Ng Kee v. Attorney General

HCA001372/1974

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. 1372 OF 1974

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Coram: Cons, J.

Date of Judgment: 15th March, 1977.

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JUDGMENT

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1. This is the second part of an action brought by the plaintiff Ng Kee in respect of a refusal by the Commissioner of Transport to renew a particular vehicle licence. In 1967 the plaintiff owned a vehicle which was registered as a New Territories taxi. New Territories taxis were taxis in the normal sense in that they plied the streets for hire, but they were subject to certain territorial limitations. They were distinguished from other taxis by a black and white checked band painted around the bodywork. As a species of public transport they ceased to exist after 1969. The plaintiff's vehicle had been registered as a New Territories taxi for over five years and until 1967 there had been no difficulty in getting the licence renewed each year. But in that year the Commissioner refused to renew it any further. That was a wrongful refusal. The Commissioner's act was ultra vires. That was the decision in the first part of this action. If the plaintiff had taken action as he should in 1967 or 1968 he would have obtained an appropriate decision from this court, his licence would have been renewed and there the matter would have rested. But the plaintiff did not. He let the matter lie for many years before coming to this court and so his declaration was refused. There remains however his claim for damages. Apart from the provisions of the Limitation Ordinance that claim is not liable to be defeated by delay.

2. Whether or not the plaintiff is entitled to damages for the wrongful refusal to renew the licence is not a question that can be answered with confidence. There are two principles involved which tend to conflict. One is that where there is a right there should be a remedy. The other is that there should be protection for persons performing public duties.

3. The first principle I take to be well-established without the need to cite authority. The second is to be found expressly stated in Everett v. Griffiths⁽¹⁾ at p.695:

"If a man is required in the discharge of a public duty to make a decision which affects, by its legal consequences, the liberty or property of others, and he performs that duty and makes that decision honestly and in good faith, it is, in my opinion, a fundamental principle of our law that he is protected. It is not consonant with the principles of our law to require a man to make such a decision in the discharge of his duty to the public and then to leave him in peril by reason of the consequences to others of that decision, provided that he has acted honestly in making that decision."

This principle is still observed in England:

"In truth when the court says that an act of administration is voidable or void but not ab initio this is simply a reflection of a conclusion, already reached on unexpressed grounds that the court is not willing in casu to give compensation or other redress to the person who establishes the nullity. Underlying the use of the phrase in the present case, and I suspect underlying most of the reasoning in the Court of Appeal, is an unwillingness to accept that a subject should be indemnified for loss sustained by invalid administrative action." (Per Lord Wilberforce in Hoffman-La Roche & Co. A.G. and others v. Secretary of State for Trade and Industry⁽²⁾.)

And in New Zealand:

and

"Public officials ..... should be able to make bona fide decisions without the constant worry of being sued for alleged misuse of statutory powers." (Per Beattie, J. in Takaro Properties Ltd. and another v. Rowling⁽³⁾.)

4. Nevertheless the extent of administrative control imposed by governments has been steadily increasing in the last fifty years. And Beattie, J., while declining to be a pioneer in the field of administrative law, expressed sympathy for persons aggrieved by the decision of public officials and added

"That the results of involved administrative decisions can bear heavily and some may say, unjustly, on the private citizen."

And again further remarks of Lord Wilberforce may contain a hint that he did not himself necessarily approve of the "unwillingness" to which he referred.

5. It is settled that a refusal to grant a licence, coupled with malice on the part of the public official, is sufficient to found an action for damages: David v. Cader⁽⁴⁾. A similar view was taken in Canada when the wrongful imposition of restrictions on a licence was coupled with the recognized tort of intimidation: Central Canada Potash Co. Ltd. and another v. The A.G. for Saskatchewan and others⁽⁵⁾, (the details are set out in an article "Law Reform - Damages in Administrative Law" in the New Zealand periodical "Recent Law" of February 1976).

6. There is one authority which suggests that no action will lie for an ultra vires act simpliciter: O'Connor v. Isaacs⁽⁶⁾. There magistrates made an order that a husband should make certain weekly payments to his wife by way of maintenance for herself and their child. The husband obeyed the order to some extent but from time to time he fell into arrears and was eventually sent to prison on more than one occasion for failure to pay. Some thirteen years after the original order had been made he discovered that the order was invalid and took steps to have it set aside. Once that was done he took action against the magistrates to recover such monies as he had in fact paid under the order and for damages for false imprisonment. The claim for false imprisonment was found to be statute barred. The action to recover the monies paid also failed. At first instance Diplock, J. put it this way (at p.313):-

That view was upheld on appeal, but there are indications that the decision was to some extent influenced by the husband's failure to take immediate steps to have the original order quashed or reversed on appeal.

