Read the full judgment text of FACV 21/2015 and FACV 22/2015 on BabelCite. This Court of Final Appeal judgment was delivered on 26 September 2016 before Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Tang PJ, Mr Justice Fok PJ and Lord Neuberger of Abbotsbury NPJ.
Constitutional law – property rights – planning restrictions – Basic Law Articles 6 and 105 – Town Planning Board – proportionality analysis – four-step test – margin of discretion – manifestly without reasonable foundation – judicial review. The Hysan Development Company group and Leighton Property Company group own substantial properties in Causeway Bay and Wanchai, and the Town Planning Board imposed new planning restrictions on their sites via draft Outline Zoning Plans, comprising building height restrictions (mostly 130mPD), podium height restrictions, non-building areas, building setbacks, and (in Oriental Generation Limited's case for Kai Tak Mansion) a building gap. The Board's stated purpose was to facilitate air ventilation and pedestrian traffic flow in densely built-up areas. The Board rejected all the developers' representations (save in one minor respect). At first instance, Reyes J dismissed Hysan's application but allowed OGL's. The Court of Appeal allowed Hysan's appeal and dismissed the Board's appeal in OGL's case on various administrative law grounds, granting orders of certiorari and mandamus directing reconsideration, but held that Articles 6 and 105 of the Basic Law were not engaged. The developers appealed to the Court of Final Appeal on the constitutional questions of whether Articles 6 and 105 are engaged by planning restrictions, whether proportionality analysis is required, and what standards should be applied. Whether Articles 6 and 105 are engaged – The phrase 'in accordance with law' in Articles 6 and 105 mandates legal certainty (clear and accessible laws) rather than limiting the scope of constitutional protection; it does not reduce the protection conferred to merely a requirement of legal certainty. The fact that property rights are intrinsically subject to legal restrictions under the general law does not mean new and more intrusive planning restrictions can be disregarded as mere incidents of ownership – A fortiori, new and more restrictive constraints imposed after acquisition engage the Articles (following JA Pye (Oxford) Ltd v United Kingdom). Whether proportionality analysis is required – Where a constitutional right is not absolute and the Basic Law or Bill of Rights provides no express guidance on allowable limits, the Court undertakes a proportionality analysis, drawing on the jurisprudence of the ECtHR, the UK, and Canada. Three-step versus four-step approach – Hong Kong should adopt a four-step analysis: (i) does the measure pursue a legitimate aim; (ii) is it rationally connected to that aim; (iii) is it no more than necessary; and (iv) does it strike a fair balance between societal benefits and inroads into individual rights (adding the fourth step from R v Oakes and now generally accepted in the UK). Standard at the third step – Two main standards exist on a continuous spectrum: 'reasonable necessity' (no more than necessary) and 'manifestly without reasonable foundation' (the domestic equivalent of the ECtHR's margin of appreciation). The choice depends on the appropriate width of the margin of discretion, which in turn depends on factors such as the significance of the right, the extent of interference, and the identity and special competence of the decision-maker. Town planning restrictions – For town planning restrictions by the Board, the 'manifestly without reasonable foundation' standard applies, as planning is a holistic process carried out by statutory machinery with expert input, and the Board is better placed than the Court to make such assessments (following the ECtHR's approach in Sporrong and Phocas). The Board's role is to discharge its duties under the TPO, not to conduct a proportionality analysis. A1P1 jurisprudence is generally of assistance when property rights are considered, subject to careful attention to differences in language and context. Outcome – The Court of Final Appeal answered the constitutional questions, varying the Court of Appeal's remitter orders to delete reference to reconsideration in accordance with the Court of Appeal's judgments, and made an order nisi for no order as to the costs of this appeal with liberty to apply within 21 days.
Legal issues: Whether Articles 6 and 105 of the Basic Law are engaged by planning restrictions · Whether a proportionality analysis is required · Three-step versus four-step proportionality inquiry · Standard at the third step of proportionality · Standard applicable to town planning restrictions
Outcome: The Court of Final Appeal held that Articles 6 and 105 of the Basic Law are engaged where planning restrictions imposed by the Town Planning Board encroach upon a landowner's property rights, and that such restrictions must satisfy a four-step proportionality analysis. For town planning restrictions, the applicable standard is 'manifestly without reasonable foundation'. The Court of Appeal's remitter orders remain but should be varied to delete the reference to reconsideration being in accordance with the Court of Appeal's judgments.
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