Wise Union Industries Ltd v. Hong Kong Science and Technology Parks Corporation

HCAL 12/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 12 OF 2009

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BETWEEN

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AND

HCAL 13/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 13 OF 2009

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BETWEEN

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(Heard Together)

Before: Hon Andrew Cheung J in Court

Dates of Hearing: 21-22 September 2009

Date of Judgment: 13 October 2009

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J U D G M E N T

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Issues

1.These two applications for judicial review raise questions about the handling of applications for industrial sites at industrial estates managed by the respondent, Hong Kong Science and Technology Parks Corporation.  Given the common background, the applications have been heard together.

2.In HCAL 12/2009, the applicant, Wise Union Industries Limited (Wise Union), has applied unsuccessfully for an industrial site at the Yuen Long Industrial Estate for the setting up of an asphalt cum concrete batching plant.

3.In HCAL 13/2009, the applicant, Champion City Industrial Limited (Champion City), has also failed in its application for an industrial site at the Tseung Kwan O Industrial Estate for setting up an asphalt recycling and concrete waste management plant utilising reclaimed asphalt.

4.In both cases, the “standing policy” of the respondent of not admitting concrete batching plant, and a similar policy against admitting asphalt plant (adopted only by the respondent in the course of considering Wise Union’s application), have played a significant role in the respondent’s rejection of the two applications.

5.Wise Union’s basic complaint in its application for judicial review is indeed that the respondent has blindly followed its policies without any meaningful consideration of the application on its merits.

6.Champion City’s case goes further.  It contends that the rigid adherence to the policies by the relevant committee of the respondent (see below) has led to the unlawful sub-delegation of its duty to process and determine Champion City’s application to the management of the respondent; the management, in turn, has simply blindly applied the policies without any real consideration of the application on its merits.  Moreover, in the course of doing so, the management has made a serious mistake of fact regarding the nature of Champion City’s proposed plant, thereby erroneously concluding that the same falls within the policies.

7.Although various other grounds and matters have been raised in the respective Forms 86A, these are essentially the issues raised by leading counsel on behalf of the two applicants at the substantive hearing.  At the hearing, the applicants also applied, belatedly, for leave to amend the Forms 86A to argue new grounds.  In an ex tempore judgment, the Court refused the applications.

Background

8.Before turning to the grounds of challenge actually relied on at the hearing, it is first necessary to set out the background.

9.The respondent is a body corporate established in 2001 by the Hong Kong Science and Technology Parks Corporation Ordinance (Cap 565) (the Ordinance).  It is a successor corporation created as a result of the merger of three bodies, namely, the Hong Kong Industrial Estates Corporation, the Hong Kong Industrial Technology Centre Corporation and the Provisional Hong Kong Science Park Company Limited.

10.According to the relevant Legislative Council brief, the legislature has intended that the respondent should facilitate comprehensive and flexible provision of space, facilities and services to the industries concerned, thereby aiding technology upgrading and development of higher value-added industries and activities, in order to help uphold Hong Kong’s position amongst the global technological development trend.  The respondent is not intended to be an ordinary manager of industrial land and premises, but is to take an active role in assisting the development of advanced and new technologies in Hong Kong.

11.Section 6 of the Ordinance sets out the statutory purposes of the respondent:

“(1)   The purposes of the Corporation are—

(a)     to establish or develop any premises where activities related to the purposes prescribed in paragraph (b), (c) or (d)are, or are to be, carried out, and to manage and control the land and other facilities comprised in such premises;

(b)     to facilitate the research and development and application of technologies in manufacturing and service industries in Hong Kong;

(c)     to support the development, transfer and use of new or advanced technologies in Hong Kong;

(d)     to engage in such activities or to perform such functions as the Chief Executive in Council may, after consultation with the Corporation, permit or assign to it by order published in the Gazette.

.…”

12.The powers of the respondent are set out in section 8.  Amongst other things, the respondent may:

“(a)   purchase, hire or otherwise obtain, hold, sell, let or otherwise dispose of property of any description;

(b)     build, rebuild, repair, maintain, alter, improve or demolish buildings, structures and other facilities;

(c)     subject to the terms and conditions contained in the land grant, conveyance or lease related to any specified premises—

(i)      lay out land in the specified premises;

(ii)     sell, let, sublet or otherwise dispose of land or any facilities in the specified premises on such terms and conditions as the Board considers appropriate; or

(iii)     prepare, approve or execute plans for the establishment, improvement or development of the specified premises;

(d)     manage any buildings, structures and other facilities (including any land ancillary to them) in specified premise;

….”

13.Section 7 of the Ordinance requires the respondent to conduct its business “according to prudent commercial principles”.

14.Pursuant to section 4 of the Ordinance, the respondent has a board of directors, which is the governing body of the respondent.  It consists of a chairman and 8 to 16 members.  The chairman is appointed by the Chief Executive and the members are appointed by the Financial Secretary.  The composition of the board includes lay persons, such as industrialists, professionals and academics.  For the better discharge of its functions, section 9 of the Ordinance permits the board to establish such committees as it considers appropriate for the purposes of the respondent.  The board may determine the composition, functions and procedures of a committee.  Pursuant to this section, 5 committees have been appointed, including the Business Development Admission Committee (the Committee).

15.The board has delegated to the Committee important functions of the respondent pursuant to the provisions in section 11.  The relevant part of section 11 reads:

16.Pursuant to section 11, the Committee has been delegated with powers by the board “to consider and decide each application for an industrial site made to the respondent based on the applicable policies and admission criteria of the respondent in relation to grant of industrial sites without further reference or recourse to the board itself”.  Acting on behalf of the board with such delegated powers, the Committee approves or rejects applications for admission as tenants and grantees into the respondent’s buildings and premises.  It recommends to the board overall marketing strategy and plans, and approves the implementation of major marketing programmes and activities in accordance with plans approved by the board.  The Committee also keeps under review the respondent’s admission criteria, terms of admission, land premium and rental guidelines, and recommends major changes to the board for consideration and approval.

17.Membership of the Committee is selected from amongst the members of the board.  According to the evidence, currently, 10 out of the 15 members of the board, including the chairman and the official member, are members of the Committee.

18.The Committee is assisted by the management of the respondent in conducting its business.  The management of the respondent comprises salaried staff, led by the Chief Executive Officer.  The Committee holds a regular meeting once every two months, and extraordinary meetings are also convened as necessary.  Owing to the fact that many of the Committee members are lay persons working on a part-time basis, the management prepares committee papers to assist the Committee in its deliberations and decision-making process.  The management also helps the Committee to ascertain the relevant facts about the applications which are then provided to the Committee through committee papers and in the course of committee meetings.  Sometimes, committee papers and proposals prepared by the management are simply circulated to members of the Committee without the need for meetings; this practice is said to enable the Committee’s work to be done more efficiently.  In the year 2007/2008, the Committee only held 7 meetings, but there were altogether 196 meeting papers, minutes and circulation papers prepared by the management for the Committee’s consumption.

