QUEBOSTOCK LIMITED v. THE BUILDING AUTHORITY AND ANOTHER

IN THE COURT OF APPEAL

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JUDGMENT

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Silke, J. A.:

1. Quebostock Limited - "the Appellant" - is described as the Cheung Family Company.   It is the registered owner of Stanley Lot 1129/1 in Stanley Market Road.   There were, in the 1940s, a number of village type structures built on the lot. One of those became a distillery with a tall chimney. In 1980 a director of the Appellant was concerned about the safety of that chimney and wrote to the Director of Public Works.   No action was taken or required. In September of 1983 typhoon Ellen damaged the chimney and, in so doing, damaged the structures. The Appellant then rebuilt the site, changing the structures into a line of small shops.

2. On the 19th of March 1984, following upon an inspection by the District Lands Officer, Hong Kong South, a letter was written to the Appellant pointing out that Lot 1129/1 was a garden lot and construction of buildings upon the land was in breach of the conditions of lease. Correspondence issued between Government and the Applicant - by Government I included various departments which deal with buildings and lands. There was a suggestion of a short-term waiver in 1984 but in January 1985 the Building Authority issued, under s. 24(1) of the Building Ordinance, - "the Ordinance" - an Order which stated that it had been brought to his attention that building works carried out upon the lot were in contravention of s. 14(1) of the Building Ordinance: that the building works comprised structures erected within the boundaries of the lot. It required, by Order in writing, in accordance with the powers vested in him under the provisions of s. 24(1) of the Ordinance the Appellant:

3. On the 2nd of February 1985 the Appellant, under the provisions of s. 44(1), purported to appeal against that Order.

4. On the 9th of April 1985 the Appeals Tribunal appointed under s. 43(1) considered, in accordance with the procedures set out in the First Schedule to the Ordinance, the Notice of Appeal and, it appearing to them after due consideration that no good cause had been shown why an inquiry should be held refused to hold an inquiry and informed the Appellant accordingly. The decision appears in a document exhibited headed "Appeal Tribunal" and the relevant part reads:

5. The Appellant came to the High Court seeking an Order for Judicial Review to bring the refusal before the Court, to have it quashed and to obtain an Order directing the Appeals Tribunal to hold an inquiry.

6. Leave having been granted, the matter came on for hearing before Jackson-Lipkin, J. and on the 13th of June 1985 the application for judicial review was refused. The Appellant now seeks to appeal against that refusal.

7. S. 14 of the Ordinance prohibits any person from commencing or carrying out any building works or street works without having first obtained from the Building Authority:

It is not disputed that no such permission had been given in either respect to the building works carried out here.

8. The Building Authority has, under the Ordinance, two means of approach to building works being carried out in contravention of its provisions.  'First, under s. 23, and then, where buildings have actually been erected, under s. 24. S. 23 reads:

              "Where in the opinion of the Building Authority -

9. Subsection 1 of s. 24 reads:

"    24.(1) Where any building has been erected, or where any building works, street works, lift works or escalator works have been or are being carried out in contravention of any of the provisions of this Ordinance the Building Authority may by order in writing require -

 

10. The following subsections contain consequential provision as to service of the Order (2), non-compliance with it (3) costs of actions taken by the Building Authority (4) and an escape clause for the suppliers of lifts (5).

11. This appeal turns on the use of the word "may" in s. 24 without any qualifying expression such as "where in the opinion of" or "where it is satisfied that". It is the Appellant's case that "may" in the context of s. 24 is permissive and discretionary. It is the case for Building Authority that it is mandatory.   A seemingly narrow issue but which in reality gives wide scope for argument. The importance of whether "may" does or does not import a discretion in the Building Authority stems from the wording of the appellate s. 43. This reads:

"43.(1) Governor may appoint from time to time an Appeal Tribunal (here and after referred to as the Tribunal) for the purpose of determining appeals by persons prejudiced by a decision of the Building Authority in the exercise of his discretion in respect of any act, matter, or thing which is by this Ordinance made subject to the to the exercise of such discretion (here and after referred to as an appeal).". [Emphasis supplied]

12. Unfortunately the draftsman, indeed the multitu-dinous draftsmen, who have had a hand in framing the Ordinance as it now stands before us, have not seen fit to state unequivocally anywhere within the many sections of the Ordinance which sections are subject of such discretion and which are not. It is necessary, therefore, to consider the generality of the Ordinance, its scope and intention and each section individually to ascertain whether or not a particular section comes within the ambit of s. 43.

