LAW KAM SANG v. COMMISSIONER FOR THE TELEVISION & ENTERTAINMENT LICENSING AUTHORITY AND ANOTHER

HCAL 110/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 110 OF 2008

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REASONS  FOR  DECISION

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1.  The Applicant is applying for leave to issue judicial review against the following decisions:

(1) Decision of the Commissioner for the Television and Entertainment Licensing Authority (TELA) on 5 February 2008 in refusing to renew Applicant’s licence under the Amusement Games Centre Ordinance (Cap. 435) (AGCO);

(2) Decision of the Amusement Game Centre Appeal Board on 2 June 2008 in dismissing the appeal against the decision of the Commissioner;

(3) Costs order absolute for $30,000 against the Applicant by the Board on 13 September 2008.

2.  The Applicant also applied for leave out of time.  The reason was that the reasons for decision of the Board was only handed down on 29 August 2008 and sent to the Applicant on 1 September 2008.

3.  The Applicant asked for an oral hearing of the application.

4.  I heard the application notwithstanding it was technically out of time.  I refused leave at the hearing, and here are my reasons.

Background

5.  The Applicant was holder of AGC licence in respect of the premises at Tung Choi Street.  The licence was valid until 9 May 2007.  On 19 March 2007, the Applicant applied to the Commissioner for renewal.  He authorized an agent Ms Tse to handle the application.

6.  On 1 April 2007, the Applicant surrendered the tenancy of the AGC premises to the landlord.

7.  On 10 April 2007, TELA inspectors found the AGC was not open, and apparently closed for business.  TELA officer Mr. Lee telephoned Ms Tse, and was told that the AGC was under renovation.

8.  On 7 May 2007, TELA sent a letter to the Applicant by recorded delivery at the AGC address stating that the licence would remain valid notwithstanding the expiry on 9 May 2007 until the determination of application for renewal.

9.  On 11 May 2007, a second inspection found that the AGC was still closed.

10.  On 21 May 2007, TELA sent a letter to the AGC address requiring the Applicant to explain the closure in writing.  Mr. Lee also telephoned Ms Tse to urge the Applicant to submit a written reply.  Ms Tse said the premises were closed for renovation.  There was no written reply.

11.  On 28 June 2007, another inspection found the AGC had ceased business.

12.  On 16 July 2007, TELA sent another letter to the AGC address stating that TELA officers had repeatedly asked Ms Tse for written reply and so far there was none, and the Applicant was asked to explain in writing with 14 days.  There was also no response.

13.  On 10 August 2007, the Commissioner sent a letter to the AGC address indicating she was considering refusing the application for renewal under s.9(1)(c) of AGCO, and the Applicant was given 14 days to file objections, if any, failing which the Applicant was taken to have no intention to do so.

14.  The Commissioner’s case was that on 21 September 2006, TELA officer Mr. Yeung spoke to the Applicant about the letter dated 10 August 2007, and at the Appellant’s request, faxed the letters dated 16 July and 10 August 2007 to the Applicant.  The Applicant denied such conversation and faxes, and averred that the matter was handled by Ms Tse.

15.  On 6 February 2008, the Commissioner issued a letter to the Applicant by recorded delivery to the AGC address and also copied to the Applicant’s home address enclosing the Order refusing the application for renewal.

16.  The letter dated 6 February 2008 referred to the letter dated 10 August 2007 indicating the intention to refuse the renewal and requesting written representations within 14 days, and hitherto no representation was received from the Applicant.  In the circumstances, the Commissioner decided to refuse the renewal under s. 9(1)(c) and 9(2)(e)(i) of AGCO.

17.  On 19 February 2008, the Applicant entered into a provisional sale and purchase agreement in respect of the AGC premises with a purchaser from the landlord.

18.  On 20 February 2008, the Applicant filed the appeal to the Board.

19.  All the letters were sent to the AGC address by recorded delivery and none had been returned in the post.

Statutory framework

20.  S.9 of AGCO provides that:

“(1)   The Commissioner may by notice in writing served upon the licensee either personally or by registered post-

(a)  …

(c)   refuse to renew a licence; or

(d)   …

on any ground mentioned in subsection (2).

