Super Lion Enterprises Ltd and Others v. The Commissioner of Rating and Valuation

HCAL 71, 95, 96, 110, 78-92,
134, 148-152/2005 and
13, 17, 22-24, 48, 52/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO. 71 OF 2005

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AND

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO. 95 OF 2005

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BETWEEN

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AND

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NOS. 78-92, 134, 148-152 OF 2005 and
13, 17, 22-24, 48 and 52 OF 2006

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BETWEEN

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AND

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO. 96 OF 2005

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BETWEEN

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AND

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO. 110 OF 2005

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BETWEEN

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(HEARD TOGETHER)

Before : Hon Hartmann J in Court

Dates of Hearing : 21-23 and 26-29 June 2006

Date of Handing Down Judgment : 6 October 2006

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J U D G M E N T
(containing corrigendum amendments)

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Introduction

1.The more than 200 applicants in these applications for judicial review are all limited liability companies carrying on the business of property development.

2.All of the applicants have been engaged in long-running appeal proceedings before the Lands Tribunal.  In terms of those proceedings, the applicants have challenged, first, the purported statutory power of the Commissioner of Rating and Valuation, the respondent, to demand an annual rent from them in respect of certain undeveloped Government land leased to them and, second, if the Commissioner is found to have such power, the method by which he has assessed the amount of that rent.

3.As far back as late 1997, the Commissioner began to seek payment of rent from the applicants pursuant to the Government Rent (Assessment and Collection) Ordinance, Cap.515 (‘the Rent Ordinance’) and Regulations made under that Ordinance.  The appeal proceedings arose out of those demands.

4.In terms of s.29(1) of the Rent Ordinance, even if a lessee appeals against a demand for rent made by the Commissioner he remains liable to pay the full sum demanded unless the Commissioner agrees to hold over payment. 

5.All of the applicants in the first four applications – the ‘Super Lion’, ‘Turbo Top’, ‘MTR’ and ‘Chest Gain’ applications – sought holding over orders from the Commissioner and duly obtained such orders from him.

6.However, before the final determination of their appeals – indeed, the appeal proceedings are still on-going – all of the applicants in the first four applications were informed by the Commissioner that he had made the decision to withdraw and/or cancel all of the holding over orders and that he would shortly be demanding payment of outstanding rent.  It is this decision in respect of which they seek orders of certiorari.

7.Having made the decision to withdraw and/or cancel the holding over orders, the Commissioner made the further decision that, unless individual circumstances dictated otherwise, there remained no further sufficient justification for granting further holding over orders.  In a series of letters dated 6 May 2005 onwards, this decision was notified to the applicants in the fifth application, that of ‘Beachshore’.  It is this decision to refuse to grant further holding over orders that is challenged by the applicants in the ‘Beachshore’ application.  They seek orders of certiorari quashing the Commissioner’s decisions and orders of mandamus directing that he reconsider the applications.

8.In summary, although not all of the applicants share the same grounds of challenge, it may be said that the single issue to be determined in all the applications now before me is whether the Commissioner acted lawfully – in that he had the power to act and did so reasonably – in withdrawing and/or cancelling his holding over orders and in refusing to issue further orders.

Background

9.The Basic Law – arts.120 and 121 – recognises and protects leases of Government land which were entered into before the change of sovereignty but extend beyond it.  No additional premium is required but an annual rental equivalent to 3% of the rateable value of the leased site must be paid.

10.In the run up to the change of sovereignty, in order to give effect to those provisions of the Basic Law, the Rent Ordinance, together with Regulations made under it, were brought into law.  Leases falling under this new legislation were defined as ‘applicable leases’.

11.Prior to the legislation coming into force, parcels of land that were still awaiting development or completion of development – that is, ‘development’ as opposed to ‘developed’ sites – had been given no rateable value.  However, under the new legislation, even if an applicable lease concerned a development site, it remained liable to an annual rental equivalent to 3% of the rateable value of the site.  In this regard, reg.2 of the Rent Regulations reads :

“      Where any leased land has not been developed after the commencement of the term of the applicable lease under which it is leased, the rateable value of the leased land at any time before any part of it is developed shall be ascertained as if the leased land were a tenement liable for assessment to rates under the Rating Ordinance (Cap 116).”

12.After the change of sovereignty, the Commissioner began the exercise of assessing the rateable value of development sites that were the subject of applicable leases and, on the basis of such calculations, began to serve notices of demand for payment of annual rent.

13.As I have indicated earlier, the property developers who received these demands – the applicants now before me – were of the view, first, that the Commissioner had no power in law to demand payment of an annual rent in respect of development sites and, second, that in any event, even if the Commissioner had such power, the land having no rateable value, the annual rent should be nil.

14.The developers proceeded in terms of the Rent Ordinance to object to the demands and to appeal to the Lands Tribunal.  However, as I have also indicated earlier, even though litigation had commenced, the developers remained liable to pay the rent demanded unless the Commissioner agreed to hold over payment.  In this regard, s.29(1) of the Rent Ordinance provides that —

“A lessee, owner or occupier must pay Government rent as demanded despite any proposal, objection or appeal that has not been finalised unless the Commissioner orders that payment of the Government rent, or a part of the Government rent, be held over pending the determination of the appeal.”

15.Accordingly, the developers applied to the Commissioner to hold over payment of rent pending determination of their appeals.  Prior to making his decision in 2005 not to agree to any more holding over orders, the Commissioner agreed to all the applications that came before him or at least, perhaps more accurately, did not refuse any.  In this regard, it is important to note that, in agreeing to make his various orders, the Commissioner gave no reasons for his individual decisions to the developers.

16.However, internally there was naturally enough some exposition of reasoning.  In a memorandum dated 28 July 1997 addressed to the Secretary for Treasury, the Commissioner said the following :

“Despite what is provided in section 2 of the Regulations, there is still some doubt regarding the rateability of land under development and the method of assessment.  For this reason, I am inclined to issue the necessary orders to suspend full payment of Government rent including surcharges (if any) until the appeal is determined …”

The following day, the Commissioner wrote :

“I realise that my proposed action to issue the order to withhold payment of Government rent and to waive surcharges is rather unusual.  However, I consider this to be a special case since sites under development are not rateable under the rating principles and it is by no means certain that the Lands Tribunal will now hold they are capable of assessment.”

17.Over an extended period of time, as more developers joined the litigation and requested that payment of rent be held over pending the determination of their appeals, the Commissioner made a substantial number of holding over orders.  Again, the orders did not state why the Commissioner had decided on a favourable exercise of his discretion but it is apparent – from the internal documentation – that he recognised that his position in law was not beyond doubt and that, in the circumstances, fairness – including uniformity of treatment – made it the appropriate course to take.

18.It is correct to say, I think, that the Commissioner did not expect that the litigation would endure as long as it has.  In terms of interminability, it has become almost Dickensian.  

19.By way of some brief history, in September 1998, the appeals then before the Lands Tribunal were consolidated for the purposes of determining certain preliminary points of law.  The judgment of the Lands Tribunal on these preliminary points was appealed and cross-appealed all the way to the Court of Final Appeal which handed down its judgment in March 2001 : Commissioner of Rating and Valuation v. Agrila Ltd and Others (2001) 4 HKCFAR 83.

20.In its judgment, the Court of Final Appeal held that the legislation under which the Commissioner had assessed and levied his demands for payment of rent was not inconsistent with the Basic Law, that the legislation was valid and that the Commissioner had acted intra vires.  As to the methodology to be employed in calculating the actual rent due on development sites, the Court identified certain founding principles but went on to say (at p.108G) :

“The appropriate mode of valuation, apart from what is prescribed by relevant principles of law, is a matter for the Lands Tribunal to determine.  It is not for this Court to express an opinion about valuation or about the appropriateness of any method of valuation.”

21.Issues going to the ‘appropriate mode of valuation’ were therefore returned to the Lands Tribunal for determination.  A test case was agreed upon as the best way forward, all the other appeals being adjourned.  The test case was that of Best Origin Limited.  The issues, however, even though essentially to methodology, remained profoundly vexed.

22.By about September 2004, the litigation had endured for some seven years.  The amount of Government rent being held over at that time exceeded $1.24 billion and would increase, of course, as payments continued to be held over and new holding over orders were made in respect of new development sites.

23.The Commissioner admitted to being increasingly concerned.  By letter dated 31 January 2005, he informed affected developers that he was considering withdrawing his holding over orders.  He gave reasons for this provisional view and sought representations.

24.By letter dated 29April 2005, having considered those representations, the Commissioner informed the affected developers that the decision was now made to withdraw his holding over orders forthwith.  Demands for payment of outstanding rent, he said, would be sent out as soon as they had been prepared.

25.Having decided that, absent persuasive individual circumstances, no justification existed for granting further orders, the Commissioner informed the appellants who sought the granting of new orders that they would not be granted.

The stated basis for the Commissioner’s decisions to withdraw the holding over orders

26.In his letter of 31 January 2005, the Commissioner informed all affected developers that he had formed the provisional view that no justification existed for the continuance of such orders and that they should be withdrawn.  He had come to this view, he said, on two separate and distinct bases.  Those two bases may be described as follows.

a.     The assertion of a general power under s.46 of the Interpretation and General Clauses Ordinance

27.It was the Commissioner’s assertion that, in addition to the specific powers given to him under s.29 of the Rent Ordinance, he possessed an additional power under s.46 of the Interpretation and General Clauses Ordinance, Cap.1 (‘the Interpretation Ordinance’) to cancel the orders made by him if he believed there was sufficient reason to do so.  As he said in the letter :

“Section 29(1) sets out a general legal principle that Government Rent must be paid notwithstanding any objection or appeal.  That principle is disapplied if I think that there are sufficient grounds for me to exercise my discretion to make a holding over order.  Where such an order is made and I am subsequently of the opinion that there cease to be sufficient grounds to justify continuing to hold over Government Rent, I am empowered by section 46 of the Interpretation and General Clauses Ordinance to withdraw the order, in addition to my specific powers contained in section 29(5) of the Rent Ordinance.”

28.S.46 of the Interpretation Ordinance provides that where any Ordinance confers the power to make any order, it shall include power to amend, suspend or withdraw any such order.

29.S.46, however, must be read with s.2(1) of the same Ordinance which provides that :

“Save where the contrary intention appears either from this Ordinance or from the context of any other Ordinance or instrument, the provisions of this Ordinance shall apply to this Ordinance and to any other Ordinance in force …” 

30.The Commissioner’s assertion was contested by the affected developers.  In a nutshell, it was their contention that, considered in context, the provisions of s.29 of the Rent Ordinance constitute a self-contained scheme which excludes any additional power under s.46 of the Interpretation Ordinance.

31.Whether the relevant provisions of the Rent Ordinance, construed in context, do or do not exclude the Commissioner’s power under s.46 of the Interpretation Ordinance is a primary issue that falls for determination in all the applications now before me.

32.But assuming for the moment that the Commissioner does possess the power, it is of course an administrative power that must be exercised reasonably.

33.In this regard, in his letter of 31 January 2005 in which he set out his provisional views, the Commissioner first explained how he had come to grant the holding over orders :

“… holding over orders were made in relation to Government Rent on development sites because I recognised that some rent payers were raising legal challenges such as the vires of the relevant Rent Regulations and their compliance with the Basic Law.  Although those points were not raised by all lessees of development sites, I thought it appropriate to take the same stance on the holding over of Government Rent for such lessees.”

34.The Commissioner went on to say that, since ‘the legal challenges’ had all been rejected by the Court of Final Appeal, the grounds upon which his holding over orders had been granted had now ceased to exist.

35.As for the continuing appeal proceedings in respect of the ‘mode of valuation’, the Commissioner said that, in the light of his expert reports already lodged with the Lands Tribunal, he had conducted an extensive review and had concluded that the ‘Contractor’s Method’ adopted by him was soundly based and well supported by the ‘Receipts and Expenditure Method’, the back-up method he had chosen.  His expert reports, he said, provided ‘robust support’ for the rateable values he had given to the development sites.  The opposing expert report he said, had not undermined his opinion that the rateable values he had assessed were correct.  In short, it was the Commissioner’s assertion that, in respect of the ‘mode of valuation’ proceedings, he believed he had a strong case, a case in which he had every confidence.

36.The Commissioner concluded by saying that, in his view, there was no justification for withdrawing only some orders but allowing others to stand :

“In no case has the discretion to hold over rent been exercised upon the merits of a case put forward by a single lessee.  Accordingly, I am minded to decide that the holding over orders should be withdrawn in the case of all development sites.”

37.As for the Commissioner’s refusal to issue new holding over orders, his reasoning was essentially to the effect that, there being insufficient justification to continue the existing orders, there was no general justification for issuing new ones : absent persuasive individual circumstances.

