HKSAR v. NGAN LUNG CAFé AND NOODLES RESTAURANT LTD

HCMA18/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.18 OF 2003

(ON APPEAL FROM TWS 3543/2002 & TWS 6463-6466/2002)

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J U D G M E N T

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1. The appellant company was convicted on 20 November 2002 by Mr Lambert Lee sitting in Tsuen Wan Magistrate's Court of five summonses, each of which alleged an offence of carrying on the food business of a restaurant otherwise than under and in accordance with a licence granted by the Director of Food and Environmental Hygiene ("the Director"). On each summons, the appellant was fined $10,000. The appellant now appeals against these convictions.

2. The offences were alleged to have been in breach of sections 31(1)(b), 35(1)(a) and 35(3)(a) of the Food Business Regulation made under the Public Health and Municipal Services Ordinance, Cap.132.

3. The appellant company was represented in court by its authorised representative Mr Choy Bing Wing but otherwise was not represented by Counsel. Mr Choy appeared before me on two occasions and he advanced the following grounds : Firstly, that the magistrate who was not Mr Lambert Lee, who had convicted the appellant company of six similar summonses should not have reviewed his original decision to find the appellant not guilty of the charges, secondly, that the Director had no power to cancel the appellant's restaurant licence, and thirdly, Mr Lambert Lee was made aware of the fact that the appellant had previous similar convictions and therefore should have disqualified himself from trying the instant case.

Background of the case

4. Six similar summonses were issued against the company and these were tried by another magistrate Mr Tony C.C. Poon. On 28 March 2002 Mr Poon found the appellant not guilty. On 24 June 2002 the prosecution applied to Mr Poon for a review of his previous decision, under section 104 of the Magistrates Ordinance, Cap.227. On 29 June 2002 Mr Poon reviewed his original decision and found that the appellant was not entitled to challenge the legality of the administrative act of suspension and cancellation of the restaurant licence. On 20 August 2002 the appellant was convicted of the six summonses.

5. These convictions were not appealed against by the appellant company, so strictly speaking, the appellant has no right to appeal against these convictions. However, I gave the appellant's representative more latitude because he was acting in person and allowed him to pursue this first ground of appeal.

6. The simple answer to this first ground is that quite clearly under section 104 of the Magistrates Ordinance, Cap.227, the magistrate did have the power to review his original decision which he eventually did.

Second ground of appeal - The Director has no power to cancel the licence

7. This ground of appeal is tied in with one of the arguments advanced by the appellant during the hearing of the appeal which was that the cancellation of the licence by the Director was an administrative act which was not supported by legislation.

8. Under section 125(1) of the Public Health and Municipal Services Ordinance, Cap.132 ("the Ordinance") a restaurant licence may be suspended or cancelled at the sole discretion of the licensing authority for the purpose of carrying out the objects of the Ordinance. The licensing authority had a system whereby if a licensee was convicted of a particular offence under the Ordinance, certain demerit points would be recorded against him and the number of points recorded depended on the seriousness of the offence. If the licensee accumulated 15 points or more within a period of 12 months, his licence would be suspended for seven days (first suspension); if the licensee again accumulated 15 points or more within a period of 12 months from the date of the last offence leading to the first suspension, his licence would be suspended for 14 days (second suspension); and thereafter if the licensee accumulated 15 points or more within a period of 12 months from the day of the last offence leading to the second suspension, his licence would be cancelled. This system was not prescribed for in the legislation and was a system devised by the licensing authority to better enforce the objects of the Ordinance. The system was made known to all licensees of food premises and cooked-food stores and was set out in English and Chinese in pamphlets distributed to licensees by the then Provisional Urban Council. In addition, in a letter dated 1 August 1997 the Provisional Regional Council informed the appellant that the system would be implemented with effect from that date.

9. Under section 125(9) of the Ordinance, if a person was dissatisfied with a decision to cancel or suspend a licence he may, within 14 days after the service on him of the notice declaring the decision, appeal to the Licensing Appeals Board. Under section 125B(4), a further appeal from the decision of the Licensing Appeals Board lies to the Municipal Services Appeals Board.

Chronology of events

10. The appellant's licence was granted on 30 May 1994. The appellant was convicted of three offences in 1998 and 1999 which resulted in 15 demerit points being recorded against it. On 29 July 1999, the appellant was informed of the decision to suspend the restaurant licence for seven days. The appellant appealed against the decision and the appeal was heard by the Licensing Appeals Board on 26 April 2000 and the appeal was dismissed on 25 July 2000. A further appeal to the Municipal Services Appeals Board was lodged by the appellant but was subsequently withdrawn. As a result of that original decision, the licence was suspended from 2 November 2000 to 8 November 2000 inclusive. This suspension was confirmed to the appellant in a letter from the Director dated 19 October 2000.