13. Mr. Bernacchi, with him Mr. K. Chan, who appeared for the Appellant both here and below has taken us on an exhaustive tour of the sections of the Ordinance. An exercise also performed by the Judge below. He has referred us to the many uses of the word "may" starting with s. 1 which states that "this Ordinance may be cited as the Building Ordinance". I have no doubt that if the "may" there be discretionary then there are those who would willingly apply to this Ordinance, forms of citation which are not normally to be found in the Law Reports.

14. Mr. Strawbridge who appears for the Respondents submits that s. 43 provides a simple answer. We are not directly concerned, he would have us accept, with the common law. He lays emphasis upon the words in s. 43: "..... which is by this Ordinance made subject to the exercise of such discretion ....". He emphasises that each section of the Ordinance must be looked on its own and where the section uses such phraseology as "where in the opinion of ....." the Ordinance is making matters subsequent subject to the exercise of a discretion. Where such qualifying words do not appear it is not. A distinction which found favour with Jackson-Lipkin, J. on the basis of contrast as between "may" qualified as discretion, "may" alone as directory and "shall" as mandatory. Mr. Bernacchi, in addition to his submission that the power to issue such an order under s. 24 is discretionary, says that even if he be wrong on that, then the matter of time which the Building Authority is required to state in the order is clearly a discretionary matter and should be capable of being the subject of an inquiry.

15. Jackson-Lipkin, J. commenced his consideration of the authorities cited to him in 1683 [Alderman Backwell's Case 1 Vern. 152]. I do not think it necessary to go back in history quite as far as that and would start with the seminal case of Frederic Guilder Julius v. The Lord Bishop of Oxford; The Rev. Thomas Thellusson Carter ⁽¹⁾, a decision of the House of Lords. While this is not directly on point, it has important considerations generally as to the construction of words in a statute and the matter of a discretion.

16. The Court there was considering a provision contained in the Church Discipline Act (3 & 4 Vict. c. 86) which provided, in every ease of any clerk in holy orders who might be charged with any offence against the Laws Eccle-siastical, or concerning whom there might exist scandal, that "it shall be lawful for the Bishop of the Diocese within which the offence is alleged or reported to have been committed, on the application of any party complaining thereof, or, if he shall think fit, of his own mere motion, to issue a commission .... for the purpose of making inquiry .....". The House held that this section gave the Bishop complete discretion to issue or decline to issue such commission and stated a proposition of law which has been adopted and repeated since then that: "Enabling words are always compulsory where they are words to effectuate a legal right.". As Lord Hodson in Padfield v. Minister of Agriculture, Fisheries and Food & Ors.⁽²⁾ at p. 1045 said, Julius ⁽¹⁾ draws "the distinction between a power coupled with a duty and a complete discretion".

17. Lord Selborne, at p. 235, in his consideration of the expression "it shall be lawful" (and I accept this as being the equivalent for our purposes of the word "may") said this:

"..... The language, (certainly found in authorities entitled to very high respect) which speaks of the words "it shall be lawful", and the like, when used in public statutes, as ambiguous, and susceptible (according to certain rules of construction) of a discretionary or an obligatory sense, is in my opinion inaccurate. I agree with my noble and learned friends who have preceded me, that the meaning of such words is the same, whether there is or is not a duty or obligation to use the power which they confer. They are potential, and never (in themselves) significant of any obligation. The question whether a Judge, or a public officer, to whom a power is given by such words, is bound to use it upon any particular occasion, or in any particular manner, must be solved aliunde, and, in general, it is to be solved from the context, from the particular provisions, or from the general scope and objects, of the enactment conferring the power.".

With great respect I adopt that statement of principle as encompassing the attitude this Court should take towards the construction of this Ordinance and its provisions.

18. Earl Cairns, L.C. at p. 222, deprecated the view taken by Judges in the lower Courts that the words:

"...... it shall be lawful might have a different meaning, and might be differently interpreted in different statutes, or in different parts of the same statute. They are words merely making that legal and possible which there would otherwise be no right or authority to do.".

He held the words were not equivocal. That they were plain and unambiguous. They conferred a faculty or power, and do not of themselves do more than that. He went on:

"But there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so.".

19. In Julius Case ⁽¹⁾ it was incumbent on the Appellant before the House to support their contention that the provisions of the Act to which I have referred showed something which created an obligation. The House in its finding held that they had failed so to do.

20. In Padfield ⁽²⁾, Lord Reid in his speech, at p.1033, having made reference to Julius ⁽¹⁾, said of those passages which I have cited from the speeches of Lord Selborne and the Lord Chancellor:

"So there is ample authority for going behind the words which confer the power to the general scope and objects of the Act in order to find what was intended.

