YAU FOOK HONG CO LTD AND ANOTHER v. THE DIRECTOR OF LANDS

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JUDGMENT

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1. The Shing Mun River ran out of a pleasant valley in which was grown reputedly the best rice in South China, which valley was later given over to agriculture. Just beyond the village of Sha Tin itself, the river fell into Sha Tin Hui, a tidal estuary, which gave on to Tai Po Hui and, via To Lo Kong, to the open sea. In the valley, the bunds have been thrown down, the flowers uprooted and the whole given over to other things: Beyond Sha Tin, the estuary has been filled in so as artifically to extend the Shing Mun River by a Reach of water running some considerable distance into what was the original tidal estuary. The Fill, which, with an arrogance of which only Homo Sapiens (sic) is capable, is described as "reclaimed" land .⁽¹⁾  His Late Imperial Majesty of China was undoubted the riparian owner of both sides of the Shing Mun River and,   in the absence of any evidence of law to the contrary, the owner of the foreshore of Sha Tin Hui between the high and lower water marks. The land that I have just described did not then exist, which may explain the confusion which gave rise to the somewhat startling proposition in the last line of paragraph 7 of Mr. Osborne's Affidavit of 15th June 1984, (p.193 of the Bundle).

2. The land with which I am concerned in this Motion, however, is "natural" land lying at the South - West of Che Kung Miu between it and Tin Sam and, consequently, held by the Crown qua mesne landlord. Under Article XIII of the Letters Patent of the Colony, the Governor is empowered to make and execute grants and dispositions of lands within the Colony that may be lawfully granted or disposed of by the Crown, and, under paragraph (2) of that Article, those powers have been duly delegated by the Governor; the manner in, and the system by, which such grants and dispositions are made need not be analysed by me in this Judgment, being sufficiently well-known: They are also documented in the papers put before me, and I need but mention the Convention of Peking of 9/6/98 (Appendix IV p. I.1.), The New Territories Order in Council of 9/6/98 (Appendix IV p. J.1.), the Crown Leases Ordinance, The New Territories Ordinance and The Crown Right (Re-Entry and Vesting Remedies)Ordinance.

3. The first Crown Lands Resumption Ordinance was passed in 1900, and underwent numerous amendments in the following two years, but there is no need for me to go into its subsequent legislative history. Later there grew up in the New Territories a system of Land Exchange Entitlements, known as Letters A and B, whose history and nature are so well-known, and which have so frequently been the subject of judicial comment that they also need not be analysed by me in this judgment. They and their history are also documented in the papers put before me. An example of a Letter A appears at pp. 285-293 and of a Letter B at pp. 294-303. Such Letters were not registerable under the Land Registration Ordinance.

4. In 1966 a Register was established in the District Offices of the New Territories for the purpose of recording unredeemed Land Exchange Entitlements  that is to say the Letters to which I have referred, and also changes in ownership and mortgages of such Letters. The Register is unofficial in the correct, and not the Hong Kong, sense of the word: It was not established pursuant to any Ordinance or to any Subsidiary Legislation, and there are no prescribed forms. The Director of Lands, apparently, will not accept or recognise any release of such Letters unless the person signing such release is Vie registered owner - words which, as will appear are of significance in this Motion.

5. The issue of Letters A and B ceased in March 1983, and, with effect from 1st April 1984, a new redemption scheme came into force, which, among other things, gave the Letters a monetary value for a large number of services. The documents relating to all the foregoing matters have been produced before me as Exhibits and appear in the agreed Bundle. At all material times the Applicants were possessed of a large land entitlement under the Letters scheme.

6. On a date unknown to me, the Crown invited applications from registered owners of Letters A and B for, inter alia, the Sha Tin Town Lot with which I am concerned, and for Sha Tin Town Lot No. 189, lying to the east of Pai Tau on what is possibly Fill, which would account for the last line of paragraph 6 of Mr. Osborne's Affidavit of 30/7/84 (p.202 of the Bundle).

7. The Crown issued an Application Notice in respect of the aforesaid Lots and, save for the description of such Lots, the wording of the two Notices is identical. Paragraph 1 reads: -

 

"     Applications are invited from registered owners of Land Exchange Entitlements giving the owner the right to a grant of building land for the grant in lieu of cash compensation of a lot ………

 

2.     The Government of Hong Kong does not bind itself to accept any application.

 

3.      The lot will be awarded to the applicant to submit Entitlements producing the highest aggregate age entitlement which will be calculated by multiplying the area of the entitlement .......... at the age of the entitlement calculated in days from the date on which the offer of the Land Exchange Entitlements was made or the operative date as the case may be to the 23rd day of March 1984.

