Lo Siu Lan and Another v. Hong Kong Housing Authority

CACV 378/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 378 OF 2004

(ON APPEAL FROM HCAL NO.154 OF 2004)

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BETWEEN

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Before: Hon Ma CJHC, Stock & Le Pichon JJA in Court

Date of Hearing: 16 December 2004

Date of Judgment: 16 December 2004

Date of Handing Down Reasons for Judgment: 17 December 2004

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J U D G M E N T

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Hon Ma CJHC :

Introduction

1.On 14 December 2004, Hartmann J gave judgment in favour of the Respondent (“the Housing Authority”) dismissing an application for judicial review that had been brought by the Applicants (who are both residential tenants of public housing) regarding the proposed sale (or divestment) by the Housing Authority of certain retail and car parking facilities in housing estates (“the RCPF”), these being mainly shops and car parking spaces.  The proposed sale is to be to a company incorporated in the Cayman Islands called The Link Properties Limited (“Link Properties”).  Only the 1st Applicant has appealed the decision.

2.The background to the sale is the wish of the Housing Authority to raise capital to help its finances.  It is common ground the Housing Authority is experiencing a severe budgetary deficit.  In order to raise finances, the Housing Authority has proposed to offer for purchase by the public in Hong Kong and to certain investors internationally, units in a trust called the Link Real Estate Investment Trust  (“REIT”).  The public offer of these trust units in Hong Kong was made on 6 December 2004 and is, I understand, heavily oversubscribed.  The number of units in REIT on offer in Hong Kong is 197,220,000.  The global offering to institutional, professional and other investors involves 1,774,979,000 units.  Dealing in REIT units was originally planned to commence on 16 December 2004 when these units would be listed on the Hong Kong Stock Exchange, but by reason of the present litigation, this has been postponed to 20 December 2004.  We have been told by counsel that there is no further extension possible.

3.It is not necessary to go into great detail as to how the REIT units are intended to represent an investment in the RCPF.  Essentially, REIT would purchase the shares in another Cayman Islands company called The Link Holdings Limited (“Link Holdings”) which in turn would eventually acquire the shareholding in (and therefore control of) Link Properties.  As observed above, it is to Link Properties that the RCPF would be sold by the Housing Authority.

4.The proposed divestment by the Housing Authority of the RCPF was decided in principle on 24 July 2003 together with a proposed budget of $120,000,000 to meet initial expenses for appointing advisers and consultants for the project (this amount has since been spent).  This decision was announced publicly that day receiving widespread media coverage.  It was announced that the proceeds from the divestment would exceed $20 billion.  The justification for the divestment was stated thus, “The divestment of the Authority’s commercial facilities, including retail properties of 1 million square metres and 100,000 car parking spaces, would enable the Authority to focus on its primary mission to provide subsidized housing to people in need”.

5.In August 2003, the Housing Authority, by an Information Note on the proposed divestment, sought the views of the public.  There is, however, no evidence that has been drawn to our attention as to when the Housing Authority made an announcement (if it did at all) as to the results of the consultation and any decision based on it.

6.Later in 2003 and into 2004, decisions were made to appoint joint global coordinators for the project (being Goldman Sachs (Asia) LLC, HSBC and UBS AG) (31 October 2003), to appoint a chief executive officer of REIT (21 April 2004), to introduce a voluntary exit scheme for civil servants affected by the divestment plan (also 21 April 2004) and the appointment of a strategic partner to a management company (27 August 2004).  All these decisions were publicly announced.

7.On 19 November 2004, the Housing Authority decided to enter into an agreement to sell to Link Properties the RCPF.  This was apparently made known to the public only on 25 November 2004.  On that date, in the Offering Circular for the global offering of the trust units, the precise locations of the relevant RCPF to be sold by the Housing Authority were revealed for the first time to the public.  However, it was not until 8 December 2004 that a notice of application for leave to apply for judicial review was issued by the Applicants.  By that time, the offer to the Hong Kong public of REIT units had already commenced and it was clear to everyone (including the Applicants) that dealing in the units was expected to begin on 16 December 2004.  In other words, time for the judicial review application to be dealt with by the courts was extremely short.

