Re Yat Ming Construction & Engineering Ltd

CACV 273/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 273 OF 2005

(ON APPEAL FROM hcal nO. 106 OF 2005)

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Before:  Hon Yeung JA & Yuen JA in Court

Date of Hearing:  1 November 2005

Date of Judgment:  1 November 2005

Date of Handing Down Reasons for Judgment: 14 November 2005

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Reasons for Judgment

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Hon Yeung JA (giving Reasons for Judgment of the Court):

Introduction

1.On 1 November 2005, we dismissed the appeal by Yat Ming Construction & Engineering Limited (“Yat Ming”) against the decision of Reyes J (the judge) refusing to grant leave to judicial review certain decisions of the Building Authority (“BA”) with costs to the BA to be taxed on a common fund basis, if not agreed. We indicated that we would hand down our written reasons and this we now do.

Background

2.Power Tripod Limited (“Power Tripod”) was the owner of Blossom Terrace on Tsuen Wan Lot No 352 (the project) and Yat Ming was the contractor responsible for site formation works.

3.Power Tripod appointed Cecil Chao & Associates Ltd as the Architect and Cecil Chao Sze Tsung (“Cecil Chao”) as the Authorized Person (“AP”) in charge of the project. Apparently Cecil Chao was also a director of Power Tripod.

4.Between May and September 2003, Cecil Chao, as the AP of the project, submitted various drawings and related amendments (“the plans”) for the approval of the BA. Yat Ming worked according to the plans.

5.The BA approved such plans until 5 March 2004 when it disapproved the site formation amendment plans.

6.Apparently, Cecil Chao had been removed from the APs’ Register on 8 February 1999 and so was not qualified to act as the AP for the project under the relevant regulations.

7.On 5 March 2004, Power Tripod appointed Mr Chiu Sung Kin (“Chiu”) as the AP for the project and Cecil Chao resigned as the AP on 8 March 2004.

8.Subsequently, Chiu and his successor Mr Lee Ying Kit (“Lee”) submitted further plans and/or withdrew and re-submitted plans that Yat Ming alleges had been originally submitted by Cecil Chao for the BA’s approval.

9.By the time of such submissions and/or re-submissions, some of the related works had already been completed.

10.Yat Ming claimed to be unaware of the discovery of Cecil Chao as an unlisted AP and his subsequent replacements. Yat Ming also said the submissions and re-submissions of plans by Chiu and Lee were done without its knowledge or approval.

11.In particular, it was pointed out that (1) Drawings Nos. 30102/SF/001A and B, 002A and B, 003A and B, and 004A and B submitted by Lee and approved by the BA on 7 June 2004 and 9 July 2004 had contents identical to that on the drawings submitted by Cecil Chao, which had already been approved by the BA on 10 June 2003 and 29 September 2003; and (2) Drawings Nos. 30102/SF/001E, 002E, 003E and 004E submitted by Chiu had contents identical to the drawings submitted by Cecil Chao, which had already been approved by the BA on 10 June 2003 and 29 September 2003.

12.It was Yat Ming’s contention that the relevant works must be carried out by a registered specialist contractor and coordinated by an AP. Yat Ming suggested that the BA’s approval of the plans submitted by Chiu and Lee and consent to works shown thereon, which were completed before 8 March 2004 contravened the spirit of the Buildings Ordinance, which did not allow retrospective approval or consent.

13.Yat Ming contended that the BA’s retrospective approval or consent for works that had already been completed constituted illegality and/or procedural impropriety.

14.Yat Ming further contended that as the registered specialist contractor for the project, it might be exposed to litigation for carrying out the works, including “statutory sanction and civil claims for unsatisfactory or illegal works due to the default of [Cecil Chao] and the decisions of the BA"

15.Yat Ming sought to challenge the BA’s approval of plans submitted by Chiu and Lee and consent to works shown thereon by way of judicial review.

16.In addition to orders of certiorari to quash the BA’s approval and consent, Yat Ming also sought the following reliefs:

“(5) An order of Mandamus to bring up and to require the BA to regularize the Project to comply with the [Buildings Ordinance (Cap. 123)] by making a public announcement by way of Gazette (‘the Public Announcement’) to the effect that Mr. (Cecil) Chao, though not on the list of registered AP during the period from 12 May 2003 to 8 March 2004, is retrospectively recognized by the Building Authority as the  AP for the Site Formation (Soldier Pile Wall only) works during the said period.  The effect of the Public Announcement shall: (a) include recognition and acknowledgement of the two BA14 forms signed and submitted by Mr Chao on 12 November 2003 and 27 January 2004; (b) the withdrawal of the two BA14 forms by Mr Lee on 30 June 2004 is void; (c) Mr Chao shall be responsible for any liability arising out of the irregularity happened during the period; and (d) any person including the Applicant, who has a claim against Mr Chao arising out of the irregularity shall initiate claims not later than one month form the date of the Public Announcement.

