Kwok Cheuk Kin and Another v. Director of Lands and Others

Read the full judgment text of HCAL 260/2015 on BabelCite. This Court of First Instance judgment was delivered on 8 April 2019 before Chow J.

Constitutional and administrative law – judicial review – Small House Policy – New Territories indigenous inhabitants – Ding rights – Basic Law Article 40 – 'lawful traditional rights and interests' – discrimination on grounds of sex, social origin and birth – whether Private Treaty Grant, Free Building Licence and Exchange protected by BL 40 – meaning of 'traditional' (傳統) – meaning of 'lawful' (合法) – Block Crown Lease – pre-1898 customary land tenure – Subsoil-Topsoil system – standing – delay – whether relief to be refused – The Small House Policy was implemented on 1 December 1972 following Executive Council endorsement, originally as a building policy to address squatter problems and improve housing standards in the rural New Territories. It permits a male indigenous villager aged 18 or above, descended through the male line from a resident in 1898 of a recognised village, to apply once in his lifetime for one of three forms of land grant: a Private Treaty Grant of Government land at concessionary premium, a Free Building Licence on his own land at nil premium, or an Exchange. Between 1972 and 30 June 2018, 10,763 Private Treaty Grants, 28,305 Free Building Licences, and 3,610 Exchanges were granted. The Applicants, who are not New Territories indigenous villagers, challenged the policy as discriminatory on grounds of social origin/birth and sex, in contravention of BL 25 and BL 39 and/or BOR 22, and as failing the Government's duty under BL 7. The court held that the policy is prima facie discriminatory and cannot be justified under the proportionality tests in Yau Yuk Lung or Fok Chun Wa, but the dispositive question is whether BL 40 saves the policy – The court held that BL 40 protects only those 'lawful traditional rights and interests' of the New Territories indigenous inhabitants, and the term 'traditional' (傳統) is confined to rights and interests traceable to those of the indigenous inhabitants before the 1898 New Territories Lease, following Tse Kwan Sang, Koon Ping Leung and Liu Wing Kwong – Whether Free Building Licence is a 'traditional' right: yes, because the practice of allowing villagers to build village-type houses on their own agricultural land for their own occupation, free of premium, was recognised by the British administration from as early as 1905 and endorsed by Executive Council in October 1959, with the concession extended in 1960 to pre-war New Grant Lots – Whether Private Treaty Grant is a 'traditional' right: no, because the right to acquire Government land for building was not a pre-1898 right; Section 15 of the New Territories (Land Court) Ordinance 1900 abolished any pre-existing claims to neighbouring unoccupied land, and the Private Treaty Grant system was a post-1898 creation, with the 1972 ExCo Memorandum showing that the policy was introduced to address housing conditions rather than to preserve traditional rights – Whether Exchange is a 'traditional' right: no, as it is a post-1972 administrative arrangement with no pre-1898 analogue – The court rejected the Applicants' submission that 'lawful' in BL 40 imports a Qing-law requirement, holding that the word is merely descriptive of those traditional rights and interests which were enjoyed by the indigenous inhabitants, and the drafters of the Basic Law would not have been concerned with the state of Qing law before 1898 – The court further held that BL 122, which preserves Crown rent for Old Schedule lots, village lots, small houses and similar rural holdings held by male-line descendants of 1898 villagers, is not inconsistent with the finding that Private Treaty Grant and Exchange are not protected by BL 40 – BL 7 challenge rendered unnecessary – The Applicants have sufficient standing because they are directly discriminated against by the policy on grounds of social origin or birth – Relief should not be refused for delay of 18-21 years, following Leung v Secretary for Justice, given the public interest in determining the constitutionality of a discriminatory policy, the fundamental human rights issue, and the fact that any relief can be crafted not to invalidate existing Small House Grants – Application allowed in part: Private Treaty Grant and Exchange components are unconstitutional and unlawful, but Free Building Licence is constitutional and lawful under BL 40 – Judgment not to take effect for 6 months, with liberty to apply for a longer stay pending appeal.

Legal issues: Constitutionality of the Small House Policy under Article 40 of the Basic Law · Meaning of 'traditional' (傳統) in BL 40 · Whether Free Building Licence is a 'traditional' right · Whether Private Treaty Grant is a 'traditional' right · Whether Exchange is a 'traditional' right · Meaning of 'lawful' (合法) in BL 40 · Standing of the Applicants · Refusal of relief for delay

Outcome: Judicial review allowed in part: the Small House Policy is unconstitutional and unlawful to the extent that it confers benefits in the form of Private Treaty Grant or Exchange, but constitutional and lawful to the extent that it confers benefits in the form of Free Building Licence.

Cited by 9 cases · Cites 21 cases

Case No.HCAL 260/2015[2019] HKCFI 867[2020] 1 HKLRD 988
Court
Court of First Instance
Date08 Apr 2019
JudgeChow J
Case Document
100%Judiciary

HCAL 260/2015

[2019] HKCFI 867

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 260 OF 2015

________________________

  IN THE MATTER of an Application by Mr Kwok Cheuk Kin and Mr Lui Chi Hang Hendrick for Leave to Apply for Judicial Review under Order 53 rule 3(2) of the Rules of the High Court (Cap 4A)
  IN THE MATTER of the Articles 7, 11, 25 and 39 of the Basic Law
  IN THE MATTER of the policy implemented by the Director of Lands known as the “Small House Policy”
  IN THE MATTER of Schedule 5, Part 2, Paragraph 2 of the Sex Discrimination Ordinance, Cap 480

________________________

BETWEEN    
  KWOK CHEUK KIN 1st Applicant
  LUI CHI HANG, HENDRICK 2nd Applicant

and

  DIRECTOR OF LANDS 1st Respondent
  CHIEF EXECUTIVE IN COUNCIL 2nd Respondent
  SECRETARY FOR JUSTICE 3rd Respondent

and

  HEUNG YEE KUK Interested Party

________________________

Before: Hon Chow J in Court
Dates of Hearing: 3-7 December 2018
Date of Judgment: 8 April 2019

________________________

JUDGMENT

________________________

This Judgment shall be divided into the following Sections:

Contents
Paragraphs
I Introduction
1-3
II The Small House Policy
4-11
III The Purpose of the Small House Policy
12-17
IV The Applicants’ challenge to the Small House Policy
18
V The Small House Policy is prima facie unlawful by reason of its discriminatory nature or effect
19-24
VI Approach to interpretation of the Basic Law
25-34
VII Article 40 of the Basic Law
35-40
VIII The parties’ respective contentions
41-43
IX The existing case law
44-49
X The “traditional” (傳統) element in BL 40

 
(i) The meaning of “traditional” (傳統)
50-59
  (ii) Land tenure before the New Territories Lease
60-66

 
(iii) The New Territories Lease of 1898 and the Proclamations
67-71

 
(iv) Change of landing holding from common/customary tenure to Crown lease
72-80

 
(v) Land sale in village areas in the New Territories prior to 1972
81-99

 
(vi) Free Building Licence
100-114

 
(vii) Private Treaty Grant and Exchange are not “traditional” (傳統) rights or interests of the New Territories indigenous inhabitants
115-127
XI The “lawful” (合法) element in BL 40
128-130
XII BL 122
131-134
XIII BL 7
135
XIV Standing and delay
136-144
XV Disposition
145-149

 I.     INTRODUCTION

1.The central issue which arises for determination in this application for judicial review is whether the discriminatory Small House Policy is rendered constitutional and lawful by Article 40 of the Basic Law.

2.The answer to that question depends on whether the rights or interests enjoyed by the beneficiaries of the Small House Policy (hereinafter referred to as the “Ding rights” (丁權)) form part of the “lawful traditional rights and interests of the New Territories indigenous inhabitants” (新界原居民的合法傳統權益) within the meaning of Article 40 of the Basic Law.  At present, the Ding Rights take three principal forms of land grant by the Government, known as (i) “Private Treaty Grant”, (ii) “Free Building Licence”, and (iii) “Exchange” (hereinafter collectively referred to as “Small House Grants”).  For reasons which I shall endeavour to explain in this judgment, I am of the view that only “Free Building Licence” can properly be regarded as a lawful traditional right or interest of the New Territories indigenous inhabitants, while “Private Treaty Grant” and “Exchange” cannot be so regarded. Accordingly, the Small House Policy to the extent that it confers benefits on the eligible New Territories indigenous inhabitants in the form of Free Building Licence is constitutional and lawful, but not to the extent that it confers benefits in the form of Private Treaty Grant or Exchange.

3.In what follows:

(1)     references to “BL” shall be to the articles of the Basic Law, and “BOR” shall be to the articles of the Hong Kong Bill of Rights; and

(2)     Heung Yee Kuk (the Interested Party), a statutory advisory and consultative body for the New Territories established under the Heung Yee Kuk Ordinance, Cap 1097, shall be referred to as the “Kuk”.

 II.     THE SMALL HOUSE POLICY

4.The Small House Policy was implemented on 1 December 1972 following its endorsement by the Executive Council on 14 November 1972 (“the 1972 ExCo Decision”)[1].  Since 1972, the details of the Small House Policy have been changed or modified from time to time.  The current Small House Policy can be found in a pamphlet titled “How to Apply for a Small House Grant” (December 2014).  The following principal criteria must be met before a small house grant may be made[2]:

(1)     the applicant is an indigenous villager who is a male person at least 18 years old and descended through the male line from a resident in 1898 of a recognized village;

(2)     the applicant has not previously received any small house grant;

(3)     the site applied for is within the “V” zone or the environs or the village extension area of a recognized village;

(4)     the site applied for is not affected by any impending development, and does not prejudice any future planning or development proposals; and

(5)     there are no substantiated local objections to the proposed building.

5.In respect of criterion (1) above:

(1)     An “indigenous villager” is defined to mean “a male person at least 18 years old who is descended through the male line from a resident in 1898 of a recognized village”[3]. It may be noted that an indigenous villager for the purpose of the Small House Policy is different from the meaning of the same term used in other contexts, for example in the Government Rent (Assessment and Collection) Ordinance, Cap 515, which defines the expression “indigenous villager” as “a person who was in 1898 a resident of an established village in Hong Kong or who is descended through the male line from that person”.

(2)     A “recognized village” is one “which is shown on the list of recognized villages approved by the Director of Lands”[4].  When that list was first drawn up in 1973, it contained 591 recognised villages.  At present, there are a total of 642 recognized villages on the list, including some pre-1898 villages which have been re-sited (before or after 1945), as well as 24 post-1898 villages.  These villages are found in the following districts: Islands, North, Sai Kung, Sha Tin, Tuen Mun, Tai Po, Tsuen Wan, Kwai Tsing, and Yuen Long.  It may also be noted the list of “recognized villages” for the purpose of the Small House Policy is different from the list of “indigenous villages” for the purpose of the Rural Representative Election Ordinance, Cap 576.

6.In respect of criterion (2) above, a small house grant includes (i) a Private Treaty Grant (on Government land), (ii) a Building Licence (on private land), and (iii) an Exchange issued under the Small House Policy since its implementation in December 1972, as well as various types of grant prior to its implementation, namely, Land Grant by way of a Restricted Village Auction, Exchange by Surrender and Regrant at reduced or nil premium, and Free Building Licence granted to a villager for the building of a village-type house[5].

7.In respect of criterion (3) above:

(1)     The “environs of a recognized village” in general refers to a 300 ft distance surrounding a recognized village where small house applications are considered, although consideration will also be given to applications for sites within a “V” zone in a Development Permission Area/Outline Zoning Plan which encircles a recognized village[6].

(2)     Pursuant to the provisions of the Town Planning Ordinance, Cap 131, planning permission will have to be obtained from the Town Planning Board under Section 16 of the Ordinance for erection of small houses outside the “V” Zones (village type development) as shown on statutory plans such as Development Permission Area Plans and Outline Zoning Plans[7].

8.A few other points stated in the said pamphlet are of note:

(1)     The general guidelines and basic information set out in that document are subject to revision from time to time, and the pamphlet is not intended to create any legal rights or obligations[8].

(2)     The Small House Policy is a policy approved by the Executive Council in November 1972 and has been implemented since December 1972.  It is formulated to allow an indigenous villager to apply for permission to erect, once in his lifetime, a small house on a suitable site within his own village[9].

(3)     Applications for small house grants on Government land from villagers living overseas will be refused unless the District Lands Officer is satisfied that the applicant intends to return and reside in his village.  The District Lands Officer may, however, consider overseas applications for small house grants on private land[10].

(4)     A small house is basically a building in the New Territories constructed in accordance with the provisions of the Buildings Ordinance (Application to the New Territories) Ordinance, Cap 121. The main features of a small house are that the building shall neither contain more than three storeys nor exceed a height of 8.23 metres (27 ft) and the maximum roofed-over area of the house shall not exceed 65.03 square metres (700 sq ft)[11].

(5)     An application for a small house site outside the applicant’s own Heung (鄉) will not be considered, unless he can prove to the satisfaction of the District Lands Officer that his ancestor has already settled in the new Heung under application, and there are no local objections to his application[12].

9.In short, under the prevailing Small House Policy, a male indigenous villager aged 18 years old or above who is descended through the male line from (i) a resident in 1898 of a recognised village in the New Territories, or (ii) a resident in a recognised “post-1898 village” at the time that the village was founded in the New Territories may apply to the Director of Lands once during his lifetime for permission to build for himself a small house on a suitable site on private land or government land (not applicable to post-1898 villagers) in his own village[13].  The beneficiaries of the Small House Policy shall hereinafter be referred to as the “New Territories Indigenous Villagers”.  The prevailing Small House Policy now provides for land grant being made by way of:

(1)     a Building Licence on land owned by the applicant himself at nil premium (commonly known as Free Building Licence), or at a full-rate premium in relation to post-1898 villages;

(2)     a Private Treaty Grant of suitable Government land at concessionary premium, which is set at approximately two-third of the full market rate; and

(3)     an Exchange at nil premium for the private land portion and concessionary premium for the Government land portion (subject to a minimum premium of HK$1,000 where no additional Government land is required).

These land grants are subject to various alienation restrictions, the details of which it is not necessary to set out in this judgment.

10.Between 1972 and 30 June 2018, 10,763 “Private Treaty Grants”, 28,305 “Free Building Licences”, and 3,610 “Exchanges” were made or granted by the Government to eligible New Territories Indigenous Villagers.

11.In passing, I should mention that it is the Government’s position that the New Territories Indigenous Villagers do not have any legal right to build small houses, but they have a right to apply to build small houses under the Small House Policy.  It is also the Government’s position that it exercises, and has always exercised, absolute control and discretion to vary the contents of the ever evolving Small House Policy to meet the changing circumstances of the day, including the kind of land that may form the subject matter of an application, the conditions under which an application may be made, the procedures and criteria under which an application may be processed, and the conditions which may be imposed in the case of grant of permission under the Small House Policy[14]. On the other hand, the Kuk takes the position that the New Territories Indigenous Villagers have a right to build small houses in their own villages, and there are some basic features of the Small House Policy protected by BL 40 which cannot be varied or abolished by the Government’s change of policy. Since the subject matter of challenge in this application for judicial review is the Small House Policy, the precise nature of the rights or interests (if any) enjoyed or allegedly enjoyed by the New Territories Indigenous Villagers to build small houses in their own villages is not an issue which arises for determination in this application.  I do not therefore propose to consider this matter further in this judgment.  For the purpose of disposing of the present application for judicial review, all that I need to focus on are the rights or interests enjoyed by the New Territories Indigenous Villages under the Small House Policy (ie the Ding Rights).  I shall, however, have to consider the historical development of land administration in the New Territories preceding the Small House Policy later in his judgment when I come to consider the meaning of the words “traditional rights and interests of the indigenous inhabitants of the New Territories” in BL 40.

 III.     THE PURPOSE OF THE SMALL HOUSE POLICY

12.It is the Government’s evidence that “[t]he purpose of the Small House Policy … was to control the squatter problems and improve temporary domestic structures and their conditions”, and it was introduced “against the background that close to 60% of the buildings in the rural New Territories were of temporary houses or unlawful houses; and that while the rural New Territories had at that time only 10% of Hong Kong’s population, it had nearly 40% of the squatter population”[15].

