Tam Hoi Pong v. Town Planning Board

CACV 540 /2020

[2022] HKCA 462

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 540 OF 2020

(ON APPEAL FROM HCAL NO 20 OF 2014)

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J U D G M E N T

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Hon Kwan VP:

Introduction

1.On 4 September 2020, Au JA (sitting as an additional judge of the Court of First Instance) allowed an application for judicial review of a decision (“the Decision”) made by the Rural and New Town Planning Committee (“RNTPC”) of the Town Planning Board (“TPB”) on 22 November 2013, in which planning permission was granted in relation to a development project at Lot 1457 RP in DD 123 and Adjoining Government Land at Fung Lok Wai, Lau Fau Shan, Yuen Long. The development site is in the Deep Bay area, which is an internationally renowned wetland habitat of recognised high conservation value.

2.Planning permission was granted subject to inter alia Conditions (o) and (p), which are as follows:

“(o) the submission and implementation of a funding arrangement proposal for ensuring the long‑term maintenance and management of the proposed Wetland Nature Reserve to the satisfaction of the Director of Environmental Protection and the Director of Agriculture, Fisheries and Conservation, or of the TPB;

(p) land exchange and/or lease modification for the proposed development, if considered and approved by the Director of Lands, should not be executed prior to the compliance with condition (o) to the satisfaction of the Director of Environmental Protection and the Director of Agriculture, Fisheries and Conservation, or of the TPB;”.

3.The applicant of the judicial review is the chief executive of an environmental concern group.  The developer who made the application for planning permission (“the Application”) under section 16 of the Town Planning Ordinance, Cap 131 (“the TPO”), although named as the interested party, was absent in the hearing below.

4.By his judgment (“the Judgment”), Au JA held that the Decision was tainted with illegality as the TPB had acted ultra vires in approving the Application by imposing Condition (o) (“the Illegality Ground”) and that it was made in breach of the applicant’s legitimate expectation in that the TPB did not adhere to the relevant policy in approving the Application by imposing Condition (o) (“the Legitimate Expectation Ground”).  He therefore ordered the Decision be quashed and remitted it to the TPB to be reconsidered in accordance with the findings of the court.

5.In essence, the judge found that “the 2011 NNCP Arrangements” (a funding and land management framework set up by the Environmental Protection Department (“EPD”) in June 2011 under the New Nature Conservation Policy Public-Private Partnership Scheme (“the NNCP PPP Scheme”) to sustain the long-term management of the ecologically sensitive portion of priority sites^[1]) had been adopted by the TPB as part of its own policy under the private-public partnership approach (“the PPP Approach”).  He arrived at this finding on the proper construction of the TPB policy and the planning intention.  He also found that objectively viewed, the TPB must have adopted the 2011 NNCP Arrangements as part of the requirements for its own PPP Approach when it expressed support for the 2011 NNCP Arrangements at the TPB meeting held on 15 July 2011.  By imposing Condition (o), the TPB had acted ultra vires as it had deferred its own duty to satisfy itself that the Application met the PPP Approach (with the 2011 NNCP Arrangements) to the Director of Environmental Protection (“DEP”) and the Director of Agriculture, Fisheries and Conservation (“DAFC”), and had breached the legitimate expectation in not requiring the 2011 NNCP Arrangements to be met.

6.The TPB has appealed against the Judgment.  The applicant adopts a neutral stance in this appeal.  Directions were given for this appeal to be dealt with on paper without an oral hearing.

Background

7.The relevant background matters, taken mainly from the Judgment as well as from the affidavits filed by the TPB^[2] and the documents exhibited, may be stated as follows.

(1) The development site

8.The town planning of the development site was governed by the Lau Fau Shan and Tsim Bei Tsui Outline Zoning Plan No S/YL‑LSF/7 (“OZP”) approved in June 2001.  The development site is designated in the OZP for “Other Specified Uses (Comprehensive Development and Wetland Enhancement Area)” (“OU(CDWEA)”).

9.The development site comes within the Deep Bay Area and the Mai Po Nature Reserve (“MPNR”).  Deep Bay is an internationally renowned wetland habitat for a variety of species of waterfowl and a stopover point for thousands of migratory birds.  The Inner Deep Bay, Mai Po Marshes and its adjacent area have been listed as a “Wetland of International Importance” (“Ramsar Site”) under the Convention on Wetlands of International Importance especially as Waterfowl Habitat (also known as the Ramsar Convention) since 1995.

10.Given the ecological importance and significance of the Deep Bay Area and the MPNR, the TPB has over time devised its own guidelines for considering applications for planning permissions for development in these areas. Separately, the Government has also announced a nature conservation policy generally for Hong Kong, which also covers the areas.  It is important to have regard to how various guidelines and policies were adopted and administered by a statutory body (the TPB)^[3] and a government agency (the EPD) over time, as this could have material bearing on the question whether the 2011 NNCP Arrangements had been adopted by the TPB as part of its own policy.

(2) The TPB guidelines for planning applications in the Deep Bay Area

11.As far back as 1989, a set of administrative guidelines was endorsed by the Deep Bay Environmental Management Committee under the chairmanship of the DEP.  The guidelines comprised the establishment of two buffer zones in the Deep Bay Area.  New development would not be allowed in “Buffer Zone 1” unless it was required to support the conservation of the area’s natural features and scenic qualities.  Areas further away were delineated under “Buffer Zone 2”, where new development would not be considered unless the applicant could demonstrate no significant adverse impacts on the environment, traffic and drainage in the area including the MPNR.

12.In September 1992, the administrative guidelines were presented to the TPB.  The TPB formally endorsed the guidelines and issued a press release setting out the principles in considering section 16 planning applications in the Deep Bay Area.

13.On 6 August 1993, the TPB formalized the principles for considering section 16 planning applications in the Deep Bay Area in a set of TPB Guidelines, namely TPB PG-No 12.  TPB PG-No 12 was revised on three occasions, in 1994, 1999 and 2014.

