MCGETTIGAN, BRIAN KEVIN v. MUNICIPAL SERVICES APPEAL BOARD (“MSAB”) AND ANOTHER

HCAL 168/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 168 OF 2013

___________________

BETWEEN
	MCGETTIGAN, BRIAN KEVIN	1st Applicant
	GIANT LUCK INTERNATIONAL LTD	2nd Applicant
and
	MUNICIPAL SERVICES APPEAL BOARD (“MSAB”)	Respondent
	LIQUOR LICENSING BOARD (“LLB”)	Interested Party
___________________

Before: Hon Zervos J in Court

Date of Written Submissions: 27 January and 7 February 2014

Date of Decision: 18 February 2014

________________________

D E C I S I O N

________________________

Introduction

1.  This is my decision on the question of costs upon the discontinuance of the application for judicial review by the applicants after leave had been granted to them.

Background

2.  On 5 December 2013, I granted the 1^st and 2^nd applicants leave to apply for judicial review of the decision of the Municipal Services Appeals Board (MSAB) dated 7 November 2013, refusing to renew the liquor licence in relation to the premises located at the corner of Hollywood Road and Shelley Street, Central, Hong Kong, where the applicants operated a restaurant and bar under the trade name of “Coast”. The renewal of the liquor licence had been refused by the Liquor Licensing Board (LLB) on 16 July 2013.  I also ordered a stay on the MSAB’s decision to refuse a liquor licence which brought into effect a previous decision of the MSAB giving the applicants an interim licence pending final resolution of the appeal.  This allowed the applicants to continue to operate as before and sell liquor at the premises subject to the licence conditions previously imposed until the substantive hearing of the judicial review.

3.  Notice of the leave application was given to the MSAB and the LLB as the putative respondent and putative interested party respectively, and they were invited to attend the hearing.  The MSAB advised that it would not participate in the proceedings, whilst the LLB attended and opposed the application.  At the conclusion of the hearing on 3 December 2013, and upon receipt of written submissions on 4 December 2013, I granted leave and handed down my reasons on 5 December 2013.  An expedited hearing was ordered, and the judicial review was fixed for 23 January 2014.  On 15 January 2014, the applicants made application to discontinue the proceedings which I granted.

4.  The LLB applied for costs, and in response the applicants opposed the LLB’s application and asked for their costs. 

The applicant’s submissions

5.  The applicants argue that the discontinuance of the proceedings was not due to a re-consideration of the merits of their claim but to the decision of the LLB on 16 July 2013, and as confirmed by the MSAB on 7 November 2013, not to renew the liquor licence which had such a “catastrophic effect” on the business that it has now shut down and ceased to exist.

6.  It is submitted that the issues that would have been argued at the substantive judicial review hearing were substantively argued at the leave application and it was more probable than not that the applicants would have succeeded in their claim.

7.  They ask the court to exercise its discretion either in favour of the applicants or to make no order as to costs.

The LLB’s submissions

8.  The argument for costs on behalf of the LLB is divided into two parts.  The first part concerns the stage when the LLB participated in the leave application as the putative interested party at my direction.  It is argued that the LLB had to attend to assist the court and it was not a situation where the LLB chose to intervene in a hearing it was not supposed to attend.

9.  The second part concerns the stage after leave was granted and it became a formal party to the proceedings with the right to participate in the substantive hearing.  The LLB makes the point it was the only party contesting the applicants’ case but as the applicants have abandoned their claim, it should be awarded its costs.

10.  As to the second part, the LLB argues that the applicants by abandoning their cause of action should pay the LLB’s costs. They submit that costs should follow the event as provided for under Order 62, rule 3 of the Rules of the High Court.  They further submit that there are no exceptional circumstances justifying departure from the general principle.

