Leung Chow Public Car Co (A Firm) v. Attorney General

HCA002882/1977

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

Coram: Hon. LIU, J. in Court.

Date of Judgment: 8th May, 1980.

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JUDGMENT

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1. By a Gazette Notice No. 2670 of 1975 dated the 5th December 1975, the Commissioner for Transport limited the number of motor vehicles permitted to be registered and licensed as public cars to 1,388. Having sought registration for 200 public cars in November 1975 and 105 public cars in December 1975, on the 15th July 1976 the plaintiffs sent in applications for the registration and licensing of 47 public cars. On the same day, the plaintiffs also sent in applications for 25 public light buses. As at the date of these 1976 applications, there were 95 vacancies for public cars and 4 vacancies for public light buses. The Commissioner intimated that these vacancies were not available but were considered as committed. For the purposes of this action, these vacancies are hereinafter called "committed vacancies".

2. The Commissioner for Transport refused all the plaintiffs' applications, and proceedings were caused to be instituted against the Commissioner in the name of the Attorney General under the provisions of the Crown Proceedings Ordinance. These proceedings were intituled High Court Miscellaneous Proceedings Nos. 749 and 750 respectively both of 1976. M.P. 749 in respect of the intended registration for 25 public light buses came on for hearing on the 24th, 25th May and 17th June all in 1977. The reserved judgment in those proceedings was delivered by McMullin, J., as he then was, on the 30th June 1977. It was declared that the Commissioner was wrong in taking into account any committed vacancies when "entertaining or considering" the plaintiffs' 25 applications for public light buses. It was further declared that the Commissioner ought to have entertained the plaintiffs' 25 applications in prescribed forms "only with like applications, if any." It was also declared that the plaintiffs were, entitled to have 4 applications "entertained" alone or together with other like applications, if any, subject to a determination by ballot. The question of "ownership" was also raised by counsel for the Commissioner in M.P. 749, but the learned judge did not proceed to settle the issue which was described as a "nice question". On the 6th July 1977, the plaintiffs caused to have applied for the registration of 4 public light buses. The issue of ownership was not further pursued, and such applications were duly acceded to by the Commissioner on the 12th July. There was no assurance given that such concession would guide or bind the Commissioner's future course of conduct.

3. On the 6th July 1977, M.P. 750 in respect of the Commissioner's refusals of the plaintiffs' applications for the registration of 47 public cars were likewise disposed of without further opposition. The Commissioner was similarly declared wrong to have taken into account the committed vacancies when "entertaining or considering" the plaintiffs' 47 applications for registration of public cars. That declaration was followed by a single declaration that the plaintiffs were entitled to have applications for the registration of 47 public cars "entertained". The other declarations made in M.P. 749 for the plaintiffs' applications to be "entertained" "only with like applications" in the statutory prescribed form and for the plaintiffs' applications and these other like applications, if any, to be determined by ballot were omitted for the obvious reason that such was amply provided for in the regulations under the Road Traffic Ordinance. That the plaintiffs must necessarily have their applications for the registration for 47 public cars granted is quite untenable. That is not the stance of the plaintiffs who seek only to argue that their applications must be considered on the merits by virtue of these declarations.

4. The plaintiffs' case is based on the Commissioner's alleged ultra vires acts whereby they were deprived of the benefit of the declarations in M.P. 750.

