WONG KIN HANG v. HONG KONG HOUSING AUTHORITY AND ANOTHER

HCAL 148/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 148 OF 2008

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J U D G M E N T

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1.  The Appellant is applying for judicial review to quash the following decisions:

(1)  Housing Authority’s (“HA”) decision dated 31 May 2007 to serve a notice to quit (“NTQ”);

(2)  Housing Appeal Tribunal’s decision dated 30 January 2008 confirming the NTQ of HA.

2.  The Tribunal adopts a neutral stance and does not take active part in the proceedings, but is willing to abide by the decision of the Court.

Background

3.  The Applicant is a tenant of a public housing unit let by HA.  He “inherited” the letting from his late father, and lives with his elder brother at the material times.

4.  The Tenancy Agreement is a monthly letting until determined, and contains the following terms:

“II.    The Tenant agrees with the landlord as follows:

…

(11)  Not to use or cause or permit the said premises to be used for any illegal or immoral purpose.

…

IV.  It is hereby expressly agreed as follows:

…

(7)  For the purposes of the Agreement any act, neglect or default of any member of the Tenant’s family or of any servant of his shall be deemed to be the act, neglect or default of the tenant.

…”

5.  On 27 December 2006 at about 2 a.m., the flat was searched by the police.  Upon entry, the elder brother was sitting at the computer on the desk at one end of the flat, and the Applicant was sleeping on the lower bunk bed at the opposite end of the flat.  Bookmaking and betting records in the amount of $200,000 and traces of dangerous drugs were found.

6.  Under cautioned, the elder brother admitted receiving bets from punters on his mobile phone, and placing bets with bookmakers on the computer.  He said the Applicant was not involved.

7.  The elder brother pleaded guilty to offences of Engaging in Bookmaking and Betting with a Bookmaker, and was sentenced to 4 months imprisonment in total.

8.  The Applicant was arrested and charged with like offences, but all charges were later dropped.

9.  On 31 May 2007, HA issued a NTQ under s. 19(1)(b) of the Housing Ordinance (Cap. 283) on the ground of breach of Clause IV(7) of the Tenancy Agreement. 

10.  Notwithstanding the strict wording of Clause IV(7), it is the practice of HA, in the exercise of its discretion, not to serve the NTQ under Clause IV(7) if the tenant himself were innocent. 

11.  HA held the view that the Applicant had knowledge of the illegal activities of his elder brother, hence, the NTQ under Clause IV(7).

12.  The Applicant appealed to the Tribunal. 

13.  In the written memorandum dated 3 January 2008 to the Tribunal, HA referred to both Clause II(11) and Clause IV(7) of the Tenancy Agreement and submitted that:

(1)  Both the Applicant and the elder brother were arrested inside the flat;

(2)  Betting slips in the amount of $200,000 were seized;

(3)  The elder brother said he used the desktop computer to receive and place bets;

(4)  The elder brother was convicted of engaging in bookmaking and betting with a bookmaker;

(5)  The flat was 34.71 sq m with no fixed partition;

(6)  The computer was in the living room,;

(7)  The Applicant could most probably see the computer and the activities;

(8)  The Applicant should have foreseen the elder brother’s use of the computer for bookmaking;

(9)  The Applicant permitted his elder brother to use the flat for an illegal purpose in breach of Clause II(11);

(10)  The Applicant should be held responsible for breaches of the Tenancy Agreement by his family members under Clause IV(7).

14.  Before the Tribunal, the Applicant stated that:

(1)  He worked from 9 am to 7 pm and dined outside and spent little time at home;

(2)  His relationship with his brother worsened 4 years ago after the death of the father;

(3)  The computer was purchased by the elder brother 2 or 3 years ago and used by him exclusively;

(4)  He never knew nor suspected his brother of receiving bets;

(5)  If he had known that his brother was involved in book making, he would have prevented him from doing so.

15.  The Tribunal held that although it was unable to come to the conclusion that the Applicant had actual knowledge of the elder brother’s illegal conduct, the NTQ should be upheld on the ground of breach of Clause IV(7) because HA had properly considered the background of the case in the discretion to issue the NTQ.

16.  Part of the background presented to the Tribunal was that a few months ago, the Applicant was in default of rent and a NTQ was served.  He explained that his father committed suicide and he was in financial difficulties.  The NTQ was withdrawn but HA issued a warning letter to the Applicant that should he be in breach of the Tenancy Agreement again, NTQ will be issued without further warning or retraction.

