IpsofactoJ.com: International Cases [2005A] Part 5 Case 10 [CFA]


COURT OF FINAL APPEAL, HKSAR

Coram

River Trade Terminal Co Ltd

- vs -

Secretary of Justice

CHIEF JUSTICE LI

MR. JUSTICE BOKHARY PJ

MR. JUSTICE CHAN PJ

MR. JUSTICE RIBEIRO PJ

SIR GERARD BRENNAN NPJ

18 MARCH 2005


Judgment

Chief Justice Li

  1. I agree with the judgment of Mr. Justice Ribeiro PJ.

    The Court unanimously dismisses the appeal and makes the declaration and the orders set out in the concluding paragraph of Mr. Justice Ribeiro’s judgment.

    Justice Bokhary PJ

  2. I agree with the judgment of Mr. Justice Ribeiro PJ.

    Justice Chan PJ

  3. I agree with the judgment of Mr. Justice Ribeiro PJ.

    Justice Ribeiro PJ

  4. In 1996, the Hong Kong government accepted the appellant’s tender for the grant of a 65 hectare lot in Tuen Mun at a premium of HK$1,141,110,000.00. The grant was for the purpose of establishing and operating a river trade terminal (“RTT”) and user of the lot is subject to restrictions contained in special conditions 16 (“SC 16”) and 47(c) (“SC 47(c)”) of the Conditions of Grant, set out below. This appeal concerns the scope of those restrictions. In particular, the parties are in dispute as to the classes of vessel permitted by SC 16 to berth at the RTT.

  5. Towards the end of 1999, the appellant began to allow vessels referred to by the parties as “intra-Asia vessels”, meaning vessels which have a pattern of trading between Hong Kong and various Asian ports, to berth and to discharge and load their cargoes at the RTT. This, the government contends, is a breach of SC 16. In November 2002, it issued an originating summons seeking two declarations and injunctive relief as well as damages. The two declarations sought are in the following terms:

    A declaration that upon the true and proper construction of the Conditions of Sale attached to the Memorandum of Agreement dated 11th April 1996 (‘the said Agreement’) and made between the Hong Kong Government and the Defendant, the berthing of those vessels, listed in paragraph 6 of the Affirmation of Mr. Liu Hon Por, Francis, at the River Trade Terminal constituted breaches of Special Condition 16 of the Conditions of Sale of the said Agreement.

    [“the first Declaration”]

    A declaration that upon the true and proper construction of the said Agreement, the Defendant is not permitted to use the terminal for the berthing of any vessel other than one which is [regularly] employed in trading or going within, that is to say between ports within, the Pearl River region, or one which trades solely within Hong Kong waters.

    ["the second Declaration"]

  6. Yam J (HCMP 4974/2002, 29 May 2003) dismissed the government’s claim. The Court of Appeal (CACV 187/2003, Ma CJHC, Rogers VP and Cheung JA, 9 June 2004) unanimously allowed the government’s appeal, holding that SC 16 did not permit the appellant to allow the berthing of such vessels at the RTT. All questions relating to relief were held over for separate consideration, with the Court of Appeal ordering that “the hearing in respect of consequential matters be adjourned to a date to be fixed” and giving directions as to the filing of affidavits in relation thereto.

  7. The present dispute concerns use by the appellant of the RTT as exemplified by 23 vessels whose trading patterns were described in the affirmation referred to in the first Declaration. These were vessels which called at Hong Kong, berthed at the RTT, and then left our waters, continuing their voyages to other Asian ports without calling at any other port within the Pearl River region.

