在12月14日下午，高等法院法官夏正民作出了判决，不接受两位公屋居民的司法复核申请。之后，原告之一的马基召宣布不再上诉，而卢少兰则向上诉法庭提出上诉。就在同一天，上诉法庭驳回了卢少兰的诉讼请求。
在上诉法庭的判决作出之后，卢少兰还有一次向香港终审法院上诉的机会。然而，领汇基金原定的上市日期12月20日已经迫近，如果法院没有及时审结案件的话，整个上市计划就可能“告吹”。为此，房委会向终审法院递交申请，希望缩短卢少兰的上诉期，以便领汇基金可以顺利上市交易。 然而，终审法院裁定由于法律没有授权可以缩短当事人的上诉期限，因而拒绝了房委会的请求。
由于终审法院的“不配合”，特区政府在12月19日只得宣布“搁置”次日的领汇基金上市安排，并退还投资者的认购款。
【大紀元7月19日報導】(據明報新聞網報導) 香港終審法院就領匯房地產基金上市的合法性作出終極裁決，駁回公屋居民盧少蘭上訴，為領匯上市掃除最後障礙。
終審法院5名法官一致裁定盧少蘭敗訴。在判辭中，終院法院法官指出，法官指出，在法例条文中订明房委会法定宗旨时 房委會只是確保提供公屋居民可獲得適當的居住環境及設施，不是一定要由房委會提供，而只要房委會確保第三者提供有關設施及環境就可以了，故裁定房委會的領匯基金上市為合法。盧少蘭提出司法覆核案的主要爭拗點是，房委會將領匯分拆上市的行為，是否合乎《房屋條例》中要房委會確保（to secure the provision of）公屋居民可獲得適當的居住環境及設施。
盧少蘭一方擔心領匯上市後會否為了增加收入，例如將街市改裝成為售賣電腦軟件中心，導致居民的享用街市的權利被剝奪。
然而，首席法官李國能在終審聆訊時曾提出﹕公屋商場及停車場的官契（crown lease），是否已訂明土地的用途﹔若日後有關資產落在領匯手上，其土地用途又是否可以更改﹖換言之，所有官地均由政府擁有，即使上述公屋商場及停車場落在領匯手上，政府是否仍有最終的控制權﹖
終審法院判案書撮要
1. 終審法院一致裁定駁回上訴。終審法院首席法官李國能的判決
2. 房屋委員會(下文稱"房委會")是一個法定團體，其職分必須透過適當詮釋<<房屋條例>>來確定。
3. 房委會明顯有權將轄下零售和停車場設施這些財產，出售予領匯房地產投資信託基金(下文稱"領匯")。<<房屋條例>>第4(2) (a)條明文規定，房委會有處置財產的權力。但在行使這個權力時，房委會必須符合第4(1)條中所明訂的宗旨，就是要確保向委員會決定並經行政長官批准的 各類或各種類人士，提供房屋和提供委員會認為適合附屬於房屋的康樂設施。本案的關鍵問題是，將零售和停車場設施出售予"領匯"，是否符合"確保提供"有關 設施這個宗旨。如果是不符合的話，出售有關設施便屬超越房委會本身作為一個法定團體的職分的行為，即是團體的越權行為(ultra vires)。
4. 法例條文明訂房委會法定宗旨時，當中的措辭是"確保提供"而不是"提供"，這點至為重要。若然措辭是"提供"的話，便可提出有力的爭辯理由，指房委會本身 責無旁貸，必須提供有關的設施，而這樣必然意味著房委會必須保有這些設施的管控權。"提供"這個措辭明顯有別於第4(1)條中用以界定房委會法定宗旨的措 辭"確保提供"，即是，房委會只須確保提供設施，而非提供設施。
5. 確保提供設施這句話的意思，並不是指房委會本身必須直接提供有關設施(如果是這樣，便是意味著房委會必須持有有關設施的管控權)；也不是指由於房委會本身 一向直接提供有關設施，所以不可以放棄擔當這個角色(否則便會變成是放棄管控權)。<<房屋條例>>中並沒有條文，明示或暗示， 規定政府公共屋邨的租戶擁有法定權利，可以要求房委會在他們仍然使用有關設施之時，必須繼續保有及管控這等設施。只要住戶能享受有關設施，即使並不是由房 委會提供，而是由一個房屋委員會沒有管控權的第三者，即"領匯"所提供的，房委會也可說是能盡了向住戶確保提供有關設施的責任。
6. 因此，房委會將零售和停車場設施出售予"領匯"，是完全符合房屋委員會必須確保提供該等設施這個法定宗旨。出售該等設施屬房委會職分範圍之內的行為，屬房委會作為團體的權限之內。
其他終審法院法官的判決
7. 其他終審法院法官，包括常任法官包致金，常任法官陳兆愷，常任法官李義及非常任法官梅師賢爵士，亦一致贊同首席法官的判決。
FACV No. 10 of 2005
IN THE COURT OF FINAL APPEAL
OF THE
HONG KONG SPECIAL
ADMINISTRATIVE REGION
FINAL APPEAL NO. 10 OF 2005
(CIVIL)
(ON APPEAL FROM CACV NO. 378 OF 2004)
_____________________
Between:
LO
SIU LAN
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Appellant
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- and -
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HONG KONG HOUSING AUTHORITY
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Respondent
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_____________________
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Court:
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Chief
Justice Li, Mr Justice Bokhary PJ,
Mr
Justice Chan PJ, Mr Justice Ribeiro PJ and
Sir
Anthony Mason NPJ
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|||
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Dates
of Hearing:
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5
and 6 July 2005
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Date
of Judgment:
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20
July 2005
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J
U D G M E N T
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Chief
Justice Li:
1.
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The respondent Housing Authority (“the