19.Tenancies in the industrial estates of the respondent are in great demand.  Amongst other attractions, such a tenancy would enable an industrial operations which cannot normally be housed in an ordinary multi-storey industrial or commercial building available on the open market to be carried out within the industrial estate.  Secondly, land use right in the estate is offered by the respondent at a substantially below market price.  In other words, a successful applicant can have the use of relatively cheap land.  There are currently 3 industrial estates managed by the respondent.  The Tai Po Industrial Estate is now fully occupied.  The Yuen Long Industrial Estate is 98% occupied, whereas the Tseung Kwan O Industrial Estate is 68% occupied.  A study is underway to explore ways to re-vitalise the existing estates and the feasibility of developing a fourth industrial estate.

20.The admission criteria for sites in the existing industrial estates are as follows:

“Applicants should satisfy the following criteria:

1.    The industrial project must be of a nature which effectively prohibits it from being carried out in an ordinary multi-storey industrial or commercial building available on the open market in Hong Kong.

2.    The project must not be classified as an offensive trade under Government regulations.

3.    The primary activity must not be storage or warehousing.

Projects most welcome are those which involve:

1.    new or improved products or services;

2.    new or upgraded technology;

3.    high added value based on the use of local material and manpower;

4.    products or services for which there is strong demand from local industry;

5.    substantial contribution to Hong Kong’s exports;

6.    significant investment particularly in new machinery and equipment;

7.    employment at a higher level of skill.

Apart from manufacturing and service industries, other types of activity including specialized and sophisticated supporting services such as research and development, technical centres, prototype design etc, are also encouraged by the Corporation provided that they cannot be carried out in an ordinary multi-storey industrial or commercial building.  All applicants are expected to complete a standard application form and are usually requested to furnish additional information to assist in the assessment of their applications.”

21.According to the evidence, when an application for an industrial site is received, staff of the Industrial Estates Business Unit of the management of the respondent will carry out an (initial) assessment of the project in accordance with the admission criteria and policies and prepare a draft committee paper for endorsement by the senior members of the management.  The paper will then be revised if necessary and the final paper will be delivered to the Committee members 10 days before the meeting of the Committee for consideration.  Sometimes, papers will be submitted to the Committee for approval by circulation.  According to the evidence filed by Mr Patrick Siu, the Senior Development Manager of the respondent, on behalf of the respondent in both sets of proceedings:

“The Management’s role in processing the applications is purely advisory and, regardless of the preliminary findings of the Management, each case will be referred to the [Committee] for its full consideration based on the individual merits of each case, and it is the [Committee] which makes the final decision on the application.” (Paragraph 25 of Mr Siu’s first affirmation)

22.However, according to Mr Siu,

“For applications in relation to certain types of project, the BDAC [ie the Committee] has standing instructions that it will not consider them for the time being; for the purposes of the present case, there was such a standing instruction in place in relation to applications for projects for concrete batching (I deal with this further below).  If the Management received such an application, it would not proceed with processing the application and would inform the applicant accordingly without the need to first refer the application to the BDAC, but would still keep the BDAC informed of such an application.” (Paragraph 26 of Mr Siu’s first affirmation)

23.This brings me conveniently to the standing policy against admitting projects for concrete batching.  The policy was first adopted in 1996 by one of the respondent’s predecessors.  The main reasons behind the policy were the relatively basic technology input, low level of investment and potential negative environmental impact.  The policy also took into account the possibility that, in the absence of such a policy, the limited land bank available might be used up in accommodating a large number of similar projects to the detriment of other meritorious industries.

24.Since (it was considered) there was no material change in the technology involved in concrete batching, the policy was duly adopted and continued by the respondent after its establishment in 2001.  According to Mr Siu, the policy as continued by the respondent “is not a rigid or inflexible policy and, if the proposed project has merits and does not suffer from the characteristics described above, it may be approved” (paragraph 54 of his first affirmation).

25.As a matter of fact, since the establishment (and publication) of the policy in 1996 and after its adoption by the respondent in 2001, no concrete batching applications have ever been approved, although from time to time such applications or relevant enquiries were received by the respondent.

26.On the other hand, there was no policy regarding asphalt production until 12 September 2008, when the Committee discussed in its meeting the application of Wise Union.  Wise Union’s application involved the setting up of an asphalt cum concrete batching plant.  It was considered that the process of asphalt mixing was similar to that of concrete batching, and equally involved potential negative environmental impact.  Moreover, the Committee took into account a previous case involving Anderson Asphalt Limited.  Anderson Asphalt applied successfully in 2005 for a site in the Yuen Long Industrial Estate to set up an asphalt production plant cum research and development facility.  Anderson Asphalt encountered difficulties in obtaining planning approval.  The respondent’s approval of the project also led to objections from nearby villages based on environmental concerns.  All this resulted in substantial delay.  As of 12 September 2008, Anderson Asphalt had not yet commenced production and therefore there was no way to assess the environmental impact of asphalt production at the industrial estate.

27.In addition, the Committee also took into account the fact that a study was underway to consider the role of the respondent in supporting the construction industry in Hong Kong and in particular, to consider whether or not construction-related industries, such as concrete batching and asphalt mixing, could be included in the fourth industrial estate under consideration.

28.The Committee therefore adopted the new policy regarding asphalt applications on a wait-and-see basis.

29.It was under those circumstances that Wise Union’s application, made in early May 2008, was eventually rejected by the Committee at its meeting on 12 September 2008.  Likewise, Champion City’s application, made on or about 12 November 2008 – after the adoption of the policy against asphalt plant, was rejected by the management of the respondent by a letter dated 24 November 2008 signed by Mr Siu.

The law

30.Before turning to the facts of each application, it is useful to set out the law regarding adoption of and reliance on policies in the making of discretionary decisions by public bodies.  In this regard, although understandably, different emphases have been placed by the opposing sides on different aspects of the relevant law, there is essentially no disagreement on what the law is.

31.It is legitimate for a decision-maker with whom a discretion has been entrusted to adopt a policy to guide his exercise and implementation of the discretion.  This is particularly so if the discretion involved is a wide one.  Such a course would promote, amongst other things, consistency and efficiency.  However, a decision-maker must not allow his policy to “fetter” his decision.  In other words, he must not apply his policy blindly and rigidly.  The policy must not preclude the decision-maker from departing from it or from taking into account circumstances and merits of the particular case in question.  Put another way, the decision-maker must always be “willing to listen to anyone with something new to say”: British Oxygen Co Ltd v Minister of Technology [1971] AC 610, 625E.  The policy adopted must fairly admit of exceptions to it.  There has to be “an exceptions procedure worth the name”: R v London Borough of Bexley, ex parte Jones [1995] ELR 42, per Leggatt LJ.