  8. Mr. Denis Chang SC, appearing with Mr. Anderson Chow SC and Ms Esther S Y Lin on behalf of appellant, invited the Court to rule on whether any breach of SC 16 would occur in respect of vessels adopting a different pattern of trading. He cited the possibility of vessels coming to Hong Kong from an outside Asian port and then calling at some other port or ports within the Pearl River region before continuing on their voyage outside the region, asking the court to decide whether SC 16 permitted such vessels to use the RTT. As the berthing of vessels with such a trading pattern was not the subject of complaint, not covered in the evidence and not subject to argument in the courts below, Mr. Chang’s invitation must be declined. This judgment is concerned solely with the allegations of breach made in respect of permitting vessels like the 23 vessels in question to berth.

    THE PURPOSE OF THE RTT

  9. There is no difference between the parties as to the genesis and purpose of the RTT. In 1991, stemming from a major study into Hong Kong’s port and airport development strategy, the government announced its intention to establish a river trade terminal to cope with increasing marine traffic to and from the Pearl River Delta.

  10. Hong Kong was then and continues to be the busiest or among the busiest ports in the world, handling a very large volume of containerised and other cargoes carried on a variety of ocean-going vessels. With the rapid expansion of the economy of Southern China, the late 1980’s and the 1990’s saw a marked increase in the number of river craft carrying cargo between Hong Kong and ports in the Pearl River region. Such vessels mainly comprise self-propelled coasters and towed lighters 40 to 50 metres in length, carrying a mixture of break-bulk and containerised cargo.

  11. Hong Kong is of course situated at the eastern extremity of the mouth of the Pearl River Delta. Prior to the RTT coming into existence, river vessels had to load and unload their cargoes at public cargo working areas (“PCWAs”) or mid-stream at buoys and anchorages at various locations in Hong Kong. This often meant that such craft, originating from or bound for the Delta, would have to enter and traverse the Hong Kong port in order to use cargo handling facilities located in central and eastern parts of Hong Kong. The proliferation of such river craft in traffic lanes used by large container vessels posed an increasing problem of port congestion and marine safety. There was particular concern that such congestion should be avoided in the busy and constrained Ma Wan Channel which is adjacent to major container terminal facilities.

  12. These concerns and the objectives of the RTT were set out in a prospectus issued by the government in April 1992 and, as indicated below, adopted as the basis for the appellant’s tender submitted in February 1996.

    THE GRANT

  13. The grant (pursuant to the Agreement referred to in the first Declaration) is for a term commencing on 11 April 1996 and expiring on 30 June 2047. The user clause in SC 16 relevantly states as follows:

    (a)

    Subject to these Conditions and in particular sub-clause (b) of this Special Condition, the lot or any part thereof or any building or buildings or structure or structures erected or to be erected thereon shall not be used for any purpose other than as a terminal for the berthing of vessels regularly employed in trading or going within the Pearl River region and vessels trading solely within the Hong Kong waters under Part IV of the Shipping and Port Control Ordinance, the loading, unloading and storage of break-bulk or container cargoes and containers carried or intended for carriage by sea in connection with trade and freight industries within the Pearl River region (which terminal shall hereinafter be referred to as ‘the RTT’).

    (b)

    The lot shall also be used for the purpose of a container freight station but only to such extent and in such manner as in the opinion of the Director will not interfere with or inhibit the use of the lot for the purpose specified in sub-clause (a) of this Special Condition and such ancillary facilities as are necessary for the operation of the RTT ....

  14. SC 47(c), which also bears on user, states:

    The Purchaser shall at no time use or suffer or permit the use of the lot or any part thereof or any building or any part of any building erected or to be erected thereon or on any part thereof for the purpose of loading and unloading of containers to or from vessels other than vessels referred to in Special Condition No. (16) hereof.

  15. By SC 17, the grant specifies, among other things, that 51 ha of the land were to be used as a cargo working and marshalling area with 3,000 m of water frontage. A maximum of 2 ha were to be used as a container freight station and the remaining land was to accommodate car and lorry parking and queueing areas, as well as areas for government accommodations.

  16. The central importance of the lot’s specified user is brought out by SC 35(a) which allows the government to re-enter if such user ceases or diminishes.

