Re K.O.Y. Investment Co Ltd

HCMP001472/1982

M.P. No. 1472 of 1982

Crown Lands Resumption Ordinance Cap. 124. Application of the Rules of Natural Justice - no necessity for the Governor to give notice of his intention to resume land.

M.P. No. 1472 of 1982.

IN THE SUPREME COURT OF HONG KONG

MISCELLANEOUS PROCEEDINGS

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Coram: Full Bench. (Hon. Mayo, J., Hon. Hunter, J., Hon. Mantell, J.)

Date of hearing: 10, 11, 12, 15 and 16 November 1982

Date: 17 December 1982

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JUDGMENT

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Mayo, J.

1. The applicants were the owners of property which has been resumed by the Crown pursusant to the provisions contained in the Crown Lands Resumption Ordinance Cap. 124. The land in question consists of 9 three-storey terrace houses in Causeway Bay (hereinafter referred to as the said premises) which are required by the Crown in connection with an Urban Improvement Scheme for the Hong Kong Housing Society. The applicants are seeking to obtain by way of Judicial Review an Order of Certiorari to quash the order for resumption of the said premises on the ground that they received no notice of the intended resumptions by the Crown and accordingly the rules of Natural Justice had not been observed. During the course of the hearing leave was given to amend the relief which was being sought by the addition of alternative relief by way of an order of mandamus to provide the applicants with a reasonable opportunity to make representations on the order of resumption on the basis that the order of resumption had not yet been made and to accordingly require the Crown to reconsider the matter. The applicants are also seeking a declaration that the order for the resumption of the said premises was null and void.

2. Mr. Widdicombe who was representing the applicants said that the applicants had been seriously considering the possibility of redeveloping the land and with this in mind had obtained vacant possession of most of the property. They had also, after the notice had been served upon them, given instructions to an architect to draw up plans for the redevepment of the property and copies of these plans were before the court. Having regard to the overall policy of the Hong Kong Housing Soceity it appeared that the proposals for development of the property were similar to the type of development which was likely to be undertaken by the Hong Kong Housing Society mainly to provide housing for middle class residents in the colony.

3. In England the legislation relating to the compulsory acquisition of land is very different to the law in the colony. There are provisions for public inquiries and other opportunities are available to owners of property to put forward any representations they may wish to make. In Hong Kong the position is governed by the Crown Lands Resumption Ordinance Cap. 124. This Ordinance does not contain similar provisions to those which are found in the English Legislation. Section 3 of the Ordinance is the operative section for the resumption of land. It provides as follows:

"Whenever the Governor-in-Council decides that the resumption of any land is required for a public purpose, the Government may order the resumption thereof under this Ordinance."

The Ordinance is a short one. Section 4 provides for the service of notices and the gazetting of notices which are issued and provides that the land the subject of the resumption order will be resumed on the expiration of one month from the serving of the notice unless the Governor shall have authorised giving of a longer period of notice. There are then provisions for the assessment of compensation to owners. Section 9 bars actions against the Crown. It reads:

"Subject to the provisions of this Ordinance, no action or suit shall lie against the Crown or against any other persons for any loss or damage suffered by any person as a result of the resumption of any land under this Ordinance."

4. Mr. Widdicombe said that he would be putting forward three legal propositions in support of his argument that a writ of certiorari should issue. These were (1) that the statutory power to take or interfere with a person's right must be exercised in accordance with the rules of Natural Justice or fairly. This meant, inter alia, that the person affected must be given an opportunity of being heard in his defence before the power is exercised. (2) This right could only be excluded if there were clear and express words to that effect in the statute. (3) The exact requirements of fairness depend on the circumstances of the case. The circumstances of the case were such that the applicants would be content with making representations in writing coupled with a meeting with the officers who would in practice be making the decision. He considered that in the circumstances of this particular case it was probably true to state that the applicants had already received sufficient reasons for the decision which had been arrived at and accordingly there would not be any necessity for additional reasons to be furnished. Reference was also made to the correspondence which had been exchanged between the parties and it was evident from this that the Land Officer had not been prepared to accept and consider any representations made by the applicants in any realistic manner. All that had been proposed was that the applicants might wish to petition the Governor.

