HONGKONG MACAO HYDROFOIL CO LTD v. NG CHUN WAI AND OTHERS

Headnote

Shipping law s. 117(1) Merchant Shipping Ordinance, Cap. 181 - s. 503 Merchant Shipping Act 1894 - s. 35(1) Merchant Shipping Act 1979.

Section 35(1) of the Merchant Shipping Act 1979 (which modifies s. 503 of the Merchant Shipping Act 1894, so as to remove a shipowner's statutory right to limit his liability in relation to a person on board or employed in connection with a ship under a contract of service governed by the law of the U.K.) does not have the force of law in Hong Kong, by virtue of either s. 503 of the M.S.A. 1894, as modified, or of s. 117(1) of the Merchant Shipping Ordinance, Cap. 181.

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JUDGMENT

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Fuad, J.A.:

1. The controversy which divides the,parties to this appeal is the question whether subsection (1) of s. 35 of the Merchant Shipping Act 1979, c. 39, of the United Kingdom ("the 1979 Act") applies to Hong Kong. The answer is likely to affect the amount for which the Hong Kong Macao Hydrofoil Co. Ltd. ("the Company") will be liable in damages for loss of life, injury and damage in pending and proposed actions arising out of a collision between two of their hydrofoils on 11 July 1982.

2. The Company instituted a limitation action against the Defendants. Deputy Judge Barnett, exercising the Admiralty jurisdiction of the High Court, heard the issue as a preliminary point of law and decided that the subsection did apply to Hong Kong. The Company now appeals to this Court.

3. The 1979 Act received the Royal Assent on 4 April 1979. But s. 52 provided that the Act would come into force on a day appointed by the Secretary of State, by order, and permitted different dates to be appointed for different provisions of the Act. It may be said that the principal objects of this Act are (i) to modernise legislation relating to pilotage; (ii) to give effect to several international Conventions etc. affecting shipping; and (iii) to improve safety and health on ships.

4. Except in so far as it applies to fishing vessels, subsection (1) of s. 35 of the Act was brought into force in the United Kingdom on 1 August 1979, by the Merchant Shipping Act 1979 (Commencement No. 1) Order, 1979 (S.I. 1979 No. 807). The subsection has the effect of modifying s. 503 of the Merchant Shipping Act 18'94 so as to remove a shipowner's statutory right to limit his liability in relation to a person on board or employed in connection, with a ship under a contract of service governed by the law of the United Kingdom. The section is in these terms -

5. Under the express powers given by certain provisions of the 1979 Act (ss. 15(1),19(2) and 47(1)), Her Majesty in Council has made the Merchant Shipping Act 1979 (Hong Kong) Order 1980 (S.I. 1980 No. 1514), which came into operation on 1 December 1980. The Order in Council extended to Hong Kong, with the modifications set out in the Schedule to the Order, ss. 14, 17, 18, 19(1), 31 [by a later amending Order in 1984], 50, 51 and 52 of the 1979 Act, together with Schedules 3, 4 and 5 and Part 1 of Schedule 7, to the Act.

6. Among the modifications in the Schedule to the Order was one which modified s. 52(2) - the commencement section of the 1979 Act - to substitute the Governor (of Hong Kong) for the Secretary of State as the appropriate authority. No Order has been made by the Governor under that modified section. If and when s. 14 or s. 17 of the Act is brought into force by the Governor, certain provisions, respectively; of the Convention relating to the Carriage of Passengers and their Luggage at Sea and of the Convention on Limitation of Liability for Maritime Claims 1976 will have the effect of law in Hong Kong.

7. It will have been seen that Her Majesty in Council has not extended s. 35(1) of the 1979 Act to Hong Kong, although s. 35 is not one of the sections expressly excluded from the power contained in s. 47(1) to extend provisions of the Act to inter alia, any colony".