11.  As to the first part, as I understand the argument on behalf of the LLB, because I ordered that costs of the leave application be “costs in the cause”, these costs should be subsumed into the costs of the entire proceedings.  It is further argued that in view of the dismissal of the application, costs should follow this event.  In the alternative, it is argued that should I revisit the costs order, implying that it is not open to me to do so, costs should be awarded to the LLB or at least there should be no order as to costs.  To my mind, it is not a question of revisiting the issue but a question of addressing the issue of costs at the conclusion of the case taking into account all the relevant facts and circumstances to ultimately do justice between the parties.  The LLB argues that the starting point on the costs of a contested leave application to commence judicial review is that there should be no order as to costs but the court will order costs against an applicant if there are “good reasons” to do so.  It is put forward on behalf of the LLB that there are three “good reasons” why costs should be awarded against the applicants for the first part of the proceedings. First, the application was initiated out of a private commercial interest rather than a wider public interest. Secondly, as the applicants sought interim relief for an interim liquor licence, the LLB had to participate in the leave hearing even though it was unsuccessful.  Thirdly, the court made a mandatory direction that the LLB attend the hearing.[1]

12.  Costs in the cause is not an order which finally disposes of those costs.  Costs in the cause means that the costs of the interlocutory proceedings are subject to the final outcome of the case and to the final discretion of the court.[2] In this case, there was no substantive hearing of the judicial review.  It was abandoned by the applicants.  In such a case, the costs would normally be awarded against the abandonee but there may be circumstances that warrant a departure from what would otherwise be the appropriate costs order. 

Applicable principles

13.  In my determination on the issue of costs, I have been assisted by the judgment of Lord Neuberger (as he then was) in M v Croydon London Borough Council [2012] 1 WLR 2607.  His Lordship in his judgment was addressing the broader issue as to whether a different approach should be taken on the question of costs in judicial review proceedings where the claim was addressing an issue of public interest or against a public body.  His Lordship specifically considered judicial review proceedings where the parties had reached a settlement and there was no order as to costs, even when one party had conceded the whole, or substantially the whole, of the other side’s case.  In His Lordship’s consideration of the issue, he discussed at length the general principles that apply to awards of costs in general civil litigation and concluded they applied equally to judicial review cases.[3]

14.  His Lordship held that a successful party who obtained all the relief he sought, whether by consent or after a contested hearing, was entitled to be paid his costs by the unsuccessful party unless there was good reason to the contrary. He said this applied across the board of the civil justice system and it made no difference that a defendant was a public body.  He also said that where a claimant obtained only some of the relief he sought, the position on costs would depend on which party was the more successful, although there could be an argument as to the importance of any issue with respect to costs on which he had failed.

15.  His Lordship addressed the relevant principles on costs, both after trial and after settlement before trial, in ordinary civil litigation.  I do not propose to address in detail the principles canvassed by His Lordship.  They are well known and there is no need to repeat them in this decision.  I refer to his discussion in relation to a claim that has been settled.  He identified three different types of cases: “(i) a case where a claimant has been wholly successful whether following a contested hearing or pursuant to a settlement, and (ii) a case where he has only succeeded in part following a contested hearing or pursuant to a settlement, and (iii) a case where there has been some compromise which does not actually reflect the claimant’s claims.”[4]  He stressed in his reasons that in any case the allocation of costs will depend on the specific facts, but some points could be made about these different types of cases. 

16.  I want to focus on case (iii) where he said that in such a case a court is often unable to gauge whether there is a successful party and this may result in no order for costs but he went on to say: “However, in some such cases it may well be sensible to look at the underlying claims and inquire whether it was tolerably clear who would have won if the matter had not settled. If it is, then that may well strongly support the contention that the party who would have won did better out of the settlement, and therefore did win.”

17.  I realize Lord Neuberger is dealing with a situation where the parties have settled the claim.  It seems to me that the issue remains the same even when the parties have not settled the claim, in circumstances that for some reason or another, the case has come to an end without resolution.  It may be, as in the present case that a party has given up even though they have a good arguable claim. Each situation will depend on its own particular set of circumstances. It may be that the fact that a party has abandoned his claim is in itself reason to award costs against him. But there may be circumstances that warrant further consideration of the issue.  In this case, I am in a position to look at the underlying claim, and inquire or assess, whether it was tolerably clear who would have won.