5. Mr. Widdicombe then cited a number of cases in support of his proposition that in interpreting the provisions of any statute it was incumbent upon a court to ensure that the rules of natural justice were complied with. The first case he cited was the case of Cooper v. The Wandsworth Board of Works ⁽¹⁾. In that case the Council was acting pursuant to legislation which enabled them in certain circumstances to demolish buildings. The owner of land failed to comply with various requirements which were imposed and the Council then proceeded to demolish his property without giving him any prior notification of their intention so to do. It was held that notwithstanding the provisions contained in the relevant legislation the authority could not proceed in this manner without first giving the owner notice of their intentions and an opportunity of being heard on the subject. This case was followed by the case of Smith v. The Queen ⁽²⁾. These cases were followed by a number of other cases which accepted a similar proposition concerning the principles of natural justice. These cases included the cases of Hopkins v. Smethwick Local Board of Health ⁽³⁾, the Board of Education v. Rice ⁽⁴⁾, Broadbent v. Rotherham Corporation ⁽⁵⁾, Urban Housing Company v. Oxford City Corporation ⁽⁶⁾. There were also other cases of a similar nature. Mr. Widdicombe did however agree that the courts had not in all of these cases held that prerogative writs were appropriate. This was particularly the case where the legislation which was being reviewed contained provisions to safeguard the interests of parties at a later stage. Mr. Widdicombe referred to these cases as being initial step cases where the courts had refused to grant the relief sought by applicants on the ground that they would have an opportunity of making representations at a later stage.

6. From a perusal of all of the cases cited by Mr. Widdicombe it was evident that where the courts had intervened to safeguard the interests of litigants on the grounds that the rules of natural justice must be adhered to it was evident that there was a lis or issue to be determined by the authority under the power which was being exercised. This was a matter of some importance. One would expect that were any authority had to determine an issue relating to the rights of a party that it was essential that the rules of natural justice including the right to a fair hearing must be strictly adhered to. However, it would appear from the cases which were reviewed that the courts had not intervened to impose a requirement for the adherence to the rules of natural justice where the decision which was being reviewed was a decision of a purely administrative nature. This was the case until the decision of the House of Lords in the case of Ridge v. Baldwin ⁽⁷⁾. This was a House of Lords case which reviewed all of the law on this subject and called in question distinctions which had previously been made between judicial or quasi, judicial decisions on the one part and administrative decisions on the other part. It was not satisfactory to make arbitrary decisions between these different types of discretion and an attempt was made to narrow the previous differentiation.

7. Lord Reid at page 68 of the report makes comment upon the position of parties who have been deprived of property rights or other privileges they may have acquired. He cited with approval Cooper v. The Wandsworth Board of Works ⁽¹⁾ and refers in particular to the judgment of Erle C.J. where he states that the power being referred to was subject to a qualification repeatedly recognised that no man is to be deprived of his property without this had been applied to:

"Many exercises of power which in common under-standing would not be at all a more judicial proceeding than would be the act of the District Board in ordering a house to be pulled down."

8. He also referred with approval to the case of Deverteuil v. Knaqqs ⁽⁸⁾ at page 70 of the report. He quoted from the judgment of Lord Parmoor as follows:

"The acting Governor was not called upon to give a decision on an appeal between the parties, and it is not suggested that he holds the position of a judge or that the appellant is entitled to insist on the forms used in ordinary judicial procedure but he had a duty of giving to any person against whom complaint is made a fair opportunity to make any relevant statement which he may desire to bring forward a fair opportunity to correct or contraverse any relevant statement brought forward to his prejudice."

At page 72 of the report Lord Reid dealt with the differences between judicial and administrative acts. He deals with this problem in this way:

"Sometimes the functions of a minister or department may also be of that character, and then rules of natural justice can apply in much the same way. But more often their functions are of a very different character. If a minister is considering whether to make a scheme for say, an important new road his primary concern will not be with the damage which its construction will do to the rights of individual owners of land. He will have to consider all manner of questions, of public interest and, it may be, a number of alternative scheme. He can not be prevented from attaching more importances to the fulfilment of his policy than to the fate of individual objectors, and it would be quite wrong for the court to say that the minister should or could act in the same kind of way as a Board of Works deciding whether a house should be pulled down."

9. However in bearing all of these considerations in mind he held that in the particular circumstances of the case which he was considering where a chief constable had been dismissed without being furnished any opportunity of defending himself, the authority was not able to take such action against the chief constable without compliance with the rules of natural justice. Lord Morris of Borth-y-Gest also referred to Cooper v. The Wandsworth Board of Works ⁽¹⁾ with approval and added that although there may be no positive words in a statute requiring that a party shall be heard yet the justice of the common law will supply the omission of the legislature. He was quoting from the judgment of Byles J. in that case. Lord Hodson also dealt with the difficulties which arise in distinguishing between judicial and administrative acts. He accepted that difficulties did arise in reconciling some of the authorities in these cases. He had this to say on page 130 of the report:

"Certain matters seem to me clearly to emerge. One is that the absence of a lis or dispute between opposing parties is not a decisive feature although no doubt the presence of a lis would involve the necessity for the application of the principles of natural justice. Secondly the answer in a given case is not provided by the statement that the giver of the decision is acting in an executive or administrative capacity as if that was the antithesis of a judicial capacity. The cases seem to me to show that persons acting in a capacity which is not on the face of it judicial but rather executive or administrative have been held by the courts to be subject to the principle of natural justice."

