FOK LAI YING v. GOVERNOR IN COUNCIL AND OTHERS

IN THE COURT OF APPEAL

1996, No. 200
(Civil)

- Headnote -

Judicial review of Governor's decision under s3 of the Crown Lands Resumption Ordinance Cap 124 - Whether the statutory scheme for resumption of land for public purposes admitted of an implication that landowners be consulted and objections heard before the order was made - Bill of Rights - Whether the statutory scheme for resumption of land, and in particular s3 of the Crown Lands Resumption Ordinance, was inconsistent with Article 14 of the Bill of Rights in so far as the land to be resumed was used as the landowner's home.

Held (Court of Appeal):

(i) Re an application by K.O.Y. Investment Co. Ltd. [1983] HKLR 38 was correctly decided and should be followed.

(ii) The common law presumption that administrative powers will be applied with fairness is not an abstract concept; it depends upon the context of the statute creating the decision-making power. Fairness means fairness to all concerned. The principle cannot be applied in favour of one individual at the expense of the community and contrary to the statutory scheme.

(iii) Any implication of law should not only be fair but also be practical in operation and easy to comprehend.

(iv) In the context of the Crown Lands Resumption Ordinance, the Governor was bound to consult the Executive Council before ordering resumption, but not the landowners.

(v) The statutory scheme under the Ordinance for land resumptions was not inconsistent with the Bill of Rights.

IN THE COURT OF APPEAL

1996, No. 200
(Civil)

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J U D G M E N T

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Litton, V.-P. (giving the judgment of the Court):

Introduction

1. The respondent to this appeal is Madam Fok Lai Ying, the owner of an agricultural lot in the New Territories, namely Lot No. 853 RP in Demarcation District No. 194, Shatin. A three-storeyed village-styled house is erected on one extremity of the lot (a building licence having been granted for this purpose in 1982), leaving the rest of the lot, nearest to a public road, as an open paved area. Madam Fok and her family have been living in the property since the middle of last year. Before then, and for more than a decade, the property has been used as an old people's home.

2. On 6 December 1995 a resumption notice was published in the Gazette stating that a portion of Lot No. 853 RP - in effect, the open paved area of the property - has been ordered by the Governor to be resumed for a public purpose, together with many other agricultural lots in the same area.

3. Madam Fok is aggrieved by this decision.

4. On 19 March 1996 she took out an application in the High Court for leave to issue proceedings for judicial review of that decision. Leave having been granted, the matter went before Cheung J in September 1996. By his judgment dated 26 September 1996 the judge granted Madam Fok relief, declaring that the Governor's order was null and void, on the ground that the requirements of procedural fairness in the decision-making process had not been observed.

5. Madam Fok's portion of land, measuring about 2,100 square feet, was one of many agricultural lots included in a resumption scheme for village expansion in Shatin New Town Area No. 35: An area covering about 176 hectares which had been identified for village-type development in the Shatin Outline Zoning Plan approved by the Governor in Council back in July 1988.

6. The resumption notice, given under s4(1) of the Crown Lands Resumption Ordinance, Cap 124, is in standard form, addressed to the owner and every person interested in or having any right or easement in relation to the lots covered by the notice. It refers to a plan deposited in the District Lands Office Shatin which was available for inspection. It states:

"TAKE NOTICE THAT the Governor in Council having decided that the above mentioned lots and portions of lots are required for a public purpose, the Governor has ordered that the above mentioned lots and portions of lots shall be resumed and revert to the Crown on the expiration of THREE MONTHS from the date of the affixing of this Notice to the said land."

7. It is not suggested by Madam Fok that she had in any way been discriminated against, nor that the procedures adopted in relation to her case, leading to the order for resumption, were any different from those in relation to the many other owners of agricultural lots comprised in the same resumption notice. What is complained of is systemic unfairness which rendered the entire decision-making process leading to the Governor's order fatally flawed. In giving judgment in Madam Fok's favour, the judge said this (p.13-J judgment):

"In my view Madam Fok ought to be notified of the intended resumption and she ought to be given an opportunity to make representations to the Executive Council before the resumption. This has not [been] done, the requirement of fairness has not been observed and in so doing the resumption, in so far as it affects Madam Fok, ought to be quashed."