Authority”) is a statutory corporation.
The question arising in this appeal is whether it has the power to
dispose of properties being retail and carpark facilities (“retail and
carpark facilities” or “facilities”) within its housing estates to
the Link Real Estate Investment Trust (“Link REIT”), a unit trust to be
listed on the Hong Kong Stock Exchange.
The issue concerns the legal capacity of the Authority and turns on the
proper interpretation of the Housing Ordinance, Cap. 283 (“the
Ordinance”).
Object
2.
The Ordinance, enacted in 1973,
established the Authority as a corporation.
Sections 3(1) and 6. Its object
is laid down in s. 4(1) as follows:
“The Authority shall exercise its powers
and discharge its duties under this Ordinance so as to secure the provision of
housing and such amenities ancillary thereto as the Authority thinks fit for
such kinds or classes of persons as the Authority may, subject to the approval
of the Chief Executive, determine.”
The proper
interpretation of this provision is at the heart of this appeal. “Housing” is defined to mean “residential,
industrial, commercial and business accommodation, buildings or premises”. Section 2.
Powers
3.
The statute confers on the
Authority numerous powers. The power
which is engaged in this appeal is the power to dispose of property. Section 4(2)(a) confers the power “to acquire
and hold property of any description and … to dispose of any such
property.” The Authority relies on this
statutory power in relation to the present transaction. It should be noted that apart from this
power, the Authority has the power to sell or otherwise dispose of any land in
an estate under s. 17(A)(1). This
provision is not relied on by the Authority.
For the exercise of this power of sale, the Chief Executive’s prior
approval of the purchase price and the terms and conditions of payment must be
obtained. Land is defined to mean
“immovable property” and estate is defined to mean “any land vested in the
Authority or the control and management of which has been vested in the
Authority…”. Section 2.
4.
The Authority has the power to
manage “any housing … having regard to
the interests, welfare and comfort of the tenants, owners or occupiers thereof”
and to charge fees for its management services.
Section 4(2)(e). The
Authority may enter into an agreement with any person (a) for the management by
such person of any housing; (b) generally for the provision by such
person of amenities ancillary to housing, and the Authority may authorize such
person to do any act, including the charging of fees for services performed,
which the Authority itself may do in this regard. Section 4(2A).
5.
Part III of the Ordinance
headed “Disposal of Property” includes the power to lease any land in any
estate and to fix the terms of letting subject to the provisions set out in
this Part. Section 17A, which confers the
power to sell any land in an estate and has been referred to above, is
contained in Part III. Under Part IV of
the Ordinance, the Authority has various powers for the control of estates:
termination of leases, inspection of premises, emergency closure of premises
and so on.
Duties
6.