 

5. Applications must be: -

(a)	made on the Application Form attached; .......
(d)	from persons who are the registered owners of Land Exchange Entitlements. Applications from any other person or persons will not be considered. A beneficial title by way of Sale and Purchase Agreement or such other document that does not give an absolute title will not be acceptable as a tender.

 

9. If an application is accepted the successful applicant shall be the Grantee and he will be notified of the acceptance of his application by a letter posted to him or delivered to the address stated in his Application Form not later than 1st day of June 1984. Within 14 days of the date of the said letter the Grantee shall sign ........ the Memorandum of Agreement in the form attached to the specimen Conditions of Grant accompanying this Application Notice."

8. Accompanying that Application Notice and the documents therein referred to, was an Explanatory Statement which commenced thus: -

 

" Applications are invited from registered owners of Land Exchange Entitlements issued by the City and New Territories Administration and the Lands Department (Letters A & B) for the grant of a lot of Crown land at.......... It is to be noted that only Entitlements giving the owner the right to a grant of building land will be considered, and that the Entitlement must be registered in the Applicant's name i.e. Agreements to Sale and Purchase will not be accepted.".

The document goes on to explain the methods of calculation and to provide that the same Letters or any of them may be used for a number of other lots being offered at the same time as alternatives, and continues,

 

"If any Entitlements are to be used for numerous lots as an alternative, the Applicant should fill in a separate Application Form for each lot stating which other lots are being applied for simultaneously.".

It later says, however,

 

"Should an Applicant wish to have a chance to secure more than one lot simultaneously, he would have to submit entirely different Entitlements for each application, i. e. there would have to be no duplication of Entitlements.".

The document concludes with the following paragraph: -

 

" In general, the intention is to spread the lots to as many applicants as possible, taking into account as far as possible orders of preference or of alternatives, but if two or more applicants for a lot have precisely the same aggregate date then: -

 

(a)	If the applicants have applied only for the lot in question, the choice will be made by ballot;
(b)	'When any applicant would be awarded another lot in addition to the one tied, he will not be considered for the tied lot; and
(c)	When any applicant would not be awarded any lot in addition to the one tied, the choice would be made by ballot.".

The document makes it quite clear to all applicants that it does not form part of the application but is purely for guidance as to how applications will be considered. Balloting is, by its nature, a secret voting system for selection or rejection (although no longer by putting round shot in an urn) and whether one looks at the English or the Chinese version (where the words Ch'au Ts'im, meaning "to draw lots", appears), it is certain that, in the event of a tie, there will be no conscious decision on the part of the Director of Lands as to who would be the "winner": (the English appears on the last line of page 13 of the agreed Bundle, and the Chinese at the end of the penultimate line on page 20 of that Bundle).

9. The Application Form is directed to the Director of Lands and says,

 

"I/we ………… having read the foregoing Application Notice and the General and Special Conditions of Grant annexed hereto ……… hereby offer to surrender the following Land Exchange Entitlements……… for the grant of ……… from the Crown in lieu of cash compensation ………. ".

There follow details of the Land Exchange Entitlements in columns, and it is important that I set out in this judgment, the columns as they appear:-

On page 2 of the Form (page 24 in the Bundle), appear 3 Notes, the third of which reads,

 

"         The applicant must be the registered owner of the Land Exchange Entitlements offered. A beneficial title under a Sale and Purchase Agree ment or such other document that does not give an absolute title will not be acceptable as a tender.".

On 23rd March 1984, the applicants submitted their tender for Lot 244 (and, in conjunction with other companies, for Lot 189).

10. On 24th May 1984, the Director of Lands accepted tenders in respect of the Lot with which I am concerned and in respect of the other Lot, from persons other than the applicants (or the companies associated with the applicant in relation to Lot 189).

11. On 24th May the applicants (together with their associate companies) obtained leave from Garcia, J. to move for judicial review of the Director's rejection of their unsuccessful tender for Lot 189, and, on 25th May, for leave to move for judicial review of the acceptance of the successful tender. I was taken through the history of those matters, which are now the subject of an appeal to the Court of Appeal, so I will confine my comments on them herein to the minimum. The Order of Garcia, J. of 24th May contained a stay of all matters relating to. the acceptance of tenders until the Notice of Motion should be heard, and, on 29th May, a Notice of Motion was issued returnable before me on 27th June moving for Orders of Prohibition and Certiorari in respect of Lot 189 and giving Notice of the Stay to which I have referred. It was then found that the Orders of Garcia, J. as drawn, did not accurately reflect what the Judge had in fact, ordered, and so, on 30th May, the Applicants in relation to Lot 189 caused a Summons to be issued returnable before Garcia, J. on 1st June under The Slip Rule to correct those Orders. On the same date, the Respondent caused a Summons to be issued returnable before Hunter, J. on 11th June, seeking the discharge of the orders in relation to Lot 189 on the grounds that the Court had no jurisdiction to make Orders of Prohibition and Certiorari ex parte, or to order a stay and for other relief. On 1st June, Garcia, J. corrected his Orders so as to convert them from Orders of Prohibition and Certiorari into leave to move for those forms of relief.