(2) The grounds referred to in subsection (1) are that-

(a)   …

(e)   the Commissioner is satisfied that-

(i)    the licensed amusement game centre has ceased to be operated as such or to exit;

(ii)   …

(f)    …”

21.  S.10 of AGCO provides that:

“(1)   The Commissioner shall, before serving notice under section 9(1), give to the licensee notice of his intention to do so, adequately stating, by reference to section 9(2), the grounds on which he intends to serve the notice and indicating that the licensee may make written representations to him.

(2) If the Commissioner decides to serve notice under section 9(1), he shall make a written order, properly dated and signed, to that effect and shall send a copy thereof by registered post to the licensee, at the address last known to the Commissioner.”

22.  And s.13(4) of AGCO provides that:

“…

(4) Prior to or at the hearing of an appeal the Appeal Board may-

(a) consider and determine whether a party should have access to documents which the party claims are relevant to the appeal and which are in the possession or control of another person and order that other person to give the party access to such documents;

(b) receive evidence on oath and administer any oath necessary for that purpose;

(c) admit or take into account any statement, document, information or matter whether or not it would be admissible in a court of law;

(d) by notice in writing summon any person to appear before it to produce any document or other thing specified in the notice or to give evidence;

(e) give directions to the Commissioner with respect to the exercise by the Commissioner of such of the functions of the Commissioner under this Ordinance as are relevant to the appeal and the Commissioner shall comply with any such direction;

(f)  confirm, vary or reverse the decision that is appealed against or substitute therefor such other decision or make such other order as it may think fit; and

(g) make an award to the Commissioner or to the appellant of such sum, if any, in respect of the costs involved in the appeal as is just and equitable in all the circumstances of the case.

(5) The Appeal Board shall have the powers which are vested in the Court of First Instance in the exercise of its powers under subsection (4).”

Grounds of appeal to the Board

23.  The original ground of appeal dated 20 February 2008 stated that the AGC premises were in disrepair and in need of renovation.

24.  Additional grounds of appeal filed on 2 May 2008 as follows:

(1) The Commissioner erred in law in purporting to give the Appellants an opportunity to make representations but wrongfully sent the letters to the AGC address where she ought to have sent them to the Appellant’s home address notified in the application for renewal, given that on 10 April 2007 the Commissioner knew or believed that the AGC has ceased to operate as such, to exist or has been closed down and/or the letters have been returned to her by the Post Office;

(2) The Applicant was denied of an opportunity to make representations;

(3) (i)    The Applicant was denied the right to a fair hearing;

(ii)    The Commissioner is in breach of her own practice and procedure or the Applicant’s legitimate expectation that he would be heard before the refusal of the application.

Decision of the Board

25.  At the hearing of the Board, both parties indicated they would not call any witness to give oral evidence.  The Board offered the opportunity for cross-examination on the statutory declarations, but both parties declined the offer.  The Board decided the case on the documentary evidence and oral submissions by counsel.

26.  The Applicant’s case was that he was tricked by the landlord into temporary surrendering the AGC premises on the pretext of major building works.

27.  The Applicant’s declaration stated that he received a telephone call from TELA staff to collect the letter dated 7 May 2007 stating the licence would remain valid until determination of the application.  Hence, he believed the Commission knew that the AGC was closed for repairs.

28.  Ms Tse said she might have deleted messages from TELA which she thought was irrelevant and not informing the Applicant of them.

29.  The original ground of appeal that the building was 40 years old and the internal structure dilapidated, and the remedial works required a long time was not pursued.  The Board found that repairs work only commenced after the Application purchased the premises.

30.  The Board accepted the evidence of the Commissioner, and rejected the evidence of the Applicant, and dismissed the appeal.