    THE REQUIREMENTS OF THE TENDER NOTICE

  17. Clause 3(d) of the Tender Notice (“TN 3(d)”), which formed part of the contractual documents, stated that tenders had to be accompanied by a Proposal comprising certain statements, schedules, assessment reports, concept layout plans and a works programme. These were designed to elicit financial, environmental, technical and other information concerning the ability of the tenderer to undertake the project, the nature of the development proposed and the operational methods envisaged.

  18. By clause 4(a) (“TN 4(a)”) the Tender Notice provided that the Proposal had to “take into account” the “development objectives” of the relevant government departments which were materially as follows:

    (i)

    Marine Department

    (1)

    Marine traffic through Ma Wan channel shall be kept to a minimum.

    (ii)

    Transport Department

    The marine mode shall be adopted as the predominant mode of transport for the external link of the lot and land transport shall play a minimal role.

  19. Clause 4(b) (“TN 4(b)”) of the Tender Notice stipulated that the Proposal:

    .... must be satisfactory to the Government.

  20. And clause 10 (“TN 10”) stated that the Proposal:

    .... shall form the basis of the development referred to in the Special Conditions annexed hereto.

    THE APPELLANT'S PROPOSAL

  21. The Proposal submitted by the appellant and accepted by the government closely addresses the specified objectives. It contains a Project Description which notes the increasing importance of “river trade, to and from the Pearl River Delta”, describing such trade as being

    .... spread widely over many small tributaries and channels in the Pearl River Delta with the result that it is carried in a diverse fleet largely made up of small vessels which have both shallow water and air drafts.

  22. One of the maps submitted identifies river ports in the Delta, showing them as Class I and Class II river ports and indicating the cargo tonnage generated by each during 1994.

  23. The need to avoid congestion in the Ma Wan Channel and the rationale of locating the RTT at Tuen Mun is acknowledged in the Project Description:

    The Tuen Mun RTT is strategically located at the mouth of the Pearl River Delta (PRD) and will act as an entrepot for PRD trade. The RTT in Tuen Mun is designated to maximise the capacity of marine transport within the Harbour of Hong Kong and to discourage the utilisation of Ma Wan Channel by large numbers of small river trade vessels, thereby reducing the risk of marine traffic accidents at Ma Wan Channel. The RTT can provide a substantial proportion of the general cargo element of the river trade with a Hong Kong port terminal upstream of the Ma Wan Channel.”

  24. The functions of the terminal are described as follows:

    The Terminal will have the following main functions:

    reception of inward cargo from Pearl River Delta (PRD) ports;

    delivery of outward cargo to PRD ports;

    consolidation of inward containerised transhipment cargoes for overseas shipment;

    containerisation of inward breakbulk transhipment cargoes for overseas shipment; and

    stripping of less than container load (LCL) transhipment containerised cargoes received from overseas for loading as breakbulk cargo to river trade vessels.

  25. These functions would be implemented by means of a “marine shuttle lighter system” which lay at the heart of the appellant’s scheme:

    (a)

    The RTT would be served by a fleet of container-carrying marine lighters each with a capacity of 100 to 150 TEUs (twenty-foot container equivalent units). Since typical river craft carry on average loads of some 500 metric tonnes, such lighters would be able to carry loads as much as five or six times greater.

    (b)

    Shuttle lighters would provide a marine link between the RTT and the various cargo vessels involved. River trade craft from the Delta would berth and discharge at the RTT. Break-bulk cargoes intended for onward ocean carriage would be consolidated into containers at the RTT which, together with containers discharged by the river craft, would be loaded onto the shuttle lighters and carried by them to container terminals or to mid-stream buoys or anchorages for transhipment onto ocean-going vessels. Cargo discharged at the RTT by river trade craft for Hong Kong consignees would, so far as possible, be carried by shuttle lighters to appropriate PCWAs near their destination, reducing use of container lorries on local roads.

