Director of Agriculture, Fisheries and Conservation v. Administrative Appeals Board

HCAL 165/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 165 OF 2014

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D E C I S I O N

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1.Under section 14(1)(a) of the Fisheries Protection Ordinance(Cap 171) (“the FPO”), if the owner of a local fishing vessel in respect of which there is a valid operating license on 15 June 2012 (“the commencement date”), the Applicant (“the Director”) may register the vessel and issue a certificate of registration to the applicant.

2.The 2 vessels that form the subject matter of this judicial review (“the subject vessels”) had held valid operating licenses at some point in time before but not on the commencement date. The Director refused to register them.  The Respondent (“AAB”) applied a “rectifying interpretation”, holding that “on” should mean “on or before” and allowed the appeals.

3.This is the Director’s application for judicial review on 2 grounds:

(1)   Ultra vires and/or illegality in that the AAB wrongly construed and applied section 14(1)(a) FPO (“Ground 1”);

(2)   Procedural impropriety and/or unfairness in that the Director has had no chance to make submission on the question of legislative intent behind section 14(1)(a) FPO (“Ground 2”).

BACKGROUND

4.In January 2013, Mr Shek Cheung-tai and Mr Shei Kwai-tung (“the Interested Parties”) applied respectively for registration of their vessels as local fishing vessels under section 14(1)(a) of the FPO.  Both of them had full operating licenses issued by the Marine Department pursuant to section 15 of the Merchant Shipping (Local Vessels) (Certification and Licensing) Regulation, (Cap 548D) (“the MS Regulation”)  

(a)   In AA32/2013, Mr Shek Cheung-tai’s vessel originally had his father as license holder. After his father’s death, it was transferred to Mr Shek’s mother and finally to Mr Shek on 17 January 2013.  The period of validity of Mr Shek Cheung-tai’s full operating license was from 17 January 2013 to 15 January 2014.  This vessel had not been issued with any valid operating license under the MS Regulation in the period from 9 November 2006 to 15 January 2013.

(b)   In AA33/2013, Mr Shek Kwai-tung became an owner of his vessel on 8 September 1999.  The period of validity of his full operating license was from 11 July 2012 to 10 July 2013.  This vessel had not been issued with any valid operating license under the MS Regulation in the period from 8 December 2010 to 10 July 2012.  Mr Shek Kwai-tung told the AAB that his vessel had to undergo repairs for about half a year.  He was aged over 80 and he had omitted to renew the license in time before the commencement date.

5.In allowing the 2 appeals, the AAB considered that the legislative purpose of the FPO was to limit the entry of new fishing vessels so as to prevent over-exploiting the fishing resources in the waters of Hong Kong and to maintain sustainable development of the fishing industry.  It was never the intention of the FPO to ‘break the rice-bowls’ of those fishermen who had, prior to the coming into force of the amendments to the FPO, already been using their fishing vessels to carry on fishing activities (except trawling) in the waters of Hong Kong.

6.The AAB accepted that on the express wording of section 14(1)(a) FPO, the eligibility requirements for registration was that a vessel should have been issued with an operating license, pursuant to section 15 of the MS Regulation, that was valid on the commencement date.  See §14 of AA33/2013 (“AAB’s Decision”).

7.However, the AAB relied on 2 sets of legislative materials which referred to “on or before” the commencement date and queried if the draftsman had misunderstood the legislative intent.  The AAB applied a “rectifying interpretation”, construing section 14(1)(a) to mean that a vessel can be registered if it had a valid operating license issued under section 15 of the MS Regulation at any time before the commencement date. Hence, “on” the commencement date was interpreted as “on or before”.  See §§15-19 of AAB’s Decision.

8.The AAB’s Decision differed from an earlier decision in AA44/2013 (differently constituted) handed down 2 months earlier, which held that “on” the commencement date meant “on”.

ISSUES IN THE JUDICIAL REVIEW

9.The Director and the Amicus are agreed as follows.

10.Firstly, the broad legislative intent and purpose of section 14(1)(a) FPO are to promote fisheries protection through limiting but maintaining an appropriate level of fishing effort in Hong Kong, by controlling entry of new vessels and re-entry of retired vessels into the local fisheries industry.  This accords with the view of the AAB.