(6) An order for the declaration that the Applicant shall not be liable for any statutory sanction or civil claim for any unsatisfactory works in the Project due to the fact that Mr Chao was an unlisted AP or due to the decisions of the Building Authority involving any irregularity in the approval and consent procedures.”

The Judge’s Decision

17.On 25 August 2005, the judge refused Yat Ming’s ex parte application for leave.

18.The judge took the view that Yat Ming did not have sufficient interest or standing to take out the judicial review application. The judge pointed out that there had been no claim or threatened claim against Yat Ming and thus Yat Ming’s application only gave rise to purely academic or hypothetical questions.

19.In particular, the judge pointed out that the Court could not curtail anyone from bringing claims, compel the BA to make any public announcement or absolve Yat Ming, or anyone else, from any civil liability.

20.Yat Ming appealed against the decision of the judge. At the invitation of the court, the BA, represented by Mr Jin Pao, appeared at the hearing of the appeal to assist the court.

The Complaints

21.Yat Ming contended that the judge was wrong in holding that it did not have sufficient interest or standing to apply for judicial review and in refusing leave, he adopted too high a threshold. 

22.It emphasized that without an AP responsible for the building works, the works undertaken by Yat Ming might be considered as not having complied with the relevant regulations and thus affecting its status as a registered specialist contractor.

23.Yat Ming also disclosed, for the first time, that Power Tripod had instituted a civil action (HCCT 80/2004) for alleged delay in the completion of the project.  Yat Ming alleged that such delay was in fact caused by the delay in obtaining approval and consent, and the rectification of the works of Cecil Chao.

24.Yat Ming pointed out that Power Tripod had amended its pleadings to the effect that submissions made by Cecil Chao were made by the Architect – Cecil Chao & Associates Ltd. The suggestion was that Cecil Chao personally would be released from the role of AP in the project and was allowed to escape liability, leaving Yat Ming to shoulder such liability.

25.HCCT 80/2004 was in fact not disclosed to the judge in the ex parte application, hence the judge’s comment that “there had been no claim or threatened claim against Yat Ming”.

26.Mr Liu Chin Yu, on behalf of Yat Ming, accepted the judge’s decision that the court could not curtail anyone from bringing claims, compel the BA to make any public announcement or absolve Yat Ming, or anyone else, from any civil liability. He abandoned the reliefs Nos 5 and 6 set out in paragraph 16 hereof.

27.Mr Liu, however, emphasized that the BA’s decisions to allow Lee to withdraw plans previously submitted by Cecil Chao justified Yat Ming’s delay in completing the project, and might have the effect of rendering Yat Ming’s works being unauthorized and in breach of the provisions of the Buildings Ordinance, thus affecting its status as a registered specialist contractor.

28.Thus, Mr Liu argued that Yat Ming had a sufficient interest to review the BA’s decisions to approve the replacement of plans previously submitted by Cecil Chao with plans submitted by Chiu or Lee.

29.Mr Liu in particular challenged the following decisions of the BA:

1.  Decision dated 21April 2004 to approve and consent to works on plans submitted by Chiu;

2.  Decisions dated 7 June 2004 and 7 July 2004 to approve plans submitted by Lee; and

3.  Decisions dated 16 June 2004 and 9 July 2004 to consent to the commencement of works on plans submitted by Lee

30.Mr Liu relied on the following paragraph in the judgment of the late J Chan J in Filipino Club v Building Appeal Tribunal [1995] 3 HKC 356 at 359:

“The logic of the decision is that one cannot seek approval to construct structures that had already been constructed. The application for approval should and must be made prior to the construction of the structure in question. It would be wholly illogical and superfluous for one to seek consent to the doing of such act after it had been done.”

Discussion

31.Order 53 stipulates that determination of sufficient interest is relevant at the ex parte stage: “The Court shall not grant leave unless it considers that the applicant has a sufficient interest in the matter to which the application relates” Rule 3(7).

32.It is of course possible for the court to grant leave when an applicant has demonstrated a prima facie case even if, at the later stage and on further and more mature consideration, it is decided that the applicant does not in fact possess the requisite standing.

33.Lord Diplock in Inland Revenue Commissioners v National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617 succinctly set out the correct approach to standing on the ex parte application at p. 642 and 644:

 “So this is a ‘threshold’ question in the sense that the court must direct its mind to it and form a prima facie view about it on the material that is available  at the first stage. The prima facie view so formed, if favourable to the applicant,  may alter on further consideration in the light of further evidence that may be  before the court at the second stage, the hearing of the application for judicial  review itself.”

“If, on a quick perusal of the material then available, the court thinks that it discloses what might on further consideration turn out to be an arguable case in favour of granting to the applicant the relief claimed, it ought, in the exercise of a judicial discretion, to give him leave to apply for that relief.”

34.In Ho Ming Sai and Others v The Director of Immigration [1994] HKLR 21, the Court of Appeal laid down the following rule:

“In my judgment, the question which a judge has to ask himself at the leave stage is this: ‘Does the material before me disclose what might on further consideration turn out to be an arguable case?’ If he asks himself whether there is an arguable case, he risks pre-empting questions which ought properly to be decided at the substantive hearing, not at the leave stage.”

