Hong Kong United Dockyards Ltd v. Attorney General

HCMP000179/1980

Rateability of floating docks - whether "tenement" - jurisdiction of High Court not ousted by creation of Lands Tribunal - discretion exercised in limine to refuse declarations.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

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MISCELLANEOUS PROCEEDINGS NO. 179 OF 1980

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MISCELLANEOUS PROCEEDINGS NO. 180 OF 1980

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MISCELLANEOUS PROCEEDINGS NO. 181 OF 1980

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Coram: Bewley, J.

Date of Judgment: 23rd July, 1981.

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JUDGMENT

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1. There are at present 5 floating docks operating in Hong Kong waters. Some have been here since the early seventies and others have arrived only in the last couple of years. There was, at first, no suggestion that they might be rateable under the Rating Ordinance, Cap. 116.

2. However, in 1979, the Commissioner of Rating and Valuation gave the matter his attention. He held a meeting attended by representatives of all the floating dock owners on 5th February, 1980, at which he expressed his opinion that the docks were rateable and stated that interim valuations would, in due course, be made.

3. This was followed by a letter from the dock owners' solicitors on 22nd February, 1980, which advised that an application to the High Court, by way of an originating summons, for a declaration that the docks were not a tenement, within the meaning of the ordinance, and therefore not rateable, would be made within 7 days.

4. This summons was issued on 27th February and delivered to the Attorney General's Chambers the following day. Receipt was, however, not acknowledged until 4th March, when the summons was assigned to Crown Counsel.

5. Meanwhile, on 29th February, before he had received his copy of the originating summons, interim valuation notices were issued by the Commissioner in respect of 4 of the 5 floating docks. The final notice was issued on 14th November, 1980, in respect of the Chung Shan, which had been undergoing repairs.

6. Section 40(1) of the Rating Ordinance provides:

"An owner or occupier who is aggrieved -

may within 21 days of service on him of the notice of correction under section 16(2) or of the notice of deletion or interim valuation under section 26(1), serve on the Commissioner a notice of objection in the specified form stating fully the grounds of his objection to the correction, deletion or interim valuation."

7. Section 40(2) commands the Commissioner of Rating and Valuation to consider the objection and by virtue of section 42 an appeal lies against his decision to the Lands Tribunal.

8. The plaintiffs wished the question of rateabllity to be decided by the High Court, rather than the Lands Tribunal, but, in order to protect their position, in the event of a refusal by this Court to entertain their application, notice of objection to the interim valuation was served on the Commissioner under section 40. Had this not been done, the door to the Lands Tribunal and, ultimately, the Court of Appeal would have been closed.

9. The valuation was confirmed by the Commissioner on 2nd April and notice of appeal was served on 22nd April. Finally, the plaintiffs applied to the Lands Tribunal for a date of hearing. As stated above, they do not in the least want a hearing in the Lands Tribunal, but it was necessary ex abundante cautela, to preserve an alternative channel of relief.

10. Then, in October, 1980, the plaintiffs applied for liberty to amend the original summons, to cover the matters raised by the interim valuation notice. A cross summons was taken out by the defendant, who appears in place of the Commissioner, applying under O.18 R.19 for the action to be dismissed or stayed, on the grounds that it was brought for the same object as the appeal then pending in the Lands Tribunal and was frivolous and vexatious and an abuse of the process of the Court.

11. On 30th December, Mr. Registrar Ryan gave liberty to amend the originating summons and dismissed the defendant's summons. The learned registrar felt there was a possibility that, on the wording of section 40 of the Rating Ordinance, the Lands Tribunal did not have jurisdiction to determine the point at issue and decided that, the plaintiffs' case not being a hopeless one, they should not be driven from the judgment seat.

12. When the originating summons came on for hearing before me on 8th July, a preliminary point was taken by Mr. Kaplan for the defendant. He submits that this Court's jurisdiction in the matter has been excluded by the Rating Ordinance, or, alternatively, that the Court should refuse in limine to exercise its discretion to make the declarations sought.

13. To oust the jurisdiction of the Court, clear words are necessary. Pyx Granite Co. Ltd. v. Minister of Housing and Local Government,⁽¹⁾ in which Viscount Simonds at 286 approved a dictum to that effect by McNair J. in Francis v. Yiewsley and West Drayton Urban District Council.⁽²⁾

14. Mr. Kaplan referred me first to section 44 of the Rating Ordinance, which sets out the jurisdiction and powers of the Lands Tribunal thus -

"44(1) The lands Tribunal shall hear and determine the appeal and may -

15. Mr. Kaplan than referred me to section 11 of the Lands Tribunal Ordinance, which is in these terms -

"(1) Subject to subsections (2) and (3), the decision of the Tribunal in determining -

shall be the final determination thereof.