It can be seen from the judgments referred to that administrative decisions can not be excluded from the operation of the rules of natural justice.

10. Mr. Widdicombe went on to argue that a number of cases which had followed Ridge v. Baldwin ⁽⁷⁾ assisted him in his submission that the rules of natural justice applied to administrative decisions in a similar manner to judicial or quasi-judicial decisions. In Schmidt v. The Secretary of State for Home Affairs ⁽⁹⁾. Lord Denning had said at page 170 of the report that the distinction between administrative and judicial acts no longer exists. Lord Denning developed this theme further in Regina v. Gaming Board for Great Britain Ex parte Benaim and Khaida ⁽¹⁰⁾. This was a case concerning an application for a gaming licence. At page 430 Lord Denning said:

"The statute says in terms that in determining whether to grant a certificate, the board 'shall have regard only' to the matters specified. It follows, I think, that the board have a duty to act fairly. They must give the applicant an opportunity of satisfying them of the matters specified in the sub-section. They must let him know what their impressions are so that he can disabuse them. But I do not think that they need quote chapter and verse against him as if they were dismissing him from an office, as in Ridge v. Baldwin ⁽⁷⁾ or depriving him of his property as in Cooper v. The Wandsworth Board of Works ⁽¹⁾. After all, they are not charging him with doing anything wrong. They are simply inquiring as to his capability and diligence and are having regard to his character, reputation and financial standing. They are there to protect the public interest, to see that persons running the gaming clubs are fit to be trusted."

Mr. Widdicombe then referred to two House of Lords cases where the Law Lords attempted to develope the principles arising out of Ridge v. Baldwin ⁽⁷⁾. These cases are the cases of Wiseman v. Borneman ⁽¹¹⁾ and Pearlberg v. Varty ⁽¹²⁾. In the former case Lord Guest had this to say on page 310 of the report.

"It is reasonably clear on the authorities that where a statutory tribunal has been set up to decide final questions affecting parties' rights and duties, if the statute is silent upon the question, the courts will imply into the statutory provision a rule that the principles of natural justice should be applied. This implication will be made upon the basis that Parliament is not to be presumed to take away parties' rights without giving them an opportunity of being heard in their interest. In other words, Parliament is not to be presumed to act unfairly."

At page 317 of the report Lord Wilberforce said:

"I am not, therefore, satisfied with an approach which merely takes the relevant statutory provision (Finance Act, 1960, section 28(4)), subjects it to a literal analysis and cuts straight through to the conclusion that Parliament has laid down a fixed procedure which only has to be literally followed to be immune from attack. It is necessary to look at the procedure in its setting and ask the question whether it operates unfairly to the taxpayer to a point where the courts must supply the legislative omission."

In the latter case which was also a tax case I will refer to extracts from three of the opinions which shed further light on this subject. At page 540 of the report Lord Hailsham said:

"Despite the majestic conception of natural justice on which it was argued, I do not believe that this case involves any important legal principle at all. On the contrary, it is only another example of the general proposition that decisions of the courts on particular statutes should be based in the first instance on a careful, even meticulous, construction of what that statute actually means in the context in which it was passed. It is true, of course, that the courts will lean heavily against any construction of a statute which would be manifestly unfair. But they have no power to amend or supplement the language of a statute merely because on one view of the matter a subject feels himself entitled to a larger degree of say in the making of a decision than the statute accords him. Still less is it the functioning of the courts to form first a judgment on the fairness of an Act of Parliament and then to amend or supplement it with new provisions so as to make it conform to that judgment. The doctrine of natural justice has come in for increasing consideration in recent years, and the courts generally, and your Lordships' House in particular, have, I think rightly, advanced its frontiers considerably. But at the same time they have taken an increasingly sophisticated view of what it requires in individual cases."

At page 545 Biscount Dilhorne says"

"I would only emphasise that one should not start by assuming that what Parliament has done in the lengthy process of legislation is unfair. One should rather assume that what has been done is fair until the contrary is shown."