5. It would not be impertinent to dwell on the early history. In 1975, following discussions on matters such as (1) public cars were not then performing functions for which they were originally created and (2) they might be illegally operated as private taxis without fear of much successful official intervention, the Traffic Advisory Committee recommended to the Governor in Council to phase out public cars as a class. The Road Traffic Ordinance deals, inter alia, with division of vehicles into classes, the purpose for which vehicles may be lawfully used, regulation and control of the driving and use of vehicles including public cars as well as the conduct of their respective users and drivers and the fares which may be lawfully used, regulation and control of the driving and use of vehicles including public cars as well as the conduct of their respective users and drivers and the fares which may be lawfully charged. Vide section 2(2) and section 3(1)(cc) and (f). Under section 4(1)(j), the Governor in Council may make regulations for "limiting the numbers of motor vehicles which may at any time be registered or licensed within any of the classes". Mr. Leeds further told the Court that the Transport Department shared the same view for the phasing out of public cars with the Traffic Advisory Committee for these same main reasons which he described as principal reasons at another time. Mr. Leeds explained some of the consequencial irritations in his cross-examination: Public cars had the appearance of taxis; not infrequently they charged higher fare; they could not effectively be restrained from operating illegally as taxis, and public cars as a whole presented unfair competition to taxi operators. According to Mr. Leeds, instructions were given by the Commissioner for Transport that it was undesirable to continue issuing licences for public cars which might be phased out as a class and that a moratorium should best be imposed to suspend issuing such licences pending a policy decision by the Governor in Council. At or about this time, on the 30th October, 1975 judgment was delivered by Huggins, J., as he then was, in WONG Kwong-shing v. A.G.⁽¹⁾ It was, inter alia, held that a limit set by the Commissioner for the registration and licensing of public light buses pursuant to Regulation 18B(1), even one day after the applications for 50 public light bus licences, could be applied to such slightly earlier applications. Mr. Leeds further disclosed that on or about the 20th November 1975, the Transport Department was advised by Crown counsel that a limit ought to be set for the classes of vehicles for which licences were not to be granted. Thereupon, on the 5th December, 1975, by Gazette Notice 2670 the Commissioner set the limit for registration and licensing of public cars at 1,388 which, according to Mr. Leeds, the present Deputy Commissioner, represented the number of existing registered public cars plus 95 committed vacancies. On the 6th April 1976, the Executive Council met and ordered legislation to be prepared for the implementation of the recommendation of the Traffic Advisory Committee. Mr. Leeds became acting Commissioner on the 22nd June 1977 until the 8th of the following month in July. A few days before the delivery of judgment in M.P. 749 on the 30th of June 1977 and therefore more than a week before the declarations made in M.P.750 on the 6th of July 1977, Mr. Leeds, then acting Commissioner for Transport, was advised by Crown counsel that the committed vacancies need not be included in the gazetted limit for the registration of public cars. It was originally intended that the limit be reduced to the number of existing registered public cars at 1,329 and that if the plaintiffs were to score a success finally in M.P. 750, the gazetted limit be raised to comply with any Court order made. At about this juncture, he was ultimately advised by Crown counsel that it might be prudent to keep 47 vacancies open pending the proceedings in M.P. 750 so as not to run the possible risk of being criticised as improper. It was therefore merely precautionary, and Mr. Leeds considered it good advice. Mr. Leeds was not advised that it was in fact unfair or improper. As a result, a Gazette Notice (Extraordinary) No. 15 of 1977 dated the 30th June 1977 but published on 2nd July 1977 reduced the limit for registration and licensing of public cars by only 12 to 1,376 thus reserving 49 free vacancies. Bearing in mind the original 95 committed vacancies, it is clear that 36 of them had by then been registered and licensed, although there is no evidence as to the circumstances in which they became so registered and licensed. It was also disclosed by the Deputy Commissioner that once a decision favourable to the Traffic Department was given, the gazetted limit would be forthwith reduced to implement Government policy.

6. According to Mr. Leeds, on the same day but soon after the order in M.P. 750 dated the 6th July 1977, he was advised by Crown counsel that the plaintiffs' applications should be entertained but that the Department could consider the same in the context of Government policy on public cars. At one time, the Deputy Commissioner did state: "The advice was: after considering the applications, it would be in order to adjust the limit." Mr. Leeds explained that he had no clear recollection whether the word "after" was used by the Crown counsel. In his overall evidence, this must have been an inaccuracy, and in my view no real cause for criticism exists. In effect, Mr. Leeds was given to understand by Crown counsel that the declarations made in M.P. 750 did not enjoin the Commissioner to grant licences for 47 public cars to the plaintiffs. Therefore, Gazette Notice (Extraordinary) No. 16 of 1977 dated 6th July 1977 was published the next day to reduce the limit for registration and licensing of public cars by 47 to 1,329.

7. There were two other applications sent in on the 5th July and 6th July for the registration and licensing of 50 public cars each, but these applications were both rejected on the 12th of July.

8. On the 11th July 1977, the plaintiffs caused to be applied for the registration and licensing of 47 public cars. Mr. Leeds ceased to act as Commissioner on the 8th July 1977, and the plaintiffs' applications were dealt with and refused by the Commissioner, Mr. Macpherson, on 14th July 1977 in the following terms:

9. At counsel's invitation, Mr. Leeds offered the solution that in the event of the plaintiffs' applications being approved by Mr. Macpherson, the Transport Department might consider lifting the gazetted limit by 47. On a similar hypothetical basis, Mr. Leeds conceded the possibility that had the plaintiffs sent in their applications before the gazetted reduction, these would have been in conflict with Government policy and the forthcoming legislation for phasing out public cars as a class and the Department would then have had to seek legal advice and policy guidance.

10. Road Traffic (Amendment)(No. 2) Ordinance 45 of 1977 was passed by the Legislative Council on the 15th June 1977. The Governor's assent was given on the 16th June 1977, and the new Ordinance was published on the 17th June 1977. The operation date was finally gazetted to fall on the 1st November 1977. Section 4A(6) of the principal Ordinance declared that the Commissioner's power to register or license a public car ceased from the same operational date. These amendments in Ordinance 45 were intended and did serve to convert public cars to taxis on the payment of a premium of $75,000. New taxi licences are otherwise sold at auction. On the 27th July 1977, they were auctioned with the lowest tender accepted at $181,000 and the highest tender accepted $196,005. The plaintiffs claimed to have been minded to convert the 47 public cars, if granted, into taxis by payment of such premia, and the plaintiffs' claims in this action arose from the refusal of the Commissioner to register and license 47 public cars.