13.In a Memorandum for Executive Council titled “Policy With Regard To Small Houses in Rural Areas of the New Territories”, XCR(72)219, dated 31 October 1972 (“the 1972 ExCo Memo”), the following was stated:

“ Apart from the village housing policy for native villagers in the New Territories, one aspect of which was considered by Honourable Members in 1967 (XGR(67)62 at Annex A)[16], no positive policy for the housing of the rural population has been effectively pursued, as priority has in general been given to the development of the satellite and market towns. There is no intention that this priority be changed but the question of small houses is of importance in rural areas and the regulation of their construction has been the subject of prolonged discussion between the Heung Yee Kuk and the District Commissioner, New Territories.

2. The 1970 census of buildings showed that buildings in the rural New Territories were of the following types:

Permanent houses and flats 9,000 7%
Traditional village houses 43,000 35%
Lawful temporary houses 36,000 30%
Unlawful houses 35,000 28%
  123,000 100%

The 1971 census of population also established that, although the rural New Territories has only 10% of the Colony’s population, it has nearly 40% of the squatter population, which in this context means the occupant of a domestic structure built of ‘temporary materials’.

Building Policy

3. The District Commissioner, New Territories is concerned about the low standard of housing in the rural New Territories and has advised that the standard is being perpetuated by a land policy which tends to favour the construction of temporary structures rather than houses of a reasonable quality, largely to avoid difficulties and expense to Government in the event of resumption or removal. As a first step he has accordingly proposed two [measures] which will assist in achieving higher standards of building in the rural New Territories outside the village areas and by persons other than native villagers. They are:

(a) The increased use of building licences rather than modifications of tenancy for the construction of domestic houses on private agricultural land

…..

(b) Leases of Crown land by private treaty for village houses in cases where there has been a structure on Crown Land Permit for ten years.

…..

5. Subject to the acceptance of further proposals in respect of building control outlined in paragraph 9 below, both of the proposals set out in paragraph 3 will permit the replacement of an existing type of temporary housing by a permanent form which will allow for a greater volume of construction and proper sanitary arrangements, and which will not be confined to native villagers in the New Territories.

6. At the same time the District Commissioner has proposed that a major anomaly of the system of disposal of land within village areas to villagers should be resolved. This anomaly is the system of village auctions. These auctions are restricted to villagers whose domestic housing needs have already been established by the District Office staff in accordance with the rules set out in paragraph 8 of memorandum XCR (67) 62 and in practice there is very rarely an alternative bid to that of the applicant. The auctions therefore amount to private treaty grants in all but name. The District Commissioner considers that this fact should be recognised and private treaty grants be made to the villagers.

7. As had been mentioned at paragraph 4 above, the desirability of this type of private treaty grant in respect of leases of building land of up to 1,000 square feet was recognised by the Secretary of State as early as 1909 when the District Commissioner was authorised to make such grants; this authority has not, however, generally been utilised since the war. If, however, Honourable Members accept the general principle of private treaty grants in respect of permit structures which have been authorised for ten years, it is considered that it would be reasonable and politically desirable to abolish the closed village auction system in respect of disposal of Crown land [within] village areas for native villagers, in favour of a system of private treaty grants.

8. If this is accepted in principle, the District Commissioner, New Territories has proposed that private treaty grants should be authorised by District Officers in accordance with the following rules:

(a) A lot shall not exceed 1,000 square feet [and] built-over areas shall not exceed 700 square feet. Building shall not exceed 2 storeys or 25 feet in height. This confines the concession to buildings which are exempted from the Buildings Ordinance, by the Buildings Ordinance (Application to the New Territories) Regulations 1967.

(b) The land must be within the village environs as established by the District Officer, where necessary in consultation with the villagers.

(c) The land is to be sold at 2/3 full market value. This is the level at which the upset price is set for village auctions, and is consistent with the concession of free building license allowed for such buildings on private agricultural land.

(d) Each male villager over the age of 18 may build or have built for him one house during his lifetime, provided he is not adequately housed in accordance with village tradition. This represents a minor concession beyond previously approved policy (paragraph 8 of memorandum XCR (67) 62 refers) in that it is proposed that the grant of land to a [villager] for building a house for any of his sons should no longer be tied to the son’s marriage. The Heung Yee Kuk previously requested that the age of sons should be disregarded, but Honourable Members advised the rejection of this concession (paragraph 9 of memorandum XCR (67) 62 refers). The District Commissioner’s present proposal is a compromise which would generally be acceptable to the Heung Yee Kuk.

(e) The user condition would be non-industrial.

(f) The concession would not apply to villagers whose village has been cleared since 1945, as Government has already built new villages or blocks of flats, mainly in the urban areas of the New Territories, where such concessions would be inappropriate.

…..

Squatter Control and Enforcement

11.     The acceptance of proposals in this paper will bring about some increase in the size, and improvement in the quality, of small houses but will probably not lead to much increase in the rate of building. It will be important to continue to improve squatter control measures, to institute firm control to prevent the construction of three-storey buildings, and to develop an advisory service to assist villagers. Further improvements are in mind -  in particular the legislation for buildings exempted from the Buildings Ordinance mentioned in paragraph 9 above but, for the time being, powers and procedures to prevent abuse of these relaxations in administrative rules are considered to be adequate.”

When reading the above memo, it should be noted that paragraphs 3 to 5 thereof related to certain measures to be adopted in the rural New Territories outside village areas and for persons other than native villagers, whereas paragraphs 6 to 8 related to an aspect of the Small House Policy, namely, Private Treaty Grant.

14.It can be seen from the 1972 ExCo Memo that the purpose of the Small House Policy was not to preserve or protect any, or any perceived, traditional rights or interests of the male indigenous inhabitants of the New Territories to build small houses, whether within or outside their own villages.  In fact, there was no suggestion in the 1972 ExCo Memo that the male indigenous inhabitants of the New Territories had any such rights or interests.  The Small House Policy was, instead, a building policy designed to improve the housing standards and conditions in the New Territories. 

15.When the legislative proposal to amend the Buildings Ordinance (Applications to the New Territories) Regulations pursuant to the 1972 ExCo Decision was debated in the Legislative Council on 29 November 1972, it was stated by Mr Denis Campbell Bray (District Commissioner, New Territories) that “[t]he regulations are however just the statutory part of the implementation of a major review of policy and practice on the control of small houses, or village houses, as they are known, in the New Territories.”  Mr Bray stated that there were several benefits from the new policy, the most important ones of which were:

(1)     Applications from villagers to build new houses in their own villages would be processed much more quickly.

(2)     More sophisticated health standard would be required in future in the small houses.

(3)     Virtually no more permits for temporary structures would be issued.

(4)     Owners of existing domestic temporary structures on private agricultural land and permittees of domestic structures authorized by Crown land permit or licence for at least 10 years would be allowed to redevelop their structures up to the maximum size permitted for a small house.

(5)     The areas in which new small houses in the New Territories might be erected would be defined on a more logical basis and would be based on uniform criteria throughout the New Territories.

16.On the same occasion, Mr Bray further stated the following:

“I should emphasize that I do not see these measures as anything other than interim measures which will complement the major job of producing a comprehensive development plan for the rural New Territories. This is a much more ambitious task but until proper permanent planned development comes we must deal with the day-to-day needs of the people now living in the country. The policies dealt with today probably affect over 90% of the dwellings in the rural New Territories today – that is to say the 35% which are traditional village houses, the 30% which are lawful temporary structures and the 28% which are unlawful temporary structures. The need for some such policies becomes obvious when we reflect that probably only 7% of the dwellings in the rural New Territories are proper permanent houses and flats.”

17.There was no suggestion in Mr Bray’s speech that the preservation or protection of any, or any perceived, traditional rights or interests of the male indigenous inhabitants of the New Territories to build small houses in their own villages was the benefit or object, or one of the benefits or objects, intended to be achieved by the Small House Policy. Instead, the Small House Policy was said to be an “interim measure” to address the housing conditions and needs of the people living in the New Territories at that time.

 IV.     THE APPLICANTS’ CHALLENGE TO THE SMALL HOUSE POLICY

18.The Applicants’ case in this judicial review is that the Small House Policy is unconstitutional in that:

(1)     the Small House Policy discriminates against persons of “non-indigenous” status based on birth or social origin, in contravention of BL 25 and BL 39 and/or BOR 22;

(2)     the Small House Policy and the relevant exemption in the Sex Discrimination Ordinance, Cap 480, discriminate against female indigenous villagers based on sex, in contravention of BL 25 and BL 39 and/or BOR 22; and

(3)     the Government has failed in its duty to manage, use or develop land in Hong Kong for the benefit of all Hong Kong residents, in contravention of BL 7.

 V.     THE SMALL HOUSE POLICY IS PRIMA FACIE UNLAWFUL BY REASON OF ITS DISCRIMINATORY NATURE OR EFFECT

19.BL 25 provides that:

“All Hong Kong residents shall be equal before the law”.

20.BL 39 provides that:

“The provisions of the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and international labour conventions as applied to Hong Kong shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region.”

21.As is well known, the International Covenant on Civil and Political Rights is implemented in Hong Kong through the Hong Kong Bill of Rights Ordinance, Cap 383.  BOR 22 provides that:

“All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.”

22.On the face of the matter, the Small House Policy gives preferential treatment to the New Territories Indigenous Villagers based on social origin/birth and/or sex and is, prima facie, inconsistent with BL 25 and BOR 22.  Neither the Government nor the Kuk has attempted to justify the preferential treatment accorded to the New Territories Indigenous Villagers by reference to the three facets of the justification test (namely, pursuance of a legitimate aim, the measure taken being rationally connected to that aim, and the measure being no more than reasonably necessary to accomplish it) as set out in paragraph 20 of the judgment of the Court of Final Appeal in Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335, or the composite test of whether there is enough of a relevant difference between the two groups of persons to justify the differential treatment as set out in paragraph 58(1) of the judgment of the Court of Final Appeal in Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409. 

23.That the Small House Policy would otherwise be an unlawful discriminatory policy unless it was excepted from the operation of the Sex Discrimination Ordinance was fully recognised by the Government.  When the relevant exception was debated in the Legislative Council on 28 June 1995, the Secretary for Home Affairs stated: “If the exception provided for the small house policy in Schedule 4 of the Bill were removed, this policy would be rendered illegal in its current form”.

24.In my view, it is clear that the preferential treatment accorded to the New Territories Indigenous Villagers cannot be justified under the justification tests as enunciated in Yau Yuk Lung or Fok Chun Wa.  Since neither the Government nor the Kuk has sought to argue otherwise, I do not propose to lengthen this judgment by further consideration of this issue.  In the circumstances, it is also unnecessary to consider the fourth step in the proportionality analysis established in Hysan Development Co Ltd v Town Planning Board[17], which is also relevant in the discrimination context[18].  The real question in the present case is whether the Small House Policy is rendered lawful by BL 40.

 VI.     APPROACH TO INTERPRETATION OF THE BASIC LAW

25.The proper approach to the interpretation of the Basic Law is well settled.  The following principles are relevant in the present case.

26.First, under the common law approach to the interpretation of the Basic Law which is applied in Hong Kong, the courts’ role is to construe the language used in the text of the Basic Law in order to ascertain the true legislative intent, and this exercise requires the courts to identify the meaning borne by the language when considered in the light of its context and purpose.  In Chong Fung Yuen (2001) 4 HKCFAR 211, at 223H-224B, Li CJ stated as follows:

“The courts’ role under the common law in interpreting the Basic Law is to construe the language used in the text of the instrument in order to ascertain the legislative intent as expressed in the language. Their task is not to ascertain the intent of the lawmaker on its own. Their duty is to ascertain what was meant by the language used and to give effect to the legislative intent as expressed in the language. It is the text of the enactment which is the law and it is regarded as important both that the law should be certain and that it should be ascertainable by the citizen.

The courts do not look at the language of the article in question in isolation. The language is considered in the light of its context and purpose. See Ng Ka Ling at 28-29. The exercise of interpretation requires the courts to identify the meaning borne by the language when considered in the light of its context and purpose. This is an objective exercise. Whilst the courts must avoid a literal, technical, narrow or rigid approach, they cannot give the language a meaning which the language cannot bear.”

27.Second, in ascertaining the true meaning of the relevant article of the Basic Law, the courts must consider the purpose of the instrument and its relevant provisions as well as the language of its text in the light of the context, context being of particular importance in the interpretation of a constitutional instrument[19].

28.Third, extrinsic materials which throw light on the context or purpose of the Basic Law or its particular provisions may generally be used as an aid to the interpretation of the Basic Law[20].

29.Fourth, as submitted by Mr Benjamin Yu, SC for the Government, speeches or views made or expressed by an individual drafter, however prominent or distinguished, cannot be taken to represent the objective legislative intent, given that a multiplicity of individuals played major roles in the drafting process[21].

30.In the present case, when one considers the materials prepared by the Basic Law Drafting Committee to which extensive references have been made by counsel, it should be borne in mind that the Basic Law Drafting Committee was a working group formed by the National People’s Congress of the People’s Republic of China comprising some 365 members from the Mainland and 23 members from Hong Kong with responsibility to draft the Basic Law.  The individual views of a member or some members of the Basis Law Drafting Committee as regards the meaning or effect of an article in the Basic Law plainly cannot be taken to represent the collective views of the maker of the Basic Law, namely, the National People’s Congress.  This consideration applies with even greater force to the views expressed by a member or some members of the Basic Law Consultative Committee, which was a body formed to collect and remit the views of its members and of the public to the Basic Law Drafting Committee: see paragraphs 5 to 7 of the Affirmation of Lee Wing-tat, a member of the Basic Law Consultative Committee, and of the Special Group on Inhabitants’ and Other Persons’ Rights, Freedom, Welfare and Duties (“the BLCC Special Group”) formed under the Basic Law Consultative Committee.

31.Fifth, the Basic Law should be read as a whole. An article should be read with and in the light of other articles (especially those addressing the same or similar subject matter) to produce a harmonious and congruous rather than a discordant meaning[22].

32.Sixth, a general theme of the Basic Law is that of continuity of the social, economic and legal institutions and systems in Hong Kong which existed prior to 1 July 1997[23].  It is important to recognize, however, the limits of this principle.  It refers to the continuity of the social, economic and legal institutions and systems, but not necessarily continuity of the “legality” of previous laws, policies or practices.  There are many examples where the court holds that laws, policies or practices which were previously lawful, or considered to be lawful, are incompatible with the Basic Law and therefore unconstitutional and unlawful.

33.Seventh, as with the interpretation of statutes generally, the court will presume that the lawmaker did not intend to produce consequences which are unreasonable, objectionable, undesirable or unfair[24].  The more unreasonable, objectionable, undesirable or unfair the result the more unlikely that it is what the lawmaker intended it to be.

34.Eighth, the principle that the general does not detract from the specific is also applicable to the interpretation of a constitution[25]. This having been said, it must still be shown that the case under consideration falls within the “specific” before the “general” is ousted or disapplied.

VII.     ARTICLE 40 OF THE BASIC LAW

35.BL 40 states as follows:

Chinese text: 新界”原居民的合法傳統權益受香港特別行政區的保護。

English translation: The lawful traditional rights and interests of the indigenous inhabitants of the “New Territories” shall be protected by the Hong Kong Special Administrative Region.

36.There are, on the face of this article, 4 constituent elements which have to be satisfied before protection is given:

(1)     there are some rights and interests (權益);

(2)     those rights and interests are lawful (合法);

(3)     those rights and interests are traditional (傳統); and

(4)     they are rights and interests of the indigenous inhabitants of the New Territories (新界原居民).

37.When considering the meaning and effect of BL 40, two preliminary points as emphasized by Lord Pannick, QC, for the Kuk may be noted.  First, BL 40 is contained in Chapter III of the Basic Law titled “Fundamental Rights and Duties of the Residents”.  Second, BL 40 is couched in mandatory terms, “shall be protected”.  These underline the importance of the rights and interests intended to be protected by BL 40.  These having been said, before protection is given by BL 40, the relevant right or interest must first be shown to properly come within the scope of that article.

38.In relation to the 1st element, “rights and interests (權益)”, as earlier mentioned, there is a difference between the Government and the Kuk as regards the precise rights or interests which may be enjoyed by the New Territories Indigenous Villagers to build small houses in their own villages which it is not necessary to resolve in this case.  For the present purpose, I shall focus on the Ding Rights, which I consider can properly be regarded as “rights or interests” capable of being protected by BL 40.

39.The 4th element, “indigenous inhabitants of the New Territories (新界原居民)”, is not, I consider, controversial in the present case.  Those who are qualified to benefit under the Small House Policy can clearly be regarded as falling within the expression “indigenous inhabitants of the New Territories” in BL 40.

