Hysan Development Co Ltd and Others v. Town Planning Board
Read the full judgment text of FACV 22/2015 on BabelCite. This FACV 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.
Cites 23 cases
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FACV Nos. 21 & 22 of 2015 FACV No. 21 of 2015 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 21 OF 2015 (CIVIL) (ON APPEAL FROM CACV NO. 232 OF 2012) ________________________
________________________ AND FACV No. 22 of 2015 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION FINAL APPEAL NO. 22 OF 2015 (CIVIL) (ON APPEAL FROM CACV NO. 233 OF 2012) ________________________
________________________ Before: Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Tang PJ, Mr Justice Fok PJ and Lord Neuberger of Abbotsbury NPJ Dates of Hearing: 5-6 September 2016 Date of Judgment: 26 September 2016 ________________________ J U D G M E N T ________________________ Chief Justice Ma: 1.I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Ribeiro PJ: 2.This appeal is concerned with the protection conferred by Article 6 and Article 105 of the Basic Law on private property rights in connection with planning restrictions laid down by the Town Planning Board (“the TPB” or “the Board”). It also falls to the Court to consider how the principle of proportionality is applied in that context. A. The proceedings in the courts below A.1 Hysan’s proceedings 3.The appellants in FACV 21 and 22 of 2015 are all companies in the Hysan Development Company Limited group and are collectively referred to in this judgment as “Hysan”. 4.Hysan owns extensive and substantial properties on various sites in Causeway Bay and Wanchai. It objected to a series of planning restrictions contained in two draft Outline Zoning Plans[1] (“OZPs”) gazetted by the Board. Those restrictions (to which the relevant sites had not previously been subjected) comprised:
5.The Board stated that the purpose of the NBAs, PHRs and setbacks was to facilitate air ventilation and pedestrian traffic flow in what are crowded and densely built-up areas. It rejected all of Hysan’s representations against the restrictions with the exception of agreeing to increase the BHR limit from 100 mPD to 130 mPD for one site. Hysan brought judicial review proceedings to challenge the Board’s decisions rejecting its representations. 6.At first instance, Reyes J[3] dismissed Hysan’s application save in respect of its challenge to the imposition of a 5m NBA in one location. Hysan’s appeal was allowed by the Court of Appeal[4] on various administrative law grounds.[5] It granted Orders of Certiorari quashing the Board’s decisions and Orders of Mandamus directing it to reconsider its decisions in accordance with the Court of Appeal’s decision. A.2 OGL’s proceedings 7.Oriental Generation Limited (“OGL”) intended to redevelop a site occupied by dilapidated buildings known as Kai Tak Mansion, having entered into agreements to purchase over 80% of the undivided shares held by owners of units in those buildings. OGL submitted to the Building Authority building plans for two towers with a height of 203 mPD which were consistent with the OZP then applicable. However, the Building Authority rejected those plans because they were inconsistent with draft OZPs[6] gazetted by the TPB shortly afterwards imposing three new restrictions which comprised:
8.In judicial review proceedings before Reyes J,[7] OGL succeeded in having the three new restrictions quashed on the ground that they were arbitrary. The Court of Appeal dismissed the Board’s appeal.[8] B. The issues on this Appeal 9.Hysan and OGL had both unsuccessfully contended below that the planning restrictions represented a disproportionate and therefore unconstitutional infringement of their property rights in contravention of Articles 6 and 105 of the Basic Law. Although they had succeeded in having the TPB’s decisions quashed on traditional judicial review grounds, they sought leave to appeal to this Court on the constitutional issues with a view to ensuring that, when reconsidering its decisions regarding the restrictions, the Board would have the guidance of this Court’s judgment as to the relevance and application of Articles 6 and 105. 10.On 18 November 2015, the Appeal Committee[9] granted Hysan leave to appeal on the following question:[10]
11.OGL was granted leave to intervene in Hysan’s appeal to enable it to be heard on the aforesaid question which is also relevant to OGL’s remitter. 12.The questions which fall to be answered on this Appeal are therefore as follows:
C. The Basic Law Articles concerned 13.Article 6 states:
14.Article 105 (so far as presently relevant) is in the following terms:
15.Article 7 has also been cited. It provides:
D. Are Articles 6 and 105 engaged? D.1 Reyes J’s approach 16.In Hysan’s case,[12] Reyes J understood Hysan to be contending that the planning restrictions “constitute a deprivation of property” in violation of Articles 6 and 105 on the basis that the restrictions “would have a negative impact of billions of dollars on the value of those sites”.[13] He held in effect that Articles 6 and 105 were not engaged, stating:
17.While this was said in relation to “deprivation”, the point, if valid, would be equally applicable to “restriction of use”. The proposition is that statutory planning restrictions inherently form part of the property rights acquired by the landowner so that such restrictions, whenever imposed, do not (“without more”) infringe Articles 6 and 105. D.2 The Court of Appeal’s approach 18.In Hysan’s appeal,[15] the Court of Appeal recognized that property rights of landowners are not absolute[16] and that the protection conferred by Article 105 extends beyond cases of deprivation without compensation to cover the rights of individuals to acquire, use, dispose of and inherit property.[17] However, it held that Articles 6 and 105 were not engaged in the context of the Board’s planning restrictions. 19.The Court interpreted the words “in accordance with law” in Articles 6 and 105 as qualifying or restricting the protection conferred so that such protection “is only to the extent that such acquisition, use, disposal and inheritance is ‘in accordance with law’”.[18] Thus, in distinguishing the case-law of the ECtHR on A1P1, the Court of Appeal stated:
20.The proposition is therefore that the words “in accordance with law” limit the protection conferred by Articles 6 and 105 exclusively to a requirement that property rights be protected by legally certain and accessible laws. 21.The Court of Appeal, echoing Reyes J in Hysan’s case, proceeded additionally to decide that the protections conferred by Articles 6 and 105 are not engaged in respect of planning restrictions imposed on Hysan and OGL because their rights as property owners are intrinsically defined by and subject to legal restrictions, including the power of the Board to impose such planning restrictions, as incidents of their ownership in accordance with the general law, so that the restrictions whenever imposed do not represent incursions into constitutionally guaranteed rights and thus do not need to be justified. 22.It cited in support Fine Tower Associates Ltd v Town Planning Board,[21]where Stock JA said, in the context of rejecting a deprivation claim:
23.By way of elaboration, the Court in the Hysan appeal added:[22]
D.3 The parties’ submissions on whether the Articles are engaged 24.Lord Pannick QC appearing for the Board,[24] supports the Court of Appeal’s conclusion. He submits that Article 105 is merely “a continuity provision” aimed at preserving Hong Kong’s capitalist economy and, like the Court of Appeal, lays emphasis on the words “in accordance with law”. Indeed, Counsel accepts that if that phrase had been absent, there would be no basis for contending that Articles 6 and 105 are not engaged. 25.The Board’s submission is thus that the protection of property rights conferred by the Articles is limited to a requirement that such rights be protected by legally certain provisions. The point as put in the Board’s printed case is that Article 105 only:
26.In aid of that interpretation, Lord Pannick QC points out that Article 105 is not in Chapter III of the Basic Law dealing with Fundamental Rights; that under Article 7, the HKSAR retains responsibility for the “management, use and development” of land in Hong Kong; and that no provision is made for compensation for interference with land short of expropriation. 27.Mr Benjamin Yu SC,[26] on the other hand, asserts that Articles 6 and 105 are self-evidently engaged and seeks to refute the arguments in support relied on by the Board. Mr Nigel Pleming QC,[27] adopts Mr Yu SC’s submissions on this point. D.4 Conclusions as to engagement of Articles 6 and 105 28.In my view, Articles 6 and 105 are plainly engaged and the Court of Appeal fell into error in holding otherwise. D.4a “In accordance with law” 29.The central feature of Articles 6 and 105 is that they impose an obligation on the HKSAR to protect private property rights. Thus, Article 6 states that “The Hong Kong Special Administrative Region shall protect the right of private ownership of property...” And Article 105 expands on the obligation, stating: “The Hong Kong Special Administrative Region shall ... protect the right of individuals and legal persons to the acquisition, use, disposal and inheritance of property and their right to compensation for lawful deprivation of their property.” 30.Articles 6 and 105 stipulate that the obligation is to be discharged by providing such protection “in accordance with law”. That phrase and similar phrases such as “prescribed by law” and “according to law”, appear in numerous Articles of the Basic Law and the Bill of Rights. It is well-established that they mandate the principle of legal certainty, requiring the subject-matter of the Article to be regulated by laws which are accessible and precisely defined.[28] It follows that the phrase introduces another aspect of protection: Property rights are to be guaranteed by clear and accessible laws, and not, for instance, left to uncharted administrative discretion. 31.In many other Articles of the Basic Law, the phrase functions in the same way, stipulating a requirement for legally certain means for protecting rights and freedoms. To take just one example, Article 4 provides:
This appears alongside Article 6 in Chapter I which lays down General Principles. It obliges the HKSAR to safeguard a broad spectrum of rights and freedoms in clear and accessible terms. 32.I can therefore see no basis for reading the words “in accordance with law” as qualifying or limiting the protection conferred by Articles 6 and 105. Such an interpretation of the Articles in effect involves the unwarranted insertion of the word “only” before the phrase in question. Far from diminishing the protection of those Articles, the phrase confers the added protection of legal certainty. 33.The ancillary points relied on by the Board do not impair this conclusion. Whether a Basic Law provision confers constitutional protection on any rights depends on its proper interpretation and not merely on the Chapter heading of the section in which it is located. Articles 6 and 105 expressly confer protection on private property rights and it is nothing to the point that they are not located in Chapter III dealing with Fundamental Rights. Various Articles conferring guaranteed rights can be found in other Chapters. For instance, the important constitutional rights to a fair trial and to the presumption of innocence are found in Article 87 in Chapter IV, Section 4 which deals with the Judiciary. And Article 121 conferring protection on land leases is found in Chapter V, Section 2. Article 105 is likewise found in Chapter V.[29] 34.Contrary to the view taken by the Court of Appeal in Fine Tower Associates Ltd v Town Planning Board,[30]Article 7 does not bear on the question of whether Articles 6 and 105 are engaged. It lays down the general principle that land and natural resources in the HKSAR are State property and allocates the responsibility and revenue from their management, use, development and leasing, etc, to the HKSAR Government. Where the Government leases or grants land to some person, Article 6 plays the complementary role of guaranteeing protection of the private property rights acquired. 35.Neither does the fact that Article 105 makes no provision for compensation for interference with land short of expropriation have any present relevance. Conferment of a right to compensation in deprivation cases does not diminish the protection conferred against other forms of interference with the right to acquire, use, dispose of and inherit property. D.4b Intrinsic restrictions 36.The Board’s other argument,[31] which I also do not accept, is that Hysan’s and OGL’s property rights do not attract the protection of Articles 6 and 105 against planning restrictions because their rights are intrinsically subject to the imposition of such constraints so that the restrictions should not be regarded as encroachments on rights guaranteed by those Articles. 37.In the present case, the developers’ challenge is not to the constitutionality of the TPO itself. The challenge is to the Board’s decisions taken in the purported exercise of statutory powers conferred by that Ordinance. The restrictions complained of are new, constraining the use by Hysan and OGL of the land in ways which did not previously apply while the sites were in their ownership. In these circumstances, I do not accept that the more restrictive BHRs, PHRs, NBAs, setbacks and building gap imposed by the Board can be disregarded as mere incidents of ownership which do not engage the Articles 6 and 105 rights. 38.An argument similar to the Board’s was not accepted by the ECtHR in JA Pye (Oxford) Ltd v United Kingdom.[32] The Chamber rejected the suggestion that loss of the applicant’s land to a neighbouring land owner by adverse possession was merely an incident of the land’s ownership so that A1P1 was not engaged. It stated:
39.This was upheld by the Grand Chamber:
40.A fortiori, in cases like the present, the fact that the statutory power to impose planning restrictions existed prior to the owner’s acquisition of the site does not mean that new and more intrusive constraints imposed by a TPB decision made after the land’s acquisition can be disregarded as mere incidents of ownership so as to exclude the protection of Articles 6 and 105. Interference with the owners’ protected rights occurs when the new restrictions take effect, derogating from those rights and thus engaging those Articles. 41.I should however make it clear that I am not excluding the possibility that it may in law be open to an owner to raise constitutional objections based on Articles 6 and 105 in respect of planning restrictions which were in place prior to his acquisition of the land. I wish to leave open such an argument since a similar question was the subject of disagreement in the House of Lords in Wilson v First County Trust Ltd (No 2).[36] There, the issue was whether A1P1 was engaged when a contract of loan made on the security of a car pawned to a pawnbroker was rendered unenforceable by a provision in the English Consumer Credit Act 1974. Lord Hope of Craighead,[37] Lord Hobhouse of Woodborough[38] and Lord Scott of Foscote[39] held that it was not engaged since the Act had invalidated the contract from the outset so that no existing contractual right had been interfered with when the Act operated to make the transaction unenforceable. Lord Nicholls of Birkenhead disagreed, stating:
42.The present discussion relates only to challenges made to decisions taken by an executive authority pursuant to statutory machinery, not involving a challenge to the constitutionality of the empowering statute itself. Different types of legislation may give rise to different forms of interference having differing impacts upon property rights. I wish also to leave open the question whether, and if so, in what way Articles 6 and 105 are engaged on a challenge to the constitutionality of such legislation. E. Must the restrictions be subjected to a proportionality analysis? E.1 A criterion for assessing derogations from constitutional rights 43.This Court has recognized that certain constitutionally guaranteed rights, such as the prohibition against torture and cruel, inhuman or degrading treatment or punishment,[41] are absolute and that in such cases, there is no room for any proportionality analysis.[42] 44.Where the guaranteed right is not absolute, the law may validly create restrictions limiting such rights.[43] It is for the Court to determine the permissible extent of those restrictions and it does so by a process referred to as a proportionality analysis. 45.That lawful limitations of guaranteed rights may validly be created is acknowledged by Article 39 of the Basic Law which states:
46.Article 39(2) therefore makes it clear (although stating it in negative terms) that such restrictions are permissible but that they must be “prescribed by law”, satisfying the requirement of legal certainty, and must be consistent with the provisions of the specified international instruments as implemented through the laws of the HKSAR. Thus, certain limits are placed on the nature and extent of permissible restrictions by provisions of the Bill of Rights contained in the Bill of Rights Ordinance[44] which implements the International Covenant on Civil and Political Rights in Hong Kong law. 47.Leung Kwok Hung v HKSAR[45] provides an example. This was a case involving a challenge to the constitutionality of a statutory scheme giving powers to the Commissioner of Police to regulate public processions on the basis that the scheme violated the right of peaceful assembly guaranteed by Article 27 of the Basic Law[46] and Article 17 of the Bill of Rights. 48.Article 17 states:
49.It was held that in accordance with Article 39(2), the right to peaceful assembly both under the Basic Law and the Bill of Rights could be subjected to restrictions provided that two requirements were satisfied: (i) that the restriction must be prescribed by law and (ii) that it must be necessary in a democratic society, with the aim of protecting national security or public safety, etc.[47] The requirement that the measure be “necessary in a democratic society” was interpreted to require application of a proportionality test[48] and the purposes specified (ie, the protection of national security, etc) were held to represent an exhaustive list of the permissible aims of any limitation of the right.[49] 50.Where the constitutional right invoked is not absolute but no express guidance is given by the Basic Law or Bill of Rights as to the allowable limits of derogations from that right, principles have been evolved by the courts as to how the proportionality analysis is to be applied, drawing heavily on the jurisprudence of other jurisdictions.[50] 51.Thus, in HKSAR v Lam Kwong Wai,[51] a reverse onus provision regarding the offence of possession of an imitation firearm was challenged as violating the guarantee of the presumption of innocence in Article 87(2) of the Basic Law[52] and Article 11(1) of the Bill of Rights.[53] Neither of those Articles contains any express provisions regarding inroads into the protected right. Sir Anthony Mason NPJ, writing for the Court, explained the approach to proportionality in the following terms:[54]
E.2 A structured, three-step inquiry 52.In subsequent authorities, after a finding that the invoked right is engaged, the two questions referred to by Sir Anthony Mason NPJ have tended to be expressed as a three-step inquiry. Thus, in Mok Charles v Tam Wai Ho,[55] Ma CJ formulated the approach as follows:
53.In their joint judgment in Official Receiver v Zhi Charles,[56] Fok PJ and Stock NPJ summarised the position as follows:
E.3 Proportionality in the present case 54.In the light of the foregoing, it is clear that a proportionality analysis of the planning restrictions is required in the present case. The right of private property guaranteed by Articles 6 and 105 is engaged. They are Articles which make no express provision regarding permissible restrictions so that the existing approach is for the Court to undertake a three-step inquiry asking (i) whether those restrictions pursue a legitimate aim; (ii) whether they are rationally connected with achieving that aim; and (iii) whether they represent a proportionate means of achieving that end. As discussed below, there is also substantial authority for including a fourth step which involves (iv) weighing the detrimental impact of the restrictions against the social benefit gained. 