Ho Choi Yim-fong v. Attorney General
Read the full judgment text of CACV 69/1978 on BabelCite. This Court of Appeal judgment was delivered on 18 July 1979.
1. The Order in the court below granted to the appellant Plaintiff a declaration "that the [respondent] Commissioner was wrong in refusing to consider applications dated the 10th day of December 1975 for registration and licensing of twenty public cars, but no more". The last three words were included due to a misunderstanding of the learned judge's judgment, but they are of no significance. The applications were in fact signed on 10th December, were forwarded to the Commissioner under cover of
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CACV000069/1978 Applications to register and license public cars - applications wrongly refused under reg. 17(2) of Road Traffic (Registration and Licensing of Vehicles) Regulations - interpretation of reg. 17F - registration and licensing of further public cars discontinued - existing public car owners entitled to license their vehicles as taxis on payment of premium - whether applicant entitled to taxi licences as if applications had been considered on their merits and granted.
----------------- Coram: Huggins, J.A., McMullin and Yang, JJ. Date of Judgment: 18 July 1979 ----------------- JUDGMENT ----------------- Huggins, J.A.: 1. The Order in the court below granted to the appellant Plaintiff a declaration "that the [respondent] Commissioner was wrong in refusing to consider applications dated the 10th day of December 1975 for registration and licensing of twenty public cars, but no more". The last three words were included due to a misunderstanding of the learned judge's judgment, but they are of no significance. The applications were in fact signed on 10th December, were forwarded to the Commissioner under cover of a letter dated 16th December but were not received by him until 17th December. The judge refused to grant declarations in the following terms:
The Appellant now seeks to have these declarations added to the judgment. 2. The Appellant's applications were never considered upon their merits: the Commissioner rejected them on the ground that the maximum number of public car licences allowed by law had already been issued. That was an honest mistake and it is common ground that at all material times there were more than twenty public car licences available to be granted. Hence the declaration made in favour of the Appellant. The learned judge refused the other declarations sought, because he was not satisfied that, if the Commissioner had considered the applications, he would necessarily have registered the vehicles and issued licences. 3. On behalf of the Appellant Mr. Chan has contended:
4. No dispute arose as to the first two steps in that argument and therefore the learned judge made the first declaration sought. Nor, I think, was step (3) seriously disputed. Where the Commissioner refuses an application he is required by reg. 17F of the Road Traffic (Registration and Licensing of Vehicles) Regulations to serve on the owner a notice specifying the general grounds for the refusal. I shall come back to the provisions of that regulation later. The grounds upon which the Commissioner may lawfully refuse an application are set out in paras. (1) and (2) of reg. 17 and the Commissioner has not suggested that in the absence of any such grounds he would have a discretion to refuse an application. Again, it is not disputed that the Commissioner has pointed to no other ground upon which he would definitely have refused the applications than that the Appellant was not the owner. This does not, however, mean that the Commissioner concedes that he might not have found some good ground for refusal had he considered the applications upon their merits. 5. Mr. Chan submits that the judge was wrong when he held that the Appellant was not the owner of the vehicles within the meaning of reg. 4. Para. (2) of that regulation reads:
The judge held that, under the terms of the contract which the Appellant had entered into with a motor-car dealer for the sale and purchase of the twenty vehicles she desired to register and license as public cars, the property in the vehicles had not passed to her. There was a printed form of contract upon which the particulars had been typed in. The contract related to "20 units Datsun Cedric 220C Diesel Sedan (details as per attachment)" and there was an annexure giving the engine and chassis numbers of the cars appropriated to the contract. If that were all, there can be little doubt but that the property in the cars would have passed to the Appellant. However, there were added to the form in typescript the following "Remarks":