Then at page 547 of the report, Lord Pearson comments upon the speech of Lord Guest in Wiseman v. Borneman ⁽¹¹⁾:

"A tribunal to whom judicial or quasi-judicial functions are entrusted is held to be required to apply those principles in performing those functions unless there is a provision to the contrary. But where some person or body is entrusted by Parliament with administrative or executive functions there is no presumption that compliance with the principles of natural justice is required, although, as 'Parliament is not to be presumed to act unfairly,' the courts may be able in suitable cases (perhaps always) to imply an obligation to act with fairness. Fairness, however, does not necessarily require a plurality of hearings or representations and counter-representations. If there were too much elaboration of procedural safeguards, nothing could be done simply and quickly and cheaply. Administrative or executive efficiency and economy should not be too readily sacrified. The disadvantage of a plurality of hearings even in the judicial sphere was cogently pointed out in the majority judgments in Cozens v. North Devon Hospital Management Committee ⁽¹³⁾."

At first sight it may not be an entirely simple matter to reconcile the judgments I have just referred to. One attempt to do so was undertaken by Wootten J. in the Equity Division of the Courts of New South Wales, Australia, Dunlop v. Woollahra Municipal Council ⁽¹⁴⁾. The position is well summarised in paragraph 2 of the headnote.

"The functions judicially, even if often inappropriately, classified as 'judicial' or 'quasi-judicial' attract the rules of natural justice, including the principles of audi alteram partem and nemo iudex in re suas, and other duties arising from an overall duty of fairness. Other administrative functions, not so classified, attract a duty to act fairly."

This statement of the law seems to me to be particularly appropriate and to accommodate the views expressed in the other judgments referred to.

11. Mr. Widdicombe submitted that a number of principles emerged from the cases he had cited. He argued that the previous distinction between administrative and judicial acts had either been severely reduced or extinguished and that any Body or Tribunal which was exercising administrative powers would have to adhere to the principles of natural justice. The references in the various judgments to a requirement for fairness were synonymous with the requirements for natural justice. I do not accept that the authorities establish this contention. I consider that Wootten J's assessment of the apparently conflicting views far more accurately reflects the true situation.

12. He further argued that it was evident from the wording of section 3 of the Crown Lands Resumption Ordinance Cap. 124 that it was envisaged that the powers which were being exercised were so exercised in three different stages. In support of this argument he referred to the fact that in the first part of the section reference was made to power being exercised by the Governor-in-Council whereas in the later part of the section reference was made to the Governor. This indicated different stages. He suggested that the first stage involved the decision of the Governor-in-Council to acquire a particular piece of land for a public purpose. The second stage was the implementation of that decision. The third stage was the serving of the requisite notices required by section 4. If I understood his arguments correctly, he conceded that there could be no question of the Governor-in-Council entertaining representations from owners at the first stage namely the process of deciding which property should be acquired. However, he argued that at the second stage a duty should be written into the legislation requiring the Governor to act fairly when the decision was implemented and the decision was made to proceed with the acquisition of the land. The basic unfairness of the procedure adopted by the Governor under the legislation was to proceed with the acquisition of the land without giving prior notification to parties who were adversely affected by the order. He further argued that even if he was unable to sustain this contention there was nonetheless a duty imposed upon the Governor to entertain representations from an owner so affected even if on the face of it the decision had already been made. His authority for this was the case of R v. The Secretary of State for the Environment Ex Parte Brant London Borough Council and Others ⁽¹⁵⁾. In that case the minister had refused to hear representations from local authorities liable to a reduction of a block grant on the grounds of their excessive expenditure. A Divisional Court held that the minister's failure to entertain such representations indicated that he had fettered his discretion and in those circumstances his decision was invalid and would be quashed. In his judgment Ackner L.J. had not considered it to be a relevant issue that it was highly improbable that the minister would have acceded to the representations which the Council was attempting to advance. He adopted the words of MeGarry J. in John v. Rees ⁽¹⁶⁾ when he said at page 402:

"As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change."

13. Mr. Barlow who was representing the Crown put forward 5 main arguments in support of his contention that the application should be dismissed. His first argument was to the effect that if section 3 of the Crown Lands Resumption Ordinance Cap. 124 was to be read in conjunction with section 38 of the Interpretation and General Clauses Ordinance Cap. 1 it could be seen that the decision of the Governor could not be judicially reviewed as it was not of a discretionary nature. I have already set out section 3 earlier in this judgment. Section 38 reads as follows:

"Where any Ordinance confers power upon any person to -

(a)    make any subsidiary legislation;

(b)    make any instrument; or

(c)    exercise any power,

and the Ordinance conferring the power prescribes conditions, subject to the observance, performance or existence of which any such power may be exercised, such conditions shall be presumed to have been duly fulfilled if in the subsidiary legislation or instrument exercising the power there is a statement that the subsidiary legislation or instrument is made, or the power exercised, in exercise of, or in pursuance of, the power conferred by such Ordinance, or a statement to the like effect."