55.The first two stages of the inquiry have attracted little discussion in the present case. Hysan and OGL have tended to assume (without conceding) that the planning restrictions do pursue a legitimate aim and that they are rationally connected thereto. They are right to do so. There is no suggestion that the Board was acting other than in good faith in the discharge of its duties under the TPO. Its decisions have been successfully challenged on administrative law grounds, but it cannot be suggested that the objectives of lawfully imposed planning restrictions would not provide a legitimate basis for derogating from property rights. The purposes of such restrictions are stated in section 3 of TPO which identifies the Board’s function as the exercise of its town planning powers “with a view to the promotion of the health, safety, convenience and general welfare of the community” which obviously involve legitimate aims. The present planning restrictions aimed at facilitating air ventilation and pedestrian flow and at setting appropriate building heights, if properly arrived at, would clearly have been rationally connected to achieving those objectives. F. Assessing proportionality 56.It is at the third stage of the inquiry, assessing the proportionality of the impugned measure in relation to the legitimate aim, that issue has been joined. It is at that stage that different standards have been evolved by the courts. However, before embarking upon an examination of the different standards, it is appropriate to examine the nature of the structured approach to the assessment and to consider whether it should comprise a three or four-step inquiry. F.1 The adoption of a structured approach in Hong Kong 57.The first case on the Hong Kong Bill of Rights to reach the Privy Council was Attorney-General of Hong Kong v Lee Kwong-kut,[57] which concerned the presumption of innocence and certain reverse onus provisions. It was submitted by counsel that the structured proportionality approach of Dickson CJ in the Canadian Supreme Court in R v Oakes[58] (to which I shall return) should be endorsed. However, Lord Woolf, delivering the Privy Council’s advice, considered it “not necessary, at least in the vast majority of cases, to follow the somewhat complex process”[59] Dickson CJ had adopted. Instead, the Privy Council opted for a broad concept of “reasonableness”, holding that the Court should simply ask itself “whether, under the provision in question, the prosecution is required to prove the important elements of the offence; while the defendant is reasonably given the burden of establishing a proviso or an exemption or the like”[60] and if so, hold that no contravention has occurred. 58.That approach did not take root. In the next (and last) Hong Kong Bill of Rights case to get to the Privy Council, Ming Pao Newspapers Ltd v AG of Hong Kong,[61] Lord Jauncey of Tullichettle who delivered the advice, turned to the ECtHR’s jurisprudence and approved the proposition that “[any] restrictions on the guaranteed right of freedom of expression must be proportionate to the aims sought to be achieved thereby”,[62] noting that “[the ECtHR] accepts that contracting states enjoy a margin of appreciation in determining what is necessary to achieve a legitimate aim.”[63] The Privy Council proceeded to employ a proportionality analysis[64] and concluded that the enactment “cannot be described as ‘so unreasonable as to be outside the state’s margin of appreciation’” adding that their Lordships thought the legislator’s decision “eminently sensible and by no means disproportionate to the important objectives sought to be achieved”.[65] As we have seen, in subsequent cases in the HKSAR,[66] a three-step proportionality analysis has generally been adopted. 59.It is quite understandable that the more structured proportionality approach – what Baroness Hale of Richmond DPSC called “an orderly process of decision-making”[67] – should have been preferred over the relatively amorphous standard of reasonableness. In Bank Mellat v Her Majesty’s Treasury (No 2),[68] (where a four-step approach was adopted) Lord Reed JSC explained why:
60.However, the point to emphasise is that the three (or four) distinct elements of the analysis cannot be treated as existing in isolated airtight compartments, unaffected by each other. Recent authority has highlighted the fluidity and flexibility of the proportionality concept and the fact that its elements are conceptually inter-related and inter-dependent. As Lord Sumption JSC noted in the Bank Mellat case:
61.His Lordship described his approach to proportionality as one which:
62.Lord Sumption JSC accepted that the four requirements are logically separate, but reiterated that “in practice they inevitably overlap because the same facts are likely to be relevant to more than one of them.” He pointed out that “... in the normal case where the effectiveness of the measure and the degree of interference are not absolute values but questions of degree”, those two elements are “inversely related to each other”. In other words, “The question is whether a less intrusive measure could have been used without unacceptably compromising the objective.”[71] 63.In Pham v Secretary of State for the Home Department (Open Society Justice Initiative Intervening),[72] his Lordship further underscored the inter-relationship among elements of the analysis, showing that the importance of the right encroached upon influences the substance of the proportionality assessment:
F.2 Three-step and four-step approaches 64.The tendency of the Hong Kong courts to adopt a three-step approach to proportionality is in line with the influential 1999 judgment of Lord Clyde in de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing,[73] where his Lordship stated a test which asks:
65.However, a substantial body of authority exists for adding a fourth step, as exemplified by Lord Sumption JSC’s judgment in the Bank Mellat case cited above.[74] Indeed, in common law jurisprudence, a four-step approach can be found dating back to the important judgment in 1986 of Dickson CJ in R v Oakes[75] dealing with proportionality in the context of section 1 of the Canadian Charter of Rights and Freedoms.[76] Section 1 limits derogations from guaranteed rights to those which “can be demonstrably justified in a free and democratic society”. Dickson CJ held that for such justification to be shown, the objective of the restriction had to be of sufficient importance to warrant overriding the guaranteed right; that the means chosen had to be proportionate, balancing the interests of society and individuals or groups; and that such means had to be rationally connected to the objective and such as to impair the constitutional right “as little as possible”. His Honour added that “there must be a proportionality between the effects of the measures which are responsible for limiting the Charter right or freedom, and the objective which has been identified as of ‘sufficient importance’”.[77] As McLachlin J explained in RJR-Macdonald Inc v The Attorney General of Canada,[78] the final stage of the proportionality analysis involves “balancing the negative effects of the infringement of rights against the positive benefits associated with the legislative goal”. And as her Honour there pointed out, it is only necessary to consider this fourth step if the first three requirements of legitimate aim, rational connection and minimal impairment are satisfied. 66.In Huang v Secretary of State for the Home Department,[79] Lord Bingham of Cornhill accepted counsel’s submission that the decision in de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing,[80] was deficient in omitting reference to the fourth step. Referring to “the overriding requirement” in Dickson CJ’s judgment in R v Oakes, his Lordship stated:
67.A four-step approach appears now to be generally accepted in the United Kingdom.[82] As Lord Reed JSC puts it in the Bank Mellat case:[83] “... the question at step four is whether the impact of the rights infringement is disproportionate to the likely benefit of the impugned measure.” And as Baroness Hale of Richmond DPSC states in R (Lord Carlile of Berriew) v Secretary of State for the Home Department,[84] the fourth question “can be encapsulated as ‘do the ends justify the means’?” 68.The fourth stage inquiry has also featured prominently in Strasbourg and UK jurisprudence by reference to a concept of “fair balance” in cases on A1P1.[85] I should interject (since it is a matter raised in the question on which leave to appeal was granted) that, subject to the usual need to pay careful attention to any differences that may arise from the language of A1P1 and the context of decisions on that Article, A1P1 jurisprudence is generally of assistance when the protection of property rights comes to be considered. 69.It should be noted that “fair balance” is used in more than one sense in the case-law. It is often said generally to be an objective inherent in the whole of the ECHR[86] and in some A1P1 cases, “fair balance” has been equated with a standard of reasonable necessity in applying a proportionality test.[87] But relevantly for present purposes, “fair balance” has been given a meaning reflecting a fourth step which mandates striking a fair balance “between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights”.[88] In particular, it has been held that:
F.3 Should Hong Kong adopt a four-step inquiry? 70.As we have seen, Lord Sumption JSC noted in Bank Mellat v Her Majesty’s Treasury (No 2),[90] that the elements of the four-step analysis inevitably overlap. There is force in the argument that where a measure has passed the tests set at the first three stages – it pursues a legitimate aim, is rationally connected thereto and is no more than necessary to achieve that aim (a standard which is further discussed below) – such a measure could be expected to reflect a reasonable balance between the general interest of the community and protection of the individual’s fundamental rights. One might therefore doubt the need for the additional step. 71.In Alberta v Hutterian Brethren of Wilson Colony[91] in the Canadian Supreme Court, that issue was addressed by McLachlin CJ:
72.Lord Reed JSC commented:
73.In my view, the case for accepting in principle the applicability of a fourth step in the proportionality analysis is logically compelling although in the great majority of cases, its application would not invalidate a restriction which has satisfied the requirements of the first three stages of the inquiry. One would hope and expect that most laws and governmental decisions at the sub-constitutional level internally reflect a reasonable balance between the public interest pursued by such laws and the rights of individuals or groups negatively affected by those laws. In such cases, where the law passes the first three tests, it would be unlikely to fail the test of proportionality “stricto sensu” (in the narrow, overall sense) at the fourth stage. But one may exceptionally be faced with a law whose content is such that its application produces extremely unbalanced and unfair results, oppressively imposing excessive burdens on the individuals affected. 74.In his book Proportionality - Constitutional Rights and their Limitations,[93]Professor Aharon Barak, the former President of the Supreme Court of Israel, provides some examples[94] and refers to a hypothetical instance given by Professor Dieter Grimm[95] which illustrates the nature of the test and its potentially moral content as well as its importance:
75.As Professor Grimm points out (referring to what I have been calling the “fourth step” as the “third step”):
