KOON PING LEUNG v. THE DIRECTOR OF LANDS

HCAL 14/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 14 OF 2011

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BETWEEN

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J U D G M E N T

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1.  In this application for judicial review, the Applicant as an indigenous villager of the Pak Ngau Shek Sheung Tsuen (白牛石上村) in Tai Po challenged the decision of the District Lands Officer [“DLO”] in a letter dated 24 December 2010 rejecting his application for a Small House Grant under the Small House Policy. The DLO did not reject his application altogether. What the DLO refused was his application for the grant of a plot of Government land by way of private treaty grant to enable the Applicant to build a small house. The DLO informed the Applicant in the letter that he could still apply for permission to build a small house on a piece of private land owned solely by him.

2.  The Small House Policy [“the Policy”] was implemented by the Government since 1972 to enable eligible indigenous villager to erect a small house for himself during his lifetime on suitable site within his village.  It is an administrative policy instead of a statutory scheme.  For the purposes of the present proceedings, parties placed before the court the following documents in respect of the Policy[1],

(a) A Policy Handbook published by the Lands Department in June 2001 providing guidance to applicants as to how to make applications under the Policy;

(b) A set of internal instructions called NTA Small House Instruction No. 3, copied from BLD 152/4070/88. 

3.  These are only secondary documents and the Respondent did not produce to the court the primary policy document setting out the full terms of the policy by which it was implemented.  Though the Handbook provides helpful guidelines to applicants, it is also described at the introduction section as a brief outline and further details can be obtained from the respective District Lands Office. As regards the internal instructions, the document does not purport to deal with each and every aspect of the Policy.

4.  Be that as it may, it is abundantly clear from the evidence before the court that in respect of an applicant who wishes to apply for construction of a small house on Government land through a private treaty grant, the Policy requires the applicant to be either living in Hong Kong or to satisfy the DLO that he intends to return and reside in his village.  This is expressly spelt out at para. (e) of the Explanatory Notes in the Handbook and para. 7 of Instruction No. 3.  I shall call this the Residence Requirement.  Though the Applicant alluded to the absence of any reference to this requirement in other government documents[2], I do not think those documents intended to be read as the full and comprehensive statements of the Small House Policy.

5.  In the present case, the DLO rejected the application for private treaty grant because the Applicant was (and still is) living outside Hong Kong and there was no concrete evidence of his intention to return to live in Hong Kong on a permanent basis.  Though the Applicant gave a Hong Kong address in his application dated 26 March 2007 and his Form 86, he is actually living in Australia.  Amongst his evidence placed before this court, there is a statutory declaration made by him on 29 October 2006 declaring his current and permanent address to be an address in Victoria.  Further, with his consent, the DLO obtained his movement records which showed that between 1 March 2005 and 12 March 2010 the Applicant spent a total of 57 days in Hong Kong (41 days in 2007 and 16 days in 2008). 

6.  At the hearing, the Applicant told this court that he could not satisfy the Residence Requirement because he had to receive medical treatment in Australia under an Australian statutory regime, a benefit which he would not be able to enjoy if he were to return to Hong Kong. 

7.  The Applicant challenged the legality of the Residence Requirement under the Policy [“the legality challenges”] as well as the application of the Residence Requirement by the DLO in this instance [“the application challenges”].

8.  In respect of the legality challenges, the Applicant relied on Articles 35, 40 and 80 of the Basic Law.  It was his submission that the Residence Requirement contravened Article 40 of the Basic Law which protects the lawful traditional rights and interests of indigenous villagers.  Further, he contended that the determination of his eligibility by the DLO infringed his right of access to court under Article 35 and the designation of the court as the organ for exercising judicial power under Article 80.

9.  In respect of the application challenges, the Applicant contended that the DLO failed to give him adequate opportunity to present his case, failed to give adequate reasons for his decision and reached a decision which is perverse.

10.  The Respondent refuted these challenges.  Further, Mr Chan (appearing for the Respondent) contended that the decision of the DLO is not amenable to judicial review in accordance with a line of cases following the Privy Council decision in Hang Wah Chong v AG [1981] HKLR 336.