8. Although the judge confined the declaratory relief to Madam Fok's case, it is inevitable that if his judgment be correct it affects every other owner of land referred to in the notice of 6 December 1995, and probably most resumptions of agricultural land which have ever taken place in Hong Kong under the provisions of the Crown Lands Resumption Ordinance. If the law, properly applied, compels this result, so be it. But the consequences are so serious for the community that this calls for the most anxious scrutiny of the point on our part.

Village expansion scheme

9. All the lots covered by the resumption notice fall within Area 35 in the Shatin Outline Zoning Plan. The plan was approved by the Governor in Council on 5 July 1988 under s9(1)(a) of the Town Planning Ordinance and, of course, before it was approved the proposals in the draft plan went through the public consultation process laid down in ss 5 & 6 of the Town Planning Ordinance. To implement the scheme for "village-type development" referred to in the Outline Zoning Plan, the Planning Department had drawn up a number of layout plans indicating things like roads, pavements, car-parking spaces and the positions of units of housing. In the ordinary course of events, the layout plans were modified from time to time. In the final version - layout plan No. L/ST35/3 - it showed a development for 126 village-type house sites, with communal parking areas and access to the residential units by foot. To accommodate the scheme, the greater part of Lot No. 853 RP - used since about the middle of last year by Madam Fok and her family as an open paved area, partly for carparking - had to be resumed. Obviously, with the resumption having been declared unlawful by the judge, the village expansion scheme itself cannot be implemented.

The statutory frame-work

10. The Crown Lands Resumption Ordinance has been in the statute book since 1900. Section 3 states:

"3. Resumption of land for public purpose

Whenever the Governor in Council decides that the resumption of any land is required for a public purpose, the Governor may order the resumption thereof under this Ordinance."

11. The Ordinance makes provisions for compensation for land resumed. Section 10(1) empowers the Lands Tribunal to determine the amount of compensation payable by the Government on the basis of the loss or damage suffered by the claimant due to the resumption.

12. Section 4 of the Ordinance makes provisions for the giving of notices. Where relevant, it states:

"4. Notices

(1) Where resumption is ordered a notice that the land is required for a public purpose and will be resumed shall be published in the Gazette in English and Chinese.

(2) ....

(3) The notice affixed to the land shall state the date on which it has been so affixed. It shall also state that the land will be resumed on the expiration of one month from such date, unless the Governor shall have authorized the giving of a longer period of notice, in which case the longer period shall be stated."

13. Section 19 provides:

"19. Effect as evidence of notice of resumption

In any notice to resume any land, it shall be sufficient to state that the resumption of such land is required for a public purpose, without stating the particular purpose for which the land is required; and a notice containing such statement shall be conclusive evidence that the resumption is for a public purpose."

14. "Resumption for a public purpose" is widely defined in the Ordinance; it includes:

"(a) resumption of insanitary property for the purpose of securing the erection of improved dwellings or buildings thereon or the sanitary improvement of such property; and

(b) resumption of any land upon which any building is erected which, by reason of its proximity to or contact with any other buildings, seriously interferes with ventilation or otherwise makes or conduces to make such other buildings to be in a condition unfit for human habitation or dangerous or injurious to health; and

(c) resumption for any purpose connected with the naval, military or air forces of the Crown, including the volunteer forces in the Colony; and

(d) resumption for any purpose of whatsoever description whether ejusdem generis with any of the above purposes or not, which the Governor in Council may decide to be a public purpose."

Approach to construction

15. Section 19 of the Interpretation and General Clauses Ordinance, Cap 1, requires the courts to give the Crown Lands Resumption Ordinance such fair large and liberal construction as will best ensure the attainment of its object: which, by its long title, is "to facilitate the resumption of Crown lands required for public purposes".

