SUEN SUN YAU alias SUN TING SHU v. WONG WAI KWAN AND OTHERS

1987, M.P. No. 385

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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JUDGMENT

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1. Wong Wai Tsak Tong (the "Tong") is the registered owner of almost ninety per cent of all the private land on Cheung Chau Island under a Block Crown Lease dated 18th March 1905. That Crown Lease runs till three days before the end of June 1997 and is registered in the Land Office. The Tong, in its turn, has sub-leased most of that land.   In all, the Tong has made something like five hundred such sub-leases. Most of those sub-leases are for a term of five years, renewable on the same terms until the termination of the Crown Lease three days before the end of June 1997. The plaintiff was such a sub-lessee. Two pieces of land were let by the Tong to the plaintiff in this way. One of those pieces of land was known as Lot 18, and the other as Lot 22. Both those pieces of land had been in the plaintiff's family for many years. It was as long ago as 1909 that the plaintiff's father became the Tong's lessee of Lot 18, and in 1927 he became the lessee of Lot 22. The five year subleases under which the plaintiff's father held were always registered in the Land Office.

2. In 1949, the plaintiff was registered as his father's successor to the sub-leases of the two Lots.

3. The rent charged for Lot 18 when first sub-leased in 1905 was $4.80 and for Lot 22 the figure was $1.50. Since the sub-leases were for five year periods, renewable on the same terms, the rent has always remained the same.

4. The last time the plaintiff registered a lease for each of the two Lots was on the 19th April 1983. The entries then made on the register in the Land Office on the plaintiff's behalf were for five year leases back dated to run from the 7th November 1979 for both Lots. The leases then registered were made in Form E of the Schedule to the New Territories Ordinance, Cap.97. All those leases stated was that the Tong had leased to the plaintiff Lot 18 at a rent of $4.80 per annum and Lot 22 at a rent of $1.50 per annum for a term of five years from the 7th November 1979 renewable on the same terms until the termination of the Crown Lease.

5. By virtue of S. 28 of the New Territories Ordinance, various convenants by the Tong and the plaintiff were implied in those leases. I now set out S. 28 to show what those covenants were :-

6. Although the New Territories Ordinance was repealed by the Conveyancing and Property Ordinance, Cap.219 on the 1st November 1984, the same convenants would be implied in any renewal of the leases for a further five years since the renewal was to be on the same terms as the last five year lease.

7. When the leases fell due for renewal on the 7th November 1984, neither the plaintiff nor the Tong took any steps to execute a new five year lease or to make a further entry in the register in the Land Office for either Lot. The failure to take those steps was of no significance insofar as matters stood between the Tong and the plaintiff. Because the plaintiff remained in occupation of the land and paid his rent to the Tong whenever it fell due, he continued as the Tong's lessee after the 7th November 1984, and could call on the Tong at any time for the execution of a new five year lease with effect from the 7th November 1984, such new lease then being registrable.

8. On the 25th February 1985, a notice appeared in the Hong Kong Government Gazette to the effect that Lots 18 and 22 were to be resumed under the Crown Lands Resumption Ordinance, Cap.124 (the "Ordinance") with effect from the 6th June 1985. No issue arises as to the adequacy of the notice for that resumption, it being common ground that Lots 18 and 22 reverted to the Crown on 6th June 1985. On that date, by virtue of S. 5 of the Ordinance, "..... all the rights of the owner, his assigns or representatives and of any other person in or over the land or any part thereof shall absolutely cease". Thus, on the 6th June 1985 all the rights of the Tong and the plaintiff over Lots 18 and 22 ceased.

9. "Owner" is defined in S. 2 of the Ordinance to mean:-

"

the person registered or entitled to be registered in the Land Office in respect of any land sought to be resumed, or, if such person is absent from the Colony, or cannot be found, or is bankrupt or dead, his agent or representative in the Colony;"

It is common ground that the plaintiff was an "owner" because, although the registration of his last five year lease had expired on the 7th November 1984, he was, nonetheless, someone "entitled to be registered in the Land Office". There is a wealth of authority to the effect that someone in the plaintiff's position with an option to renew a lease who remains in possession and continues to pay his rent, as the plaintiff did, is entitled to be registered. Thus, both the Tong and the plaintiff were owners.

