In Kwok Cheuk Kin v Director of Lands  HKCFI 867, the Hong Kong Court of First Instance ruled that Private Treaty Grants and Land Exchanges under the Small House Policy were unconstitutional. Hence, male indigenous villagers no longer have the right to apply for permission to build houses on government land at concessionary premium. In contrast, rights in the form of Free Building Licences were upheld as lawful and traditional rights protected under Article 40 of the Basic Law (“Article 40”). Due to the significant consequences of the case for both indigenous and non-indigenous people, the decision is currently under appeal in the Court of Appeal, and it is very likely that an appeal will be brought in the Court of Final Appeal.
The Small House Policy confers upon male indigenous inhabitants of the New Territories (“indigenous inhabitants”) the opportunity to apply for permission to build a small house for themselves, by way of:
- Free Building Licences, on agricultural land owned by the applicant himself free of premium;
- Private Treaty Grants, on government land at concessionary premium; or
- Land Exchanges, free of premium for the private land portion and at concessionary premium for the government land portion.
Issues in dispute
- Whether the benefits conferred on indigenous inhabitants under the Small House Policy are “lawful traditional rights and interests of the indigenous inhabitants of the New Territories” within the meaning of Article 40?
- Whether the rights and interests regarded as “traditional” can be challenged on the ground of discrimination against non-indigenous people and female indigenous villagers?
Anderson Chow J found that the Small House Policy was unlawful by reason of its discriminatory nature, because it gave preferential treatment to indigenous inhabitants based on social origin and sex.
Consequently, the crucial question was whether the Small House Policy could be rendered lawful by Article 40. This depended on whether the Small House Policy could satisfy the “traditional” and “lawful” elements in Article 40.
During the drafting process, it was believed that there were existing rights based on customary practices only enjoyed by indigenous inhabitants, which had existed prior to the commencement of the 1898 New Territories Lease. Accordingly, the “traditional” element referred to interests of indigenous inhabitants traceable to before the New Territories Lease. Free Building Licences was held as “traceable”, having been initiated by the British colonial government in 1906 on the understanding that prior to the New Territories Lease, the indigenous inhabitants were entitled to build houses on their land without seeking the Qing Imperial authorities’ approval.
However, the interests in the form of Private Treaty Grants or Land Exchanges were not “traceable” to any “traditional” interest. The judge pointed out that closed village auctions, participation of which were restricted to villagers, were permitted simply as a tool of convenience, and not because the British government accepted that the indigenous inhabitants had traditional rights.
The Court held that it would not be consistent with the purpose of Article 40 to allow the rights which could be regarded as “traditional” to be challenged on the ground of discrimination, as it was clear at the time of drafting that some rights might be open to objection on such a ground. Thus, “lawful” was merely descriptive of the traditional rights enjoyed by indigenous inhabitants, and did not constitute an independent criterion to be fulfilled in order to gain protection under Article 40.
The Court’s judgment has shrunk the scope of constitutional rights enjoyed by indigenous inhabitants. Nonetheless, in practical terms, the decision is unlikely to have a pronounced impact: this is because Private Treaty Grant and Land Exchange applications only constitute approximately 13% of the total number of applications for small house grants, with Free Building Licences, which are still permissible, comprising 87%. Thus, although male indigenous villagers hoping to build on government land on concessionary terms will no longer able to do so, the majority of applications, namely those for building on their own land at nil premium, remain unaffected.
Given the particularly contentious nature of the Small House Policy (due to its discriminatory character as well as Hong Kong’s housing shortage), the Court’s attempt to navigate this controversial subject is commended. Ultimately, the outcome in any appeal will hinge on the approach to statutory interpretation which the court chooses to employ- a matter which itself is subject to debate. It remains to be seen whether the Court’s methodology for analysing indigenous rights will be upheld in the higher courts.