11.Secondly, the threshold for apply a rectifying interpretation is a high one, requiring abundant certainty that the provision failed to give effect to the intention of the legislature. Given the uncertainty within the legislative materials, it is difficult to say that a “rectifying interpretation” was justified.

12.Thirdly, there is no basis to conduct a “remedial interpretation” of section 14(1)(a) (a possible argument raised by the Director) as no question of constitutionality is involved. 

13.The Director seeks judicial review on Grounds 1 and 2.  The core issue is whether “on” the commencement date in section 14(1)(a) FPO means “on” (Director’s case), or “on or before” (Amicus’ submission which supports the AAB).

14.Mr Lui and Mr Chain differ as to whether there was ambiguity in section 14(1)(a) FPO and in their purposive interpretation of the section.

15.The Interested Parties have not made legal submission. Their concern is really to ensure that the subject vessels are registered.

GROUND 1

Legal principles on statutory interpretation

16.The general principles on statutory interpretation have been set out in HKSAR v Cheung Kwun Yin (2009) 12 HKCFAR 568,Li CJ, at §§11-14.  The court ascertains the intention of the legislature as expressed in the language of the statute and adopts a purposive interpretation having regard to the context and purpose of the statute.

“11.   In interpreting a statute, the court’s task is to ascertain the intention of the legislature as expressed in the language of the statute. This is of course an objective exercise. The court is not engaged in an exercise of ascertaining the legislative intent on its own ... [but is] seeking the meaning of the words which Parliament used.

12.   The modern approach is to adopt a purposive interpretation. The statutory language is construed, having regard to its context and purpose. Words are given their natural and ordinary meaning unless the context or purpose points to a different meaning. Context and purpose are considered when interpreting the words used and not only when an ambiguity may be thought to arise. In HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at 606E, Sir Anthony Mason NPJ stated:

“The modern approach to statutory interpretation insists that context and purpose be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity may be thought to arise.”

... And the purposive approach (including the mischief rule) has been reflected in Hong Kong in s.19 of the Interpretation and General Clauses Ordinance, Cap.1.

13.   The context of a statutory provision should be taken in its widest sense and certainly includes the other provisions of the statute and the existing state of the law. ...

14.   The purpose of a statutory provision may be evident from the provision itself. Where the legislation in question implements the recommendations of a report, such as a Law Reform Commission report, the report may be referred to in order to identify the purpose of the legislation. The purpose of the statutory provision may be ascertained from the Explanatory Memorandum to the bill. Similarly, a statement made by the responsible official of the Government in relation to the bill in the Legislative Council may also be used to this end. ...”

17.However, legislative materials are only admissible for identifying the purpose of the statutory provision, not for construing its words: Director of Lands v Yin Shuen Enterprises Ltd & anor (2003) 6 HKCFAR 1, §§21-22, Lord Millett NPJ; PCCW-HKT Telephone Ltd v Telecommunications Authority (2005) 8 HKCFAR 337, §20, Bokhary PJ.

The legislative framework

18.An operating license is not for fishing but for eg travel in Hong Kong waters.  A vessel has to be registered with the Marine Department to be able to do fishing.  For that purpose, 3 pieces of legislation are relevant: FPO, the Merchant Shipping (Local Vessels) Ordinance (Cap 548) (“MSLVO”) and the MS Regulation.  

19.No person may be engaged in fishing with the use or aid of a vessel in any area of the waters of Hong Kong, other than in a fish pond or reservoir, unless the vessel is a “registered vessel”, ie “a local fishing vessel registered under section 14”: sections 2, 11 and 14 FPO.  Contravention of section 11 can lead to criminal consequences: section 12 FPO.

20.One of the management measures introduced by the FPO was the registration system for local fishing vessels, governed by Part 5 (sections 13 to 24) of the FPO.

21.Section 14(1)(a) of the FPO provides as follows:

“(1) The Director may, on application—

(a) by the owner of a local fishing vessel in respect of which there is a valid operating license on the commencement date;

...

register the vessel for the purpose of this Ordinance and issue a certificate of registration to the applicant.

(2) An application under subsection (1)(a) or (b) must be made within 12 months immediately after the commencement date.

