Charteryard Industrial Ltd v. Appeal Tribunal (Buildings)

CACV 4/2019

[2021] HKCA 1164

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 4 OF 2019

(ON APPEAL FROM HCAL NO 183 OF 2016)

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J U D G M E N T

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Hon G Lam JA (giving the Judgment of the Court):

Introduction

1.The appellant, Charteryard Industial Ltd, is the owner of a shop on the ground floor of Bo Fung Gardens, 1090‑1094 King’s Road, Quarry Bay.  The Building Authority (“BA”) took the view that part of the shop consisted of unauthorised building works (“UBW”) and issued an order requiring those works to be removed and the premises to be reinstated in accordance with the approved building plans.  The Appeal Tribunal (Buildings) (“Tribunal”) dismissed the appellant’s appeal from that order after a preliminary hearing.  The Court of First Instance (Au J, “the Judge”) dismissed the appellant’s application for judicial review of the Tribunal’s decision.[1] The appellant now appeals from the judgment of the Court of First Instance (“Judgment”) to this Court.

Background

2.The building, Bo Fung Gardens, was constructed and completed in 1972.  The last approved building plans were those approved on 8 August 1972 (“Approved Plans”).  The occupation permit was issued on the same date.  The building consisted of residential units on the upper floors, and shops and car parking spaces on the ground floor and upper ground floor. 

3.The shop in question in these proceedings is the one known as Store No 6 on the ground floor (“Store 6”).  The space it occupies is shown on the Approved Plans not as a shop, but as part of a covered car parking space and a “flower box”.  Store 6 is, however, mentioned in the Deed of Mutual Covenant entered into between the developer and the first purchaser of a unit in the building on 31 August 1972 (“DMC”) and also shown in the plan attached to the DMC (“DMC Plan”) as a store.  Moreover, under the DMC, Store 6 is allocated 1 out of 5,917 undivided shares of and in the land and building.

4.Store 6, together with Stores Nos 1, 2, 3, 4 and 5 and Shops Nos 1 and 2 on the ground floor and 5 car parking spaces, were assigned by the developer to a related company, Chow Tai Fook Jewellery Co Ltd, by an Assignment dated 23 May 1973.  The plan attached to that assignment is identical to the DMC Plan.  The appellant in turn acquired Store 6, together with Store No 1 and Shops Nos 1 and 2 on the ground floor, from Chow Tai Fook Jewellery Co Ltd by an Assignment dated 16 January 1988, and has held Store 6 since.

5.Store 6 is a small shop with a pentagonal shape, located at the north‑eastern corner of the building next to a vehicular exit.  The rear, larger part of the shop occupies approximately half of the covered car parking space shown in the Approved Plans; the front, smaller part takes up the space designated as a flower box. On the Approved Plans, there are lines indicating a wall between the car parking space and the flower box, and also a wall between the flower box and the public pavement.  We shall adopt the terminology used by the appellant and refer to the former as the “BA’s Line” and the latter as the “Appellant’s Line”.  As Store 6 stands, there is a canopy (being part of the shop ceiling and signboard) directly above and extending beyond the flower box area.  The Appellant’s Line now consists of full‑height glazed shop windows on a low masonry base.

6.In June 2012, the BA received a complaint that there were UBW in Store 6.  After inspections, the BA took the view that the canopy and glazed shop windows enclosing the front part of Store 6 (“Works”) were UBW, and that they extended outwards for approximately 1.3 m from the BA’s Line.  On 31 August 2012, the BA wrote to the appellant demanding that those Works be removed.  The appellant not having acceded to the demand, the BA issued an order on 20 February 2013 pursuant to section 24(1) of the Buildings Ordinance (Cap 123) (“Ordinance”) requiring the appellant to demolish the UBW and reinstate the premises in accordance with the Approved Plans.

7.On the appellant’s appeal against the order, the Tribunal decided pursuant to section 49 of the Ordinance to hold a preliminary hearing to determine whether there was good cause shown for holding a full hearing.

