Memorial Park Hong Kong Ltd v. Secretary for Justice

CACV 436/2018

[2021] HKCA 262

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 436 OF 2018

(ON APPEAL FROM HCMP NO 2609 OF 2010)

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BETWEEN

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Before:  Hon Lam VP, Barma and Au JJA in Court

Date of Hearing:  12 September 2019

Date of Judgment:  9 March 2021

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J U D G M E N T

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Hon Lam VP:

1.Presently, Au JA will give judgment for effectively dismissing the appeal.  I respectfully agree with the same.

2.There was a request by the plaintiff’s solicitors on 27 August 2019 asking for leave to issue a summons seeking a stay of the appeal.  The request was rejected by the court on 3 September 2019 after considering the materials put before us.  The following are our reasons for rejecting the request.

3.The proceedings were commenced in 2010 by the plaintiff by Originating Summons.  By an order of Sakhrani J of 24 June 2011, the proceedings continued as if they were begun by writ.  Pleadings were filed and closed with the filing of Reply and Defence to Counterclaim on 4 November 2011.  The case took a long time to come to trial which took place on 15 August 2018.  Deputy High Court Judge Marlene Ng (as M Ng J then was) (“the Judge”) handed down judgment on 30 August 2018 dismissing the plaintiff’s claim and granting relief on the Defendant’s counterclaim (“the Judgment”).

4.The plaintiff served and filed a Notice of Appeal on 4 September 2018.  Notice of setting down of the appeal was filed on 28 September 2018.

5.On 29 October 2018, by consent the Judge granted a stay of execution of the Judgment pending the final determination of the appeal.

6.Solicitors for the plaintiff filed an application to fix a date for the hearing of the appeal on 30 April 2019.  In accordance with paragraph 54 of Practice Direction 4.1, the parties also filed a joint checklist on 30 April 2019. In the checklist, amongst other things, it was confirmed by both parties that all necessary interlocutory applications had been taken out and there were no outstanding matters.

7.The Registrar of Civil Appeals (“the RCA”) gave directions on 7 May 2019 for a date to be fixed for hearing of the appeal.  Those directions included directions for the lodging and service of skeleton arguments and list of authorities in accordance with Section G of Practice Direction 4.1.  One of the directions was that upon lodging skeleton argument by the plaintiff, no further application may be made without leave of a presiding judge hearing the appeal.

8.The parties’ representatives attended the court for fixing a date of hearing.  The appeal was scheduled to be heard on 11 July 2019.  By a joint letter of 23 May 2019, they requested to re-fix the hearing date due to non-availability of counsel.  The court re-fixed the hearing date to 12 September 2019 and the parties were notified by a letter of 28 May 2019.

9.The deadline for lodging skeleton arguments by the plaintiff was 15 August 2019.  By a letter dated 14 August 2019, received by the court on 15 August 2019, solicitors for the plaintiff requested for an extension of seven days to lodge skeleton argument due to “difficulties engaging counsel who are available”.

10.It is difficult to understand the purported justification for more time.  Solicitors for the plaintiff knew in late May 2019 that the appeal would be heard on 12 September 2019.  They should have retained counsel to conduct the appeal in June 2019.  The counsel so instructed should have been aware of the time limit for lodging skeleton submissions and should have arranged for sufficient time to comply with such time limit in the preparation of skeleton submissions.  If there were delay in the instruction of counsel (whether due to the fault of the solicitor or that of the plaintiff), the plaintiff would have to bear the consequence.  A possible sanction, and it is a sanction that the court has imposed in some cases after unless orders were made, is that the defaulting party shall be deemed to have waived his right to advance submissions and the appeal shall be processed on the papers based on the materials before the court.

11.Be that as it may, on this occasion, Au JA granted the extension.

12.Counsel for the plaintiff lodged skeleton arguments on 22 August 2019.  In the skeleton arguments, counsel advanced submissions on the plaintiff’s summons for a “case management stay” of 21 August 2019 and submissions on the appeal.

13.As a matter of fact, the plaintiff had not issued any summons on 21 August 2019.  In the absence of a proper application for stay placed before the court, a party and his lawyers should not assume that such application can be slipped in by way of references to the same in skeleton arguments.

14.By reason of the direction of the RCA, the plaintiff could not issue a summons without leave of a judge hearing the appeal.

15.Nothing was done on behalf of the plaintiff to put forward a proper application for stay until a week afterwards.  Solicitors for the plaintiff wrote to the court on 27 August 2019 seeking leave for filing of a summons asking for stay and an affirmation in support of the same.

16.Though a copy of the letter was sent to the Department of Justice, the draft summons and affirmation were not.  Government Counsel wrote to court to complain about the same and Au JA had to give directions on 28 August 2019 requiring this to be done.

17.As observed by Au JA in those directions, it is unacceptable that solicitors for the plaintiff did not observe basic litigation etiquette to furnish to the other party copies of all materials they sent to the court.

18.There is no reason why the time and energy of the Government Counsel and Au JA (in terms of attending to the matter and writing letters and giving directions) have to be spent on enforcing such elementary duty which all litigation solicitor should comply with.  It is a clear breach of the duty of the solicitor to the court under Order 1A, rule 3 of the Rules of the High Court: instead of assisting the court to further the underlying objectives of the rules, the non-observance of the proper etiquette increased the costs of proceedings and occasioned wastage of judicial resources.  It also delayed the processing of the request of 27 August 2019.

19.Solicitors for the plaintiff complied with the direction of Au JA on 28 August 2019.

20.The Secretary for Justice did not make further submissions on the request.  She was content with the submissions in the letter of 28 August 2019 that the request should be refused due to its lateness and the lack of explanation for such late application.  It was also indicated that she might need to file evidence in reply to respond to the intended summons.

