Case Detail

CACV000008A/1977

IN THE COURT OF APPEAL	1977 No. 8
	(Civil)

BETWEEN:
	ATTORNEY GENERAL	Appellant
	and
	NG KEE	Respondent

Coram: Briggs, C.J., Pickering, J.A. and Leonard, J.

Date of Judgment: 16th January, 1978.

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JUDGMENT

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1. In 1962 the respondent was authorized by the Commissioner of Transport to register and license six vehicles as New Territories taxis. New Territories taxis were taxis but they were only allowed to ply for hire in the New Territories. The respondent renewed the licence of one of his taxis, No. AB 4936 annually until 1967 when the Commissioner of Transport refused to renew its licence.

2. It is not in dispute that that refusal was wrongful and that the act of the Commissioner in refusing to re-register the taxi was ultra vires. The Commissioner purported to act under regulation 6(c) of the Road Traffic (Taxis, Public Omnibuses and Public Cars) Regulations 1964. This reads as follows:-

"	6. The Authority may refuse to issue a vehicle licence in respect of a motor vehicle as a taxi, as a public omnibus or as a public car if -
	.......................................

(c)

the Authority is satisfied that by reason of the number of motor vehicles in respect of which vehicle licences as taxis, as public omnibuses or as public cars generally or as taxis, as public omnibuses or as public cars of the carrying capacity of the motor vehicle for which a licence is sought had been issued or for any other reason it would not be in the public interest that the motor vehicle should be so licensed."

3. The Commissioner had evidence that the driver of the taxi in question had plied for hire outside the area of the New Territories on two occasions. He could therefore have exercised his powers under regulation 6(b) of the Regulations which provided that the Commissioner could refuse to register a taxi where there had been a breach of the conditions contained in the licence. However, he did not invoke this paragraph of the regulation, he made use of paragraph (c) wrongfully as I have said above.

4. The respondent brought an action for a declaration that he be entitled to re-register and re-license the taxi in question and for damages. In other proceedings the Court of Appeal has held that the respondent was entitled to the declaration he sought. And we understand that the respondent has re-licensed a vehicle in the appropriate manner.

5. In his Statement of Claim the respondent claimed the sum of $120,035.20 as loss of profits. The judge in the court below awarded him $9,000 damages stating that the basis of the award was the loss of profits to the respondent for being without one of his taxis. This appeal is only concerned with the question of damages. Though the award involved is relatively small an important principle is involved.

6. It is the contention of the Crown that though the act of the Commissioner was ultra vires, and though that act caused loss to the respondent, the respondent has no right to recover damages, his only remedy being to obtain a declaration that the act was wrongful. And this, of course, the respondent has done.

7. Basically, the argument is this: In English law there is not a law of tort, there is a law of torts. It is not enough for a plaintiff to prove that the conduct of the defendant has caused him loss. He must prove that the conduct of the defendant complained of constitutes a tort recognized by the law. And the conduct of the Commissioner of Transport does not constitute any tort known to English law. We are not concerned in this case with breaches or possible breaches of contract. There was no contractual relationship between the parties.

8. The judge in the court below held that damages were recoverable because the act of the Commissioner was not "a mere failure to comply with a statutory duty binding only upon the Crown or its officers". The judge said: "It was not a mere failure on the part of the Commissioner. It was an active and independent misuse of power". And he held that in such a case there was a right of action.

9. It was conceded on the part of the Crown that a person who suffers loss from the unlawful act of a public authority where malice or bad faith is proved can recover damages. However, the matter is not absolutely free from doubt. In S.A. de Smith's Judicial Review of Administrative Action, the learned editor has this to say (at p.296):-

It would seem, however, that there is a tort, as yet imperfectly defined, consisting in the infliction of damage by the deliberate abuse of public office or authority - e.g. by refusing, cancelling or procuring the cancellation of a licence, or procuring the making of a compulsory purchase order, for improper motives. This tort is not firmly anchored in the English case-law; in particular it is not certain what kind of damage has to be sustained and by whom before civil liability can arise. Difficulties in establishing special damage attributable to an unbroken chain of causation may also impede the development of the tort."