For present purposes, three
duties imposed by the statute on the Authority should be referred to. First, the Authority is under a duty to
balance its books. Its policy “shall be
directed to ensuring that the revenue accruing to it from its estates shall be
sufficient to meet its recurrent expenditure on its estates.” Section 4(4).
Secondly, it must submit to the Chief Executive for his approval a programme
of its proposed activities and estimates of its income and expenditure for the
next financial year. Section 4(3). Thirdly, the Chief Executive may give such
directions as he thinks fit, either generally or in any particular case to the
Authority and the Authority must, in the exercise or performance of its powers,
functions or duties under the Ordinance, comply with such directions. Section 9.
The
background
7.
Since its establishment in
1973, the Authority has developed a large number of estates to provide
subsidized rental housing to low income families who are unable to afford
private rental housing (“public rental housing”). The provision of public rental housing is the
Authority’s core function. At present,
around 30% of the population live in public rental housing.
8.
In developing its estates, the
Authority has included retail and carpark facilities within them. Many of these facilities are integrated
within residential blocks. Some are
stand alone facilities in proximity to the residential blocks.
9.
Apart from its core function as
a provider of public rental housing, the Authority had in the past engaged in
the Home Ownership Scheme (HOS) and the Tenants Purchase Scheme (TPS). Under these schemes, the Authority sold flats
to eligible families at discounted prices.
These sales generated significant income for the Authority’s coffers.
10.
On 13 November 2002, following
a comprehensive review of housing, planning and land policies, the Secretary
for Housing, Planning and Lands (“the Secretary”) delivered a Statement
on Housing Policy to the Legislative Council announcing a number of
measures. The announced measures
relevant to this appeal were: (1) the scale of the public rental housing
construction programme would be demand driven with a view to maintaining the
average waiting time of three years; and (2) the Government would
recommend to the Authority that it should cease the production and sale of HOS
flats and halt the sale of public rental flats under the TPS.
11.
In his statement, the Secretary
stated, in relation to public rental housing provided by the Authority, that “the
thrust of Government’s subsidized housing policy should be to assist low income
families which cannot afford private rental housing” and that this “must
continue to sit at the very heart of Government’s housing strategy”. He noted that, as a result of continuous
investment by Government over the past five years, the number of families on
the waiting list for public rental housing had been reduced from 150,000 in
1997 to around 90,000 and that the average waiting time had been reduced from
over six years in 1997 to just less than three years. He reassured the public that:
“Government will continue to provide
subsidized rental accommodation to low-income families which are unable to
afford private rental housing, and will endeavour to keep the average time for
waiting … at three years.”
He estimated
that this would require over 20,000 units to be built annually in the next few
years but the actual quantum of production would depend on the housing demand
of low income families.
12.
The Authority acceded to Government’s
requests in relation to HOS and TPS. But
as the sale of flats under these schemes had produced significant income for
the Authority, the cessation of sale would lead to financial difficulties for
the Authority.
13.
In July 2003, on the advice of
Executive Council, the Chief Executive ordered that Government should seek the
Authority’s agreement in principle to divest its retail and carpark facilities.
14.
The Authority proceeded to
consider the matter. Its secretary
prepared a Memorandum dated 18 July 2003 seeking members’ agreement in
principle to such divestment. The
Memorandum, in recounting the background, stated that the Authority held
approximately 1 million square metres of retail facilities and some
100,000 carpark spaces, amounting to some 11% and 16% of the market
respectively. The Memorandum also stated
that divestment of these facilities had first been mooted by a consultant
commissioned by the Authority in 2000, was recommended by the Government’s
Report on the Review of the Institutional Framework for Public Housing
published in June 2002 and that thereafter the Authority appointed a consultant
to study various options for divestment.
15.
The Memorandum put forward the
following reasons for divestment. (The Memorandum uses the abbreviation “HA” to
refer to the Authority).
“REASONS FOR DIVESTMENT
Withdrawal from commercial operation
4. Divestment of the HA’s [retail and carpark] facilities would
enable the HA to focus its resources on its core function as a provider of
subsidized public housing. Furthermore,
the facilities concerned are likely to generate better returns under private
sector ownership and operation, which will in turn have a positive impact on
the overall economic development of Hong Kong.