21.In line with the effective case management ethos under the Civil Justice Reform, the hearing date of an appeal is a milestone date.  Once a hearing date is fixed, the Court expects all parties and their lawyers to take proper steps to ensure that the appeal will be effectively heard on such a date.  Preparation for hearing should not be left to the last few weeks before the hearing.

22.The revision of Practice Direction 4.1 in December 2016 is to enhance good case management in civil appeals.  One of the measures is the more proactive role played by the RCA.  Before direction for fixing of hearing date of an appeal is given, the RCA will have regard to the Joint Checklist lodged by the parties pursuant to paragraph 54 in assessing if the appeal is ready to be heard.  Thus, solicitors should exercise due diligence in providing accurate information in the checklist.  In particular, if there are outstanding matters or interlocutory applications which should be attended to, solicitors should state the same in the checklist.  Unforeseen circumstances aside, the court will hold a party to the statement in the checklist and in most cases will not entertain any further interlocutory application (particularly if it has the effect of disrupting the hearing of the appeal) if it is not mentioned in the checklist.

23.The position remains the same even if a party changes solicitor or counsel after the hearing date has been fixed.  A party should give thorough consideration on the preparation of the appeal before the application to fix a date for hearing. Whilst occasionally a change of solicitor or counsel may be required, normally that would not be a good reason for disregarding the position taken in the checklist.

24.In the present appeal, the intended stay application was based on the plaintiff’s application for licences under the Private Columbaria Ordinance (Cap 630).  The application was made on 2 January 2018 and the Licensing Board has yet to make a decision on the application.  It seems that the plaintiff has not submitted all the necessary documents and has sought an extension up to 2 October 2019 to do so.  It is said that the grant of an exemption or a temporary suspension of liability could exempt the plaintiff from liability arising out of the operation of a columbarium.  An application for waiver of alleged breach of GC 15 of GN 364 was made on behalf of the plaintiff on 22 October 2018 on a without admission basis.  The plaintiff said in the event the waiver is granted, the present appeal would become entirely academic.

25.These are all matters within the knowledge of the plaintiff since 2018.  If the plaintiff wished all along to withhold the appeal pending its licence applications, it is puzzling that its solicitor took out the application to fix a date for the hearing of the appeal on 30 April 2019.  Further, it is also puzzling that its solicitor did not refer to this intention in the Joint Checklist.

26.After the hearing date of the appeal was fixed, there was ample time before the filing of the skeleton arguments for the plaintiff to take out the stay application if it so wished.  Yet the plaintiff did not do so.

27.The request was actually made at a very late stage when counsel have already been engaged to argue the appeal.  Substantial legal costs had been incurred.  There is not a word of explanation by the plaintiff on the lateness of the application.

28.As has been said in other cases, this court deplores late disruptive manoeuvre by a party in the run-up to the hearing of an appeal when lawyers for the other side as well as the court should be devoting their attention to the preparation of the appeal.

29.If we were to entertain the stay application, it would inevitably disrupt the hearing of the appeal and lawyers acting for the Secretary for Justice would have to prepare evidence and arguments to resist the stay application.

30.In any event, we do not see any merit in the intended stay application.  The issues in the appeal have been determined against the plaintiff by the Judge.  Unless set aside by this court, the determination is binding on the plaintiff.  The plaintiff would need to persuade this court that the Judge was incorrect before we would disturb the order granted by the Judge.

31.We are not in a position to second guess whether the plaintiff would succeed in its application for licence but we are not going to act on the plaintiff’s self-serving optimism in that respect.  Irrespective of the outcome of this appeal, the plaintiff might still succeed in obtaining the licences and waiver in which event it may be able to say that it does not need to remove the human remains.  But such licences and waiver could not affect the liability on costs of the proceedings and until the grant of licence and waiver, the prohibition against sale or advertisement should stand.

32.The relief granted by the Judge on the counterclaim also includes provisions for refund of monies to customers of the plaintiff.  To that extent, unless the order of the Judge is set aside, it is not simply a matter between the plaintiff and the government.

33.Since the appeal was ready to be heard, the court should not allow the progress of the appeal (and the stay pending appeal) to be dictated by the progress in the plaintiff’s application for licences or waiver.

34.For these reasons, we took the view that the appeal should go ahead notwithstanding the matters alluded to in the stay application.  We refused the request to issue the summons accordingly.

Hon Barma JA:

35.I respectfully agree with the judgments of Lam VP and Au JA.

Hon Au JA:

A.  INTRODUCTION

36.This is the appeal by the plaintiff against the Judgment, in respect of disputes between the government and the owner operator of a private columbarium on leased government land lots in the New Territories (namely, Lot No 640 in DD 176 (“Lot 640”) and the Remaining Portion of Lot No 646 in DD 176 (“Lot 646RP”), Sha Tin, New Territories, Hong Kong (collectively, “the Subject Lots”).

37.The primary dispute is whether the plaintiff’s use of the building erected on the Subject Lots as a private columbarium by selling niches installed within it for the deposit of human cremation ashes is in breach of certain lease conditions.

38.By way of the Judgment, the Judge held that the plaintiff was in breach of various lease conditions and gave declarations to that effect.  She further ordered the plaintiff to take steps to refund all monies it had received from its customers.

39.The plaintiff now appeals against the Judgment.

B.  BACKGROUND

40.The plaintiff became the registered owner of the Subject Lots in 2006.  A building straddling the Subject Lots (“the Building”) already existed when the plaintiff acquired the lots.