10. In his judgment, the judge stated that it was settled law that a refusal to grant a licence coupled with malice on the part of the public official will found an action in damages. He quoted two authorities for that proposition: David v. Cader⁽¹⁾ and Central Canada Potash Co. Ltd. and Another v. The A.G. for Saskatchewan and Others⁽²⁾.

11. With respect to the learned judge, David v. Cader⁽¹⁾ does not go as far as that. All that the court held in that case was that there may be a right of action in such circumstances. It is a decision of the Privy Council and concerns Roman Dutch law. Nor was the Crown a party to the action. The Saskatchewan Case⁽²⁾ again is not in itself authority for that proposition because the true cause of action in that case was the tort of intimidation.

12. However, we need not consider this line of cases. No malice or bad faith was pleaded in the present case. It was not referred to at the trial and the trial judge made no finding of malice or of bad faith. Indeed, it is clear from the judgment that he thought that the act of the Commissioner complained of was "an honest mistake".

13. There is authority for the proposition that if a public officer acts ultra vires with the knowledge that he is so acting any resulting damage may be recovered. The headnote of the case of Farrington v. Thomson & Bridgland⁽³⁾ reads in part as follows:-

"(2) If a public officer does an act which, to his knowledge, amounts to an abuse of his office, and he thereby causes damage to another person, an action in tort for misfeasance in a public office will lie against him at the suit of that person."

14. In that case the court found as a fact that two police officers who ordered the closure of an hotel, intentionally purported to be exercising a power which they knew they did not possess. In such a case, damages are recoverable for the tort of misfeasance in a public office. It was not pleaded in the present case that the Commissioner knew he was acting wrongfully.

15. There was no finding of fact that the Commissioner knew that he had no power to refuse the registration of the licence when he made that decision. Indeed, it is quite obvious from the facts that this is not so.

16. The question for decision in the present case is: Has a person a cause of action where he has suffered loss by reason of the act of a public officer who has acted ultra vires without malice or knowledge that he was so acting?

17. The following passage occurs in the judgment of Lord Moulton in Everett v. Griffiths⁽⁴⁾

"If a man is required in the discharge of a public duty to make a decision which affects, by its legal consequences, the liberty or property of others, and he performs that duty and makes that decision honestly and in good faith, it is, in my opinion, a fundamental principle of our law that he is protected. It is not consonant with the principles of our law to require a man to make such a decision in the discharge of his duty to the public and then to leave him in peril by reason of the consequences to others of that decision, provided that he has acted honestly in making that decision."

This passage was quoted by the learned trial judge in his judgment. And it undoubtedly states the true position.

18. Another case is O'Connor v. Isaacs⁽⁵⁾. That case is clear authority for the proposition of law that no action for damages will lie at the suit of a person who is the victim of an order made by a public officer ultra vires in the absence of malice.

19. A Magistrates Court made an order that a husband must pay maintenance to his wife. The husband obeyed the order in part but fell into arrears and was on more than one occasion sent to prison for failing to pay. A long time after the order was first made, the husband discovered that the magistrates had acted without jurisdiction. He brought an action against the magistrates for false imprisonment. This was found to be statute barred. He then sought to recover the moneys he had paid to his wife under the order. He sought to rely on a proposition to the effect that as the magistrates had acted ultra vires he, the husband, was entitled to recover the moneys he had spent as a result of obedience to the order which was ultra vires. This did not find favour with the court.

20. Singleton, L.J., in the Court of Appeal, quoted with approval the following passage from the judgment of Diplock, J., the judge of first instance (at p.351):-

"I hold, therefore, that at common law an action would lie against magistrates acting without jurisdiction for trespass. Therefore, it would lie in respect of false imprisonment and it would lie in respect of distress for goods. Mr. Fox-Andrews asks me to hold that it would also lie for money paid by the plaintiff pursuant to an order of the court, although no steps had been taken to enforce that order by distress or by commitment. That is to say, he says that a cause of action lies in respect of moneys which the plaintiff paid to his wife under the order of August 18, 1941, and the subsequent variations. At common law one cannot find in the reported cases any trace of an action of this kind lying in the absence of malice. I think one must ask oneself: what is the nature of the cause of action? Plainly, it cannot be indebitatus assumpsit as money had and received, because the money was not received by the magistrates, it was paid to their collecting officer for the use of the wife, and it was money which was paid under a pure mistake of law, namely, that the order was a valid order, a mistake of law which was shared by the magistrates and by the plaintiff. The action, therefore, must be (to use the old phraseology, and I am looking at the old common law position) an action on the case in tort." 'The judge, having cited the authorities, added:' "I therefore take the view that at common law the right of action in trespass for false imprisonment existed, but in the absence of malice no right of action existed for the money paid."

