Chan Lau Fong and Others v. The Attorney General

CACV000035/1991

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BETWEEN

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Coram: Sir Derek Cons, V.-P., Kempster and Clough, JJ.A.

Date of Hearing: 15, 17 and 18 October 1991

Date Judgment handed down: 17 December 1991

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J U D G M E N T

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Clough, J.A.:

1. This is an appeal in judicial review proceedings by thirteen applicants against the order made on the 30th January 1991 by Mr. R.G. Kotewall Q.C., sitting as a Deputy Judge of the High Court, dismissing the applicants' application for (1) an order of certiorari to quash an order under the Crown Lands Resumption Ordinance (Cap. 124) for the resumption by the Crown of 19 lots of land ("the resumed lots"), seven of which are owned by the first applicant, Mr. Chan Lau Fong ("Chan"), the remainder being jointly owned by various groups of the other applicants in manner not material to these proceedings; and (2) a declaration that the order for the resumption of the resumed lots was null and void.

2. The resumed lots are situated in Hoi Pa Village in Tsuen Wan in the New Territories. Their aggregate area was agreed by the parties at the hearing of the appeal to be about 18,364 square feet, as indicated on the relevant resumption plan. Nine of the lots are building land and ten are agricultural land. They are all held under a Block Crown Lease dated the 24th January 1905 to clansmen. The Lease would have expired in June 1997 but for the benefit of the extension of 50 years without payment of additional premium conferred by section 6 of the New Territories Leases (Extension) Ordinance (Cap. 150) subject, during the period of the extension, to the increase in annual rent provided for in section 8 of that Ordinance.

3. The relevant resumption order is related to town planning considerations stemming from the Tsuen Wan District Outline Zoning Plan ("the zoning plan"), which was approved by the Governor in Council under Section 9 of the Town Planning Ordinance (Cap. 131) on the 13th November 1973 and has subsequently been amended from time to time under the provisions of that Ordinance. The zoning plan applies inter alia to the resumed lots which are shown within Area 18 of the plan in a zone set apart for "commercial/residential" development. Area 18 is in the Tsuen Wan New Town and is one of several numbered areas constituting the "town centre" of Tsuen Wan to form a mixed residential and business shopping area.

4. Approved plans under the Town Planning Ordinance merely serve as standards for guidance. Section 13 of the Ordinance provides:

"13. Approved plans shall be used by all public officers and bodies as standards for guidance in the exercise of any powers vested in them."

A measure of direct statutory planning control (in designated comprehensive development areas) is provided for under section 4A of the Ordinance, but no such control affects the resumed lots.

5. However a non-statutory explanatory statement of the zoning plan issued by the Town Planning Office in August 1978 included the following paragraphs regarding the object and implementation of the plan:

"2.    Object of the Plan

2.1 The purpose of building Tsuen Wan New Town (i.e. Tsuen Wan, Kwai Chung and Tsing Yi) is to provide balanced development to cater for almost 900,000 people. The purpose of this Outline Zoning Plan is to establish a statutory land use pattern and major road framework within which the use and development of land may be legally controlled in order to achieve this objective.

2.2 The plan is designed to illustrate only the broad principles of development within the planning areas and to provide guidance for more detailed planning in relation to the overall development of Tsuen Wan New Town (including Kwai Chung and Tsing Yi covered by another two Outline Zoning Plans) as a whole. The road and Mass Transit Railway alignments and the boundaries between various zones may be subject to minor alteration when detailed planning proceeds.

2.3 It is recommended that private land should be resumed when necessary to give effect to the plan.

8.     Implementation

8.1 The plan will be implemented in conjunction with the Kwai Chung and Tsing Yi Outline Zoning Plans over a period of about 10 years. Timing of implementation of the various public proposals is contained in the 10-year Development Programme of Tsuen Wan New Town which has been prepared to co-ordinate and consolidate both public and private development projects so that in each phase of development there will be adequate facilities for those who work and live in Tsuen Wan New Town."

It has not been contended on behalf of the Crown at any stage of these proceedings that the recommendation at paragraph 2.3 above was a statutory recommendation by the Town Planning Board under section 4(2) of the Town Planning Ordinance which authorises the Board to recommend to the Governor in Council the resumption of inter alia, any land that interferes with the lay-out of an approved plan (and provides that resumption to avoid such interference shall be deemed to be resumption for a public purpose within the meaning of the Crown Lands Resumption Ordinance); nor has it been contended on behalf of the applicants that the effect of section 4(2) is to preclude the resumption of land under the latter Ordinance to implement the scheme of an approved plan save in a case where there has been a recommendation under section 4(2) of the Town Planning Ordinance.

6. "Block resumption procedure" was adopted to acquire all the private land involved in the development scheme of the zoning plan which could not otherwise be timeously acquired. This procedure was mentioned in the affirmation of Mr. Wan-Min-Kee You Chin ("Wan"), the Tsuen Wan District Lands Officer. It seems that an area ("the Hoi Pa Village area") of about 1.1 hectares of Crown land and 1.7 hectares of private land (of which the resumed lots formed a part) in Hoi Pa Village (and in Area 18) was regarded as necessary to implement the scheme of the zoning plan which included provision, in the area in question, for the extension of Yan Chai Hospital, a primary school, commercial and residential development, public parking facilities, the extension of Tsuen Wan Market Street and district and local open spaces.

7. The "Block resumption procedure" adopted, to enable the Hoi Pa Village area to be resumed over a period of years in implementation of the scheme of the zoning plan is described by Wan in terms which we find obscure. Suffice it to say that the vires of the procedure is not here in issue and it involved the obtaining of blanket approval from the Governor in Council on the 28th July 1981 for the resumption of the whole of the Hoi Pa Village area, followed by a succession of Gazette notifications of the resumption orders of the Governor (or his delegate the Director of Lands) made under section 3 of the Crown Lands Resumption Ordinance in relation to specified lots in the Hoi Pa Village area as and when they were required to be actually resumed for the implementation of the scheme of the zoning plan.