32.The position has been put in these terms by Lord Browne-Wilkinson in R v Secretary of State for the Home Department, ex parte Venables [1998] AC 407, 496G/H-497A:

“When Parliament confers a discretionary power exercisable from time to time over a period, such power must be exercised on each occasion in the light of the circumstances at that time.  In consequence, the person on whom the power is conferred cannot fetter the future exercise of his discretion by committing himself now as to the way in which he will exercise his power in the future.  He cannot exercise the power nunc pro tunc.  By the same token, the person on whom the power has been conferred cannot fetter the way he will use that power by ruling out of consideration on the future exercise of that power factors which may then be relevant to such exercise.”

33.de Smith’s Judicial Review (6^th ed), para 9-002 explains the public law grounds against the fettering of a discretion in the following way:

“A decision-making body exercising public functions which is entrusted with discretion must not, by the adoption of a fixed rule or policy, disable itself from exercising its discretion in individual cases.  It may not “fetter” its discretion.  A public authority that does fetter its discretion in that way may offend against either or both of two grounds of judicial review: the ground of legality and the ground of procedural propriety.”

In para 9-017, the learned editors of de Smith add that the courts will “scrutinise closely the conduct of a decision-maker in assessing whether or not he has unlawfully fettered his discretion”.

34.In the present case, there can be no real dispute that the respondent was entitled to adopt the policies relating to concrete batching and asphalt production.  As Mr Joseph Fok SC (Ms Yvonne Cheng with him) has submitted on behalf of the respondent:

(1)     The policies do not conflict in any way with the respondent’s statutory duty.

(2)     The respondent was entitled to take the view that the policies were appropriate as the mix and balance of industries accommodated in the industrial estates is a matter that lies exclusively within its judgment.

(3)     There is a limited amount of space in the existing industrial estates and it is for the respondent to decide, within the scheme of the Ordinance, how that should be filled.

(4)     The policies promote consistency of treatment and therefore fairness.

(5)     The policies promote administrative efficiency since the resources of the respondent are not unlimited.

(6)     The respondent is entitled to consider grouping construction-related industries in the proposed fourth industrial estate which may be more suitable for those industries, and to impose the policies in the meantime.

35.However, as Mr Fok has also accepted, what is not acceptable is a policy which precludes the decision-maker from departing from the policy or from taking into account the circumstances of any particular case.  Likewise, in my view, it is equally unacceptable for a policy, which, on the face of it, does not preclude the decision-maker from departing from it or from taking into account the merits of any particular case, to be implemented as if it were such a policy.  In other words, one is not only concerned with what the policy says; but one is also, and sometimes more, concerned with how the policy is implemented in practice.

36.It is also convenient to say a few words on the law regarding sub-delegation at this juncture, although this question only concerns Champion City’s application, which will be dealt with after Wise Union’s application.

37.The relevant law may be taken conveniently from a passage in Wade & Forsyth, Administrative Law (10^th ed) 259-260:

“An element which is essential to the lawful exercise of power is that it should be exercised by the authority upon whom it is conferred, and by no one else.  The principle is strictly applied, even where it causes administrative inconvenience, except in cases where it may reasonably be inferred that the power was intended to be delegable.  Normally the courts are rigorous in requiring the power to be exercised by the precise person or body stated in the statute, and in condemning as ultra vires action taken by agents, sub-committees or delegates, however expressly authorised by the authority endowed with the power.

….

The maxim delegatus non potest delegare is sometimes invoked as if it embodied some general principle that made it legally impossible for statutory authority to be delegated.  In reality there is no such principle (other than in the law of agency); and the maxim plays no real part in the decision of cases, though it is sometimes used as a convenient label.  In the case of statutory powers the important question is whether, on a true construction of the Act, it is intended that a power conferred upon A may be exercised on A’s authority by B.  The maxim merely indicates that this is not normally allowable.  For this purpose no distinction need be drawn between delegation and agency.  Whichever term is employed, the question of the true intent of the Act remains.  It is true that the court will more readily approve the employment of another person to act as a mere agent than the wholesale delegation of the power itself.  But this is due not to any technical difference between agency and delegation but to the different degrees of devolution which either term can cover.  The vital question in most cases is whether the statutory discretion remains in the hands of the proper authority, or whether some other person purports to exercise it.  Thus where the Act said that an inspector of nuisances ‘may procure any sample’ of goods for analysis, it was held that the inspector might validly send his assistant to buy a sample of coffee.  This might be described as mere agency as opposed to delegation.  But that would obscure the true ground, which was that the inspector had in no way authorised his assistant to exercise the discretion legally reposed in himself.  For similar reasons there can be no objection to the Commission for Racial Equality using its officers to collect information in its investigations.”

38.In the present case, the task of determining whether the Committee has the power to sub-delegate its delegated power to determine applications is made easy by section 11 of the Ordinance which has already been extracted.  As noted, section 11(1)(a)(iii) allows the board to delegate any of its functions or the respondent’s functions (including the determination of applications for tenancy) to a committee.  Importantly, section 11(3) then provides that where the board makes a delegation, it may at the same time authorise, amongst others, the committee to whom the delegation is made, to sub-delegate the function delegated.

39.In other words, there is indeed a power to sub-delegate if the committee itself has been authorised to do so by the board.  However, absent such specific authorisation under section 11(3), there is no power of sub-delegation.

40.On the evidence filed, there is no suggestion whatsoever that the board has authorised the Committee to sub-delegate its power to determine applications for tenancy to anybody, including the management of the respondent.  Indeed, in Mr Siu’s evidence, he has emphasised that the relevant role played by the management is “purely advisory” (paragraph 25 of his first affirmation).

Wise Union’s application

41.I now move on to consider more closely Wise Union’s application and its rejection by the Committee.

42.The application was made in an application form dated 2 May 2008.  Wise Union’s proposed project comprised two operations, namely, a concrete batching plant to produce ready mixed concrete batching and an asphalt mixing plant to produce polymer modified asphalt.  Two “technology transfer partners” from Japan and the United States for the concrete and asphalt mixing plants respectively were to be involved.  Concrete batching would involve discharging of pre-designed quantities of sand and stone aggregates, cement, pulverised fly ash, blast-furnace slag, water/chilled water and additives in a pre-set sequence into a mixer.  The ingredients would then be mixed for a designated period of time before the product would be discharged into mixer trucks for delivery to construction sites.  A Japanese company would support Wise Union in producing high strength concrete (1,000 N per mm² or more).  On the other hand, asphalt mixing would be similar to concrete batching but with different ingredients and would involve heating the asphalt to around 160°C.  Aggregates, filler and asphalt would pass through an auto-weighing system according to pre-determined formulation for mixing before discharge to asphalt trucks.  The product, produced with technology from the States, would be different from traditional asphalt in water sensitivity and stripping resistance so that it would be more durable and more suitable for highway use.