Is the decision of the DLO amenable to judicial review?

11.  The Hang Wah Chong line of cases concern the question whether a challenge to the decision of the Director of Lands in respect of modification of the terms of a Government Lease can be mounted by way of judicial review.  Comprehensive discussions of the relevant cases can be found in the judgment of Hartmann J (as he then was) in Rank Profit Industries v Director of Lands [2007] 2 HKC 168 and the judgment of A Cheung J (as he then was) in Anderson Asphalt v Secretary for Justice [2009] 3 HKLRD 215.  As recently confirmed by the Court of Appeal in Anderson Asphalt v Secretary for Justice [2010] 5 HKLRD 490, in such context, the law in Hong Kong is that such decision of the Director, being decision made in the capacity as land agent for the Government, even though carried with it an element of planning, is a decision made within a contractual context and the Director is at liberty to come to a decision in the same manner as other landlord in the property market.  If there were any disputes arising from such decision, it has to be litigated by way of private law contractual dispute (with reference to the terms of the lease, including implied terms) instead of judicial review.

12.  There is another line of cases which have come to be identified as special purpose lease cases where the court held that decisions on renewal or extension of Government leases for special purpose were amenable to judicial review: Hong Kong and China Gas v Director of Lands [1997] HKLRD 1291 and Kam Lan Koon v Secretary for Justice [1999] 3 HKC 591.

13.  In Anderson Asphalt v Secretary for Justice [2010] 5 HKLRD 490, the Court of Appeal did not regard these special purpose lease cases as wrongly decided.  Rather, they were held to be distinguishable on the basis that there was sufficient public element in those decisions to render them amenable to judicial review.

14.  A Cheung J in Anderson Asphalt summarized the principles derived from the earlier cases at para. 57 of the judgment reported at [2009] 3 HKLRD 215.  A similar analysis was applied by the Court of Appeal at paras. 58 to 60 of [2010] 5 HKLRD 490 with reference to the source and nature of the power in question and the function performed by the decision maker.  Ultimately, as A Cheung J observed, what is sufficient to render a decision amenable to judicial review is a matter of fact and degree and there cannot be any hard and fast rule.  In borderline cases, it is very much a matter of overall impression. To the same effect is the observation of Lord Woolf in Poplar Housing Association v Donoghue [2002] QB 48 at para. 66,

“Whilst these are the most important factors in coming to our conclusion, it is desirable to step back and look at the situation as a whole. As is the position on applications for judicial review, there is no clear demarcation line which can be drawn between public and private bodies and functions. In a borderline case … the decision is very much one of fact and degree.”

In the same paragraph, Lord Woolf further observed that a decision maker may exercise different functions and it is possible that some of its functions are subject to judicial review but some not. 

15.  It should also be mentioned that in respect of decisions of Housing Authority to evict tenants of public housing, notwithstanding that the decisions were made as landlord, our courts have consistently held that such decisions are amenable to judicial review: see e.g. Chan Chiu Wah v Housing Authority HCAL 88 of 2010, 11 May 2011; Wan Yung Sang v Hong Kong Housing Authority HCAL 135 of 2009, 6 July 2011.  This have some bearing in the present context because it is accepted by Mr Chan that the Small House Policy had its origin in the Government’s effort to cater for the housing needs of the indigenous villagers in the New Territories.  In that respect, there is an analogy with the function served by the public housing scheme administered by the Housing Authority.

16.  The amenability issue was raised before A Cheung J in another case concerning the Small House Policy in Treasure Spot Finance Co Ltd v Director of Lands HCAL 72 of 2004, 21 March 2005.  His Lordship did not decide the issue and simply noted that there were reasonable arguments both ways.  That case concerns the revocation of building licence due to the delay on the part of the indigenous villager to comply with the deadline for construction of a small house.  The nature of that decision is different from the one I am now dealing with.

