CHAN YING WAH v. CHIEF EXECUTIVE AND OTHERS

HCAL 136/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 136 OF 2005

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J U D G M E N T

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Introduction

1. In 2001, the applicant was given notice to vacate certain agricultural land which he held under licence from the Government.  The applicant sought compensation for crops that he still had in the ground and for certain improvements (by way of fixtures and installations) he had made to the land during his period of occupation.

2. In terms of a scheme administered by Government, the applicant reached agreement as to compensation in respect of all but one item.  That item was a large structure running along the boundary of the land facing the sea.  According to the applicant, it had been built as a sea wall to prevent inundation of his crops.  The Lands Department declined to pay compensation for that structure, saying that it was not subject to compensation in terms of the scheme.

3. The applicant asserts that this refusal was unlawful, being based upon an incorrect interpretation of the terms of the scheme.  The applicant has therefore sought remedies by way of judicial review in terms of which Government will be obliged to assess and pay compensation.

4. This application has a regrettably long and complex history.  It first came before me for substantive hearing in April 2007 but was adjourned part-heard, coming back before me in July 2007.  It was then adjourned again, coming back before me in January of this year.  Even then, however, arguments could not be completed.  In the result, it has now come back before me for the final time with three days set aside.

Background

5. In 1979, the applicant entered into an agreement with the Government in terms of which he was licensed (upon payment of an annual fee) to occupy and work a piece of land in the New Territories, that land being designated for agricultural purposes.  The licence, called a Crown Land Licence, authorised the applicant to farm the land and to erect certain ‘temporary structures’ on the land for domestic purposes for storage and for housing pigs.  No authority was given to erect permanent structures.

6. The licensed land was some 2,300 square metres in extent.  In shape, it resembled a long, thin rectangle.  It was sandwiched between the Castle Peak Road and a beach.  What may be described as the northern boundary of this licensed land abutted the Castle Peak Road while the southern boundary ran along the beach.  The beach itself was not part of the licensed land.  It remained Government land.

7. During the years that he occupied and worked the land, the applicant built the ‘sea wall’, as I will call it, along the boundary adjoining the beach.  It was built, he said, to prevent sea water destroying his crops and, as such, was built primarily for agricultural purposes.

8. As to the actual positioning of the sea wall, it is not disputed that the ‘wall’ part was built entirely outside of the southern boundary of the licensed land.  As to the extensive landfill that was packed behind the wall, it is not disputed that most of this was itself outside of the southern boundary.  In the result, by way of a rough estimate only, it may be said that the entire structure of the sea wall, which ran almost the entire length of the southern boundary, straddled that boundary, about two-thirds of its width being outside the boundary and one-third being on or inside the boundary.

9. As I have said, in terms of the agreement governing the Crown Land Licence, no structures other than those specified in the agreement itself were permitted to be erected on the licensed land without authority.  More particularly, the applicant was not permitted to ‘cut away, remove or set back’ any adjoining land without prior approval.  Cutting away, as I understand that term, is to include some form of digging into adjoining land or making an incision into it.  In so far as the construction of the sea wall may have resulted in any cutting away, removing or setting back of the beach outside of the boundary of the land, it is not disputed that the applicant did not seek, nor did he receive, any formal approval.

10. In August 2001, the applicant was informed by the Tsuen Wan District Lands Office (as it was then called) that the licensed land was to be resumed for the purpose of improving the Castle Peak Road and that he was to give up occupation in November of that year.

11. As the land was being resumed for redevelopment, the applicant became entitled to compensation for the crops growing on the land and also for certain improvements that he had made to the land during his time of occupation.  As I have indicated earlier, this compensation was payable in terms of an administrative scheme which, in so far as it is relevant for present purposes, was set out by Government in a memorandum in December 1964.  I will refer to it as ‘the Scheme.’

12. When the terms of the Scheme were set out in 1964, the Deputy Financial Secretary circulated a schedule of items which qualified for payment of an ex gratia allowance under the Scheme.  Among the several qualifying items were those described as ‘miscellaneous permanent improvements.’  In the original schedule, this category of items was said to cover wells, fences and other minor annexures to land not covered elsewhere in the schedule. 