21. In the Court of Appeal, Lord Justice Morris had this to say (at p. 363):-

"There are many cases in the books where actions have been brought against justices, but they have been brought because a plaintiff has been detained or because his goods have been seized or in similar circumstances. If a man is imprisoned, then lawful authority for his detention must be forthcoming; if it is not, then justices who have wrongly ordered his detention may be liable. Where a man is wrongly imprisoned and has to make payments before he can be released, then the amount of such payments may be recovered as part of his damages (see Clark v. Woods, Smith and Cooper (17 L.J.M.C. 189) Norton v. Monckton (43 W.R. 350) and see section 13 of the Act of 1848.) But the right of action comes about by reason of the trespass to the person: the wrongful or abortive order is of no avail to justify what has been done. It is not the mere making of the order that constitutes the cause of action. If the order is one for the payment of money and if it is made without jurisdiction, then it need not be obeyed. Appropriate steps can be taken to quash it or to reverse it on appeal. But it does not seem to me that if these steps are omitted a claim for damages can later be presented against justices based merely on the fact that they made an order requiring payments to be effected. I would dismiss the appeal."

22. The respondent in the present case was unrepresented at the hearing of the appeal. Mr. Edmonds, who appeared for the Crown, drew our attention to the case of Brasyer v. Maclean⁽⁶⁾ a decision of the Privy Council on appeal from the Supreme Court of New South Wales.

23. The defendant was the Sheriff of New South Wales. A writ was issued against one Wylie at the suit of one Face and it was delivered to the Sheriff to be executed. The Sheriff made a return which was false in that it referred to the fact that Wylie had been rescued from his custody by the plaintiff but re-taken. An attachment for contempt was issued by the court against the plaintiff and he was imprisoned for one day. The court held that though the Sheriff had acted without malice he was liable in damages to the plaintiff.

24. Sir Barnes Peacock had this to say (at pp.405 and 406):-

"	This is not a case which falls within the general rule which has been laid down, that no action lies for damages or inconvenience sustained in consequence of process of law, unless it be alleged and proved that the party who occasioned it was actuated by malice. This is a case of a misfeasance by a public ministerial officer in the discharge of his duties."
"	It appears, therefore, to their Lordships that the sheriff in this case was guilty of a misfeasance in the exercise of the powers which were intrusted to him by law and in the discharge of his duty as a public ministerial officer, and that in respect of that misfeasance he is liable to an action for the damage which resulted from that act, notwithstanding it was not proved against him that he was actuated by malicious motives. The mere fact of the misfeasance and the damage resulting from it by reason of the attachment issuing upon the return as conclusive evidence against the plaintiff was sufficient damage to enable the plaintiff to maintain an action against the sheriff for that misfeasance, and to recover the damage which he has sustained in consequence of it."

25. The facts of that case are very different from the facts of the present case and are very unusual. It was a case in effect of a public officer causing a person to be falsely imprisoned. The plaintiff was ordered by the court to be imprisoned for a contempt of court of which he was not guilty.

26. It should be pointed out that this case, which was decided in 1875, is only referred to in one other case of all the cases which have been brought to our attention, namely, in Farrington v. Thomson⁽³⁾. Nor was it brought to the attention of the trial judge. We do not think that it is of such authority that it must be followed blindly. Indeed, it concerns a ministerial act of a judicial officer and we think is easily distinguishable on the facts from the present case.

27. It follows from the above that the respondent's claim for damages must fail. In the absence of malice on the part of the Commissioner and knowledge that he was acting ultra vires there is no cause of action for damages. Though the respondent has suffered loss by reason of the ultra vires act of the Commissioner he cannot recover that loss from the Commissioner.

