ATTORNEY GENERAL v. CHEUNG KING-CHOW

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL No. 987 OF 1989

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BETWEEN

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J U D G M E N T

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1. The two questions posed by the learned magistrate in this Case Stated are:-

"First, whether he was correct in holding that Regulation 5(a) of the Marine Fish (Marketing and Exportation) Regulations, Chapter 291 was ultra vires the empowering section 4 of the Marine Fish (Marketing) Ordinance, Chapter 291; and

Second, whether he was correct in refusing to restrict the meaning of 'selling' in the said Regulation 5(a) to wholesale sales in a market conducted by the Fish Marketing Organization so as to render the application of the said Regulation 5(a) of the Marine Fish (Marketing and Exportation) Regulations, Chapter 291, intra vires."

2. On 23rd November, 1988, the Appellant preferred an information alleging that the Respondent had, contrary to the said Regulation 5(a), on 1st July, 1988 at Cheung Sha Wan Fish Market incited another to abstain from buying marine fish.

3. When the matter came on for hearing, the Respondent pleaded not guilty. Before any evidence was called, the parties invited the magistrate to rule as a preliminary issue whether the said. Regulation was ultra vires the power to legislate conferred by section 4 of the Marine Fish (Marketing) Ordinance ('the Ordinance').

4. S. 4 of the Ordinance reacts as follows:

    "(1)     The Governor in Council may by regulation provide for -

(a)    controlling the importation and exportation of marine fish;

(b)    controlling the landing and transport of marine fish within Hong Kong;

(c)    the issue of permits and licences in respect of the matters controlled by this Ordinance;

(d)    prescribing conditions and restrictions in connexion with the marketing of marine fish wholesale; and

(e)    carrying into effect the provisions of this Ordinance.

(2)    Such regulations may presecribe contraventions thereof which shall constitute offences and may prescribe penalties not exceeding $10,000 and imprisonment for 6 months."

5. The Marine Fish (Marketing and Exportation) Regulations ('the Regulations') were made pursuant to that section. The said Regulation 5(a) is part of the Regulations and reads as follows:-

"Any person who -

 (a)    incites any other person to abstain from selling or purchasing marine fish or intimidates any other person with the intention of causing such person to abstain from selling or purchasing marine fish commits an offence and is liable to a fine of $10,000."

6. According to its preamble, the object of the Ordinance is 'to provide for the control of the landing and wholesale marketing of marine fish, for the control of the importation and exportation thereof, for establishing a Fish Marketing Organization for encouraging co-operative markets, for a scholarship fund for persons who may benefit or be connected with the marine fisheries and fish marketing industries and for matters incidental thereto'.

 By s. 1 of the Ordinance

"Wholesale means sale for, re-sale, which includes the sale of marine fish intended for re-sale as part of a cooked meal".

7. The Respondent's contention was that, since 'selling' can apply to both wholesale and retail transactions, Regulation 5(a) was ultra vires the regulation making power conferred by s. 4 because that power was limited to wholesale dealings.

8. The learned magistrate upheld that submission.

9. On its face the regulation could be referring to wholesale transactions, retail transaction or both. The Ordinance, however, is not concerned at all with the retail marketing of marine fish.

10. The argument that the regulation is ultra vires necessarily involves acceptance of the proposition that, if the conduct prohibited by regulation 5(a) relates to retail transactions, that prohibition is not necessary for the purpose of "carrying into effect the provisions of the Ordinance" (s. 4(1)(e)). If it is obviously not necessary to prohibit that type of conduct in relation to retail transactions, and it is obviously necessary to prohibit it in relation to wholesale transactions in order to provide for orderly wholesale marketing, then the legislative context resolves any prima facie ambiguity. The terms "selling" and "purchasing" are being used in their "wholesale" subdivisional sense and should be so interpreted. "Drink" is a term which can refer to any potable liquid whether it be alcoholic or not. But, when, in the context of an Act concerned with safety on the road, the term is used in a provision which makes it an offence to drive a motor vehicle under the influence of drink, it will be read in one of its subdivisional senses as meaning alcoholic drink to the exclusion of all other potable liquids to which it can refer (See, e.g., Armstrong v. Clark [1957] 2 Q.B. 391, 394; and Wandsworth Board of Words v. United Telephone Co. (1884) 13 O.B.D. 904, 920).

11. I would therefore answer, "No", to the first question.

12. The Respondent, however, submitted that Scott v. Pilliner ([1904] 2.K.B. 855) and Repton School Governors v. Repton Rural District Council ([1918] 2 K.B. 133) support the ultra vires submission.