41.It is common ground that Lot 640 was sold as a building lot in 1941 subject to, inter alia, the General Conditions (“GCs”) in Gazette Notice No 364 of 1934 (“GN 364”) and Special Conditions (“SCs”) 2(a), 2(b) and 3.  Meanwhile, Lot 644RP was sold as a garden lot in 1949 subject to, inter alia, GN 364 as amended by Gazette Notice No 50 of 1940 and Special Condition 1(a) (“SC 1(a)”).

42.The following lease conditions (“the Relevant Lease Conditions”) are relevant to the dispute:

(1)  GC 15 and Clause 7(5) which prohibit the owner from interring or depositing “human remains” on the lot sold without the consent of the government.

(2)  GC 16 which prohibits the owner from, amongst others, “underletting” or “parting possession” of the lot sold without the previous written consent of the District Officer.

(3)  SC 1(a) in respect of Lot 644RP which prohibits the erection of any buildings on the lot.

(4)  SC 3 in respect of Lot 640 which prohibits any addition or alteration to any building erected on this lot until the relevant plans have been submitted and approved by the District Officer.

43.In 2008, the plaintiff carried out certain renovation works to the Building, installing about 3,300 niches therein.   Afterwards, the Subject Lots were turned into a private commercial columbarium operating under the name of “Memorial Park” (孝思園) for placing urns containing cremated human ashes.  The plaintiff has since offered the niches for sale and sold them individually to the general public for the placing of articles of their ancestors or deceased family members, including the ashes of such deceased persons after cremation.

44.Since then, there have been complaints and enquires from the public as to the operation of a columbarium on the Subject Lots, leading to disputes between the plaintiff and the government as to whether the plaintiff has breached the lease conditions.

45.On 29 December 2010, the plaintiff commenced the proceedings below by originating summons.  In it, the plaintiff sought declarations that (a) GC 15 does not prohibit the deposit of ashes resulting from the cremation of human remains on the Subject Lots; and (b) alternatively, the government had in the past abandoned the enforcement of GC 15 and the enforcement of similar lease conditions for other land lots in the New Territories insofar as the purported prohibition of the interment or deposit of ashes resulting from the cremation of human remains is concerned.

46.By way of counterclaim, the government as defendant in turn sought declarations that the plaintiff had breached: (a) GC 15, Clause 7(5) and GC 16 in respect of the Subject Lots; (b) SC 1(a) in respect of Lot 644 RP; and (c) SC 3 in respect of Lot 640.  The defendant also sought orders that the plaintiff shall remove all human remains from the Subject Lots and take necessary steps to refund its customers and that the plaintiff shall cease the sale or advertisement of sale of the niches whether for the storage of cremated ashes on the Subject Lots or otherwise.

47.On 24 June 2011, Sakhrani J ordered the proceedings be continued as if begun by writ with directions for filing of pleadings.  For reasons unknown to us, the matter was put on hold for a long time thereafter.  It was not until 13 June 2017 that the Registrar granted leave to set the proceedings down for trial.

C.  THE JUDGMENT

48.The trial took place before the Judge on 15 August 2018 based on affidavits without any oral evidence.

49.By way of the Judgment, the Judge dismissed the plaintiff’s claim and granted all the relief sought in the government’s counterclaim.  In particular, the Judge found the plaintiff to have acted in breach of all the Relevant Lease Conditions.  Her reasons can be summarized as follows.

50.Given the Court of Appeal’s judgment in Regal Shining Ltd v Secretary for Justice[1] (“Regal Shining (CA)”), which the plaintiff’s then counsel at trial conceded was binding, the Judge found that the words “human remains” in GC 15 covered human ashes resulting from cremation.  In the premises, the plaintiff’s use of the Subject Lots in operating a private commercial columbarium for the deposit of human ashes was in breach of GC 15. See [18] - [26] of the Judgment.

51.Having reached that conclusion, the Judge then proceeded to resolve the following issues as summarized at [27] of the Judgment:

(1)  Whether or not the government has abandoned enforcement of GC 15 and similar lease conditions that prohibited the interment or deposit of human ashes;

(2)  Whether or not the plaintiff has acted and is acting in breach of (a) GC 16 in respect of the Subject Lots, (b) SC 1(a) in respect of Lot 644RP, and (c) SC 3 in respect of Lot 640;

(3)  Whether or not the government has abandoned enforcement of GC16 in relation to the Subject Lots; and

(4)  Whether or not the government is estopped from taking any lease enforcement action in relation to Lot 644RP for any alleged contravention of SC 1(a).

52.In relation to these issues, the Judge first concluded that the government did not abandon the enforcement of GC 15.  She found that, not long after the plaintiff had made internal renovations to the Building and installed the niches therein in 2008, the government throughout 2008 to 2010 had taken actions to assert the plaintiff’s breach of GC 15 and the government’s entitlement to enforcement actions.  The plaintiff therefore failed to prove its case on abandonment as there was no prolonged inaction on the part of the government after it had acquired the knowledge of the plaintiff’s continuing breach of GC 15.  See [30] - [52] of the Judgment.

53.Second, the Judge noted it was not in dispute that the plaintiff had offered the niches for sale and rental.  She found that these acts amounted to “underletting” or “parting with possession of” parts of the Subject Lots.  Since there was no evidence that this was carried out with the consent from the District Officer, the plaintiff was also in breach of GC 16.  See [29] of the Judgment.

54.For the same reasons given in concluding that the government did not abandon the enforcement of GC 15, the Judge similarly found that the government did not abandon the enforcement of GC 16: see [53] - [54] of the Judgment.

55.Third, the Judge also found that the renovation and installations to the Building amounted to “addition or alteration” prohibited under SC 3.  She rejected the plaintiff’s contention that the “addition or alteration” in SC 3 should be narrowly confined to structural changes.  She therefore concluded that the plaintiff was also in breach of SC 3 in carrying out those renovations to the Building when there was no evidence suggesting that the plaintiff had submitted the plan for approval as required by SC 3. See [55] - [64] of the Judgment.

