SY CHOK LUEN v. THE DIRECTOR OF ENVIRONMENTAL PROTECTION

1997 A.L. No. 67

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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Introduction

1. This is an application for judicial review. The decision challenged is the refusal of the Director of Environmental Protection to pay to the Applicant an allowance under the Livestock Waste Control Scheme. The amount at stake is not substantial, but I was told that my decision in this case could affect a number of similar claims. I have therefore taken some time to consider the careful and comprehensive arguments which were presented to me.

The Livestock Waste Control Scheme

2. The Livestock Waste Control Scheme ("the LWCS") requires persons who keep livestock to comply with various requirements relating to the storage, collection, transportation and disposal of livestock waste. It was introduced in phases, and by 1995 it covered the whole of Hong Kong. However, it was recognised that livestock keepers would be put to expense in complying with the requirements of the LWCS, and it was therefore decided to offer financial assistance to livestock keepers affected by the LWCS. That assistance took two forms:

(i) A capital grant was payable to those livestock keepers who decided that they would continue keeping livestock. This was intended to contribute to the costs of installing the waste treatment facilities which were needed to comply with the requirements of the LWCS.

(ii) An ex gratia allowance was payable to those livestock keepers who decided that they would no longer keep livestock. This was intended to compensate them for the cessation of their business, and to tide them over until they could find an alternative source of income.

3. In October and November 1987, a survey had been conducted to identify those livestock keepers who might be entitled to financial assistance. The survey was conducted then because it was in October 1987 that a new Part IIIA was added to the Waste Disposal Ordinance (Cap. 354) dealing with the control of livestock waste. The survey was called "the freezing survey", and it identified such livestock structures as had been erected. A further survey was conducted shortly before the LWCS was implemented in a particular area. This survey also identified the livestock structures on the land, and it was called "the pre-operational survey".

4. In the light of these surveys, it was decided that before a livestock keeper could receive financial assistance under the LWCS (whether in the form of a capital grant or an ex gratia allowance), he had to satisfy two conditions:

(i) His livestock keeping and related structures had to have been in existence at the time of the freezing survey, and they must have been recorded as being used for keeping livestock.

(ii) The same structures had to be used for keeping livestock when the pre-operational survey took place.

5. Internal guidelines were issued to those officers who had to calculate ex gratia allowances payable under the LWCS. They gave officers a measure of discretion in the matter. Thus, para. 1.6 of the 3rd edition of the guidelines (issued in June 1992) provided:

"These guidelines may not be applicable to some cases of special circumstances. The subject officer should exercise his discretion as appropriate."

However, it is important to remember that these guidelines related only to the assessment of the ex gratia allowance. They did not relate to a livestock keeper's eligibility for the allowance, which had at all times been subject to the two conditions imposed when the LWCS was established. The guidelines do not confer on officers a discretion to dispense with compliance with those conditions in a deserving case.

The Development Clearance Compensation Scheme

6. Land is occasionally required by the Government for development or other purposes. When that happens, tenants of the land are entitled to financial assistance under the Development Clearance Compensation Scheme ("the DCCS"). That assistance is in the form of an ex gratia allowance, and in the case of poultry farmers it is set at a level which is designed to compensate them for their loss of profit while they are establishing their farms elsewhere and for half of the cost of replacing farm fixtures.

7. However, it may be that persons are eligible for ex gratia allowances under both the LWCS and the DCCS. In those circumstances, Government policy is to pay allowances under either the LWCS or the DCCS, but not both. The rationale is to prevent double compensation being given, but in order to mitigate the effect of the prohibition on double compensation, persons are offered "where possible" whichever is calculated to be the larger of the two allowances.

The Applicant's Farm

8. The Applicant is the tenant of a plot of land in Yuen Long. He has been raising pigeons there since 1986. By 1987, he had arranged for a pigeon shed and other structures (including a storeroom for keeping foodstuffs) to be erected on the land. These structures were referred to in the freezing survey, and were recorded as being used for keeping livestock.

9. In due course, it was decided that part of the Applicant's land was going to be required by the Government for a public sewer project. The storeroom was not on that part of the land which the Government proposed to resume. Accordingly, the structures which the Applicant had caused to be erected (apart from the storeroom) were demolished by the Housing Department in October 1989, and the Applicant received the sum of $190,044.13 by way of an ex gratia allowance under the DCCS.

10. The Applicant wanted to re-establish his pigeon farm on the remaining part of his land. By March 1991, a new shed had been built, the storeroom (which had not been demolished) had been moved, and a small porch had been erected. Approval for the erection of these structures was given a few months later. In April 1992, they were referred to in the pre-operational survey.

The Applicant's Claim for Financial Assistance under the LWCS

11. The LWCS applied to the area in which the Applicant's land was with effect from 1st June 1992. Accordingly, if the Applicant was regarded as having satisfied the two conditions for eligibility for financial assistance under the LWCS, he became entitled at that stage to financial assistance under the LWCS. He decided to cease livestock farming, and accordingly on 18th September 1992 he applied to the Environmental Protection Department for an ex gratia allowance (as oppose to a capital grant) under the LWCS.