8.The appellant’s submissions to the Tribunal for the purposes of the preliminary hearing may be seen from its statement dated 2 September 2013 and the subsequent letter of its representative, C S Surveyors Ltd, to the Tribunal dated 29 September 2014, the transcript of the preliminary hearing on 14 January 2015, and two further post‑hearing letters from C S Surveyors Ltd to the Tribunal dated 15 June 2015 and 8 September 2015 respectively.  Broadly, so far as relevant for present purposes, the appellant contended:

(1)   When the appellant acquired it in 1988, Store 6 was already in the configuration shown on the DMC Plan and already had a glass shopfront.  The shop did not occupy any common area of the building or any Government land.

(2)   There was an external wall of the building facing King’s Road, being at the Appellant’s Line (ie  the outer wall of the flower box) rather than the BA’s Line.  To change part of that wall from stone or brick to glass does not involve the structure of the building and is exempted by virtue of section 41(3) of the Ordinance from the requirement of the BA’s approval under section 14.

(3)   Such change had been effected before 31 August 1972 with the involvement of the original architects who prepared both the Approved Plans and the DMC Plan.

(4)   Measured from the Appellant’s Line, the shop signboard protruded outward for less than 600 mm, and therefore fell within the category of tolerated structures according to the relevant Buildings Department policy.

9.In its decision dated 21 July 2016 (“Decision”), the Tribunal dismissed the appeal forthwith, finding that a full hearing was not necessary.  The Decision has been extensively quoted in §§24 and 35 of the Judgment and will not be recited at length here.  In summary, the Tribunal’s reasoning as expressed is as follows:

(1)   The Works fell within the definition of “building works” in the Ordinance.  Unless they were exempted works under section 41, the BA’s approval under section 14(1) was required before they could be lawfully erected.[2]

(2)   The fact that Store 6 in its current configuration appeared in the DMC, the Assignments and their annexed plans is not relevant to compliance with the Ordinance.[3]

(3)   The Works were erected without the BA’s prior approval.[4]

(4)   The exemption under section 41(3) only applies to works in a building.  The Works were “built ‘on’ top of the car park and flower box”.  They could not be treated as “in” the building.  Further, the Works conflicted with section 23(3)(a) of the Building (Planning) Regulations in relation to Gross Floor Area calculation.  They did not qualify as exempted works under section 41.[5]

(5)   There was no other exemption or policy which availed the appellant.[6]

10.The appellant then sought leave to apply for judicial review, advancing five grounds.  Leave was given in respect of Grounds 2, 3 and 4 for judicial review.  In brief, Ground 2, which is the main ground relevant to this appeal, is that the Tribunal failed to consider and determine the fundamental question of the position of the external wall of the building.  Ground 3 alleges that the Tribunal failed to give any or any adequate reasons for holding that the UBW was not located in the building.  Ground 4 alleges that the Tribunal failed to give any or any adequate reasons for holding that the UBW did not qualify as exempted minor works. Grounds 2, 3 and 4 for the judicial review correspond respectively to Grounds 1, 2 and 3 in the Notice of Appeal filed in this Court.

11.By the Judgment dated 10 December 2018, the Judge dismissed the application for judicial review in respect of all three grounds and ordered the appellant to pay costs.

Ground 1 of this appeal

12.In support of Ground 1 for this appeal, Mr Patrick Chong, who appears for the appellant in this Court but not below, argues that the Tribunal could not and did not make a determination of where the external wall was according to the Approved Plans.

Whether the Tribunal could not have determined where the external wall was

13.Taking first the point that the Tribunal could not properly have determined where the external wall was at the preliminary hearing, Mr Chong relies on Magic Key Ltd & others v Appeal Tribunal (Buildings) & another [2020] HKCFI 1716, where Chow J stated at §27:

“ Generally speaking, if an appellant is able to raise a substantial dispute of fact the resolution of which is required for the purpose of disposing of his appeal, it is likely that a good cause has been shown for holding a full hearing for the purpose of s 49 of the Ordinance.”

The argument is that since there was a substantial dispute of fact as to where the external wall was, there was good cause for holding a full hearing and the Tribunal could not properly have decided the question at a preliminary hearing. 

14.We agree with Mr Lok, who appears with Mr Tung on behalf of the BA (but not below), that this point had not been raised in the Form 86 filed by the appellant below or the Notice of Appeal for this appeal.  It is accordingly not a ground open to the appellant below (see Order 53 rule 6(1) of the Rules of the High Court), though as far as we can see the appellant did not run this argument before the Judge; nor is it a ground open to the appellant in this appeal.