13. As to payment of compensation for the resumption of the applicant’s land, the applicant entered into negotiations with officers of the Tsuen Wan District Office of the Lands Department.  As I have said, agreement was eventually reached in respect of all items except one : the sea wall.

14. In a letter dated 30 May 2003, the applicant was informed by the District Office that the sea wall did not fall into the category of improvements described as ‘miscellaneous permanent improvements’ and that, in the result, it was not an item for which compensation was payable under the Scheme.  The applicant ‘appealed’ this decision by way of an informal administrative review but without success.

15. In the result, he instituted the present judicial review proceedings.  It is the applicant’s case that the sea wall, being some 9,400 cubic metres in extent, is not only an item for which he is entitled to payment of compensation under the Scheme but that the compensation should be in the region of HK$7.79 million.

16. In respect of the relief sought by the applicant, although a number of amendments have been made to the applicant’s claim, in the final analysis, he has sought remedies to the following effect :

(i)      an order of certiorari to quash the decisions of the respondents refusing to grant an ex gratia allowance for the miscellaneous permanent improvement to the licensed land described by the applicant as the sea wall;

(ii)      an order of mandamus compelling the 3^rd respondent, the Director of Lands, to calculate the correct amount of the ex gratia allowance payable in respect of the sea wall and to pay that sum;

(iii)     alternatively, an order of mandamus compelling the 3^rd respondent, the Director of Lands, to reconsider the applicant’s claim for an ex gratia allowance in respect of the sea wall and to do so in accordance with law; and

(iv)     a payment of such damages as may have arisen out of the failure of the Respondents to pay or authorise the payment of the ex gratia allowance.

17. At this juncture, I should say that, if I am to grant relief, it would only be the third form of relief sought; that is, an order quashing the decisions already made and remitting the matter by way of mandamus to the Director of Lands so that he can reconsider the applicant’s claim for an ex gratia allowance in respect of the sea wall in accordance with law; that is, in accordance with the findings set out in my judgment.  In the context of the long history of this matter, if I am to grant any sort of remedy, that seems to me to be the only reasonable one.

18. As I have indicated earlier, the applicant’s claim for compensation in respect of the sea wall was rejected on the basis that it simply did not fall into the category of improvements described in the Scheme as a miscellaneous permanent improvement.

19. In order to determine whether the applicant’s sea wall was capable of being included in the Scheme, it is necessary to examine the terms of the Scheme and to do so in an historical context.

20. Although a compensation scheme of sorts was in place before 1964, it was only in that year that the Deputy Financial Secretary set out the terms as – broadly at least – they now exist.  In terms of the Scheme, compensation was payable for various types of installations and fixtures.  It is agreed, however, that we are only concerned with the category described as ‘miscellaneous permanent improvements’.

21. In the schedule to the 1964 memorandum, such improvements were described as ‘wells, fences and other minor annexures to land not covered under other items in this schedule.’

22. In 1982, in a paper submitted to the Finance Committee of the Legislative Council, the Government Department then responsible for such matters sought to have the Scheme, which previously had only applied to land in the New Territories, extended to urban areas.  In the paper submitted to the Finance Committee, the source of the Scheme was recognised to be the 1964 memorandum.

23. In January 2002, in a briefing note for the Finance Committee of the Legislative Council, the Planning and Lands Bureau (as it was then called) gave a summary to the Legislative Council of the various categories of items which attracted compensation under the Scheme.  In respect of miscellaneous permanent improvements, the briefing note – in the first part of the document at least – said the following :

“This EGA [ex gratia allowance] is payable to cultivators upon resumption and clearance for losses relating to farm installations and fixtures such as water ponds, wells, fences, irrigation pipes/ditches, boundary walls, gates, bunds and other minor annexures to land which are used principally for agricultural purposes.  The amount payable is based on the assessed replacement rates of the items affected by resumption and clearance, less their depreciated value.”

24. Later in the same briefing note under the heading of ‘EGAs for miscellaneous permanent improvements,’ the following was written.

“Formulation endorsed by FC [Finance Committee].

‘This EGA is payable to cultivators affected by resumption and clearance to compensate for miscellaneous permanent improvement items to their farms (which are principally for agricultural purposes), such as water ponds, wells, fences, irrigation pipes/ditches, boundary walls, gates and bunds.  The amount of EGA payable is calculated on the basis of the assessed replacement cost of the particular items, less depreciation....’”

