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Kwok Cheuk Kin v Director Of Lands And Others v Heung Yee Kuk (Interested Party

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date05 November 2021
Neutral Citation[2021] HKCFA 38
Judgement NumberFACV2/2021
Citation(2021) 24 HKCFAR 349
Year2021
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)
FACV2/2021 KWOK CHEUK KIN v. DIRECTOR OF LANDS AND OTHERS v. HEUNG YEE KUK (Interested Party)

FACV Nos. 2, 3 & 4 of 2021

[2021] HKCFA 38

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NOS. 2, 3 AND 4 OF 2021 (CIVIL)

(ON APPEAL FROM CACV NOS. 234, 317 AND 319 OF 2019

(HEARD TOGETHER))

____________________

BETWEEN
KWOK CHEUK KIN 1st Applicant
(Appellant)
and
DIRECTOR OF LANDS
CHIEF EXECUTIVE IN COUNCIL
SECRETARY FOR JUSTICE		 1st Respondent
2nd Respondent
3rd Respondent
and
HEUNG YEE KUK Interested Party

____________________

Before: Chief Justice Cheung, Mr Justice Ribeiro PJ Mr Justice Fok PJ, Mr Justice Chan NPJ and Lord Sumption NPJ
Dates of Hearing: 11-12 October 2021
Date of Judgment: 5 November 2021

____________________

JUDGMENT

____________________

The Court:

Introduction

1. All major political transformations are haunted by the ghosts of the previous regime. There are few matters on which traditional habits are more persistent than the system of land tenure, which has a profound effect on the customs and usages of any settled community. This appeal is concerned with the impact of successive political transformations in the New Territories on its system of land tenure.

2. The Small House Policy is a non-statutory administrative policy operated by the Lands Department which authorises grants of land and building licences to the indigenous male population of certain villages in the New Territories on more favourable terms than those available generally. It was formalised in substantially its present terms by a decision of the Executive Council on 14 November 1972, which also gave it its current name. But it has existed in one form or another since the beginning of the 20th century, when the New Territories were being incorporated into Hong Kong as an extension to the British colony. The question at issue on this appeal is whether it is constitutional under the Basic Law which governed the transition from colonial rule when the People’s Republic of China[1] resumed the exercise of sovereignty over Hong Kong in 1997. The Appellant contends that it is invalidated by the anti-discrimination provisions of the Basic Law and the Hong Kong Bill of Rights[2]. It is common ground that it is prima facie discriminatory on grounds of both sex and social origin. But the Respondents and the Interested Party say that it is validated by a provision of the Basic Law, Article 40,[3] protecting the lawful traditional rights and interests of the indigenous population of the New Territories.

The Small House Policy

3. It is common ground that the Small House Policy as currently applied is accurately described in a pamphlet entitled “How to Apply for a Small House Grant” published by the Lands Department in December 2014. For present purposes, the following summary is sufficient. The beneficiaries of the Policy are “indigenous villagers” of the New Territories. This means adult males descended through the male line from a resident in 1898 of a recognised village. Recognised villages are villages included in a list approved by the Director of Lands. There are currently 642 recognised villages. The Policy relates to land in the village or its immediate environs which are not affected by any impending development or future planning or development proposals. Its object is to enable an eligible villager to build, once in his lifetime, a small house in his own village for his own occupation. It allows him to apply for three kinds of grant: (i) a free building licence, which is a licence to build on private land at a nil premium in the case of pre-1898 villages or a full premium in the case of villages recognised since that date; (ii) a private treaty grant of government land at a reduced premium; and (iii) an exchange, involving the surrender of an existing title in exchange for the grant of a new title at a nil premium so far as it was private land and a reduced premium so far as it was government land. In any of the three cases there must be no “substantiated” local objection to the proposal. Typical objections include objections based on the indigenous villager status of the applicant, as well as those based on environmental or technical issues, or politically sensitive issues such as village boundary disputes or feng shui. Over the years, benefits under the Policy have come to be known as “Ding rights”.