Discussion

18.  I granted leave after a full day hearing which was strongly contested by the LLB.  It has given me an opportunity to examine and assess the merits of the applicants’ claim.  The first ground was that the MSAB took account of past infractions by the licensee with little or no consideration of the operation of the premises by the licensee during the 3 month renewal period which was granted to closely monitor his performance and the operation of the premises.  The second ground was that the MSAB took into account irrelevant considerations by placing emphasis on unsubstantiated complaints.  Under this ground, it was argued that the way the LLB considered and assessed the complaints in relation to the premises was inconsistent and unfair.  It was also argued that the MSAB relied on the views of the LLB and dealt with the complaints in the same way.  I set out more detailed comments about the claim in my decision of 5 December 2013.  On what I had before me, I considered that the applicants had a strong case.

19.  I should set out some relevant background which is necessary to understand the applicants’ claim and why in my view they had a winning case.  The premises of Coast had been the subject of complaints about noise.  It appears this has been an issue not only in relation to these premises but in relation to the locality generally which has become a restaurant and bar district.  The premises were located in a commercial building at the corner of Hollywood Road and Shelly Street.  Running along Shelly Street is the Central/Mid Levels escalator.  There is considerable vehicular and pedestrian traffic in this area during the day and night.

20.  It should be noted that the licence had two conditions imposed on it: that all doors and windows be kept closed after 11 pm; and that no liquor be sold after 2 am.  It should also be noted that no issue was taken as to the suitability of the premises for the purpose of selling liquor.

21.  It may be argued by the LLB that each renewal of licence permitted the LLB to impose whatever conditions it thinks fit.  There are two points I make at this stage.  The renewal period was being progressively shortened, maybe for what was considered to be a good reason, but it did undermine the appeal process that the applicants had a right to exercise.  The LLB reinstated a condition that on appeal had been removed, and by so doing had disregarded the decision of the MSAB.  This is an issue that needs to be addressed.

22.  The applicants have been back and forth before the LLB and MSAB in relation to the liquor licence conditions and, I must say, in circumstances that, in my view, have acted unfairly and unreasonably on the applicants.

23.  On 7 May 2013, the LLB had granted the applicants a 3 month renewal of licence (until 9 August 2013) and reinstated a condition prohibiting the playing of music after 11 pm. This was done even though the condition had been removed on appeal to the MSAB on 8 March 2013 with reasons for the decision handed down on 20 May 2013.  Another condition which had been previously imposed on the applicants about the consumption of liquor on the premises had been removed by the MSAB on appeal on 21 August 2012, yet reinstated on 6 November 2012 when the licence was renewed for 6 months. The renewal of a liquor licence was normally for a period of 12 months. It appears the progressive reduction of the licence period from 12 months to 6 months to 3 months was due to the issue of noise.

24.  Coast is now closed down.  It may be due to bad management or poor sales, and there may be matters that reflect poorly on the licensee or the way the premises were operated, but I am concerned about how in the exercise of their powers the relevant authorities have treated the applicants.  If they have done so in an unfair and unreasonable manner, the courts must address the issue in resolving the claim or the question of costs.  

25.  The court within its discretion can make a different order when it would be unjust to apply the general rule.[5]  In making an award for costs, a court will, within the terms of the relevant statutory provisions and rules of court, consider the justice of the situation and examine all the factors and circumstances.[6] Any question relating to costs, is both highly fact-sensitive and very much a matter of discretion of the court.  Each case will turn on its own facts so that a case might have an unusual feature or circumstance which could justify departing the standard approach.  The decision of how to allocate liability for costs normally arises following a contested hearing or pursuant to a settlement.  In this case, the claim has been abandoned without resolution.  But before the judicial review claim could be formally made, leave of the court was required.  It gave the court an opportunity to examine, admittedly for the purposes of leave, the unresolved substantive issues.  I granted leave to the applicants on the basis they had a reasonably arguable claim which enjoyed realistic prospects of success.  I considered that the applicants had a compelling case to judicially review the decision of the MSAB on 7 November 2013.  I also granted interim relief by staying the MSAB’s decision for the applicants to have an interim liquor licence in the meantime, and ordering an expedited hearing of the substantive hearing, in order to protect the position of the applicants who had or may have been unreasonably or unfairly treated.  

26.  The LLB attended the leave hearing and strongly opposed the application.  On behalf of the LLB, lengthy written submissions were filed in opposition to the application.  The hearing took a full day.  Whilst I directed that the LLB should attend the leave hearing, it chose to strongly oppose the application in the face of what I concluded to be a compelling case.