8.The application for leave and the substantive application itself were heard by Hartmann J over the course of 13 and 14 December 2004.  The decision of the judge (together with brief reasons) were given on the evening of 14 December 2004.  Detailed reasons were provided to the parties the next day.

9.On 15 December 2004, the Housing Authority applied by summons to have the time for appealing Hartmann J’s decision abridged.  This Court heard the application in the afternoon (following an ex parte hearing in the morning although notice was given to the Applicants).

10.After hearing submissions from Mr Daniel Fung SC for the Housing Authority and Mr Philip Dykes SC for the Applicants, it was ordered that time for appealing be abridged to 1:00 pm on 16 December 2004 and that if a notice of appeal was served, that the appeal be heard at 2:30 pm.  As noted above, only the 1st Applicant has appealed.  She is a tenant in an estate not directly affected by the proposed sale of the RCPF.  Her locus to institute judicial review proceedings, not challenged by the Housing Authority, was on the basis that she used the retail facilities in a neighbouring estate that is directly affected by the proposed sale of the RCPF.

Reasons for the 15 December 2004 order for abridgment

11.Under RHC O.59 r.4, parties are usually given 28 days within which to serve a notice of appeal if it be their intention to do so.  This period can of course be abridged : see O.3 r.5.  However, generally speaking, an abridgment of what otherwise would be the permitted time under the Rules to do something requires, in my judgment, in the absence of consent, exceptional reasons.  In the notes to Hong Kong Civil Procedure 2004 Vol.1 at paragraph 3/5/4, reference is made to the decision of Waung J in Talent Hope Ltd v Magnificent Estates Ltd [1995] 3 HKC 593, in which it was said that before an abridgment of time was given “very special or urgent reasons must be shown” : - see 597E-F.  I agree with the observation of the judge in that case that an order abridging time cuts into a party’s rights.  In a case such as the present, an order would cut deeply into what otherwise would be the Applicants’ right of appeal.  However, in my view, urgency is not necessarily enough by itself to justify an order for abridgment.  Often, its existence would merely be the pre-requisite before an application will be considered although it should be acknowledged that in the absence of compelling countervailing factors, the existence of urgency might well tilt the balance.

12.In the present case, exceptional reasons existed for the abridgment to be ordered : -

(1)    The very tight timetable I have briefly described above meant that there was urgency in dealing with this appeal.  Not only that, there was in my view extreme urgency.  Mr Fung read out to the Court a statement from the solicitor advising the global coordinators of the initial public offering of the REIT units (now confirmed in an affidavit) to the effect that if an appeal was in existence or there was a significant likelihood of one, the whole transaction would simply not proceed.  Further, if the listing did not proceed on 20 December 2004, the whole offering would lapse.  As noted above, counsel told this Court that any further extension to the proposed listing was impossible.  This would severely prejudice the many investors in Hong Kong who have subscribed to the trust units.  Further, the statement (now the affidavit) said that for the transaction to proceed according to the existing timetable, a formal announcement was needed in the newspapers by the morning of 17 December, with consequential earlier publication deadlines.  The effect of the representations made to us was that to avoid a complete unravelling of the entire IPO, a decision, one way or the other, was required by the evening of 16 December; failing which the IPO would not proceed.

(2)    Against this was the position of the Applicants.  As far as any prejudice to them was concerned, this has been considerably alleviated by the very fair way in which Mr Dykes said to the Court that an abridgment to 1:00 pm on 16 December 2004 was acceptable to him.

13.The foregoing reasons to order an abridgment of time to appeal also justify the order to hear this appeal at 2:30 pm on 16 December 2004.  Although Mr Dykes submitted that the time for preparation was too short, I take the view that given the experience of leading counsel on both sides and the size of their respective teams (not to mention their having appeared before Hartmann J to submit for 2 days), it was reasonable to hear the appeal as we did.

