What happens when the law collides with traditional rights? This was the matter at issue in the Hong Kong Court of First Instance case, Kwok Cheuk Kin and Anr v Director of Lands and Ors. [2019] HKCFI 867 (“Kwok Cheuk Kin”). Although the judgment (as commented below) seems destined for the Court of Final Appeal, the first instance decision is worth considering as it shows how a court goes about the difficult task of examining the extent to which traditional rights should be enforced in a way that complies with express rights stated in the Basic Law (Hong Kong’s mini-constitution) and the common law imperatives embedded in the rule of law.
Factual Background
In Kwok Cheuk Kin, the applicant challenged the Government’s Small House Policy which protects the Ding rights of indigenous male villagers in the New Territories descended through the male line from village residents in 1898 (the date on which the New Territories were leased to Great Britain for 99 years). The Ding Rights give each male villager the right to:
- a Free Building License, being a license granted at no cost by the Government permitting the villager to build a village house on his own private land;
- a Private Treaty Grant, being a grant of land from the Government at a concessionary rate, for the purpose of building a village house; and
- a Right to an Exchange, being a right to exchange private land for Government land for the purpose of building a village house.
The question was whether the Small House Policy, in preserving the Ding Rights, was unconstitutional in discriminating against non-indigenous persons based on birth or social origin in contravention, inter alia, of Article 25 of the Basic Law (“all Hong Kong residents shall be equal before the law”) and whether the exemption given to the Small House Policy under the Sex Discrimination Ordinance (Cap 480) was illegal.
Against this proposition, Article 40 of the Basic Law provides that: “The lawful traditional rights and interests of the indigenous inhabitants of the New Territories shall be protected by the Hong Kong Special Administrative Region”. The Ding rights, it was asserted, were protected by Article 40.
The court examined the provenance of Article 40 and considered that it protected the lawful traditional rights of indigenous inhabitants of the New Territories which the British had committed to protect when the New Territories lease was first granted in 1898. Per Article 40, this protection would continue post-1997 on the resumption of sovereignty by China. The issue, therefore, was whether the Ding Rights were part of these traditional rights. This depended on whether their origin could be traced back to 1898, which meant the court had to examine the legal history of landholding in the New Territories during the Qing dynasty pre-1898 and how it had evolved under British rule.
The court found that, according to the expert evidence, an entirely different landholding system had emerged in the New Territories by the 19th century, to that promulgated under Imperial Chinese Law. This involved a dual ownership system, whereby a sub-soil owner would perpetually lease the right to use the land to top-soil owners in return for rent, who in turn might sub-lease parts of the land to others. New Territories villagers, therefore, held their land either as top-soil lessees or sub-lessees. Further, instead of the Imperial authorities, they would defer to the village elders on decisions regarding how they could use their lands. If a villager wished to build a house for himself or his son on his land, he would apply for permission from the village elders and would act in accordance with their rules.
On 1 July 1898, the New Territories was leased to the British for 99 years. The British government declared that the existing land interests of their new subjects would be safeguarded “and that your usages and good customs will not be interfered with” (para 70 of Kwok Cheuk Kin). The new government also embarked on a comprehensive landownership program, which resulted in the establishment of a fundamentally different landownership system. The New Territories were divided into Blocks of land, with each Block being allocated a government lease for 99 years. Each Block lease listed out in its Schedule the separate lots of land in the Block, expressly referencing the villagers who were able to prove they were the current owners of a lot (these became known as an “Old Schedule” lots). Unclaimed lots were held by the government and were available for new grants (known as “New Schedule” lots).
Each Block lease contained a covenant requiring a lessee to obtain a license from the government if they wished build on their land. In recognition of the custom existing prior to the New Territories lease, when a villager who owned an Old Schedule lot applied to build a house on his land, the District Officer would discuss the matter with the village elders to ascertain any objections. If there were no such objections the building license would be granted at nil premium (i.e. a Free Building Licence). This practice was formalised in 1957, when the Governor in Council recorded the policy. In the case of New Schedule lots, specific criteria had to be satisfied for a license to convert the land for building use (including payment i.e. they were not free). For Old Schedule lots, however, it was specifically recorded that “a bona fide villager will in general be permitted, subject to planning and feng shui considerations to build a village type house for his own occupation and such permissions (by building licence) will be free of premium”. This was on the basis of a need to “honour…undertakings towards the country people.” This Free Building Licence policy was adopted as part of the Small House Policy promulgated in 1972.
