NEW TERRITORIES CARGO TRANSPORT ASSOCIATION LTD. and Another v. DIRECTOR OF MARINE

1997, No. 14

(Civil)

_______________

H E A D N O T E

_______________

Where an administrative decision involves treating a particular group of persons differently from everybody else who appear to be like them and the lawfulness of the decision is challenged on the basis that it is irrational by reason of such difference in treatment, the test as to the lawfulness or otherwise of the decision must be whether or not a rational basis for that difference can be seen.

IN THE COURT OF APPEAL

1997, No. 14

(Civil)

______________

______________

______________

J U D G M E N T

______________

Bokhary JA:

1. Cargo handling on Hong Kong's water-fronts is controlled under the Port Control (Cargo Working Areas) Ordinance, Cap. 81.

2. Under section 3 of that Ordinance, a number of areas had been gazetted as public water-fronts, while a number of areas had been gazetted as public cargo working areas.

3. Then, by a process of de-gazetting and re-gazetting, all public water-fronts were phased out and replaced by public cargo working areas. So today in Hong Kong there are ten public cargo working areas but not a single public water-front.

4. The Tuen Mun Public Water-front (which I will call "the Old Area") was the last public water-front. It has been replaced by the Tuen Mun Public Cargo Working Area (which I will call "the New Area").

5. This case concerns a judicial review challenge by the appellants to a decision made by the respondent in respect of the New Area.

6. The 1st appellant is an association whose members are all the cargo operators based in Tuen Mun. The 2nd appellant is one of those members. And the respondent, the Director of Marine, is the authority whose duties under the Port Control (Cargo Working Areas) Ordinance and the regulations made under it include the control and management of all public cargo working areas.

7. His decision under challenge by the appellants is, to quote from the opening paragraph of their skeleton argument, one made on or about June 18 last year that "all cargo operators of [the New Area] could only operate under a system known as the 'fast working berth' system ... and that this system would be applied 100%."

8. The decision is, it seems, in the nature of an interim decision pending an overhaul of the way in which all public cargo working areas territory-wide are to operate.

9. Certain points taken by the appellants in the court below are not renewed before us. And there is, as they acknowledge in the third paragraph of their skeleton argument, only one issue in this appeal. It is, as they put it in that paragraph, whether the decision under challenge is "Wednesbury unreasonable on the basis of unequal treatment? In other words, is it right that [they] be subject to the [fast working berth system] at [the New Area] (operated on a 100% basis) whereas the system prevailing in all the other Public Cargo Working Areas in Hong Kong is almost wholly (about 93%) the Permanent Berth System?"

10. The appellants argue that the decision is Wednesbury unreasonable, in other words, irrational on that basis. And they claim: (i) certiorari to quash the decision; and (ii) a declaration that the decision is unlawful, null and void.

11. On December 5 last year, after a hearing on October 9 and 10 that year, Mr Justice Waung rejected that argument and dismissed that claim.

12. Now the appellants appeal to this Court, renewing their argument and asking us to grant the relief refused by the judge.

13. The appellant's case being in the hands of Mr Ma and his learned junior, that endeavour has naturally been carried out with skill and judgment.

14. As can be seen, the attack is not directed against the fast working berth system in itself. Rather, it is directed against the imposition at the New Area of a regime different from the one in operation at all the other public cargo working areas in Hong Kong.

15. Where an administrative decision involves treating a particular group of persons differently from everybody else who appear to be like them and the lawfulness of the decision is challenged on the basis that it is irrational by reason of such difference in treatment, the test as to the lawfulness or otherwise of the decision must be whether or not a rational basis for that difference can be seen.

16. In applying that test in this case, I will begin by considering what each of the two systems, the permanent berth system and the fast working berth system, involves.

17. The first thing to note is that what has become the permanent berth system had started off as a "first come first served" system.

18. This is how the judge described how that metamorphosis came about, doing so by reference to what had gone on at the Old Area, which he called "Old Area 44" because that was its number:

"The First Come First Served system was not intended to be a permanent berthing system but was meant to be a fair and equitable system of serving every vessel wishing to use the public water-front on the first come first served basis. However, by reason of a number of factors including the geographical restriction of the area, this system as implemented became in effect a system which allowed the permanent berthing of the Applicants' vessels which took up, at all times all 16 berths at the Old Area 44. What was seen everyday or often at Old Area 44 was 16 vessels of the Applicants lying alongside the 16 berths with waiting in the water immediately to each berth, three other vessels of the Applicants, so that each berth area had vessels four deep of the Applicants, using or waiting to use that berth. With 64 vessels of the Applicants (16 berths times 4 vessels deep each berth area) constantly occupying and using the whole of Old Area 44, the Permanent Berth System became a system whereby the Applicants achieved monopoly of work at Old Area 44. No outsider could get in."

19. Dissatisfied with what that system had become, the respondent introduced the fast working berth system. The judge described that system by saying that under it:

"... cargo operators have to apply for a berthing permit every day and the operators have one day to handle their cargoes at the berth allocated and further the cargo operators have to vacate the berth after they finished their cargo handling."

