Smart Gain Investment Ltd v. Town Planning Board

HCAL 12/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO.12 OF 2006

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BETWEEN

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Before: Hon Reyes J in Court

Date of Hearing: 22 February 2006

Date of Decision: 28 February 2006

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D E C I S I O N

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I.    INTRODUCTION

1.On 2 February 2005 the Town Planning Board decided not to propose any amendment to the draft Clear Water Bay Peninsular North Outline Zoning Plan (the draft OZP).  Smart Gain seeks leave to apply for judicial review against that decision.

2.Smart Gain owns 4 sites (the sites) within the area covered by the draft OZP.  The sites fall within the Conservation Area (CA) zone in the draft OZP. 

3.On 10 May 2005 Smart Gain objected to the CA zoning of the sites.  At a preliminary meeting on 22 July 2005, the Board rejected Smart Gain’s objection.

4.On 2 November 2005 the Board’s Objection Hearing Committee (OHC) heard representations from Smart Gain in support of its objection.  Smart Gain suggested that Site 1 be zoned as “Residential (Group C) 3” (R(C)3); Site 2 as “Village Type Development” (V); Site 3 as “Residential (Group C) 6” (R(C)6); and Site 4 as “Recreation” (R). 

5.Smart Gain’s representatives having made their submissions and left, the OHC discussed and rejected Smart Gain’s objection. The OHC did not think that the CA zoning of the sites required amendment.  Smart Gain was informed of this by letter from the Board dated 9 December 2005.

6.Smart Gain submits that the OHC’s decision of 2 November  2005 was flawed in the following respects:

6.1    The procedure by which the decision was reached was unfair.

6.2    The Board did not exercise its decision-making responsibility.

6.3    The Board took account of an irrelevant consideration, namely, whether a decision in Smart Gain’s favour would set an “undesirable precedent”.

6.4    The Board ignored Smart Gain’s legitimate expectation.

6.5    The decision was wrong in law.

6.6    The decision was perverse and irrational.

II.    BACKGROUND

7.Site 1 (0.90 ha) is located between Pik Shui San Tsuen Village, the Staff Quarters of the Hong Kong University of Science and Technology (HKUST) and Clearwater Bay Road.  It has been largely cleared and is currently used for open storage (including the storage of containers) and vehicle parking.

8.Site 2 (0.25 ha) comprises private land and an intervening portion of Government land.  The private land originally formed part of Tai Po Tsai Village (TPT Village).  The resumption of some of TPT Village land for the construction of roads and HKUST resulted in Site 2’s private land becoming separated from TPT Village.  Site 2 is now covered in part by vegetation which has grown up over the previously cultivated village land.

9.Site 3 (0.27 ha) lies north of University Road and southeast of HKUST” Staff Quarters.  It has been partially cleared, with vegetation around its perimeter and grassy areas in its centre.  It is leased to villagers for agricultural use.

10.Site 4 (3.25 ha) is located near Pak Shui Wun beach.  It has no vehicular access and can only be reached by footpaths or from the sea by boat.  The site comprises 2 areas. 

11.The first portion is a low valley which consists of flat agricultural land with a stream flowing through.  This area contains the Pak Shui Wun Archaeological Site (the Archaeological Site). 

12.The second portion is slightly raised and set back into the hill slopes.

13.All 4 sites together constitute a small proportion (less than 1%) of the land zoned CA under the draft OZP.  At the end of this Judgment, I append a location plan of the 4 sites extracted from the Objection Statement dated September 2005 which Smart Gain presented to the Board.  The location plan also summarises the re-zoning which Smart Gain proposed for each of the 4 Sites.

14.At the oral hearing before me, Mr McCoy SC said that he did not dispute that there were features suitable for conservation in Site 4.  Mr McCoy, however, argued that there was little (if anything) worth conserving in Sites 1, 2 and 3.

III.     DISCUSSION

A.      Objection 1: Was there procedural unfairness?

15.Mr McCoy submits that there was procedural unfairness because Smart Gain did not have an opportunity to respond to comments made by the OHC’s Secretary in relation to permissible uses of agricultural land zoned as CA.

16.The draft OZP states that a CA zoning is:

“intended to protect and retain existing natural landscape, ecological or topographical features ... for conservation, educational and research purposes and to separate sensitive natural environment such as Country Park from the adverse effects of development”.

17.The Government Lease currently restricts the sites to use as agricultural land.  According to the Schedule of Uses appended to the draft OZP, a CA zoning means that the sites remain available for “Agricultural Use (other than Plant Nursery)”.

18.The draft OZP includes Notes (which are expressly stated to “form part of the Plan”).  Note (9)(b) states:

“In areas zoned “Conservation Area” or “Coastal Protection Area”,

(a) the following uses or developments are always permitted:

(i) maintenance or repair of plant nursery, amenity planting, sitting out area, rain shelter, refreshment kiosk, road, watercourse, nullah, public utility pipeline, electricity mast, lamp pole, telephone booth, shrine and grave;

(ii) geotechnical works, local public works, road works, sewerage works, drainage works, environmental improvement works, marine related facilities, waterworks (excluding works on service reservoir) and such other public works co-ordinated or implemented by Government; and

(iii) provision of amenity planning by Government; and

(b) the following uses or developments require permission from the Town Planning Board:

provision of plant nursery, amenity planting (other than by Government), sitting out area, rain shelter, refreshment kiosk, footpath, public utility pipeline, electricity mast, lamp pole, telephone booth and shrine.”

19.Prior to the 2 November 2005 meeting, the Planning Department prepared and circulated an OHC Paper No.242 to OHC members.  A copy of the OHC Paper was also provided to Smart Gain in advance of the meeting.  At §4.1(c) the OHC Paper stated:

“As advised by DLO/SK [District Lands Office/ Sai Kung], the Objection Sites comprise mainly agricultural lots demised for agriculture use and house development and house development is not permitted under the lease.  According to the Notes of the Plan [the draft OZP], “Agricultural Use” is always permitted within the ‘CA’ zone.  As such, the land owner’s right under the lease would be adversely affected by the ‘CA’ zoning.”