28. The respondent filed a Respondent's Notice. At the time of the hearing of the appeal he was unrepresented. He told the court that he did not wish to argue the points referred to in his Notice.

29. The appeal must be allowed and the judgment for $9,000 set aside. The cross-appeal of the respondent is dismissed. There will be no order for costs.

30. This is the judgment of the court.

	(Geoffrey Briggs)
	President.

Representation:

Edmonds for appellant/crown

Respondent in person

(1) (1963) 1 W.L.R. 834.

(2) (1976) 57 D.L.R. (3rd) 7.

(3) (1959) Victorian Reports 286.

(4) (1921) 1 A.C. 631 at p.695.

(5) (1956) 2 Q.B. 288.

(6) (1875) 6 P.C.A. 398.

CACV000008/1977

IN THE COURT OF APPEAL
on appeal from High Court Action No. 1372 of 1974

	1977 No. 8
	(Civil)

-----------------

BETWEEN
	NG KEE	Appellant
	and
	ATTORNEY GENERAL	Respondent

-----------------

Coram: Briggs, C.J., Pickering, J.A. & Leonard, J.

Date of Judgment: 21st November, 1977.

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JUDGMENT

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Pickering, J.A.:

1. Before the creation of the office of Commissioner for Transport the functions now exercised by that Commissioner were the responsibility of the Commissioner of Police. On the 31st March 1962 the Commissioner of Police addressed a letter to the appellant, the first two paragraphs of which ran:

	"I have the honour to refer to your application for permission to register and license taxis to operate in the New Territories.
	In exercise of the power invested in me by Regulation 4 of the Road Traffic (Taxis and Hire Cars) Regulations, 1960, authority is now given to register and license 5 nine-seaters/1 four-seater New Territories Taxis (this is subject to final inspection of the vehicles when they are available for registration and licensing)."

2. Accordingly the appellant registered and licensed six vehicles, the four-seater vehicle being allotted the registration No. AB 4936. Thereafter, annually, upon the expiration of that licence the appellant renewed it until 1967 without difficulty. In the meantime the authorities were encountering problems in regard to New Territories taxis generally and in particular the four-and nine-seater taxis which had failed to confine themselves to the New Territories in accordance with the conditions of their licences but plied also in the urban areas of Kowloon. There followed various warnings to all registered owners of New Territories taxis culminating with the intimation that if the owners failed to exercise adequate control of their drivers the Commissioner would have no alternative but to refuse the renewal of licences as they expired or alternatively to revoke completely the registration of the offending vehicles. When the then current licence of the vehicle AB 4936 expired on the 31st August 1967 renewal was refused without reason. Following various representations by the appellant he received a letter dated the 6th December 1967, the first two paragraphs of which ran:

"Your letter of authority dated 31st March, 1962 refers. Your attention is drawn to the misuse of an N.T. taxi under your control, details of which follow:-

Vehicle No.	Offence	Case No. & Date
AB 4936	Plying for hire	(i) NKS 36681 11.9.67
		(ii) TST 25879 4.7.67

In view of this record you are hereby notified that by virtue of the powers vested in me under Regulations 6(c) of the Road Traffic (Taxis, Public Omnibuses & Public Cars) Regulations Cap. 220, the licence in respect of N.T. taxi No. AB 4936 will not be renewed. Consequently, you are required to return the registration book for cancellation immediately."

3. Following further unsuccessful representations the appellant applied in May 1968 to register the vehicle as a private car and that form of registration was effected in September of that year.

4. In June 1974 the appellant took action against the Attorney General seeking (inter alia) a declaration that he was entitled to register and license one public light bus in place and stead of the New Territories taxi. That the declaration sought was in respect of a bus instead of a taxi was due to the fact that in 1969 there had intervened a complete change of policy in regard to New Territories taxis which had ceased to exist as such, owners of nine-seater or minibus type taxis being thereafter allowed to register and license them as public light buses. No provision was made officially for the owners of the smaller four-or five-seater taxis but in practice they were treated in the same manner and were allowed to register and license public light buses provided that the smaller vehicles were either taken off the road or registered as private cars. The learned judge in the court below found that the action of the Commissioner in refusing to renew the licence in September 1967 was ultra vires and wrongful and that but for such refusal the appellant would have had "authority" to register and license a public light bus in place of the taxi AB 4936. Nonetheless the learned judge declined to grant the declaration sought on the ground of the delay which had taken place between the conclusion of the Commissioner's wrongful conduct in December 1967 and the initial action taken by the appellant in October 1973 and followed by the issue of the writ in June 1974. It is against that refusal that this appeal lies.