Mr. Barlow maintained that when the Governor made his order for the resumption of the land, he was exercising the power in the manner referred to in section 38. I do not see any merit in this argument. The Governor could at any time decide not to proceed with the resumption. This can be seen from section 46 of the Interpretation and General Clauses Ordinance Cap. 1. This provides:

"46.   Where any Ordinance confers power upon any person to make, issue or approve any proclamation, order, notice, declaration, instrument, notification, licence, permit, register or list, such power shall include power -

(a) ...

(b) ...

(c) to withdraw approval of any proclamation order, notice, declaration,  instrument, notification, licence, permit, register or list so approved; and

(d) ..."

However, the main force of Mr. Barlow's submission was based upon the assumption that the power which was being exercised by the Governor was a discretionary power and he made reference to the case law on the subject. He agreed with Mr. Widdicombe's submission that Ridge v. Baldwin ⁽⁷⁾ clearly established that it was open to the courts to review administrative decisions. However he did not agree that the same principles applied to the review of an administrative decision as those relating to judicial decisions. He agreed that the case law indicated that where a judicial or quasi-judicial decision was being reviewed the rules of natural justice had to be observed. When an administrative decision was being made it was only necessary for the tribunal making the decision or exercising the power to be fair. Natural justice included the concept of fairness. The converse was not true. It was obviously the case that where any tribunal was exercising judicial or quasi-judicial functions greater safeguards would have to be provided for than if the decision being made was purely of an administrative nature. It was necessary to have regard to the nature of the discretion or power which was being exercised. It was also necessary to consider the legislation conferring the powers in its overall context. The policy and objects of the statute would have to be considered without any presumptions. Mr. Barlow's interpretation of the case law dealing with the distinction between the courts attitude towards judicial and administrative act is borne out by two passages appearing in the 4th edition of de Smith's Judicial Review of Administrative Action Fourth Edition ⁽¹⁷⁾. In the chapter dealing with the classification of functions the author deals with tests for identifying judicial functions. At page 85 he says:

"There is, however, an obvious difference of substance and degree between a decision that X is or is not liable to pay a certain amount in respect of a particular transation, and a decision that it is in the public interest that Y should or should not be granted an office development permit. In the first case the function is typical judicial; in the second the function is typically administrative inasmuch as it entails the exercise of almost unfettered discretionary power. The wider the 'public policy' content of an administrative decision the more reluctant may the courts be to require the repository of the discretion, to 'act judicially' according to natural justice."

At page 297 there is discussion upon the subject as to whether there are unreviewable discretionary powers. The author says:

"Broadly speaking, however, one can say that the courts will show special restraint in applying tests of legality where (i) a power is exercisable in 'emergency' conditions, (ii) an executive power, the exercise of which is not subject to appeal, is used to exclude, remove or deport aliens or other non-patrial persons on policy grounds; or (iii) the 'policy' content of the power is large and is exercise affects large numbers of people. Their reluctance to intervene is likely to diminish the more closely the wording and context of the power approximate to those of a discretion typically exercised by a tribunal. The willingness of the courts to intervene may also depend on the nature of the interest affected by the exercise of discretion."

14. Mr. Barlow then went on to consider some cases where powers had been exercised under statutory authority. He first considered the case of Associated Provincial Picture Houses, Ltd. v. Wednesbury Corporation ⁽¹⁸⁾. In that case which concerned the issuance of a licence to run a cinema on a Sunday the local authority had only been prepared to grant the licence on the basis that children under the age of 15 should be excluded. Clearly this was the type of case where the policy content was high. This being the case the courts are reluctant to intervene. Lord Greene, M.R. said at page 685 of the report :

"I do not wish to repeat what I have said, but it might be useful to summarise once again the principle, which seems to me to be that the court is entitled to investigate the action of the local authority with a view to seeing whether it has taken into account matters which it ought not to take into account, or, conversely, has refused to take into account or neglected to take into account matters which it ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that the local authority, nevertheless, have come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, again, I think the court can interfere. The power of the court to interfere in each case is not that of an appellate authority to override a decision of the local authority, but is that of a judicial authority which is concerned, and concerned only, to see whether the local authority have contravened the law by acting in excess of the powers which Parliament has confided in it."

Mr. Barlow referred to two other similar cases which seem to me to be of relevance. The first was the case of Essex County Council v. Ministry of Housing and Local Government ⁽¹⁹⁾. Here the local authority was endeavouring to question the minister's decision concerning prospective plans which were being considered for the creation of an air port. Plowman J. dismissed the application on the grounds that:

"on its true construction of section 14 of the Town and Country Planning Act, 1962, it imposed on the Minister no duty to act judicially and his power to make a development order under the action was purely administrative or legislative, and was exercisable in his discretion free from judicial control."