8. The resumption and clearance of the Hoi Pa Village area was planned in two stages. The resumption of Stage I has been completed by orders gazetted on the 25th September 1981 (GN 2952), 24th December 1982 (GN 4033), and the 4th March 1983 (GN 714). The first part of Stage II has been the subject of two gazetted resumption orders published on the 18th May 1984 (GN 1523) and the 20th August 1984 (GN 2517). The implementation of second part of Stage II (Stage IIB) which includes the resumed lots was delayed for various reasons including the refusal of the owners of the resumed lots to surrender their land upon the terms offered to them by the Crown.

9. In July 1988 Chan, the Chairman of Tsuen Wan Rural Committee and a Justice of the Peace, (who started acquiring parts of the resumed lots in November 1988) began negotiating with Government, on behalf of himself and the other applicants, concerning the future of the resumed lots. As indigenous owners the applicants, through Chan, sought to persuade Government not to implement the "Block resumption procedure" in relation to the resumed lots but to agree to the applicants surrendering their lots in return for an "in situ" exchange which would, in effect, enable them to develop the resumed land themselves in accordance with the zoning plan pursuant to two agreements made by Fong with the other applicants on the 12th July 1988 and the 28th June 1989 respectively. The financial consequence of this proposal would be that the applicants would not be deprived of the very substantial development value of the aggregate area of the resumed lots by the implementation of the resumption procedure which would be followed by Government clearing the lots (and the land in the vicinity) preparing sites for development and then putting them out to tender at a premium to other private developers who were holders of letters A or B, in implementation of Government's policy for the development of Area 18.

10. The attitude of Government in opposing Chan's claim on behalf of the applicants for "in situ" exchange of the resumed lots was expressed inter alia in the following passages in a letter dated the 2nd December 1988 from the Director of Buildings and Lands to Chan:

"    As explained to you during your meeting with the Director and the District Lands Officer on 10 November 1988, any proposed land exchange has to be considered in the light of the current land policy and with reference to the particular circumstances surrounding each individual case.

Hoi Pa Village is situated in Planning Area 18, the central area of Tsuen Wan New Town. A major portion of the village has already reverted to Government in the early 1980's for the implementation of Tsuen Wan central area developments including the provision of roads and drains, a primary school, district open space, public parking facilities and the Yan Chai Hospital extension. The subject lots are within the remaining areas of Hoi Pa Village which is due for land clearance under a public works item. Land will be required for the completion of the necessary civil engineering works pertaining to roads and drains and the provision of a site for commercial and residential development. To facilitate this comprehensive development scheme the Executive Council approved a block resumption on 28 July 1981 so that the necessary land could either be acquired by Government by negotiation or resumed statutorily under the Crown Lands Resumption Ordinance. Consequently in the previous phases, most of the landowners surrendered their land for cash compensation offered by Government; also all the Hoi Pa indigenous villagers in the previous land clearances unanimously accepted the well established village removal terms for the relinquishment of their village houses. A village removal committee was formed in 1979 by the Hoi Pa Villagers to negotiate with the then Town Manager and District Officer Tsuen Wan who, while offering favourable village removal terms to the indigenous villagers, categorically stated that no insitu land exchange would be offered to individual landowners or villagers.

The brief history of Hoi Pa Village clearance outlined above illustrates the established land policy governing the implementation of new town development areas. As you have rightly pointed out there is an understanding recently reached between the NT Heung Yee Kuk and Government on the policy of insitu land exchanges. That is, landowners in layouts whose properties are unaffected by public works development programmes can apply for insitu exchanges in order to redevelop their properties to full potential. However, in the present case the subject lots have been included within an area designated for Tsuen Wan central developments under a public works item and therefore I am afraid that this approach to property development by insitu exchange is not applicable here.

As you are aware, the remaining Hoi Pa Village in its present state is dilapidated, untidy, vulnerable to flooding and is in need of urgent action to redevelop this vital and central part of Tsuen Wan Town. The multiplicity of landownership and congested squatter population would pose great difficulties for this redevelopment to be left to private initiative."

11. Chan's reactions to the Director's letter included the following observations contained in Chan's letter dated the 23rd January 1989 to the Secretary for Lands and Works:

"    It is the understanding of the indigenous villagers that the abovementioned lots are situated entirely within an area earmarked 'Commercial/Residential' on the Tsuen Wan Town Centre Improvement Plan and also within an area zoned 'Commercial/Residential' on the Tsuen Wan Outline Zoning Plan (see 'Plan B' annexed hereto). I am given to understand that the land required for certain public works items such as roads, drains, hospitals, schools, parks and car parking facilities have all been resumed. Therefore, there is no longer any uncompleted public works items within the area of the abovementioned lots of the indigenous villagers. Assuming that there are still some uncompleted public works such as roads and drains, these will be surrounding the abovementioned lots or the future 'Commercial/Residential' site to be granted (see 'Plan B' annexed hereto). As such, these public works items will not interfere with the land of the indigenous villagers. Therefore the indigenous villagers consider that the statement in the fifth paragraph of the letter of Director of Buildings and Lands, namely 'in the present case the subject lots have been included within an area designated for Tsuen Wan Central Development under a public works item and therefore I am afraid that this approach to property development by an insitu exchange is not applicable here' as the reason for refusing our application is extremely inadequate and unreasonable.

I am also of the opinion that the Government does not have to rely on the Block Resumption Approval by the Executive Council on 28th July 1981, which is out of date because of a lapse of time of seven years, to compulsorily acquire the land of the indigenous villagers....."

12. On the 19th May 1989 the Secretary for Lands and Works, replying inter alia to Chan's letter dated the 23rd January 1989 upheld the decision of the Director of Buildings and Lands but indicated that he proposed to seek the confirmation of the Governor in Council for the implementation of the "Block resumption". In his letter the Secretary said:

"    I have reviewed the whole history of the case, but have come to the conclusion that the Director of Buildings and Lands' decision, i.e. to complete the resumption exercise in respect of Hoi Pa Village must stand. The resumption is for the purpose of implementing the approved Tsuen Wan Outline Zoning Plan, and the land involved is required not only for residential development but also for road reserve and for park development.

As you know, this is the last stage of the Hoi Pa Village Clearance scheme, for which a block resumption order was made by the Governor in Council in 1981. It would in my view be unfair to those who either have accepted village removal terms in the main removal scheme or whose land had already been resumed under the block resumption order if the Government were now to deal with last remaining phase on a completely different basis. And in this context, I do not agree that examples quoted in your letters such as Sam Tung Uk, provide an appropriate precedent to follow.