43.The application was forwarded to Mr Siu for preliminary assessment.  According to Mr Siu’s own evidence, as the respondent was in the course of reviewing its policy of admission, the feasibility of a fourth industrial estate and the possibility of accommodating construction-related industries in such an estate, and given the standing policy not to admit concrete batching plant into the existing industrial estates, he and the management considered it more appropriate not to process any application in those areas until the outcome of the study.  In his letter dated 21 May 2008, Mr Siu explained the position to Wise Union and informed the company that its application could not be processed any further.  Wise Union was also told that the management would inform the Committee at its next meeting, “for record purpose”, that Wise Union had submitted an application.

44.For all practical purposes, in my view, this amounted to a rejection of Wise Union’s application, a matter which I will return to when dealing with Champion City’s application.  But so far as Wise Union’s application was concerned, the matter did not stop there.

45.By a letter dated 6 June 2008, Wise Union pointed out to the respondent that it was aware of the successful application by Anderson Asphalt which was approved within a reasonably rapid timeframe, and therefore felt that possibly, its application had not been given the same treatment and attention it deserved.  Wise Union’s letter asked for an opportunity to meet with the management of the respondent about its application.

46.That led to a meeting on 16 June 2008.  According to Mr Siu, the management gave Wise Union’s representatives a comprehensive explanation of the respondent’s prevailing policy against admitting concrete batching operations and the rationale and justification behind the policy.  The management also advised the applicant that it “could not process its application any further”.  However, it also asked Wise Union’s representatives whether their company would consider separating its application in relation to the asphalt plant from that regarding the concrete batching operation, as the respondent did not yet have a similar policy against asphalt production.  In such event, the management would, Wise Union was told, certainly submit Wise Union’s application to the Committee for consideration.  However, Wise Union indicated in reply that it was not prepared to so separate its application.

47.All this notwithstanding, the management did proceed to prepare a committee paper about Wise Union’s application for the consideration of the Committee at its next meeting.  In the committee paper, the management briefly described Wise Union’s application and the project involved, reminded the Committee of its standing policy against concrete batching, pointed out to the Committee that there was in existence no similar policy regarding asphalt mixing, and reminded the Committee of the case of Anderson Asphalt and the difficulties that had been encountered.  The paper contained the following recommendation:

“14.   Wise Union’s investment at $29.75 million equivalent to $5,436 per m² is much lower than the average investment level for projects on the Industrial Estates of about $10,000 per m².  Given the low investment and our review as described above, Management recommends that:

(a)     Wise Union’s application shall be rejected

(b)     The policy for not admitting concrete batching plant shall be maintained; and

(c)     No more asphalt plant shall be accepted until further review.

15.    However, Management considers that in our study for the feasibility of establishing the Fourth Industrial Estate, construction related industries such as concrete batching, asphalt mixing, precast unit fabrication, cement mortar mixing etc could still be considered if the new site is better positioned to accommodate them.”

48.The paper contained a table summarising the particulars of Wise Union’s application and enclosed a copy of the application form and the supporting schedules thereto.  But over 50 pages of materials on asphalt production were omitted from the enclosures.

49.It was in those circumstances that Wise Union’s application eventually reached the Committee at its meeting on 12 September 2008, despite the initial reply by Mr Siu on behalf of the management that the application could not be processed any further.  At the meeting, according to the minutes, Wise Union’s proposed level of investment ($5,436 per m²), which was considered to be considerably lower than the average investment level of about $10,000 per m² for projects admitted to the industrial estates, was noted.

50.The meeting also noted the policy against concrete batching since 1996.  The minutes referred to discussions relating to the case of Anderson Asphalt and the fact that production would not be commenced before October 2009.  The meeting noted that the respondent “would not be able to argue [assess?] the environmental impact, if any, until then” (para 96).  The view was expressed (para 97) that it would therefore be prudent for the respondent to track the performance of the Anderson plant first before an application for a second asphalt plant was considered.

51.Paragraph 100 of the minutes reads:

“100.   Management proposed and Members agreed that the application of Wise Union be rejected, the policy of not admitting concrete batching plant be maintained, and no further asphalt plant should be accepted unti1 further review.  In the study on the feasibility of establishing the Fourth Industrial Estate, construction related industries such as concrete batching, asphalt mixing, precast unit fabrication, cement mortar mixing etc should form part of any review to widen the range of uses to be permitted within the Industrial Estates.”

52.Mr Siu provided additional information about what took place in the meeting, which he attended personally, in paragraph 40 of his first affirmation:

“(a)   The BDAC members were aware that the Applicant’s proposed investment in land, building and equipment was HK$29.75 million which was equivalent to HK$5,436 per square metre, a value much lower than the average investment level of about HK$10,000 per square metre for projects in the Respondent’s industrial estates. …

(b)     The BDAC members also considered that the manufacturing technology proposed in the Applicant’s application was relatively simple and there was a potential negative environmental impact from such operation.  While the members were aware of the fact that the concrete proposed to be produced in the site would be of a high strength variety and the asphalt products would be different from traditional asphalt in terms of its water sensitivity, durability and stripping resistance, they were satisfied, however, that the proposed production remained basic despite improvements in raw materials and chemical additives proposed to be used.  The members had also reviewed the Respondent’s past rejections of a number of similar applications and concluded that the Respondent’s standing policy against concrete batching remained valid and applicable. …

(c)     The BDAC members also considered the potential negative environmental impact which a concrete batching and asphalt mixing operation might bring to the industrial estate and its surroundings. …

(d)     The BDAC members also discussed at length the Respondent’s experience with Anderson Asphalt’s application (“Anderson’s Application”) in 2005 for a site in the Yuen Long IE to set up an asphalt production plant-cum-research and development facility.  The members were aware of the difficulties that Anderson Asphalt encountered in obtaining planning approval and the serious objections raised by the villagers living in close proximity to the Yuen Long IE owing to their concerns as to the potential environmental impact of the proposed asphalt plant.  Given that the production of Anderson’s Asphalt plant had suffered long delays and production would not commence until October 2009, the members [would] not be able to assess the environmental impact of asphalt production at that stage and it was considered prudent to withhold approval of the Applicant’s asphalt plant proposal until the impact of Anderson Asphalt’s project could be fully assessed. …

(e)     Anderson’s Application was also considered to be unsuitable for comparison to the present application since, at the time of Anderson’s Application, there was no policy per se regarding asphalt mixing.  In contrast, the Applicant’s application did include setting up concrete batching operations which was an activity contrary to the Respondent’s standing policy since 1996.  Furthermore, the details of Anderson’s Application were different to those of the Applicant’s. …

(f)      While recognizing the need to support the construction industry in Hong Kong, the members considered that concrete batching companies could nonetheless operate their plants on private land or on Government land on a short-term tenancy basis.  In any event, the role of the Respondent in supporting this industry sector will be considered by the Study, which will consider whether or not construction-related industries such as concrete batching and asphalt mixing should be included in the Fourth Industrial Estate.  Hence the members took the view that the Applicant’s application should be rejected pending the outcome of the Study. …”

53.Following the meeting, a letter dated 12 September 2008 was written by Mr Siu to Wise Union.  The letter informed Wise Union that the Committee (mistakenly referred to as the board in the letter) had considered Wise Union’s application; it was unsuccessful as the proposed project investment was low and the Committee had decided not to admit any concrete batching plant and asphalt plant until further notice.