The final case on this aspect of the matter is Padfield and Others v. Minister of Agriculture, Fisheries and Food and Others ⁽²⁰⁾. This case involved complaints which were made by milk producers to the Milk Marketing Board which exercised various statutory duties. Lord Morris of Borth-y-Gest dealt with the exercise of power of the minister at page 706:

"If the Minister proceeded properly to exercise his judgment then, in my view, it is no part of the duty of any court to act as a court of appeal from his decision or to express any opinion as to whether it was wise or unwise. The Minister was given an executive discretion. In speaking of a power given by statute to a local authority to grant certain licences Lord Greene, M.R. said in his judgment in Associated Provincial Picture Houses, Ltd. v. Wednesbury Corporation ⁽¹⁸⁾:

'The law recognises certain principles upon which that discretion must be exercised, but within the four corners of those principles the discretion is an absolute one and cannot be questioned in any court of law.' "

15. At this stage it is desirable to consider the Crown Lands Resumption Ordinance Cap. 124. The Ordinance was enacted in 1980. Its stated purposes is: "to facilitate the resumption of Crown Lands required for public purposes". The procedure empowering the Governor to acquire land is a simple one and unlike the Town Planning Ordinance Cap. 131 there is no machinery in the Ordinance conferring upon owners of land a right of review of decisions which are made which may be adverse to their interests. I do not think that this omission can be inadvertent. Indeed section 9 of the Ordinance which I have already referred to bars actions being taken against the Crown. I do not accept Mr. Widdicombe's interpretation of the section as simply referring to the compensation provisions. If the section is considered in the context of the Ordinance it clearly has the effect of excluding the type of claim which is being made by the applicants in the present case.

16. I do not think that any of the cases which were cited by Mr. Widdicombe support the three propositions he referred to when he opened his case. The correct approach to these cases is to first inquire what is the nature of the discretion which is being exercised. The answer to this question is that in the present case the Governor both as Covernor-in-Council and as Governor was exercising a purely administrative function. His main concern was the interest of the community at large. He had to decide whether the land in question was suitable for the public purpose which has been stated. I do not think that it assists the applicant's case to attempt to divide the functions which are exercisable under section 3 into component parts. I accept that the Governor had a duty to act fairly. This is not the same thing as being required to adhere to the rules of natural justice. I agree with Mr. Barlow's interpretation of the case law that a duty to act fairly does not include a requirement of giving notice to the owner of land that it is the Crown's intention to resume his land. By the same token no obligation can be written into the Ordinance requiring the Governor to entertain representations from an owner in respect of the resumption. For the reasons I have given this application is dismissed in its entirety. Costs of the application will be borne by the applicants.

Hunter, J.

17. As my Lord has pointed out we are concerned in this application with the powers and obligations of the Governor under section 3 of the Crown Lands Resumption Ordinance (the Ordinance) (Cap. 124). The fundamental issue arising on the application is whether the Governor, before ordering resumption under this section, is required to give notice to the owners of the land in question, to enable them to take representations to him. The applicants invite the court to hold that the Governor's obligation to act in accordance with the principles of natural justice or fairly (they ascribed the same meaning to both expressions) imposes such an obligation upon him. It being admitted that no prior warning was here given, the applicants submit that the notice of 17th May 1982 is void and should be quashed. Mr. Barlow on behalf of the Governor denies the existence of any such obligation.

18. Counsel are agreed that the answer is to be found in the true construction of the Ordinance. They differ as to the way in which this question of construction should be approached. The notice, says the applicants, deprived them of property rights. There is a long line of authority in the United Kingdom that the rules of natural justice, and especially the audi alteram partem rule should first be complied with before property rights are lost. Therefore the applicants say, these rules are presumed to apply unless the intention of the legislature to exclude them is clearly shown by "express words of plain intendment", Commissioner of Police v. Tanos ⁽¹⁾ per Dixon C.J. at p. 396: cited with approval by Lord Wilberforce in Wiseman v. Borneman ⁽²⁾ at p. 318. This presumption applies, say the applicants, whether the function in question can be said to be quasi-judicial or administrative. This difference, or labelling, is said no longer to be of significance in the modern authorities since at least re H.K. 1967 2 Q.B. 617, where the test of fairness has been applied to both.