Nevertheless, in light of the fact that the block resumption order was made some 8 years ago, it is my intention to seek the Governor in Council's confirmation as soon as possible that the block resumption order should be carried through. In so doing, I will of course ensure that all relevant factors, including your proposed in-situ exchange, would be brought to the attention of the Executive Council.

13. I am sorry I cannot be more helpful in this case."

14. Chan and the applicants did not give up. They continued to press their case for "in situ" exchange with the Director. In a letter dated the 16th October 1989 Chan stressed that there were "practically no genuine public work items" affecting the resumed lots. He claimed there were precedents for "in situ" exchange in the present situation and specified them. The original approval of the "Block resumption" on the 28th July 1981 which had not been implemented, was, he claimed, outdated and should not be implemented. He added:

"    The subject lots have been designated as 'Commercial/Residential' lands for many years in the Outline Zoning Plans of Tsuen Wan. If the Government resumes the subject lots on the ground that they are required for a 'public purpose' when its ultimate intention is to make available a plot of land designated for 'Commercial/Residential' purpose for sale in public tender or auction for profits, such action is definitely wrongful, ultra-vires and therefore null and void."

15. These representations were evidently of no avail, because on the 21st May 1990 Chan petitioned, separately, Dame Lydia Dunn (the senior member of the Executive Council) and the members of that Council. In his petition to the members of the Executive Council Chan contended inter alia that:

"1.    In deciding whether the 1981 Block Resumption Approval should be reaffirmed, Members should take into consideration whether in the present political circumstances, it is fair or reasonable for Governor in Council to declare the subject resumption as being for a 'public purpose'. If in the absence of any outstanding public work item the Government should decide to resume a lot which had been zoned for commercial/residential purposes purportedly for a 'public purpose' but the real intention is to dispose the same to third parties by public auction for profits, such decision is unfair to and would definitely arouse the antagonism of the villagers who will vigorously resist the resumption...." and

"2.    In view of the long delay and the Government's inability to complete the resumption, coupled with the fact that all public works have been completed, the 1981 Block Resumption Approval should no longer be valid.".

16. In the event Chan's petitions were unsuccessful. The resumed lots (together with 10 other lots in Stage IIB) were ordered by the Governor to be resumed, as appears from G.N. 2540 dated the 10th July 1990 published in the Gazette pursuant to section 4 of the Crown Lands Resumption Ordinance. The notification was in the following terms:

"GAZETTE NO. 29/1990

G.N. 2540                                                          BUILDINGS AND LANDS DEPARTMENT

CROWN LANDS RESUMPTION ORDINANCE (Chapter 124)

PWP ITEM NO. 5CG

RESUMPTION OF LAND FOR DEVELOPMENT AT HOI PA VILLAGE -

REMAINING ENGINEERING WORKS

TSUEN WAN, NEW TERRITORIES

To the owners of and every person interested or having any right or easement in the following lots shown coloured orange and orange hatched black on the plan numbered TWPR72B which is deposited in the District Lands Office, Tsuen Wan at 10th Floor, Tsuen Wan Station Multi-Storey Carparking Building, 174-208 Castle Peak Road, Tsuen Wan, New Territories and which is available for inspection there:-

Lots Nos. 861, 862 Sec. A, 862 Sec. B, 862 Sec. C, 862 Sec. D, 862 R.P., 863 Sec. A, 863 Sec. B, 863 Sec. D, 864 Sec. A, 864 Sec. B, 865 R.P., 866, 867 Sec. A, 869, 871, 872, 873, 874, 875, 876 R.P., 900, 902, 904, 907 Sec. B, 908, 909 R.P., 964 Sec. A, 979 Sec. D all in Demarcation District No. 449.

TAKE NOTICE that the Governor in Council having decided that the above-mentioned lots are required for a public purpose, the Governor has ordered that the above-mentioned lots shall be resumed and revert to the Crown on the expiration of THREE MONTHS from the date of affixing of this notice to the said land.

10 July 1990                  C.M. MO Principal Government Land Agent"

17. The Resumption Plan number TWPR 72B mentioned in the body of the notification shows all the 29 lots (comprising about 26,236 square feet) in Stage IIB which have been ordered to be resumed, including the 19 resumed lots comprising about 18,364 square feet. Stage IIB comprises a 'P' shaped area. The resumed lots are all situated in the lower part of the downward stroke of the 'P'. They are not all contiguous and do not form an unbroken site but fall into three (or possibly four) irregularly shaped areas which are segregated by government and other land. At the base of the plan, in the middle, there appear the words "RESUMPTION PLAN" followed by the same PWP reference as appears in the notification and the same words as appear in capital letters in the notification immediately beneath that reference. On the left hand bottom corner of the Resumption Plan there is a reference to Engineering Drawing No. TWCE/835B (T.D.D.)

18. On the 28th September 1990 the applicants obtained leave under Order 53 rule 3 from Ryan J. to apply for judicial review. The application, made in the prescribed form (No. 86A), indicated that relief was sought in respect of the "Decision of Governor in Council in resuming" the resumed lots. The relief sought was expressed to be "An order of certiorari to quash the order for the resumption of the" resumed lots and a declaration that that order was null and void on the grounds that "the decision of the Governor in Council to order the resumption" of the resumed lots was ultra vires in that (1) the resumption was not for a public purpose and (2) "the Governor in Council" had failed to take into account relevant facts and/or taken into account irrelevant factors "in deciding to order the redemption" of the resumed lots. The order granting leave was expressed to relate to "leave to apply for judicial review on the ground that the decision of the Governor-in-Council to order the resumption" of the resumed lots was ultra vires (for the reasons expressed in the application for leave).

19. The applicants' subsequent notice of motion dated the 12th October 1990 sought an order of certiorari to quash "the order of the Governor-in-Council for the resumption" of the resumed lots and a declaration that "the order for the resumption" of those lots was null and void. No technical point was taken below, or on appeal, that the resumption order was made, not by the Governor in Council (defined in section 3 of the Interpretation and General Clauses Ordinance (Cap. 1) as meaning the Governor acting after consultation with the Executive Council in accordance with Royal Instructions but not necessarily in such Council assembled) but by the Governor pursuant to section 3 of the Ordinance which provides:

"3.    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."