10. By virtue of S. 2 of the Crown Lands Resumption Ordinance, the "Authority" is defined to mean the Director of Buildings and Lands.

11. On the 12th June 1985 a letter was sent on behalf of the Authority to the Tong, as a former owner of Lots 18 and 22, offering to pay the Tong a total of $1,406,138.50 in full settlement of all its claims against the Hong Kong Government arising from the resumption. That was an offer under S. 6(1) of the Ordinance. I will now set out the whole of S. 6:-

12. That letter of 12th June 1985 went on to explain to the Tong that it should advise the Authority within 28 days from the 12th June 1985 whether it accepted the offer of compensation, but if it failed so to advise, the offer would automatically lapse and be deemed withdrawn.

13. As I have said, the plaintiff also qualified as an "owner" for the purposes of the Ordinance. He, too, should have received a letter from the Authority within 28 days from the 6th June 1985 (i.e. the date of resumption), either offering him compensation under S. 6(1)(a) or else serving him with a notice under (b) requiring him to submit his claim for compensation. Instead, the letter dated 12th June 1985 to the Tong was merely copied to the plaintiff.

14. Had he been so minded, the plaintiff might immediately have taken the Authority to court, seeking an order of mandamus directing the Authority either to make the plaintiff an offer of compensation under S.6 (1)(a) or else to serve a notice on him under (b). An application of that nature would have been by way of judicial review. Such applications have to be made speedily if they are to have any hope of succeeding. The plaintiff has never sought judicial review.

15. Although the plaintiff never received the advantages conferred by S. 6 of the Ordinance, that by no means meant that no avenue was open to him to claim compensation for the resumption of the lands of which he was a Crown sub-leasee. He had S. 8 of the Ordinance to fall back on. That is a safety net provision which allows any one who has not received a written offer of compensation under S. 6(1)(a), or not been served with a notice under 6(1)(b), to, nonetheless, submit a claim for compensation to the Authority. I will now set out S. 8 :-

"     8.   (1)    Any person claiming compensation by reason of the resumption of any land under this Ordinance, and being a person who has not been offered in writing compensation under section 6(1)(a), or has not been served with a notice under section 6(1)(b), may submit a claim in writing to the Authority stating the nature of his estate or interest in the land and the amount which he seeks to recover.

   (2)   If any such person and the Authority do not agree as to the amount of compensation (if any) to be paid either party may submit the claim to the Lands Tribunal for determination of the amount of compensation (if any) to be paid.

   (3)    A person claiming compensation under subsection (1) shall submit his claim to the Authority within a period of l year from the date on which the land reverted to the Crown under section 5 or within such further period as the Governor may allow in any case.

  (4)    A claim submitted by a person under subsection (1), in respect of land resumed under an order made under section 3 on or after the commencement of the Crown Lands Resumption (Amendment) Ordinance 1984, may include a claim for any costs or remuneration reasonably incurred or paid by that person in employing persons to act in a professional capacity in connexion with such claim."

16. Probably the existence of S. 8 explains why the plaintiff never sought judicial review under S. 6.

17. The Tong allowed the Authority's offer of compensation contained in the letter of 12th June 1985 to lapse. And neither the Tong nor the Authority has yet made a reference to the Lands Tribunal under S. 6(3) of the Ordinance for the determination of the compensation payable to the Tong.

18. By letters dated 3rd February 1986 and 12th March 1986, the plaintiff made claims on the Authority under S. 8(1) of the Ordinance. Those two letters were characterised as claims for compensation under S. 8 of the Ordinance in a letter dated 14th July 1986 from the plaintiff's solicitor to the Authority. In his letters dated 3rd February 1986 and 12th March 1986, to which I have just referred, the plaintiff expressed the view to the Authority that, in the plaintiff's opinion, the Tong was entitled to no more than a nominal $100 for the resumption of its interest, whereas he was entitled to the $1,406,138.50 (less the nominal $100) previously offered by the Authority to the Tong.