20.Before the OHC on 2 November 2005, Smart Gain argued that there were no significant conservation features on the 4 sites.  Smart Gain suggested that a CA zoning was “effectively a confiscation of ownership rights without compensation” which was appropriate only when there was some exceptional aspect that needed to be conserved. 

21.Smart Gain complained that a CA zoning would prohibit use of the sites for a “plant nursery”.  That would deprive Smart Gain of the possibility of introducing modern productive farming methods (such as a plant nursery) to the sites.  Accordingly, a CA zoning would adversely affect Smart Gain’s rights under the Government Lease.

22.After Smart Gain’s representatives left, the following discussion is recorded in the minutes of the OHC meeting as having taken place:

“A Member asked what uses were permissible under the ‘CA’ zone.  Referring to the Notes of the Plan for the ‘CA’ zone, the Chairman said that in general, only developments that were needed to support the conservation of the existing natural landscape and scenic quality of the areas, or were essential infrastructure projects with overriding public interest might be permitted.  In response to the two relevant points made by the objector’s representatives, the Secretary clarified that under paragraph 9(b) of the covering Notes, provision of plant nursery might be permitted by the Board upon application.  Moreover, excavation of land within the ‘CA’ zone would require planning permission from the Board in accordance with the Remarks in the Notes for the ‘CA’ zone.”

23.The Secretary is not a member of the OHC.

24.Mr McCoy complains that the Secretary’s comments “would inevitably have given the members of the OHC the false impression that the position stated in [OHC Paper No.242 §4.1(c)] was correct, namely that [Smart Gain’s] rights under the lease would not be adversely affected by the CA zoning”.  The alleged impression would be false (Mr McCoy submits) for the reasons argued by Smart Gain prior to the OHC meeting’s private deliberations.

25.Smart Gain (Mr McCoy says) was unfortunately not informed of the Secretary’s comments before the Board’s decision to reject its objections.  Smart Gain thus had no opportunity to rebut the false impression which the Secretary’s observation would have prompted. 

26.This (Mr McCoy argues) was procedurally unfair to Smart Gain.  Had Smart Gain had a chance to respond to the Secretary, it would have pointed out the following:

26.1   There was no guarantee that an application to use a site for plant nursery purposes would succeed.

26.2   The plant nursery which Smart Gain had in mind would most likely be rejected by the Board.

26.3  Given the purposes of a CA zoning expressed in the draft OZP, it is likely that Smart Gain (in Mr McCoy’s words):

“would have faced extreme difficulty attempting to demonstrate that the development of, for example, workshop and greenhouse structures necessary to permit modern productive farming was ‘needed to support the existing natural landscape or scenic quality of the area or are essential infrastructure projects with overriding public interest”.

26.4  In the premises, the Secretary’s comments “were incompatible with the Notes to the draft OZP and therefore should be disregarded”.

27.Further representations from Smart Gain might (Mr McCoy contends) have compelled the OHC to arrive at some other conclusion.

28.In my judgment, there has plainly been no procedural irregularity of the nature alleged. 

29.Comparing the excerpt from the OHC minutes quoted above with Note (9)(b) to the draft OZP, one sees that the Secretary was merely repeating what Note (9)(b) says, no more, no less.  Coming into the meeting, Smart Gain must be presumed to have been aware of Note (9)(b) to the draft OZP which it was challenging.  Accordingly, Smart Gain had every opportunity to make such representations as it deemed appropriate in light of Note (9)(b).

30.I do not see then how it can suddenly have rendered the entire process unfair that, following Smart Gain’s departure, the Secretary drew the OHC’s attention to something (namely, Note (9)(b)) which had always formed part of the draft OZP.  I cannot see how the Secretary’s act can conceivably have created a false impression in any one’s mind.

31.There is no substance to this intended ground of judicial review.

B.    Objection 2: Was there an abdication of decision-making responsibility?

32.Mr McCoy submits that the OHC failed to exercise its decision-making responsibility.  This is because, in rejecting Smart Gain’s objections, the OHC adopted, practically word-for-word, the suggested reasons advanced by the Planning Department in OHC Paper No.242.

33.After a lengthy and detailed assessment of Smart Gain’s objections in relation to the 4 sites, OHC Paper No.242 concluded as follows (in §6.2):

“should the Committee maintains the previous decision of the Board not to propose any amendment to the Plan to meet the objection, the following reasons are suggested for Members” consideration:

(a) the Objection Sites comprise wooded slopes and river valley, which form a very significant and attractive landscape.  The “Conservation Area” zoning of the Objection Sites is appropriate to protect the natural landscape, the topographical features and the sensitive natural system in the area;

(b) the proposed residential developments in the Objection Sites 1, 2 and 3 would adversely affect the landscape quality and impose significant visual impact on the surrounding areas;

(c) the Objection Site 3 is overlooked by steep natural terrain with previous landslide record and subject to potential natural terrain hazards which is considered not suitable for any building structure.  The proposed recreation camp would also disrupt the existing green character of Objection Site 4, and the required access would result in loss of trees; and

(d) the Objector’s proposals would set an undesirable precedent for similar requests for other rezoning proposals. The cumulative effect of approving these requests would lead to adverse impacts on the natural landscape, environment, traffic and infrastructural provisions in the area.”

34.Save for insignificant changes, the reasons for the Board’s decision stated in its 9 December 2005 letter to Smart Gain tracks the wording proposed by the Planning Department in the OHC Paper.

35.Mr McCoy suggests that this is contrary to the principles stated by the Court of Appeal in The Law Society v. A Solicitor [2006] 1 HKLRD 49.  There Rogers VP said (at §§24-26):

“Two observations fall to be made in respect of this.  This court has on previous occasions emphasised the importance of the Tribunal itself writing its own decisions.  As was pointed out in the judgment of Le Pichon JA in The Solicitor and another v. The Law Society of Hong Kong [2005] 3 HKLRD 622 at paragraphs 17-32, the wording used in the articulation of reasons is vitally important.  If others are allowed to take over the role of writing the decision, even the first draft, there is a danger that there could be thoughts and expressions which come into a decision which would not otherwise [have] been there had the Tribunal itself written in its own decision.  As was correctly pointed out by Mr Dykes, in so far as there is mention in the Solicitors Disciplinary Tribunal Proceedings Rules of the Clerk, it is in the context of the Clerk giving no more than administrative assistance to the Tribunal.  It is certainly not envisaged that the Tribunal should be able to co-opt what would, in effect, be an additional member who would seemingly have considerable influence on the contents of the decision.  There is no justification under the Rules for the appointment of a solicitor, let alone a partner.