38.The applicants in the ‘Super Lion’, ‘Turbo Top’, ‘MTR’ and ‘Chest Gain’ applications assert that, if the Commissioner had the power to withdraw the holding over orders, his decision to do so was an unreasonable decision.  The applicants who were refused holding over orders, those in the ‘Beachshore’ and ‘MTR’ applications, assert that this decision too was an unreasonable one.

b.    The assertion of abuse of process

39.It was the Commissioner’s second assertion that the manner in which counsel for certain of the appellants, those represented by Messrs Woo, Kwan, Lee & Lo, were conducting the continuing ‘mode of valuation’ litigation amounted to an abuse of process :

“The expert evidence submitted by the Appellant in the Best Origin appeal is based upon legal arguments by their Counsel which, according to advice received by me, involve either (a) arguments which have already been raised before and decided by the Court of Final Appeal in the Agrila case or (b) arguments which should have been put by the Government lessees as part of their case before the Court of Final Appeal.  This conduct falls squarely within the definition of abuse of process …”

40.The allegation of abuse of process had been raised earlier with Woo, Kwan, Lee & Lo and the allegation had been denied.  As to how the issue was to be resolved, it appears that counsel for the appellants in the Best Origin appeal were of the view that it should be resolved, not as a preliminary issue before the Lands Tribunal, but as part and parcel of the substantive hearing.  This did not find favour with the Commissioner :

“The solicitors [for the developers] assert, without any proper explanation, that the arguments they now wish to put forward are inextricably bound up with the merits of the abuse of process argument.  That ignores the simple point that it is first necessary to identify what points have already been argued and decided by the Courts before it is possible to identify those arguments which are claimed to be ‘new’.  The Appellant in the Best Origin appeal has failed to do this.  The stance which has been taken is all the more unreasonable given that a great deal of time and costs were expended in resolving at the highest level a number of legal issues of fundamental importance to the outcome of all the outstanding appeals.”

41.The Commissioner concluded by saying that in his opinion, the abuse of process had resulted in unreasonable delay :

“I am concerned that the decision to base the evidence in the Best Origin appeal on the legal arguments to which I have referred has already caused significant delay to the resolution of the Best Origin appeal and all other Government Rent appeals on development sites.  This includes the delay which would have been avoided if evidence had been prepared without relying on the legal contentions which constitute an abuse of process.

Furthermore, there is a real likelihood that the resolution of the abuse of process issue will delay the conclusion of the Best Origin appeal and other appeals.  I have formed the provisional view that Best Origin has been and is unreasonably delaying its appeal and that the same applies to those parties associated with Best Origin or represented by the Solicitors, or to those parties who have been content for their appeal to be adjourned to await the outcome of the Best Origin appeal.”

42.That the Commissioner was lawfully entitled to come to the conclusion he did in respect of the abuse of process issue has also been challenged as a decision not open to a reasonable decision maker.

The decisions to ‘withdraw’ and/or ‘cancel’ orders

43.I have earlier spoken of the Commissioner’s decision to withdraw and/or cancel the holding over orders.  As I understand it, the Commissioner sought to ‘withdraw’ the orders pursuant to his powers under s.46 of the Interpretation Ordinance and to ‘cancel’ the orders pursuant to is powers under s.29(5) of the Rent Ordinance.  It is an important distinction.

The letter of 29 April 2005

44.In his letter of 29 April 2005, the Commissioner, having confirmed that he had considered all representations, confirmed the provisional views expressed in his earlier letter.

45.In respect of his asserted power to withdraw the holding over orders pursuant to s.46 of the Interpretation Ordinance, he said he had exercised that power because —

“(i)    The basis for making the holding over orders has ceased to exist; and

(ii)   There are no other circumstances sufficient to displace or rebut the principle in section 29(1) that Government Rent is payable notwithstanding an appeal against the rateable value in the Rent Roll.”

46.In respect of the abuse of process issue, he said :

“… you have not persuaded me to depart from the provisional view set out in my letter of 31 January 2005 that Best Origin and the other parties represented by you have been unreasonably delaying their appeals and that this is a separate ground for the cancellation of the holding over orders. … Accordingly, I hereby decide that the orders under section 29(1) of the Rent Ordinance … are cancelled under section 29(5) forthwith.”

The individual grounds of challenge : the ‘Super Lion’ and ‘Turbo Top’ applications

47.It is against this background that I turn now to consider the challenges mounted by the various applicants.

48.On behalf of the applicants in the ‘Super Lion’ application and ‘Turbo Top’ in its application, Mr Root, QC, leading counsel, advanced four shared grounds of challenge.  On behalf of the applicants in the ‘Super Lion’ application only, he also advanced a fifth ground.

a.     The first ground of challenge

49.The Commissioner purported to withdraw his holding over orders in terms of powers given to him under s.46 of the Interpretation Ordinance.  That section, in so far as it relevant, reads :

“	Where any Ordinance confers power upon any person to make, grant, issue or approve any … order … such power shall include power—
	(a)	to amend or suspend such … order …
	(b)	to substitute another … order … for one already made …
	(c)	to withdraw approval of any … order …”  [my emphasis]

50.S,46, however, must be read with s.2(1) of the same Ordinance which provides that :

“Save where the contrary intention appears either from this Ordinance or from the context of any other Ordinance or instrument, the provisions of this Ordinance shall apply to this Ordinance and to any other Ordinance in force, whether such other Ordinance came or comes into operation before or after the commencement of this Ordinance, and to any instrument made or issued under or by virtue of any such Ordinance.”  [my emphasis]

51.In short, the powers conferred by s.46 are given to the Commissioner when he discharges his statutory duties under the Rent Ordinance unless, in the Rent Ordinance itself, a contrary intention is shown.  As was said by Viscount Dilhorne in Floor v. Davis [1980] AC 695, at 708G :

“      It must be borne in mind that the Interpretation Act is to apply unless a contrary intention is shown.  It is not the case that an intention that the Act should apply has to be shown for it to apply.”

52.It is, however, the applicant’s case that, when the relevant provisions of the Rent Ordinance are considered in context, a contrary intention is shown.

53.In considering whether the applicants have demonstrated that a contrary intention is shown, I turn first to the Interpretation Ordinance itself.  In Sin Poh Amalgamated (HK) Ltd v. Attorney-General of Hong Kong [1965] 1 WLR 62, at 67, Lord Pearce, giving the judgment of the Privy Council, said the following :

“The Interpretation Ordinance was intended to avoid multiplicity of verbiage and to make the plural cover singular except in such cases as one finds in the context of the legislation reason to suppose that the legislature, if offered such amendment to the bill, would have rejected it.”

54.In the later Privy Council judgment of Blue Metal Industries Ltd v. R. W. Diley [1970] AC 827, Lord Morris, speaking of the New South Wales Interpretation Act, said that the provision that, unless the contrary intention appears, the singular shall include the plural and vice-versa, assists the legislature —

“… to avoid cumbersome and over-elaborate wording.  Prima facie it can be assumed that in the processes which lead to an enactment both draughtsman and legislators have such a provision in mind.  It follows that the mere fact that the reading of words in a section suggests an emphasis on singularity as opposed to plurality is not enough to exclude plurality.  Words in the singular will include the plural unless the contrary intention appears.  But in considering whether a contrary intention appears there need be no confinement of attention to any particular section of an Act.  It must be appropriate to consider the section in its setting in the legislation and furthermore to consider the substance and tenor of the legislation as a whole.”

55.Of importance in the present case, in my view, is the observation of Lord Morris in Blue Metal Industries – at 848D – that :

“The Interpretation Act is a drafting convenience.  It is not to be expected that it would be used so as to change the character of legislation.”

56.In determining whether a contrary intention appears in the Rent Ordinance, it is not disputed that the interpretative approach to be adopted is a purposive one.  As Li CJ observed in Town Planning Board v. Society for the Protection of the Harbour Ltd (2004) 7 HKCFAR 1 (at paras.28 and 29) :

“The interpretation of statutes is of course an essential part of the judicial function and is ultimately a matter for the courts.  In interpreting a statute, the function of the courts is to ascertain the intention of the legislature as expressed in the legislation.  The statute must be considered as a whole.  Any statutory provision must be understood in its context taken in its widest sense …

A purposive approach should be adopted.  In construing a statute, the courts should adopt an interpretation which is consistent with and gives effect to the legislative purpose.  An interpretation which is inconsistent with and does not serve that purpose should be avoided.”

57.The purposive approach, in my view, must encompass the general rule that, in the absence of indications to the contrary, the legislature must be presumed to have intended a ‘certain and predictable’ statutory scheme.  As Lord Steyn expressed it in R. v. Hammersmith and Fulham London Borough Council, ex parte Burkett [2002] 1 WLR 1593, at 1608G :

“… legal policy favours simplicity and certainty rather than complexity and uncertainty.  In the interpretation of legislation this factor is a commonplace consideration.  In choosing between competing constructions a court may presume, in the absence of contrary indications, that the legislature intended to legislate for a certain and predictable regime.  Much will depend on the context.”

58.With these principles in mind, I turn to the Rent Ordinance itself.

59.At the outset, it must be recognised that the fundamental purpose of the Ordinance, viewed in the widest sense, is the assessment and collection of revenue in the form of rent.  Even when a demand for rent is disputed, it is the general legislative intent that the rent in question must still flow without delay into the Government’s coffers.  The legislative scheme, as with other revenue – collecting statutes, is one of ‘pay now, litigate later’.  But that being said, the Ordinance recognises that there will no doubt be exceptions to the general rule and that provision should be made for the equitable disposal of those cases.

60.S.29(1) of the Rent Ordinance identifies the primary duty of the Commissioner while recognising, as I have said, that there may be occasions when the exercise of that primary duty should be subject to exceptions.  To cite it again, s.29(1) reads :

“A lessee, owner or occupier must pay Government rent as demanded despite any proposal, objection or appeal that has not been finalised unless the Commissioner orders that payment of the Government rent, or a part of the Government rent, be held over pending the determination of the appeal.”

61.It is the Commissioner who is given the sole discretion to determine when, in the infinite variety of cases that come before him, he should make an exception to the general rule.  The Ordinance does not set down any guidelines as to when and how he should exercise his discretion but it must be, I think, that the fundamental guideline is fairness.  If, having regard to the general purpose of the Ordinance; namely, the prompt collection of revenue, and all relevant circumstances, he considers it only fair to make an exception to the general rule then, in my judgment, it is the intention of the legislature that he should make a holding over order.  The Commissioner’s discretion is a broad one and it would, in my opinion, defeat the legislative intent to attempt to narrow that discretion by way of judicial gloss.

62.Mr Benjamin Yu SC, leading counsel for the Commissioner, submitted that, if the legislature has empowered the Commissioner, when he considers it justified, to make exceptions to the general rule of ‘pay now, litigate later; it follows, when the Ordinance as a whole is considered in context, that he must also be given the power to review the situation to see whether such exceptions remain justified and, if they do not, to withdraw holding over orders he has made.  There is nothing in the Rent Ordinance, he said, to indicate the contrary.

63.In my judgment, however, on a reading of the relevant provisions of the Rent Ordinance, the essential purpose of a holding over order is to enable an appellant to retain the disputed rental money, or any part of it, not simply for so long as the Commissioner considers the holding over order to be justified, but until the legal merits have been finally determined.  In this regard, as to when a holding over order will – in the ordinary course of events – expire, s.29(6) of the Rent Ordinance states :

“On the final determination of an appeal if any Government rent which has been held over becomes payable … the Commissioner is required to give to the person appealing a notice in writing fixing a date on or before which the Government rent must be paid.”  [my emphasis]

64.To ensure that, when the appeal process has finally been determined, any rent that is due will in fact be paid, s.29(2) and (3) of the Rent Ordinance gives to the Commissioner the power to require that security be provided.  The security may be in the form of a banker’s undertaking or such other form as the Commissioner specifies.  If a banker’s undertaking is required, s.29(3) directs in detail what the terms of that undertaking must be.  The Commissioner therefore has the comfort of being able to make any holding over order subject to suitable security.  In this manner, the legislature has given him the power to protect the eventual payment of rent found to be due.

65.In addition, the Commissioner is given the power to protect the integrity of what may be called the statutory dispute resolution process.  In this respect, if he forms the view that the appeal proceedings are being frustrated by an appellant engaging in unreasonable delaying tactics or if he forms the view that the outcome of the proceedings will likely be frustrated by the inability of an appellant to pay rent that is found to be due, he may cancel his holding over order.  In this regard, s.29(5) states :

“The Commissioner may cancel an order and make a fresh order where he is of the opinion either that the Government rent or any part held over is likely to become irrecoverable, or that the person appealing is unreasonably delaying his appeal.”