19. By a letter dated 7th April 1986, the Authority asserted that the plaintiff's sub-lease had expired in November 1984.  (In parenthesis, I make the comment that the Authority must have based that on what his officers saw on the face of the register in the Land Office.) The Authority then went on to explain that in view of what appeared on the register the offer of compensation had been made to the Tong alone. Apart from denying that the plaintiff might be entitled to compensation for the resumption, the Authority went on to say "Should you consider that you have an interest in the lots I would strongly advise you to seek legal advice to pursue this matter"

20. The plaintiff did take legal advice. Already I have referred to his solicitor's letter of the 14th July 1986 to the Authority. That letter observed that the plaintiff had already "made his claim for compensation for the purposes of S. 8 of the Crown Lands Resumption Ordinance".  The writer of that letter then went into a long disquisition on why the plaintiff had fallen within S. 6(1) of the Ordinance as someone "having an estate or interest in the land immediately before reversion under an instrument registered in the Land Office". That was of no more than historical and academic interest because the plaintiff was making his claim under S. 8 of the Ordinance. For the purposes of S. 8, all that the plaintiff needed to show was that he had an estate or interest in the land, regardless of whether it was under an Instrument registered in the Land Office.

21. The next letter of any significance is one dated 15th October 1986 from the Attorney General to the plaintiff's solicitor. That pointed out that the plaintiff and the Tong had been unable to agree on how the lump sum of ex gratia compensation which the Authority was prepared to offer should be apportioned between them. He then went on to make the sensible suggestion that he intended to initiate proceedings by way of two applications to the Lands Tribunal pursuant to S. 6(3)(a) and S. 8(2) of the Ordinance for determination of the respective amounts due to the Tong and the plaintiff. At this point, it is convenient to observe that the Tong and the plaintiff each had a separate claim for the value of its or his individual interest.  An explanation of how each claimant for resumption compensation has a separate claim is to be found in His Honour, Judge Cruden's seminal work "Land Compensation and Valuation Law in Hong Kong" at pages 64 and 65.  The Attorney General, in his letter, then went on to state that the consolidation of the applications would be sought subsequently. Provision for such consolidation is found in S. 10(1)(c) of the Lands Tribunal Ordinance, Cap.17.

22. That letter from the Attorney General elicited a positive response from the plaintiff's solicitor Who replied to the Attorney General by letter dated 17th October 1986, saying he would be grateful if the Attorney General would make the necessary application to the Lands Tribunal in respect of the plaintiff's claim as soon as possible, and if the application was not made before the end of October, he would advise the plaintiff to make the application himself.

23. There were attempts betwen the plaintiff and the Tong to try to reach an agreement as to the apportionment of the $1,406,138.50 which the Authority in practice allowed to remain on offer as total compensation for the two Lots. I have already described how on 12th March 1986 the plaintiff had formed an opinion that the Tong's total interest in the land should not be valued at more than $100. That figure was arrived at on the basis that the total fixed ground rent receivable by the Tong, without right of revision, was $5.85 per annum. (Actually, the total was $6.30 per annum, made up of $4,80 for Lot 18 and $1.50 for Lot 22 but the plaintiff erroneously believed the rent for Lot 22 to be only $1.05 at the time he made his calculation.) Assuming an interest rate of 6% per annum, the plaintiff calculated the number of years of purchase required to produce a capital sum, yielding $5.85 per annum. That number of years of purchase was 16.6667. Multiplying $5.85 by 16.6667 gave a result of $97.50. The plaintiff rounded that up to $100. According to that formula, then, the Tong should, in the plaintiff's eyes, get only $100 from the Authority in respect of the resumption of the two Lots.

24. The plaintiff's valuation formula concentrated on the Tong's ground rent, to the exclusion of all else.

25. The Tong, though, does not accept the validity of that approach. In the same way that the plaintiff is entitled to his opinion on how a valuation should be made, the Tong, too, is entitled to its ideas about what is the appropriate valuation method.

26. In an endeavour to reach a settlement, the plaintiff's solicitor, by a letter dated 3rd November 1986 to the Tong's solicitor, had not insisted that the Tong should recognise that its interest in the exgratia payment should be limited to $100, but, instead, had offered to apportion the ex gratia payment on the basis that the Tong would receive $20,000. That prompted a reply from the Tong's solicitor, by letter dated 13th November 1986, in which the Tong's solicitor voiced his notion of the proper valuation approach. The Tong's solicitor explained that in surrender and regrant cases, where the Tong still would retain an interest in the regrant lot, the established practice was for the Tong to receive 10% of the premimum from the sub-lessee as the consideration for the Tong giving its consent to such a regrant. As the present case involved absolute resumption with the result that the Tong's interest in the Lots was totally extinguished, the Tong was of the view that it was entitled to a rate above 10% of the compensation money. How far above 10% was made clear in the Tong's letter to the plaintiff's solicitor on 29th November 1986 : the Tong considered itself entitled to 51% of the ex gratia payment being offered as the total value for the two Lots.