25. At the hearing before me on 10 January 2008, leave was sought by the applicant to put into evidence the Chinese version of the briefing note.  The Chinese version – in translation – was to the following effect :

“This special allowance is issued to farmers who are affected by the land resumption and demolition action in order to compensate them for their loss in respect of their investment in the farm facilities and fixtures.  Such facilities and fixtures include water pools, wells, fences, irrigation pipes/irrigation channels, walls, gates, embankments and other minor facilities principally used for farming.”

26. Finally, reference must be made to Section E of an internal set of guidelines entitled ‘Lands Administration Office Instructions’ which gave purely internal guidance to officers tasked with responsibility for assessing compensation in respect of the acquisition and resumption of land.  In respect of ex gratia allowances for land in the New Territories which had been occupied for cultivation the following is said :

“Ex gratia allowance is payable for improvement items such as watering ponds, wells, fences, irrigators, ditches, boundary walls, gates, bunds, farm equipment and implements.  Assessment is based on current replacement rate, less allowance for depreciation of the improvement.”

27. Later in Section E, in respect of the assessment of ex gratia allowances, the guideline says the following in respect of miscellaneous permanent improvements :

“This ex gratia allowance is intended to cover the clearance of farm installations and fixtures such as watering ponds, wells, fences, irrigation pipes/ditches, boundary walls, gates, bunds and the like.  The allowance is payable on the basis of assessed replacement cost of the particular item, which must be used principally for agricultural purposes, subject to a depreciation factor.  It should be noted that the allowance is to be paid to the eligible claimant, that is, to the cultivator.”

28. In considering the nature and scope of the various provisions related to miscellaneous permanent improvements, it is important to note that the provisions do not seek to set out a definitive list.  Instead, installations and fixtures, as they may be described, are listed by way of example only.  The examples are intended to do no more than give guidance to those who must administer the Scheme.  Put another way, they are illustrative of the kind of installations and fixtures that qualify for compensation. 

29. It is to be noted that the illustrative items include a ‘bund’.  This is an item described in the Chinese version as an ‘embankment.’  It is the applicant’s case that both a ‘bund’ and an ‘embankment’ accurately describe the sea wall built or, at the very least, describe a structure of the same kind, that is, of the same genus.

30. The word ‘bund’ was originally an Urdu word adopted by the Raj and to a greater or lesser degree was transported to other parts of what was then the British Empire.  The Shorter Oxford English Dictionary, (5^th Ed.) defines a ‘bund’ as, ‘an embankment or causeway, or, in earlier times, as a quay.’

31. An ‘embankment’ is itself defined as ‘a long bank or mound for confining a body of water such as a river, or for carrying a road, railway or canal.’

32. A ‘causeway’ is defined as ‘a raised path or road across a low or wet place, or across a stretch of water.’

33. A ‘quay’ is defined as ‘a man-made bank of earth or stone, built alongside or projecting into water for the purposes of loading and unloading vessels.’

34. A bund, therefore, while it must be a raised structure in the nature of an elongated bank or mound, invariably made of earth and/or stone, may fulfil a number of functions.  In short, it does not appear to be capable of precise definition.

35. It appears, however, that the Lands Department has understood the word ‘bund’ to have a different meaning to those that I have set out above; indeed, a fairly precise meaning.  In a memorandum dated 13 June 2003, informing the Tsuen Wan District Lands Office that the applicant’s appeal had been rejected, the Assistant Director of Lands was of the view that ‘bunds’ referred to structures formed ‘to separate fields on land.’  In his affirmation of 15 February 2006, Mr Mak Po-kwan expanded on this by saying the following :

“Bunds have always been understood by officers of the Lands Department to mean walls, usually built with rubble, sometimes with a bit of cement, to prevent soil from falling from one level of a field to another (e.g., in a terrace field).”

36. It is suggested, therefore, that the term ‘bund’ as employed in Hong Kong lost its central meaning of being some sort of raised structure for containing water or jutting out into water, and, instead, came to describe walling built to hold up terracing.  While I do not dispute Mr Mak’s understanding of the term as it has come to be understood in the Lands Department, it does seem to be at odds with the Chinese version of the 2002 briefing note, which describes a ‘bund’ as an ‘an embankment.’