14.I emphasize the point that the orders we made for abridgment and for the expedited appeal are exceptional orders.  But for the statement by counsel that effectively the whole transaction (by which I take to mean the initial public offering) would be cancelled if by next Monday (a deadline that was impossible to be extended) there was in existence an appeal or the significant likelihood of one, I would have refused the application.  As was repeatedly pointed out to Mr Fung, his client already had a judgment in its favour (not subject to any form of stay).  If all the Housing Authority wanted was some ‘extra reassurance’ from a higher court, this did not provide any justification for making the type of orders sought.  It was only after these points had been made that Mr Fung took further instructions and then read out the statement referred to in paragraph 12(1) above.  At that time of course, neither Applicant had said they were definitely going to appeal.  It is right to mention that Mr Dykes did accept that an abridgment was acceptable but this was obviously in the context of the somewhat desperate situation that Mr Fung indicated to the Court.

The issues

15.The main issue in this appeal is whether the Housing Authority, in deciding to sell the RCPF to Link Properties, was acting ultra vires.

16.There was also a cross-appeal made by the Housing Authority against the order granting leave to apply for judicial review.  The only ground really contended for by Mr Fung was the question of delay on the Applicants’ part.  This aspect has caused me much anxiety but in the end, given the facts that were presented to us (in particular the fact that apparently it was not until 25 November 2004 that the public first learnt of the precise locations of the RCPF that are to be sold), I am not convinced that the discretion exercised by Hartmann J (who had all the evidence before him as well as the benefit of full submissions from both sides) should be disturbed.  For my part, I would dismiss the cross-appeal.  I would add this.  I have read in draft the judgment of Stock JA and agree with his observations on the correct principles governing the question of delay in judicial review proceedings.

17.In this appeal, we have had the benefit of reading the written submissions of Mr Dykes both in the Court below and in this appeal.  Unfortunately, he was not present before us to make any oral submissions.  Shortly after 2:00 pm on the day of the hearing of this appeal, the Court received a letter from the 1st Applicant stating that she had instructed her legal team not to attend the appeal.  This was despite the team of both solicitors and counsel having indicated their willingness to act pro bono (legal aid was refused to her).  She has chosen not to take up this offer nor to appear at all.

Have the Housing Authority acted ultra vires?

18.Section 4(1) of the Housing Ordinance, Cap.283 (“the Ordinance”) states in clear terms the principles underlying the exercise by the Housing Authority of its powers and the discharge of its duties under the Ordinance : - to secure the provision of housing and such amenities ancillary thereto as the Housing Authority thinks fit for such kinds or classes of persons as the Authority may, subject to the approval of the Chief Executive, determine.  Section 4(1) states as follows : -

“4.    General powers and duties of the Authority

(1)    The Authority shall exercise its powers and discharge its duties under this Ordinance so as to secure the provision of housing and such amenities ancillary thereto as the Authority thinks fit for such kinds or classes of persons as the Authority may, subject to the approval of the Chief Executive, determine.”

The reference to housing, the amenities ancillary thereto and to the classes of persons who would benefit from such as determined by the Chief Executive, means in practical terms (and given the history and the purpose for the setting up of the Housing Authority in the first place) the provision of low cost housing to those classes of persons in Hong Kong who would otherwise have difficulties in affording such and ancillary amenities.  I will call this principle the Underlying Principle.

19.In the practical implementation of the Underlying Principle, the Housing Authority as a policy must have in mind commercial considerations.  Section 4(4) of the Ordinance states : -

“(4)    The policy of the Authority shall be directed to ensuring that the revenue accruing to it from its estates shall be sufficient to meet its recurrent expenditure on its estates.”

Thus, while for obvious reasons the Housing Authority cannot operate wholly by reference to commercial or market principles (for example, it cannot charge residential tenants of public housing a commercial rent : - see section 16 of the Ordinance), it must have regard to it where the occasion demands and permits.