Tiding over budget deficit
5. Following the announcement of Government’s new housing
policy in November 2002, the production and sale of HOS flats have ceased
indefinitely and the sale of TPS flats will be halted. In the absence of other replacement income
sources to fund its capital expenditure on the production of public rental
housing flats, the HA will incur an annual net cash flow deficit. The HA’s cash balance is forecast to decrease
from $22 billion at the beginning of 2003/04 to minus $5.5 billion by the end
of 2005/06. Proceeds from the proposed
divestment will help to meet the HA’s funding requirements in the short term,
allowing it to pursue in the longer term various cost-saving initiatives to
improve its financial position.”
In short, a
principal reason for the divestment was to put the Authority in a better
financial position to fund its core function as a provider of public rental
housing. It should be emphasised that
public rental housing serves a large number of people, including those in need
who are waiting for such housing and otherwise may have to wait even longer.
16.
In relation to the Divestment
proceeds, the Memorandum noted:
“12. Under the current financial arrangements between Government and
the HA, the value of land for the non-domestic portion of public rental housing
estates and HOS courts is treated as Government’s equity investment in the
HA. The return on this investment is
reflected in the Government receiving 50% of the net operating surplus
generated from the HA’s non-domestic operations.
13. Although Government has a financial stake in the HA’s [retail
and carpark] facilities, it has agreed in principle to allow the HA to retain
the full proceeds from divestment to meet its cash flow deficit.”
So, on
divestment, the Authority would retain all the proceeds of sale and Government
would in effect be injecting its entitlement into the Authority.
17.
The Memorandum recommended that
Members agree in principle to the proposal to divest the Authority’s retail and
carpark facilities. It also recommended
agreement to the broad divestment strategy proposed in the Memorandum and the
appointment of global coordinators and other advisers necessary for
implementation of the strategy.
18.
On 24 July 2003, at an open
meeting, the Authority agreed to the Memorandum’s recommendations.
19.
In August 2003, the Authority
published an Information Note on its decision to divest its retail and carpark
facilities, summarising the reasons for divestment set out in the Memorandum of
18 July 2003.
“Why Divest HA’s Assets?
· To enable HA to better focus its resources
on its core function as a provider of subsidized public housing.
· To enhance the operation efficiency and
competitiveness through divestment, hence facilitating further development of
the retail business.
· To help HA tide over the budget deficit.”
Link REIT
20.
It was eventually decided that
the vehicle which would be used to acquire the Authority’s retail and carpark
facilities would be a unit trust. Link
REIT, a unit trust authorised under the Securities and Futures Ordinance,
Cap. 571, was established for the purpose of the acquisition with funds
raised through a Global Offering. On
completion of the Offering, its units were to be listed on the Hong Kong Stock
Exchange.
The Global
Offering
21.
On 25 November 2004, Link REIT
published its Global Offering Circular inviting applications for units (“the
Circular”). The Offering was most
successful and was substantially over-subscribed. The Offering was, however, aborted after the
Appeal Committee ruled on 17 December 2004 that there was no jurisdiction
to abridge the statutory period within which the appellant may apply for leave
to appeal to this Court. Lo Siu Lan v
Hong Kong Housing Authority [2005] 2 HKLRD 208. Had the Offering been completed, the
Authority would have received from Link REIT about $30 billion as consideration
for the retail and carpark facilities.
Expenses of over $100 million had been spent on the Global Offering
exercise.
22.
In this exercise, the Authority
was to dispose of 180 properties of which 149 are integrated retail and carpark
facilities, two are stand alone retail facilities and 29 are stand alone
carpark facilities. They consist of a
very substantial portion of the Authority’s total retail and carpark
facilities. The Circular estimated that
this large portfolio accounts for about 9.1% and 13.7% of Hong Kong’s total
retail space and total commercial carpark spaces.
23.
According to the Circular, upon
completion of the Global Offering, the retail and carpark facilities would be
held by Link Properties Limited (“PropCo”) and Link Management Limited
(“the Manager”) would be responsible for managing them. Both PropCo and the Manager would be owned by
Link REIT. It is important to note that,
under various agreements, the properties in question would eventually be held
under Government Leases conferring legal title.