 

In Julius' Case no question was raised whether there could be a discretion, but a discretion so limited that it must not be used to frustrate the object of the Act which conferred it; and I have found no authority to support the unreason able proposition that it must be all or nothing - either no discretion at all or an unfettered discretion.".

21. Padfield ⁽²⁾ had for consideration first: whether there was a discretion and secondly whether the Minister had used it in a manner in accordance with the provisions of the particular statute.

22. We are not here concerned with the manner of the exercise of any discretion. The sole issue is whether a discretion exists. It is not suggested that the power given to the Building Authority is for the benefit of persons who are specifically referenced or defined in the legislation and who are entitled to call for its exercise. The Ordinance states itself as being one:

"To provide for the planning, design and construction of buildings and associated works; to make provision for the rendering safe of dangerous buildings and land; and to make provision for matters connected therewith.".

There is clearly a general public interest to be served by the proper exercise of his powers by the Building Authority in connection with building works in Hong Kong. He controls, and quite rightly so, all construction which takes place within the territory and by that I mean both original buildings and the alterations in existing buildings.

23. In our tortuous journey through the Ordinance ss. 13, 16 and 22, the relevant sections, ss. 24A, 25 and 26 were particularly stressed.  I shall leave for a moment consideration of s. 16 for there is a Hong Kong Authority - Singway Company Ltd. v. The Attorney-General ⁽³⁾ - dealing with the interpretation of that section which needs a careful examination. There Leonard, J. (as he then was) had for consideration the vires underlying the outline zoning plan and the provisions of s. 16 and what, if any, discretions existed generally in the section and specifically in its sub-paragraphs.

24. S. 13, which makes provision for disciplinary proceedings in respect of registered contractors who are guilty of negligence or misconduct, entitles the Building Authority to bring the matter to the notice of a Disciplinary Board and uses the word "may" but opens with the phrase "where it appears to the Building Authority".

25. S. 22 is clearly an empowering section whereby the Building Authority may at any time enter and, where necessary with a police officer, break into premises or enter upon land to ascertain whether there is any matter which is dangerous or liable to become dangerous, to ascertain whether the provisions of the Ordinance were being complied with and to carry out or cause to be carried out any work he is authorised to carry out under the Ordinance.

26. S. 24A deals with orders to cease or remedy dangerous works and uses the single word "may" twice without qualification.

27. S. 25 has the word "shall" in its subsection (1) and the phrase "in the opinion of" in its subsection (2) and deals with changes in use of buildings.

28. S.26 however, while it uses the word "may", opens with phrase "where in the opinion of the Building Authority" and also deals with dangerous buildings. S. 27 empowers the Building Authority "where in his opinion" it is necessary to make application to the District Court in relation to closure orders for dangerous buildings or building liable to become dangerous.

29. S. 27A uses the word "may" but opens with the phrase "where in the opinion of" and relates to the remedying of dangerous hillsides.

30. This catalogue is not exhaustive and of course the Ordinance uses the word "shall" in quite a number of other sections but it does tend to give the flavour of the use of the word "may", qualified or unqualified, as it appears in the various sections.

31. Mr. Strawbridge, as I have said, lays great emphasis on the different approach which he suggests appears in s. 23 contrasted with s. 24. They both deal with breaches of s. 14. Mr. Strawbridge accepts that s. 23, set out earlier, is discretionary and it applies not merely to s. 14 contraven-tions but to any contraventions of any of the provisions of the Ordinance where works are being carried out. S. 24 on the other hand gives the appearance of dealing with matters which have already happened. But it also, by including the phrase "and are being carried out", relates, at least in part, to matters similar to s. 23. Mr. Strawbridge lays stress on the lack of the phrase "where in his opinion" to underline the non-discretionary nature of the use of the word "may" in s. 24. He relies not only on the normal canons of construction and on common sense but also on the decision of Leonard, J. in Singway ⁽³⁾ and on the limit, as he sees it, the Legislature has seen fit to place upon discretion in s. 43.

32. We are of course not bound by the decision of Leonard, J. in Singway ⁽³⁾ but any decision of that distin-guished Judge should and will be given the greatest weight.  It is however clear that neither Julius ⁽¹⁾ nor Padfield ⁽²⁾ were cited to him.