17.  Here I am concerned with the decision of the DLO on the grant of Government land by way of private treaty grant under the Small House Policy.  As far as this particular aspect is concerned, it is my view that the decision has sufficient public character to render it amenable to judicial review: the DLO carried out a public function in making decision under a published policy of the Government  dealing with the housing needs of the indigenous villagers of the New Territories[3]. Though the source of power is different, the Small House Policy intends to meet similar needs of members of the public as the public housing scheme.  Admittedly, the solutions offered are different: an indigenous villager who obtains a private treaty grant can build on a piece of Government land at his own costs a small house for his residence whilst a public housing tenant only gets a tenancy in a public housing estate.  But that does not detract from the public character of the function exercised by the DLO in this regard.

18.  Though the Small House Policy is non-statutory and the DLO can properly be described as acting as the land agent of the Government in making decision under the Policy, I do not think one can draw a parallel with the decision of the Director of Lands in modification of Government Lease.  As observed by Lord Woolf, the same entity may exercise functions of different characters.  In the present context, I do not think the labeling of the DLO as the land agent of the Government can be conclusive on the amenability issue: as demonstrated by the special purpose lease cases, there are cases where decisions would be amenable to judicial review though the Director of Lands acted as land agent.

19.  A fundamental difference between the type of decision under discussion and a decision with respect to modification of Government Lease is that in the latter case there is a contractual context governing the matter and the court has to ask whether there is any scope for a further fetter by way of judicial review over the contractual right of the Government as landlord.  The same cannot be said in respect of a decision on an application for Government land under the Small House Policy.  The concern of the Court of Appeal at para. 60 in Anderson Asphalt[4]  would not arise in the present context.  There is no contract between the Applicant and the Government and if the matter is not amenable to judicial review, it is difficult to see what private law remedies he can seek.

20.  Mr Chan submitted that leaving the Applicant with no remedy is neither here nor there because the Government, in par with a private landlord, was not obliged to grant any benefit to the Applicant.  I cannot accept this submission.  Bearing in mind the history leading to the implementation of the Small House Policy[5] and the function that it intended to serve, there is a strong public element in its due administration which distinguishes the role of the Government from that of a private landlord. 

21.  Whilst I have no difficulty with the proposition that the existence of a town-planning element in a decision may not be sufficient to turn it into a public law decision, the decision of the DLO in the present case did not simply predicate upon town planning consideration.  As I have explained, the Small House Policy also pays regard to the housing needs of indigenous villagers.  This is reflected in the following features in the Policy,

(a) The objective of the Policy, as stated in the Explanatory Notes of the Handbook, is to allow an indigenous villager to apply for permission to erect for himself during his lifetime a small house on suitable site within his own village.  The Chinese version of the Notes spells out explicitly that the small house should be used as the villager’s own residence: “旨在讓原居村民得以一生一次向當局申請批准, 在其所屬的鄉村内的合適土地, 建造一所小型屋宇自住。”

(b) Thus, an applicant can only be eligible for one small house grant.  This is also stated in the eligibility criteria.

(c) The Residence Requirement.

(d) The requirement in respect of application over private land that an applicant must be the sole owner of the land and he must state in his statutory declaration that he had not transferred the land to someone else.

(e)     Alienation restrictions contained in the small house grants.

22.  In conclusion, there is sufficient public element in a decision of the DLO on the grant of Government Land under the Small House Policy to render it amenable to judicial review.

The legality challenges

23.  Apart from citing Article 40 of the Basic Law and stating that he is an indigenous villager making an application under the Small House Policy, the Applicant did not explain in his Form 86 or his evidence why the decision of the DLO constituted an infringement of his right under Article 40.  In his skeleton submissions, he primarily relied on a dicta of Chief Justice Li in Chan Wah v Hang Hau Rural Committee (2000) 3 HKCFAR 459 at p. 477,

“There is no doubt that the lawful traditional rights and interests of the indigenous inhabitants are protected by art. 40. One is not concerned here with a comprehensive definition of the rights and interests within art. 40. It is not disputed that they include various property rights and interests such as exemption from Government rent and rates in respect of certain properties held by indigenous villagers and benefits relating to land granted to male indigenous inhabitants under what is known as the small house policy. The question is whether one could derive the political rights contended for from the lawful traditional rights and interests of the indigenous inhabitants within art. 40.”

