The Judicial Committee of the Privy Council Decisions

Privy Council Appeal No. 22 of 1996

 

Ng Enterprises Limited Appellant

v.

The Urban Council Respondent

 

FROM

 

THE COURT OF APPEAL OF HONG KONG

 

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JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 29th July 1996

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Present at the hearing:-

Lord Mustill

Lord Slynn of Hadley

Lord Steyn

Lord Hoffmann

  ·[Delivered by Lord Slynn of Hadley]

 

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1. This appeal from the Court of Appeal of Hong Kong raises a question of commercial importance to the appellant which has manufactured and sold "Mister Softie" ice-cream in Hong Kong from mobile vans since 1969.  It is, from the standpoint of public administration, of no less importance to the respondent, the authority responsible for the urban area, as opposed to the regional outlying districts, of Hong Kong.  The question is whether the respondent has validly removed "itinerant hawkers' licences" from the category of licences which permit hawkers to trade in the respondent's area.  If the respondent has done so validly the "Mister Softie" vans currently the subject of such licences will in due course no longer be able to sell their ice-creams as itinerants, i.e. as they move around the area.  Keith J. and the Court of Appeal by a majority (Litton V.-P. and Ching J.A.) decided that the respondent had done so; Godfrey J.A. decided that it had not.

 

2. The licensing of hawkers in Hong Kong has been the subject matter of legislation since the mid-19th century.  It is unnecessary to  trace the history of that legislation since this case turns on the Public Health and Municipal Services Ordinance 1960 (Cap. 132) as amended and particularly by Ordinance No. 60/72 and Ordinance No. 28/73, ("the Ordinance").

 

3. The relevant provisions of the legislation are as follows:-

 

4. By section 2 of the Ordinance "hawker" means:-

"(a)any person who trades in any public place -

(i)by selling or exposing for sale any goods, wares or merchandise; ...

 

(b)any person who itinerates for the purpose -

(i)of selling or exposing for sale any goods, wares or merchandise ..."

 

5. Hawkers are dealt with in sections 83 to 86D of the Ordinance.  Thus:-

"83.'Hawker offence' means an offence against section 83B or against any regulations made under section 83A.

 

83A.Regulations relating to hawkers

  (1) The Authority may make regulations for all or any of the following purposes -

(a)providing for the licensing of hawkers;

(b)providing for the classification of hawkers;

(c)restricting or prohibiting hawkers from carrying on business in any special place or area or otherwise than in any specified place or area;

(d)regulating or prohibiting the hawking of any specified commodities or services;

(e)prescribing conditions subject to which licensed hawkers may operate;

(f)providing for the employment by licensed hawkers of deputies and assistants;

(g)providing for the allocation of pitches to licensed hawkers, and for the erection by any such hawkers of stalls thereon, subject to such conditions as the Authority may specify (either generally or in any specific case);

(h)providing for the removal of hawkers and their equipment and commodities;

 

 

(i)providing for the court, on convicting a hawker of a hawker offence, to recommend to the Authority that the licence (if any) of the hawker be cancelled or suspended;

(j)(Repealed 49 of 1994 s. 18)

(k)providing for such other matters as may be necessary for the proper regulation and control of hawkers.

...

 

83AA.Authority may determine fees and charges relating to hawkers

  (1) The Authority may determine fees and charges in respect of licences of hawkers and in respect of the allocation and use of hawker pitches or stalls.

...

 

83B.Commissioner for Transport may set aside streets for hawking purposes

  (1) No person shall hawk in any street except in accordance with a licence issued under regulations made under section 83A.

...

 

  (3) Any person who contravenes subsection (1) shall be guilty of an offence."

 

6. By virtue of sections 2 and 3 of the Interpretation and General Clauses Ordinance (Cap. 1):-

"`street' and `road' mean -

(a)any highway, street, road, bridge, thoroughfare, parade, square, court, alley, lane, bridle-way, footway, passage, tunnel; and

(b)any open place, whether situate on land leased from the Crown or not, used or frequented by the public or to which the public have or are permitted to have access."

 

7. The respondent pursuant to section 83A made the Hawker (Urban Council) By-Laws on 3rd November 1972.  These provided by-law 2 that "`licence' means a licence issued under these by-laws to a person for the purposes of hawking ..." and that "a fixed-pitch hawker licence" and an "itinerant hawker licence" mean licences respectively issued under by-laws 8 and 9 of the By-Laws.  "Fixed pitch" means any pitch delineated on the

ground under by-law 27 or a pitch specified in a fixed-pitch hawker licence issued under by-law 8(1).