56.Finally, she found that the existence of the Building on the Lot 644RP clearly contravened SC 1(a).  She then concluded that the alleged inaction of the government did not amount to any representation or promise to forgo its right to enforce SC 1(a), given that (a) the renovation of the Building and installation of niches therein only came to the government’s knowledge in 2008, and (b) it was the plaintiff’s own position in its subsequent correspondence with the government that, subject to the plaintiff’s contention on the scope of GC 15, all the other lease conditions remained fully enforceable as against the Subject Lots.  See [65] - [68] of the Judgment.

57.The Judge therefore dismissed the plaintiff’s claim and made the declarations that the plaintiff had been in breach of each of the Relevant Lease Conditions.  She further ordered that the plaintiff shall forthwith (a) remove from the Subject Lots all human remains, (b) take all necessary steps to refund all monies to its customers, and (c) cease the sale or advertisement of the sale of niches.

D.   GROUNDS OF APPEAL

58.The plaintiff appeals the Judgment to this court and has advanced the following grounds of appeal in its Notice of Appeal (“NOA”)[2]:

(1)  The Judge was wrong in law in holding that the words “human remains” in GC 15 include human ashes and hence the deposit of ashes on the Subject Lots (“Ground 1”);

(2)  There was no sufficient evidence upon which the Judge could find that the plaintiff has acted or still acts in breach of GC 16 in relation to the Subject Lots (“Ground 2”);

(3)  The Judge was wrong in law in holding that the government has not effectively abandoned its right of enforcement for SC 1(a) in relation to Lot 644RP (“Ground 3”);

(4)  There was no evidence upon which the Judge could find that there were “additions or alterations” done by the plaintiff to the Building at the Subject Lots which could amount to “additions or alterations” for the purpose of SC 3 (“Ground 4”);

(5)  There was no evidence upon which the Judge could find that the plaintiff has acted or still acts in breach of SC3 in relation to Lot 640 (“Ground 5”) and;

(6)  The Judge erred in law in that she had inappropriately ordered the plaintiff to make refund of monies to non-parties of the present proceedings (ie, the customers) as part of “conditions for rectification of the breach” of the leasing conditions (“Ground 6”).

D1.  Ground 1

59.We will first consider Ground 1 which concerns the Judge’s conclusion on GC 15 (and thus also Clause 7(5)).

60.GC 15 provides as follows:

“Without the consent of the District Officer, no grave shall be made on, nor shall any human remains be interred in, or deposited on the lot sold either in earthenware jars or otherwise.” (emphasis added)

61.Clause 7(5) provides as follows:

“That without the consent of His said Majesty signified in writing by the Governor of the said Colony or other person duly authorized in that behalf, no grave shall be made on, nor shall any human remains be interred in, or deposited on the said premises.” (emphasis added)

62.There is no dispute that the plaintiff has been operating a private commercial columbarium on the Subject Lots, and that the niches installed in the Building were offered for sale individually to the general public for the placing of articles of their ancestors or deceased family members.  Although the plaintiff maintained that its customers might place other articles such as clothing and personal belongings of the deceased persons in the niches for memorial purpose, it accepted that the articles placed within the niches also included human ashes after cremation.[3]

63.The principal issue in dispute is thus whether the words “human remains” in GC 15 (and Clause 7(5)) are intended to cover human ashes after cremation stored in the niches installed in the Building on the Subject Lots.

64.In Regal Shining (CA), the Court of Appeal[4] also considered the issue of whether the operation of a columbarium on a piece of land was in breach of GC 15 and Clause 7(5) contained in a government lease granted in 1953.  In dismissing the appeal, and agreeing with Anthony Chan J’s judgment at first instance, the Court of Appeal held that, on a proper interpretation against the prevalent circumstances in 1953, the meaning of the phrase “nor shall any human remains be inferred in, or deposited” in GC 15 and Clause 7(5) shall not be confined to human bodies or bones which were usually found in graves, but also applied to cremated human ashes.  In the premises, the plaintiff registered owner of the land was found to be in breach of GC 15 and Clause 7(5) in operating the columbarium.  See [37] - [44].

65.In the present case, before the Judge, the plaintiff initially sought to challenge the correctness of the decision in Regal Shining (CA) on the basis that it did not refer to section 3 of the Cremation and Gardens of Remembrance Regulations (Cap 132M) (“the Regulations”), which defines the term “human remains” as “the dead body of any human being or any still-born child, but does not include ashes resulting from the cremation thereof”.[5]

66.However, at trial, Mr Arthur Yip (counsel then appearing for the plaintiff) accepted that Regal Shining (CA) was binding on the Judge.[6]  Therefore, following Regal Shining (CA), the Judge found that the words “human remains” in GC 15 plainly included human ashes resulting from cremation and that the storage of human ashes in the operation of the columbarium on the Subject Lots was in breach of GC 15.[7]

67.In the NOA[8], the plaintiff initially again contended that the Judge’s finding was wrong as she had failed to pay due regard to the definition of “human remains” in section 3 of the Regulations and that the decision in Regal Shining (CA) was “plainly wrong” as the said definition was not brought to the attention of or considered by the court.

68.However, in the plaintiff’s skeleton submissions and at the hearing, Mr Patrick Chong[9] (now appealing for the plaintiff) no longer sought to challenge the correctness of the decision in Regal Shining (CA) and accepted that it was binding.[10]  Instead, Mr Chong sought to distinguish Regal Shining (CA) on the basis that (a) in that case the court did not have the chance to consider the Cremation Ordinance enacted in 1914 (“the 1914 Ordinance”) and the Regulations; and (b) the Subject Lots were sold by the Government in the 1940s, when the “prevailing circumstances” were different from those when the land in question in Regal Shining (CA) was sold in 1953.