11. The plaintiffs, through their partner one Mr. Tse, applied thereafter for a maximum of 8 taxis, but none of his tenders was successful due to the low figure submitted. Taxis were transferable. The plaintiffs' applications for 47 public cars were rejected on the 14th July 1977. The mean between the maximum and minimum successful tenders was $188,502.50. The defence was prepared to accept that the plaintiffs would likely have been able to successfully bid for or acquire in the open market a transfer of a taxi at $188,502.50. It was a reasonable concession, and I so infer the same effect from the evidence, It was urged by the defence that the plaintiffs could have mitigated by obtaining taxis at that price. If the plaintiffs had been granted 47 public cars, they would have had to pay $75,000 each for conversion. Thus, an extra $113,502.50 ($188,502.50 - $75,000) would be required for financing the plaintiffs' acquisition of a taxi in open market or by way of tender. It was submitted, if I understood counsel for the defendant correctly, that $113,502.50 per taxi or $5,334,617.50 for 47 taxis would be the maximum future loss after the time lapse between the 15th July 1976 to the 31st October 1977 or earlier purchase in which 47 public cars could have been operated at a monthly profit of $1,276. In any event, the defendant maintained that the plaintiffs would never be entitled to more than a 1/3 probability of having his applications accepted by ballot and that consequently the plaintiffs' claim for damages was too uncertain. The defence also made reference to the hard reality that if in fact the maximum limit for the registration and licensing of public cars had not been reduced by Gazette Notice (Extraordinary) No. 16 of 1977, there could have been a flood of applications in addition to those from U.E.E. Limited and Mr. Ip and that the probability of the plaintiffs being successfully granted one or more public cars would then have been even less hopeful.

12. The substance of the plaintiffs' complaints is: By virtue of the declarations in M.P.750, the plaintiffs were entitled to have their applications considered on the merits. Gazette Notices 15 and 16 are ultra vires. No point was taken on the propriety of an earlier Gazette Notice 2670. Whilst the plaintiffs queried the alleged ultra vires nature of Gazette Notice 15, with the reserved 47 free vacancies, this Gazette Notice need not be directly attacked in this action. In reducing the limit by 47 to 1,329, Gazette Notice 16 was said to have the effect of depriving the plaintiffs of their rightful fruit in litigation in M.P.750. It was thus contended on behalf of the plaintiffs that by reducing the limit to 1,329 in Gazette Notice 16, the Commissioner acted ultra vires and with malice or at least knowledge that he was so acting. Furthermore, as against the defence capitalising on the plaintiffs' failure to establish ownership in support of their applications for registration and licensing both in 1976 and 1977, an estoppel sought to be founded on the Commissioner's conduct and the circumstances of the case was raised by the plaintiffs in reply. The plaintiffs pleaded a further estoppel precluding the Commissioner from relying on the Government policy to phase out public cars as a class on the allegation that the plaintiffs were misled into believing that 47 free vacancies had been provisionally allocated to their impending applications to be made following the declarations in M.P.750.

13. On the issue of ultra vires, the plaintiffs relied heavily on the judgments in A.G. v WONG Kwong-shing⁽²⁾.

"The power contains in Regulation 18B(1) to limit, by notice in the Gazette, the number of public light buses which may be registered or licensed is not a power to be exercised arbitrarily. It is closely allied to and indeed may be said to have its roots in the Commissioner's power, contained in Regulation 17(1), to refuse to register any motor vehicle in the interest of the regulation of vehicular traffic in the colony. So close is the link between the two regulations that in invoking the latter, the Commissioner may fairly be said to be also invoking the earlier."

14. MuMullin, J., as he then was, had this to say of a notice under Regulation 18B(1):

"A notice under 18B might be regarded as one practical expression of the exercise of his powers under Regulation 17".

15. It is to be observed that in the proceedings in WONG Kwong-shing's case, the practical nexus between Regulation 17(1) and Regulation 18B(1) was analysed for the purpose of illustrating that the Commissioner could not have been totally stripped of his power to process the particulars in an application under Regulation under Regulation 17(1) when his refusal was expressed in terms of only Regulations 18B(1) and 17(2).

16. In the judgment in M.P.749 delivered on the 30th of June, 1977, McMullin, J., as he then was, adhered to his realistic approach to the exercise of a power under Regulation 18B(1):

"In fixing such a limit the matters which the Commissioner must normally consider are precisely those matters dealt with in Regulation 17(1)(a)(1) and (2), i.e. the public safety and regulation of vehicular traffic in the Colony. These are matters of public concern which entitled him to use his powers under 18B."