 

8. In addition to other matters of detail a fixed-pitch hawker licence must specify an identifying number or the approximate location of the pitch and, if the licensee has been allocated a fixed pitch, specify particulars of the location of the pitch; (by-law 8(2)(b) and (e)).

 

9. By-law 9 under the heading "Itinerant hawker licences" it was provided:-

" (1) In every case where an application for an itinerant hawker licence is granted, the Council [Urban] shall, subject to paragraph (2), issue to the applicant in such form as it thinks fit an itinerant hawker licence which authorizes the applicant to hawk in a hawker permitted area or in such places as may be specified in such licence, otherwise than from a fixed pitch."

 

10. By paragraph (3)(c) the Council may in any itinerant hawker licence "specify the areas in which the licensee may hawk".  Licences are not transferable (by-law 13) and are to expire twelve months after the date of issue unless renewed (by-law 18).  There are many other detailed provisions to which it is not necessary to refer.

 

11. The appellant's vans were in 1970 licensed as mobile shops but in 1972 the licences were issued in respect of mobile vans.  Until that time there were nine licensed vans but four more licences were issued to the company in 1974 despite the Council's policy to reduce the number of licences to which their Lordships will refer.  In 1982 the licences were transferred into the names of nominated employees of the appellant who drove the vans, the Council apparently being advised that the licences could not be issued to a limited company.  The appellant however continued to pay the licence fee.  From 1986 five of these thirteen vans were licensed by the regional council leaving eight in the urban area and it is with these that the appeal is concerned.

 

12. It is plain from the Council documents exhibited to the affirmation of Lee Kwok-kuen, an official of the Council, that for many years itinerant hawkers have been felt to create problems in the crowded, often narrow, streets of Hong Kong. There have been difficulties when licensed hawkers have helped unlicensed hawkers, thereby rendering enforcement of the licensing rules difficult, and it seems that many itinerant hawkers began to operate from a specific site without having a fixed-pitch licence.  Accordingly for traffic, environmental and law enforcement reasons,  the  Council  was  anxious to  reduce  the number  of

itinerant hawkers in the urban areas.  As early as 1970 and again in 1972 it resolved not to issue more licences.  In 1990 under its voluntary reduction scheme it offered ex gratia payments or fixed sites in order to seek to dissuade itinerant hawking.  As a result of these measures the number of itinerant hawkers licences fell substantially from 25,330 in 1972 to 19,039 in 1976 and to 3,671 in 1992.

 

13. On 19th May 1992 a working party set up by the Council recommended that the category of itinerant hawker licences should be deleted from the scheme by 1st April 1996 and that mobile vans selling ice-cream and some other products should not be exempted from this decision.  On 17th March 1993 the Market and Street Traders Select Committee of the Urban Council adopted these recommendations.  In a further effort to persuade itinerant hawkers voluntarily to surrender their licences options of converting to fixed pitch status or to market tenant status or of taking purpose built kiosks in leisure grounds or of accepting an ex gratia payment of HK$30,000 were offered.

 

14. On 15th September 1993 the Market and Street Traders Committee, after thorough consideration, resolved not to grant the appellant's application to be exempted from the decision to withdraw the itinerant hawkers' licences.

 

15. On 13th September 1994 the Hawker (Urban Council) (Amendment) (No. 3) By-Law 1994 ("the No. 3 By-Law") was adopted.  That repealed by-law 9 of the earlier by-laws and removed related references to itinerant hawker licences in other of those by-laws with effect from the date twelve months after the commencement date to be appointed by the respondent.  Existing licences might however be renewed for a further period of twelve months.  It was not intended that By-Law No. 3 should take effect before 1st April 1996 and by reason of the present proceedings has been further postponed.  By October 1994 the number of itinerant hawkers had in any event fallen to 2,253.

 

16. Before Keith J. it seems that the principal challenge by the appellant was that it was unlawful and ultra vires for the policy to be applied without any exceptions.  That contention was rejected by Keith J.  He also rejected arguments that the enactment of the By-Law in any event was ultra vires since it was outside the powers conferred by the Ordinance, was unreasonable and in restraint of trade.  He further rejected the contention that the appellant was not consulted about the policy decision to grant no exemptions since even if, which he doubted, there was any right to be consulted about the adoption of a legislative  measure,  the  appellant was sufficiently allowed to

make representations which were considered by the Council committee on 15th September 1993. He accepted that the offer of compensation to drivers rather than to the company would prejudice the company's position; he ordered that offers of compensation be withdrawn and enjoined the making of further offers to drivers of the eight vehicles.