76.The fourth step therefore requires the Court to examine the overall impact of the impugned measure and to decide whether a fair balance has been struck between the general interest and the individual rights intruded upon, the requirement of such a fair balance being inherent in the protection of fundamental rights.[98] As the ECtHR pointed out in the context of the ECHR in Soering v United Kingdom[99]:
77.Although this Court has not explored in detail the appropriateness of adding a fourth step, it has on several occasions referred to the need to balance the general interest of the community against the rights of the individual encroached upon. Thus, Leung Kwok Hung v HKSAR,[100] the majority held that in applying a proportionality test, “a proper balance is struck between the interests of society on the one hand and the individual’s right of peaceful assembly on the other.” Similarly, in Koon Wing Yee v Insider Dealing Tribunal (2008),[101] a case concerning the privilege against self-incrimination, Sir Anthony Mason NPJ acknowledged “... the need for a fair balance between the general interest of the community and the personal rights of the individual”, citing Sporrong and Lonnroth v Sweden,[102] a leading case on A1P1, in which the ECtHR endorsed a fourth step test,[103] holding that the Swedish measures had upset the fair balance in that they had caused the applicants to bear “an individual and excessive burden”. His Lordship went on to contrast the case at hand with other cases where it had been held “that the legislation struck a fair balance between protection of an individual’s rights and the public interest...”[104] And in A v Commissioner of Independent Commission Against Corruption,[105] another self-incrimination case, the impugned measure was held to represent “a fair balance between the public interest in realising the legitimate aim of suppressing corruption and protection of the fundamental rights of the individual.” 78.While in the great majority of cases the result arrived at after undertaking the first three inquiries is unlikely to be changed by it, a four-step analysis should, in my view, be explicitly adopted in Hong Kong. Without its inclusion, the proportionality assessment would be confined to gauging the incursion in relation to its aim. The balancing of societal and individual interests against each other which lies at the heart of any system for the protection of human rights would not be addressed. This requires the Court to make a value judgment as to whether the impugned law or governmental decision, despite having satisfied the first three requirements, operates on particular individuals with such oppressive unfairness that it cannot be regarded as a proportionate means of achieving the legitimate aim in question. But that should not cause the Court to shy away from the fourth question since such a value judgment is inherent in the proportionality analysis. As Lord Nicholls of Birkenhead noted in Wilson v First County Trust Ltd (No 2):[106]
79.And as Lord Reed JSC pointed out in Bank Mellat:
80.I hasten to add that in holding that a fourth step should be added, I must not be taken to be casting doubt on the correctness of any previous decision involving a three-step assessment. G. What standards should the Court adopt in assessing proportionality? 81.I turn then to the standards applicable at the third stage of the inquiry. Assuming that the Court has found that the impugned measures advance an aim that is legitimate and that they are rationally connected to achieving that aim, what standard (or standards) should it apply in deciding whether those measures are a proportionate means of achieving that aim? How does the Court decide that a particular measure encroaches upon a guaranteed right to an unacceptable extent in promoting a legitimate aim, rendering that measure unconstitutional? 82.The parties have championed two main standards. Hysan and OGL advocate the Court’s adoption of a “no more than necessary” standard while the Board argues for a “manifestly without reasonable foundation” standard. G.1 “No more than necessary” – a standard of reasonable necessity 83.As we have seen, in adopting the proportionality principle, the Hong Kong courts have referred to the third stage of the inquiry as posing the question whether the encroaching measure is “no more than necessary” for advancing the legitimate aim espoused. That is a natural way of expressing the test since it reflects the essential purpose of the exercise: the Court’s endeavour to accommodate acceptable limitations of constitutional rights in the pursuit of a legitimate societal interest while preserving to the maximum extent the guarantees laid down in the constitution. However, the words “no more than necessary” do not lay down a strict, bright line test. They lay down a test of reasonable, not strict, necessity. 84.Thus, in an A1P1 deprivation case, the ECtHR in James v United Kingdom,[108] held that there must be “a reasonable relationship of proportionality between the means employed and the aim sought to be realised”. It rejected the applicants’ argument that “only if there was no other less drastic remedy for the perceived injustice that the extreme remedy of expropriation could satisfy the requirements of Article 1”, commenting:
85.The element of reasonableness was emphasised by McLachlin J in RJR-Macdonald Inc v The Attorney General of Canada”:[109]
86.In the United Kingdom, as explained by Lord Sumption JSC, the Court adopts a standard relative to the objective pursued, asking “whether a less intrusive measure could have been used without unacceptably compromising the objective”.[110] His Lordship also pointed out that the standard operates in relation to rights viewed as on a “sliding scale” in which “the cogency of the justification required for interfering with a right will be proportionate to its perceived importance and the extent of the interference”.[111] The test is one of reasonableness:
87.In Hong Kong, in Fok Chun Wa v Hospital Authority,[113] Ma CJ recognized that a strict necessity test would cause problems in practice, citing Blackmun J who pointed out:[114]
88.That the test in Hong Kong is one of reasonable necessity was reiterated in Official Receiver v Zhi Charles,[115] a case involving the freedom to travel, where reference was made to the RJR-Macdonald Inc case and Fok PJ and Stock NPJ stated that a minimal impairment test did not mean “that the restriction must be the very least intrusive method of securing the objective which might be imagined or devised”. G.2 “Manifestly without reasonable foundation” G.2a A concept linked to the margin of appreciation 89.The phrase “manifestly without reasonable foundation” is familiar in the jurisprudence of the ECtHR. It is closely related to the concept of “margin of appreciation”. The Strasbourg Court being a supra-national Court, recognizes that in some cases, it is appropriate to regard the national courts of Member States[116] as being better placed to assess the legitimacy and importance of national policy objectives and to determine what encroachments on Convention rights are acceptable as the means of advancing those aims. In such cases, the ECtHR has afforded Member States a wide margin of appreciation and has not regarded encroaching legal measures as disproportionate unless they could be said to be “manifestly without reasonable foundation”. 90.In Buckley v United Kingdom,[117] the ECtHR acknowledged that the scope of the margin of appreciation will vary according to the context, and that relevant factors include the nature of the Convention right, its importance for the individual and the nature of the activities concerned. 91.The ECtHR has, for example, afforded a wide margin of appreciation and adopted a “manifestly without reasonable foundation” threshold in cases involving a Member State’s political and socio-economic policies. Thus, in James v United Kingdom,[118] a case concerned with leasehold enfranchisement legislation which the applicants claimed violated A1P1, the Court stated:
92.In Lithgow v United Kingdom,[119] the Court explained its approach:
93.Accordingly, in such cases, the Member State enjoys a broad margin of appreciation:
94.It is relevant to note that the ECtHR has placed town planning decisions within this category. Thus, in Sporrong and Lonnroth v Sweden,[121] the Court:
95.This has become accepted doctrine, as the Court indicated in Phocas v France:[122]
96.The “manifest” standard has also been adopted in the United Kingdom. Thus, in R (Carson) v Secretary of State for Work and Pensions,[123] referring to the standard as marking out “the appropriate intensity of scrutiny” Lord Walker of Gestingthorpe held that withholding of cost of living increases from certain welfare recipients was not manifestly without reasonable foundation. Similarly, in R (SG and Others) Secretary of State for Work and Pensions (Child Poverty Action Group Intervening),[124] Lord Reed JSC applied the “manifest” standard where the question of proportionality involved “controversial issues of social and economic policy, with major implications for public expenditure”, the determination of such issues being regarded as “pre-eminently the function of democratically elected institutions”. G.2b The “manifest” threshold and margin of discretion in domestic cases 97.Obviously, some matters of concern to the Strasbourg Court, such as the relationship between itself as a supra-national court and Member States with differing political and socio-economic policies, have no relevance to issues in a domestic court. 98.Nonetheless, it is well-recognized that parallel considerations arise in a domestic context where the court is determining the proportionality of a measure taken by the legislature or executive. In R v Director of Public Prosecutions, Ex p Kebilene,[125] Lord Hope of Craighead, referring to the need for domestic courts to decide Convention-based questions involving issues of proportionality, stated:
99.Objection has been taken to the suggestion of “deference” by the judiciary partly because (as Lord Sumption JSC puts it) of “overtones of cringing abstention in the face of superior status”[126] conveyed by that word and, more substantially, because it is the Court and not the legislative and executive authorities that is “the ultimate arbiter of the appropriate balance between two incommensurate values: the Convention rights engaged and the interests of the community relied on to justify interfering with it.”[127] I agree that it would be better to use different terminology to describe the demarcation of functions between the judiciary and the other branches of government,[128] but, as Ma CJ has noted, the expression used is not of prime significance. The important consideration is the need in this context to recognize the different constitutional roles of the judiciary on the one hand and the legislative and executive authorities on the other.[129] G.2c Margin of discretion in Hong Kong 100.Along with domestic courts in the UK, this Court has recognized the existence of a domestic doctrine similar to that of the margin of appreciation at the supra-national level which I shall refer to as “the margin of discretion”.[130] It did so, for instance, in Lau Cheong v HKSAR,[131] a case in which particular weight was given to the legislature’s decision to impose a mandatory sentence of life imprisonment for murder, holding this not to be “manifestly disproportionate”.[132] And in HKSAR v Lam Kwong Wai,[133] Sir Anthony Mason NPJ commented:
101.A prominent example of this Court affording the government a wide margin of discretion and linking this to a “manifestly without reasonable foundation” standard for intervention is Fok Chun Wa v Hospital Authority,[134] where the applicants alleged that charging Mainland women married to Hong Kong residents higher obstetrics fees was discriminatory in violation of Article 25 of the Basic Law and Article 22 of the Bill of Rights. Ma CJ, with whom the other members of the Court agreed, noted how the ECtHR doctrine had been taken up in cases like ex p Kebilene and then in the Hong Kong courts; and how that doctrine was particularly relevant to challenges to the government’s socio-economic policies, especially involving the allocation of limited public resources. His Lordship stated:[135]
102.In summarising the position “[in] the socio-economic context, where policy considerations are best left to the executive, legislative and other authority”, Ma CJ formulated the “manifest” standard as follows:
103.A second prominent example is to be found in Kong Yunming v Director of Social Welfare,[137] where the issue was whether the government’s imposition of a requirement of seven years’ residence in place of the single year originally required as a condition of eligibility for a basic welfare benefit violated the right to social welfare under Articles 36 and 145 of the Basic Law. Following Fok Chun Wah,the “manifestly without reasonable foundation” threshold for intervention was adopted in the following terms:
104.It was explained that this approach was linked to the ECtHR’s “margin of appreciation” adapted for application in our domestic context:
G.3 Factors relevant to choosing the basis for assessing the impugned planning restrictions 105.What principles should the Court apply in choosing between the competing standards? If it should become necessary for the Court to determine whether, after re-considering the developers’ objections, the Board has acted in accordance with their Article 6 and 105 rights, Hysan and OGL contend that the Court should ask whether the restrictions then imposed are no more than reasonably necessary to achieve the legitimate aims advocated. The Board, on the other hand, argues that in such eventuality, the Court ought only to intervene if satisfied that such restrictions are manifestly without reasonable foundation. 106.In principle, the choice of the standard for the Court’s intervention depends on the extent of the appropriate margin of discretion, determined by factors which affect the proportionality analysis in the circumstances of the particular case. In cases calling for a wide margin of discretion, the “manifest” threshold may well be apposite, whereas cases admitting of a narrow or no margin of discretion are more appropriately analysed on the basis of “reasonable necessity”. Which standard or threshold to choose therefore depends on the appropriate width of the margin. 107.As we have seen,[139] in the ECtHR context the scope of the margin of appreciation is held to vary according to the context with a number of factors being relevant. The same applies in domestic cases where such factors principally relate to (i) the significance of and degree of interference with the right in question; and (ii) the identity of the decision-maker as well as the nature and features of the encroaching measure relevant to setting the margin of discretion.[140] G.3a The significance of and extent of interference with the right 108.A theme of the foregoing discussion has been the inter-related and inter-dependent qualities of the various elements of a proportionality analysis. While there would be no point in attempting to construct a formal hierarchy of constitutional rights, a sliding scale has been recognized in which the cogency of the justification required for interfering with a particular right will be proportionate to the perceived importance of that right and the extent of the interference.[141] 109.The specific right invoked may have a low significance and the lower the significance, the broader the margin of discretion is likely to be. Thus, in Belfast City Council v Miss Behavin’ Ltd,[142] the applicant claimed that the city council’s refusal to licence use of premises as a sex shop selling pornography violated its right to free expression and its A1P1 property rights. Lord Hoffmann held as follows:
110.This was also the view of Lord Neuberger of Abbotsbury PSC:
111.In contrast, it has often been said that where a restriction is discriminatory on one of the “suspect grounds” (identified in Article 22 of the Bill of Rights[144]) there would have to be “very weighty” reasons justifying the incursion,[145] obviously resulting in a much narrower margin of discretion. 112.The extent of interference with the right is also obviously relevant. A relatively trivial interference will be much easier to justify. Thus, in Koon Wing Yee v Insider Dealing Tribunal,[146] a case about infringement of the privilege against self-incrimination, Sir Anthony Mason NPJ distinguished the case before the Court on the one hand from Brown v Stott,[147] and O’Halloran v United Kingdom,[148]on the other, pointing out that the encroachment in those cases was minor, consisting of the individual being compelled to answer “a single, simple question” whereas in Koon Wing Yee, the questions and compulsory answers were not so limited and constituted a substantial intrusion into the privilege.[149] 113.In some cases, the interference may be so great that neither proportionality analysis nor margin of discretion are meaningful concepts. In such cases, a violation of a right may be held to have occurred on the footing that the impugned measure has destroyed “the essence of the right”. For example, the right to marry guaranteed by Article 37 of the Basic Law and Article 19(2) of the Bill of Rights may validly be limited to some degree by rules relating to marriageable age, consanguinity and so forth. But a law which imposes a blanket prohibition against a certain individual (a post-operative transsexual person) marrying was held to destroy the essence of the right in her case and ruled unconstitutional.[150] G.3b The measure’s content and features relevant to the margin of discretion 114.The content and features of the impugned measure, the identity and constitutional role of its originator and any special competence possessed by such person, are likely to be highly relevant to deciding how wide the margin of discretion should be. 115.If assessment of the proportionality of the measure calls for the application of purely legal principles and an assessment which the Court is the expert to make, the primary decision-maker having no special competence or expertise, it is likely that the margin of discretion will have little role to play and that the Court will simply adopt a standard of reasonable necessity. 116.On the other hand, a decision-maker’s views resulting in the promulgation of the impugned measure may be given much weight and thus afforded a wide margin of discretion reflected by use of a “manifest” standard where the decision-maker is likely to be better placed than the Court to assess what is needed in the public interest.[151] The Court may for instance, be satisfied that he had special access to information; special expertise in its assessment; or an overview enabling him to assess competing and possibly prior claims for scarce resources.[152] The Court might also refrain from intervening because the measure reflects a predictive or judgmental decision which it was the institutional role of the decision-maker to take and as to which no single “right answer” exists.[153] 117.The Court is likely to take such an approach, for instance, in relation to matters touching on national security.[154] In Hong Kong there are, additionally, limitations placed on the Court’s role on questions touching on defence and foreign policy.[155] 118.A broad margin of discretion might also be mandated by separation of powers principles and recognition of the different institutional roles played by the Court and the relevant decision-maker. Thus, a wide margin of discretion may be permitted to the legislature in respect of enactments allocating public resources on the footing that such distributive decisions are properly the responsibility of the legislature for which it makes itself politically accountable, rather than for the courts on a constitutional review. A similar view was taken by this Court in Lau Cheong v HKSAR,[156] where the legislature’s decision to retain mandatory life imprisonment for murder, accompanied by statutory machinery for reviewing the prisoner’s incarceration, was regarded as a reflection of the separation of powers principle and a measure that could not be held to be manifestly disproportionate. G.4 The meaning of “manifestly without reasonable foundation” and the relationship between the two standards 119.It should be noted that the difference between the two standards is one of degree. Once it is recognized that the former threshold is a standard of reasonable necessity, it becomes clear that it is located on the same “reasonableness” spectrum as the standard which asks whether a measure is “manifestly without reasonable foundation”. That may be why that phrase is sometimes referred to in the authorities as a measure of the “intensity” of judicial scrutiny rather than as a “standard”. 120.In practice, where a wide margin of discretion exists, in applying the “manifest” standard, the Court will allow the decision-maker latitude to adopt one of a relatively wide range of possible alternatives in fashioning the impugned measure which encroaches upon the protected right. Assuming that such measure pursues a legitimate aim and is rationally connected to achieving that aim, the Court will not be astute to insist on a potentially less intrusive measure but will only intervene to strike down the impugned provision as unconstitutional if, as Ma CJ put it in Fok Chun Wa,[157] “the option chosen is clearly beyond the spectrum of reasonable options” to deal with the problem. 121.Where, on the other hand, the standard of reasonable necessity is applicable, the “minimal impairment” approach explained by McLachlin J in RJR-Macdonald Inc v The Attorney General of Canada”[158] is apposite. The legislative or executive authority must show that the measure impairs the right as little as reasonably possible in order to achieve the legislative objective: “If the law falls within a range of reasonable alternatives, the courts will not find it overbroad merely because they can conceive of an alternative which might better tailor objective to infringement”. On the other hand, if the authority “fails to explain why a significantly less intrusive and equally effective measure was not chosen” the measure may fail. In these cases, the acceptable range of reasonable alternatives will depend on the factual context but one would expect such range to be significantly narrower than where the “manifest” threshold is applied. 122.It is perhaps worth re-iterating that while for the purposes of elucidation, two differently named standards are referred to: “reasonable necessity” and “manifestly without reasonable foundation”, they indicate positions on a continuous spectrum rather than wholly independent concepts. 123.One further point to make on the meaning of “manifestly without reasonable foundation” is that one should not be misled into thinking that the word “manifestly” suggests that the Court may dispense with a close examination of the circumstances of the case in considering whether the threshold is met. As Lords Reed and Toulson JJSC stated in R (Lumsdon) v Legal Services Board,[159]