These leases would contain relevant user restrictions in relation to the
retail and carpark facilities. It is
common ground that, under the leases, the lessee, PropCo, would have to obtain
the Government’s agreement to a modification of the particular lease for any
change in user of the facilities.
24.
The Circular stated that,
pursuant to its strategy of investing in sustainable income producing
properties in Hong Kong which are substantially used for retail and carpark
purposes, one of the guidelines the Manager would adhere to would be to
maintain a large and geographically diversified portfolio of:
“ - convenience-based retail properties
primarily serving the basic consumer needs of the residents of the Adjacent
Housing Estates and other visitors; and
- carparks
serving the tenants and customers of the retail properties, the residents of
the surrounding neighbourhoods and other visitors.”
(See p.11 of the
Circular). “Adjacent Housing Estates” in
the Circular refer to all the housing estates which, according to the
information provided by the Authority, are within the geographical areas which
the divested facilities are intended to serve.
Such estates include the public rental estates as well as the HOS and
TPS estates and are estimated to house 40% of the population.
25.
The Circular summarised the
Manager’s discussion and analysis of future operations under Link REIT as
follows:
“… the operation of [the
Authority’s] retail and carpark facilities has been influenced from time to
time by Government and public policies.
In particular, the rental and car park rates, tenant trade mix and the
incurring of certain costs by [the Authority] may not always have been in line
with private sector market practice as a result of being influenced by public
policy and socio-economic considerations.
These policies and considerations will not apply to the operations of
the Properties following the Divestment save for certain limited commitments
that PropCo has agreed with [the Authority] to continue to honour for certain
periods of time, …
Going forward, the Manager intends to adopt a
market-oriented approach with regards to setting rents, based on normal
commercial considerations. In addition,
the Manager intends to implement various initiatives aimed at improving the
overall commercial attractiveness of shopper traffic and tenants’ sales at the
Properties, which will in turn enhance their rental potential.
Following the Divestment, the Manager will consider
adjusting the carpark charges on a more frequent basis in response to dynamic
market conditions. The Manager will also
consider setting carpark charges on an individual carpark basis, rather than
uniformly across and within districts, reflecting area-specific demand and
supply characteristics. …”
(See p.14-15 of
the Circular) The limited commitments to
be honoured for certain periods of time included certain rental concessions and
relief and the fitting of new air-conditioning systems at certain wet markets. Further, by certain covenants, which appear
not to be time limited, PropCo (and its successors and assigns) agreed to
charge concessionary rents for certain welfare facilities provided within 60 of
the 180 properties. (See p. 238 of the Circular).
26.
In the passage quoted above,
the Manager pointed out that under Link REIT, a market-oriented commercial
approach in line with private sector practice would be adopted in operating the
facilities, whereas the Authority’s approach “may not always have been in line
with private sector practice”. So, under
Link REIT, there may be changes in relation to the operation of the facilities,
including for example, the tenant trade mix.
27.
The letter from the Property
Consultant included in the Circular, described the approach of the Authority in
relation to the facilities as that of a “social landlord with a broader range
of responsibilities”. (See Appendix
VIII-2). Mr Dykes SC for the appellant,
whilst accepting that, as a general principle, the Authority has been operating
the facilities on a commercial basis, said that it has done so “with a
conscience”.
The
judicial review challenge
28.
Madam Lo Siu Lan, the
appellant, is a tenant of public rental housing. She is an elderly lady living on
Comprehensive Social Security Assistance.
She uses the retail facilities in a public rental housing estate in
proximity to the one where she lives.
Those retail facilities are part of the facilities to be divested and
she is concerned about changes that may result from such divestment. From a human perspective, her concern is
understandable.
29.
On 8 December 2004, the
day before the deadline for applications for units in Link REIT, the appellant
filed her judicial review application.
She challenged the Authority’s decision to enter into the agreement with
PropCo on or about 19 November 2004 to divest the facilities. PropCo was, at that date, a wholly owned
subsidiary of the Authority but would become a company under Link REIT on
completion of the Offering. Her
challenge was in substance a challenge to the legality of the Authority’s
decision to sell the facilities to Link REIT on the ground that it is not
authorized by the Ordinance.
The courts
below
30.