66.In my judgment, when the provisions of s.29 of the Rent Ordinance are viewed in context, they create a self-contained regime.  That regime emerges out of the provisions in the Ordinance for making proposals in respect of disputed rent, objecting to any rent demanded and for appealing issues of disputed rent to the Lands Tribunal and, if required, by way of further appeal, to the Court of Appeal and Court of Final Appeal.  The regime governs the manner in which the disputed rent itself, or any part of it, is to be dealt with pending determination of what I have described as the statutory dispute resolution process.  In summary, the regime is as follows :

(i)     The lodging of an appeal against an assessment does not permit an appellant to retain the disputed rent until the appeal process is concluded.  The rent must still be paid – the principle being one of ‘pay now, litigate later’ – unless the Commissioner, in the exercise of his discretion, taking all relevant circumstances into account, determines that the appellant should be permitted to retain the disputed rent, or any part of it : see. S.29(1).

(ii)     If the Commissioner makes a holding over order, that order will, in the ordinary course of events, endure until the final determination of the appeal process : see s.29(6).

(iii)     To ensure that rent retained by an appellant will be paid upon the final determination of the appeal process, the Commissioner is entitled to make any holding over order subject to the provision of suitable security : see s.29(2) and (3).

(iv)     The Commissioner may cancel a holding over order before the final determination of the appeal process in two specified circumstances.  First, if, in his opinion, the outcome of the appeal process is likely to be frustrated by the disputed rent becoming unrecoverable.  Second, if, in his opinion, the appeal process itself is being frustrated by an appellant unreasonably delaying its due prosecution.

67.The regime contained in s.29 is both certain and predictable.  An appellant who benefits from the making of a holding over order – made because fairness demands that it should be made – will know that, if he prosecutes his appeal with diligence and remains financially viable, the order will remain in force until the appeal process is complete.  If, however, pursuant to s.46 of the Interpretation Ordinance, the Commissioner is able at any time he thinks appropriate to amend, suspend or withdraw that order it would inject into the regime substantial elements of uncertainty.  That, in my opinion, could not have been the intention of the legislature.

68.I accept, of course, that the purpose of the Ordinance as a whole is to ensure the collection of rent.  But the legislative intent is clear that it must be rent that is lawfully assessed and lawfully payable.  That is why extensive provisions are placed in the Ordinance detailing the procedures to be adopted if the assessment of and/or demand for rent is disputed.  The regime contained in s.29 is integral to those provisions and, I believe, must be read in that context.

69.If, pursuant to s.46 of the Interpretation Ordinance, the Commissioner is permitted at any time he thinks appropriate to amend, suspend or withdraw his holding over orders it will, in my view, materially alter the character of the regime I have described.  One illustration of that change, I believe, is the fact that the provisions contained in s.29(5) will, for all practical purposes, be rendered otiose.  Why specify in that sub-section the limited circumstances in which the Commissioner may cancel a holding over order (and, if required, make a fresh order) when in any event he has a broad power under s.46 of the Interpretation Ordinance to withdraw a holding over order or to amend it when he believes the order as it stands is no longer justified?

70.In the course of his submissions, Mr Yu emphasised that s.29(5) does not provide that the Commissioner may ‘only’ cancel a holding over order if he is of the opinion that rent is likely to become irrecoverable or an appellant is unreasonably delaying his appeal.  If the word ‘only’ had been inserted that would no doubt have put the matter beyond doubt.  Its absence, however, is telling.  S.29(5), said Mr Yu, may well have been inserted ex abundanti cautela to highlight the concern of the legislature with regard to the need to ensure recovery of all money held over.  Seen in this light, he said, s.29(5) could not be read as a provision illustrating the legislative intent to exclude the general powers conferred by s.46 of the Interpretation Ordinance.

71.While I accept that the legislature may insert provisions into legislation out of a desire, motivated by an abundance of caution, to emphasise a central concern, I do not read s.29(5) as having been inserted for that reason.  Nor do I consider, when the relevant provisions are read as a whole, that the absence of the word ‘only’ is determinative.  In my judgment, as I have said earlier, the sub-section was inserted as one of the integral building blocks of a rational and fair regime to govern the manner in which disputed rent is to be dealt with pending finalisation of what I have called the statutory dispute resolution process.

72.A useful test, as Lord Pearce expressed it in Sin Poh Amalgamated (HK) Ltd v. Attorney-General of Hong Kong (supra, para.53) is to ask whether, in the context of the Rent Ordinance, there is reason to suppose that the legislature, if offered the power conferred by s.46 of the Interpretation Ordinance by way of an amendment, would have welcomed it or rejected it.  Mr Yu SC submitted that the legislature would have welcomed such an amendment.  I disagree.  It may be presumed, I think, that it would have given rise to considerable debate, one argument being that it would destroy the certainty and predictability of the regime contained in s.29 and may, even when the Commissioner acts in the best of faith for good cause, create an unfairness to appellants who would not know from day to day whether holding over orders issued in their favour would be amended, suspended or withdrawn.  

73.I would qualify this by saying that in an open and democratic society such as Hong Kong, where a statute confers on a public authority powers which may work to the detriment of members of the public – as to their liberty to do as they please, socially, commercially and financially – there is, in my judgment, a presumption that, within the constraints of the statute, the legislature intended that the public authority should act fairly towards those who may be affected by its decisions.  See, for example, R. v. Commission for Racial Equality, ex parte Hillingdon London Borough Council [1983] AC 779, per Lord Diplock at 787.

74.For the reasons given, bearing in mind that the Commissioner has the power to demand that any holding over order be subject to suitable security, I am satisfied that once, having granted an order, he may only set it aside before the conclusion of the statutory dispute resolution process on the grounds that the legislature saw fit to give him in s.29 of the Rent Ordinance.  He has no broader powers pursuant to s.46 of the Interpretation Ordinance.

75.During the course of submissions, it was suggested on behalf of the Commissioner that, if he was given no powers under s.46 of the Interpretation Ordinance, it would mean that he would not be able to grant a holding over order under s.29(1) unless an appeal had been made; in short, that no holding over order could be made if the statutory dispute resolution process had not been extended beyond the making of a proposal or lodging of an objection.  I do not read s.29(1), however, as imposing that limitation.  In my view, s.29(1) enables the Commissioner to grant a holding over order at any of the three stages of the statutory dispute resolution process, that order to endure until, if it proceeds that far, the final stage of the process – the appeal process – has been determined.  If the dispute is resolved at the earlier proposal or objection stage, either by agreement or by a lessee pursuing the matter no further, it must follow that the holding over order will expire.  It is an example of the greater being intended to include the lesser.  That, I think, is the plain and logical way of interpreting the provisions of s.29 in so far as they have created a dispute resolution mechanism.

76.It follows that, in my judgment, for the reasons I have given, the Commissioner acted ultra vires when he purported to withdraw the holding over orders previously granted by him on the grounds that the basis for making them, in his opinion, had ceased to exist. 

b.     The second ground of challenge

77.The second ground of challenge, in so far as it may be given a general description, is to the effect that the Commissioner, in exercising his powers under s.46 of the Interpretation Ordinance to withdraw the holding over orders, did so unreasonably; that is, outside of the parameters of discretion given to a reasonable decision maker appraised of the relevant facts.  This second ground only arises, of course, if I find that the Commissioner had the power to act pursuant to s.46.

78.As it is, I have come to the conclusion that he had no such power.  The second ground, therefore, falls away.  However, if I am wrong in holding that the Commissioner acted ultra vires, something – relatively briefly – must be said of the second ground.

79.The second ground arises out of statements made by the Commissioner in his letters of 31 January and 29 April 2005.  In the first of those letters he explained how he had come to the provisional view that there was no further justification for the holding over orders to remain in effect.  In the second (shorter) letter he confirmed his provisional view.

80.In the first letter, to cite it again, he said the following :

“… holding over orders were made in relation to Government Rent on development sites because I recognised that some rent payers were raising legal challenges such as the vires of the relevant Rent Regulations and their compliance with the Basic Law.  Although those points were not raised by all lessees of development sites, I thought it appropriate to take the same stance on the holding over of Government Rent for such lessees  Since then the legal challenges have all been rejected by the Court of Final Appeal and the Court upheld my responses to those challenges.  Consequently the grounds upon which the holding over orders were approved have ceased to exist.”

81.In his letter of 29 April 2005, notifying developers of his decision, the Commissioner said :

“(i)    The basis for making the holding over orders has ceased to exist; and

(ii)   There are no other circumstances sufficient to displace or rebut the principle in section 29(1) that Government Rent is payable notwithstanding an appeal against the rateable value in the Rent Roll.”

82.The core contention of the applicants was that, at that time, there was simply no rational basis upon which the Commissioner could come to the decision, expressed in his second letter, that ‘the basis for making the holding over orders has ceased to exist’.  This statement has been challenged on the following bases :

(i) there was no evidence upon which he could come to that conclusion and that it was an irrational conclusion;

(ii) in coming to the conclusion he took into account an irrelevant consideration; namely, his own (unsupported) opinion that the holding over orders could be withdrawn when the preliminary issues of law had been decided by the Court of Final Appeal, this too being an irrational conclusion.

83.As to general principle, it is for the applicants to demonstrate that the decision made by the Commissioner was one which, to employ the language of Sedley LJ in R. v. North East Devon Health Authority, ex parte Coughlan [2001] QB 213 (at 244D) simply defied comprehension or proceeded by materially flawed logic.

84.Whether the decision of the Commissioner was correct on the merits is not the issue.  As Lord Diplock expressed it in Secretary of State for Education and Science v. Tameside Metropolitan Borough Council [1997] AC 1014, at 1064 :

“The very concept of administrative discretion involves a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred.”

85.What must also be borne in mind is that mistakes of fact per se will not render a decision invalid.  As Lord Templeman expressed it in R. v. Independent Television Commission, ex parte TSW Broadcasting Ltd (26 March 1992, House of Lords) :

“The rules of natural justice do not render a decision invalid because the decision maker or his advisers makes a mistake of fact or a mistake of law.  Only if the reasons given … disclosed illegality, irrationality or procedural impropriety, then, in accordance with the speech of Lord Diplock in Council of Civil Service Unions v the Minister of Civil Service [1985] AC 374, and the judgment of Lord Greene MR in Associated Provincial Picturehouses Ltd v Wednesbury Corporation [1948] 1 KB 223, 228-229, could the decision be open to judicial review.”

86.At the outset, in my opinion, it must be emphasised that the words of the Commissioner are not to be judged in a vacuum but must be judged in context.  In short, the words must be judged in the context of the letters read as a whole.  Only in that way, I believe, can the true intent and purpose of the words be understood.

87.The Commissioner fulfils a role in public administration and his words are to be understood on that basis not on the basis that somehow they amount to legislative pronouncements.  As Laws J (as he then was) put it in R. v. Local Government Commission for England, ex parte North Yorkshire County (unreported, 11 March 1994), public authorities should be allowed to get on with their jobs ‘untrammelled by technicality and uninhibited by any excessive legalism’.

88.The question must therefore be asked : what, considered in the context I have described, did the Commissioner mean when he said that the basis for making the holding over orders had ceased to exist?  He clearly did not mean that that there were no issues left in contention.  Patently, there were a number of issues still very much in contention : hence the continuing litigation.  What a plain reading of his words was meant to convey was that, in his opinion, there was no longer any sufficient justification for continuing the holding over orders.  What had originally justified his decision to make the holding over orders had materially fallen away : not, of course, every last consideration but, to emphasise the point, the greater weight of the considerations which had resulted in his exercise of discretion.

89.In his letter of 31 January 2005, the Commissioner, to cite it again, said the following :

“Section 29(1) sets out a general legal principle that Government Rent must be paid notwithstanding any objection or appeal.  That principle is disapplied if I think that there are sufficient grounds for me to exercise my discretion to make a holding over order.  Where such an order is made and I am subsequently of the opinion that there cease to be sufficient grounds to justify continuing to hold over Government Rent, I am empowered … to withdraw the order …”  [my emphasis]

90.The Commissioner spoke there in plain terms of, first, a sufficiency of grounds to exercise his discretion to make the holding over orders and, second, of a lack of sufficiency of grounds when he conducted his review.

91.Reading the Commissioner’s two letters as a whole, it is apparent to me that the Commissioner – who was asserting the power to withdraw the holding over orders if he felt they were no longer justified – was saying no more than that the sufficiency of grounds which had existed before, and which had justified the decision to make the holding over orders, no longer existed; that now there were insufficient grounds.  To put it another way, if he had to make the decision again he would not, in the exercise of his discretion, find the same sufficiency of grounds entitling him to make the same decision.