(3) Despite subsection (2), an application may be made under subsection (1)(a) or (b) if the applicant shows to the satisfaction of the Director that—

(a) the failure to make the application within the time specified in subsection (2) was not due to the applicant’s default; and

(b)   the applicant exercised due diligence to ensure that the application would be made as soon as practicable after the commencement date.”

22.“Local fishing vessel” refers to “any fishing vessel in respect of which an operating license has been issued”.

23.Any “operating license” issued by the Director of Marine pursuant to the MS Regulation in respect of a local vessel is its “operating license” for the purposes of the FPO.  See definition of “operating license” in sections 2 and 89 of MSLVO.

24.Under section 2 of the MSLVO, “local vessel” means, amongst others,

“(a) any vessel used solely within the waters of Hong Kong, whether registered under the Merchant Shipping (Registration) Ordinance (Cap 415) or in a place outside Hong Kong;

...

(d)   any vessel employed in sea fishing plying regularly in the waters of Hong Kong, or using the waters of Hong Kong as a base.”

25.MSLVO provides for the regulation and control of local vessels in Hong Kong or the waters of Hong Kong and for other matters affecting local vessels, including their navigation and safety at sea but does not specifically deal with local “fishing” vessels. 

26.A local vessel is licensed under the Regulation if there is in force in respect of it a full license or a temporary license: section 2(4) of the MS Regulation.

27.The MS Regulation regulates application, issue and renewal of “full” licenses by virtue of its section 15 (application), section 16 (validity period), section 17 (renewal) and section 18 (conditions and restrictions attached).  The operating licenses of the subject vessels were issued under section 15.

28.A full license for a local vessel is valid for such period as may be determined by the Director of Marine and specified in the license, which shall not exceed 12 months, beginning from the date of issue of the license: section 16 of the MS Regulation.

29.The FPO does not specifically define or elaborate on the adjective “valid” which qualifies “operating license” referred to in, amongst others, section 14(1)(a).  However, I accept Mr Lui’s submission that it is only natural and reasonable to construe “valid” to mean, by reference to a relevant date, that the validity period expressly specified in the operating license itself in accordance with section 16 of the MS Regulation, has not expired on the relevant date.

30.Operating licenses could not be treated valid retrospectively for the “unlicensed” period between the date immediately following its earlier expiry date and the date immediately preceding the date of the renewed period (both dates inclusive), where the renewed validity period is not consecutive to its previous validity period as a result of a belated renewal application under section 17 of the MS Regulation. This applies even if the Director of Marine has demanded the applicant to pay and the applicant has indeed paid additional license fees pursuant to section 15(1) of the MSLVO.  See §42 of AA44/2013.

31.Every certificated local vessel shall be licensed but there are exceptions that are not relevant here: section 13 of the MSLVO.

32.By virtue of section 13 of the MSLVO, the subject vessels could not have been lawfully used for fishing activities in the waters of Hong Kong during those periods in which no valid operating license had been issued in respect of them.

The legislative materials

33.Three aspects of legislative intent clearly emerged from the legislative materials.

34.Firstly, the purpose of the FPO set out in paragraphs 5 and 10 above is well supported by the legislative materials.  See the speech of the Secretary for Food and Health in the Legislative Council before the second reading of the Fisheries Protection (Amendment) Bill 2011; Report of the Bills Committee on Fisheries Protection (Amendment) Bill 2011, at §2(a); Legislative Council Brief, at §3(a); Drafting Instructions, at §§3 and 7; and the Report of the Committee on Sustainable Fisheries, at §72.

35.Secondly, a new system of registration under the authority of the Director was introduced for local fishing vessels with a view to limiting new entrants and to maintain the appropriate level of fishing.  See Drafting Instructions, at §9; the Background Brief prepared by the Legislative Council Secretariat, at §2(a).