27.  It has been said that there are situations when there is no real winner or no real loser and the standoff results in no order as to costs.  But there may be a situation like the present, when someone has given up when they had a good arguable claim, even one that was likely to win. The question is what does justice demand in such a situation?

Conclusion

28.  I have decided to I exercise my discretion in favour of the applicants on the basis that it was tolerably clear to me that the applicants would have won their claim.  Accordingly, I order that the LLB pay the costs of the applicants, to be taxed if not agreed. 

 

	(Kevin Zervos)
	Judge of the Court of First Instance
	High Court

Dundons, solicitors for the applicants

Mr Lewis Law, Deputy Principal Government Counsel (Ag), for the interested party

[1] See Sky Wide Development [2011] 5 HKLRD 202; Re Leung Kwok HungandHo Chun Yan Albert HCAL 83&84/2012, unreported, 28 September 2012.

[2] See Hong Kong Civil Procedure 2014, Vol 1, para 62/1/3.

[3] At 2621F-2623B.

[4] At 2622B-D.

[5] See Commissioner of Inland Revenue v HIT Finance Ltd, FACV Nos 8 and 16 of 2007, 26 June 2008 at paragraphs 6 and 7.

[6] Section 52A of the High Court Ordinance, Cap 4 provides that subject to the rules of court, the question of costs is a matter within the discretion of the court which has full power to determine by whom and to what extent the costs are to be paid. The court can award costs against a person, who is not a party to the proceedings where it is in the interests of justice to do so and can also disallow or order a legal representative of a party to meet the whole or part of any wasted costs. See RHC O62 r5. See also Re Eglindata (No 2) [1992] 1 WLR 1207 at 1214A-C.

HCAL 168/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 168 OF 2013

___________________   

BETWEEN
	MCGETTIGAN, BRIAN KEVIN	1st Applicant
	GIANT LUCK INTERNATIONAL LTD	2nd Applicant
and
	MUNICIPAL SERVICES APPEAL BOARD (“MSAB”)	Putative Respondent
	LIQUOR LICENSING BOARD (“LLB”)	Putative Interested Party
	___________________

Before: Hon Zervos J in Court

Date of Hearing: 3 December 2013

Date of Written Submissions: 4 December 2013

Date of Decision: 5 December 2013

______________

D E C I S I O N

______________

Introduction

1. This is an application for leave to apply for judicial review of the decision of the Municipal Services Appeals Board dated 7 November 2013 refusing to renew the liquor licence in relation to the premises situated at 1/F, Kinwick Centre, 32 Hollywood Road, Central, Hong Kong.

2. The 1^st applicant is the licensee of the premises and the 2^nd applicant is the corporate vehicle through which a restaurant and bar is operated at the premises under the trade name of “Coast”.

3. Having considered the Form 86 and the supporting affirmation of the 1^st applicant, I directed that a copy of the application be served on the Municipal Services Appeals Board (“the MSAB”) as the Putative Respondent and the Liquor Licensing Board (“the LLB”) as Putative Interested Party and that the application be dealt with by way of hearing to which they were asked to attend.  The MSAB indicated that it took a neutral stance in relation to the application and would not participate in the proceedings.  The LLB on the other hand filed written submissions opposing the application and was legally represented at the hearing.

4. My task is to deal with two matters.  One follows the other.  I am required to decide whether this application for leave to apply for judicial review should be granted on the basis that there is a reasonably arguable claim which enjoys realistic prospects of success[1],and if I so decide, whether interim relief can or should be granted pending the determination of the application.[2] 

History of the licence

5. The premises in question are located on the first floor of a commercial building at the corner of Hollywood Road and Shelley Street in the Soho area which has become a locality for restaurants and bars.  The premises operate under a General Restaurant Licence issued by the Food and Environmental Hygiene Department.  The business hours of the premises are from 8am to 3am, and the selling of liquor hours are from 8am to 2am.  The entrance to the premises is on Shelly Street.  This street is free of vehicular traffic and is intermittently lined on either side of it with restaurants and bars, and residential buildings.  Also running along Shelley Street is the Central/Mid levels escalator.