20. There is no provision requiring the Governor's order for resumption to be in writing, but provision for notification to the public and the accomplishment of reverter to the Crown is contained in sections 4 and 5 which provide:

"4.    (1) Where resumption is ordered a notice that the land is required for a public purpose and will be resumed shall be published in the Gazette in English and Chinese.

(2) A copy of such notice shall be served on the Owner, if he can be found, and a further notice shall be affixed upon a conspicuous part of the land to be resumed or, where the land is divided into lots, sections, or subsections, if practicable, upon each lot, section or subsection affected.

(3) The notice affixed to the land shall state the date on which it has been so affixed. It shall also state that the land will be resumed on the expiration of 1 month from such date, unless the Governor shall have authorized the giving of a longer period of notice, in which case the longer period shall be stated.

(4) A notice published and served or affixed under this section shall be deemed to be notice to the owner of the land and every person interested in the land or having any right or easement therein.

5.     On the expiration of 1 month, or any longer period authorized under section 4(3), the land other than any land purchased by agreement under section 4A shall –

(a) where it is an undivided share in land, vest in The Financial Secretary Incorporated together with such rights to the use and occupation of any building or part thereof as may be appurtenant to the ownership of that share, and

(b) in all other cases, revert to the Crown.

and all the rights of the owner, his assigns or representatives and of any other person in or over the land or any part thereof shall absolutely cease."

21. Section 2 of the Ordinance contains a definition of "resumption for a public purpose" which confers a wide discretion upon the Governor in Council to decide what is a public purpose for the purposes of the Ordinance. After providing for the inclusion within such purpose of the purposes (not here material; specified in paragraphs (a), (b) and (c), the following provision is made in paragraph (d) of the definition:

"(d) resumption for any purpose of whatsoever description whether ejusdem generis with any of the above purposes or not, which the Governor in Council may decide to be a public purpose."

22. Material to the above provisions are sections 16 and 19 which respectively provide:

"18. Any land resumed under the provisions of this Ordinance may be demised and granted by the Governor on such terms and conditions and at such price, whether by way of rent, premium or otherwise, and either by public auction or private contract, as the Governor may determine.

19. In any notice to resume any land, it shall be sufficient to state that the resumption of such land is required for a public purpose, without stating the particular purpose for which the land is required, and a notice containing such statement shall be conclusive evidence that the resumption is for a public purpose."

23. The applicants' case was supported by the evidence contained in two affirmations of Chan and in an affirmation of Mr. G.M. Moffoot ("Moffoot"), a chartered surveyor. The Crown relied on the evidence of Wan supplemented, on matters not now material, by the affirmation of Mr. WOO Kwok-Wing, a Senior Land Executive in the District Lands Office, Tsuen Wan. There was a conflict of evidence, which the judge did not find it necessary to resolve, regarding the permitted forms of development and the value of the resumed lots if permitted to be disposed of on the open market. However the judge observed (at p.25) that it was accepted that such value was higher than the aggregate compensation payable to the respective applicants in respect of the individual resumed lots in the event of the resumption order being sustained.

24. Again there was no evidential consensus between Moffoot and Wan regarding the precise area of the resumed lots required for roadworks, but the judge commented (at page 22) that the parties were agreed that only a very small part of some of the lots in question would be affected. On appeal it was accepted by the parties that whatever the precise area concerned (which on Wan's evidence could amount to 0.5 percent of the resumed lots) the area required for road works was only a small part of the resumed lots.

25. The judge arrived at his conclusions in his judgment by reference almost entirely to the evidence of Chan and Wan. He said (at p.25) of Moffoot's evidence:

"    I do not draw attention to this evidence specially not because I consider what Mr. Moffoot says unimportant, but because the basis of the applicants' case is not essentially altered by that evidence. Mr. Moffoot's evidence is, however, of relevance to Mr. Lee's submission based on the failure of the Governor-in-Council to grant his clients 'in situ' exchange of land and I have taken it into account."

26. The evidence of Chan in his first affirmation had exhibited the relevant correspondence and outlined the history of the matter which we have endeavoured to summarise earlier in this judgment with the aid of references to some of Wan's evidence. In paragraph 15 of Chan's first affirmation (which the judge set out at pp.24-5 of his judgment) Chan summarised the applicants' case in the following forensic terms:

"15. I respectfully submit accordingly that an important question of real public interest arises in this present case, namely whether the resumption of the said resumed Lots is 'ultra vires' within the true meaning of the Crown Lands Resumption Ordinance, in particular because.

(a)    The only public purpose apparent from the correspondence and the matters referred to in this Affirmation is that only a very small part of the resumption is for construction of a public road, and that, so far as the present thirteen Applicants are concerned, only 2 Lots out of the total of 21 Lots are involved,

(b)    Resumption of land zoned and intended for 'commercial/residential' use (which it is the apparent intention of the Government to resell, after resumption, for such private use) is not on the facts of this case resumption of land for 'public purposes' within the meaning of the Ordinance;

(c)    Various reasons given by the Government in the correspondence (even if - unknown to me - these reasons were in effect adopted by the Executive Council) cannot turn a resumption for 'private purposes' into a resumption for 'public purposes'; for instance the suggestion made by the Government that the said resumed Lots also should be taken by resumption merely because the other indigenous villagers (whose lands had been required for clearly public purposes such as road or primary school construction) previously had their lands resumed, rather than had been given in 'in situ' exchange.

16.    I further respectfully submit that in the circumstances of this case the Governor and/or the Governor-in-Council must have failed to take into account relevant factors and/or must have taken into account irrelevant factors in ordering the resumption of the said Lots 'for a public purpose'."