92.Was he entitled on the evidence to conclude that there was no longer a sufficiency of grounds for the favourable exercise of his discretion?  Whatever the merits, and whether another decision maker would or would not have come to the same decision, I do not see how it can be said that there was no ‘evidence’ upon which he could come to the conclusion he did and from that I do not see how it can be said his decision was irrational.  The Commissioner stated in some detail what had drawn him to his decision.  First, all the preliminary points of law going to his power to assess an annual rent based on rateable value had been determined by the Court of Final Appeal in his favour.  Second, he was of the opinion – based on his experts’ reports – that he had a strong case in the ‘mode of valuation’ proceedings; a case, that is, that he believed would be successful.  As a litigant, the Commissioner was entitled to assess the merits of his own case.  As a public official, spending public funds on litigation, I believe he was obliged to do so.

93.It was never disputed that, in the original exercise of his discretion under s.29(1) to make a holding over order, the Commissioner was entitled to look at the strength of his case and to form a view as to that strength.  Indeed, in his memoranda of 28 and 29 July 1997 (cited in para.16 supra) the Commissioner gave as his principal reason for making the holding over orders his belief (i.e. his personal assessment) that there was doubt regarding ‘the rateability of land under development and the method of assessment’.

94.In the course of submissions, the Commissioner’s decision was criticised on the basis that, in relying on his own opinion, the Commissioner had taken an irrelevant consideration into account.  I do not agree.  The power conferred by s.46 of the Interpretation Ordinance was for the Commissioner to exercise.  As an administrative power, it was to be exercised when he believed it to be justified.  To be satisfied it was justified, he had to reach an opinion on the matter, that opinion at the end of the day, after taking such advice as he thought necessary, being his opinion.  Was his opinion arbitrary?  I can find no basis for such a conclusion.  Was it devoid of any rational foundation in fact or logic?  In my view, it was clearly not.

c.     The third ground of challenge

95.This ground is to the effect that, in reaching his decision to withdraw the holding over orders, the Commissioner failed to take into account a relevant consideration.  The relevant consideration was that the ‘mode of valuation’ litigation raised issues of novelty and complexity.  Further, and in the alternative, it is said that no reasonable Commissioner could have come to the conclusion that his method of valuation was ‘robust’. 

96.As with the second ground, this third ground only arises if I find that the Commissioner had the power to act pursuant to s.46 of the Interpretation Ordinance.  As I came to the contrary determination this ground too fell away.  But, for the reason given in respect of the second ground, something briefly must be said of my assessment of this challenge.

97.As to the relevant law, in Tesco Stores Ltd v. Secretary of State for the Environment [1995] 1 WLR 759, at 764G, Lord Keith said the following in respect of an assertion that the Secretary of State, in coming to a decision, had failed to have regard to a material consideration :

“It is for the courts, if the matter is brought before them, to decide what is a relevant consideration.  If the decision maker wrongly takes the view that some consideration is not relevant, and therefore has no regard to it, his decision cannot stand and he must be required to think again.  But it is entirely for the decision maker to attribute to the relevant considerations such weight as he thinks fit, and the courts will not interfere unless he has acted unreasonably in the Wednesbury sense (Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1948] 1 K.B. 223).”

98.Clearly, the novelty of the issues raised in the ‘mode of valuation’ litigation and its general complexity was a relevant consideration that had to be taken into account by the Commissioner.  In my judgment, however, it is clear that the Commissioner did take it into account as a relevant consideration.  The letter of 31 January 2005 makes this plain.  In this regard, I said the following in para.35 of this judgment (which I cite again for ease of reference) :

“As for the continuing appeal proceedings in respect of the ‘mode of valuation’, the Commissioner said that, in the light of his expert reports already lodged with the Lands Tribunal, he had conducted an extensive review and had concluded that the ‘Contractor’s Method’ adopted by him was soundly based and well supported by the ‘Receipts and Expenditure Method’, the back-up method he had chosen.  His expert reports, he said, provided ‘robust support’ for the rateable values he had given to the development sites.  The opposing expert report he said, had not undermined his opinion that the rateable values he had assessed were correct.  In short, it was the Commissioner’s assertion that, in respect of the ‘mode of valuation’ proceedings, he believed he had a strong case.”

99.Having considered the opposing expert report – apparently there was only one opposing report available at that time – I do not see how it can be said that the Commissioner failed to take into account the difficulties, novelties and complexities that would have been apparent from a comparative reading of both his reports and that of the opposing expert, a Mr George Doran.  What weight the Commissioner gave to the opposing report was a matter for him.

100.Apparently, the Commissioner was invited to wait for certain further reports from the developers’ experts before coming to a final decision.  I am told it was stressed to the Commissioner that it would be difficult for him to reach a balanced view until he had received and digested those further reports.  Waiting for the reports would not have caused a significant delay.  The Commissioner, however, decided not to wait.  His decision to withdraw the holding over orders was notified to the developers on 29 April 2005, the further reports becoming available about two weeks later on 13 May 2005.

101.It may have been wiser for the Commissioner to wait for the further reports.  Another Commissioner may have made the decision to wait.  But I do not see how it can be said that the decision by this Commissioner not to wait for the further reports, but to come to his decision on the basis of material then available to him, constituted, in the circumstances of this case, a failure to take into account a relevant consideration.  The Commissioner was not ignorant of the approach advocated by the developers.  In addition no doubt to the advice received from his counsel, both as to his case and how the opposing case was understood, he had the one opposing expert report available to him and had taken that into consideration.  The litigation had been on-going for a long period of time.  It was for the Commissioner to manage that litigation in order to discharge his statutory responsibilities as he saw best.  He was clearly confident on the basis of his own experts’ reports that his case was a strong one.  A decision maker cannot be compelled always to wait for further material that is promised him before coming to a decision.  If he was so compelled, it would endlessly draw out the decision making process.  Decisions of this kind must be considered in context.  In the present case, the Commissioner decided not to wait.  But, as I have said, there was material in the way of one opposing expert’s report before him when he made his decision and, whether the decision was wise or not, I do not see how it can be described as irrational.

102.This takes me to the second question; namely, was the decision by the Commissioner that his case was a ‘robust’ one (by which I take him to mean sufficiently strong and vigorous to carry the day) a decision that simply defies comprehension?

103.The Commissioner came to that view on the basis of carefully prepared legal advice.  He came to that view having considered his own experts’ reports and one opposing report.  On that basis, how can it be said that no reasonable Commissioner could have adopted his confident prognosis?  Clearly matters were complex and novel and clearly there were opposing views of substance.  But I do not see how that can prevent the Commissioner, on the basis of professional advice received, being confident that his approach was nevertheless the correct approach.  Litigants – both private and public – must make such difficult decisions in the great majority of court proceedings.  They may prove to be erroneous decisions.  But that is not to the point.  Equally the applicants may have felt strongly that the Commissioner was ill-advised to reject their case.  But that too, with respect, is not to the point.  The wisdom of the decision is not a matter for this court, not if it falls within the parameters of discretion available to a reasonable decision maker. 

d.     The fourth ground of challenge

104.As with grounds two and three, this ground only arises if I find that the Commissioner had the power to act pursuant to s.46 of the Interpretation Ordinance.

105.This fourth ground of challenge is predicated on the basis that, in writing to applicants to inform them that he had agreed to their holding over applications, the Commissioner expressed himself in unequivocal language as to the conditions to which his orders would be subject and, in so doing, created a legitimate expectation that he would act only in terms of those conditions.

106.In informing applicants that he had agreed to make holding over orders, the Commissioner, for the most part, used a standard form letter to the following effect :

“		I hereby issue an order under Section 29(1) of the Government Rent (Assessment and Collection) Ordinance (the Ordinance) to hold over the payment of Government rent in respect of the above property pending the determination of the appeal, subject to the following conditions :
	(i)	An undertaking by … to pay an amount equal to the Government rent the payment of which is held over in respect of the Property.  Such undertakings shall be given to me within 14 days of this letter.
	(ii)	I may cancel this order if I consider either that the Government rent or part thereof held over is likely to become irrecoverable, or that your client is unreasonably delaying his appeal; and
	(iii)	Upon cancellation of the order under (ii), all outstanding Government rent shall be paid within 14 days of the date of the cancellation of the order.

On the final determination of the appeal, I will issue a notice pursuant to section 29(6) of the Ordinance and all outstanding Government rent shall be paid within 14 days from the said notice.”  [my emphasis]

107.It is the words which I have emphasised, read in context, which are said to have created the legitimate expectation; namely, that the Commissioner would not exercise any power vested in him to set aside the holding over orders other than those powers incorporated into his letter.

108.It is, I think, important to recognise that the doctrine of legitimate expectation arose out of the need to ensure that public authorities acted fairly, that, having given unequivocal undertakings, public authorities could not thereafter act, without legitimate reason, in defiance of them.  However, not all representations, undertakings or consistent courses of conduct create obligations which bind public officials to future conduct.  It is in every case a question of fact.

109.In the present case, when the Commissioner informed applicants that he was prepared to make holding over orders, he stated that he did so “under s.29(1)”.  When he said that the orders were made “pending determination of the appeal”, this phrase was drawn directly from the same subsection which, to cite it again, reads :

“A lessee, owner or occupier must pay Government rent as demanded despite any proposal, objection or appeal that has not been finalised unless the Commissioner orders that payment of the Government rent, or a part of the Government rent, be held over pending the determination of the appeal.”  [my emphasis]

110.When the Commissioner spoke of “the final determination of the appeal”, this language too was drawn directly s.29; namely, from s.29(6) which, to cite it again, begins :

“On the final determination of an appeal if any Government rent which has been held over becomes payable …”  [my emphasis]

111.Even the conditions laid down by the Commissioner were drawn directly from s.29.

112.All of this, in my view, would have been known, or should reasonably have been know, to the applicants who had the benefit of legal representation or access to legal advice.

113.In the circumstances, it seems to me that the Commissioner was doing no more than ensuring his holding over orders complied with the requirements of s.29 and were couched in language consistent with that section.  As such, certainly in respect of their duration, the Commissioner’s orders were stated to be, and must have been taken to be, no more than orders issued under and in accordance with s.29.  They were not intended to create, nor did they create, some representation independent of and in addition to the provisions of s.29. 

114.In my opinion, a legitimate expectation may well have been created by the Commissioner when, for example, he laid down details of what security he required from each applicant.  In that instance, of course, the Commissioner laid down administrative conditions created by himself under his statutory powers.  In respect of the duration of his orders, however, he did no more than confirm that such duration was to be governed by the terms of the Ordinance.  That, in my judgment, did not create a legitimate expectation of the kind advocated. 

115.It must be remembered that day by day, pursuant to all manner of statutory and regulatory provisions, public officials grant permissions, make orders and issue licences.  Often, to assist the public – as in the present case – they incorporate into their written notifications the statutory or regulatory provisions under which they have acted.  That is done for purposes of good administration, simply to remind those to whom the notifications are addressed – often lay persons – of the relevant legal provisions under which the permission, order or licence is made.  The Commissioner’s letters, in my judgment, fell into this common category.

e.     The fifth ground of challenge

116.This ground was advanced on behalf of the applicants in the ‘Super Lion’ application only.  It seeks to challenge the Commissioner’s second reason for withdrawing his holding over orders, a distinct and separate reason from the one founded on any assertion of power under the Interpretation Ordinance.  In his letters of 31 January and 29 April 2005, the Commissioner said that, in his opinion, the ‘mode of valuation’ appeal was being conducted in a manner which amounted to an abuse of process.  That abuse of process, he said, had resulted in what he considered to be an unreasonable delay in the prosecution of the appeal and gave him the power under s.29(5) of the Rent Ordinance to withdraw his holding over orders.

117.It is to be remembered that the ‘mode of valuation’ appeal, by agreement, took the form of a single representative appeal, an appeal by Best Origin Limited.  The appeals of all other appellants – who, as I have said earlier – were represented by the same firm of solicitors, Woo, Kwan, Lee & Lo – were stayed pending the determination of this one appeal, it being anticipated that the final determination of this representative case would create a mechanism for resolving all the cases.

118.The applicants have not disputed that the Commissioner has the power under s.29(5) of the Rent Ordinance to cancel a holding over order if there is unreasonable delay on the part of an appellant.  What is challenged is the manner in which the Commissioner exercised that power.  The Commissioner, it is said, exercised his power under s.29(5) in a manner that fell outside of the parameters of discretion open to a reasonable decision maker.  He did so in two ways :

(i) his conclusion that Best Origin Limited was unreasonably delaying its appeal was a conclusion that no reasonable Commissioner could have reached;

(ii) even if that conclusion was held to be reasonable, no reasonable Commissioner could have concluded that all the other applicants represented by the same firm of solicitors (whose appeals had been stayed by consent pending the determination of the Best Origin appeal) were themselves guilty of unreasonable delay.