20.The term “housing” covers residential, industrial, commercial and business accommodation, buildings and premises : - see section 2 of the Ordinance.  In the Court below, it was argued on behalf of the Applicants that the provision of housing to residential tenants like them included the provision of commercial premises, therefore including the RCPF.  In other words, the provision of RCPF was part of the housing provided to the Applicants rather than their merely being “amenities” ancillary to the accommodation provided.  In my judgment, this analysis cannot be supported.  A person provided with housing (like the Applicants) may have provided to him residential housing (by far the majority of public housing tenants in Hong Kong), industrial, commercial or business accommodation or premises as the case may be.  The tenants of these different types of housing represent different classes of persons to whom such types of housing are provided.  It is important to bear in mind that section 4(1) of the Ordinance actually refers to “kinds or classes or persons”, thereby recognizing the different types of tenants for what must be different types of housing.  It does not follow that where a tenant is provided with residential accommodation, he is also somehow to be provided with industrial, commercial or business accommodation or premises as well.

21.The term “to secure the provision of housing and such amenities ancillary thereto” is in my view a necessarily wide term that goes beyond merely those activities that directly involve the provision of those aspects.  Obviously, the term covers the construction of buildings that provide housing or the actual letting of premises and the management of buildings.  However, the term also covers activities or functions that indirectly goes towards the provision of housing and amenities.  For example, the raising of finances to pay for projects (section 12 of the Ordinance) or the investment of any spare money (section 13) are activities that the Housing Authority can lawfully carry out.  The range of activities enumerated in section 4(2) of the Ordinance provides further concrete examples of the type of activities on which the Housing Authority can lawfully embark.  The breadth of its powers can be seen in the embracing term in section 4(2)(k) of the Ordinance : -

“(2)(k)  to do all such other acts as are reasonably necessary for the exercise or performance of all or any of the powers or duties of the Authority under this Ordinance and to perform any other function which is incidental or conducive to or connected with the attainment or furtherance of the purposes of the Authority in accordance with this Ordinance.”

22.The sale of any property in public housing estates is an express power given to the Housing Authority under the Ordinance : - see sections 4(2)(a) and 17A.

23.There being a power to sell property in public housing estates, no objection can be levelled against the sale of RCPF on the basis of an absence of such power.  Cases like Hazell v Hammersmith and Fulham London Borough Council and Others [1992] 2 AC 1 where the borough council in question simply did not have the power to do as it purported to do in that case (the entering into “swap” transactions in the London Money and Capital Market), are readily distinguishable.  In the present case, there is no need either to rely on the general powers contained in section 4(2)(k) of the Ordinance since the power itself is expressly given to the Housing Authority by the two provisions to which I have already referred.

24.Rather, the objection has been on the basis that the sale of RCPF is not in furtherance of the stated underlying objective of securing the provision of housing or ancillary amenities.  It is argued that the sale is therefore outside the powers of the Housing Authority and if carried through, would be unlawful.

25.The Applicants maintain that the proposed sale of the RCPF is not reasonably necessary for the furtherance of the Underlying Principle.  Essentially, the following points are made :-

(1)    The duty on the Housing Authority to provide amenities ancillary to housing to qualifying persons carries with it also the responsibility to retain control over the RCPF.  Whilst accepting that the Housing Authority has power to contract out its management role, in reality, it has in the past been managing the RCPF itself.  This benefits the tenants of public housing in that it would appear that hitherto, the Housing Authority has apparently not been letting the RCPF on a wholly commercial basis (meaning that it has been letting those facilities at less than market rates).  It follows from this, it is said, that the tenants benefit through the lower costs of goods, services or facilities available in such RCPF.

(2)    By selling off the RCPF to a commercial concern, the object of the benefiting the tenants of public housing estates would be frustrated since the RCPF would then be operated on a wholly commercial basis.

26.In my view, the proposed sale of the RCPF is entirely within the powers of the Housing Authority : -

(1)    As stated above, the Housing Authority possesses under the Ordinance, the express power to sell property.

(2)    The stated objective of the proposed sale is to enable the Housing Authority to address the budgetary deficit under which it is now operating.  As the Form 86A in the present application for judicial review states, “the Housing Authority is in deficit.  Its income is not sufficient to meet its outgoings”.