69.For the following reasons, I do not accept these submissions.

70.First, I agree with Mr Abraham Chan SC[11] for the government that the plaintiff’s reliance on the 1914 Ordinance and the Regulations to assist the interpretation of the meaning of “human remains” in GC 15 and Clause 7(5) is flawed:

(1)  Generally, the court does not derive any assistance by comparing provisions made at different times and for different purposes, especially in comparing a lease provision (which is contractual in nature) and a statutory provision given the plainly different contexts in which the words are used.  As observed by this court in Cheermark Investments v Director of Lands [2018] 1 HKLRD 79 at [40]:

“[a] definition for a particular statutory purpose does not really help one to determine the meaning of the word one has to construe in a different document, even when they involve the same or a similar expression, as the word in different documents may take on different meanings because of the textual or factual context”.

(2)  In the present case, the Regulations were enacted in 1974 pursuant to the Public Health and Municipal Services Ordinance (Cap 132), which makes provision for public health and municipal services, including the disposal of the dead.  Hence, the Regulations, which substantially post-date GC 15 and Clause 7(5), cannot be properly taken as part of the interpretative context against which to consider these two conditions, and cannot be used to ascertain the true intention prevailing at the time when the sale was concluded as to the meaning and scope of GC 15 and Clause 7(5).

(3)  In any event, the Regulations specifically provide for regulation of cremation and crematoria, which explains why distinction was drawn between “human remains” (defined as “the dead body of any human being or any still-born child, but does not include ashes resulting from the cremation thereof”) and “ashes” (defined as “ashes resulting from the cremation of human remains”) to differentiate between what was before and what is after the process of cremation.

(4)  Therefore, the objective context in which the words “human remains” are used in the Regulations is materially different from that in GC 15 and Clause 7(5) under a government lease, and hence the former is not of any assistance to the proper construction of the latter.

(5)  Further, similar arguments based on the 1914 Ordinance were considered by Anthony Chan J in Regal Shining Ltd v Secretary for Justice [2014] 5 HKLRD 832 (“Regal Shining (CFI)”) and rejected by the judge.  The learned judge explained the reasons in [76] - [77] as follows:

“76.  I have also been referred by [the plaintiff] to the [1914 Ordinance], the Regulations made thereunder and the Public Health and Buildings Ordinance 1923. In respect of the [1914 Ordinance] and its Regulations, it is said that under those legislation ‘ashes’ and ‘human remains’ were two separate and distinct concepts. I am not attracted by this submission. It is plain that in these legislation it was necessary to distinguish between ‘ashes’ and ‘human remains’ because of the need to deal with different stages where human remains turned to ashes. For instance, reg.15 provided as follows:

After the cremation of the remains of a deceased person the ashes shall be given into the charge of the person who applies for the cremation if he so desires. …

77.  As regards the Public Health and Buildings Ordinance 1923, I was referred to ss.91 and 92 thereof. The former concerned the proper burial of human bodies and the depositing of urns containing the remains of any bodies. The latter prohibited the exhumation of human bodies or their remains without the requisite permit. I do not derive any assistance from these provisions, which were concerned with public health issues relating to the disposal of human bodies or their remains. Obviously, there is no similar issue concerning Ashes. The timing of the legislation, a point which has been alluded to in [75] above, also militates against any reliance on it for the present purpose.”

(6)  In gist, Anthony Chan J rejected those arguments on the basis that it was necessary in such legislations to distinguish between “ashes” and “human remains” because of the need to deal with different stages where human remains turn to ashes.  The learned judge further did not consider sections 91 - 92 of the Public Health and Buildings Ordinance 1923 to be of assistance as they concerned public health issues relating to the disposal of human bodies or their remains and had no similar issue concerning human ashes.  His reasoning has not been disturbed on appeal in Regal Shining (CA).

(7)  I also respectfully agree with and adopt herein the learned judge’s said analysis and reasoning.  Thus, I agree that the context of the 1914 Ordinance was different and it was plainly apt for legislation regulating the cremation process to distinguish “human remains” and “ashes” to deal with the pre- and post-cremation stages.  Such distinction however does not inform the question of whether cremation ashes were intended to be excluded from the scope of “human remains” in the government lease context.

71.Second, on the point about timing, Mr Chong placed considerable emphasis on the fact that the government lease in question in Regal Shining (CA) was entered into in 1953 and that the New Grants relating to the Subject Lots were made in the 1940s, when the “prevailing circumstances” in the 1940s were different in that cremation was not the prevalent practice amongst Chinese inhabitants at the time.  In support of this contention:

(1)  Mr Chong submitted that the evidence filed by both parties showed that cremation was not the prevalent practice amongst Chinese inhabitants till the 1960s.

(2)  He also relied on the observation by Anthony Chan J in Regal Shining (CFI) at [69] that “in the 1950s with the encouragement of the Government, a change in thinking and shortage of land supply cremation had gradually become popular”, to argue that the New Grants were made before such change in government policy and that, at the time of the New Grants, cremation remained “few and far between”.

(3)  In addition, Mr Chong argued that, for a reasonable person in the 1940s, it would not have come to his mind that cremation would gain popularity in the 1950s due to a change in Government policy.

(4)  In the circumstances, Mr Chong contended it could not be said that any reasonable person having such knowledge in mind at the time of the New Grants in the 1940s would have understood “human remains” as including “ashes”.  This was particularly so when such a reasonable person was equipped with the knowledge of the distinction between the two terms in the 1914 Ordinance.