24.  Chan Wah was a case about the voting rights of non-indigenous villagers and women in a village representative election.  It has nothing to do with the rights of an indigenous villager under the Small House Policy.  Thus, the dicta of the Chief Justice in respect of the benefit under the small house policy is obiter.  Though it would command respect, it is not binding as a matter of law.

25.  Since the rights under the Small House Policy were not in issue in that case, there was no in-depth discussion in that judgment as to the relationship between the Small House Policy and the lawful traditional rights and interests of indigenous inhabitants.  If one reads the dicta carefully, the Chief Justice only recorded what was not disputed between the parties in that particular case. On the facts and issues raised in that case, the court did not find it necessary to discuss comprehensively what constitutes lawful traditional rights and interests of indigenous inhabitants under Article 40.

26.  One must not assume that all the rights afforded to an indigenous inhabitant under the Small House Policy come within the scope of Article 40.  As mentioned, the Small House Policy was only implemented by the Government in 1972 and Professor Johannes Chan advanced a forceful argument in his book, Law of the Hong Kong Constitution, that the traditional rights and interests under Article 40 should be confined to rights and interests traceable to rights of the indigenous inhabitants in 1898 when the New Territories was leased to the British Government[6].

27.  Professor Chan analysed the different rights under the Small House Policy and drew a distinction between the right to build on one’s own land and the acquisition of Government land to build a small house.  He concluded that the latter right cannot be traceable to any right of indigenous inhabitant in 1898 and therefore it cannot be within the scope of Article 40.  Further, by reason of the inherent discriminatory nature of the Small House Policy, insofar as it is not justifiable as protection of traditional rights of indigenous inhabitants, the Professor opined that the Policy is unlawful.

28.  Confronted with the analysis of Professor Chan (relied upon by Mr Chan), the Applicant told this court that he could not seriously dispute the same.  However, he maintained his reliance on the dicta in Chan Wah to support his case on Article 40.

29.  As I have explained, the dicta in Chan Wah in respect of rights under the Small House Policy was a mere passing remark as to the position adopted by the parties in that case where the focus was on some other issues.  With the greatest respect, I do not consider such dicta to be determinative of the issue that I have to adjudicate in the present case.

30.  Notwithstanding the persuasiveness of the analysis of Professor Chan, I am mindful that the Applicant is acting in person and he did not put forward any effective arguments to rebut that analysis.  Further, some important materials Professor Chan referred to were not placed before me.  I am also mindful of the wide general public importance of a court’s decision on the relationship between the Small House Policy and Article 40.  With these considerations in mind, I do not think it is satisfactory for me to express a concluded view in this judgment.

31.  Instead, I can dispose of the Applicant’s challenge based on Article 40 on a simple basis: the Applicant has not demonstrated that as indigenous inhabitant he had any traditional right to use land not owned by him to build a small house for his inhabitation.  On the materials before the court, a male descendant of an indigenous inhabitant did not have any right to demand the Government to give him land to build a small house prior to 1972.  Even assuming (contrary to the analysis of Professor Chan) that all the rights of an indigenous inhabitant under the Small House Policy are within the scope of Article 40, any right to demand Government land for the building of small house must be prescribed by the terms of the Small House Policy.  It therefore follows the Applicant cannot argue that he was given less than his due under Article 40 because of the Residence Requirement in the Small House Policy.  As indigenous inhabitant, he never had any greater right in terms of getting a piece of Government land by private treaty grant than those given to him under that Policy (and thus subject to the Residence Requirement).

32.  Therefore, the Applicant’s challenge based on Article 40 must be rejected.

33.  Turning the challenge based on Articles 35 and 80, the argument of the Applicant premised on his contention that these Articles require the determination of small house grants by a court of law as opposed to an administrative body.  He submitted that the DLO cannot be above the law and an aggrieved applicant must have recourse to the court.