In my view, one who has stood trial before a disciplinary body is entitled to have the body’s reasons drafted by some other person.  If it were otherwise the right of appeal and review would be illusory.  As O’Leary J said in Bernstein and College of Physicians and Surgeons of Ontario 15 OR (2d) 447; 1977 Ont. Rep. LEXIS 286 (Steele J concurring):

“In my view it is an unusual and improper practice for counsel to write the reasons for the Discipline Committee even if the chairman or some member of the Committee has drafted rough reasons to guide him.  One who has stood trial before a disciplinary body is entitled to have that body’s reasons for its decision and not the reasons the prosecutor composes for the decision.  If the Committee has made an error in arriving at its conclusion the one who has stood trial, in fairness, should learn of it.”

In this case the difficulties which might arise of a person making suggestions to the Tribunal in secret which are referred to in paragraph 22 of Le Pichon JA’s judgment would appear to be relevant.  The Clerk had admittedly conducted legal research and communicated that to the Tribunal.  We were informed that the solicitor was neither told of the research, nor of the results of it, nor the fact that it had been communicated to the Tribunal.  This, in itself, must be clearly wrong.  At the time that must have happened the Clerk was a partner of the then President of the Law Society, thus unfortunately, and doubtless unintentionally, the impression might be given that independence was jeopardised.”

36.Smart Gain (Mr McCoy contends) is entitled to have the Board’s reasons in its own words.  Anything less would be an abdication of its decision-making responsibility to the Planning Department.

37.In my view, this submission lacks merit.  We are miles away from the situation in the case cited by Mr McCoy. 

38.In Law Society a Solicitors Disciplinary Tribunal exercising a judicial function delegated the task of writing its decision to a clerk.  In those circumstances, as the Court of Appeal points out, there may well be a failure by the tribunal to exercise its decision-making powers.  A solicitor before the tribunal is entitled to know why he is (say) being adjudged guilty, in the words of the tribunal, not in the words of a clerk to whom the tribunal delegates the task of coming up with appropriate words.

39.The vice in The Law Society was the employment of a third person (a clerk), who was not party to the proceedings, to come up with the wording for reasons, after the parties’ closing submissions had been heard.  That was unfair because the third person (who was not a member of the tribunal and thus not tasked with the duty of deciding) was effectively acting as an advocate of behalf of one or other party.  The clerk was suggesting to the decision-makers how the putative winning party’s arguments might best be phrased.

40.As the passage from Bernstein cited by the Court of Appeal notes, the vice is all the more worrisome where it is not just a neutral third person who is asked to draft a judgment. 

41.A tribunal frequently has its own counsel to assist in the conduct of proceedings.  Such counsel will typically act as “prosecutor” before the tribunal.  Where, despite this role, counsel is asked to draft the tribunal’s judgment, a defendant may reasonably claim to be aggrieved by not having the chance to respond to what (in effect) become further submissions (in the form of a proposed text) by the prosecutor to the tribunal.

42.In contrast, here a Board in the exercise of an administrative function has to determine whether to accept or reject certain objections to a draft OZP. 

43.The Board hears for and against the objections from Smart Gain and the Planning Department respectively.  As part of its submissions, the Planning Department (much as counsel before a Court do in written skeletons) invites the Board to adopt a particular form of words, if the Board is minded to reject the objections. 

44.The Board is free to adopt the wording in whole or in part as it pleases.  Smart Gain (which was aware of the proposed wording in advance of the OHC meeting) is free to make submissions on the wording as part of its own presentation.

45.If, having heard Smart Gain and the Planning Department and deliberated on the matter, the OHC decides that the wording proposed by the Planning Department adequately encapsulates the Board’s reasons, what (one asks rhetorically) is wrong about the Board adopting the suggested words? 

46.Judges themselves sometimes incorporate into their judgments wording suggested by counsel in submission.  Judges typically attribute such borrowed words to counsel of a given party.  They do this not out of indolence or an unwillingness to decide, but because in their judgment the words accurately articulate what they want to say. 

47.There can be nothing wrong or unfair in such practice to a litigant.  The latter would have had every opportunity during argument before the Court to comment on any wording advanced by opposing counsel.

48.I therefore do not think that Objection 2 is an arguable ground for judicial review.

C.    Objection 3: Whether irrelevant consideration taken into account

49.Mr McCoy contends that the Board was wrong to take into account the possibility that Smart Gain’s proposals would ‘set an undesirable precedent for similar requests for other rezoning proposals”.  The Board (Mr McCoy says) should not have been concerned with the possible effect of its decision in relation to other objections.

50.Mr McCoy notes that, of the 7 objections to the draft OZP, only Smart Gain’s related to the particular CA zone where the sites are located.  The other areas under objection had different characteristics (Mr McCoy observes) from those of the sites.  In any event, Mr McCoy suggests that a precedent for the development of the area had already been set by the nearby development of the HKUST Staff Quarters and private housing at Pik Shui San Tsuen.

51.I do not think that this is an arguable ground.

52.In OHC Paper No.242 the Planning Department submitted as follows (in §4.3):

“(a)    Other than the Objection Sites, about 19 ha of land within ‘CA’ zones in the Clear Water Bay Peninsula North area is privately owned.  Upholding the Objector’s proposal would set an undesirable precedent to similar applications for amendment to the plan in future.

(b)     AC for T/NT, TD retains his objection to the Objector’s proposals from the transport planning point of view.  He comments that any arbitrary change from ‘CA’ to “R(C)” and ‘V’ zonings would set an undesirable precedent for similar developments, the cumulative effects of which will adversely affect the traffic conditions at Clear Water Bay Road.  The TIA submitted has not taken into account the cumulative impacts of these and other proposed developments in the vicinity.”