G.5 The factors to be applied in the present case 124.Looking to the future, there is some artificiality in the discussion since there are no extant decisions of the Board pending their re-consideration of representations made by Hysan and OGL. How a proportionality analysis, if necessary, would be approached would depend on what planning restrictions result from that process. What is stated here is therefore necessarily confined to remarks of a general nature. 125.In the present case, the developers’ rights as owners of the sites are obviously substantial and of high constitutional significance, reflecting the general principle of safeguarding private property rights guaranteed by the Basic Law. What the extent of interference to those rights may be after the Board reconsiders the developers’ case involves a question of fact to be examined in due course. 126.Leaving the factor of the extent of interference aside, the constitution and decision-making machinery of the Board as the originator of any potentially impugned planning restrictions would, in my view, strongly favour adoption of a broad margin of discretion near the “manifestly without reasonable foundation” end of the spectrum. As Reyes J pointed out in his OGL judgment,[160] “[p]lanning is a holistic process, involving balancing numerous factors”. Draft OZPs and individual planning restrictions are the product of a decision-making process carried out by machinery created by statute and designed to ensure consideration of competing views after consultation with the public and with the parties affected with the benefit of input from relevant experts. Planning decisions are made with entire districts, and not just the parties’ sites, in view. The system includes as part of its design, the possibility of an aggrieved party seeking administrative law remedies if material flaws occur in the way the Board arrives at its decisions, as occurred in the present cases. But if the statutory process is undertaken without judicially reviewable flaws, it is hard to see any reason for thinking that the planning restrictions imposed should be liable to be struck down as constitutionally invalid. As Lord Neuberger of Abbotsbury PSC noted in the Carlile case:[161]
127.And in Belfast City Council v Miss Behavin’ Ltd,[162] Lord Hoffman held that:
In like vein, his Lordship remarked:
128.The developers’ arguments raise similar questions. If, as in the present cases, planning restrictions are imposed which are arbitrary, based on inadequate inquiry or procedurally flawed, traditional judicial review remedies are available. But the developers’ proposition on this appeal is that even if the Board avoids falling into any error and decides on planning restrictions which are unimpeachable on traditional grounds, a basis ought nevertheless to exist for them to challenge those restrictions as disproportionate and unconstitutional. While I do not rule out the possibility of such an exceptional situation arising, like Lord Hoffmann, I find it difficult, at least in the abstract, to envisage the emergence of such a case. 129.I would therefore conclude that town planning restrictions, assuming them to be unassailable on traditional judicial review grounds would in general only be susceptible to constitutional review if the Court is satisfied that they are manifestly without reasonable foundation. 130.A final point might be mentioned by way of guidance to the Board. It should be emphasised that it is the Court which has the ultimate responsibility for determining whether any restriction imposed by the Board can be subjected to a successful constitutional challenge. The Board’s role is to carry out its duties and to exercise its powers in accordance with the TPO. To adapt what Lord Hoffmann said in R (SB) v Governors of Denbigh High School,[163] members of the TPB cannot be expected to make the Board’s planning decisions with textbooks on human rights law at their elbows. No doubt the Board will receive appropriate legal advice including advice regarding the property rights of others guaranteed by the Basic Law. But it is not the Board’s task to conduct a proportionality analysis, much less to mouth incantations about proportionality in rendering its decisions. H. Conclusions summarised 131.I would summarise the conclusions I have reached as follows. 132.Articles 6 and 105 are engaged in cases where it is factually established that planning restrictions imposed by the TPB encroach upon a landowner’s property rights. 133.Where such encroachment on the right is established, the extent, if any, of the encroaching measure’s validity is determined by a proportionality analysis. 134.In Hong Kong, such a proportionality assessment has been viewed as involving a three-step process of asking (i) whether the intrusive measure pursues a legitimate aim; (ii) if so, whether it is rationally connected with advancing that aim; and (iii) whether the measure is no more than necessary for that purpose. 135.A fourth step should be added. In line with a substantial body of authority, where an encroaching measure has passed the three-step test, the analysis should incorporate a fourth step asking whether a reasonable balance has been struck between the societal benefits of the encroachment and the inroads made into the constitutionally protected rights of the individual, asking in particular whether pursuit of the societal interest results in an unacceptably harsh burden on the individual. 136.At the third stage, assessing the permissible extent of the incursion into the protected right, two main standards have been applied. The first is the test of whether the intruding measure is “no more than necessary” to achieve the legitimate aim in question. This must be understood to be a test of reasonable necessity. If the Court is satisfied that a significantly less intrusive and equally effective measure is available, the impugned measure may be disallowed. 137.An alternative standard which may be applied at the third stage is one which asks whether the encroaching measure is “manifestly without reasonable foundation”, being a standard closely related to the concept of “margin of appreciation” in ECtHR jurisprudence. 138.At the supra-national level of the ECtHR, the margin of appreciation doctrine involves the recognition that on certain issues, the Court should allow Member State latitude to decide on the legitimacy of their societal aims and the means to achieve them since they are better placed to make the assessment. Similar considerations have led the Court at a domestic level to allow the legislative and executive authorities latitude or a “margin of discretion” to do the same, applying the “manifestly without reasonable foundation” standard in such cases. 139.The “manifest” standard has been used in cases where the Court recognizes that the originator of the impugned measure is better placed to assess the appropriate means to advance the legitimate aim espoused. This has occurred in cases involving implementation of the legislature’s or executive’s political, social or economic policies but the principle is not confined to such cases. 140.The location of the standard in the spectrum of reasonableness depends on many factors relating principally to the significance and degree of interference with the right; the identity of the decision-maker; and the nature and features of the encroaching measure relevant to setting the margin of discretion. 141.The difference between the two standards is one of degree, with the Court in both cases, scrutinising the circumstances of the case and the factual bases claimed for the incursion. 142.No extant planning restrictions fall to be considered since the Board is to reconsider its decisions. In general terms, where the Board reaches decisions which are not flawed on traditional judicially reviewable grounds, any imposed restrictions which encroach upon a landowner’s property rights should be subject to constitutional review applying the “manifestly without reasonable foundation” standard. It is considered to be highly unlikely that Board decisions imposing planning restrictions arrived at lawfully and in conformity with the principles of traditional judicial review, would be susceptible to constitutional review unless the measures are exceptionally unreasonable. I. Disposal of the appeal and costs 143.The Court of Appeal made orders directing the Board in each case to reconsider its decisions in accordance with the Court of Appeal’s judgment. The orders for remitter obviously remain. However, the orders should be varied to delete reference to such re-consideration being in accordance with the judgments of the Court of Appeal. 144.Given the nature of the issues and the conclusions that I have reached, I would make an order nisi that there be no order in respect of the costs of this appeal. I would direct that the parties have liberty, if so advised, to lodge written submissions as to costs within 21 days after delivery of this judgment and, in default of such submissions, that the order as to costs stand as an order absolute without further direction. Mr Justice Tang PJ: 145.I agree with the judgment of Mr Justice Ribeiro PJ. Mr Justice Fok PJ: 146.I agree with the judgment of Mr Justice Ribeiro PJ. Lord Neuberger of Abbotsbury NPJ: 147.I agree with the judgment of Mr Justice Ribeiro PJ. Chief Justice Ma: 148.For the above reasons, these appeals are determined in accordance with the orders set out in paragraphs 143 and 144 above.