Having regard to the tight
timetable laid down in the Circular, the proceedings were heard and disposed of
by Hartmann J and by the Court of Appeal within a very short time. (The chronology is summarised in the Appeal
Committee’s decision cited above).
Hartmann J granted leave to apply for judicial review but dismissed
the application. The Court of Appeal
dismissed the appellant’s appeal. In
entertaining the appeal, the Court of Appeal had abridged the appellant’s time
for appealing. It was satisfied that
there were exceptional reasons for abridgment, having regard to the exigencies
of the Offering. As has been noted, the
Appeal Committee held that there was no jurisdiction to abridge the time for
the appellant to apply for leave to appeal to this Court. Shortly after that ruling, the Global
Offering was aborted.
Leave to
appeal
31.
On 18 April 2005, the Court of
Appeal granted the appellant leave to appeal to this Court. Leave was granted in relation to the
following question:
“whether the
[Authority] can, consistent with its overriding duty under section 4(1) of the
[Ordinance], dispose of retail and car parking facilities in one of its estates
without retaining any control over that at a time when they are still being
used by the persons for whom whey were provided”.
Capacity
32.
The capacity of a statutory
corporation must be ascertained from a proper interpretation of the
statute. As was stated by Lord Watson in
Baroness Wenlock v River Dee Company (1885) 10 App. Cas. 354 at 362-3:
“… Whenever a corporation is
created by Act of Parliament, with reference to the purposes of the Act, and
solely with a view to carrying these purposes into execution, I am of opinion
not only that the objects which the corporation may legitimately pursue must be
ascertained from the Act itself, but that the powers which the corporation may
lawfully use in furtherance of these objects must either be expressly conferred
or derived by reasonable implication from its provisions …”
It is a mistake
to start by assuming that the Legislature meant to create a corporation with a
capacity resembling that of a natural person, and then to ask whether there are
words in the statute which cut down such capacity. The question is simply one of the proper
interpretation of the statute creating the corporation with a view to
ascertaining the scope of the legitimate objects of the corporation. Bonanza Creek Gold Mining Co. Ltd v The
King [1916] 1 AC 566 at 577-8.
33.
The phrase “as the Authority
thinks fit” in s. 4(1) relates to the ancillary facilities and not the
housing. This may be derived from the
English version. In any event, as is
accepted by counsel for both parties, this is clear from the Chinese
version. That being so, the statutory
object as laid down in s. 4(1) may be set out thus: to secure the
provision of
(i) housing and
(ii) such amenities ancillary thereto as the
Authority thinks fit
for such kinds
or classes of persons as the Authority may, subject to the approval of the
Chief Executive, determine.
34.
It is common ground that the
carpark facilities are ancillary amenities.
But as regards the retail facilities, Mr Dykes SC for the appellant
submits that they should be regarded as part of the housing, as housing is
defined to include residential and commercial premises. On the other hand, Mr Goudie QC for the
Authority contends that in relation to particular premises, what comprises
housing and what comprises ancillary amenities is a question of fact and
degree. Approached in this way, he
argues that the retail facilities in question are ancillary amenities. It is unnecessary to decide this
question. But the latter approach would
appear to be the correct one. The
question whether certain premises should be regarded as one or the other is not
an abstract question of law but is a question of fact and degree. Approached in this way, the retail facilities
in question would appear to be ancillary amenities.
The
critical question
35.
The Authority plainly has the
power to sell the properties being the retail and carpark facilities in
question to Link REIT. There is an
express power of disposition in s.4(2)(a).
But any exercise of the power of disposition must be consistent with the
Authority’s object as mandated by s.4(1) to secure the provision of housing and
ancillary amenities for such kinds or classes of persons as the Authority may,
subject to the Chief Executive’s approval, determine. The critical question is whether the sale of
the retail and carpark facilities to Link REIT is consistent with the object of
“securing the provision of” the facilities.
If it is inconsistent, then the sale would be beyond the capacity of the
Authority as a statutory corporation, that is, ultra vires the corporation. In relation to this question, it is
immaterial whether the retail facilities are regarded as part of housing or as
part of ancillary amenities since both are governed by the phrase “to secure
the provision of”.
36.