12. This application was refused on the basis that the shed and the porch had not been in existence at the time of the freezing survey, and that although the storeroom had been in existence then, it was not regarded as a storeroom which was being used exclusively for keeping livestock. The Applicant was notified of the refusal by letter dated 28th January 1993, but he was not given the reasons why he was not regarded as having satisfied the two conditions. The Applicant complained about the refusal of his application, but by letter dated 12th May 1993 the refusal was confirmed. The Applicant complained once again about the refusal of his application. This was treated as an appeal against the refusal of his application. By letter dated 2nd August 1993, the Applicant's appeal was dismissed, though on this occasion it was also said that he could not be paid an ex gratia allowance under the LWCS because he had already received an ex gratia allowance under the DCCS.

13. Despite the dismissal of the Applicant's appeal, the Environmental Protection Department decided to conduct an independent review of the Applicant's entitlement to an ex gratia allowance under the LWCS. By letter dated 23rd September 1993, the Applicant was informed that the storeroom qualified for an ex gratia allowance, on the footing that part of it was being used for keeping livestock. The amount was subsequently calculated to be $1,982.05. The Applicant complained yet again about not being granted a full ex gratia allowance, but on 30th December 1993 he was told that the result of the independent review represented the Department's final position on the topic. That is the decision challenged on this application.

Delay

14. The Applicant's Notice of Application for leave to apply for judicial review was filed on 28th July 1997. That was about 43 months after the Applicant knew that the Department had confirmed that he was not to be paid the ex gratia allowance for which he had applied. When Sears J. granted the Applicant leave to apply for judicial review, he did not expressly extend the Applicant's time for applying for leave to apply for judicial review. Since he granted the Applicant leave, however, he must implicitly have extended the Applicant's time.

15. In R. v. Criminal Injuries Compensation Board ex p. A. [1997] 3 WLR 776, the Court of Appeal in England held that once the court had extended an applicant's time for applying for leave to apply for judicial review, delay cannot disentitle an applicant from the relief to which he would otherwise be entitled, unless the delay "would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration": see section 31(6) of the Supreme Court Act 1981, which is identical to section 21K(6) of the Supreme Court Ordinance (Cap. 4). This has not been the approach in Hong Kong. In a number of cases, it has been held that the judge is entitled to revisit the issue of delay at the substantive hearing even if hardship, prejudice or detriment is not present: see, for example, The Association of Expatriate Civil Servants of Hong Kong v. The Secretary for the Civil Service (1995) 5 HKPLR 490 and Moc A Pao v. The Director of Immigration (HCMP 4280/96), though in those cases the court at the leave stage expressly reserved its right to reconsider the question of delay at the substantive hearing. I was not addressed on the issue as to whether the approach in England should be followed. However, the issue does not arise in view of the conclusion I have reached on the merits of the application.

Double Compensation

16. I have already referred to the fact that the Applicant's receipt of an ex gratia allowance under the DCCS was regarded at one stage as disqualifying him from receiving an ex gratia allowance under the LWCS. That view was not persisted in by the Department: otherwise, the Applicant would not have been regarded as even entitled to the modest allowance payable to him in respect of the storeroom. Indeed, Mr. Johnny Mok for the Respondent did not seek to justify the refusal of the allowance on the basis that the Applicant had already received an allowance under the DCCS. That was a realistic stance to adopt. The prohibition on double compensation was clearly intended to be applicable only where the allowances were payable in respect of the same set of facts. In the Applicant's case, the allowances were payable in respect of two different sets of facts. The allowance under the DCCS had been payable because of the demolition of the Applicant's shed in 1989 to enable the public sewer project to proceed. The allowance under the LWCS was payable, if at all, because of the Applicant's decision to cease keeping pigeons because of the extension to his land in 1992 of the LWCS.

The Role of Judicial Review

17. Mr. S. H. Kwok for the Applicant concentrated his attack on the Department's refusal to pay to the Applicant a full ex gratia allowance. However, the shed and the porch had not been in existence at the time of the freezing survey. Accordingly, the refusal of which complaint is made was in accordance with the terms of the LWCS. Since the LWCS did not confer on the officers who implemented it a discretion to pay the ex gratia allowance even if the conditions for its payment had not been strictly satisfied, the Applicant has to be able to challenge the LWCS itself if his application for judicial review is to succeed. That accords with what was said in R. v. Criminal Injuries Compensation Board ex p. P. [1995] 1 WLR 845 by Peter Gibson, L.J. at p.862F:

"The board and its officers ... are bound to administer the scheme in accordance with the terms of the scheme for the time being applicable, and unless those terms can themselves be challenged, the decisions of the officers of the board which were made in accordance with the scheme cannot ... successfully be impugned."

