Ipsofactoj.com: International Cases [2006] Part 3 Case 7 [CFA]


COURT OF FINAL APPEAL, HKSAR

Coram

S.L. Lo

- vs -

Hong Kong Housing Authority

CHIEF JUSTICE LI

MR. JUSTICE BOKHARY PJ

MR. JUSTICE CHAN PJ

MR. JUSTICE RIBEIRO PJ

SIR ANTHONY MASON NPJ

20 JULY 2005


Judgment

Chief Justice Li

(delivered a judgment in which Justice Chan, Justice Ribeiro and Sir Anthony Mason concurred)

  1. 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 R.E.I.T.”), 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. 17A(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

    4.

    Withdrawal from commercial operation

    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.

    5

    Tiding over budget deficit

    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 R.E.I.T.

  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 R.E.I.T., 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 R.E.I.T. 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 R.E.I.T. 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 R.E.I.T. 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 R.E.I.T. 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 R.E.I.T., 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 R.E.I.T., 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 R.E.I.T., 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 R.E.I.T. 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 R.E.I.T. 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 Co (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 R.E.I.T. 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 R.E.I.T. 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 R.E.I.T., 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 R.E.I.T., 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 (at 373)

    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.

  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 R.E.I.T. 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.

    Chief Justice Li

  49. 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.


Cases

Lo Siu Lan v Hong Kong Housing Authority [2005] 2 HKLRD 208; Baroness Wenlock v River Dee Company (1885) 10 App. Cas. 354; Bonanza Creek Gold Mining Co. Ltd v The King [1916] 1 AC 566; Ebbw Vale Urban District Council v South Wales Traffic Area Licensing Authority [1951] 2 KB 366; Credit Suisse v Allerdale Borough Council [1997] QB 306

Legislations

Housing Ordinance, Cap. 283: s.2, s.3, s.4, s.6, s.17A

Representations

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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