6. On 10 November 2009, the LLB first granted a liquor licence to the premises for a period of 12 months with the following two conditions:

“(a) All doors and windows of the premises shall be kept closed after 11:00p.m.

(b) No liquor shall be sold or supplied for consumption on the premises after 2:00a.m.”

7. In November 2010, the licence was renewed for 12 months.  On 6 September 2011, the licence was transferred to the present licensee with the following additional condition:

“(c) The licensee shall be on duty on the premises from 9:00p.m. to 3:00a.m. every Friday, Saturday and the day preceding general holidays.”

8. On 8 November 2011, the licence was renewed by the LLB for a further 12 months with the following additional condition:

“(d) The licensee shall with due diligence ensure that the liquor sold or supplied is to be consumed on the premises only.”

9. The licensee appealed to the MSAB against the imposition of condition (d) which was heard on 3 August 2012 and its decision was handed down on 21 August 2012.  The MSAB allowed the appeal and ordered the removal of condition (d) from the liquor licence.

10. At the renewal of licence hearing on 6 November 2012, the LLB granted a renewal of 6 months (until 6 May 2013) with the reinstatement of condition (d) and the addition of condition (e).  Condition (e) provided:

“(e) No music shall be played and no sound amplification device shall be used at the premises after 11:00p.m.”

11. The licensee appealed to the MSAB against the imposition of condition (e).  On 8 March 2013, the MSAB allowed the appeal and removed the condition from the liquor licence.  A cross appeal by a District Councillor and a group of residents residing some distance away from “Coast” opposing the renewal of licence was also heard and disallowed.  The reasons for the decision were handed down on 20 May 2013.

12. On 19 April 2013, the licensee applied to renew the licence which was due to expire on 6 May 2013.  At the renewal hearing of the licence on 7 May 2013, the LLB approved the renewal of the licence for 3 months (until 9 August 2013) and reinstated condition (e).

13. The licensee appealed to the MSAB against the reinstatement of condition (e) and the short duration of the renewed licence. It was heard by the MSAB on 24 June 2013 which it dismissed on 25 September 2013 except it amended condition (e) as follows:

“(e) No sound amplification shall be used at the premises after 11:00p.m.”

The reasons for the decision were handed down on 4 November 2013.

14. On 24 May 2013, the licensee applied for a renewal of licence as the 3 months was due to expire on 9 August 2013.  The application was heard by the LLB on 16 July 2013 which refused to renew the licence.  The licensee appealed to the MSAB against the refusal of licence.

15. On 19 July 2013, the licensee made application for an interim renewal of the liquor licence issued on 7 May 2013.  It was heard on 2 August 2013 and reasons were handed down on 13 September 2013.  The MSAB made the following order:

“Subject to any order the Board may make in MSAB Appeal No.39/2013, there be granted an interim renewal of the current Liquor Licence pending the final determination of the appeal of the MSAB Appeal No.53/2013 with the same conditions as the current Liquor Licence granted by the LLB on 7 May 2013.”

16. The appeal was heard by the MSAB on 26 September 2013 and its decision was handed down on 7 November 2013.  The MSAB dismissed the appeal and affirmed the decision of the LLB.

17. At each of the appeal hearings before the MSAB, the LLB was the respondent and represented by government counsel.

The issue concerning the licence

18. The issue that seems to have plagued these licensed premises is the noise level emanating from it after certain hours in the night.  This is a problem one would expect, and needs to be addressed, in a mixed residential and commercial area.  It would appear that the conditions attached to the liquor licence were done so with this in mind.  I note that the location of the premises has never been an issue for the LLB or the MSAB in the sense that the licence was inappropriate for these premises. Nor has there been any contravention of the offense provisions under Part IV of the Dutiable Commodities (Liquor) Regulations.  However there has been an issue with respect to the noise emanating from the premises which has been the subject of complaint.

Leave application

19. In the notice of application for leave to apply for a judicial review, the applicants seek relief against the decision of the MSAB dated 7 November 2013 to dismiss the 1^st applicant’s appeal against the LLB’s decision not to renew the liquor licence in respect of the premises made on 16 July 2013.  The relief sought is an order of certiorari quashing the decision.  During the course of the hearing, it arose that the relief sought should also include an order of mandamus for the MSAB to rehear and determine the appeal.