36.Thirdly, the conditions for registration were laid down, which eventually became section 14(1)(a) FPO.  The commencement date was described as a “cut-off date” of eligibility for registration of local fishing vessels.  Some legislative materials used the words “on” the commencement date whilst others used “on or before”:

(a)   Speech of the Secretary for Food and Health in the Legislative Council before the second reading of the Fisheries Protection (Amendment) Bill 2011:

“漁護署署長只會為那些在條例草案生效日期或之前已領有由海事處發出的有效運作牌照的現有本地漁船登記...我們希望藉著設立本地漁船登記制度，限制新漁船加入，從而控制漁船數目及捕撈力量。” (underline added);

(b)   Report of the Bills Committee on Fisheries Protection (Amendment) Bill 2011, at §9:

“An owner of a local fishing vessel, who possesses a valid operating license issued under [the MSLVO by the Marine Department] on or before the commencement date of the Bill, may apply for registration if the vessel is to be used primarily for fishing in Hong Kong waters.” (underline added);

(c)   Report of the Bills Committee on Fisheries Protection (Amendment) Bill 2011, at §56:

“Under the proposed section 14(1)(a), [the Applicant] may, on application by an owner of a local vessel which is used mainly for fishing purposes in respect of which there is a valid operating license on the commencement date, register the vessel and issue a certificate of registration to the applicant.” (underline added);

(d)   The Legislative Council Brief, at §§8 & 13:

“8. ... [the Director] will only register existing local fishing vessels which already possess a valid operating license issued by [the Director of Marine] on the commencement date of the Amendment Bill.” (underline added);

“13. Apart from existing local fishing vessels, we do not intend to allow any fishing vessels to enter the local fisheries industry. To this end, the Amendment Bill will stipulate that owners of existing local fishing vessels must apply for registration on or before the expiry of a period of 12 months from the commencement date of the Amendment Bill.” (underline added).

(e)   The Drafting Instructions:

“11. [the Director] will only register existing local fishing vessels, i.e. vessels already issued with a valid operating license ... before the enactment of this Fisheries Protection (Amendment) Ordinance.” (underline added);

“19. Apart from existing fishing vessels operating in Hong Kong waters ..., we do not intend to allow any fishing vessels to enter into the local fishing industry. To this end, we propose that [the Director] will announce a specified period during which owners of existing local fishing vessels may apply for registration. [The Director] shall not accept any applications for registration after the specified period, unless the applicant can prove to the satisfaction of [the Director] that the delay in submitting such an application is not due to negligence on his part.”

“21. We propose to set the enactment date of this Fisheries Protection (Amendment) Ordinance as the cut-off date of eligibility of existing local fishing vessels for registration. Eligible existing local fishing vessels are defined as those which are already issued with a valid operating license...on or before the cut-off date, which still remains valid at the time of the application.” (underline added);

At Table 1, item 4(1)

“We propose to set the enactment date of the Amendment Ordinance as the cut-off date deciding on the eligibility of local fishing vessels for registration. Setting a cut-off date will reflect our policy intention to cap the size of the local fishing fleet through this registration exercise. Given there will be a process leading to the enactment of the Amendment Ordinance, existing members of the trade should have sufficient time to decide whether they want to stay on and new comers to decide whether they want to join. ...

Local fishing vessels which have already been issued with a valid operating license ... on or before the cut-off date shall all be eligible for registration.” (underline added).

(f) The Legal Service Division Report on Fisheries Protection (Amendment) Bill 2011 at §6:

“the Bill provides that an owner of a local fishing vessel in respect of which there is a [valid operating license] on the commencement date ... and a valid operating license can be produced at the time of application for registration may apply to be registered under the Ordinance.” (underline added);

(g) The Administration’s advice to the Legislative Council at the meeting on 20 December 2011 that

“the registration system for local fishing vessels was simple, under which an owner of a local fishing vessel who possessed a valid operating license issued by MD on or before the commencement of the Bill could apply for registration.”;

(h) In the resumed Second Reading debate of the Bill at the Legislative Council on 9 May 2012, Hon Vincent Fang, reported on the deliberations of the Bills Committee and said:

“The Administration has stressed that the policy intent is to enable the marine environment to rehabilitate through regulating fishing practices and preventing activities detrimental to the fisheries industry, so as to pursue sustainable fisheries development in Hong Kong.  Therefore, members have agreed to introduce a registration system for local fishing vessels to limit the number of fishing vessels and the total engine power of these vessels.  Members have noted that the proposed registration system is applicable to all existing local fishing vessels with valid operating licenses under the [MSLVO].”