72.At the hearing, Mr Chong further took us to the following parts of various government internal minutes back in 1911[12] which he said pertained to the making or introduction of GC 15 in government leases:

(1)  On 10 July 1911, it was stated by the Crown Solicitor 1911 to the Colonial Secretary that[13]:

“1. Burial in any ground not being an authorized cemetery is prohibited. Sec. 91 of the Public Health & Buildings Ordinance 1903, this however does not apply to the New Territories generally, but only to New Kowloon and the Island of Cheung Chau (Bowley p 500)

2.   In the rest of the New Territories burial on Crown Land is illegal unless a special permit is issued: burial on leased land depends upon the terms of the lease upon which the Land Officer should advise.”

(2)  The memo addressed to the Governor on 14 July 1911 then stated[14]:

“Your Excellency,

The A.C. 88 minute above refers only to Crown Land. I suggest that an additional covenant be added to all future Crown Leases forbidding the burial of any human body in the land leased without the written authority of the D. O.

2. We shall then, except for the area of existing leased land, have complete control over all Chinese burials in the New Territories as well as in Victoria Hongkong.” (emphasis added)

(3) On 21 August 1911, the Land Officer stated to the Colonial Secretary[15]:

“Hon Col Sec.,

I am inclined to doubt whether the comparatively rare cases of interment on private lands are worth troubling about [but] there will be no Lessee [sic] done in having a special condition in future sales and I suggest the following:-

‘Without the consent in writing or the D. O. no grave shall be made on nor shall any human remains be interred in or deposited on the land sold either in earthenware or jars or otherwise and a covenant to this effect shall be inserted in the Crown Lease of the Lot.’”

(4)  On 24 August 2011, the memo addressed to the Governor further stated[16]:

“Your Excellency,

As to minutes of acting D. O. N. T.

A) There is no objection to sites being given for graves on Crown Lands provided that case [sic] is taken not to grant them in places which may be required later for other purposes.

B) The remedy would appear to be to settle these disputes at the time of the annual festival when notices can be effectively served.

C) The remedy is to hand over the certificate on the grave site in the presence of local independent witnesses [who] would sign their names upon it.

D) The danger of indiscriminate burial is not a sanitary one; it is that valuable sites may be rendered unavailable for the occupation of the living owing to the presence of the remains of the dead, and the sentimental reverences attached to them.

2. Approve L. O.’s suggestion as altered by me.” (emphasis added)

(5) On 30 August 1911, the District Officer stated to the Colonial Secretary[17]:

“Hon. Col. Sec.,

Noted: should not the new condition be gazetted as a G. N., somewhat as follows – ‘With reference to G. N. 365 of 1906, it is hereby notified that following general condition of sale shall be added as condition No. 15 to the general conditions contained in the aforesaid notification. And also with reference to G. N. 697 of 1909, it is hereby notified that the following special Condition of Sale shall be added to the special Conditions contained in the aforesaid notification, and shall be referred to as Special Condition No. 5?”

73.Mr Chong submitted that these parts of the internal minutes clearly showed that, at the time when GC 15 was introduced, the government’s intention and concern was to control graves and burial of human bodies, and not storage of cremated human ashes and that there was no evidence to suggest that there was any change of intention up to the time of the New Grants in the 1940s.  In the premises, when properly interpreted against this contextual background, the words “human remains” in GC 15 objectively could not be intended to cover human ashes.

74.With respect, I am not convinced by the above submissions.

75.First, the evidence relied upon by Mr Chong[18] at most only shows that cremation was not the prevalent practice amongst Chinese inhabitants in the 1940s.  But as Lam VP pointed out at the hearing, which Mr Chong fairly accepted, cremation was not something unheard of or unknown back in the 1940s.  In fact, the fact that the Government saw the need to legislate to regulate cremation by way of the 1914 Ordinance clearly demonstrates that this was not an alien concept to the Hong Kong community as early as the 1910s.

76.Second, Mr Chong’s reliance on the observation by Anthony Chan J in Regal Shining (CFI) about the change in Government policy in the 1950s does not assist him.  Putting aside the question as to whether it is appropriate to rely on this observation, which was made based on the evidence before the court in a different case, this observation actually militates against Mr Chong’s case.  If one accepts the reasoning in Regal Shining (CA) with regard to the 1950s, and bearing in mind there was no change of wording in GC 15 after the change of Government policy in the 1950s, it must mean that those responsible for drafting Government leases were satisfied that the phrase “human remains” was wide enough to cover human ashes.

77.Likewise, the minutes relied upon by Mr Chong made it clear that, in regulating the use of government land, the concern was not a sanitary one (see [72(4)] above).  Rather, the concern was that valuable sites might be rendered unavailable for the occupation of the living owing to the presence of remains of the dead and the sentimental reverence attached to them.  The same concern would equally apply whether the remains of the dead were in the form of bones or cremated ashes.  Given this underlying concern which GC 15 was introduced to tackle, it clearly cannot be said that objectively those proposing to introduce GC 15 in 1911 did not intend to cover cremated human ashes, especially when the Government already saw the need to enact the 1914 Ordinance to regulate cremation of dead bodies at around the same time.

78.For all the above reasons, there are no merits in Ground 1, and I would dismiss it.

D2.  Ground 3

79.This relates to the finding that the plaintiff was in breach of SC 1(a).

80.SC 1(a) provides as follows:

“No buildings of any description shall be erected on the lot.”

81.As mentioned above, Lot 644RP is subject to SC 1(a).  When the plaintiff acquired the Subject Lots, there was already a Building erected thereon which straddled the Subject Lots.  The existence of the Building, therefore, contravenes SC 1(a) insofar as Lot 644RP is concerned.