15.In any event, whether to hold a full hearing is a matter for the Tribunal’s discretion.  On judicial review the court cannot substitute its own view, but reviews the Tribunal’s decision based on any specific public law grounds raised by the applicant.  Whether or not an appellant has shown good cause for a full hearing is a matter to be assessed by the Tribunal by reference to the evidence and submissions placed before it: Longest Profit (Hong Kong) Ltd v Appeal Tribunal (Buildings) & another (CACV 60/2013, 29 January 2014), §§5, 11 & 25.  It does not follow from the fact that certain arguments of a factual nature have been raised that the Tribunal must therefore hold a full hearing.  As Chow J also said in Magic Key at §28:

“ When approaching the question of whether there is a substantial dispute of fact which requires determination at a full hearing, the Tribunal is entitled to approach the threshold question with a degree of robust common sense. The Tribunal does not have to examine the minutiae of the evidence, and is not bound to take the appellant’s evidence at face value, or read the evidence in a way which is most favourable to the appellant’s case. The Tribunal, whose members are chosen on account of their specialist knowledge and skills in areas relevant to building appeals, is entitled to consider the evidence broadly, pragmatically and with common sense.”

16.Apparently with a view to showing that there were disputes and uncertainties regarding the height of the wall at the Appellant’s Line (ie  the outer wall of the flower box), Mr Chong referred us to the submission by Mr Kwan, the appellant’s surveyor, at the preliminary hearing, that based on the Approved Plans there were three possibilities: (i) that there was no wall; (ii) that there was a full‑height wall; and (iii) that there was a low wall.  Mr Chong also complains that the Tribunal did not mention this argument in its Decision.  As we read the transcript, however, it seems to us that Mr Kwan actually accepted that the elevation plan showed that there was to be a low front wall for the flower box, and that the three possibilities mentioned concern what lay at the back of the flower box, ie  the BA’s Line.  This is also clear from what was said at the hearing by Mr Leung, a member of the Tribunal, as quoted in §23 of the Judgment.

17.The Tribunal is a statutory specialist body for adjudicating upon building disputes.  The members in this case included Mr Leung, an engineer, and Mr Cheng, a surveyor. There is no submission that there was insufficient material for the Tribunal to come to a decision on the question at hand after the preliminary hearing.  As pointed out by Mr Lok by reference to the Notice of Appeal in this Court,[7] it is not the appellant’s contention that the Tribunal could not have accepted the BA’s submission in the preliminary hearing in the absence of expert evidence.

18.Accordingly, even if the argument is open to the appellant, we do not think that it has been shown that the Tribunal committed any reviewable error in proceeding to decide the appeal after a preliminary hearing without holding a full hearing. 

Whether the Appellant’s Line was a full‑height wall

19.In his skeleton argument Mr Chong goes further and submits that the circumstances dictate that the Appellant’s Line was a full‑height wall and hence the approved external wall.  Reliance is placed on the DMC Plan, which indicates that Store 6 was built by the developer.  He submits that the DMC Plan, which was prepared by the same architects, is a relevant circumstance for interpreting the Approved Plans.  It is also submitted that the BA must have inspected the building and seen the Works which were conspicuous, and must have considered them to be consistent with the Approved Plans and applicable building regulations, before issuing the occupation permit.  Reliance is placed on Goldmex Ltd & others v Edward Wong Finance Co Ltd [2006] 2 HKLRD 795. 

20.As to this argument:

(1)   It plainly falls outside the relevant ground of judicial review and ground of appeal.  There is no complaint raised in the Form 86 that the Tribunal’s decision was irrational, or that it failed to take account of the DMC Plan, or that the only reasonable conclusion that could be reached on the evidence was that the Appellant’s Line was the external wall.

(2)   In any event, the DMC was dated 31 August 1972, more than three weeks after the Approved Plans and the occupation permit were issued.  Alterations could have been made after the BA’s inspection for the purpose of issuing the occupation permit.  The appellant has not shown any legal basis for contending that such a subsequent document may be used as an aid to interpret the earlier Approved Plans. 