It is the second of these provisions which is said to show the intention of the parties that the property should not pass until delivery. I agree with Mr. Chan that the words "provided that" should be interpreted as "if". The contract therefore said that, if the Appellant failed (as she did) to license the vehicles by 13th December 1975, the vendors had an option to sell those particular vehicles but might, at their option, substitute vehicles subsequently received from the manufacturers. Thus there was not merely a conditional appropriation of cars to the contract but a conditional contract. Clearly the vendors could not lawfully sell the cars unless the property in those cars was vested in them at the date of sale. 6. Both sides have sought to support their contentions by reference to the provisions of the Sale of Goods Ordinance. It is common ground that the property would be transferred under the contract at such time as the parties intended it to be transferred (s. 19), but there the consensus ends. Mr. Sinclair relies upon s. 21(1), but I do not think this contract "[reserved] the right of disposal of the goods until certain conditions [were] fulfilled": the right of disposal was only to arise if a condition had not been fulfilled. Mr. Chan relied upon rules 1 and 5 of s. 20, but I think they are equally inapplicable, because the contract was not unconditional and the goods were not unconditionally appropriated to it. We are left with "the terms of the contract, the conduct of the parties, and the circumstances of the case". It was inherent in the contract that either the property was to remain in the vendors throughout or it should vest in the Appellant upon the signing of the contract but should revest in the vendors upon the exercise of their option to sell, for clearly the vendors could not lawfully sell the cars unless the property in those cars was vested in them at the date of the sale. However, I see nothing in the contract which suggests that the parties contemplated the possibility of a revesting and it seems to me that the more reasonable interpretation is that the property was not to pass until delivery of the cars. I see no other basis for considering the Appellant to be an "owner" within the meaning of the Regulations. Accordingly, if it be necessary, I hold that the learned judge was right to conclude that on 17th December 1975, when the applications were lodged with the Commissioner, the Appellant was not an "owner" within the meaning of reg. 4 and was not entitled to apply for registration and licensing without the written authorization of the vendors, in whom the property in the vehicles was vested. The Appellant had personally signed the forms of application. The covering letter dated 16th December 1975 was written not by the vendors, who no doubt do sometimes apply for registration and licensing of vehicles on behalf of their customers, but by the Appellant's solicitors, so it could not be argued that that letter constituted the written authorization of the owners. Incidentally, it may also be noted that if the Appellant was not an owner within the meaning of reg. 17F - and I think the word must have the same meaning in reg. 17F as it has in reg. 4 - she would not have been entitled to notice of the reasons for a refusal of the applications upon their merits. 7. Even if my view on the question of ownership be wrong, there is another reason why I think the appeal should be dismissed, although as regards declaration No. 3 the appeal might conceivably have been allowed but for the enactment of s. 4A(6). It is not, however, necessary to decide what the law was before that subsection came into force. Mr. Chan has submitted that under the terms of reg. 17F the Commissioner was required to state once and for all the grounds upon which the applications were refused, that in fact he stated one reason when giving the only notice which could be regarded as complying with that regulation and that, even at the trial, he sought to rely upon just one other ground, namely that the Appellant was not the owner. The regulation provides:
In the court below it was apparently conceded by counsel for the Commissioner that once the Commissioner had given reasons for refusing the applications it would be improper for him subsequently to rely upon other (unexpressed) reasons. Therefore, Mr. Chan argues, although the Commissioner said that he was barred from considering the applications - from which it might be inferred that he did not consider them - he cannot now rely upon any reason for refusal which might have come to light had the applications been considered. This would mean that when the Commissioner refuses an application under reg. 17(2) he is bound in practice to consider the merits of the application or be for ever prevented from relying upon any further reason which might, upon such consideration, have justified a refusal under reg. 17(1). I find it difficult to believe that the Legislature intended to force the Commissioner to undertake such a pointless and wasteful task. When one sees that a legitimate ground for refusing an application under reg. 17(1) would be that the vehicle was unroadworthy, the absurdity which would arise becomes even more obvious. Mr. Chan seeks to overcome that absurdity by conceding that the Appellant is entitled to have her vehicles registered only if "all the conditions as to roadworthiness, etc., are satisfied", but she