Leung Chow Public Car Co (A Firm) v. Attorney General
Read the full judgment text of CACV 69/1980 on BabelCite. This Court of Appeal judgment.
1. We gave our decision in this matter at the close of the arguments and indicated that we would reduce our reasons to writing. We do so now.
|
CACV000069/1980 Whether Commissioner for Transport correctly exercised his discretion in reducing the limit imposed on the registration of public cars - what kind of ownership is necessary to support an application for registration of a vehicle - whether damages are recoverable, in the absence of malice, for the failure of an official to perform a statutory duty.
----------------- Coram: Sir Alan Huggins, V.-P., Leonard and Cons, JJ.A. Date of Judgment: 20th February, 1981. ----------------- JUDGMENT ----------------- Cons, J.A.: 1. We gave our decision in this matter at the close of the arguments and indicated that we would reduce our reasons to writing. We do so now. 2. No motor vehicle may be used on a road unless it is first registered and licensed by the Commissioner for Transport. For these purposes, and others, motor vehicles are divided by the Road Traffic Ordinance (section 2(2)) into various classes. One of those classes is "public cars", which are broadly speaking cars intended for private hire. In practice the class is extinct, for section 4A(6) declared that the Commissioner's power to register or license such vehicles ceased as from 1st November 1977. 3. In 1975 the class was flourishing. There were well over one thousand cars doing good business on the roads. They carried red licence plates and were familiarly known as "hung pais" in distinction from the even more flourishing "pak pais", which are still with us. However, from the official point of view public cars were not a success. Too frequently they operated illegally as pirate taxis. It was decided to phase them out. We use the impersonal deliberately for reasons which will appear later. 4. The phasing out was achieved by offering registered owners the chance to convert their public cars into taxis proper upon payment to the Crown of a premium which was extremely modest in comparison with premia then being tendered by prospective taxi owners whenever there was an increase in the overall number of taxis permitted to be registered. If the owners did not take advantage of that offer the registrations were extinguished at the end of the current licence period. 5. All that, however, did not take place until late in 1977. In the mean time the Commissioner acted as far as he himself could to ensure that no more public cars would come no to the roads. On 5th December 1975 he imposed a limit upon the number that could be registered (GN 2670). He was entitled to do that by a Regulation 188, which has since been repealed. He set the limit at 1,388, the number of public cars already registered and licensed plus 95 "committed vacancies". These related to applications to register which the Commissioner had approved in principle but were not yet complete. To register and license a public car was not a simple matter. The Commissioner had first to be satisfied of many things including, for example, the business reputation and financial resources of the applicant and the sufficiency of parking and maintenance facilities for the car. It was usual and sensible to get these matters out of the way by informal application before the actual vehicle was purchased or the formal application submitted. The Commissioner thought at the time that he was obliged to honour the approvals which he had already so given. 6. The present Appellant did not share the Commissioner's view. On 15th July 1976, through his solicitors, he submitted 47 formal applications together with the appropriate fees and documentary evidence relating to the matters upon which the Commissioner had to be satisfied. The covering letter added that the solicitors were instructed to take legal proceedings without further notice if the Commissioner should reject the applications. Even so, the Commissioner did reject them, giving as his reason that the number of public cars registered had already reached the prescribed limit. That was, of course, true only if the committed vacancies were included in the count. 7. The Appellant took out his threatened proceedings in the December. They came on for hearing on 6th July 1977. He was successful. Indeed, at that stage the Crown no longer resisted and McMullin, J., as he then was, gave a declaration that the Commissioner had been wrong to take into account the so-called "committed vacancies". The Crown no longer resisted at that stage because the same judge had disposed of precisely the same issue only a few days earlier in another action, also brought by the present Appellant, but in relation to public light buses. Judgment had been reserved and was delivered on 30th June (M.P. 749 of 1977 (unreported)). 