17. Regulation of road traffic, in all its ramifications, must necessarily overlap, but it would be fallacious to advocate that relevant considerations for exercising the power under Regulation 18B(1) are wholly confined to the two factors, i.e. public safety and regulation of vehicular traffic set out in Regulation 17(1).

18. Section 4(1)(b) of the Principal Ordinance is the enabling section providing for the making of regulations for the registration and licensing of vehicles. That section specifies no criteria for the exercise of any power created by the regulations, but Regulation 17(1) made under section 4(1)(b) confers a discretionary power of refusal on the Commissioner exercisable on the grounds of public safety and/or the regulation of vehicular traffic. Section 4(1)(j) of the principal Ordinance is the enabling section for limiting the number of motor vehicles which may at any time be registered or licensed. Regulation 18B(1) made thereunder lays down the procedure whereby the number of motor vehicles may be so limited. There is no guideline given, either in the enabling section or in the regulation, as to how the limit may be gauged. A statutory power must be exercised reasonably and not capriciously. But there can be no compelling reason as to why the exercise of the power of limiting the maximum number of cars must be exclusively linked to the two matters of public safety and regulation of vehicular traffic set out in Regulation 17(1).

19. The exercise of a statutory power in the absence of any express inhibition or restriction was considered by Huggins, J., as he then was, in CHAN Yat-sun and others v A.G.⁽³⁾ At pages 509 and 510, the learned judge observed:

"Even where there is no express limitation on the exercise of a discretion a statutory body must not take into consideration matters which are manifestly irrelevant and if it should appear that it has done so this Court will interfere. However, as appears from the second passage cited above from the judgment of Lord Denning in Breen v. Amalgamated Engineering Union it is not open to the Court to infer an absence of good reason from the silence of a statutory body in a case where the applicant is seeking a privilege to which he has no particular claim. Putting it in another way, where the statute is silent as to the matters which must be considered the Court would assume that the body exercising the discretion has not acted in an arbitrary and totally unreas onable manner in the absence of any ground for concluding that it has."

20. The plaintiffs' contention is that the Commissioner was acting ultra vires by taking into account matters outside public safety and regulation of vehicular traffic.

21. That the power created by Regulation 18B(1) is a discretionary one cannot be seriously doubted. At page 84 of "Judicial Review of Administrative Action" by S.A. de Smith, 3rd edition, it is well said that:

"Discretionary powers must be exercised for the purposes for which they were granted; relevant consideration must be taken into account and the irrelevant consideration disregarded; they must be exercised in good faith and not arbitrarily or capriciously. If the repository of the power fails to comply with these requirements, it acts ultra vires."

22. The Road Traffic Ordinance serves, inter alia, to classify vehicles, to specify the purposes for which they may be lawfully used, to control the driving and use of vehicles, to supervise the conduct of users and drivers and to regulate the fares which may be lawfully charged. In regulating the whole, it stands to reason that regard must be paid to every integral part.

23. It is quite untenable to suggest that the main reasons given for the proposed phasing out of public cars were not connected with road traffic in its general terms comprising a variety of elements. Mr. Lee, counsel for the plaintiffs, drew the Court's attention to the fact that since existing publiccars were contemplated to be re-registered as taxis and further taxi licences were expected to be gradually issued, his clients' applications could not have been validly objected to on the ground of regulation of vehicular traffic, particularly with a proposed small increase by only 47. Such view fails to appreciate the overall purposes of the Ordinance in the regulation and control of vehicles of all classes, the purposes for which they may be lawfully used, the supervision of the users and drivers and even the fares which may be lawfully charged. The Commissioner must set a limit at some given point of time, and the comparatively small number of 47 is no excuse for frustrating the general guideline in principle. It cannot be denied that for the main reasons given by Mr. Leeds and recommended by the Traffic Advisory Committee, more public cars (however small the addition) to be allowed on the roads at that stage would inevitably create just so much more difficulties.