The fundamental argument
advanced by Mr Dykes, whose team has left no stone unturned in advancing the
appellant’s case, is that the sale is contrary to the statutory object. He argues that the phrase “to secure the provision
of” properly interpreted in the context of the Ordinance means that the retail
and carpark facilities must be controlled by the Authority. By selling them to Link REIT, a third party,
the Authority would lose control and could not “secure” their provision. Mr Dykes relies on other provisions in the
Ordinance to support his argument that continuing control by the Authority is
required: s. 4(2)(e) relating to the power to manage; s. 4(2A)
relating to the power to enter into agreements with third parties for the
management of housing and for the provision of ancillary amenities; Part III
relating to the disposal of property; and Part IV relating to the control of
estates.
37.
It is significant that the
statutory object does not use the phrase “to provide”. Had such a phrase been used, there would be a
powerful argument that the Authority must itself make the provision and that
this would necessarily involve the Authority retaining control. The phrase “to provide” is to be contrasted
with the phrase “to secure the provision of” which is used in s. 4(1) in
defining the statutory object. The
Authority has to secure the provision of the facilities but not to
provide the facilities.
38.
To secure the provision
of the facilities does not mean that the Authority must itself be the direct
provider (which would involve control by the Authority) or that, having been
the direct provider for some years, the Authority may not cease to be the
direct provider (and so relinquish control).
There is no basis for suggesting that the statute contains any
provision, either express or implied, that tenants of public rental housing
have any statutory right to the continued retention and control by the
Authority of the retail and carpark facilities, while the tenants are still using
the facilities. The Authority secures
the provision of the facilities so long as the facilities are available, although
they are provided not by the Authority but by Link REIT, a third party over
whom the Authority has no control.
39.
The distinction drawn above
between “to provide” and “to secure the provision of” is consistent with the
decision of the English Court of Appeal in Ebbw Vale Urban District Council
v South Wales Traffic Area Licensing Authority [1951] 2 KB 366. A company, which was a wholly owned
subsidiary of the British Transport Commission, was providing a passenger road
transport service. It applied to the
relevant licensing authority to vary the conditions of its licenses by
increasing the scale of fares. Under the
relevant statute, the authority had no jurisdiction if the service in question
was provided by the commission or its agent.
Agency was not seriously suggested.
The question of jurisdiction turned on whether the service was provided
by the commission.
40.
Under the statute, the commission
was required to exercise its statutory powers “to provide or secure or promote
the provision of” an efficient system of transport. Cohen LJ emphasised the distinction between
“to provide” on the one hand and “to secure or promote the provision of” on the
other. He held that the statute
contemplated that the commission may do either (at 371). It may provide the system itself or
“it can also arrange with independent
concerns to provide a service, in which case it will be performing its function
of securing or promoting the provision of an efficient … system … In the present case, I think, the commission
were securing the provision of an efficient … system … within the meaning of
[the relevant statutory provision] through the omnibus company – not an
independent concern, but a separate legal entity”. (at 373).
41.
It is clear from this passage
that, if the commission had arranged for an independent concern to provide the
service (as opposed to its subsidiary providing the service), the commission would
be securing (or promoting) the provision of the service and not providing
the service. Equally, the commission
would be securing (or promoting) the provision of the service where it was
provided by its wholly owned subsidiary which is a separate legal entity. (See also 373). The distinction drawn in Ebbw Vale Urban
District Council between a body providing something and securing (or
promoting) its provision by others was recognised in Credit Suisse v
Allerdale Borough Council [1997] QB 306 at 328 and 360.
42.
The various provisions in the
Ordinance relied on by Mr Dykes do not support his fundamental argument
that the Authority must retain control, and cannot dispose, of the
properties. The Authority’s power to
manage housing “having regard to the interests, welfare and comfort of tenants,
owners or occupiers” and to charge fees for its management services under
s. 4(2)(e) necessarily relates to housing that is and remains under the
Authority’s management. Similarly, the
Authority’s power to let or sell land in an estate under Part III and its power
to control estates under Part IV relates to estates as statutorily defined,
that is, land vested in the Authority or the control or management of which has
been vested in the Authority. Section
4(2)(e) and the provisions in Part III and IV cannot affect the Authority’s
power of disposition in s. 4(2)(a) or qualify the meaning of “to secure
the provision of” in the statutory object in s. 4(1) as discussed above.