119.The power given to the Commissioner to cancel a holding over order on the grounds of unreasonable delay is conferred directly by s.29(5).  That power is expressed in the following terms; namely, that the Commissioner may cancel an order “where he is of the opinion” that a person appealing is “unreasonably delaying his appeal”.

120.The wording of s.29(5) is not, as it could have been, couched in terms that set a classic objective test for the lawful exercise of the Commissioner’s powers.  The wording is not, for example, to the effect that, if the Commissioner has ‘reasonable cause to believe’ that there has been unwarranted delay, he may act.  If that was the wording, it would mean, as Lord Diplock expressed it in R. v. Inland Revenue Commission, ex parte Rossminster [1980] AC 952 at 1011C, that the Commissioner could only act on grounds sufficient to induce in a reasonable person the required belief.  The wording of s.29(5) specifically avoids what I have described as the classic objective test.  Instead it leaves the matter to the opinion of the Commissioner.  If the Commissioner himself is of the opinion that he has reasonable grounds for his belief then he may act.

121.It was conceded on behalf of the ‘Super Lion’ applicants that the intention of the legislature is clear; namely, that the Commissioner is himself empowered to judge the conduct of the appellant and, as it was argued, to ‘impose a penalty’ if he thinks that the appellant is responsible for the delay.  It was submitted, however, at least as I understood it, that the Commissioner’s decision must always be judged objectively and not subjectively through the eyes of the Commissioner, this despite the clear language of the sub-section.  In the result, while it was conceded that it is not the function of this court to determine the merits of the Commissioner’s decision, or even to express a view about the merits, nevertheless the court must judge, on an objective basis, whether the Commissioner was justified in coming to the decision he did.

122.In my judgment, however, I do not see how this court can effectively ignore the intention of the legislature.  In taking into account the legislative intent, I bear in mind the strategic purpose of the Rent Ordinance as a whole; namely, the collection of revenue.  I also bear in mind that, the legislature, having left it to the Commissioner himself to decide when to make holding over orders, it does not contradict the intent and purpose of the sub-section to leave it to him also to decide when, within the restrictions of s.29(5), it is appropriate to cancel them.  In complex litigation there may, as often as not, be divided opinions, all reasonably held, between what amounts to delay and what does not.  The present case is an example.  The legislature has therefore directed that the judge of the matter is to be the Commissioner. 

123.During the course of submissions, counsel for the applicants placed reliance on R. v. Inland Revenue Commissioner, ex parte Rossminster (supra).  But the statutory provisions under consideration in that case were not the same as those contained in s.29(5) and, as the House of Lords held, those provisions laid down a purely objective test.  In addition, in Rossminster two competing public interests of importance were at issue; first, that offences involving tax fraud should be detected and, second, that the right of the individual to the protection of the law from unjustified interference with private property should be upheld.  I find no such competing public interests in the present case.  The underlying scheme of the Rent Ordinance is that rent is to be paid even if it is disputed.  The Commissioner may, however, make an exception if he thinks it appropriate and hold over payment.  Equally, he may cancel any such order if, within the constraints of s.29(5), he thinks he has good cause to do so.  If he does so then no more than the status quo ante is restored.  Boiled down to its essence, the issue really is who has the benefit of the disputed rent pending a resolution of the court proceedings.  The intention is that – in the public interest – the Commissioner should have the benefit unless he considers it appropriate to make an exception to the rule.  If the result of the court proceedings favours the appellant, the capital is returned.  If it favours the Commissioner, he retains the capital.  The right of the appellant to proceed with his appeal is not impeded.  The Ordinance, it is agreed, makes no provision for payment of interest.  Any loss therefore is restricted to a loss of interest or an inability to utilise the capital for a period of time.

124.None of this means, of course, that the Commissioner may act without restraint.  He must act in good faith.  Any opinion that he forms must be an honest opinion.  Nor may he act arbitrarily; in short, he may not come to any judgment that was not reasonably open to him.

125.That being said, a court will not interfere with the exercise of his judgment except in a clear case.  What must be understood, especially in this present case, is that, as Lord Russell put it in Secretary of State for Education and Science v. Tameside Metropolitan Borough Council [1977] AC 1014, at 1074H, two reasonable persons can perfectly reasonably come to opposite conclusions on the same set of facts; not every reasonable exercise of judgment is right and not every mistaken one is unreasonable.  In the present case, therefore, it is for the applicants to show that the Director’s exercise of judgment was not simply the less reasonable option, one with which – perhaps on good grounds – they strongly disagree, but was an exercise of judgment which no reasonable authority in his place could have reached.  The threshold is a high one.  As Litton PJ expressed it in Lau Kong Yung v. Director of Immigration (1999) 2 HKCFAR 300, at 334G, where a department head of government is entrusted by the legislature with administrative responsibilities, it is not for the courts to say how those responsibilities should be discharged.

126.To understand the factual context in which the challenge is both made and answered, the history of the matter must be considered.

127.It was in February 2004 that the Department of Justice, acting for the Commissioner, first touched on the issue of whether Best Origin, in its appeal, was seeking to re-argue matters that had already been argued unsuccessfully before the Court of Final Appeal in Agrila or, alternatively, should have been argued as preliminary points of law.  By 1 April 2004, however, the concern had been transformed into a direct assertion of abuse of process.  In a letter to Best Origin’s solicitors, the Department of Justice said :

“We have considered the legal advice as to the proper interpretation of the CFA Judgment given by your Counsel to [your expert].  We note that the essence of that advice is that in the valuation exercise, development potential is to be disregarded.  We note that whether development potential could/should be taken into account in the determination of Government Rent of development sites was one of the main issues before the CFA … and this issue had been decided by the CFA in the Commissioner’s favour.  To argue that point (or something similar) again in these proceedings would be an abuse of process.”  [my emphasis]

128.Further reasons why it was said that the appeal was based on matters constituting an abuse of process were referred to in the letter.

129.Best Origin’s solicitors, Woo, Kwan, Lee & Lo, rejected any suggestion of abuse of process.  In a letter dated 4 June 2004, they said :

“… we do not agree with you that there is any abuse of process issue arising from [our expert’s] report as alleged by you.  So far, you have not been precise of [sic] your arguments and the contents of your application on ‘the abuse of process issue’.  We therefore reserve our position until you have made yourselves clear.

The present view of our leading counsel is that the procedure suggested by you regarding ‘the abuse of process issue’ would be inappropriate.  Either you have a clear cut point of law which could, and perhaps should, be determined as a preliminary point of law thereby potentially saving preparation costs as well as hearing costs, or (more likely) your point is closely bound up with the valuation issues and should not be considered separately from the valuation evidence.”  [my emphasis]

130.Earlier in the year, the Commissioner had sought an opinion on the abuse of process issue.  That opinion had been given by Mr David Holgate QC in March 2004.  It concluded :

“When the Court of Final Appeal’s judgment is read in order to see how the issues raised by the parties were in fact determined, it is clear that all of the points [of Best Origin] were disposed of by the Court of Final Appeal in the Commissioner’s favour.  Accordingly, applying the principles relating to issue estoppel or abuse of process, the Appellant is not entitled to reargue such points.  In any event, even if the Appellant were to seek to draw fine distinctions between its present legal case and the one advanced before the Court of Final Appeal the short answer is that the Appellant’s case ought to have been more fully argued before that Court.  Either way the legal arguments now being put forward by the Appellant amount to an abuse of process.”

131.It is not for this court to determine the merits of the Commissioner’s exercise of judgment.  No purpose is served therefore in considering the merits of Mr Holgate’s opinion.  It is sufficient to say that, coming from a senior practitioner, it was a document deserving of respect and upon which, in my view, the Commissioner was manifestly entitled to place reliance.

132.On 13 July 2004, Mr Holgate’s opinion was forwarded to Woo, Kwan, Lee & Lo for information and reaction.  By that time therefore those prosecuting the Best Origin appeal would have understood – in some detail – the basis in law upon which the Commissioner asserted abuse of process.

133.In early August 2004, there was a direction’s hearing before the Lands Tribunal.  At that hearing, counsel for Best Origin said that expert reports were still being prepared for purposes of rebutting the Commissioner’s case.

134.At about this time, a principal concern of the parties concerned how procedurally the merits of the abuse of process issue should best be determined.  Should they be determined in a preliminary hearing or as a preliminary point at the beginning of the substantive hearing or, as Woo, Kwan, Lee & Lo advocated, simply as one of many points that would arise during the course of the substantive hearing?  As to the last option, in a letter dated 27 October 2004, Woo, Kwan, Lee & Lo said :

“… this issue is inextricably bound with both the legal and valuation issues to be heard during the substantive hearing of the captioned appeal and hence should not be heard separately at the beginning of the substantive hearing.”

135.In a letter dated 20 November 2004, the Department of justice accused Best Origin’s legal advisers of failing to take into account the full scope of the Commissioner’s analysis of the abuse of process issue.  In the same letter, the protest was made that the abuse issue could not simply be subsumed into the general issues to be determined by the Lands Tribunal.

136.In the same letter, the Department of Justice requested the following information :

“	(a)	Whether or not you agree that the points raised in your counsel’s legal advice attached to [your expert’s] report … amount to a repetition of the points raised in the Court of Final Appeal which have been identified in … our counsel’s opinion;
	(b)	If you do not agree, please state for each such point what your reasons are;
	(c)	If you say the points are different, please explain the differences;
	(d)	If you agree, do you accept that raising the points again is an abuse of the process of the court, if not, why not;
	(e)	By relying on the English Court of Appeal decision in Scottish & Newcastle, you appear to be ignoring the Hong Kong Court of Appeal’s decision in Lai Kit Lau which is binding on the Lands Tribunal.  As we have explained, you had the opportunity to, but did not, argue before the Court of Final Appeal that Lai Kit Lau was wrongly decided.  Do you agree that your now relying on the said decision in Scottish & Newcastle is an abuse of the process of the court?  If not, what is your explanation?”

137.Woo, Kwan, Lee & Lo responded by letter dated 2 December 2004 to the following effect :

“We do not intend to debate in correspondence at this stage the merits of your arguments.  While we are grateful to you for giving us notice of the points you intend to take, your offer contained in your letter of 4^th June to provide a copy of the Opinion of Mr Holgate was conditional upon receiving confirmation from us that the evidence we were preparing included alternative valuations assuming that the Commissioner’s basis is held to be correct.  We provided that confirmation and you sent the copy Opinion.  You did not seek any undertaking that we would obtain and copy to you a written Opinion in response.  Suffice it to say that our Counsel’s legal advice was intended to be, and we believe that it is, consistent with the decision of the Court of Final Appeal.

…

While we acknowledge of course that your client is entitled to have his ‘abuse of process’ issue determined, in a case such as this where there are many complex and interrelated issues and where the so-called ‘abuse’ points, if determined against our clients, would not dispose of the appeal, we are not aware of any right for a party raising such an issue necessarily to have it determined before any other issue in the case.  In our view, the only question at this stage is : having regard to all the issues and circumstances, what is the most appropriate procedure for consideration of your ‘abuse of process’ issue in the Lands Tribunal?”

138.The Commissioner, it appears, read this response as amounting to a refusal to deal with the issue directly in any substantive way despite the fact that the issue had been raised several months earlier.  In his second affirmation, Mr Siu Kuen Sang, an Assistant Commissioner, speaking on behalf of the Commissioner, said the following :

“Thus, according to Woo, Kwan, Lee & Lo, the Commissioner was not entitled to a response to Mr. Holgate, Q.C.’s opinion because the Commissioner had not sought from them an undertaking that a response would be given.  They made it clear that they would stay put in refusing to deal with the issue directly and would merely talk about the procedure for dealing with this issue.

By this time, eight months had elapsed since DoJ had first raised the abuse of process issue and Best Origin was still refusing to provide a direct response to our arguments apart from bald statements that they disagreed with our assertion.”

139.By letter dated 4 February 2005, the Department of Justice echoed Mr Siu’s concerns :

“Despite repeated requests from us, you have simply repeated your bald response that the allegations are denied without any reasoning or detailed response to each of the points made by us.  Until you do so, we do not see why the Tribunal should accept that the arguments on abuse of process are inextricably bound up with or overlap legitimate legal arguments on the valuation dispute, or that no saving in time would be involved in having the abuse of process issue resolved first.”

140.An additional concern of the Commissioner apparently was that the legal representatives of Best Origin were not prepared to agree a procedure for the resolution of the abuse issue which in all the circumstances would allow the matter to be determined with the minimum delay. 