(3)   Further, there is nothing to suggest that the BA endorsed or was even aware of either the DMC Plan or the re‑configuration of the relevant part of the building into Store 6 when it approved the Approved Plans and issued the occupation permit. Mr Chong’s contention that the BA would have seen the Works is an assertion without any basis.

(4)   Goldmex is a case where the court found on the facts that the BA must have inspected and became aware of the features in question before issuing the occupation permit and that consequently there was no such real risk of enforcement as to have an impact on the owner’s title.  As such, it provides no assistance to the appellant.

(5)   Moreover, Mr Chong’s argument ignores the horizontal line across what is now the shop front of Store 6 on the elevation plan in the Approved Plans.  As mentioned above, at the hearing before the Tribunal, the appellant’s representative actually proceeded on the basis that the elevation plan showed that what lay at the Appellant’s Line was a low wall.

21.For these reasons, the appellant’s argument must be rejected.

Whether the Tribunal made a decision on where the external wall was

22.We turn to the aspect of the appellant’s argument that is properly within Ground 1 of the appeal (Ground 2 for judicial review), namely, that the Tribunal did not make a finding of where the external wall under the Approved Plans was.  This argument was raised below and considered by the Judge, who concluded that it was clear that:[8]

“ (1) The Tribunal accepted the BA’s submissions and decided that the Tribunal should only look at the Approved Plan (but not the Assignment Plan and DMC Plan) to determine where the external wall of Building was for the purpose of deciding whether there was the UBW.

(2) On that basis, the Tribunal must have also decided (accepting the BA’s submissions) that the external wall was where the building wall was as shown on the Approved Plan, but did not include the flower box wall (as contended by the applicant by relying on the DMC Plan and the Assignment Plan).

(3) Hence, it further concluded that the glass shopfront together with the canopy fell within section 14(1) of the BO and was not exempted under section 41(3) as it was not built ‘in’ the building.  It was therefore a UBW.  These conclusions, in light of the applicant’s contentions made at the hearing, could also only be reached based on the conclusion that the external wall did not include the flower box wall.”

23.The appellant disagrees and contends that the Tribunal did not actually make a finding as to where the external wall in the Approved Plans was, and did not address why the outer wall of the flower box could not delineate the boundary of the building.  The failure to make a determination of the location of the external wall means that the Tribunal failed to take into account a relevant consideration and its decision should therefore be quashed.

24.So far as relevant for present purposes, the conclusion of the Tribunal is to be found in §27 of the Decision, which reads:

“ 27. From the evidence, it is noted that the UBW (i.e. the glazed and masonry structure and the shopfront projections) is erected and built ‘on’ top of the car park and flower box. In our view, the structure cannot be treated as added ‘in’ the building and further, it conflicts with Section 23(3)(a) of Building (Planning) Regulations in Gross Floor Area calculation. We are not satisfied that the UBW could be qualified as exempted works under the said section 41(3).”

25.It is true that the Tribunal did not in express terms state its conclusion that under the Approved Plans the external wall was to be at a particular specified place.  It is important to note, however, the ultimate issue for the Tribunal is not the location of the external wall, but whether the exemption under section 41(3) applies.  In finding that the Works were not added “in” the building, the Tribunal was correctly directing its mind to that ultimate issue.  Although the location of the external wall was a relevant factor for that issue — indeed the determining factor having regard to the parties’ submissions, there was no requirement for the Tribunal to make an express declaration of that location.

26.The question therefore boils down to whether the Tribunal has, inferentially, made a determination.  The notion of an inferred finding is not uncommon in the law and may be found, for example, in the law on res judicata, where it has been said that where a decision necessarily involves a judicial determination of some issue of law or fact, because it could not have been legitimately or rationally pronounced without determining or assuming a particular answer, that determination, though not expressed, is an integral part of the decision: see Spencer Bower & Handley, Res Judicata (5^th ed), §8.08.

