Hong Kong Clays and Kaolin Co. Ltd. v. The Director of Lands

CACV000091/1998

Civil Appeal No. 91 of 1998

Headnote

Construction of s.24(2) of Mining Ordinance (Cap. 285) - Application of Pepper v Hart to memorandum of objects and reasons of relevant Bill and to statement in Legislative Council by promoter of the Bill.

Judicial review - Refusal by Commissioner of Mines to renew mining lease - whether fairness required potential reasons for refusal to be notified to lessee.

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1998, No. 91
(Civil)

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Coram: Hon Nazareth, V.-P., Mayo and Rogers, JJ.A. in Court

Dates of Hearing: 23 and 24 September 1998

Date of handing down Judgment: 5 November 1998

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J U D G M E N T

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Nazareth V-P:

Introduction

1. The appellant, Hong Kong Clays and Kaolin Co Ltd ("the Company") claims to be mining kaolin and feldspar on a site in Cha Kwo Ling. It was originally granted a mining lease to extract minerals there in 1961. There were several renewals, the last expiring on 31 July 1996. The Company was also granted coterminous leases and renewals of the site. The leases were inter-dependent as the lease of the site provided that it would automatically lapse if the mining lease were determined. The two leases were due to expire on 31 July 1996. A few days before, on 26 July 1996, the Director of Lands ("the Director") decided not to renew the leases on their expiry. The Company challenged that decision by application for judicial review. The challenge turned primarily upon subsection (2) of s.24 of the Mining Ordinance (Cap 285). That section is in the following terms:

"24. Duration and renewal of mining lease

(1) A mining lease may be granted for such term not being more than twenty-one years as the Director of Lands may determine.

(2) If, during the term originally granted or any renewal thereof-

(a) the lessee has carried on work in a normal and business-like manner;

(b) the lessee has in all respects performed and observed all the terms and conditions of the lease; and

(c) the lessee has given to the Director of Lands not less than six months' prior notice in writing of his desire to obtain renewal of the lease,

the lessee may be granted, on payment of the prescribed fee and subject to the provisions of this section, a renewal of the lease for such term as may be approved by the Director of Lands, not exceeding twenty-one years, upon the conditions and subject to such rentals, fees, royalties, premiums and other payments as are then applicable to new leases and subject to such covenants and conditions as the Director of Lands may determine.

(3) The Governor in Council may authorize the grant or renewal of a mining lease for a term of more than twenty-one years."

The judgment

2. The matter came before Keith J. For the purposes of this appeal it suffices to advert to the following decisions and conclusions.

3. The judge decided that the power in s. 24(2) to grant renewals is within the unfettered discretion of the Director of Lands to renew or not to renew and that there is no duty to renew.

4. He went on to conclude that the Director of Lands did not address the three conditions in s.24(2) but that his approach was instead to exercise his discretion not to renew the leases irrespective of whether the Company had or had not satisfied those three conditions.

5. The judge then identified the following as the three reasons upon which the Director exercised his discretion under s.24(2) and proceeded to address each of them:

(i) Non-use of the site

The judge addressed the evidence on this point in the light of Nguyen Ho v The Director of Immigration [1991]1 HKLR 576 and concluded that he could not fault the Director's conclusion that the site was no longer being used for mining as the evidence fell short of showing it was "plainly wrong".

(ii) Requirement of site for public purpose

Having considered this, the judge concluded that there was nothing irrational about the Director's decision not to renew the leases on this ground.

(iii) Environmental considerations

The judge rejected the Company's contention that environmental considerations were not a relevant factor for the Director to take into account.

Fairness - failure to notify Company of non-use of the site and environmental complaints

6. Although the judge rejected the Company's submissions on (i) and (iii), he held that fairness in the case did require the Director before he made his final decision to notify the Company of these two matters i.e. the non-use of the site and the environmental complaints, as liable potentially to result in non-renewal, so that the Company could comment upon or controvert those matters.

Relief

7. The judge then considered the matter of what relief he should grant. He concluded in the end that he was not able to exclude the possibility of his views not being changed by such representations as the Company might have made had it been notified of the matters which in fairness he thought it should have. Consequently he made an order of certiorari quashing the decision of the Director not to renew the leases, adding that the Director would therefore have to reconsider the Company's request for a renewal of the leases according to law.

The appeal

The construction of s.24(2)

8. The contention of the Company below and before this Court was that s.24(2) provided for a conditional entitlement to renewal, i.e. that if the three conditions in paragraphs (a), (b) and (c) were complied with, the expression "may be granted" was to be construed as must be granted. This was the Company's primary ground and was pursued by Mr John Griffiths SC who, with Mr Barry Barlow, appeared for the Company in the following way. He submitted that although the usual meaning of "may" was permissive, and not imperative, it was well established that its context in a statute and the factual matrix in which it was enacted may require it to be construed as imperative or imposing a duty to act. Mr Griffiths relied particularly upon two authorities, for the way in which, he submitted, they approached those matters.

9. The first was Julius v Lord Bishop of Oxford [1880]5 AC 214. The words that fell to be construed there were:

"... it shall be lawful for the bishop of the diocese within which the offence is alleged or reported to have been committed, on the application of any party complaining thereof, ... to issue a commission ... for the purpose of making inquiry ..."

Mr Griffiths relied particularly on the following dictum of Cairns LC:

"... the cases to which I have referred appear to decide nothing more than this: that where a power is deposited with a public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied by the Legislature of the conditions upon which they are entitled to call for its exercise, that power ought to be exercised, and the Court will require it to be exercised."

The expression "it shall be lawful" to do an act, can readily be seen to be the equivalent of "may" in its permissive as opposed to imperative effect. There is in any case authority to that effect and the point was not disputed in this appeal.

10. Mr Griffiths relied also upon Padfield v Minister of Agriculture, Fisheries & Food [1968] AC 997. The material word in the statute there was "may". In the light of the limited and essentially non-contentious use Mr Griffiths sought to make of this authority, it is not necessary to go into it in any detail notwithstanding the useful references it contains to Julius v Lord Bishop of Oxford. What their Lordships held (Lord Morris dissenting) is helpfully set out in the headnote at p.998E in the following way:

"Parliament conferred a discretion on the Minister so that it could be used to promote the policy and objects of the Act which were to be determined by the construction of the Act; this was a matter of law for the court. Though there might reasons which would justify the Minister in refusing to refer a complaint, his discretion was not unlimited and, if it appeared that the effect of his refusal to appoint a committee of investigation was to frustrate the policy of the Act, the court was entitled to interfere."