14.The first revision made in 1994 (TPB PG-No 12A) mainly related to the imposition of a requirement to conduct a 12-month ecological survey and the adoption of a “precautionary principle”.  This is to “ensure that any proposed development which might have a threat to the environment and ecology of the area would not be allowed even if there is no conclusive scientific proof linking that particular development to the environmental or ecological damage”.

15.The second revision in 1999 (TPB PG-No 12B; referred to in the Judgment as “the TPB Guidelines”) was adopted on 19 March 1999. This laid down the cornerstone for development control in the Deep Bay Area, and came about in this way.

16.In 1997, a consultancy study commissioned by the Government on the fish ponds in the Deep Bay Area was completed, which confirmed the ecological value of the fish ponds in the Deep Bay Area and made various recommendations on conservation and land planning strategy for the same (“the Fish Pond Study”), being the continued adoption of the “precautionary principle” and a new “no‑net‑loss in wetland” principle.  Buffer Zones 1 and 2 were replaced with Wetland Conservation Area (“WCA”) and Wetland Buffer Area (“WBA”) respectively.  All existing and contiguous active or abandoned fish ponds should be conserved within the WCA where no new development would be permitted unless it is required to support the conservation of the area or it is an essential infrastructure project with overriding public interest.  A buffer area of about 500m along the landward boundary of the WCA is designated as WBA within which developments are possible but would require an ecological impact assessment (“EcoIA”) to be carried out.

17.In taking forward the recommendations of the Fish Pond Study, the TPB adopted the Planning Department (“PlanD”)’s “Modified Option” as proposed in the TPB Paper No 5022 considered by the TPB on 18 December 1998.  The boundaries of the WCA and WBA were modified.  Under this option, instead of blanket conservation of all fish ponds (as one of the proposals made in the Fish Pond Study), an alternative private‑public partnership approach (“the PPP Approach” mentioned earlier) permitting limited development in the WCA areas, adopting a “precautionary approach” and “no‑net‑loss in wetland principle”, in exchange for a long‑term and better management for the conservation of fish ponds was accepted.  The PPP Approach was explained in the TPB Paper No 5022 at §§30 and 31:

“… Undoubtedly, the conservation objectives of WCA/CA zoning would be better achieved if the zoning is accompanied by an appropriate wetland management scheme. However, as most of the fish ponds (656 ha) in the area are under private ownership, the cost involved in acquiring them and undertaking the enhancement/management scheme would be prohibitively high. Given the Ramsar Convention also acknowledges that the private sector do have a role to play in wetland conservation, a private‑public partnership approach could be an attractive alternative for positive consideration.

The partnership approach is to allow limited private development by filling up a small portion of fish ponds say(5% ‑ 10%) in exchange for a better management of the remaining ponds within the development site.  As the ‘no‑net‑loss principle’ of the Study refers to both ‘area’ and ‘function’ of wetland, any proposal of this kind must demonstrate that the development would not result in the loss of ecological function of the original ponds in the site.  A wetland enhancement scheme would be necessary to compensate the loss of wetland function and to mitigate the impact of the development.  The developer could be required to surrender the wetland area and/or be responsible for the long‑term management of the conservation/enhancement areas, either directly or possibly through investment in a trust arrangement. …”

18.Thus, TPB PG‑No 12B incorporated the PPP Approach, the “precautionary approach” and the “no‑net‑loss in wetland principle”.  It has since represented the TPB’s policy for considering planning permission applications concerning developments in the Deep Bay Area. The PPP Approach was addressed in §6.3 of TPB PG‑No 12B in these terms:

“While the primary planning intention of the WCA is to conserve the ecological value of fish ponds, if there are strong planning justifications and positive measures to enhance the ecological functions of the existing fish ponds, the Board may consider development with conservation objectives within the WCA under a private‑public partnership approach. Having regard to the precautionary principle and the ‘no‑net‑loss in wetland’ concept, the approach would allow consideration of limited low‑density private residential/recreational development at the landward fringe of the WCA in exchange for committed long‑term conservation and management of the remaining ponds within the development site. Development of this nature should require minimum pond filling and be located as far away from the Deep Bay and/or adjoining to existing development site. Adherence to the ‘no‑net‑loss’ principle would be important to ensure no decline in the wetland functions of the fish ponds within the development site and surrounding ponds. Any such development proposal should be accompanied by an ecological impact assessment with an acceptable and feasible wetland enhancement and management scheme to demonstrate that the development would not result in, or be able to fully compensate for, any loss of the total ecological function of the original ponds on the site and that the development impact can be mitigated. The proposal should also include a mechanism to ensure that the long‑term management of the wetland could be practically implemented and monitored. A development proposal of this kind would be carefully scrutinized either through the objection consideration process or by way of a request to rezone the site to ‘Other Specified Uses (Comprehensive Development and Wetland Enhancement Area)’.”

19.The TPB’s aforesaid policy relating to the PPP Approach, the “precautionary approach” and the “no‑net‑loss in wetland” was later reflected in and incorporated into the OZP in the Note to the OZP (“the Note”) and the Explanatory Statement of the OZP (“the Explanatory Statement”).

20.Insofar as the Note is concerned, the PPP Approach is referred to in the “Planning Intention” in relation to OU(CDWEA) as follows:

“The ‘OU(CDWEA)’ zone is intended for conservation and enhancement of ecological value and functions of the existing fish ponds or wetland, through consideration of application for development or redevelopment under the ‘PPP approach’. Low‑density private residential or passive recreational development within this zone in exchange for committed long‑term conservation and management of the remaining fish ponds or wetland within the development site may be permitted subject to the ‘no‑net‑loss in wetland’ principle and planning permission from the Board. Any new building should be located farthest away from Deep Bay. Development and/or redevelopment shall not result in a total development and/or redevelopment in excess of a maximum gross floor area (GFA) of 148,000 m².”