37. I would add that the Scheme served not only to guide members of Government but also members of the public who sought compensation under it.  That being the case, it was to be understood according to its plain English meaning.  If any particular term was to be given a particular meaning outside of its normal meaning then that should have been made plain.  In respect of the word ‘bund’ there was no such qualification.

38. Remembering that the citation of items such as bunds and embankments are illustrative only, and bearing in mind that in Hong Kong a good deal of agricultural land may run close to the sea, I have had little difficulty in coming to the conclusion that a sea wall, if it serves the purpose of preventing sea water inundating crops, may well fall within the contemplation of the Scheme provided it can properly be said to constitute a farm installation and/or fixture.

39. As I have said, it is the applicant’s case that the sea wall was built primarily to prevent inundation of the crops planted by him on the licensed land.  In that regard, as a protective installation, it was, his counsel has submitted, no different in essence from a fence or a boundary wall.  In my judgment, if a sea wall is found to be designed primarily to protect crops or animals, such as pigs, from inundation by sea water then it is capable of constituting a miscellaneous permanent improvement under the Scheme.

40. But that does not end matters.  I say that because the 1964 memorandum spoke of ‘wells, fences and other minor annexures to land not covered under other items in this schedule’.

41. For the respondents, it is argued that while the terms ‘major’ and ‘minor’ are relative, the sea wall manifestly could never be described as a ‘minor annexure to the land’.  The structure, it is said, ran along the length of the southern boundary and it is illustrative of its true size and extent that the applicant has claimed compensation for it of nearly $8 million.  On that basis alone, therefore, the sea wall did not qualify for compensation under the Scheme.

42. On behalf of the applicant, however, three points are made :

(i)  that, on a correct interpretation, the phrase ‘and other minor annexures to land’ is not to be read as qualifying the listed items coming before it but speaks of separate and additional items only;

(ii)  that, in any event, at the time when the applicant made his claim in respect of the sea wall, the qualifying provision relating to ‘minor’ annexures to land was no longer part of the Scheme, and

(iii)  that there was no evidence that those persons tasked with assessing the applicant’s claim had ever considered whether the sea wall was or was not a ‘minor’ structure.

43. To better understand the ‘interpretation’ point, I cite again from the January 2002 briefing note for the Finance Committee of the Legislative Council prepared by the Planning and Lands Bureau :

“This EGA [ex gratia allowance] is payable to cultivators upon resumption and clearance for losses relating to farm installations and fixtures such as water ponds, wells, fences, irrigation pipes/ditches, boundary walls, gates, bunds and other minor annexures to land which are used principally for agricultural purposes.  The amount payable is based on the assessed replacement rates of the items affected by resumption and clearance, less their depreciated value.”

44. Mr Hew, for the applicant, has argued that the phrase ‘and other minor annexures to land’ is not to be read as in any way qualifying the listed installations and fixtures that come before the phrase but is to be read as describing an additional category of items.  On his reading, therefore, as I understand it, items such as water ponds, wells, fences, irrigation piping and the like are all subject to compensation whether minor or major structures.  Only that additional category of items; namely, ‘other annexures to land’ must be minor in nature.

45. I reject that interpretation.  It is, in my view, artificial and strains the plain meaning of what is written.  As I have said earlier, the items that are listed are illustrative only.  The list speaks of various kinds of items all of which, by way of a ‘wrap up’ description, must be annexures to land of a minor nature.  In my view, it makes no sense to hold that items such as water ponds, wells and boundary walls can be of any size without limit but other annexures to the land, which are not specifically described, must be minor in nature.  Why?  Where is the justification for such a distinction?  There is none.  On both a literal and purposive basis I am satisfied that Mr Hew’s submission is wrong.

46. Mr Hew’s second ground is to the effect that, at the time when the applicant was seeking compensation for the sea wall, there was no longer a qualification that all miscellaneous permanent improvements must be minor.

47. Mr Hew’s submission is based on a close examination for the January 2002 briefing note prepared for the Finance Committee to which I have just referred.