53.Given the assessment in §4.3, the OHC Paper recommended the rejection of Smart Gain’s objections along the line set out in §6.2(d) (quoted above).  In adopting OHC Paper §6.2(d) and writing to Smart Gain in terms identical to that paragraph, the Board was clearly endorsing and accepting the Planning Department’s reasoning.

54.In that context, I cannot see how the Board can be accused of taking account of an irrelevant consideration. 

55.The Board felt that, if it acceded to Smart Gain’s rezoning proposals, other private owners might later put forward similar applications.  In such case, much as Smart Gain uses the existence of the HKUST Staff Quarters and Pik Shui private housing as an argument in its favour, the other private owners would say that they are entitled to be treated in like fashion to Smart Gain. 

56.It would then be harder for the Board to turn down similar requests from private owners.  On the other hand, the Board could not agree to all applications without (in the Board’s view) causing “adverse impacts on the natural landscape, environmental, traffic and infrastructural provisions in the area”.

57.Somewhere the Board would have to draw a line.  I can see nothing irrational or unreasonable in the Board drawing the line (with an eye to precedent) so as to exclude Smart Gain’s re-zoning proposals.  The Board must be entitled to take into account the possibility that Smart Gain’s re-zoning proposals would lead to similar proposals which could undermine the future integrity of the CA areas in the draft OZP.

58.Thus, I do not think that Objection 3 is arguable as a ground of review.

D.    Objection 4: Whether legitimate expectation ignored

59.Mr McCoy submits that Smart Gain had a legitimate expectation that the sites would not be zoned CA.

60.This expectation is said to arise as a result of correspondence and communications between the Planning Department and Tai Po Tsai Development Ltd. (TPTDL), Smart Gain’s associated company.  Smart Gain in particular relies on a letter dated 23 February 2001.  It is said that this expectation was further strengthened by representations made by the Planning Department on 1 March 2001.

61.TPTDL and Smart Gain belong the same Group.  TPTDL owns a significant number of lots near Hiram’s Highway, Pak Shui Wun Sai King and HKUST.  Smart Gain acquired the sites from TPTDL in August 2001.

62.In November 1999 TPTDL wrote to the Director of Planning as follows:

“In this light, we offer our valuable land holdings at Pak Shui Wun together with the adjacent government land, beaches and hitherto inaccessible hillside areas for the logical consideration of an excellent site for recreational and holiday resort development, together with a modest amount of high class, medium rise residential accommodation. We make this offer because we believe that the proximity of the site to the [HKUST] will lend itself admirably suitable for such a use.  This potential should be realized as soon as possible.  We are also a most willing partner to this noble cause and would wish your study to give the idea serious and positive support.”

63.In the course of 2000 TPTDL followed up by proposing a comprehensive residential, hotel and recreation development at Pak Shui Wun to the Planning Department.

64.By letter dated 18 May 2000 the Planning Department commented on TPTDL’s proposal as follows:

“(i) The [HKUST], the Tseung Kwan O (TKO) Industrial Estate and TKO Area 137 have offered opportunity for educational, research and technological developments in the sub-region.  The study team, after examination, considers it more appropriate to designate the area as part of ‘High Technology Development Node’ from the sub-regional planning perspective to nurture education and research activities and offer new opportunity for employment.

(ii) The proposed development concept in your submission is considered to be too extensive which may drastically alter the natural character and landscape quality of the area.

(iii) The submission has not addressed the possible impacts of the proposed development on the landscape, traffic, drainage and sewerage aspects and on the provision of community facilities.

(iv) Over 80% of the proposed development area is under Government land.  The proposal is considered unacceptable under current land policy.

(v) The requirements of EIAO would also need to be ascertained.”

65.The Planning Department’s letter appended a summary of comments on TPTDL’s proposal by various Government Departments.  Among those comments were the following:

“Sai Kung & Islands District Planning Office, Planning Department...

(a) The proposed development falls within an area zoned ‘Conservation Area’ (‘CA’) on the adopted Tseng Lan Shue, Tai Po Tsai and Silverstrand Outline Development Plan No.D/SK-TLS/1D....  The intention of the ‘CA’ zone is to retain the existing natural character and to safeguard the intrinsic landscape quality of the Area.  These areas constitute topographical features of woodland or areas of scenic value which should be prevents from encroachment of any development. Significant new developments are not permitted in this zone.

(b) The proposed development which will necessitate felling of existing dense broadleaf woodland is considered not in line with the planning intention of preserving the natural character of the area.  It is also not compatible with the surrounding environment which is natural in character and has not been disturbed by human activities allowing the proposed development will set an undesirable precedent for similar applications in the natural and undisturbed area in Clear Water Bay. As such, the proposed development is considered not acceptable from planning point of view.

Sai Kung District Lands Office, Lands Department...

(a) Based on the scant information given in the submission, the area proposed to be surrendered represents only about 16% of the area proposed to be developed, the rest being government land.  This is not acceptable from land policy point of view and is not supported.

(b) It is also noted that the proposed site is predominantly steep natural hillside which is densely vegetated and contains graves.

….

Transport Department...

I would like to reserve my comments until receiving a detailed traffic impact assessment to demonstrate the acceptability of the development proposals.  In particular I would rather concern on the access arrangement via the Chuk Kok Road for a development with 930 flats and 350 hotel rooms which would generate quite substantial traffics.

....”

66.On 5 February 2001 TPTDL wrote to the Planning Department to express concern about a reported remark by a Chief Town Planner.  TPTDL sought clarification.  It stated:-

“We refer, in particular, to the quotation that a Chief Town Planner, Mr Wong Mai Man, had given the [Ming Pao] reporter, Miss Chung Wai Yee, the view that the Pak Shui Wun area, after having been reserved for a technological and research zone would not be encouraged for residential, hotel or other similar uses thus completely ruling out such uses as may be complimentary and can well form a component part of the future Node.  Para 2.3 of page 2 of your official publication: Stage 2 Public Consultation Report issued in April 2000 refers. We are doubly surprised to note that the department is fully aware of the presence of the considerable amount of private land involved, of which we own most if not all.  If the HKUST were made the sole developer for every component part fo the Node, it would be completely contrary to the idea allocated in Para 2.9 of the same document.”

