Lai See
PUBLISHED : Tuesday, 19 August, 2014, 1:15am
UPDATED : Tuesday, 19 August, 2014, 1:15am

Judge Zervos calls for reform of liquor licensing process

BIO

Howard Winn has been with the South China Morning Post for two and half years after previous stints as business editor and deputy editor of The Standard, and business editor of Asia Times. His writing has also been published in the Far Eastern Economic Review, the Wall Street Journal, and the International Herald Tribune. He writes the Lai See column which focuses on the lighter side of business.
 

We are revisiting the vexed question of the licensing of bars and restaurants. The owners seem to be in a state of permanent attrition with the Liquor Licensing Board and its appellant body, the Municipal Services Appeals Board.

So it was with some interest we see Mr Justice Kevin Zervos calling for the reform of the process by which liquor licences are issued.

"When one stands back and looks at the system in place, it is understandable why it has been criticised by both applicants and objectors alike," the judge said in a recent judgment in which he granted a judicial review to Philippe Orrico and Nomad Restaurant Management against a decision by the appeals board.

Since becoming a High Court judge in September last year, Zervos has handed down a number of decisions that have been critical of both boards for being unreasonable and unfair in the way they handle licence applications and appeals.

In his latest judgment, he took this further in saying the system needed reforming. He noted a bar or restaurant has to first apply for a licence from the Food and Environmental Hygiene Department. This is essentially a technical process which requires fulfilling a list of requirements.

At this stage, there is little, if any, public participation in the process. But the applicant has to make a significant financial commitment to meet the requirements. Next is a separate application for a liquor licence, a process which involves public participation and a great deal of uncertainty.

Zervos said: "The issues tend to be whether the premises are suitable for the selling of intoxicating liquor and whether it is contrary to the public interest to grant the licence."

At this stage, the commercial operator has committed to the establishment of a licensed restaurant without knowing the level of opposition. "It then becomes a costly and protracted exercise to be eventually resolved through the processes established to deal with the licence application."

As one industry participant said: "It's like being asked to buy a Ferrari without being able to find out if you will be able to drive it."

Zervos noted that a liquor licence has to be renewed every year and can involve the applicant in litigation on each occasion. He said the appeal processes take too long to resolve disputes. Also, the appeals board differs from appellant bodies in other jurisdictions which have an "independent and permanent appellant body with permanent judicial officers establishing a body of relevant law and legal principles".

Another problem raised by Zervos is that all restaurants and bars occupy premises that have been zoned by the government for such use. This inevitably leads to tensions with residents.

He said: "It highlights the importance of public consultation and participation in the formulation of planning and zoning codes." But once approved, a planning code is intended "to provide guidance and direction for the future character and development of an area".

Zervos concluded that "overall, the system in place would benefit from reform by providing greater certainty and finality as the appropriateness and viability of a licensed establishment at particular premises".

Zervos' call for the need to reform the liquor licensing process was welcomed by lawyer Adrian Halkes, who has represented countless bar and restaurant owners over the past 20 years in their battles with the licensing and appeals boards. "Hong Kong could benefit from greater predictability in the liquor incensing system and that would make investment in Hong Kong more attractive to international operators."

Have you got any stories that Lai See should know about? E-mail them to howard.winn@scmp.com

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