35.We, therefore, had to consider if Yat Ming’s application disclosed a prima facie case or whether it had disclosed sufficient material to justify further consideration.

36.Yat Ming’s application for the Nos 5 and 6 reliefs set out in paragraph 16 hereof was clearly unsustainable. As the judge had quite rightly pointed out, the Court could not curtail anyone from bringing claims, or compel the BA to make any announcement, or absolve anyone from any civil liability. We found the application for such reliefs to be outrageous, particularly when the applicant was already a party to a civil claim which it did not disclose to the judge.

37.An order for mandamus has always been dealt with on a very strict basis, as Wright J said in R v Lewisham Union Guardians (1987) 1 QB 498 at p 500:

“Certainly, so long as I have had anything to do with applications for a mandamus I have always understood that the applicant, in order to entitle himself to a mandamus, must first of all show that he has a legal specific right to ask for the interference of the court.”

38.In so far as Yat Ming sought to limit its civil liability, its application was completely misconceived. Those are matters of private law and could only be resolved between the parties concerned. It had nothing to do with the BA as a public authority.

39.Whether Yat Ming was liable for the alleged delay and whether Cecil Chao could escape liability were all matters that could only be resolved in the contractual dispute between Yat Ming, Power Tripod and possibly Cecil Chao. They were not matters susceptible or relevant to a judicial review application. Yat Ming was certainly free to bring in Cecil Chao in the civil dispute if he was not already involved.

40.An applicant seeking a declaration in public law must demonstrate that some legal right of his own is in issue, actually or contingently, otherwise there is nothing relating to his legal position that the court can declare. As Lord Diplick has said in Gouriet v Union of Post Office Workers [1978] AC 435 at p 501:

“But the jurisdiction of the court is not to declare the law generally or to give advisory opinions; it is confined to declaring contested legal rights, subsisting or future, of the parties represented in the litigation before it and not those of any one else.”

41.There was no suggestion from anyone that Yat Ming would somehow be liable for any statutory sanction or civil claim for any unsatisfactory works in the project due to (1) the fact that Cecil Chao, whilst acting as an AP, was in fact an unlisted AP or (2) the BA’s alleged improper approval and consent procedures relating to the plans submitted by Cecil Chao, Chiu or Lee (Emphasis added).

42.There was also no indication that the approval of plans submitted by Chiu and Lee relating to works that had already been completed by the time those plans were submitted would have any impact on Yat Ming in the public law domain.

43.There was no action or threatened action by the BA against Yat Ming’s status as a registered specialist contractor arising out of the replacement of Cecil Chao’s drawings by those of Chiu and Lee.

44.If there was, then Yat Ming could perhaps take out a judicial review proceeding on the basis that the decision is unlawful, ultra vires, unreasonable or tainted with procedural unfairness or irregularity.

45.Judicial review remedies are correlative with rights and unless there is an element of public interest, only those whose own rights are at stake are eligible to be awarded remedies.

46.There was no public interest involved and Yat Ming’s rights, in so far as they might be affected by the decisions of the BA in question, were not at stake.

47.In so far as Yat Ming’s judicial review application was an attempt to try to absolve itself from civil liability in HCCT 80/2004, it was doomed to fail.

48.Applying the most favourable view to the application, Yat Ming failed to demonstrate that it had sufficient locus standi in taking out the judicial review application.

49.Mr Jin Pao submitted that Yat Ming’s application should also be refused on the bases of undue delay and material non-disclosure. Mr Pao’s submission was a powerful one. Whilst there might be a reasonable explanation for the delay in taking out the application, we were not persuaded that the non-disclosure of HCCT 80/2004 to the judge was excusable, let alone justified.

50.Mr Liu submitted that the relevant Practice Directions only required documents necessary for decision of the issues before the Court and therefore the non-disclosure had no bearing on the case.

51.Mr Liu’s submission contradicted his own case as before this court he relied on the fact that Power Tripod had instituted proceedings, alleging delay in completing the project against Yat Ming in order to establish a sufficient interest to judicially review the BA’s decisions.

52.In the light of our finding on Yat Ming’s locus standi, we found it unnecessary to deal with the alleged delay and the material non-disclosure other than to repeat the comment that the non-disclosure was inexcusable.

Conclusion

53.The judge was right, in the exercise of his discretion, to refuse Yat Ming’s ex parte application for leave.

54.In the circumstances, the appeal against the judge’s decision was dismissed.

55.We were of the view that the appeal had no merit whatsoever. The ex parte application should not have been taken out and the appeal should certainly not have been pursued.

56.It was, in our view, a proper case to order Yat Ming to pay the BA’s costs of the appeal to be taxed on a common fund basis, if not agreed, and we so ordered.

Mr Liu Chin Yu instructed by Messrs Ellen Au & Co., for the Applicant

Mr Jin Pao instructed by the Department of Justice for the Building Authority.