8. The main contention against the Company before the Deputy Judge was that s. 35(1) of the 1979 Act has the force of law in Hong Kong by virtue of subsection (1) of s. 117 of the Merchant Shipping Ordinance, Cap. 281, which is as follows -

9. For the purposes of the Ordinance, by virtue of s 2 (the definition section) the expression "the Merchant Shipping Acts" used in s. 117(1) includes the 1979 Act. The definition was amended to include that Act by Ordinance No. 47 of 1979 which came into force on 25 May 1980.

10. It is necessary to refer to a number of other statutes and statutory instruments. It is s. 503 of the " M.S.A. 1894, up on which the Company relies in its limitation action. That section is to be found in Part VIII of the Act, the whole of which extends "unless the context `otherwise requires" to the "whole of Her Majesty's dominions" (s. 509). Part VIII of that Act has been amended or modified by M.S. Acts enacted in 1898, 1900, 1906, 1958 and, as we have seen, by the 1979 Act. Other M.S. Acts to which I need not refer have restricted the operation of s. 503 of the M.S.A. 1894,

11. I think it is fair to say that apart from the 1979 Act, the most important "limitation" provisions are now to be found in the M.S.A. 1894, read together with the Merchant Shipping (Liability of Shipowners and Others) Act 1958. Part of that Act was extended with modifications, to Hong Kong by the Shipowner's Liability (Colonial Territories) Order in Council 1963 (S.l. 1963 No. 1632) and, it is to be noted, one of the modifications was to substitute references to "the Territory" for references to the United Kingdom" in the provisions extended by the Order. This was done under express enabling powers contained in s. 11 of the 1958 Act.

12. Some half a dozen or more examples were cited to us, where M.S. Acts have been extended to Hong Kong by Her Majesty in Council, with appropriate modifications, under similar enabling powers. Mr. Ma, for the Company, drew our particular attention to an Act of 1932, which was extended, with modifications, to Hong Kong, by Order in Council, some two and a half years after the statute had become part of the law of the United Kingdom.

13. I will interpolate here, an example of a modification of the kind one would expect if an Order in Council were to be made extending s. 35(1) of the 1979 Act to Hong Kong. I am here referring to the words in para (a) of that subsection "a contract of service governed by the law ..… of the United Kingdom". When the Merchant Shipping Convention (Hong Kong) No. 1 Order, 1953 was made, it modified s. 3 of the Merchant Shipping (Safety Convention) Act 1949 (since replaced by a later statute), inter alia, by providing that the section applied to "sea-going ships while they are in any port, in Hong Kong" instead of "ships..... in the United Kingdom......".

14. Mr, Ma relied on the Application of English Law Ordinance (Cap. 88). Subsection (1) of s. 4 of the Ordinance provides, inter alia, that the law of England as set out in any Act which applies to Hong Kong by virtue of (i) any Order in Council; (ii) any express provision in the enactment, or by necessary implication; or (iii) any Ordinance, shall be in force in Hong Kong. Subsection (2) of s. 4 of the Ordinance goes on to provide that such Act shall, in its application to Hong Kong be subject to amendment by any Order in Council or Act which applies to Hong Kong, or by any Ordinance. I will say here that I entertain no doubt that these provisions are merely declaratory of the constitutional position.

15. Mr, Ma submitted that it was logical to presume that the means set out in s. 4(1) were mutually exclusive in that if an English Act applied to Hong Kong by virtue of one of those methods, it would be superfluous to bring in the same Act by another method. And in any event, it would be wrong to envisage a situation under s. 4(1) of the Application of English Law Ordinance whereby there was any inconsistency between the various methods stated therein e.g. if the Hong Kong Ordinance brought in the whole of the provisions of an English Act whereas the Order in Council only brought in a part or vice-versa that it was only in the case of English Acts .(or provisions of English Acts) that did not otherwise prescribe a method by which the same could be extended to Hong Kong, that s. 4(1)(b)(iii) of the Application of English Law Ordinance had effect. It was, he argued, not concerned with English Acts which had express provisions for extension to Hong Kong-nor with Acts which had been extended to Hong Kong by Order in Council.