43.
All the provisions mentioned in
the preceding paragraph confer powers on the Authority to enable it to achieve
its statutory object “to secure the provision of housing” and ancillary
amenities. They are merely powers which
the Authority may exercise or not at its discretion, so long as it pursues its
statutory object. As they form no part
of the statutory definition of the Authority’s object and as they are not
expressed to be duties, there is no foundation for any argument that they
restrict or qualify the generality of the statutory object or the power of
disposition in s. 4(2)(a). The
distinction between a statutory corporation’s object and duties on the one
hand, and its powers on the other hand, is fundamental.
44.
Mr Dykes also relies on
s. 4(2A) in support of his central argument. Under this provision, the Authority may enter
into an agreement with a third party for the management by him of any housing
and generally for the provision by him of ancillary amenities. And the Authority may authorize the third
party to do any act, including charging fees for services performed, which the
Authority itself may do in this regard.
It is submitted that if the statutory object “to secure the provision
of” meant that the Authority need not retain control and make the provision
itself, but may arrange for a third party to make the provision, then
s. 4(2A) enabling the conclusion of agreements with third parties would be
unnecessary. This provision does not
support the appellant’s argument. Whilst
the Authority’s power to enter into an agreement with a third party for the
management of housing and for the provision of ancillary amenities may not have
needed clarification, the purpose of s. 4(2A) is simply to provide an
unassailable foundation for the third party under an agreement with the
Authority to do acts and to charge fees in the same way as the Authority may
do.
45.
Accordingly, the sale of the
retail and carpark facilities by the Authority to Link REIT is consistent with
its statutory object of securing the provision of the facilities. The sale is therefore within the capacity of
the Authority. It is intra vires the
Authority as a corporation. The question
in relation to which leave to appeal was granted by the Court of Appeal (see
para. 31) is answered in the affirmative.
The appeal must therefore be dismissed.
The parties should submit written submissions within 21 days as to the
proper costs order of the appeal to this Court and in the courts below.
46.
It is unnecessary to deal with
the question whether, irrespective of the availability of the retail and
carpark facilities, disposition by the Authority of its properties would be
consistent with its statutory object and within its capacity where this would
assist the Authority to discharge its core function as a provider of public
rental housing. This was not raised as
an independent argument by the Authority.
47.
It should be pointed out that
this judgment is only concerned with the divestment of the Authority’s retail
and carpark facilities. It does not
affect the position of residential housing which does not arise in this case.
Mr Justice
Bokhary PJ:
48.
I respect the view of persons
living in the Housing Authority’s estates who may prefer that the Housing
Authority retain rather than sell off the retail and car parking facilities in
those estates. At the same time, it is
only fair to note that the Housing Authority says through its counsel that it needs
money for purposes which include providing for those still in the queue for
public rental housing as well as for those who have already been allocated such
housing. Be all of that as it may, the
question presented to the Court in this appeal is a pure question of legal
capacity to be decided as a matter of statutory interpretation. It is a question worthy of careful
consideration after fully prepared and presented arguments. We have received such arguments, and upon
careful consideration of them, I answer the question as it has been answered by
the Chief Justice with whose judgment I entirely agree.
Mr Justice Chan
PJ:
49.
I agree with the judgment of
the Chief Justice.
Mr Justice
Ribeiro PJ:
50.
I agree with the judgment of
the Chief Justice.
Sir Anthony
Mason NPJ:
51.
I agree with the judgment of
the Chief Justice.
Chief Justice
Li:
52.
The Court unanimously dismisses
the appeal. The parties should submit
written submissions within 21 days as to the proper costs order of the appeal
to this Court and in the courts below.
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(Andrew Li)
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(Kemal Bokhary)
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(Patrick Chan)
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Chief Justice
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Permanent
Judge
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Permanent Judge
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(R.A.V. Ribeiro)
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(Sir Anthony Mason)
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Permanent Judge
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Non-Permanent Judge
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Mr
Philip Dykes SC and Mr Hectar Pun (instructed by Messrs Barnes & Daly and
assigned by the Legal Aid Department) for the appellant
Mr James Goudie QC and Mr
Russell Coleman (instructed by Messrs Clifford Chance) for the respondent
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