LAI YAM FOOK v. THE SECRETARY FOR THE NEW TERRITORIES

IN THE LANDS TRIBUNAL OF HONG KONG

CROWN LANDS REFERENCE NO. 10 OF 1983

BETWEEN:

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DECISION

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Sir Denys Roberts:

1. This is an application for compensation under the Crown Lands Resumption Ordinance and it is an application which has a fairly long and somewhat unfortunate history. I do not think I need to go into that in any great detail other than to say that the land concerned was resumed with effect from the 1st August, 1983 and that no offer was made to the applicant under section 6(l)(a) of the Crown Lands Resumption Ordinance, though a notice was duly served by the respondent, within the period of 28 days required under section 6(l)(b) of the Ordinance, on the owner of the land with which we are concerned. The owner instituted proceedings before this Tribunal on 8th December, 1983.

2. The matter was greatly complicated by the fact that there was a dispute as to the ownership of the land, a dispute which those involved sought to resolve by the issue of interpleader proceedings. Indeed these proceedings had been initiated before the resumption of the land. They had, however, not been resolved when this matter came before this Tribunal on 5th December, 1983. At the conclusion of that hearing, Judge Cruden, who was the presiding officer, adjourned the hearing of the claim sine die, with liberty to both sides to apply and reserved the question of costs.

3. The reason for the adjournment was clearly that the Crown, which made the application for the adjournment, wished to be sure that whatever sum was payable by way of compensation for this land, was directed into the proper hands. And it would not know whose these were until the conclusion of the inter pleader proceedings.

4. During the course of that hearing, however, Crown Counsel appearing for the Secretary for the New Territories, who is the nominal respondent, stated to the Tribunal, on behalf of his client, that it was accepted that the sum of $1,112,366.40, which was the amount claimed by the applicant, was agreed by the respondent as being correct. In the course of the hearing, Crown Counsel also conceded that an amount of interest would be payable on the sum claimed.

5. At the resumed hearing before us today, we were furnished with affidavits from Mr. Wan Min-kee, District Lands Officer, North, and Mr. Robert Osborne, the Crown Counsel concerned. I think that the effect of these two affidavits can be summarised as follows.

6. The Secretary for the New Territories thought that he was doing no more than instructing Crown Counsel that the amount claimed by the claimant was a correct calculation of the amount that would have been payable on an ex gratia basis, those calculations being based upon Government Notice 844 of  1983.

7. Mr. Wan stated in his affidavit that he had not given specific instructions that this sum was only the correct basis for ex gratia compensation. It was not, he said, considered to be the correct figure for compensation calculable under the Ordinance. Furthermore, it had not been the respondent's intention to make any concession with regard to interest. It is perhaps worth noting that the two concessions are necessarily linked, because if a sum is awarded under the Ordinance by way of compensation, interest does run with it on the basis which the Ordinance itself prescribes.

8. Mr. Osborne's affidavit makes it clear that he thought that he had been given authority, in relation to a Crown Lands resumption hearing, to concede the sum claimed as being a proper one to be awarded under the Ordinance. Had he been aware of the intention of the respondent, as declared in the affidavit of Mr. Wan, he would not have made the concession as to the sum to be awarded nor the consequential concession as to interest.

9. We are satisfied that these are honest affidavits. We have no reason to question the accuracy of what is set out in them. On that basis we are left with a situation in which counsel appearing for a respondent has made concessions against his client for which he had no actual authority, though I think it must be accepted that he had clear ostensible, or apparent, authority.

10. To what degree is counsel able to withdraw a concession which he has made in the course of an action, when he discovers that that concession is, due to a misunderstanding, contrary to the instructions which his client intended to give him? The general principle as to the authority of counsel is set out in Volume 3 of the latest edition of Halsbury's Laws of England at paras. 1179 and 1180. And at the foot of p.648 there appears the following paragraph

"If, with his client's authority and consent, counsel agrees to an order, and there is no mistake or surprise, the client cannot arbitrarily withdraw his consent, but if counsel subsequently informs the court that he agreed under misapprehension, the court will not hold him or his client to the agreement, and if counsel agrees contrary to his client's clear instructions, the court will not hold the client to the agreement. "

11. We were referred to Shepherd v. Robinson⁽¹⁾. This was an action for debt, in the course of which counsel for the defendant consented to judgment for part of the claim, the plaintiff abandoning the balance. Without the knowledge of counsel on either side the defendant had given instructions to her solicitors that the case was not to be settled. An application for the case to be restored to the list for hearing was upheld by the Court of Appeal. In the course of his judgment, Bankes, L.J. said -

"There is a second and different line of cases which decide that before a consent order has been drawn up and perfected the consent given by counsel or solicitor may be withdrawn by the client if the counsel or solicitor gave it under a misapprehension. In such cases the Court will not proceed further with the drawing up and perfecting of the order, and will not lend its authority to compel observance of an agreement arrived at through a mistake. "

12. This case is stronger than the one before us in that a settlement had already been reached and the only step which remained to be taken was the perfecting of a consent order.   Here, there was a concession made by counsel shortly before the application was adjourned, an adjournment in the event which lasted almost eight months. It is, of course, unfortunate that an applicant should not be able to rely upon statements of this kind made by counsel, with full apparent authority to do so. Nevertheless, it is clear from the authorities that, in circumstances like this, the client is not to be obliged to suffer for concessions which are made by counsel in consequence of a misapprehension by him as to what his authority and his instructions were.

13. We are therefore of the opinion that, regrettable though it may be, counsel appearing on behalf of the respondent is entitled to withdraw the concessions which were made at the December hearing. This means, therefore, that the claim under the Grown Lands Resumption Ordinance is, so to speak, at large, and that if the claimant wishes to pursue his claim under that Ordinance, it will be necessary for him to establish the market value of the land within the terms of Chapter 124.

14. We understand that the respondent has made an offer of ex gratia compensation in an amount which is the same as that claimed. The practical difference will be that interest is not payable on ex gratia compensation awards, whereas, of course, it would be on an award made under the Crown Lands Resumption Ordinance, though the latter award is likely to be substantially less than the ex gratia amount.

15. We think that the correct procedure now is for us to adjourn so that the claimant may decide whether he wishes to proceed under the Crown Lands Resumption Ordinance, as he is entitled to do, or whether he would prefer to accept the offer of ex gratia compensation which still stands, in which event these proceedings will no doubt not proceed further.

16. We therefore adjourn the application sine die, with liberty to restore and make no order as to costs.

(1)    [1919] 1 K.B. 474.