16. With respect, in my judgment these submissions are not well founded. I do not read the declaratory provisions of Cap. 88 as mutually exclusive, and as a matter of constitutional principle, nothing stands in the way of the Hong Kong legislature enacting provisions" for the peace, order, and good government" of Hong Kong, assuming that they are otherwise within its legislative competence, and not repugnant by virtue of s. 2 of the Colonial Laws Validity Act. I know by no principle that would prohibit the legislature from giving the force of law in Hong Kong to s. 35(1) of the 1979 Act because it could have been applied to this jurisdiction by Order in Council by virtue of the Acts express provisions, and has not been. No question of repugnancy can be said properly to arise.

17. However, I think that Mr. Ma is perfectly right when he says that the Courts should strive to interpret the various provisions which fall for construction in this case to avoid anomaly, chaos and inconsistency. More particularly, if it is possible s. 117(1) of the Merchant Shipping Ordinance should not be construed so as to make superfluous any application by Her Majesty in Council of the powers given by s. 47(1) of the 1979 Act and to render otiose the other Orders in Council applying provisions of previous. M.S. Acts of the United Kingdom to Hong Kong. And inconsistency would arise if a United Kingdom statute were to be-regarded as applicable by virtue of s. 117(1) of the Merchant Shipping Ordinance, and the same provisions of the statute were applied by order in Council, but with modifications. No doubt if this particular issue arose, the Courts would apply the repugnancy rule, and allow the provisions derived from the United Kingdom statute to prevail in order to resolve the inconsistency.

18. I now turn to a submission made by Mr. Dicks, for the Defendants, which was not advanced in the Court below. We allowed the point to be taken in the absence of any objection by the Company. While he was ready to support the Deputy Judge's approach and conclusions, Mr. Dicks contended that the same result could be reached in another, and more appropriate way. He argued that since Part VIII of the M.S.A. 1894 applied proprio vigore to Hong Kong (and s. 503. was included in that Part) and since the Merchant Shipping Acts were required all to be read as one, after the coming into force of s. 35(1) of the 1979 Act, s. 503 of the M.S.A. 1894 had to be read as cut down by s. 35(1)of the 1979 Act, and to that extent s. 503 had been repealed. There was thus no need to resort to s. 117(1) of the Merchant Shipping Ordinance.

19. I think that Mr. Dicks is right to a certain extent. It seems to me that s. 503 of the M.S.A. 1894 has the force of law in Hong Kong by virtue of the provisions of that Act contained in s. 509, and not by anything said in s. 117(1) of the Merchant-Shipping Ordinance. And by applying ordinary principles of interpretation, confirmed by the United Kingdom and Hong Kong Interpretation statutes, s. 503 must be read as amended from time to time. Thus, for example, whether the M.S. (Liability of Shipowners and Others), Act 1958 had or had not been applied to Hong Kong by Order in Council and  whether modifications had been made by the Order, in the application to Hong Kong of s. 503 of the M.S. Act 1894, para-graphs (c) and (d) to subsection (1) of that section must be read in the form of those paragraphs substituted by the 1958 Act. However, I do not see s. 35(1) of the 1979 Act as an amendment. In my view the United Kingdom legislature can not be taken to have intended the modification it made to s.503 to apply to Hong Kong, otherwise it would not have made it possible, by s. 47(1) of the 1979 Act, for s. 35(1) to be extended to Hong Kong.

20. I now turn to consider s. 117 of the Merchant Shipping Ordinance. It seems to me that we are not concerned with the first sentence of subsection (1) of s. 117 of the Ordinance, except in so far as it assists to construe the rest of the subsection. The effect of that sentence, as I read it, is that at the time of the coming into force of the Ordinance any provisions of the Merchant Shipping Acts then in force, and which did apply to Hong Kong, were to be repealed to the extent that they were inconsistent with any of the provisions of the Hong Kong Ordinance.

21. The rest of the subsection is, in my view, a clear example of often criticised legislation by reference. I am unable to interpret that part of the subsection otherwise than as giving the force of law to the Merchant Shipping Acts (as defined) in Hong Kong so far as they are capable of application to Hong Kong, despite the anomalies to which Mr. Ma drew attention.