141.In addition, according to Mr Siu, the Commissioner was concerned that time was being wasted in the preparation of further expert reports to support Best Origin in its appeal.  In this regard, Mr Siu said the following in his affirmation :

“The Commissioner fully recognized the need to allow sufficient time for the preparation of rebuttal reports due to the complexity of the issues involved.  However, the fact was that time had already been wasted by Best Origin preparing a report for exchange in December 2003 on an incorrect legal basis.  If that had not been done, the time now required for preparing the rebuttal reports would have been a lot shorter.  Moreover, judging from the fact that by August 2004 Best Origin was still in the process of identifying suitable experts, there was a high probability that Best Origin would seek an extension of time for exchange of rebuttal reports.  Indeed, as feared, Best Origin did subsequently ask for an extension.”

142.For purposes of cross reference, I have already cited the Commissioner’s stated views, albeit provisional at that time, which appeared in his letter of 31 January 2005 : see paras.40 and 41.

143.In summary, as I have understood it, the Commissioner was concerned that the Best Origin appeal was based upon a legal foundation which itself constituted an abuse of process.  Dealing with that issue alone would extend the litigation.  To compound the matter, as the Commissioner saw it, there was a refusal on the part of those representing Best Origin to provide a direct response to his assertions of abuse, this despite the fact that an opinion from senior counsel obtained by the Commissioner had been given to those representatives.  The matter, in the Commissioner’s eyes, was further compounded by a refusal on the part of Best Origin’s representatives to agree a procedure that was in the circumstances the most effective and expeditious.  To this had to be added his concern that the preparation of expert rebuttal reports on behalf of Best Origin was taking far longer than it should.  As Mr Siu expressed in his second affirmation : “Put together, the foregoing matters … caused the Commissioner to form the view that Best Origin was unreasonably delaying the appeal.”

144.During the course of submissions, counsel for the applicants laid much stress on the contention that, in light of Henderson v. Henderson (1843) 3 Hare 100 and the observations of Lord Bingham in Johnson v. Gore Wood & Co. [2002] 2 AC 1, it is evident that there was simply no substance in the Commissioner’s assertions.  As it was put in counsel’s skeleton argument : “Best Origin will contend in the Lands Tribunal, first, that the rules relating to res judicata do not apply at all.  However, even if, contrary to such contentions, the Lands Tribunal in due course holds that the legal points in question could or should have been raised in the Court of Final Appeal, Best Origin will contend that, in the light of the remarks of Lord Bingham, Best Origin should not be prevented from continuing to advance and rely upon the legal points alleged to be an ‘abuse of process’.”

145.Those arguments may find favour with the Lands Tribunal.  On the other hand they may be rejected.  But to effectively determine the issue (by determining whether, in the face of such matters, the Commissioner was objectively justified in adopting the stance he did) will, it seems to me, in the context of s.29(5) as I have found it must be construed, result in a consideration of the merits.

146.In the context of complex, on-going litigation – hard fought on almost every issue – it could not have been an easy decision for the Commissioner to make.  But, as I have said earlier, in my judgment the legislature vested in him, and him alone, the discretion to determine whether – in his opinion – there was unreasonable delay.  The Commissioner, of course, had to exercise his discretion in a rational manner in determining whether there had been (and/or continued to be) a delay that was unreasonable.  On behalf of the applicants it was said that there simply could not have been any rational basis for deciding that any delay occasioned by Best Origin – if there was delay at all – was unreasonable.  Three factors were raised by counsel :

a. First, a development site had never before been valued for rating purposes or for the Government rent purposes.

b. Second, the Court of Final Appeal had decided that, in assessing the rateable value of a development site, the established rules of rating law, and in particular sections 7 and 7A of the Rating Ordinance and the common law ‘rebus sic stantibus’ rule apply.

c. Third, following the decision of the Court of Final Appeal, Best Origin had sought advice from independent leading counsel in London and junior counsel in Hong Kong who both specialised in rating in order to provide guidelines as to how a valuer should go about valuing this type of tenement which has never previously had to be assessed for rating.  That advice has then been transparently revealed by being annexed to the expert’s report.  To obtain advice from counsel experienced in the field and then to follow that advice could not be unreasonable.

147.In my judgment, however, these were all factors which would have been well understood by the Commissioner.  But, judged objectively, novelty or complexity per se and the employment of expert counsel per se does not mean that litigation will inevitably be conducted in a manner that avoids unreasonable delay.  I have not read the Commissioner as saying that Best Origin’s legal representatives acted in bad faith.  It seems to me that the points raised on behalf of the applicants – going both to whether there were grounds for asserting abuse and how best procedurally to resolve them – go to the merits of Commissioner’s decision.

148.What cannot be ignored, I think, is that the Commissioner did not reach his decision without expert advice.  He had the opinion of senior counsel and the advice of counsel in the Department of Justice.  The Commissioner would well have understood the profundity of an allegation of an abuse of process, even if it did not involve findings of bad faith.  Nor can it be said that the Commissioner acted precipitously.  There was protracted correspondence over several months.  Reasons why the Commissioner reached the view he did were given.  The Commissioner sought direct engagement on the issue of abuse with Best Origin’s counsel.

149.Even if, within the context of this difficult litigation, another Commissioner may have reached a different decision, I do not think it can be said that this Commissioner’s decision was coloured by caprice or arbitrariness; in short, that it was perverse.  His decision may in due course prove to be wrong.  But that is not the point.  To repeat, not every reasonable exercise of judgment is right.

150.In my view, therefore, it has not been demonstrated that the Commissioner acted unreasonably in cancelling the holding over order of Best Origin.  I am satisfied he acted within his powers.

151.But did he act within his powers in cancelling the holding over orders granted to all those other applicants represented by Woo, Kwan, Lee & Lo whose appeals had been stayed by consent pending determination of the Best Origin appeal? 

152.For the applicants, it was submitted that, despite the fact that there was clearly a distinction, the Commissioner had failed to make any distinction between Best Origin and all the other appellants whose appeals had been stayed by consent.  As I understood it, the assertion was that, for the supposed sins of Best Origin, all the appellants were held liable, an arbitrary basis for proceeding against those other appellants.

153.At first blush, it appears to be a forceful contention.  S.29(5) imposes on the Commissioner the obligation to consider the position of every individual appellant.  But that being said, all of the applicants were represented by the same firm of solicitors and all would have understood that the success or lack of success of the Best Origin appeal would have direct consequences for them.  They would therefore have had a direct and continuing interest in the manner in which Best Origin was mounting its appeal, certainly as to the arguments mounted.

154.It is true that, prior to the Commissioner’s letter of 31 January 2005, there had been no indication that he considered that all the appellants represented by Woo, Kwan, Lee & Lo were equally liable for the alleged delay.  But with the letter of 31 January 2005 there would have been little room for ambiguity.  However, as Mr Yu, for the Commissioner, pointed out, in the reply from Woo, Kwan, Lee & Lo of 15 February 2005, no effort was made to distinguish between Best Origin and the other appellants.  Further, as Mr Yu put it, “notwithstanding that the applicants were on notice of the fact that the Commissioner was concerned that Best Origin was unreasonably delaying its appeal (and that the slow progress was a reason for cancelling the holding over orders), no attempt was made by any of the applicants to independently progress their appeals.”

155.In his letter of 31 January 2005, the Commissioner said :

“I have formed the provisional view that Best Origin has been and is unreasonably delaying its appeal and that the same applies to those parties associated with Best Origin or represented by you, or to those parties who have been content for their appeal to be adjourned to await the outcome of the Best Origin appeal. … I am therefore giving you this opportunity to make any representations … within 21 days from the date of today’s letter.”  [my emphasis]

156.In its reply of 15 February 2005, Woo, Kwan, Lee & Lo set out various contentions which, on my reading, spoke not only of the case of Best Origin but of the potential cases of the other appellants too.  The letter concluded :

“In the light of the above, it is our view that none of the grounds for withdrawing the holding over orders which you have set out in your letter of 31^st January are sound. … Further, our clients have been led to believe that they would not be required to pay Government Rent until the appeals had been determined and it would be very unfair to withdraw the holding over order at this stage.”

157.Woo, Kwan, Lee & Lo was there speaking for all its clients, the view being a unanimous one.

158.Was it, in such circumstances, Wednesbury unreasonable for the Commissioner to conclude that the representative appeal of Best Origin was, for all practical purposes, the appeal of all the appellants represented by the one firm of solicitors, all of whom effectively stood together in the advance of the one case?  While it was a decision open to debate, I do not see how it can be condemned as being unreasonable on any of the grounds advocated.

Conclusion in respect of the ‘Super Lion’ and ‘Turbo’ applications

159.For the reasons given, my conclusion are :

(a) On the basis that the Commissioner acted lawfully in cancelling the holding over orders of the applicants in the ‘Super Lion’ application, all of those applications must be dismissed.

(b) The Commissioner, however, did not seek to cancel the holding over order granted to Turbo Top pursuant to s.29(5) of the Rent Ordinance, restricting his exercise of power to his purported power to withdraw the holding over order pursuant to section 46 of the Interpretation Ordinance.  Accordingly, the application by Turbo Top must be allowed to the extent that there will be an order of certiorari to quash the decision of the Commissioner withdrawing the holding over order.

The ‘Beachshore’ application

160.While the ‘Super Lion’ and ‘Turbo Top’ applications concerned the decision of the Commissioner to withdraw and/or cancel holding over orders made by him, this application concerned various decisions made by the Commissioner after 29 April 2005 to refuse to grant further orders.  Mr Root, as leading counsel, advanced two grounds of challenge.  However, before looking to those grounds, some background must be given.

161.By letter dated 6 May 2005, written just a week or so after he had withdrawn all existing holding over orders, the Commissioner refused an application for a holding over order pursuant to s.29(1) of the Rent Ordinance sought by Woo, Kwan, Lee & Lo on behalf of an appellant, Apex Speed Limited.  That letter was to the following effect :

“I have recently reviewed the justifications for holding over of Government rent for development sites and come to the conclusion that such justifications have ceased to exist.  In other words, there are now in my opinion insufficient grounds for me to disapply, for development sites, the general legal principle under section 29(1) that Government rent must be paid notwithstanding any outstanding objection or appeal.  Accordingly, I have decided to withdraw all existing holding over orders.

As regards the captioned development site, I have fully considered the grounds that you set out in your application and have concluded that they are insufficient to justify the disapplication of the aforesaid legal principle.  I regret therefore that I cannot accede to your request.”

162.The exact same wording was used in other letters of refusal issued at and about that time.

163.A month later, by letter dated 6 June 2005, Woo, Kwan, Lee & Lo sought a holding over order for two appellants who leased a development site, Beachshore Limited and Kuen Kwong Limited.  It did so on the following grounds :

“According to the Court of Final Appeal’s Judgment delivered on 6^th March 2001, although it was held that development sites are rateable for Government rent purpose, the Court of Final Appeal expressly left the question of valuation of the rateable value for determination by the Lands Tribunal.  As such, the valuation basis for development site is yet to be decided by the Lands Tribunal.

The Court of Final Appeal confirmed that sections 7 and 7A of the Rating Ordinance shall be the basis for assessment of rateable value of Government rent purpose.  It is our client’s contention that your assessment of the rateable value based on a fixed percentage of the capital value of vacant land is contrary to the said sections 7 and 7A and therefore grossly wrong.

On matters of valuation and its principle, the said Judgment of the Court of Final Appeal is not clear.  These matters are extremely complex and need to be clarified in future proceedings.”

164.The Commissioner refused the application, his letter of 16 June 2005 being to the following effect :

“Your application for holding over of the payment of Government rent of the subject assessment has been fully considered.  I am of the opinion that the grounds set out in your application are insufficient to justify holding over of the payment of Government rent under section 29(1) of the Government Rent (Assessment and Collection) Ordinance.  I regret therefore that I cannot accede to your request.”

165.By letter dated 27 June 2005, Woo, Kwan, Lee & Lo sought to discover whether the Commissioner’s refusal was for the same reasons given in his letter(s) of 6 May 2005.  The Commissioner replied by letter dated 13 July 2005 as follows :

“As my letter of 16 June made clear the merits of your application dated 6 June have been considered on the individual circumstances of the case including the points that you put forward.  The reasons I gave in my letter of 16 June are perfectly clear, in particular the grounds you put forward for a holding over order have been judged by me to be insufficient.  You do not appear to challenge that view or the adequacy of my reasons for the purposes of dealing with your application.”

166.As to the sufficiency of the grounds, the Commissioner observed that :

“The mere facts that the valuation basis is to be determined by the Lands Tribunal and that the valuation is complex do not of themselves justify the making of a holding over order.  These issues are not peculiar to appeals on development sites.”

