CHAN KAM CHUEN v. SECRETARY FOR TRANSPORT

CACV 321/2001 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 321 OF 2001 (ON APPEAL FROM LDMR NO. 46 OF 2000) BETWEEN CHAN KAM CHUEN (陳金泉) Applicant and SECRETARY FOR TRANSPORT (運輸司) Respondent Before : Hon Cheung, Chu JJA and Poon J in Court Date of Hearing : 12 March 2015 Date of Judgment : 12 March 2015 Date of Reasons for Judgment : 30 March 2015 REASONS FOR JUDGMENT Hon Cheung JA : Background The applicant operated a farm known as Kam Wah Yuen (‘金華園’) on land situated in Yuen Long. Structures were built on the land respectively for human habitation and pig rearing. In 1999 the Government resumed the land to construct the Western Railway pursuant to the Railways Ordinance (Cap 519) ‘RO’. After the resumption in January 1999, the Government had offered ex gratia payment to the applicant for the structures on the land and the surrounding area. The offer was made pursuant to the policy that ex gratia allowance would be paid to pig and poultry farmers on clearance. The ex gratia payment would be taken into account and deducted from the statutory compensation. The applicant refused to accept the offer of ex gratia payment and instead applied in October 2000 to the Lands Tribunal, purportedly under section 34 of the RO, for an award of the ex gratia payment. H H Judge Chow, sitting as the Presiding Officer of the Lands Tribunal dismissed the claim in February 2001. The applicant lodged an appeal immediately against the decision. However, the applicant did not apply to fix a hearing date of the appeal until October 2014. In the meantime in June 2005 the applicant applied to the Lands Tribunal for compensation under the RO. On 13 October 2006, the Lands Tribunal assessed the compensation at $1,590,000. The Lands Tribunal rejected the applicant’s claim for compensation in respect of the structures used for pig rearing. On appeal by the applicant, the Court of Appeal on 13 May 2008 [Chan Kam Chuen v. Secretary for Environment, Transport and Works (CACV 69/2007) [2008] 4 HKLRD 635] allowed the applicant’s appeal in respect of compensation for buildings not used for human habitation. At the conclusion of hearing of the present appeal, we dismissed the appeal with costs to the respondent. I now give the reasons for our decision. Jurisdiction to deal with ex gratia payment The Judge dismissed the application on the ground that the Lands Tribunal has no jurisdiction to deal with ex gratia payment. Section 8(1) of Lands Tribunal Ordinance (Cap 17) (‘LTO’) confers jurisdiction on the Lands Tribunal to determine the amount of compensation payable by the Government in respect of claims under any Ordinance specified in the Schedule. The RO is one of the specified statutes in the Schedule. The applicant’s application was made under section 34 of the RO. Section 34 merely sets out the procedure to be adopted by the person ‘who claims to be entitled to compensation under this Ordinance.’ Under the RO the statutory scheme of compensation is provided by sections 31 and 32. Section 31 provides that, except to the extent of the rights to compensation under section 32, a person does not have any right against the Government or any other person to recover money for any use authorized under the RO, or for any works or anything else authorized under the RO. Under section 32(1) of the RO, the right to compensation referred to in section 31 is, for the purpose of this appeal, the right to recover from the Government for the matters set out in Column 1 of Part II of the Schedule a sum assessed on the basis specified in Column 2. The relevant parts of Columns 1 and 2 of Part II of the Schedule are as follows : ‘ Matters for which compensation may be claimed Basis on which compensation is to be assessed 1. The resumption of land under this Ordinance. As if the claim were made under the Lands Resumption Ordinance (Cap. 124) for land resumed under that Ordinance. ’ This indicates that the basis of compensation for a resumption under RO is to be treated on the same basis as if the claim for compensation were made pursuant to land resumption under the Lands Resumption Ordinance (Cap 124) (‘LRO’). The part of the LRO which deals with compensation can be found in section 10, the relevant part of which is set out as follows : ‘ (1) The Tribunal shall determine the amount of compensation (if any) payable in respect of a claim submitted to it under section 6(3) or 8(2) on the basis of the loss or damage suffered by the claimant due to the resumption of the land specified in the claim. (2) The Tribunal shall determine the compensation (if any) payable under subsection (1) on the basis of– (a) the value of the land resumed and any