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

Headnotes

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ADMIRALTY JURISDICTION

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BETWEEN

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DECISION

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1. On the 11th July 1982 there occurred a collision between 2 hydrofoils owned by the Plaintiff. Damage, personal injury and loss of life occurred. Claims exceed $2 million. However, the Plaintiff seeks a declaration, pursuant to the provisions of the Merchant Shipping Acts 1894 - 1979, that its liability be limited. If so limited, the fund available will at most be about $800,000 so that the various defendants will receive only a pro rata payment of their individual claims.

2. Two defendants are the administrators of a crew member who died in or as a result of the collision. It is their contention that the Plaintiff is not entitled to limit its liability to them because s.35(1) of the Merchant Shipping Act 1979 applies in Hong Kong. I directed that this question be tried as a preliminary issue.

3. S.35(1) of the 1979 Act reads:

"     Nothing in section 503 of the Merchant Shipping Act 1894 (which relates to the limitation of liability in certain cases of loss of life, injury or damages) shall apply to any liability in respect of loss of life or personal injury caused to, or loss of or damage to any property of, a person who is on board or employed in connection with the ship in question if -

(a)	he is so on board or employed under a contract of service governed by the law of any part of the United Kingdom; and
(b)	the liability arises from an occurrence which took place after the coming into force of this subsection and before the coming into force of the following subsection;

 

and in this subsection "ship" has the same meaning as in the said section 503."

 

4. If the Administrators are correct, the effect will be that their claim is at large while the fund available for distribution between the remaining defendants is proportionately increased.

5. Mr. Sussex, who appeared for the Administrators, based his submission on s.117(1) of the Merchant Shipping Ordinance, Cap.281 (the Ordinance) which reads:

"     Such of the provisions of the Merchant Shipping Acts as apply to the Colony and are inconsistent with the provisions of this Ordinance are hereby repealed so far as they relate to ships registered in the Colony. But in all other respects the provisions of the said Acts shall be deemed to be in force in the Colony, so far as they are applicable thereto, and to extend, so far as they can be extended, to all ships registered in the Colony and to the owners, masters and crews of such ships:

 

       Provided however that the provisions of the Merchant Shipping (Safety and Load Line Conventions) Act 1932, and of the Merchant Shipping (Safety Convention) Act 1949, shall extend to Colony and to ships registered therein and their owners, masters and crews only to the extent that the same shall have been extended to the Colony by Order of Her Majesty in Council."

6. The Merchant Shipping Acts referred to in s.117(1) are as defined in s.2 of the Ordinance and include the 1979 Act. I shall refer to them as "the Acts".

7. Mr. Sussex placed no reliance upon the proviso. Mr. Ma, who appeared for the plaintiff, therefore, did not address me upon it although he had been prepared to do so.

8. Section 4(1)(b) of the Application of English Law Ordinance, Cap.88, provides that an Act of Parliament may be in force in Hong Kong by virtue of, inter alia, any Ordinance. Mr. Sussex says that s.117(1) of the Ordinance is an example of this. The first sentence of the subsection is an exercise of the power conferred on a colonial legislature by s.735(1) of the Merchant Shipping Act 1894 which reads:

 

"     The legislature of any British possession may by any Act or Ordinance, confirmed by  Her Majesty in Council, repeal, wholly or in part, any provisions of this Act (other than those of the Third Part thereof which relate to emigrant ships), relating to ships registered in that possession; but any such Act or Ordinance shall not take effect until the approval of Her Majesty has been proclaimed in the possession, or until such time thereafter as may be fixed by the Act or Ordinance for the purpose."

9. The next sentence, says Mr. Sussex, incorporates by reference all other provisions of the Acts in so far as they are capable of application to Hong Kong. He contends that the words underlined are the true meaning of "applicable" which is as defined in the Oxford English Dictionary.

10. Mr. Ma has 2 objections to this contention. First, he says that the interpretation contended for is wrong. In the first sentence of s.117(1), he says that the words "as apply to" qualify the Words "Merchant Shipping Acts" so that the sentence is not a general statement in relation to all the Acts. Although Mr. Sussex did not address himself to this point, it must be wrong. The Acts themselves do not apply to Hong Kong, only Parts and sections thereof either by express provision in the Acts themselves, by Order in Council or by local legislation. The words "as apply to" must clearly qualify "the provisions", being provisions applied by one of the methods to which I have just referred. The words 'Merchant Shipping Acts" must therefore be a reference to the Acts and not to a limited number of individual Acts which somehow apply to Hong Kong.

