CHEUNG KWOK HUNG v. LIQUOR LICENSING BOARD

1994, No. MP 2937

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. This is an application by the Respondent to set aside the leave I granted to the Applicant to proceed by way of judicial review on the 20th October.

2. The Decision against which the relief is sought is the Decision of the Respondent made on the 22nd September not to renew the Applicant's liquor licence to sell liquor at the Domus Club in Cameron Road, Kowloon.

3. The letter notifying the Applicant of the Decision not to renew the licence was in this form.

	28 September 1994
Mr. CHEUNG Kwok-hung
Domus Club
26-28 Cameron Road, 3/F
Kowloon

Dear Sir,

Application for Renewal of Liquor Licence

I write to inform you that the Liquor Licensing Board decided at its meeting held on 22.9.1994 to refuse your captioned application. The Board noted the report from the Police that your club and the Paris by Night Lounge one floor below your club were actually run by one and the same management. Although Paris by Night was unlicensed, liquor was found to be provided by your club to the unlicensed premises. The Board considered that this showed blatant contempt for the law and for the authority of the Liquor Licensing Board. The Board also noted the report from the Police that both premises had record of employing underage girls. Given the above factors, the Board decided that you are no longer a fit and proper person to hold a liquor licence and therefore refused your application.

If you are dissatisfied with the Board's decision, you may appeal to the Municipal Services Appeals Board. An appeal form is attached.

4. The grounds upon which relief is sought are :

" Grounds on which relief is sought

1) The decision of the Liquor Licensing Board not to renew the Applicant's licence was manifestly unreasonable in the Wednesbury sense in that the Liquor Licensing Board had acted ultra vires its powers in renewing the Applicant's licence for a period of three months commencing on the 21st July 1994. None of the objections raised by the police to the renewal of the liquor licence related to the period post 21st July 1994.

2) The decision of the Liquor Licensing Board not to renew the applicant's licence was manifestly unreasonably in the Wednesbury sense in that there was no basis in fact for the Liquor Licensing Board's finding that the Domus Club and Paris By Night Lounge were run by one and the same management.

3) The decision of the Liquor Licensing Board not to renew the applicant's licence was manifestly unreasonably in the Wednesbury sense in that there was no basis in fact for the Liquor Licensing Board's finding that liquor had been provided by the Domus Club to the Paris By Night Lounge.

4) The decision of the Liquor Licensing Board not to renew the applicant's licence was manifestly unreasonable in the Wednesbury sense in that there was no basis in fact for the Liquor Licensing Board's finding that both premises had a record of employing underage girls.

5) There was an error of Law on the face of the record in that the Liquor Licensing Board in refusing to renew the applicant's licence took into account matters which were not personal to the applicant and which had no bearing on whether the applicant was a fit and proper person to hold a liquor licence.

6) There was an error of law on the face of the record in that in refusing to renew the Applicant's licence the Liquor Licensing Board took into account irrelevant matters that is to say incidents which had already taken place prior to the most recent renewal of the Applicant's licence on the 21st day of July 1994.

7) There was a breach of the rules of natural justice in that the Liquor Licensing Board in refusing the application to renew the liquor licence had acted unfairly.

8) There was an error of law in that the Liquor Licensing Board acted ultra vires in not renewing the liquor licence when there was no breach of regulations or of the conditions of the licence by the Applicant."

5. The main complaint which is made by the Respondent is that when I granted leave I made the usual consequential order that interim relief should be granted pending the determination of the substantive application. To be more specific I ordered the Respondent to renew the Applicant's licence pending the outcome of the hearing.

6. Miss Watson who represents the Respondent submitted that I had no power to make any such order. As this involves establishing a negative proposition I invited Mr. Chain for the Applicant to indicate how he would meet this problem. He accepted my invitation.

7. He submitted that the case of Chan Fai v. TELA unreported being Civil Appeal 69/1989 provided clear authority for me to make such an order.

8. Hunter J.A. held in a similar situation that the court could grant interim relief even though it amounted to interim mandatory relief. It seems that reliance was placed upon s. 35 of the Supreme Court Ordinance, Cap. 4.

"35. Powers of single judge in Court of Appeal

(1) Subject to subsection (3), in pursuance of the civil jurisdiction of the Court of Appeal, any order or direction not involving the determination of the appeal may be made or given by a single judge sitting in court or in chambers, and a single judge may likewise make any interim order which he may think fit to prevent prejudice to the claims of any party pending an appeal.

(2) (Repealed 52 of 1987 s. 28)

(3) Every order or direction made or given by a single judge under subsection (1) may be discharged or varied by the Court of Appeal.

(4) (Repealed 52 of 1987 s. 28)"

9. Mr. Chain went on to argue that it was a well established principle that the threshold for granting leave under Ord. 53. was not high and that if he was able to establish that the Applicant had an arguable case the leave granted should not be set aside.

10. He went on to consider the legislative provisions governing the granting of liquor licences.

11. Regulation 20 of the Dutiable Commodities (Liquor) Regulation provides :

"20. (1) As soon as practicable after the granting of an application for a liquor licence or any renewal thereof, the Board shall, upon payment to the Director of Accounting Services of the prescribed fee or such proportion thereof as is provided by paragraphs (4) and (5), issue to the applicant a liquor licence.

(2) [Deleted, 39 of 1985, s. 60]

(3) A liquor licence shall be valid for a period of 1 year, 9 months, 6 months or 3 months as the Board shall determine, commencing from the date on which it is granted or such other subsequent date as the Board may determine.