24. In 1975, a recommendation was made by the Traffic Advisory Committee to the Governor in Council for phasing out publiccars for the principal reasons given by Mr. Leeds. The steps taken by the Commissioner for Transport to suspend issuing licences for public cars and later to impose a limit for the registration and licensing of these cars were preparatory administrative acts in anticipation of Governmental approval of such a recommendation. It was felt undesirable to continue issuing licences for a class of vehicles which might be abolished altogether. These administrative measures were taken in response to the pending deliberation on the recommendation by the Governor in Council. Whilst the Commissioner also considered these same main reasons as good grounds for rendering the continued existence of public cars as being unacceptable, there is no direct evidence that he specifically related his actions to any of these reasons. However, if the Commissioner had been at variance with these supporting main reasons, it would have been inconceivable for him to seek to restrict the number to the existing registered public cars; instead he would have been expected to make representations through the proper channel to the Governor in Council. It was not categorically asserted that the Commissioner would have in any case preferred the existing number already registered, but the Commissioner's actions were in effect promoting the spirit of the Ordinance by not increasing the number of a class of vehicles then considered to be undesirable so as to avoid creating more problematic anomalies as reflected in these main objections and their manifestations. Regulation and control of a specific class of vehicles and the number there of permitted to be on the roads must have been necessary or expedient for the regulation and control of the other classes of vehicles under the Road Traffic Ordinance and for the promotion of the purposes of that Ordinance at large. In my view, by freezing the number of public cars pending Governmental approval of the recommendation forwarded by the Traffic Advisory Committee, the Commissioner acted as well within his power under Regulation 18B(1) as for a legitimate purpose of the Ordinance, though he may be said to have been primarily motivated by a desire for administrative coordination. The first Gazette Notice 2670 dated 5th December, 1975, was published before the meeting of the Executive Council on the 6th April, 1976, at which the recommendation was accepted and legislation was ordered to be prepared for its implementation. It became then the confirmed Government desire to phase out public cars. In promoting Government policy recommended on those main reasons, pending it becoming law, the Commissioner must then be all the more acting in furtherance of its objects thus combating the ill by-products brought about by these main pitfalls. The significant difference lies in the fact that whilst the Commissioner was uncertain of legislative indorsement of the main reasons held by himself and the Traffic Advisory Committee before the meeting of the Executive Council, he could thereafter pursue a course dictated by these reasons as he saw fit without much fear of an unfavourable review. It was then more in the nature of statutory control than administrative coordination. Indeed, Mr. Leeds testified that in view of the ways in which public cars were operated, he considered Government policy as most necessary. By lowering the limit, the acting Commissioner was putting into effect matters which he considered as desirable in the prevailing circumstances. Here, not only did the Commissioner guide himself by Governmental policy, but he was very conscious of the unhealthy conditions created by the main complaints to which he alluded. The case of Hong Kong Hunters Association Limited⁽⁴⁾ is distinguishable at least on one cardinal aspect. In that case, the licensing authority was held to have "failed to exercise his discretion ............................... thereby acting contrary to the provisions of the law". There was no failure to exercise a discretionary power in this case.

25. I will deal with the evidence of Mr. Leeds further when I turn to another facet. I find him an impressive witness and I accept his evidence. In my judgment, it has not been demonstrated that irrelevant considerations had been taken into accout or that the acting Commissioner was wrong in the exercise of his power under Regulation 18B(1). The Commissioner was acting intra vires in publishing and acting on Gazette Notices 15 and 16. In the circumstances of this case, nothing has disabled the Commissioner from publishing or acting upon these Gazette Notices; nor has there been any event capable of avoiding the full legal effect thereof. Consequently, I hold that the plaintiffs' applications made on the 11th July 1977 were lawfully precluded by the limit in Gazette Notice 16 and properly refused.

26. It was also charged that by reducing the limit for registration and licensing of public cars, the Commissioner had wrongly, unfairly or unjustifiably flouted the declarations made in M.P.750. Such declarations in M.P.750, so it was contended, required the Commissioner to consider the plaintiffs' applications on their merits. In essence, that is the meaning counsel would ascribe to the word "entertained". The same condemnation was sought to latch also onto the allegation of malice. It is quite unnecessary to search for the most appropriate definition for the word "entertained". The tenor of the judgment delivered by McMullin, J, as he then was, in M.P.749, particularly at the end thereof, suggests that the plaintiffs' applications would have to be entertained on the merits. The learned judge observed:

"It is plain that none of these 25 applications was entertained, and that this was so by virtue of what amounts to pre-emptive disposition of all available places on the grounds of policy commitments."

But the declarations in both M.P.749 and M.P. 750 must be viewed in their proper perspective. In those proceedings, the Commissioner relied on committed vacancies and was held to have been incorrect. The learned judge can at best be said to have decided that the Commissioner should entertain the plaintiffs' forthcoming applications on their merits but without regard to the committed vacancies provided, of course, it was or remained legally incumbent upon him to do so. The declarations never purported to compel the Commissioner to consider the applications on their merits whatever the circumstances or consequences; less did it Aeek to fetter the future lawful exercise of the Commissioner's power to alter the limit of public cars that might be registered or licensed.

27. The Commissioner lowered the limit by Gazette Notice 16. Thus, it was futile for the Commissioner to undertake a wasteful and pointless task of appraising the merits when the plaintiffs' applications must necessarily be precluded by the lower limit then set. It was not legally incumbent on the Commissioner then to journey further.

