Hong Kong Housing Society and Another v. Wong Nai Chung t/a Sun Chung Flower Shop

HCMP 880/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 880 OF 2009

(ON AN INTENDED APPEAL FROM DCCJ NO. 3620 OF 2007)

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Before: Hon Tang VP and Yeung JA in Court

Date of Hearing: 15 December 2009

Date of Judgment: 14 January 2010

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J U D G M E N T

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Hon Tang VP (giving the judgment of the Court):

1.Under the Land Development Corporation Ordinance, Cap. 15 (“LDCO”), the Land Development Corporation (“LDC”) might, under section 5(2)(b) prepare development proposals and implement such proposals.  The LDC might, with the approval of the Secretary for Planning, Environment and Lands (“SPEL”), prepare in accordance with section 13, development schemes for any area within which LDCO might acquire property.  Under section 15 LDCO, the LDC might request SPEL to recommend to the Chief Executive in Council the resumption of land under the Lands Resumption Ordinance, Cap. 124 (“LRO”) if it had been unable to acquire any land the subject of a development scheme or a development purpose under sections 13 and 5 respectively.  However, section 15(4)(b) provided that the Secretary should not make such a recommendation in relation to a section 5(2)(b) proposal unless the application is supported by an assessment by LDC:

“(ii)    … as to the likely effect of the implementation of the proposal …”.

2.LDCO has been repealed and LDC dissolved by section 36(1) of the Urban Renewal Authority Ordinance (Cap. 563) (“URAO”).  The relevant secretary under the URAO is the Secretary for Development (“the Secretary”).

3.It is common ground that there were two types of uncompleted projects upon the dissolution of LDC, namely, ongoing projects and announced projects.  Ongoing projects were those projects where land acquisition had commenced and announced projects were projects announced by LDC in 1998 but land acquisition had not yet started.  The parties have referred to the ongoing and announced projects as the inherited projects.  Section 6(2)(d)(iii) and (iv) of URAO conferred express power to the URA to:

“(d)   implement projects by way of-

……

(iii) the continuation and completion of a development proposal under section 36(4);

(iv)    the continuation and completion of a development scheme under section 36(7);”

It is common ground that notwithstanding the repeal of LDCO, the Secretary could recommend resumption under section 15 of the LDCO and that under section 36(4) URAO such projects:

“(4) … may be continued and completed by the Authority as if the repealed Ordinance had not been repealed and the powers and duties of the Land Development Corporation shall be exercised and performed by the Authority.”

4.Mr Martin Lee SC, who appeared on behalf of the defendant accepted that:

“… all inherited projects had already been publicly announced by the LDC (although there was then no statutory requirement for them to be gazetted under LDCO).” 

5.It is also common ground that apart from the inherited projects, all development proposals for urban renewal would have to comply with section 29 of URAO which also requires a request from the URA to the Secretary to recommend resumption to be supported by:

“(c)    … an assessment by the Authority as to the likely effect of the implementation of the development project …”

6.This appeal concerns development proposal K21 for urban renewal, an announced project under section 5(2)(b) of LDCO.  The defendant was the tenant of the cockloft and other common areas in No 494 Fuk Wing Street, Sham Shui Po, Kowloon (“the property”). 

7.By letter dated 17 December 2004, the plaintiffs requested the Secretary to recommend resumption of the property under section 15(1) of the LDCO.  By the said letter, the URA also requested that the Secretary should confirm that he would treat section 15(4)(c) and (5) of LDCO as having no application to this case in accordance of section 36(5) of the URAO. 

8.Presumably, as a result of the recommendation, resumption was authorized under the LRO.  By the operation of the Land Resumption Ordinance, Cap. 124 (“LRO”), the property was resumed and reverted to the government on 15 October 2005.  The defendant having refused to vacate, the plaintiffs issued a summons for possession by summary judgment against the defendant.

9.The hearing of the summary took place on 11 August 2008 and by a judgment dated 30 January 2009, Deputy District Judge Richard Khaw ordered, inter alia, that vacant possession of the property to be delivered to the plaintiffs.

10.Leave to appeal was refused by the learned District Judge on 24 April 2009.  The defendant applied for leave to appeal to this court by summons dated 8 May 2009.  On 10 July 2009, the defendant applied for a stay of execution of the order of the learned Deputy District Judge.  That application was supported by a 33-page written submissions dated 7 July 2009.  We refused a stay after a hearing on 10 July 2009.  In our judgment given on 22 July 2009, we said we were not satisfied that the proposed appeal was reasonably arguable.  By a judgment of the same date, we refused leave to appeal on paper.  The defendant has renewed his application to us pursuant to O. 59 r. 2B(3). 

11.At the renewed hearing, Mr Lee again relied on the written submission of 7 July 2009.  We will not repeat the reasons we gave when refusing a stay or leave to appeal.  However, Mr Lee also relied on what he described as additional submissions which were set out in a supplemental written submission dated 29 July 2009.  His oral submissions were mainly devoted to the additional submissions.  The additional submissions concerned sections 21 and 22 of URAO.  These submissions or a version of it had been considered and rejected by the learned Deputy District Judge.