20. Upon leave being granted, the applicants also seek a stay of the decision which would bring into effect the interim licence granted by the MSAB on 2 August 2013.

21. Mr Lewis Law, who appears for the LLB, argues that the applicants did not make full and frank disclosure to the court in the papers for leave to apply for judicial review.  I do not agree.  There was a page missing in the decision in question but it was an obvious omission.  The notes of proceedings and police schedules were not included but the contents were generally addressed by the papers submitted and in certain respects the documents in question could be viewed as containing information that the applicants could rely on in their application.[3] An explanation has been provided by the solicitor on record that page 13 of the decision and the notes of proceedings had not been received by him when he took over the case.  I accept that explanation.

Grounds for review

22. I have decided to grant the applicants leave to apply for judicial review of the decision.  I set out my reasons as follows.

23. The applicants raised two grounds for review in the papers.  The first ground is that the MSAB took into account past infractions by the licensee with little or no consideration of the operation of the premises by the licensee during the 3 months renewal period which was granted to closely monitor his performance and the operation of the premises.  I do not consider there is any basis for the complaint that it was irrelevant for the MSAB to take into account past infractions by the licensee in its overall determination of whether or not he is a fit and proper person to hold a liquor licence.  It is, however, reasonably arguable that the MSAB may not have given any or sufficient consideration to the performance of the licensee and the operation of the premises in the 3 months renewal period.  This relates to an additional ground raised in the hearing, which I will come to later, in relation to the failure to give adequate reasons.

24. The second ground is that the MSAB took into account irrelevant considerations by placing emphasis on unsubstantiated complaints.  Under this ground, it is argued that the way the LLB considered and viewed the complaints in relation to the premises was inconsistent and unfair. It is argued that the MSAB relied on the views of the LLB and dealt with the complaints in the same way.  Implicit in this ground is the issue of the procedural history of the renewal of the licence and the appeal against conditions which were removed or amended by the MSAB but later reinstated by the LLB.  It therefore requires consideration of the procedures of the LLB and the MSAB and the interrelationship between them.  I am of the view that this ground is reasonably arguable.

25. Two additional grounds were raised in the course of the hearing for which notice and leave have been given.  The third ground concerns the failure by the MSAB to give adequate reasons for its decision.  I note that under Regulation 17(3) (b) of the Dutiable Commodities (Liquor) Regulations, Cap 106, the LLB must give reasons in writing for a decision to refuse an application and under Regulation 23(1) (1A) and (2) the secretary to the LLB must give notice in writing together with reasons, of a decision to refuse to renew a liquor licence to the person concerned.  This is relevant to the LLB’s decision of 16 July 2013.  The MSAB is governed by the Municipal Services Appeals Board Ordinance, Cap 220.  The conduct of proceedings is provided for under section 12.  The MSAB under section 15 is obliged to give reasons in writing for its decisions and these reasons must include its findings on material questions of fact and a reference to the evidence or other material on which these findings were based. 

26. The decision of the MSAB sets out the background and a recital of the LLB’s reasons for refusal of the renewal of the licence which appear to have been taken from the LLB’s statement under section 9(1) (a) of the Municipal Services Appeals Board Ordinance, Cap 220.  The decision includes a reference to Regulation 23 of the Dutiable Commodities (Liquor) Regulation and a statement that appeals to the MSAB are by way of a rehearing and that Board members exercise their discretion according to materials before them.  There follows a discussion which consists of five paragraphs.  In the last paragraph, the chairman of the MSAB stated that they were driven to conclude that the licensee was not a fit and proper person to hold a liquor licence and the granting of a licence in the circumstances was not in the public interest.  It is argued that the nature and degree of the reasoning and analysis was inadequate with respect to the MSAB’s key conclusions.  I am of the view that this ground is reasonably arguable.

27. The fourth ground is that the reasoning of the decision in paragraph 24 was internally inconsistent and logically flawed.  It concerned briefly the licensee’s performance during the period under review.  To some extent, it relates to the reasonably arguable point I have mentioned under the first ground.  Accordingly, I am of the view it is reasonably arguable.