7. In the New Zealand case from which I have already quoted the learned judge directly ruled against the possibility in law of any action to recover compensation for loss incurred from invalid administrative acts or omissions. There the Minister of Finance had acted ultra vires by taking irrelevant matters into account when considering the plaintiff's application to permit foreign share holding. The plaintiff alleged losses of some 1.5 million New Zealand Dollars by reason of the Minister's subsequent refusal.

8. If the refusal to grant the licence had been the act of a statutory tribunal some assistance could have been derived from authority. Lord Denning set it out thus in Abbott v. Sullivan⁽⁷⁾ at p.201:

"Let me first make good the principle in the case of statutory tribunals. If they fine or imprison a man without any jurisdiction to do so, their conduct is an actionable wrong. No matter that they act in good faith, nevertheless if, on the facts as known to them, they have no jurisdiction in law to deal with the case at all - as distinct from acting erroneously within their jurisdiction - they are liable in damages: see The Case of the Court of Marshalsea (1611) 10 Co. Rep. 68b; Gwinne v. Poole (1706) 2 Lutwyche 1560; Calder v. Halket (1839) 3 Moore P.C. 28, 75, 76; Bullen & Leake (3rd ed.), at p.345. A mistake of law does not excuse them: Houlden v. Smith (1850) 14 Q.B. 841. The remedy in such cases is, as a rule, one of the recognized actions of tort. If an inferior tribunal imprisons a man without any jurisdiction in that behalf, the members of the tribunal are liable in trespass for false imprisonment: Dr. Bonham's case (1610) 8 Co. Rep. 113b (College of Physicians imprisoned Dr. Bonham). If they levy a fine on his goods without any jurisdiction they are liable in trespass to goods or trover: Terry v. Huntington Hardres 480 (Commissioners of Excise levying a fine); Nichols v. Walker (1629) Cro. Car. 394 (justices distraining for rates). Sometimes the remedy is not an action of tort, but an action for restitution. If a man who is unlawfully fined should pay the fine under threat of distress without waiting for his goods to be taken, he could recover the amount in an action for money had and received. These cases all show that an invalid usurpation of jurisdiction which causes damage is itself a wrong. The form of action depends on the nature of the damage. But suppose the damage takes a different form from the old forms of fine or imprisonment. Suppose it takes the form of depriving a man of his livelihood, as by disqualifying him from driving a motor-car, does that mean he has no remedy? It would be strange if the law could not adapt its remedies to such a situation where the wrong is the same but only the damage is different. Sir John Salmond thought it could, and he is no mean authority. He said: 'A judge of an inferior court is civilly liable for an act done by him in excess of his jurisdiction and in the nature of a trespass against the person or property of the plaintiff or otherwise a cause of damage to him': Salmond on Torts (10th ed.), p.616."

9. If then a tribunal performing statutory duties is liable if it exceeds its jurisdiction is there any reason why an individual performing similar statutory duties should not be so liable? I can see no distinction in principle. Lord Reid took this line of thought further in the case of the Home Office v. Dorset Yacht Co. Ltd.⁽⁸⁾ when he said at p.1031:

"Where Parliament confers a discretion the position is not the same." - he had been referring to the negligent exercise of rights conferred by statute - "Then there may, and almost certainly will, be errors of judgment in exercising such a discretion and Parliament cannot have intended that members of the public should be entitled to sue in respect of such errors. But there must come a stage when the discretion is exercised so carelessly or unreasonably that there has been no real exercise of the discretion which Parliament has conferred. The person purporting to exercise his discretion has acted in abuse or excess of his power. Parliament cannot be supposed to have granted immunity to persons who do that."

10. I do not think it necessary to go that far in the present instance. It is not a question of discretion. It is a question of the misuse of a statutory power, that is an excess of jurisdiction. It was no doubt an honest mistake on the part of the Commissioner but that is no excuse: Houlden v. Smith⁽⁹⁾. The immediate and direct consequence of the misuse of his power was to deprive the plaintiff of the use of and income from the vehicle. It follows from the two passages that I have last quoted that the law should and does entitle the plaintiff to be compensated for that loss.

11. I do not think this conclusion conflicts with the decision in New Zealand. There are two differences in that case. Firstly, the plaintiff company there did not have any right to the Minister's consent. That was something entirely within the Minister's discretion. Whereas in the present instance the plaintiff did have a right to the renewal of his licence. This appears from the wording of the Regulations and the case of The Attorney General v. Tsang Kwok-kuen⁽¹⁰⁾. Secondly, the refusal of the New Zealand Minister's consent did not of itself deprive the plaintiff company of anything or impose upon it any economic loss. The loss followed from the plaintiff company's own financial position and its inability to raise funds other than from abroad.

