Tri-view Ltd and Another v. HKSAR

FACC No. 2 of 2006

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 2 OF 2006 (CRIMINAL)

(ON APPEAL FROM HCMA NO. 511 OF 2005)

_________________

Between

____________________

Court: Chief Justice Li, Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Litton NPJ and Lord Scott of Foscote NPJ

Date of Judgment: 27 October 2006

________________________

J U D G M E N T

________________________

Chief Justice Li:

1.I agree with the judgment of Mr Justice Chan PJ.

Mr Justice Chan PJ:

Introduction

2.This appeal involves the construction of the definition of “hotel” in s.2 of the Hotel and Guesthouse Accommodation Ordinance, Cap 349 (“the Ordinance” or “HGAO”). “Hotel” (together with “guesthouse”) is defined to mean any premises whose occupier, proprietor or tenant holds out that, to the extent of his available accommodation, he will provide sleeping accommodation for any person presenting himself who appears able and willing to pay a reasonable sum for the services and facilities provided and is in a fit state to be received.

3.The appellants contend that this must be construed consistently with the common law concepts of inn and innkeeper such that the requisite holding out must be of an obligation to provide accommodation if the pre-conditions as set out in that definition are satisfied. On the other hand, the respondent argues that this statutory definition does not require the holding out of such an obligation.

The facts

4.The appellants are the owner and operator of the Hong Kong Parkview Club and Suites (“Parkview”) at Tai Tam Reservoir Road. Parkview provides serviced apartment type of accommodation which is let on a short or long term basis but day-to-day letting is also accepted.

5.In May 2004, an undercover inspector of the Office of the Licensing Authority (of the Home Affairs Department) made a reservation for a room in Parkview for one night through its website and paid for it by credit card. When the inspector turned up at Parkview on the designated date, he was received by a manager and completed certain registration procedures. Apart from a key to the room and other access cards to the club facilities, he was given a registration form together with a licence agreement which contained certain terms and conditions. When he checked out on the following day, he was informed that in future, he could also make a reservation by telephone or by contacting the manager directly. At the end of September 2004, the inspector again reserved a room at Parkview for two nights, this time by making a telephone call to the manager. On 7 October, the inspector made yet another booking for one night through the internet. Subsequently, based on these bookings, two undercover inspectors checked in at Parkview on the designated dates, were similarly received and went through similar procedures.

6.At the reception desk of Parkview, there was a notice which expressly reserved the right to refuse accommodation to any person. The terms and conditions of the licence agreement given to the guests contained a provision reserving a discretion to Parkview to terminate the licence at will without giving reasons.

7.Parkview is not licensed under s.8 or exempted from obtaining such a licence under s.6 of the Ordinance. The appellants were charged with and later convicted in the Magistrates’ Court (Mr Candy) of altogether four charges for operating or otherwise having control of an hotel without a certificate of exemption or licence, contrary to s.5 of the Ordinance. An appeal to Bokhary J was dismissed. With the leave of the Appeal Committee, the appellants now appeal to this Court on the ground that there is a question of law of great and general importance in relation to the construction of the definition of “hotel” under s.2 of the Ordinance.

The appellants’ case

8.The appellants’ case is that Parkview is not an hotel within that definition and hence does not require any exemption or licence. The reason, Mr Jeremy Barlett for the appellants submits, is that on the true construction of this statutory definition, it must be proved that there was a holding out by Parkview to the effect that it was under an obligation to provide accommodation to any person presenting himself who appears able and willing to pay a reasonable sum for the services and facilities provided and is in a fit state to be received; since Parkview had reserved a right to refuse any guest and to terminate the licence granted to him at will, there was no such holding out; consequently Parkview fell outside the definition and was not governed by the Ordinance.

9.The arguments in support of this contention run as follows:

(1) This construction, it is submitted, is consistent with the common law principles governing an inn and an innkeeper. At common law, for social policy reasons, certain duties, liabilities and rights were imposed and conferred upon a proprietor of an inn. His duties included an obligation (which counsel describes as the central obligation) to provide accommodation to any traveller who presented himself at the inn and who met certain basic requirements. There was no discretion to refuse any qualified guest.

(2) These common law concepts were adopted by and incorporated into the provisions of the Hotel Proprietors Ordinance, Cap 158 (“HPO”): an “hotel” as defined in that ordinance is deemed to be an inn and the common law duties, liabilities and rights, including the central obligation, which were attached to an innkeeper, are, subject to the modifications provided in that ordinance, also attached to a hotel proprietor.

