CHEUNG MOON CHEE v. THE COMMISSIONER OF POLICE AND ANOTHER

1984 A.J. Folio No. 344

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ADMIRALTY JURISDICTION

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J U D G M E N T

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1. This action arises out of a collision which occurred on 5th October 1982 between a fishing vessel belonging to the deceased and a police launch owned by the Hong Kong Government. The defendants filed an amended defence and counterclaim. In the event, the counterclaim was abandoned as was the defence apart from paragraph 1A which reads:

"Further or in the alternative, even if the Defendants have been negligent, which is denied, the Defendants aver that, by virtue of Section 4(6) of the Crown Proceedings Ordinance, Cap. 300, which provides that "no liability shall be imposed thereby upon the Crown in respect of any ship, dock or harbour owned by the Crown", they are not liable for any damage suffered by the Plaintiff as a result of the collision involving the Police Launch, which was a vessel owned by the Crown."

2. Although the Crown relies only upon section 4(6) of the Crown Proceedings Ordinance, Cap. 300 (the Ordinance), it is necessary for the purpose of this judgment to set out section 4 in full.

"4. (1) Subject to the provisions of this Ordinance, the Crown shall be subject to all those liabilities in tort to which, if it were a private person of full age and capacity, it would be subject:

(a) in respect of torts committed by its servants or agents

(b) in respect of any breach of those duties which a person owes to his servants or agents at common law by reason of being their employer; and

(c) in respect of any breach of the duties attaching at common law to the ownership, occupation, possession or control of property:

Provided that no proceedings shall lie against the Crown by virtue of paragraph (a) in respect of any act or omission of a servant or agent of the Crown unless the act or omission would apart from the provisions of this Ordinance have given rise to a cause of action in tort against that servant or agent or his estate.

(2) Where the Crown is bound by a statutory duty which is binding also upon persons other than the Crown and its officers, then, subject to the provisions of this Ordinance, the Crown shall, in respect of a failure to comply with that duty, be subject to all those liabilities in tort (if any) to which it would be subject if it were a private person of full age and capacity.

(3) Where any functions are conferred or imposed upon an officer of the Crown as such either by any rule of the common law or by enactment or statute, and that officer commits a tort while performing or purporting to perform those functions, the liabilities of the Crown in respect of the tort shall be such as they would have been if those functions had been conferred or imposed solely by virtue bf instructions lawfully given by the Crown.

(4) Any enactment which negatives or limits the amount of the liability of any Government department or officer of the Crown in respect of any tort committed by that department or officer shall, in the case of proceedings against the Crown under this section in respect of a tort committed by that department or officer, apply in relation to the Crown as it would have applied in relation to that department or officer if the proceedings against the Crown had been proceedings against that department or officer.

(5) No proceedings shall lie against the Crown by virtue of this section in respect of anything done or omitted to be done by any person while discharging or purporting to discharge any responsibilities of a judicial nature vested in him, or any responsibilities which he has in connexion with the execution of judicial process.

(6) (a) Notwithstanding the provisions of this section, no liability shall be imposed thereby upon the Crown in respect of any ship, dock or harbour owned by the Crown.

(b) This subsection shall continue in force until a day to be appointed by the Governor by Proclamation in the Gazette and shall then expire.

3. The Crown's argument was simple. Section 4 of the Ordinance is apt to impose on the Crown liability which did not previously exist for tortious acts except, by virtue of sub-section (6)(a), those arising in relation to ships, docks and harbours. Sub-section (6)(a), it was argued, is clear and unambiguous. However absurd or unjust the results, effect must be given to the clear literal meaning of the words of the sub-section. If that interpretation fails to implement the true intent of the legislature, then it is for the legislature to amend the legislation. It is not for the Court to legislate by investing the plain language with some other than its natural meaning.