    (c)

    Similarly, cargoes from inbound ocean-going vessels destined for Pearl River Delta ports would be discharged into shuttle lighters at container terminals or from vessels moored mid-stream and then carried by the shuttles to the RTT where they would be transhipped onto river trade craft. Some containers might be stripped at the RTT and their contents loaded onto river trade vessels as break-bulk cargo.

    (d)

    Sixty berths were to be provided at the RTT, with 32 to be used for river trade container traffic, 20 for break-bulk traffic and 8 for shuttle lighters.

  26. Through consolidation of cargoes onto the larger shuttles, the appellant estimated that the marine shuttle lighter system would reduce river trade traffic within the Hong Kong port from 25,200 vessel movements to 6,400 vessel movements per annum. It described the benefits of its Proposal in the following terms:

    With professional terminal management, sound financial and technical ability, the development of the RTT and the operation of the marine shuttle lighter system by the Consortium will result in the following benefits:

    capability to accommodate in time the rapid growth of river trade traffic and cargo containerisation;

    availability of a reliable and efficient common user facility for river trade operators;

    relocation of river trade facilities from urban areas;

    reduction of waterway congestion at Ma Wan Channel and Harbour areas;

    reduction of road congestion in urban areas, Tuen Mun Highway and the Border Crossings;

    better utilization of social resources;

    increase in port productivity; and

    improvement in the environment of Tuen Mun and other urban areas.

    The berthing of intra-Asia vessels at the RTT

  27. The appellant’s Proposal was accordingly put forward on the basic premise that the purpose of the RTT was to handle river trade vessels carrying cargo to and from ports in the Pearl River Delta. Throughout the Proposal, it is envisaged that intra-Asia vessels will be serviced by shuttle lighters mid-stream and not as vessels discharging and loading cargo at an RTT berth.

  28. However, on 10 September 1999, just under a year after the RTT commenced operation, the appellant wrote to the government stating that the RTT was losing money and proposing to use two berths at the RTT for accommodating “small feeder vessels” said to be “from affiliated companies of our shareholders”. In attached diagrams and in a further letter dated 28 September 1999, it was made clear that these were “intra-Asia vessels” travelling to and from ports in Japan, Indonesia, Taiwan, Korea and Singapore.

  29. After initially indicating that this would be acceptable, the government changed its position and, by letter dated 21 October 1999, informed the appellant that it considered this suggestion contrary to SC 16. Notwithstanding the government’s objection, the appellant proceeded to berth such vessels at the RTT and in fact did so at four, and not just two, berths. It appears that the appellant now derives some 40% of its revenue from handling such vessels.

  30. As indicated above, evidence was filed by the government showing the itineraries of 23 such vessels during various periods in 2002 and 2003. These showed those vessels calling regularly at various Asian ports, with Hong Kong as part of the circuit and without calling at any other port in the Pearl River region. For instance, the “KHUDOZHNIK N RERIKH” and the “WIDAR” each ran a regular liner service between Taiwan and Hong Kong, calling at Hong Kong, Keelung, Taichung and Kaohsiung, and repeating that circuit five or six times a month. To take another example, the “CHAO SHAN HE” offered a regular service calling at Hong Kong and ports in Eastern China, Singapore, Thailand and Vietnam. One ship, the “CANADIAN EXPRESS”, did not confine her trading to Asian ports but ranged as far as Mexico, Venezuela and ports in Europe, calling twice at Hong Kong during a five-month period.

    THE PROPOSAL AND CONSTRUCTION OF THE AGREEMENT

  31. There can be no doubt that the berthing of such intra-Asia vessels was not part of the scheme described in the appellant’s Proposal. As has been noted, the Proposal was required as part of the tender by TN 3(d); required by TN 4(b) to be “satisfactory to the Government”; and stipulated by TN 10 to form “the basis of the development”. Moreover, the documents comprising the Proposal were signed by the parties and deposited with the District Lands Office. What then, if anything, is the legal significance of this?