40.The real issues in the present case are whether the Ding Rights can satisfy the “traditional (傳統)” and “lawful (合法)” elements in BL 40.

 VIII.     THE PARTIES’ RESPECTIVE CONTENTIONS

41.There is a difference of views between the Government and the Kuk in relation to the meaning or effect of the words “traditional” and “lawful” in BL 40.  The Government’s position is that:

(1)     “lawful” and “traditional” are two distinct concepts and the drafters of the Basic Law intended that in order for a right to be protected, it has to be both “lawful” and “traditional”[26];

(2)     in terms of “traditional” rights and interests, they are confined to those traceable to the rights and interests of the New Territories indigenous inhabitants before the commencement of the New Territories Lease in 1898[27];

(3)     “lawful” means lawful according to the domestic law of Hong Kong on 1 July 1997 and not inconsistent with the Basic Law[28]; and

(4)     a different way of putting the concept of “lawful traditional rights and interests” is that it refers to what remained as at 1 July 1997 of the rights and interests enjoyed by the New Territories indigenous inhabitants prior to the commencement of the New Territories Lease and was given recognition by the colonial administration[29].

42.On the other hand, the Kuk’s position is that:

(1)     “lawful traditional rights and interests” refer to the rights and interests enjoyed by the New Territories indigenous inhabitants prior to the commencement of the Basic Law and at the time of the Basic Law’s drafting, and BL 40 is not concerned with the state of affairs in 1898 but the state of affairs immediately prior to the coming into force of the Basic Law[30];

(2)     “lawful” does not mean that BL 40 is restricting the nature of the “traditional rights and interests” which are protected by allowing them to be challenged under other legal principles; rather BL 40, as a provision within the category of “Fundamental Rights and Duties of the Residents” contained in Chapter III of the Basic Law, means that “traditional rights and interests” have been recognised as lawful prior to the Basic Law and continue to be valid under the Basic Law[31]; and

(3)     in his oral submissions, Lord Pannick further explains that the word “lawful” is merely descriptive of those traditional rights and interests which were enjoyed by the New Territories indigenous inhabitants immediately prior to the commencement of the Basic Law.

43.In so far as the Applicants are concerned:

(1)     in relation to the “traditional” element, they agree with the Government’s proposition mentioned in paragraph 41(2) above[32]; and

(2)     in relation to the “lawful” element, they contend that “lawful” means lawful both according to Qing law before the New Territories Lease in 1898 and according to the domestic laws of Hong Kong in 1997, and not inconsistent with the Basic Law[33].

 IX.     THE EXISTING CASE LAW

44.There is, so far as I am aware, no binding or conclusive authority on whether the Ding Rights are protected by BL 40. In Tse Kwan Sang v Pat Heung Rural Committee [1999] 3 HKLRD 267, which concerned, inter alia, the question of whether the right to vote or stand as a candidate in a village representative election was a traditional right protected by BL 40, Cheung J (as he then was), when discussing the scope of BL 40, referred to a report produced by a Government Working Group on the New Territories Ordinance in April 1988 which apparently stated or confirmed that “the customary rights of the indigenous villagers relate to specific personal and property rights only.  These are the right of a man to build a small house under the small house policy, funeral and burial rights, exemption from rates and symbolic payment of rental for village lots[34]. It is clear that the learned judge was there merely reciting the contents of the Government Working Group report, not stating his own views.  In any event, there was no analysis of whether the alleged right of “a man to build a small house under the small house policy” should be regarded as forming part of the “traditional rights and interests” of the New Territories indigenous inhabitants within the meaning of BL 40, although it is right to point out that there was no expression of dissent of that view by the judge.

45.In Secretary for Justice v Chan Wah (2000) 3 HKCFAR 459, also a case concerning a constitutional challenge to the electoral arrangements for the position of village representative which excluded the applicants from voting or standing as a candidate on the ground that they were not “indigenous villagers” (used in the sense as in the Government Rent (Assessment and Collection) Ordinance), Li CJ expressed the following view at 477D-F:

“There is no doubt that the lawful traditional rights and interests of the indigenous inhabitants are protected by Article 40. One is not concerned here with a comprehensive definition of the rights and interests within Article 40. It is not disputed that they include various property rights and interests such as exemption from Government rent and rates in respect of certain properties held by indigenous villagers and benefits relating to land granted to male indigenous inhabitants under what is known as the small house policy. The question is whether one could derive the political rights contended for from the lawful traditional rights and interests of the indigenous inhabitants within Article 40.”

46.It would appear that the Chief Justice considered, or did not question the proposition, that benefits relating to land granted to male indigenous inhabitants of the New Territories under the Small House Policy formed part of the “lawful traditional rights and interests” of the New Territories indigenous inhabitants in BL 40, and were protected by that article.  However, as pointed out by Lam J (as he then was) in Koon Ping Leung v Director of Lands [2012] 2 HKC 329, at paragraphs 24 to 25 and 29, the Chief Justice’s statement in respect of “the benefit under the small house policy” was obiter, or “a mere passing remark as to the position adopted by the parties in that case where the focus was on some other issues”, and thus not binding as a matter of law.  At paragraphs 26 and 27 of his judgment, Lam J also stated the following:

[26] One must not assume that all the rights afforded to an indigenous inhabitant under the Small House Policy come within the scope of Article 40. As mentioned, the Small House Policy was only implemented by the Government in 1972 and Professor Johannes Chan advanced a forceful argument in his book, Law of the Hong Kong Constitution, that the traditional rights and interests under Article 40 should be confined to rights and interests traceable to rights of the indigenous inhabitants in 1898 when the New Territories was leased to the British Government.

[27] Professor Chan analysed the different rights under the Small House Policy and drew a distinction between the right to build on one’s own land and the acquisition of Government land to build a small house. He concluded that the latter right cannot be traceable to any right of indigenous inhabitant in 1898 and therefore it cannot be within the scope of Article 40. Further, by reason of the inherent discriminatory nature of the Small House Policy, insofar as it is not justifiable as protection of traditional rights of indigenous inhabitants, the Professor opined that the Policy is unlawful.

47.The same view regarding the status or effect of the Chief Justice’s observation in Chan Wah was taken by Deputy High Court Judge Marlene Ng (as she then was) in Secretary for Justice v Liu Wing Kwong [2014] 2 HKLRD 155, at paragraph 63 to 63, who expressly agreed with the analysis of Lam J.  That case related to the scope of the exemption from assessment to rates in respect of eligible buildings inside the Designated Village Areas in the New Territories under Section 36(1)(c) of the Rating Ordinance, Cap 116.  At paragraph 64 of her judgment, the learned judge stated the following:

“In my view, however, Chan Wah concerned a challenge mounted by non-indigenous villagers against the validity of electoral arrangements in respect of a village representative election of the village in which they resided. Therefore, the comments made by Li CJ regarding exemption from payment of rates were merely obiter dicta. These comments will of course be respected, but they are not binding as a matter of law. Furthermore, as the case had nothing to do with exemption from assessment and/or payment of rates, Li CJ did not in his judgment delve into the long legislative history and/or details of the provisions of the Rating Ordinance. And on the facts of that case, it was not necessary to closely examine the question of what constituted lawful traditional rights and interests of New Territories indigenous villagers under Article 40 of the Basic Law.”

48.When the Liu Wing Kwong case reached the Court of Appeal in CACV 160/2013 (4 March 2016), Au J (as he then was, and with whom Kwan JA and Chu JA agreed) also expressed the view that the Chief Justice’s observation in Chan Wah was obiter and not binding as a matter of law. At paragraph 37 of the judgment of the Court of Appeal, the following was stated:

“本席完全同意吳法官引用林文瀚法官在梁官平一案,對陳華一案李首席法官相關意見的分析。基於在陳華一案的爭議主題是與免繳差餉一事完全無關,李首席法官在陳華一案中上述的意見,很明顯是一附帶意見。再者,該意見亦是未有經過當時與訟雙方的任何或深入陳述而作出的。故此該附帶意見在法律上並沒有約束力,也不應被視為已概括及肯定地為這議題作出了最終的定論。因此,吳法官的法律分析及理由並沒有犯上任何錯誤。”

49.In the circumstances, in the absence of any definitive or binding authority on whether the Ding Rights should be regarded as forming part of the “lawful traditional rights and interests of the indigenous inhabitants of the New Territories” within the meaning of BL 40, I consider that I am entitled, and indeed bound, to consider this matter afresh.

 X.     THE “TRADITIONAL” (傳統) ELEMENT IN BL 40

(i)     The meaning of “traditional” (傳統)

50.There is no definition, or further explanation, of the expression “traditional” (傳統) in the Basic Law.  Its meaning should be ascertained by following the approach to the interpretation of the Basic Law as set out in Section VI above.  In particular, one should have regard to the context and purpose of BL 40 in order to ascertain the legislative intent of BL 40, or identify the meaning of the expression “traditional” (傳統) as used in BL 40.  Extrinsic materials, including materials relating to the drafting process of the Basic Law, are admissible and relevant to ascertain the context and purpose of BL 40, but the individual views of the drafters of the Basic Law are not helpful for the purpose of determining the meaning or effect of BL 40.

51.At the hearing of this application for judicial review, the parties referred the court to a large volume of “drafting materials” in relation to BL 40, including reports and compilation of views prepared by the Basic Law Drafting Committee and the Basic Law Consultative Committee.  It is not necessary to examine them in detail in this judgment. The effect of the drafting materials can, I believe, be summarised as follows:

(1)     There was a sharp division or diversity of contemporary opinions on whether the existing rights and interests of the New Territories indigenous inhabitants (including the Small House Policy) ought to be preserved or protected after 1 July 1997.

(2)     The objections to the preservation or protection of the existing rights and interests of the New Territories indigenous inhabitants included arguments based the right to equality or the right against discrimination.

(3)     On the other hand, those who supported the preservation and protection of the existing rights and interests of the New Territories indigenous inhabitants argued that those rights and interests were “historical problems” (歷史遺留下來的問題), or had “historical origins” (歷史的淵源), or arose due to the “special circumstances of New Territories” (新界的特殊情況), or were based on “a few hundred years of traditional custom or practices” (數百年的傳統習俗) which ought to be respected[35].  In the context of those discussions, it seems to me to be plain that the references to “historical problems”, “historical origins”, “special circumstances of the New Territories” or “a few hundred years of traditional custom or practices” were meant or intended to refer to those traditional practices or conventions or customs in the New Territories which were in practice at the time of the New Territories Lease in 1898 and which were still being practised at the time of the drafting of the Basic Law.

(4)     It was generally thought, or assumed, that the Ding Rights formed part of the existing traditional rights and interests of the New Territories indigenous inhabitants.

(5)     There was, however, little in-depth analysis of what constituted the “traditional rights and interests” of the New Territories indigenous inhabitants (save that in the Seminar Report mentioned below, there were references to 8 matters as being the existing rights or interests of the New Territories indigenous inhabitants), and whether the Ding Rights were indeed part of the traditional rights and interests of the New Territories indigenous inhabitants; instead the focus of the discussion was on whether the existing rights or interests of the New Territories indigenous inhabitants ought to be preserved or protected after 1 July 1997 by the Basic Law[36].

(6)     It was eventually decided that the “traditional rights and interests”, without further elaboration, of the New Territories indigenous inhabitants would be protected by the Basic Law via BL 40.

52.A seminar was organized by the BLCC Special Group and the Secretariat of the Basic Law Consultative Committee on 6 September 1986 to ascertain the views of the New Territories indigenous inhabitants regarding their rights and interests.  At that seminar, the Kuk and Rural Committees were invited to make submissions, and Mr Lau Wong-fat (former Chairman of the Kuk) made submissions on behalf of the New Territories indigenous inhabitants.  A report collating the submissions made and the views expressed at the seminar (“the Seminar Report”) was subsequently prepared and submitted to the BLCC Special Group for consideration at its 10th meeting held on 16 January 1987.  It was agreed at that meeting that the rights and interests of the New Territories indigenous inhabitants should be written in the Basic Law, and that the Seminar Report should be submitted to the Basic Law Drafting Committee for consideration.  In the 1st part of the Seminar Report, a total of 8 items of existing rights or interests of the New Territories indigenous inhabitants were set out, including: (1) the status of the Kuk and its members, (2) the right of the New Territories indigenous inhabitants once in their lifetime to build a small house (3-storeyed) with an area not exceeding 700 square feet and its height not exceeding 25 feet, (3) rates exemption for village houses in the New Territories, (4) ex-gratia compensation for the New Territories indigenous inhabitants’ villages in face of removal, (5) the New Territories indigenous inhabitants’ land leases and other rights relating to land, (6) burial rights of the New Territories indigenous inhabitants, (7) preservation of custom and cultural relics (as further specified), and (8) the New Territories indigenous inhabitants’ right to inherit legacy (in particular, the inheritance right belongs to the male members of a family in the absence of a will, and properties held under the names of a tong or tso are to be managed by a manager).  It may be noted that some of the rights mentioned in the Seminar Report, eg the status of the Kuk and its members, could not have formed part of the traditional rights or interests of the New Territories indigenous inhabitants under BL 40, because, as pointed out by Cheung J in Tse Kwan Sang[37], the Kuk was only established in 1926, which was almost 30 years after the British occupation of the New Territories, and the right to participate in the affairs of the Kuk was not available to the indigenous population in 1898.

53.The “context” of BL 40 is, I consider, that at the time of the drafting of the Basic Law, it was generally thought or believed that (i) there were some existing rights or interests which were enjoyed by the New Territories indigenous inhabitants only but not by the rest of the general public in Hong Kong, (ii) such rights or interests were not or might not have been prescribed by law but were based on traditional or customary practices or conventions in the New Territories over the centuries, and (iii) such practices or conventions were in practice at the time of the New Territories Lease in 1898 and were still being practised at the time of the drafting of the Basic Law.  Indeed, it was for these reasons that article 40 (or its predecessor) in the earlier draft versions of the Basic Law, which referred to “新界原居民的合法權益” (the lawful rights and interests of the New Territories indigenous inhabitants), was later changed to “新界原居民的合法傳統權益” (the lawful traditional rights and interests of the New Territories indigenous inhabitants):

(1)     In (i) Article 15 under Chapter 3 of the draft framework of the Basic Law considered at the Second Plenary Session of the Basic Law Drafting Committee on 18 April 1986, (ii) Article 17 under Chapter 3 of the discussion draft of the Basic Law considered at the Third Plenary Session of the Basic Law Drafting Committee on 29 November 1986, and (iii) Article 17 under Chapter 3 of the revised draft of the Basic Law considered at the Fourth Plenary Session of the Basic Law Drafting Committee on 13 April 1987, the language used was “新界原居民的合法權益” (the lawful rights and interests of the New Territories indigenous inhabitants).

(2)     In the revised draft of the Basic Law considered at the Fourth Plenary Session of the Basic Law Drafting Committee on 13 April 1987, it was mentioned that some members proposed that the words “合法權益” (lawful rights and interests) should be changed to “合法傳統權益” (lawful traditional rights and interests) because some rights or interests of the New Territories indigenous inhabitants were based on a few centuries of traditions of farmers, and were not prescribed by law.  The specific examples given were succession rights relating to tso and tong lands.

(3)     Accordingly, in Article 17 under Chapter 3 of the revised draft of the Basic Law considered at the Fifth Plenary Session of the Basic Law Drafting Committee on 22 August 1987, the wording was changed to “合法傳統權益” (lawful traditional rights and interests).  I pause to add that the various drafts of the Basic Law considered at the Plenary Sessions of the Basic Law Drafting Committee were written in the Chinese language only.

(4)     The April 1988 and February 1989 drafts of the Basic Law published for public consultation in Hong Kong were written in both the Chinese and English languages, and Article 40 referred to “合法傳統權益” (the legitimate traditional rights and interests) of the New Territories indigenous inhabitants.  Since the Chinese version of the Basic Law is the authentic text, nothing turns on whether the expression 合法 is translated as “lawful” or “legitimate”.  I should add that none of the parties has suggested that whether the expression合法 should be translated as “lawful” or “legitimate” has any significance.

(5)     In the final text of the Basic Law as adopted by the Seventh National People’s Congress at its Third Session on 4 April 1990, the language used was “合法傳統權益” (lawful traditional rights and interests).

