should be made on an ex parte application and the case in which it is easiest to see the propriety of the exception is where looking at the scope and object of the legislation, it was clearly intended that the parties putting the law in force should act promptly."

 

17. In R. v. Cornwall Quarter Sessions ex parte Kerley (1956) 1 WLR 906 meat had been condemned and destroyed by order of a Justice of the Peace. It was held that it was a executive, not a judicial act and no appeal lay from it. This was a matter which required rapid action and the legislation had clearly given power to a responsible person, or in this case a Club, to do just that.

18. Counsel for the plaintiffs was asked what form of enquiry he envisaged should be held before a decision to eject was made and I think he was in some difficulty in suggesting a form of enquiry gave the applicants a real safeguard but which did not at the same time hopelessly prejudise the Respondent's methods of detecting offences. Any form of enquiry would have to be based on evidence to be given by the officials who have been observing the conduct of the persons who are suspected. They would have to say what they had seen and how they had been able to do so. First of all I do not consider that this form of enquiry, conducted at the time when removal is contemplated, would offer any real protection to the suspect and it must have the effect of making the methods employed of little use in future. I am quite satisfied that no such enquiry was ever contemplated as being a requirement before the suspected person was removed from the course. Before reading legislation as requiring notice to be given and a judicial-type procedure to be followed a Court should be satisfied as to the likely practical effects that would follow. Here I am satisfied that the practical effect of such a requirement would be to nullify the powers given by the subsection.

19. For these reasons I am satisfied that the application must fail.

Costs

20. The Respondent Club is entitled to its costs. It was submitted that this was a matter of the gravest importance to the Respondent Club and that they were entitled to be represented by leading counsel. It was submitted by the applicants that they had a genuine grievance and even if they have failed in the action they should not be penalized by the award of the costs for two counsel.

21. This was clearly a very important matter so far as the Respondent Club was concerned and there will be certificate for two counsel.