Hui Sin Hang v. Chief Executive in Council
Read the full judgment text of HCAL 99/2015 on BabelCite. This High Court CFI judgment was delivered on 15 March 2016.
1. In these 3 applications for leave to apply for judicial review, the applicants seek to challenge the legality of:-
Cites 1 case
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HCAL 99, 102 & 104/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 99 OF 2015 _______________
_______________ AND IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 102 OF 2015 _______________
_______________ AND IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 104 OF 2015 _______________
_______________ (Heard together)
__________________ D E C I S I O N __________________ INTRODUCTION 1.In these 3 applications for leave to apply for judicial review, the applicants seek to challenge the legality of:-
BACKGROUND FACTS 2.For the purpose of these applications, the following brief background facts relating to the ACF and PRD Airspace Plan should suffice. (i) The ACF 3.HKIA is operated and maintained by AAHK, a statutory body whose functions, powers and duties are governed by the provisions of the Airport Authority Ordinance, Cap 483 (“the Ordinance”). 4.For the purpose of assessing and planning for HKIA’s long‑term needs, AAHK has been preparing 20-year Master Plans, reviewed and updated every five years. Since 2000, AAHK has published Master Plan 2020, Master Plan 2025 and Master Plan 2030. 5.At the time of its commissioning in 1998, HKIA had a single runway. In 1999, it was expanded into 2 runways. 6.In Master Plan 2030, which was published on 2 June 2011 for public consultation, AAHK put forward two options for expansion of HKIA’s runway system. The first involved expanding the existing 2-runway system (“2RS”), and the second involved the construction of a third runway (ie, the 3RS). According to the assessment of AAHK’s financial consultant (HSBC), both options would involve significant financial investment, with the latter costing more, but delivering double the throughput of the former. 7.Apparently, the feedback that AAHK received during the public consultation which took place between June and September 2011 indicated a clear majority (73% of the respondents) in favour of the 3RS. Accordingly, in its submission to the Government on 29 December 2011, AAHK recommended the Government to pursue the 3RS. 8.On 20 March 2012, the Chief Executive in Council (“the CEIC”) made the following decision (“the March 2012 Decision”), as recorded in a Legislative Council Brief entitled “Hong Kong International Airport Master Plan 2030” prepared by the Transport and Housing Branch dated 20 March 2012:
9.Subsequent to and as a result of the March 2010 Decision, AAHK deliberated on and put together a proposed financing arrangement for the 3RS. The construction cost of the 3RS was estimated to be around HK$84.5 billion (in 2010 dollars), or HK$141.5 billion (at money-of-the-day prices). AAHK’s consultant envisaged that there would be a funding shortfall of about HK$102 billion (at money‑of‑the‑day prices) which it was proposed would be met by:-
10.In relation to the “joint contribution” principle referred to in (2) above, AAHK proposed that users of HKIA including passengers, airlines and operators at HKIA should contribute to the project costs. In so far as passengers were concerned, AAHK proposed the introduction of the ACF at the rate of HK$180 per departing passengers (excluding transit passengers) from 2016/17 to 2030/31. 11.In January 2015, after completion of the tasks referred to in the March 2012 Decision, AAHK made a further submission to the Government in accordance with paragraph (c) of that decision. 12.On 17 March 2015, the CEIC made the following decision (“the March 2015 Decision”), as recorded in a Legislative Council Brief entitled “Hong Kong International Airport Three-Runway System” prepared by the Transport and Housing Branch dated 20 March 2015 (“the March 2015 Legco Brief”):
13.In relation to the financing arrangement proposed by AAHK, the Government suggested that AAHK should explore options for lowering the ACF with a view to minimizing the burden on passengers (see paragraph 19 of the March 2015 Legco Brief). 14.In the meantime, AAHK began to implement its financing arrangement for the construction of the 3RS by resolving not to declare any dividend for the year 2014/15 at its board meeting on 26 May 2015. 15.Pursuant to the Government’s suggestion referred to in paragraph 13 above, AAHK reviewed the charging level of the ACF. Having consulted stakeholders including home-based carriers and the travel industry and conducted a survey on transfer and transit passengers, in September 2015 AAHK proposed a revised ACF regime with differential charging levels which distinguished:-
16.The revised ACF regime proposed by AAHK is as follows:-
(ii) The PRD Airspace Plan 17.The background of the PRD Airspace Plan, as set out in the March 2015 Legco Brief, is as follows:-