16. Of course, as to the question of the Governor's exercise of power to resume land, although the Ordinance itself is silent, the common law requires that it must be done with fairness - that is to say, fair to all concerned; and fairness cannot be strained to such an extent as to frustrate the object of the statute.

Section 3 of the Ordinance

17. Where s3 empowers the Governor in Council to decide whether the resumption of land is required for a public purpose, the statute is, as mentioned earlier, silent as to how such a decision can be lawfully reached. There is nothing peculiar in this regard: many other statutes are similarly silent. Under the common law system, legislation often leaves the precise scope of an administrator's powers of decision to be implied. What, then, are the limits? Obviously, the decision must be made in good faith and for the purposes of the Ordinance; the decision-maker cannot act arbitrarily or capriciously. So much is clear. But is the Governor in this case obliged, before he exercises his powers under s3 to order the resumption of land, to give prior notice to property owners like Madam Fok and afford them an opportunity to make representations before the resumption order can be properly made? The judge said Yes, thereby departing from the judgment of the Full Bench in Re an application by K.O.Y. Investment Co. Ltd. [1983] HKLR 38.

K.O.Y. Investment Co. Ltd.

18. There, Mayo, Hunter and Mantell JJ. held that, having regard to the statutory scheme as a whole, the Governor was not required to entertain representations from landowners before ordering the resumption of land for public purposes: s3 of the Ordinance required only that the Executive Council be consulted; s4 in clear terms provided for notice to be given to landowners after the Governor had ordered resumption under s3; to allow for "representations" from landowners before the resumption order required in effect a system of public enquiry for which the Ordinance made no provision.

The judge refused to follow K.O.Y. Investment Co. Ltd.

19. The judge appears to have thought that the recent decision of the House of Lords in R. v. Secretary of State for the Home Department, ex parte Doody [1994] 1 AC 531 required this area of the law to be revisited. He therefore refused to follow the decision of the Full Bench in K.O.Y. Investment Co. Ltd.

20. We have difficulty with this approach. Ex parte Doody was not concerned in any way with a scheme of public works which, by its very nature, means that private property rights may have to be subordinated to the wider public interest. The case was concerned simply with the decision-making process of the Home Secretary when considering the date when a person, sentenced to life imprisonment, might be released upon licence under s61 of the Criminal Justice Act 1967. In considering the penal element of the sentence, the Home Secretary was bound to consult the judiciary. One of the issues in the case was whether the Home Secretary was required to inform the prisoner of the period recommended by the judiciary which he should serve and any opinion expressed by the judiciary relevant to the Home Secretary's decision. As can be seen, there was no question here of the weighing up of competing interests; the Home Secretary's focus was purely upon the circumstances of the prisoner himself. In this situation, it is difficult to see strong arguments for saying that fairness did not require those disclosures so that the prisoner could make meaningful representations before the question of his release upon licence was made.

21. In our judgment ex parte Doody broke no new ground. It simply re-affirmed the courts' approach in Ridge v. Baldwin [1964] AC 40 where this area of administrative law was extensively reviewed by the House of Lords.

Fairness in action

22. It is unnecessary to rehearse the principles set out in the judgments in Ridge v. Baldwin: sometimes summarized in the books as fairness in action.

23. We would accept counsel's broad proposition that where a statute confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances. But fairness is not an abstract concept. It depends on the context of the decision: in particular, the context of the statute creating the decision-making power. It cannot be applied in favour of one individual at the expense of the community and contrary to the object of the entire statutory scheme.