11. Then, continues Mr. Ma, the second sentence of s.117(1) follows and emphasises the first. "The said Acts" means those of the Acts which apply to Hong Kong and "so far as they are applicable means "so far as they apply to". In other words, it is simply a restatement of the fact that certain provisions apply to Hong Kong.

12. Mr. Ma also argues that s.117(1) came into effect in 1953 and must be looked at a against the background of the 1894 Act. That Act has a careful scheme whereby its provisions are applied to overseas territories. Three methods are provided:

13. Therefore it is wrong for s.117(1) to have the sweeping effect sought by Mr. Sussex. Much clearer wording is necessary to achieve this. Section 117(1), says Mr. Ma, only has effect where provisions of the Acts do apply to Hong Kong by one of the methods provided.

14. I have already disposed of the meaning of the Acts in the first sentence. Accordingly, "the said Acts" must refer to the Acts and not a limited number.

15. It is presumed, as Mr. Sussex says, that Words in a statute are not used unnecessarily: 44 Halsbury's Statutes (4th Ed.) para. 861. If Mr. Ma's interpretation is correct, the Hong Kong legislature has said the same thing twice; the first sentence of s.117(1) means:

"in so far as the Acts apply but are inconsistent they are repealed";

 

while the second sentence means:

"If the Acts are not inconsistent, they apply".

 

16. Further, there is the use of the word "deemed" . Why, asks Mr. Sussex, is it necessary to use this word if, according to Mr. Ma, the Acts or the provisions thereof apply anyway because of the scheme of the 1894 Act.

17. With these 2 factors in mind, Mr. Sussex says that the intention and meaning of the second sentence is to bring in to force "so far as they are capable of application those provisions of the Acts which do not already apply". That interpretation will give "applicable" its natural meaning and avoid attributing to the legislature unnecessary use of words.

18. Mr. Ma complains, however, that if that is the correct interpretation the consequences are alarming. He points out that much of the Merchant Shipping Legislation is made pursuant to international conventions in which the U.K. Government represents Hong Kong. The 1979 Act is largely based on the Athen's convention which has not yet been ratified by the U.K.. For the time being therefore the relevant provisions in the 1979 Act have not been brought into force in the U.K. It would be curious, says Mr. Ma, if these provisions already apply in Hong Kong when the Convention on which they are based has not yet been ratified by the U. K. and other parties.

19. According to Mr. Sussex, the answer is that the Acts, as defined, include all regulations made thereunder, while s.78 of the Interpretation and General Clauses Ordinance, Cap.1, provides that a reference to any Imperial enactment shall include a reference to any (inter alia) order made under or by virtue thereof and having legislative effect. Section 52(2) of the 1979 Act provides for commencement of the Act on such day as the Secretary of State may appoint by order. Therefore, a provision in the Act which remains suspended in the U.K. until brought into force by order, equally remains suspended or does not come into force in Hong Kong until the making of such order.

20. Thus, The Merchant Shipping Act 1979 (Commencement No. l) Order 1979 brought into operation on 1st August 1979, inter alia, s. 35(1) of that Act. Section 35(1), of course, is the provision with which we are concerned.

21. Clearly an "order" is not a "regulation" so the definition of the Acts in Cap.281 does not assist Mr. Sussex; but s.78 of Cap.1 must apply. The effect of s. 52(2) of the 1979 Act is that the legislation remained suspended in U.K. and the same must follow for Hong Kong. When the Commencement No.1 Order was made, only then did those provisions brought into force in U.K. and capable of being applied in Hong Kong become effective here.

22. Anyway, it must be implicit that s.117(1) and any other statutory provision that seeks to incorporate U.K. legislation could only incorporate legislation that has the force of law in U.K. and is not simply on the statute book waiting to be given life by order of the Secretary of State or other instrument.

23. I am persuaded, therefore, that Mr. Sussex is correct in his interpretation and that it does not have the alarming effect that Mr. Ma fears. However, Mr. Ma then argues that s.117(1) cannot in those circumstances be reconciled with the 1979 Act, it must be repugnant, and void and inoperative under s.2 of the Colonial Laws Validity Act 1865. His argument is that the 1979 Act in s.47(1) specifically provides the method by which any provision of that Act may be extended to a colony, that is, by Order in Council. It is inconsistent for the Hong Kong legislature to introduce provisions which the Queen in Council has been given power to apply or extend to Hong Kong. Any Orders in Council will thereby be rendered superfluous.