Historical background

4. As is well-known, the British colony of Hong Kong comprised three blocks of territory occupied at different times. The island of Hong Kong was ceded to Great Britain by the Treaty of Nanking[4] in 1842 and the southern part of the Kowloon peninsula by the Convention of Peking[5] in 1860. Under the Second Convention of Peking, in 1898, the Qing Government leased part of the administrative district of San On to Great Britain for 99 years with effect from 1 July 1898, and the district thereafter became known as the New Territories.

5. Shortly after the cession of Hong Kong Island, the colonial administration introduced a new system of land tenure which has subsisted in its essential respects to this day. All land became the property of the Crown, which granted only leasehold interests to others. In principle, leases were granted at a premium reflecting the market value of the land, subject to strict contractual and statutory controls over development. Conversion of agricultural or garden land to building use, where it was available, was granted at a premium reflecting the enhancement of the market value. The same system was applied to southern Kowloon after its cession in 1860. In the case of the New Territories, an Order in Council of 20 October 1898 (the so-called First Proclamation) provided that with limited exceptions all laws and ordinances in force in the colony of Hong Kong were to take effect in the New Territories until amended or repealed. Accordingly, the New Territories (Land Court) Ordinance[6] provided by section 15 that “all land in the New Territories is hereby declared to be the property of the Crown” during the term of the New Territories lease from the Qing Government. All persons in occupation of land were to be deemed trespassers as against the Crown unless their occupation was authorised by grant from the Crown, by title allowed by the Land Court, or by licence from the Crown.

6. At the time of their cession to Great Britain, Hong Kong Island and southern Kowloon had been thinly populated and undeveloped. The New Territories were very different. They comprised an extensive area of about 356 square miles on the mainland (including northern, or “New” Kowloon) and surrounding islands, with a population of about 90,000 people living in a large number of villages. The colonial authorities were therefore faced for the first time with the application of a land settlement originally devised for an almost empty territory to one which was already extensively settled by a substantial population with existing rights over land. Some adaptation of the new land system was therefore necessary if it was to accommodate existing entitlements and avoid significant social disruption. Upon taking possession of the New Territories in April 1899 the Governor, Sir Henry Blake, declared that the government’s policy would be to protect the existing commercial and landed interests and the usages and good customs of the inhabitants.

7. Chow J (as he then was)[7] heard expert evidence about the system of land tenure in force before the cession, which these arrangements replaced.[8] He found that in theory land tenure before 1898 was governed by the Qing Code.[9] Under the Code, all land was nominally the property of the Emperor and its occupation by others was permissible only by grant of the Imperial authorities in return for the payment of land tax. By the late 19th century, however, land tax was rarely collected, the Code had fallen into desuetude and a system of customary tenure had taken its place. The basic features of this system were that plots were treated as belonging to the owner of the subsoil, whose title was derived from leases from the Emperor and whose obligation was to pay the land tax. But the exclusive right of use and occupation belonged to the owner of the topsoil, whose title derived from leases granted by the subsoil owner. Both the subsoil leases and the topsoil leases created interests in the land which were perpetual, heritable and partible. This left the topsoil owner with an unlimited dominion over the land subject to payment to the subsoil owner of a rentcharge. There was also no legal restriction on building.

8. The effect of the new system of land tenure was that customary titles under the pre-colonial system were abolished and replaced by a system of Crown leases for a limited term not exceeding 99 years, subject to various covenants and statutory provisions restricting development. Between 1899 and 1903, land in the New Territories was surveyed, cadastral plans were drawn up, and a system of registration of title was established. All claims to land were required to be presented to a Land Court created in 1900, whose function was to receive the claims and determine those which were disputed. The New Territories were divided into blocks, in respect of each of which a Block Crown Lease was issued for a term of 99 years less 3 days[10] corresponding to the term of the lease from the Qing Government. Each Block Crown Lease contained a Schedule listing lots comprised within the Block. It recorded title to each lot, where title had been established, described its current use, and contained covenants against building without government consent. Existing title to 354,277 lots was established under this procedure. A Crown rent was fixed for each of them. These...

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