27.In the present case, the Tribunal, having concluded that (i) the Works were building works, and (ii) they had not been approved by the BA, correctly asked itself whether the appellant could nevertheless avail itself of the exemption under section 41(3).  As the Tribunal noted,[9] it was held in Mariner International Hotels Ltd & another v Atlas Ltd & another (2007) 10 HKCFAR 1 at §52 that to benefit from the exemption, the building works in question must have been carried out in the building.[10]  Further, there was also a question before the Tribunal whether the appellant could benefit from the enforcement policy of the BA revised in April 2011 which was to tolerate “minor amenity features” and exclude them from enforcement actions.  According to the relevant Buildings Department manual, to benefit from this policy, there must be no projection beyond 600 mm from the “Building Line” into the “Footpath”.  It was common ground that the Works in question exceeded this limit if measured from the BA’s Line, but not if measured from the Appellant’s Line.

28.The parties’ submissions in common treated both of these issues as dependent on whether the Appellant’s Line was the external wall of the building.  Thus the BA submitted in its statement lodged with the Tribunal on 2 December 2013 that as the Works projected from the external wall for approximately 1.3 m, they did not qualify as “minor amenity features” that could be tolerated but fell into the category of UBW that needed to be removed forthwith under the BA’s policy.

29.In response, the appellant submitted in C S Surveyors’ letter to the Tribunal dated 29 September 2014 that:

「 5. 應訴人引用的外牆位置錯誤。應訴人引用的外牆位置並不是該物業的外牆位置，而『該物業』的外牆位置應是向英皇道在行人路旁的圍牆才是該物業外牆的位置，而該物業外牆位置由入伙以來並未改變過，所以應訴人在回應第2(f)段所指由外牆伸出1.3米是錯誤；

6. 該物業圍牆的部份磚石改成玻璃是不涉及建築物的結構，是符合《建築物條例》第41(3)條所述的豁免工程，是無須按照《建築物條例》第14(1)條的規定，取得批准同意的，所以是合法的；」

English translation:

“ 5. The respondent referred to the wrong position of the external wall. The position of the external wall referred to by the respondent was not the external wall of the said property. The location of the said property’s external wall should be the fence wall next to the pedestrian walk facing King’s Road. The position of the external wall of the said property has never been altered since its occupation; hence it was wrong for the respondent to suggest in paragraph 2(f) of its response that there was an extension of 1.3 metres from the external wall.

6. The conversion of part of the masonry of the said property’s fence wall into a glass (wall) did not involve the structure of the building.  It fell within the works exempted under section 41(3) of the Buildings Ordinance (and) need not have the approval and consent required under section 14(1) of the Buildings Ordinance.  It was therefore legal.”

30.The BA replied in his letter to the Tribunal dated 20 October 2014 as follows:

「 4. …因為有關花槽矮牆並不是大廈外牆，所以有關改建花槽矮牆為玻璃牆之工程所涉及的搭建物連伸建物都並非在建築物內豎建，因此《建築物條例》第41(3)有關條例之豁免並不適用於此個案。

5. …有關搭建物（包括在原有花槽改建並圍封為商舖）連伸建物（包括用作商舖頂蓋的舖面招牌及不銹鋼簷篷），均屬樓宇外部的僭建物，根據2011年4月1日起生效的執法政策，不論有關僭建物對公眾安全構成的風險程度或是否新建，須予以取締。」

English translation:

“ 4. … As the relevant parapet wall of the flower box was not the external wall of the building, the structure and the projection involved in the relevant works that converted the parapet wall of the flower box into a glass wall were not erected in the building. As such, the exemption in the relevant provisions under section 41(3) of the Buildings Ordinance is not applicable in this case.

5. … the relevant structure (which includes the enclosure of the original flower box and its conversion into a shop) and the projection (which includes the shop‑front signs and the stainless steel canopies that serve as the covers of the shop) are unauthorized building works on the exterior of the building.  According to the enforcement policy effective from 1 April 2011, these unauthorized building works should be eliminated irrespective of their level of risk to public safety or whether they are newly erected.”

31.The oral submissions of the appellant’s representative, Mr Kwan, quoted in the Judgment at §16, also stated that the core issue was which wall was the external wall.

32.Hence, as the Judge noted, the correct boundary of the external wall of the building was the principal dispute in the preliminary hearing before the Tribunal.[11] In its Decision, the Tribunal correctly recorded that the appellant contended that the Works represented the change of the material of the external wall from brick to glass,[12] showing that it was well aware of the issue.