12. On 7th June, the Applicants in this Motion obtained from Bewley, J. leave to move for judicial review of the Director's rejection of the Applicants' tender for, and to prohibit him from executing "the Crown grant" in respect of, Lot 244, a stay, a declaration as to the meaning of "registered owner", damages and further or other relief; and, on 9th June, a Notice of Motion was issued, also returnable before me on 27th June, seeking the like relief. Also on 9th June, the Applicants, (together with their associate companies in the Lot 189 application), issued an Originating Summons addressed to the Attorney-General, presumably under the Crown Proceedings Ordinance, asking for construction of the term "registered owners of Land Exchange Entitlements", and asking for various declaratory and other relief. The Notice of First Hearing was made returnable before Hunter, J. on 11th June asking for certain expedited directions. On 11th June, the parties came before Hunter, J. also in relation to Lot 189 on the original Summons issued on behalf of the Director. Counsel for the Crown, then learning of the correction by Garcia, J. of the Orders of 24th and 25th May, applied for and was granted leave to amend the Summons so as effectively to make it one for a discharge of the Orders of Garcia, J. on the ground that the Court had no jurisdiction to grant leave to apply for judicial review, a stay etc. . Hunter, J. discharged Orders of Garcia, J., and, on the same date, gave judgment, which has been reduced to writing and which was before me on the hearing of this Motion. Inadvertently the Attorney - General is named in the Judgment as Defendant; and it was to the Director of Lands to whom the Motion was issued, and the Crown Proceedings Ordinance does not govern applications for Judicial Review. I mention that, not by way of criticism, but because, on 13th June, a Notice of Appeal against the Judgment of Hunter, J. was lodged naming the Attorney-General as Respondent and addressed to him: That Notice, of course, will have to be amended if the appeal is to be pursued. Hunter, J. also ordered, under 0.28 r.8, that the Originating Summons (to which I have just referred) proceed as if commenced by Writ. On 11th June, therefore, all proceedings by way of judicial review in respect of Lot 189 came to an end, and there remained but an ordinary civil action.

13. On 15th June the Director caused to be issued a Summons in respect of Lot 244 returnable before "the Judge in Chambers" on 25th June, asking that the Motion set down to be heard before me on 27th June, be stood over sine die to be heard upon or after the determination by the Court of Appeal of the appeal from Hunter, J. (to which I have just referred), and for the hearing date before me to be vacated. On the same date the Director caused another Summons to be issued returnable before Hunter, J. on 25th June, seeking the discharge of the Orders of Bewley, J. of 7th June, on the ground that he had no jurisdiction to make such Orders. The first of those two Summonses was, thereupon I assume, made returnable before Hunter, J. By a method of which I am uncertain, both hose Summonses came on before Hunter, J. on 19th June when, by consent, he discharged the stay contained in the Order of Bewley, J. of 7th June, and made both Summonses (at that time returnable before him on 25th June) returnable before me on 27th June, the hearing date of the substantive Motion.

14. Such was the state of affairs when I commenced the hearing on 27th June.

15. I should have said that originally I sat in Chambers, and there intimated to Counsel that, as the Summonses were due to be heard in respect of a Motion set doom for hearing on that day, the Summonses should be heard in open Court once the Motion had been called on, so that Crown Counsel may address his application to me in open Court, in relation to a called-on Motion, to have it stood over, and, under the second Summons, to ask me not to continue hearing the Motion as it had no foundation because the Order of Bewley, J. was made with jurisdiction. By consent, those Summonese were, therefore, adjourned into open Court. After the Motion was called on, I was asked to, and did , deal first of all with the application to stand over the Motion and to adjourn the Summons to discharge, to abide, or at least to await, the decision of the Court of Appeal in the appeal from Hunter, J. (to which I have referred).