cannot have her cake and eat it: by conceding that there might be grounds, not so far relied upon, which could justify the court in refusing to declare in favour of her right to have the vehicles registered, counsel is necessarily conceding that there might have been grounds, not so far relied upon, which could have justified the Commissioner in refusing to register the vehicles. How does this fit in with reg. 17F and with the concession of counsel for the Commissioner that once the Commissioner had given reasons for refusing the Appellant's applications it would be improper for him subsequently to rely upon other (unexpressed) reasons? I think there is a simple answer. Reg. 17F requires that the general grounds for the refusal be specified. These applications were refused on the general ground set out in reg. 17(2). The applications not having been considered on their merits the Commissioner did not give notice of any ground which might have been available to him under reg. 17(1) if he had considered the applications. At that time he was not even aware that the Appellant was not the owner of the vehicles: that was discovered later. For my part I cannot accept that reg. 17A compels the Commissioner, when refusing an application upon the general grounds contained in reg. 17(2), to specify the grounds upon which he would have refused that application under reg. 17(1) had he considered it upon the merits. Where, however, there has been a refusal under reg. 17(1) upon a consideration of the merits, the Commissioner must specify all the grounds of the refusal and cannot subsequently give a further notice specifying a ground under reg. 17(1) which was not specified in the first notice. In the present case there never has been a refusal on any of the grounds listed in reg. 17(1). What the Commissioner said at the trial was that he had not considered the applications on the merits, that he was therefore not obliged to give reasons for refusing the applications on the merits and that, now it was established that he should not have refused the applications under reg. 17(2), he should not be compelled to register and license the vehicles which were the subject matter of the applications until the applications had been considered on the merits, which, by reason of s. 4A(6) was no longer possible. The reason underlying the last of these contentions was that, when the applications were considered, there might have been grounds which would justify their refusal under reg. 17(1) and he sought to add weight to that possibility by showing that there was in fact such a ground, namely that the Appellant was not the owner. I do not think this attempt to reinforce the argument was, as the judge thought, illogical, but it was unfortunate, as it misled the Appellant into concentrating attention on the issue of ownership, which in my judgment was only indirectly relevant: it was enough that the applications had not been considered upon their merits and that, when they were so considered, it was not a foregone conclusion that they would be granted. 8. Another complication arose in the case because it would seem that, before the expiration of the seven days allowed to the Appellant for licensing of the vehicles and, therefore, before the option to sell became exercisable, the vendors in fact disposed of eight of the cars identified in the contract. Even if I be wrong in agreeing with the learned judge that the property in none of the cars ever passed to the Appellant under the contract, it is difficult to see how the Appellant could remain "the owner" of the eight cars after such disposal, even though the vendors might be liable in damages for tort. 9. Mr. Chan relied upon a passage at the end of the judgment where the learned judge said:
From this it was argued that if the Appellant had been found to be the owner the judge would have granted the declaration No. 3A in the Originating Summons. I do not think the learned judge meant that. What he meant was that, the objection raised under reg. 17(2) having been shown to be unfounded, if the Commissioner had gone on to consider the applications and had given as his only ground for refusing them under reg. 17(1) that the Applicant was not the owner, then had the Applicant been shown to be the owner he would have granted this declaration. In those circumstances, had the Commissioner done what in law he ought to have done, the Appellant would have been the registered owner of twenty public cars and the judge would have deemed her to be the owner for the purposes of s. 4A. In the event he was not persuaded that the Commissioner ought to have registered and licensed these vehicles as public cars - only that the Commissioner ought to have considered the applications. On the contrary, he was of opinion that had the applications been considered they must have been refused on the ground that the Appellant was not the owner. As I have already said, even if this last opinion had been wrong it would not have undermined his conclusion on the main issue. 10. I would dismiss the appeal. 18th July 1979.
