Choi King Fung and Another v. Hong Kong Housing Authority
Read the full judgment text of HCAL 191/2015 on BabelCite. This High Court CFI judgment was delivered on 17 March 2017.
1. By these proceedings the Applicants raise a constitutional challenge against the revised system of the Hong Kong Housing Authority (“ HKHA ”) for allocating public rental housing (“ PRH ”) among non‑elderly one‑person applicants. It is said that the revised system infringes the Applicants’ right to social welfare under Art 36 and their right to equality under Art 25 of the Basic Law.
Cited by 3 cases · Cites 8 cases
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HCAL 191/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 191 OF 2015 ____________
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_________________ J U D G M E N T _________________ I. INRODUCTION 1.By these proceedings the Applicants raise a constitutional challenge against the revised system of the Hong Kong Housing Authority (“HKHA”) for allocating public rental housing (“PRH”) among non‑elderly one‑person applicants. It is said that the revised system infringes the Applicants’ right to social welfare under Art 36 and their right to equality under Art 25 of the Basic Law. 2.The actual decisions the Applicants seek to impugn are (i) the decision of the HKHA to refine the Quota and Points System (“QPS”) for PRH announced on 14 October 2014; and (ii) the action of the HKHA in maintaining the refined QPS (“Refined QPS”) since 1 February 2015 when it came into effect. The application was filed on 25 September 2015 which was beyond the 3-month time limit prescribed under Order 53 rule 4(1) of the Rules of the High Court. 3.By a previous order of Au J, the hearing that took place before me was a “rolled‑up hearing” of (i) the Applicants’ application for extension of time, (ii) their application for leave to apply for judicial review if time is extended, and (iii) the application for judicial review itself if leave is granted. I propose to deal with the substantive merits of the challenge first. II. BACKGROUND 4.A sustained public housing programme in Hong Kong dates back to the resettlement housing of the 1950s after a fire in Shek Kip Mei destroyed many make‑shift homes of refugees from the Mainland. Since then public housing had assumed increasing importance. By 1997 about 45% of all households in Hong Kong were living in PRH and subsidized‑sale flats. 5.The main public housing programmes available today are PRH and the Home Ownership Scheme. The former consists in the provision of residential flats in public housing estates on a rental basis to needy residents at discounted rates. The majority of PRH is provided by the HKHA (with a small proportion provided by the Hong Kong Housing Society). As at September 2015, the HKHA had a stock of 756,000 PRH / interim housing flats, accommodating 2,065,500 persons, or 29% of Hong Kong’s population. HKHA 6.HKHA is a statutory body established in April 1973 under the Housing Ordinance (Cap 283). It consists of the Director of Housing, no more than 3 public officers and a number of persons other than public officers, all of whom are appointed by the Chief Executive. As at December 2015 there were 27 non‑official members and 4 official members, with the Secretary for Transport and Housing and the Director of Housing being respectively the Chairman and Vice‑Chairman. The Housing Department serves as the executive arm of the HKHA. 7.By s 4(1) of the Housing Ordinance, the HKHA is to exercise its powers and discharge its duties “so as to secure the provision of housing and such amenities ancillary thereto as the [HKHA] thinks fit for such kinds or classes of persons as the [HKHA] may, subject to the approval of the Chief Executive, determine”. The HKHA has set as its primary role the provision of subsidised PRH to low‑income families who cannot afford private rental accommodation. 8.The HKHA has formed standing committees to formulate and oversee policies in specific areas. Among them, the Subsidised Housing Committee is responsible for determining an annual PRH allocation plan which serves as a guiding framework for the allocation of PRH in that year. Categories of PRH applicants 9.A person who wishes to obtain accommodation in PRH has to apply to the HKHA.[1] An applicant must be at least 18 years of age and not have any interest in any domestic property in Hong Kong. He and his family members are subject to maximum income and total net asset limits from the date of application to the date of the tenancy of the PRH unit eventually allocated. 10.Under current arrangements, applicants for PRH are divided into several categories:
11.By far the largest category is applicants on the Waiting List. They accounted for 62.4% to 71.5% of the total number of PRH units allocated each year between 2005/6 and 2015/16. 12.These proceedings concern a sub‑category within applicants on the Waiting List, namely, non‑elderly one‑person applicants. “Non‑elderly” means that they are below 60, though upon reaching 58 an applicant can apply under the Single Elderly Persons Priority Scheme provided that a PRH flat will only be allocated to him after he reaches 60. “One‑person” signifies that the PRH flat applied for is for the applicant’s occupation on his own. Position of one‑person applicants 13.Before 1985, individuals were generally not allowed by the HKHA to apply for PRH flats for occupation on their own. The restriction was lifted in 1985, primarily in response to demand from the elderly and those affected by redevelopment or living in temporary housing areas. Since 1985, single individuals could apply on their own but until the early 2000s, the great majority of flats allocated for single occupation were allocated to elderly applicants. Quota and Points System for Non‑elderly One‑person Applicants 14.By 2005, a substantial rise had been observed in the number of one‑person applicants on the Waiting List and in particular in the number of young one‑person applicants. For example, the proportion of one‑person applicants among newly registered applicants had risen from 21% in 1998/99 to 45% in 2004/05, while the proportion of one‑person applicants aged below 25 among newly registered applicants had jumped from 3.8% in 1998/99 to 20.6% in 2004/05. The HKHA considered that under the then existing arrangements, which did not differentiate non‑elderly one‑person applicants from other applicants in the Waiting List, the soaring demand from the former would undermine the ability of the HKHA to assist families with more pressing needs. 15.The perceived problem led to a proposal to devise separate arrangements for non‑elderly one‑person applicants. Several options were canvassed in the consultation process. The course eventually recommended to the Subsidised Housing Committee of the HKHA, and adopted by it at a meeting held on 29 September 2005, was to set an annual quota for non‑elderly one‑person applicants and establish a points system to accord priority to applicants of higher age. 16.This gave birth to the QPS, the salient features of which were as follows:
17.The HKHA has since published on its website information on the lowest point‑scores of applicants in the QPS (for different districts) who are being arranged for detailed vetting — a process of checking and verification shortly before allocation of a PRH unit to an applicant. As will be explained below, the lowest scores vary from time to time. 18.For the purpose of these proceedings, it is important to note that the Applicants have only sought to impugn the decision to refine the QPS as described below. There was and is no challenge against the decision in 2005 to set up and implement the QPS in the first place as a separate scheme to deal with non‑elderly one‑person applicants. Any such challenge now would of course be more than 10 years out of time. 19.As implemented, up to 2014, the annual allocation quota for non‑elderly one‑person applicants under the QPS was set at 8% of the total number of flats to be allocated to applicants on the Waiting List that year (being the average percentage over the previous 10‑year period from 1995/96 to 2004/05), subject to a ceiling of 2,000 flats. 20.Further, non‑elderly one‑person applicants under the QPS were excluded from the statistics of waiting time for applicants in the Waiting List and from the HKHA’s policy target on average waiting time which for over a decade has been set at 3 years for general applicants on the Waiting List. Review and Consultation 21.In September 2012, the Government set up a committee called the Long Term Housing Strategy Steering Committee (“the Steering Committee”), chaired by the Secretary for Transport and Housing, to review the housing needs and priorities of the community and to devise a new long term housing strategy for the development of housing policy. In September 2013, the Steering Committee issued a consultation document. Highlighted in the document was the need to set priorities so as to assist those with genuine and the most pressing housing needs. For this purpose the Steering Committee selected 4 groups for closer examination, namely: (a) the elderly; (b) non‑elderly singletons over the age of 35; (c) inadequately housed households; and (d) youngsters and first‑time home buyers. 22.The Steering Committee put forward a large number of recommendations for consultation. Those concerning non‑elderly one‑person applicants included:[3]
23.An extensive public consultation followed, with a report published in February 2014. As far as the QPS was concerned, the consultation report summarised the views of the respondents as follows:[4]
24.Meanwhile, in October 2013, the Director of Audit also submitted his “value for money” audit report to the Legislative Council, containing a chapter on the allocation and utilisation of PRH flats. The audit acknowledged that the “supply has fallen short of the demand for PRH” and that “it is imperative that flats are allocated to people most in need of subsidised PRH”. The audit described the situation as follows:[5]
25.The audit noted that the existing arrangements tended to encourage young applicants to apply for PRH under the QPS as early as possible (best at the minimum eligible age of 18) despite the fact that they might not have a pressing need for housing. Because each year of waiting under the QPS attracted 12 points, whereas each year of age increase at the time of application brought only 3 points, there was a built‑in incentive under the QPS to apply for PRH early, and this might have been a catalyst for the increasing number of PRH applications in recent years. Unless such incentive was removed, the number of non‑elderly one‑person applications under the QPS was expected to continue to increase and the Waiting List would become longer and longer.[6] 26.In conclusion, the Director of Audit recommended that the Director of Housing should conduct a comprehensive review of the QPS including exploring possible improvement of the points system and consider the need to screen out ineligible QPS applicants on a periodic basis.[7] 27.In February 2014, in response to the Director of Audit’s report, the Public Accounts Committee of the Legislative Council issued its own report. In it, the Committee:[8]
and considered that
and that
The Refined QPS 28.Taking into account the views and recommendations in the consultation and the audit exercise, the Subsidised Housing Committee of the HKHA considered ways of refining the QPS, and eventually decided at a meeting on 14 October 2014 to adopt the following refinements to the QPS:
Implementation of the Refined QPS 29.The Refined QPS became effective on 1 February 2015. Pursuant to the refined system, a checking exercise was conducted for the year 2015/16. Letters were issued to 28,039 non‑elderly one‑person applicants under the QPS. As a result, 1,052 applications were switched to general applications and 14,085 applications were cancelled. III. THE APPLICANTS 30.There were originally 3 Applicants in these proceedings but the 1st Applicant withdrew his application in October 2016. Both the 2nd and 3rd Applicants are Hong Kong permanent residents, single and have no children. Both have received limited education up to mid‑secondary school. 31.The 2nd Applicant was born in 1968. Since about 2004 he has been living in a sub‑divided unit in Sham Shui Po, at a current rent of HK$2,600. He works as a security guard in a shopping mall earning $9,600 per month. He applied for PRH in November 2010 when he was 42. His initial score under the QPS was 73 points. At that time the lowest score for a QPS applicant to be offered a PRH unit was 133. By 2014, his score had increased to 130 points, but the lowest score for being allocated a PRH unit had increased to 152 points. 32.After the Refined QPS came into effect, the 2nd Applicant’s score as at July 2015 was 331 points, but the lowest score for being allocated a PRH unit was 435 points at that time. He said that meant he would have to wait another 8⅔ years (104 points divided by 12 points per year) until he was about 56, to be allocated a PRH flat. 33.The 3rd Applicant was born in 1965 and has lived alone for many years. He had slept rough on the street and in places of shelter for the homeless. He now lives in a sub‑divided unit in Jordan at a cost of $2,000 per month. 34.The 3rd Applicant applied for PRH in March 2009, when he was 44. His score under the QPS was 145 points in January 2015, and 361 points in July 2015, after the refinement. On this basis he said he would have to wait another 6 years and 2 months (74 points divided by 12 points per year), when he would be 56, to be allocated a PRH flat. IV. THE ISSUES 35.The Applicants mount a two‑pronged challenge against the Refined QPS. First, they contend that the decisions in question infringe their right to social welfare under Arts 36 and 145 of the Basic Law. These articles provide as follows:
36.Secondly, they contend that the decisions in question infringe the guarantee of equality under Art 25 of the Basic Law as well as Art 22 of the Hong Kong Bill of Right (Cap 383), no distinction being drawn between these provisions for present purposes:
37.The general structure of the necessary analysis in a constitutional challenge is well established. Following the guidance given in the joint judgment of Fok PJ and Stock NPJ in Official Receiver v Zhi Charles (2015) 18 HKCFAR 467 at §22, I shall deal with the issues in the following sequence:
38.I shall deal first with the case based on the right to social welfare. As will be seen, the case based on the guarantee of equality overlaps largely with this analysis and may therefore be dealt with more briefly afterwards. V. RIGHT TO SOCIAL WELFARE — THE RIGHT ENGAGED 39.The first sentence of Art 36 of the Basic Law states that Hong Kong residents “shall have the right to social welfare in accordance with law”. It is not in dispute that PRH is a form of social welfare.[9] As is obvious, however, it cannot sensibly be contended that every resident of Hong Kong is entitled to be provided with a PRH flat. It is necessary to see precisely what relevant right exists on the part of the Applicants that is afforded protection by the Basic Law. 40.The stipulation in Art 36 is expressed in general and abstract language. As Ribeiro PJ[10] stated in Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950 at §33:
41.Art 145 refers to the “previous social welfare system”, ie the system before the Basic Law came into effect in 1997. On the basis of this system, the Government is mandated to formulate policies on its development and improvement in the light of the economic conditions and social needs. 42.In allowing the appeal in Kong Yunming, the Court of Final Appeal rejected the notion that the protected right to social welfare could be regarded as defined by or subject to the conditions inherent in the legal or administrative arrangements devised from time to time for the provision of the welfare, for that would be to deny any meaningful effect to Art 36. In that case the Court of Final Appeal held that the scheme of comprehensive social security assistance existing prior to 1 July 1997, incorporating an eligibility requirement of one‑year’s residence in Hong Kong, which had been applicable since 1970, represented a set of accessible and predictable rules embodying a right to social security benefit in accordance with law, which was as such protected by Art 36. The Government’s policy, implemented since 2004, to increase that requirement to 7 years’ residence infringed the entrenched right and therefore needed to be justified under the proportionality test. 43.This approach requires one to identify the relevant features of the pre‑existing system, recognise that a right may exist as crystallised under that system that attracts constitutional protection of Art 36, and then analyse whether that right has been infringed or restricted by a new law, policy or administrative arrangement and, if so, whether the interference with that right is permissible. 44.In this context, the present case is different from Kong Yunming in two respects. First, whereas the measure attacked in Kong Yunming concerned eligibility for a monetary form of benefit, the QPS and its refined version affect not the eligibility of applicants for PRH but their priority (both among QPS applicants inter se and relative to other applicants) in being allocated PRH units, a finite public resource that is “increasingly scarce relative to demand”.[11] 45.Further, as mentioned above, there has been no application for judicial review, instituted by the present Applicants or otherwise, to challenge the HKHA’s decision in 2005 to implement the QPS. The only challenge launched is against the Refined QPS. Despite this, there are snippets of the Applicants’ case that rely on the pre‑2005 position of one‑person applicants, such as their complaint of disparity in treatment between non‑elderly one‑person applicants and general applicants (ie families and elderly applicants). 46.In my opinion the Applicants’ approach is flawed. As outlined above, the administrative rules for the allocation of PRH to one‑person applicants in force prior to 1997 did not remain unchanged until the decisions impugned in this case. They were altered in 2005: non‑elderly one‑person applicants were segregated from other applicants on the Waiting List, and put into their own “queue”. Leaving aside the fact that the 2nd and 3rd Applicants did not apply for PRH until well after 2005, the general position after 2005 was that Hong Kong residents’ relevant right to social welfare under Art 36 found expression in the policies and administrative system put in place in 2005. 47.Contrary to the approach in Kong Yunming, neither the Applicants’ Form 86 nor their counsel’s submissions, despite my enquiry, identified the precise right which is said to be protected under Art 36 and infringed by the Revised QPS. Instead there were repeated incantations simply of their “right to social welfare”. The central submission of Mr Pun SC for the Applicants was that looking at the overall effect of the Refined QPS as a whole, there is de facto deprivation of access to PRH to QPS applicants under the age of 49, and the Refined QPS therefore infringes their “right to social welfare”. 48.There is in my view clearly no deprivation of “access” in the sense of making those persons ineligible to apply. If by deprivation of access is meant that QPS applicants had to wait a long time, during which they would age considerably, before they would be allocated a PRH unit, then it was the situation under the original QPS. Having to wait for the allocation of scarce resources depending on one’s priority under the system has always been an inherent part of the QPS and, indeed, of the Waiting List. And age is of course not a static quality but increases as time passes. Using the Applicants’ own methodology, even under the original QPS, any 18‑year‑old one‑person applicant would, upon applying, have to wait 12⅔ years[12] before reaching the score of 152 – being the lowest score for QPS applicants to be allocated a PRH unit as at 2014 (referred to in §31 above). In my view, just as it would not be to the point to speak of 18‑ to 30‑year‑olds being deprived of access to PRH under the original QPS, so it would be misleading to speak of those under the age of 49 being deprived of access under the Refined QPS. 49.Furthermore, as discussed below (§§53-56), the lowest score for allocation of PRH units is not a fixed number but changes from time to time. 50.Applying the correct approach, it may be that one can recognise the Applicants as having a relevant right under Art 36 prior to the decisions challenged, in the form of the right to be provided with PRH under the rules of the original QPS with the priority defined by those rules. The Applicants have not, however, framed their case on this basis. In my view their application fails at the very first hurdle for failing to identify properly a constitutionally protected right. In case I am wrong in this conclusion, I consider to deal with the remaining issues. VI. WHETHER THERE WAS INFRINGEMENT OF RIGHT 51.To make out a case of infringement, the Applicants took an arithmetical approach. They assumed that under the Refined QPS, an applicant would not be offered a PRH unit until he had accumulated 435 points. They adopted this figure because the HKHA had published in July 2015 that an applicant (for the Islands district) who had reached this score was being arranged for detailed vetting. The Applicants then calculated the amount of time it would take for them to reach that score. Since it would take 8.667 years and 6.167 years for the 2nd and 3rd Applicants respectively to do so (see §§32 and 34 above), they argued that they had been “effectively deprived” of access to PRH and hence the right to social welfare. 52.More generally, using the same formula, the Applicants calculated the number of years an applicant would have to wait (depending on his age when he first applied) and his eventual age before being allocated a PRH unit to be as follows:
53.Since according to this calculation, irrespective of when an applicant first applied for PRH, he would have to reach at least the age of 49.25 before accumulating 435 points, it was argued that non‑elderly one‑person applicants under 49 are effectively deprived of access to PRH. 54.The HKHA rejected the Applicants’ analysis. It attacked the Applicants’ assumption that the lowest score for an applicant to be offered a PRH unit would always be 435 points. It submitted that such lowest score would in practice vary from time to time, depending on many factors including: (i) the overall supply of PRH flats; (ii) the quota of PRH flats allocated for non‑elderly one‑person applicants; (iii) the number of new applicants joining the QPS and their age; (iv) the number of QPS applicants switching to general applicants; (v) the number of QPS applicants who were already living in PRH (eg with their parents); and (vi) the number of QPS applicants maintaining their applications and remaining eligible. 55.The HKHA also submitted that there was no basis for assuming that the refinement measures made to the QPS caused the wait to 49 years of age, and that none of the refinement measures could by themselves delay waiting time or lower priority. The HKHA further submitted that the lowest score for allocation of PRH at any one time was simply a phenomenon flowing from the operation of the Refined QPS. It was not an eligibility requirement for PRH. It did not mean that the Refined QPS fails to address the housing needs of non‑elderly one‑person applicants under the age of 49. It is inherent in a public housing system where demand exceeds supply that some applicants must wait some time before being housed. That a particular applicant or class of applicants has to wait longer does not in substance amount to a “total deprivation” of access to public housing. 56.I agree with the HKHA’s submission that the lowest score for allocation of PRH is not a fixed number but a changing parameter which can fluctuate with a whole host of other parameters. Indeed the evidence is that by September 2016 the lowest score had become 420. The figure of 435, and the calculations in the above table based on it, were but a snapshot as at July 2015. Once the figure is different from 435, the age and number of years’ waiting needed for accumulating the requisite points will be different. Using a lowest score of 420, the Applicants’ formula would produce the age of 48. There is no inherent design in the Refined QPS to exclude any class of applicants of or under any specific age. 57.It does not follow, however, that the numbers are meaningless. What they do, in my view, is to illustrate the effect of altered priority in the QPS achieved by the refinement in 2015. That there has been an alteration in priority among the applicants seems to me plain. The original QPS gave 3 points for each year of the applicant’s age above 18 upon application, but 12 points for each year of waiting within the QPS. The Refined QPS gave 9 points for the former, and a bonus of 60 points upon reaching the age of 45. Under the original QPS, every 12 years’ seniority in age was equivalent to 3 years’ waiting time. Under the Refined QPS, every 4 years’ seniority in age would balance 3 years’ waiting time. More weight was added to age under the Refined QPS. 58.The effect can be illustrated by an example. While an applicant aged 18 applying in 2005, an applicant aged 30 applying in 2008, an applicant aged 42 applying in 2011 and an applicant aged 54 applying in 2014, all had the same 120 points (and hence the same priority) under the original QPS immediately before its refinement in 2015, they had 120, 192, 264 and 396 points respectively under the Refined QPS as at 2015. Conversely, while an applicant aged 22 applying in 2008, an applicant aged 26 applying in 2011 and an applicant aged 30 applying in 2014 had respectively 96, 72 and 48 points (and hence decreasing priority) in 2015 under the original QPS, they all had the same 120 points under the Refined QPS as at 2015. 59.Accordingly I do not accept the HKHA’s submission that none of the refinement measures by themselves lowered the priority of any applicant. A key effect of the refinement was to “reshuffle” the queue in the QPS to favour the relatively more elderly. There is no information from which to gauge how many relatively young applicants have been overtaken by later but older applicants as a result of the refinement. But one of the very objects that led to the exercise was to allocate “extra points to those above the age of 45 with a view to improving their chance of gaining earlier access to PRH”[13] — in other words, to rank them higher than their existing position in the queue. 60.The number of points an applicant has under the Refined QPS does not translate into a definite waiting time which, as explained above, is a function of a group of variables. But, other things being equal, the fewer the points an applicant has relative to other applicants, the longer will be his waiting time. It is true that under the Refined QPS the ceiling for PRH flats to be allocated to non‑elderly one‑person applicants was increased from 2,000 to 2,200 per year, but an additional 200 flats in the pool are unlikely to offset the effect of lowered priority on younger applicants when the total number of applicants is over 100,000. There is insufficient material for a quantitative assessment of the precise effect of the refinement on applicants of different ages. Nor can one identify in advance a specific age that one has to attain to be allocated a PRH unit under the present system. 