33.Having regard to the contentions of the parties before the Tribunal, it is in our view plain that the Tribunal concluded that the Works were not erected in the building because they existed outside the BA’s Line which the Tribunal necessarily and implicitly found to be the line separating what was “in” and “not in” the building.  This was so fundamental in the arguments and cardinal to the decision that to arrive at it without answering this question would appear to be wholly capricious.  It would have been better had the Tribunal, in addition to its conclusion on the ultimate issue, also expressly set out this intermediate finding upholding the BA’s Line and rejecting the Appellant’s Line as the external wall of the building.  But the absence of an express ruling does not in the circumstances of this case make it any less a necessary and integral part of the Tribunal’s decision.

34.Mr Chong argues that the Judge was wrong to think that the Tribunal must have accepted the BA’s Line as the external wall because this would be inconsistent with the Tribunal’s reasoning in §27 of its Decision.  He relies on the Tribunal’s reasoning that the UBW had been built “on top of the car park and flower box”, and was not added “in” the building.  He submits that if the Tribunal had accepted the BA’s submissions, then it would have held that only that part of the UBW above the flower box (and not the part above the car park) was not in the building. 

35.This is not a point raised in the Notice of Appeal (which was settled by other counsel) and therefore not properly open to Mr Chong.  In any event, it ignores the fact that, as explained by the BA’s representative in the Tribunal hearing, the UBW was treated in the enforcement action of the BA as consisting of a single structure since the BA was unable to investigate its precise internal composition. Moreover, it was common ground that the car parking space was within the building and behind both the BA’s Line and the Appellant’s Line.  It would be wholly surprising and inexplicable if the Tribunal eventually took the view that that space lay outside the building.  Notably, the Tribunal stated the UBW “is” built on top of the car park and flower box, treating it as a unitary structure.  The Tribunal did not actually specify that the structure could not be treated as “in” the building because it was in part above the car park.  In our view, the infelicities in the Tribunal’s expression of its decision do not justify Mr Chong’s interpretation of their conclusion.

36.For these reasons, we reject Ground 1 as advanced by the appellant on this appeal.

Grounds 2 and 3

37.Ground 2 of this appeal asserts that the Judge misinterpreted the appellant’s submissions and failed to consider Ground 3 for judicial review, namely, that the Tribunal had failed to give any or any adequate reasons for holding that the UBW was not built “in” the building.  On this ground, the Judge said, among other things:[13]

“ As rightly submitted by Mr Chung,[14] this ground indeed ties in closely with Ground 2 above. This is premised principally on the contentions that, since the Tribunal failed to consider and decide on the fundamental question of where the boundary of the external wall was, there simply cannot be any or any adequate reasons for it to conclude that the UBW was not ‘in’ the Building. This ground therefore stands and falls with the applicant’s success under Ground 2.”

38.Ground 3 of this appeal relates to Ground 4 for judicial review, which criticises the Tribunal for failing to give adequate reasons for holding that the Works in question did not qualify as minor works under the Minor Works Control System.  In dealing with this ground, the Judge stated, inter alia, that it was for the appellant to adduce any necessary evidence to show that the Works satisfied any applicable requirements to qualify for exemption under the Minor Works Control System, and that it had failed to do so.[15]

39.Despite that Grounds 2 and 3 of the appeal took up five pages of the Notice of Appeal, in his skeleton argument Mr Chong simply stated that they “are predicated upon the finding of where the External Wall was” without advancing any submissions on those grounds.  For their part, counsel for the BA have understood Mr Chong’s position to be that Grounds 2 and 3 stand or fall together with Ground 1 of the appeal, and have therefore not made any separate submissions on those latter grounds.  Although, at the hearing, upon being questioned, Mr Chong seemed to suggest that Ground 2 had an independent existence, we have received no written or oral submissions on this ground (or on Ground 3) and have not been referred to any relevant authorities on the adequacy of reasons.  In these circumstances, we do not think it is appropriate or necessary to deal with these grounds separately, which must be treated as having fallen away with our rejection of Ground 1.

Conclusion

40.For these reasons, the appeal is dismissed with costs.

Mr Patrick Chong, instructed by Siao, Wen and Leung, for the Applicant

The Respondent was excused from attendance

Mr Michael Lok and Mr Ernie Tung, instructed by Department of Justice, for the Interested Party