167.The Commissioner accepted, however, that, in reaching his decision to refuse the application, he had had regard to his reasons for withdrawing existing holding over orders.  His letters of 29 April 2005, he said —

“… made it perfectly clear that I had had regard to the arguments which were common to all or several rent payers and also to those matters which arose in individual cases.  I have continued to take into account all material considerations in that same way when assessing any new applications for holding over orders on development sites.  The letter of 6 May, in particular the second paragraph is clearly meant to be read in the context of those letters of 29^th April and therefore in the way that I have just reiterated.  On that basis that additional reasoning was something that I had in mind when considering the application of 6 June.  As a matter of common sense it would have been difficult to ignore the background to the more recent applications.”

168.I confess to finding the reasoning of the Commissioner to be somewhat opaque.  As best as I have been able to read it, however, the Commissioner accepted that his decision to refuse the application for a holding over order had, of course, taken into account his earlier review of the justification generally for granting holding over orders but, as with all applications, had also taken into account all material considerations of general and/or individual relevance.

a.      The first ground of challenge

169.Mr Root, for the applicants, submitted that it was apparent that the Commissioner, in coming to his decisions not to grant further holding over orders, was influenced by his earlier decision to withdraw (as opposed to cancel) existing orders : hence the Commissioner’s reference to the fact that his letter of 6 May 2005 was ‘clearly meant to be read in the context’ of his letters of 29 April 2005.  If, however, his earlier decision to withdraw the existing holding over orders was wrong in law, said Mr Root, it followed that the Commissioner, in deciding not to issue further orders, had taken an irrelevant (or plainly wrong) consideration into account.

170.In conceptual terms, I accept the logic of that submission.  It does, however, beg the question of the manner in which the Commissioner had been influenced by his earlier decision to withdraw existing orders.  As I see it, the Commissioner’s decision to withdraw existing holding over orders had been based, first, on the fact that his statutory powers had been confirmed by the Court of Final Appeal and, second, on his conclusion that he had a strong case on the outstanding issues.  It was that stated reasoning – and that reasoning only – which the Commissioner drew from his letters of 29 April 2005 into the context in which he decided that there was no longer, in a general sense, sufficient justification for the making of holding over orders.

171.Earlier in this judgment, I  concluded that the Commissioner has no power under s.46 of the Interpretation Ordinance to withdraw holding over orders if he believes he has good reason to do so.  But the lack of power under s.46 must be differentiated from the reasons for exercising that purported power.  The substance and validity of the Commissioner’s reasons were not themselves vitiated by the fact that the Commissioner attempted to give effect to those reasons in a manner which was outside of his powers.

172.In my judgment, while the merits may remain open to debate, the Commissioner was entitled reasonably to come to the conclusion he did; namely, that, now that his statutory powers had been confirmed by the Court of Final Appeal and now that, on a careful review, he was satisfied he had a strong case on the outstanding issues, there was no longer sufficient justification for making holding over orders and that absent persuasive reasons in any individual case, the principle of ‘pay now, litigate later’ should apply.

173.No suggestion can be made that the Commissioner discriminated arbitrarily against any particular appellant, favouring one, for example, at the expense of another.  Nor can it be said that the Commissioner ignored the individual circumstances of each application that came before him.  He was at pains to stress that such circumstances, in so far as they may apply, were always given due consideration.

174.Mr Root’s challenge, however, was not targeted at these matters.  In respect of the Commissioner’s wrongful assertion (as I have found it to be) that he had a general power under s.46 of the Interpretation Ordinance to withdraw orders, Mr Root said that, if the Commissioner had appreciated at the time that he had no such power and that the orders he wished to withdraw had to stay in place, he would have approached the issue of granting new holding over orders on a different basis.  He would then have considered applications for new orders not on the basis that existing orders had all been withdrawn but on the basis that all existing orders remained very much in place.  The issue of fairness then – an issue which he had always taken into account – would have been very differently coloured.

175.This submission, however, assumes that the Commissioner’s decision not to grant further holding over orders flowed directly from, and was integral to, his decision to withdraw existing orders.  But I do not see that there is evidence of that.  The Commissioner may have referred to his letters of 29 April 2005 but, as I have said earlier, it is apparent he did so only in the context of the reasons stated in those letters for why he believed he had good cause to withdraw existing orders.

176.On an ordinary reading, it is apparent, in my view, that the Commissioner reached two independent decisions.  The first decision was to withdraw holding over orders.  The second decision was, absent persuasive individual circumstances, not to grant further holding over orders.  The two decisions, although independent, were based on the same fundamental reasoning; namely, that there was no further sufficient justification for holding over rent.  Two decisions may be based on the same reasoning but be independent of each other : that is trite.

177.Importantly, in my view, there is nothing in the evidence to demonstrate that somehow the Commissioner purported to employ a power he believed he had under s.46 of the Interpretation Ordinance to refuse to grant further holding over orders.  That purported power clearly was employed only in respect of his decision to withdraw existing orders.

178.In the result, it does not follow, in my view, that, if the Commissioner had appreciated at the material time that he had no general power under s.46 of the Interpretation Ordinance, his decision (absent persuasive reasons in any individual case) not to grant further orders may have been different.

179.Mr Root’s challenge also encompassed the asserted existence of a legitimate expectation.  As he put it, if the Commissioner had not purported to withdraw any existing holding over orders, all new applicants would have had a legitimate expectation that their applications would be granted.

180.That challenge of course presupposes the earlier existence of a legitimate expectation vested in all persons who leased development sites and who, having received a demand for rent, chose to dispute that demand.  In my judgment, however, no such legitimate expectation existed.

181.First, it must be borne in mind that the Commissioner gave no reasons why in each individual case he agreed to make a holding over order.  Second, it must be noted that no clear policy statement or unequivocal representation of general application to all appellants and would-be appellants was ever published.  In the result, all appellants making fresh applications had nothing more to rely on than a history of successful applications – up to that date – by other appellants.

182.I accept that a clear practice; that is, a course of conduct, may, if it is unequivocal in its meaning and purpose, give rise to a legitimate expectation.  But in the present case, even though applicants were entitled to assume that the Commissioner had espoused some policy based on fairness, I can find no grounds for holding that the Commissioner, by his conduct, held out as part of that policy that, no matter what transpired in the litigation, he would always grant all applications pending the final outcome of the litigation.

183.On that basis, even if, in addition to the affirmation of his statutory powers in Agrila, his mode of valuation of development sites in Best Origin was affirmed by both the Lands Tribunal and the Court of Appeal, the Commissioner would still be obliged to grant holding over orders to all new appellants provided only that an appeal to the Court of Final Appeal remained.

184.In my judgment, it is doubtful that the Commissioner would in any event have been entitled to fetter his statutory discretion in such a manner.

185.In summary, I believe it reaches too far to say that the Commissioner by his conduct created a legitimate expectation of the kind advocated.

186.The concept of legitimate expectation was created as a vehicle to ensure fairness, it was not created as a trap to shackle all administrative action that shows consistency.

187.But even if I am wrong in that regard and it is held that the Commissioner, by his conduct, had given rise to a legitimate expectation, the fact is that he gave due notice of his concern that effect should no longer be given to any such expectation and gave reasons for that concern.  If the legitimate expectation had arisen out of his previous granting of all orders, and not by means of some generally published representation, then his expression of concern to all those to whom orders had already been granted would in the same manner have acted as a form of notice to those who intended to make new applications or had them pending.  Matters of this kind must be anchored to reality and the reality is that all the applicants in the ‘Beachshore’ application were represented by Woo, Kwan, Lee & Lo, the solicitors who also represented the applicants whose existing holding over orders had been, or were to be, withdrawn.

b.     The second ground of challenge

188.This ground of challenge is the same as the second ground of challenge advanced in the ‘Super Lion’ and ‘Turbo Top’ applications.  It is to the effect that the Commissioner, in concluding that there was no longer justification for making holding over orders, reached a conclusion outside of the parameters of discretion available to him; a conclusion, that is, that was Wednesbury unreasonable.

189.I find no merit in this challenge.  In light of the Court of Final Appeal’s judgment in Agrila, and the Commissioner’s review of the ‘robustness’, as he put it, of his case in respect of the remaining issues in dispute, the Commissioner was clearly entitled to review the manner in which his discretion under s.29(1) should be exercised.  I do not see how that can be described as perverse.  Equally, however hotly the merits may be debated, I do not see how it can be said that his conclusion reached in the light of that review is a conclusion so obviously wrong that no reasonable decision maker could ever have reached it.

190.As I have said earlier in this judgment, the Commissioner, on an ordinary reading of the relevant material, did not conclude that there was no justification left for making further holding over orders.  He did not ignore the many complex and novel issues that remained to be determined.  His decision was plainly that, in light of the watershed judgment in Agrila and his review of the strength of his case on the remaining issues, he no longer believed that there was sufficient justification left to continue granting holding over orders.  It was for the Commissioner to weigh the competing considerations. 

191.During the course of submissions, it was asserted that the discretion given to the Commissioner under s.29(1) was tailored for cases such as the present case in which the outcome is uncertain.  In such circumstances, it was said, when the Commissioner cannot be sure of his own position in law, then he must, in fairness, grant a holding over order.  But I do not see that the Commissioner’s discretion is to be diverted into such a narrow channel : see para.61 supra.  It may be said that in all appeals the Commissioner’s position in law is uncertain. 

Conclusion in respect of the ‘Beachshore’ application

192.For the reasons given, this application must be dismissed.

The ‘MTR’ application

193.This application challenges, first, the Commissioner’s decision to withdraw holding over orders made in respect of a number of MTR development sites and second, the Commissioner’s refusal to grant applications made for the issue of new orders.

194.The application was argued on three grounds; namely :

(i) that the Commissioner had no power under s.46 of the Interpretation Ordinance to withdraw holding over orders;

(ii) that, if he did have the power, he exercised it unreasonably, and

(iii) that, in respect of his refusal to grant new orders, those decisions were influenced by his erroneous belief that he had a power to withdraw existing orders pursuant to s.46 of the Interpretation Ordinance or, alternatively, were Wednesbury unreasonable or were made in defiance of a legitimate expectation that the Commissioner would continue his practice of granting all orders.

195.Mr Root, for the MTR, adopted without repetition the arguments advanced by him in support of the ‘Super Lion’, ‘Turbo Top’ and ‘Beachshore’ applications.  Equally, my reasoning in respect of those applications is adopted here.

196.In his letter of 29 April 2005, the Commissioner informed the MTR that, acting under the powers given to him by s.46 of the Interpretation Ordinance, he was withdrawing his holding over orders in respect of some 45 development sites in which the MTR had an interest.  He did so, he said, because —

“(i) The basis for making the holding over orders has ceased to exist;

(ii) There are no other circumstances sufficient to displace or rebut the principle in section 29(1) that Government Rent is payable notwithstanding an appeal against the rateable value in the Rent Roll.”

197.However, while the Commissioner had in addition cancelled holding over orders granted to those appellants who, being represented by Woo, Kwan, Lee & Lo, joined themselves with the Best Origin appeal, he did not take the same action in respect of the MTR.  In this regard, under the heading ‘abuse of process issue’, the Commissioner said :

“      I have reconsidered my provisional view under this heading set out in my letter of 31 January 2005.  I have come to the view that those Appellants who have not been represented by Woo, Kwan, Lee & Lo have not been sufficiently involved in the conduct of the Best Origin litigation for it to be appropriate at this stage for me to act under section 29(5) under the ‘abuse of process’ heading in respect of their appeals.  I am, of course, entitled to keep this aspect under review.”

198.It is to be recorded that the Commissioner wrote a letter in the exact same terminology to Turbo Top.  Accordingly, I am satisfied that the Commissioner acted outside of his powers in purporting to withdraw the existing MTR holding over orders.  As the Commissioner did not seek to cancel the MTR holding over orders (or indeed the holding order in favour of Turbo Top) pursuant to s.29(5) of the Rent Ordinance, it follows that all the holding over orders remain of force and effect.

199.As for the Commissioner’s refusal to grant new orders, for the reasons given earlier in this judgment, I am satisfied :

(i)     that his decisions to refuse were independent of and not vitiated by his purported exercise of power to withdraw existing orders;

(ii)     that the Commissioner’s refusals were not Wednesbury unreasonable, and

(iii)     they were not made in defiance of any legitimate expectation.

Conclusion in respect of the ‘MTR’ application

200.For the reasons given, there will be an order of certiorari to remove into this court and quash the decision of the Commissioner communicated to the MTR in his letter of 29 April 2005.  However, the application for an order of mandamus is dismissed.

The ‘Chest Gain’ application

201.This application concerns the Commissioner’s decision to withdraw two holding over orders granted to the applicant.  On 31 January 2005, the Commissioner wrote direct to Chest Gain – at that time it was not legally represented – saying that he had formed the provisional view that the holding over of rent was no longer justified.  He also raised his concerns as to the abuse of process issue.