54.In so far as the “purpose” of BL 40 is concerned, I consider it to be clear that its purpose is to protect those existing rights and interests enjoyed by the New Territories indigenous inhabitants which may properly be regarded as their “traditional rights and interests” after 1 July 1997 in accordance with the theme of continuity of the Basic Law.

55.Having regard to the context and purpose of BL 40, I agree with the Government’s submission that the “traditional” rights and interests of the New Territories indigenous inhabitants which are protected by that article are confined to those traceable to the rights and interests of the New Territories indigenous inhabitants before the commencement of the New Territories Lease in 1898.   The traditional rights and interests of the New Territories indigenous inhabitants do not, in my view, include those practices which only came into being after the British took the New Territories Lease in 1898 unless they are traceable to their previous rights and interests.  This view is supported by:

(1)     the decision of Cheung J in Tse Kwan Sang where it was held that because the right to participate in the affairs of the Kuk, which was only established in 1926, was not available to the indigenous population in 1898, it was not a traditional right or interest protected by BL 40; and

(2)     the academic writings of Professor Johannes Chan, SC (Hon) and C L Lim in Law of the Hong Kong Constitution, 2nd Edn (2015), at paragraphs 30.005, 30.011 and 30.013, which were referred to by Lam J in Koon Ping Leung, at paragraph 26, and by Deputy High Court Judge Marlene Ng in Liu Wing Kwong, at paragraph 65.

56.The mere fact that the members, or some members, of the Basic Law Drafting Committee or Basic Law Consultative Committee thought or believed that the Ding Rights were part of the traditional rights or interests of the New Territories indigenous inhabitants is not sufficient to make them “traditional” rights or interests for the purpose of BL 40.  The words “傳統 (traditional)” were used in the Basic Law for particular reasons (see paragraph 53 above).  They cannot be treated as meaning simply what the members, or some members, of the Basic Law Drafting Committee or Basic Law Consultative Committee thought or believed them to mean.  In my view, it must be shown that the Ding Rights are, as a matter of fact, “traditional” rights or interests of the New Territories indigenous inhabitants in the sense mentioned above before they are protected by BL 40.

57.Mr Yu argues that the question of whether the rights and interests of the New Territories indigenous inhabitants under the Small House Policy can be said to be “traditional” within the meaning of BL 40 is not the same question as whether the Small House Policy came into being in order to protect the rights and interests of the New Territories indigenous inhabitants[38].  It seems to me that while the latter question is not conclusive, it is not irrelevant either.  If the Small House Policy (or previous corresponding policies) can be shown to have come into being for the purpose of protecting, or in recognition of, some traditional rights or interests of the New Territories indigenous inhabitants, it is more likely that the rights or interests enjoyed by the beneficiaries under the Small House Policy could be regarded as being traceable to those traditional rights or interests of the New Territories indigenous inhabitants. The converse situation, I believe, also holds true.

58.There is one other matter that I should mention here.  In a document titled “A compilation of the views of visiting Mainland drafters on some questions concerning the draft Basic Law for solicitation of opinions” during the period from 4 to 7 June 1988 (the “Compilation”) prepared by the Secretariat of the Basic Law Consultative Committee, it was said that during the Sino-British negotiations on the land question, it had been agreed that the rights of the indigenous inhabitants of the New Territories would be protected, and they included the right of male descendants to build small houses and a promise not to increase their land rent[39].  There is, however, no evidence before the court on the alleged agreement during the Sino-British negotiations.  On the contrary, while the issue of rent was dealt with in paragraph 2 of Annex III (Land Leases) to the Joint Declaration[40], there is no express provision anywhere in the Joint Declaration or the Annexes thereto conferring protection of any right of male descendants of the New Territories indigenous inhabitants to build small houses.  In my view, the Joint Declaration and its various Annexes should be regarded as being the authentic documents embodying the agreement reached by the PRC Government and the British Government, and the PRC’s basic policies regarding Hong Kong.  I also note that in the Compilation, it is stated that the views as expressed “are merely explanations and interpretations given by individual drafters and do not represent the view of the Drafting Committee as a whole”, and that the paper “has not been read by the drafters concerned and the Secretariat will be responsible for any discrepancy”.  In the circumstances, I am not prepared to proceed on the basis that there was an agreement reached during the Sino-British negotiations that the right of male descendants of the New Territories indigenous inhabitants to build small houses would be protected.

59.In order to determine whether the Ding Rights are “traditional” rights or interests of the New Territories indigenous inhabitants within the meaning of BL 40, it is now necessary to briefly examine the history of land holding and land administration in the New Territories starting from the time immediately before the New Territories were leased to the Crown in 1898.

(ii)     Land tenure before the New Territories Lease

60.The system of land holding prevailing in the New Territories prior to the New Territories Lease of 1898 was the subject of expert opinion given by Professor Anthony Dicks, QC, a well-known expert in this jurisdiction on Chinese law and custom as practiced in the New Territories, in Winfat Enterprises (HK) Co Ltd v Attorney General [1983] HKLR 211. At p 216, Kempster J (as he then was) recited paragraphs 7 to 11 of Professor Dicks’ affidavit as follows:

“7. Most land (other than land used for public purposes) was in late nineteenth century China held on what is called ‘common tenure’. Other forms of tenure such as feudal and quasi-feudal tenure existed but were very rare and there was also military service tenure and 'furnace land'.

8. Land under the common tenure or ‘land of the ordinary people’ was an interest in perpetuity held by a proprietor on two principal conditions, namely, payment of the land taxes and performance of labour services. Over the years the labour service fell into disuse particularly in South China and was commuted into additional land tax in lieu of labour [which] were collected as a single annual amount.

9. Land held under common tenure could be acquired in three ways, viz. by inheritance, by purchase and by the cultivation of unoccupied or waste land. I need not dwell on the first of these. As to the second, the tenure was transferred to the purchaser. Outright sales were not always made, it being possible in many parts of China to dispose of land by creating limited interests of various kinds which were themselves subject to possible alienation.

10. The cultivation of unoccupied or waste land was encouraged by the authorities and a valid title to such lands could be acquired by following a statutory procedure for registration. Land tax did not become payable for some years. Once land was [acquired] in this way it was subject to common tenure and was as freely alienable as such land in general.

11.    With a very few specific exceptions mentioned below there appeared to have been no limitations on the use of land held under common tenure.  The character of tenure and the tax payable on such land did not change after the erection of buildings on it.  It should be remembered that in China at the end of the nineteenth century the great bulk of the land was in agricultural use and could be expected to continue in that use.  The need for any comprehensive form of restriction does not appear to have been felt.”

61.The nature of “common tenure” was succinctly summarized by Lord Diplock when the Winfat Enterprise case reached the Judicial Committee of the Pricy Council [1985] 1 AC 733, at 744H, as follows:

“Although nominally the property of the Emperor of China, to whom land tax was payable, the land was held by its occupiers upon common or customary Chinese tenure by individuals or families or clans. It suffices for present purposes to note that it was a perpetual interest, heritable and assignable and subject to no restriction upon building on the land.”

62.Dr Hase, the Government’s expert on land custom and practices in the New Territories, disagrees with Professor Dicks’ opinion that land in the New Territories was, by and large, held on “common tenure” prior to 1898.  According to him, the formal system of land holding upon “common tenure” under the “Qing Code (大清律例)” was in fact “very rare” or “uncommon” in the New Territories[41]. Instead, land was held upon “customary tenure” based on custom or traditions. Dr Hase’s evidence, in summary, is as follows:

(1)     The Imperial Chinese Law started from the principle that all land was owned by the Emperor, and ordinary citizens could only use land where a lease or licence had been granted by the Imperial authorities, with a fee for the use of the land being paid on an annual basis to the Imperial authorities. This statement of principle was, however, not explicitly stated in the Qing Code.

(2)     Under the Qing Code:

(a)     Land tax was payable for arable land and licence fee was payable for land used for some commercial purposes (such as salt-works, mines or brickworks) to the Imperial authorities.  The code stipulated that such a lease or licence was perpetual, hereditable, and transferable, subject only to the land tax or licence fee being paid.

(b)     All land not paying land tax or licence fee was Imperial land and remained Imperial property, and any intrusion into it was a criminal offence.

(c)     There was no requirement for houses to be licensed, or approved by the Imperial authorities, whether before construction, before occupation, or at any later date.  They were treated as being appurtenant to the land.  Although houses could be registered in the Imperial Land Registry, this only occurred in the major cities (eg Canton).  No such cases are known for the New Territories.

(3)     Notwithstanding the land tax system being formally applicable to the New Territories under the Qing Code, it is likely that not more than 10% of the agricultural land in the New Territories paid land tax.  The Imperial land law was generally in desuetude in the New Territories at the end of the 19th century.  It was being enforced only partially, if at all.

(4)     Under traditions and custom which were in fact being practised in the New Territories, a Subsoil (tei kwat, 地骨)-Topsoil (tei pei, 地皮) system provided the framework for the holding and use of land in the New Territories.

(a)     The Subsoil land-owner would be the lessee who paid land tax to the Imperial authorities.  He owned the land for which he paid tax and was also regarded as the owner of the surrounding land until he came up against land under the control of the next land tax-payer.  The boundaries would usually be some easily recognizable natural features (such as a river or mountain spur).

(b)     The Topsoil land-owner would be the lessee of the Subsoil land-owner, and pay a fixed and unchangeable annual rent to the Subsoil land-owner.  Such lease would be perpetual, hereditable and partible. The Subsoil land-owner would grant to the Topsoil land-owner the absolute right to till the soil, control all the wastes within the area leased, build houses, make bricks for self-use or for small-scale sale, cut fuel, reclaim land, hunt and fish, bury the dead, and so forth.  The Subsoil land-owner’s rights over the land after he had leased it to the Topsoil land-owner were very restricted.  His interest would essentially lie only in the rent-charge payable by the Topsoil land-owner.

(c)     Since both the Subsoil land-owner’s lease with the Imperial authorities, and the Topsoil land-owner’s lease with the Subsoil land-owner, were perpetual and hereditable, such lease would usually be held upon a customary trust, such as a clan ancestral trust or a family trust of various kinds.  An individual village family would normally hold their land by way of a customary perpetual (sub-)lease from the Topsoil land-owner for the use of the land.

(d)     In practice, the land in a village community would come under the control of the village elders who made all important decisions on behalf of the village community about farming, building houses and other aspects of village life without any external input or control.  For at least some two centuries before 1898, there had been a strong belief amongst villagers that they had the absolute right to do so without seeking the consent of any external authority, be it the Imperial authorities or the Subsoil land-owner.

(e)     If a villager wished to build a house for himself or his son, he would apply for permission to do so from the village elders and would act in accordance with the rules set by the village community as to where and how the house might be built.  The village elders would have the power to give consent or reject the application.

(f)     An outsider would generally not be permitted to purchase a house or land in another village.  Outsiders wishing to do so would in any event be rare.  For that to happen, approval to join the village would have to be sought and obtained from the village community and, if approved, he would have to undergo the rituals of “Entering the Register” (入籍), which were expensive, and forsake his old village.

(g)     Traditionally, women could not inherit village land, whether arable or house-land, or houses.

63.It is not in dispute that the Subsoil-Topsoil land holding system as described by Dr Hase was likely to be contrary to the Qing Code, since it was impermissible under the code to occupy or cultivate land without taking out a lease from the Imperial authorities and paying land tax thereon[42].

64.Professor Cheung, the Applicants’ expert on Chinese law and custom, considers that the Subsoil-Topsoil land holding system was not “law” in the strict sense, and had no legal status in the Qing Dynasty.  No Qing Dynasty local official would act openly against the Imperial Qing Code or say that there was another land system which operated in parallel to the Qing Code.  Any county magistrate who overlooked or turned a blind eye to any practice violating the Qing Code would, or could, be impeached and punished by his superiors.  Anyone who occupied land without paying land tax would be subject to a heavy penalty.  The Subsoil-Topsoil land holding system was merely a customary practice which, like tax evasion, the Qing officials understood was in existence.  The Qing officials might accept some customary practices but only so long as they did not violate the system of laws promulgated under the Qing Code.

65.Professor Cheung agrees with Dr Hase that there was no specific law relating to building structures on privately-owned land under the Qing Code.  The Qing government was concerned primarily with land on which they could levy and collect tax.  By the Qing Code, a land owner did not need to seek consent from the local officials or any other persons for developing, or building on, his/her land[43].  Professor Cheung disagrees with Dr Hase’s opinion that houses could only be built in the village areas of the New Territories with the consent of the village communities.  He stresses that the role played by the so-called village communities was never permitted or acknowledged by the Qing Code[44].  Professor Cheung also says that women could own land and houses in the Qing Dynasty, and were allowed to do so under the Qing Code[45].

66.In my view, whatever may be said about the formal, or strict, legal status of the Subsoil-Topsoil land holding system as described by Dr Hase, it existence in fact cannot be denied[46].  It existed alongside the “common tenure” system under the Qing Code and was practised by the village communities in the New Territories for many years prior to 1898.  This much is not, I believe, disputed by Professor Cheung[47].

(iii)    The New Territories Lease of 1898 and the Proclamations

67.In the Qing Dynasty, the New Territories were under the jurisdiction of San On (新安) County of the Guangdong Province.  It had a population of about 90,000 immediately before the New Territories Lease in 1898.

68.On 9 June 1898, the respective Governments of the Great Britain and (Qing) China signed what is commonly known as the “Second Peking Convention” or the “New Territories Lease”, under which the territories north of what is now called Boundary Street and south of Sham Chun River, and the surrounding islands, with a total area of some 356 square miles, were leased to the Crown for a term of 99 years from 1 July 1898 to 30 June 1997.

69.Although the New Territories Lease was to commence on 1 July 1898, it was not until April 1899 that the British actually took over the New Territories, apparently because of some resistance from discontented fractions in and out of the New Territories, which the British had to put down before taking over the area.

70.Shortly afterwards, the then Governor of Hong Kong, Sir Henry Blake, issued a number of proclamations or public statements, including the following:

(1)     Proclamation issued on 8 April 1899 –

“… I, SIR HENRY AUTHUR BLAKE, do hereby … proclaim and direct that from the said 17th day of April 1899, all laws and ordinances, which shall at such date be in force in the Colony of Hongkong, shall take effect in the said territories and shall remain in force therein until the same shall have been altered or repealed by Her Majesty or by the Governor of Hongkong, by and with the advice or consent of the Legislative Council.”

(2)     Chinese Proclamation issued on 9 April 1899, the English translation of which states –

“ I would also impress upon you that this territory having been leased by His Imperial Majesty the Emperor of China to Her Britannic Majesty the Queen, as subjects of Her Majesty’s Empire, your commercial and landed interests will be safeguarded, and that your usages and good customs will not in any way be interfered with.

It will be necessary for you to register without delay your titles for the land occupied by you, that the true owners may be known.  Should any land be required for public purposes it will be paid for at its full value.”

(3)     Speech given on the occasion of the hoisting of the Flag on 17 April 1899

“… From this day of hoisting the flag you and your families and your property come under British protection… You may carry on your lawful occupations and your buying and selling unobstructed. Your ancestral temples and your temples for worshipping your gods will remain. Our Queen hopes that you will always enjoy prosperity and happiness, and I, the Governor, by command of Her Majesty’s Government, hereby declare that all your customs and usages will be respected …

… In all the villages we will establish schools, and you will be protected in your rights …”

(4)     Chinese Proclamation issued on 12 July 1899, the English translation of which states –

“I, SIR HENRY ARTHUR BLAKE, … hereby inform you, the landowners in the New Territories, that an Officer will visit the sub-districts for the purpose of registering landowners on a date due notice of which will be given to you. All you who can show that you have had possession of landed property for some time must fill up a schedule in the following form: -

1. Name of owner.

2. Nature of title.

3. Date of lease or grant (if any).

4. Number of years in occupation.

5. Description of land.

6. Dimensions of land.

7. Situation of land.

When these schedules are distributed to a village, any person who claims land as his property must fill up a schedule and bring it in person to the Visiting Officer, when he comes to the village in which such person resides; and the Officer will make an entry in the register that such person is the owner and will add such other particulars as may be necessary. A list of those who have been registered as landowners in the village, and of their holdings, will be posted in the village for seven days, and afterwards an extract of the entry of each holding will be made to be handed to the owner. But before it is handed to the owner he must pay the amount of Crown Rent fixed as due by him. If no rent is paid, the land will be forfeited to the Government without fail.