21.The Explanatory Statement relevantly provided in paragraphs in §§9.8.2 and 9.8.3:

“Having regard to the ‘precautionary approach’ and the ‘no‑net‑loss in wetland’ principle, the planning intention of the ‘OU(CDWEA)’ zone is to conserve and enhance the ecological value and functions of the existing fish ponds or wetland through consideration of application for development or redevelopment under a ‘private‑public partnership approach’. Under the ‘private‑public partnership approach’, the Board may, subject to the ‘no‑net‑loss in wetland’ principle, allow limited low‑density private residential or passive recreational development within this zone in exchange for committed long‑term conservation and management of the remaining ponds or wetland within a development site. Development of this nature should involve minimum pond filling and no decline in wetland function of the fish ponds within and near the development site. Any new development should be located as far away from the Deep Bay and/or adjoining to existing developments in the area. Compensation for loss of wetland area and its ecological functions is required for any development involving pond filling.

New development or redevelopment should be developed in a comprehensive manner and would require planning permission from the Board under section 16 of the Ordinance to ensure that such development or redevelopment would adhere to the ‘precautionary approach’ and ‘no‑net‑loss in wetland’ principle. An applicant should submit such a development or redevelopment proposal to the Board in the form of a comprehensive development scheme to include a layout plan with supporting documents, including an environmental impact study report which should include, inter alia, an ecological impact assessment (EcoIA) and a visual impact assessment; and traffic impact, drainage and sewerage impacts study reports as well as information on programming, phasing and implementation schedule of the development.  The applicant should also submit a wetland conservation and enhancement scheme, including its detailed design, wetland buffer proposals to mitigate the potential impacts on the existing wetland, a maintenance and management plan with implementation details, arrangements of funding and monitoring programme to ensure the long‑term management of the wetland.  The EcoIA should demonstrate that such development or redevelopment proposal would not result in, or be able to fully compensate for, any loss of the total ecological function of the original fish ponds within this zone as well as the ponds nearby, and that the development or redevelopment impact can be fully mitigated through positive measures.  The submission should demonstrate that the development would not cause a net increase of pollution load into Deep Bay.”

22.The last revision to TPB PG-No 12 was made in 2014 (TPB PG‑No 12C).  This revision mainly involved the amendment to the WCA and WBA boundaries to cover the fish ponds and associated wetland and the landward vegetated land in Hoo Hok Wai.  The substance of TPB PG‑No 12B remained unchanged.

(3) The 2011 NNCP Arrangements

23.Separately, the Government has a nature conservation policy which applies to Hong Kong as a whole.  Following a public consultation exercise in 2003, the Government revised its nature conservation policy which became the New Nature Conservation Policy (“NNCP”) in 2004.  In November 2004, the NNCP was presented to the Legislative Council Panel on Environmental Affairs in the paper entitled LC Paper CB(1) 214/04‑05 (01) (“the NNCP LC Paper”), prepared by the then Environment, Transport and Works Bureau.

24.In the NNCP LC Paper, the policy statement of the NNCP is stated at §10 as follows:

“Our nature conservation policy is to regulate, protect and manage natural resources that are important for the conservation of biological diversity of Hong Kong in a sustainable manner, taking into account social and economic considerations, for the benefit and enjoyment of the present and future generations of the community. The policy objectives are —

...

(c) to promote the protection of ecosystems and important habitats, and the maintenance of viable populations of species in natural surroundings;

...

(i) to collaborate with the private sector including the business community, non‑governmental organisations and the academia to promote nature conservation, and to conduct research and surveys as well as to manage ecologically important sites for such purpose…”.

25.In summary, under the NNCP and the related implementation programme:

(1)     A scoring system was introduced to identify priority sites in Hong Kong for enhanced conservation, so that the Government’s limited resources could be allocated first towards conservation of these priority sites (§§11 ‑ 13 of the NNCP LC Paper).  Applying this scoring system, the Ramsar Site and the Deep Bay Wetland outside the Ramsar Site were among the 12 priority sites identified.

(2)     The Government introduced a public-private partnership measure (“the NNCP PPP Scheme” mentioned earlier) under the NNCP, under which developments at an agreed scale would be allowed at the less ecologically sensitive portion of a priority site provided that the developer undertakes to conserve and manage the rest of the site that is ecologically more sensitive on a long‑term basis (§17 of the NNCP LC Paper).

(3)     Submissions under the NNCP PPP Scheme would be considered by an inter-departmental task force specially established and chaired by the Environment, Transport and Works Bureau (now the Environment Bureau (“EB”)), and selected proposals would be submitted to the Executive Council for approval (§19 of the NNCP LC Paper);

(4)     Thereafter, to implement the proposal, the developer would still be required to fulfil the statutory requirements including application for change of land use zoning or application for planning permission where appropriate in accordance with the TPO, and application for an environmental permit under the Environmental Impact Assessment Ordinance, Cap 499 (“the EIAO”) where the proposed development involves designated projects as defined in the EIAO (§21 of the NNCP LC Paper).

26.It is further stated at §§36 and 37 of the NNCP LC Paper that:

“The new policy statement is in line with the sustainability principle of maintaining the biodiversity in Hong Kong. The establishment of the Expert Group together with the scoring system has provided a more objective and participatory mechanism for identifying a list of priority sites for enhanced conservation. …

The two new measures, viz. management agreement and PPP, aim to encourage support and participation of key stakeholders, including landowners, developers and NGOs, in conserving ecologically important sites, and are consistent with the ‘partnership’ principle of sustainable development. However, their precise sustainability implications could only be assessed when the implementation details are drawn up if it is decided to implement the two measures on a long‑term basis. ... Moreover, effective means have to be put in place to avoid possible abuse by private landowners or developers while incentives are provided to attract them into implementing the options. … ”.