202.Chest Gain replied by letter dated 18 February 2005, setting out its reasons why it believed there should be no withdrawal.  Among other matters, Chest Gain spoke of the immediate financial hardship that would be caused by having to pay in excess of $14 million.

203.In respect of the abuse of process issue, Chest Gain gave a succinct response :

“As you are aware, we are not associated with Best Origin nor represented by their solicitors.  We are not one of the parties involved in the alleged unreasonable delay of the appeal process and have no intention to abuse the process.”

204.By letter dated 29 April 2005, the Commissioner informed Chest Gain that he had now decided to withdraw the two holding over orders.  Standard wording was used : see the citation in para.196 supra

205.However, as Chest Gain – the same as the MTR – had not joined itself in the Best Origin appeal, the Commissioner said that he would not, in addition, cancel the holding over orders pursuant to s.29(5) of the Rent Ordinance.  Again, standard wording was used : see the citation in para.197 supra.

206.Looking solely to the merits, therefore, being satisfied that the Commissioner acted outside of his powers in purporting to withdraw Chest Gain’s existing orders, and as those orders were not cancelled under s.29(5) of the Rent Ordinance, it follows that the holding over orders should remain of force and effect.

207.I have expressed myself in provisional terms because there is an extra dimension to this application.  That dimension is one of alleged delay.  Mr Yu, for the Commissioner, contended that Chest Gain was out of time in bringing its application for judicial review and that, in all the circumstances, this court should refuse to grant relief.

208.In response, Mr Pow SC, for Chest Gain, submitted that, having regard to the decisions challenged, there was no delay.  If, however, the court found otherwise then any delay should be condoned.

209.To understand how the issue of delay arose, something more should be said of the background to this matter.

210.Chest Gain did not initially respond to the Commissioner’s letter of 29 April 2005 informing it of the decision to withdraw the two holding over orders.  In the result, on 30 May 2005 the Commissioner issued two demand notes requiring payment of rent.

211.In response, a letter dated 9 August 2005 was received from solicitors now representing Chest Gain, Messrs Iu, Lai & Li.  This letter, of course, was written more than three months after Chest Gain had been notified of the Commissioner’s decision in his letter of 29 April 2005.  In its letter, Iu, Lai & Li gave detailed reasons why it believed the Commissioner should reconsider his decision.  The letter concluded :

“Please let us have your favourable response within next 5 days.  Otherwise, we shall assume that you maintain your decision to withdraw the Orders and our client shall be forced to apply for leave for judicial review against your decision in question without further notice.”  [my emphasis]

212.The Commissioner replied by letter dated 11 August 2005 making it plain that he was not prepared to reconsider the matter.  His letter commenced :

“I have carefully considered the matter and am satisfied that the arguments advanced in your letter have been dealt with in my letter of 29 April 2005 to your client.  I do not find it necessary to deal with them again herein.  My decision to withdraw the relevant holding over orders as communicated in my said letter remains unchanged.”

213.As to the threat to institute proceedings to review the Commissioner’s ‘decision in question’, clearly the decision contained in his letter of 29 April 2005, the Commissioner informed the solicitors that Chest Gain was already out of time :

“I am advised that my decision of 29 April was and remains a lawful decision unless and until set aside by the Court upon a duly made application for judicial review brought within the appropriate time limits.  I am also advised that Ord 53 r 4 RHC requires applications for leave to be made promptly and in any event within 3 months of the decision.  Accordingly any application for leave at this stage would be out of time.  We do not see any proper grounds for an extension of time and that there has been undue delay, such that the grant of relief would be detrimental to good administration.  If you should attempt to seek leave then you should draw this letter to the attention of the court and I should have an opportunity to consider any grounds you put forward and to resist any extension of time and the granting of leave …”

214.On 18 August 2005, Chest Gain filed its notice of application for leave to apply for judicial review.  However, unlike other applicants, Chest Gain did not seek to review the decision of the Commissioner contained in his letter of 29 April 2005.  No remedies were sought in respect of that decision.  Instead, Chest Gain sought orders of certiorari to quash what it described as ‘the decision’ of the Commissioner contained in his letter of 11 August 2005.  This was a decision, it said —

“… made by the Commissioner and communicated to the applicant’s solicitors by a letter dated 11^th August 2005 deciding, after considering further matters and submissions from the applicant, to maintain his decision to withdraw the holding over orders made by him …”

215.In addition, Chest Gain sought to judicially review what it contended were the two ‘decisions’ of the Commissioner to issue his demand notes of 20 May 2007.  Those demand notes of course had been issued as a direct consequence of the Commissioner’s decision contained in his letter of 29 April 2005 to withdraw Chest Gain’s holding over orders.

216.If Chest Gain had sought to judicially review the Commissioner’s decision contained in his letter of 29 April 2005 it would have been some 20 days out of time.  That being the case, reasons for the delay would had to have been given.  As it was, that decision not being challenged, it was Chest Gain’s position that there was no delay to explain.

217.For the Commissioner, however, Mr Yu contended that the form of Chest Gain’s application was patently a device fashioned to avoid the problem of delay.  Having regard to the warning spelt out by the Commissioner in his letter of 11 August 2005 – see the citation in para.212 supra – I believe Mr Yu is correct.

218.A person aggrieved by the decision of a public authority is not able to avoid the problem of delay simply by employing the artifice of asking the public authority to reconsider its decision and then using the refusal, whatever its form, as the decision to be challenged.  The principle has been summarised in R. v. Commissioner for Local Administration, ex parte Field [2000] C.O.D. 58, at 60, as follows :

“Order 53, Rule 4(1) provides that ‘an application for permission to apply for judicial review shall be made promptly and in any event within three months from the date when the grounds for the application first arose, unless the court considers that there is good reason for extending the period within which the application shall be made’.  The problem created by that provision was not overcome by writing a fresh letter to the decision maker and thereby obtaining a reply which was then sought to be characterised as a fresh decision.  That would render the provision in the rule wholly ineffective.”

219.Equally apt is the following observation of Stock JA in Lo Siu Lan and Ma Ki Chiu v. Hong Kong Housing Authority (unreported, CACV 378/2004) :

“It seems to me that if earlier decisions were challengeable … 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 leaving being refused.  Whilst in such a situation the latest decision may itself be amendable 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.”

220.In any event, it is plain, in my view, that the Commissioner’s letter of 11 August 2005 was not to the effect that there had been a purposive, merit-based reconsideration of matters raised in the letter from Iu, Lai & Li.  The letter was drafted in a way which on any ordinary reading attempted to avoid any such misapprehension.

221.As for the two demand notes dated 20 May 2005, while they were capable of being the subject of judicial review, in all practical terms they were simply consequential administrative actions arising directly out of the Commissioner’s decision contained in his letter of 29 April 2005.  Indeed, in this regard, the Commissioner’s letter of 29 April 2005 ended (under the heading ‘demands for payment’) :

“When the demands are ready, they will be sent to you for payment on or before the due date shown on the demands.  In this instance, the due date will be at least 90 days after the issue date of the demands.”

222.An applicant seeking judicial review of a public law decision is obliged to challenge the substantive act or decision which reflects the true substance of the case he brings.  As it was put in R. v. Secretary of State for Trade and Industry, ex p Greenpeace Ltd [1998] Env LR 415, 424 :

“a judicial review [claimant] must move against the substantive act or decision which is the real basis of his complaint.  If, after that act has been done, he takes no steps but merely waits until something consequential and dependent upon it takes place and then challenges that, he runs the risk of being put out of court for being too late.”

223.While I cannot say that Iu, Lai & Li’s letter of 11 August 2005 was itself intended as a device to avoid the difficulties of delay, and having to give a good reason for such delay, it is apparent to me that, when the application for judicial review was drafted, it was used as such.

224.As Mr Yu said, the real decision being challenged by Chest Gain was the Commissioner’s decision contained in his letter of 29 April 2005.  When the artifice is stripped away, I think that is apparent.  In cases of this kind context is everything and in the context of the present case the substantive decision to be challenged was very clearly the decision of the Commissioner contained in his letter of 29 April 2005.  Chest Gain, however, persisted in advancing its case on the basis that it was entitled to seek a review of the Commissioner’s later decisions.

225.It was only during the hearing itself – some ten months after the notice of application was filed – that application was made to amend the application so that the substantive decision of the Commissioner made in his letter of 24 April 2005 would be included as a decision subject to review.

226.Clearly, in seeking to make that amendment to challenge the substantive decision in issue; that is, in getting to the true merits of the case, there was undue delay on the part of Chest Gain. 

227.S.21K(6) of the High Court Ordinance, Cap.4, provides that :

“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.”

228.Consequent upon the statutory provision, O.53, r.4(1) directs that —

“An application for leave to apply for judicial review shall be made promptly and in any event within three months from the date when grounds for the application first arose unless the Court considers that there is good reason for extending the period within which the application shall be made.”

229.In my judgment, taking all matters into consideration, in the present case I do not think that there was a good reason for extending the period within which Chest Gain was able to make its application to amend.  While I do not suggest bad faith, the fact remains, in my opinion, that there was an attempt on the part of Chest Gain to manipulate the court process. 

230.S.21K(6) provides that leave may be refused if the court considers that to grant leave would be detrimental to good administration.  What is and what is not detrimental to good administration must be considered in 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.”

231.As Stock JA observed in Lo Siu Lan and Ma Ki Chiu v. Hong Kong Housing Authority (supra) :

“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.’”

232.Has there been any detriment to good administration?  In my judgment, there has.  The manipulation of the court process by Chest Gain has put the Commissioner to extra time and cost.  Good administration demands that administrators proceed in the public interest to administer affairs under their responsibility.  Those affairs do not include misdirected litigation.

233.In considering whether to grant leave, potential prejudice to an applicant is a material consideration.  Clearly, in cases involving fundamental human rights this court will be circumspect in too rigorously applying the normal principles in relation to delay.  However, this case does not involve fundamental human rights.  At issue is no more than the payment over of a sum of money until the determination of court proceedings dictates whether that sum should be returned to Chest Gain, in part or whole, or kept by the Commissioner.  What is at risk is loss of interest for a period of time or an inability on the part of Chest Gain for that period of time to use the money to its best advantage.  While clearly Chest Gain will be financially prejudiced, no evidence was led as to the degree to which a refusal to grant leave would cause hardship.  I remain ignorant of whether Chest Gain sits on a treasure chest of money or whether it is financially stretched.

234.An important, almost decisive consideration, has been the fact, as I have found it, that Chest Gain’s case, if it had been properly focused, was a meritorious one.  Against that, however, is the recognition in the circumstances of this case not only that good administration has been undermined but that the integrity of this court’s process must be defended.

235.In all the circumstances, while I have considered the possibility of resolving this matter on the basis only of an order denying Chest Gain its costs, and while the decision has not been an easy one, I am drawn to the conclusion that it would not be right in the present case to condone the undue delay and to grant leave to Chest Gain to amend its application, an application which was only made at the eleventh hour in any event when it appeared that the tide of argument was against it.  This means that the application by Chest Gain must be dismissed with costs.

A summary of findings

236.For the reasons given in the body of this judgment, my orders are as follows :

A.	(i)	The ‘Super Lion’ applications are dismissed.
	(iii)	There will be an order nisi awarding costs to the Commissioner.
B.	(i)	The ‘Turbo Top’ application is allowed to the extent that there will be an order of certiorari to quash the decision of the Commissioner to withdraw the holding over order.
	(ii)	There will be an order nisi awarding costs to ‘Turbo Top’.”
C.	(i)	The ‘Beachshore’ application is dismissed.
	(ii)	There will be an order nisi awarding costs to the Commissioner.
D.	(i)	The ‘MTR’ application is allowed to the extent that there will be an order of certiorari to quash the decision of the Commissioner to withdraw existing holding over orders.  The application for an order of mandamus in respect of new applications refused by the Commissioner is dismissed.
	(ii)	There will be an order nisi awarding costs to MTR.
E.	(i)	The ‘Chest Gain’ application is dismissed.
	(ii)	There will be a final order of costs in favour of the Commissioner.
F.	The orders nisi in respect of costs will be made final 30 days after the date on which this judgment is handed down unless application is made for a different ruling.
G.	There will be liberty to apply in respect of any consequential orders that may be sought.

Mr Guy Root, QC and Mr Nigel Kat, instructed by Messrs Woo, Kwan, Lee & Lo, for the Applicants in HCAL 71, 78-92, 95, 134, 148-152/2005, 13, 17, 22-24, 48 & 52/2006 and instructed by Messrs Deacons, for the Applicant in HCAL 96/2005

Mr Jason Pow, SC instructed by Messrs Iu, Lai & Li, for the Applicant in HCAL 110/2005

Mr Benjamin Yu, SC and Mr John Litton, instructed by Department of Justice, for the Respondent