SEA DRAGON BILLIARD AND SNOOKER ASSOCIATION v. URBAN COUNCIL

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JUDGMENT

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Sir Derek Cons, V.P., delivered the judgment of the Court:

1. This is an appeal against the refusal of Kaplan, J. judicially to review the refusal of the Urban Council to issue a billiard establishment licence to the Sea Dragon Billiard and Snooker Association in respect of the association's premises on the lst and 2nd floors of the Amoy Industrial Centre in Ngau Tau Kok Road, Kowloon. The association set up its establishment there in December 1986. It is a substantial concern, with about 70 permanent staff and 68 tables catering to a membership of over 70,000.

2. No problems arose until 1988 when the legislature thought fit to amend the Public Health and Municipal Services Ordinance, Cap. 132, which by s. 92A prohibits certain specified activities without a licence, by replacing "public billiard saloon" in the schedule of such activities with "billiard establishment". The definition of the latter then inserted in s. 2 of the Ordinance was apt to catch the activities of the association in Ngau Tau Kok Road. The licensing authority is the Urban Council.

3. The amendment was to come into effect on 15th December 1989. Accordingly on 24th May that year the association submitted its application for a licence. An officer of the Urban Services Department made enquiries from various other departments. On 5th December the Director of Fire Services advised that he did not support the application. Pressed, somewhat later, to elaborate, the Director pointed out that from their very nature industrial operations presented risks far above the average, both as to the likelihood and as to the magnitude of fires; these risks could be tolerated with regard to industry, for both management and labour would appreciate the situations the general public however would not and should not be exposed to the added dangers; even if the non-industrial user were confined to lower floors the Director was most concerned as to the possibility of panic in the event of fire and by the fact that in large fires, particularly those involving factories, lower levels are often affected by the smoke.

4. On 10th March the Council, acting by a single member to whom the decision had been quite properly delegated, refused the application, at the same time advising the association of the objections raised by the Director of Fire Services. Two months later, the association having swiftly exercised its right to apply for a review, the application came before the Public Health Review Sub-committee of the Council. Deliberating in private after a public session at which the association was represented by its solicitor and the Director of Fire Services by a member of his Department, the Sub-committee with one member abstaining, agreed to recommend to the Public Health Select Committee that the application should be rejected. The recommendation was accepted by that body on 6th June. On 22nd January Kaplan, J. refused the application for judicial review. He found that although the legitimate expectation aroused in the association in the particular circumstances, - that the association would be informed of and given an opportunity to meet the objections of the Director, of Fire Services, - had not been met, the defect in natural justice had been cured by the full opportunity and proper consideration given by the review proceedings. He added that in any event, being satisfied that the objections of the Director were overwhelming in the public interest, he would not have exercised his discretion to grant relief.

5. With that brief outline of the essentials we turn to the two grounds of appeal put forward by Mr. Litton, Q.C. who now appears on behalf of the association.

6. The first is of technical nature and is, in essence, that the initial decision of the council through its single member being held by the judge to be contrary to natural justice and therefore void in law, any purported confirmation thereof is equally void in law and should be set aside by the court. When taxed with obvious difficulties in the practical application of this contention, Mr. Litton declined to abandon the point completely, being content instead to rely solely upon what he termed his best authority, namely a passage in the judgment of Lord Edmund-Davis in Bushell and Another v. Secretary of State for the Environment [1981] AC 75 at 117:

7. In our view the position is covered by the advice of the Privy Council in Fred Dawson Calvin v. John Henry Brownlow Carr and Others [1980] AC 574, an authority binding oh this court. There a plaintiff, seriously affected by the decision of acing stewards which he alleged to nave been reached in breach of the rules of natural justice, appealed under the racing rules to the committee of the Australian Jockey Club. We quote from p. 589 of the report:

Their lordships went on to hold, as did the judge in the present case, that the subsequent proceedings on appeal cured any defect there might have been in the original enquiry. We find no validity in the distinction suggested by Mr. Litton, that the proceedings in Calvin v. Carr derived from a contractual source, whereas those in the present instance derive from statute.