34.  I do not accept that the decision of the DLO could be set aside on these grounds.  The Applicant does have recourse to a court of law: as I have held above, the decision of the DLO is amenable to judicial review.  However, it is a misconception that access to court means the court must adjudicate on all matters pertaining to an administrative matter.  As I have explained in my judgment in Lee Yee Shing Jacky v Board of Review HCAL 40 of 2008, 22 Feb 2011, Article 85 referred to the exercise of judicial power.  An administrative body determining an administrative matter may need to resolve some factual or even legal issues.  But that would not turn the process before such body into a judicial process and the administrative body does not exercise judicial power.  The court exercises supervisory jurisdiction over such administrative decision by way of judicial review.  For present purposes, it suffices for me to reiterate what I said at para. 79 in that case,

“…in the consideration of the substance of a resident’s constitutional right of access to the courts as enshrined in Article 35 of the Basic Law and buttressed by Article 80, the first question to be asked is in what manner the exercise of the judicial power of the state should be involved regarding the subject matter at hand. If the primary decision is, upon proper analysis, in substance an exercise of original judicial power of the state, an exercise of such power by a body other than the courts of law is prima facie a curtailment of the constitutional right. Such curtailment would then have to be justified under the proportionality test laid down in Solicitor v Law Society of Hong Kong (2003) 6 HKCFAR 570 and recently applied in Charles Mok v Tam Wai Ho FACV 8 of 2010, 13 Dec 2010. On the other hand, if the primary decision is an administrative one, the constitutional right of access to the courts manifests itself in the form of the exercise by the court of its supervisory jurisdiction through judicial review. It is then for the court to decide on the facts and circumstances in each case the extent to which the court could intervene (including intervention on the basis of errors of material facts). …”

35.  In the present case, plainly the DLO exercised an administrative power instead of performing a judicial function.  There is no contravention of Article 80.  As the Applicant can challenge the administrative decision by way of judicial review, the right of access to court guaranteed by Article 35 is not compromised.  There is no question of the DLO acting above the law.

36.  Thus, all the legality challenges fail.

The application challenges

37.  Before I discuss the application challenges set out in the Form 86 and the evidence, I must deal with a point raised by the Applicant at the hearing which hitherto had not been canvassed.  As I mentioned, the Applicant accepted at the hearing that he could not satisfy the Residence Requirement.  He however contended that the Small House Policy should be applied with flexibility to cater for exceptional cases like his where an indigenous villager is unable to return to live at the village due to his need to receive long term overseas medical treatment.

38.  Since the point had not been raised before (whether before the DLO or in the Form 86 and the Applicant’s evidence), the Respondent did not file any evidence to meet such argument, in particular whether there should be exceptional consideration in such circumstances. Thus, it would not be fair to allow such a point to be taken belatedly.

39.  In any event, in my view, the point is devoid of any merit.  The Small House Policy is implemented to cater for the housing needs of indigenous villager.  If an overseas villager has no intention to come back to live at the village, he has no housing need for a small house.  I fail to see why the Government should provide for such eventuality by way of exception to the Residence Requirement.  This is particularly true when, as argued by Mr Chan, there is a shortage of Government land suitable for the building of small houses in the villages and demands of indigenous villagers are growing.

40.  The Applicant said he intended to build a small house to provide accommodation to his mother.  But that cannot bring him within the scope of the Small House Policy and he had not adduced any credible evidence to suggest that there is a traditional right to such effect.

41.  Turning now to the application challenges advanced in the Form 86, they can broadly be summarized as follows,

(a) The DLO failed to give him an adequate opportunity to adduce evidence on the Residence Requirement;

(b) The DLO failed to give adequate reasons for his decision;

(c) The DLO came to a finding unsupported by evidence or otherwise perverse.

42.  The letter of the DLO of 24 December 2010 clearly pinpointed the failure to satisfy the Residence Requirement as the reason for rejecting his application.  In the light of the Applicant’s concession at the hearing that he could not satisfy the Residence Requirement, once I reject the legality challenges and his submission as to exceptional circumstances, there is simply no viable claim by the Applicant to any entitlement under the Small House Policy.  Against such background, as a matter of discretion, this court would not grant any relief in his favour by way of judicial review since it would be a futile exercise to require the DLO to reconsider the application.

