Hong Kong Oil Co. Ltd v. Director of Lands

IN THE COURT OF APPEAL

1987, No. 1
(Civil)

BETWEEN

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Coram: Sir Alan Huggins, V.-P., Fuad & Clough, JJ.A.

Date of Hearing: 8^th – 10^th April 1987

Date of Handing Down of Judgment: 1^st May 1987

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JUDGMENT

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Sir Alan Huggins, V.-P.:

1. This is an appeal by the Director of Lands against a decision of the Lands Tribunal upon preliminary questions of law raised in proceedings for the determination of claims by the respondent Company under the Public Reclamations and Works Ordinance. These questions relate to the time limits imposed in connection with the bringing of such claims before the Tribunal and involve the construction of s.6(2) of the Ordinance.

2. The Respondent's claim is in respect of the extinguishment of private rights alleged to have existed in part of the foreshore leased to the Respondent in Tsuen Wan. Notification of a proposed reclamation affecting the Respondent's land was duly published on 7th October 1977 and specified a period of two months for the submission of objections and claims. Within that period the Respondent lodged an objection and a claim, and there then began several years of negotiation between the Director and the Company. Inter alia there was discussion about the possibility of reprovisioning the Company's oil storage business or of some of the facilities connected therewith. Before a settlement had been reached the Governor in Council authorized the undertaking, and a notification to that effect was published in the Government Gazette on 3rd November 1978. On 6th March 1985 the Company was informed, in effect, that there was no prospect of reprovisioning the facilities, and on 26th March 1986 the Company lodged its claim for compensation with the Tribunal.

3. Although it was conceded by the Crown before the Tribunal that, subject to any time limit, it was open to the Company to lodge its claim direct with the Tribunal, I think it is necessary to consider whether that concession was rightly made. It is not a point taken by the Director, but it goes to the jurisdiction of the Tribunal. The Tribunal is a creature of statute and has only such jurisdiction as has been conferred upon it by the Legislature. Thus any claim for compensation at Common Law is not within its Jurisdiction. It is common ground that such jurisdiction as there may be for the Tribunal to determine the Company's claim is under s.6(2) of the Ordinance (as amended in 1970 and 1974 but now repealed). Section 6 reads as follows:

“(1) No act ion shall be brought or continued in respect of the extinguishment under s.5, in whole or in part of any public or private right.

(2) Any person who submitted a claim of private right in accordance with the notification under s.2 may within two months of the notification under s.4 of the authorization of the undertaking require that his claim for compensation be referred to the Lands Tribunal for determination”

No provision is there expressed whereby the Company was entitled to apply to the Tribunal: sub-s.(2) contemplates that any reference to the Tribunal shall be at the instance of the Director - to whom the Company's claim was originally directed - upon his receiving a requisition from the Company. This has not always been the positiono In 1956 the claimant was allowed to submit a claim for compensation direct to the Tribunal. By an amending Ordinance of 1970 it was provided that the claimant could “require that his claim for compensation be referred to a tribunal by the Governor”. However, by a further amendment - contained in the Second Schedule to the Lands Tribunal Ordinance 1974 - the provision that the reference be made “by the Governor” was deleted, and, in the absence of such express provision requiring a reference by a person other than the one to whom the claim was originally made, common sense then dictated that it should be made by the Director. We are told that in another case (brought by the Caltex Oil Company Ltd.) application was made by the claimant direct to the Tribunal and that the Tribunal assumed jurisdiction without objection from the Director. However, in that case the application was made, and notice was given to the Director, within the two months allowed for a requisition. In effect, therefore, the Tribunal treated the application as though it had been referred by the Director upon a requisition within the prescribed time: if the Tribunal had declined to accept the application on the ground that it should have been referred by the Director, the claimant could still have made its requisition within time. The fact remains that the only jurisdiction conferred upon the Tribunal is to hear claims referred by the Director. Why the statute was so framed it is difficult to understand: there seems to have been no good reason why the original position should not have been restored or at least why a claim should not either have been referred by the Director or been lodged with the Tribunal by the claimant himself. If, contrary to my view, there was jurisdiction to receive a claim direct from a claimant, I am satisfied that it could only be on the basis of an implied requisition and that the time limit for a requisition must apply to such an application.

