Introduction

New Territories Small House Policy (“Small House Policy”) is a non-statutory administrative policy operated by the Lands Department since November 1972. It authorises grants of land and building licenses of some villages in the New Territories on more favourable terms to indigenous male inhabitants. The Small House Policy is controversial; some argue that it is discriminatory on the basis of sex, birth or social origin.

The Basic Law was promulgated in 1990 and came into effect in 1997. After the promulgation of the Basic Law, the Hong Kong Bill of Rights Ordinance (Cap 383) and the Sex Discrimination Ordinance (Cap 480) (“SDO”) were enacted in 1991 and 1996 respectively. SDO render discrimination based on sex unlawful and provide equal opportunity between men and women. However, SDO expressly provides that it does not apply to Small House Policy.

In the recent decision of Kwok Cheuk Kin v Director of Lands & Ors [2021] HKCFA 38, the Court of Final Appeal (“CFA”) puts an end to the long-held debate on whether the Small House Policy is constitutional and held that the Small House Policy is legitimate and justified.

Background

The Small House Policy

The Small House Policy allows an indigenous male inhabitant of at least 18 years old and descended through the male line from a resident in 1898 of a recognised village to obtain a small house grant. Under the Policy, there are three types of small house grants for the indigenous male inhabitants: 

The Law

Article 40 of the Basic Law provides that:

 “The lawful traditional rights and interests of the indigenous inhabitants of “New Territories” shall be protected by the Hong Kong Special Administrative Region”.

Article 25 of the Basic Law provides that:

“All Hong Kong residents shall be equal before the law”.

Article 22 in section 8 of the Bill of Rights Ordinance provides that:

“All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as … sex … social origin … birth or other status”.

(Together, “Anti-Discrimination Provisions”)

The claim and the appeal

Kwok’s judicial review of the Small House Policy in December 2015 was based on:

1. The Small House Policy was unconstitutional and the rights and interests provided under the policy was not within the scope of the “lawful traditional rights and interests of the indigenous inhabitants” under Article 40 of the Basic Law; and
2. The Small House Policy was unconstitutional as it discriminated against non-indigenous inhabitants and female indigenous inhabitants in contravention of the Anti-Discrimination Provisions, whereby persons who were non-indigenous status by birth or social origin were put at a disadvantage.

At the Court of First Instance (“CFI”), it was held that among the three types of small house grant under the Small House Policy, only free building licenses could be regarded as a traditional indigenous right, while private treaty grant and exchange are not as they are not traceable before the lease of the New Territories in 1898 when there had been no building controls before the New Territories were incorporated into the colony of Hong Kong. All parties in the application challenged the decision. The Court of Appeal (“CA”) subsequently overturned CFI’s decision and concluded that the Small House Policy satisfied the lawful and traditional elements under Article 40 of the Basic Law. Kwok appealed to the CFA.

The final appeal

Whether Small House Policy is lawful

The CFA explained that Article 40 of the Basic Law qualifies and limits the application of the Anti-Discrimination Provisions on 3 bases:

1. The Basic Law was founded on the principle of continuity. The joint declaration by the government of the PRC and United Kingdom in 1984 provided that the “current social and economic systems” will remain unchanged. Article 40 is a provision seeking to give effect to that principle by protecting an existing entitlement of a particular class of persons, namely indigenous male inhabitants.
2. The CFA considered and recognised the reasoning in Pretty v Solly (1859) 26 Beav. 606:

“… wherever there is a particular enactment and a general enactment in the same statute, and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to the effect only the other parts of the statute to which it may properly apply”.

Article 40, which is more particular, shall prevail over the Anti-Discrimination Provisions which is more general.

      3. Discriminatory advantages enjoyed by the indigenous inhabitants can be justified as being necessary in pursuit of a legitimate aim. If the discrimination provided under Article 40 is unjustified, then there is no reason for Article 40 to be in place as its legislative intent was to protect the indigenous inhabitants.

Whether the rights or interests under the Small House Policy is “traditional”

The CFA noted that there is nothing in Article 40 of the Basic Law that requires a right or interest to be traceable to the period before 1898. Taking a purposive approach, the CFA explained that the Small House Policy was never meant to replicate the old-pre 1898 system. Instead, it was introduced by the colonial authorities to soften the transition between systems of law. As such the rights or interests under the Small House Policy are new rights conferred by the colonial administration after the inception of the New Territories lease of 1898.

The CFA upheld the CA’s ruling and declared that the Small House Policy is constitutional.

Takeaway

While the Small House Policy may seem biased, the CFA’s decision in Kwok Cheuk Kin has made it clear that the Small House Policy is an exclusive provision to protect the existing entitlement of a particular class of persons (i.e. the indigenous male inhabitants). With the unanimous judgment handed down by the CFA, the debate on whether the Small House Policy is discriminatory on the basis of sex, birth or social origin was put to an end conclusively.