27. Thus, both the plaintiff and the Tong were engaged in playing the compensation game together, with the plaintiff saying the Tong was really only entitled to $100 of the $1,406,138.50 ex gratia payment on offer, whilst the Tong contended its entitlement was, in effect, over $700,000.

28. Up to this point, the plaintiff, the Tong and the Authority had all conducted themselves in accordance with the scheme of things to be found in the Ordinance. There was the point, of course, that the Authority had not made an offer to the plaintiff as, strictly speaking, it should have done under S. 6(1) of the Ordinance, but no harm was done, because the plaintiff then fell back on his right under S. 8 of the Ordinance. With the plaintiff's solicitor's letter of the 29th November 1986 to the Tong's solicitor things started to go wrong.

29. As already explained, each claimant under the Ordinance has a separate claim for the value of his individual interest. Thus, the plaintiff and the Tong each had a separate claim against the Authority. Neither the plaintiff nor the Tong had a claim against each other. Claims for compensation for resumption are purely statutory. There is nothing in the Ordinance, nor in any other ordinance, which affords the plaintiff or the Tong an action against the other in respect of resumption compensation. The matter is dealt with in S. 9 of the Ordinance which is as follows:-

"

9.         Subject to the provisions of this Ordinance no action or suit shall lie against the Crown or against any other person for any loss or damage suffereby any person as the result of the resumption of any land under this Ordinance."

30. If, as happened here, the plaintiff and the Tong tried to reach an agreement as to the apportionment of an ex gratia payment that was perfectly all right, but, unless they did in fact reach agreement, neither had any right against the other. The only right each of them had was a separate one against the Authority to claim compensation. Despite this situation, the plaintiff's solicitor's letter of 29th November 1986 to the Tong's solicitor was to the effect that the plaintiff was about to commence proceedings against the Tong. The plaintiff's solicitor asked the Tong's solicitor whether the latter had instructions to accept service on behalf of the Tong. The Tong's solicitor must have wondered what those proceedings might be since the Tong had never for one moment questioned that the plaintiff was its lessee. And there was no other justiciable issue between them.

31. Although the plaintiff's solicitor's letter of the 29th November 1986 did contain a portent of what ultimately was to go wrong, the next item of correspondence from the plaintiff's solicitor, namely a letter dated 5th December 1986 to the Attorney General, copied to the Tong's solicitor, was still more or less consistent with the plaintiff's solicitor paying regard to the scheme of resumption compensation laid down in the Ordinance. The plaintiff's solicitor in that letter wrote that unless the plaintiff's offer to the Tong to apportion the ex gratia compensation monies was accepted on the basis of the Tong receiving no more than $20,000, he would make the necessary application to the Lands Tribunal. If the plaintiff's solicitor had done what he had said he was going to do in that letter of 5th December 1986, namely make an application to the Lands Tribunal, the complications which led to the present proceedings before me would never have arisen.

32. The response which the Attorney General made to the plaintiff's solicitor's letter of the 5th December 1986 was entirely correct. That response, embodied in a letter dated 23rd December 1986, pointed out that the manner of apportionment of any ex gratia payment that would be made had to be primarily agreed between the plaintiff and the Tong. The Attorney General went on to explain that, immediately upon reference to the Lands Tribunal, the government would withdraw the ex gratia offer of compensation, and then valuation of the respective interests of the claimants would be on a purely statutory basis.

33. The letter which introduced chaos into what, up to that point, had been a completely straightforward claim for compensation under the Ordinance came from the Authority (not the Director of Buildings and Lands personally but one of his representatives) on 22nd January 1987. It was addressed to the plaintiff's solicitors and copied to the Tong's solicitors.

34. That letter started off all right, pointing out, quite correctly, that it appeared neither the plaintiff nor the Tong could agree on the apportionment of the compensation money. Then comes a sentence introducing a chimera which has bededevilled this case ever since. That sentence reads "The problem between the parties is more related to the extent of the interests of both the Tong and the plaintiff in the land prior to its reversion on the 6th June 1985". The words "the e xtent of the interests of both the Tong and the plaintiff" are the villains of the piece.

