BASE TOP DEVELOPMENT LTD. v. THE COMMISSIONER OF POLICE

HCAL 2324/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 2324 OF 2000

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D E C I S I O N

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1. Jordan Sauna is a massage establishment under the Massage Establishments Ordinance Cap. 266 (the Ordinance) and carries on business at 5/F, Jordan Square, 28-28A Jordan Road, Kowloon.

2. The applicant, Base Top Development Limited, owns Jordan Sauna.

3. Under the Ordinance, it is an offence for any person to operate a massage establishment without a licence and a licence can only be granted to a natural person. A licence so granted is valid for a period of 12 months and is renewable on application by the licensee.

4. Since 27 September 1996, Mr Tse Hang-pak (the licensee) had been granted a licence to operate the Jordan Sauna subject to the conditions endorsed on the document attached to the licence.

5. The licensee had successfully obtained the annual renewal of the licence and the latest licence was granted on 27 September 1999 authorising him to operate Jordan Sauna for a period of 12 months; i.e. until 26 September 2000.

6. On 24 July 2000, the licensee again submitted an application for the renewal of the massage establishment licence.

7. Unfortunately, shortly after his application for the renewal of a massage establishment licence, the licensee died on 22 August 2000.

8. On 29 August 2000, Messrs James P Y Lam & Co., solicitors acting for Jordan Sauna wrote to the Commissioner of Police (the Commissioner) applying for a transfer of the licence. The letter was accompanied by a number of documents, including an application for the issue or renewal of a massage establishment licence signed by Mr Ma Hoi Ching (the intended transferee) and an application for the transfer of the licence.

9. In the application for the transfer of the licence, the intended transferee had filled in his particulars and for obvious reasons, the particulars of the transferor were left blank.

10. In response to the application, the Commissioner stated in a letter dated 27 September 2000, the followings: -

"I refer to your letter dated 2000-08-29 applying for the current Massage Establishment licence granted to late Mr Tse Hang-pak to be transferred to Mr Ma Hoi-ching.

I regret to inform you that the application cannot be acceded to. It is because upon the death of the licensee, the licence ceases to be valid. Furthermore, the law does not provide for any person other than the licensee to apply for a transfer of the licence.

You may therefore wish to advise your client to submit a new application for a massage establishment licence should he wish to provide massage services at the 'Jordan Sauna'. However please also remind your client that no massage services can be provided at the premises until a new massage establishment licence is granted ............."

11. The applicant now seeks leave to judicial review the decision of the Commissioner on the basis that the Commissioner does have the right to consider the application for a transfer of the licence despite the death of the licensee.

12. Mr Mok, on behalf of the applicant, whilst concedes that a licence is a personal privilege and will normally extinguish upon the death of the licensee, seeks to argue that a massage establishment licence is a special category of its own.

13. The suggestion is that under the Ordinance, a licensee must be a natural person and when the owner of a massage establishment is an entity other than an individual, a person must apply for and obtain a licence in his name before the massage establishment can be lawfully operated.

14. If a massage establishment licence cannot be transferred upon the death of the licensee, it means the massage establishment must be closed and the result will be most unjust and will cause significant hardship.

15. Mr Mok invites the court to do what is necessary to meet the justice of the case by ordering the Commissioner to consider the transfer of the existing licence to the intended transferee who is a person of good character with a "Good Citizen Award".

16. Mr Mok suggests that section 9(2) of the Ordinance does not impose any requirement that an application for transfer can only be made by the licensee himself and is intended to cater for the situation such as the one faced by the applicant to ensure that the operation of the massage establishment can continue.

17. Alternatively, the general provision under section 46 of the Interpretation and General Clauses Ordinance also empowers the Commissioner to entertain the applicant's application.

18. Not only is there a conspicuous absence of the words "transfer of licence" in section 46 of the Interpretation and General Clauses Ordinance, the general and residual power derived therefrom cannot be allowed to contradict the clear wordings of section 9 of the Ordinance.

19. Section 9 of the Ordinance provides: -

"(1) Except as provided in this section, a licence shall not be transferable.

(2) The licensing authority may, on sufficient cause being shown to his satisfaction and subject to any conditions as he may think fit to impose, permit the transfer of an existing licence until its expiration to another person and such transfer shall be endorsed on the licence."

20. The Ordinance was enacted for the express purpose of control and licensing of massage establishments and section 9(1) of the Ordinance clearly stipulates that a licence shall only be transferable thereunder. There is, in my view, no valid basis to suggest that section 46 of the Interpretation and General Clauses Ordinance will somehow assist the applicant's case.

21. A transfer of the licence under the Ordinance is valid until its expiration. The licence in question, even on the assumption that it survived the death of the licensee, would have already expired on 26 September 2000. As of today, there is nothing left of the licence to be transferred.

