TANG YEE YU v. 香港銅鑼灣社會保障辦事處

CACV 207/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 207 OF 2010

(ON APPEAL FROM HCSA 41/2008)

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BETWEEN

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J U D G M E N T

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Hon Cheung CJHC:

Facts

1.  This is an appeal by the Defendant from the judgment given by Yam J on 13 September 2010, allowing a consolidated appeal by the Claimant from the decisions made by the Small Claims Tribunal in three sets of proceedings in which the Claimant’s claims were all dismissed.

2.  The Claimant was at all material times and is a recipient under the Comprehensive Social Security Assistance Scheme (“CSSA” and “the Scheme”).  It is a non‑statutory scheme administered by the Director of Social Welfare.  The Scheme is based on the Government’s policy to provide financial assistance to bring the income of needy households up to a prescribed level to meet their basic needs.  The amount of assistance is determined by the resources and needs of the household.  The difference between the household’s assessable income and recognized needs under the Scheme is the amount of assistance payable.

3.  Payments under the Scheme can be broadly classified into three types.  First, standard rates are paid to different categories of CSSA recipients to meet their basic needs.  Second, supplements – there are the long‑term supplement, single parent supplement, community living supplement and transport supplement.  Third, special grants :

“Special grants are payable to meet the specific needs of an individual applicant or the applicant’s family. They include payments to cover rent, school fees and school-related expenses, essential travelling expenses, medically-recommended diet, cost of medical and rehabilitation appliances. Able-bodied adults/ children are only entitled to rent allowance, water and sewage charge allowance, grant to cover schooling expenses for children, grant to cover child-care centre fees and burial grant.

For CSSA cases where the household has to pay rent for a public rental housing (PRH) flat (including an Interim Housing unit) under the Hong Kong Housing Authority (HA), the SWD [Social Welfare Department] will, under normal circumstances, arrange direct bank transfer of the CSSA rent allowance payable to the household to HA’s bank account monthly for paying rent (including the license fee) of the PRH flat.” (CSSA pamphlet (September 2009) published by the Social Welfare Department, page 4)

4.  The present case only concerns the special grant for rent, which covers Government rates as well.  In the case of the Claimant, she was at all material times (and is) a public rental housing tenant.  The CSSA assistance provided to her therefore included, amongst other things, the standard rate (for single able‑bodied adult) and rent allowance. The amount of rent (including rates) which the Claimant had to pay to the Hong Kong Housing Authority (“the HKHA”) in respect of her public housing estate flat was $900 per month in 2002 and 2007.  The rent included rates in the amount of (i) $133 per month for January to March 2002 and (ii) $122 per month for April to December 2002.  As the rent was below the ceiling fixed by the Director, the rent allowance paid by the Defendant to the HKHA direct on her behalf was equal to the amount of rent charged by the HKHA.

5.  In October 2001, the Government announced that the rates for the four quarters in 2002 would be reduced by up to $2,000 to help relieve the burden of residents.  The HKHA decided that as the rent for public rental housing includes rates, it should be lowered by the amount of rates so waived by the Government.  In other words, tenants of public rental housing flats would also benefit from the rates waiver just as any other landowners and tenants in Hong Kong.

6.  Similarly, in 2006, the HKHA decided that the rent (inclusive of rates) for the month of February in 2007 would be waived.

7.  In other words, in respect of the Claimant’s public rental housing flat, the rates payable by her for the whole of 2002, totalling $1,497 ($133 x 3 months + $122 x 9 months), as well as the rent (inclusive of rates) payable by her for the month of February 2007 in the sum of $900, were waived.

8.  The waiver, or “remission”, of rates and rent by the HKHA did not involve any money changing hands.  What happened was that in each of the months in 2002, the Director remitted as rental payment a lesser amount of money, on behalf of the Claimant, to the HKHA; in February 2007, the Director simply made no remittance to the HKHA.

9.  In the various proceedings before the Small Claims Tribunal, the Claimant claimed that she was entitled to be paid by the Defendant the amounts of remission given by the HKHA, as they were remissions that were meant by the HKHA to benefit her, not the Director.  She failed before the Small Claims Tribunal, but succeeded on appeal before Yam J.