18. Can a non-statutory scheme like the LWCS be challenged? That was also an issue in the C.I.C.B. case. A statutory scheme was enacted in 1988, but there had never been parliamentary approval for the previous scheme (which was the scheme being challenged), and there was no question of it having had statutory force. However, although the court expressed different views as to whether the legality of the previous scheme was justiciable, the court was unanimously of the view that it had the power to consider the legality of a non-statutory scheme which had been introduced by the executive branch of government.

19. Mr. Mok contended that the scope of judicial review in a case where what is being challenged is a refusal to make ex gratia payments under a non-statutory scheme is limited. The only question is whether the legitimate expectations of persons affected by the scheme to have their cases fairly considered in accordance with the terms of the scheme had been satisfied. Mr. Mok claimed to derive support for this argument from a passage in the judgment of Neill L.J. in the C.I.C.B. case at p.858A-B. However, Neill L.J. did not decide the issue. He merely described the argument as a "formidable" one. As it is, in view of the conclusion I have reached on the merits, it is not necessary for me to reach a concluded view on the issue.

The Alleged Flaws in the LWCS

20. Since Mr. Kwok's attack concentrated on the refusal to pay to the Applicant a full ex gratia allowance, it is necessary to adapt Mr. Kwok's submissions to make them apply to the LWCS itself. Properly analysed, the attack on the LWCS is on two grounds. I propose to deal with each of them in turn.

(i) Structures. The purpose of the two conditions which an Applicant for financial assistance had to satisfy had plainly been to limit financial assistance to persons who had been livestock keepers at the time of the freezing survey and had continued to keep livestock by the time of the pre-operational survey. The LWCS was therefore wrong to concentrate on whether particular structures had been in existence at the time of the freezing survey and at the time of the pre-operational survey. What the LWCS should have concentrated on was whether the applicant for financial assistance under the LWCS had been keeping livestock at the time of the two surveys. If the LWCS had done that, the conditions which an applicant for financial assistance had to satisfy would have been consistent with the purpose of the compensation provisions in the LWCS. In that way, any unfairness to someone in the Applicant's position would have been avoided.

21. I see the force of that argument, but on balance I cannot say that making the eligibility for financial assistance dependent on the continued existence of particular livestock keeping structures was Wednesbury unreasonable. I say that for two reasons. First, it may have been difficult to determine whether a person was keeping livestock at a particular time. Accordingly, it made sense to determine whether a person was keeping livestock at a particular time by checking whether livestock keeping structures were in existence at the time. The presence or absence of livestock keeping structures could then be treated as conclusive evidence of whether livestock was being kept at the time. Secondly, if a structure was erected after the freezing survey, and therefore after livestock waste had become the subject of statutory control in Hong Kong (even if that control had not yet been extended to the area in which the structure was), there was no particular reason why a livestock keeper should receive compensation in respect of it. If he had wanted to continue keeping livestock after the statutory control had been extended to his area, he should have erected a structure which complied with the requirements for the disposal of waste. If he had not wanted to keep livestock after the introduction of statutory control in his area, any new structure would have been temporary only, and it is questionable whether he should be compensated for the loss of structures which were temporary in nature.

(ii) Discretion. I have already referred to the fact that the officers who administered the LWCS did not have a discretion to dispense with compliance with the two conditions in a deserving case. Mr. Kwok argued that the Applicant's case was a deserving one, because he had been keeping livestock at the time of the two surveys. Adapting Mr. Kwok's argument to reflect the fact that the challenge is to the LWCS itself, the argument is that the LWCS was flawed in failing to give a discretion in deserving cases to the officers who were to administer it.

22. I see the force in this argument as well, but again I cannot say that it was Wednesbury unreasonable not to confer such a discretion on the appropriate officers. In the absence of such a discretion, livestock keepers knew exactly where they stood, and although the rigid application of the LWCS might be unfair in some cases, the advantage of inflexibility was certainty. Moreover, the absence of a discretion would reduce the risk of unscrupulous livestock keepers seeking to influence those officers responsible for considering their applications for financial assistance.

Conclusion

23. For these reasons, this application for judicial review must be dismissed. However, since this case was in the nature of a test case, the order nisi which I propose to make as to costs is that there be no order as to the costs of the application.

24. Finally, although the LWCS has survived this challenge to its legality, and although officers in the Environmental Protection Department have duly applied the LWCS in accordance with its terms, the fact remains that it is accepted that the Applicant was keeping livestock both at the time of the freezing survey and at the time of the pre-operational survey. Moreover, it is accepted that the only reason why he had to erect new structures after the freezing survey was because the old structures had had to be demolished at the Government's insistence and for reasons beyond the Applicant's control. Although it is entirely a matter for the Director of Environmental Protection, it may be that he will consider that the Applicant deserves some form of compensation, even though I have found that he was not entitled to financial assistance under the terms of the LWCS.

(Brian Keith)

Judge of the Court of First Instance