11. Reverting to Mr Griffiths's acknowledgement that the usual meaning of "may" is permissive, as opposed to being imperative, he submitted, however, that having regard to the scheme and the objects and policy of the Mining Ordinance, it was clear that the intention of the legislature was to impose a duty upon the defendant to renew the Company's leases as long as there was kaolin and feldspar to be mined on the site. To demonstrate the scheme, objects and policy of the Ordinance, he sought to commence with the speech of the Attorney General in moving the first reading of the Mining Bill 1954, which upon enactment introduced s.24. That speech, he submitted, made it clear the Government was concerned to vitalise the economy of Hong Kong after the Second World War and in that regard to encourage mining. Mining is known to be a long term industry, he continued, requiring heavy capital investment. The latter could not be expected without long-term security of tenure of the mining and site leases. It was, Mr Griffiths's submission continued, in that context that the Attorney General spoke of security of tenure with reference to renewal clearly implying that there would be renewals for so long as there were minerals to be mined.

12. The submission relies not only upon the Attorney General's speech but also the Memorandum of the Bill's Objects and Reasons and the provisions of the Ordinance itself. It is convenient to begin with the first of those as Mr Griffiths sought to do. Reliance upon the speech immediately raised in the minds of this Court, the question whether that was permissible. Keith J had permitted the speech to be relied upon before him. We nonetheless considered that the matter needed to be addressed.

Application of Pepper v Hart

13. Mr Griffiths submitted that he was entitled to rely upon the Attorney General's speech upon the authority ofPepper v Hart (HL (E)) [1993] AC 593.

14. What the House held there (Lord Mackay LC dissenting partly because the exception there proposed was in his view so extensive) can conveniently be taken from the headnote at p.594C-D:

"... the rule excluding reference to Parliamentary material as an aid to statutory construction should be relaxed so as to permit such reference where

(a) legislation was ambiguous or obscure or led to absurdity;

(b) the material relied upon consisted of one or more statements by a Minister or the promoter of the Bill together if necessary with such other Parliamentary material as was necessary to understand such statements and their effect;

(c) the statements relied upon were clear."

15. If there is anything I would add to the foregoing in the context of the submissions, it is their Lordships' emphasis that the clarity of the statement must go to the particular ambiguity or obscurity. In particular Lord Bridge at p.617A said that reference to Hansard should be permitted

"only ... in the rare cases where the very issue of interpretation which the courts are called on to resolve has been addressed in Parliamentary debate and where the promoter of the legislation has made a clear statement directed to that very issue ..."

Lord Brown-Wilkinson at p.634D said that even in case of ambiguity or obscurity

"references in court to Parliamentary material should only be permitted where such material clearly discloses the mischief aimed at or the legislative intention lying behind the ambiguous or obscure words"

Whether s.24(2) ambiguous

Addressing the first of the three conditions as listed in the headnote to Pepper v Hart, Mr Griffiths contended that "may" has so often been construed in an imperative sense by the courts, that the mere use of "may" of itself suffices to create an ambiguity. I reject that submission. The word has to be looked at first in its immediate context. The ordinary meaning of the words "the lessee may be granted ... a renewal of the lease ..." is quite clearly and unambiguously permissive, and is nonetheless so in the context of the rest of s.24(2). Nor, as far as I can see, does anything in the Ordinance render those words ambiguous or produce any inconsistency for the purpose of attracting the relaxation of the rule excluding reference to Parliamentary material.

16. As Lord Penzance said at p.229 of Julius v Lord Bishop of Oxford:

"The words 'it shall be lawful' are distinctly words of permission only - they are enabling and empowering words. They confer a legislative right and power on the individual named to do a particular thing, and the true question is not whether they mean something different, but whether, regard being had to the person so enabled - to the subject-matter, to the general objects of the statute, and to the person or class of persons for whose benefit the power may be intended to have been conferred - they do, or do not, create a duty in the person on whom it is conferred, to exercise it."

The ambiguity sought to be relied upon must emerge from the provision that is said to be ambiguous or the instrument of which it forms part. Extraneous material cannot be relied upon to create ambiguity which is then to be relied upon to justify reference or inclusion of that material; the ambiguity must be shown to exist before the excluded material can be resorted to, a fortiori if it is to be used to clear up that very ambiguity. All of that seems to me to be obvious.

Statement by Minister or Promoter

17. As to the second condition, clearly the Attorney General's statement must be accepted as a statement by a Minister or other promoter of the Bill.

Whether ministerial statement clear

18. The material part of the Attorney General's statement which was quoted by Keith J in his judgment was as follows:

"Under the new legislation, it will be possible for mining companies and firms to obtain leases for 21 years (or longer if the Governor in Council approves), and provided the lessee carries on mining in a businesslike manner, he will have security of tenure": Hong Kong Legislative Council, Reports of Proceedings, 28th July 1954.

It can be seen that this passage does not expressly refer to renewal of a lease, but Mr Griffiths submits that such a link emerges from the reference to "businesslike manner" since that expression appears only in paragraph (a) of s.24(2) which is concerned with the renewal and not the grant of new leases. However, the conclusion Mr Griffiths contends for does not necessarily follow. The Attorney General's foregoing statement is far from clear. Plainly, whatever security of tenure the Attorney General had in mind, it would on Mr Griffiths's argument be subject not only to the lessee carrying on mining in a businesslike manner, but also performing and observing all the terms and conditions of the lease, and giving to the Director of Lands no less than 6 months' prior notice in writing of his desire to obtain renewal (see (b) (c) of s.24(2)). If by "businesslike manner" the Attorney General meant compliance with and performance of all that was legally required of the lessee, then this would apply equally to security of tenure during a subsisting lease as opposed to the lease being renewed. Moreover, given that the Governor-in-Council was provided with power to authorise leases of any length, it is difficult to see why the conditional renewal provided in s.24(2) should be regarded as providing the incentive of security of tenure. The appropriate duration could be secured in the ordinary way in the first place and without those conditions. All in all, the statement seems to me to be far from clear. I conclude, therefore, that under both paragraphs (a) and (c) of the conditions for relaxation, the Attorney General's statement must be excluded.

19. The only other matter outside the Ordinance that Mr Griffiths relied upon, albeit nowhere near as forcefully, is the following passage in the Mining Bill's Memorandum of Objects and Reasons:

"... A [mining] lease ... may be granted for a period of not more than twenty-one years unless the Governor in Council authorises a longer period: it will be renewable for further periods not exceeding twenty-one years, if the lessee has carried on mining in a business-like manner and has observed the terms of his lease."

No authority for resort to such material was provided nor was the legal basis upon which that could be justified made clear. One supposes that it was relied upon as Parliamentary material in the same way as the Attorney General's speech. If so, it would be subject to the same conditions. Upon the assumption that the Attorney General as such or as proposer signed it, it might be assumed that it could be relied upon in the same way as the Attorney General's speech.