67.On 23 February 2001 the Director of Planning responded in the following terms:

“Thank you for your letter of 5 February 2001.May I take this opportunity to assure you hat all the comments and suggestions on the SENT [South East New Territories] draft Recommended Development Strategy are considered seriously and carefully.  In particular, your proposed corporate retreat (with a 15-storey hotel/ residential development/ conferencing/ training facilities on 15 ha of land) in Pak Shui Wun submitted in November 1999 has been considered in detail by government departments concerned and also by our planning consultants in the context of the SENT Development Strategy review.

You may notice that in the Stage 2 Public Consultation Report, issued in May 2000, that the above proposal could not be supported for a number of reasons, i.e. its excessive scale, adverse impacts on infrastructure provisions and out of keeping with the landscaping setting of the area.  Also, unlike what you have indicated in your letter, District Lands Officer/ Sai Kung advised us that 12.6 ha, or some 84% of the corporate retreat site, is Government land and inclusion of such large area of Government land into a private development scheme could not be supported without ample justifications.  On the other hand, being in proximity to the ‘technological node’ at HKUST, the area is considered to be a suitable extension for development into education/ research purpose to nurture education and research activities.  From a sub-regional planning perspective, such a development would strengthen technology developments and research at HKUST and Tseung Kwan O industrial Estate for the formation of a high-tech corridor in Clear Water Bay Peninsula.

The above assessments, together with relevant departments” detailed comments on your proposal, have actually been conveyed to you in our letter of 18 May 2000.  Since then, you have requested to meet with us to discuss your proposal but such a meeting was deferred at your accord.  Our concerns, as well as the other technical issues made known to you, have not been addressed so far.

The SENT recommended strategy only sets out the land use framework to facilitate future development in the sub-region.  While private sector initiatives in implementing the planning proposals are all encouraged, joint development would not be ruled out in the context of the Strategy, as long as the proposals are compatible with and able to create synergy in pursuing the principal them of the area, in this case, education and research.  In addition, the proposed use should not pose adverse impacts on the surrounding environment.  Unfortunately, neither your scheme submitted in 1999 nor the illustrative proposal presented at the public forum in January 2001 has demonstrated that this is the case.  Notwithstanding, we are open to different views and if you consider that you are in a position to formulate a proposal, I am pleased to discuss.”

68.According to Smart Gain’s Notice of Application for Judicial Review (Notice) (at §6):

“On or around 1 March 2001, Mr Lo Chai Wan, a consultant retained by the Group, had discussions with the Planning Department, and was led to believe that the Planning Department was every open-minded on the components of the proposed Research and Technology Centre of the [HKUST], and that facilities such a health centre and a hotel could be legitimate parts thereof, so long as they are subordinate and complimentary to the main theme.”

69.The Group then decided to transfer the 4 sites to Smart Gain in August 2001 “in order to facilitate the submission of development proposals relating solely to these sites” (Notice §7).

70.Contrary to Mr McCoy’s submission, I cannot discern from the events and statements which I have just summarised (including the meeting of Mr Lo Chai Wan with the Planning Department), any representation by the Government that “at least limited development of the [4] Sites would be permitted”. 

71.Note that TPTDL’s proposal in 2000 was different from the re-zoning being advocated by Smart Gain.  At best in early 2001, while pouring cold water on TPTDL’s proposal, the Government was saying that it retained an open mind on development in the SENT region. Certainly, Government made no clear, unambiguous representation that the sites (as later put forward by Smart Gain) would not be zoned CA.

72.Mr Lo Chai Wan made an affirmation in support of Smart Gain’s application.  Prior to becoming a consultant for Smart Gain, Mr Lo was Deputy Director in the Planning Department between 1991 and 1998.  He deposes as follows:

“Given the matters set out in the Notice and the Affirmation of Albert Ying Lam Yiu, I find that the Applicant does have a reasonable and legitimate expectation before its lots were zoned as CA in the draft OZP, much more thorough work should have been carried out to address its concerns.  I find the Board’s decision in relation to maintaining the most restrictive land use zoning as CA to be unreasonable.”

73.I am unable to attach any weight to Mr Lo’s assertions which I have just quoted.  Whether or not a person has a legitimate expectation is a conclusion of law.  Mr Lo’s personal views on the issue, however interesting, are irrelevant.  Similarly, the determination of whether something is or is not reasonable is for the Court.  It is not for Mr Lo to make “findings” on the matter.   

74.I do not find any relevant representation.  Smart Gain’s claim based on legitimate expectation cannot be sustained.  In my judgment, Objection 4 is unarguable.

E.      Objection 5: Whether decision wrong in law

75.Mr McCoy submits that the CA zoning amounted to a deprivation of Smart Gain’s property rights without compensation.  Here Mr McCoy echoes the arguments which Smart Gain advanced before the Board and which have already been summarised in my discussion of Objection 1.  Mr McCoy says that, if he is right, the CA zoning was contrary to Basic Law (BL) arts.6 and 105.

76.BL art. 6 provides that the Hong Kong Government ‘shall protect the right of private ownership of property in accordance with law”.

77.BL art.105 states:

“The Hong Kong Special Administrative Region shall, in accordance with law, protect the right of individuals and legal persons to the acquisition, use, disposal and inheritance of property and their right to compensation for lawful deprivation of their property.

Such compensation shall correspond to the real value of the property concerned at the time and shall be freely convertible and paid without undue delay.

The ownership of enterprises and the investments from outside the Region shall be protected by law.”

78.Mr McCoy’s Skeleton expressly acknowledged that:-

“restrictions on the use of property imposed by general regulatory laws do not constitute a deprivation of property for which compensation should be paid”

79.In the course of oral hearing, Mr McCoy initially seemed to resile from this position.  He seemed at first to be going so far as to suggest that, insofar as a CA zoning meant that a person could only use his agricultural land for plant nursery with Government permission, a CA zoning would amount to de facto expropriation without compensation. 