61.The lengthening of waiting time per se is of course not a legitimate ground for legal complaint. But to the extent that it is caused by an increase in the points allotted to older applicants under the Refined QPS, and the corresponding lowering of the priority of younger but earlier applicants, it may perhaps be recognised as a restriction on or interference with the latter’s right to social welfare as embodied in the original QPS. This, however, is not the way the Applicants have put their case. 62.As for the two Applicants themselves, the 3rd Applicant was aged 50 when these proceedings commenced so it is difficult to see how he could complain on the basis of a case that the right of QPS applicants under 49 were excluded. Moreover, as the HKHA pointed out, the 2nd and 3rd Applicants, both past 45, have received the benefit of the 60 points bonus. How their rights were infringed by the Refined QPS is not apparent. There is a hint from their individual circumstances pleaded in the Form 86 (see §§30-34 above) that they have had to wait longer as a result of the refinement to the QPS, but this is not the way the case was put. As a result there is no evidence and investigation whether, with the refinement to the QPS, they have had to wait a substantially longer period of time before being allocated a PRH unit, than they otherwise would. 63.I conclude therefore that the Applicants have also failed to make out a case of interference with their right under Art 36. Assuming I am wrong and that the Applicants have been caused by the refinement to the QPS to have to wait longer for a PRH unit and that this constitutes interference with their right, I shall deal with the proportionality analysis below. VII. PROPORTIONALITY ANALYSIS (A) General 64.The next stage of the analysis is the proportionality test, which has been recently considered in Hysan Development Co Ltd and Others v Town Planning Board (2016) 19 HKCFAR 372, in which the Court of Final Appeal, inter alia, adopted an express fourth step in the inquiry. The proportionality assessment henceforth involves a four‑stage inquiry as to: (i) whether the intrusive measure pursues a legitimate aim; (ii) if so, whether it is rationally connected with advancing that aim; (iii) whether the measure is no more than necessary for that purpose; and (iv) whether a reasonable balance has been struck between the societal benefits of the encroachment and the inroads made into the constitutionally protected rights of the individual, and in particular whether pursuit of the societal interest results in an unacceptably harsh burden on the individual: see Hysan Development, supra, at §§134–135. 65.A number of general points may be made regarding the application of this analysis in the present case:
(B) Legitimate societal aim 66.As described in §§21-28 above, the Refined QPS came about as a result of a review of Hong Kong’s housing strategy and in particular, the QPS, between 2012 and 2014. This general review and the refinement of the QPS took place against the backdrop of a sharp increase in the demand for PRH from both general applicants and non‑elderly one‑person applicants. This is shown in the table below which sets out the number of such applicants as at end of March of each year from 2009 to 2015.
67.Meanwhile, the supply of PRH units available for allocation did not substantially increase. The number of PRH units allocated to applicants on the Waiting List (ie general applicants and non‑elderly one‑person applicants) and the percentage over total proposed allocation between 2009/10 and 2015/16 may be seen from the table below.
68.The 2014 figures in the above two tables show that, against a combined demand of 248,100 applicants in the Waiting List, there was a projected supply of only 17,000 PRH flats. Demand was 14.6 times of supply. Within the QPS itself, the situation was worse: there were 126,200 non‑elderly one‑person applicants under the QPS, but only 1,360 PRH flats available (being 8% of the total for applicants in the Waiting List). Demand was 92.8 times of supply. 69.As a response to the perceived problems in the operation of the QPS, the refinements were proposed with the following aims. First, the increase in the scale of age points from 3 to 9 points per year was introduced by HKHA to reduce the inadvertent incentive for early application under the QPS as pointed out by the Director of Audit and criticised by the Public Accounts Committee of the Legislative Council (see §§25-27 above). There is no dispute that it was a proper objective for the HKHA to seek to reduce or remove this unintended incentive, which could have artificially and unnecessarily generated demand for PRH from younger applicants. 70.Secondly, a one‑off bonus of 60 points for applicants reaching the age of 45 was adopted with the express object of improving the chance for those above the age of 45 to gain earlier access to PRH. The considerations underlying this proposal were stated in the consultation document in 2013 as follows:
71.It was also noted at the time that:
72.For these reasons the Steering Committee had recommended allocating extra points to those above the age of 45 with a view to improving their chance of gaining earlier access to PRH, and progressively extending the award of additional points to those over 40 and then over 35. As a “pragmatic first step”[17], the HKHA decided to focus on those aged 45 or above in the refinement of the QPS and to propose the award of bonus points to them. 73.In my opinion what has been identified is a legitimate societal aim, ie “an aim which furthers the legitimate interests of society”: Kong Yunming, supra, at §49. 74.In Fok Chun Wa, supra, at §75(2), Ma CJ pointed out that the wide margin of discretion the courts afford to the executive and legislature in matters of socio‑economic policy applies not only to the balancing that is called for in the third stage of the justification test[18], but is relevant at all three stages. The same, it seems to me, may be said of the proportionality assessment. In other words, in assessing whether the social need and objective identified by the executive which has led to the measure in question is a legitimate one, the court recognises there is an area of judgment within which the judiciary will not interfere. Put the other way round, in this area, subject to “suspect grounds” or infringement of “core values”, the court does not readily find as illegitimate what the executive has identified to be a social need that requires to be addressed, unless the executive’s view has gone outside the range of tenable opinion on that matter. 75.The Applicants have raised a number of points which may conveniently be dealt with in this context. First, it is said that the view of the Steering Committee that non‑elderly one‑person applicants above the age of 35 had relatively limited upward mobility was based on statistics that only 7% of them had attained post‑secondary or higher education, in contrast to 47% in the case of applicants aged 35 or below. The Applicants submitted that because the majority (67%) of the 115,600 non‑elderly one‑person applicants were aged 35 or below[19], the absolute number of such applicants who had not attained post‑secondary or higher education was actually greater than the equivalent category within applicants aged above 35.[20] 76.It was also submitted that if education level was the determining factor, it would be irrational to accord priority by reference to age instead. There could be a mechanism for assessing education level which would be easy to verify. 