International Construction Law Review
CORRESPONDENT’S REPORTS: JUDICIAL REVIEW CHALLENGES TO THE DECISIONS OF GOVERNMENT BODIES IN HONG KONG
DAVID BATESON AND SONIA TAME
Mallesons Stephen Jaques, Hong Kong
INTRODUCTION
Government bodies in Hong Kong operate a number of schemes regulating the way in which they contract outwork to the private sector. “Falling foul” of those schemes can have a severe economic effect on contractors. There have been a number of recent cases in Hong Kong in which an aggrieved contractor (or would-be contractor) has sought to challenge the operation of those schemes and the decisions made by government bodies which hinder the contractor’s ability to get or tender for government work.
In each of the recent cases reviewed below, the contractor’s application for judicial review has been unsuccessful. The Hong Kong courts have generally taken the view that the particular decision challenged was purely commercial and not amenable to judicial review. However, the courts recognise that there are some instances where the Hong Kong courts will intervene to aid aggrieved contractors.
Summary of relevant principles
The following principles can be derived from the recent cases:
- Decisions made or actions taken by a public body in Hong Kong are amenable to judicial review on the grounds of unlawfulness, irrationality and procedural unfairness providing that the decision has been made or the action taken by the public body in exercise of its public law functions.
- Generally, matters relating to tendering required by a public body are not subject to public law.
- If an applicant cannot establish that the relevant exercise of powers by a public body can be categorised as carrying out a public law function and there is no direct statutory underpinning to the exercise of the powers, Hong Kong courts will not entertain an application for judicial review in the absence of fraud, corruption or bad faith.
- Where a government body is carrying out a purely commercial function, contractors aggrieved by the way in which the function is carried out can be left without public law remedies even where the procedures adopted or the decisions made by a public body seem unfair.
There is no universal rule governing when a public body will be considered to be exercising private as compared with public functions and each case must be judged on its own merits. However, the cases referred to below usefully illustrate the circumstances in which the Hong Kong courts are likely to view the functions exercised by government bodies as purely commercial and not amenable to challenge by judicial review.
Review of the recent cases
1 Kwok & Chu (a firm) v. The Hong Kong Housing Authority 1
Background facts
1.1 The applicant was a firm of solicitors which was aggrieved by the Housing Authority’s refusal to place it on a panel of solicitors eligible to undertake conveyancing under the Home Ownership Scheme. The firm was rejected because it did not exactly meet the fixed criteria set and inflexibly applied by the Housing Authority in choosing firms to be included on the panel.
1.2 The firm accepted that the Housing Authority was entitled to adopt policies which guide the exercise of the Authority’s discretion, provided that the policies enable it to make exceptions, to respond flexibly to unusual situations, and to act fairly in individual cases. The Housing Authority contended that its decision to apply the fixed criteria without exception is not one that is reviewable by the court.
Findings
1.3 Keith J agreed with the Housing Authority that its decision was not amenable to judicial review. In the course of his judgment, Keith J stated:
“In my view, the engagement of solicitors to undertake conveyancing under the Home Ownership Scheme does not come within the public functions of the Authority. It is merely an administrative step, albeit an important one, in the lengthy and complicated process by which low-cost housing is provided to the public. The conveyancing which has to be performed to achieve that is not the subject of any statutory underpinning any greater than that which applies to private sector conveyancing. Nor are there any statutory restrictions on which firms the Authority can engage…”
It follows that in engaging solicitors to undertake conveyancing under the Home Ownership Scheme the Authority is no different from any other developer that engages solicitors to undertake the conveyancing to which its developments relate. Such developers can choose whichever firms of solicitors they want. It would be illogical if the
[2001
The International Construction Law Review
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