Judgment below

10.  The Judge upheld the claims on one ground only, namely, restitution arising from unjust enrichment.

11.  The Judge thought that the Defendant was enriched in a negative sense, that is, the Social Welfare Department benefited from the remissions by a “saving of a necessary expenditure”.  The Judge took the view that this was achieved “at the expense of the Claimant”.  He thought that the remissions “were given to the tenants, including Ms Tang in mind” (paragraphs 23 to 25 of the Reasons for Judgment below).  He went on to hold that the enrichment was “unjust”.  Further, it was “ultra vires” the remit of the Social Welfare Department for the Department, as a public authority, to pocket the remissions, instead of returning the same to the Claimant (paragraphs 26 and 27 of the Reasons for Judgment).

12.  The Judge held that the Claimant had a good claim for restitution based on unjust enrichment.  He preferred using “restitution” to “quasi‑contract”, the term used in the Schedule of the Small Claims Tribunal Ordinance (Cap 338) to define the relevant jurisdiction of the Tribunal (paragraphs 14 to 18 of the Reasons for Judgment).

Appeal

13.  From the Judge’s decision, the Defendant appeals.  For the purpose of the appeal, the Defendant has been treated as being synonymous with the Social Welfare Department, which is headed by the Director of Social Welfare.  Strictly speaking, the Secretary for Justice should have been sued on behalf of the Director.  But nothing turns on this technicality.  Essentially, the Director argues that the Claimant has no cause of action based on quasi‑contract.

True nature and purpose of rent allowance

14.  In my view, the whole case turns on the true nature and purpose of rent allowance under the Scheme.  The Deputy Adjudicator found as a fact that the allowance is in the nature of a reimbursement (“津貼是實報實銷的”) (paragraph 4 of the Reasons for Decision dated 5 June 2008 given in SCTC 66717/2007).  This is a finding of fact, from which there can be no appeal to the High Court : sections 28(1)(a) and 29(2)(i) of the Small Claims Tribunal Ordinance.

15.  In any event, this finding is fully supported by the evidence before the Court (including the evidence placed by consent before the Court in this appeal).  As mentioned, the CSSA pamphlet specifically mentions that special grants, of which rent allowance is one, are payable “to meet the specific needs of an individual applicant or the applicant’s family” (emphasis added).  The allowance is a need‑based grant.  Thus, for a CSSA recipient who is a public rental housing tenant, the rent allowance is paid directly by the Social Welfare Department to the HKHA’s bank account on a monthly basis for payment of rent in respect of the public rental housing flat in question.  The allowance is not paid to the CSSA recipient as such, and he or she is therefore not at liberty to and cannot use the allowance for any other purposes.

16.  The Legislative Council Paper dated April 2003 prepared by the Health, Welfare and Food Bureau for the purposes of discussion by the Legislative Council Panel on Welfare Services on 14 April 2003 and entitled “Special Grants under the CSSA Scheme” (Paper No CB(2)1739/02‑03(04)) is to the like effect :

“2. Under the CSSA Scheme, in addition to standard rates and two special supplements (i.e. annual long‑term supplement and monthly single parent supplement), recurrent and one‑off special grants can be made to CSSA recipients on a need basis so as to tailor assistance to the varied needs of individuals and families. The administration of special grants is within the discretionary power of the Director of Social Welfare (DSW).

…..

5. Under the existing system, special grants are payable in three modes: to meet the actual expenses in full, to meet the actual expenses up to a prescribed maximum level, and on a flat‑rate basis. To avoid any undue hardship on the part of CSSA recipients, advance payment can be arranged whenever there is a proven need to do so.

…..

9. Rent allowance is payable as a standard special grant to all CSSA recipients to meet the cost of accommodation. The amount of the allowance is the actual rent paid or the prescribed maximum level by household size, whichever is the less. In cases where the recipient living in private housing has been waitlisted for compassionate rehousing or admission to a subvented home for the elderly, DSW has the discretion to approve a rent allowance above the maximum level to cover the actual rent paid.”

(emphasis added)

17.  In my view, this is conclusive on the true nature and purpose of the special grant for rent.  It is paid to a recipient on a need basis.  It seeks to reimburse the recipient for the “actual rent paid”, subject to a prescribed maximum level.  In other words, provided that the ceiling is not exceeded, the recipient gets rent free accommodation.

18.  Mr Kwok for the Claimant argues that the special grant for rent is not a reimbursement payment because it is subject to a ceiling.  He contends that a true reimbursement payment must be “dollar to dollar, back to back”.  This is not the case when you have a ceiling, counsel argues.