43.  I will therefore only deal with these application challenges briefly.  In his evidence, the Applicant referred to a telephone conversation he had with a Mr Kwong at the District Lands Office in 2009.  He said he was told by this Mr Kwong that he needed not worry about his inability to come back to Hong Kong due to his medical treatment.  It was suggested that he could explain at the interview that he was a retiree.

44.  Mr Kwong made an affirmation denying such allegations.  He said though he could not recall precisely what he told the Applicant over the phone, his practice was to follow strictly what was written in the Small House Policy, including the Residence Requirement.

45.  I do not see any reason why Mr Kwong should choose to mislead the Applicant.  Be that as it may, for present purposes, it is not necessary to resolve this conflict in the evidence.  The interview of the Applicant took place on 20 April 2010.  Prior to that, on 1 March 2010, the DLO reminded the Applicant by email as to the Residency Requirement.  On 2 March 2010, the Applicant replied by saying that he was aware of the requirement and he would produce all his evidence in that respect.  The Applicant was also aware that the DLO would obtain movement records from the Immigration Department as he was told about it at the interview.  The Applicant must be taken to know what such records would reveal in terms of his residence in Hong Kong.

46.  The Handbook clearly stated that the burden was on the Applicant to satisfy the DLO that he intended to come back to Hong Kong to live at the village.  He did not produce any cogent evidence to the DLO.  Having regard to the course of dealings between the Applicant and the DLO and what was set out in the Handbook and the correspondence in the emails in 2010, I do not see any ground for complaint in terms of reasonable opportunity to present his case.  The Applicant had had ample time and opportunity to put forward whatever he deemed necessary to satisfy the Residence Requirement.  His difficulty lies in his inability to satisfy such requirement.

47.  In relation to the reasons given by the DLO, this is not a case where complicated issues had to be decided by the decision maker.  On the Residence Requirement, the Applicant had simply failed to produce any credible evidence to satisfy the same.  The certificate of retirement produced by him did not prove anything with regard to his intention to return to live in Hong Kong.  The movement records clearly showed that he did not live in Hong Kong.  Against such background, I regard the reasons spelt out in the letter of 24 December 2010 as adequate.

48.  It also follows from what I said above that the decision cannot be regarded as unreasonable or perverse. 

Other miscellaneous points

49.  The Applicant also raised some other points in his Form 86 which, on analysis, have no real bearing on the outcome of these proceedings.  Apparently, at para. (7) of his Grounds set out in the Form 86 and para. 27 of his first affidavit, the Applicant labored under the misapprehension that the letter of 11 January 2011 was dispositive of an appeal under the Small House Policy.  That letter was actually a reply in relation to the Applicant’s complaint to the Ombudsman regarding the delay of the DLO in processing his case.  The delay was a matter to be regretted and the DLO accepted responsibility for the same.  However, it does not advance the merit of the Applicant’s case in having the decision of the DLO set aside in the present application for judicial review.

50.  The Applicant’s complaint as to the fetter on pursuing an appeal under the Policy is also not pertinent to the merit of his challenge to the decision of the DLO.  There is no public law requirement that the Applicant must have an absolute right of administrative appeal.  In the light of the objective of the Policy, the requirement that an appeal must have the endorsement of the relevant Rural Committee cannot be said to be unreasonable.  In any event, having account for the lack of redress by way of appeal, the Applicant could seek leave for judicial review.  As explained above, there is no infringement of the rights of the Applicant under Article 35 of the Basic Law.

51.  By a letter dated 22 December 2012, the Applicant indicated he would ask for leave to amend his Form 86.  He has not issued a summons to seek leave.  Most of the proposed amendments are minor changes in terms of formulation of his grounds and they were sufficiently addressed in the other parts of this judgment.  He also sought to raise two new grounds at the new paras. 11 and 12.  The Respondent objected to these new grounds.  The invocation of the Immigration Ordinance cannot assist the Applicant in respect of his application under the Small House Policy.  Paragraph 12, as explained by the Applicant at the hearing, does not add any substance to his case.  I do not see any point in granting leave for unarguable amendments.

Result

52.  The application is dismissed.  I order the Applicant to pay the Respondent’s costs, such costs to be taxed if not agreed.