Winfat Enterprise (HK) Co Ltd v. Attorney General

CACV000076/1983

HEADNOTE

Proclamations made by Governor in 1899 do not have force of law.

Power of Hong Kong legislature to legislate for "peace, order and good government" of New Territories confers widest discretion.

Royal Instructions do not prohibit Hong Kong legislature from making Ordinances contrary to treaty obligations of Crown, though such Ordinances should be reserved.

If the Governor fails to reserve a law, in breach of Royal Instructions, this defect is cured by section 4 of the Colonial Laws Validity Act 1865.

Where land was held in perpetuity prior to 1899 the Crown may nevertheless properly impose restrictions on user of land in New Territories and grant leases thereof for a period less than 99 years.

BETWEEN:

Coram: Roberts, C. J., Cons & Fuad, JJ.A.

Date: November 10th, 11th, 14th, 15th, 16th, 17th and December 14th, 1983.

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JUDGMENT

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Roberts, C. J. -

Factual Background

1. The plaintiff is a real estate development company, which purchased the residue of the leasehold estate of various lots in the Yuen Long area of the New Territories.

2. These lots are held by the plaintiff, as successor in title to the original grantee, for a term which ends three days before the expiry in 1997 of the lease by China to Great Britain of the New Territories.

3. The original grant of the lease of the land was contained in a Block Crown Lease. This included a prohibition against the use of such land for building purposes, without the prior consent of the Crown.

4. It has long been established, as a matter of administrative practice, that the Block Crown Lease may be modified, so as to permit such user, on the payment by the lessee of a suitable premium.

5. On 30th November, 1977, the plaintiff submitted to the District Office, proposals for the development of its land for high class housing. For various reasons, which are not germane to this appeal, this application was refused. Thereafter, the plaintiff sublet part of its land for a period of three years, with the option of renewal for a further two years, to a firm which required space for the parking of vehicles. Permission to do so was obtained from the District Officer.

6. On 7th October, 1981, the Secretary for Lands and Works published Notice 3080 in the Government Gazette, giving notice that the Governor had ordered the resumption of part of the plaintiff's land, under the Crown Lands Resumption Ordinance, for temporary housing, the Governor-in-Council having decided that the land was required for a public purpose.

7. The area to be resumed comprised the majority of the plaintiff's land (''the resumed land"), leaving a part unresumed ("the severed land").

8. By a letter dated 26th November, 1981, the Secretary for the New Territories offered to the plaintiff cash compensation of $15,299,620 (or 50% of the rate for agricultural land acquired in an urban area in the New Territories) for the resumed land.

9. This offer was subject to the plaintiff surrendering the resumed land free from all encumbrances; a condition which it was unable to meet by reason of the sub-lease referred to above.

10. The Crown having resumed under the Crown Lands Resumption Ordinance, the plaintiff was left with his remedy thereunder, which was to submit a claim for compensation for the resumed land. It is not disputed that the amount which can be obtained by a claimant under that Ordinance is likely to be significantly less than the price which might be obtained for the sale of such land in the open market.

11. This is because a buyer in the open market would be prepared to pay a price which takes into account the possibility of obtaining a modification of the Crown Lease so as to permit building on the land, whereas section 2 of the Crown Lands Resumption Ordinance obliges the Tribunal in its assessment of compensation, "to discount any evidence which shows that the land values have been enhanced by expectation of redevelopment or of a modification of lease conditions".

12. It is against this background that the plaintiff issued an originating summons on 1st June, 1982. This was amended on 18th March, 1983 and further amended by leave during the hearing before us such amendments being underlined. The plaintiff seeks the following ten declarations -

Legislative History (General)

13. On 9th June, 1898, a Convention was signed between the Governments of Great Britain and China ("the Peking Convention") with the object of extending the area of the territory of Hong Kong. "The material parts of that Convention are as follows -

"No.14

CONVENTION FOR THE EXTENSION OF HONG KONG

(Received in Colonial Office, August 6, l898.)

14. On 20th October, 1898, the Queen-in-Council,  in the exercise of her prerogative power, the validity of which has not been challenged, enacted an Order in-Council, ("the New Territories Order-in-Council") in the following terms -

"At the Court at Balmoral, the 20th day of October,

1898

PRESENT:

The Queen's Most Excellent Majesty in Council.

15. On 6th January, 1899, the Secretary of State addressed the Governor in a despatch as to the manner in which jurisdiction in the New Territories should be assumed by the Crown. The despatch contains, among many other matters, a direction to the Governor to publish the new Territories Order-in-Council as soon as possible and emphasizes the need to deal with the land question promptly.

16. The Governor issued two Proclamations, on which heavy reliance has been placed by the plaintiff, on 9th April and 12th July. The material parts of the English version of these Proclamations are as follows -

17. [Proclamation of 9th April.]