27. At pages 30 to 34 of his judgment the judge set out material parts of the evidence of Wan which had been relied upon by the Crown. Thus Wan had described the background of the zoning plan and referred to paragraphs 2.1 and 6 of the explanatory statement mentioned earlier in this judgment. He had added a reference to the Hong Kong Planning Standards and Guidelines issued by the Planning Department of the Hong Kong Government in 1979 (and subsequently revised from time to time, the purpose of which, in relation to plan implementation, was stated in paragraph 3.5 to be to ".... provide yardsticks to measure the sufficiency of facilities and the degree of balanced development in an area." Wan had set out in his affirmation the following definition of "Balanced Development" which occurred in Appendix A of the Guidelines:

"Balanced Development    A balanced development is the physical foundation on which to build a balanced community and it refers to the balances between:

(a) private and public nousing;

(b) population and the required facilities/services;

(c) sizes of population in different income groups;

(d) employment opportunities and working population (and therefore housing),

(e) distribution of housing, and location and distribution of employment areas; and

(f) distribution of housing and location of shopping, recreational and community facilities."

He then affirmed that the achievement of a balanced development had been and remained the Government's objective in implementing the Tsuen Wan Central Development Scheme.

28. Having affirmed that outline development plans and layout plans were used within Government to guide development (see section 13 of the Town Planning Ordinance) and were followed by Government departments once approved, Wan had mentioned that the Tsuen Wan District had been divided into 18 planning areas, Moi Pa Village being in Area 18 in respect of which a detailed outline development plan (which he exhibited) had been prepared in 1975 and adopted for implementation in 1981.

29. The judge set out paragraphs 11 to 14 of Wan's evidence which was as follows:

"11. The purpose of land development is complex but generally involves the following steps:

(a)    the preparation of planning/engineering feasibility studies, including outline programme of work and outline development plans;

(b)    the acquisition and clearance of land,

(c)    site formation and the provision of engineering services,

(d)    the allocation of land for gevernment use and for sale to private developers; and

(e)    building development.

12.    An area of about 1.1 hectares of Crown land and 1.7 hectares of private land was identified as necessary in order to implement the comprenensive development of the portion of Area 18 within Tsuen Wan Central which includes provision for the extension of Yan Chai Hospital, a primary school, commercial and residential development, public parking facilities, the extension of Tsuen Wan Market Street and district and local open spaces.

13.    As identified in 1981, the land affected was densely occupied by 1 tenement building, some 94 village houses, 422 domestic structures, 55 factories, 80 shops in temporary structures and 102 other structures and canopies, altogether providing accommodation for about 1,000 families. Most of the existing village houses were dilapidated and a few had been declared dangerous by the Building Authority. The lower part of the area was vulnerable to flooding during the wet season and it was considered by the government that the overall environment of the town centre would be greatly improved by a new drainage system.

14.    It was deemed appropriate by the government to adopt Block Resumption procedures in view of the need to acquire all the private land involved in the comprenensive development scheme which would be implemented over a period of a few years. This Block Resumption included land which would be required more than 12 months anead of the expected development to cater for changes in development programme. Once the Block Resumption had been ordered by the Governor-in-Council, the subsequent Orders (for resumption) would not need to be referred back to the Executive Council. Such orders would be submitted to the Director of Lands, to whom the Governor has delegated his authority, for approval. The institution of formal resumption proceedings was also deemed necessary so as to ensure that engineering works could start on time and that Area 18 would be completely developed in conformity with the comprehensive development scheme. Any delay in acquisition by agreement which might be caused by succession difficulties, absentee landowners or the continued refusal of some landowners to surrender their land would thus be avoided. The general location of the land to be resumed is shown in the plan."

30. In fact, as appears from the correspondence to which we have referred above, the intervention of Chan resulted in a re-submission to the Governor in Council of the question of the resumption of the resumed lots and the other lots subsequently specified in G.N. 2540. The judge set out (at p. 55) Wan's evidence about this. In paragraph 21 of his affirmation Wan had said:

"21. The current resumption (Stage IIB) was gazetted under Gazette Notification 2540 dated 10 July 1990 following the Executive Council's advice and the Governor's Order (dated 26 June 1990) declaring:

(a)    under section 2 of the Crown Lands Resumption Ordinance, the purpose of the proposed resumption, namely the implementation of the final phase of a comprenensive development scheme in Area 18, Central Tsuen Wan, is a public purpose, and

(c)    under section 5 of the Ordinance, the resumption of the land is required for that public purpose."

31. The judge added:

"    And a memo marked for identification as WMK-5A supports that evidence."

The memorandum in question is dated the 11th July 1990 and purports to have been sent to the District Lands Officer, Tsuen Wan by the Principal Government Land Agent (Specialist) in the Lands Administration Office of the Buildings and Lands Department. The memoranddm is in the following terms:

"Crown Lands Resumption Ordinance (Chapter 124)

PWP Item No. 5CG

Resumption of Land for Development at Hoi Pa Village -

Remaining Engineering works

Tsuen Wan, New Territories

-----------------------------------------------------------------------

On 26 June 1990, having considered memorandum XCR(90)100, the Council ADVISED and the Governor ORDERED that -

(a)    under section 2 of the Crown Lands Resumption Ordinance, the purpose of the proposed resumption, namely the implementation of the final phase of a comprehensive development scheme in Area 18, Central Tsuen Wan, is a public purpose, and

(b)    under section 3 of the Ordinance, the resumption of the land is required for that public purpose.

2.     The resumption of the private land referred to in paragraph 7 of the above-mentioned memorandum has accordingly been ordered under section 3 of the Crown Lands Resumption Ordinance. A notice to this effect giving the three months' notice of resumption will be published in the Government Gazette on 20 July 1990.

At the hearing of the appeal this court was informed by leading counsel for the Crown (who did not appear below) that, according to his junior counsel (who did appear below), the admissibility of Wan's evidence of the resumption order had been questioned by the applicants' leading counsel (who did not appear on the appeal), whereupon the Crown had produced the memorandum without objection from the applicants' counsel.

32. The judge set out (at p.33) paragraph 23 of Wan's affirmation in which he had said of the specific need for the resumption of the land in Stage IIB.

"The land in Stage IIB is needed specifically for the construction of a road connecting Tsuen Wan Market Street and Tak Wan Street, the completion of Tak Wan Street Park and the formation of a site for commercial and residential development. It is important for such private commercial and residential development to be included in order to maintain a balanced social mix within the new town community. Furthermore, before such development can take place, the government must form the site which involves the clearing of the land, the provision of adequate drainage and other amenities."