28. If indeed the declarations of the learned judge might be read in the manner advocated by Mr. Lee, then the matter could simply be resolved by proceeding on these declarations in execution, thus compelling the Commissioner to process the plaintiffs' applications on their merits in disregard of the reduced limit set by Gazette Notice 16. In my view, no part of the declarations in M.P.750 can be taken as seeking to curtail the Commissioner's power to alter the limit under Regulation 18B(1). I have held that in publishing and acting on Gazette Notice 16, the Commissioner was intra vires. The plaintiffs' applications were "entertained" in the broader sense of the word but were not considered on their merits. Even if the declarations in M.P. 750 did enjoin the Commissioner from not considering the plaintiffs' applications on their merits, any attempted implementation of the second declaration in M.P. 750 was rendered a thankless exercise in futility by the lawful reduction of the gazetted limit. Mr. Leeds did not act wrongfully, unlawfully or unjustifiably in the circumstances, and in fact throughout he acted on legal advice which he reasonably believed to be sound.

29. That leads me to the allegation of malice. The question for my determination is: Was Mr. Leeds actuated by malice in publishing or acting on Gazette Notice 16 or alternatively did he publish or act on that notice knowing it to be ultra vires? Mr. Leeds is a man of 49. He came to the Colony in 1951, had 5 years with the Hong Kong Police and was thereafter posted to various Government Departments. In 1972, he joined the Transport Department. He has acted from time to time as Commissioner. He was made Deputy Commissioner in 1979. He was never deserted by Crown counsel at any stage. He was unaware that he could possibly be in lack of power to do what he did not did he ever have any notion that what he did was wrong, unfair or unjustifiable. Naturally, it must have been fully appreciated that this action would be unfavourable, sat least, to three applicants, but public good must take precedence of all minority interests without much hindrance, and such should be the aspiration of every citizen in an orderly society.

30. It was suggested by counsel for the plaintiffs that the aspects of legal advice in this case have not been pleaded. The amended defence was given to the plaintiffs in any case before the end of the evidence-in-chief of Mr. Leeds. The aspects of legal advice were in the forefront of the minds of counsel, and it cannot be said that the plaintiffs have been misled or prejudiced. The plaintiffs' application to amend was made after counsel's opening, and every effort was made by the defence to meet it by simple amendments so that issues could be readily joined and the proceedings proceeded with. If the aspects or legal advice should be specifically pleaded, I would not feel disposed to consider it as a vital omission in the peculiar circumstances of this case, but to all intents and purposes, if necessary, I would treat the defence as having been duly amended for its inclusion.

31. There is a common law duty not to act maliciously. Takaro Properties Ltd. v. Rowling⁽⁵⁾ and see also Wade on Administrative Law, 4th edition at page 639. No action lies against a public official for exercising a statutory power in good faith. It would be a sad day for a civilized community to attach any liability for damages to any public official in respect of an honest mistake of a legal nature. I cannot even detect any suspicion of malice on the part of Mr. Leeds nor his Department. The departmental approach happened not to run parallel with the plaintiffs' interest. The evidence, I find, points to a determined effort on the part of Mr. Leeds, by lawful means, to give effect to matters affecting public cars as a class which had outlived most of its intended purposes and had become uncomfortably unmanageable. It is a chilling thought that a public official of the then status of Mr. Leeds would put his personal interest or animosity, if any, above his public duties. The contrary is true. In fact, Mr. Leeds was then also answerable to Mr. Macpherson. I do not find Mr. Leeds performing his duties wrongfully, unfairly or unjustifiably. He was acting intra vires, and at no time was he actuated by malice.

32. In his final submission, Mr. Scott sought to demonstrate that whatever decision Mr. Leeds made in relation to the reduction of the limit, it would draw a like protest from the plaintiffs. In that direction, Mr. Scott submitted that even if Mr. Leeds had brought the limit down before the delivery of judgment in M.P. 750, his action would have aroused equally unjustified condemnation. Mr. Scott was cautious enough to assure the Court that he had made no concession in his final submission, and I cannot support Mr. Lee's reference to it as an admission.

33. For the sake of completeness, I turn to consider the question of "owner", estoppel and damages. On the 30th June, 1976, the plaintiffs signed an agreement with Honest Motors Ltd. for the acquisition of 100 vehicles for public cars use. The price was inclusive of licence fees, licence plates, insurance and a small sum for a fender mirror. The total purchase price came to almost $3,500,000 of which only a $10,000 deposit was paid. The price of the car was stipulated to be subject to change or revision at the time of delivery, and delivery was to be arranged between the parties thereto. By the supplement to that agreement dated 13th July 1976, Honest Motors Ltd. was free to sell any of the vehicles before the plaintiffs taking delivery. I have not overlooked all the relevant surrounding circumstances. Suffice it for me to say that in my view no property had passed, nor was it intended to pass, and that the plaintiffs were not owners. As for the plaintiffs' 1977 applications, a similar agreement was entered into with Honest Motors Ltd. on the 9th July 1977. The contract price, likewise including licence fees, licence plates, insurance and a fender mirror, amounted to slightly over $1,500,000 of which only the $10,000 deposit paid previously was held over as deposit. Again, the price of car was subject to change or revision on delivery which was to be thereafter arranged. By a supplement of even date, Honest Motors Ltd. was free to sell any of the vehicles on or after the 20th July. It was further provided that the contract "will automatically become invalid if the buyer fails to take delivery ... within three months". Mr. Lee, counsel for the plaintiffs, sought to attach special significance to the words "available for delivery". Those agreements were conditional contracts with a provision for conditional appropriation. The right of disposal was reserved until certain conditions were fulfilled. Having regard to the terms of these contracts, the conduct of the parties and circumstances of the case, I have come to the conclusion that the plaintiffs were plainly not intended to, nor did they become owners of any of the 47 vehicles.