1. Name of owner.

2. Nature of title.

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

4. Number of years in occupation.

5. Description of land.

6. Dimensions of land.

7. Situation of land.

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

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

18. The latter Proclamation also sets out the Crown rent which will be payable. These provisions as to rent are the same as those contained in Rules made by the Governor-in-Council on the same date as this Proclamation, under the New Territories Regulation Ordinance (No.2 of 1899) which came into force on 18th April, 1899.

19. On 8th April, 1899, the Governor, in pursuance of the New Territories Order-in-Council, had issued the following Proclamation -

Legislative History (Land)

20. By the Land Court (New Territories) Ordinance, 1900, (No.8 of 1900) which came into force on 28th March, 1900, provision was made for the establishment of a Land Court, for the settlement of land claims in the New Territories. The material sections are the following -

21. This Ordinance, after assent by the Governor, was forwarded to the Secretary of State, who directed that it be repealed and re-enacted with various amendments. The replacement Ordinance, the New Territories Land Court Ordinance (No.18 of 1900) came into force on 23rd July, 1900. The sections of Ordinance No.8 of 1900, quoted above, were reproduced in Ordinance No. 18 of 1900 without alteration.

22. At the date of the assumption of jurisdiction by the Crown, on 1st July, 1898, resumption of land for public purposes in the territory was governed by the Crown Lands Resumption Ordinance 1889 (No.23 of 1889), the material parts of which read -

23. By the Crown Lands Resumption Ordinance 1899, (No.30 of 1899) Ordinance No.23 of 1889 was extended, in its application, to the New Territories as from 24th October, 1899.

24. The Crown Lands Resumption Ordinance (No.32 of 1900) repealed and replaced the earlier Ordinance, without alteration of the sections quoted above.

25. Section 14 of the New Territories Regulation Ordinance 1910 (No.34 of 1910) dealt with the vesting of land in the New Territories in these terms-

"14.  All land in the New Territories is hereby declared to be and to have been from the commencement of the New Territories (Land Court) Ordinance, 1900, the property of the Crown, and all persons in occupation of any such land after the commencement of this Ordinance shall be deemed to be trespassers as against the Crown, unless such occupation is authorised by grant from the Crown, or by other title allowed under this Ordinance, or by licence from the Governor or from some Government officer having authority to grant such licence."

26. This section has since been amended and appears today as Section 8 of the New Territories Ordinance (Cap. 97) -

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

27. By the Crown Lands Resumption (Amendment) Ordinance 1921 (No.11 of 1921) which came into force on 2nd September, 1921, additional rules were introduced for the assessment of compensation -

"2.    In the determination of the compensation to be paid under the principal Ordinance:-

28. Further amendments to the compensation provisions were made by the Crown Lands Resumption Ordinance, 1922, which came into force on 24th March, 1922. The new section 2, replacing that of Ordinance No.11 of 1921, reads -

"2.    In the determination of the compensation to be paid under the principal Ordinance:-

29. Section 12 of the current Crown Lands Resumption Ordinance (Cap. 124) contains the 1922 provisions, unaltered.

The Plaintiff's case in outline

30. Kempster, J. came to the conclusion that the plaintiff's predecessors in title had held the land on the basis of common tenure before 1st July, 1898, the date from which the New Territories became part of Hong Kong. He also found that it was incident to such a tenure that these predecessors might have used the land for any purpose, without restriction as to user. He accordingly granted the first declaration sought.

31. These findings have not been challenged and seem to us to be justified on the basis of the affidavit of Mr. Dicks, which is referred to in the judgment of the trial judge.

32. The judge also granted, with his own modification, the tenth declaration sought, which was to the general effect that, but for the resumption, the plaintiff would have been entitled to use the land for any purpose other than for "building purposes". This finding has not been challenged either.

33. Before the plaintiff can succeed in obtaining the other declarations which it seeks, it must surmount a number of formidable obstacles, which involve a consideration of fundamental questions affecting the legality of the land law enacted by the Legislature of Hong Kong as applicable to the New Territories.

34. The foundation of the plaintiff's arguments is the following clause in the Peking Convention("the no-expropriation clause'') -

"It is further understood that there will be no expropriation or expulsion of the inhabitants of the district included within the extension, and that if land is required for public offices, fortifications, or the like official purposes, it shall be bought at a fair price."

35. Although the plaintiff conceded that the Peking Convention is not in itself enforceable as part of the domestic law of Hong Kong, it argued that the no-expropriation clause was imported into the constitutional law of Hong Kong, so as to take precedence over any local Ordinances inconsistent with its terms and to be unalterable by them.

36. In order to succeed, the plaintiff concedes that it must establish the following propositions -

37. We will consider each of these principal submissions in turn, insofar as this proves to be necessary. Though, as will be seen, an examination of some of them depends upon our finding on others and we shall, in this difficult and delicate area, resist as best we can the temptation to express views on any matter unless this is necessary to our decision on the declarations sought.

The Proclamations

38. The plaintiff accepted that a treaty is an act of state which cannot be enforced by the courts, unless it has been recognized or adopted as part of the municipal law.