Is section 14(1)(a) FPO ambiguous?

37.The approach to treating ambiguity has been set out in Hong Kong Clays & Kaolin Co Ltd v Director of Lands [1999] 1 HKLRD 527, 536B, Nazareth VP:

“The ambiguity sought to be relied upon must emerge from the provision that is said to be ambiguous or the instrument of which it forms part. Extraneous material cannot be relied upon to create ambiguity which is then to be relied upon to justify reference or inclusion of that material; the ambiguity must be shown to exist before the excluded material can be resorted to, a fortiori if it is to be used to clear up that very ambiguity. All of that seems to me to be obvious.”

38.Mr Chain accepts that whilst it was clear from the legislative materials that the Legislature intended to strictly prohibit new vessels from entering the local fisheries industry, the position on how to control re-entry of retired vessels (or vessels which once held valid licenses) was ambiguous and no clear legislative intent can be ascertained from the legislative materials alone.  He refers to the different references to “on” and “on or before” the commencement date in the legislative materials.

39.Mr Chain then refers to different authorities which interpret the word “on” as meaning “before or after”; and hold that “on” involves some degree of immediacy and that it is not to be narrowly construed.  See Copol Clothing v Hindmarch [1984] 1 WLR 413 at 414F-G, Fox LJ; Attorney General's Reference (No.2 of 1994) [1994] 1 WLR 1579 at 1585H-1586H, per Lord Taylor CJ.  Fox v Fox [1925] P 157, at 167, Pollock MR.

40.Mr Chain then suggests a liberal interpretation of “on” the commencement date as “on or before”.

41.Without disrespect, Mr Chain’s approach falls into the error described by Nazareth VP.

42.The natural meaning of the words in section 14(1)(a) FPO mean that only vessels with a valid license on the commencement date could apply for registration.  On this, the Director and the Amicus share a common view.  Even the AAB took this as “the starting point”.

43.Section 14(1)(a) FPO makes no distinction between new and retired (or inactive) vessels.  There is only one registration system for both classes of vessels.  There is no ambiguity, and it is not open to Mr Chain to use the extrinsic legislative materials to create ambiguity.

44.I do not question the correctness of the authorities in paragraph 39 above on interpretation of the word “on”, having regard to the context of the relevant statutory provisions. However, I respectfully disagree with Mr Chain that “on” is capable of inherently meaning “on or before”.  Taken to its logical conclusion, his submission could mean that “on” is ambiguous whenever it appears in statute.  That cannot be right.

Purposive interpretation of section 14(1)(a) FPO

45.Mr Chain accepts that section 14(1)(a) is a qualifying condition for application of registration; the Director has no discretion to waive the condition. This tallies with the view expressed in AA44/2013 and which I agree with:

“33. ... it is plain from section 14(1)(a) of the FPO that the requirement that the vessel to be registered must have a valid operating license on the Commencement Date is a condition of qualification. It is not a time condition. Accordingly, if for any reason the vessel to be registered did not in fact have a valid operating license on 15 June 2012, the owner of the vessel is simply not qualified to make the application, and by the same token, the [Director] would not have the power to grant registration in the absence of a discretion conferred by the statute to dispense with this qualification condition. There could be many reasons why a vessel did not have a valid operating license on Commencement Date, but whatever is the reason, the inability to satisfy this qualification condition would have the legal effect of disqualifying the owner of the vessel from making the application, and the [Director] has no power to ignore the disqualification and grant the application.”

46.AAB 44/2013 in fact involved a vessel that had but did not have a valid operating license on the commencement date, similar to the Interested Parties in the present judicial review.

47.Mr Chain, however, goes on to point out that if the qualifying condition is not met, then there is no right to apply and no discretion to redress any circumstance of injustice, eg in the case of a fishing vessel which was validly licensed and had operated for 20 years but not licensed for one year because of necessary repairs.