33. In Singway ⁽³⁾ the Company had submitted to the Building Authority for his approval, plans for the construc-tion of a building on a site in Wanchai. At the time when these were submitted there was exhibited, under the provisions of the Town Planning Ordinance, a draft outline zoning plan for the Wanchai area which included the site of the proposed building. The Company was advised that its building plans were disapproved under the provisions of s. 16(1)(d) of the Ordinance on the grounds that the proposed building, for non-residential purposes, was situated in an area marked "residential" on the draft plan. That plan was amended, published and was also exhibited under the Town Planning Ordinance. Both of the plans contained a schedule of uses and areas which attracted six paragraphs of explanatory notes relating to the designation of the various areas covered by the plans.

34. The Plaintiffs sought a declaration that the plans were not draft plans within the meaning of the Town Planning Ordinance and were invalid; that therefore the Building Authority's refusal of approval of the Company's building plans was consequentially invalid: and that the building plans were deemed, under the somewhat extraordinary provisions of s. 15 of the Ordinance, to have been approved by the Building Authority. Having considered s. 16(1)(d) of the Ordinance, the Town Planning Ordinance, and the Outline Zoning Plan, the learned Judge held that s. 16(1)(d) obliged the Building Authority to refuse to approve the building plans if they did not comply with the Outline Zoning Plan and in consequence would contravene the town plan.

35. The Company had initially maintained, amongst other things, that the Building Authority had wrongly regarded himself as bound to refuse approval of the plan and he had failed to exercise a discretion. That contention was repudiated before the Trial Judge. There was however before the Judge a defence amendment by which the Building Authority contended that even if the original ground for refusal by the Building Authority to give its approval to the Company's plan was invalid, the refusal itself was nevertheless valid on foot of a further ground that being that the proposed building would differ in height, design and type from the buildings in the immediate neighbourhood.

36. It was necessary therefore for this Judge to consider the provisions of s.16 which opens with the words, in its subsection (1),:

"The Building Authority may refuse to give his approval of any plans of building works where -".

S. 16(1) contains paragraphs lettered (a) to (q). The Judge felt it necessary, in considering whether the word "may" was permissive or, as he put it, "mandatory", to look at all of those particular paragraphs for he thought that in some of them the Building Authority clearly must refuse to give approval and in some there was a discretion. One reason why the Building Authority clearly must refuse its approval was, said Leonard, J., that:

"The Building Authority could not be intended to have a discretion to approve plans conflicting with regulations which it is his duty to enforce.".

That was a reference to the paragraph (a) and he contrasted that with paragraph(i) which contained the words "in his opinion". He held that (i) must connote a discretion. The Judge was clearly distinguishing between the overriding "may" in the opening words of the section, treating that as being "mandatory" but holding the paragraphs in subsection (1) which contained the expression "in the opinion of" imported a discretion into those specific paragraphs. He considered it the clear duty of the Building Authority to uphold the provisions of the Building Ordinance which creates his office and that he had an equal duty as a public servant to uphold the provisions of other enactments which did not conflict with the Building Ordinance. He went on:

"If the section is to be construed so that 'may' is mandatory in regard to the first part of this paragraph -(he was then considering a paragraph (d) - I don't see how it can have been intended to be permissive for another part of the same paragraph: such an intention could have been adequately shown by framing another paragraph associated with a paragraph to which 'may' when applied was permissive.".

He sought support for his view in Crozet Ltd., Hill Develop-ment Ltd., Dale Enterprise Ltd. v. The Attorney General ⁽⁴⁾ (unreported then as it is now).

37. In Crozet ⁽⁴⁾ a refusal under s. 16(1) paragraph (d) was challenged in Court but a refusal under paragraph (g) of s. 16(1) was not.  Leonard, J. thought the reason to be that paragraph (g) was a proper matter to go to an appeal inquiry under s. 43.

38. Crozet ⁽⁴⁾ was a summons heard before Briggs, C. J.. It is unclear as to what the summons was.   Crozet ⁽⁴⁾ was basically concerned with a suggested conflict relating to plot ratios between the Town Planning Ordinance and the powers of the Building Authority under the Ordinance.  Briggs, C. J. held that the power of the Building Authority to refuse special approval was unfettered. He was not there concerned, as I read the judgment, with any discretion to refuse or not to refuse. The view I take of Crozet ⁽⁴⁾ is emphasised by the following passage from the judgment of the Chief Justice at p. 7 where he referred to his finding that:

"..... the Building Authority has the widest possible power to withhold consent.".