Statutory framework

17.  S. 19 of the Housing Ordinance provides that:

“Termination of lease

(1)  Notwithstanding the terms thereof, the Authority may terminate any lease-

(a)  without notice, if ,in the opinion of the Authority, the land held under the lease has become unfit for human habitation, a nuisance, dangerous to health or unsafe; or

(aa)  without notice, if, in the opinion of the Authority, no person authorized under the lease to occupy the land or (part thereof occupies the land or part thereof; or

(b)  otherwise, by giving such notice to quit as may be provided for in the lease or 1 month’s notice to quit, whichever is the greater.

(2)  Upon the termination of a lease under subsection (1), the tenant shall, if he is still occupying the land, be a trespasser thereon.

(3)  No court shall have jurisdiction to hear any application for relief by or on behalf of a person whose lease has been terminated under subsection (1) in connection with such termination.”

And s. 20 of the Housing Ordinance provides that:

“Appeal against termination

(1)  Where a lease has been terminated under section 19(1)(a) or (aa), or where a notice to quit has been given under section 19(1)(b), the tenant may appeal to the panel, appointed under section 7A(1), not later than 15 days after the date on which-

(a)  service of the notice of termination has been effected under section 19A(2); or

(b)  notice to quit has been given under section 19(1)(b),

as the case may be:

Provided that where the chairman of the panel is satisfied that the tenant is unable to appeal by reason of ill-health, absence or other cause thought sufficient by the chairman, he may permit an appeal to be made on behalf of the tenant by a person authorized under the lease to occupy the land or part of it.

(2)  An appeal under subsection (1) shall be in writing and shall state the grounds of the appeal.

(2A) (a)    Paragraph (b) shall apply in relation to any policy of the Authority which is stated and specified as being such in a certificate in writing issued for the purposes of this subsection by the Authority’s secretary and as regards which the certificate also certifies that the policy was both considered and applied by the Authority when deciding to terminate the lease or, where appropriate, to issue the notice to quit to which the appeal relates.

(b)   In considering an appeal under subsection (1)-

(i)   if the tribunal concerned is satisfied that at the time of making the decision to which a certificate mentioned in paragraph (a) relates, the appellant was aware of the policy or could reasonably be expected to have been so aware, the tribunal shall have regard to such policy; and

(ii)  if such tribunal is not so satisfied, it may, where it considers it appropriate so to do, have regard to such policy.

(3)  A tribunal of the panel appointed under section 7A(6), in determining an appeal against a termination-

(a)  under section 19(1)(a) or (aa), may confirm, suspend or cancel the termination;

(b)  under section 19(1)(b), may confirm, amend, suspend or cancel the notice to quit.

(4)  The decision of the tribunal shall be final.”

Applicant’s grounds

18.  Mr Pun, for the Applicant, relied on the following grounds of review:

(1)  Notwithstanding that the offences occurred in the flat, the flat was merely the scene of the crime but was not used for an illegal purpose;

(2)  HA failed to provide the certificate setting out the relevant policy on termination to the Tribunal, and the Tribunal failed to take into account the relevant consideration under s. 20(2A) of the Housing Ordinance;

(3)  Irrationality in the eviction of innocent third party;

(4)  Failure to give adequate reasons.

HA’s grounds

19.  Mr Kwok, for HA, submitted as follows:

(1)  The flat was used for the illegal activities of, inter alia, receiving bets via telephone, and writing out and keeping of the betting slips;

(2)  There is no policy other than reliance on Clause II(11) and/or Clause IV(7) on the part of HA;

(3)  The eviction was rational upon taking into account the background of prior default and the warning of the Applicant;

(4)  The reference to the background and discretion in upholding the NTQ are adequate reasons.

Discussion

20.  Mr Kwok submitted that there was no policy on termination apart from reliance on Clause II(11) and/or Clause IV(7) of the Tenancy Agreement, and Mr Pun was content not to pursue the point.

21.  Mr Pun submitted that given HA’s practice of knowledge on the part of the tenant in the exercise of the discretion in issuing NTQ for breaches by family members under Clause IV(7), the decisions should be quashed upon negative finding of knowledge by the Tribunal.

22.  In Chan Ming Yan v Hong Kong Housing Authority & Anor HCAL 100/2000 (13 July 2000), HA served NTQ under the equivalent of Clause II(11) upon possession of dangerous drugs of the son of the tenant.  The Tribunal found knowledge but the decision was quashed on procedural irregularity relating to the knowledge of the policy of responsibility of acts of family members.  Yeung J (as he then was) said at p. 10 that:

“A decision to deprive a tenant of his home is an extremely serious matter, particularly when the tenant himself has done no wrong and is held liable only because a family member uses the premises for an illegal purpose without being aware of it.  A court will need a lot of persuasion to be convinced that such a decision is not unreasonable.”