20. But then a similar obstacle is immediately encountered. If "will be renewable" is claimed to equate with "shall be renewed" that on its face is questionable. It also ignores the condition in paragraph (c) of s.24(2)(c), i.e. six months' prior notice in writing of the desire to obtain renewal. If such notice was not given, plainly the lease would not be renewable. In that sense the passage is not merely unclear but misleading. Furthermore, it is indicative of a simple, broad and perforce imprecise way in which a general explanation is given with the emphasis upon simplicity as opposed to accuracy and comprehensive detail. It does not avail the construction contended for i.e. if all three conditions are satisfied, the lease must be renewed. I reject it as being neither clear nor of assistance.

21. The position then is that neither the speech nor the Memorandum of Objects and Reasons can be relied upon. Mr Griffiths's somewhat elaborate construction of the scheme, object and policy of the Ordinance is thus left without any foundation other than the Ordinance itself. Before proceeding to the Ordinance, I have to say that even if reliance upon the speech and Objects and Reasons had been permissible, given their lack of clarity to say the least, they would, not in my view, go anywhere near establishing or even pointing to the scheme, object and policy contended for.

22. Mr Griffiths also submitted that the legislative process in Hong Kong is not the same as that in the Parliament of the United Kingdom. For one thing, the statement of the Minister or other promoter of a Bill is far more likely to contain the reasons and intention of the legislature in enacting a Bill. I pause to say only that that is by no means clear. This Court or the Court of Final Appeal, the submission continued, should extend the relaxation of the exclusion of Parliamentary material beyond that in Pepper v Hart. For myself, I do not think the justification for such relaxation has been anything like sufficiently canvassed or demonstrated. Furthermore, this Court, it seems to me continues upon the basis explained in de Lasala v de Lasala [1980] AC 546, to be bound by the decisions of the House of Lords given prior to 1 July 1997. If such decisions are to be departed from, that will have to be done by the Court of Final Appeal.

23. Turning then to the Ordinance itself, I do not find it necessary to say, in respect of the scheme, policy and objects suggested, more than this, that they likewise do not emerge from an examination of the provisions of the Ordinance relied upon in that respect.

24. It remains to address Mr Griffiths's submission that the Ordinance itself requires "may" in s.24(2) to be construed imperatively. The long title to the Mining Ordinance enacted in 1954 shows, he says, that it was "To make better provision with regard to prospecting for minerals and mining and for" connected purposes. If "may" in s.24(2) were not construed as must, then the Ordinance would not have affected the previous wholly discretionary position and accordingly not have made better provision. That argument must be rejected. Section 24(2) at the very least introduced the conditions in paragraphs (a), (b) and (c) as jurisdictional conditions or conditions precedent to the exercise of the discretion. Moreover, it was by no means demonstrated that no other "better provision" was made.

25. In addition Mr Griffiths sought to rely upon s.65. This section provides for the resumption for a public purpose of any land "within the area of a mining lease" and for compensation for disturbance and for loss of reasonable expectation of profits from proved minerals. The suggestion, if I rightly understood it, was that it was this provision that applied to the procurement for public purposes of land within a mining lease area. That submission cannot be accepted. Once a mining lease expires, no part of the area concerned can be said to be land "within the area of a mining lease". No implication, so far as I can see, arises in respect of leases that have run out.

26. If any other provisions of the Ordinance assist in the construction of s.24(2), they must be those relied upon by Mr Warren Chan SC for the Director, in particular the reference to "may be granted" in s.24(1), and also those in ss.31(3) and 66(5) in the clear distinction they draw between "may" and "shall", which is also apparent in s.65(1) and (3). As to s.24(1), it is clearly at least inconsistent with accepted canons of construction that "may" in subsection (1) should be construed as permissible which it clearly is, and in subsection (3) of the same section should be construed as imperative.

27. For the foregoing reasons, I reject the submission that s.24(2) must be construed in an imperative sense.

Whether non-use, public purpose requirement or environmental considerations warrant non-renewal

28. Mr Griffiths's second general submission was that the three reasons upon which the Director founded his decision not to renew the mining lease, were in the first place not made out, and second that it was not open to the Director to exercise his discretion upon those reasons.

29. It is convenient to take the latter first. Rejection of the appellant's imperative construction of s.24(2), with the implication it carried that no criteria other than the three specified conditions could apply, leaves the latter submission severely attenuated. It now appears to rest upon the contention that the three reasons were simply extraneous matters of administrative policy outside the scope of the scheme, policy and objects of the Ordinance. One has only to state the proposition that a public officer or public authority discharging his statutory functions is not permitted to have regard to public purposes like the urgent need of the site for two schools nor to environmental concerns, where the Ordinance does not expressly shut out those matters, to see its absurdity. As to the site not being used, and indeed a plain intention to use the site upon renewal for purposes other than mining, again it seems to me to be absurd and unrealistic to suggest that the Director was precluded from taking such matters into account. The latter certainly cannot be regarded as considerations extraneous to the Ordinance. I did not in any case understand the submission to be pressed more than faintly, beyond its association with the imperative construction of s.24(2) contended for. Accordingly, I reject the latter submission without finding it necessary to canvass my reasons further.

Non-use of the site for mining

30. Whether kaolin and feldspar was still being mined at the material time on the site, was disputed before the judge. Affidavits were presented by the company to the effect that the company had been carrying on mining and intended to do so. Likewise, affidavits were put in on behalf of the Director which were to the effect that mining has long ceased and that it was the intention of the Group to which the company belonged to develop the site. For the company the facile submission was made that this dispute of fact could not be resolved by trial on affidavit. That submission conveniently overlooked the company's own documentary evidence that showed quite clearly that it had ceased mining the two minerals in respect of which the mining and site leases were granted and, indeed, it was party to very detailed plans to develop the site for residential purposes primarily, and that it had engaged solicitors and planners to negotiate on its behalf and prepare plans. The evidence of non-use of the site for the purpose of the mining the two minerals seems to me to be overwhelming. I do not find it necessary to say more on the point as Rogers JA, whose judgment I have seen in draft, has dealt in convincing detail with the matter. Plainly, there is no reason to fault the judge's conclusion or to remit the matter to be determined upon oral evidence.

Requirement of the site for two schools

31. From the documentary evidence exhibited, it is quite clear that the site is urgently required for two schools. That the zoning plan permitting the site to be used for the schools had not yet been formally promulgated in no way diminishes the force of the documentary evidence of the clear need for the schools and the intention to build them. Again, I can find no reason to fault the judge's conclusion that the site was needed for the public purpose in question.