80.In such situation, there would (Mr McCoy seemed to contend) be an automatic contravention of art.105.  Instead, the correct way to proceed (Mr McCoy submitted) was for the Board to recommend to the Chief Executive in Council (pursuant to Town Planning Ordinance (Cap.131) s.4(2)) that the relevant agricultural land be resumed upon payment of compensation.

81.However, asked how that extreme position squared with authorities such as Grape Bay Limited v. Attorney General of Bermuda [2000] 1 WLR 574 (PC) (especially at 583 per Lord Hoffmann) and Fine Tower Associates Ltd. v. Town Planning Board HCAL No. 5 of 2004, 25 April 2005 (especially at §§51-53 per Hartmann J), Mr McCoy accepted that the law was more nuanced.

82.Mr McCoy reformulated his submission to the effect that a CA zoning would only amount to a wrong deprivation of property right, contrary to art.105, if there were no reasonable basis for imposing such a zoning on a plot of land.  In other words, Objection 5 is in effect another way of expressing Objection 6 (which I shall consider below).  There would be de facto expropriation if the CA zoning of Smart Gain’s land was perverse or irrational.

83.In my judgment, this reformulation represents a more realistic appreciation of the ambit of art.105 as far as the present case is concerned.

84.In Fine Tower, Hartmann J citing Lord Hoffmann in Grape Bay, pointed out (at §53):

“But, as Lord Hoffmann said, not all restrictions on the use of property imposed in the public interest by general regulatory laws constitute a deprivation of that property, giving rise to compensation.  To use his words: “the give and take of civil society frequently requires that the exercise of private rights should be restricted in the general public interest.  Whether the restrictions in each case do or do not amount to a deprivation of property is a matter of degree or, as Lord Hoffmann put it, a matter of looking to the substance of what has occurred.”

85.The real question then for the purposes of deciding whether to grant leave for judicial review is whether it is arguable that in deciding to retain a CA zoning for the sites the Board acted perversely or irrationally.  This is the evaluation which I must undertake in relation to Objection 6.

86.But, before turning to Objection 6, I would make 2 observations.

87.First, in my discussion of Objection 1, I quoted Mr McCoy’s submission that in reality it will be difficult to obtain permission to run plant nurseries on any of the sites.  This is because, on the assumption (which Smart Gain disputes) that there is something worth conserving in respect of the sites, it will be practically impossible (Mr McCoy suggests) for Smart Gain to persuade the Government to give the necessary permission for (say) the “workshop and greenhouse structures necessary to permit modern productive farming”.

88.I find the submission puzzling.  At present, the Government leases for the sites restrict their use to agricultural purposes.  The leases do not permit the building of structures on the sites.  In those circumstances, even without a CA zoning, I doubt that Smart Gain is entitled under its leases to build ‘structures” without Government permission.

89.Even if I am wrong in that, it seems to me that Mr McCoy’s reasoning is problematic. 

90.He assumes (contrary to his case) that there is something worth conserving, so that permission to build structures will not be forthcoming.  However, if there is something worth conserving, then it follows that the CA zoning is justifiable and cannot be treated as irrational.  On the basis of Fine Tower, the Board would be entitled to impose a CA zoning and there would be no unlawful deprivation.

91.On the other hand, if one assumes that (consistently with Smart Gain’s case) there is nothing worth conserving, Mr McCoy’s supposed difficulties in obtaining permission for ‘structures” hardly seems compelling.  Presumably, the less that there is worth conserving on a given site, the more likely it is that the Government will give the requisite permission for plant nursery upon application by Smart Gain.

92.Second, given Mr McCoy’s acceptance that there were features worth conserving in Site 4, it must follow from his reformulated submission that a CA zoning for Site 4 is justified. A CA zoning for Site 4 must be reasonable.  To that extent at least, Smart Gain must fail on both Objections 5 and 6.

F.    Objection 6: Whether decision perverse

F.1    Smart Gain’s complaints

93.In relation to Site 1, Smart Gain’s Notice says that the decision was unreasonable because:

93.1  The site had already been partly cleared in the past and was now being used for storage.  The site can hardly be said to “comprise wooded slopes and river valley, which formed a very significant and attractive landscape” as alleged by the Board in its 9 December 2005 letter.

93.2  The site “did not have much significance in terms of conservation value in any event to justify the zoning of the site as CA”.

93.3  The Director of Agriculture, Fisheries and Conservation (DAFC) had no objection to re-zoning the sites already cleared.

94.In relation to Site 2, the Notice complains of the decision on the following grounds:

94.1  The Board failed to take account of the submissions of TPT Village representatives who pointed out that Site 2 originally formed part of their village. 

94.2  There was a shortage of available land for small houses in the village.  It would be logical to expand the present TPT Village by re-zoning Site 2 as V to meet outstanding small house applications.

94.3  The Board wrongly reasoned that Site 2 was outside the “environs” of TPT Village so that small house developments could not be allowed there under the current Small House Policy.  The Board failed to appreciate that, whatever its geographical location, if Site 2 were classified V, then small houses could also be built there.

95.In relation to Site 3, the Notice complains of the following:

95.1  The Board thought that Smart Gain’s development on Site 3 would be visually intrusive.  But Site 3 is surrounded by tall trees and low-rise buildings would not be visible from the surrounding area.

95.2  The development proposed for Site 3 is less in size and intensity than HKUST Staff Quarters.  Given that the latter was permitted, the former should be unobjectionable.

95.3  Smart Gain was not told why the access from Site 3 to University Road was unacceptable.  The Applicant had no chance to address this concern at the OHC Meeting on 2 November 2005.

96.The Notice alleges that the CA zoning for Site 4 was irrational.  Given Mr McCoy’s concession at the oral hearing before me, any contentions to the contrary in the Notice must fall way.  Nonetheless, I shall deal with them briefly for completeness.

97.The Notice says the following in relation to Site 4:

97.1  The Board was wrongly concerned that the proposed development of Site 4 would result in a significant loss of vegetation and would disturb the Archaeological Site. 