19.  With respect, I do not follow counsel’s logic.  The fact that reimbursement is subject to a maximum amount does not alter the true nature of the payment.  It only means that there is a limit to the reimbursement.  There is nothing mutually inconsistent between reimbursement and a ceiling.

20.  In any event, according to the Legislative Council Paper, the special grant for rent is indeed a payment “to meet the actual expenses up to a prescribed maximum level” (paragraph 5).  In other words, it is a reimbursement payment subject to a ceiling.

Money had and received from the HKHA?

21.  This is fatal to the Claimant’s case. When there is a reduction of rent (by means of a waiver of rates) for a particular month, the rent payable by the CSSA recipient as tenant, and therefore his need, is reduced to the extent of the reduction.  It follows that the rent allowance payable on his or her behalf to the HKHA should be reduced accordingly.  When the rent for a particular month is waived entirely, no rent is payable.  Therefore, no reimbursement is required and thus no special grant is payable.  The question of “returning” the amount of rent or rates remitted by the HKHA to the CSSA recipient simply does not arise.

22.  In the case of a rent reduction or waiver, the CSSA recipient simply continues to enjoy his or her rent free accommodation just as before (assuming that the allowance cap is not exceeded).  The fact that even without the rent reduction or waiver, he or she was already enjoying rent free accommodation does not mean that he or she should pocket the rental remission.  Indeed the reason why the CSSA recipient does not appear to enjoy any “benefit” from the remission as such is that even without the rental reduction or waiver, he or she has already been relieved of the obligation to pay rent by reason of the rent allowance.

23.  The fact that the HKHA called the reduction or waiver a “remission” does not alter the true nature of the arrangement as analyzed above.  What is important is not form but substance. In substance, what was decided by the HKHA was to reduce or waive the rent (or rates) payable by the tenant for the relevant month.  The reduction or waiver reduced or absolved the CSSA recipient’s need in terms of accommodation for the affected month, and thus a reduced allowance or a nil allowance.

24.  Viewed in this light, there is no question of the Social Welfare Department or the Director having had or received any money from the HKHA for the use of the Claimant by reason of the remissions.

25.  Mr Kwok argues that what has actually happened was that the Director, on behalf of the Claimant, made a notional payment of the full contractual rent to the HKHA in the relevant month and then the HKHA made a notional repayment to the Director by way of remission of rates or rent.  The notional remission was therefore money had and received by the Director for the use of the Claimant.

26.  Counsel argues that the picture would be even clearer had there been actual remission of money by the HKHA after full payment of rent for a particular month.

27.  With respect, Mr Kwok’s argument is artificial to the extreme and ignores the reality of the matter. Whatever label was applied (waiver, reduction or remission), the reality of the matter was that the HKHA, in line with Government policy, required its tenants to pay lesser or no rent for the affected months in question, so as to relieve their financial burdens in respect of accommodation.  As the special grant for rent is on a need basis, the amount of the grant to the Claimant was reduced accordingly.  There simply was no money had and received by the Director for the use of the Claimant.

Money had and received from appropriation?

28.  Mr Kwok then seeks to approach the matter from another perspective.  He argues in the alternative that the Director had and received money, not from the HKHA, but from the general revenue pursuant to the relevant Appropriation Ordinance and the Public Finance Ordinance (Cap 2).  In essence, counsel submits that by paying less rent or no rent to the HKHA because of the remission, the Director has achieved a saving of CSSA funds otherwise payable to the Claimant.  That constitutes money had and received by the Director for the use of the Claimant.

29.  I reject the argument.  The short answer is that no public money allocated for CSSA payments under the control of the Director for a particular financial year in question was earmarked for the Claimant’s use as such.  Allocation of public money on account of the Claimant’s accommodation only occurred when payment was made from public money to the HKHA for the benefit of the Claimant’s public housing flat.  The amount to be withdrawn from public money was totally dependent on the amount payable to the HKHA for the particular month in question.  The public money under the control of the Director for a particular financial year was a mixed pool of money without any specific allocation in respect of any particular CSSA recipients as such.  Any savings resulting from the rent reduction or waiver only resulted in a saving of the general pool of money under the control of the Director for that particular year.  There was therefore no money had and received by the Director for the use of the Claimant as such.

Outcome

30.  For these reasons, the Claimant’s claims must be rejected.  I would therefore allow the appeal, set aside the judgment below, and restore the orders of the Small Claims Tribunal.