If there is any unsettled dispute about property, the name of the person in actual possession will be registered, and he must pay the Crown Rent, but an extract of an entry in the Register will not be issued until the Squatters’ Board has ascertained that the person in possession is the legal owner and the Board’s decision has been approved by me. In that case an extract will be issued to him, and he will be permitted to remain in possession. But should the Board decide that the property is really not his property, the Crown Rent paid by him will be refunded, and the person who is adjudged by the Board to be the person who should pay the rent, and who is approved as such by me, must forthwith pay the rent due. All you owners of land must report all the land in your possession. Should it be found at any time that any land owned by any person has not been reported, it will be treated as Government land. A survey will shortly be made of the whole of the Leased Territory, so that the boundaries of the various holdings may be clearly known; and any cases of neglect to report on the part of owners of land will be easily discovered, and will involve forfeiture of the property to Government. Do not say that I have not warned you. The Crown Rent, including all charges fixed for the present, is given below. You must all without exception obey. Do not be disobedient. A special proclamation.

When the survey has been completed permanent certificates of titles will be issued.  If anyone has been forcibly deprived of his land, or been fraudulently induced to sell land at a low price, he may present a petition to the District Officer if he lives North of the Kowloon range of hills, or if he lives South of it to the Registrar General or the Visiting Officer, to be forwarded to the Squatters’ Board for enquiry.”

(5)     Speeches given on 2 and 4 August 1899 to the “Committee-men” at Taipo and Ping-shan –

“… I wish to interfere as little as possible with your good customs, but there is one principle of British law that must be observed. All punishment for injuries must be inflicted by the appointed authority under the law…

The time has now come when all occupiers of land must register their titles with the Land Officer.  When application is made giving the exact area of land occupied, a notice will be posted in the village so that if another claims the land he can apply to the Land Officer, when the claims will be considered by the Land Court.  No certificate of registration will be issued until the Crown rent has been paid. There should be no delay in registering your titles.  The occupier will, in the absence of another claimant, be accepted as owner, but if the person in occupation is decided not to be the proper owner the amount paid by him will be returned, and the rent will be collected from the person decided to be the lawful owner.”

71.It is well established that these proclamations or public statements do not have the force of law[48].  Nevertheless, it would seem to be clear that the intention of the Government at that time was to respect the existing customs and usages in the New Territories subject to the general laws applicable to the rest of Hong Kong.  Further, it is clear that the Government had decided in the early days to prepare a comprehensive register of land ownership in the New Territories and carry out a comprehensive land survey of the New Territories which, as will be seen below, paved the way for a fundamental change of the system of land holding in the New Territories.

(iv)    Change of land holding from common/customary tenure to Crown lease

72.Soon after the British actually took over the New Territories in April 1899, the Government took steps to divide the New Territories into 8 districts and 48 sub-districts, and appointed “Committee-men”, made up of village elders, to co-operate with the Government in regulating the local affairs of the villages, and in forming a link between the Government and the villagers. The Land Office (with branches at Taipo and Ping-shan) was also set up to secure the registration of the owners of cultivated land in the New Territories with a view to preparing a Crown Rent Roll.

73.As earlier mentioned, the Government also decided to undertake a survey of the land in the whole of the New Territories to map and record lot boundaries, areas and land use for the purpose of land administration, including the assessment of revenue chargeable as Crown rent according to whether the land was classed as agricultural (and what class) or building land.  The actual survey was carried out by surveyors from India.  A total of some 563 cadastral maps were prepared showing the position and area of individual holdings of land in the New Territories.  The survey began in November 1899, and was mostly completed by May 1903.  Details compiled in the survey were collated into schedules to which were attached the relevant Demarcation District survey sheets.  These formed the Schedules to the Block Crown Leases (see below).

74.In accordance with the procedures mentioned in the Proclamation issued on 12 July 1899, an Assistant Land Officer would issue a notice to the villages in a sub-district, informing the inhabitants that their land claims had to be sent in by a certain date.  The landlords and tenants were required to bring their title deeds to the Land Office for the purpose of registration.  There were in existence two types of title deeds, namely, (i) “red deeds” (紅契), being officially stamped deeds which had been registered and stamped by the Chinese Magistrate of San On District, and (ii) “white deed” (白契), which were not officially stamped and which were records of private sales only.  The last deed before the date of the Second Peking Convention was generally taken as the root of title for the purpose of registration, unless circumstances required the production of earlier deeds.  In many cases, title deeds had been lost or destroyed, and the claimants were required to produce secondary evidence of ownership of the land, such as rent roll and receipts from the Chinese Imperial Government for land tax, and other particulars which might be pertinent to the land in question.  The claimants were also required to report the nature and area of the land, whether cultivated, fertile or otherwise, the kind and number of crops it produced, the rent paid, etc, to help the Land Office classify the land.  Such information was also intended to be used to determine the Crown rent to be charged.

75.During the registration process, the Land Office encountered a lot of problems and disputes which it is not necessary to set out in this judgment.  Within a short period of time, it was decided that the claims collected by the system described above were insufficient for any purpose other than preparing a temporary Crown Rent Roll[49].  It was also decided that such problems and disputes should be resolved by a special court, namely, the Land Court, to be set up.

76.In 1900, three New Territories (Land Court) Ordinances (Nos 4, 8 and 18 of 1900) were enacted to facilitate the hearing, determination and settlement of land claims in the New Territories.  The following provisions of Ordinance No 18 of 1900 may be noted:

(1)     By Section 3 –

“All claims in relation to land in the New Territories shall … notwithstanding any previous registration, be heard and determined by a Land Court”.

(2)     By Section 13 –

“The Court may allow or disallow any claim in relation to land or allow the same as to part thereof, or for such period or at such rent and on such other conditions as may appear to the Court to be equitable and just.”

(3)     By Section 14 –

“In cases where the Court allows the claim or part of the claim, such claim and its allowance shall be reported by the Registrar to the Governor in due course in order that a title appropriate to the case may be granted.”

(4)     By Section 15 –

“All land in the New Territories is hereby declared to be the property of the Crown during the term specified in the Convention of the 9th day of June, 1898 … and all persons in occupation of any such land, after such date as may be fixed by the Governor by notification in the Gazette, either generally or in respect of any specific place, village, or district, shall be deemed trespassers as against the Crown, unless such occupation is authorized by grant from the Crown or by other title allowed by the Court under this Ordinance, or by licence from the Governor or from some Government officer having authority to grant such license, or unless a claim to be entitled to such occupation has been duly presented to the Court and has not been withdrawn or heard and disallowed.”

77.The Land Court was formally constituted on 1 June 1900, with Mr Pollock as President and Mr Gompertz as Member, and the first sitting of that court took place on 20 February 1901. The general procedure adopted by the Land Court was, in summary, as follows.  A district would be chosen and marked out by boundaries, and a notification would then be issued calling upon all land owners to present their claims to the Land Court before a given date.  All lands claimed were surveyed and particulars of ownership entered in the demarcation books, while claimants were summoned to attend the court.  After the last day for presenting claims, all lands unclaimed in the district would be treated as the property of the Crown.  The claims themselves were sorted, undisputed ones being available for the Rent Roll, while those which were contested would be set down for hearing and resolved by the court.  The determination and settlement of the land claims for the whole of the New Territories was carried out and completed by the Land Court by around 1905.  Most of the disputes determined by the Land Court were disputes between the Topsoil land-owner and Subsoil land-owner.  By and large, the Land Court found in favour of the Topsoil land-owner unless the Subsoil land-owner was able to produce a title document and show that he was actually paying land tax to the Imperial authorities prior to the New Territories Lease of 1898.

78.As decided by the Land Court, the New Territories were divided into 477 Demarcation Districts, which were then divided into Blocks, with a Block Crown Lease being issued for each Block.  A total of some 340 Block Crown Leases were eventually issued.  Each Block Crown Lease contained a Schedule detailing the separate ownership of the land, the lot number allocated to each piece of land, the user to which the land was put at the date of the survey (eg “agricultural”, “building”, “padi”, “dry cultivation”, “lime kiln”, “threshing floor”, “ruin”, etc) and the amount of Crown rent payable for that lot.  A total of some 354,277 lots were listed in the Schedules to the Block Crown Leases in this manner.  These lots are now commonly referred to as “Old Schedule lots”, while lands in the New Territories sold after 1901 are referred to as “New Grant lots”, and the corresponding grants as “New Grants”. Unclaimed land was treated as being vested in the Crown.

79.The net effect of all these was that the previous perpetual interests of the land owners in the New Territories held upon common or customary tenure were abolished and replaced by a fundamentally different system of land ownership under which land was regarded as being held upon a lease from the Crown for a limited term subject to various covenants the nature and effect of which were governed by common law as modified by locally enacted Ordinances.  As stated by Lord Diplock in Winfat Enterprise, at p 745A-C:

“When the New Territories were ceded, the land became on 1 July 1898 the property of the British Crown for the 99-year period of the cession. It was declared to be so by the Land Court (New Territories) Ordinance 1900 (No. 8 of 1900). For the common or customary Chinese tenure under which the inhabitants had previously occupied their land there was substituted by that Ordinance a leasehold interest of 99 years less three days which, for reasons which do not appear in the evidence, took the form of an initial term of 75 years from 1 July 1898 which was automatically renewable for a further term of 24 years less three days. The leasehold interest in particular parcels of land in the New Territories was granted by incorporating them in the schedules of individual Block Crown Leases which identified their location and area and described the use to which they were put in July 1898. This was generally agricultural or garden ground - and such was the case with all the parcels with which this appeal is concerned. Land so described and scheduled to a Block Crown Lease was subject to an express covenant by the leaseholder not to use the land for building purposes other than for the proper occupation of the land as agricultural or garden ground and no building or structure of any kind could be erected on the land without the approval of the Crown Surveyor.”

80.For the sake of completeness, I should mention that in 1910, the New Territories Ordinance was enacted which consolidated and amended the laws relating to the administration and regulation of the New Territories.  Section 8 of the current version of the New Territories Ordinance, Cap 97, repeats in essence the declaration contained in Section 15 of the New Territories (Land Court) Ordinance mentioned above, and states as follows:

“All land in the New Territories is hereby declared to be and to have been from 23 July 1900, the property of the Government, and all persons in occupation of any such land shall be deemed to be trespassers as against the Government, unless such occupation is authorized by grant from the Government, or by other title allowed under this Ordinance, or by licence from the Chief Executive or from some Government officer having authority to grant such licence.”

(v)     Land sale in village areas in the New Territories prior to 1972

81.According to the joint opinion of Mr Davison and Dr Hase, in the period after 1898, where the Government wished to sell land for development in the New Territories, ie where the Government itself initiated the sale (as in the Market Towns and other development areas before the Pacific War, and in the New Town areas and other development areas after the war), a general invitation to bid at open auction for the land would be issued in the Government Gazette and in the District Office, and the sale of the land would be at the full market price to the highest bidder.  No restrictions of any kind as to the sex or indigeneity of the bidders was in place[50]. These disposals of land are not relevant for the purpose of this case.  Also not relevant for the present purpose are cases where land outside village areas in the New Territories was sold by auction upon the initiative of applicants, mainly city merchants, to be used for building “villas” or “luxury country houses”.  Again, there was no restriction as to sex or indigeneity of the bidders[51].  What is relevant to the present case are situations where land in a village area in the New Territories was sold following an initiative by an applicant, and these will be the focus of the following discussion.

82.Sale by public auction: as earlier mentioned, unclaimed land in the New Territories after completion of the Block Crown Lease exercise was treated as Crown land and became available for alienation by the Government by way of public auction. The land was sold under standard conditions of sale which were in use up to the Second World War.  Before any land was put up for sale by auction after a request had been made by an applicant, the District Officer would first check that there were no Government objections to the sale of the land in question (eg, incompatibility with public works such as a projected road or a water pipeline), after which he would give public notice of the proposed sale on the village notice board and the District Office notice board.  The District Officer would also discuss the proposed sale with the village elders to check that there were no valid objections on the grounds of damage to the village fung shui, access footpaths, watercourses, etc.  The District Officer would generally not act against the objections of the village elders.  If no valid objections were raised, the District Officer would then proceed with the sale of the land by auction.

83.The Government has been able to locate primary documents relating to New Grant lots sold by public auction dating back to 1904.  Dr Hase states that the first sale of Crown land for building houses in the New Territories took place in November 1904[52].

84.I note that (i) in a Memorandum for Executive Council on “Land Conversion in the New Territories”, XCC 27, dated 2 April 1957 (“the 1957 ExCo Memo”), “New Grant lots” were referred to as “lots sold in the New Territories since 1901”, and (ii) in another Memorandum for Executive Council also on “Land Conversion in the New Territories”, XCR 237, dated 24 June 1960 (“the 1960 ExCo Memo”), it was stated that “[s]ince 1902 villagers in the New Territories have acquired certain Crown land in the form of New Grant lots near their village for agricultural purposes”.  It does not matter much, in my view, whether the first sale actually took place in 1904 or earlier in 1901/1902, although I believe the former to be the more likely scenario because such sale probably could only take place after the completion of the land survey in the New Territories in 1903/1904.

85.According to Dr Hase, the upset price at these auctions since around September 1905 until the Japanese War, at $1 per 100 sq ft (except where the chance of development was higher), was a concessionary one and was undoubtedly a political move.  He also says that the low price was “probably” due to the posting of an Assistant Land Officer to the New Territories in January 1905:

“he would very quickly have seen that there were not going to be any competing bids for simple house-sites, and that sales would have to be at the upset price. He would also have become aware that the villagers believed that they had always had the right to build houses on Imperial land: if they now had to pay a premium for Crown Land sites, then only a low rate would be acceptable. Furthermore, it was clear, from the very first sales in 1905 that the 1905 rate for the upset price for such house-sites[53] was seen by the villagers as unacceptably high. In short, it was clear that an upset rate for house-sites at a definitely concessionary rate would be politically desirable”[54].

86.Mr Davison considers Dr Hase’s statement above (up to “only a low rate would be acceptable”) to be speculative[55].  There does not appear to be any objective or contemporaneous evidence to support Dr Hase’s evidence.  I am not prepared to accept that part of Dr Hase’s evidence objected to or disputed by Mr Davison.  In any event, even if one were to accept his evidence, it would appear that the sale of house lots in the New Territories at a concessionary rate at that time was motivated by a mixture of reasons. Although one of the reasons could be the villagers’ belief that they previously (pre-1898) had the right to build houses on Imperial land which they already owned, it was an entirely different matter whether they were entitled to, or should, be granted Crown land to build new houses, whether at a concessionary rate or otherwise.

87.Sale by private treaty: on 26 November 1908, Mr Wakeman (Land Officer) wrote to Sir F D Lugard (Governor of Hong Kong) recommending that the sanction of the Secretary of State for the Colonies be sought for a proposal that land in village areas in the New Territories be sold by way of private treaty instead of public auction:

“ I have the honour to recommend that the sanction of the Secretary of State for Colonies be applied for the selling land in the New Territories by private treaty instead of by auction as at the present time. In the Northern District of the New Territories applications for building lots are of daily occurrence. The lots are all small lots suitable only for a Chinese dwelling and mostly adjoining other houses in the village or in its vicinity. The premium very rarely exceeds $10 and is usually much lower and in the case of extension to existing lots is only about $2. There is never any competition at the auctions and no interest is taken in the sale except by the applicant and the lots are therefore knocked down at the upset price. The cost of advertising in the case of small lots almost swallows up any profit that might be gained from the premium and in the case of very small agricultural lots the costs for advertising exceeds the premium. I would therefore recommend that in the case of building lots in the New Territories apart from New Kowloon and the shores of Junk Bay sales of areas not exceeding 10,000 square feet should be sold without auction at the approved rates of premium and Crown Rent viz: One Cent or two cents per square foot and Crown Rent $100 or $50 per acre and in case of agricultural lots areas not exceeding ⅓ of an acre be similarly sold at the approved rates of premium and Crown Rent viz ¾, ½ or ¼ Cents per square foot premium and $3, $2 or $1 Crown Rent per acre per annum. The sales without auction should be limited to bona fide applications for Chinese occupation and should not be recommended when there was a likelihood of much development in the neighbourhood."