39. However, it was submitted that the clause in the Peking Convention which dealt with expropriation and fair price was so recognized and adopted by virtue of two Proclamations dated 9th April and 12th July, 1899.

40. We have had before us the two Proclamations as published in English and the original Chinese text, with a certified English translation, of the Proclamation of 9th April, 1899.   The Chinese text of the later Proclamation has not been found.

41. Laws in Hong Kong have always been promulgated in the English language. Insofar as it can be argued that these Proclamations had legislative effect, it is the English version, as published in the Gazette, which should be followed.

42. The plaintiff drew our attention, in relation to the first Proclamation, to two passages, emphasizing the parts underlined -

43. The second Proclamation, dated 12th July, 1899 contains instructions as to how claimants to interests in land in the New Territories should advance their claims. At the end of this Proclamation occurs the phrase "when the survey has been completed permanent certificates of titles will be issued."

44. If the two Proclamations are to be regarded as part of the domestic law of Hong Kong, it must be shown that the Governor,  in issuing them, was exercising a power to legislate which had been conferred upon him by law, since the Governor of a ceded territory, and it is not in dispute that Hong Kong can be so described, has no inherent power to legislate. His power to do so can only be that which has been conferred upon him by the Crown, as the fount of all legislative power within a ceded territory.

45. The internal evidence of the Proclamations themselves certainly indicates that they were not intended to have the force of law, but were meant to give to the inhabitants of the New Territories due warning of the Government's intentions.

46. The Proclamations contain no reference to any authority for their issue.  This omission, if not conclusive by itself, is at least highly unusual since Hong Kong laws invariably refer in their preamble to the legal authority for the enactment.

47. It should be noted that important parts of the second Proclamation were reproduced in Rules made by the Governor-in-Council on the same date (12th July) as the Proclamation, under the New Territories Regulation Ordinance, surely an unnecessary duplication if the Proclamation itself had the force of law.

48. Much of the wording of these Proclamations is wholly inappropriate to a legislative instrument. For example, the wish of Her Majesty that her subjects should be happy or an exhortation to people "not to be disobedient" are odd sentiments to be found in a law.

49. We would have been inclined therefore to find that the Proclamations were never intended to be legislative instruments, from an examination of their terms alone. The same conclusion is reached by an examination of the possible sources of the Governor's power to legislate in such a manner.

50. His primary source of legislative power was derived from Article IX of the Hong Kong Letters Patent, issued on 19th January, 1888. Article IX is still in force in identical terms -

"IX. The Governor, by and with the advice and consent of the Legislative Council, may make laws for the peace, order and good government of the colony."

51. It is not argued, and indeed the form of the Proclamation makes it unarguable, that the Proclamations were made by the Governor, with the advice and consent of the Legislative Council.

52. Article XI of the Letters Patent states-

"We do also reserve to Ourselves, Our Heirs and Successors, Our and Their undoubted right, with the advice of Our or Their Privy Council, to make all such laws as may appear necessary for the peace, order, and good government of the Colony."

53. This Article clearly reserves to the Queen-in-Council power to make prerogative Orders in Council. It does not reserve to her power to make laws for the territory, whether described as 'Proclamations' or otherwise, in her capacity of Sovereign sole, outside her Privy Council.

54. It was, however, not suggested by the plaintiff that this power of the Queen-in-Council could have been the source of power of the Proclamations. It might well be that the retention of the Prerogative power contained in this Article was meant to be exclusive and that if the Queen intended also to retain her Prerogative sole, she would have said so. We think this argument attractive, though it was not urged upon us by the defendant.

55. The plaintiff could not, in view of the background to the Proclamations and their terms, maintain that they were an exercise of the powers of the Queen-in-Council. He thus had to submit that there was a residuary power in the Sovereign sole to issue by virtue of the Royal Prerogative, legislative instruments having the effect of law within the territory.

56. To establish this proposition, we were invited to extend the principle, enunciated in a line of cases, which stems from Campbell v. Hall⁽¹⁾ that the Crown has no further power to legislate in a Colony which has been granted a representative assembly, that is to say one which has an elective element unless such power is specially reserved.

57. Inherent in these decisions, it is said, is the assumption that the Crown does retain such a power in territories which do not possess such an assembly.

58. Although the point does not seem to have been decided directly, it appears to have been widely accepted by academic writers that the Crown does not lose its prerogative power in a territory which does not possess a representative assembly, and the defendant invited us to find that the principle of Campbell v. Hall⁽¹⁾ should also apply to Hong Kong, which possesses its own legislature, though this is not elective in nature.

59. We have not found it necessary to form any view as to this, because we are satisfied that, even if the Queen does retain a prerogative power to legislate herself, outside her Privy Council, she did not purport to exercise any such power in the case of these Proclamations, which in our opinion cannot possibly be regarded as emanating from her.

