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9/5/2012 5:02:13 AM EST
Not Entirely Legal - Part 54
Rural community; traditional housing rights; Small House Policy; BL Article 40
Posted by Malcolm Merry

Not so greedy

The possessive and protective attitude of the Heung Yee Kuk’s leaders and its members towards their land rights and the Small House Policy can be easily dismissed as greedy special pleading by sectional self-interest, and often is. But that would be an over-simplification and insensitive to the mindset of the rural community. Let us attempt to understand their point of view.

To inigenous minds, the turning of the small house right into money is a form of compensation for the losses that they have suffered in the last 60 years or so. In that time, the span of two generations and within living memory, their communities have been turned upside down by change. The old stability and certainties have gone. A quiet, farming life, centred on village, family, tradition and land, has given way to a hectic, more commercial existence.

This started when their ancestors were incorporated against their will into a colony run by foreigners and townsfolk. At first there was not a great deal of change, they could use their land much as before and the new rulers actually brought some benefits. But then came the Japanese, followed by squatters and severance from the rest of China. The government took their cherished land for this and that project. They were not given replacement land, nor paid compensation that reflected the fact that the land was to be developed. Farming ceased to be a viable occupation. The government told them that they could not build on what land they retained, nor use it for anything except agriculture. At the same time they saw the rest of the population prospering in the reformed economy, living in better housing in the new towns and the high-quality estates built on what used to be their land, and the property market booming.

Against that background it was only natural that the rural community should regard the sale of their traditional housing rights as a way of tapping into that prosperity. To them, it is simply unfair that the rest of Hong Kong should enjoy the benefits of the transformation made possible by the development of the New Territories yet at the same time resent villagers’ desire to have a share of those benefits. To them, it is inconsistent of the Hong Kong government to proclaim its belief in the free market yet try to prevent them from selling their rights and their land to the highest bidder.


Legal arguments

The sale of those rights and that land is viewed by village leaders as compensation for the sacrifices that they and other generations have made. They do not accept as legitimate the restrictions that the administration has tried to impose on those rights. They argue that before 1898 their forefathers could build on their land without restriction. Accordingly villagers’ representatives have never accepted the condition in the Crown leases of 1905 that permission be sought from the government for any building on agricultural land. That was a breach of the no-expropriation clause in the Convention of Peking. It was also a violation of their custom, contrary to the Governor’s proclamation.

Furthermore they do not accept that village houses are restricted to three storeys or that the small house custom is exerciseable only on marriage. The flexibility of District Officers and the placatory attitude of those in charge of New Territories administration had prevented this from coming to a head before 1972. After that, the Small House Policy and the prospect of acquiring building land at a discount kept indigenous people broadly satisfied.

The Heung Yee Kuk has, however, never recognised the policy as being aimed at alleviating rural housing need. When announcing the policy to the kuk by letter in November 1972, Denis Bray, the minister in charge of the New Territories, astutely omitted any reference to housing need even though that was one of the main internal government justifications for the policy. To the kuk, the policy was an overdue recognition and facilitation of its members’ ancient land rights. Any ending of the policy would deprive villagers of their fundamental rights and attack their core values.

Anyway, the kuk’s legal advisers argue, whilst the policy may have originated as an administrative measure, since 1997 under Article 40 of the Basic Law it has become a constitutional right which the SAR is obliged to protect. So, they claim, talk of restricting the policy is inappropriate for that restriction would be unconstitutional.

There are weaknesses in these arguments but they give some insight into the frame of mind of at least the senior figures in the indigenous community.

Younger indigenous leaders, such as the former President of the Law Society Junius Ho (who is also a rural committee chairman) it should be said, seem not so adamant. Perhaps reflecting the benefits of the expensive education which, thanks to the policy, their parents have been able to afford for them, they tend to be more moderate. Some accept that the grant of government land at a concessionary premium is unjustifiable if the house upon it is to be on-sold without being occupied by and indigenous family. However, they defend as being in keeping with tradition the right to build on their own land without payment for permission to do so.

On a recent radio phone-in programme, Junius did not try to defend the gift of building land at a concessionary premium. But he did insist on villagers’ right to build on their own land. This is an astute concession but it has come late in the debate about the Small House Policy.

The legal arguments of the indigenous community and its advisers nowadays hinge upon the provisions of Article 40 of the Basic Law. What does that provide?


BL Article 40

Article 40 provides simply that the lawful traditional rights and interests of the indigenous inhabitants of “the New Territories” shall be protected by the Hong Kong SAR. Its inclusion in the post-1997 constitution represented an astounding political coup for the Heung Yee Kuk. The words of the article are recognition by the government of “New China” of a way of life which is long gone in the mainland. More than that, the article recognises the New Territories as an entity and component of the SAR even though the nomenclature is British and formed from a colonial perspective and even though the New Territories were created by an international agreement which the PRC had been consistent in denouncing as an “unequal treaty”. Perhaps that explains the inverted commas around those words in the article.

The main question on Article 40 is the content of the traditional rights to which the article refers. Do they include the Small House Policy itself, as the Heung Yee Kuk maintains? There is some support for that in obiter dicta of the Hong Kong Court of Final Appeal but a recent first instance decision, Koon Ping Leung v Director of Lands, suggests otherwise.

That was a challenge by an indigenous villager resident in Australia to a refusal by the District Lands Office of his application for a small house grant on the grounds that he was neither resident nor intending to be resident in the village: he had to admit that he would remain in Australia because he received medical benefits there for which only residents were qualified; he said he wanted the house for his mother. The plaintiff claimed that the residence requirement was unconstitutional. The Mr Justice Johnson Lam disagreed, drawing a distinction between the policy and the traditional right. The latter was a right to build on land that the villager owned; the policy was an administrative measure that provided land on certain conditions to those who had no land so that they could exercise the right.

The decision is well reasoned but the reflections on custom and policy are incidental since the judge held that, assuming the policy was part of the traditional right, the requirements of the policy must also be part of the right. The court was also hampered by lack of evidence as to precisely what rights had traditionally been exercised by indigenous villagers. Similar difficulties recently caused another trial judge recently to decline the opportunity to interpret Article 40. The precise meaning of the article therefore awaits decision by the appellate courts and perhaps ultimately by Beijing. Indications are that the interpretation will not be long in coming.



Malcolm Merry is Associate Professor of Law at the University of Hong Kong and a Hong Kong barrister. He is the author of Hong Kong Tenancy Law (5th ed, LexisNexis 2010) and co-author (with Paul Kent) ofBuilding Management in Hong Kong (2nd ed, LexisNexis 2008).


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