4. It was further argued that the Ordinance is derived largely from the Crown Proceedings Act 1947 (the Act). Section 4 of the Ordinance is identical to section 2 of the Act, save for sub-section (6). Sub-section (6) of the Act provided that no proceedings should lie against the Crown for the act or default of any of its officers unless the officer had been appointed by the Crown and was paid out of the consolidated fund or from some other specified source. Sections 5 to 7 of the Act, however, conferred on the Crown the right under the Merchant Shipping Acts 1894 to 1940 to limit its liability in respect of ships, docks and harbours. Section 8 of the Act made the Crown liable to civil salvage. The Ordinance does not contain any maritime provisions similar to sections 5 to 8. It contains only section 4 (6), and section 25 which prohibits proceedings in rem against the Crown and provides for their continuation in personam. Thus, the argument ran, sub-section (6) of the Ordinance was enacted with the legislative eyes wide open. It is clear that, for the time being, the Crown in Hong Kong did not wish to become involved with the intricacies of the Merchant Shipping Acts and preferred to hold itself immune from liability in relation to ships, docks or harbours, whatever the unfortunate consequences of that might be, until it felt the time was right for it to fall into line with the position in the United Kingdom.

5. In support of his general proposition in relation to construction, Mr. Jolly for the Crown referred me to two cases. In Westminster Bank Limited v. Zang (1966) A.C. 182, Lord Reid said at page 222:

"But no principle of interpretation of statutes is more firmly settled than the rule that the court must deduce the intention of Parliament from the words used in the Act. If those words are in any way ambiguous - if they are reasonably capable of more than one meaning - or if the provision in question is contradicted by or is incompatible with any other provision in the Act, then the court may depart from the natural meaning of the words in question. But beyond that we cannot go"

6. In Farrell v. Alexander (1977) A.C. 59, Lords Wilberforce, Simon of Glaisdale and Edmund-Davies agreed that when the words of a consolidating statute are clear, the court should treat it as standing on its own feet and should not examine its legislative antecedents.  At page 72, Lord Wilberforce said:

"I would agree and endorse the principle that it is quite wrong that, in every case where a consolidation Act is under consideration, one should automatically look back through the history of its various provisions, and the cases decided upon them, and minutely trace the language from Act to Act - a process, which, incidentally, has led to an argument of four days' length in this House. In recent times, because modern statutes have become so complicated, the courts myself included, (cf. Inland Revenue Commissioners v. Joiner [1975] 1 W.L.R. 1701) rather too easily accept this process, whether under persuasion of counsel or from their own scholarly inclinations. But unless the process of consolidation, which involves much labour and careful work, is to become nothing but a work of mechanical convenience, I think that this tendency should be firmly resisted; that self-contained statutes, whether consolidating previous law, or so doing with amendments, should be interpreted; if reasonably possible, without recourse to antecedents, and that the recourse should only be had when there is a real and substantial difficulty or ambiguity which classical methods of construction cannot resolve."

7. Although the Ordinance is not a consolidating statute, I accept that in principle a court should avoid an analysis of the historical background to a statute where the words to be construed are clear and unambiguous.

8. For the plaintiff, Mr. Chong argued that the Ordinance was part of a liberalizing process by the Crown. The effect of section 4 was to impose liability upon the Crown vicariously for any tort committed by its servants and agents for breach of its common law duty as an employer; for common law liability attaching to property arising out of ownership occupation possession or control; and for breach of any statutory duty. He submitted that sub-section (6) was not intended to and did not exclude completely the liability of the Crown in tort simply because a claim is connected with a ship, dock or harbour. The use of the word "owned", in isolation from words such as "occupied" or "'in possession", indicated that the liability of the Crown is to be excluded only in so, far as that liability arises out of ownership, and not where liability arises vicariously or by virtue of breach of some other statutory duty.

9. Mr. Chong sought to make his submission good in three ways. First, he argued that it is necessary to look at the historical background to the Ordinance. He said that it is important to remember the unique provisions of shipping law by which an owner or owners of a ship remain liable in tort to a third party although they may have parted with possession and control of the vessel to a charterer by demise or a disponent owner. In order to mitigate the hardship to owners arising out of such strict liability, provision was made for owners in certain circumstances to be able to limit their liability. In England, such provisions were contained in the Merchant Shipping Acts 1894 to 1940 at the time when the Act was enacted. The relevant provisions in the Merchant Shipping Act 1894 were:

"502. The owner of a British sea-going, or any share therein, shall not be liable to make good to any extend whatever any loss or damage happening without his actual fault or privity in the following cases; namely, -

i)  Where any goods, merchandise, or other things whatsoever taken in or put on board his ship are lost or damaged by reason of fire on board the ship; or

ii) Where any gold, silver, diamonds, watches, jewels, or precious stones taken in or put on board his ship,   the true nature and value of which have not at the time of shipment been declared by the owner or shipper thereof to the owner or  master of the ship in the bills of lading or otherwise in writing, are lost or damaged by reason of any robbery,   embezzlement, making away with, or secreting thereof.