97.2  Smart Gain’s proposed development met these objections since the area around the Archaeological Site would remain unexcavated as an open lawn. Smart Gain would also fund archaeological excavation work to ensure that any artifacts found around the area were properly collected and preserved.

97.3  Potential natural terrain hazards (such as landslides) could be addressed in the detailed design stage.

97.4  The site would largely be accessed through the sea rather than by land so as to minimise adverse impacts on vegetation.

97.5  The Antiquities and Monuments Office (AMO) supported Smart Gain’s proposals.

98.In my judgment, none of the grounds raised in the Notice can give rise to a case of irrationality.

F.2    Site 1

99.In respect of Site 1, the Planning Department submitted as follows in OHC Paper No.242 (at §4.1(d)):

“From the landscape planning point of view, the Objector’s proposals in Objections Sites 1, 2 and 3 would adversely affect the landscape quality and planning function of the areas and result in a coalescence of the existing village and development centres.  Although Objection Sites 1, 2 and 3 are adjacent to some existing development, i.e. the staff quarter of the HKUST and Pik Shui Sun Tsuen, the Chief Architect/Architectural and Statutory Compliance, Architectural Services Department (CA/ASC, Arch SD) maintains his previous comments that the existing ‘CA’ zoning could help to “dilute” the intensity of the built-up areas.  He considers that the Objector’s proposals in Objection Sites 1, 2 and 3 would inevitably impose significant visual impact on the surrounding areas.”

99.    It is plain from the minutes of the OHC’s deliberations following Smart Gain’s representations, that the OHC substantially accepted the Planning Department’s view.  Thus, it was necessary (the OHC thought) to maintain a “buffer” between what had been developed in the past (such as HKUST Staff Quarter) and what was sought to be preserved for posterity.  The minutes record this conclusion as follows (at §25):

“Members considered that Sites 2, 3 and 4 should definitely be retained as ‘CA’ since they were located adjacent to environmentally sensitive areas and formed an integral part of the natural landscape and ecosystem in the area.  For Site 1, although the site had largely been cleared and the conservation value was relatively lower, allowing development on this site would send a wrong message to private land owners that once a piece of agricultural land was cleared, development would be allowed.  For the above reasons, Members considered that the zoning of all four sites should be retained as ‘CA’.  The Chairman added that there some 19 ha of private land zoned ‘CA’ on the Plan.  The precedent effect of rezoning the objection sites should be duly taken into consideration.”

100.As far as I can see, there is nothing to reproach in this succinct summary of the  Board’s thought process.

101.The Board adopted the grounds for rejecting Smart Gain’s objections suggested by the Planning Department.  Paragraphs (a) and (b) of those grounds simply refer to “the objection sites” as comprising “wooded slopes and river valley, which formed a very significant and attractive landscape”.  Mr McCoy criticises this for being too general, especially since Site 1 has been partly cleared.  Mr McCoy says that the sites should have been treated separately.

102.But Mr McCoy reads grounds (a) and (b) too narrowly. 

103.Fairly read in the context of Minutes §25, grounds (a) and (b) do no more than encapsulate the Planning Department’s submission.  Sites 1, 2, 3 and 4 form part of a larger natural landscape.  With the exception of Site 4, there may or may not be extraordinary or distinct features worth preserving in Sites 1, 2 and 3 considered individually.  But at the very least those 3 sites can serve as a buffer to protect the more sensitive parts of the CA area from existing development.

104.I do not see how such reasoning by the Board can be characterised as Wednesbury unreasonable, such that no rational Board could ever come to the same conclusion.

105.In particular, in relation to Site 1, the OHC accepted that there was less to conserve on the site itself.  But it might still function as a buffer.  In any event, as discussed in relation to Objection 3, the Board was entitled to consider that allowing development to encroach on Site 1 would not only diminish the existing buffer but also set an undesirable precedent.

106.The Notice further misrepresents the DAFC’s views.  He is recorded (in TPB Paper No.7356 attached to OHC Paper No.242) as having held the following opinion (at §6.1.2):

“DAFC notes that the Objection Sites are covered with natural or semi-natural vegetation except Objection Site 1.  The Objection Sites, together with the adjacent natural wooded slopes in the ‘CA’ zone, form a contiguous natural habitat.  Therefore, he considers that the ‘CA’ zoning appropriate.  Nonetheless, he has no strong view to rezone those areas already cleared to other zoning if there is strong planning justification.”

107.In that light, I do not think that it can be argued that the DAFC’s views somehow rendered the OHC’s decision on Site 1 irrational.

F.3    Site 2

108.As for Site 2, the Board was not duty-bound to zone the area as V simply on the basis of the TPT Village representations. The latter could only be one of the factors which the Board had to take into account.

109.The Planning Department noted the following in OHC Paper No.242 (at §4.12(f)):

“As Objection Site 2 is physically separated from Tai Po Tsai Village, the District Lands Office/ Sai Kung considers that the ground for village expansion is difficult to justify.  Moreover, as the site is not located within any village ‘environs’, Small House applications for these lots would not be considered under the current Small House policy.  Although the land reserved (1.95 ha or equivalent to 78 Small House sites) in tai Po Tsai Village may not be sufficient to meet the estimated demand of 90 Small Houses by 2013, the overall supply of Small House sites in the Clear Water Bay Peninsula North area is generally adequate.  In this regard, further expansion of the ‘V’ zone at this stage is considered not necessary.  Planning Department will regularly review the supply of Small House sites based on the most up-to-dated demand figure to be provided by DLO/SK.”

110.It is plain from the OHC minutes that the Board gave careful consideration to the villagers” submissions on the need for small housing.  In the end, however, the Board agreed with the Planning Department’s assessment as to the supply of land suitable for small houses for villagers.  The minutes record (at §§23-24):

“A Member said that although there was sufficient land in the Clear Water Bat Peninsula North area to meet the Small House demand as a whole, the villagers of Tai Po Tsai Village might have difficulty in obtaining land outside their village to build Small Houses.  The Chairman responded that taking account of th difficulty in identifying suitable land in the environmentally sensitive area for development, the approach adopted by the Board was to accommodate the Small House demand on a district basis rather than individual village basis.  It should also be noted that Site 2 was not located within any village ‘environs’.  According to DLO/SK, development of Small Houses would not be allowed outside the village ‘environs’ under the Small House Policy.”

