Lin Guifei, The Administratrix of the Estate of Lee Kin Wah, Deceased v. The Secretary for Home Affairs

HCAL 1102/2020

[2020] HKCFI 2888

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 1102 OF 2020

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BETWEEN

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D E C I S I O N

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INTRODUCTION

1.This is an application for leave to apply for judicial review of the decision of the public officer appointed by the Secretary for Home Affairs under the Gambling Ordinance (“the Licensing Authority”) to grant a mahjong/tin kau licence (“the New MJTK Licence”) to Lee Chi Fu on 10 September 2018.

BACKGROUND FACTS

2.Lee Kin Wah, deceased (“the Deceased”), passed away on 17 September 2016.  The Applicant is the surviving spouse of the Deceased, and Lee Chi Fu (“the Son”) is the son of the Deceased.

3.The Deceased used to be the licensee of a mahjong/tin kau licence (“MJTK Licence”) which permitted him to provide facilities for the playing of games in which mahjong/tin kau tiles were used at the premises situated at G/F, 9 Yi Pei Square, Tsuen Wan, NT (“the Premises”) under the name of “Luen Fat Mahjong Playing Co” (“Luen Fat”).  Each licence was for a fixed term or period of 12 months.  Thus:

(1)  the MJTK Licence No 003086 dated 29 November 2014 (“the 2014 Licence”) granted to the Deceased ceased to have effect on 29 November 2015; and

(2)  the MJTK Licence No 003153 dated 29 November 2015 (“the 2015 Licence”) granted to the Deceased ceased to have effect on 29 November 2016.

4.Luen Fat was a partnership business of the Deceased and some other persons originally formed pursuant to an agreement in Chinese writing dated 11 July 1973 (“the Agreement”), which I shall return to later in this decision.

5.As can be seen from the Business Registration Application Form 1(c) for “Luen Fat Mahjong Playing (聯發麻雀娛樂)” with BR No 55341740 dated 15 June 2015 and subsequent updates of the business registration records:

(1)  Luen Fat had three partners, namely, Yau Man Yick (“Yau”), Lui Chung (“Lui”) and the Deceased;

(2)  the name of the partnership business was updated to “Luen Fat Mahjong Playing Co (聯發麻雀娛樂公司)” on 8 August 2015;

(3)  the Deceased left the partnership on 17 September 2016, and the other two partners left the partnership on 31 December 2016; and

(4)  the partnership business ceased on 31 December 2016.

The cessation of business of Luen Fat on 31 December 2016 was confirmed by a “Notification of Cessation of Business” in Form IRC 3113 signed by Lui.

6.By a letter dated 16 November 2016, Bobby Tse & Co on behalf of the Son informed the Office of the Licensing Authority (“OLA”), Home Affairs Department (“HAD”), that the Deceased had passed away on 17 September 2016 and the Son wished to “take over his late father’s said Licence”.  Bobby Tse & Co also enclosed with their letter, inter alia, a completed Form 5, being an “Application for Mahjong/Tin Kau Licence” prescribed by the Gambling Regulations, Cap 148A, for a MJTK Licence in respect of the Premises in the name of “聯發麻雀娛樂公司 (Luen Fat Mahjong Playing Co)” (“New Luen Fat”).

7.OLA replied to Bobby Tse & Co by letter dated 23 December 2016 that:

(1)  a MJTK Licence was personal to the licensee and was not transferrable under the Gambling Ordinance; and

(2)  any request for “transfer” would be treated as a new application for a licence, and would be considered entirely on its own merits.

8.Thereafter, the Son’s application for a MJTK Licence proceeded in the usual manner.  Eventually, the Licensing Authority granted to the Son a MJTK Licence No 003340, ie the New MJTK Licence, on 10 September 2018.

9.On 8 January 2019, letters of administration of the estate of the Deceased was granted to the Applicant.

10.On 20 March 2019, the Applicant had a meeting with a licensing officer (“Ms Chan”) at OLA.  At that meeting, the Applicant stated that she wished to claim a MJTK Licence in respect of the Premises as the successor to the Deceased’s property.  Ms Chan explained to the Applicant that a MJTK Licence was granted to an individual and when the licensee died, the licence automatically lapsed and was not transferrable to any successor.  The following is recorded in the File Note of the meeting kept by Ms Chan:

“ Ms LIN was advised that a MJ/TK licence is granted to an individual instead of a company. When the licensee dies, the licence automatically lapses and is not transferrable to any successor.