48. This document contains three parts.  The first part, which may properly be described as an overview, bears the heading ‘Note for Finance Committee.’  The second part sets out an outline of details contained in an enclosure.  The third part is the detailed enclosure itself. 

49. To return to the first part, as I have indicated earlier in this judgment, it contains a definition of the scheme for the payment of ex gratia allowances for miscellaneous permanent improvements to the following effect :

“This ex gratia allowance is payable to cultivators upon resumption and clearance for losses relating to farm installations and fixtures such as water ponds, wells, fences, irrigation pipes/ditches, boundary walls, gates, bunds and other minor annexures to land which are used principally for agricultural purposes.  The amount payable is based on the assessed replacement rates of the items affected by resumption and clearance, less their depreciated value.”

50. However, in the third part of the document there is a further definition which bears the sub-heading ‘Formulation endorsed by FC [the Finance Committee].’  This definition reads :

“This ex gratia allowance is payable to cultivators affected by resumption and clearance to compensate for miscellaneous improvement items to their farms (which are principally for agricultural purposes), such as water ponds, wells, fences, irrigation pipes/ditches, boundary walls, gates and bunds.  The amount of the ex gratia allowance payable is calculated on the basis of the assessed replacement cost of the particular items, less depreciation, in accordance with the schedule of replacement rates for typical construction works which is pegged to the civil engineering works index.  The current unit rates for individual items are set out below - ”

51. Immediately following this definition is a detailed table of items of work accompanied by unit rates of valuation or compensation.  The end of the table bears the endorsement that the rates are reviewed once a year.

52. The first definition, therefore, is clearly qualified by what I will call the ‘minor annexures provision’ but the second definition is not.  That second definition, however, bears a heading which suggests it is the one endorsed by the Finance Committee.  If that is the case, then, as Mr Hew for the applicant argues, it means that, as at January 2002, there was evidence that the policy formulated by the Finance Committee was one which did not contain a qualification going to minor annexures.

53. In order to resolve the issue, it is necessary to go to a document which was compiled in 1989, some 13 years earlier.  That document (which bears the date of 20 July 1989), is an extract from notes of decisions taken at a meeting of the Finance Committee held a few days earlier.  It shows that the Finance Committee approved, in respect of ex gratia allowances for miscellaneous permanent improvements, ‘the adoption of the civil engineering works index for the purpose of revising the ex gratia allowance payable for miscellaneous permanent improvement items to farms affected by resumption and clearance.’  What was approved, therefore, was only the civil engineering works index, which revised the rates of ex gratia allowances payable for miscellaneous permanent improvement.  That document sets out the rates in very considerable detail, the rates again specifying the type of work for which compensation is payable, the units of work and the rates per unit.

54. The decision reflected in that document is not, therefore, a decision to change the meaning and intent of the Scheme itself, but a decision, rather as I have said, to revise rates of compensation in respect of individual items of work.

55. I have taken note of the fact that the document does say by way of an introduction :

“In October 1982, members approved the payment of an ex gratia allowance to farm cultivators affected by resumption and clearance in both the New Territories and the urban area to compensate for miscellaneous permanent improvements items to farms, such as water ponds, wells, fences, irrigation pipes/ditches, boundary walls, gates and bunds.  It is payable to cultivators on the basis of the assessed replacement cost of the particular items...”

56. That reference does not contain the provision related to minor annexures.  But, of course, the purpose of the paper was not to seek, as I have said, a revision of the terms of the Scheme itself but merely the rates of compensation per unit payable under the Scheme.  The introduction, therefore, was intended only to give an overview of the nature of the Scheme.  It was not intended to set out a definition of the terms of the Scheme.

57. In June 2001, the Finance Committee of the Legislative Council agreed that the administration must brief it on the whole issue of ex gratia allowances, holding that, after it had been briefed, it would then consider the best way forward in respect of the various allowances.  It is apparent that the note for the Finance Committee dated January 2002 was prepared for the purposes of that briefing.