16. Mr. Kaplan submits that it is clear from these statutory provisions that it is intended that appeals from the Commissioner should go to the Lands Tribunal, where professional expertise is available, with the additional safeguard of a right of appeal to the Court of Appeal on points of law and that it is a necessary implication that no other forum should have jurisdiction in rating matters.

17. I do not think there is anything in the submission that, because the plaintiffs issued their writ before the interim valuation, and were entitled at that stage to come to this Court for a declaration, it is the defendant that has attempted to duplicate proceedings and should not be allowed to deny jurisdiction. Both sides were well aware of the situation after the meeting of 5th February. No one was taken by surprise. It would not be right to decide the question of jurisdiction on such a narrow ground.

18. Nor am I impressed by Mr. Widdicombe's argument that it is not pen to the Lands Tribunal to pronounce upon the meaning of the word 'tenement', which will be the main issue for the court of trial. The tribunal is presided over by a judicial officer, who is normally a District Judge. There is a right of appeal to the Court of Appeal. Before the tribunal can assess an appellant's liability to rates, it must first, if required to do so, determine whether or not he is liable to be rated at all. I cannot agree that section 40 suggests that there must be a tenement before the right of appeal arises.

19. Mr. Kaplan cannot point to anything in either ordinance that can be said expressly to oust the jurisdiction of this Court. Mr. Widdicombe concedes that, though the words used are not express, it will be sufficient if jurisdiction is excluded by necessary implication. Obviously the Lands Tribunal is intended to be the usual forum for rating appeals, but to preclude a litigant from coming to this Court in a special case, something more than the mere creation of such a tribunal is required.

20. Reliance is placed by Mr. Kaplan on a dictum (obiter) of Lord Denning in R. C. Paddington Valuation Officer, Ex parte Peachey Property Corporation Ltd.⁽³⁾ He stated in that case that, where a rate-payer challenged the validity of the whole valuation list, alleging that it had been compiled on a wrong basis, be was entitled to ask for 'certiorari and mandamus', notwithstanding the existence of a statutory remedy for the correction of particular assessments in a valid valuation list. That did not bar the ratepayer from applying for remedies by way of the prerogative orders for, in such a case, those remedies were more convenient, beneficial and effective than the statutory procedure and the Acts did not take away the Court's jurisdiction to grant such relief.

21. On the facts the orders were refused, but at 400, after referring to Pasmore v. Oswaldtwistle Urban District Council,⁽⁴⁾ R. v. City of London Assessment Committee⁽⁵⁾ and Stepney Borough Council v. John Walker & Sons Ltd.⁽⁶⁾ - all of which are also relied upon by Mr. Kaplan - Lord Denning said this -

"Now these cases certainly warrant the proposition that, if the Peachey Property Corporation were attacking the assessment of any one particular hereditament, or any small group of hereditaments, such as all the houses in a particular terrace, their only remedy would be that statutory remedy. By which I mean that if, and in so far as they are attacking particular assessments within a valid valuation list, they must go by the remedy which Parliament has provided, namely, to make proposals to alter those assessments. But if and in so far as they are attacking the valuation list itself and contend that the whole list is invalid (as they do), then I do not think they are confined to the statutory remedy for the simple reason that the statutory remedy is in that case nowhere near no convenient, beneficial and effectual as certiorari and mandamus. I suppose that in theory the Peachey Property Corporation might make proposals for the alteration of every one of the 31,656 hereditaments in the list, but that would in practice be impossible. Mr. Blain conceded this; but he suggested that a few test cases might be taken, and proposals could be made for altering those few assessments, and a decision given by the Lands Tribunal. But one side or the other might not agree on what should be taken as test cases. And in any case the procedure would be most deficient because there could be no discovery against the occupiers. I am therefore of opinion that the existence of the statutory remedy is no bar to this application. The case falls within the general principle that the jurisdiction of the High Court is not to be taken away without express words; and this applies both to the remedies by certiorari and mandamus: see Reg. v. Medical Appeal Tribunal, ex parte Gilmore⁽⁷⁾ and also to the remedy by declaration: see Pyx Granite Co. v. Minister of Housing (1)."

22. It is significant, I think, that the 3 cases cited in Peachey were all concerned with prerogative orders. Bowen L.J. in Re Nathan⁽⁸⁾ said at 478: "If, therefore, there is no other means of obtaining justice, the writ of mandamus is granted to enable justice to be done." Thus, if there is an alternative statutory remedy or procedure, mandamus will not lie. Such a rule does not apply in the case of a declaration, though it is a factor that may influence the exercise of the Court's discretion.