111.Accordingly, it seems to me that the Board was entitled to think that the need to maintain Site 2 as a buffer zone (and not for the supply of land for small houses) was a critical factor.

112.I am not persuaded by the argument that, if Site 2 were zoned V, then it would be available for village housing. 

113.It must have been reasonable for the Board to consider the proximity (or lack of it) between Site 2 and the present TPT Village in deciding whether it was appropriate to zone Site as V. The closer Site 2 is to the village the more compelling might be the argument for classifying it as V.  How close it would have to be to merit a V zoning, would be a matter for the discretion and judgment of Board members.

114.But it is beside the point to say that the Board could not take proximity (or lack of it) into account because, if classified as V land, Site 2 would be available for small houses. The same could be said of a piece of land anywhere in the New Territories.  If zoned as V, then any such land could be used for small houses.  No intrinsic feature is identified by this argument as compelling a V zoning for Site 2.  By itself, the argument provides no basis for concluding that the Board was wrong to reject a re-zoning of Site 2.

115.I therefore do not think that it is arguable that the Board erred in relation to Site 2.

F.4    Site 3

116.As for Site 3, for the reasons discussed, the Board must have been entitled to regard the area as part of a buffer zone, especially in respect of HKUST Staff Quarter.

117.Further, whether or not a structure (yet to be built) would be visible or invisible from the surrounding environment, is a matter of subjective impression.  I see nothing in the evidence that leads me to conclude that no rational board could come to the conclusion reached here in relation to Site 3.

118.On traffic, access to Site 3 is from University Road.  That then feeds into Clear Water Bay Road. 

119.Smart Gain knew from OHC Paper No.242 that there were queries over the traffic situation going in and out of Site 3.  If it did not understand the reason for the queries, it could have asked at any time during or before its presentation to the OHC meeting. 

120.In any case, OHC Paper No.242 and the annexed TPB Paper No.7356 both specify why there was concern over traffic.  The OHC Paper deals with potential traffic at §4.3 (quoted above).  The TPB paper states (at §6.1.1):

“AC for T/NT, TD advises that the existing road link in the area for the four Objection Sites is local Chuk Kok Road and then Clear Water Bay Road, which is a narrow single 2-land carriageway with limited capacity.  There is no improvement proposal for this stretch of road at present.”

121.I therefore do not think that it can be suggested that the Board’s decision in relation to Site 3 was perverse.

F.5    Site 5

122.As for Site 4, the Planning Department in OHC Paper No.242 stated (at §4.1(h)):

“Objection Site 4 is located within a very large valley setting, which forms an integral part of the local landscape.  The proposed recreation camp on the site would result in significant loss of vegetation and disruption to the existing green character of the area, and the access required for construction and operation of the recreation camp would even further exemplify the impacts.  As such, the Objector’s proposal to rezone Objection Site 4 from ‘CA’ to “REC” is not supported from both urban design and landscape planning points of view.  CA/ASC, Arch SD also objects to rezone Objection Site 4 to “REC” with recreation facilities because the area would be visited by a lot of people and the Pak Shui Wun Archaeological Site might be disturbed.  Moreover, the Head of Geotechnical Engineering Office, Civil Engineering and Development Department (CEDD) reiterates his previous comments that Objection Site 4 is overlooked by steep natural terrain with previous landslide records.  In addition, there are several natural drainage lines intersecting the low-lying flat areas at the eastern part of the subject ‘CA’ zone.  These drainage lines provide credible flow paths that would channelize landslide debris to the eastern fringe of the subject ‘CA’ zone.  The overall site conditions indicate that Objection Site 4 is subject to potential natural landslide hazards.”

123.The OHC Paper (at §4.4) summarises the AMO’s views thus:

“AMO, LCSD considers that the proposed archaeological survey with financial support from the Objector would help further assess the extent and the distribution of the archaeological deposits within the Pak Shui Wun Archaeological Site.  Nevertheless, he reminds the Objector that if significant archaeological remains are discovered, appropriate mitigation measures, including in-situ preservation, should be designed and fully implemented by the Objector in consultation with AMO.  Nevertheless, the existing ‘CA’ zoning is considered the most appropriate zoning for avoiding any forms of disturbance to subsurface archaeological remains within the archaeological site.”

124.It will be seen that, far from supporting Smart Gain’s case for a re-zoning of Site 4, the AMO preferred a CA zoning.

125.In light of the comments in the OHC Paper, it is hardly surprising that Mr McCoy was constrained to accept that a CA zoning for Site 4 was justifiable.  I cannot see how the Board’s decision on Site 4 can be impeached.

F.6    Miscellaneous ground

126.The Notice ends by alleging that the CA zoning was wrong because it did not follow the practice used for Country Park zoning. 

127.Smart Gain suggests that when areas are zoned for Country Parks, private lands within the area are usually excluded from such classification.  Since both the CA and Country Park zoning prohibit development, the practice used in the latter should have been (Smart Gain argues) used in relation to the sites here.  Not to do so was unreasonable and wrong in law.

128.I do not think that the argument is tenable. 

129.I have not been directed to any statute or regulation requiring the carving out of private land from a CA zone.  To the contrary, on close analysis, none of the grounds advanced by Smart Gain suggest that any laws (not even the Basic Law) have been contravened.

130.Further, as mentioned above, the Board was entitled to regard the integrity of the proposed CA area and evaluate whether the Sites should (despite being private land) be classified CA by way of a buffer against encroaching development.  There cannot have been anything objectionable in such approach.

F.7    Conclusion on Objection 6

131.Objection 6 is bound to fail as a ground of judicial review.

IV.    CONCLUSION

132.The proposed judicial review is untenable.  It fails to meet the threshold of “argument” which must be established at the leave stage.  Leave is refused.

Mr. Gerard McCoy, SC leading Mr. Collin Wright, instructed by Messrs Johnson, Stokes & Master, for the Applicant