23.  Mr Pun submitted that service of NTQ under the current policy in the absence of knowledge was irrational.

24.  Mr Kwok submitted that there were concurrent decisions of HA and the Tribunal.  HA issued the NTQ because they formed the view that the Applicant had knowledge.  The NTQ could be supported at the instance of HA notwithstanding the Tribunal did not find knowledge.

25.  HA made no written decision other than the written memorandum submitted to the tribunal.  The facts relied on to support knowledge of the Applicant were:

(1)  The flat was open plan without partition;

(2)  Seizure of numerous betting paraphernalia on the computer desk;

(3)  Cautioned statement by the elder brother that he had conducted illegal bookmaking for about half a year.

26.  Mr Pun submitted that the Applicant gave evidence before the Tribunal that he had no knowledge.  HA chose not to cross-examine him upon invitation by the Tribunal, and must be bound by his evidence.  Further, the elder brother’s cautioned statement did not state where he conducted illegal book making in the past.  In any case, the elder brother was refused leave to give evidence before the Tribunal as he was not the tenant, and was denied of an opportunity to explain his cautioned statement.

27.  I cannot go beyond the findings of the Tribunal and determine HA’s case afresh now on paper.  The Tribunal affirmed the NTQ in the absence of knowledge, and that is the decision under scrutiny.

28.  Mr Kwok submitted that the Tribunal’s decision could be supported on the basis of the previous NTQ and warning letter.  Although HA would not normally issue NTQ under Clause IV(7) in the absence of knowledge, this case was exceptional because the Applicant had defaulted on rent before, and had been warned of the issuance of NTQ without further warning upon future breach of the Tenancy Agreement.

29.  Mr Pun submitted that reliance on the previous NTQ and warning letter was not HA’s case before the Tribunal.  In any case, the Applicant defaulted on rent because his father suddenly passed away, and he had to shoulder the family responsibilities at the young age of 23.  Rent was paid up and the NTQ was withdrawn.  The Tribunal did not state in its reason how it had considered the special circumstances of the Applicant’s previous default.

30.  In Oriental Daily Publisher v The Commissioner for Television and Entertainment Licensing Authority [1998] 4 HKC 505, Li CJ held that where there is a duty to give reasons, it must be discharged by giving adequate reasons.  The Chief Justice spoke of the duty to give reasons by the Obscene Articles Tribunal at p. 516B-D:

“First, the reasons given should show that the tribunal has addressed the substantial issues before it and show why the tribunal has come to its decision.  There may not be any need however to address every single issue.  But the reasons should show that then issues that arise for serious consideration have been considered.”

31.  I agree with Mr Pun that the Tribunal’s reasons did not show how it had considered the previous default on rent by the Applicant, nor was the Applicant sufficiently apprised of the alternative case to meet it.

32.  Hence, I find the Tribunal has failed reasonably to consider or state in adequate terms how it has considered the previous default on rent as sufficient grounds to exercise Clause IV(7) in the absence of knowledge on the part of the Applicant.  The decision of the Tribunal is quashed.

33.  I have indicated to the parties in the event that the decision(s) are to be quashed on other grounds, the point on illegal use will not be considered.  Hence, I shall not pursue it now.

34.  Mr Kwok asked the matter be remitted to the Tribunal for re-consideration.  He referred to the cautioned statement of the Applicant to the police which was not disclosed before the Tribunal by the Applicant, but now disclosed in these proceedings under the principle of fairness. 

35.  The Applicant stated under caution that his elder brother had received football bets at home for about half a year via his personal phone and the home computer, but he did not know the details.

36.  Mr Pun submitted that the Applicant had no duty of disclosure before the Tribunal, and the Tribunal’s finding of facts based on the materials before it could not be faulted.  The Applicant had filed an affidavit explaining that he only gained knowledge of his elder brother’s activities after the arrest, and the cautioned statement did not state when the Applicant knew about the bookmaking.

37.  The cautioned statement contains prima facie evidence of knowledge on the part of the Applicant.  Notwithstanding the explanation of the Applicant, a properly instructed Tribunal could find knowledge on his part.  In any case, such questions of facts are province of the Tribunal rather than the Court exercising the jurisdiction of judicial review.

38.  Hence, I ordered that the matter be remitted to the Tribunal as differently constituted for re-consideration.

Costs

39.  I make an order nisi that HA do pay the costs of the Applicant,  with Legal Aid taxation for the Applicant.

40.  Lastly, I thank counsel for their learned submissions.