35. From that sentence about the problem between the parties being related to the extent of their interests, the Authority in his next paragraph, then went on to conjure up the idea that there was a disputed question of title in issue which would need to be resolved by the High Court. I set out that paragraph :-

36. Neither up to that point, nor since, has there been any issue as to title between the plaintiff and the Tong, the Tong acknowledging at every turn that the plaintiff is its lessee under a five year lease renewable on the same terms. Neither had' the Authority questioned the plaintiff's title. Even though, initially, the Authority did not treat the plaintiff as an "owner" for the purposes of S. 6 of the Ordinance, the Authority never disputed that the plaintiff was a sub-lessee, albeit unregistered. Up to its letter of 22nd January 1987, the Authority had dealt with the plaintiff as a sub-lessee entitled to make an application to the Lands Tribunal under S. 8 of the Ordinance,

37. Even if the Authority had questioned whether the plaintiff had an estate in the land as sub-lessee, that, in my view, was still an issue to be determined by the Lands Tribunal.

38. The case of Tsang Hung v. Secretary for the New Territories⁽¹⁾ covers the situation where each of several persons put himself forward as the true owner of a particular estate or interest in land.  In such circumstances, according to the judgment of Mr. President Power, (as he then was), in the Tsang Hung^(l) case, those competing claims for the same estate or interest should not be left to the Lands Tribunal for resolution, but should instead be referred to the High Court.

39. Apart from the plaintiff, no one is claiming to be entitled to the sub-lease of the land with which the present case is concerned.

40. Were there a dispute between the Authority and the plaintiff as to whether he is a sub-lessee, then the Lands Tribunal is wholly competent to resolve that issue in the absence of any other claimant to the plaintiff's estate in the land.  Tong Kwong Hong Co. Ltd. v. Director of Public Works⁽²⁾ is authority for that proposition. In that case, the Crown actively disputed whether the claimant, who was a licensee of the land, had an estate or interest in the land for the purpose of grounding a claim under the Ordinance. In his judgment in that case, Mr. President Barnett, (as he then was), held that the claimant's licence was of the irrevocable variety which carried with it an interest in land. Having thus disposed of the title question between the claimant and the Crown, the Lands Tribunal then went on to award compensation.

41. On behalf of the plaintiff, it was urged upon me that the Tsang Hung⁽¹⁾ and the Tong Kwong Hong Co. Ltd⁽²⁾ cases were in conflict, and that I should rule that Tong Kwong Hong Co. Ltd. was wrongfully decided, so that, wherever there was a dispute between the Crown and a claimant about title, it should always be reserved to the High Court.

42. I perceive no conflict between the Tsang Hung⁽¹⁾ and the Tong Kwong Hong Co. Ltd.⁽²⁾cases. The former deals with the situation where multiple claimants dispute the same estate of interest, whereas the latter deals with the entirely different situation where there is only the one claimant but his title is disputed by the Crown. I can see no reason why a dispute as to title between the Crown and the one claimant should not be resolved by the Lands Tribunal. It makes no sense to force such a claimant to run off first to the High Court and then the Lands Tribunal when the Lands Tribunal by itself is quite capable of dealing with such an issue. In practice, the Lands Tribunal always sits with either the President, who is the Chief Justice, or a presiding officer Who is a District Judge. Can anyone seriously suggest it is not within the competence of such people to resolve a dispute as to title between the Crown and a claimant?

43. The irony of the case before me is there is not even a dispute as to title between the Crown and the plaintiffs, as far as I am aware.

44. The concept of "the extent of the interests" of the parties in the land is one of the Authority's own creation. Nowhere does it feature in the Ordinance. On the other hand, S.8(1) of the Ordinance does refer to "the nature of" a claimant's estate or interest. I will set out S. 8(l) again :-

"

    8.     (1)   Any person claiming compensation. by reason of the resumption of any land under this Ordinance, and being a person who has not been offered in writing compensation under section 6(1)(a), or has not been served with a notice under seetion 6(1)(b), may submit a claim in writing to the Authority stating the nature of his estate or interest in the land and the amount which he seeks to recover:"

45. The nature of an estate or interest could involve questions of title, whereas the extent of an estate or interest relates solely to questions of compensation. By wrongly associating the idea of the extent of the interests" with the issue of title in the letter of 22nd January 1987, the Authority has helped create a mare's nest.