----------------- Coram: Huggins, J.A., McMullin & Yang JJ. Date of Judgment: 18 July 1979 ----------------- JUDGMENT ----------------- McMullin, J.: 11. The appellant applied to the Commissioner for Transport on 16th December 1975 for registration of twenty new vehicles as public cars. Two days later the Commissioner rejected all these applications. Since ownership was not then in doubt he felt himself obliged by regulation 17F of the Road Traffic (Registration and Licensing of Vehicles) Regulations to give his reason for doing so. It was based upon the upper limit fixed by the Commissioner in regard to the numbers of vehicles which could be so registered. In coming to his decision that that limit had already been reached the Commissioner had regard to certain considerations which were invalid. This point had been established in a similar case decided by myself in June 1977. No doubt it was as a result of that decision that the present appellant sought to pursue her claim which she did by means of originating summons which was heard by Cons, J. in chambers on 7th June 1978. At that hearing counsel for the Commissioner did not dispute the invalidity of the reason given for rejecting the applications but argued that the Commissioner would in any event have been obliged to reject them since, at the date when the applications were made, the appellant - so it was contended - was not in fact the owner of the vehicles concerned. The significance of that submission - assuming it to be correct - is to be found in the wording of Regulation 4 which is in the following terms:
The learned judge in chambers considered the terms of the contract dated 6th December 1975 between the appellant and the firm which had engaged to sell the vehicles to her, Messrs. Honest Motors Ltd. There is no doubt that it is a contract to sell ascertained motor vehicles at a certain price per unit. However, its terms include three "Remarks". The second of which is as follows:
Licensing of the vehicles could, of course, only follow upon their registration. Since the applications were not submitted to the Commissioner until the 16th of December the time thus limited in the contract for licensing had passed. The learned judge accepted the argument of counsel for the Commissioner. He said:
He regarded the second "remark" as imposing a condition which until fulfilled, gave the purchaser a binding contractual right to ownership which however would lapse if the condition were not fulfilled within the time appointed - as had occurred in the case before him. He declined therefore to give any of the declarations sought save a bare declaration that the Commissioner had been wrong in refusing to consider the appellant's application in 1975. Counsel before him had conceded that where the Commissioner gives a reason for refusal to register he is bound to that reason and is not at liberty when it is challenged in court proceedings to put forward some entirely different reason. There was, therefore, as the judge remarked, an appearance of illogicality in contending nevertheless that there was a good reason - lack of ownership - to justify the Commissioner's refusal. I think it was a matter of appearance only and Cons J. himself, in accepting the argument, disposes of the matter in a way which leaves the logic of the position intact. On page 4 he says: "Regulation 4 ownership is a definite condition of registration". In other words, as distinct from more elastic criteria such as want of road worthiness of the vehicle or of financial ability of the applicant or the like, which the Commissioner may advance under Regulation 17(1) as reasons for refusing registration, ownership is in the nature of a pre-condition in the absence of satisfactory proof of which the Commissioner is not entitled to effect registration. Since the vehicles originally the subject of the applications in 1975 were at the date of the hearing in chambers long since disposed of elsewhere, the learned judge declined to make orders in favour of the applicant which, as he put it, would '"give her something now to which she was not entitled when she originally asked for it" i.e. by purchasing twenty vehicles outright and presenting them for registration. Clearly "that was right, on the view he had taken as to ownership, since the second declaration asked for was to the effect that the appellant was entitled to have twenty vehicles registered and licensed as public cars "pursuant to her application dated 10th of December". 