34. In Ho Choi Yim-fong v Attorney General⁽⁶⁾, a divergence of opinion emerged between the learned President and a member of the Court of Appeal as to the meaning of "owner" in Regulation 4. The observations were obiter. The view of the learned President received the support of the remaining member of the Court. The learned President adopted the legal meaning for the word "owner", and McMullin, J., as he then was, opted for a more liberal and practical construction. There is much to be said for both learned opinions. After deliberation, I am content to take shelter behind the view shared by the majority of the Court of Appeal.

35. However, I would outline my own analysis conducted with not inconsiderable diffidence. The word "owner" is defined in section 2 of the principal Ordinance as including three categories of persons all of whom may have less than full ownership. The question to be asked seems to be: Whether the word "owner" in Regulation 4 should be construed realistically in a more liberal and practical sense or should it be construed strictly according to commercial law? Regulation 4(1) reads as follows:

"Any person who wishes to have registered a motor vehicle, of which he is the owner, shall deliver to the Commissioner an application for registration in such form as shall be described by the Commissioner, and shall pay to the Commissioner a fee of $10." (The underlining is mine.)

It is common ground that by the use of the word "includes" the definition section is not meant to be exhaustive: nor does it seem to be comprehensive. It would seem that the answer may be found in Regulation 13(1) in relation to transfers. It can readily be seen that "the registered owner" must have "ownership" in order to sign a notice of transfer of ownership. There is no property in an "owner" in a more liberal and practical sense to feed a transfer under Regulation 13(1).

36. It was also contended that the Commissioner is estopped by the circumstances, particularly the notice served under Regulation 17F giving reasons for the refusal, from canvassing the issue "owner" in this action as regards the plaintiffs' 1976 applications and 1977 applications.

37. In M.P.750, the plaintiffs abandoned their prayer for the registration of vehicles specified in their 1976 applications. It was conceded that the cars were unavailable. The plaintiffs sought and were granted two declarations and have chosen to proceed in accordance therewith. The rights and obligations at issue were thus crystallized. It is difficult to comprehend the lawful basis of the plaintiffs' claim on their 1976 applications and of their attempted re-introduction of these 1976 applications after the conclusion of M.P.750. Furthermore, not even an oblique reference has been made to the Commissioner's 1976 refusal as being anything more sinful than an honest mistake.

38. The Commissioner specifically made an issue of "owner" in M.P.749 and had not in any way suggested that the same objection was to be abandoned in M.P.750. The question of "owner" was not adjudicated upon; nor was it an issue necessary for the declarations made.

39. As for the plaintiffs' 1977 applications, the Commissioner had, prior to M.P.750, been in the habit of treating informal enquiries as applications from persons not having property in the vehicles, and the Commissioner might then have been sanctioned for acting arbitrarily or unreasonably if he had insisted on proof of vesting of property in the person of an applicant. The plaintiffs' 1977 applications were made after the declarations in M.P.750 in which the Court ruled that the Commissioner ought not consider any applications except in prescribed statutory form. Thus, all subsequent applications must be, by virtue of these declarations, made by the "owner" in accordance with Regulation 4. Consequently, not only should the Commissioner not be accused of inconsistent conduct by refusing to process statutory forms signed by persons who are not owners after the declarations in M.P.750, he was left with little alternative but to take cognizance only of applications from owners in the light of those declarations. I cannot see how the Commissioner can be said to have been estopped by conduct.

40. It was further asserted by the plaintiffs that service of a notice of refusal under Regulation 17F was, per se, a misrepresentation intended to be acted upon by the plaintiffs. Regulation 17F requires the Commissioner to serve on the "owners" a notice of refusal specifying general grounds within 7 days. It was not seriously challenged that under Regulation 17(2) a refusal on the force of the gazetted limit would not oblige the Commissioner to give any other reasons including a query as to ownership. Therefore, a notice under Regulation 17F, in these circumstances, could at most be ambiguous, particularly in the light of the events which accentuated the issue of ownership in the contest between the parties to M.P.750.