31.  The parties are agreed that costs should follow the event.  I would therefore order that the costs of this appeal be paid by the Claimant to the Defendant to be taxed if not agreed.  The Claimant’s own costs shall be taxed in accordance with legal aid regulations.  As for the costs below, the Claimant was represented by the Bar Free Legal Service Scheme.  In those circumstances, all I would do is to set aside the costs order made by the Judge and make no order as to costs instead.

“Quasi‑contract”

32.  Before parting with this case, I should mention one matter for the sake of clarification.  As mentioned, the Judge preferred to substitute “restitution” for “quasi‑contract”, the term used in the Schedule of the Small Claims Tribunal Ordinance to define the relevant jurisdiction of the Tribunal.  That gave the unfortunate impression that the Judge was seeking to rewrite statutory law, which he of course cannot do.  The meaning of “quasi‑contract” is reasonably clear : Goff & Jones, The Law of Restitution (7^th ed), paras 1‑002 to 1‑003.  Replacing it with restitution (or restitution by reason of unjust enrichment) is both unnecessary and wrong, as indeed the two concepts are not necessarily identical.  It is apt to create confusion.  When it comes to the question of the exclusive jurisdiction of the Small Claims Tribunal, any such confusion is to be avoided.  Subject to any future legislative amendment, the jurisdiction of the Tribunal has always been and should continue to be governed by the reference to, amongst other things, “quasi‑contract” in the Schedule of the Ordinance.

Hon Cheung JA:

33.  I agree with the judgment of the Chief Judge.

34.  In order to succeed, the applicant has to establish that she is entitled to receive in any event and without any restriction to the money which SWD paid on her behalf to HKHA in the form of rent of her public housing flat. Clearly the applicant is not able to establish this because the money paid by SWD was for a specific purpose : it was a special grant to her under CSSA to reimburse her for the actual rent she paid to her landlord, although as a matter of practice SWD paid HKHA directly by way of bank transfer.

35.  In the circumstances why should it make any difference, if, as a result of HKHA’s decision to charge the applicant a lower rent, SWD would only be required to pay a lesser sum of money as reimbursement to the applicant.  The mere fact that SWD may in consequence save some money and have a surplus in its account does not mean that what has been saved belonged to the applicant.  There is no correlation between the two.  The special grant is tied directly to the actual rent payable or the prescribed maximum level whichever is lower.  The disposal of the saving or surplus is something that is between SWD and the Administration and is not of the applicant’s concern.  To claim for the remitted rent is to claim for something that she is never entitled to in the first place.  Her claim is misconceived.

Hon Lam J:

36.  I agree with the judgments of the Chief Judge and Cheung JA.

37.  It has to be borne in mind that this is an appeal from the Small Claims Tribunal. In the decision of the Adjudicator in SCTC 66717 of 2007, based on the materials before him, he concluded that the special grant is provided to the claimant on reimbursement basis.  As the Chief Judge pointed out, this is a finding that could not be re-opened on appeal.

38.  With respect to the learned judge below, His Lordship appeared to have lost sight of this important finding.  Without any attempt to explain how this conclusion can be reversed on appeal, Yam J simply asserted without any evidential basis at para.20 of his judgment that the SWD cannot reduce the amount for CSSA Rent subsidies short of a compelling reason.  Thus, His Lordship’s conclusion that the reduction in amount involves a saving of a necessary expenditure on the part of the SWD at the expense of the claimant is flawed in any event.

39.  Further, I have difficulty with Yam J’s conclusion at para.27 of his judgment that the decision of the SWD is ultra vires.  Once it is recognized that the special grant is provided on reimbursement basis, there is no question of the SWD acting in excess of his power (or ultra vires).  In any event, it is not open to a claimant to challenge the policy of the SWD as to the reimbursement basis for special grant in private law proceedings.  Against such background, it is difficult to support Yam J’s conclusion at para.28 of his judgment that the reduction of special grant in such circumstances is unjust.

40.  Having said these, I should also reiterate expressly my agreement with the Chief Judge that it is not open to the court to substitute “restitution” for “quasi-contract” as one of the bases for the jurisdiction of the Small Claims Tribunal.  Had Yam J confined himself to “quasi-contract”, he would probably appreciate that there is simply no viable claims by the claimant against the SWD in these cases.