  32. Mr. Benjamin Yu SC, appearing for the government, seeks to uphold the decision of the Court of Appeal squarely on the basis that its conclusion is dictated by the ordinary and natural meaning of the words in SC 16. That is his primary argument. However, he invites the Court also to construe the terms of the grant in the context of the Proposal, submitting that it is an aid to construction which provides strong support for the government’s construction of the clause.

  33. Mr. Chang submits that the Court can and should have regard to the factual matrix of the agreement but argues that the matters set out in the Proposal are merely descriptive and cannot be treated as prescribing or limiting the appellant’s operational arrangements.

  34. It is of course well-established that in construing a commercial contract such as the grant in the present case, the court is entitled to take into account the matrix of fact, meaning the objective surrounding circumstances, known to both parties, in which the agreement was made. The words of Lord Wilberforce in Reardon Smith Line v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995, are often cited in this context:

    No contracts are made in a vacuum: there is always a setting in which they have to be placed. The nature of what is legitimate to have regard to is usually described as ‘the surrounding circumstances’ but this phrase is imprecise: it can be illustrated but hardly defined. In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.

  35. As Lord Hoffmann NPJ put it in Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279 at 296:

    The construction of a document is not a game with words. It is an attempt to discover what a reasonable person would have understood the parties to mean. And this involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve.

  36. The Proposal sets out matters forming part of the factual matrix in which the parties reached agreement. It records what was objectively and mutually acknowledged to be the genesis and purpose of the RTT. It explains the developments in river trade traffic and the cargo-handling needs that provided the objective context in which the parties reached agreement for a land grant for the development of a river trade terminal. But beyond that, the Proposal is not relevant to construction of the terms of the grant.

  37. I agree with Mr. Chang’s submission that the scheme for operating the terminal put forward by the appellant in the Proposal is descriptive and not prescriptive. Tenderers were required by TN 3(d) to describe their plan of operation taking into account the government’s specified development objectives. The plan had to be satisfactory to the government. But tenderers did not thereby become contractually bound to confine themselves to the operational arrangements described in their Proposal. They were entitled to change those arrangements provided that any such changes were consistent with the terms of the grant, and in particular, provided that they did not introduce a user prohibited by SC 16.

  38. The berthing of intra-Asia vessels at the RTT is not inconsistent with the development objectives specified in TN 4(a). Indeed, as Mr. Chang submits, the practice may be seen as enhancing those objectives. Eliminating the use of shuttle lighters as cargo-handling intermediaries between intra-Asia vessels moored mid-stream and the RTT might well further reduce marine traffic through the Ma Wan Channel. The berthing arrangements are also quite consistent with the objective of adopting the marine mode as the predominant mode of transport for the external link of the RTT. Accordingly, the fact that the Proposal does not posit the berthing of such vessels does not of itself preclude adoption of the new practice.

  39. Conversely, however, the fact that the stated objectives of the RTT may be supported or promoted by such berthing does not provide a sufficient basis for concluding that the appellant is contractually entitled to pursue such arrangements. Everything depends on whether, on its true construction, such berthing arrangements fall foul of SC 16.

    THE CONSTRUCTION OF SC 16

  40. SC 16 restricts the use that can be made of the lot. By sub-clause (a) it provides that the lot “shall not be used for any purpose other than as a terminal for”:

    1. "the berthing of vessels regularly employed in trading or going within the Pearl River region";

    2. "and [the berthing of ] vessels trading solely within the Hong Kong waters under Part IV of the Shipping and Port Control Ordinance";

    3. "the loading, unloading and storage of break-bulk or container cargoes and containers carried or intended for carriage by sea in connection with trade and freight industries within the Pearl River region".

    I shall refer to these three restrictions as the first, second and third limbs of SC 16 respectively.

