Chan Choy Fong v The Secretary For Home Affairs

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No. 149
(Civil)

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REASONS FOR JUDGMENT

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Nazareth, V.-P.:

1. Having heard counsel, we allowed the appeal and set aside the order made below. We now give our reasons.

2. The applicant/respondent ("Mr Chan") is a member of a t'so which owns three pieces of land in the New Territories. The last two managers appointed and registered under the New Territories Ordinance (Cap. 97) died in 1973 and 1974. No new manager or managers have since been appointed. Mr Chan suggested in 1982 that new managers should be appointed but met with objection from Mr Chan Tao-sang who belonged to another branch of the members. In December 1985 and February 1986 Mr Chan, and Chan Tao-sang reached agreement between themselves and the District Officer that the two of them should be appointed as new managers, and the majority of members apparently agreed. Unfortunately Chan Tao-sang went back on the agreement. He wished the consent of Mr Chan Koon-wah, a member of yet another branch to be secured. The District Officer therefore felt unable to proceed with the matter. In April 1996 Mr Chan's solicitors again wrote to the District Officer. They were provided with forms to be completed as the District Office felt that after ten years the situation might have changed. There was in the forms and letters from the District Office an emphasis upon consent from each of the members of the t'so, which can only be regarded as unfortunate as it became the focus of contention between the District Office and Mr Chan's solicitors. His present solicitors had by this time come into the picture. The solicitors insisted that s.15 of the New Territories Ordinance empowered the Land Officer to appoint a new manager whereas the District Officer took the view that he needed further information including a list of members, a family tree and a letter of consent from the t'so members. That view of the District Officer was communicated inter alia in his letters of 15th April 1996 and 19th August 1996. It was endorsed in a letter from the Secretary for Home Affairs dated 13th September 1996 stating inter alia that any new appointee must have the consensus support of members.

3. On 6th December 1996 Mr Chan filed a notice of application for leave to apply for judicial review of the decision of the Secretary for Home Affairs in his letter of 13th September 1996 affirming the decision of the District Officer made in his letter of 15th April 1996. He obtained leave on 10th December 1996 from Yeung J. The relief sought by Mr Chan included declarations that the District Officer had discretion under s.15 of the New Territories Ordinance to cancel the appointment of the registered managers and select and register new managers, and that good cause had been shown for such cancellation of the registration of the former managers by reason of their death; it also included "an order of mandamus to direct the District Officer ... to exercise his duty and power to cancel the [former] registered managers ... and select and register new managers pursuant to s. 15". Following the substantive hearing before him, Yeung J granted the relief sought with a direction that the new appointments be made within 6 months. The respondent/appellant, the Secretary for Home Affairs, now appeals to this Court against the order of Yeung J.

4. It is convenient at this stage to set out the text of s. 15 of the New Territories Ordinance, which lies at the heart of this appeal:

"15. Registration of manager of "t'ong", etc.

Whenever any land is held from the Crown under lease or other grant, agreement or licence in the name of a clan, family or t'ong, such clan, family or t'ong shall appoint a manager to represent it. Every such appointment shall be reported at the appropriate New Territories District Office of the City and New Territories Administration, and the Secretary for Home Affairs on receiving such proof as he may require of such appointment shall, if he approves thereof, register the name of the said manager who shall, after giving such notices as may be prescribed, have full power to dispose of or in any way deal with the said land as if he were sole owner thereof, subject to the consent of the Secretary for Home Affairs, and shall be personally liable for the payment of all rents and charges and for the observance of all covenants and conditions in respect of the said land. Every instrument relating to land held by a clan, family or t'ong, which is executed or signed by the registered manager thereof in the presence of the Secretary for Home Affairs and is attested by him, shall be as effectual for all purposes as if it had been executed or signed by all the members of the said clan, family or t'ong. The Secretary for Home Affairs may on good cause shown cancel the appointment of any manager and select and register a new manager in his place. If the members of any clan, family or t'ong holding land do not within 3 months after the acquisition of the land make and prove the appointment of a manager, or within 3 months after any change of manager prove the appointment of a new manager, it shall be lawful for the Crown to re-enter upon the land held by such clan, family or t'ong, which shall thereupon become forfeited. Such re-entry shall be effected by the registration of a memorial thereof in the appropriate New Territories Land Registry." (emphasis supplied)

5. The judge rightly recognised that the role of the Secretary for Home Affairs under s. 15 has two limbs. The first is set out in the first passage in s. 15 emphasised above ("the first limb") and was characterised by the judge as "passive" involving as it does merely approval and registration of managers appointed by the t'sos themselves. The second set out in the second passage similarly emphasised ("the second limb") was described as "a more active role" and enables the Secretary for Home Affairs on good cause shown to cancel the appointment of a manager and select and register a new manager in his place.

6. Having identified the two limbs the judge in his judgment went on to say:

"In my view, the word 'may' in the context of Section 15 of the Ordinance must necessarily mean 'shall' as unless a new manager is appointed, the t'so runs the risk of having the land forfeited. The Secretary for Home Affairs has the duty, in my view, to safeguard the interest of any t'ong or t'so in the New Territories."

The appellant in his first ground of appeal challenges that view, while Mr Johnson Lam for Mr Chan seeks to uphold it. In the end, however, it has turned out to be a somewhat peripheral issue. However that may be, it is convenient to dispose of it, and I do not find it necessary to say more than that in the light of its context "may" clearly has its usual permissive or discretionary meaning and does not impose upon the Secretary for Home Affairs the duty contended for by Mr Chan.

7. The competing submissions of counsel thus boil down to two questions:

(1) Whether the second limb of s. 15 was engaged at all.

(2) If so, whether the exercise of discretion or the refusal to exercise discretion can be challenged as being irrational in the Wednesbury sense or contrary to principle.

8. The first question conceals a point of construction, i.e. whether the words "cancel the appointment of any manager" extends to cancellation of the appointment of a deceased manager, or whether it must refer to a subsisting appointment of a manager who is alive and discharging his functions. In the ordinary way, any appointment would terminate with the death of the appointee, and no cancellation or revocation would be necessary. Thus upon the death of a manager, a successor could be appointed without the necessity to cancel the earlier appointment. Moreover, it is argued, that the cancellation of an appointment would normally relate back to its inception, which would not be right with reference to the two deceased managers since there is no question about the validity of their appointments or of their actions while in office. However, it is difficult to see why the latter point could not be met by the cancellation being made with effect from their death or preferably the appointment of their successors.

9. Yet another argument in favour of the narrow construction is said to be the distinction plainly drawn between appointment and registration of a manager in both limbs. I cannot say I am persuaded that such a distinction weighs significantly in resolving the matter.

10. I have no doubt that s. 15 in the context of the second limb should be given a purposive approach. Thus I would accept that the purpose of the New Territories Ordinance in the present context is to provide a simple working system for t'sos in relation to the land they own and the management of and dealings in it with due regard to the customary law applicable. Thus a construction that is open upon the wording, which enables managers to be appointed, as opposed to one that does not, is clearly to be preferred, if the latter perpetuates a situation in which there are no managers, dealings are frozen, rights of members are unenforceable and indeed prejudiced, and so on. It is unlikely that the legislature could have overlooked the...