60. Assuming that it would be open to the Queen, in exercise of such a residuary prerogative power, to direct the Governor to issue as her delegate Proclamations of this kind, there is no indication whatsoever in any of the material put before us that any such direction was issued.

61. The instructions of the Secretary of State, which were available to us, contain no such reference. Nowhere does the Secretary of State suggest that the Queen has authorized the Governor to issue Proclamations on her behalf. Indeed, the Secretary of State does not mention the word "Proclamation". Nor does he order the Governor to issue any special form of instrument or to enact any law by such a method.

Breach of Peking Convention

62. This Convention, the English version of which is reproduced above in full, was expressed to come into force on 1st July, 1898.

63. As has been seen the paragraph on which the plaintiff relies reads -

"It is further understood that there will be no expropriation or expulsion of the inhabitants of the district included within the extension, and that if land is required for public offices, fortifications, or the like offices purposes, it shall be bought at a fair price."

64. The plaintiff argues that the Convention has been broken in the following important respects -

65. Assuming that the plaintiff were able to establish one or more of these breaches, it would still have to show that it, or its predecessors in title, had conferred upon them thereby rights which are enforceable in law in the courts.

66. On the authority of Vajesingji Joravarsingji & Others v. Secretary of State of India ⁽²⁾ where a Sovereign State acquires territory by conquest or cession, an inhabitant of that territory can enforce in the municipal courts only such proprietary rights as the Sovereign  has conferred or recognized.

67. As Lord Dunedin, delivering the judgment of the Privy Council said, at page 360 -

"Any inhabitant of the territory can make good in the municipal Courts established by the new sovereign only such rights as that sovereign has, through his officers, recognized. Such rights as he had under the rule of predecessors avail him nothing. Nay more, even if in a treaty of cession it is stipulated that certain inhabitants should enjoy certain rights, that does not give a title to those inhabitants to enforce these stipulations in the municipal Courts. The right to enforce remains only with the high contracting parties. This is made quite clear by Lord Atkinson when, citing the Pongoland case of Cook v. Spring (L.R. 42 I. A. 229, 268) he says -

68. In Chau Kwai Chiu and Another v. Wong Shin⁽³⁾ known as "The Shell Case" decided in 1900 but reported only in Vol. 9 Commonwealth International Law Cases, p. 298, the Chief Justice of Hong Kong decided that it was open to him to examine the terms of a grant by the Crown to see whether it accorded with the Peking Convention.

69.            The Chief Justice, having recognized that the general principle was, following the Secretary of State in the Council of India v. Kamachee Boye Sahaba⁽⁴⁾ that an annexation is an act of state and an obligation assumed under treaty to that effect is not one which municipal courts are authorized to enforce, nevertheless purported to do so, on the basis that it was competent for a municipal court to inquire into and determine private rights, even where this involved an examination of a Convention with another Sovereign. He distinguish Kamachee ⁽⁴⁾ and other cases on the basis that they were instances of annexation pure and simple, in which the Crown assumed full sovereignty of the territories, whereas in the case of the New Territories there was only a lease for a term of years conferring a qualified sovereignty on the Crown.

70. The lease which was the subject of The Shell Case⁽³⁾ was granted on 20th December, 1899, before the Land Court (New Territories) Ordinance, 1900, came into force on 28th March, 1900. Had the latter Ordinance been in force at the date when the supposed cause of action arose in The Shell Case⁽³⁾, the Chief Justice would surely have come to a different conclusion. Otherwise even if he was persuaded that the Crown had no inherent power to issue leases which overrode rights undertaken by treaty, he would have had to find, and there is no indication to this effect in his judgment, that a domestic Ordinance in breach of treaty was ultra vires.

71. Kempster, J. commented on the recent Privy Council decision in Attorney General v. Ng Yuen Shiu⁽⁵⁾ in these terms -

"... these proclamations were the Governor's own and an occupier of land in the New Territories at the time might well have been entitled to call upon the Colonial Government to redeem the promises which they embodied. Attorney General v. NG Yuen Shiu."

72. In that case it was held that a public announcement, made by an appropriate officer of the Hong Kong Government, promising to consider individually the cases of illegal immigrants from Macau, was binding and enforceable, even though no duty to consider the cases in this manner had been imposed by law.

73. The judge does not give his reasons for saying that the inhabitants of the New Territories might have been able to invoke the principles set out in The Ng Case⁽⁵⁾, which was mentioned before us in passing and without detailed argument. Nor does he suggest that it is open to the plaintiff to rely on that decision now.

74. We do not see how the plaintiff could take advantage of the principles set out in The Ng Case⁽⁵⁾, where the relevant legislation merely provided a general discretion and was neutral as to how it should be exercised. In this instance the legislation itself authorizes the action which is the source of grievance. If there was a promise, it could hardly be enforced as binding in the face of specific legislation to a contrary effect.

75. Our conclusion is therefore that, even if there were breaches of the Peking Convention, as to which we make no finding, such breaches would not be capable of redress at the instance of the subject in the domestic courts of Hong Kong. So it is not necessary for us to determine whether or not there were any such breaches.