33. In reply to Chan's summary of the applicants' case in paragraph 15 of his first affirmation (set out above) Wan had affirmed, (in a passage in paragraph 47 of his affirmation which the judge set out at p.34) that:

"In this case, it is clear that the resumption has a public character and it is in the general interests of the community. This is the final phase of a resumption which has taken place in order to provide for the balanced development of Tsuen Wan New Town. This development is in accordance with the layout plan of the area and it is part of the comprenensive development scheme for Area 16 of Central Tsuen Wan. The development of Tsuen Wan must be considered as a whole. This final phase includes a public road and park and commercial and residential development while other phases included schools and hospitals and other public facilities. It is essential to have private housing and commercial development mixed with public housing and commercial development in order to provide for a balanced socio-economic society in Tsuen Wan. This final phase is an integral part of the whole development which will benefit both the residents of Tsuen Wan and Hong Kong as a whole."

34. In a careful judgment the judge addressed a number of the applicants' and Crown's arguments which are not material to this appeal. In particular his rejection of the argument, advanced by Mr. Martin Lee Q.C. on behalf of the applicants, that the Governor and/or the Governor in Council had failed to take into account all relevant factors and/or had taken into account irrelevant factors, has not been pursued on appeal.

35. It appears from the judgment that the applicants had two bases for their argument in support of their ultra vires argument. The first basis was that foreshadowed in paragraph 15(a) and (b) of Chan's first affirmation. The judge encapsulated this argument in the following passage (at p.25) of his judgment:

"    The essence of Mr. Lee's submission can be briefly stated. The only public purpose which can possibly be relied on or pointed to is the road works. Only tiny portions of the lots in question are affected by those works. Since, as Mr. Lee puts it, the 'lion's share' of the lots are not required for the only public purpose available, namely the road works, they cannot form part of or be resumed for any public purpose. Here, so the argument goes, the resumption is for the purpose that after clearance and drainage works have been done in the area, the lots can be sold to private enterprise for re-development, albeit in accordance with an overall planning scheme. This, on Mr. Lee's submission, is really for the purpose of raising revenue for the Government at the expense of the applicants who are able and willing to abide by any conditions which the Government may lay down."

36. The Crown's answer to this argument, advanced by Mr. McNamara in reliance on Wan's evidence, was summarised by the judge (at p.34) as follows:

"    In essence, Mr. McNamara's submission on the factual issues amount to this: the lots, in question are all within areas designated for the development of Tsuen Wan New Town as part of the Government scheme to have a balanced development. The public purpose effected by the resumption is in line with, and part of, that general policy of the balanced development of a new town, and the road works are at best ancillary and a very small part of the overall scheme. In short, the resumption of the lots in question are necessary to give effect to the whole planned development of Tsuen Wan New Town."

37. The judge defined the issue (at p.35) between the parties as follows:

"    The issue, as I see it, comes down to this. Assuming, as I think is accepted by Mr. Lee, that the balanced development of Tsuen Wan New Town is a useful public purpose, is the resumption of all the lots in question a part of that public purpose so as to enable the resumption itself to be for a public purpose. If, as Mr. Lee says, not all of the lots are necessary for that purpose, which is only, according to Mr. Lee, limited to the road works, and the rest of the scheme can nonetheless be accomplished without resuming all of these lots, then the resumption of all these lots would clearly not be a public purpose."

38. The judge accepted the Crown's answer to the first basis for the applicants' argument on the ultra vires issue. He concluded (at p.55) that ".... road widening" was "only one aspect of the whole balanced development concept" and accepted that Government's proposal to sell off some parts of the resumed area for commercial development was, ".... but part of, and on the evidence, a necessary part of the overall scheme, to ensure a balanced development in accordance with government policy as to the best way to develop this new town." He held (at p.35) that the fact that the applicants might be able to do what the government could do "by the imposition of special conditions" was "not necessarily to the point. It does not detract from the public purpose of the resumption although it may go to Mr. Lee's second ground."

39. At the end of his judgment (at p.38, after rejecting Mr. McNamara's contention that the Ordinance empowered the Crown to resume land for the sole purpose of raising revenue by selling it) the judge stated clearly the ratio of his decision to reject the first basis for Mr. Lee's argument on the ultra vires issue. He observed:

"    My conclusion is premised on the factual basis that the resumption which (sic) I am concerned will form an essential part of a larger and more comprehensive scheme for the development of Tsuen Wan New Town which the Governor-in-Council is clearly entitled to consider as a public purpose."

40. There was a second basis for the applicants' case on the ultra vires issue. It is this basis which has been pursued on appeal. In substance it was contended that, properly construed, the gazetted resumption notice had identified "REMAINING ENGINEERING WORKS" as the purpose of the resumption, and that since the only engineering works contemplated were road works which affected only a miniscule part of the resumed lots, the resumption was ultra vires in respect of the remainder of those lots. The judge outlined the argument (at p.29) as follows:

"    Mr. Lee has another string to his bow. He refers to the resumption notice, the relevant parts of which I have already referred to, and makes the point that the validity of the resumption is depending upon the purpose set out in the notice which, according to Mr. Lee, is contained in the words 'remaining engineering works'. I was referred to five other previous resumption notices, none of which contained those words. Mr. Lee then makes the attractive point, with a passing reference to section 19 of the Crown Lands Resumption Ordinance, that the decision of the Governor-in-Council cannot possibly stand if the members of the Executive Council thought that all the lots were required for the remaining engineering works, since the only engineering works contemplated were the road works, and these only affect miniscule portions of some of the lots."

41. The Crown's answer to this argument was accepted by the judge in the following next ensuing paragraph of his judgment:

"    Mr. McNamara for the respondent approached the matter quite differently. The road works, he says, are quite irrelevant and the words 'remaining engineering works' are only part of the title or heading of the resumption notice and not part of the stated purpose. But even if these words were part of the stated purpose, according to Mr. McNamara, they are justified by the evidence before me of the clearance and drainage civil engineering works which have to be implemented. This, I accept, is born out by the evidence and this submission, from Mr. Lee, based on the wording of the notice, while ingenious is not one I can accept." (Emphasis supplied)

42. On appeal Mr. John Griffiths Q.C. for the applicants raised the question whether the judge is to be understood in the above passage as accepting only Mr. McNamara's argument regarding the evidence of the clearance and drainage civil engineering works, and as leaving undecided Mr. Lee's argument on the construction of the resumption notice. In our opinion, in their context, where the judge was addressing both Mr. McNamara's contentions, the words emphasised by underlining in the above citation indicate the judge's rejection of Mr. Lee's argument on the construction of the notice. Any possible doubt on this point must, in our opinion, be removed by the judge's last words on the ultra vires issue (at p.38) which were.