31.  The Board’s decision can be summarized as follows:

(1) The claim of building works lacked details and was unsupported by evidence, and was contrary to the evidence of the inspections and also the Applicant’s own case that the building works were a mere pretext and tricks for the him to surrender the premises, and the Board found in fact there were no building works prior to the Applicant’s purchase;

(2) The Applicant’s allegation that a TELA officer asked him to collect the letter dated 7 May 2007 stating the licence would remain valid until the application was determined was contrary to his own assertion that he had not spoken with the Commissioner or her staff and had only provided Ms Tse but not his contact number on the application form;

(3) It is difficult to see how the letter dated 7 May 2007 could have led the Applicant to believe that the Commissioner knew the AGC was closed for building works;

(4) There is nothing wrong to send the letters to the AGC address and not the Applicant’s home address as the AGC address was the normal channel of communication;

(5) The Applicant was selective in only admitting to receiving those calls and letters from TELA in his favour;

(6) It is surprising that the Appellant had not seen fit to write to keep TELA informed of the situation, knowing that any closure of operation might render the licence invalid under the licensing conditions;

(7) It is even more surprising that the Appellant had not done so for over 10 months between the surrender of the premises on 1 April 2007 and the Commissioner made her decision on 6 February 2008 while he had taken the trouble to impress upon the landlord by a letter dated 5 August 2007 that the licence renewal had reached a critical stage and that progress reports were required to be submitted for the licence renewal;

(8) On the balance of probabilities, the requests for written explanation by letters and telephone calls to the Applicant and his agent cold not have failed to reach the Applicant;

(9) The Applicant was not denied of any real or reasonable opportunity to make representations;

(10)   The failure to make representations by the Applicant led to the refusal of the renewal on by the Commissioner;

(11)   The Applicant only became active with the renewal after he signed the provisional sale and purchase agreement;

(12)   The Commissioner’s decision was not wrong, and there is no good or reasonable basis to exercise the discretion in favour of the Applicant.

Grounds of application

32.  Mr Ng, for the Applicant, summarized the grounds in the Notice for Application for Leave as follows:

(1) There was breach of natural justice and legitimate expectation to be heard in that there was no effective/reasonable/real/ proper opportunity of being heard before the Commissioner as the notice of intention to refusal the renewal of licence was improperly served at the AGC address as opposed to the last known address of the Applicant’s residence;

(2) There was jurisdictional error and nullity by reason of no proper/valid notice under s.10(1) of AGCO before the order of refusal by the Commissioner;

(3) The decision of the Commissioner and/or the Board was irrational in that:

(a)    Ms Yeung had already made oral representations that AGC premises were closed for renovation and:

(i)    the failure to make representations in writing, if any, on the same grounds is irrelevant;

(ii)    the explanation of renovation is relevant and sufficient;

(b)   The Board should not have resolved the conflict of evidence between TELA officer Yeung and the Applicant on paper;

(c)   The Board failed to give sufficient reasons for preferring the evidence of TELA officer Yeung over the Applicant.

Submissions of the Commissioner

33.  The Commissioner was invited to make submissions in writing.  She was not called upon to attend the oral hearing for leave.

34.  Mr. Wesley Wong, for the Commissioner, submitted that:

(1) The appeal to the Board in the form of a full “merits” review is a complete answer to the proposition of denial, if any, of an opportunity to make representations, as any alleged or perceived breach of natural justice or procedural impropriety on the part of the Commissioner would have been cured by the appeal process where the Applicant did advance his case before the Board;

(2) The provision on service at the last known address applies to service of the order under s.10(2) as opposed to the mere giving of notice of intention to refuse renewal under s.10(1);

(3) The AGC licence is “place specific” and there is no procedural error in sending the s.10(1) notice upon an application for renewal at the AGC premises;

(4) Even assuming (without conceding) that non-compliance with s.10(1) amounted to a jurisdictional error rendering the proceedings before the Commissioner or the Board a nullity, the Applicant failed to take out judicial review against the Commissioner promptly but took advantage of the avenue of appeal and filed additional grounds that the s.10(1) notice should have been sent to the Applicant’s residential address and argued the appeal on the merits;

(5) The Board rejected the explanation of the Applicant and gave full and adequate reasons for its decision.

Relevant principles

35.  The new threshold test for the grant of leave for judicial review is reasonable arguability and real prospect of success as opposed to potential arguability in the past (Chan Po Fun Peter v Winnie Cheung [2007] 5 HKC 145 (CFA) per Li CJ at p.152).

36.  Where the orders sought would lead to no practical benefit, the judge is entitled to refuse leave, however strong the complaint might otherwise be (Chan Po Fun Peter op. cit. per Litton NPJ at p.159G-H).

Discussion

37.  Mr. Ng submitted that the Applicant’s residential address was provided in the application for renewal, and the order of refusal was also sent to the Applicant’s residential address.  Given the context of cessation of business at the AGC address, there is no reason why the invitation for representations should not be sent to the Applicant’s residential address.