From the conversation, it was noted that Ms LIN knew about LEE CHI FU’s application for the MJ/TK and agreed with the arrangement although she claimed that she was misled by the solicitor, who advised that she had less possibility to be a licensee as she was not yet a permanent Hong Kong resident.

Ms LIN mentioned about unresolved matters with the partners of the former Luen Fat Mahjong Company.  She was advised to seek legal advice to resolve the private dispute among them…”

11.More than one year later, by a letter dated 24 March 2020, KCL & Partners on behalf of the Applicant wrote to the Secretary stating, inter alia, the following:

“We are instructed that the Deceased, previous to the granting of the [2014 Licence], was all along the proprietor of Luen Fat and a shareholder thereof. Moreover, the Deceased at all material times was the holder of the relevant licence for Luen Fat and most recently the holder of licence no. 3086 dated 29^th November 2014.

In light of the premises, the Deceased has all along been the proper owner and proprietor of Luen Fat, and by virtue of the fact that our client is the administratrix of the Deceased’s estate, is the legal and lawful owner thereof. However, despite the same, we note that you granted the [New MJTK Licence] to Lee Chi Fu, without taking into account the Deceased’s estate for which our client is the administratrix who obviously appears to be the most suitable holder of the said Licence.

In the premises, we hereby formally request and apply to you to transfer the said Licence to our client.”

12.OLA replied to KCL & Partners by a letter dated 29 April 2020:

“Please be informed that the Mahjong/Tin Kau Licence previously granted to Mr Lee Kin Wah (‘the Licence’) was granted to him in person as licensee … Your attention is also drawn to Condition 12 of the Licence (as prescribed in Form 5A of Schedule 2 in Cap. 148A) which states that ‘The licensee shall not transfer, lend or hire this licence to any person’.

As a mahjong/tin kau licence is personal to the licensee and non-transferrable, it does not automatically pass to the deceased’s estate. Any request for transfer of the licence would be treated as a new application.

According to our records, after Mr Lee Kin Wah passed away, the Licence has lapsed and the company, Luen Fat Mahjong Playing Co (BR no.55341740), of which Mr Lee Kin Wah was one of the partners, has ceased operation in December 2016.  The new mahjong/tin kau licence granted to Mr Lee Chi Fu is not related to Mr Lee Kin Wah nor the above Luen Fat Mahjong Playing Co.”

13.On 3 June 2020, the Applicant made the present application for leave to apply for judicial review.  The only ground of judicial review raised in the Form 86, at §27, is as follows:

“the Public Officer appointed by the Secretary of HAD had failed to take into [account] all relevant considerations and took [into account] irrelevant considerations, in particular the fact that the granting of the Licence, is in effect, a transfer of the licence granted to the Deceased, to [the Son], in respect of the operation of Luen Fat”.

DISCUSSION

14.Section 22 of the Gambling Ordinance, Cap 148, so far as relevant, states as follows:

“(1) The public officer appointed by the Secretary for Home Affairs may -

(b) license premises for the playing therein of games in which mahjong or tin kau tiles are used.

(2) A licence under subsection (1) may on payment of the prescribed fee -

(b) be granted or renewed for a period of 12 months.

(3) Any such licence shall be subject to the prescribed conditions and to any other conditions which the public officer appointed by the Secretary for Home Affairs may impose.”

15.A MJTK Licence issued under s 22(1)(b) of the Gambling Ordinance is in Form 5A as prescribed in Schedule 2 to the Gambling Regulations.  Condition 12 of Form 5A provides that -

“The licensee shall not transfer, lend or hire this licence to any person.”

In other words, a MJTK Licence is personal to the licensee.

16.The whole underlying premise of the Applicant’s present application is that there was, allegedly, “a transfer of the licence granted to the Deceased, to [the Son]” (see §27 of the Form 86).  The allegation that there was a “transfer” of the licence is, however, contrary to the clear evidence before the court that the Son’s application for a MJTK Licence was treated and processed by OLA as a new application, and the New MJTK Licence eventually granted to the Son was not in any sense a transfer of the previous licence granted to the Deceased.

17.In support of the contention that there was a “transfer” of licence, the Applicant relies on the following matters (see §§17 and 18 of the Form 86):

“17  … the current operation of Luen Fat:-

(1)  operates out of the [Premises];

(2)  utilizes the same décor and name of Luen Fat; and

(3)  is operated and managed pursuant to the Agreement.

18  Viewing the above in the round, it is evident that the business that the Licence is associated with is clearly the same as Luen Fat and despite assertions to the contrary, the Licence held by [the Son] is a transfer of the mahjong/tin kau licence previously held by the Deceased contrary to all policies of the HAD.”