16. The Summonses and Orders relating to Lot 189 were put before me, and I was told what had occurred before Hunter, J.. Mr. Kaplan indicated to me that the Applicants before me did not accept that, in relation to Lot 244, the Director of Lands had entered into a binding agreement with another tenderer. I asked Counsel for the Crown if the Director had in fact put his hand or seal to any agreement which was valid and binding (as opposed to an indefensible action for specific performance), but, to this date, I have received no satisfactory answer - presumably because the parties wished me to decide the issues then before me, free from one of the fetters on Hunter, J. in relation to Lot 189. Mr. Strawbridge did make it clear that, on 24th May, the successful tenderer had been notified of his success and that, on 31st May, a Demand mote for money had been sent out, which had been paid on 15th June, but informed me that the 14 day period for ratification of the tender had been indefinitely extended because of the stay which had then existed, and he drew my attention to the definition of Crown Lease" in s. 3 of the Interpretation and General Clauses Ordinance (at p. 7 thereof), although conceding that neither the Director of Lands nor the District Officer had yet executed any document. He said that there was an obligation on the Crown to grant a Crown Lease, but as I have said, Mr. Kaplan informed me that that was a matter of dispute between the parties to the Motion. Mr. Kaplan then explained to me that the situation before me was very different from that before Hunter, J., both factually and otherwise. He elaborated on his personal difficulties, and explained to me that he had been unable, in the very short time open to him, to research and, consequently, to elaborate his arguments before Hunter, J., and urged upon me that it would be a grave injustice not to permit him, in those peculiar circumstances, to argue the matter before me fully and comprehensively.

17. To those pleas (almost in misericordiam) I acceded, and I dismissed the Summons to stand over the Motion, and reserved the costs to the conclusion of the proceedings before me.

18. Mr. Strawbridge for the Crown then urged upon me that, in any event, the Applicants had disentitled themselves to any relief, and that the Order they obtained ex parte ought to be discharged on the ground of a material non-disclosure before Bewley, J.. What was alleged was that, in the Affirmation of Wang Teh-Huei (pp. 8-132 in the Bundle) put before Bewley, J. on 7th June, the Judge was not told that the Director of Lands had already accepted a tender for Lot 244 from someone else. In support of that, Mr. Strawbridge relied upon the well-known case of R. v. The General Commissioners for the purposes of the Income Tax Acts for the District of Kensington: Ex parte Princess Edmund de Polignac ⁽²⁾ ,the passages at p. 498, the interjection at p. 499 and the passages at pp. 502, 504, 505, 508, 509, 514 and 517 being too well-known for me to cite here; on Thermax Ltd. v. Schott Industrial Glass Ltd^.(3) where, at p. 298, Brown -Wilkinson, J. said:-

 

"I therefore reach the conclusion that material facts known to the plaintiff company were not disclosed to Woolf, J. This was an error of judgment only but in my judgment an important one. As time goes on ………… One is also inclined to forget the stringency of the requirements as laid down by the Court of Appeal ........... I therefore think it is very important indeed that in making applications it should be in the forefront of everybody's mind that the Court must be fully informed of all facts that are relevant to the weighing operation which the Court has to make in deciding whether or not to grant the Order.".

This was a matter which was discussed by the Court of Appeal in Bank Mellat v. Mohammad Ebrahim Nikpour. ⁽⁴⁾ Mr. Strawbridge also relied on In Re a Debtor (No. 75 of 1982) Ex parte the Debtor v. National Westminster Bank Plc: In Re a Debtor (No. 75 of 1982) Ex parte National Westminster Bank plc v. The Debtor ⁽⁵⁾ and, in particular, on the passage in the judgment of Warner, J. from p. 259E to p. 360F. However, as Mr. Kaplan pointed out to me, the letter written on behalf of the Director on 30/5/84 (at p. 182 of the Bundle) was an Exhibit to the Affidavit put before Mr. Justice Bewley in support of the ex parte application: It arose in this context: In paragraph 16 of his Affirmation, Mr. Rang said:-

 

"After I received the said letter", (an earlier one from the Lands Department) "I instructed my legal adviser to write to the Director of Lands asking him to stay the proceedings in respect of Sha Tin Town Lot No. 244 as the matter arising ............was identical to the points arising in Sha Tin Town Lot No. 189 which was shortly to be adjudicated upon by the Court ............":

And he continued, in paragraph 17:-

 

"On the 30th of May, 1984, the Director of Lands replied that he did agree " (sic)'' with the Applicants' suggestion in their said letter dated the 28th day of May, 1984. There is now produced and shown to me marked "WTH-10" a copy of the said letter.".