Environmental problems

32. The judge accepted that there were environmental problems in mining in the vicinity of dwellings and that the Director could properly take environmental considerations into account. Again, I do not find it necessary to do more than to state quite shortly that those conclusions cannot be faulted.

33. For the foregoing reasons, in my judgment, the second general submission made on behalf of the appellant must also fail.

The cross appeal

34. The first point advanced by Mr Chan in pursuing the cross appeal was that the learned judge erred in holding that fairness required the Director to inform the appellant that he was minded to conclude that it was no longer carrying on mining at the site and also to inform the appellant of the gist of the environmental complaints, because on a true construction of s.24(2) of the Mining Ordinance, no such duty is imposed on the Director.

35. Before us, he has renewed the submissions he made below. It is convenient to deal with these in the context of the way in which they were dealt with by Keith J in his judgment.

Whether duty to act fairly required Director to notify his concerns

36. The judge noted Mr Chan's submission here in terms of his skeleton arguments:

"... the Applicant has no right to a hearing as the Director of Lands does not act in any judicial or quasi-judicial function. The exercise of the discretion is administrative and is therefore not subject to the rules of natural justice [In re an application for judicial review by K.O.Y. Investment Co. Ltd. (1983) HKLR 28]. There is nothing in the Mining Ordinance which requires the Director of Lands to hear representations from the Applicant but of course the decision he makes has to be Wednesbury reasonable."

The judge then said this:

"...the Company does not contend that it was entitled to a hearing. Its case is simply that the duty on the Director to act fairly required him to notify the Company of his concerns so as to enable the Company to make representations to him on the topic. The K.O.Y. Investment case did not absolve the maker of a purely administrative decision from the duty to act fairly. In any event, procedural fairness is no longer restricted by the distinctions between judicial and administrative functions, and the term 'natural justice' is being increasingly replaced by the general duty to act fairly, which is the key element of procedural propriety: see De Smith, Woolf and Jowell, 'Judicial Review of Administrative Action', 5th ed., para. 8-001.

I have no doubt that the importance to the Company of the renewal of the leases imposed on the Director a duty to act fairly. However, the requirements of fairness are not engraved on tablets of stone. They depend on the circumstances of each case. The question is whether, when considering the request to renew the leases, fairness required the Director to notify the Company of his provisional view that mining was no longer taking place at the site so as to enable the Company to make representations to him on the topic. The general rule is clear. If prejudicial information is going to be taken into account by a person charged with making a decision in the administrative field, fairness would normally require the body which could be adversely affected by that information to be given the opportunity 'to controvert, correct or comment' on it: see De Smith, Woolf and Jowell, ibid., para. 9-018. Apart from anything else, it makes the ultimate decision a more informed one. The prejudicial information in this case was the fact that royalties were only being paid in respect of 'the disposal of stock minerals on site'."

37. Mr Chan accepted that the Director had a duty to act fairly. But he submitted that the duty was to give a decision, and such decision could be challenged. He did not accept that a lessor has to inform the lessee of his concerns and invite him to address them before the terminates a lease or declines to renew it. He relied again upon the KOY Investment case. Although the headnote there does mention the non-application of the rules of natural justice to purely judicial as opposed to administrative functions, it can be seen from their judgments that what all three judges proceeded upon was not so much that distinction as the true construction of the applicable Ordinance. Whether or not the distinction in question and the term "natural justice" has in the fifteen years or so since the KOY Investment case was decided come to be replaced in practice by the general duty to act fairly, is not a matter I find necessary or appropriate to decide; certainly it was not a matter that was canvassed in counsel's submissions. As to the construction of the Ordinance, I do not think that the provisions brought to our attention, call for the company to have been notified as contended; rather the contrary considering that s.31(3) with reference to revocation of a mining lease expressly requires notice of the reasons for the proposed revocation to be given. Section 24(2) in contrast is concerned with renewal of a lease that runs out and makes no mention of such notice. Nor so far as I can see does fairness in the particular circumstances require such notice to be given. I do not find it necessary to go into further detail upon these matters. Suffice it to say that the matter can be satisfactorily resolved by another route to which I prefer to resort.

38. The evidence that the site was and is required for two schools is overwhelming. I find it impossible to conceive of any public officer or authority acting rationally finding it possible in all the circumstances to renew the leases, even for two years. Those circumstances, it is well to recall, include on the one hand the environmental problems caused by the mining being carried out in the immediate vicinity of residential buildings, and on the other the intention of the company not to use the site for mining kaolin and feldspar, but to develop it primarily for residential purposes. If that is the inescapable conclusion, and it so appears to me, then it would indeed be an exercise in futility, as Mr Chan puts it, to require the Director to reconsider the company's request for renewal of the leases. I cannot conceive of anything the company may say upon the public purpose i.e. the requirement of the site for the schools, that could begin to justify any decision other than a refusal to renew the leases.

39. Accordingly it is in my judgment plain that the cross appeal must be allowed and the judge's order of certiorari, quashing the decision of the Director, set aside. I would order accordingly and also make costs orders nisi that the Director is to have his costs of the appeal and cross appeal, and his costs below.

Mayo, J.A.:

40. One of the main issues which arose on this appeal and cross appeal was whether having regard to the wording of s.24 of the Mining Ordinance, Cap. 285, the Director of Lands had to grant a renewal of a mining lease to a lessee or whether it was discretionary.

41. S.24 reads as follows:-

"24. Duration and renewal of mining lease

(1) A mining lease may be granted for such term not being more than twenty-one years as the Director of Lands may determine. (Amended 33 of 1960 s.13; L.N. 291 of 1993)

(2) If, during the term originally granted or any renewal thereof -

(a) the lessee has carried on work in a normal and businesslike manner;

(b) the lessee has in all respects performed and observed all the terms and conditions of the lease; and

(c) the lessee has given to the Director of Lands not less than six months' prior notice in writing of his desire to obtain renewal of the lease,

the lessee may be granted, on payment of the prescribed fee and subject to the provisions of this section, a renewal of the lease for such term as may be approved by the Director of Lands, not exceeding twenty-one years, upon the conditions and subject to such rentals, fees, royalties, premiums and other payments as are then applicable to new leases and subject to such convenants and conditions as the Director of Lands may determine. (Amended L.N. 291 of 1993)

(3) The Governor in Council may authorize the grant or renewal of a mining lease for a term of more than twenty-one years. (Added 33 of 1960 s.13)"

42. The question which arises is whether the word "may" should be read as "may" or whether it should be read as "must".

43. Having heard submissions from Mr Griffiths, S.C. for the Appellant and Mr Warren Chan, S.C. for the Director, there would not appear to be much difference between their respective submissions on the law. Both would appear to accept that in a situation such as arises in the present case it is only possible to determine the answer to the question by reference to all of the surrounding circumstances.