(3)    Given in particular the requirements of section 4(4) of the Ordinance (see paragraph 19 above), it cannot be said that this objective is somehow unconnected to the Underlying Principle.  It is perhaps an obvious statement that the Housing Authority would not be able to function or discharge its responsibilities under the Ordinance (pursuant to the Underlying Principle) if it simply did not have the money.  It is no answer to say that the Housing Authority can always borrow or obtain funds from the Government (or anyone else).  The whole point of section 4(4) of the Ordinance is to achieve some degree of self-sufficiency for the Housing Authority.  Nor is it an answer to say that with better management of its affairs, the Housing Authority could find funds from other sources or make savings so as to render unnecessary the proposed sale.  These are political questions which do not advance the legal problem with which this Court is faced.

(4)    There is no suggestion made by the Applicants (nor can there be on the evidence before the Court) that somehow by selling the RCPF to Link Properties, these facilities would somehow disappear.  On the contrary, the evidence suggests that the purchaser of the RCPF is obliged to continue to provide these facilities.  The only difference is that these facilities, instead of being managed by the Housing Authority, would be managed by Link Properties, a private concern.  In my view, on the assumption that RCPF are amenities (which was the basis on which Mr Fung presented his case) that the Housing Authority is obliged to provide to tenants of public housing, so long as the Authority ensures that they are provided by someone else, it will have discharged its statutory responsibility in this particular regard.  This is not to be taken as a finding that a similar step is permissible in relation to the provision of residential accommodation itself : the purpose of the Ordinance may there imply more limited room for manoeuvre, but this question does not at present fall for our determination.  Nothing in the Ordinance requires the Housing Authority actually to own and manage RCPF.  It is to be observed that in section 4(1), the Housing Authority’s function is to “secure the provision of … [ancillary amenities]”, not actually to provide these itself.  The judge was of the view that these words did not require the Housing Authority itself to provide housing and amenities but enable the Authority in its discretion to secure their provision by others.  He referred to two cases : - see Credit Suisse v Allerdale Borough Council [1997] CA 306 at 360F and Ebbw Vale Urban District Council v South Wales Traffic Area Licensing Authority [1951] 2 KB 366 at 370 and 371.  With respect to the judge, he was in my view entirely correct in his analysis.

(5)          As to the question of the availability of lower costs goods, services or facilities to tenants of public housing, while affordability may have been at some stage (and perhaps may still be) a policy of the Housing Authority, this is outside the ambit of the question before us.  As Mr Fung submitted, there is no challenge based on Wednesbury unreasonableness or legitimate expectation.  In any event, it should be noted that insofar as relevant no evidence was placed before us to the effect that ownership and management of RCPF by commercial concerns will necessarily result in increased prices for goods, services and facilities for public housing tenants.

Conclusion

27.For the above reasons, I would dismiss the appeal and dismiss the cross-appeal.  I would await to hear the parties on the question of costs both here and below.

Hon Stock JA :

28.I agree with the decision of my Lord the Chief Judge and with the reasons that he has provided.  I wish to add some comments about the questions of abridgment of time and of delay.

29.The question of abridgment of time was one that we had to consider within a very tight time frame and was not an easy question at all.  Any suggestion of abridgment by which the time for an appeal is shortened against the wishes of a potential appellant is a notion from which any court will instinctively recoil.  The danger against which we must most carefully guard is to deny potential appellants the fundamental right to appeal.  The circumstances in which a court should grant an abridgment of time for lodging an appeal, an abridgment at the behest not of an appellant, but of the putative respondent, so as to curtail the time in which the appellant is bound to file a notice of application would have to be most exceptional indeed.  However, generally speaking, where it is clearly demonstrated that an applicant has so sat on his or her right of challenge to an administrative decision so as to reserve the exercise of that right to the very last minute with the result that the procedures put in train, whether the originating proceedings or the subsequent machinery for appeal, are so timed as to cause grave prejudice to the putative respondent, which prejudice would have been avoided by a timely challenge, then it seems to me to be open to this court to make the order sought.  Where that happens, however, one would normally expect leave to be refused, and that is a question to which I shall shortly turn.  In this particular case, it seems to me that matters could well have been pursued with greater expedition by the applicants.  But a cardinal fact in our decision, against this background, is the fact that there was no suggestion of real prejudice by reason of the suggested abridgment in that the arguments fell within a narrow compass of vires that had just been fully argued before the judge below, and counsel were ready to argue the matter almost forthwith.  I am less than impressed by the difficulty, of which we have today been informed, in finding lawyers in the Legal Aid Department to handle matters as expeditiously as one would have thought necessary and of the bureaucracy that seems to have there prevailed.  But we have not heard from that source in answer to the seriously worrying picture that has been presented but I hope that the some answer will be forthcoming because an answer is certainly needed.