 

17. Before their Lordships the appellant had proceeded on only one basis as expressed in paragraph 33 of their case:-

"The issue is whether the power to make regulations for hawking under s.83A of the Ordinance (i.e. both fixed-pitch and itinerant hawking as defined in s.2) includes the power to prohibit absolutely one kind of hawking recognised in the parent legislation."

 

18. The principle the appellant contends for is that a body given statutory power to regulate cannot use that power so as to prohibit entirely an activity which is recognised in the primary legislation.  This is derived from such cases as Municipal Corporation of the City of Toronto v. Virgo [1896] AC 88; Attorney-General for Ontario v. Attorney-General for the Dominion [1896] AC 348; Powell v. May [1946] K.B. 330; Co-operative Brick Co. Pty Ltd. v. Hawthorn Corporation (1909) 9 C.L.R. 301 especially at pages 307-8.  In the Virgo case the Judicial Committee of the Privy Council said at page 93:-

"It appears to their Lordships that the real question is whether under a power to pass by-laws `for regulating and governing hawkers, etc. the council may prohibit hawkers from plying their trade at all in a substantial and important portion of the city no question of any apprehended nuisance being raised.' ...

 

  No doubt the regulation and governance of a trade may involve the imposition of restrictions on its exercise both as to time and to a certain extent as to place where such restrictions are in the opinion of the public authority necessary to prevent a nuisance or for the maintenance of order.  But their Lordships think there is a marked distinction to be drawn between the prohibition or prevention of a trade and the regulation or governance of it, and indeed a power to regulate and govern seems to imply the continued existence of that which is to be regulated or governed.  An examination of other sections of the Act confirms their Lordships' view, for it shews that when the Legislature intended to give power to prevent or prohibit it did so by express words. ...

 

 

19. The language of these sub-sections  - `preventing or regulating'; `preventing or regulating and licensing' - tends to shew that the framers of the Act did not intend to include a power to prevent or prohibit in a power to regulate or govern."

 

In the Ontario case it was said at page 363:-

"A power to regulate, naturally, if not necessarily, assumes, unless it is enlarged by the context, the conservation of the thing which is to be made the subject of regulation."

 

In the Co-operative Brick case in the High Court of Australia it was said at page 308:-

"... the prohibition of the use of one part of an area for doing a specified thing does not operate as a prohibition of the thing being done at all, for it may be done elsewhere.  But it is obvious that a prohibition of quarrying or blasting within a specified place is an absolute prohibition, since from the nature of the case the operation of quarrying or blasting can only be carried on where the rock or stone is in situ naturali."

 

In Tarr v. Tarr [1973] A.C. 254 Lord Pearson, in relation to section 1 of the Matrimonial Homes Act 1967, which gave the court certain powers "regulating the exercise by either spouse of the right to occupy the dwelling house" said at page 265H:-

"There is authority in several different connections for the proposition that a power to regulate does not (unless the context so requires) include a power to prohibit."

 

20. Having considered a number of decisions he continued at page 267:-

"Thus, the word `regulating' in itself is not apt to include a power to prohibit. There is no evident reason why the draftsman should not have added the words `or prohibiting' if he meant to include a power to prohibit.  If a temporary prohibition were required, the duration could have been limited under subsection (4).  Alternatively the words `or suspending' might have been added."

 

21. The respondent contends that the cases relied on by the appellant do not apply in the present case since they deal with situations where, under a power to regulate, an attempt has been made to prohibit activities which were apart from prohibition themselves lawful.  Here they say that is not so.  Secondly, they say that regulation may itself justify some form of prohibition if it is not absolute prohibition.   They say the matter is not in issue

here. They rely on Slattery v. Naylor (1888) 13 App.Cas. 446.  There section 153 of the Municipalities Act 1867 provided that the Council might from time to time make bye-laws for (amongst other things) regulating the interment of the dead.  A bye-law prohibited interment in any existing cemetery then open for burials within 100 yards from specified buildings or other places.  It was contended, inter alia, that this bye-law was ultra vires because the Council only had power to regulate interment whereas in the cemetery in question they had wholly prohibited it. The Judicial Committee considered at pages 450-451 that prohibition might in some cases be necessary as part of effective regulation:-

"It may well be that a plot of ground, having been originally far from habitations, and suitably used as the burying-place of a family or a religious society, has been reached by the growing town, and has so become unsuitable for the purpose.  In such a case a power to regulate would be nugatory unless it involved a power to stop the burials altogether. ...

 

22. Their Lordships cannot hold that a by-law is ultra vires because, in laying down a general regulation for the Borough of Petersham, it has the effect of closing a particular cemetery."