19. The contrary view advanced on behalf of the Governor is that the first question to ask is whether the function is quasi-judicial or administrative. If the answer is quasi-judicial the applicant's approach is right. But if it is administrative the legislation in question must be looked at as a whole without presumption to ascertain its true intent. Particular reliance is placed upon the decision in Pearlberg v. Varty ⁽³⁾. Here at page 547 D Lord Pearson says:

"A tribunal to whom judicial or quasi-judicial functions are entrusted is held to be required to apply those principles (natural justice) in performing those functions unless there is a provision to the contrary. But where some person or body is entrusted by Parliament with administrative or executive functions there is no presumption that compliance with the principles of natural justice is required, although, as 'Parliament is not to be presumed to act unfairly', the courts may be able in suitable cases (perhaps always) to imply an obligation to act with fairness."

A similar view was expressed by Viscount Dilhorne at page 545 E; and by Lord Hailsham, who expressly agreed with both Lord Pearson and Viscount Dilhorne, at page 540 C.

20. I would be minded to regard those expressions of opinion deliberately expressed in a case held to arise in an administrative context as binding on this court. But in any view I would respectively regard them as correct. The law in this field initially developed in the quasi-judicial context. Willes J's classic formulation in Cooper v. Wandsworth Board of Works ⁽⁴⁾ at page 190 opens with the phrase: "I apprehend that a tribunal ...." He then proceeded to ask: "Now, is the board in the present case such a tribunal?" and went on to examine the nature of the board's functions. Errors crept in when succeeding generations looked more to labels than to substance. But when with its decision in Ridge v. Baldwin ⁽⁵⁾, the House of Lords broke away from this labelling process and reinstated first principles, Lord Reid expressly warned at page 72:

"Sometimes the functions of a minister or department may also be of that character, and then the rules of natural justice can apply in much the same way. But more often their functions are of a very different character."

Without further citation of authority it is sufficient for me in this context to express my appreciation for, and general agreement with, the analysis of Wootten J. in Dunlop v. Woollahra Municipal Council ⁽⁶⁾.

21. I turn now to consider the true construction of the Ordinance in the manner directed by Lord Pearson. Section 3 reads:

"Whenever the Governor-in-Council decides that the resumption of any land is required for a public purpose, the Governor may order the resumption thereof under this Ordinance."

Governor-in-Council means "the Governor acting after consultation with the Executive Council in accordance with Royal Instructions", section 3 of the Interpretation and General Clauses Ordinance (Cap. 1). Section 3 can thus be paraphrased; "Whenever the Governor acting after consultation with the Executive Council decides ... he may order." This suggests to my mind a single process. The Governor may order resumption provided that he first consults the Executive Council

22. In argument the applicants sought to divide section 3 into two stages. Stage 1 was the taking of the decision by the Governor-in-Council. Stage 2 was the personal exercise by the Governor of his discretion to make the order. By specific amendment to their statement under Order 53, made at the hearing, to substitute "Governor" for "Governor-in-Council", the applicants made it clear that they were not seeking certiorari to quash the decision at stage 1 but only the exercise of discretion at stage 2. This was upon the basis that the obligation to act fairly had to be implied into the section at this stage. I am quite unable to accept this approach. As I have indicated I regard this as a single process. But if it can be spilt up in this way and an obligation of fairness has to be read in at all, it seems to me that this must be done at the decision stage, stage 1: not at stage 2 which is merely its implementation. It makes no sense to require the Governor by implication to consult the owners after and not before he has consulted the Executive Council. The only possible implication in my judgment is at stage 1 and it is this that I shall now consider.

23. Reading the Ordinance as a whole, as one must, there are in my opinion a number of factors which individually and collectively point strongly against this implication. These are:-

24. The most compelling factor to set against these considerations is what the applicants claimed to be the manifest unfairness of the contrary view: the taking of their property without any chance to be heard. To one more accustomed to the United Kingdom scene, and the United Kingdom system, this result is indeed surprising and at first sight shocking. But closer examination seems to me to reveal very material differences between the United Kingdom and Hong Kong in this respect. Hong Kong has no freeholders. The leases of one of the properties was put before us. This contains a provision entitling the Governor in the name of Her Majesty and acting qua landlord "to resume ..... for any other public purpose whatsoever" on three months notice. This we were told is a common form provision. It is admitted that in such capacity the Governor would have no obligation whatever to consult. It was also asserted that after a stage 1 section 3 decision, the Governor could have chosen to have given notice not under section 3 but under the lease. Why the one and not the other should give rise to an obligation to consult is not readily apparent. Further it became plain in the course of this application that what was at stake were the profits to be made out of the development of these sites. This was perhaps the main item of "property" of which the applicants were being deprived. But unlike the freeholder with planning permission in the United Kingdom, the applicants had no right to this at all. They only had the hope or expectation that the Government would agree to a variation in their lease provisions and to the lifting of the height restriction, in return for a premium which still made development a viable proposition. The Government of course had no obligation to consent to this; and no consent meant no profit, and no loss under this head at all.