54.By a letter dated 15 October 2008, Wise Union wrote to complain about its unsuccessful application.  It accused the respondent of discrimination, when its application was compared with Anderson Asphalt’s case.  It threatened to “seek appeals to other relevant government departments or other media”.

55.That prompted the management to prepare a second committee paper for the discussion by the Committee at its meeting to be held on 25 November 2008.  The purpose of the paper was to brief the Committee on Wise Union’s complaint, and to review the grant of Anderson Asphalt’s earlier application.  The paper pointed out that the proposed investment level in Anderson’s application was $13,465 per m²; however, it also noted that in arriving at that figure, the replacement-as-new values (rather than the book values) of Anderson’s existing machinery and equipment, which Anderson proposed to relocate from its existing plant to the Yuen Long Industrial Estate, were used.  The paper also pointed out that, in other words, Anderson’s application proposed no new machinery investment, which was a truly exceptional situation in the admission history of grantees into the respondent’s industrial estates.  The paper also observed that at the time when Anderson’s application was approved (in 2005), the then management did not draw to the Committee’s attention the pre-existing policy against concrete batching plant, the operation of which was considered to be similar to that of asphalt mixing.

56.The paper further pointed out (at paragraph 10) that Wise Union’s application was rejected because of its below average machinery investment level (although new machinery was to be used), as well as the potential negative environmental impact.

57.The management recommended that there be no change in policy for non-admission of concrete batching plant into the industrial estates, that the respondent would review the admission of construction-related industries, such as concrete batching, asphalt mixing, pre-cast facade unit fabrication and so forth in the current study to re-vitalise the industrial estates, that in the meantime, applications in these areas be not processed, and that each application be assessed independently on its own merits and other relevant considerations.

58.At the meeting on 25 November 2008, the Committee, according to the minutes, discussed at some length the Anderson Asphalt case and compared the investment level in that case with the proposal of Wise Union.  The management also informed the Committee at the meeting that the Anderson project had been delayed, and that when the plant was in production, the management would track its performance and evaluate its environmental impact on the surrounding areas.  The Committee resolved to ask the management to circulate a revised draft letter and the legal advice (that it was seeking) to the Committee members before replying to Wise Union.

59.According to Mr Siu, who also attended the 25 November 2008 meeting, further reasons for the Committee’s rejection of Wise Union’s application were identified:

“(a)   The BDAC members considered that there had been shortcomings in the assessment of Anderson’s Application, as the Respondent’s policy in relation to concrete batching (which process was similar to asphalt mixing) had not been highlighted, the potential negative environmental impact of the project was then unknown (as its previous operation had been located far away from residential areas), and the analysis as to the level of investment had not highlighted the fact that no new investment in machinery was involved.  The BDAC therefore concluded that Anderson’s Application was a special case and should not serve as precedent for the Applicant’s application, and that the Respondent should not replicate its previous errors by following the precedent in Anderson’s Application. …

(b)     Even taking into account the admitted deficiencies surrounding the Respondent’s decision to admit Anderson, the BDAC members agreed with the Management’s observations that Anderson’s Application at the time was nevertheless far more meritorious than the application presently submitted by the Applicant, as shown by the comparison of the key features of the two applications set out in Appendix II of [the 2nd Committee Paper].

(c)          The BDAC members also considered that it was necessary to consider the environmental impact of the project and objections from neighboring residents.  The BDAC accordingly decided against admitting the Applicant until the environmental impact could be ascertained. …”

(para 41 of Mr Siu’s first affirmation)

60.By a letter dated 29 December 2008, Mr Siu,on behalf of the management, replied to Wise Union.  The relevant part of the letter reads:

“While we fully appreciate your disappointment regarding our Board’s decision to turn down your application, the decision was however reached after very careful consideration of all factors including, inter alia, your project particulars, level of investment, our standing policy and the present situation at Yuen Long Industrial Estate.

We have explained to you on several occasions that it has been our policy since 1996 not to admit any concrete batching project into our Industrial Estates.  This has been consistently enforced and as a matter of fact, we have rejected a number of such applications since then.

As regards asphalt projects, it is true that we have approved an application on our Yuen Long Industrial Estate in January 2005.  You should no doubt appreciate that we are not at liberty to discuss the particulars of other projects in the Industrial Estates without the consent of the relevant lessees.  Suffice it to say that every project is considered on its own merits having regards to our published selection criteria including the level of investment, activities to be carried out, technology employed and in particular, the impact on environment.  In this respect, we note that your investment level is significantly lower than the average investment per square metre for other projects on the Industrial Estates.

Further, as you have quite rightly pointed out, there is already another lessee with an asphalt project.  The question of further negative impact on the environment for another similar project to exist in the same Industrial Estate and objections from neighbouring residents are clearly relevant factors we are duty bound to consider as a statutory body.

It is still our intention to review the admission of construction related industries in our consideration for the provision of the Fourth Industrial Estate and in the meantime, we regret that we will not process any similar application on our three existing Industrial Estates in these areas.”

61.This reply did not satisfy Wise Union.  Following further exchanges of correspondence, the present legal proceedings were commenced on 11 February 2009.

Wise Union’s arguments

62.Mr John Bleach SC, leading Mr Stewart Wong and Miss Elizabeth Cheung, submits on behalf of Wise Union that when scrutinised closely, the materials quite plainly show that the Committee did not seriously consider the application of Wise Union.  Instead, the Committee (and the management) just followed blindly and rigidly its policy against admitting concrete batching plant as well as its newly established policy against asphalt plant.  The Committee simply failed to look at the new technologies involved in Wise Union’s proposed project.  As regards possible adverse environmental impact, the Committee and the management simply focused on the possible negative environmental impact that the Anderson asphalt plant might have after commencement of production.  They totally failed to carry out any assessment on whether Wise Union’s proposed plant would result in any adverse environmental impact.  Their concerns about rural objections were misplaced.  Those objections related to the Anderson plant which had not even started production, and to the pre-existing condition in the Yuen Long Industrial Estate.  The objections, counsel submits, had nothing to do with Wise Union’s proposed project, which would involve taking sophisticated measures to minimise possible adverse environmental impact.

63.As regards the alleged low level of investment, counsel complains that the comparison with the case of Anderson Asphalt was simply faulty in that in the latter’s case, old machinery was to be injected into the project whilst at the same time replacement-as-new values were used in the computations.  Counsel also argues that comparison of Wise Union’s investment level with the average investment level across the board was wholly inappropriate because different industries and trades just could not be compared.  What the Committee did was simply to “compare oranges with apples”.