23. In Argyle Motors (Birkenhead) Ltd. v. Birkenhead Corporation⁽⁹⁾ it was conceded, in an interlocutory application to strike out the statement of claim, that, although the Lands Tribunal was a competent tribunal to determine the questions of law and fact arising in the case, the Oburt had jurisdiction to determine questions arising on the construction and legal effect of a private Act of Parliament. This case went to the House of Lords,⁽¹⁰⁾ but, the trial being restricted to a preliminary issue, there was no further reference to the question of jurisdiction. It is of no little significance that the concession as to jurisdiction was made by a distinguished Chancery lawyer, Mr. S.W. Templeman, Q.C., now Templeman L.J. It is true, of course, that in that case there was no threatened duplication of proceedings in the Lands Tribunal while the action was pending.

24. Mr. Widdicombe relies on the House of Lords decision in Ealing London Borough Council v. Race Relations Board.⁽¹¹⁾ "In that case there was statutory provision, whereby proceedings brought by the Race Relations Board could be heard only in a nominated County Court. It was held that, in the case of proceedings against the Board, the Court's jurisdiction was not ousted. The plaintiff did not have to stand idly by until it was sued by the Board.

25. If I thought that Lord Denning, in Peachey, was really addressing himself to the question of whether the Court had jurisdiction to make a declaration in matters within the jurisdiction of the Lands Tribunal, that would be persuasive authority for holding that such jurisdiction was exclusive. But he was, in the first place, dealing with mandamus and certiorari, to which different considerations apply. There was an alternative specific remedy, had the corporation wished to attack an individual hereditament, but this was clearly impracticable where the attack was against the list as a whole; there were 31,656 hereditaments, in respect of which separate proposals would have to be made. Where there is an effective alternative remedy, the Court will not permit the use of prerogative orders. In the example given by Lord Denning, therefore, neither mandamus or certiorari would have been granted. I do not think this dictum is sufficient authority for the proposition that the High Court has no jurisdiction to grant declarations in the case of individual assessments. I hold that this Court has jurisdiction to entertain the present application.

26. Having found that the Court's jurisdiction is not ousted, it is not necessary to deal with Mr. Widdicombe's submission that, by virtue of the order of Mr. Registrar Ryan, who had to deal with substantially the same issues, the matter is res judicata in the wider sense.

27. The remaining question is whether I should exercise my discretion in limine and refuse to grant the declarations. There can be no res judicata here, since the registrar was not concerned with discretion.

28. I have also been referred to a number of authorities on this aspect of the case, but here it is necessary to tread warily. Each case was decided on its own facts and it is the special circumstances of this case that will ultimately govern my decision.

29. In Grand Junction Waterworks Co. v. Hampton Urban District Council⁽¹²⁾ proceedings in a statutory tribunal had already commenced when the plaintiff tried to invoke the jurisdiction of the High Court. Stirling J., in refusing the declaration sought, said: "In these matters as to building lines the legislation has provided a cheap and short mode of obtaining a decision on the point in question and it would be a matter of regret if a different and more expensive mode of obtaining a decision were to be habitually resorted to, or resorted to in the absence of very special circumstances."

30. It must be borne in mind, however, that that was a 19th century case, the question at issue was an unsophisticated one, as were most of the problems facing local authorities in that era. When one looks at the complexities with which the court of trial in this case may be faced, the contrast between then and now is very great.

31. The defendant also relies on Smeeton v. A.G.⁽¹³⁾. This was a revenue case, in which the plaintiff denied his liability to furnish a return to the Commissioners and sought a declaratory judgment to that effect. The Court in the exercise of its discretion, refused to make a declaration, being of opinion (1) that the elements of invalidity and public interest present in Dyson v. A.G.⁽¹⁴⁾ and Burghes v. A.G.⁽¹⁵⁾ were absent, and that the real question was whether the plaintiff's business was within the section or not, and (2) that it was not desirable that cases of this character, in which the right of appeal prescribed by the Act was available to the plaintiff if dissatisfied with his assessment, should be withdrawn from the Court constituted for the purpose of dealing with revenue cases.

32. Mr. Widdicombe seeks to align the present case with Dyson, in which a declaration was granted, on the grounds of public interest. In Dyson's case, the Commissioners of Inland Revenue had issued a form which required the recipients to supply information that the Commissioners were not entitled to exact from anyone and had also required the plaintiff to make this return within less than the statutory period.

33. There is no doubt that there is a lot of money involved in this application and it is, therefore, a matter of importance. I do not think, however, that it involves the degree of public interest that Peterson J. in Dyson had in mind. There are no other floating docks in Hong Kong and there are no pending proceedings against other vessels, to which different considerations may apply in any event.