8. The second ground of appeal turned upon what is ultimately a question of fact, i.e. was the recommendation of the Review Sub-committee to reject the application a genuine exercise of the "sole discretion" accorded to the Council by s. 125(1)(b) of the Ordinance "for the purpose of carrying out the objects of (the) Ordinance". To understand the argument it is necessary to refer to a paragraph in the Places of Amusement (Urban Council) Bylaws:

9. It is contended that the members of the Review sub-committee and of the Public Health Select Committee, misunderstood and misapplied that paragraph on the assumption that the stance taken by the Director of Fire Services, related to the Review sub-committee in no uncertain terms by his representative, precluded the Council from granting the application in any event, no matter what might otherwise have been the Council's own view. In that case the refusal would, of course, not have been a genuine exercise of the Council's discretion and the court would inevitably intervene.

10. To this end we have been taken and re-taken to the minutes of the Review Sub-committee and of the Public Health Select Committee at which the former minutes were ratified. Particular passages have been subjected to repeated and stringent analysis. As minutes they are naturally not drafted with the linguistic precision one would hope for in, for example, a statute. It is not surprising that with the benefit of skilled examination some passages may now appear to be equivocal. however it is clear that there were several references to the paragraph in question before the Review Sub-committee, and to its "requirements", both by the Council's own legal officer and a senior staff officer of the Urban Services Department. It is clear too that the members were very much concerned at the inordinate length of time taken to bring the application before the Council; and that officers of the two government departments concerned were anxious to justify the delay. One member most probably did misunderstand the situation, but for the rest it is a matter of speculation. The question in the end is simply this: "Did the Council refuse the application because the members as a whole felt that the objections of the Director of Fire Services left them no option in law or was it because they felt he left them with no option in fact, i.e. in the words of the judge, the objections were overwhelming in the public interest?". To succeed in this appeal the association must make good the first alternative. Upon anxious consideration of the minutes we are not persuaded that they have.

11. That conclusion is sufficient to dispose of the appeal, but it may be useful to all concerned with licensing within the Ordinance to set out our present views on the contention that:

12. That case concerned an application by a brewery for a licence to cover a discotheque it had in mind to operate in premises which had previously been licensed for music and dancing, but for which a licence was necessary following slight changes in the relevant legislation. After reviewing several authorities touching on natural justice the learned judge came to the conclusion that the principle set out above would normally apply to the exercise of the licensing function, but the substantive question was whether the particular legislation intended that it should not. In posing that question the learned judge, although he did not mention it expressly, was following the approach indicated by the High Court of Australia in Twist v. Randwick Municipal Council [1976] 12 ALR 379. It is convenient to repeat a passage from the judgment of Barwick, C.J. which was, quoted by the judge below:

13. The legislation for our consideration is to be found in s. 125 of the Ordinance and in particular in sub-s. 9 and 10:

14. Since the material date sub-s. (10) has been amended to provide instead for an appeal to a board established under s. 3(1) of the Municipal Services Appeals Board Ordinance 1990, Ordinance 58 of that year.

15. In our view these provisions clearly indicate that the legislature has addressed and decided the question of what opportunity should be offered an applicant for such a licence, and that the opportunity intended does not include a right to be notified of objections in the first instance. Nevertheless we are pleased to note from the affirmation of Mr. Chan Sak Nam, a Senior Staff Officer (Public Health) of the Urban Services Department, that the "usual practice is to inform an applicant for a licence of any objections received from other departments in order to allow an opportunity to rectify any matters objected to by the departments". We trust that our comments will intro way discourage the Department from continuing that sensible practice.

16. For the reasons we have given earlier the appeal is dismissed, with an order nisi that the respondent is to have its costs.