"    On the ultra vires limb of Mr. Lee's argument, therefore, I find that there is nothing to show that the decision of the Governor-in-Council that the resumption was, for a public purpose was ultra vires. I bear in mind that what is a public purpose does not depend on the ipse dixit of the Governor-in-Council, but is a matter of statutory interpretation of the Ordinance and the application of the statute as properly construed to the facts."

43. On appeal it has been the second limb of the applicants' argument on the ultra vires issue that has been advanced by Mr. Griffiths on the applicants' behalf. The applicants' amended notice of appeal contained four grounds of appeal, two of which (grounds (3) and (4)) were not expressed to be dependent upon the construction of the resumption notice contended for by the applicants. Mr. Griffiths having made it clear during the hearing of the appeal that (a) the foundation of the applicant's case was the construction of the resumption notice contended for on their behalf below and on appeal and (b) the court was not competent (leaving aside Wedhesbury unreasonableness) to challenge the decision of Government that the re-sale of the resumed lots was necessary to ensure balanced development, the only two grounds of appeal which were effectively argued were grounds (1) and (2).

44. Ground (1) was to the effect that the judge had erred in holding that the resumption of the resumed lots was for a public purpose since the resumption notice had specified the particular public purpose of "REMAINING ENGINEERING WORKS", giving a public works reference (PWP ITEM No. 5CG) which showed that the works in question were road works which affected only a small portion of the resumed lots. It followed that the resumption notice, having purported to cover the entirety of those lots, must be pro tanto ultra vires.

45. Ground (2) attacked the judge's finding (at pp.29 and 33) stated in the ground to be that "if the words 'REMAINING ENGINEERING - WORKS' in the resumption notice were part of the stated purpose, the Crown would still be justified in resuming "(emphasis supplied) the resumed lots ".... because of the necessity for the government to do the clearance and drainage civil engineering works of the whole area of which the said lots only, formed a part.....". The basis for this ground was that there was no evidence (a) that PWP ITEM NO. 5CG showed any such clearance or drainage civil engineering works or (b) that such clearance or drainage civil engineering works (if any) would affect the entirety or substantial portions of the resumed lots.

46. We mention that (at p.29 of his judgment) the judge did not use the words appearing in ground (2) which we have emphasised by underlining above, but he accepted the words "they are justified by the evidence" which he mentioned as having been used by Mr. McNamara in argument. We accept that later in his judgment (at p.35) the judge, after holding that "The road widening is only one aspect of the whole balanced development concept", added:

"Much more civil engineering works would be required for the clearance and the provision of an adequate drainage system, especially since this is a flood prone area during the wet season."

However, reading his judgment as a whole in the light of the passages cited above in relation to the ultra vires issue we understand the judge to have rejected Mr. Lee's "second string" argument (based on the narrow construction of the resumption notice as confined to engineering works) and to have decided the ultra vires issue on a wider basis than that implied in ground (2).

47. At the hearing the substance of Mr. Griffiths' argument on behalf of the applicants was that, properly construed, the resumption notice, read in conjunction with the data on the resumption plan mentioned in the notice, had not simply referred to requirement for an unspecified public purpose in accordance with section 19, but had described the particular purpose of the resumption, namely remaining engineering works. It was contended that those works were identifiable as road works by reference to the relevant public works expenditure item (PWP ITEM No. 5CG referred to in the heading of the resumption notice and at the foot of the resumption plan No. TWPK 725) and by reference to Engineering Drawing NO. TWCE/835B (T.D.D.) mentioned in the resumption plan. The latter drawing, it was contended, had been inspected by a member of Moffoot's staff and showed only minimal impingement by the proposed road works on two (according to Moffoot) or four (according to Wan) of the resumed lots.

48. On the basis of this interpretution of the resumption notice it was further contended that in the absence of any evidence that clearance works (which could not in any event be called engineering works) or drainage works were identified by the relevant public works expenditure item or engineering drawing, the judge could not have properly had regard to such works as "REMAINING ENGINEERING WORKS" within the meaning of the resumption notice. Emphasis was also put on the fact that there was no evidence in the correspondence or the affirmation of Wan to contradict Chan's assertion that no works other than road works were required to be executed on any of the resumed lots, as distinct from land in Stage IIB or other parts of Area 18 which had been affected by the "Block resumption".

49. On this basis the necessary inference was that any part of any of the resumed lots which was not required for road works would not be required for a public purpose and therefore its inclusion in the resumption notice was ultra vires. Recognising that the relief sought by the applicants related to the resumption order made by the Governor under section 5, and not in terms to the resumption notice, Mr. Griffiths contended that, having regard to the scheme of the Ordinance, which does not provide for the publication of the resumption order (or indeed that a resumption order should be a written order), the parties and the court should proceed on the basis that the resumption notice reflected and was in the same terms as the order made by the Governor.

50. There had been no discovery in the proceedings below and no regard seems to have been had to the requirements of Order 53 rule 9(2), but the judge admitted the hearsay evidence of the order contained in the affirmation of Wan and he admitted without objection the buildings and Lands Department memorandum dated the 11th July 1990 which was produced below by counsel for the Crown as evidence of the terms of the decision of the Governor in Council and of the terms of the Governor's order under section 3. There was no ground of appeal directed to this matter. On the other hand it has not been contended by the Crown at any stage of these proceedings that the resumption notice contains anything inconsistent with the order to which it relates.

51. We accept the submission of Mr. James Findlay Q.C. for the Crown that if the resumption notice is invalid, or partially invalid, but the order itself is valid, this would only result in the postponement of the reversion of most of the resumed lots under sections 4 and 5 and would not preclude the publication of a fresh valid resumption notice. However Mr. Griffiths contended that, in any event, the memoranddm containing the terms of the order included the same heading as the resumption notice and was therefore afflicted with the same vice as that notice.