11. Between 2 to 8 November 2000 the business of the appellant was observed to have been in operation every day during the suspension period. On 30 November 2000 the Director wrote to the appellant informing it that since the suspension order was breached, it was proposed to cancel the licence. In a letter dated 2 February 2001 the Director rejected the representation made by the appellant and informed the appellant that the licence would be cancelled on 22 April 2001. The appellant made written objections to the department on the cancellation of the licence and on 3 April 2001 the Licensing Appeals Board refused to treat the appellant's representation as an application for appeal because he was out of time and the appeal was not in a proper format. By a letter dated 19 April 2001 the Director informed the appellant of the decision of the Licensing Appeals Board and the decision to cancel the licence as from 22 April 2001 was confirmed. On 22 April 2001 the licence of the appellant was duly cancelled.

12. The cancellation led to inspections of the premises and on the five occasions, the subject matter of the present appeal namely, on 26 September 2001, 30 October 2001, 30 November 2001, 28 December 2001 and 30 January 2002, the appellant's premises were observed by officers of the department to have been conducting the normal business of a restaurant.

13. The demerit points system devised by the Director was not provided for by the Ordinance or by any other piece of legislation. In deciding whether the actions taken by the Director under the scheme were enforceable in law, the court has to consider the reasonableness or otherwise of the actions. In Associated Provincial Picture Houses, Limited v. Wednesbury Corporation [1948] 1KB 223 which was subsequently followed in a number of other cases, the Court of Appeal in England held that the local authority in that case in imposing the condition that no children under 15 years of age should be admitted to Sunday cinema performances with or without an adult, had not acted unreasonably or ultra vires in imposing the condition. The court held that in considering whether an authority having so unlimited a power has acted unreasonably, the court is only entitled to investigate the action of the authority with a view to seeing if it has taken into account any matters that ought not to be or disregarded matters that ought to be taken into account. The court cannot interfere as an appellate authority to override a decision of such an authority, but only as a judicial authority concerned to see whether it has contravened the law by acting in excess of its power.

14. Lord Greene MR at p.234 said :

"Once the question (of whether the authority had taken into account matters which they ought not to take into account or had refused to take into account or neglected to take into account matters which they ought to have taken into account) is answered in favour of the local authority, it may be still possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. ..."

15. I have set out above the workings of the demerit point system and the actions taken by the Director in relation to the appellant's licence. In my judgment the Director had not acted unreasonably in enforcing the objects of the Ordinance. My judgment is that he had acted reasonably and with ample justification.

Third ground of appeal

16. The third ground of appeal relied upon by the appellant is that Mr Lee was aware of the previous convictions of the appellant and therefore should have disqualified himself from trying the case.

17. What had happened was that when the five summonses were set down the trial on 26 September 2002 in Court 1 of Tsuen Wan Magistracy, the appellant's representative raised with the Principal Magistrate an argument that the prosecution was malicious. The five summonses were set down for trial on 20 November 2002.

18. On 20 November 2002 the prosecuting counsel, anticipating that there would be a submission by the defendant on a preliminary point of whether the prosecution was malicious, or whether there had been an abuse of process by the prosecution, prepared a written submission which was handed in to the trial magistrate Mr Lee. In that written submission the prosecuting counsel alleged that the defendant had breached and continued to breach the law after his licence was cancelled and mentioned that the defendant's transgression of the law led to its six convictions on 20 August 2002 for carrying on the food business of a restaurant without a licence. I am not aware of the reason why prosecuting counsel found it necessary to mention the previous convictions in her skeleton submission to the court. In my view, it was not necessary, in dealing with the preliminary point, to rely on the previous convictions of the appellant. In any case, because the trial magistrate was made aware of these convictions, the appellant's representative asked the magistrate to disqualify himself from trying the case. The magistrate, in my view, correctly declined to do so and proceeded with the trial. The trial, in fact, proceeded in the absence of the appellant's representative because he decided to leave the courtroom after the magistrate declined to disqualify himself from trying the case. The magistrate was, of course, a professional magistrate who would have been capable of disregarding any prejudicial matter mentioned in the course of the trial. In Attorney General v. Siu Yuk Shing [1989] 2 HKLR 97 the prosecution adduced evidence of the previous conviction of the defendant to prove knowledge of certain matters. Lord Griffiths in giving the judgment of the Privy Council said at page 102 :

" It is not without significance that this was a trial by judge alone. If the judge had been sitting with a jury he would have had to weigh carefully the probative value of such a previous conviction against the prejudice to the accused that would be likely to arise in the minds of the jury. The risk of such prejudice overbearing the probative value of evidence is of infinitely less significance when a case is tried by a judge alone. The judge must of course guard against any such result but his whole background and training have fitted him to do so. In a trial by a judge alone the exercise of excluding the evidence on grounds of prejudice becomes somewhat unreal when it is remembered that the judge must be informed of the nature of the evidence in order to rule upon whether or not it is admissible. If the judge having ruled it inadmissible is to be trusted to put the evidence out of his mind he can surely be trusted to give it only its probative, rather than its prejudicial, weight if he rules that it is admissible. ..."

19. This third ground of appeal therefore fails and the appeal against conviction is dismissed.