18.In a statement made by the Civil Aviation Department (“the CAD”) to media reports on the PRD airspace dated 10 March 2015, the following information relating to the PRD Airspace Plan was given:-
19.In relation to the principle of “shared use of airspace”, Mr Cheng Po Keung, Chief Air Traffic Control Officer of the CAD, further explains that it refers to the act of permitting the delineation of airspace lying across boundaries to facilitate the provision of air traffic services (“ATCs”) by another authority, and involved “delegating a portion of airspace under jurisdiction” (see paragraph 20 of his affidavit dated 12 February 2016). At paragraph 23 of that affidavit, Mr Cheng further states that in order to facilitate ATC, the flight paths of authorities concerned may make use of a small portion of each other’s airspace but both sides will utilize different flight altitude layers, subject to a mutually agreed arrangement. HCAL 99 OF 2015 20.In the Amended Form 86 in HCAL 99/2015, the applicant (“Hui”) seeks to challenge:-
(i) The financing arrangement 21.In respect of both (1) and (2) above, Hui’s challenge is based on the argument that AAHK has no power to impose the ACF. This is because, according to Mr Hectar Pun SC (for Hui) (i) the charging of the ACF violates the “no levy without authority” principle, and/or (ii) the ACF is a form of taxation which has not been approved by the Legislative Council and therefore violates Article 73(3) of the Basic Law, which states as follows:-
22.The “no levy without authority” principle is well established, and is to the effect that the Government (or a public body) has no power to impose any charge upon the subject unless the power to charge has been given by the legislature by express words or by necessary implication: see Attorney General v Wilts United Diaries Ltd (1921) 37 TLR 884, at 886 per Atkin LJ and at 885 per Scrutton LJ; McCarthy & Stone (Developments) Ltd v Richmond upon Thames LBC [1992] 2 AC 48, at 70-71 per Lord Lowry; Harness Racing New Zealand v Kotzikas [2005] NZAR 268, at paragraph 93; and PCCW-HKT Telephone Ltd v Secretary for Commerce and Economic Development [2015] 4 HKLRD 415, at paragraphs 31 to 39 per Ng J. 23.In my view, the simple answer to Hui’s complaint of violation of the “no levy without authority” principle is that the legislature has expressly empowered AAHK to charge the ACF. For this purpose, the following provisions of the Ordinance are relevant. 24.The object of the Ordinance, as set out in its long title, is –
25.Section 5(1)(a) of the Ordinance, relating to the purposes of AAHK, provides as follows:-
26.Section 7(1) of the Ordinance provides that AAHK shall have power:-
27.Section 7(2)(i) further provides that, without affecting the generality of subsection (1), AAHK may –
28.It is, in my view, clear from the above provisions of the Ordinance and on the facts of the present case that:-
29.In this regard, the present case is distinguishable from McCarthy & Stone. That case concerned the power of a local planning council to levy a charge on developers for giving planning advice in the context of inquiries relating to speculative development or redevelopment proposals. By virtue of section 111(1) of the Local Government Act 1972, the local planning council has power to “do any thing … which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions”. It was held by the House of Lords that the giving of pre-application planning advice facilitated or was conducive or incidental to the council’s planning functions but was not itself a function of the council, and thus the council had no power to impose the charge. In the words of Lord Lowry (with whom the other members of the House of Lords agreed), “To charge for the exercise of that power is, at best, incidental to the incidental and not incidental to the discharge of the functions” (at 75A-B). On the other hand, the present case concerns the imposition of a charge to enable or facilitate AAHK to develop HKIA which, as earlier mentioned, is a principal function of AAHK. 30.The above conclusion that AAHK has express power under the Ordinance to impose the ACF also answers Hui’s complaint of violation of Article 73(3) of the Basic Law, even if the ACF can be regarded as a form of tax. 31.In all, I am of the view that Hui’s intended judicial review of AAHK’s financing arrangement for developing the 3RS is not reasonably arguable. 32.In passing, I should mention that Mr Benjamin Yu SC (for the CEIC) has raised a number of other objections to Hui’s intended judicial review of AAHK’s financing arrangement for developing the 3RS, namely:-