4. Is the time limit obligatory or directory? The Tribunal applied the test laid down in Liverpool Borough Bank v. Turner (1986) 2 de G., F. 7 J. 502, 507:

“No universal rule can be laid down for the construction of statutes, as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed.”

It is really as to the application of that test that the dispute arises here. The Director contends that compliance with the time limit is obligatory, because the intention was to ensure that the Crown would be able to press for an early assessment of the compensation it would have to pay and thus be able to plan the rest of its expenditure on public works. He says that failure to comply would still leave it open to the Claimant to rely on a moral claim to compensation under the proviso to s.8. (He thus concedes that the proviso is not limited to moral claims other than those arising from a failure duly to prosecute a legal claim). The Claimant emphasizes that the time limit applies only to the first stage in a two stage procedure - a requisition followed by a reference - and that there is no time limit prescribed for the reference. Therefore, it is argued, the time limit is of no great value to the Crown: moreover, the value of the moral claim under s.8 was much less than that of the legal claim, so that the Legislature cannot possibly have intended that the legal right should in effect be lost if a requisition was not made within the two months. It is no answer to say, as does counsel for the Director, that the background of compulsory purchase in Hong Kong is such that the Executive is sensitive to compensation matters and could not act unfairly towards a claimant under s.8.

5. Both sides have referred to Freezinhot Bottle Co. Ltd. v Attorney General of Hong Kong 1963 H.K.L.R. 595 and 1964, H.K.L.R. 676. There notice was given of a proposal to reclaim the foreshore and sea bed adjoining the claimant's land and a claim was lodged within the time prescribed in the notice. However, the Public Reclamations and Works Compensation Tribunal Rules 1959 required that two copies of the claimant's particulars of claim should be served on the Registrar of the Supreme Court within a like period of two months from the notice of the proposal to reclaim. That was not done, but, with the consent of the Attorney General, the required Particulars of Claim were filed out of time. The issue was whether the letter of objection and claim, which was clearly within the time prescribed, contained “an estimate of any loss which it is alleged would be incurred by reason of any extinguishment of a private right” as required by the Ordinance. In the Tribunal I held that there was no “estimate” of that loss. On appeal the Full Court held that the contents of the letter constituted an estimate. No question arose whether the requirement in the Ordinance as to time went to jurisdiction, although it is implicit that I would have held that it did. The Full Court did not deal with that point, and I think the Tribunal here was wrong to rely on the alleged fact that the legislature acquire the 2 months period in the Ordinance being so clearly treat ed as procedural or directory from 1956 onwards or, at least, until 1974, when jurisdiction was transferred to the more permanent Lands Tribunal”. That does not, however, of itself invalidate the Tribunal's conclusion.

6. The Company relies upon the cumulative effect of five factors which, it says, indicate an intention that the requirement as to time was directory only:

1. that no notice of authorization of the undertaking had to be given to the Claimant beyond the implied notice given by publication in the Government Gazette: the Claimant did not on the evidence have actual knowledge that the period of two months for requiring a reference had started to run, and it would be unfair that its claim should be defeated;

2. that a period of two months was, in any event, very short, and every claimant would in practice have to require a reference in case negotiations did not result in an agreement;

3. that much clearer language would have been used if the intention had been to limit the time for instituting legal proceedings rather than merely the time for requiring a reference;

4. that there would be no inconvenience to the Crown if the requirement were merely directory, and no benefit if it were obligatory;

5. that the provision does not indicate to whom the requisition should be addressed and is thus “unacceptably vague for a mandatory requirement”.

7. The second of these points is, I think, based upon an assumption that there would have to be considerable preparation by the Claimant before a requisition for a reference was made. I do not think that is correct: all that would be required of a claimant is that he satisfy himself that the claim which he originally made and which is to be referred to worth pursuing: any detailed preparation might be made not only after the requisition but also after the reference.