12. Upon this appeal Mr. Chan, for the appellant, contends that the judge in chambers erred in finding that the appellant was not the owner of the twenty vehicles at the relevant time. He relies primarily on section 19 of the Sale of Goods Ordinance on the question of the passing of property, especially as illustrated by the provisions of the first rule in that section. He maintains that this contract was unconditional in the sense expounded at par. 304 in Benjamin on Sale, that is to say Remark 2 should not be regarded as creating a condition suspensive of the passing of property. It was, he maintains, the intention of both parties that the contract should become immediately effective on licensing and registration of the vehicles and that could not occur unless the appellant, applying under regulation 4, could present herself as the owner of the vehicles. Therefore they must, he says, have intended that the property should pass at once subject to its re-vesting in the seller should licensing not be accomplished within the stipulated time, and subject to the seller exercising its option to dispose of the vehicles elsewhere. He pointed out that of the twenty vehicles twelve had not been thus disposed of until after the 17th of December the date on which the applications were actually seen by the Commissioner. As to those he says that it is clear that Messrs. Honest Motors Ltd. had not exercised their option so that on the day the applications were seen the property in the cars was still in the appellant. He concedes that the position is not so clear as regards the other eight. Seven had been sold to other purchasers by the 12th of December and he challenges the propriety of these sales since the time for licensing still had one day to run and he says that such sales cannot therefore have been pursuant to any legitimate exercise of the option. The remaining car was sold on 15th December. His demonstration that this should be regarded as being in the same category as the other seven was unconvincing and I do not propose to say anything more about it. 13. It is convenient to note at this point that in the course of the argument Mr. Chan - being apprised by counsel for the Commissioner of the fact - drew our attention to an alteration of the law made - so it is said - as a result of the decision in the Leung Chow Public Car Co. case(1). The new section - section 4A(6) was introduced after the judgment of Cons J. in 1978 and it removes the Commissioner's power to register or license public cars with effect from 1st of November 1977. Counsel concedes that he cannot now claim the second and third declarations refused by Cons J. but asks us to grant that sought in the alternative 3A in the originating summons which is in the following terms:
Section 4A in effect gives the registered owner of a public car the right to have that car registered as a taxi on terms which are financially much more favourable than those available to new applicants for taxi registration. The point at issue remains the same. If, contrary to the learned judge's opinion, his client was entitled as owner to the second and third declarations at the time when the matter was argued before Cons, J. she is, counsel says, now entitled to the 3A declaration, that is to say, she is entitled to have twenty taxis licensed and registered by a notional conversion now of the vehicles which ought to have been licensed and registered in 1975. The judge in chambers was himself prepared to grant this declaration "if it had been appropriate". I confess that I originally understood this to mean (as also, I think, did counsel on both sides at the appeal) that if it had not been for the point of ownership he would have declared the appellant entitled to the registration of twenty taxis. I have since had the advantage of considering the judgment just now delivered by the learned President and I concede that his more subtle interpretation of those words may well be the correct one. Nevertheless, if, before Cons J., the point as to ownership had gone the other way then, I think, the appellant must have been granted at least the order sought in paragraph 3 of the summons i.e. to have twenty applications entertained, and it may be that had she obtained that order and submitted such applications they would have been granted. I say that despite the fact that, as we were told, the policy of the department by then was to phase out such public cars. Notwithstanding such a policy it would have been difficult for the Commissioner, in view of what had gone before, to refuse such applications if they were otherwise in order and the applicant and her vehicles were found fitting. But, in the event, the court said that she was not the owner. Challenging that ruling, she stands now before this court as one who would say:
So might her case be put and if we were now to uphold her on the question of ownership I myself am far from sure that we ought not to apply the equitable maxim resorted to by Cons, J. by assuming everything in her favour which she asks to be assumed and to hold that it is now too late for the Commissioner to say that there may have been other reasons which would have justified his refusing the original applications in 1975. In that event it might then be the just course to give her what she seeks under paragraph 3A of the summons - which is now the kernel of her case - by way of such a notional exchange as I have referred to earlier. In substance that would mean that, provided she had the necessary vehicles and her applications were otherwise in order, she would obtain what Mr. Sinclair referred to as "taxis at a cut price rate". Ultimately, the question of ownership, as it seems to me, remains the central point at issue as it was before the learned judge below and it is upon that point that I prefer to rest my own judgment in this matter. 