Mr Mok, however suggests that the licence is deemed to continue by the operation of section 7(5) of the Ordinance which provides: -

"Any licence in respect of which an application for renewal is made under and in accordance with this section and which expires prior to the determination of such application shall, unless such application is withdrawn, or the licence is revoked or suspended under section 8, be deemed to continue in force until the determination by the licensing authority of such application."

22. As the licensee had lodged an application for the renewal of the licence on 24 July 2000, the licence is deemed to continue in force until the determination of the application. Despite the death of the licensee, the Commissioner should still consider the application for the transfer of the licence notwithstanding that the licence had expired by effluxion of time.

23. I am not persuaded at all that section 7(5) of the Ordinance is intended to cater for the situation of the death of the licensee. The plain wordings of the section only allow a continuation of the licence upon its expiration after an application for renewal has been made and before the determination by the licensing authority of such application.

24. With respect, Mr Mok's suggestion is oblivious to a very important principle underlying the control and licensing of massage establishments in Hong Kong, namely that a massage establishment is not allowed to be operated without in force a valid licence granted to a natural person who has the personal duties to ensure that the establishment is operated in accordance with the conditions of the licence.

25. As can be seen from section 6 of the Ordinance, a massage establishment is meant to be under a stringent and tight control through an elaborated, comprehensive and sophisticated scheme, the reason for which is perhaps not difficult to comprehend.

26. Section 6 of the Ordinance provides: -

"(1) An application by a person for a licence shall be made to the licensing authority in the prescribed form and in the prescribed manner.

(2) Subject to subsections (3) and (4), the licensing authority may, in his absolute discretion, grant a licence and may impose such conditions as he thinks fit.

(3) The licensing authority shall not grant a licence unless he is satisfied that -

(a) the applicant is a fit and proper person to operate a massage establishment;

(b) the applicant will adequately and personally supervise the massage establishment;

(c) the premises and the situation thereof are suitable for the operation of a massage establishment;

(d) the massage establishment will not be operated in a manner contrary to the public interest.

(4) The licensing authority shall not grant a licence to a person other than a natural person.

(5) A licence granted under this section shall be in the prescribed form.

(6) A licence granted under this section shall not be issued and shall not be valid except on payment to the licensing authority of the prescribed fee.

(7) A licence shall authorize the licensee to operated a massage establishment at the premises specified therein for a period of 12 months from the date on which it is granted and in accordance with any conditions imposed under subsection (2)."

27. Under section 8 of the Ordinance, the licensing authority my revoke, suspend or refuse to renew any licence if the licensee has been in breach of any conditions of the licence or has ceased to satisfy any condition relating to the operation of the massage establishment or if it has been operated in any manner contrary to the public policy.

28. Under section 13 of the Ordinance, if a massage establishment is not operated in accordance with the conditions of the licence, not only is the person who operates or otherwise manages the establishment guilty of an offence, the licensee too, commits an offence.

29. The aforesaid provisions in the Ordinance clearly indicates the intention of the legislation which imposes upon the licensee an obligation to personally supervise the massage establishment and that should any licence condition be contravened, the licensee will be liable for such contravention.

30. Such provisions are simply inconsistent with any suggestion that a massage establishment licence can survive the death of the licensee. If the licence can survive and is transferable after the death of the licensee, there is bound to be a period of time in which the massage establishment will be in operation without a licensee who must personally supervise its operation and is liable for any contravention of the licence conditions.

31. Black J in Russell v. Ministry of Commerce For Northern Ireland [1945] NI 184 states at p. 193,

"As I have already indicated, when one finds the word 'licence' used in a statue the presumption is that it is intended to designate a purely personal privilege, a privilege not capable of being assigned or transferred by the licensee to anyone else and which comes to an end on the death of the licensee. If the licence is to be more than this, if it is to be transferable by the licensee in his lifetime or if it is to form part of his estate after his death, one has to find this indicated in the Statute. Notwithstanding the inequalities and hardships which, as the plaintiff has pointed out, are involved in treating local carriers' licences as purely personal, I have not been able to find in the Statute any clear indication that the licences are to be anything more than this."

32. I respectfully agree with such view. Indeed, the Ordinance not only does not support any contention that the licence survives the death of the licensee and is transferable after his death, it clearly demonstrates the intention of the legislation that upon the death of the licensee, the licence ceases to be valid and is therefore no longer transferable.

33. Despite the hardship that the applicant may suffer which hardship is perhaps not uncommon in situations where the licensing authority refuses to grant, renew of transfer a licence, the only remedy available to the applicant is the application for a new licence in the name of another individual who meets the requirements laid down in the Ordinance.

34. I have considered carefully counsel's submission. I am not persuaded that the applicant has raised an arguable case. The matter involves a pure question of law, which is not in favour of the applicant.

35. In the circumstance, the application for leave to judicial review the decision of the Commissioner must be refused and I so order.

36. I also make an order nisi that the applicant is to pay the Commissioner's costs of the application to be taxed if not agreed. The order nisi on costs will be made absolute 14 days after the handing down of this decision.