503. (1) The owners of a ship, British or foreign, shall not, where all or any of the following occurrences take place without their actual fault or privity; (that is to say,)

(a) Where any loss of life or personal injury is caused to any person being carried in the ship;

(b) Where any damage or loss is caused to any goods, merchandise, or other things whatsoever on board the ship;

(c) Where any loss of life or personal injury is caused to any person carried in any other vessel by reason of the improper navigation of the ship;

(d) Where any loss or damage is caused to any other vessel, or to any goods, merchandise, or other things whatsoever on board any other vessel, by reason of the improper navigation of the ship;

be liable to damages beyond the following amounts."

There then follow the tonnage calculations.

10. Thus an owner could escape liability for damage to goods caused by fire on the ship, or for loss or damage by robbery etc. in relation to precious metal or stones, the value of which had not been properly declared. An owner could limit his liability according to the tonnage of his ship for loss or injury to persons or goods carried on his ship or for loss or injury in respect of other ships where his own ship had been improperly navigated.

11. The Merchant Shipping (Liability of Shipowners and Others) Act 1900 extended to the owners of any dock or canal or a harbour authority or a conservancy authority a similar right to limit in relation to loss or damage caused to any vessel or goods on any vessel.

12. That remained the position when the Act came into force in 1947. Shipowners, however, continued to regard the position as unsatisfactory. International discussion took place which culminated in the International Convention relating to the limitation of the liability of owners of sea-going ships which was signed at Brussels on 10th October 1957. Effect was given to that Convention by the Merchant Shipping (Liability of Shipowners and Others) Act 1958. The principal alterations in the law are neatly summarized in Temperley's Merchant Shipping Acts, Volume 1, paragraph 1208.

"ii) The right to limit liability for loss of life or personal injury has been extended to claims of persons not on board the  limiting ship, and the right to limit liability for loss or damage to property or rights has been extended to claims in respect of any property or rights wherever situated (s.2 (1)).

iii) It is no longer necessary that loss of life or personal injury, or damage to property or rights in respect of which limitation is claimed, should have been caused by reason of the improper navigation or management of the ship. Nor is the right to limit excluded by reason only that the occurrence giving rise to the liability was not due to negligence. It is sufficient if the occurrence was caused through the act or omission of any person (whether on board the ship or not) in the navigation or management of the ship or in loading, discharging or embarkation and disembarkation of passengers or through any other act or omission of any person on board the ship (s. 2(1) and (3)).

v) The benefit of the right to limit has been extended to any character and to any person interested in or in possession of  the ship, and to any manager or operator of the ship, and to any employer of a person who by s.3(2) is entitled, to limit his personal liability (s.3(1)(2)). Further, the master and members of the crew have been given the right to limit their personal liability. This right is irrespective of their actual fault or privity, except in respect of the loss of or damage to undeclared valuables in circumstances of dishonesty (s. 3(2))."

13. The provisions of that Act were extended to Hong Kong by the Shipowners' Liability (Colonial Territories) Order 1963.

14. It is Mr. Chong's contention that at the time when the Ordinance was passing through the Legislative Council, the Attorney General had in mind the discussions which were taking place in Brussels in 1957 and foresaw, as was the case, legislative amendment to the Merchant Shipping Acts to deal with what was regarded by some as the unsatisfactory state of the law on limitation of liability. The Crown therefore intended to introduce a complete limitation package once the English legislation had been amended rather than introduce it piecemeal. In the meantime, the Crown deemed appropriate to avoid any liability attaching to ships by virtue of ownership alone. Mr. Chong sought to fortify this contention by reference to the Hong Kong Hansard in which the Attorney General, when moving the first reading of the bill, is reported as saying:

"Clause 4. This makes, for the first time, the Crown generally liable in tort, i.e., for civil injuries or wrongs independent of contract. It should be noted that sub-clause (6) is a stop-gap inserted to save the Crown from liability in respect of ships, docks, etc., until such time as the United Kingdom Parliament has passed legislation. It is considered that legislation applicable to Colonial territories in respect of the matters dealt with in sections 5 to 8 of the United Kingdom Act should be by a United Kingdom Act."