34. Furthermore, in the cases of Dyson and Burghes, the only way of testing the legality of the Commissioners' requirement was by an action for a declaration, or by defending proceedings for the enforcement of the penalties.

35. The next case is Pyx Granite Co. Ltd. v. Minister of Housing and Local Government & Others.⁽¹⁾ The Court was concerned, as stated above, primarily with the question of jurisdiction. A declaration was granted, but the alternative remedy was by ministerial decision. Viscount Simonds said at p.287 -

"It is surely proper that in a case like this involving as many days of argument showed, difficult questions of construction of Acts of Parliament, a court of law should declare what are the rights of the subject who claims to have them determined. I do not dissent from the contention of the respondents that, where the administrative or the quasi-judicial powers of the Minister are concerned, declaratory judgments should not readily be given by the court. But here, if ever was a case where the jurisdiction could properly be invoked. It might even be thought surprising that the Minister should not be glad to have such questions authoritatively determined."

In this application, however, there is no danger that the plaintiffs may be kept out of court. There will be a judicial determination in any event.

36. In Punton & another v. Minister of Pensions and National Insurance (No. 2)⁽¹⁶⁾, the Court of Appeal held that the High Court had no jurisdiction to grant a declaration that the National Insurance Commissioner had wrongly held the plaintiffs to be disentitled to unemployment benefit. However, the Court held that, even if the High Court had had jurisdiction, the trial judge had correctly exercised his discretion to refuse the declaration. The plaintiffs had failed to exercise their right to apply for certiorari within 6 months and litigants should not be encouraged to wait until the time has expired and then come to court.

37. Mr. Kaplan places reliance on Punton's case, but, proceedings having already taken place before the Commissioner and such a long time having passed, its relevance to the present case is reduced. As Davies L.J. said at 239 -

"It seems to me that in the light of the provisions of the Acts and of the regulations which have been referred to by my Lord - provisions which emphasise the need for speedy and final decision - it would be quite preposterous to think that in those circumstances it would be permissible for the insurance officer to go to the court, perhaps years later, and ask for a declaration that the decision of the commissoner was wrong in law."

38. In Tso Joe Tak & Others v. A.G.⁽¹⁷⁾, O'Connor J. said "Whether an action should be stopped in limine very much depends on the facts of the particular case." As to the exercise of discretion the learned judge quoted Lord Radcliffe in Ibeneweka v. Egbuna⁽¹⁸⁾ at p.224 -

"The general theme of judicial observations has been to the effect that declarations are not lightly to be granted. The power should be exercised 'sparingly', with 'great care and jealousy', with 'extreme caution', with 'the utmost caution'. These are indeed counsels of moderation, even though as, Lord Dunedin once observed, such expressions afford little guidance for particular cases. Nevertheless, anxious warnings of this character appear to their Lordships to be not so much enunciations of legal principle as administrative cautions issued by eminent and prudent judges to their, possibly more reckless, successors. After all, it is doubtful if there is more of principle involved than the undoubted truth that the power to grant a declaration should be exercised with a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making. Beyond that there is no legal restriction on the award of a declaration."

39. In that case, O'Connor J. struck out the statement of claim and stayed the action, which would have involved the trial of issues of fact shortly to be tried in a criminal court. He considered, however, that if the action were framed as a question of law alone, on the construction of the ordinance, it would be proper to proceed in the High Court, a difficult question of construction being involved.

40. It is incumbent upon me, therefore, to consider the issues involved in this case and, bearing in mind the principles referred to above, to decide whether this is a proper case for the exercise of the Court's discretion.

41. Broadly speaking, I am asked to declare:-

42. The docks are moored to large concrete blocks placed on the sea bed off Tsing Y Island. When floating they rise and fall with the tide and do not normally touch the sea bed. They submerge to take in a ship and float up again to sea level. After repairs have been carried out, they submerge to release the ship and again float up to their normal positions. The mooring chains may be detached, in an operation that normally lasts several hours. The dock may then be towed away be tugboats for relocation.

43. The dock owners hold leases of the sea bed above which the docks are moored and also of the adjacent foreshore. Submersible cables and pipelines supply electricity, telephones and water from shore to dock. In the case of the "Whampoa", a concrete pier gives vehicular assess.

44. The docks are registered as vessels subject to the Merchant Shipping Ordinance and an annual licence fee is payable. The Director of Marine exercises jurisdiction over them in survey and safety matters. Whether his jurisdiction extends to the location of the dock is uncertain. There is also a slight difference of opinion as to the length of time it takes to prepare the site and to attach the mooring chains to the dock.