Interim relief

28. The next issue I need to address is the question of interim relief.  In accordance with Order 53, rule 3(10) (a), the grant of leave shall operate as a stay of the proceedings to which the application relates until the determination of the application or until the court otherwise orders.  This means that in the meantime the final determination of the MSAB made on 7 November 2013 is stayed and, in my view, the interim order made by the MSAB on 2 August 2013 comes into effect.  This involves the grant of an interim renewal of the liquor licence to the licensee pending final determination of the appeal.

29. Mr Law opposes the interim relief, staying the decision and bringing into effect the MSAB order of 2 August 2013.  He makes three points against it.  First, he argues that the court should consider the retrospective effect the interim relief will have from the date of the decision on 7 November 2013 to the date of the order granting the interim relief.  I do not see this as an issue.  The interim liquor licence granted by order of the MSAB on 2 August 2013 will take effect as at the date the court grants leave and so orders.

30. Secondly, he argues that the refusals to renew the liquor licence by the LLB and the MSAB are not “proceedings” within the terms of Order 53, rule 3(10) (a).  He refers to the decision of Bokhary J (as he then was) in AngloStarlite Insurance Co Ltd v The Insurance Authority [1992] 2 HKLR 31 who in examining the advice of the Board in Minister of Foreign Affairs, Trade and Industry v Vehicle and Supplies Ltd and Anor [1991] 1 WLR 550, distinguishes it, and makes the point that in that case the process of implementation was not encompassed in the matter to be challenged by way of judicial review and what the application for judicial review related to did not amount to proceedings. Bokhary J held that the process of implementation of the decision under review was encompassed in the matter to be challenged, and taken together the process by which challenged executive decisions were reached and the process by which they would be implemented amounted to proceedings within the meaning of Order 53, rule 3(10) (a).  The MSAB decision of 7 November 2013 is a decision of an appeal, conducted pursuant to section 12 of the Municipal Services Appeals Board Ordinance Cap 220.  The decision and its implementation are encompassed in the matter to be challenged and in my view constitute proceedings within the meaning of Order 53, rule 3(10) (a).

31. In PCCW-HKT Telephone Ltd v Telecommunications Authority, (unreported) HCAL No 63 of 2004, Hartmann J (as he then was) granted leave to apply for judicial review of decisions by the respondent concerning local access charges.  He also granted an interim stay, prohibiting the respondent from imposing the charges until the challenge to the lawfulness of the decisions had been determined.  The interim stay, however, was granted subject to the condition that the respondent be entitled to apply to set aside the stay.[4] The basis for this condition is to cater for any change of circumstances that would warrant a lifting of the stay and the revoking of any related orders in the interests of justice.

32. Thirdly, he argues that even if the court is satisfied that it has the power to grant a stay or an interim order it should balance the commercial interests of the applicants against public interest considerations as represented by the factors taken into account by the LLB and the MSAB in making their respective decisions including the licensee’s prior record and the representations of interested parties.  It seems to me that it is the very purpose for the judicial review and I am of the view that in all the circumstances the interim relief sought should be granted.

33. It was also argued that the court does not have power to grant relief or direct a grant of a liquor licence.  It is well acknowledged that judicial review is the means by which the court exercises a supervisory jurisdiction over inferior courts, tribunals and other bodies performing a public function.  Mr Law argues that whilst the MSAB can exercise all the powers and discretions of the LLB[5], the court cannot.

34. Mr Law refers to the judgment of Godfrey JA in Cheung Kwok Hung v Liquor Licensing Board [1995] 2 HKLR 456 who questioned whether a court can make an interim order which has the effect of granting or extending a licence.  He highlighted the dilemma of the court in such circumstances, and the need to protect the position of an applicant who had been unfairly treated, and went on to explain:

“Having regard to the state of the legislation, which does not provide for continuance of the licence pending an appeal, an expedited appeal is necessary to protect the position of an applicant who has or may have been unfairly treated. It seems to me unsatisfactory that the court should be absolutely unable to interfere in order to put such a matter right before it is too late and the licensee’s business has been ruined by a refusal to renew the licence. The failure to renew a licence is so serious in this sort of case that the applicant is justified in suggesting that its business will in fact be ruined if the licence (if it ought to be renewed at all) is not renewed before it is too late. It is not for me to judge today whether the applicant deserves that fate. My only concern is to indicate what might be done to do justice between the parties. ”[6]

35. In Paul Baynham and Cristina Ltd v The Municipal Services Appeals Board, (unreported) HCAL No 38 and 71 of 2010, Reyes J referred to the comments of Godfrey JA and reasoned he had power to make an order that had the effect of extending a licence until the determination of the judicial review.  In that case, Reyes J had granted leave to apply for judicial review and further directed that there would be a stay of the effect of the cancellation of the licence such that the licence would be deemed to remain valid until the determination of the judicial review or further order.[7]  He explained that his direction was within the court’s inherent jurisdiction to take measures to safeguard its procedures and preserve the status quo pending the substantive determination of a dispute and that his direction had the effect of precluding the LLB from treating the licence as expired which was deemed to continue until such time as the judicial review is resolved.  As he rightly points out, not to do so, to the extent the LLB acted wrongly, the court’s procedures would be circumvented.  After all, the courts are there to ensure that appropriate measures are taken to protect the position of an applicant who has or may have been unfairly treated by the decision, the decision-maker or the decision making process.

36. In AngloStarlite Insurance Co Ltd,Bokhary J made it abundantly clear that the courts have the power to stay under Order 53, rule 3(10) (a) and that it was an important measure in order to preserve a party’s position to provide an effective remedy if the claim is eventually made out. He said:[8]

“I am happy to reach the conclusion that the courts are able to direct such stays whenever it is appropriate so to do. Where a right may be made out, there should be preserved an effective remedy by which to enforce it if it is eventually made out. And it should be, and I trust will be, clearly understood that – the power to direct such stays being discretionary – the existence of the power will not paralyse administrative action; rather it will ensure that such action conforms with the law. That is the essence of judicial review.”

Orders

37. Mr Law submits that if the court should consider it appropriate to grant leave to apply for judicial review and interim relief in favour of the applicants such that they can operate the premises under a liquor licence pending the substantive hearing of the judicial review, he invites the court to specify the commencement and duration of such a licence and to fix a substantive hearing for the judicial review.  I can understand the underlying concern of such an invitation which I will bear in mind in the orders I make.

38. I grant leave to the applicants to apply for judicial review of the decision for which relief is sought.  I grant a stay of the proceedings under Order 53, rule 3(10) (a) and I order that this stay does not apply to the order of the MSAB made 2 August 2013 which should be given effect as of the date of this decision.  I note that the order of the MSAB dated 2 August 2013 will come into effect by my order to stay the proceedings of the final determination of the MSAB and its decision of 7 November 2013. For the avoidance of any doubt, in staying the decision, I direct that the terms of the order of the MSAB on 2 August 2013 be given effect pending the final determination of the judicial review.  I note that the stay can be revoked by the court if there are circumstances warranting such an order.  I accordingly make it a condition of the stay that the respondent or the interested party be entitled to apply to set aside the stay.  I order an expedited hearing that will be fixed by the court.  I finally order that costs be in the cause.

	(Kevin Zervos)
	Judge of the Court of First Instance
	High Court

Mr Adrian J Halkes and Ms Shirley Hung, instructed by Dundons, for the applicants

Mr Lewis Law, Senior Government Counsel, for the putative interested party

[1]Po Fun Chan v Winnie Cheung (2007) 10 HKCFAR 676.

[2] RHC, Order 53, rule 3(10).

[3] Affidavit of Mr Christopher John Dundon dated 2 December 2013.

[4] At paragraph 8, Hartmann J (as he then was) held that the Court of First Instance has the jurisdiction to order a stay of an executive decision of the kind under challenged in that case. He relied on Anglo Starlite Insurance Co Ltd as authority. See also paragraph 14.

[5] Section 7(1) of the Municipal Services Appeal Board Ordinance, Cap 220.

[6] At 460 line 5 to 15.

[7] Paragraph 20.

[8] At 36 lines 5 to 10.