44. Mr Griffiths submitted that on the material which had been placed before the Judge it had been clearly demonstrated that the underlying intention of the legislature had been to make the renewal of mining leases mandatory assuming that the conditions referred to in the section had been complied with. He placed considerable reliance upon the speech which had been made by the Attorney General when the legislation was being introduced into the Legislative Council in 1954.

45. We informed the parties that we would only consider the contents of the speech reported in Hansard on a de bene esse basis.

46. Having heard submissions from Mr Griffiths and Mr Chan, I have no doubt that the Appellant has not succeeded in establishing that it would be proper for us to look for any assistance in construing the section outside the section itself.

47. The House of Lords considered this question in some detail in Pepper v Hart [1993] AC 593.

48. Lord Bridge had this to say at p.617:

"It should, in my opinion, only be in the rare cases where the very issue of interpretation which the courts are called on to resolve has been addressed in Parliamentary debate and where the promoter of the legislation has made a clear statement directed to that very issue, that reference to Hansard should be permitted. Indeed, it is only in such cases that reference to Hansard is likely to be of any assistance to the courts. Provided the relaxation of the previous exclusionary rule is so limited, I find it difficult to suppose that the additional cost of litigation or any other ground of objection can justify the court continuing to wear blinkers which, in such a case as this, conceal the vital clue to the intended meaning of an enactment. I recognise that practitioners will in some cases incur fruitless costs in the search for such a vital clue where none exists. But, on the other hand, where Hansard does provide the answer, it should be so clear to both parties that they will avoid the cost of litigation."

49. Lord Oliver expressed similar views in his speech at p.620:

"It is, however, important to stress the limits within which such a relaxation is permissible and which are set out in the speech of my noble and learned friend. It can apply only where the expression of the legislative intention is genuinely ambiguous or obscure or where a literal or prima facie construction leads to a manifest absurdity and where the difficulty can be resolved by a clear statement directed to the matter in issue. Ingenuity can sometimes suggest ambiguity or obscurity where none exists in fact, and if the instant case were to be thought to justify the exercise of combing through reports of Parliamentary proceedings in the hope of unearthing some perhaps incautious expression of opinion in support of an improbable secondary meaning, the relaxation of the rule might indeed lead to the fruitless expense and labour which has been prayed in aid in the past as one of the reasons justifying its maintenance. But so long as the three conditions expressed in the speech of my noble and learned friend are understood and observed, I do not, for my part, consider that the relaxation of the rule which he has proposed will lead to any significant increase in the cost of litigation or in the burden of research required to be undertaken by legal advisers."

50. Mr Griffiths informed us that the ground he was placing reliance upon to justify reference to the speech was the absurdity of the legislation if it was not mandatory for the Director to grant renewals of mining leases.

51. He prayed in aid the enormous capital expenditure required for mining and the fact that if leases were not automatically renewable no one would be prepared to commit their resources to mining if they might be required to vacate the land at the expiration of the term granted to them.

52. He contended that it was apparent from a consideration of the relevant provisions of the ordinance that its purpose was to encourage interested parties to undertake mining operations.

53. I do not think that if the legislation is read as a whole this is its main purpose.

54. In my view it is wrong to simply consider s.24 from the perspective of the lessee. What is required is to consider the ordinance as a whole. I have no doubt that Mr Chan was right when he submitted that it was necessary also for the Director to take cognisance of the public interest.

55. It was entirely proper for him to take into account a possible change of user of the land such as the need in the area for the provision of schools.

56. Mr Griffiths has been unable to demonstrate that an absurd result would ensue if a discretion was reposed in the Director to renew mining leases or not as he may consider necessary.

57. The criteria referred to by Lord Reid and Lord Bridge in Pepper v Hart have not been met and accordingly it would not be a legitimate exercise for us to consider the Attorney General's speech. I do not think that this makes a great deal of difference as I am by no means convinced that the Attorney General was suggesting that lessees of mining leases should have what would amount to being a perpetually renewable lease assuming that they had complied with the conditions referred to.

58. Once it is established that the Director is required to also have regard to the public interest I do not consider when viewing the legislation as a whole that it is possible to conclude that the legislature intended to make it mandatory to renew mining leases. This could not invariably be in the public interest.

59. I am satisfied that the word "may" should be read as just that.

60. Mr Griffiths went on to submit that his clients should have been afforded an opportunity of showing cause before the Director made his decision not to renew the lease.

61. Keith J. dealt with this at pages 15 and 16 of his judgment.

"Mr. Chan's response was not without force. He argued that the duty on the Director to act fairly in considering the renewal of a mining lease did not include informing the lessee of the reasons he had in mind for refusing the renewal. It would be absurd to expect that every time a landlord decides not to renew a tenancy. Prior notice is not required when the Governor-in-Council decides to order the resumption of land for a public purpose under section 3 of the Crown Lands Resumption Ordinance (Cap. 124). Most important to all, when the Director has it in mind to revoke a mining lease, he is required to give the lessee 'an opportunity to show cause why the lease should not be revoked': see section 31(2). The express requirement of such an opportunity under section 31(2) is in stark contrast to the absence of such a requirement in section 24.

I cannot go along with these arguments. It is wrong to compare the Director's power under section 24 with the power of a private landlord in relation to the renewal of a tenancy. When the Director is deciding whether to renew a mining lease, he is exercising a public function. He has to balance the interest of the lessee in having his lease renewed against the interests of the public which may be affected by mining continuing at the site. The analogy with the power of the Governor-in-Council under the Crown Lands Resumption Ordinance is not apt : the former owner of the land is entitled to claim statutory compensation.

The more difficult point is the one raised by section 31. On balance, however, I do not think that I can infer, from the absence of an express requirement to give the lessee an opportunity to show cause why the lease should not be renewed, that the Legislature intended that no such opportunity should be given. The revocation of a mining lease involves the loss of an existing right, i.e. a right to continue mining at the site until the lease would have expired. The non-renewal of a mining lease does not involve the loss of an existing right. The Legislature may have intended that whether the opportunity to show cause why the lease should not be renewed should be left to the discretion of the Director. There is no evidence before me that the Director even considered whether or not to give the Company an opportunity to show cause. In any event, if the Legislature is to be regarded as having sanctioned a departure from the universally acknowledged duty to act fairly, clear words of enactment are necessary. That is not the case with section 24.