64.Counsel also submits that one should focus on the minutes of the meeting of the Committee held on 12 September 2008.  The minutes reflect what actually was discussed in the meeting which led to the Committee’s rejection of Wise Union’s application.  What Mr Siu has said now in his two affirmations is simply ex post facto justification.  Likewise, what the second committee paper and the second meeting of the Committee held on 25 November 2008 attempted to do was simply an exercise in damage control.  Insofar as they sought to supplement what was actually discussed and considered by the Committee at the crucial meeting of 12 September 2008, they must be ignored.

Discussion on Wise Union’s case

65.I agree that one must focus on what the Committee actually considered at the time when it decided to reject Wise Union’s application.  The primary focus must therefore be on the Committee’s meeting on 12 September.  However, this does not mean that one should ignore, for instance, the first committee paper, which was prepared specifically by the management for the benefit of the Committee at its meeting on 12 September 2008.  In the absence of any suggestion or credible suggestion that the members of the Committee had not read or paid attention to what the paper said, one must proceed on the assumption that the members were reasonably conversant with the contents of the paper (and its enclosures).  In the paper, the management gave a concise description of Wise Union’s proposed project, pointed out the pre-existing standing policy against concrete batching, discussed the position regarding asphalt mixing and the case of Anderson, and remarked on the below average investment level of Wise Union’s proposed project.  The paper proposed the adoption of a similar policy against asphalt plant pending the commencement of production of Anderson’s plant and the outcome of the study.  All these matters must be taken to have been in the mind of the Committee members when they attended the meeting on 12 September.

66.In my view, the paper’s specific discussion on Wise Union’s level of investment is significant in that it shows that there was a willingness to consider Wise Union’s application on its merits.  If the management had adopted a rigid approach to the pre-existing policy against concrete batching, it would not have been necessary to look at the level of investment at all.  At the meeting, the Committee also took note of the relatively low level of investment of Wise Union’s project.

67.The complaint about a rigid adherence to policy breaks down when one remembers that in relation to Wise Union’s application, there was, in fact, no complete policy covering the proposed project.  The then existing policy only related to concrete batching.  Insofar as Wise Union’s project involved asphalt mixing, it was not covered by any pre-existing policy, and by definition, that part of the project had to be considered by the management and the Committee on its own, which they did.  So in terms of any possible rigid adherence to policy, this part of Wise Union’s case must fail.

68.Focusing on what the Committee did at the meeting of 12 September does not mean that one cannot take into account what Mr Siu has since revealed in his first affirmation about what happened in that meeting.  One is not restricted to the minutes of the meeting, which were prepared by a different person.  In the absence of any application to cross-examine Mr Siu on his affirmations, I have no or insufficient reasons to disbelieve his account of what has happened in the Committee meeting of 12 September.  Certainly, what he has said in his evidence is consistent with what one can see from the first committee paper and the minutes of the Committee meeting.

69.Together, in my view, the first committee paper, the minutes of the Committee meeting and Mr Siu’s evidence, show that the application of Wise Union has been examined by the Committee on its merits.  Its rejection was not due to any rigid adherence to the pre-existing policy against concrete batching or to the newly adopted policy against asphalt plant.  One may disagree with the conclusion reached by the Committee, and one may suggest that the Committee should have looked at certain or various aspects of Wise Union’s application more closely.  But all this does not mean that the Committee has rigidly followed its policy, in total disregard of the merits of Wise Union’s application.

70.In particular, the low level of investment was specifically considered by the Committee.  In my view, the Committee was entitled to regard the proposed level of investment by Wise Union as being low, when compared with the case of Anderson Asphalt generally.  It was for the Committee to decide what level of investment it would like to see from its applicants.  The comparison with other existing tenants was only a general one.  If there were any exceptional circumstances leading to the below average level of investment, it was for Wise Union to point them out in its application.  Despite the doubtful basis of computing Anderson Asphalt’s figures, the fact remains that what the respondent in 2005 was approving was a proposal involving (so it was thought) a level of investment of over $13,000 per m².  The level of investment of Wise Union compared poorly with that benchmark set by Anderson Asphalt’s case – even though that benchmark figure was arrived at on a doubtful basis.  In any event, all this does not detract from the fact that the Committee did look at Wise Union’s application individually in terms of its proposed level of investment.  There is no question of any rigid adherence to policy here.

71.As regards the possible environmental impact, it is true that the Committee did not go into details of the built-in elements in Wise Union’s proposal to reduce negative environmental impact, but the Committee’s approach cannot really be faulted from a public law point of view.  What it did was simply to adopt a cautious and conservative approach, given that the possible negative environmental impact of Anderson’s plant, after commencement of production, was still unknown, and given the strong rural objections already received.  This was really a policy consideration, which the Committee was perfectly entitled to take into account.

72.As regards the technology to be involved in Wise Union’s project, the Committee was quite entitled to rely on the management’s views.  Whether certain technology was high-end or low-end was, to a certain extent, a matter of subjective judgment.  It was for the Committee to decide for itself how advanced the technology to be involved had to be.

73.The fact that in its first committee paper, the management did not include some pages of supporting materials attached to the application form of Wise Union for the Committee’s consideration is by no means conclusive against the case of the respondent.  First, this omission was not pointed out or relied on by Wise Union in its Form 86A or evidence.  Not being alerted to this point, the respondent simply had no chance to respond to it or to give explanation for the omission.  Secondly, given the advisory role played by the management, no criticism could be made against the decision-making process for the omission of the relevant pages from the committee paper prepared by the management which, by definition, served as a digest of the application.  Any member of the Committee reading carefully the committee paper would have noted that those omitted pages had not been included, and could have asked for them if he/she was interested in reading those pages as well.

74.The short letter of rejection dated 12 September 2008 must be read in conjunction with the minutes and what Mr Siu has now informed the Court about the discussion at the meeting.

75.If the application of Wise Union had stopped at the initial letter of rejection sent by Mr Siu on behalf of the management on 21 May 2008, perhaps Wise Union might have a case on an unlawful fettering of discretion.  But as it happened, the management was persuaded to meet with the representatives from Wise Union, and despite what it said to those representatives in the meeting, it eventually decided to prepare a full committee paper for the consideration of the Committee at its meeting.  This change in attitude of the management demonstrates, at least to some extent, a willingness on the part of the respondent to look at Wise Union’s case on its merits.

76.The fact that since 1996, no concrete batching plant has been admitted is, in the context of the present case, neither here nor there in itself.  It could simply mean that over the years, there simply were no exceptional cases dealt with by the respondent.

Conclusion on Wise Union’s case

77.In conclusion, I am not satisfied that Wise Union has made out a case of a rigid adherence to the relevant policies on the part of the Committee in rejecting its application.

78.Insofar as it comprises a separate ground of challenge, I also reject any suggestion that the decision of the Committee to reject Wise Union’s application may be challenged as Wednesbury unreasonable.