77.Further, the Applicants referred to statistics published in July 2015[21] which suggest that of the 194,100 persons[22] living in sub‑divided units in Hong Kong, 31.0% were aged below 25, 38.6% were aged between 25 and 44, 16.0% were aged between 45 and 54, 7.9% were aged between 55 and 64 and 6.4% were aged 65 and above. In other words, about 70% of those living in sub‑divided units were under the age of 45. 78.I do not think the relevant objective is rendered illegitimate because of these points. In adopting the recommendation of the Steering Committee, the HKHA also implicitly adopted the view that non‑elderly one‑person applicants above the age of 35 had relatively limited upward mobility. The general assessment that these people as a class lagged in upward mobility compared to younger applicants cannot in my view be said to be unreasonable. Since the Steering Committee was considering the housing needs across different age segments, it was not inappropriate to refer to proportions and percentages rather than absolute numbers. It can be inferred that the Steering Committee were also aware of the absolute numbers before making its recommendation given the “stark contrast” in percentages.[23] 79.Further and more importantly, relevant to the assessment of social mobility is the fact that we are concerned with individuals who are over 35 and still fall within the eligibility requirements for PRH with regard to income and assets. Crudely put, they are individuals who, having already spent a significant portion of their working lives, are still earning no more than the very modest income limit and possess no more than the asset limit.[24] It is not unreasonable to infer, necessarily in broad and average terms, that the potential for such individuals to move up the social ladder as regards, inter alia, earnings and occupation is lower than younger applicants many of whom are students. A fortiori, the potential for eligible non‑elderly one‑person applicants aged 45 or above to improve their lot would be even more doubtful. (C) Rational connection with legitimate aim 80.Mr Pun SC submitted that the deprivation of access to PRH for non‑elderly one‑person applicants under the age of 49 is not rationally connected with the achievement of HKHA’s policy objective of meeting the housing needs of persons who cannot afford private rental housing. With respect, this is not the correct approach to the second stage of the inquiry. 81.Having identified the legitimate societal aims as being to reduce the incentive for early application under the QPS and to improve the chance for those above the age of 45 to gain earlier access to PRH, the question is whether the refinement measures for the QPS were rationally connected with the achievement of those objectives. Put this way, there can be little dispute that the Refined QPS was a rational response to the perceived social needs. It is plain that the Refined QPS has the effect of reducing the incentive for applying early because the points gained from an early application and the consequent long waiting period could be readily counter-balanced by the points arising from a higher age at the time of application. It is also obvious that the Refined QPS has the effect of improving the chance for those above 45 to be allotted PRH units compared to those below 45, in light of the 60 bonus points given to the former. Indeed it is the very complaint of the Applicants herein that the Refined QPS operates to the detriment of younger applicants, though their case is fixated on the age of 49 — a number which, as explained above, was the fortuitous product at one particular moment of the combination of different conditions which could be expected to change from time to time. (D) Whether manifestly without reasonable foundation 82.This leads to the third stage of the proportionality analysis. In a case such as the present, where the impugned measure falls within the sphere of social and economic policy, the approach that should be adopted at the third stage is to ask whether the measure in question is “manifestly without reasonable foundation”, rather than simply to apply a reasonable necessity test asking whether the measure is no more intrusive than is necessary to achieve the legitimate aim. It should be recognised however that these two standards are positions differing in degree on a continuous spectrum rather than wholly different and independent concepts: Hysan Development, supra, at §§100–104, 119–123; Fok Chun Wa, supra, at §§71 & 76. 83.Furthermore, as stated by the Court of Final Appeal in Hysan Development, supra, at §§107–118, the scope of the margin of appreciation may vary having regard to a number of factors, including:
84.In particular, as the European Court of Human Rights stated in Sentges v The Netherlands (unrep, Application no. 27677/02, 8 July 2003), “this margin of appreciation is even wider when, as in the present case, the issues involved an assessment of the priorities in the context of the allocation of limited State resources”. This was also emphasised by Ma CJ in Fok Chun Wa, supra, at §70. 85.The Applicants’ main argument is that whatever might be the merits of the new measures, they do not justify a total deprivation of access to PRH for non‑elderly one‑person applicants under the age of 49. They argued that the Steering Committee itself accepted that “singletons of age 18 to 30 with genuine housing needs should not be deprived of the opportunity to receive housing assistance”.[25] But this must be seen in context. In expressing that view, the Steering Committee was explaining why it had decided to reject the suggestion from some quarters of increasing the age of eligibility for PRH for single person to 30. Immediately after the clause quoted, the Steering Committee went on to say “even though they should continue to be accorded a lower priority than families and those older in age”. 86.The crux of the matter is that there is a very limited supply of PRH units available every year from new developments and refurbished flats surrendered by tenants[26], but a very large and increasing demand: see the two tables in §§66-67 above. How to assign PRH units is a question of allocation of finite resources by way of social welfare to eligible applicants. The HKHA gives priority to families and elderly people, who are put in the category of general applicants within the Waiting List, whereas non‑elderly one‑person applicants are put in a separate category administered under the QPS. That system had been operating since 2005 without any challenge. The changes made by the more recent decisions to the points system affected the priority among QPS applicants, by giving more weight to the relatively elderly within this group. Can these changes be said to be manifestly without reasonable foundation? 