  41. The first two limbs of SC 16 identify and limit the classes of vessel that are permitted to berth at the RTT. The third limb restricts the cargo-handling activities allowed at the terminal. The cargo-handling restriction must be read together with SC 47(c) which prohibits use of the terminal “for the purpose of loading and unloading of containers to or from vessels other than vessels referred to in [SC 16]”. The restriction imposed by this sub-clause on the activity of loading and unloading containers adds to the restrictions on cargo-handling imposed by the third limb itself.

  42. The dispute in the present case centres on the words “vessels regularly employed in trading or going within the Pearl River region”. Mr. Chang endeavoured to argue that these words, occurring in the first limb, must be construed together with the cargo-handling provision in the third limb. I do not agree. The cargo-handling restriction stands on a separate footing and does not qualify either of the restrictions concerning the classes of vessel permitted to berth at the RTT. The third limb of SC 16 presents problems of construction of its own, elucidation of which throws no light on the proper construction of the user restriction relevant to the berthing of vessels such as the 23 vessels in question.

  43. The crucial argument for the appellant runs as follows: Hong Kong is a port “within the Pearl River region” and any vessel which regularly calls at Hong Kong for the purpose of taking on or discharging cargo here is a vessel which is “regularly employed in trading or going within the Pearl River region”. Those words are apt to cover a vessel that “goes within the Pearl River region” by calling at Hong Kong, notwithstanding that it originates from, and then continues immediately afterwards to, an Asian port outside that region. In other words, the expression “going within the Pearl River region” encompasses the concept of “going into the Pearl River region from the outside”. Thus, for the purposes of SC 16, the intra-Asia vessels with regular itineraries such as those described above qualify for berthing at the RTT.

  44. I am unable to accept such a construction of SC 16. It is my view, in common with the Court of Appeal, that in SC 16, the words “vessels regularly employed in trading or going within the Pearl River region”, given their ordinary and natural meaning, refer to vessels which regularly (although not exclusively) carry on the activity of trading or going within the confines of the geographical area described as “the Pearl River region”. I accept that Hong Kong should, for such purposes, be taken as a port within that region. However, the notion of going (or trading) within a particular region is essentially different from the notion of going into that region from somewhere outside and then leaving again. The words of the first limb of SC 16 do not carry the latter connotation. An intra-Asia vessel which calls at Hong Kong as part of its regular liner service does not engage in a pattern of trading or going which occurs “within the Pearl River region”. It engages in trading or going between various Asian ports outside the region, in the course of which it also enters the region to call at a single Pearl River region port, Hong Kong, as part of its wider employment. That is outside the contemplation of SC 16. As indicated earlier, this construction leaves open the legal position under SC 16 where, in combination with regularly trading or going within the confines of the Pearl River region, a vessel also engages in trading or going outside that region.

  45. The construction urged by the appellant runs very much against the grain of SC 16. As indicated above, there can be no doubt that the language of SC 16 is intended to be restrictive. The first two limbs aim at limiting the classes of vessel which can berth for cargo-handling at the RTT. The restrictive effect of the second limb of SC 16 is obvious, defining its permitted class as “vessels trading solely within the Hong Kong waters”, an expression apt, for example, to cover shuttle lighters. And when SC 47(c) restricts container handling activities at the RTT to the handling of “containers to or from vessels .... referred to in [SC 16]”, it borrows the language of SC 16, including the crucial words “vessels regularly employed in trading or going within the Pearl River region”, for use as a restrictive criterion for determining what containers may or may not be handled at the terminal.