88.It can be seen that the reasons put forward by Mr Wakeman for the proposal that land in the New Territories be disposed of by private treaty instead of public auction were that:

(1)     applications for small building lots received by the Land Office were all small lots suitable only for a Chinese dwelling and mostly adjoining other houses in a village;

(2)     the premium would be low (rarely exceeding $10 and usually much lower);

(3)     there was never any competition at the auction and no interest was taken in the sale except by the applicant, with the consequence that the lot would be knocked down at the upset price; and

(4)     the costs of advertising a public auction in the case of a small lot would almost swallow up any profit that might be gained from the premium, and in case of a very small agricultural lot the advertising costs would exceed the premium.

89.On 4 December 1908, Sir F D Lugard submitted the abovementioned proposal to Lord Crewe (Secretary of State for the Colonies).  On 22 January 1909, Lord Crewe replied, stating that he had no objection to the proposal that Crown land in the undeveloped parts of the New Territories could be sold by private treaty on condition that in each case of such sale, the Land Officer should certify that to the best of his knowledge there was no probability of any competition at the sale and the applicant was the only person interested, and provided further that:

(1)     only building lots not exceeding 1,000 sq ft and agricultural lots not exceeding 1/8 of an acre could be sold by private treaty;

(2)     such sales were limited to bona fide applications from Chinese applicants for their own occupation in place where there was not a likelihood of much development in the neighbourhood; and

(3)     the lots which could be sold by private treaty were not situated in New Kowloon, the shores of Junk Bay, or land along the railway line or in the vicinity of the proposed road from Castle Peak to Shataukok and other important roads, which should continue to be sold by public auction.

90.From 1909 to a few years after the Second World War, sale by way of private treaty was one of the methods used by the Government to dispose of land in village areas in the New Territories. 

91.Three further points are of note in relation to this method of disposal of land in the New Territories:

(1)     it applied to both building and agricultural lots;

(2)     it was put forward not because of any, or any perceived, traditional right of the New Territories indigenous villagers to build small houses in their own villages; and

(3)     there was no formal restriction of grantees to the male indigenous villagers in the New Territories, although as a matter of practice such grants were generally only open to them[56].  This is because, as in the case of sale by auction prior to 1908, the District Officer would generally pay heed to any objections which might be raised by the village elders before making a private treaty grant to an applicant. 

92.Sale by restricted village auction: the practice of selling Crown land in village areas in the New Territories by way of private treaty ceased a few years after the Second World War, and open auctions were re-introduced.  Soon afterwards, however, a practice referred to as “restricted village auction” or “closed village auction” came to be developed which had the effect of turning the auctions, “open” in theory, into “restricted” or “closed” ones.  As stated in paragraph 37 of Chow Man Yee’s 2nd Affirmation:

(1)     No centralized register or written instructions concerning the restricted village auctions have been kept so there is no systematic record of such auctions.

(2)     Restricted village auctions were common in the New Territories between the late 1950s and 1971 when the District Officers sold house lots to villagers in their respective villages.

(3)     A restricted village auction was on the face of it a public auction although in actual fact it was restricted to villagers.

(4)     The restricted participation was achieved by administrative procedures such as (i) restricting circulation of the relevant information (for instance by posting notice only in the village concerned and not announcing the auction in the Government Gazette), (ii) holding the auction within the village concerned, normally in the village office or a village school, or (iii) withdrawing the lot if there were non-villagers bidding. (Other means employed by District Officers to make an auction “restricted” or “closed” included holding the auction at an awkward time (often at dawn), or locking the doors where the auction was taking place to exclude anyone other than villagers from bidding[57].

(5)     The villagers would sort out amongst themselves who would bid for each lot such that in actual fact there would only be one bidder for the lot.

93.The District Officers’ purported justification for auction to be “cook[ed] … in this most blatant manner”[58] can be found in two memoranda from the District Commissioner, NT, one to the Colonial Secretary dated 6 October 1960, and the other to the Director of Audit dated 7 October 1969.

94.In the first memorandum, the District Commissioner, NT stated as follows:

“ I am experiencing some difficulty over the procedure which is followed for sales by auction of village-type house lots. In two recent cases persons from outside a village have purchased land for which villagers had applied and have then become the object of criticism by the villagers as a whole who resented this intrusion into their community. Similar trouble has arisen in the past and indeed it has been my practice for some years to hold this type of auction sale in or near the village so as to discourage outsiders from competing at the auction. Naturally I cannot prevent an outsider from attending and bidding or indeed even outbidding his village competitors, but my staff have always been careful to see that such a competitor is in no doubt about the difficulties which he may encounter due to village opposition and prejudice.

2. In view of recent difficulties, I have been reconsidering the procedure now followed and I wish to seek your covering approval for a further means by which the general publicity for these sales can be minimized. I refer to the proposal which has been made to me on several occasions by the Registrar General that there is no need to gazette village-type house sales, particulars of which can be posted at the District Offices concerned and Rural Committee offices or other suitable places in the neighbourhood of the land offered for sale. I would propose to dispense with gazetting only in the case of sales of village-type house lots where the upset price does not exceed $5,000 for which you have already delegated to me the authority for approval.

3.     There is no doubt that villages which want development will have to put up with the intrusion of outsiders and indeed the present problem is one which really only arises in areas where the countryside is only just being opened up.  I can, however, see the individual villager’s point of view and without conceding the fundamental principle of dispensing with auction sales, I am anxious to minimize the difficulties for villagers in securing land in their own villages for their own domestic needs.”

95.In the second memorandum, the District Commissioner, NT stated as follows:

“ It must be appreciated first at all, that an established village nearly always means that it was started and enlarged by the male members of a family or a clan, all bearing the same surname. There are obvious reasons for this. Any trouble within the group is a family matter and as such can be arbitrated on by the senior members of the family. If, by some mischance, such a public auction of a small village house lot an outsider tentatively gains a right of access to this community there is an underlying fear that the harmony of the resident family or clan will be disturbed. In consequence there is very strong resistance to the entry of the outsider which normally starts when the builders move in to start site foundations. The builders are told that if they continue with the work then all sorts of dreadful things will happen. Being Chinese, this is generally sufficient to get them out of the village. As the house will never be built, the District Officer, under the terms of the sale has no option but in due course, to re-enter the lot. Should the purchaser of the lot invoke the law, again it is obvious that should he attempt to move into the house, on a personal persecution basis he would not remain there very long.

The New Territories Administration has been reluctantly forced to acknowledge these circumstances, and has compromised with the Heung Yee Kuk, the Villagers and the Government that to encourage village building for clan members that auctions should not be gazetted, vide (7) in BL 2/3220/60, but merely advertised at District Offices and in the local villages concerned.  As the circumstances of the village applicant are well known to the locals, they will not bid against him, bearing in mind that should they, in due course require a site for a house then they need only apply to the District Offices and a site will be put up for auction, albeit restricted.”

96.Again, it can be seen that restricted village auction was permitted not because the Government recognised or accepted that the New Territories indigenous inhabitants had any traditional right to build small houses in their villages, or acquire land to build small houses in their villages, whether at a concessionary premium or otherwise.  It was, instead, a device adopted by the District Officers to avoid practical difficulties arising from outsiders intruding into the community of a village.

97.On 11 October 1960, the Colonial Secretary gave formal approval of the proposal to dispense with gazette-notification of sales of village-type house lots where the upset price did not exceed $5,000 as proposed by the District Commissioner, NT in his first memorandum mentioned above.

98.Restricted village auction was common in the 1960s.  However, it was obviously an unsatisfactory practice, and was described in paragraph 6 of the 1972 ExCo Memo as a “major anomaly”.  In paragraph 7 of that Memo, it was proposed that restricted village auction be abolished and replaced by private treaty grant.

99.In respect of these 3 methods for the disposal of land in village areas in the New Territories, ie sale by public auction, private treaty and restricted village auction, although there was no express written rule which excluded female indigenous villagers or outsiders from acquiring land, in practice only male indigenous villagers could take part because the District Officer would generally not give his consent to the sale of any land which was objected to by the village elders, and usually the village elders would object to a sale of land to a female indigenous villager or an outsider, although there were exceptional cases where land was sold to female indigenous villagers who purchased the land to build houses for their infant sons, and also to non-indigenous men who (or whose fathers) had been living in the village in question before the Japanese War[59].

(vi)    Free Building Licence

100.Block Crown Leases were generally granted for a term of 75 years (from 1 July 1898) plus an option to extend for a further term of 24 years less 3 days.  They contained, inter alia, the following two covenants:

“… AND FURTHER that the Lessee or any other person or persons shall not, nor will, during the continuance of this demise … convert any ground hereby expressed to be demised as agricultural or garden ground into use for building purposes other than for the proper occupation of the same ground as agricultural or garden grounds without the previous Licence of His said Majesty, His Heirs, Successors or Assigns, signified in writing by the Governor of the said Colony of Hongkong, or other person duly authorized in that behalf …” (“the User Restriction Covenant”); and

“… AND FURTHER that the Lessee or any other person or persons shall not nor will at any time during the said term erect or construct any building or structure of any description on the said demised premises or any part thereof whether demised as agricultural or garden ground or otherwise without first having obtained the approval thereto of the Surveyor to His said Majesty, His Heirs, Successors or Assigns, or other person duly authorized by the Governor of the said Colony of Hongkong, in that behalf …” (“the Building Restriction Covenant, collectively “the Two Covenants”).

101.For many years prior to the decision of the Court of Appeal in AG v Melhado Investment Ltd [1983] HKLR 327, there were doubts or conflicting views on whether the permitted user under a Block Crown Lease was limited by the use of the land as described in the Schedule to the Block Crown Lease.  In that case, the Court of Appeal held that the use of the land referred to in the Schedule was not a restrictive user provision but merely descriptive of the actual historical use at the time of the original survey, and thus land which was described as “padi”, “waste”, “grave” and “dry cultivation” in the relevant Schedule to the Block Crown Lease could lawfully be used for the purpose of storage of steel girders without any breach of covenant.  This point should be borne in mind when one reads some of the historical documents mentioned below referring to the “conversion” of agricultural land into building land.

102.Due to the existence of the Two Covenants in the Block Crown Lease, any construction of a house on an Old Schedule lot would require the approval of, and the issue of a building licence by, the Government.  A villagers wishing to build a house on an Old Schedule lot therefore had, in the first instance, to apply to the District Office for approval.  The District Officer had the right to refuse to give his approval, and would do so if, for instance, construction of a house on the land in question would compromise a proposed future road or Government project.  If the District Officer considered that the application could proceed, the same public notice requirements as for the sale of Crown land by auction mentioned above would be followed, and discussion with the village elders would take place to ascertain whether there were any valid objections to the application on fung shui or other grounds.  If no objections were received, the District Officer would give his approval, which was spelt out in a building licence, stipulating the size and structural details of the building that could be constructed.

103.The Government’s policy of granting free building licences (ie at nil premium) to villagers to permit them to build village type houses on Old Schedule agricultural lots started in about 1906.  The justification for this policy can be found in a minute contained in CSO No 807/06 prepared by Mr Cecil Clementi (Member of Land Court appointed in 1903 who later became Governor of Hong Kong between 1925 and 1930) to the Colonial Secretary dated 11 January 1906:

“ The Chinese [law] as expressed in the Tai Tseng Lut Lai makes no distinction between agricultural & building lands. The chapter dealing with land is entitled ‘Fields & Tenements’, & all that is said on fields applies mutatis mutandis to buildings also. It was the duty of the officials to ascertain when land changed its class becoming extra more or less valuable & to increase or diminish the assessment accordingly. It was also the duty of the lessees to report to Government any change in the nature of their holding which would involve a reassessment of tax. This was the theory.

2     In practice the Sun On Magistrate had neither the time nor the staff, nor the inclination to ask the laborious enquiries & necessary to keep up with the shifting classification of land: and the people never went to a Chinese Yamen unless obliged and certainly never went to report that their taxes should be increased.  The result is that the villagers have as a rule built houses on their own padi fields and said nothing about it.  They certainly consider themselves entitled - & I think that they are entitled - to build houses on their padi land & they now recognize the necessity of reporting to me & getting my permission before building, so that their rent may be reassessed.  I have no trouble hitherto in such cases.”

104.There were views within the Government contrary to Mr Clementi’s view that the villagers were entitled, or had the right, to build houses on their “padi” land.  In particular, both the Crown Solicitor and Attorney General considered that the villagers had no such right, although the Governor had a discretion to grant a licence to permit “conversion” of agricultural land into building land. Apparently, their views were endorsed by the Colonial Secretary, and the Colonial Secretary’s view or advice was accepted by the Governor[60].

105.On 9 March 1906, the Governor announced, by Gazette Notice No 191/1906, that Assistant Land Officers were authorized until further notice to “grant licences for and on behalf of His said Majesty for the conversion of any ground in the New Territories expressed in the Crown Leases thereof to be demised as agricultural or garden ground into use for building purposes”.  By another Gazette Notice No 192/1906 also dated 9 March 1906, the Governor further authorized Assistant Land Officers to “approve buildings on land in the New Territories (exclusive of New Kowloon) held under lease from the Crown”.

106.An increased Crown rent was payable upon the issue of a free building licence permitting a villager to build a village type house on an Old Schedule agricultural lot.  On the other hand, conversion of a New Grant agricultural lot by way of building licence was originally subject to the payment of a premium[61].

107.The Government’s policy concerning conversion of agricultural land into building land in the New Territories to enable villagers to build village type houses varied considerably at different times after 1906.  There was also some confusion or uncertainty on whether non-villagers who came to own Old Schedule lots (eg by purchase) were entitled to benefit from the free building licence policy.  The Government lawyers were firm that the policy since 1906 was open to all owners of Old Schedule lots, because the Governor’s authorisation by Gazette Notices No 191 and 192/1906 did not restrict free conversion to villagers only. 

108.However, most of the District Officers acted contrary to the Government lawyers’ view and proceeded on the basis that the 1906 policy was intended to be a concession available only to the villagers and their successors in title by descent, and refused to allow conversion to outsiders (whether by way of a free building licence, or even if payment of a premium was offered).  The Government lawyers’ view was confirmed in CSO 4 in 1289/23[62], where it was stated that if the District Officer decided that conversion was to be allowed:

“[o]wnership of the land is not taken into account. That is to say, provided that the lot is a schedule lot it makes no difference whether the owner is a native of the N.T. or an European, and whether he is an original owner, owner by inheritance, or owner by purchase”.

Nevertheless, it appears that some District Officers continued to act in defiance of the ruling of the Colonial Secretary’s Office[63].

109.On 9 April 1957, the Governor in Council approved a standard policy on the terms of conversion put forward in the 1957 ExCo Memo, as follows:

“9. The terms of conversion that should now be imposed have been considered in some detail in consultation with the District Commissioner and the other officers concerned and it is recommended that the policy for those conversions should be as follows: -

(a) New Grant lots. No conversion unless building will be in accordance with general development policy in the area and with the current layout plan, if any. Where conversion in permitted

(i) consideration shall first be given to the advisability of requiring the applicant to surrender land equal or approximately equal in value to the increased value of the area to be converted;

(ii) if for any reason the applicant is permitted to pay for the increased value partly or wholly in cash, the premium to be paid shall be the full difference between the estimated agricultural and building value of the land, taking into account the value of any agricultural land surrendered under (i), but not land surrendered for streets, drains, etc;

(iii) in any areas where the need to encourage rapid development justifies it, the District Commissioner may be authorized to grant conversion on payment of a premium less than the full difference between the estimated agricultural and building value, provided that it is not less than (a) half such difference nor than (b) an equal share of the estimated cost of development works in the layout area divided equally by area between the lots benefited by such works.

(b) Old Schedule lots.

(i) A bona fide villager will in general be permitted, subject to planning and fung-shui considerations, to build a village-type house for his own occupation, and such permission (by building license) will be free of premium;

(ii) Any other conversion, as for New Grant lots, but without requiring applicant to surrender any land.

(iii) If the applicant so desires however, he may meet part or all of the charges for conversion by the surrender of agricultural land.

