Chang Lan Sheng v Attorney General

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO.33 OF 1967.

On Appeal from O.J. Action No.1382 of 1965)

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JUDGMENT

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Huggins, J:

1. I have had the advantage of reading the judgment of Mr. Justice Blair-Kerr and I entirely agree with the conclusion which he has reached. It is not an altogether easy case and it has not been made any easier by the prolixity of some of the arguments addressed to us on behalf of the respondent. I shall refer only to those points which appear to me to relate to the substance of the matter.

2. At the outset I ought perhaps to say a word on the vexed question which was aired when we were asked to inspect a file produced by a Government official. The learned trial judge declined to look at the file, but the respondent submitted that he was wrong. The basis upon which the courts should act when it is suggested that disclosure of official papers is contrary to the best interests of the state has now at last been established by Conway v. Rimmer⁽¹⁾, but difficulties may yet arise in deciding just how far the court's right of inspection should be carried. I have always been of the view that the courts must be jealous to ensure that their duty to give justice to a subject is not made impossible of fulfilment by reason of some wholly unjustified fear of damage to the interests of the state. But one must not be unrealistic and overlook the fact that the power of the courts to do justice is interdependent upon the ability of the Executive to perform its functions efficiently. The efficient carrying out of the executive function requires that a degree of secrecy should sometimes be afforded. I would not wish to go further than is necessary for the decision of this particular case and I see possible difficulties of definition if one grants a blanket protection to classes of documents such as "cabinet papers". At one point in his speech Lord Reid referred to "cabinet minutes", which is a rather more limited phrase. We have the affidavit of the Colonial Secretary and the certificate therein referred to indicates that the file in question here contains minutes of the nearest equivalent in Hong Kong to the British cabinet. The file may also contain other papers of an entirely different character and it might be that in another case we would have to inspect a file to see which of its contents we thought should be disclosed. Here, however, it has been made clear to us that the purpose of the application for disclosure is to reveal what decisions have been made affecting the land policy of the Government and the reasons for those decisions. I do not think we should consent to such disclosure and it follows that I think it unnecessary to inspect the file at all.

3. The first question which arises on the argument of counsel for the respondent is: has any fine or premium been demanded for the new lease to which the respondent was entitled upon his exercise of his option? With respect this seems to me to be putting the cart before the horse. He relied upon such cases as Miramar Hotel & Investment Co. Ltd. v. The Collector of Stamp Revenue⁽²⁾, where it was held that the court is not bound by the label which the parties attached to a sum of money which is payable under a lease. In my view those cases do not assist us in deciding the present case and they really beg the question which we have to answer. This lease expressly provides that no premium is to be paid for renewal and the Director was clearly well aware of that fact. He was concerned solely with the fixing of the rent and that is all he purports to have done. If the figure is excessive, so that the Collector of Stamp Revenue might have assessed duty on the basis that the premium was being paid in addition to rent (as in the Miramar Hotel Case⁽²⁾), it does not follow that what has been fixed is not a rent - a periodic payment reserved from the land demised: it merely means that the rent has not been fixed in accordance with the terms of the lease. It is clear (nor has the respondent sought to suggest otherwise) that the figure of $60,764 is greatly in excess of the zone Crown rent current at the material time. The zone Crown rent was fixed in 1952 and counsel for the respondent concedes that it would not be unreasonable for the Director to assess a rent which made allowance for the general increase in rents in the Colony since that date: he said that even a 100% increase might not have been opposed, but certainly it should be no more. If he be right then the rent fixed cannot be justified and it must be reduced. To say that the figure fixed must then include "a hidden premium" is to confuse the real issue.

4. It seems to me that there are two basic questions which have to be answered:

5. It has been urged upon us, as it was urged upon the trial judge, that the rent has not been fixed by the Director at all and that even if it was fixed by him it was not fairly and impartially fixed. The learned judge rejected these arguments and I think he was right. What the Director did was to adopt a formula for the assessment of rent, that formula containing an unknown, namely the estimated price per square foot of the land (or "premium") if it were offered on the open market for a term of 75 years at the zone Crown rent. This unknown was fixed by the Director, who then left the actual calculation to someone else. It seems to me unrealistic to say that the Director must himself do the calculation: certum est quod certum reddi potest.

6. But was the rent fairly and impartially fixed? First counsel for the respondent say that the Director wrongfully failed to hear representations on behalf of the respondent and second they say that he allowed matters of Government policy to colour his assessment. It has been submitted that the Director was, for the purposes of fixing this rent, either a "quasi-arbitrator" or a valuer and that whichever he was it was incumbent upon him in the circumstances to invite representations from the respondent. It is not, I think, contested that if the Director was an arbitrator or "quasi-arbitrator" he was under a duty to hear both sides, nor is it suggested that he did hear both sides. The appellant contends that the position of a person nominated in a contract to fix part of the consideration is not that of an arbitrator at all, since an arbitrator is a person appointed to do what otherwise the courts might have to do, namely to decide a dispute which has arisen between the parties. As I understand him Mr. Bernacchi for the respondent did not say that there was a dispute between the parties which would call for the services of an arbitrator, but rather that the Director must, since he himself says he is not an expert valuer, necessarily have been an arbitrator. I am well satisfied that the Director was not appointed as an arbitrator and that he was never intended to act as such. Undoubtedly the parties could have contracted for a reasonable rent and have provided that in the event of their failing to agree the Director should act as arbitrator. That is not what they did: they provided that the Director should fix the rent and no dispute arose or could have arisen until he had purported to do so. That does not, in my view, put him in the same class as a certifying architect (see Chambers v. Goldthorpe⁽³⁾) for the architect has to judge whether work has been done in accordance with the building contract. Whether or not the test for distinguishing between a valuer and an arbitrator as stated at 39 Halsbury (3rd ed.) 4 (para.6) is absolute, it is in my judgment sufficient for our purposes:

"...... an arbitrator is appointed to determine a certain matter, such as the price of goods, for the purpose of settling a dispute which has arisen between the parties, but ... a valuer is appointed to determine such a matter before any dispute has arisen and with the object of preventing any dispute."

I do not find it helpful to review the decided cases which fall on each side of the line. The fact that the Director was not an expert valuer might lead one to expect that he was not intended to act as a valuer, but I find nothing in the lease which leads me to think that the parties ever contemplated that the Director should act as an arbitrator, i.e. that he should exercise functions of a judicial character. It is true that the Director is not an expert valuer in the sense that he has a professional qualification as a valuer, but by virtue of his office he is a person who might be better equipped than most to fix a fair rent for premises leased from the Crown. If it be necessary to classify him at all I would think that he should be regarded as a valuer. If that be correct then this court should not interfere with his assessment unless it can be shown to be wrong: see per Lord Justice Denning in Dean v. Prince⁽⁴⁾. The learned trial judge thought that there was an error in the Director's mode of assessment but rejected the contention that he acted improperly and, indeed, found as a fact that he "acted quite impartially in fixing what he considered to be a fair and reasonable rent". The whole purpose was to leave the fixing of the rent in the hands of a man who was thought to be in a particularly good position to know what was a fair rent and it must have...