24. Accepting, as counsel for Madam Fok argues, that in considering the requirements of fairness, it is not very helpful to use labels such as "quasi-judicial functions" and "administrative decisions", for they simply identify gradations within the same spectrum, the reality behind the decision-making process must still be recognised. At one extremity of the spectrum are what Megarry VC called, in McInnes v. Onslow-Fane [1978]1 WLR 1520 at 1529-A, the "forfeiture cases" where for example a member of an organisation is expelled or an office is terminated: Here, the courts would normally apply the audi alteram partem rule, recognising the party's right to be heard. At the other end of the spectrum are cases of purely administrative decisions where the decision-maker has to weigh many, and often conflicting, interests; where to allow everyone a "right to be heard" would be to frustrate the very purpose of the exercise. As Lord Reid said in Ridge v. Baldwin at 73:

"Sometimes the functions of a Minister or department may be of [a quasi-judicial] character, and then the rules of natural justice can apply in much the same way. But more often their functions are of a very different character. If a Minister is considering whether to make a scheme for, say, an important new road, his primary concern will not be with the damage which its construction will do to the rights of individual owners of land. He will have to consider all manner of questions of public interest and, it may be, a number of alternative schemes. He cannot be prevented from attaching more importance to the fulfilment of his policy than to the fate of individual objectors, and it would be quite wrong for the court to say that the Minister should, or could act in the same kind of way as a board of works deciding whether a house should be pulled down. And there is another important difference. As explained in Local Government Board v. Arlidge [1915] AC 120 a Minister cannot do everything himself. His officers will have to gather and sift all the facts, including objections by individuals, and no individual can complain if the ordinary accepted methods of carrying on public business do not give him as good protection as could be given by the principles natural justice in a different kind of case."

25. The reference to a "board of works deciding whether a house should be pulled down" is a reference to Cooper v. Wandsworth Board of Works [1863]14 CB(NS) 180: A case relied upon by Cheung J in the court below. He quoted a passage from Willes J's judgment at p190 to this effect:

"I apprehend that a tribunal which is by law vested with power to affect the property of one of Her Majesty's subjects, is bound to give such subject an opportunity of being heard before it proceeds: and that that rule is of universal application, and founded upon the plainest principles of justice."

26. Where Willes J said that the rule was of "universal application" he was not purporting to lay down a rule applicable to every case where a statute confers a power on an administrator to act; he was only addressing instances where the statute conferred "powers which [had] always been considered judicial"; and, referring to the section under which the district board ordered demolition he said: "and it is clear that these boards do exercise judicial powers": see p191.

27. That case did not concern a scheme of public works involving a variety of possibly competing interests: It concerned one owner only: whether a partly-built house erected without permission should be demolished. No other interests were involved in the decision-making process. As Erle CJ said (at 188):

"I cannot conceive any harm that could happen to the district board from hearing the party before they subjected him to a loss so serious as the demolition of his house; but I can conceive a great many advantages which might arise in the way of public order, in the way of doing substantial justice, and in the way of fulfilling the purposes of the statute, by the restriction which we put upon them, that they should hear the party before they inflict upon him such a heavy loss." (Emphasis added).

28. As can be seen, the court must, at the end of the day, focus attention upon the statutory purpose, and any qualification of the exercise of statutory power by the application of common law principles cannot go so far as to frustrate the statutory purpose.

29. In our judgment, this area of the law has not changed since Re an application by K.O.Y. Investment Co. Ltd. was decided by the Full Bench in 1982 and in so far as the judge thought it had he was in error.

The correct approach

30. The judge did not say what the Government should, in the circumstances of this case, have done beyond the statement that Madam Fok was "entitled in law to know the particulars of the resumption and be afforded an opportunity to make representations before the decision to resume her land was made". If by "particulars of the resumption" the judge meant the details of the proposed public works, the implications are far reaching. Is the Governor, by the bare words in s3 of the Ordinance, required by law to entertain objections to and alternative proposals for the public works involved before the decision to resume is made? What about the objections of other landowners apart from Madam Fok? For her proposals to be effective, presumably the details of other people's objections should be made known to her as well: and vice versa. To be meaningful, her objections, and those of other interested parties, may have to be underpinned by experts. And are objections to be confined to landowners? What appears to be envisaged if the judge be right is some kind of full-blown public inquiry: a judge-made scheme of an amorphous kind: all arising by mere implication from a few lines of the statute.