New Territories Order in Council

76. The plaintiff submitted that although treaty obligations do not per se become part of municipal law and confer enforceable rights upon the inhabitants, the power of the Governor to make laws under the new Territories Order in Council did not authorize him to make legislation in breach of the Peking Convention. The submission was put upon two grounds.

77. The first ground was that paragraph 2 was not to be taken in isolation but that the Order in Council was to be read and construed as a whole, in particular including the words of the preamble; when this was done it became apparent that the purpose of the Order was to implement the Convention, and that read in this context paragraph 2 must necessarily be restricted to laws that did not offend against the Convention.

78. We do not think the words of the preamble require us to restrict paragraph 2 in this fashion. They do no more than recite, by reference to the Convention, the source of Her Majesty's jurisdiction. To give the words any wider effect it would be necessary to turn to the actual terms of the Convention itself, a course which, as we shall see in a moment, is only permissible where the subsequent legislation is unclear or ambiguous.

79. The second ground of submission requires the Plaintiff to establish that the phrase "peace, order and good government is ambiguous uncertain or unclear. If this is so, it should be construed as to be consistent with the Peking Convention. Alternatively, the phrase should be so construed as to implement international law, which holds that treaties are binding.

80. The phrase has been used again and again throughout the history of the former British Empire and the Commonwealth when conferring powers of legislation upon the administration of overseas territories.

81. There is abundant authority that these words confer, the widest law-making powers upon the subordinate Legislature. For example in Ibralebbe v. The Queen⁽⁶⁾, Lord Radcliffe, delivering the judgment of the Privy Council, said -

"By section 29 there is conferred upon the Parliament power to make laws for the 'peace, order and good government' of Ceylon, subject to certain protective reservations for the exercise of religion and the freedom of religious bodies. The words 'peace, order and good government' connote, in British constitutional language, the widest law-making powers appropriate to a Sovereign."

82. In Riel v. R.⁽⁷⁾,  it fell to the Privy Council to consider the effect of a provision in the British North America Act 1871 which conferred upon the Dominion Parliament of Canada power to make provision for the administration, peace, order and good government of any territory not for the time being included in any province.

83. The following passage from the judgment of Lord Halsbury, at p 678, is pertinent -

".......... it appears to be suggested ..... a Court of law should come to the conclusion that a particular enactment was not calculated as matter of fact and policy to secure peace, order and good government, that they would be entitled to regard any statute directed to those objects, but which a Court should think likely to fail of that effect, as ultra vires and beyond the competency of the Dominion Parliament to enact.

Their Lordships are of opinion that there is not the least colour for such a contention. The words of the statute are apt to authorize the utmost discretion of enactment for the attainment of the objects pointed to. They are words under which the widest departure from criminal procedure as it is known and practised in this country have been authorized in Her Majesty's Indian Empire. Forms of procedures unknown to the English common law have there been established and acted upon, and to throw the least doubt upon the validity of powers conveyed by those words would be of widely mischievous consequence."

84. This decision was referred to in the following passage from the judgment of the Privy Council in Chenard & Company v. Joachim Arissol⁽⁸⁾, in which the Privy Council considered the law-making powers of the Legislature of the Seychelles, then a British dependent territory -

"A power to make ordinances for the peace, order and good government of a colony does not authorize alteration of the constitution or powers of the colonial legislature, but it does authorize the enactment of rights, privileges and immunities whether these be general or in favour of particular persons or classes of persons. Such a power has been held 'to authorize the utmost discretion of enactment for the attainment of the objects pointed to, 'and a court will not inquire whether any particular enactment of the character does in fact promote the peace, order or good government of the colony. (Riel v. The Queen[10 App. Cas. 675])."

85. It therefore seems to be established beyond doubt that the phrase "peace, order, and good government" is not ambiguous or uncertain in extent but merely so broad in scope that it has no boundaries save those which are imposed upon it by the constitutional instruments of the territory itself or by imperial enactments or orders in council which are applicable to the territory.

86. Had the plaintiff been able to establish ambiguity in the phrase, it would have sought to rely upon comments in Saloman v. The Commissioners of Customs and Excise⁽⁹⁾ which suggest that, in such an event, the interpretation which gives best effect to the Peking Convention should be adopted.

87. In considering the effect of a treaty entered between the United Kingdom and United States, Diplock, L.J. observed -

"Where by a treaty Her Majesty's Government undertakes either to introduce domestic legislation to achieve a specified result in the United Kingdom or to secure a specified result which can only be achieved by legislation, the treaty, since in English law it is not self-operating, relevant to any issue in the English courts until Her Majesty's Government has taken steps by way of legislation to fulfil its treaty obligations. Once the government has legislated, which it may do in anticipation of the coming into effect of the treaty as it did in this case, the court must in the first instance construe the legislation, for that is what the court has to apply. If the terms of the legislation are clear and unambiguous, they must be given effect to whether or not they carry out Her Majesty's treaty obligations, for the sovereign power of the Queen in Parliament extends to breaking treaties (see Ellerman Lines, Ltd. v. Murray (1931 A. C. 126),  and any remedy or such breach of an international obligation lies in a forum other than Her Majesty's own courts. If the terms of the legislation are not clear, however, but are reasonably capable of more than one meaning, the treaty itself becomes relevant, for there is a prima facie presumption that Parliament does not intend to act in breach of international law, including therein specific treaty obligations."