12. Nor do I think the possibility of an action restricted on these lines is likely to impose undue liability on those responsible for the administration of this Colony or where it is appropriate, upon the Crown. It was suggested that these are not circumstances where liability attaches to the Crown under the Crown Proceedings Ordinance, Cap.300. That might well be the position if the matter were looked upon as a mere failure to comply with a statutory duty binding only upon the Crown or its officers. But I do not think that is the correct view. It was not a mere failure on the part of the Commissioner. It was an active and independent misuse of power.

13. There is one other matter I should deal with at this stage. In his final submission counsel for the Attorney General asked leave to introduce an amendment to the Defence to plead the Limitation Ordinance. But he expressly limited his application in so far as the plaintiff was relying upon the tort of conversion. He did not wish to rely upon the Limitation Ordinance in so far as the plaintiff based his claim upon the ultra vires action by itself. At the time I made no ruling upon the application, reserving it to this judgment. I now refuse that application. I do so because I see no possible way in which the tort of conversion can be extended to cover the present situation. Conversion relates only to chattels. The case of Douglas Valley Finance Co. Ltd. v. S. Hughes (Hirers) Ltd.⁽¹¹⁾, upon which the plaintiff relies heavily, is no exception, even though a licence similar to that with which I am concerned played an important part. The argument is totally misconceived. There is therefore no need to plead in limitation against it.

14. I turn then to the measure of damages. The first question is what method of assessment should be adopted. One suggestion is to take the monetary value of public light bus or New Territories taxi "licence". There does appear to have been some kind of open market for such "licences" at the time although it was a fluctuating and very unstable market. But I am not persuaded that that is the correct approach. The plaintiff had not been deprived permanently of a capital asset which had to be replaced. He had been deprived of current profit from an asset that would have been returned to him before long if he had taken the proper steps to recover it. The correct approach is to assess what that loss of profit was.

15. The plaintiff's evidence was that after 1967 his daily takings from his other New Territories taxi were about $70. This is supported by another witness with reference to 1969. In round figures that would be approximately $2,000 per month. From this must be deducted the running costs which were agreed, in the case of a public light bus, to be approximately $1,160. To that amount must be added the cost of garaging the vehicle, which would seem to have been $150 per month, leaving a net profit of 690 per month before tax. This figure is somewhat hard to reconcile with the plaintiff's set of accounts which he produced for the tax years ending 31st March 1963 to 31st March 1967. These showed net profits per vehicle ranging from a low of approximately $800 in 1967 to a high of $3,070 in 1965. But these were profits per annum, not per month. The accounts were not explained in detail by the plaintiff and it may be perhaps that the large annual item of expense "Partner's Salaries" also indicates some form of profit. I do not know. But having seen the plaintiff I would think that he minimised his profits for the benefit of the tax authority and maximised them for mine. I estimate that the monthly net profit from his taxi in 1967 would have been in the region of $500.

16. The next question is to decide for what period he should recover. His counsel suggested that it should be at least for several years, for he says that until the cases of Reg v. Lau Ping⁽¹²⁾ and The Attorney General v. Tsang Kwok-kuen⁽¹⁰⁾ the law apparently did not provide any remedy; a reasonable man would therefore not have taken any action until after those cases. There are two short answers to that suggestion. The first is that the plaintiff was not in fact delayed by an apparent misunderstanding of the law. He himself took the view that the Commissioner's act was void. But he did nothing about it, other than to refer the matter to his union. Secondly, the law has provided remedies against the misuse of power for long before those two cases. An early example is Reg. v. Leigh⁽¹³⁾. If the plaintiff had proceeded with due diligence I think he could have obtained satisfaction in this court within at the outside eighteen months. His damages should therefore be assessed in relation to that period, that is, $9,000. Judgment is accordingly entered in his favour in this sum.

Representation:

Edward Chan (Hastings & Co.) for plaintiff.

R.J. Johnson, Crown Counsel, for the defendant.

(1) [1921] 1 A.C. 631

(2) [1975] A.C. 295 at 358

(3) [1976] 2 N.Z.L.R. 657 at 669 and 672

(4) [1963] 1 W.L.R. 834

(5) [1975] 5 W.W.R. 193

(6) [1956] 2 Q.B. 288

(7) [1952] 1 K.B. 189

(8) [1970] A.C. 1004

(9) [1850] 14 Q.B. 841

(10) [1971] H.K.L.R. 266

(11) [1969] 1 Q.B. 738

(12) [1970] H.K.L.R. 343

(13) [1897] 1 Q.B. 132