It is agreed that there was mistyping in that paragraph in that the word "not" was omitted - as Bewley, J. was told. In other words, what the deponent was saying to the Judge was "we asked for a stay because the matters were identical to Lot 189, which was sub judge, and the Director of Lands did not agree, and sent me a letter which I (Mr. Wang) now produce" - and there was the letter, and it did contain the words: "A tender for the above lot has been accepted". I can not believe that Bewley, J. would have overlooked that letter, or that, if now told of it, he would say that he had been misled by the curt terms of paragraphs 16 and 17 (which I have just read). But, of course, I have to look it de novo. For my part, I do not accept that the absence of such words as "and the Director of Lands said that he has already accepted another tender", or words to the like effect, when the letter itself was produced, can amount to such "a material concealment of a material fact", or to such a "grave error of judgment", as to disentitle the Applicants to the Order they have already obtained and to shut them out entirely from applying for further Orders, and I so held.

19. There remained to be considered the point of jurisdiction. Counsel agreed, and I accepted, that Mr. Kaplan should accept the burden of proving that this was a matter of Public Law, and should address me first; and that, should he fail, paragraphs 1 and 2 of the Motion would fall and I would then be addressed or the Plaintiffs wishes as to the future of paragraphs 3, 4 and 5.

20. Mr. Kaplan took me through the entire history of this matter, and then came to the central issue which was this: With their tenders in relation to Lots 189 and 244 the Applicants submitted a list of the Land Entitlements held as forming part of the tender - pp. 46-48 is an example of how that was done. Included in the tender for Lot 244 was a Land Entitlement in respect of which the second-named Applicant had entered into a Sale and Purchase Agreement on 14th December 1983. That Agreement was "registered" on 20th March 1984, and assignment to the second-named Applicant was executed on 22nd March 1984. The tender was submitted on 23rd March 1984, the closing date. The assignment was not "registered", however, until 7th May. That there were some apprehension in the minds of those advising the Applicants is apparent from p. 53 of the Bundle: That is a letter from File Nominees Ltd., countersigned by each of the Applicants, addressed to the Director of Lands. It referred to Land Exchange Entitlements in Lots 197(P) and 436(P) in Demarcation District 179, and pointed out that the second-named Applicant was at all material times the absolute owner thereof, and asked that the tender be not disqualified because of the point that the second-named Applicant was not the "registered" owner "as on the date of the tender". The Agreement of Sale and Purchase and the Assignment were enclosed with that letter, which was received by the Director shortly after noon on the same date. Correspondence followed, which is to be found at pp. 131, 139 and 141. The letter at p. 141, from the Applicants' Solicitors referred to the Sale and Purchase Agreement of the previous December and its registration in the previous March, and recited the execution of the Assignment, and confirmed that Assignment was "registered" on 7th May. The Solicitors continued:-

 

"Our clients are somewhat perplexed about you enquiry as they have always understood that it has been common practice for your office to accept land exchange entitlements in respect of tenders for land provided absolute ownership can be proven to your satisfaction at the date of acceptance or completion of such transaction,",

and they drew attention to Note (3) on the second page of the Application Form, which I have set out earlier in this judgment.

21. On the following day, 24th May, the Director of Lands caused letters, to be sent to the Applicants (and their associates) regarding Lot 189 and to the Applicants regarding Lot 244, in identical terms, informing them that their applications had been unsuccessful and returning their deposits: Those letters are to be found at pp. 170 and 178. There then followed the application to Garcia, J., to which I have referred, and, on 28th May, the Applicants' Solicitors wrote to the Director of Lands in relation to Lot 244 and referred to the proceedings which had been taken concerning Lot 189: They observed that the same point arose in relation to Lot 244, namely the true construction of "registered owner", and asked for a stay in relation to Lot 244 (including a stay of execution of the Crown Grant to the successful tenderer). It was in answer to that letter, that the letter on p. 182 (to which I have already referred) was written.

22. Mr. Kaplan took me through the events surrounding the grant of three other Sha Tin Town Lots, namely 161, where the closing date had been 13th March, but, as late as 24th April, File (Nominees) Limited was notified that the wrong registered name of certain Letters B had been put in the application, yet the tender was successful (see. pp. 61 and 62), despite the last sentence in paragraph (c) of the Application Notice, which read: "Late applications will not be considered;": (See p.57). In relation to Lot 193, Mr. Kaplan drew my attention to pp. 69 and 70, written two months and three and a half months respectively after the closing date of 16th December, and informed me that the matters therein recited had been used for Lot 189, and that Hunter, J. had been informed of it, and that they had also been used for Lot 244, the matter before me. In relation to Lot 246 Mr. Kaplan invited my attention to pp. 71 and 90, where the closing date had also been 16th December. He then took me through the proceedings relating to Lot 189, which I need not repeat. I was taken through the Kan Report and pp. 230/1 of Conveyancing in Hong Kong: Bramwell.