87.The Applicants complain that the effect of the Refined QPS was to exclude those aged below 49 from access to PRH as a single applicant. Leaving aside the point that there is no fixed threshold at a specific age, it is simply the effect of giving priority to more elderly applicants in the way the refinement measures had done that relatively younger applicants will have to wait longer, whilst of course themselves aging in that process. 88.One might in theory ask: Why should the bonus points for those aged 45 or above be set at 60 points? Why not 30 points instead? And why should the point for each year in age be increased from 3 to 9 points? Why not to 5, 6 or 7 points instead? 89.Adopting different numbers would affect the scores profile of QPS applicants across the board, and reshuffle the queue to a different extent. But then instead of a complaint about deprivation of access to PRH for those aged under 49, there would be complaints of deprivation of access for those below a different age. 90.More fundamentally, the court should not allow itself to be dragged into this kind of inquiry or debate. As Ma CJ said in Fok Chun Wa, supra, at §74, the approach of the court is not to try to find a better solution or alternative itself. At §75(3), the Chief Justice said:
At §75(6), his Lordship said:
91.The courts are not entrusted by the Basic Law with the function of formulating housing policies. They are not equipped to devise housing or welfare policies and examine the wide range of ramifications that such policies may entail, to make the “difficult and agonising judgments”[27] that have to be made in distributive decisions allocating PRH resources to one sector or another. In contrast, the HKHA, with the benefit of a panoramic view of the entire system and the various areas and categories of competing needs within it, and the benefit of extensive consultation with specialised bodies and interested groups and persons and with the public, is logically the body best suited to make these policy decisions. 92.The Applicants also argued that the Refined QPS went against the Steering Committee’s view that the HKHA should “progressively extend the around three‑year [average waiting time] target to non‑elderly one‑person applicants above the age of 35”.[28] This is not an accurate representation of the Steering Committee’s recommendation, which was that “consideration be given to setting out a roadmap to progressively extend the around three‑year [average waiting time] target to non‑elderly one‑person applicants above the age of 35”. In the end, although there was some support expressed for this recommendation during the consultation, it was not adopted.[29] 93.For these reasons the measures introduced by the refinement to the QPS cannot in my view be said to be manifestly without reasonable foundation. (E) Balance between societal benefits and infringement of individuals’ rights 94.Acknowledging that the first three steps in the proportionality analysis focus on the purpose of the measure in question, the Court of Final Appeal in Hysan Development, supra, at §§70–80 held that a fourth step should be expressly recognised to take account of the effect of the measure on individuals. 95.As explained in Hysan Development, supra, at §76, the fourth step in essence requires the Court
96.The Court of Final Appeal further explained (at §78) that:
97.The Court of Final Appeal also observed (at §73) that where a measure passes the first three stages, it would be unlikely to fail the fourth stage, although one may “exceptionally” find an impugned measure which passes the first three stages but whose application produces “extremely unbalanced and unfair results, oppressively imposing excessive burdens on the individuals affected”. 98.The reality here is that one is faced with a severe competition for limited social resources, of a relatively fixed quantity in the short run, to be distributed as welfare for an increasing number of needy persons. There is always some degree of “harshness” inflicted on one applicant by telling him to wait and assigning the flat to another applicant in the meantime, and vice versa. While it is difficult not to have sympathy for the Applicants and for many relatively young non‑elderly one‑person applicants who have similarly poor living conditions, one must not forget that for each PRH flat allocated to them, another applicant would have to be denied that benefit. In my opinion, the Refined QPS did not bring about a harsh burden that is so unfair on the Applicants or other QPS applicants as to fall foul of the fourth step. VIII. RIGHT TO EQUALITY 99.The Applicants’ case on the right to equality overlaps to a very large extent with their case on the right to social welfare and may be dealt with briefly having regard to the above discussions. 100.The Applicants contend that there is no obvious, relevant difference between non‑elderly one‑person applicants under the age of 49 and the other applicants on the Waiting List to justify the de facto exclusion of the former from access to PRH. On this formulation, “other applicants on the Waiting List” actually comprise (i) non‑elderly one‑person applicants of age 49 or above, who fall within the QPS; (ii) family applicants; and (iii) elderly applicants (aged 60 or above). 101.With respect, the Applicants’ case is fundamentally flawed. As explained above, there is no separate and different treatment of those under the age of 49. The number of 49 is not a fixed feature of the Refined QPS but an observed phenomenon at a particular time flowing from changing parameters. 102.The Applicants’ choice of comparators is also flawed. As explained above in §§14-16, non‑elderly one‑person applicants had been put under the QPS as a separate system in 2005. If it was said that this was discriminatory and that they should instead have been kept in the same queue in the Waiting List as family applicants and elderly applicants, then it was the decision in 2005 that the Applicants should challenge. 103.In fact, compared to the original QPS, the Refined QPS actually favours QPS applicants at the expense of family and elderly applicants in the Waiting List because the quota of PRH units for allocation under the QPS is increased from 8% to 10% with the ceiling lifted from 2,000 units to 2,200 units. 104.Accordingly it is in my view not open to the Applicants, on their present Form 86, to contend that they were discriminated against in comparison with family and elderly applicants. 105.While the Refined QPS does differentiate between those who have reached 45 and those below 45, with a bonus of 60 points being awarded to the former, both the 2nd and 3rd Applicants were already over 45 and received the bonus points when the Refined QPS first came into effect. It is difficult to see the basis for their complaint of inequality in this regard. 106.More generally, there is a relevant difference between the two groups in terms of upward social mobility, which appears to have been the main concern driving the revision of the QPS (see §§70-79 above). It is admittedly a difference in degree rather than in kind, and one may in theory ask why the line is drawn at 45 rather than, say, 39 or 48. But as Ma CJ observed in Fok Chun Wa, supra, at §73, in this context the court can take into account the need for workable rules and “reasonably bright lines”, and the administrative convenience of implementing the policy thereunder. 107.Whether this difference is sufficient to justify the difference in treatment is assessed under the justification test expounded by the Court of Final Appeal in Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335, which requires it to be established that:
108.As explained by Ma CJ in Fok Chun Wa, supra, at §58(1), the object of the exercise is ultimately to ask a simple question: “is there enough of a relevant difference between X and Y [the comparators] to justify differential treatment?” Generally the court will also have to take into account the issue of justification in considering this question: QT v Director of Immigration [2016] 2 HKLRD 583 at §24. 109.For the reasons already set out above in relation to the proportionality assessment, I consider that the 3‑step analysis is also satisfied and that the Applicants’ challenge based on the right to equality also fails. IX. SUMMARY 110.In summary, in my judgment, the Applicants have failed properly to identify their precise right which is constitutionally protected under the framework of Art 36 and to show how that right has been infringed by the Refined QPS. If and insofar as they had a right to apply for PRH with a priority arising under the original QPS and this was interfered with by their being relegated to a lower priority under the Refined QPS, I am satisfied that the refinement of the QPS pursued legitimate social aims, was rationally connected to them, was not manifestly without reasonable foundation, and did not inflict an unfairly and unacceptably harsh burden on the Applicants or other QPS applicants. 111.The Applicants’ case on equality is flawed because they wrongly adopted QPS applicants under 49 as the subject group and in referring to families and elderly persons they chose the wrong comparators. In any event, insofar as the Refined QPS draws a distinction between applicants under 45 and others, both Applicants were over 45 and the different treatment passes the justification test. X. EXTENSION OF TIME AND LEAVE 112.Having arrived at the above conclusions on the substantive merits, I consider that I should exercise my discretion against granting extension of time, and dismiss the application for leave accordingly. It is unnecessary to deal with the detailed points raised on extension of time, except to record that I do not accept Mr Pun SC’s submission that any eligible resident who has just turned 18 and applied for PRH may bring the same application for judicial review within time for the “grounds for the application first arose”[30] when he became 18. It seems to me that quite different considerations may well apply in such a case because arguably the only relevant social welfare system that has been applicable to such persons is the Refined QPS. It is however unnecessary to delve into this question. XI. DISPOSITION 113.For the reasons above, the 2nd and 3rd Applicants’ applications for extension of time and for leave to apply for judicial review are refused. 114.There will be an order nisi that the Applicants pay the HKHA the costs of these proceedings. The Applicants’ own costs are to be taxed in accordance with the Legal Aid Regulations.
Mr Hectar Pun SC and Mr Newman Lam, instructed by Tang, Wong & Chow, assigned by DLA, for the 2nd and 3rd Applicants Mr Benjamin Yu SC, Mr Abraham Chan and Mr Kenneth Wong (solicitor advocate), instructed by Woo, Kwan, Lee & Lo, for the Putative Respondent [1] Applicants may indicate their preference in terms of district. Currently, PRH estates in Hong Kong are divided into four districts, namely: (a) Urban; (b) Extended Urban; (c) New Territories; and (d) Islands. [2] Those aged 58 or above are eligible to apply for PRH under the Single Elderly Persons Priority Scheme though they must have reached 60 at the time of flat allocation. [3] Paras 5.17–5.19 of the consultation document. [4] Para 3.5 of the consultation report. [5] Paras 2.34–2.37 of the audit report. [6] Para 2.38 of the audit report. [7] Para 2.50 of the audit report. [8] Para 91 of the Public Accounts Committee’s report. [9] See Chan Yeuk Ming v Housing Authority (unrep, HCAL 25/2012, 7 September 2013) at §19. [10] Ribeiro PJ’s judgment was concurred in by Ma CJ, Tang PJ and Lord Phillips of Worth Matravers NPJ. Bokhary NPJ gave a separate concurring judgment. [11] Li Kim Ming v Hong Kong Housing Authority [2016] 3 HKLRD 592 at §15 per Au J. [12] 152 points divided by 12 points a year for waiting time. [13] As recommended by the Long Term Housing Strategy Steering Committee; see §22 above. [14] As identified in Art 22 of the Hong Kong Bill of Rights, namely: “race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status”; see Hysan Development, supra, at §111. [15] Para 5.16 of the consultation document. [16] Paras 6.7 and 6.8 of the consultation document. [17] Para 12 of the Memorandum for the Subsidised Housing Committee of the HKHA with the title “Long Term Housing Strategy - Rationalisation of Public Rental Housing Resources” - Paper No SHC 58/2014. [18] The justification test laid down in Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335 as applicable in a constitutional challenge based on the right to equality. [19] Based on data as at June 2013. [20] The Applicants have calculated that, as at June 2013, there were 41,049 non‑elderly one‑person applicants aged 35 or below who had not attained post‑secondary or higher education, and 35,478 non‑elderly one‑person applicants aged above 35 who had not attained post‑secondary or higher education. [21] Thematic Household Survey Report No 57 published by the Census and Statistics Department on “Housing conditions of sub‑divided units in Hong Kong”, based on survey conducted between June and November 2014. [22] They fell within into 85,500 households and excluded foreign domestic helpers and persons having short stay in Hong Kong. [23] §5.16 of the consultation document. [24] These limits are reviewed annually, and presumably adjusted for inflation. The evidence contains only the limits effective from 1 April 2015, which were income of HK$10,100 per month and total net assets of HK$236,000. [25] §5.19 of the Long Term Housing Strategy consultation document. [26] Redevelopment of existing PRH estates might increase supply over the long term but would reduce stock of units available for allocation in the short term. [27] Using the words of Sir Thomas Bingham MR in R v Cambridge Health Authority ex parte B [1995] 1 WLR 898 at 906E–F, quoted in Fok Chun Wa, supra, at §70. [28] §42(2) of the Applicants’ skeleton argument, quoting from §5.17 of the Long Term Housing Strategy consultation document. [29] See the Long Term Housing Strategy published by the Transport and Housing Bureau in December 2014, at §4.9. [30] RHC O 53 r 4(1). |
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