5. We have not found of particular assistance the discussion before us as to whether the remedy of Declaration was founded in Equity, Statute or is sui generis for, irrespective of the origins of this type of relief, the real question for us is whether the learned judge was justified in exercising his discretion to refuse relief upon the ground of delay. Delay was not pleaded by the respondent nor explored in the Court below and the appellant had no opportunity of calling any evidence to explain any alleged tardiness upon his part. Mr. Chan, for the appellant, argues that under 0.18 r.8 of the Rules of the Supreme Court delay should have been specifically pleaded being a matter which otherwise would take the appellant by surprise and in this connection quotes the case of Blay v. Pollardand Morris⁽¹⁾ where Scrutton, L.J., dealing with the allegation of fraud, said:-

"But no fraud is alleged in the pleadings; no application to amend has been made; and I cannot think a judge should find fraud or conduct amounting to fraud when it has never been pleaded."

6. Mr. Edmunds, for the Crown, submits that the fact that delay has not been pleaded is no bar to the Court taking delay into consideration is considering the exercise of the discretion as to whether to grant a Declaration, and relies on the case of Markwald v. Attorney General⁽²⁾ where Lord Sterndale M.R. said:-

"I have considerable doubts whether this was a case in which a declaration ought to have been made as a matter of discretion, even assuming the appellant to be correct in his contention. As I say, the point was not taken, and therefore I only wish to say that I must not be taken as giving an opinion that this was a proper case in which to make such a declaration. As I think, however, on other grounds, that a declaration ought not to be made it is not necessary for me to consider that point, but I wish to guard myself by saying this, that I am not at all sure that a Court is bound to make a declaration in what it does not think a proper case merely because the point is not taken by the defendant to the action."

7. It is to be observed however of this extract that it was the obiter dictum of a single judge and that the words "I am not at all sure" amounted to no more than an expression of doubt. We are informed that when at the end of the respondent's case in the Court below the judge referred to the question of delay, counsel then appearing for the Crown indicated that as delay had not been pleaded he did not propose to argue upon that ground. Upon the basis of 0.18 r.8 and that of the case of Blay v. Pollard and Morris⁽¹⁾ we incline to the view, without purporting to decide the point, that if delay was to be relied upon either by the respondent or by the learned judge it should have been pleaded.

8. If that view be wrong, however, it remains to consider whether it was right for the learned judge to exercise his discretion to refuse the Declaration on the ground of delay and, as the appellant argues, of delay simpliciter, that is, without it being shown that the respondent, as the result of delay, was placed in any worse position than that he would otherwise have found himself. No case exists in which refusal has been based upon this ground whereas in Hogg v. Scott⁽³⁾ a declaration having been refused upon other grounds including section 21 of the Limitation Act of 1938 - a section which has no counterpart in Hong Kong - Cassels, J., after referring to the "considerable delay" of nearly three years upon the part of the plaintiff, went on to say that on that ground alone he would not have been prepared to give a decision adverse to the plaintiff.

9. Counsel for the Crown contends that even if it be open to debate whether the remedy of Declaration is properly regarded today as an equitable remedy, it had its origin in equity which system of law has left its mark upon the manner of the exercise of the judge's discretion. Even if that be so it must be recognised that delay simpliciter has always been held to be immaterial in the case of equitable remedies (see Rochefoucauld v. Boustead⁽⁴⁾, In re Eustace⁽⁵⁾, Weld v. Petre⁽⁶⁾.) On the other hand in the words of Lindley, L.J. in the case of Rochefoucauld v. Boustead:

"Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of the claim, or where, by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases lapse of time and delay are most material."