82.The Judge rejected the plaintiff’s argument that the Government has abandoned the enforcement of SC 1(a) in relation to Lot 644RP on the basis that the matters relied upon by the plaintiff did not amount to any representation or promise on the part of the Government to forgo its rights to enforce SC 1(a).  She explained her reasons at [66] - [68] of the Judgment as follows:

“66.  I reiterate the legal principles on abandonment discussed in paragraphs 40-44 above. As submitted by Mr Chan SC, P has not identified what kind of estoppel it purports to rely on.

67.  P complains the government has never taken enforcement action in relation to the Building until 2009/2010 when dispute arose between P and the government, and there is no evidence to show the government has not abandoned enforcement action in relation to SC 1(a). It is said that but for the dispute between P and the government over issues as to use of Lot 644RP to place cremated human ashes, there is nothing to show the government will enforce SC 1(a) even though the Building has existed for decades. On such basis, it is said the government has effectively abandoned enforcement of SC 1(a) as a standalone provision in GC 364 in respect of Lot 644RP.

68.  Mr Chan SC submits (and I accept) that none of the matters to which P alluded in its Reply and Defence to Counterclaim or in Mr Yip’s written submissions support the operation of any doctrine of estoppel. Even assuming (as P suggests) the government has for a certain period before the present proceedings not taken enforcement action based on specific breach of SC 1(a), it still does not amount to any representation or promise on the part of the government to forgo its rights to enforce SC 1(a), especially when P’s renovations to the Building and installation of 3,300 niches therein have been carried out and have only come to the government’s knowledge in 2008. It is also telling that in the correspondence following the government’s discovery of P’s columbarium operation, P by its solicitors did not allege it has been led into believing the government acceded to its activities by reason of any alleged lack of enforcement, and instead P seeks only to contend for a narrow interpretation of GC 15 which presupposes that, subject to P’s narrow reading of GC 15, the other lease conditions remain fully enforceable as against the Subject Lots.”

83.In this appeal, the plaintiff did not dispute the legal principles applicable to the issue of abandonment of rights as summarized by the Judge in [40] - [44] of the Judgment.  In gist, under those principles, the plaintiff in the present case carries the burden to prove its case of abandonment, and in so doing, it must also prove that the government had already acquired the specific knowledge (express or implied) of the particular breach of SC 1(a) during the time when material inaction was alleged.

84.In this respect, Mr Chong sought to argue that the Judge’s rejection of the plaintiff’s case on abandonment was flawed as she ought to have paid due regard to the various parts of the evidence which showed that the Government “must have aware of” or “put on suspicion” that the Building on Lot 644RP breached SC 1(a) when “it visited the Lots in 1990’s”.  As such, the Judge ought to have found that the government’s specific knowledge for the case of abandonment proved.  In particular, Mr Chong relied on the following parts of the evidence which he said supported his contention:

(1)  The undisputed fact that Building had existed on the Subject Lots for decades, but the government had never taken enforcement action until 2009 to 2010 when disputes arose between the plaintiff and the government.[19]

(2)  The following matters pleaded in paragraph 9(c) of its Reply and Defence to Counterclaim:

(a)  The Building was completed in or about the 1960s;

(b)  The size or footprint of that part of the Building which lies within Lot 644RP is not insignificant in relation to the total area of Lot 644RP;

(c)  On an occasion in or about the 1990s, officers from the government departments including the Lands Department and the Buildings Department paid a visit to the Subject Lots in connection with some alleged contravention of the GN 364 General Conditions; and

(d)  After the said site visit, the Government has not taken any lease enforcement action in relation to Lot 644RP.

85.Leaving aside Mr Chan’s justified complaint that this was not the plaintiff’s case at trial and thus the Judge’s dealing with this issue could not be faulted, I also do not find any merits in these submissions for the following reasons.

86.The undisputed evidence is that Lot 644RP is located at the back of Lot 640. As demonstrated by the plans showing the location of the Subject Lots and the Building[20], given the way the Building straddles the Subject Lots, on the face of it, it would not be immediately apparent to a visitor of the site what is at the back (ie, on Lot 644RP) with the Building at the front. The plaintiff has not filed any evidence to show otherwise.

87.In addition, the plaintiff has also not filed any evidence to prove the above matters pleaded in its Reply and Defence to Counterclaim, notwithstanding that the burden of proof falls squarely on it to prove abandonment.  In the absence of any specific evidence filed in support of these pleas, the government also did not have the chance to file evidence to respond to any such evidence.  It is no answer for Mr Chong to say that the matters have been pleaded and supported by a statement of truth.  As Lam VP said at the hearing, there is a fundamental difference between pleading and evidence.

88.Once the matter and the lack of evidence is considered in this way, I am not satisfied that the plaintiff has discharged its burden of proving that the government had acquired the requisite knowledge of the breach of SC 1(a) for a substantial period of time before 2008.  Without proof of the said knowledge, the Judge was clearly right in concluding that the plaintiff had failed to establish its case on abandonment.  I would therefore also reject this ground of appeal.

D3.  Grounds 2, 4 and 5

89.For reasons explained below, the appeal against the Judge’s findings in respect of GC 16 and SC 3 will be conveniently addressed together.

90.GC 16 provides as follows:

“The Purchaser, his executors, administrators or permitted assigns shall not, except by way of mortgage, assign, underlet or part with the possession of or otherwise dispose of the lot or any part thereof or any interest therein nor enter into any agreement so to do, without the previous consent in writing of the District Officer, unless and until the District Officer shall have issued a certificate to the effect that the building condition, if any, has been fulfilled to his satisfaction or if there is no building condition, that the lot has been developed to his satisfaction.”