Mr Benjamin Yu SC and Mr Alexander Stock SC, instructed by Mayer Brown JSM, for the Appellants Lord Pannick QC, Mr Jat Sew-Tong SC and Mr Abraham Chan, instructed by the Department of Justice, for the Respondent Mr Nigel Pleming QC, Ms Audrey Eu SC and Mr Jonathan Lee, instructed by Philip T F Wong & Co., for the Intervener [1] Draft Causeway Bay Outline Zoning Plan No. S/H6/15 and draft Wanchai Outline Zoning Plan No. S/H5/26. [2] In two cases, 200 mPD BHRs were laid down. [3] HCAL 38/2011 and HCAL 57/2011 heard together (14 September 2012). [4] Lam VP, Chu JA and Au J, CACV 232/2012 and CACV 233/2012 heard together (13 November 2014). [5] That the TPB had failed to discharge its duty to make proper inquiry referred to in Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014 at 1065; that it had taken into account irrelevant considerations; and that there had been procedural unfairness in the way it reached its decisions. [6] Draft Ngau Tau Kok and Kowloon Bay Outline Zoning Plans Nos S/K13/26 and S/K13/27, gazetted on 19 November 2010 and 7 October 2011 respectively. [7] HCAL 34/2012 (11 May 2012). [8] Lam VP, Barma JA and Poon J, CACV 127/2012 and CACV 129/2012 (13 November 2014). [9] Tang and Fok PJJ and Chan NPJ, FAMV 28, 29/2015 (Reasons 18 November 2015). [10] Leave was initially granted on a second question raised by the Board in relation to Reyes J’s quashing of the 5m NBA, but that appeal has since been withdrawn. [11] A1P1 provides as follows: “Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.” [12] A similar approach was taken in OGL’s case : see §§89 and 90. [13] Hysan Judgment at §§190 and 191. However, as Hysan pointed out in the Court of Appeal, its case has not been one of “deprivation”, but a complaint regarding a restriction on the use of its property: Court of Appeal at §45. [14] Hysan Judgment at §195. [15] OGL’s appeal does not require separate examination since the Court of Appeal there followed the decision handed down on the same day in the Hysan appeal on this point. [16] Hysan Court of Appeal at §56. [17] Ibid at §60. [18] Ibid. [19] Ibid at §82. [20] Ibid at §83. [21] [2008] 1 HKLRD 553 at §33. [22] Hysan Court of Appeal at §§61-62. [23] Town Planning Ordinance (Cap 131). [24] With Mr Jat Sew-tong SC and Mr Abraham Chan. [25] TPB’s printed case at §9(9). [26] Appearing with Mr Alexander Stock SC for Hysan. [27] Appearing for OGL with Ms Audrey Eu SC and Mr Jonathan Lee. [28] Shum Kwok Sher v HKSAR (2002) 5 HKCFAR 381 at §§62-65; Gurung Kesh Bahadur v Director of Immigration (2002) 5 HKCFAR 480 at §34; Mo Yuk Ping v HKSAR (2007) HKCFAR 386 at §§59 and 61. [29] Section 1: Public Finance, Monetary Affairs, Trade, Industry and Commerce. [30] [2008] 1 HKLRD 553 at §33. [31] See Sections D.1 and D.2 above, per Reyes J and the Court of Appeal, citing Fine Tower Associates Ltd v Town Planning Board [2008] 1 HKLRD 553 at §33. [32] (2008) 46 EHRR 45. [33] Ibid at §37. [34] Beyler v Italy (2001) 33 EHRR 52 at §106. [35] JA Pye (Oxford) Ltd v United Kingdom (2008) 46 EHRR 45 at §§61-63. [36] [2004] 1 AC 816. [37] Ibid, at §§106-107. [38] Ibid, at §137. [39] Ibid, at §168 [40] Ibid, at §41. [41] Basic Law, Article 28(2); Bill of Rights, Article 3. [42] Ubamaka v Secretary for Security (2012) 15 HKCFAR 743 at §§106-111; Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950 at §38. [43] Catholic Diocese of Hong Kong v Secretary for Justice (2011) 14 HKCFAR 754 at §65; Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950 at §38; Official Receiver v Zhi Charles (2015) 18 HKCFAR 467 at §22. [44] Cap 383. See Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §19 on implementation. [45] (2005) 8 HKCFAR 229. [46] “Hong Kong residents shall have freedom of speech, of the press and of publication; freedom of association, of assembly, of procession and of demonstration; and the right and freedom to form and join trade unions, and to strike.” [47] Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 at §§17 and 19. [48] Ibid at §§33-34. [49] Ibid at §35. [50] Including the ECtHR’s jurisprudence on the ECHR, the House of Lords and UK Supreme Court’s case-law on the United Kingdom’s Human Rights Act 1998 and the decisions of the Canadian Supreme Court. See HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 at §37. [51] (2006) 9 HKCFAR 574. [52] “Anyone who is lawfully arrested shall have the right to a fair trial by the judicial organs without delay and shall be presumed innocent until convicted by the judicial organs.” [53] “Everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law.” [54] (2006) 9 HKCFAR 574 at §40 [55] (2010) 13 HKCFAR 762 at §28. This was a case where a provision making the determination of the Court of First Instance on election petition matters final was challenged as a possible violation of Article 82 of the Basic Law which provides that the power of final adjudication shall be vested in the Court of Final Appeal. [56] (2015) 18 HKCFAR 467 at §§22-23; citing Mok Charles v Tam Wai Ho (2010) 13 HKCFAR 762 at §28; Catholic Diocese of Hong Kong v Secretary for Justice (2011) 14 HKCFAR 754 at §65; and Kong Yunming v Director of Social Welfare (2013) 16 HKCFAR 950 at §§39-40. [57] [1993] AC 951. [58] R v Oakes [1986] 1 SCR 103. [59] Ibid at p 972. [60] Ibid. [61] [1996] AC 907. This involved a newspaper’s contention that a provision making it an offence to disclose details of an investigation into a suspected offence under the Prevention of Bribery Ordinance violated its freedom of expression. [62] Ibid at p 917. [63] Ibid. [64] Ibid at pp 918-921. [65] Ibid at p 922. [66] Beginning with HKSAR v Ng Kung Siu (1999) 2 HKCFAR 442 (a case on flag desecration and freedom of expression) and leading up to Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229; HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574 and the other cases cited above. [67] R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §89. [68] [2014] AC 700 at §74. His Lordship was referring to the judgment of Dickson CJ in R v Oakes [1986] 1 SCR 103 at 139. [69] [2014] AC 700 at §20. [70] Ibid. [71] Ibid. [72] [2015] 1 WLR 1591 at §106. [73] [1999] 1 AC 69 at 80. [74] Bank Mellat v Her Majesty’s Treasury (No 2) [2014] AC 700 at §20. [75] [1986] 1 SCR 103. [76] “The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.” [77] At pp 138-139. [78] [1995] 3 SCR 199 at §175. See also McLachlin CJ in Alberta v Hutterian Brethren of Wilson Colony [2009] 2 SCR 567 at §76. [79] [2007] 2 AC 167 at §19. [80] [1999] 1 AC 69. [81] [2004] 2 AC 368 at §§ 17–20, 26, 27, 60, 77. [82] See R (Aguilar Quila) v Secretary of State for the Home Department [2012] 1 AC 621 at §45; Bank Mellat v Her Majesty’s Treasury (No 2) [2014] AC 700 at §20 and §65; R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §§19, 98 and §148; and In re Recovery of Medical Costs for Asbestos Diseases (Wales) Bill [2015] AC 1016 at §45. It has, however, been accepted that the four-step analysis does not apply in European Union law: R (Lumsdon) v Legal Services Board [2016] AC 697 at §26. [83] [2014] AC 