27.In June 2011, the EPD set up a funding and land management framework under the NNCP PPP Scheme to sustain the long‑term management of the ecologically sensitive portion of the priority sites (“the 2011 NNCP Arrangements” mentioned earlier).  These were presented and explained to members of the Legislative Council in a paper prepared by the EPD in May 2011 entitled ECF Paper 14/2011-12 (“the ECF Paper”). As stated in the ECF Paper, the arrangements specifically applied to Fung Lok Wai, which covered the development site, and the relevant funding arrangement that should be set up under the 2011 NNCP Arrangements was further stated at §§6 and 7 as follows:

“Both the Fung Lok Wai and Sha Lo Tung developers have undertaken in their EIA/EA reports to be fully responsible for the construction, creation, enhancement, maintenance and proper management of the Wetland Nature Reserve / Ecological Reserve proposed in the EIA reports. While the two project proponents have indicated that they are willing to set aside certain funds as seed money to support the long term conservation of the ecologically sensitive portions, concerns have been raised on how the funding support can be sustained particularly when the developments are completed and sold to small individual owners. Having considered various options including that made by the developers to set up a private trust, we consider that an upfront lump sum donation sufficient to generate recurrent incomes to support the pledged conservation programmes could be made to the ECF [EnvironmentConservation Fund], which is established under the ECF Ordinance (Cap. 450) and is under the oversight of Secretary for the Environment as the trustee. The ECF provides funding to education and research as well as other projects which are related to environmental protection and conservation. As a statutory trust, the ECF has in place a credible and accountable mechanism for holding the donations by the project proponents. As regards the amount of the upfront donation to the ECF, it will be derived having regard to the estimated expenditure for conserving the ecologically sensitive portion of the site, and the assumed long-term rate of investment of the ECF. …

To ensure that the conservation works are properly conducted, the developers will be required to identify competent bodies (e.g. green groups) as their conservation agents to manage the ecologically sensitive portion of the concerned sites.  The developers should advise their conservation agents to apply for funding support from the ECF for carrying out conservation projects, the details of which should be consistent with that in the approved EIA reports and set out in their ECF applications. Moreover, the conservation agent should demonstrate in the application that members of the public will be allowed access to the ecologically sensitive site under private ownership, for nature appreciation or education purposes with suitable control such that the ecological features of the site would not be adversely affected. …  In the event that the project proponent could not identify a competent conservation agent, or the ECF Committee disapproves the applications of the conservation agents identified by the project proponents, the Agriculture, Fisheries and Conservation Department (AFCD) will be prepared to identify competent agencies to apply for funding from the ECF, and will take up such work as the conservation agents during the interim period if necessary.”

28.The 2011 NNCP Arrangements were then presented by the EB to the TPB by way of the TPB Paper 8869 at the 987^th meeting of the TPB held on 15 July 2011.  At the meeting, the Deputy Director (Environmental Protection) of the EPD, Mr Albert Lam, covered the main points of the 2011 NNCP Arrangements detailed in the paper as stated in §22 of the minutes of the meeting:

“(a) under the New Nature Conservation Policy (NNCP) that was launched since 2004, 12 priority sites of high ecological importance were identified for enhanced conservation. As a substantial portion of those sites were in private ownership, EPD had launched amongst others, the PPP scheme to better protect these sites;

(b) under the PPP scheme, developments of an agreed scale would be allowed at the less ecologically sensitive portions of the priority sites, provided that the developer undertook to conserve and manage the rest of the site that was ecologically more sensitive on a long‑term basis. Some PPP schemes would require planning permission from the Board;

(c) when the Advisory Council on the Environment (ACE) considered the Fung Lok Wai and Sha Lo Tung proposals and their Environmental Impact Assessment (EIA) /Environmental Assessment (EA) Reports, it had asked the Government to develop necessary mechanism to ensure that the ecological mitigation and enhancement measures proposed would be fully implemented and sustained;

(d) the Government had decided to implement a funding and land management framework to sustain the long‑term management of the ecologically sensitive portion of the priority sites to take forward the PPP schemes. This briefing would focus on the funding arrangement whilst the land management arrangement was set out in paragraph 7 of the ACE paper in the Annex of the Paper; and

(e)  it was proposed that an upfront lump sum donation sufficient to generate recurrent incomes to support the pledged conservation programmes of the PPP schemes would be made to the Environment and Conservation Fund (ECF).  ECF was a statutory fund established under the ECF Ordinance (Cap. 450) and was overseen by the Secretary for the Environment as a trustee.  As a statutory trust, the ECF had put in place a credible and accountable mechanism for holding the donations by the project proponents.”

29.Mr Lam then answered questions raised by the meeting, at the end of which the Chairman concluded that the TPB “supported the new funding and land management arrangements to take forward the conservation and development proposals for the PPP schemes on the priority sites.” (§28 of the minutes).

(4) The Application

30.The development site covers an area of 80 hectares and the proposed development involves conversion of about 76 hectares of fish ponds (95% of the development site) into a Wetland Nature Reserve (“WNR”) and 4 hectares (5% of the development Site) into a residential development. The proposed residential development under the Application comprises 19 blocks for 1,958 units with a gross floor area of 147,985m² located at the southern landward fringe of the development site.  The WNR comprises an area of 61.6 hectares retained and ecologically enhanced fish ponds and a created freshwater marsh habitat of about 14.4 hectares.  The existing 31 ponds will be consolidated to form 18 large ponds.  The interested party proposes to enhance the ecological values and functions through re-profiling pond bunds to form larger ponds with shallow sloping and irregular margin to increase feeding opportunities for water birds as well as active ongoing management.  A potential alternative egretry (a nesting colony for egrets and other birds) of approximately 2,000m² to replace an abandoned egretry near Shing Uk Tsuen is also proposed.

31.Before going on to the details of the Application, it is pertinent to note that because the proposed development falls within designated projects as defined in the EIAO, an environmental impact assessment (“EIA”) was required to be carried out.  The EIA report was submitted under the EIAO with a funding proposal and was approved by the DEP with conditions in November 2009.  This was before the 2011 NNCP Arrangements were set up by the EPD.