31. In our judgment, such an approach is wholly untenable. The concept of fairness in action cannot be invoked to destroy a statutory scheme. The justice of the common law, coming to the aid of an individual, cannot supply the omissions of the legislature in this way.

32. Administrative law governs the activities of all government departments. It is vitally important that any implication of law, arising from the express words of a statute, should not only be fair but also be practical in operation and easy to comprehend. Otherwise, administrative law would create not fairness but chaos.

33. As Lord Hailsham said in Pearlberg v. Varty (1972) 1 WLR 534 at 540, whilst of course the courts will lean heavily against any construction of a statute which would be manifestly unfair, they have no power to amend or supplement the language of a statute merely because on one view of the matter a subject feels himself entitled to a larger degree of say in the making of a decision than the statute accords him: still less is it the function of the courts to form first a judgment on the fairness of a statute and then to amend or supplement it with new provisions so as to make it conform to that judgment.

34. The implications which the judge would read into the Crown Lands Resumption Ordinance clearly offend this principle.

35. We would accordingly reject the judge's approach and re-affirm the law as stated in Re an application of K.O.Y. Investment Co. Ltd. that, prior to a decision to resume land for a public purpose, the Governor is not bound to consult anyone other than the Executive Council.

The factual position

36. In fact, Madam Fok has had ample opportunities to make representations to the Government concerning the village expansion scheme; likewise the threat of resumption of part of her land; she did, in fact, do so.

37. As mentioned earlier, there was, back in 1988, a process of public consultation under the Town Planning Ordinance before the Shatin Outline Zoning Plan, indicating a village-type development for Area 35, was approved by the Governor in Council. A series of layout plans were then published. The earlier plans left Madam Fok's land untouched. It was not until October 1990, when layout plan No. L/ST35/2A was made that the scheme involved the greater portion of Lot No. 853 RP.

38. On 7 October 1991 the District Lands Office wrote to Madam Fok adverting to the village expansion scheme and mentioned specifically the possibility of land resumption.

39. In July 1993 a statutory plan was published under the Roads (Works, Use and Compensation) Ordinance, Cap 370 indicating the possibility that direct vehicular access to the house might be curtailed. By November 1993 solicitors acting for Madam Fok had appeared on the scene and there was correspondence with the District Lands Office.

40. Some time thereafter, Madam Fok had also the services of a firm of surveyors, who, in February 1995, wrote to the Government objecting to the layout plan affecting her property. Then, on 27 March 1995, solicitors for Madam Fok wrote to the Clerk to the Executive Council objecting to the threat of resumption.

41. At no stage did any of Madam Fok's professional advisors say that she did not have enough information to formulate valid objections. She did lodge objections, and those were entertained by the Governor in Council before the order was made.

42. On the facts, her allegations of procedural unfairness are groundless.

Bill of Rights

43. Concerning the Hong Kong Bill of Rights, the relief which Madam Fok sought in the High Court was a declaratory judgment to this effect:

"(1) For a Declaration that the statutory scheme of resumption of Crown land for a public purpose, in the meaning of paragraph (d) of section 2, enacted in sections 2, 3, 4, 5, 9 and 19 of the Crown Lands Resumption Ordinance (Cap. 124) is inconsistent with Article 14 of the Hong Kong Bill of Rights Ordinance (Cap. 383)("HKBORO") and, thus, has been repealed pursuant to section 3(2) of the HKBORO so far as the Crown land to be resumed is treated as home by the Crown lessee;"

44. As can be seen, it is not averred that the provisions of the Ordinance sought to be impeached are wholly inconsistent with Article 14 of the Bill of Rights: It is said that those provisions are inconsistent to the extent that they are aimed at land "treated as home by the Crown lessee". This is because counsel for Madam Fok recognises that the Hong Kong Bill of Rights Ordinance, enacting as part of the domestic laws of Hong Kong the International Covenant on Civil and Political Rights (ICCPR), gives no guarantee of private property rights generally. It is said however by counsel that Article 14 of the Bill of Rights is wide enough to protect property rights where the property concerned is used as a "home" by the party affected.