30.On the question of delay, I wish to add comments to highlight some basic and established principles which illustrate the importance of context to the question of promptitude, and the key guiding principles, lest concentration in the court below on the decision in Burkett [2002] 1 WLR 1593 is misinterpreted as relaxing the principles.

31.The notice of application in this case is dated 8 December 2004.  The decision challenged is the decision of 19 November 2004, that is, the decision of the Housing Authority to enter into the agreement for sale with The Link Properties Ltd.  That however was not the first in the train of decisions.  The decision of 19 November was the one identified by the notice of application, but that decision was the last or almost the last in a series of decisions commenced on 24 July 2003 with a publicly announced decision by the Authority to divest itself of certain retail and parking facilities.  That decision of July 2003 involved the expenditure of a sum in the order of $120 million to cover initial expenses for appointing advisers and other consultants and involved as well the establishment of a supervisory group to steer the project.  In August 2003 an information note was produced for tenants of all public housing estates.  It spoke of the Housing Authority’s approval to divest itself of its retail and car parking facilities but asked for views or suggestions of the tenants “on divestment”.  This consultation exercise seems to have been a rather loose one with no closing date for the submissions of comments.  Our attention has been drawn to a Housing Authority memorandum dated July 2003 which spoke of a target of 100% divestment of the retail and car park facilities but with the possibility “that a small proportion of the ... facilities may be unsuitable for transfer to the new company..”.  Be that as it may, on 31 October 2003 the Housing Authority announced that it had appointed joint global coordinators for the project.  In December 2003, the Authority issued a press statement to the effect that the supervisory group had endorsed or accepted the recommendation of the joint global coordinators to adopt a REIT structure for implementing its divestments plan, and in April 2004 the Authority announced the appointment of a chief executive of the REIT management company.  In May 2004 the Authority announced its decision to establish a company to manage the REIT.  In August 2004 the Authority issued a press release the contents of which, so it appears to me, made clear that the Authority intended to proceed with the project; an announcement that Capitaland had been selected as the strategic partner of Link Management.  Mr Dykes says that up to and including that stage, all that had been announced was an agreement in principle.  It seems to me that matters had progressed much further than that, but that is not a determination that we now need to make.  19 November is the date of the challenged decision, and 25 November the date of the global offering by which it was made known precisely which estates were to be subject to divestment of the retail and car parking facilities.

32.It is against this background that the application dated 8 December was made; that is to say a mere one day before the public offer of the Link REIT closed to applications; and, as was well known, eight days before dealing in the Link units was scheduled to commence.  Dealing was due to commence on Thursday 16 December 2004, but the launch was delayed to Monday next , 20 December by reason of these proceedings.

33.It is in this factual context that the issue of delay and, in particular, the question of prejudice and detriment to good administration - a phrase to which I shall presently return - is to be viewed.