45. A more serious dispute of fact concerns the concrete blocks. The defendant alleges that it is necessary to excavate large trenches in the sea bed. The plaintiffs deny this and say they can simply be placed on the sea bed and will sink into the mud of their own accord. Pits were excavated purely for convenience in locating the blocks and to provide an initial positive holding force by submerging the blocks in mud.

46. In the proceedings before the registrar, counsel who then appeared for the plaintiffs, conceded that the sea bed lease was rateable. Mr. Widdicombe has reserved his position on this question. What concerns me is that, if the Court is required to decide this issue, it my be necessary to make a declaration in terms different from those prayed. In that event, unless the valuation of the rateable portion is agreed, the matter will reach the Lands Tribunal anyway. It is also possible to envisage circumstances in which the Court of Appeal may have to deal with appeals from both this Court and the Lands Tribunal on different aspects of the same dispute. In these circumstances there is a strong argument in favour of the whole matter being dealt with in the same forum.

47. Mr. Widdicombe submits, however, that it is doubtful whether the Lands Tribunal has power to amend an interim valuation. Its jurisdiction is contained in section 44(1) of the Rating Ordinance, which provides:

"44(1) The Lands Tribunal shall hear and determine the appeal and may -

48. The provisions relating to interim valuations are contained in section 25 and section 26 of the ordinance. They make no reference to the amendment of an interim valuation by the tribunal, it is true, but that is unnecessary because, by virtue of section 26(3), the Collector of Rates is required to amend the valuation list in accordance with the interim valuation. Section 44(1)(c) gives the tribunal specific power to order further amendment. If, for any reason, the Collector of Rates fails to amend the list, the tribunal has residual power under section 44(1)(a) to make the necessary order.

49. Mr. Kaplan submits that, if the matter proceeds in this Court, a declaration will be ineffective. There is no application for mandamus. Could the Commissioner ignore a declaration by this Court? Although the situation is not provided for in the Rating Ordinance, in practice there can be no doubt that the Commissioner would abide by the Court's decision and would invite the Lands Tribunal to make a consent order in accordance with the declaration.

50. Mr. Widdicombe says that complex issues of law will be raised and submits that the High Court is a better equipped and more authoritative forum than the Lands Tribunal. It may be more authoritative, though I do not think this means very much, when a path lies from both courts to the Court of Appeal, which will, I am sure, be trodden one day whatever my decision. As to being better equipped, I am not at all sure. Perusal of the Lands Tribunal Law Reports reveals decisions that involve highly complex questions of law and fact. The president, who as I have pointed out, is a District Judge, has the great advantage of sitting with a professional valuer and sometimes a practising lawyer as well. It is not just a piece of valuation machinery.

51. I have held that the mere existence of an alternative remedy is no bar to jurisdiction. It is, however, a factor I must weigh in the exercise of my discretion. The Lands Tribunal has been specifically created to deal with these questions and, if it is to be by-passed, there should be a good reason.

52. Delay has been mentioned. There is going to be delay in reaching ultimate decision, whichever forum deals with the matter. Considering the sums of money and the points of law involved, this is to be expected. The same argument applies so far as costs are concerned. If agreement on the facts can be reached, it may be that the Lands Tribunal will reserve the question of law for the consideration of the Court of Appeal under section 44(3) of the Rating Ordinance. Though it should not be thought that I am advocating that course.

53. From every point of view, it seems to me that the advantage lies in leaving the Lands Tribunal to deal with the whole matter. For these reasons I am of the opinion that the declarations should not be granted. I give judgment for the defendant with costs.

Representation:

Mr. Widdicombe, Q.C. and Miss Maria Yuen (Deacons) for plaintiff

Mr. Kaplan, Senior Asst. Crown Solicitor and Mr. Strawbridge, C.C. for defendant

(1) (1960) A.C. 260.

(2) (1957) 2 Q.B. 136 at 148.

(3) (1966) 1 Q.B. 380

(4) (1898) A.C. 387

(5) (1907) 2 K.B. 764

(6) (1934) A.C. 356

(7) (1957) 1 Q.B. 574

(8) (1884) 12 Q.B.D. 461

(9) (1971) P & C reports 829

(10) (1955) A.C. 99

(11) (1972) A.C. 342

(12) (1898) 2 Ch. 331

(13) (1917) 1 Ch. 85

(14) (1912) 1 Ch. 158

(15) (1912) 1 Ch. 173

(16) (1964) 1 W.L.R. 226

(17) (1980) H.K.L.R. 120 at 122 - 3

(18) (1964) 1 W.L.R. 219 at p.224