8. As to the third point I understand it to be suggested that there would be express provision for the barring of a claim upon a failure to meet the time limit. Undoubtedly such an express provision is sometimes found, but I am not persuaded that it is essential.

9. The fifth point seems to me of little weight. The original claim was made to the Director of Lands, and common sense would appear to dictate that if anyone 1,olere to be required to “refer” that claim to the lands Tribunal it must be he - at least in the absence of express statutory power granted to some other person to refer it, as in the amendment to s.6(2) introduced by the Public Reclamation and Works (Amendment) Ordinance 1970.

10. The cumulative effect of all the factors relied upon is not, in my judgment, sufficient to show that the requirement as to time was intended to be directory. Grove, J. said in Barker v Palmer (1881) 8 Q.B. 9, 10:

“Provisions with respect to time are always obligatory, unless a power of extending the time is given to the court”.

Indeed, it would seem to me that the presence of a power to extend is itself some indication that, in the absence of extension, the time limit is intended to be absolute. I can see no purpose in inserting the time limit in s.6(2) if it was not intended to be obligatory. It is common ground that s.6(1) destroyed any right the Claimant may have had to proceed at Common Law for compensation in respect of the extinguishment of some of its rights arising from ownership of the land: the right to compensation is not thereby destroyed, but it cannot be enforced in the courts. The jurisdiction to have it enforced in the Lands Tribunal depended upon a reference by the Director, and the Director could not be compelled to make a reference unless a requisition was lodged with him within the time prescribed. Thus, although the time limit was applied to the requisition rather than to the reference, it has the effect of governing the jurisdiction of the Lands Tribunal, and I think Craies on Statute Law (7th Edn.) correctly states the law at p.266 when it says:

“As a general rule, statutes which enable persons to take legal proceedings under certain specified circumstances must be accurately obeyed notwithstanding the fact that their provisions may be expressed in merely affirmative language.”

I accept that the matter still depends upon the context, but there is nothing in the context here which demands a different meaning. It is a very different case from Reg. v Inspector of Taxes ex p. Clarke 1971 2 Q.B. 640, where the notice which was by the statute required to be given "immediately" had ceased to have any substantial importance. I would hold that the requirement as to time in s.6(2) was obligatory.

11. Since I drafted this judgment Clough, J.A, has drawn my attention to Howard v Secretary of State for the Environment 1975 1 Q.B. 235. To the extent that it was there held that a provision requiring notice of appeal to be served within a specified time was obligatory it supports the view I have expressed.

12. It is argued on behalf of the Company that the Director had nevertheless accepted that the case was properly before the Lands Tribunal by his “joining in the reference” or, alternatively; that he had waived the requirement of a requisition. On the facts I am not persuaded that he has so prejudiced his position, nor do I think that he could have given the Tribunal a jurisdiction which it would not otherwise have had.

13. The second point taken is that, on the assumption that the Respondent was out of time, the Tribunal erred in holding that it had jurisdiction to grant an extension of time under s.10(2) of the Lands Tribunal Ordinance. Under that section the Tribunal may

"(d) for good cause, enlarge the time, whether or not that time has already expired, fixed by any Ordinance -

(i) for the giving of any notice, either before or after any proceedings have commenced; ………”

This provision was enacted in an amending ordinance which came into force in 1983 - long after the two months had expired - and two questions arise, (i) whether the provision has retrospective effect and (ii) if it does, whether a requisition under s.6(2) of the Public Reclamations and Works Ordinance is a “notice” within the sub-section. The Director contends that, once the time limit had expired, the Crown had an accrued right to plead the time bar. Counsel for the Director relies upon Yew Bon Tew v Kenderaan Bas Mara 1983 A.C. 553 for the proposition that the court should not extend time under a subsequent enactment so as to divest a party of such an accrued right. That was a case where a statute of limitation had fixed a period of twelve months for the bringing of an action against a public authority. The appellant failed to bring an action within that period. By a statute which came into force soon afterwards the period for the bringing of such an action was extended to three years, and the question was whether the appellant could take advantage of the longer period, the extended period not having expired. The Judicial Committee, being of the view that