10.    It is not proposed to make a distinction in applying these conditions between applicants who have inherited Old Schedule lots and those who have purchased them.  While it would be theoretically correct to make such a distinction, it is not thought that it would be practicable and that if the advantages of the concessionary terms proposed for the owners of Old Schedule lots were restricted to those who had acquired then by inheritance the way would be open for other applicants to seek the same benefits by fraud or mis-representation…”

110.The distinction drawn between Old Schedule lots and New Grant lots was explained on the basis of a need to “honour … undertakings towards the country people”.  In a note prepared by the District Commissioner, New Territories which was enclosed with the 1957 ExCo Memo, it was stated in paragraph 2 thereof that:

“The distinction between (a) and (b) arises from 1(c) above [ie the need to honour our undertakings towards the country people]. We have said many times that the grantees of old schedule lots and their descendants are not required to pay premium for conversion of their agricultural land to build traditional village houses for their own occupation; and although in town layout areas this ‘right’ (which derives simply from the fact that the Chinese government, who provided no services, also charge no premia for grants of land, only a land tax; and did not exercise any control on buildings beyond charging increased land tax) has become modified, and in New Kowloon it has never been recognised at all, elsewhere it has been treated for so long as ‘entrenched’ that it would now be dangerous to deny it.”

111.In another Memorandum for Executive Council on “Village Houses in the New Territories”, XCR(67)62, dated 17 February 1967 (“the 1967 ExCo Memo”), it was stated in the first paragraph thereof that:

“Since the beginning of the lease of the New Territories there has been a tacit agreement that the villagers be allowed to build houses for their own occupation on their own agricultural land held under the Block Crown Lease, free of premium”.

112.In June 1960, in order to cope with village expansion, the policy of charging no premium for conversion was extended to pre-war New Grant lots.  There were some further changes to the details of the policy relating to the grant of free building licence, notably in 1967 in respect of the roofed-over area and the height of the house which could be erected. The free building licence policy (as modified from time to time) remained in force as at the date of the implementation of the Small House Policy in 1972.

113.It is not, I understand, to be in dispute that before the War and for several decades after the War, consent to applications by villagers for free building licences were, in practice, restricted by the District Officer to male villagers applying to build village houses for their own use or the use of their families within their own village area, where the applications were not objected to by the village communities[64].

114.It is also the agreed evidence of Mr Davison and Dr Hase that:

(1)     the District Officer had a “complete discretion” to reject an application for a free building licence, and there was no entitlement to a building licence[65]; and

(2)     “[a]t all times, the Government consistently stressed that there was no right to convert agricultural land to building land; villagers had the right to apply, but the District Officer had the right to reject applications for good reasons.  There was no automatic entitlement”[66].

(vii)   Private Treaty Grant and Exchange are not “traditional” (傳統)rights or interests of the New Territories indigenous inhabitants

115.As earlier mentioned, I am of the view that in order to qualify as a traditional right or interest of the New Territories indigenous inhabitants for the purpose of BL 40, it has to be shown that the right or interest in question is traceable to the rights or interests of the New Territories indigenous inhabitants before the commencement of the New Territories Lease in 1898.  It should be borne in mind that the word “traceable” does not appear in the Basic Law, and is used only for the purpose of elucidating the concept of “traditional” as used in BL 40. Subject to this caveat, I consider that a right or interest can, for the present purpose, properly be regarded as “traceable” if it captures or reproduces the essential feature(s) of a right or interest that was enjoyed by the New Territories indigenous inhabitants before the commencement of the New Territories Lease.

116.I consider that the Ding Rights in the form of Free Building Licence can properly be regarded as a traceable right in this sense.  It would appear from the evidence before the court that this form of land grant by the Government, which started in about 1906, was made on the understanding that prior to the New Territories Lease, the villagers in the New Territories were entitled to build houses on their land without having to seek the approval of, or make any payment to, the Imperial authorities or the Subsoil land-owner, although they would have to seek the consent of the village elders before building the houses.  While it is true that the details of the Free Building Licence granted by the Government have changed or evolved over time, and various restrictions in respect of, for example, the type and size of the house, location, and alienation of the house, were imposed by the Government, these matters do not, I consider, detract from, or change or affect, the original basis on which free conversion of agricultural land into building land was permitted by the Government.

117.The same cannot be said, however, of Private Treaty Grant.  Prior to the New Territories Lease in 1898, the villagers in the New Territories did not have any right as such to acquire land for the purpose of building houses, whether at a concessionary rent or land tax, or otherwise. It is clear on the evidence that the New Grants made by the Government to the villagers since about 1904, whether by public auction, private treaty, or closed village auction, were not in recognition of any right of the villagers to build houses in their villages, or based on any understanding that the villagers had any such right (see the discussion in paragraphs 81 to 99 above under the sub-heading “Land sale in village areas in the New Territories prior to 1972”).  The contrary view expressed by Dr Hase[67] is rejected.  Land was sold by the Government to the villagers to address their housing needs, but that would be nothing more than ordinary land administration by a government. 

118.On behalf of the Government, Mr Yu argues that:

(1)     “The early policies and practices were in turn traceable to customs and tradition in the NT before the NT Lease in 1898 whereby NTIIs [male indigenous inhabitants of the New Territories] were able (i) to erect a house on his own land leased by the Emperor without permission or paying premium, or (ii) to apply to his village community for land for that purpose”[68].

(2)     “The bundle of rights and interests of NTIIs before NT Lease that we need to trace back to, for the purpose of the ‘traditional’ element, are the rights and interests under the sub-soil and top-soil land tenure, which was the tradition and custom in the NT villages”[69].

(3)     “Traditionally, prior to 1898, NTIIs could build houses on their own land without any licence or permit.  Also, traditionally, NTIIs may apply to the village community (and it seems, also to the District Magistrate) for land to build their houses.  In those days, no distinction was drawn between ‘land’ and ‘building land’”[70].

(4)     “For NTIIs who had no land to build houses, in order to put them on the same footing as NTIs who did, the colonial administrators sold them building land within village environs at concessionary rates under successive systems of (a) public auctions from 1904, (b) PTG from around 1909 until around the Second World War, (c) restricted village auctions between Oct 1960 and 1971, and (d) finally PTG again from 1972 onwards”[71].

119.I am unable to accept the submission that Private Treaty Grant can be regarded as being traceable to the “right” of the New Territories indigenous inhabitants prior to 1898 to apply to their village communities (or elders) for land to build houses.  The sort of approval or consent given by the village communities (or elders) to build houses is fundamentally different in nature from a land grant made by the Government, whether pursuant to a public auction, private treaty or restricted village auction.  The village communities (or elders) would be acting in accordance with village custom or traditions to manage village affairs, whereas the Government would be disposing of Crown land by lease for a premium and annual rent while imposing various restrictions on the holding and use of the land by covenants.  Moreover, there is no support for the proposition that the Government made such land grant to the New Territories indigenous inhabitants in recognition of, or on the understanding, that they previously had a right to apply to the village communities (or elders) for land for the purpose of building houses.  In so far as it is suggested that the New Territories indigenous inhabitants could apply to the District Magistrate for land to build houses, that can hardly be described as a “right”, or any “right” of the male indigenous inhabitants of the New Territories.  The evidence before the court suggests that anyone who had the means could “apply” to the Imperial authorities for land, whether that person was a male or female[72], and whether he/she was a villager or an “outsider”[73]. In any event, the application would be for land simpliciter, it being common ground that under the Qing Code, no permission to build houses on privately-owned land was required to be obtained from the Imperial authorities[74].

120.Mr Yu further argues that “the concessionary price at which the lands were sold is key: it showed that the aim was to put NTIIs without land on the same footing as NTIIs who did so that the former group could build houses for their own occupation without having to pay any premium”[75]. The basis of this argument is, apparently, the following statement in the paragraph 8(c) of the 1972 ExCo Memorandum:

“The land is to be sold at 2/3 full market value. This is the level at which the upset price is set for village auctions, and is consistent with the concession of free building license allowed for such buildings on private agricultural land.”

121.In my view, while the premium set at two-third of the full market rate might, in 1972, have been at a level “consistent” with the value of the Free Building Licence granted to the villagers to build a small house on his own agricultural land, there is no support for the view that the concessionary rate at which land was sold to the villagers in the early days since 1904, whether by way of public auction, private treaty grant or restricted village auction, had any relation to the Government’s practice or policy of granting free building licence to the villagers for conversion of agricultural lots into building lots.  Also, the premium at two-third of the full market rate was “tied”[76] to the level at which the upset price was set for (restricted) village auctions (which were in use between the late 1950s and 1972), instead of the value of the Free Building Licence.  In any event, there is no evidence to show that any concession of the premium that was given, whether before or after 1972, was made in recognition, or on the understanding, that the villagers had, prior to 1898, the right to acquire land to build houses, whether at a concessionary rent/land tax or otherwise.

122.That there is a distinction to be drawn between Free Building Licence and Private Treaty Grant for the purpose of the present discussion is also supported by my reading of a report titled “The New Territories Small House Policy” (“the Report”) prepared by Mr Lam Ding Kwok Joseph (Chief Land Executive) of the New Territories Administration dated February 1980.  In Chapter 1 of that report, under the heading “the Background of the Small House Policy”, it is stated, in relation to Free Building Licence, as follows:

“ Since the beginning of the lease of the New Territories the custom of the villagers to build houses in their village for their own occupation and on their own agricultural land held under the Block Crown Lease issued in 1905, free of premium, has been recognised. This tradition was officially endorsed by the Executive Council in October, 1959. On approval of the Council in June 1960, the concession of a conversion at nil premium was extended to cover also the pre-war New Grant Lots …” [emphasis added]

123.However, when it comes to Private Treaty Grant, the Report states:

“ While the background of village houses on Old Schedule/pre-war New Grant agricultural lots by way of free conversions, i.e. free building licences or Surrender/regrant at nil premium has been examined as above, in order to provide a full picture of the background to the present New Territories Small House Policy, at this stage it is necessary to trace the history of another form of permission to allow the building of village houses in the New Territories. This originally took the form of a Village Auction (sometimes known as a closed village auction or restricted village auction) of sites on Crown Land until December, 1972, when it was replaced by a system of private treaty grants.

The private treaty grant of leases of up to 1,000 square feet of land for building village houses in the rural areas of the New Territories was approved by the Secretary of State as early as 1909.  However, this authority was not generally used after the war and up to 1972 when the Small House Policy was introduced.  Instead Crown land suitable for village house development was disposed of by a system of village auction…”

124.Significantly, unlike the discussion in respect of Free Building Licence, it is not suggested in the Report that the system of Private Treaty Grant was based on, or related to, any recognition of any right of the New Territories indigenous villagers to build houses in their villages at the time of the New Territories Lease.

125.On behalf of the Kuk, Lord Pannick argues that “the right to claim new land for building was preserved by a combination of policies, including public auctions at a concessionary rate, Restricted Village Auctions, and Private Treaty Grants”[77], and “[t]he pre-1898 custom of acquiring unoccupied land for building houses was equally protected by the British administration”[78] by the above means.  I am unable to accept this submission, for the following reasons:

(1)     While it might have been the former practice of the Subsoil land-owner to claim neighbouring land which he had strictly no right to occupy and for which he paid no land tax to the Imperial authorities, any such right was plainly abolished by Section 15 of the New Territories (Land Court) Ordinance (No 18 of 1900), which treated all land in the New Territories as belonging to the Crown and all persons in occupation of such land as trespassers as against the Crown unless such occupation was authorized by a grant from the Crown, or other title allowed by the Land Court, or by licence from the Governor or Government official, or unless a claim for the land was pending before the Land Court.

(2)     In most cases, the Subsoil land-owner would have leased the additional land claimed by him to the Topsoil land-owner, and would no longer have any right to build houses on the land.

(3)     There is nothing in the evidence to show that the Government sold land to the villagers (whether by way of public auction, private treaty, or restricted village auction) because of any recognition that the villagers previously had the right to claim neighbouring, unoccupied, land whether for the purpose of building houses or otherwise.

126.It has not seriously been suggested by the Government or the Kuk that the third form of Small House Grants, ie Exchange, is, or is traceable to, any traditional right or interest of the New Territories indigenous inhabitants.  In my view, it is not.

127.In all, I consider that the Ding Rights in the form of Private Treaty Grant or Exchange are not “traditional” rights or interests of the New Territories indigenous inhabitants within the meaning of BL 40, and therefore are not protected by that article.

 XI.     THE “LAWFUL” (合法) ELEMENT IN BL 40

128.I can deal with the “lawful” (合法) element in BL 40 more briefly.  The purpose of BL 40 is, as I see it, to protect or preserve those rights and interests of the New Territories indigenous inhabitants which can properly be regarded as their “traditional” rights and interests after 1 July 1997.  It was clear to everyone concerned at the time of the drafting of the Basic Law that some such rights or interests might be open to objection on the ground that they were discriminatory in nature.  It would thus not be consistent with the purpose of BL 40 to allow such rights or interests to be challenged on the ground of discrimination, or other grounds of unlawfulness.

129.I do not accept the submissions of Mr Martin Lee, SC (for the Applicants) that “lawful” in BL 40 means lawful according to both Qing Law before the New Territories Lease of 1898 and the domestic laws of Hong Kong in 1997.  In particular, I do not consider that the drafters or makers of the Basic Law, which was prepared in the late 1980s and promulgated in early 1990, would be concerned with the state of lawfulness, or legality, of the traditional rights and interests of the New Territories indigenous inhabitants under Qing Law prior to 1898.  I believe that Lord Pannick is correct in his submission that “lawful” in the present context is merely descriptive of those traditional rights and interests which were enjoyed by the New Territories indigenous inhabitants, but I respectfully disagree with him as regards the timeframe that such rights or interests had to be enjoyed by the New Territories indigenous inhabitants in order for them to come within the scope of BL 40.

130.In all, I am of the view that the Ding Rights in the form of Free Building Licence is a lawful traditional right and interest of the New Territories indigenous inhabitants within the meaning of BL 40, but not Private Treaty Grant or Exchange.

 XII.     BL 122

131.BL 122 states as follows:

Chinese text: 原舊批約地段、鄉村屋地、丁屋地和類似的農村土地,如該土地在一九八四年六月三十日的承租人,或在該日以後批出的丁屋地承租人,其父系為一八九八年在香港的原有鄉村居民,只要該土地的承租人仍為該人或其合法父系繼承人,原定租金維持不變。

English translation: In the case of old schedule lots, village lots, small houses and similar rural holdings, where the property was on 30 June 1984 held by, or, in the case of small houses granted after that date, where the property is granted to, a lessee descended through the male line from a person who was in 1898 a resident of an established village in Hong Kong, the previous rent shall remain unchanged so long as the property is held by that lessee or by one of his lawful successors in the male line.

132.The meaning and effect of this article, in so far as Small House Grants are concerned, is as follows: the previous rent (ie the rent fixed prior to 1 July 1997) shall remain unchanged in two situations:

(1)     where the Small House Grant was made on or before 30 June 1984, if the property was on 30 June 1984 held by a lessee descended through the male line from a person who was in 1898 a resident of an established village in Hong Kong; or

(2)     where the Small House Grant was made after 30 June 1984, if the property was granted to a lessee descended through the male line from a person who was in 1898 a resident of an established village in Hong Kong,

so long as the property is held by that lessee or by one of his lawful successors in the male line.

133.The date of 30 June 1984 referred to in this article was fixed by paragraph 2 of Annex III (Land Leases) to the Joint Declaration.

134.There is, I consider, a distinction between the lawfulness of the Small House Policy, and the lawfulness of Small House Grants made under the policy.  The fact that the Small House Policy, or a part of it, is unlawful, does not mean that a Small House Grant made under that policy is also unlawful.  The Small House Grant so made remains a valid land grant, unless there is some basis to set it aside and it has been set aside by the court.  At the moment, I do not see any valid basis to set aside a Small House Grant merely because the Small House Policy, or a party of it, is unlawful. Since I have not received any submissions from the parties on this issue, I should not be taken to have expressed a final view on this point.  On the basis of my current understanding of the matter, I do not see that BL 122 would be inconsistent, or stand as any obstacle, to the court’s finding that the Ding Rights in the form of Private Treaty Grant or Exchange are not “lawful traditional rights and interests” of the New Territories indigenous inhabitants within the meaning of BL 40.

 XIII.     BL 7

135.Having come to the above conclusions, it becomes unnecessary for me to consider the Applicants’ challenge based on BL 7. In particular, in so far as Free Building Licence is concerned, if it is protected by BL 40, I do not consider that it can be challenged on the ground of inconsistency with BL 7.

 XIV.     STANDING AND DELAY

136.Both Mr Yu and Lord Pannick argue that relief should be refused, and the application for judicial review should be dismissed, because (i) the Applicants lack standing, and (ii) the Applicants have delayed in making the application.

137.In so far as standing is concerned, I consider that the Applicants have sufficient standing to challenge the Small House Policy, because they are discriminated against by the application of the policy based on their social origin or birth.