(3) The definition of “hotel” under the HPO, it is argued, was derived from the common law and has incorporated the central obligation as part of its requirements. This definition is similar to the definitions of the same word under the HGAO and the Hotel Accommodation Tax Ordinance, Cap 348 (“HATO”). These three ordinances, counsel argues, are in pari materia since they deal with the same subject matter and this is supported by the fact that the amendment enacted by the Hotel Accommodation (Miscellaneous Provisions) Ordinance 1998 in relation to the phrase “any person presenting himself” appearing in the definition of “hotel” applies to all three ordinances. The definitions of “hotel” in these three ordinances should therefore be construed consistently.

(4) The requirement of an obligation to provide accommodation in the definition of “hotel” in the HGAO is, counsel submits, also supported by the use of the words: the proprietor holds out that he “will provide sleeping accommodation for any person”.

(5) If the wording in this definition is considered ambiguous, then this, he argues, would be contrary to the presumption against a casual change of the common law by legislation and the presumption against doubtful penalization, which oblige the court to give a meaning to the definition which favours the appellants.

(6) Finally, counsel complains that since Parkview was not considered as an hotel by the Commissioner of Rating and Valuation, it would be unfair if it is to be treated differently by another government department.

Purposes of these ordinances

10.In my view, these submissions cannot be sustained. A provision in a statute is to be construed in its context. One of the important aspects, and very often the most important aspect, in the context is the purpose for which the statute was enacted. While the three ordinances mentioned above all make provisions in relation to hotels, they were enacted at different times for different specific purposes. It is wrong to ignore this material fact in the construction exercise.

11.The HPO was enacted in 1961 and based on the English Hotel Proprietors Act 1956. Prior to this ordinance, the common law imposed certain duties on innkeepers and gave them certain rights in return. (See Lord Esher MR in Medawar v Grand Hotel Co [1891] 2 QB 11, 19-20.) The purpose of the HPO, as stated in its long title, was to “amend the law relating to inns and innkeepers”. Like the 1956 Act, it was aimed at clarifying and settling some of the difficult issues arising from the duties, liabilities and rights of an innkeeper at common law, particularly those relating to goods left with him by his guests. As modern hotels are constructed and traditional inns gradually become outdated, the HPO gives “hotel” a statutory definition (s.2) and deems an establishment which falls within that definition to be an inn. It also imposes upon the proprietor of an hotel and confers upon him the duties, liabilities and rights of an innkeeper (s.3), but modifies some of these duties, liabilities and rights by sections 4 and 5. That is what the HPO was enacted to achieve.

12.In 1965, the HATO was enacted for the purpose of imposing “tax on hotel accommodation charges” received by hotels. “Hotel” is defined in that ordinance in similar but not identical terms. The emphasis is on an hotel proprietor’s liability to tax in relation to the accommodation provided by him.

13.The purpose of the HGAO is entirely different from those of the other two ordinances. It was enacted in 1991 following a number of accidents occurring in substandard hotels and guesthouses. The purpose as stated in its long title is “to provide for the regulation, control and safety of hotel and guesthouse accommodation”. An hotel or a guesthouse which falls within the definition in s.2 requires to be licensed unless it is either excluded by an order made under s. 3 (i.e. in the case of premises which are let for a minimum period of 28 continuous days) or granted a certificate of exemption under s.6. In order to obtain a licence under s.8, the premises must comply with all requirements relating to matters such as design, structure, fire precautions, health, sanitation and safety. Thus it is clear that the requirement of a licence and indeed the whole licensing regime is to ensure that premises which are used to provide sleeping accommodation to guests who meet the prescribed conditions comply with certain specified standards in relation to these matters. In this connection, it is important to note that “hotel” in s.2 of the HGAO is defined in relation to “premises” whereas “hotel” in the other two ordinances is defined in relation to the “establishment”. Further, the HGAO imposes the duty to comply with the safety and other relevant standards not only on the proprietors but also occupiers and tenants of these premises. By way of contrast, the HPO and the HATO affect only proprietors. It is also interesting to note that the Chinese term for the combined definition of “hotel” and “guesthouse” in the Ordinance (旅館) is not the same as that for the definition of “hotel” in the HPO and the HATO (酒店). These differences strongly suggest that the provisions in these ordinances apply in different contexts and that the HGAO is intended to have a wider application than the other two ordinances.