22. Adoption by a general expression of the kind ("so far as they are applicable [to Hong Kong]") lacks precision and raises doubts - doubts which can only be resolved by starting from the position that the entire corpus of the M.S. Acts 1894 to 1979 is potentially part of the law of Hong Kong and then by examining a particular provision and deciding by reference to its terms whether it is suitable for, has relevance to, and can be applied, to Hong Kong.

23. When the legislature of Hong Kong amended s. 2 of the Ordinance to include a reference to the 1979 Act, I entertain no doubt that it gave the force of law in Hong Kong to the provisions of that Act, subject to applicability, as and when they were brought into force in England. Since there is an obvious and essential difference between the enactment of a statute and its commencement, I do not think that any of the provisions of the 1979 Act which have yet to come into operation in the United Kingdom can have the force of law in Hong Kong by the language employed in subsection (1) of s. 117.

24. I do not doubt the Hong Kong legislature's competence to do what it did, even though a very strange position has been created as a result of the making of the 1980 Order in Council. I may be permitted to surmise that some wires may have been crossed. If the Legislative Council intended to limit the application of the 1979 Act to such of its provisions as could be expressly extended to Hong Kong by the Order in Council, it would have left the definition of the "Merchant Shipping Acts" in s. 2 of the Ordinance well alone, or have added, at the appropriate time, a reference to the 1979 Act in the proviso to subsection (1) of s.117, along with references to the 1936 and 1949 Acts.

25. I say "some wires may have been crossed" because when one looks at the forerunner of Cap. 281 - the Merchant Shipping Ordinance 1953 (No. 14 of 1953) - one notes that the definition of the expression "the Merchant Shipping Acts" refers to the M.S. Acts 1894 - 1952. Section 114(1) of the 1953 Ordinance (the predecessor of the present s. 117(1) of Cap. 281) mentioned the 1936 and 1949 M.S. Acts of the United Kingdom, as the proviso to s. 117 of Cap. 281 still does. These may well have been the only M.S. Acts which had by then been extended wholly or in part to Hong Kong by Order in Council. To achieve consistency, the draftsmen of the day made it clear that the general words before the proviso did not apply to any provisions of the M.S. Acts in respect of which Orders in Council had been made.

26. With all due respect to him, it seems likely that the draftsmen of the amending Ordinance which included the1979 Act in the definition of "the Merchant Shipping Acts" in s. 2 of the Merchant .Shipping Ordinance, did not appreciate the effect it would have, without looking at and amending, the proviso to s.117(1) as well, so that uncertainty, confusion and anomaly could be avoided. If this were the intention of the legislature, he could have drafted the proviso on these lines: "Provided that nothing in this subsection shall be read as applying to or affecting any of the M.S. Acts which empower Her Majesty in Council, by Order, to extend any of their provisions to Hong Kong.". However that may be (and I have permitted myself to conjecture) our task is to construe the Ordinance as it is, on the presumption that the legislature does not make mistakes of this kind.

27. The difficulty of ascertaining applicability is, of course, inherent in the very use of the formula "so far as [the provision] is applicable [to Hong Kong]".In respect of some of the provisions of the 1979 Act the question whether they can be read as applicable to Hong Kong can readily be answered. For example, ss.1 to 13 of the Act, which all depend on the establishment of the Pilotage Commission (clearly for the United Kingdom) cannot, I think, fairly be said to be capable of application to Hong Kong under the wording employed in s. 117(1) of the Ordinance. But about some other provisions there can be much, reasonable, competitive argument. In my opinion s. 35(1) of the 1979 Act is just such a case.

28. To resolve this formidable problem; I think that a closer examination of 35 of the 1979 Act is necessary. As I have earlier noted, by s. 17 of the 1979 Act (when it comes into force) the Convention on Limitation of Liability for Maritime Claims, with adjustments, will have the force of law in the United Kingdom. When this happens the effect of subsection (2) of s. 35 will be that certain "limitation" provisions contained in the Convention will not apply in relation, inter alia, to loss of life or personal injury of persons on board under a contract of service governed by United Kingdom Law. But by virtue of subsection (1) of s.35, until the Convention takes over, the "limitation" provisions in s. 503 of the M.S. Act 1894 are similarly modified. Presumably, at the same time that s. 17 of the 1979 Act commences, subsection (4) of s. 50 of that Act will be brought into force, and this will have the effect of repealing the whole of Part VIII of the M.S. Act 1894 (which, as we know, includes s. 503), as well as the M.S. Act of 1958 relating to the liability of shipowners - see Schedule 7, Part I of the 1979 Act.