8. One result of that judgment was the immediate reduction by the Commissioner of the number of public cars permitted to be registered (GN(E) 15 of 77). Apart from two vehicles with which we are not concerned, the Commissioner set the new limit at 47 above the number actually registered. He deliberately reserved 47 "vacancies" in case the Appellant should obtain a further declaration which the Appellant was still seeking in the proceedings yet to be dealt with on 6th July, namely, that the Appellant was entitled to have registered the 47 specific vehicles covered by his applications made the previous year. In the event the Appellant abandoned that relief, because the car sales company had long before then disposed of those vehicles to another customer, and the judge made the declaration we have already indicated. Thereupon the Commissioner again reduced the limit of permitted vehicles (GN(E) 16 of 77). Thus, as from 7th July 1977, the day the Commissioner's notice was published in the Gazette, there were no "vacancies" at all. 9. The judge had also given the Appellant another declaration on 6th July - that he was "entitled to have application for registration of 47 vehicles as public cars entertained" by the Commissioner. It has been suggested before us that in some way that declaration put the Appellant in a better position than other persons who might have though fit to apply for registration. We do not agree. If, as the Appellant contends, that last reduction of the limit was ultra vires and void, the Commissioner would have been duty bound to consider all applications submitted and, if appropriately satisfied, to register vehicles up to the limit properly in force, making his decision between the various applicants, if necessary, by ballot. 10. In fact, there were two other applications, each for 50 vehicles. The Appellant lodged his application, for 47, on 15th July. The others were lodged before him, on 6th and 7th July. It is possible that they may not have succeeded on their merits, but they were ultimately rejected on 12th July on the ground that "the number of motor vehicles actually registered as public cars is equal to the total number of motor vehicles that may be registered". The Appellant's applications were rejected on 14th in precisely the same words. He challenged that rejection in proceedings which came on before Liu, J. This time he was not successful. The judge refused to make any declaration in his favour or to award damages. He now appeals against that refusal. His argument rests entirely upon the one contention that the reduction of the limit on 7th July was ultra vires the power of the Commissioner and void. 11. In opening his argument for the Appellant Mr. Martin Lee relied heavily on comments made obiter by this court in Attorney General v Wong Kwong-shing Civil Appeal 58 of 1975 (unreported). They indicate, he suggests, that the Commissioner's power, given by Regulation 188, to impose a limit on the number of public cars and other public vehicles is derived from the power, given by Regulation 17(1), to refuse registration of any motor vehicle
Therefore, the power could only be exercised for one or other of those purposes. 12. With respect we find nothing in this point. Regulation 188, like all delegated legislation, derives its authority directly from the principal legislation, in this case section 4(1)(j) of the Road Traffic Ordinance, now repealed, but in force in 1977. Their Lordships were in that case not called upon to consider the purposes for which Regulation 188 had then been invoked and we do not think that they intended to do anything more than to comment upon the close relationship of the two regulations, for the imposition of a limit upon any class of vehicles is ipso facto regulation of vehicular traffic in the Colony. 13. Counsel puts his main argument in two ways. Firstly, he says that the Commissioner's act was not a true exercise of discretion in that the Commissioner, - then one Mr. Leeds acting as such on behalf of the substantive holder of the office, - allowed himself to be dictated to by "Government" rather than exercise his discretion independently in accordance with the expressed desire of the Legislature that there should be public cars upon the roads. If the facts support this argument it clearly must succeed. For however much a Commissioner may wish to shelter behind what he describes as Government policy he cannot escape the individual responsibility that is placed upon him directly by the legislation. However, the facts do not support the argument. Taken as a whole the evidence shows that the "policy" which Mr. Leeds enforced was a policy formed by the Commissioner himself, albeit in consultation with the Traffic Advisory Committee, and which was implemented well before the Executive Council made any decision in the matter. Furthermore by the time the actual notice was published on 7th July the Legislature as well had indicated its agreement. Ordinance 45 of 1977, which enacted the system of phasing out that we have mentioned earlier, was passed on16th June. Although it was not to come into effect until such date as the Governor should appoint, we do not accept that it was suspended in the sense that counsel suggests, namely, that it was to be ignored until that date. Its intent was clear - public cars as a class were to cease. That is confirmed by the explanatory memorandum attached to the Bill put before Legislative Council. 14. Counsel's second line of attack is that the Commissioner's act was taken deliberately and specifically to thwart the expectations of the Appellant naturally consequent upon the success of his previous action. Again, if the facts show that to be the position the argument would succeed. In Ng Kee v Attorney General 1977 H.K.L.R. 587 at p.592 Pickering, J.A. would not accept that the Commissioner could, by the exercise of discretionary power "stultify the plaintiff's legitimate remedy and the process of the Court". De Smith, in the 4th edition of Judicial Review of Administrative Action at p.328, refers to Commonwealth authority that the exercise of a power directed "ad hominem" would be invalid. 