58. There was a further meeting of the Finance Committee on 1 February 2002, at which the Principal Assistant Secretary for Planning and Lands duly briefed members of the Finance Committee.  The minutes and other papers related to that meeting do not contain evidence of any decision being reached by the Finance Committee.  That is understandable.  The sole purpose of the meeting was to brief the Finance Committee not to ask the Finance Committee to make any decision.  This is evidenced by the fact that the minutes reveal that, towards the end of the meeting, a number of members of the committee suggested that there should be a review of all ex gratia allowances by the administration.

59. That brings us back to the note itself, prepared in January 2002 for the Finance Committee briefing.  That note commences in the first part with an introduction.  The first paragraph of that introduction reads :

“As requested by the Finance Committee in June 2001, we set out in this note an overview of the 28 ex gratia allowances which FC has approved over the years for payment to persons affected by resumption, clearance and marine works in Hong Kong waters.  Other than agreeing to the target recipients, eligibility criteria and calculation basis for each of the EGAs, the FC has also authorised the administration to review and revise the individual rates of compensation for components within each ex gratia allowance formula.  The main features of each of the 28 EGAs are highlighted below and details are set out at the enclosure.”

60. In the first part of the document, therefore, the main features of the ex gratia allowances are set out.  It is in that first part that the description of ex gratia allowances is given, which contains the provision related to minor annexures.  It is apparent, therefore, on the face of that opening part of the document, that the Administration at that time remained of the view that ex gratia allowances for miscellaneous improvements remained subject to the qualification that fixtures and installations for compensation must be minor in nature. 

61. The third part of the document, the detailed annexure, as I have said earlier, contains a reference which does not bear the same qualification going to minor annexures.  However, that part of the document quite clearly is intended to be read in respect principally of the items and the unit rates for compensation which are set out.  The sub-heading, referring to the formulation endorsed by the Finance Committee, must in such circumstances refer back to the decision of the Finance Committee made in July 1989 not to approve any change to the scheme itself but only to approve revisions of the rates of compensation.

62. In coming to this conclusion, I have been assisted by the second affirmation of Ms Wong Shuk Han dated 11 December 2007.  Ms Wong, a Principal Assistant Secretary (Planning and Lands) of the Development Bureau - formerly the Housing, Planning and Lands Bureau – emphasises the point that the note for the Finance Committee dated January 2002 was compiled, as the introduction makes clear, for a specific purpose and that purpose was to set out an overview of the 28 ex gratia allowances which the Finance Committee had approved over the years.  It was, therefore, a paper setting out and summarising the existing policy, not a paper which sought to revise the policy.

63. In summary, for the reasons given, I am satisfied that the qualification going to minor annexures, as I have said, was part of the compensation scheme at the time when the applicant was seeking compensation for the sea wall.

64. During the course of argument, Mr Hew emphasised the point that this issue, if it was part of the policy at the time, was such an obvious one that it would surely have been raised.  Surely, therefore, the people in the Lands Office who rejected the claim would have done so for the most obvious reason, namely, that the sea wall was simply not a minor annexure but was, to the contrary, a major annexure.  He has pointed to the fact that it was only in the affirmation of Mr Mak dated 15 February 2006 that the issue was raised for the first time. 

65. However, the fact that those persons entrusted to execute the terms of the Scheme did not seize upon that issue at the time does not mean that the qualification as to size was not part of the policy.  It is often the case that not all the terms of a policy are relied upon by officers who, on a day-to-day basis, must make administrative decisions concerning the application of that policy and that only reference to one or two of the terms will suffice.

66. In the present case, what concerned the members of the Lands Office was that this particular wall did not appear to them to be intended primarily for agricultural use.  They were of the view, walking on the sea wall and examining it, that it was intended more as some sort of driveway and rejected the suggestion that it had a primary agricultural purpose.

67. Mr Hew has referred me to the fact that officers of a certain rank in 2001 were given authority to make payment of ex gratia allowances of up to $3 million.  This would indicate, he said, that ‘major’ fixtures and installations were made the subject of compensation.  However, the document which relates to this matter – a Lands Department Accounting Circular No. 5 of 2001 – states on its front page that a financial delegation ceiling is to be set on a “per claim basis.”  A claim could include any number of categories of items, including crops in the ground.  I do not see therefore that this document, which gives a delegated authority of up to $3 million, indicates that miscellaneous permanent improvements – taken individually – may have been made the subject of compensation even though they were major items.