The court, therefore, considered that the Ding Right in the form of the Free Building Licence was a right traceable back to 1898, in that the licences were granted to preserve the custom which had emerged pre-1898 of villagers in the New Territories being able to build houses on their land without having to seek approval or make payment to the Chinese Imperial authorities, albeit they would seek consent of the village elders. It was therefore a traditional right protected by Article 40 of the Basic Law.
The court concluded differently for the Ding rights of Private Treaty Grant and the Right to an Exchange. According to the expert evidence, after the new system of landholding had been established under the British, the government put New Schedule lots up for sale to encourage development. This was done by auction initially in the case of land in villages, but the lack of competition made it more cost effective to sell this land by way of Private Treaty Grants. The lack of competition also meant that Private Treaty Grants were made at concessionary rates.
The court therefore considered that the Ding right of Private Treaty Grant in the Small House Policy, was not a traditional right traceable back to 1898. Prior to the New Territories Lease, villagers in the New Territories did not have any custom or automatic right to acquire land for the purpose of building houses, whether at a concessionary rent or otherwise. Grants of New Schedule lots to villagers since 1898, had been made at concessionary rates not in recognition of any existing traditional right, but due to lack of competition for the lots. The purpose of selling the lots was to address housing needs, but this was nothing more than ordinary government land administration. Private Treaty Grant was not therefore a traditional right protected by Article 40 of the Basic Law. Further there was no evidence to suggest that the Right to an Exchange was a traditional right traceable back to 1898.
The court concluded by allowing the application for judicial review as regards the Ding Rights of Private Treaty Grants and Right to an Exchange in the Small House Policy, but not the Free Building License. In view of the likelihood of the judgment being appealed to the Court of Final Appeal, it was directed that the judgment not take effect for 6 months.
Commentary
The Small House Policy in Hong Kong has long been fraught with political controversy. In a place where housing shortage is rife and the cost of housing beyond the reach of a large number of people, these male villager rights appear to many an unjustified anachronism. Further, the rights have been open to abuse, with a developer and 11 villagers being jailed in 2015 for selling properties built using their rights for profit. Heung Yee Kuk (the “kuk”), the statutory body comprising the heads of rural committees representing the villages and new towns in the New Territories, plans to fight the judgment on the villagers’ behalf. Successive Hong Kong governments have relied on the influential “kuk” for many of its New Territories projects over the decades and this political reality may explain why the Small House Policy has hitherto been left untouched. Political reality, however, also demonstrates the importance of judicial review in Hong Kong. Because of Hong Kong’s complex political system, often the politics renders the government constrained to act. In these situations, judicial review sometimes becomes a last resort to effect change.
None of this political controversy would be evident to anyone reading the judgment, however, which at 96 pages shows a court going about its business in a methodical, impartial and historiographic manner and is a fine example of the common law, rule of law and an independent judiciary in action.
Although the Basic Law offers some textual backing for judicial review (in its Articles 8 and 35), the main foundation for judicial review in Hong Kong lies in the common law and principle of rule of law. This is no bad thing. Textual protection alone (in the same way with any legislation) is technically capable of amendment (and hence eradication). Principles which have emerged over centuries and are an embedded part of societal norms, are less easily set aside.
In Hong Kong, where judicial review serves not only to hold the executive to account but also as a means to effect change when political reality prevents evolution to meet changing societal norms, the continuing durability of judicial review is of fundamental importance. Yet, placing such significant reliance on judicial review, also places great pressure on the courts to maintain their independence. For the sake of the common law, the rule of law and Hong Kong, it is vital that they do.
Peter Gregoire is General Counsel at the Hong Kong Insurance Authority
Administrative Law in the Common Law World 