25. The Ordinance has been on the statute book since 1900. It would seem to have satisfied Hong Kong purposes since that time. It is not perhaps as harsh in its particular Hong Kong context as it might at first sight seem. But even if I had thought otherwise, this would not on the principle of Pearlberg v. Varty ⁽³⁾ have entitled me to substitute my own view of what was fair, in face of the clear pointers against a construction requiring prior consultation which I detect in the terms of the Ordinance itself.

26. In my judgment, therefore the applicants were not entitled to receive prior notice of the Governor's intentions or to be consulted. Their claim for certiorari therefore fails. If, as I think they were not entitled to be consulted at any stage under section 3, I can see no basis whatever for reading into the Ordinance any obligation to consult or to provide facilities for consultation thereafter. The alternative claim to mandamus therefore fails also. I accordingly agree with the order proposed by my Lord Mr. Justice Mayo.

Mantell, J.

27. I agree that these applications should be dismissed. I wish to add very few words of my own.

28. The applicants are aggrieved because they have been denied the opportunity to develop this site and to take a profit from its development. That is reasonable. But they have not lost the residue of a 75 year lease. They have lost the residue of a 75 year lease subject to a right of re-entry, upon it being decided that the land is required for a public purpose. Of course, had the Crown proceeded under the lease, the applicants would have been entitled to three months notice rather than the two months they received and it may be that compensation would have been more generous. But here the applicants do not complain that the notice is too short, or that their land is being taken without compensation, or that the compensation is too little. They complain simply that their land is being taken without the opportunity for them to make objection.

29. Do they have that right? On a reading of the Ordinance as a whole and upon consideration of the many authorities cited to the Court, I am driven to the conclusion that they do not. I reach that conclusion with some reluctance because it does seem hard that this should have happened without consultation first taking place. It is a pity, perhaps, that protest made after the event was not handled more diplomatically. The court, however, is not concerned with seemliness. It is concerned with whether or not the Governor had a duty to consult or to hear representations. Whether one regards the process under section 3 as being in one or two parts, it has not been argued, nor could it be, that the Governor was being empowered to act as an adjudicator. That being the case, I respectfully agree with my Lord, Mr. Justice Hunter that a useful starting point is the passage in the speech of Lord Pearson in Pearlberg v. Varty, ⁽¹⁾ to which he has referred; and I am content to follow and adopt his reasoning thereafter. I only add that some support for not interfering after the making of the order is to be found in the case of In re Yeung Chung Ming and others, ⁽²⁾ at p.123 dealing with procedures under this Ordinance and in particular in the judgment of the then Chief Justice, Chief Justice Hogan at p. 130 where he said:

"After the posting of the resumption notice the Hong Kong Ordinance contemplates no contingency; nothing but the ineluctable passage of time."

30. Finally I want to say that there has never been any suggestion or bad faith in this case. In a case where an administrative act is vitiated by bad faith very different considerations will arise.

(1) (1863) 14 Common Bench New Series 180.

(2) (1877) 3 A.C. 614.

(3) (1890) 24 Q.B.D. 712.

(4) (1911) A.C. 179.

(5) (1917) 2 Ch. 31.

(6) (1940) Chancery Division 70.

(7) (1964) A.C. 40.

(8) (1918) A.C. 557.

(9) (1969) 2 Ch. 149

(10) (1970) 2 Q.B. 417.

(11) (1971) A.C. 297.

(12) (1972) 1 W.L.R. 534.

(13) (1966) 2 Q.B. 330.

(14) (1975) 2 NSWLR 446.

(15) (1982) 2 W.L.R. 693.

(16) (1970) Ch. 345.

(17) London Stevens & Sons 1980.

(18) (1947) A.E.R. 680.

(19) (1967) Local Government Reports 23.

(20) (1968) 1 A.E.R. 694.

(1) (1958) 98 C.L.R. 383.

(2) (1971) A.C. 297.

(3) (1972) 1 W.L.R. 534

(4) (1863) 14 C.B. (N.S.) 180

(5) (1964) A.C. 40.

(6) (1975) 2 N.S.W.L.R. 446.

(7) (1948) 1 K.B. 223.

(1) (1972) 1 W.L.R. 534

(2) (1967) H.K.L.R.

Representation:

Mr. D. Widdicombe, Q.C., Mr. D.Chang, Q.C. & Mr. Peter Cheung (T.S.Tong & Co.) for Applicants

Mr. Barlow & Mr. Strawbridge (Legal Department) for Respondent