46. It is probably unnecessary to make such an obvious point, but, for the removal of all doubt, I will make the observation that the word "interests" in the "extent of the interests" is used in a different sense from "interest" in "estate or interest". "Estate or interest" is a term of art well known to lawyers in the context of land transactions.

47. In the present case, the plaintiff has an "estate" in the land comprising the two Lots, namely a lease from the Tong. An "interest" in such a context would be some lesser right over the land such as, for example, a right to graze cattle or pick fruit on the land.  Tong Kwong Hong Co. Ltd.'s⁽²⁾ case was also an example of an "interest" less than an "estate" : there the claimant had a licence coupled with an "interest" in the land.

48. In the context of "estate or interest", the fact in the present case that the plaintiff clearly has an "estate", means that the question whether he has an "interest" simply never arises. The greater ("estate") includes the less ("interest").

49. By this process of elimination, it is demonstrated that "interests" in "the extent of the interests" has nothing to do with "estate or interest" in the present case. The only scope remaining for "interests" when employed in this phrase "the extent of the "interests" must be in the realm of compensation. The realm of compensation belongs exclusively to the Lands Tribuanl. In such circumstances, any quest for "the extent of the interests" can lead only to the Lands Tribunal, not the High Court as suggested by the Authority's letter of 22nd January 1987.

50. Since the Authority's letter of the 22nd January 1987, the plaintiff's claim has gone completely off the rails. The Attorney General (not personally but through Crown Counsel) allowed himself to be infected by the misconceived approach adopted in the Authority's letter of 22nd January 1987. By his letter dated 6th February 1987 to the plaintiff's solicitor, the Attorney General expressed himself as being in agreement with the Authority's letter of 22nd January 1987. In the Authority's letter of the 22nd January 1987, the words "extent of the interests" had been used in the sense of title.  The words underwent a subtle transformation in the' Attorney General's letter of 6th February 1987. In his third paragraph, he wrote as follows :-

"

Unless your client and the Tong can agree on the extent of their respective interests and consequently the apportionment of the compensation money, further negotiations would be a mere Waste of time."

There, by "the extent of their respective interests" the Attorney General could not have been speaking about title, because there was no disagreement between the plaintiff and the Tong on title. The only disagreement between the plaintiff and the Tong was as to the value of each one's interest. The valuation of such interests is the exclusive domain of the Lands Tribunal. The Attorney General's final paragraph was as follows :-.

"

Since the parties have failed to agree on any of the matters despite protracted negotiations, I believe that it would be prudent to commence proceedings in the High Court as suggested."

All that the parties had failed to agree on was the value to be placed on each one's interest. There was no failure to agree that the Tong was the Crown Lessee, and that the plaintiff the Tong's lessee. In such circumstances, there was nothing for the High Court to decide.

51. The next one to be led astray was the plaintiff's solicitor. Previously, he had recognised the Lands Tribunal as the correct venue. Now, by his letter dated 7th February 1987 to the Attorney General he states :-

"

We agree that it will be more desirable to have the matter sorted out in the High Court and we shall commence proceedings very shortly."

The last paragraph of that letter portrays the type of muddled thinking which has overcome this case since the Authority's letter of the 22nd January 1987. That last paragraph is as follows :-

"

In the last paragraph of your letter dated 23rd December 1986, you mentioned that the ex-gratin offer of compensation would be withdrawn upon reference to the Lands Tribunal. We should be grateful if you would confirm that this will not be the case where the rights to compensation are being sought in the High Court."

The short comment to be made about that paragraph is that the High Court is not the place to seek "rights to compensation". The determination of such rights is within the exclusive domain of the Lands Tribunal.

52. As foreshadowed in the plaintiff's solicitor's letter of 7th February 1987, the plaintiff issued an originating summons in the High Court on 24th February 1987. The Tong was made 1st defendant, and the Attorney General the 2nd defendant. Three declarations in identical terms were sought in respect of Lot 18 and Lot 22. I will just set out the declarations sought in respect of Lot 18 :-

"

.... a declaration that (a) the Plaintiff is a person having an estate or interest in Cheung Chau Lot 18 Section B (the said Lot 18) immediately before reversion to the Crown on the 6th June 1985 within the meaning of Section 8 and Section 6 of the Crown Lands Resumption Ordinance, Cap.124; and (b) the Plaintiff is entitled to a five yearly tenancy of the said Lot 18 on the same terms from 7th November 1984 until the expiration of the Crown Lease; and (c) as to the extent of such interest."