15. Yat again the facts are against the Appellant. The allegation is inseparable from the allegation of malice and the judge expressly found that at no time was Mr. Leeds actuated by malice. 16. Nor are we persuaded there is any reason to dissent from that finding. Quite apart from demeanour, which must have played an important part in the judge's conclusion, the circumstances do not to our mind indicate any personal vendetta against the Appellant. It is obvious that from December 1975 onwards the Commissioner wished to prevent any increase in the number of public cars upon the roads. As first the moral, and then the possibly legal restraints on his policy were removed, he took steps to see that it was enforced. The result did in fact thwart the Appellant's personal aspirations. It does not necessarily follow that that was the deliberate and dominant intent of the Commissioner. 17. Nor are we prepared to assume malice from the fact that the Commissioner did not adopt a similar course in relation to the Appellant's parallel action with regard to public light buses: M.P. 749 of 1976. There may have been many good reasons for that. The question was not explored in his evidence. 18. It was argued that the learned trial judge was wrong to rely, when assessing the evidence of Mr. Leeds, upon the fact that Mr. Leeds acted throughout on legal advice, for the fact of advice had not been pleaded in the Amended Defence. We were referred to the 1979 Supreme Court Practice, Note 18/7/5 at p.269, where reference is made to he case of Davie v New Merton Board Mills, Ltd. 1956 1 All E.R. 379. That was an action in negligence for personal injury to a worker. The defence amounted to a total traverse. It was then sought to introduce evidence that the defective tool, which caused the injury, had been purchased by the defendants from a reputable manufacturer and that they had no reason to suspect that it was in fact defective. The court held that to be a ground of defence which "if not raised would be likely to take the opposite party by surprise", as in fact it did, and ought therefore to have been pleaded. But, as counsel for the plaintiff in that case pointed out, what was sought to be proved was more in the nature of a confession and avoidance. We do not think the case assists. In our view the taking of legal advice was, in the instant circumstances, a matter of evidence only and was correctly not pleaded. 19. These conclusions are sufficient to dispose of the appeal. But in deference to the argument of counsel, and in case we should be wrong, we turn to two other matters. 20. The first is the question of ownership. What kind of ownership is necessary to support an application under Regulation 4, which provides that "any person who wishes to register a motor vehicle, of which he is the owner, shall etc. etc."? The Respondent took the point at the trial that the Appellant did not have sufficient ownership in the vehicles profferred in either 1976 or 1977. 21. The Appellant contends that it is not necessary for an applicant to have the property in the vehicles at the time of the application to the Commissioner; it is sufficient if he has the right to obtain that property at the time of the actual registration. This was a contention that found favour at first instance in the Appellant's action in regard to the public light buses: M.P. 749 of 1976 (unreported), in Ho Choi Yim-fong v Attorney General M.P. 775 of 1977 (unreported) and in the judgment of McMullin, J. in the same case on appeal: Civil Appeal 69 of 1978 (unreported). On the other hand, Huggins, J.A., with whose reasons Yang, J. expressly concurred, rejected that contention and applied the strict test of whether the property was in the applicant at the time when the application was lodged. Although the appellant in that case would have lost in either event we cannot disregard such firm statements of the law. The point is no longer open. 22. The motor cars mentioned in each of the Appellant's applications were to be obtained from Honest Motors Ltd. Each time the Appellant executed an agreement for the purchase of the appropriate number of cars and to each agreement there was later added a supplement giving details of particular vehicles. The first supplement said that the specified vehicles were "available for delivery", but added that "the seller is entitled to be free to sell ...... to any other customer before buyer's taking delivery". The second supplement was in similar terms, but the seller was not to be entitled to sell elsewhere until on or after 20th July. The document is dated 9th July and the Appellant's application to the Commissioner was made on 11th. 23. It is obvious that no property passed in the first instance. Counsel seeks to distinguish the second by dividing the words into two parts: the first would comprise an unconditional appropriation to the contract of the cars mentioned, at least until 19th July; the Appellant could take advantage of this for it was in his favour - although we note there is no evidence that he ever did; the second part would amount to an exemption clause; but Honest Motors Ltd. could not take advantage of that because it had not been brought home sufficiently to or signed by the Appellant. 24. We are not prepared to accept this ingenious argument. In our view the property had not passed. 25. The second matter is the question of whether the Appellant could in any event recover damages. In Attorney General v No Kee 1978 H.K.L.R. 52 this court, differently constituted, held unanimously that no action in damages will lie against the Commissioner for loss caused by his ultra vires act in the absence of malice or knowledge on his part that he is so acting. 26. Counsel seeks first to distinguish that decision. He says that it was concerned with the exercise of a discretion whereas the present case involves failure to perform a statutory duty - "the Commissioner shall register" (Regulation 6(1)(a) as it then was). He relies upon de Smith at p.321