68. I would add that, during the course of submissions, I was referred to the affirmation of Mr Mak Po-kwan in which he set out figures showing that, between about 2000 and 2002, only some eight percent of ex gratia allowances for miscellaneous permanent improvements exceeded the allowances paid for crops in the ground.  This, it was said, was an indication that no compensation was paid, certainly on a regular basis, for major improvements.  Mr Hew disputed this.  The information, he said, took the matter no further.  In my judgment, sufficient material has been placed before me to enable me to come to a decision and I do not make anything of the data contained in Mr Mak’s affirmation. 

69. This brings me to the third point; namely, that the decision-makers, in rejecting the claim for compensation in respect of the sea wall, never turned their minds to whether it was or was not a minor or major structure and must now be made to do so.

70. In judicial review, it is not the function of this court – except in the most limited of circumstances – to be a primary finder of fact.  But that does not mean that this court is required to abandon all common sense in respect of the issue.  Judicial review is a discretionary remedy.

71. In any event, evidence has been put before me going to this third point.

72. It is apparent from the affirmation of Mr Mak Po-kwan dated 15 February 2006 that he clearly was of the view that the sea wall was too extensive a structure to be considered to be an annexure that was minor.  In addition, during the course of cross-examination, Mr Mak testified that he had at one time, prior to dealing with the applicant’s claim, worked in the Headquarters of the Lands Department and, at that time, had involved himself in matters concerning the assessment of ex gratia allowances.  He said that he had, therefore, been aware of the terms of the Scheme and understood that there had been no change in the scheme since 1964.  Accordingly, the minor annexures qualification – to his knowledge – remained part of the Scheme.  It was implicit in what he said that this was a consideration which he took into account before rejecting the application for compensation in respect of the sea wall. 

73. It is plain to me that Mr Mak did not see it necessary in his affirmation of 15 February 2006 to go into detail as to why the scheme did not cover such an extensive structure as the sea wall.  He saw it as being self-evident.  In this regard, I take into account a number of factors, which include the following :

(i) the claim made by the applicant for the sea wall was close to $8 million, a sum more than double the amount which junior officers were entitled (on their own authority) to pay out per claim by way of compensation.

(ii)  Mr Mak spoke in his affirmation of the nature of the structure and, in doing so, emphasised that the sea wall ran more or less along the entire length of the land and encroached upon the beach, actually damaging it.  He said that there was a paved driveway between the land and the sea wall, the main portion of that driveway falling outside of the boundary of the land.  He said that the driveway was “apparently wide and well paved enough for vehicles to be driven on it.”

(iii) In addition, a number of photographs were exhibited in evidence by agreement.  These photographs, among others, show people working on the sea wall and show it to be a very sturdy structure, built of rock and brick, which, in part, is cemented. 

74. No evidence was put before me to suggest that Mr Mak was not only wrong on the merits but had plainly misunderstood the engineering necessities that required the building of the sea wall.  There is nothing, therefore, to undermine the evidence which goes to show, in my view, that, having regard to the extent of the land itself, the sea wall was much more than a minor annexure.

75. I come now, relatively briefly, to the issue of rationality, the suggestion being, as I understand it, that it was unreasonable to conclude that the sea wall was not primarily for agricultural purposes.

76. I reject this submission.  It was for the officers who inspected the sea wall and the land around it to come to a finding of fact.  In his affirmation, supported by his testimony, Mr Mak said that ‘the driveway’, as he called it, was connected to the Castle Peak Road so that vehicles could come on to the land from the Castle Peak Road.  He went on to say the following:

“Furthermore, the sea wall, together with the driveway behind it,” (the Applicant is claiming on the basis of the combined volume of the sea wall and the driveway) “could not principally be for agricultural purposes.  The Applicant certainly would not need such a wide and well-paved road, connected all the way to the Castle Peak Road to protect his crops from wave and tide.  Furthermore, as is apparent from the sketch, the driveway was much narrower along the cultivated area than along the domestic area.”

77. Mr Mak concluded by saying that it was apparent to him that the sea wall was used principally for protecting the driveway, which in turn was used principally to serve the domestic area of the land.  Having regard to all the evidence, this appears at least to be a logical and legitimate conclusion.  I cannot say it was plainly wrong.  I may have come to another view but that is irrelevant.