15. Mr. Jolly said that the Attorney General's intention is a matter of speculation. It seems to me, however, that Mr. Chong has supplied a reasonable explanation. I remind myself, however, that the intention of a piece of legislation is to be ascertained from the wording of the legislation itself, and not from anything that may have been said during the course of legislative debate.

16. The second limb of Mr. Chong's argument was that the interpretation for which he contends can be ascertained from a reasonable construction of the Ordinance as a whole. He said that if it had been the intention behind sub-section (6) to exclude all liability on the part of the Crown in respect of matters falling within section 4(1), there should be consistency in the provisions of the Ordinance as a whole. He referred me to section 25 which prohibits proceedings in rem against the Crown in relation to ships or aircraft, and authorises the proceedings to be continued as if they were in personam in appropriate cases. Mr. Chong asked why there should be such a provision if the Crown is not liable anyway. He said that this section would only be of any effect if the Crown is not liable qua owner but remains liable vicariously or on some other basis.

17. The answer I think, as Mr. Jolly contended, is that in the Admiralty Court proceedings may be commenced in rem in respect of claims arising out of contract, for example, in relation to a charter party, as well as tort.  The purpose of section 25 therefore, which appears in a different part of the Ordinance from section 4, is to ensure that Crown ships cannot be arrested in any circumstances. I see nothing unreasonable in this.

18. By virtue of section 10 and the First Schedule to the Ordinance, proceedings by way of petition of right under section 52 of the Naval Prize Act 1864 were abolished. Section 10 of the Ordinance further provides that all civil proceedings against the Crown shall be instituted in accordance with Rules of Court. Section 34(2) provides that nothing in the Ordinance shall affect the law relating to prize salvage except where provision is expressly made.

19. According to Mr. Chong, a private citizen has thereby being deprived of his right to take proceedings against the Crown in respect of prize. He must proceed by way of Order 77 which provides, inter alia, that a writ must include a statement of the circumstances in which the Crown's liability is alleged to have arisen. If sub-section (6) has the blanket effect for which the Crown contends, a prosepctive plaintiff will not be able to comply with the Rules.

20. The answer to the puzzle posed by this esoteric area of the law is, I think, simple. Whatever "prize" may comprehend, it is not a claim which arises in tort. Therefore, although the Crown may be under a statutory duty by virtue of the Naval Prize Act to pay price or prize salvage, it is not a duty affected by the provisions of section 4(2) of the Ordinance which is restricted to liabilities arising in tort.

21. Mr. Chong also sought to make capital of section 34(4) of the Ordinance which reads:

"(4) Where any property vests in the Crown by virtue of any rule of law which operates independently of the acts or the intentions of the Crown, the Crown shall not by virtue of'this Ordinance be subject to any liabilities in tort by reason only of the property being so vested; but the provisions of this subsection shall be without prejudice to the liabilities of the Crown under this Ordinance in respect of any period after the Crown or any person acting for the Crown has in fact taken possession or control of any such property, or entered into occupation thereof."

22. As I understood the argument, there is a distinction here between ownership (brought about by vesting) and possession, control or occupation. I confess I do not immediately understand how this sub-section, regulating the liability of the Crown in tort in circumstances where it acquires ownership by operation of law, causes any difficulty in the interpretation of sub-section (6).

23. Mr. Chong also sought to persuade me that the word "thereby" in sub-section (6)(a) is governed by the word "owned". That is a construction which I rejected outright.  I have no hesitation in confirming that rejection. The construction is one which is not possible.