18.In my view, the facts and matters relied upon by the Applicant may show, at the highest, that there is some relationship or connection between the business previously carried on by the Deceased in partnership with others at the Premises in the name of “Luen Fat Mahjong Playing [Co]” and the current business carried on by the Son at the same premises under the same name.  Indeed, it appears from the Business Registration Application Form 1(c) for “Luen Fat Mahjong Playing Co (聯發麻雀娛樂公司)” with BR No 55838278 dated 27 January 2017 that New Luen Fat is also a partnership business consisting of 3 partners, namely, Yau, Lui and the Son.  None of the matters relied upon by the Applicant can, however, begin to support the allegation that there was a transfer of the Deceased’s previous licence to the Son.  The question of whether the Son is entitled to carry on the same line of business using the same name at the same premises is a matter between the Applicant, the Son and/or the other partners, but is not a matter for the Licensing Authority.

19.There are two other matters that I should briefly deal with.  First, in the Form 86, at §6, it is alleged that in the Agreement, “it was agreed that the next-of-kin of the Deceased and the relevant shareholders would enjoy and benefit from the operation of Luen Fat”.  There is, however, no provision to this effect in the Agreement.

20.Second, Mr Pang argues that the Licensing Authority failed to properly apply the “major factors” as set out in the published “Brief Policy Guidelines on Issue of Mahjong/Tin Kau Licence” (“the Policy Document”) in making the decision to grant the New MJTK Licence to the Son, thereby giving rise to a breach of legitimate expectation (see §§34-40 of Mr Pang’s Skeleton Argument dated 9 November 2020).  If this complaint is in support of the argument that there was a transfer of the licence to the Son, it is rejected for reasons stated above.  On the other hand, if this complaint is intended to challenge the actual decision made by the Licensing Authority to grant the New MJTK Licence to the Son on the ground that the Licensing Authority had failed to properly consider and apply factors (i), (ii), (iv) and/or (v) in the Policy Document (referred to by Mr Pang in his oral submissions) in determining the Son’s application, such challenge is not open to the Applicant because it is not raised in her Form 86.  Further, the Applicant has, in my view, no standing or locus to make such complaint.  I would add that, in any event, the materials before the court do not disclose any reasonable basis for the Applicant to contend that the Licensing Authority failed to properly apply the relevant factors in the Policy Document in making the decision to grant the New MJTK Licence to the Son.

21.It is clear that the Applicant has delayed substantially in making the present application on 3 June 2020.  That there was delay is recognized in §25 of the Form 86, although it was not accepted by Mr Pang at the hearing on 12 November 2020.  The Applicant’s explanation for the delay put forward in §25 of the Form 86 is that she “was [only] made aware of the salient facts, in particular after being informed by HAD that the [New MJTK Licence], despite all evidence to the contrary, is not a transfer of the mahjong/tin kau licence held by the Deceased prior to his death”.  I am unable to accept this explanation because the Applicant was aware of the New MJTK Licence granted to the Son before 20 March 2019, and was told at the meeting with Ms Chan on 20 March 2019 that the Deceased’s previous licence lapsed automatically on his death and was not transferrable to any successor. Coupled with the lack of merits in the intended application, I refuse to grant an extension of time for the Applicant to make the present application for leave to apply for judicial review.

22.In all, the intended application for judicial review is not reasonably arguable, and has no realistic prospect of success.

DISPOSITION

23.The application for leave to apply for judicial review is dismissed.

24.The principles governing an award of costs in an unsuccessful application for leave to apply for judicial review are well settled (see Leung Kwok Hung v President of the Legislative Council (No 2) (2014) 17 HKCFAR 841, at paragraph 17), and do not have to be repeated here.  I consider the Applicant should pay the costs of the Putative Respondent in this case, because (i) the application clearly lacks merits, (ii) the Applicant requested for an oral hearing of the application if leave to apply for judicial review was not granted on paper; (iii) the Putative Respondent has provided substantial and helpful assistance to the court in relation to the leave application; and (iv) the Applicant has effectively a hearing on the merits of her intended application for judicial review.  I therefore make an order that the Applicant shall pay the Putative Respondent’s costs of this application, including the costs of the hearing on 12 November 2020, to be taxed if not agreed.

Mr Ronald Pang, instructed by Franki Ho & Associates, for the Applicant

Ms Katherine Chan, Government Counsel of Department of Justice, for the Putative Respondent