78. It is to be remembered that the scheme has, as one of its qualifications, that the annexures to land are not only to be minor in nature but are to be used principally for agricultural purposes.  It was for the officers of the Lands Department to determine whether this sea wall was to be used principally for agricultural purposes or not.

79. On behalf of the applicant, Mr Hew has complained that the applicant was not given sufficient opportunity to respond to the findings of those officers who refused his application for compensation in respect of the sea wall.  I reject this.  The duty imposed on the officers of the Lands Department was not to conduct some sort of quasi-judicial hearing.  The duty was to make assessments, according to the dictates of the Scheme, as to what items fell for compensation and how that compensation was to be assessed.  It is apparent that the applicant was able to make representations to the effect that the sea wall was an item deserving of compensation.  Indeed, he was allowed to take the matter by way of appeal with detailed and extensive submissions being made by him.  The applicant was not therefore denied any ability to be heard.  There were meetings held.

80. It was further suggested that, in rejecting the claim for compensation, more reasons should have been given.  It is a fact that the rejection was a fairly standard rejection, reciting the terms of the Scheme and saying that the sea wall did not fall into the category of miscellaneous permanent improvements that were open for compensation under the scheme.  But, with respect, I do not see that the Lands Department, at that juncture, was required to give a reasoned ruling on the matter.  It was for its officers to come to a decision and it was for its officers to inform the applicant of the decision.  In any event, when the applicant appealed, he received a more detailed response.

81. By way of a postscript, I must make reference to one final issue.  When, in 2003, the applicant ‘appealed’ the rejection of his claim and the matter was reconsidered, a letter was sent by the District Lands Office in Tsuen Wan to the Chief Estates Surveyor.  That letter, put forward the suggestion that perhaps the sea wall was a structure that fell into the Scheme.  This, however, was met with a negative response based on the fact that ‘bunds’ refer to walls to separate fields on land and that the sea wall in the subject case was not, therefore, a bund.  That conclusion, as I have said, was an incorrect interpretation of the Scheme.  But, that being said, I am satisfied that the sea wall so obviously did not qualify under the Scheme that it would serve no purpose to order that the ‘appeal’, or review, be done again, certainly not in light of the findings I have made.

82. Finally, there is the issue of costs.  I have discussed this matter with counsel.  I am concerned at the real possibility that costs in this matter may, because of the very unfortunate number of court appearances, result in the applicant having to meet costs which are way beyond anything he could initially – reasonably – have anticipated.  It is a hard fact of life that sometimes litigation, like a runaway train, loses its brakes and runs out of control.  I criticise nobody in the present case when I say that regrettably this litigation may be compared to a runaway train.

83. But the result is that the applicant, if, as is likely, costs are awarded against him, will be presented with a bill which is out of all proportion to the matter litigated.  That does not help him.  That does not help the civil justice system generally.  Sometimes an unfortunate result has to be recognised for being what it is, a consequence of the fates conspiring against the matter being determined in a quick, easy and cost-effective way.

84. While it is not for me to dictate to the respondents; that is, to the Department of Justice, how they should approach the question of costs, it seems to me that perhaps a just resolution of the costs issue may be achieved if I do not make any order as to costs now – especially reserved costs – but, rather, make an order that the issue of costs will be held over for argument at a future date, if necessary.  This will enable the parties to enter into discussions with each other to see whether an agreed bill can be reached.  The Department of Justice will enter into those negotiations in light of the fact that it may be that they will not be successful in all respects concerning costs; that they may, for example, fall down on one or more of reserved costs issues.  Equally, the applicant will know that it is almost inevitable that he is going to have to meet a substantial bill.  I will not place a time limit on when the parties must reach agreement.  There are other issues, such as the right of this applicant to appeal.  He may decide to appeal, and it may be determined that in those circumstances any question of negotiations on costs at first instance should be held over.  But both parties will know that, at the appropriate time, if negotiations are not successful, they can return to this court and seek final orders.

85. I appreciate that this ruling as to costs is unusual.  But, as I have emphasised to counsel during our discussion, costs are always discretionary and the courts must have some regard to the general interests of justice and to the integrity of the justice system as a whole.