29. Since subsection (2) of s. 35 has not yet been brought into force in the United Kingdom, and thus has yet to become part of the law-of the United Kingdom, it cannot, by virtue of s. 117(1) of the Ordinance, be part of the law of Hong Kong. In considering whether s. 35(1) is applicable to Hong Kong, I do not think it would be right to ignore this fact and read the subsection in isolation without bearing in mind the legislative scheme I have attempted to outline.

30. We do not know what circumstances in the United Kingdom explain why the special-exemptions in favour of British seamen where made, first as a transitional measure, by s. 35(1) of the 1979 Act(by modifying s. 503 of the M.S. Act 1894) and, later, by s: 35(2) when the London Convention is given effect to in United Kingdom law. For my part I find it impossible to say that these exemptions are necessarily suitable for the conditions of Hong Kong, whether they are applied as they stand, to benefit British seamen, or modified to apply to H.K. seamen. In my judgment, it. would be trespassing into the exclusive province of the legislature (to some extent this is unavoidable when legislation by reference falls for construction) to assume that local circumstances in Britain and Hong Kong in this area of shipping and employment law are the same. In all the circumstances, I have concluded that, having regard to its scope and object, s. 35(1) of the 1979 Act is not "applicable" to Hong Kong within the meaning of that word in s. 117(1) of the Merchant Shipping Ordinance.

31. As I understand the position, s. 35(1) of the 1979 Act will be of no use to the Defendants unless it can legitimately be modified by reading it as if the reference to contracts of service governed by the law of the United Kingdom were a reference to such contracts governed by the law of Hong Kong. In my view it is not permissible to make this modification under the umbrella of the words "and to extend, so far as they can be extended" in s. 117(1) of the Merchant Shipping Ordinance.

32. I have considered whether s. 75 of the Interpretation Ordinance can be prayed in aid to help the Defendants. It is in these terms -

I would comment here that were it not for the definition of the words "or" and "otherwise” in s. 3 of the Ordinance, I would have felt bound to read those words ejusdem generis with what went before. However, in my judgment, s. 75 of Cap. 1 does not assist the Defendants. It seems to me that it only has effect once it is determined that a United Kingdom statute does apply to Hong Kong; One cannot use the section before this hurdle has been surmounted, to make adaptations so as to render an otherwise inapplicable statute, applicable. It is only when a statute does apply that, it is permissible to modify it to make it applicable (in the sense of apt-or appropriate) to the circumstances of Hong Kong.

33. In one of the cases cited, to us: Johnson v. Wong Fu Ng [1910] H.K.L.R. 203, at p.208, Piggott, C.J. said "Owing to the way the Merchant Shipping Act [1894] is drafted, some of it being applicable and some inapplicable to the Colonies the task of legislating for shipping in the Colonies is peculiarly difficult, and I know no question which has given more trouble to Colonial Attorneys-General". Perhaps' the same can still be said 75 years later.

34. For these reasons, I have reached the conclusion that this appeal must be allowed.

Sir Alan Huggins, V.-P.:

35. The short point is whether s. 35 of the 1979 Act is, without modification, "applicable" to Hong Kong within the meaning of s. 117(1) of the Merchant Shipping Ordinance. I have had the advantage of reading in draft the judgment of Fuad, J.A. and entirely agree with both his conclusion and his reasoning. Although we are differing from the trial judge, I do not think there is anything which I can usefully add.

Cons, J.A.:

36. I, too, agree.

Sir Alan Huggins, V.-P.:

37. We are agreed that there should be an order nisi that the Appellant should have its costs both here and below.