88. This passage might have availed the plaintiff if the enabling powers conferred by the Letters Patent had contained phrases which were capable of two interpretations, one in accordance with the aims of the Convention and one which was not. In default thereof this seems to us to be an attempt, not to interpret the scope of Article IX, but to limit it by the imposition of conditions upon clear words.

Royal Instructions

89. The appropriate parts of Article XXII of the Royal Instructions, 1888, which have been in force at all relevant times, read as follows -

"XXII. The Governor shall not, except in the cases hereunder mentioned, assent in Our name to any Ordinance of any of the following classes:-

...............................................................

7. Any Ordinance the provisions of which shall appear inconsistent with obligations imposed upon Us by Treaty.

...............................................................

Unless such Ordinance shall contain a clause suspending the operation of such Ordinance until the significance of Our pleasure thereupon, or unless the Governor shall have satisfied himself that an urgent necessity exists requiring that such Ordinance be brought into immediate operation, in which case he is authorised to assent in Our name to such Ordinance, unless the same shall be repugnant to the law of England; or inconsistent with any obligations imposed on Us by Treaty. But he is to transmit to Us, by the earliest opportunity, the Ordinance so assented to, together with his reasons for assenting thereto."

90. Neither the Letters Patent, nor the Royal Instructions attempt to prohibit the local Legislature (i.e. the Governor with the advice and consent of the Legislative Council) in the exercise of the powers conferred to legislate for the peace, order and good government of the territory from seeking to enact Ordinances of the kind listed in Article XXII ("reserved Ordinances").

91. The Governor is, however, prohibited from giving his assent to a reserved Ordinance, an act which completes the legislative process necessary to give life to an Ordinance, until the Queen's pleasure is signified, save in cases of urgency, though legislation in breach of treaty may not be assented to even in such circumstances.

92. It was agreed between the parties that there was no suspending clause in any of the Ordinances to which objection has been taken by the plaintiff; and that the Governor assented to each of them. We will assume, for the purpose of this aspect of the appeal, that the Ordinances fell within paragraph 7 of Article XXII and that, consequently, the Governor, when giving his assent, was in breach of Article XXII.

93. Where a Bill is reserved for the Royal Assent, it does not become law until that assent has been given. But if the Governor improperly gives his assent to a Bill which should have been so reserved, the effect is different, since prima facie the legislative process is complete, subject of course to the power of disallowance, which was reserved to the Queen by Article X of the Letters Patent.

94. To remove doubt, which appeared to have arisen, as to the effect of an Ordinance to which a Governor has assented in contravention of Instructions given to him, section 4 of the Colonial Laws Validity Act, 1865, was passed -

"4. No Colonial Law, passed with Concurrence of or assented to by the Governor of any Colony, or to be hereinafter so passed or assented to, shall be deemed to have been void or inoperative by reason only of any instructions with reference to such Law or the Subject thereof which may have been given to such Governor by or on behalf of Her Majesty, by any Instrument other than the Letters Patent or instrument authorizing such Governor to concur in passing or to assent to Laws for the Peace, Order, and good Government of such Colony, even though such Instructions may be referred to in such Letter Patent or last-mentioned Instrument."

95. Referring to this section in the Hong Kong appeal of Rediffusion Hong Kong Ltd. v. A.G. and Another⁽¹⁰⁾, Lord Diplock delivering the judgment of the Privy Council observed -

"Thus the breach of prohibitions relating to proceedings in the legislature, contained in Royal Instructions, such as that contained in Clause XXVII of the Royal instructions to the Governor of Hong Kong does not make the resulting law void."

96. It is to be noted that Clause XXVII of the Royal Instructions refers to private Bills, but the same principle would seem to apply to a failure of the Governor to obey instructions with regard to giving his assent.

97. This question has already been considered in the Hong Kong case of Pong Wai Ting v. A.G^.(11) in which it was argued that the New Territories Regulation Ordinance (No. 34 of 1910) and the Crown Lands Resumption Ordinance (No.10 of 1900) were inconsistent with the no-expropriation clause of the Peking Convention.

98. Consequently, it was there submitted, the Ordinance should not have received the assent of the Governor, unless they contained a suspending clause in conformity with Article XXII, which, they did not. Gollan, G.J., sitting at first instance, commented as follows -

"If the Governor does not follow instructions, and I read the term as used in s.4 of the colonial Laws Validity Act, 1865, to include the Royal Instructions, then he may have to answer to the Sovereign for his neglect; but the section appears to me specifically to provide that failure on the part of the Governor is not to affect the validity of any law otherwise properly passed by the Legislative Council and assented to by the Governor."