33.Mr Pun has sought to meet some of these objections by proposing some amendments to the Amended Form 86. Those proposed amendments cannot, however, overcome the fundamental point that AAHK has express power under the Ordinance to impose the ACF. For this reason, I do not consider it necessary to deal with the aforesaid objections raised by Mr Yu on behalf of CEIC. Neither would I grant leave to Hui to re-amend the Form 86. (ii) PRD Airspace Plan 34.Mr Pun argues that under the principle of shared use of airspace pursuant to the PRD Airspace Plan, the Civil Aviation Administration of China (“CAAC”) will be responsible for the provision of air traffic services in a small portion of airspace within the flight information region of the HKSAR. This, it is said, would be inconsistent with Article 130 of the Basic Law, which provides as follows:-
35.In support of his argument, Mr Pun relies on, amongst other matters, paragraph 20 of the affidavit of Mr Cheng which refers to “delegating a portion of airspace under own jurisdiction” in implementing the principle of the shared use of airspace, and also the following explanation of the principle of “shared use of airspace” appearing at paragraph 2.1.1 of Chapter 2 of Annex 11 to the Chicago Convention on International Civil Aviation, 13th Edition (July 2001) (referred to by Mr Cheng in his affidavit):-
36.As I understand from the public statement made by the CAD dated 10 March 2015, under the principle of shared use of airspace, the CAD would permit the CAAC to make use of a small portion of the HKSAR’s airspace to facilitate their air traffic control, and vice versa. The use by the CAAC, pursuant to permission granted by the CAD, of a small portion of the HKSAR’s airspace does not mean, in my view, that the HKSAR is no longer responsible on its own to manage the provision of air traffic services within the flight information region of the HKSAR. As mentioned in that statement, the ownership of the concerned airspace still belongs to the original civil aviation authority. 37.In respect of the above quoted paragraph in Chapter 2 of Annex 11 to the Chicago Convention, it is significant that, immediately after that paragraph, the following note appears:-
38.The use of the word “delegate” (or different forms of that word) in the Chapter 2 of Annex 11 to the Chicago Convention, and also in Mr Cheng’s affidavit, does not denote, to my understanding, a complete relinquishment of control or responsibility by the original civil aviation authority over the “delegated” airspace concerned. 39.In all, the complaint that implementation of the principle of shared use of airspace under PRD Airspace Plan would breach Article 130 of the Basic Law is, in my view, not reasonably arguable. 40.In passing, I should mention that Mr Yu has raised two other subsidiary objections to Hui’s challenge against the PRD Airspace Plan, namely:-
41.In view of the conclusion that I have reached on the substance of this challenge, it is not necessary for me to deal with the subsidiary objections raised on behalf of the CEIC. HCAL 102 OF 2015 42.Before I deal substantively with this application for leave to apply for judicial review, I shall first dispose of an application made by the applicant (“Wong”) orally at the hearing on 1 March 2016 to adjourn the present leave application for one month on the ground that he is currently appealing against the Director of Legal Aid’s refusal to provide legal aid to him in relation to the present application. Wong also informed the court that his legal aid appeal was pending the provision of further information or submissions by the Director of Legal Aid. Both Mr Yu for the CEIC and Mr Russell Coleman SC for AAHK objected to the application for adjournment on (inter alia) the ground that the leave application was wholly unarguable. 43.As I informed Wong at the hearing, in view of the fact that one of the grounds of objection to his adjournment application related to the merits (or lack of merits) of his leave application, I would deal with the adjournment application together the leave application in my decision. I also invited Wong to make submissions in support of his leave application, and expressly told him to do so as if the adjournment application had been refused. In the event, Wong did not make any substantive submissions in support of his leave application, but repeated his grounds for seeking an adjournment of the hearing. 44.I now turn to the substance of the leave application. In the Form 86, Wong challenges:-
45.The particular grounds relied upon by Wong are as follows:-
46.In respect of (1), the evidence of Lo Chi Chung William, Executive Director, Finance of AAHK, shows that:-