It can be seen that under (c), the bewitching words "the extent of such interest" have crept into the declaratory relief sought.

53. One person to keep his head once the idea was planted in the plaintiff's head to go seeking a declaration from the High Court as to "the extent of such interest" was the Tong's solicitor. By letter dated 20th March 1987, the Tong's solicitor made the following points to the plaintiff's solicitor :-

"

We refer to your above proceedings in the High Court seeking declarations that your client is a person having an estate or interest within Sections 6 and 8 of the Crown Lands Resumption Ordinance ("the Ordinance") and as to the extent of such interest.

We are instructed to write to you to point out that our client has so far accepted and indeed never disputed the fact that your client is the sub-lessee of our client, the registered owner of the land concerned. In short, the fact that your client has a compensatable interest under the Ordinance is not and has never been in dispute.

In the circumstances, we are of the view that proceedings should have been commenced in the Lands Tribunal. In this connection, we would like to draw your attention to the Attorney General's letter of 15th October 1986 and the proposed applications outlined by him in paragraph 4 of the said letter. We believe the proposed applications in the Lands Tribunal should be the correct procedure to follow to determine the quantum of compensation due to each of the parties.

We have therefore been advised by Counsel that your present application is an abuse of the process of the Court and have instructions to apply to strike out the same unless it is discontinued within the next 14 days."

54. By a summons dated 31st March 1987, the Tong sought to strike out the plaintiff's originating summons on the ground that it was an abuse of the process of the court. Before that summons to strike out was heard, the plaintiff consented to the Attorney General being disjoined as a defendant to the originating summons. That disjoining of the Attorney General had been preceded by a letter dated 26th March 1987 from the plaintiff's solicitor to the Attorney General. That letter made assertions in consecutive sentences which call for comment. Those two sentences are :-

"

This application was only intitiated when the letter of 7th April 1986 the District Lands Officer, Islands took the view that our client was not a person who had an estate or interest in the land immediately before reversion. That letter states that the Government is retaining compensation money until the dispute between the Tong and our client is resolved."

By "This application", the plaintiff's solicitor was clearly referring to the originating summons. It strikes me as somewhat disingenuous to make out that the originating summons was only initiated because of the letter of 7th April 1986. After the letter of 7th April 1986, the plaintiff's solicitor had enlightened the District Lands Officer, Islands (the Authority),as to how the plaintiff had been a sub-lessee at the time of the resumption. Thereafter, the Authority never challenged what the plaintiff's solicitor had said about the plaintiff's estate. Moreover, the plaintiff was all set to go to the fateful letter of 22nd January 1987 from the Authority.  It was because the plaintiff's the Lands Tribunal prior to 1987 from the Authority solicitor accepted the misguided advice in that letter of 22nd January 1987 that he made an application by way of originating summons in the High Court. Rather than a cause, the District Lands Officer, Islands' letter of 7th April 1986 is merely part of the surrounding circumstances leading up to the originating summons.

55. The second sentence, with its reference to "the dispute between the Tong and our client is resolved" might give a misleading impression that somehow there was a dispute between the Tong and the plaintiff which the High Court could resolve. Perhaps by using language in a popular sense, one could say that there was a "dispute between the Tong and the plaintiff". It is true they were unable to agree together on how the ex gratia payment the Authority was prepared to make should be apportioned. However, that was in no sense a "dispute" of the type with which a court could concern itself. Neither the Tong nor the plaintiff had any rights against the other relating to the ex gratia payment. Such rights as the plaintiff and the Tong had were separate ones against the Authority for compensation for resumption, such compensation being within the exclusive jurisdiction of the Lands Tribunal. Whatever might have been the reasons for the plaintiff's proceedings in the High Court, and whatever might have been the thinking involved in letting the Attorney General disjoin himself from those proceedings, the fact of the matter was that by the time the summons to strike out was heard, the proceedings were only between the plaintiff and the Tong, although the Crown had indicated that it was willing to be bound by any declaration which the court might make.