27. With respect there is no such distinction. The Commissioner ought to have renewed the licence in that case. He had a duty to do so, except for good reason. Ultimately it was found that he had no good reason. He had, therefore, failed properly to perform his duty. That was the basis of the plaintiff's action. 28. Then counsel says that the law has developed since that decision. Thornton v Kirklees Borough Council 1979 1 Q.B. 626 was decided by the Court of Appeal in February 1979. It was an interlocutory appeal, but the court, at the invitation of counsel, gave a firm decision on the law. It was a question of whether the failure of a local authority to make accommodation available in particular circumstances gave a right of damages to the person injured thereby. Section 3(4) of the Housing (Homeless Persons) Act 1977 provided:
29. The answer to the question lay in the true construction of the statute. The court referred, inter alia, to Professor Wade on Administrative Law, 4th edition, 1977 at p.632:
30. In the circumstances the court concluded that Parliament had intended to provide for an action in damages if the local authority should fail in its duties. 31. Reading as a whole the judgment of Megaw, L.J., with whose reasons Roskill, L.J. expressly agreed, it seems to us that the decision was based on two primary factors. Firstly, that the Act imposed a duty on the public authority for the benefit of a specific category of persons but prescribed no special remedy for breach of that duty. And, secondly, that the appellant had been particularly injured by that breach. 32. That was the way the argument had been put for the Plaintiff. And it was clear that he was well home on both points. It was not necessary to express the first in the wider form in which it was put by Denning, M.R., in the subsequent case of De Falco v Crawley Borough Council 1980 Q.B. 460 where three other members of the Court of Appeal were content to accept the decision of Thornton, Lord Denning in particular. At p.476 he said this:
33. It may be that Megaw, L.J. would have taken the same view, for he quoted (at p.639) the comments of Scrutton, L.J. in Gateshead Union Guardians v Durham County Council 1918 1 Ch. 146 at p.167:
And he referred, apparently with approval, to the argument of counsel (at p.638):
34. If this be the correct approach the Appellant in the present instance would seem to be in a favourable position. Regulation 17F requires the Commissioner to give the reasons for his refusal, and although we might be somewhat slow to adopt counsel's suggestion that the Appellant was a member of a class specifically designed to be protected by the statute - namely, worthy applicants for public car licences - he was undoubtedly an individual particularly injured by the Commissioner's refusal. He should then be able to claim damages in law bearing in mind, of course, the warning of Megaw, L.J. that it may not be easy to recover in fact:
35. Should we agree with this approach, are we nevertheless still free to adopt it? 36. With respect to counsel, courts do not "develop" law in the way in which he suggests. They merely discern and identify the path which the law has already trodden. If the going is difficult and the path so far but lightly trodden, it may not be easily distinguished and courts in different jurisdictions may come to different conclusions as to where its true course runs. 37. However, for our part, we have no alternative. We must follow the course indicated in Ng Kee. None of the exceptions set out in Young v Bristol Aeroplane Co., Ltd. 1944 K.B. 718 apply. 38. Two minor matters remain. It was argued that the Appellant should have mitigated his loss by tendering for taxi licences or by purchasing them from existing holders. The trial judge did not think that to be a reasonable demand. Nor do we. 39. It was also said that damages should not be assessed in full for there was no certainty that the Appellant would have succeeded in the ballot into which the Commissioner would probably have put the applications, that is the Appellant's application with the two other sets received also in July 1977. The trial judge did not deal with this aspect but we think it probable that had he done so he would have approached the matter numerically and assessed damages, as the Appellant's counsel conceded in the alternative, upon a basis of fifteen registrations. 40. For these reasons we dismissed the appeal. Representation: Martin Lee, Q.C. and K.H. Woo (K.Y. Woo & Co.) for the Appellant. Peter Scott, Q.C. and R.A. McCallough (Legal Department) for Respondent/Defendant. |