Ka Wan (International) Properties Ltd v. Building Authority and Another

HCAL 227/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 227 OF 2016

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D E C I S I O N

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Background

1.This is the applicant’s application for leave to apply for judicial review of the decision of the Appeal Tribunal (Buildings) (“BAT”) dismissing its appeal without a full hearing.

2.The applicant is a limited company which occupied the second floor of Peter Leung Industrial Building, no 103 Wai Yip Street, Kowloon, Hong Kong (“the premises”).  It subdivided the premises into compartments, allegedly to lease them out for mini-storage and as storage and showroom for its interior design business.  The applicant also erected a signboard to the external wall of the building.

3.The officers of the Building Authority (“BA”) inspected the premises twice in April 2012.  On the 1^st occasion, they had not found anyone residing at the premises.  On the 2^nd occasion, ie the following day, they entered 15 out of 18 rooms of the premises.

4.BA considered the premises to be of domestic use, which was contrary to the usage for factory or non-domestic purpose as stated in the occupation permit.  On 25 May 2012, BA issued 2 orders.  The 1^st Order, issued pursuant to section 24 of the Buildings Ordinance (“BO”), required the owner to demolish 14 sets of unauthorised building works (“UBWs”), including the protruding signboard and to reinstate the premises.  The 2^nd Order required the owner to discontinue the domestic use within one month from the date of service of the 2^nd Order.

5.On 15 June 2012, the applicant appealed to BAT against both Orders.  Between 2012 and 2014, the applicant and BA filed representations in respect of the appeal.

6.In the meantime, the applicant demolished the signboard. By a letter dated 23 October 2014, BA withdrew that part of the 1^st Order in relation to the signboard but asserted that the rest of the order would remain effective (“BA’s Letter”).

7.On 28 August 2015, BAT held a preliminary hearing to determine whether good cause had been shown for holding a full hearing.  On 8 September 2016, BAT determined that good cause had not been shown for holding a full oral hearing and dismissed the appeal (“the Decision”).

8.This is the applicant’s application for leave to apply for judicial review of the Decision on 3 grounds:

(a) Ground 1: procedural impropriety, ie failure to give reasons for departing from policy;

(b) Ground 2: error of law, ie the purported amendment to the 1^st Order by way of BA’s Letter was invalid;

(c) Ground 3: procedural impropriety, ie depriving the applicant of the right of cross-examination.

Legal principles for grant of leave for judicial review

9.The burden is on the applicant to show that there are reasonably arguable grounds for judicial review: Peter Po Fun Chan v Winnie CW Cheung & anor (2007) 10 HKCFAR 676, at §§14-17. 

10.This is not a particularly high threshold. It is a test designed to screen out unmeritorious, frivolous, vexatious and purported challenges that are not reasonably arguable.  The test does not mean that leave should be refused if there appears, on the materials before the Court, respectable counter-arguments to those relied on by the applicant.  Re Cheng Kar Shun & anor, HCAL 79/2009, 14 July 2009, A Cheung J (as he then was), at §§3-4.

Legal principles for granting a full hearing

11.Section 49 BO gives BAT a discretion to decide whether or not to hold a full hearing for an appeal:

“(1) The Appeal Tribunal may, in any case where it considers it appropriate to do so, hold a preliminary hearing to determine whether good cause has been shown for holding a full hearing.

(2)  If the Appeal Tribunal determines that good cause has not been shown for holding a full hearing it shall make an order dismissing the appeal but shall otherwise hold a full hearing.”

12.The standard to conduct a full hearing is not high.  BAT may refuse to hold an oral hearing where it is apparent that an ostensible dispute as to matters of fact is without substance.  Likewise BAT may refuse to hold a hearing where the appeal is wholly lacking in merits or is frivolous and vexatious: Chinluck Properties Ltd v Appeal Tribunal (Buildings), HCAL 124/2012, 15 October 2012, Au-Yeung J at §25, upheld by the Court of Appeal in CACV 242/2012, 3 September 2013, §42.

Ground (1) - failure to give reasons when departing from a previously adopted policy

Ground (2) - error of law in the Determination in assuming that BA’s amendment by way of BA’s Letter was valid

13.Mr Tam, counsel for the applicant, concedes that these 2 Grounds stand and fall together.

14.Where the exercise of a statutory discretion is under challenge, the logical starting point should be the proper interpretation of the Ordinance which confers the discretion in the first place.  When it comes to any governmental policy guiding the exercise of the statutory discretion:

“48. … It is for the court to determine as a matter of law what the words of a policy document are capable of meaning. If the decision-maker attaches a meaning to the words which they are not properly capable of bearing, then he or she will have made an error of law, and will have failed properly to understand the policy. That is a ground for judicial review. …

…

50. … it is well settled that an administrative decision made in departure from a stated policy by the decision-maker’s misinterpretation of its meaning or misunderstanding of the policy itself is defective and unlawful and may be quashed in a judicial review. …” Hong Kong Television Network Ltd v Chief Executive in Council [2016] 2 HKLRD 1005.