In my view, fairness to the Company in this case did require the Director, before he made a final decision on whether the leases should be renewed, to inform the Company that he was minded to conclude that it was no longer carrying on mining at the site, to notify the Company that that was because the Company had ceased to pay royalties on the minerals which it was claimed were being mined there, and to invite the Company to comment on that assertion, if it wished to, or to controvert it if the Company could. The Director did not do that. To that extent, there was an element of procedural unfairness in the decision-making process. Whether it should result in his decision being quashed is a matter to which I shall have to return in due course."

62. I do not think that fairness required the Director to invite the Appellant to show cause.

63. A Full Bench of the High Court in Re K.O.Y. Investment Co. Ltd. [1983] HKLR 28 considered whether it was necessary for the Governor to give prior notice or provide an opportunity for representations to be made before making a decision to resume land pursuant to the Crown Lands Resumption Ordinance, Cap. 124.

64. All of the Judges hearing that case were satisfied for slightly differing reasons that it was not necessarily the case that an owner of land should be afforded this opportunity. What was necessary was to consider the relevant ordinance as a whole and see whether there was any requirement under it to give notice. If there was not it was not necessary to do so.

65. It must be borne in mind that the Full Bench was considering the position where an owner was having his land compulsorily resumed albeit that he would be paid compensation. In the present case on the basis that the requirement for the Director to offer a renewal is not mandatory the rights of the lessee are much less compelling than those of an owner being dispossessed.

66. Be that as it may if the criteria referred to in K.O.Y. Investment is adopted, the only reference to a process of consultation being required is in s.31 when the Director is contemplating the revocation of a mining lease. This is an entirely different matter. There are no other provisions in the Ordinance which would suggest the necessity for the Director to consult with the Appellant.

67. The reasons for declining to grant the renewal are referred to in the minutes of a Land Administration meeting which took place on the 17th July 1996. They are :

1. The land was no longer being used for the purpose for which it was originally granted.

2. The site is required for public purposes.

3. Environmental nuisance was caused by the current use of the site.

68. Mr Griffiths contended that representations could have been made on all of these matters. Indeed he submitted that a sufficient case had been made out on the application for judicial review to require the Judge to issue an order of mandamus or a declaration requiring the Director to grant a renewal of the lease to the Appellant.

69. This is a rather surprising submission. It is true that affirmations have been filed which do deal with these concerns of the Director.

70. However there is also a wealth of conflicting evidence filed by the Appellant. Amongst the documents is a table which purports to show the amount of minerals extracted from the land during the period from 1990 to 1996. It is evident from this table that the volume of minerals extracted declined dramatically during this period only to be partially resuscitated in 1996. No explanation was forthcoming for this decline.

71. Also amongst the papers which were before us, there was evidence that an associated company of the Appellant had made an application to the Government for a change of user of the land. What was contemplated was a residential development which would include provision for two schools. There is also a statement in the submission which accepts that the present user of the land is environmentally unfriendly.

72. What is very clear from the submission is that the plan being presented to Government did not envisage the continued operation of the mine.

73. Mr Griffiths argued that this was a matter which should be treated as being separate and distinct from the present appeal. This argument seems to me to fly in the face of reality.

74. However it is not necessary to resolve this. As has been indicated earlier, in my view, the dictates of fairness did not require the Director to acquaint the Appellant with his reasons for declining to renew the lease. This of itself is sufficient to dispose of the appeal.

75. So far as the cross appeal is concerned, in my view, the Director does have a discretion over the renewal of mining leases. He was acting lawfully when he declined to renew the mining lease. There was no necessity for him to invite the Appellant to show cause. This being the case I consider that the Director's cross appeal should be allowed.

Rogers, J.A.:

76. I agree with the result of the judgments which have been given. As has been pointed out, the primary argument in this case is the correct interpretation of the word "may" appearing in section 24(2) of the Mining Ordinance, Cap. 285 and whether the Appellants have an indefeasible right to what would be a fifth renewal of a mining lease originally granted in May 1961.

The facts

77. The Appellants were originally granted a mining lease to mine china clay or kaolin and isomers thereof on the relevant site near Cha Kwo Ling known as Mining Lot No. 20. The lease was for a period of 10 years from the 1st August 1960. We have not been addressed on the terms of the lease and it is unnecessary for the purposes of this case to examine them in great depth. Amongst the covenants given by the Appellant was one whereby it undertook to work the mines "so as to remove and work in the best possible condition the largest possible quantity of minerals hereby demised without unnecessary waste and with as little damage as possible to the mines and minerals not included in the demise."

78. The next lease was a lease for 5 years commencing 1st August 1970 and under that lease, the Appellant was granted a demise in relation to all the china clay, kaolin and feldspar on the Lot. The covenants remained the same as in the previous lease. The third lease was again a lease for 5 years commencing on 1st August 1975. Again, it related to the china clay, kaolin and feldspar and, again, the covenants contained in the first lease were continued together with some additional covenants.

79. The fourth period was a period of 10 years commencing 1st August 1980, although as with the previous leases, it was executed sometime after the date of commencement. Again, it related to china clay, kaolin and feldspar. Again, the original covenants were carried through to this lease.

80. The last extension was granted following proceedings which had been issued in 1991 to force the renewal of the lease. The circumstances are set forth in the judgment at p. 21. As a result of an agreement between the parties in settlement of the litigation, the Appellants were granted a renewal of the lease up until 1996. Again, the same covenants as before were included together with new covenants.

Section 24

81. Section 24 has been set out in the previous judgments and there is no need for me to repeat it here. The major argument put forward on behalf of the Appellant was that on a reading of the Ordinance as a whole, if the lessee of a mining lease could establish that he had carried on work in a normal and businesslike manner during the currency of either the original lease, or in a relevant case a renewal thereof, and that he had complied with the conditions of his lease and that the required notice had been given, the Director of Lands had no option but to renew the lease. In the context, it is said that the words "the lessee may be granted" must be read as "shall be granted".

82. The basis of that submission was that in keeping with the intent of the Ordinance as demonstrated, for example, by the long title "to make better provision with regard to prospecting for minerals and mining, and for purposes connected therewith" the provisions of section 24(2) had to be so interpreted. It was said that the investment required of a mining lessee was so heavy that it necessitated that provided the lessee carried on mining properly, it should be entitled to a renewal.