99. The plaintiff sought to argue that section 4 was limited in its effect and was intended to cover only a failure by the Governor to observe specific instructions, not a failure to observe the general directions contained in the Royal Instructions.

100. This would indeed be an odd limitation, since it would validate an Ordinance assented to by the Governor in conflict with a specific instruction about it, yet not one which was in conflict only with the general directions of the Article.

101. In any event, the wording of section 4 seems clear. The reference to "instructions with reference to such Law or the Subject thereof" surely contemplates both special and general instructions. And the section itself mentions Instructions being referred to in the Letters Patent, which general Instructions would be but particular ones could not.

102. We are satisfied that section 4 validates the various Ordinances which are the subject of controversy even if the Governor's assent (which it is agreed was given in each case) was in breach of the provisions of Article XXII(7).

103. The defendant also argued the ground, advanced obiter by the Chief Justice in Pong Wai Ting⁽¹¹⁾, that the exercise of the Crown's power of non-disallowance, which was notified for each Ordinance, might have cured any defect caused by the Governor giving his assent when he should have reserved an Ordinance.

104. Kempster, J. accepting this argument found that the Ordinances of which the plaintiff complained were ratified by non-disallowance amounting in law to express authorization, though this does not seem to have been necessary to his decision.

105. In view of our finding as to the effect of section 4 of the Colonial Laws Validity Act, it is not necessary for us to pronounce a view on this proposition. However, we would not like it to be thought that we agree with it, since there must be grave objections in principle to attributing to the Crown, in its prerogative guise, power to give force to an otherwise invalid law, by the mere act of deciding not to disallow it.

Validity of Block Crown Leases

106. We must now consider the validity of the conditions, included in the Block Crown Lease dated 24th January, 1905, from which the plaintiff in this action derived its title, as to the length of the demise and the use to which the land might be put.

107. The plaintiff submitted that, if we were to come to the conclusion that the restrictions which are contained in that lease are ultra vices, the improper conditions severed from the lease, thus leaving the plaintiff with an original term of 99 years, unrestricted as to use which it could make of its land.

108. It would then have been entitled to develop the land as it wished, without seeking a modification of the lease to enable it to do so. Consequently, it would receive, under the Crown Lands Resumption Ordinance, full compensation, including an element for the loss of development rights, as opposed to the ordinary rate of compensation which is applicable upon resumption of land where the Crown Lease contains a restriction as to user.

109. If we were to come to this conclusion, the plaintiff would be entitled to the seventh declaration which it seeks. Its counsel agreed that, if it were to obtain that declaration, it would need no more.

110. Whether or not it was open to the Crown in 1905 to grant a lease for less than 99 years and to impose conditions as to user in Block Crown Leases, depended [apart from argument as to the extent to which the Crown was bound in its dealings with New Territories land by the terms of the Peking Convention] upon the appropriate sections of the Land Court (New Territories) Ordinance (No.8 of 1900), which came into force on 28th March, 1900, and the New Territories (Land Court) Ordinance, 1900 (No.18 of 1900), which came into force on 23rd July, 1900.

111. Although there were differences of a minor nature between the two ordinances, sections 13 to 15 and the interpretation section, which are the important ones for our purposes, were unchanged.

112. Whatever the position with regard to interests in land may have been, between the assumption by the Crown of sovereignty over the New Territories on 1st July, 1898, and the coming into force of ordinance No.8 of 1900 on 28th March, 1900, it seems to us that, so far as domestic law is concerned, all land in the New Territories became the property of the Crown, for the period of 99 years specified in the Peking Convention, by virtue of section 15 of that Ordinance.

113. By section 15, any person occupying land in the New Territories, after a date fixed by the Governor by notice in the Gazette, would be deemed to be a trespasser as against the Crown, unless his occupation was authorized by a grant from the Crown, by "another title allowed by the court under this Ordinance", or by licence from the Governor or a government officer.

114. The purpose of the Ordinance was to establish, machinery whereby the claims of residents of the New Territories to titles to land could be investigated by a Land Court. Section 13 empowered that Court to allow or disallow in whole or in part any claim to an interest in land.

115. The same section empowered the Land Court to allow a claim "for such period, at such rent and on such other conditions as may appear to the court equitable and just."

116. This wide measure of discretion might be thought to suggest, if section 13 was read by itself, that it was the Land Court which was intended to decide what ought to be awarded to the individual claimant. The defendant, however, did not put his case that way and section 14, moreover, shows that the Court's power is limited to reporting that it has allowed a claim, or part of it, to the Governor in order that he might grant "a title appropriate to the case". If the Governor considers that it is inexpedient to grant a title, in the public interest, he may refuse to do so and refer the matter back to the Court for the latter to assess compensation.