The superiority of the Crown is entrenched.

24. Whilst acknowledging the power of the Crown to legislate for its territories, I do not see inconsistency. Section 117(1) specifically says, and it must necessarily be so because Hong Kong cannot legislate extraterritorially, that the provisions of the Acts extend to ships registered in the Colony. The Acts have, however, many provisions that can only be applied or extended to Hong Kong by Order in Council. It seems to me entirely logical that Hong Kong should, without too much difficulty, be able to introduce provisions of the Acts in relation to its own shipping while the Crown introduces by Order in Council provisions having a wider effect.

25. As Mr. Sussex also points out, s.47(1) of the 1979 Act uses the permissive "may". It is doubtful whether this removes the ability of the Hong Kong legislature to introduce legislation which the Crown has not. The Crown can, of course, legislate directly for Hong Kong in any matter it chooses, but that has not prevented Hong Kong legislating for itself in almost all its affairs.

26. We have already seen that s.735(1) of the 1894 Act empowers a colonial legislature to repeal provisions that have been made to apply to its territory. That is a formidable power. It emphasises colonial automony in relation to locally registered ships

27. I was referred to Johnson v. Wong Fu Ng Vols.4 - 5, HKLR 203, in which the Full Court had to decide whether s.287 of the 1894 Act, which had not been applied to Hong Kong by the Act itself, did apply to Hong Kong by virtue of the then equivalent of s.117(1). In his judgment, the then Chief Justice said, at page 209:

"     Now the question here raised turns on the construction of s. 41 of the local Ordinance - No. 10 of 1899 - as amended in 1903 and 1910:and it has been assumed that this is based on s. 735. There is in the first place a repeal, so far as relates to ships registered in the Colony, of so much of the imperial Merchant Shipping Acts as is inconsistent with the Ordinance. This is a mistake; it should be, of so much of those Acts which apply to the Colonies as is inconsistent with the Ordinance. Then it goes on - in all other respects, the provisions of the Act, so far as they are not inconsistent with the Ordinance, shall be in force in the Colony, with a special reference to certain subjects, of which "discipline" is one, and be applied to all ships registered in this Colony, when such ships are within the jurisdiction of this Government. This, therefore, is express legislation, by reference to the Imperial Act, on matters which are within the province of the local Legislature, and it includes s. 287: and it applies only to ships registered in the Colony and when they are within the jurisdiction."

28. Section 41(1) of Ordinance No.10 of 1899, reads:

 

"     Such of the provisions of the Merchant Shipping Acts which apply to the Colony and are inconsistent with the provisions of this Ordinance are hereby repealed so far as they relate to ships registered in this Colony; but in all other respects the provisions of the Merchant Shipping Acts, so far as they are not inconsistent with the provisions of this Ordinance, shall be in force in this Colony, and in particular such as relate to rights to wages and remedies for the recovery thereof, to leaving seamen abroad, to the provisions, health, and accommodation of seamen, to the power of seamen to make complaints, to the protection of seamen from imposition, to discipline, to official logs, and to crimes committed abroad shall apply, mutatis mutandis and so far as the same can be extended, to all ships registered in this Colony, when such ships are within the waters of the Colony, and to the owners, masters, and crews of such ships."

29. There are significant differences between s.41(1) and s.117(1). The words "applicable" and "deemed" are not used and the word "said" is missing before the second reference to the Merchant Shipping Acts. As far as interpretation goes, therefore, the case is of little assistance. Nonetheless, the Full Court clearly had no qualms about the validity of s.41(1)

30. Mr. Ma drew attention to an earlier passage in the Chief Justice's judgment where, at p.208, he said:

 

"Therefore s.287 does not apply to the Colonies. Therefore it is clear that as the Imperial Act does not stand in the way, the local Legislature has ample powers to deal with the subject matter of s. 287......"

31. Mr. Ma suggested that the instant case is different because the 1979 Act, by providing that its provisions may be extended by Order in Council, does stand in the way. I am unable to accept that, particularly, as Mr. Ma has been careful to show, there was a scheme under the 1894 Act for the application of its provisions to colonies.

32. I am satisfied that s.117(1) is not inconsistent or irreconcilable with the 1979 Act. No question of repugnancy, therefore, arises.

33. There was, I think, no dispute that there is ample provision in Cap.1, inter alia, s.75 for making the necessary modifications to provisions incorporated by reference so that they shall suit the circumstances of Hong Kong.

34. Accordingly, I rule that s.35(1) of the 1979 Act applies in Hong Kong.