10. Laches is thus seen to be a more serious matter and consists of a substantial lapse of time coupled with circumstances which make it inequitable to enforce the claim. Delay will accordingly be fatal to a claim if it is evidence of an agreement by the plaintiff to abandon or release his right (see Blake v. Gale⁽⁷⁾ or if it has resulted in the destruction or loss of evidence by which a claim might have been rebutted (see Bourne v. Swan and Edgar, Limited⁽⁸⁾) or if the plaintiff has so acted as to induce the defendant to alter his position in the reasonable belief that the claim has been released or abandoned (see Allcard v. Skinner⁽⁹⁾.) But in other cases it has consistently been held that delay is immaterial and a recent example of that view arose less than one week before the hearing of this appeal in the case of Lazard Brothers & Co. Ltd. v. Fairfield Properties Co. (Mayfair) Ltd.⁽¹⁰⁾ where Vice-Chancellor Sir Robert Megarry, the learned joint editor of the Snell's Principles of Equity and numerous other works, declined to withhold specific performance merely upon the ground of a delay which had not resulted in the position of the defendant having been changed to his disadvantage.

11. It follows that delay simpliciter should not have led the learned judge in the Court below to withhold the Declaration sought for. It is therefore unnecessary to explore the argument raised on behalf of the Crown based upon the case of Donald Campbell and Company, Limited v. Pollak⁽¹¹⁾ to the effect that the learned judge was entitled to take delay into consideration because it was something which he had himself observed during the progress of the case. Whether that view be right or wrong we have seen that the refusal to grant the Declaration upon the grounds of delay simpliciter was an error. It may however be doubted whether the case of Donald Campbell and Company, Limited v. Pollak⁽¹¹⁾ can be relied upon for the proposition striven for by the Crown for not only was that case confined to the issue of costs but in it the House of Lords found that the Court of Appeal was prohibited by statute in the form of the Judicature Acts of 1873 and 1890 as well as by the Rules of the Supreme Court Order LXV r.1 from interfering with the judge's discretion. No such statutory prohibition obtains in the present case.

12. It remains to consider whether the delay has placed the respondent in any worse position than that in which he would have been had this action been commenced shortly after the refusal of the renewal of the licence at the end of 1967. The learned judge made no finding that there was any such effect upon the respondent's position. Mr. Edmunds, for the Crown argues, that that position has deteriorated in that in the meantime there has been a change in the law whereby there is now a limit to the number of licences issued for public light buses. It is to be noted however that the power to limit the number of licences in issue was granted to the Commissioner in 1969 and he took no action in that respect until 1975 which was after the date of the issue of the writ in this case. It may be doubted whether the mere fact that the number of licences in issue is now restricted has placed the Commissioner in any worse position than previously for the ceiling to the number of licences which may be issued is under his own control. Accepting, however, that the Commissioner may be under some disadvantage as a result of the imposition of a restriction upon the number of licences which can be issued, the Declaration which we are asked to say should have been granted by the learned judge was a declaration that the plaintiff be entitled to register and license one public light bus in place and stead of the former New Territories taxi. At the date of the issue of the writ that was precisely the appellant's position and we are unable to accept that the date to which we should have reference is today's date for acceptance of that proposition would result in a situation in which a defendant in the position of the Commissioner could, after the date of the issue of a writ seeking a Declaration, stultify his plaintiff's legitimate remedy and the process of the Court by the issue of new regulations.

13. We allow the appeal and grant the declaration sought in paragraph 10(g) of the appellant's re-re-amended Statement of Claim with costs to the appellant here and in the Court below.

Representation:

E. Chan (W.I. Cheung & Co.) for appellant.

C.B. Edmonds, C.C. for respondent.

(1) 1930 1 K.B. 628.

(2) 1920 1 Ch. 348.

(3) 1947 1 K.B. 759.

(4) 1897 1 Ch. 196.

(5) 1912 1 Ch. 561.

(6) 1929 1 Ch. 33.

(7) 1886 32 Ch. 571.

(8) 1903 1 Ch. 211 at 219, 220.

(9) 1887 36 Ch. D. 145.

(10) The Times, 13th October, 1977.

(11) 1927 A.C. 732 at 811, 812.

ATTORNEY GENERAL v. NG KEE

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