700 at §74. [84] [2015] AC 945 at §98. [85] Further discussed in Section G below. [86] Eg, Sporrong and Lonnroth v Sweden (1983) 5 EHRR 35 at §69: “The search for this balance is inherent in the whole of the Convention and is also reflected in the structure of Article 1.” [87] Eg, James v United Kingdom (1986) 8 EHRR 123 at §50: “Not only must a measure depriving a person of his property pursue, on the facts as well as in principle, a legitimate aim ‘in the public interest’, but there must also be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. This latter requirement was expressed in other terms in the Sporrong and Lönnroth judgment by the notion of the ‘fair balance’ that must be struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights...” [88] Ibid. See also, eg, James v United Kingdom (1986) 8 EHRR 123 at §50 and Lithgow v United Kingdom (1986) 8 EHRR 329 at §120. [89] Denimark Ltd v United Kingdom (2000) 30 EHRR CD 144 at CD150. See also, James v United Kingdom (1986) 8 EHRR 123 at §50; AXA General Insurance Ltd v HM Advocate [2012] 1 AC 868 at §§37 and 126; Bank Mellat v Her Majesty’s Treasury (No 2) [2014] AC 700 at §70. [90] [2014] AC 700 at §20. [91] [2009] 2 SCR 567 at §76. [92] Bank Mellat v Her Majesty’s Treasury (No. 2) [2014] AC 700 at §76. [93] Cambridge UP, 2012. [94] In Chapter 12, including an Israeli law setting a blanket restriction on entry of spouses of Israeli citizens residing in the Occupied Territories on national security grounds; legislation authorizing seizure of land relating to the Security Fence in the West Bank and Ontario regulations restricting dentists’ advertisements (see pp 341-342). [95] Dieter Grimm, “Proportionality in Canadian and German Constitutional Jurisprudence” 57 U Toronto L J 383, 396 (2007). [96] Barak, op cit at pp 342-343. [97] Grimm, op cit at p 396. [98] Sporrong and Lonnroth v Sweden (1983) 5 EHRR 35 at §69; Pine Valley Developments Ltd v Ireland (1991) 14 EHRR 319 at §79; [99] (1989) 11 EHRR 439 at §89. For similar statements in cases relating to property rights, see for instance, Sporrong and Lonnroth v Sweden (1983) 5 EHRR 35 at §69; Pine Valley Developments Ltd v Ireland (1991) 14 EHRR 319 at §79; Lough v First Secretary of State [2004] 1 WLR 2557 at §31; and Bank Mellat v Her Majesty’s Treasury (No 2) [2014] AC 700 at §70. [100] Li CJ, Chan and Ribeiro PJJ and Sir Anthony Mason NPJ (2005) 8 HKCFAR 229 at §35. [101] (2008) 11 HKCFAR 170 at §62. [102] (1983) 5 EHRR 35. [103] At §69: “...the Court must determine whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights. The search for this balance is inherent in the whole of the Convention and is also reflected in the structure of Article 1.” [104] (2008) 11 HKCFAR 170 at §79. The concept is referred to again at §84. [105] (2012) 15 HKCFAR 362 at §130. [106] [2004] 1 AC 816 at §62. [107] Bank Mellat v Her Majesty’s Treasury (No 2) [2014] AC 700 at §71. See also R (SB) v Governors of Denbigh High School [2007] 1 AC 100 at §30; Belfast City Council v Miss Behavin’ Ltd [2007] 1 WLR 1420 at §88; R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §29. [108] (1986) 8 EHRR 123 at §§50-51. [109] [1995] 3 SCR 199 at §160 (citations omitted). [110] Bank Mellat v Her Majesty’s Treasury (No 2) [2014] AC 700 at §20. [111] Pham v Secretary of State for the Home Department (Open Society Justice Initiative Intervening) [2015] 1 WLR 1591 at §106. [112] Per Lord Sumption JSC in R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §34. [113] (2012) 15 HKCFAR 409 at §75(6). [114] In Illinois State Board of Elections v Socialist Workers Party (1979) 440 US 173, 188–189. Blackmun J’s comment was also cited by Lord Reed JSC in Bank Mellat [2014] AC 700 at §75. [115] (2015) 18 HKCFAR 467 at §53. [116] Of the Council of Europe. [117] (1996) 23 EHRR 101 at §74. [118] (1986) 8 EHRR 123 at §46. [119] (1986) 8 EHRR 329 at §122. [120] Mellacher v Austria (1989) 12 EHRR 391 at §45. [121] (1983) 5 EHRR 35 at §69. [122] (2001) 32 EHRR 11 at §55. See also Pine Valley Developments Ltd v Ireland (1991) 14 EHRR 319 at §79; and Chapman v United Kingdom (2001) 33 EHRR 18 at §92. [123] [2006] 1 AC 173 at §§86-91. [124] [2015] 1 WLR 1449 at §§92-93. [125] [2000] 2 AC 326 at 381. [126] R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §22. [127] Ibid at §34. [128] Ibid at §33. [129] Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 at §64. [130] As noted by Ma CJ in Mok Charles v Tam Wai Ho (2010) 13 HKCFAR 762 at §55. [131] (2002) 5 HKCFAR 415 at §102-105, citing ex p Kebilene [2000] 2 AC 326 and Brown v Stott [2003] 1 AC 681 at 703, per Lord Bingham of Cornhill: “While a national court does not accord the margin of appreciation recognised by the European court as a supra-national court, it will give weight to the decisions of a representative legislature and a democratic government within the discretionary area of judgment accorded to those bodies...” [132] (2002) 5 HKCFAR 415 at §123. [133] (2006) 9 HKCFAR 574 at §45. [134] (2012) 15 HKCFAR 409. [135] Ibid at §§70 and 71. [136] Ibid at §75(3). [137] (2013) 16 HKCFAR 950. [138] Ibid at §41. The seven-year requirement was held to fail the rationality test and thus to be a violation of Articles 36 and 145. [139] Buckley v United Kingdom (1996) 23 EHRR 101 at §74 [140] See R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §34 where similar factors are discussed. [141] Pham v Secretary of State for the Home Department (Open Society Justice Initiative Intervening [2015] 1 WLR 1591 at §106. [142] [2007] 1 WLR 1420 at §16. [143] Ibid at §83. [144] Bill of Rights Art 22: Grounds “such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status”. [145] See eg, R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173 at §58; Stec v United Kingdom (2006) 43 EHRR 47 at §52 and Humphreys v Revenue and Customs Commissions [2012] 1 WLR 1545 at §16. [146] (2008) 11 HKCFAR 170 at §§78 and 79. [147] [2003] 1 AC 681. [148] (2008) 46 EHHR 21. [149] A similar approach was adopted by Ma CJHC (as Ma CJ then was) in Secretary for Justice v Latker [2009] 2 HKC 100 at §§35-37. [150] W v Registrar of Marriages (2013) 16 HKCFAR 112. [151] R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §34. [152] See R (on the application of Rotherham Metropolitan Borough Council) v Secretary of State for Business, Innovation and Skills [2015] 3 All ER 1 at §23. [153] R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §32. [154] Bank Mellat v Her Majesty’s Treasury (No. 2) [2014] AC 700 at §21; R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §105. [155] Discussed in Democratic Republic of the Congo v FG Hemisphere Associates LLC (No 1)(2011) 14 HKCFAR 95. [156] (2002) 5 HKCFAR 415 at §§101-105 and 123. [157] Fok Chun Wa v Hospital Authority (2012) 15 HKCFAR 409 at §75(3). [158] [1995] 3 SCR 199 at §160 (citations omitted). [159] [2016] AC 697 at §44. [160] At §100. [161] R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at §68. [162] [2007] 1 WLR 1420 at §§12 and 16. [163] [2007] 1 AC 100 at §68. |
Cases cited in this judgment