15.If a decision-maker is going to depart from a policy, it must give clear reasons, articulated in the course of some identifiable decision making process: Gransden v Secretary of State for the Environment (1987) 54 P & CR 86, 94, Woolf J (as he then was); R v London Borough of Islington, ex p Rixon, 32 BMLR 136, at 148, Sedley J.

16.The policy that Mr Tam relies on are the following paragraphs in Existing Building Division Manual Part II Section 5 Instruction No 9 – Superseding Orders (“Instruction No 9”):

“2. Subsequent to the issuance of a statutory order, the following circumstances may be encountered:

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(e) Irregularities in descriptions in the order (e.g. ownership details/address/lot number of the premises differing from the Land Registry (LR)’s record; typing errors; discrepancies between Chinese and English versions of the order etc.);

(f) Technical errors found in the order (e.g. incorrect citation of regulation contravened, inaccurate description of UBW etc.);

…

3. Some of the above circumstances may make the order not enforceable and a superseding order or a fresh order would be required. For other situations, the issue of superseding order may not be necessary.

…

Irregularities in descriptions in the order

10. Section 46 of the Interpretation and General Clauses Ordinance (Cap 1) provides that where any Ordinance confers power upon any person to make any order, such power shall include power to amend the existing order or to substitute another order for the one already made. BD Handbook Instruction 5.7 has given guidelines on amendment of documents made and issued under the BO.

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14. If the interest of any person is likely to be prejudiced by an amendment of the order (eg right of appeal of the owner), the issue of a superseding order should be considered.

Technical error(s) in the order

15. The circumstances of cases under this category are varied and need to be examined on a case by case basis.  In case of doubt, a superseding order should be issued.”

17.Mr Tam contends that there was compliance with the 1^st Order by demolition of the signboard subsequent to the issue of the 1^st Order.  BA needed to consider whether to issue a superseding order or a fresh order.  In failing to issue a superseding order or to give reasons for not doing so, BA departed from the policy. 

18.I am unable to agree.  There was no dispute that the 1^st Order in relation to the signboard was valid at the time it was issued.  With respect to Mr Tam, subsequent compliance with an order could not be regarded as an irregularity or technical error.  If Mr Tam is correct, it would mean that every time a person demolishes a UBW, BA would have to issue a superseding order.  It defies common sense.

19.Mr Tam simply cannot point to any irregularity or technical error within the meaning of §2(e) or (f) of Instruction No 9. 

20.Further, the policy does not prescribe the form of the superseding order.  If a superseding order were required, the BA’s Letter would be sufficient.

21.When asked what prejudice the applicant had suffered because of BA’s Letter or under §14 or 15 of Instruction No. 9, Mr Tam cannot point to any.  He withdrew his reliance on §14.  Nor can he identify any doubt under §15.

22.Grounds (1) and (2) are unarguable.

Ground (3) - procedural impropriety in depriving the applicant of the right of cross-examination

23.Although strict rules of evidence do not apply to BAT, there is an overriding duty for BAT to act fairly.  Denial of cross-examination could be a form of procedural impropriety and denial of natural justice: Re Ngai Kin-wah [1987] 1 HKC 236, 244F-245D.

24.In the appeal (relating to the other 13 UBWs), the applicant and BA put forth competing assertions as to user of the premises. 

25.Mr Tam submits that the applicant should have been allowed to cross-examine the person who took the photos on matters such as, how the photos came into existence, whether the toilets could be flushed, whether or not the person who inspected the premises noticed anyone living in the premises.  However, the applicant was denied the opportunity.

26.The applicant had had the opportunity to put forth written representations in opposition and in reply.  There was no challenge as to authenticity of the photos produced by BA or the scene depicted in those photos.  BA did not put forth evidence to show that someone was actually living in the premises.  Whether the toilets could be flushed could hardly affect to what use the premises were put.

27.The appeal was straightforward.  BA relied on materials laid before it.  It has not been shown that BA took into account irrelevant factors or failed to take into account relevant factors or that its views on the facts was one that no reasonable tribunal would have reached on the evidence.  It was not even suggested that BA was not entitled to come to the views as it did. In the exercise of its supervisory function, there is no room for the Court to review the Decision.

28.Ground (3) is not arguable.

Conclusion

29.None of the grounds can meet the threshold test in Peter Po Fun Chan. This application is wholly unmeritorious and I dismiss it.

Mr Jeffrey Tam, instructed by KCL & Partners, for the applicant

Initial Response prepared by Ms Dorothy Lin of the Department of Justice, for the 1^st putative respondent