14. Mr. Chan's argument was ingenious and attractive. What is more I would think it entitled to succeed if we were bound exclusively to considerations of ownership as they are dealt with in sections 19 and 20 of the Sale of Goods Ordinance. If, that is to say, we were bound to hold that the aspiring licensee must be in the full sense the owner of the vehicles before the Commissioner is entitled to license it. In that event I should have felt impelled to say that, to give effect to the obvious intentions of the contracting parties and not to cause their intentions to fail through the language chosen by the legislature, they must have intended the property to pass at once to the purchaser and to revert to the seller, if he chose to resume, on the condition as to licensing not being fulfilled. For if owner means in regulation 4 one to whom the full property has passed within the sense of the sale of goods legislation then no one applying under such a contract as this could ever be registered. Yet a condition of the kind we are now considering is clearly desirable in any such contract, for the buyer who is, for any valid reason, refused registration will not wish to be compelled to take delivery of a vehicle the whole value to him of which depended on its being registered and licensed in the desired category. He does not wish to become the owner unless he can be registered and licensed; he cannot be registered and licensed until he becomes the owner. The answer to this dilemma must be, I think, that the Commissioner, in considering such applications, is neither obliged to nor entitled to enter into considerations as to whether the property has passed and the right to full ownership has solidified. If the documents presented to him show a present right to ownership and are otherwise in order that is all he need know on that score. This was what I had in mind when in Leung Chow Public Car Co. v. Attorney General(1) I used, in relation to a very similar contract, the words quoted by Cons, J. in his judgment in the present case. In the end, and in agreement with the learned President, I have come to the view that I am not impelled to hold that the intention of the parties must have been that the property should pass at once; the condition imposed did suspend the passing of property but that in itself would not have defeated the right to registration since a present right to ownership was shown on the face of the contract and would have been sufficient to ground the applications if they had been submitted within the time stipulated. Section 2 of the Road Traffic Ordinance defines the word "owner" so as to include persons who do not have the full property in a vehicle; section 2 of the Sale of Goods Ordinance defines "property" so as to restrict it to full ownership by excluding from it, for the purposes of the Ordinance, any kind of special property in goods. This is sufficient to dispose of any suggestion that the Commissioner is concerned to establish that an applicant for registration and licensing is the owner of the vehicle within the sense of the Sale of Goods Ordinance. The judge in chambers himself had, I think, this distinction in mind and was satisfied that ownership in something less than the full sense need only be shown to support an application to the Commissioner. Dealing with the condition imposed by "Remark 2" in the contract he said:
I am in full agreement with what he said in that passage. That right to ownership, which had persisted through the seven days from the 6th December, had lapsed by the date on which the applications reached the Commissioner. In the circumstances the Commissioner was not entitled on the day on which he saw the applications to register any of the vehicles since the appellant was not the "owner" within the meaning of regulation 4 on that date. The fact that eight of them had actually been disposed of by the seller by that date may raise a question of actionable wrong between vendor and purchaser but I do not think it is relevant to the considerations as to ownership apparent on the documents presented to him which would on the 17th of December have justified the Commissioner in rejecting the applications as they then stood. The fact that he was not then aware of this disabling factor and did not purport to rely on it does not matter. Ownership - in the restricted sense I have indicated - was a pre-requisite for a valid application. It was for the appellant to show it then and it remained to be shown before Cons, J. and before this court and the defendants have failed to do so. For these reasons I would dismiss the appeal. Representation: Edward Chan, instructed by (Cheng & Lam) for appellant. Sinclair, C.C. for respondent.
----------------- Coram: Huggins, J.A., McMullin and Yang, JJ. Date of Judgment: 18 July 1979 ----------------- JUDGMENT ----------------- Yang, J.: 15. I have had the advantage of reading the judgments of my learned brethren. I concur with the reasons given and the conclusions reached in my Lord President's judgment and have nothing that I can usefully add. I would also dismiss the appeal. Representation: E. Chan (Cheng & Lam ) for Appellant. Sinclair, Crown Counsel, for Respondent. (1) Miscellaneous Proceedings No. 749 of 1976. |