23. I was taken through the long history of prerogative Orders and Writs, numerous authorities thereon, and learned tomes on Administrative Laws by Foulkes, by de Smith and by Wade, through the Treaties with China, the Block Crown Lease system, the Crown Land Resumption system, the ''discontent'' of the 1950s and 1960s at the method of land resumption without reasonable compensation, the letters A and B system and the judgment of Hunter, J..

24. It is only out of deference to the careful and reasoned arguments advanced so ably before me by Mr. Kaplan, which, as he tells me, circumstance prevented him from advancing before my brother Hunter, that I have set out the history and background in such detail.

25. In fact the issue is short and simple: Is this a matter of Public or of Private Law? If Private Law then the issues of "legitmate expectation" raised but not explored, and of promissory estoppel touched upon before me, do not arise, and the Applicants are not entitled to relief by way of Judicial Review.

26. The way it is put by Mr. Kaplan is this: In the 1950s and 1960s, because of what he described as a "feeling of discontent" at land being taken up by the Crown without giving the previous owners a right to participate in urban development, the Government, in order to deal with that situation, and to remedy its unfairness, set up the Letters A and B system, thus enabling those persons who had lost their property to participate, if they so wished, in the development of the New Territories. That, he said, was not by stealth, but publicly and in the public interest. And, goes the argument, when the Director called for tenders in relation to Lot 244, he was implementing his promise to compensate those whose Sand had been taken away under the threat of Resumption (or those who, for valuable consideration, stand in the shoes of the original owners). Mr. Kaplan urges upon me that it follows that the Director was not acting solely in his Private Law capacity, and that there is a nexus, which can not be ignored, between Resumption, Compensation, Letters A and B and these tenders. Reduced to its simplest terms the argument is that the Director, in this instance, was, in effect, administering a system of Compensation arising originally out of the Crown Land Resumption Ordinance, and the mere fact that he was dealing with Letters A and B and not statutory compensation is irrelevant. Mr. Kaplan said that the situation was analogous to The Criminal Injuries Compensation Board, Prison Visitors and Market Licensing Committees. Having regard to the circumstance I feel that I must deal with the principal authorities on which Mr. Kaplan relied for that analogy and for his proposition. He started with the dictum of Atkin, L. J. in R. v. Electricity Commissioners Ex parte London Electricity Joint Committee Company (1920) Ltd. & Ors. ⁽⁶⁾ where, at 205, he said:-

 

"Wherever any body or persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs.",

and then invited my attention to the speech of Lord Diplock in O'Reilly & Ors. v. Mackman & Ors. ⁽⁷⁾ where, at p. 279, he said,

 

"The pre-1977 Order 53, like its predecessors, placed under considerable procedural disadvantage applicants who wished to challenge the lawfulness of a determination of a statutory tribunal or any other body of persons having legal authority to determine questions affecting the common law or statutory rights or obligations of other persons as individuals. It will be noted that I have broaden the much-cited description by Atkin, L. J ……………… of bodies of persons subject to the supervisory jurisdiction of the High Court by prerogative remedies (which in 1924 then took the form of prerogative writs of mandamus, prohibition, certiorari, and quo warranto) by excluding Atkin, L. J. 's limitation of the bodies or persons to whom the prerogative writs might issue, to those "having the duty to act judicially." For the next 40 years this phrase gave rise to many attempts of varying success to draw subtle distinctions between decisions that were quasi-judicial and those that were administrative only. But the relevance of arguments of this kind was destroyed by the decision of this House in Ridge v. Baldwin [1964] A. C. 40, where again the speech was given by Lord Reid. Wherever any person or body or persons has authority conferred by legislation to make decisions of the kind I have described, it is amenable to the remedy of an order to quash its decision either for error of law in reaching it or for failure to act fairly towards the person who will be adversely affected by the decision by failing to observe either one or other of the two fundamental rights accorded to him by the rules of natural justice or fairness, viz. to have afforded to him a reasonable opportunity of learning what is alleged against him and of putting forward his own case in answer to it, and to the absence of personal bias against him on the part of the person by whom the decision falls to be made.".