138.In so far as delay is concerned, there is no doubt that the Applicants have been guilty of serious delay in making the application: in the case of Mr Kwok the delay is more than 18 years after the coming into force of the Basic Law, and in the case of Mr Lui the delay is more than 21 years.  Neither has offered any, or any reasonable, explanation for the delay.

139.In view of the fact that leave to apply for judicial review has been granted to Mr Kwok by Au J (as he then was), the focus of the consideration is not whether good reasons can be shown to justify an extension of time to apply for leave to apply for judicial review, but whether relief ought to be refused by reason of hardship, prejudice or detriment to good administration as a result of the delay[79].

140.Lord Pannick argues that by reason of the Applicants’ delay, prejudice or hardship would be caused to the New Territories indigenous inhabitants were the court to grant relief in this application.  He points to the fact that many Small House Grants would have been made to them since 1 July 1997, and many persons eligible under the Small House Policy and their families would have ordered and conducted their affairs on the basis of the policy[80].

141.On the other hand, I have been referred to the following statement of Ma CJHC (as he then was, and with whom the other members of the Court of Appeal agreed) in Leung v Secretary for Justice [2006] 4 HKLRD 211, at paragraph 39, which I believe should guide the court’s exercise of discretion on the issue of delay:

“In spite of this, there are, however, in my view, compelling grounds for the court to allow the present judicial review proceedings to proceed (in other words for the court to extend the period within which the application can be made): ‑

(1) When the constitutionality or legality of a statute is involved, providing that the point is an arguable one and the applicant has a sufficient interest, the time factor, while it is relevant, is nevertheless perhaps not as compelling a consideration as in other situations.

(2) There are two reasons for this. First, if a statute or statutory provision is indeed unconstitutional, the court should take the first available opportunity to grant the appropriate relief (providing of course an applicant has sufficient standing) and be hesitant in taking too strict an approach on time. It is important to bear in mind that where the constitutionality of a statute is being questioned on the basis that fundamental human rights have been breached, the public interest is very much engaged. Secondly, the time factor is not of great significance when one considers that the constitutional challenge to the legislation under scrutiny may be brought at any time whether now or in the future by someone who has or will turn 16 or who may in the future be prosecuted for one of the relevant offences.

(3) The subject matter of the present judicial review proceedings is one of considerable public interest and importance, as I have already remarked. As Hartmann J put it in his judgment at paragraph 88: ‑

‘88. What must be remembered is that, even if there is a lack of promptness, the court possesses a discretion to condone it. In exercising that discretion, one of the matters to be taken into account will be the general importance of the matter raised. If the matter, as in the present case, goes to the fundamental human rights of a class of persons, that, it seems to me, in the interests of public policy, must be material: see, for example, R. v. North West Leicestershire District Council, ex parte Moses [2000] ENV LR 443, at 452.’

(4)     The Respondent does not point to any particular prejudice whether to good administration or otherwise caused by the delay on the part of the Applicant.  Indeed there is none.”

142.I note that in the Leung case, the Chief Judge referred, at the beginning of paragraph 39, to the question of whether the judicial review proceedings should be allowed to proceed notwithstanding the delay (in other words whether the court should extend the period within which the application can be made), whereas in the present case the focus of the court’s consideration is whether relief should be refused. Nevertheless, I consider the factors mentioned by the Chief Judge to be equally relevant to the present inquiry.

143.I also note that there are some differences between the Leung case and the present one, including:

(1)     the Leung case concerns the constitutionality or legality of a statute, whereas the present case concerns a Government policy;

(2)     in the Leung case there was no prejudice whether to good administration or otherwise caused by the delay, whereas in the present case hardship and prejudice may be caused to those New Territories indigenous inhabitants, particularly those who have received Small House Grants;

(3)     in the Leung case the delay was about 4 years, whereas the delay here is much longer (18-20 years); and

(4)     in the Leung case the applicant said that he felt the desire for sex when he reached the age of 16 in 2000, but neither of the Applicants here suggests that he has any intention to apply for a Small House Grant.

144.In my view, the potential hardship or prejudice to the New Territories indigenous inhabitants can, to a large extent, be addressed by making it clear, as I believe to be the correct legal position, that any relief which may be granted will not invalidate or affect any Small House Grants made prior to the date of the judgment, or the date on which this judgment shall take effect (see paragraph 148 below).  I do not consider that relief ought to be refused on the ground of delay having regard to the elements of public interest, the issue of fundamental human rights, and the fact that a further challenge to the Small House Policy can be brought at any time by any person who acts promptly (eg a person who just turns 18).

  XV.     DISPOSITION

145.I grant leave to the Applicants to re-amend the Form 86 in the form of the draft received by the court on 27 December 2018 which, inter alia, (i) omits the Chief Executive in Council as a respondent, and (ii) narrows down the scope of the judicial review, with costs of the amendments to the Government and the Kuk.

146.I dismiss Mr Kwok Cheuk Kin’s summons dated 14 November 2018 seeking leave to file and serve his 7th Affirmation made on 13 September 2018 (which has been admitted on a de bene esse basis), because I do not consider the matters stated in that affirmation to be of sufficient relevance to the issues in this application for judicial review as would justify the admission of late evidence, with costs to the Government and the Kuk, including the costs of the hearing on 21 November 2018 (with certificate for 2 counsel in the case of the Kuk) and the Government’s costs in respect of the 3rd Affirmation of Lo Kam Lun Alan in reply filed on 29 November 2018 (which has also been admitted on a de bene esse basis).

147.I allow the present application for judicial review in so far as it relates to Private Treaty Grant and Exchange, being two of the three forms of land grant under the Small House Policy.  The parties are agreed that the court should receive further submissions on the precise form of the relief to be granted in the event that the application for judicial review is successful.  I direct the parties to file and exchange written submissions, limited to 5 pages each, within 21 days of the date of this judgment on the form of relief and on the issue of costs.

148.In view of the importance of this matter to the New Territories indigenous inhabitants and the general public of Hong Kong, the implications that this judgment may have on Government land administration, and the likelihood of an appeal to the Court of Appeal and eventually to the Court of Final Appeal, I direct that this judgment shall not take effect until after the expiration of 6 months from the date hereof, with liberty to the Government and the Kuk to apply for a longer stay pending any possible appeal of this judgment to the Court of Appeal.

149.Lastly, it remains for me to thank all counsel for their assistance rendered to the court in this difficult case.

  (Anderson Chow)
  Judge of the Court of First Instance
  High Court

Mr Martin Lee, SC, Mr Jeffrey Tam and Ms Isabel Tam, instructed by M/s Ho, Tse, Wai & Partners, for the 1st and 2nd Applicants

Mr Benjamin Yu, SC, Mr Mok Yeuk-chi and Mr Anthony Chan, instructed by Department of Justice, for the 1st to 3rd Respondents

Lord Pannick, QC, Mr Jat Sew-tong, SC, Mr Jin Pao, SC and Mr Danny Tang, instructed by M/s T.K. Tsui & Co., for the Interested Party


[1] See paragraphs 57 and 58 of the 2nd Affirmation of Chow Man Yee, Assistant Director (Estate Management) of the Lands Department.

[2] Eligibility Criteria, paragraph (C).

[3] Definitions, paragraph (I)(B)(a).

[4] Definitions, paragraph (I)(B)(b).

[5] Definitions, paragraph (I)(B)(c).

[6] Explanatory Notes, paragraph (II)(c).

[7] Explanatory Notes, paragraph (II)(h).

[8] Introduction, paragraph (I)(A)(a).

[9] Explanatory Notes, paragraph (II)(a).

[10] Explanatory Notes, paragraph (II)(e).

[11] Explanatory Notes, paragraph (II)(g).

[12] Important Points to Note, paragraph (III)(b).

[13] See paragraph 88 of the 2nd Affirmation of Chow Man Yee.

[14] See paragraph 58 of the 2nd Affirmation of Chow Man Yee.

[15] See paragraphs 61 and 62 of the 2nd Affirmation of Chow Man Yee.

[16] This ExCo Memo related to an aspect of Free Building Licence which will be further considered below.

[17] (2016) 19 HKCFAR 372.

[18] See QT v Director of Immigration, FACV 1/2018 (4 July 2018), at paragraph 84.

[19] See Ng Ka Ling v Director of Immigration (1999) 2 HKCFAR 4, at paragraph 74; Cheng Kar Shun v Li Fung Ying [2011] 2 HKLRD 555, at paragraph 162 per Andrew Cheung J (as he then was).

[20] See Chong Fung Yuen, at 224E-G; Ng Ka Ling, at 28D-I.

[21] See paragraph 19.5 of the Skeleton Submissions for the Government dated 21 November 2018, referring to Re BC Motor Vehicle Act [1985] 2 SCR 686, at 504e-509h per Lamer J (as he then was).

[22] See Chief Executive of HKSAR v President of the Legislative Council [2017] 1 HKLRD 460, at paragraph 51 per Cheung CJHC (as he then was); Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950, at paragraph 163 per Bokhary PJ.

[23] See HKSAR v Ma Wai Kwan David [1997] HKLRD 761, at 323G-H per Chan CJHC (as he then was) and at 361E-G per Mortimer VP; SJ v Lau Kwok Fai (2005) 8 HKCFAR 304, at paragraph 35 per Sir Anthony Mason NPJ; Catholic Diocese of Hong Kong v Secretary for Justice [2007] 4 HKLRD 483, at paragraph 119 per Andrew Chung J (as he then was).

[24] See R (on the application of Edison First Power Ltd) v Central Valuation Officer [2003] 4 All ER 209, at paragraph 116 per Lord Millet; see also T v Commissioner of Police (2014) 17 HKCFAR 593, at paragraph 281 per Lord Neuberger.

[25] See Endell Thomas v AG of Trinidad and Tobago [1982] AC 113, at 135E-F per Lord Diplock.

[26] See paragraph 22 of the Skeleton Submissions for the Government.

[27] See paragraph 25 of the Skeleton Submissions for the Government.

[28] See paragraph 23.1 of the Skeleton Submissions for the Government.

[29] See paragraph 25 of the Skeleton Submissions for the Government.

[30] See paragraph 29 of the Skeleton Argument for the Kuk dated 21 November 2018.

[31] See paragraph 16(2) of the Skeleton Argument for the Kuk.

[32] See paragraph 26 of the Applicants’ Reply Submissions dated 26 November 2018.

[33] See paragraphs 63 to 66 of the Applicants’ Reply Submissions.

[34] At page 285A-C of the law report.

[35] See, for example, (i) the minutes of the 2nd meeting of the Special Group held on 22 April 1986, at paragraph 4; (ii) the “Background” section of the Seminar Report mentioned in paragraph 51 below, at paragraph 2; (iii) the note to article 17 of the discussion draft of the Basic Law considered at the Third Plenary Session of the Basic Law Drafting Committee on 29 November 1986; (iv) the Special Group’s Final Report on the Rights and Interests of Indigenous New Territories Inhabitants passed on 14 March 1987, at paragraph 3.2.3; and (v) the Public Consultation Report, Vol 5, dated October 1988 prepared by the Basic Law Consultative Committee, at paragraph 1.

[36] See, for example, the Public Consultation Report, Vol 4, dated October 1988 prepared by the Basic Law Consultative Committee, at paragraph 6.1.

[37] [1999] 3 HKLRD 267, at 285D-I.

[38] See paragraphs 61 and 136 of the Skeleton Submissions for the Government.

[39] See paragraph 3.7 of the Compilation.

[40] Paragraph 2 of Annex III provides: “In the case of old schedule lots, village lots, small houses and similar rural holdings, where the property was on 30 June 1984 held by, or, in the case of small houses granted after that date, the property is granted to, a person descended through the male line from a person who was in 1898 a resident of an established village in Hong Kong, the rent shall remain unchanged so long as the property is held by that person or by one of his lawful successors in the male line”.

[41] See paragraph 6 of the Joint Expert Report of Professor Cheung and Dr Hase.

[42] See paragraph 48 of the Skeleton Argument for the Kuk.

[43] See paragraph 32 of the Joint Expert Report of Professor Cheung and Dr Hase dated 16 November 2018.

[44] See paragraph 30 of the Joint Expert Report of Professor Cheung and Dr Hase.

[45] See paragraph 22 of the Joint Expert Report of Professor Cheung and Dr Hase.

[46] See the “Memorandum on Land” prepared by Mr Messer and Mr Tsui attached as Appendix No III to the Report on the New Territory during the First Year of British Administration prepared by Mr Stewart Lockhart, Colonial Secretary and laid before the Legislative Council by Governor Henry Blake on 19 February 1990, and a document titled “Some Notes on Land Tenure in the New Territory: General Theory of Chinese Tenure” prepared by Mr Gompertz, Member of Land Court attached as Appendix No 1 to Mr Lockhart’s Report on the New Territory for the Year 1990.

[47] See paragraph 42 of Professor Cheung’s second report dated 19 September 2018.

[48] See Winfat Enterprises (HK) Co Ltd v Attorney General [1984] HKLR 32, at 43-44 per Roberts CJ giving the judgment of the Court of Appeal.

[49] See paragraph 3 of CSO 4865/1906 contained in the “Notes for Use in the District Land Offices NT 1906 (1908)”.

[50] See paragraph 4 of the Joint Expert Report of Mr Davison and Dr Hase.

[51] See paragraph 4(i) of the Joint Expert Report of Mr Davison and Dr Hase.

[52] See paragraph 61 of Dr Hase’s first report.

[53] At $10 per lot (see paragraph 63 of Dr Hase’s first report).

[54] See paragraph 64 of Dr Hase’s first report.

[55] See page 20 of Mr Davison’s second report.

[56] See the Joint Expert Report of Mr Davison and Dr Hase, at paragraph 22.

[57] See the Joint Expert Report of Mr Davison and Dr Hase, at paragraph 21.

[58] See the District Commissioner, NT’s confidential memo to the Colonial Secretary titled “Small House in the New Territories” dated 18 September 1971, at paragraph 21.

[59] See paragraph 22 of the Joint Expert Report of Mr Davison and Dr Hase.

[60] See various minutes from the Crown Solicitor, Attorney General and Colonial Secretary dated 16 and 17 January 1906 in CSO No 807/06.

[61] See paragraphs 43 and 46(c) of the 2nd Affirmation of Chow Man Yee.

[62] Reproduced in the Supplemental Notes to Jacks Digest prepared in 1939.  Those notes were supplementary to the Digest of Instructions from the Secretary of State for the Colonies (with local rulings) regarding Disposal and Tenure of Land in the Colony of Hong Kong compiled by Philip Jacks in 1930.  Mr Philip Jacks was the Land Officer between 1905 and 1935.

[63] See paragraph 76 of Dr Hase’s first report.

[64] See paragraphs 8 to 10 of the Joint Expert Report of Mr Davison and Dr Hase.

[65] See paragraph 11 of the Joint Expert Report of Mr Davison and Dr Hase.

[66] See paragraph 12 of the Joint Expert Report of Mr Davison and Dr Hase.

[67] See, for example, paragraph 89 of Dr Hase’s first report.

[68]See paragraph 5 of the Outline of the Government’s Submissions dated 26 November 2018.

[69] See paragraph 18 of the Outline of the Government’s Submissions.

[70] See paragraph 19 of the Outline of the Government’s Submissions.

[71] See paragraph 21.25 of the Outline of the Government’s Submissions.

[72] See paragraphs 20 to 22 of the Joint Expert Report of Professor Cheung and Dr Hase.

[73] See paragraph 23 of the Joint Expert Report of Professor Cheung and Dr Hase.

[74] See paragraph 33 of the Joint Expert Report of Professor Cheung and Dr Hase.

[75] See paragraph 131 of the Skeleton Submissions for the Government.

[76] See footnote 1 on page 6 of a report titled “The New Territories Small House Policy” prepared by Mr Lam Ding Kwok Joseph (Chief Land Executive) of the New Territories Administration dated February 1980.

[77] See paragraph 57 of the Skeleton Argument for the Kuk.

[78] See paragraph 68 of the Skeleton Argument for the Kuk.

[79]See BH v Director of Immigration, HCAL 105/2014 (14 April 2015), at paragraphs 88 to 96; and on appeal BI v Director of Immigration, CACV 9, 103, and 134/2015 (8 March 2016), at paragraph 135.

[80] See the Kuk’s Skeleton Argument, at paragraph 103(1) to (4).