83. I agree entirely with Keith, J.'s approach to the construction of the Ordinance. In my view, there is no justification for reading the provisions of section 22 or section 24(1) differently from section 24(2). In my view, the wording of the Ordinance is clear. There is a discretion vested in the Director of Lands as to whether a renewal will be granted. I will refer below to elements as to how that discretion may have to be exercised, but however heavy the investment in a mine may be, I do not consider that that can be justification for reading the Ordinance in a manner which would require in effect, a perpetually renewable lease. The history of the grant of the leases for differing periods even in respect of Mining Lot No. 20 is an indication perhaps that such a notion is a new one. Extensions for various periods had been given. There is no apparent reason why such periods have been chosen. If a prospective lessee of a mining lease were to consider that the investment required was such that a reasonable rate of return would not be forthcoming given the length of lease on offer, he had the option of seeking a longer term either from the Director of Lands or, if necessary, from the Executive Council and in default not making the investment at all. In this case, the Appellants took an initial lease which was less than half the period which the Director of Lands was empowered to give.

84. I would draw attention to the fact that the lease itself contained provisions enabling the lessor, at that stage, of course, Her Majesty, to purchase the movable machinery plant and other articles in the mining area on the determination of the lease. That in itself cannot affect the construction of the statute but is perhaps an indication of the way the statute has hitherto been interpreted.

85. Reliance was placed on provisions of section 65 of the Ordinance. It was said that the only way in which the mining land could be converted to use for a public purpose was by operation of that section. Indeed, the Appellants' argument went so far as to say that even if the lease had expired and it were demonstrated that the land were required for a public purpose, nevertheless, a new mining lease would have to be granted and then the provisions of section 65 would operate thus giving the lessee the right to compensation.

86. This interpretation must be wrong, it seems to me, for two reasons.

87. In the first place, section 22 empowers the Director of Lands to grant a mining lease. If the sole purpose of the grant were that immediately the lease were granted it would be determined and compensation would be payable, it would in effect not be a mining lease and it would, it seems to me, be a misuse of the powers of the Director of Lands to grant a mining lease when there was no intention of there being any mining.

88. In the second place, the provisions of section 65(4) contemplate the compensation payable being based upon the "disturbance, and also for the loss of reasonable expectation of profits from proved minerals in, under or upon any land resumed under this section." It seems to me that if it were the intention of the legislation to compensate a previous lessee of a lease which had expired through effluxion of time, the Ordinance could have said so. Furthermore, the compensation which is said by the Appellant to be required is not in respect of the loss of profits which could be anticipated from the proven minerals but in respect of the investment which the lessee has put in. The two are quite different.

Pepper v. Hart

89. It was said that it was permissible to look at relevant extracts from the Hong Kong Hansard as a result of the decision of the House of Lords in Pepper v. Hart [1993] A.C. 593. On this basis we were asked to consider the statements of the Attorney General on the First reading of the Mining Bill 1954 which was subsequently enacted as the Mining Ordinance. At the most notable passage the Attorney General said:

"Here, perhaps I may say a word about the local mining industry, which I think is usually regarded as the Cinderella of our industries. The principal mineral deposits in the colony are Iron ore, Wolfram, Lead, Graphite, Kaolin clay, and Molybdenum, Tin, Bismuth and Scheelite, the four last mentioned being found in varying quantities in association with Wolfram. The total value of all minerals was in the year 1953 was nearly four million, four hundred thousand dollars, and with the introduction of modern machinery and up-to-date methods there are good prospects of further development. Under the new legislation it will be possible for mining companies and firms to obtain leases for 21 years (or longer if the Governor in Council approves), and provided the lessee carries on mining in a businesslike manner, he will have security of tenure. It is hoped this will provide an inducement to people to put money into mining ventures using modern methods and machinery, and that this will be to the economic benefit of the Colony."

I do not accept that it is legitimate to refer to this passage as an aid to construction. In Pepper v. Hart, Lord Browne-Wilkinson said, at p. 634:

"In my judgment . . . reference to parliamentary material should be permitted as an aid to the construction of legislation which is ambiguous or obscure or the literal meaning of which leads to an absurdity. Even in such cases references in court to parliamentary material should only be permitted where such material clearly discloses the mischief aimed at or the legislative intention lying behind the ambiguous or obscure words."

And at page 640 c:

"I therefore reach the conclusion, subject to any question of Parliamentary privilege, that the exclusionary rule should be relaxed so as to permit reference to Parliamentary materials where (a) legislation is ambiguous or obscure, or leads to an absurdity; (b) the material relied upon consists of one or more statements by a minister or other promoter of the Bill together if necessary with such other Parliamentary material as is necessary to understand such statements and their effect; (c) the statements relied upon are clear."

90. Mr Griffiths, S.C., for the Appellant sought to rely on the first of these grounds, namely ambiguity, as the basis on which it was proper to look at the material. As I have already said I do not regard the statutory provision as ambiguous.

91. Even assuming that the first of these requirements is met in this case, I do not accept that the extract from Hansard clearly discloses that the provision of Section 24(2) must be read as requiring the automatic renewal, let alone perpetual renewal, of a lease provided conditions (a) to (c) are satisfied.

92. As the speeches in Pepper v. Hart made clear, the only materials which can properly be introduced are clear statements made by a minister or other promoter of the Bill directed to the very point in question in the litigation: see per Lord Bridge of Harwich, at p. 617B; Lord Griffiths at 617E; Lord Oliver of Aylmerton, at p. 620D; Lord Browne-Wilkinson, at pp. 635A and 640C.

93. Even assuming that the word "businesslike" indicates that the statement sought to be introduced in the present case had been directed to the specific section under consideration, I do not think that the Attorney-General's statement passes this test. It was a statement in general terms made in the course of introducing legislation. The statement was not directed to the point in issue namely whether once granted a mining lease could be renewed as of right by the lessee as often as the lessee wished provided he satisfied conditions (a), (b) and (c) of Section 24(2). If it were proper to look at this material, argument would hinge on the meaning of the words "security of tenure" and as to whether the Attorney General's words were intended to be a complete statement of the law. The difficulty of relying on statements which themselves are not clear as a guide to statutory construction is highlighted in this case by the consideration that security of tenure can have different meanings. Without reference to the rent or perhaps other terms, the right to renew a lease might be said to provide little security.

94. In the case of a debate, the context in which statements are made may make it clear that the specific issue is being addressed by the maker of the statement. Until recently there was, perhaps, little debate in the Legislative Council about the meaning of specific terms in legislation being enacted. The vetting of legislation was in the main effected outside the open sessions of the Council. Thus the statements of the Attorney General and others in introducing legislation were, more than likely, little more than brief introductions not intended to be full statements of the exact statutory provisions under consideration Care therefore has to be taken with regard to such statements lest by making reference to them, statutory interpretation is attempted by reference to generalised, and perhaps on some occasions, loose words used on what was really no more than a formal occasion.