56. The application to strike out came on before me. Applying the test laid down by the House of Lords in Williams & Humbert Ltd. v. W. & H. Trade Marks (Jersey)Ltd.⁽³⁾, I declined to proceed with the argument which was bound to be long and serious, because I did not at that stage harbour sufficient doubts about the soundness of the pleading.  Hence, I summarily dismissed the Tong's application to strike out.

57. In due course, the originating summons came on for trial before me. By then, declaration (c) has been amended to read :-

"the Tong's interest in the said Lot 18 (and Lot 22, my brackets) is limited to the rent receivable from the plaintiff during the said terms of tenancy."

58. During the course of the trial, a further declaration, (d), was sought in the following terms:-

59. For the sake of completeness I will set out Sections 10, 11 and 12 of the Ordinance :-

60. Now that the originating summons has been fully argued before me, I see that the Tong's solicitor has been right all along in his contention that this case should not have right been brought against the Tong in the High Court. As between the plaintiff and the Tong, there was never any dispute that the plaintiff had an estate in the two Lots before the resumption; nor was it disputed that his estate was a five yearly tenancy, renewable on the same terms from 7th November 1984 until expiration of the Crown Lease. Any declaration on that was wholly unnecessary as between the plaintiff and the Tong. It was also unnecessary as between the Tong and the Attorney General (assuming the Attorney General was a party to the proceedings, which he was not). If there were any dispute between the plaintiff and the Attorney General as to the plaintiff's estate in the land, that dispute should have been resolved in the Lands Tribunal applying Tong Kwong Hong Co. Ltd. v. Director of Public Works⁽²⁾.   Hence, there was no justification for going to the High Court for either declaration (a) or (b).

61. The declaration originally sought by the plaintiff under (c) "as to the extent of such interest" was wisely withdrawn because it was doomed to fail. If those words were intended to mean "title", which was how the Authority used them in its letter of 22nd January 1987, then they merely covered the same ground as the declarations sought by (a)and (b). If they were used in the sense of what features of the relationship between the Tong as lessor and the plaintiff as lessee should be taken into account for the purpose of determining the compensation each one of them should get then this was clearly something outside the jurisdiction of the High Court, the Lands Tribunal having exclusive jurisdiction on such matters which are concerned solely with compensation.

62. The amended declaration (c) fares no better. Whether the Tong's interest in the two Lots is limited to the rent receivable from the plaintiff is a straightforward valuation question for the Lands Tribunal, and not something with which the High Court can concern itself.

63. An even more obvious valuation question is embodied in the proposed declaration (d).

64. A declaration by this court in such terms would be a naked usurpation of the Lands Tribunal's exclusive jurisdiction in matters of compensation.

65. The plaintiff's legal advisers seem to imagine that if the court were to grant the plaintiff declarations in terms of (c) and (d), those declarations could be used to bludgeon the Tong into agreeing an apportionment of the ex gratia payment of $1,406,138.50, which the Authority is in practice still prepared to offer. Even if such declarations were made - And I have already indicated I think it would be wrong to make them - I very much doubt whether they would achieve anything. The fact of the matter is that the Tong cannot be forced to accept any apportionment of any ex gratia payment. The Tong is fully entitled, if so minded, to insist on going to the Lands Tribunal for a separate assessment of its compensation. As Mr. Neoh pointed out, in the most polite manner possible, the compensation which the Tong seeks from the Authority is simply no business of the plaintiff. If the plaintiff wants compensation, then his remedy is to ask the Lands Tribunal for it. He cannot force the Tong to agree to anything.

66. A long list of authorities was cited to me about how the courts exercise discretion in granting declarations and similar forms of prerogative relief. None of those cases had any bearing on the present action which is between the plaintiff and the Tong. The answers to the legal problems concerning them are all to be found on a close scrutiny of the Ordinance, and the Tsang Hung⁽¹⁾and Tong Kwong Hong Co. Ltd.⁽²⁾ cases.  By not concentrating on that limited amount of relevant material, the plaintiff has finished up in a blind alley. To extricate himself, he has merely to initiate a claim on his own behalf against the Authority in the Lands Tribunal.

67. The present proceedings, being misconceived, must be dismissed.

(1)    [1977] H.K.L.T.R. 29

(2)    [1981] H.K.D.C.L.R. 22

(3)    [1986] 1 A.C. 368