(4) Where any liquor licence is granted for any period other than 1 year, the fee payable for such licence shall be such proportion of the prescribed fee as the period for which such licence will be valid bears to a period of 12 months.

(5) For the purpose of calculating the fee payable under paragraph (4), any fraction of $1 shall count as $1."

12. He submitted that the situation was different where a licence was being renewed than on an initial application as the holder of the licence had a legitimate expectation that the licence would be renewed.

13. He accepted, however, that there were no provisions in the Hong Kong legislation similar to those in the United Kingdom which empowered the licensing authority to extend the duration of a licence pending the outcome of an appeal from a refusal to renew a licence. This amounted to a lacuna in the legislation which could be filled in the manner contemplated by Hunter J.A. in Chan Fai v. TELA.

14. I regret that I do not accept the validity of this contention. I accept that the court does have jurisdiction to grant interim relief even of a mandatory nature if it is appropriate to make such an order.

15. What is necessary is to consider whether it is appropriate to make such an order.

16. I have no doubt that it is not appropriate to make an order in the present case.

17. I do not think that the Respondent even has the power to make an order extending the duration of the licence up to the date of the hearing of the Judicial Review.

18. Regulation 19 of the said Regulation provides :

"19. (1) Where an application is refused under regulation 17(1) or a liquor licence is revoked under regulation 23(1), the Board shall refuse to consider any further or other application for a liquor licence in respect of the premises concerned within a period of 12 months after the date of refusal or revocation -

(a) by the former applicant or by the person whose licence was revoked; or

(b) by any other person, unless such person satisfies the Board, by furnishing to the Board such particulars as it may reasonably require, that he is not acting on behalf of the former applicant or the person whose licence was revoked, as the case may be.

(2) Where the Board refuses to consider an application by a person referred to in paragraph (1)(b), such person may appeal to the Appeals Board against the refusal."

19. I am unable to accept Mr. Chain's contention that all was intended by Regulation 19 was to prevent the abuse of successive applications being made by a disappointed Applicant. I consider that the Regulation prevents an Applicant such as the Applicant in this case from making an application for an extension of his licence pending an appeal after a renewal has been rejected. I am driven to the conclusion that it was the deliberate intention of the legislature not to include a power of extending the period of a licence pending an appeal as can be done in the United Kingdom. This being the case it cannot be right for the courts to make orders which have the effect of overcoming this deficiency, however meritorious any particular case may appear to be.

20. One of the main grounds advanced by Miss Watson in support of this application is the availability of an alternative remedy by way of an appeal to the Municipal Appeals Board. Mr. Chain argued that this alternative was not an attractive one for his client as it was unlikely that the Board would be able to entertain an appeal for some months. In the meantime the Applicant's business would be crippled by the absence of a liquor licence.

21. The success or otherwise of this argument is dependent upon the being able to hold that it has power in these Judicial Review proceedings to grant interim relief of the nature sought. For the reasons I have already given I am satisfied that I am unable to grant this.

22. It is necessary for me to consider another matter. Mr. Chain submitted that all he had to establish was that the Applicant had an arguable case for leave to be granted. I do not think that this is the case where the court is being asked to grant interim relief in the form of a mandatory order.

23. Bridge L.J. as he then was said at page 481 of De Falco v. Crawley Council [1980], 1 QB 460.

"I have no doubt therefore that the court may properly exercise its discretion to grant a mandatory injunction on an interlocutory application in an appropriate case. In considering what principles should govern the exercise of this discretion, I do not think much assistance is to be derived from authority. In particular I am satisfied that the principles expounded by Lord Diplock in American Cyanamid Co. v. Ethicon Ltd. [1975] A.C. 396, governing the grant of prohibitory injunctions on interlocutory applications, have no relevance to the case we are considering. A dispute between an applicant who claims entitlement to be provided with accommodation and a local authority who dispute that entitlement exhibits sufficiently unusual features to make a comparison even with other types of litigation where a mandatory injunction may be granted on interim application difficult and possibly misleading. I think the appropriate principles can only be derived from a consideration of the likely consequences to the parties to such a dispute of granting or withholding relief. In a case where the applicant is entitled to relief but it is withheld, he will be rendered homeless when he should have been housed. This is an injury which is sufficiently traumatic and hardly compensable in damages. On the other hand, if the local authority is required to provide accommodation to which the applicant is not entitled, this may, as the figures we have been given in the present case show, impose a heavy financial burden on the rate-payers with no prospect of recompense by way of a cross undertaking in damages. What is perhaps more important, a mandatory injunction to provide accommodation for a particular applicant who ought not to enjoy priority may operate to the detriment of others on the local authority's housing list by interfering with the local authority's own system of priorities for the fair distribution of limited housing resources. In the light of these considerations, I think the court inevitably must make the best assessment it can, on an interim application for a mandatory injunction, of the strength of the applicant's claim to impugn the local authority's decision adverse to him and should only grant the relief sought if a strong prima facie case is made out."

24. These observations would appear to be germane to the present case.

25. Indeed there would appear to be much to commend a practice in Ex parte applications of giving notice to the other party to the litigation of the hearing where the relief being sought is in the nature of mandatory relief.

26. Having regard to the grounds for the relief claimed I am not of the opinion that the Applicant has got a sufficiently compelling case to justify the granting of leave.

27. The conclusion that I have reached is that I should not have granted leave in this case. I therefore order that the leave is to be set aside. I will hear the parties on costs.