38.  S.10(1) of AGCO provides that the Commissioner shall give notice of intention to serve a notice under s.9(1) (i.e. refusal to renew here) adequately stating the ground under s.9(2) (i.e. cessation of operation) and indicating the licensee may make written representations.  The provision of service by registered post at the last known address relates to the notice of order under s.9(1).  The effect of s.10(1) is to invite written representations before the order is made.  I do not consider it reasonably arguable that s.10(1) constitutes a condition precedent as opposed to a procedural requirement of the jurisdiction of the Commissioner and/or the Board.

39.  Be that as it may, the Applicant had lodged an appeal to the Board, and made full representations before the Board.  I fail to see how there can be a denial of the right to be heard on the part of the Applicant.

40.  Whether an appeal will cure any failure to observe natural justice in the domestic tribunal depends on the structure of the appeal (see R v Lift Contractors’ Disciplinary Board, ex p Otis Elevator Co (Hong Kong) Ltd (1995) 5 HKPLR 78 (CA) per Litton VP (as he then was) at p.88E-G).

41.  In Happy Pacific Limited carrying on the business of the Fair Sauna House v Commissioner of Police HCAL 115/1999 (11 November 1999), Stock J (as he then was) said at para.37:

“As the decision in [Calvin v Carr [1971] Ch 34] emphasised, there is no clear and absolute rule on the question whether procedural defects at an original stage can be cured through an appeal procedure. I think it safe to say that where the appeal procedure is provided by statute and is comprehensive in terms of the questions which can be addressed, the evidence that can be received, and the remedies that can be offered, where there can be no question about the impartiality of that procedure, where the appeal is not limited, say, to a point of law, where the appeal body is not bound to accept determinations of facts made at first instance, and where judicial review holds out the prospect of no greater remedy than can be effected by the appeal procedure - indeed where it holds out less, then this court is entitled to say, and should say, that such a defect as may have occurred in the original decision-making process can be cured on the appeal, and that that is the remedial path that must, in the absence of exceptional circumstances, be travelled.”

42.  The Board has the same powers as the Court of First Instance in the hearing of the appeal, and can admit or take into account any information or matter whether or not it would be admissible in a court of law, and can either confirm, vary or reverse the decision of the Commissioner.  I am of the view that the appeal before the Board was a full hearing on the merits.  Even if there were any lack of opportunity to make representations upon failure to receive the notice of intention to refuse renewal, the appellate process did cure any such defect.

43.  In any case, the Board ruled that the requests for written representations did reach the Applicant.  The reasoning of the Board was set out above.  I see nothing wrong with the inference on the available evidence.

44.  Mr. Ng complained that the Board should not have based the decision on documentary evidence.  The Board had already invited cross-examination of the witnesses, but that was declined by the Applicant.  Mr. Ng submitted that the Applicant did not see the need of oral evidence at that stage.

45.  I see no objection in principle and/or material irregularity in determination on evidence by declarations in the circumstances of this case, and the Applicant is bound by his election not to cross-examine the witnesses.

46.  Mr. Ng submitted that the Applicant’s agent explained that the cessation was due to repairs, and the Applicant alleged that he was tricked, but the Board still held that Applicant failed to give explanations to the Commissioner.

47.  Mr. Ng accepted that the AGC had ceased operation for about 10 months before the refusal to renew the licence, and there was no evidence of any repair during that time.

48.  The Board was fully aware of the representations by Ms Tse and the Applicant, but decided to reject them.  What the Board was really saying is that the Applicant being aware that the licence could be invalid under the law by reason of cessation of operation, and he failed to keep the Commissioner informed of the situation for over 10 months.  I see nothing wrong with the Board’s rejection of the Applicant’s belief that the Commissioner must have accepted cessation on the ground of repairs, while in fact none was done for over 10 months.

49.  All in all, it is up to the Applicant to demonstrate merits, and that the judicial review will not be not futile.  There is no further argument on merits that could be advanced except reiterating that the Applicant had been tricked by the landlord.  The Board took that with a pinch of salt, and I see nothing untoward in its decision and the costs order.

Conclusion

50.  In the premises, leave was refused.