12.Sections 21 and 22 URAO require the URA to prepare a corporate plan (for the next 5 years) and a business plan (for the next year).  The corporate plan and the business plan are required to be submitted at the same time.  It is unnecessary to distinguish between sections 21 and 22.  Section21 requires that the corporate plan should cover:

“(a) its programme of proposals to be implemented including commencement dates of implementation, and for each proposal, whether it is to be implemented by way of a development scheme under section 25 or by way of a development project under section 26;

(b)   its programme of implementation for development proposals and development schemes of the description mentioned in section 6(2)(d)(iii) and (iv), including commencement dates and for each project, whether it is to be implemented by way of a development scheme under section 13(1) of the repealed Ordinance or by way of a development proposal under section 5(2)(b) of the repealed Ordinance;”

13.The learned Deputy District Judge described Mr Lee’s argument thus:

“34.   … that owing to the wording of s. 21(3), the Authority and the Secretary are required to comply with the Strategy when dealing with the recommendation for land resumption. …”

14.Section 21(3) provides, where relevant:

“(3) The Authority, when preparing its programme of proposals and its programme of implementation for projects—

(a)   shall follow any guidelines set out in an urban renewal strategy prepared under section 20(1) in relation to the implementation of those proposals and projects;

(b)   shall, as far as is practicable, include proposals of projects of the description mentioned in section 6(2)(d) to the extent as may be set out in such an urban renewal strategy;”

15.It is clear that under the URAO, a section 29 assessment should comply with the Urban Renewal Strategy (“the Strategy”) prepared under section 20 of the URAO.  Para. 29 of the Strategy provides:

“29    Social impact assessment studies should be carried out in two phases as follows - 

(a) a non-obtrusive social impact assessment to be conducted before the publication of the proposed project in the Government Gazette; and 

(b) a detailed social impact assessment after the proposed project has been published in the Government Gazette.”

16.Para. 31 of the URS sets out the main elements which a para. 29(b) SIA should include. 

17.Mr Martin Lee, SC submitted that since an inherited project should be included in a corporate plan and section 21(3)(a) URAO required that the URA:

“(3) … when preparing its programme of proposals and its programme of implementation for projects—

(a)   shall follow any guidelines set out in an urban renewal strategy …”

the assessment under section 15 of the LPCO should also follow the Strategy, in particular, para. 29(b) thereof.

18.He further submitted that:

“7. … the Court should not construe section 36(4) of URAO as would lead to an absurd result, namely, that when the URA proceeds to implement the inherited projects at a later stage, namely, the land assembly stage under section 15 of LDCO, the URA must not follow the guideline set out in the Strategy but must instead follow the former and clearly ‘inadequate’ practice and procedure under the repealed LDCO.”

… the legislative intent must have been that the statutory guidelines in the Strategy should be followed by the URA in each and every step of the implementation of the inherited projects, including the land assembly process under section 15 of LDCO.”

19.It is clear from the judgment at first instance (para. 33) that no issue was raised regarding the corporate plan, nor was there any evidence that the corporate plan had failed to comply with any statutory provisions.  It does not matter but we add that no particular reliance was placed on section 22 below. 

20.Mr Anderson Chow SC, appearing for the plaintiffs, submitted:

“(5)   The ‘programme of proposals and its programme of implementation for projects’ mean just that, i.e. what projects are to be carried out during the 5 year period, in what order, what are the commencement dates, etc. By no stretch of imagination can they be extended to require the URA to carry out social impact assessments in accordance with the requirements laid down in paragraphs 28 to 32 of the Strategy in respect of Project K22, or to submit such assessments to the Secretary when applying for resumption under s.15(4)(b)(ii) of the LDCO.”

21.Mr Lee drew attention to the fact that section 36(4) provides that an inherited project:

“(4) … may be continued and completed by the (URAO) as if the (LDCO) had not been repealed …” (Emphasis Added)

He compared the expression “as if the (LDCO) had not been repealed” with the expression “as if this Ordinance had not been enacted” found in some ordinances.  But the latter expression would not be appropriate, since, for example, the inherited projects would be continued and completed by URA, a creature of URAO.  We do not believe the expression “as if the (LDCO) had not been repealed” supports the argument that the section 15 LDCO assessment should follow the Strategy. 

22.The essence of Mr Lee’s submission is that the section 15 assessment should be a detailed social assessment as required by para. 29(b) of the Strategy.  Para. 29(b) provides for:

“(b)   a detailed social impact assessment after the proposed project has been published in the Government Gazette.””

As noted, it is common ground that no publication in the Government Gazette was required for an inherited project.  Section 23 URAO deals with the publication of a project in a Government Gazette.  Section 23(5) URAO has made clear that section 23 does not apply to inherited projects.

23.We do not believe it is reasonably arguable that the section 15 assessment was defective because it failed to comply with para. 29(b) of the Strategy.

24.For the above reasons, we refuse leave to appeal.  We also make an order nisi that the plaintiffs are to have the costs of this application.  The defendant’s costs are to be taxed in accordance with Legal Aid Regulation.

Mr. Martin Lee, SC & Mr. Lee Siu Him, instructed by Messrs JCC Cheung & Co., assigned by the Director of Legal Aid, for the Defendant.

Mr. Anderson Chow, SC & Ms. Queenie W.S. Ng, instructed by Messrs Kao, Lee & Yip, for the 1^st & 2^nd Plaintiffs.

Defendant's applicaion for leave to appeal to Court of Final Appeal refused by Court of Appeal. Please refer to HCMP880/2009 dated 22 September 2010