91.SC 3 provides as follows:

“No addition or alteration to any building erected on the lot in accordance with these conditions shall be made until plans which comply with Special Condition 2 hereof have been submitted and approved by the District Officer but such plans need not be prepared by an authorized architect unless the alteration or addition is such as to render the whole building a new building with the definitions contained in Section 6(39) of the Public health and Buildings Ordinance, 1903, or unless such addition or alteration involves the use of reinforced concrete.”

92.It is the government’s case in its counterclaim that the plaintiff has acted in breach of GC 16 and SC 3 by its installation of the niches in the Building.  The Judge found for the Government on both heads of counterclaim.  See the Judgment at [29] and [64].

93.However, as this court indicated at the hearing, there is simply no or insufficient relevant evidence filed in this case concerning the background and context leading to the drafting and incorporation of GC 16 and SC 3 in government leases.  Given that these two clauses are standard clauses in government leases and a decision on their proper construction and whether they have been contravened would have more general and wider implications, we do not consider it appropriate whether for the Judge or this court to decide on these two issues in the present case in the absence of the relevant evidence.

94.Mr Chan SC for the government fairly accepted at the hearing the lack of relevant evidence in this respect and agreed not to press on with these two issues.

95.In the circumstances, for the above reason, I would set aside the declarations made by the Judge with regard to GC 16 and SC 3.

D4.  Ground 6

96.This challenges the order made by the Judge at paragraph 6 of the sealed Order that “the Plaintiff do forthwith remove from the Subject Lots all human remains, including any cremated ashes, taking all necessary steps to refund all monies to its customers” (my emphasis).

97.The plaintiff questioned the legal basis for the Judge to make an order requiring the plaintiff to refund all monies to its customers, when the present proceedings only involved a private contractual dispute between the plaintiff and the government.  Whether the plaintiff’s customers are entitled to any refund or any other relief against the plaintiff is a question governed by the contract between the plaintiff and its customers.

98.In addition, Mr Chong further confirmed at the hearing that the plaintiff was prepared to give an unconditional undertaking to the court that, upon the request of any owner of the niche at the Subject Lots, it will refund the purchase price to the owners of the niches in accordance with the signed contracts between the plaintiff and the owner[21].

99.On the other hand, Mr Chan argued that it was within the court’s inherent jurisdiction to make an order like this, but has not been able to cite any authority in support of such a proposition.

100.It is not immediately apparent to us what is the underlying legal basis for the Judge to make the order which dealt with matters that are governed by contracts between the plaintiff and its customers and are not part of the dispute before the court.  The customers are also not parties to these proceedings.

101.In the circumstances, I would also set aside this part of the order conditional upon the plaintiff’s undertaking as recorded at [98] above.

E.  CONCLUSION

102.For all the above reasons, I would dismiss the appeal subject to the setting aside of the declarations made by the Judge in relation to the breach of GC 16 and SC 3, as well as the part of the order requiring the plaintiff to forthwith take all necessary steps to refund all monies to its customers (ie, paragraphs 2, 3 and the second part of paragraph 6 of the sealed order made by the Judge).

103.I now turn to consider costs.

104.There are two sets of costs that need to be dealt with.

105.The first relates to the costs of the plaintiff’s unsuccessful attempt to apply for a last minute stay of the appeal before the hearing.  Lam VP has in the above set out the background of and the reasons for refusing the application.  The government has asked for costs on an indemnity basis.  The court heard the parties’ submissions in relation to this at the hearing.

106.On behalf of the plaintiff, Mr Chong could not offer any good explanation for the dilatory and piecemeal way in which the application was taken out.  He suggested that the decision to take out the application was only made after the present team of counsel was briefed. That cannot, however, be a good explanation: see also [23] above.  It must be noted that the plaintiff has all along been legally represented.

107.Mr Chong also submitted that the oversight of not copying the supporting affirmation and exhibits to the defendant did not cause grave disadvantage to the defendant.  I disagree.  The way in which the application was handled had obviously caused real prejudice to the defendant, bearing in mind the tight timeframe and the late stage in which the application was made, when counsel should have been focused on preparing for the appeal instead of being distracted by such an unmeritorious late application.  It was also an unjustified waste of judicial time and resources.  See also Lam VP’s observations at [17] - [18] above.  The courts have on various occasions stressed that such conduct should be discouraged.

108.In the circumstances, I would order that the plaintiff should pay the defendant costs of this application on an indemnity basis, to be taxed if not agreed, with certificate for two counsel.

109.I will next turn to the costs of this appeal.

110.As indicated above, the main and substantive dispute and issues involved in this matter and the appeal relate to whether the plaintiff was in breach of GC 15 and Clause 7(5).  The plaintiff has failed in the appeal in relation to these issues.

111.Further, although the court has set aside those parts of the declarations concerning GC 16 and SC 3, that is dealt with not on the basis of the plaintiff’s contentions made under Grounds 2, 4 and 5, but on the court’s own observation that this is not an appropriate case to determine these issues, in particular in light of the fact that the principal dispute relates to the breach of GC 15, Clause 7(5) and SC 1(a).

112.Hence, the plaintiff has substantially failed in this appeal.  However, having taken into account the fact that the parties have prepared for arguments raised under Grounds 2, 4 and 5, and that the plaintiff has succeeded in setting aside the order requiring it to make refund to its customers (albeit also coupled with the condition of the plaintiff’s undertaking), I think it just and fair to order (on a nisi basis) the plaintiff to pay 80% of the government’s costs, to be taxed if not agreed, with certificate for two counsel.

Hon Lam VP:

113.There will be judgment in terms of [102], and order in terms of [108] and [112] above.

Mr Patrick Chong and Mr Ross Li, instructed by H Y Leung & Co LLP, for the appellant (plaintiff)

Mr Abraham Chan SC and Ms Bonnie YK Cheng, instructed by Department of Justice, for the respondent (respondent)