“… an accrued right to plead a time bar, which is acquired after the lapse of the statutory period, is in every sense a right, even though it arises under an act which is procedural. It is a right which is not to be taken away by conferring on the statute a retrospective operation, unless such a construction unavoidable” (p.563D),

adopted a passage from the judgment of Williams, J. in Maxwell v Murphy (1957) 97 C.L.R. 261, 277:

“Statutes of limitation are often classed as procedural statutes. But it would be unwise to attribute a prima facie retrospective effect to all statutes of limitation. Two classes of case can be considered. An existing statute of limitation may be altered by enlarging or abridging the time within which proceedings may be instituted. If the time is enlarged whilst a person is still within time under the existing law to institute a cause of action the statute might well be classed as procedural. Similarly if the time is abridged whilst such person is still left with time within which to institute a cause of action, the abridgement might again be classed as procedural. But if the time is enlarged when a person is out of time to institute a cause of action so as to enable the action to be brought within the new time or is abridged so as to deprive him of time within which to institute it whilst he still has time to do so, very different considerations could arise. A cause of action which can be enforced is a very different thing to a cause of action the remedy for which is barred by lapse of time. Statutes which enable a person to enforce a cause of action which was then barred or provide a bar to an existing cause of action by abridging the time for its institution could hardly be described as merely procedural. They would affect substantive rights.”

The fact that there was in a relevant interpretion statute an express provision similar to s.23(c) of our Interpretation and General Clauses Ordinance (to the effect that repeal should not affect an accrued right) was not vital because

“Apart from the provisions of the interpretation statutes, there is at common law a prima facie rule of construction that a statute should not be interpreted retrospectively so as to impair an existing right or obligation unless that result is unavoidable on the language used. A statute is retrospective if it takes away or impairs a vested right acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability, in regard to events already past. There is, however, said to be an exception in the case of a statute which is purely procedural, because no person has a vested right in any particular course of procedure, but only a right to prosecute or defend a suit according to the rules for the conduct of an action for the time being prescribed.

But these expressions 'retrospective' and 'procedural', though useful in a particular context, are equivocal and therefore can be misleading. A statute which is retrospective in relation to one aspect of a case (e.g., because it applies to a pre-statute cause of action) may at the same time be prospective in relation to another aspect of the same case (e.g., because it applies only to the post-statute commencement of proceedings to enforce that cause of action): and an Act which is procedural in one sense may in particular circumstances do far more than regulate the course of proceedings, because it may, on one interpretation, revive or destroy the cause of action itself.

Whether a statute is to be construed in a retrospective sense, and if so to what extent, depends on the intention of the legislature as expressed in the wording of the statute, having regard to the normal canons of construction and to the relevant provisions of any interpretation statute.” (p.558E-p.559B).

In my judgment that case is directly in point and is conclusive of the first issue.

14. It is, therefore, not necessary to decide whether the requisition was a “notice” within the meaning of s.10(2)(d) of the Lands Tribunal Ordinance. It is enough to say that I see no reason for giving the word the narrow meaning contended for by the Director.

15. The Tribunal took the view that this was a case where, if there was jurisdiction to enlarge the time, justice required an enlargement of time. There is no ground upon which we could have interfered with that decision. However, with reluctance I have come to the conclusions that the respondent Company was out of time and that there was no jurisdiction to extend the time. I would therefore allow the appeal and enter judgment for the Director. It is some small consolation to me that the Foreshore and Sea Bed (Reclamations) Ordinance now replaced the statute with which we are here concerned and that the difficulties produced by the repealed Ordinance will no longer arise.

16. I would make an order nisi that costs follow the event.

Fuad, J.A. :

17. I entirely agree.

Clough, J .A, :

18. I also agree.

1st May 1987

William Marshall & Fleming for Appellant/Crown

D. Widdicombe, Q.C. & Anthony Neoh for Respondent