Mr. Kaplan also pointed to an earlier passage in the same speech, with the reasoning in which all the other Law Lords sitting agreed, where Lord Diplock said, at p. 275:-

 

"         It is not, and it could not be, contended that the decision of the board" (of visitors) "awarding him forfeiture of remission had infringed or threatened to infringe any right of the appellant derived from private law, whether a common law right or one created by a statute. Under the Prison Rules remission of sentence is not a matter of right but of indulgence. So far as private law is concerned all that each appellant had was a legitimate expectation, based upon his knowledge of what is the general practices ,that he would be granted the maximum remission, permitted by rule 5 (2) of the Prison Rules, of one third of his sentence if by that time no disciplinary award of forfeiture of remission had been made against him. So the second thing to be noted is that none of the appellants had any remedy in private law.

 

        In public law, as distinguished from private law, however, such legitimate expectation gave to each appellant a sufficient interest to challenge the legality of the adverse disciplinary award made against him by the board on the ground that in one way or another the board in reaching its decision had acted out with the powers conferred upon it by the legislation under which it was acting; and such grounds would include the board's failure to observe the rules of natural justice: which means no more than to act fairly towards him in carrying out their decision-making process, and I prefer so to put it.".

Mr. Kaplan also pointed to passages in R. v. Criminal Injuries Compensation. Board Ex parte Lain ⁽⁸⁾, although, at that time, the words "having the duty to act judicially" were still binding. In that case, Lord Parker, C. J. said, at p. 881:-

 

"         I can see no reason either in principle or in authority why a board set up as this board was set up is not a body of persons amenable to the jurisdiction of this court. True it is not set up by statute but the fact that it is set up by executive government, i.e. under the prerogative, does not render its acts any the less lawful. Indeed, the writ of certiorari has issued not only to courts set up by statute but to courts whose authority is derived, inter alia, from the prerogative. Once the jurisdiction is extended, as it clearly has been, to tribunals as opposed to courts, there is no reason why the remedy by way of certiorari cannot be invoked to a body of persons set up under the prerogative. Moreover the board though set up under the prerogative and not by statute had in fact the recognition of Parliament in debate and Parliament provided the money to satisfy its awards.",

and, at p. 882, he continued:-

 

"         We have as it seems to me reached the position when the ambit of certiorari can be said to cover every case in which a body of persons of a public as opposed to a purely private or domestic character has to determine matters affecting subjects .............. Looked at in this way the board in my judgment cones fairly and squarely within the jurisdiction of this court. It is, as Mr. Bridge said, 'a servant of the Crown charged by the Crown, by executive instruction, with the duty of distributing the bounty of the Crown.'. It is clearly, therefore, performing public duties.".

27. There are however two other passages in that case which I feel I should recite. The first is in the judgment of Lord Parker, C. J. where he said, also at p. 882:-

 

"It is to consist of a chairman of wide legal experience and five other members who are legally qualified …………… It is charged with assessing compensation on the basis of common law demages save as varied by the scheme .................Its procedure involves the examination and cross examination of witnesses and it is provided that the burden is on the applicant to make out his case and that the decision shall be arrive at solely in the light of the evidence brought out at the hearing.".

The second is in the judgment of Diplock, L. J., as he then was, at pp. 883/4, where he said:-

 

"         Its authority to do so is not derived from any agreement between Crown and applicants but from instructions by the executive government, that is, by prerogative act of the Crown. The appointment of the board and the conferring upon it of jurisdiction to entertain and determine applications, and of authority to make payments in accordance with such determinations, are acts of government, done without statutory authority but nonetheless lawful for that.

 

        The jurisdiction of the High Court as successor of the Court of Queen's Bench to supervise the exercise of their jurisdiction by inferior tribunals has not been in the past been dependent upon the source of the tribunal's authority to decide issues submitted to its determination, except where such authority is derived solely from agreement of parties to the determination. The latter case falls within the field of private contract and thus within the ordinary civil jurisdiction of the High Court ………………………".

I found that last passage of considerable assistance to me.

28. Mr. Kaplan also relied upon R. v. Barnsley Metropolitan Borough Council Ex parte Hook, ⁽⁹⁾ and in particular on the passage in the judgment of Scarman, L. J., as he then was, at pp. 1059 - 1060 where he said:-

 

"         A trader, or a member of the public, can only acquire effectively the opportunity to trade in this market if he can obtain a license, which no doubt as between him and the corporation is contractual, to use the facilities or equipment for trading that are under the Act provided by the corporation in the market. Although his rights are to that extent contractual, nevertheless in granting or withholding them the local authority has the discretion granted by its private Act of Parliament, and plainly the discretion is a discretion to regulate the exercise of the public's common law right to buy and sell in the market.