117. After the necessary investigation by the Land Court, the device was adopted by the Crown of issuing Block Crown Leases, which set out in a Schedule the name of each owner or district, details of his holding and the rent payable.

118. The narrow point which has been averred is whether the Governor was entitled, by virtue of the provisions of Ordinance No.18 of 1900, to include conditions in a Block Crown Lease of the kind to which the plaintiff objects.

119. Section 14 authorizes the Governor to grant a title "appropriate to the case". This was achieved by the Block Crown Lease, since no other form of title was issued, though an alternative method, of registration of title, was proposed in the New Territories (Titles) Ordinance (No.47 of 1902) which came into force on 20th December, 1902, but was repealed on 9th December, 1903, before effect had been given to it.

120. The Ordinance imposes a two-stage procedure; firstly, an investigation of claims by a Land Court, which recommends to the Governor as to whether a claim should be allowed and on what terms; and secondly, a decision by the Governor as to what title would be appropriate to the case" (unless any title at all would be inexpedient in the public interest).

121. We do not read the wording of section 14 as obliging the Governor to issue a title in the terms of the claim allowed by the Land Court. If this had been the intention, we would have expected the section to say so in language which would have clearly imposed such a duty on the Governor, as was in fact originally provided in Clause 11 of the New Territories (Land Court) Bill, published on 25th November, 1899, but not enacted.

122. Nor is there anything in the Ordinance which suggests that the Governor is obliged, to issue an unrestricted title, or a title which must accord with the terms on which the claimant may have owned the land before 1st July, 1898.

123. The restriction on building and the grant of a lease for 75 years, with an option to renew for the remainder of 99 years less three days, appears in a large number of Block Crown Leases. It can therefore be assumed that, at some stage before 1905, the Governor decided, as a matter of policy, that these stipulations should be inserted in Block Crown Leases as a matter of common form. It must not be forgotten that the New Territories were not an isolated jurisdiction. They were expressed to enlarge, and be assimilated into, the then existing Colony of` Hong Kong (see paragraph 1 of the New Territories Order in Council) where stipulations such as these had been standard for some time.

124. The vesting of all land in the Crown by section 15 had the, effect of conferring upon the Governor, as the representative in Hong Kong of the Crown, power to deal as he thought fit with the land so vested, for the term therein described.

125. This unrestricted power would have to be taken from him by clear words. In our judgment, Section 14 did not do that, but left the Governor with authority to insert any term which he thought appropriate to the case. This includes a power to inset conditions generally and thus, when issuing the Block Crown Lease which constituted "title" under the Ordinance, to grant leases for any term which he thought fit "during the term specified by the Convention", (to adopt the phrase which appears in section 15 of Ordinance No.18 of 1900), and to  include a prohibition against use of the land for building purposes without the permission of the Crown.

Footnote

126. It necessarily follows from the conclusions which we have reached on the main submissions of the plaintiff, that it is not entitled to the declarations sought, with the exception, and in the terms of the two declarations granted by Kempster, J. i.e. declarations 1 and 10.

127. We express no view as to declaration 8, with the agreement of both sides. Nothing which we have said should be regarded as indicating that we have either considered, or formed a view about, that declaration. Nor should it be taken, since the matter was not argued before us, that we endorse the judge's opinion as to the effect of section 8 of the New Territories Ordinance (Cap. 97).

128. The plaintiff very properly did not seek to argue before us with regard to declaration 9, in view of the decision of this Court in Watford Construction Company v. Secretary for the New Territories⁽¹²⁾ in which it was decided that the words of the Block Crown Lease are apt to prohibit the use for building purposes of land which is described in the schedule to the Block Crown Lease as being for agricultural purposes, without the permission of the Governor. Counsel for the plaintiff asked us to note that he reserved this argument in case the matter should go further.

129. Nor was any argument addressed to us - although we agreed to hear it at a later stage if our conclusions on the other issues made it appropriate - as to whether or not an equitable remedy of this nature, which lies within the discretion of the Court, ought to be granted to the successor in title of a person who suffered the grievance, which is the subject matter of the declarations sought, if indeed such a grievance could be established, over 80 years ago.

130. For these reasons we dismiss the appeal.

(1) [1774] 98 E. R. 1045.

(2) [1924] L.R. 51, I. A. 357.

(3) 9 C.I.L.C. 298

(4) [1859] 7 Moo Ind. App. 476.

(5) [1983] 2 W.L.R. 735.

(6) [1964] A. C. 900,923.

(7) [1885] A. C. 675.

(8) [1949] A. C. 127.

(9) [1966] 3 All E. R. 871.

(10) [1970] H.K.L.R. 231

(11) [1925] H.K.L.R. 22

(12) [1978] H.K.L.R. 410

Representation:

D. G. Widdicombe, Q.C., A. Neoh (Raymond Tang & Co.) for Plaintiff/Appellant

J.C. Griffiths, C.M.G., Q.C., R.A. Osborne, S.C.C. (Legal Department) for Defendant/Respondent