32.According to TPB PG-No 12B, the development site falls within WCA.  As stated in the Schedule of Uses in the Note for the “OU(CDWEA)” zone, any development and filling of land/pond or excavation of land require planning permission from the TPB under the PPP Approach and the “no‑net‑loss in wetland” principle.  Further, as stated in §9.8.3 of the Explanatory Statement, the development proposal to the TPB should include an EcoIA with an acceptable and feasible wetland enhancement and management scheme and a mechanism to ensure that the long-term management of the wetland could be practically implemented and monitored.

33.The interested party first submitted the Application to the TPB on 4 August 2011, with a supplementary planning statement, technical appendices including an EcoIA, Further Analysis of the Ecological Impacts of the Refined Development Layout, draft Habitat Creation^[4] and Management Plan (“Draft HCMP”) for the WNR, Management Proposal for the Wetland Nature Reserve, Traffic Impact Assessment, Tree Survey and Master Landscape Submission, Environmental Monitoring and Audit Manual, Visual Impact Assessment, Environmental Assessment and Sewerage and Drainage Impact Assessment.  The documents were submitted in accordance with the requirements in Remark (a) in the Schedule of Uses and §9.8.3 of the Explanatory Statement.

34.From August 2011 to November 2013, the interested party submitted further information providing clarification, revised or updated technical assessments, and responses to departmental comments on 20 occasions. The Application was circulated to relevant government departments for comment. It was also published for public inspection and comment on nine occasions between September 2011 and September 2013.  All of the further information submitted by the interested party had also been made available for public inspection.  A total of 745 public comments were received, with 663 objecting to and 82 in support of the Application.

35.The interested party’s submissions, the departments’ views, public views as well as the PlanD’s views were then consolidated into a RNTPC Paper No A/YL‑LFS/224F (“the RNTPC Paper”) prepared by the PlanD for the consideration of the RNTPC of the TPB at the meeting held on 22 November 2013 (“the Meeting”).

(5) The RNTPC Paper

36.As set out in the RNTPC Paper, most of the departments circulated with the Application were satisfied with the technical details therein and had no objection to it.  Relevant for present purpose, the DEP had the following comments.

37.The DEP confirmed that the environmental issues and findings mentioned in the Environmental Assessment were in line with the EIA Report approved under the EIAO by the DEP in 2009.  However, the implementation arrangement for the WNR proposed by the interested party did notcomply with the funding and land arrangement under the 2011 NNCP Arrangements in that under the 2011 NNCP Arrangements, funding of the conservation plan is to be arranged through the ECF established pursuant to the Environment and Conservation Fund Ordinance, Cap 450 (“the ECFO”).  The DEP took the view that the proposed long‑term maintenance and management plan of the interested party using a private trust arrangement did not provide for a comparable assurance on long‑term viability of the conservation plan as compared to the use of the ECF, and hence from “a nature conservation policy point of view”, she had reservation on this aspect of the Application.

38.Despite the above concern, the DEP made clear that she would have no objection to the Application if the interested party was to follow the land and funding arrangement in the 2011 NNCP Arrangements and recommended the following approval conditions for the consideration of the TPB:

“(i) the submission and implementation of a funding arrangement proposal in accordance with the arrangement proposed by Government and supported by the [TPB] in July 2011 for ensuring the long-term maintenance and management of the proposed [WNR] to the satisfaction of the [DEP] and the [DAFC], or of the [TPB]; and

(ii) land exchange and/or lease modification for the proposed development if considered and approved by the Director of Lands, should not be executed prior to the compliance with condition (i) to the satisfaction of the [DEP] and the [DAFC], or of the [TPB].”^[5]

39.Based on its assessment of the 2011 NNCP Arrangements, the PlanD expressed agreement with the DEP and stated as follows:

“According to the land and funding arrangement under the prevailing conservation policy, the project proponents are expected to inject an upfront seed money to the [ECF] sufficient to generate recurrent cost for managing the conservation portion of the development on a long term basis, and that the project proponent will appoint a competent conservation agent to apply for funds from ECF to manage the conservation portion. While the applicant’s land and funding proposal is not fully in compliance with that promulgated by Government, it is considered that the issue can be resolved through imposing approval conditions as recommended by DEP and DAFC in paragraph 13.2 (o) and (p) below should the [RNTPC] agree to approve the [Application].”^[6]

40.The PlanD then set out the suggested approval conditions for the reference of the RNTPC in §13.2 of the RNTPC Paper.  Conditions (o) and (p) proposed by the PlanD were subsequently adopted by the RNTPC at the Meeting without any change when it decided to grant the Application subject to conditions.  Condition (o) is a slightly simplified condition, corresponding to condition (i) put forward by the DEP^[7]. Condition (p) is in the same terms as condition (ii).

(6) The Meeting and the Decision

41.The Application was considered by the RNTPC of the TPB at the Meeting.  A detailed presentation was made by Mr Ernest Fung, the Senior Town Planner/Tuen Mun and Yuen Long, on (among other things) the proposal and the departmental comments.  In respect of the long-term funding and management, Mr Fung stated as follows:

“with regard to the long-term management of the WNR, the applicant indicated that the maintenance and management plan of the WNR in this planning application followed the proposal in the EIA report approved under the EIAO. The applicant would be fully responsible for the construction, maintenance and proper management of the WNR. To ensure the long-term viability of the conservation plans, the applicant would take sole responsibility of the management of the WNR until a designated successor was identified to the satisfaction of the Government. An independent and non-profit making foundation was proposed to be established to take over the long-term management together with the ownership of the WNR. The independent foundation would implement the HCMP submitted with the EIA report under the EIAO. In any event, as required by the [DEP] when the EIA report was approved under the EIAO in 2009, the applicant should submit the final funding proposal to the Advisory Council on Environment (ACE) for approval before the application for the Environmental Permit was made;”^[8].