20. Implementing that system seems to have proved far more difficult than devising it. Easier said than done is after all a fact of life.

21. When the New Area was about to be opened in or about August last year, the situation which confronted the respondent was this. He had not been able fully to implement the fast working berth system at the existing public cargo working areas. Each still operated partly on the permanent berth system and partly on the fast working berth system. The percentages varied from area to area. But on average, cargo handling at the existing public cargo working areas was carried on as to about 93% under the permanent berth system and only as to about 7% under the fast working berth system. Also, to add to his own dissatisfaction with the permanent berth system, the respondent was faced with severe criticism of it from quarters for which he was entitled to have respect.

22. Such criticism came: in a September 1995 report by Coopers & Lybrand as consultants commissioned by the respondent; in the Director of Audit's October 1995 report; and in the Public Accounts Committee's November 1995 and January 1996 reports.

23. So the respondent was dissatisfied with the permanent berth system. Added to that was severe criticism of it from quarters for which he was entitled to have respect. But he had had very limited success in implementing the fast working berth system at existing public cargo working areas. And he had to decide what he was going to do even if only on an interim basis, at a new area about to be opened.

24. The judge, describing the New Area as "New Area 16" for that is its number, said that three choices were open to the respondent, being:

"(1) to bring to New Area 16, the old ways of Permanent Berth System and apply it 100% as before;

(2) to adopt the mixed system of 7% Fast Working Berth and 93% Permanent Berth; or

(3) to reject in total the Permanent Berth System and to implement 100% the Fast Working Berth System."

25. And the judge said that:

"The clear choice of the Director of Marine in the circumstances could only be to open the New Area 16 with 100% Fast Working Berth System."

26. So he considered that choice to be the only rational one. Let us assume that that is going too far one way. But can one go so far the other way as to say that it was not even at least a rational one?

27. In my judgment, it was at least a rational one. There was a rational basis for the difference.

28. The reason why the fast working berth system was not applied to existing public cargo working areas on a 100% basis was essentially this. Despite the shortcomings of what had drifted into becoming a permanent berth system, eradicating it or even curtailing it to any great extent where it already existed appears to have proved too difficult in practice.

29. Precisely what the problem was is inherently difficult to say. It is common experience that all human endeavours are undertaken under the constraint of resources. Also, there have been suggestions that the respondent lacked the will to implement the changes to be implemented. Anyway, for whatever reason, there were problems. Therefore, where there was a chance to start with a clean slate, there was no reason to have - and good reason not to have - any element of the system with which the respondent was dissatisfied, which had drawn such severe criticism from sources worthy of respect and which had proved so difficult to eradicate or even to curtail where they had taken root.

30. There was no need for the Director of Marine to garland his own neck with what he saw as a dead albatross. There was no need for him to do anything of the kind at any stage, not even pending a territory-wide overhaul.

31. I acknowledge, for it would be churlish not to do so, the skill with which Mr Ma has handled what I had been constrained to regard a difficult brief. But having said that, I would unhesitatingly dismiss this appeal.

Liu JA:

32. Nine other Public Cargo Working Areas have been in operation since 1974 to 1995. The Tuen Mun Public Cargo Working Area (TMPCWA) was opened in Area 16 in August 1996. The Director of Marine was in the course of introducing overall management reforms to all Public Cargo Working Areas. TMPCWA came into operation in Area 16 after this reform initiative of the Director of Marine had been conceived. The Fast Working Berth System in the overall management reforms was regarded by the Director of Marine as a more satisfactory means for managing Public Cargo Working Areas. It was sought to be first introduced to a new Public Cargo Working Area as an interim measure and the recently opened TMPCWA in Area 16 was selected. The overall management reforms are still being under consideration in consultation with the interested parties. I do not propose to dwell upon the facts in this appeal, which are detailed in the judgment just delivered by my Lord Mr Justice Bokhary. The only issue taken before us is whether or not the appellants have been unfairly treated. Suffice it for me to say that no case is shown that the Director of Marine's new scheme is wholly unworthy of consideration or that it should not be put into execution in the interim or that it was inequitable or otherwise unjust to select the newly opened Area 16, TMPCWA for an initial application of the proposed scheme in the overall management reforms. The appellants cannot therefore be said to have been irrationally singled out for such an interim application of what was regarded as a beneficial scheme . I agree that these appellants have not been unfairly treated. The appellants are therefore not entitled to judicial review reliefs; nor in the exercise of our discretion should they be granted. I, too, would dismiss this appeal.

Nazareth V-P:

33. I likewise would dismiss the appeal. I agree with the reasons my Lord Bokhary has given. No useful purpose could be served by my repeating them. I would only say this.

34. No doubt changes and reforms can be introduced in many different rational ways. For myself I can see nothing irrational in the partial and interim reforms the Director of Marine adopted. It was for him to decide how to implement them. He has to begin somewhere. Nothing that Mr Ma had eloquently urged leads me to doubt the rationality of his action.

35. I have no hesitation in dismissing the appeal.