 

23. That the "regulation of subject matter involves the continued existence of that subject matter, but is not inconsistent with an entire prohibition of some of its occasional incidents" was recognised in Tungamah Corporation v. Merrett (1912) 15 C.L.R. 407 at page 423.

 

24. Their Lordships accept that as a general rule a power to regulate an activity prima facie does not give the donee the power to prohibit the activity totally. Prohibition of an activity in part, in a particular case or in a particular way, may however as the cases show be needed for effective regulation.  The extent to which such partial prohibition is permissible depends on the terms of the power to regulate and on the context in which the power is to be operated.

 

25. In the present case whatever the position under earlier legislation in Hong Kong, it is clear that from the enactment in 1973 of section 83B of the Ordinance, hawking in any street was unlawful and a criminal offence unless the hawker had a licence issued in accordance with regulations made under section 83A.

 

26. The power to make such regulations for specified purposes was vested in the respondent for the urban area.  Those purposes are very broadly stated and they give to the authority a very wide discretion in regulating hawkers.  Under section 83A it was for the authority to devise a licensing system, as part of which they could classify hawkers into different categories, impose restrictions on the places where they might operate and limit or prohibit hawking in specified commodities or services.  In addition to the detailed powers in section 83A(1)(a) to (i) there is an overriding power in (k) to provide for "such other matters as may be necessary for the proper regulation and control of hawkers".

 

27. It is to be noted that these powers are conferred generally in relation to "hawkers" - they cover both hawkers who "trade in any public place" which indicates selling from a fixed place (which is not the traditional concept of a hawker) and a hawker who itinerates.  What is given is a power to regulate "hawkers"; there is no duty to adopt specific schemes which cover each category of hawker nor to adopt one scheme which necessarily authorises the licensing of both categories.  That power was to make regulations which provided for the licensing of all hawkers or to provide for the licensing of some only of the hawkers falling within the definition.  It was a matter for the authority to decide in the light of current conditions whether they would restrict licences to fixed pitch hawkers or to itinerant hawkers selling only particular goods or whether they would grant licences to all hawkers.

 

28. Equally just as the various conditions or limitations for hawkers may be introduced in the initial scheme of licensing, so they may be introduced or changed by way of amendment subsequently (section 28(1)(c) of the Interpretation and General Clauses Ordinance (Cap. 1)).

 

29. Thus it would have been open to the respondent, when devising the licensing scheme in the first place under section 83A, to provide for the licensing only of fixed pitch hawkers or of hawkers in specified places; it follows that even if the original scheme provided for the licensing of both categories of hawkers one of the categories could be deleted or the licence group could be limited to only certain hawkers within a category by subsequent amendment.  The fact that in some of these subparagraphs from section 83A but not in (a), (b) or (k) there is a specific reference to prohibiting certain activities does not exclude the power to change the categories of those to whom licences may be granted.

 

30. The making of By-law No. 3 which removed itinerant hawkers from the licensing scheme (and thereby rendered it an unlawful activity within section 83B of the Ordinance) in their Lordships' view thus fell within the powers conferred by section 83A(1)(a),  (b) and  (k).  This interpretation  is  in no way  in

conflict with the authorities relied on by the appellant.  Those decisions recognise that a partial prohibition may fall within the power to regulate and may indeed be necessary to achieve the object of the legislation as it was in Slattery v. Naylor (supra) and as it is here. The power to regulate "hawkers" enables some hawkers to be excluded from the licensing scheme in the interests of traffic and health and environmental considerations and to make law enforcement effective.  The position is not the same as would arise if there were a specific duty to license itinerant hawkers when a power to regulate might well exclude a power wholly to prohibit.

 

31. Thus, and without commenting on the more general proposition advanced by Sir Patrick Neill Q.C. that the cases relied on by Mr. Beloff Q.C. to distinguish prohibition from regulation only apply where the activity itself is lawful at common law or by legislation, their Lordships do not accept that the removal of itinerant hawkers from the licensing scheme amounted to a prohibition which went beyond the respondent's powers.  This is not a case where the subsidiary legislation is seeking to prohibit an activity rendered lawful by principal legislation.  On the contrary the activity is unlawful pursuant to the principal legislation unless by the grant of a licence under the respondent's scheme it is rendered lawful.

 

32. Accordingly in their Lordships' view, the majority in the Court of Appeal and the trial judge came to the right conclusion.  They will humbly advise Her Majesty that this appeal should be dismissed. The appellant must pay the respondent's costs before their Lordships' Board.

 

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