13. In each case the validity of a by-law was challenged and in each the challenge was upheld on the basis that the by-law was unreasonable. I do not find any assistance from those cases because "Unreasonableness" as a basis for challenging the validity of subordinate legislation is peculiar to by-laws and is not a ground for holding a regulation ultra vires. (Bennion, Statutory Interpretation, p. 144). But even in relation to by-laws the court will, if it can, sever the provision which is ultra vires from the rest of the instrument. Before Dunkley v. Evans ([1981] 3 All E.R. 285) the cases suggested that severance as a remedy was only available if there was spatial separation within the text. In Dunkley, however, the Divisional Court ruled that the power "to sever the invalid portion of a piece of subordinate legislation from the valid should [not] be restricted to cases where the text of the legislation lends itself to judicial surgery or textual emendation by excision" (per Ormrod L.J. at p. 288). It was this power to modify so as to make subordinate legislation intra vires recognised by Dunkley which formed the basis of the decision in D.P.P v. Hutchinson ([1989] 1 All E.R. 1060). The judgment in Hutchinson was drawn to the attention of the parties by the learned magistrate. At that time, however, the only report available was the paraphrased judgment published in The Times on 25th October, 1988. The headnote in the All England Reports reads:-

"Where an administrative decision had a wider ambit than was permitted by the enabling Act the court would, in certain circumstances, reduce the ambit of the decision so as to preserve those parts of it which were intra vices. That would only be done where the court was sure that the altered decision represented that which the decision-maker would have made had he appreciated the limitation on his powers. Therefore, a person could be lawfully convicted of an offence against a byelaw which was wider than was permitted by the enabling statute where, had the byelaws been drawn only as widely as the enabling Act authorised, the person charged would still have been properly convicted."

14. The learned magistrate, without the benefit of that headnote, nevertheless directed himself that that was in effect what the judgment meant, but declined to accept an invitation by the Appellant to hold that regulation 5(a) applied only to wholesale transactions. In giving his reasons for declining he concluded by saying:-

"I could not be satisfied that the regulating authority intended that the application of Regulation 5(a) should be confined in the manner suggested ..... or would wish or approve of me now confining it in that way, namely that its application be confined to wholesale selling in a market conducted by the fish marketing organisation.

Rather I considered it was likely that the regulating authority intended to give the regulation both retail and wholesale application, perhaps under the (mistaken) belief that the legislation gave it power to so regulate.

Accordingly I did not consider that I could now restrict the application of Regulation 5(a) in such a way as to render it intra vires."

15. In applying Hutchinson to this case the learned magistrate was guided by a passage from The Times report which read as follows:-

"When the court is performing an exercise which is essentially the alteration of a decision made by another under statutory powers given to that other and not to the court, the court should only do so when sure that the altered decision represents that which the decision-maker would have enacted had he appreciated the limitation on his powers. For the court to go further would be to assume the function of the decision-maker."

16. The full report of the judgment, however, goes on from there as follows:-

"If, however, the court thus restricts itself in performing the modification exercise then it also overcomes the difficulty that the decision-maker failed to take into account the fact that he did not have such wide powers as he thought he had or was labouring under some mistake of fact." (p. 1070)

17. In this case one must assume that, if Regulation 5(a) is ultra vires, the regulation making authority - in this case the Governor-in-Council - enacted the provision without appreciating that the Ordinance did not empower the making of regulations in respect of retail marketing. On that assumption, if the regulation is restricted to selling and purchasing in wholesale markets conducted by the Fish Marketing Organization, the aim of the decision-maker is achieved and the modification "overcomes the difficulty that the decision-maker failed to take account of the fact that he did not have such wide powers as he thought he had". This was a case where if modification were needed to make the regulation intra vices, the modification exercise should have been carried out.

18. Mr. Pow, for the Respondent, submitted that Hutchinson was wrongly decided in that the Divisional Court applied severability principles which, though appropriate in documents containing power grants to public authorities and in dealing with instruments affecting civil liability in private law, were inappropriate when construing the penal provisions of a statutory instrument.

19. It is true that one of the cases relied on in Hutchinson was concerned with the extent to which an urban district council could pass resolutions appropriating land (Thames Water Authority v. Elmbridge Borough Council [1983] Q.B. 570). The Dunkley case, however, was directly concerned with criminal liability. This is clearly demonstrated by the particulars of the points of law of general public importance set out in the certificate granted following a refusal to grant leave to appeal. The material part of those particulars reads as follows:

"Whether where a statutory instrument (upon the true construction of which criminal liability depends) has been made partly ultra vires, the court can construe it and give effect to it in so far as it would probably have applied had it been made intra vires …" (at p. 290)

20. As Schiemann, J., observed in Hutchinson "the matter went no further". Hutchinson has, however, gone further. On 23rd February, 1989 the Appeal Committee of the House of Lords allowed petitions by the defendants for leave to appeal. So it may well be that Mr. Pow will eventually have a decision of the House of Lords to support his contention that Hutchinson was wrongly decided. In the meantime, however, I can see no good reason for not following a Divisional Court decision on all fours with the earlier Divisional Court decision in Dunkley.

21. Accordingly I would hold that, whether I am right or wrong in answering, "No", to the first question, the second must be answered, "No".