39. I am not here construing s. 16, nor that very  peculiar s. 15 which would seem on its face to give approval to plans whether or not they conflicted with the Building Ordinance and the regulations made thereunder if the Building Authority had not within a certain time signified its refusal. Those matters may lie for another day and entail even greater difficulty of construction then do the sections which lie before us and I have not overlooked the provision of s. 50 which allows an appeal to a Committee of Review in respect of the exercise of certain powers under s. 16(1) paragraphs (e) or (m). In giving the respect which is due to a judgment of Leonard, J., I do not think it is to be conclusive upon our consideration of s. 24.

40. I would adopt, with great respect, the dicta of Lord Reid in Padfield ⁽²⁾ where he deprecates the black and white view, if I may so call it, of either a full discretion or none at all.

41. I am fortified in my adoption by that which was said in Sheffield Corporation v. Luxford: Sheffield Corporation v. Morel ⁽⁵⁾ :

"'May' always means may. 'May' is a permissive or enabling expression; and there are cases in which, for various reasons, as soon as the person who is within the statute is entrusted with the power it becomes his duty to exercise it.".

42. S. 24 itself has, in my judgment two forms of in-built discretion. The Building Authority may decide to order the demolition of the building or it may decide to order such alteration of the building as may be necessary to cause the building to comply with the provisions of the Ordinance or otherwise to put an end to the contravention of the Ordinance. Second, it may specify the time within which the work required by such order shall commence and also the time within which it shall be completed. I appreciated that this last is Mr. Bernacchi's fall back point and that Mr. Strawbridge says in effect "too bad: if time is wrong you cannot appeal, you must accept that the Building Authority will act in a responsible manner". But I think it to be an indicator of the general tenor of the section. Jackson-Lipkin, J., while he took the more clear-cut approach holding, in effect, that without the qualifying words of "in the opinion of" there was no discretion and a duty, was aware that as he put it:

"For the purposes of s.43 of the Ordinance it matters not whether the discretion be fettered or unfettered: if there be any, the Appeal Tribunal's decision must be quashed.".

By his finding he placed upon the Building Authority a duty to search the highways and the byways of Hong Kong for matters contravening the Ordinance and to immediately act thereon in conformity with the provisions of s. 24.  I do not think that this can be the case. For if he were to carry out that "duty" the Building Authority would need a force the size of the Royal Hong Kong Police Force consistently on the lookout for contravention. The Judge concluded the general portion of his judgment thus:

"I have reached this conclusion with the greatest hesitation, and something akin to personal repugnance, because I, for the life of me, cannot see why the legislation should give the Building Authority complete discretion in s. 23, which allows a simple straightforward and cheap appeal to the Appeals Tribunal, and yet should use the same word 'may', in relation, inter alia, to the identical situation, in s. 24 with no discretionary qualification, and thus leave the citizen, or subject, as the case may be, to an expensive and difficult 'appeal' to this Court, involving an application for leave to move for judicial review, a Notice of Motion in open Court, and, sometimes, a number of parties to be represented.".

43. I differ, with respect, from the Trial Judge for I would hold the word "may" in s. 24 does denote a discretion. It is not a matter of "all or nothing". The Building Authority may make an order or it may not.  It may do this even if the contravention is under the provisions of s. 14. I accept that s. 42 which allows for modifications of all of the provisions of the Ordinance by its subsection (5) expressly excludes s. 14.  But it would seem quite wrong if s. 14 were contravened by the failure to either apply for an initial approval of plans or for the secondary approval to commence works, then the result could be that a fully erected building which has escaped the notice of the Building Authority could be ordered by him to be totally demolished without the provision of the short and inexpensive appeal to the Appeals Tribunal under s. 43. Indeed if there be a duty it must be so ordered even if the Building Authority thought that the building was in every respect an admirable construction which contravened no other provision of the Ordinance nor any other zoning plan under any other Ordinance.

44. While Singway ⁽³⁾ is an aid to construction of s. 16, bearing in mind the context of s. 24, its particular provisions, the general scope and objects of the Ordinance, I would hold that s. 24 does confer a discretion and would order that the appeal be allowed: that the matter be brought before this Court for the purpose of quashing the refusal of the Appeals Tribunal to hold an inquiry and for direction to them that an inquiry be held.

McMullin, V.-P.:

45. I have had the opportunity of reading in draft the judgment of Silke, J. A. just delivered. I am in agreement with it and have nothing to add.

Yang, J. A.:

46. I agree and there is nothing I wish to add.

(1)    (1879 - 1880) 5 App. Cas. 214

(2)    [1968] A. C. 997 (H. L.)

(3)    [1974] H. K. L. R. 275

(4)    M. P. 409 of 1973

(5)    [1929] 2 K. B. 180 at pp. 183-4