  46. However, the appellant’s construction almost entirely deprives the first limb of SC 16 of restrictive effect. By definition, any vessel seeking to berth at the RTT is a vessel calling at Hong Kong and which has therefore gone “into the Pearl River region” for that purpose. If that suffices to qualify the vessel for berthing, and if it is a matter of indifference where that vessel came from or where she is going to call next, then virtually any vessel qualifies. The only remaining basis of restriction under this limb of SC 16 would be an objection that the vessel has not “regularly” called at Hong Kong. But it is impossible to see what commercial or other purpose could be served by refusing a berth to a vessel on her first visit to Hong Kong, but allowing her to berth on a subsequent visit because she might then be able to make some claim to “regularity” in visiting Hong Kong. Although Mr. Chang sought to argue that a further restriction would remain in the shape of the cargo-handling restriction in the third limb of SC 16, I consider (as stated above) that restriction to be quite separate and to have no impact on the construction of SC 16’s first limb. Moreover, to apply that restriction to vessels such as the intra-Asia vessels in question, would pose very serious practical problems arising from a need to ascertain the nature, provenance or destination of cargoes carried, thus adding to the commercial implausibility of the appellant’s construction.

  47. Furthermore, on the appellant’s construction, the reference to “the Pearl River region” appears to be redundant. If calling at Hong Kong is sufficient to qualify the vessel under SC 16, then nothing turns on whether the vessel is “regularly employed in trading or going within the Pearl River region”. The reference to the Pearl River and its region would be quite unnecessary. A construction which renders redundant almost all the words in the first limb of SC 16 must obviously be viewed with great suspicion.

  48. The textual analysis of SC 16 therefore very much favours the Court of Appeal’s conclusion. It is a construction which also derives substantial support from a consideration of the objective purpose and genesis of the agreement reached by the parties. To construe the relevant words as a reference to vessels regularly engaging in trade or passage between ports within the Pearl River region, is to reflect the RTT’s mutually acknowledged purpose of catering for growing numbers of river trade vessels plying between Hong Kong and ports in the Pearl River Delta. That the RTT’s purpose was to act as “an entrepôt for PRD trade” (an expression used by the appellant in its Project Description) is indicated not only by its name, which speaks of “River Trade”, but also by its physical location “upstream” of the Ma Wan Channel in order to reduce congestion in that channel. The premise of that choice of location can only be that the vessels to be handled at the RTT ply the waters to the west, that is, between our port and ports in the Pearl River region. Only then can the RTT be regarded as “upstream” of the Ma Wan Channel. Permitting river trade vessels which originate from the west to discharge their cargoes at Tuen Mun avoids congesting that Channel which lies further to the east.

  49. It is therefore easy to understand why SC 16 defines permitted user by reference to Pearl River region trading patterns of vessels allowed to berth, providing strong support for the foregoing textual analysis. The fact that SC 16 did not adopt a user clause based on the size, design or characteristics of vessels no doubt takes into account the likelihood that in the 50 year life of the grant, vessel characteristics may change, but not the trading region intended to be served by the RTT.

    RELIEF

  50. The appeal must therefore be dismissed. The Court was requested by both parties to deal in such eventuality with the Declarations sought and to remit all other questions of relief to the Court of First Instance. Accordingly:

    (a)

    I would dismiss the appeal and grant the first Declaration referred to in paragraph 5 above.

    (b)

    I would decline to make the second Declaration on the grounds that it is unnecessary and, in the light of the question left open in paragraphs 8 and 44 above, that it may arguably be too general.

    (c)

    I would remit all other issues concerning relief, both injunctive and monetary (whether by way of damages, an account or otherwise), to the Court of First Instance.

    (d)

    In consequence of such remitter, I would set aside the Court of Appeal’s directions adjourning the hearing in respect of consequential matters and regarding the filing of affidavits in relation thereto.

    (e)

    I would order the costs of this appeal to be paid by the appellant to the respondent.

    Sir Gerard Brennan NPJ

  51. I agree with the judgment of Mr. Justice Ribeiro PJ.


Cases

Reardon Smith Line v Yngvar Hansen-Tangen [1976] 1 WLR 989

Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279

Representations

Mr. Denis KL Chang SC, Mr. Anderson Chow SC and Ms Esther SY Lin (instructed by Messrs Kao, Lee & Yip) for the appellant

Mr Benjamin Yu SC (instructed by the Department of Justice) for the respondent


all rights reserved