42.Mr Fung also repeated the views of the PlanD in the RNTPC Paper mentioned earlier^[9].

43.Members raised questions with representatives of the PlanD, the Agriculture, Fisheries and Conservation Department (“AFCD”) and the EPD on issues including the NNCP PPP Scheme and the EPD’s views on the proposed funding arrangement of the interested party.

44.In response to a member’s questions on the proposed funding arrangements, it was explained by the AFCD and the EPD that the annual management fund for the WNR of about $3 million was estimated by the project proponent several years ago, that the funding arrangement had yet to be agreed between the applicant, the AFCD and the EPD, and that the amount of the annual management fund would be discussed in the submission by the interested party in future^[10].

45.As for the pros and cons of the funding arrangements proposed by the Government in the 2011 NNCP Arrangements and by the interested party, the EPD said as compared with the private foundation proposed by the interested party, the funding under the Government proposal (ie the ECF) was “more centralised and systematic, which would be more reliable and better guarantee adequate resources for the long-term conservation of the wetland.”^[11]

46.During the deliberation session, a member raised objection to the Application and expressed reservation on the proposed conservation arrangement by the interested party.  The minutes recorded this objection as follows:

“The applicant had not provided the details of the funding arrangement, including the amount of seed money committed by the applicant; when a successor for the management of the WNR could be identified; and whether the applicant would bear the responsibility of managing the WNR if no such successor could be identified. The Member doubted whether the developer could follow through and implement the committed measures. The Member further said that all required technical assessments should be submitted to the satisfaction of the relevant government departments before the Committee could approve the application.”^[12]

47.In response, the Chairman said that the interested party had already submitted all the necessary technical assessments which were acceptable to relevant government departments.  The Secretary to the RNTPC referred members to the precedent established in the Wo Shang Wai case in which the RNTPC granted planning permission subject to approval conditions which were the same as Conditions (o) and (p)^[13].

48.Members agreed that approval conditions (o) and (p) should be imposed as a package to ensure that the funding arrangement of the project would be implemented to the satisfaction of the EPD and the AFCD. After deliberation, the RNTPC made the Decision to approve the Application subject to 17 conditions, including Conditions (o) and (p)^[14].

This appeal

49.The central issue in this appeal is whether the 2011 NNCP Arrangements of the EB constituted part of the requirements under the TPB’s PPP Approach, either generally or specifically for the development site within Fung Lok Wai, such that the TPB is bound by the 2011 NNCP Arrangements in considering the Application.  The judge held in the affirmative, both generally and specifically, as a matter of construction and because the TPB must objectively be regarded to have adopted the 2011 NNCP Arrangements when these arrangements were supported by the TPB at its meeting of 11 July 2011.

50.The argument concerns the funding and management mechanism which should be put in place to ensure that the long-term management of the wetlands could be practically implemented and monitored.  There are two outstanding issues.  The first relates to the amount of $3 million for the annual management fund for the WNR.  This does not appear to be much of an issue, as it was recognised at the Meeting that this amount was proposed several years ago and it would be discussed in the submission by the interested party in future.  The other is whether the maintenance fund to be donated by the interested party should be provided to the ECF and managed thereunder or to an independent foundation as proposed by the interested party.  There is no other outstanding issue in respect of the other aspects of the development site.

51.As mentioned earlier, the DEP had approved the funding proposal in the EIA report in November 2009 before the 2011 NNCP Arrangements were implemented.  The funding proposal submitted in the Application followed the earlier proposal.  The interested party proposed to provide the seed money to an independent, non-profit making foundation which is to take over the long-term management of the WNR and that the interested party would take sole responsibility for the management of the WNR until a designated successor is identified to the satisfaction of the Government.  Further, in any event, it was required by the DEP when the EIA report was approved under the EIAO in 2009 that the interested party should submit the final funding proposal to the Advisory Council on Environment for approval before the application for the Environmental Permit is to be made.  The Government would remain the final gatekeeper of the environmental aspect of the development through the grant or withholding of the Environmental Permit, so if the funding and management mechanism is not set up in a manner totally to the satisfaction of the DEP, the matter would be resolved in the application for the Environmental Permit.

52.It is apparent from the stance taken by the EPD and the PlanD at the Meeting that whilst the Government’s preference was to make use of the ECF and the mechanism under the ECFO, this was not regarded as a sticking point or a matter of principle that should stand in the way of the TPB granting planning permission for the Application.  It was clearly stated in the RNTPC Paper that the DEP “has no objection to the project” provided that certain approval conditions were adopted dealing with the submission and implementation of a funding proposal in accordance with the 2011 NNCP Arrangements. Condition (o), which was imposed by the TPB at the Meeting, is the slightly simplified version of the condition proposed by the DEP.  As it transpired, by accepting Condition (o) as recommended by the Government as an approval condition, the TPB had taken into consideration and given substantial weight to the 2011 NNCP Arrangements.

53.Mr Johnny Mok, SC, who appeared for the TPB^[15], submitted that there is no inherent inconsistency between the TPB’s PPP Approach and the 2011 NNCP Arrangements of the EB.  The two regimes apply to different stages of the developer’s application process.  Submissions under the NNCP PPP Scheme would be considered by a special task force of the EB and selected proposals would be submitted to the Executive Council for approval.  Thereafter, to implement the proposal, the developer would still be required to fulfil the requirements in an application for planning permission in accordance with the TPO.  Whilst the TPB was entitled to, and did, take into account the 2011 NNCP Arrangements in considering the Application, the TPB was entitled to give the 2011 NNCP Arrangements such weight it considered appropriate, subject only to rationality.  There was no rationality challenge in this application for judicial review.

54.Three broad contentions were raised by the TPB in this appeal:

(1)     the TPB had not adopted the 2011 NNCP Arrangements as part of the requirements of the PPP Approach under its own policies;

(2)     the TPB had not unlawfully deferred its statutory duty to the DEP and the DAFC by imposing Condition (o) in approving the Application; and

(3)     the alleged legitimate expectation that the TPB would take into account the 2011 NNCP Arrangements in applying the PPP Approach is not established.