 

        Although, therefore, there is a contractual element in this case, there is also an element of public law, viz., the enjoyment of rights conferred upon the subject by the common law.",

and held that the Council was, consequently, amenable to the jurisdiction of the Courts.Mr. Kaplan also invited my attention to R. v. Manchester Legal Aid Committee Ex parte R. A. Brand & Co. Ltd. ⁽¹⁰⁾ where the Court intervened and to R. v. Boycott & Ors. Ex parte Keasley, ⁽¹¹⁾ where the Court intervened quash a medical certificate and a letter from the Clerk of a local Educational Authority addressed to the Cleric of a County Council Mental Deficiency Act Committee.

29. In my judgment this is clearly not a matter of public law, nor can it be said to be in anywise acts of the Director under the Crown Lands Resumption Ordinance. It is, of its very nature, a matter of contract and of private law. The Applicants, among many, many others, voluntarily accepted Letters A and B instead of proceeding under the Croon Lands Resumption Ordinance. The Applicants tendered in the knowledge that the Government did not bind itself to accept any application put forward: (See paragraph 2 on p. 57 of the Bundle). The Applicants knew that, in certain circumstances, the choice between them and another Applicant, or other Applicants, having tendered in the same amount, would be decided otherwise than by choice - (see paragraphs (a) and (c) on p. 56 of the Bundle). The Applicants knew that, if their tender were unsuccessful, someone else's would be successful: But such successful party would not be, and could riot be, a party to a Motion for judicial Review. Furthermore, the Applicants were well aware at all times that the authority of the Director to choose the tenderer offering the highest-calculated Land Exchange Entitlement was and is derived solely from agreement between each tenderer and the Director, as is made abundantly clear from the Explanatory Statement, the Application Notice and the Application form (to which I have already referred). I will recite a few short passages from those documents. At p. 55 of the Bundle,

 

"Each applicant who wishes to be considered for the site will be required to submit a list of land exchange entitlements which he would be prepared to surrender for the grant of the site in lieu of cash compensation.".

At p. 56,

"In general, the intention is to spread the lots to as many applicants as possible,".

At p. 57,

"Applications are invited from registered owners of land exchange entitlement …………… for the grant in lieu of cash compensation of a lot in …………… "

and

"Applicants may apply for any number of lots with the same land exchange entitlements".

At p. 58,

"if an application is accepted the successful applicant shall be the grantee .......................".

At p. 59,

"I/We …………………………… having read the foregoing Application Notice and ………………… hereby offer to surrender the following land exchange entitlements .......... in lieu of cash compensation .............".

and,

"If my/our Application is accepted, then until the Memorandum of Agreement ............. is signed or executed, this Application together with the written acceptance thereof shall constitute a binding agreement between me/us and the Crown.".

30. As I have said, what occurred between the Director and these Applicants was, of its essence, a matter of contract, and I can see no way in which those actions of the Director can he brought under the umbrellas of Public Law or Public Rights. Any claim that these Applicants may have must be made in Private Law, which, happily, no longer entails the issue of separate proceedings for, as Lord Diplo ck said in the O'Reilly Case (supra) at pp. 283/4:-

 

"If what should emerge is that his complaint is not of an infringement of any of his rights that are entitled to protection and Public Law, but may be an infringement of his rights in Private Law and thus not a proper subject for judicial review, the court has power under rule 9(5)" [of o. 53] "instead of refusing the application, to order the proceedings to continue as if they had begun by writ.".

31. If I were wrong as to the state of the law, I would still be unable to grant Orders of Prohibition or Certiorari in this matter because, as appears from the letter on p. 182 , a different tender from that of the Applicants has already been accepted by the Crown and, as I have already read from p. 22, such successful Applicant thereupon became the grantee; and, as I have read from p.23, that constituted a binding agreement between the grantee and the Crown. And, the words "Crown lease" includes any agreement for a Crown lease, and I should hold, if I had to, that a "Crown grant" includes any agreement for a Crown grant in the New Territories, by simple analogy having regard to the Block Crown Lease system.

32. For all those reasons I discharged the order of Bewley, J. of 7th June, but gave leave to the Applicants, should they so wish, to proceed on the Prayers in paragraphs 3, 4 and 5 of the Motion as if they had been commenced by Writ.

List of Authorities and Textbooks

1. Authorities

2. Textbooks

(i)            Conveyancing in Hong Kong: Bramwell

(ii)           Judicial Review of Administrative Action: de Smith: 4th Ed.

(iii)          Administrative Law: Foulkes, 8th Ed.

(iv)          Administrative Law: Wade, 5th Ed.

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