45. The proposition contended for by counsel leads to this odd result: whilst legislation such as the Crown Lands Resumption Ordinance empowering the resumption of private land used as a home is inconsistent with the Bill of Rights, even though the home-owner is compensated for the resumption, the Hong Kong legislature is entitled under the international covenant to pass laws for the expropriation of every other kind of property without compensation.

46. A view of the law which leads to such paradoxical results requires the closest scrutiny.

47. Article 14 of the Hong Kong Bill of Rights provides:

" Article 14

Protection of privacy, family, home

correspondence, honour and reputation

(1) No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation.

(2) Everyone has the right to the protection of the law against such interference or attacks."

Is Article 14 of the Bill of Rights engaged?

48. Cheung J concluded that Article 14 was not engaged: It had no application to the present case since the Bill of Rights gave no protection to the ownership of private property.

49. Counsel for Madam Fok argues that this is too restrictive a view of the expression "home" in Article 14. He draws attention to the decision of the European Commission on Human Rights in Howard v. United Kingdom 52 DR 198 [1987] EcomHR where the admissibility of an application by a home-owner complaining against the compulsory purchase of his home under the United Kingdom Town and Country Planning Acts was considered. There, it was Article 8 of the European Convention which was invoked. Article 8(1) says:

"1. Everyone has the right to respect for his private and family life, his home and his correspondence."

50. The United Kingdom Government accepted the proposition that the compulsory purchase of the applicant's home under a compulsory purchase order constituted an interference with his rights guarantee by Article 8(1) of the Convention but contended that the interference was justified.

51. In our judgment, it is unnecessary - and may be unwise - to shut the door completely in the face of a home-owner in a case such as this, when the interpretation of the word "home" in the Bill of Rights, given its international origin, is necessarily wide.

52. Assuming, without deciding, that Article 14 is wide enough to protect property used as a home, the question has then to be addressed: Does the scheme of resumption of private land for public purposes under the Crown Lands Resumption Ordinance constitute "arbitrary or unlawful interference"?

Arbitrary or unlawful interference

53. Counsel, for all their industry, have not been able to cite a single instance in the international law field where the resumption of private land with compensation has constituted "arbitrary or unlawful interference".

54. In this regard, James v. United Kingdom (1986) 8 EHRR 123 is instructive. It was a decision of the European Court of Human Rights. Article 1 of Protocol No. 1 to the European Convention, unlike the ICCPR, gives clear protection to proprietary rights. It provides:

"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of the State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."

55. In James v. United Kingdom the applicants were trustees of the will of the second Duke of Westminster. They complained that the compulsory transfer to tenants of properties owned by the Duke under the Leasehold Reform Act 1967 amounted to a breach of Article 1 of Protocol No. 1. This argument was rejected. The Court upheld the United Kingdom Parliament's right to enact laws in the public interest when implementing social and economic policies: leasehold enfranchisement legislation was within the United Kingdom Parliament's margin of appreciation.

56. In our judgment, the simple scheme for resuming land for public purposes set out in the Crown Lands Resumption Ordinance does not constitute any form of arbitrary or unlawful interference with private rights and Madam Fok's challenge under Article 14 must fail. We would therefore uphold Cheung J's judgment refusing Madam Fok declaratory relief as sought, though not for quite the same reasons as the judge expressed.

Conclusion

57. In our judgment, this appeal succeeds. We would discharge the judge's order of 26 September 1996 whereby he declared that the Governor's order for the resumption of Madam Fok's land, pursuant to the notice dated 6 December 1995, null and void. We would likewise discharge Cheung J's order for costs, and make an order nisi that Madam Fok pays the costs here and below.