24. Mr. Chong then argued that if the Crown interpretation of sub-section (6) is correct, it would be difficult, if not impossible, to apply such interpretation to docks and harbours. He queried how it could be applied to the situation where a government employee commits a tortious act against another in or at a dock owned by the Crown, or where one of its employees is injured during construction of a tunnel in the harbour. He enquired whether the legislature intended to exclude liability on the part of the Crown as to whatever might happen at a dock or in a harbour owned by it. He pointed out that when the Ordinance was passed, the legislature must be assumed to have known that under the Merchant Shipping (Liabilities of Shipowners and Others) Act 1900, the owner of a dock or harbour could limit his liability by reference to the locality within which any tortious act took place, i.e. the area of the dock or harbour, irrespective of fault.

25. I can see that very considerable protection was already available to the Crown. But that does not mean, in my view, that the Crown could not, and indeed did not, seek to avoid any liability whatsoever, if it thought fit so to do. Within the Ordinance itself, therefore, I do not find anything to assist the plaintiff or to undermine the Crown's argument.

26. The third limb of Mr. Chong's argument was that the Crown's interpretation would result in conflicts between sub-section (6) and at least two other Ordinances. He suggested that if sub-section (6) covers any liability for tort rather than the "strict" liability arising out of ownership, it cannot be reconciled with section 7 of the Occupiers Liability Ordinance, Cap. 314. Section 7 reads:

"This Ordinance shall bind the Crown, but as regards the Crown's liability in tort shall not bind the Crown further than the Crown is made liable in tort by the Crown Proceedings Ordinance and that ordinance and in particular section 4 of it shall apply in relation to duties under sections 3 to 5 of this Ordinance as statutory duties."

27. It appears to me that the wording of this section contains the complete answer to Mr. Chong's complaint. In any event, as Mr. Jolly observed, the Occupiers Liability Ordinance came into effect some 3 years after the Ordinance itself.

28. Mr. Chong then referred to the Workmen's Compensation Ordinance, 1953, which, with certain specific exceptions, applied to workmen employed by the Crown. Under that Ordinance, the Crown was under strict liability as an employer to pay compensation for death or injury arising out of and in the course of the employment of its workmen. The Crown's interpretation of sub-section (6) would remove the Crown's liability in respect of a workman who suffered death or injury in a ship, dock or harbour.

29. The answer, I believe, is as Mr. Jolly submitted, that the Crown's liability under the Workmen's Compensation Ordinance was not affected by the sub-section. He said that section 4 of the Ordinance is confined to tort. However, the liability under the Workmen's Compensation ordinance arises out of the relationship of employer and employee. The underlying basis of liability therefore is contractual and not tortious and is not affected by the Ordinance. He conceded, however, that sub-section (6) might (indeed must in my view) affect a workman's claim for other personal injuries arising out of his employment in a ship, dock or harbour.

30. Finally, Mr. Chong posed a number of examples of absurdities, anomalies or injustices that would arise if the Crown's argument is.correct. It is not, I think, necessary for me to deal with these in detail. Suffice it to say that Mr. Jolly acknowledged the possibility of such situations but maintained that they are irrelevant because the wording of the sub-section is clear and unambiguous. It.must be given that clear and unambiguous meaning however unjust the result may be. He did not, however, dissent from what is a clearly established canon of construction, namely, that if two interpretations are possible then effect must be given to the interpretation which avoids absurdity or injustice.

31. I am satisfied that there is nothing in the second and third limbs of Mr. Chong's argument to throw any doubt upon the construction of sub-section (6). As far as the first limb is concerned, I see the force of the historical argument but I am unable to say that it causes me any misgivings as to the true construction of the sub-section. I am satisfied that, whether intentional or not, the effect of the sub-section is to exclude the Crown from any liability in tort in relation to ships, docks or harbours within its ownership. I do not see that it could have been any more clearly put.

32. It is, perhaps, extraordinary that in the light of sub-section (6)(b), the Crown has taken no steps to ally itself with the position in England where the Crown has the benefit of the limitation provisions of the Merchant Shipping Acts and no more. No doubt a suitable proclamation will be made by the Governor in the not too distant future.

33. In the circumstances, the defendants as representatives of the Crown, have a.complete defence to the action, notwithstanding it has as its basis vicarious liability. The action must be dismissed. The counterclaim having been abandoned, the counterclaim is also dismissed. I make order nisi that the defendants have the costs of the action, while the plaintiff has the costs of the counterclaim.

34. In case there is any matter other than costs which arises, I give general liberty to apply.