52. Having concluded, for the reasons given below, that the resumption notice is not to be interpreted as purporting to relate to a resumption order which is pro tanto ultra vires in relation to those parts of the resumed lots which are not required for road works, we find it unnecessary to determine what would be the effect on the order itself (the body of which identifies a specified public purpose) of holding the published notice of that order to be framed in terms reflecting an order which would be pro tanto ultra vires.

53. In construing the resumption notice, which is a creature of statute, we have borne in mind the following settled principles relied upon by Mr. Griffiths:

(1)    Statutes must not be construed so as to divest persons of proprietary rights unless the intention of the legislature is expressed in clear and unambiguous language: Maddalozzo v. Commonwealth of Australia (1979) 25 ALK 437 per Lockhart J. at p.443 citing the passage in Craies on Statute Law 7th edition, at p.116 where a similar dictum of Bowen L.J. in Re Cuno (1889) 45 Ch.D.12, 17 is cited.

(2)    Only so much land as is actually and reasonably required for the particular purpose authorised by the statute may be taken compulsorily: Malsbury's Laws of England, 4th edition, Vol. 8, para 50 (Note 3), Simpson v. South Staffs Waterworks (1885) 4 be GJ & Sm 679.

(3)    The long title of the Ordinance being "To facilitate the resumption of Crown lands required for public purposes", (emphasis supplied) such a statutory power is to be limited to the power to resume such land as is directly needed to be used for, or to advance, the particular public purpose in question, and the power to resume land cannot be used indirectly to attain a different purpose or a collateral advantage, even if this collateral matter can itself properly be described as a public purpose: Clunies-Ross v. Commonwealth of Australia (1984) 53 ALR 609, 610-13. Mr. Griffiths gave the example of the raising of revenue as an ultra vires indirect public purpose in this context.

54. On the other hand, for the Crown Mr. Findlay stressed the great width of the power conferred by the Ordinance upon the Governor in Council to determine what is a public purpose for purposes of land resumption. Whilst conceding that the conciusive evidence provision in section 19 did not apply if the resumption notice stated a particular purpose for the resumption, he contended, citing Wheeler v. Kelly [1956]30 A.L.J. 176, 178 that save in exceptional circumstances (such as bad faith or unreasonablehess which did not exist here) the resuming authority should be the final arbiter of what is a public purpose. He relied on Mamabal Framjee Petit v. Becretary of State for India (1914) A.I.R. 20 (P.C.) for the proposition that, even without the power conferred by paragraph (d) in the definition of "resumption for public purposes" in section 2 of the Ordinance, the courts could not "easily" hold the resuming authority to be wrong.

55. The crucial question of construction that arises in this case is whether the heading of the resumption notice may be permitted to be taken into account when construing the body of the notice and, if so, to what extent may it be permitted to influence or control the meaning or ambit of the operative provisions in the notice. No authority was cited on this question. We can see no reason why, in appropriate circumstances, the ambit of very general language "required for a public purpose" in the body of the notice should not be considered as intended to be limited to a specific purpose or purposes specified in the heading. Put another way, the heading is part of the notice and may be regarded as having a purpose.

56. By analogy with headings in a statute it seems to us that the heading in a statutory notice may be used as a guide, albeit a brief and unexhaustive guide, in the interpretation of the meaning or scope of the operative provisions of the notice. c.f. the majority opinions in Director of Prosecutions v. Schildkamp [1971] AC 1 cited in Cross on Statutory Interpretation, 2nd edition at p.129 and Bennion on Statutory Interpretation at p.550 para 281.

57. In the present case we have no difficulty in accepting that the heading of the resumption notice was intended to limit the generality of the purpose stated in the body of the notice. However, as Mr. Findlay rightly submitted, the applicants must show that the effect of the heading, read in conjunction with the body of the notice and the contents of the resumption plan is that the notice specifies only the remaining engineering works as the public purpose of the resumption. This they cannot do. Assuming in the applicants' favour, contrary to the Crown's submissions, that the only engineering works identifiable under the notice and the contents of the resumption plan is the road works, the heading of the notice is, in our opinion, clearly not confined to engineering works. The full text and spacing is.

"G.N. 2540                              BUILDINGS AND LANDS DEPARTMENT

CROWN LANDS RESUMPTION ORDINANCE (Chapter 124)

RESUMPTION OF LAND FOR DEVELOPMENT AT HOI PA VILLAGE -

REMAINING ENGINEERING WORKS

TSUEN WAN, NEW TERRITORIES" (Emphasis supplied)

58. It seems to us to be inescapable that, as Mr. McNamara argued before the judge, the reference to remaining engineering works is only part of the heading. The reference to those works clearly has to be read, (as Mr. Findlay contended without any effective answer from Mr. Griffiths), as conjunctive to the earlier words emphasised by underlining. The emphasised words unambiguously state that the proposed resumption is for development at Hoi Pa Village. The public works expenditure reference relates to the engineering works. Assuming those works to be only road works we nevertheless can see no reason for interpreting the words relating to development at Hoi Pa Village as limited by the public works reference to road works. The combined effect of the heading and the body of the notice is therefore that the resumption order which is being notified is an order for development at Hoi Pa Village including remaining engineering works and that that is the public purpose for which the Governor has made the order.

59. In his reply Mr. Griffitns submitted that the resumption notice was at least ambiguous, that the hyphen before the reference to engineering works in the heading arguably required that reference to be given a disjunctive meaning and that accordingly the notice should be read in favour of the subject and not the Crown. We are unable to accept the submission on ambiguity. The heading seems to us to be wholly unambiguous and we can see no basis for ignoring or qualifying the words referring to development at Hoi Pa Village which indeed relate to the Crown's repeatedly stated purpose for the resumption.

60. Accordingly the corner stone of the applicants' argument on appeal falls away, and, with it, the entire edifice built upon it in relation to the judge's conclusions on the evidence regarding engineering works.

61. The appeal is therefore dismissed. We make an order nisi awarding the costs of the appeal to the Crown.

Representation:

John Griffiths, Q.C. & Warren Chan (Liad, Ho & Chan) for Appellants/Applicants

J. Findlay, Q.C. & Miss V. Hartstein (Crown Solicitor) for Respondent