95. Even if the intent of the Ordinance were that investors were to be encouraged to invest in mining, it seems to me impossible to go so far as to hold that the interpretation of the Ordinance in a way which did not give an indefeasible right to renewal would be an injustice which would lead to absurdity. In my view, there would be no scope for that. The level of investment that a prospective lessee would need to make would depend on each site. No doubt a prospective lessee would only accept a lease that would enable it to recoup the initial investment. As I have pointed out at least in relation to the lease and renewals granted in respect of the present site there appears the requirement that the lessee shall "...remove and work in the best possible condition the largest possible quantity of the minerals....". The onerous nature of that requirement is clear. But with such onus would doubtless come a rate of production and return which might be anticipated to justify the investment.

96. Neither do I consider that anything in the explanatory Memorandum is of assistance. The passages were not precise enough to constitute a basis for mounting a claim to an indefeasible right to perpetual renewal of a mining lease.

The Director of Lands' discretion

97. In relation to the exercise of the Director of Lands' discretion as to the renewal of the lease, I agree with the approach of Keith, J. that the question must be asked as to whether the Director of Lands has exercised his discretion in such a way that it could be said that his decision was "Wednesbury" unreasonable.

98. The Director decided not to renew the lease for three reasons. First was the non-use of the site for the purpose for which the lease had been originally granted, namely mining. Second was that the site was required for public purposes and the third was that the current use of the site caused environmental problems.

99. There may be justification for thinking that in the overall decision not to renew the lease there were in fact 2 decisions. The first that no further renewal would be granted to the Appellant. The second that the land would not be leased for mining in the future.

100. On such an analysis, which, if anything, would be favourable to the Appellant, the first decision would be something intimately related to the Appellant but the second would be a matter which the public in general would have an interest.

101. In relation to the first reason for the Director of Lands' decision, it would seem on the Government's part that there is strong prima facie evidence that there had been no mining on the Lot for a considerable period of time. The Appellant sought to refute that contention and has averred that mining has taken place. However, the supporting documents which are exhibited to Mr. Lai's affirmation of 16th May 1997 would indicate that at least during the period of 1989 to 1995, no kaolin at all had been won from the site although some kaolin had been used at the factory at the site. The records show that some feldspar was won during 1989 but, again, during the periods of 1990 to 1995, it would appear from the documentation exhibited that there was no feldspar won. During 1996, some feldspar and rather more kaolin appears to have been mined. During the whole period between 1989 to 1996 there appear to be some significant quantities of washed sand produced. Washed sand however is a by-product of the production of the other minerals and is not itself within the category of minerals for which the mining leases were granted. Even, therefore, on the Appellants' own evidence, it would appear that mining in the sense of winning minerals from the ground only took place in what would seem very small quantities in 1989 and 1996. If a broader definition of mining were apt, one which included "processing", then it might be said perhaps that mining had taken place continuously. It is both unnecessary and in reality impossible for this Court to decide that issue but on the face of the evidence that is before this Court, it can be said that the Director of Lands was not only justified but in my view bound to question the use which had been made of the Lot prior to the termination of the lease. Since however this is a matter which is primarily within the control of the lessee, the lessee should have been given an opportunity to address the doubts as to the existence or extent of mining operations which the Director, in my view, was bound to take into consideration.

102. However, that was not the only ground upon which the Director made the decision not to renew the lease. Importantly, it seems to me, the Director also considered that the site was required for public purposes, namely the building of schools. The material which was produced on behalf of the Director of Lands amply satisfies the criteria that this likelihood of the requirement of the use of the land for public purposes was no mere conjecture. There were concrete plans and proposals. True it is that there could be a slip between cup and lip and that, perhaps because finance was not forthcoming, or for some other reason, the schools would not be developed but in my view the proposals and plans for the building of schools were sufficient to justify the Director in refusing to renew for the fifth time a mining lease on this Lot.

103. In this respect, I do not consider that the Director was in any way bound to consult the Appellants. The most recent mining lease had expired. It was within the remit of the Director of Lands to decide whether a further mining lease would be granted or whether the land would be used or reserved for other purposes. However much the Appellants may have wished to mine at this site, it does not seem to me that they, in any way, had a right to make submissions on this point. The distinction seems, to me, to be whether, on the one hand, the Director of Lands was prepared to grant a mining lease to the Appellants or whether he was prepared to grant a mining lease at all. Since he was not prepared to grant a mining lease in respect of the site because the land was required for public purposes, that decision is not one which it seems to me the former lessee has a right to make submissions in respect of.

104. Turning to the question of the environmental issue, here, again, I consider that there is scope for saying that the former lessee could have been consulted because it might, at least in theory, be possible that the working of the mine could have been organised in a manner that would not have had an impact on the environment which would have justified the refusal of an extension. I have to say, however, that as a matter practice, I doubt that the Director of Lands might have been persuaded that the environmental issue should have been decided in favour of retaining a mine at the site. In this regard, it is perhaps not out of place to observe that in a submission made by City Planning Consultants Limited made on behalf of New World Development Co. Ltd., it is stated that "The vicinity of the Rezoning site is predominated by residential use." Later in the document "an important part of any EIA is for the environmental benefits to be considered and assessed. Removal of the existing quarry and tile factory will provide significant improvements to the local environment. At present, local residents suffer noise, dust and visual impacts from quarrying and manufacturing operations and frequent complaints are received. The proposed development will provide an improved living environment for local residents; noise and dust impacts will be removed and the visual appearance will also be greatly improved." The Appellant did not seek to dissociate itself from this or indeed other rezoning applications, with which by implication at least it would seem it was connected. But, even, in the light of that rather unpromising background if the mine were to be closed on the grounds of environmental desirability alone I consider that the former lessee desirous of continuing mining might have been consulted as to whether the mine could not have been made more acceptable.

105. In my view, despite the fact that the former lessee's submissions and comments in respect of the question of the working of mines and possibly also the environmental impact of the mines, should have been sought, it would be an exercise in futility for the Director of Lands to be required to reconsider his decision. One of the reasons he refused the extension was that the area was required for public purposes. If the land is required for public purposes, then it seems to me that the Director is justified for that reason alone in refusing to grant a further renewal of the lease. In those circumstances, in my view, the decision of the Director of Lands should not have been quashed and I would dismiss the appeal and allow the cross-appeal accordingly.

Nazareth, V.-P.:

106. The appeal is accordingly dismissed, the cross appeal allowed and the judge's order of certiorari set aside. There will also be a costs order nisi that the Director is to have his costs of the appeal and cross appeal, and his costs below.

Representation:

Mr John Griffiths SC and Mr Barrie Barlow (M/s Patrick Leong & Man) for the Appellant

Mr Warren Chan SC and Mr Robert Andrews (Dept of Justice) for the Respondent