34.A prime purpose of insisting on promptitude in judicial review of administrative decisions is embedded in recognition that important administrative action can be paralyzed by challenges that transpire to be unmeritorious.  The right to review the legality of administrative decisions is of course essential to a free society governed by the rule of law.  But it is essential too that that freedom be exercised in a framework that reflects a ‘proper awareness of the needs of public administration.’  That framework must also be concerned with ‘speed of decision, particularly in the financial field’ with consideration not only of the rights of the applicants who may be affected by the decisions, but also of the rights of the financial public to rely on announced decisions, and of the fact that deals have been executed in reliance upon the validity of decisions in respect of which there has been no hint of challenge whilst the proposals have for long been in the public arena.  See R v Monopolies Commission ex parte Argyll plc [1986] 1 WLR 763, 774-775.  See also R v Takeover Panel ex parte Datafin plc [1987] 1 QB 815, 842.  There must be due regard to context, to the time scales inherent in the particular decision making process and in its consequences.  We need to recall fundamentals and it is fundamental that :

“The public interest in good administration requires that public authorities and third parties should not be kept in suspense as to the legal validity of a decision the authority has reached in purported exercise of decision-making powers for any longer than is absolutely necessary in fairness to the person affected by the decision.”

per Lord Diplock in O’Reilly v Mackman [1983] 2 AC 237, 280-281.

35.Further :

“The prerogative remedies are exceptional in their nature and should not be made available to those who sleep upon their rights.”

per Donaldson J ( as he then was ) in R v Aston University Senate ex parte Roffey [1969] 2 QB 538, 555.             See also Bates v Lord Hailsham [1972] 1 WLR 1373, 1380.

36.So too in this context it is necessary to rehearse the provisions of section 21K (6) of the High Court Ordinance :

“Where the Court of First Instance considers that there has been undue delay in making an application for judicial review, the court may refuse to grant-

(a)   leave for the making of the application; or

(b)   any relief sought on the application,

if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.”

37.What is and what is not detrimental to good administration must necessarily also be a question of context : see R v Dairy Tribunal ex parte Caswell [1990] 2 AC 738, 749 :

“I do not consider that it would be wise to attempt to formulate any precise definition or description of what constitutes detrimental to good administration.  This is because applications for judicial review may occur in many different situations, and the need for finality may be greater in one context than in another”. (Emphasis added)

and of particular significance in this case,  the further principle needs to be recalled and emphasized that:

“...  even though the court may be satisfied in the light of all the circumstances, including the particular position of the applicant, that there is good reason for that failure [ to act promptly], nevertheless , the delay, viewed objectively, remains ‘undue delay’.  The court therefore still retains a discretion to refuse to grant leave for the making of the application or the relief sought on the substantive application on the grounds of undue delay , if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.”

per Ackner LJ ( as he then was ) in R v Stratford on Avon District Council, ex parte Jackson [1985] 1 WLR 1319, 1325. (Emphasis added).

38.It is against these fundamental considerations that the case which was much paraded before Hartmann J, namely, Burkett is not the clear answer to the issue of delay that was suggested, for it takes nothing away from these fundamental principles or from the need to look at factual setting.  The factual matrix in Burke was quite different.  It was a challenge to a planning decision where there had been a provisional decision, which was merely an authorisation to grant outline planning permission , followed by a contrary direction , prohibiting the grant of that permission; followed then by lifting of the prohibition, and then by a decision.  The practical deadlines which apply in the present case did not apply in that.

39.In the judgment of the court below, the judge, giving full reasons at extraordinarily short notice, considered that there was substance in the applicants submission, relying on Burkett, that the applicants had not been obliged to avoid accusations of delay to challenge the authority's decisions in principle , and had been entitled to await the decisions of 19 November.  That they were entitled to await the last decision is of course strictly speaking correct, but doing so does not in the context of such a case as this come without its substantial risk for the applicants; nor if they were entitled to wait until 19 or 25 November, were they necessarily absolved from moving at greater speed than they did.  It seems to me that if earlier decisions were challengeable (as to which there is much debate in this case) it is not then open, in the context of a factual matrix such as this, for applicants who could have challenged those earlier decisions, to sit upon their rights with no risk of leave being refused.  Whilst in such a situation the latest decision may itself be amenable to challenge, that is not a fact that is to be looked at in isolation when the court comes to consider the issue of leave and, if leave be given, of relief.  It must be looked at in the round, with due regard of course, as in Burkett, to the nature of the earlier decisions and to the framework as a whole.