48.Mr Chain submits that it appears to be fully consistent with the legislative intent to construe section 14(1)(a) broadly, such that the word “on” is purposively interpreted to mean “on or before”.  This would allow retired and other inactive vessels to qualify to apply for registration.  The Director will have discretion (as evidenced by the use of the word “may” in section 14(1)(a) of FPO) to exercise an appropriate degree of “control” to grant or refuse the registration even though the qualifying condition is met.  There is nothing within the wording of section 14(1)(a) of the FPO or amongst the legislative materials which suggests that it should not be given that meaning. There is no basis to construe the word “on” literally and narrowly.

49.With respect, I am unable to agree.  Existing fishing vessels (which clearly included retired ones) were expressly referred to in the legislative process and those vessels were required to apply for registration.  The cut-off date was there to determine the existing fishing vessels’ eligibility for registration.  It gave certainty to the new registration system.

50.Notwithstanding the clear reference to existing fishing vessels in the legislative materials, they were not treated differently from the new vessels.  Both types of vessels were to meet the same eligibility criteria for registration.  It was never suggested, even for discussion, by the government or Legislative Council that the wording of section 14(1)(a) FPO should permit a local vessel which once had but no longer has a valid operating license on the commencement date to qualify for registration under the new system. There was no outright prohibition of re-entry of retired vessels but the legislative materials in paragraph 36(e), Table 1 above made it clear that owners of existing vessels needed to make a choice as to whether they wanted to stay on. 

51.In my view, section 14(1)(a) FPO clearly reflects the legislative intent of, amongst others, “controlling” re-entry of retired vessels. There is no basis to construe “on” as “on” for new vessels and “on or before” for retired vessels.  Any discretion in the Director is only to extend the time for registration under section 14(3) if the conditions in section 14(1)(a) are satisfied.

52.I am aware that this interpretation is narrow and has draconian consequences for owners like the Interested Parties.  However, if it accords with the legislative intent, the court should give effect to it. 

53.Accordingly, the AAB’s construction on section 14(1)(a) is erroneous as a matter of law and the decision should be set aside, just on Ground 1 alone.

GROUND 2

54.The principles for rectifying interpretation have been explained in Chan Pun Chung & anor v HKSAR (2000) 3 HKCFAR 392, §5, Bokhary PJ:

“In plain cases of drafting mistakes, the interpretative role of the courts properly includes, under certain conditions, the power of adding words to, omitting words from or substituting words in a statute so as to preserve the obvious purpose of that statute.＂

55.The conditions as to when a rectifying interpretation may be justified have been set out in the same case, at 407I-408B, Chan PJ and at 397C-H by Bokhary PJ, following Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586, at 592:

“Before interpreting a statute in this way, the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed;

The alteration in language may be too far-reaching.  ... the insertion must not be too big, or too much at variance with the language used by the Legislature.  Or the subject matter may call for strict interpretation of the statutory language, as in penal legislation.”

56.On Ground 2, Mr Lui and Mr Chain are in agreement.  Given the stringent requirements, it is difficult to justify AAB’s rectifying interpretation.  It was also clearly procedurally unfair for the AAB to allow the appeals on the “rectifying interpretation” ground never foreshadowed, let alone argued, during the hearings: R v Immigration Appeal Tribunal ex parte Sui Rong Suien [1997] Imm R 355, at 363, Collin J (as he then was); Hadmor Productions v Hamilton [1983] 1 AC 191, 232F-233C, Lord Diplock; Murphy v Wyatt [2011] 1 WLR 2129, §§13-19, Lord Neuberger.

57.Given the opportunity, the Director could have produced evidence on legislative intent behind section 14(1)(a) (as demonstrated in this judicial review).  He could have made submissions before AAB on rectifying interpretation and the decision in AA44/2013.  Ground 2 is established.

CONCLUSION

58.Both grounds for judicial review have been made out.  I therefore quash the decisions and remit the appeals to the AAB to make a decision in accordance with my ruling, ie that “on” the commencement date means “on”.

59.As the AAB and the Interested Parties have not advanced any arguments in opposition, on a nisi basis, I make no order as to costs.

60.I am most grateful to Mr Mike Lui and Mr Christopher Chain for their able assistance and succinct submissions.

Mr Mike Lui, instructed by the Department of Justice, for the applicant
Attendance of the respondent was excused

Mr Christopher Chain, as Amicus Curiae
The Interested Parties appeared in person