47.As submitted by Mr Coleman, which I accept, whether some plan or cause of action is in compliance with “prudent commercial principles”, particularly in the specialized context of airport operation and development, is a matter which the court ought to accord a wide discretionary area of judgment to AAHK. This is not to say that the court has no power to intervene in such matter, but it must be in wholly exceptional circumstances that the court will feel able to override the commercial decision of AAHK who has all along been advised by professional financial consultant in relation to the financing arrangement for the 3RS. 48.In relation to AAHK’s obligation under section 6(1) of the Ordinance to ensure that, taking one year with another, its revenue is at least sufficient to meet its expenditure, such obligation is not absolute, but only “as far as practicable”. The construction of the 3RS is a one-off, large scale capital intensive project. It would not be reasonable to construe section 6(1) of the Ordinance to mean that even for such a project, AAHK cannot resort to external borrowings but can only look to its operating revenue to finance the project and moreover must ensure that its operating revenue is sufficient to meet the capital expenditure required. 49.Wong has, in my view, wholly failed to raise any reasonably arguable case that AAHK would breach the commercial prudence requirement imposed by section 6(1) of the Ordinance in relation to its financing arrangement for the 3RS. 50.In respect of (2), it is plainly incorrect to suggest that the Government intends to waive, nor not to receive, dividends from AAHK for over 10 years. Whether to declare any dividend is a decision to be made by the board of AAHK, not the Government. Although the Financial Secretary may, in specified circumstances, direct AAHK to declare and pay dividend under section 26 of the Ordinance, it is not suggested that the Financial Secretary has exercised such power. In any event, I am unable to see how AAHK’s proposal not to distribute any dividends to the Government from 2014/15 until the full commissioning of the 3RS in 2023/24 can turn the cost of construction of the 3RS into a “public expenditure” such that it has to be authorized by the Legislative Council under Article 64 of the Basic Law. 51.In respect of (3), it is clear, from the Legislative Council Brief (FCR(95-96)45) entitled “Capital Investment Fund, Head 969‑Provisional Airport Authority, New Head ‘Airport Authority’” prepared by the Finance Branch dated July 1995 that the Financial Support Agreement was an agreement to be entered into between the Hong Kong Government and the Airport Authority in connection with the “Airport Project” which was defined to mean HKIA with the 1st runway, and has no relevance to the proposed 3RS. In any event, clause 5.1 of that agreement states that “[i]n accordance with the financial projection set out in Part II of the Second Schedule the Authority confirms that subject to the assumptions upon which that financial projection is based remaining valid it is the Authority’s intention that its finances are to be planned with the objective of paying a dividend to the Government no later than 30th September 2001, and retiring all Project Borrowings from its accounts by 2001.” In my view, that clause cannot reasonably be read as meaning that AAHK would be committed to pay dividends to the Government as from 30 September 2001, whatever the circumstances. 52.Lastly, in respect of (4), it is also clear that the Airport MOU entered into between the PRC and British Governments was with reference to the “Airport Core Programme” which was defined to mean HKIA with the 1st runway, and it has no relevance to the proposed 3RS. 53.In all, none of the proposed grounds of challenge raised in the Form 86 in this application is reasonably arguable. There clearly being no merit in the application, I refuse to grant the adjournment of the hearing of the present leave application sought by Wong. HCAL 104 OF 2015 54.The applicant (“Koo”) was absent from the hearing of the leave application on 1 March 2016. In his Form 86, he seeks to challenge the same decisions as in HCAL 102/2015. His grounds of challenge are also similar to those raised by Wong, namely:-
55.I have already dealt with these grounds of challenge above and shall not repeat my analysis here. As in relation to HCAL 102/2015, none of the proposed grounds of challenge raised by Koo in his Form 86 is reasonably arguable. DISPOSITION 56.For the forgoing reasons, I refuse to grant leave to the applicants to apply for judicial review in these three applications, and dismiss the same. I also make an order nisi that there be no order as to costs. 57.Lastly, it remains for me to thank counsel for their helpful assistance to the court.
HCAL 99 of 2015 Mr Hectar Pun, SC and Mr Jeffrey Tam, instructed by Kok & Ha, for the applicant Mr Benjamin Yu, SC and Ms Eva Sit, instructed by Department of Justice, for the respondent Mr Russell Coleman, SC and Mr Abraham Chan, instructed by Hogan Lovells, for the interested party HCAL 102 of 2015 Applicant, in person, present Mr Russell Coleman, SC and Mr Abraham Chan, instructed by Hogan Lovells, for the 1st respondent Mr Benjamin Yu, SC and Ms Eva Sit, instructed by Department of Justice, for the 2nd respondent HCAL 104 of 2015 Applicant, in person, absent Mr Russell Coleman, SC and Mr Abraham Chan, instructed by Hogan Lovells, for the 1st respondent Mr Benjamin Yu, SC and Ms Eva Sit, instructed by Department of Justice, for the 2nd respondent | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCAL 99/2015