55.These contentions will be considered in the order set out above.

If the TPB had adopted the 2011 NNCP Arrangements as part of the PPP Approach under its own policy

56.In construing the documents relating to the TPB policy and the planning intention (mainly TPB PG‑No 12B, the Note and the Explanatory Statement) in the relevant context (that as the Deep Bay Area is of recognised important ecological and conservation value and thus of significant public interest, it should be protected and conserved on a long-term basis), the judge identified two objectives to be achieved:

(1)     The first objective is to conserve and enhance the ecological value and functions of the existing fish ponds and wetlands on a long-term basis, which is to be achieved through the consideration of application for development in the Deep Bay Area under the PPP Approach.  The relevant funding and monitoring programme in a development proposal is plainly an essential facet of the PPP Approach, as this is to ensure that the long-term management of the wetlands could be practically implemented and monitored.

(2)     The second objective is that the proposal for development under the PPP Approach is to be subjected to close scrutiny through the planning application process.  This is consistent with the context that, given the recognised high ecological and conservation value of the Deep Bay Area, it is in the public interest that development proposals relating to the area must be subjected to stringent assessment.  It is only with sufficient and necessary details of the funding arrangements that a practical and useful exercise of close scrutiny (both by the public and the TPB) can be properly conducted in the application process, to ensure that the proposal is able to sustain and achieve long-term conservation and management of the protected site^[16].

57.Based on these objectives, the judge took the view that when the TPB expressed its support of the 2011 NNCP Arrangements when they were presented to the TPB by the EB at the meeting on 15 July 2011, objectively viewed the TPB must have adopted the 2011 NNCP Arrangements to constitute part of the requirements under the PPP Approach.  This is particularly so as the PPP Approach in the TPB policy and the NNCP PPP Scheme which includes the 2011 NNCP Arrangements serve the same objective to secure the long-term conservation and enhancement of the ecological value and functions of the protected sites^[17]. Alternatively, at the very least, the TPB must have adopted the 2011 NNCP Arrangements as part of the requirements under the PPP Approach for the specific purpose of considering planning application at Fung Lok Wai, which included the development site, as it was stated in EB’s presentation to the TPB at the meeting on 15 July 2011 that the 2011 NNCP Arrangements were promulgated for the development proposal at Fung Lok Wai and Sha Lo Tung^[18].

58.In respect of the first objective identified by the judge, I am inclined to agree with Mr Mok whilst it may be desirable that the TPB and the EB should co-operate with each other to conserve and enhance the ecological value and functions of the existing fish ponds or wetlands on a long-term basis, the pursuit of common objectives does not require the adoption of shared policies.  As to the second objective, I also agree with Mr Mok that a development proposal can still be carefully and meaningfully scrutinised by the TPB without adopting the 2011 NNCP Arrangements as part of the requirements under the PPP Approach.  What is required under §6.3 of TPB PG‑No 12B is that “The proposal should also include a mechanism to ensure that the long-term management of the wetland could be practically implemented and monitored.”  This does not mean a workable mechanism must invariably take the form as suggested in the 2011 NNCP Arrangements.  The funding proposal of the interested party followed the proposal in the EIA report that had been approved by the DEP in 2009.  There was no suggestion that the funding proposal of the interested party was not workable.

59.The difference between a requirement that is part of the TPB policy and one that is not is that the former is binding on the TPB whereas the latter is a matter for the TPB as regards its relevance and weight in a given situation.  No discretion or flexibility would be left to the TPB in the former situation.  In light of this consideration, it seems to me that in construing the TPB policy and the planning intention, it is more important to have regard to how a policy had come to be adopted by the TPB as its own policy.

60.It is clear from the narrative given in the background section that this was done through a formal process.  Whilst there was a good deal of interaction between the statutory body (the TPB) and the Government agency (the EB), and they often acted in tandem in the pursuit of the common goal to conserve and enhance the ecological value and functions of protected sites, formal steps were observed by the TPB in implementing its own guidelines and policies.  That was the position in September 1992 and August 1993, when the first sets of guidelines were endorsed by the TPB.  Where revisions were made to an existing policy of the TPB, they would be set out in a document of the TPB (such as TPB PG-No 12A, TPB PG-No 12B and TPB PG-No 12C) and would be subsequently reflected in and incorporated into the OZP in the Note and the Explanatory Statement of the OZP.  There is no document promulgated by the TPB that expressly adopted the 2011 NNCP Arrangements of the EB.  Nor is there anything in the Note or the Explanatory Statement of the OZP that added to or expanded upon the requirement in §6.3 of TPB PG‑No 12B.

61.Under Remarks (a)(ii) of the Note to the OZP, an applicant is required to submit documents showing “a wetland conservation and enhancement scheme, including its detailed design, wetland buffer proposals, a long-term maintenance and management plan, and monitoring and implementation mechanism” (emphasis supplied).

62.Whilst §9.83 of the Explanatory Statement of the OZP requires an applicant to submit “a wetland conservation and enhancement scheme, including its detailed design, wetland buffer proposals to mitigate the potential impacts on the existing wetland, a maintenance and management plan with implementation details, arrangements of funding and monitoring programme to ensure the long‑term management of the wetland”, the “arrangements of funding and monitoring programme” that are required to be included in the “wetland conservation and enhancement scheme” are not part of the “maintenance and management plan with implementation details”, contrary to the judge’s holding^[19].

63.Mr Mok drew attention to the words of Lord Steyn in In re McFarland [2004] 1 WLR 1289 at §24 that in interpreting statements of policy made by a public body, the primary point of reference is the text used, as the public is entitled to rely on the language of the policy statements, read in their proper context.  He submitted that under the TPB’s own policy documents, only “a mechanism to ensure that the long-term management of the wetland could be practically implemented and monitored” is required to be identified.  There is no requirement that a particular form (such as funding in the form of an upfront donation to the ECF under the 2011 NNCP Arrangements) must be adopted. I think that must be right.