41. On the facts I find, Gazette Notice 15 was not misleading. It did not even purport to give any assurance that the exercise of the Commissioner's power under Regulation 18B(1) would be suspended or that the plaintiffs were to be endowed with priority. Capital was also sought to be made on the silence or non-disclosure of an alleged determination on the part of the Commissioner throughout to reduce the gazetted limit to 1329. Mr. Leeds' evidence, which I accept, describes the situation quite clearly: Shortly after Crown counsel's advice prior to the publication of Gazette Notice 15 to the time soon after the making of the declarations in M.P. 750, his original intention to lower the gazetted limit to 1329 was modified by his belief in and acceptance of such legal advice for the reservation of 47 free vacancies. I can find no substance in the plaintiffs' complaint on a proper understanding of Mr. Leeds' evidence. There could be no failure or omission on the part of the Commissioner to make any disclosure of their original intention to reduce the limit to 1329. Plainly, at the material time prior to the conclusion of the proceedings in M.P.750, the Commissioner had adopted a different attitude by reserving 47 free vacancies on the advice of Crown counsel. No good ground in support of an estoppel has been shown.

42. In my opinion, if the plaintiffs could be permitted to step back to square one and make an issue of the Commissioner's error in 1976, the Commissioner would not be estopped from raising an objection on ownership. For all the reasons given above, in my judgment the plaintiffs had not established ownership in their completed forms to the satisfaction of the Commissioner in each case, and their 1976 and 1977 applications would not have, in any event, succeeded.

43. I do not propose to repeat myself. This is a case of some complexity, and I rest assured that the entire judgment will be read in its proper context. In these circumstances, the Commissioner can in no way be estopped from relying on the Government policy for phasing out public cars. I need only mention in passing some of the obstacles for the alleged inaction pleaded in paragraph 4(a) and (b) of the Reply. If the plaintiffs had applied for immediate registration of 47 public cars, it would have been met with the Commissioner's opposition on the ground of "ownership" which had been ventilated. Such claim and the alleged available claim for damages would also have proved to be too uncertain by reason of Regulation 18B(3) and could have similarly been defeated by the divers other legal objections hereinbefore discussed.

44. Lastly, on the question of damages, I entirely assent to the argument, very ably urged by Mr. Lee, that it would be unreasonable to cast a more demanding obligation on the plaintiffs to acquire, by way of mitigation, a similar number of taxis on transfer. The nature of such commercial transaction is different in kind and involvement attracting a far heavier capital outlay. The defendant had not proved any failure to mitigate in the circumstances, and in my view the plaintiffs would not for these reasons be debarred from claiming compensation as per the computations submitted by Mr. Lee. However, the plaintiffs cannot, in my opinion, succeed in any event. The view I have taken is that the plaintiffs would not be entitled to damages by reason of the question of "owner" and on account of the reality that their applications would be subjected to the uncertainty of balloting prescribed by Regulation 18B(3). The monetary claims of the plaintiffs must also fail on account of their failure to establish malice or ultra vires with knowledge that the Commissioner was so acting. I consider myself bound by the decision of the Court of Appeal in Civil Appeal No. 8(2) of 1977 A.G. v Ng Kee⁽⁷⁾. The question for determination in that appeal was "Has a person a cause of action where he suffered loss by reason of the act of a public officer who has acted ultra vires without malice or knowledge that he was so acting?" A negative answer was given by the Court of Appeal.

45. Finally, a rider has perhaps to be added to prayer 1 of the Statement of Claim. Apart from matters decided on the merits against the plaintiffs in this action, it would appear that the Commissioner has no power to grant taxi licences outright to an applicant. The Commissioner is required to invite tenders for taxi licences. I cannot visualise any circumstances in which the doctrine of estoppel may be so put to use as to bind the Commissioner to act in a way not permitted by the regulations⁽⁸⁾.

46. In conclusion, the plaintiffs' claims against the defendant are dismissed with costs.

Representation:

Mr. Martin Lee, Q.C. with Mr. K.H. Woo instructed by Messrs. K.Y. Woo for Plaintiffs.

Mr. Scott, Q.C. with Mr. McCallough, counsel for Defendant.

(1) (1975) HKLR 654

(2) Civil Appeal 58 of 1975 judgment of which was delivered on 7th April, 1976

(3) 1975 H.K.L.R. 503

(4) M.P. No. 57 of 1980 - Judgment was delivered on 8th February, 1980

(5) (1976) 2 N.Z.L.R. 657 at 664 line 32

(6) Civil Appeal No.69 of 1978, the judgment of which was delivered on 18th July 1979

(7) Civil Appeal No.8(2) of 1977, the judgment of which was delivered on the 16th of January, 1978.

(8) See page 327, Wade on Administrative Law, 4th ed.