14.The purposes of these three ordinances being so different, it is therefore difficult to say that they are in pari materia (at least for the purpose of this appeal) or that the legislature when enacting the HGAO intended to borrow the word “hotel” or adopt the same meaning for this word from earlier statutes. The legislature sometimes adopts one meaning to achieve one purpose but another meaning to achieve another purpose. The fact that the Commissioner of Rating and Valuation takes a particular view on certain provisions in the Rating Ordinance, Cap 116, throws absolutely no light on the construction of “hotel” in the HGAO.

15.The amendment in 1998 was introduced as a result of the case of R v Triview Ltd [1996] 2 HKCLR 42 to plug the loophole that was apparently considered to exist in the phrase “any person presenting himself” which is used in the definition of “hotel” in all three ordinances. The fact that this amendment applies across the board to all these ordinances does not assist the appellants on the point in issue.

Meaning of “hotel” under s.2 of HGAO

16.In my view, in construing the word “hotel” in s.2 of the HGAO, it is necessary to bear in mind that the context for this Ordinance is not the same as those in relation to the other two ordinances: the Ordinance serves a completely different purpose and the wording is not identical. Whether the definition of “hotel” in the HPO has or has not incorporated the central obligation to provide accommodation to any guest for the purposes of that ordinance is not relevant. Section 3 of the HPO does not assist the appellants either. That section applies only to hotels which are within the definition of the HPO. There is no similar provision in the HGAO and nothing in this Ordinance suggests that in construing its provisions, s.3 of the HPO applies.

17.As discussed above, the purpose of the HGAO is to ensure that premises which are used to provide sleeping accommodation to guests who satisfy the prescribed conditions must comply with the required safety and other relevant standards. That being the case, the existence of a right to refuse or even the fact that such right might have been exercised from time to time is irrelevant. So long as there are occasions on which the premises would be used to provide sleeping accommodation to members of the public who satisfy the prescribed conditions, there is no good reason why such premises should not be required to comply with the same standards. To construe the definition in such a way so that it covers only premises in respect of which the occupier, proprietor or tenant has an obligation to provide accommodation but not premises in respect of which the occupier, proprietor or tenant has reserved a right or discretion to turn people away is just contrary to the spirit and intention of the statute. Guests in the latter type of premises need protection as much as those in the former type of premises.  In my view, it is not appropriate to construe the definition of “hotel” under s.2 of this Ordinance as requiring an obligation to provide accommodation, thus allowing proprietors to get round the effect of the Ordinance by the reservation of a right or discretion. 

18.Construing the definition of “hotel” in the HGAO in its proper context, I take the view that the holding out by a proprietor refers to a representation by him to the public in whatever form that he would provide accommodation to any person presenting himself who satisfies the prescribed conditions. It involves the holding out of merely an intention to provide accommodation and not an obligation to do so. Premises whose occupier, proprietor or tenant holds out such an intention fall within the definition of “hotel” under s.2 and are subject to the control and regulation of the relevant authority under the Ordinance. It is clear that the legislature intended by the definition in the HGAO to cast a wide net and cover all premises intended to be used to accommodate guests. This being the clear intention of the legislation, there is no room for the application of the presumptions referred to in counsel’s submissions.

19.This construction is also supported by the fact that “hotel” and “guesthouse” are defined together and are assigned the same meaning. At common law, the owner of a guesthouse, as opposed to the proprietor of an inn or a hotel, had control over the choice of his lodgers and was not under an obligation to admit any person. (See the comments of Lord Thankerton in Railway Assessment Authority v Great Western Railway Co [1948] AC 234, 238.) The fact that the definition draws no distinction between an hotel and a guesthouse undermines the submission that the definition incorporates an obligation to provide accommodation to any person.

Conclusion

20.For the reasons discussed above, I am of the view that both the magistrate and the judge were right in their construction of the definition of “hotel” in this Ordinance. On the facts of this case, Parkview did fall within this definition. The notice at the reception desk and the terms of the licence agreement provided to guests were irrelevant. In the absence of a certificate of exemption or a licence, the appellants had contravened s.5 of the Ordinance. They were rightly convicted. This appeal must therefore be dismissed with costs.

Mr Justice Ribeiro PJ:

21.I agree with the judgment of Mr Justice Chan PJ.

Mr Justice Litton NPJ:

22.I agree with the judgment of Mr Justice Chan PJ.

Lord Scott of Foscote NPJ:

23.I agree with the judgment of Mr Justice Chan PJ.

Chief Justice Li:

24.The Court unanimously dismisses the appeal with costs.

Mr Jeremy Barlett (instructed by Messrs Hastings & Co.) for the appellants

Mr Cheung Wai-sun and Ms Winnie Lam (of the Department of Justice) for the respondent