buildings erected thereon at the date of resumption; …. (c) the amount of loss or damage suffered by any claimant due to the severance of the land resumed or any building erected thereon from any other land of the claimant, or building erected thereon, contiguous or adjacent thereto;’ Section 11 sets out the principles of assessment of compensation. As apparent from both the RO and LRO, ex gratia payment is not part of the statutory compensation scheme at all. The applicant specifically relied on section 10(2)(c). In my view the words ‘the amount of loss and damages’ there are still referable to the compensation. Section 10(2)(c) is not a free standing claim on its own which may encompass ex gratia payment. Compensation and ex gratia payment are clearly two different concepts. As explained by Chu J (as she then was) in 陳尊對離島地政署 (HCAL 124/2004), the ex gratia payment is a policy based on administrative convenience, the purpose of the ex gratia payment is to replace the statutory compensation so as to avoid disputes on the difference in amount of the statutory compensation and delay and inconvenience brought by the judicial process. The person whose land is resumed has the right to reject the ex gratia payment and seek statutory compensation in the Lands Tribunal pursuant to the LRO (paragraphs 20 and 21 of the judgment). The applicant relied on a number of cases. These cases clearly do not assist him. In 陳尊及九廣鐵路公司及另一人 (HCAL 110/2004), Chu J (as she then was) held at paragraph 20 that if an applicant whose land was resumed was not satisfied with an offer of ex gratia payment or compensation, he could lodge a claim in the Lands Tribunal and let the Lands Tribunal assess the compensation. Chu J did not say the Lands Tribunal can assess the ex gratia payment. 陳尊對離島地政署which I have already referred to earlier, makes the position plain. In The Financial Secretary Incorporated v. Ka Wing Electrical Engineering Co., Ltd and others (DCCJ 4689/2006), Deputy District Judge Anthony Kwok (as he then was) held that if the applicant is not satisfied with the amount of compensation or ex gratia payment offered by the government, he could lodge a claim in Lands Tribunal for it to assess the amount. This statement must be understood in its context and I do not understand the Judge to mean the Lands Tribunal has jurisdiction to deal with a claim on ex gratia payment. In my view the Judge below was correct in declining jurisdiction. This being the case it is not necessary for me to address the issue of the justifiability of ex gratia payment which is not pursued upon by the applicant but addressed by Mr Simon Lam for the respondent in his written submission. Application for recusal At the start of the appeal, the applicant applied for Chu JA and I to be recused from hearing this appeal on the ground that we had previously dealt with his case in CACV 69/2007 and had found against him. We rejected the application. Although prejudice was relied upon by the applicant the real complaint was that we had previously found against him. As a matter of fact, in CACV 69/2007 we had also found for the applicant on certain issues although the applicant contended that we had held against him more substantially. The fact that two of us had previously found against the applicant on matters concerning the statutory scheme of compensation cannot be the proper basis for alleging prejudice on the part of the judges. The application simply failed to get off the ground. Delay in prosecuting the appeal The applicant lodged the appeal in 2001, thereafter nothing was substantially done until December 2013 when he lodged an amended notice of appeal. The application to fix a date for the hearing of an appeal was only made on 22 October 2014. The applicant explained after he filed the notice of appeal, he was declared bankrupt which was only discharged in 2005. Thereafter his efforts were taken up with the appeal on the statutory compensation. In my view this does not explain the further delay after the completion of appeal in 2008/2009. In view of the lengthy delay, the respondent should have taken steps at an early stage to strike out the notice of appeal for want of prosecution and for lack of merits instead of allowing this matter to drag on like this. After the Civil Justice Reform the respondent to an appeal is expected to adopt a more proactive approach in the conduct of the appeal. Hon Chu JA : I agree. Hon Poon J : I agree. (Peter Cheung) (Carlye Chu) (Jeremy Poon) Justice of Appeal Justice of Appeal Judge of the Court of First Instance Mr Cheung Chi Fai, instructed by Kenneth Poon & Co., for the applicant Mr Simon K. C. Lam, instructed by Department of Justice, for the respondent