64.Nor do I agree with the judge that objectively viewed, the TPB should be regarded as having adopted the 2011 NNCP Arrangements of the EB as part of the requirements under its own PPP Approach, whether generally or specifically for Fung Lok Wai, by merely expressing support for those arrangements at the July 2011 meeting, without more.  Read in its proper context, in making the presentation at that meeting, the EB was not seeking to have the TPB endorse or adopt the 2011 NNCP Arrangements as part of TPB’s own policy, but was merely providing information to the TPB on how the EB would implement the 2011 NNCP Arrangements including the NNCP PPP Scheme for the priority sites.  After that meeting, no amendment was made to TPB PG‑No 12B, the OZP, the Note, or the Explanatory Statement to incorporate the 2011 NNCP Arrangements, even though revision was made to the TPB Guidelines in 2014 which resulted in TPB PG‑No 12C.

65.For the above reasons, I think the judge was wrong to hold that the TPB had adopted the 2011 NNCP Arrangements as part of the requirements of the PPP Approach under its own policies.  The TPB was at liberty to treat those arrangements as a relevant consideration, and give them such weight as it thought appropriate in all the circumstances, subject to rationality.

If the TPB had unlawfully deferred its statutory duty to the DEP and the DAFC by imposing Condition (o)

66.The judge held that the TPB had acted ultra vires in approving the Application by imposing Condition (o) as it had deferred its own duty to satisfy itself that the Application met the PPP Approach with the 2011 NNCP Arrangements to the DEP and the DAFC^[20]. This followed from his holding that the arrangements constituted part of the requirements under the PPP Approach either generally or specifically for application in relation to Fung Lok Wai, so the TPB had to satisfy itself that the arrangements had been met in considering whether to approve the Application^[21].

67.As I have formed the view that the judge was in error in his earlier holding, this contention may be dealt with succinctly.

68.As submitted by Mr Mok, the most important point to note here is that when the TPB approved the Application subject to conditions including Condition (o), it was on the basis that the Government had made it abundantly clear, in the RNTPC Paper and at the Meeting, that the Government “would have no objection if the applicant followed the land and funding arrangement as set out in the submission (TPB Paper No 8869 – Arrangements to Implement Conservation and Development Proposals Involving the Priority Sites for Enhanced Conservation) by the Government to the Board in July 2011”^[22], namely, the 2011 NNCP Arrangements, and that the land and funding arrangement under the Government policy involved the injection of an upfront seed money to the ECF and the appointment of a competent conservation agent to apply for funds from the ECF to manage the conservation portion of the development^[23]. It was in those circumstances that Condition (o) was recommended by the Government and accepted by the TPB at the Meeting.

69.Condition (o) stipulates: “the submission and implementation of a funding arrangement proposal for ensuring the long‑term maintenance and management of the proposed [WNR] to the satisfaction of the [DEP] and the [DAFC], or of the TPB”.  In accordance with its terms, although the discretion to approve the funding arrangement proposal could be exercised by the DEP and the DAFC, it is likely that the DEP and the DAFC would find the proposal to their satisfaction if it involved the injection of an upfront seed money to the ECF and the appointment of a competent conservation agent to apply for funds from the ECF to manage the WNR.  This discretion could also be exercised by the TPB itself, if the interested party did not submit a funding arrangement proposal to the satisfaction of the DEP and the DAFC.

70.Thus, in effect, Condition (o) would result in either the funding arrangement proposal preferred by the Government to be implemented, or, in default, such proposal would be subject to the TPB’s own approval.  There is therefore no question of the TPB deferring its statutory duty to the DEP and the DAFC by leaving some critical and essential matter to be decided by them in circumvention of the TPB’s scrutiny.  The DEP and the DAFC are the authorities entrusted with the implementation of the 2011 NNCP Arrangements, and have the necessary expertise concerning the setting up of the ECF and the appointment of a conservation agent.  It was clearly appropriate for the TPB to rely on the DEP and the DAFC to address the issues concerning the 2011 NNCP Arrangements.  Nor is this the situation where a planning condition was imposed on the footing that details would be worked out later where such details are “critical to the decision as to whether planning permission should be granted at all”.  (Delight World Ltd v The Town Planning Appeal Board [1997] HKLRD 1106 at 1116E to F)

71.I would uphold the contention of the TPB that it had not unlawfully deferred its statutory duty to the DEP and the DAFC by imposing Condition (o).

If there is legitimate expectation that the TPB would take into account the 2011 NNCP Arrangements in applying the PPP Approach

72.The alleged legitimate expectation is based on the 2011 NNCP Arrangements being adopted as part of the TPB’s own policy.  As I have found in favour of the TPB that the arrangements have not been so adopted, the TPB is also correct that there is no such legitimate expectation.

Conclusion and costs

73.I would allow the TPB’s appeal and set aside the judge’s order quashing the Decision and make an order in lieu thereof that the application for judicial review be dismissed.

74.I would make these orders nisi relating to the costs on appeal and below.  The orders would be made absolute if there is no application for variation within 14 days of the handing down of our judgment.

75.The costs order for the application for judicial review would be set aside and replaced with an order that the TPB should have the costs of the application.  The order that the applicant’s own costs be taxed in accordance with the Legal Aid Regulations would stand.

76.As neither the applicant nor the interested party has taken part in this appeal, I would make no order as to the costs of this appeal.

Hon Barma JA:

77.I agree with the judgment of Kwan VP.

Hon G Lam JA:

78.I agree with the judgment of Kwan VP and the orders she proposes.

Ho, Tse, Wai & Partners, assigned by the Director of Legal Aid, for the Applicant (Respondent)

Mr Johnny Mok SC and Ms Catrina Lam, instructed by Department of Justice, for the Respondent (Appellant)