40.The question whether earlier decisions could have been challenged has not been the subject of the type of argument, and not the subject of any representations at all from the applicant, in the very short time available yesterday, that enables me to determine that issue with confidence.  That is an issue which was canvassed in full by both sides before the judge in the court below.  However, as a general point, and in so far as the issue was raised about the state of the appellant’s knowledge at a given date, it needs to be recalled that time starts to run, in the judicial review context, not from the date when an applicant knows of the ground, but from the time when the ground for challenge arises.

41.Initial public announcements did not make clear that some estates might not be the subject of the investment, although internal memoranda suggested some would be excluded.  There was also a period of consultation, the opening and closing dates of which seemed to be at large.  The suggestion is made that until any one applicant could know whether his or her estate would be gathered in, as it were, no challenge was reasonably pursuable.  I have doubts, on the facts of this case, about that proposition; but I do not, in the event, think it necessary to decide the point.

42.The challenged decision is dated 19 November 2004, but that was not announced until 25 November.  Even taking 25 November as the date upon which, for our purposes, time began to run, there is then a delay of two weeks less one day before the application is made in this case.  To say that that is a short time is to ignore context; and promptitude is always a matter of context.  It seems to me, and I speak only for myself in this regard, that there is a strong case for saying that the challenge, if one was to be mounted, should have been mounted immediately or almost immediately thereafter; that the resulting delay was, objectively speaking, undue delay; and, further, that in the face of that delay, the grant of relief was likely to cause substantial prejudice to the rights of others and be detrimental to good administration; and that this was not case for leave, let alone relief.  The result of the timing of the application has been a frenzy with all its attendant unfortunate trappings; and I think that the avoidance of a frenzy of this type is a key reason for the requirement of promptitude.

43.I state these considerations for such utility as they may have in future applications of this type, although it must go without saying that each case will depend on its factual matrix and the issues at stake.  The question of the cross-appeal has not been easy, and we have rather concentrated in any event on the substantive issue of legality.  The question of leave is one of discretion in the judge below, with which an appellate court will not lightly interfere.  The judge heard full argument in this regard from both sides, an advantage we did not have.  Whilst I think that there is much in the argument for refusing leave, I am not, in the absence of the fuller argument placed before the judge on both sides, prepared to conclude that the judge in the exercise of his discretion was clearly wrong; and for this reason only I agree that the cross-appeal should be dismissed.

Hon Le Pichon JA :

44.I agree with the reasons given by the Chief Judge and Stock JA for the order made on 15 December 2004 abridging the time for the appellant to appeal and for dismissing the cross-appeal.  There is nothing that I can usefully add in that regard.

45.As regards the legal issue which this appeal raises, I confess that I have not found it an easy matter to decide.  I am bound to say that on a matter of this significance, I would have much preferred time to reflect upon it maturely and to have had the benefit of hearing oral submissions from the appellant’s counsel.  To resolve legal issues that are not straightforward when only one party is legally represented is doubly difficult.  Whilst the court did have the benefit of written submissions from Mr Dykes SC which were submitted at or about the time the notice of appeal was filed by the appellant, it did not have the benefit of hearing his oral submissions.  For my part, I would have been considerably assisted by the presence of leading counsel for the appellant at the hearing.  It was therefore particularly unfortunate that the appellant did not see fit to accept the offer of her legal team to act on a pro bono basis after legal aid had been refused.  The appellant and those whom she in effect represents at large have serious and important social welfare interests which merit close and careful consideration.  In the event, absent the assistance I had hoped would be available and under the time constraints obtaining, I agree that the appeal should be dismissed for the reasons given by the Chief Judge but it is a decision that I have reached with considerable hesitation and reluctance.

Hon Ma CJHC :

46.Accordingly, the appeal and the cross-appeal are dismissed.  We shall hear the parties on the question of costs here and below.

Messrs Barnes & Daley, for the 1st Applicant/Appellant (absent)

Mr Daniel Fung SC & Ms Catrina Lam, instructed by Messrs Clifford Chance, for the Respondent/Respondent