79.Insofar as it is suggested that the Committee took into account irrelevant considerations, such as the case of Anderson Asphalt and the local objections that followed, I see no merit in the complaint.  In my view, given the wide discretion given to the respondent, these were matters that it could legitimately take into account.  As regards the allegation that the Committee failed to take into account relevant considerations, on the facts of the present case, this is just another way of saying that the Committee has rigidly followed its own policies, without giving sufficient consideration to the merits of Wise Union’s application, a matter which I have dealt with above.

80.As mentioned, various other grounds and matters were raised in the Form 86A.  They were not pursued by Mr Bleach at the substantive hearing.  I need not say anything further about them.

Champion City’s application

81.I now move on to deal with the case of Champion City.  Champion City’s application was made on or about 12 November 2008, after the Committee had in its meeting on 12 September 2008 reconfirmed its pre-existing policy against concrete batching plant and established a similar policy against asphalt plant.  In the Form 86A, the proposed project of Champion City was described as an “asphalt recycling and concrete waste management plant”.  According to Champion City, the asphalt recycling operation would involve the use of a process which would require and incorporate new and advanced know-how, and specialised and sophisticated machinery.  In recycling asphalt, the excavated asphalt would have to be treated in a number of ways so as to “return” it to the original chemical composition, so that it could be mixed with new asphalt and then be reused.  The excavated asphalt would have to be dried and crushed to a specific size and then heated up to a temperature, before a special rejuvenating agent would be added.  The last step in the recycling process would be to mix it with raw asphalt at an optimised ratio, which would involve technical know-how not known in Hong Kong.  The whole process would be controlled by a “state-of-the-art” batching computer from Japan.  According to Champion City, there was simply no asphalt recycling plant in Hong Kong, and used asphalt had no disposal value other than for landfill purposes.

82.However, when the application reached the management of the respondent for preliminary vetting, it is plain that the management treated it as just another run-of-the-mill proposal for an asphalt and concrete batching plant.  Applying the policies in relation to the same, the management clearly considered that the proposal did not qualify for approval.  By a letter dated 24 November 2008, Mr Siu, writing on behalf of the management, advised Champion City as follows:

“The Corporation offers developed land on its Industrial Estates to both manufacturing and services industries with new or improved technology and processes which could not operate efficiently in ordinary multi-storey factory buildings.  However, there are limitations for us to accommodate all industries given our limited land bank and our new initiatives to re-vitalize the existing Industrial Estates and to study the feasibility of developing a new one.

As such, our Board has decided that concrete batching and asphalt mixing projects shall not be admitted into the three existing Industrial Estates.  We are sorry that we could not process your application any further.

We wish to thank you for your interest on our Industrial Estates and if you need further clarification, please free feel to contact the undersigned …”

(In the correspondence, “board” was very often used loosely to refer to the Committee.)

83.It is plain that the letter of 24 November 2008 constituted a rejection letter of Champion City’s application.

84.By a letter dated 29 December 2008, Champion City through its solicitors asked the respondent to clarify a number of matters, namely, whether Champion City’s application had been considered by the board or the Committee of the respondent, and, if not, the reason why it was not done.  The letter also asked the respondent when the board made the decision not to admit concrete batching and asphalt mixing projects into the three existing industrial estates.

85.By a letter dated 15 January 2009, the respondent through its solicitors replied:

“You are right in pointing out that our client’s Board of Directors has appointed a Business Development Admission Committee to consider and “approve or reject applications for admission as tenants and grantees into the Corporation’s buildings and premises”.  Decisions as to individual applications for admission would therefore be taken by the Committee, not our client’s Board of Directors.

On 12th September 2008, the Business Development Admission Committee decided, as matter of general policy, not to admit any concrete batching plant or asphalt plant into the Industrial Estates.  That being the case, your client’s application was rejected in accordance with such decision and policy without the need for the Committee to consider the application.  Our client therefore advised your client in their letter dated 24th November 2008 that our client could not process the application any further.”

86.Dissatisfied with the reply, Champion City commenced the present proceedings on 11 February 2009.

Discussion on Champion City’s case

87.I will turn immediately to what Mr Bleach has described as the “killer point” in Champion City’s case against the respondent, namely, unauthorised sub-delegation.

88.As mentioned, section 11(3) of the Ordinance allows sub-delegation where that is authorised by the board.  However, the problem with the respondent’s case is that there has been no such authorisation by the board of any sub-delegation of the relevant work of the Committee to the management of the respondent.  Indeed in Mr Siu’s evidence, the point has been emphasised that the management only plays a “purely advisory” role in processing applications, and “regardless of the preliminary findings of the management, each case will be referred to the [Committee] for its full consideration based on the individual merits of each case, and it is the [Committee] which makes the final decision on the application” (paragraph 25 of Mr Siu’s first affirmation).

89.However, in relation to processing Champion City’s application, quite plainly, this is not what has happened.  What has happened is that Champion City’s application was simply handled by the management.  It never reached the Committee for decision.  The decision to reject Champion City’s application was made by the management and communicated by Mr Siu on behalf of the management to Champion City.

90.The Committee, as a matter of fact, was only informed subsequently by the management that Champion City’s application “had been rejected by the management in accordance with [the Committee’s] approved guideline” (paragraph 32 of Mr Siu’s first affirmation).

91.In his first affirmation, Mr Siu explained why the application was refused:

“The reasons for the Respondent’s rejection of the Applicant’s application

45.    The Respondent reviewed its past experience in rejecting a number of similar applications and decided that the Applicant’s case was similar to those previous rejections with no significant distinguishing features in the Applicant’s case.  The common features, which applied equally to the Applicant’s case, were as follows:

(i)      Low level of investment: the Applicant’s proposed investment is low in comparison to other grantees at the Industrial Estates.  The proposed total investment was $63.5 million, which was equivalent to HK$7,594 per square metre.  This is significantly lower than the average investment level which is over $10,000 per square metre.

(ii)     Low level of technology: in the Respondent’s view, the manufacturing technology proposed in the Applicant’s application was relatively simple.  The Respondent was aware of the Applicant’s contention that the proposed asphalt and concrete products were unique and new to Hong Kong both in terms of their quality and the use of recycled materials.  The Respondent was however of the view that the use of recycled materials was not a sufficient advance in the manufacturing process, which remained simple in nature.  I will elaborate on this further below when dealing with the Applicant’s allegation that the Respondent made a mistake of fact.

(iii)     Potential environmental impact.

The Respondent considered that its policy against admitting concrete batching and asphalt mixing projects was applicable to the Applicant’s application.  The Respondent therefore rejected the Applicant’s application.

46.    In addition, the Respondent considered that the Applicant’s project might more suitably be located at the proposed Fourth Industrial Estate instead of Tseung Kwan O IE.  At the time when the Applicant’s application came to be decided, the Respondent was yet to conclude the Study as referred to in paragraph 20 above where the feasibility of accommodating more construction-related industries in the Fourth Industrial Estate was being considered.  Pending the outcome of the Study, the Respondent also felt that it was prudent not to process the Applicant’s application at that stage.”

92.It is apparent from the evidence filed and from Mr Fok’s submission at the substantive hearing that when Mr Siu referred to “the respondent” in paragraphs 45 and 46 of his first affirmation, he was really speaking of himself or the management of the respondent, rather than the Committee, which had the delegated function from the board to determine applications.

93.This is indeed a fatal point against the respondent.  The management or Mr Siu simply had no authority to decide such applications.

94.Mr Fok seeks to salvage the situation by arguing that Mr Siu or the management was simply acting as an agent of the Committee in so rejecting the application of Champion City.  He relies on the passage from Wade & Forsyth, op cit, at p 260, referred to above in support of his argument:

“The vital question in most cases is whether the statutory discretion remains in the hands of the proper authority, or whether some other person purports to exercise it.  Thus where the Act said that an inspector of nuisances ‘may procure any sample’ of goods for analysis, it was held that the inspector might validly send his assistant to buy a sample of coffee.  This might be described as mere agency as opposed to delegation.  But that would obscure the true ground, which was that the inspector had in no way authorised his assistant to exercise the discretion legally reposed in himself.”

The case under discussion in Wade & Forsyth was Horder v Scott (1880) 5 QBD 552, a criminal case turning on ascertaining the substance of the statutory offence in question. 

95.Apart from this short passage and the criminal case, Mr Fok has been unable to cite to the Court any authority in support of his argument that the Committee could lawfully allow the management or Mr Siu to act as its agent in handling and rejecting the application of Champion City.  For the sake of argument, I am prepared to assume, without deciding, that it is permissible for a delegatee to leave the implementation of a policy he has lawfully set for exercising his delegated discretion to an agent or servant, so long as the implementation of the policy involves nothing more than administrative or clerical work on the part of the agent.  (Even this limited proposition requires some clarification: as mentioned above, a policy only acts as an aid to the exercise of a discretion; it is not meant to be applied inflexibly or rigidly.  The exercise of the discretion can never be fettered by a policy.  That being the case, it is doubtful – depending on the facts – whether a delegatee of a discretion can simply leave the administrative or clerical implementation of a policy in the hands of an agent or servant, without the delegatee’s looking at the matter personally to decide whether it does not constitute an exceptional case to his policy.) 

96.But leaving that aside, and assuming that one can leave the implementation of a policy, insofar as it only involves administrative or clerical work, to an agent or servant to perform, it still does not help the respondent’s case, on the facts of the present case. 

97.It is quite plain, on the facts, that at least according to the applicant, what was involved in its application was not a run-of-the-mill asphalt mixing and concrete batching proposal.  Put at the lowest, it involved a substantial element of recycling.  It is true that Mr Siu and the management thought otherwise.  But that precisely highlights the fact that in the case of Champion City, there was a genuine and arguable dispute relating to how to categorise Champion City’s proposal.  Put another way, it involved questions of whether, and to what extent, the policies of the Committee would apply to the proposal of Champion City.

98.In relation to those matters or questions, I have no hesitation in concluding that they were not administrative or clerical matters that one could safely leave in the hands of an agent or servant to decide.  The delegatee, namely, the Committee, was the body which had been entrusted with the responsibility to make the decision.  Whether, and if so, to what extent, Champion City’s application fell within its policies, and, in that event, how those policies ought to be applied in relation to Champion City’s application, if at all, were all matters that were within the province of the Committee, as opposed to that of Mr Siu or the management.

99.Mr Fok also seeks to argue that Champion City should have gone back to the management and ask for a meeting or an opportunity to present further information relating to its application, just like what Wise Union did after receiving the management’s letter refusing (initially) its application.  Whilst this may have some relevance to whether the respondent as a whole, including the management, was adopting a rigid policy, it has little, if any, relevance to the issue under discussion.  The issue under discussion is whether Mr Siu or the management had any sub-delegated authority to determine Champion City’s application.  For the reasons explained, they did not.  The fact that Champion City could have, but did not, come back to them after receiving their letter of rejection, cannot possibly turn the unauthorised determination by the management/Mr Siu of Champion City’s application into an authorised one.

Conclusion on Champion City’s case

100.For those reasons, Champion City’s application for judicial review must succeed on this ground.

101.That being the case, I would refrain from saying anything further relating to the merits of Champion City’s application, and how it should be regarded vis-à-vis the policies of the Committee.  For the truth is, those matters have never reached the Committee for discussion and decision, and it is not for this Court to usurp the role of the Committee in dealing with those matters.  Given my conclusion, the application will have to be presented before the Committee for decision.

102.In the evidence filed and at the substantive hearing, there was some discussion regarding the preferred dimensions of the site applied for by Champion City and whether that preferred site was a feasible one.  In my view, this is just one of the matters that has to be dealt with by the Committee.  I do not think it would require Champion City to withdraw its current application and make a new one.  There is simply nothing to stop Champion City from providing supplemental information to the respondent when its application is considered anew by the respondent (via the Committee).

103.For the same reason, I do not propose to deal with the ground of mistake of fact also relied on by Mr Bleach at the hearing.  In substance, it is a matter which should be dealt with by the Committee.

104.There have been other grounds mentioned in the Form 86A.  They have not been pursued at the substantive hearing and I do not wish to say anything about them. 

105.I see no reason not to require the respondent to reconsider Champion City’s application.

Outcome

106.In conclusion, Wise Union’s application for judicial review is dismissed.

107.On the other hand, Champion City’s application for judicial review is allowed.  I grant a declaration that the decision purportedly made by the respondent to reject Champion City’s application as communicated in the respondent’s letter dated 24 November 2008 is unlawful and of no legal effect, and I make an order of certiorari to bring up and quash the relevant decision.  I also make an order of mandamus requiring the respondent to process, consider and decide Champion City’s application anew. 

108.As regards costs, I make the following costs order nisi:

(1)     Subject to the provisions below, in HCAL 12/2009, Wise Union pay to the respondent its costs of the proceedings (including all costs previously reserved), to be taxed if not agreed, with a certificate for two counsel;

(2)     Subject to the provisions below, in HCAL 13/2009, the respondent pay to Champion City its costs of the proceedings, (including all costs previously reserved), to be taxed if not agreed, with a certificate for two counsel;

(3)     The costs of the respective applications to amend the Forms 86A and to introduce further evidence made by Wise Union and Champion City in HCAL 12/2009 and HCAL 13/2009 be paid by the same to the respondent respectively, to be taxed if not agreed; for the purposes of taxation, it is directed that the time (2 hours) taken to hear the applications on 21 September 2009 shall be apportioned equally between the two applications;

(4)     For the purposes of taxation, it is further directed that the remaining time of the substantive hearing on 21 and 22 September 2009 shall be apportioned equally between the two applications for judicial review.

109.I thank counsel for their assistance.

Mr John Bleach SC, Mr Stewart Wong and Miss Elizabeth Cheung, instructed by Robin Bridge & John Liu, for the applicants in both cases

Mr Joseph Fok SC and Ms Yvonne Cheng, instructed by JSM, for the respondent in both cases